B-128184, JUN. 29, 1956

B-128184, JUN. 29, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 5, 1956, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR H. T. HAYASHI CONTRACTOR, HONOLULU, TERRITORY OF HAWAII, ALLEGES HE MADE IN HIS BID ON WHICH CONTRACT NO. DA 94-601-PAC-389, DATED JUNE 30, 1954, WAS AWARDED.

THE OFFICE OF THE POST ENGINEER, SCHOFIELD BARRACKS, TERRITORY OF HAWAII, BY INVITATION NO. SB 94-601-ENG-41 REQUESTED BIDS--- TO BE OPENED JUNE 28, 1954--- FOR FURNISHING MATERIALS AND LABOR AND PERFORMING ALL WORK NECESSARY FOR THE REHABILITATION OF FOUR BACHELOR OFFICERS' QUARTERS IN AREA S, SCHOFIELD BARRACKS. UNDER ITEMS 1 TO 4, INCLUSIVE, PROSPECTIVE BIDDERS WERE REQUIRED TO QUOTE A UNIT PRICE FOR THE WORK IN EACH BUILDING AND UNDER ITEM 5, BIDDERS WERE REQUIRED TO QUOTE A LUMP SUM PRICE FOR THE WORK IN ALL FOUR BUILDINGS. THE BID OF H. T. HAYASHI CONTRACTOR WAS NOT FORWARDED HERE BUT IT APPEARS FROM THE ABSTRACT OF BIDS THAT MR. HAYASHI, WHO WAS THE NEXT LOWEST BIDDER ON THE PROJECT, OFFERED TO PERFORM THE WORK UNDER ITEM 5 FOR THE LUMP SUM OF $12,472. THE ABSTRACT ALSO SHOWS THAT THE LOWEST BID ON ITEM 5, IN THE AMOUNT OF $12,416, WAS SUBMITTED BY MODERN CONTRACTING COMPANY, LTD., AND THAT THE FOUR OTHER BIDDERS ON THAT ITEM SPECIFIED PRICES RANGING FROM $17,539 TO $33,684. IT IS REPORTED THAT THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $16,875.

IN AN UNDATED REPORT AND A REPORT DATED APRIL 17, 1956, FROM THE CONTRACTING OFFICER, IT WAS STATED THAT BY LETTER DATED JUNE 29, 1954, THE LOWEST BIDDER, MODERN CONTRACTING COMPANY, LTD., REQUESTED PERMISSION TO WITHDRAW ITS BID ON THE PROJECT FOR THE REASON IT HAD DISCOVERED THAT IT HAD FAILED TO INCLUDE IN ITS BID PRICE THE COST OF CERTAIN PAINTING WORK ON WHICH, IT STATED, IT HAD RECEIVED A QUOTATION IN THE AMOUNT OF $3,156.72; AND THAT BECAUSE THE COMPANY'S ESTIMATE SHEETS ESTABLISHED ITS INTENDED BID PRICE OF $15,572 FOR ITEM 5, ITS BID WAS CORRECTED ACCORDINGLY. IT WAS ALSO STATED THAT ON JUNE 29, 1954, THE NEXT LOWEST BIDDER ON ITEM 5, MR. HAYASHI, VERBALLY ALLEGED THAT HE HAD MADE AN ERROR IN HIS BID AND REQUESTED THAT HIS BID PRICE FOR THAT ITEM BE INCREASED BY $3,000 TO $15,472 TO COVER THE COST OF CERTAIN WORK ALLEGED TO HAVE BEEN OMITTED FROM HIS ESTIMATE SHEETS; AND THAT BECAUSE THE INTENDED BID PRICE OF MR. HAYASHI WAS LOWER THAN THE INTENDED BID PRICE OF MODERN CONTRACTING COMPANY, LTD., THE BID OF MR. HAYASHI WAS ACCEPTED ON THE BASIS OF HIS BID PRICE OF $12,472 FOR ITEM 5, SUBJECT TO CORRECTION, IF AUTHORIZED, BY OUR OFFICE, AND MR. HAYASHI ACCEPTED THE AWARD UPON THAT CONDITION.

