B-157229, AUG. 5, 1965

B-157229: Aug 5, 1965

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TO THE SECRETARY OF THE INTERIOR: FURTHER REFERENCE IS MADE TO LETTER OF JULY 12. BIDS WERE REQUESTED FOR CONSTRUCTION OF A REINFORCED CONCRETE WATER CONTROL STRUCTURE. THE BIDS WERE OPENED ON MAY 14. THE LOW BID WAS SUBMITTED BY MAHRER CONSTRUCTION COMPANY IN THE AMOUNT OF $22. FOUR OTHER BIDS WERE RECEIVED RANGING FROM $28. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS $25. THE BID OF MAHRER CONSTRUCTION COMPANY WAS ACCEPTED ON MAY 26. THE EVIDENCE SUBMITTED BY MAHRER INDICATES THAT THE ERROR WAS MADE. AWARD WAS TO BE MADE ON THE LOWEST AGGREGATE BID. THE BIDDING SCHEDULE WAS BROKEN DOWN INTO THREE ITEMS. A COMPARISON OF MAHRER'S BID WITH THE GOVERNMENT'S ESTIMATE IS AS FOLLOWS: TABLE ITEM NO.

B-157229, AUG. 5, 1965

TO THE SECRETARY OF THE INTERIOR:

FURTHER REFERENCE IS MADE TO LETTER OF JULY 12, 1965, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, SUBMITTING THE CLAIM OF MAHRER CONSTRUCTION COMPANY FOR ADDITIONAL COMPENSATION BECAUSE OF AN ALLEGED ERROR IN BID UNDER INVITATION FOR BIDS NO. SFW 3-615.

BIDS WERE REQUESTED FOR CONSTRUCTION OF A REINFORCED CONCRETE WATER CONTROL STRUCTURE, PLACING EMBANKMENTS FOR AN EARTH DIKE, PLACING RIPRAP WITH GRAVEL SUBBASE, EXCAVATING A DITCH, AND CONSTRUCTING APPROXIMATELY 650 FEET OF ACCESS ROAD WITH A 30 FOOT SQUARE PARKING LOT. THE BIDS WERE OPENED ON MAY 14, 1965, AND THE LOW BID WAS SUBMITTED BY MAHRER CONSTRUCTION COMPANY IN THE AMOUNT OF $22,950. FOUR OTHER BIDS WERE RECEIVED RANGING FROM $28,000 TO $37,220. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS $25,950.

THE BID OF MAHRER CONSTRUCTION COMPANY WAS ACCEPTED ON MAY 26, 1965, AND UPON RECEIPT OF THE AWARD THE COMPANY REQUESTED THAT THE CONTRACT PRICE BE INCREASED TO $26,164 BECAUSE OF AN ALLEGED ERROR IN ITS BID UNDER ITEM 1, WATER CONTROL STRUCTURE, IN FAILING TO INCLUDE THE COST OF CERTAIN STRUCTURAL STEEL. THE EVIDENCE SUBMITTED BY MAHRER INDICATES THAT THE ERROR WAS MADE, AS ALLEGED.

AWARD WAS TO BE MADE ON THE LOWEST AGGREGATE BID, BUT THE BIDDING SCHEDULE WAS BROKEN DOWN INTO THREE ITEMS. A COMPARISON OF MAHRER'S BID WITH THE GOVERNMENT'S ESTIMATE IS AS FOLLOWS:

TABLE

ITEM NO. DESCRIPTION ESTIMATE MAHRER

1 WATER CONTROL STRUCTURE $20,800 $19,600

2 ACCESS ROAD 650 650

3 EMBANKMENT 4,500 2,700

TOTAL $25,950 $22,950

THE DIFFERENCE BETWEEN THE GOVERNMENT ENGINEER'S ESTIMATE AND MAHRER'S PRICE ON ITEM 1, AS TO WHICH THE ERROR IS ALLEGED, IS NOT GREAT, AND THE ABSTRACT OF BIDS SHOWS THAT THE PRICE OF THE SECOND LOW BIDDER ON ITEM 1 WAS $19,300, WHICH IS EVEN LOWER THAN THAT OF MAHRER.

IN ORDER TO JUSTIFY RELIEF BY INCREASE OF THE CONTRACT PRICE AFTER AWARD, THE CONTRACTING OFFICER MUST HAVE BEEN ON NOTICE OF THE ERROR PRIOR TO MAKING THE AWARD. HERE HE HAD NO ACTUAL NOTICE OF THE EXISTENCE OF ERROR, AND FROM THE FACTS AS REPORTED NEITHER THE DIFFERENCE IN PRICES NOR ANYTHING ELSE ABOUT THE BID WAS SUCH AS TO GIVE CONSTRUCTIVE NOTICE OF POSSIBLE ERROR. IN THE CIRCUMSTANCES THE ACCEPTANCE OF THE BID GAVE RISE TO A VALID AND BINDING CONTRACT UNDER WHICH THE GOVERNMENT ACQUIRED VESTED RIGHTS WHICH CANNOT BE SURRENDERED OR MODIFIED BY ANY OFFICER OR AGENT OF THE GOVERNMENT WITHOUT LEGAL CONSIDERATION.

SINCE THE MISTAKE WAS SOLELY THAT OF THE BIDDER AND THE GOVERNMENT WAS NOT IN ANY WAY ON NOTICE OF OR RESPONSIBLE FOR IT, THE CONTRACT MUST BE ENFORCED AS WRITTEN AND NO AMOUNT MAY BE PAID IN ADDITION TO THE CONTRACT PRICE.