B-180679, DEC 31, 1974, 54 COMP GEN 545

B-180679, DEC 31, 1974, 54 COMP GEN 545

BIDS - MISTAKES - VERIFICATION - ADEQUACY TOTALITY OF INFORMATION ON RECORD REASONABLY SUPPORTS CONCLUSION, DISPUTED BY BIDDER, THAT CONTRACTING OFFICER, WHO SUSPECTED MISTAKE IN BID, DID REQUEST BIDDER TO VERIFY ITS BID AND THAT BIDDER DID SO; CONTRACTING OFFICER'S FAILURE TO DOCUMENT VERIFICATION REQUEST DOES NOT NECESSITATE FINDING THAT VERIFICATION REQUEST WAS NOT SUFFICIENT. CONTRACTS - MISTAKES - CONTRACTING OFFICER'S ERROR DETECTION DUTY - PRICE RANGE CONTRACTING OFFICER, WHO REASONABLY HAD NO SUSPICION OF SPECIFIC MISTAKE IN BID AND WHO INFORMS BIDDER OF COMPLETE BASIS FOR HIS GENERAL SUSPICION THAT BIDDER MIGHT HAVE MADE MISTAKE, I.E., WIDE DISPARITY AMONG THREE LUMP -SUM BIDS SUBMITTED, AND REQUESTED AND RECEIVED VERIFICATION FROM BIDDER, HAS FULFILLED ARMED SERVICES PROCUREMENT REGULATION 2-406 VERIFICATION DUTY; VERIFICATION REQUEST REQUIRES NO SPECIAL LANGUAGE AND CONTRACTING OFFICER NEED NOT SPECIFICALLY STATE THAT HE SUSPECTS MISTAKE, SO LONG AS HE APPRISES BIDDER OF MISTAKE WHICH IS SUSPECTED AND BASIS FOR SUCH SUSPICION. BIDS - MISTAKES - VERIFICATION - GOVERNMENT RESPONSIBILITY ALTHOUGH CONTRACTING OFFICER SHOULD DISCLOSE GOVERNMENT ESTIMATE TO BIDDER WHEN REQUESTING BID VERIFICATION, FAILURE TO DISCLOSE SKETCHY, INFORMAL "CONTROL ESTIMATE," PREPARED FOR BUDGETARY PURPOSES ONLY, DOES NOT VIOLATE ARMED SERVICES PROCUREMENT REGULATION 2-406 VERIFICATION REQUIREMENTS. CONTRACTS - MISTAKES - CONTRACTING OFFICER'S ERROR DETECTION DUTY - SUFFICIENCY OF VERIFICATION CONTRACTING OFFICER, WHO SUSPECTED MISTAKE IN LOW BID AND REQUESTED VERIFICATION BUT FAILED TO MENTION UNSUCCESSFUL BIDDER'S DOUBTS THAT LOW BIDDER COULD MEET INVITATION FOR BIDS SPECIFICATIONS, DID NOT CONTRIBUTE TO LOW BIDDER'S FAILURE TO DETECT ITS OMISSION OF SITE INSTALLATION COSTS FROM BID PRICE AND DID NOT VIOLATE ARMED SERVICES PROCUREMENT REGULATION 2 -406 VERIFICATION REQUIREMENTS, SINCE THESE DOUBTS FORMED NO PART OF BASIS FOR CONTRACTING OFFICER'S SUSPICION OF MISTAKE AND DID NOT RELATE TO SITE INSTALLATION COSTS. BIDS - MISTAKES - VERIFICATION - ORAL - REQUEST LOW BIDDER, WHO IS REQUESTED TO VERIFY BID OVER A WEEK PRIOR TO AWARD AFTER BEING INFORMED OF LARGE DISPARITY BETWEEN BIDS RECEIVED, WAS NOT REQUIRED TO GIVE INSUFFICIENT "ON THE SPOT" CONFIRMATION AND HAD SUFFICIENT TIME TO REVIEW BID FOR POSSIBLE MISTAKES. BIDS - MISTAKES - UNCONSCIONABLE TO TAKE ADVANTAGE OF - RULE IN CASE WHERE OTHER BIDS RECEIVED ARE 58 AND 132 PERCENT, RESPECTIVELY, ABOVE LOW BID, AWARD TO LOW BIDDER AFTER ASKING FOR AND RECEIVING VERIFICATION IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION 2- 406 IS NOT UNCONSCIONABLE, SINCE MISTAKE IS NOT SO GREAT THAT GOVERNMENT CAN BE SAID TO BE "OBVIOUSLY GETTING SOMETHING FOR NOTHING." MATTER OF YANKEE ENGINEERING COMPANY, INC., B-180573, JUNE 19, 1974, DISTINGUISHED.

