B-182295, MAR 4, 1975

B-182295, MAR 4, 1975

1. WHERE LOW BIDDER MADE NO PRICE CHANGE IN ACKNOWLEDGING AMENDMENT TO IFB CALLING FOR TILE TWICE AS THICK AS IN ORIGINAL SPECIFICATIONS, WHICH AMENDMENT WAS DISPATCHED TO AND RECEIVED BY CONTRACTING AGENCY AFTER ORIGINAL BID WAS RECEIVED AT CONTRACTING AGENCY, CONTRACTING OFFICER WAS NOT ON CONSTRUCTIVE NOTICE OF POSSIBILITY OF ERROR SINCE, ACCORDING TO BIDDER, ONLY $1,847 WOULD HAVE BEEN ADDED TO ORIGINAL BID OF $23,327. 2. A DISPARITY OF 8 PERCENT BETWEEN LOW BID AND THAT OF NEXT LOWEST BIDDER IS NOT SUFFICIENT TO PUT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF POSSIBILITY OF ERROR. 3. WHERE CONTRACT CALLS FOR 1/8-INCH TILE WHICH CONTRACTOR CONTENDS WAS NOT AVAILABLE FOR TIMELY CONTRACT PERFORMANCE, IT IS RECOMMENDED THAT CONTRACTING OFFICER DECIDE MATTER UNDER CONTRACT.

ENGLE ACOUSTIC & TILE, INC.:

THE DIRECTOR, SUPPLY SERVICE, VETERANS ADMINISTRATION (VA), REQUESTS A DECISION PURSUANT TO FEDERAL PROCUREMENT REGULATIONS SEC. 1-2.406 4(J) (1964 ED. F.P.R. CIRC. 1) AS TO THE ACTION TO BE TAKEN WITH RESPECT TO MISTAKE IN BID ALLEGED AFTER THE AWARD OF A CONTRACT TO ENGLE ACOUSTIC & TILE, INC. (ENGLE), BY THE VA HOSPITAL, LITTLE ROCK, ARKANSAS, UNDER INVITATION FOR BIDS NO. 598-78-74 ("78"). ENGLE WAS THE LOW BIDDER AT $23,327 FOR FURNISHING ALL LABOR, MATERIALS, AND EQUIPMENT FOR FLOOR TILE INSTALLATION IN CERTAIN AREAS OF THE HOSPITAL.

THE RECORD FURTHER INDICATES THAT SOME TIME BEFORE JUNE 18, 1974, THE PRESIDENT OF ENGLE, PRIOR TO DEPARTING FOR VACATION, PREPARED A BID FOR NO. "78" AND LEFT IT FOR DISPATCH IN TIME TO ARRIVE AT THE VA BY JUNE 18, 1974, THE ORIGINALLY SCHEDULED BID OPENING. ON JUNE 17, 1974, NO. "78" WAS AMENDED TO CHANGE THE SPECIFIED TILE THICKNESS FROM 1/16-INCH TO 1/8- INCH AND TO EXTEND THE BID OPENING TO JUNE 27, 1974. PRIOR TO ENGLE'S RECEIPT OF THE AMENDMENT, ITS ORIGINAL BID HAD BEEN RECEIVED AT THE VA. APPARENTLY, THE AMENDMENT, SIGNED BY AN ESTIMATOR FOR ENGLE ON JUNE 19, 1974, WAS MAILED TO AND RECEIVED BY THE VA BEFORE BID OPENING. ON JUNE 27, 1974, THE SAME DATE BIDS FOR NO. "78" WERE OPENED, THE BIDS SUBMITTED UNDER INVITATION FOR BIDS NO. 598-80-74 ("80"), INCLUDING ONE SUBMITTED BY ENGLE, A PROJECT SIMILAR TO NO. "78," WERE ALSO OPENED. THE NEXT DAY, JUNE 28, 1974, AWARD OF NO. "78," WAS MADE TO ENGLE. ANOTHER FIRM, LAWRENCE-PORTER, INC., WAS AWARDED THE CONTRACT AS LOW BIDDER UNDER NO. "80."

ON JULY 17, 1974, 24 DAYS AFTER THE DATE OF THE AWARD, ENGLE, BY LETTER TO THE VA, ALLEGED THAT AN ERROR HAD BEEN MADE IN ITS BID FOR NO. "78" AND REQUESTED RELEASE FROM THE CONTRACT. ON AUGUST 1, 1974, THE PRESIDENT OF ENGLE FURTHER ADVISED THE VA THAT THE ESTIMATOR WHO SIGNED THE AMENDMENT ERRONEOUSLY THOUGHT THAT THE AMENDMENT WAS A CONFIRMATION OF AN AMENDMENT OF WHICH THE VACATIONING PRESIDENT WAS AWARE AND, CONSEQUENTLY, SIMPLY SIGNED THE AMENDMENT, WITHOUT INCREASING THE BID PRICE. MR. ENGLE FURTHER STATED IN THE AUGUST 1 LETTER THAT REQUISITE TILE OF 1/8-INCH WAS NOT AVAILABLE FROM ANY MANUFACTURER AT THAT TIME.

