B-145912, JUN. 1, 1961

B-145912: Jun 1, 1961

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" THREE BIDS WERE RECEIVED AND OPENED ON APRIL 3. 790 WAS SUBMITTED BY THE RODNEY HUNT MACHINE COMPANY. 214.47 UNIT PRICE QUOTED BY ARMCO WAS SO LOW IN COMPARISON WITH THOSE OF THE OTHER BIDDERS AND THE GOVERNMENT ENGINEER'S ESTIMATE OF $3. ARMCO ADVISED YOU THAT THEY WERE INCREASING THEIR UNIT PRICES BY $300 OR TO A TOTAL BID PRICE OF $25. THE $300 INCREASE PER UNIT WAS SUPPORTED ONLY BY ARMCO'S STATEMENT THAT THEY HAD ADDED ADDITIONAL EQUIPMENT TO THEIR ORIGINAL OFFER AS REQUIRED BY THE SPECIFICATIONS. IN PART: "IF YOU WILL EXAMINE OUR BID. IN WHICH ALL ORIGINAL DOCUMENTS WERE RETURNED. YOU WILL NOTE THAT THERE IS A PAGE I AND A PAGE III. OUR BID WAS BASED ON PAGES I AND III OF THE SPECIFICATIONS AND NOT ON PAGE II.

B-145912, JUN. 1, 1961

TO MR. J. C. KIMBALL, CONTRACTING OFFICER, BUREAU OF RECLAMATION:

BY LETTER DATED MAY 18, 1961, WITH ENCLOSURES, REFERENCE D-289A, YOU REQUESTED OUR DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO THE BID OF ARMCO DRAINAGE AND METAL PRODUCTS, INC., SUBMITTED IN RESPONSE TO INVITATION NO. (D) H-33, 433-A.

THE INVITATION DATED MARCH 8, 1961, REQUESTED BIDS FOR FURNISHING ONE ITEM CONSISTING OF TEN 72-INCH BY 72-INCH CAST-IRON SLIDE GATES FOR THE CLEAR CREEK POWER INTAKE, CENTRAL VALLEY PROJECT, IN ACCORDANCE WITH SPECIFICATIONS FOR SLIDE GATES AND MOTOR OPERATED LIFTS "/PAGES I-III)," THREE BIDS WERE RECEIVED AND OPENED ON APRIL 3, 1961, AS SCHEDULED AND IT APPEARED THAT ARMCO SUBMITTED THE LOWEST BID IN THE AMOUNT OF $22,144.70; THAT THE SECOND LOW BID IN THE AMOUNT OF $39,790 WAS SUBMITTED BY THE RODNEY HUNT MACHINE COMPANY, AND THAT THE FILER AND STOWELL COMPANY SUBMITTED THE HIGHEST BID IN THE AMOUNT OF $40,400. YOU REPORT THAT SINCE THE $2,214.47 UNIT PRICE QUOTED BY ARMCO WAS SO LOW IN COMPARISON WITH THOSE OF THE OTHER BIDDERS AND THE GOVERNMENT ENGINEER'S ESTIMATE OF $3,500 AS TO INDICATE THE POSSIBILITY OF ERROR, YOU REQUESTED ARMCO TO CONFIRM ITS TOTAL BID PRICE. BY LETTER OF APRIL 20, 1961, ARMCO ADVISED YOU THAT THEY WERE INCREASING THEIR UNIT PRICES BY $300 OR TO A TOTAL BID PRICE OF $25,144.70. THE $300 INCREASE PER UNIT WAS SUPPORTED ONLY BY ARMCO'S STATEMENT THAT THEY HAD ADDED ADDITIONAL EQUIPMENT TO THEIR ORIGINAL OFFER AS REQUIRED BY THE SPECIFICATIONS. IN A LETTER DATED MAY 5, 1961, ARMCO STATED, IN PART:

"IF YOU WILL EXAMINE OUR BID, IN WHICH ALL ORIGINAL DOCUMENTS WERE RETURNED, YOU WILL NOTE THAT THERE IS A PAGE I AND A PAGE III--- BUT NO PAGE II IN THE SPECIFICATIONS. OUR BID WAS BASED ON PAGES I AND III OF THE SPECIFICATIONS AND NOT ON PAGE II, WHICH WAS NOT SUPPLIED. WE HAD NO WAY OF KNOWING PAGE II WAS MISSING IN THAT THE TABLE OF ATTACHMENTS MERELY LISTED THE SPECIFICATIONS AS I-III. WE CHECKED OTHER COPIES OF THE INVITATION AND LIKEWISE FOUND THEM TO LACK PAGE II; THEREFORE, WE ASSUMED WE HAD ALL OF THE INFORMATION.

"ON APRIL 20, 1961, WE RECEIVED A LETTER FROM YOU STATING THAT ARMCO WAS THE APPARENT LOW BIDDER ON INVITATION (D) H-33,433A. YOU FURTHER STATED THAT OUR BID WAS SUBSTANTIALLY BELOW THE ENGINEERS' ESTIMATE AND ASKED THAT WE REVIEW THE REQUIREMENT. ATTACHED WAS PAGE II OF THE SPECIFICATIONS.

"IN LIGHT OF THE APPEARANCE OF PAGE II, WE REVISED OUR BID AND RESUBMITTED IT TO THE BUREAU. THE REVISED TOTAL PRICE WAS $25,144.70, OR $3,000 IN EXCESS OF OUR ORIGINAL BID.

"WE ARE ATTACHING A COPY OF A LETTER RECEIVED FROM MR. LOBEL, REPRESENTATIVE OF PHILADELPHIA GEAR CORPORATION, ADDRESSED TO ARMCO DRAINAGE AND METAL PRODUCTS, INC., WHICH WILL SERVE TO SUBSTANTIATE THE FACT THAT THE MATERIAL IN QUESTION WAS BID IN GOOD FAITH, BASED ON INFORMATION SUPPLIED BY THE BUREAU--- NAMELY PAGE I AND III OF THE SPECIFICATIONS ONLY.

