B-147397, OCT. 24, 1961

B-147397: Oct 24, 1961

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TO THE POSTMASTER GENERAL: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 11. BIDS WERE REQUESTED TO BE OPENED AT 2:00 P.M. SO FAR AS IS HERE MATERIAL THE INVITATION REQUIRED BIDDERS TO QUOTE AN ANNUAL RENTAL FOR THE BASIC PERIOD AND EACH OF THE RENEWAL OPTION PERIODS ON THE BASIS OF (1) MAINTENANCE OF THE PREMISES AS AN OBLIGATION OF THE LESSOR AND (2) MAINTENANCE OF THE PREMISES AS AN OBLIGATION OF THE GOVERNMENT. AT THE SPECIFIED TIME SEVEN BIDS HAD BEEN RECEIVED AND THEY WERE PUBLICLY OPENED. ON THE BASIC PERIOD WAS IN THE AMOUNT OF $1. THE BID WAS THE LOWEST RECEIVED ON THE BASIS OF LESSOR MAINTENANCE BUT NOT ON GOVERNMENT MAINTENANCE. IT IS REPORTED THAT SHORTLY AFTER THE OPENING OF BIDS TWO REPRESENTATIVES OF OVERLOOK PROPERTIES.

B-147397, OCT. 24, 1961

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 11, 1961, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO THE BID SUBMITTED BY OVERLOOK PROPERTIES, INC., FOR THE NEW LEASE CONSTRUCTION OF A MAJOR POSTAL FACILITY AT BUFFALO, NEW YORK.

BIDS WERE REQUESTED TO BE OPENED AT 2:00 P.M., E.D.S.T., SEPTEMBER 29, 1961, AT WASHINGTON, C., FOR THE CONSTRUCTION OF FACILITIES ON CERTAIN LANDS IN THE CITY OF BUFFALO IN ACCORDANCE WITH DRAWINGS AND SPECIFICATIONS PREPARED BY AN ARCHITECT-ENGINEER AND THE LEASE OF SUCH FACILITIES TO THE GOVERNMENT FOR A BASIC PERIOD OF 30 YEARS, A FIRST RENEWAL OPTION OF 10 YEARS AND FOUR ADDITIONAL RENEWAL OPTIONS OF FIVE YEARS EACH. SO FAR AS IS HERE MATERIAL THE INVITATION REQUIRED BIDDERS TO QUOTE AN ANNUAL RENTAL FOR THE BASIC PERIOD AND EACH OF THE RENEWAL OPTION PERIODS ON THE BASIS OF (1) MAINTENANCE OF THE PREMISES AS AN OBLIGATION OF THE LESSOR AND (2) MAINTENANCE OF THE PREMISES AS AN OBLIGATION OF THE GOVERNMENT.

AT THE SPECIFIED TIME SEVEN BIDS HAD BEEN RECEIVED AND THEY WERE PUBLICLY OPENED. THE BID OF OVERLOOK PROPERTIES, INC., ON THE BASIC PERIOD WAS IN THE AMOUNT OF $1,014,000 FOR LESSOR MAINTENANCE AND $1,224,000 FOR GOVERNMENT MAINTENANCE. THE BID WAS THE LOWEST RECEIVED ON THE BASIS OF LESSOR MAINTENANCE BUT NOT ON GOVERNMENT MAINTENANCE.

IT IS REPORTED THAT SHORTLY AFTER THE OPENING OF BIDS TWO REPRESENTATIVES OF OVERLOOK PROPERTIES, INC., REQUESTED A CONFERENCE WITH THE ACTING DIRECTOR, REALTY DIVISION, TO ALLEGE AN ERROR IN THE BID SUBMITTED. THE CONFERENCE WAS GRANTED AND THE REPRESENTATIVES STATED BEFORE THE ACTING DIRECTOR, REALTY DIVISION, THE ACTING CHIEF, REALTY ACQUISITION BRANCH, AND A REPRESENTATIVE OF THE GENERAL COUNSEL'S OFFICE THAT THE FIGURES SHOWN IN THE BID FOR GOVERNMENT MAINTENANCE AND LESSOR MAINTENANCE HAD BEEN REVERSED BY MISTAKE WHEN THE BID WAS TYPED. THE REPRESENTATIVES FURTHER STATED THAT AT 1:30 P.M., ON SEPTEMBER 29 THEY HAD RECEIVED (APPARENTLY FROM THE CORPORATION'S OFFICE IN NEW YORK CITY) THE FINAL FIGURES FOR THE BID WHICH THEY INKED-IN IN PLACE OF THE TYPED FIGURES, THAT THEY INITIALED THE CHANGES, PLACED THE BID IN A SEALED ENVELOPE AND DELIVERED IT AT THE BID OPENING. THEY STATED THAT AT THE TIME OF MAKING THE CHANGES AND INITIALING THEM THE ERROR OF TRANSPOSITION WAS NOT NOTICED. THE REPRESENTATIVES REQUESTED PERMISSION TO REVERSE THE FIGURES IN THE BID AT THE TIME OF THE CONFERENCE, BUT THEY WERE ADVISED THAT THIS WAS NOT POSSIBLE UNDER COMPETITIVE BID PROCEDURES. THEY WERE ADVISED THAT THE POST OFFICE DEPARTMENT WOULD REQUIRE AFFIDAVITS FROM ALL PARTIES CONCERNED WITH THE COMPUTING, TYPING AND SIGNING THE BID, AS WELL AS WORK SHEETS USED IN THIS REGARD. THEY AGREED TO FURNISH SUCH DOCUMENTS. SHORT MEMORANDUM OF THE CONFERENCE WAS INITIALED BY THE TWO REPRESENTATIVES.

