B-136217, MAY 28, 1958, 37 COMP. GEN. 801

B-136217: May 28, 1958

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ALLEGED THAT A TELEGRAM OFFERING A REDUCTION IN THE BID PRICE FOR ONE EXCAVATION PROJECT INADVERTENTLY REFERRED TO ANOTHER PROJECT ON WHICH BIDS WERE OPENED THE SAME DAY MAY HAVE THE MODIFYING TELEGRAM DISREGARDED AND THE BID AS ORIGINALLY SUBMITTED CONSIDERED FOR AWARD IN VIEW OF EVIDENCE WHICH INDICATES THAT THE PRICE DISPARITY BETWEEN THE AMENDED LOW BID AND THE OTHER BIDS RECEIVED WAS SUBSTANTIAL AND 55 PERCENT BELOW THE GOVERNMENT'S ESTIMATE SO THAT THE AMENDED BID COULD NOT HAVE BEEN ACCEPTED IN GOOD FAITH. 1958: REFERENCE IS MADE TO YOUR LETTER OF MAY 19. PROSPECTIVE BIDDERS WERE ADVISED THAT BIDS WOULD BE OPENED AT THE MADRAS AIRPORT. ALTERNATE BIDS WERE REQUESTED UNDER SCHEDULE NO. 2.

B-136217, MAY 28, 1958, 37 COMP. GEN. 801

BIDS - MISTAKES - CORRECTION - EVIDENCE OF ERROR A LOW BIDDER WHO, PRIOR TO AWARD, ALLEGED THAT A TELEGRAM OFFERING A REDUCTION IN THE BID PRICE FOR ONE EXCAVATION PROJECT INADVERTENTLY REFERRED TO ANOTHER PROJECT ON WHICH BIDS WERE OPENED THE SAME DAY MAY HAVE THE MODIFYING TELEGRAM DISREGARDED AND THE BID AS ORIGINALLY SUBMITTED CONSIDERED FOR AWARD IN VIEW OF EVIDENCE WHICH INDICATES THAT THE PRICE DISPARITY BETWEEN THE AMENDED LOW BID AND THE OTHER BIDS RECEIVED WAS SUBSTANTIAL AND 55 PERCENT BELOW THE GOVERNMENT'S ESTIMATE SO THAT THE AMENDED BID COULD NOT HAVE BEEN ACCEPTED IN GOOD FAITH.

TO WM. H. TULLER, BUREAU OF RECLAMATION, MAY 28, 1958:

REFERENCE IS MADE TO YOUR LETTER OF MAY 19, 1958, FILE 220, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE C AND S CONSTRUCTION COMPANY, MOUNT VERNON, WASHINGTON, ALLEGES IT MADE IN AMENDING ITS BID DATED MAY 6, 1958.

BY SPECIFICATIONS NO. 100C-330, AS AMENDED, THE BUREAU OF RECLAMATION, BOISE, IDAHO, REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS AND PERFORMING THE WORK REQUIRED FOR THE CLEARING OF 298 ACRES OF GROUND AT THE WASCO RESERVOIR SITE, JUNIPER DIVISION, WAPINITIA PROJECT, OREGON, SCHEDULE NO. 1. PROSPECTIVE BIDDERS WERE ADVISED THAT BIDS WOULD BE OPENED AT THE MADRAS AIRPORT, MADRAS, OREGON, AT 2 P.M., PACIFIC STANDARD TIME, MAY 8, 1958. ALTERNATE BIDS WERE REQUESTED UNDER SCHEDULE NO. 2. YOU STATE THAT DUE TO THE SLIGHT DIFFERENCE IN BID PRICES IN ALL BIDS FOR SCHEDULE NO. 1 AND ALTERNATIVE SCHEDULE NO. 2, NO CONSIDERATION IS BEING GIVEN TO AWARD OF CONTRACT UNDER SCHEDULE NO. 2.

IN RESPONSE TO THE INVITATION, THE C AND S CONSTRUCTION COMPANY SUBMITTED A BID DATED MAY 6, 1958, OFFERING TO CLEAR 298 ACRES OF GROUND UNDER SCHEDULE NO. 1 AT A PRICE OF $200 PER ACRE OR FOR A TOTAL PRICE OF $59,600. BY TELEGRAM OF MAY 8, 1958, WHICH IT IS REPORTED WAS RECEIVED ONE-HALF HOUR BEFORE THE BID OPENING TIME, THE COMPANY REDUCED ITS UNIT PRICE FOR SCHEDULE NO. 1 FROM $200 TO $160 PER ACRE AND ITS TOTAL PRICE FOR SUCH SCHEDULE FROM $59,600 TO $47,680. THE 14 OTHER BIDDERS ON SCHEDULE NO. 1 QUOTED TOTAL PRICES RANGING FROM $72,116 TO $137,080 AND THE GOVERNMENT'S ESTIMATE FOR THE WORK COVERED BY THAT SCHEDULE WAS $99,830.

YOU STATE THAT SHORTLY AFTER THE READING OF BIDS, MR. JOHN SEMPLE, THE ACCOUNTANT FOR THE C AND S CONSTRUCTION COMPANY, CALLED THE PROJECT CONSTRUCTION ENGINEER TO OBTAIN THE RESULTS OF THE BIDDING AND THAT AT THAT TIME NO HINT OR MENTION OF ERROR AROSE; THAT ABOUT 4:45 P.M. OF THE SAME DAY, MR. SEMPLE AGAIN CALLED THE PROJECT CONSTRUCTION ENGINEER AND ALLEGED THAT AN ERROR HAD BEEN MADE IN THE COMPANY'S BID IN THAT THE TELEGRAPHIC MODIFICATION REDUCING ITS BID PRICES, THROUGH A MISUNDERSTANDING WITH HIS EMPLOYER, J. C. CHRISTOFFERSON, HAD BEEN APPLIED TO THE WRONG BID. IN AN AFFIDAVIT DATED MAY 14, 1958, WHICH WAS EXECUTED BY MR. SEMPLE, THE ACCOUNTANT, AND MR. CHRISTOFFERSON, A PARTNER OF THE FIRM, IT WAS STATED AS FOLLOWS:

THAT THE C AND S CONSTRUCTION COMPANY HAD ENTERED BIDS ON THE CLEARING OF TWO RESERVOIR SITES, BOTH OF WHICH SETS OF BIDS WERE TO BE OPENED ON MAY 8, 1958. THE TWO BIDS IN QUESTION WERE FOR THE BUREAU OF RECLAMATION, U.S. DEPARTMENT OF INTERIOR, ON THE CLEARING OF THE WASCO RESERVOIR SITE UNDER SPECIFICATIONS NO. 100C-330, AND THE CLEARING OF THE RESERVOIR SITE OF THE HOWARD PRAIRIE RESERVOIR UNDER SPECIFICATIONS NO. 100C-328.

THE AFFIANT CHRISTOFFERSON, WAS IN OLYMPIA, WASHINGTON, ON THE 8TH DAY OF MAY, 1958, AND CONTACTED THE AFFIANT SEMPLE BY TELEPHONE AT 8:00 A.M. OF THAT DAY, AND AUTHORIZED HIM TO SEND A TELEGRAM REDUCING ONE OF THE BIDS BY 20 PERCENT.

AFFIANT CHRISTOFFERSON, HAD REFERRED TO THE "LOWER JOB" THINKING OF THE WORK IN TERMS OF THE GEOGRAPHICAL LOCATION, WHEREAS THE AFFIANT SEMPLE, UNDERSTOOD IT TO MEAN THE LOWER JOB FROM THE STANDPOINT OF THE AMOUNT OF THE BID. THROUGH THIS MISUNDERSTANDING, AFFIANT SEMPLE SENT A TELEGRAM REDUCING THE BID BY 20 PERCENT ON THE CLEARING OF THE WASCO RESERVOIR SITE, AND LATER IN TALKING WITH AFFIANT CHRISTOFFERSON DURING THE AFTERNOON OF MAY 8, 1958, WHEN HE WAS ADVISING MR. CHRISTOFFERSON OF THE RESULT OF THE TWO BIDS, HE LEARNED THAT THE BID WHICH AFFIANT CHRISTOFFERSON INTENDED TO HAVE REDUCED WAS THAT ON THE CLEARING OF THE HOWARD PRAIRIE RESERVOIR SITE RATHER THAN THE WASCO RESERVOIR SITE.

