BNUMBER: B-278279
DATE: January 14, 1998
TITLE: Pueblo Enterprises, Inc., B-278279, January 14, 1998
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Matter of:Pueblo Enterprises, Inc.
File: B-278279
Date:January 14, 1998
Theodore M. Bailey, Esq., for the protester.
George N. Brezna, Esq., and Vicki E. O'Keefe, Esq., Naval Facilities
Engineering Command, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency reasonably denied the protester's request to correct its bid
where the protester's claim of a mistake was based on workpapers that
the agency reasonably found not to be in good order because they did
not show the intended bid.
DECISION
Pueblo Enterprises, Inc. protests the Department of the Navy's
decision to deny its request to correct mistakes in its bid under
invitation for bids (IFB) No. N62766-97-B-2723, issued by the Naval
Facilities Engineering Command, Marianas, Guam, for furnishing and
installing replacement doors and windows on 275 housing units.
We deny the protest.
The IFB requested a fixed price for the project work, a fixed price
for the bonds for the project, and a total price. Among the
specifications describing the work were a requirement that the empty
spaces in the walls next to certain doors and windows be filled with
concrete,[1] and a requirement for certain aluminum embossed panel
doors. Two amendments to the IFB were issued. Amendment No. 0002,
among other things, changed the bid opening date to August 5 and
specified that the embossed panel doors could be either steel or
aluminum.
Seventeen bids were submitted. The low bids were as follows:
BIDDER TOTAL PRICE
South Gulf, Inc. $2,992,000
Pueblo $3,247,668
Speegle Construction Company $3,731,000
Reliable Builders, Inc. $3,734,000
Black Construction Corporation $3,868,000
Kim Brothers Construction Corporation $3,960,000
The other bids ranged up to $4,852,357. The government estimate for
the project was $4,598,897. Pueblo submitted an initial bid in the
amount of $3,096,876 ($3,075,000 base bid plus $21,876 bond price) and
a facsimile modification adding $150,792 ($150,000 plus $792 bond
price) to this original bid.
South Gulf's low bid was rejected due to an uncorrectable mistake in
bid. Meanwhile, the Navy requested Pueblo to verify its bid since it
was significantly below the government estimate and the other bids.
Initially, Pueblo verified its bid, but following the agency's request
for a detailed written breakdown of costs, Pueblo claimed that it had
made certain mistakes in its bid price and requested an upward
correction in the amount of $160,659.83.
In support of its request, Pueblo furnished original hand-written
undated worksheets that it claimed it had utilized to formulate its
price and an affidavit by the bid preparer explaining the mistakes.
The 17 submitted worksheets consisted of (1) a takeoff sheet for the
installation of each type of door and window (14 worksheets), (2) a
worksheet totaling the results from these 14 worksheets, (3) a
worksheet showing how the original base bid of $3,075,000 was
calculated (one element of cost on this worksheet is the total from
worksheet (2) mentioned above), and (4) a worksheet showing a revised
base bid of $3,281,141 based on adjustments made after the preparation
of the $3,075,000 base bid. The affidavit certifies that all of these
worksheets were prepared prior to bid opening. Pueblo's total claim
of $160,659.83 includes its standard markup and bond costs that are
stated on its summary worksheets.
Pueblo explained that the first mistake was on the takeoff sheet
calculating the labor and material costs for installing "D1" and "D2"
(french) doors. Pueblo advised that the quantity of these doors (532)
was multiplied by $365 instead of $575, which accounted for an error
in the amount of $111,720. The worksheets reasonably support a
conclusion that this particular error was made.
Pueblo explained that the second mistake occurred when it attempted to
add an additional $37 in material and labor costs to its costs for
doing the concrete infills around certain doors and windows. Pueblo
explained that after preparing the original takeoff sheets, but prior
to bid opening, it discovered that it had neglected to add certain
additional costs required to construct the second concrete infill
around the D1 and D2 doors, and those same additional costs for
concrete infills around various window types. As evidence of this
mistake, Pueblo references certain marks at the top of applicable
takeoff sheets in a different color of ink stating "Concrete 2 Block
+37" or "Concrete +37." Pueblo advises that, as evidenced on the
revised bid worksheet, it erroneously calculated the number of
infills, to which this $37 cost adjustment was to be applied, as 805,
when the correct number of infills was 1,395 (calculated in the bid
preparer's affidavit), so that $21,460 (580 x $37) was omitted from
its intended bid.
The Navy denied Pueblo's request for correction because Pueblo did not
provide clear and convincing evidence of the existence of the second
claimed mistake or the intended total bid, although there was evidence
that Pueblo had made a mathematical error in calculating its D1/D2
installation costs. The agency found that the workpapers were
undated, contained various, sometimes unexplained, calculations, and
were not in good order. The agency particularly noted that the total
on the revised base bid worksheet showing a base bid of $3,281,141 did
not match up to the actually submitted base bid of $3,225,000, so
there was no clear and convincing evidence of the intended bid.
