Grunley Construction Co., Inc.

B-266344 Feb 16, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights (1) it is not clear from face of bid which of the two was intended. (2) either price reasonably could have been intended. (3) bid is low under only one of the two reasonable interpretations. Twelve bids were received by the August 24. Modern was identified as the apparent low bidder. Modern's bid schedule was as follows: Line Item Modern's bid Base Item 0001 $3. Contracting officials noted that Modern's bid schedule was not arithmetically correct: the correct sum of its base item price. Was $3. Was correct based on the stated $3. Which is higher than Grunley's bid. Modern explained that its stated subtotal 1 price was correct. Therefore also was correct. Its intended base item price was $3. View Decision Matter of: Grunley Construction Co., Inc. File: B-266344 Date: February 16, 1996 Agency improperly permitted correction of alleged mistake in bid where bidder claimed mistake in line item price rather than in total price, but (1) it is not clear from face of bid which of the two was intended; (2) either price reasonably could have been intended; and (3) bid is low under only one of the two reasonable interpretations. Attorneys DECISION Grunley Construction Co., Inc. protests the award of a contract to Modern Electric of Maryland, Ltd. under invitation for bids (IFB) No. 263-95-B-CP-0239, issued by the Department of Health and Human Services, National Institutes of Health (NIH), for construction services to install emergency generators and an uninterruptible power source (UPS) in Building 12 on the NIH campus in Bethesda, Maryland. Grunley contends that NIH improperly allowed Modern to correct a mistake in its bid. We sustain the protest. The bid schedule contained three line items: base bid item 0001, item 0002 for option 1, and item 0003 for two deductive services. The IFB provided that the low bidder would be "the responsible bidder offering the lowest aggregate price for (1) the base bid plus (2) option #1 minus (3) the deductive bid items. . . ." Twelve bids were received by the August 24, 1995 bid opening. Modern was identified as the apparent low bidder, with a total aggregate bid of $3,426,380; Grunley submitted the second low bid, $3,504,000. Modern's bid schedule was as follows: Line Item Modern's bid Base Item 0001 $3,903,495 Item 0002 Option 1 $12,243 Subtotal 1 (items 0001 + 0002) $3,683,480 Item 0003 Deduct 1 $188,019 Deduct 2 $69,081 Subtotal 2 (Deduct 1 + Deduct 2) $257,100 Total Aggregate Amount (Subtotal 1 - Subtotal 2) $3,426,380 After bid opening, contracting officials noted that Modern's bid schedule was not arithmetically correct: the correct sum of its base item price, $3,903,495, and its option 1 price, $12,243, was $3,915,738, rather than $3,683,480, the price listed for subtotal 1 on the schedule. The submitted total aggregate amount figure, $3,426,380, was correct based on the stated $3,683,480 price for subtotal 1 (i.e., $3,683,480 - $257,100 = $3,426,380). However, subtracting the deduct items from the arithmetically correct subtotal 1 price ($3,915,758 - $257,100), results in a total aggregate amount of $3,658,638, which is higher than Grunley's bid. In claiming a mistake in the base item price, Modern explained that its stated subtotal 1 price was correct, and that its low total aggregate amount, calculated using this number, therefore also was correct. According to Modern, its intended base item price was $3,671,237; the $3,903,495 base item price shown on the bid schedule was too high, and resulted from an employee's misunderstanding of a last minute telephonic change in the bid. The employee allegedly was told that 5 percent profit and 1 percent bonding costs already were included in the price, but he erroneously added those amounts to the intended $3,671,237 figure, resulting in the $3,903,495 price shown for the base item. After reviewing all the information, contracting officials allowed correction and made award to Modern. On September 29, award was made to Modern. Grunley argues that allowing correction was improper in this case because the intended bid cannot be ascertained from the bid itself--it cannot be determined from the face of the bid whether the error lies in the base bid price or in the subtotal 1 price due to incorrect addition. Since either interpretation is reasonable, and Modern's bid would not be low under the second interpretation, the agency could not properly permit correction. We agree. The Federal Acquisition Regulation (FAR) allows for correction of mistakes in bids under specified circumstances. See FAR Sec. 14.406. Where correction would result in displacing one or more lower bids, it may not be allowed unless the existence of the mistake and the bid actually intended are ascertainable substantially from the invitation and the bid itself. FAR Sec. 14.406-3(a); Virginia Beach Air Conditioning Corp., 69 Comp.Gen. 178 (1990), 90-1 CPD Para.