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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO A LETTER DATED APRIL 20. FIFTEEN OTHER BIDS WERE RECEIVED FOR THE ITEM. THE TOTAL ACQUISITION COST WAS SLIGHTLY OVER $1. IT IS FURTHER REPORTED THAT BY TELEPHONE MESSAGE OF DECEMBER 5. THE CORPORATION NOTIFIED THE CHIEF OF THE SURPLUS SALES OFFICE THAT UPON RECEIPT OF A COPY OF THE AWARD IT WAS DISCOVERED THAT IT ERRONEOUSLY HAD INSERTED THE PRICE INTENDED FOR ITEM NO. 30 IN THE SPACE PROVIDED FOR ITEM NO. 29. WHILE THERE IS A SUBSTANTIAL PRICE DISPARITY BETWEEN THE BID OF THE CORPORATION AND THE 15 OTHER BIDS RECEIVED FOR THE ITEM. THE FACT THAT THE CORPORATION'S BID WAS 58 PERCENT OF THE ACQUISITION COST MAY NOT BE CONSIDERED TO BE EXCESSIVE.

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B-148746, MAY 15, 1962

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO A LETTER DATED APRIL 20, 1962, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, DEFENSE SUPPLY AGENCY, REQUESTING OUR DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN WITH RESPECT TO THE RELIEF SOUGHT BY BILL SLOMAN MACHINERY, INC., DETROIT, MICHIGAN, UNDER SALE TRANSACTION NO.O.I. 4574, IN VIEW OF THE CIRCUMSTANCES REPORTED.

IN RESPONSE TO SALE INVITATION NO. 33-167-S-62-32, ISSUED ON OR ABOUT OCTOBER 30, 1961, BY THE COLUMBUS CONSOLIDATED SURPLUS SALES OFFICE, COLUMBUS, OHIO, BILL SLOMAN MACHINERY, INC., SUBMITTED A BID DATED NOVEMBER 1, 1961, OFFERING TO PURCHASE, AMONG OTHERS, ITEM NO. 29, COVERING ONE LL,"2BMA" AVEY, SGL.SPDL., ETC., FOR $1,102. FIFTEEN OTHER BIDS WERE RECEIVED FOR THE ITEM, WHICH RANGED FROM $387.88 TO $11.27. THE TOTAL ACQUISITION COST WAS SLIGHTLY OVER $1,900. BY NOTICE OF AWARD DATED DECEMBER 5, 1961, THE SURPLUS SALES OFFICE AWARDED ITEMS NOS. 27 AND 29 TO BILL SLOMAN MACHINERY, INC., IN THE TOTAL AMOUNT OF $2,504. IT IS FURTHER REPORTED THAT BY TELEPHONE MESSAGE OF DECEMBER 5, 1961, THE CORPORATION NOTIFIED THE CHIEF OF THE SURPLUS SALES OFFICE THAT UPON RECEIPT OF A COPY OF THE AWARD IT WAS DISCOVERED THAT IT ERRONEOUSLY HAD INSERTED THE PRICE INTENDED FOR ITEM NO. 30 IN THE SPACE PROVIDED FOR ITEM NO. 29. THE CORPORATION ADVISED FURTHER THAT IT HAD NO INTENTION OF BIDDING ON ITEM NO. 29 AND THAT IT DID NOT WANT THE DRILL COVERED BY THAT ITEM. IN VIEW OF THIS, THE CORPORATION ASKS TO BE RELIEVED OF ITS OBLIGATION TO PURCHASE ITEM NO. 29.

WE FIND NOTHING IN THE RECORD BEFORE US PROVIDING A BASIS FOR CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF BILL SLOMAN MACHINERY, INC., ON ITEM NO. 29. WHILE THERE IS A SUBSTANTIAL PRICE DISPARITY BETWEEN THE BID OF THE CORPORATION AND THE 15 OTHER BIDS RECEIVED FOR THE ITEM, SUCH DIFFERENCE, WITHOUT MORE, DOES NOT PROVIDE A BASIS FOR ESTABLISHING NOTICE OF PROBABLE ERROR IN VIEW OF THE WIDE VARIANCE IN BIDS GENERALLY RECEIVED IN SALES OF GOVERNMENT SURPLUS PROPERTY. MOREOVER, THE FACT THAT THE CORPORATION'S BID WAS 58 PERCENT OF THE ACQUISITION COST MAY NOT BE CONSIDERED TO BE EXCESSIVE. IN THIS REGARD, THE CONTRACTING OFFICER STATES THAT EXPERIENCE HAS SHOWN THAT IT IS NOT POSSIBLE TO PREDICT A MAXIMUM PRICE WHICH WOULD BE CONSIDERED REASONABLE FOR SUCH SURPLUS PRODUCTS. IT IS FURTHER REPORTED THAT ITEMS IN THIS GENERAL CATEGORY OFTEN BRING A HIGHER RETURN THAN IS REALIZED ON SURPLUS SALES GENERALLY AND THAT OTHER AWARDS UNDER THIS SAME SALE INVITATION WERE IN EXCESS OF 40 PERCENT OF THE ACQUISITION COST. UNDER THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR GRANTING ANY RELIEF IN THE MATTER.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S REPORT DATED DECEMBER 11, 1961, ARE RETURNED HEREWITH.

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