B-157058, JUL. 19, 1965

B-157058: Jul 19, 1965

Additional Materials:

Contact:

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

 

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

VETERANS ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED JUNE 18. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. V5266P-314 IS BASED. PROSPECTIVE BIDDERS WERE REQUESTED TO QUOTE A JOB PRICE AND WERE ADVISED THAT THE UNIT "JOB" CONSISTED OF TWO CLEANINGS DURING THE YEAR. THE BID OF THE COMPANY WAS ACCEPTED. AMERICAN ADVISED THE CONTRACTING OFFICER THAT IN COMPUTING ITS BID PRICE FOR THE WORK IT FAILED TO REALIZE THAT THE UNIT "JOB" COVERED TWO CLEANINGS OF THE WINDOWS RATHER THAN ONE CLEANING AND THAT THEREFORE ITS BID PRICE SHOULD HAVE BEEN DOUBLED. THAT IS. 790 AND THAT THE GOVERNMENT ESTIMATE WAS $3. CONSIDERING THE FACT THAT THERE IS ONLY A DIFFERENCE OF $352 BETWEEN THESE TWO BIDS ON A $3.

B-157058, JUL. 19, 1965

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JUNE 18, 1965, WITH ENCLOSURES, FILE REFERENCE 074B, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE AMERICAN HOUSE AND WINDOW CLEANING COMPANY, HEREINAFTER REFERRED TO AS AMERICAN, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. V5266P-314 IS BASED.

THE VETERANS ADMINISTRATION HOSPITAL, TOPEKA, KANSAS, BY INVITATION NO. 66-2, REQUESTED BIDS FOR FURNISHING WINDOW CLEANING SERVICES AT THE HOSPITAL. PROSPECTIVE BIDDERS WERE REQUESTED TO QUOTE A JOB PRICE AND WERE ADVISED THAT THE UNIT "JOB" CONSISTED OF TWO CLEANINGS DURING THE YEAR. IN RESPONSE AMERICAN SUBMITTED A BID OFFERING TO PERFORM THE JOB FOR THE LUMP SUM OF $2,180. ON MAY 24, 1965, THE BID OF THE COMPANY WAS ACCEPTED.

IN A LETTER DATED MAY 28, 1965, AMERICAN ADVISED THE CONTRACTING OFFICER THAT IN COMPUTING ITS BID PRICE FOR THE WORK IT FAILED TO REALIZE THAT THE UNIT "JOB" COVERED TWO CLEANINGS OF THE WINDOWS RATHER THAN ONE CLEANING AND THAT THEREFORE ITS BID PRICE SHOULD HAVE BEEN DOUBLED, THAT IS, $4,360 FOR TWO CLEANINGS. THE COMPANY REQUESTED THAT IT BE PERMITTED TO WITHDRAW ITS BID. BY LETTER DATED JUNE 7, 1965, THE COMPANY SUBMITTED ITS ORIGINAL ESTIMATE SHEET WHICH SHOWS THAT THE COMPANY BASED ITS BID PRICE OF $2,180 ON ONE CLEANING OF THE WINDOWS.

THE RECORD INDICATES THAT THE TWO OTHER BIDDERS ON THE WORK QUOTED JOB PRICES OF $3,438 AND $3,790 AND THAT THE GOVERNMENT ESTIMATE WAS $3,000. CONSIDERING THE FACT THAT THERE IS ONLY A DIFFERENCE OF $352 BETWEEN THESE TWO BIDS ON A $3,500 JOB AND THE ADDITIONAL FACT THAT THE BID OF AMERICAN IS $1,258 LESS THAN THE LOWEST OF THESE TWO BIDS, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE COMPANY'S BID OF $2,180 AND, CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

WE AGREE WITH THE STATEMENT OF THE DIRECTOR THAT THERE IS LITTLE ROOM FOR DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED. ALSO, WE AGREE WITH HIS STATEMENT THAT THE DIFFERENCE IN BID PRICES SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF AN ERROR IN AMERICAN'S BID, NOTWITHSTANDING THE FACT THAT THIS INVITATION COVERED LESS WORK THAN THE PREVIOUS INVITATION, PARTICULARLY SINCE THE RECORD INDICATES THAT LAST YEAR'S CONTRACTOR, THE THIRD LOWEST BIDDER, FOUND IT NECESSARY TO INCREASE HIS ANNUAL RATE BY $344 TO $3,790.

ACCORDINGLY, AND SINCE IT APPEARS THAT NO WORK HAS BEEN COMMENCED BY AMERICAN, CONTRACT NO. V5266P-314 MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY, AS RECOMMENDED BY THE DIRECTOR.

THE ENCLOSURES SUBMITTED WITH THE DIRECTOR'S LETTER ARE RETURNED, AS REQUESTED.