B-148120, FEB. 27, 1962

B-148120: Feb 27, 1962

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IS ENTITLED TO PAYMENT OF AN ADDITIONAL AMOUNT UNDER ITS CONTRACT NO. THREE BIDS FOR THE ABOVE WORK WERE RECEIVED AND OPENED. THEY WERE AS FOLLOWS: LAWSON SHEET METAL. 353 AWARD WAS MADE TO LAWSON ON NOVEMBER 7. ARMSTRONG DID NOT INTENT TO INSULATE THE DUCT WORK WHICH WAS TO BE PLACED IN AIR-CONDITIONED SPACES. THIS REQUEST WAS DENIED BY THE CONTRACTING OFFICER ON MAY 26. THE CORPORATION STATED THAT THE COST OF THE ADDITIONAL INSULATION WAS $29. THE CONTRACTING OFFICER HAS STATED THAT SINCE THE SECOND LOW BID WAS ALSO CONSIDERABLY LESS THAN THE OFFICIAL ESTIMATE OF $500. HE FURTHER STATES THAT SINCE IT IS PROBABLE THAT HE SHOULD HAVE BEEN AWARE OF A POSSIBLE ERROR. HE SHOULD BE CHARGED WITH CONSTRUCTIVE NOTICE THAT THERE WAS A MISTAKE IN LAWSON'S BID.

B-148120, FEB. 27, 1962

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

YOUR LETTER OF FEBRUARY 2, 1962, REQUESTS OUR DECISION AS TO WHETHER LAWSON SHEET METAL, INC., HEREINAFTER REFERRED TO AS LAWSON, IS ENTITLED TO PAYMENT OF AN ADDITIONAL AMOUNT UNDER ITS CONTRACT NO. GS 09B-C-1006-SF FOR AIR CONDITIONING OF AN EXISTING UNITED STATES POST OFFICE AND COURTHOUSE BUILDING AT SACRAMENTO, CALIFORNIA.

ON OCTOBER 5, 1960, THREE BIDS FOR THE ABOVE WORK WERE RECEIVED AND OPENED. THEY WERE AS FOLLOWS:

LAWSON SHEET METAL, INC. $399,600

WISMER AND BECKER, CONTRACTING ENGINEERS $424,660

M. R. CARPENTER, INC. $477,353

AWARD WAS MADE TO LAWSON ON NOVEMBER 7, 1960, AT ITS BID PRICE.

SUBSEQUENTLY, IT DEVELOPED THAT THE TWO LOWEST BIDS HAD BEEN BASED IN PART ON AN ERRONEOUS QUOTATION BY THE SAME SUBCONTRACTOR, ARMSTRONG CONTRACTING AND SUPPLY CORPORATION. CONTRARY TO THE SPECIFICATIONS, ARMSTRONG DID NOT INTENT TO INSULATE THE DUCT WORK WHICH WAS TO BE PLACED IN AIR-CONDITIONED SPACES, AND THEREFORE QUOTED A PRICE OF $12,474 ONLY. THE DESIGNER OF THE SYSTEM HAD ESTIMATED THE COST FOR NONCONDUCTING COVERING AND SOUND INSULATION AS $35,000. WHEN LAWSON PROPOSED TO PLACE THE SUBCONTRACT WITH ARMSTRONG AT ITS BID PRICE, IT REFUSED TO ACCEPT THE SUBCONTRACT.

ON MARCH 27, 1961, LAWSON REQUESTED TO BE RELIEVED OF THE REQUIREMENT OF INSULATING THE EXPOSED DUCT WORK IN AIR-CONDITIONED SPACES. THIS REQUEST WAS DENIED BY THE CONTRACTING OFFICER ON MAY 26, 1961. ON JUNE 2, 1961, LAWSON APPEALED THE DECISION OF THE CONTRACTING OFFICER, AND FORMALLY REQUESTED AN ADJUSTMENT OF THE CONTRACT PRICE. THE CORPORATION STATED THAT THE COST OF THE ADDITIONAL INSULATION WAS $29,526 AND, ESTIMATING OVERHEAD AND PROFIT AT 10 PERCENT EACH, IT ASKED THAT ITS CONTRACT BE INCREASED BY THE AMOUNT OF $35,431.20.

THE CONTRACTING OFFICER HAS STATED THAT SINCE THE SECOND LOW BID WAS ALSO CONSIDERABLY LESS THAN THE OFFICIAL ESTIMATE OF $500,000, HE DID NOT GIVE THE GOVERNMENT ESTIMATE FULL WEIGHT WHEN HE AWARDED THE CONTRACT ON THE PROJECT FOR $399,600. HE FURTHER STATES THAT SINCE IT IS PROBABLE THAT HE SHOULD HAVE BEEN AWARE OF A POSSIBLE ERROR, HE SHOULD BE CHARGED WITH CONSTRUCTIVE NOTICE THAT THERE WAS A MISTAKE IN LAWSON'S BID, AND THE CONTRACT PRICE SHOULD BE INCREASED BY THE AMOUNT OF $35,431.20.

IN VIEW OF THE CONTRACTING OFFICER'S STATEMENT THAT HE FEELS THAT HE HAD CONSTRUCTIVE NOTICE OF A MISTAKE IN THE CONTRACTOR'S BID PRIOR TO AWARD, THE CONTRACTING OFFICER SHOULD HAVE REQUESTED LAWSON TO VERIFY ITS BID PRIOR TO AWARD.

ACCORDINGLY, SINCE THE CONTRACT WORK HAS BEEN COMPLETED, THE CONTRACTOR MAY BE ALLOWED THE AMOUNT OF $35,431.20 FOR PERFORMING THE WORK NOT COVERED BY ITS BID, AS SUGGESTED IN YOUR LETTER.

THE ENCLOSURES TRANSMITTED WITH YOUR LETTER ARE RETURNED AS REQUESTED.