Source: https://www.gao.gov/products/B-143408
Timestamp: 2019-04-23 20:35:45+00:00

Document:
TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JULY 5. TO HAVE BEEN MADE IN HIS BID ON WHICH CONTRACT NO. N60258S 9580 IS BASED. IT IS REPORTED THAT THE ACQUISITION COST OF THE MATERIAL COVERED BY ITEM 7 WAS ESTIMATED TO BE $1. SKAGGS WAS ACCEPTED AS TO THAT ITEM ON APRIL 22. IN WHICH HE STATED THAT HE WOULD NOT ACCEPT DELIVERY OF ITEM 7 UNLESS HE WAS PERMITTED TO CORRECT HIS BID PRICE ON THAT ITEM. SKAGGS ADVISED THE DISPOSAL OFFICER THAT HE HAD MADE AN ERROR IN HIS BID AND THAT HIS BID PRICE SHOULD HAVE READ $125 INSTEAD OF $250. SKAGGS WAS HIGHER THAN THE OTHER BIDS RECEIVED ON ITEM 7. 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 MR.
REFERENCE IS MADE TO A LETTER DATED JULY 5, 1960, 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 PAUL A. SKAGGS, WIRE ROPE, GARDEN GROVE, CALIFORNIA, TO HAVE BEEN MADE IN HIS BID ON WHICH CONTRACT NO. N60258S 9580 IS BASED.
THE LONG BEACH NAVAL SHIPYARD, TORRANCE ANNEX, TORRANCE, CALIFORNIA, BY SITE SALES LETTER NO. SSL-25-60-60258 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, ONE LOT CONSISTING OF SEVEN PALLETS OF MISCELLANEOUS WIRE ROPE WEIGHTING, INCLUDING THE REELS, APPROXIMATELY 4,800 POUNDS, ITEM 7. IT IS REPORTED THAT THE ACQUISITION COST OF THE MATERIAL COVERED BY ITEM 7 WAS ESTIMATED TO BE $1,700. IN RESPONSE MR. PAUL A. SKAGGS SUBMITTED A BID OFFERING TO PURCHASE ITEM 7 FOR THE SUM OF $250. THE BID OF MR. SKAGGS WAS ACCEPTED AS TO THAT ITEM ON APRIL 22, 1960.
BY LETTER DATED APRIL 28, 1960, IN WHICH HE STATED THAT HE WOULD NOT ACCEPT DELIVERY OF ITEM 7 UNLESS HE WAS PERMITTED TO CORRECT HIS BID PRICE ON THAT ITEM, MR. SKAGGS ADVISED THE DISPOSAL OFFICER THAT HE HAD MADE AN ERROR IN HIS BID AND THAT HIS BID PRICE SHOULD HAVE READ $125 INSTEAD OF $250. IN A LETTER DATED MAY 13, 1960, MR. SKAGGS STATED THAT HE INTENDED TO BID $50 PER TON ON THE 4,800 POUNDS (APPROXIMATELY 2 1/2 TONS) OF MATERIAL COVERED BY ITEM 7 AND THAT HE INSTRUCTED ONE OF HIS OFFICE GIRLS TO FILL OUT THE BID ACCORDINGLY, AND THAT SHE FAILED TO CONVERT THE 4,800 POUNDS TO A TONNAGE BASIS AND ERRONEOUSLY FILLED OUT THE BID ON THE BASIS OF A PRICE OF $50 PER 1,000 POUNDS.
THE LIST OF BIDS SHOWS THAT SEVEN OTHER BIDDERS ON ITEM 7 QUOTED PRICES RANGING FROM $157.99 TO $6. ALTHOUGH THE BID OF MR. SKAGGS WAS HIGHER THAN THE OTHER BIDS RECEIVED ON ITEM 7, 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 MR. SKAGGS. 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 UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 388; AND ID. 601. SEE, ALSO, 16 COMP. GEN. 976; 28 ID. 261; AND ID. 550. THE PRESENT RECORD INDICATES THAT THE ACCEPTANCE OF THE BID OF PAUL A. SKAGGS WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. CONSEQUENTLY, IT MUST BE HELD THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT. 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 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 HIS LETTER OF MAY 13, 1960, MR. SKAGGS INADVERTENTLY USED THE WRONG BASIS IN COMPUTING HIS BID PRICE, SUCH ERROR WAS DUE SOLELY TO HIS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID OF MR. SKAGGS WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE MR. SKAGGS TO RELIEF FROM HIS OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN, ET AL V. UNITED STATES. 56 F.SUPP. 505, 507.

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