B-181035, JUN 14, 1974

B-181035, JUN 14, 1974

WHERE BIDDER NOTIFIES PROCURING ACTIVITY OF POSSIBILITY OF ERROR IN ITS BID AFTER BID OPENING AND BEFORE IT IS AWARE OF OTHER BID PRICES AND THEN STATES AT A LATER DATE THAT THERE WAS NO ERROR, BUT BID WOULD NOT BE LOW IF CORRECTED AND AGENCY IS AWARE OF MISTAKE BY SUBCONTRACTOR, BID SHOULD BE DISREGARDED BECAUSE TO ALLOW BIDDER TO WAIVE SUSPECTED ERROR WOULD PREJUDICE OTHER BIDDERS.

TO JACK AUSTIN AND ASSOCIATES; CROWN CONSTRUCTION CO.:

INVITATION FOR BIDS NO. DACA21-74-B-0034 WAS ISSUED ON FEBRUARY 22, 1974 FOR THE MODERNIZATION OF BARRACKS AT FORT BENNING, GEORGIA, BY THE UNITED STATES ARMY CORPS OF ENGINEERS. EIGHT BIDS WERE OPENED AT 2:00 P.M. ON APRIL 4, 1974. JACK AUSTIN AND ASSOCIATES (AUSTIN) WAS THE LOW BIDDER ON BOTH THE BASE BID AND ALSO ON THE BASE BID PLUS ADDITIVES 1 AND 2 BY $260,685 AND $128,685, RESPECTIVELY. THE SECOND LOW BIDDER ON BOTH OF THE ABOVE PORTIONS OF THE SOLICITATION WAS CROWN CONSTRUCTION COMPANY (CROWN), WHO PRIOR TO BID OPENING INCREASED ITS BID BY $475,000, BY NOTING SUCH INCREASE ON THE OUTSIDE OF ITS BID ENVELOPE.

A PRICING ERROR WAS MADE BY TOMMY L. GRIFFIN PLUMBING AND HEATING COMPANY (GRIFFIN), SUBCONTRACTOR WHO GAVE QUOTES TO THE MAJORITY OF THE BIDDING PRIME CONTRACTORS FOR THE MECHANICAL PORTION OF THE CONTRACT. GRIFFIN HAD FAILED TO INCLUDE THE COST OF THE LABOR FOR THE HEATING PIPING IN ITS QUOTE. THIS ERROR WAS DISCOVERED JUST PRIOR TO BID OPENING ON APRIL 4, 1974, AT APPROXIMATELY 1:30 P.M. AT 1:45 P.M., GRIFFIN BEGAN CALLING THE PRIMES, INCLUDING AUSTIN AND CROWN, TO ADVISE THEM OF THE ERROR AND SUGGEST THAT GRIFFIN WOULD NOT BE ABLE TO HONOR ITS QUOTE UNLESS IT WAS RAISED BY $350,000.

AT 2:05 P.M., THE PRESIDENT OF AUSTIN CALLED THE ASSISTANT DISTRICT COUNSEL OF THE CORPS OF ENGINEERS AND STATED THAT HE HAD MADE A $450,000 MISTAKE IN HIS BID. THE CORPS REPRESENTATIVE ADVISED MR. AUSTIN TO SEND A TELEGRAM TO THE CONTRACTING OFFICER TO THIS EFFECT AND TO BE PREPARED TO DOCUMENT THE ERROR.

IT APPEARS FROM THE RECORD THAT DURING THE NEXT FEW DAYS, AUSTIN ATTEMPTED TO OBTAIN OTHER QUOTES FOR THE MECHANICAL WORK AND ALSO TO OBTAIN REDUCTIONS FROM OTHER SUBCONTRACTORS.

