Matter of: Trataros Construction, Inc. File: B-250384.3 Date: February 2, 1993
B-250384.3: Feb 2, 1993
PROCUREMENT Sealed Bidding Low bids Error correction Price adjustments Propriety Protest that agency improperly permitted low bidder to correct a mistake in its bid is denied where agency reasonably found that there was clear and convincing evidence of the mistake (transposing subcontractor quote to work paper) and the intended bid. The bid is low with or without correction. The first bid item No. 1(a) was for the actual renovation work. Bid opening was scheduled for September 10. Because this bid was significantly lower than the next low bid of $6. 000 was to be included in our bid. " that he made a "clerical mistake" when the electrical quote "was transposed" in the amount of $112. The contracting officer notified Volmar that the evidence submitted by the firm "reasonably supports the existence of a mistake but is not clear and convincing as to the intended bid.
Matter of: Trataros Construction, Inc. File: B-250384.3 Date: February 2, 1993
PROCUREMENT Sealed Bidding Low bids Error correction Price adjustments Propriety Protest that agency improperly permitted low bidder to correct a mistake in its bid is denied where agency reasonably found that there was clear and convincing evidence of the mistake (transposing subcontractor quote to work paper) and the intended bid, and the bid is low with or without correction.
DECISION Trataros Construction, Inc. protests the award of a contract to Volmar Construction, Inc. under invitation for bids (IFB) No. DTCG47-92-B- 3EFK42, issued by the United States Coast Guard for the renovation of an existing building into a health care facility at Governors Island, New York. Trataros asserts that the Coast Guard improperly permitted Volmar to correct a mistake in its low bid.
We deny the protest.
The IFB required bidders to submit prices for four line items and a total. The first bid item No. 1(a) was for the actual renovation work, while bid items 1(b), 1(c) and 1(d) pertained to the removal and demolition of existing underground storage tanks. Bid opening was scheduled for September 10, 1992. Volmar submitted the low bid at a total price of $4,860,000. Because this bid was significantly lower than the next low bid of $6,798,600, submitted by the protester, as well as the government estimate, the contracting officer requested that Volmar review and verify its price. By letter dated September 14, Volmar advised the agency that an error had been made in tabulating the subcontractor's prices in its bid for line item 1(a). Specifically, Volmar stated that its bid had been mistakenly computed because the individual making the final bid calculations incorrectly wrote down a price of $112,000 for the electrical work when, in fact, Volmar's electrical subcontractor had quoted $1,120,000 for the work.
To support the request for correction, Volmar submitted the following information to the contracting officer: (1) a quote dated September 9 for the "U.S. Coast Guard Gov's Island Building 550" from an electrical contractor for $1,120,000; (2) Volmar's worksheets for the project which included an entry for "Electrical" of $1,120,000; (3) a handwritten summary work paper showing separate dollar amounts for the general construction and mechanical portions of the project, $112,000 for the electrical portion of the project, and a 16-percent markup, for a total price of $4,860,000; and (4) a sworn statement from Volmar's vice president which explained that "the electrical quote of $1,120,000 was to be included in our bid," that he made a "clerical mistake" when the electrical quote "was transposed" in the amount of $112,000, and that he telephoned the mistaken bid price to a Volmar representative "who filled in the bid form."
By letter dated September 16, the contracting officer notified Volmar that the evidence submitted by the firm "reasonably supports the existence of a mistake but is not clear and convincing as to the intended bid," and requested additional supporting documentation. In response, Volmar explained that the handwritten work paper provided to the agency showed that "the awardee intended to mark up the general construction, mechanical, and electrical work with a 16-percent markup." Volmar's intended bid could therefore be clearly computed by correcting the electrical quote to $1,120,000 and adding the 16-percent markup.
Based on the information provided, the Coast Guard was satisfied that Volmar had submitted clear and convincing evidence of its intended bid. The agency noted that "the figure of $1,120,000 (for the electrical work) compares favorably with the Government Estimate for this item of $1,041,480." The agency found that the mistake increased Volmar's price to $6,029,680. Accordingly, on September 28, the head of the contracting activity determined that Volmar be allowed to correct its bid.
