B-153656, MAR. 30, 1964

B-153656: Mar 30, 1964

Additional Materials:

Contact:

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

 

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

GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO LETTER DATED MARCH 4. THE CONTRACT WAS AWARDED TO THE MAINTENANCE COMPANY. IT WAS THE ONLY BID RECEIVED AND AT THE TIME OF AWARD ON NOVEMBER 14. THERE WAS NOTHING IN PARTICULAR OF SUFFICIENT IMPORTANCE TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR IN THE BID. THE GOVERNMENT ESTIMATE OF THE COST OF THE WORK WAS $2. THE DIFFERENCE OF $575 BETWEEN THE BID AND THE ESTIMATE WAS NOTICED. IT WAS CONCLUDED THAT WHILE THE BID WAS LOW IT APPEARED BONA FIDE SINCE THE FIRM HAD SATISFACTORILY COMPLETED A LARGE NUMBER OF GOVERNMENT CONTRACTS IN THE PAST FEW YEARS AND ITS BIDS WERE USUALLY LOW. SUBMITTED TO THE GOVERNMENT BUILDING MANAGER COVERED ONE ELEVATOR ONLY WHICH WAS IN THE AMOUNT OF $1.

B-153656, MAR. 30, 1964

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED MARCH 4, 1964, FROM THE GENERAL COUNSEL OF YOUR AGENCY, REQUESTING A DECISION AS TO WHETHER THE MAINTENANCE COMPANY, INC., MAY BE RELEASED FROM CONTRACT NO. GS-02B 11,374 FOR REPAIRING TWO ELEVATORS AT THE UNITED STATES POST OFFICE, MORGAN ANNEX, NEW YORK CITY.

THE CONTRACT WAS AWARDED TO THE MAINTENANCE COMPANY, INC., AS THE RESULT OF ITS LUMP-SUM BID OF $1,925, OPENED ON OCTOBER 25, 1963. IT WAS THE ONLY BID RECEIVED AND AT THE TIME OF AWARD ON NOVEMBER 14, 1963, THERE WAS NOTHING IN PARTICULAR OF SUFFICIENT IMPORTANCE TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR IN THE BID. THE GOVERNMENT ESTIMATE OF THE COST OF THE WORK WAS $2,500. THE DIFFERENCE OF $575 BETWEEN THE BID AND THE ESTIMATE WAS NOTICED. IT WAS CONCLUDED THAT WHILE THE BID WAS LOW IT APPEARED BONA FIDE SINCE THE FIRM HAD SATISFACTORILY COMPLETED A LARGE NUMBER OF GOVERNMENT CONTRACTS IN THE PAST FEW YEARS AND ITS BIDS WERE USUALLY LOW.

ON DECEMBER 9, 1963, A REPRESENTATIVE OF THE CONTRACTOR ADVISED THE BID RECEIVING OFFICE THAT IT HAD MADE AN ERROR IN ITS BID IN THAT THE BID COVERED WORK ON ONE ELEVATOR ONLY INSTEAD OF TWO ELEVATORS AND HE ASKED THAT THE CONTRACT PRICE BE INCREASED BY $1,400 TO A TOTAL OF $3,325. LETTER DATED DECEMBER 11, 1963, THE CONTRACTOR EXPLAINED THAT THE ORIGINAL PROPOSAL ON FEBRUARY 26, 1963, SUBMITTED TO THE GOVERNMENT BUILDING MANAGER COVERED ONE ELEVATOR ONLY WHICH WAS IN THE AMOUNT OF $1,625. LATER THE AMOUNT OF $300 WAS ADDED TO COVER THE COSTS OF SKETCHES AND DIAGRAMS REQUESTED IN THE SPECIFICATIONS. THE CONTRACTOR FAILED TO NOTICE THAT THE SPECIFICATIONS COVER WORK ON TWO ELEVATORS.

IN THE LETTER OF MARCH 4, 1964, FROM THE GENERAL COUNSEL, IT IS STATED THAT A REVIEW WAS MADE AS TO THE ACCURACY OF THE GOVERNMENT ESTIMATE OF $2,500 FOR THE WORK. A REVISED ESTIMATE OF $3,352 WAS OBTAINED FROM THE ARCHITECT-ENGINEER AND A SPECIAL DETAILED ESTIMATE OF $3,255 PREPARED BY THE REGIONAL DESIGN BRANCH.

ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF RECORD THERE APPEARS NO DOUBT THAT AN ERROR WAS MADE IN THE BID OF THE MAINTENANCE COMPANY, INC., AS ALLEGED. FURTHERMORE, HAD THE GOVERNMENT ESTIMATE OF THE COST OF THE WORK INVOLVED BEEN MORE ACCURATE, WE BELIEVE THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED THE CORPORATION TO VERIFY ITS BID PRIOR TO AWARD. IN THE CIRCUMSTANCES, AND SINCE THE CONTRACTOR HAS NOT COMMENCED THE WORK, THE AWARD MAY BE RESCINDED AND THE MAINTENANCE COMPANY, INC., RELIEVED OF ALL LIABILITY UNDER THE CONTRACT.