B-164665, OCT. 10, 1968

B-164665: Oct 10, 1968

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SEAMANS AND CHERIN: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 1. THE SUBJECT SOLICITATION WAS OPENED AS SCHEDULED MAY 14. ARE TAKEN INTO ACCOUNT. BASED ON THIS UNIT PRICE THE EXTENDED PRICE SHOULD HAVE BEEN $198. WHICH WAS TAKEN DIRECTLY FROM THE SUBCONTRACTOR'S QUOTATION. IS CORRECT. THE UNIT PRICE IN THE BID WAS OBTAINED BY THE INCORRECT PROCESS OF DIVIDING THE EXTENDED PRICE FOR THE PIPE INTO THE NUMBER OF ESTIMATED LINEAR FEET AND MISPLACING THE DECIMAL POINT. THE MECHANICAL SUBCONTRACTOR'S QUOTATION ON ITEM 1 WAS ERRONEOUSLY CARRIED INTO GRAZIANO'S WORK SHEET AS $3. IN THE EVENT AN AWARD WAS MADE IN THE MAXIMUM AMOUNT. ATTACHED TO THE LETTER WERE COPIES OF ITS WORK SHEETS AND THE QUOTATION FROM THE MECHANICAL SUBCONTRACTOR.

B-164665, OCT. 10, 1968

TO ECKERT, SEAMANS AND CHERIN:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 1, 1968, YOUR LETTER OF JULY 3, 1968, AND SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF GRAZIANO CONSTRUCTION COMPANY, INCORPORATED (GRAZIANO), AGAINST THE REJECTION OF ITS BID AND AGAINST THE SUBSEQUENT AWARD OFA CONTRACT TO THE SECOND LOW BIDDER, TIMMONS, BUTT AND HEAD, INCORPORATED (TIMMONS), FOR THE CONSTRUCTION OF AN AVIONICS SCIENCE LABORATORY (AVLAB) AT WRIGHT- PATTERSON AIR FORCE BASE, OHIO, UNDER ADVERTISED SOLICITATION NO. DACA 27- 68-B-0018 ISSUED MARCH 28, 1968, BY THE DISTRICT ENGINEER, UNITED STATES ARMY ENGINEER DISTRICT, LOUISVILLE CORPS OF ENGINEERS, LOUISVILLE, KENTUCKY.

THE SUBJECT SOLICITATION WAS OPENED AS SCHEDULED MAY 14, 1968, REVEALING THE FOLLOWING BID PRICES:

ADDITIVE ALTERNATES

BASE BID A B

-------- - - GRAZIANO $ 9,687,306.75 $1,273,167.00 $2,547,593.00 TIMMONS 10,374,096.50 1,228,270.00 2,333,180.00 BLOUNT BROTHERS 10,670,000.00 1,337,721.00 2,103,501.00 THE BIDDERS RETAIN THEIR RELATIVE POSITION WHEN THEIR BID PRICES ON EITHER ADDITIVE ALTERNATIVE GROUP A OR B, OR BOTH, ARE TAKEN INTO ACCOUNT.

ON THE NEXT DAY, MAY 15, 1968, A REPRESENTATIVE OF GRAZIANO VISITED THE OFFICE OF THE CONTRACTING OFFICER AND REQUESTED INFORMATION ON THE PROPER ACTIONS NEEDED TO CORRECT CERTAIN MISTAKES IN GRAZIANO'S BID. GRAZIANO'S LETTER OF THAT SAME DATE ALLEGED THAT ITS BID INCLUDED AN INCORRECT UNIT PRICE OF $70.22 PER FOOT FOR 2,820 LINEAR FEET OF 10 INCH CAST IRON PIPE UNDER ITEM 17 (A). BASED ON THIS UNIT PRICE THE EXTENDED PRICE SHOULD HAVE BEEN $198,020.40 INSTEAD OF THE $40,158.00 SHOWN IN THE BID. HOWEVER, GRAZIANO CONTENDS THAT THE EXTENDED PRICE AS SHOWN, WHICH WAS TAKEN DIRECTLY FROM THE SUBCONTRACTOR'S QUOTATION, IS CORRECT. THE UNIT PRICE IN THE BID WAS OBTAINED BY THE INCORRECT PROCESS OF DIVIDING THE EXTENDED PRICE FOR THE PIPE INTO THE NUMBER OF ESTIMATED LINEAR FEET AND MISPLACING THE DECIMAL POINT.

