B-136458, NOVEMBER 19, 1958, 38 COMP. GEN. 372

B-136458, NOVEMBER 19, 1958, 38 COMP. GEN. 372

BIDS - QUALIFIED - OMISSION OF ITEM - OFFER TO FURNISH AT NO EXTRA COST A LOW BIDDER WHO, IN RESPONSE TO AN INVITATION FOR FURNISHING EQUIPMENT AND AN ADDENDUM REQUIRING A SEPARATE PRICE FOR MAINTENANCE SERVICES, SIGNED THE ADDENDUM BUT DID NOT INDICATE ANY PRICE FOR THE SERVICE AND WHO, AFTER OPENING, ALLEGED THAT THE SERVICES WERE INCLUDED IN THE PRICE OF EQUIPMENT BUT DID NOT SUBMIT CONCLUSIVE EVIDENCE TO SUBSTANTIATE WHAT WAS INTENDED HAS SUBMITTED A NONRESPONSIVE BID WHICH WAS PROPERLY REJECTED.

TO JETA METAL FABRICATORS, INC., NOVEMBER 19, 1958:

REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 14, 19, 23 AND JULY 2, 1958, PROTESTING THE AWARD OF A CONTRACT ON JUNE 13, 1958, TO THE CONSOLIDATED DIESEL ELECTRIC CORPORATION, STAMFORD, CONNECTICUT, PURSUANT TO INVITATION FOR BIDS NO. DA-ENG-11-184-58-F-508-JD, ISSUED MAY 2, 1958, BY THE U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, ILLINOIS, AND ADDENDUM NO. 1 TO THE INVITATION ISSUED MAY 12, 1958.

THE RECORD NOW SHOWS THAT THE INVITATION SPECIFIED THAT THE AWARD WOULD BE MADE TO A SMALL BUSINESS CONCERN AND REQUESTED BIDS ON ONE ITEM OF 274 GENERATOR SETS, TYPE 1, ELECTRIC, 45 (K.W., A.C., PORTABLE, LIQUID COOLED, DIESEL ENGINE DRIVEN, SKID MOUNTED, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-G-14609 ( CE) DATED SEPTEMBER 24, 1957, WITH CERTAIN EXCEPTIONS AND ADDITIONS THERETO. ADDENDUM NO. 1, WHICH CONSISTED OF A SEPARATE BIDDING FORM AND PROVISIONS RESPECTING MAINTENANCE ASSISTANCE AND INSPECTION SERVICES, PROVIDED SPACES FOR INSERTION OF A UNIT PRICE PER MAN -DAY AND AN EXTENDED TOTAL AMOUNT FOR AN ESTIMATED QUANTITY OF 60 MAN-DAYS OF SUCH SERVICES. THE GOVERNMENT RESERVED THE OPTION, HOWEVER, TO INCREASE THE QUANTITY OF SERVICES WHICH IT MIGHT ORDER AT THE SAME UNIT PRICE "BY NOT TO EXCEED 60 MAN DAYS," OR, IN OTHER WORDS, TO OBTAIN A MAXIMUM OF 120 MAN-DAYS OF SERVICE FROM THE SUCCESSFUL BIDDER AT THE UNIT PRICE QUOTED IN ADDENDUM NO. 1 FOR THE DESIGNATED ITEM NO. A OF THE INVITATION.

BIDS WERE OPENED ON MAY 26, 1958, AT 10:00 A.M., CDST, AS SCHEDULED. YOUR BID ON ITEM 1, COVERING THE MANUFACTURE AND DELIVERY OF THE 274 GENERATOR SETS, WAS THE LOWEST RECEIVED, WITH A UNIT PRICE OF $4,645, MAKING A TOTAL BID OF $1,272,730 ON THAT ITEM. THE CONSOLIDATED DIESEL ELECTRIC CORPORATION WAS THE NEXT LOWEST BIDDER ON ITEM 1, WITH A UNIT PRICE OF $4,814 AND A TOTAL PRICE OF $1,319,036. CONSOLIDATED QUOTED A UNIT PRICE OF $35 PER MAN-DAY AND A TOTAL PRICE OF $2,100 FOR THE ESTIMATED QUANTITY OF 60 MAN-DAYS OF SERVICE UNDER ITEM A. ITS COMBINED BID WAS LOWER THAN THAT OF ANY BIDDER WHO HAD QUOTED PRICES BOTH FOR ITEM 1 AND ITEM A OF THE INVITATION. YOU SIGNED AND RETURNED ADDENDUM NO. 1 TO THE INVITATION BUT NO PRICES WERE STATED THEREON FOR THE SERVICES WHICH MIGHT BE REQUIRED UNDER ITEM A. HOWEVER, ABOUT TWO HOURS AFTER THE BID OPENING, THERE WAS RECEIVED A TELEGRAM FROM YOUR COMPANY STATING THAT "WE NOTICED THAT WE FORGOT TO INDICATE ON ADDENDUM 1 THAT THE UNIT PRICE PER MAN-DAY IS INCLUDED IN OUR UNIT PRICE COVERING THE COMPLETE GENERATOR SET SHOWN IN ITEM 1 PAGE 2 OF INVITATION.'

