B-125978, NOV. 29, 1955

B-125978, NOV. 29, 1955

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 3, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN REGARDING AN ERROR THE ALUMINUM DIVISION OF THE ATLANTIC STEEL AND IRON COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. N288S 40270 IS BASED.

BY SALES INVITATION NO. B-73-55, THE NAVAL AVIATION SUPPLY DEPOT, PHILADELPHIA, PENNSYLVANIA, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, 37,642 POUNDS OF ALUM-ALLOY, LEAD, BRASS, BRONZE, COPPER AND STEEL BARS, STRIPS, PLATES AND SHEETS, ITEM 10. IN RESPONSE, THE ALUMINUM DIVISION OF THE ATLANTIC STEEL AND IRON COMPANY SUBMITTED A BID OFFERING TO PURCHASE, AMONG OTHER ARTICLES, THE MATERIAL COVERED BY ITEM 10 AT A PRICE OF $0.193 PER POUND. THE BID OF THE COMPANY, WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $11,845.56, WAS ACCEPTED AS TO ITEM 10 ON JUNE 21, 1955.

IN A MEMORANDUM DATED AUGUST 19, 1955, FROM THE COMMANDING OFFICER, NAVAL AVIATION SUPPLY DEPOT, PHILADELPHIA, PENNSYLVANIA, TO OUR OFFICE, IT WAS STATED THAT ON JUNE 28, 1955, A REPRESENTATIVE OF THE ATLANTIC STEEL AND IRON COMPANY TELEPHONED ALLEGING THAT AN ERROR HAD BEEN MADE IN THE COMPANY'S BID IN THAT ITS BID PRICE OF $0.193 PER POUND FOR ITEM 10 WAS BASED ON THAT ITEM CONTAINING APPROXIMATELY 90 PERCENT AND NOT 40 PERCENT ALUMINUM AND THAT THE ERROR OCCURRED WHEN IT CONFUSED ITEM 10 WITH ITEM 9 WHICH, IT STATED, HAD A HIGHER ALUMINUM CONTENT.

IN A CONFIRMING LETTER DATED JULY 26, 1955, THE COMPANY STATED THAT IN COMPUTING ITS BID PRICE FOR ITEM 9, WHICH CONTAINED APPROXIMATELY 90 PERCENT BY WEIGHT OF ALUMINUM, IT ARRIVED AT A BID PRICE OF $0.193 PER POUND; THAT SUCH PRICE WAS INADVERTENTLY INSERTED OPPOSITE ITEM 10 WHICH CONTAINED APPROXIMATELY 40 PERCENT ALUMINUM; AND THAT THE LOT COVERED BY ITEM 10 CONTAINED APPROXIMATELY 50 PERCENT STEEL WHICH, IT STATED, HAS A SCRAP VALUE OF APPROXIMATELY $0.0125 PER POUND. THE COMPANY REQUESTED THAT THE PURCHASE PRICE OF ITEM 10 BE REFUNDED TO IT.

IT APPEARS THAT AFTER AN EXCHANGE OF CORRESPONDENCE IN WHICH THE COMPANY INDICATED THAT IT DID NOT INTEND TO REMOVE THE MATERIAL COVERED BY ITEM 10, THE CONTRACTING OFFICER ADVISED THE COMPANY BY LETTER DATED AUGUST 18, 1955, THAT IN ACCORDANCE WITH PARAGRAPH 18 OF THE GENERAL SALE TERMS AND CONDITIONS OF ITS BID, 20 PERCENT OF THE CONTRACT PRICE OF ITEM 10, OR $1,452.98, WAS BEING RETAINED FROM ITS BID DEPOSIT AS LIQUIDATED DAMAGES AND THAT THE BALANCE OF ITS BID DEPOSIT WOULD BE REFUNDED TO IT WITHIN A FEW DAYS.

THE ABSTRACT OF BIDS SHOWS THAT EIGHT OF THE NINE OTHER BIDDERS ON ITEM 10 QUOTED PRICES RANGING FROM $0.14891 PER POUND TO $0.0828 PER POUND AND THAT THE NINTH BIDDER QUOTED A LOT PRICE OF $2,505.11 ($0.06655 PER POUND) FOR THAT ITEM. ALTHOUGH THE BID OF THE ATLANTIC STEEL AND IRON COMPANY WAS SOMEWHAT HIGHER THAN THE OTHER BIDS RECEIVED ON ITEM 10, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY ON THE ITEM. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE, AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY FROM THE GOVERNMENT, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976; 28 ID. 261; ID. 550. THE PRESENT RECORD INDICATES THAT THE ACCEPTANCE OF THE BID OF THE ATLANTIC STEEL AND IRON COMPANY WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. CONSEQUENTLY, IT MUST BE HELD THAT THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 C.CLS. 120, 163. IF, AS STATED IN ITS LETTER OF JULY 26, 1955, THE ATLANTIC STEEL AND IRON COMPANY INADVERTENTLY INSERTED THE PRICE INTENDED FOR ITEM 9 OPPOSITE ITEM 10, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL., 93 U.S. 55, 61. ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE THERETO, THERE APPEARS TO BE NO LEGAL BASIS FOR REFUNDING TO THE ATLANTIC STEEL AND IRON COMPANY THE AMOUNT WITHHELD FROM ITS BID DEPOSIT BY THE ADMINISTRATIVE OFFICE AS LIQUIDATED DAMAGES IN ACCORDANCE WITH THE TERMS OF ITS BID.

THE PAPERS, WITH THE EXCEPTION OF THE COMMANDING OFFICER'S MEMORANDUM OF AUGUST 19, 1955, ARE RETURNED.