B-156649, JUN. 7, 1965

B-156649: Jun 7, 1965

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TO THE HONORABLE SECRETARY OF AGRICULTURE: REFERENCE IS MADE TO LETTER OF APRIL 26. BIDS RECEIVED IN RESPONSE TO THE SUBJECT INVITATION WERE OPENED ON JUNE 22. SPOKANE WAS SENT PURCHASE ORDER NO. 2056-R4-65. DELIVERY OF THE MATERIAL FOR LOTS NOS. 2 AND 3 WAS MADE IN AUGUST AND SEPTEMBER 1964. THIS AMOUNT BEING $303.30 MORE THAN THE FIGURE UPON WHICH THE CONTRACT WAS AWARDED. - $3.00 LOT NO. 2 - ADDITION ERROR OF THE SUMMARY OF ITEM EXTENSIONS $300.00 LOT NO. 3 - ADDITION ERROR OF THE SUMMARY OF ITEM EXTENSIONS .30 LOT NO. 2 - ITEM NO. 4 WAS SET FORTH BY SPOKANE IN ITS BID SCHEDULE AS FOLLOWS: TABLE C.M.P. THE UNIT PRICE WILL GOVERN. OUR OFFICE HOLDS THE VIEW THAT SUCH PROVISION CAN BE APPLIED ADMINISTRATIVELY WITHOUT REQUESTING VERIFICATION FROM THE BIDDER WHEN THE DIFFERENCE BETWEEN THE UNIT PRICE AND EXTENDED PRICE IS RELATIVELY MINOR OR WHEN THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE EXTENDED PRICE.

B-156649, JUN. 7, 1965

TO THE HONORABLE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO LETTER OF APRIL 26, 1965, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING OUR DECISION CONCERNING AN ERROR IN BID ALLEGED AFTER AWARD BY THE SPOKANE CULVERT AND FABRICATING COMPANY, SPOKANE, WASHINGTON, UNDER INVITATION FOR BIDS NO. R4-64-147, ISSUED BY THE FOREST SERVICE, REGION 4, ON JUNE 2, 1964.

BIDS RECEIVED IN RESPONSE TO THE SUBJECT INVITATION WERE OPENED ON JUNE 22, 1964, AND SPOKANE RECEIVED THE AWARD FOR CULVERTS AND STRUCTURAL PLATE PIPE ON JUNE 29, 1964. THE INVITATION SOLICITED BIDS FOR THREE LOTS; HOWEVER, SPOKANE DID NOT BID ON LOT NO. 1, AND SUBMITTED ITS BID ONLY ON LOTS NOS. 2 AND 3. AS THE LOW BIDDER, SPOKANE WAS SENT PURCHASE ORDER NO. 2056-R4-65, WHICH SHOWED $8,717.28 FOR LOT NO. 2, AND$1,471.94 FOR LOT NO. 3 (A TOTAL OF $10,189.22), THESE BEING THE SAME AMOUNTS THAT THE COMPANY SET FORTH IN ITS BID SCHEDULE OPPOSITE ITS BID FOR THE TOTAL LOT. DELIVERY OF THE MATERIAL FOR LOTS NOS. 2 AND 3 WAS MADE IN AUGUST AND SEPTEMBER 1964, AND ON ABOUT OCTOBER 1, 1964, THE RECEIVING UNIT RECEIVED AN INVOICE FROM SPOKANE IN THE AMOUNT OF $10,492.52, THIS AMOUNT BEING $303.30 MORE THAN THE FIGURE UPON WHICH THE CONTRACT WAS AWARDED.

THE COMPANY ALLEGES ERROR FOR THE FOLLOWING ITEMS:

TABLE

LOT NO. 2 - ITEM 4 - UNIT EXTENSION ERROR--- $3.00

LOT NO. 2 - ADDITION ERROR OF THE SUMMARY OF ITEM

EXTENSIONS $300.00

LOT NO. 3 - ADDITION ERROR OF THE SUMMARY OF ITEM

EXTENSIONS .30

LOT NO. 2 - ITEM NO. 4 WAS SET FORTH BY SPOKANE IN ITS BID SCHEDULE AS FOLLOWS:

TABLE

C.M.P., CULVERT, 18 INCH DIAMETER, 16 GA., 18 FEET LONG -

QUANTITY (NUMBER OF UNITS) 43; UNIT PRICE $43.92; AMOUNT $1,885.56.

SPOKANE OBVIOUSLY MADE A MISTAKE WHEN IT MULTIPLIED THE NUMBER OF UNITS BY THE UNIT PRICE. THE CORRECT FIGURE SHOULD BE $1,888.56, OR A DIFFERENCE OF $3.00. IN THIS CONNECTION, THE INVITATION FOR BIDS PROVIDED THAT IN CASE OF ERROR IN EXTENSION OF PRICE, THE UNIT PRICE WILL GOVERN. OUR OFFICE HOLDS THE VIEW THAT SUCH PROVISION CAN BE APPLIED ADMINISTRATIVELY WITHOUT REQUESTING VERIFICATION FROM THE BIDDER WHEN THE DIFFERENCE BETWEEN THE UNIT PRICE AND EXTENDED PRICE IS RELATIVELY MINOR OR WHEN THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE EXTENDED PRICE. SEE 37 COMP. GEN. 829. IN THE CIRCUMSTANCES HERE PRESENTED, THERE IS LITTLE DOUBT THAT THE COMPANY MADE THE ERROR AS ALLEGED. IN VIEW THEREOF, THE CONTRACT MAY BE AMENDED TO REFLECT THE CORRECT EXTENSION OF THE QUANTITY AND THE UNIT PRICE FOR LOT NO. 2, ITEM NO. 4.