"WE WILL BE HAPPY TO SUPPLY THE EQUIPMENT SPECIFIED ON PAGES I AND III AT THE ORIGINAL BID PRICE, OR THE EQUIPMENT SPECIFIED ON PAGES I THROUGH III INCLUSIVE AT OUR REVISED PRICE. IN VIEW OF THE FACT THAT OUR REVISED TOTAL IS STILL FAR BELOW THE NEAREST COMPETITIVE BID, IT IS, OF COURSE, OUR HOPE THAT THE CONTRACT WILL BE AWARDED TO ARMCO FOR THE REVISED TOTAL ($25,144.70). SHOULD WE BE AWARDED THE CONTRACT, WE WILL DO EVERYTHING WITHIN OUR MEANS TO IMPROVE OUR DELIVERY PROMISE SO THAT THIS MISUNDERSTANDING WILL NOT DELAY ANY CONSTRUCTION SCHEDULE YOU MAY HAVE ESTABLISHED.'

ARMCO'S SUPPLIER THE PHILADELPHIA GEAR CORPORATION, ALSO STATED THAT PAGE II OF THE SPECIFICATIONS WAS NOT INCLUDED WITH THEIR COPY OF THE INVITATION AND THAT THEIR QUOTATION TO ARMCO WAS BASED ONLY UPON PAGES I AND III. YOU CONFIRM THIS STATEMENT AND ADVISE THAT YOU "FIRST LEARNED THAT SOME OF OUR REMAINING COPIES OF THE INVITATION FAILED TO INCLUDE PAGE II OF THE INVITATION.' IN VIEW THEREOF, YOU ARE OF THE OPINION THAT NEITHER ARMCO NOR ITS CONTEMPLATED SUPPLIER WERE AWARE PRIOR TO THE OPENING OF BIDS OF THE REQUIREMENTS SET FORTH ON PAGE II, AND THAT YOU REGARD THOSE REQUIREMENTS AS IMPORTANT AND WARRANTING THE REQUESTED $300 UNIT PRICE INCREASE.

IT IS A FUNDAMENTAL PRINCIPLE OF COMPETITIVE ADVERTISING THAT A BID MAY NOT BE CHANGED AFTER IT HAS BEEN OPENED AND THE EXCEPTION PERMITTING A BID TO BE CORRECTED WHERE SUFFICIENT EVIDENCE IS PRESENTED TO ESTABLISH THAT THE BIDDER ACTUALLY INTENDED TO BID AN AMOUNT OTHER THAN THAT SPECIFIED IN THE BID DOES NOT EXTEND TO PERMITTING A BIDDER TO RECALCULATE HIS BID TO INCLUDE FACTORS WHICH HE DID NOT HAVE IN MIND WHEN HIS BID WAS SUBMITTED. 17 COMP. GEN. 575. HERE, THE AMOUNT OF ARMCO'S BID WAS AS INTENDED AT THE TIME SUBMITTED, AND THE INCREASE REQUESTED IS BASED ON THE FACT THAT AN INCREASED AMOUNT WOULD HAVE BEEN BID HAD THEY BEEN AWARE OF PAGE II OF THE SPECIFICATIONS. WHILE A COMPLETE INVITATION MAY NOT HAVE BEEN FURNISHED TO ARMCO, A READING OF PAGES I-III OF THE SPECIFICATIONS CLEARLY INDICATES THAT A PORTION OF THE SPECIFICATIONS WAS MISSING. PAGE III CLEARLY SHOWS THAT SOME LANGUAGE PRECEDED THE FIRST LINE ON THAT PAGE AND THAT SUCH PAGE DEALT WITH REQUIREMENTS OTHER THAN THOSE SET OUT AT THE BOTTOM OF PAGE I. HENCE, PAGES I AND III DID NOT FOLLOW EITHER LOGICALLY OR TECHNICALLY. CONSIDERING THAT 25 CALENDAR DAYS ELAPSED BETWEEN THE DATE THE INVITATION WAS ISSUED AND THE DATE BIDS WERE OPENED, IT WOULD SEEM THAT THERE WAS AMPLE TIME FOR ARMCO TO ASCERTAIN THE COMPLETENESS OF THE SPECIFICATION IN ITS POSSESSION WHICH CLEARLY INDICATED THAT A PAGE WAS MISSING. WHILE THE GOVERNMENT HAS A RESPONSIBILITY TO FURNISH COMPLETE BIDDING DOCUMENTS, BIDDERS HAVE A CONCOMITANT DUTY TO ASCERTAIN WHETHER SUFFICIENT DATA IS BEFORE THEM TO BID INTELLIGENTLY AND, IF THE BIDDING DOCUMENTS APPEAR DEFICIENT, TO PROMPTLY APPRISE THE PROCUREMENT AGENCY OF THE APPARENT DEFICIENCY.

HOWEVER, IN VIEW OF THE WIDE VARIANCE BETWEEN ARMCO'S BID IN THE AMOUNT OF $22,144.70 AND THE OTHER BIDS SUBMITTED AND THE GOVERNMENT'S ESTIMATE OF $35,000 ALL OF WHICH LED YOU TO REQUEST BID VERIFICATION, THE BID MAY BE DISREGARDED IN MAKING AN AWARD UNDER THE INVITATION. AS REQUESTED, THE ENCLOSURES TO YOUR LETTER ARE RETURNED AND A COPY OF THIS DECISION IS BEING FURNISHED THE COMMISSIONER, BUREAU OF RECLAMATION.