B-121764, NOV. 27, 1956

B-121764: Nov 27, 1956

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TO THE SECRETARY OF THE ARMY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 11. ADVISING YOU THAT NO LEGAL BASIS WAS FOUND FOR MODIFYING THE PRICES SPECIFIED IN THE CONTRACTS. WAS BASED UPON THE RECORD TRANSMITTED WITH YOUR SUBMISSION. NEW ENGLAND DIVISION (WHO WAS THE CONTRACTING OFFICER). IN THOSE REPORTS IT WAS STATED THAT BOTH OF THE CONTRACTS INVOLVED WERE AWARDED AND WERE EXECUTED BY THE RESPECTIVE CONTRACTORS WITHOUT PROTEST. THESE STATEMENTS WERE UNDERSTOOD TO MEAN THAT NO ERRORS IN THEIR BIDS WERE ALLEGED BY THE CONTRACTORS UNTIL AFTER THEY HAD ENTERED INTO FORMAL CONTRACTS. FROM WHICH IT APPEARS THAT OUR PREVIOUS DECISION WAS BASED UPON AN INADEQUATE AND NOT ENTIRELY ACCURATE PRESENTATION OF THE FACTS.

B-121764, NOV. 27, 1956

TO THE SECRETARY OF THE ARMY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 11, 1954, AND OUR REPLY DATED NOVEMBER 23, 1954, B-121764, CONCERNING THE CLAIMS OF D. C. LOVEYS COMPANY AND EUGENE R. EISENBERG, INC., FOR ADDITIONAL COMPENSATION FOR WORK PERFORMED UNDER CONTRACTS NOS. DA-19-016-ENG-3161 AND 3167, RESPECTIVELY.

OUR LETTER OF NOVEMBER 23, 1954, ADVISING YOU THAT NO LEGAL BASIS WAS FOUND FOR MODIFYING THE PRICES SPECIFIED IN THE CONTRACTS, WAS BASED UPON THE RECORD TRANSMITTED WITH YOUR SUBMISSION, PARTICULARLY THE REPORTS OF THE ASSISTANT TO THE DIVISION ENGINEER, NEW ENGLAND DIVISION (WHO WAS THE CONTRACTING OFFICER), TO THE CHIEF OF ENGINEERS, DATED AUGUST 10, 1954. IN THOSE REPORTS IT WAS STATED THAT BOTH OF THE CONTRACTS INVOLVED WERE AWARDED AND WERE EXECUTED BY THE RESPECTIVE CONTRACTORS WITHOUT PROTEST. AS SHOWN BY OUR LETTER ABOVE MENTIONED, THESE STATEMENTS WERE UNDERSTOOD TO MEAN THAT NO ERRORS IN THEIR BIDS WERE ALLEGED BY THE CONTRACTORS UNTIL AFTER THEY HAD ENTERED INTO FORMAL CONTRACTS.

THE D. C. LOVEYS COMPANY HAS CHALLENGED THE ACCURACY OF THE STATEMENT REFERRED TO, AND MADE FURTHER ALLEGATIONS OF FACTS NOT MENTIONED IN THE RECORD BEFORE US AT THE TIME AT OUR PREVIOUS DECISION. IN RESPONSE TO OUR REQUEST THERE HAS NOW BEEN FURNISHED THROUGH THE OFFICE OF THE CHIEF OF FINANCE A FURTHER REPORT AND ADDITIONAL PERTINENT RECORDS, FROM WHICH IT APPEARS THAT OUR PREVIOUS DECISION WAS BASED UPON AN INADEQUATE AND NOT ENTIRELY ACCURATE PRESENTATION OF THE FACTS.

THE PRESENT RECORD SHOWS THAT BIDS ON INVITATION NO. ENG-19-016-54 102, ON WHICH THE LOVEYS AND EISENBERG CONTRACTS WERE AWARDED, WERE OPENED ON MAY 20, 1954. ON THE PRECEDING DAY, MAY 19, BIDS HAD BEEN OPENED ON INVITATION NO. ENG-19-016-54-105, FOR CONSTRUCTION OF SPECIAL AAA FACILITIES AT SQUANTUM-LONG ISLAND AND HOG ISLAND WEYMOUTH, MASSACHUSETTS, AND IT IS ACKNOWLEDGED THAT THE FACILITIES CALLED FOR WERE, WITH THE EXCEPTION OF DIFFERENCES BASED ON SITE LOCATIONS, IDENTICAL WITH THOSE SPECIFIED IN INVITATION NO.-102, WHICH WERE TO BE CONSTRUCTED AT LINCOLN- WAYLAND AND BURLINGTON, MASSACHUSETTS.

