B-156444, APR. 26, 1965

B-156444, APR. 26, 1965

TO PINDAR, MCELROY, CONNELL AND FOLEY:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED MARCH 31 AND APRIL 1, 1965, RESPECTIVELY, AND SUBSEQUENT LETTER DATED APRIL 14,1965, PROTESTING ON BEHALF OF C. J. LANGENFELDER AND SON AGAINST THE ACTION TAKEN BY THE DIVISION ENGINEER, WALTHAM, MASSACHUSETTS, IN CONNECTION WITH INVITATION FOR BIDS CIVENG-19-016-65-25.

THE INVITATION WAS ISSUED ON JANUARY 22, 1965, BY THE U.S. ARMY CORPS OF ENGINEERS AND SOLICITED BIDS FOR CONSTRUCTION OF THE COLEBROOK RIVER DAM AND APPURTENANT STRUCTURES ON THE FARMINGTON RIVER IN CONNECTICUT AND MASSACHUSETTS. EIGHT BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, AS AMENDED, AND OPENED ON FEBRUARY 25, 1965. THE LOW BID WAS SUBMITTED BY ONEGLIA AND GERVASINI, INC. (O AND G), IN THE AMOUNT OF $5,392,675, WHICH IS $1,023,480 BELOW THE GOVERNMENT ESTIMATE (WITHOUT PROFIT) AND $1,203,975 BELOW LANGENFELDER'S BID, WHICH WAS THE SECOND LOWEST BID. SUBSEQUENT TO BID OPENING, AND UPON REQUEST BY THE CONTRACTING OFFICER FOR VERIFICATION OF THE BID, O AND G, AFTER FIRST CONFIRMING THE BID PRICE, ALLEGED AN ERROR IN ITS BID OF SOME $460,000 AND REQUESTED THAT ITS BID BE INCREASED BY THAT AMOUNT.

AFTER CONSIDERATION OF THE ALLEGED ERROR, THE DOCUMENTARY EVIDENCE SUBMITTED IN SUPPORT THEREOF, AND THE REQUEST FOR CORRECTION OF ITS BID, THE FOLLOWING FINDINGS AND DETERMINATION WERE MADE UNDER DATE OF MARCH 26, 1965, BY THE GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS:

"MISTAKE IN BID ALLEGED BY ONEGLIA AND GERVASINI, INC.

UNDER IFB NO. CIVENG-19-016-65-25

"1.BIDS WERE OPENED IN THE U.S. ARMY ENGINEER DIVISION, NEW ENGLAND, ON 25 JANUARY 1965, FOR THE CONSTRUCTION OF THE COLEBROOK RIVER DAM AND APPURTENANT STRUCTURES, WEST BRANCH FARMINGTON RIVER, CONNECTICUT AND MASSACHUSETTS. THE THREE LOWEST BIDS AND THE GOVERNMENT ESTIMATE FOR THE TOTAL WORK AND FOR ITEM 16, ROCK FILTER, AND ITEM 22, ROCK FILL, WERE AS FOLLOWS:

TABLE

UNIT ITEM UNIT ITEM

PRICE NO. 16 PRICE NO. 22

------------------------------------------ - ONEGLIA AND GERVASINI, INC. $1.00 $ 95,000 $ .18 $198,000 C. J. LANGENFELDER AND

SON, INC. 3.00 285,000 .30 330,000 WHITE OAK EXCAVATORS, INC.

