B-147881, FEB. 20, 1962

B-147881, FEB. 20, 1962

TO ALGERNON BLAIR, INCORPORATED:

WE HAVE YOUR LETTER OF FEBRUARY 8, 1962, WITH ENCLOSURES, ALLEGING AN ERROR IN THE BID SUBMITTED BY YOUR FIRM IN RESPONSE TO INVITATION FOR BIDS NO. ENG-01-076-62-24, ISSUED NOVEMBER 1, 1961, BY THE CORPS OF ENGINEERS, FOR CONSTRUCTION WORK AT THE REDSTONE ARSENAL. YOU ALSO REQUEST RECONSIDERATION OF OUR DECISION 41 COMP. GEN. - , B-147881, JANUARY 22, 1962, IN WHICH WE CONCLUDED THAT THE BID SUBMITTED BY THE GREENHUT CONSTRUCTION COMPANY SHOULD BE CONSIDERED FOR AWARD AS CORRECTED.

THE INVITATION SET OUT THE WORK TO BE PERFORMED IN TWO SCHEDULES. THE FIRST OF THESE, DESIGNATED ALTERNATE A, CONSISTS OF A BASE BID ON ITEMS 1 THROUGH 76, PLUS FOUR ADDITIONAL ITEMS DESIGNATED ADDITIVE ALTERNATES 1 THROUGH 4. THE SECOND SCHEDULE, DESIGNATED ALTERNATE B, CONSISTS OF A BASE BID ON ITEMS 81 THROUGH 158 (ITEMS 152, 153, 154, AND 155 OF WHICH ARE IDENTICAL WITH ADDITIVE ALTERNATES 1, 2, 3, AND 4 OF THE FIRST SCHEDULE), PLUS THREE ADDITIONAL ITEMS DESIGNATED ADDITIVE ALTERNATES 6, 8, AND 9. THE LARGEST SINGLE ITEM IN BOTH SCHEDULES IS A BUILDING DESIGNATED AS ITEM 1 IN THE FIRST SCHEDULE AND ITEM 81 IN THE SECOND SCHEDULE.

BIDS WERE OPENED ON DECEMBER 15, 1961. THE BIDS FOR THE BUILDING AND THE TOTALS FOR EACH SCHEDULE SUBMITTED BY GREENHUT AND YOUR FIRM WERE AS FOLLOWS:

TABLE

SCHEDULE A SCHEDULE B BIDDER BUILDING TOTAL BUILDING TOTAL GREENHUT $2,890,000.00 $3,781,871.10 $3,781,871.10 $4,840,180.04 BLAIR

3,000,462.00 3,823,259.00 3,002,224.00 3,990,771.50

GREENHUT ALLEGED THAT ITS TOTAL BID FOR SCHEDULE B, ON WHICH IT HAS BEEN DETERMINED TO MAKE AWARD, WAS OVER-STATED BY $891,875.10. THE ERROR APPEARS TO HAVE RESULTED FROM CARRYING OVER THE TOTAL BID FOR SCHEDULE A, RATHER THAN THE BUILDING BID FOR THAT SCHEDULE, AS THE BUILDING BID FOR SCHEDULE B. WE CONCLUDED IN OUR DECISION OF JANUARY 22, 1962, THAT THE GREENHUT BID COULD BE CORRECTED, SINCE THE ERROR AND THE INTENDED BID PRICE WERE SUBSTANTIALLY ASCERTAINABLE FROM THE BID DOCUMENTS THEMSELVES. AS CORRECTED, THE GREEENHUT BID ON SCHEDULE B, WITH THE ADDITIVE ALTERNATES, IS $3,948,304.95 AS COMPARED TO $3,990,771.50 FOR ALGERNON BLAIR.

BY TELEGRAM OF JANUARY 23, 1962, (THE DAY AFTER OUR DECISION WAS ISSUED), YOU ALLEGED AN ERROR OF $50,000 IN YOUR FIRM'S BID. AWARD IS BEING WITHHELD BY THE CONTRACTING AGENCY PENDING DISPOSITION OF OF THIS CLAIM OF ERROR.

THE ALLEGED ERROR IN YOUR BID IS SAID TO HAVE ARISEN BECAUSE A DECREASE IN THE ESTIMATED COST OF CERTAIN WORK TO BE SUBCONTRACTED WAS SET OUT IN AN ADJUSTMENT SHEET AS $100,000 WHEN IN FACT IT AMOUNTED TO $150,000 (THE DIFFERENCE BETWEEN $850,000 AND $700,000). BY LETTER OF JANUARY 23, 1962, THE CIRCUMSTANCES OF THE ERROR CLAIMED IN YOUR BID WERE SET OUT IN GREATER DETAIL AND WERE SUPPORTED BY SWORN STATEMENTS FROM PERSONNEL ACTUALLY INVOLVED.

