B-140605, SEP. 30, 1959

B-140605, SEP. 30, 1959

TO THE HONORABLE JOHN A. MCCONE, CHAIRMAN, ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO LETTER DATED AUGUST 26, 1959, FROM YOUR GENERAL MANAGER REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY OTTO C. PRELLWITZ AND SON, INC., TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. NY 46-59 ISSUED BY BROOKHAVEN AREA OFFICE OF THE ATOMIC ENERGY COMMISSION.

THE INVITATION REQUESTED LUMP-SUM BIDS TO BE OPENED ON MAY 26, 1959, FOR CLEARING, GRUBBING, REMOVAL AND STOCK PILING OF TOP SOIL EXCAVATION FOR FOUNDATION AND CONSTRUCTION OF CONCRETE FOUNDATION WALLS AND FOOTING FOR THE NUCLEAR ENGINEERING BUILDING AT BROOKHAVEN NATIONAL LABORATORY. RESPONSE TO THE INVITATION OTTO C. PRELLWITZ AND SON, INC., SUBMITTED THE LOW BID IN THE AMOUNT OF $78,907. THE FOUR NEXT LOW BIDS WERE IN THE AMOUNTS OF $86,800, $94,687, $94,870 AND $99,000. THE ELEVEN OTHER BIDS RECEIVED RANGED FROM $103,000 TO A HIGH OF $148,320. THE ENGINEER'S ESTIMATE OF THE COST OF THE WORK WAS $118,026.

IT IS REPORTED THAT ON MAY 29, 1959, MR. RUSSO, THE ESTIMATOR FOR PRELLWITZ, TELEPHONED THE BROOKHAVEN AREA OFFICE AND STATED THAT HE HAD MADE AN ERROR IN HIS BID. THE BASIS OF THE ERROR, AS ESTABLISHED BY WORKSHEETS AND OTHER EVIDENCE SUBSEQUENTLY SUBMITTED, IS THAT HE HAD OBTAINED INFORMATION ORALLY FROM L. B. FOSTER COMPANY, NEW YORK, SUPPLIERS OF SHEET STEEL PILING, AND HAD UNDERSTOOD THEIR REPRESENTATIVES TO STATE THAT A FULL SHEET OF 16 INCH STEEL PILING 20 FEET LONG AS CALLED FOR BY THE DRAWINGS WEIGHED 30.7 POUNDS. IN COMPILING THE BID THE WEIGHT OF THE SHEET PILING WAS COMPUTED AT 1.2 POUNDS PER SQUARE FOOT WHEREAS THE WEIGHT OF SUCH SHEET PILING IS 30.7 POUNDS PER LINEAL FOOT OR 23 POUNDS PER SQUARE FOOT. THUS, THE QUANTITIES WERE UNDERSTATED. IT IS REPORTED THAT THE UNIT WEIGHT FOR THIS MATERIAL IS SHOWN IN THE UNITED STATES STEEL HANDBOOK, PAGE 48, SECTION MP 112 AS 30.7 POUNDS PER LINEAL FOOT OR 23 POUNDS PER SQUARE FOOT.

BY LETTER DATED JUNE 8, 1959, PRELLWITZ ADVISED THE BROOKHAVEN AREA OFFICE THAT THEY WOULD ACCEPT AWARD OF THE CONTRACT IN THE AMOUNT OF THEIR ORIGINAL BID AND ALSO REQUESTED A REVISION OF THEIR BID TO $85,477 AN INCREASE OF $6,570 REPRESENTING AN ADJUSTMENT DUE TO THE INCORRECT WEIGHT APPLIED TO THE STEEL SHEET PILING. BY LETTER DATED JUNE 10, 1959, PRELLWITZ WAS NOTIFIED OF THE ACCEPTANCE OF ITS BID DATED MAY 26, 1959, IN THE AMOUNT OF $78,907. IT WAS FURTHER STATED IN SAID LETTER OF ACCEPTANCE AS FOLLOWS:

"WE HAVE NOTED YOUR CLAIM OF ERROR IN THE AMOUNT OF $6,570.00 AS STATED IN YOUR LETTER FROM MR. ARTHUR R. RUSSO TO D. C. MOORE DATED JUNE 8, 1959. WE ARE PREPARED TO SUBMIT THE RECORD IN THIS MATTER TO AEC HEADQUARTERS FOR SUCH APPROPRIATE ACTION, IF ANY, AS MAY BE INDICATED.'

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD THERE APPEARS NO DOUBT THAT AN ERROR WAS MADE IN THE BID AS ALLEGED AND THE ERROR WAS ALLEGED AND ESTABLISHED PRIOR TO ACCEPTANCE OF THE BID. THEREFORE, THE FACT THAT THE ERROR WAS NOT ALLEGED UNTIL AFTER OPENING OF THE BIDS; THAT THE MISTAKE WAS UNILATERAL ON THE PART OF THE BIDDER AND WAS IN NO WAY CONTRIBUTED TO BY THE GOVERNMENT; AND THAT THE CIRCUMSTANCES MIGHT NOT HAVE BEEN SUCH AS TO PUT THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR HAD NOT THE BIDDER GIVEN ACTUAL NOTICE OF ERROR, WOULD NOT CONSTITUTE SUFFICIENT REASONS FOR THE ACCEPTANCE OF A BID KNOWN TO BE ERRONEOUS AS SUGGESTED. SEE 36 COMP. GEN. 441, 444.

IN THE CIRCUMSTANCES, AND SINCE AT THE TIME OF THE AWARD THE BIDDER WAS ADVISED THAT ITS REQUEST FOR AN INCREASE WOULD BE CONSIDERED BY HIGHER AUTHORITY FOR SUCH APPROPRIATE ACTION, IF ANY, AS MAY BE WARRANTED, CONTRACT NO. AT/30-1/-2417 MAY BE AMENDED TO INCREASE THE CONSIDERATION SPECIFIED THEREIN BY $6,570 OR TO $85,477. SEE 36COMP. GEN. 582; 38 ID. 678. THE CONTRACT AS SO AMENDED WILL STILL BE LESS THAN THE AMOUNT OF THE NEXT LOWEST BID RECEIVED.