B-126693, FEB. 24, 1956

B-126693, FEB. 24, 1956

TO HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 17, 1956, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR THORBURN AND LOGOZO, SEATTLE, WASHINGTON, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA 45-012-AVI-739 WAS AWARDED.

THE PURCHASING AND CONTRACTING OFFICE, FORT LAWTON, WASHINGTON, BY INVITATION NO. AVI-45-012-56-28, REQUESTED BIDS--- TO BE OPENED NOVEMBER 25, 1955--- FOR FURNISHING MATERIALS AND LABOR AND FOR PERFORMING ALL WORK NECESSARY FOR THE REPLACEMENT AND INSTALLATION OF NEW SEWER LINES AT THE FORT. PROSPECTIVE BIDDERS WERE ADVISED UNDER PARAGRAPH SC-1 OF THE SPECIAL CONDITIONS OF THE INVITATION THAT IT WAS DESIRABLE THAT COMMENCEMENT DATE BE NOT LATER THAN DECEMBER 15, 1955, AND COMPLETION DATE NOT LATER THAN MARCH 15, 1956. IN RESPONSE, THORBURN AND LOGOZO SUBMITTED A BID OFFERING TO PERFORM THE WORK FOR THE LUMP SUM OF $6,450. THE ABSTRACT OF BIDS SHOWS THAT THE FOUR OTHER BIDS ON THE PROJECT WERE IN THE AMOUNTS OF $10,440, $14,065, $18,845.71, AND$20,102. HOWEVER, THE BIDDER WHO QUOTED A PRICE OF $10,440 SPECIFIED THAT HE WOULD START WORK WITHIN 60 DAYS AFTER RECEIPT OF NOTICE TO PROCEED AND COMPLETE THE WORK WITHIN 240 DAYS AFTER RECEIPT OF SUCH NOTICE. IT IS REPORTED THAT THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS $14,412.

IT IS REPORTED THAT SINCE THE BID OF THORBURN AND LOGOZO WAS OUT OF LINE WITH THE GENERAL PATTERN OF THE BIDS AND THE GOVERNMENT'S ESTIMATE, THE COMPANY WAS REQUESTED BY TELEPHONE TO VERIFY ITS BID AND THAT SUBSEQUENTLY THE COMPANY ADVISED VERBALLY THAT, EXCEPT FOR A MINOR ERROR WHICH IT WAS WILLING TO LET STAND UNCORRECTED, ITS BID WAS CORRECT. THE BID OF THE COMPANY WAS ACCEPTED ON DECEMBER 6, 1955.

IT APPEARS FROM THE RECORD THAT IMMEDIATELY AFTER THE COMPANY HAD COMMENCED WORK ON THE PROJECT ON DECEMBER 13, 1955, THE GOVERNMENT INSPECTOR OF THE PROJECT ADVISED THE CONTRACTING OFFICER THAT SPECIFICATIONS WERE NOT BEING COMPLIED WITH BY THE COMPANY IN THAT CONCRETE PIPE WAS BEING DELIVERED TO THE PROJECT IN LIEU OF THE CAST IRON PIPE REQUIRED BY THE SPECIFICATIONS. THE MATTER WAS DISCUSSED WITH THE COMPANY WHO ALLEGED THAT IT HAD MISINTERPRETED THE SPECIFICATIONS.

IN A LETTER DATED DECEMBER 13, 1955, THORBURN AND LOGOZO ADVISED THAT IT HAD INTERPRETED THE TECHNICAL SPECIFICATIONS, PARTICULARLY PARAGRAPH TS 3- 03F, TO MEAN THAT THE TYPE OF SEWER PIPE TO BE INSTALLED WAS TO BE THE SAME TYPE AS THE EXISTING PIPE TO BE REPLACED AND THAT, THEREFORE, IN COMPUTING ITS BID IT ASSUMED THAT ALL OF THE PIPE TO BE INSTALLED, WITH THE EXCEPTION OF THE LINES THAT ARE DEFINITELY SHOWN AS CAST IRONON THE PLAN, SHOULD BE CONCRETE OR CLAY. THE COMPANY REQUESTED THAT THE CONTRACT PRICE OF THE PROJECT BE INCREASED FROM $6,450 TO $9,976.20, TO COVER THE DIFFERENCE BETWEEN THE COST OF THE CONCRETE PIPE AND THE COST OF THE CAST IRON SOIL PIPE. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS ORIGINAL ESTIMATE SHEET WHICH, IT ALLEGES, WAS BASED ON USING CONCRETE PIPE FOR THE MAJOR PORTION OF THE JOB, AND A REVISED ESTIMATE SHEET BASED ON USING CAST IRON SOIL PIPE FOR THE ENTIRE JOB. COMPARISON OF THE PRICES SHOWN ON BOTH ESTIMATE SHEETS INDICATES THAT THE PRICE SHOWN ON THE ORIGINAL ESTIMATE SHEET FOR THE SEWER PIPE IS APPROXIMATELY ONE-THIRD OF THE PRICE SHOWN ON THE REVISED ESTIMATE SHEET FOR THAT ITEM.

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942, 947, AND 27 ID. 17. HOWEVER, SINCE IN THE PRESENT CASE NEITHER THE ALLEGED BID CONFIRMATION NOR THE REQUEST THEREFOR WAS IN WRITING, LESS WEIGHT SHOULD ATTACH THERETO THAN IF THE VERIFICATION WERE REQUESTED AND RECEIVED IN THE CUSTOMARY FORMAL MANNER. MOREOVER, SINCE THE BID PRICE OF THORBURN AND LOGOZO WAS LESS THAN ONE- HALF OF THE AVERAGE PRICE QUOTED BY THE OTHER BIDDERS AND OF THE PRICE ESTIMATED BY THE GOVERNMENT AS THE COST OF THE WORK, THE CONTRACTING OFFICER STILL SHOULD HAVE SUSPECTED THAT THE BID OF $6,450 WAS ERRONEOUS, NOTWITHSTANDING THE BID CONFIRMATION. IN THE CIRCUMSTANCES, AND SINCE THE ERROR WAS ALLEGED AND ESTABLISHED PROMPTLY AFTER RECEIPT OF THE NOTICE TO PROCEED, THE COMPANY SHOULD NOT BE REQUIRED TO PERFORM THE PROJECT WORK AT THE PRICE QUOTED IN ITS BID.

IT IS REPORTED THAT AFTER THE COMPANY ALLEGED ERROR IN ITS BID IT WAS INSTRUCTED TO CONTINUE THE WORK AT THE PRICE BID SUBJECT TO POSSIBLE CORRECTION BY HIGHER AUTHORITY. ACCORDINGLY, CONTRACT NO. DA 45-012-AVI- 739, MAY BE AMENDED TO INCREASE THE PRICE FOR THE PROJECT TO $9,976.20, AS RECOMMENDED BY THE CONTRACTING OFFICER, AND PAYMENT FOR THE WORK IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID OF THORBURN AND LOGOZO, AS CORRECTED, WILL STILL BE THE LOWEST BID RECEIVED ON THE PROJECT.

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

THE CONTRACTING OFFICER'S UNDATED STATEMENT; A COPY OF THE ABSTRACT OF BIDS; AND A COPY OF THE CONTRACTOR'S LETTER OF DECEMBER 13, 1955, TOGETHER WITH ENCLOSURES ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.