B-182069, JAN 30, 1975

B-182069: Jan 30, 1975

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REQUESTED AND RECEIVED VERIFICATION THAT ORIGINAL LOW BID WAS WITHOUT ERROR (MODIFICATION REFLECTING JUDGMENTAL CHANGE IN PRICING). AWARD WAS PROPERLY MADE TO LOW BIDDER UNDER ASPR GUIDELINES IN PARAGRAPH 2-406 NOTWITHSTANDING NEXT LOW BIDDER'S ALLEGATION THAT PRESENCE OF OPTION REQUIRED PROOF THAT ORIGINAL BID WAS FREE FROM ERROR. DACW38-74-B-0214 WAS ISSUED BY THE CORPS OF ENGINEERS. TWO BIDS WERE TIMELY RECEIVED AND OPENED ON AUGUST 13. 160 WAS SUBMITTED BY THE S.J. A TELEGRAPHIC MODIFICATION OF THE COHEN BID WAS RECEIVED BY THE CONTRACTING OFFICER. BECAUSE THE MODIFICATION WAS RECEIVED AFTER BID OPENING. THE CONTRACTING OFFICER DETERMINED IT WAS NOT FOR CONSIDERATION UNDER PARAGRAPH 7-2002.2 OF THE ARMED SERVICES PROCUREMENT REGULATION (1974 ED.)(ASPR).

B-182069, JAN 30, 1975

WHERE CONTRACTING OFFICER, AFTER RECEIPT OF UNACCEPTABLE LATE BID MODIFICATION INCREASING LOW BID PRICE TO AMOUNT IN EXCESS OF NEXT LOW BID, REQUESTED AND RECEIVED VERIFICATION THAT ORIGINAL LOW BID WAS WITHOUT ERROR (MODIFICATION REFLECTING JUDGMENTAL CHANGE IN PRICING), AWARD WAS PROPERLY MADE TO LOW BIDDER UNDER ASPR GUIDELINES IN PARAGRAPH 2-406 NOTWITHSTANDING NEXT LOW BIDDER'S ALLEGATION THAT PRESENCE OF OPTION REQUIRED PROOF THAT ORIGINAL BID WAS FREE FROM ERROR.

SOUTHERN ROCK, INC.:

INVITATION FOR BIDS NO. DACW38-74-B-0214 WAS ISSUED BY THE CORPS OF ENGINEERS, VICKSBURG DISTRICT, FOR THE REHABILITATION OF THE SPILLWAY AT SARDIS LAKE AND OF THE LITTLE TALLAHATCHIE RIVER. TWO BIDS WERE TIMELY RECEIVED AND OPENED ON AUGUST 13, 1974. THE APPARENT LOW BID OF $598,160 WAS SUBMITTED BY THE S.J. COHEN COMPANY (COHEN). THE OTHER BID, SUBMITTED BY SOUTHERN ROCK, INC., TOTALED $641,290. ON THE DATE OF, BUT AFTER THE TIME SET FOR, BID OPENING, A TELEGRAPHIC MODIFICATION OF THE COHEN BID WAS RECEIVED BY THE CONTRACTING OFFICER. HOWEVER, BECAUSE THE MODIFICATION WAS RECEIVED AFTER BID OPENING, THE CONTRACTING OFFICER DETERMINED IT WAS NOT FOR CONSIDERATION UNDER PARAGRAPH 7-2002.2 OF THE ARMED SERVICES PROCUREMENT REGULATION (1974 ED.)(ASPR), LATE BIDS, MODIFICATION OF BIDS OR WITHDRAWAL OF BIDS, AND SO NOTIFIED COHEN.

THE TELEGRAPHIC MODIFICATION ATTEMPTED TO INCREASE THE UNIT PRICE FOR BIDDING SCHEDULE ITEM 3, DRY EXCAVATION, FROM $2.00 TO $2.50 PER CUBIC YARD. ALTHOUGH A REVIEW OF THE COHEN BID DISCLOSED NOTHING ON ITS FACE SUGGESTIVE OF THE POSSIBILITY OF A MISTAKE IN BID, THE CONTRACTING OFFICER NONETHELESS, BECAUSE OF THE ATTEMPTED MODIFICATION, REQUESTED COHEN TO VERIFY ITS BID AS BEING FREE OF ERROR. THIS THE BIDDER DID, ALSO STATING THAT:

"*** OUR ATTEMPTED TELEGRAPHIC MODIFICATION TO OUR BID ON SUBJECT INVITATION, DID NOT REFLECT A MISTAKE IN OUR BID. THE MODIFICATION REFLECTED A CHANGE IN OUR JUDGEMENT AS TO THE WORTH OF THE WORK, BUT DID NOT REFLECT ANY ERROR OR OMISSION IN OUR ORIGINAL BID COMPUTATION."

