B-126735, FEB. 10, 1956

B-126735, FEB. 10, 1956

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED JANUARY 23, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (MATERIAL) RELATIVE TO AN ALLEGED ERROR IN A BID SUBMITTED BY TRIPLE "A" MACHINE SHOP, INC., ON WHICH CONTRACT NO. MST-3012 DATED JUNE 30, 1955, FOR SHIP REPAIRS WAS BASED. A DECISION IS REQUESTED AS TO THE ACTION TO BE TAKEN CONCERNING THE CONTRACTOR'S REQUEST FOR AN INCREASE OF $15,000 IN THE CONTRACT PRICE.

THE RECORD SHOWS THAT THE BIDS WERE OPENED ON JUNE 24, 1955, AND THAT ON THE SAME DATE, PROMPTLY AFTER THE OPENING, THE CONTRACTOR ALLEGED THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT AN ITEM OF $15,000 HAD BEEN INADVERTENTLY OMITTED. THE ALLEGATION OF ERROR WAS FORMALIZED BY AN EXPLANATORY LETTER OF THE SAME DATE WHEREIN THE CORPORATION REQUESTED AN INCREASE OF $15,000 IN ITS BID PRICE FOR THE CATEGORY "A" ITEMS. SUBSTANTIATION OF ITS ALLEGATION OF ERROR AND INTENDED BID PRICE THE CORPORATION FORWARDED WITH ITS LETTER ITS ORIGINAL WORKSHEETS ON WHICH THE BID PRICES PER ITEM FOR BOTH THE CATEGORY "A" ITEMS AND CATEGORY "B" ITEMS WERE INSERTED. IT ALSO FORWARDED TWO ADDING MACHINE TAPES ONE OF WHICH CONTAINED THREE OBVIOUS MISTAKES. THE OTHER, APPARENTLY A CORRECTED TAPE, SHOWED A RECAPITULATION OF THE CATEGORY "A" ITEMS, CORRECTLY TAKEN FROM ITS WORKSHEETS, TOTALING $90,606. THIS OBVIOUSLY WAS ITS ORIGINALLY COMPUTED AGGREGATE BID FOR THE CATEGORY "A" ITEMS, INSTEAD OF $75,406, THE AMOUNT QUOTED THEREFOR IN ITS BID, AND IT WAS EXPLAINED IN THE LETTER THAT THE ERROR OCCURRED THROUGH THE DEDUCTION FROM THE FINAL TOTAL OF A $15,000 CORRECTION WHICH HAD ALREADY BEEN DEDUCTED IN COMPUTING THE TOTAL.

IT FURTHER APPEARS FROM A CHECK ON THE WORKSHEETS AND THE TAPES THAT NOT ONLY WAS THE ITEM OF $15,000 OMITTED AS ALLEGED, BUT THAT A FURTHER ITEM OF $200 ALSO WAS OMITTED, WHICH IS NOT INCLUDED IN THE CONTRACTOR'S CLAIM FOR RELIEF. THE ABSTRACT OF BIDS SHOWS THAT THE FIVE OTHER BIDS RECEIVED FOR THE CATEGORY "A" ITEMS RANGED FROM $102,370 TO $161,047.

AN ANALYSIS OF THE CONTRACTOR'S ORIGINAL WORKSHEETS AND ITS ADDING MACHINE TAPES SATISFACTORILY ESTABLISHES THAT THE INTENDED TOTAL BID PRICE ON THE CATEGORY "A" ITEMS WAS $90,606, INCLUDING $15,000 FOR ITEM NO. 4 WHICH CLEARLY WAS OMITTED AS THE CONTRACTOR CONTENDS.

IT IS ADMINISTRATIVELY REPORTED THAT DUE TO THE EXISTING URGENT NEED FOR THE SHIP REPAIR WORK, THE CONTRACTOR'S BID OF $75,406 FOR THE CATEGORY "A" ITEMS, WAS ACCEPTED ON JUNE 30, 1955--- NOTWITHSTANDING ITS ALLEGATION OF ERROR--- SUBJECT, HOWEVER, TO A POST-AWARD DECISION ON THE CORPORATION'S REQUEST FOR A PRICE INCREASE OF $15,000. IN THIS CONNECTION, THE CONTRACTING OFFICER IN A REPORT DATED JANUARY 6, 1956, TO THE BUREAU OF SUPPLIES AND ACCOUNTS STATED THAT ALTHOUGH THE JOB ORDER (NOTICE OF AWARD) DOES NOT EXPRESSLY SO PROVIDE, THERE WAS A COMPLETE UNDERSTANDING BETWEEN THE PARTIES AT ALL TIMES THAT THE AWARD WAS SUBJECT TO CORRECTION OF THE BID PRICE IF WARRANTED BY THE CIRCUMSTANCES INVOLVED.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD IN THIS CASE THERE IS NO DOUBT THAT THE CORPORATION MADE A BONA FIDE ERROR IN ITS BID AS ALLEGED. THE RECORD ALSO ESTABLISHES THAT THE ERROR WAS BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER BEFORE AWARD, WITH SUFFICIENT SUBSTANTIATING EVIDENCE TO PRECLUDE A VALID AWARD AT THE BID PRICE. SINCE AN AWARD WAS MADE, DUE TO AN EXIGENCY, SUBJECT TO A SUBSEQUENT DECISION IN THE MATTER, THE CONCLUSION IS WARRANTED ON THE BASIS OF THE PRESENT RECORD THAT THE CONTRACTOR'S COMPENSATION CANNOT BE LIMITED TO THE BID PRICE.

ACCORDINGLY, SINCE IT IS REPORTED THAT THE CONTRACT WORK HAS BEEN COMPLETED, AND NO QUESTION HAVING BEEN RAISED AS TO THE REASONABLENESS OF THE ADDITIONAL AMOUNT CLAIMED, PAYMENT IS AUTHORIZED TO BE MADE TO TRIPLE "A" MACHINE SHOP, INC., IN THE AMOUNT OF $15,000 IN EXCESS OF THE SPECIFIED CONTRACT PRICE, OR A TOTAL AMOUNT OF $90,406, SUCH PRICE BEING SUBSTANTIALLY LESS THAN THE NEXT LOWEST BID OF $102,370 FOR THE WORK.

THE PAPERS FURNISHED WILL BE RETAINED IN OUR FILES UNLESS THEIR RETURN IS REQUESTED.