BNUMBER:  B-266344
DATE:  February 16, 1996
TITLE:  Grunley Construction Co., Inc.

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Matter of:Grunley Construction Co., Inc.

File:     B-266344

Date:     February 16, 1996

Herman M. Braude, Esq., Braude & Margulies, P.C., for the protester.
Terrence J. Tychan, Department of Health and Human Services, for the 
agency.
Jeanne W. Isrin, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

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.

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.  78.  
Correction is permitted where a bid discrepancy admits to only one 
reasonable interpretation that is ascertainable from the face of the 
bid in light of the government estimate, the range of other bids, or 
the contracting officer's logic and experience.  Roy McGinnis & Co., 
Inc., B-239710, Sept. 24, 1990, 90-2 CPD  para.  251.  On the other hand, 
where a bid is reasonably susceptible of being interpreted as offering 
either one of two prices shown on its face, only one of which is low, 
the bid must be rejected since the request for correction is 
considered as resulting in displacing a lower bid.  Virginia Beach Air 
Conditioning Corp., supra; Keister Constr., Inc., B-227027, Aug. 5, 
1987, 87-2 CPD  para.  129. 

There are two possible explanations for the discrepancy on the face of 
Modern's bid:  (1) subtotal 1 and the total aggregate amount shown are 
correct, and the base item price is erroneous, as Modern claims, or 
(2) the base item price is correct, an error was made in adding it to 
the option 1 price so that the subtotal 1 figure and therefore, the 
total aggregate amount, are incorrect.  We see nothing on the face of 
the bid which either supports or renders unreasonable either of these 
interpretations.  In this regard, both possible total aggregate 
amounts ($3,426,380 and $3,658,638) are generally within the range of 
the other bids received, so this comparison provides no basis for 
concluding that one or the other likely was not intended.  

The agency maintains that the only reasonable interpretation of 
Modern's bid was that the error lay in the base bid price and that the 
intended total aggregate amount was $3,426,380, as stated on Modern's 
bid schedule.  In the agency's view, since all the other line items 
are arithmetically correct and internally consistent, the base item 
was the only place where a mistake could have been made.  According to 
the agency, if the mistake were anywhere but in the base item, one 
would reasonably expect to find mistaken subtotals elsewhere on the 
schedule and that working backward from the aggregate listed in the 
bid, in a logical progression, shows that this is not the case.

This argument is flawed in that it is based on the unsupported 
assumption that the total aggregate amount is correct.  As discussed, 
there simply is no evidence on the face of the bid that this was the 
case.  Based on the bid itself, it is just as logical to start with 
the assumption that the stated base item price is correct, and that an 
error (e.g., faulty addition or transcription) was made in stating the 
sum of the base item and option 1 prices, resulting in an understated 
subtotal 1 price.  

The agency contends that this interpretation is "strained and 
unnatural," in that it requires one to assume that "entirely 
gratuitous and inexplicable" errors have also occurred in the two 
subtotal figures.  While we agree with the agency that it is not 
apparent how a transcription, addition or other error might have been 
made in reaching the subtotal 1 price, neither is it at all apparent 
from the bid (that is, without looking at Modern's explanation) how 
any error in the base item bid could have been made.  The agency's 
inclination to believe Modern's claim of a base item price mistake 
results solely from consideration of the firm's explanation.  Without 
that explanation, there would be absolutely no clue as to which item 
was mistaken, or as to how the mistake was made; had Modern offered 
instead an explanation as to why the subtotal 1 price was mistaken, 
that explanation could appear just as reasonable.  

The danger in these circumstances, obviously, is that only the bidder 
claiming the mistake has access to the information--except for the bid 
itself--necessary to support the mistake claim.  Allowing a bidder to 
explain its intent after bid opening thus could afford the bidder the 
option of characterizing its claimed mistake in a manner that would 
result in the displacement of the bid that otherwise would have been 
low.  While the mistake-in-bid rules are intended to permit relief to 
bidders who make genuine mistakes in their bids, the paramount concern 
of the rules is the protection of the competitive bidding system.  
Eagle Elec., B-228500, Feb. 5, 1988, 88-1 CPD  para.  116.  The preservation 
of fairness in the system precludes allowing a bidder to make such an 
election after the results of the bidding are known.  Hudgins Constr. 
Co., Inc., B-213307, Nov. 15, 1983, 83-2 CPD  para.  570.

We conclude that Modern should not have been permitted to correct its 
bid, and that award should have been made to Grunley.  Although the 
protest was filed within 10 calendar days after award, the agency 
proceeded with performance notwithstanding the protest based on its 
determination, pursuant to FAR  sec.  33.104(c)(2)(ii), that urgent and 
compelling circumstances which significantly affect the government's 
interests would not permit awaiting our decision.  The agency informs 
us that 35 percent of the work has been performed and that 50 percent 
of contract funds have been expended.  Under these circumstances, 
termination of Modern's contract and award to Grunley would not be 
practicable.  However, Grunley is entitled to reimbursement of the 
costs of filing and pursuing this protest, including reasonable 
attorneys' fees, and its bid preparation costs.       4 C.F.R.  sec.  
21.6(d)(1), (2) (1995).  Grunley should file its claim, detailing and 
certifying the time expended and cost incurred, directly with NIH 
within 60 days after receipt of this decision.  4 C.F.R.  sec.  21.6(f)(1).

The protest is sustained.

Comptroller General
of the United States