B-162128, JAN. 24, 1968

B-162128: Jan 24, 1968

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AFTER AWARD OF CONTRACT THAT HAD BEEN REDUCED BY CONTRACTING OFFICER BECAUSE TOTAL OF ITEMS IN BID WAS LESS THAN TOTAL ESTIMATED AMOUNT. TO HUDSON AND CROYKE: FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JULY 24. BIDS WERE OPENED ON JULY 9. THE TWO LOWEST BIDS RECEIVED AND THE GOVERNMENT'S ESTIMATE WERE AS FOLLOWS: FRANCHI CONSTRUCTION CO. 287.00 BIDS WERE SUBMITTED ON A PRICE SCHEDULE CONTAINING EIGHTEEN ITEMS. THE OTHER FOURTEEN WERE LUMP-SUM ITEMS. THE SUM OF THE ESTIMATED AMOUNTS FOR THE INDIVIDUAL ITEMS WAS SHOWN ON THE SCHEDULE AS A TOTAL ESTIMATED AMOUNT. THE EXTENSIONS AND THE TOTALS OF ALL THE BIDS WERE CHECKED FOR ACCURACY OF ARITHMETIC AFTER BID OPENING. THE TOTAL OBTAINED BY ADDING THE ITEM PRICES WAS $3.

B-162128, JAN. 24, 1968

CONTRACTS - MISTAKES - ITEM VS. EXTENDED PRICES DECISION DENYING FRANCHI CONSTRUCTION CO, INC., REFORMATION OF CONSTRUCTION CONTRACT AWARDED BY ARMY ENGINEERS. A CONTRACTOR WHO, AFTER AWARD OF CONTRACT THAT HAD BEEN REDUCED BY CONTRACTING OFFICER BECAUSE TOTAL OF ITEMS IN BID WAS LESS THAN TOTAL ESTIMATED AMOUNT, ALLEGES ERROR IN TRANSPOSITION OF FIGURES OF ONE ITEM MAY NOT BE ALLOWED PRICE INCREASE, SINCE INVITATION PROVIDED THAT INDIVIDUAL ITEMS PRICES IN BID WOULD GOVERN OVER EXTENDED TOTAL TRANSPOSITION ERROR MAY NOT BE CONSIDERED CLERICAL MISTAKE APPARENT ON FACE OF BID TO FALL WITHIN EXCEPTION PERMITTING WAIVER OF MISTAKE.

TO HUDSON AND CROYKE:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JULY 24, OCTOBER 20, 1967, AND JANUARY 2, 1968, REQUESTING THE REFORMATION OF CONTRACT NO. DA-08-176- ENG/NASA/-17, ON BEHALF OF THE FRANCHI CONSTRUCTION CO., INC.

BIDS WERE OPENED ON JULY 9, 1963, IN THE U.S. ARMY ENGINEER DISTRICT,CANAVERAL, UNDER INVITATION NO. ENG/NASA/-08-176-63-4. THE TWO LOWEST BIDS RECEIVED AND THE GOVERNMENT'S ESTIMATE WERE AS FOLLOWS:

FRANCHI CONSTRUCTION CO., INC. $835,262.60

MASSETT BUILDING COMPANY 862,321.80

GOVERNMENT ESTIMATE 895,387.00 FIVE OTHER BIDS RANGED UPWARDS AS FOLLOWS:

$884,215.00

915,344.00

921,900.50

953,537.20

971,287.00

BIDS WERE SUBMITTED ON A PRICE SCHEDULE CONTAINING EIGHTEEN ITEMS. FOUR CALLED FOR A UNIT PRICE AND EXTENSION, THE OTHER FOURTEEN WERE LUMP-SUM ITEMS. THE SUM OF THE ESTIMATED AMOUNTS FOR THE INDIVIDUAL ITEMS WAS SHOWN ON THE SCHEDULE AS A TOTAL ESTIMATED AMOUNT.

THE EXTENSIONS AND THE TOTALS OF ALL THE BIDS WERE CHECKED FOR ACCURACY OF ARITHMETIC AFTER BID OPENING. FRANCHI'S BID FORM EXTENSIONS CHECKED OUT CORRECTLY, HOWEVER, THE TOTAL OBTAINED BY ADDING THE ITEM PRICES WAS $3,600 LESS THAN THAT SHOWN ON THE BID AS THE TOTAL ESTIMATED AMOUNT. THE AMOUNT WAS THEREFORE CHANGED TO SHOW THE CORRECT TOTAL AS $831,662.60, $3,600 LESS THAN THAT ON THE BID FORM. NOTICE OF AWARD IN THE STATED AMOUNT OF $831,662.60 WAS MAILED TO THE CONTRACTOR ON JULY 17, 1963. THE CONTRACT WAS PREPARED AT THE UNIT PRICES AND ESTIMATED AMOUNT EXTENSION EXACTLY AS STATED IN THE SUCCESSFUL BID, WITH THE TOTAL ESTIMATED AMOUNT OF THE CONTRACT STATED AS $831,662.60. THE CONTRACTOR EXECUTED AND RETURNED THE CONTRACT WITHOUT ANY EXCEPTION AND FURNISHED 100 PERCENT PERFORMANCE BOND FOR $831,662.60 AND 50 PERCENT PAYMENT BOND FOR $415,831.30. NOTICE TO PROCEED WITH THE CONTRACT WAS MAILED ON JULY 23, 1963, AND ACKNOWLEDGED BY THE CONTRACTOR JULY 25, 1963, AND WORK COMMENCED.