THE ACTING DISTRICT ENGINEER AT MOBILE HAS CONCLUDED THAT THE EVIDENCE SUBMITTED BY YOU IN SUBSTANTIATION OF YOUR CLAIM IS CLEAR AND CONVINCING AND JUSTIFIES CORRECTION. THE DEPUTY DIVISION ENGINEER CONCURS THAT THE ERROR CLAIMED AND THE AMOUNT THEREOF HAVE BEEN PROVEN BUT HE RECOMMENDS AGAINST CORRECTION ON THE GROUNDS THAT THEY ARE NOT ASCERTAINABLE SUBSTANTIALLY FROM THE BID DOCUMENTS IN ACCORDANCE WITH THE PROVISIONS OF ASPR AND OUR DECISIONS AS SET OUT MORE FULLY BELOW.

ASPR 2-406.3 (A) (3) PROVIDES, AS INDICATED IN OUR EARLIER DECISION ON THE MATTER, THAT WHERE AN ERROR IN BID IS ALLEGED AFTER OPENING AND PRIOR TO AWARD CORRECTION MAY BE PERMITTED PROVIDING THE ERROR AND THE INTENDED BID ARE ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE. HOWEVER, TO PERMIT CORRECTION WHERE ANOTHER BID WOULD BE DISPLACED, THE MISTAKE AND THE INTENDED BID MUST BE ASCERTAINABLE SUBSTANTIALLY FROM THE BID DOCUMENTS THEMSELVES. THE REGULATORY PROVISION IS IN CONFORMITY WITH OUR DECISION PUBLISHED AT 37 COMP. GEN. 210, 212, WHICH SETS OUT THE RULE AND THE REASONS THEREFORE AS FOLLOWS:

"HOWEVER, WE HAVE ALMOST NEVER PERMITTED A CORRECTION OF AN ERROR IN BID WHICH WOULD RESULT IN A BID NOT THE LOWEST SUBMITTED BECOMING LOWEST, AND THE ONLY RECENT CASE INVOLVING SUCH A SITUATION, B-128175, JUNE 19, 1956, WAS ONE IN WHICH NOT ONLY THE ERROR BUT THE AMOUNT OF THE INTENDED BID WAS ASCERTAINABLE ON THE FACE OF THE INVITATION AND BID, SO THAT RESORT TO THE BIDDER'S WORK PAPERS OR OTHER EXTRANEOUS EVIDENCE WAS NOT ESSENTIAL. WHERE CORRECTION IS ALLOWED IN A BID WHICH IS ON ITS FACE THE LOWEST RECEIVED, AND THE CORRECTION DOES NOT MAKE IT HIGHER THAN THE NEXT LOWEST BID, THE RIGHTS OF OTHER BIDDERS ARE NOT SUBSTANTIALLY AFFECTED; BUT IN A CASE SUCH AS HERE PRESENTED, WHERE A DOWNWARD CORRECTION WOULD RESULT IN DISPLACEMENT OF ONE OR MORE OTHER BIDDERS, WE FEEL THAT THE INTEREST OF THE GOVERNMENT IN PRESERVING AND MAINTAINING THE COMPETITIVE BIDDING SYSTEM REQUIRES THAT THE RIGHTS OF OTHER BIDDERS BE CONSIDERED AS CALLING FOR DENIAL OF THE CORRECTION, EXCEPT WHERE IT CAN BE ASCERTAINED SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF.'

OUR DETERMINATION WITH RESPECT TO WHETHER AN ALLEGED ERROR MAY BE CORRECTED IS ESSENTIALLY BASED ON AN EX PARTE PROCEEDING AND ANOTHER BIDDER WHO WOULD BE MATERIALLY AFFECTED THEREBY HAS NO REAL OPPORTUNITY TO ATTACK THE VALIDITY OF EXTRANEOUS EVIDENCE OFFERED IN SUPPORT OF CORRECTION BY THE TIME-TESTED MEANS AVAILABLE IN THE USUAL JUDICIAL HEARING. WHERE CORRECTION WOULD NOT RESULT IN DISPLACEMENT OF ANOTHER BIDDER, THE MATTER IS PRIMARILY ONE BETWEEN THE OSTENSIBLE LOW BIDDER AND THE GOVERNMENT, BOTH OF WHOM ARE REPRESENTED IN THE PROCEEDINGS. THE LIMITATION IN OUR METHOD OF OPERATION IS SIGNIFICANT, HOWEVER, WHERE ANOTHER BIDDER'S STANDING WOULD BE MATERIALLY AFFECTED. FOR THIS REASON THE MAINTENANCE OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM, A CORNERSTONE OF GOVERNMENT CONSTRUCTION PROCUREMENT, REQUIRES THE MORE RIGID RULE GOVERNING CORRECTION WHERE DISPLACEMENT WILL RESULT.

