B-180293, APR 26, 1974

B-180293, APR 26, 1974

WHERE IT IS DISCOVERED AFTER AWARD THAT CORRECTED BID TOTAL OF ANOTHER BIDDER BASED ON UNIT PRICES IS LOWER THAN THAT OF SUCCESSFUL BIDDER, AWARD WHICH WAS MADE AND ACCEPTED IN GOOD FAITH IS NOT "PLAINLY AND PALPABLY ILLEGAL" AND THEREFORE IS NOT A NULLITY. FURTHERMORE, A TERMINATION FOR CONVENIENCE IS NOT RECOMMENDED SINCE BIDDER'S ERROR IN COMPUTING BID TOTAL AND HIS FAILURE TO BRING ERROR TO ATTENTION OF CONTRACTING OFFICER PRIOR TO AWARD CONTRIBUTED TO ERRONEOUS EVALUATION.

TO R. A. JONES COMPANY:

THIS MATTER IS BEFORE OUR OFFICE PURSUANT TO A PROTEST BY R. A. JONES COMPANY (JONES), RELATIVE TO THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER AN INVITATION FOR BIDS ISSUED BY THE DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY (DCRLA) FOR SITE IMPROVEMENTS AT THE SHAW SCHOOL URBAN RENEWAL AREA, WASHINGTON, D.C.

THE SCHEDULE OF PRICES, PAGES I-11(A) TO I-11(E), OF THE IFB PROVIDED ITEM DESCRIPTIONS, IDENTIFICATION NUMBERS, AND APPROXIMATE QUANTITIES FOR THE SITE CLEARANCE WORK UNDER THE CONTRACT. SPACES WERE PROVIDED FOR THE BIDDERS TO INSERT A UNIT PRICE FOR EACH OF THE ITEMS AND AN EXTENDED PRICE FOR EACH ITEM REFERRED TO AS THE "AMOUNT." AT THE BOTTOM OF EACH PAGE A SPACE WAS PROVIDED FOR THE BIDDER TO ENTER THE AMOUNT CARRIED FORWARD TO THE NEXT PAGE. AT THE END OF THE SCHEDULE A SPACE WAS PROVIDED FOR THE BIDDER TO ENTER THE "TOTAL BID AMOUNT." THE FOLLOWING PROVISION (PARAGRAPH 3(A)) APPEARED ON PAGE I-11, WHICH IMMEDIATELY PRECEDED THE "SCHEDULE OF PRICES":

"(A) THE TOTAL AMOUNT OF THE BID BASED ON THE ESTIMATED QUANTITIES IN THE FOLLOWING SCHEDULE OF PRICES AS COMPUTED BY THE UNDERSIGNED BIDDER IS DOLLARS AND CENTS, ($ )."

BIDS WERE OPENED ON OCTOBER 11, 1973, AND 5 BIDS WERE RECEIVED. THE LOW BID FROM ASPHALT CONSTRUCTION COMPANY, INCORPORATED, WAS REJECTED SINCE THE BID BOND WAS DEFICIENT. DCRLA MADE AWARD TO ROUBIN & JANEIRO, INCORPORATED (R&J), ON NOVEMBER 7, 1973, SINCE ITS BID OF $116,618.75 WAS DETERMINED TO BE THE LOW BID. THE FIGURE INSERTED BY JONES AS THE TOTAL AMOUNT BID IN THE SPACES PROVIDED AT THE END OF THE SCHEDULE OF PRICES AND IN PARAGRAPH 3(A) WAS $125,102.50.

JONES' PROTEST TO OUR OFFICE AND TO DCRLA IS DATED DECEMBER 14, 1973, AND OUR OFFICE RECEIVED JONES' PROTEST ON THAT DATE. A LETTER FROM JONES' COUNSEL STATES THAT THE REASON FOR THE DELAY IN PROTESTING IS THAT DCRLA DID NOT SEND THE BID TABULATION TO JONES UNTIL DECEMBER 12, 1973, EVEN THOUGH REQUESTED BY JONES ON OCTOBER 17, 1973. THE FILE INDICATES THAT DCRLA ADVISED JONES OF THE AWARD TO R&J BY LETTER DATED DECEMBER 3, 1973, AND THAT JONES' BID BOND AND BID DEPOSIT WERE RETURNED WITH THAT LETTER.

