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B-140503, DEC. 16, 1959

B-140503 Dec 16, 1959
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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 18. BISHOP TO HAVE BEEN MADE IN HIS BID ON WHICH CONTRACT NO. NBY-22237 IS BASED. RECEIPT IS ALSO ACKNOWLEDGED OF THE BUREAU'S LETTER OF NOVEMBER 19. THE ABSTRACT OF BIDS SHOWS THAT THE FIVE OTHER BIDS ON THE HANGAR WERE IN THE AMOUNTS OF $7. THAT THE GOVERNMENT'S ORIGINAL ESTIMATE WAS $8. THE RECORD INDICATES THAT SINCE THE TWO LOWEST BIDS WERE SUBSTANTIALLY BELOW THE REMAINING BIDS AND SOMEWHAT BELOW THE GOVERNMENT ESTIMATE. BISHOP WAS REQUESTED TO REVIEW HIS BID TO DETERMINE IF AN ERROR HAD BEEN MADE. BISHOP ADVISED THAT "I HAVE REVIEWED THE SPECIFICATIONS AND DRAWINGS FOR NBY-22237 AND I AM SATISFIED WITH MY BID IN THE AMOUNT OF $7.

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B-140503, DEC. 16, 1959

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 18, 1959, WITH ENCLOSURES, FROM THE OFFICE OF THE CHIEF, BUREAU OF YARDS AND DOCKS, SUBMITTED IN RESPONSE TO A LETTER DATED AUGUST 25, 1959, REQUESTING A REPORT RELATIVE TO AN ERROR ALLEGED BY MR. JOHN H. BISHOP TO HAVE BEEN MADE IN HIS BID ON WHICH CONTRACT NO. NBY-22237 IS BASED. RECEIPT IS ALSO ACKNOWLEDGED OF THE BUREAU'S LETTER OF NOVEMBER 19,1959, WITH ENCLOSURES, AND OF A SUPPLEMENTAL REPORT DATED DECEMBER 1, 1959, FROM THE OFFICER IN CHARGE OF CONSTRUCTION (CONTRACTS), FOURTH NAVAL DISTRICT.

THE DISTRICT PUBLIC WORKS OFFICER, FOURTH NAVAL DISTRICT, U.S. NAVAL BASE, PHILADELPHIA, PENNSYLVANIA, BY SPECIFICATION NO. 22237/59, REQUESTED BIDS--- TO BE OPENED JUNE 23, 1959--- FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK REQUIRED FOR THE MODIFICATION AND IMPROVEMENT OF A HANGAR DESIGNATED AS BUILDING NO. 80 AT THE NAVAL AIR STATION, WILLOW GROVE, PENNSYLVANIA. IN RESPONSE MR. JOHN H. BISHOP SUBMITTED A BID DATED JUNE 23, 1959, OFFERING TO PERFORM THE WORK FOR THE LUMP SUM OF $7,493. THE ABSTRACT OF BIDS SHOWS THAT THE FIVE OTHER BIDS ON THE HANGAR WERE IN THE AMOUNTS OF $7,980, $13,487, $13,831, $13,977, AND $14,392, AND THAT THE GOVERNMENT'S ORIGINAL ESTIMATE WAS $8,650.

THE RECORD INDICATES THAT SINCE THE TWO LOWEST BIDS WERE SUBSTANTIALLY BELOW THE REMAINING BIDS AND SOMEWHAT BELOW THE GOVERNMENT ESTIMATE, MR. BISHOP WAS REQUESTED TO REVIEW HIS BID TO DETERMINE IF AN ERROR HAD BEEN MADE. BY LETTER DATED JUNE 29, 1959, MR. BISHOP ADVISED THAT "I HAVE REVIEWED THE SPECIFICATIONS AND DRAWINGS FOR NBY-22237 AND I AM SATISFIED WITH MY BID IN THE AMOUNT OF $7,493. I WILL DO THE PROJECT IN ACCORDANCE WITH THE PLANS AND SPECIFICATIONS.' THE BID OF MR. BISHOP WAS ACCEPTED ON JUNE 30, 1959.

