B-187638, JANUARY 19, 1977

B-187638, JANUARY 19, 1977

DETERMINATION WHETHER TO ALLOW CORRECTION OF MISTAKE IN BID MUST BE MADE BY AGENCY ON CASE-BY-CASE BASIS AFTER CONSIDERATION OF ALL RELEVANT FACTS AND CIRCUMSTANCES. EVEN THOUGH CORRECTED BID CAME WITHIN ONLY $68,000 OF NEXT LOW BID IN $4.8 MILLION PROCUREMENT, CORRECTION WAS REASONABLE WHERE EVIDENCE SHOWS NATURE OF ERROR AND INTENDED BID.

GEORGE C. MARTIN, INC.:

GEORGE C. MARTIN, INC. (MARTIN) PROTESTS THE CORRECTION OF THE LOW BID OF MERANDO, INC. (MERANDO) UNDER INVITATION FOR BIDS NO. 0720-AA-02 0-6-CC ISSUED BY THE DEPARTMENT OF GENERAL SERVICES OF THE GOVERNMENT OF THE DISTRICT OF COLUMBIA (DISTRICT GOVERNMENT) FOR SCHOOL CONSTRUCTION WORK. ON OCTOBER 1 1976, THE DISTRICT GOVERNMENT OPENED THE SEVEN BIDS WHICH HAD BEEN SUBMITTED IN RESPONSE TO THE SUBJECT INVITATION. MERANDO SUBMITTED THE LOW BID IN THE AMOUNT OF $4,490,000. MARTIN, THE PROTESTER IN THIS ACTION, SUBMITTED THE NEXT LOW BID OF $4,830,000. THE DISTRICT GOVERNMENT'S ESTIMATE FOR THE WORK WAS $4,851,000. SOON AFTER BID OPENING, MERANDO, BY TELEGRAM DATED OCTOBER 1, 1976, NOTIFIED THE DISTRICT GOVERNMENT THAT IT HAD REASON TO BELIEVE A BID MISTAKE HAD BEEN MADE. LETTER DATED OCTOBER 5, 1976, MERANDO STATED THAT ITS ESTIMATOR HAD INADVERTENTLY TRANSPOSED A $295,500 QUOTATION RECEIVED FROM AN ELECTRICAL SUBCONTRACTOR TO $29,500 ON THE BID SUMMARY SHEET USED IN TOTALLING ITS BID PRICE, CAUSING THE SUBCONTRACTOR'S BID TO BE UNDERSTATED BY $266,000, AND MERANDO'S TOTAL BID TO BE UNDERSTATED BY AN ADDITIONAL $5,745, SINCE VARIOUS MARKUPS, COMPUTED AS A PERCENT OF THE TOTAL OF THE SUBCONTRACTOR'S BIDS, WERE NOT APPLIED TO THE OMITTED AMOUNT. ON OCTOBER 13, 1976, MARTIN PROTESTED ANY CORRECTION OF MERANDO'S BID.

THE FEDERAL PROCUREMENT REGULATIONS (41 C.F.R. 1-2.406) AND THE MATERIAL MANAGEMENT MANUAL OF THE DISTRICT OF COLUMBIA (PARAGRAPH 2620.15) SPECIFY THAT A CONTRACTING OFFICER MAY ALLOW CORRECTION OF A BID PRIOR TO AWARD WHERE CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED. NUMEROUS DECISIONS OF THIS OFFICE HAVE HELD THAT BID CORRECTION IS PROPER WHERE SUCH EVIDENCE IS PRESENTED. 49 COMP.GEN. 480(1970); 35 ID. 279(1955); 31 ID. 183(1951); 17 ID. 416(1937).

WHILE THE PROTESTER STATES THAT BID CORRECTION SHOULD NOT BE ALLOWED EVEN WHERE CLEAR AND CONVINCING EVIDENCE EXISTS BECAUSE OF THE POSSIBILITY OF FRAUDULENT CLAIMS OF MISTAKE, WE BELIEVE THAT THE INTERESTS OF THE GOVERNMENT JUSTIFY ALLOWING UPWARD BID CORRECTION. 41 COMP.GEN. 469, 472(1962). MOREOVER, WE BELIEVE THAT THE EVIDENTIARY RULE GOVERNING UPWARD CORRECTION IS APPROPRIATE NOTWITHSTANDING THAT DOWNWARD CORRECTION RESULTING IN DISPLACEMENT OF ANOTHER BIDDER IS PERMITTED ONLY WHERE THE INTENDED BID IS APPARENT FROM THE FACE OF THE BID ITSELF. SEE 37 COMP.GEN. 210, 212(1957).