THE DCRLA'S REPORT STATES THAT JONES' REPRESENTATIVE CONTACTED DCRLA ON DECEMBER 14, 1973, TO ADVISE THAT THE TOTAL BID AMOUNT IN JONES' BID DID NOT CORRESPOND TO THE TOTAL OF THE UNIT PRICES QUOTED IN THE BID; THAT THE CORRECT TOTAL BID WAS $115,102.50; AND THAT JONES WAS ENTITLED TO THE CONTRACT AS THE LOW BIDDER. THE DCRLA HAS CONFIRMED THAT THE TOTAL OF THE PRODUCTS OBTAINED BY MULTIPLYING THE UNIT PRICES IN JONES' BID BY THE ESTIMATED QUANTITY IS $115,102.50, AND WE ARE ADVISED THAT THE ENGINEERING DIVISION OF DCRLA APPARENTLY FAILED TO NOTICE THE ERROR IN THE ADDITION OF JONES' EXTENDED PRICES AT THE TIME OF EVALUATING THE BID. THE DCRLA PROPOSES TO CANCEL THE CONTRACT AWARDED TO R&J AND MAKE THE AWARD TO JONES. IN THIS REGARD, THE DCRLA IS OF THE VIEW THAT THE CONTRACT AWARDED TO R&J WAS A NULLITY AND DID NOT CONFER ANY RIGHTS ON THAT FIRM SINCE THE AWARD TO OTHER THAN THE LOW BIDDER WAS NOT IN ACCORDANCE WITH STATUTORY REQUIREMENTS. DCRLA RELIES PRINCIPALLY ON B 165186, NOVEMBER 7, 1968, AS PRECEDENT FOR THIS VIEW.

WE HAVE RECENTLY CONSIDERED THE STATUS OF A CONTRACT WHERE IT WAS AWARDED TO OTHER THAN THE LOW BIDDER BECAUSE OF THE APPLICATION OF ERRONEOUS FREIGHT RATES. SEE 52 COMP. GEN. 215 (1972), WHEREIN IT IS STATED AS FOLLOWS:

"*** WE ARE IN AGREEMENT WITH THE POSITION OF THE COURT OF CLAIMS THAT 'THE BINDING STAMP OF NULLITY' SHOULD BE IMPOSED ONLY WHEN THE ILLEGALITY OF AN AWARD IS 'PLAIN,' JOHN REINER & CO. V. UNITED STATES, 325 F.2D 438, 440 (163 CT. CL. 381) OR 'PALPABLE,' WARREN BROTHERS ROADS CO. V. UNITED STATES, 355 F.2D 612, 615 (173 CT. CL. 714). IN DETERMINING WHETHER AN AWARD IS PLAINLY OR PALPABLY ILLEGAL, WE BELIEVE THAT IF THE AWARD WAS MADE CONTRARY TO STATUTORY OR REGULATORY REQUIREMENTS BECAUSE OF SOME ACTION OR STATEMENT BY THE CONTRACTOR (PRESTEX, INC. V. UNITED STATES, 320 F.2D 367 (162 CT. CL. 620), OR IF THE CONTRACTOR WAS ON DIRECT NOTICE THAT THE PROCEDURES BEING FOLLOWED WERE VIOLATIVE OF SUCH REQUIREMENTS (SCHOENBROD V. UNITED STATES, 410 F.2D 400 (187 CT. CL. 627), THEN THE AWARD MAY BE CANCELED WITHOUT LIABILITY TO THE GOVERNMENT EXCEPT TO THE EXTENT RECOVERY MAY BE HAD ON THE BASIS OF QUANTUM MERUIT. ON THE OTHER HAND, IF THE CONTRACTOR DID NOT CONTRIBUTE TO THE MISTAKE RESULTING IN THE AWARD AND WAS NOT ON DIRECT NOTICE BEFORE AWARD THAT THE PROCEDURES BEING FOLLOWED WERE WRONG, THE AWARD SHOULD NOT BE CONSIDERED PLAINLY OR PALPABLY ILLEGAL, AND THE CONTRACT MAY ONLY BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. JOHN REINER & CO. V. UNITED STATES, SUPRA; BROWN & SON ELECTRIC CO. V. UNITED STATES, 325 F.2D 446 (163 CT. CL. 465)."

