B-183387, APR 15, 1975

B-183387: Apr 15, 1975

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BIDDER WHO ESTABLISHES THAT BID WORKSHEETS WERE ERRONEOUSLY TOTALLED MAY NOT BE PERMITTED TO CORRECT BID TO AN AMOUNT MORE THAN DOUBLE THE BID AS SUBMITTED AND WITHIN A FEW HUNDRED DOLLARS OF NEXT LOW BID. R1-10-75 25 WAS FOR THE REMOVAL. FOUR BIDS WERE RECEIVED AND OPENED ON DECEMBER 30. THE THREE LOW BIDS WERE AS FOLLOWS: F.L. THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $24. SINCE ZION'S BID WAS 48 PERCENT LOWER THAN THE SECOND LOW BID AND 58 PERCENT LOWER THAN THE GOVERNMENT'S ESTIMATE. THAT THE BID SHOULD HAVE BEEN $20. INDICATING THAT THE FIGURES IN THE TOTAL COLUMN WERE INCORRECTLY ADDED. INDICATING THAT DUE TO THE FAULTY ADDING AN INACCURATE AMOUNT OF STATE TAX WAS STATED. THE ADMINISTRATIVE EXPLANATION OF HOW THE BIDDER ALLEGES THE MISTAKE OCCURRED IS: "THE WORKSHEET SHOWS THAT THE FIGURES IN THE TOTAL COLUMN WERE INCORRECTLY ADDED.

B-183387, APR 15, 1975

BIDDER WHO ESTABLISHES THAT BID WORKSHEETS WERE ERRONEOUSLY TOTALLED MAY NOT BE PERMITTED TO CORRECT BID TO AN AMOUNT MORE THAN DOUBLE THE BID AS SUBMITTED AND WITHIN A FEW HUNDRED DOLLARS OF NEXT LOW BID, SINCE CORRECTION IN CIRCUMSTANCES HERE INVOLVED WOULD ADVERSELY AFFECT INTEGRITY OF COMPETITIVE BID SYSTEM. HOWEVER, BIDDER SHOULD BE PERMITTED TO WITHDRAW BID.

TREWEEK CONSTRUCTION:

FOREST SERVICE (DEPARTMENT OF AGRICULTURE) SOLICITATION NO. R1-10-75 25 WAS FOR THE REMOVAL, TRANSPORTATION AND PLACEMENT OF THREE HOUSES IN THE FLATHEAD NATIONAL FOREST, MONTANA. FOUR BIDS WERE RECEIVED AND OPENED ON DECEMBER 30, 1974. THE THREE LOW BIDS WERE AS FOLLOWS: F.L. ZION CONSTRUCTION CO. (ZION) - $9,998.00; TREWEEK CONSTRUCTION CO. - $20,800.00; AND COLUMBIA DEVELOPMENT - $34,984.00. THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $24,000.00.

SINCE ZION'S BID WAS 48 PERCENT LOWER THAN THE SECOND LOW BID AND 58 PERCENT LOWER THAN THE GOVERNMENT'S ESTIMATE, THE CONTRACTING OFFICER REQUESTED ZION TO VERIFY ITS BID. IN RESPONSE BY LETTERS DATED JANUARY 15 AND 20, 1975, ZION STATED THAT A MISTAKE HAD BEEN MADE IN ITS BID; THAT THE BID SHOULD HAVE BEEN $20,098.00; AND REQUESTED PERMISSION TO CORRECT IT. IN SUPPORT OF ITS ALLEGED MISTAKE, ZION SUBMITTED A WORKSHEET DATED DECEMBER 18, 1974, CERTIFIED AS BEING THE ORIGINAL WORKSHEET, INDICATING THAT THE FIGURES IN THE TOTAL COLUMN WERE INCORRECTLY ADDED, AND INDICATING THAT DUE TO THE FAULTY ADDING AN INACCURATE AMOUNT OF STATE TAX WAS STATED. THE ADMINISTRATIVE EXPLANATION OF HOW THE BIDDER ALLEGES THE MISTAKE OCCURRED IS:

"THE WORKSHEET SHOWS THAT THE FIGURES IN THE TOTAL COLUMN WERE INCORRECTLY ADDED. IN HIS LETTER OF JANUARY 15, MR. ZION INDICATES THAT THE FIGURE '1' OF THE AMOUNT IN THE TOTAL COLUMN ON LINE 13 OF THE WORKSHEET, $18,720.00 (TOTAL HOURS - 288 X $65 PER HR.), WAS NOT ADDED OR CARRIED FORWARD IN TOTALING THE BID. THE ADDITION OF THE AMOUNTS IN THE TOTAL COLUMN REFLECTS THIS ERROR. THE TOTAL AMOUNT WOULD HAVE BEEN $19,998.00 INSTEAD OF $9,998.00 IF THE '1' HAD BEEN CARRIED FORWARD. ALSO INDICATES THAT DUE TO THIS ERROR IN ADDITION THE FIGURE ON LINE 3, 1% STATE CONSTRUCTION TAX, WOULD THEREFORE BE IN ERROR SINCE THE TAX WAS FIGURED TO BE 1% OF THE TOTAL BID (THIS FIGURE WAS APPARENTLY ROUNDED OFF TO $100.00).

