B-145006, MAR. 6, 1961

B-145006, MAR. 6, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 6, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE ELECTRO-FORM MFG. AND RESEARCH CORP., OAKLAND, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N63068S-48257 IS BASED.

IN RESPONSE TO SALES INVITATION B-77-61-63068, ISSUED BY THE U.S. NAVY CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, THE FIRM OF ELECTRO-FORM MFG. AND RESEARCH CORP. SUBMITTED A BID OF $28 EACH ON ITEM 89 OF THE SALES CATALOGUE, DESCRIBED AS FOLLOWS:

CHART

"ITEM 89 FIXTURE RIGGING, KLEVATOR POWER. MFR. DOUGLAS AIRCRAFT CO.

P/N K-5546415. USED ON A4D-1, 2, AIRCRAFT.

ACQUISITION: $9,061.00. APPARENTLY UNUSED - IN GOOD

CONDITION.

EST.WT. 300 LBS. CU 17. IN 29 CARTONS - SOME INCOMPLETE - NOT

PACKED FOR SHIPMENT.

QUANTITY 17 EACH"

TWO OTHER BIDS IN THE RESPECTIVE AMOUNTS OF $0.58823 EACH AND $0.37 EACH WERE RECEIVED ON ABOVE ITEM. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEM 89 ON DECEMBER 19, 1960.

BY LETTER DATED DECEMBER 28, 1960, THE ELECTRO-FORM MFG. AND RESEARCH CORP. ADVISED THE CONTRACTING OFFICER THAT IT HAD MADE AN ERROR IN ITS BID IN THAT IT HAD INTENDED THE PRICE OF $28 ON ITEM 89 AS A LOT PRICE RATHER THAN A UNIT PRICE; THAT A COPY OF THE INVITATION WAS USED BY THE CORPORATION AS A WORKSHEET AND THAT BELOW THE DESCRIPTION OF ITEM 89 IT INSERTED A LOT PRICE OF $28, BUT THAT IN TRANSFERRING THE CORPORATION'S BID PRICE FROM THE WORKSHEET TO THE COPY OF THE BID THE PRICE OF $28 WAS ENTERED AS A UNIT PRICE RATHER THAN A LOT PRICE. THE CORPORATION REQUESTED THAT THE UNIT PRICE FOR ITEM 89 BE CORRECTED TO READ $1.647 EACH AND THAT THE TOTAL PRICE BE CHANGED TO READ $28. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS WORKSHEET, WHICH APPEARS TO BE A PAGE FROM THE INVITATION ON WHICH ITEM 89 WAS LISTED. THE WORKSHEET SHOWS A LOT PRICE OF $28 BELOW THE DESCRIPTION OF ITEM 89. THE CORPORATION ALSO SUBMITTED A PAGE FROM A RETAILER'S BOOK SHOWING THE PRICE FOR THE EQUIPMENT INCLUDED IN ITEM 89 IN WHICH IT WAS INTERESTED.

THERE WAS NOTHING ON THE FACT OF THE BID OF THE CORPORATION TO INDICATE THAT THE PRICE QUOTED THEREIN FOR ITEM 89 WAS OTHER THAN INTENDED. ALTHOUGH THE BID SUBMITTED BY THE CORPORATION WAS CONSIDERABLY HIGHER THAN THE OTHER BIDS RECEIVED ON ITEM 89, 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 CORPORATION. IT SHOULD BE NOTED IN THIS CONNECTION THAT THE UNIT ACQUISITION COST OF THE FIXTURE RIGGING, DESCRIBED AS "APPARENTLY UNUSED--- IN GOOD CONDITION," IS $533. A BID OF $28 PER UNIT WOULD NOT SEEM UNREASONABLE TO ANY ONE WITH AUTHORITY TO ACCEPT BIDS UNLESS, PERHAPS, IT CAN BE SAID THAT THE FIXTURE RIGGING HAD NO VALUE EXCEPT AS SCRAP. FROM THE RECORD SUBMITTED THERE IS NO INDICATION THAT THIS IS THE CASE. MOREOVER, 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, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MIGHT WISH TO TAKE. SEE UNITED STATES V. SABIN METAL CORP., 151 F.SUPP. 683, 689, CITING WITH APPROVAL 16 COMP. GEN. 596, 17 ID. 388, AND ID. 601. IN THE SABIN CASE, SUPRA, THE PRICE DISPARITY ON THE BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30. THE COURT, AT P. 688, SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER.'

IN VIEW OF THE FOREGOING AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD AND THE BID WAS CLEAR AND UNAMBIGUOUS, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID OF THE ELECTRO-FORM MFG. AND RESEARCH CORP. WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. THE UNITED STATES, 100 CT.CL. 120, 163. ANY ERROR THAT WAS MADE IN THE BID OF THE CORPORATION WAS UNILATERAL--- NOT MUTUAL--- AND DOES NOT ENTITLE THE CORPORATION TO RELIEF FROM ITS OBLIGATION UNDER THE CONTRACT. SEE EDWIN DOUGHERTY AND M. H. OGDEN V. THE UNITED STATES, 102 CT.CL. 249; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, THERE APPEARS TO BE NO LEGAL BASIS FOR RELIEVING THE ELECTRO -FORM MFG. AND RESEARCH CORP. FROM LIABILITY UNDER THE TERMS OF CONTRACT NO. N63068S-48257, WHICH IS IN ACCORDANCE WITH ITS ACCEPTED BID.