IN ADDITION, GRAZIANO ALLEGED THAT BECAUSE OF THE LIMITED TIME AVAILABLE FOR PREPARING THE BID, THE MECHANICAL SUBCONTRACTOR'S QUOTATION ON ITEM 1 WAS ERRONEOUSLY CARRIED INTO GRAZIANO'S WORK SHEET AS $3,050,000 INSTEAD OF $3,750,000, RESULTING IN $700,000 UNDERSTATMENT OF THAT ELEMENT OF THE PRICE. GRAZIANO, THEREFORE, REQUESTED APPROPRIATE MODIFICATION OF ITS BID.

GRAZIANO, IN THE LETTER OF MAY 15, PROPOSED TO WITHDRAW THE REQUEST FOR CORRECTION, IN THE EVENT AN AWARD WAS MADE IN THE MAXIMUM AMOUNT, OF THE BASE BID PLUS BOTH ADDITIVE ALTERNATES A AND B. ATTACHED TO THE LETTER WERE COPIES OF ITS WORK SHEETS AND THE QUOTATION FROM THE MECHANICAL SUBCONTRACTOR, LIMBACH COMPANY.

THE CONTRACTING OFFICER INFORMED GRAZIANO THAT CORRECTION OF THE $700,000 ERROR WOULD MAKE GRAZIANO'S BID SECOND LOW REGARDLESS OF THE TREATMENT OF THE ERROR IN ITEM 17 (A). GRAZIANO WAS ACCORDINGLY INFORMED THAT BECAUSE IT HAD SUBMITTED CLEAR AND CONVINCING EVIDENCE OF A MISTAKE, ITS BID COULD BE WITHDRAWN FROM FURTHER CONSIDERATION.

GRAZIANO, BY TELEFAX DATED JUNE 7, 1968, WITHDREW ITS REQUEST FOR BID CORRECTION AND ADVISED THAT THE BID SHOULD "REMAIN AS ORIGINALLY QUOTED WITH NO MODIFICATION". WHILE THIS WAS BEING CONSIDERED, BUT BEFORE FUNDS WERE MADE AVAILABLE FOR THE PROJECT, THE SECOND LOW BIDDER, TIMMONS, BECAME AWARE OF THE SITUATION AND, BY ITS TELEFAX OF JUNE 12, 1968, REQUESTED A HEARING WITH THE CONTRACTING OFFICER ON THE MATTER. PRESUMABLY AS A RESULT OF INFORMATION GATHERED AT THAT MEETING, TIMMONS WROTE A LETTER DATED JUNE 20, 1968, TO THE CONTRACTING OFFICER CONTENDING THAT GRAZIANO SHOULD NOT BE PERMITTED TO WITHDRAW THE REQUEST FOR CORRECTION OF ITS BID, CHARGING THAT GRAZIANO WAS USING THE INTERVENING TIME FOR BID SHOPPING, AND CONCLUDING THAT AWARD TO GRAZIANO WOULD BE IMPROPER UNDER THE CIRCUMSTANCES.

UPON OBTAINING THE ADVICE OF THE OFFICE OF THE CHIEF OF ENGINEERS, THE CONTRACTING OFFICER MADE AWARD TO TIMMONS ON JUNE 28, 1968, IN THE AMOUNT OF $10,374,096.50 FOR THE AVIONICS SCIENCE LABORATORY WITHOUT ADDITIVE ALTERNATES. THIS INFORMATION WAS RELAYED TO GRAZIANO BY A LETTER OF JULY 2, 1968, FROM THE CONTRACTING OFFICER, WHICH STATED:

"A. THERE IS CLEAR AND CONVINCING EVIDENCE BOTH AS TO THE FACT THAT AN ERROR OCCURRED AND AS TO THE AMOUNT OF THE MISTAKE AS TO ITEM 1. "B. THERE IS CLEAR AND CONVINCING EVIDENCE THAT A MISTAKE WAS MADE IN ITEMS 17A BUT THE AMOUNT OF THE ERROR CAN NOT BE DETERMINED. "CORRECTION OF GRAZIANO'S BID IS AUTHORIZED FOR ITEM 1 IN THE AMOUNT OF $700,000. THIS CORRECTION WILL MAKE GRAZIANO THE SECOND LOW BIDDER AND THEREFORE DISQUALIFIED FOR AWARD. WITH RESPECT TO ITEM 17 (A), ASPR 2-406.3 (A) (1) PERMITS ONLY WITHDRAWAL OF BID BY GRAZIANO.'

WE UNDERSTAND THAT TIMMONS IS PRESENTLY PERFORMING UNDER THE SUBJECT CONTRACT.

AS COUNSEL FOR GRAZIANO, YOU HAVE PROTESTED THE ABOVE DISCUSSED DETERMINATIONS, CONTENDING THAT AWARD SHOULD HAVE BEEN MADE TO YOUR CLIENT AS THE LOWEST RESPONSIBLE, RESPONSIVE BIDDER. YOU SUGGEST THAT GRAZIANO'S LETTER OF MAY 15, 1968, DISCUSSING ITEMS 1 AND 17 (A), SHOULD BE CONSIDERED AS A LATE BID MODIFICATION AND, AS SUCH, DISREGARDED IN ACCORDANCE WITH ASPR 2-304 (A) AND DECISIONS OF THIS OFFICE SUCH AS 40 COMP. GEN. 290. YOU FURTHER CONTEND THAT THIS LETTER WAS NEVER ACCEPTED BY THE GOVERNMENT, AND THAT THE GOVERNMENT IS THEREFORE OBLIGATED TO CONTRACT WITH THE LOW BIDDER, GRAZIANO, AT HIS ORIGINAL BID PRICE ACCORDING TO THE TERMS OF THE SOLICITATION.

ASSUMING FOR THE PURPOSE OF ARGUMENT THAT GRAZIANO'S LETTER DOES CONSTITUTE A REQUEST FOR THE CORRECTION OF A MISTAKE IN BID PURSUANT TO ASPR 2-406, YOU CONTEND THAT SINCE THE CONTRACTING OFFICER ADVISED GRAZIANO THAT IT WOULD BE PERMITTED TO WITHDRAW ITS BID, THE CONTRACTING OFFICER MUST HAVE DETERMINED THAT GRAZIANO'S BID WAS THE LOW RESPONSIVE BID IN THE EVENT GRAZIANO DID NOT ELECT TO WITHDRAW, BECAUSE TO CONCLUDE OTHERWISE WOULD MEAN THAT THERE WAS NO EXISTING ACCEPTABLE BID TO BE WITHDRAWN. IT IS YOUR VIEW THAT THIS INTERPRETATION OF THE CONTRACTING OFFICER'S LETTER, PERMITTING GRAZIANO THE CHOICE OF EITHER STANDING ON ITS BID AS SUBMITTED, OR OF WITHDRAWING IT FROM CONSIDERATION, IS IN STRICT COMPLIANCE WITH ASPR 2 406.3 (E) (1). FINALLY, YOU CONCLUDE THAT BECAUSE OF THE PRICE DIFFERENCE BETWEEN GRAZIANO'S UNCORRECTED BID PRICE AND THAT OF TIMMONS, THE GOVERNMENT'S INTEREST WOULD BE BEST SERVED BY AN AWARD TO GRAZIANO.

