B-173792, DEC 29, 1971

B-173792, DEC 29, 1971

TO MILLER, GROEZINGER, PETTIT & EVERS:

FURTHER REFERENCE IS MADE TO YOUR REQUEST ON BEHALF OF RELIANCE ENTERPRISES (RELIANCE) FOR RELIEF ON ACCOUNT OF A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. DABF07-70-C-0103 TO THAT FIRM PURSUANT TO INVITATION FOR BIDS (IFB) NO. DABF07-70-B-0121, ISSUED ON MAY 4, 1970, BY THE UNITED STATES ARMY TRAINING CENTER, FORT ORD, CALIFORNIA.

THE IFB SOLICITED BIDS FOR THE CLEANING AND PAINTING OF AN ANTENNA PEDESTAL, ANTENNA DISH, AND ACCESSORY EQUIPMENT LOCATED AT CAMP ROBERTS, CALIFORNIA. THE BIDDING SCHEDULE "A" OF THE INVITATION PROVIDED AS FOLLOWS:

"ITEM NO. DESCRIPTION QUANTITY UNIT AMOUNT

SEE SW-1 DESCRIPTION OF WORK

PART I. (THIS PART INVOLVES MAINTENANCE AND REPAIR, STATUTORY COST LIMITATION - NONE.)

1. CLEANING AND REPAINTING OF ANTENNA 1 JOB

OR ALTERNATE

1A. SAME AS ITEM 1 EXCEPT 1 JOB

CONTRACTOR WILL BE PROVIDED WITH GOVERNMENT SCAFFOLDING KNOWN AS 'HI RANGER' (OR 'CHERRY PICKER')"

THE REFERENCED DESCRIPTION OF WORK PARAGRAPH AT PAGE SW-1 STATED:

"1. DESCRIPTION OF WORK: (A) WORK TO BE DONE: THE WORK CONSISTS OF FURNISHING ALL PLANT, LABOR, AND MATERIALS (EXCEPT AS INDICATED OTHERWISE IN THE SPECIFICATIONS), AND PERFORMING ALL WORK IN STRICT ACCORDANCE WITH THE PLANS AND SPECIFICATIONS REQUIRED FOR CLEANING AND REPAINTING OF THE ANTENNA PEDESTAL, AND THE ENTIRE UPPER PORTION OF THE ANTENNA PEDESTAL INCLUDING BOTH THE FRONT AND REAR SURFACES OF THE 60' DIAMETER ANTENNA DISH WITH THE SUPPORTING STRUCTURES, TWO (2) EQUIPMENT ENCLOSURES, TOP OF PEDESTAL AND ALL THE SUPER-STRUCTURE ON THE REAR OF THE ANTENNA AND COUNTERBALANCE ARMS."

THE BASIS OF AWARD PARAGRAPH AND OTHER PERTINENT PROVISIONS OF SCHEDULE A OF THE SOLICITATION PROVIDED:

"1. BASIS OF AWARD. THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD OF EITHER THE BASIC BID ITEM OR ITS ALTERNATE, AS BEST SERVES THE INTERESTS OF THE GOVERNMENT.

"4. NORMAL WORKING HOURS.

(A) THE CONTRACTOR SHALL SCHEDULE HIS WORKING HOURS TO COINCIDE WITH THE WORKING HOURS OF THE MILITARY INSTALLATION, A NORMAL 5 DAY, 40 HOUR WEEK, MONDAY THROUGH FRIDAY, FEDERAL HOLIDAYS EXCEPTED. THE CONTRACTOR SHALL NOT PERFORM WORK ON THE INSTALLATION DURING OTHER WORK DAYS NOR DURING OTHER HOURS WITHOUT THE WRITTEN APPROVAL OF THE CONTRACTING OFFICER.

(B) IF THE CONTRACTOR, FOR HIS CONVENIENCE, DESIRES TO PERFORM DURING OTHER THAN NORMAL WORKING HOURS OR ON OTHER THAN NORMAL WORK DAYS, HE SHALL REIMBURSE THE GOVERNMENT FOR ANY ADDITIONAL EXPENSE OCCASIONED THE GOVERNMENT THEREBY, SUCH AS, BUT NOT LIMITED TO, OVERTIME PAY FOR GOVERNMENT INSPECTORS, UTILITIES SERVICES, ETC.