WITH RESPECT TO SPOKANE'S ALLEGATION OF ERROR IN ADDITION IN ARRIVING AT SUM TOTALS FOR LOTS NOS. 2 AND 3, IT IS PROVIDED ON THE FIRST PAGE OF THE SUBJECT INVITATION (STANDARD FORM 33 - INVITATION, BID, AND AWARD (SUPPLY CONTRACT) ( THAT THE BIDDER OFFERS AND AGREES, IF HIS BID BE ACCEPTED, TO FURNISH ANY OR ALL OF THE ITEMS UPON WHICH PRICES ARE QUOTED "AT THE PRICE SET OPPOSITE EACH ITEM.' MOREOVER, IN THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, PARAGRAPH 1 (C) PROVIDES AS FOLLOWS:

"/C) UNIT PRICE FOR EACH UNIT BID ON SHALL BE SHOWN AND SUCH PRICE SHALL INCLUDE PACKING UNLESS OTHERWISE SPECIFIED. A TOTAL SHALL BE ENTERED IN THE AMOUNT COLUMN OF THE SCHEDULE FOR EACH ITEM BID ON. IN CASE OF ERROR IN EXTENSION OF PRICE, THE UNIT PRICE WILL GOVERN.'

THAT BEING THE CASE, THE ISSUE RESOLVES ITSELF INTO WHETHER THE UNIT PRICES QUOTED BY SPOKANE ON LOTS NOS. 2 AND 3 SHOULD PROPERLY PREVAIL OVER THE SUM TOTAL ENTERED IN ERROR FOR THE LOTS IN QUESTION. IN THIS CONNECTION, WE HAVE NOTED THE CONTRACTING OFFICER'S CONTENTION THAT IT IS QUESTIONABLE WHETHER A BONA FIDE ERROR WAS MADE, MAINLY BECAUSE THE BASIS OF THE AWARD WAS BY LOT. THE CONTRACTING OFFICER HAS FURTHER ARGUED THAT THE DIFFERENCE IN THE LOT AS AGAINST THE SUM OF EXTENDED ITEM PRICES COULD BE THE REDUCTION THAT THE BIDDER DECIDED TO SACRIFICE IN AN ATTEMPT TO ASSURE HIMSELF OF AWARD, ALTHOUGH THIS COULD ONLY BE LIKELY IN LOT NO. 2. THEREUPON THE CONTRACTING OFFICER ADMITS THAT A BONA FIDE ERROR EXISTED IN LOT NO. 3 AND IN THE EXTENSION OF ITEM 4, LOT NO. 2, AND ON SUCH BASIS ADMITS THE POSSIBILITY OF THE CONTRACTOR MAKING A BONA FIDE ERROR IN ARRIVING AT HIS TOTAL BID PRICE FOR LOT NO. 2, BUT THE CONTRACTING OFFICER STATES THAT AS HE WAS FOLLOWING THE AWARD CRITERIA IN THE INVITATION, HE DOES NOT FEEL HE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO THE AWARD OF THE CONTRACT.

IN A SOMEWHAT ANALOGOUS SITUATION BEFORE OUR OFFICE FOR DECISION (B 152853, DATED MARCH 5, 1964), A BID SUBMITTED WHICH ON ITS FACE APPEARED TO GIVE AS A TOTAL OF AN ITEMIZED SCHEDULE A FIGURE WHICH, WHEN CHECKED, WAS FOUND TO BE ERRONEOUS BY APPROXIMATELY $600,000. UNDER THE TERMS OF THE INVITATION, THE STATED UNIT PRICES OF INDIVIDUAL ITEMS WERE TO PREVAIL OVER THE PRICE EXTENSIONS IN THE EVENT OF DISCREPANCIES BETWEEN THEM, AND THE LANGUAGE OF THE BID FORM WAS THAT THE, BIDDER OFFERS TO PERFORM THE WORK FOR "THE UNIT PRICES STATED OPPOSITE EACH ITEM OF THE UNIT PRICE SCHEDULE.' THE PAYMENT PROVISIONS OF THE CONTRACT FORM THEREFORE RELATED ALL PAYMENTS TO THE INDIVIDUAL ITEM PRICES STATED IN THE SCHEDULE. SUCH A SITUATION, AND IN THE ABSENCE OF ANY INDICATION TO THE CONTRARY, WE HELD THAT THE NORMAL INTERPRETATION OF THE BID WOULD BE THAT THE INDIVIDUAL ITEM PRICES STATED IN THE SCHEDULE (WHETHER LUMP-SUM UNITS OR ESTIMATED QUANTITIES AT UNIT RATES) WOULD CONTROL AND THE STATED TOTAL WOULD BE SUBJECT TO CORRECTION TO CONFORM TO THE ACTUAL TOTAL OF THE ITEM PRICES. B 152853, MARCH 5, 1964, AFFIRMED JUNE 19, 1964.

IT IS CLEAR THAT THE CUSTOMARY MACHINE CHECKING, HAD IT BEEN DONE, BY THE CONTRACTING OFFICER OF THE EXTENSION AND ADDITIONS OF THE ITEM PRICES WITHIN A LOT OF SPOKANE'S BID, WOULD HAVE READILY DISCLOSED THE DISCREPANCY INVOLVED. BUT SINCE IT WAS NOT DONE, AND NO BAD FAITH IS APPARENT ON THE PART OF SPOKANE IN THE PREPARATION OF ITS BID, WE FEEL THAT THE PRINCIPLE EXPRESSED IN B-152853, MARCH 5, 1964, WOULD BE FOR APPLICATION IN THE INSTANT CASE.

ACCORDINGLY, SPOKANE'S CLAIM IN THE AMOUNT OF $303.30, MAY BE ALLOWED, AND A REFERENCE SHOULD BE MADE TO THIS DECISION IN THE VOUCHER SUPPORTING PAYMENT.