B-173394, NOV 23, 1971

B-173394: Nov 23, 1971

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WHILE KING WAS NOT ENTIRELY FREE OF NEGLIGENCE IN PREPARING ITS BID. SECRETARY: REFERENCE IS MADE TO LETTER FAC 0211E/RSL:JA DATED SEPTEMBER 17. THE INVITATION FOR BIDS UNDER WHICH THE CONTRACT WAS AWARDED COVERED CLEANING SERVICES FOR HEATING AND AIR-CONDITIONING DUCTS IN THREE BUILDINGS AT NOS - "II. WERE AVAILABLE FOR INSPECTION. BIDDERS WERE INFORMED THAT THE SCOPE OF THE WORK ENTAILED THE ENTIRE HEATING AND AIR-CONDITIONING DUCT SYSTEM FOR THE DESIGNATED BUILDINGS. A REPRESENTATIVE OF KING WAS GIVEN A WALK THROUGH INSPECTION TOUR OF THE BUILDINGS DESIGNATED IN THE INVITATION BY AN EMPLOYEE OF NOS. SINCE KING'S BID PRICE WAS SIGNIFICANTLY LOWER THAN THAT OF THE SECOND LOW BIDDER. THE CONTRACT WAS AWARDED TO KING ON JUNE 1.

B-173394, NOV 23, 1971

CONTRACTS - REFORMATION - MISTAKE IN BID DECISION ALLOWING REFORMATION OF CONTRACT COVERING CLEANING AND SERVICING OF HEATING AND AIR CONDITIONING DUCTS BETWEEN NAVAL ORDINANCE STATION, LOUISVILLE, KY. AND KING POWER CLEANING COMPANY DUE TO MISTAKE IN BID. WHILE KING WAS NOT ENTIRELY FREE OF NEGLIGENCE IN PREPARING ITS BID, THE UNCLEAR AND INDEFINITIVE SPECIFICATIONS COMBINED WITH THE ADMITTEDLY INCOMPLETE WALK THROUGH TOUR CAUSED OR CONTRIBUTED TO THE BIDDER'S ERROR. THEREFORE, ADJUSTMENT IN CONTRACT PRICE MAY BE MADE.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER FAC 0211E/RSL:JA DATED SEPTEMBER 17, 1971, FROM THE NAVAL FACILITIES ENGINEERING COMMAND, REPORTING ON THE REQUEST FOR REFORMATION OF CONTRACT NO. N62470-71-C-0301, AWARDED TO KING POWER CLEANING COMPANY (KING) BY THE NAVAL ORDNANCE STATION (NOS), LOUISVILLE, KENTUCKY.

THE INVITATION FOR BIDS UNDER WHICH THE CONTRACT WAS AWARDED COVERED CLEANING SERVICES FOR HEATING AND AIR-CONDITIONING DUCTS IN THREE BUILDINGS AT NOS - "II," "W" AND ADMINISTRATION - IN ACCORDANCE WITH AN ATTACHED SPECIFICATION. THE SPECIFICATION ADVISED BIDDERS THAT THE CONSTRUCTION DRAWINGS FOR THE BUILDINGS, WHICH INDICATED THE GENERAL LAYOUT AND SCOPE OF THE WORK, WERE AVAILABLE FOR INSPECTION. ALSO, BIDDERS WERE INFORMED THAT THE SCOPE OF THE WORK ENTAILED THE ENTIRE HEATING AND AIR-CONDITIONING DUCT SYSTEM FOR THE DESIGNATED BUILDINGS.

PRIOR TO BID OPENING, A REPRESENTATIVE OF KING WAS GIVEN A WALK THROUGH INSPECTION TOUR OF THE BUILDINGS DESIGNATED IN THE INVITATION BY AN EMPLOYEE OF NOS. BID OPENING ESTABLISHED KING AS THE LOW BIDDER AT A PRICE OF $3,790. SINCE KING'S BID PRICE WAS SIGNIFICANTLY LOWER THAN THAT OF THE SECOND LOW BIDDER, $7,140, BY LETTER DATED MAY 20, 1971, NOS, POINTING OUT THIS DIFFERENCE, REQUESTED KING TO REVIEW ITS BID FOR POSSIBLE ERROR. BY LETTER OF MAY 24, 1971, KING VERIFIED ITS BID. THE CONTRACT WAS AWARDED TO KING ON JUNE 1, 1971, AND WE HAVE BEEN ADVISED THAT PERFORMANCE HAS BEEN COMPLETED.

