Matter of: Transco Industries, Inc. File: B-260286 Date: June 8, 1995

Matter of: Transco Industries, Inc. File: B-260286 Date: June 8, 1995

Agency improperly allowed upward correction of awardee's low bid where, although the record supports the mistake claimed, the record also reveals an additional unclaimed mistake, and correction of the claimed and unclaimed mistakes would increase the bid above the next low bid.

Attorneys

DECISION

Transco Industries, Inc. protests the award of a contract to MEAC & Associates under invitation for bids (IFB) No. DACW68-95-B-0003, issued by the United States Army Corps of Engineers for the design, construction and installation of prototype vertical barrier screens at Little Goose and Lower Granite Dams on the Columbia and Snake Rivers, Washington. Transco, the second low bidder, contends that the agency improperly permitted MEAC, the low bidder, to correct a mistake in its bid.

We sustain the protest.

The IFB contemplated a firm, fixed-price contract and requested 16 unit and extended prices for line items of work in connection with the screens, [1] as well as a total bid. The Army received four bids. MEAC's original bid document was received by the agency on December 6, and on the same day the firm submitted a bid modification via Western Union mailgram. At bid opening on December 8, MEAC's original total bid was noted at $427,000. The firm's timely submitted bid modification deducted $96,000 from its original bid, consisting of the following line item changes: (1) no. 0002/fabricate and deliver VBS 1 assembly to Little Goose Dam - $20,000; (2) no. 0003AA/fabricate and deliver VBS 2 assembly to Little Goose Dam - $38,000; and (3) no. 0003AB/fabricate and deliver VBS 2 assembly/Lower Granite Dam - $38,000. [2] MEAC's bid, as modified at the time of bid opening, was the apparent low bid at $331,000 ($427,000 minus $96,000). Transco's bid was second low at $514,898 and the remaining two bids were in the amounts of $627,279, and $742,996. The government estimate for the project was $420,000. Noting the large disparity between MEAC's bid, the other bids, and the government estimate, on December 9, the contracting officer requested that MEAC review its bid for possible mistakes.

In response, by letter of December 14, MEAC advised the agency that there was an error in the firm's bid based on a miscommunication caused by the rush to get the modification to Western Union; instead of a $96,000 deduction, the letter stated, the firm had intended its modification to reflect a deduction of $20,000 based on savings from a revised steel quote, and an addition of $76,000, divided equally between line item nos. 0003AA and 0003AB, based on additional costs for fabrication, painting, and installation of the screens. Thus, according to the letter, the firm intended a net bid increase of $56,000, for a total bid of $483,000.

MEAC furnished its original and modified bid workpapers to the agency on December 19. The modification workpapers consist primarily of three pages of handwritten worksheets, dated December 6, 1994. They indicate a deduction of $20,000 for line item no. 0002/fabricate and deliver VBS 1 assembly to Little Goose Dam. Additionally, the worksheets for the modification present line item calculations which show an increase of approximately $76,000 based on several specified increased cost items. The worksheets further indicate that instead of changing the numerous affected line items to incorporate the $76,000 increase, MEAC proposed to increase bid item nos. 0003AA and 0003AB by $38,000 each.

In a letter dated December 18, MEAC requested permission to correct its bid to the intended bid amount of $483,000. MEAC subsequently furnished sworn affidavits from MEAC officials relating to the mistake. The Army allowed the correction. Noting that MEAC provided "authenticated original worksheets and an explanation and other probative evidence consistent with those worksheets," the agency found that the worksheets "clearly and convincingly establish the nature of the mistake, how it occurred and the intended bid." The agency further found that "[t]he worksheets appear to be in good order, and there is no contravening evidence which would tend to lessen their evidentiary value." Finally, the agency found that "[t]he nature of the mistake is readily apparent, i.e., communicating an intended addition to two bid items as reductions to those same bid items." Accordingly, the agency allowed upward correction of the bid by $152,000, from $331,000 to $483,000. The Army awarded the contract to MEAC on January 13. Performance has been completed. [3]

Transco argues that the evidence provided by MEAC does not show clearly and convincingly that a mistake was made, how the mistake occurred, or the intended price. The protester concludes that the correction was improper.

