B-133635, SEP. 23, 1957

B-133635, SEP. 23, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 29, 1957, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH MR. CECIL MCGUIRE, D/B/A C. MCGUIRE CONSTRUCTION, HOPE, INDIANA, ALLEGES WAS MADE IN HIS BID ON WHICH CONTRACT NO. DA 12-066 AV-1092 WAS AWARDED.

THE CENTRAL PROCUREMENT OFFICE, FORT BENJAMIN HARRISON, INDIANAPOLIS, INDIANA, BY INVITATION NO. AV-12-066-57-39, REQUESTED BIDS--- TO BE OPENED JUNE 10, 1957--- FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK NECESSARY FOR THE INSTALLATION OF POST GAS DISTRIBUTION MAINS AT THE FORT. IN RESPONSE MR. CECEIL MCGUIRE, D/B/A C. MCGUIRE CONSTRUCTION, SUBMITTED A BID DATED JUNE 3, 1957, OFFERING TO PERFORM THE WORK FOR THE LUMP SUM OF $29,199.49. THE ABSTRACT OF BIDS SHOWS THAT THE ONLY OTHER BIDDER ON THE PROJECT QUOTED A PRICE OF $84,455 AND THAT THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS $61,625.

THE RECORD INDICATES THAT SINCE THE BID OF MR. MCGUIRE WAS OUT OF LINE WITH THE ONLY OTHER BID RECEIVED AND THE GOVERNMENT'S ESTIMATE, HE WAS REQUESTED TO VERIFY HIS BID BY LETTER DATED JUNE 12, 1957, READING IN PART AS FOLLOWS: "WE REQUEST VERIFICATION IN WRITING OF YOUR BID ON INVITATION FOR BIDS AV-12-066-57-39, OPENED 10 JUNE 1957.' BY LETTER DATED JUNE 17, 1957, MR. MCGUIRE ADVISED AS FOLLOWS: "THIS IS VERIFICATION OF BID ON INVITATION FOR BIDS AV 12-066-57-39, OPENED 10 JUNE 1957, IN THE AMOUNT OF $29,199.49.' THE BID OF MR. MCGUIRE WAS ACCEPTED ON JUNE 22, 1957.

IT IS REPORTED THAT MR. MCGUIRE, UPON EXAMINING THE ABSTRACT OF BIDS IN THE CENTRAL PROCUREMENT OFFICE ON JUNE 28, 1957, SUSPECTED THAT HE HAD MADE AN ERROR IN HIS BID, AND THAT ON JULY 1, 1957, MR. MCGUIRE ADVISED BY TELEPHONE THAT HE HAD MADE AN ERROR IN HIS BID ON THE PROJECT.

