B-156127, MAR. 18, 1965

B-156127, MAR. 18, 1965

TO THE HONORABLE THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 11, 1965, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, WITH ENCLOSURES, RELATIVE TO AN ALLEGED ERROR IN BIDDING CLAIMED BY THE FIRM OF COWELL AND BROSIO, INC., UNDER INVITATION FOR BIDS NO. 1-64-145, WHICH BECAME DEPARTMENT OF AGRICULTURE CONTRACT NO. 01-495, FOR CONSTRUCTION OF STOCK PROCESSING AND STORAGE BUILDING WITH EMPLOYEE CENTER AND SEED STORAGE BUILDING AT JAMES W. TOUMEY NURSERY, OTTAWA NATIONAL FOREST, WATERS MEET, MICHIGAN.

THE BIDS WERE OPENED ON MAY 13, 1964, AND WERE SOLICITED ON AN ITEM BASIS WITH ALTERNATES FOR TILE, PAINTING AND REFRIGERATION. AWARD WAS MADE TO COWELL AND BROSIO AS LOW BIDDER ON MAY 19, 1964. AWARD INCLUDED ITEM 3 COMBINING THE STOCK BUILDING (ITEM 1) AND THE SEED BUILDING (ITEM 2), ALTERNATE 2--- PAINTING--- AND ALTERNATE 3--- REFRIGERATION. AWARD VALUES OF THESE ITEMS ARE $118,341, $3,850 AND $6,000, RESPECTIVELY. THE ITEM ON WHICH THE ERROR IS ALLEGED IS ALTERNATE 3--- REFRIGERATION. THE PROPOSAL BY COWELL AND BROSIO FOR THIS ALTERNATE PRIOR TO MODIFICATION WAS $20,000. MODIFICATION BY COWELL AND BROSIO BY TELEGRAM RECEIVED PRIOR TO OPENING OF BID ON MAY 13, 1964, REQUESTED THE CONTRACTING OFFICER TO REDUCE THE ORIGINAL PROPOSAL BY $14,000, LEAVING A NET OF $6,000 FOR ALTERNATE 3.

IN LETTERS DATED JULY 15 AND SEPTEMBER 10, 1964, THE CONTRACTOR ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN ITS BID ON ALTERNATE 3 AS A RESULT OF AN ERRONEOUS QUOTATION FROM ITS SUBCONTRACTOR. IT IS STATED THAT THE SUBCONTRACTOR ERRONEOUSLY QUOTED THE PRICE ON 2 AIR- CONDITIONING UNITS INSTEAD OF 12 AS CALLED FOR IN THE DRAWINGS AND SPECIFICATIONS. THE CONTRACTOR CLAIMS THE COST OF 10 UNITS, $526.80 EACH ($5,268) AND 10 EXPANSION VALVES, $18 EACH ($180), OR A TOTAL OF $5,448. ACCORDING TO THE CONTRACTOR THIS FIGURE REPRESENTS THE COST OF UNITS AND VALVES ONLY WITHOUT INSTALLATION OR LABOR COSTS. THE CONTRACTOR HAS FURNISHED PUBLISHED PRICE LISTS SUPPORTING CLAIMED COST OF UNITS AND VALVES AND THE SUBCONTRACTOR'S ORIGINAL BID WORKSHEET SHOWING SOURCE OF SUPPLIER'S QUOTATION. IF THE COWELL AND BROSIO PROPOSAL IS ADJUSTED UPWARD BY ADDITION OF THE CLAIMED $5,448 ITS LOW BIDDER POSITION IS UNCHANGED. THE PROJECT HAS BEEN COMPLETED AND IS READY FOR FINAL INSPECTION.

GENERALLY, AN ERROR IN A SUPPLIER'S QUOTATION IS NOT SUFFICIENT, BY ITSELF, TO AUTHORIZE RELIEF FROM A CONTRACT ENTERED INTO ON THE BASIS OF THAT QUOTATION. HOWEVER, THE FACT THAT THE ERROR MAY BE DUE TO THE CONTRACTOR'S SUPPLIER IS NOT TO BE CONSIDERED AS A BAR TO RELIEF IF THE ATTENDANT CIRCUMSTANCES ARE SUCH THAT IT CANNOT BE SAID THAT THE ACCEPTANCE OF THE BID WAS WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR. IN THE INSTANT CASE THE OTHER RESPONSIVE BIDS RECEIVED FOR ALTERNATE 3 WERE $11,500, $12,364, AND $21,362. ALSO, THE GOVERNMENT ESTIMATE FOR THIS ITEM WAS $25,116. WHILE THE CONTRACTING OFFICER DID NOT QUESTION THE FINAL AMOUNT BID FOR ALTERNATE 3 BECAUSE OF THE TELEGRAPHIC MODIFICATION OF THE CONTRACTOR'S BID FROM $20,000 TO $6,000, WE BELIEVE THAT THE DIFFERENCE BETWEEN THE PRICE QUOTED BY COWELL AND BROSIO FOR ALTERNATE 3 AND BY THE OTHER RESPONSIVE BIDDERS WAS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE CORPORATION'S BID. CONSEQUENTLY, IT IS OUR VIEW THAT THE BID FOR ALTERNATE 3 SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE CORPORATION TO VERIFY ITS BID ON THAT ITEM.

IN THE CIRCUMSTANCES, WE BELIEVE THAT SINCE THE RECORD CLEARLY SHOWS NOT ONLY THE EXISTENCE OF THE ALLEGED ERROR BUT ALSO THE AMOUNT THAT WOULD HAVE BEEN BID BUT FOR THE ERROR, PAYMENT IS AUTHORIZED TO BE MADE TO COWELL AND BROSIO IN THE AMOUNT OF $5,448, AS CLAIMED.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING PAYMENT.