B-149345, JUL. 12, 1962

B-149345: Jul 12, 1962

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MIZE: REFERENCE IS MADE TO YOUR LETTER OF JUNE 29. A QUESTION IS ALSO RAISED IN YOUR LETTER AS TO THE PROPRIETY OF DISREGARDING TELEGRAPHIC BID MODIFICATIONS OF TWO BIDDERS WHICH WERE RECEIVED AFTER THE TIME SET FOR PUBLIC OPENING OF BIDS. BIDS WERE REQUESTED IN THE FORM OF PROPOSALS NOS. 1. IT WAS PROVIDED IN THE INVITATION THAT BIDS WOULD BE RECEIVED UNTIL JUNE 21. THE INSTRUCTIONS TO BIDDERS PERMITTED MODIFICATIONS OF BIDS ALREADY SUBMITTED IF SUCH MODIFICATIONS WERE RECEIVED BY THE TIME SET FOR OPENING OF BIDS. PROVISION WAS MADE FOR THE CONSIDERATION OF LATE BIDS AND MODIFICATIONS OR WITHDRAWALS WHEN SUBMITTED BY MAIL OR BY TELEGRAPH AND IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO EITHER (1) DELAY IN THE MAILS OR BY THE TELEGRAPH COMPANY OR (2) MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION.

B-149345, JUL. 12, 1962

TO MR. RALPH W. MIZE:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 29, 1962, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER RELIEF MAY BE GRANTED TO TWO BIDDERS IN RESPECT TO INVITATION FOR BIDS NO. BIA-0150-62-68, ISSUED MAY 11, 1962, COVERING THE PROPOSED CONSTRUCTION OF SCHOOL FACILITIES AT RIVERSIDE, ANADARKO, OKLAHOMA, AND FORT SILL, LAWTON, OKLAHOMA, PROJECTS NOS. BU 206- 722 AND BU 206-712. A QUESTION IS ALSO RAISED IN YOUR LETTER AS TO THE PROPRIETY OF DISREGARDING TELEGRAPHIC BID MODIFICATIONS OF TWO BIDDERS WHICH WERE RECEIVED AFTER THE TIME SET FOR PUBLIC OPENING OF BIDS.

BIDS WERE REQUESTED IN THE FORM OF PROPOSALS NOS. 1, 2 AND 3 FOR CONSTRUCTION AT EACH SITE AND FOR PERFORMANCE OF ALL THE REQUIRED WORK AT BOTH SITES. IT WAS PROVIDED IN THE INVITATION THAT BIDS WOULD BE RECEIVED UNTIL JUNE 21, 1962, AT 3:00 P.M; MST, AND THE PUBLICLY OPENED. THE INSTRUCTIONS TO BIDDERS PERMITTED MODIFICATIONS OF BIDS ALREADY SUBMITTED IF SUCH MODIFICATIONS WERE RECEIVED BY THE TIME SET FOR OPENING OF BIDS, BUT PERMITTED TELEGRAPHIC MODIFICATIONS TO BE MADE ONLY IF THEY DID NOT REVEAL THE AMOUNT OF THE ORIGINAL OR REVISED BIDS. UNDER PARAGRAPH 7 OF THE INSTRUCTIONS TO BIDDERS, PROVISION WAS MADE FOR THE CONSIDERATION OF LATE BIDS AND MODIFICATIONS OR WITHDRAWALS WHEN SUBMITTED BY MAIL OR BY TELEGRAPH AND IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO EITHER (1) DELAY IN THE MAILS OR BY THE TELEGRAPH COMPANY OR (2) MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION. ALSO, PARAGRAPH 7 PROVIDES THAT: "A MODIFICATION WHICH IS RECEIVED FROM AN OTHERWISE SUCCESSFUL BIDDER AND WHICH MAKES THE TERMS OF THE BID MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME IT IS RECEIVED AND MAY THEREAFTER BE ACCEPTED.'

SEVEN OF THE EIGHT BIDDERS MODIFIED THEIR BIDS BY TELEGRAMS, FIVE OF WHICH WERE RECEIVED PRIOR TO 3:00 P.M; MST, JUNE 21, 1962. TWO OF THE TELEGRAPHIC MODIFICATIONS WERE NOT RECEIVED UNTIL :04 P.M; MST, AND 3:30 P.M; MST, ON THE SAME DAY. ONE OF THE LATE TELEGRAPHIC BID MODIFICATIONS WAS SENT BY THE GILL CONSTRUCTION COMPANY, OKLAHOMA CITY, OKLAHOMA, AND THE OTHER LATE TELEGRAPHIC BID MODIFICATION WAS SENT BY CLYDE BURTON AND SON CONSTRUCTION COMPANY, INC; ARDMORE, OKLAHOMA.

