B-168673, APR. 7, 1970

B-168673, APR. 7, 1970

BIDS--MISTAKES--EVIDENCE OF ERROR--SUFFICIENCY WHERE CONTRACTOR ALLEGED MISTAKE BUT FAILED TO PROVE INTENDED BID PRICE AND TO WITHDRAW BID, ADJUSTMENT OF CONTRACT PRICE--$3,000 LOWER THAN GOVERNMENT'S ESTIMATE AND NEXT LOW BID--IS DENIED SINCE UNDER ALLEGATION OF MISTAKE CORRECTED BID MAY BE ACCEPTED ONLY IF INTENDED BID PRICE IS CLEARLY ESTABLISHED AND CORRECTED PRICE IS STILL LOWEST, BUT WHERE PROOF OF INTENDED PRICE IS INADEQUATE AND ORIGINAL BID IS NOT WITHDRAWN, CONTRACTING OFFICER MAY ACCEPT ORIGINAL BID UNLESS AMOUNT IS SO FAR OUT OF LINE OR ERROR SO APPARENT AS TO RENDER ACCEPTANCE UNFAIR TO CONTRACTOR OR OTHER BIDDERS. SEE COMP. GEN. DECS. CITED.

TO BENJ. ZELONKY CONSTRUCTION COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 12, 1969, WITH ENCLOSURES, REQUESTING A PRICE ADJUSTMENT UNDER YOUR CONTRACT WITH THE GENERAL SERVICES ADMINISTRATION FOR THE CONSTRUCTION OF A HEARING ROOM IN THE UNITED STATES POST OFFICE, COURTHOUSE AND CUSTOMHOUSE, MILWAUKEE, WISCONSIN, PROJECT NO. 60148.

THE INVITATION FOR BIDS (IFB) ON CONTRACT NO. GS-05BC-7446 WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA), CHICAGO, ILLINOIS, ON SEPTEMBER 12, 1967. TWO BIDS WERE RECEIVED IN RESPONSE TO THE IFB. YOUR BID OF $6,775 WAS LOW, WHILE THE ONLY OTHER BIDDER, R. J. LEDERER CO. (LEDERER), SUBMITTED A BID OF $9,759. THE GOVERNMENT'S COST ESTIMATE FOR THE WORK WAS $9,751. IT IS REPORTED THAT BECAUSE OF THE DISPARITY BETWEEN YOUR BID AND BOTH LEDERER'S BID AND THE GOVERNMENT ESTIMATE, YOU WERE CONTACTED BY THE PROCURING ACTIVITY ON NOVEMBER 14, 1967, ADVISED OF THE DIFFERENCE BETWEEN THE TWO BIDS, AND REQUESTED TO VERIFY YOUR BID.

SUBSEQUENTLY, ON NOVEMBER 30, 1967, YOU VISITED THE GSA REGIONAL OFFICE AND ORALLY STATED THAT YOUR PROSPECTIVE WOODWORK SUBCONTRACTOR HAD GIVEN YOU AN INCOMPLETED BID WHICH HAD OMITTED THE HARDWARE AND FINISHING. WHILE YOU HAD BROUGHT COPIES OF YOUR WORKSHEETS, YOU DID NOT HAVE THE WORKSHEETS OF YOUR WOODWORK SUBCONTRACTOR. YOU WERE FURNISHED ADVICE WHICH INCLUDED DIRECTIONS THAT YOUR WORKSHEETS DID NOT SHOW THE EXISTENCE OF A MISTAKE AND THAT IF YOU WERE CLAIMING A MISTAKE, IT WOULD BE NECESSARY FOR YOU TO SUBMIT ALL ORIGINAL WORKSHEETS, INCLUDING THOSE OF YOUR PROSPECTIVE SUBCONTRACTORS FOR REVIEW. ON DECEMBER 8, 1967, YOU VISITED THE REGIONAL OFFICE AGAIN BRINGING COPIES OF YOUR OWN WORKSHEETS. WE ARE ADVISED THAT A FURTHER REVIEW OF THOSE DOCUMENTS SATISFIED THE GSA REPRESENTATIVES THAT A MISTAKE EXISTED IN THAT THE COST OF HARDWARE, FINISHING OF BENCHES, AND WAINSCOTING HAD NOT BEEN INCLUDED IN YOUR BID. HOWEVER, THE DOCUMENTS WERE NOT SUFFICIENT TO ESTABLISH YOUR INTENDED BID PRICE. YOU WERE ADVISED OF THE FOLLOWING POSSIBLE ALTERNATIVES AVAILABLE TO YOU: (1) TO ACCEPT THE AWARD ON THE BASIS OF YOUR ORIGINAL BID; (2) TO CLAIM A MISTAKE (AND SUBMIT PROOF THEREOF AND OF THE INTENDED BID PRICE); OR (3) TO REQUEST WITHDRAWAL OF YOUR BID (ON THE GROUNDS OF MISTAKE). YOU ADVISED THE GSA REPRESENTATIVES THAT YOU WOULD CONSIDER THE ALTERNATIVES AND STATE YOUR DECISION. THE RECORD DOES NOT INDICATE THAT YOU LEFT YOUR BID WORKSHEETS WITH THE REGIONAL OFFICE AT EITHER THE MEETING OF NOVEMBER 30 OR DECEMBER 8, 1967.

