B-151840, OCT. 1, 1963

B-151840: Oct 1, 1963

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO THE LETTER DATED SEPTEMBER 6. ONE LUMP SUM BID IS REQUIRED. "ALTERNATE PRICES "ALTERNATE PRICES ARE REQUIRED STATING AMOUNT TO BE DEDUCTED FROM LUMP SUM BID FOR EACH OF THE FOLLOWING: "A. "ANY AWARD WHICH INCLUDES THE ALTERNATES WILL BE MADE ON THE BASIS OF THE LOWEST AGGREGATE BID RESULTING FROM THE AMOUNT OF THE LUMP SUM BID PLUS OR MINUS THE AMOUNT OF THE ALTERNATE OR ALTERNATES AS MAY BE ACCEPTED BY THE GOVERNMENT.'. EIGHT BIDS WERE OPENED ON SEPTEMBER 10. ON THIS BASIS THE LOWEST BID WAS THAT OF JAMES A. THE SECOND LOW BIDDER WAS SCHAEFER AND COMPANY WHOSE BID WAS $187. A CONTRACT COVERING THE PROJECT WAS SENT TO JAMES A. BEING THE AMOUNT ALLEGED TO HAVE BEEN INCLUDED IN ITS BID TO COVER THE COST OF CERTAIN RADIATOR COVERS.

B-151840, OCT. 1, 1963

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO THE LETTER DATED SEPTEMBER 6, 1963, FROM THE COMMISSIONER, PUBLIC BUILDINGS SERVICE, CONSTITUTING AN ADMINISTRATIVE REPORT ON THE CLAIM OF JAMES A. MANN, INCORPORATED, FOR $1,500 ALLEGED TO BE DUE UNDER CONTRACT NO. GS-02B-9700.

THE GENERAL SERVICES ADMINISTRATION, ON AUGUST 15, 1962, INVITED BIDS ON A TOTAL SMALL BUSINESS SET-ASIDE FOR THE CONSTRUCTION OF NEW COURT FACILITIES IN THE UNITED STATES POST OFFICE AND COURT-HOUSE AT PHILADELPHIA, PENNSYLVANIA. SECTION 2-8 OF THE SPECIAL CONDITIONS OF THE INVITATION FOR BIDS READ AS FOLLOWS:

"2-8 BIDS:

"A. ONE LUMP SUM BID IS REQUIRED.

"ALTERNATE PRICES

"ALTERNATE PRICES ARE REQUIRED STATING AMOUNT TO BE DEDUCTED FROM LUMP SUM BID FOR EACH OF THE FOLLOWING:

"A. OMISSION OF ALL WORK ON 5TH FLOOR OFFICES.

"B. SECTION 16 OMISSION OF ALL BOOKCASES.

"C. SECTION 16 OMISSION OF ALL RADIATOR ENCLOSURES (EXCEPT IN COURT ROOMS).

"D. SECTION 17 BUILT IN FURNITURE - OMISSION OF ALL WORK IN SECTION.

"E. SECTION 19 OMISSION OF ALL LINOLEUM IN CORRIDORS.

"ANY AWARD WHICH INCLUDES THE ALTERNATES WILL BE MADE ON THE BASIS OF THE LOWEST AGGREGATE BID RESULTING FROM THE AMOUNT OF THE LUMP SUM BID PLUS OR MINUS THE AMOUNT OF THE ALTERNATE OR ALTERNATES AS MAY BE ACCEPTED BY THE GOVERNMENT.'

SECTION 16 OF THE SPECIFICATIONS, ENTITLED "BOOKCASES AND RADIATOR ENCLOSURES," STATED:

"16-1. WORK INCLUDED:THIS SECTION OF THE SPECIFICATION INCLUDES THE CONSTRUCTION OF * * * RADIATOR ENCLOSURES IN COURT ROOMS, OFFICES, AND CORRIDORS, ALL AS SHOWN ON THE DRAWING, AS HEREIN SPECIFIED, AND AS MAY BE DIRECTED.'

EIGHT BIDS WERE OPENED ON SEPTEMBER 10, 1963, AND THE CONTRACTING OFFICER DECIDED TO DETERMINE THE SUCCESSFUL BIDDER ON THE BASIS OF THE BASE BID MINUS ALTERNATES A AND C. ON THIS BASIS THE LOWEST BID WAS THAT OF JAMES A. MANN, INCORPORATED, IN THE AMOUNT OF $184,800 (BASE BID OF $209,400 MINUS $18,500 FOR ALTERNATE A AND MINUS $6,100 FOR ALTERNATE C). THE SECOND LOW BIDDER WAS SCHAEFER AND COMPANY WHOSE BID WAS $187,908 (BASE BID OF $210,667 MINUS $17,542 FOR ALTERNATE A AND MINUS $5,217 FOR ALTERNATE C).

