B-179204, MAY 24, 1974

B-179204: May 24, 1974

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IS NOT FOR APPLICATION SINCE CONTRACTOR'S CLAIM FOR BID CORRECTION WAS CONSIDERED AND DENIED BY AGENCY PRIOR TO AWARD AND CONTRACTOR NEVERTHELESS AGREED TO ENTER INTO CONTRACT AT BID PRICE SUBJECT ONLY TO STIPULATION THAT GAO WOULD CONSIDER CONTRACTOR'S CLAIM FOR A PRICE INCREASE DUE TO BID MISTAKE. 2. F08621-73-B-0035 WAS ISSUED BY THE DEPARTMENT OF THE AIR FORCE FOR THE CONSTRUCTION OF A CONFERENCE AND VISITING OFFICES QUARTERS (VOQ) FACILITIES AT HOMESTEAD AIR FORCE BASE. F08621-73-B-0009 WAS ISSUED FOR THIS PROJECT. THE FOLLOWING BIDS WERE OPENED: BASIC ALTERNATES TOTAL A. THAT THERE WAS CLEAR AND CONVINCING EVIDENCE OF A MISTAKE IN BID. IT IS THE INTENT OF THE PARTIES THAT THE CONTRACTOR SHALL NOT BE FORECLOSED FROM SUCH LEGAL REMEDIES FOR MONETARY RELIEF AS MAY EXIST FOLLOWING AWARD IN CONNECTION WITH MISTAKE IN BID CLAIMS.".

B-179204, MAY 24, 1974

1. COURT HOLDING IN CHRIS BERG, INC. V. UNITED STATES, 192 CT. CL. 196 (1970), WHERE AGENCY REFUSED TO CONSIDER CONTRACTOR'S CLAIM FOR BID CORRECTION PRIOR TO AWARD, IS NOT FOR APPLICATION SINCE CONTRACTOR'S CLAIM FOR BID CORRECTION WAS CONSIDERED AND DENIED BY AGENCY PRIOR TO AWARD AND CONTRACTOR NEVERTHELESS AGREED TO ENTER INTO CONTRACT AT BID PRICE SUBJECT ONLY TO STIPULATION THAT GAO WOULD CONSIDER CONTRACTOR'S CLAIM FOR A PRICE INCREASE DUE TO BID MISTAKE. 2. CONTRACTOR'S CLAIM FOR BID CORRECTION BASED ON EVIDENCE OF OMITTED SUBCONTRACTOR QUOTE DENIED, SINCE CONTRACTOR'S BID RECAPITULATION SHEET SHOWED DISCREPANCIES IN ESTIMATING ITEM PRICE AND INDICATED GENERAL OVERALL IMPRECISE DEVELOPMENT OF BID PRICE SO THAT AMOUNT OF INTENDED BID COULD NOT BE ASCERTAINED WITH ANY SUBSTANTIAL CERTAINTY.

TO FORTEC CONSTRUCTORS:

ON MARCH 13, 1973, IFB NO. F08621-73-B-0035 WAS ISSUED BY THE DEPARTMENT OF THE AIR FORCE FOR THE CONSTRUCTION OF A CONFERENCE AND VISITING OFFICES QUARTERS (VOQ) FACILITIES AT HOMESTEAD AIR FORCE BASE, FLORIDA. FORTEC SUBMITTED THE ONLY BID, AT $1,280,000 FOR THE BASIC WORK AND $24,000 FOR ADDITION ITEMS. SINCE THE AIR FORCE HAD $868,500 AVAILABLE AT THE TIME, THE AIR FORCE ON MAY 7, 1973, REJECTED THE BID, WITH THE VIEW TOWARD REDESIGN AND ENGINEERING OF THE PROJECT FOR READVERTISEMENT.

ON MAY 14, 1973, IFB NO. F08621-73-B-0009 WAS ISSUED FOR THIS PROJECT, WITH A REVISED SCOPE OF WORK PERFORMANCE PERIOD. ON JUNE 15, 1973, THE FOLLOWING BIDS WERE OPENED:

BASIC ALTERNATES TOTAL

A. FORTEC CONSTRUCTORS $1,197,000 $55,000 $1,252,000

B. STANDARD CONSTRUCTION OF FLA. 1,336,669 88,390 1,425,059

C. BARTLETT CONSTRUCTION 1,376,964 85,227 1,462,191

ON JUNE 18, 1973, PRIOR TO AWARD, FORTEC, THE LOW BIDDER, ADVISED THE HOMESTEAD AFB PROCUREMENT OFFICE OF AN APPARENT MISTAKE IN ITS BID. FORTEC CONFIRMED THIS CLAIM IN A LETTER DATED JUNE 15, 1973, RECEIVED BY THE AIR FORCE ON JUNE 18, 1973, STATING THAT IT HAD INADVERTENTLY OMITTED A SUBCONTRACT PRICE FOR FURNISHING AND ERECTING A PRECAST HOLLOW FLOOR AND ROOF PANELS FOR A TOTAL MISTAKE OF $35,150. IN SUPPORT OF ITS CLAIM FORTEC SUBMITTED WORK SHEETS AND ABSTRACTS OF SUBCONTRACTOR QUOTATIONS INDICATING THE PRICE ON THE PRECAST AS RECEIVED BY TELEPHONE FROM ITS SUPPLIERS. FORTEC REQUESTED PERMISSION TO INCREASE ITS BID PRICE BY $35,150, OR IN THE ALTERNATIVE, TO BE PERMITTED TO WITHDRAW THE BID.

THE CONTRACTING OFFICER FORWARDED ALL MATERIALS TO THE STAFF JUDGE ADVOCATE, HEADQUARTERS, AIR FORCE LOGISTICS COMMAND IN ACCORDANCE WITH ASPR 2-406.3 FOR HIS DETERMINATION. THE STAFF JUDGE ADVOCATE DETERMINED ON JULY 6, 1973, THAT THERE WAS CLEAR AND CONVINCING EVIDENCE OF A MISTAKE IN BID, BUT THAT CLEAR AND CONVINCING EVIDENCE HAD NOT BEEN PRESENTED AS TO THE BID ACTUALLY INTENDED.

FORTEC PROTESTED THIS DETERMINATION TO OUR OFFICE BY LETTER DATED JULY 12, 1973. HOWEVER, FORTEC AGREED WITH THE AIR FORCE TO ENTER INTO THE SUBJECT CONTRACT. ACCORDINGLY, ON JULY 23, FORTEC CONTRACTED WITH THE AIR FORCE FOR THE CONSTRUCTION OF THE FACILITY SUBJECT TO THE FOLLOWING STIPULATION:

"THE GOVERNMENT AND THE CONTRACTOR AGREE THAT IN THE EVENT THE COMPTROLLER GENERAL FAVORABLY CONSIDERS THE CONTRACTOR'S CLAIM FOR AN UPWARD REVISION OF THE CONTRACT PRICE DUE TO AN ALLEGED MISTAKE IN BID, THE CONTRACT PRICE SHALL BE ADJUSTED IN THE AMOUNT RECOMMENDED BY THE COMPTROLLER GENERAL. THE CONTRACTOR, BY ACCEPTING AWARD PENDING DETERMINATION OF HIS CLAIM BY THE COMPTROLLER GENERAL, EXPRESSLY WAIVES HIS RIGHTS TO WITHDRAW HIS BID, TO DISAFFIRM THE CONTRACT, OR TO TERMINATE PERFORMANCE DUE TO DENIAL OF HIS CLAIM BY THE COMPTROLLER GENERAL, AND AGREES TO PERFORM THE CONTRACT. IT IS THE INTENT OF THE PARTIES THAT THE CONTRACTOR SHALL NOT BE FORECLOSED FROM SUCH LEGAL REMEDIES FOR MONETARY RELIEF AS MAY EXIST FOLLOWING AWARD IN CONNECTION WITH MISTAKE IN BID CLAIMS."

FORTEC NOW ARGUES THAT THE HOLDING IN CHRIS BERG INC. V. UNITED STATES, 192 CT. CL. 176 (1970), "NULLIFIES THE DECISION BY THE STAFF JUDGE ADVOCATE *** THAT THERE WAS NO CLEAR AND CONVINCING EVIDENCE OF THE INTENDED BID." IT IS FORTEC'S POSITION THAT SINCE THE AIR FORCE ENTERED INTO THE CONTRACT WITH THAT FIRM WITH THE KNOWLEDGE THAT A MISTAKE IN BID EXISTED, FORTEC IS ENTITLED TO CONTRACT REFORMATION NOTWITHSTANDING THE AIR FORCE'S REFUSAL TO ALLOW AN UPWARD REVISION IN ITS BID BASED ON THE MISTAKE ALLEGED BEFORE AWARD.

