B-135899, MAY 8, 1958

B-135899, MAY 8, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED APRIL 18, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS) WHO REQUESTS A DECISION REGARDING AN ERROR KEANE CONSTRUCTION CO., INC., FORT LEE, NEW JERSEY, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-36-109-ENG-6625 IS BASED.

IN RESPONSE TO THAT PART OF INVITATION FOR BIDS NO. ENG-36-109-57-78 AND ADDENDA NOS. 1 AND 2 COVERING THE CONSTRUCTION OF SEWAGE TREATMENT FACILITIES AND CERTAIN OTHER ITEMS AT SITE PH 25CL, WHICH THE CONTRACTING OFFICE HAD ESTIMATED WOULD COST $99,244.32, KEANE CONSTRUCTION CO., INC., BID $100,332. THE OTHER SIX BIDS RECEIVED FOR SITE PH 25CL RANGED FROM $124,495.60 TO $190,960.50. IMMEDIATELY AFTER THE BID OPENING, THE BIDDER REQUESTED PERMISSION TO WITHDRAW ITS BID ON THE GROUND THAT IT MUST HAVE MADE AN ERROR BECAUSE ITS BID WAS TOO LOW. ALSO, ON THE SAME DATE OF THE BID OPENING, JUNE 27, 1957, THE COMPANY SENT A TELEGRAM TO THE CONTRACTING OFFICER STATING THAT A REVIEW OF ITS BID HAD REVEALED ARITHMETICAL AND COMPUTATION ERRORS IN THE APPROXIMATE AMOUNT OF $6,000. ON THE SAME DATE, THE CONTRACTING OFFICER ADVISED THE BIDDER BY TELEGRAM TO SUBMIT AFFIDAVITS AND WORKSHEETS SUBSTANTIATING THE ALLEGATION OF ERROR AND EVIDENCE OF THE INTENDED BID PRICE. BY TELEGRAM DATED JUNE 28, 1957, THE BIDDER STATED THAT IT WOULD ACCEPT AWARD OF A CONTRACT FOR SITE PH 25CL IN THE AMOUNT OF $100,322, BUT THAT IT RESERVED THE RIGHT TO FORWARD TO HIGHER AUTHORITY FOR REVIEW EVIDENCE OF ERROR NOT TO EXCEED $11,000, AND THAT SUBSTANTIATING DATA WOULD FOLLOW THE "FIRST OF NEXT WEEK.' ON THE SAME DAY, THE SUBJECT BID WAS ACCEPTED BY THE CONTRACTING OFFICER. LETTER DATED SEPTEMBER 18, 1957, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT THE SUBSTANTIATING DATA HAD NOT BEEN RECEIVED AND REQUESTED THAT THE MATTER BE GIVEN PROMPT ATTENTION. IT WAS NOT UNTIL DECEMBER 2, 1957, THAT THE DATA, UNDER COVER LETTER DATED NOVEMBER 29, 1957, WAS RECEIVED IN THE CONTRACTING OFFICE.

IN ITS AFFIDAVIT, THE CONTRACTOR REQUESTS RELIEF IN THE TOTAL AMOUNT OF $8,450 BY REASON OF ERRORS ALLEGEDLY MADE AS FOLLOWS:

(1) SUPERINTENDENT AND CLEANUP LABOR CALCULATED ON THE BASIS OF 26 INSTEAD OF 41 WEEKS WHICH IS ALLEGEDLY PROVIDED IN THE SPECIFICATIONS;

(2)SUPERINTENDENT'S SALARY ($175 TIMES WEEKS) EXTENDED TO $3,550INSTEAD OF $4,550;

(3) ERRORS ALLEGED IN (1) AND (2) RESULTED IN FURTHER ERROR IN COMPUTATION OF OVERHEAD WHICH WAS FIGURED AS 17 PERCENT OF DIRECT AND OVERHEAD LABOR;

(4) OMISSION OF $190 FOR SAFETY SIGNS;

