B-124066, JUN. 30, 1955

B-124066, JUN. 30, 1955

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 28, 1955, REQUESTING ON BEHALF OF DENALI-MCCRAY, A CO-VENTURE OF DENALI CONSTRUCTION COMPANY, INC., AND MCCRAY MARINE CONSTRUCTION COMPANY, RECONSIDERATION OF DECISION OF JUNE 7, 1955, B-124066. IT WAS HELD IN THE DECISION THAT THE PRICES OF $1.25 AND $1.10 QUOTED BY THE CO-VENTURERS FOR ITEMS 3 AND 4, RESPECTIVELY, OF THEIR BID FOR THE CONSTRUCTION OF CERTAIN DOCK FACILITIES FOR THE ALASKAN RAILROAD SHOULD NOT BE REGARDED AS LUMP-SUM PRICES FOR PURPOSES OF AWARD.

THE CO-VENTURERS HAVE TAKEN EXCEPTION TO THE RULING ON THE BASIS THAT THE BID SPECIFICALLY ACKNOWLEDGED RECEIPT OF ADDENDUM NO. 1 WHICH REQUIRED LUMP-SUM PRICES TO BE QUOTED ON ITEMS 3 AND 4, AND, HENCE, IT MUST BE CONCLUDED THAT THE BIDDER INTENDED THE BID TO BE RESPONSIVE TO THE INVITATION. ALSO, MUCH IS MADE OF THE REFERENCE IN THE DECISION TO THE BIDDER'S FAILURE TO PROMPTLY ADVISE THE CONTRACTING OFFICER WHAT WAS INTENDED WHEN THE PRICES QUOTED ON ITEMS 3 AND 4 WERE QUESTIONED BY ANOTHER BIDDER AT THE BID OPENING. SUFFICE IT TO SAY, ALTHOUGH THE EVIDENCE ON THIS ASPECT OF THE CASE IS NOT ENTIRELY CONSISTENT, THAT WAS NOT THE PRIMARY REASON FOR THE CONCLUSION REACHED.

THE PRICES OF $1.25 AND $1.10 QUOTED BY THE CO-VENTURERS ON ITEMS 3 AND 4 ARE IN LINE WITH THE PRICES QUOTED BY THE OTHER BIDDERS IF CONSIDERED TO BE UNIT PRICES AS WAS REQUIRED UNDER THE INVITATION AS ORIGINALLY ISSUED. THE BIDDER ALLEGES, HOWEVER, THAT THEY WERE INTENDED AS TOKEN LUMP-SUM BIDS, SINCE THE AWARD ON EITHER ITEM 3 OR 4 COULD ONLY BE MADE IN CONJUNCTION WITH ITEM 1 OR 2, WHICH COVERED THE MAIN PORTION OF THE WORK.

CONCEDING THAT THE CO-VENTURERS INTENDED A LUMP-SUM PRICE FOR ITEMS 3 AND 4, THIS WOULD RESULT IN AN EXTREMELY UNBALANCED BID. IT IS NOT SOUND BIDDING PRACTICE TO SUBMIT UNBALANCED BIDS, PARTICULARLY WHERE, AS HERE, THE ITEMS ARE SUBJECT TO AN UPWARD OR DOWNWARD VARIATION, WITH A CORRESPONDING INCREASE OR DECREASE OF THE AMOUNT QUOTED. IN THE INSTANT CASE, BECAUSE OF THE UNBALANCED BID, THE GOVERNMENT WOULD HAVE HAD TO PERMIT THE BIDDER TO WITHDRAW, IF IT HAD CHOSEN TO ALLEGE ERROR. THERE IS NOTHING ON THE FACE OF THE BID TO INDICATE THAT THE PRICES WERE INTENDED AS TOKEN BIDS. RATHER, THE PRICES ARE IN AN AMOUNT WHICH WOULD HAVE PREVENTED THE GOVERNMENT FROM ASSERTING THAT THEY REPRESENTED ANYTHING OTHER THAN UNIT PRICES AS WERE REQUIRED UNDER THE INVITATION AS ORIGINALLY ISSUED.

THE CO-VENTURERS PLACED THEMSELVES IN A POSITION WHERE, AFTER THE OPENING OF THE BIDS, THEY HAD THE OPTION OF ALLEGING THAT THE PRICES QUOTED ON ITEMS 3 AND 4 WERE EITHER TOKEN BIDS OR UNIT PRICE BIDS. THE CO-VENTURERS ARE THE LOW BIDDER ONLY IF THE PRICES FOR ITEMS 3 AND 4 ARE CONSIDERED AS LUMP-SUM PRICES. IN THE CIRCUMSTANCES, WE FIND NO SOUND BASIS TO MODIFY THE CONCLUSION REACHED IN THE DECISION OF JUNE 7, 1955.