THE RULE PERMITTING CORRECTION UPON THE PRESENTATION OF CLEAR AND CONVINCING EVIDENCE HAS IN PRACTICE BEEN APPLIED ONLY IN SITUATIONS WHERE THE BID BOTH IF CORRECTED AND AS SUBMITTED IS LOWER THAN ANY OTHER BID. THE NECESSITY DOES NOT APPEAR TO HAVE ARISEN HERETOFORE TO CONSIDER HOW THE RULE SHOULD BE APPLIED WHERE TWO BIDDERS ARE ALLEGING ERROR. WHERE, AS HERE, ERROR IS ALLEGED BY TWO BIDDERS, AND ONE INTENDED BID IS ASCERTAINABLE SUBSTANTIALLY FROM THE BID ITSELF WHILE THE OTHER INTENDED BID MUST BE SHOWN BY REFERENCE TO THE BIDDER'S OWN WORKSHEETS, IT IS OUR VIEW THAT PRIORITY SHOULD BE GIVEN TO THE CORRECTION ASCERTAINABLE FROM THE BID ITSELF. WHERE A BIDDER ASKS THAT HIS BID BE CORRECTED IN ORDER TO IMPROVE HIS RELATIVE POSITION IN THE STANDINGS FOR AWARD OVER ANOTHER BIDDER, WHETHER THAT OTHER BIDDER HAS ALLEGED ERROR OR NOT, WE BELIEVE THE RULE GOVERNING DISPLACEMENT CORRECTIONS IS APPLICABLE, AND THE CORRECTION MUST BE SUPPORTED SUBSTANTIALLY BY THE BID DOCUMENTS THEMSELVES. THEREFORE, WE CANNOT, IN THIS INSTANCE, PERMIT CORRECTION OF THE ERROR YOU ALLEGE.

IN YOUR LETTER OF FEBRUARY 8, 1962, YOU CITE, IN SUPPORT OF YOUR CONTENTION THAT DOWNWARD CORRECTION SHOULD BE PERMITTED, PARAGRAPH 7 OF THE INSTRUCTIONS TO BIDDERS APPEARING ON STANDARD FORM 22 WHICH PROVIDES THAT AN OTHERWISE SUCCESSFUL BIDDER MAY MAKE THE TERMS OF THE BID MORE FAVORABLE TO THE GOVERNMENT AT ANY TIME. THE TERM "OTHERWISE SUCCESSFUL BIDDER" REFERS TO ONE WHO MUST BE DETERMINED TO BE THE LOW RESPONSIVE AND RESPONSIBLE BIDDER IN ANY CASE. SEE LEITMAN V. UNITED STATES, 104 CT.CL. 324. THE TERM IS IN NO MANNER TO BE REGARDED AS SYNONYMOUS WITH ,APPARENT LOW BIDDER," AS YOU HAVE IMPLIED.

