B-135726, APR. 16, 1958

B-135726, APR. 16, 1958

TO MR. E. F. HOGLUND, DIRECTOR, CONSTRUCTION SERVICE, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED APRIL 3, 1958, WITH ENCLOSURES, REQUESTING ADVICE AS TO THE ACTION THAT SHOULD BE TAKEN WITH REGARD TO AN ERROR IN BID ALLEGED BY CONSOLIDATED HEATING COMPANY, MUSKEGON, MICHIGAN.

IN RESPONSE TO INVITATION FOR BIDS ON PROJECT NO. 20-5139, COVERING THE CONVERSION OF ONE 300 H.P. BOILER FROM COAL TO GAS AND CONSTRUCTION OF A ONE STORY MASONRY GAS METER HOUSE AND CERTAIN OTHER ITEMS, ALL OF WHICH YOUR OFFICE HAD ESTIMATED WOULD COST BETWEEN $20,000 AND $30,000, CONSOLIDATED HEATING COMPANY BID $13,750. THE BID WAS BELIEVED TO BE ERRONEOUS BECAUSE IT WAS OUT OF LINE WITH THE OTHER SEVEN BIDS RECEIVED WHICH RANGED FROM $19,521 TO $29,480. IN RESPONSE TO A REQUEST TO VERIFY AND CONFIRM THE BID PRICE, THE BIDDER ADVISED THAT ITS PRICE FAILED TO INCLUDE THE COST OF THE GAS METER HOUSE. THE BIDDER SUBMITTED ITS WORKSHEET, SHOWING HOW IT ARRIVED AT ITS BID PRICE, AND A LETTER FROM A SUBCONTRACTOR, DATED THE DAY AFTER THE BID OPENING, WHICH STATES:

"WE WILL DO THE CARPENTER WORK AND MASONERY (SIC) AND FURNISH THE MATERIAL FOR A COST OF $5275.00. AS PER PLANS SUBMITTED.'

THIS LETTER PURPORTEDLY COVERS THE GAS METER HOUSE AND THE BIDDER STATES THAT THE BID FOR THE ENTIRE PROJECT SHOULD HAVE BEEN $19,025, APPARENTLY $13,750 PLUS $5,275.

WHEN THE LOW BID IS SO FAR BELOW THE OTHER BIDS AND THE GOVERNMENT ESTIMATE AS TO STRONGLY SUGGEST THAT IT IS ERRONEOUS, THERE CAN BE NO BONA FIDE ACCEPTANCE UNLESS AND UNTIL THE BIDDER HAS BEEN GIVEN AN OPPORTUNITY TO VERIFY IT OR ESTABLISH ERROR. SATISFACTORY PROOF OF ERROR AUTHORIZES THE WITHDRAWAL OF THE LOW BID WITHOUT FORFEITURE OF THE BID SECURITY. THE ALLEGATION OF ERROR MAY NOT BE ACCEPTED, HOWEVER, TO AUTHORIZE CORRECTION OF THE BID, UNLESS IT IS ACCOMPANIED BY CLEAR AND CONVINCING EVIDENCE OF WHAT THE BID WOULD HAVE BEEN BUT FOR THE ERROR. SEE 17 COMP. GEN. 416, 418; AND 35 ID. 279, 281.

HERE, THE BELIEF THAT THE BID WAS ERRONEOUS WAS CONFIRMED, BUT THE EVIDENCE SUBMITTED DOES NOT ESTABLISH CONVINCINGLY WHAT THE BID WAS INTENDED TO BE AT THE TIME OF PREPARING IT BEFORE THE OPENING, SINCE IT DOES NOT APPEAR THAT THE BIDDER AT THAT TIME HAD OBTAINED OR ESTIMATED ANY PRICE FOR THE OMITTED ITEM. THEREFORE, THE BID SHOULD BE DISREGARDED WITHOUT FORFEITURE OF THE BID SECURITY.

THE ENCLOSURES SUBMITTED WITH YOUR LETTER OF APRIL 3 ARE RETURNED HEREWITH.