B-173829, AUG 19, 1971

B-173829, AUG 19, 1971

BID PROTEST - MISTAKE IN BID DECISION ALLOWING CANCELLATION OF A CONTRACT LET TO PAYNE & SONS PAINTING COMPANY FOR THE PAINTING OF ALL WINDOWS, WOOD DOORS AND LOUVRES ON THE EXTERIOR OF BUILDING 1, VETERANS ADMINISTRATION HOSPITAL, INDIANAPOLIS, INDIANA. IT IS APPARENT FROM THE RECORD THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF AN ERROR IN THE BID OF PAYNE, AND SHOULD HAVE REQUESTED VERIFICATION PRIOR TO AWARD. THE CONTRACT MAY BE ADMINISTRATIVELY CANCELLED WITHOUT LIABILITY TO THE CONTRACTOR, AND AWARD MADE TO THE SECOND LOW BIDDER.

TO MR. JOHNSON:

REFERENCE IS MADE TO A LETTER DATED AUGUST 9, 1971, 134G, WITH ENCLOSURES, FROM THE SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING A DECISION WITH RESPECT TO AN APPARENT MISTAKE IN THE BID OF PAYNE & SONS PAINTING COMPANY, INDIANAPOLIS, INDIANA, SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 583-74-71, ISSUED MAY 27, 1971, BY THE VETERANS ADMINISTRATION HOSPITAL, INDIANAPOLIS, INDIANA, FOR THE PAINTING OF ALL WINDOWS, WOOD DOORS AND LOUVRES ON THE EXTERIOR OF BUILDING 1 OF THE HOSPITAL. THE ITEM DESCRIPTION OF THE WORK INCLUDED THE PARENTHETICAL PHRASE "APPROXIMATELY 1200 OPENINGS."

FIVE BIDS WERE RECEIVED AND OPENED, AS SCHEDULED, ON JUNE 24, 1971. THE LOWEST BID, IN THE AMOUNT OF $14,850, WAS SUBMITTED BY PAYNE AND SONS PAINTING COMPANY. THE OTHER FOUR BIDS WERE IN THE AMOUNTS OF $15,510, $27,547, $28,800 AND $32,000. THE GOVERNMENT'S ESTIMATE OF A REASONABLE CONTRACT PRICE FOR THE WORK INVOLVED WAS $24,394. THE LOW BIDDER, PAYNE & SONS PAINTING COMPANY, WAS NOTIFIED BY LETTER DATED JUNE 28, 1971, THAT IT HAD BEEN AWARDED CONTRACT NO. V583C-279. THE COMPANY ADVISED THE CONTRACTING OFFICER BY TELEPHONE ON JUNE 30, 1971, AND BY LETTER OF THE SAME DATE, THAT THE COMPANY HAD MADE A MISTAKE IN ITS BID. THE ALLEGED MISTAKE HAS REFERENCE TO THE INCLUSION OF THE PARENTHETICAL PHRASE "APPROXIMATELY 1200 OPENINGS" IN THE ITEM DESCRIPTION OF THE PAINTING WORK. THE COMPANY INDICATED THAT ITS BID WAS BASED UPON THE PAINTING OF 1,200 SINGLE WINDOWS, DOORS AND LOUVRES, BUT THAT THERE ARE APPROXIMATELY 1,880 WINDOWS, DOORS AND LOUVRES TO BE PAINTED. THE COMPANY OFFERED TO REVISE ITS BID TO $23,282.

THE CONTRACTING OFFICER REPORTED THAT, IN USING THE PHRASE "APPROXIMATELY 1200 OPENINGS," IT WAS INTENDED TO MEAN OPENINGS IN THE MASONRY OF THE BUILDING, REGARDLESS OF THE NUMBER OF WINDOWS, DOORS, LOUVRES, ETC.. THE CONTRACTING OFFICER RECOMMENDED THAT THE COMPANY BE PERMITTED TO WITHDRAW ITS BID AND THAT AWARD BE MADE TO THE NEXT LOWEST BIDDER, HARVEY GARRETT AND ASSOCIATES. THAT FIRM STATED IN A LETTER DATED JULY 26, 1971, THAT IT INCLUDED 2,235 OPENINGS WHEN IT BID ON THE PAINTING WORK, AND THAT IT WAS WILLING TO EXTEND THE PERIOD FOR ACCEPTANCE OF ITS BID FROM 30 TO 60 DAYS. THE CONTRACTING OFFICER HAS REPORTED THAT HARVEY GARRETT AND ASSOCIATES HAS TWO OTHER JOBS GOING AT THE HOSPITAL AND THAT THIS MAY ACCOUNT FOR ITS BID OF $15,510 ON THE PAINTING REQUIRED ON BUILDING 1, AS COMPARED WITH THE GOVERNMENT'S $24,394 ESTIMATE OF A REASONABLE PRICE AND THE BIDS IN THE AMOUNTS OF $27,547, $28,800 AND $32,000. THE BID OF PAYNE & SONS PAINTING COMPANY WAS OUT OF LINE WITH THOSE LATTER AMOUNTS AND, AS SUGGESTED IN THE LETTER OF AUGUST 9, 1971, IT WOULD APPEAR THAT THE CONTRACTING OFFICER WAS OR SHOULD HAVE BEEN ON NOTICE AS TO THE PROBABILITY OF MISTAKE IN THE BID OF PAYNE & SONS PAINTING COMPANY, AND THAT HE SHOULD HAVE REQUESTED VERIFICATION OF THE $14,850 LOW BID BEFORE AWARD. SEE CHERNICK V UNITED STATES, 372 F. 2D 492, 496 (1967), 178 CT. CL. 498, 504, IN WHICH THE COURT OF CLAIMS STATED:

" *** THE TEST OF WHAT AN OFFICIAL IN CHARGE OF ACCEPTING BIDS 'SHOULD' HAVE KNOWN MUST BE THAT OF REASONABLENESS, I.E., WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THERE WERE ANY FACTORS WHICH REASONABLY SHOULD HAVE RAISED THE PRESUMPTION OF ERROR IN THE MIND OF THE CONTRACTING OFFICER; AMONG SUCH FACTORS ARE OBVIOUS WIDE RANGE OF BIDS, AND GROSS DISPARITY BETWEEN THE PRICE BID AND THE VALUE OF THE ARTICLE WHICH WAS THE SUBJECT OF THE BID. *** "

ACCORDINGLY, AND SINCE IT IS REPORTED THAT PAYNE & SONS PAINTING COMPANY HAS NOT PERFORMED ANY WORK UNDER CONTRACT NO. V583C-279, WE WILL NOT OBJECT TO THE ADMINISTRATIVELY PROPOSED CANCELLATION OF THE CONTRACT WITHOUT LIABILITY TO THE CONTRACTOR, AND THE MAKING OF AN AWARD TO THE SECOND LOWEST BIDDER, HARVEY GARRETT AND ASSOCIATES.

AS REQUESTED, THE ADMINISTRATIVE FILE OF THE CASE IS RETURNED.