B-153298, FEB. 26, 1964

B-153298: Feb 26, 1964

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FEDERAL HOUSING ADMINISTRATION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 17. BIDS WERE OPENED ON JANUARY 7. A CONFERENCE WAS HELD IN WICHITA. IT WAS OBVIOUS THAT HE DID NOT FULLY UNDERSTAND THE SCOPE OF THE WORK NOR DID HE UNDERSTAND THAT THE EXPENDITURE NECESSARY FOR LABOR WOULD BE CONSIDERABLY HIGHER THAN HE ANTICIPATED.'. THE PURPOSE OF THE RULE IS TO PRECLUDE ANY BIDDER FROM OBTAINING AN ADVANTAGE BY VIRTUE OF THE DISCLOSURE OF THE TERMS OF THE OTHER BIDS SUBMITTED. WE HAVE STUDIED THE ORIGINAL CONKRIGHT WORK SHEETS AND HAVE CONCLUDED THAT THEY ESTABLISH THE MAKING OF A BONA FIDE ERROR ON THE BIDDER'S PART ALTHOUGH THEY DO NOT SATISFY THE STANDARD NECESSARY TO PERMIT CORRECTION.

B-153298, FEB. 26, 1964

TO MR. OSBORNE KOERNER, DIRECTOR, GENERAL SERVICES DIVISION, FEDERAL HOUSING ADMINISTRATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 17, 1964, WHICH RAISES THE QUESTION WHETHER THE BID OF RAYMOND H. CONKRIGHT, DOING BUSINESS AS CONKRIGHT PAINTING COMPANY, ON INVITATION FOR BIDS NO. 6651,ISSUED BY THE FEDERAL HOUSING ADMINISTRATION ON DECEMBER 23, 1963, MAY BE DISREGARDED IN MAKING THE AWARD, OR IN THE ALTERNATIVE, WHETHER THE PRICE QUOTED MAY BE ADJUSTED UPWARD FROM $12,939 TO $14,746.65 BY REASON OF A MISTAKE IN BID ALLEGED BY THE BIDDER AFTER OPENING, BUT PRIOR TO AWARD.

BIDDERS HAD BEEN REQUESTED TO QUOTE ON THE COST OF PERFORMING EXTERIOR REPAIR, PAINTING, AND LANDSCAPING AT FHA COMMISSIONER-OWNED APARTMENTS KNOWN AS BOULEVARD PLAZA NOS. 1 AND 2, WICHITA, KANSAS. BIDS WERE OPENED ON JANUARY 7, 1964, WITH THE FOLLOWING RESULTS:

CHART

BIDDER AMOUNT OF BID

CONKRIGHT PAINTING CO. $12,939

COULSON AND SHIRACK, INC. $19,143

THE INDEPENDENT GOVERNMENT ESTIMATE OF THE COST OF THE WORK TO BE PERFORMED IN ACCORDANCE WITH THE SPECIFICATION HAD BEEN $20,042.

AFTER BIDS HAD BEEN OPENED IN WASHINGTON, D.C., MR. LEMUAL SHOWELL, THE ASSISTANT COMMISSIONER FOR PROPERTY DISPOSITION, TELETYPED TO THE FHA INSURING OFFICE IN TOPEKA, KANSAS, FOR AN EXPLANATION OF THE DISCREPANCY BETWEEN THE GOVERNMENT'S COST ESTIMATE AND THE CONKRIGHT BID AND INQUIRED AS TO WHETHER THE LOW BIDDER FULLY UNDERSTOOD THE SCOPE OF THE WORK TO BE PERFORMED. ON JANUARY 10, 1964, A CONFERENCE WAS HELD IN WICHITA, KANSAS, BY MESSRS. LLOYD MONTGOMERY, CHIEF ARCHITECT, AND HAROLD SOLT, CONSTRUCTION ANALYST, REPRESENTING THE GOVERNMENT, WITH MR. CONKRIGHT. MEMORANDUM DATED FEBRUARY 2, 1964, FROM LLOYD MONTGOMERY TO FRED A. MANN SUBMITTED AS AN ATTACHMENT TO YOUR LETTER TO THIS OFFICE DATED FEBRUARY 10, 1964, SUMS UP THE OPINION OF THE GOVERNMENT REPRESENTATIVES AS FOLLOWS:

"AFTER BRIEF DISCUSSION WITH MR. CONKRIGHT, IT WAS OBVIOUS THAT HE DID NOT FULLY UNDERSTAND THE SCOPE OF THE WORK NOR DID HE UNDERSTAND THAT THE EXPENDITURE NECESSARY FOR LABOR WOULD BE CONSIDERABLY HIGHER THAN HE ANTICIPATED.'

AS A RESULT OF THE MEETING MR. CONKRIGHT ADDRESSED A LETTER DATED JANUARY 11, 1964, TO YOU EXPLAINING THE NATURE OF HIS ERROR TO BE THAT HE HAD MISUNDERSTOOD CERTAIN ASPECTS OF THE SPECIFICATIONS.

IN GENERAL BIDS SUBMITTED IN RESPONSE TO AN INVITATION TO BID ISSUED BY AN AGENCY OF THE FEDERAL GOVERNMENT REMAIN IRREVOCABLE DURING THE PERIOD SPECIFIED IN THE INVITATION FOR ACCEPTANCE. 31 COMP. GEN. 183. THE PURPOSE OF THE RULE IS TO PRECLUDE ANY BIDDER FROM OBTAINING AN ADVANTAGE BY VIRTUE OF THE DISCLOSURE OF THE TERMS OF THE OTHER BIDS SUBMITTED. COMP. GEN. 76. A BIDDER WHO ALLEGES ERROR IN HIS BID AFTER THE TIME FIXED FOR OPENING, HOWEVER, MAY BE PERMITTED TO WITHDRAW BEFORE AWARD IF HE CAN DEMONSTRATE WITH CLEAR AND CONVINCING EVIDENCE THAT THE AMOUNT OF THE BID RESULTED FROM AN HONEST MISTAKE. UNITED STATES V. LIPMAN, 122 F.SUPP. 284.

WE HAVE STUDIED THE ORIGINAL CONKRIGHT WORK SHEETS AND HAVE CONCLUDED THAT THEY ESTABLISH THE MAKING OF A BONA FIDE ERROR ON THE BIDDER'S PART ALTHOUGH THEY DO NOT SATISFY THE STANDARD NECESSARY TO PERMIT CORRECTION. WEIGHT MUST ALSO BE ACCORDED TO THE TYPE OF ERROR MADE AND TO THE DISCREPANCY BETWEEN THE AMOUNT OF THE CONKRIGHT BID AND THE GOVERNMENT ESTIMATE, WHICH LATTER FACTOR PUTS GOVERNMENT AGENTS ON NOTICE OF THE PROBABILITY OF ERROR. A BINDING CONTRACT CANNOT BE MADE BY ATTEMPTING TO TAKE ADVANTAGE OF SUCH A SITUATION BY ACCEPTANCE OF THE BID AFTER NOTICE OF THE ERROR. 17 COMP. GEN. 575.

YOU ARE ACCORDINGLY ADVISED THAT ALTHOUGH THE BID OF THE CONKRIGHT PAINTING COMPANY MAY NOT BE CORRECTED TO REFLECT THE UPWARD ADJUSTMENT DESIRED BY THE BIDDER, THE BID MAY BE DISREGARDED WITHOUT FORFEITURE OF BID SECURITY IN MAKING THE AWARD.

WE ARE RETURNING HEREWITH COPIES OF STANDARD FORM 20, INVITATION FOR BIDS, STANDARD FORM 21, BID FORM, THE CONKRIGHT BID, THE SPECIFICATIONS, AND THE BIDDER'S ORIGINAL LETTER, AS REQUESTED.