IN THE MATTER OF PORTA-KAMP MANUFACTURING COMPANY, INC., DECEMBER 31, 1974:

INVITATION FOR BIDS (IFB) DACA45-73-B-0011 WAS ISSUED ON JULY 17, 1972, BY THE UNITED STATES ARMY CORPS OF ENGINEERS, OMAHA DISTRICT, OMAHA, NEBRASKA, FOR THE FURNISHING AND SITE PLACEMENT OF PORTABLE BUILDINGS AT SIX LOCATIONS. ON THE DATE SET FOR BID OPENING, AUGUST 15, 1972, THREE LUMP-SUM BIDS WERE RECEIVED AS FOLLOWS:

PORTA-KAMP MANUFACTURING CO., INC. (PORTA-KAMP) $719,563

THE ATLANTIC MOBILE CORPORATION (ATLANTIC) 1,136,902

TRANS-WORLD HOUSING, INC 1,670,848

INASMUCH AS THE SECOND AND THIRD LOW BIDS WERE 58 PERCENT AND 132 PERCENT, RESPECTIVELY, IN EXCESS OF THE LOW BID, THE ARMY SUSPECTED A MISTAKE IN THE PORTA-KAMP BID AND CONCLUDED THAT ITS BID WOULD HAVE TO BE VERIFIED BEFORE AWARD.

IN A SWORN AFFIDAVIT, THE THEN CHIEF OF THE PROCUREMENT SUPPLY DIVISION OF THE OMAHA DISTRICT, MR. GLEN M. LANGFORD, HAS GIVEN HIS RECOLLECTION OF A TELEPHONE CONVERSATION WITH MR. RUSSELL BRIENT, VICE PRESIDENT OF PORTA- KAMP, ON THE DAY FOLLOWING BID OPENING:

IN VIEW OF THE PRICE RANGE OF THE BIDS SUBMITTED AND PURSUANT TO APPLICABLE REGULATIONS, I DEEMED IT NECESSARY TO CONTACT THE LOW BIDDER TO ASSURE THAT IT WAS AWARE OF THE AMOUNTS OF THE OTHER BIDS SUBMITTED AND REQUEST THAT ITS BID BE VERIFIED. BEFORE I HAD AN OPPORTUNITY TO DO SO, HOWEVER, I RECEIVED A TELEPHONE CALL AT APPROXIMATELY 8:50 A.M. ON 16 AUGUST 1972 FROM MR. RUSSELL BRIENT, VICE-PRESIDENT OF PORTA-KAMP MANUFACTURING COMPANY, INC., THE SIGNER OF THE BID SUBMITTED BY PORTA KAMP. HE STATED THAT HE UNDERSTOOD THAT THEIR FIRM WAS THE APPARENT LOW BIDDER AND ASKED IF I KNEW WHEN AWARD WOULD BE MADE. I TOLD HIM THAT I DID NOT KNOW THE EXACT DATE BUT THAT IT WOULD BE WITH THE LEAST POSSIBLE DELAY BECAUSE OF THE SITE READINESS SCHEDULES. I THEN ADVISED HIM OF THE AMOUNT OF THE OTHER BIDS SUBMITTED AND ASKED HIM IF HE WOULD VERIFY HIS BID AND WHETHER HE HAD ANY EXCEPTION TO THE SPECIFICATIONS. HE STATED THAT HE WAS SATISFIED WITH HIS BID AS SUBMITTED, THAT HE TOOK NO EXCEPTION TO THE SPECIFICATIONS AND THAT THE WORK WOULD BE PERFORMED AS SPECIFIED. IMMEDIATELY FOLLOWING THAT CONVERSATION I THEN PREPARED A HANDWRITTEN MEMO SETTING FORTH THE GIST OF THE CONVERSATION ***.

MR. LANGFORD'S CONTEMPORANEOUS HANDWRITTEN MEMO SUPPORTS HIS RECOLLECTION OF THE TELEPHONE CONVERSATION.

MR. BRIENT HAS CONTRADICTED IN SEVERAL RESPECTS MR. LANGFORD'S RECOLLECTION OF THEIR TELEPHONE CONVERSATION IN HIS SWORN AFFIDAVIT GIVING HIS RECOLLECTION OF THE FACTS AS FOLLOWS:

ON AUGUST 16, 1972, ONE DAY AFTER THE BID OPENING ON THE OMAHA CONTRACT, I TELEPHONED THE CORPS OF ENGINEERS IN OMAHA TO CHECK ON THE RESULTS OF OUR BID. I TALKED WITH MR. R.C. BERGER WHO TOLD ME THERE WERE ONLY THREE BIDDERS AND THAT PORTA-KAMP WAS LOW. HE GAVE ME THE BIDDERS AND THEIR BIDS AS FOLLOWS:

PORTA-KAMP $719,563

ATLANTIC MOBILE 1,136,902

TRANS-WORLD HOUSING 1,670,848

MR. BERGER SAID THAT ANY FURTHER DEALINGS WOULD HAVE TO BE THROUGH PROCUREMENT AND HE GAVE ME THE NAME OF MR. GLEN LANGFORD, CHIEF OF PROCUREMENT, AND MR. IRVING HOLTZ, ASSISTANT CHIEF OF PROCUREMENT.

