B-148481, APR. 3, 1962

B-148481, APR. 3, 1962

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION:

MR. JAMES N. O-NEIL, DIRECTOR, SUPPLY MANAGEMENT SERVICE, HAS REQUESTED OUR DECISION ON A MISTAKE IN BID ALLEGED AFTER AWARD BY THEDUQUESNE PAINTING COMPANY (HEREINAFTER REFERRED TO AS DUQUESNE) OF PITTSBURGH, PENNSYLVANIA.

INVITATION FOR BIDS NO. 62-42 DATED JANUARY 19, 1962, AND ITS ADDENDUM OF FEBRUARY 5, 1962, SOLICITED BIDS FOR THE PAINTING OF INTERIOR AREAS IN CERTAIN WARDS AT THE VETERANS ADMINISTRATION HOSPITAL AT PITTSBURGH, PENNSYLVANIA. SEVENTEEN RESPONSIVE BIDS WERE RECEIVED, THE LOWEST OF WHICH WAS SUBMITTED BY DUQUESNE IN THE AMOUNT OF $3,595.

AT THE OPENING OF BIDS ON FEBRUARY 20, 1962, THE CONTRACTING OFFICER POINTED OUT TO DUQUESNE THAT ITS AGGREGATE BID OF $3,595 WAS LOWER THAN THE TOTAL OF THE THREE UNIT BIDS QUOTED BY IT ON THE SCHEDULE OF PRICES. THE REPRESENTATIVE OF DUQUESNE APPARENTLY DID NOT CONSIDER THIS DISCREPANCY AS AN ERROR, FOR HE STATED THAT IF THE ENTIRE PAINTING CONTRACT WAS AWARDED TO HIS FIRM IT WOULD PERFORM ON THIS CONTRACT AT THE NET PRICE OF $3,595. THE CONTRACT WAS AWARDED TO DUQUESNE AT THAT PRICE ON FEBRUARY 23, 1962.

ON MARCH 2, 1962, DUQUESNE'S REPRESENTATIVE ADVISED THE CONTRACTING OFFICER THAT HE HAD FAILED TO INCLUDE IN HIS COMPANY'S BID THE ADDITIONAL WORK REQUIRED BY THE ADDENDUM. HE STATES THAT ITS PRICE FOR DOING THE ADDITIONAL WORK WOULD BE $1,160. MR. O-NEIL ASKS WHETHER OR NOT THE INCREASE OF $1,160 MAY BE INCLUDED IN THE CONTRACT PRICE.

ALTHOUGH THE PRICES OF THE 17 RESPONSIVE BIDS RANGED FROM DUQUESNE'S LOW OF $3,595 TO A HIGH OF $10,189, WE FEEL THAT THE SIGNIFICANT PRICE DIFFERENCE BETWEEN DUQUESNE'S BID AND THE SECOND LOW BID OF $5,730 WAS SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE OF PROBABLE ERROR. THE DIFFERENCE BETWEEN THESE TWO BIDS WAS $2,135, WHEREAS THE DIFFERENCE BETWEEN ANY TWO OF THE ASCENDING PRICES OF THE OTHER 16 BIDDERS AVERAGED ONLY $412, AND WAS ONLY ONCE AS MUCH AS $847. FURTHERMORE, WE DO NOT BELIEVE THAT THE POSSIBILITY OF THIS ERROR WAS SUFFICIENTLY IMPRESSED UPON DUQUESNE BY POINTING OUT TO ITS REPRESENTATIVE THAT ITS AGGREGATE BID DIFFERED FROM THE TOTAL OF ITS THREE UNIT PRICES. IN 5 OF THE OTHER 16 BIDS, THE COST FOR THE WORK REQUIRED BY THE ADDENDUM WAS INCLUDED AS A SEPARATE AND FOURTH UNIT PRICE. TEN OTHER BIDDERS INCLUDED THAT COST IN THE FIRST OF THE THREE UNIT PRICES, WHICH FIRST UNIT PRICE RANGED FROM $2,445 TO $5,000. THE FACT THAT DUQUESNE'S FIRST UNIT PRICE WAS ONLY $1,287 STRENGTHENS OUR CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE VERIFIED THAT THE BID PRICE OF $3,595 INCLUDED THE ADDITIONAL WORK REQUIRED BY THE ADDENDUM.

HOWEVER, THE FACT THAT DUQUESNE MADE AN ERROR IN ITS BID DOES NOT ESTABLISH ANY RIGHT WHEREBY DUQUESNE CAN INCREASE ITS ORIGINAL BID PRICE. ON THE CONTRARY, IN 17 COMP. GEN. 575, 577, WE DREW THE FOLLOWING DISTINCTION IN REGARD TO INCREASING BID PRICES:

"IN THE PRESENT CASE THE BIDDER DOES NOT SEEK TO HAVE ITS BID CORRECTED SO AS TO HAVE INCLUDED THEREIN A PREVIOUSLY CALCULATED ITEM WHICH IT ACTUALLY INTENDED TO INCLUDE IN, BUT WHICH WAS INADVERTENTLY OMITTED FROM, THE AMOUNT OF ITS ORIGINAL BID, AS IN THE HIGGINS CASE. RATHER IT PROPOSES TO CHANGE AND INCREASE ITS BID BY THE AMOUNT WHICH IT NOW CONSIDERS NECESSARY TO COVER THE COST OF REQUIRED ITEMS WHICH IT OVERLOOKED IN MAKING THE BID. THE DISTINCTION IS MATERIAL. THE BASIC RULE IS, OF COURSE, THAT BIDS MAY NOT BE CHANGED AFTER THEY ARE OPENED, AND THE EXCEPTION PERMITTING A BID TO BE CORRECTED UPON SUFFICIENT FACTS ESTABLISHING THAT A BIDDER ACTUALLY INTENDED TO BID AN AMOUNT OTHER THAN SET DOWN ON THE BID FORM, WHERE THE CONTRACTING OFFICER IS ON NOTICE OF THE ERROR PRIOR TO ACCEPTANCE, DOES NOT EXTEND TO PERMITTING A BIDDER TO RECALCULATE AND CHANGE HIS BID TO INCLUDE FACTORS WHICH HE DID NOT HAVE IN MIND WHEN HIS BID WAS SUBMITTED, OR AS TO WHICH HE HAS SINCE CHANGED HIS MIND. TO PERMIT THIS WOULD REDUCE TO A MOCKERY THE PROCEDURE OF COMPETITIVE BIDDING REQUIRED BY LAW IN THE LETTING OF PUBLIC CONTRACTS. SEE A-89734, JANUARY 8, 1938, 17 COMP. GEN. 554, ALSO A-91408, DECEMBER 31, 1937, ADDRESSED TO YOU IN THE FAGEOL TRUCK AND COACH CO. CASE; A- 90611, DECEMBER 17, 1937, AND 13 OP.ATTY.GEN. 510.'

SEE, ALSO, 35 COMP. GEN. 279, 281, AND CASES CITED THEREIN.

ACCORDINGLY, YOU ARE ADVISED THAT THE SUGGESTED INCREASE IN THE ERRONEOUS BID PRICE OF DUQUESNE IS NOT AUTHORIZED. HOWEVER, SINCE IT APPEARS THAT IT WOULD BE INEQUITABLE TO HOLD THE CONTRACTOR TO ITS ORIGINAL BID THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY.