B-159813, OCTOBER 13, 1966, 46 COMP. GEN. 298

B-159813, OCTOBER 13, 1966, 46 COMP. GEN. 298

HOUSING - MILITARY PERSONNEL - CONSTRUCTION COST LIMITATIONS - BID EVALUATION. IN EVALUATING THE LOW BID FOR THE CONSTRUCTION OF BACHELOR OFFICERS QUARTERS AND MESS UNDER AN INVITATION IMPOSING A STATUTORY LIMITATION ON THE COST OF THE QUARTERS, THE CONTRACTING OFFICER PROPERLY CONSIDERED AS A PRICE DEDUCTION AN AMOUNT SHOWN ON ONLY ONE OF TWO OTHERWISE SIMILAR SHEETS THAT ACCOMPANIED THE BID AND WHICH WERE SUBMITTED IN ADDITION TO THE REQUIRED PRICE BREAKDOWN SHEET, AND THE MODIFIED PRICE EXCEEDING THE COST BREAKDOWN CEILING PRESCRIBED FOR THE QUARTERS, THE "ALL OTHER WORK" ITEM BEING OUT OF LINE WITH OTHER BIDS AND THE GOVERNMENT'S ESTIMATE, THE CONTRACTING OFFICIER PROPERLY REQUESTED REVIEW AND PERMITTED MODIFICATION OF THE ORIGINAL COST BREAKDOWN AND, THEREFORE, THE CONTRACT AWARDED IS VALID. BIDS - PRICES - DISCREPANCIES - PRICE SHEET AND BID FORM. THE PROVISION OF A SPECIFICATION TO THE EFFECT THAT WHEN TOTAL AMOUNTS SHOWN ON THE PRICE BREAKDOWN SHEET AND BID FORM DIFFER THE BID FORM PREVAILS IS NOT FOR APPLICATION WHERE THE INFORMATION SHEET SUBMITTED WITH A BID IS CONSIDERED ADDITIONAL TO THE PRICE BREAKDOWN SHEET AND A MODIFICATION OF BID PRICE. NOR WOULD THE PROVISION BE FOR APPLICATION IF THE ADDITIONAL SHEET WERE TO BE CONSIDERED A COST BREAKDOWN MODIFICATION, THE BIDDER HAVING EVEN IF NOT CONFORMING WITH BID FORM REQUIREMENTS INDICATED INTENT TO MODIFY ITS BID. THEREFORE, THE FACT THAT THE INVITATION PROVIDES THAT ONE AMOUNT IS TO PREVAIL OVER ANOTHER AMOUNT IS NOT ALWAYS THE CRITICAL FACTOR. BIDS - UNBALANCED - PROPRIETY OF UNBALANCE. THE UNBALANCE BETWEEN THE COST OF CONSTRUCTING OFFICERS' QUARTERS AND THE OTHER WORK CONTEMPLATED PRODUCED BY PERMITTING THE LOW BIDDER TO MODIFY ITS ORIGINAL COST BREAKDOWN TO MEET THE STATUTORY LIMITATION IMPOSED ON THE CONSTRUCTION COST OF THE QUARTERS, SPOTLIGHTS THE ERROR IN THE STATEMENT OF COSTS BUT DOES NOT COME WITHIN THE PURVIEW OF PARAGRAPH 18- 110/C) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDING PROTECTION AGAINST BIDDERS UNBALANCING BIDS WITH A VIEW TO OVERLOADING COSTS OF OTHER WORK SO THAT THE COSTS ON THE WORK GOVERNED BY A GIVEN DOLLAR LIMITATION WILL COME WITHIN THE LIMITATION, AND THE MODIFICATION OF THE COST BREAKDOWN PERMITTED WAS PROPER. BIDS - UNSIGNED - AGENT'S SIGNATURE. ALTHOUGH THE PRESIDENT OF A CORPORATION WHO SIGNED THE BID AND PRICE BREAKDOWN SHEET DID NOT SIGN OR INITIAL THE ADDITIONAL SHEETS SUBMITTED WITH THE BID TO MODIFY PRICES, THE OMISSION IS A MATTER OF FORM THAT MAY BE WAIVED IN VIEW OF THE FACT ONE OF THE SHEETS WAS SIGNED BY AN OSTENSIBLE AGENT AUTHORIZED BY THE CORPORATION TO ACT IN THAT CAPACITY.

TO H. HAYDEN RECTOR, OCTOBER 13, 1966:

REFERENCE IS MADE TO YOUR LETTER OF JULY 27, 1966, PROTESTING ON BEHALF OF K. CHAVIS GENERAL CONTRACTOR, INC; AGAINST THE AWARD TO THE DEVELOPMENT CORPORATION OF AMERICA (DCA) OF CONTRACT NBY-75989 COVERING THE CONSTRUCTION OF BACHELOR OFFICERS QUARTERS AND MESS AT THE UNITED STATES NAVAL STATION IN PENSACOLA, FLORIDA.