ON THE SAME DAY, I TELEPHONED MR. LANGFORD AND TOLD MR. LANGFORD THAT IT APPEARED PORTA-KAMP WAS THE LOW BIDDER. I ASKED IF WE COULD EXPECT THE CONTRACT AND HE SAID ALL THAT WAS NEEDED WAS "PAPER MILL APPROVALS" AND WE SHOULD GET THE CONTRACT ANY TIME.

AT NO TIME DID MR. LANGFORD ADVISE ME THAT HE CONSIDERED PORTA-KAMP'S BID TO BE IN ERROR. NEITHER HE NOR MR. BERGER INFORMED ME OF THE GOVERNMENT'S ESTIMATE. HE DID NOT ASK ME TO VERIFY PORTA-KAMP'S BID. HAD HE INDICATED THAT THERE WAS A POSSIBLE MISTAKE AND ASKED ME TO VERIFY THE BID, I WOULD HAVE TAKEN SOME TIME AND GONE BACK AND CHECKED OUR BID.

MR. BRIENT ALSO MADE A CONTEMPORANEOUS CONTACT REPORT MEMO WHICH CONTAINS NO INDICATION THAT VERIFICATION WAS EITHER REQUESTED OR GIVEN.

ON AUGUST 24, 1972, AWARD OF CONTRACT NO. DACA45-73-C-0058 IN THE AMOUNT OF $719,563 WAS MADE TO PORTA-KAMP PURSUANT TO THE IFB, WHICH PORTA-KAMP ACKNOWLEDGED BY TELEGRAM OF THAT SAME DATE.

PORTA-KAMP STATES THAT IT NOTICED FOR THE FIRST TIME ON SEPTEMBER 7, 1972, THAT IT HAD OMITTED THE COST OF SITE INSTALLATION OF THE PORTABLE BUILDINGS FROM ITS BID PRICE. PORTA-KAMP NOTIFIED THE ARMY OF THIS MISTAKE IN ITS BID ON SEPTEMBER 12, 1972.

PORTA-KAMP EXPLAINS THAT ALTHOUGH IT HAS BEEN FABRICATING PORTABLE BUILDINGS FOR OVER 15 YEARS, IT NEVER BEFORE HAD TO PERFORM OR PRICE SITE INSTALLATION WORK. CONSEQUENTLY, IT HIRED A CONSULTANT WHO PREPARED SEVERAL ESTIMATES FOR IT, INCLUDING ONE FOR SITE INSTALLATION COSTS, AND DEPARTED UNTIL WORK UNDER THE CONTRACT WAS SCHEDULED TO START. HOWEVER, PORTA-KAMP PERSONNEL INADVERTENTLY OMITTED THE SITE INSTALLATION COST ESTIMATE FROM THE FINAL BID PRICE. THE ERROR WAS DISCOVERED ONLY WHEN THE CONSULTANT, WHO HAD PREPARED THE ESTIMATE, RETURNED TO WORK ON THE PROJECT.

PORTA-KAMP INITIALLY CLAIMED $111,046 FOR ITS MISTAKE IN BID. THIS CLAIM WAS DENIED BY THE ARMY BECAUSE PORTA-KAMP HAD VERIFIED THE ACCURACY OF ITS BID PRICE AND IT WAS FELT THAT PORTA-KAMP HAD NOT PRESENTED CLEAR AND CONVINCING EVIDENCE OF THE INTENDED BID PRICE. PORTA-KAMP HAS NOW REVISED ITS CLAIM TO $104,798.

WITH REGARD TO MISTAKES ALLEGED AFTER THE AWARD OF A CONTRACT, THE GENERAL RULE IS THAT THE BIDDER MUST BEAR THE CONSEQUENCES OF ITS MISTAKE UNLESS THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF THE MISTAKE AT THE TIME THE BID WAS ACCEPTED. SEE SALIGMAN V. UNITED STATES, 56 F. SUPP. 505 (E.D. PA. 1944); WENDER PRESSES INC. V. UNITED STATES, 170 CT. CL. 483 (1965); 48 COMP. GEN. 672 (1969); MATTER OF TITAN ENVIRONMENTAL CONSTRUCTION SYSTEMS, INC., B-180329, OCTOBER 1, 1974.

