B-148009, FEB. 6, 1962

B-148009: Feb 6, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DEPARTMENT OF THE INTERIOR: REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 18 AND 22. TEN BIDS WERE RECEIVED. THE SECOND LOW BID WAS SUBMITTED BY STATEWIDE CONTRACTORS. WAS IN THE AMOUNT OF $615. THE GOVERNMENT ENGINEER'S ESTIMATE WAS $687. IT IS REPORTED THAT THE INVITATION SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO AMEND THE SPECIFICATIONS PRIOR TO THE OPENING OF BIDS AND THAT SUCH AMENDMENTS WOULD BE ANNOUNCED BY SUPPLEMENTAL NOTICE TO PROSPECTIVE BIDDERS AND THAT THEY MUST BE SIGNED AND SUBMITTED WITH THE BID. PARAGRAPH ONE OF WHICH REQUIRED THAT THERE BE PAID "WAGE RATES NOT LESS THAN THOSE CONTAINED IN THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR WHICH IS ATTACHED HERETO AND MADE A PART HEREOF.'.

B-148009, FEB. 6, 1962

TO MR. GRANT BLOODGOOD, ASSISTANT COMMISSIONER AND CHIEF ENGINEER, BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 18 AND 22, 1962,REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH REGARD TO THE BID OF GIBBONS AND REED COMPANY SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. DC- 5703.

THE INVITATION REQUESTED BIDS--- TO BE OPENED DECEMBER 19, 1961--- FOR THE CONSTRUCTION OF EARTHWORK, PIPELINES AND STRUCTURES FOR WOODS CROSS LATERALS, PART 2, WOODS CROSS LATERAL SYSTEM, WEBER BASIN PROJECT, UTAH. TEN BIDS WERE RECEIVED. THE TOTALS OF THE BIDS--- AFTER CORRECTION OF MATHEMATICAL ERRORS--- RANGED FROM A LOW OF$612,765.60 SUBMITTED BY GIBBONS AND REED COMPANY TO A HIGH OF $785,077.50. THE SECOND LOW BID WAS SUBMITTED BY STATEWIDE CONTRACTORS, INC., AND WAS IN THE AMOUNT OF $615,830.75. THE GOVERNMENT ENGINEER'S ESTIMATE WAS $687,571.

IT IS REPORTED THAT THE INVITATION SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO AMEND THE SPECIFICATIONS PRIOR TO THE OPENING OF BIDS AND THAT SUCH AMENDMENTS WOULD BE ANNOUNCED BY SUPPLEMENTAL NOTICE TO PROSPECTIVE BIDDERS AND THAT THEY MUST BE SIGNED AND SUBMITTED WITH THE BID. THE SPECIFICATIONS INCLUDED STANDARD FORM 19 A (JANUARY 1959 EDITION), PARAGRAPH ONE OF WHICH REQUIRED THAT THERE BE PAID "WAGE RATES NOT LESS THAN THOSE CONTAINED IN THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR WHICH IS ATTACHED HERETO AND MADE A PART HEREOF.' PARAGRAPH 13 OF SPECIAL CONDITIONS PERTAINING TO RATES OF WAGES REQUIRED TO BE PAID CONTAINED A STATEMENT THAT THE "CLASSIFICATIONS AND WAGE RATES WILL BE FURNISHED BY SUPPLEMENTAL NOTICE BEFORE BIDS ARE OPENED.' SUPPLEMENTAL NOTICE NO. 2 WAS ISSUED ON DECEMBER 11, 1961. IT SET FORTH (1) THE APPLICABLE LABOR CLASSIFICATIONS AND MINIMUM HOURLY WAGE RATES BASED ON THE SECRETARY OF LABOR'S DECISION (NO. AA-10,789, DATED 11-28- 61); (2) INCREASED FROM $100,000 TO $250,000 AS THE AMOUNT OF PUBLIC LIABILITY INSURANCE FOR EACH PERSON TO BE FURNISHED BY THE CONTRACTOR FOR THE DENVER AND RIO GRANDE WESTERN RAILROAD COMPANY, AND FROM $200,000 TO $250,000 THE AMOUNT OF PROPERTY DAMAGE INSURANCE ON ACCOUNT OF EACH ACCIDENT, TO BE FURNISHED TO THAT COMPANY; AND (3) MADE CHANGES IN THE SPECIFICATIONS. AS TO THE CHANGES IN THE SPECIFICATIONS YOU STATE THAT, IN YOUR OPINION, THEY WERE MINOR AND SHOULD NOT HAVE MADE ANY DIFFERENCE IN THE BIDDER'S COSTS OR THE QUOTED PRICES.

