B-166603, MAY 16, 1969

B-166603: May 16, 1969

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INC: REFERENCE IS MADE TO YOUR TELEGRAM. SUBSEQUENT CORRESPONDENCE IN WHICH YOU HAVE PROTESTED AGAINST AN AWARD MADE TO THE TYEE CONSTRUCTION COMPANY ON MARCH 27. THE DESCRIPTION OF WORK IN THE IFB WAS AS FOLLOWS: "FURNISH ALL LABOR. BILLS OF MATERIAL DESIGNATED IN PARAGRAPH 1-102 WHICH ARE MADE A PART OF THIS INVITATION FOR BIDS.'. THERE WERE NO ALTERNATE OR OPTIONAL ITEMS. FOLLOWING THE LAST QUOTED LINE WAS THE STATEMENT: "AWARD WILL BE MADE AS A WHOLE TO ONE BIDDER.'. WHEN BIDS WERE OPENED THE PROCURING ACTIVITY NOTED THAT THE TYEE CONSTRUCTION COMPANY'S TOTAL BID OF $664. 958.40 WAS THE LOWEST OF THE NINE OFFERS RECEIVED. HAVING STATED THAT TYEE'S ENTRY FOR ITEM 11 WAS BLANK. A REPRESENTATIVE OF THE COMPANY STATED THAT THE AMOUNT INTENDED TO BE INSERTED FOR THIS ITEM WAS $31.

B-166603, MAY 16, 1969

TO POWER CITY ELECTRIC, INC:

REFERENCE IS MADE TO YOUR TELEGRAM, DATED APRIL 3, 1969, AND SUBSEQUENT CORRESPONDENCE IN WHICH YOU HAVE PROTESTED AGAINST AN AWARD MADE TO THE TYEE CONSTRUCTION COMPANY ON MARCH 27, 1969, UNDER INVITATION FOR BIDS (IFB) NO. 1481, ISSUED ON FEBRUARY 18, 1969, BY THE BONNEVILLE POWER ADMINISTRATION FOR THE CONSTRUCTION OF THE 500/230 KV SUBSTATION, SNOHOMISH COUNTY, WASHINGTON. THE DESCRIPTION OF WORK IN THE IFB WAS AS FOLLOWS:

"FURNISH ALL LABOR, TOOLS, CONSTRUCTION EQUIPMENT, CERTAIN MATERIALS AND PERFORM ALL WORK FOR CONSTRUCTION OF THE 500/230 KV MONROE SUBSTATION, SNOHOMISH COUNTY, WASHINGTON, ALL IN ACCORDANCE WITH THE ATTACHED SPECIFICATIONS AND THE MAPS, DRAWINGS, AND BILLS OF MATERIAL DESIGNATED IN PARAGRAPH 1-102 WHICH ARE MADE A PART OF THIS INVITATION FOR BIDS.' THE BID FORM CONTAINED THE FOLLOWING STATEMENT:

"IN COMPLIANCE WITH THE ABOVE-DATED INVITATION FOR BIDS, THE UNDERSIGNED PROPOSES TO PERFORM ALL WORK FOR CONSTRUCTION OF THE 500/230 KV MONROE SUBSTATION, SNOHOMISH COUNTY, WASHINGTON IN STRICT ACCORDANCE WITH THE GENERAL PROVISIONS (STANDARD FORM 23A) LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS IN EXCESS OF $2,000 (STANDARD FORM 19-A), SPECIFICATIONS, SCHEDULES, DRAWINGS, AND CONDITIONS, FOR THE FOLLOWING AMOUNT/S) AS LISTED ON THE ATTACHED SCHEDULE OF DESIGNATIONS AND BID PRICES.'

THE REFERENCED SCHEDULE DIVIDED THE WORK INTO 26 ITEMS, WITH SPACES FOR INSERTION OF LUMP SUM OR UNIT AND EXTENDED TOTAL PRICES, AND AT THE BOTTOM INCLUDED A LINE READING: "TOTAL, ITEMS 1 TO 26 INCLUSIVE.' THERE WERE NO ALTERNATE OR OPTIONAL ITEMS, AND FOLLOWING THE LAST QUOTED LINE WAS THE STATEMENT: "AWARD WILL BE MADE AS A WHOLE TO ONE BIDDER.'

