B-173823, SEP 2, 1971

B-173823, SEP 2, 1971

BID PROTEST - MISTAKE IN BID - CORRECTION ADVISING THAT THE BID OF CHANEY & HOPE, INC., MADE IN RESPONSE TO AN IFB ISSUED BY THE ARMY CORPS OF ENGINEERS, VICKSBURG, MISSISSIPPI, FOR CONSTRUCTION OF RECREATION FACILITIES, MAY BE CORRECTED TO REFLECT THE INTENDED PRICE FOR AN OMITTED ITEM AND MAY BE CONSIDERED FOR AWARD. THE BID OF CHANEY & HOPE WHILE OMITTING THE PRICE FOR ITEM 62, ELECTRIC WORK, FOR THE IRON MOUNTAIN SITE, STATED A TOTAL FOR THE SITE EXCEEDING THE SUM OF THE OTHER PRICED ITEMS BY $88,800, AN AMOUNT CORROBORATED BY SUMMARY SHEETS CONTAINING UNIT PRICES AND ESTIMATED QUANTITIES. THUS, THE BID MAY BE CORRECTED TO REFLECT THE DIFFERENCE; THE RECORD IS SUFFICIENT TO ESTABLISH BOTH THE MISTAKE AND THE INTENDED BID.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER, ENGGC-C, DATED AUGUST 9, 1971, FROM THE GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, CONCERNING INVITATION FOR BIDS NO. DACW38-71-B-0106 (IFB - 0106), ISSUED BY THE CORPS OF ENGINEERS, VICKSBURG, MISSISSIPPI, IN RESPONSE TO WHICH THE APPARENT LOW BID WAS SUBMITTED BY CHANEY & HOPE, INC. THE ABOVE REFERENCED LETTER REQUESTS THIS OFFICE TO DECIDE WHETHER THE BID OF CHANEY & HOPE IS RESPONSIVE TO IFB - 0106 AND WHETHER A CLAIM OF MISTAKE IN THAT BID MAY BE ALLOWED, WHICH WOULD PERMIT AWARD TO CHANEY & HOPE AT THE TOTAL PRICE BID.

THE IFB CONTAINED THE FOLLOWING DESCRIPTION OF WORK:

"THE WORK CONSISTS OF FURNISHING ALL PLANT, LABOR, MATERIAL AND EQUIPMENT AND CONSTRUCTING THE RECREATION FACILITIES AT DEGRAY LAKE."

THE BID FORM PROVIDED:

"IN COMPLIANCE WITH THE ABOVE-DATED INVITATION FOR BIDS, THE UNDERSIGNED HEREBY PROPOSES TO PERFORM ALL WORK FOR RECREATION FACILITIES AT 7 SITES AT DEGRAY LAKE, ARKANSAS IN STRICT ACCORDANCE WITH THE GENERAL PROVISIONS (STANDARD FORM 23-A), LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS IN EXCESS OF $2,000 (STANDARD FORM 19-A), SPECIFICATIONS, SCHEDULES, DRAWINGS, AND CONDITIONS, FOR THE AMOUNTS LISTED IN THE ATTACHED BIDDING SCHEDULE."

THE BIDDING SCHEDULE DIVIDED THE WORK INTO SEVEN SITES, UNDER EACH OF WHICH APPEARED 63 ITEMS, WITH SPACES FOR THE INSERTION OF LUMP SUM OR UNIT AND EXTENDED TOTAL PRICES. THE 63 ITEMS WERE UNIFORMLY DESCRIBED FOR EACH SITE, ALTHOUGH NOT ALL ITEMS WERE APPLICABLE TO EACH SITE AND THE ESTIMATED QUANTITIES OF CERTAIN ITEMS VARIED WITH EACH SITE. A "SITE SUBTOTAL" WAS TO BE ENTERED AT THE FOOT OF EACH PAGE OF THE BIDDING SCHEDULE, AND A SPACE WAS PROVIDED AT THE END OF EACH SITE FOR THE SITE TOTAL. THE BIDDING SCHEDULE CONCLUDED WITH A SPACE FOR THE ENTRY OF "JOB TOTAL (SEVEN (7) SITES)". THERE WERE NO ALTERNATE OR OPTIONAL ITEMS, AND PARAGRAPH 6 ON PAGE 3 OF THE INVITATION ADVISED BIDDERS:

"AWARD OF THE WORK WILL BE MADE AS A WHOLE TO ONE BIDDER."

