B-164459, AUGUST 21, 1968, 48 COMP. GEN. 90

B-164459, AUGUST 21, 1968, 48 COMP. GEN. 90

CONTRACTS - SPECIFICATIONS - MISDESCRIPTIONS, ETC. - CONSTRUCTION CONTRACTS THE INCLUSION OF THE CLAUSE REQUIRED BY PARAGRAPH 7-602.45 OF THE ARMED SERVICES PROCUREMENT REGULATION IN ALL MILITARY FIXED-PRICE CONSTRUCTION CONTRACTS TO PROVIDE THAT OMISSIONS FROM DRAWINGS OR SPECIFICATIONS, OR THE MISDESCRIPTION OF DETAILS OF THE WORK NECESSARY TO CARRY OUT THE INTENT OF THE DRAWINGS AND SPECIFICATIONS, OR DETAILS WHICH ARE CUSTOMARILY PERFORMED SHALL NOT RELIEVE THE CONTRACTOR FROM PERFORMING THE OMITTED OR MISDESCRIBED DETAILS OF THE WORK IS NOT RESTRICTIVE OF THE FULL AND FREE COMPETITION CONTEMPLATED BY 10 U.S.C. 2305 (A), AS WELL AS 41 U.S.C. 253 (A). THEREFORE, IN VIEW OF THE FACT THAT A CONTRACTING AGENCY HAS THE PRIMARY RESPONSIBILITY FOR DRAFTING SPECIFICATIONS TO MEET THE REQUIREMENTS OF THE GOVERNMENT, AND THE CLAUSE IS REASONABLE AND NECESSARY IN THE PERFORMANCE OF COMPLICATED CONSTRUCTION CONTRACTS, THE GENERAL USAGE OF THE CLAUSE WILL NOT BE QUESTIONED.

TO THE ZINGER CONSTRUCTION COMPANY, INC., AUGUST 21, 1968:

REFERENCE IS MADE TO YOUR LETTER OF MAY 24, 1968, REQUESTING OUR DECISION AS TO THE LLGALITY OF A CONTRACT CLAUSE APPARENTLY USED IN GOVERNMENT CONSTRUCTION CONTRACTS. YOU ENCLOSE, AS AN EXAMPLE OF ITS USE, A COPY OF ONE PAGE OF AN UNIDENTIFIED INVITATION FOR BIDS WHICH INCLUDED THE CLAUSE UNDER PARAGRAPH SP-2B (CONTRACT DRAWINGS, MAPS AND SPECIFICATIONS). THE CLAUSE READS AS FOLLOWS:

B. OMISSIONS FROM THE DRAWINGS OR SPECIFICATIONS OR THE MISDESCRIPTION OF DETAILS OF WORK WHICH ARE MANIFESTLY NECESSARY TO CARRY OUT THE INTENT OF THE DRAWINGS AND SPECIFICATIONS, OR WHICH ARE CUSTOMARILY PERFORMED, SHALL NOT RELIEVE THE CONTRACTOR FROM PERFORMING SUCH OMITTED OR MISDESCRIBED DETAILS OF THE WORK BUT THEY SHALL BE PERFORMED AS IF FULLY AND CORRECTLY SET FORTH AND DESCRIBED IN THE DRAWINGS AND SPECIFICATIONS.

YOU STATE THAT THE USE OF SUCH A CLAUSE IS ILLEGAL; THAT "THIS PARAGRAPH -B- IS UNFAIR TO ALL BIDDERS AND COULD ONLY RESULT IN INCREASED COSTS TO THE GOVERNMENT; THAT IT IS A LOOPHOLE FOR PREFERENCED CONTRACTORS; " AND IS CONTRARY TO THE HOLDINGS IN SEVERAL UNSPECIFIED COURT CASES.

IT IS PROVIDED AT 41 U.S.C. 253 (A) AND 10 U.S.C. 2305 (A/--- STATUTES GOVERNING PROCUREMENT BY FORMAL ADVERTISING BY THE CIVILIAN AND MILITARY DEPARTMENTS, RESPECTIVELY--- THAT "INVITATIONS FOR BIDS SHALL PERMIT SUCH FULL AND FREE COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF TYPES OF PROPERTY AND SERVICES NECESSARY TO MEET THE REQUIREMENTS OF THE AGENCY CONCERNED.' THE PURPOSE OF THESE STATUTES REQUIRING THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDER AFTER ADVERTISING IS TO GIVE ALL BIDDERS EQUAL RIGHT TO COMPETE FOR GOVERNMENT CONTRACTS AND TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH FLOW FROM FREE AND UNRESTRICTED COMPETITION. SEE UNITED STATES V BROOKRIDGE FARM, 111 F.2D 461. PERMIT BIDDERS TO COMPETE ON EQUAL TERMS, THE INVITATIONS MUST BE SUFFICIENTLY DEFINITE TO PERMIT THE PREPARATION AND EVALUATION OF BIDS ON A COMMON BASIS, AND IT IS AXIOMATIC THAT BIDDERS CANNOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW UNLESS THEY KNOW OF AND COMPUTE THEIR BIDS IN ACCORDANCE WITH THE OBJECTIVE FACTORS COMPRISING THE BASES UPON WHICH THEIR BIDS WILL BE EVALUATED. IN 36 COMP. GEN. 380, 385, WE HELD IN THIS REGARD AS FOLLOWS:

THE "BASIS" OF EVALUATION WHICH MUST BE MADE KNOWN IN ADVANCE TO THE BIDDERS SHOULD BE AS CLEAR, PRECISE AND EXACT AS POSSIBLE. IDEALLY, IT SHOULD BE CAPABLE OF BEING STATED AS A MATHEMATICAL EQUATION. IN MANY CASES, HOWEVER, THAT IS NOT POSSIBLE. AT THE MINIMUM, THE "BASIS" MUST BE STATED WITH SUFFICIENT CLARITY AND EXACTNESS TO INFORM EACH BIDDER PRIOR TO BID OPENING, NO MATTER HOW VARIED THE ACCEPTABLE RESPONSES, OF OBJECTIVELY DETERMINABLE FACTORS FROM WHICH THE BIDDER MAY ESTIMATE WITHIN REASONABLE LIMITS THE EFFECT OF THE APPLICATION OF SUCH EVALUATION FACTOR ON HIS BID IN RELATION TO OTHER POSSIBLE BIDS. BY THE TERM "OBJECTIVELY DETERMINABLE FACTORS" WE MEAN FACTORS WHICH ARE MADE KNOWN TO OR WHICH CAN BE ASCERTAINED BY THE BIDDER AT THE TIME HIS BID IS BEING PREPARED. FACTORS WHICH ARE BASED ENTIRELY OR LARGELY ON A SUBJECTIVE DETERMINATION TO BE ANNOUNCED BY REPRESENTATIVES OF THE CONTRACTING AGENCY AT THE TIME OF OR SUBSEQUENT TO THE OPENING OF BIDS VIOLATE THE PRINCIPLE FOR THE REASON THAT THEY ARE NOT DETERMINABLE BY THE BIDDER AT THE TIME HIS BID IS BEING PREPARED.

THE UNITED STATES ARMY CORPS OF ENGINEERS, IN A LETTER DATED JUNE 19, 1968, FROM THE GENERAL COUNSEL, REPORTED TO OUR OFFICE THAT THE CHALLENGED PROVISION IS REQUIRED TO BE INCLUDED IN ALL MILITARY FIXED PRICE CONSTRUCTION CONTRACTS BY PARAGRAPH 7-602.45 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). WE ARE ALSO INFORMED THAT CONTRACT PROVISIONS SUBSTANTIALLY SIMILAR TO THE CHALLENGED CLAUSE HAVE APPEARED REGULARLY IN GOVERNMENT CONTRACTS FROM THE EARLY PART OF THIS CENTURY, AND THAT IN 1966 THE ASPR COMMITTEE DENIED A REQUEST BY THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA TO DISCONTINUE ITS USE FOR REASONS SOMEWHAT SIMILAR TO THOSE REPORTED IN THIS INSTANCE, AS FOLLOWS, BY THE GENERAL COUNSEL OF THE CORPS OF ENGINEERS:

IN DOCUMENTS AS COMPLEX AND LENGTHY AS PLANS AND SPECIFICATIONS FOR CONSTRUCTION CONTRACTS, IT IS TO BE EXPECTED THAT THERE WILL BE ERRORS OR OMISSIONS WHICH HAVE ESCAPED NOTICE BY GOVERNMENT CONTRACTING PERSONNEL. SOME OF THESE WILL NOT BE OBVIOUS UNTIL CONSTRUCTION HAS PROCEEDED TO AN ADVANCED DEGREE OF COMPLETION; OTHERS WILL BE READILY APPARENT TO A CONTRACTOR WHO IS STUDYING THE PLANS AND SPECIFICATIONS WITH A VIEW TOWARDS PREPARING HIS BID. IN THE ABSENCE OF A CLAUSE SUCH AS THIS, THE CONTRACTOR WHO SPOTS AN OBVIOUS DISCREPANCY COULD REMAIN SILENT UNTIL AFTER CONTRACT AWARD AND THEN SEEK AN EQUITABLE ADJUSTMENT UNDER THE CHANGES CLAUSE. WHEN SUCH A CLAUSE IS IN A CONSTRUCTION CONTRACT, A CONTRACTOR CANNOT TAKE ADVANTAGE OF THE GOVERNMENT IN SUCH A SITUATION BUT WILL BE HELD TO PERFORM AT THE STATED CONTRACT PRICE.

