B-142757, MAY 20, 1960

B-142757: May 20, 1960

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF APRIL 28. IS BASED. IN AN ITEMIZED LIST OF SPECIAL SERVICES AND FACILITIES ON THE REVERSE SIDE OF THE BID THE BIDDERS WERE REQUESTED TO INDICATE BY CHECK MARKS IN THE "YES" AND "NOW" COLUMNS THOSE ITEMS AND SERVICES WHICH WOULD BE FURNISHED AS PART OF THE RENTAL CONSIDERATION. BIDDERS WERE REQUIRED TO CHECK SPECIAL SERVICES AND FACILITIES TO BE FURNISHED TO THE GOVERNMENT TOGETHER WITH THE ANNUAL COST THEREOF. THE CONTRACTING OFFICER (CHIEF ACQUISITION BRANCH) STATES THAT AT THE TIME OF OPENING OF THE BIDS IT WAS NOTED THAT THE BIDDER MARKED "X" IN THE "YES" COLUMN AFTER "ELECTRICAL CURRENT (FOR LIGHTING AND OPERATION OF OFFICE MACHINERY AND EQUIPMENT)" BUT THAT IT WAS NOT DISCOVERED UNTIL A LATER DATE THAT THE BIDDER MADE NO ENTRY ON GSA FORM 1217 INDICATING THAT IT WOULD FURNISH TO THE GOVERNMENT CURRENT FOR LIGHT AND POWER.

B-142757, MAY 20, 1960

TO HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 28, 1960, REQUESTING A DECISION AS TO WHETHER THE QUINCY ADAMS CONSTRUCTION CO., INC., MAY BE RELIEVED FROM THE OBLIGATION OF FURNISHING ELECTRIC CURRENT FOR LIGHTING AND OPERATION OF OFFICE MACHINES AS PART OF THE RENTAL CONSIDERATION AS APPARENTLY REQUIRED BY ITS ACCEPTED BID ON WHICH UNEXECUTED LEASE NO. GS- OIB-2764 NEG. IS BASED.

IN RESPONSE TO INVITATION NO. IPRA-882, DATED SEPTEMBER 21, 1959, THE QUINCY ADAMS CONSTRUCTION CO., INC., SUBMITTED A BID DATED OCTOBER 14, 1959, WHEREIN IT OFFERED TO FURNISH 2558 SQUARE FEET OF OFFICE SPACE AND 600 SQUARE FEET OF STORAGE SPACE FOR A TERM OF THREE YEARS FROM APRIL 1, 1960, WITH RENEWAL OPTION THROUGH MARCH 31, 1965, AT A MONTHLY RENTAL OF $450 FOR THE ORIGINAL TERM AND $475 FOR THE RENEWAL TERM. IN AN ITEMIZED LIST OF SPECIAL SERVICES AND FACILITIES ON THE REVERSE SIDE OF THE BID THE BIDDERS WERE REQUESTED TO INDICATE BY CHECK MARKS IN THE "YES" AND "NOW" COLUMNS THOSE ITEMS AND SERVICES WHICH WOULD BE FURNISHED AS PART OF THE RENTAL CONSIDERATION. OPPOSITE THE ITEM FOR "ELECTRICAL CURRENT (FOR LIGHTING AND OPERATION OF OFFICE MACHINERY AND EQUIPMENT)" THE QUINCY ADAMS CONSTRUCTION CO., INC., INSERTED A CHECK MARK IN THE "YES" COLUMN. ON GSA FORM 1217, STATEMENT OF SERVICES FURNISHED BY LESSOR, AS PART OF THE RENTAL CONSIDERATION, ATTACHED TO THE BID FORM HOWEVER, BIDDERS WERE REQUIRED TO CHECK SPECIAL SERVICES AND FACILITIES TO BE FURNISHED TO THE GOVERNMENT TOGETHER WITH THE ANNUAL COST THEREOF. ON THIS FORM THE COMPANY DID NOT INSERT ANY CHECK MARK OPPOSITE "CURRENT FOR LIGHT AND POWER" UNDER THE HEADING "ELECTRICITY.' ON THE CONTRARY, IT LEFT THIS SPACE BLANK AND ONLY INSERTED A CHECK MARK AFTER "MAINTENANCE.'

IN MEMORANDUM DATED APRIL 4, 1960, THE CONTRACTING OFFICER (CHIEF ACQUISITION BRANCH) STATES THAT AT THE TIME OF OPENING OF THE BIDS IT WAS NOTED THAT THE BIDDER MARKED "X" IN THE "YES" COLUMN AFTER "ELECTRICAL CURRENT (FOR LIGHTING AND OPERATION OF OFFICE MACHINERY AND EQUIPMENT)" BUT THAT IT WAS NOT DISCOVERED UNTIL A LATER DATE THAT THE BIDDER MADE NO ENTRY ON GSA FORM 1217 INDICATING THAT IT WOULD FURNISH TO THE GOVERNMENT CURRENT FOR LIGHT AND POWER. THE CONTRACTING OFFICER STATES FURTHER THAT WHEN IT WAS CONCLUDED THAT THE PREMISES OFFERED BY THE QUINCY ADAMS CONSTRUCTION CO., INC., WOULD BE ACCEPTABLE TO THE GOVERNMENT ALL OTHER BIDS WERE REJECTED; THAT AT THIS TIME THE TENANT AGENCY REQUESTED THAT AIR CONDITIONING BE PROVIDED FOR THE PREMISES UNDER CONSIDERATION; THAT IN CONDUCTING NEGOTIATIONS WITH THE PROPOSED LESSOR FOR THIS ADDITIONAL SERVICE THE BIDDER, FROM THE VERY BEGINNING OF SUCH NEGOTIATIONS, EMPHATICALLY DECLARED THAT ANY FIGURE SUBMITTED FOR AIR CONDITIONING SERVICE WOULD BE BASED SOLELY ON INSTALLING THE SYSTEM AND THAT THE GOVERNMENT WOULD BE REQUIRED TO ESTABLISH ITS OWN ELECTRICAL CONTRACT FOR THE OPERATION OF THE SYSTEM.