THE BID FORM, STANDARD FORM 21, PROVIDED SPACE FOR A BIDDER TO BID ON FOUR ITEMS. ITEM 1 SOLICITED A TOTAL PRICE FOR THE ENTIRE JOB. FOR EACH ITEM THEREAFTER, SPACE WAS PROVIDED FOR THE BIDDER TO INSERT A TOTAL PRICE FOR THE JOB BASED UPON CERTAIN OMISSIONS AND SUBSTITUTIONS FROM THE REQUIREMENTS IN THE NUMBERED ITEM PRECEDING IT. A SEPARATE FORM, THE PRICE BREAKDOWN DATA FORM, PROVIDED SPACE FOR THE BIDDER TO SHOW SEPARATELY FOR EACH OF THE FOUR ITEMS THE TOTAL OF ALL THE COSTS OF THE BARRACKS TO THE 5 -FOOT LINE, THE TOTAL OF THE COSTS FOR ALL THE OTHER WORK AND THE TOTAL OF THOSE TWO COSTS. ABOVE THE SPACE PROVIDED ON THIS FORM FOR THE BIDDER'S SIGNATURE, THERE APPEARED THE FOLLOWING STATEMENT:

CERTIFICATION

THE UNDERSIGNED BIDDER HEREBY CERTIFIES THAT EACH PRICE STATED ABOVE INCLUDES AN APPROXIMATE APPORTIONMENT OF ALL ESTIMATED APPLICABLE COSTS, DIRECT AND INDIRECT, AS WELL AS OVERHEAD AND PROFIT.

THE STATUTORY CEILING ON THE BACHELOR OFFICERS QUARTERS IS $1,887,000. THE CEILING IS DETERMINED BY MULTIPLYING THE CAPACITY OF THE QUARTERS, 222 MEN, BY THE $8,500 PER MAN LIMIT SET BY LAW FOR THE QUARTERS. HOWEVER, IT IS THE PRACTICE OF THE CONTRACTING AGENCIES TO STATE A LESSER LIMIT IN THE INVITATIONS FOR BIDS TO ALLOW FOR CONTINGENCIES WHICH MAY ARISE IN THE COURSE OF CONSTRUCTION. IN THE IMMEDIATE CASE, THE SPECIFICATION INCORPORATED BY REFERENCE IN THE INVITATION PROVIDED A COST LIMITATION OF $1,400,000 FOR THE BACHELOR OFFICERS QUARTERS. IN THIS REGARD, THE SPECIFICATION STATED:

1A.22 STATUTORY COST LIMITATION. BIDDERS ARE ADVISED THAT CURRENT LAWS SET A COST LIMITATION FOR BACHELOR OFFICERS QUARTERS. THE COST LIMIT (CONTRACT PRICE LEVEL) FOR THIS PROJECT IS $1,400,000 FOR ALL WORK OUT TO THE FIVE-FOOT LINE. THE TERM "TO THE FIVE-FOOT LINE" IS DEFINED AS INCLUDING CONSTRUCTION ENCOMPASSED WITHIN A THEORETICAL LINE FIVE FEET FROM THE FACE OF EXTERIOR WALLS AND INCLUDES 64 PERCENT OF TOTAL AIR CONDITIONING COST FOR THE COMPLETE FACILITY, ALL PERMANENTLY BUILT-IN EQUIPMENT ATTACHED TO THE STRUCTURE AS REQUIRED BY THIS SPECIFICATION AND THE 50 FEET -0 INCHES X 111 FEET -10 INCHES ADMINISTRATIVE-LOBBY-LOUNGE PORTION OF THE MESS FACILITY BUILDING. EXCLUDED FROM THE BACHELOR OFFICERS QUARTERS COSTS ARE THE COSTS OF UNUSUAL FEATURES SUCH AS SPECIAL FOUNDATIONS, EXTRAORDINARY SUB-SURFACE CONDITIONS (E.G; ROCK EXCAVATION) AND MESSING FACILITIES.

1A.22.1 COST OF MESSING FACILITIES. THE TOTAL COST OF THE BACHELOR OFFICERS QUARTERS SHALL EXCLUDE ALL COSTS DIRECTLY OR PROPORTIONALLY CHARGEABLE TO THE MESSING FACILITY EXCEPT FOR THE SPECIFIC PERCENTAGE OF TOTAL AIR CONDITIONING COSTS AND THE ADMINISTRATIVE-LOBBY-LOUNGE PORTION OF THE MESS FACILITY BUILDING AS SET FORTH ABOVE UNDER COSTS WHICH WILL BE INCLUDED WITH THE BACHELOR OFFICERS QUARTERS.

1A.22.2 PRICE BREAKDOWN. BIDDERS ARE REQUIRED TO BREAK DOWN THEIR BID FOR EACH BID ITEM TO INDICATE THE AMOUNT BID FOR CONSTRUCTION SUBJECT TO STATUTORY COST LIMITATIONS. SEPARATE BID ITEMS WILL NOT BE USED TO PROVIDE THIS BREAKDOWN. THE BREAKDOWN SHALL BE SUBMITTED WITH THE BID ON THE FORMS ATTACHED TO THE BID (STANDARD FORM 21) FOR THIS PURPOSE.

