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B-170311, JUN 3, 1971

B-170311 Jun 03, 1971
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EMPLOYEES OF BEXAR STEEL NOW PROVIDE REQUIRED SHOWING OF CLEAR AND CONVINCING EVIDENCE TO SHOW THAT STRUCTURAL STEEL COSTS WERE NOT INCLUDED. THE SUBJECT INVITATION WAS ISSUED ON APRIL 14. BIDS WERE OPENED AT 2:00 P.M. WAS ULTIMATELY AWARDED A CONTRACT AT THE PRICE SHOWN IN ITS BID. A TELEGRAM WAS RECEIVED FROM D.E.W. SINCE THERE WAS NO DISCERNIBLE EVIDENCE OF MISHANDLING WITHIN THE GOVERNMENT INSTALLATION. CONCLUDED THAT THE TELEGRAM WAS A LATE BID MODIFICATION WHICH WAS PRECLUDED FROM CONSIDERATION UNDER PERTINENT PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION. NOTWITHSTANDING THAT IT WAS RECEIVED ONLY ONE MINUTE AFTER THE SCHEDULED BID OPENING. IT WAS REQUESTED THAT THE BID BE CORRECTED TO REFLECT A MISTAKE BY VIRTUE OF THE OMISSION OF A $10.

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B-170311, JUN 3, 1971

BIDS - MISTAKE IN PRICE QUOTATION - CORRECTION AFTER BID OPENING DECISION REVERSING PRIOR DENIAL OF REQUEST OF D.E.W., INC., LOW BIDDER, UNDER IFB ISSUED BY CORPS OF ENGINEERS, FORT WORTH, TEXAS DISTRICT, FOR CONSTRUCTION OF MEDICAL LABORATORY AT FORT SAM HUSTON, FOR ACCEPTANCE OF LATE BID MODIFICATION OR, IN THE ALTERNATIVE, FOR CORRECTION OF BID DUE TO MISTAKE. D.E.W., IN A TELEGRAM RECEIVED BY THE CONTRACTING AUTHORITY ONE MINUTE AFTER TIME SCHEDULED FOR OPENING OF BIDS REQUESTING A $10,000 INCREASE IN ITS BID TO REFLECT COST OF STRUCTURAL STEEL ALLEGEDLY LEFT OUT OF BID. SINCE PRIOR DECISION CONCURRED IN RULING OF GENERAL COUNSEL OF CORPS OF ENGINEERS THAT FIGURE FOR DUCTWORK SO EXCEEDED GOVERNMENT ESTIMATES AS TO INCLUDE STRUCTURAL STEEL AND AFFADAVITS OF THE PRESIDENT OF D.E.W., AND EMPLOYEES OF BEXAR STEEL NOW PROVIDE REQUIRED SHOWING OF CLEAR AND CONVINCING EVIDENCE TO SHOW THAT STRUCTURAL STEEL COSTS WERE NOT INCLUDED, CONTRACT PRICE MAY BE RAISED ACCORDINGLY. NO PREJUDICE WOULD RESULT BECAUSE D.E.W., WOULD STILL BE LOW BIDDER.

TO MR. SECRETARY:

WE REFER TO A LETTER, WITH ENCLOSURES, DATED JANUARY 29, 1971, FROM THE ATTORNEYS FOR D.E.W., INC., REQUESTING RECONSIDERATION OF OUR DECISION OF DECEMBER 7, 1970, B-170311. IN THAT DECISION WE DENIED D.E.W.'S REQUEST FOR ACCEPTANCE OF A LATE BID MODIFICATION OR, IN THE ALTERNATIVE, FOR CORRECTION OF AN ALLEGED MISTAKE IN ITS BID SUBMITTED UNDER INVITATION FOR BIDS NO. DACA63-70-B-0051 ISSUED BY THE DISTRICT ENGINEER, FORT WORTH DISTRICT, CORPS OF ENGINEERS.