(5) UNDERESTIMATED COST OF MECHANICAL SEWAGE SHREDDER PURCHASED FROM SOLE SOURCE OF SUPPLY;

(6) MISCALCULATED AMOUNT OF FILL REQUIRED FOR GRADING IMHOFF TANK WITH RESULTANT ERROR IN COMPACTION OF FILL;

(7) ERRORS ALLEGED IN (1) THROUGH (6) RESULTED IN FURTHER ERROR IN COMPUTATION OF PROFIT WHICH WAS FIGURED AS 10 PERCENT; AND

(8) ERRORS ALLEGED RESULTED IN UNDERESTIMATE OF BOND PREMIUM WHICH WAS FIGURED AS ONE PERCENT.

THE CONTRACTOR TOOK FIVE MONTHS TO SUBMIT EVIDENCE OF ITS ALLEGED ERROR AND INTENDED BID PRICE. THE RULE WITH RESPECT TO THE SUBMISSION OF EVIDENCE OF ERROR IS STATED IN 11 COMP. GEN. 445 AT PAGE 446:

"THE NUMEROUS DECISIONS OF THIS OFFICE HAVE BEEN TO THE EFFECT THAT IN ORDER TO AUTHORIZE THE CORRECTION OF A BID ON THE BASIS OF A MISTAKE ALLEGED AFTER THE OPENING, THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTS, AND HOW IT OCCURRED. IN OTHER WORDS, THERE SHOULD BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS, IN FACT, A BONA FIDE MISTAKE IN THE BID, AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR IS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR OF AVOIDING THE CONSEQUENCES OF AN ILL-ADVISED BID. 9 COMP. GEN. 339.'

AND IN 17 COMP. GEN. 599 AT PAGE 600 IT IS STATED:

"IT IS NOT SUFFICIENT IN CASES WHERE BIDS ARE OPENED AND THE AMOUNTS OF ALL THE BIDS DISCLOSED, THAT THE LOW BIDDER MERELY ALLEGE ERROR IN ITS BID IN ORDER TO BE RELIEVED OF FURNISHING THE SUPPLIES OR MATERIALS ON WHICH IT HAS BID. IN ORDER TO OBTAIN RELIEF IN SUCH CASES THERE SHOULD BE AN IMMEDIATE SUBMISSION OF SUCH PROOF AND EXPLANATION AS TO LEAVE NOROOM FOR DOUBT THAT A BONA FIDE MISTAKE WAS MADE AND HOW IT OCCURRED. THE MERE FACT THAT YOUR BID WAS SOME 20 PERCENT OR 25 PERCENT LOWER THAN THE NEXT HIGHER BID RECEIVED IS NOT OF ITSELF SUFFICIENT EVIDENCE THAT YOU MADE A MISTAKE ON YOUR QUOTATION. * * *"

AN EXAMINATION OF THE CONTRACTOR'S WORKSHEETS REVEALS THAT IT ESTIMATED THE JOB ON SITE PH 25CL AT $100,624, THAT IT DEDUCTED $292 FROM THAT PRICE TO ARRIVE AT $100,332 AND THAT IT THEN REDUCED ITEM 3, COVERING, IN PART, THE IMHOFF TANK, BY $292 SO THAT THE COMPONENT PRICES WOULD EQUAL AND CORRESPOND TO THE TOTAL OF $100,332. ALSO, ON THE WORKSHEETS, THE CONTRACTOR FIGURED THE MATERIAL COST OF THE FILL FOR THE IMHOFF TANK TO BE $1,318, BUT IN ARRIVING AT ITS TOTAL PRICE IT INTENTIONALLY FIGURED IT AS $1,350. THE WORKSHEETS INDICATE THAT THE CONTRACTOR INTENTIONALLY RAISED OTHER COMPONENT COST ESTIMATES IN PREPARING ITS PRICES. ALL OF THE PRICE DEDUCTIONS AND ADDITIONS APPEAR TO HAVE BEEN MADE WITHOUT ANY DEFINITE PLAN OR FORMULA. THEREFORE, EVEN IF AN ERROR WERE ESTABLISHED, THERE WOULD BE SERIOUS DOUBT OF THE CONTRACTOR'S INTENDED BID PRICE.

