B-123531, JUL. 20, 1955

B-123531: Jul 20, 1955

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TO AUTOMATIC SIGNAL COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 27. AS YOU WERE ADVISED BY LETTER OF JUNE 2. THE ADMINISTRATOR OF VETERANS AFFAIRS WAS REQUESTED TO FURNISH A FULL REPORT IN THE MATTER. THE RECORD SHOWS THAT THE THREE BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE IN THE AMOUNTS OF $4. THE VETERANS ADMINISTRATION'S ESTIMATE FOR THE PROJECT WAS $6. NO REPLY WAS RECEIVED TO THAT REQUEST AND ANOTHER WIRE WAS SENT ON FEBRUARY 16 ADVISING THE BIDDER THAT UNLESS A REPLY WAS RECEIVED BY FEBRUARY 21. 601 WAS THE BID INTENDED. THE BIDDER WAS REQUESTED TO FURNISH HIS ESTIMATE SHEETS. THE BIDDER SUBMITTED WORKSHEETS STATED TO HAVE BEEN USED IN PREPARING THE BID AND EXTENDED THE TIME FOR ACCEPTANCE.

B-123531, JUL. 20, 1955

TO AUTOMATIC SIGNAL COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 27, 1955, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THE AWARD MADE BY THE VETERANS ADMINISTRATION UNDER INVITATION FOR BIDS NO. 44-5045, COVERING THE INSTALLATION OF A FIRE ALARM SYSTEM AT THE VETERANS ADMINISTRATION CENTER, WHITE RIVER JUNCTION, VERMONT.

AS YOU WERE ADVISED BY LETTER OF JUNE 2, 1954, THE ADMINISTRATOR OF VETERANS AFFAIRS WAS REQUESTED TO FURNISH A FULL REPORT IN THE MATTER. THE REQUESTED REPORT, TOGETHER WITH PERTINENT PAPERS, HAS BEEN RECEIVED.

THE RECORD SHOWS THAT THE THREE BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE IN THE AMOUNTS OF $4,601 (FRANK T. CODY COMPANY), $6,728 (AUTOMATIC SIGNAL COMPANY, INC.) AND $10,175. THE VETERANS ADMINISTRATION'S ESTIMATE FOR THE PROJECT WAS $6,900. NOTING THE DISPARITY IN THE PRICES OFFERED AT THE OPENING ON FEBRUARY 1, 1955, THE CONTRACTING OFFICER, BY TELEGRAM DATED FEBRUARY 2, REQUESTED THE LOW BIDDER TO VERIFY AND CONFIRM ITS BID BY RETURNING WIRE. NO REPLY WAS RECEIVED TO THAT REQUEST AND ANOTHER WIRE WAS SENT ON FEBRUARY 16 ADVISING THE BIDDER THAT UNLESS A REPLY WAS RECEIVED BY FEBRUARY 21, IT WOULD BE PRESUMED THAT ITS BID IN THE AMOUNT OF $4,601 WAS THE BID INTENDED. LETTER DATED FEBRUARY 16, THE BIDDER ADVISED THAT AN ERROR HAD BEEN MADE IN THE BID, IN THAT "THE LABOR UNIT OF $1,987.00 (NINETEEN HUNDRED EIGHTY- SEVEN DOLLARS) DID NOT GET INTO THE SUMMATION OF COSTS IN THIS PROJECT.' BY TELEGRAM OF FEBRUARY 18, THE BIDDER WAS REQUESTED TO FURNISH HIS ESTIMATE SHEETS, TOGETHER WITH ANY OTHER EVIDENCE, IN SUPPORT OF HIS ALLEGED ERROR AND TO EXTEND THE PERIOD FOR THE ACCEPTANCE OF THE BID. LETTER DATED FEBRUARY 23, 1953, THE BIDDER SUBMITTED WORKSHEETS STATED TO HAVE BEEN USED IN PREPARING THE BID AND EXTENDED THE TIME FOR ACCEPTANCE.

