B-182647, FEB 12, 1975

B-182647, FEB 12, 1975

WHERE LOW BIDDER ALLEGES MISTAKE IN BID PRIOR TO AWARD, AND SEEKS TO HAVE BID "CORRECTED" THROUGH A POST-BID OPENING RECOMPUTATION OF A SIGNIFICANT PORTION OF ITS BID, GAO HAS NO BASIS FOR DISAGREEING WITH CONTRACTING OFFICER'S DETERMINATION PERMITTING WITHDRAWAL BUT NOT CORRECTION WHERE HE FOUND "CLEAR AND CONVINCING" EVIDENCE OF MISTAKE BUT NOT OF INTENDED BID PRICE.

DYNAMECH CORPORATION:

INVITATION FOR BIDS (IFB) NO. N00600-75-B-0012 WAS ISSUED JULY 23, 1974, BY THE NAVAL REGIONAL PROCUREMENT OFFICE, WASHINGTON NAVY YARD, WASHINGTON, D.C., FOR THE SUPPLY OF FOUR ITEMS OF SHIP-TO-SHORE CONVEYOR BELTS IN ACCORDANCE WITH STIPULATED SPECIFICATIONS. BID OPENING WAS CONDUCTED ON AUGUST 21, 1974, AND SEVEN BIDS WERE RECEIVED. SINCE THE DIFFERENCE IN THE LOW BID OF DYNAMECH CORPORATION AS COMPARED TO THE NEXT LOW BID WAS OF SUCH A MAGNITUDE (APPROXIMATELY 30 PERCENT LOWER) DYNAMECH WAS REQUESTED BY LETTER OF AUGUST 21, 1974, TO REVIEW ITS PRICES AND SPECIFICATIONS TO DETERMINE WHETHER AN ERROR HAD BEEN COMMITTED, AND IF SUCH WAS IN FACT THE CASE, TO SUBMIT A WRITTEN STATEMENT AS TO THE NATURE OF THE ERROR, DOCUMENTATION OF THE ERROR AND A REQUEST FOR CORRECTION OR WITHDRAWAL OF THE BID.

BY LETTER OF SEPTEMBER 9, 1974, DYNAMECH ADVISED THE PROCURING ACTIVITY THAT IT HAD CONDUCTED A DETAILED REVIEW AND HAD DISCOVERED TWO MAJOR ERRORS. DYNAMECH EXPLAINED THAT IT HAD UTILIZED ITS COST DOCUMENTS FOR A 1970 BID ON A VIRTUALLY IDENTICAL ITEM ON WHICH IT WAS THE SECOND LOW BIDDER, AND FROM SUCH BASE, AFTER VARIOUS ADJUSTMENTS, COMPUTED ITS CURRENT PRICE FOR THE ITEM BY APPLYING AN INFLATIONARY FACTOR OF 25 PERCENT TO THE 1970 MATERIAL COSTS. IN SO DOING, HOWEVER, DYNAMECH STATED THAT IT NEGLECTED TO APPLY THE 25 PERCENT INFLATIONARY FACTOR TO ITS "MECHANICAL" COST. DYNAMECH'S PRESIDENT ADVISED THAT HE COULD FURNISH NO LOGICAL REASON FOR HIS ERROR EXCEPT THAT "PERHAPS A PHONE CALL INTERRUPTED ME." IT WAS STATED THAT THE 1970 MECHANICAL COST SUBTOTAL OF $2,900 HAD BEEN USED IN COMPUTING THE CURRENT BID, BUT THE 25 PERCENT INFLATIONARY FACTOR HAD NOT BEEN COMPUTED IN. FURTHERMORE, DYNAMECH ADVISED THAT IN ORDER TO "MAKE SURE OF OUR BID," IT REVIEWED ITS COST DATA AND THEN COMPILED A "DETAILED NEW MECHANICAL MATERIAL COST SHEET" AS A RESULT OF THE AUGUST 21 LETTER ASKING IT TO CONFIRM ITS PRICES. IN SO DOING, DYNAMECH STATES THAT IT COULD NOT FIND THE COST OF A GEAR BOX UNDER EITHER ITS MECHANICAL OR ELECTRICAL HEADINGS IN THE 1970 ESTIMATES, BUT UPON QUESTIONING THE ELECTRICAL ESTIMATOR, THE LATTER ADVISED THAT HE REMEMBERED REDUCING THE MOTOR AND GEAR BOX PRICE FOR THE 1970 BID FROM $1,390 TO $740 WITH THE NOTATION THAT THE ESTIMATE USED "3 TO 1 SPROCKETS." SINCE THE GEAR BOX WAS ALLEGEDLY OMITTED FROM THE 1974 BID, DYNAMECH'S POST-BID OPENING WORKSHEETS, DATED SEPTEMBER 19, 1974, SHOW A RECOMPUTATION OF ITS MECHANICAL MATERIALS COSTS TO ALLOW FOR BOTH INFLATION AND THE GEAR BOX, ALONG WITH SOME OTHER POST-BID OPENING ADJUSTMENTS. BASED UPON SUCH RECOMPUTATIONS, DYNAMECH REQUESTED ADJUSTMENT OF ITS UNIT PRICES ON ITEMS 0001 AND 0003 FROM THE ORIGINAL BID OF $11,299 TO $13,274, AND ON ITEMS 0002 AND 0004 FROM THE $10,310 BID, TO $11,225. IN SO "CORRECTING" ITS BID, DYNAMECH STATED THAT ITS REVISED PRICE IS STILL $57,678 BELOW THE SECOND LOW BID, PRESENTING CONSIDERABLE SAVINGS TO THE GOVERNMENT.

