B-164736, DEC. 2, 1968

B-164736, DEC. 2, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 12, 1968, ENGGC-N, FROM THE OFFICE OF THE CHIEF OF ENGINEERS, FURNISHING THE REPORT REQUESTED IN OUR LETTER TO YOU OF JULY 10, 1968, ON THE PROTEST OF WARREN PAINTING COMPANY, INCORPORATED, ANCHORAGE, ALASKA, AGAINST THE AWARD OF A CONTRACT TO THE STEENMEYER CORPORATION, BELLINGHAM, WASHINGTON, AS THE LOW BIDDER UNDER INVITATION FOR BIDS NO. DACA85-68-B-0081, ISSUED JUNE 10, 1968, BY THE UNITED STATES ARMY ENGINEER DISTRICT, ALASKA, FOR THE EXTERIOR PAINTING OF 49 BUILDINGS AT FORT WAINWRIGHT, ALASKA.

WE ARE ENCLOSING A COPY OF OUR DECISION OF TODAY TO WARREN PAINTING COMPANY, INCORPORATED, DENYING THE PROTEST.

ALTHOUGH WE ARE NOT TAKING EXCEPTION TO THE AWARD MADE TO THE STEENMEYER CORPORATION, THERE APPEARS TO BE A SUBSTANTIAL BASIS FOR CONSIDERING THAT THE CONTRACTOR MIGHT HAVE SOUGHT TO TAKE ADVANTAGE OF KNOWN DISCREPANCIES IN THE GOVERNMENT'S STATED ESTIMATES FOR QUANTITIES OF REQUIRED MASONRY JOINT REPAIR BY SUBMITTING AN UNBALANCED BID. WE ARE ASSUMING THAT BIDDERS SHOULD HAVE REALIZED THAT THE ESTIMATES FOR 9 OF THE 25 BUILDINGS LISTED IN SCHEDULES A AND B AS REQUIRING MASONRY JOINT REPAIR WERE NOT REASONABLY ACCURATE. HOWEVER, IT APPEARS THAT SOME OF THE BIDDERS MIGHT ALSO HAVE SUSPECTED THAT THE ESTIMATES ON THE OTHER 16 BUILDINGS WERE NOT REALISTIC SINCE THE PAINTING PRICES OF THE TWO LOW BIDDERS ON THOSE BUILDINGS RANGED FROM $1,263 TO $13,377 AND IT DOES NOT SEEM PROBABLE THAT EACH OF THE 16 BUILDINGS WAS IN SUCH A POOR CONDITION AS TO REQUIRE 5,000 LINEAL FEET OF MASONRY JOINT REPAIR BEFORE PAINTING.

FURTHERMORE, THE ADMINISTRATIVE REPORT ON THE PROTEST OF WARREN PAINTING COMPANY, INCORPORATED, SETS FORTH MERELY THAT THE ORIGINAL ESTIMATES ON 16 OF THE BUILDINGS ARE SUBSTANTIALLY CORRECT AND THAT SUCH ESTIMATES WERE BASED UPON PAST EXPERIENCE AT FORT GREELY. THERE WAS FURNISHED NO DETAILED INFORMATION SHOWING HOW THE ESTIMATES WERE ARRIVED AT OR ANY COMMENTS EITHER VERIFYING OR CONTRADICTING THE PROTESTING BIDDER'S STATEMENT OF "ACCURATE PHYSICAL MEASUREMENT AND SURVEY.' THAT STATEMENT PURPORTS TO SHOW THAT 8 OF THE 11 BUILDINGS WHICH SCHEDULE A INDICATED NEEDED MASONRY JOINT REPAIR WORK CONTAINED ALMOST TWICE AS MANY LINEAL FEET OF MORTAR JOINTS AS WERE CONTAINED IN THE 3 OTHER BUILDINGS; AND THAT 5 OF THE 14 SCHEDULE B BUILDINGS, LISTED IN THE SCHEDULE AS REQUIRING MASONRY JOINT REPAIR, CONTAINED NO MORE THAN 38,790 LINEAL FEET OF MORTAR JOINTS. THE GOVERNMENT'S TOTAL ESTIMATE OF 25,000 LINEAL FEET OF REQUIRED MASONRY JOINT REPAIR ON THE REFERRED TO 5 BUILDINGS LISTED IN SCHEDULE B COVERS APPROXIMATELY 65 PERCENT OF THE TOTAL MORTAR JOINTS ON SUCH BUILDINGS, AS COMPUTED BY WARREN PAINTING COMPANY, INCORPORATED, AND THAT PERCENTAGE WOULD SEEM TO BE INDICATIVE OF A GROSS OVERESTIMATE UNLESS THE FIVE BUILDINGS WERE IN A VERY POOR CONDITION WHEN THE GOVERNMENT'S ESTIMATE WAS MADE.

