B-157202, NOV. 2, 1965

B-157202: Nov 2, 1965

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LTD.: REFERENCE IS MADE TO YOUR LETTER OF JULY 8. UNDER THE IFB BIDS WERE REQUESTED FOR CONSTRUCTION OF ENVIRONMENTAL HYGIENE AGENCY BUILDING AND ANIMAL CARE FACILITY AT EDGEWOOD ARSENAL. THE WORK TO BE PERFORMED WAS DESCRIBED IN THE BASE BID. WOULD BE EVALUATED ON THE BASIS OF THE AGGREGATE COST OF THE BASE SCHEDULE AND ALL ADDITIVES IN THE STATED ORDER OF PRIORITY WHICH WERE WITHIN THE ANNOUNCED AVAILABLE FUNDS. THE AMOUNT ANNOUNCED AT THE OPENING AS AVAILABLE FOR AWARD WAS $2. BIDS WERE OPENED JUNE 22. THE LOW TOTAL BID FOR THE BASE BID AND ALL ADDITIVES WAS RECEIVED FROM WEXLER CONSTRUCTION COMPANY IN THE AMOUNT OF $2. YOUR BID WAS SECOND LOW IN THE AMOUNT OF $2. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS $2.

B-157202, NOV. 2, 1965

TO SOVEREIGN CONSTRUCTION CO., LTD.:

REFERENCE IS MADE TO YOUR LETTER OF JULY 8, 1965, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR ALLEGATION OF ERROR IN YOUR BID AND YOUR PROTEST OF AWARD TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. ENG 18- 020-65-77, ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, BALTIMORE, MARYLAND.

UNDER THE IFB BIDS WERE REQUESTED FOR CONSTRUCTION OF ENVIRONMENTAL HYGIENE AGENCY BUILDING AND ANIMAL CARE FACILITY AT EDGEWOOD ARSENAL, MARYLAND. THE WORK TO BE PERFORMED WAS DESCRIBED IN THE BASE BID, CONSISTING OF ITEMS 1 AND 2, AND NINE ADDITIVE ITEMS, NUMBERED A1 THROUGH A9. ADDITIVE A2 COVERED ADDITIONAL COST FOR PROVIDING ONE INHALATION CHAMBER COMPLETE WITH CONSOLE, ELECTROSTATIC PRECIPITATOR, AIR-CONDITIONER (ON ROOF) AND AIR COMPRESSOR (IN MECHANICAL ROOM). ADDITIVE A3 COVERED ADDITIONAL COST FOR INHALATION CHAMBER, SECOND CONSOLE AND SECOND ELECTROSTATIC PRECIPITATOR. THE INVITATION PROVIDED THAT ANNOUNCEMENT WOULD BE MADE AT THE BID OPENING, AND PRIOR TO THE OPENING OF ANY BID, OF THE NET AMOUNT OF MONEY AVAILABLE FOR AWARD, AND THAT THE BIDS, IF WITHIN LEGAL COST LIMITATION, WOULD BE EVALUATED ON THE BASIS OF THE AGGREGATE COST OF THE BASE SCHEDULE AND ALL ADDITIVES IN THE STATED ORDER OF PRIORITY WHICH WERE WITHIN THE ANNOUNCED AVAILABLE FUNDS. THE AMOUNT ANNOUNCED AT THE OPENING AS AVAILABLE FOR AWARD WAS $2,768.083.

BIDS WERE OPENED JUNE 22, 1965, AND THE LOW TOTAL BID FOR THE BASE BID AND ALL ADDITIVES WAS RECEIVED FROM WEXLER CONSTRUCTION COMPANY IN THE AMOUNT OF $2,762,800. YOUR BID WAS SECOND LOW IN THE AMOUNT OF $2,770,100. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS $2,901,202.

ON THE DAY OF BID OPENING, AND FOLLOWING SUCH OPENING, MR. R. J. FRANKEL, PRESIDENT OF YOUR COMPANY, TELEPHONED THE OFFICE OF THE BALTIMORE ENGINEER DISTRICT, ALLEGING A MISTAKE IN THE PRICE OF ADDITIVE A3. HE WAS REQUESTED TO PRESENT THE NECESSARY EVIDENCE IN SUPPORT OF THE ALLEGED MISTAKE. ON JUNE 23 EVIDENCE WHICH INCLUDED WORKSHEETS WAS SUBMITTED INDICATING THAT A PROSPECTIVE SUBCONTRACTOR, WASHINGTON TECHNOLOGICAL ASSOCIATES, HAD QUOTED A PRICE OF $100,000 FOR ADDITIVE A2 AND $125,000 FOR ADDITIVE A3, WHICH PRICES HAD BEEN INSERTED IN YOUR BID WITHOUT REALIZING THAT THE QUOTATION FOR A3 INCLUDED THE WORK UNDER A2, AND THAT THE PRICE FOR A3 SHOULD THEREFORE HAVE BEEN $25,000. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES, THE CHIEF OF ENGINEERS DENIED YOUR REQUEST TO CORRECT THE BID AND AWARD WAS SUBSEQUENTLY MADE TO WEXLER CONSTRUCTION COMPANY.

