A-33768, OCTOBER 23, 1930, 10 COMP. GEN. 182

A-33768: Oct 23, 1930

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THE EVIDENCE OF SUCH MISTAKE MUST BE SUCH AS TO SHOW EXCLUSIVELY THAT A MISTAKE WAS MADE. THERE SHOULD BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS IN FACT A BONA FIDE MISTAKE IN THE BID AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR WAS FOR THE PURPOSE OF CLAIMING SOME UNDUE ADVANTAGE OR OF AVOIDING THE CONSEQUENCES OF AN ILL- ADVISED BID. THE FACT THAT THE BID AS TO WHICH ERROR IS ALLEGED IS LESS THAN THE DEPARTMENT'S ESTIMATE IS NOT NECESSARILY CONTROLLING AS TO WHETHER A MISTAKE HAD BEEN MADE SUCH AS WOULD AUTHORIZE THE BID TO BE DISREGARDED. AS THERE IS ALWAYS A POSSIBILITY OF AN ERROR ON THE PART OF THE DEPARTMENT CONCERNED IN THE PREPARATION THEREOF.

A-33768, OCTOBER 23, 1930, 10 COMP. GEN. 182

CONTRACTS - MISTAKE IN BID - CORRECTION - WITHDRAWAL TO AUTHORIZE THE CORRECTION OF A BID ON THE BASIS OF A MISTAKE ALLEGED AFTER THE OPENING, THE EVIDENCE OF SUCH MISTAKE MUST BE SUCH AS TO SHOW EXCLUSIVELY THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTED, AND HOW IT OCCURRED. THERE SHOULD BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS IN FACT A BONA FIDE MISTAKE IN THE BID AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR WAS FOR THE PURPOSE OF CLAIMING SOME UNDUE ADVANTAGE OR OF AVOIDING THE CONSEQUENCES OF AN ILL- ADVISED BID. THE FACT THAT THE BID AS TO WHICH ERROR IS ALLEGED IS LESS THAN THE DEPARTMENT'S ESTIMATE IS NOT NECESSARILY CONTROLLING AS TO WHETHER A MISTAKE HAD BEEN MADE SUCH AS WOULD AUTHORIZE THE BID TO BE DISREGARDED, AS THERE IS ALWAYS A POSSIBILITY OF AN ERROR ON THE PART OF THE DEPARTMENT CONCERNED IN THE PREPARATION THEREOF. A BID MAY BE DISREGARDED WHEN THE EVIDENCE IS NOT SUFFICIENT TO AUTHORIZE ITS REFORMATION IF IT IS CONCLUSIVELY SHOWN BEFORE ACCEPTANCE THAT THE BID IS ERRONEOUS AND THAT IT WOULD BE UNCONSCIONABLE TO HOLD THE BIDDER THERETO.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, OCTOBER 23, 1930:

I HAVE A LETTER DATED OCTOBER 13, 1930, FROM THE ACTING DIRECTOR OF THE VETERANS' BUREAU AS FOLLOWS:

UPON THE OPENING ON SEPTEMBER 23, 1930, OF BIDS FOR THE CONSTRUCTION OF OFFICERS' DUPLEX QUARTERS BUILDINGS NO. 23 AND NO. 24 AT U.S. VETERANS' HOSPITAL, EXCELSIOR SPRINGS, MISSOURI, IT WAS FOUND THAT THE BID OF A. W. FERRELL, HUNTINGTON, WEST VIRGINIA, WAS LOW FOR THIS CONSTRUCTION WORK. AN ABSTRACT OF THE BIDS RECEIVED IS ATTACHED. IT WILL BE SEEN THAT MR. FERRELL HAS PROPOSED TO CONSTRUCT THE BUILDINGS IN ACCORDANCE WITH "ITEM I" FOR $40,000, WHICH IS $16,370 LOWER THAN THE NEXT LOWEST BID RECEIVED FOR THIS ITEM.