BY LETTER DATED JANUARY 27, 1960, THE CONTRACTING OFFICER NOTIFIED THE SUCCESSFUL BIDDER OF THE ACCEPTANCE OF ITS BID OF OCTOBER 14, 1959, AS MODIFIED DECEMBER 18, 1959, TO INCLUDE THE FURNISHING AND INSTALLATION OF DUCTED AIR CONDITIONING AT A RENTAL RATE OF $6,960 PER ANNUM EFFECTIVE CONTINGENT ON OCCUPANCY APRIL 1, 1960, FOR AN INITIAL THREE YEAR TERM AND A TWO YEAR RENEWAL TERM AT AN ANNUAL RENTAL OF $6,298. THEREAFTER, BY LETTER DATED MARCH 28, 1960, TO THE CONTRACTING OFFICER THE BIDDER REFERRED TO THEIR RECENT CONFERENCES AND STATED THAT IT WAS THE BIDDER'S UNDERSTANDING THAT IT WOULD NOT PAY FOR THE ELECTRIC CURRENT CONSUMED BUT THAT IT WOULD SUPPLY ALL NECESSARY FACILITIES THEREFOR. THE BIDDER, AMONG OTHER THINGS, EMPHASIZED THAT THE MISUNDERSTANDING AROSE BECAUSE UNDER ITEM 3 OF THE STATEMENT OF SERVICES FURNISHED BY LESSOR (GSA FORM 1217), UNDER THE HEADING "ELECTRICITY" THE BIDDER CHECKED ONLY THE MAINTENANCE ITEM AND DID NOT CHECK "CURRENT FOR LIGHT AND POWER; " THAT IN THE ITEMIZED LIST OF SERVICES ON THE REVERSE SIDE OF ITS BID IT INSERTED A CHECK MARK IN THE "NO" COLUMN OPPOSITE "UTILITIES, MAINTENANCE AND OPERATION OF AIR CONDITIONING" THUS INDICATING THAT IT DID NOT INTEND TO PAY FOR ANY ELECTRIC CURRENT AND THAT IN CONVERSATIONS WITH THE GOVERNMENT'S REPRESENTATIVES WHO INSPECTED THE PREMISES IT WAS ALWAYS ASSUMED THAT ALL CURRENT TO BE USED WOULD BE SEPARATELY METERED TO THE GOVERNMENT.

IT APPEARS SATISFACTORILY ESTABLISHED THAT THE QUINCY ADAMS CONSTRUCTION CO., INC., MADE A BONA FIDE ERROR IN ITS BID OF OCTOBER 14, 1959, AND THAT IT NEVER INTENDED TO FURNISH ELECTRIC CURRENT FOR LIGHTING AND OPERATION OF OFFICE MACHINERY AND EQUIPMENT. THE FACT THAT THE COMPANY DID NOT PLACE A CHECK MARK OPPOSITE "CURRENT FOR LIGHT AND POWER" UNDER THE HEADING "ELECTRICITY" IN THE STATEMENT OF SERVICES FURNISHED BY LESSOR WAS SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR BEFORE ACCEPTANCE OF THE COMPANY'S BID. WHILE THE CONTRACTING OFFICER STATES THAT THE BIDDER'S FAILURE TO CHECK THIS ITEM WAS NOT DISCOVERED UNTIL A "LATER DATE," IF HE CONSIDERED THAT THE COMPANY'S BID INCLUDED ELECTRIC CURRENT FOR LIGHTING AND OPERATION OF OFFICE MACHINERY AND EQUIPMENT, IN VIEW OF THE REQUIREMENTS FOR SHOWING COMPLIANCE WITH THE 15 PERCENT LIMITATION OF SECTION 322 OF THE ECONOMY ACT OF JUNE 30, 1932, 40 U.S.C. 278A, IT IS NOT UNDERSTOOD HOW HE COULD HAVE ACCEPTED THE COMPANY'S PROPOSAL WITHOUT KNOWING THE ESTIMATED COST OF SUCH SERVICE. ANY EVENT, IT SEEMS OBVIOUS THAT IF THE COMPANY INTENDED TO FURNISH ELECTRIC CURRENT FOR LIGHTING AND OPERATION OF OFFICE MACHINERY AND EQUIPMENT IT WOULD HAVE INCLUDED THE ESTIMATED COST THEREOF IN THE COST FIGURES ON GSA FORM 1217 FOR THE PURPOSE OF JUSTIFYING THE NET RENTAL UNDER THE PROPOSED LEASE PURSUANT TO THE REQUIREMENTS OF 40 U.S.C. 278A.

ACCORDINGLY, THE UNEXECUTED LEASE MAY BE AMENDED BY DELETING "ELECTRIC CURRENT FOR LIGHTING AND OPERATION OF OFFICE MACHINES," FROM THE LESSOR'S OBLIGATION UNDER PARAGRAPH 6 OF THE LEASE.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE LEASE.

THE ENCLOSURES, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT DATED APRIL 4, 1960, ARE RETURNED.