B-129754, NOV. 15, 1956

B-129754: Nov 15, 1956

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TO THE SECRETARY OF COMMERCE: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 8. THE LETTER ADVISES THAT A TOTAL OF SEVENTEEN BIDS WERE RECEIVED. THE SECOND LOW BID WAS SUBMITTED BY THE CEDAR CREEK LOGGING COMPANY IN THE AMOUNT OF $138. WHILE THE THIRD LOW BID WAS IN THE AMOUNT OF $140. THE ENGINEER'S ESTIMATE FOR THE COST OF THE PROJECT WAS $223. THE LOW BIDDER WAS REQUESTED TO CONFIRM HIS BID. WHICH IS DESCRIBED AS 100. THE BIDDER CONTENDS THAT A CORRECT COMPUTATION WOULD HAVE INCLUDED 15. WOULD HAVE RESULTED IN A UNIT PRICE OF 44.5 CENTS PER CUBIC YARD AND A COMPOSITE BID PRICE OF $51. THERE IS NO DOUBT THAT A BONA FIDE ERROR WAS MADE IN THE LOW BID AS ALLEGED. SINCE THE CONTRACTING OFFICER SUSPECTED THAT THE BID WAS ERRONEOUS.

B-129754, NOV. 15, 1956

TO THE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 8, 1956, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, RELATIVE TO AN ALLEGATION OF ERROR IN A BID SUBMITTED BY FRED ROUSE CONSTRUCTION COMPANY FOR THE CONSTRUCTION OF OREGON TIMBER ACCESS ROAD PROJECT BLM 81-A.

THE LETTER ADVISES THAT A TOTAL OF SEVENTEEN BIDS WERE RECEIVED. THESE BIDS RANGED FROM A LOW OF $119,572, SUBMITTED BY THE FRED ROUSE CONSTRUCTION COMPANY, TO A HIGH OF $240,102. THE SECOND LOW BID WAS SUBMITTED BY THE CEDAR CREEK LOGGING COMPANY IN THE AMOUNT OF $138,245, WHILE THE THIRD LOW BID WAS IN THE AMOUNT OF $140,830. THE ENGINEER'S ESTIMATE FOR THE COST OF THE PROJECT WAS $223,490 AND IN VIEW OF THE DIFFERENCE BETWEEN THE LOW BID AND THE ENGINEER'S ESTIMATE, THE LOW BIDDER WAS REQUESTED TO CONFIRM HIS BID. IN REPLY, THE LOW BIDDER ADVISED THAT IN COMPUTING HIS BID PRICE FOR ITEM 24 (1), WHICH IS DESCRIBED AS 100,328 CUBIC YARDS OF UNCLASSIFIED EXCAVATION IN THE PLANS, BUT INCREASED TO 116,000 CUBIC YARDS IN THE BID SCHEDULE, HE ESTIMATED THAT SUCH EXCAVATION WOULD RUN 30 PERCENT COMMON AT A COST OF 30 CENTS PER CUBIC YARD, 55 PERCENT MATERIAL REQUIRING RIPPING AT 40 CENTS PER CUBIC YARD, AND 15 PERCENT SOLID ROCK AT 90 CENTS PER CUBIC YARD. HOWEVER, IN ARRIVING AT HIS COMPOSITE BID PRICE ON SUCH ITEM HE ERRONEOUSLY INCLUDED ONLY THE 30,000 YARDS AT 30 CENTS AND THE 55,000 YARDS AT 40 CENTS. THE RESULTING TOTAL OF $31,000 HE DIVIDED BY 100,000 CUBIC YARDS TO ARRIVE AT A UNIT PRICE OF 31 CENTS PER CUBIC YARD WHICH, WHEN APPLIED TO THE FIGURE OF 116,000 CUBIC YARDS SHOWN IN THE BID SCHEDULE, RESULTED IN A COMPOSITE BID PRICE OF $35,960 FOR ITEM 24 (1). THE BIDDER CONTENDS THAT A CORRECT COMPUTATION WOULD HAVE INCLUDED 15,000 CUBIC YARDS OF ROCK AT 90 CENTS PER CUBIC YARD FOR AN INITIAL AMOUNT OF $44,500 WHICH, WHEN DIVIDED BY 100,000 CUBIC YARDS, WOULD HAVE RESULTED IN A UNIT PRICE OF 44.5 CENTS PER CUBIC YARD AND A COMPOSITE BID PRICE OF $51,620 ON ITEM 24 (1), AND HE HAS SUBMITTED HIS ORIGINAL WORKSHEETS, WHICH SUBSTANTIATE THE FIGURES AND PROCEDURES HE HAS OUTLINED, IN SUPPORT OF A REQUEST FOR PERMISSION TO WITHDRAW THE BID.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE IS NO DOUBT THAT A BONA FIDE ERROR WAS MADE IN THE LOW BID AS ALLEGED. ACCORDINGLY, SINCE THE CONTRACTING OFFICER SUSPECTED THAT THE BID WAS ERRONEOUS, AND THE ERROR WAS CONFIRMED AND EXPLAINED PRIOR TO AWARD, THE BID SHOULD BE DISREGARDED IN MAKING THE AWARD.

IN VIEW OF THE SMALL DIFFERENCE BETWEEN THE AMOUNTS OF THE SECOND AND THIRD LOW BIDS, AND THE AMOUNT IN WHICH THE LOW BIDDER ALLEGES HIS BID SHOULD HAVE BEEN SUBMITTED, NO OBJECTION IS PERCEIVED TO AN AWARD TO THE CEDAR CREEK LOGGING COMPANY BASED UPON ITS SECOND LOW BID PRICE OF $138,245, IF SUCH AWARD IS DEEMED TO BE IN THE BEST INTEREST OF THE GOVERNMENT.