1A.22.3 ANY SUBSEQUENT REPORTS REFERRING TO COSTS SUBJECT TO STATUTORY LIMITATIONS MUST BE CONSISTENT WITH THE CONTRACTOR'S BIDDING DATA BREAKDOWN.

FURTHER, SECTION 1D.4 OF THE SPECIFICATION STATED:

1D.4 PRICE BREAKDOWN DATA. EACH BIDDER SHALL SUBMIT WITH HIS BID THE PRICE BREAKDOWN REQUIRED BY PARAGRAPH TITLED "STATUTORY COST LIMITATION" IN SECTION 1A. THESE PRICES SHALL BE IN ADDITION TO THE PRICES REQUIRED BY STANDARD FORM 21,"BID FORM;, IN THE EVENT THE TOTAL AMOUNTS SHOWN ON THE PRICE BREAKDOWN DIFFER FROM THOSE SHOWN ON THE BID FORM, THE AMOUNT AS SHOWN ON THE BID FORM SHALL GOVERN.

BIDS WERE OPENED ON JUNE 15, 1966. EIGHT FIRMS SUBMITTED BIDS ON THE PROJECT. DCA BID $2,500,000 ON EACH OF THE FOUR ITEMS ON THE BID FORM. ON THE PRICE BREAKDOWN DATA SHEET ACCOMPANYING THE BID, THE BIDDER INDICATED AFTER EACH OF THE FOUR ITEMS $2,000,000 FOR ALL COSTS OF THE BARRACKS TO THE 5-FOOT LINE, $500,000 FOR ALL OTHER WORK AND $2,500,000 FOR THE TOTAL AMOUNT. BOTH THE BID FORM AND THE PRICE BREAKDOWN SHEET WERE SIGNED BY ALVIN SHERMAN AS PRESIDENT OF THE CORPORATION. THESE FORMS WERE ACCOMPANIED BY TWO SHEETS, NOT GOVERNMENT-FURNISHED, WHICH WERE ALMOST EXACT DUPLICATES. AT THE TOP OF THE FIRST SHEET, THERE WAS PRINTED IN BOLD LETTERS ,BID" AND THEREAFTER FOLLOWING THE WORD "JOB" THERE WAS WRITTEN "NO. 75989" AND FOLLOWING THE WORD "DATE" THERE WAS WRITTEN "6-15- 66;, THE SHEET CONTINUED AS FOLLOWS:

$2 SHEET---/CONTINUED) BARRACKS COST---BID ITEM NO. 1---ADD- -$110,000.00 ALL OTHER WORK---BID ITEM NO. 1---DEDUCT---$410,000.00 TOTAL AMOUNT---BID ITEM NO. 1 BARRACKS COST BID ITEM NO. 2---ADD-- $104,000.00 ALL OTHER COST BID ITEM NO. 2---DEDUCT---$419,000.00 TOTAL AMOUNT BID ITEM NO. 2---DEDUCT ---$315,000.00 BARRACKS COST BID ITEM NO. $---ADD---$70,000.00 ALL OTHER COST BID ITEM NO. 3---DEDUCT-- $420,000.00 TOTAL AMOUNT BID ITEM NO. 3--- DEDUCT---$511,000.00 BARRACKS COST---BID ITEM NO. 4---DEDUCT---$20,000.00 ALL OTHER COST BID ITEM NO. 4---DEDUCT---$420,000.00 TOTAL AMOUNT BID ITEM NO. 4-- DEDUCT---$600,000.00

DEVELOPMENT CORPORATION OF AMERICA

2514 HOLLYWOOD BOULEVARD---HOLLYWOOD

FLORIDA

S/JOHN RAGLAND

THE SECOND SHEET IS DIFFERENT FROM THE FIRST IN ONLY TWO RESPECTS. FIRST, AFTER "TOTAL AMOUNT---BID ITEM NO. 1", THE SECOND SHEET STATES "DEDUCT---$300,000.00;, SECOND, IT DOES NOT HAVE THE SIGNATURE OF JOHN RAGLAND.

FROM THE FOREGOING, THE CONTRACTING OFFICE DECIDED THAT THE BIDDER INTENDED TO MODIFY THE $2,500,000 PRICE FOR ITEM 1 WITH A $300,000 DEDUCTION AND TREATED THE BID AS ONE FOR $2,200,000. BY TELEGRAM OF JUNE 15, THE PRESIDENT OF THE CORPORATION CONFIRMED THAT THE BIDDER INTENDED TO MODIFY ITS BID ON ITEM 1 WITH A $300,000 REDUCTION IN BID PRICE. THE SAME TELEGRAM AFFIRMED THE TOTAL DEDUCTIONS ON THE OTHER THREE ITEMS AND STATED THAT THE DEDUCTIVE TOTALS ON ITEMS 3 AND 4 WERE CORRECT, BUT THAT THE BARRACKS DEDUCTS HAD BEEN UNDERSTATED.

THE OFFERS RECEIVED ON ITEM 1 FROM THE OTHER SEVEN BIDDERS RANGED FROM $2,273,000 BID BY K. CHAVIS GENERAL CONTRACTOR TO A HIGH OF $2,444,000. THE GOVERNMENT ESTIMATE FOR ITEM 1 WAS $2,247,000.