IN PROTESTING THIS ACTION YOU HAVE POINTED OUT THE SUBSTANTIAL SAVING WHICH WILL ACCRUE TO THE GOVERNMENT IF YOUR ARE PERMITTED TO CORRECT YOUR BID. YOU CONTEND FURTHER THAT A COMPARISON OF YOUR BID ON ITEM A3 WITH OTHER BIDS AND WITH THE GOVERNMENT ESTIMATE SHOWS CLEARLY THAT AN ERROR HAS BEEN MADE, AND THAT RELIEF SHOULD BE GRANTED UNDER SECTION 2-406.3 (A) (3) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH PROVIDES AS FOLLOWS:

"/A) THE DEPARTMENTS ARE AUTHORIZED TO MAKE THE FOLLOWING ADMINISTRATIVE DETERMINATIONS IN CONNECTION WITH MISTAKES IN BIDS, OTHER THAN APPARENT CLERICAL MISTAKES, ALLEGED AFTER OPENING OF BIDS AND PRIOR TO AWARD.

"/3) WHERE THE BIDDER REQUESTS PERMISSION TO CORRECT A MISTAKE IN HIS BID AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, A DETERMINATION PERMITTING THE BIDDER TO CORRECT THE MISTAKE MAY BE MADE; PROVIDED THAT, IN THE EVENT SUCH CORRECTION WOULD RESULT IN DISPLACING ONE OR MORE LOWER BIDS, THE DETERMINATION SHALL NOT BE MADE UNLESS THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. IF THE EVIDENCE IS CLEAR AND CONVINCING ONLY AS TO THE MISTAKE, BUT NOT AS TO THE INTENDED BID, A DETERMINATION PERMITTING THE BIDDER TO WITHDRAW HIS BID MAY BE MADE.'

YOU ALSO REFER TO OUR DECISION NO. B-148081, MARCH 5, 1965, (CORRECT YEAR 1962), WHICH, YOU STATE, POINTS OUT UNDER SUBSTANTIALLY SIMILAR CIRCUMSTANCES THAT THE GOVERNMENT HAS THE DISCRETION TO ACCEPT ANY ITEM OR COMBINATION OF ITEMS AND COULD, UNDER THE PRESENT CONDITIONS, ACCEPT YOUR BASE BID, PLUS ADDITIVE ITEMS A1 AND A2, OMITTING THE INCORRECT BID ITEM A3.

IT IS TRUE THAT IN CERTAIN CASES WHERE A MISTAKE HAS BEEN ALLEGED PROMPTLY AFTER OPENING BIDS BUT BEFORE AWARD OF THE CONTRACT, AND THERE HAS BEEN A TIMELY PRESENTATION OF CONVINCING EVIDENCE THAT A MISTAKE WAS MADE, ITS NATURE, HOW IT OCCURRED, AND WHAT THE BID PRICES WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THIS OFFICE HAS PERMITTED THE BID TO BE CORRECTED, BUT ALMOST WITHOUT EXCEPTION THESE CASES HAVE INVOLVED CORRECTIONS TO PERMIT INCREASES IN LOW BIDS, WHICH DID NOT AFFECT THE RELATIVE STANDING OF OTHER BIDDERS.

AS SET FORTH IN THE PROVISION OF ASPR QUOTED ABOVE, A STRICTER RULE MUST APPLY TO CORRECTIONS WHICH WOULD DISPLACE A LOWER RESPONSIVE, RESPONSIBLE BIDDER. WHERE CORRECTION IS ALLOWED IN A BID WHICH IS ON ITS FACE THE LOWEST RECEIVED, AND THE CORRECTION DOES NOT MAKE IT HIGHER THAN THE NEXT LOWEST BID, THE RIGHTS OF OTHER BIDDERS ARE NOT SUBSTANTIALLY AFFECTED; BUT IN A CASE SUCH AS HERE PRESENTED, WHERE A DOWNWARD CORRECTION WOULD RESULT IN DISPLACEMENT OF ONE OR MORE OTHER BIDDERS, THE INTEREST OF THE GOVERNMENT IN PRESERVING AND MAINTAINING THE COMPETITIVE BIDDING SYSTEM REQUIRES THAT THE RIGHTS OF OTHER BIDDERS BE CONSIDERED AS CALLING FOR DENIAL OF THE CORRECTION, EXCEPT WHERE THE EXISTENCE OF THE MISTAKE AND THE AMOUNT OF THE INTENDED BID CAN BE ASCERTAINED SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. 37 COMP. GEN. 210.

