B-137235, JANUARY 26, 1959, 38 COMP. GEN. 504

B-137235: Jan 26, 1959

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CONTRACTS - MISTAKES - PRICE ADJUSTMENT - EXECUTION OF CONTRACT CONTRACTOR WHO PROMPTLY AFTER BID OPENING ALLEGED ERROR IN BID AND WHO WAS NOT REQUESTED TO SUBMIT EVIDENCE TO SUBSTANTIATE THE ERROR. WAS IMPROPERLY ADVISED BY THE BID OPENING OFFICIAL THAT THE BID COULD NOT BE WITHDRAWN. SHOULD HAVE BEEN ADVISED TO SUBMIT EVIDENCE IN SUPPORT OF THE ALLEGED MISTAKE. EXECUTION OF THE CONTRACT IN RELIANCE UPON SUCH ADVICE IS NOT A BASIS FOR DENIAL OF THE CONTRACTOR'S CLAIM FOR A PRICE ADJUSTMENT FOR THE ERROR WHICH IS SUBSTANTIATED BY EVIDENCE. 1959: REFERENCE IS MADE TO A LETTER DATED AUGUST 26. BIDS WERE INVITED FOR THE CONSTRUCTION OF THE MAGNOLIA GARDEN AT INDEPENDENCE NATIONAL HISTORICAL PARK.

B-137235, JANUARY 26, 1959, 38 COMP. GEN. 504

CONTRACTS - MISTAKES - PRICE ADJUSTMENT - EXECUTION OF CONTRACT CONTRACTOR WHO PROMPTLY AFTER BID OPENING ALLEGED ERROR IN BID AND WHO WAS NOT REQUESTED TO SUBMIT EVIDENCE TO SUBSTANTIATE THE ERROR, BUT WAS IMPROPERLY ADVISED BY THE BID OPENING OFFICIAL THAT THE BID COULD NOT BE WITHDRAWN, SHOULD HAVE BEEN ADVISED TO SUBMIT EVIDENCE IN SUPPORT OF THE ALLEGED MISTAKE, AND EXECUTION OF THE CONTRACT IN RELIANCE UPON SUCH ADVICE IS NOT A BASIS FOR DENIAL OF THE CONTRACTOR'S CLAIM FOR A PRICE ADJUSTMENT FOR THE ERROR WHICH IS SUBSTANTIATED BY EVIDENCE.

TO THE SECRETARY OF THE INTERIOR, JANUARY 26, 1959:

REFERENCE IS MADE TO A LETTER DATED AUGUST 26, 1958, WITH ENCLOSURES, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY OF THE INTERIOR, AND SUBSEQUENT CORRESPONDENCE, REQUESTING OUR DECISION CONCERNING A CLAIM SUBMITTED BY THE D AND S CONSTRUCTION COMPANY IN THE AMOUNT OF $14,127.80, REPRESENTING ADDITIONAL COMPENSATION UNDER CONTRACT NO. 14-10-529-652, DATED JANUARY 22, 1958.

THE RECORD SHOWS THAT BY INVITATION TO BID NO. 29-IND-4, DATED DECEMBER 20, 1957, BIDS WERE INVITED FOR THE CONSTRUCTION OF THE MAGNOLIA GARDEN AT INDEPENDENCE NATIONAL HISTORICAL PARK, PHILADELPHIA, PENNSYLVANIA. THIRTEEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, THE LOWEST BEING THAT OF THE D AND S CONSTRUCTION COMPANY IN THE AMOUNT OF $55,330.87. THE OTHER BIDS RANGED FROM $72,894.56 TO $114,890. IT IS REPORTED THAT SHORTLY AFTER THE BIDS WERE OPENED, MR. ANTHONY C. D- ESPINOSI, A PARTNER OF THE D AND S CONSTRUCTION COMPANY, REQUESTED VERBALLY THAT THE BID BY THAT CONCERN BE WITHDRAWN BECAUSE THEY HAD FAILED TO INCLUDE LABOR AND MATERIAL COSTS FOR FOUNDATIONS, EXCAVATIONS, AND CONSTRUCTION IN THE UNIT PRICES FOR ITEMS 28, 29, 31, 32, 34, AND 36, AS SHOWN ON THE BID FORM ATTACHED TO THE BID. MR. D ESPINOSI WAS ADVISED BY THE OFFICIAL IN CHARGE OF THE BID OPENING THAT THE BID COULD NOT BE WITHDRAWN SINCE THERE WAS NO APPARENT EVIDENCE THAT A MISTAKE HAD BEEN MADE AND THAT THE COMPANY SHOULD SUBMIT ITS CLAIM IN WRITING. IT IS THEN STATED IN THE LETTER OF AUGUST 26, 1958, THAT HAVING FAILED TO SUBMIT A CLAIM DURING THE 30-DAY PERIOD RESERVED BY THE GOVERNMENT TO MAKE AN AWARD, THE CONTRACT WAS AWARDED TO THE D AND S CONSTRUCTION COMPANY ON THE BASIS OF ITS LOW BID OF $55,330.87.

