B-145301, JUN. 9, 1961

B-145301, JUN. 9, 1961

TO COMMONWEALTH ELECTRIC COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM DATED APRIL 28, 1961, CONCERNING OUR DECISION OF APRIL 21, 1961, TO THE ASSISTANT COMMISSIONER AND CHIEF ENGINEER, BUREAU OF RECLAMATION, WHEREIN WE HELD THAT THE LOW BID OF THE WASATCH LINE CONSTRUCTION COMPANY UNDER SPECIFICATIONS NO. D-5476 MAY BE CORRECTED TO REFLECT THEIR INTENDED BID PRICES FOR ITEMS 75, 76 AND 127 WHICH WERE UNDERSTATED IN THE AMOUNT OF $135,286.96 AND THAT SUCH CORRECTED BID MAY BE CONSIDERED FOR AWARD.

YOU ADVISE THAT YOUR BID ON ITEM 3, CLEARING LAND AND RIGHT-OF-WAY, IN THE AMOUNT OF $190,000 WAS IN ERROR TO THE EXTEND OF $100,000 AND THAT YOU WISH TO HAVE YOUR AGGREGATE SECOND LOW BID IN THE AMOUNT OF $1,817,620 REDUCED BY $100,000 TO $1,717,620 WHICH, YOU STATE, WILL BE ABOUT $92,000 BELOW THE CORRECTED BID OF WASATCH. YOU CONTEND THAT THE FOLLOWING COURSES OF ACTION SHOULD BE TAKEN: (1) AWARD THE CONTRACT TO WASATCH AT THEIR ORIGINAL BID PRICES; (2) YOUR REVISED PROPOSAL SHOULD BE ACCEPTED AS REPRESENTING A SAVINGS TO THE GOVERNMENT; OR (3) REJECT ALL BIDS AND READVERTISE. FOR THE REASONS SET OUT BELOW, WE BELIEVE THAT THE AWARD MADE TO WASATCH AT ITS CORRECTED BID PRICE ON APRIL 24, 1961, SHOULD NOT BE DISTURBED. THERE IS ENCLOSED A COPY OF OUR APRIL 21, 1961, DECISION WHICH SETS FORTH THE BASES UPON WHICH WE ALLOWED CORRECTION OF THE WASATCH BID.

THE GENERAL RULE IS THAT A BIDDER MAY NOT FREELY CHANGE HIS BID AFTER THE DATE OF OPENING, TO THE PREJUDICE OF OTHER BIDDERS. NEVERTHELESS, THE STATUTES REQUIRING ADVERTISING FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES IN ITS PROCUREMENT ACTIVITIES. IT HAS CONSISTENTLY BEEN HELD, THEREFORE, THAT WHERE A MISTAKE IS ALLEGED PROMPTLY AFTER OPENING OF BIDS AND THERE IS PRESENTED CONVINCING EVIDENCE SHOWING THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTS, HOW IT OCCURRED, AND WHAT THE BID WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THE INTEREST OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED SO THAT THE GOVERNMENT MAY HAVE THE BENEFIT OF IT, PROVIDED, OF COURSE, CORRECTION DOES NOT RESULT IN EXCEEDING THE NEXT LOW CORRECT BID. OBVIOUSLY, THIS PRINCIPLE DOES NOT PREJUDICE OTHER BIDDERS BECAUSE ITS APPLICABILITY DEPENDS ON THE ESTABLISHMENT OF THE BID WHICH WOULD HAVE BEEN SUBMITTED FOR OPENING AT THE REQUIRED DATE, BUT FOR THE MISTAKE; AND, CONSEQUENTLY, THE BIDDER GAINS NO ADVANTAGE FROM HIS KNOWLEDGE OF COMPETITIVE BIDS AS HE WOULD IF, FOR INSTANCE, ALL BIDS WERE REJECTED AND THE REQUIREMENTS WERE READVERTISED. THE APPLICATION OF THESE PRINCIPLES TO THE WASATCH BID CLEARLY REQUIRED THE CORRECTION OF THE BID TO REFLECT THE INTENDED, PROVEN BID PRICE.

CONCERNING YOUR REQUEST THAT YOUR BID BE CORRECTED DOWNWARD ON THE BASIS OF AN ALLEGED ERROR, WE MUST CONCLUDE THAT SUCH ACTION IS NEITHER REQUIRED UNDER THE CIRCUMSTANCES OF THE CASE NOR AUTHORIZED BY THE PRINCIPLES GOVERNING FORMAL COMPETITIVE BIDDING.

THE RECORD SHOWS THAT YOUR BID UNDER THE INSTANT SPECIFICATION CONTAINED THE STIPULATION THAT: "THIS PROPOSAL IS BASED ON AWARD OF THIS CONTRACT WITH AWARD OF CONTRACT NO. DC-5475. IF THIS CONTRACT IS AWARDED WITHOUT AWARD OF CONTRACT NO. DC-5475 TO THIS CONTRACTOR, ADD TO ITEM NO. 3, CLEARING, THE SUM OF $50,000.' SINCE YOU WERE NOT LOW ON SPECIFICATIONS NO. DC-5475, $50,000 WAS ADDED TO YOUR BID PRICE OF $140,000 FOR ITEM 3 UNDER SPECIFICATIONS NO. DC-5476, MAKING A TOTAL LUMP-SUM BID FOR ITEM 3 OF $190,000. THE CONTRACTING OFFICER HAS REPORTED THAT THERE WAS NOTHING UNUSUAL IN THE SPREAD OF BID PRICES ON ITEM 3 AS TO HAVE PLACED HIM ON NOTICE OF PROBABLE ERROR, ESPECIALLY SINCE IT IS NORMAL FOR BIDDERS ON CONSTRUCTION PROJECTS TO UNBALANCE THEIR PRICES ON CLEARING WORK WHICH IS USUALLY PERFORMED FIRST.

IN OUR DECISIONS ALL CONSISTENTLY DENY CORRECTION OF AN ERROR IN BID WHICH WOULD RESULT IN A BID, NOT THE LOWEST SUBMITTED, BECOMING LOWEST EXCEPT WHERE NOT ONLY THE ERROR BUT THE AMOUNT OF THE INTENDED BID IS CLEARLY ASCERTAINABLE FROM THE INVITATION AND THE BID, SO THAT RESORT TO THE BIDDER'S WORK PAPERS OR OTHER EXTRANEOUS EVIDENCE IS NOT ESSENTIAL. BUT NEITHER THE ALLEGED ERROR NOR THE AMOUNT OF YOUR INTENDED BID ON ITEM 3 CAN BE ASCERTAINED FROM THE BID AS SUBMITTED BY YOU. THAT BEING THE CASE, THE INTEREST OF THE GOVERNMENT IN PRESERVING AND MAINTAINING THE COMPETITIVE SYSTEM REQUIRES THAT THE RIGHTS OF THE LOW BIDDER BE CONSIDERED AS CALLING FOR DENIAL OF YOUR REQUEST FOR DOWNWARD REVISION OF YOUR BID ON ITEM 3 IN DISPLACEMENT OF THE OTHERWISE LOW AGGREGATE BIDDER. SEE 37 COMP. GEN. 210.

YOU ARE THEREFORE ADVISED THAT NO FURTHER ACTION IS REQUIRED BY OUR OFFICE WITH RESPECT TO THE BIDS SUBMITTED IN RESPONSE TO SPECIFICATION NO. DC-5476.