B-172240(2), JUN 10, 1971

B-172240(2): Jun 10, 1971

Additional Materials:

Contact:

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

 

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

INCORPORATED'S BID WHICH WAS SUBMITTED UNDER AN IFB ISSUED BY THE ARMY ENGINEER DISTRICT. IS BEING DENIED. THE INDIVIDUAL ITEM PRICES MUST GOVERN CANNOT STAND BECAUSE THE IFB CONTAINED ONLY ONE SCHEDULE AND THE GOVERNMENT WAS THEREFORE PRECLUDED FROM MAKING AN AWARD ON ANY BASIS OTHER THAN THE TOTAL PRICE SHOWN FOR THE ENTIRE SCHEDULE. SECRETARY: REFERENCE IS MADE TO A LETTER DATED MAY 7. WHICH WAS SUBMITTED UNDER INVITATION FOR BIDS (IFB) NO. BIDDERS WERE REQUESTED TO SUBMIT BID PRICES ON THE FOLLOWING BIDDING SCHEDULE: ITEM UNIT NO. WHICH WAS IFB NO. WAS ISSUED DECEMBER 23. A READVERTISEMENT WAS MADE UNDER IFB NO. BIDS WERE PUBLICLY OPENED AND READ. THE BIDDERS AND THEIR RESPECTIVE TOTAL BID PRICES WERE AS FOLLOWS: GULDEMANN CONSTRUCTION AND ENGINEERING.

B-172240(2), JUN 10, 1971

BID PROTEST - MISTAKE IN BID - CORRECTION ADVISING THAT THE PROTEST OF HUNT BUILDING MARTS, INC., AGAINST THE CORRECTION OF GULDEMANN CONSTRUCTION AND ENGINEERING, INCORPORATED'S BID WHICH WAS SUBMITTED UNDER AN IFB ISSUED BY THE ARMY ENGINEER DISTRICT, FORT WORTH, TEXAS, FOR THE CONSTRUCTION OF A CONFINEMENT FACILITY, IS BEING DENIED. A BID WHICH STATED THE PRICE ON ITEM 1 AS $764,750 AND ON ITEM 2 AS $790,200 BUT LISTED THE TOTAL PRICE AS $1,043,950 MAY BE CORRECTED AFTER OPENING TO ALLOW THE PRICE ON THE SECOND ITEM TO BE REDUCED TO $79,200. PROTESTANT'S CONTENTION THAT SINCE THE INSTRUCTIONS TO BIDDERS REQUIRE BIDDERS TO BID ON ALL ITEMS, THE INDIVIDUAL ITEM PRICES MUST GOVERN CANNOT STAND BECAUSE THE IFB CONTAINED ONLY ONE SCHEDULE AND THE GOVERNMENT WAS THEREFORE PRECLUDED FROM MAKING AN AWARD ON ANY BASIS OTHER THAN THE TOTAL PRICE SHOWN FOR THE ENTIRE SCHEDULE.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED MAY 7, 1971, WITH ENCLOSURES, REFERENCE ENGGC-M, RELATIVE TO AN ALLEGATION OF MISTAKE IN BID PRIOR TO AWARD BY GULDEMANN CONSTRUCTION AND ENGINEERING, INC., AND TO THE PROTEST OF HUNT BUILDING MARTS, INC., AGAINST CORRECTION OF GULDEMANN'S BID, WHICH WAS SUBMITTED UNDER INVITATION FOR BIDS (IFB) NO. DACA63-71 B-0161, ISSUED MARCH 3, 1971, BY THE UNITED STATES ARMY ENGINEER DISTRICT, FORT WORTH, TEXAS.

