B-174764, MAY 24, 1972

B-174764: May 24, 1972

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SUBCONTRACTORS - SETTLEMENT OF CLAIMS - MISTAKE IN BID DECISION REGARDING THE CLAIM FILED ON BEHALF OF ANNING-JOHNSON COMPANY FOR RELIEF FROM AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID FOR A SUBCONTRACT FOR CONSTRUCTION ON THE JOHN F. THERE IS NO BASIS FOR THE GOVERNMENT SETTLING THE CLAIMS OF SUBCONTRACTORS. SINCE GOVERNMENT REPRESENTATIVES WERE PARTIES TO THE VERIFICATION AND APPROVAL OF THE SUBCONTRACT BID. SINCE ANNING- JOHNSON WAS NOT NOTIFIED OF THE BASIS UPON WHICH AN ERROR IN BID WAS SUSPECTED. KREGER: REFERENCE IS MADE TO LETTER OF MARCH 3. REPORTING ON THE CLAIM THE ATTORNEYS FOR THE ANNING-JOHNSON COMPANY HAVE FILED FOR RELIEF FROM AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID FOR A SUBCONTRACT FOR CONSTRUCTION ON THE JOHN F.

B-174764, MAY 24, 1972

SUBCONTRACTORS - SETTLEMENT OF CLAIMS - MISTAKE IN BID DECISION REGARDING THE CLAIM FILED ON BEHALF OF ANNING-JOHNSON COMPANY FOR RELIEF FROM AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID FOR A SUBCONTRACT FOR CONSTRUCTION ON THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS. ORDINARILY, THERE IS NO BASIS FOR THE GOVERNMENT SETTLING THE CLAIMS OF SUBCONTRACTORS. HOWEVER, SINCE GOVERNMENT REPRESENTATIVES WERE PARTIES TO THE VERIFICATION AND APPROVAL OF THE SUBCONTRACT BID, AND SINCE ANNING- JOHNSON WAS NOT NOTIFIED OF THE BASIS UPON WHICH AN ERROR IN BID WAS SUSPECTED, A SETTLEMENT OF THIS CLAIM CAN BE MADE.

TO MR. RODERICK F. KREGER:

REFERENCE IS MADE TO LETTER OF MARCH 3, 1972, FROM YOUR GENERAL COUNSEL, REPORTING ON THE CLAIM THE ATTORNEYS FOR THE ANNING-JOHNSON COMPANY HAVE FILED FOR RELIEF FROM AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID FOR A SUBCONTRACT FOR CONSTRUCTION ON THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS.

ON AUGUST 18, 1966, GSA AWARDED COST-PLUS-FIXED-FEE CONTRACT GS-03B 14840 TO JOHN MCSHAIN, INC., FOR CONCRETE, FORM WORK, AND CEMENT FINISHING ON THE KENNEDY CENTER. ON JUNE 8, 1967, MCSHAIN AND ANNING JOHNSON ENTERED INTO SUBCONTRACT 10 FOR THE INSTALLATION OF CONCRETE PLANKING IN THE SYMPHONY, OPERA AND ROOF TERRACE SECTIONS OF THE KENNEDY CENTER FOR THE AMOUNT OF $49,700. BEFORE THE SUBCONTRACT WAS AWARDED TO ANNING-JOHNSON, ITS BID, THE ONLY ONE RECEIVED, WAS REVIEWED BY A SUBCONTRACT REVIEW COMMITTEE COMPOSED OF REPRESENTATIVES FROM GSA AND JOHN MCSHAIN. THE SUBCONTRACT REVIEW COMMITTEE PRESIDED OVER BY THE GSA PROJECT MANAGER WAS RESPONSIBLE FOR MAKING RECOMMENDATIONS ON AWARD OF ALL SUBCONTRACTS FOR THE KENNEDY CENTER. THE COMMITTEE SUSPECTED THE POSSIBILITY OF AN ERROR IN THE ANNING-JOHNSON BID AND MET WITH A REPRESENTATIVE OF THE COMPANY TO VERIFY THE BID. THE COMPANY REPRESENTATIVE STATED THAT THE BID WAS BASED UPON AN ESTIMATE THAT 40,000 SQUARE FEET OF CONCRETE PLANKING WOULD BE REQUIRED. HOWEVER, ALTHOUGH THIS WAS 5,000 SQUARE FEET LESS THAN THE ESTIMATE THAT MCSHAIN HAD PRESENTED TO THE COMMITTEE, NO MENTION OF THIS WAS MADE TO THE ANNING-JOHNSON REPRESENTATIVE AND THE COMMITTEE RECOMMENDED THAT THE SUBCONTRACT BE AWARDED TO ANNING-JOHNSON AT THE BID PRICE.

SINCE OUR OFFICE HAS HELD THAT A REQUEST FOR VERIFICATION OF A BID SHOULD PLACE THE BIDDER ON NOTICE AS TO THE BASIS UPON WHICH AN ERROR IN BID IS SUSPECTED, 35 COMP. GEN. 136 (1955), AND THE SUBCONTRACT REVIEW COMMITTEE DID NOT SO NOTIFY ANNING-JOHNSON, YOUR GENERAL COUNSEL RECOMMENDS THAT RELIEF BE ACCORDED TO THE SUBCONTRACTOR AND THAT GSA UNDERTAKE DISCUSSIONS WITH THE SUBCONTRACTOR IN ORDER TO ARRIVE AT A FAIR SETTLEMENT OF THE CLAIM.

ORDINARILY, THERE IS NO BASIS FOR THE GOVERNMENT SETTLING THE CLAIMS OF SUBCONTRACTORS. HOWEVER, IN THIS CASE, THE PRIME CONTRACT WAS A COST-PLUS CONTRACT AND, ALTHOUGH THE SUBCONTRACT WAS BETWEEN THE PRIME AND THE SUBCONTRACTOR, GOVERNMENT REPRESENTATIVES WERE PARTIES TO THE VERIFICATION AND APPROVAL OF THE SUBCONTRACT BID. IN THE CIRCUMSTANCES, OUR OFFICE CONCURS IN THE RECOMMENDATION OF YOUR GENERAL COUNSEL.

THE ENCLOSURES THAT ACCOMPANIED THE LETTER OF MARCH 3 ARE RETURNED AS REQUESTED.