B-153632, APR. 30, 1964

B-153632: Apr 30, 1964

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DUDLEY AND EASTERWOOD: REFERENCE IS MADE TO YOUR LETTERS OF MARCH 2. THE INVITATION FOR BIDS WAS ISSUED ON JANUARY 10. WAS TO BE OPENED AT 2:00 P.M. THE APPARENT LOW BIDDER WAS ROBERT L. THE APPARENT SECOND LOW BIDDER WAS FRIEDMAN CONSTRUCTION COMPANY OF DENVER. BOTH THE BASIC BID AND THE TELEGRAPHIC MODIFICATION WERE RECEIVED PRIOR TO THE BID OPENING AND BOTH WERE READ AT THE BID OPENING. WHICH WAS THE ENTIRE WORK. AT THE BID OPENING THE GUYLER BID WAS CORRECTLY ANNOUNCED AS $1. THE TELEGRAPHIC MODIFICATION WAS ALSO READ VERBATIM AS RECEIVED. FRIEDMAN OF FRIEDMAN CONSTRUCTION COMPANY WAS AMONG THOSE ATTENDING THE BID OPENING. THE BIDS WERE INFORMALLY WRITTEN DOWN AND. THE BASIC BID OF GUYLER WAS WRITTEN AS $1.

B-153632, APR. 30, 1964

TO MCNUTT, DUDLEY AND EASTERWOOD:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 2, 30, 31, AND APRIL 10, 1964, RELATIVE TO THE PROTEST OF JACK N. FRIEDMAN, D/B/A FRIEDMAN CONSTRUCTION COMPANY, AGAINST THE AWARD OF A CONTRACT TO ROBERT L. GUYLER COMPANY UNDER INVITATION FOR BIDS NO. ENG-25-066-64-38 FOR REMODELING 25 AIRMAN DORMITORIES AT LOWRY AIR FORCE BASE, COLORADO.

THE INVITATION FOR BIDS WAS ISSUED ON JANUARY 10, 1964, AND WAS TO BE OPENED AT 2:00 P.M. ON FEBRUARY 14, 1964, IN THE OFFICE OF THE DISTRICT ENGINEER, U.S. ARMY ENGINEER DISTRICT, OMAHA, NEBRASKA. THE APPARENT LOW BIDDER WAS ROBERT L. GUYLER COMPANY OF LAMPASAS, TEXAS, THE APPARENT SECOND LOW BIDDER WAS FRIEDMAN CONSTRUCTION COMPANY OF DENVER, COLORADO. THE GUYLER BID CONSISTED OF A BASIC BID ON THE PRESCRIBED BID FORM, DATED FEBRUARY 14, 1964, TOGETHER WITH A TELEGRAPHIC MODIFICATION ALSO DATED FEBRUARY 14, 1964. BOTH THE BASIC BID AND THE TELEGRAPHIC MODIFICATION WERE RECEIVED PRIOR TO THE BID OPENING AND BOTH WERE READ AT THE BID OPENING. PARAGRAPH 5 (D) OF THE INVITATION SPECIFICALLY PERMITTED TELEGRAPHIC MODIFICATION OF BIDS.

THE INVITATION SOLICITED PRICES ON ITEM NO. 1, WHICH WAS THE ENTIRE WORK, AND FOUR DEDUCTIVE ITEMS DESIGNATED ITEMS D-1, D-2, D-3 AND D-4, WHICH COULD BE DELETED FROM THE WORK WITH PRICE DEDUCTIONS IN THE AMOUNTS STATED. AT THE BID OPENING THE GUYLER BID WAS CORRECTLY ANNOUNCED AS $1,001,790, AND THE TELEGRAPHIC MODIFICATION WAS ALSO READ VERBATIM AS RECEIVED. THE TELEGRAPHIC MODIFICATION AS RECEIVED, STATED: "DEDUCT FROM ITEM NUMBER A $42,300.00. ON DEDUCTIVE ITEM NUMBER D-2 DEDUCT $3,100.00 MAKING A LESSOR (SIC) CREDIT TO GOVERNMENT.' MR. JACK H. FRIEDMAN OF FRIEDMAN CONSTRUCTION COMPANY WAS AMONG THOSE ATTENDING THE BID OPENING. NO REPRESENTATIVE OF THE ROBERT L. GUYLER COMPANY ATTENDED. THE BIDS WERE INFORMALLY WRITTEN DOWN AND, BY MISTAKE, THE BASIC BID OF GUYLER WAS WRITTEN AS $1,179,000 INSTEAD OF $1,001,790. ACCORDINGLY, AFTER ALL BIDS WERE READ AND HASTILY TOTALED FOR THE PURPOSE OF ANNOUNCING AN APPARENT LOW BIDDER, IT WAS ERRONEOUSLY ASSUMED THAT THE FRIEDMAN BID WAS THE LOW BID. IT WAS STATED, HOWEVER, THAT THIS WAS ONLY AN ANNOUNCEMENT OF THE "APPARENT" LOW BID AND THAT IT WOULD BE NECESSARY TO CHECK FIGURES AT A LATER TIME. LATER IN THE AFTERNOON, AFTER MR. FRIEDMAN LEFT THE DISTRICT OFFICE, IT WAS DISCOVERED THAT THE CORRECT BID PRICE OF GUYLER ON THE COMPLETE CONSTRUCTION, TAKING INTO CONSIDERATION THE TELEGRAPHIC MODIFICATION, WAS $959,490, WHILE THE BID OF FRIEDMAN CONSTRUCTION COMPANY WAS $962,309. THE FRIEDMAN OFFICE IN DENVER WAS IMMEDIATELY NOTIFIED THAT IT APPEARED GUYLER WAS THE LOW BIDDER.

