B-128011, MAY 28, 1956

B-128011: May 28, 1956

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REGION 7: REFERENCE IS MADE TO YOUR LETTER OF MAY 18. BIDS WERE REQUESTED FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK REQUIRED FOR DRILLING WATER TEST WELLS IN THE ARKANSAS VALLEY. THE WORK TO BE PERFORMED WAS DIVIDED INTO TEN ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK. DISCREPANCIES WERE DISCOVERED IN THE EXTENSIONS OF THREE ITEMS OF THE LOW BID OF THE WESTERN DRILLING COMPANY. IT WAS APPARENT THAT THE COMPANY. WAS QUOTING UNIT PRICES PER FOOT OF WELL RATHER THAN UNIT PRICES PER WELL. IT WAS PROBABLY QUOTING A UNIT PRICE PER HOUR RATHER THAN A UNIT PRICE PER WELL AS CALLED FOR BY THE SCHEDULE. THE UNIT PRICE WILL ERN. " THE ABSTRACT OF BIDS WAS PREPARED ON THE BASIS OF THE UNIT PRICES SHOWN IN THE BID OF THE WESTERN DRILLING COMPANY AS BEING CORRECT.

B-128011, MAY 28, 1956

TO MR. R. J. WALTER, JR., CONTRACTING OFFICER, BUREAU OF RECLAMATION, REGION 7:

REFERENCE IS MADE TO YOUR LETTER OF MAY 18, 1956, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE WESTERN DRILLING COMPANY, GARDEN CITY, KANSAS, ALLEGES IT MADE IN ITS BID OPENED ON APRIL 30, 1956.

BY SPECIFICATIONS NO. 700C-405, BIDS WERE REQUESTED FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK REQUIRED FOR DRILLING WATER TEST WELLS IN THE ARKANSAS VALLEY, INGALLS PUMPING PROJECT, KANSAS. THE WORK TO BE PERFORMED WAS DIVIDED INTO TEN ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK. THE WESTERN DRILLING COMPANY SUBMITTED A BID DATED APRIL 30, 1956, IN PART, AS FOLLOWS:

CHART

"ITEM QUANTITY UNIT

NO. WORK OR MATERIAL AND UNIT PRICE AMOUNT

3 DRILLING PUMPING WELLS

150 FEET DEEP 2 WELLS $6.00 $1800.00

7 TESTING PUMPING WELLS

FOR 24 HOURS 2 WELLS 10.00 240.00

9 NET REDUCTION FOR

SALVAGING PUMPING

WELL MATERIALS AND

FILLING WELLS 150

FEET DEEP 2 WELLS 2.50 750.00 "

YOU STATE THAT, IN PREPARING THE ABSTRACT OF BIDS, DISCREPANCIES WERE DISCOVERED IN THE EXTENSIONS OF THREE ITEMS OF THE LOW BID OF THE WESTERN DRILLING COMPANY; THAT FROM A COMPARISON OF THE OTHER BIDS AND THE ENGINEER'S ESTIMATE, IT WAS APPARENT THAT THE COMPANY, UNDER ITEMS 3 AND 9 OF THE SCHEDULE, WAS QUOTING UNIT PRICES PER FOOT OF WELL RATHER THAN UNIT PRICES PER WELL, AS CALLED FOR BY THE SCHEDULE; AND THAT UNDER ITEM 7, IT WAS PROBABLY QUOTING A UNIT PRICE PER HOUR RATHER THAN A UNIT PRICE PER WELL AS CALLED FOR BY THE SCHEDULE. ALSO, YOU STATE THAT IN ACCORDANCE WITH PARAGRAPH 11/B) OF STANDARD FORM 22, INSTRUCTIONS TO BIDDERS, WHICH PROVIDES, AMONG OTHER THINGS, THAT "IN CASE OF ERROR IN THE EXTENSION OF PRICES, THE UNIT PRICE WILL ERN," THE ABSTRACT OF BIDS WAS PREPARED ON THE BASIS OF THE UNIT PRICES SHOWN IN THE BID OF THE WESTERN DRILLING COMPANY AS BEING CORRECT, RATHER THAN THE EXTENDED AMOUNTS; THAT THE CORRECTION OF THE EXTENDED AMOUNTS REDUCED THE AMOUNT OF THE LOW BID FROM $5,846, AS SHOWN BY THE WESTERN DRILLING COMPANY, TO $4,583, AS SHOWN ON THE ABSTRACT OF BIDS; AND THAT BY LETTER DATED MAY 4, 1956, THE COMPANY WAS REQUESTED TO CONFIRM ITS BID IN THE REDUCED AMOUNT OF $4,583, AS SHOWN ON THE ABSTRACT.

BY LETTER DATED MAY 7, 1956, THE COMPANY ADVISED THAT ITS TOTAL PRICE OF $5,846 WAS CORRECT AND THAT ITS UNIT PRICES WERE PER FOOT RATHER THAN PER WELL ON ITEMS 3 AND 9, AND PER HOUR RATHER THAN PER WELL ON ITEM 7. IN A NOTARIZED LETTER DATED MAY 14, 1956, THE COMPANY STATED:

"THE ERROR IN MY ORIGINAL BID ON UNIT PRICES ITEM 3, SPECIFICATIONS NO. 700C-405 IS A UNIT PRICE PER FOOT BASED ON THE NORMAL PRICE FOR DRILLING THIS TYPE OF WELL. IT SHOULD HAVE BEEN MULTIPLIED BY 150 FEET TO GIVE THE UNIT PRICE PER WELL OF $900.00 WITH THE EXTENSION PRICE FOR TWO WELLS $1800.00 AS BID.

"ITEM 7 BASED ON THE SAME METHOD OF COMPUTATION OF $10.00 PER HOURS, $10.00 MULTIPLIED BY 24 HOURS PER WELL GIVE A UNIT PRICE OF $240.00 PER WELL AND AN EXTENSION OF $480.00. FOR TWO WELLS. ITEM 7 SHOULD HAVE BEEN COMPUTED THE SAME AS ITEM 8.

"ITEM 9, $2.50 PER FOOT MULTIPLIED BY 150 FEET PER WELL GIVING A UNIT PRICE OF $375.00 PER WELL WITH AN EXTENDED PRICE OF $750.00 FOR TWO WELLS.

"THIS IS A SWORN STATEMENT OF THE FACTS OF THE INTENT OF THE BIDDER IN FILLING OUT THE BID.'

ON THE BASIS OF FACTS AND EVIDENCE OF RECORD, IT IS APPARENT THAT THE UNIT PRICES QUOTED BY THE COMPANY FOR ITEMS 3 AND 9 ARE PER FOOT RATHER THAN PER WELL AND THAT ON ITEM 9, THE UNIT PRICE QUOTED IS PER HOUR RATHER THAN PER WELL. ACCORDINGLY, SINCE IT WAS BELIEVED THAT THE BID AS TO ITEMS 3, 7 AND 9 WAS ERRONEOUS AND SINCE SUCH BELIEF WAS CONFIRMED AND THE ERROR WAS EXPLAINED BY THE WESTERN DRILLING COMPANY PRIOR TO AWARD, THE BID MAY BE CORRECTED TO PROVIDE FOR UNIT PRICES OF $900, $240, AND $375 FOR ITEMS 3, 7 AND 9, RESPECTIVELY, WHICH WILL MAKE NO CHANGE IN THE TOTAL PRICES SPECIFIED FOR THOSE ITEMS.

IN THE EVENT OF AWARD TO THE WESTERN DRILLING COMPANY, A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.