THE QUESTION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO THE ALLEGED ERROR WAS REFERRED TO THE CHIEF PURCHASING AGENT, VETERANS ADMINISTRATION, WHO WAS AUTHORIZED BY OUR DECISION OF NOVEMBER 22, 1954, B -122003, TO DETERMINE ADMINISTRATIVELY THE ACTION THAT SHOULD BE TAKEN IN SUCH CASES. BY ADMINISTRATIVE DETERMINATION NO. 12, THE CHIEF PURCHASING AGENT AUTHORIZED THE CORRECTION OF THE BID TO INCLUDE THE AMOUNT OF THE OMITTED LABOR COSTS INCREASING THE BID TO $6,588. THE BID AS SO CORRECTED WAS ACCEPTED ON MARCH 24, 1955.

YOUR PROTEST IS MADE ON THE BASIS THAT WHILE THE BID OF FRANK T. CODY COMPANY MIGHT HAVE BEEN DISREGARDED DUE TO THE ALLEGED ERROR, THE BID SHOULD NOT HAVE BEEN CORRECTED.

THE STATUTORY LAW REQUIRING ADVERTISEMENTS FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDER IS PREMISED UPON THE DESIRE AND RIGHT OF THE UNITED STATES TO SECURE FREE AND OPEN COMPETITION IN CONNECTION WITH ITS PROCUREMENTS AND THEREBY TO SECURE THE BENEFIT OF COMPETITIVE PRICES. AND IT CONSISTENTLY HAS BEEN HELD THAT WHERE A MISTAKE IS ALLEGED PROMPTLY AFTER OPENING AND THERE IS PRESENTED CONVINCING EVIDENCE SHOWING THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTS, HOW IT OCCURRED, AND WHAT THE BID WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED SO THAT, IN THE EVENT THE CORRECTED BID IS THE LOWEST BID RECEIVED, THE GOVERNMENT MAY HAVE THE BENEFIT THEREOF. THE BASIC RULE IS, OF COURSE, THAT A BID MAY NOT BE CHANGED AFTER THE BIDS HAVE BEEN OPENED, AND THE EXCEPTION PERMITTING A BID TO BE CORRECTED, WHERE THE CONTRACTING OFFICER IS ON NOTICE OF ERROR PRIOR TO ACCEPTANCE, IS APPLICABLE ONLY WHERE THE FACTS AND CIRCUMSTANCES ESTABLISH THAT THE REQUESTED CORRECTION INVOLVES A PREVIOUSLY CALCULATED ITEM WHICH THE BIDDER ACTUALLY INTENDED TO INCLUDE IN, BUT WHICH WAS INADVERTENTLY OMITTED FROM THE AMOUNT OF THE BID SUBMITTED. THE EXCEPTION DOES NOT EXTEND TO PERMIT A BIDDER TO RECALCULATE OR CHANGE ITS BID TO INCLUDE FACTORS WHICH HE DID NOT HAVE IN MIND WHEN HIS BID WAS SUBMITTED, OR AS TO WHICH HE HAS SINCE CHANGED HIS MIND.

IN THE INSTANT CASE, THE EVIDENCE SUBMITTED BY THE BIDDER ESTABLISHES THAT THERE WAS OMITTED FROM THE PRICE QUOTED ANY AMOUNT FOR LABOR OR SUPERVISION AND INDICATED THAT THE BIDDER HAD ESTIMATED LABOR COSTS AS $1,987.04, WHICH WERE OMITTED FROM THE FINAL COMPILATION. WHILE WE ARE OF THE OPINION THAT THE EVIDENCE ESTABLISHES THAT AN ERROR WAS IN FACT MADE IN THE BID AND THAT, THEREFORE, THE BID AS SUBMITTED COULD NOT HAVE BEEN ACCEPTED IN GOOD FAITH, THE PROPRIETY OF CORRECTING THE BID IS NOT ENTIRELY FREE FROM DOUBT. HOWEVER, WE CANNOT CONCLUDE THAT THE ADMINISTRATIVE ACTION TAKEN WAS ARBITRARY OR WITHOUT SOME BASIS IN FACT.

IN THE CIRCUMSTANCES, THERE IS NO LEGAL BASIS UPON WHICH WE COULD TAKE EXCEPTION TO THE ADMINISTRATIVE ACTION TAKEN IN THE MATTER.