IN REGARD TO THE CONTRACTOR'S ALLEGATION THAT IT SHOULD HAVE FIGURED ITS BID PRICE ON THE BASIS OF 41 WEEKS, THE CONTRACTING OFFICER HAS STATED THAT PARAGRAPH SC-1 OF THE SPECIFICATIONS PROVIDED THAT THE TIME OF COMPLETION OF ALL THE CONSTRUCTION ITEMS NECESSARY TO PUT THE SEWERS AND SEWAGE TREATMENT PLANTS INTO OPERATION WAS 180 CALENDAR DAYS, APPROXIMATELY 26 WEEKS, AFTER RECEIPT OF NOTICE TO PROCEED AND THAT THE TIME OF COMPLETION OF THE GRADING, TOPSOILING, SEEDING AND CLEANING UP WAS 285 CALENDAR DAYS, APPROXIMATELY 41 WEEKS, AFTER RECEIPT OF NOTICE TO PROCEED. HE STATED FURTHER THAT PARAGRAPH 30-05 REQUIRED THAT ALL SEEDING WORK WOULD BE DONE BETWEEN MARCH 15 AND JUNE 15 OR AUGUST 15 AND OCTOBER 15 AND THAT THE CITED PROVISIONS ANTICIPATED THAT THE CONSTRUCTION WOULD BE COMPLETED WELL IN ADVANCE OF THE COMMENCEMENT OF THE SEEDING DATES AND THEREFORE THE PROVISIONS ALLOWED THE CONTRACTOR TO COMPLETE THE CONTRACT WITHIN 285 DAYS. THE CONTRACTING OFFICER HAS STATED THAT THE MOST TIME IT WOULD TAKE TO COMPLETE THE WORK WOULD BE ONE WEEK AND THE CONTRACTOR WOULD NOT REASONABLY BE EXPECTED TO KEEP A SUPERINTENDENT AND CLEANUP LABOR AVAILABLE IN THE INTERIM BETWEEN THE COMPLETION OF THE CONSTRUCTION AND THE COMMENCEMENT OF THE SEEDING. THE CONTRACTOR HAS NOT FURNISHED ANY EVIDENCE THAT IT INTENDED TO BID ON A 41 WEEK BASIS AND THE RULE IS ESTABLISHED THAT A BIDDER IS NOT PERMITTED TO RECALCULATE AND CHANGE ITS BID TO INCLUDE FACTORS WHICH IT DID NOT HAVE IN MIND WHEN THE BID WAS SUBMITTED, OR AS TO WHICH IT HAS SINCE CHANGED ITS MIND. 17 COMP. GEN. 575, 577 AND 31 ID. 183, 184. THIS RULE APPLIES WITH EQUAL FORCE AND EFFECT TO THE OMISSION OF COST FOR THE REQUIRED SAFETY SIGNS.

THE CONTRACTOR HAS STATED THAT IT UNDERESTIMATED THE COST OF THE MECHANICAL SEWAGE SHREDDER BECAUSE BEFORE BIDDING IT WAS UNABLE TO OBTAIN A QUOTATION FROM THE MANUFACTURER OF THE EQUIPMENT. THIS ERROR IN JUDGMENT DOES NOT CONSTITUTE A MISTAKE SUCH AS WOULD AUTHORIZE OR JUSTIFY RELIEF TO THE CONTRACTOR. 11 COMP. GEN. 445 AND 14 ID. 612.

IN VIEW OF THE FOREGOING, THE CONTRACTOR'S APPLICATION FOR RELIEF IS DENIED.

ONE SET OF THE ENCLOSURES SUBMITTED WITH THE LETTER OF APRIL 18 IS RETURNED.