B-161024, JUL. 3, 1967

B-161024: Jul 3, 1967

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INC.: REFERENCE IS MADE TO YOUR LETTER DATED MARCH 1. REQUESTING RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID WHICH FORMED THE BASIS FOR CONTRACT NO. THE INVITATION FOR BIDS WAS ISSUED BY THE FEDERAL AVIATION AGENCY ON NOVEMBER 25. THE OPENING DATE WAS DECEMBER 27. THREE BIDS WERE RECEIVED. WAS SECOND LOW AT $549. AT THIS MEETING VARIOUS FACETS OF THE WORK WERE REVIEWED AND YOUR WORK PAPERS WERE INSPECTED IN DETAIL. THE FIRST WAS A $40. YOU WOULD HAVE TO WORK TWO SHIFTS PER DAY. THUS ARRIVING AT A UNIT COST OF ONLY ONE-HALF WHAT IT SHOULD HAVE BEEN. THE CONTRACTING OFFICER STATED THAT HE WAS CONVINCED THERE WAS CLEAR AND CONVINCING EVIDENCE OF AN HONEST MISTAKE IN BOTH OF THE ABOVE INSTANCES.

B-161024, JUL. 3, 1967

BIDS - MISTAKES - CORRECTION DECISION PERMITTING CORRECTION OF BID FOR CONSTRUCTION OF RUNWAY FOR FAA ON BASIS ERROR ALLEGED PROMPTLY AND CORRECTION DOES NOT AFFECT STATUS OF OTHER BIDDERS.

TO THOS. GIULI OVERSEAS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED MARCH 1, 1967, REQUESTING RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID WHICH FORMED THE BASIS FOR CONTRACT NO. FA67PC-20, FOR RESURFACING A RUNWAY AND CONSTRUCTION OF A TRANSIENT APRON AT WAKE ISLAND.

THE INVITATION FOR BIDS WAS ISSUED BY THE FEDERAL AVIATION AGENCY ON NOVEMBER 25, 1966, AND THE OPENING DATE WAS DECEMBER 27, 1966. THREE BIDS WERE RECEIVED, YOUR BID OF $362,540 BEING THE LOWEST, WHILE THAT OF D. R. KINCAID CO; WAS SECOND LOW AT $549,945.

ACCORDING TO THE ADMINISTRATIVE REPORT, SINCE YOUR BID APPEARED TO BE SIGNIFICANTLY OUT OF LINE WITH THE GOVERNMENT ESTIMATE, AS WELL AS THE BID OF THE NEXT LOW BIDDER, BY LETTER DATED DECEMBER 29 THE CONTRACTING OFFICER REQUESTED VERIFICATION OF YOUR BID, STATING THAT IF YOU VERIFIED YOUR BID IT WOULD BE CONSIDERED AS ORIGINALLY SUBMITTED. YOU THEN MET WITH THE CONTRACTING OFFICER, A CONTRACT SPECIALIST, AND THE PROJECT ENGINEER. AT THIS MEETING VARIOUS FACETS OF THE WORK WERE REVIEWED AND YOUR WORK PAPERS WERE INSPECTED IN DETAIL. FROM SUCH WORK PAPERS IT APPEARED THAT YOU HAD MADE TWO MISTAKES IN YOUR BID. THE FIRST WAS A $40,000 MISTAKE IN ADDITION IN ITEM 2 ON YOUR FINAL BID RECAPITULATION. THE SECOND MISTAKE RELATED TO THE LABOR COSTS FOR CRUSHING, LOADING AND HAULING THE CRUSHED CORAL REQUIREMENT. IT FURTHER APPEARED THAT IN COMPUTING THIS REQUIREMENT YOU ESTIMATED THAT ON THE BASIS OF NORMAL PRODUCTION YOU COULD PRODUCE 60 C.Y. PER DAY, BUT DUE TO A 60 DAY SHUTDOWN IN THE SCHEDULE, YOU WOULD HAVE TO WORK TWO SHIFTS PER DAY. HOWEVER, IN YOUR COMPUTATIONS YOU DIVIDED YOUR ESTIMATED COSTS FOR A SINGLE SHIFT BY THE DOUBLE SHIFT PRODUCTION, THUS ARRIVING AT A UNIT COST OF ONLY ONE-HALF WHAT IT SHOULD HAVE BEEN, WHICH AMOUNTED TO $20,520 INSTEAD OF $41,040.

IN A MEMORANDUM DATED JANUARY 5, 1967, THE CONTRACTING OFFICER STATED THAT HE WAS CONVINCED THERE WAS CLEAR AND CONVINCING EVIDENCE OF AN HONEST MISTAKE IN BOTH OF THE ABOVE INSTANCES, HOWEVER THE RECORD INDICATES THAT THE CONTRACTING OFFICER DID NOT HAVE THE AUTHORITY, UNDER APPLICABLE REGULATIONS, TO CORRECT MISTAKES OF THIS NATURE. THE RECORD FURTHER INDICATES THAT THE PROPER MISTAKE IN BID PROCEDURE, AND YOUR RIGHT TO HAVE THE CLAIM OF ERROR ADJUDICATED BY HIGHER AUTHORITY, WERE EXPLAINED TO YOU. HOWEVER, RATHER THAN RUN THE RISK OF NOT RECEIVING THE AWARD YOU DECIDED TO ACCEPT THE CONTRACT AT THE BID PRICE. BY LETTER OF DECEMBER 30, 1966, YOU ACKNOWLEDGED THE CONTRACTING OFFICER'S LETTER OF DECEMBER 29 AND VERIFIED YOUR BID AS ORIGINALLY SUBMITTED. PRIOR TO AWARD, YOU WERE ADVISED OF YOUR RIGHT TO APPLY SUBSEQUENTLY TO THE GENERAL ACCOUNTING OFFICE FOR POSSIBLE RELIEF. IT IS FURTHER REPORTED THAT IN ORDER TO PRESERVE YOUR RIGHT, IF ANY, TO A CORRECTION IN PRICE, THE CONTRACT PROVIDED THAT "THE CONTRACT AMOUNT IS SUBJECT TO POSSIBLE REVISION UPWARD (NOT TO EXCEED $60,520) PURSUANT TO A POSSIBLE APPLICATION THAT MAY BE FILED BY THE CONTRACTOR WITH THE GENERAL ACCOUNTING OFFICE FOR ANY MISTAKES IN COMPUTING HIS BID PRICE;,