IN THE PRESENT CASE, MERANDO SUBMITTED, IN SUPPORT OF ITS ALLEGATION OF MISTAKE, ITS ENTIRE BID FILE, INCLUDING ITS ESTIMATE SHEETS, SUBCONTRACTORS' BIDS, AND MASTER SUMMARY SHEET. IT ALSO SUBMITTED AN AFFIDAVIT, SIGNED BY MR. MERANDO, PRESIDENT OF MERANDO, SWEARING TO THE AUTHENTICITY OF THE DOCUMENTS SUBMITTED IN SUPPORT OF THE REQUEST FOR BID CORRECTION. THE SHEETS UPON WHICH MERANDO RECORDED BIDS FROM SUBCONTRACTORS INDICATES A SUB-BID OF $355,000 FOR ELECTRICAL WORK, WHICH WAS DIVIDED BY MERANDO INTO $295,000 FOR THE BASIC CONSTRUCTION PORTION OF THE BID AND $60,000 FOR THE SITE PREPARATION PORTION. HOWEVER, THE BID SUMMARY SHEET, FROM WHICH THE BIDDER COMPUTED ITS BID, HAS AN ENTRY OF $29,500 FOR THE CONSTRUCTION PORTION OF THE ELECTRICAL WORK. THE BIDDER HAS EXPLAINED THAT THE DISCREPANCY RESULTED FROM AN ERRONEOUS ENTRY OF THE $29,500 FIGURE ON THE BID SUMMARY SHEET, DURING AN ORAL TRANSMISSION OF THE FIGURES FROM THE SUBCONTRACTOR BID SHEETS TO THE SUMMARY SHEET. THE ADDING MACHINE TAPE INDICATES THAT THE ERRONEOUS $29,500 FIGURE WAS USED IN COMPUTING MERANDO'S FINAL BID.

THE DISTRICT GOVERNMENT VERIFIED WITH THE SUBCONTRACTOR WHOSE BID WAS ERRONEOUSLY TRANSFERRED THAT IT DID IN FACT SUBMIT TO MERANDO A TOTAL BID OF $355,000 FOR THE ELECTRICAL WORK FOR THIS CONTRACT. HAVING CONSIDERED MERANDO'S BIDDING DOCUMENTS AND THE SUBCONTRACTOR VERIFICATION, THE DISTRICT GOVERNMENT CONCLUDED THAT CLEAR AND CONVINCING EVIDENCE OF A MISTAKE IN BID EXISTED AND THAT REFORMATION SHOULD BE ALLOWED.

THE PROTESTER QUESTIONS THE FINDING BY THE DISTRICT GOVERNMENT THAT THE DOCUMENTS SUBMITTED BY MERANDO CONSTITUTE CLEAR AND CONVINCING EVIDENCE OF THE EXISTENCE AND AMOUNT OF THE ERROR. THE PROTESTER FIRST STATES HIS SUSPICION THAT THE SUBCONTRACTOR BIDS RECORDED ON THE SUBCONTRACTOR BID SHEETS DO NOT CORRESPOND TO THE FIGURES ENTERED ON THE SUMMARY SHEET AND THUS THAT ONE OF THE SHEETS MIGHT NOT BE THAT WHICH WAS USED IN PREPARING THE BID. THIS CONTENTION IS NOT SUPPORTED BY THE RECORD, HOWEVER, SINCE ALL OF THE FIGURES ON THE SUMMARY SHEET, EXCEPT FOR THE FIGURE FOR ELECTRICAL WORK, UPON WHICH THE REQUEST FOR MODIFICATION IS BASED.

THE PROTESTER ALSO ASSERTS THAT THE SUMMARY SHEET RELIED UPON AS CLEAR AND CONVINCING EVIDENCE OF THE MISTAKE IN BID MIGHT NOT HAVE BEEN THE SHEET ACTUALLY USED BY MERANDO SINCE THE SHEET CONTAINS NO ERASURES. THE PROTESTER REASONS THAT DUE TO THE HECTIC CONDITIONS EXPERIENCED BY ALL PRIME CONTRACTORS IMMEDIATELY PRIOR TO THE SUBMISSION OF THEIR BIDS PRIME CONTRACTORS' SUMMARY SHEETS NECESSARILY CONTAIN NUMEROUS ERASURES. ALTHOUGH MERANDO'S BID SUMMARY SHEET CONTAINS ONLY ONE ERASURE, THE PROTESTER MERELY CONJECTURES THAT THE BID SUMMARY SHEET SUBMITTED BY MERANDO IN SUPPORT OF ITS CLAIM OF MISTAKE IN BID IS NOT THAT USED IN COMPUTING MERANDO'S TOTAL BID. WE THEREFORE DO NOT QUESTION THE AUTHENTICITY OF THE SUMMARY SHEET.