Pueblo protests that the Navy unreasonably denied its request for bid
correction because its worksheets and supporting affidavit constituted
clear and convincing evidence of both the mistakes and the intended
bid. With its comments on the agency report on the protest, Pueblo
submitted another undated hand-written worksheet showing how it
calculated its base bid of $3,225,000. Pueblo explains that this
worksheet considered the effect of the agency's relaxation of
specifications regarding the embossed panel doors, which this
worksheet, after some calculations, estimates at "say deduct $50,000."
According to the protester (although the worksheet does not evidence
this), the $3,281,141 base bid, as calculated on the above-mentioned
revised base bid worksheet, was rounded down to $3,275,000. The
worksheet then deducts the previously calculated $50,000 from
$3,275,000 to show the intended base bid of $3,225,000, and the
difference between this figure and the "hard bid" of $3,075,000 is
calculated at $150,000--the amount shown on the bid modification.
In order to protect the competitive bid system from abuse, the Federal
Acquisition Regulation (FAR) imposes a high standard of proof--clear
and convincing evidence--upon bidders seeking upward correction of
their bids after bid opening but before award. The bidder must submit
clear and convincing evidence that a mistake was made, the manner in
which the mistake occurred, and the intended price. FAR sec.
14.407-3(a). The exact amount of the intended bid need not be
established, provided that there is clear and convincing evidence that
the amount of the intended bid would fall within a narrow range of
uncertainty and would remain low. CRK-JVC/Shockley Joint Venture,
B-265937, Jan. 17, 1996, 96-1 CPD para. 85 at 5. Workpapers may
constitute part of that clear and convincing evidence, if they are in
good order and indicate the intended bid price, and there is no
contravening evidence. Id. An agency may not permit the correction
of a mistake asserted after bid opening, but before award, if the
bidder's evidence fails to meet the high standard of proof established
by FAR sec. 14.407-3(a), notwithstanding the good faith of the parties.
Furthermore, because the contracting agency is vested with authority
to correct mistakes, and because the weight to be given evidence in
support of a mistake is a question of fact, we will not disturb an
agency's decision concerning bid correction unless there was no
reasonable basis for the decision. Id.
We find that the agency had a reasonable basis for denying Pueblo's
request for bid correction. The workpapers that Pueblo furnished to
explain the mistakes in its bid and the intended bid were not in good
order, and did not demonstrate with clear and convincing evidence
either the second claimed error or the intended bid price.
Specifically, the significance of the notations referencing "Concrete
+37" on the tops of some of the takeoff sheets has not been
convincingly traced to a miscalculation of additional costs for
infills. While the protester now asserts how many infills were
encompassed by the $37 figure, this amount is not apparent from the
worksheets (but is only calculated in an affidavit supporting the
claim). This particular error was not one of mere arithmetic, but may
have reflected a judgmental pricing decision by Pueblo in calculating
its bid price. Id. at 6-7.
In addition, and of even greater significance is the fact that no
worksheets provided to the agency in support of the mistake claim
matched Pueblo's bid price. Moreover, the changes in prices from the
initial base bid worksheet and the revised base bid worksheet were not
explained and are not otherwise apparent. We find that the agency
could not reasonably have determined Pueblo's intended bid price based
on the worksheets that Pueblo provided to the agency.
Pueblo advises that the worksheet showing how it calculated its bid
modification, which was first submitted with its report comments, was
not previously submitted to the agency or our Office because it did
not relate to the mistakes claimed by Pueblo. We disagree, since this
worksheet purports to be the ultimate documentation for Pueblo's final
bid on the IFB. While Pueblo may have believed this document was
irrelevant to the actual mistakes, FAR sec. 14.407-3(g)(2) provides that
a request for correction of a claimed mistake in bid "shall include
all pertinent evidence such as the bidder's file copy of the bid, the
original worksheets and other data used in preparing the bid . . . and
any other evidence that establishes the existence of the error, the
manner in which it occurred, and the bid actually intended." Here,
Pueblo failed to provide a critical element, namely worksheets showing
"the bid actually intended." In the absence of such worksheets, the
Navy had a reasonable basis for finding that Pueblo had not presented
the requisite clear and convincing evidence to warrant correction of
its bid.[2]
The protest is denied.
Comptroller General
of the United States
1. These spaces are referred to as concrete infills.
2. The protester's submission of the additional undated worksheet in
its comments to our Office is largely irrelevant to the question
before us, which is whether the agency's denial of the request for bid
correction had a reasonable basis in the record before the agency at
the time. Moreover, such a tardy production of a critical document
also raises credibility concerns as well as doubts about the good
order of the workpapers.