B-128646, JUL. 27, 1956

B-128646, JUL. 27, 1956

TO MR. E. O. LARSON, CONTRACTING OFFICER, DEPARTMENT OF THE INTERIOR, BUREAU OF RECLAMATION:

REFERENCE IS MADE TO YOUR LETTER OF JULY 13, 1956, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY CANNON DIAMOND DRILLING COMPANY, LTD., TO HAVE BEEN MADE IN ITS BID SUBMITTED UNDER SPECIFICATIONS NO. 400C-63, OPENED ON JULY 3, 1956.

THE INVITATION REQUESTED BIDS FOR EXPLORATORY DRILLING AND WATER TESTING AT THE GLEN CANYON DAM SITE, ARIZONA. THE WORK TO BE PERFORMED IS DIVIDED INTO 16 ITEMS. ITEM 1 COVERING MOBILIZATION AND DEMOBILIZATION EXPENSE REQUIRES QUOTATIONS ON A LUMP-SUM BASIS, THE OTHER ITEMS REQUIRING UNIT PRICE QUOTATIONS BASED UPON THE ESTIMATED QUANTITIES SPECIFIED. RESPONSE TO THE INVITATION, CANNON DIAMOND DRILLING COMPANY LTD., SUBMITTED A BID IN THE TOTAL AMOUNT OF $105,403. THE TWO OTHER BIDS RECEIVED ARE IN THE AMOUNTS OF $226,696 AND $273,923.25, AND THE GOVERNMENT'S ESTIMATE WAS $193,905. THE QUOTATION OF CANNON DIAMOND DRILLING COMPANY ON ITEM 1 IS $5,000, AS COMPARED WITH $93,000 AND $126,000 QUOTED BY THE TWO OTHER BIDDERS, AND $70,000 ESTIMATED BY THE GOVERNMENT.

IT IS REPORTED THAT THE CANNON DIAMOND DRILLING COMPANY IS A WELL ESTABLISHED DRILLING COMPANY WITH CONSIDERABLE EXPERIENCE IN FOUNDATION DRILLING AND GROUTING AND CORE DRILLING. HOWEVER, IN VIEW OF THE WIDE DISPARITY BETWEEN THE AMOUNT OF ITS BID, THE AMOUNTS OF THE OTHER BIDS AND THE GOVERNMENT'S ESTIMATE, THE COMPANY WAS REQUESTED TO VERIFY ITS QUOTATION ON ITEM 1 AND ITS TOTAL BID PRICE.

BY LETTERS DATED JULY 7 AND JULY 12, 1956, CANNON DIAMOND DRILLING COMPANY ALLEGED THAT AN ERROR WAS MADE ON ITEM 1 IN THAT THE AMOUNT QUOTED DID NOT INCLUDE THE COST OF MATERIALS REQUIRED FOR THE INSTALLATION OF A HIGH LINE. IT WAS STATED THAT AN EXAMINATION OF THE PROJECT DISCLOSED THAT TO SUCCESSFULLY PERFORM THE DRILLING IT WOULD BE NECESSARY TO INSTALL A SUBSTANTIAL HIGH INE; THAT WHILE THE COMPANY WAS THOROUGHLY FAMILIAR WITH DRILLING OPERATIONS IT WAS TOTALLY UNFAMILIAR WITH THE ERECTION OF A HIGH LINE; THAT SEVERAL RIGGING COMPANIES WERE CONTACTED AND THE ONE THAT WAS INTERESTED QUOTED A PRICE OF $5,000 OVER THE TELEPHONE; THAT IT WAS BELIEVED THAT SAID AMOUNT WAS INTENDED TO COVER THE ENTIRE COST OF THE HIGH LINE AND THAT SAID FIGURE WAS USED AS ITS BID ON ITEM 1. IT WAS LATER DISCOVERED THAT THE AMOUNT OF $5,000 DID NOT INCLUDE THE COST OF MATERIALS AND THE OPERATION OF THE LINE. IN LETTER DATED JULY 10, 1956, ADDRESSED TO THE CANNON DIAMOND DRILLING COMPANY, THE SUBCONTRACTOR, OWL TRUCKING AND CONSTRUCTION COMPANY QUOTED A PRICE OF $27,500 FOR FURNISHING ALL MATERIALS, LABOR, SUBSISTENCE, INSURANCE, TAXES, EQUIPMENT, ETC., INCLUDING MOVE-ON AND MOVE-OFF EXPENSE IN CONNECTION WITH THE HIGH LINE. ALSO, THE SUBCONTRACTOR QUOTED A RENTAL CHARGE OF $450 PER MONTH FOR THE BARE EQUIPMENT. THE CANNON DIAMOND DRILLING COMPANY REQUESTED THAT ITS BID PRICE ON ITEM 1 BE INCREASED BY THE SUM OF $22,500 TO COVER THE COST OF MATERIALS AND EQUIPMENT ERRONEOUSLY OMITTED, WHICH WOULD MAKE ITS TOTAL BID $127,903.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD THERE APPEARS TO BE LITTLE, IF ANY, DOUBT THAT AN ERROR WAS MADE IN THE BID AS ALLEGED. HOWEVER, THE EVIDENCE IS NOT SUCH AS TO WARRANT DEPARTURE FROM THE GENERAL RULE THAT BIDS MAY NOT BE CHANGED AFTER THE BIDS HAVE BEEN OPENED. SEE 17 COMP. GEN. 575.

ACCORDINGLY, SINCE IT WAS BELIEVED THAT THE BID WAS ERRONEOUS AND SINCE SUCH BELIEF WAS CONFIRMED AND THE ERROR EXPLAINED BY THE COMPANY PRIOR TO AWARD, THE BID OF CANNON DIAMOND DRILLING COMPANY, LTD., SHOULD BE DISREGARDED.

IN VIEW OF THE FACT THAT THE TWO OTHER BIDS RECEIVED ARE SUBSTANTIALLY IN EXCESS OF THE GOVERNMENT'S ESTIMATE AND THE AMOUNT WHICH CANNON DIAMOND DRILLING COMPANY, LTD., APPARENTLY WOULD HAVE QUOTED EXCEPT FOR THE ERROR, CONSIDERATION SHOULD BE GIVEN TO THE ADVISABILITY OF REJECTING ALL BIDS AND READVERTISING.