REPRESENTATIVES OF THE FRIEDMAN CONSTRUCTION COMPANY VERBALLY PROTESTED ANY AWARD OF A CONTRACT TO GUYLER AND CONFIRMED THEIR PROTEST IN A TELEGRAM DATED FEBRUARY 18, 1964. THE BASIS OF THE PROTEST IS THAT THE TELEGRAPHIC MODIFICATION OF THE GUYLER BID SHOULD BE CONSIDERED NONRESPONSIVE SINCE IT REFERS TO ITEM "A" AND THERE IS NO SUCH ITEM IN THE PRICE SCHEDULE.

IN ACCORDANCE WITH ASPR 2-407.9 (B) (2), THE ROBERT L. GUYLER COMPANY WAS NOTIFIED OF THE FRIEDMAN PROTEST. IN THE FIRST TELEPHONE CONVERSATION WITH MR. LANCE WALKER, VICE PRESIDENT OF THE GUYLER COMPANY, HE STATED THAT THE TELEGRAM WHICH HE DELIVERED TO THE WESTERN UNION COMPANY IN LAMPASAS, TEXAS, FOR TRANSMITTAL TO OMAHA CORRECTLY STATED THAT $42,300 SHOULD BE DEDUCTED FROM ITEM "1," NOT FROM ITEM "A; " THAT HE COULD PRODUCE DOCUMENTARY EVIDENCE TO SUPPORT HIS STATEMENT, AND THAT HE WOULD PROTEST ANY AWARD OF A CONTRACT TO THE FRIEDMAN COMPANY.

REPRESENTATIVES OF BOTH COMPANIES WERE REQUESTED TO APPEAR IN THE OFFICE OF THE DISTRICT ENGINEER IN OMAHA ON FEBRUARY 26, 1964, TO DISCUSS THE CIRCUMSTANCES. IN ATTENDANCE WERE MESSRS. JACK H. FRIEDMAN, G. K. WARD, AND DOYLE WARD OF THE FRIEDMAN CONSTRUCTION COMPANY; AND MESSRS. LANCE WALKER, JR., AND H. N. MCCARTY OF THE ROBERT L. GUYLER COMPANY; LT.COL. CARROLL C. JACOBSON, JR., DEPUTY DISTRICT ENGINEER, CONDUCTING THE MEETING. COL. JACOBSON REVIEWED THE FACTS STATED ABOVE AND STATED THAT REGULATIONS REQUIRED THE DISTRICT ENGINEER TO WITHHOLD AWARD IN THE CASE OF PROTEST. HE POINTED OUT THAT, AS THE MATTER THEN STOOD, BOTH BIDDERS PROTESTED AWARD OF A CONTRACT TO THE OTHER BIDDER. HE ALSO STATED THAT AFTER REVIEWING THE BIDS IT WAS THE CONCLUSION OF THE OMAHA DISTRICT OFFICE THAT THE GUYLER BID WAS THE LOWEST BID SUBMITTED, AND THAT THE TELEGRAPHIC MODIFICATION WOULD HAVE TO BE CONSIDERED IN DETERMINATING THE AWARD OF THE GUYLER BID IRRESPECTIVE OF WHETHER THE "ITEM A" VERSUS "ITEM 1" DISCREPANCY WAS COMMITTED BY THE GUYLER COMPANY OR BY THE WESTERN UNION TELEGRAPH COMPANY. REPRESENTATIVES OF THE GUYLER COMPANY PRODUCED AN AFFIDAVIT OF THE WESTERN UNION OPERATOR IN LAMPASAS, TEXAS, THAT THE TELEGRAM AS RECEIVED FROM GUYLER STATED "ITEM 1" AND THAT THE TELEGRAM TRANSMITTED BY THE LAMPASAS WESTERN UNION OFFICE ALSO READ "ITEM 1.' ATTACHED TO THE AFFIDAVITS WERE COPIES OF THE TELEGRAM AS RECEIVED FROM THE GUYLER COMPANY AND AS TRANSMITTED BY THE LAMPASAS OPERATOR.

