B-162363, OCT. 6, 1967

B-162363, OCT. 6, 1967

BIDS - MISTAKES - AFTER AWARD DECISION TO VETERANS ADMINISTRATION CONCERNING ERRORS MADE BY PAUL WILLIAMS AND CO., INC. IN BID FOR INSTALLING FLOOR TILE IN BUILDING IN LOS ANGELES. LOW BIDDER WHO WAS REQUESTED TO VERIFY PRICE BECAUSE OF WIDE DIFFERENCE BETWEEN LOW BID AND NEXT LOW BID AND GOVT. ESTIMATE BUT WHO THREE WORKING DAYS LATER WAS AWARDED CONTRACT WITHOUT PRICE VERIFICATION MAY ON BASIS OF SUBSEQUENT ALLEGATION OF ERROR AND PRESENTATION OF SATISFACTORY EVIDENCE BE ALLOWED ADDITIONAL AMOUNT SINCE ON BASIS OF WIDE PRICE DIFFERENCE CONTRACTING OFFICER WOULD NOT HAVE MADE AWARD. THE THREE DAYS BETWEEN BID OPENING AND DATE OF AWARD IS NOT A REASONABLE TIME FOR CONFIRMATION. SEE B-162360, SEPTEMBER 6, 1967.

TO MR. DRIVER:

REFERENCE IS MADE TO A LETTER OF AUGUST 28, 1967, WITH ENCLOSURES (REFERENCE 134G), FROM MR. DONALD P. WHITWORTH, DIRECTOR, SUPPLY SERVICES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING ERROS PAUL WILLIAMS AND CO., INC., ALLEGES IT MADE IN ITS BID, ON WHICH CONTRACT NO. V6009C-645, DATED MARCH 15, 1967, WAS AWARDED.

ON JANUARY 26, 1967, THE VETERANS ADMINISTRATION CENTER, LOS ANGELES, CALIFORNIA, ISSUED AN INVITATION FOR BIDS NO. F67-112 FOR INSTALLING FLOOR TILE IN BUILDINGS 116, 156 AND 165. THEREAFTER, THE INVITATION WAS AMENDED SEVERAL TIMES TO PROVIDE FOR CHANGES NOT PERTINENT HERE. ELEVEN FIRMS RESPONDED TO THE INVITATION ON THE OPENING DATE OF MARCH 10, 1967. WILLIAMS SUBMITTED THE LOWEST BID IN THE AMOUNT OF $28,773. THE REMAINING 10 BIDS RANGED IN PRICE FROM $32,862 TO $59,991.

IN VIEW OF THE DISPARITY BETWEEN WILLIAMS' BID AND THE OTHERS RECEIVED, AND BECAUSE THE GOVERNMENT ESTIMATE FOR THE JOB WAS $36,375, THE CONTRACTING OFFICER ALERTED WILLIAMS AT BID OPENING TO THE POSSIBILITY OF ERROR IN THE BID AND REQUESTED VERIFICATION. HOWEVER, THE RECORD SHOWS THAT WILLIAMS DID NOT, AT TIME OF BID OPENING, OR UP TO THE DATE OF AWARD, ALLEGE ERROR OR VERIFY ITS BID. CONSEQUENTLY, 5 DAYS AFTER BID OPENING, AWARD WAS MADE TO WILLIAMS ON MARCH 15, 1967. WE NOTE THAT ACTUALLY ONLY 3 WORKING DAYS ELAPSED FROM MARCH 10 TO DATE OF AWARD.

IT WAS NOT UNTIL AFTER THE WORK WAS IN PROGRESS THAT THE CONTRACTING OFFICER RECEIVED AN ALLEGATION OF ERROR FROM THE CONTRACTOR. ON MAY 15, 1967, WILLIAMS ALLEGED THAT IT MADE TWO ERRORS IN ITS BID AMOUNTING TO $3,420.20. THE FIRST ERROR INVOLVED THE COST OF TILE APPARENTLY DUE TO THE CONTRACTOR'S MISUNDERSTANDING OR TO AN ERRONEOUS QUOTATION FROM ITS TILE SUPPLIER ($1,182). THE SECOND ERROR ALLEGED INVOLVED THE CONTRACTOR'S FAILURE TO INCLUDE LABOR COSTS OF $0.10 PER SQUARE FOOT IN FILLING 22,382 SQUARE FEET OF FLOORS IN BUILDING 116 ($2,238.20).

