B-154084, NOV. 5, 1964

B-154084: Nov 5, 1964

Additional Materials:

Contact:

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

 

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

AWARD WAS TO BE MADE TO THE LOW BIDDER DETERMINED BY MULTIPLYING THE ESTIMATED NUMBER OF SQUARE FEET FOR REFLECTORIZED PAINT (ITEM 1) BY THE PRICE PER SQUARE FOOT AND ADDING THE RESULT TO THE SUM DERIVED FROM A LIKE COMPUTATION PERFORMED WITH RESPECT TO THE YELLOW PAINT WORK (ITEM 2). THE WHITE REFLECTORIZED PAINT WAS TO CONTAIN EITHER REFLECTIVE GRANULES AS COVERED BY FEDERAL SPECIFICATION TT-G-00490 OR REFLECTIVE SPHERES AS DESCRIBED IN FEDERAL SPECIFICATION TT-P-0085. WAS AMENDED BEFORE OPENING TO EMBODY REVISED TECHNICAL PROVISIONS WHICH REQUIRED THE REFRACTIVE INDEX TO BE NOT LESS THAN1.90. YOUR LETTERS STATE THAT YOU WERE UNAWARE OF THE SIGNIFICANCE OF THE CHANGE AT THE TIME YOU SUBMITTED YOUR BID.

B-154084, NOV. 5, 1964

TO WARREN PAINTING COMPANY, INC.:

WE REFER TO YOUR LETTER DATED APRIL 21, 1964, REQUESTING RECONSIDERATION OF A SETTLEMENT CERTIFICATE DATED APRIL 10, 1964, WHICH DISALLOWED YOUR CLAIM FOR $9,802.49 ASSERTED AS THE RESULT OF A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT AF65/503/-1171, DATED JULY 19, 1960.

BY INVITATION FOR BIDS 65-503-60-158 ISSUED ON MAY 23, 1960, THE DEPARTMENT OF THE AIR FORCE REQUESTED QUOTATIONS ON MARKING RUNWAYS WITH WHITE REFLECTIVE PAINT AND TAXIWAYS WITH YELLOW NONREFLECTIVE PAINT AT EIELSON AIR FORCE BASE, ALASKA. THE SECOND AMENDMENT TO THE INVITATION DELETED THE LUMP-SUM BASIS OF AWARD AND SUBSTITUTED A BID PER SQUARE FOOT MODE OF QUOTATION, ESTIMATING THE WORK TO BE DONE IN REFLECTORIZED WHITE TO BE APPROXIMATELY 70,000 SQUARE FEET AND THE WORK INVOLVING YELLOW PAINT TO BE APPROXIMATELY 90,000 SQUARE FEET. AWARD WAS TO BE MADE TO THE LOW BIDDER DETERMINED BY MULTIPLYING THE ESTIMATED NUMBER OF SQUARE FEET FOR REFLECTORIZED PAINT (ITEM 1) BY THE PRICE PER SQUARE FOOT AND ADDING THE RESULT TO THE SUM DERIVED FROM A LIKE COMPUTATION PERFORMED WITH RESPECT TO THE YELLOW PAINT WORK (ITEM 2).

THE WHITE REFLECTORIZED PAINT WAS TO CONTAIN EITHER REFLECTIVE GRANULES AS COVERED BY FEDERAL SPECIFICATION TT-G-00490 OR REFLECTIVE SPHERES AS DESCRIBED IN FEDERAL SPECIFICATION TT-P-0085. AS ORIGINALLY ISSUED THE INVITATION SAID NOTHING OF A LIGHT REFRACTIVE INDEX, BUT WAS AMENDED BEFORE OPENING TO EMBODY REVISED TECHNICAL PROVISIONS WHICH REQUIRED THE REFRACTIVE INDEX TO BE NOT LESS THAN1.90. THE CHANGE REFLECTED THE ADOPTION ON MARCH 2, 1960, OF AMENDMENT NO. 1 TO TT-P-0085 WHICH INCREASED THE INDEX OF REFRACTION FROM 1.50 TO 1.90.

