B-167864, OCT. 10, 1969

B-167864: Oct 10, 1969

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

830 IN TRANSFERRING SUBCONTRACTOR'S QUOTATION TO WORKSHEETS AS VERIFIED BY SUPPORTING DOCUMENTS WAS GRANTED AND CONTRACT AWARDED ACCORDINGLY BUT FURTHER RELIEF FOR ADDITIONAL ERROR OF $21. 150 ALLEGED IN FIGURING PROFIT MAY NOT BE GRANTED SINCE ACCEPTANCE OF BID AFTER CONFIRMATION WAS IN GOOD FAITH. SECRETARY: REFERENCE IS MADE TO LETTER ENGGC-N OF SEPTEMBER 5. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DACA23-69-C-0030 IS BASED. FOUR BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 25. WAS THE LOWEST BID RECEIVED. THE PRICES QUOTED BY AKWA AND THE NEXT LOWEST BIDDER AND THE PRICES IN THE GOVERNMENT ESTIMATE FOR THE WORK INVOLVED ARE AS FOLLOWS: BASE SCHEDULE GOVERNMENT AKWA WOERFEL ITEM NO.

B-167864, OCT. 10, 1969

MISTAKES--ALLEGATION AFTER AWARD--AFTER CORRECTION OF BID UPON LOW BIDDER BEING REQUESTED TO VERIFY BID FOR RESERVE CENTER AND MAINTENANCE SHOP, BID BEING LOW IN RELATION TO GOVERNMENT'S ESTIMATE AND OTHER BIDS, RELIEF FROM ALLEGED ERROR OF $12,830 IN TRANSFERRING SUBCONTRACTOR'S QUOTATION TO WORKSHEETS AS VERIFIED BY SUPPORTING DOCUMENTS WAS GRANTED AND CONTRACT AWARDED ACCORDINGLY BUT FURTHER RELIEF FOR ADDITIONAL ERROR OF $21,150 ALLEGED IN FIGURING PROFIT MAY NOT BE GRANTED SINCE ACCEPTANCE OF BID AFTER CONFIRMATION WAS IN GOOD FAITH, CONSUMMATED VALID AND BINDING CONTRACT AND FIXED RIGHTS AND LIABILITIES OF PARTIES, WHICH RIGHTS CANNOT BE WAIVED BY ANY GOVERNMENT OFFICER ABSENT ADEQUATE CONSIDERATION, CONSIDERATION OF SYMPATHY FOR CONTRACTOR'S HARDSHIPS OR MISFORTUNES NO EXCEPTION TO RULE.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER ENGGC-N OF SEPTEMBER 5, 1969, WITH ENCLOSURES, FROM THE ACTING GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE AKWA CONSTRUCTION CO., INC., TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DACA23-69-C-0030 IS BASED.

THE CHICAGO DISTRICT, CORPS OF ENGINEERS, CHICAGO, ILLINOIS, BY INVITATION FOR BIDS NO. DACA23-69-B-0009, AS AMENDED, REQUESTED BIDS--- TO BE OPENED SEPTEMBER 25, 1968--- FOR FURNISHING ALL LABOR AND MATERIALS AND FOR PERFORMING ALL WORK NECESSARY FOR THE CONSTRUCTION OF A 1,000-MAN RESERVE CENTER AND A FIVE-BAY MAINTENANCE SHOP AT MILWAUKEE, WISCONSIN. THE BID PRICE SCHEDULE REQUIRED LUMP-SUM PRICES FOR THE BASE SCHEDULE (ITEMS 1 THROUGH 5) AND FOR SEVEN ADDITIVES ("A" THROUGH "G").