THE SUBJECT INVITATION WAS ISSUED ON APRIL 14, 1970, FOR CONSTRUCTION OF A MEDICAL LABORATORY AT FORT SAM HOUSTON, SAN ANTONIO, TEXAS, WHICH INVOLVED THE REHABILITATION OF AN EXISTING TWO-STORY BUILDING. BIDS WERE OPENED AT 2:00 P.M. ON MAY 12, 1970, REVEALING D.E.W.'S BID OF $182,000.00 AS THE LOWEST OF FIVE BIDS RECEIVED, AND D.E.W. WAS ULTIMATELY AWARDED A CONTRACT AT THE PRICE SHOWN IN ITS BID.

AT 2:01 P.M. ON THE DATE OF BID OPENING, A TELEGRAM WAS RECEIVED FROM D.E.W. ADVISING THAT ITS BID PRICE SHOULD BE INCREASED BY $10,000. SINCE THERE WAS NO DISCERNIBLE EVIDENCE OF MISHANDLING WITHIN THE GOVERNMENT INSTALLATION, OUR DECISION OF DECEMBER 7, 1970, CONCLUDED THAT THE TELEGRAM WAS A LATE BID MODIFICATION WHICH WAS PRECLUDED FROM CONSIDERATION UNDER PERTINENT PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION, AND DECISIONS OF OUR OFFICE, NOTWITHSTANDING THAT IT WAS RECEIVED ONLY ONE MINUTE AFTER THE SCHEDULED BID OPENING.

ALTERNATIVELY, IT WAS REQUESTED THAT THE BID BE CORRECTED TO REFLECT A MISTAKE BY VIRTUE OF THE OMISSION OF A $10,000 ITEM FOR STRUCTURAL STEEL.

IN SUPPORT OF THIS REQUEST THE PRESIDENT OF D.E.W. SUBMITTED HIS AFFIDAVIT STATING THAT ON THE DATE OF BID OPENING, AT APPROXIMATELY 1:30 P.M., HE REMEMBERED THAT HE HAD OVERLOOKED STRUCTURAL STEEL IN AN INITIAL TELEGRAPHIC MODIFICATION SUBMITTED AROUND 11:30 A.M., AND HE IMMEDIATELY CONTACTED HIS SUPPLIER, BEXAR STEEL COMPANY, IN ORDER TO OBTAIN BEXAR'S PRICE FOR FURNISHING THE STEEL. HE MAINTAINED THAT DUE TO SEVERAL CONTRIBUTING FACTORS HE WAS NOT APPRISED OF BEXAR'S COMPLETE PRICE UNTIL APPROXIMATELY 1:50 P.M., AT WHICH TIME HE TRANSMITTED A SECOND TELEGRAPHIC MODIFICATION INCREASING D.E.W.'S BID IN THE AMOUNT OF $10,000.00 WHICH CONSTITUTED THE ROUNDED SUM OF BEXAR'S QUOTATION.

IN ADDITION TO HIS OWN AFFIDAVIT, THE PRESIDENT OF D.E.W. SUBMITTED THE AFFIDAVITS OF TWO BEXAR EMPLOYEES DIRECTLY INVOLVED IN THE COMMUNICATION OF BEXAR'S STRUCTURAL STEEL QUOTATION TO D.E.W. ON THE DATE OF BID OPENING. THESE AFFIDAVITS CORROBORATED THE ACCOUNT OF D.E.W.'S PRESIDENT AS TO THE TIME AND MANNER IN WHICH HE RECEIVED BEXAR'S PRICE.

IT IS NOTED THAT THE ONLY ENTRY IN THE ORIGINAL WORKSHEETS PERTAINING TO STRUCTURAL STEEL IS A $250 SUM FOR "STAIR WAIL AND STRUCTURAL STEEL." THE D.E.W. PRESIDENT EXPLAINED THAT THIS FIGURE WAS:

" *** SIMPLY FOR NUTS, BOLTS, BITS, SCAFFOLD RENTAL AND OTHER SMALL MISCELLANEOUS ITEMS NEEDED TO INSTALL THIS PREFABRICATED STEEL *** ." HIS CONTENTION THAT THERE WAS NO FURTHER MENTION OF STRUCTURAL STEEL IN THE WORKSHEETS IS VERIFIED BY OUR EXAMINATION OF SAME.

UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3(A) THE CONTRACTING AGENCY IS AUTHORIZED TO DETERMINE, WITH REGARD TO MISTAKES ALLEGED AFTER BID OPENING BUT PRIOR TO AWARD, THAT THE BID SHOULD BE CONSIDERED FOR AWARD IN THE FORM SUBMITTED WHERE THE EVIDENCE IS NOT CLEAR AND CONVINCING THAT THE BID AS SUBMITTED WAS NOT THE BID INTENDED. THE GENERAL COUNSEL OF THE OFFICE OF THE CHIEF OF ENGINEERS ISSUED A DETERMINATION DATED JUNE 30, 1970, SETTING FORTH CERTAIN FINDINGS SUPPORTING HIS CONCLUSION THAT D.E.W. FAILED TO PRESENT CLEAR AND CONVINCING EVIDENCE THAT A MISTAKE IN BID HAD OCCURRED.

AFTER WE REVIEWED THE EVIDENCE THEN OF RECORD, INCLUDING THE WORKSHEETS AND AFFIDAVITS SUBMITTED IN SUPPORT OF D.E.W.'S CLAIM, WE CONCLUDED IN OUR DECISION OF DECEMBER 7, 1970, THAT WE WERE UNABLE TO DISAGREE WITH THE ADMINISTRATIVE DETERMINATION THAT THE EVIDENCE DID NOT CLEARLY AND CONVINCINGLY ESTABLISH THE EXISTENCE OF A MISTAKE.

IN SUPPORT OF THEIR REQUEST FOR RECONSIDERATION OF OUR AFOREMENTIONED DECISION, THE ATTORNEYS FOR D.E.W. SUBMITTED WITH THEIR LETTER OF JANUARY 29, 1971, TWO AFFIDAVITS AND A "SHEET METAL TAKEOFF SUMMARY."

THE AFFIDAVIT OF D.E.W.'S PRESIDENT, DATED JANUARY 19, 1971, ADDRESSES ITSELF IN PART TO THE $54,368 QUOTED FOR DUCTWORK WHICH FIGURE, AS THE GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, OBSERVED IN HIS FINDINGS, WAS NOT BROKEN DOWN IN THE WORKPAPERS PREVIOUSLY SUBMITTED BY D.E.W. THE GENERAL COUNSEL POINTED OUT THAT BEXAR'S PROPOSAL INCLUDED $5,200 FOR STEEL MATERIAL SUPPORTING STACKS, AND THAT THE STACKS SUPPORTED BY THAT MATERIAL ARE A CONTINUATION OF THE DUCT SYSTEM. SINCE THE $54,368 WAS GREATLY IN EXCESS OF THE GOVERNMENT'S ESTIMATE FOR THE DUCTWORK ($19,212 INCLUSIVE OF STACK SUPPORTS), THE GENERAL COUNSEL CONCLUDED THAT THIS PORTION OF BEXAR'S STEEL PROPOSAL WAS INCLUDED IN D.E.W.'S BID.

IT IS RELATED IN THE AFFIDAVIT THAT THE FIGURE OF $54,368 CONSTITUTED THE SHEET METAL ESTIMATE AND INCLUDED NOT ONLY THE DUCTWORK AND EXTERNAL DUCT INSULATION BUT ALSO THE INTERNAL DUCT LINER AND OTHER ITEMS SUCH AS FIRE DAMPERS AND COPPER AND STAINLESS STEEL PITCH BOXES.

D.E.W.' PRESIDENT FURTHER EXPLAINS THAT THE ORIGINAL TAKEOFF WAS MADE BY A MR. BROWN, A SHEET METAL CONTRACTOR HAVING A WORKING ARRANGEMENT WITH D.E.W. (UNDER WHICH D.E.W. WAS UTILIZING MR. BROWN'S FACILITIES), WHEREBY IT WAS AGREED THAT IF D.E.W. WAS TO RECEIVE THIS AWARD, MR. BROWN WAS TO WORK ON THE JOB AS AN ACTUAL EMPLOYEE OF D.E.W. RATHER THAN IN THE CAPACITY OF A SUBCONTRACTOR. IN VIEW OF THIS INFORMAL ARRANGEMENT, IT IS STATED, THERE WAS NO FORMAL BID SUBMITTED ON THE SHEET METAL WORK, THUS ACCOUNTING FOR THE FORM IN WHICH THE $54,368 ESTIMATE WAS SUBMITTED TO D.E.W.

