B-135205, MAR. 3, 1958

B-135205, MAR. 3, 1958

TO MR. F. G. JENNINGS, CHIEF, PROCUREMENT BRANCH, CIVIL AERONAUTICS ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 7, 1958, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH DEL GUZZI, INC., PORT ANGELES, WASHINGTON, ALLEGES IT MADE IN ITS BID ON WHICH PURCHASE ORDER NO. 458-7645 DATED JANUARY 23, 1958, IS BASED.

SINCE THE FORMAL NOTICE OF ACCEPTANCE OF A BID CONSTITUTES AN AWARD OF A CONTRACT, THE PROCEDURE AUTHORIZED BY OUR DECISION OF JANUARY 17, 1957, B- 130302, IS NOT STRICTLY APPLICABLE. HOWEVER, IN VIEW OF YOUR REPRESENTATIONS AS TO THE URGENCY OF THE MATTER REPLY IS BEING ADDRESSED TO YOU, AND A COPY TRANSMITTED TO THE ADMINISTRATOR HERE.

THE CIVIL AERONAUTICS ADMINISTRATION, LOS ANGELES, CALIFORNIA, BY PROPOSAL NO. 4-58-959, AS AMENDED BY RIDERS NOS. 1, 2, AND 3, REQUESTED BIDS--- TO BE OPENED ON DECEMBER 27, 1957--- FOR FURNISHING LABOR AND MATERIALS AND PERFORMING ALL WORK REQUIRED FOR THE CONSTRUCTION OF A UHF/VHF AIR TO GROUND COMMUNICATION FACILITY AT A SITE APPROXIMATELY EIGHT MILES SOUTHEAST OF NEAH BAY, WASHINGTON. THE WORK TO BE PERFORMED WAS DIVIDED INTO VARIOUS ITEMS FOR PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK. PROSPECTIVE BIDDERS WERE REQUESTED TO SUBMIT A BASIC BID AND AN ALTERNATE BID ON THE WORK. IN RESPONSE DEL GUZZI, INC., SUBMITTED A BASIC BID AND AN ALTERNATE BID IN WHICH IT QUOTED TOTAL AGGREGATE BID PRICES OF $43,375 AND $46,620, RESPECTIVELY, FOR THE VARIOUS ITEMS OF WORK. BY TELEGRAM DATED DECEMBER 27, 1957, WHICH IT IS REPORTED WAS RECEIVED PRIOR TO BID OPENING TIME, DEL GUZZI, INC., REVISED SOME OF THE UNIT PRICES IN ITS BASIC AND ALTERNATE BIDS AND SUCH REVISIONS ESTABLISHED NEW BASIC AND ALTERNATE TOTAL AGGREGATE BID PRICES OF $37,851 AND $39,364, RESPECTIVELY. BY THE REFERRED-TO REVISION, THE UNIT PRICE FOR ITEM 2- - GRAVEL--- IN BOTH THE BASIC AND ALTERNATE BIDS WAS CHANGED FROM $2.50 PER CUBIC YARD TO $2.10 PER CUBIC YARD.

IT IS REPORTED THAT DEL GUZZI, INC., DID NOT RETURN SIGNED COPIES OF THE THREE RIDERS APPLICABLE TO THE PROPOSAL WITH ITS BIDS; THAT SINCE THE CORPORATION HAD NOT SUBMITTED ANY PREVIOUS BIDS TO THE CONTRACTING OFFICE, IT WAS REQUESTED TO SUBMIT A QUALIFICATION DATA SHEET; THAT IN EVALUATING THE BID OF DEL GUZZI, INC., IT WAS NOTED THAT THE AMOUNT QUOTED BY THE CORPORATION FOR ITEM 12,"INSTALL AIR CONDITION, 28,000 BTU," WAS EXCESSIVELY HIGH; AND THAT BY TELEGRAM DATED JANUARY 20, 1958, THE CORPORATION WAS PLACED ON NOTICE OF THE POSSIBILITY OF A MISPLACED DECIMAL POINT IN THE UNIT PRICE FOR ITEM 12 AND WAS REQUESTED TO CONFIRM ITS BID PRICE ON THAT ITEM. BY TELEGRAM DATED JANUARY 21, 1958, THE CORPORATION ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID WITH RESPECT TO ITEM 12 IN THAT THE UNIT PRICE FOR THAT ITEM SHOULD HAVE BEEN $644.05. CORRECTION OF THE UNIT PRICE FOR ITEM 12 ESTABLISHED A NEW TOTAL AGGREGATE BASIC BID PRICE OF $32,039.10. THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDDERS WHO SUBMITTED BASIC BIDS QUOTED TOTAL AGGREGATE BID PRICES OF $61,455 AND $72,530, AND THAT THE GOVERNMENT'S ESTIMATE WAS IN THE AMOUNT OF $52,122 FOR THE BASIC WORK. BY LETTER DATED JANUARY 23, 1958, DEL GUZZI, C., WAS NOTIFIED THAT ITS BID OF $32,039.10 FOR THE BASIC WORK HAD BEEN ACCEPTED; THAT IT SHOULD EXECUTE AND RETURN THE ENCLOSED CONTRACT FORMS; AND THAT IT SHOULD EXECUTE AND RETURN THE ENCLOSED COPIES OF THE THREE RIDERS TO THE PROPOSAL, WHICH IT HAD FAILED TO SUBMIT WITH ITS ORIGINAL BIDS.

