B-165519, NOV. 13, 1968

B-165519: Nov 13, 1968

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SECRETARY: REFERENCE IS MADE TO A LETTER DATED OCTOBER 24. REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE W AND J CONSTRUCTION CORPORATION TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. DACA18-69-C-9019 IS BASED. THAT THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $219. IT IS REPORTED THAT BECAUSE OF THE WIDE DISPARITY BETWEEN THE LOW BID OF W AND J CONSTRUCTION CORPORATION AND THE TWO OTHER BIDS AND THE GOVERNMENT'S ESTIMATE. THE BID OF W AND J CONSTRUCTION CORPORATION WAS ACCEPTED ON SEPTEMBER 20. IT IS REPORTED THAT ON SEPTEMBER 23. THE CONTRACT PRICE OF THE WORK BE INCREASED TO REFLECT THE AMOUNT OF THE ERROR IN ITS BID AND THAT IF THIS WAS NOT POSSIBLE.

B-165519, NOV. 13, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 24, 1968, WITH ENCLOSURES, FROM THE DEPUTY COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE W AND J CONSTRUCTION CORPORATION TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. DACA18-69-C-9019 IS BASED.

THE CANAVERAL DISTRICT, CORPS OF ENGINEERS, PATRICK AIR FORCE BASE, FLORIDA, BY INVITATION NO. DACA18-69-B-9009 REQUESTED BIDS FOR FURNISHING MATERIALS AND LABOR AND FOR PERFORMING ALL WORK NECESSARY FOR BUILDING RELOCATION 85 PERCENT FOOTPRINT, PAD A, LC-39, KENNEDY SPACE CENTER, FLORIDA. W AND J CONSTRUCTION CORPORATION SUBMITTED A BID DATED SEPTEMBER 18, 1968, WHEREIN IT OFFERED TO PERFORM THE WORK FOR THE LUMP SUM OF $155,838. THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDDERS ON THE WORK QUOTED PRICES OF $219,000 AND $248,907, AND THAT THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $219,000.

IT IS REPORTED THAT BECAUSE OF THE WIDE DISPARITY BETWEEN THE LOW BID OF W AND J CONSTRUCTION CORPORATION AND THE TWO OTHER BIDS AND THE GOVERNMENT'S ESTIMATE, THE CONTRACTING OFFICER REQUESTED THE CORPORATION AT THE BID OPENING HELD ON SEPTEMBER 18, 1968, TO CONFIRM ITS BID PRICE. BY LETTER DATED SEPTEMBER 19, 1968, W AND J CONSTRUCTION CORPORATION CONFIRMED ITS BID PRICE OF $155,838 FOR THE WORK DESCRIBED IN THE INVITATION FOR BIDS. THE BID OF W AND J CONSTRUCTION CORPORATION WAS ACCEPTED ON SEPTEMBER 20, 1968.

IT IS REPORTED THAT ON SEPTEMBER 23, 1968, W AND J CONSTRUCTION CORPORATION ADVISED THE CONTRACTING OFFICER THAT AN ERROR IN ADDITION IN THE AMOUNT OF $20,000 HAD BEEN MADE IN SUBCONTRACT PRICES FORMING A PART OF ITS BID. IN A LETTER DATED SEPTEMBER 25, 1968, TO THE CONTRACTING OFFICER, THE CORPORATION REQUESTED THAT PRIOR TO THE EXECUTION OF THE FORMAL CONTRACT, THE CONTRACT PRICE OF THE WORK BE INCREASED TO REFLECT THE AMOUNT OF THE ERROR IN ITS BID AND THAT IF THIS WAS NOT POSSIBLE, THE CONTRACT BE RESCINDED. IN AN AFFIDAVIT, THE PRESIDENT OF THE CORPORATION STATED THAT, AFTER HE ENTERED ALL COST ITEMS ON HIS WORKSHEET, HE ADDED THE ITEMS IN COLUMN 3 OF SUCH SHEET ON THE ADDING MACHINE AND THAT IN ENTERING THE TOTAL OF SUCH ITEMS ON THE WORKSHEET HE ERRONEOUSLY ENTERED THE TOTAL AS $63,088INSTEAD OF $83,088. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS ORIGINAL WORKSHEETS. THE CORPORATION'S SUMMARY ESTIMATE SHEET SHOWS IN COLUMN 3 THEREOF THE PRICES QUOTED BY VARIOUS SUBCONTRACTORS AND THE TOTAL OF THESE PRICES IS SHOWN THEREON AS BEING $63,088. THE CORRECT TOTAL FOR THESE PRICES IS $83,088. THE CORPORATION STATED THAT BUT FOR THE ERROR ITS BID PRICE FOR THE WORK WOULD HAVE BEEN $178,034.