IN THE CIRCUMSTANCES, THE RECORD OF THIS CASE APPEARS REASONABLY TO SUGGEST THAT A MORE THOROUGH INVESTIGATION OF THE ENTIRE MATTER SHOULD HAVE BEEN MADE PRIOR TO SOLICITING BIDS TO ELIMINATE ANY POSSIBILITY OF FAVORING A BIDDER WHO MIGHT HAVE DECIDED TO SUBMIT AN UNBALANCED BID WITH KNOWLEDGE OF THE FACT THAT THE AMOUNT OF THE REQUIRED MASONRY JOINT REPAIR WORK WOULD BE CONSIDERABLY LESS THAN AS ESTIMATED BY THE GOVERNMENT. ALSO APPEARS THAT A MORE THOROUGH INVESTIGATION OF THE COMPLAINT MADE BY THE PROTESTING BIDDER SHOULD HAVE BEEN MADE PRIOR TO CONTRACT AWARD PARTICULARLY WITH REFERENCE TO THE ESTIMATES MADE IN REGARD TO 16 OF THE 25 BUILDINGS LISTED IN THE TWO SCHEDULES OF THE INVITATION AS REQUIRING MASONRY JOINT REPAIR. AS THE MATTER NOW STANDS, THERE EXISTS A REASONABLE DOUBT WHETHER, AS STATED IN THE ADMINISTRATIVE REPORT,"THERE IS NO PROOF OF ANY IRREGULARITY OF SUCH SUBSTANTIAL NATURE WHICH AFFECTED FAIR AND COMPETITIVE BIDDING.' IT IS POSSIBLE THAT THE REVISED TOTAL ESTIMATE OF AT LEAST 85,000 LINEAL FEET OF MASONRY JOINT REPAIR COULD HAVE BEEN REDUCED BY AS MUCH AS 45,000 LINEAL FEET IF AN ADEQUATE INVESTIGATION OF THE PROTESTING BIDDER'S COMPLAINT HAD BEEN MADE AND, AS INDICATED IN OUR DECISION, THIS MIGHT HAVE RESULTED IN A DETERMINATION TO MAKE AN AWARD TO WARREN PAINTING COMPANY, INCORPORATED, AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER UNDER SCHEDULES A AND B.

IN VIEW OF THE FOREGOING, WE BELIEVE THAT YOUR DEPARTMENT SHOULD TAKE APPROPRIATE ACTION TO INSURE THAT IN FUTURE CASES OF THIS NATURE THERE WILL BE PROVIDED IN BID INVITATIONS REASONABLY ACCURATE ESTIMATES FOR WORK TO BE PERFORMED ON A UNIT PRICE BASIS, SO THAT FAIR AND REASONABLE BID EVALUATIONS CAN BE MADE CONCERNING COMBINATIONS OF LUMP SUM AND UNIT PRICE QUOTATIONS; AND THAT WHERE, AS HERE, THE GOVERNMENT'S ESTIMATES ARE QUESTIONED AFTER OPENING OF BIDS, THERE WILL BE A THOROUGH INVESTIGATION OF THE PROTESTING BIDDER'S CONTENTIONS PRIOR TO THE MAKING OF A CONTRACT AWARD.