B-154431, AUG. 11, 1964

B-154431, AUG. 11, 1964

TO STACKLER, LEVENFELD, LEVY AND STACKLER, ATTORNEYS AT LAW:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 21, 1964, REQUESTING ON BEHALF OF CENTRAL WATCH SERVICE, FURTHER CONSIDERATION OF OUR DECISION OF JULY 1, 1964, B-154431, DENYING REFORMATION OF CONTRACT NO. V5238C-220 WITH CENTRAL WATCH SERVICE BECAUSE OF MISTAKE IN BID ALLEGED AFTER AWARD.

IN YOUR REQUEST FOR REVIEW YOU MAKE FOUR CONTENTIONS: (1) THAT THIS OFFICE ERRED IN CONSIDERATION OF THE $2,500 ESTIMATE OF THE WORK TO BE DONE MADE BY THE ENGINEERING DIVISION AT THE HOSPITAL; (2) THAT WE ERRED IN FINDING THAT CENTRAL WATCH SERVICE MADE A UNILATERAL MISTAKE IN ITS BID; (3) THAT WE ERRED IN NOT CONSIDERING THE CONTRACTING OFFICER'S NOTICE OF ERROR IN THE CENTRAL WATCH SERVICE BID; AND (4) THAT THE REJECTION OF THE SUBSEQUENT NOTICE OF ERROR BY THE CONTRACTING OFFICER IS CONTRARY TO THE POLICY OF FAIR DEALING EXPRESSED BY THIS OFFICE.

IN CONNECTION WITH (1), YOU STATE THAT THE ENGINEERING DIVISION FAILED TO CONSIDER THE LENGTH OF TIME IT WOULD TAKE TO DO THE JOB IN ARRIVING AT ITS ESTIMATE, AND THAT MR. JOE PREZKURAT OF CENTRAL WATCH SERVICE SURVEYED THE JOB AND ADVISED THE VETERANS ADMINISTRATION THAT BECAUSE OF WORKING CONDITIONS IN THE CRAWL SPACE, THE WORK WOULD TAKE AT LEAST 60 DAYS TO COMPLETE.

IN OUR DECISION OF JULY 1, 1964, IT WAS STATED THAT PRIOR TO THE ISSUANCE OF THE INVITATION, CENTRAL WATCH SERVICE VISITED THE SITE AND ON OCTOBER 30, 1963, SUBMITTED AN INFORMAL QUOTATION OF $1,246 TO INSTALL A "PANIC ALARM" ON 11 DOORS AND AN ALTERNATE PRICE OF $1,315 FOR A "LOCAL PROPRIETARY SYSTEM" ON 11 DOORS; THAT THE ENGINEERING DIVISION AT THE HOSPITAL, UPON FURNISHING AN ESTIMATE IN CONNECTION WITH THE QUOTATION, COMBINED BOTH SYSTEMS, ADDED ONE ADDITIONAL DOOR FOR MECHANICAL EXIT LOCK AND 9 ADDITIONAL DOORS UNDER THE ELECTRICAL SYSTEM AND ESTIMATED THE TOTAL AT $2,500. THIS THEN BECAME ONE MEASURE OF THE COST OF THE WORK TO BE PERFORMED AND WAS PROPERLY FOR CONSIDERATION IN EVALUATION OF THE BIDS. SINCE THE CONTRACTING OFFICER CONSIDERED THE LOW BID OF CENTRAL WATCH SERVICE TO BE "REASONABLE," WE CONCLUDED THAT THERE WAS GREATER REASON TO BELIEVE THAT THE HIGH BID ($5,856) WAS TOO HIGH THAN THAT THE LOW BID ($3,450) WAS TOO LOW. IN VIEW OF THE FACT THAT 20 DAYS WAS THE PERIOD ESTABLISHED BY THE INVITATION FOR COMPLETION OF ALL WORK, AND BOTH BIDS WERE SUBMITTED ON THAT BASIS, WE SEE NO VALID REASON WHY IT MAY BE CONTENDED THAT THE CONTRACTING OFFICER WAS REQUIRED TO RELY UPON OR ACCEPT THE ADVICE OF YOUR COMPANY'S REPRESENTATIVE, THAT IT WOULD TAKE 60 DAYS TO COMPLETE THE JOB, IN LIEU OF THE ENGINEER'S ESTIMATE OF COST.

WITH RESPECT TO (2), YOU STATE THAT THE SPECIFICATIONS BID ON BY CENTRAL WATCH SERVICE WERE ARRIVED AT AFTER CONSULTATION BETWEEN THE COMPANY AND THE VETERANS ADMINISTRATION, AND THAT IF THERE WAS ANY MISTAKE IN REGARD TO THE BID IT WAS A MUTUAL MISUNDERSTANDING BETWEEN THE VETERANS ADMINISTRATION AND CENTRAL WATCH SERVICE AFTER LONG NEGOTIATIONS PRIOR TO THE SIGNING OF THE BID.

