B-172909, JUL 1, 1971, 51 COMP GEN 1

B-172909: Jul 1, 1971

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IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE OF THE BID ACTUALLY INTENDED THE BID MAY NOT BE MODIFIED BUT ONLY WITHDRAWN AS THE DEGREE OF PROOF REQUIRED TO PERMIT CORRECTION IS MUCH HIGHER THAN THAT REQUIRED TO JUSTIFY WITHDRAWAL OF A BID. IS A QUESTION OF FACT MADE PURSUANT TO AUTHORITY DELEGATED BY THE UNITED STATES GENERAL ACCOUNTING OFFICE (GAO) TO ADMINISTRATIVE AGENCIES. REVIEW OF THE DATA FURNISHED IN SUPPORT OF THE ALLEGED ERROR EVIDENCES THE DETERMINATION WAS REASONABLE. FOR THERE IS NOTHING INCONSISTENT IN THE FACT THE DATA SUBMITTED PROVES THE EXISTENCE OF A MISTAKE BUT DOES NOT MEET THE STANDARD OF PROOF REQUIRED TO ESTABLISH THE BID INTENDED. 1971: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 16.

B-172909, JUL 1, 1971, 51 COMP GEN 1

BIDS - MISTAKES - INTENDED BID PRICE UNCERTAINTY - CORRECTION INCONSISTENT WITH COMPETITIVE BIDDING SYSTEM THE DETERMINATION BY THE CONTRACTING AGENCY THAT ALTHOUGH THE LOW BIDDER ON A MILITARY HOUSING CONSTRUCTION PROJECT HAD MADE A BONA FIDE MISTAKE, BUT IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE OF THE BID ACTUALLY INTENDED THE BID MAY NOT BE MODIFIED BUT ONLY WITHDRAWN AS THE DEGREE OF PROOF REQUIRED TO PERMIT CORRECTION IS MUCH HIGHER THAN THAT REQUIRED TO JUSTIFY WITHDRAWAL OF A BID, IS A QUESTION OF FACT MADE PURSUANT TO AUTHORITY DELEGATED BY THE UNITED STATES GENERAL ACCOUNTING OFFICE (GAO) TO ADMINISTRATIVE AGENCIES, SUBJECT TO GAO REVIEW, AND REVIEW OF THE DATA FURNISHED IN SUPPORT OF THE ALLEGED ERROR EVIDENCES THE DETERMINATION WAS REASONABLE, FOR THERE IS NOTHING INCONSISTENT IN THE FACT THE DATA SUBMITTED PROVES THE EXISTENCE OF A MISTAKE BUT DOES NOT MEET THE STANDARD OF PROOF REQUIRED TO ESTABLISH THE BID INTENDED.

TO VON BAUR, COBURN, SIMMONS & TURTLE, JULY 1, 1971:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 16, 1971, AND PRIOR CORRESPONDENCE, ON BEHALF OF NATIONAL HOUSING INDUSTRIES, INCORPORATED (NATIONAL HOUSING), PROTESTING AGAINST THE ADMINISTRATIVE REFUSAL TO CORRECT NATIONAL HOUSING'S LOW BID SUBMITTED UNDER INVITATION FOR BIDS NO. F02600-71-B-0339, ISSUED BY WILLIAMS AIR FORCE BASE, ARIZONA.

THE INVITATION, ISSUED ON FEBRUARY 24, 1971, REQUESTED BIDS FOR THE DESIGN AND CONSTRUCTION OF 200 MILITARY FAMILY HOUSING UNITS AT WILLIAMS AIR FORCE BASE, ARIZONA. THE NINE BIDS RECEIVED, OPENED ON APRIL 6, 1971, WERE AS FOLLOWS:

NATIONAL HOUSING $2,880,000

BIDDER NO. 2 3,186,398

BIDDER NO. 3 3,246,710

BIDDER NO. 4 3,263,642

BIDDER NO. 5 3,279,988

BIDDER NO. 6 3,295,000

BIDDER NO. 7 3,467,550

BIDDER NO. 8 3,566,296

BIDDER NO. 9 3,648,997

THE GOVERNMENT ESTIMATE FOR THE PROJECT WAS $3,645,000.