ORDINARILY, UNLESS THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF MISTAKE PRIOR TO AWARD OF THE CONTRACT, A VALID AND BINDING CONTRACT RESULTED PRECLUDING ENGLE FROM RELIEF DUE TO ITS MISTAKE. SINCE IT IS CLEAR THAT THE CONTRACTING OFFICER HAD NO ACTUAL KNOWLEDGE OF THE ERROR, WE MUST EXAMINE THE POSSIBILITIES WHICH MIGHT HAVE EXISTED TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR.

THE FIRST POSSIBILITY WHEREBY THE CONTRACTING OFFICER MIGHT BE CHARGED WITH CONSTRUCTIVE NOTICE CONCERNS THE FACT THAT THE SIGNED AMENDMENT- DISPATCHED TO AND RECEIVED AT THE VA AFTER VA'S RECEIPT OF THE ORIGINAL BID PRIOR TO THE INITIAL OPENING DATE - CONTAINED NO PRICE CHANGE EVEN THOUGH THE AMENDMENT CALLED FOR TILE TWICE AS THICK. IN OTHER WORDS, SHOULD THE CONTRACTING OFFICER HAVE NOTICED, WHEN THE ORIGINAL BID AND SIGNED AMENDMENT WERE OPENED ON THE BID OPENING DATE, THAT THE ORIGINAL BID HAD BEEN RECEIVED EARLIER THAN THE SIGNED AMENDMENT CALLING FOR MORE EXPENSIVE TILE, AND ATTACHED SIGNIFICANCE TO THE LACK OF A CHANGE IN PRICE?

ENGLE STATES THAT, IF IT HAD BEEN AWARE OF THE CHANGE FROM 1/16-INCH TO 1/8-INCH TILE, THE BID WOULD HAVE REFLECTED AN ADDITION OF APPROXIMATELY $1,847 COMPUTING TO A CORRECTED BID PRICE OF $25,174. OUR OFFICE BELIEVES THAT A POSSIBLE CHANGE OF $1,847 WOULD NOT HAVE BEEN ENOUGH TO HAVE CHARGED THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR EVEN IF THE CONTRACTING OFFICER HAD NOTICED THE DIFFERENT DATES WHEN THE ORIGINAL BID AND SIGNED AMENDMENT WERE RECEIVED.

THE SECOND POSSIBILITY OF CHARGING CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR CONCERNS THE COMPARISON OF BID PRICES. NO SUCH NOTICE CAN BE CHARGED HERE. A REVIEW OF THE BID ABSTRACT SHOWS THAT ENGLE'S LOW BID PRICE IS REASONABLY IN LINE WITH THE OTHER BIDS, AND REVEALS A DISPARITY OF ONLY 8 PERCENT BETWEEN ITS BID AND THAT OF THE NEXT LOWEST BIDDER.

IN VIEW OF THE ABOVE, ENGLE SHOULD BE HELD TO ITS OBLIGATIONS UNDER THE VALID AND BINDING CONTRACT CREATED BY THE ACCEPTANCE OF ITS BID.

HOWEVER, ENGLE'S LETTER OF AUGUST 1, 1974, CLAIMED THAT THE REQUISITE 1/8 -INCH MATERIAL WAS NOT AVAILABLE FOR THE TIMELY PERFORMANCE OF THE CONTRACT AT THAT TIME. ALSO, THE DIRECTOR, SUPPLY SERVICE, POINTS OUT THAT THE SECOND LOW BIDDER ON NO. "78," LAWRENCE-PORTER, INC., REFUSED TO EXTEND ITS BID ACCEPTANCE PERIOD BECAUSE OF THE DIFFICULTY IN OBTAINING 1/8-INCH TILE. MOREOVER, THE DIRECTOR ADVISES THAT LAWRENCE PORTER, INC., AS LOW BIDDER AND AWARDEE UNDER NO. "80," DID SUPPLY 1/8 INCH TILE FOR THAT CONTRACT.

THESE FACTS RAISE A QUESTION AS TO THE AVAILABILITY OF THE 1/8-INCH TILE AT THE TIME PERFORMANCE WAS CONTEMPLATED. THEREFORE, WE RECOMMEND THAT THE CONTRACTING OFFICER DECIDE THE MATTER UNDER THE CONTRACT.