B-167202, SEP. 2, 1969

B-167202: Sep 2, 1969

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LOW BIDDER WHO FAILED TO ACKNOWLEDGE ERROR FOR NEARLY A MONTH AFTER ATTENTION WAS CALLED TO DIFFERENCE BETWEEN HIS BID AND NEXT LOW BID AND IN ABSENCE OF ANY OTHER INDICATION OF MISTAKE. CONTRACTING OFFICER WAS JUSTIFIED IN ACCEPTING BID. THE MISTAKE WAS ALLEGED AFTER AWARD OF CONTRACT NO. 01-2066. DUE TO BUDGETARY LIMITATIONS ONLY BIDS ON PART A WERE EVALUATED FOR AWARD. THE BIDS WERE OPENED ON DECEMBER 15. YOU WERE THE APPARENT LOW BIDDER AT $38. THE REMAINING BIDS ON PART A WERE AS FOLLOWS: $55. THE FOREST SERVICE ESTIMATE WAS $35. COMPARISON OF THE BIDS INDICATED THAT THE DISPARITY WAS DUE TO THE DIFFERENCES BETWEEN PRICES QUOTED FOR ITEMS 590-1 AND 590-2. THE BIDS ON THESE TWO ITEMS ARE AS FOLLOWS: GOVERNMENT'S ITEM QUANTITY ESTIMATE RADANDT JOHNSON UNIT TOTAL UNIT TOTAL UNIT TOTAL .

B-167202, SEP. 2, 1969

CONTRACTS - MISTAKES DECISION TO H.F. RADANDT, INC., DENYING CLAIM FOR PRICE ADJUSTMENT ON BASIS OF MISTAKE IN BID INCIDENT TO AWARD OF ROAD CONSTRUCTION CONTRACT BY DEPARTMENT OF AGRICULTURE. LOW BIDDER WHO FAILED TO ACKNOWLEDGE ERROR FOR NEARLY A MONTH AFTER ATTENTION WAS CALLED TO DIFFERENCE BETWEEN HIS BID AND NEXT LOW BID AND IN ABSENCE OF ANY OTHER INDICATION OF MISTAKE, CONTRACTING OFFICER WAS JUSTIFIED IN ACCEPTING BID. THEREFORE ACCEPTANCE CONSUMMATED VALID AND BINDING CONTRACT. HENCE CLAIM MUST BE DENIED.

TO H.F. RADANDT, INC.:

WE REFER TO YOUR LETTER OF JUNE 9, 1969, REQUESTING A REVIEW OF YOUR CLAIM, PREVIOUSLY DENIED BY A DECISION DATED APRIL 16, 1969, BY THE OFFICE OF GENERAL COUNSEL, DEPARTMENT OF AGRICULTURE, FOR THE SUM OF $4,689.16 CLAIMED ON THE BASIS OF A MISTAKE IN BID. THE MISTAKE WAS ALLEGED AFTER AWARD OF CONTRACT NO. 01-2066, R-9, BY THE U.S. FOREST SERVICE, FOR THE CONSTRUCTION OF WARREN ROAD NO. 1410 AT CHEQUAMEGON NATIONAL FOREST, ASHLAND COUNTY, WISCONSIN.

THE INVITATION FOR BIDS, ISSUED ON NOVEMBER 15, 1968, REQUESTED BIDS ON PART A-ROADWAY; PART B-ALTERNATE. DUE TO BUDGETARY LIMITATIONS ONLY BIDS ON PART A WERE EVALUATED FOR AWARD. THE BIDS WERE OPENED ON DECEMBER 15, 1968, AND YOU WERE THE APPARENT LOW BIDDER AT $38,483.75 ON PART A. THE REMAINING BIDS ON PART A WERE AS FOLLOWS: $55,203.50, $55,836.95, $59,003 AND $72,036.75. THE FOREST SERVICE ESTIMATE WAS $35,923.10. COMPARISON OF THE BIDS INDICATED THAT THE DISPARITY WAS DUE TO THE DIFFERENCES BETWEEN PRICES QUOTED FOR ITEMS 590-1 AND 590-2, PARKING SPURS. THE BIDS ON THESE TWO ITEMS ARE AS FOLLOWS:

GOVERNMENT'S

ITEM QUANTITY ESTIMATE RADANDT JOHNSON

UNIT TOTAL UNIT TOTAL UNIT TOTAL

---- ----- ---- ----- ---- ----- 590-1 22 $100 $2,200 $200 $4,400 $600 $13,200 590-2 32 60 1,920 150 4,800 350 11,200

$4,120 $9,200 $24,400

IT IS REPORTED THAT ON DECEMBER 20, 1968, THE CONTRACTING OFFICER REQUESTED YOU BY TELEGRAPH TO VERIFY YOUR BID BECAUSE IT WAS 30 PERCENT UNDER THE SECOND LOW BID OF $55,203.50, SUBMITTED BY REUBEN JOHNSON AND SON. THE TELEGRAPH STATED: "REFER INVITATION FOR BID NUMBER 1-69-23, WARREN ROAD NUMBER 1410. YOUR BID FOR PART A IN THE AMOUNT OF $38,483.00 IS WITHIN REASONABLE LIMITS OF THE GOVERNMENT'S ESTIMATE OF $35,923.00 BUT THE SECOND LOW BID IS $55,203.50. THE WIDE RANGE IN THE THREE PRICES IS CAUSED BY ITEMS 590-1 AND 590-2. VERIFY AND CONFIRM YOUR BID PRICE ON THESE ITEMS. IMMEDIATE WIRE REPLY REQUESTED.'