THE ESTIMATE WAS SUBMITTED AS A TAKEOFF SUMMARY IN MR. BROWN'S HANDWRITING SHOWING PRICES TOTALING $54,368.12 ON 13 SEPARATE ITEMS. THE ORIGINAL SUMMARY WAS COMPUTED BY MR. BROWN AND WAS APPENDED TO HIS ACCOMPANYING AFFIDAVIT DATED JANUARY 22, 1971. THE SUMMARY DOES NOT CONTAIN ANY REFERENCE TO STRUCTURAL STEEL, AND MR. BROWN STATES THAT ALTHOUGH HE DOES NOT HAVE HIS WORK PAPERS TO SUPPORT THE FIGURES SHOWN ON HIS SUMMARY, THOSE FIGURES ARE FOR SHEET METAL WORK ONLY AND INCLUDES NOTHING FOR ANY ITEMS CALLED FOR IN THE SPECIFICATIONS MADE OUT OF STRUCTURAL STEEL.

WE BELIEVE THE RECORD NOW ADEQUATELY SUPPORTS THE POSITION THAT STRUCTURAL STEEL WAS NOT INCLUDED IN THE SHEET METAL ESTIMATE. CONSEQUENTLY, ON THE BASIS OF THE AFFIDAVITS AND TAKEOFF SUMMARY ENCLOSED WITH THE LETTER OF D.E.W.'S COUNSEL DATED JANUARY 29, 1971, IT IS OUR VIEW THAT THE EVIDENCE OF THE OMISSION OF STRUCTURAL STEEL FROM D.E.W.'S BID IS CLEAR AND CONVINCING UNDER THE REQUIREMENTS OF ASPR 2 406.3(A).

SINCE D.E.W. SEEKS CORRECTION OF ITS MISTAKE IN THE FORM OF A PRICE ADJUSTMENT ON THE CONTRACT, THE EVIDENCE MUST ALSO BE CLEAR AND CONVINCING UNDER ASPR 2-406.3(A), AS TO THE BID ACTUALLY INTENDED.

WE STATED IN OUR DECISION OF DECEMBER 7, 1970, THAT WE WERE PRECLUDED BY THE REGULATIONS PERTAINING TO LATE BID MODIFICATIONS FROM ACCEPTING THE TELEGRAM OF MAY 12, 1970, AS A BID MODIFICATION INCREASING D.E.W.'S BID BY $10,000, BECAUSE IT WAS RECEIVED SUBSEQUENT TO THE SCHEDULED BID OPENING TIME.

HOWEVER, WE HAVE HELD THAT A TELEGRAM RECEIVED TOO LATE TO BE CONSIDERED AS A BID MODIFICATION MAY BE CONSIDERED AS EVIDENCE IN ESTABLISHING THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, B-165434, DECEMBER 2, 1968. IN THE PRESENT CASE WE BELIEVE THE LATE MODIFICATION OF PRICE, WHICH WAS SENT PRIOR TO BID OPENING AND WAS RECEIVED ONLY ONE MINUTE LATE, WHEN CONSIDERED IN CONJUNCTION WITH THE OTHER EVIDENCE OF RECORD, IS ADEQUATE TO ESTABLISH BOTH THE EXISTENCE OF A MISTAKE AND THE INTENDED BID PRICE.

IN VIEW THEREOF, WE MUST CONCLUDE THAT THERE IS CLEAR AND CONVINCING EVIDENCE D.E.W.'S INTENDED BID WAS $192,000, RATHER THAN $182,000. SINCE D.E.W.'S INTENDED BID IS STILL THE LOWEST OF ALL BIDS RECEIVED, AND IT THEREFORE DOES NOT HAVE THE PREJUDICIAL EFFECT OF DISPLACING ANY OTHER BIDDER, D.E.W.'S CONTRACT PRICE SHOULD BE ADJUSTED TO REFLECT THE INTENDED BID PRICE OF $192,000.00.

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