WE DO NOT AGREE WITH YOUR FIRST CONTENTION THAT GRAZIANO'S LETTER OF MAY 15, 1968, SHOULD BE TREATED AS A LATE BID MODIFICATION AND THEREFORE REJECTED AS UNTIMELY. WHILE IT IS TRUE THAT THE REQUEST FOR RELIEF WAS PHRASED AS A "MODIFICATION OF OUR BID AS FOLLOWS" , THIS CHOICE OF WORDS DOES NOT CONTROL IN THE FACE OF THE SUBSTANCE OF THE REQUEST. PARTICULAR, GRAZIANO DESCRIBED THE ACTS WHICH LED TO ITS REQUEST FOR AN ADJUSTMENT IN ITS BID PRICE AS "A GROSS ERROR" AND AS ,ERRONEOUS". THE ADJUSTED PRICE SUGGESTED WAS IN TURN LABELED "CORRECT". WE BELIEVE THAT THIS LANGUAGE CLEARLY CONNOTES AN ATTEMPT TO RECTIFY A MISTAKE IN PREPARING A BID, AND NOT THE SUBMISSION OF AN UNTIMELY MODIFICATION OF A BID. WE THEREFORE CONCLUDE THAT THE LEGAL EFFECT OF GRAZIANO'S LETTER OF MAY 15, 1968, MUST BE DETERMINED IN ACCORDANCE WITH ASPR 2-406 AND THE DECISIONS OF THIS OFFICE APPLICABLE TO MISTAKES IN BID. THE CONTRACTING OFFICER DID SO IN THIS CASE.

WITH RESPECT TO GRAZIANO'S ATTEMPT TO WITHDRAW THE REQUEST FOR CORRECTION OF ITS BID UPON BEING ADVISED THAT, WHEN PROPERLY CORRECTED, ITS BID WAS SECOND LOW AND THEREFORE NOT FOR CONSIDERATION, THE CONTRACTING OFFICER ACTED IN CONFORMANCE WITH APPLICABLE REGULATION AND THE DECISIONS OF THIS OFFICE WHEN HE REFUSED TO PERMIT SUCH A WITHDRAWAL. TO DO OTHERWISE WOULD HAVE PLACED GRAZIANO IN THE POSITION OF BEING ABLE TO INSIST UPON THE CORRECTION OF ITS BID AND BE REJECTED AS SECOND LOW BIDDER, OR TO WAIVE THE CORRECTION AND REMAIN THE LOW BIDDER. WERE THIS PERMITTED, GRAZIANO WOULD HAVE BEEN GRANTED AN OPPORTUNITY TO ELECT THE COURSE OF ACTION WHICH BEST SUITED ITS INTERESTS IN VIEW OF THE EXPOSED BID PRICES OF ITS COMPETITORS. FOR THIS REASON, ASPR 2-406.3 (A) (3) AND SUCH DECISIONS OF THIS OFFICE AS 42 COMP. GEN. 723, 725, PROHIBIT THE WAIVER OF AN ERROR WHERE CORRECTION WOULD MAKE ANOTHER BID LOW. TO PERMIT WITHDRAWAL OF THE CLAIM OF ERROR WOULD IN SUCH CIRCUMSTANCES BE DETRIMENTAL TO PURPOSES OF THE COMPETITIVE BIDDING SYSTEM.

WITH RESPECT TO YOUR CONTENTION THAT BECAUSE OF THE MONETARY SAVINGS OFFERED BY GRAZIANO'S BID, WHEN COMPARED TO TIMMONS-, AWARD TO YOUR CLIENT WOULD BE IN THE GOVERNMENT'S BEST INTEREST, IT HAS LONG BEEN THE POSITION OF THIS OFFICE THAT THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM IS MORE TO THE GOVERNMENT'S INTEREST THAN ANY POSSIBLE SHORT RANGE MONETARY BENEFIT OBTAINED THROUGH THE VIOLATION OF THAT INTEGRITY. WE THEREFORE FIND UNACCEPTABLE ANY ARGUMENT PREMISED SOLELY UPON FINANCIAL CONSIDERATIONS.

ACCORDINGLY, WE HAVE NO OBJECTION TO THE AWARD OF A CONTRACT TO THE NEXT LOW BIDDER, TIMMONS, BUTT AND HEAD, INCORPORATED, UNDER THE CIRCUMSTANCES PRESENTED HERE.