WITH RESPECT TO THE ERROR INVOLVING LABOR, THE CONTRACTOR'S WORKSHEET SHOWS A COST OF $2,494 FOR FILLING 22,383 SQUARE FEET OF FLOOR AREA IN BUILDING 116. THE WORKSHEET ALSO INCLUDES A COMPUTATION SHOWING 345 BAGS OF FILL MATERIAL AT $1.40 PER BAG OR A TOTAL OF $483. BASED ON THESE FIGURES, IT WOULD APPEAR THAT $2,011 ($2,494 LESS $483) WOULD REASONABLY COVER LABOR COSTS NOT INCLUDED IN THE BID PRICE. ALSO, UPON EXAMINATION OF THE CONTRACTOR'S WORKSHEETS, IT APPEARS THAT ITS CLAIM OF ERROR RESPECTING THE COST OF TILE AMOUNTS TO $906.20 WHICH IS THE CORRECT MATHEMATICAL RESULT OF MULTIPLYING 19,700 SQUARE FEET OF AREA BY THE $0.046 TILE PRICE DIFFERENCE NOT INCLUDED IN THE BID PRICE. WE FEEL THAT THE WORKSHEET ESTABLISHES THE ERRORS, THE MANNER IN WHICH THEY OCCURRED AND THE BID ACTUALLY INTENDED.

WHILE FPR SEC. 1-2.406-3 (D) (1) PERMITS A CONTRACTING OFFICER TO AWARD A CONTRACT AFTER VERIFICATION IS REQUESTED AND NOT RECEIVED, AND THE LOW BIDDER REFUSES OR FAILS TO GRANT AN EXTENSION OF THE BID ACCEPTANCE TIME, WE BELIEVE THAT IN VIEW OF THE WIDE DIFFERENCE BETWEEN THE LOW BID OF WILLIAMS AND THE NEXT LOW BID AND THE GOVERNMENT'S ESTIMATE, AN AWARD SHOULD NOT HAVE BEEN MADE TO WILLIAMS UNDER THE CIRCUMSTANCES OF THIS CASE. IT IS ESPECIALLY SIGNIFICANT THAT ONLY 3 WORKING DAYS ELAPSED BETWEEN THE BID OPENING DATE AND DATE OF AWARD. IN OUR OPINION, THIS DID NOT ALLOW A REASONABLE TIME FOR CONFIRMATION OF THE BID PRIOR TO AWARD. SEE 37 COMP. GEN. 706. WE THEREFORE BELIEVE THAT THIS CASE REASONABLY FALLS WITHIN THE RATIONALE OF FPR SEC. 1-2.406-3 (D) (5) WHICH PROVIDES AS FOLLOWS:

"WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS, IN WHICH CASE IT MAY BE REJECTED. * * *"

IT IS REPORTED THAT THE CONTRACT PERFORMANCE IS PROCEEDING SATISFACTORILY AND THAT THE CONTRACTOR HAS RECEIVED ONE PARTIAL PAYMENT OF $23,306.13. ACCORDINGLY, THE CONTRACT MAY BE REFORMED TO PROVIDE FOR AN AGGREGATE TOTAL PRICE OF $31,690.20 AND PAYMENT FOR THE WORK IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID, AS CORRECTED, WILL STILL REMAIN THE LOWEST BID RECEIVED ON THE PROJECT. SEE B-162360, SEPTEMBER 6, 1967.

A REFERENCE TO THIS DECISION SHOULD BE ATTACHED TO THE CONTRACT. REQUESTED, THE FILE FURNISHED WITH THE LETTER OF AUGUST 28, 1967, IS RETURNED.