HOWEVER, WHILE THE $2,200,000 AGGREGATE PRICE ON ITEM 1 COMPARED FAVORABLY WITH THE GOVERNMENT ESTIMATE AND THE BIDS RECEIVED, THE COST BREAKDOWN FOR THE QUARTERS WAS IN EXCESS OF THE $1,400,000 CEILING PROVIDED IN THE INVITATION. IN THAT REGARD, AS INDICATED ABOVE, THE BIDDER HAD STATED A COST OF $2,000,000 IN THE COST BREAKDOWN FOR WORK TO THE 5-FOOT LINE TO WHICH THE ACCOMPANYING "BID" SHEET HAD INDICATED $110,000 WAS TO BE ADDED, BRINGING THE COST TO THE 5-FOOT LINE TO $2,110,000 AND LEAVING THE COST OF THE OTHER WORK AT $90,000. AT THIS POINT, IT SHOULD BE OBSERVED THAT THE GOVERNMENT'S ESTIMATE FOR THE OTHER WORK WAS $756,096 AND THAT THE BREAKDOWNS OF COSTS SUBMITTED BY THE OTHER BIDDERS FOR THE SAME WORK RANGED FROM $705,000 TO $1,350,000. SOME OF THE BIDDERS PRIOR TO BID OPENING FURNISHED PRICE MODIFICATIONS OF THEIR BIDS, BUT DID NOT INDICATE HOW THE PRICE REDUCTIONS WERE TO BE APPORTIONED BETWEEN THE TWO COST ITEMS ON THE BREAKDOWN SHEET. IF THE ENTIRE REDUCTIONS OFFERED WERE APPLIED SOLELY TO THE "OTHER WORK" CATEGORY, THE RANGE ON THAT WORK WOULD BE FROM $603,000 TO $1,094,000.

SINCE FOUR BIDDERS HAD SUBMITTED BREAKDOWNS ON ITEM 1 INDICATING THAT THE WORK ON THE QUARTERS COULD BE ACCOMPLISHED WITHIN THE CEILING, DCA WAS REQUESTED TO REVIEW THE COST BREAKDOWN TO DETERMINE IF IT WAS IN ERROR AND IF FOUND TO BE ERRONEOUS, TO FORWARD TO A CORRECT BREAKDOWN. BY LETTER OF JUNE 22, THE BIDDER ADVISED THAT, CONTRARY TO ADVICE IN THE SPECIFICATION, IT HAD INCLUDED THE MESSING FACILITY WITH THE QUARTERS IN FIGURING THE COST TO THE 5-FOOT LINE. THE LETTER STATED THAT THE CORRECT COST BREAKDOWN WAS:

BARRACKS BLDG. 1,398,000

ALL OTHER 802,000

TOTAL 2,200,000.

RELYING UPON A DECISION OF THIS OFFICE, B-158595, MAY 26, 1966, WHICH UPHELD THE PROPRIETY OF A SIMILAR MODIFICATION, THE BIDDER WAS PERMITTED TO MODIFY THE ORIGINAL COST BREAKDOWN AND AN AWARD WAS MADE TO IT FOR ITEM 1 ON JUNE 29, 1966.

YOU HAVE PROTESTED AGAINST THE AWARD ON A NUMBER OF GROUNDS. YOU REFER TO THE FACT THAT THE BIDDER INDICATED WITH ITS BID THAT IT HAD EXCEEDED THE $1,400,000 LIMITATION SPECIFIED IN THE SPECIFICATION AND FOR THAT REASON ALONE YOU SUGGEST THAT IT SHOULD NOT HAVE BEEN CONSIDERED. IN THAT CONNECTION, YOU QUOTE FROM THE ARMED SERVICES PROCUREMENT REGULATION AS FOLLOWS:

18-110 STATUTORY COST LIMITATIONS.

(A) CONTRACTS FOR CONSTRUCTION SHALL NOT BE AWARDED AT A PRICE IN EXCESS OF STATUTORY COST LIMITATIONS UNLESS THE LIMITATIONS FOR THE PARTICULAR CONTRACT CAN BE AND HAVE BEEN WAIVED AND SHALL NOT BE AWARDED AT A PRICE, WHICH, WITH ALLOWANCES FOR GOVERNMENT IMPOSED CONTINGENCIES AND OVERHEAD, EXCEEDS THE STATUTORY AUTHORIZATION FOR THE PROJECT.

(B) INVITATION FOR BIDS AND REQUESTS FOR PROPOSALS CONTAINING ONE OR MORE ITEMS SUBJECT TO STATUTORY COST LIMITATIONS SHALL STATE IN A SEPARATE SCHEDULE THE APPLICABLE COST LIMITATION FOR EACH ITEM SUBJECT TO A SPECIFIC STATUTORY COST LIMITATION. INVITATIONS FOR BIDS AND REQUESTS FOR PROPOSALS SHALL STATE SPECIFICALLY THAT A BID OR PROPOSAL WHICH DOES NOT CONTAIN PRICES FOR THE INDIVIDUAL SCHEDULES WILL BE CONSIDERED NON- RESPONSIVE. BIDS OR PROPOSALS SHALL CONTAIN A CERTIFICATION THAT EACH SUCH PRICE INCLUDES AN APPROXIMATE APPORTIONMENT OF ALL ESTIMATED APPLICABLE COSTS, DIRECT AND INDIRECT, AS WELL AS OVERHEAD AND PROFIT.