IN CASES, SUCH AS THE PRESENT ONE, WHERE THE CONTRACTING OFFICER IS ON NOTICE OF A POSSIBLE MISTAKE IN BID, HE IS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 2-406 (1972 ED.) TO REQUEST FROM THE BIDDER A VERIFICATION OF ITS BID. IN THIS REGARD, ASPR SEC. 2 406.1 (1972 ED.) STATES IN PERTINENT PART:

AFTER THE OPENING OF BIDS, CONTRACTING OFFICERS SHALL EXAMINE ALL BIDS FOR MISTAKES. IN CASES OF APPARENT MISTAKES, AND IN CASES WHERE THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE MAY HAVE BEEN MADE, HE SHALL REQUEST FROM THE BIDDER A VERIFICATION OF THE BID, CALLING ATTENTION TO THE SUSPECTED MISTAKE. ***.

ALSO, ASPR SEC. 2-406.3(E)(1) (1972 ED.) STATES IN PERTINENT PART:

*** IN THE CASE OF ANY SUSPECTED MISTAKE IN BID, THE CONTRACTING OFFICER WILL IMMEDIATELY CONTACT THE BIDDER IN QUESTION CALLING ATTENTION TO THE SUSPECTED MISTAKE, AND REQUEST VERIFICATION OF HIS BID. THE ACTION TAKEN TO VERIFY BIDS MUST BE SUFFICIENT TO EITHER REASONABLY ASSURE THE CONTRACTING OFFICER THAT THE BID AS CONFIRMED IS WITHOUT ERROR OR ELICIT THE ANTICIPATED ALLEGATION OF A MISTAKE BY THE BIDDER. TO INSURE THAT THE BIDDER CONCERNED WILL BE PUT ON NOTICE OF A MISTAKE SUSPECTED BY THE CONTRACTING OFFICER, THE BIDDER SHOULD BE ADVISED, AS IS APPROPRIATE, OF (I) THE FACT THAT HIS BID IS SO MUCH LOWER THAN THE OTHER BID OR BIDS AS TO INDICATE A POSSIBILITY OF ERROR, (II) IMPORTANT OR UNUSUAL CHARACTERISTICS OF THE SPECIFICATIONS, (III) CHANGES IN REQUIREMENTS FROM PREVIOUS PURCHASES OF A SIMILAR ITEM, OR (IV) SUCH OTHER DATA PROPER FOR DISCLOSURE TO THE BIDDER AS WILL GIVE HIM NOTICE OF THE SUSPECTED MISTAKE. IF THE BID IS VERIFIED, THE CONTRACTING OFFICER WILL CONSIDER THE BID AS ORIGINALLY SUBMITTED ***.

AS INDICATED IN ASPR SEC. 2-406.3(E)(1) (1972 ED.), WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY ITS BID, GENERALLY THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE ALABAMA SHIRT & TROUSER CO. V. UNITED STATES, 121 CT. CL. 313 (1952); 37 COMP. GEN. 786 (1958); MATTER OF GENERAL TIME CORPORATION, B-180613, JULY 5, 1974. IT IS EQUALLY WELL SETTLED THAT IN CASES WHERE A CONTRACTING OFFICER IS ON NOTICE OF A MISTAKE BUT FAILS TO ASK FOR VERIFICATION BY THE BIDDER, NO VALID CONTRACT COMES INTO EXISTENCE. SEE 48 COMP. GEN., SUPRA; MATTER OF MEMPHIS EQUIPMENT COMPANY, B 181884, AUGUST 15, 1974. MOREOVER, A CONTRACTING OFFICER CANNOT DISCHARGE HIS VERIFICATION DUTY UNDER ASPR SEC. 2-406 (1972 ED.) MERELY BY REQUESTING CONFIRMATION OF THE BID PRICE - HE MUST APPRISE THE BIDDER OF THE MISTAKE WHICH IS SUSPECTED AND THE BASIS FOR SUCH SUSPICION. SEE UNITED STATES V METRO NOVELTY MANUFACTURING CO., 125 F. SUPP. 713 (S.D.N.Y. 1954); 44 COMP. GEN. 383, 386 (1965); B-167954, OCTOBER 14, 1969; B-168607, JANUARY 14, 1970.

AS NOTED ABOVE, THERE IS A CONFLICT IN THE RECORD REGARDING THE TELEPHONE CONVERSATION BETWEEN MR. LANGFORD AND MR. BRIENT, AND WHETHER PORTA-KAMP WAS ASKED TO AND DID VERIFY ITS BID. PORTA-KAMP CONTENDS THAT SINCE THE BURDEN OF REQUESTING VERIFICATION IS ON THE CONTRACTING OFFICER, THE ARMY'S FAILURE TO DOCUMENT THE RECORD AS TO THE SPECIFICS OF THE ALLEGED REQUEST FOR VERIFICATION SHOULD WEIGH HEAVILY AGAINST THE GOVERNMENT, IN VIEW OF THE CONFLICTING AFFIDAVITS. HOWEVER, THERE IS NO REQUIREMENT IN ASPR SEC. 2-406 (1972 ED.) THAT THE REQUEST FOR VERIFICATION BE IN WRITTEN FORM OR THAT IT BE DOCUMENTED. CONSEQUENTLY, WE DO NOT BELIEVE THAT THE CONTRACTING OFFICER'S FAILURE TO DOCUMENT HIS VERIFICATION REQUEST IN THE RECORD SHOULD NECESSITATE A FINDING THAT THE REQUEST FOR VERIFICATION WAS NOT SUFFICIENT IN CASES WHERE THE AGENCY AND THE BIDDER, WHO MADE THE MISTAKE IN BID, DISAGREE ON WHETHER A VERIFICATION WAS REQUESTED AND GIVEN.