A CONTRACT COVERING THE PROJECT WAS SENT TO JAMES A. MANN, INCORPORATED, ON OCTOBER 10, 1962. BY LETTER DATED OCTOBER 11, 1962, THE CONTRACTOR MADE CLAIM FOR $1,500 OVER AND ABOVE THE CONTRACT PRICE, BEING THE AMOUNT ALLEGED TO HAVE BEEN INCLUDED IN ITS BID TO COVER THE COST OF CERTAIN RADIATOR COVERS. CONTRACTOR ASSEVERATES THAT SINCE THE SAME WORK, IN PART, WAS DELETED BY BOTH ALTERNATE A AND ALTERNATE C, THE AMOUNTS SCHEDULED IN ITS BID OPPOSITE THESE ALTERNATES CONTAINED REDUNDANT ITEM OF COST FOR WHICH THE CONTRACTOR SHOULD NOW RECEIVE AN ALLOWANCE. CONTRACTOR STATES IN A LETTER DATED OCTOBER 22, 1962, WHICH RETURNED EXECUTED COPIES OF THE CONTRACT TOGETHER WITH THE NECESSARY BONDS:

"WE BELIEVE YOU WILL AGREE THAT IT IS OBVIOUS THE GOVERNMENT HAS TAKEN FROM US A CREDIT FOR THE SAME ITEM UNDER EACH OF THESE ALTERNATES; IN OTHER WORDS A DOUBLE DEDUCTION ON ONE ITEM.

"AS A RULE, MOST PROJECTS ARE BID WITH SEVERAL ALTERNATES WHICH ALWAYS INCLUDE THE PHRASE THAT THE OWNER HAS THE RIGHT TO ACCEPT ANY OF THE ALTERNATES IN AWARDING A CONTRACT. HOWEVER, THEY NEVER ACCEPT MORE THAN ONE ALTERNATE WHERE CREDITS FOR THE SAME ITEM HAVE BEEN REQUESTED.'

THE COMMISSIONER OF THE PUBLIC BUILDINGS SERVICE ADMITS THAT THE ALTERNATES IN THE INVITATION SHOULD HAVE BEEN SO DRAWN THAT NONE OF THE WORK INCLUDED IN ANY ONE DEDUCTIVE ALTERNATE WOULD HAVE BEEN INCLUDED UNDER ANOTHER ALTERNATE OR SHOULD HAVE BEEN DRAWN WITH PROHIBITIONS AGAINST THE ACCEPTANCE OF ALTERNATES COVERING THE SAME WORK WHOLLY OR IN PART. BUT THE COMMISSIONER BELIEVES THAT THE AMBIGUITY IN THE SPECIFICATIONS SHOULD HAVE PUT THE CONTRACTOR ON NOTICE AND INDUCED IT TO REQUEST CLARIFICATION OF THE INVITATION AND THE ISSUANCE OF AN AMENDMENT WITH RESPECT TO THE SELECTION OF OVERLAPPING ALTERNATES.

THE BREAKDOWN OF THE COST OF THE RADIATOR COVERS SUBMITTED BY CONTRACTOR DOES NOT SPECIFY WHICH RADIATOR ENCLOSURES ARE COVERED BY THE ESTIMATE IF NOT ALL ARE MEANT TO BE INCLUDED. IT IS SUGGESTED BY THE COMMISSIONER THAT ANY UPWARD ADJUSTMENT TO THE CONTRACT SHOULD BE LIMITED TO THE ACTUAL DOLLAR VALUE OF THE WORK COVERED BY BOTH ALTERNATES.

WE THINK THAT CONTRACTOR IS ENTITLED TO AN UPWARD ADJUSTMENT OF THE CONTRACT PRICE IN THIS CASE. COMPARE B-134908 DATED FEBRUARY 3, 1958, AND B-128425 DATED JULY 24, 1956. EACH ALTERNATE MAY BE BROKEN DOWN INTO ITEMS OF WORK. WHILE THE GENERAL CONDITIONS OF THE INVITATION RESERVED TO THE GOVERNMENT THE RIGHT TO ACCEPT ANY ITEMS OF WORK OR GROUPS OF ITEMS, ONLY ONE AMOUNT COULD BE LISTED ON THE BID NEXT TO EACH ALTERNATE, AND WHERE THE ALTERNATES INCLUDED COMMON ITEMS ACCEPTANCE OF BOTH ALTERNATES WAS NECESSARILY PRECLUDED. AN OFFER TO DEDUCT $1,000 FOR DELETION OF ITEMS 1 AND 2, AND $1,000 FOR DELETION OF ITEMS 1 AND 3, CANNOT BE CONSTRUED AS OFFERING TO DEDUCT $2,000 FOR DELETION OF 1, 2 AND 3. THEREFORE CONCLUDE THAT ACCEPTANCE OF THE MANN BID ON THE BASIS ADOPTED BY THE CONTRACTING OFFICER WAS NOT PROPER AND DID NOT BIND THE BIDDER AS TO THE PRICES QUOTED FOR THE DEDUCTIVE ALTERNATES, AND IN VIEW OF THE UNEQUIVOCAL INSISTENCE ON ITS CLAIM WE DO NOT BELIEVE THAT THE SIGNING OF THE CONTRACT MAY BE CONSIDERED AS A WAIVER OF THE DEFECT.

IN THE CIRCUMSTANCES, THE CONTRACT SHOULD BE REFORMED BY APPROPRIATE AMENDMENT OR CORRECTION OF THE AWARD TO ELIMINATE THE DUPLICATE DEDUCTION.