B-125841, JAN. 13, 1956

B-125841, JAN. 13, 1956

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 19, 1955, WITH ENCLOSURES, RELATIVE TO AN ERROR ALLEGED TO HAVE BEEN MADE BY KING CONSTRUCTION CO. IN ITS BID ON WHICH CONTRACT NO. DA-34-066-ENG-4793, DATED JUNE 14, 1955, IS BASED.

BY INVITATION NO. ENG-34-066-55-102, DATED APRIL 25, 1955, BIDS WERE REQUESTED FOR THE CONSTRUCTION OF AMMUNITION MAINTENANCE FACILITIES, RED RIVER ARSENAL, TEXARKANA, TEXAS. THE PROJECT WAS DIVIDED INTO 77 ITEMS FOR WHICH BIDS PER ITEM WERE REQUESTED. THE GOVERNMENT ESTIMATE AND THE SIX BIDS RECEIVED FOR ITEM NO. 1 COVERING THE CENTRAL STEAM PLANT AND FOR THE ENTIRE PROJECT INCLUDING ITEM NO. 1 WERE AS FOLLOWS:

TABLE

ITEM NO. 1 TOTAL FOR PROJECT GOVERNMENT ESTIMATE

$175,400 $1,196,599.00 KING CONSTRUCTION CO. 185,700

1,163,796.00 TEXARKANA CONSTRUCTION CO. 212,918 1,228,114.40 BROWN CONSTRUCTION CO. 235,000 1,271,905.00 SECOR BUILDING CO.

235,850 1,313,053.00

(ITEM NO. 45 OMITTED) PHIL S. HARDY CONSTRUCTION CO. 250,305 1,369,972.60 H. B. ZACHRY CO. 320,643 1,599,935.40

THE RECORD SHOWS THAT THE BID OPENING WAS ON MAY 27, 1955, THAT ON OR ABOUT JUNE 7 OR 8, 1955, MR. KING, PRESIDENT OF THE KING CONSTRUCTION CO. ADVISED BY TELEPHONE THAT AN ERROR WAS MADE ON ITEM NO. 1 OF THE COMPANY'S BID, COVERING THE CENTRAL STEAM PLANT, AND THAT ON JUNE 10, 1955, HE MADE A PERSONAL VISIT TO THE CONTRACTING OFFICE AND EXHIBITED AN ADDING MACHINE TAPE TO SUPPORT HIS PRIOR ORAL ALLEGATION OF ERROR CAUSED BY MALFUNCTIONING OF THE ADDING MACHINE. PERMISSION WAS REQUESTED BY HIM TO INCREASE THE BID PRICE FOR THE JOB FROM $1,163,796 TO $1,190,497. THE CONTRACTING OFFICER STATES THAT ON THIS OCCASION THE BIDDER WAS ADVISED FULLY OF HIS RIGHTS AND PREROGATIVES WITH RESPECT TO THE ALLEGED ERROR; AND AFTER BEING SO ADVISED, MR. KING EXPRESSED HIS WILLINGNESS AND DESIRE TO ACCEPT THE PROPOSED CONTRACT DESPITE THE MISTAKE, SUBJECT, HOWEVER, TO THE CONDITION THAT ACCEPTANCE OF THE CONTRACT FOR THE CONSIDERATION RECITED IN THE BID WOULD NOT JEOPARDIZE THE MERITS OF THE REQUEST FOR RELIEF, NOR LESSEN THE PROSPECT OF RECOVERY. MR. KING WAS GIVEN ASSURANCES IN THAT REGARD AND WAS REQUESTED TO FORMALIZE THE COMPANY'S ALLEGATION OF ERROR AND THE REQUEST FOR RELIEF IN WRITING, SUPPORTED BY ALL AVAILABLE EVIDENCE.

ON JUNE 14, FORMAL AWARD OF THE CONTRACT WAS MADE TO KING CONSTRUCTION CO. AT ITS BID PRICE OF $1,163,796; NOTICE TO PROCEED HAS BEEN GIVEN; AND WORK IS PROCEEDING UNDER THE CONTRACT. BY LETTER DATED JULY 14, 1955, THE REFERRED-TO ADDING MACHINE TAPE AND A SUMMARY SHEET FOR ITEM NO. 1 WERE FORWARDED TO ESTABLISH THAT A MECHANICAL MISTAKE OF $24,274 WAS MADE, AS PREVIOUSLY ALLEGED, IN ADDING, BY USE OF A RENTED ADDING MACHINE, A COLUMN OF THIRTEEN ALLEGEDLY APPLICABLE COST ITEMS, THE TOTAL OF WHICH PLUS AN ADDITIONAL AMOUNT FOR PROFIT WAS INTENDED TO COMPRISE THE BID ON ITEM NO. 1. ALTHOUGH THE CORRECT TOTAL OF THE THIRTEEN ITEMS WAS $199,982, THE TOTAL SHOWN ON THE ADDING MACHINE TAPE WAS ONLY $175,708 AS FOLLOWS:

TABLE

$ 6,000.00

700.00

2,184.00

15,390.00

4,426.00

18,150.00

681.00

36.00

400.00

106,495.00

40,000.00

1,500.00

4,020.00

TOTAL $175,708.00

THE FIRST FOUR ITEMS, AMOUNTING TO $24,274, OBVIOUSLY WERE OMITTED IN ARRIVING AT THE TOTAL OF $175,708. THE REQUESTED INCREASE OF $26,701 IN THE TOTAL BID PRICE IS BASED ON THE DIFFERENCE BETWEEN $199,982 AND $175,708, OR $24,274 (THE AMOUNT OF THE ALLEGED ADDING MACHINE MISTAKE) PLUS 10 PERCENT AS A CHARGE FOR PROFIT.

IT IS A WELL ESTABLISHED RULE THAT IN ORDER TO AUTHORIZE THE DISREGARDING, WITHDRAWAL OR CORRECTION OF A BID ON THE BASIS OF MISTAKE ALLEGED AFTER OPENING THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A BONA FIDE MISTAKE WAS MADE, IN WHAT IT CONSISTS AND HOW IT OCCURRED; AND MUST REMOVE ANY DOUBT THAT THE CLAIM OF ERROR WAS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR AVOIDING THE CONSEQUENCES OF AN ILL-ADVISED BID. SEE 9 COMP. GEN. 339; 14 ID. 78, 80; 16 ID. 565 AND 17 ID. 532. SEE, ALSO, HEARNE V. MARINE INSURANCE COMPANY, 20 WALL. 488, 490, WHEREIN THE SUPREME COURT OF THE UNITED STATES, IN REFERRING TO THE MATTER OF REFORMING CONTRACTS FOR MISTAKES, STATED:

"THE PARTY ALLEGING THE MISTAKES MUST SHOW EXACTLY IN WHAT IT CONSISTS, AND THE CORRECTION THAT SHOULD BE MADE. THE EVIDENCE MUST BE SUCH AS TO LEAVE NO REASONABLE DOUBT UPON THE MIND OF THE COURT AS TO EITHER OF THESE POINTS. * * *"

THE EVIDENCE FURNISHED BY THE CONTRACTOR, WHICH CONSISTS OF HIS VARIOUS LETTERS EXPLAINING HIS ERROR, TOGETHER WITH A SUMMARY WORKSHEET AND ADDING MACHINE TOTALS, FAIL TO ESTABLISH CONCLUSIVELY THAT AN ERROR OCCURRED, THE MANNER IN WHICH IT OCCURRED AND WHAT THE BID WOULD HAVE BEEN EXCEPT FOR THE ERROR. THERE DOES NOT APPEAR TO HAVE BEEN AN ANALYSIS OF THE ITEMS INCLUDED ON THE SUMMARY WORKSHEET, AS TO THEIR NECESSITY AND REASONABLENESS; NOR HAVE THOSE AMOUNTS BEEN SUPPORTED BY SUBSIDIARY WORKSHEETS AND VERIFIED QUOTATIONS FROM SUPPLIERS, MATERIALMEN OR SUBCONTRACTORS. NEITHER HAS THERE BEEN VERIFICATION OF THE USE AND CONDITION OF THE ADDING MACHINE TO WHICH THE CONTRACTOR ATTRIBUTES THE ERROR. MOREOVER, THE ADDING MACHINE TAPE IN ITSELF CANNOT BE REGARDED AS ESTABLISHING CONCLUSIVELY THE ERROR AND THE MANNER IN WHICH IT OCCURRED BECAUSE OF THE COMPARATIVE EASE OF PRODUCING SUCH AN ERRONEOUS TOTAL ON AN ADDING MACHINE TAPE WITH A MACHINE THAT IS NOT DEFECTIVE.

ACCORDINGLY, THE EVIDENCE PRESENTLY FURNISHED IN SUPPORT OF THE CLAIM OF ERROR IS NOT SUFFICIENT TO AUTHORIZE AN INCREASE IN THE CONTRACT PRICE.

THE CONTRACTOR'S WORKSHEET, THE ACCOMPANYING ADDING MACHINE TAPE AND COPIES OF ALL CORRESPONDENCE, ENDORSEMENTS AND STATEMENTS ARE BEING RETAINED; AND THE CONTRACT AND OTHER PAPERS FORWARDED WITH YOUR LETTER OF OCTOBER 19, 1955, ARE RETURNED.