IN ANY CASE, WE HAVE REVIEWED THE EVIDENCE ON RECORD IN THE PRESENT CASE AND BELIEVE THE TOTALITY OF INFORMATION ON THIS MATTER MORE REASONABLY SUPPORTS THE CONCLUSION THAT MR. LANGFORD REQUESTED MR. BRIENT TO VERIFY PORTA-KAMP'S BID PRICE AND THAT MR. BRIENT DID SO. THE QUESTION REMAINS, HOWEVER, WHETHER MR. LANGFORD'S REQUEST FOR VERIFICATION ADEQUATELY DISCHARGED HIS DUTY OF APPRISING PORTA-KAMP OF THE MISTAKE SUSPECTED AND THE BASIS FOR SUCH SUSPICION.

PORTA-KAMP CONTENDS THAT THE CONTRACTING OFFICER MUST TELL THE BIDDER, WHOSE BID IS SUSPECT, NOT ONLY OF THE MISTAKE SUSPECTED AND THE BASIS FOR SUCH SUSPICION, BUT ALSO HE SHOULD SPECIFICALLY STATE THE REASON HE IS REQUESTING VERIFICATION, I.E., THAT HE SUSPECTS A MISTAKE IN THE BIDDER'S BID. WE HAVE FOUND NO INDICATION THAT MR. LANGFORD MADE ANY STATEMENTS REGARDING THE SPECIFIC REASON VERIFICATION WAS BEING REQUESTED, BUT RATHER, FROM HIS OWN ACCOUNT, IT APPEARS HE MERELY STATED THE AMOUNTS OF THE BIDS RECEIVED AND ASKED MR. BRIENT IF HE WOULD VERIFY PORTA-KAMP'S BID AND WHETHER PORTA-KAMP WAS GOING TO TAKE ANY EXCEPTION TO THE SPECIFICATIONS.

WE DO NOT BELIEVE THE CONTRACTING OFFICER IS REQUIRED BY ASPR SEC. 2 406 (1972 ED.) TO SPECIFICALLY STATE THAT HE SUSPECTS A MISTAKE, SO LONG AS HE APPRISES THE BIDDER OF THE MISTAKE WHICH IS SUSPECTED AND THE BASIS FOR SUCH SUSPICION. SEE 47 COMP. GEN. 616 (1968); B-169188, JUNE 11, 1970. VERIFICATION REQUEST REQUIRES NO SPECIAL LANGUAGE. 47 COMP. GEN., SUPRA; B-165273, JANUARY 15, 1969; B-166191 ET AL, MARCH 26, 1970; B-169188, SUPRA.

WE BELIEVE THE VERIFICATION BY THE GOVERNMENT SUBSTANTIALLY COMPLIES WITH ASPR SEC. 2-406 (1972 ED.). ACCORDING TO MR. LANGFORD'S STATEMENT, HE ADVISED PORTA-KAMP OF THE BID PRICES - THE WIDE DISCREPANCY WAS OBVIOUS - AND REQUESTED VERIFICATION OF ITS BID PRICE. FROM OUR REVIEW OF THE RECORD, WE BELIEVE MR. LANGFORD DISCLOSED HIS COMPLETE BASIS FOR SUSPECTING THAT PORTA-KAMP MIGHT HAVE MADE A MISTAKE IN ITS BID, I.E., THE WIDE DISPARITY BETWEEN THE THREE LUMP-SUM BIDS RECEIVED. NO "MAGIC WORDS" ARE REQUIRED FOR PROPER VERIFICATION. THE WIDE DISPARITY BETWEEN THE BID PRICES, TOGETHER WITH MR. LANGFORD'S VERIFICATION REQUEST AND INQUIRY CONCERNING PORTA-KAMP'S INTENT TO COMPLY WITH THE SPECIFICATIONS, SHOULD HAVE REASONABLY APPRISED PORTA KAMP THAT A MISTAKE WAS SUSPECTED. SEE 47 COMP. GEN., SUPRA. PORTA KAMP HAD AMPLE TIME IN THE PERIOD (MORE THAN A WEEK) BEFORE AWARD WAS MADE TO THOROUGHLY CHECK ITS FIGURES.

