A-42632, JUNE 10, 1932, 11 COMP. GEN. 476

A-42632: Jun 10, 1932

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A BID AFTER ALL THE BIDS HAVE BEEN OPENED. THERE MUST BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE MISTAKE AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS A BONA FIDE MISTAKE IN THE BID AND THAT THE CLAIM OF MISTAKE IS NOT MADE FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE. AFTER THE BIDS HAVE BEEN OPENED. THAT VARIOUS ITEMS APPEARING ON THE ESTIMATE SHEETS ARE TOO LOW. WITHOUT FURTHER EXPLANATION IS NOT THE SUBMISSION OF CONCLUSIVE EVIDENCE OF A MISTAKE SUCH AS WOULD AUTHORIZE WITHDRAWAL OR CORRECTION OF THE BID. 1932: I HAVE YOUR LETTER OF MAY 24. 24 PROPOSALS WERE RECEIVED AND OPENED FOR THE CONSTRUCTION OF A POST OFFICE AT ELKO. THE LOWEST PROPOSAL WAS SUBMITTED BY THE CARL C.

A-42632, JUNE 10, 1932, 11 COMP. GEN. 476

CONTRACTS - MISTAKE IN BID TO PERMIT THE WITHDRAWAL OF, OR ANY CHANGE IN, A BID AFTER ALL THE BIDS HAVE BEEN OPENED, ON THE GROUND OF AN ALLEGED MISTAKE IN SUBMITTING THE BID, THERE MUST BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE MISTAKE AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS A BONA FIDE MISTAKE IN THE BID AND THAT THE CLAIM OF MISTAKE IS NOT MADE FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE, OR TO AVOID THE CONSEQUENCE OF AN ILL-ADVISED BID. WHERE A BIDDER EMPLOYED AN ESTIMATOR TO MAKE UP HIS ESTIMATES FOR THE JOB AND ACCEPTED SUCH ESTIMATES AND SUBMITTED HIS BID ON THE BASIS THEREOF, HE MUST BEAR THE CONSEQUENCES. THE INDICATION BY THE BIDDER, BY RED PENCIL MARKINGS, AFTER THE BIDS HAVE BEEN OPENED, THAT VARIOUS ITEMS APPEARING ON THE ESTIMATE SHEETS ARE TOO LOW, EITHER AS TO QUANTITY OR UNIT PRICE, WITHOUT FURTHER EXPLANATION IS NOT THE SUBMISSION OF CONCLUSIVE EVIDENCE OF A MISTAKE SUCH AS WOULD AUTHORIZE WITHDRAWAL OR CORRECTION OF THE BID.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, JUNE 10, 1932:

I HAVE YOUR LETTER OF MAY 24, 1932, AS FOLLOWS:

UNDER DATE OF MAY 9, 1932, 24 PROPOSALS WERE RECEIVED AND OPENED FOR THE CONSTRUCTION OF A POST OFFICE AT ELKO, NEVADA, RANGING IN AMOUNTS FROM $94,000 TO $149,577. THE LOWEST PROPOSAL WAS SUBMITTED BY THE CARL C. MADSEN CONSTRUCTION COMPANY, OF DENVER, COLORADO, IN AMOUNT $94,000, GUARANTEED BY A BID BOND OF $2,000. THE SECOND BID WAS SUBMITTED BY A.M. LUNDBERG, OF ST. LOUIS, MISSOURI, IN AMOUNT $103,800, GUARANTEED BY A BID BOND OF $3,000. THERE IS AVAILABLE FOR CONSTRUCTION APPROXIMATELY $107,000.

THE CONTRACT WAS PREPARED FOR THE LOW BIDDER, BUT WHILE IT WAS HELD AWAITING HIS FINANCIAL STATEMENT, HE WIRED ON MAY 11 THAT HE HAD MADE AN ERROR IN HIS ESTIMATE DUE TO THE SHORT TIME IN WHICH HE HAD TO BID, AND REQUESTED PERMISSION TO WITHDRAW. THE USUAL WIRE WAS SENT HIM ON MAY 12 FOR HIS ORIGINAL ESTIMATE SHEETS ATTESTED BEFORE A NOTARY, SHOWING CLEARLY WHERE THE ERROR WAS MADE. UNDER DATE OF MAY 13, 1932, THE CONTRACTOR FORWARDED QUANTITY SURVEY AND COST ESTIMATE MADE OUT BY THE AMERICAN ESTIMATING COMPANY, OF BALTIMORE, WITH THE STATEMENT THAT THESE ESTIMATES WERE PURCHASED FROM THE AMERICAN ESTIMATING COMPANY, OF BALTIMORE, WHICH, IT WAS ASSUMED, WAS RELIABLE AND DEPENDABLE; THAT THIS WAS THEIR FIRST EXPERIENCE WITH THIS FIRM, BUT THEY HAD RESORTED TO THIS METHOD BECAUSE THE PLANS WERE DELAYED IN REACHING THEM; AND THAT PRIOR TO THIS THEY ALWAYS MADE UP THEIR OWN ESTIMATES. THEY ADDED THEY HAD NO TIME TO CHECK THE ESTIMATES BEFORE SUBMITTING THE BID, AND THAT THE ITEMS RINGED IN RED WITH A STAR INDICATED THE ITEMS OF QUANTITY WHICH THEY FOUND IN ERROR.

THERE ARE TRANSMITTED HEREWITH THE SYNOPSIS OF BIDS WITH THE BIDS, THE LOW BIDDER'S WIRE OF MAY 11 AND THE ATTESTED ESTIMATE SHEETS OF MAY 13, 1932, WITH THE REQUEST THAT YOU RENDER DECISION AS TO WHETHER OR NOT THE LOW BIDDER MAY BE PASSED OVER AND THE AWARD MADE TO THE SECOND BIDDER.

EARLY ACTION WILL BE APPRECIATED IN ORDER TO AVOID FURTHER DELAY IN THE BUILDING PROGRAM.

PARAGRAPHS 14 AND 19 OF THE STANDARD GOVERNMENT INSTRUCTION TO BIDDERS PROVIDE:

14. WITHDRAWAL OF BIDS.--- BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM THE 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.

19. ERRORS IN BIDS.--- BIDDERS OR THEIR AUTHORIZED AGENTS ARE EXPECTED TO EXAMINE THE MAPS, DRAWINGS, SPECIFICATIONS, CIRCULARS, SCHEDULE, AND ALL OTHER INSTRUCTIONS PERTAINING TO THE WORK, WHICH WILL BE OPEN TO THEIR INSPECTION. FAILURE TO DO SO WILL BE AT THE BIDDER'S OWN RISK, AND HE CAN NOT SECURE RELIEF ON THE PLEA OF ERROR IN THE BID. IN CASE OF ERROR IN THE EXTENSION OF PRICES THE UNIT PRICE WILL GOVERN.

AS THE LOW BIDDER IN THIS INSTANCE DID NOT REQUEST WITHDRAWAL OF THE BID PRIOR TO THE TIME FIXED FOR OPENING THE QUESTION FOR CONSIDERATION IS WHETHER THERE HAVE BEEN ESTABLISHED SUCH FACTS OF MISTAKE AS TO AUTHORIZE WITHDRAWAL OR CORRECTION OF THE BID.

AFTER ALL BIDS HAVE BEEN OPENED, AS IN THIS CASE, AND BIDDERS HAVE ASCERTAINED THE AMOUNT QUOTED BY OTHER BIDDERS WHEREBY THERE MIGHT ARISE A TEMPTATION TO REVISE A BID EITHER UPWARD OR DOWNWARD AS MIGHT SERVE THE INTERESTS OF THE PARTICULAR BIDDER, THE PERMITTING OF ANY CHANGE IN A BID IS A MATTER FOR MOST SERIOUS CONSIDERATION AND SUCH A SITUATION MAKES NECESSARY STRICT ADHERENCE TO THE WELL ESTABLISHED RULE THAT IN ORDER TO AUTHORIZE THE CORRECTION OR WITHDRAWAL OF A BID BEFORE ACCEPTANCE ON THE BASIS OF A MISTAKE ALLEGED AFTER THE OPENING OF THE BIDS, THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE, AND 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 A BONA FIDE MISTAKE IN THE BID AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR WAS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR AVOIDING THE CONSEQUENCE OF AN ILL-ADVISED BID.