FOUR BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 25, 1968. THE BID SUBMITTED BY AKWA CONSTRUCTION CO., INC., HEREINAFTER REFERRED TO AS AKWA, AS TIMELY MODIFIED BY ITS TELEGRAM OF SEPTEMBER 25, 1968, WAS THE LOWEST BID RECEIVED. THE PRICES QUOTED BY AKWA AND THE NEXT LOWEST BIDDER AND THE PRICES IN THE GOVERNMENT ESTIMATE FOR THE WORK INVOLVED ARE AS FOLLOWS: BASE SCHEDULE GOVERNMENT AKWA WOERFEL

ITEM NO. ESTIMATE CONSTRUCTION CO. CORP. ------ ----- ---------- --------

1 $532,300 $528,747 $546,150

2 91,400 79,366 102,675

3 219,500 114,715 154,150

4 24,600 22,540 23,890

5 18,000 11,172 11,850

------- ------- ------- TOTAL $885,800 $756,540 $838,715 ADDITIVES ("A" - "G") - ---------------------- TOTAL

$ 42,900 $ 60,503 $ 62,275 TOTAL BID PRICE $928,700

$817,043 $900,990 ---------------

IT IS REPORTED THAT BECAUSE THE BID OF AKWA WAS SO LOW IN RELATION TO THE GOVERNMENT ESTIMATE AND THE OTHER THREE BIDS, A REPRESENTATIVE OF THE CONTRACTING OFFICE TELEPHONED AKWA SHORTLY AFTER THE BIDS WERE OPENED ON SEPTEMBER 25, 1968, AND REQUESTED THAT THE CORPORATION VERIFY ITS BID. TELEGRAM OF OCTOBER 9, 1968, AKWA ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN ITS BID PRICE FOR ITEM 3 OF THE BASE SCHEDULE AND THAT THE ERROR OCCURRED WHEN A SUBCONTRACTOR'S QUOTATION IN THE AMOUNT OF $37,800 WAS ERRONEOUSLY TRANSFERRED TO ITS WORKSHEETS AS $24,970--- A DIFFERENCE OF $12,830. UPON COMPLETE REVIEW OF THE EXTENSIVE DOCUMENTATION SUPPORTING THE ALLEGATION OF MISTAKE AND ASCERTAINMENT OF THE ACTUAL AMOUNT OF THE INTENDED BID, THE GENERAL COUNSEL OF THE OFFICE OF THE CHIEF OF ENGINEERS ALLOWED AN UPWARD REVISION TO COMPENSATE FOR THE MISTAKE PURSUANT TO THE AUTHORITY CONTAINED IN PARAGRAPH 2-406.3 (B) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION. ON NOVEMBER 12, 1968, CONTRACT NO. DACA23-69-C 0030 IN THE AMOUNT OF $829,873 WAS AWARDED TO AKWA.

BY LETTER DATED JANUARY 22, 1969, AKWA ADVISED THE CONTRACTING OFFICER THAT ANOTHER ERROR WAS MADE BY THE CORPORATION IN QUOTING ITS BID PRICE FOR ITEM 1 OF THE BASE SCHEDULE. THE CORPORATION STATED THAT ITS ACCOUNTING FIRM, IN PREPARING THE FIRM'S YEAR END STATEMENTS, DISCOVERED THAT AKWA, IN TAKING 5 PERCENT FOR OVERHEAD AND PROFIT OF THE ESTIMATED AMOUNT SHOWN ON WORKSHEET NO. 1, RECORDED THE AMOUNT AS $2,350 INSTEAD OF $23,500. THE CORPORATION REQUESTED THAT THE CONTRACT PRICE OF ITEM 1 OF THE BASE SCHEDULE BE INCREASED BY THE AMOUNT OF $21,150 TO COMPENSATE FOR THE ERROR MADE ON THAT ITEM. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS WORKSHEETS. ESTIMATE SHEET NO. 1 SHOWS VARIOUS ITEMS OF COST AND THE TOTAL OF SUCH ITEMS IS SHOWN AS BEING $469,397. FIVE PERCENT OF $469,397 IS $23,469.85 WHICH THE CORPORATION STATES IT ROUNDED OFF TO $23,500 TO COVER THE ITEM OF OVERHEAD AND PROFIT. THE ESTIMATE SHEET SHOWS THAT THE CORPORATION IN ENTERING THE AMOUNT TO COVER THE ITEM OF OVERHEAD AND PROFIT ON ITS ESTIMATE SHEET MISPLACED THE DECIMAL POINT AND ERRONEOUSLY ENTERED THAT AMOUNT AS $2,350 INSTEAD OF $23,500.

