B-141536, DEC. 23, 1959

B-141536: Dec 23, 1959

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BUREAU OF PUBLIC ROADS: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 18. WAS IN THE AGGREGATE AMOUNT OF $1. WAS THE LOWEST OF THE SIXTEEN BIDS OPENED ON NOVEMBER 24. YOUR ENGINEER'S ESTIMATE OF THE PROJECT COST WAS $2. THE SECOND AND THIRD LOWEST BIDS WERE $2. THE LOW BIDDER WAS NOT ASKED TO VERIFY ITS BID. INQUIRY WAS MADE AS TO ITS FINANCIAL RESPONSIBILITY AND ABILITY TO FURNISH PERFORMANCE AND PAYMENT BONDS. THEY DO SHOW THAT THE UNIT RATES WERE LOW AND THAT NOTHING WAS ADDED TO THEM TO COVER OVERHEAD AND PROFIT. YOU ARE THEREFORE AUTHORIZED TO DISREGARD THE BID OF THE ROCKY MOUNTAIN CONSTRUCTION CO.

B-141536, DEC. 23, 1959

TO MR. S. E. FARIN, BUREAU OF PUBLIC ROADS:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 18, 1959, SUBMITTING FOR CONSIDERATION THE REQUEST OF ROCKY MOUNTAIN CONSTRUCTION CO., MISSOULA, MONTANA, FOR WITHDRAWAL OF ITS APPARENT LOW BID ON CONSTRUCTION OF THE KITT PEAK OBSERVATORY ROAD, PAPAGO INDIAN RESERVATION, ARIZONA.

ACCORDING TO THE RECORDS FORWARDED WITH YOUR LETTER, THE BID OF THE ROCKY MOUNTAIN CONSTRUCTION CO. WAS IN THE AGGREGATE AMOUNT OF $1,834,673, AND WAS THE LOWEST OF THE SIXTEEN BIDS OPENED ON NOVEMBER 24, 1959. YOUR ENGINEER'S ESTIMATE OF THE PROJECT COST WAS $2,429,494, AND THE SECOND AND THIRD LOWEST BIDS WERE $2,485,579 AND $2,496,270, RESPECTIVELY.

DESPITE THE OBVIOUS DISCREPANCY BETWEEN THE LOW BID AND THE GOVERNMENT ESTIMATE AND OTHER BIDS, THE LOW BIDDER WAS NOT ASKED TO VERIFY ITS BID, BUT INQUIRY WAS MADE AS TO ITS FINANCIAL RESPONSIBILITY AND ABILITY TO FURNISH PERFORMANCE AND PAYMENT BONDS. IN RESPONSE TO SUCH INQUIRY THE BIDDER ADVISED THE BUREAU BY LETTER OF DECEMBER 4, 1959, THAT IT HAD ERRONEOUSLY FAILED TO INCLUDE IN ITS BID ANY SUBCONTRACTOR'S PROFIT ON SIX ITEMS, AND REQUESTED THAT ITS BID BE REJECTED. LATER THE BIDDER FURNISHED ITS WORKSHEETS SHOWING THE COMPUTATION OF ITS BID. WHILE THESE PAPERS DO NOT CLEARLY SHOW THE BASIS FOR THE UNIT PRICES USED ON THE ITEMS CLAIMED TO BE IN ERROR, THEY DO SHOW THAT THE UNIT RATES WERE LOW AND THAT NOTHING WAS ADDED TO THEM TO COVER OVERHEAD AND PROFIT, AND THERE APPEARS TO BE NOTHING TO CONTROVERT THE BIDDER'S ALLEGATION THAT IT FAILED TO ADD A 30 PERCENT MARGIN REQUESTED BY ITS SUBCONTRACTOR.

IN THE CIRCUMSTANCES WE CONCUR IN YOUR VIEW THAT THE BID COULD NOT PROPERLY BE ACCEPTED. YOU ARE THEREFORE AUTHORIZED TO DISREGARD THE BID OF THE ROCKY MOUNTAIN CONSTRUCTION CO., WITHOUT LIABILITY ON THE BID BOND, AND TO MAKE AWARD OF A CONTRACT WITHOUT CONSIDERATION THEREOF.