B-145941, JUN. 2, 1961

B-145941, JUN. 2, 1961

TO THE ADMINISTRATOR, FEDERAL AVIATION AGENCY:

REFERENCE IS MADE TO A LETTER DATED MAY 26, 1961, FROM THE CHIEF, MATERIAL PROGRAM DIVISION OF YOUR AGENCY, RELATIVE TO A MISTAKE ALLEGED TO HAVE BEEN MADE TO ELECTRONIC AND MISSILE FACILITIES, INC., IN ITS BID SUBMITTED IN RESPONSE TO AN INVITATION FOR BIDS ISSUED MARCH 1, 1961, FOR THE CONSTRUCTION OF AN AIR ROUTE TRAFFIC CENTRAL CENTER BUILDING AT NASHUA, NEW HAMPSIRE.

THE INVITATION REQUESTED BIDS ON A JOB BASIS--- TO BE OPENED 2 P.M; E.D.S.T., MAY 15, 1961--- FOR THE CONSTRUCTION WORK AS INDICATED ABOVE. THE LOW BID OF $1,776,000 WAS SUBMITTED BY ELECTRONIC AND MISSILE FACILITIES, INC. THE OTHER 15 BIDS RECEIVED RANGED FROM $2,028,359 TO $2,298,000. THE GOVERNMENT ESTIMATE FOR THE WORK WAS $2,000,000.

ON THE DAY SUBSEQUENT TO THE OPENING OF BIDS, MR. COHEN, EXECUTIVE VICE PRESIDENT OF ELECTRONIC AND MISSILE FACILITIES, INC., TELEPHONED THE CONTRACTING OFFICE AND STATED THAT A MISTAKE OF $200,000 IN THE BID PRICE HAD BEEN MADE AND THAT THE AMOUNT OF THE BID SHOULD HAVE BEEN $1,976,000. WRITTEN EVIDENCE, AS WELL AS ORAL EVIDENCE, OF THE ALLEGED MISTAKE WAS CONSIDERED BY THE CONTRACTING OFFICE AND IT WAS CONCLUDED THAT THE EXISTENCE OF A MISTAKE HAD NOT BEEN CLEARLY AND CONVINCINGLY ESTABLISHED. AWARD WAS THERETOFORE MADE TO ELECTRONIC ON MAY 22, 1961, AT ITS BID PRICE. IN ITS LETTER OF MAY 23, 1961, TO OUR OFFICE, ELECTRONIC REQUESTS A REVIEW OF THE DETERMINATION DENYING CORRECTION OR WITHDRAWAL OF ITS BID.

A REVIEW OF THE RECORD INDICATES THAT MR. GEORGE SOLOTAR WAS EMPLOYED AS AN ESTIMATOR FOR ELECTRONIC AND HAD PROCEEDED FROM NEW YORK, ITS MAIN OFFICE, TO BOSTON FOR THE PURPOSE OF GETTING BIDS FROM SUBCONTRACTORS ON THE CONTRACT WORK WHICH HE COMBINED WITH HIS OWN ESTIMATE ON VARIOUS PHASES OF THE WORK. THE BID PRICE ARRIVED AT BY MR SOLOTAR WAS COMMUNICATED BY TELEPHONE TO MR. KAGEN, PRESIDENT OF ELECTRONIC, IN NEW YORK WHO ASSUMED THE RESPONSIBILITY OF DETERMINING THE AMOUNT OF THE BID TO BE ENTERED ON THE BID FORM. MR. JOEL ROTH, AN EMPLOYEE OF ELECTRONIC, WAS FURNISHED WITH A SIGNED BID FORM BUT WITH THE AMOUNT TO BE BID LEFT BLANK AND WAS STATIONED AT THE FEDERAL BUILDING AT IDLEWILD TO AWAIT INSTRUCTIONS FROM MR. KAGEN. AT ABOUT 1:20 P.M. ON THE DAY OF OPENING OF BIDS MR. ROTH WAS INSTRUCTED BY MR. KAGEN TO INSERT THE SUM OF $1,746,000 IN THE APPROPRIATE PLACE ON THE BID FORM. HOWEVER, SHORTLY AFTER 1:30 P.M., MR. SOLOTAR, IN BOSTON AT THE TIME, TELEPHONED MR. KAGAN THAT DUE TO A CHANGE IN A QUOTATION BY A PROSPECTIVE SUBCONTRACTOR, THE BID PRICE SHOULD BE INCREASED BY ABOUT $30,000 OR $40,000. MR. KAGAN IMMEDIATELY TELEPHONED MR. ROTH TO INCREASE THE AMOUNT OF THE BID BY $30,000. THIS WAS DONE AND THE AMOUNT OF THE BID WAS CHANGED TO $1,776,000 BEFORE IT WAS DEPOSITED WITH THE CONTRACTING OFFICE.

THE RECORD INDICATES THAT MR. SOLOTAR HAD COMPUTED THE AMOUNT TO BE BID AS $1,958,871 AND A COPY OF THE WORKSHEET SUPPORTS THIS FIGURE. IT IS CONTENDED THAT MR. SOLOTAR TELEPHONED MR. KAGAN SHORTLY BEFORE OPENING OF THE BIDS AND GAVE HIM THE PRICE OF $1,958,871 WHICH MR. KAGAN JOTTED DOWN ON A PAD. ALSO, IT IS CONTENDED THAT MR. KAGAN THEN REDUCED THE FIGURE TO COME UNDER THE $1,950,000 MARK AND IN REWRITING THE FIGURE WROTE $1,746,000 INSTEAD OF $1,946,000 AS INTENDED. IT IS STATED BY MR. KAGAN THAT THE "9" IN $1,958,871 WAS NOT CLEARLY WRITTEN SO THAT IN REDUCING THIS FIGURE IT WAS MISREAD AS $1,758,871. IT IS NOTED FROM THE CONTRACTING OFFICER'S STATEMENT THAT ELECTRONIC HAD BID ON TWO SIMILAR PROJECTS, ONE AT LEESBURG, VIRGINIA, ON WHICH IT BID THE AMOUNT OF $1,785,000 AND THE OTHER AT SLIDELL, LOUISIANA, ON WHICH IT WAS THE SUCCESSFUL BIDDER AT ITS BID PRICE OF $1,712,346. THESE PROJECTS WERE ESTIMATED BY YOUR AGENCY TO COST APPROXIMATELY $300,000 LESS THAN THE PROJECT INVOLVED HERE ON WHICH ELECTRONIC BID THE AMOUNT OF $1,776,000.

THE EVIDENCE IN THIS CASE MAY BE REGARDED AS SUFFICIENT TO HAVE JUSTIFIED DISREGARDING THE BID OF ELECTRONIC. SEE 36 COMP. GEN. 441. HOWEVER, IT CANNOT BE REGARDED AS SUFFICIENT TO ALLOW AN INCREASE IN THE CONTRACT PRICE. SEE 38 COMP. GEN. 76.

ACCORDINGLY, THE INVOLVED CONTRACT MAY BE CANCELED WITHOUT LIABILITY ON THE PART OF EITHER PARTY TO THE CONTRACT.

THE ENCLOSURES ACCOMPANYING THE LETTER OF MAY 26, EXCEPTING THE CONTRACTING OFFICER'S STATEMENT, ARE RETURNED.