IN THE MEMORANDUM ENCLOSED WITH YOUR LETTER YOU ATTACK THE VALIDITY OF OUR DECISION OF JANUARY 22, 1962, ON THREE GROUNDS. THE FIRST OF THESE IS THAT A STATEMENT IN THE SECOND PARAGRAPH OF OUR EARLIER DECISION, TO THE EFFECT THAT ALTERNATE NO. 5 WAS OMITTED FROM THE BID SCHEDULE INDICATES A MISUNDERSTANDING BECAUSE ALTERNATE 5 WAS IN FACT INCLUDED. IN VIEW OF THE EMPHASIS YOU PLACE ON THIS POINT, WE BELIEVE WE SHOULD CLARIFY THE RECORD AS TO WHAT ALTERNATE 5 WAS. SCHEDULE A BASE BID CONSISTED OF INDIVIDUALLY PRICED ITEMS RUNNING FROM ITEM 1, THE BUILDING, THROUGH ITEM 76. THE GREAT MAJORITY OF THESE ITEMS WERE FOR ESTIMATED QUANTITIES OF SUCH THINGS AS EXCAVATION, SODDING, MANHOLES, AND VARIOUS SIZES OF PIPE, FOR WHICH UNIT PRICES WERE REQUESTED. ALTERNATES 1 THROUGH 4 CONSISTED OF SPECIFIC ADDITIONAL ITEMS, SEPARATELY PRICED. ALTERNATE 5 WAS NOT AN ITEM FOR WHICH A SEPARATE PRICE WAS TO BE QUOTED. IT CONSISTED OF A SPECIAL VEHICLE HARDSTAND TO BE ADDED TO THE PARKING AREA, AND ITS ONLY EFFECT WAS TO CHANGE THE ESTIMATED QUANTITIES OF SOME OF THE INDIVIDUAL UNIT PRICE ITEMS CONTAINED IN THE SCHEDULE A BASE BID. IN OTHER WORDS, ALTERNATE 5 WAS NOT A PART OF SCHEDULE A BASE BID OR ALTERNATES 1 THROUGH 4; NEITHER WAS IT AN ITEM OF SCHEDULE B, AS WERE ALTERNATES 6, 8, AND 9, ALTHOUGH IT WAS INCLUDED IN SCHEDULE B AS CHANGES IN THE ESTIMATED QUANTITIES OF SEVERAL OF THE UNIT PRICE ITEMS NUMBERED BETWEEN 82 AND 158. WHATEVER MISUNDERSTANDING MAY BE INFERRED FROM THE STATEMENT IN OUR DECISION THAT ALTERNATE 5 APPEARED TO HAVE BEEN OMITTED HAD, AND COULD HAVE HAD, NO POSSIBLE BEARING ON OUR CONCLUSION, AND WE THEREFORE DO NOT CONSIDER THAT THIS POINT WARRANTS FURTHER CONSIDERATION.

THE SECOND POINT RAISED IN YOUR MEMORANDUM IS THAT THE ACTION TAKEN BY PERSONNEL OF THE CORPS OF ENGINEERS WITH RESPECT TO THE ERROR ALLEGED BY GREENHUT ESTABLISHES THAT EVIDENCE IN ADDITION TO THAT APPEARING ON THE FACE OF THE BID DOCUMENTS WAS CONSIDERED BY THEM IN ESTABLISHING THEIR RECOMMENDATION THAT WE PERMIT CORRECTION, AND THAT THESE RECOMMENDATIONS HAD A DIRECT BEARING UPON OUR CONCLUSION. IF IT IS INTENDED BY THIS ARGUMENT TO IMPLY THAT WE ALSO CONSIDERED AND WERE INFLUENCED IN OUR DECISION BY THE EXTRANEOUS EVIDENCE WHICH WAS OBTAINED FROM GREENHUT BY THE CORPS OF ENGINEERS, THE SHORT ANSWER IS THAT WE NECESSARILY, UNDER THE RULES APPLICABLE TO DISPLACEMENT CORRECTIONS, COULD NOT AND DID NOT GIVE ANY WEIGHT TO ANY EXTRANEOUS EVIDENCE FURNISHED BY GREENHUT. SO FAR AS THE ADMINISTRATIVE RECOMMENDATION IS CONCERNED, WHILE WE GIVE DUE CONSIDERATION TO SUCH RECOMMENDATIONS, WE MUST IN ALL CASES, AS WE DID IN THE CASE, ARRIVE AT OUR OWN DETERMINATION AS TO THE PROPER RESULT INDEPENDENTLY OF THE VIEWS OF THE ADMINISTRATIVE OFFICE. IN THIS CONNECTION, MENTION SHOULD BE MADE OF CERTAIN EXTRANEOUS EVIDENCE NOT FURNISHED BY GREENHUT, NAMELY, THE OTHER BIDS ON THE TWO SCHEDULES. THE DECISION WE REACHED WAS NOT BASED ON THIS EVIDENCE, ALTHOUGH WE BELIEVE IT WAS PROPERLY CONSIDERED ALONG WITH THE GREENHUT BID. IT WAS REFERRED TO IN THE DECISION MAINLY BECAUSE OF YOUR CONTENTION THAT DIFFERENT BIDS FOR THE SAME BUILDING MIGHT BE EXPECTED ON THE TWO SCHEDULES, AND WE POINTED OUT THAT YOU WERE THE ONLY BIDDER WHO DID SO DELIBERATELY.