THE IFB CALLED FOR BIDS ON THE CONSTRUCTION OF A CONFINEMENT FACILITY AT FORT BLISS, EL PASO, TEXAS, AND BIDDERS WERE REQUESTED TO SUBMIT BID PRICES ON THE FOLLOWING BIDDING SCHEDULE:

ITEM UNIT

NO. DESCRIPTION QUANTITY UNIT PRICE AMOUNT

1 CONFINEMENT FACILITY

BUILDING JOB SUM *** $

2 GRADING, PAVING, UTILITIES,

DUST PALLIATIVE TREATMENT,

AND ALL OTHER WORK NOT JOB SUM *** $

SEPARATELY LISTED

NOTE: BIDDERS MUST BID ON ALL ITEMS.

THE ORIGINAL IFB FOR THIS CONTRACT, WHICH WAS IFB NO. DACA63-71-B 0074, WAS ISSUED DECEMBER 23, 1970, AND ENDED IN A REJECTION OF ALL BIDS BECAUSE OF THE PRESIDENTIAL SUSPENSION OF THE DAVIS-BACON ACT, AND A READVERTISEMENT WAS MADE UNDER IFB NO. DACA63-71-B-0161, ON MARCH 3, 1971. ON MARCH 16, 1971, BIDS WERE PUBLICLY OPENED AND READ. THE BIDDERS AND THEIR RESPECTIVE TOTAL BID PRICES WERE AS FOLLOWS:

GULDEMANN CONSTRUCTION AND ENGINEERING, INC. $1,043,950.00

HUNT BUILDING MARTS, INC.1,049,000.00

JORDAN AND NOBLES CONSTRUCTION CO. 1,060,000.00

ROBERT E. MCKEE, INC. 1,074,500.00

R. D. LOWMAN GENERAL CONTRACTOR, INC. 1,074,650.00

SUBSEQUENT TO THE PUBLIC OPENING AND READING OF THE BIDS IT WAS NOTED THAT GULDEMANN'S PRICES FOR ITEMS NO. 1 AND NO. 2 WERE:

ITEM NO. 1 $964,750.00

ITEM NO. 2 790,200.00 SINCE THESE FIGURES RESULTED IN A TOTAL OF $1,754,950.00, THAT FIGURE WAS ENTERED ON THE ABSTRACT OF BIDS AS GULDEMANN'S BID PRICE, INSTEAD OF THE $1,043,950.00 TOTAL ENTERED ON THE BID FORM.

BECAUSE IT WAS OBVIOUS THAT THERE WAS AN ERROR IN GULDEMANN'S BID, THE CHIEF, CONTRACT ADMINISTRATION BRANCH, SUPPLY DIVISION, REQUESTED VERIFICATION OF THE BID. THE CONTRACTING OFFICER REPORTS THE SUBSEQUENT EVENTS AS FOLLOWS:

"3. THE CHIEF, CONTRACT ADMINISTRATION BRANCH, SUPPLY DIVISION, TELEPHONED MR. R. A. BOHANNON, VICE PRESIDENT OF GULDEMANN IN THE LATE AFTERNOON OF 16 MARCH 1971 AND ADVISED THAT THE BID TOTAL RESULTING FROM THE ADDITION OF THE BID ITEMS WAS GREATER THAN THE TOTAL ENTERED ON THE BID FORM, AND THUS GULDEMANN'S BID WAS NO LONGER THE LOW BID. MR. BOHANNON STATED, 'I HAVE MY FILE COPY RIGHT HERE. LET ME READ THE ITEMS AND SEE HOW THEY ARE DIFFERENT.' MR. BOHANNON THEN STATED THAT THE FIGURES WERE $964,750.00 FOR ITEM ONE, $79,200.00 FOR ITEM TWO, AND $1,043,950.00 FOR THE TOTAL. MR. BOHANNON WAS THEN ADVISED THAT THE BID FORM HAD A FIGURE OF $790,200.00 FOR BID ITEM TWO. MR. BOHANNON THEN ALLEGED A MISTAKE IN BID. HE STATED THAT THE INTENDED BID FOR ITEM TWO WAS $79,200.00 AND THE TOTAL WAS $1,043,950.00. THE PROCEDURES RELATIVE TO MISTAKES IN BID WERE DISCUSSED WITH HIM. HE WAS REQUESTED TO SUBMIT A SWORN STATEMENT, ALL WORK PAPERS AND ANY OTHER EVIDENCE WHICH WOULD CONCLUSIVELY ESTABLISH THE EXISTENCE OF THE ERROR, THE MANNER IN WHICH IT OCCURRED, AND THE BID ACTUALLY INTENDED. MR. BOHANNON STATED THAT THE EVIDENCE WOULD BE SUBMITTED PROMPTLY AND THAT CORRECTION OF THE MISTAKE WOULD BE REQUESTED.

