B-168500, JAN. 12, 1970

B-168500: Jan 12, 1970

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WHERE LOW BID WAS 57 PERCENT LOWER THAN GOVERNMENT ENGINEER'S ESTIMATE AND 59 PERCENT LOWER THAN SECOND LOW BID AND WHERE CONTRACTING OFFEROR DID NOT KNOW OF THE REVISED ESTIMATE BEFORE AWARD. THE CONTRACTING OFFICER'S DETERMINATION THAT AN HONEST MISTAKE WAS MADE AS CLAIMED. SINCE INTENDED BID PRICE IS NOT ASCERTAINABLE CORRECTION OF THE BID PRICE IS NOT AN AVAILABLE REMEDY. THEREFORE RECISSION IS PROPER. SECRETARY: REFERENCE IS MADE TO LETTER DATED NOVEMBER 24. IN ITS BID ON WHICH FOREST SERVICE CONTRACT NO. 002558 IS BASED. TWO BIDS WERE RECEIVED AS FOLLOWS: BUD STUMP DOUGLAS CONSTRUCTION EXCAVATION CORP. 712 AT THE TIME OF BID EVALUATION THE GOVERNMENT ENGINEER'S ESTIMATE OF THE COST OF THE WORK WAS IN THE AMOUNT OF $29.

B-168500, JAN. 12, 1970

CONTRACTS--MISTAKES--RECISSION DECISION TO SECRETARY OF AGRICULTURE AUTHORIZING RECISSION OF CONTRACT WITH DOUGLAS CONSTRUCTION CORP. FOR SURFACING ROAD IN WINEMA NATIONAL FOREST, OREGON ON BASIS OF ERROR. WHERE LOW BID WAS 57 PERCENT LOWER THAN GOVERNMENT ENGINEER'S ESTIMATE AND 59 PERCENT LOWER THAN SECOND LOW BID AND WHERE CONTRACTING OFFEROR DID NOT KNOW OF THE REVISED ESTIMATE BEFORE AWARD, THE CONTRACTING OFFICER'S DETERMINATION THAT AN HONEST MISTAKE WAS MADE AS CLAIMED. HOWEVER, SINCE INTENDED BID PRICE IS NOT ASCERTAINABLE CORRECTION OF THE BID PRICE IS NOT AN AVAILABLE REMEDY. THEREFORE RECISSION IS PROPER.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 24, 1969, WITH ENCLOSURES, FROM THE DIRECTOR, OFFICE OF PLANT AND OPERATIONS, FORWARDING FOR OUR DECISION THE CLAIM OF ERROR ALLEGED AFTER AWARD BY DOUGLAS CONSTRUCTION CORP. IN ITS BID ON WHICH FOREST SERVICE CONTRACT NO. 002558 IS BASED.

THE INVITATION SOLICITED BIDS ON THE SURFACING OF DRY CREEK ROAD NO. 3228 AND DRY SPUR ROAD NO. 3282, WINEMA NATIONAL FOREST, KLAMATH COUNTY, OREGON. TWO BIDS WERE RECEIVED AS FOLLOWS:

BUD STUMP DOUGLAS CONSTRUCTION

EXCAVATION CORP.

ITEM & APPROXIMATE UNIT UNIT

NO. QUANTITY PRICE AMOUNT PRICE AMOUNT

54 (1)

SELECT

BORROW 10,450 CU. YD. $ 2.05 $21,422.50 $ 1.20 $12,540

140

ROADBED

PREPARATION 4.65 MILE 3,000.00 13,950.00 1,000.00 4,650

152

WATERING,

INCLUDING

DUST

ABATEMENT 1,427 M/GAL 5.00 7,135.006.00 8,562

SPECIAL NO. 1

ROAD

MAINTENANCE 48 HOURS 17.50 840.00 20.00 960

TOTAL BID $43,347.50 $26,712 AT THE TIME OF BID EVALUATION THE GOVERNMENT ENGINEER'S ESTIMATE OF THE COST OF THE WORK WAS IN THE AMOUNT OF $29,245.20.

