B-157742, OCT. 11, 1965

B-157742, OCT. 11, 1965

TO THE HONORABLE WILLIAM J. DRIVER, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 24, 1965, FROM MR. CLYDE C. COOK, DIRECTOR, SUPPLY MANAGEMENT SERVICE, YOUR FILE REFERENCE 074B, WITH REGARD TO A MISTAKE IN BID ALLEGED AFTER AWARD BY OAKWOOD TILE COMPANY, DETROIT, MICHIGAN, UNDER CONTRACT NO. V5135C-183, INVITATION 65-75, ISSUED BY THE VETERANS ADMINISTRATION HOSPITAL, DEARBORN, MICHIGAN, ON JUNE 18, 1965.

THE INVITATION REQUESTED BIDS FOR CONSTRUCTION OF A COMMUNITY SHOWER AND CONTAINED TWO ITEMS, WHICH ARE LISTED BELOW:

1. MEMBRANE INSTALLATION SHOWER ROOM WALL REPAIR AND WALL CLOSING AND TILE WORK (INCLUDING SHOWER ROOM DOOR AND FRAME).

2. CLOSING CORRIDOR OPENINGS AND RELOCATING TWO DOORS AND TWO FRAMES WITH NECESSARY PLASTER REPAIR.

IT WAS CONTEMPLATED THAT AWARD WOULD BE MADE TO THE BIDDER QUOTING THE LOWEST AGGREGATE PRICE FOR ITEMS 1 AND 2, BUT THE RIGHT WAS RESERVED TO MAKE AWARD TO THE LOW BIDDER ON ITEM 1 ONLY.

THE OAKWOOD TILE COMPANY BID ONLY ON ITEM 1. ITS BID IN THE AMOUNT OF $1,881 WAS THE ONLY BID RECEIVED ON JUNE 29, 1965, THE BID OPENING DATE. ITEM 1 OF THE CONTRACT WAS AWARDED TO OAKWOOD TILE COMPANY ON JUNE 29, 1965, AT ITS BID PRICES EVEN THOUGH THE GOVERNMENT ESTIMATE FOR THE WORK WAS $4,000.

ON AUGUST 26, 1965, AND BEFORE COMMENCEMENT OF THE WORK, THE CONTRACTOR INSPECTED THE WORK SITE AND, AT THAT TIME, ALLEGED THAT IT DID NOT UNDERSTAND THAT IT WAS EXPECTED TO PROVIDE AND INSTALL METAL SHOWER STALLS OR PLASTER THE WALLS ABOVE THE AREA WHICH WAS TO BE TILED. IN SUPPORT THEREOF, THE CONTRACTOR SUBMITTED COPIES OF ITS ORIGINAL WORKSHEETS WHICH SHOW THAT IT DID NOT INCLUDE THE COST OF THIS WORK. THE CONTRACTOR HAS STATED THAT IT IS WILLING TO DO THE ADDITIONAL WORK FOR $1,060, WHICH REPRESENTS ONLY ITS COST AND INCLUDES NOTHING FOR PROFIT OR OVERHEAD. THE ENGINEERING OFFICER CONSIDERS THIS AMOUNT TO BE "MORE THAN REASONABLE.'

THE CONTRACTOR'S WORKSHEETS REASONABLY INDICATE THAT A BONA FIDE MISTAKE WAS, IN FACT, MADE. EVEN THOUGH ONLY ONE BID WAS RECEIVED, IT IS BELIEVED THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION BEFORE MAKING THE AWARD SINCE THE AMOUNT OF THE BID WAS LESS THAN ONE-HALF OF THE GOVERNMENT ESTIMATE.

IN VIEW OF THESE FACTS, WE CONCUR WITH THE OPINION OF THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, THAT THE CONTRACT IN QUESTION SHOULD BE MODIFIED TO PROVIDE FOR AN INCREASE IN PRICE OF $1,060, OR FOR A TOTAL CONTRACT CONSIDERATION OF $2,941.

THE PAPERS SUBMITTED WITH THE LETTER OF SEPTEMBER 24, 1965, ARE RETURNED AS REQUESTED.