3.20 304,000 .33 363,000 GOVERNMENT ESTIMATE

(W/O PROFIT) 3.65 346,750 .455 285,000

TOTAL

$5,392,675

6,596,650

6,654,010

6,416,155

"2. AFTER BEING ORALLY REQUESTED BY THE GOVERNMENT TO REVIEW ITS BID BECAUSE OF POSSIBLE ERROR, THE LOW BIDDER ALLEGED INFORMALLY ON 1 MARCH 1965 THAT IT HAD MADE AN ERROR IN THE PREPARATION OF ITS BID FOR ITEMS 16 AND 22. HOWEVER, ON 2 MARCH 1965 THE BIDDER SENT A TELETYPE TO THE NEW ENGLAND DIVISION STATING THAT IT HAD NOW REVIEWED ITS BID AND FOUND IT CORRECT. IN VIEW OF THE LARGE DISPARITY BETWEEN THIS BID AND THE GOVERNMENT ESTIMATE, AND THE BIDDER'S INFORMAL ALLEGATION OF ERROR, THE CONTRACTING OFFICER, ON 17 MARCH 1965, REQUESTED THE BIDDER, BY TELEGRAM, TO FURTHER REVIEW ITS BID, PARTICULARLY AS TO THE PRICES SUBMITTED FOR ITEMS 14, 16, 22 AND 33. IN A TELEGRAM DATED 18 MARCH 1965, THE BIDDER STATED THAT IT HAD FOUND MISTAKES WERE MADE IN ITEMS 16 AND 22. THE SWORN STATEMENTS SUBMITTED BY THE BIDDER TO SUBSTANTIATE ITS CLAIM INDICATE THAT FOR BID ITEM 16, THE BIDDER PREPARED TWO PAGES OF ESTIMATE SHEETS, THE FIRST COVERING ITS COSTS OF LOADING AND HAULING TO THE CRUSHER PLANT, AND FROM THE PLANT TO THE DAM AND THE SPREADING AT THE DAM. THE SECOND SHEET COVERS THE COST OF CRUSHING THE ROCK. IT IS ALLEGED THAT THE INTENDED BID FOR THIS ITEM WAS THE TOTAL OF THE COSTS SHOWN ON BOTH SHEETS, OR $3.86 PER CUBIC YARD, BUT AS THE FIRST SHEET WAS INADVERTENTLY MISPLACED, ONLY THE AMOUNT $1.00 PER CUBIC YARD, SHOWN ON THE SECOND SHEET WAS ENTERED AS THE BID. THE BIDDER STATES THAT IT FIRST PREPARED AN ESTIMATE OF ITS PRICE FOR ITEM 22, ARRIVING AT A FIGURE OF EIGHT CENTS PER CUBIC YARD. HOWEVER, UPON RE-EXAMINING THAT PRICE IT CONSIDERED IT TO BE TOO LOW AND A SECOND ESTIMATE WAS PREPARED ON A SEPARATE SHEET FOR THE ITEM IN WHICH ITS COSTS WERE FOUND TO BE TWENTY-FIVE CENTS PER CUBIC YARD. THE BIDDER CLAIMS THAT IT INTENDED TO SUBSTITUTE THE NEW ESTIMATE SHEET FOR THE OLD; HOWEVER, AGAIN INADVERTENTLY, IN THE LAST MINUTE RUSH OF PREPARING A BID, THIS WAS NOT DONE AND THE COST FIGURE OF EIGHT CENTS PLUS TEN CENTS PROFIT WAS USED IN ARRIVING AT A PRICE OF EIGHTEEN CENTS PER CUBIC YARD FOR THAT ITEM, WHEREAS IT SHOULD HAVE BEEN THIRTY-FIVE CENTS PER CUBIC YARD, OR ITS COSTS OF TWENTY-FIVE CENTS PLUS TEN CENTS PROFIT. THE BIDDER HAS SUBMITTED AS EVIDENCE OF ITS ERROR ITS ORIGINAL WORK SHEETS AND SWORN AFFIDAVITS SETTING FORTH HOW THE ERRORS OCCURRED.

"3. THE BIDDER HAS REQUESTED THAT IT BE PERMITTED TO CORRECT ITS BID. THE INTENDED UNIT PRICES OF $3.86 FOR ITEM 16 AND $ .35 FOR ITEM 22 HAD BEEN USED, THE TOTAL BID WOULD HAVE BEEN $5,851,375. AS THE INVITATION FOR BIDS CONTAINS THE "MISTAKES IN BID" PROVISION UNDER WHICH THIS BIDDER WAIVES $125,353.50 OF ANY ALLEGED ERROR, THE BID AS CORRECTED WOULD BE $5,726,021.50.

DETERMINATION AND FINDINGS

"1. AFTER CONSIDERATION OF ALL THE EVIDENCE I FIND THAT (1) ONEGLIA AND GERVASINI, INC. HAS ALLEGED THAT IT MADE A MISTAKE IN ITS BID UNDER IFB NO. CIVENG-19-016-65-25 AND HAS REQUESTED THAT IT BE PERMITTED TO CORRECT THAT BID; (2) THE EXISTENCE OF A MISTAKE HAS BEEN PROVEN BY CLEAR AND CONVINCING EVIDENCE; AND (3) THE INTENDED BID HAS BEEN PROVEN BY CLEAR AND CONVINCING EVIDENCE.