(C) A BID OR PROPOSAL CONTAINING PRICES WITHIN STATUTORY COST LIMITATIONS ONLY BECAUSE SUCH BID OR PROPOSAL IS MATERIALLY UNBALANCED SHALL BE REJECTED. AN UNBALANCED BID OR PROPOSAL IS ONE WHICH IS BASED ON PRICES SIGNIFICANTLY LESS THAN COST FOR SOME WORK, AND PRICES WHICH ARE OVERSTATED FOR OTHER WORK. A BID OR PROPOSAL CONTAINING PRICES THAT EXCEED APPLICABLE STATUTORY COST LIMITATIONS SHALL BE REJECTED, UNLESS FOR CONSTRUCTION OF COLD STORAGE OR REGULAR (GENERAL PURPOSE) WAREHOUSING, BARRACKS FOR ENLISTED PERSONNEL OR BACHELOR OFFICER'S QUARTERS, AND THE DETERMINATION OF THE SECRETARY OF DEFENSE HAS BEEN OBTAINED THAT THE LIMITATIONS ON CONSTRUCTION COSTS IN THE ANNUAL MILITARY CONSTRUCTION ACT SHALL NOT APPLY AS IMPRACTICABLE. IN ADDITION, WHERE APPROPRIATE PROVISION IS MADE IN THE INVITATION FOR BIDS OR REQUEST FOR PROPOSALS, SEPARATE AWARD MAY BE MADE ON INDIVIDUAL ITEMS WHOSE PRICE IS WITHIN OR NOT SUBJECT TO ANY APPLICABLE COST LIMITATION, AND THOSE ITEMS WHOSE PRICE IS IN EXCESS OF THE LIMITATIONS SHALL BE REJECTED. SUCH A PROVISION FOR SEPARATE AWARD SHALL NOT BE MADE UNLESS DETERMINED TO BE IN THE BEST INTEREST OF OF THE GOVERNMENT.

FURTHER, YOU CONTEND THAT THE TWO SHEETS WHICH ACCOMPANIED THE BID FORM AND THE COST BREAKDOWN SHOULD HAVE BEEN CONSIDERED AS A MODIFICATION OF THE PRICE BREAKDOWN SHEET RATHER THAN AS A MODIFICATION OF THE BID. YOUR BASIS FOR THIS CONTENTION IS THAT THE BID FORM HAS A PLACE FOR INSERTION OF ONLY ONE NUMERICAL AMOUNT FOR EACH ITEM, WHEREAS THE BREAKDOWN SHEET HAS A PLACE FOR AN AMOUNT FOR THE SUBPARTS OF EACH ITEM, AND THE SHEETS ACCOMPANYING THESE FORMS CHANGE THE AMOUNTS OF THE SUBPARTS WHICH ARE IN THE BREAKDOWN SHEET. ALONG THIS LINE, YOU REFER TO THE FACT THAT THE ADDITIONAL SHEETS ARE IDENTIFIED BY THE WORDS "BID" AND "NO. 2 SHEET (CONTINUED)" AND YOU STATE THAT THE NUMBER TWO SHEET OF THE BID WOULD BE IN THE PRICE BREAKDOWN SHEET. FROM THIS YOU REASON THAT SINCE THE MODIFICATION OF THE BREAKDOWN SHEET MAKES THE TOTAL ON THAT SHEET INCONSISTENT WITH THE BID TOTAL ON THE BID FORM, THERE SHOULD BE APPLIED PARAGRAPH 1D.4 OF THE SPECIFICATION WHICH PROVIDES THAT, IF THE TOTAL AMOUNTS SHOWN ON THE PRICE BREAKDOWN DIFFER FROM THOSE SHOWN ON THE BID FORM, THE AMOUNT AS SHOWN ON THE BID FORM SHALL GOVERN AND, THEREFORE, THE BID FOR ITEM 1 MUST BE CONSIDERED AS ONE FOR THE AMOUNT STATED ON THE BID FORM, $2,500,000, WHICH WAS NOT THE LOWEST OFFER RECEIVED. IN ANY EVENT, YOU QUESTION THE DEDUCTION OF $300,000, SINCE IT ONLY APPEARS ON ONE OF THE ADDITIONAL SHEETS, HAVING BEEN LEFT BLANK ON THE OTHER. ALSO, YOU SAY THAT IT IS NOT A RELIABLE FIGURE BECAUSE OF OTHER OBVIOUS ERRORS ON THE OTHER ITEMS ON THE SHEET. EVEN IF ACCEPTED AS CORRECT, YOU POINT OUT THAT IT UNBALANCES THE COST BREAKDOWN. ADDITIONALLY, YOU CONTEND THAT EVEN IF YOU WERE TO CONCEDE THAT THE SHEETS WERE A BID MODIFICATION, INSTEAD OF A COST BREAKDOWN MODIFICATION, IT WOULD NOT BE PROPER TO CONSIDER THEM SINCE THEY ARE NOT INITIALED BY THE PERSON SIGNING THE BID AND ALL THE BID ITEMS WERE NOT BID UPON. IN THE LATTER CONNECTION, YOU APPARENTLY HAVE REFERENCE TO THE ABSENCE OF A TOTAL FOR ITEM 1 ON ONE OF THE ADDITIONAL SHEETS. WITH REGARD TO THE ABSENCE OF INITIALS, YOU REFER TO SECTION (A) OF PARAGRAPH 5 OF THE INSTRUCTIONS TO BIDDERS WHICH STATES THAT IF CHANGES APPEAR ON THE FORMS THEY MUST BE INITIALED BY THE PERSON SIGNING THE BID. WITH REGARD TO THE SO-CALLED LACK OF A BID, YOU REFER TO SECTION (B) OF THE SAME PARAGRAPH WHICH STATES THAT WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID. FINALLY, YOU SUGGEST THAT THE PRINCIPAL BASIS FOR THE DECISION IN B-158595 WAS THAT THE $62,000 ADJUSTMENT OF THE COST BREAKDOWN TO CONFORM TO A $1,671,660 LIMITATION IN THE INVITATION WAS NOT SUCH AN ADJUSTMENT AS WOULD INDICATE THAT THE ORIGINAL COST BREAKDOWN WAS UNREALISTIC OR WAS NOT A TRUE APPROXIMATION. IN CONTRAST, YOU REFER TO THE FACT THAT A $712,000 ADJUSTMENT WAS MADE TO COME WITHIN THE $1,400,000 INVITATION LIMITATION IN THIS CASE. THEREFORE, YOU STATE THAT THE ORIGINAL COSTS QUOTED ON THE QUARTERS AND THE OTHER WORK IN THIS CASE ARE NOT APPROXIMATE OR REALISTIC AND THAT OUR PRIOR DECISION IS NOT APPLICABLE.