HAD THE MODIFICATION BEEN FOUND TO BE PROPERLY FOR ACCEPTANCE, IT WOULD HAVE INCREASED THE COHEN BID BY $92,500 TO $690,660, OR HIGHER THAN THE SOUTHERN ROCK BID. THE EFFECT OF THIS ATTEMPTED MODIFICATION ON THE COHEN BID GAVE RISE TO THE SOUTHERN ROCK PROTEST.

NOTWITHSTANDING THE PROTEST, THE CONTRACTING OFFICER MADE AWARD TO COHEN ON SEPTEMBER 10, 1974, PURSUANT TO ASPR SEC. 2-407.8(B)(2) AND (3). HAD BEEN DETERMINED THAT ANY DELAY IN THE WORK BEYOND THE CURRENT WORKING SEASON COULD SERIOUSLY JEOPARDIZE THE INTEGRITY OF THE SPILLWAY OUTLET CHANNEL. ALSO, IT WAS FELT THAT IF ANOTHER SPILLWAY OVERFLOW OCCURRED IT WOULD INCREASE THE PRESENT DAMAGE AND RESULT IN A SIGNIFICANT INCREASE IN REPAIR COSTS.

SOUTHERN ROCK MAINTAINS THAT RECEIPT OF THE COHEN LATE BID MODIFICATION REQUIRED APPLICATION OF THE MISTAKE IN BID PROCEDURES OF ASPR SEC. 2-406 BECAUSE THERE WAS REASON TO BELIEVE THAT A MISTAKE HAD BEEN MADE IN THE COHEN BID AND THAT AWARD COULD ONLY BE MADE TO COHEN UPON PROOF THAT ITS ORIGINAL LOW BID WAS ITS ACTUALLY INTENDED BID. IT IS ARGUED THAT COHEN WOULD BE HARD PUT TO PROVE ITS INTENDED BID IN LIGHT OF THE FOLLOWING FACTS. THE BID MODIFICATION ATTEMPTED TO INCREASE THE ORIGINAL BID PRICE BY 15.46 PERCENT, AN ADJUSTMENT WHICH WOULD CAUSE THE COHEN BID PRICE TO REFLECT AN OVERHEAD AND PROFIT FACTOR MORE CONSISTENT WITH THAT CUSTOMARILY USED IN THE CONSTRUCTION INDUSTRY. THIS REVISED PRICE IS BELIEVED TO BE MORE ACCEPTABLE INSOFAR AS COST IS CONCERNED THAN THE ORIGINAL BID PRICE. SOUTHERN ROCK FEELS THAT THIS IS A REASONABLE CONCLUSION INASMUCH AS THE LOW BID WAS APPROXIMATELY 6 PERCENT HIGHER THAN THE GOVERNMENT ESTIMATE OF $562,398, WHICH DID NOT PROVIDE FOR OVERHEAD AND PROFIT. CONSEQUENTLY, IT IS MAINTAINED THAT AWARD SHOULD HAVE BEEN MADE TO SOUTHERN ROCK IN LIGHT OF THE STRONG INDICATION OF ERROR IN THE COHEN ORIGINAL BID; THE FACT THAT COHEN FAILED TO PROVE THE ABSENCE OF MISTAKE; AND THE FACT THAT THE INTENDED BID (I.E., THE SUM OF THE ORIGINAL BID AND THE AMOUNT OF THE ATTEMPTED PRICE MODIFICATION) IS HIGHER THAN THE SOUTHERN ROCK BID. ANY OTHER CONCLUSION, IT IS ARGUED, WOULD PUT COHEN IN THE POSITION OF HAVING AN OPTION EITHER TO ALLEGE A MISTAKE - THEREBY SIDESTEPPING AN AWARD - OR TO ALLEGE NO MISTAKE AND ACCEPT AWARD ON THE BASIS OF ITS ORIGINAL BID. IF SUCH CIRCUMSTANCES WERE PERMITTED, WHETHER OR NOT A BIDDER WOULD RECEIVE AN AWARD WOULD BE LEFT TO THE SOLE DISCRETION OF THAT BIDDER.