BY LETTER OF DECEMBER 9, 1967, YOU STATED THAT THE BID OF YOUR MILLWORK SUBCONTRACTOR WAS NOT SUFFICIENTLY COMPREHENSIVE TO INCLUDE ITEMS WHICH YOU LISTED TOTALING $1,031. YOU REQUESTED CORRECTION OF YOUR BID TO REFLECT AN ADDITIONAL $1,250 WHICH INCLUDED THE ABOVE AMOUNT PLUS OVERHEAD, PROFIT, AND AN ADDITIONAL BOND PROVISION. YOU DID NOT SUBMIT ANY EVIDENCE ESTABLISHING THE ALLEGED OMISSIONS, AND YOU STATED THAT YOU WERE READY, WILLING, AND ABLE TO PROCEED WITH THE PROJECT EITHER ON THE BASIS OF YOUR BID AS ORIGINALLY SUBMITTED OR AS CORRECTED.

THE GSA, REGION 5, BOARD OF AWARD CONVENED ON DECEMBER 15, 1967, TO CONSIDER THE BIDS ON THE PROJECT. IT WAS FOUND THAT WHILE YOU HAD FILED A FORMAL ALLEGATION THAT A MISTAKE HAD BEEN MADE IN YOUR BID, YOU HAD NOT SUBMITTED ADEQUATE EVIDENCE TO DETERMINE THE AMOUNT OF YOUR INTENDED BID. THE BOARD ALSO FOUND THAT YOU HAD CONSISTENTLY INDICATED A WILLINGNESS TO ACCEPT AWARD AT YOUR ORIGINAL BID PRICE IF YOU WERE NOT PERMITTED TO REVISE YOUR BID; THAT YOU WOULD NOT REQUEST WITHDRAWAL; THAT YOU WOULD PROTEST AWARD TO THE OTHER BIDDER; THAT YOU HAD THOROUGHLY FAMILIARIZED YOURSELF WITH ALL OF THE REQUIREMENTS OF THE SPECIFICATIONS; AND THAT YOU HAD STATED (ALTHOUGH NOT IN WRITING) THAT YOU COULD PERFORM THE WORK AS SPECIFIED WITHOUT AN OUT-OF-POCKET LOSS. BASED ON THE FOREGOING, THE BOARD DETERMINED THAT YOUR BID SHOULD BE CONSIDERED AS SUBMITTED. YOUR BID WAS ACCEPTED AS SUBMITTED, THE FORMAL CONTRACT WAS EXECUTED, AND YOU SUBSEQUENTLY PERFORMED THE WORK.

