B-131261, APR. 2, 1957

B-131261, APR. 2, 1957

TO THE SECRETARY OF THE ARMY:

A LETTER OF MARCH 28, 1957, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTS OUR DECISION AS TO THE ACTION TO BE TAKEN IN MAKING AN AWARD PURSUANT TO INVITATION FOR BIDS NO. AIV-03-006-57-33 FOR IMPROVEMENTS TO EMERGENCY TYPE BARRACKS AT FORT CHAFFEE, ARKANSAS, ISSUED JANUARY 24, 1957.

THE INVITATION PROVIDES:

"IN COMPLIANCE WITH YOUR INVITATION FOR BIDS OF THE ABOVE DATE, THE UNDERSIGNED HEREBY PROPOSES TO FURNISH ALL LABOR, EQUIPMENT, AND MATERIALS AND PERFORM ALL WORK FOR IMPROVEMENTS TO MODIFIED EMERGENCY TYPE BARRACKS AT FORT CHAFFEE, ARKANSAS IN STRICT ACCORDANCE WITH THE SPECIFICATIONS, SCHEDULES, DRAWINGS, AND CONDITIONS FOR THE CONSIDERATION OF THE FOLLOWING AMOUNT/S) * * *.'

BID ITEM 1 REQUIRES THE INSERTION OF A LUMP-SUM FIGURE FOR THE ENTIRE PROJECT FOR THE IMPROVEMENT OF 144 BUILDINGS DIVIDED INTO SIX LOTS. ADDITION THERE IS PROVISION FOR AN ALTERNATE BID FOR EACH SEPARATE LOT PLUS BIDS ON INDIVIDUAL BUILDINGS WITHIN THE LAST TWO LOTS. PARAGRAPH SW- 3 OF PART 1 OF THE STATEMENT OF WORK SPECIFICATIONS PROVIDES "ONLY ONE CONTRACT WILL BE AWARDED ON BASIS OF BIDS SUBMITTED.'

BIDS WERE OPENED AT 2:00 P.M. ON MARCH 6, 1957. THE LOW BID OF $2,657,376 WAS SUBMITTED BY THE C AND B CONTRACTING COMPANY OF HOTSPRINGS, ARKANSAS. ANALYSIS DISCLOSED THAT THE C AND B BID PRICE FOR THE ENTIRE PROJECT WAS MORE THAN THE TOTAL OF THE PRICES FOR LOTS 1 THROUGH 6 IN THE ALTERNATE BID. THE LETTER INDICATES THAT AN AWARD WILL BE MADE UNDER THE INVITATION FOR 143 OF THE BUILDINGS. THE SPECIFIC QUESTION IS WHETHER THE BID OF C AND B CONTRACTING COMPANY MAY BE ACCEPTED AT ITS LUMP-SUM BID PRICE LESS THE PRICE SHOWN FOR THE ONE BUILDING NOT TO BE IMPROVED OR AT THE SUM OF THE PRICES BID FOR THE 143 BUILDINGS UNDER THE ALTERNATE.

IN A LETTER OF MARCH 8, 1957, TO THE CONTRACTING OFFICER, THE LOW BIDDER PROTESTED CONSIDERATION OF THE AWARD AT A PRICE BASED ON THE SUM OF THE PRICES BID UNDER THE ALTERNATE LESS THE BUILDING NOT TO BE IMPROVED FOR THE FOLLOWING REASONS:

"/1) THE INTENDED BREAKDOWN OF THE UNITS ON THE BID FORM WAS TO ENABLE AWARD OF THE CONTRACT TO BE MADE IF THE LOW BID WAS OVER THE AMOUNT SET UP FOR THE PROJECT. WE DEFINITELY INTENDED TO BID THE ALTERNATE BIDS AT A DIFFERENT PRICE. IT IS UNDERSTOOD, AND I AM SURE, AGREED, THAT TO ADD THE IMPROVEMENTS TO 144 UNITS WOULD COST LESS PER UNIT THAN TO ADD THE IMPROVEMENT TO ONLY 100 UNITS; THEREFORE, IT WAS NECESSARY TO PROTECT OURSELVES IN BIDDING. IT WAS VERY POSSIBLE THAT LESS THAN 144 UNITS WOULD BE AWARDED.

"/2) PRIOR TO THE DATE OF BID LETTING, WE MADE A SPECIAL TRIP TO THE PURCHASING AND CONTRACTING OFFICE FOR THE PURPOSE OF GETTING AN INTERPRETATION OF THE BID FORM. AT THAT TIME WE WERE CONCERNED OVER THE FACT THAT THERE WAS A POSSIBILITY THAT THE GOVERNMENT MIGHT NOT HAVE SUFFICIENT FUNDS TO REHABILITATE ALL 144 UNITS. WE WERE TOLD THAT THE SUM OF THE ALTERNATE BIDS DID NOT HAVE TO ADD UP TO THE BASE PRICE COVERING ALL 144 UNITS. ALSO THE MATTER WAS DISCUSSED CONCERNING THE FACT THAT IT WOULD COST THE GOVERNMENT MORE FOR EACH UNIT IF DECISION SHOULD BE MADE TO AWARD LESS THAN THE FULL 144 UNITS.