WHILE WE AGREE THAT A COMPARISON OF YOUR QUOTATION ON ADDITIVE A3 WITH THE GOVERNMENT'S ESTIMATE AND WITH OTHER BIDDERS' PRICES INDICATES THAT A MISTAKE WAS MADE, WE MUST ALSO AGREE WITH THE POSITION OF THE CONTRACTING AGENCY THAT THE AMOUNT OF YOUR INTENDED BID ON THIS ITEM CANNOT BE ASCERTAINED WITHOUT REFERRING TO YOUR WORKSHEETS, WHICH ARE NOT A PART OF THE BID. IT SHOULD BE NOTED, PARENTHETICALLY, THAT YOUR BID ON ADDITIVE A3 WAS ACTUALLY YOUR INTENDED BID, THE ONLY ERROR BEING YOUR FAILURE TO NOTE THAT THE SUBBID ON ADDITIVE A3 INCLUDED ADDITIVE A2. IT ALSO APPEARS FROM DOCUMENTS WHICH WERE NOT A PART OF YOUR BID THAT THE ORIGINAL QUOTATIONS FROM WASHINGTON TECHNOLOGICAL ASSOCIATES ON ADDITIVE ITEMS A2 AND A3 WERE $100,000 AND $125,000 AND THAT THESE WERE LATER INCREASED TO $111,149 AND $135,937, RESPECTIVELY. SINCE YOU FELT THAT THE INITIAL QUOTATIONS REPRESENTED THE FAIR COST OF THE WORK AND THAT A SUBCONTRACT COULD BE ENTERED INTO ON THE BASIS OF SUCH FIGURES, THEY WERE ENTERED ON YOUR BID SUMMARY SHEETS, AND THE SUMS OF $600 AND $700, WHICH YOU ORIGINALLY ADDED TO COVER BOND PREMIUMS, WERE DROPPED FROM YOUR FINAL BID FOR COMPETITIVE PURPOSES. IN THIS CONNECTION, THE GOVERNMENT ESTIMATE OF $25,885 ON ADDITIVE A3 COMPARES TO THE ACTUAL BID PRICES RANGING FROM $15,000 TO 28,000. THE GOVERNMENT ESTIMATE OF $103,540 ON ADDITIVE A2 COMPARES TO THE RESPECTIVE BIDS OF WEXLER AND SECURITY CONSTRUCTION CO., THE SECOND AND THIRD LOW BIDDERS IN THE AMOUNTS OF $116,700 AND $115,000. FROM THE FOREGOING, IT IS APPARENT THAT THERE ARE SUBSTANTIAL VARIATIONS IN THE ABOVE FIGURES AND THAT A COMPARISON OF SAME DOES NOT DISCLOSE WHAT YOUR BID ON ADDITIVE A3 SHOULD HAVE BEEN. NOR IS THERE ANY OTHER WAY TO ASCERTAIN FROM THE BID ALONE WHAT HAS BEEN INCLUDED TO ENLARGE THE PRICE OF THIS ITEM. ONLY REFERRING TO YOUR WORKSHEETS, CAN IT BE DETERMINED THAT YOUR PRICE FOR ADDITIVE A3 INCLUDED THE WORK UNDER ADDITIVE A2.

CONCERNING YOUR CONTENTION THAT ITEM A3 SHOULD HAVE BEEN DISREGARDED IN CONSIDERING YOUR BID FOR AWARD, IN THE CASE CONSIDERED IN OUR DECISION B- 148081, MARCH 5, 1962, TO WHICH YOU REFER, THE GOVERNMENT WAS PERMITTED BY THE TERMS OF THE INVITATION TO ACCEPT ANY ITEM OR COMBINATION OF ITEMS THAT IT MIGHT CHOOSE. HOWEVER, IN THE PRESENT CASE, AS STATED HEREIN, THE INVITATION PROVIDED THAT BIDS WOULD BE EVALUATED ON THE BASIS OF THE AGGREGATE COST OF THE BASE SCHEDULE AND ALL ADDITIVES WHICH WERE WITHIN THE ANNOUNCED AVAILABLE FUNDS. SINCE THE LOW BID, INCLUDING ALL ADDITIVES, WAS WITHIN THE AVAILABLE FUNDS, IT IS OUR OPINION THAT AWARD WAS REQUIRED TO BE MADE ON THE BASIS OF THE TOTAL AGGREGATE COST, AND THERE WAS NO DISCRETION IN THE CONTRACTING OFFICER TO OMIT ADDITIVE ITEM A3.

ACCORDINGLY, WE SEE NO BASIS ON WHICH WE WOULD BE JUSTIFIED IN QUESTIONING THE ACTION OF THE DEPARTMENT OF THE ARMY IN DENYING YOUR REQUEST FOR CORRECTION OF YOUR BID, AND YOUR PROTEST AGAINST THE CONTRACT AWARDED TO WEXLER CONSTRUCTION COMPANY MUST THEREFORE BE DENIED.