"5. WORK SCHEDULING. PRIOR TO THE BEGINNING OF THE WORK, A SCHEDULE FOR MOVEMENT OF THE ANTENNA TO FACILITATE THE PAINTING WILL BE ARRANGED BETWEEN THE GOVERNMENT AND THE CONTRACTOR. THIS SCHEDULE WILL PROVIDE FOR THE ANTENNA TO BE 'DUMPED'. IN THE DUMPED POSITION, THE PORTION OF THE ANTENNA NORMALLY AT THE TOP IS PLACED ON THE BOTTOM, ELIMINATING THE NEED FOR WORKING ABOVE THE CENTER OF THE DISH. THE MOVABLE PORTIONS OF THE ANTENNA DISH, INCLUDING MOVABLE SUPPORT STRUCTURES AND THE HI-RANGER, WILL NOT BE AVAILABLE BETWEEN THE HOURS OF NOON AND 4:00 P.M., EACH DAY. HOWEVER, THERE ARE OTHER STATIONARY PORTIONS WHICH MAY BE WORKED ON ANY TIME WITHOUT RESTRICTION, PROVIDED, THERE IS NO INTERFERENCE WITH OPERATION OF THE ANTENNA DURING THE ABOVE CITED PERIOD. ALL WORK WILL BE PERFORMED DURING DAYLIGHT HOURS, SUBJECT TO THE FOREGOING RESTRICTIONS.

"6. GOVERNMENT-FURNISHED EQUIPMENT. A HI-RANGER WILL BE MADE AVAILABLE, IF REQUIRED, BY DIRECT COORDINATION BETWEEN THE GOVERNMENT AND THE CONTRACTOR (THUS ELIMINATING THE NEED FOR SCAFFOLDING). (SEE ITEM 1A, BIDDING SCHEDULE, PAGE BS-1.)"

WHEN BIDS WERE OPENED ON JUNE 2, 1970, THE FOLLOWING FIVE BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION:

BIDDER ITEM NO. 1. ITEM NO. 1A.

E & S PAINTING COMPANY $20,000 $13,220

THE WESTERN COMPANY 16,000 13,000

GLEN CLYATT 14,000 13,750

WAYNE HUMPHREYS PAINTING COMPANY 11,150 8,900

RELIANCE ENTERPRISES 7,403 6,802

THE GOVERNMENT'S ESTIMATED COST 12,000 8,000

FOR THE WORK WAS

NOTING THE DISPARITY OF RELIANCE'S BID, IN COMPARISON WITH THE OTHER BIDS AND THE GOVERNMENT'S ESTIMATE, THE PROCUREMENT ASSISTANT TELEPHONED RELIANCE'S OFFICE ON JUNE 2, 1970, AND ASKED ITS ESTIMATOR TO VERIFY RELIANCE'S PRICES, POINTING OUT THE PRICES OF THE OTHER BIDS, AS WELL AS THE GOVERNMENT'S ESTIMATES. ON JUNE 3, 1970, RELIANCE'S PRESIDENT TELEPHONED THE CONTRACTING OFFICER AND VERIFIED THAT THE PRICES SUBMITTED WERE CORRECT. BY LETTER OF THE SAME DATE, RELIANCE'S PRESIDENT WROTE:

"THIS WILL CONFIRM OUR PHONE CONVERSATION TODAY WHEREIN WE CONFIRMED OUR BID OF $7,403.00 FOR ITEM 1 AND $6,802.00 FOR ITEM 1A.

"WE ALSO ADVISE THAT WE HAVE REVIEWED OUR BID, HAVE FOUND NO ERRORS OF CONSEQUENCE AND BELIEVE THAT OUR INTERPRETATION OF THE SPECIFICATION REQUIREMENTS IS CONSISTENT WITH THE AMOUNTS THAT WE BID. WE THEREFORE WILL ACCEPT A CONTRACT TO ACCOMPLISH THE WORK COVERED BY THE REFERENCED INVITATION FOR BID."

