B-126789, FEB. 3, 1956

B-126789: Feb 3, 1956

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TO THE HONORABLE SECRETARY OF COMMERCE: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 26. FOR THE WORK OF CONSTRUCTING THE CALIFORNIA FOREST DEVELOPMENT ROAD PROJECT 1203-A IS BASED. THE RECORD SHOWS THAT THE BIDS WERE OPENED AT 2:00 O-CLOCK P.M. THAT THE CONTRACT WAS AWARDED TO MR. THE NOTICE OF AWARD APPARENTLY WAS RECEIVED BY MR. A PRICE OF ONLY $300 PER ACRE WAS QUOTED IN THE BID FOR THIS ITEM. WHEREAS THE BID PRICE FOR THE ITEM SHOULD HAVE BEEN $1. THE TOTAL BID FOR ITEM NO. 20 (1) ALLEGEDLY SHOULD HAVE BEEN $72. THE AGGREGATE BID FOR THE PROJECT JOB SHOULD HAVE BEEN $261. THIS REFUSAL WAS BASED NOT ONLY ON THE ALLEGED ERROR ON ITEM NO. 20 (1). ON THE CHANGED PHYSICAL CONDITION OF CERTAIN BRIDGES IN THE CONTRACT SITE AREA AS A RESULT OF THE UNPRECEDENTED STORMS AND FLOODS WHICH OCCURRED AFTER HIS BID WAS SUBMITTED.

B-126789, FEB. 3, 1956

TO THE HONORABLE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 26, 1956, WITH ENCLOSURES, RELATIVE TO AN ALLEGED ERROR IN A BID DATED DECEMBER 22, 1955, SUBMITTED BY JAMES H. CLACK, ON WHICH A PROPOSED CONTRACT DATED DECEMBER 23, 1955, FOR THE WORK OF CONSTRUCTING THE CALIFORNIA FOREST DEVELOPMENT ROAD PROJECT 1203-A IS BASED.

THE RECORD SHOWS THAT THE BIDS WERE OPENED AT 2:00 O-CLOCK P.M. ON DECEMBER 22, 1955, AND THAT THE CONTRACT WAS AWARDED TO MR. CLACK ON DECEMBER 23, 1955. THE NOTICE OF AWARD APPARENTLY WAS RECEIVED BY MR. CLACK BEFORE AN ERROR IN HIS BID COULD BE DISCOVERED AND ALLEGED. LETTER DATED JANUARY 12, 1955, WRITTEN IN MR. CLACK'S BEHALF BY HIS ATTORNEY, ADVISED OF A SERIOUS ERROR ON ITEM NO. 20 (1) OF THE BID COVERING "CLEARING AND GRUBBING.' ALLEGEDLY THROUGH A MISUNDERSTANDING OF HIS SUBCONTRACTOR'S QUOTATION RECEIVED OVER THE TELEPHONE, A PRICE OF ONLY $300 PER ACRE WAS QUOTED IN THE BID FOR THIS ITEM, WHEREAS THE BID PRICE FOR THE ITEM SHOULD HAVE BEEN $1,300 PER ACRE. IN OTHER WORDS, THE TOTAL BID FOR ITEM NO. 20 (1) ALLEGEDLY SHOULD HAVE BEEN $72,800 FOR THE 56 ACRES INVOLVED, INSTEAD OF $16,800 AS QUOTED--- A DIFFERENCE OF $56,000. THUS, THE AGGREGATE BID FOR THE PROJECT JOB SHOULD HAVE BEEN $261,374 INSTEAD OF $205,374 AS QUOTED. THE REFERRED TO LETTER OF JANUARY 12, 1955, ASSERTED THE CONTRACTOR'S REFUSAL TO SIGN THE FORMAL CONTRACT. THIS REFUSAL WAS BASED NOT ONLY ON THE ALLEGED ERROR ON ITEM NO. 20 (1), BUT, ALSO, ON THE CHANGED PHYSICAL CONDITION OF CERTAIN BRIDGES IN THE CONTRACT SITE AREA AS A RESULT OF THE UNPRECEDENTED STORMS AND FLOODS WHICH OCCURRED AFTER HIS BID WAS SUBMITTED. ALLEGED RESTRICTIONS IN THE USE OF THE BRIDGES IMPOSED BY REASON OF THEIR WEAKENED CONDITION WERE SUBSTANTIATED BY A LETTER DATED JANUARY 11, 1956, WHICH MR. CLACK'S ATTORNEY RECEIVED FROM THE DISTRICT ENGINEER, CALIFORNIA DIVISION OF HIGHWAYS. BY TELEGRAM DATED JANUARY 13, 1956, MR. CLACK ADVISED THAT HIS CLAIM OF ERROR WAS AS PRESENTED IN THE LETTER OF JANUARY 12, FROM HIS ATTORNEY, AND REQUESTED THAT HE BE RELIEVED FROM HIS OBLIGATION UNDER BOTH THE BID BOND AND THE CONTRACT. BY SUPPLEMENTAL LETTER FROM MR. CLACK'S ATTORNEY THERE WERE FORWARDED THE SWORN STATEMENTS OF MR. CLACK AND HIS SUBCONTRACTOR WHICH REASONABLY ESTABLISH THAT THE ERROR CONCERNING ITEM NO. 20 (1) WAS MADE AS ALLEGED.