WHEN BIDS WERE OPENED THE PROCURING ACTIVITY NOTED THAT THE TYEE CONSTRUCTION COMPANY'S TOTAL BID OF $664,958.40 WAS THE LOWEST OF THE NINE OFFERS RECEIVED, BUT THAT THE COMPANY HAD FAILED TO INSERT A PRICE FOR ITEM 11, BUS AND CONNECTORS (A LUMP SUM ITEM); ALSO THAT THE COMPANY'S AGGREGATE PRICE EXCEEDED THE SUM OF THE INDIVIDUAL PRICES LISTED FOR THE OTHER 25 ITEMS BY $31,000. WHEN THE BID OFFICER FINISHED READING THE TYEE BID, HAVING STATED THAT TYEE'S ENTRY FOR ITEM 11 WAS BLANK, A REPRESENTATIVE OF THE COMPANY STATED THAT THE AMOUNT INTENDED TO BE INSERTED FOR THIS ITEM WAS $31,000, AND THAT SUM WHEN ADDED TO THE OTHER ITEMS, WOULD MAKE THE LISTED TOTAL PRICE OF $664,958.40 CORRECT.

PURSUANT TO THE PROCURING ACTIVITY'S REQUEST THE COMPANY SUBSEQUENTLY FURNISHED DOCUMENTATION WHICH SHOWED THAT IT HAD LISTED MATERIAL, LABOR AND EQUIPMENT COSTS FOR ITEM 11 AND ENTERED A BID PRICE OF $31,000 FOR ITEM 11 ON ITS WORKSHEETS, AND CONTENDED THAT IT HAD INADVERTENTLY FAILED TO TRANSPOSE THIS AMOUNT TO THE CORRESPONDING ENTRY BLANK ON ITS BID. ADDITIONALLY, A COMPARISON OF THE PRICES OTHER BIDDERS HAD QUOTED ON ITEM 11 REVEALED THAT THIS AMOUNT WAS WITHIN THE RANGE OF THE BIDS SUBMITTED ON THE ITEM. THE PROCURING ACTIVITY CONCLUDED THAT CLEAR AND CONVINCING EVIDENCE EXISTED AS TO THE MISTAKE AND THE PRICE ACTUALLY INTENDED TO BE OFFERED FOR ITEM 11 AND THAT THE COMPANY'S BID COULD THEREFORE BE CONSIDERED FOR AWARD IN THE AMOUNT OF ITS AGGREGATE LOW PRICE IN ACCORDANCE WITH FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.406-3, QUOTED IN PERTINENT PART AS FOLLOWS: "SEC. 1-2.406-3 OTHER MISTAKES DISCLOSED BEFORE AWARD.

"/A) HEADS OF EXECUTIVE AGENCIES ARE AUTHORIZED, IN ORDER TO MINIMIZE DELAY IN CONTRACT AWARDS, TO MAKE THE ADMINISTRATIVE DETERMINATIONS DESCRIBED BELOW IN CONNECTION WITH MISTAKES IN BIDS ALLEGED AFTER OPENING OF BIDS AND BEFORE AWARD. THE AUTHORITY CONTAINED HEREIN TO PERMIT CORRECTION OF BIDS IS LIMITED TO BIDS WHICH, AS SUBMITTED, ARE RESPONSIVE TO THE INVITATION FOR BIDS, AND MAY NOT BE USED TO PERMIT CORRECTION OF BIDS TO MAKE THEM RESPONSIVE. THIS AUTHORITY IS IN ADDITION TO THAT IN SEC. 1-2.406-2 OR THAT WHICH MAY BE OTHERWISE AVAILABLE.

"/1) A DETERMINATION MAY BE MADE PERMITTING THE BIDDER TO WITHDRAW HIS BID WHERE THE BIDDER REQUESTS PERMISSION TO DO SO AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES THE EXISTENCE OF A MISTAKE. HOWEVER, IF THE EVIDENCE IS CLEAR AND CONVINCING BOTH AS TO THE EXISTENCE OF A MISTAKE AND AS TO THE BID ACTUALLY INTENDED, AND IF THE BID, BOTH AS UNCORRECTED AND CORRECTED, IS THE LOWEST RECEIVED A DETERMINATION MAY BE MADE TO CORRECT THE BID AND NOT PERMIT ITS WITHDRAWAL.