Federal Acquisition Regulation (FAR) Sec. 14.406 establishes a high standard of proof--clear and convincing evidence of the mistake and of the bid actually intended--which must be met before an agency may permit correction of a bid; this serves to protect the competitive system from abuse. Three O Constr., S.E., B-255749, Mar. 28, 1994, 94-1 CPD Para. 216. In considering upward correction of a low bid, worksheets may constitute clear and convincing evidence if they are in good order and indicate the intended bid price, and there is no contravening evidence. Fishermen's Boat Shop, Inc., B-252560, July 9, 1993, 93-2 CPD Para. 11. Whether the evidence meets the clear and convincing standard is a question of fact, and we will not question an agency's decision based on this evidence unless it lacks a reasonable basis. RJS Constrs., B-257457, Oct. 7, 1994, 94-2 CPD Para. 130. However, where this high standard has not been met, correction should not be permitted, notwithstanding the good faith of the parties. Southwind Constr. Corp., B-228013, Oct. 8, 1987, 87-2 CPD Para. 346.

We find that the evidence presented clearly and convincingly shows that MEAC intended the modification to increase, rather than decrease, its bid. However, we have found another clear mistake in the modification workpapers on the additive items, which casts substantial doubt on the amount of the intended bid.

MEAC's modification workpapers clearly show a deduction of $20,000 to line item no. 0002 and increases of $38,000 each to line item nos. 0003AA and 0003AB, for a total increase of $76,000, and a net increase of $56,000 ($76,000 - $20,000). There is nothing on the face of the workpapers which calls their authenticity or credibility into question, and they generally appear to be in good order. However, our further review of the calculations in the workpapers for the 10 line items comprising the intended $76,000 total increase, indicate a $38,104 arithmetical discrepancy in one line item calculation. Specifically, in the calculation for the `extra men for shop' the workpapers show:

"(2) extra men for shop fabricating room's supv. (working) for total wages of 4 months each @ $1500 wk. (4) x 4.33 wks 17.32 x $1500.00 equals $6,928.00 each x (2 men) $6,928.00 $13,856.00"

The product of this calculation is wrong. The correct product from multiplying the figures in the calculation (4 x 4.33 x $1500 x 2) is $51,960, which is $38,104 more than the $13,856 total shown in MEAC's calculation. The workpapers show that MEAC used the understated $13,856 in the calculation of the $76,000 intended increase, instead of the correct $51,960 total. [4]

While MEAC did not claim this $38,104 discrepancy as a mistake, we cannot ignore it. Had MEAC claimed this additional mistake, its claimed intended bid of $483,000 would have been increased to $521,104, which is $6,206 higher than Transco's next low bid of $514,898; MEAC would no longer be the low bidder. The record as a whole therefore does not contain clear and convincing evidence of MEAC's intended bid, or that the intended bid was below Transco's next low bid. Correction therefore should not have been permitted. See Special Sys. Serv., Inc., B-259865.2, May 12, 1995, 95-1 CPD Para. ___; William G. Tadlock Constr., B-251996, May 13, 1993, 93-1 CPD Para. 382. We sustain the protest on this basis. [5]

Since the contract has been performed, award of the contract to Transco is not a viable remedy. However, we find that Transco is entitled to recover the costs of filing and pursing this protest, including reasonable attorneys' fees and its bid preparation costs. 4 C.F.R. Sec. 21.6(d)(1) (1995). Transco should file its claim, detailing and certifying the time expended and cost incurred, directly with the Army within 60 days after receipt of this decision. 4 C.F.R. Sec. 21.6(f)(1).

The protest is sustained.

1. The line items primarily consisted of separate items for fabrication and delivery, and installation of two types of screen assemblies at the two locations.

2. MEAC's original bid amounts for these line items were $60,000, $93,000, and $95,000, respectively.

3. Because the protest was filed more than 10 calendar days after the date of award, there was no stay of contract performance pursuant to 31 U.S.C. Sec. 3553(d)(1) (1988).

4. During the course of the protest we specifically requested that the agency ask MEAC to clarify all line item calculations in the modification workpapers, including this one; MEAC furnished a response, but failed to provide any explanation for this discrepancy.

5. In determining whether bid correction was proper, we have declined to consider alleged discrepancies not claimed as mistakes, where it is alleged that the discrepancies render the intended bid unclear. See Precon Constr. Co., B-255294.1; 255294.2, Apr. 6, 1994, 94-1 CPD Para. 239; McInnis Bros. Constr., Inc., B-251138, Mar. 1, 1993, 93-1 CPD Para. 186. The case here is different, however, since the worksheet mistake in question would not merely make the intended bid uncertain--it would clearly increase the awardee's bid above the protester's next low bid.