B-127968, JUN. 7, 1956

B-127968: Jun 7, 1956

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED MAY 17. WAS AWARDED. THE DECISION IS BEING ADDRESSED TO YOU. WAS NOT FORWARDED HERE BUT IT APPEARS FROM THE ABSTRACT OF BIDS THAT THE CORPORATION OFFERED TO CONSTRUCT THE BUILDING FOR THE SUM OF $384. IT APPEARS THAT ON THE DAY AFTER BIDS WERE OPENED AND BEFORE AWARD. THERE WAS A DEFINITE ERROR MADE BY THE PLUMBING SUB-CONTRACTOR WHO QUOTED US A PRICE ON THE PLUMBING OVER THE TELEPHONE AT 12:45 P.M. THE SAME DATE THE BID WAS SUBMITTED. THE PRICE QUOTED OVER THE TELEPHONE WAS IN THE AMOUNT OF $82. THIS PRICE WAS USED IN COMPILING THE MAKING UP OUR FINAL BID SUBMITTED AT :30 P.M. "THIS BID WAS TAKEN IN THE NORMAL MANNER OF TAKING BIDS OVER THE TELEPHONE AT THE LAST MINUTE BEFORE SUBMITTING OUR PROPOSAL ON THE SUBJECT JOB.

B-127968, JUN. 7, 1956

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED MAY 17, 1956, WITH ENCLOSURES, FROM B. J. KATZ, BUREAU OF YARDS AND DOCKS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE PITTMAN CONSTRUCTION COMPANY, INC., ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. N04 91254, DATED APRIL 25, 1956, WAS AWARDED.

SINCE AN AWARD HAS BEEN MADE IN THE PRESENT CASE, THE DECISION IS BEING ADDRESSED TO YOU.

THE DISTRICT PUBLIC WORKS OFFICE, EIGHTH NAVAL DISTRICT, NEW ORLEANS, LOUISIANA, BY SPECIFICATION NO. 49817, AS AMENDED BY ADDENDA NOS. 1 AND 2, REQUESTED BIDS--- APPARENTLY OPENED ON APRIL 17, 1956--- FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK REQUIRED FOR THE CONSTRUCTION OF AN AVIATION GROUND TRAINING BUILDING, JARTC, ALVIN CALLENDER FIELD, NEW ORLEANS, LOUISIANA. THE BID OF THE PITTMAN CONSTRUCTION COMPANY, INC., WAS NOT FORWARDED HERE BUT IT APPEARS FROM THE ABSTRACT OF BIDS THAT THE CORPORATION OFFERED TO CONSTRUCT THE BUILDING FOR THE SUM OF $384,464. THE TWO OTHER BIDDERS ON THE PROJECT QUOTED PRICES OF $422,500 AND $428,669.

IT APPEARS THAT ON THE DAY AFTER BIDS WERE OPENED AND BEFORE AWARD, THE PITTMAN CONSTRUCTION COMPANY, INC., ADVISED BY TELEPHONE THAT IT HAD RELIED UPON AN ERRONEOUS TELEPHONE QUOTATION FROM ITS PLUMBING SUBCONTRACTOR AND REQUESTED THAT IT BE PERMITTED TO WITHDRAW ITS BID ON THE PROJECT. HOWEVER, SINCE THE BUREAU DID NOT WISH TO DELAY THE WORK, IT PERSUADED THE CORPORATION TO ACCEPT THE AWARD ON THE BASIS OF ITS ORIGINAL BID PRICE OF $384,464, SUBJECT TO CORRECTION, IF AUTHORIZED, BY HIGHER AUTHORITY.

IN A LETTER DATED APRIL 27, 1956, THE CORPORATION STATED:

"AT THE TIME WE SUBMITTED THE SUBJECT PROPOSAL, THERE WAS A DEFINITE ERROR MADE BY THE PLUMBING SUB-CONTRACTOR WHO QUOTED US A PRICE ON THE PLUMBING OVER THE TELEPHONE AT 12:45 P.M. ON APRIL 17, 1956, THE SAME DATE THE BID WAS SUBMITTED. THE PRICE QUOTED OVER THE TELEPHONE WAS IN THE AMOUNT OF $82,910.00. THIS PRICE WAS USED IN COMPILING THE MAKING UP OUR FINAL BID SUBMITTED AT :30 P.M. ON THE SAME DATE.

"THIS BID WAS TAKEN IN THE NORMAL MANNER OF TAKING BIDS OVER THE TELEPHONE AT THE LAST MINUTE BEFORE SUBMITTING OUR PROPOSAL ON THE SUBJECT JOB; AND IT WAS THE FOLLOWING MORNING BEFORE WE RECEIVED A WRITTEN CONFIRMATION COPY OF THE BID. WHEN WE DID RECEIVE IT, WE FOUND THAT THE SUB-CONTRACTOR HAD MADE A MISTAKE IN QUOTING US HIS PROPOSAL OVER THE TELEPHONE, BUT HIS CORRECT BID WAS $94,517.00, WHICH MADE A DIFFERENCE OF $11,607.00, THE AMOUNT OF THE ERROR HE HAD MADE IN HIS QUOTATION TO US BY TELEPHONE ON APRIL 17, THE WRITTEN PROPOSAL HAVING BEEN RECEIVED IN OUR OFFICE AT 10:00 A.M. ON APRIL 18, 1956.

"WE IMMEDIATELY CONTACTED THE RUMOLD PLUMBING COMPANY, AND IT WAS STATED THAT HIS ESTIMATOR HAD MADE A MISTAKE IN QUOTING THE PRICE OVER THE TELEPHONE, AND IT WAS AFTER THE BIDS HAD ALREADY BEEN SUBMITTED BEFORE HE FOUND THAT HE HAD MADE A MISTAKE IN SUBMITTING THE BID TO US OVER THE TELEPHONE.