THE DISTRICT ENGINEER REPORTS THAT HE DID NOT CONSIDER THE TELEGRAPHIC MODIFICATION OF THE GUYLER BID AMBIGUOUS EVEN THOUGH IT REFERRED TO ITEM A INSTEAD OF ITEM 1, PARTICULARLY SINCE THE TELEGRAM ALSO REDUCED ITEM D-2. WITHOUT FURTHER EVIDENCE HE CONSIDERED THE USE OF THE TERMINOLOGY "ITEM A" AS AN INFORMALITY WHICH COULD BE WAIVED. HOWEVER, EVEN IF IT WERE CONSIDERED THAT THE TELEGRAPHIC MODIFICATION WAS AMBIGUOUS THE DISTRICT ENGINEER CONSIDERED THAT THE EVIDENCE SUBMITTED BY GUYLER ESTABLISHED THAT THE ERROR IN TRANSMISSION WAS DUE SOLELY TO A MISTAKE BY THE WESTERN UNION TELEGRAPH COMPANY. THE DISTRICT ENGINEER ATTEMPTED TO VERIFY THIS THROUGH WESTERN UNION AND RECEIVED A TELEGRAM FROM WESTERN UNION AT LAMPASAS WHICH REFERRED TO THE GUYLER TELEGRAM AND STATED THAT THE "2ND LINE 10TH WORD SHOULD READ ITEM NUMBER 1.' THAT WIRE SEEMS TO ESTABLISH THAT THE ERROR WAS MADE BY WESTERN UNION RATHER THAN BY GUYLER.

IN YOUR LETTER OF MARCH 30, 1964, YOU ADVANCE SEVERAL CONTENTIONS. FIRST, YOU CONTEND THAT THE ERROR IN GUYLER'S TELEGRAPHIC BID MODIFICATION DOES NOT FALL WITHIN THE AREA OF CLERICAL MISTAKES WHICH MAY BE CORRECTED BY THE CONTRACTING OFFICER PURSUANT TO THE PROVISIONS OF ASPR 2-406.2 AND IS NOT AN INFORMALITY WHICH MAY BE WAIVED.

ASPR 2-406.2 PROVIDES THAT CLERICAL MISTAKES APPARENT ON THE FACE OF THE BID MAY BE CORRECTED BY THE CONTRACTING OFFICER PRIOR TO AWARD. IN THE PRESENT CASE IT APPEARS THE MISTAKE IN THE TELEGRAM MODIFYING GUYLER'S BID WAS OF THE TYPE CONTEMPLATED BY THE ASPR PROVISIONS AND THAT THE DISTRICT ENGINEER CORRECTLY DETERMINED THE ERROR, HOW IT WAS MADE AND WHAT THE BID WAS. THIS SITUATION IS NOT COMPARABLE WITH THOSE INVOLVED IN 40 COMP. GEN. 432; 37 ID. 210, AND THE OTHER DECISIONS OF THIS OFFICE CITED IN YOUR LETTER, WHICH HOLD THAT A DOWNWARD CORRECTION OF A BID MAY NOT BE MADE IF THE EFFECT WOULD BE TO CHANGE THE RELATIVE POSITION OF BIDDERS, UNLESS THE ERROR IS ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. WE BELIEVE THAT THE PRESENT CASE FALLS WITHIN THE EXCEPTION.

