B-141939, FEB. 17, 1960

B-141939, FEB. 17, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 3, 1960, WRITTEN IN BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS) REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY NEECO ELECTRIC CONTRACTORS, INC., TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA- 45-108-ENG-5029 IS BASED.

THE U.S. ARMY ENGINEER DISTRICT, SEATTLE, WASHINGTON, INVITED BIDS FOR CONSTRUCTION OF APPROACH LIGHTING, MCCHORD AIR FORCE BASE, WASHINGTON. THE BIDS WERE OPENED ON JULY 30, 1959, AND AWARD WAS MADE TO NEECO ELECTRIC CONTRACTORS, INC., ON OCTOBER 22, 1959. THE FORMAL CONTRACT WAS MAILED TO THE CONTRACTOR ON OCTOBER 26, 1959. UPON RECEIPT OF THE CONTRACT, THE PROJECT ENGINEER OF THE CONTRACTOR CALLED THE CONTRACTING OFFICE AND STATED THAT THE UNIT PRICE AND TOTAL FOR ITEM NO. 5A SHOWN IN SCHEDULE "A" ATTACHED TO THE CONTRACT WERE IN ERROR IN THAT EACH FIGURE WAS ONE-HUNDREDTH OF THE AMOUNT THE CONTRACTOR INTENDED TO BID. THE PROJECT ENGINEER OF THE CONTRACTOR WAS ADVISED THAT THE CONTRACT SHOULD BE SIGNED AND THE BONDS EXECUTED SO THAT THE WORK COULD PROCEED WITHOUT DELAY. ALSO, HE WAS ADVISED THAT A CLAIM COULD BE FILED FOR ADJUSTMENT OF THE CONTRACT PRICE. THE CONTRACT WORK IS NOW APPROXIMATELY 25 PERCENT COMPLETE.

THE ITEM IN QUESTION IS SHOWN AS LIGHT BAR, TYPE "A" AND IN THE QUANTITY COLUMN THE NUMBER OF UNITS IS SHOWN AS "2.' THE CONTRACTOR IN ITS BID SHOWED THE UNIT PRICE AS $12.45 AND THE EXTENDED TOTAL AS $2,490. IT IS STATED THAT WHEN THE BIDS WERE BEING LISTED IN THE CONTRACTING OFFICE, A CLERK NOTICED THAT THE EXTENSION DID NOT AGREE WITH THE RESULT OBTAINED BY MULTIPLYING THE QUANTITY WITH THE UNIT PRICE AND IN ACCORDANCE WITH THE GENERAL RULE THAT WHERE THERE IS A DISCREPANCY BETWEEN THE UNIT PRICE ITEM AND A TOTAL PRICE FOR A BID ITEM THE UNIT PRICE WILL GOVERN, THE TOTAL AMOUNT WAS CHANGED FROM $2,490 TO $24.90 AND THE LATTER FIGURE WAS USED WHEN THE FORMAL CONTRACT WAS PREPARED. THE EVIDENCE SUBMITTED BY THE CONTRACTOR CLEARLY ESTABLISHES THAT IT INTENDED TO BID $1,245 FOR EACH LIGHT BAR. ALSO, A COMPARISON WITH THE GOVERNMENT ESTIMATE OF $1,751 EACH AND THE AMOUNTS OF THE SECOND AND THIRD LOW BIDS FOR THIS ITEM ($1,808.92 AND $1,355 EACH) LEAVES NO DOUBT THAT THE CONTRACTOR HAD MADE AN ERROR IN ITEM NO. 5A.

AS STATED IN 37 COMP. GEN. 829, ALTHOUGH IT MAY BE THE GENERAL RULE THAT IN CASE OF ERROR IN EXTENSION OF PRICE IN THE BID THE UNIT PRICE WILL GOVERN, THIS RULE SHOULD ONLY BE APPLIED, WITHOUT REQUESTING VERIFICATION, WHERE THE CORRECTION RESULTS IN A RELATIVELY MINOR CHANGE IN THE EXTENDED PRICE OR WHERE THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE. IN THIS CASE THE CHANGE WAS SUBSTANTIAL AND THE CORRECTED EXTENSION WAS OUT OF LINE WITH THE GOVERNMENT'S ESTIMATE AND THE TWO NEXT LOWEST BIDS.

SINCE THERE APPEARS NO DOUBT THAT THE UNIT PRICE WAS IN ERROR RATHER THAN THE EXTENDED AMOUNT, THE CONTRACT MAY BE AMENDED TO CORRECT THE UNIT PRICE OF ITEM NO. 5A BY SHOWING IT AS $1,245 AND THE TOTAL PRICE AS $2,490.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT, ARE RETURNED HEREWITH.