THE ADMINISTRATIVE AGENCY RECOMMENDS THAT CORRECTION OF THE BID PRICE BE AUTHORIZED INCREASING THE BID PRICE BY $60,520, SINCE THE EVIDENCE PROVIDED BY YOU ESTABLISHED BOTH THE EXISTENCE OF A MISTAKE AND THE AMOUNT OF THE BID HAD IT NOT BEEN FOR THE MISTAKE, AND THE BID, BOTH CORRECTED AND UNCORRECTED, WAS THE LOWEST RECEIVED.

GENERALLY, A BIDDER MAY NOT CHANGE HIS BID AFTER THE DATE OF OPENING TO THE PREJUDICE OF OTHER BIDDERS. HOWEVER, WHERE A MISTAKE IS ALLEGED PROMPTLY AFTER BID OPENING BUT BEFORE AWARD OF THE CONTRACT AND THERE HAS BEEN A TIMELY PRESENTATION OF CONVINCING EVIDENCE SHOWING THATA MISTAKE WAS MADE, HOW IT OCCURRED, AND WHAT THE BID PRICE WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THIS OFFICE HAS PERMITTED THE BID TO BE CORRECTED IF, AS IN THIS CASE, SUCH CORRECTION WOULD NOT AFFECT THE RELATIVE STANDING OF THE BIDDERS. 37 COMP. GEN. 210; B 154241, JUNE 10, 1964; B-154964, OCTOBER 16, 1964. SUCH CORRECTION IS PERMITTED BECAUSE THE BIDDER GAINS NO ADVANTAGE FROM HIS KNOWLEDGE OF COMPETITIVE BIDS, BUT MERELY ESTABLISHES THE BID WHICH WOULD HAVE BEEN SUBMITTED WERE IT NOT FOR THE MISTAKE. OBVIOUSLY, THE OTHER BIDDERS ARE NOT PREJUDICED IN THE PRESENT CASE, SINCE EVEN IF THE CORRECTION IS ALLOWED YOUR BID WILL STILL BE LOW.

IN A SITUATION WHERE A BIDDER SIGNS A CONTRACT BASED ON A BID WHICH HE KNOWS TO BE ERRONEOUS AND THE CONTRACTING OFFICER LATER REFUSES TO ADMIT THAT A BONA FIDE MISTAKE WAS MADE, RELIEF GENERALLY WILL NOT BE GRANTED SINCE THE GOVERNMENT AND THE CONTRACTOR WERE NOT MISLED INTO ENTERING INTO A CONTRACT DIFFERENT FROM THAT WHICH THEY INTENDED. MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT. CL. 699; 31 COMP. GEN. 384. HOWEVER, IN THE PRESENT CASE YOUR FIRM NOT ONLY ALLEGED THE MISTAKES PROMPTLY AFTER BID OPENING AND PRIOR TO AWARD, AND IMMEDIATELY PRESENTED CONVINCING EVIDENCE SHOWING THAT THE MISTAKES WERE MADE, HOW THEY OCCURRED, AND WHAT THE BID PRICE WOULD HAVE BEEN EXCEPT FOR THE MISTAKES, BUT THE CONTRACTING OFFICER WAS OF THE OPINION THAT THE MISTAKES HAD BEEN MADE. IT WOULD THEREFORE APPEAR THAT, HAD YOU SO CHOSEN, YOU COULD HAVE OBTAINED AN INCREASE IN THE BID PRICE THROUGH THE NORMAL MISTAKE IN BID PROCEDURE. WHILE YOU CHOSE TO ACCEPT THE CONTRACT AT THE BID PRICE, IT CANNOT BE SAID THAT YOU WAIVED ANY RIGHTS IN THE MATTER, SINCE BY THE TERMS OF THE CONTRACT WHICH SETS FORTH THE FINAL UNDERSTANDING OF THE PARTIES IT WAS MUTUALLY AGREED THAT THE CONTRACT AMOUNT WAS SUBJECT TO POSSIBLE REVISION UPWARD BY THE GENERAL ACCOUNTING OFFICE, THUS IN EFFECT PRESERVING YOUR RIGHT, IF ANY, TO HAVE A CORRECTION IN PRICE. SEE EDMUND J. RAPPOLI COMPANY, INC. V. UNITED STATES, 98 CT. CL. 499; 38 COMP. GEN. 678. ALSO, SEE B-145208,APRIL 4, 1961; B-124826, AUGUST 10, 1955.

IN VIEW OF THE FOREGOING, WE HAVE NO OBJECTION TO THE MODIFICATION OF THE CONTRACT SO AS TO PERMIT PAYMENT OF THE ADDITIONAL AMOUNT OF $60,520 CLAIMED. THE FEDERAL AVIATION ADMINISTRATION IS BEING ADVISED OF THIS DECISION.