HOWEVER, ON JUNE 10, 1969, THE BID OPENING DATE, A REVISED ENGINEER'S ESTIMATE WAS RECEIVED FROM THE FOREST SERVICE. THROUGH AN OVERSIGHT, THE REVISED ESTIMATE WAS NOT POSTED TO THE TABULATION OF BIDS (FORM R6-6320- 10) OR BROUGHT TO THE CONTRACTING OFFICER'S ATTENTION. THE ENGINEER'S ESTIMATE WAS REVISED AS FOLLOWS:

ITEM UNIT PRICE TOTAL

54 (1) $ 2.25 $23,512.50

140 1,200.00 5,580.00

152 5.00 7,135.00

SPECIAL

NO. 1 20.00 960.00

TOTAL REVISED ESTIMATE $37,187.50

ON THE BASIS OF ITS LOW BID THE CONTRACT WAS AWARDED ON JUNE 12, 1969, TO DOUGLAS CONSTRUCTION CORP.

ON MONDAY, JUNE 16, 1969, AT 8:40 A.M; THE CONTRACTOR CALLED TO ADVISE THE CONTRACTING OFFICER THAT HE HAD MADE A MISTAKE IN THE CALCULATIONS ON WHICH HE HAD BASED HIS BID. HE INDICATED HE HAD NOT ALLOWED FOR THE 20 MILES OF HAULING IN CONNECTION WITH THE PICKUP AND DELIVERY OF THE SELECT BORROW.

THE CONTRACTOR CLAIMS ERROR IN NOT INCLUDING IN ITS BID HAULING COSTS OF $1.50 PER CUBIC YARD FOR ITEM 54 (1), SELECT BORROW, AND THAT THE UNIT PRICE SHOULD BE $2.70 PER CUBIC YARD. THE CONTRACTOR STATED THAT ON JUNE 10, THE BID OPENING DATE, HE CALLED THE REGIONAL OFFICE FROM PORT ANGELES, WASHINGTON, TO REQUEST THE BID RESULTS ON THE PROJECT. AFTER HEARING THE BID RESULTS, HE THOUGHT HE HAD MADE AN ERROR AND ASKED TO SPEAK TO THE CONTRACTING OFFICER BUT WAS ADVISED THAT THE CONTRACTING OFFICER WAS OUT. THE CONTRACTOR INDICATED HE DID NOT RETURN TO OREGON UNTIL THE WEEKEND OF JUNE 14, 1969, AND THAT THIS WAS THE FIRST OPPORTUNITY HE HAD TO GO OVER HIS BID TO DETERMINE IF AN ERROR HAD BEEN MADE. HE HAS SUBMITTED LETTERS OF EXPLANATION CONTAINING THE ABOVE INFORMATION AND HIS NOTARIZED COPY OF THE SCHEDULE OF ITEMS WHICH HE HAD USED AS A WORKSHEET.

