B-126381, JAN. 26, 1956

B-126381, JAN. 26, 1956

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 14, 1955, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR THE FORGY CONSTRUCTION COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-41-243-ENG-3013 IS BASED.

BY INVITATION NO. ENG-41-243-55-75, AS AMENDED, THE OFFICE OF THE DISTRICT ENGINEER, GALVESTON DISTRICT, CORPS OF ENGINEERS, REQUESTED BIDS- -- TO BE OPENED ON JUNE 28 1955--- FOR FURNISHING LABOR AND MATERIALS AND FOR PERFORMING ALL WORK REQUIRED FOR THE RELOCATION OF CERTAIN BUILDINGS AT THE KELLY AIR FORCE BASE, TEXAS. WHILE IT WAS CONTEMPLATED THAT AWARD WOULD BE MADE AS A WHOLE TO ONE CONTRACTOR, THE WORK TO BE PERFORMED WAS DIVIDED INTO 53 ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK. THE FORGY CONSTRUCTION COMPANY SUBMITTED A BID DATED JUNE 28, 1955, OFFERING TO PERFORM THE WORK AT THE VARIOUS UNIT AND JOB PRICES SET FORTH OPPOSITE EACH ITEM, THE TOTAL OF WHICH IS $283,385.08. SUBSEQUENTLY, BY TELEGRAM DATED JUNE 28, 1955, THE COMPANY REQUESTED THAT ITS BID PRICE FOR ITEM 3 BE REDUCED BY $7,041, MAKING THE AGGREGATE TOTAL PRICE FOR ITEMS 1 TO 53, INCLUSIVE, $276,344.08. THE THREE OTHER AGGREGATE BIDS ON ITEMS 1 TO 53, INCLUSIVE, WERE IN THE AMOUNTS OF $313,329.10, $330,784.32, AND $336,085.25, AND THE GOVERNMENT'S REVISED ESTIMATE FOR THOSE ITEMS WAS $301,363.35.

IN A REPORT DATED JULY 28, 1955, FROM THE CONTRACTING OFFICER, IT WAS STATED THAT ON JUNE 29, 1955, MR. FORGY OF THE FORGY CONSTRUCTION COMPANY TELEPHONED ALLEGING THAT THE COMPANY HAD MADE AN ERROR IN QUOTING ON ITEM 11 OF ITS BID; THAT THE BID PRICE FOR ITEM 11 SHOULD HAVE BEEN APPROXIMATELY $24,000 INSTEAD OF $3,611; AND THAT ON JULY 8, 1955, THE COMPANY WAS REQUESTED TO EXTEND THE PERIOD FOR ACCEPTANCE OF ITS BID. SINCE THE COMPANY ADVISED THAT IT COULD NOT EXTEND THE PERIOD FOR ACCEPTANCE OF ITS BID, ITS BID WAS ACCEPTED BY TELEGRAM DATED JULY 22, 1955, ON THE BASIS OF ITS AGGREGATE BID PRICE OF $276,344.08 FOR ITEMS 1 TO 53, INCLUSIVE, SUBJECT TO CORRECTION, IF AUTHORIZED, BY THE GENERAL ACCOUNTING OFFICE.