IN HIS REPORT OF OCTOBER 1, 1968, IN WHICH HE RECOMMENDED THAT THE CONTRACT PRICE OF THE WORK BE INCREASED BY $22,196, THE CONTRACTING OFFICER STATED THAT THE CORPORATION'S WORKSHEETS SUBSTANTIATE THAT THE CORPORATION MADE AN ERROR IN ITS BID, AS ALLEGED, AND THAT BUT FOR THE ERROR THE CORPORATION'S BID PRICE FOR THE WORK WOULD HAVE BEEN $178,034 -- $40,966 LESS THAN THE AMOUNT OF THE NEXT LOWEST BID RECEIVED ON THE WORK. IN A SUPPLEMENTAL REPORT DATED OCTOBER 14, 1968, THE CONTRACTING OFFICER STATES THAT AT A MEETING HELD ON SEPTEMBER 25, 1968, MR. JENSEN, PRESIDENT OF THE CORPORATION, WAS URGED TO SIGN THE CONTRACT AND COMMENCE THE WORK, WHILE HE PURSUED HIS REQUEST FOR REFORMATION OF THE CONTRACT; THAT MR. JENSEN WAS INFORMED THAT THE JOB WAS OF EXTREME URGENCY BECAUSE OF ITS RELATION TO CERTAIN ASPECTS OF THE APOLLO SPACE PROGRAM AND THAT THE GOVERNMENT COULD NOT LOSE THE TIME WHICH WOULD NECESSARILY BE CONSUMED IF THE MATTER WERE TO BE PURSUED TO ITS CONCLUSION PRIOR TO THE WORK BEING STARTED; AND THAT MR. JENSEN STATED THAT HE WAS AWARE OF THIS AND THAT, RATHER THAN HINDER THE PROGRAM, HE WOULD EXECUTE THE CONTRACTUAL DOCUMENTS AND BEGIN PERFORMANCE OF THE CONTRACT AWAITING A DECISION REGARDING THE ALLEGED MISTAKE. ALSO, AT THE MEETING, MR. JENSEN STATED THAT HE NO LONGER WAS REQUESTING RESCISSION OF THE CONTRACT, ONLY REFORMATION THEREOF.

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942, 947; AND 27 ID. 17. HOWEVER, IN THE INSTANT CASE, IN VIEW OF THE CONSIDERABLE DISPARITY BETWEEN THE BID OF W AND J CONSTRUCTION CORPORATION AND THE TWO OTHER BIDS AND THE GOVERNMENT ESTIMATE ON THE PROJECT, IT DOES NOT APPEAR THAT THE ORAL REQUEST FOR VERIFICATION OF THE CORPORATION'S BID AT THE BID OPENING WAS ADEQUATE TO DISPEL THE EXISTING DOUBT THAT THE CONTRACTING OFFICER HAD AS TO THE CORRECTNESS OF THE BID. THEREFORE, THERE EXISTED AT THE TIME AMPLE REASON TO REQUEST FURTHER CLARIFICATION OF THE BID PRIOR TO AWARD. IN THE CIRCUMSTANCES, AND SINCE ENFORCEMENT OF THE CONTRACT WOULD BE INEQUITABLE, W AND J CONSTRUCTION CORPORATION SHOULD NOT BE REQUIRED TO PERFORM THE WORK AT THE PRICE QUOTED IN ITS BID.

IT IS UNDERSTOOD INFORMALLY THAT W AND J CONSTRUCTION CORPORATION IS PERFORMING THE CONTRACT WORK. ACCORDINGLY, CONTRACT NO. DACA18-69-C 9019 MAY BE AMENDED TO PROVIDE FOR A TOTAL PRICE OF $178,034, AS RECOMMENDED BY THE CONTRACTING OFFICER, AND PAYMENT FOR THE WORK PERFORMED IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID OF W AND J CONSTRUCTION CORPORATION, AS CORRECTED, WILL STILL BE THE LOWEST BID RECEIVED ON THE PROJECT.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S REPORTS OF OCTOBER 1 AND 14, 1968, ARE RETURNED AS REQUESTED.