THE BID OF GIBBONS WHICH WAS ON STANDARD FORM 21 (JANUARY 1961 EDITION) AND DATED DECEMBER 19, 1961, WAS HAND DELIVERED BY ITS REPRESENTATIVE, MR. WARREN SENN, AND WAS NOT ACCOMPANIED BY SUPPLEMENTAL NOTICE NO. 2 NOR DID IT CONTAIN ANY ACKNOWLEDGMENT OF ITS RECEIPT BY THE BIDDER. ABOUT FIVE MINUTES PRIOR TO THE BID OPENING AND IN THE PRESENCE OF MR. SENN, YOUR OGDEN RESIDENT ENGINEER ANNOUNCED THAT BOTH SUPPLEMENTAL NOTICES MUST ACCOMPANY EACH BID TO MAKE IT COMPLETE AND THAT THE FORMS WERE AVAILABLE FOR ANYBODY NEEDING THEM. MR. SENN TOOK NO ACTION ON THIS MATTER EITHER THEN OR FOLLOWING YOUR OFFICIAL ANNOUNCEMENT UPON THE OPENING OF THE GIBBONS BID THAT ONLY SUPPLEMENTAL NOTICE NO. 1 HAD BEEN PRESENTED. HOWEVER, DUE TO ERRORS IN THE GIBBONS BID WITH RESPECT TO THE EXTENDED AMOUNT FOR ITEM 63 OF THE SCHEDULE AND TO THE TOTAL FOR THE SCHEDULE, IT THEN APPEARED THAT STATEWIDE RATHER THAN GIBBONS WAS THE LOW BIDDER. THE FOLLOWING DAY, OR ON DECEMBER 20, ONE RONALD JONES OF THE GIBBONS FIRM STATED TO YOUR OGDEN OFFICE ENGINEER BY TELEPHONE THAT HIS COMPANY HAD NEVER RECEIVED SUPPLEMENTAL NOTICE NO. 2, THAT MR. SENN HAD NOT BEEN SUFFICIENTLY FAMILIAR WITH THE BID TO CORRECT THE IRREGULARITY PRIOR TO THE BID OPENING, AND THAT CONSIDERATION OF THE NOTICE WOULD NOT HAVE INFLUENCED THE BID. AFTER MR. JONES WAS INFORMED THAT, UPON THE CORRECTION OF ERRORS IN THE GIBBONS BID, IT WAS THE LOWEST BID RECEIVED, HE STATED THAT HE WOULD OBTAIN THE MISSING SUPPLEMENTAL NOTICE FROM YOUR REGIONAL OFFICE AND SUBMIT IT WITH A LETTER OF EXPLANATION. THE LETTER OF EXPLANATION DATED DECEMBER 20, 1961, WAS RECEIVED BY YOUR OGDEN OFFICE ON DECEMBER 21. THAT LETTER AFFIRMS THE STATEMENTS OF MR. JONES AND IS IN PERTINENT PART AS FOLLOWS:

"IN REVIEWING SUPPLEMENTAL NOTICE NO. 2, WE FIND NOTHING IN IT WHICH WOULD CHANGE OUR BID IN ANY WAY. IN REGARDS TO THE INSURANCE COVERAGES, THESE ARE ONLY STANDARD LIMITS AND WERE INCLUDED IN OUR BID. THE LABOR RATE SCHEDULE REFLECTS RATES WHICH ARE EITHER PRESENTLY IN OUR CONTRACTS WITH THE UNIONS OR ARE BELOW THOSE BEING PAID. THE DRAWING FOR THE PRESSURE REDUCING VALUE STRUCTURE DO NOT CHANGE, BUT MERELY CLARIFY THE WORK INVOLVED.'

ON DECEMBER 21, 1961, STATEWIDE ADDRESSED A LETTER TO YOUR OFFICE AND ADVISED YOU THAT IT CONSIDERED ANY ACCEPTANCE OF GIBBONS INCOMPLETE BID TO BE IMPROPER BECAUSE OF ITS FAILURE TO INCLUDE "ONE OF THE ITEMS WHICH ASSUREDLY INVOLVED AN INCREASE IN COST.'

WE HAVE HELD THAT WHERE AN AMENDMENT TO AN INVITATION DOES NOT AS A PRACTICAL MATTER AFFECT THE COST OF THE WORK OR ANY OTHER MATERIAL TERM OF THE CONTRACT FAILURE TO ACKNOWLEDGE RECEIPT OF THAT AMENDMENT MAY BE TREATED AS AN INFORMALITY AND MAY BE WAIVED FOR THE PURPOSES OF AWARD. SEE 34 COMP. GEN. 581. ON THE OTHER HAND, IF AN AMENDMENT AFFECTS THE COST OF THE WORK, FAILURE TO ACKNOWLEDGE THAT AMENDMENT CANNOT BE WAIVED. SEE 37 COMP. GEN. 785. YOUR LETTER DOES NOT INDICATE WHETHER THE AMENDMENT HERE INVOLVED (SUPPLEMENTAL NOTICE NO. 2) WOULD AFFECT THE COST OF THE WORK. THE LOW BIDDER (GIBBONS) PURPORTS TO SHOW THAT THE AMENDMENT DID NOT AFFECT THE AMOUNT OF ITS BID. THE SECOND LOW BIDDER CONTENDS OTHERWISE. IN OUR OPINION THE INCREASE IN THE INSURANCE COVERAGE REQUIRED BY SUPPLEMENTAL NOTICE NO. 2 WAS A FACTOR NORMALLY BEARING UPON THE PRICE OR COST OF THE WORK. WHILE GIBBONS HAS SUBMITTED EVIDENCE AFTER THE BIDS WERE OPENED INDICATING THAT ITS BID WAS NOT AFFECTED BY THE CHANGE IN THE INSURANCE COVERAGE, NEVERTHELESS, GIBBONS WAS LEFT WITH THE ALTERNATIVE, AFTER OPENING OF BIDS TO BECOME ELIGIBLE FOR THE AWARD BY AGREEING TO ABIDE BY THE PROVISIONS OF THE INVITATION AS AMENDED, OR TO PRECLUDE AWARD TO IT BY ALLEGING NON-RECEIPT OF SUPPLEMENTAL NOTICE NO. 2. IN SUCH AN EVENT GIBBONS WOULD OBTAIN A DISTINCT ADVANTAGE OVER OTHER BIDDERS WHOSE BIDS CONFORMED IN EVERY WAY TO THE INVITATION. SUCH ADVANTAGE WOULD BE CONTRARY TO THE PURPOSE OF THE STATUTES GOVERNING PUBLIC PROCUREMENT.

ACCORDINGLY, THE BID OF GIBBONS SHOULD BE DISREGARDED IN MAKING AWARD.