B-160861, FEB. 21, 1967

B-160861, FEB. 21, 1967

TO THE COMMANDANT, THE COAST GUARD:

REFERENCE IS MADE TO LETTER (FS-1) OF FEBRUARY 9, 1967, WITH ENCLOSURES, FROM YOUR COMPTROLLER, REQUESTING A DECISION CONCERNING A PROPOSED PRICE ADJUSTMENT INCIDENT TO A MISTAKE ALLEGED BY H AND W CONSTRUCTION COMPANY, INC. (H AND W), TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. FS- 3079/7 IS BASED.

THE 13TH COAST GUARD DISTRICT, SEATTLE, WASHINGTON, BY INVITATION FOR BIDS NO. FS-3079/7, DATED AUGUST 31, 1966, REQUESTED BIDS FOR THE CONSTRUCTION OF SIX, AND THE REMOVAL OF THREE, AID-TO-NAVIGATION STRUCTURES ON THE COLUMBIA RIVER NEAR ST. HELENS, OREGON. IN RESPONSE THERETO H AND W SUBMITTED A BID OFFERING TO PERFORM THE WORK FOR THE SUM OF $16,900, AND ON SEPTEMBER 2" 1966, AWARD OF CONTRACT WAS MADE TO H AND W BASED ON ITS LOW BID.

THEREAFTER, BY LETTER DATED OCTOBER 6, 1966, PROVIDING REQUIRED BONDS UNDER THE CONTRACT, H AND W ADVISED THE CONTRACTING OFFICER THAT ITS GENERAL MANAGER HAD OVERLOOKED A REQUIREMENT TO FURNISH A 30-FOOT HIGH STANDARD 7-FOOT SQUARE STEEL TOWER AND THAT THE COSTS WOULD BE FURNISHED WHEN AVAILABLE WITH A REQUEST FOR A CONTRACT MODIFICATION. BY LETTER DATED JANUARY 13, 1966 (1967), THE CONTRACTOR FORWARDED AN INVOICE IN THE AMOUNT OF $1,100 AS THE COST OF THE STEEL TOWER.

THE RECORD SHOWS THAT THE STEEL TOWER IN QUESTION FOR THE WAUNA RANGE REAR LIGHT WAS REQUIRED BY DRAWING NO. 79.6610, DATED AUGUST 24, 1966, WHICH WAS INCORPORATED INTO THE CONTRACT. IN HIS REPORT THE CONTRACTING OFFICER STATES AS FOLLOWS:

"SUMMARY OF THE EVIDENCE SUBMITTED BY THE CONTRACTOR: THE CONTRACTOR'S ESTIMATOR OVERLOOKED THE REQUIREMENT TO FURNISH A STEEL TOWER. SPECIFICATIONS OF PRIOR CONTRACTS, THE STEEL TOWER/S) HAS BEEN GOVERNMENT FURNISHED MATERIAL; THEREFORE, IT WAS ASSUMED BY THE ESTIMATOR THAT THE STEEL TOWER FOR THIS CONTRACT WOULD BE GOVERNMENT FURNISHED MATERIAL.

"I BELIEVE THAT THE CONTRACTOR MADE A BONA FIDE MISTAKE. THE CONTRACTOR'S ESTIMATING SHEET MAKES NO MENTION OF THE STEEL TOWER. SINCE 1958, 14 CONTRACTS HAVE BEEN AWARDED FOR WORK WHICH REQUIRED A STEEL TOWER/S). THE TOWERS WERE GOVERNMENT FURNISHED IN 11 OF THE 14 CONTRACTS. THE BID OF H AND W CONSTRUCTION CO. WAS $4,100 BELOW THE GOVERNMENT'S ESTIMATED COST FOR THE PROJECT AND $4,137 BELOW THE NEXT LOW BIDDER.'

THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE CONTRACT PRICE BE INCREASED BY $1,100. THE OTHER TWO BIDS RECEIVED ON THIS PROJECT WERE FOR $21,037 AND $21,600 AND THE GOVERNMENT ESTIMATE WAS $21,000. IN THIS REGARD, YOUR COMPTROLLER STATES THAT THE CONTRACTING OFFICER FAILED TO SEEK BID VERIFICATION ALTHOUGH HE SHOULD HAVE BEEN ON NOTICE OF A MISTAKE FROM THE CONSIDERABLE DIFFERENCE IN THE LOW BID AND THE NEXT LOW BID, AND ESPECIALLY THE CLOSENESS OF THE OTHER TWO BIDS AND THE GOVERNMENT ESTIMATE.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, WE CONCUR WITH THE REPORT OF THE CONTRACTING OFFICER AND YOUR COMPTROLLER THAT H AND W MADE A BONA FIDE ERROR IN ITS BID, AS ALLEGED, AND THAT THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING VERIFICATION. ACCORDINGLY, CONTRACT NO. FS-3079/7 MAY BE AMENDED TO PROVIDE FOR A $1,100 INCREASE FOR THE TOWER INVOLVED, AS ADMINISTRATIVELY RECOMMENDED. THE BID AS CORRECTED, $18,000, WILL STILL BE THE LOWEST BID RECEIVED ON THE PROJECT. A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO THE CONTRACT.