B-147665, DEC. 6, 1961

B-147665, DEC. 6, 1961

TO MR. OSBORNE KOERNER, CONTRACTING OFFICER:

BY LETTER DATED NOVEMBER 22, 1961, YOU REQUEST ADVICE CONCERNING A PROBLEM THAT HAS ARISEN IN PROCURING EXTERIOR PAINTING AND REPAIRS FOR THE GOVERNMENT-OWNED WAVERLY PROPERTIES AT WAVERLY, OHIO.

POINTING OUT THAT THE ONLY CLASSIFICATION FOR PAINTERS LISTED IN THE WAGE SCHEDULE OBTAINED FROM THE DEPARTMENT OF LABOR AND INCLUDED IN THE ADVERTISED SPECIFICATIONS (INVITATION NO. 5736) WAS DESIGNATED "COMMERCIAL" AND CARRIED A WAGE RATE OF $3.40 PER HOUR, YOU REPORT THAT---

"THREE BIDS WERE RECEIVED AS FOLLOWS:

"NO. 1 - $ 9,480.00

NO. 2 - 9,672.00

NO. 3 - 11,904.00

"BIDDER NO. 2 ENCLOSED A STATEMENT WITH HIS BID WHICH READS,

" "IN THE ABOVE INVITATION THE WAGE RATE IS LISTED AT $3.40 PER HOUR. THE LOCAL UNION RATE FOR HOUSE PAINTING IS $3.00 PER HOUR.

"OUR ALTERNATE BID FOR THIS PROJECT BASED ON THE $3.00 PER HOUR WAGE RATE WOULD BE $9,152.00 INSTEAD OF THE BID OF $9,672.00 BASED ON THE $3.40 PER HOUR SCALE AS ADVERTISED.

"I WISH TO CALL THIS TO YOUR ATTENTION THINKING THAT POSSIBLY SOMEONE MADE AN ERROR IN FILLING OUT THE WAGE RATE TABLE.'

"BECAUSE OF BIDDER NUMBER TWO'S STATEMENT, WE REQUESTED THE DEPARTMENT OF LABOR INFORMALLY TO VERIFY THE RATE. UPON BEING INFORMED THAT THE $3.40 RATE WAS CORRECT, WE AWARDED THE CONTRACT TO BIDDER NO. 1. A SHORT TIME LATER, BIDDER NO. 1, AS THE SUCCESSFUL BIDDER, RETURNED THE FORMAL CONTRACT SIGNED BY HIM, TOGETHER WITH EVIDENCE OF INSURANCE, PERFORMANCE AND PAYMENT BONDS AS REQUIRED BY THE SPECIFICATIONS AND, A LETTER READING AS FOLLOWS.

" "IN REGARDS TO THE WAGE RATE LISTED IN YOUR RATES FOR EXTERIOR PAINTING OF THE WAVERLY PROPERTIES, YOU HAVE PAINTER BRUSH LISTED AS COMMERCIAL AT $3.40 PER HOUR.

"THIS JOB SHOULD NOT BE LISTED AS COMMERCIAL AS IT IS STRICTLY RESIDENTIAL. UNION RATES FOR RESIDENTIAL PAINTING IS $3.00 PER HOUR.

"WE IMMEDIATELY CONTACTED THE LABOR DEPARTMENT AGAIN AND WERE THEN INFORMED THAT THE CHARACTER OF THE JOB DETERMINES WHETHER PAINTERS SHALL BE PAID THE COMMERCIAL OR RESIDENTIAL RATE, THAT THE RATE FOR PAINTERS, COMMERCIAL, IN THE AREA UNDER CONSIDERATION WAS $3.40 PER HOUR AND $3.00 PER HOUR FOR PAINTERS, RESIDENTIAL. SINCE IT WAS INTENDED THAT OUR ADVERTISEMENT SHOULD COVER ONLY WORK REQUIRING THE SERVICES OF PAINTERS, RESIDENTIAL, AN ADDITIONAL CLASSIFICATION FOR SUCH DESIGNATION WAS THEN REQUESTED AND SHORTLY THEREAFTER RECEIVED. THIS LATTER DECISION SPECIFIED A RATE OF $3.00 PER HOUR FOR PAINTERS, RESIDENTIAL.

"BECAUSE THE ORIGINAL RATE DECISION HAD BEEN MADE A PART OF THE INVITATION, WE ASSUMED THE SUCCESSFUL BIDDER HAD USED THE $3.40 RATE FOR PAINTERS, COMMERCIAL, IN ARRIVING AT HIS BID FIGURE AND HE WAS ACCORDINGLY REQUESTED TO REDUCE HIS BID FIGURE TO REFLECT THE LOWER RATE OF $3.00 PER HOUR PAINTERS, RESIDENTIAL. HE REPLIED BY STATING HE HAD FIGURED THE JOB ON A BASIS OF $3.00 PER HOUR FOR PAINTERS SINCE HE KNEW THAT TO BE THE CORRECT SCALE FOR PAINTERS ON RESIDENTIAL WORK AND NO REDUCTION WAS THEREFORE IN ORDER.