OUR OFFICE HAS RECOGNIZED IN THE CASES CITED BY THE ATTORNEY FOR SOUTHERN ROCK THAT WHILE A BID MODIFICATION RECEIVED AFTER BID OPENING MAY NOT BE PROPERLY ACCEPTABLE UNDER THE LATE BID PROVISIONS OF ASPR, IT MAY BE CONSIDERED AS EVIDENCE IN VERIFYING THE EXISTENCE OF AN ORIGINALLY SUSPECTED AND SUBSEQUENTLY ALLEGED MISTAKE AND IN ESTABLISHING THE BID ACTUALLY INTENDED. B-176314, DECEMBER 4, 1972; 53 COMP. GEN. 368 (1973). HOWEVER, THESE AND OTHER DECISIONS DO NOT HOLD, AS SUGGESTED, THAT THE MERE EXISTENCE OF AN ATTEMPTED BID MODIFICATION IS SUFFICIENT TO ESTABLISH THE EXISTENCE OF ERROR. IN THE TWO CITED CASES, THE BIDS OF THE FIRMS WHICH REQUESTED CORRECTION CONTAINED SUFFICIENT INFORMATION TO OBLIGATE THE CONTRACTING OFFICER TO REQUEST VERIFICATION.

WE BELIEVE THAT THE PROVISIONS OF ASPR SEC. 2-406 MUST BE LOOKED TO AS CONTROLLING. THAT PARAGRAPH PROVIDES THAT WHERE THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE MAY HAVE BEEN MADE IT IS HIS DUTY TO BRING THIS TO THE ATTENTION OF THE BIDDER AND REQUEST A VERIFICATION OF THE BID PRICE. IF THE BID IS VERIFIED, THE CONTRACTING OFFICER WILL CONSIDER THE BID AS ORIGINALLY SUBMITTED. ASPR SEC. 2 406.3(E)(1). THIS IS EXACTLY WHAT THE CONTRACTING OFFICER DID, AND, CONSEQUENTLY, THE PROPRIETY OF THE AWARD TO COHEN NEED NOT BE QUESTIONED.

AS REGARDS ASPR SEC. 2-406.3(E)(2), ALSO CITED BY THE PROTESTER IN SUPPORT OF ITS POSITION, THIS PROVISION READS, IN PART, AS FOLLOWS:

"(2)WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERRORS SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR OTHER BONA FIDE BIDDERS. ***"

ASSUMING FOR THE SAKE OF ARGUMENT (ALTHOUGH WE DO NOT BELIEVE THIS PROVISION OF ASPR IS APPLICABLE SINCE COHEN CLEARLY STATED THAT NO MISTAKE HAD OCCURRED) THAT THE CONTRACTING OFFICER SUSPECTED A MISTAKE IN THE LOW BID AND THE BIDDER FAILED TO RESPOND TO A REQUEST FOR VERIFICATION, WE DO NOT BELIEVE THAT THE AWARD MADE TO COHEN WAS IMPROPER. THE ORIGINAL BID OF COHEN WAS $43,130 LOWER THAN THE SOUTHERN ROCK BID. HAD THE BID MODIFICATION BEEN PROPERLY FOR ACCEPTANCE THE BID WOULD HAVE BEEN $49,470 HIGHER THAN THE SOUTHERN ROCK BID. ALSO, THE ORIGINAL COHEN BID PRICE WAS APPROXIMATELY 6.3 PERCENT HIGHER THAN THE GOVERNMENT ESTIMATE; THE SOUTHERN ROCK BID PRICE WAS APPROXIMATELY 14 PERCENT HIGHER. HAD THE BID MODIFICATION BEEN FOR CONSIDERATION THE COHEN BID WOULD HAVE BEEN APPROXIMATELY 22.8 PERCENT HIGHER THAN THE GOVERNMENT ESTIMATE. IN ALL INSTANCES, THE SOUTHERN ROCK BID PRICE IS MIDWAY BETWEEN THE LOW AND THE POSSIBLE HIGH BIDS OF COHEN. WE DO NOT SEE HOW THESE FIGURES CAN GIVE RISE TO AN IMPLICATION OF MISTAKE, APART FROM THE FACT THAT A MODIFICATION WAS SUBMITTED, FOR IT WOULD SEEM AS LOGICAL TO SAY 6 PERCENT IS TOO LITTLE AS TO SAY 22.8 PERCENT IS TOO GREAT. ALSO, FOR THESE REASONS, WE CANNOT CONCLUDE THAT THE BID PRICE AS ORIGINALLY SUBMITTED BY COHEN IS SO FAR OUT OF LINE WITH THE GOVERNMENT ESTIMATE OR THE SOUTHERN ROCK BID OR THAT THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR AS TO REASONABLY JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF COHEN'S BID WOULD BE UNFAIR TO IT OR TO SOUTHERN ROCK.

ACCORDINGLY, WE FIND THAT THE AWARD WAS PROPERLY MADE AND THE PROTEST IS DENIED.