ON APRIL 9, 1974, AUSTIN SENT THE FOLLOWING LETTER TO THE DISTRICT ENGINEER REGARDING ITS BID:

"YOUR ATTENTION IS CALLED TO THE VERBAL NOTICE WHICH WE GAVE YOU LAST THURSDAY AT APPROXIMATELY 2:07 P.M. OF A MISTAKE IN OUR BID ON THE ABOVE REFERENCED JOB. WE HAVE, OVER THE WEEKEND AND UP UNTIL THE PRESENT MOMENT, BEEN REEVALUATING THIS JOB AND WE NOW WISH TO RECONFIRM OUR PRICE TO YOU FOR THE BASE BID AND ITEMS ADDITIVE ONE AND TWO IN THE TOTAL AMOUNT OF $4,970,225; AND WE ASK THAT AN AWARD BE MADE TO US IN THIS AMOUNT IF THE FUNDS ARE AVAILABLE."

ON APRIL 11, 1974, AUSTIN SENT THE FOLLOWING LETTER TO THE CONTRACTING OFFICER:

"REFERENCE IS MADE TO MY MAIL GRAM OF APRIL 9, 1974, CONCERNING THE ABOVE REFERENCED JOB, WHEREIN I INDICATED THAT YOU SHOULD DISREGARD MY ALLEGATION OF MISTAKE THAT HAD BEEN PREVIOUSLY MADE TO YOU ORALLY. IN THE PREPARATION OF THE ORIGINAL BID I DID CONSIDER THE MECHANICAL SUBCONTRACTOR TOMMY GRIFFIN'S QUOTE. HOWEVER, MY BID ON THE TOTAL JOB WAS BASED UPON MY OWN ESTIMATING AS STATED IN REFERENCED MAIL GRAM. FURTHER EVALUATION OF MY BID RESULTED IN MY CONCLUSION THAT MY BID WAS RESPONSIVE AND I AGAIN REQUEST AN AWARD OF THE TOTAL CONTRACT TO ME.

"ON THE FACE OF THE BID THE DIFFERENCE ON THE TOTAL BID IS NOT SUFFICIENT TO QUESTION MY DETERMINATION OF RESPONSIVENESS, AND I AGAIN REQUEST AWARD OF A CONTRACT FOR THE TOTAL JOB."

ON APRIL 17, 1974, THE ASSISTANT DISTRICT COUNSEL, IN AN AFFIDAVIT SUBMITTED TO OUR OFFICE RECOUNTING THE CONVERSATION BETWEEN HIM AND MR. AUSTIN, STATED MR. AUSTIN CALLED TO CLARIFY THE PROBLEMS SURROUNDING HIS BID. MR. AUSTIN STATED THAT HE USED GRIFFIN'S MECHANICAL QUOTE IN HIS BASE BID AND THAT 5 MINUTES PRIOR TO BID OPENING, GRIFFIN INFORMED HIM OF THE ERROR IN THE AMOUNT OF $284,000. HOWEVER, DUE TO THE SHORT TIME FRAME, AUSTIN, WHO HAD USED GRIFFIN'S QUOTE, MADE NO CHANGE IN HIS BID AS A RESULT OF THE INFORMATION FROM GRIFFIN. WHEN ASKED TO SUBMIT DOCUMENTATION TO SUPPORT HIS ERROR, MR. AUSTIN REFUSED. THE ASSISTANT DISTRICT COUNSEL ADVISED THE CONTRACTING OFFICER TO AWARD TO THE NEXT LOWEST BIDDER SINCE THE AUSTIN BID WOULD NOT REMAIN LOW IF THE ERROR ALLEGED WAS CORRECTED.

PROTESTS HAVE BEEN FILED WITH OUR OFFICE BY BOTH CROWN AND AUSTIN AGAINST AWARD OF THE CONTRACT TO ANY FIRM OTHER THAN THEMSELVES.