BY LETTER DATED OCTOBER 4, 1961, SIGNED BY ITS PRESIDENT AND SECRETARY, OVERLOOK PROPERTIES, INC., ADVISED THAT THE BID ON THE BASIS OF LESSOR MAINTENANCE WAS CORRECT AS SUBMITTED AND SHOULD BE ACTED UPON BY THE DEPARTMENT. IT WAS FURTHER STATED THAT ALTHOUGH THERE WAS AN ERROR IN THE BID ON THE BASIS OF GOVERNMENT MAINTENANCE, THE AMOUNT WHICH THEY INTENDED TO BID ON THIS BASIS EXCEEDED SEVERAL OF THE OTHER BIDS RECEIVED AND THEREFORE NO REASON WAS SEEN AT THAT TIME TO REQUEST PERMISSION TO REVISE THE BID IN THIS PARTICULAR.

SINCE THE BID OF OVERLOOK PROPERTIES, INC., SHOWED HIGHER ANNUAL RENTALS FOR GOVERNMENT MAINTENANCE THAN IT SHOWED FOR LESSOR MAINTENANCE, THE BID IS OBVIOUSLY ERRONEOUS ON ITS FACE WITH RESPECT TO ONE OR THE OTHER, OR BOTH. HAD THE REPRESENTATIVES NOT ALLEGED ERROR SHORTLY AFTER THE BID OPENING, THE OBVIOUS INCONSISTENCY WOULD HAVE BEEN OF SUFFICIENT IMPORT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF A POSSIBLE ERROR AND WOULD HAVE REQUIRED HIM TO CALL IT TO THE BIDDER'S ATTENTION AND TO REQUEST CONFIRMATION OF THE BID BEFORE IT COULD HAVE BEEN ACCEPTED IN GOOD FAITH. EXAMINATION OF THE ABSTRACT OF BIDS, SHOWING THE AMOUNTS QUOTED BY ALL BIDDERS FOR THE BASIC TERM AND THE FIVE EXTENSIONS FOR BOTH GOVERNMENT AND LESSOR MAINTENANCE, REASONABLY ESTABLISH, AS ALLEGED BY THE TWO REPRESENTATIVES OF OVERLOOK PROPERTIES, INC., ON SEPTEMBER 29, THAT THE PRICES ON THE TWO SCHEDULES WERE IN FACT REVERSED. HOWEVER, AFTER BEING AWARE OF THE SITUATION FOR FOUR DAYS, OVERLOOK PROPERTIES, INC., ALLEGES THAT THE AMOUNT SHOWN IN THE BID FOR LESSOR MAINTENANCE IS CORRECT AND THAT ONLY THE QUOTATION FOR GOVERNMENT MAINTENANCE IS ERRONEOUS, AND REQUESTS THAT THE BID BE CONSIDERED AS SUBMITTED. ON THIS BASIS THE BID WOULD BE LOW ON LESSOR MAINTENANCE, WHEREAS, IF THE PRICES FOR THE TWO SCHEDULES WERE REVERSED, NEITHER WOULD BE LOW. THE BIDDER HAS PLACED HIMSELF IN A POSITION, WHETHER INTENTIONALLY OR NOT, WHERE AFTER THE OPENING OF THE BIDS HE HAD THE OPTION OF REQUESTING THAT THE BID PRICES ON THE TWO SCHEDULES BE REVERSED WHICH THE GOVERNMENT, UNDER THE CIRCUMSTANCES, COULD HARDLY HAVE LOGICALLY DENIED, OR CLAIMING THAT THE PRICES SHOWN ON EITHER ONE OF THE TWO SCHEDULES WAS CORRECT AND THE OTHER WAS ERRONEOUS. A BIDDER MAY NOT BE PERMITTED TO STAND ON ITS APPARENTLY ERRONEOUS BID AND MAKE A CONTRACT TO WHICH IT WOULD NOT HAVE BEEN ENTITLED BUT FOR THE ERROR. THE PRESERVATION OF FAIRNESS IN THE COMPETITIVE BID SYSTEM PRECLUDES GIVING A BIDDER THE RIGHT TO MAKE SUCH AN ELECTION AFTER THE RESULTS OF THE BIDDING ARE KNOWN. 35 COMP. GEN. 33; 37 ID. 579; AND 39 ID. 185.

ACCORDINGLY YOU ARE ADVISED THAT UNDER THE CIRCUMSTANCES THE BID OF OVERLOOK PROPERTIES, INC., ON BOTH BASES, SHOULD BE DISREGARDED IN EVALUATING THE BIDS FOR AWARD.