BY LETTER DATED AUGUST 20, 1963, THE CONTRACTOR ALLEGED THAT A MISTAKE WAS MADE IN THE PREPARATION OF ITS BID IN THAT IN TRANSFERRING ITS LUMP- SUM BID FOR ITEM NO. 1B, SITE PREPARATION AND DRAINAGE, FROM THE OFFICE COPY OF ITS BID FORM TO THE BID SUBMITTED, THE AMOUNT OF $7,390 INTENDED TO BE BID WAS TRANSPOSED SO THAT IT WAS WRITTEN AS $3,790 ON THE BID WITH THE RESULTANT ERROR OF $3,600, SO THAT THE ESTIMATED TOTAL OF THE CONTRACT SHOULD HAVE BEEN $835,262.60.

THE CONTRACTOR WAS ADVISED AS TO MISTAKE PROCEDURES, AFTER WHICH IT FILED AN APPLICATION FOR REFORMATION TOGETHER WITH AN AFFIDAVIT OF AUTHENTICITY, A REPRODUCTION OF ITS OFFICE COPY OF THE BID FORM SHOWING THAT AS FAR AS THIS WORKSHEET WAS CONCERNED, IT WAS PREPARED IN THE AMOUNT OF $7,390 FOR ITEM 1B, AND REPRODUCTIONS OF TWO PROPOSALS OF PROSPECTIVE SUBCONTRACTORS SHOWING THEIR OFFERS OF $7,500 AND $7,393 FOR ITEM 1B. THE CONTRACTOR'S ALLEGATION OF MISTAKE AFTER AWARD WAS REFERRED TO HIGHER AUTHORITY FOR DECISION IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 -406.4 (D) ON SEPTEMBER 25,1963. THE CHIEF OF ENGINEERS DENIED THE REFORMATION OF THE CONTRACT BY MEMORANDUM DECISION PURSUANT TO AUTHORITY DELEGATED BY ASPR 17-203 (B) (I), THE CONTRACTOR BEING APPRISED BY THE DISTRICT ENGINEER'S LETTER OF OCTOBER 25, 1963. BY LETTER DATED OCTOBER 4, 1966, THE CONTRACTOR REASSERTED THE SAME ISSUE, THIS TIME AS A CLAIM FOR $3,600 ENTITLED "MISTAKE IN BID," AND ORALLY REQUESTED A FORMAL CONTRACTING OFFICER'S DECISION FROM WHICH IT COULD APPEAL UNDER THE "DISPUTES" CLAUSE. THE CONTRACTING OFFICER DENIED THE CLAIM BY DECISION DATED NOVEMBER 8, 1966, AND AN APPEAL WAS FILED WITH THE CORPS OF ENGINEERS BOARD OF CONTRACT APPEALS. THE BOARD GRANTED THE GOVERNMENT'S MOTION TO DISMISS BY DECISION ENG BCA NO. 2806.

YOUR REQUEST DATED JULY 24, 1967, ASKS FOR REFORMATION OF THE CONTRACT TO PROVIDE FOR PAYMENT OF AN ADDITIONAL $3,600. IN SUPPORT OF THE CLAIM YOU STATE,"IN A VERY REAL SENSE, FRANCHI HAS NEVER ASKED THAT ITS ORIGINAL BID BE CHANGED, RATHER, IT HAS AND IS NOW REQUESTING THAT THE UNILATERAL AND UNCONSCIONABLE ACTION OF THE CONTRACTING OFFICER IN CHANGING THE BID PRICE OF $835,262.60 TO $831,662.60 BE OVERRULED AND THAT THE DIFFERENCE OF $3,600 BE GRANTED TO FRANCHI.' HOWEVER, THE INVITATION MAKES NO PROVISION FOR THE $835,262.60 PRICE PREVAILING OVER THE INDIVIDUAL ITEM PRICES. A MATTER OF FACT, THE FRONT PAGE OF THE BID FORM PROVIDES THAT THE BIDDER AGREES TO PERFORM THE WORK "FOR THE UNIT PRICES SET FORTH IN THE ATTACHED UNIT PRICE SCHEDULE.' IN B-156649, JUNE 7, 1965, WITH RESPECT TO SIMILAR LANGUAGE IN AN ERROR IN BID CASE, IT WAS STATED:

"* * * THE PAYMENT PROVISIONS OF THE CONTRACT FORM THEREFORE RELATED ALL PAYMENTS TO THE INDIVIDUAL ITEM PRICES STATED IN THE SCHEDULE. IN SUCH A SITUATION, AND IN THE ABSENCE OF ANY INDICATION TO THE CONTRARY, WE HELD THAT THE NORMAL INTERPRETATION OF THE BID WOULD BE THAT THE INDIVIDUAL ITEM PRICES STATED IN THE SCHEDULE (WHETHER LUMP-SUM UNITS OR ESTIMATED QUANTITIES AT UNIT RATES) WOULD CONTROL AND THE STATED TOTAL WOULD BE SUBJECT TO CORRECTION TO CONFORM TO THE ACTUAL TOTAL OF THE ITEM PRICES. B-152853, MARCH 5, 1964, AFFIRMED JUNE 19, 1964.'

THE "MISTAKES IN BIDS" CLAUSE IN THE INVITATION PROVIDED IN SO FAR AS PERTINENT:

"THE BIDDER HEREBY WAIVES THAT PORTION OF ANY ALLEGED MISTAKE OR MISTAKES IN HIS BID AS SUBMITTED WHICH FALLS WITHIN THE FOLLOWING AMOUNTS:

"IF BID IS $500,000 OR MORE, AND LESS THAN $1,000,000 -- $22,500 PLUS 3 PERCENT OF THE BID OVER $500,000.

"THE ABOVE WAIVER DOES NOT APPLY TO ANY CLERICAL MISTAKE WHICH IS OBVIOUS OR APPARENT ON THE FACE OF THE BID INCLUDING BUT NOT LIMITED TO (1) A MISTAKE IN THE EXTENSION OF A UNIT PRICE OR PRICES; (2) A MISTAKE IN TOTALING THE SUMS OF VARIOUS BID ITEMS; (3) OBVIOUSLY MISPLACED DECIMAL POINT OR (4) FAILURE TO INSERT THE UNIT PRICE WHERE AMOUNT INTENDED CAN BE DETERMINED FROM FACE OF BID.'

THE FOREGOING CLAUSE PROVIDES FOR THE WAIVER OF MISTAKES IN BID UP TO SPECIFIC AMOUNTS EXCEPT FOR "ANY CLERICAL MISTAKE WHICH IS OBVIOUS OR APPARENT ON THE FACE OF THE BID.' ALTHOUGH IT WAS APPARENT THA3 AN ERROR IN BID HAD BEEN MADE AND THE CONTRACTING OFFICER ASSUMED THAT THE ERROR WAS IN TOTALING THE AMOUNTS FOR THE INDIVIDUAL ITEMS, THE ERROR ACCORDING TO EVIDENCE PRODUCED BY THE CONTRACTOR WAS DUE TO A TRANSPOSITION IN THE AMOUNT STATED FOR ONE ITEM. HOWEVER, WHILE A TRANSPOSITION MAY BE CLASSIFIED AS A "CLERICAL MISTAKE," IT WAS NOT A "CLERICAL MISTAKE WHICH IS OBVIOUS OR APPARENT ON THE FACE OF THE BID," SINCE THERE WAS NO INDICATION OF TRANSPOSITION ON THE FACE OF THE BID. ACCORDINGLY, UNDER THE "MISTAKE IN BID" CLAUSE, SINCE THE ERROR DOES NOT FALL WITHIN THE EXCEPTION, THE CONTRACTOR IS REQUIRED TO WAIVE THE MISTAKE BECAUSE THE AMOUNT OF THE ERROR FALLS WITHIN THE AMOUNT OF THE WAIVER PROVIDED IN THE CLAUSE.

IN YOUR LETTER OF JANUARY 2, 1968, YOU CONTEND THAT IT WAS THE INTENTION OF THE CONTRACTING OFFICER AND THE BIDDERS THAT THE TOTAL BID PRICE CONSTITUTE THE BID AND THAT THE CONTRACTING OFFICER SHOULD HAVE SOUGHT VERIFICATION BECAUSE OF THE DISCREPANCY BETWEEN THE SUM OF THE ITEMS AND THE TOTAL BID PRICE. HOWEVER, AS INDICATED ABOVE, THE BID FORM ON THIS FORMALLY ADVERTISED PROCUREMENT DID NOT CONVEY SUCH AN INTENTION BUT RATHER PROVIDED FOR THE INDIVIDUAL ITEM PRICES IN THE BID CONTROLLING THE SITUATION AND THE "MISTAKES IN BIDS" CLAUSE IN THE INVITATION CONTEMPLATED THE WAIVER OF THE TYPE OF MISTAKE AS WAS INVOLVED.

IN THE CIRCUMSTANCES, NO LEGAL BASIS EXISTS FOR INCREASING THE CONSIDERATION PAYABLE UNDER THE CONTRACT AND THE REQUEST THEREFORE MUST BE DENIED.