B-143162, AUG. 11, 1960

B-143162, AUG. 11, 1960

TO ROBERT SIMMONS CONSTRUCTION CO., INC.:

FURTHER REFERENCE IS MADE TO A LETTER IN YOUR BEHALF, WITH ENCLOSURES, FROM ATTORNEY JOHN G. O-MARA, REQUESTING CORRECTION OF YOUR BID WHICH RESULTED IN DEPARTMENT OF THE ARMY CONTRACT NO. DA-15-029 CIVENG-59-1064, DATED JUNE 29, 1959.

IN RESPONSE TO INVITATION NO. CIVENG-15-029-59-4, ISSUED ON MARCH 20, 1959, AND ADDENDA ISSUED SUBSEQUENT THERETO, BY THE CORPS OF ENGINEERS, LOUISVILLE ARMY ENGINEER DISTRICT, YOU SUBMITTED A BID DATED JUNE 26, 1959, OFFERING TO PERFORM CERTAIN MISCELLANEOUS CONSTRUCTION WORK AT MARKLAND LOCKS AND DAM, OHIO RIVER, FOR A TOTAL CORRECTED CONSIDERATION OF $159,645.75. IT APPEARS THAT THE BASIC CORRECTION IN YOUR BID INVOLVED A DEDUCTION OF $10,000 TO COVER AN ERROR MADE BY YOU IN EXTENDING THE UNIT PRICE FOR THE ESPLANADE PAVING REQUIRED BY ITEM NO. 20 OF THE UNIT PRICE SCHEDULE. ALL PRICES QUOTED FOR THE VARIOUS ITEMS SET FORTH IN THE SAID SCHEDULE WERE EVALUATED AND COMPARED WITH THE ONLY OTHER BID OF $245,667 RECEIVED AND THE GOVERNMENT'S ESTIMATE OF $143,494. UPON DETERMINING THAT YOUR ADJUSTED BID OF $159,645.75 REFLECTED A FAIR AND REASONABLE OFFER FOR PERFORMING THE WORK SPECIFIED, CONTRACT NO. DA-15-029-CIVENG-59-1064 WAS AWARDED TO YOU ON JUNE 29, 1959. IT APPEARS FURTHER THAT BY LETTER DATED JUNE 29, 1959--- SAME DATE AS AWARD--- YOU ADVISED THE CORPS OF ENGINEERS THAT IN ADDITION TO THE EXTENSION ERROR OF $10,000, ABOVE REFERRED TO, THERE HAD BEEN OMITTED FROM YOUR BID A COST ITEM UNDER SUBCONTRACTS OF $17,076 FROM THE ESTIMATED AMOUNT OF $16,150 QUOTED BY YOU FOR ITEM NO. 1 OF THE UNIT PRICE SCHEDULE COVERING THE UTILITY BUILDING. YOU ALLEGE THAT THE ERROR OCCURRED BECAUSE OF A LAST MINUTE TABULATION WHICH DID NOT PERMIT SUFFICIENT TIME TO MAKE THE USUAL RECHECK FOR OMITTED ITEMS AND, THEREFORE, YOU REQUEST THAT YOUR BID BE CORRECTED TO INCLUDE THE COST ITEM OF $17,076. YOU HAVE FURNISHED WORKSHEETS TO SUBSTANTIATE YOUR ALLEGATION OF ERROR.

THE QUESTION FOR CONSIDERATION HERE IS NOT WHETHER AN ERROR WAS, IN FACT, MADE IN YOUR BID ON ITEM NO. 1 BUT RATHER DID THERE EXIST ANY CIRCUMSTANCES THAT ESTABLISHED NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, TO THE GOVERNMENT CONTRACTING OFFICER AS TO THE PROBABILITY OF ERROR IN THE BID PRIOR TO AWARD.