PORTA-KAMP FURTHER CONTENDS THE ARMY DID NOT DISCLOSE ALL PERTINENT FACTS, WHICH WOULD HAVE APPRISED PORTA-KAMP OF THE MISTAKE, IN THAT IT DID NOT DISCLOSE THE AMOUNT OF THE GOVERNMENT ESTIMATE FOR THE CONTRACT. HOWEVER, THE ARMY STATES THAT ITS ESTIMATE IN THE AMOUNT OF $975,540 WAS MERELY A "CONTROL ESTIMATE" FOR BUDGETARY PURPOSES ONLY. THIS ESTIMATE WAS INFORMAL, VERY SKETCHY, HANDWRITTEN, UNSIGNED AND HAD NO BACKUP SHEETS. ALSO, THE ESTIMATE INCLUDED A 10-PERCENT MARKUP FOR THE ARMY'S CONTINGENCIES UNDER THE CONTRACT AND 5-PERCENT FOR THE ARMY'S SUPERVISION AND ADMINISTRATION EXPENSES UNDER THE CONTRACT. THE ESTIMATE, AFTER SUBTRACTING OUT THE ANTICIPATED ADMINISTRATION COSTS, WOULD BE $844,620, WHICH THE ARMY FEELS IS AT BEST A "BALL PARK" FIGURE FOR BID COMPARISON PURPOSES. THE FACTS CONCERNING THE PREPARATION OF THIS ESTIMATE ARE SUPPORTED BY A SWORN AFFIDAVIT OF THE CHIEF OF ESTIMATING SECTION, DESIGN BRANCH, ENGINEERING DIVISION, OMAHA DISTRICT, WHO DIRECTED ITS PREPARATION. ORDINARILY, A CONTRACTING OFFICER SHOULD DISCLOSE THE GOVERNMENT ESTIMATE AS PART OF HIS BID VERIFICATION DUTY. SEE 48 COMP. GEN. SUPRA; B-177405, NOVEMBER 29, 1972. AND, GOVERNMENT ESTIMATES SHOULD NOT BE RATIONALIZED AWAY AS EXCESSIVE AFTER AWARD IS MADE BY MERELY EVOLVING A POSSIBLE HYPOTHESIS WHICH MIGHT EXPLAIN A LOWER BID. SEE 48 COMP. GEN. SUPRA; MATTER OF JAMES R. SLOSS, B-180402, FEBRUARY 4, 1974; MATTER OF THE MURPHY ELEVATOR COMPANY, INCORPORATED, B-180607, APRIL 2, 1974. HOWEVER, WE HAVE RECOGNIZED THAT A ROUGH GOVERNMENT ESTIMATE FAR IN EXCESS OF THE LOW BID, WHICH WAS PREPARED FOR BUDGETARY PURPOSES ONLY AND WHICH THE GOVERNMENT IN GOOD FAITH DID NOT REGARD AT BID OPENING AS BEING USEFUL FOR BID COMPARISON PURPOSES, DOES NOT NECESSARILY PUT A CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF A POSSIBLE MISTAKE IN BID; NOR NEED IT BE FATAL TO THE FULFILLMENT OF HIS VERIFICATION DUTY WHERE HE DOES NOT DISCLOSE THIS ROUGH ESTIMATE TO THE LOW BIDDER IN WHOSE BID ERROR IS SUSPECTED. SEE 50 COMP. GEN. 39 (1970); B-178078, MAY 18, 1973.

UNDER THE CIRCUMSTANCES OF THE PRESENT CASE, WE DO NOT BELIEVE THE FAILURE TO DISCLOSE THE SKETCHY, INFORMAL "CONTROL ESTIMATE," WHICH WAS INTENDED ONLY FOR BUDGETARY PURPOSES, SHOULD BE FATAL TO THE CONTRACTING OFFICER'S FULFILLMENT OF HIS ASPR SEC. 2-406 (1972 ED.) VERIFICATION DUTY. MOREOVER, WE DO NOT BELIEVE THE CONTRACTING OFFICER SHOULD BE FOUND TO BE DERELICT IN HIS VERIFICATION DUTY BY VIRTUE OF HIS FAILURE TO DISCLOSE A FACT WHICH HE AND THE PROCURING AGENCY REASONABLY AND IN GOOD FAITH REGARDED AS BEING OF NO REAL VALUE TO THE BIDDER IN APPRISING THE BIDDER OF THE AGENCY'S BASIS FOR SUSPECTING AN ERROR IN BID. SEE 50 COMP. GEN. SUPRA. FURTHERMORE, IN VIEW OF THE ROUGHNESS OF THE $844,620 REVISED GOVERNMENT ESTIMATE, WE BELIEVE ITS DISCLOSURE COULD WELL HAVE DETRACTED FROM ANY NOTICE CONCERNING THE PROBABILITY OF AN ERROR RECEIVED BY PORTA- KAMP FROM ITS KNOWLEDGE OF THE WIDE DISPARITY BETWEEN BID PRICES, SINCE THE REVISED ESTIMATE WAS ONLY 17-PERCENT HIGHER THAN PORTA-KAMP'S BID PRICE.