THE FOLLOWING BIDS FOR "JOB TOTAL (SEVEN (7) SITES)" WERE RECORDED AT THE BID OPENING ON JUNE 23, 1971:

CHANEY & HOPE, INC. $2,546,136.00

NURRIE CONSTRUCTION CO. 2,614,432.20

DIXIE BUILDERS, INC. 2,687,784.29

BECKMAN CONSTRUCTION CO. 2,739,933.00

A. G. PROCTOR COMPANY, INC. 3,062,224.50

ALL BIDS RECEIVED WERE MORE THAN 25 PERCENT IN EXCESS OF THE GOVERNMENT ESTIMATE OF $2,020,568.79, AND THUS WERE INELIGIBLE FOR AWARD UNDER 33 U.S.C. 624, AS IMPLEMENTED BY ENGINEER CONTRACT INSTRUCTIONS 1-372(F)-(G) AND 2-407.8(B). A REPRESENTATIVE OF CHANEY & HOPE INDICATED THAT FIRM WOULD PROTEST THE REASONABLENESS OF THE GOVERNMENT ESTIMATE.

DURING THE SUBSEQUENT CHECK OF THE BIDS BY PERSONNEL OF THE PROCURING ACTIVITY, IT WAS DISCOVERED THAT CHANEY & HOPE HAD FAILED TO INSERT A PRICE FOR ITEM 62, ELECTRICAL WORK, FOR THE IRON MOUNTAIN SITE, AND THAT THE COMPANY'S "IRON MOUNTAIN SITE TOTAL" OF $501,534.00 EXCEEDED BY $88,800 THE TOTAL OF THE OTHER PRICED ITEMS FOR THAT SITE. UPON BEING ADVISED OF THE PRICE OMISSION, CHANEY & HOPE FURNISHED DOCUMENTATION IN SUPPORT OF ITS CONTENTION THAT IT HAD INTENDED TO BID $88,800 ON ITEM 62, WHICH AMOUNT HAD INADVERTENTLY NOT BEEN TRANSPOSED TO ITS BID. THUS, CHANEY & HOPE MAINTAINED THAT ITS BID PRICE OF $2,256,136 FOR THE ENTIRE JOB WAS CORRECT. ADDITIONALLY, NURRIE CONSTRUCTION COMPANY (NURRIE) HAS PROTESTED TO THE PROCURING ACTIVITY AGAINST THE REASONABLENESS OF THE GOVERNMENT ESTIMATE, AND BOTH NURRIE AND BECKMAN CONSTRUCTION COMPANY HAVE PROTESTED AGAINST AWARD TO CHANEY & HOPE.

THE INITIAL ISSUE BEFORE OUR OFFICE IS WHETHER THE CHANEY & HOPE BID IS RESPONSIVE TO THE INVITATION. SINCE TO PERMIT A BIDDER TO MAKE HIS BID RESPONSIVE BY ALTERATION WOULD BE TANTAMOUNT TO PERMITTING THE SUBMISSION OF A NEW OFFER, IT HAS BEEN THE POSITION OF THIS OFFICE THAT AN ALLEGATION OF ERROR IS PROPER FOR CONSIDERATION ONLY WHEN THE BID IS RESPONSIVE TO THE INVITATION AND IS OTHERWISE PROPER FOR ACCEPTANCE. 40 COMP. GEN. 432, 435 (1961). IN THIS REGARD, PARAGRAPH 5(B) OF THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22) PROVIDES IN PERTINENT PART THAT "WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID." SINCE THERE IS NOTHING IN THE BID FORM WHICH EXPLICITLY REQUIRED BIDDERS TO QUOTE PRICES ON ALL ITEMS, THE BID OF CHANEY & HOPE WOULD NOT AUTOMATICALLY BE DISQUALIFIED UNDER PARAGRAPH 5(B) OF STANDARD FORM 22.

PARAGRAPH 10(C) OF STANDARD FORM 22 FURTHER STATES:

"(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED BY THE INVITATION FOR BIDS OR THE BIDDER INCLUDES IN HIS BID A RESTRICTIVE LIMITATION."