"/2) A DETERMINATION MAY BE MADE PERMITTING THE BIDDER TO CORRECT HIS BID WHERE THE BIDDER REQUESTS PERMISSION TO DO SO AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED. HOWEVER, IF SUCH CORRECTION WOULD RESULT IN DISPLACING ONE OR MORE LOWER ACCEPTABLE BIDS, THE DETERMINATION SHALL NOT BE MADE UNLESS THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND BID ITSELF. IF THE EVIDENCE IS CLEAR AND CONVINCING ONLY AS TO THE MISTAKE, BUT NOT AS TO THE INTENDED BID, A DETERMINATION PERMITTING THE BIDDER TO WITHDRAW HIS BID MAY BE MADE.' AWARD WAS MADE TO THE COMPANY ON MARCH 27, 1969.

YOU MAINTAIN THAT TYEE'S FAILURE TO INCLUDE A PRICE FOR ITEM 11 OF ITS BID SHOULD HAVE CAUSED REJECTION OF THE OFFER PURSUANT TO INSTRUCTIONS TO BIDDERS, STANDARD FORM 22, NO. 5, QUOTED AS FOLLOWS:

"5. PREPARATION OF BIDS. (A) BIDS SHALL BE SUBMITTED ON THE FORMS FURNISHED, OR COPIES THEREOF, AND MUST BE MANUALLY SIGNED. IF ERASURES OR OTHER CHANGES APPEAR ON THE FORMS, EACH ERASURE OR CHANGE MUST BE INITIALED BY THE PERSON SIGNING THE BID. UNLESS SPECIFICALLY AUTHORIZED IN THE INVITATION FOR BIDS, TELEGRAPHIC BIDS WILL NOT BE CONSIDERED.

"/B) THE BID FORM MAY PROVIDE FOR SUBMISSION OF A PRICE OR PRICES FOR ONE OR MORE ITEMS, WHICH MAY BE LUMP SUM BIDS, ALTERNATE PRICES, SCHEDULED ITEMS RESULTING IN A BID ON A UNIT OF CONSTRUCTION OR A COMBINATION THEREOF, ETC. WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID. WHEN SUBMISSION OF A PRICE ON ALL ITEMS IS NOT REQUIRED, BIDDERS SHOULD INSERT THE WORDS - NO BID- IN THE SPACE PROVIDED FOR ANY ITEM ON WHICH NO PRICE IS SUBMITTED. * * *.'

WE FIND NOTHING IN THE BID FORM, STANDARD FORM 21 (CONSTRUCTION CONTRACT) WHICH EXPLICITLY REQUIRED BIDDERS TO QUOTE PRICES ON ALL ITEMS, SO THAT WE DO NOT FEEL THAT TYEE'S FAILURE TO BID ON ITEM 11 WOULD AUTOMATICALLY DISQUALIFY ITS OFFER PURSUANT TO INSTRUCTIONS TO BIDDERS NO. 5B, QUOTED ABOVE, AS YOU CONTEND.

WE BELIEVE THE COMPANY'S BID SHOULD HAVE BEEN REJECTED FOR THIS DEFICIENCY ONLY IF ITS LEGAL OBLIGATION TO FURNISH THE WORK DESCRIBED IN ITEM 11 AS PART OF ITS TOTAL PRICE WAS AMBIGUOUS, .E., CAPABLE OF BEING REASONABLY UNDERSTOOD IN MORE THAN ONE POSSIBLE WAY. 45 COMP. GEN. 221. IN THIS REGARD THERE APPEAR TO BE ONLY TWO POSSIBLE EXPLANATIONS FOR THE OMISSION OF A PRICE FOR ITEM 11: (1) THE COMPANY DID NOT INTEND TO PERFORM THE WORK DESCRIBED IN ITEM 11 AS PART OF ITS TOTAL PRICE, AND THE EXCESSIVE AGGREGATE PRICE RESULTED FROM AN ERROR IN ADDING THE OTHER 25 ITEM PRICES LISTED IN THE BID; OR (2) THE COMPANY INTENDED TO PERFORM THE WORK DESCRIBED IN ITEM 11 AS PART OF ITS TOTAL PRICE AND THE DIFFERENCE BETWEEN THE TOTAL PRICE LISTED AND THE SUM OF THE 25 OTHER ITEM PRICES REPRESENTED THE AMOUNT THE COMPANY INTENDED TO INSERT FOR ITEM 11. WE ARE UNABLE TO CONSIDER THE FIRST EXPLANATION AS REASONABLE OR PLAUSIBLE, BECAUSE THE TOTAL PRICE BLANK LISTED AFTER ITEM 26 SPECIFICALLY STATED THAT SUCH SUM INCLUDED ITEMS 1 THROUGH 26 AND BIDDERS WERE ADVISED THAT A SINGLE AWARD WOULD BE MADE FOR THE ENTIRE CONSTRUCTION PROJECT, SO THAT A BID OFFERING ANYTHING LESS THAN ALL ITEMS COULD NOT BE ACCEPTED. MOREOVER, SINCE TYEE'S TOTAL PRICE EXCEEDED THE SUM OF ITS LISTED ITEM PRICES BY AN AMOUNT COMPARABLE TO THE QUOTATIONS OFFERED BY OTHER BIDDERS ON ITEM 11 AND ONLY ONE BLANK WAS LEFT OPEN ON THE COMPANY'S BID SCHEDULE, IT APPEARS OBVIOUS THAT THE DISCREPANCY WAS CAUSED BY INADVERTENT FAILURE TO ENTER THIS DOLLAR VALUE IN ITEM 11, RATHER THAN BY A MATHEMATICAL ERROR IN ADDING THE OTHER ITEM PRICES OF ITS BID. WE THEREFORE BELIEVE THE COMPANY COULD NOT UPON ACCEPTANCE OF ITS BID SUCCESSFULLY AVOID THE LEGAL OBLIGATION TO PERFORM THE ENTIRE WORK, INCLUDING ITEM 11, AT ITS TOTAL PRICE, AND THAT THE PROCURING ACTIVITY WAS THEREFORE JUSTIFIED IN CONSIDERING TYEE'S BID FOR AWARD.