"2. BASED ON THE ABOVE FINDINGS AND PURSUANT TO ASPR 2-406.3 (A) (3), AUTHORITY IS GRANTED TO ONEGLIA AND GERVASINI, INC. TO CORRECT ITS BID UNDER IFB NO. CIVENG-19-016-65-25 SUBJECT TO THE APPLICATION OF THE "MISTAKES IN BID" PROVISION IN THE INVITATION.'

YOUR INITIAL LETTER OF PROTEST WAS DIRECTED PRIMARILY TO REFUSAL OF THE ENGINEERS' GENERAL COUNSEL'S OFFICE TO EITHER FURNISH YOU A COPY OF, OR ALLOW YOU TO EXAMINE, THE ABOVE FINDINGS AND DETERMINATION AND SUPPORTING DOCUMENTS. BY LETTER DATED APRIL 9, 1965, OUR OFFICE HONORED YOUR REQUEST INSOFAR AS FURNISHING YOU A COPY OF THE FINDINGS AND DETERMINATION, BUT REFUSED YOUR REQUEST CONCERNING THE SUPPORTING DOCUMENTS BECAUSE OF THE CONTRACTING AGENCY'S POSITION THAT THE PROVISIONS OF 18 U.S.C. 1905 PRECLUDED DIVULGENCE OF SUCH INFORMATION. HOWEVER, IN ACCORDANCE WITH THE ASSURANCE GIVEN YOU IN OUR LETTER, WE HAVE GIVEN MOST CAREFUL SCRUTINY TO THESE DOCUMENTS IN REACHING OUR DECISION HEREIN.

THE SUBSTANCE OF YOUR PROTEST APPEARS TO BE THAT THE DETERMINATION ALLOWING CORRECTION OF THE O AND G BID IS BOTH CONTRARY TO THE "SPIRIT AND PHILOSOPHY" OF THE COMPETITIVE BID SYSTEM AND THE ,PRINCIPLES" AND "LETTER" OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3. YOUR CONTENTION CONCERNING THE CITED PROVISION OF ASPR APPEARS TO BE THAT THE CONTRACTING OFFICER WAS REQUIRED TO CONSIDER THE BID, IF AT ALL, AS ORIGINALLY SUBMITTED EITHER BECAUSE IT WAS VERIFIED ON MARCH 2, OR BECAUSE THE EVIDENCE SUBMITTED DOES NOT SUPPORT THE ALLEGED MISTAKE. IN EITHER CASE, YOU SUGGEST THAT ASPR 2-406.3 (E) (2) WOULD PRECLUDE ACCEPTANCE OF THE BID BECAUSE IT WAS SO FAR OUT OF LINE WITH THE OTHER BIDS THAT ACCEPTANCE WOULD BE UNFAIR TO OTHER BONA FIDE BIDDERS.

OUR OFFICE HAS LONG RECOGNIZED THE GENERAL RULE THAT BIDDERS SHOULD NOT BE PERMITTED TO CHANGE THEIR BIDS AFTER OPENING TO THE PREJUDICE OF OTHER BIDDERS. NEVERTHELESS, THE STATUTES REQUIRING ADVERTISING FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FULL AND FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES. IN RECOGNITION OF THE FOREGOING PRINCIPLE, OUR OFFICE HAS CONSISTENTLY HELD THAT WHERE A MISTAKE IN A BID IS ALLEGED AFTER OPENING BUT BEFORE AWARD AND THERE IS PRESENTED CLEAR AND CONVINCING EVIDENCE OF THE MISTAKE, HOW IT OCCURRED, AND WHAT THE BID WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED, IF SUCH CORRECTION WOULD NOT AFFECT THE RELATIVE STANDING OF OTHER BIDDERS. B-123562, MAY 10, 1955. IN CONSONANCE WITH THIS PRINCIPLE, THE AUTHORITY TO PERMIT CORRECTION OF BIDS AS PROVIDED IN THE CITED REGULATION WAS GRANTED TO THE MILITARY DEPARTMENTS (SUBJECT TO OUR RIGHT OF REVIEW) BY OFFICE DECISION B -120281, JUNE 29, 1954. IT IS OBVIOUS THAT TO PERMIT CORRECTION OF A BID IN ACCORDANCE WITH THE FOREGOING PRINCIPLE DOES NOT PREJUDICE OTHER BIDDERS SINCE ITS APPLICABILITY DEPENDS ON THE ESTABLISHMENT OF THE BID WHICH WOULD HAVE BEEN SUBMITTED BUT FOR THE MISTAKE. CONSEQUENTLY, THE CORRECTING BIDDER GAINS NO ADVANTAGE FROM HIS KNOWLEDGE OF HIS COMPETITOR'S BIDS. IN SUCH A CASE WE DO NOT FEEL THAT A HIGHER BIDDER HAS ANY RIGHT TO INSIST UPON REJECTION OF A CLEARLY ESTABLISHED LOWER BID, TO THE DETRIMENT OF THE GOVERNMENT.

