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B-167068, FEBRUARY 10, 1970, 49 COMP. GEN. 480

B-167068 Feb 10, 1970
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EVEN THOUGH THE PROFIT AND OVERHEAD FIGURE WAS NOT INCREASED. BASE BID ERROR WHERE A BASE BID IS CORRECTED TO REFLECT THE INTENDED PRICE FOR MATERIALS AND THE CONTRACT IS AWARDED WITH THE DEDUCTION OF AN ALTERNATIVE ITEM. 1970: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 28. IF THE AWARD IS IN AN AMOUNT OTHER THAN THE AMOUNT OF ITS ORIGINAL BID. BIDS WERE OPENED ON DECEMBER 18. THE BASE BIDS WERE AS FOLLOWS: BIDDER BASE BID PIRACCI CONSTRUCTION COMPANY. 375 FOR EXPOSED SWENSON PINK GRANITE AGGREGATE MIX WAS ERASED FROM PAGE 6 OF PIRACCI'S ESTIMATE SHEETS AND THE REMAINING MATERIALS FIGURES ON THE PAGE WHICH REPRESENTED COMPUTATIONS FOR POURED-IN-PLACE CONCRETE WERE ADDED TOGETHER. IT IS REPORTED THAT THE ERASURE OCCURRED WHEN.

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B-167068, FEBRUARY 10, 1970, 49 COMP. GEN. 480

BIDS -- MISTAKES -- CORRECTION -- EVIDENCE OF ERROR -- OMISSION OF PRICE A BIDDER WHO SUBMITTED CLEAR AND CONVINCING EVIDENCE OF AN ERROR IN BID DUE TO THE FAILURE TO SHOW THE EXTENDED AMOUNT FOR THE LISTED QUANTITY OF ONE ITEM AND ITS UNIT PRICE, THE MANNER IN WHICH THE ERROR OCCURRED, AND THE INTENDED TOTAL BID PRICE, ESTABLISHED THE EXISTENCE OF THE MISTAKE ALLEGED, AND SATISFIED THE REQUIREMENTS OF SECTION 1 2.406-3(A)(2) OF THE FEDERAL PROCUREMENT REGULATIONS TO PERMIT BID CORRECTION, EVEN THOUGH THE PROFIT AND OVERHEAD FIGURE WAS NOT INCREASED. A BID MAY BE CORRECTED TO REFLECT THE OMISSION OF DIRECT COSTS WITHOUT INCREASE FOR PROFIT AND OVERHEAD IF SO REQUESTED BY THE BIDDER WHERE THE BID WOULD STILL REMAIN THE LOW BID EVEN IF AMENDED TO REFLECT AN INCREASE FOR PROFIT AND OVERHEAD AS THE CORRECTION WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. BIDS -- ALTERNATIVE -- DEDUCTION -- BASE BID ERROR WHERE A BASE BID IS CORRECTED TO REFLECT THE INTENDED PRICE FOR MATERIALS AND THE CONTRACT IS AWARDED WITH THE DEDUCTION OF AN ALTERNATIVE ITEM, THE AMOUNT DEDUCTED FOR THE ITEM SHOULD REFLECT THE CORRECTION IN THE BASE BID.

TO MATZKIN & DAY, FEBRUARY 10, 1970:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 28, 1970, PROTESTING ON BEHALF OF NORAIR ENGINEERING CORPORATION, THE PROPOSED AWARD OF A CONTRACT FOR THE CONSTRUCTION OF THE JOSEPH H. HIRSHHORN MUSEUM AND SCULPTURE GARDEN, GENERAL SERVICES ADMINISTRATION PROJECT NO. 49356, CONTRACT NO. GS -03B-16254, TO PIRACCI CONSTRUCTION COMPANY, INCORPORATED, IF THE AWARD IS IN AN AMOUNT OTHER THAN THE AMOUNT OF ITS ORIGINAL BID.

BIDS WERE OPENED ON DECEMBER 18, 1969. THE BASE BIDS WERE AS FOLLOWS:

BIDDER BASE BID PIRACCI CONSTRUCTION COMPANY-------------------------- $11,874,000 NORAIR ENGINEERING CORPORATION------------------------ 14,398,000 BLAKE CONSTRUCTION COMPANY, INCORPORATED-------------- 14,372,000