PORTA-KAMP ALSO CONTENDS THAT THE ARMY FAILED IN ITS VERIFICATION DUTY BY NOT INFORMING PORTA-KAMP OF ITS MEETING OF AUGUST 23, 1972, WITH ATLANTIC, THE SECOND LOW BIDDER, IN WHICH ATLANTIC ALLEGEDLY POINTED OUT THAT PORTA- KAMP WAS APPARENTLY MISINTERPRETING THE IFB SPECIFICATIONS. PORTA-KAMP ALLEGES THE CONTENT OF THIS MEETING WAS APPARENTLY SET FORTH IN ATLANTIC'S LETTER TO THE ARMY DATED AUGUST 25, 1972, WHICH SET FORTH ATLANTIC'S VERSION OF HOW THE IFB SPECIFICATIONS SHOULD BE INTERPRETED. PORTA-KAMP STATES THAT IF IT HAD BEEN AWARE OF THESE FACTS, IT WOULD HAVE CAREFULLY REVIEWED ITS BID AND PROBABLY FOUND ITS MISTAKE.

THE ARMY STATES THAT IT HAD NO MEETINGS WITH ATLANTIC PRIOR TO THE AWARD OF THE CONTRACT, BUT RATHER ATLANTIC MADE AN ORAL PROTEST, OVER THE TELEPHONE, WHICH IT LATER WITHDREW, REGARDING PORTA-KAMP'S RESPONSIBILITY AND THE ABILITY OF PORTA-KAMP'S COMMERCIAL MODEL TO MEET THE IFB SPECIFICATIONS. MOREOVER, THE CONTENT OF ATLANTIC'S LETTER, WHICH ADMITS PORTA-KAMP'S BID WAS APPARENTLY VALID, COULD NOT HAVE BEEN COMMUNICATED TO PORTA-KAMP PRIOR TO AWARD SINCE THE ARMY DID NOT RECEIVE IT UNTIL AFTER AWARD. IN ANY CASE, PORTA-KAMP'S SITE INSTALLATION COSTS WERE NOT MENTIONED IN THESE COMMUNICATIONS AND DID NOT FORM ANY PART OF THE BASIS FOR THE CONTRACTING OFFICER'S SUSPICION THAT PORTA-KAMP HAD MADE A MISTAKE. THEREFORE, WE ARE UNABLE TO SEE HOW THE ARMY'S NONDISCLOSURE OF ATLANTIC'S DOUBTS THAT PORTA-KAMP COULD MEET THE IFB SPECIFICATIONS PREJUDICED PORTA-KAMP IN ITS FAILURE PRIOR TO AWARD TO DETECT THE OMISSION OF SITE INSTALLATION COSTS FROM ITS BID PRICE, OR HOW THIS NONDISCLOSURE VIOLATED THE ARMY'S (ASPR SEC. 2-406 (1972 ED.)) BID VERIFICATION DUTY.

PORTA-KAMP ALSO MAKES REFERENCE TO THE STATEMENT MADE BY THE SUCCESSOR CONTRACTING OFFICER IN THE ADMINISTRATIVE REPORT ON THIS CLAIM THAT THE DISPARITY "IS DIFFICULT TO EXPLAIN, OTHER THAN THE FACT THAT SITE PLACEMENT COSTS WERE OMITTED BY THE CONTRACTOR IN ITS BID." PORTA-KAMP CLAIMS PROPER FULFILLMENT OF THE ARMY'S VERIFICATION OBLIGATION REQUIRED DISCLOSURE OF THE SUSPICION THAT THESE COSTS HAD BEEN OMITTED FROM ITS BID PRICE. HOWEVER, THE STATEMENTS OF THE CONTRACTING OFFICER AND OTHER CONTRACTING PERSONNEL IN THIS REGARD, WHICH HAVE BEEN REFERRED TO BY PORTA -KAMP, WERE MADE AFTER AWARD. THERE IS NO INDICATION THAT ANY SUCH SUSPICION ON THE PART OF THE ARMY EXISTED OR REASONABLY SHOULD HAVE EXISTED PRIOR TO THE AWARD OF THE CONTRACT.

PORTA-KAMP ALSO APPARENTLY ALLEGES THAT IT WAS NOT GIVEN SUFFICIENT TIME TO VERIFY ITS BID. WE HAVE FOUND THAT AN "ON THE SPOT" CONFIRMATION, IN WHICH A BIDDER IS NOT GIVEN ENOUGH TIME TO PROPERLY VERIFY ITS BID, IS INSUFFICIENT. SEE B-167954, SUPRA; B-172986, AUGUST 30, 1971; B-173990, DECEMBER 29, 1971. HOWEVER, IN THE PRESENT CASE, THERE IS NO INDICATION THAT MR. BRIENT WAS REQUIRED TO GIVE SUCH AN "ON THE SPOT" CONFIRMATION. AWARD WAS NOT MADE FOR OVER A WEEK AFTER VERIFICATION WAS REQUESTED, SO PORTA-KAMP HAD SUFFICIENT TIME TO CAREFULLY REVIEW ITS BID FOR ANY POSSIBLE MISTAKES. PORTA-KAMP, AN EXPERIENCED GOVERNMENT CONTRACTOR ADMITTEDLY AWARE OF THE WIDE DISPARITY BETWEEN ITS BID AND THE OTHERS RECEIVED, REASONABLY SHOULD HAVE COMPLETELY REVIEWED ITS BID.