IN THE CASE HERE PRESENTED IT APPEARS THAT 24 BIDS WERE RECEIVED IN RESPONSE TO THE SAID ADVERTISEMENT RANGING IN PRICE FROM THE LOW BID OF $94,000, SUBMITTED BY THE CARL C. MADSEN CONSTRUCTION CO., TO THE HIGH BID OF $149,577. THE SECOND LOW BID WAS $103,800 AND THE THIRD LOW BID WAS $109,000. IT APPEARS THAT THE BIDS WERE OPENED MAY 9, 1932, THAT THE CONTRACT WAS PREPARED FOR AWARD TO THE LOW BIDDER BUT WHILE BEING HELD FOR A FINANCIAL STATEMENT FROM THE BIDDER A TELEGRAM WAS RECEIVED MAY 12, 1932, FROM SAID BIDDER ADVISING THAT AN ERROR HAD BEEN MADE IN THE SUBMISSION OF ITS BID, THE ALLEGED MISTAKE BEING EXPLAINED IN LETTER OF MAY 13, 1932, AS FOLLOWS:

IN REPLY TO YOUR INSTRUCTION BY TELEGRAM, WE ARE INCLOSING HEREWITH ESTIMATE OF ELKO, NEVADA, P.O. JOB WHICH WE PURCHASED FROM THE AMERICAN ESTIMATING COMPANY OF BALTIMORE, MD. ACCORDING TO CIRCULARS AND STATEMENTS SENT US BY THIS FIRM, WE ASSUMED THAT THEY WERE RELIABLE AND DEPENDABLE. THIS IS OUR FIRST EXPERIENCE OF THIS KIND, BUT WE RESORTED TO THIS METHOD BECAUSE THE PLANS WERE DELAYED REACHING US.

PRIOR TO BIDDING UPON THE ELKO P.O. JOB, WE HAVE ALWAYS MADE UP OUR OWN ESTIMATE. WE HAD MADE ARRANGEMENTS WITH THE POST OFFICE HERE TO HAVE THE PLANS DELIVERED BY SPECIAL DELIVERY AND IN THAT WAY WE RECEIVED THEM FRIDAY P.M., MAY 6TH, BUT THAT DID NOT ALLOW US SUFFICIENT TIME TO VERIFY ALL PRICE QUOTATIONS AND CHECK ALL QUANTITIES BEFORE TELEGRAPHING BID.

THE ITEMS RINGED IN RED WITH STAR NO. INDICATED ITEMS OF QUANTITIES WHICH WE HAVE FOUND TO BE IN ERROR. THE OTHER ITEMS RINGED IN RED REPRESENT OUR CORRECTIONS, ACCORDING TO PRICE QUOTATIONS RECEIVED UP TO AND INCLUDING MAY 13.

WE HOPE THAT HE HAVE MADE ALL FACTS CLEAR TO YOU AND THAT WE MAY BE ALLOWED TO WITHDRAW OUR BID.

IT IS TO BE OBSERVED THAT THE SAID BIDDER DOES NOT SUBMIT ANY EVIDENCE SHOWING HOW THE ALLEGED ERRORS OCCURRED BUT HAS SIMPLY INDICATED BY RED PENCIL MARKINGS THAT VARIOUS ITEMS APPEARING ON THE ESTIMATE SHEET ARE TOO LOW EITHER AS TO QUANTITY OR UNIT PRICE. IN OTHER WORDS, THERE IS INDICATED NOTHING MORE THAN A DIFFERENCE IN JUDGMENT BETWEEN THE BIDDER AND ITS ESTIMATOR--- THE ONE MAKING THE ESTIMATE ON WHICH THE BID WAS BASED APPARENTLY BEING OF THE OPINION THAT THE VARIOUS ITEMS ARE CORRECT AND PROPER, WHEREAS THE ONE WHO REVIEWED THE ESTIMATES AFTER THE BIDS HAD BEEN OPENED IS OF THE OPINION THAT THE ESTIMATES ON SOME OF THE ITEMS ARE TOO LOW, BUT NO EXPLANATION OF ANY ERROR WAS SUBMITTED. THERE IS TO BE NOTED, ALSO, THE BIDDER'S STATEMENT IN THE LETTER, SUPRA, THE CORRECTIONS ARE MADE "ACCORDING TO PRICE QUOTATIONS RECEIVED UP TO AND INCLUDING MAY 13," OR FOUR DAYS AFTER THE BIDS WERE OPENED.

