B-165047, SEPT. 5, 1968

B-165047: Sep 5, 1968

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SECRETARY: REFERENCE IS MADE TO A LETTER DATED AUGUST 9. THREE ALTERNATE BIDS ON ITEMS WHICH WERE TO BE DEDUCTED FROM THE BASIC BID IN THE EVENT OF OMISSION OF SUCH ITEMS AT THE OPTION OF THE GOVERNMENT. STATED: "BIDDERS ARE REQUESTED TO SUBMIT BIDS ON ALL ITEMS. THE BIDS WERE OPENED. FOUR BIDS WERE RECEIVED WHICH. WERE AS FOLLOWS: ADSCO C-AND'S WILLIAM L. 620 THE BIDS WERE EVALUATED ON THE BASIS OF THE BASIC BID LESS ALL ALTERNATES. WAS THE LOW BIDDER AT $35. NOTICE OF ACCEPTANCE AND THE PROPER CONTRACT DOCUMENTS WERE FORWARDED TO THE LOW BIDDER FOR EXECUTION. THE CONTRACTOR WAS VERBALLY INFORMED THAT AWARD WAS MADE IN GOOD FAITH AND THAT THE CONTRACTING OFFICER COULD NOT POSSIBLY HAVE BEEN ON NOTICE THAT AN ERROR HAD BEEN MADE.

B-165047, SEPT. 5, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 9, 1968, WITH ENCLOSURES, FROM THE DIRECTOR, OFFICE OF PLANT AND OPERATIONS, REQUESTING A DECISION CONCERNING THE PROPRIETY OF PERMITTING CORRECTION AFTER AWARD OF A MISTAKE IN BID CLAIMED BY WILLIAM L. HILTON, INC., THE LOW BIDDER UNDER INVITATION FOR BIDS ARS-57-B-68 ISSUED BY THE AGRICULTURAL RESEARCH SERVICE, HYATTSVILLE, MARYLAND.

THE INVITATION IN QUESTION SOLICITED BIDS FOR THE CONSTRUCTION OF A HEADHOUSE ADDITION AT THE REGIONAL PLANT INTRODUCTION STATION, WASHINGTON STATE UNIVERSITY, PULLMAN, WASHINGTON. THE BID SCHEDULE OF THE INVITATION PROVIDED FOR A BASIC BID, AND THREE ALTERNATE BIDS ON ITEMS WHICH WERE TO BE DEDUCTED FROM THE BASIC BID IN THE EVENT OF OMISSION OF SUCH ITEMS AT THE OPTION OF THE GOVERNMENT. THE SUBJECT INVITATION, IN PART, STATED:

"BIDDERS ARE REQUESTED TO SUBMIT BIDS ON ALL ITEMS, OTHERWISE THEIR BID MAY BE CONSIDERED AS NONRESPONSIVE TO THE INVITATION. THE GOVERNMENT RESERVES THE RIGHT TO ACCEPT THE BASIC BID ITEM 1 WITH OR WITHOUT ANY COMBINATION OF ALTERNATE ITEMS 1, 2, AND 3, AND TO MAKE THE AWARD ON THE BASIS WHICHEVER PROVES MOST ADVANTAGEOUS TO THE GOVERNMENT. * * *"

ON MAY 31, 1968, WILLIAM L. HILTON, IN., SUBMITTED THE FOLLOWING BID, PURSUANT TO THE INVITATION:

BASIC BID $50,000

ALTERNATE 1 500

ALTERNATE 2 500

ALTERNATE 3 300

ON JUNE 5, 1968, WILLIAM L. HILTON, INC., IN A TELEGRAM TO THE CONTRACTING OFFICER, STATED IN PART:

"* * * DEDUCT FROM BASIC BID $7300 INCREASE ALTERNATE ONE $2000 INCREASE ALTERNATE TWO $2140 INCREASE ALTERNATE THREE $1365.'

ON THE SAME DAY, THE BIDS WERE OPENED. FOUR BIDS WERE RECEIVED WHICH, AFTER CONSIDERATION OF TELEGRAPHIC MODIFICATIONS, WERE AS FOLLOWS:

ADSCO C-AND'S

WILLIAM L. CONSTRUCTION BUILDERS S.G. MORIN

HILTON, INC. CO. INC. AND SON, INC.