YOUR LETTERS STATE THAT YOU WERE UNAWARE OF THE SIGNIFICANCE OF THE CHANGE AT THE TIME YOU SUBMITTED YOUR BID; THAT YOUR PRICE WAS BASED ON INFORMAL QUOTATIONS REGARDING THE REFLECTIVE SPHERES FROM YOUR SUPPLIERS WHO STATED THEY COULD FURNISH THE SAME FOR ABOUT $0.30 PER LB.; THAT AFTER AWARD WAS MADE TO YOUR COMPANY THE SUPPLIERS DISCOVERED THAT REFLECTIVE SPHERES SATISFYING THE REQUIREMENTS OF THE SPECIFICATIONS WERE EXTREMELY DIFFICULT TO PURCHASE AND COULD NOT BE OBTAINED FOR LESS THAN $0.60 PER LB.; AND THE SUPPLIERS THEREFORE REFUSED TO FURNISH THE SPHERES AT $0.30 PER LB.

THE CONTRACT, AS AMENDED, HAS NOW BEEN FULLY PERFORMED AND YOU HAVE RECEIVED THE SUM OF $37,781.11 FOR ACTUALLY PAINTING 160,978 SQUARE FEET WITH REFLECTORIZED WHITE PAINT AND 47,319 WITH YELLOW PAINT. AN UPWARD ADJUSTMENT IN PRICE IS NOW SOUGHT TO COVER THE UNANTICIPATED EXPENSE OF THE REFLECTIVE SPHERES. YOU STATE THAT THE CONTRACTING OFFICER DID NOT REALIZE THE CHANGE IN THE REFRACTIVE INDEX HAD MADE THE CONTRACT MORE EXPENSIVE OF PERFORMANCE AS IS ILLUSTRATED BY HIS FAILURE TO SIMULTANEOUSLY MODIFY THE INDEPENDENT GOVERNMENT ESTIMATE OF THE COST OF THE WORK. YOU ALSO ALLEGE THAT THE LOW BIDDER, S. V. PRICE AND COMPANY, WAS PERMITTED TO WITHDRAW ITS BID AFTER OPENING AND PRIOR TO AWARD BECAUSE OF THE SAME MISTAKE. YOU ARGUE THAT THE CONTRACTING OFFICER EITHER KNEW OR SHOULD HAVE KNOWN YOU HAD MADE A SIMILAR ERROR AND THAT RELIEF SHOULD THEREFORE BE PERMITTED YOU ON THE THEORY THAT THE CONTRACTING OFFICER SOUGHT TO TAKE ADVANTAGE OF YOUR MISTAKE.

INQUIRY HAS BEEN MADE OF THE DEPARTMENT OF THE AIR FORCE AND WE ARE INFORMED THAT THE ORIGINAL INDEPENDENT GOVERNMENT ESTIMATE OF THE COST OF THE WORK DID INCLUDE A PROVISION FOR THE COST OF THE MORE EXPENSIVE REFLECTIVE SPHERES AND THAT AMENDMENT NO. 1 TO THE INVITATION WAS MEANT NOT TO EFFECT A CHANGE IN APPLICABLE SPECIFICATIONS, BUT MERELY TO HIGHLIGHT THE FACT OF THE RECENT CHANGE IN THE FEDERAL SPECIFICATION. DISPUTED QUESTIONS OF FACT IT IS THE LONG ESTABLISHED POLICY OF OUR OFFICE TO ACCEPT THE VERSION PRESENTED BY THE ADMINISTRATIVE REPORT IN THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF CORRECTNESS OF THE REPORT. 40 COMP. GEN. 47, 54; 37 COMP. GEN. 568; 16 COMP. GEN. 325.

