B-145301, APR. 21, 1961

B-145301, APR. 21, 1961

TO ASSISTANT COMMISSIONER AND CHIEF ENGINEER, BUREAU OF RECLAMATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 10, 1961, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE WASATCH LINE CONSTRUCTION COMPANY ALLEGES IT MADE IN ITS BID OPENED ON FEBRUARY 28, 1961.

BY SPECIFICATIONS NO. DC-5476, BIDS WERE REQUESTED FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK REQUIRED FOR THE CONSTRUCTION OF THE RANGELY-OAK CREEK AND KREMMLING-GREEN MOUNTAIN 115 KV TRANSMISSION LINES AND KREMMLING-GORE TAP 69-KV TRANSMISSION LINE, COLORADO RIVER STORAGE PROJECT. THE WORK TO BE PERFORMED WAS DIVIDED INTO 135 ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENTS FOR THE WORK. IN RESPONSE THE WASATCH LINE CONSTRUCTION COMPANY, SALT LAKE CITY, UTAH, SUBMITTED A BID OFFERING TO PERFORM THE WORK UNDER ITEMS 1 TO 135, INCLUSIVE, AT THE VARIOUS UNIT AND JOB PRICES WHICH AFTER CORRECTION BY THE ADMINISTRATIVE OFFICE TOTALED $1,673,691.82. THE SEVEN OTHER BIDS ON THE PROJECT RANGED FROM $1,817,620 TO $2,324,894.40 AND THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $1,732,771.

YOU STATE THAT A REPRESENTATIVE OF THE WASATCH LINE CONSTRUCTION COMPANY WAS PRESENT AT THE BID OPENING AND THAT A FEW MINUTES THEREAFTER HE NOTIFIED THE PROJECT CONSTRUCTION ENGINEER THAT HE HAD DISCOVERED AN APPARENT ERROR IN THE PRICES QUOTED IN THE COMPANY'S BID FOR FURNISHING AND STRINGING CONDUCTORS UNDER ITEMS 75, 76 AND 127 OF THE SCHEDULE.

BY LETTER DATED MARCH 7, 1961, THE COMPANY REQUESTED THAT THE TOTAL CONTRACT PRICE OF THE PROJECT BE INCREASED BY $135,286.96. IN AN AFFIDAVIT DATED MARCH 9, 1961, THE VICE PRESIDENT OF THE COMPANY STATED THAT THE CONDUCTOR REQUIRED UNDER ITEMS 75, 76 AND 127 WAS QUOTED TO IT BY ITS SUPPLIER ON A PRICE PER POUND BASIS; THAT THIS BASIS NECESSITATES CONVERTING TO POUNDS PER MILE, MULTIPLYING BY THREE TO OBTAIN POUNDS PER CIRCUIT MILE AND, FINALLY, MULTIPLYING BY THE PRICE PER POUND TO YIELD DOLLARS PER CIRCUIT MILE. WE ALSO STATED THAT AN ALTERNATE AND COMMON METHOD IN USE IS CONVERTING TO POUNDS PER THOUSAND FEET, MULTIPLYING BY THREE TO OBTAIN POUNDS PER CIRCUIT THOUSAND FEET, MULTIPLYING BY 5.28 TO OBTAIN POUNDS PER MILE AND, FINALLY, MULTIPLYING BY THE PRICE PER POUND TO YIELD DOLLARS PER CIRCUIT MILE. HE FURTHER STATED THAT, DUE TO THE INSTABILITY OF THE PRICE STRUCTURE, NO CALCULATION OF THE CONDUCTOR PRICE WAS POSSIBLE UNTIL A FEW MINUTES BEFORE BID OPENING TIME; THAT IN MAKING THIS CALCULATION THE WEIGHT PER MILE WAS PICKED UP FROM THE SUPPLIER QUOTE, MULTIPLIED BY THREE (NUMBER OF CONDUCTORS) AND THEN MISTAKENLY MULTIPLIED BY 5.28 AS THOUGH THE WEIGHT PER THOUSAND FEET WAS BEING EMPLOYED; AND THAT THIS PRODUCT WAS THEN MULTIPLIED BY THE PRICE PER POUND TO YIELD AN ERRONEOUS TOTAL PRICE PER CIRCUIT MILE. IT WAS ALSO STATED THAT THE MAGNITUDE WAS 5.28 TIMES TOO MUCH, BUT THAT IN THE LAST-MINUTE RUSH THE DECIMAL POINT IN THE TOTAL WAS PLACED TO YIELD A FIGURE THAT APPEARED TO BE WITHIN REASON; THAT THE MISPLACED DECIMAL POINT GAVE A MULTIPLIER OF 0.528; AND THAT THE NET RESULT OF ALL THIS WAS THAT THE CONDUCTOR MATERIAL FIGURE ENDED UP AT ABOUT HALF ITS TRUE VALUE. SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS ORIGINAL CERTIFIED WORKSHEETS. IN A LETTER DATED APRIL 8, 1961, THE COMPANY STATED THAT THE ERROR IN CALCULATING THE ACTUAL MATERIAL PRICE OF THE CONDUCTOR ITEMS COVERED BY ITEMS 75, 76 AND 127 IN NO WAY AFFECTED THE TOTAL PROFIT AND OVERHEAD FIGURES SHOWN IN THE "LABOR, ETC.' COLUMN SINCE THOSE ITEMS WERE DETERMINED SEVERAL DAYS PRIOR TO THE DATE OF THE BIDDING AND PRIOR TO THE ENTRY OF THE FIGURES IN THE "UNIT PRICE MAT COST (INC TAX)" COLUMN OF THE WORKSHEET.

