B-126817, FEB. 28, 1956

B-126817, FEB. 28, 1956

TO THE HONORABLE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 2, 1956, FROM THE ASSISTANT SECRETARY OF COMMERCE FOR ADMINISTRATION, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY NELLO L. TEER COMPANY, DURHAM, NORTH CAROLINA, TO HAVE BEEN MADE IN ITS BID OPENED ON JANUARY 19, 1956.

BY INVITATION DATED DECEMBER 15, 1955 BIDS WERE REQUESTED FOR FURNISHING ALL LABOR, EQUIPMENT AND MATERIALS AND PERFORMING ALL WORK FOR RAMA ROAD PROJECT R-3A, MUHAN-ESPABEL RIVER, REPUBLIC OF NICARAGUA. THE INVITATION REQUESTED BIDS ON 31 ITEMS AND IN RESPONSE, NELLO L. TEER COMPANY SUBMITTED A BID DATED JANUARY 19, 1956, IN A TOTAL AMOUNT OF $1,839,362.01, WHICH INCLUDED THE FOLLOWING ITEM:

CHART ITEM ESTIMATED PAY NAMES WITH UNIT UNIT AMOUNT NO. QUANTITY BID PRICE WRITTEN IN WORDS BID PRICE BID 206A (1) 1,470 LIN. FT. CONCRETE RAILING

FOR BRIDGES AT ONE HUNDRED

DOLLARS PER LIN. FT. $100.00 $147,000.00

THE ABSTRACT OF BIDS SHOWS THAT THE ONLY OTHER BID RECEIVED WAS IN THE TOTAL AMOUNT OF $1,802,600.00 AND QUOTED THE UNIT PRICE FOR ITEM 206A (1) AT $5.00, WITH A TOTAL BID OF $7,350.00 FOR THE ITEM IN QUESTION.

