B-129765, NOVEMBER 26, 1956, 36 COMP. GEN. 429

B-129765: Nov 26, 1956

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ALTHOUGH THE TOTAL PRICE WAS BASED ON THE INTENDED UNIT PRICE. 1956: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 10. THE BID OF DAVIS AND BUTLER CONSTRUCTION COMPANY WAS CONDITIONED UPON AN AWARD ON BOTH SCHEDULES. THE ABSTRACT OF BIDS SHOWS THAT THE BID OF THE DAVIS AND BUTLER COMPANY WAS CONSIDERED AS AMOUNTING TO $445. WHILE THAT OF THE JOHNSON CONSTRUCTION COMPANY WAS CONSIDERED AS AMOUNTING TO $450. THE STATED UNIT PRICE WAS $8.74 AND THE EXTENDED AMOUNT WAS $1. IT IS STATED IN YOUR LETTER THAT THE SPECIFICATIONS ISSUED TO INTERESTED BIDDERS WERE ACCOMPANIED BY STANDARD FORM NO. 22. THE UNIT PRICE WILL GOVERN.'. IT IS REPORTED THAT THE ENGINEER'S ESTIMATE FOR THAT UNIT PRICE WAS $0.50.

B-129765, NOVEMBER 26, 1956, 36 COMP. GEN. 429

BIDS - MISTAKES - UNIT PRICE ERRORS A BID WHICH CONTAINED AN APPARENT ERROR IN THE UNIT PRICE, ALTHOUGH THE TOTAL PRICE WAS BASED ON THE INTENDED UNIT PRICE, MAY BE CONSIDERED FOR AWARD ON THE BASIS OF THE TOTAL PRICE, EVEN THOUGH THE INVITATION PROVIDED THAT, IN THE CASE OF A DISCREPANCY BETWEEN THE UNIT AND TOTAL PRICE, THE UNIT PRICE WOULD PREVAIL.

TO L. N. MCCLELLAN, BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, NOVEMBER 26, 1956:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 10, 1956, YOUR FILE NO. 150, REQUESTING A DECISION AS TO WHETHER OR NOT WE WOULD BE REQUIRED TO OBJECT TO AN AWARD BY YOU AS CONTRACTING OFFICER OF A CONTRACT TO THE DAVIS AND BUTLER CONSTRUCTION COMPANY OF SALT LAKE CITY, UTAH, PURSUANT TO BUREAU OF RECLAMATION'S BID SCHEDULES NOS. 1 AND 2 UNDER SPECIFICATIONS NO. DC-4768 FOR THE CONSTRUCTION OF WANSHIP AND GATEWAY POWER PLANTS AND SWITCHYARDS, WEBER BASIN PROJECT, UTAH.

THE JOHNSON CONSTRUCTION COMPANY OF SALT LAKE CITY, UTAH, AND THE DAVIS AND BUTLER CONSTRUCTION COMPANY SUBMITTED THE LOWEST BIDS FOR THE TWO SCHEDULES OF WORK. THE BID OF DAVIS AND BUTLER CONSTRUCTION COMPANY WAS CONDITIONED UPON AN AWARD ON BOTH SCHEDULES, THUS REQUIRING A COMPARISON OF ITS TOTAL BID PRICE WITH THE TOTAL PRICE OF THE JOHNSON CONSTRUCTION COMPANY. THE ABSTRACT OF BIDS SHOWS THAT THE BID OF THE DAVIS AND BUTLER COMPANY WAS CONSIDERED AS AMOUNTING TO $445,093.11, WHILE THAT OF THE JOHNSON CONSTRUCTION COMPANY WAS CONSIDERED AS AMOUNTING TO $450,089.44. THE DAVIS AND BUTLER CONSTRUCTION COMPANY'S BID CONTAINED A DISCREPANCY BETWEEN THE UNIT PRICE AND THE TOTAL EXTENDED AMOUNT FOR FURNISHING AND APPLYING AN ESTIMATED QUANTITY OF 1,200 SQUARE FEET OF WATERPROOFING COMPOUND UNDER ITEM 24 OF SCHEDULE NO. 1. THE STATED UNIT PRICE WAS $8.74 AND THE EXTENDED AMOUNT WAS $1,048.80, WHEREAS $8.74 MULTIPLIED BY 1,200 EQUALS $10,488, A DIFFERENCE OF $9,439.20, WHICH, IF ADDED TO THE AMOUNT OF $445,093.11, WOULD RESULT IN MAKING THE TOTAL BID PRICE OF THE DAVIS AND BUTLER CONSTRUCTION COMPANY GREATER THAN THE TOTAL BID PRICE OF THE JOHNSON CONSTRUCTION COMPANY.

IT IS STATED IN YOUR LETTER THAT THE SPECIFICATIONS ISSUED TO INTERESTED BIDDERS WERE ACCOMPANIED BY STANDARD FORM NO. 22, INSTRUCTIONS TO BIDDERS, WHICH PROVIDED IN SUBPARAGRAPH 11 (B) THAT " IN CASE OF ERROR IN THE EXTENSION OF PRICES, THE UNIT PRICE WILL GOVERN.' WITH RESPECT TO THE ERROR HERE INVOLVED, IT IS REPORTED THAT THE ENGINEER'S ESTIMATE FOR THAT UNIT PRICE WAS $0.50; AND THE UNIT PRICES OF THE OTHER BIDS RANGED FROM $0.12 TO $0.45; AND THAT, FOR SIMILAR WORK ON ITEM 133 OF SCHEDULE NO. 2, WHICH INVOLVED ONLY AN ESTIMATED QUANTITY OF 100 SQUARE FEET, DAVIS AND BUTLER CONSTRUCTION COMPANY QUOTED A UNIT PRICE OF $1.17, AS COMPARED WITH THE ENGINEER'S ESTIMATE OF $0.50 AND THE UNIT PRICES OF THE OTHER BIDS RANGING BETWEEN $0.22 AND $0.80.