IN EACH OF THE SCHEDULES OF ITEMS PROVIDED FOR IN BOTH INVITATIONS THERE WERE INCLUDED, AS ONE ITEM, TWO UNDERGROUND MISSILE STORAGE STRUCTURES, AND EACH INVITATION CALLED FOR THE FOLLOWING ALTERNATE WITH RESPECT TO SUCH ITEMS:

"IN THE EVENT THE 3500-POUND HOIST-CARRIERS AND RAILS AND THE 1750 POUND CARRIERS AND RAILS ARE DELETED FROM THE WORK TO BE PERFORMED (SEE PARAGRAPH 9-23), DEDUCT FROM THE UNIT PRICE STATED FOR ITEM NO. OF LOT A THE SUM OF CENTS, AND FROM THE UNIT PRICE STATED FOR ITEM NO. OF LOT B THE SUM OF DOLLARS AND CENTS. SUCH DELETIONS, IF MADE, WILL BE MADE PRIOR TO AWARD OF CONTRACT.'

IN ITS BID UNDER BOTH INVITATIONS THE D. C. LOVEYS COMPANY INSERTED THE SUM OF $5,300 IN EACH SPACE OF THE QUOTED PROVISION. ITS CLAIM HERE UNDER CONSIDERATION IS BASED UPON THE ACTION OF THE CONTRACTING OFFICER IN DEDUCTING TWICE THAT AMOUNT FROM ITS GROSS BID PRICE FOR THE LOT AWARDED TO IT, DESPITE ITS STATEMENT, NOW ADMITTED TO HAVE BEEN MADE VERBALLY TO THE ARMY REPRESENTATIVES PRIOR TO AWARD, THAT ITS $5,300 DEDUCTION WAS INTENDED AS A LUMP-SUM DEDUCTION FOR THE TWO UNITS INVOLVED. REQUESTING RECONSIDERATION OF ITS CLAIM THE LOVEYS COMPANY POINTED OUT THAT IN THE CONTRACT AWARDED TO A. CEFALO AND SONS, INC., UNDER INVITATION NO.-105 THE AMOUNT--- $5,000--- INSERTED BY THAT BIDDER IN THE ALTERNATE ITEM, WAS TREATED AS A LUMP-SUM RATHER THAN AS A UNIT PRICE DEDUCTION, AND THAT THE CEFALO BID ON INVITATION NO. -102, AS DID ITS OWN AND THOSE OF FOUR OTHER BIDDERS, STATED EXACTLY THE SAME AMOUNTS UNDER THE ALTERNATE FOR BOTH INVITATIONS.

IN THE UNDATED REPORT OF THE SUCCESSOR CONTRACTING OFFICER FORWARDED HERE BY THE OFFICE OF THE CHIEF OF FINANCE OF SEPTEMBER 24, 1956, IT IS ARGUED THAT THE DIFFERENT TREATMENT OF THE ALTERNATE BID DEDUCTIONS OFFERED WAS REQUIRED OR JUSTIFIED BY THE FACT THAT IN THE BID SCHEDULE OF INVITATION NO. -105, THE COLUMN PROVIDED FOR STATEMENT OF THE UNIT PRICES FOR THE BASIC ITEMS--- THAT IS, THE UNDERGROUND MISSILE STORAGE STRUCTURES--- CONTAINED THE LETTERS "L.S., " LEAVING NO SPACE FOR INSERTING ANY FIGURE EXCEPT THE AGGREGATE AMOUNT, WHILE IN THE OTHER INVITATION THE UNIT PRICE COLUMN WAS LEFT BLANK FOR THE INSERTION OF AN AMOUNT. IN BOTH INVITATIONS THE QUANTITIES WERE STATED AS 2, AND THE UNIT AS "EACH.'

VIEWED ALONE, THIS DISTINCTION MAY APPEAR TO HAVE SOME TECHNICAL MERIT; BUT IN THE FACT OF THE FACT, OBVIOUS FROM THE ABSTRACTS OF BIDS UNDER THE TWO INVITATIONS, THAT THE DISTINCTION WAS RECOGNIZED BY ANY BIDDER, WE DO NOT FEEL THAT IT FURNISHED A SUBSTANTIAL BASIS FOR THE ACTIONS TAKEN. CONSIDERING THE FURTHER FACT THAT THE AMOUNTS STATED BY THE VARIOUS BIDDERS AS THEIR DEDUCTIONS FOR THE ALTERNATE FELL INTO TWO DISTINCT GROUPS--- A FEW BIDDERS IN EACH CASE QUOTING AMOUNTS FROM $2,200 TO $3,000, AND ALL OTHERS QUOTING IN THE RANGE FROM $5,000 TO $7,000, WE FEEL THAT THE PROBABILITY OF ERROR IN THE ALTERNATE ITEM WAS SO APPARENT AS TO HAVE PRECLUDED A VALID AND BINDING ACCEPTANCE OF THE LOVEYS BID WITHOUT A REQUEST FOR VERIFICATION, EVEN IF ACTUAL VERBAL NOTICE OF ITS ERROR HAD NOT IN FACT BEEN GIVEN BY THAT COMPANY.