BY LETTER, DATED SEPTEMBER 25, 1930 (COPY ATTACHED), MR. FERRELL SETS FORTH THAT HE MADE AN ERROR IN HIS BID AND THAT TO CONSTRUCT THE BUILDINGS WOULD ENTAIL A SERIOUS HEAVY FINANCIAL LOSS ,AND THE WIDE DIFFERENCE IN THE BIDS WOULD PROBABLY PRECLUDE THE POSSIBILITY OF SECURING BOND FROM A SURETY COMPANY.' MR. FERRELL ASKS, THEREFORE, THAT THE BID BE NOT CONSIDERED IN THE AWARDING OF THE CONTRACT. IN REPLY TO THE FOREGOING COMMUNICATION THE BUREAU CALLED MR. FERRELL'S ATTENTION TO PARAGRAPH NO. 14 OF THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS AND THE FACT HIS BID WAS SUPPORTED BY A BOND, CONDITIONED AMONG OTHER THINGS, IN SUBSTANCE, THAT HE WOULD NOT WITHDRAW HIS BID WITHIN SIXTY DAYS AND THAT "IF, HOWEVER, YOU NEVERTHELESS BELIEVE THAT YOUR BID SHOULD NOT BE CONSIDERED YOU MAY SUBMIT FOR THE BUREAU'S FURTHER CONSIDERATION OF THE MATTER SUCH EVIDENCE AS YOU CONSIDER WILL SUPPORT YOUR CLAIM OF ERROR.' A COPY OF THIS LETTER IS ATTACHED.

BY HIS ATTACHED LETTER OF OCTOBER 6, 1930, AND INCLOSURES, MR. FERRELL SETS FORTH HOW THE ERROR HE ALLEGES WAS MADE BY HIM AND AGAIN REQUESTS THAT HIS BID BE NOT CONSIDERED IN THE AWARDING OF THE CONTRACT.

AS WILL BE OBSERVED, THE NOTATION IS MADE IN THE BID FORM "READ STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS BEFORE PREPARING THIS BID.' IT IS PROVIDED BY PARAGRAPH NO. 14 OF THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS THAT:

"BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM BIDDERS PRIOR TO THE TIME FIXED FOR OPENING. NEGLIGENCE ON THE PART OF THE BIDDER IN PREPARING THE BID CONFERS NO RIGHT FOR THE WITHDRAWAL OF THE BID AFTER IT HAS BEEN OPENED.'

SINCE THE BUREAU ESTIMATED THAT THE CONSTRUCTION WORK IN QUESTION WOULD COST $60,000 AND SINCE THERE IS A DIFFERENCE OF $16,370 BETWEEN ITEM I OF THE BID OF A. W. FERRELL AND THAT OF THE NEXT LOWEST BIDDER AND SINCE THE REMAINING BIDS ON THIS ITEM RANGE FROM $59,334 TO $65,818, THERE IS SUFFICIENT JUSTIFICATION FOR A CONCLUSION THAT A BONA FIDE MISTAKE WAS MADE BY MR. FERRELL. THERE APPEARS TO BE NO QUESTION BUT THAT SUCH MISTAKE WAS DUE TO THE BIDDER'S OWN NEGLIGENCE.

IN VIEW OF THE SATISFACTORY COMPETITION AND THE LOW PRICES RECEIVED FOR THIS WORK I DO NOT BELIEVE THAT IT WOULD BE TO THE ADVANTAGE OF THE GOVERNMENT TO READVERTISE THIS PROJECT. THEREFORE, I SUBMIT FOR YOUR DECISION AS TO WHETHER THE BUREAU WOULD BE PERMITTED TO ALLOW A. W. FERRELL TO WITHDRAW HIS BID AND IF SO WHETHER THE BUREAU WOULD BE AUTHORIZED TO ACCEPT THE BID OF THE NEXT LOWEST BIDDER, THE MORLEY CONSTRUCTION COMPANY OF KANSAS CITY, MISSOURI.

YOUR PROMPT ATTENTION TO THIS MATTER WILL BE APPRECIATED.

THE FACTS AS REPORTED DISCLOSE THAT NINE BIDS WERE RECEIVED IN RESPONSE TO THE ADVERTISEMENT, THE LOW BID OF $40,000 (A. W. FERRELL) AND EIGHT OTHER BIDS RANGING FROM $56,370 TO $65,818; THAT AFTER THE OPENING AND CONSIDERATION OF THE BIDS BUT BEFORE AWARD, BY LETTER DATED SEPTEMBER 25, 1930, TWO DAYS AFTER THE OPENING, THE LOW BIDDER, A. W. FERRELL, ADVISED THE CONTRACTING OFFICER THAT HE HAD MADE A MISTAKE IN THE SUBMISSION OF HIS BID IN THAT THE BUILDINGS TO BE ERECTED WERE 2-FAMILY BUILDINGS AND THAT CERTAIN SUBCONTRACTORS IN SUBMITTING THEIR BIDS TO HIM DID NOT MAKE IT CLEAR THAT THEY WERE ONLY BIDDING ON ONE UNIT INSTEAD OF TWO; THAT THESE SINGLE BIDS WERE USED IN ARRIVING AT THE TOTAL BID AS SUBMITTED; THAT THE BID DID NOT INCLUDE ORNAMENTAL AND CONSTRUCTUAL STEEL; THAT TO CONSTRUCT THE BUILDINGS AT THE PRICE QUOTED WOULD NECESSARILY ENTAIL A SERIOUS HEAVY FINANCIAL LOSS; AND THAT THE DIFFERENCE BETWEEN THIS BID AND THE OTHER BIDS WOULD PROBABLY PRECLUDE THE SECURING OF A BOND FROM A SURETY COMPANY. IN VIEW THEREOF, THE SAID BIDDER REQUESTED TO BE ALLOWED TO WITHDRAW HIS BID.

THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS IN PARAGRAPH 14 THEREOF, WHICH BIDDERS WERE URGED TO READ BEFORE SUBMITTING THEIR BIDS, NOTIFIED ALL BIDDERS CONCERNED THAT NEGLIGENCE ON THE PART OF ANY BIDDER IN PREPARING HIS BID CONFERRED NO RIGHT FOR THE WITHDRAWAL AFTER IT HAD BEEN OPENED; AND ALL BIDDERS WERE REQUIRED TO FURNISH A BID BOND CONDITIONED ON NOT WITHDRAWING THEIR BID WITHIN A STATED PERIOD AND THE EXECUTION OF A CONTRACT WITH SURETY IN EVENT THEIR PROPOSAL WAS ACCEPTED. THE SAID BIDDER FURNISHED THE BOND IN THE SUM OF $10,000 WITH TWO INDIVIDUAL SURETIES THEREON. THE QUESTION HERE PRESENTED IS NOT AS TO A WITHDRAWAL OF THE BID BUT AS TO WHETHER THERE HAS BEEN SUBMITTED SUCH A SHOWING OF MISTAKE AS TO AUTHORIZE DISREGARDING THE BID IN THE MAKING OF THE AWARD.

THE NUMEROUS DECISIONS OF THIS OFFICE HAVE BEEN TO THE EFFECT THAT IN ORDER TO AUTHORIZE THE CORRECTION OF A BID ON THE BASIS OF A MISTAKE ALLEGED AFTER THE OPENING, THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTS, AND HOW IT OCCURRED. IN OTHER WORDS, THERE SHOULD BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS IN FACT A BONA FIDE MISTAKE IN THE BID, AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR IS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR OF AVOIDING THE CONSEQUENCE OF AN ILL-ADVISED BID. 9 COMP. GEN. 339. BUT A BID MAY BE DISREGARDED WHEN THE EVIDENCE IS NOT SUFFICIENT TO AUTHORIZE ITS REFORMATION IF IT IS CONCLUSIVELY SHOWN BEFORE ACCEPTANCE THAT THE BID IS ERRONEOUS AND THAT IT WOULD BE UNCONSCIONABLE TO HOLD THE BIDDER THERETO. MOFFETT, HODGKINS, ETC., CO. V. ROCHESTER, 178 U.S. 373.

THE FACT THAT SAID BID WAS LESS THAN THE BUREAU'S ESTIMATE IS NOT NECESSARILY CONTROLLING AS TO WHETHER A MISTAKE WAS MADE SUCH AS WOULD AUTHORIZE A BID TO BE DISREGARDED, AS THERE IS ALWAYS THE POSSIBILITY OF AN ERROR ON THE PART OF THE DEPARTMENT CONCERNED IN THE PREPARATION THEREOF. BUT IN VIEW OF THE FACT THAT THE DIFFERENCE BETWEEN THE LOW BID AND THE NEXT HIGHER BID IS $16,370, WHEREAS THE DIFFERENCE BETWEEN THE SECOND LOW BID AND THE THIRD BID IS ONLY $2,964, AND ALL THE OTHER FACTS OF RECORD WHICH SEEM TO CORROBORATE THE BIDDER'S ALLEGATION OF ERROR, THE SAID BIDDER MAY BE ADVISED THAT ITS BID WILL BE DISREGARDED, AND THE CONTRACT SHOULD BE AWARDED TO THE LOWEST BIDDER AS TO WHICH NO MISTAKE WAS MADE.

THE PAPERS INFORMALLY SENT TO THIS OFFICE AFTER THE RECEIPT OF THE LETTER, SUPRA, ARE RETURNED HEREWITH. IT IS REQUESTED THAT IN ALL SUCH MATTERS THERE ACCOMPANY THE SUBMISSION A COPY OF THE ADVERTISEMENT FOR BIDS, AN ABSTRACT OF THE BIDS RECEIVED, AND THE BID OF THE BIDDER ALLEGING THE MISTAKE, THE LATTER TO BE RETURNED WITH THE DECISION.