WE DO NOT BELIEVE THAT CHRIS BERG, SUPRA, IS APPLICABLE TO THE INSTANT CASE. IN THAT CASE A BIDDER CLAIMED A MISTAKE IN BID AND REQUESTED THAT ITS BID PRICE BE INCREASED. APPARENTLY, THE AGENCY REFUSED TO CONSIDER THE BIDDER'S CLAIM FOR CORRECTION AND THE BIDDER ENTERED INTO THE CONTRACT AT ITS ORIGINAL BID PRICE, RESERVING ITS RIGHT TO REQUEST CORRECTION AFTER AWARD. THE COURT CONCLUDED THAT THE AGENCY, BY REFUSING TO CONSIDER THE CONTRACTOR'S EVIDENCE SUPPORTING ITS ALLEGED INTENDED BID PRICE, VIOLATED ASPR 2-406.3. THE COURT ALLOWED REFORMATION OF THE CONTRACT BECAUSE IN ITS VIEW THE CONTRACT WAS ISSUED IN "VIOLATION OF THE LAW." THE AIR FORCE HAS COMMITTED NO SUCH VIOLATION IN THE CASE AT HAND, SINCE FORTEC'S CLAIM OF MISTAKE WAS CONSIDERED AND DENIED BY THE AIR FORCE IN ACCORDANCE WITH THE APPLICABLE REGULATIONS.

GENERALLY, ACCEPTANCE OF A BID BY THE GOVERNMENT WITH ACTUAL OR CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID DOES NOT CREATE A BINDING CONTRACT AND, THEREFORE, THE CONTRACT MAY PROPERLY BE SUBJECT TO REFORMATION. 49 COMP. GEN. 446 (1970). HOWEVER, IN THE INSTANT CASE THE AIR FORCE'S REJECTION OF FORTEC'S MISTAKE CLAIM WAS THE SUBJECT OF A PROTEST FILED BY THAT FIRM WITH THIS OFFICE PRIOR TO THE AWARD OF THE SUBJECT CONTRACT. NOTWITHSTANDING ITS PENDING PROTEST, FORTEC AGREED TO ACCEPT A CONTRACT AT ITS UNCORRECTED BID PRICE SUBJECT ONLY TO HAVING ITS CLAIM FOR UPWARD REVISION IN THE CONTRACT PRICE CONSIDERED BY THIS OFFICE. ACCORDING TO THE AIR FORCE, THE CONTRACT STIPULATION WAS INTENDED TO GIVE FORTEC "NO MORE THAN IT ALREADY HAD, AND EVEN THOUGH IT AGREED TO PERFORM UNDER THE CONTRACT REGARDLESS OF THE COMPTROLLER GENERAL'S RULING, THE CONTRACT WAS STILL THEIRS WITH THE POSSIBILITY OF A PRICE INCREASE SHOULD THE COMPTROLLER GENERAL RULE FAVORABLY. IT WAS A MATTER OF BUSINESS JUDGMENT." IN THE CIRCUMSTANCES WE MUST AGREE WITH THE AIR FORCE'S ANALYSIS AS TO THE INTENT OF THE CONTRACT STIPULATION. THEREFORE, IT IS OUR VIEW THAT THE STIPULATION ONLY PRESERVES FORTEC'S RIGHT TO HAVE THIS OFFICE REVIEW THE AIR FORCE DETERMINATION NOT TO ALLOW BID CORRECTION. 49 COMP. GEN. 446, SUPRA.

WHERE A BIDDER REQUESTS PERMISSION TO CORRECT A MISTAKE IN HIS BID AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, A DETERMINATION PERMITTING THE BIDDER TO CORRECT THE BID MAY BE MADE. ASPR 2-406.3(A)(3); 51 COMP. GEN. 1 (1971). IN ADDITION, WE HAVE HELD THAT A HIGHER DEGREE OF EVIDENCE IS NECESSARY TO PROVE WHAT AN INTENDED BID WOULD HAVE BEEN AS DISTINGUISHED FROM THE QUANTUM OF EVIDENCE NECESSARY TO PROVE THAT A MISTAKE WAS MADE. 51 COMP. GEN. 1, 3, SUPRA; 52 COMP. GEN. 400 (1972).