------------ ------------ -------- ----------- BASIC BID $42,700 49,689 50,000 53,877 ALTERNATE 1 2,500 4,098 1,9002,100 ALTERNATE 2 2,640 3,129 2,300 2,310 ALTERNATE 3 1,665 1,391

1,500 1,620

THE BIDS WERE EVALUATED ON THE BASIS OF THE BASIC BID LESS ALL ALTERNATES, RESULTING IN A FINDING THAT WILLIAM L. HILTON, INC., WAS THE LOW BIDDER AT $35,895. ON JUNE 13, 1968, NOTICE OF ACCEPTANCE AND THE PROPER CONTRACT DOCUMENTS WERE FORWARDED TO THE LOW BIDDER FOR EXECUTION.

ON JUNE 25, 1968, MR. WILLIAM L. HILTON CALLED THE CONTRACTING OFFICER AND CLAIMED THAT A MISTAKE HAD BEEN MADE IN THE TELEGRAM OF JUNE 5, 1968, IN THAT HE INTENDED THE TELEGRAM TO AD,"DEDUCT FROM BASIC BID $3,700," INSTEAD OF $7,300. ACCORDINGLY, MR. HILTON REQUESTED THE CONTRACTING OFFICER TO AMEND THE CONTRACT PRICE TO COMPENSATE FOR THE ERROR. THE CONTRACTOR WAS VERBALLY INFORMED THAT AWARD WAS MADE IN GOOD FAITH AND THAT THE CONTRACTING OFFICER COULD NOT POSSIBLY HAVE BEEN ON NOTICE THAT AN ERROR HAD BEEN MADE. THE CONTRACTOR WAS ADVISED THAT HIS CLAIM WOULD HAVE TO BE SUBMITTED TO THE COMPTROLLER GENERAL FOR RESOLUTION. THE CONTRACTOR AGREED TO PROCEED WITH THE WORK AND FORWARD PERTINENT DATA TO SUPPORT HIS CLAIM. BY LETTER OF JUNE 26, 1968, THE CONTRACTOR STATED THAT HE HAD SIGNED THE CONTRACT DOCUMENTS UNDER PROTEST.

ON JULY 15, 1968, MR. HILTON FURNISHED SEVERAL WORKSHEETS, A CORRECTED BID SCHEDULE AND A ROUGH DRAFT OF THE JUNE 5, 1968, TELEGRAM. EXPLANATION OF THE PURPOSE OF THE WORKSHEETS, MR. HILTON ADVISED THAT SHEET NUMBERED 1 WAS A RECAP SHEET ON WHICH THE INTENDED BID PRICE WAS ENTERED, WHILE SHEET NUMBERED 2 WAS AN "ADD AND DEDUCT" SHEET USED TO RECORD LATE CHANGES IN SUBCONTRACT OR MATERIAL COSTS. THE EXPLANATION OFFERED FOR THE MISTAKE IS THE STATEMENT RELATED TO THE WORKSHEET AS FOLLOWS:

"IT WILL BE NOTED HERE THAT WE FOUND IT NECESSARY TO ADD TO SHEET 1, $10,460.00. WE CARRIED THIS FROM SHEET 2 TO SHEET 1, AS $10,460.00. THIS MIGHT EXPLAIN WHY WE INTENDED TO DEDUCT $3,600.00 BUT CHANGED IT TO $3,700.00 TO COMPENSATE FOR THIS ERROR.'

A CAREFUL STUDY OF SHEET 1 OF THE WORKPAPERS REVEALS THAT THE ABOVE QUOTED STATEMENT IS INCORRECT, INASMUCH AS THE AMOUNT CARRIED FROM SHEET 2 OF THE WORKSHEET WAS $10,360, INSTEAD OF $10,460. HOWEVER, IT WOULD APPEAR THAT MR. HILTON IS SAYING THAT THE PRICE OF $50,000 ORIGINALLY BID ON ITEM 1 WAS NO MORE THAN AN ESTIMATE, AND THAT THE INTENDED REVISED BID PRICE WAS THE FIGURE OF $46,400 SHOWN ON SHEET NUMBERED 1, WHICH WOULD HAVE REQUIRED A REDUCTION (PRESUMABLY BY TELEGRAM) OF $3,600 TO THE PRICE ORIGINALLY BID ON ITEM 1. WHILE MR. HILTON SPECULATES THAT THE FIGURE OF $3,700 BY WHICH HE NOW CONTENDS HE INTENDED TO REDUCE HIS BID ON ITEM 1 RESULTS FROM CORRECTING THE ERROR IN CARRYING $10,460 INSTEAD OF $10,360 FROM SHEET 2 TO SHEET 1, IT IS APPARENT THAT SUCH CORRECTION WOULD HAVE REQUIRED A TELEGRAPHIC REVISION OF $3,500 RATHER THAN $3,700, IN THE ITEM 1 BID PRICE. NO OTHER EVIDENCE AS TO HOW THE MISTAKE OCCURRED IS CONTAINED IN THE RECORD, NOR DOES IT CONTAIN ANY OTHER EVIDENCE WHICH WOULD ESTABLISH AN INTENTION TO DEDUCT $3,700 RATHER THAN $7,300 FROM THE ITEM 1 BID PRICE.