WITH REGARD TO YOUR CONTENTION THAT THE CONTRACTING OFFICER SHOULD HAVE CONSIDERED THE BID AS ORIGINALLY SUBMITTED AFTER IT WAS VERIFIED BY THE TELEGRAM OF MARCH 2, 1965, WE DIRECT YOUR ATTENTION TO ASPR 2 406.3 (E) (1) WHICH PROVIDES, IN PERTINENT PART, THE "ACTION TAKEN TO VERIFY BIDS MUST BE SUFFICIENT TO EITHER REASONABLY ASSURE THE CONTRACTING OFFICER THAT THE BID AS CONFIRMED IS WITHOUT ERROR OR ELICIT THE ANTICIPATED ALLEGATION OF A MISTAKE BY THE BIDDER.' IN ADDITION TO THE REQUIREMENT OF THE REGULATION THAT THE VERIFICATION MUST BE SUCH AS TO REASONABLY ASSURE THE CONTRACTING OFFICER THAT THE BID CONFIRMED IS WITHOUT ERROR, OUR OFFICE HAS HELD THAT VERIFICATION OF A BID SHOULD BE SUFFICIENTLY ADEQUATE TO DISPEL ANY EXISTING DOUBT THAT THE CONTRACTING OFFICER HAS AS TO THE CORRECTNESS OF A BID. JUNE 21, 1963, B-151538. IN VIEW OF THE WIDE DISPARITY BETWEEN O AND G'S BID, THE GOVERNMENT ESTIMATE, AND THE OTHER BIDS, PLUS THE EARLIER ALLEGATION OF ERROR AND THE INFORMAL AND GENERAL NATURE OF THE ORIGINAL REQUEST FOR VERIFICATION, IT WOULD APPEAR THAT THERE STILL EXISTED, AFTER CONFIRMATION, AMPLE REASON FOR THE CONTRACTING OFFICER TO HAVE REQUESTED FURTHER VERIFICATION OF THE BID, WITH RESPECT TO SPECIFIC ITEMS, PRIOR TO ACCEPTANCE. SEE METRO NOVELTY CO. V. UNITED STATES, 125 F.SUPP. 713.

TURNING TO YOUR ARGUMENTS CONCERNING THE SUFFICIENCY OF THE PROOF SUBMITTED IN SUPPORT OF THE ALLEGED MISTAKES, WE HAVE CAREFULLY EXAMINED THE DOCUMENTS SUBMITTED, IN THE LIGHT OF YOUR OBSERVATIONS, AND CONCLUDE THAT THEY AMPLY SUPPORT THE DETERMINATION OF THE ENGINEERS' GENERAL COUNSEL. WE FURTHER OBSERVE THAT THERE IS NOTHING ON THE FACE OF THE RECORD WHICH WOULD FURNISH ANY BASIS FOR SUSPECTING THAT THE PAPERS SUBMITTED WERE NOT THE ORIGINAL WORK SHEETS WHICH THEY WERE REPRESENTED BY SWORN AFFIDAVITS TO BE.