"HAD WE KNOWN AT THE TIME OF AWARD WHAT WE NOW KNOW, NAMELY, THAT $3.00 WAS THE APPLICABLE RATE FOR PAINTERS ON THIS PROJECT JOB, THE AWARD WOULD HAVE BEEN MADE TO NO. 2 AS BEING THE LOWEST BIDDER INSTEAD OF TO NO. 1.'

AS INDICATED IN UNITED STATES V. BINGHAMTON CONSTRUCTION COMPANY, 347 U.S. 171, REHEARING DENIED 347 U.S. 940, THE SPECIFICATION OF PREVAILING MINIMUM WAGE RATES BY THE DEPARTMENT OF LABOR PURSUANT TO THE DAVIS-BACON ACT, 40 U.S.C. 276A, MAY NOT BE RELIED UPON BY SUCCESSFUL BIDDERS TO GOVERN THE WAGES AT WHICH THEY CAN HIRE WORKERS. NOR ARE THE CLASSIFICATIONS OF WORK LISTED IN THE PERTINENT SCHEDULES AND INCLUDED IN ADVERTISED SPECIFICATIONS NECESSARILY THOSE WHICH MUST BE USED IN PERFORMING THE WORK. SUCH SCHEDULES CONTAIN WORK CLASSIFICATIONS AND APPLICABLE RATES FOR TYPES OF WORK USUALLY INVOLVED BUT, BECAUSE DESIGNED FOR BROADER COVERAGE THAN A SINGLE CONTRACT, OFTEN INCLUDE UNNECESSARY CLASSIFICATIONS AND SOMETIMES FAIL TO INCLUDE ESSENTIAL ONES. THE CONTRACT TERMS CONTEMPLATE THAT LABORERS AND MECHANICS WHO PERFORM WORK NOT COVERED BY AN APPROPRIATE CLASSIFICATION SHALL BE CLASSIFIED BY AGREEMENT BETWEEN THE CONTRACTING OFFICER AND THE CONTRACTOR OR, IN THE EVENT OF DISAGREEMENT, THROUGH APPEAL PROCEDURES. THUS, THE LISTING OF A SINGLE "COMMERCIAL" CLASSIFICATION FOR PAINTERS DID NOT DESCRIBE THE PAINTING TO BE DONE AS ,COMMERCIAL" OR REQUIRE THAT "COMMERCIAL" PAINTERS BE EMPLOYED.

IT APPEARS FROM THE FACTS REPORTED THAT EACH OF THE TWO LOW BIDDERS RESPONDED TO THE INVITATION IN THE LIGHT OF SUCH AN UNDERSTANDING. NO. 1 BASED ITS QUOTATION UPON USING PAINTERS IN A ,RESIDENTIAL" CLASSIFICATION, ESTIMATING THAT A RATE OF $3 WOULD BE ESTABLISHED THEREFOR. NO. 2 APPARENTLY REACHED THE SAME CONCLUSION BUT SUBMITTED ITS LOW BID AS AN ALTERNATE TO PROTECT ITSELF AGAINST ANY POSSIBILITY THAT THE WORK MIGHT BE RULED TO BE COMMERCIAL. APART FROM THE UNFORTUNATE INSUFFICIENCY OF THE SCHEDULE OBTAINED FROM THE DEPARTMENT OF LABOR, BIDDER NO. 2 PRESUMABLY ADDED TO THE CONFUSION BY INCORRECTLY DESIGNATING ITS REGULAR BID AN ALTERNATE BID.

IN THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE ALTERNATE QUOTATION OF BIDDER NO. 2 WAS THE LOWEST RECEIVED FOR THE WORK ADVERTISED AND THAT THE AWARD TO NO. 1 WAS ERRONEOUS AND INVALID. SINCE PERFORMANCE OF WORK HAS NOT YET BEEN AUTHORIZED, THE INVALID AWARD SHOULD BE CANCELED AND A CONTRACT ENTERED INTO WITH NO. 2, THE ACTUAL LOW BIDDER. IT SEEMS UNLIKELY THAT EXPENSES INCURRED UNDER THE CANCELED AWARD WILL BE MORE THAN NOMINAL AFTER REFUNDS ARE OBTAINED OF PREMIUMS PAID FOR BONDS AND INSURANCE PREPARATORY TO EXECUTING A FORMAL CONTRACT. IN ANY EVENT, IT WOULD APPEAR TO BE WELL ESTABLISHED THAT SUCH EXPENSES, IF INCURRED PREPARATORY TO PERFORMANCE OF AN AWARD WHICH IS WITHDRAWN BECAUSE NOT MADE IN ACCORDANCE WITH CONTROLLING PROCUREMENT STATUTES REQUIRING AWARD TO THE LOW RESPONSIBLE BIDDER, ARE NOT RECOVERABLE FROM THE UNITED STATES UNLESS PERFORMANCE HAS RESULTED IN THE RECEIPT OF TANGIBLE BENEFITS. SEE 40 COMP. GEN. 447 AND CASES CITED THEREIN.