THE GOVERNMENT'S COST ESTIMATES WERE $293,787 FOR PROPOSAL NO. 1, $162,178 FOR PROPOSAL NO. 2 AND $441,740 FOR PROPOSAL NO. 3. THE LOW BID ON PROPOSAL NO. 1 IN THE AMOUNT OF $300,000 WAS SUBMITTED BY THE GILL CONSTRUCTION COMPANY. HOWEVER, IT SUBMITTED THE HIGHEST BID ON PROPOSAL NO. 2 IN THE AMOUNT OF $500,000 AND ITS QUOTED PRICE ON PROPOSAL NO. 3 WAS IN THE AMOUNT OF $800,000. BY TELEGRAM OF JUNE 21, 1962, IT ATTEMPTED TO INCREASE ITS BID PRICE ON PROPOSAL NO. 1 TO $368,576 AND TO DECREASE THE BID PRICES ON PROPOSALS NOS. 2 AND 3 TO THE RESPECTIVE AMOUNTS OF $193,242 AND $553,750. THE ORIGINALLY QUOTED PRICES OF CLYDE BURTON AND SON CONSTRUCTION COMPANY, INC; WERE $430,780, $212,000 AND $642,780 AND BY TELEGRAM OF JUNE 21, 1962, IT ATTEMPTED TO DECREASE THESE BID PRICES TO THE AMOUNTS OF $352,002.72, $180,136.95 AND $532,139.

EXCEPT FOR THE PRICE OF $300,000, ORIGINALLY QUOTED BY THE GILL CONSTRUCTION COMPANY ON PROPOSAL NO. 1, THE MUNGER EMMONS CONSTRUCTION COMPANY, ENID, OKLAHOMA, QUOTED THE LOWEST PRICES ON ALL THREE PROPOSALS, WHICH WERE: $350,000 ON PROPOSAL NO. 1, $150,000 ON PROPOSAL NO. 2 AND $500,000 ON PROPOSAL NO. 3. THE NEXT LOWEST BIDS ON THE THREE PROPOSALS, WITHOUT CONSIDERATION OF THE AMENDED PRICES OF THE BIDDERS WHO SUBMITTED LATE TELEGRAPHIC BID MODIFICATIONS, WERE IN THE AMOUNTS OF $378,998.38, $186,940 AND $574,189.22.

THE MUNGER EMMONS CONSTRUCTION COMPANY MADE NO ATTEMPT TO CHANGE ITS BID PRICES PRIOR TO THE TIME SET FOR BID OPENING. AN EXAMINATION OF THE ORIGINAL BIDS AND THE TELEGRAPHIC MODIFICATIONS SUBMITTED BY THE OTHER SEVEN BIDDERS REVEALED THAT THEY APPARENTLY FOLLOWED THE PRACTICE OF SUBMITTING TENTATIVE PRICES WITH THE EXPECTATION OF LATER MODIFYING THE BIDS BY TELEGRAM. IN THE CASE OF THE GILL CONSTRUCTION COMPANY, IT HAS BEEN INDICATED THAT THE AMOUNTS ORIGINALLY QUOTED ON PROPOSALS NOS. 1 AND 2 WERE INADVERTENTLY REVERSED, AS HAS BEEN CONTENDED BY THAT BIDDER. HAS, THEREFORE, REQUESTED PERMISSION TO WITHDRAW ITS BID UNLESS THE GOVERNMENT SHOULD ELECT TO ACCEPT ANY PART OR ALL OF ITS BID AS MODIFIED BY THE LATE TELEGRAM. THE MUNGER EMMONS CONSTRUCTION COMPANY HAS ALSO ALLEGED THAT MISTAKES WERE MADE IN ITS PRICES ON PROPOSALS NOS. 2 AND 3 DUE TO AN ERRONEOUS ENTRY IN THE COMPANY'S RECAPITULATION WORKSHEET WHICH SHOWS $3,462 AS THE COST OF CERTAIN SUBCONTRACT WORK INSTEAD OF THE SUM OF $34,628 INCLUDED IN A QUOTATION RECEIVED BY THE BIDDER FROM THE PROPOSED SUBCONTRACTOR. THE MUNGER EMMONS CONSTRUCTION COMPANY REQUESTED PERMISSION TO WITHDRAW ITS BIDS ON PROPOSALS NOS. 2 AND 3 UNLESS THE BID PRICES WERE ALLOWED TO BE CORRECTED BY ADDING THE SUM OF $31,166 TO THE ORIGINAL BID PRICES. THESE CORRECTIONS WOULD HAVE THE EFFECT OF INCREASING THAT BIDDER'S PRICES ON PROPOSALS NOS. 2 AND 3 TO THE AMOUNTS OF $181,166 AND $531,166. YOU SUGGEST THAT BOTH OF THESE BIDDERS SHOULD BE GRANTED RELIEF IN THE MATTER AND WE AGREE THAT THE EVIDENCE OF THE CASE IS SUFFICIENT TO WARRANT THE GRANTING OF RELIEF. THE QUESTION ARISES, HOWEVER, AS TO WHETHER IT WOULD BE FAIR TO THE OTHER BIDDERS TO ALLOW A CORRECTION IN THE BID OF THE MUNGER EMMONS CONSTRUCTION COMPANY FOR BID EVALUATION AND AWARD PURPOSES.