THERE REMAINS THE QUESTION WHETHER THE LOVEYS COMPANY WAIVED ITS CLAIM OF ERROR BY EXECUTING THE FORMAL CONTRACT TENDERED TO IT. ON THIS WE HAVE A SWORN AFFIDAVIT BY THE VICE-PRESIDENT AND TREASURER OF THE LOVEYS COMPANY STATING THAT ON OR ABOUT JUNE 3 OR 4, 1954, HE HAD AN INTERVIEW WITH MR. F. V. BONZAGNI, CHIEF, LEGAL BRANCH, CONCERNING THE AMOUNT OF THE DEDUCTION FOR THE ALTERNATE; "THAT MR. BONZAGNI THEN TOLD ME THE CORPS OF ENGINEERS COULD DO NOTHING ABOUT AN ADJUSTMENT OF THE CONTRACT AT THAT TIME BUT BECAUSE THIS "NIKE" CONTRACT WAS TO BE A RUSH JOB IN THE INTERESTS OF DEFENSE, THEY DID NOT WISH ANY DELAYS IN AWARDING THE CONTRACT. MR. BONZAGNI AT THAT TIME SUGGESTED THAT, IN THE INTERESTS OF DEFENSE, WE SIGN THE CONTRACT UPON ITS RECEIPT AND AT A LATER DATE TO REQUEST IN WRITING THE RESTORATION OF THE $5,300 TO THE CONTRACT SUM.'

AGAINST THIS THERE IS ONLY THE STATEMENT, IN THE SUCCESSOR CONTRACTING OFFICER'S SUPPLEMENTAL REPORT, THAT "THIS OFFICE DID NOT ADVISE OR INDUCE THE CONTRACTOR TO SIGN THE CONTRACT WITHOUT PROTEST. THIS OFFICE POINTED OUT TO THE CONTRACTOR THAT IF A PROTEST WERE RECEIVED, AWARD OF THE CONTRACT WOULD NOT BE MADE. THEREAFTER, THE CONTRACTOR ACCEPTED THE CONTRACT WITHOUT PROTEST. AFTER AWARD OF THE CONTRACT, THE CONTRACTOR SUBMITTED A REQUEST FOR AN ADDITIONAL $5,300 IN A LETTER DATED JULY 23, 1954.'

CONSIDERING THESE TWO STATEMENTS TOGETHER WE FIND NO MATERIAL CONFLICT BETWEEN THEM. THE WORD ,PROTEST" AS USED IN THE ADMINISTRATIVE REPORT DOES NOT APPEAR TO INCLUDE A CLAIM FOR ADJUSTMENT, SINCE THE PRESENTATION OF SUCH A CLAIM WOULD NOT PREVENT EITHER AWARD OR EXECUTION OF A CONTRACT. AN AWARD HAD IN FACT ALREADY BEEN MADE--- WITH NOTICE, BOTH ACTUAL AND CONSTRUCTIVE, OF THE MISTAKE ALLEGED--- AND DISPOSITION OF THE CONTRACTOR'S CLAIM FOR CORRECTION OR ADJUSTMENT HAD BECOME A MATTER FOR SUBMISSION TO HIGHER AUTHORITY WHICH NEED NOT HAVE AFFECTED PROMPT PERFORMANCE OF THE WORK. THE ADMINISTRATIVE REPORT FAILS TO REFER TO ANY STATEMENTS CONCERNING THE CONTRACTOR'S RIGHT TO FILE A CLAIM, AND IN THE LIGHT OF THE ENTIRE RECORD WE ARE NOT INCLINED TO CONSTRUE IT AS A CONTRADICTION OF THE AFFIDAVIT MENTIONED.

THE DECISION OF NOVEMBER 23, 1954, IS ACCORDINGLY RESCINDED AND YOU ARE ADVISED THAT THE CLAIM OF D. C. LOVEYS COMPANY BE PAID IN THE AMOUNT OF $5,300.