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B-184620 1 (1975-11-11)

handle is hein.gao/gaobadctl0001 and id is 1 raw text is: ~~~&~ IT 17 0 H ~L ~Ir TAT E S ';S H N G T UN D. C 2 0 5 9 FILE: B-184620 DATE: November 11, 1975 MATTER OF: J. Faraldo Sons, Inc. DIGEST: Where purchaser bid on multiple items of surplus aluminum scrap and unsuccessful item bids were in line with median bid and current market appraisal, but successful bid on similar item was in excess of four times the next high bid and more than five times the current market appraisal, agency may rescind sales contract at bidder's request, since contracting officer was on constructive notice of possibility of mistake and failed to verify bid prior to award. This case arises from the request of the Defense Supply Agency (DSA) for our concurrence in its determination that Sales Contract No. 27-5251-107 may be rescinded for mistake. The contract was awarded to J. Faraldo Sons, Inc. (Faraldo), under Invitation for Bids No. 27-5251, which advertised for sale various items of surplus property, including clean aluminum scrap (Items 23, 24, and 25, all located at Bayonne, New Jersey). The record indicates that Faraldo was the successful bidder on Item 24 at a high bid price of $0.51 per pound. Faraldo claims that it intended to submit a bid of $0.051 per pound and that the bid reflects a clerical error, as is supported by its work sheets. It appears that the Faraldo bid on Item 24 is more than four times the next high bid ($0.1234 per pound), eight times the median bid ($0.06 per pound), and five times the current market appraisal as established prior to the bid opening ($0.10). We note that Faraldo bid $0.051 per pound on Item 23 and it submitted a bid of $0.081 per pound on Item 25, both of which were similar to Item 24. While in 49 Comp. Gen. 199, 202 (1969), we noted that generally, in sales of surplus property, the existence of a substantial discrepancy between the erroneous bid and the second high bid or the current market appraisal would not necessarily * * * place the contracting officer on notice of mistake * * *-we stated that: - 1 -

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