IN YOUR LETTER YOU STATE THAT THE GOVERNMENT ENGINEER PRESIDING AT THE BID OPENING IMMEDIATELY NOTICED THE PROBABILITY OF ERROR IN MR. CLACK'S BID OF $205,374 SINCE IT WAS ONLY 43 PERCENT OF THE ENGINEER'S ESTIMATE OF THE COST OF THE WORK, AND ONLY 31 PERCENT OF THE NEXT LOWEST BID. ALSO, YOU STATE THAT PROMPTLY AFTER THE OPENING, MR. CLACK, UPON BEING ASKED WHETHER HE THOUGHT HE COULD SUCCESSFULLY COMPLETE THE JOB AT HIS LOW BID PRICE, IMMEDIATELY REPLIED THAT "IF HE HAD READ THE SPECIFICATIONS RIGHT HE COULD DO THAT.' THE ABSTRACT OF BIDS SHOWS THAT THE NINE OTHER BIDS RANGED FROM $299,024 TO $515,472 FOR THE JOB. THE GOVERNMENT ENGINEER'S ESTIMATE OF THE COST OF THE WORK WAS $363,169.

IN HIS OFFICE MEMORANDUM DATED JANUARY 13, 1956, THE CONTRACTING OFFICER INDICATED THAT MR. CLACK'S BID PRICE OF $300 FOR THE CLEARING AND GRUBBING WORK CALLED FOR UNDER ITEM NO. 20 (1) WAS PARTICULARLY NOTICEABLE SINCE THE GOVERNMENT ENGINEER'S ESTIMATE WAS $1,000 PER ACRE AND THE NINE OTHER BIDS RANGED FROM $1,000 TO $2,000 PER ACRE FOR THIS WORK, AND THE BIDDER'S ATTENTION WAS INVITED TO THE MATTER OF HIS LOW BID ON THAT ITEM.

IN VIEW OF THE STRONG PROBABILITY OF ERROR IN MR. CLACK'S BID AND SINCE HIS CONFIRMATION OF HIS BID PRICE APPEARS TO HAVE BEEN CONDITIONAL, THE BIDDER SHOULD HAVE BEEN AFFORDED AT LEAST A SPECIFIED REASONABLE PERIOD OF TIME WITHIN WHICH TO REVIEW HIS BID AND VERIFY HIS PRICES. SINCE THIS WAS NOT DONE, THE CONCLUSION IS WARRANTED THAT THE ACCEPTANCE OF THE BID ON DECEMBER 23, 1955, DID NOT CONSUMMATE A VALID AND BINDING CONTRACT. THE AWARD SHOULD, THEREFORE, BE CANCELLED AND MR. CLACK AND HIS SURETY SHOULD BE RELEASED FROM LIABILITY UNDER THE BID BOND.

IN VIEW OF THIS CONCLUSION, IT IS UNNECESSARY TO CONSIDER HERE THE IMPORT OF THE CHANGED CONDITIONS BROUGHT ABOUT BY THE DISASTROUS FLOODS IN THE PROJECT AREA WHICH OCCURRED SUBSEQUENT TO THE AWARD.