B-170450, NOV. 13, 1970

B-170450, NOV. 13, 1970

BID PROTEST - MISTAKE REAFFIRMING DECISION OF AUGUST 31, 1970, UPHOLDING CANCELLATION AND READVERTISEMENT OF A PROCUREMENT AND ACTION OF CONTRACTING OFFICER IN PERMITTING CORRECTION OF BID OF CACCIAMANI BROTHERS. WHERE LOW BIDDER ON DAY OF BID OPENING ADVISED THAT BID AMOUNT FOR ITEM 2 INCLUDED THE TOTAL FOR ITEM 1 (BASE BID) AND ITEM 2 RATHER THAN A SEPARATE PRICE WHICH WAS THE METHOD USED UNDER THE AGENCY'S PREVIOUS BIDDING SYSTEM AND THE ERROR WAS APPARENT ON THE FACE OF THE BID AND THE BID BOND WAS BASED ON COMBINED AMOUNT, ACTION OF AGENCY IN PERMITTING CORRECTION WAS PROPER.

TO OCEAN ELECTRIC CORPORATION:

REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 4 AND 22 AND OCTOBER 1, 1970, CONCERNING OUR DECISION OF AUGUST 31, 1970, IN WHICH WE UPHELD THE CANCELLATION AND READVERTISEMENT OF SOLICITATION NO. N62470-70-B 0922.

AFTER NOTIFICATION OF OUR DECISION OF AUGUST 31, IT WAS DETERMINED THAT THE BID PRICE SUBMITTED BY CACCIAMANI BROTHERS (CACCIAMANI) ON ITEM 2 IN THE AMOUNT OF $193,200 WAS IN ERROR, AND THAT SUCH AMOUNT WAS OBVIOUSLY INTENDED TO REPRESENT THE TOTAL BID PRICE FOR ITEM 1 AND 2. THE BID PRICE ON ITEM 2 WAS THEREFORE CORRECTED TO $61,939, AND AN AWARD WAS MADE TO CACCIAMANI, IN THE TOTAL AMOUNT OF $193,200. IT IS YOUR CONTENTION THAT THE CORRECTION OF THE BID SUBMITTED BY CACCIAMANI AND THE SUBSEQUENT AWARD TO THAT FIRM WAS IMPROPER.

THE RECORD PRESENTLY BEFORE US INDICATES THAT ON AUGUST 4, THE DAY OF THE BID OPENING, THE PROCURING ACTIVITY RECEIVED A CALL FROM CACCIAMANI ADVISING THAT THE BID AMOUNT FOR ITEM 2, $193,200, WAS THE TOTAL FOR ITEM 1 (THE BASE BID) PLUS ITEM 2, RATHER THAN A SEPARATE PRICE FOR ITEM 2. THIS ADVICE WAS CONFIRMED BY LETTER OF AUGUST 4. THE PROCURING ACTIVITY ADVISES THIS IS A COMMON MISTAKE, APPARENTLY OCCURING AS A RESULT OF THE ACTIVITY'S ADOPTION OF THE "ADDITIVE OR DEDUCTIVE" PROVISIONS SET FORTH IN ASPR 2-201(B)(XLI) (EXPLAINED IN OUR DECISION OF AUGUST 31) IN WHICH BID ITEMS BEYOND THE BASE BID ARE NOT ACCUMULATED, WHEREAS A PREVIOUS BIDDING SYSTEM USED BY THE ACTIVITY ACCUMULATED AMOUNTS FOR BID ITEMS BEYOND THE BASE BID. THE ACTIVITY FURTHER ADVISES THAT THE MISTAKE AND THE INTENDED BID WERE EVIDENT FROM THE BID WHEN COMPARED WITH THE OTHER BIDS AND THE GOVERNMENT ESTIMATE. IN THIS CONNECTION, WE NOTE THAT CACCIAMANI'S BID BOND, WHICH WAS REQUIRED TO BE IN AN AMOUNT NO LESS THAN 20 PERCENT OF THE BID PRICE, WAS ADEQUATE FOR A TOTAL BID OF $193,000 BUT FELL FAR SHORT OF BEING 20 PERCENT OF THE COMBINED TOTAL OF $131,261 FOR ITEM 1 PLUS $193,200 FOR ITEM 2.