WE BELIEVE THAT THE CASE PRESENTED HERE, WHERE AN AWARD WAS MADE AND ACCEPTED IN GOOD FAITH, WOULD NOT BE THE TYPE OF CASE WHERE A COURT WOULD CONCLUDE THAT THE AWARD WAS "PLAINLY OR PALPABLY ILLEGAL." THEREFORE, WE DO NOT AGREE THAT THE CONRACT AWARDED TO R&J MAY BE CONSIDERED A NULLITY. THE CASE CITED BY DCRLA, B-165186, SUPRA, AS PRECEDENT FOR THE VIEW THAT R&J'S CONTRACT WAS A NULLITY IS WITHIN THE CATEGORY OF CASES OVERRULED BY 52 COMP. GEN. 215, SUPRA.

WE RECOGNIZE THAT IF THE MISTAKE IN JONES' BID HAD BEEN DISCOVERED PRIOR TO AWARD, BID CORRECTION COULD HAVE BEEN ALLOWED UNDER FEDERAL PROCUREMENT REGULATIONS 1-2.406. BUT THE MISTAKE WAS NOT BROUGHT TO THE CONTRACTING OFFICER'S ATTENTION UNTIL MORE THAN ONE MONTH AFTER AWARD WAS MADE TO ANOTHER BIDDER.

IN THIS CONNECTION JONES HAS EXPLAINED THAT ALTHOUGH IT REQUESTED THE BID TABULATION FROM THE CONTRACTING AGENCY ON OCTOBER 17, THE TABULATION WAS NOT FURNISHED UNTIL DECEMBER 12, AT WHICH TIME THE ERROR WAS DISCOVERED. HOWEVER, WE DO NOT UNDERSTAND WHY IT WAS NECESSARY FOR JONES TO EXAMINE THE BID TABULATION IN ORDER TO DISCOVER THE ERROR IN BID. THE TABULATION MERELY CONTAINED A LISTING OF THE UNIT PRICES ALREADY CONTAINED IN THE BID PREPARED AND SUBMITTED BY JONES. IT SEEMS TO US THAT THE BIDDER HAD A REASONABLE OPPORTUNITY BETWEEN THE OCTOBER 11 BID OPENING AND NOVEMBER 7 AWARD DATE TO DISCOVER AN ERROR IN ITS BID EVEN THOUGH THE AGENCY DID NOT PROVIDE THE BIDDER WITH A BID TABULATION DURING THIS PERIOD.

IN SOME CASES INVOLVING AWARD TO OTHER THAN THE LOW ELIGIBLE BIDDER, WE HAVE RECOMMENDED TERMINATION FOR CONVENIENCE OF THE CONTRACT AND AWARD TO THE ACTUAL LOW BIDDER EVEN WHERE SUCH ACTION WOULD RESULT IN INCREASED COSTS TO THE GOVERNMENT. 52 COMP. GEN. 215, SUPRA. THESE RECOMMENDATIONS WERE REGARDED AS APPROPRIATE IN ORDER TO PRESERVE THE INTEGRITY OF THE PROCUREMENT SYSTEM. HOWEVER, OUR ANALYSIS OF SUCH CASES INDICATES THAT KIND OF RECOMMENDATION HAS BEEN MADE ONLY WHERE THE ACTUAL LOW BIDDER DID NOTHING TO CONTRIBUTE TO THE ERRONEOUS EVALUATION. HERE, THE EVALUATION APPEARS TO HAVE BEEN INFLUENCED TO A SIGNIFICANT EXTENT BY THE ERROR IN PREPARATION OF THE JONES BID AND THE BIDDER'S FAILURE TO ASSERT THE ERROR PRIOR TO AWARD. IN THE CIRCUMSTANCES, WE DO NOT BELIEVE THE INTEGRITY OF THE SYSTEM REQUIRES THAT THE AWARD BE DISTURBED.