WHILE THE RECORD INDICATES THAT CENTRAL WATCH SERVICE VISITED THE SITE AND SUBMITTED AN INFORMAL QUOTATION ON PERFORMING CERTAIN WORK PRIOR TO THE ISSUANCE OF THE INVITATION, THE INVITATION CLEARLY ASKED FOR BIDS FOR LABOR, MATERIAL AND EQUIPMENT NECESSARY TO FURNISH AND INSTALL AN EMERGENCY EXIT DOOR ALARM SYSTEM FOR 20 DOORS IN THREE BUILDINGS AND SPECIFICALLY STATED THAT A "MECHANICAL EXIT LOCK SHALL BE INSTALLED ON TWELVE (12) DOORS AND SHALL BE AN APPROVED LOCKING DEVICE COMPLETE FOR NORMAL AND EMERGENCY USE OF DOOR.' SINCE CENTRAL WATCH SERVICE BY LETTER OF FEBRUARY 12, 1964, STATED THAT ITS BID PRICE DID NOT TAKE INTO CONSIDERATION THE CHARGE NECESSARY TO COVER THE TWELVE LOCAL BELL BOXES (MECHANICAL EXIT LOCKS) REQUIRED BY THE SPECIFICATIONS, IT SEEMS CLEAR THAT CENTRAL WATCH SERVICE NEGLECTED TO REVIEW THE SPECIFICATIONS AS ISSUED IN THE INVITATION AND THAT THE MISTAKE WAS UNILATERAL.

AS TO (3), YOU STATE THAT THE VETERANS ADMINISTRATION CONTRACTING OFFICER MADE A FINDING IN FAVOR OF CENTRAL WATCH SERVICE IN HIS LETTER OF MARCH 24, 1964, WITHIN THE PURVIEW OF THE DISPUTES PROVISION OF THE CONTRACT, AND THAT THIS OFFICE IS WITHOUT AUTHORITY TO REVERSE SUCH A FINDING.

IN HIS LETTER OF MARCH 24, 1964, THE CONTRACTING OFFICER EXPRESSED THE OPINION THAT, CONSIDERING ALL THE RELATED MATERIAL NOW PRESENTED, HE FEELS THAT CENTRAL WATCH SERVICE MADE AN ERROR IN ITS BID WHICH SHOULD HAVE BEEN NOTICED BY SUPPLY AT THE TIME OF BID OPENING BECAUSE OF THE DIFFERENCE IN PRICE BETWEEN THE HIGH AND LOW BID. THIS, HOWEVER, WAS NOT A DECISION BY THE CONTRACTING OFFICER UNDER THE DISPUTES CLAUSE ON A QUESTION OF FACT ARISING UNDER THE CONTRACT, BUT WAS AN OPINION RELATING TO THE VALIDITY OF THE CONTRACT AND AS SUCH IS NOT BINDING UPON THIS OFFICE.

UNDER (4) YOU STATE THAT OUR REJECTION OF THE ALLEGATION OF ERROR IN BID, BECAUSE THE ERROR WAS NOT DETECTED IMMEDIATELY BY THE CONTRACTING OFFICER, DOES NOT CONSTITUTE FAIR AND IMPARTIAL CONSIDERATION.

AS STATED IN THE DECISION OF JULY 1, 1964, IT LONG HAS BEEN THE RULE THAT WHERE A BIDDER HAS MADE A MISTAKE AND THE BID HAS BEEN ACCEPTED, THE BIDDER MUST BEAR THE CONSEQUENCES UNLESS THE ERROR WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON NOTICE OF THE ERROR. THIS RULE HAS BEEN ESTABLISHED BY DECISIONS OF THE COURTS, AND THIS OFFICE IS THEREFORE OBLIGED TO FOLLOW IT. IN THE PRESENT CASE THE RECORD SHOWS THAT UPON EVALUATION OF THE BIDS THE CHIEF, ENGINEERING DIVISION AND THE CONTRACTING OFFICER, WHO WAS ALSO THE CHIEF, SUPPLY DIVISION, CONCURRED IN STATING THAT THE BID OF CENTRAL WATCH SERVICE COMPLIED WITH BIDDING REQUIREMENTS AND THAT THE PRICE WAS REASONABLE. THUS, IT SEEMS CLEAR THAT THE CONTRACTING OFFICE WAS NOT ON NOTICE OF ERROR WHEN THE BIDS WERE EVALUATED, NOR DOES THERE APPEAR TO BE ANY BASIS ON WHICH IT MAY NOW BE CONCLUDED THAT THE ERROR WAS SO APPARENT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE. THE CONTRACT THEREFORE MUST BE CONSIDERED FULLY BINDING IN ACCORDANCE WITH ITS EXPRESS TERMS.