OUR OFFICE HAS CONSISTENTLY HELD THAT TO ALLOW CORRECTION OF A MISTAKE IN BID CLAIMED AFTER AWARD, THE EVIDENCE MUST BE CONCLUSIVE IN ESTABLISHING THAT A MISTAKE HAS BEEN MADE, THE NATURE OF THE MISTAKE, AND WHAT THE BID PRICE WOULD HAVE BEEN BUT FOR THE MISTAKE. IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT THE EVIDENCE SUBMITTED BY THE CONTRACTOR FALLS SHORT OF THE REQUIRED PROOF TO PERMIT CORRECTION OF HIS BID PRICE.

WITH RESPECT TO MR. HILTON'S BELIEF THAT HIS BID PRICE, AS REDUCED BY THE TELEGRAM, MAY HAVE BEEN AS LOW AS TO PUT THE CONTRACTING OFFICER ON NOTICE OF ERROR PRIOR TO AWARD, SUBPART 1-2.406-2 OF THE FEDERAL PROCUREMENT REGULATIONS PROVIDES:

"AFTER THE OPENING OF BIDS, CONTRACTING OFFICERS SHALL EXAMINE ALL BIDS FOR MISTAKES. IN CASES OF APPARENT MISTAKES, AND IN CASES WHERE THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE MAY HAVE BEEN MADE, HE SHALL REQUEST FROM THE BIDDER A VERIFICATION OF THE BID, CALLING ATTENTION TO THE SUSPECTED MISTAKE. * * *"

THE GOVERNMENT ESTIMATE FOR THE BASIC BID LESS ALL ALTERNATES WAS $32,000, WHILE $35,895 WAS THE BID SUBMITTED BY WILLIAM L. HILTON, INC. THE BASIC BID PRICES WITHOUT DEDUCTION OF ALTERNATES RANGED FROM A LOW OF $42,700 TO A HIGH OF $53,877.

WE THEREFORE CANNOT CONCLUDE THAT THE BID PRICE OF WILLIAM L. HILTON, INC., WAS SO UNUSUAL AS TO ALERT THE CONTRACTING OFFICER TO THE POSSIBILITY OF A MISTAKE IN BID AND REQUIRE A PRE-AWARD VERIFICATION. 163355, JANUARY 26, 1968.

THE RECORD INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN CLAIMED UNTIL AFTER THE AWARD OF THE CONTRACT, AND RESULTED IN A VALID AND BINDING AGREEMENT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V PURCELL ENVELOPE COMPANY, 249 U.S. 313. AS STATED AT 2 MCBRIDE AND WACHTEL, SECTION 12.40:

"THE WEIGHT OF JUDICIAL AUTHORITY FOLLOWS THE DOCTRINE THAT, SINCE A WRITTEN CONTRACT IS PRESUMED TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES, BRAWLEY V U.S. 96 U.S. 168, A BIDDER ALLEGING ERROR AFTER AWARD WILL NOT BE RELIEVED WHERE THE ERROR WAS SOLELY HIS, AND WHERE THE GOVERNMENT DID NOT KNOW OR HAVE REASON TO KNOW THAT THE BID WAS ERRONEOUS, OGDEN AND DOUGHERTY V U.S., U.S. 102 CT. CL. 249 (1944); HYDE PARK CLOTHES, INC. V U.S., 114 CT. CL. 424, 84 F.SUPP. 590 (1949); NIELSON CO. V U.S., 141 CT. CL. 793 (1958).'

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR PAYMENT TO WILLIAM L. HILTON, INC., OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE.

THE FILE TRANSMITTED WITH MR. MOSTOW'S LETTER OF AUGUST 9, 1968, IS RETURNED.