"4. ON 18 MARCH 1971, THE BIDDER SUBMITTED A LETTER DATED 17 MARCH 1971. THE LETTER SIGNED BY MR. GENE GULDEMANN, PRESIDENT, TRANSMITTED A SWORN STATEMENT BY MR. R. A. BOHANNON, VICE PRESIDENT, THE BIDDER'S FILE COPY OF THE BID, AND ESTIMATE SUMMARY SHEETS FOR BID ITEMS ONE AND TWO.

"5. GULDEMANN, WHOSE BUSINESS IS IN EL PASO, TEXAS, SOME 600 MILES FROM FORT WORTH, ALLEGES THAT ITS NORMAL PROCEDURE OF SUBMITTING BIDS TO THE FORT WORTH DISTRICT IS TO HAVE THEIR BONDING COMPANY IN FORT WORTH HAND CARRY THE BID TO THE OPENING. THE BID AMOUNT IS TELEPHONED TO THE BONDING COMPANY SHORTLY BEFORE THE BID OPENING AND THE FIGURES ARE ENTERED ON THE BID FORM BY A BONDING COMPANY EMPLOYEE. GULDEMANN ALLEGES THAT THIS PRACTICE WAS FOLLOWED IN THE PRESENT CASE. GULDEMANN CONTENDS THAT AT APPROXIMATELY 1:15 P.M., 16 MARCH 1971, MR. BOHANNON CALLED MR. ALFRED F. KAHRS, AN EMPLOYEE OF THE GULF INSURANCE GROUP, IN FORT WORTH. IT IS CONTENDED THAT MR. BOHANNON INSTRUCTED MR. KAHRS TO USE FIGURES OF $961,750.00 FOR ITEM ONE AND $79,200.00 FOR ITEM TWO, AND A TOTAL OF $1,040,950.00. MR. KAHRS WAS THEN ADVISED TO PROCEED TO THE BID OPENING WHICH WAS TO BE CONDUCTED AT 819 TAYLOR STREET, FORT WORTH, AND CALL MR. BOHANNON FOR ANY LAST MINUTE CHANGES.

"6. IT IS THEN ALLEGED THAT MR. KAHRS CALLED MR. BOHANNON AT APPROXIMATELY 1:40 P.M. AT THIS TIME IT IS CONTENDED THAT MR. BOHANNON INSTRUCTED MR. KAHRS TO ADD $3,000.00 TO ITEM ONE AND THE TOTAL, MAKING THESE AMOUNTS $964,750.00 AND $1,043,950.00.

"7. GULDEMANN CONTENDS THAT IT IS NORMAL PRACTICE TO CALL OUT THE FIGURES TO THE PERSON ACTING AS THEIR AGENT IN FORT WORTH AND THEN HAVE THE FIGURES READ BACK TO THEM. IT IS CONTENDED THAT THIS PROCEDURE WAS FOLLOWED IN BOTH TELEPHONE CALLS INVOLVED IN THIS CASE. GULDEMANN CONTENDS THAT ITS BID FOR ITEM TWO WAS $79,200.00, AND THAT MR. KAHRS ERRONEOUSLY ENTERED A FIGURE OF $790,200.00.

