B-159533, AUG. 1, 1966

B-159533: Aug 1, 1966

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EDUCATION AND WELFARE: REFERENCE IS MADE TO LETTER DATED JUNE 22. ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID UPON WHICH THE CALL WAS AWARDED. THE TOTAL PRICE OF EACH CALL IS DETERMINED BY USING THE HOURLY RATES FOR REQUIRED SERVICES AND ITEMS AS CONTAINED IN THE BASIC CONTRACT SCHEDULE MULTIPLIED BY THE VARYING NUMBER OF PERFORMANCE HOURS EACH BIDDER QUOTES PER ITEM. SERVICES WERE REQUIRED TO BEGIN ON MAY 5. COMPLETE DELIVERY WAS REQUIRED IN 30 DAYS. THE REQUIREMENTS WERE EXPLAINED TO BIDDERS AT A MEETING ON APRIL 27. TWO BIDS WERE RECEIVED AND WERE EVALUATED ON MAY 3. THE GOVERNMENT ESTIMATE FOR THE JOB WAS $12. WHEN BIDS WERE RECEIVED AND OPENED ON MAY 3. THE MERLE THOMAS CORPORATION REPRESENTATIVE WAS ADVISED BY THE PURCHASING AGENT TO CHECK THE VARIATION BETWEEN ITS BID OF $6.

B-159533, AUG. 1, 1966

TO THE SECRETARY OF HEALTH, EDUCATION AND WELFARE:

REFERENCE IS MADE TO LETTER DATED JUNE 22, 1966, WITH ATTACHMENT,FROM THE CHIEF, PROCUREMENT MANAGEMENT BRANCH, OA-GS, REQUESTING A DECISION AS TO WHETHER RELIEF MAY BE GRANTED TO THE MERLE THOMAS CORPORATION, KENSINGTON, MARYLAND, UNDER CALL NO. ADPQ 37-66, AGAINST DEPARTMENT OF HEALTH, EDUCATION AND WELFARE (DHEW) CONTRACT OS-TC-66-70, AWARDED MAY 5, 1966, ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID UPON WHICH THE CALL WAS AWARDED.

BASIC CONTRACT NO. OS-TC-66-70 SETS UP A SCHEDULE OF DATA PROCESSING SERVICES AND ITEMS TO BE FURNISHED ON CALL. THE TOTAL PRICE OF EACH CALL IS DETERMINED BY USING THE HOURLY RATES FOR REQUIRED SERVICES AND ITEMS AS CONTAINED IN THE BASIC CONTRACT SCHEDULE MULTIPLIED BY THE VARYING NUMBER OF PERFORMANCE HOURS EACH BIDDER QUOTES PER ITEM.

CALL NO. ADPQ 37-66 REQUIRED THE CONTRACTOR TO CODE 20,000 TO 30,000 SOURCE DOCUMENTS AT A RATE OF 1,000 DOCUMENTS PER DAY AND TO KEYPUNCH AND VERIFY 3,000 CARDS WITH MACHINE TIME TO LOAD TO TAPE AND PRINT OUT. SERVICES WERE REQUIRED TO BEGIN ON MAY 5, 1966. COMPLETE DELIVERY WAS REQUIRED IN 30 DAYS. THE REQUIREMENTS WERE EXPLAINED TO BIDDERS AT A MEETING ON APRIL 27, 1966. TWO BIDS WERE RECEIVED AND WERE EVALUATED ON MAY 3, 1966. THE MERLE THOMAS CORPORATION BID $6,325 AND DATA PROCESSING SERVICES BID $23,148. THE GOVERNMENT ESTIMATE FOR THE JOB WAS $12,000.