THE LETTER FROM THE ASSISTANT SECRETARY AND ITS ENCLOSURES FROM THE CHIEF, INTER-AMERICAN HIGHWAY OFFICE, INDICATE THAT APPROXIMATELY TWO HOURS AFTER BID OPENING THE PRESIDENT OF NELLO L. TEER COMPANY ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID AND REQUESTED PERMISSION TO CLARIFY SUCH ERROR. IN SUPPORT THEREOF, THE COMPANY HAS SUBMITTED ORIGINAL WORKSHEETS COVERING ITS BID ON THE PRESENT PROJECT (DESIGNATED R-3A), AS WELL AS THE ORIGINAL WORKSHEETS ON WHICH IT BASED A BID SUBMITTED ON R-3, A PRIOR SIMILAR PROJECT. IN EXPLANATION OF ITS WORKSHEETS, THE COMPANY POINTS OUT THAT IN ITS SUCCESSFUL BID ON PROJECT R-3 THE INVITATION REQUESTED UNIT PRICES ON IDENTICAL CONCRETE BRIDGE RAILING BE SUBMITTED ON A CUBIC YARD BASIS, RATHER THAN A LINEAL FOOT BASIS AS REQUESTED BY THE INVITATION ON PROJECT R 3A, AND THAT THE UNIT PRICE PREVIOUSLY QUOTED IN ITS BID SUBMITTED ON PROJECT R-3 WAS $100.00 PER CUBIC YARD. IT IS FURTHER POINTED OUT THAT IN CONNECTION WITH THE PREPARATION OF THE BID TOBE SUBMITTED ON PROJECT R-3A, THE COMPANY'S VICE PRESIDENT IN CHARGE OF ESTIMATING AND ENGINEERING HAD PREPARED A SHEET UPON WHICH HE ESTIMATED THAT THE 1,466.18 LINEAL FEET OF CONCRETE BRIDGE RAILING REQUIRED ON THE FOUR BRIDGES INVOLVED IN PROJECT R-3A WOULD REQUIRE 42 CUBIC YARDS OF CONCRETE, AND THAT SUCH ESTIMATE WAS SUMMARIZED WITH THE NOTATION "BID AT $100.00 PER C.Y.' THE PRESIDENT OF THE COMPANY HAS FURTHER EXPLAINED THAT AFTER PREPARATION OF THE PROJECT R-3A WORKSHEETS, THE VICE PRESIDENT IN CHARGE OF ESTIMATES AND ENGINEERING INSERTED BY PENCIL, ONE OF TWO COPIES OF THE PROJECT R-3A SCHEDULE OF BID ITEMS IN THE COMPANY'S POSSESSION, THE VARIOUS UNIT PRICES WHICH HIS ESTIMATE INDICATED THE COMPANY SHOULD QUOTE, AND IN SO DOING INADVERTENTLY INSERTED THE UNIT PRICE OF $100.00 FOR ITEM 206A (1) WITHOUT NOTICING THAT THE UNIT PRICE REQUESTED ON THIS ITEM ON PROJECT R-3A WAS BASED ON LINEAL FOOTAGE. A SUBORDINATE WAS THEN INSTRUCTED TO TRANSPOSE THE PENCILED FIGURES IN INK TO THE REMAINING SCHEDULE OF BID ITEMS WHICH WAS EXAMINED BY THE PRESIDENT OF THE COMPANY WHO ORDERED VARIOUS UNIT PRICES CHANGED BUT DID NOT NOTE THE LINEAL FOOT UNIT PRICE REQUIREMENT UNDER ITEM 206A (1). HOWEVER, AS A RESULT OF THE VARIOUS CHANGES WHICH WERE ORDERED, THE PENCILED FIGURES WERE ERASED FROM THE ORIGINAL SCHEDULE OF BID ITEMS, THE CORRECTED PRICES WERE INSERTED IN INK AND THE COPY WAS THEN SUBMITTED AS THE COMPANY'S BID. THE ORIGINAL PAPERS NOW ON FILE APPEAR TO SUBSTANTIATE THIS INFORMATION. BASED ON THIS EXPLANATION AND THE DOCUMENTS SUBMITTED, THE NELLO L. TEER COMPANY HAS REQUESTED THAT THEIR BID ON ITEM 206A (1) BE CORRECTED TO SHOW THE UNIT PRICE PER LINEAL FOOT OF BRIDGE RAILING AS $2.85, WHICH WOULD REPRESENT THE APPLICATION OF THE PROJECT SPECIFICATIONS, SHOWING ONE CUBIC YARD OF CONCRETE TO 35.14 LINEAL FEET OF RAILING, TO THE ALLEGED ERRONEOUS BID FIGURE OF $100.00 PER CUBIC YARD OF CONCRETE. AS CORRECTED, THE AMOUNT BID BY NELLO L. TEER COMPANY ON ITEM 206A (1) WOULD THEN BE $1,696,551.50 AND AS SO CORRECTED WOULD BE $106,048.50 LESS THAN THE ONLY OTHER BID SUBMITTED.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE IS LITTLE, IF ANY, DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED. THE WORKSHEETS OF THE VICE PRESIDENT IN CHARGE OF ESTIMATES AND ENGINEERING ESTABLISH THAT THE UNIT PRICE OF $100.00 ON ITEM 206A (1) WAS THE ESTIMATE WHICH HE INTENDED TO SUBMIT TO THE PRESIDENT OF THE COMPANY FOR EACH CUBIC YARD OF CONCRETE REQUIRED FOR CONSTRUCTION OF THE BRIDGE RAILINGS. HOWEVER, THE EVIDENCE SUBMITTED EQUALLY ESTABLISHES THAT SUCH ESTIMATES WERE SUBJECT TO CHANGE BY THE PRESIDENT OF THE COMPANY AND THAT THE UNIT BID ESTIMATES RECOMMENDED TO THE PRESIDENT OF THE COMPANY ON VARIOUS ITEMS WERE IN FACT ALTERED BY THAT OFFICIAL. CONSEQUENTLY, THE EVIDENCE OF RECORD IS NOT SUFFICIENT TO ESTABLISH CONCLUSIVELY THE UNIT PRICE PER LINEAL FOOT WHICH WOULD HAVE BEEN ENTERED IN THE FINAL SCHEDULE OF BID ITEMS IF THE PRESIDENT OF THE COMPANY HAD NOTICED THE ERROR AND INSERTED A UNIT PRICE HE BELIEVED TO BE APPROPRIATE. IN THE ABSENCE OF EVIDENCE WHICH WOULD CONCLUSIVELY ESTABLISH THAT IT WAS HIS INTENTION TO INSERT A UNIT PRICE BID OF $2.85 PER LINEAL FOOT IN LIEU OF THE UNIT PRICE OF $100.00 PER LINEAL FOOT SUBMITTED FOR HIS APPROVAL, THE SUBSTITUTION OF THE SUGGESTED UNIT PRICE BASED ON A MATHEMATICAL COMPUTATION WHICH THE PRESIDENT OF THE COMPANY WAS NOT OBLIGED TO APPLY IN ARRIVING AT HIS CORRECTED BID WOULD BE BASED ON CONJECTURE ONLY.

ON THIS BASIS THE CONCLUSION APPEARS REQUIRED THAT THE BID OF NELLO L. TEER COMPANY SHOULD NOT BE CORRECTED. HOWEVER, IN VIEW OF THE GREAT DIFFERENCE BETWEEN THE COMPANY'S INTENDED BID PRICE AND THE OTHER BID RECEIVED, THE INTEREST OF THE GOVERNMENT WOULD APPEAR TO REQUIRE THE REJECTION OF BOTH SIDES AND READVERTISEMENT FOR NEW BIDS.