CONSEQUENTLY, THE CONTRACTING OFFICER NOT KNOWING AT THAT POINT IN TIME THAT YOUR CLIENT INTERPRETED THE SOLICITATION REQUIREMENTS IN A MANNER CONTRARY TO HIS OWN INTERPRETATIONS, NOTIFIED RELIANCE ON JUNE 10, 1970, OF THE AWARD OF THE CONTRACT TO THAT FIRM ON THE BASIS OF ITS BID UNDER ITEM 1 IN THE AMOUNT OF $7,403.00. STANDARD CONTRACT FORM (SF)23 (CONSTRUCTION CONTRACT) WAS FURNISHED RELIANCE IN THE JUNE 10 LETTER, TOGETHER WITH THE NECESSARY PAYMENT AND PERFORMANCE BONDS FORMS. RELIANCE RETURNED THE SF 23 UNEXECUTED WITHOUT THE BONDS AND REQUESTED THE CONTRACTING OFFICER TO REINSTATE THE OPTION TO USE THE HI RANGER IN THE CONTRACT. RELIANCE CONTENDED THAT THE HI-RANGER WAS TO BE MADE AVAILABLE AT THE OPTION OF THE CONTRACTOR, PURSUANT TO PARAGRAPHS 5 AND 6 OF SCHEDULE A OF THE INVITATION QUOTED ABOVE. SINCE RELIANCE HAD DECIDED THAT IT WOULD NEED THE HI-RANGER, IT ASSERTED THAT THE GOVERNMENT WAS REQUIRED TO FURNISH THE MACHINE AND THAT THE AWARD SHOULD THEREFORE BE MADE FOR ITEM 1A IN THE AMOUNT OF $6,802. THE CONTRACTING OFFICER REPLIED THAT THE IFB PROVIDED TWO METHODS ON WHICH BIDS COULD BE SUBMITTED AND THAT THE GOVERNMENT, NOT THE PROSPECTIVE CONTRACTOR, HAD THE OPTION OF DECIDING WHICH BID OF THE CONTRACTOR WOULD BE ACCEPTED. THE CONTRACTING OFFICER FURTHER STATED THAT THE HI RANGER WAS ONLY TO BE MADE AVAILABLE TO THE CONTRACTOR IF THE CONTRACT WERE AWARDED ON THE BASIS OF ITEM 1A, AND SINCE THE CONTRACT WAS NOT AWARDED ON THE BASIS OF ITEM 1A, THE HI-RANGER WOULD NOT BE MADE AVAILABLE AS A PART OF THE CONTRACT AWARDED ON ITEM 1. FOLLOWING SEVERAL EXCHANGES OF CORRESPONDENCE AND A SITE PRECONSTRUCTION CONFERENCE ON JUNE 19, 1970, RELIANCE CONTINUED TO REFUSE TO SIGN THE CONTRACT DOCUMENTS AND ON JULY 23, 1970, THE CONTRACT WAS TERMINATED FOR DEFAULT.

RELIANCE APPEALED THE DEFAULT TERMINATION TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA), AND IN PROCEEDINGS NUMBERED ASBCA 15-543, THE MATTER CAME ON FOR HEARING ON APRIL 26, 1971, EX PARTE, RELIANCE NOT BEING IN ATTENDANCE OR REPRESENTED BY COUNSEL. BY LETTER DATED JULY 7, 1971, TO THE BOARD YOUR FIRM REQUESTED A STAY OF PROCEEDINGS IN ORDER TO PERMIT YOU TO PRESENT TO OUR OFFICE THE MISTAKE IN BID ISSUE NOW UNDER DISCUSSION. THE BOARD GRANTED THE STAY ON JULY 28, 1971.