WHILE THE DEPARTMENT'S REPORT OF SEPTEMBER 23, 1970, INDICATES THAT THE PROCURING ACTIVITY CITED ASPR 2-406.3 AS AUTHORITY FOR CORRECTING CACCIAMANI'S BID, AND WE QUESTION WHETHER SUCH AUTHORITY IS APPLICABLE SINCE CORRECTION SERVED TO DISPLACE OTHER BIDDERS, WE DO BELIEVE THAT THE BID WAS PROPER FOR CORRECTION UNDER ASPR 2-406.2. IN THIS CONNECTION, WE AGREE WITH THE DEPARTMENT'S POSITION THAT AN ERROR WAS APPARENT ON THE FACE OF THE BID, AND IN VIEW OF THE PROCURING ACTIVITY'S EXPERIENCE WITH MISTAKES OF A SIMILAR NATURE SINCE ADOPTION OF THE "ADDITIVE OR DEDUCTIVE" PROVISIONS OF ASPR 2-201(B)(XLI), TOGETHER WITH OTHER FACTORS SUCH AS THE GOVERNMENT'S ESTIMATE, OTHER BID PRICES, AND THE AMOUNT OF THE BID BOND, WE BELIEVE THAT CORRECTION OF THE BID, FOLLOWING VERIFICATION OF THE ERROR BY CACCIAMANI, WOULD HAVE BEEN PROPER UNDER ASPR 2-406.2. THE ERRONEOUS CITATION TO ASPR 2 406.3 AS AUTHORITY FOR CORRECTING THE BID THEREFORE WOULD NOT, IN ITSELF, OPERATE TO INVALIDATE THE CONTRACT AWARDED TO CACCIAMANI.

WHILE IT APPEARS FROM THE AUGUST 4 LETTER FROM CACCIAMANI THAT IT MADE A MISTAKE BOTH AS TO THE BASE BID PRICE AS WELL AS THE ITEM 2 PRICE, SINCE THE PROCURING ACTIVITY ANTICIPATED RECEIPT OF FUNDING FOR BOTH THE BASE BID AND ITEM 2, THE ONLY AMOUNT THAT WAS OF INTEREST TO THE PROCURING ACTIVITY WAS THE TOTAL BID PRICE OF $193,200, WHICH CACCIAMANI CONFIRMED AS ITS PRICE, AND WE THEREFORE DO NOT BELIEVE CORRECTION OF THE UNIT PRICE IS A MATERIAL FACTOR IN DECIDING THE MERITS OF YOUR PROTEST.

IN REGARD TO YOUR QUESTION CONCERNING THE SOURCE OF FUNDS IN EXCESS OF THE ORIGINAL AMOUNT OF $133,000.00 AVAILABLE FOR THIS PROCUREMENT, WE ARE ADVISED THAT THE SPONSORING ACTIVITY PROVIDED SUFFICIENT ADDITIONAL FUNDS FOR ALL WORK FROM SOURCES IDENTIFIED BY CODE NUMBERS IN THE LETTER OF AWARD DATED AUGUST 31, 1970, AND WHICH CAN BE FURTHER IDENTIFIED AS FOLLOWS. APPROPRIATION 17X4912. 2414 NIF IS THE DESIGNATION FOR A NAVAL INDUSTRIAL FUND WHICH IS A REVOLVING OR WORKING CAPITAL FUND SET UP UNDER AUTHORITY OF 10 U.S.C. 2208 FOR THE PURPOSE OF FINANCING, ON A REIMBURSABLE BASIS, INDUSTRIAL AND COMMERCIAL TYPE ACTIVITIES WITHIN OR AMONG DEPARTMENTS OR AGENCIES OF THE DEPARTMENT OF DEFENSE. THESE ACTIVITIES ARE SUPPORTED BY ORDERS CITING THE CUSTOMER'S APPROPRIATIONS. COSTS ARE INITIALLY FINANCED BY THE INDUSTRIAL FUND'S WORKING CAPITAL AND SUBSEQUENTLY BILLED TO THE CUSTOMER'S APPROPRIATIONS. THE COST CODE NUMBERS MENTIONED IN THE AWARD LETTER OF AUGUST 31 ARE INTERNAL CONTROL NUMBERS USED FOR ACCOUNTING PURPOSES TO DESIGNATE THAT PORTION OF THE CUSTOMER'S APPROPRIATION TO BE ALLOCATED TO SPECIFIC PROJECTS, AND IN THE PRESENT CASE REPRESENT AMOUNTS SET ASIDE FOR REPAIR OF THE CRANES DURING THE YEARS 1967, 1968, 1969 AND 1970, DURING WHICH TIME NO REPAIRS WERE MADE ON THE CRANES.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE ACTIONS OF THE CONTRACTING OFFICER IN CORRECTING THE BID OF CACCIAMANI WAS PROPER, AND YOUR PROTEST MUST BE DENIED.