THE AFFIANT CHRISTOFFERSON HAD NO INTENTION OF REDUCING THE AMOUNT OF THE BID ON THE WASCO RESERVOIR SITE WHICH HE FELT WAS AS LOW AS IT COULD BE AS SUBMITTED, BUT IN REAPPRAISING THE HOWARD PRAIRIE RESERVOIR JOB, HE HAD FELT THAT THEIR COMPANY'S BID WAS TOO HIGH AND IF HE WAS TO HAVE ANY CHANGE OF GETTING THE JOB IT WOULD HAVE TO BE REDUCED. IF C AND S CONSTRUCTION CO., WERE TO PERFORM AT THE REDUCED BID, IT WOULD BE IMPOSSIBLE FOR THEM TO DO SO WITHOUT CONSIDERABLE LOSS TO THE COMPANY.

C AND S CONSTRUCTION CO., UPON THESE FACTS ASKS FOR RELIEF FROM THE SITUATION CAUSED THROUGH THIS ERROR, AND REQUESTS THAT THE BUREAU OF RECLAMATION CONSIDER ITS ORIGINAL BID ON THE CLEARING OF THE WASCO RESERVOIR SITE, SPECIFICATIONS NO. 100C-330, IN THE FOLLOWING AMOUNTS: SCHEDULE NO. 1, $59,600.00; SCHEDULE NO. 2, $59,060.00. AFFIANT CHRISTOFFERSON FURTHER CONFIRMS SUCH ORIGINAL BIDS FOR THE C AND S CONSTRUCTION CO.

YOU STATE THAT AS TO THE MATTER OF GEOGRAPHY REFERRED TO IN THE AFFIDAVIT, THE LOCATION ( CAMP WHITE, OREGON) OF THE 10 A.M. BID OPENING UNDER SPECIFICATIONS NO. 100C-328 IS APPROXIMATELY 185 MILES AIRLINE DISTANCE SOUTHWEST OF THE LOCATION ( MADRAS, OREGON) OF THE 2 P.M. BID OPENING UNDER SPECIFICATIONS NO. 100C-330; AND THAT BOTH SPECIFICATIONS NOS. 100C-328 AND 100C-330 INVOLVE RESERVOIR CLEARING, AND WERE OPENED AT DIFFERENT HOURS ON MAY 8, 1958.

THE ABSTRACT OF BIDS SUBMITTED IN RESPONSE TO SPECIFICATIONS NO. 100C-330 --- THE INVITATION IN QUESTION--- SHOWS THAT THE 14 OTHER BIDDERS ON SCHEDULE NO. 1 QUOTED UNIT PRICES RANGING FROM $242 PER ACRE TO $460 PER ACRE AND THAT THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $335 PER ACRE. THUS, THE AMENDED BID OF THE C AND S CONSTRUCTION COMPANY $160 PER ACRE FOR SCHEDULE NO. 1 IS SUBSTANTIALLY BELOW THE OTHER BIDS THEREON AND APPROXIMATELY 55 PERCENT OF THE GOVERNMENT'S ESTIMATE. IN REGARD TO THE GOVERNMENT'S ESTIMATE, YOU STATE THAT IT WAS BASED ON KNOWN COSTS FOR PRIOR SIMILAR CLEARING IN THE GENERAL AREA, AND, WHILE IT MAY NOT HAVE PROPERLY REFLECTED THE CURRENT DEPRESSION OF LOGGING ACTIVITY IN THE PACIFIC NORTHWEST AND THE PRESENT INTENSE INTEREST IN CLEARING WORK, IT IS CONSIDERED TO BE A SOUND ESTIMATE OF THE REASONABLE VALUE OF THE WORK UNDER NORMAL CONDITIONS WITH REASONABLE ALLOWANCES FOR PROFIT AND CONTINGENCIES.

IN VIEW OF THE DISPARITY BETWEEN THE LOW AMENDED BID AND THE OTHER BIDS RECEIVED AND THE GOVERNMENT'S ESTIMATE AND SINCE THE C AND S CONSTRUCTION COMPANY HAS ALLEGED AN ERROR PRIOR TO AWARD, IT DOES NOT APPEAR THAT THE LOW BID, AS AMENDED BY TELEGRAM OF MAY 8, 1958, OF THAT FIRM PROPERLY COULD BE ACCEPTED IN GOOD FAITH. ACCORDINGLY, THE MODIFYING TELEGRAM OF MAY 8, 1958, SENT BY THE C AND S CONSTRUCTION COMPANY, MAY BE DISREGARDED AND THE BID OF THE COMPANY, AS ORIGINALLY SUBMITTED, MAY BE CONSIDERED ALONG WITH THE OTHER BIDS IN MAKING THE AWARD.

IN THE EVENT AN AWARD IS MADE TO THE C AND S CONSTRUCTION COMPANY, A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.