THE DAVIS AND BUTLER CONSTRUCTION COMPANY SUBMITTED WORKSHEETS INDICATING THAT, FOR ITEM 24 OF SCHEDULE NO. 1, ITS ESTIMATED MATERIAL COST WAS $0.75 PER UNIT AND THAT, IN COMPUTING ITS BID PRICES, IT HAD FOLLOWED THE PRACTICE GENERALLY OF ADDING 16.5 PERCENT TO THE ESTIMATED BASE COST. APPLYING THIS FORMULA TO ITEM 24, THE CORRECT UNIT PRICE WOULD BE APPROXIMATELY $0.874 INSTEAD OF $8.74.

FROM THE FOREGOING FACTS AND YOUR GENERAL FAMILIARITY WITH PREVAILING MARKET PRICES, YOU EXPRESS THE OPINION THAT THE COMPANY MADE A DECIMAL POINT ERROR IN ITS UNIT PRICE FOR ITEM 24 OF SCHEDULE NO. 1, AND THAT IT INTENDED TO INSERT THE FIGURE ?874, WHICH WOULD BE CONSISTENT WITH ITS EXTENDED AMOUNT OF $1,048.80 AND ITS TOTAL OF $120,237.29 FOR SCHEDULE NO. 1.

IN ITS LETTER OF PROTEST, THE JOHNSON CONSTRUCTION COMPANY EMPHASIZES THE STATEMENT IN STANDARD FORM NO. 22 THAT " IN CASE OF ERROR IN THE EXTENSION OF PRICES, THE UNIT PRICE WILL GOVERN," AND CONTENDS THAT " A PERSON'S RIGHT TO UNBALANCE AND GIVE AN EXTREMELY HIGH BID ON ANY PARTICULAR ITEM IS UNQUESTIONED.' IN THIS CONNECTION, IT IS ARGUED THAT " ALL CASES OF UNBALANCING ITEM BIDS ARE CASES WHERE THE AMOUNTS ARE "OBVIOUSLY" HIGH; " AND " WHETHER THEY ARE SO BECAUSE OF ERROR OR BY INTENTION, IS SOMETHING WHICH THE GOVERNMENT CANNOT KNOW AND SHOULD NOT BE MADE TO INQUIRE INTO.'

WHAT THE JOHNSON CONSTRUCTION COMPANY IS CONTENDING FOR WOULD HAVE THE EFFECT OF RELIEVING A GOVERNMENT CONTRACTING OFFICER FROM ANY SUBSTANTIAL ERROR DETECTION RESPONSIBILITY IN CONSIDERING AND EVALUATING BIDS. WE DO NOT AGREE WITH ANY SUCH CONTENTION, NOR DO WE BELIEVE THE SUBMISSION OF UNBALANCED BIDS TO BE A SOUND PRACTICE, SINCE IT IS WELL ESTABLISHED THAT A BID CANNOT BE CONSIDERED AS HAVING BEEN ACCEPTED IN GOOD FAITH IF AN ERROR IN THE BID IS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE OF IT. THAT PRINCIPLE WOULD BE FOR APPLICATION REGARDLESS OF ANY STATEMENT MADE IN THE GOVERNMENT'S INVITATION FOR BIDS OR IN ITS ACCOMPANYING DOCUMENTS CONCERNING POSSIBLE ERRORS SUCH AS DISCREPANCIES BETWEEN UNIT PRICES AND EXTENDED TOTAL AMOUNTS. SEE 17 COMP. GEN. 339.

AS A GENERAL RULE, BIDDERS ON PROPOSED GOVERNMENT CONTRACTS ARE NOT PERMITTED TO CHANGE THEIR BIDS AFTER OPENING. HOWEVER, THIS DOES NOT MEAN THAT A BIDDER SHOULD NOT BE AFFORDED AN OPPORTUNITY TO CLARIFY ANY APPARENT MISTAKE IN BID OR THAT IT IS UNFAIR TO THE OTHER BIDDERS TO PERMIT ANY SUCH ERROR TO BE CORRECTED UPON INDISPUTABLE PROOF OF WHAT WAS ACTUALLY INTENDED BY THE BIDDER. IN THE PRESENT CASE, THERE APPEARS NO ROOM FOR DOUBT THAT THE INTENDED UNIT PRICE OF THE DAVIS AND BUTLER CONSTRUCTION COMPANY FOR ITEM 24 OF SCHEDULE NO. 1 WAS $0.874, AS REFLECTED IN THE EXTENDED AMOUNT STATED FOR SUCH ITEM, INSTEAD OF THE AMOUNT OF $8.74 WHICH WAS INSERTED IN THE UNIT PRICE COLUMN OF THE BID.

ACCORDINGLY, YOU ARE ADVISED THAT WE WOULD NOT BE REQUIRED TO OBJECT TO THE MAKING OF THE AWARD TO THE DAVIS AND BUTLER CONSTRUCTION COMPANY ON THE BASIS OF WHAT HAS BEEN DETERMINED TO BE ITS INTENDED TOTAL BID PRICE FOR SCHEDULES NOS. 1 AND 2 OF THE INVITATION. IN ACCORDANCE WITH YOUR REQUEST, THE DOCUMENTS AND CORRESPONDENCE SUBMITTED WITH YOUR LETTER ARE RETURNED HEREWITH.