B-128010, MAY 28, 1956

B-128010: May 28, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER OF MAY 21. REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN REGARDING AN ERROR ALLEGED BY HUNTINGTON HEATING AND SUPPLY COMPANY TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. THE WORK INVOLVED IS DIVIDED INTO 11 ITEMS. THE LAST THREE ITEMS CONSISTING OF PIPE ARE FURTHER DIVIDED INTO FOUR ALTERNATES. ALTERNATE A IS BASED ON USING CAST-IRON PIPE THROUGHOUT. THE FIRST EIGHT ITEMS ARE COMMON TO ALL FOUR ALTERNATES. THE RATIO OF THE BIDS ON ALTERNATE B TO ALTERNATE ARE AS FOLLOWS: CHART RATIO OF BIDDER ALTERNATE A ALTERNATE B ALTERNATE B TO A HUNTINGTON HEATING AND SUPPLY CO. $275. 813.10 92.0 IT IS REPORTED THAT IMMEDIATELY FOLLOWING THE OPENING OF THE BIDS ON MAY 27.

B-128010, MAY 28, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 21, 1956, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN REGARDING AN ERROR ALLEGED BY HUNTINGTON HEATING AND SUPPLY COMPANY TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. ENG-46-022-56 17 ISSUED BY THE CORPS OF ENGINEERS, HUNTINGTON DISTRICT, HUNTINGTON, WEST VIRGINIA.

THE INVITATION REQUESTED BIDS FOR REHABILITATION OF WATER DISTRIBUTION SYSTEM AND INSTALLATION OF WATER SUPPLY MAIN FOR ROSSFORD ORDNANCE DEPOT, OHIO. THE WORK INVOLVED IS DIVIDED INTO 11 ITEMS. THE LAST THREE ITEMS CONSISTING OF PIPE ARE FURTHER DIVIDED INTO FOUR ALTERNATES, ALTERNATE A THROUGH ALTERNATE D. ALTERNATE A IS BASED ON USING CAST-IRON PIPE THROUGHOUT, ALTERNATE B ON USING CEMENT-ASBESTOS PIPE THROUGHOUT, AND ALTERNATES C AND D ON USING A COMBINATION OF CAST IRON AND CEMENT-ASBESTOS PIPE. THE FIRST EIGHT ITEMS ARE COMMON TO ALL FOUR ALTERNATES.

THE TOTAL AMOUNT OF THE SIX BIDS RECEIVED IN RESPONSE TO THE INVITATION ON ALTERNATES A AND B; THE GOVERNMENT'S ESTIMATE ON THE ALTERNATES; AND THE RATIO OF THE BIDS ON ALTERNATE B TO ALTERNATE ARE AS FOLLOWS:

CHART

RATIO OF

BIDDER ALTERNATE A ALTERNATE B ALTERNATE B TO A HUNTINGTON HEATING

AND SUPPLY CO. $275,102.15 $234,993.35 85.4 PERCENT BIDDER NO. 2 308,436.50 292,557.50 94.9 BIDDER NO. 3 374,679.00 348,889.00 93.1 BIDDER NO. 4 390,314.00 390,314.00 100.0 BIDDER NO. 5 416,020.00 389,856.00 93.7 BIDDER NO. 6 458,005.00 435,304.50 95.0 GOVERNMENT ESTIMATE 363,987.10 334,813.10 92.0

IT IS REPORTED THAT IMMEDIATELY FOLLOWING THE OPENING OF THE BIDS ON MAY 27, 1956, A REPRESENTATIVE OF HUNTINGTON HEATING AND SUPPLY COMPANY NOTIFIED THE CONTRACTING OFFICER AS TO THE GREAT POSSIBILITY OF A MISTAKE IN THE COMPANY'S BID, IN VIEW OF THE DISPARITY BETWEEN ITS BID PRICES AND THOSE OF OTHER BIDDERS, AND, ALSO, AS COMPARED WITH THE GOVERNMENT'S ESTIMATE. BY LETTER DATED MARCH 30, 1956, AND SUBSEQUENT CORRESPONDENCE, THE COMPANY CONFIRMED ITS BID PRICE ON ALTERNATE A. HOWEVER, THE COMPANY ALLEGED THAT A MISTAKE HAD BEEN MADE ON ALTERNATES B, C AND D, AND SUBMITTED IN SUPPORT OF THIS ALLEGATION ITS WORKSHEETS AND SUPPLIERS' QUOTATIONS FOR CAST-IRON AND CEMENT ASBESTOS PIPE.

