B-140876, OCT. 7, 1959

B-140876, OCT. 7, 1959

TO MR. OSBORNE KOERNER, FEDERAL HOUSING ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 25, 1959, REQUESTING A DECISION AS TO WHETHER PAYTON CONSTRUCTION COMPANY, INC., BOISE, IDAHO, MAY BE PERMITTED TO WITHDRAW ITS BID, SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 5387, ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID.

THE INVITATION REQUESTED LUMP-SUM BIDS FOR CERTAIN SPECIFIED RECONDITIONING WORK AT THE FHA HOUSING PROJECT, COLUMBIA HEIGHTS AND APARTMENTS, RICHLAND, WASHINGTON. A BID BOND, IN THE AMOUNT OF NOT LESS THAN 10 PERCENT OF THE BID PRICE, WAS REQUIRED TO BE SUBMITTED WITH THE BID.

THE EIGHT BIDS RECEIVED WERE PUBLICLY OPENED ON SEPTEMBER 16, 1959. PAYTON CONSTRUCTION COMPANY, INC., SUBMITTED THE LOWEST BID IN THE AMOUNT OF $198,570. THE BID WAS SUPPORTED BY A BID BOND OF THE UNITED PACIFIC INSURANCE COMPANY IN THE AMOUNT OF 10 PERCENT OF THE BID, NOT TO EXCEED $30,000. THE SEVEN OTHER BIDS RECEIVED ARE IN THE AMOUNTS OF $269,333, $283,288, $285,400, $304,920, $309,267, $333,000 AND $341,000. THE FHA ESTIMATED THE REASONABLE COST OF THE WORK TO BE $300,000.

IT IS REPORTED THAT ON SEPTEMBER 21, 1959, WHILE THE BIDS WERE BEING CONSIDERED FOR AWARD, MR. W. O. PAYTON ADVISED BY TELEPHONE THAT HE HAD MADE AN ERROR IN HIS BID IN THAT THE FIGURE HE INTENDED TO QUOTE WAS $298,570 RATHER THAN $198,570. THE ALLEGATION OF ERROR WAS CONFIRMED BY THE LETTER RECEIVED ON SEPTEMBER 23, 1959, AND THERE WERE SUBMITTED IN SUPPORT THEREOF HIS WORK PAPERS, SHOWING THE BASIS ON WHICH THE BID WAS COMPUTED, AND SEVERAL QUOTATIONS RECEIVED FROM SUBCONTRACTORS. EXPLANATION OF THE ERROR, MR. PAYTON STATED THAT THE TOTAL FIGURE FOR THE JOB CAME TO $298,570, AS SHOWN BY THE WORK PAPERS, THAT HE PURCHASED A $30,000 BID BOND TO COVER THIS AMOUNT, AND THAT LATER, WHILE FILLING IN THE BID FORM, HE WAS TALKING ABOUT A BID OF $138,000 ON ANOTHER JOB WHICH HE HAD JUST COMPLETED ON SEPTEMBER 5 AND PERHAPS BECAME CONFUSED IN HIS FIGURES. IN ANY EVENT THE FIGURE OF $198,570 WAS INSERTED ON THE BID FORM HERE INVOLVED RATHER THAN THE INTENDED PRICE OF $298,570. IN VIEW THEREOF, MR. PAYTON REQUESTS THAT HE BE RELEASED FROM THE BID.

THE EVIDENCE SUBMITTED SHOWS THAT MR. PAYTON ESTIMATED THE COST OF RENOVATING THE BUILDINGS AT AN AVERAGE PRICE OF $6,785.68 EACH, WHICH AMOUNT WAS MULTIPLIED BY 44, THE NUMBER OF BUILDINGS TO BE RENOVATED, ARRIVING AT A TOTAL FIGURE OF $298,570, THE AMOUNT OF THE ALLEGED INTENDED BID PRICE. THE WORK PAPERS CONTAIN A NOTATION "10 PERCENT BOND - $30,000.'

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, INCLUDING THE CONSIDERABLE DIFFERENCE BETWEEN THE AMOUNT OF THE LOW BID AS COMPARED WITH THE OTHER BIDS RECEIVED AND THE FHA ESTIMATE OF THE REASONABLE COST OF THE WORK, THERE APPEARS TO BE NO DOUBT THAT AN ERROR WAS MADE IN THE BID AS ALLEGED.

ACCORDINGLY, SINCE ERROR WAS ALLEGED PRIOR TO AWARD AND THE EVIDENCE REASONABLY ESTABLISHES THAT AN ERROR WAS IN FACT MADE, THE BID OF PAYTON CONSTRUCTION COMPANY, INC., SHOULD BE DISREGARDED IN MAKING THE AWARD.