YOU STATE THAT THE MUNGER EMMONS' PRESENTATION FAILS TO SHOW WHETHER OR HOW THE ADDITIVES AT THE END OF THE BID PAPER, THAT IS, ITS RECAPITULATION SHEET, WOULD HAVE BEEN AFFECTED, AND IT IS NOT APPARENT FROM AN EXAMINATION OF THE SHEET ITSELF. YOU REFER TO THE FACT THAT PROFIT IS INDICATED AS HAVING BEEN COMPUTED AT 8 PERCENT OF COSTS, BUT NO EFFECT IS GIVEN TO THIS IN THE ABOVE ALLEGEDLY CORRECT BID AMOUNTS. YOU ALSO REFER TO THE FACT THAT THE FINAL BID AMOUNT ON PROPOSAL NO. 2 WAS ARRIVED AT BY A ROUNDING OFF OF FIGURES, LEAVING IT OPEN TO SOME SPECULATION AS TO PRECISELY WHAT THE AMOUNT OF THE BID WOULD HAVE BEEN EXCEPT FOR THE ALLEGED MISTAKE.

OUR OFFICE HAS TAKEN THE POSITION THAT, TO JUSTIFY CORRECTION OF A BID, THE BIDDER MUST ESTABLISH BY CLEAR AND CONVINCING EVIDENCE THE MANNER IN WHICH THE MISTAKE OCCURRED AND THE PRICE WHICH WAS INTENDED AND WOULD HAVE BEEN SUBMITTED IN THE ABSENCE OF ERROR. SEE 35 COMP. GEN. 279. CONSISTENT WITH SUCH RULE, AS RECOGNIZED BY YOU, WE AGREE THAT THE MUNGER EMMONS' BIDS ON PROPOSALS NOS. 2 AND 3 MAY NOT BE CORRECTED. HOWEVER, THIS WOULD NOT, OF COURSE, PREVENT THE CONSIDERATION OF ITS BID ON PROPOSAL NO. 1 AS TO WHICH NO ERROR HAS BEEN ALLEGED.

WE BELIEVE THAT A PROPER DISTINCTION HAS BEEN MADE BY YOUR OFFICE BETWEEN A SITUATION WHERE IT IS NOT CLEARLY DEMONSTRATED THAT THE TIME FOR TRANSMISSION OF A LATE TELEGRAPHIC OFFER OR BID MODIFICATION IS EXCESSIVE AS COMPARED WITH THE TIME WHICH DELIVERY WOULD ORDINARILY BE ACCOMPLISHED UNDER NORMAL TRANSMISSION PROCEDURE AND ONE WHERE IT MAY HAVE BEEN POSSIBLE FOR THE TELEGRAPH COMPANY TO EXPEDITE DELIVERY FOR THE SENDER'S CONVENIENCE. YOUR INVESTIGATION OF THE LATE TELEGRAPHIC BID MODIFICATIONS HAS FAILED TO INDICATE THAT UNDER NORMAL CIRCUMSTANCES THE TRANSMISSION TIME WOULD BE LESS THAN ONE HOUR AND WE NOTE THAT EACH OF THE TELEGRAMS WAS FILED AT THE POINT OF DISPATCH ONLY 55 OR 57 MINUTES BEFORE THE SCHEDULED TIME FOR OPENING OF BIDS. WE THEREFORE AGREE THAT SUCH TELEGRAPHIC BID MODIFICATIONS SHOULD BE DISREGARDED IN THE MAKING OF AWARDS UNDER THE INVITATION.

THE BIDDING DOCUMENTS AND OTHER PAPERS FORWARDED WITH YOUR LETTER ARE RETURNED HEREWITH.