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

THE RECORD INDICATES THAT THE D AND S CONSTRUCTION COMPANY ALLEGED ERROR WITHIN TWO HOURS OF THE BID OPENING, AND IT WAS STATED IN THE LETTER OF AUGUST 26, 1958, THAT A COMPARISON OF THE BID SUBMITTED BY THE LOW BIDDER WITH THE QUOTATIONS OF THE OTHER BIDDERS REVEALED A DISCREPANCY. NOTWITHSTANDING THESE FACTS, THE LOW BIDDER WAS APPARENTLY ADVISED THAT ITS ONLY COURSE OF ACTION WAS TO FILE A CLAIM AND, BEING SO ADVISED, IT SIGNED THE CONTRACT. IT WAS NOT UNTIL BY LETTER OF MARCH 18, 1958, THAT THE COMPANY SUBMITTED ANY INFORMATION CONCERNING THE ALLEGED MISTAKE. MANY DECISIONS OF OUR OFFICE INSTRUCTIONS HAVE BEEN GIVEN TO DISREGARD BIDS WHERE ERRORS WERE ALLEGED PRIOR TO AWARD AND SUPPORTED BY ACCEPTABLE EVIDENCE. IT HAS BEEN NOTED THAT THE BIDS WERE OPENED ON JANUARY 16, 1958, AND AWARD MADE ON JANUARY 22, 1958--- A DELAY OF ONLY SIX DAYS. UNDER THE CIRCUMSTANCES, THE STATEMENT IN THE LETTER OF AUGUST 26, 1958, THAT THE CONTRACT WAS AWARDED TO THE D AND S CONSTRUCTION COMPANY SINCE NO WRITTEN CLAIM WAS FILED WITHIN THE 30-DAY PERIOD RESERVED BY THE GOVERNMENT TO MAKE AN AWARD, IS NOT UNDERSTOOD.

THE ERROR IN THIS CASE IS ALLEGED TO HAVE ARISEN OUT OF THE CONTRACTOR'S FAILURE TO INCLUDE LABOR AND MATERIAL COSTS FOR FOUNDATIONS, EXCAVATIONS AND CONSTRUCTION IN THE PRICES OF THE SEVERAL ITEMS INVOLVED. UNDER THE FACTS OF RECORD IN THIS CASE, IT IS OUR VIEW THAT THE LOW BIDDER SHOULD HAVE BEEN ADVISED TO PROMPTLY SUBMIT WHATEVER EVIDENCE IT MIGHT HAVE TO SUPPORT THE ALLEGED MISTAKE. WE HAE EXAMINED THE WORKSHEETS TRANSMITTED WITH LETTER OF OCTOBER 17, 1958, FROM MR. W. E. O-NEIL, JR., ACTING CHIEF ENGINEER, AND IT APPEARS THEREFROM THAT THE LOW BIDDER DID, IN FACT, MAKE A MISTAKE IN ITS BID. FOR EXAMPLE, THE INTENDED BID PRICE FOR ITEM 36 WAS SHOWN ON THE WORKSHEET AS $375 AND WAS ORIGINALLY SO EXTENDED IN THE BID. IF EXCAVATION WAS NECESSARY AS TO ITEM 34--- WHICH IS NOT DENIED BY YOUR DEPARTMENT--- NO ALLOWANCE WAS MADE THEREFOR IN THE BID PRICE. ALSO, AS TO ITEMS 28, 29, 31, AND 32, THE WORKSHEETS SHOW ESTIMATES FOR BRICK WORK ONLY, NO ALLOWANCE BEING INCLUDED THEREIN FOR FOUNDATIONS OR EXCAVATION.

THE RECORD SEEMS TO CLEARLY ESTABLISH THAT THE GOVERNMENT WAS ON NOTICE OF ERROR PRIOR TO THE AWARD OF THE CONTRACT. HAD THE LOW BIDDER BEEN PROPERLY ADVISED IN THE MATTER, IT IS VERY PROBABLE THAT IF THE EVIDENCE NOW SUBMITTED HAD BEEN SUBMITTED PRIOR TO AWARD OF THE CONTRACT, OUR OFFICE WOULD HAVE ISSUED INSTRUCTIONS TO DISREGARD THE BID BY REASON OF THE MISTAKE. IT IS OUR VIEW THAT CONSIDERATION OF THE CONTRACTOR'S CLAIM- -- FILED PURSUANT TO ADVICE GIVEN BY THE OFFICIAL IN CHARGE OF THE BID OPENING--- SHOULD NOT NOW BE DENIED ON THE GROUND THAT IT SIGNED THE CONTRACT AND PROCEEDED TO PERFORM THEREUNDER. WE BELIEVE THE CLAIM SHOULD BE ALLOWED ON A QUANTUM MERUIT BASIS FOR THE ITEMS AS TO WHICH ERROR HAS BEEN ALLEGED, SUBJECT TO A DETERMINATION BY YOUR DEPARTMENT AS TO THE REASONABLE VALUE OF THE WORK INVOLVED NOT IN EXCESS OF THE AMOUNT CLAIMED.