YOUR SECOND CONTENTION IS THAT THE DISTRICT ENGINEER WAS WRONG IN CONCLUDING THAT THE TELEGRAPHIC MODIFICATION WOULD HAVE TO BE CONSIDERED IN DETERMINING THE AMOUNT OF THE GUYLER BID, IRRESPECTIVE OF WHETHER THE "ITEM A" VERSUS "ITEM 1" DISCREPANCY WAS THE FAULT OF THE GUYLER COMPANY OR OF THE TELEGRAPH COMPANY. YOU DISAGREE THAT THE CORRECTION COULD BE ALLOWED IF THE ERROR WAS MADE BY THE GUYLER COMPANY, AND YOU CONTEND THAT ONLY TWO DECISIONS OF THIS OFFICE, 41 COMP. GEN. 165, AND B-148886, MAY 25, 1962, HAVE ALLOWED CORRECTION OF ERRORS MADE IN TELEGRAPHIC BID MODIFICATIONS WHERE THE RESULT WOULD BE THE DISPLACEMENT OF ANOTHER BIDDER. THOSE DECISIONS HOLD THAT AN ERROR MADE BY A TELEGRAPH COMPANY IN FAILING TO TRANSMIT TO A CONTRACTING AGENCY THE CORRECT AMOUNT OF A BID REDUCTION OFFER WHICH WOULD HAVE MADE THE OFFEROR THE LOW BIDDER MAY BE CORRECTED, SINCE SUCH ERROR IS MADE BY AN INDEPENDENT AGENCY OVER WHICH THE BIDDER DOES NOT HAVE ANY SUPERVISORY CONTROL, AND PROOF OF THE ERROR DOES NOT DEPEND UPON EVIDENCE OVER WHICH THE BIDDER HAS ANY CONTROL. THIS PRINCIPLE DOES NOT, HOWEVER, RESTRICT THE APPLICABILITY OF THE EXCEPTION STATED IN 37 COMP. GEN. 210, CITED ABOVE, WHERE THE ERROR MAY BE CORRECTED FROM THE FACE OF THE BID ITSELF.

YOU QUESTION WHETHER THE ADMINISTRATIVE EVIDENCE ESTABLISHES EXCLUSIVELY THAT THE ERROR WAS MADE BY WESTERN UNION AND NOT BY GUYLER, SINCE WE AGREE WITH THE CONTRACTING OFFICER'S CONCLUSION THAT THE TELEGRAM ON ITS FACE SHOULD BE READ AS A MODIFICATION OF ITEM 1 OF THE BID SCHEDULE, WE DO NOT REGARD THIS QUESTION AS MATERIAL. HOWEVER, THERE APPEARS TO BE NO AFFIRMATIVE EVIDENCE THAT THE ERROR WAS MADE BY ANYONE OTHER THAN WESTERN UNION, NOR IS THERE ANY SUBSTANTIVE SUPPORT FOR YOUR SUGGESTION THAT THE DOCUMENTS MAY HAVE BEEN COLLUSIVELY PREPARED BY THE BIDDER AND THE LOCAL TELEGRAPH OFFICE IN LAMPASAS, TEXAS.

YOUR FURTHER CONTENTION THAT THERE ARE SUSPICIOUS CIRCUMSTANCES SURROUNDING THE ALLEGATION THAT THE MISTAKE IN THE BID MODIFICATION WAS MADE BY THE TELEGRAPH COMPANY ALSO DEPENDS ENTIRELY UPON INFERENCES ATTEMPTED TO BE DRAWN FROM A STATEMENT FURNISHED TO YOU BY CUSTOMER SERVICE, WESTERN UNION OFFICE, WASHINGTON, D.C., THAT TELEGRAMS ADDRESSED TO DISTRICT ENGINEER, U.S. ARMY ENGINEER DISTRICT, OMAHA, NEBRASKA, ARE DELIVERED OVER A TIE LINE WIRE. WHILE YOU ALSO STATE THAT YOU WERE ADVISED LATER BY PHONE BY CUSTOMER SERVICE THAT THERE WAS NO INTERVENING OPERATOR ON THE MESSAGE FROM LAMPASA TO OMAHA, THIS STATEMENT IS DIRECTLY IN CONFLICT WITH THE SWORN AFFIDAVIT OF THE WESTERN UNION OPERATOR IN KILLEEN, WHICH MUST BE GIVEN MORE WEIGHT THAN A VERBAL STATEMENT BY AN UNIDENTIFIED EMPLOYEE IN WASHINGTON WHO COULD NOT HAVE ANY PERSONAL KNOWLEDGE OF THE MATTER. WHILE YOUR CONTENTION IN THIS RESPECT MAY RAISE A QUESTION AS TO HOW THE ERROR OCCURRED WITHIN THE WESTERN UNION ORGANIZATION, IT DOES NOT IN ANY WAY ESTABLISH THAT THE ERROR WAS MADE BY GUYLER.

AS A MATTER OF LAW, YOU URGE THAT TO AVOID IMPAIRING THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM FOR GOVERNMENT CONSTRUCTION CONTRACTS 41 COMP. GEN. 165 AND B-148886 OF MAY 25, 1962, SHOULD BE OVERRULED.