THE PROTESTER ASSERTS THAT MERANDO HAS NOT CLEARLY ESTABLISHED ITS INTENDED BID SINCE MERANDO'S BID A WAS ROUNDED OFF FROM $4,102,495 TO $4,102,000 WHILE MERANDO'S INTENDED BID MIGHT OR MIGHT NOT HAVE BEEN ROUNDED OFF TO THE NEAREST THOUSAND FROM $4,761,745. THE PROTESTER CITES AS SUPPORT FOR ITS PROPOSITION TREWEEK CONSTRUCTION, B-183387, APRIL 15, 1975, 75-1 CPD 227. IN THAT CASE, THIS OFFICE POINTED OUT THAT WHERE THERE WAS NO FORMULA FOR CALCULATING ONE OF THE FIGURES MAKING UP THE BID, AND THE CORRECTED BID WOULD HAVE BEEN WITHIN A FEW HUNDRED DOLLARS OF THE NEXT LOW BID, CORRECTION SHOULD NOT BE ALLOWED. HOWEVER, THIS OFFICE ALSO POINTED OUT IN THAT CASE THAT:

THE INABILITY TO DETERMINE THE EXACT AMOUNT OF THE BIDDER'S INTENDED BID WOULD NOT PER SE PRECLUDE CORRECTION, AS AN UNCERTAINTY WITHIN A RELATIVELY NARROW RANGE IS NOT INCONSISTENT WITH CLEAR AND CONVINCING EVIDENCE OF WHAT THE BID WOULD HAVE BEEN, CHRIS BERG, INC. V. UNITED STATES, 426 F.2D 314(1970).

IN THE PRESENT CASE, THE UNCERTAINTY CONCERNING THE ROUNDING OFF IS $405, WHICH IS RELATIVELY SMALL COMPARED TO THE DIFFERENCE OF $68,255 BETWEEN THE CORRECTED BID AND THE NEXT LOW BID. CONSEQUENTLY, ANY UNCERTAINTY AS TO WHETHER THE INTENDED BID WOULD HAVE BEEN ROUNDED OFF WILL NOT PREVENT CORRECTION IN THIS CASE. PRESUMABLY, THE AGENCY HAS FOUND THAT THE INTENDED BID WOULD NOT HAVE BEEN ROUNDED OFF AND THUS HAS RECOMMENDED CORRECTION OF THE BID TO $4,761,745. THIS OFFICE HAS NO BASIS FOR FINDING THAT CONCLUSION TO BE UNREASONABLE.

THE PROTESTER ALSO QUESTIONS THE ALLOCATION BY MERANDO OF $295,000 OF THE COST OF ELECTRICAL WORK TO BID A AND $60,000 TO BID B. THE PROTESTER ARGUES THAT IT WAS UNNECESSARY FOR MERANDO TO ALLOCATE ITS COST BETWEEN BID A AND BID B SINCE AWARD WAS TO BE MADE ON THE BASIS OF THE TOTAL OF THE TWO BIDS. HOWEVER, THE SOLICITATION REQUESTS BIDDERS TO INCLUDE ALL OF THEIR BUILDING CONSTRUCTION COSTS IN BID A, AND ALL OF THEIR SITE PREPARATION COSTS IN BID B. THIS IS PRECISELY WHAT MERANDO ATTEMPTED TO DO BY ALLOCATING ITS ELECTRICAL WORK BETWEEN BIDS A AND B AND WE FIND NO REASON TO QUESTION ITS COMPLIANCE WITH THE SOLICITATION IN THIS REGARD.

THE PROTESTER NEXT QUESTIONS THE GOOD FAITH OF MERANDO IN REQUESTING REFORMATION OF ITS BID SINCE MERANDO'S ORIGINAL NOTIFICATION TO THE DISTRICT GOVERNMENT OF ITS MISTAKE IN BID STATED MERELY THAT MERANDO "HAD REASON TO BELIEVE THAT A MISTAKE HAD BEEN MADE" RATHER THAN "A MISTAKE HAS BEEN MADE." IN OUR OPINION MERANDO CLEARLY INTENDED TO ALLEGE A MISTAKE IN BID AND ITS CHOICE OF LANGUAGE DOES NOT PROVE THAT MERANDO'S ALLEGATION OF A MISTAKE IN BID WAS MADE IN BAD FAITH.