INSOFAR AS ACTUAL NOTICE IS CONCERNED, THE DEPARTMENT OF THE ARMY REPORTS THAT ON THE DAY THE CONTRACT WAS AWARDED CERTAIN REPRESENTATIVES OF YOUR COMPANY CONFERRED WITH ARMY OFFICIALS ABOUT THE PROJECT. AT THAT TIME, WHILE INQUIRIES WERE MADE BY YOUR REPRESENTATIVES AS TO THE PROCEDURES TO BE FOLLOWED AND THE DATA NECESSARY TO SUPPORT A CLAIM OF MISTAKE IN BID, THE ARMY OFFICIALS BELIEVED SUCH INQUIRIES WERE PROMPTED SOLELY BE REASON OF THE EXTENSION ERROR MADE BY YOU ON ITEM NO. 20 OF YOUR BID. THE OFFICIALS STATE THAT THEY DO NOT RECALL ANY ASSERTIONS MADE BY YOUR REPRESENTATIVES AT THAT TIME THAT ANY OTHER ERRORS WERE MADE IN COMPUTING THE BID. IN FACT, IT IS REPORTED THAT YOUR REPRESENTATIVES WERE VERY INSISTENT UPON GETTING THE CONTRACT AT YOUR CORRECTED BID PRICE AND THAT THEY DID NOT WANT TO DO ANYTHING WHICH WOULD JEOPARDIZE THE AWARD TO YOU. FOR THESE REASONS WE DO NOT FIND THAT THERE EXISTED ANY ACTUAL NOTICE OF ERROR.

WITH RESPECT TO THE CONSTRUCTIVE NOTICE FEATURE OF THE CASE, THE FOLLOWING OBSERVATIONS APPEAR TO BE CONTROLLING. FIRST, THE USUAL BID COMPARISON BASIS FOR DETECTING THE PROBABILITY OF AN ERROR IN A BID WAS NOT AVAILABLE TO THE GOVERNMENT CONTRACTING OFFICER IN THIS CASE SINCE THERE WERE ONLY TWO BIDS RECEIVED. OUR OFFICE CONSISTENTLY HAS HELD THAT IN SUCH INSTANCES THERE IS NO MORE REASON FOR THE CONTRACTING OFFICER TO SUSPECT AN ERROR WAS MADE BY THE LOW BIDDER IN QUOTING A PRICE TOO LOW THAN THERE IS TO BELIEVE THAT THE HIGH BIDDER MADE AN ERROR IN QUOTING A PRICE TOO HIGH. THE CONTRACTING OFFICER REPORTS THAT WHEN HE NOTICED THAT YOUR BID FOR ITEM NO. 1, COVERING THE UTILITY BUILDING, WAS APPROXIMATELY $11,000 LESS THAN THE GOVERNMENT'S ESTIMATE FOR THIS PARTICULAR PART OF THE CONSTRUCTION, THE PRICE QUOTED BY YOU FOR EACH AND EVERY ITEM WAS FURTHER CAREFULLY ANALYZED AND EVALUATED WITH THE ESTIMATE. THIS RESULTED IN HIS BELIEF THAT YOU HAD UNBALANCED YOUR BID AND WHEN IT WAS CONSIDERED THAT YOUR TOTAL CORRECTED BID WAS OVER $16,000 IN EXCESS OF THE GOVERNMENT'S ESTIMATE, TO WHICH A FLAT 10 PERCENT IS REPORTED TO HAVE BEEN ADDED, THE CONTRACTING OFFICER DETERMINED THAT YOUR BID OF $159,645,75 REFLECTED A FAIR AND REASONABLE OFFER TO PERFORM THE WORK SPECIFIED. VIEW OF THIS, WE REASONABLY MAY NOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. HENCE, IT MUST BE HELD THAT THE BID WAS ACCEPTED IN GOOD FAITH AND SUCH AN ACCEPTANCE CONSUMMATED A VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES, AND NEITHER OUR OFFICE NOR ANY OFFICER OF THE GOVERNMENT IS AUTHORIZED TO WAIVE OR RELINQUISH THE RIGHTS WHICH VEST IN THE GOVERNMENT UNDER SUCH CONTRACTS.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR AUTHORIZING PAYMENT OF ANY ADDITIONAL AMOUNT UNDER CONTRACT NO. DA-15-029-CIVENG-59-1064.