"ACCORDINGLY, MR. ZION INDICATES THE TAX SHOULD BE $200.00 (1% OF TOTAL BID-ROUNDED OFF) RATHER THAN $100.00. THESE REQUESTED CORRECTIONS INDICATE A CORRECTED BID OF $20,098.00."

OUR OFFICE HAS FREQUENTLY HELD THAT TO PERMIT CORRECTION OF AN ERROR IN BID PRIOR TO AWARD, A BIDDER MUST SUBMIT CLEAR AND CONVINCING EVIDENCE THAN AN ERROR HAS BEEN MADE, THE MANNER IN WHICH THE ERROR OCCURRED, AND THE INTENDED BID PRICES. 49 COMP. GEN. 480 (1970). TO THE SAME EFFECT SEE FEDERAL PROCUREMENT REGULATIONS SEC. 1-2.406-3(A)(2)(1964 ED.).

IN OUR DECISION OF MAY 14, 1969, 48 COMP. GEN. 748, 750 (1969), WE STATED:

"THE CORRECTION OF MISTAKES IN BID HAS ALWAYS BEEN A VEXING PROBLEM. HAS BEEN ARGUED THAT BID CORRECTION AFTER BID OPENING AND DISCLOSURE OF PRICES QUOTED COMPROMISES THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, AND, TO SOME EXTENT AT LEAST, THIS IS TRUE. FOR THIS REASON, IT HAS BEEN ADVOCATED THAT THE GOVERNMENT SHOULD ADOPT A POLICY WHICH WOULD PERMIT CONTRACTORS TO WITHDRAW, BUT NOT TO CORRECT, ERRONEOUS BIDS. WE DO NOT AGREE COMPLETELY WITH THIS POSITION, SINCE WE BELIEVE THERE ARE CASES IN WHICH BID CORRECTION SHOULD BE PERMITTED. WE DO AGREE, THAT, REGARDLESS OF THE GOOD FAITH OF THE PARTY OR PARTIES INVOLVED, CORRECTION SHOULD BE DENIED IN ANY CASE IN WHICH THERE EXISTS ANY REASONABLE BASIS FOR ARGUMENT THAT PUBLIC CONFIDENCE IN THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WOULD BE ADVERSELY AFFECTED THEREBY. ***"

AS WAS SAID IN THE ABOVE CITED DECISION, "THE PRESENT CASE, IT SEEMS TO US, FAILLS IN THIS CATEGORY." WHILE ZION HAS SUBMITTED EVIDENCE OF A MISTAKE IN COMPUTATIONS IN PREPARING ITS BID, IT HAS FAILED TO SHOW ITS INTENDED BID PRICE BY CLEAR AND CONVINCING EVIDENCE. THE "ORIGINAL WORKSHEET" INCLUDES A $200 FIGURE FOR BOND PREMIUM. SINCE THIS FIGURE IS PRESUMABLY BASED UPON THE AMOUNT OF THE BID, BUT THE WORKSHEET CONTAINS NO INFORMATION AS TO THE FORMULA FOR CALCULATING THE FIGURE, IT IS NOT CLEAR WHAT THE BOND PREMIUM BASED UPON THE CORRECTED BID WOULD HAVE BEEN. WHILE THE INABILITY TO DETERMINE THE EXACT AMOUNT OF ZION'S INTENDED BID WOULD NOT PER SE PRECLUDE CORRECTION, AS AN UNCERTAINTY WITHIN A RELATIVELY NARROW RANGE IS NOT INCONSISTENT WITH CLEAR AND CONVINCING EVIDENCE OF WHAT THE BID WOULD HAVE BEEN, CHRIS BERG, INC. V. UNITED STATES, 426 F.2D 314 (1970), WE BELIEVE THAT TO PERMIT CORRECTION IN AN AMOUNT MORE THAN DOUBLE THE BID AS SUBMITTED TO WITHIN A FEW HUNDRED DOLLARS OF THE NEXT LOW BID, COUPLED WITH THE UNCERTAINTY OF THE BOND PREMIUM, WOULD ADVERSELY AFFECT THE INTEGRITY OF THE COMPETITIVE BID SYSTEM. 48 COMP. GEN. 748, SUPRA. THEREFORE, WE ARE OF THE OPINION THAT ZION CONSTRUCTION COMPANY SHOULD BE PERMITTED TO WITHDRAW ITS BID, BUT THAT IT SHOULD NOT BE PERMITTED TO CORRECT IT. ..END :