B-159189, MAY 27, 1966

B-159189: May 27, 1966

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TO SECRETARY OF AGRICULTURE: REFERENCE IS MADE TO A LETTER DATED MAY 11. BIDS WERE RECEIVED FOR THE CONSTRUCTION OF TWO LOG CRIB DAMS. AWARD WAS MADE TO D- CONSTRUCTION COMPANY IN THE AMOUNT OF $35. THAT THESE FIGURES WERE NOT INCLUDED. THE BIDS WERE $35. THE CONTRACTING OFFICER HAS STATED THAT BIDS ON THIS TYPE OF JOB HAVE USUALLY BEEN 100 PERCENT MORE THAN THE ENGINEER'S ESTIMATE BUT THAT THE REASON FOR SUCH HIGH BIDS HAS BEEN SOMEWHAT ALLEVIATED. THE CONTRACTING OFFICER STATES THAT HE WAS NOT ON NOTICE OF PROBABLE ERROR BECAUSE THE BID OF D- COMPANY WAS IN LINE WITH THE ENGINEER'S ESTIMATE. THAT THERE WAS EVIDENT AT LEAST THE POSSIBILITY OF ERROR. THIS POSSIBILITY WAS MADE MORE APPARENT BY THE FACT THAT THE LOW BIDS ON THE MAJOR PORTION OF THE PROJECT ARE LESS THAN ONE-HALF OF EACH OF THE OTHER BIDDERS' PRICES.

B-159189, MAY 27, 1966

TO SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO A LETTER DATED MAY 11, 1966, FROM THE ASSISTANT DIRECTOR, ADMINISTRATIVE SERVICES DIVISION, SOIL CONSERVATION SERVICE, TRANSMITTING THE FILE CONCERNING CONTRACT NO. 12-10-290-1200, ENTERED INTO WITH THE D- CONSTRUCTION COMPANY, AND REQUESTING A DECISION AS TO WHETHER THE CONTRACT PRICE MAY BE ADJUSTED IN LINE WITH AN ALLEGED ERROR.

BIDS WERE RECEIVED FOR THE CONSTRUCTION OF TWO LOG CRIB DAMS, AND AWARD WAS MADE TO D- CONSTRUCTION COMPANY IN THE AMOUNT OF $35,214 ON APRIL 19, 1966. THE CONTRACTOR ALLEGED ERROR BY PHONE ON APRIL 27, CONTENDING THAT IT OMITTED THE FIGURES FOR CONSTRUCTION OF THE WING WALLS ON BOTH DAMS. THE WORKSHEETS, SUBMITTED AS PROOF OF ERROR, CLEARLY SHOW, ON PAGE 4, THE PRICES OF $3,400 EACH FOR THE TWO WING WALLS AND, ON PAGE 5, THAT THESE FIGURES WERE NOT INCLUDED.

THE BIDS WERE $35,214 BY D- CONSTRUCTION COMPANY, $63,830.70 BY HARTLEY AND HUST, INC., AND $74,699.40 BY POWERS CONSTRUCTION CO., INC. THE MAJOR PORTION OF THE WORK CONSISTED OF THE TWO LOG CRIB DAMS, AND THE THREE COMPANIES BID ON THEM IN THE AMOUNTS OF $9,700, $25,500, AND $28,095.40, AND $14,550, $31,300, AND $34,500 RESPECTIVELY. THE CONTRACTING OFFICER HAS STATED THAT BIDS ON THIS TYPE OF JOB HAVE USUALLY BEEN 100 PERCENT MORE THAN THE ENGINEER'S ESTIMATE BUT THAT THE REASON FOR SUCH HIGH BIDS HAS BEEN SOMEWHAT ALLEVIATED. ALTHOUGH TWO OF THE BIDDERS CONTINUED TO BID IN THAT HIGH RANGE, THE CONTRACTING OFFICER STATES THAT HE WAS NOT ON NOTICE OF PROBABLE ERROR BECAUSE THE BID OF D- COMPANY WAS IN LINE WITH THE ENGINEER'S ESTIMATE.

WE FEEL, HOWEVER, IN VIEW OF THE SUBSTANTIAL DISPARITY IN THE BID PRICES, THE LOW BID BEING MORE THAN $27,000 LOWER THAN THE SECOND LOW BID, AND THE OTHER BIDS BEING ONLY SOME $11,000 APART, THAT THERE WAS EVIDENT AT LEAST THE POSSIBILITY OF ERROR. THIS POSSIBILITY WAS MADE MORE APPARENT BY THE FACT THAT THE LOW BIDS ON THE MAJOR PORTION OF THE PROJECT ARE LESS THAN ONE-HALF OF EACH OF THE OTHER BIDDERS' PRICES. CONSEQUENTLY, THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THE POSSIBILITY OF ERROR AND REQUESTED VERIFICATION. GENERALLY, WHERE THE CONTRACTING OFFICER IS ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN A BID, IT IS DOUBTFUL THAT ACCEPTANCE OF THAT BID WILL CONSTITUTE A VALID AND BINDING CONTRACT. 20 COMP. GEN. 652; 23 ID. 596; B-149729, SEPTEMBER 4, 1962. IN THE LATTER CASE, WHICH INVOLVED AN ANALOGOUS FACTUAL SITUATION WE ALSO SAID THAT WHEN A MISTAKE IS ALLEGED PROMPTLY AFTER AWARD AND THE CONTRACTOR CAN SHOW THAT A MISTAKE DID, IN FACT, OCCUR, HOW IT OCCURRED, AND THE INTENDED BID PRICE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED SO THAT THE GOVERNMENT MAY HAVE THE BENEFIT OF IT.

ACCORDINGLY, THE CONTRACT AWARDED TO D- CONSTRUCTION COMPANY MAY BE AMENDED TO PROVIDE FOR AN INCREASE OF $6,800.