YOU CITE IN SUPPORT OF YOUR PROTEST THE RECENT REJECTION OF THE INTERSTATE ELECTRIC COMPANY'S BID UNDER BOONEVILLE POWER ADMINISTRATION IFB NO. 1386 FOR FAILURE TO QUOTE A PRICE ON ITEM 49 OF THAT IFB. 165769, JANUARY 21, 1969. ON THE FACTS IN THAT CASE WE CONCLUDED THAT IT WAS DOUBTFUL WHETHER THE COMPANY WOULD HAVE BEEN OBLIGATED TO FURNISH THE WORK REQUIREMENTS OF THE ITEM AS PART OF ITS TOTAL BID PRICE; AND SINCE THE COMPANY'S BID CONTAINED THREE OTHER ITEM PRICE ERRORS, IT WAS IMPOSSIBLE TO ASSIGN ANY DOLLAR VALUE TO THE WORK REQUIRED UNDER ITEM 49, AS CAN READILY BE DONE WITH RESPECT TO ITEM 11 OF TYEE'S BID IN THE INSTANT CASE. WE THEREFORE BELIEVE THAT THE INTERSTATE ELECTRIC CASE IS FACTUALLY DISTINGUISHABLE FROM THE CASE PRESENTED BY THE SUBJECT PROTEST. IN B-160663, JANUARY 26, 1967, WE UPHELD REJECTION OF A BID WHICH FAILED TO QUOTE AN ITEM PRICE UNDER AN AMENDED IFB BECAUSE IT WAS DOUBTFUL WHETHER THE BIDDER WOULD HAVE BEEN LEGALLY OBLIGATED TO FURNISH THE OMITTED ITEM. IN THAT CASE, HOWEVER, THE ITEM HAD BEEN ADDED BY AN AMENDMENT, WHICH ALSO FURNISHED A REVISED SCHEDULE FOR BIDS; HOWEVER, THE BIDDER DID NOT INCORPORATE THE REVISED BIDDING SCHEDULE INTO HIS BID, SO THAT IT WAS IMPOSSIBLE TO DETERMINE WHETHER THE BIDDER HAD IN FACT INCLUDED THE ADDITIONAL ITEM IN THE TOTAL PRICE OFFERED.

SINCE IT IS OUR VIEW THAT TYEE'S BID WAS RESPONSIVE TO ALL WORK REQUIREMENTS OF THE INVITATION, THE PROCURING ACTIVITY'S CONSIDERATION OF CORROBORATIVE PROOF OF THE PRICE THE COMPANY INTENDED TO INSERT IN THE BLANK OPPOSITE ITEM 11 WAS PROPER UNDER FPR 1-2.406-3, QUOTED ABOVE. BELIEVE THE PROOF WHICH WAS SUBMITTED BY THE BIDDER CLEARLY CONFIRMS THAT THE COMPANY INTENDED TO BID $31,000 FOR THIS ITEM, AND SINCE TYEE'S BID WAS THE LOWEST RECEIVED, IT WAS PROPERLY CONSIDERED FOR AWARD IN ACCORDANCE WITH THE APPLICABLE REGULATION.