B-142284, MAR. 23, 1960

B-142284: Mar 23, 1960

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IT IS REPORTED THAT BIDS WERE OPENED AT 2:00 P.M. FIVE BIDS WERE RECEIVED. THE SECOND LOW BID WAS SUBMITTED BY CECIL C. THE ATOMIC ENERGY COMMISSION FAIR COST ESTIMATE FOR THE PROJECT IS REPORTED TO BE $23. IT IS FURTHER STATED IN YOUR LETTER THAT FRANK LOHSE CALLED THE CONTRACTING OFFICE APPROXIMATELY 45 MINUTES AFTER BID OPENING BEGAN AND ADVISED THAT AN ERROR HAD BEEN MADE IN THE PREPARATION OF HIS BID. IT IS CLEAR THAT HAD THE LOW BID BEEN SUBMITTED AS INTENDED IT WOULD HAVE BEEN HIGHER BY $2. IT APPEARS TO HAVE BEEN YOUR VIEW THAT THE DIFFERENCE BETWEEN THE LOW BID AND THE FAIR COST ESTIMATE AND THE NEXT LOW BID WAS SUFFICIENT TO HAVE CAUSED YOU TO ASK FOR VERIFICATION BEFORE AWARD BECAUSE OF THE APPARENT POSSIBILITY OF ERROR.

B-142284, MAR. 23, 1960

TO MR. D. J. O-NEIL, CONTRACTING OFFICER, UNITED STATES ATOMIC ENERGY COMMISSION:

YOUR LETTER OF MARCH 11, 1960, REFERENCE ECO:LFP, REQUESTS OUR DETERMINATION AS TO WHETHER THE LOW BID RECEIVED PURSUANT TO INVITATION FOR BIDS NO. AT/45-1/-1497 ISSUED FEBRUARY 17, 1960, FOR THE CONSTRUCTION OF THE PRTR FUEL ELEMENT ACCESS ADDITION AT RICHLAND, WASHINGTON, MAY BE CORRECTED AND CONSIDERED FOR AWARD ON THAT BASIS.

IT IS REPORTED THAT BIDS WERE OPENED AT 2:00 P.M., ON MARCH 9, 1960. FIVE BIDS WERE RECEIVED, RANGING FROM THE LOW BID AT $18,940, SUBMITTED BY FRANK LOHSE, TO A HIGH OF $32,690. THE SECOND LOW BID WAS SUBMITTED BY CECIL C. HILL AT $23,300. THE ATOMIC ENERGY COMMISSION FAIR COST ESTIMATE FOR THE PROJECT IS REPORTED TO BE $23,000.

IT IS FURTHER STATED IN YOUR LETTER THAT FRANK LOHSE CALLED THE CONTRACTING OFFICE APPROXIMATELY 45 MINUTES AFTER BID OPENING BEGAN AND ADVISED THAT AN ERROR HAD BEEN MADE IN THE PREPARATION OF HIS BID. IMMEDIATELY AFTER, MR. LOHSE BROUGHT HIS WORK PAPERS TO THE CONTRACTING OFFICER AND STATED THAT IN PREPARING HIS BID THE SUM OF $2,393.60 FOR FURNISHING STRUCTURAL STEEL HAD INADVERTENTLY BEEN OMITTED. BY LETTER OF MARCH 10, THE LOW BIDDER REITERATED HIS CLAIM OF ERROR AND REQUESTED CORRECTION OF HIS BID.

THE WORKSHEETS LEFT BY MR. LOHSE CLEARLY INDICATE THAT A QUOTATION FROM A SUBCONTRACTOR FOR VARIOUS ITEMS OF STEEL TO BE USED IN THE PROJECT IN THE AMOUNT OF $2,176 HAD NOT BEEN CARRIED OVER TO HIS RECAPITULATION OF ESTIMATE. THE RECAPITULATION ALSO ESTABLISHES THAT THE BID INCLUDED MATERIALS AT COST AND LABOR AT STANDARD RATES WITH THE ADDITION OF AN ITEM FOR PROFIT AND OVERHEAD AT 10 PERCENT. THEREFORE, IT IS CLEAR THAT HAD THE LOW BID BEEN SUBMITTED AS INTENDED IT WOULD HAVE BEEN HIGHER BY $2,176 PLUS 10 PERCENT, OR A TOTAL OF $2,393.60.

IT APPEARS TO HAVE BEEN YOUR VIEW THAT THE DIFFERENCE BETWEEN THE LOW BID AND THE FAIR COST ESTIMATE AND THE NEXT LOW BID WAS SUFFICIENT TO HAVE CAUSED YOU TO ASK FOR VERIFICATION BEFORE AWARD BECAUSE OF THE APPARENT POSSIBILITY OF ERROR, EVEN IF THE BIDDER HAD NOT GIVEN NOTICE OF HIS CLAIM OF ERROR BEFORE YOU HAD HAD TIME TO SO DO.

THERE APPEARS NO DOUBT ON THE BASIS OF THE FACTS AND EVIDENCE PRESENTED THAT THE BID PRICE INTENDED BY MR. LOHSE WAS $21,333.60. ACCORDINGLY, THE LOW BID MAY BE CORRECTED TO THAT PRICE.

IT IS ALSO NOTED THAT THE BID WAS REQUIRED TO BE ACCOMPANIED BY A BOND OF NOT LESS THAN 20 PERCENT OF THE BID PRICE. THE PENAL SUM OF THE BID BOND SUBMITTED BY MR. LOHSE WAS STATED AS 20 PERCENT OF THE ACTUAL FACE AMOUNT OF THE BID. ACCORDINGLY, THE BOND WOULD BE INSUFFICIENT TO COVER THE REQUIREMENT STATED IN THE INVITATION. THE DEFICIENCY IN THE BID BOND MAY, HOWEVER, BE WAIVED IN THIS INSTANCE, SINCE THE DEFICIENCY WAS DUE SOLELY TO AN ERROR IN BID WHICH MAY BE CORRECTED. 39 COMP. GEN. 209.