IN SUPPORT OF ITS CLAIM, FORTEC HAS SUBMITTED A BID SHEET (A RECAPITULATION OF BASIC BID PRICES), AND PRICES ON THE PRECAST WORK WHICH IT RECEIVED BY TELEPHONE FROM BOTH HOUDAILLE INDUSTRIES ($35,150 FOR CONCRETE SLABS), AND PONCE PRE-CAST ($30,700 FOR PRECAST). FORTEC STATES THAT IN TRANSCRIBING THESE PRICES TO LINE 11 OF THE BID SHEET IT ONLY INCLUDED THE PRECAST PRICE FROM PONCE AND ALLEGES THAT IT OMITTED THE PRICE SUBMITTED BY HOUDAILLE. FORTEC CONTENDS THAT IT HAS PROVIDED CLEAR AND CONVINCING EVIDENCE THAT ITS ORIGINAL BID PRICE CONTAINED A MISTAKE IN THE AMOUNT OF $35,150, THE TOTAL AMOUNT OF THE CONCRETE SLAB QUOTATION PLUS "MARKUP" OF 10 PERCENT, OR $3,515.

IN REVIEWING THE EVIDENCE OF MISTAKE THE AIR FORCE JUDGE ADVOCATE FOUND THAT OF THE COST ITEMS SET FORTH ON THE BIDDER'S BID SHEET (CONSISTING OF 31 ITEMS), SOME ITEMS WERE SUPPORTED BY WORK SHEETS AND/OR TELEPHONE QUOTATIONS AND SOME BY WRITTEN QUOTATIONS. HOWEVER, FOR SOME ITEMS THERE WAS NO SUPPORT OR ONLY PARTIAL SUPPORT AND IT WAS ASCERTAINED THAT IN A FEW INSTANCES THE BIDDER'S PURPORTED TELEPHONE QUOTATIONS WERE MODIFIED ON THE BID SHEET. (FORTEC HAS EXPLAINED THAT IT BELIEVED IT COULD NEGOTIATE THESE PRICES AND HAD INSERTED WHAT IT CONSIDERED TO BE THE CORRECT PRICE). THE BID SHEET ALSO SHOWED EVIDENCE OF ERASURES AND WAS DATED SUBSTANTIALLY PRIOR TO THE CURRENT IFB. IN THIS CONNECTION, THE AIR FORCE JUDGE ADVOCATE CONCLUDED THAT "IN ALL PROBABILITY (THE BID SHEET) WAS PREPARED IN SUPPORT OF THE PRIOR IFB WHICH WAS CANCELLED."

FURTHER, THE JUDGE ADVOCATE ALSO NOTICED IN REVIEWING THE COST ITEMS THAT THE PRECAST WORK WAS INCLUDED IN THE BID SHEET AT A PRICE OF $30,000, ALTHOUGH THE BIDDER'S RECORDS SHOW A QUOTATION OF $30,700 FROM PONCE. ALSO, THE BID SHEET CONTAINED AN AMOUNT OF $10,000 FOR ITEMS 24 AND 25, LISTED AS TOPSOIL, LANDSCAPING AND SHRUBS. THE WORK PAPERS SHOW WRITTEN BIDS TOTALLING $35,954 FOR THESE ITEMS. IN EXPLAINING THIS DISCREPANCY, FORTEC STATED THAT THE $10,000 FIGURE WAS AN ESTIMATE WHICH WAS INCORRECT. ALSO, THE BID SHEET DISCLOSES TWO $1,000 ERRORS IN THE ADDITION OF THE COST OF TWO ITEMS TOGETHER WITH A $100 ERROR AND ONE OF $50.

BASED ON THIS EVIDENCE THE AIR FORCE CONCLUDED THAT WHILE THERE WAS EVIDENCE OF MISTAKE IN BID, BECAUSE OF THE BIDDER'S METHOD OF COMPUTATION, THE MATHEMATICAL ERRORS IN THE COMPUTATION, THE OTHER MISTAKES IN THE BID, AND THE GENERAL OVERALL IMPRECISE DEVELOPMENT OF THE BID, THE AMOUNT OF THE INTENDED BID COULD NOT BE ASCERTAINED WITH ANY SUBSTANTIAL CERTAINTY.

BASED ON THE EVIDENCE OF RECORD IT APPEARS THAT THE CONTRACTOR MAY HAVE OMITTED A PRICE FOR CONCRETE SLABS IN COMPUTING ITS BID. HOWEVER, WE AGREE WITH THE AGENCY'S POSITION THAT THERE IS SUBSTANTIAL DOUBT AS TO THE INTENDED BID. WE ARE UNABLE TO CONCLUDE THAT THE EVIDENCE WHICH FORTEC HAS SUBMITTED IS SUFFICIENT TO MEET THE HIGH STANDARD OF PROOF NECESSARY TO SUSTAIN A CLAIM FOR BID CORRECTION. 51 COMP. GEN. 1, SUPRA. THEREFORE, THE CLAIM MUST BE DENIED.