B-159139, JUN. 10, 1966

B-159139, JUN. 10, 1966

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED MAY 9, 1966, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, SUBMITTING FOR OUR DECISION A REQUEST BY M AND M REMODELING CONTRACTORS FOR RELIEF UNDER CONTRACT NO. V5238C-348 AWARDED BY THE VETERANS ADMINISTRATION WEST SIDE HOSPITAL, CHICAGO, ILLINOIS.

THE VETERANS ADMINISTRATION WEST SIDE HOSPITAL REQUESTED BIDS--- TO BE OPENED FEBRUARY 15, 1966--- FOR FURNISHING MATERIALS AND LABOR AND FOR PERFORMING ALL WORK NECESSARY FOR THE REMODELING OF NINTH FLOOR "A" SECTION OF BUILDING NO. 1, FOR 40-BED NURSING HOME CARE UNIT, PROJECT NO. 12-5414. THE INVITATION CALLED FOR THE SUBMISSION OF A BASE BID PRICE AND PRICES FOR ALTERNATES "A," "B" AND "C.' IN RESPONSE M AND M REMODELING CONTRACTORS SUBMITTED A BID DATED FEBRUARY 15, 1966, WHEREIN IT QUOTED A BASE BID PRICE OF $44,585 AND A PRICE OF $4,400 FOR ALTERNATE "C," MAKING AN AGGREGATE TOTAL PRICE OF $48,985 FOR BOTH ITEMS. THE ABSTRACT OF BIDS SHOWS THAT FOR THE WORK COVERED BY THE BASE BID PRICE AND ALTERNATE "C" THE THREE OTHER BIDDERS QUOTED AGGREGATE TOTAL PRICES OF $62,350, $76,640 AND $84,936. THE RECORD INDICATES THAT THE GOVERNMENT'S ESTIMATE FOR THE WORK COVERED BY THE BASE BID PRICE AND ALTERNATE "C" WAS $61,000.

IT IS REPORTED THAT MR. EARL V. MAROVITZ OF M AND M REMODELING CONTRACTORS WAS PRESENT AT THE BID OPENING TOGETHER WITH REPRESENTATIVES OF VEE SEE CONSTRUCTION COMPANY AND THE J. S. DREW CONSTRUCTION COMPANY AND THAT SINCE THERE WAS A SIGNIFICANT DIFFERENCE BETWEEN THE PRICE QUOTED BY M AND M REMODELING CONTRACTORS AND THE PRICES QUOTED BY OTHER BIDDERS, THE CONTRACTING OFFICER'S DESIGNEE ASKED MR. MAROVITZ TO CONFIRM HIS COMPANY'S BID PRICE. ALTHOUGH AT THAT TIME MR. MAROVITZ HAD IN HIS POSSESSION THE COMPANY'S ESTIMATE SHEET HE DID NOT CONSULT SUCH SHEET BEFORE CONFIRMING HIS COMPANY'S BID PRICE. IN A LETTER DATED MARCH 2, 1966, THE CONTRACTING OFFICER ADVISED M AND M REMODELING CONTRACTORS THAT A CONTRACT FOR THE WORK COVERED BY THE BASE BID PRICE AND ALTERNATE "C" HAD BEEN AWARDED TO THE COMPANY.

BY LETTER DATED MARCH 11, 1966, THE COMPANY ADVISED THE CONTRACTING OFFICER THAT AN ERROR IN ADDITION IN THE AMOUNT OF $13,000 HAD BEEN MADE IN ITS BID AND THAT THE PRICE FOR THE WORK COVERED BY THE BASE BID PRICE AND ALTERNATE "C" SHOULD HAVE READ $61,985. THE COMPANY STATED THAT THE ESTIMATE SHEET WHICH IT HAD SUBMITTED AT THE TIME OF THE BID OPENING WOULD SUBSTANTIATE THAT AN ERROR WAS MADE BY IT, AS ALLEGED. THE COMPANY'S ESTIMATE SHEET SHOWS VARIOUS ITEMS OF COST, AMONG WHICH IS ONE FOR "GEN. WORK" IN THE AMOUNT OF $13,970. THE TOTAL OF THESE ITEMS IS SHOWN ON THE ESTIMATE SHEET AS BEING $31,640; HOWEVER, THE CORRECT TOTAL FOR THESE ITEMS IS $44,640--- A DIFFERENCE OF $13,000. IN A LETTER DATED MARCH 21, 1966, THE COMPANY REQUESTED THAT THE CONTRACT PRICE FOR THE WORK BE INCREASED BY $13,000.

IN HIS LETTER OF MAY 9, 1966, IN WHICH HE RECOMMENDED THAT THE CONTRACT PRICE OF THE PROJECT BE INCREASED BY $13,000, THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, POINTS OUT THAT WHEN THE CONTRACTOR WAS REQUESTED TO VERIFY ITS BID PRICE IT WAS NOT SPECIFICALLY ADVISED THAT ITS BID WAS SIGNIFICANTLY OUT OF LINE WITH THE NEXT LOW BID AND WITH THE GOVERNMENT'S ESTIMATE.

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942, 947; AND 27 ID. 17. HOWEVER, IT IS REPORTED THAT ONE OF THE OTHER BIDDERS PRESENT AT THE BID OPENING REMARKED TO THE CONTRACTING OFFICER THAT HE COULD NOT CONCEIVE HOW M AND M REMODELING CONTRACTORS COULD PERFORM THE PROJECT WORK AT ITS BID PRICE. IN VIEW THEREOF, IT WOULD NOT APPEAR THAT THE VERIFICATION OF M AND M REMODELING CONTRACTORS' BID--- CONDUCTED INFORMALLY AT THE BID OPENING AND INVOLVING AN IMMEDIATE "ON THE SPOT" CONFIRMATION OF THE BID WITHOUT APPARENT FURTHER CHECK--- WAS SUFFICIENTLY ADEQUATE TO DISPEL THE ALREADY EXISTING DOUBT THAT THE GOVERNMENT CONTRACTING OFFICER HAD AS TO THE CORRECTNESS OF THE BID AND, THEREFORE, IT WOULD APPEAR THAT THERE STILL EXISTED, AFTER CONFIRMATION, AMPLE REASON FOR THE CONTRACTING OFFICER TO HAVE REQUESTED A FURTHER CLARIFICATION OF THE COMPANY'S BID PRIOR TO ITS ACCEPTANCE. IN THE CIRCUMSTANCES, AND SINCE THE ERROR WAS ALLEGED AND ESTABLISHED PRIOR TO THE RECEIPT OF THE NOTICE TO PROCEED, THE COMPANY SHOULD NOT BE REQUIRED TO PERFORM THE PROJECT WORK AT THE PRICE QUOTED IN ITS BID.

IT IS REPORTED THAT AFTER THE COMPANY ALLEGED ERROR IN ITS BID IT WAS INSTRUCTED TO CONTINUE THE WORK AT THE PRICE BID SUBJECT TO POSSIBLE CORRECTION BY HIGHER AUTHORITY. ACCORDINGLY, CONTRACT NO. V5238C-348 MAY BE AMENDED TO INCREASE THE PRICE FOR THE PROJECT TO $61,985, AS RECOMMENDED BY THE DIRECTOR, AND PAYMENT FOR THE WORK IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID OF M AND M REMODELING CONTRACTORS, 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.