B-142179, APR. 19, 1960

B-142179, APR. 19, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 29, 1960, WITH ENCLOSURES, FROM THE OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING OUR DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN IN CONNECTION WITH WORK PERFORMED BY THE SHAW PAINT AND WALL PAPER CO., INC., UNDER CONTRACT NO. DA-09-200-AIII-2531, DATED JUNE 30, 1959.

IN RESPONSE TO INVITATION NO. DA-09-200-59-78, ISSUED ON JUNE 8, 1959, BY THE PURCHASING AND CONTRACTING OFFICE, HEADQUARTERS, FORT MCPHERSON, GEORGIA, THE SHAW PAINT AND WALL PAPER CO., INC. SUBMITTED A LUMP SUM BID OF $59,810 TO PAINT APPROXIMATELY 4,650 SQUARES OF EXTERIOR SURFACES ON 95 BUILDINGS AND APPROXIMATELY 9,350 SQUARES OF INTERIOR SURFACES IN 66 BUILDINGS LOCATED AT THE FORT MCPHERSON ARMY BASE. THE CORPORATION'S BID ALSO SHOWED, AS REQUIRED, A UNIT PRICE BREAKDOWN OF $4.94 AND $3.94 A SQUARE FOR THE EXTERIOR AND INTERIOR PAINTING RESPECTIVELY. THREE OTHER BIDS OF $65,715, $69,553 AND $126,195 WERE RECEIVED FOR THE WORK AND THE ARMY ENGINEER'S ESTIMATE WAS $79,000. BY LETTER DATED JUNE 30, 1959, THE SHAW CORPORATION WAS ADVISED THAT ITS BID HAD BEEN ACCEPTED AND FORMAL CONTRACT NO. DA-09 200-AIII-2531 WAS ENTERED INTO ON THAT DATE. WORK WAS STARTED BY THE CORPORATION ON JULY 21, 1959, AND THEREAFTER THE ARMY CONTRACTING OFFICER WAS TWICE QUESTIONED BY A REPRESENTATIVE OF THE CORPORATION AS TO WHETHER THE CONTRACT WAS A "LUMP SUM" OR A "PER SQUARE" CONTRACT. ON BOTH OCCASIONS THE SHAW CORPORATION'S REPRESENTATIVE WAS ADVISED THAT THE CONTRACT WAS A "LUMP SUM" CONTRACT. ON OCTOBER 27, 1959, THE CONTRACTING OFFICER WAS ADVISED BY HER REPRESENTATIVE THAT THE WORK HAD BEEN STOPPED PENDING A MEASUREMENT BY THE CORPORATION OF THE AREAS THAT HAD BEEN PAINTED. BY LETTER DATED OCTOBER 26, 1959, THE CORPORATION HAD STATED THAT IT HAD MORE THAN COMPLETED THE CONTRACT UNDER THE TERMS OF ITS BID, WHICH THE CORPORATION ALLEGES PROVIDED THAT "N.B. MEASUREMENTS WILL BE TAKEN IN ACCORDANCE WITH STANDARD OF MEASUREMENT OF PAINTING AND DECORATING CONTRACTORS OF AMERICA "PRICE GUIDE.'" THE SHAW CORPORATION CONTENDS THAT IT ALREADY HAS COMPLETED 8,547 SQUARES OF EXTERIOR AND 10,329 SQUARES OF INTERIOR PAINTING AND ON THIS BASIS PRESENTS ITS CLAIM FOR $5,981, THE DIFFERENCE BETWEEN THE CONTRACT PRICE OF $59,810 AND $53,829, WHICH IS THE AMOUNT PAID TO DATE, PLUS EXTRA COMPENSATION OF $23,283.10 FOR THE ADDITIONAL WORK THE CORPORATION ALLEGES WAS PERFORMED OVER AND ABOVE THE NUMBER OF SQUARES CALLED FOR IN THE CONTRACT AT THE UNIT PRICES QUOTED THEREIN. IT IS REPORTED BY THE CONTRACTING OFFICER, HOWEVER, THAT INTERIOR PAINTING HAS BEEN COMPLETED ON ONLY 43 OF THE 66 BUILDINGS AND EXTERIOR PAINTING ON ONLY 83 OF THE 94 BUILDINGS. THE CONTRACTING OFFICER HAS DETERMINED THAT THIS REPRESENTS ONLY 65 PERCENT AND 88.3 PERCENT COMPLETION RESPECTIVELY OF THE INTERIOR AND EXTERIOR PAINTING REQUIRED AND, THEREFORE, THE CORPORATION SHOULD HAVE BEEN ENTITLED TO PAYMENT OF ONLY $44,229.74 INSTEAD OF $53,829 ALREADY PAID.

