B-156291, APR. 6, 1965

B-156291: Apr 6, 1965

Additional Materials:

Contact:

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

 

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

TO THE HONORABLE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO LETTER OF MARCH 9. BIDS WERE OPENED ON NOVEMBER 10. DYER WAS AWARDED THE CONTRACT FOR ITEMS 1 THROUGH 6. WHICH WAS ITEM NO. 6 UNDER THE INVITATION FOR BIDS. THE COMPANY ADVISED AS FOLLOWS: "ATTACHED IS A BREAKDOWN OF COST FOR INSTALLATION OF THE TRANSFORMER STATION DESCRIBED UNDER SPECIFICATION 787. WE WILL COMPLY. WILL REQUEST REMUNERATION IN THE AMOUNT SHOWN ON THE ATTACHED BREAKDOWN.'. IN RESPONSE TO THE INVITATION THREE BIDS WERE RECEIVED AS FOLLOWS: TOTAL (ITEMS 1 BIDDERS NAME THROUGH 6) DYER AND DYER. 000 WHILE THE QUESTION OF WHETHER THE WORDING OF SECTION 787-2.1 OF THE SPECIFICATIONS WAS SUBJECT TO MISINTERPRETATION BY THE CONTRACTOR IS A DEBATABLE MATTER.

B-156291, APR. 6, 1965

TO THE HONORABLE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER OF MARCH 9, 1965, FROM THE ASSISTANT SECRETARY, RELATIVE TO A MISTAKE IN BID ALLEGED AFTER AWARD BY DYER AND DYER, INC., LOUISVILLE, KENTUCKY, UNDER INVITATION FOR BIDS NO. 31-MC 5 EODC-E-12-1-65, ISSUED BY THE UNITED STATES DEPARTMENT OF THE INTERIOR, NATIONAL PARK SERVICE, MAMMOTH CAVE, KENTUCKY, ON OCTOBER 19, 1964.

THE INVITATION SOLICITED BIDS FOR CONSTRUCTION OF APPROXIMATELY 250 FEET OF 4-INCH WATER LINE, 700 FEET OF 6-INCH AND 8-INCH SEWER AND 425 FEET OF UNDERGROUND PRIMARY ELECTRIC INCLUDING A TRANSFORMER STATION (WITHOUT TRANSFORMERS) TO SERVE THE NEW CONCESSIONERS LODGE AT MAMMOTHCAVE NATIONAL PARK, MAMMOTH CAVE, KENTUCKY. BIDS WERE OPENED ON NOVEMBER 10, 1964, AND DYER WAS AWARDED THE CONTRACT FOR ITEMS 1 THROUGH 6, UNDER CONTRACT NO. 14 -10-0131-1355, DATED NOVEMBER 12, 1964, IN THE AMOUNT OF $15,276.

THE COMPANY INFORMED THE CONTRACTING OFFICER BY TELEPHONE AND LATER BY LETTER DATED DECEMBER 8, 1964, THAT IT HAD MADE A MISTAKE IN INTERPRETING THE CONTRACT SPECIFICATIONS. SPECIFICATION 787, SECTION 787-2.1, TRANSFORMER STATION, WHICH WAS ITEM NO. 6 UNDER THE INVITATION FOR BIDS, PROVIDED IN PART AS FOLLOWS:

"A THREE-PHASE TRANSFORMER STATION SHALL BE INSTALLED TO SERVE UTILITY COMPANY TRANSFORMERS AND SECONDARY FEEDERS BY OTHERS. * * *"

BY LETTER DATED DECEMBER 29, 1964, THE COMPANY ADVISED AS FOLLOWS:

"ATTACHED IS A BREAKDOWN OF COST FOR INSTALLATION OF THE TRANSFORMER STATION DESCRIBED UNDER SPECIFICATION 787, SECTION 787 - 2.1 TRANSFORMER STATION.

"AS STATED AT THE PRE-CONSTRUCTION CONFERENCE AND REITERATED IN MY LETTER OF DECEMBER 8, 1964, THE CONTRACT REQUIRED OTHERS TO INSTALL THE TRANSFORMER STATION.

"SHOULD YOU DESIRE THAT WE INSTALL THE STATION, WE WILL COMPLY, BUT WILL REQUEST REMUNERATION IN THE AMOUNT SHOWN ON THE ATTACHED BREAKDOWN.'

THE COMPANY REQUESTED AN ADDITIONAL AMOUNT OF $4,863 FOR THE INSTALLATION OF THE TRANSFORMER STATION.

IN RESPONSE TO THE INVITATION THREE BIDS WERE RECEIVED AS FOLLOWS:

TOTAL (ITEMS 1

BIDDERS NAME THROUGH 6)

DYER AND DYER, INC. $15,276

GERALD CONSTRUCTION, INC. 23,450

WALTER DAVIS 24,803

GOVERNMENT ESTIMATE 21,000

WHILE THE QUESTION OF WHETHER THE WORDING OF SECTION 787-2.1 OF THE SPECIFICATIONS WAS SUBJECT TO MISINTERPRETATION BY THE CONTRACTOR IS A DEBATABLE MATTER, WE NOTE THAT THE CONTRACTING OFFICER IN HIS MEMORANDUM OF JANUARY 12, 1965, STATES THAT SEVERAL PROSPECTIVE BIDDERS DID RAISE THE QUESTION AS TO THE PARTY RESPONSIBLE FOR INSTALLATION OF THE STATION. VIEW THEREOF, WE THINK DYER SHOULD ALSO HAVE BEEN APPRISED OF WHAT WAS INTENDED.

AS A GENERAL RULE, WHEN A UNILATERAL ERROR IS ALLEGED AFTER AWARD, THE CONTRACT IS NOT SUBJECT TO REFORMATION SINCE A BINDING AND ENFORCEABLE CONTRACT ARISES UPON ACCEPTANCE. SALIGMAN V. UNITED STATES, 56 F.SUPP. 505, 507 AND CASES CITED THEREIN. THIS GENERAL RULE, HOWEVER, IS NOT FOR APPLICATION WHERE THE CIRCUMSTANCES ARE SUCH THAT THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR PRIOR TO AWARD. IN SUCH CASES, ACCEPTANCE BY THE CONTRACTING OFFICER DOES NOT RESULT IN A BINDING CONTRACT AND EITHER OUR OFFICE OR THE COURTS WILL ALLOW APPROPRIATE RELIEF. 37 COMP. GEN. 685; 17 COMP. GEN. 575. IN THE INSTANT CASE WE BELIEVE THE RECORD CLEARLY SHOWS NOT ONLY THE EXISTENCE OF THE ALLEGED ERROR, BUT THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN PLACED ON NOTICE OF THE POSSIBILITY OF ERROR. IN VIEW OF THE FACT THAT THE BIDS OF THE OTHER TWO BIDDERS WERE WITHIN APPROXIMATELY $1,400 OF ONE ANOTHER AND IN LINE WITH THE GOVERNMENT ESTIMATE, DYER'S BID BEING $8,174 LESS THAN THE SECOND LOW BIDDER, THE CONTRACTING OFFICER SHOULD NOT HAVE ACCEPTED THE BID SUBMITTED BY DYER WITHOUT FIRST OBTAINING VERIFICATION.

SINCE DYER'S REQUEST FOR AN ADDITIONAL $4,863 DOES NOT EXCEED THE NEXT LOWEST BID, WE CONCUR WITH THE REPORT OF THE CONTRACTING OFFICER AND YOUR OFFICE, THAT THE CONTRACTOR IS ENTITLED TO THE REQUESTED ADJUSTMENT.