YOU INDICATE THAT THE PRIMARY ISSUE FOR RESOLUTION BY OUR OFFICE IS WHETHER THE CONTRACTING OFFICER ADVISED RELIANCE OF THE NATURE OF THE SUSPECTED ERROR IN ITS BID IN KEEPING WITH THE RATIONALE OF 35 COMP. GEN. 136 (1955). SPECIFICALLY, YOU URGE:

"ON JUNE 3, 1970, THE CONTRACTING OFFICER REQUESTED VERIFICATION OF THE BID PRICES. HOWEVER, AT NO TIME PRIOR TO AWARD OF THE CONTRACT WAS IT CALLED TO RELIANCE ENTERPRISES' ATTENTION THAT THE GOVERNMENT INTERPRETED THE SOLICITATION PROVISIONS IN A MANNER DIFFERENT FROM THAT OF RELIANCE ENTERPRISES. MOREOVER, RELIANCE ENTERPRISES WAS NOT ADVISED THAT AN APPARENT DISCREPANCY OR ERROR EXISTED BETWEEN ITS BIDS ON ITEM NO. 1 AND ITEM NO. 1A. SPECIFICALLY, THE GOVERNMENT DID NOT ADVISE RELIANCE ENTERPRISES THAT THE $601.00 DIFFERENCE IN PRICE BETWEEN THE BIDS ON ITEM NO. 1 AND ITEM NO. 1A DID NOT APPEAR TO TAKE INTO ACCOUNT THE COSTS FOR THE USE OF CONTRACTOR FURNISHED 'HI-RANGER' TYPE EQUIPMENT TO PERFORM THE WORK UNDER ITEM NO. 1. HOWEVER, THE GOVERNMENT HAD ACTUAL KNOWLEDGE OF THIS ERROR, AS IS EVIDENT FROM THE GOVERNMENT'S ESTIMATE, ABSTRACT OF BIDS, AND PAGES 7 AND 13 OF THE ASBCA TRANSCRIPT:THE MINIMUM DIFFERENCE BETWEEN BIDS ON ITEM NO. 1 AND ITEM NO. 1A, ABSENT A MISTAKE, SHOULD HAVE BEEN $2,500; THE MAXIMUM, APPROXIMATELY $5,000."

OUR OFFICE, IN A LONG LINE OF CASES, HAS RECOGNIZED THE STANDARD REQUIRED FOR VERIFICATION OF EXPECTED MISTAKES ESTABLISHED BY THE CASE OF UNITED STATES V METRO NOVELTY MANUFACTURING CO., INC., 125 F. SUPP. 713, TO THE EFFECT THAT A REQUEST FOR VERIFICATION MUST BE SUFFICIENTLY EXPLICIT TO PUT THE BIDDER ON NOTICE OF THE MISTAKE WHICH IS SURMISED. THUS, IN 35 COMP. GEN. 136 (1955), WE FOUND THAT SUCH A STANDARD HAD NOT BEEN MET WHERE THE RECORD REVEALED THAT THE CONTRACTING OFFICER AT THE TIME OF AWARD NOT ONLY SUSPECTED AN ERROR IN THE COMPANY'S BID BUT SURMISED THAT THE BID WAS BASED ON MATERIAL MEETING ONLY ONE OF THE SPECIFICATIONS ALTHOUGH THE BIDDER WAS ASKED WHETHER THE ITEM OFFERED MET THE TWO SPECIFICATIONS CITED IN THE INVITATION. FOR REASONS LATER DISCUSSED, SUCH WAS NOT THE SITUATION HERE.

WE HAVE ALSO CONSISTENTLY HELD THAT THE RESPONSIBILITY FOR PREPARATION OF A BID RESTS WITH THE BIDDER. THEREFORE, A BIDDER WHO MAKES A MISTAKE IN A BID WHICH HAS BEEN ACCEPTED IN GOOD FAITH BY THE GOVERNMENT MUST BEAR THE CONSEQUENCES UNLESS THE MISTAKE WAS NOTED OR THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD. THIS CONNECTION WE OBSERVED IN 48 COMP. GEN. 672 (1969) AT PAGE 675:

"THE TASK OF ASCERTAINING WHAT AN OFFICIAL IN CHARGE OF ACCEPTING OFFERS SHOULD HAVE KNOWN OR SUSPECTED IS NOT ALWAYS AN EASY ONE. HOWEVER, THE TEST HERE MUST BE THAT OF REASONABLENESS, I.E., WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THIS CASE THERE WERE ANY FACTORS WHICH REASONABLY SHOULD HAVE RAISED THE PRESUMPTION OF ERROR IN THE MIND OF THE CONTRACTING OFFICER."