THE TWO SHEETS CONTAINING THE CALCULATION OF THE COSTS OF THE VARIOUS ELEMENTS INCLUDED IN THE UNIT PRICE FOR ITEM 16 FULLY SUPPORT THE FIGURE OF $3.86 ALLEGED TO HAVE BEEN INTENDED. THE TWO SHEETS OF CALCULATIONS OF THE COST OF ITEM 22 ALSO SUPPORT THE VERIFIED STATEMENTS THAT ONE SHEET, ON WHICH THE 8-CENT COST WAS SHOWN, DID NOT INCLUDE ANY COST FOR USE OF CERTAIN EQUIPMENT CLAIMED TO BE NECESSARY FOR THE WORK INVOLVED. NONE OF THE SHEETS ON WHICH THE COSTS OF THE INDIVIDUAL ITEMS WERE COMPUTED CONTAINED ANY OVERHEAD OR PROFIT; SEPARATE COMPUTATIONS ON SEPARATE SHEETS SHOWED THAT ESTIMATED OVERHEAD COSTS WERE ALLOCATED EITHER AS LUMP SUM OR UNIT PRICE AMOUNTS TO ELEVEN OF THE WORK ITEMS, AND PROFIT WAS DISTRIBUTED AT FIXED AMOUNTS PER UNIT AMONG VARIOUS ITEMS, INCLUDING ITEM 22. THE SHEETS REFERRED TO ARE IN NO WAY DIFFERENT IN PHYSICAL APPEARANCE FROM ANY OTHER OF THE 60-ODD SHEETS SUBMITTED. THE SWORN STATEMENTS OF THE INDIVIDUALS CONCERNED IN THE PREPARATION OF THE BID ARE TO THE EFFECT THAT AFTER FINAL REVIEW OF ALL THE WORK SHEETS, INCLUDING COMPARISON WITH RECORDS OF COSTS OF SIMILAR WORK ON OTHER JOBS, LASTING UNTIL 1:30 IN THE MORNING OF THE BID OPENING DATE, THE APPROVED WORK SHEETS WERE GATHERED UP AND THE FIGURES THEREFROM TRANSCRIBED TO THE BID SCHEDULE, AND THAT IN THE PROCESS THE TWO SHEETS PERTINENT TO THE CLAIM OF ERROR WERE INADVERTENTLY FILED WITH THE RECORDS OF ONE OF THE OTHER JOBS WHICH HAD BEEN CONSIDERED. THESE STATEMENTS RECOUNT EVENTS WHICH DO NOT APPEAR TO BE UNCOMMON IN NORMAL BUSINESS OPERATIONS, AND WHICH ARE SO LIKELY TO HAVE OCCURRED THAT THEY COULD BE REJECTED ONLY UPON THE THEORY THAT THE STATEMENTS OF ALL OF THE INDIVIDUALS CONCERNED WERE DELIBERATELY FALSIFIED. IN THE ABSENCE OF ANY SUGGESTION OF REASON TO JUSTIFY SUCH A SUSPICION, WE FEEL THAT THE STATEMENTS ARE ENTITLED TO BE GIVEN CREDENCE. WE HAVE EXAMINED BOTH THE COURT CASES AND DECISIONS OF OUR OFFICE CITED BY YOU, AND FIND NO AUTHORITY THEREIN WHICH WOULD JUSTIFY US IN TAKING EXCEPTION TO THE DETERMINATION IN THIS CASE. THE ONE DECISION OF OUR OFFICE, 41 COMP. GEN. 289, CITED AS BEING ANALOGOUS TO THE INSTANT CASE, WE THINK IS CLEARLY DISTINGUISHABLE. IN THAT CASE, WHILE THE RECORD CLEARLY DISCLOSED THAT MISTAKES IN CALCULATING THE BID WERE MADE, IT WAS JUST AS CLEAR THAT THE PRICE BID WAS THE PRICE INTENDED TO BE BID. THAT IS NOT THE SITUATION HERE SINCE O AND G'S EVIDENCE AND EXPLANATIONS CLEARLY AND CONVINCINGLY ESTABLISHED BOTH THE EXISTENCE OF A MISTAKE AND THE DIFFERENT PRICE WHICH WAS ACTUALLY INTENDED.

FOR THE REASONS STATED, WE CONCUR IN THE DETERMINATION PERMITTING ONEGLIA AND GERVASINI, INC., TO CORRECT ITS BID, AND YOUR PROTEST IS THEREFORE DENIED.