PORTA-KAMP HAS CITED VARIOUS AUTHORITIES IN SUPPORT OF ITS POSITION THAT THE CONTRACTING OFFICER FAILED IN HIS VERIFICATION DUTY, PARTICULARLY RELYING UPON B-144252, OCTOBER 20, 1960; B-170691, JANUARY 28, 1971; AND B -177405, SUPRA. HOWEVER, THE FACTS AND CIRCUMSTANCES OF THOSE CASES ARE CLEARLY DISTINGUISHABLE. IN B-144252, SUPRA, THE CONTRACTING OFFICER DID NOT EVEN APPRISE THE LOW BIDDER THAT THERE WAS A LARGE DIFFERENCE BETWEEN THE LOW AND THE NEXT LOW BID. IN B-170691, SUPRA, THE PROCURING AGENCY ADMITTED THAT IT WAS UNAWARE AS TO WHETHER IT HAD DISCLOSED TO THE BIDDER THE BASIS FOR ITS SUSPICION OF A POSSIBLE MISTAKE IN BID. IN B-177405, SUPRA, THE GOVERNMENT NOT ONLY FAILED TO DISCLOSE THE GOVERNMENT ESTIMATE, BUT ALSO FAILED TO EVEN INFORM THE BIDDER THAT ITS BID WAS LOWER THAN THE GOVERNMENT'S ESTIMATED COST OF MATERIALS ALONE.

THESE CASES ARE TO BE CONTRASTED TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, SINCE THE CONTRACTING OFFICER DISCLOSED ALL OF HIS BASES FOR BELIEVING THAT A POSSIBLE MISTAKE IN BID HAD OCCURRED, I.E., THE WIDE DISPARITY BETWEEN THE BIDS RECEIVED UNDER THE IFB, WHEN HE REQUESTED PORTA -KAMP TO VERIFY ITS BID. SEE 37 COMP. GEN., SUPRA; 47 ID., SUPRA; B- 173792, DECEMBER 29, 1971; B-179257, AUGUST 3, 1973; MATTER OF GENERAL TIME CORPORATION, SUPRA.

FINALLY, PORTA-KAMP MAKES REFERENCE TO MATTER OF YANKEE ENGINEERING COMPANY, INC., B-180573, JUNE 19, 1974, WHEREIN WE FOUND THAT RELIEF COULD BE GRANTED UNDER THE CIRCUMSTANCES OF THAT CASE, NOTWITHSTANDING THE VERIFICATION BY THE BIDDER OF ITS EXTREMELY LOW BID, SINCE ACCEPTANCE OF THE BID RESULTED IN AN UNCONSCIONABLY PRICED CONTRACT, SO GROSS THAT IT COULD BE SAID THAT THE GOVERNMENT "WAS OBVIOUSLY GETTING SOMETHING FOR NOTHING." SEE KEMP V. UNITED STATES, 38 F. SUPP. 568 (D. MD. 1941); 45 COMP. GEN. 305 (1965); 53 ID. 187 (1973). HOWEVER, IN YANKEE, THE RECORD SHOWED THAT THE ARMY REALIZED IT WAS ESSENTIALLY "GETTING SOMETHING FOR NOTHING," EVEN AFTER THE VERIFICATION BY THE LOW BIDDER. COMPARE MATTER OF AEROSPACE AMERICA, INC., B-181439, JULY 16, 1974. THERE IS NO SUCH INDICATION HERE. ALSO, SEE B-176517, SEPTEMBER 6, 1972; B-177432, DECEMBER 21, 1972; B-178713, JUNE 6, 1973; MATTER OF AEROSPACE AMERICA, INC., SUPRA. CONTRAST 53 COMP. GEN., SUPRA.

INASMUCH AS WE HAVE FOUND THE ARMY'S VERIFICATION WAS SUFFICIENT AND THE AWARD TO PORTA-KAMP WAS NOT UNCONSCIONABLE, WE NEED NOT DECIDE WHETHER THE EVIDENCE SUBMITTED BY PORTA-KAMP IN SUPPORT OF ITS CLAIM OF MISTAKE WAS CLEAR AND CONVINCING. ACCORDINGLY, PORTA-KAMP'S CLAIM IS DENIED AS ADMINISTRATIVELY RECOMMENDED.