THE FILE SHOWS THAT, AFTER NOTICE OF AWARD, AS REQUIRED BY THE INVITATION, KING SUBMITTED A DETAILED BREAKDOWN OF PRICES FOR THE INDIVIDUAL BUILDINGS, INCLUDING, SO FAR AS REGARDS BUILDING "W" - THREE UNITS AT A MATERIAL COST OF $100 AND LABOR COST OF $1,400 FOR A TOTAL COST OF $1,500. SUBSEQUENTLY, AT THE PRECONSTRUCTION CONFERENCE, A REPRESENTATIVE OF KING DISCOVERED, APPARENTLY FOR THE FIRST TIME, THAT BUILDING "W" CONSISTED OF FIVE, NOT THREE, UNITS, THE ADDITIONAL UNITS REPRESENTING THE NORTH PORTION OF THE BUILDING.

THE REQUEST FOR RELIEF IS BASED UPON KING'S CLAIM OF ERROR IN PREPARING ITS BID DUE TO THE FACT THAT THE WALK THROUGH TOUR DID NOT INCLUDE THE ADDITIONAL TWO UNITS IN THE NORTH PORTION OF BUILDING "W," BUTTRESSED BY THE BREAKDOWN OF PRICES SUBMITTED TO NOS SUBSEQUENT TO CONTRACT AWARD INDICATING THREE UNITS FOR BUILDING "W." IN ADDITION, KING HAS SUBMITTED COPIES OF PREBID WORKSHEETS WHICH ESTABLISH THAT THE FIRM DID NOT TAKE THE TWO UNITS CONSTITUTING THE NORTH PORTION OF BUILDING "W" INTO ACCOUNT PRIOR TO SUBMITTING THE BID.

THE NAVAL FACILITIES ENGINEERING COMMAND LETTER AGREES WITH KING THAT "THE SITE VISIT DID NOT INCLUDE A FULL, DETAILED TOUR OF ALL AREAS; IN PARTICULAR, HE WAS NOT TAKEN THROUGH THE NORTH PORTION OF BUILDING 'W.'" IN THIS REGARD, THE LETTER CONCLUDED THAT NOS "WAS SOMEWHAT REMISS IN NOT PROVIDING THE BIDDER WITH A FULL WALK THROUGH, AS WELL AS NOT INVESTIGATING FURTHER WHEN THIS EXTREMELY LOW BID WAS CONFIRMED." CONTINUING IN THIS VEIN, THE LETTER STATED:

" *** IT IS ALSO OUR CONSIDERATION THAT THE IFB PACKAGE, INCLUDING THE DRAWINGS ON FILE, ARE NOT AS DEFINITIVE AS THEY MIGHT HAVE BEEN IN DELINEATING THE WORK TO BE PERFORMED. ON THE OTHER HAND, THE BIDDER WAS LAX IN NOT INVESTIGATING THE SITE MORE THOROUGHLY DURING THE VISIT, IN NOT EXAMINING THE DRAWINGS WITH MORE CARE, AND NOT RECHECKING THE SITE, THE DRAWINGS, OR THE EXTENT OF THE WORK TO BE PERFORMED WHEN REQUESTED TO CONFIRM HIS BID."

WHILE WE AGREE THAT KING MAY NOT HAVE BEEN ENTIRELY FREE OF NEGLIGENCE IN PREPARING ITS BID, IT IS OUR OPINION THAT THE UNCLEAR AND INDEFINITIVE SPECIFICATIONS COMBINED WITH THE ADMITTED INCOMPLETE WALK THROUGH TOUR CAUSED OR CONTRIBUTED TO THE BIDDER'S ERROR. FURTHER, ALTHOUGH KING VERIFIED THE BID, IT IS CLEAR THAT SUCH VERIFICATION WAS BASED UPON A MISUNDERSTANDING BROUGHT ABOUT BY THE GOVERNMENT AS TO THE SCOPE OF THE WORK. IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE ACCEPTANCE OF THE BID DID NOT RESULT IN A VALID AND BINDING CONTRACT AND THAT AN ADJUSTMENT SHOULD BE MADE IN THE CONTRACT PRICE.

KING'S REQUEST FOR AN INCREASE IN THE CONTRACT PRICE, WHICH WILL NOT DISPLACE THE NEXT LOW BIDDER, TOTALS $1,340, CONSISTING OF $85 FOR MATERIALS AND $1,255 FOR LABOR. AN INCREASE IN THE CONTRACT PRICE BY THAT AMOUNT IS PERMISSIBLE IF YOUR CONTRACT AND AUDIT OFFICIALS CONCLUDE THAT IT REPRESENTS REASONABLE COMPENSATION FOR THE SERVICES RENDERED IN THE NORTH PORTION OF BUILDING "W." SEE 48 COMP. GEN. 672, 676 (1969), AND B- 173454, JULY 27, 1971.