THE IFB ALSO INCLUDED ADDITIONAL INSTRUCTIONS TO BE READ IN CONJUNCTION WITH THE STANDARD FORM 22 INSTRUCTIONS. AMONG THE ADDITIONAL INSTRUCTIONS WAS THE FOLLOWING PROVISION:

"8. GOVERNMENT'S PRIVILEGE IN MAKING AWARDS.

THE GOVERNMENT FURTHER RESERVES THE RIGHT TO MAKE AWARD ON ANY OR ALL SCHEDULES OF ANY BID, UNLESS THE BIDDER QUALIFIES SUCH BID BY SPECIFIC LIMITATION; ALSO TO MAKE AWARD TO THE BIDDER WHOSE AGGREGATE BID ON ANY COMBINATION OF BID SCHEDULES IS LOW. FOR THE PURPOSE OF THIS INVITATION FOR BIDS, THE WORD 'ITEM', AS USED IN PARAGRAPH 10(C) OF STANDARD FORM 22, SHALL BE CONSIDERED TO MEAN 'SCHEDULE.'

OUR OFFICE HAS CONSTRUED PARAGRAPH 8 AS MODIFYING PARAGRAPH 10(C) SO AS TO PRECLUDE AWARD ON LESS THAN A SCHEDULE BY SCHEDULE BASIS, AND WHERE ONLY ONE SCHEDULE WAS INCLUDED IN THE INVITATION ONLY ONE AWARD, AT THE TOTAL SCHEDULE BID PRICE, COULD BE MADE. B-170238, NOVEMBER 16, 1970. THE CLEAR IMPORT OF THE DESCRIPTION OF WORK, THE BIDDING SCHEDULE, PARAGRAPH 10(C) OF STANDARD FORM 22 (AS MODIFIED) AND PARAGRAPHS 6 AND 8 ON PAGE 3 OF THE INVITATION IS THAT THE WORK WILL BE AWARDED AS A WHOLE TO ONE BIDDER, AND THERE IS NO POSSIBILITY OF AWARD FOR LESS THAN ALL ITEMS.

IN OUR DECISION B-166603, MAY 16, 1969, WHICH INVOLVED A SITUATION SIMILAR TO THE INSTANT CASE, WE STATED THAT THE APPARENT LOW BID SHOULD BE REJECTED FOR THE FAILURE TO BID UPON AN ITEM ONLY IF THE BIDDER'S LEGAL OBLIGATION TO FURNISH THE WORK DESCRIBED IN THAT ITEM AS PART OF ITS TOTAL PRICE WAS AMBIGUOUS. AS IN THAT CASE, THERE APPEAR TO BE ONLY TWO POSSIBLE EXPLANATIONS FOR THE OMISSION OF THE PRICE OF AN ITEM IN THE INSTANT CASE: (1) CHANEY & HOPE DID NOT INTEND TO PERFORM THE WORK DESCRIBED IN ITEM 62 OF THE IRON MOUNTAIN SITE, AND THE EXCESSIVE AGGREGATE PRICE RESULTED FROM AN ERROR IN ADDING THE OTHER ITEM PRICES LISTED IN THE BID; OR (2) CHANEY & HOPE INTENDED TO PERFORM THE WORK DESCRIBED IN ITEM 62 OF THE IRON MOUNTAIN SITE AS PART OF ITS TOTAL PRICE AND THE DIFFERENCE BETWEEN THE TOTAL PRICE LISTED AND THE SUM OF THE OTHER ITEM PRICES REPRESENTED THE AMOUNT THE COMPANY INTENDED TO INSERT FOR ITEM 62.

