B-149798, SEP. 7, 1962

B-149798: Sep 7, 1962

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BUREAU OF RECLAMATION: REFERENCE IS MADE TO LETTER D-150 OF AUGUST 21. IN THE PLACES IN THE BIDDING SCHEDULE WHERE BIDDERS WERE REQUESTED TO INDICATE THE PRICE OF THE GATE VALVES WITH INCLUDED EQUIPMENT. THE ENGINEER'S ESTIMATE WAS $28. 337 PRICE WAS SUBSTANTIALLY BELOW THE OTHER BIDS AND THE ENGINEER'S ESTIMATE. THE LOW BIDDER WAS REQUESTED TO CHECK ITS BID COMPUTATIONS. ONE OF THE NOTARIZED ESTIMATE SHEETS ATTACHED TO THE LETTER IS A $3. 100 ESTIMATE FROM THE PATTERN MAKER DATED TWO DAYS BEFORE THE BID WAS MAILED. THE PRINCIPAL ESTIMATE SHEET UPON WHICH THE LABOR AND MATERIAL COSTS WERE ITEMIZED TOTALS UP TO $19. 100 FIGURE WAS INCLUDED IN THE TOTAL. THE BIDDER STATED THAT THE BID SHOULD HAVE BEEN $22.

B-149798, SEP. 7, 1962

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

REFERENCE IS MADE TO LETTER D-150 OF AUGUST 21, 1962, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH REGARD TO THE BID OF CHARLES C. STEWARD MACHINE COMPANY SUBMITTED IN RESPONSE TO INVITATION DS-5807 THAT SOLICITED BIDS FOR FURNISHING HIGH-PRESSURE GATE VALVES, HYDRAULIC HOISTS AND A SEMIAUTOMATIC GATE HANGER.

IN THE PLACES IN THE BIDDING SCHEDULE WHERE BIDDERS WERE REQUESTED TO INDICATE THE PRICE OF THE GATE VALVES WITH INCLUDED EQUIPMENT, THE PERFORMANCE BOND PREMIUM, AND THE TOTAL BID "INCLUDING PERFORMANCE BOND PREMIUM," THE BIDDER TYPED $19,298, $39 AND $19,337, RESPECTIVELY. THE SECOND LOW BID TOTALED $24,170. THE NEXT THREE BIDS RANGED FROM A TOTAL OF $26,783 TO $40,330. THE ENGINEER'S ESTIMATE WAS $28,000.

AS THE $19,337 PRICE WAS SUBSTANTIALLY BELOW THE OTHER BIDS AND THE ENGINEER'S ESTIMATE, THE LOW BIDDER WAS REQUESTED TO CHECK ITS BID COMPUTATIONS. THE BIDDER REPLIED IN A NOTARIZED LETTER, ACCOMPANIED BY NOTARIZED ESTIMATE SHEETS, THAT INADVERTENTLY IT HAD OMITTED A $3,100 ESTIMATE IT HAD RECEIVED FROM A PATTERN MAKER FOR FABRICATING THE PATTERNS THAT WOULD BE USED IN MANUFACTURING THE ARTICLES. ONE OF THE NOTARIZED ESTIMATE SHEETS ATTACHED TO THE LETTER IS A $3,100 ESTIMATE FROM THE PATTERN MAKER DATED TWO DAYS BEFORE THE BID WAS MAILED. THE PRINCIPAL ESTIMATE SHEET UPON WHICH THE LABOR AND MATERIAL COSTS WERE ITEMIZED TOTALS UP TO $19,298. THE ESTIMATE SHEET DOES NOT SHOW THAT THE $3,100 FIGURE WAS INCLUDED IN THE TOTAL.

IN THE LETTER REQUESTING BID CORRECTION, THE BIDDER STATED THAT THE BID SHOULD HAVE BEEN $22,398 AND REQUESTED AWARD OF "THIS CONTRACT TO US AT THE HIGHER FIGURE AS THIS FIGURE DOES NOT INCLUDE ANY PROFIT ON THE PATTERNS.' IN VIEW OF THE DIFFERENCE BETWEEN THE LOW BID AND THE NEXT LOW BID, EVEN IF $3,100 IS ADDED TO THE LOW BID, THE ADDITION OF REGULAR PROFIT (APPROXIMATELY 40 PERCENT AS INDICATED ON THE ESTIMATE SHEET) ON THE PATTERNS WOULD NOT DISPLACE THE LOW BIDDER IN THE STANDING OF BIDDERS. IN THESE CIRCUMSTANCES, IT IS PERMISSIBLE TO ALLOW THE BIDDER TO FOREGO A CHARGE FOR PROFIT IN THE CORRECTION OF ITS BID.

THE BIDDER'S STATEMENT THAT THE CORRECT BID SHOULD BE $22,398 MAY STEM FROM THE ADDITION OF $3,100 TO THE $19,298 BASIC BID AMOUNT SHOWN ON THE BIDDING SCHEDULE OR TO THE $19,298 TOTAL ON THE BIDDER'S OWN ESTIMATE SHEET AND THEREFORE IT MAY NOT REFLECT CONSIDERATION OF THE $39 BOND PREMIUM SHOWN ON THE BIDDING SCHEDULE AND INCLUDED IN THE BIDDER'S ORIGINAL TOTAL BID PRICE OF $19,337. FOR THAT REASON, ADDITIONAL CONFIRMATION SHOULD BE OBTAINED FROM THE BIDDER AS TO WHETHER ITS TOTAL BID AS CORRECTED SHOULD BE $22,398 OR $22,437. THEN YOU ARE AUTHORIZED TO MAKE AN AWARD TO THE BIDDER UPON WHICHEVER OF THESE TWO PRICES THE BIDDER AGREES TO PERFORM.

THE PAPERS THAT YOU REQUESTED TO BE RETURNED ARE ENCLOSED. ALSO, AS REQUESTED, A COPY OF THIS DECISION HAS BEEN SENT TO THE COMMISSIONER OF THE BUREAU OF RECLAMATION.