SINCE THE GOVERNMENT DESIRED PRICE QUOTATION ON BOTH ITEMS 1 AND A, AND SINCE THE INVITATION FOR BIDS PROVIDED THAT ONLY ONE AWARD WOULD BE MADE THEREUNDER, THE PROCUREMENT OFFICE CONCLUDED THAT YOUR FAILURE TO SHOW A UNIT PRICE FOR ITEM A RENDERED YOUR BID NONRESPONSIVE TO THE INVITATION. NEVERTHELESS, IN ACCORDANCE WITH APPLICABLE REGULATIONS CONCERNING CLAIMS OF ALLEGED MISTAKES IN BIDS PRIOR TO AWARD, THE MATTER WAS REFERRED TO THE OFFICE OF THE CHIEF OF ENGINEERS FOR CONSIDERATION AND APPROPRIATE ACTION. BY ENDORSEMENT OF JUNE 5, 1958, THE CHIEF OF ENGINEERS ADVISED THE PROCUREMENT OFFICE TO THE EFFECT THAT YOUR BID WAS INCOMPLETE AND NONRESPONSIVE AND THAT CORRECTION OF THE ALLEGED MISTAKE IN ACCORDANCE WITH YOUR STATED INTENTION WOULD NOT CURE SUCH DEFICIENCY. YOU CONTENDED IN A LETTER DATED JUNE 7, 1958, THAT THERE HAD BEEN NO MISTAKE IN YOUR BID PRICE AND THAT THE SIGNING OF ADDENDUM 1 WAS SUFFICIENT TO SHOW THAT YOU INTENDED TO FURNISH THE SERVICES WITHOUT CHARGE. IN TWO LETTERS DATED JUNE 13, 1958, BOTH OF WHICH WERE RECEIVED BY THE PROCUREMENT OFFICE SUBSEQUENT TO THE AWARD MADE TO THE CONSOLIDATED DIESEL ELECTRIC CORPORATION, ADDITIONAL ARGUMENTS AND EVIDENCE RELATING TO THE MATTER WERE PRESENTED.

IN SUPPORT OF YOUR CONTENTION THAT IT WAS INTENDED TO INCLUDE THE COST OF THE MAINTENANCE ASSISTANCE AND INSPECTION SERVICES IN YOUR UNIT PRICE ON ITEM 1, YOU SUBMITTED WORKSHEETS AND A RETAINED COPY OF ADDENDUM NO. 1. WRITTEN ABOVE AN ESTIMATE OF $400 FOR LABOR ON ONE OF THE WORKSHEETS IS THE PHRASE "60 DAY PER-DIEM INCLUDED IN.' ON THE COPY OF THE ADDENDUM NO. 1, UNDERNEATH THE DESCRIPTION OF ITEM A WAS WRITTEN: " INCLUDED IN UNIT PRICE FOR COMPLETE GENERATOR SET UNDER ITEM 1, PAGE 2.' IT HAS BEEN ALLEGED THAT THE FAILURE TO INCLUDE THE LATTER NOTATION ON THE COPY OF ADDENDUM NO. 1 SUBMITTED WITH YOUR BID WAS THE RESULT OF SOME MISUNDERSTANDING OF THE STENOGRAPHER WHO TYPED THE BID. ALSO, IT HAS BEEN INDICATED THAT ON PREVIOUS INVITATIONS BIDDERS WERE EXPECTED TO INCLUDE THE COST OF SIMILAR SERVICES IN THEIR PRICE FOR GENERATOR SETS, AND THAT THIS SAME METHOD WAS EMPLOYED BY YOUR COMPANY IN COMPUTING THE BID INTENDED TO BE SUBMITTED UNDER INVITATION NO. DA-ENG-11-184-58-F-508-JD.