THIS CLAUSE DOES NOT, AS THE ZINGER LETTER INDICATES, CONSTITUTE A COMPLETE SHIFTING TO THE CONTRACTOR OF THE BURDEN OF ERRONEOUS SPECIFICATIONS, FOR THE CONTRACT APPEALS BOARDS HAVE INTERPRETED IT IN SUCH A MANNER AS TO HOLD CONTRACTORS RESPONSIBLE FOR WHAT THEY KNEW OR REASONABLY SHOULD HAVE KNOWN TO BE ERRONEOUS SPECIFICATIONS, PRECLUDING THEM FROM TAKING ADVANTAGE OF THE GOVERNMENT, BUT AT THE SAME TIME PROTECTING CONTRACTORS BY GRANTING ADJUSTMENTS WHEN THE ERRORS WERE NOT PATENT. THIS ISSUE WAS DISCUSSED AT LENGTH IN PHELPS CONSTRUCTION COMPANY OF WYOMING, ASBCA NO. 10276, 65-1 BCA 4761 (1965), WITH RESPECT TO A CLAUSE SIMILAR IN EFFECT, ENTITLED "SCOPE OF WORK.' THAT SCOPE OF WORK CLAUSE REQUIRED THE CONTRACTOR TO PERFORM ALL WORK NECESSARY TO CARRY OUT THE INTENT OF THE DRAWINGS AND SPECIFICATIONS OR WHICH IS CUSTOMARILY PERFORMED FOR SUCH WORK. THE DRAWINGS AND SPECIFICATIONS FURNISHED TO PHELPS SHOWED LINTELS OVER ALL WINDOWS EXCEPT BASEMENT WINDOWS. THE CUSTOMARY PRACTICE WAS TO INSTALL SUCH LINTELS OVER ALL WINDOWS. NEVERTHELESS, THE BOARD OF CONTRACT APPEALS GRANTED AN EQUITABLE ADJUSTMENT FOR THE WORK INVOLVED IN PLACING LINTELS OVER THE BASEMENT WINDOWS. IT NOTED THAT THE PURPOSE OF SUCH A CLAUSE WAS TO CAUTION BIDDERS THAT THE DRAWINGS AND SPECIFICATIONS NEED NOT SPELL OUT EVERY "NUT AND BOLT" NECESSARY TO PERFORM THE CONTRACT AND THAT THE RELATIVE COST OF THE LINTELS PLACED IT IN THE NUTS AND BOLTS CATEGORY, BUT HELD THAT WHEN THE DRAWINGS SPECIFICALLY REQUIRED LINELS TO BE FURNISHED AND INSTALLED OVER SOME WINDOWS, THE SCOPE OF WORK CLAUSE WOULD NOT BE INTERPRETED AS REQUIRING CONTRACTOR TO FURNISH AND INSTALL LINTELS OVER OTHER WINDOWS WHERE THE DRAWINGS DID NOT SO SPECIFY. THE BOARD ALSO POINTED OUT THAT TOO BROAD A CONSTRUCTION OF SUCH A CLAUSE WOULD RUN CONTRARY TO THREE CONCEPTS: (1) CONTINGENCY ITEMS SHOULD BE REDUCED; (2) THERE IS AN IMPLIED WARRANTY BY THE GOVERNMENT THAT IF ITS SPECIFICATIONS ARE FOLLOWED THE DESIRED RESULT WILL BE OBTAINED; (3) A CONTRACTOR IS REQUIRED BY HIS CONTRACT TO FOLLOW THE SPECIFICATIONS. CONVERSELY, THE BOARD NOTED THE DUTY OF A CONTRACTOR TO INQUIRE ABOUT PATENT ERRORS OR OMISSIONS. FOR YOUR INFORMATION, WE ENCLOSE COPIES OF THE REFERENCED ARMED SERVICES BOARD OF CONTRACT APPEALS, (ASBCA) DECISION AND AN EARLIER DECISION, ASBCA NOS. 5056, 5057, INVOLVING A DISPUTE WHICH AROSE OVER THE INTEPRETATION OF THE QUESTIONED CONTRACT CLAUSE.

WE HAVE OFTEN OBSERVED THAT THE DRAFTING OF PROPER SPECIFICATIONS TO MEET THE REQUIREMENTS OF THE GOVERNMENT IS A MATTER PRIMARILY WITHIN THE PROVINCE OF THE CONTRACTING AGENCY. THEREFORE, AND IN VIEW OF THE INTERPRETATION PLACED UPON THE CLAUSE BY THE ASBCA, AS STATED ABOVE, AND THE APPARENT REASONABLENESS AND NECESSITY FOR THE CLAUSE IN COMPLICATED CONSTRUCTION CONTRACTS, OUR OFFICE IS NOT INCLINED TO QUESTION ITS GENERAL USAGE BY THE CONSTRUCTION AGENCIES OF THE GOVERNMENT. WHILE THE CLAUSE REQUIRES THE SUBMISSION OF BIDS FOR SERVICES NOT SPECIFICALLY ITEMIZED, THE LANGUAGE OF THE CLAUSE CLEARLY LIMITS ITS APPLICATION TO THE MISDESCRIPTION AND OMISSION OF DETAILS WHICH ANY KNOWLEDGEABLE BIDDER WILL NORMALLY CONSIDER AND INCLUDE IN HIS BID. FURTHER, IN THIS RESPECT, WE ARE NOT AWARE OF ANY COURT DECISIONS, SUCH AS YOU ALLEGE, WHICH INTERPRET THE CLAUSE DIFFERENTLY FROM THE CITED ASBCA DECISIONS.