IT WOULD SEEM CLEAR THAT THERE HAS BEEN ESTABLISHED NO MISTAKE SUCH AS WOULD AUTHORIZE WITHDRAWAL OR CORRECTION OF THE BID. THE BID WAS AS INTENDED. IF THE BIDDER ELECTED TO EMPLOY SOME OTHER CONCERN TO MAKE UP ITS ESTIMATES FOR THE JOB AND TO ACCEPT SUCH ESTIMATES AND SUBMIT ITS BID ON THE BASIS THEREOF, IT MUST ASSUME THE CONSEQUENCES THEREOF. THE FACT THAT THE ONE WHO REVIEWED THE ESTIMATES AFTER THE BIDS HAD BEEN OPENED ARRIVED AT A DIFFERENT CONCLUSION FROM THAT OF THE ORIGINAL ESTIMATOR AS TO SOME OF THE QUANTITIES OR UNIT PRICES IS NOT THE SUBMISSION OF SUCH CONVINCING PROOF OF THE EXISTENCE OF AN ERROR AS WOULD AUTHORIZE OR JUSTIFY RELIEVING THE BIDDER FROM THE OBLIGATIONS UNDER ITS BID. THERE IS SHOWN ONLY A CLAIM THAT THE BID WAS ILL-ADVISED OR NOT PROPERLY CONSIDERED BEFORE BEING SUBMITTED, AND THE DIFFERENCE BETWEEN THE LOW BID AND THE NEXT HIGHER BID IS NOT SUCH AS TO ESTABLISH THAT A CONTRACT ON THE BASIS OF THE LOW BID WOULD BE UNCONSCIONABLE.

AS WAS STATED IN 8 COMP. GEN. 397, THE PURCHASING OFFICERS OF THE GOVERNMENT HAVE OTHER BUSINESS THAN TO ACT AS GUARDIAN FOR THOSE INDULGING IN POOR BUSINESS METHODS AND AS THE BID OF THE SAID CARL C. MADSEN CONSTRUCTION CO. WAS NOT WITHDRAWN PRIOR TO OPENING AND THERE APPEARS NO BONA FIDE MISTAKE, THE BID SHOULD BE ACCEPTED. IF THE CONTRACTOR FAILS AND REFUSES TO PERFORM THE WORK FOR THE ACCEPTED BID PRICE OF $94,000, NOTICE SHOULD BE GIVEN TO THE SAID BIDDER AND THE WORK SHOULD BE PERFORMED AS THE INTERESTS OF THE UNITED STATES MAY REQUIRE, DEMAND TO BE MADE ON THE SAID CARL C. MADSEN CONSTRUCTION CO. FOR PAYMENT OF THE AMOUNT OF THE GOVERNMENT'S DAMAGE AS PROVIDED IN THE CONTRACT. THE NOTICE TO THE BIDDER SHOULD INFORM HIM TO THIS EFFECT. IF THE SAID CARL C. MADSEN CONSTRUCTION CO. SHOULD REFUSE TO PAY THE AMOUNT OF THE DAMAGE ALL THE PAPERS INCLUDING THE BOND SHOULD BE TRANSMITTED TO THIS OFFICE IN ORDER THAT PROPER ACTION MAY BE TAKEN TO RECOVER FROM THE LOW BIDDER AND ITS SURETY THE LOSS SUSTAINED BY THE GOVERNMENT BECAUSE OF ITS FAILURE TO COMPLY WITH THE TERMS OF THE ACCEPTED BID AND THE CONDITIONS OF ITS BOND. THE QUESTION PRESENTED IS ANSWERED ACCORDINGLY.