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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO LETTER DATED SEPTEMBER 9. WE DENIED THE REQUEST AND ADVISED THE COMPANY THAT THE ACTION OF THE ADMINISTRATIVE OFFICE WAS PROPER. WE NOW HAVE A REQUEST FOR RECONSIDERATION OF THE MATTER AND A SUGGESTION MADE IN BEHALF OF C AND M MACHINE PRODUCTS. WE REALIZE THAT IN THE USUAL CASE REMOVAL OF PROPERTY BY A BIDDER PRECLUDES EXERCISE BY HIM OF THE RIGHT HE WOULD OTHERWISE HAVE TO REPUDIATE THE CONTRACT AND TO FORFEIT AS LIQUIDATED DAMAGES 20 PERCENT OF THE BID PRICE. WE BELIEVE THAT BIDDERS ORDINARILY SHOULD NOT BE PERMITTED TO RETURN THE PROPERTY PURCHASED AND ELECT TO FORFEIT 20 PERCENT OF THEIR BIDS AFTER THEY HAVE TAKEN DELIVERY OF THE PROPERTY. CASES THE REMOVAL OF THE PROPERTY IS ACCOMPANIED BY PAYMENT OF A BALANCE DUE AND REPRESENTS CONSUMMATION OF THE CONTRACT OF SALE.

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B-155032, JAN. 13, 1965

TO ADMIRAL JOSEPH M. LYLE, DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 9, 1964, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, DEFENSE SUPPLY AGENCY, YOUR REFERENCE DSAH-G, REPORTING ON THE REQUEST OF C AND M MACHINE PRODUCTS, INCORPORATED, FOR RESCISSION OF CONTRACT NO. DSA-18 S-1690, WHICH CONCERNED ITEM 42 OF INVITATION NO. 18-S-64-89, DATED MAY 6, 1964.

IN A DECISION DATED OCTOBER 13, 1964, B-155032, WE DENIED THE REQUEST AND ADVISED THE COMPANY THAT THE ACTION OF THE ADMINISTRATIVE OFFICE WAS PROPER.

WE NOW HAVE A REQUEST FOR RECONSIDERATION OF THE MATTER AND A SUGGESTION MADE IN BEHALF OF C AND M MACHINE PRODUCTS, INCORPORATED, THAT THE CONTRACT MENTIONED ABOVE BE CANCELLED; THAT IT BE PERMITTED TO RETURN THE PROPERTY OBTAINED AT THE SALE TO A SURPLUS SALES DEPOT AT ITS OWN EXPENSE; AND THAT IT BE ASSESSED THE 20 PERCENT LIQUIDATED DAMAGES PROVIDED IN THE INVITATION FOR FAILURE TO PICK UP AN ITEM AFTER AWARD.

WE REALIZE THAT IN THE USUAL CASE REMOVAL OF PROPERTY BY A BIDDER PRECLUDES EXERCISE BY HIM OF THE RIGHT HE WOULD OTHERWISE HAVE TO REPUDIATE THE CONTRACT AND TO FORFEIT AS LIQUIDATED DAMAGES 20 PERCENT OF THE BID PRICE. WE BELIEVE THAT BIDDERS ORDINARILY SHOULD NOT BE PERMITTED TO RETURN THE PROPERTY PURCHASED AND ELECT TO FORFEIT 20 PERCENT OF THEIR BIDS AFTER THEY HAVE TAKEN DELIVERY OF THE PROPERTY. IN MANY, IF NOT MOST, CASES THE REMOVAL OF THE PROPERTY IS ACCOMPANIED BY PAYMENT OF A BALANCE DUE AND REPRESENTS CONSUMMATION OF THE CONTRACT OF SALE. IN THE PRESENT CASE THERE ARE PRESENT THE CIRCUMSTANCES THAT THE BIDDER HAS ALLEGED AND SUBMITTED CREDIBLE EVIDENCE TO THE EFFECT THAT HIS BID WAS NOT INTENDED TO HAVE BEEN MADE ON THE PROPERTY ACTUALLY REMOVED; NO BALANCE ON THE BID PRICE WAS DUE BECAUSE OF BID DEPOSITS ON OTHER PROPERTY; AND THE AGENT OF THE BIDDER WHO PICKED UP THE PROPERTY WAS A COMMON CARRIER WITHOUT ANY KNOWLEDGE WHICH MIGHT HAVE BROUGHT THE MISTAKE IN BID TO HIS ATTENTION PRIOR TO ACCEPTANCE OF THE PROPERTY. IN VIEW OF ALL THE CIRCUMSTANCES ATTENDANT IN THIS PARTICULAR CASE UPON ACCEPTANCE OF THE PROPERTY BY C AND M MACHINE PRODUCTS, WE BELIEVE IT WOULD BE PROPER TO ACCEPT RETURN THEREOF WITH FORFEITURE OF 20 PERCENT OF THE BID.

THE C AND M MACHINE PRODUCTS HAS BEEN ADVISED TO COMMUNICATE DIRECTLY WITH YOUR AGENCY FOR FURTHER ADVICE.

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