WHEN BIDS WERE RECEIVED AND OPENED ON MAY 3, 1966, THE MERLE THOMAS CORPORATION REPRESENTATIVE WAS ADVISED BY THE PURCHASING AGENT TO CHECK THE VARIATION BETWEEN ITS BID OF $6,325 AND THE ONLY OTHER BID OF $23,148. THE REPRESENTATIVE AFFIRMED THE BID ON THAT OCCASION. HOWEVER, THE NEXT DAY A REPRESENTATIVE OF MERLE THOMAS CORPORATION TELEPHONED TO REPORT THAT THEY HAD REEXAMINED THEIR QUOTE THE WORKPAPERS AND DISCOVERED THAT THEY HAD MADE A MISTAKE. THE REPRESENTATIVE ASKED IF ANYTHING COULD BE DONE TO GRANT THEM RELIEF AND THE PURCHASING AGENT ADVISED THE BIDDER TO CALL THE CONTRACTING OFFICER. ON MAY 5, 1966, THE BIDDER AGAIN ORALLY ALLEGED A MISTAKE AND THE CONTRACTING OFFICER ADVISED THE BIDDER TO PROCEED WITH THE WORK AND TO SUBMIT ORIGINAL WORK PAPERS IN SUPPORT OF THE MISTAKE. THE CONTRACTOR COMMENCED PERFORMANCE. ON MAY 6, 1966, THE CONTRACTOR ALLEGED ITS MISTAKE IN WRITING AND FORWARDED ITS WORKPAPERS AND RESUME. THE FILE WAS RECEIVED IN DHEW FOR REVIEW AND DETERMINATION ON MAY 18, 1966. ON MAY 23, 1966, THE CONTRACTOR WAS ASKED TO CLARIFY INCONSISTENT STATEMENTS MADE IN ITS EXPLANATION OF ALLEGED ERROR AND IT FORWARDED AN AMENDMENT TO ITS ORIGINAL RESUME OUTLINING ANOTHER ERROR IN ITS EXPLANATION AS TO WHAT IT INTENDED TO BID.

THE CONTRACTING OFFICER STATES THAT REVIEW OF THE PAPERS SUBMITTED BY THE MERLE THOMAS CORPORATION DOES NOT REVEAL CLEAR AND CONVINCING EVIDENCE OF THE BID ACTUALLY INTENDED ALTHOUGH THERE IS EVIDENCE OF A MISTAKE BECAUSE OF THE WIDE VARIANCE BETWEEN THE LOW BID AND THE GOVERNMENT ESTIMATE AND BETWEEN THE LOW BID AND THE ONLY OTHER BID RECEIVED. SINCE THE MERLE THOMAS CORPORATION HAD COMMENCED WORK BEFORE SUBMITTING ITS WORKPAPERS AND PERFORMANCE WAS SUBSTANTIALLY COMPLETE BEFORE ITS FINAL PAPERS WERE RECEIVED FOR REVIEW, IT WAS IMPOSSIBLE TO PERMIT WITHDRAWAL OF ITS BID.

WHILE THE AMOUNT OF THE INTENDED BID IS NOT CLEAR FROM THE SUBMITTED RECORD, IT IS CLEAR THAT AN ERROR WAS COMMITTED IN THE COMPUTATION OF THE ESTIMATED HOURS REQUIRED FOR KEY PUNCH SERVICES UNDER THE CALL. THAT THE MERLE THOMAS CORPORATION BID OF 200 HOURS FOR THIS ITEM WAS GROSSLY DEFICIENT IS BORNE OUT BY COMPARISON OF THIS ITEM WITH THE OTHER BID RECEIVED WHICH IS IN AN AMOUNT OF 1800 HOURS. INFORMAL ADVICE RECEIVED FROM THE PROCUREMENT MANAGEMENT BRANCH, YOUR DEPARTMENT, IS TO THE EFFECT THAT IN ITS EXPERIENCE AN ESTIMATE OF 1000 TO 1200 HOURS FOR THIS SERVICE WOULD BE CONSIDERED REASONABLE AND THAT SATISFACTORY COMPLETION OF THE WORK HAS BEEN MADE AT A PRICE OF ABOUT ONE-HALF THE GOVERNMENT ESTIMATE AND OF ABOUT ONE-FOURTH OF THE OTHER BID PRICE RECEIVED.

THE RECORD CLEARLY ESTABLISHES THAT THE GOVERNMENT WAS ON NOTICE OF ERROR PRIOR TO THE AWARD OF THE CONTRACT AND THAT THE CONTRACTOR PERFORMED THE CONTRACT UPON BEING ADVISED THAT ITS CLAIM OF MISTAKE WOULD RECEIVE CONSIDERATION. HOWEVER, SINCE THE INTENDED BID PRICE HAS NOT BEEN ESTABLISHED WE BELIEVE THE CLAIM FOR RELIEF SHOULD BE ALLOWED ON A QUANTUM MERUIT BASIS FOR THE ITEMS FOR WHICH ERROR HAS BEEN ALLEGED, SUBJECT TO A DETERMINATION BY YOUR DEPARTMENT AS TO THE REASONABLE VALUE OF THE WORK INVOLVED AND THE MATERIALS RECEIVED, NOT IN EXCESS OF THE AMOUNT CLAIMED.