THE FIRST POSSIBLE EXPLANATION IS NOT CONSIDERED TO BE A REASONABLE ONE IN VIEW OF THE EXPLICIT ADVICE IN THE INVITATION THAT A SINGLE AWARD WOULD BE MADE FOR THE ENTIRE PROJECT, AND A BID OFFERING ANYTHING LESS THAN ALL ITEMS THEREFORE COULD NOT BE ACCEPTED. THIS RESTRICTION APPEARS TO HAVE BEEN RECOGNIZED BY CHANEY & HOPE, WHICH STATED IN ITS BID IMMEDIATELY BELOW ITS PRICE OF $2,546,136 FOR "JOB TOTAL (SEVEN (7) SITES)": "THIS BID IS BASED ON AWARD OF ALL ITEMS." WE THEREFORE MUST CONCLUDE THAT UPON THE ACCEPTANCE OF ITS BID, CHANEY & HOPE WOULD BE LEGALLY OBLIGATED TO PERFORM THE WORK ENCOMPASSED BY ALL ITEMS, INCLUDING ITEM 62 OF THE IRON MOUNTAIN SITE, AND THAT THE PROCURING ACTIVITY WOULD BE JUSTIFIED IN CONSIDERING THE CHANEY & HOPE BID TO BE RESPONSIVE AND ELIGIBLE FOR THE AWARD.

THE REMAINING ISSUE IS WHETHER THE CHANEY & HOPE CLAIM OF A MISTAKE IN BID MAY BE ALLOWED. IN THIS REGARD, ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3 PROVIDES:

"(A) THE DEPARTMENTS ARE AUTHORIZED TO MAKE THE FOLLOWING ADMINISTRATIVE DETERMINATIONS IN CONNECTION WITH MISTAKES IN BIDS, OTHER THAN APPARENT CLERICAL MISTAKES, ALLEGED AFTER OPENING OF BIDS AND PRIOR TO AWARD."

"(3) WHERE THE BIDDER REQUESTS PERMISSION TO CORRECT A MISTAKE IN HIS BID AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, A DETERMINATION PERMITTING THE BIDDER TO CORRECT THE MISTAKE MAY BE MADE *** ."

THE DOCUMENTATION FURNISHED THE PROCURING ACTIVITY BY CHANEY & HOPE INCLUDED A REVISED QUOTATION DATED JUNE 22, 1971, FROM ITS ELECTRICAL SUBCONTRACTOR. THE AMOUNT OF THE QUOTATION FOR ITEM 62, IRON MOUNTAIN SITE, WAS INCREASED BY AN AMOUNT SUFFICIENT TO COVER THE COST OF BONDING THE SUBCONTRACT PROPOSAL. THE SUM OF THESE FIGURES WAS THEN TRANSPOSED TO A COLUMNAR SUMMARY SHEET UPON WHICH WAS ENTERED, FOR EACH ITEM OF THE BID, ESTIMATED QUANTITIES, UNIT AND EXTENDED PRICES, LABOR, MATERIAL AND SUBCONTRACT COSTS. ITEM 62, IRON MOUNTAIN SITE, IN THE SAME MANNER AS ALL OTHER ITEMS, WAS THEN MULTIPLIED BY A FACTOR REPRESENTING CHANEY & HOPE'S OVERHEAD AND PROFIT. THE PRODUCT OF THIS MULTIPLICATION WAS $88,800, PRECISELY THE DIFFERENCE BETWEEN THE TOTAL OF THE ITEMS FOR WHICH AMOUNTS WERE LISTED UNDER THE IRON MOUNTAIN SITE ($412,734) AND THE "IRON MOUNTAIN SITE TOTAL" OF $501,534 BID BY CHANEY & HOPE. IN VIEW THEREOF, THE PROCURING ACTIVITY CONCLUDED THAT CLEAR AND CONVINCING EVIDENCE EXISTED AS TO THE MISTAKE AND THE PRICE ACTUALLY INTENDED TO BE OFFERED FOR ITEM 62 OF THE IRON MOUNTAIN SITE.

WE AGREE WITH THE AGENCY'S CONCLUSION AS TO THE SUFFICIENCY OF THE EVIDENCE OF RECORD TO ESTABLISH BOTH THE MISTAKE AND THAT CHANEY & HOPE INTENDED TO BID $88,800 FOR THE OMITTED ITEM. ACCORDINGLY, THE BID MAY BE CORRECTED TO REFLECT $88,800 FOR ITEM 62, AND SINCE THE COMPANY'S TOTAL BID OF $2,546,136 WAS THE LOWEST RECEIVED, IT MAY BE CONSIDERED FOR AWARD IF OTHERWISE PROPER.

THE ENCLOSURES TO THE LETTER OF AUGUST 9 ARE RETURNED.