THE SOLE QUESTION HERE FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID OF AKWA, AS ALLEGED, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. ALLIED CONTRACTORS, INC. V UNITED STATES, 159 CT. CL. 548; 310 F.2D 945. AKWA WAS RESPONSIBLE FOR THE PREPARATION OF ITS BID, AND ANY ERROR THAT MAY HAVE BEEN MADE THEREIN WAS UNILATERAL--- NOT MUTUAL--- AND WAS NOT CONTRIBUTED TO BY THE GOVERNMENT. SEE EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249; SALIGMAN ET AL. V UNITED STATES, 56 F.SUPP. 505. SEE, ALSO, 26 COMP. GEN. 415 AND 36 ID. 27.

AT THE TIME THE BIDS IN THIS CASE WERE OPENED, THERE WAS SOME DOUBT ON THE PART OF THE CONTRACTING OFFICER AS TO THE CORRECTNESS OF THE BID SUBMITTED BY AKWA AND THE CORPORATION WAS REQUESTED TO VERIFY ITS BID. THE RECORD INDICATES THAT THE CORPORATION EXAMINED ITS WORKSHEETS AND DISCOVERED THAT IT HAD MADE AN ERROR IN THE AMOUNT OF $12,830 ON ITS WORKSHEET WITH RESPECT TO THE PRICE FOR ITEM 3 OF THE BASE SCHEDULE. ALSO INDICATES THAT THE CONTRACTING OFFICE PERMITTED THE CORPORATION TO INCREASE ITS BID PRICE FOR ITEM 3 TO COMPENSATE FOR THE ERROR. WHILE, AS POINTED OUT BY THE CORPORATION'S ATTORNEY AT A CONFERENCE HELD IN OUR OFFICE ON SEPTEMBER 24, 1969, THE CONTRACTING OFFICER RETAINED THE CORPORATION'S WORKSHEETS AFTER IT FIRST ALLEGED ERROR AS TO ITEM 3, WE DO NOT BELIEVE THAT THEREAFTER THE CONTRACTING OFFICER HAD A FURTHER DUTY TO MINUTELY EXAMINE SUCH WORKSHEETS FOR THE PURPOSE OF DISCOVERING WHETHER ANY OTHER ERRORS WERE MADE BY THE CORPORATION IN COMPUTING ITS BID PRICES FOR THE ENTIRE JOB. AFTER THE ERROR IN THE BID OF AKWA WAS CORRECTED, THE CONTRACTING OFFICER WAS NOT ONLY JUSTIFIED IN AWARDING THE CONTRACT ON THE CORPORATION'S BID, AS CORRECTED, AS THE LOWEST RECEIVED, BUT WOULD HAVE FAILED IN HIS DUTY HAD HE DONE OTHERWISE. 37 COMP. GEN. 786. SEE, ALSO CARNEGIE STEEL CO. V CONNELLY, 97A. 774; SHRIMPTON MFG. CO. V BRIN, 125 S.W. 942; AND ALABAMA SHIRT AND TROUSER CO. V UNITED STATES, 121 CT. CL. 313, WHEREIN THE COURT OF CLAIMS CONCLUDED THAT THE GOVERNMENT AGENTS DID ALL THAT COULD HAVE BEEN EXPECTED TO PROTECT THE PLAINTIFF FROM ITS OWN IMPRUDENCE, AND THAT THE PLAINTIFF COULD NOT CHARGE THE GOVERNMENT "WITH HAVING SNAPPED UP AN ADVANTAGEOUS OFFER MADE BY MISTAKE.'

THE ACCEPTANCE, AFTER CONFIRMATION, OF THE BID OF AKWA WAS IN GOOD FAITH- -- NO ERROR HAVING BEEN ALLEGED AS TO ITEM 1 UNTIL AFTER AWARD--- AND UNDER THE CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RIGHT OF THE GOVERNMENT TO RECEIVE PERFORMANCE IN STRICT ACCORDANCE WITH THE CONTRACT TERMS MAY NOT BE WAIVED BY ANY OFFICER OF THE GOVERNMENT IN THE ABSENCE OF ADEQUATE CONSIDERATION, AND CONSIDERATIONS OF SYMPATHY FOR POSSIBLE HARDSHIPS OR MISFORTUNES TO THE CONTRACTOR DO NOT AUTHORIZE ANY EXCEPTION TO THE RULE. SEE 22 COMP. GEN. 260; DAY V UNITED STATES, 245 U.S. 159.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR GRANTING THE REQUESTED RELIEF.