IN OUR OPINION THE CONTRACTING OFFICE WAS CORRECT IN CONSIDERING THE ADDITIONAL SHEETS AS A MODIFICATION OF THE BID. WHILE THE STATEMENT ON THE SHEETS THAT THEY ARE A CONTINUATION OF SHEET 2 IS SUBJECT TO AN INTERPRETATION THAT THEY ARE INTENDED TO MODIFY THE PRICE BREAKDOWN SHEET, IT IS OF IMPORTANCE THAT THE SHEET IS ALSO HEADED "BID" AND JUST BEFORE THE "DEDUCT---$300,000.00" THERE IS THE INDICATION THAT THIS IS TO BE APPLIED AGAINST THE "TOTAL AMOUNT---BID ITEM NO. 1;, THIS WOULD SEEM TO INDICATE AN INTENTION TO MODIFY THE BID AS WELL. HOWEVER, EVEN IF THE INFORMATION SHOULD BE INTERPRETED AS MODIFYING THE PRICE BREAKDOWN SHEET ALONE, AND EVEN THOUGH THE SPECIFICATION PROVIDES THAT IN THE EVENT OF AN INCONSISTENCY BETWEEN THE BID AND THE COST BREAKDOWN SHEET, THE BID SHALL PREVAIL, IN A CASE LIKE THIS WHERE THE BIDDER HAS PROVIDED INFORMATION WITH ITS BID SHOWING A SPECIFIC INTENTION TO MODIFY THE BID, ALBEIT THE INFORMATION MAY BE FURNISHED IN CONNECTION WITH SOME OTHER ASPECT OF THE BID, WE DO NOT BELIEVE THE BIDDER SHOULD BE FAULTED BECAUSE IT NEGLECTED TO CONFORM THE BID FORM TO ITS OBVIOUS INTENTION. IN THAT REGARD, IT MAY BE POINTED OUT THAT, ALTHOUGH AN INVITATION PROVIDES THAT IN A CASE OF ERROR IN EXTENSION OF PRICE IN THE BID THE UNIT PRICE WILL GOVERN, OUT OFFICE HAS HELD THAT WHERE THERE APPEARS NO BASIS FOR REASONABLE DOUBT BUT THAT THE UNIT PRICE WAS IN ERROR RATHER THAN THE EXTENDED AMOUNT, THE LATTER PRICE SHOULD GOVERN. 36 COMP. GEN 429; 37 ID. 829. THEREFORE, THE FACT THAT THE INVITATION PROVIDES THAT ONE AMOUNT IS TO PREVAIL OVER ANOTHER AMOUNT IS NOT ALWAYS A CRITICAL FACTOR.