CROWN, IN ITS COUNSEL'S BRIEF SUBMITTED TO OUR OFFICE, STATES THAT UNDER THE ABOVE FACTS, AND APPLYING THE APPLICABLE REGULATIONS, AUSTIN MAY EITHER WITHDRAW ITS BID OR HAVE ITS BID CORRECTED UPON SUBMISSION OF PROOF OF ITS INTENDED BID, BUT MAY NOT BE ALLOWED TO WAIVE THE ERROR.

AUSTIN'S COUNSEL CONTENDS AUSTIN NEVER REQUESTED CORRECTION OR WITHDRAWAL, THAT THERE IS NO PROOF OF THE INTENDED BID PRICE AND THAT AUSTIN DID NOT MAKE AN ERROR ALTHOUGH AN ERROR WAS MADE BY A POSSIBLE SUBCONTRACTOR, AND THAT THEREFORE ITS BID SHOULD BE CONSIDERED FOR AWARD.

A REVIEW OF THE RECORD BEFORE OUR OFFICE SHOWS THAT AUSTIN CALLED THE ASSISTANT DISTRICT COUNSEL SHORTLY AFTER BID OPENING TO REPORT A $450,000 MISTAKE IN ITS BID CAUSED BY AN ERROR IN ITS SUBCONTRACTOR'S BID. WHILE AUSTIN DID NOT SPECIFICALLY ASK FOR CORRECTION OR WITHDRAWAL OF ITS BID, WE SEE NO OTHER PURPOSE FOR SUCH A TELEPHONE CALL. THEREFORE, WHETHER CORRECTION OR WITHDRAWAL WAS SPECIFICALLY REQUESTED IS IRRELEVANT.

AUSTIN'S INTENDED BID CANNOT BE ASCERTAINED. THE ERROR IN THE SUBCONTRACTOR QUOTE HAS BEEN VALUED AT VARIOUS TIMES AT $495,000; $450,000; $350,000 AND $284,000. HOWEVER, THE ADDITION OF EVEN THE LOWEST OF THESE FIGURES DISPLACES AUSTIN AS THE LOW BIDDER.

WE BELIEVE THE ABOVE FACTS, WHEN APPLIED TO SECTION 2-406 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND PRIOR DECISIONS OF OUR OFFICE REQUIRE THAT THE BID OF AUSTIN BE DISREGARDED IN THE AWARD PROCESS.

ASPR 2-406.3(E)(2) READS, IN PART, AS FOLLOWS:

"(2) WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS. ***"

EVEN IF AUSTIN NEVER ASKED FOR CORRECTION OR WITHDRAWAL OR "ALLEGED" AN ERROR IN ITS BID, WE BELIEVE THE INDICATIONS OF ERROR WERE SO CLEAR THAT THE CONTRACTING OFFICER HAD AMPLE BASIS TO CONCLUDE THAT ACCEPTANCE OF AUSTIN'S BID AS SUBMITTED WOULD BE UNFAIR. WHERE A BIDDER IS UNABLE TO ESTABLISH HIS INTENDED PRICE BUT IT IS DOUBTFUL THAT THE INTENDED BID WOULD REMAIN LOW, WAIVER OF THE MISTAKE AND AWARD ON THE BID AS SUBMITTED WOULD BE PREJUDICIAL TO OTHER BIDDERS. 42 COMP. GEN. 723 (1963).

THE OVERRIDING CONSIDERATION IN THIS TYPE OF CASE IS THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. WHERE A BIDDER, WHETHER INTENTIONALLY OR NOT, IS IN THE POSITION, AFTER THE OTHER BID PRICES HAVE BEEN REVEALED, OF WITHDRAWING ITS BID, ASKING FOR CORRECTION OR REQUESTING WAIVER OF AN ERROR, WHICHEVER IS IN THE BIDDER'S BEST INTEREST, CONSIDERATION OF THAT BID WOULD BE DETRIMENTAL TO THE FEDERAL PROCUREMENT SYSTEM. 51 COMP. GEN. 498 (1972).

ACCORDINGLY, THE BID OF AUSTIN SHOULD BE DISREGARDED.