IN A CONFIRMING LETTER DATED JULY 1, 1957, MR. MCGUIRE STATED THAT ON SATURDAY, JUNE 1, 1957, AT 3:00 P.M., HE RECEIVED BY MAIL A SET OF THE PLANS AND SPECIFICATIONS FOR THE PROJECT; THAT SINCE THE READING ON STANDARD FORM 20-INVITATION FOR BIDS (CONSTRUCTION CONTRACT) STATED THAT BIDS WOULD BE OPENED ON JUNE 3, 1957, AT 1:00 P.M. C.S.T., HE IMMEDIATELY CONTACTED THE ENGINEER WHO USUALLY PREPARES HIS JOB ESTIMATE SHEETS AND REQUESTED THAT HE ESTIMATE THE MATERIALS AND LABOR AND MISCELLANEOUS EXPENSE ON THIS JOB; THAT AT 6:30 P.M. ON THE SAME DAY, HE MR. MCGUIRE, ARRIVED AT FORT BENJAMIN HARRISON TO INSPECT THE SITE OF THE JOB AND THAT DURING THE COURSE OF HIS INSPECTION, HE NOTED A LARGE AMOUNT OF CEMENT AND COMPLICATED AREAS, WHICH, HE STATED, WOULD REQUIRE THE USE OF EXTRA LABOR IN LAYING THE GAS MAINS; AND THAT SHORTLY THEREAFTER HE TELEPHONED HIS ENGINEER AND TOLD HIM THAT HE SHOULD ESTIMATE THE COST OF THE JOB IN THE USUAL MANNER AND THAT WHEN HE HAD FINISHED, HE SHOULD TOTAL THE FOOTAGE TO BE WORKED ON THE JOB AND THEN MULTIPLY SUCH AMOUNT BY $1.50 (PER FOOT) TO ARRIVE AT THE COST OF THE EXTRA LABOR INCIDENT TO THE CEMENT AND COMPLICATED AREAS IN WHICH THE GAS MAINS WERE TO BE LAID. MR. MCGUIRE ALSO STATED THAT HIS ENGINEER PREPARED A SEPARATE WORKSHEET FOR THE EXTRA WORK IN THE COMPLICATED AREAS AND THAT HE OBTAINED ALL OF THE ENGINEER'S WORKSHEETS ON SUNDAY MORNING, JUNE 2, 1957; THAT SOMEHOW, BEFORE HIS BOOKKEEPER RECEIVED THE ENGINEER'S WORKSHEETS TO TOTAL AND RECHECK, THE ONE SHEET ON WHICH THE TOTAL FOOTAGEOF 13,458 FEET HAD BEEN MULTIPLIED BY $1.50, GIVING THE TOTAL AMOUNT OF $20,202, WAS LOST; THAT AT THE TIME HE FILLED OUT THE BID FORM HE WAS UNAWARE THAT THE FIGURES GIVEN TO HIM BY HIS BOOKKEEPER DID NOT INCLUDE THE AMOUNT OF $20,202, WHICH AMOUNT WAS TO COVER THE COST OF THE LABOR INCIDENT TO THE COMPLICATED AREAS; AND THAT WHEN HE RECEIVED A LETTER FROM THE CONTRACTING OFFICER REQUESTING VERIFICATION OF HIS BID, HE BELIEVED THAT SUCH LETTER WAS JUST A REQUEST FOR A CONFIRMATION AND NOT A VERIFICATION OF HIS BID. MR. MCGUIRE REQUESTED THAT THE CONTRACT PRICE OF THE PROJECT BE INCREASED BY $20,202 TO COVER THE COST OF THE OMITTED WORK AND IN SUPPORT OF THE ALLEGATION OF ERROR, HE SUBMITTED THE WORKSHEETS ON WHICH HIS ORIGINAL BID PRICE OF $29,199.49 WAS BASED AND A DUPLICATE COPY OF THE ESTIMATE SHEET COVERING THE LABOR INCIDENT TO THE COMPLICATED AREAS. ON THE ESTIMATE SHEET COVERING THE OMITTED WORK APPEARS A SIGNED STATEMENT BY MR. MCGUIRE'S ENGINEER TO THE EFFECT THAT THE FIGURES APPEARING ON SUCH SHEET WERE PREPARED BY HIM FROM AN ESTIMATE TELEPHONED TO HIM BY MR. MCGUIRE FOR BIDDING PURPOSES AND THAT THESE FIGURES WERE TO BE ADDED BY MR. MCGUIRE TO HIS PRELIMINARY FIGURES TO ARRIVE AT TOTAL CONSTRUCTION COSTS. BY LETTER DATED JULY 8, 1957, MR. MCGUIRE ADVISED THE CONTRACTING OFFICER THAT THE SURETY COMPANY HAD INFORMED HIM THAT IT WOULD NOT REWRITE THE PERFORMANCE AND PAYMENT BONDS UNLESS THE CONTRACT PRICE OF THE PROJECT WAS INCREASED BY THE SUM OF $20,202, THE AMOUNT OF ITS ERROR.

ON THE RECORD, THERE APPEARS NO ROOM FOR DOUBT THAT MR. MCGUIRE MADE AN ERROR IN HIS BID, AS ALLEGED. GENERALLY WHEN A BIDDER IS REQUESTED TO, AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942, 947; AND 27 ID. 17. HOWEVER, IN HER REPORT OF JULY 23, 1957, THE CONTRACTING OFFICER STATES THAT, IN REQUESTING VERIFICATION OF THE BID, SHE DID NOT PLACE MR. MCGUIRE ON NOTICE OF A SUSPECTED ERROR AND THAT IT WAS HER OPINION THAT THE REQUEST FOR VERIFICATION WAS MISCONSTRUED AS CONSTITUTING MERELY A REQUEST FOR RESTATING THE AMOUNT ORIGINALLY BID RATHER THAN A REQUEST FOR RECHECKING THE DETAILS OF THE BID.

UNDER THE CIRCUMSTANCES, PARTICULARLY IN VIEW OF THE GREAT DIFFERENCE BETWEEN THE CONTRACTOR'S BID AND THE ONLY OTHER BID RECEIVED AND THE GOVERNMENT'S ESTIMATE, THERE IS SOME BASIS FOR THE VIEW THAT, NOTWITHSTANDING THE BID CONFIRMATION, THE CONTRACTING OFFICER AT THE TIME OF AWARD WAS ON AT LEAST CONSTRUCTIVE NOTICE OF ERROR IN THE BID AND THAT A BINDING CONTRACT DID NOT RESULT FROM THE AWARD. COMPARE UNITED STATES V. METRO NOVELTY MANUFACTURING CO., INC., 125 F.SUPP. 713.

IT IS REPORTED THAT NOTICE TO PROCEED HAS NOT BEEN GIVEN THE CONTRACTOR INASMUCH AS ACCEPTABLE PAYMENT AND PERFORMANCE BONDS HAVE NOT BEEN FURNISHED. ACCORDINGLY, CONTRACT NO. DA 12-066 AV-1092 MAY BE CANCELLED WITHOUT OBLIGATION TO MR. MCGUIRE.

THE CONTRACTING OFFICER'S STATEMENT A COPY OF MR. MCGUIRE'S LETTER OF JULY 1, 1957, AND COPIES OF MR. MCGUIRE'S WORKSHEETS ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.