THE CONTRACTING OFFICER HAS FOUND THAT THE SUPPLIER'S QUOTATION ON THE HAULING OF THE BORROW WAS SAID TO BE 7 CENTS PER YARD MILE, OR $1.40 PER CUBIC YARD. THE WORK ITEM TABULATION SHEET (SCHEDULE OF ITEMS) FOR ITEM 54 (1), SELECT BORROW, IS BLANK. HOWEVER, THE CONTRACTOR'S WRITTEN FIGURES SHOW THE FOLLOWING: "BORROW, MOVE IN & OUT .30, INSURANCE AND BONDS .10, LOAD .25, BLADE .25, ROLLER .20, AND HAUL ROCKS .10 FOR A TOTAL OF $1.20." THE 10 CENTS FOR "HAUL ROCKS" IS INTERPRETED TO BE FOR HAULING OVERSIZE MATERIAL BACK TO THE PIT AS REQUIRED IN THE SUPPLEMENTAL SPECIFICATIONS FOR ITEM 54 (1), SECTION 4.1-MEASUREMENT. THE EVIDENCE AS SUBMITTED ON THE WORKSHEET SHOWS THAT A HAUL OF 20 MILES WAS UNDER CONSIDERATION. THERE IS NO EVIDENCE ON THE FACE OF THE WORKSHEET, HOWEVER, TO INDICATE THE AMOUNT INTENDED FOR THIS PORTION OF THE BID PRICE OR TO SUBSTANTIATE THE $2.70 THE CONTRACTOR CLAIMS SHOULD HAVE BEEN SHOWN FOR THIS ITEM. IT IS THE CONTRACTING OFFICER'S CONCLUSION, HOWEVER, THAT HAD THE REVISED ENGINEER'S ESTIMATE BEEN POSTED TO THE TABULATION OF BIDS, OR BROUGHT TO HIS ATTENTION, HE WOULD HAVE BEEN ON NOTICE OF A POSSIBLE ERROR IN BID AS THE LOW BID IS 57 PERCENT LOWER THAN THE ENGINEER'S ESTIMATE AND ALMOST 59 PERCENT LOWER THAN THE SECOND BID. CONSIDERING THE REVISED ENGINEER'S ESTIMATE AND THE AMOUNT OF THE SECOND LOW BID, THERE APPEARS TO BE LITTLE DOUBT THAT AN ERROR WAS MADE IN THE CONTRACTOR'S BID. THE MATERIAL SUBMITTED IN SUPPORT OF THE CLAIM, HOWEVER, DOES NOT ESTABLISH CLEAR AND CONVINCING EVIDENCE OF THE INTENDED BID PRICE FOR ITEM 54 (1), SELECT BORROW.

THE GENERAL RULE IS THAT RELIEF WILL NOT BE GRANTED TO A BIDDER ALLEGING A UNILATERAL MISTAKE UNLESS THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF THE MISTAKE. B-164679, JANUARY 29, 1969. FACTORS SUCH AS THE PRICES QUOTED BY OTHER BIDDERS, THE PRICE PAID BY THE GOVERNMENT FOR SIMILAR SUPPLIES UNDER A PREVIOUS CONTRACT, THE GOVERNMENT'S COST ESTIMATE, AND THE KNOWN VALUE OF THE SUPPLIES OR SERVICES HAVE BEEN CONSIDERED TO BE RELEVANT TO A DETERMINATION WHETHER A CONTRACTING OFFICER SHOULD HAVE REQUESTED A VERIFICATION OF A BID PRIOR TO ITS ACCEPTANCE.

IN THIS INSTANCE THE REVISED ENGINEER'S ESTIMATE WAS NOT BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER BEFORE AWARD. BUT, HAD THE RECORD BEEN ACCURATE AND COMPLETE AT THAT POINT, AS IT SHOULD HAVE BEEN FOR PROPER EVALUATION OF THE BIDS, THE CONTRACTING OFFICER CONCEDES THAT HE WOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR AND WOULD HAVE REQUESTED BID CONFIRMATION. 5 WILLISTON ON CONTRACTS, SECTION 1598; SALIGMAN ET AL. V. UNITED STATES, 56 F. SUPP. 505 (1944).

AFTER REVIEWING THE RECORD, WE AGREE WITH THE CONTRACTING OFFICER THAT AN HONEST MISTAKE HAS BEEN MADE AS CLAIMED BUT THAT THE AMOUNT OF THE INTENDED BID FOR ITEM 54 (1) IS NOT ASCERTAINABLE FROM THE RECORD. SINCE THE INTENDED BID PRICE IS NOT ASCERTAINABLE, CORRECTION OF THE BID PRICE IS NOT AN AVAILABLE REMEDY IN THE CIRCUMSTANCES.

SINCE ACCEPTANCE OF A BID WITH KNOWLEDGE, EITHER CONSTRUCTIVE OR ACTUAL, OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT, THE CONTRACT MAY BE RESCINDED, AS ADMINISTRATIVELY RECOMMENDED, WITHOUT LIABILITY TO THE CONTRACTOR.