IN RESPONSE TO THE ABOVE TELEGRAM, THE REPORT STATES THAT ON DECEMBER 23, 1968, YOU CALLED THE CONTRACTING OFFICER BY TELEPHONE AND STATED THAT A REVIEW OF THE WORKSHEETS HAD BEEN UNDERTAKEN TO DETERMINE IF AN ERROR IN BID HAD BEEN MADE. ON JANUARY 3, 1969, THE CONTRACTING OFFICER BY TELEPHONE REQUESTED YOUR DECISION REGARDING YOUR BID; HOWEVER, YOU REPLIED BY REQUESTING A DELAY OF YOUR DECISION UNTIL JANUARY 9. ON JANUARY 6, 1969, THE CONTRACTING OFFICER RECEIVED THE FOLLOWING TELEGRAM FROM YOU: "OUR BID PRICE FOR ITEMS 590-1 AND 590-2 INCLUDES $110.00 DOLLARS FOR 590- 1 AND 60.00 DOLLARS FOR 590-2 FOR THE EXTRA EXPENSE OF WORK ON THESE ITEMS OVER AND ABOVE THE UNIT PRICES FOR ITEMS OF WORK INCLUDED AND LISTED IN THE PROPOSAL; AND 90.00 DOLLARS ON 590-1 AND 90.00 DOLLARS ON 590-2 TO COVER OVERHEAD MOBILIZATION, EXPENSE, BURDEN AND CONTIGENCY FOR ALL ITEMS LISTED IN PART A" IT IS FURTHER REPORTED THAT THE CONTRACTING OFFICER TRIED ON JANUARY 7 AND 14 TO CONTACT YOUR COMPANY TO OBTAIN SOME CLARIFICATION OF YOUR TELEGRAM, BUT WAS UNABLE ON EITHER OCCASION TO REACH ANYONE EXCEPT A SECRETARY, AND HIS REQUESTS TO BE CALLED WERE NOT COMPLIED WITH.

HAVING RECEIVED NO FURTHER COMMUNICATION FROM YOU, THE CONTRACTING OFFICER MADE AWARD OF THE CONTRACT TO YOU ON JANUARY 16, 1969, AND FORWARDED THE FORMAL CONTRACT AND BONDS TO YOU FOR EXECUTION.

IT WAS NOT UNTIL YOUR LETTER OF MARCH 10, 1969, WHICH RETURNED THE FORMAL CONTRACT AND BONDS, THAT YOU CLAIMED ANY ERROR IN YOUR BID. WITH THAT LETTER YOU SUBMITTED TO THE CONTRACTING OFFICER CERTAIN CALCULATIONS IN SUPPORT OF A REQUEST TO INCREASE YOUR PRICE BY $4,689.16. THESE CALCULATIONS PURPORTED TO SHOW YOUR OMISSION OF THE COST OF CLEARING, GRUBBING AND EXCAVATION. YOU ALSO ENCLOSED A TWO PAGE WORKSHEET TO SUBSTANTIATE YOUR CLAIM. THE CONTRACTING OFFICER RECOMMENDED THAT THE CONTRACT PRICE NOT BE INCREASED, BECAUSE HE CONCLUDED THAT PRICES QUOTED FOR THE PARKING SPURS IN YOUR BID WERE APPARENTLY WHAT YOU INTENDED.

THE OFFICE OF GENERAL COUNSEL CONCURRED WITH THE CONTRACTING OFFICER'S RECOMMENDATION, AND DENIED YOUR CLAIM BY DECISION DATED APRIL 16, 1969.