IT IS REPORTED THAT IMMEDIATELY FOLLOWING THE BID OPENING A REPRESENTATIVE OF NATIONAL HOUSING STATED THAT SINCE NATIONAL HOUSING HAD DESIGNED THEIR OWN HOUSES, THEY KNEW WHAT IT COST TO BUILD THEM THEIR BID WAS CONSIDERABLY LOWER THAN ANY OTHER BID SUBMITTED. HOWEVER, DUE TO THE WIDE VARIATION ($306,398) BETWEEN THE BID OF NATIONAL HOUSING AND THE NEXT LOWEST BID, AND ALSO BECAUSE IT WAS $765,000 BELOW THE GOVERNMENT ESTIMATE, THE CONTRACTING OFFICER, BY LETTER DATED APRIL 7, 1971, REQUESTED NATIONAL HOUSING TO CAREFULLY REVIEW THEIR BID AND SUBMIT WRITTEN VERIFICATION OF ITS ACCURACY.

THE CONTRACTING OFFICER REPORTS THAT ON APRIL 8, 1971, HE TALKED, VIA TELEPHONE, WITH THE NATIONAL HOUSING REPRESENTATIVE WHO ATTENDED THE BID OPENING AND HE STATED THAT THEY WERE REVIEWING THEIR BID, THAT EVERYTHING APPEARED TO CHECK OUT SATISFACTORILY, AND THAT THEY WOULD SUBMIT A WRITTEN VERIFICATION OF THE BID IN THE NEAR FUTURE. NOT HAVING RECEIVED THE VERIFICATION, THE CONTRACTING OFFICER CALLED NATIONAL HOUSING'S REPRESENTATIVE ON APRIL 12, 1971, AND HE ADVISED THAT THE BID WAS STILL UNDER STUDY. THE FOLLOWING DAY, APRIL 13, THE CONTRACTING OFFICER RECEIVED A TELEPHONE CALL FROM ANOTHER REPRESENTATIVE OF NATIONAL HOUSING WHO ADVISED THAT A MISTAKE HAD BEEN DISCOVERED IN THEIR BID AND REQUESTED A MEETING THE FOLLOWING DAY. ON APRIL 14, TWO REPRESENTATIVES OF NATIONAL HOUSING MET WITH BASE PROCUREMENT OFFICIALS AND STATED THAT INDIRECT CONSTRUCTION COSTS TOTALING $144,743 HAD BEEN INADVERTENTLY OMITTED FROM THEIR BID, AND REQUESTED PERMISSION TO INCREASE THE BID BY THAT AMOUNT.

THE ALLEGED ERROR WAS CONFIRMED BY LETTER DATED APRIL 15, 1971. THEREAFTER NATIONAL HOUSING SUBMITTED COPIES OF THEIR SUBCONTRACTORS' BIDS, WORKSHEETS USED IN COMPUTING THE BID AND AFFIDAVITS EXPLAINING THE ALLEGED MISTAKE AND HOW IT OCCURRED. THE CONTRACTING OFFICER REVIEWED THE DATA SUBMITTED AND CONCLUDED THAT THE BID PRICE INCLUDED ONLY DIRECT CONSTRUCTION COSTS PLUS 6 1/2 PERCENT THEREON, OR $175,774, FOR GENERAL ADMINISTRATIVE OVERHEAD AND PROFIT AND THAT BID DID NOT INCLUDE VARIOUS INDIRECT COSTS TOTALING $144,743 WHICH HE CONSIDERED VALID AND NECESSARY FOR THE SUCCESSFUL PERFORMANCE OF THE CONTRACT. THE DOCUMENTATION REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3(E)(3)(V) WAS SUBMITTED TO THE OFFICE OF THE STAFF ADVOCATE, HEADQUARTERS AIR FORCE LOGISTICS COMMAND, WRIGHT-PATTERSON AIR FORCE BASE, OHIO (AFLC/JA), FOR FINAL DECISION WITH THE CONTRACTING OFFICER'S RECOMMENDATION THAT NATIONAL HOUSING BE PERMITTED TO MODIFY THEIR BID AS REQUESTED.