IN A LETTER DATED AUGUST 14, 1959, TO OUR OFFICE, MR. BISHOP ALLEGED THAT AN ERROR HAD BEEN MADE IN HIS BID IN THAT HE HAD FAILED TO INCLUDE IN HIS BID PRICE THE COST OF A THREE-TON HOIST, WHICH, HE STATED, WOULD COST APPROXIMATELY $5,800. HE ALSO STATED THAT THE ERROR RESULTED FROM HIS FAILURE TO TRANSFER THE COST OF THE NEW THREE TON HOIST FROM HIS ROUGH COMPUTATIONS TO HIS SUMMARY ESTIMATE SHEET. MR. BISHOP REQUESTED THAT THE CONTRACT PRICE OF THE WORK BE INCREASED FROM $7,493 TO $13,293, TO COVER THE COST OF THE OMITTED HOIST. BY LETTER DATED SEPTEMBER 4, 1959, MR. BISHOP SUBMITTED HIS SUMMARY ESTIMATE SHEET, A COPY OF A QUOTATION DATED JUNE 19, 1959, RECEIVED BY HIM FOR FURNISHING THE LABOR AND MATERIALS NECESSARY FOR MONORAIL REVISION AND EXTENSION, AND A COPY OF A QUOTATION DATED JUNE 17, 1959, OF $5,800 RECEIVED BY HIM FOR FURNISHING THE ELECTRIC HOIST AND CARRIER, THE COST OF WHICH ITEM HE ALLEGES HE OMITTED FROM HIS BID PRICE. THE SUMMARY ESTIMATE SHEET SHOWS THE PRICES FOR EIGHT ITEMS OF WORK TOTALING $7,493, THE AMOUNT OF MR. BISHOP'S BID PRICE. NONE OF THE VARIOUS ITEMS OF COST MAKING UP THE BID PRICE APPEARS TO INCLUDE THE COST OF THE THREE-TON HOIST. IT IS NOTED THAT THE GOVERNMENT'S ESTIMATE COVERS NINE ITEMS OF WORK.

THE ABSTRACT OF BIDS SHOWS THAT SIX BIDS WERE RECEIVED ON THE HANGAR AND THAT THE BIDS FALL INTO TWO PRICE-RANGE GROUPS. THE LOW PRICE RANGE GROUP CONSISTS OF THE BIDS OF MR. BISHOP AND THE RANIERI CONSTRUCTION COMPANY, WHICH ARE IN THE AMOUNTS OF $7,493 AND $7,980, RESPECTIVELY; AND THE HIGH PRICE-RANGE GROUP CONSISTS OF FOUR BIDS IN AMOUNTS RANGING FROM $13,487 TO $14,392. IT IS NOTED THAT THE PRICES IN THE HIGH PRICE-RANGE GROUP ARE ALMOST DOUBLE THE PRICES IN THE LOWER PRICE-RANGE GROUP. IT IS REPORTED THAT THE GOVERNMENT'S ORIGINAL ESTIMATE OF $8,650 WAS ERRONEOUS, AND THAT THE GOVERNMENT'S REVISED ESTIMATE FOR THE JOB IS $12,005. CONSIDERING THE FACT THAT THE THREE LOWEST BIDS IN THE HIGH PRICE-RANGE GROUP FALL WITHIN A RANGE OF $500 ON A $12,000 TO $13,000 JOB AND THE ADDITIONAL FACT THAT THE GOVERNMENT'S REVISED ESTIMATE IS $3,355 HIGHER THAN ITS ORIGINAL ESTIMATE, IT WOULD APPEAR THAT THE NEXT LOWEST BIDDER IN THE LOW PRICE RANGE GROUP, THE RANIERI CONSTRUCTION COMPANY, ALSO MADE AN ERROR IN ITS BID.

THE RECORD LEAVES LITTLE DOUBT THAT MR. BISHOP'S BID WAS ERRONEOUS AND TO COMPEL HIM TO PERFORM THE WORK FOR $7,493 WOULD APPEAR TO BE INEQUITABLE.

ACCORDINGLY, SINCE IT IS REPORTED THAT MR. BISHOP IS PROCEEDING WITH THE CONTRACT WORK AND SINCE THE OFFICER IN CHARGE OF CONSTRUCTION HAS STATED IN HIS SUPPLEMENTAL REPORT OF DECEMBER 1, 1959, THAT $12,005 IS A FAIR AND REASONABLE PRICE THEREFOR, PAYMENT AT THAT PRICE IS AUTHORIZED TO BE MADE TO MR. BISHOP UPON COMPLETION OF THE WORK.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING SUCH PAYMENT.

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