B-141113, NOV. 25, 1959

B-141113, NOV. 25, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 26, 1959, WITH ENCLOSURES, FROM THE CHIEF, CONTRACTS BRANCH, PROCUREMENT DIVISION, DEPARTMENT OF THE ARMY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE EVERETT HYLEN COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-95-517-ASK-207 WAS AWARDED.

THE PURCHASING AND CONTRACTING OFFICE, HEADQUARTERS, YUKON COMMAND, LADD AIR FORCE BASE, ALASKA, BY INVITATION NO. ASK-95-517-59-66 REQUESTED BIDS- -- TO BE OPENED JUNE 15, 1959--- FOR FURNISHING LABOR AND MATERIALS AND FOR PERFORMING ALL WORK NECESSARY FOR THE REHABILITATION OF BUILDING 655-A AT FORT GREELY, ALASKA. IN RESPONSE THE EVERETT HYLEN COMPANY SUBMITTED A BID DATED JUNE 15, 1959, OFFERING TO PERFORM THE WORK FOR THE LUMP SUM OF $28,148. THE BID OF THE COMPANY WAS ACCEPTED ON JUNE 15, 1959, THE DATE OF THE BID OPENING. THE CONTRACTING OFFICER STATES THAT ON JUNE 18, 1959, MR. EVERETT HYLEN VISITED HIS OFFICE FOR THE PURPOSE OF RECEIVING AN ADVANCE COPY OF THE CONTRACT AND AT THAT TIME, MR HYLEN ALLEGED HE HAD MADE A MISTAKE IN HIS COMPANY'S BID IN THAT HE HAD FAILED TO INCLUDE IN THE BID PRICE THE COST OF THE JOHNS-MANVILLE FREE STANDING TRANSITE PANELING FOR THE PARTITIONS.

IN A CONFIRMING LETTER DATED JULY 13, 1959, THE COMPANY REQUESTED THAT THE CONTRACT PRICE OF THE PROJECT BE INCREASED BY $6,875, REPRESENTING $4,800 FOR MATERIAL, $300 FOR FREIGHT, $400 FOR LABOR, AND $1,375 TO COVER THE ITEMS OF OVERHEAD AND PROFIT. THE COMPANY STATED THAT THE COST OF THE MATERIAL AS SHOWN IN ITS LETTER COULD BE VERIFIED BY CALLING FAIRBANKS LUMBER SUPPLY. THE RECORD INDICATES THAT THE CONTRACTING OFFICER CONTACTED FAIRBANKS LUMBER SUPPLY AND VERIFIED THE COST OF THE MATERIAL. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS ESTIMATE SHEET, WHICH SHOWS THAT THE COMPANY INCLUDED THE ITEM OF PARTITIONS ON ITS LIST OF ITEMS OF WORK BUT THAT IT FAILED TO EXTEND A PRICE ON THE SHEET FOR SUCH ITEM. THE COMPANY ALSO SUBMITTED A COPY OF A LETTER DATED JULY 13, 1959, FROM ITS ACCOUNTANT STATING THAT HE HAD EXAMINED THE ESTIMATE FILE INCLUDING MATERIAL TAKE-OFF LISTS AND THE ROUGH ESTIMATE FOR THE PROJECT AND HAD FOUND THAT THE ITEM "PARTITIONS" WAS NOTED FOR RESEARCH AS TO PRICE BUT NO PRICE WAS EXTENDED FOR SUCH ITEM.

THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDS ON THE PROJECT WERE IN THE AMOUNTS OF $39,757, $53,884, AND $67,220. IT IS REPORTED THAT THE GOVERNMENT ESTIMATE OF $29,679 FOR THE PROJECT WAS ERRONEOUS, HAVING BEEN BASED ON THE USE OF PLYWOOD WALL PANELING FOR THE PARTITIONS. IN HIS REPORT THE CONTRACTING OFFICER STATES THAT THE POST ENGINEER, FORT GREELY, ALASKA, ADVISED THAT THE GOVERNMENT ESTIMATE WAS BASED UPON THE ORIGINAL PROJECT PLANNING TO REQUIRE PLYWOOD WALL PANELING AND THAT WHEN THIS REQUIREMENT WAS REVISED TO PROVIDE FOR JOHNS-MANVILLE FREE STANDING TRANSITE PANELING, WHICH IS MORE EXPENSIVE, THE AMOUNT OF THE GOVERNMENT ESTIMATE WAS NOT PROPORTIONATELY REVISED UPWARD. IN VIEW OF THE DIFFERENCE OF $11,609 BETWEEN THE COMPANY'S BID OF $28,148 AND THE NEXT LOWEST BID IN THE AMOUNT OF $39,757, THE PROBABILITY OF ERROR WAS APPARENT AND IN THESE CIRCUMSTANCES THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

THE RECORD INDICATES THAT AS OF SEPTEMBER 2, 1959, THE CONTRACT WORK WAS 24.13 PERCENT COMPLETED. ACCORDINGLY, CONTRACT NO. DA-95-517 ASK-207 MAY BE AMENDED TO INCREASE THE PRICE FOR THE PROJECT TO $35,023, AS RECOMMENDED BY THE CONTRACTING OFFICER, AND PAYMENT FOR THE WORK IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID OF THE EVERETT HYLEN COMPANY, AS CORRECTED, WILL STILL BE THE LOWEST BID RECEIVED ON THE PROJECT.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE CONTRACT.

THE CONTRACTING OFFICER'S UNDATED STATEMENT; A COPY OF THE ABSTRACT OF BIDS; AND A COPY OF THE CONTRACTOR'S LETTER OF JULY 13, 1959, TOGETHER WITH ENCLOSURES, ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.