PURSUANT TO AUTHORITY DELEGATED UNDER ASPR 2-406.3(B)(3), AFLC/JA MADE A DETERMINATION AS FOLLOWS:

IN ACCORDANCE WITH ASPR 2-406.3(A)(3), I HEREBY MAKE THE FOLLOWING ADMINISTRATIVE DETERMINATION:

THAT CLEAR AND CONVINCING EVIDENCE HAS BEEN PRESENTED THAT NATIONAL HOUSING INDUSTRIES OF PHOENIX, ARIZONA, MADE A BONA FIDE MISTAKE IN ITS BID TO IFB F02600-71-B-0339.

THAT CLEAR AND CONVINCING EVIDENCE HAS NOT BEEN PRESENTED AS TO THE BID ACTUALLY INTENDED.

THAT NATIONAL HOUSING INDUSTRIES IS NOT PERMITTED TO MODIFY THE BID, BUT IS PERMITTED TO WITHDRAW THE BID FROM CONSIDERATION FOR AWARD.

BY LETTER DATED MAY 4, 1971, THE CONTRACTING OFFICER ADVISED NATIONAL HOUSING THAT THEIR REQUEST FOR BID MODIFICATION HAD BEEN DENIED AND REQUESTED WRITTEN CONFIRMATION WHETHER THEY WISHED TO WITHDRAW THE BID OR HAVE THE BID CONSIDERED FOR AWARD AS SUBMITTED. THEREAFTER YOU REQUESTED ON BEHALF OF NATIONAL HOUSING THAT AFLC/JA REVIEW THE ADMINISTRATIVE DETERMINATION MADE. SUCH REQUEST WAS GRANTED; THE REVIEW WAS CONDUCTED AND THE ORIGINAL DETERMINATION WAS REAFFIRMED. THEREUPON YOU FILED A PROTEST WITH THIS OFFICE AGAINST THE ADMINISTRATIVE DENIAL OF NATIONAL HOUSING'S REQUEST FOR CORRECTION OF THEIR BID.

YOU URGE THAT THE EVIDENCE SUBMITTED BY NATIONAL HOUSING IN SUPPORT OF THE ALLEGED ERROR CLEARLY ESTABLISHES BOTH THAT AN ERROR WAS IN FACT MADE AND THE INTENDED BID PRICE. THEREFORE YOU CONTEND THAT NATIONAL HOUSING SHOULD HAVE BEEN PERMITTED TO CORRECT THE BID. ORIGINALLY, THE AUTHORITY TO CONSIDER CORRECTION OF MISTAKES IN BIDS WAS RETAINED IN THE GENERAL ACCOUNTING OFFICE. LATER THE AUTHORITY TO CORRECT MISTAKES ALLEGED AFTER BID OPENING AND PRIOR TO AWARD WAS DELEGATED TO THE PROCURING DEPARTMENT. 29 COMP. GEN. 393 (1950). WHILE THE GENERAL ACCOUNTING OFFICE RETAINED THE RIGHT TO REVIEW THE ADMINISTRATIVE DETERMINATION, THE WEIGHT TO BE GIVEN THE EVIDENCE WAS RECOGNIZED AS A QUESTION OF FACT TO BE CONSIDERED BY THE ADMINISTRATIVELY DESIGNATED EVALUATOR OF THE EVIDENCE. 41 COMP. GEN. 160, 163 (1961). WITH RESPECT TO THE DEPARTMENT OF THE AIR FORCE, THAT AUTHORITY IS DELEGATED, WITHOUT AUTHORITY TO REDELEGATE, TO AFLC/JA. SEE ASPR 2 406.3(B)(3).

FROM THE DATA FURNISHED IN SUPPORT OF THE ALLEGED ERROR, WE CANNOT CONCLUDE THAT THERE WAS NO REASONABLE BASIS FOR THE DETERMINATION REACHED. WE FIND NOTHING INCONSISTENT IN THE FACT THAT THE DATA SUBMITTED WAS FOUND TO INCLUDE CLEAR AND CONVINCING EVIDENCE OF THE EXISTENCE OF A MISTAKE, BUT DID NOT MEET THE SAME STANDARD OF PROOF WITH RESPECT TO THE INTENDED BID. THE DEGREE OF PROOF REQUIRED TO PERMIT CORRECTION IS MUCH HIGHER THAN THAT REQUIRED TO JUSTIFY WITHDRAWAL OF A BID. 36 COMP. GEN. 441 (1956).

ACCORDINGLY, THE PROTEST MUST BE DENIED.