IN ADDITION TO REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN IN REGARD TO THE ERROR MADE BY THE COMPANY IN ITS BID, YOU ALSO REQUEST A DECISION AS TO WHETHER, IN VIEW OF OUR DECISION 38 COMP. GEN. 532, THE BID OF THE COMPANY SHOULD NOT BE CONSIDERED FOR AWARD BECAUSE OF THE LACK OF ANY CORPORATE SEAL OR SCROLL ON THE BID BOND. WITH RESPECT TO THE LATTER QUESTION, IN 38 COMP. GEN. 532, 537, TO WHICH YOU REFER, WE CONSIDERED THE QUESTION AS TO WHETHER THE BIDDER IN THAT CASE COULD BE ALLOWED TO CORRECT CERTAIN DEFICIENCIES IN ITS BID BOND. ONE OF THE DEFICIENCIES IN THE BID BOND WAS THE LACK OF A CORPORATE SEAL OR SCROLL. WHILE WE DID NOT SPECIFICALLY REFER TO THIS BOND DEFICIENCY IN OUR DECISION, WE WERE AWARE OF SUCH DEFICIENCY WHEN WE MADE THE STATEMENT THEREIN THAT THE COMPANY IN THAT CASE SHOULD BE GIVEN AN OPPORTUNITY TO CORRECT THE DEFICIENCIES IN ITS BID BOND. SEE, IN THIS CONNECTION, 31 COMP. GEN. 20, 23. IN VIEW OF THE FOREGOING, AND SINCE THE BID BOND IS SIGNED BY THE PRESIDENT OF THE PRINCIPAL AND THE ATTORNEY IN FACT FOR THE SURETY, THE BID NEED NOT BE DISREGARDED FOR LACK OF THE PRINCIPAL'S CORPORATE SEAL.

THE NEXT QUESTION FOR CONSIDERATION IS WHETHER THE COMPANY MAY BE PERMITTED TO CORRECT ITS BID. ONE OF THE CONDITIONS WHICH HAS BEEN CONSIDERED A PREREQUISITE TO CORRECTION OF ERROR IN AN ADVERTISED BID IS CLEAR AND CONVINCING PROOF OF THE "INTENDED" BID. IN OTHER WORDS, IT HAS BEEN CONSIDERED ESSENTIAL THAT THE EVIDENCE SUBMITTED WITH RESPECT TO THE ERRONEOUS BID DEMONSTRATE BEYOND DOUBT WHAT THAT BID WOULD HAVE BEEN IF THE ERROR HAD NOT OCCURRED.

AFTER CAREFUL CONSIDERATION OF THE ENTIRE RECORD WE ARE OF THE OPINION THAT THE ALLEGATION OF ERROR PRIOR TO AWARD, SUPPORTED BY THE DISPARITY BETWEEN ITS BID AND THE OTHER BIDS RECEIVED, SUFFICIENTLY WARRANTS THE CONCLUSION THAT A BONA FIDE MISTAKE WAS MADE BY THE WASATCH LINE CONSTRUCTION COMPANY. IN ADDITION TO THE EVIDENCE FURNISHED WITH YOUR LETTER THE BIDDER HAS SUBMITTED DIRECTLY TO OUR OFFICE CERTAIN ADDITIONAL WORKSHEETS TO ESTABLISH THE INTENDED BID PRICES FOR ITEMS 75, 76 AND 127. THE BIDDER'S WORKSHEETS PROVE THAT THE MATERIAL COSTS FOR THE CONDUCTOR ITEMS WERE ERRONEOUSLY CALCULATED AS STATED IN THE BIDDER'S LETTER OF MARCH 7, 1961, AND ACCOMPANYING AFFIDAVIT. MOREOVER, THE SUPPLEMENTAL DATA FURNISHED TO US BY THE BIDDER CLEARLY ESTABLISHES THAT IF THE BID IS CORRECTED TO INCLUDE ACTUAL MATERIAL COSTS OF THE CONDUCTOR ITEMS IT WOULD IN NO WAY AFFECT THE TOTAL PROFIT AND OVERHEAD COSTS INCLUDED IN THE BID. SPECIFICALLY, THE WORKSHEETS SHOW THAT THE PROFIT AND OVERHEAD ON THE MATERIALS INCLUDED IN THE BID WERE COMPUTED ON THE PRICE OF THE CORRECT QUANTITY OF MATERIALS PRIOR TO THE TIME THE ERROR WAS MADE IN CALCULATING THE ACTUAL MATERIAL PRICES BASED ON LAST-MINUTE QUOTATIONS.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO DOUBT THAT THE BIDDER MADE AN ERROR IN ITS BID, AS ALLEGED, AND IT IS APPARENT AS INDICATED BY YOU, THAT THE INTENDED BID PRICES FOR ITEMS 75, 76 AND 127 WERE UNDERSTATED BY THE BIDDER IN THE AMOUNT OF $135,286.96. ACCORDINGLY, YOU ARE ADVISED THAT THE BID OF THE WASATCH LINE CONSTRUCTION COMPANY MAY BE CORRECTED AND CONSIDERED FOR AWARD.