"FOR THIS REASON, WE HEREWITH ASK FOR AN INCREASE IN CONTRACT PRICE IN THE AMOUNT OF THE DIFFERENCE FROM THE BID WHICH WAS USED IN OUR PROPOSAL, IN THE AMOUNT OF $82,910.00, AND THE NEXT LOWEST BIDDER, WHICH BID WAS SUBMITTED BY ANOTHER PLUMBING FIRM, BRINDELL-BRUNO, INC., IN THE AMOUNT OF $92,085.00, MAKING A TOTAL INCREASE IN CONTRACT PRICE IN THE AMOUNT OF $9,175.00.

"WE ATTACH HERETO EXHIBITS SHOWING AND OUTLINING THE WAY THE MISTAKE OCCURRED, BY TAKING THE PLUMBER'S BID OVER THE TELEPHONE:

"EXHIBIT "A"--- IN PREPARING OUR PROPOSAL ON THE AVIATION GROUND TRAINING BUILDING, WE HEREWITH SUBMIT OUR SUMMARY SHEET SHOWING THAT WE HAD A PRELIMINARY ESTIMATE WORKED UP BY OUR FORCES ON THE PLUMBING AND AIR CONDITIONING IN THE AMOUNT OF $90,000.00, BEFORE WE RECEIVED THE TELEPHONE BID, AS SHOWN ON EXHIBIT "A" AND ANNEXED HERETO.

"EXHIBIT "B"--- WE ATTACH HERETO EXHIBIT "B," A PHOTOSTATIC COPY OF THE PAD USED BY MR. STRAHAN WHEN HE TOOK THE RUMOLD BID OVER THE TELEPHONE, IN THE AMOUNT OF $82,910.00. YOU WILL PLEASE NOTE THE QUESTIONS ASKED OF THE RUMOLD ESTIMATOR ABOUT THE DIFFERENT ITEMS HE HAD INCLUDED IN HIS BID ON THIS PHOTOSTAT SHOWN ON THE SECOND SHEET OF EXHIBIT "B.'

"EXHIBIT "C"--- EXHIBIT "C" SHOWS WHERE OUR MR. STRAHAN TRANSFERRED THE $82,910.00 BID, TAKEN BY TELEPHONE, TO HIS SUMMARY SHEET OF THE SUB- CONTRACTORS' BIDS, ALL OF WHICH IS ATTACHED HERETO AND MADE A PART OF OUR FILE. THE VARIOUS SUB-CONTRACTORS WHO QUOTED BIDS OVER THE TELEPHONE AT THE LAST MINUTE, BEFORE WE CLOSED OUT OUR GENERAL CONTRACT PROPOSAL ON APRIL 17, ARE SHOWN ON THE ATTACHED SHEETS NOS. 1, 2, 3, 4 AND 5, FOR YOUR INFORMATION. THIS SHOWS THE REGULAR MANNER IN WHICH WE RECEIVE OUR BIDS BY TELEPHONE FROM THE VARIOUS SUBCONTRACTORS.

"IN ONE INSTANCE, IN THIS SAME PROPOSAL, ON SHEET 2--- IN THE LAST PARAGRAPH--- IT SHOWS WHERE THE PLASTERING CONTRACTOR HAD ORIGINALLY QUOTED A PRICE IN THE AMOUNT OF $14,500.00, WHICH WAS A MISTAKE IN HIS PROPOSAL, AND HE CALLED BACK AND CORRECTED HIS PROPOSAL TO READ $16,500.00.

"EXHIBIT "D"--- WE ALSO ATTACH HERETO OUR FINAL CUT AND ADD SHEET, SHOWING WHEN THE PROPOSAL IS ALMOST COMPLETED, THAT THE DEDUCTION IN THE PLUMBING WAS TRANSFERRED FROM THE SUB-CONTRACTORS' SUMMARY SHEETS TO THE CUT AND ADD SHEET, SHOWING THE AMOUNT OF DEDUCTION MADE AT THE TIME THE FINAL PROPOSAL WAS BEING COMPLETED. THIS IS SHOWN ON EXHIBIT "D," ATTACHED HERETO.

"EXHIBIT "E"--- WE ALSO ATTACH HERETO THE FINAL BID SHEET, EXHIBIT "E," SHOWING A CUT IN THE PROPOSAL IN THE AMOUNT OF $12,431.00, TRANSFERRED FROM THE PREVIOUS CUT AND ADD SHEET UNDER EXHIBIT "D.'"

ALSO, IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED COPIES OF A QUOTATION DATED APRIL 17, 1956, THE DAY OF THE BID OPENING, AND OF A LETTER DATED APRIL 19, 1956, WHICH, IT STATES, IT RECEIVED FROM ITS PLUMBING SUBCONTRACTOR, J. L. RUMOLD AND COMPANY, INC.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS LITTLE, IF ANY, DOUBT THAT THE ERRONEOUS VERBAL QUOTATION OF ITS PLUMBING SUBCONTRACTOR WAS USED BY THE COMPANY IN COMPUTING ITS BID PRICE FOR THE PROJECT. ACCORDINGLY, CONTRACT NO. NOY-91254, WHICH WAS AWARDED BECAUSE OF THE URGENCY OF THE WORK, MAY BE AMENDED TO INCREASE THE CONSIDERATION TO $393,639, THE AMOUNT REQUESTED BY THE CORPORATION, WHICH AMOUNT IS STILL LOWER THAN THE AMOUNTS OF THE OTHER BIDS RECEIVED ON THE PROJECT, AND PAYMENT IS AUTHORIZED TO BE MADE ON THAT BASIS.

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