B-140297, AUG. 13, 1959

B-140297, AUG. 13, 1959

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER OF JULY 22, 1959, WITH ENCLOSURES, FROM MR. E. A. POYNTON, BUREAU OF INDIAN AFFAIRS, ALBUQUERQUE, NEW MEXICO, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY NOYES CONSTRUCTION CO. TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO AN INVITATION FOR BIDS ON PROJECT NO. ABU-PH 37, COVERING HOSPITAL CONSTRUCTION AND REMODELING AT ROSEBUD, SOUTH DAKOTA.

THE INVITATION, DATED MAY 13, 1959, REQUESTED BIDS TO BE OPENED AT 2:00 P.M. ON JUNE 24, 1959. AT THE TIME OF OPENING, FIVE BIDS HAD BEEN RECEIVED RANGING--- ON THE BASE PROPOSAL--- FROM $680,000 TO $753,400. THERE HAD BEEN RECEIVED ALSO A TELEGRAM FROM NOYES CONSTRUCTION CO. DEDUCTING $170,000 FROM ITS BID BUT THE BID HAD NOT YET BEEN RECEIVED. THE BID WAS POSTMARKED AS RECEIVED AT ALBUQUERQUE AT 3:30 P.M. AND WAS RECEIVED AT THE CONTRACTING OFFICE AT 3:40 P.M. ON JUNE 24. IT IS REPORTED THAT AFTER INVESTIGATION IT WAS DETERMINED THAT FAILURE OF THE BID TO ARRIVE ON TIME "WAS DUE SOLELY TO A DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE" AND THAT, THEREFORE, THE BID WAS OPENED FOR CONSIDERATION. THE ORIGINAL BID WAS IN THE AMOUNT OF $800,000 ON THE BASE PROPOSAL, LEAVING A NET BID OF $630,000 AS AMENDED BY THE TELEGRAM. IT APPEARS THAT MR. NOYES OF NOYES CONSTRUCTION CO. MADE A TELEPHONE CALL TO THE CONTRACTING OFFICE ABOUT 2:45 P.M. ON JUNE 24 AND WAS ADVISED AS TO THE AMOUNTS OF THE BIDS RECEIVED, NO MENTION BEING MADE OF THE RECEIPT OF THE TELEGRAPHIC MODIFICATION OF THE NOYES BID OR THE FACT THAT ITS BID HAD NOT BEEN RECEIVED AT THAT TIME. AT APPROXIMATELY 3:00 P.M., THE CONTRACTING OFFICE MADE A TELEPHONE CALL TO MR. NOYES ADVISING HIM THAT THE BID HAD NOT YET BEEN RECEIVED, ALTHOUGH THE TELEGRAPHIC MODIFICATION HAD BEEN RECEIVED PRIOR TO THE TIME OF OPENING THE BIDS. DURING THIS CONVERSATION, MR. NOYES ALLEGED AN ERROR OF APPROXIMATELY $30,000 IN THE NOYES BID.

IN A LETTER DATED JUNE 25, 1959, NOYES CONSTRUCTION CO. REQUESTED THAT ITS BID BE INCREASED $31,513 TO A TOTAL OF $661,513, ALLEGING AN ERROR OF $31,513 IN ITS BID, RESULTING FROM FAILURE TO INCLUDE AN ITEM OF FIVE PERCENT FOR OVERHEAD. HOWEVER, IN A MEMORANDUM DATED JUNE 26, 1959, MR. NOYES STATED THAT IF THE ERROR HAD NOT BEEN MADE THE BID WOULD HAVE BEEN "A ROUNDED OFF FIGURE OF $661,000.00.'

TRANSMITTED WITH THE LETTER OF JUNE 25 WERE ESTIMATE SHEETS, SWORN TO AS BEING THE ORIGINAL SHEETS, APPARENTLY SUBSTANTIATING THE BIDDER'S CONTENTION THAT NO ITEM FOR OVERHEAD WAS INCLUDED IN THE BID. ALTHOUGH A NOTATION "PLUS 5 PERCENT" IS FOUND NEAR THE END OF THE ESTIMATE SHEETS, NO CORRESPONDING AMOUNT HAD BEEN ADDED. IN A MEMORANDUM DATED JULY 6, 1959, FROM THE CONSTRUCTION MANAGEMENT ENGINEER, REPORTING ON HIS PERSONAL INVESTIGATION AT THE BIDDER'S OFFICE, IT IS STATED THAT THE RECORD SATISFACTORILY ESTABLISHED THAT IT WAS THE REGULAR PRACTICE OF THE NOYES CONSTRUCTION CO. TO ADD TO ITS BIDS AN ITEM OF FIVE PERCENT FOR OVERHEAD.

BY LETTER OF JUNE 30, 1959, AWARD WAS MADE TO NOYES CONSTRUCTION CO. (CONTRACT NO. 14-20-150-315) AT A CONTRACT PRICE OF $624,500 ($630,000 LESS AN ALTERNATE BID DEDUCTION OF $5,500 FOR OMISSION OF DENTAL EQUIPMENT), IT BEING STATED IN THE LETTER THAT THE ALLEGATION OF ERROR AND REQUEST FOR RELIEF WOULD BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR DECISION.

IN ITS LETTER OF JUNE 30, 1959, THE BIDDER STATES IN SUBSTANCE THAT ITS FAILURE TO INCLUDE THE ITEM FOR OVERHEAD RESULTED FROM THE FACT THAT IT WAS "EXTREMELY BUSY WITH MORE THAN THAT JOB WHICH WERE LET AT 2:00 P.M. THAT DAY; " ALSO, THAT THE MISTAKE WAS NOT DISCOVERED UNTIL APPROXIMATELY :00 P.M. ON JUNE 24--- TOO LATE TO ALLEGE THE MISTAKE PRIOR TO THE BID OPENING.

THE INFORMATION AVAILABLE APPEARS TO SUPPORT ADEQUATELY THE DETERMINATION OF THE CONTRACTING OFFICER THAT THE FAILURE OF THE NOYES CONSTRUCTION CO. BID TO ARRIVE IN TIME FOR THE BID OPENING RESULTED FROM A DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE, IT APPEARING THAT ORDINARILY THE BID WOULD HAVE ARRIVED AT ALBUQUERQUE AT 9:12 A.M. ON JUNE 24. MOREOVER, IT MAY BE REGARDED AS SATISFACTORILY ESTABLISHED THAT NOYES CONSTRUCTION CO., MADE A BONA FIDE ERROR IN ITS BID AS ALLEGED AND EXPLAINED BY IT.

FOR THE REASONS ABOVE SET FORTH, WE OFFER NO OBJECTION TO INCREASING THE CONTRACT PRICE IN THE AMOUNT OF $31,000 TO A TOTAL PRICE OF $655,500 WHICH IS STILL $20,000 LESS THAN THE NEXT LOW BID OF H. HALVORSON, INC., ($680,000 LESS AN ALTERNATE BID DEDUCTION OF $4,500 FOR OMISSION OF DENTAL EQUIPMENT). REFERENCE TO THIS DECISION SHOULD ACCOMPANY THE CONTRACT.

THE ORIGINAL PAPERS TRANSMITTED WITH MR. POYNTON'S LETTER ARE RETURNED HEREWITH AND THE COPIES ARE BEING RETAINED HERE.