IN LETTERS DATED JULY 11, 1955, THE COMPANY STATED THAT ON THE EXCAVATION WORK REQUIRED UNDER ITEM 22, IT RECEIVED FROM ITS SUBCONTRACTOR, A. J. MONIER COMPANY, A QUOTATION IN THE AMOUNT OF $3,375, TO WHICH THE COMPANY STATED, IT ADDED CERTAIN AMOUNTS TO COVER THE ITEMS OF BOND, OVERHEAD, AND PROFIT TO ARRIVE AT ITS BID PRICE OF $3,611 FOR THAT ITEM; THAT ON THE EXCAVATION WORK REQUIRED UNDER ITEM 11, IT RECEIVED FROM ITS SUBCONTRACTOR, A. J. MCNEEL, A QUOTATION IN THE AMOUNT OF $22,787, TO WHICH, THE COMPANY STATED, IT ADDED CERTAIN AMOUNTS FOR BOND, OVERHEAD, AND PROFIT TO ARRIVE AT A PRICE OF $24,382 FOR THAT ITEM; AND THAT WHEN IT INSERTED ITS BID PRICE ON THE BID FORM FOR ITEM 11, IT INADVERTENTLY INSERTED A PRICE OF $3,611--- THE SAME PRICE AS QUOTED BY IT FOR ITEM 22-- - INSTEAD OF THE CORRECT PRICE OF $24,382. THE COMPANY REQUESTED THAT THE CONTRACT PRICE FOR ITEM 11 BE INCREASED BY $20,771, THE DIFFERENCE BETWEEN ITS ORIGINAL BID PRICE OF $3,611 AND ITS ALLEGED INTENDED BID PRICE OF $24,382 FOR THAT ITEM.

IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED THE WORK SHEETS USED IN COMPUTING ITS BID PRICE FOR THE PROJECT. BY LETTER DATED AUGUST 23, 1955, THE COMPANY FURNISHED AN AFFIDAVIT OF THE SUBCONTRACTOR WHO SUBMITTED A QUOTATION ON ITEM 22, AND THE ESTIMATE SHEETS AND AFFIDAVIT OF THE SUBCONTRACTOR, A. J. MCNEEL, WHO SUBMITTED A QUOTATION ON ITEM 11, ON WHICH ITEM, THE COMPANY ALLEGES, AN ERROR WAS MADE. ON ITS SUMMARY ESTIMATE SHEETS, THE SUBCONTRACTOR, A. J. MCNEEL, SUMMARIZED ALL OF THE WORK HE PROPOSED TO PERFORM BY SITES. IN ITS LETTER OF AUGUST 23, 1955, THE FORGY CONSTRUCTION COMPANY STATED THAT IT HAD PLACED ON ITS SUBCONTRACTOR'S SUMMARY ESTIMATE SHEETS ASTERISKS OPPOSITE THE ITEMS OF WORK WHICH MADE UP ITS BID ON ITEM 11 AND THAT THE PRICES FOR THOSE ITEMS TOTAL $24,786--- $1 LESS THAN THE AMOUNT WAS QUOTED TO IT BY ITS SUBCONTRACTOR FOR THE WORK COVERED BY ITEM 11.

ON THE RECORD THERE APPEARS NO DOUBT THAT THE BID OF $3,600 FOR ITEM 11 WAS ERRONEOUS AND THAT THE PRICE FOR THAT ITEM WAS INTENDED TO BE $24,382, AS ALLEGED. ACCORDINGLY, SINCE THE ERROR WAS ALLEGED AND SATISFACTORILY EXPLAINED PRIOR TO AWARD--- WHICH AWARD WAS SUBJECT TO CORRECTION BY THE GENERAL ACCOUNTING OFFICE--- CONTRACT NO. DA-41-243 ENG-3013 MAY BE AMENDED TO INCREASE THE UNIT PRICE FOR ITEM 11 TO $24,382 AND PAYMENT FOR THAT ITEM IS AUTHORIZED TO BE MADE ON THAT BASIS. THE AGGREGATE BID OF THE FORGY CONSTRUCTION COMPANY ON ITEMS 1 TO 53, INCLUSIVE, AS CORRECTED, WILL STILL BE THE LOWEST AGGREGATE BID RECEIVED ON THOSE ITEMS.

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

THE CONTRACTING OFFICER'S STATEMENT OF JULY 28, 1955; A COPY OF THE ABSTRACT OF BIDS; COPIES OF THE CONTRACTOR'S LETTERS OF JULY 11 AND AUGUST 23, 1955, TOGETHER WITH ENCLOSURES; AND THE DISTRICT ENGINEER'S MEMORANDUM OF JULY 28, 1955, TO THE CHIEF OF ENGINEERS, TOGETHER WITH ATTACHED INDORSEMENT ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.