ORDINARILY A BID SUBMITTED IN RESPONSE TO AN INVITATION ISSUED BY AN AGENCY OF THE FEDERAL GOVERNMENT MAY NOT BE MODIFIED OR WITHDRAWN AFTER BIDS HAVE BEEN OPENED. REFINING ASSOCIATES, INC. V. UNITED STATES, 109 F. SUPP. 259; 124 CT. CL. 115 (1953). HOWEVER, A BIDDER WHO, AFTER OPENING AND PRIOR TO AWARD, ALLEGES A MISTAKE IN BID MAY BE ALLOWED TO WITHDRAW HIS BID IF HE CAN REASONABLY ESTABLISH THAT IT INVOLVES AN HONEST MISTAKE. UNITED STATES V. LIPMAN, 122 F. SUPP. 284, 288 (1954). ADDITIONALLY, WHERE THERE IS CLEAR AND CONVINCING EVIDENCE OF THE INTENDED CORRECT BID, AND WHERE THE BID, BOTH AS SUBMITTED AND AS INTENDED IS THE LOWEST, WE HAVE ALLOWED ACCEPTANCE OF THE CORRECTED BID. 42 COMP. GEN. 723 (1963). BASICALLY, THESE SAME REQUIREMENTS FOR THE CORRECTION OF A BID ARE ALSO FOUND IN FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.406-3 (A) (1) AND (2). HOWEVER, THIS IS AN EXCEPTIONAL REMEDY, AND THE DEGREE OF PROOF REQUIRED TO JUSTIFY WITHDRAWAL OF A BID BEFORE AWARD IS IN NO WAY COMPARABLE TO THE MUCH HIGHER DEGREE OF PROOF NECESSARY TO ALLOW CORRECTION OF AN ERRONEOUS BID. 36 COMP. GEN. 441 (1956).

WHILE YOU FURNISHED THIS OFFICE A COPY OF YOUR ESTIMATE SHEET UPON WHICH YOUR ORIGINAL BID WAS BASED, SUCH DOCUMENT DOES NOT PROVIDE CLEAR AND CONVINCING PROOF OF THE AMOUNT OMITTED FROM THAT BID FOR THE HARDWARE, FINISHING AND WAINSCOTING. THUS, WE MUST AGREE WITH THE RECOMMENDATION OF THE PROCURING ACTIVITY THAT ALTHOUGH THE RECORD REASONABLY ESTABLISHES A MISTAKE THE EVIDENCE IS NOT SUFFICIENT TO REFORM THE CONTRACT AND TO ALLOW A CORRECTION OF YOUR BID TO THE REVISED AMOUNT OF $8,025 AS SHOWN IN YOUR LETTER OF DECEMBER 9, 1969. YOUR REQUEST FOR SUCH ADJUSTMENT IS THEREFORE DENIED.

THERE IS NEXT FOR CONSIDERATION THE QUESTION WHETHER ONCE HAVING ALLEGED AND ESTABLISHED THAT AN ERROR HAD BEEN MADE IN YOUR BID, WHICH WOULD HAVE ENTITLED YOU TO WITHDRAW YOUR BID, YOU MAY REFUSE TO WITHDRAW YOUR BID AND STILL RECEIVE THE AWARD ON THE BASIS OF YOUR ORIGINAL BID.

WE HELD IN 37 COMP. GEN. 579 (1958) THAT TO PERMIT CONSIDERATION OF A LOW BID SUBMITTED BY A BIDDER WHO, AFTER OPENING OF BIDS, ALLEGED AN ERROR IN HIS BID BUT WHO LATER REQUESTED THAT THE ALLEGATION OF ERROR BE WITHDRAWN WOULD BE TANTAMOUNT TO ALLOWING THE OSTENSIBLE LOW BIDDER TO ELECT, AFTER BID OPENING, WHETHER TO STAND ON THE BID, OR TO WITHDRAW IT ON GROUNDS OF MISTAKE, DEPENDING UPON WHICH COURSE OF ACTION APPEARED TO BE IN HIS BEST INTEREST. IN CASES SUCH AS THAT WHERE THE BID, IF CORRECTED, WOULD NO LONGER BE THE LOWEST BID, THIS OBVIOUSLY WOULD NOT BE FAIR TO THE OTHER BIDDERS, WHOSE BIDS HAD BEEN DISCLOSED, AND IT WOULD BE DETRIMENTAL TO THE PURPOSES SOUGHT TO BE ACCOMPLISHED BY STATUTES RELATING TO COMPETITIVE BIDDING.

