B-155268, OCT. 22, 1964

B-155268: Oct 22, 1964

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BIDS WERE OPENED ON JULY 24. 2 BIDS WERE RECEIVED AS FOLLOWS: TABLE THE T. 122 THE GOVERNMENT'S ESTIMATE FOR THE PROJECT WAS $62. (THE ESTIMATE WAS SUBSEQUENTLY RESET AT $61. THE MATTER IS STATED AS FOLLOWS: "* * * THE BIDDER DID NOT. IT IS DISTINGUISHABLE BECAUSE THE EVIDENCE CLEARLY AND CONVINCINGLY INDICATES SUCH A GROSS LACK OF UNDERSTANDING OF THE JOB TO BE PERFORMED RESULTED IN SUCH A GROSS MISTAKE IN MATERIALS AS TO CONSTITUTE A "MISTAKE" FOR WHICH WITHDRAWAL OF THE BID SHOULD BE PERMITTED.'. WE CONCLUDE THAT THE BIDDER IS ENTITLED TO WITHDRAW ITS BID BECAUSE OF MISTAKE IN BID. THE FACT THAT A BIDDER'S MISTAKE IS DUE TO CARELESSNESS DOES NOT ENTITLE THE GOVERNMENT TO TAKE ADVANTAGE OF THE MISTAKE.

B-155268, OCT. 22, 1964

TO THE HONORABLE JAMES E. WEBB, ADMINISTRATOR, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION:

THIS REFERS TO YOUR LETTER OF SEPTEMBER 25, 1964, REFERENCE: KDG, FROM YOUR DIRECTOR OF PROCUREMENT, RELATIVE TO AN ERROR IN BID ALLEGED BY THE T. O. MURPHY COMPANY PRIOR TO THE AWARD OF A CONTRACT UNDER INVITATION NO. C-123841PB, ISSUED BY YOUR AGENCY ON JUNE 26, 1964.

THE INVITATION CALLED FOR SERVICES, LABOR AND MATERIAL (EXCEPT THAT SHOWN TO BE FURNISHED BY THE GOVERNMENT) FOR THE INSTALLATION OF PIPING AND EQUIPMENT FOR THE HYDROGEN HEAT TRANSFER FACILITY AT THE NASA PLUM BROOK STATION, SANDUSKY, OHIO. BIDS WERE OPENED ON JULY 24, 1964, AND 2 BIDS WERE RECEIVED AS FOLLOWS:

TABLE

THE T. O. MURPHY COMPANY $51,750

ELSBERRY CONTRACTORS, INC. $67,122

THE GOVERNMENT'S ESTIMATE FOR THE PROJECT WAS $62,000. (THE ESTIMATE WAS SUBSEQUENTLY RESET AT $61,258.)

THE CONTRACTING OFFICER SUSPECTED THAT THE LOW BIDDER HAD MADE AN ERROR IN ITS BID. BY LETTER OF JULY 28, 1964, THE BIDDER REAFFIRMED ITS PRICE; HOWEVER, ON JULY 29, 1964, THE BIDDER BY TELEPHONE NOTIFIED THE CONTRACTING OFFICER THAT IT HAD MADE AN ERROR, AND, BY LETTER OF JULY 30, 1964, THE BIDDER ASKED THAT ITS BID BE WITHDRAWN.

THE T. O. MURPHY COMPANY ALLEGED THAT IT HAD NEGLECTED TO INCLUDE IN ITS QUOTATION THE LABOR, MATERIAL, AND TESTING NECESSARY TO INSTALL TWO INLETS (LH2 INLETS) AND ONE OUTLET (LH2 OUTLET), CAUSING AN UNDERSTATED COST OF $10,225. THE BIDDER, UPON REQUEST, FURNISHED WORK SHEETS AND SUPPLIER QUOTATIONS IN SUPPORT OF ITS ALLEGATION OF ERROR. THE CONTRACTING OFFICE CONCLUDED, HOWEVER, THAT THE BIDDER ACTUALLY HAD NOT OMITTED ELEMENTS OF COST AS ALLEGED, BUT RATHER HAD SERIOUSLY UNDERESTIMATED THE MATERIAL REQUIREMENTS OF THE JOB. THE MATTER IS STATED AS FOLLOWS:

"* * * THE BIDDER DID NOT, AS STATED * * * OMIT ONLY THE TWO (2) LH2 INLETS AND ONE (1) LH2 OUTLET, BUT RATHER OMITTED PARTS THEREOF AS WELL AS PARTS OF THE REMAINING WORK--- IN ALL, A CARELESSLY PREPARED BID.'

YOUR OFFICE OF COUNSEL VIEWS THE MATTER AS FOLLOWS:

"THIS OFFICE HAS TAKEN THE POSITION THAT ORDINARILY A MISTAKE FOUNDED UPON ERRORS OF BUSINESS JUDGMENT (E.G. WHEN A CONTRACTOR UNDERESTIMATES THE NUMBER OF MANHOURS TO DO THE JOB) CANNOT BE RELIEVED THROUGH THE MISTAKE-IN-BID PROCEDURE. WE BELIEVE THAT WHILE THE PRESENT SITUATION WOULD APPEAR TO BE A CASE WHERE THE CONTRACTOR UNDERESTIMATED MATERIALS REQUIRED BY THE JOB AND THEREFORE ANALOGOUS TO THE EXAMPLE IN THE PREVIOUS SENTENCE, IT IS DISTINGUISHABLE BECAUSE THE EVIDENCE CLEARLY AND CONVINCINGLY INDICATES SUCH A GROSS LACK OF UNDERSTANDING OF THE JOB TO BE PERFORMED RESULTED IN SUCH A GROSS MISTAKE IN MATERIALS AS TO CONSTITUTE A "MISTAKE" FOR WHICH WITHDRAWAL OF THE BID SHOULD BE PERMITTED.'

WE CONCLUDE THAT THE BIDDER IS ENTITLED TO WITHDRAW ITS BID BECAUSE OF MISTAKE IN BID. THE FACTS OF RECORD INDICATE THAT THE BIDDER FAILED TO PROPERLY TAKE-OFF FROM THE SPECIFICATION DRAWINGS THE MATERIAL REQUIREMENTS OF THE WORK TO BE PERFORMED. CONSEQUENTLY, THE BIDDER FAILED TO INCLUDE ALL THE COSTS OF MATERIAL IN COMPUTING ITS BID. THE FACT THAT A BIDDER'S MISTAKE IS DUE TO CARELESSNESS DOES NOT ENTITLE THE GOVERNMENT TO TAKE ADVANTAGE OF THE MISTAKE. SEE 36 COMP. GEN. 441, 44 AND THE CASES CITED.