FINALLY, YOU ALLEGE IN ESSENCE THAT THE CONCLUSION APPEARING ON PAGE 4 OF OUR EARLIER DECISION IS ERRONEOUS. THAT CONCLUSION IS TO THE EFFECT THAT THE CARRYING OVER OF THE TOTAL PRICE ON SCHEDULE A IN GREENHUT'S BID AS THE BUILDING BID IN SCHEDULE B ESTABLISHES THAT GREENHUT INTENDED TO QUOTE THE SAME PRICE FOR THE BUILDING IN EACH SCHEDULE. IN THIS CONNECTION YOU NOTE ALSO THAT OTHER BIDDERS, INCLUDING YOURSELF, DID NOT SUBMIT THE SAME BID ON BOTH SCHEDULES FOR THE BUILDING.

WE AGREE WITH YOUR PRESENT CONTENTION THAT THE MERE FACT A MISTAKE EXISTS IN A BID DOES NOT PROVE WHAT THE INTENDED BID WAS. WE DO NOT AGREE THAT OUR PRIOR DECISION SO HELD.

AS WAS STATED ON PAGE 4 OF THE DECISION, GREENHUT'S BID SHOWS THAT THE IDENTICAL AMOUNT WAS QUOTED FOR THE BUILDING IN SCHEDULE B AND FOR THE TOTAL BID (INCLUDING ADDITIVES) ON SCHEDULE A. THIS IS, IN AND OF ITSELF, AN ERROR ALMOST AS OBVIOUS AS THE QUOTATION OF A UNIT PRICE OF $100 FOR TEN UNITS AND THE EXTENSION OF THE TOTAL PRICE AS $10,000. AS WAS POINTED OUT IN THE DECISION, THERE ARE ONLY TWO POSSIBLE EXPLANATION'S AS TO WHICH FIGURE WAS IN ERROR. EITHER THE FIGURE FOR THE BUILDING IS CORRECT AND WAS CARRIED OVER ERRONEOUSLY AS THE TOTAL FOR SCHEDULE A, OR THE TOTAL FOR SCHEDULE A IS CORRECT AND WAS POINTED OUT ON PAGE 5 OF THE DECISION, THE ONLY REASONABLE BASIS UPON WHICH IT CAN BE ASSUMED THAT THE PRICE OF $3,781,871.10 QUOTED FOR THE BUILDING IN SCHEDULE B IS CORRECT IS TO ASSUME FURTHER THAT THE SCHEDULE B BID WAS COMPUTED FIRST, WITH THE INTENTION OF ARRIVING AT THE SCHEDULE A PRICES BY "STRIPPING OUT" FROM SCHEDULE B THOSE ITEMS NOT INCLUDED IN SCHEDULE A. THE DECISION WENT ON TO DISCUSS THE REASONS WHY THE ERROR COULD NOT HAVE OCCURRED IN THIS MANNER.

THIS LEAVES AS THE ONLY OTHER POSSIBLE EXPLANATION OF THE ERROR THE CONCLUSION THAT THE PRICE OF $3,781,871.10 FOR THE TOTAL OF SCHEDULE A WAS CORRECT AND THAT THE CARRY-OVER OF THAT PRICE FOR THE BUILDING IN SCHEDULE B WAS ERRONEOUS. THE DECISION THEN PROCEEDED TO DISCUSS, NOT WHICH FIGURE WAS ERRONEOUS, BUT POSSIBLE REASONS AS TO WHY GREENHUT INSERTED THE ERRONEOUS PRICE FOR ITEM 81, THE BUILDING. REGARDLESS OF THESE REASONS, THE FACT IS THAT AN EXACT PRICE TO THE PENNY WAS CARRIED OVER AS THE PRICE FOR THE BUILDING, AND THIS DOES DEMONSTRATE THAT A CARRY-OVER WAS INTENDED. IN OTHER WORDS, IT SHOWS AN INTENT TO QUOTE THE SAME FIGURE FOR ITEM 81 AS WHATEVER FIGURE WAS INTENDED TO BE CARRIED OVER. AND, AS WAS POINTED OUT IN THE DECISION, THE ONLY POSSIBLE FIGURE WHICH REASONABLY COULD HAVE BEEN INTENDED TO BE CARRIED OVER IS THE PRICE QUOTED FOR THE IDENTICAL BUILDING IN SCHEDULE A. THEREFORE, IN ADDITION TO DENYING YOUR CLAIM OF ERROR, WE MUST AFFIRM THE CONCLUSION REACHED IN THE DECISION OF JANUARY 22, 1962.