NEXT, THE PROTESTER ASSERTS THAT IN ORDER TO ALLOW A REQUEST FOR MODIFICATION OF A MISTAKE IN BID, THIS OFFICE MUST MAKE AN AFFIRMATIVE FINDING THAT THE BIDDER HAS A GOOD REPUTATION. IT IS TRUE THAT THIS OFFICE HAS HELD THAT WHERE A MISTAKE IN BID IS NOT ALLEGED IN GOOD FAITH, THE MISTAKE WILL NOT BE ALLOWED. S. J. GRAVES & SONS COMPANY, B-184260, MARCH 30, 1976, 76-1 CPD 205, AT 6. HOWEVER, THIS OFFICE DOES NOT REQUIRE THAT A BIDDER ASSERT AND PROVE HIS "GOOD REPUTATION" IN ORDER TO SUPPORT A CLAIM OF MISTAKE IN BID. SUCH PRACTICE IS CONSISTENT WITH THE GENERAL RULE OF EVIDENCE THAT REPUTATION IS NOT NORMALLY LEGALLY RELEVANT, UNLESS PLACED IN ISSUE. OTHERWISE A LEGAL DETERMINATION WOULD "HAVE THE ASPECTS OF A POPULARITY CONTEST RATHER THAN A FACTUAL INQUIRY INTO THE MERITS." JONES ON EVIDENCE 4:33; SEE ALSO 29 AM.JUR 2D, EVIDENCE 336 ET SEQ.

FINALLY, THE PROTESTER ASSERTS THAT TO ALLOW CORRECTION WHERE THE BID AS CORRECTED IS WITHIN $68,255 OF THE NEXT LOW BID WOULD "UNDERMINE THE INTEGRITY OF THE PUBLIC BID PROCESS AND SHOULD NOT BE ALLOWED." IN 48 COMP.GEN. 748(1969), CITED BY THE PROTESTER, BID CORRECTION WAS NOT ALLOWED WHERE THE CORRECTED BID WOULD HAVE BEEN WITHIN $500 OF THE SECOND LOW BID. IN THAT CASE, HOWEVER, THE BIDDER RECEIVED A QUOTE OF $30,300 FROM ITS ELECTRICAL SUBCONTRACTOR, BUT ALLEGED THAT IT CHOSE TO ESTIMATE ITS COST AS $27,500. THUS, THERE WAS ADEQUATE GROUNDS FOR SUSPECTING THAT THE INTENDED BID MIGHT NOT HAVE BEEN THE LOW BID, CONSIDERING THE NARROW GAP BETWEEN THE CORRECTED BID AND THE NEXT LOW BID AND CONSIDERING THE UNCERTAINTY OF THE INTENDED BID.

IN ASPHALT CONSTRUCTION, INC., 55 COMP.GEN. 742, 76-1 CPD 82, WE UPHELD THE CONTRACTING OFFICER'S DENIAL OF BID CORRECTION WHERE THE CORRECTED BID WAS WITHIN $5,000 OF THE SECOND LOW BID IN A $670,000 PROCUREMENT. HOWEVER, IN THAT CASE WE STATED:

IT IS CLEAR THAT THE CONTRACTING OFFICER WAS NOT ENTIRELY CONVINCED THAT ASPHALT WOULD HAVE BEEN THE LOW BIDDER IF A MISTAKE HAD NOT BEEN MADE IN COMPUTING ITS BID.

IT IS TRUE THAT THE CLOSENESS OF THE CORRECTED BID AND THE NEXT LOW BID IS A FACTOR FOR CONSIDERATION IN BID CORRECTION. CF. BERGER, MISTAKES IN BIDS/EDITION II, BRIEFING PAPERS NO. 76-5, OCOTBER 1976. IN THE FINAL ANALYSIS, HOWEVER, THE DECISION WHETHER OR NOT TO PERMIT CORRECTION MUST BE MADE BY THE CONTRACTING AGENCY ON A CASE-BY-CASE BASIS AFTER CONSIDERATION OF ALL RELEVANT FACTS AND CIRCUMSTANCES. MOREOVER, OUR REVIEW OF THESE MATTERS IS LIMITED TO AN EXAMINATION OF THE REASONABLENESS OF THE CONTRACTING OFFICER'S DETERMINATION. IN THE INSTANT CASE, THE CONTRACTING OFFICER BECAME CONVINCED OF MERANDO'S INTENDED BID PRICE AND OF THE FIRM'S STATUS AS LOW BIDDER AFTER CONSIDERING THE NATURE OF THE MISTAKE AND THE EVIDENCE OF THE INTENDED BID. IN THE CIRCUMSTANCES, WE CANNOT CONCLUDE THAT THE DETERMINATION TO ALLOW CORRECTION IS UNREASONABLE.

THEREFORE, WE CONCLUDE THAT THERE WAS A REASONABLE BASIS FOR THE DISTRICT GOVERNMENT'S FINDING THAT MERANDO HAD SUBMITTED CLEAR AND CONVINCING EVIDENCE OF THE NATURE, EXISTENCE AND AMOUNT OF THE MISTAKE AND THAT THE REQUEST FOR CORRECTION WAS SUBMITTED IN GOOD FAITH.

ACCORDINGLY, THE PROTEST IS DENIED.