THIS CASE IS NO EXCEPTION. WHILE THE RECORD REFLECTS THAT THE CONTRACTING OFFICER ANTICIPATED THAT THERE WOULD BE A SUBSTANTIAL DIFFERENCE BETWEEN BIDS ON ITEMS 1 AND 1A, THE DIFFERENCE BETWEEN THESE ITEMS IN THE BIDS RECEIVED VARIED FROM A LOW OF $250 TO A HIGH OF $6,780, AND NO EVIDENCE HAS BEEN PRODUCED TO INDICATE THAT THE CONTRACTING OFFICER WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF THE NATURE OF THE MISTAKE NOW ALLEGED. RATHER, THE RECORD SHOWS THAT SINCE RELIANCE'S BID ON BOTH ITEMS WAS CONSIDERABLY LOWER THAN THE OTHER BIDS AND THE GOVERNMENT'S ESTIMATE, THE CONTRACTING OFFICER'S ATTENTION WAS DIRECTED TO THAT FACT RATHER THAN TO A SUSPICION THAT RELIANCE HAD INTERPRETED THE IFB PROVISIONS IN SUCH A MANNER AS TO BELIEVE THAT IT, RATHER THAN THE GOVERNMENT, HAD THE OPTION OF DETERMINING THE ITEM FOR WHICH THE AWARD WOULD BE MADE.

IN THESE CIRCUMSTANCES, WE BELIEVE THAT IT WOULD BE UNREASONABLE TO REQUIRE THE CONTRACTING OFFICER TO ADVISE RELIANCE OF THE NATURE OF AN ERROR AS TO WHICH HE HAD NO CLEAR BASIS TO SUSPECT, PARTICULARLY AFTER RELIANCE AFFIRMED ITS BID AFTER HAVING BEEN ADVISED OF THE GOVERNMENT'S ESTIMATE FOR EACH ITEM AND THE PRICES OF THE OTHER BIDDERS ON THOSE ITEMS.

HERE, THE BIDDERS WERE INVITED TO INVESTIGATE THE SITE PRIOR TO BID OPENING AND SATISFY THEMSELVES OF THE CONDITIONS AFFECTING THE WORK. THIS RELIANCE DID NOT DO UNTIL SOME NINE DAYS FOLLOWING THE AWARD OF THE CONTRACT. IN THIS REGARD, IT IS INTERESTING TO NOTE THAT IN BOTH THE CORRESPONDENCE BETWEEN THE PARTIES AND IN RELIANCE'S PLEADINGS BEFORE THE BOARD, RELIANCE HAS NOT CLAIMED AN ERROR IN ITS BID PRICES. RATHER, RELIANCE CONTINUED TO ASSERT THAT AN ERROR WAS MADE BY THE GOVERNMENT IN ITS INTERPRETATION OF THE IFB PROVISIONS. THIS, OF COURSE, IS THE ISSUE PENDING BEFORE THE BOARD, WHICH WE WILL NOT CONSIDER AT THIS JUNCTURE. ARE BY LETTER OF TODAY FURNISHING THE BOARD A COPY OF THIS DECISION.

WE BELIEVE THE RECORD IN THIS CASE REASONABLY INDICATES THAT THE ACCEPTANCE OF RELIANCE'S BID, AS AFFIRMED ON JUNE 3, 1970, WAS MADE IN GOOD FAITH, NO ERROR IN PRICE HAVING BEEN ALLEGED UNTIL LONG AFTER AWARD OF THE CONTRACT; AND THAT THE GOVERNMENT FULFILLED ITS RESPONSIBILITIES WHEN IT ADVISED RELIANCE OF THE GOVERNMENT'S ESTIMATES AND THE OTHER BIDS AND OBTAINING A BID VERIFICATION AFTER IT WAS SUSPECTED THAT A MISTAKE MIGHT HAVE BEEN MADE BECAUSE YOUR CLIENT'S QUOTED PRICES WERE MUCH LOWER THAN THOSE QUOTED BY OTHER BIDDERS AND THE PRICES ESTIMATED BY THE GOVERNMENT. CONSEQUENTLY, WE MUST HOLD THAT THE ACCEPTANCE OF RELIANCE'S BID CONSUMMATED A VALID AND BINDING CONTRACT, AND YOUR MISTAKE-IN-BID CLAIM ON ITS BEHALF IS DENIED.