IT IS TRUE THAT S. V. PRICE AND COMPANY WAS PERMITTED TO WITHDRAW ITS BID (BUT ONLY ON ITEM NO. 1) BECAUSE OF A MISTAKE AS TO THE TYPE OF GLASS BEADS NECESSARY FOR PERFORMANCE BUT THAT COMPANY'S MISTAKE, EVEN THOUGH ATTRIBUTABLE TO ITS OWN NEGLIGENCE, WAS ALLEGED BEFORE AWARD. THE CONTRACTING OFFICER HAD NO ACTUAL KNOWLEDGE THAT YOU HAD MADE THE SAME ERROR AND WE DO NOT THINK HE CAN BE CHARGED WITH CONSTRUCTIVE NOTICE.

THE BIDS RECEIVED ON THE PROCUREMENT WERE AS FOLLOWS:

CHART

ITEM ITEM ESTIMATED

BIDDER NO. 1 NO. 2 TOTAL PRICE

------ ----- ----- ----------- S. V. PRICE AND CO.

.086 .086 $ 13,760 WARREN PAINTING CO. .22 .05 19,900 MCKINLEY PAINTING AND

DECORATING CO. .2355 .2535 39,300 MARINELL PAINT CO. .28 .18 35,800 JEFFERY PAINTING CO. .30 .19 38,100 THE INDEPENDENT GOVERNMENT ESTIMATE OF THE COST OF PERFORMANCE WAS $24,090.

WE UNDERSTAND YOUR PRESENT CONTENTION TO BE, IN EFFECT, THAT SINCE, FOR BID EVALUATION PURPOSES, THE QUANTITY OF ITEM NO. 1 WAS UNDERSTATED BY OVER 200 PERCENT AND THE QUANTITY OF ITEM NO. 2 WAS OVERSTATED BY ABOUT 100 PERCENT IN THE INVITATION FOR BIDS, IT WAS YOUR DECISION TO UNBALANCE YOUR BID BY QUOTING AN UNREASONABLY LOW PRICE ON ITEM NO. 2 AND AN UNREASONABLY HIGH PRICE ON ITEM NO. 1 IN ORDER TO MAKE YOURSELF THE LOW BIDDER. YOU CONTEND FURTHER THAT SINCE THE CONTRACTING OFFICER WAS TOLD BY YOU OF THE INACCURACY OF THE QUANTITIES TO BE USED FOR EVALUATION PURPOSES PRIOR TO AWARD TO YOU, HE SHOULD HAVE, FOR THIS REASON, BEEN AWARE OF THE FACT THAT YOU HAD SUBMITTED AN UNBALANCED BID WITH AN UNREASONABLY HIGH PRICE ON ITEM NO. 1, AND SHOULD THEREFORE HAVE REALIZED THAT YOUR BID OF $0.22 PER SQUARE FOOT ON ITEM NO. 1 DID NOT REALLY REFLECT THE LOWER PRICE YOU WOULD HAVE BID ON THAT ITEM IF THE ESTIMATED QUANTITIES STATED IN THE INVITATION HAD BEEN ACCURATE.

WE DO NOT AGREE WITH YOUR CONTENTION FOR THE FOLLOWING REASONS. YOU WERE ADVISED BY LETTER OF JULY 21, 1960, THAT YOU WERE THE LOW BIDDER, AND COPIES OF THE PROPOSED CONTRACT WERE FORWARDED FOR YOUR SIGNATURE. HOWEVER, THAT LETTER INFORMED YOU THAT THE FINAL CONTRACT WOULD HAVE TO GO TO THE ALASKAN AIR COMMAND FOR APPROVAL, AND FURTHER THAT:

"IT IS EMPHASIZED THAT THIS LETTER DOES NOT CONSTITUTE AN AWARD OF THIS CONTRACT, OR AN OFFICIAL NOTICE TO PROCEED. SUCH DOCUMENTS WILL BE FORWARDED WITH YOUR COPY OF THE CONTRACT, UPON ITS APPROVAL.'