AS STATED IN THE ADMINISTRATIVE REPORT MADE IN THE MATTER, A UNIT PRICE ON ITEM A WAS CONSIDERED ESSENTIAL BECAUSE THE GOVERNMENT WANTED TO BE OBLIGATED TO PAY FOR ONLY SUCH SERVICES AS IT WOULD ACTUALLY NEED AND CALL FOR. THE DESIRABILITY OF REQUESTING BIDDERS TO QUOTE SEPARATE PRICES FOR THE EQUIPMENT AND FOR THE OPTIONAL TECHNICAL AND MAINTENANCE SERVICES WAS A MATTER FOR DETERMINATION BY THE DEPARTMENT OF THE ARMY AND IT IS OUR OPINION, REGARDLESS OF WHAT HAD BEEN THE SITUATION UNDER PREVIOUS INVITATIONS FOR BIDS FOR FURNISHING EQUIPMENT AND SERVICES OF A SIMILAR NATURE, THAT A BID COULD NOT HAVE BEEN CONSIDERED TO HAVE BEEN RESPONSIVE TO THE INSTANT INVITATION IF THE BIDDER FAILED TO QUOTE A UNIT PRICE FOR ITEM A OR TO SPECIFY IN NO UNCERTAIN TERMS THAT NO CHARGE WOULD BE MADE FOR TECHNICAL AND MAINTENANCE ASSISTANCE SERVICES WHICH MIGHT BE REQUESTED UP TO A MAXIMUM OF 120 MAN-DAYS OF SUCH SERVICE.

ALTHOUGH IT WAS PREVIOUSLY CONTENDED THAT NO MISTAKE HAD BEEN MADE IN THE TOTAL BID PRICE, IT HAS BEEN ARGUED THAT THE SITUATION IN THIS CASE IS SUCH THAT THE CORPS OF ENGINEERS EXCEEDED ITS AUTHORITY WHEN IT REJECTED YOUR BID BECAUSE OUR OFFICE HAS PERMITTED CORRECTIONS IN BIDS TO BE MADE WHERE THERE HAS BEEN PRESENTED CLEAR AND CONVINCING EVIDENCE RESPECTING ALLEGED MISTAKES MADE IN SUCH BIDS. IN SUPPORT OF SUCH ARGUMENT, THERE HAVE BEEN EMPHASIZED THE RULINGS MADE IN REGARD TO TWO CASES, B-123562, APRIL 21 AND MAY 10, 1955, AND B-126327, I-19337, JUNE 12, 1956.

IN B-123562, THE SUCCESSFUL BIDDER ALLEGED ERROR IN CONNECTION WITH THE OMISSION OF ANY AMOUNT IN ITS BID TO COVER THE FURNISHING OF THREE SETS OF REPRODUCIBLE VANDYKES AS CALLED FOR IN ITEM 5 OF THE BIDDING SCHEDULE. THE BIDDER HAD QUOTED $5,000 FOR PRODUCTION DRAWINGS REQUIRED TO BE FURNISHED UNDER ITEM 6 AND IT DEVELOPED THAT $185 WAS INCLUDED IN THE BIDDER'S ESTIMATE ON ITEM 6 TO COVER THE COST OF FURNISHING THE THREE SETS OF REPRODUCIBLE VANDYKES. THERE WAS UNDOUBTEDLY A CLOSER RELATIONSHIP BETWEEN ITEMS 5 AND 6 OF THAT INVITATION THAN BETWEEN ITEMS 1 AND A OF THE INSTANT INVITATION. ALSO, ONLY ONE BIDDING FORM WAS USED IN THE FORMER CASE AND NEITHER ITEM 5 NOR ITEM 6 WAS OPTIONAL IN CHARACTER. IN B- 126327, I-19337, IT WAS CONCLUDED THAT A LOW BID HAD BEEN ERRONEOUSLY REJECTED FOR FAILURE TO SIGN AND RETURN THREE AMENDMENTS TO THE INVITATION AS TO WHICH OUR INVESTIGATION DISCLOSED THAT THEY HAD VERY LITTLE, IF ANY, EFFECT UPON THE BID PRICES QUOTED BY THE SEVERAL OTHER BIDDERS.

IN BOTH OF THESE CASES, THE ERRORS OR OMISSIONS WERE ALSO OF RELATIVE INSIGNIFICANCE AS COMPARED WITH THE SITUATION HERE INVOLVED, AND WE FEEL THAT TO HAVE PERMITTED A CORRECTION OF YOUR BID TO SHOW THAT YOU INTENDED NO CHARGE OF ITEM A WOULD HAVE VIOLATED THE ESTABLISHED RULE THAT A BID MAY NOT BE CHANGED AFTER OPENING. THE MERE SIGNING AND RETURN OF ADDENDUM NO. 1 WITH YOUR BID COULD NOT HAVE BEEN TAKEN AS SUFFICIENT TO SHOW THAT YOU INTENDED TO FURNISH THE SPECIFIED SERVICES IF REQUESTED BY THE GOVERNMENT OR THAT YOU INTENDED TO FURNISH SUCH SERVICES WITHOUT CHARGE. FURTHERMORE, IT IS OBVIOUS THAT IT WOULD BE DIFFICULT TO DETERMINE ON THE BASIS OF THE EVIDENCE SUBMITTED THAT A MISTAKE IN BID ACTUALLY OCCURRED OR, IF SO, WHAT WAS ACTUALLY INTENDED AT THE TIME THE BID WAS SUBMITTED.