"8. GULDEMANN HAS SUBMITTED ITS FILE COPY OF THE BID, AND THE ORIGINAL WORK SHEETS. THIS EVIDENCE SHOWS A FIGURE OF $79,200.00 FOR ITEM TWO.

"9. A SWORN STATEMENT HAS BEEN SUBMITTED BY MR. ALFRED F. KAHRS OF GULF INSURANCE CORP. THIS STATEMENT REHEARSES THE SEQUENCE OF EVENTS INVOLVED IN THE SUBMISSION OF GULDEMANN'S BID."

ADDITIONALLY, THE CONTRACTING OFFICER POINTS OUT THAT GULDEMANN BID $88,400 ON ITEM NO. 2 UNDER THE ORIGINAL IFB.

GULDEMANN THUS ARGUES THAT A MISTAKE HAS BEEN MADE IN THE SUBMISSION OF ITS ITEM NO. 2 PRICE, AND REQUESTS CORRECTION OF THE ITEM NO. 2 PRICE TO $79,200.00. CONVERSELY, HUNT BUILDING MARTS, INC., THE LOW BIDDER AS SHOWN ON THE ABSTRACT OF BIDS, CONTENDED THAT GULDEMANN'S CORRECT TOTAL BID PRICE IS $1,754,950, SINCE THE INSTRUCTIONS TO BIDDERS AND THE NOTE ON THE BIDDING SCHEDULE REQUIRE BIDDERS TO BID ON ALL ITEMS AND THE INDIVIDUAL ITEM PRICES MUST THEREFORE GOVERN. HUNT HAS THEREFORE FILED A PROTEST WITH THE CONTRACTING OFFICER AGAINST CORRECTION OF THE ITEM NO. 2 PRICE, AND HAS BEEN GIVEN THE OPPORTUNITY TO SUBMIT ADDITIONAL ARGUMENT TO THIS OFFICE.

PARAGRAPH 5(B) OF THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22) PROVIDES IN PERTINENT PART THAT "WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID."

ADDITIONALLY, PARAGRAPH 10(C) OF SUCH INSTRUCTIONS PROVIDES AS FOLLOWS:

"(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED BY THE INVITATION FOR BIDS OR THE BIDDER INCLUDES IN HIS BID A RESTRICTIVE LIMITATION."

HOWEVER, THE INVITATION FOR BIDS ALSO INCLUDED ADDITIONAL INSTRUCTIONS WHICH WERE TO BE READ IN CONJUNCTION WITH THE STANDARD FORM 22 INSTRUCTIONS. PARAGRAPH 8 OF SUCH ADDITIONAL INSTRUCTIONS READ AS FOLLOWS:

"8. GOVERNMENTS PRIVILEGE IN MAKING AWARDS. THE GOVERNMENT FURTHER RESERVES THE RIGHT TO MAKE AWARD OF ANY OR ALL SCHEDULES OF ANY BID, UNLESS THE BIDDER QUALIFIES SUCH BID BY SPECIFIC LIMITATION; ALSO TO MAKE AWARD TO THE BIDDER WHOSE AGGREGATE BID ON ANY COMBINATION OF BID SCHEDULES IS LOW. FOR THE PURPOSE OF THIS INVITATION FOR BIDS, THE WORD 'ITEM' AS USED IN PARAGRAPH 10(C) OF STANDARD FORM 22 SHALL BE CONSIDERED TO MEAN 'SCHEDULE'."

IN OUR DECISION B-170238, NOVEMBER 16, 1970, WE HAD OCCASION TO CONSIDER THE EFFECT OF PARAGRAPH 8 ON THE RIGHT OTHERWISE RESERVED TO THE GOVERNMENT BY PARAGRAPH 10(C) TO MAKE AWARDS ON AN ITEM BY ITEM BASIS. THAT DECISION WE CONCLUDED THAT PARAGRAPH 8 PRECLUDED AWARD ON LESS THAN A SCHEDULE BY SCHEDULE BASIS, AND WHERE ONLY ONE SCHEDULE WAS INCLUDED IN THE INVITATION ONLY ONE AWARD, AT THE TOTAL SCHEDULE BID PRICE, COULD BE MADE.