Trataros argues principally that the agency took a "lackadaisical approach" and did not critically and thoroughly review the materials submitted by Volmar in making the decision to allow the firm to correct its mistake. It points out that the record does not clearly explain how the figures entered in Volmar's bid correspond with the handwritten work paper, which showed a breakdown of the work into the three project categories (general construction, mechanical, and electrical) and contained the claimed mistake.
An agency may allow upward correction of a low bid before award if there is clear and convincing evidence establishing both the existence of the mistake and the intended bid. Federal Acquisition Regulation Sec. 14.406- 3. Since the procuring agency has the authority to correct such mistakes, and because the weight to be given to the evidence in support of an asserted mistake is a question of fact, we will not disturb an agency's determination unless there is no reasonable basis for it. Ogden Allied Eastern States Maintenance, B-239550, Aug. 28, 1990, 90-2 CPD Para. 166. Workpapers may constitute clear and convincing evidence if they show the existence of a mistake and the intended bid, are in good order, and are not contradicted by other evidence. Interstate Constr., Inc., B-248355, Aug. 6, 1992, 92-2 CPD Para. 86.
Based on our review of the record, we find no basis to question the Coast Guard's decision to allow Volmar to correct the bid. Volmar's worksheets, which include the $1,120,000 figure for electrical work, appear to be in good order, and the $1,120,000 price is supported by the subcontractor quote. The similarity of the figure in the handwritten bid summary paper ($112,000) to that in the subcontractor quote and in the bid worksheets supports a conclusion that the firm's vice president made a transposition error when it prepared the bid summary paper from the bid worksheets which, in turn, served as the basis for Volmar's final bid price. The price of $1,120,000 for the electrical work is in line with the Coast Guard's own estimate for the work.
It was reasonable for the agency to conclude, based on the handwritten work paper, that Volmar would have applied a 16-percent markup to the $1,120,000. It is clear from examining the $112,000 figure actually used in the bid summary sheet for the electrical portion of the work, the figures for the other two portions of the project as set forth on that sheet, and the total price, that the awardee added 16 percent to its total for each of these categories of work. Thus, the intended price may be ascertained by substituting the correct electrical figure of $1,120,000 and adding 16 percent. See Interstate Constr., Inc., supra.
With respect to Trataros' concerns about the correlation of the handwritten work paper setting forth the three work categories with the actual figures appearing in Volmar's bid schedule (which is not structured in terms of the three categories but in terms of four separate bid items), we point out that the mistake occurred in the preparation of the work paper, not in the actual completion of the bid schedule, and that bid items 1(b) through 1(d) do not contain any electrical work and were for a relatively insignificant amount, $62,700, compared to the total bid. While it appears that the agency did not ascertain exactly how the Volmar representative who completed the bid schedule knew how to allocate the bid price as set forth in the handwritten work paper among the four IFB line items, since Volmar has stated that the mistake occurred in bid item 1(a) and since the other three bid items have no relationship to the electrical work required, we do not believe that this matter has a direct impact upon the reasonableness of the Coast Guard's determination to permit correction.
Finally, Trataros raises numerous arguments to support its position that the agency should not have allowed correction. For example, it asserts that the agency: (1) accepted a mark-up method by Volmar which allegedly deviated from standard industry practice; (2) improperly delegated the authority to allow correction of the bid; (3) failed to properly consider the allegedly low cost of the mechanical portion of Volmar's bid; and (4) failed to obtain sworn statements in the proper form. First, since the mark-up method was clear from Volmar's worksheets and reasonable on its face, we see no reason why it needs to conform with some alleged industry practice. Second, the record shows that the correction determination was made and signed by the proper official. Finally, with respect to the last two arguments, we fail to see the relevance of an allegedly low quote in a different portion of the bid to this particular mistake claim, and we think that any lack of precision in the wording of Volmar's sworn statement does not prevent its use in support of the mistake claim. See Interstate Constr., Inc., supra.
The protest is denied.