HOWEVER, IN THE PRESENT CASE YOU DID NOT ATTEMPT TO FOREGO A CLAIM OF ERROR IN ORDER TO REMAIN THE LOW BIDDER. EVEN IF YOUR BID HAD BEEN CORRECTED, YOU WOULD STILL BE THE LOW BIDDER. IN 42 COMP. GEN. 723 (1963) WE HELD THAT, ALTHOUGH CORRECTION OF A LOW BID COULD NOT BE PERMITTED BECAUSE THE AMOUNT OF THE INTENDED BID WAS NOT ESTABLISHED WITH CERTAINTY REQUIRED BY THE RULES APPLICABLE TO CORRECTION OF MISTAKES IN BIDS, THE ACCEPTANCE OF SUCH A LOW BID WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS IF THE EVIDENCE CLEARLY INDICATED THAT THE BID WOULD HAVE BEEN LOWEST EVEN IF CORRECTED. ALSO, SEE B-155432, DECEMBER 1, 1964, AND B-165405, OCTOBER 24, 1968. IN THIS REGARD, FPR 1-2.406-3 (D) (5) STATES IN PERTINENT PART, THAT:

"WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS, IN WHICH CASE IT MAY BE REJECTED."

IN VIEW OF THE FOREGOING, AND SINCE THE RECORD INDICATES THAT HAD YOUR BID BEEN CORRECTED IT WOULD STILL BE THE LOWER BID, AND THAT YOU DID NOT WANT TO WITHDRAW YOUR BID, THE ACCEPTANCE OF YOUR BID AS SUBMITTED IS NOT REGARDED AS CONFLICTING WITH APPLICABLE DECISIONS OR REGULATIONS.

IN YOUR LETTER OF DECEMBER 12, YOU STATE THAT ALTHOUGH THE PROCURING ACTIVITY REJECTED YOUR REVISED BID AND OFFERED YOU THE OPPORTUNITY TO WITHDRAW YOUR ORIGINAL BID, IT WAS YOUR UNDERSTANDING THAT IN THE EVENT YOU WITHDREW YOUR BID, AWARD WOULD BE MADE TO THE OTHER BIDDER AND YOU AND YOUR BONDING COMPANY WOULD BE HELD LIABLE FOR THE DIFFERENCE IN COST. ARE ADVISED BY GSA THAT THE PERSONNEL IN THE REGIONAL OFFICE WHO DEALT WITH YOU ON THIS MATTER CATEGORICALLY DENY HAVING GIVEN YOU ANY INFORMATION OF THAT NATURE, AND THAT THEY DO NOT RECALL YOU HAVING EXPRESSED ANY SUCH UNDERSTANDING TO THEM IN ANY OF THE DISCUSSIONS. WHEN QUESTIONS OF FACT ARE DISPUTED, WE HAVE CONSISTENTLY HELD THAT THIS OFFICE WILL ACCEPT THE ADMINISTRATIVE REPORT OF THE FACTS AS BEING CORRECT IN THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF THE ACCURACY OF THE ADMINISTRATIVE STATEMENT OF THE DISPUTED FACTS. COMP. GEN. 124, 134 (1962). INASMUCH AS NO SUPPORTING EVIDENCE EXISTS IN THE PRESENT RECORD SHOWING THAT YOUR UNDERSTANDING OF THE CONSEQUENCES OF A WITHDRAWAL WAS REASONABLY ATTRIBUTABLE TO STATEMENTS BY GSA PERSONNEL, WE DO NOT BELIEVE THAT THE PRESUMPTION IN FAVOR OF THE ADMINISTRATIVE REPORT HAS BEEN OVERCOME.

YOU ALSO MENTION IN YOUR LETTER OF DECEMBER 12, THAT WHEN THE WORK WAS COMPLETED, THE GSA REGIONAL OFFICE REFUSED TO ALLOW YOU RELIEF AND SOUGHT TO IMPOSE PENALTIES AGAINST YOU IN THE SUM OF $1,730. WE HAVE BEEN ADVISED BY GSA THAT THESE PENALTIES WERE THE RESULT OF AN ASSESSMENT OF LIQUIDATED DAMAGES PURSUANT TO THE CONTRACT FOR DELAY IN COMPLETION OF THE PROJECT, AND HAVE NO BEARING ON YOUR REQUEST FOR AN ADJUSTMENT IN THE CONTRACT PRICE.