IN THE INSTANT CASE, THE IFB CONTAINED ONLY ONE SCHEDULE, AND THE GOVERNMENT WAS THEREFORE PRECLUDED FROM MAKING AN AWARD ON ANY BASIS OTHER THAN THE TOTAL PRICE SHOWN FOR THE ENTIRE SCHEDULE. SINCE THE GOVERNMENT HAD NOT RESERVED THE RIGHT TO AWARD ON AN ITEM BY ITEM BASIS, IT FOLLOWS THAT THERE WAS NO JUSTIFICATION FOR CONCLUDING THAT THE ITEM PRICES IN GULDEMANN'S BID SHOULD BE CONTROLLING, OR FOR CHANGING ITS TOTAL SCHEDULE PRICE TO EQUAL THE SUM OF THE ITEM PRICES. WE ARE THEREFORE OF THE OPINION THAT THE BID OPENING OFFICER, IN THE ABSENCE OF AN ALLEGATION BY GULDEMANN THAT ITS TOTAL PRICE WAS IN ERROR, WAS REQUIRED TO CONSIDER $1,043,950 AS THE CORRECT BID PRICE AND TO ENTER THAT AMOUNT ON THE ABSTRACT OF BIDS. HAD SUCH PROCEDURE BEEN FOLLOWED IT IS CLEAR THAT GULDEMANN'S BID WOULD HAVE BEEN THE LOWEST RECEIVED, IN WHICH EVENT EXTRANEOUS EVIDENCE (SUCH AS WORKSHEETS, AFFIDAVITS, AND GULDEMANN'S BID PRICE ON ITEM NO. 2 UNDER IFB NO. DACA63-71-B-0074) COULD PROPERLY HAVE BEEN CONSIDERED IN ESTABLISHING BOTH THE EXISTENCE OF AN ERROR AND THE INTENDED BID PRICE ON ITEM NO. 2. CF., ASPR 2-406.3(A)(3), UNDER WHICH IT IS NECESSARY TO ASCERTAIN THE NATURE OF THE ERROR AND THE INTENDED BID PRICE FROM THE BID FORM ITSELF IF CORRECTION WILL REPLACE OTHER BIDDERS.

WE ARE OF THE OPINION THAT THE ALTERATION OF GULDEMANN'S TOTAL BID PRICE BY THE BID OPENING OFFICER CANNOT OPERATE TO DEPRIVE GULDEMANN OF ITS RIGHT TO HAVE $1,043,950 CONSIDERED AS A CORRECT BID PRICE, OR ITS RIGHT TO SUBMIT AND HAVE EXTRANEOUS EVIDENCE CONSIDERED IN ASCERTAINING ITS INTENDED BID PRICE FOR ITEM NO. 2.

FROM OUR REVIEW OF THE EVIDENCE PRESENTED, AS DESCRIBED IN THE ADMINISTRATIVE REPORT QUOTED ABOVE, IT IS OUR OPINION SUCH EVIDENCE CLEARLY ESTABLISHES THAT GULDEMANN ACTUALLY INTENDED TO BID $79,200 ON ITEM NO. 2. ACCORDINGLY, THE ITEM NO. 2 BID PRICE SHOULD BE SO CORRECTED AND, IF OTHERWISE PROPER, GULDEMANN'S BID OF $1,043,950 FOR THE TOTAL WORK DESCRIBED IN THE SCHEDULE MAY BE ACCEPTED.

A COPY OF THIS DECISION IS BEING FORWARDED TO HUNT BUILDING MARTS, INC., WITH THE ADVICE THAT ITS PROTEST IS DENIED.

THE FILE RECEIVED WITH YOUR LETTER OF MAY 7, 1971, IS RETURNED.