SECTION 1-2.406-3 (D) (1) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) PROVIDES THAT WHENEVER THE CONTRACTING OFFICER SUSPECTS A MISTAKE IN BID, HE SHOULD IMMEDIATELY REQUEST VERIFICATION OF THE BID, SPECIFICALLY INFORMING "THE BIDDER WHY THE REQUEST FOR VERIFICATION IS MADE -- THAT A MISTAKE IS SUSPECTED AND THE BASIS FOR SUCH SUSPICION; E.G., THAT THE BID IS SIGNIFICANTLY OUT OF LINE WITH THE NEXT LOW OR OTHER BIDS OR WITH THE GOVERNMENT'S ESTIMATE.' IN THIS CASE, YOU WERE SPECIFICALLY INFORMED BY TELEGRAM OF DECEMBER 20, 1969, THAT A MISTAKE IN PRICE WAS SUSPECTED, THE AMOUNT OF THE SECOND LOW BID, AND THE SPECIFIC ITEM IN WHICH MISTAKE WAS SUSPECTED. WE BELIEVE THAT THE REQUEST FOR VERIFICATION IN THIS CASE COMPLIED WITH THE CITED PARAGRAPH OF THE FPR AS WELL AS WITH THE PREVIOUS DECISIONS OF THIS OFFICE. YOUR TELEGRAPH OF JANUARY 6, 1969, WHILE SOMEWHAT EQUIVOCAL, DID NOT IN ANY WAY INDICATE THAT YOU CLAIMED ANY ERROR IN THE BID, AND WE BELIEVE THAT IT WAS PROPERLY INTERPRETED AS CONFIRMING YOUR BID PRICE ON ITEMS 590-1 AND 590-2. CAREFUL READING OF THAT TELEGRAPH SHOWS THAT IT STATES ONLY THAT THE BIDS FOR ITEMS 590-1 AND 590- 2 WERE $100 AND $60, RESPECTIVELY, FOR "EXTRA EXPENSE," AND $90 FOR "OVERHEAD MOBILIZATION," ETC., MAKING UP THE TOTALS OF $200 AND $150 FOR THOSE ITEMS, JUST AS APPEARED IN YOUR ORIGINAL BID. IN THIS CONNECTION, IN 37 COMP. GEN. 786, WE STATED ON PAGE 788 THAT: "THE RECORD ESTABLISHES THAT THE GOVERNMENT DID ALL THAT WAS REQUIRED OF IT TO ASCERTAIN THE CORRECTNESS OF FORWAY'S BID; IN FACT, FORWAY WAS SPECIFICALLY ADVISED THAT ITS BID WAS CONSIDERABLY LOWER THAN THE NEXT BID. IT WAS NOT UNTIL AFTER FORWAY UNEQUIVOCALLY CONFIRMED ITS BID THAT THE CONTRACTING OFFICER CONSIDERED IT CORRECT AND PROPER FOR AWARD.'

TURNING TO YOUR LETTER OF MARCH 10, 1969, AND THE WORKSHEETS, A DETAILED REVIEW DOES NOT CLEARLY SHOW HOW THE REVISED AMOUNTS CLAIMED FOR ITEMS 590 -1 AND 590-2 WERE COMPUTED. THE CALCULATIONS ON THE WORKSHEET DO ESTABLISH THAT THE BID PRICES FOR THE ITEMS IN QUESTION WERE COMPUTED AT $200 AND $150, RESPECTIVELY; HOWEVER, THERE ARE NO PROPER EXPLANATIONS OR CALCULATIONS TO SHOW THAT ANY OTHER FACTORS OR AMOUNTS WERE INTENDED WHEN THE BIDS WERE MADE UP.

IN ORDER THAT A CONTRACT PRICE MAY BE CHANGED AFTER AWARD ON THE GROUND OF MISTAKE IN BID THERE MUST NOT ONLY BE SUFFICIENT EVIDENCE TO ESTABLISH THAT THE BIDDER ACTUALLY INTENDED TO BID AN AMOUNT OTHER THAN THAT SET FORTH IN THE BID, BUT IT MUST ALSO APPEAR THAT THE PARTY ACCEPTING THE BID WAS ON NOTICE, ACTUAL OR CONSTRUCTIVE, THAT BY REASON OF ERROR IT WAS NOT WHAT THE OFFEROR INTENDED. IN VIEW OF YOUR FAILURE TO ALLEGE ERROR FOR NEARLY A MONTH AFTER YOUR ATTENTION WAS CALLED TO THE DIFFERENCE BETWEEN YOUR BID AND THE NEXT LOWEST, AND THE ABSENCE OF ANY OTHER INDICATION OF MISTAKE, WE FEEL THAT THE CONTRACTING OFFICER WAS JUSTIFIED IN ACCEPTING YOUR BID IN THE BELIEF THAT YOUR PRICES ON ITEMS 590-1 AND 590-2 WERE INTENDED, I.E., $200 AND $150 EACH, RESPECTIVELY.

ACCORDINGLY, THE ACCEPTANCE OF YOUR BID CONSUMMATED A VALID AND BINDING CONTRACT, SEE U.S. V PURCELL ENVELOPE CO., 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V U.S., 259 U.S. 75. IN ADDITION, EVEN IF IT BE CONCEDED THAT YOUR BID WAS IN ERROR, YOUR EXECUTION OF THE FORMAL CONTRACT AND BONDS WITH FULL KNOWLEDGE OF THE FACTS PRECLUDED ANY MODIFICATION OF THE CONTRACT THEREAFTER, ABSENT ANY PROMISE BY THE GOVERNMENT THAT A MODIFICATION WOULD BE ALLOWED. SEE MASSMAN CONSTRUCTION CO. V UNITED STATES, 102 C.CLS. 699. ..END :