BY TELEGRAM DATED DECEMBER 19, 1969, PIRACCI NOTIFIED GSA THAT A MISTAKE HAD BEEN MADE IN ITS BID. THE ALLEGED MISTAKE OCCURRED WHEN, DUE TO A CLERICAL ERROR, THE FIGURE OF $754,375 FOR EXPOSED SWENSON PINK GRANITE AGGREGATE MIX WAS ERASED FROM PAGE 6 OF PIRACCI'S ESTIMATE SHEETS AND THE REMAINING MATERIALS FIGURES ON THE PAGE WHICH REPRESENTED COMPUTATIONS FOR POURED-IN-PLACE CONCRETE WERE ADDED TOGETHER, CARRIED FORWARD AND FINALLY INCORPORATED INTO THE RECAPITULATION SHEET WITHOUT INCLUDING THE FIGURE THAT HAD BEEN ERASED. IT IS REPORTED THAT THE ERASURE OCCURRED WHEN, BECAUSE OF SEVERAL CHANGES IN THE QUANTITIES FOR THIS MATERIAL DURING FINAL ANALYSIS REVIEW, SEVERAL ERASURES WERE MADE, WEAKENING AND TEARING SLIGHTLY THE PAPER AT THIS PARTICULAR LINE ON THE WORKSHEET. FOR THIS REASON THE FINAL QUANTITY AND PRICE FOR THE ITEM WERE DROPPED ONE LINE ON THE SHEET. THEREAFTER, THIS WORKSHEET AMONG OTHERS WAS GIVEN TO A BOOKKEEPER OF THE COMPANY WHO WAS INSTRUCTED TO ADD THE VARIOUS COLUMNS OF FIGURES TO ARRIVE AT A TOTAL PRICE FOR THE CONCRETE WORK. BECAUSE OF THE BREAK IN THE COLUMN CAUSED BY DROPPING DOWN ONE LINE, THE BOOKKEEPER ERRONEOUSLY ASSUMED THAT THE $754,375 FIGURE REPRESENTED A TOTAL OF THE FIGURES IN THE COLUMN THAT PRECEDED IT. ACCORDING TO THE BOOKKEEPER'S AFFIDAVIT, SHE THEN ERASED THE FIGURE AND RETOTALED THE COLUMN, SUBSTITUTING THE NEW TOTAL IN THE AMOUNT OF $438,009. THE QUANTITY OF 5,702 CUBIC YARDS AND THE UNIT PRICE OF $132.30 WHICH RESULTED IN THE ERASED FIGURE ROUNDED TO THE NEAREST DOLLAR REMAIN ON THE ESTIMATE SHEET.

GSA IS OF THE OPINION THAT THE ORIGINAL WORKSHEETS SUBMITTED BY PIRACCI ACCOMPANIED BY AFFIDAVITS OF THE COMPANY'S ESTIMATOR AND THE BOOKKEEPER WHO MADE THE ALLEGED ERROR SUBSTANTIATE PIRACCI'S ALLEGATION. GSA POINTS OUT THAT THE 11 SHEETS OF ESTIMATES MADE NO PROVISION FOR THE SWENSON MIX DELETED AS A RESULT OF THE CLERICAL MISUNDERSTANDING AND CONSEQUENT ERASURE OF THE EXTENDED FIGURE FOR THE MATERIAL. IN ADDITION TO THE WORKSHEETS FORWARDED HERE BY GSA, PIRACCI, THROUGH ITS ATTORNEY, SUBMITTED DIRECTLY TO THIS OFFICE A LETTER DATED DECEMBER 18, 1969, FROM A PROPOSED SUBCONTRACTOR TO PIRACCI, FURNISHING THE PRICE QUOTATIONS FOR MATERIALS UPON WHICH PIRACCI RELIED IN PREPARING ITS BID. GSA'S ESTIMATE ON THIS ITEM WAS 5,739 CUBIC YARDS AT $131.28 PER YARD. BOTH THE PRICE AND QUANTITY CORRESPOND CLOSELY TO THE BIDDER'S FIGURES ALLEGEDLY OMITTED IN ERROR. GSA CONCLUDES THAT THE BIDDER APPEARS TO HAVE SUBMITTED CLEAR AND CONVINCING EVIDENCE THAT A MISTAKE WAS MADE BY IT IN PREPARING ITS BID.

IN REGARD TO AN ALLEGED ERROR IN BID, WE HAVE HELD THAT TO PERMIT CORRECTION PRIOR TO AWARD A BIDDER MUST SUBMIT CLEAR AND CONVINCING EVIDENCE THAT AN ERROR HAS BEEN MADE, THE MANNER IN WHICH THE ERROR OCCURRED, AND THE INTENDED BID PRICE. B-164620, SEPTEMBER 3, 1968, AND CASES CITED THEREIN. THE SAME BASIC REQUIREMENTS FOR THE CORRECTION OF A BID ARE ALSO FOUND IN SECTION 1-2.406-3(A)(2) OF THE FEDERAL PROCUREMENT REGULATIONS WHICH PROVIDES AS FOLLOWS:

(2) A DETERMINATION MAY BE MADE PERMITTING THE BIDDER TO CORRECT HIS BID WHEN THE BIDDER REQUESTS PERMISSION TO DO SO AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED.