"IN VIEW OF THE FACT THAT THE ABOVE INFORMATION WAS GIVEN TO US AND WE HAVE BASED OUR BID ON THIS INFORMATION, WE FEEL THAT EVERY CONSIDERATION SHOULD BE MADE TO AWARD THE CONTRACT ON THE BASIS OF THE BASE BID, ITEM 1, COVERING ALL 144 UNITS.

"IT WAS DEFINITELY OUR UNDERSTANDING THAT THE BREAKDOWN OF THE INDIVIDUAL BUILDINGS WAS TO BE USED ONLY AS A DEDUCTIVE ITEM IN THE EVENT AWARD WAS MADE FOR LESS THAN 144 UNITS.

"WE HAVE INCLUDED IN BID ITEM ONE THE SUPERVISION, TAXES, OVERHEAD, ETC. FOR THE ENTIRE PROJECT AND IF THE GOVERNMENT CHOOSES TO DEDUCT SEVERAL OF THE BUILDINGS LISTED IN BLOCKS 5 AND 6, THEN THAT AMOUNT SHOULD BE DEDUCTED FROM THE BASE BID, ITEM (1) COVERING ALL 144 UNITS.'

THE ALLEGATIONS MADE BY THE LOW BIDDER APPEAR TO BE BORNE OUT BY THE ORIGINAL WORKSHEETS SUBMITTED WITH HIS LETTER.

THE TERMS OF THE INVITATION QUOTED ABOVE CLEARLY REQUIRE THAT THE AMOUNTS INSERTED OPPOSITE EACH OF THE UNITS UNDER THE ALTERNATE BID SHOULD REPRESENT THE PRICE FOR THE IMPROVEMENT OF THE PARTICULAR ITEM. NOTHING IN THE INVITATION WOULD APPEAR TO JUSTIFY THE CONCLUSION THAT THE ALTERNATE WAS INCLUDED IN THE INVITATION MERELY TO PROVIDE AMOUNTS TO BE DEDUCTED FROM THE BASIC BID IN THE EVENT THAT AWARD WAS MADE FOR LESS THAN THE TOTAL AMOUNT OF WORK INDICATED IN THE INVITATION. TO PROVIDE WHAT THE LOW BIDDER INTENDED, A STATEMENT SHOULD HAVE BEEN SUBMITTED WITH HIS BID TO INDICATE THAT THE PRICES LISTED FOR THE ALTERNATE ITEMS WERE INTENDED TO BE DEDUCTED FROM THE BASIC BID FOR THOSE BUILDINGS OR LOTS FOR WHICH AWARD WOULD NOT BE MADE. SINCE THE BIDDER FAILED TO DO SO BUT INTENDED THAT HIS BID BE CONSTRUED IN THAT MANNER, IT APPEARS THAT AN ERROR WAS MADE IN THE BID.

IT IS CONTRARY TO COMMON PRACTICE FOR A BIDDER TO QUOTE A LUMP-SUM PRICE FOR AN ENTIRE JOB THAT IS HIGHER THAN THE SUM TOTAL OF ITS BIDS FOR SUBITEMS COVERING THE SAME COMPLETE JOB. UNDER THE CIRCUMSTANCES THE CONTRACTING OFFICER WAS PUT ON NOTICE OF PROBABILITY OF ERROR IN THE BID. B-122836, FEBRUARY 24, 1955. THE EXPLANATION OF THE ERROR SUPPORTED BY CLEAR AND CONVINCING EVIDENCE WAS MADE PRIOR TO AWARD OF THE CONTRACT AND THE C AND B BID IS LOW UNDER EITHER INTERPRETATION. THEREFORE, THE LOW BID MAY BE INTERPRETED IN ACCORDANCE WITH THE INTENT EXPRESSED BY THE LOW BIDDER IN THE LETTER OF MARCH 8, 1957, AND THE AWARD OF A CONTRACT FOR IMPROVEMENT OF THE 143 BUILDINGS MADE ON THE BASIS OF THE LUMP-SUM BID LESS THE AMOUNT INDICATED IN THE ALTERNATE AS THE PRICE FOR IMPROVEMENT OF THE BUILDING NOT TO BE INCLUDED IN THE AWARD. B-128828, AUGUST 10, 1956; B-128911, AUGUST 17, 1956; AND B-129052, AUGUST 30, 1956.