THE COMPANY ALLEGES THAT ITS BID PRICE ON ALTERNATE A CAST-IRON PIPE WAS PREPARED IN DETAIL; THAT IT WAS INTENDED THAT THE PRICES FOR ALTERNATES B, C AND D WOULD BE THE SAME EXCEPT FOR THE DIFFERENCE BETWEEN THE COST OF CAST-IRON AND CEMENT-ASBESTOS PIPE; THAT THROUGH SOME METHOD THIS DIFFERENCE WAS FIGURED AT AN AVERAGE OF $1.32 PER LINEAL FOOT FOR THE THREE SIZES OF PIPE; AND THAT THE $1.32 FIGURE WAS DEDUCTED FROM THE PRICES ESTIMATED FOR ALTERNATE A TO ARRIVE AT THE PRICES FOR ALTERNATES B, C AND D (EXCEPT ON ITEM 9 OF ALTERNATES B AND C WHERE THROUGH MISTAKE $1.02 WAS DEDUCTED). IT IS FURTHER ALLEGED THAT, IN ACCORDANCE WITH ITS INTENTION, THE ACTUAL DEDUCTION SHOULD HAVE BEEN ONLY $0.513 FOR EIGHT- INCH PIPE; $0.718 FOR TEN-INCH PIPE AND $0.853 FOR 12-INCH PIPE. THE EVIDENCE SUBMITTED INDICATES THAT THESE FIGURES DO REPRESENT THE DIFFERENCES IN COST BETWEEN THE SEVERAL SIZES OF CAST-IRON PIPE AND CEMENT -ASBESTOS PIPE. THE COMPANY REQUESTS THAT ITS QUOTATIONS ON ALTERNATES B, C AND D BE DISREGARDED OR THAT THEY BE CORRECTED ACCORDINGLY.

THERE IS NOTHING OF RECORD TO SHOW ANY BASIS FOR A DEDUCTION OF $1.32 AS REPRESENTING THE DIFFERENCE IN COST BETWEEN CAST-IRON AND CEMENT-ASBESTOS PIPE. HOWEVER, THE FACT REMAINS THAT THE PRIMARY DIFFERENCE BETWEEN THE COST OF ALTERNATE A AND THE OTHER ALTERNATES IS THE COST OF THE PIPE. THIS CONNECTION IT IS NOTED THAT THE DIFFERENCE BETWEEN ALL OTHER BIDS, EXCEPT ONE WHICH IS REPORTED TO BE UNREALISTIC, AND THE GOVERNMENT'S ESTIMATE ON ALTERNATES A AND B IS FROM FIVE TO EIGHT PERCENT, WHEREAS THERE IS A DIFFERENCE OF 14.6 PERCENT IN THE AMOUNTS QUOTED BY HUNTINGTON HEATING AND SUPPLY COMPANY.

THUS, IT WOULD APPEAR THAT SOME ERROR WAS MADE BY HUNTINGTON HEATING AND SUPPLY COMPANY IN ARRIVING AT ITS PRICES FOR ALTERNATES B, C AND D. UNDER THE CIRCUMSTANCES, THE BID OF THE COMPANY ON THOSE ALTERNATES COULD NOT BE ACCEPTED IN GOOD FAITH. HOWEVER, THE EVIDENCE IS NOT SUCH AS TO WARRANT A DEPARTURE FROM THE GENERAL RULE THAT BIDS MAY NOT BE CHANGED AFTER THE BIDS HAVE BEEN OPENED. SEE 17 COMP. GEN. 575.

ACCORDINGLY, YOU ARE ADVISED THAT THE BID OF HUNTINGTON HEATING AND SUPPLY COMPANY ON ALTERNATES B, C AND D SHOULD BE DISREGARDED.

THE ORIGINAL FILE FOLDER IS RETURNED, THE DUPLICATE BEING RETAINED HERE.