IN VIEW OF THE CONTENTION MADE TO THE EFFECT THAT THE SIGNING OF THE ADDENDUM WAS ALL THAT WAS NECESSARY TO BIND YOUR COMPANY TO FURNISH THE TECHNICAL AND MAINTENANCE SERVICES, THERE IS SOME DOUBT AS TO WHETHER YOU EVER INTENDED TO SHOW SPECIFICALLY ON ADDENDUM NO. 1 THAT THE UNIT PRICE PER MAN-DAY WAS INCLUDED IN YOUR UNIT PRICE FOR ITEM 1 OF THE INVITATION. ALSO, THERE EXISTS AN APPARENT INCONSISTENCY BETWEEN THE NOTATION MADE ON ONE OF THE WORKSHEETS COVERING THE ESTIMATE FOR ITEM 1 AND THE WRITING ON THE RETIRED COPY OF ADDENDUM NO. 1. ACCORDING TO THE WORKING PAPERS, IT IS CLEAR THAT YOUR ESTIMATOR MUST HAVE ASSUMED THAT NO MORE THAN 60 MAN- DAYS OF SERVICE WOULD BE FURNISHED IN COMPLETING THE PROPOSED CONTRACT, WHEREAS THE WRITING ON THE RETAINED COPY OF THE ADDENDUM, IF INSERTED ON THE COPY SUBMITTED WITH YOUR BID, WOULD HAVE BOUND YOUR COMPANY TO FURNISH A MAXIMUM OF 120 MAN-DAYS OF SERVICE. CONSEQUENTLY, WE WOULD HAVE TO CONCLUDE THAT THERE IS A CONSIDERABLE DOUBT AS TO WHETHER YOU WERE COGNIZANT OF THE FACT THAT A MAXIMUM OF 120 MAN-DAYS OF SERVICE MIGHT BE REQUIRED UNDER ADDENDUM NO. 1, AND AS TO WHETHER THE BID WAS ACTUALLY INTENDED TO COVER ANY MORE THAN 60 MAN-DAYS OF SUCH SERVICE WITHOUT CHARGE TO THE GOVERNMENT.

IT HAS BEEN THE CONSISTENT POLICY OF OUR OFFICE IN THE CASE OF AN ALLEGED MISTAKE IN BID PRIOR TO AWARD TO REQUIRE THAT THE PARTY ALLEGING THE MISTAKE SHOW EXACTLY IN WHAT IT CONSISTS AND THE CORRECTION WHICH SHOULD BE MADE. SEE 14 COMP. GEN. 78, 80. IN 36 COMP. GEN. 441, WE CONSIDERED THAT A GREATER DEGREE OF PROOF IS NECESSARY TO ALLOW A CORRECTION OF A BID THAN TO JUSTIFY A WITHDRAWAL BEFORE AWARD.

IN ORDER TO MAINTAIN THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, WE FEEL THAT A BIDDER WHO HAS ALLEGED MISTAKE AND STILL DESIRES TO OBTAIN THE AWARD MUST PRESENT IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO BASIS FOR ANY DOUBT AS TO THE INTENDED BID PRICE. WHERE THE ERROR IS ONE OF A FAILURE TO QUOTE A PRICE, SUCH AS MAY BE CONSIDERED TO BE INVOLVED IN THE INSTANT CASE, THE BID NORMALLY WOULD BE FOR REJECTION AS NOT BEING RESPONSIVE TO THE INVITATION. WHILE YOU HAVE REFERRED TO AT LEAST ONE EXCEPTION MADE TO THAT RULE, IT IS APPARENT THAT WE WOULD NOT BE WARRANTED IN TAKING THE POSITION THAT THE EVIDENCE SUBMITTED BY YOUR COMPANY IS SUFFICIENT TO JUSTIFY A DEFINITE CONCLUSION AS TO WHAT WAS THE INTENDED BID ON BOTH ITEMS 1 AND A OF THE INVITATION.

ACCORDINGLY, YOU ARE ADVISED THAT, IN OUR OPINION, YOUR BID WAS PROPERLY REJECTED BY THE CORPS OF ENGINEERS. WITH RESPECT TO THE ALLEGED INELIGIBILITY OF THE SUCCESSFUL BIDDER TO RECEIVE A SMALL BUSINESS AWARD FOR THE FURNISHING OF THE EQUIPMENT, THE RECORD SHOWS THAT THE SMALL BUSINESS ADMINISTRATION ISSUED A CERTIFICATE WHICH CLASSIFIED THE CONSOLIDATED DIESEL ELECTRIC CORPORATION AS " SMALL BUSINESS" AND THE CERTIFICATE WAS BY ITS TERMS MADE EFFECTIVE UNTIL AUGUST 8, 1958, UNLESS SOONER REVOKED.