YOU STATE IN YOUR LETTER OF APRIL 15, 1961, THAT YOU OBTAINED A QUOTATION FOR GLASS SPHERES FROM FULLER PAINT AND GLASS COMPANY, PRESUMABLY AT ABOUT $0.30 A POUND, PRIOR TO BID OPENING, WHICH WAS ON JUNE 22, 1960. YOU STATE FULLER REFUSED TO FURNISH THE 1.90 REFRACTIVE INDEX SPHERES AFTER YOU ORDERED FROM THEM AND THAT ATTEMPTS WERE THEN MADE THROUGH SEVERAL OTHER SUPPLIERS TO OBTAIN SPHERES AT A PRICE CLOSE TO THE FULLER QUOTATION WITHOUT SUCCESS. YOU STATE THAT ALL YOUR EFFORTS REVEALED ONLY ONE SOURCE OF SUPPLY IN THE UNITED STATES, THE FLEXOLITE COMPANY.

WE ARE INFORMED BY MAJOR EVELAND THAT THE CONTRACT FILE CONTAINS EVIDENCE THAT THE CONTRACTING OFFICER, YOURSELF, AND A REPRESENTATIVE OF FLEXOLITE CONFERRED IN AN EFFORT TO OBTAIN THE REQUIRED REFLECTIVE MEDIA IN TIME TO COMPLETE THE WORK DURING 1960. YOU STATE IT WAS DISCOVERED TIMELY DELIVERY COULD NOT BE MADE AND YOU REQUESTED POSTPONEMENT OF THE STARTING DATE. IT IS OBVIOUS, THAT YOUR DISCUSSIONS WITH FLEXOLITE INFORMED YOU OF FLEXOLITE'S PRICE FOR THE REQUIRED SPHERES.

IT IS PARTICULARLY SIGNIFICANT, WE THINK, THAT ALL OF THE FOREGOING MATTERS TOOK PLACE BEFORE YOU WERE OFFICIALLY AWARDED THE CONTRACT, WHICH WAS BY LETTER OF SEPTEMBER 20, 1960, ESTABLISHING MAY 1, 1961, AS THE DATE OF NOTICE TO PROCEED. YOU WERE THUS AWARE OF THE FACT THAT YOU COULD NOT SECURE THE SPHERES AT THE PRICE YOU CONTEMPLATED LONG BEFORE YOU RECEIVED OFFICIAL AWARD, BUT IT IS REPORTED BY MAJOR EVELAND THAT NO MENTION OR CLAIM OF MISTAKE WAS MADE BY YOU UNTIL YOUR LETTER OF FEBRUARY 20, 1961. WE NOTE ALSO, THAT YOUR LETTER OF JULY 27, 1960, REGARDING THE UNAVAILABILITY OF THE REQUIRED SPHERES MADE NO MENTION OF ANY MISTAKE IN YOUR BID.

IN THESE CIRCUMSTANCES, YOUR CLAIM OF MISTAKE WAS NOT TIMELY MADE. YOUR CONDUCT UP TO AWARD ON SEPTEMBER 20, 1960, IS, IN OUR OPINION, TANTAMOUNT TO VERIFICATION OF YOUR BID PRICE OF $0.22. HAD YOU CLAIMED ERROR PRIOR TO AWARD, IT IS QUITE LIKELY THAT YOU WOULD HAVE BEEN PERMITTED TO WITHDRAW YOUR BID AS WAS THE PRICE COMPANY. IT IS CLEAR THAT CORRECTION OF YOUR BID COULD NOT HAVE BEEN PERMITTED. A BIDDER MAY NOT, IN SUCH CIRCUMSTANCES, KEEP SILENT ABOUT A MISTAKE HE KNOWS HE HAS MADE UNTIL AFTER HE HAS RECEIVED AWARD OF A CONTRACT AND THEN CLAIM INCREASED COMPENSATION ON THE BASIS OF THAT MISTAKE.