B-140851, OCT. 22, 1959

B-140851, OCT. 22, 1959

TO ALGERNON BLAIR CONSTRUCTION COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 6, 1959, PROTESTING AGAINST THE ANTICIPATED AWARD OF A CONTRACT TO FARNSWORTH AND CHAMBERS CO., INC., HOUSTON, TEXAS, ON THE BASIS OF ITS CORRECTED BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 292-60-5 ISSUED BY THE ATOMIC ENERGY COMMISSION FOR CONSTRUCTION WORK AT CLARKSVILLE BASE, CLARKSVILLE, TENNESSEE. IN OUR DECISION OF OCTOBER 1, 1959, TO MR. K. F. HERTFORD, MANAGER OF THE ALBUQUERQUE OPERATIONS OFFICE, ATOMIC ENERGY COMMISSION, ALBUQUERQUE, NEW MEXICO, REFERRED TO IN YOUR TELEGRAM, IT WAS HELD THAT THE BID MAY BE CORRECTED AND CONSIDERED FOR AWARD.

IN RESPONSE TO THE INVITATION, FARNSWORTH AND CHAMBERS CO., INC., SUBMITTED ITS BID IN THE AMOUNT OF $1,029,362.01. THE EIGHT OTHER BIDS RECEIVED RANGED FROM $1,148,592.30 (YOUR BID) TO $1,999,872.75. THE GOVERNMENT'S ESTIMATE WAS IN THE AMOUNT OF $1,064,070.60.

IN A LETTER DATED SEPTEMBER 9, 1959, CONFIRMING A CONVERSATION OF SEPTEMBER 8, FARNSWORTH AND CHAMBERS CO., INC., REQUESTED THAT IT BE PERMITTED TO WITHDRAW ITS BID SINCE CERTAIN ITEMS OF EXPENSE AGGREGATING APPROXIMATELY $78,000 HAD BEEN OMITTED FROM THE BID THROUGH ERROR. IN A LETTER DATED SEPTEMBER 12, 1959, MR. B. J. LARVIN, CHIEF ESTIMATOR FOR THE BIDDER, STATED THAT THE ITEMS ERRONEOUSLY OMITTED TOTALED $78,623, INCLUDING ITEMS FOR LOST TIME DUE TO SECURITY, A TWO-MONTHS OVERRUN SECURITY ALLOWANCE, FREIGHT ON EQUIPMENT FOR EXCAVATION AND PAVING, WINTER HEAT AND PROTECTION, ENGINEERING OVERRUN ALLOWANCE, AND "INCREASE GENERAL CONDITIONS LABOR DUE TO OVERRUN AND MATERIAL AND EQUIPMENT RENTAL RATE DUE TO THIS OVERRUN.' HE EXPLAINED THAT IN ORDER TO COVER THE REFERRED-TO ITEMS HE INTENDED TO ADD 8 PERCENT TO EACH OF THE 60 ITEMS INCLUDED IN THE BID COMPUTATION BUT THAT HE FAILED TO DO SO BECAUSE OF THE PRESSURE ATTENDING HIS FINAL COMPUTATION BEFORE SUBMITTING THE BID, WHICH PRESSURE WAS UNUSUALLY GREAT BECAUSE SUBCONTRACTORS WERE UNUSUALLY LATE IN SUBMITTING THEIR PRICES. IN A SUPPLEMENTAL LETTER DATED SEPTEMBER 22, 1959, MR. LARVIN STATED THAT THE INTENDED BID WAS IN THE AMOUNT OF $1,111,732.57, AN INCREASE OF $82,350.56 OVER THE BID SUBMITTED, ARRIVED AT BY ADDING 8 PERCENT TO EACH ITEM OF THE BID; AND HE REQUESTED THAT WITHDRAWAL OF THE BID BE PERMITTED OR THAT AWARD BE MADE ON THE BASIS OF THE CORRECTED BID.

THE ESTIMATE SHEETS FURNISHED BY THE BIDDER SUBSTANTIATE ITS CONTENTION THAT AN ERROR WAS MADE. ON THE FINAL SHEET OF THE COMPUTATION OF "SUPPLEMENTAL OVERHEAD," SHOWING THE ABOVE-MENTIONED TOTAL OF $78,623, IS FOUND THE FOLLOWING NOTATION: "JOB SAY $1,100,000 SAY 8 PERCENT; " BUT NO CORRESPONDING ITEM APPEARS ON THE BID SUBMITTED AND THE AMOUNTS SHOWN FOR THE VARIOUS ITEMS IN THE BID APPARENTLY DO NOT INCLUDE THE INTENDED 8 PERCENT INCREASE, MANY OF THOSE ITEMS BEING IN ROUND NUMBERS.

THE GENERAL RULE IS THAT A BIDDER MAY NOT CHANGE HIS BID AFTER THE DATE OF OPENING TO THE PREJUDICE OF OTHER BIDDERS. NEVERTHELESS, THE STATUTES REQUIRING ADVERTISING FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES IN ITS PROCUREMENT ACTIVITIES. IT HAS BEEN CONSISTENTLY HELD, THEREFORE, BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT WHERE A MISTAKE IS ALLEGED PROMPTLY AFTER OPENING AND THERE HAS BEEN IMMEDIATELY PRESENTED CONVINCING EVIDENCE SHOWING THAT A MISTAKE WAS MADE, HOW IT OCCURRED, AND WHAT THE BID PRICE WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED, IF SUCH CORRECTION WOULD NOT AFFECT THE RELATIVE STANDING OF OTHER BIDDERS, SO THAT THE GOVERNMENT MAY HAVE THE BENEFIT OF THE CORRECTED BID. OBVIOUSLY, THIS PRINCIPLE DOES NOT PREJUDICE OTHER BIDDERS SINCE ITS APPLICABILITY DEPENDS ON THE ESTABLISHMENT OF THE BID WHICH WOULD HAVE BEEN SUBMITTED FOR OPENING AT THE REQUIRED DATE BUT THE MISTAKE; AND, CONSEQUENTLY, THE BIDDER GAINS NO ADVANTAGE FROM HIS KNOWLEDGE OF COMPETITIVE BIDS.

IN THE INSTANT MATTER, THE RECORD SATISFACTORILY ESTABLISHES THAT THERE WAS AN ERROR IN THE BID OF FARNSWORTH AND CHAMBERS CO., INC., HOW THE ERROR OCCURRED, AND THAT THE INTENDED BID WAS $1,111,732.57--- WELL BELOW THE NEXT LOW BID OF $1,148.592.30 SUBMITTED BY YOU. ONLY THE CORRECTION OF A BID--- NOT NEGOTIATION--- IS INVOLVED IN THE MATTER. FOR THE REASONS ABOVE SET FORTH, THERE APPEARS NO BASIS FOR DISTURBING THE CONCLUSION STATED IN THE REFERRED-TO DECISION OF OCTOBER 1, 1959.