B-166399, APR. 15, 1969

B-166399, APR. 15, 1969

TO TERRY FEENEY, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 5, 1969, PROTESTING THE CONTRACT AWARD TO SLOCUM IRON WORKS, INCORPORATED, UNDER INVITATION FOR BIDS NO. DACA01-69-B-9001, ISSUED BY THE CORPS OF ENGINEERS, MOBILE DISTRICT, MOBILE, ALABAMA.

THE INVITATION REQUESTED BIDS FOR THE ALTERATION OF THE HYDROGEN AND NITROGEN SYSTEMS AT THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION MISSISSIPPI TEST FACILITY. A TOTAL OF SIX BIDS WERE RECEIVED AND BIDS WERE OPENED ON JANUARY 16, 1969. THE BID BY SLOCUM, $74,392, WAS LOW; YOUR BID AT $98,000, WAS SECOND. INASMUCH AS BOTH OF THESE BIDS WERE CONSIDERABLY LESS THAN THE GOVERNMENT ESTIMATE, $177,470, CONFIRMATION WAS REQUESTED FROM THE TWO LOW BIDDERS.

BY LETTER DATED JANUARY 20, 1969, YOUR BID PRICES WERE VERIFIED. THE LOW BIDDER, SLOCUM, ADVISED BY LETTER ON JANUARY 17, 1969, THAT MATHEMATICAL ERRORS HAD BEEN DISCOVERED IN ITS BID AND BY LETTER OF JANUARY 21, 1969, REQUESTED PERMISSION TO CORRECT THE BID. SLOCUM SUBMITTED WITH THE LETTER OF JANUARY 21, 1969, THE ORIGINAL WORKSHEETS AND EQUIPMENT RENTAL QUOTATIONS UPON WHICH THE BID WAS BASED. REVIEW OF THIS MATERIAL CLEARLY SHOWS THAT SLOCUM MADE AN ERROR IN ADDITION IN THE COST OF EQUIPMENT AND LABOR FOR MOVING THE MOTOR CRANES. THIS ERROR WAS COMPOUNDED BY THE NUMBER OF MOVES AND IN FIGURING THE OVERHEAD AND PROFIT ON THE ERRONEOUS FIGURE. THE TOTAL RESULT PLUS AN ERROR IN THE ADDITION OF THE SUBTOTALS EQUALLED A $7,000 MISTAKE IN THE BID PRICE FOR ITEM 1. ITEM 6 ALSO HAD A MISTAKE IN THE ADDITION OF THE SUBTOTALS IN THE AMOUNT OF $1,000. ACCORDINGLY, SLOCUM REQUESTED THAT THE BID PRICE BE CORRECTED TO REFLECT THE $8,000 ERROR OR AN INCREASE TO $82,392.

THE GENERAL COUNSEL OF THE OFFICE OF THE CHIEF OF ENGINEERS, PURSUANT TO THE AUTHORITY GRANTED BY ARMED SERVICES PROCUREMENT REGULATION 2-406.3 (B) (10, APPROVED THE CORRECTION OF THE SLOCUM BID. IN VIEW OF THE CLEAR EVIDENCE PRESENTED BY SLOCUM AND THE FACT THAT EVEN AS CORRECTED THE BID BY SLOCUM REMAINED LOW, THIS OFFICE FINDS THE ACTION WAS PROPER UNDER THE DELEGATED AUTHORITY REFLECTED IN ASPR 2-406.3 (A) (3).

WE HAVE CAREFULLY CONSIDERED YOUR COMMENTS RESPECTING THE DETRIMENT WHICH MAY RESULT TO THE COMPETITIVE BIDDING SYSTEMS. WHILE THE POSSIBILITY OF ABUSE IS BY NATURE PRESENT WHERE THE EXERCISE OF JUDGMENT IS REQUIRED, IN THE CORRECTION OF THESE TYPES OF MISTAKES WE BELIEVE THE BENEFITS TO THE GOVERNMENT AND SAFEGUARDS IN THE REGULATION OUTWEIGH THE THREAT OF ABUSE. IN THIS VEIN WE STATED IN B 164886, DECEMBER 6, 1968, AS FOLLOWS:

"CORRECTION, RATHER THAN WITHDRAWAL, OF AN ERRONEOUS BID IS A LONG ESTABLISHED PRACTICE IN PROPER CASES SANCTIONED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AS A JUSTIFIABLE MEANS OF PREVENTING THE LOSS TO THE GOVERNMENT OF A POTENTIALLY ADVANTAGEOUS BID. SINCE CORRECTION IS NEVER PERMITTED WHERE ITS EFFECT WOULD BE TO DISPLACE ANOTHER BID (UNLESS THE CORRECT AMOUNT IS CLEARLY ASCERTAINABLE FROM THE FACT OF THE BID), THE PROPRIETY OF PERMITTING CORRECTION IS ESSENTIALLY A MATTER BETWEEN THE BIDDER AND THE GOVERNMENT (SEE 42 COMP. GEN. 723, 725) AND THE INTERESTS OF OTHER BIDDERS, WHO WOULD NOT BE IN LINE FOR AWARD UNLESS THE BID IN QUESTION WERE REJECTED, ARE NOT CONSIDERED TO BE SUCH AS TO ENTITLE THEM TO PARTICIPATE AS ADVERSARY PARTIES IN THIS PURELY ADMINISTRATIVE DETERMINATION, ALTHOUGH THEY ARE PERMITTED TO APPLY FOR AND OBTAIN REVIEW BY OUR OFFICE OF THE ADMINISTRATIVE ACTION.

"OUR OFFICE RECOGNIZED THE SERIOUSNESS OF THESE MATTERS WHEN GRANTING AUTHORITY, SUBJECT TO OUR REVIEW, TO THE CHIEF OF ENGINEERS, AND OTHER HEADS OF PROCURING AGENCIES, TO DECIDE CERTAIN TYPES OF CASES INVOLVING ERRORS IN BIDS ALLEGED PRIOR TO AWARD. SEE ASPR 2 406.3 (B) (1).

"WE SHARE YOUR CONCERN THAT UNSCRUPULOUS BIDDERS NOT BE ALLOWED TO USE THE MISTAKE IN BID PROCEDURE TO OBTAIN AN UNDUE ADVANTAGE OVER THE GOVERNMENT OR THE OTHER BIDDERS. ON THE OTHER HAND, BASED ON THE FOREGOING LEGAL ANALYSIS, WE DO NOT BELIEVE THE COURTS WOULD PERMIT THE ENFORCEMENT OF A CONTRACT ON THE BASIS OF A BID KNOWN BY THE CONTRACTING OFFICER PRIOR TO AWARD TO HAVE BEEN SUBMITTED IN ERROR; AND BID CORRECTION, WE BELIEVE, IS APPROPRIATE UNDER THE RULES TO PROTECT THE INTERESTS OF THE GOVERNMENT. ACCORDINGLY, IN OUR VIEW, THE MOST FEASIBLE SOLUTION IS TO RETAIN THE PRESENT RULES AND TO USE OUR REVIEW AUTHORITY TO INSURE THAT THOSE RULES ARE STRICTLY AND PROPERLY APPLIED.'