BY LETTER DATED FEBRUARY 3, 1958, DEL GUZZI, INC., ADVISED THAT AN ERROR OF $7.55 PER CUBIC YARD HAD BEEN MADE BY THE CORPORATION WHEN QUOTING ITS UNIT PRICE FOR ITEM 2, COVERING THE FURNISHING OF GRAVEL FOR THE EXISTING ACCESS ROAD AND PLOT; THAT IT HAD FAILED TO INCLUDE IN ITS BID PRICE THE COST OF CARTING THE GRAVEL FROM PORT ANGELES TO THE JOB SITE BY BARGE AND TRUCK; AND THAT THE CORRECT UNIT PRICE FOR ITEM 2 IS $9.65 PER CUBIC YARD INSTEAD OF $2.10 PER CUBIC YARD DELIVERED TO THE JOB SITE. IN ITS LETTER THE CORPORATION GAVE A BREAKDOWN OF ITS ORIGINAL AND INTENDED BID PRICES FOR ITEM 2 AND IT REQUESTED THAT ITS BID PRICE FOR THAT ITEM BE CORRECTED ACCORDINGLY, OR IN THE ALTERNATIVE, THE AWARD TO IT BE CANCELLED. THE CORPORATION DID NOT SUBMIT ANY OTHER EVIDENCE WHICH WOULD ESTABLISH ITS INTENDED BID PRICE FOR ITEM 2.

THE CORPORATION'S QUOTATION OF $2.10 PER CUBIC YARD FOR ITEM 2, ON WHICH ITEM ERROR IS ALLEGED, IS SUBSTANTIALLY BELOW THE NEXT LOW BID OF $9 PER CUBIC YARD AND THE GOVERNMENT'S ESTIMATE OF $8 PER CUBIC YARD FOR THAT ITEM. ALSO, THE CORPORATION'S TOTAL AGGREGATE BASIC BID PRICE OF $32,039.10 IS APPROXIMATELY ONE-HALF OF THE PRICE QUOTED BY THE NEXT LOWEST BIDDER AND APPROXIMATELY 60 PERCENT OF THE AMOUNT OF THE GOVERNMENT'S ESTIMATE. IN HIS LETTER OF FEBRUARY 7, 1958, THE CHIEF, PROCUREMENT BRANCH, CIVIL AERONAUTICS ADMINISTRATION, STATES THAT THE DIFFERENCE BETWEEN THE CORPORATION'S UNIT PRICE FOR ITEM 2 AND THE UNIT PRICE QUOTED BY THE NEXT LOWEST BIDDER AND THE GOVERNMENT ENGINEER'S ESTIMATE FOR THIS ITEM WAS NOT NOTICED AT THE TIME OF EVALUATION OF THE BIDS BECAUSE THE CORPORATION HAD QUOTED LOW PRICES ON ALMOST ALL OF THE OTHER ITEMS BID UPON. SINCE THE CORPORATION WAS REQUESTED TO CONFIRM ITS HIGH BID PRICE ON ITEM 12, IT APPEARS THAT IT WOULD HAVE BEEN PROPER AT THAT TIME TO HAVE ALSO REQUESTED THE CORPORATION TO CONFIRM ITS OVERALL BID AND SPECIFICALLY ITS UNIT BIDS ON OTHER ITEMS AS TO WHICH THE PRICES APPEARED TO BE COMPLETELY OUT OF LINE WITH THE BID PRICES QUOTED BY THE TWO OTHER BIDDERS AND WITH THE GOVERNMENT'S ESTIMATE.

IN THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ACCEPTANCE OF THE BID WAS IMPROPER AND DID NOT GIVE RISE TO AN ENFORCEABLE CONTRACT. THE AWARD MADE TO DEL GUZZI, INC., ON JANUARY 23, 1958, SHOULD THEREFORE BE CANCELLED AND THE CORPORATION RELIEVED OF ALL LIABILITY UNDER ITS BID.

THE PAPERS SUBMITTED WITH THE LETTER OF FEBRUARY 7, 1958, ARE RETURNED.