THE GREAT DISPARITY BETWEEN THE BID OF THE MODERN CONTRACTING COMPANY, LTD., AND THE OTHER CORRECT BIDS AND THE GOVERNMENT'S ESTIMATE, SUFFICIENTLY WARRANTS THE CONCLUSION, PRIMA FACIE, THAT SUCH A BONA FIDE MISTAKE WAS MADE BY THE COMPANY AS TO AUTHORIZE THE WITHDRAWAL OF ITS BID WITHOUT FORFEITURE OF THE BID SECURITY. SINCE THE COMPANY WAS NOT AWARDED THE SUBJECT CONTRACT, THE ACTION OF THE CONTRACTING OFFICER IN CORRECTING THE COMPANY'S BID PRICE TO READ $15,572 WILL NOT BE QUESTIONED.

IN A CONFIRMING LETTER DATED JUNE 29, 1954, MR. HAYASHI STATED:

"SUBJECT: UNIT BID PRICES - SB 94-601-54-ENG-41 REHAB. OF FOUR (4) B.O.Q.-S, AREA S

"THIS IS IN REGARD TO OUR TELEPHONE CONVERSATION OF DAY, ALLEGING OUR ERROR IN OUR BID ITEMS FOR THE ABOVE SUBJECT PROJECT.

"LABOR AND MATERIAL FOR INSTALLING 1/4" PLYWOOD, 1/2" CANEC, AND BATTENS FOR NEW PARTITIONS AND WALLS IN THE BUILDINGS WERE OMITTED BECAUSE PLANS DO NOT INDICATE ANY NEW WORK ON THE EXISTING WORK.

"REFERENCE IS MADE ON SHEET NO. 1 OF THE PLAN UNDER THE LEGENDS. LEGEND SHOWS "NO WORK" FOR EXISTING WORK, WHILE ALL NEW WORK IS INDICATED BY DARK LINES ON PLAN.

"PLEASE INCREASE OUR CONTRACT PRICE IN THE AMOUNT OF THREE THOUSAND ($3,000.00) TO A NEW CONTRACT PRICE AS FOLLOWS:

"ITEM NO. 1......................$ 3,729.00

DO. DO. 2......................$ 3,915.00

DO. DO. 3......................$ 3,913.00

DO. DO. 4......................$ 3,915.00

DO. DO. 5......................$15,472.00"

IN HIS UNDATED REPORT THE CONTRACTING OFFICER STATES THAT THE DRAWINGS AND SPECIFICATIONS ON INSTALLATION OF PLYWOOD ARE IN CONFLICT. IN SUPPORT OF HIS ALLEGATION OF ERROR, MR. HAYASHI SUBMITTED HIS ORIGINAL ESTIMATE SHEETS AND A REVISED ESTIMATE SHEET FOR THE OMITTED WORK, THE MAJOR PORTION OF WHICH APPEARS TO COVER THE INSTALLATION OF PLYWOOD. MR. HAYASHI'S ORIGINAL ESTIMATE SHEETS SHOW VARIOUS ITEMS OF COST INCIDENT TO THE REHABILITATION OF THE FOUR BUILDINGS AND NONE OF THESE VARIOUS ITEMS OF COST APPEAR TO INCLUDE THE COST OF INSTALLING THE PLYWOOD. ON THE RECORD, THERE IS NO ROOM FOR DOUBT THAT MR. HAYASHI OMITTED THE COST OF CERTAIN WORK FROM HIS BID PRICE.

IN THE CIRCUMSTANCES, AND SINCE THE ERROR WAS ALLEGED AND SATISFACTORILY EXPLAINED PRIOR TO AWARD--- WHICH AWARD WAS MADE AND ACCEPTED SUBJECT TO CORRECTION BY OUR OFFICE--- CONTRACT NO. DA 94-601 PAC-389 MAY BE AMENDED TO INCREASE THE CONSIDERATION TO $15,472, WHICH AMOUNT IS STILL LOWER THAN ANY OF THE OTHER CORRECT BIDS RECEIVED ON THE PROJECT.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE CONTRACT.

THE ABSTRACT OF BIDS, MR. HAYASHI'S ESTIMATE SHEETS, AND THE CONTRACTING OFFICER'S STATEMENTS ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.