BY LETTER OF SEPTEMBER 12, 1974, TO THE PROCURING ACTIVITY DYNAMECH SOUGHT TO ESTABLISH THE VALIDITY OF THE 25 PERCENT INFLATIONARY FACTOR WHICH IT APPLIED TO ITS 1970 COSTS. IT ADVISED THAT ITS PRIMARY BUSINESS IS COMPRISED OF THE CONSTRUCTION OF MATERIAL HANDLING SYSTEMS FOR BAKERIES, USING PLASTIC OR STEEL WIRE SHOPPING BASKETS. IN THIS REGARD, THE LETTER ENCLOSED WORKSHEETS FOR A 1974 COMMERCIAL ORDER, AND THOSE FOR A SIMILAR COMMERCIAL PROJECT IN 1970. THE WORKSHEETS FOR THE 1974 COMMERCIAL PROJECT INCLUDE THE RECOMMENDATION TO "DOUBLE THE STEEL PRICE; INCREASE ELECTRICAL 20 PERCENT; INCREASE MECHANICAL 25 PERCENT." THE ACTUAL COMPLETED COMPUTATIONS INDICATE AN INCREASE FOR MECHANICAL ITEMS OF 25.71 PERCENT. THESE WORKSHEETS WERE SUBMITTED FOR THE PURPOSE OF ESTABLISHING THE 25 PERCENT FACTOR FOR THE BID HEREIN AT ISSUE.

ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 2-406.3(3) (1974 ED.) PERMITS "CORRECTION" OF A BID ONLY WHERE THERE IS "CLEAR AND CONVINCING EVIDENCE" OF BOTH THE EXISTENCE OF A MISTAKE AND THE BID PRICE ACTUALLY INTENDED. BASED UPON THE FOREGOING EVIDENCE, THE CONTRACTING OFFICER FOUND THAT WHILE THERE WAS CLEAR AND CONVINCING EVIDENCE AS TO THE EXISTENCE OF A MISTAKE, THERE WAS NOT CLEAR AND CONVINCING EVIDENCE AS TO THE BID PRICE ACTUALLY INTENDED. ACCORDINGLY, DYNAMECH WAS ADVISED THAT IT WOULD BE PERMITTED TO WITHDRAW ITS BID BUT NOT CORRECT IT. AWARD WAS SUBSEQUENTLY MADE TO THE NEXT LOW BIDDER.

WHILE THIS OFFICE ORIGINALLY CONSIDERED CORRECTION OF MISTAKES IN BIDS ALLEGED AFTER BID OPENING AND PRIOR TO AWARD, THIS AUTHORITY WAS SUBSEQUENTLY DELEGATED TO THE PROCURING AGENCIES. 51 COMP. GEN. 1, 3(1971). ALTHOUGH WE HAVE RETAINED THE RIGHT TO REVIEW THE ADMINISTRATIVE DETERMINATION, THE WEIGHT TO BE GIVEN THE EVIDENCE IS A QUESTION OF FACT TO BE CONSIDERED BY THE ADMINISTRATIVELY DESIGNATED EVALUATOR OF THE EVIDENCE, AND SUCH DETERMINATION WILL NOT BE DISTURBED BY OUR OFFICE UNLESS THERE IS NO REASONABLE BASIS FOR THE DETERMINATION. 51 COMP. GEN. 1, 3, SUPRA. MOREOVER, WHILE THE EVIDENCE NECESSARY TO ESTABLISH THE EXISTENCE OF A MISTAKE MUST ALSO BE "CLEAR AND CONVINCING", THE DEGREE OF PROOF REQUIRED IS IN NO WAY COMPARABLE TO THAT NECESSARY TO ALLOW CORRECTION. 52 COMP. GEN. 258, 261 (1972). IN THIS REGARD, THE PROTESTER DOES NOT REQUEST CORRECTION OF AN ERROR MANIFESTED BY ITS WORKSHEETS, BUT IS SEEKING CORRECTION OF AN ALLEGED MISTAKE ON THE BASIS OF COMPUTATIONS PERFORMED AFTER THE OPENING OF BIDS. WITHOUT THE BENEFIT OF SUCH POST-BID OPENING WORKSHEETS, ENTITLED "REWORK POST AWARD," THERE IS NO EVIDENCE TO PERMIT AN ASCERTAINMENT OF THE INTENDED BID. EVEN THE 25 PERCENT INFLATIONARY FACTOR WHICH THE PROTESTER WISHES APPLIED DID NOT APPEAR ON THE WORKSHEETS FOR THE BID IN QUESTION, BUT WAS SUPPLIED IN THE FORM OF EXTRINSIC EVIDENCE FROM WORKSHEETS FOR UNRELATED COMMERCIAL PROJECTS. BASED UPON OUR REVIEW OF THE RECORD, WE FIND NO BASIS FOR DISAGREEING WITH THE CONTRACTING OFFICER'S CONCLUSION THAT WHILE THE PROTESTER COMMITTED SOME ERRORS IN ITS BID, THE EVIDENCE WAS NOT CLEAR AND CONVINCING AS TO THE INTENDED BID PRICE.

IN VIEW THEREOF, WE HAVE NO BASIS TO OBJECT TO REJECTION OF THE DYNAMECH BID AND AWARD TO THE NEXT LOW RESPONSIVE, RESPONSIBLE BIDDER.