WHILE IT IS TRUE THAT ONLY ONE OF THE SHEETS THE BIDDER ACCOMPANIED WITH ITS BID STATED ,DEDUCT---$300,000.00" FOR ITEM 1, AND THE OTHER WAS BLANK IN THAT RESPECT, PROBABLY THROUGH OVERSIGHT IN THE HASTE OF LAST-MINUTE PREPARATION, THERE IS NO INCONSISTENCY BETWEEN THE TWO SHEETS IN THAT THE BLANK ONE DOES NOT INDICATE ANY DIFFERENT RESULT AND THE CORRECT MATHEMATICAL APPLICATION WOULD PRODUCE A $300,000 REDUCTION. WHILE THERE ARE MATHEMATICAL ERRORS ON BOTH SHEETS WITH RESPECT TO ITEMS 3 AND 4 ON THE SHEETS, THOSE ARE NOT ITEMS UPON WHICH AN AWARD WAS MADE AND CONSIDERATION OF THEM IS NOT NECESSARY NOR PERTINENT TO ITEM 1. MOREOVER, IN ANOTHER CASE WHERE THERE WAS CONSIDERED THE EFFECT OF A BIDDER SUBMITTING A BID IN TRIPLICATE WITH ONLY ONE CARBON COPY STATING A DISCOUNT, WHICH DISCOUNT WOULD MAKE IT LOW BIDDER, IT WAS HELD THAT IT WAS PROPER TO CONSIDER THE BID AS CONTAINING THE DISCOUNT. B-145731, JUNE 22, 1961. FURTHER, THE BIDDER HAD BID ON ALL THE ITEMS IT WAS REQUESTED TO BID UPON AND ALTHOUGH ONE OF ITS ADDITIONAL SHEETS DOES NOT CONTAIN A TOTAL FOR ITEM 1, IT IS OBVIOUS FROM THE OTHER SHEET THAT A $300,000 DEDUCTION IS INTENDED. THEREFORE, IT CANNOT PROPERLY BE SAID THAT THE BIDDER FAILED TO BID ON EVERYTHING IT WAS REQUIRED TO BID UPON, AND PARAGRAPH 5/B) OF THE BIDDING INSTRUCTIONS DOES NOT APPEAR TO HAVE BEEN VIOLATED.

OF COURSE, THE RESULTING ADDITION OF $110,000 TO THE WORK UP TO THE 5- FOOT LINE AND THE RESULTING DEDUCTION OF $410,000 FROM THE COST OF THE OTHER WORK PRODUCES A MARKED UNBALANCE BETWEEN THOSE TWO COSTS, BUT IT IS THIS UNBALANCE WHICH SPOTLIGHTS THE ERROR IN THE STATEMENT OF THOSE COSTS. WHILE IT COULD BE THAT BIDDERS MIGHT UNBALANCE BIDS WITH A VIEW TOWARD OVERLOADING COSTS OF OTHER WORK SO THAT THE COSTS ON THE WORK GOVERNED BY A GIVEN DOLLAR LIMITATION WILL COME WITHIN THE LIMITATION, NO USEFUL PURPOSE WOULD APPEAR TO BE SERVED FOR A BIDDER, WHO REASONABLY CAN BE EXPECTED TO BE BIDDING WITH THE VIEW OF BEING SUCCESSFUL IN OBTAINING AN AWARD OF A CONTRACT, TO DELIBERATELY OVERLOAD THE COSTS FOR THAT PART OF THE WORK WITHIN THE LIMITATION AND AT THE SAME TIME STATE A RIDICULOUSLY LOW COST FOR OTHER WORK. IT IS THE KIND OF UNBALANCING FIRST MENTIONED WHICH ARMED SERVICES PROCUREMENT REGULATION (ASPR) GUARDS AGAINST IN PARAGRAPH 18-110 (C).

ALTHOUGH THE PRESIDENT OF THE CORPORATION SIGNED THE BID AND THE PRICE BREAKDOWN SHEET AND DID NOT SIGN OR INITIAL THE ADDITIONAL SHEETS FURNISHED WITH THE BID WHICH MODIFIED THE PRICES, ONE OF THE SHEETS WAS SIGNED BY A MR. JOHN RAGLAND ON BEHALF OF THE CORPORATION. HE WAS THEREFORE AN OSTENSIBLE AGENT OF THE CORPORATION AUTHORIZED TO ACT FOR IT IN THAT CAPACITY. AS A MATTER OF FACT, BY TELEGRAM OF JUNE 28, 1966, THE PRESIDENT OF THE CORPORATION CONFIRMED THAT PRIOR TO BID OPENING MR. RAGLAND WAS AUTHORIZED TO ACT IN THE CAPACITY HE DID. IN THAT CONNECTION, IN B-149134, SEPTEMBER 20, 1962, THERE WAS CONSIDERED THE CONTENTION OF A PROTESTANT THAT CHANGES IN A CORPORATION'S BID WERE NOT INITIALED BY THE PERSON SIGNING THE BID AS REQUIRED BY THE INVITATION AND THAT AN AMENDMENT OF THE BID WAS SIGNED BY ANOTHER PERSON. THE DECISION TO THE PROTESTANT INDICATED THAT NOTWITHSTANDING THE USE OF MANDATORY LANGUAGE IN THE PROVISION IN QUESTION, THE OMISSION WAS A MATTER OF FORM WHICH COULD BE WAIVED.

