B-114679, APR 24, 1953

B-114679: Apr 24, 1953

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

RELATIVE TO AN ERROR WHICH TRI-STATE CONSTRUCTION COMPANY ALLEGES TO HAVE BEEN MADE IN ITS BID DATED MARCH 20. THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION IN ACCORDANCE WITH 16 COMP. A DECISION IN THE MATTER IS BEING RENDERED TO YOU. THE COMPANY WAS REQUESTED BY LETTER OF MARCH 20. IT IS REPORTED THAT. FORWARDED ITS ORIGINAL WORKSHEETS ON WHICH THERE WAS SET FORTH A BREAKDOWN OF BOTH MATERIAL AND LABOR COSTS OF THAT PART OF THE WORK WHICH WAS NOT SUBCONTRACTED. THE AGGREGATE COST OF THE MATERIALS IS SHOWN TO BE $4. THE WORK SHEETS SHOW THAT THIS ITEM WAS NOT INCLUDED IN COMPUTING THE BID PRICE. THE ITEM OF PROFIT WHICH WAS SHOWN TO HAVE BEEN COMPUTED AT NINE PERCENT WOULD HAVE BEEN $392.57 (9% OF $4.

B-114679, APR 24, 1953

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

THERE HAS BEEN RECEIVED A LETTER DATED APRIL 9, 1953, WITH ENCLOSURES, FROM THE CONTRACTING OFFICER, HEADQUARTERS, WARNER ROBINS AIR MATERIEL AREA, ROBINS AIR FORCE BASE, GEORGIA, RELATIVE TO AN ERROR WHICH TRI-STATE CONSTRUCTION COMPANY ALLEGES TO HAVE BEEN MADE IN ITS BID DATED MARCH 20, 1953, REQUESTING A DECISION AS TO WHETHER THE BID MAY BE INCREASED FROM $32,349 TO $37,103.48. AS THE RECORD INDICATES THAT THE BID ALREADY HAS BEEN ACCEPTED, THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION IN ACCORDANCE WITH 16 COMP. GEN. 565. HOWEVER, AND IN VIEW OF THE APPARENT NEED THEREFOR, A DECISION IN THE MATTER IS BEING RENDERED TO YOU.

THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, ROBINS AIR FORCE BASE, GEORGIA, BY INVITATION NO. IFB 09-603-53-76-B, AS AMENDED, REQUESTED BIDS - TO BE OPENED MARCH 20, 1953 - FOR PILOT AUTOMOTIVE MAINTENANCE SHOP FACILITIES AT BUILDING 1200 SITUATED AT THE BASE. IN RESPONSE THERETO, THE TRI-STATE CONSTRUCTION COMPANY SUBMITTED A BID OF $32,349 FOR THE JOB.

THE COMPANY WAS REQUESTED BY LETTER OF MARCH 20, 1953, TO VERIFY ITS BID PRICE. HOWEVER, IT IS REPORTED THAT, BEFORE RECEIPT OF THE REQUEST FOR VERIFICATION, THE COMPANY'S VICE PRESIDENT CONTACTED THE CONTRACTING OFFICE AND ADVISED THAT AN ERROR HAD BEEN MADE IN COMPUTING ITS BID IN THAT AN ITEM OF $4,754.48 COVERING NECESSARY MATERIALS HAD BEEN ENTIRELY OMITTED CONTRARY TO THE BIDDER'S INTENTION.

IN A LETTER DATED MARCH 25, 1953, THE COMPANY CONFIRMED ITS ORAL ALLEGATION OF ERROR AND, IN SUBSTANTIATION THEREOF, FORWARDED ITS ORIGINAL WORKSHEETS ON WHICH THERE WAS SET FORTH A BREAKDOWN OF BOTH MATERIAL AND LABOR COSTS OF THAT PART OF THE WORK WHICH WAS NOT SUBCONTRACTED. THE AGGREGATE COST OF THE MATERIALS IS SHOWN TO BE $4,361.91. MOREOVER, THE WORK SHEETS SHOW THAT THIS ITEM WAS NOT INCLUDED IN COMPUTING THE BID PRICE. WITH THIS ITEM INCLUDED IN THE TOTAL BID ESTIMATE, THE ITEM OF PROFIT WHICH WAS SHOWN TO HAVE BEEN COMPUTED AT NINE PERCENT WOULD HAVE BEEN $392.57 (9% OF $4,361.91) HIGHER THAN THE CHARGE FOR PROFIT INCLUDED IN THE BID AS SUBMITTED. THUS, IT APPEARS CLEAR THAT THE BID WAS $4,754.48 LOWER THAN THE COMPANY INTENDED IT TO BE. IN FURTHER SUPPORT OF ITS CONTENTION THAT THE COST OF MATERIAL WAS NOT INCLUDED IN THE BID PRICE, THE COMPANY ALSO FURNISHED QUOTATIONS FROM ITS SUBCONTRACTORS COVERING THE WORK THAT WAS SUBCONTRACTED, THEREBY ACCOUNTING FOR THE BASIS OF EVERY CHARGE THAT WAS INCLUDED IN ARRIVING AT THE TOTAL BID PRICE, AS QUOTED.

THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS RECEIVED WERE $57,511.28 AND $58,216. THUS, THE COMPANY'S BID IS SUBSTANTIALLY LOWER THAN THE OTHER BIDS. IN AN UNDATED REPORT PERTAINING TO THE MATTER, THE CONTRACTING OFFICER ASSERTS THE BELIEF THAT THE COMPANY'S ORIGINAL WORK SHEETS ESTABLISH SATISFACTORILY THAT AN HONEST MISTAKE WAS MADE IN COMPUTING THE BID AND ALSO STATES THAT,

"IF ALLEGED MISTAKE IS ALLOWED THE TOTAL COST WILL BE LESS THAN THE PROJECT ESTIMATE."

ON THE BASIS OF THE FACTS OF RECORD THERE APPEARS NO DOUBT THAT THE COMPANY MADE A BONA FIDE ERROR IN ITS BID, THAT ITS INTENDED BID PRICE IS $37,103.48, AS ALLEGED, AND THAT SUCH PRICE IS SUBSTANTIALLY LOWER THAN THE OTHER TWO BIDS AND LESS THAN THE GOVERNMENT'S ESTIMATE FOR THE JOB.

ACCORDINGLY, AND SINCE IT WAS BELIEVED THAT THE BID WAS ERRONEOUS AND SUCH BELIEF WAS CONFIRMED PRIOR TO AWARD, THE ACCEPTED BID OF THE TRI- STATE CONSTRUCTION COMPANY MAY BE CORRECTED TO PROVIDE FOR A TOTAL BID PRICE OF $37,103.48 FOR THE JOB.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE UNDATED STATEMENT AND RECOMMENDATION OF THE CONTRACTING OFFICER, COPY OF THE ABSTRACT OF BIDS, THE BIDDER'S LETTER OF MARCH 25, 1953, WITH ATTACHMENTS INCLUDING ITS REFERRED-TO WORKSHEETS AND SUBCONTRACTOR'S QUOTATIONS, ARE RETURNED HEREWITH.