Holmes Mechanical, Inc., B-281417, January 13, 1999

B-281417 Jan 13, 1999 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights A firm protested a Navy contract award for fresh water piping, contending that the awardee was improperly permitted to correct a mistake in its apparent low bid. GAO held that Navy acted reasonably in permitting the upward correction of the low bid, since the worksheets submitted by the low bidder contained clear and convincing evidence of the mistake and the bid intended. Accordingly, the protest was denied. View Decision Matter of: Holmes Mechanical, Inc. File: B-281417 Date: January 13, 1999 DIGEST Attorneys DECISION Holmes Mechanical, Inc. protests the award of a contract to Nordic Construction, Inc. under invitation for bids (IFB) No. N44255-96-B-1007, issued by the Department of the Navy for the replacement of fresh water piping at the Puget Sound Naval Shipyard in Bremerton, Washington. Holmes contends that Nordic was improperly permitted to correct a mistake in its apparent low bid. We deny the protest. The IFB required a bidder to submit a lump-sum price for the work required, and to separately indicate the cost included in the price for bid, performance and payment bonds. The IFB added that the estimated cost range for the project was $250,000 to $500,000. IFB, Standard Form 1442, at 1-2. The agency received seven bids by the September 1, 1998 bid opening date. Nordic's bid of $211,040 was low, and Holmes's bid of $314,580 was next low. The other bids ranged in price from $320,673 to $698,300. The government estimate was $264,424. By letter dated September 2, the contracting officer requested that Nordic verify its bid because of the disparity between Nordic's bid and the government estimate and the other bids. Agency Report, Tab 6, Agency Oct. 14 Memorandum at 1. Nordic responded by explaining that it had mistakenly omitted the $71,852.55 in equipment costs associated with its bid, plus Nordic's standard mark-ups. Agency Report, Tab 5, Letter from Nordic to the agency at 1 (Sept. 9, 1998). Nordic explained that it used a computer spreadsheet program, which included separate columns for subcontractor, materials, labor, and equipment costs, to prepare the bid. According to Nordic, when the program calculated the total of the four columns, it failed to include the total costs set forth under the equipment column. In support of this explanation, Nordic submitted a printed copy of the spreadsheet with the error and as corrected, as well as a copy of the spreadsheet on computer diskette. /1/ Nordic also submitted other bid worksheets, including, for example, the price quote it received for materials. Nordic added that there was a second mistake in its bid, pointing out that it had erroneously entered as the lump-sum bid price its bid amount without the costs for its bonds, thus understating the lump-sum price by $3,102 in bond costs. After reviewing Nordic's worksheets, the agency concluded that there was clear and convincing evidence with regard to both of the mistakes claimed by Nordic, and therefore the correction of its bid was warranted. The agency made award to Nordic at its corrected bid price of $302,362. Holmes protests that the agency did not have adequate evidence to permit the correction of Nordic's bid. Holmes points out that, according to the worksheets, Nordic based its bid price on supplying equipment for the project for a different number of weeks than it allotted for its on-site supervision of the project; as calculated by the protester, this "inconsistency" would add an additional "$680.00 plus markups to the bid" if corrected. Comments at 3. Holmes concludes that there consequently is "a serious question regarding the nature of the mistake and the intended bid." Id. Holmes also contends that the computer spreadsheets submitted by Nordic should not have been considered by the agency because "it is possible with computer programs and spreadsheets to adjust the formula and data after bid opening." Id. An agency may permit correction of a bid where clear and convincing evidence establishes both the existence of a mistake and the bid actually intended. Federal Acquisition Regulation Sec. 14.407-3(a); Hampton Roads Mechanical Contractors, Inc., B-257908, Nov. 23, 1994, 94-2 CPD Para. 201 at 2. Work papers, including computer-generated spreadsheets, may constitute clear and convincing evidence if they are in good order and indicate the intended bid price, and there is no contravening evidence. Gulfstates Indus., Inc., B-277173.2, Oct. 15, 1997, 97-2 CPD Para. 103 at 2. Whether the evidence meets the clear and convincing standard is a question of fact, and we will not question an agency's decision based on this evidence unless it lacks a reasonable basis.