WE BELIEVE THOSE DECISIONS ARE SOUND AND THAT THEY ARE NOT DETRIMENTAL TO THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM FOR GOVERNMENT CONSTRUCTION CONTRACTS MERELY BECAUSE THEY RECOGNIZE THAT AN ERROR CAN BE MADE BY A TELEGRAPH COMPANY IN TRANSMITTING A BID WITHOUT FAULT OF THE BIDDER. IN ANY EVENT, AS INDICATED ABOVE, WE DO NOT REGARD THE PRESENT CASE AS FALLING WITHIN THE RULE STATED THEREIN.

STRICTLY SPEAKING, THE QUESTION PRESENTED BY THE FACTS HERE IS NOT SO MUCH ONE OF CORRECTING A MISTAKE IN WORDS AS OF INTERPRETING THE WORDS RECEIVED. THERE IS NO QUESTION AS TO THE AMOUNTS STATED IN THE BID OR MODIFICATION, ONLY AS TO THE ITEM TO WHICH ONE OF THE AMOUNTS PERTAINS. IF THE TELEGRAM AS RECEIVED MAY PROPERLY BE READ AS A REDUCTION OF $42,300 FROM THE WRITTEN BID OF $1,001,790, AND THE BIDDER WOULD BE LEGALLY BOUND TO PERFORM AT THAT REDUCED AMOUNT IF THE BID WERE ACCEPTED BY THE GOVERNMENT, THEN IT IS WHOLLY IMMATERIAL WHETHER OR NOT THE TELEGRAM AS DELIVERED WAS IDENTICAL WITH THE MESSAGE FILED.

THE INVITATION CALLED FOR, AND THE BID CONTAINED, PRICES ON FIVE ITEMS OF WORK, DESIGNATED AS ITEMS 1, D1, D2, D3 AND D4. THE TELEGRAPHIC MODIFICATION AS RECEIVED PURPORTED TO REDUCE THE PRICES QUOTED ON ITEM D2 BY $3100 AND ON "ITEM A" BY $42,300. SINCE THE PRICES QUOTED ON ITEMS D1, D3, AND D4 WERE ALL LESS THAN $42,300 THE LATTER REDUCTION COULD NOT HAVE BEEN INTENDED TO APPLY TO ANY ONE OF THEM. YOUR SUGGESTION THAT THE $42,300 REDUCTION MIGHT HAVE BEEN INTENDED TO APPLY TO ITEM D2, WHICH WOULD THEN BE FURTHER REDUCED BY THE $3100 SPECIFIED FOR THAT ITEM IN THE NEXT SENTENCE OR CLAUSE OF THE SAME MESSAGE IS TOO IMPROBABLE AND STRAINED TO BE DESERVING OF SERIOUS CONSIDERATION. OTHERWISE, THE TENDERED REDUCTION OF $42,300 MUST EITHER BE APPLIED TO THE $1,001,790 BID ON ITEM 1, OR ENTIRELY IGNORED. IN THE CIRCUMSTANCES WE DO NOT BELIEVE THAT THE MERE FACT THAT THE TELEGRAM REFERRED TO "ITEM A" IS SUFFICIENT TO JUSTIFY IGNORING THE $42,300, OR THAT THE BIDDER COULD, IN THE EVENT OF AWARD TO HIM WITHOUT FURTHER INQUIRY, SUCCESSFULLY MAINTAIN THAT THE $42,300 COULD NOT BE CONSIDERED TO BE APPLICABLE TO THE BID ON ITEM 1.

IN YOUR LETTER OF MARCH 31, 1964, YOU QUESTION THE SMALL BUSINESS STATUS OF THE ROBERT L. GUYLER COMPANY AND ASK THAT THIS OFFICE OBTAIN A REPORT FROM SMALL BUSINESS ADMINISTRATION. THE RECORD SHOWS THAT BY TELEGRAM OF MARCH 6, 1964, SMALL BUSINESS ADMINISTRATION ADVISED YOU THAT IT WOULD TAKE NO ACTION ON YOUR PROTEST OF THE SMALL BUSINESS STATUS OF GUYLER SINCE SPECIFIC, DETAILED EVIDENCE IN SUPPORT OF YOUR CLAIM HAD NOT BEEN SUBMITTED. SINCE YOU STATE IN YOUR LETTER OF APRIL 10, 1964, THAT YOU ARE UNABLE TO PRODUCE EVIDENCE THAT ROBERT L. GUYLER COMPANY IS NOT A SMALL BUSINESS CONCERN THIS OFFICE WOULD NOT BE JUSTIFIED IN ACTING UPON YOUR REQUEST. IN THE CIRCUMSTANCES WE FIND NO VALID BASIS FOR YOUR PROTEST, AND IT IS THEREFORE DENIED.