WE ARE SATISFIED THAT THE EVIDENCE DESCRIBED ABOVE ESTABLISHES THE EXISTENCE OF THE ALLEGED MISTAKE. FURTHER, THE BID ACTUALLY INTENDED CAN BE ASCERTAINED BY REINSERTING THE $754,375 AT THE POINT WHERE IT SHOULD HAVE APPEARED ON PAGE 6 OF THE WORKSHEETS (CAST-IN-PLACE CONCRETE COMPUTATIONS), CARRYING THE CORRECT TOTAL THROUGH TO THE RECAPITULATION SHEET, AND AS WAS DONE ORIGINALLY, DEDUCTING THE CUTS OF $280,000 AND ADDING THE LUMP-SUM FEE OF $500,000.

THE RESULTING BASE BID PRICE FROM THE ABOVE CALCULATIONS IS $12,628,375. (THE ORIGINAL BASE BID OF $11,874,000 PLUS THE $754,375 CORRECTION). GSA REPORTS, AND PIRACCI HAS STIPULATED, THAT THE AMOUNT INCLUDED IN THE BID FOR BOND PREMIUM HAD BEEN ROUNDED OFF UP TO THE NEAREST $10,000 AND CONSEQUENTLY WOULD BE UNCHANGED BY CORRECTING THE ERROR.

REGARDING THE $500,000 LUMP-SUM FEE WHICH REPRESENTS PROFIT AND OVERHEAD, PIRACCI REPORTS THAT THIS FIGURE WAS REACHED PRIOR TO FINAL PRICING. THEY STATE THAT THE ERROR INVOLVED EXCLUSIVELY THE COST OF EXPOSED AGGREGATE MATERIAL ONLY AND DID NOT INCLUDE THE COST OF LABOR AND, THEREFORE, WOULD NOT INCREASE RISK AND, IN AND OF ITSELF, WOULD NOT HAVE REQUIRED AN INCREASE IN OVERHEAD AND PROFIT. WE DO NOT FEEL THAT WE WOULD BE JUSTIFIED IN REJECTING PIRACCI'S CONTENTION THAT THE PROFIT AND OVERHEAD FIGURE WOULD HAVE NOT BEEN AFFECTED BY THE INCREASE IN MATERIAL COSTS IN THIS CASE. IT ALSO MAY BE NOTED THAT, EVEN ASSUMING THE OVERHEAD AND PROFIT FIGURE WOULD HAVE BEEN AFFECTED BY THE CORRECTION, THE MAXIMUM THAT THE BID COULD HAVE BEEN IS STILL NEARLY $1,750,000 BELOW THE NEXT LOWEST BID, AND THAT, THEREFORE, CORRECTION OF THE BID WOULD NOT BE PREJUDICIAL TO THE OTHER BIDDERS. B-123888, MAY 9, 1955. WE HAVE SPECIFICALLY HELD THAT CORRECTION MAY BE PERMITTED TO REFLECT THE OMISSION OF DIRECT COSTS WITHOUT ANY INCREASE FOR PROFIT WHERE THE BIDDER REQUESTS CORRECTION IN SUCH FORM AND THE BID WOULD REMAIN LOW WHETHER OR NOT THE LOW BID IS AMENDED TO REFLECT THE PROFIT. B-149798, SEPTEMBER 7, 1962.

WE NOTE, HOWEVER, THAT THE BID PRICES FOR THE ALTERNATES AND UNIT PRICES FOUND ON THE SUPPLEMENT TO STANDARD FORM 21 MIGHT BE AFFECTED BY THE CORRECTION IN THE BASE BID TO REFLECT THE INTENDED MATERIAL PRICE. THIS IS ESPECIALLY TRUE WITH RESPECT TO THE DEDUCTIVE AMOUNT APPLICABLE TO ALTERNATE E FOR OMITTING THE ENTIRE SCULPTURE GARDEN AND ASSOCIATED WORK NORTH OF THE SOUTH CURB LINE AT JEFFERSON DRIVE. WE THINK THERE IS CONSIDERABLE SUBSTANCE TO YOUR EXPRESSED POSITION THAT IF THE CONTRACT WERE AWARDED WITH THE DEDUCTION OF ALTERNATE E, THE DEDUCTIVE AMOUNT SHOULD BE ADJUSTED TO REFLECT THE CORRECTION IN THE BASE BID.

BASED ON THE FOREGOING, WE ARE OF THE OPINION THAT THE BID OF PIRACCI MAY BE CORRECTED AS SPECIFIED ABOVE. ACCORDINGLY, YOUR PROTEST IS DENIED.

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