WHILE YOU PLACE EMPHASIS UPON THE FACT THAT THERE WAS A GREATER DISCREPANCY IN THE COST BREAKDOWN SUBMITTED BY DCA THAN THERE WAS IN THE BREAKDOWN CONSIDERED IN B-158595, THE PRIME BASIS FOR THE LATTER DECISION WAS SPELLED OUT AS FOLLOWS:

AT THE OUTSET IT WILL BE NOTED THAT THE INVITATION FOR BIDS REQUIRED BIDDERS TO QUOTE UNDER ITEM NO. 1 A LUMP-SUM PRICE FOR THE ENTIRE WORK. ALSO, THERE WAS NO PROVISION UNDER ITEM NO. 1, OR ELSEWHERE, INDICATING THAT THE BREAKDOWN INFORMATION PERTAINING TO COSTS LIMITATION WOULD AFFECT THE EVALUATION OF THE BID. NEITHER DO WE FEEL THAT THE INVITATION TERMS, READ AS A WHOLE, CAN REASONABLY BE CONSTRUED TO REQUIRE A BIDDER TO STRICTLY ADHERE, IN ITS COST BREAKDOWN, TO THE COST LIMITATION STIPULATED IN PARAGRAPH 1A 20 OF THE SPECIAL PROVISIONS OF THE INVITATION, IN ORDER TO BE ELIGIBLE FOR CONSIDERATION FOR AWARD. THE DEPARTMENT STATES, AND WE SEE NO REASON TO DISAGREE, THAT THE PURPOSE OF THE BREAKDOWN OF COSTS WAS FOR THE CONVENIENCE OF THE CONTRACTING OFFICE IN DETERMINING WHETHER THE COSTS OF THE ENTIRE PROJECT WERE PROPERLY ALLOCATED. AS INDICATED BY THE CERTIFICATION ON APPENDIX "A", EACH OF THE PRICES SHOWN ON THE COST BREAKDOWN INCLUDED AN APPROXIMATE APPORTIONMENT OF ALL ESTIMATED APPLICABLE COSTS, DIRECT AND INDIRECT, AS WELL AS OVERHEAD AND PROFIT. SINCE THE PRICES SHOWN IN OBERG'S COST BREAKDOWN WERE APPROXIMATE, WE ARE OF THE OPINION THAT THEY WERE SUBJECT TO ADJUSTMENT IN CIRCUMSTANCES WHICH INDICATE THAT THE COSTS WERE NOT PROPERLY ALLOCATED.

SINCE THE CONDITIONS OUTLINED IN THE QUOTED PARAGRAPH ARE PRESENT IN THE IMMEDIATE CASE, A SIMILAR RESULT IS JUSTIFIED HERE. THAT THE WORK CAN REASONABLY BE EXPECTED TO BE ACCOMPLISHED WITHIN THE ADMINISTRATIVE LIMITATION IS APPARENT FROM THE COST BREAKDOWN FURNISHED BY YOUR CLIENT AND SEVERAL OTHER BIDDERS. ACCORDINGLY, THE NEW BREAKDOWN FURNISHED BY THE BIDDER IS REALISTIC, AND AUTHORIZATION FOR CORRECTION OF THE PRICE BREAKDOWN WITHIN THE ADMINISTRATIVE LIMITATION IN THE INVITATION AND WITHIN THE LIMITS OF THE TOTAL BID APPEARS PROPER.

AS INDICATED ABOVE, YOU HAVE QUOTED ASPR 18-110 IN SUPPORT OF THE PROTEST. HOWEVER, SINCE THE CONTRACT ACTUALLY AWARDED TO DCA IS WITHIN THE PRESCRIBED LIMITATION, THERE IS NO VIOLATION OF SUBPARAGRAPH PRICES FOR THE INDIVIDUAL SCHEDULES, IT IS NOT NONRESPONSIVE AS (A) OF PARAGRAPH 18-110. FURTHER, SINCE THE DCA BID DID CONTAIN PROVIDED UNDER SUBPARAGRAPH (B) WHERE THERE IS A FAILURE TO BID ON INDIVIDUAL SCHEDULES. THE UNBALANCING ASPECT OF SUBPARAGRAPH (C) HAS BEEN CONSIDERED IN ANOTHER PART OF THIS DECISION. MOREOVER, WHILE SUBPARAGRAPH (C) STATES THAT A BID CONTAINING PRICES EXCEEDING APPLICABLE STATUTORY COST LIMITATIONS SHALL BE REJECTED, IN VIEW OF THE OBVIOUS ERROR IN THE PRICE ON THE WORK TO WHICH THE COST LIMITATION APPLIES, AND FOR THE REASONS QUOTED ABOVE IN OUR DECISION B-158595, IT WOULD NOT BE APPROPRIATE TO REJECT THE BID IN THE IMMEDIATE CASE.

IN ACCORDANCE WITH THE FOREGOING, OUR OFFICE FINDS NO BASIS FOR QUESTIONING THE VALIDITY OF THE AWARD MADE AND THE PROTEST IS THUS DENIED.