INVITATION NO. DA-09-200-59-78 SHOWS CLEARLY THAT THE BASIC BIDS FOR THE PAINTING COVERED BY CONTRACT NO. DA-09-200-AIII-2531 WERE SOLICITED ON A LUMP SUM BASIS, THE REQUIREMENT FOR A UNIT PRICE BREAKDOWN AS TO THE COST PER SQUARE FOR BOTH EXTERIOR AND INTERIOR PAINTING BEING SOLELY FOR USE IN THE EVENT OF MINOR INCREASES OR DECREASES IN THE WORK. MOREOVER, REFERENCE IS MADE TO A LUMP SUM BID AT VARIOUS PLACES THROUGHOUT THE CONTRACT. ALSO, IT IS CLEAR THAT THE VARIANCE BETWEEN THE NUMBER OF SQUARES ARRIVED AT BY THE DEPARTMENT OF THE ARMY AND THE CORPORATION IS ATTRIBUTABLE TO A COMPLETELY DIFFERENT BASIS FOR COMPUTING SUCH SQUARES, BOTH OF WHICH MAY BE GENERALLY ACCEPTABLE. IN ANY EVENT, WE MAY NOT REASONABLY CONCLUDE THAT THE MERE LISTING OF THE APPROXIMATE NUMBER OF SQUARES BELIEVED TO BE INVOLVED CAN BE REGARDED IN THE NATURE OF A WARRANTY BY THE ARMY.

IN ADDITION TO THE FOREGOING, THERE IS FOR CONSIDERATION THE APPARENT CONTROVERSIAL QUESTION AS TO WHETHER THE BID OF THE SHAW CORPORATION CONSTITUTED A QUALIFIED BID. IN THIS REGARD, THE CORPORATION STATES THAT THERE APPEARED ON ITS ORIGINAL BID THE STATEMENT "N.B. MEASUREMENTS WILL BE TAKEN IN ACCORDANCE WITH STANDARD OF MEASUREMENT OF PAINTING AND DECORATING CONTRACTORS OF AMERICA "PRICE GUIDE.'" PAGE 4 OF THE PHOTOSTATIC COPY OF THE BID BEFORE US SHOWS SUCH A NOTATION. THE CONTRACTING OFFICER STATES, HOWEVER, THAT THE FIRST SHE WAS AWARE THAT SUCH A STATEMENT ALLEGEDLY HAD BEEN MADE ON THE BID WAS UPON RECEIPT OF THE SHAW CORPORATION'S LETTER OF OCTOBER 26, 1959. MOREOVER, THE CONTRACTING OFFICER FURTHER STATES THAT THERE STILL IS A REASONABLE DOUBT IN HER MIND THAT THE BID, AS ORIGINALLY SUBMITTED, CARRIED THE ABOVE REFERRED-TO STATEMENT. WHILE IT IS OBVIOUS THAT THERE MAY NOT NOW BE DEFINITELY ASCERTAINED WHETHER THE STATEMENT DID OR DID NOT APPEAR ON THE ORIGINAL BID THERE WOULD SEEM TO BE LITTLE DOUBT THAT IF IT HAD, THE STATEMENT WOULD CONSTITUTE A QUALIFIED BID AND THEREFORE THE BID SHOULD NOT HAVE BEEN ACCEPTED IN THE FIRST INSTANCE. IN ADDITION, IT WOULD APPEAR THAT THE PLANS AND SPECIFICATIONS POSSIBLY COULD HAVE BEEN PREPARED IN MORE DETAIL WITH RESPECT TO CERTAIN FEATURES. ALSO, IT IS NOTED THAT THE CONTRACTING OFFICIALS OF THE ARMY PERMITTED A CESSATION OF THE WORK FOR THE SHAW CORPORATION TO MAKE FURTHER MEASUREMENTS.

IN VIEW OF THE FOREGOING, YOU ARE ADVISED THAT UPON SATISFACTORY COMPLETION OF THE ENTIRE WORK BY THE SHAW CORPORATION COVERED BY CONTRACT NO. DA-09-200-AIII-2531 OUR OFFICE WILL HAVE NO OBJECTION TO PAYMENT BEING MADE TO THE CORPORATION, IN THIS PARTICULAR CASE, IN AN AMOUNT NOT TO EXCEED THAT OF THE NEXT LOWEST ACCEPTABLE BID. IF, HOWEVER, SUCH PARTIAL ALLOWANCE OF THE CLAIM IS UNSATISFACTORY TO THE CORPORATION, THE CONTRACT SHOULD BE TERMINATED WITHOUT FURTHER OBLIGATION TO THE CORPORATION NOTWITHSTANDING THAT THE CONTRACTING OFFICER REPORTS THAT PAYMENTS ALREADY HAVE BEEN MADE IN EXCESS OF THE PERCENTAGE OF WORK COMPLETED UNDER THE TERMS OF THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE STATEMENT OF THE CONTRACTING OFFICER AND THE PHOTOSTATIC COPY OF PAGE 4 OF THE BID, ARE RETURNED HEREWITH.