B-127773, MAY 14, 1956

B-127773, MAY 14, 1956

TO HONORABLE LEWIS L. STRAUSS, CHAIRMAN, ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO LETTER OF APRIL 30, 1956, WITH ENCLOSURES, FROM THE ACTING GENERAL MANAGER, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE TRI-STATE PAINTING COMPANY, PORTLAND, OREGON, ALLEGES IT MADE IN ITS BID OPENED ON APRIL 5, 1956.

THE HANFORD OPERATIONS OFFICE, RICHLAND, WASHINGTON, BY INVITATION NO. AT/45-1/-1118, REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK REQUIRED FOR PAINTING OF EXISTING WATER PLANT STRUCTURES AND APPURTENANCES, 100-DR AREA, HANFORD WORKS, RICHLAND, WASHINGTON. IN RESPONSE, THE TRI-STATE PAINTING COMPANY SUBMITTED A BID DATED APRIL 3, 1956, OFFERING TO FURNISH THE MATERIALS AND PERFORM THE WORK FOR THE SUM OF $28,200. THE 13 OTHER BIDS ON THE PROJECT RANGED FROM $51,500 TO $86,000 AND THE GOVERNMENT ESTIMATE OF THE COST OF THE WORK WAS $63,600.

IN A MEMORANDUM DATED APRIL 10, 1956, FROM THE CHIEF, CONTRACTING SECTION, HANFORD OPERATIONS OFFICE, IT WAS STATED THAT ONE OF TWO BROTHERS CONSTITUTING THE PARTNERSHIP OF THE TRI-STATE PAINTING COMPANY WAS PRESENT AT THE BID OPENING ON THURSDAY, APRIL 5, 1956; THAT ON MONDAY, APRIL 9, THE SAME BROTHER VISITED HIS OFFICE AND ADVISED THAT THE COMPANY HAD MADE AN ERROR OF $20,000 IN ITS BID, IN THAT IT HAD FAILED TO INCLUDE IN THE TOTAL ITS ESTIMATED PRICE FOR PAINTING FOUR CLEARWELL TANKS AT $5,000 EACH; AND THAT IN SUPPORT OF THE ALLEGATION OF ERROR, THE COMPANY'S SUMMARY ESTIMATE SHEET WAS SUBMITTED, SHOWING THE OMISSION. THE MEMORANDUM STATED FURTHER THAT IT WAS EXPLAINED THAT THE COST OF THE VARIOUS ITEMS OF WORK HAD BEEN ESTIMATED ON SCRATCH PAPER AND THAT SUCH INFORMATION WAS TRANSFERRED TO A SUMMARY SHEET; THAT THE COMPANY'S BOOKKEEPER WAS INSTRUCTED TO ADD UP THE VARIOUS AMOUNTS ON THE SUMMARY SHEET AND TO TRANSFER THE SUM TOTAL TO THE SIGNED BID FORM; AND THAT IN ADDING UP THE VARIOUS AMOUNTS ON THE SUMMARY SHEET, THE BOOKKEEPER FAILED TO NOTE THAT THE UNIT PRICE FOR PAINTING THE CLEARWELL TANKS HAD NOT BEEN EXTENDED TO THE TOTAL AMOUNT COLUMN, THUS RESULTING IN THE OMISSION OF THE COST OF SUCH WORK FROM THE TOTAL BID PRICE.

IN A CONFIRMING LETTER DATED APRIL 12, 1956, THE COMPANY REQUESTED THAT ITS BID PRICE FOR THE PROJECT BE INCREASED FROM $28,200 TO $48,200 TO COVER THE COST OF THE OMITTED WORK OR, IN THE ALTERNATIVE, THAT IT BE PERMITTED TO WITHDRAW ITS BID ON THE PROJECT. WITH THE LETTER THE COMPANY SUBMITTED THE AFFIDAVIT OF ITS BOOKKEEPER, WHICH CONFIRMED THE EXPLANATION PREVIOUSLY FURNISHED.

BY AN UNDATED LETTER WHICH WAS RECEIVED ON APRIL 10, 1956, THE COMPANY SUBMITTED THE SCRATCH PAPER USED IN PREPARING ITS SUMMARY ESTIMATE SHEET. ONE OF THE SCRATCH SHEETS INDICATES THAT THE COMPANY ESTIMATED THE COST OF PAINTING ONE TANK AS $5,100, WHICH IT REDUCED TO $5,000, AND THAT IT MULTIPLIED THAT AMOUNT BY FOUR, THE NUMBER OF TANKS TO BE PAINTED, TO ARRIVE AT A TOTAL PRICE OF $20,000 FOR THE FOUR TANKS. THE SUMMARY ESTIMATE SHEET SHOWS A UNIT PRICE OF $5,000 FOR PAINTING FOUR CLEARWELL TANKS BUT SUCH UNIT PRICE WAS NOT EXTENDED INTO THE TOTAL AMOUNT COLUMN WHICH WAS ADDED UP TO ARRIVE AT THE $28,200 FIGURE INSERTED IN THE BID.

ON THIS RECORD, THE GENUINENESS OF WHICH APPEARS TO BE ACCEPTED BY THE ADMINISTRATIVE OFFICERS, THERE IS NO DOUBT THAT THE COMPANY FAILED TO INCLUDE IN ITS BID PRICE ITS ESTIMATED AND INTENDED PRICE OF $20,000 FOR PAINTING THE FOUR CLEARWELL TANKS. ACCORDINGLY, SINCE THE ERROR WAS ALLEGED AND EXPLAINED PRIOR TO AWARD AND THE INTENDED BID PRICE FULLY ESTABLISHED, THE BID OF THE TRI-STATE PAINTING COMPANY MAY BE CORRECTED TO SHOW THE PRICE AS $48,200, AND AS SO CORRECTED MAY BE CORRECTED TO SHOW THE PRICE AS $48,200, AND AS SO CORRECTED MAY BE CONSIDERED IN MAKING THE AWARD. IN THE EVENT OF AWARD TO THE TRI STATE PAINTING COMPANY, A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.

THE BOOKKEEPER'S AFFIDAVIT, A COPY OF THE CONTRACTOR'S LETTER OF APRIL 12, 1956, AND THE CONTRACTOR'S ESTIMATE SHEETS ARE BEING RETAINED IN THIS OFFICE. THE OTHER PAPERS ARE RETURNED.