B-142353, MAR. 29, 1960

B-142353, MAR. 29, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER (R11.2) DATED MARCH 22, 1960, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO WHETHER RELIEF MAY BE DENIED TO BEEKIL BROTHERS, CHICAGO, ILLINOIS, CLAIMED BECAUSE OF A MISTAKE IN ITS BID, ALLEGED AFTER AWARD, ON ITEM NO. 80 OF SALES CONTRACT NO. N128S- 11836.

THE U.S. NAVAL SUPPLY DEPOT, GREAT LAKES, ILLINOIS, BY SPOT BID SALES LETTER NO. B-105-60-128 DATED JANUARY 12, 1960, OFFERED FOR SALE -- BID OPENING JANUARY 27, 1960--- 84 LOTS OF GOVERNMENT SURPLUS PROPERTY AS DESCRIBED THEREIN AND LOCATED AT CAMP MOFFETT SALVAGE YARD OF THE DEPOT. IN RESPONSE, BEEKIL BROTHERS SUBMITTED, AMONG OTHERS, A BID OFFERING TO PURCHASE FOR $37.76 THE MATERIAL IN LOT NO. 80, DESCRIBED AS "FOOD PREPARATION EQUIPMENT: TOASTERS.' TWO OTHER BIDS OF $3.26 AND $1 WERE ALSO RECEIVED ON THAT LOT. THE BEEKIL BROTHERS' BID OF $37.76, BEING THE HIGHEST, WAS ACCEPTED BY THE CONTRACTING OFFICER ON FEBRUARY 2 AND AWARD OF LOT NO. 80, WITH OTHERS, WAS INCLUDED ON CONTRACT NO. N128S-11836 DATED FEBRUARY 3, 1960. THEREAFTER, WHEN MR. HARRY BEEKIL VISITED THE DISPOSAL ACTIVITY ON FEBRUARY 15 TO MAKE PAYMENT FOR THE MATERIAL PURCHASED BY HIS FIRM HE ALLEGED THAT HE HAD ERRONEOUSLY ENTERED "$37.76" OPPOSITE LOT NO. 80 ON THE BID SHEET AND THAT HE HAD INTENDED ENTERING "$3.76.' FEBRUARY 17 BY LETTER TO THE CONTRACTING OFFICER HE CONFIRMED HIS ALLEGATION OF ERROR AND SUBMITTED HIS WORK SHEET AS EVIDENCE OF THE ERROR AND ALSO OF HIS FIRM'S INTENDED BID. THE FULL PURCHASE PRICE OF THE MATERIAL IN QUESTION HAS BEEN PAID AND THE MATERIAL WAS PICKED UP BY THE PURCHASER ON FEBRUARY 17, 1960.

THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER THE FIRM MADE A MISTAKE IN ITS BID BUT WHETHER THE ACCEPTANCE BY THE CONTRACTING OFFICER OF THE BID AS TO LOT 80 CONSUMMATED A VALID AND BINDING CONTRACT. THE RULE IS WELL ESTABLISHED THAT, WHEN A BIDDER HAS MADE A MISTAKE IN HIS BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE CIRCUMSTANCES WERE SUCH THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER WAS CHARGEABLE WITH NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH ERROR SO AS TO MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH.

ON THE RECORD IT IS CLEAR THAT THE ERROR, AS ALLEGED, WAS DUE SOLELY TO THE NEGLIGENCE OF BEEKIL BROTHERS IN ENTERING ITS BID FROM THE WORK SHEET TO ITS BID SHEET SUBMITTED TO THE DISPOSAL DEPOT AND THAT SUCH ERROR WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THE ERROR, THEREFORE, WAS UNILATERAL AND NOT MUTUAL AND WOULD NOT ENTITLE THE BIDDER TO ANY RELIEF. THE FURTHER QUESTION FOR CONSIDERATION THEN IS WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER WAS MADE IN GOOD FAITH.

THERE WAS NOTHING ON THE BID OF BEEKIL BROTHERS TO INDICATE TO THE CONTRACTING OFFICER THAT THE PRICE OF $37.76 ON LOT NO. 80 WAS NOT AS INTENDED. IT IS ADMINISTRATIVELY REPORTED THAT THE ESTIMATED ACQUISITION COST OF THE MATERIAL IN QUESTION WAS $409.08 AND THAT THERE IS NO RECORD OF PREVIOUS SALES OF THIS TYPE OF MATERIAL. FURTHERMORE, THIS WAS A SALE OF GOVERNMENT SURPLUS PROPERTY AND, ALTHOUGH THE BID OF BEEKIL BROTHERS WAS CONSIDERABLY HIGHER THAN THE OTHER TWO BIDS ON LOT NO. 80, THAT FACT ALONE WOULD NOT BE SUFFICIENT TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF ERROR IN THE BID. IN VIEW OF THE WIDE RANGE OF BIDS ORDINARILY RECEIVED ON SURPLUS GOVERNMENT PROPERTY- - BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR THE CHANCES IT MIGHT WISH TO TAKE FOR RESALE THEREOF--- 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, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES, ETC., TO BE FURNISHED THE GOVERNMENT. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 689. NEITHER DOES IT APPEAR THAT A BID OF $37.76 FOR THE PURCHASE OF SUCH PROPERTY, WHEN COMPARED WITH THE ACQUISITION OF $409.08, WOULD BE CONSIDERED UNREASONABLE TO ANYONE WITH AUTHORITY TO ACCEPT BIDS.

FOR THESE REASONS AND SINCE THE BID WAS REGULAR ON ITS FACE AND SINCE NO ERROR WAS ALLEGED BY THE BIDDER AS TO LOT NO. 80 UNTIL AFTER AWARD OF THE SALE CONTRACT, IT MUST BE HELD THAT THE CONTRACTING OFFICER WAS WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR AND THAT HIS ACCEPTANCE OF THE BID WAS MADE IN GOOD FAITH. SUCH ACCEPTANCE, THEREFORE, RESULTED IN A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO AND VESTED IN THE GOVERNMENT RIGHTS WHICH NO OFFICER OR AGENT OF THE GOVERNMENT IS AUTHORIZED TO WAIVE OR RELEASE. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. MOREOVER, THE RECORD SHOWS THAT AFTER MR. BEEKIL ALLEGED ERROR IN HIS FIRM'S BID HE PAID THE PURCHASE PRICE IN FULL AND REMOVED THE PROPERTY FROM THE GOVERNMENT DISPOSAL SITE. IN THIS CONNECTION, SEE THE CASE OF BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON CO., INC., 133 F.2D 309, WHEREIN THE COURT STATED THAT THE APPELLEE COULD NOT PERFORM THE CONTRACT AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NONE.

CONSEQUENTLY, THERE IS NO LEGAL BASIS FOR AUTHORIZING ANY RELIEF TO BEEKIL BROTHERS AS TO ITEM NO. 80 ON SALES CONTRACT NO. N128S-11836.