BNUMBER:  B-278359 
DATE:  January 20, 1998
TITLE: H.A. Sack Co., Inc., B-278359, January 20, 1998
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Matter of:H.A. Sack Co., Inc.

File:     B-278359

Date:January 20, 1998

Ronald J. Garber, Esq., Shapiro Fussell Wedge Smotherman & Martin, for 
the protester.
Capt. James A. Lewis, Department of the Army, for the agency.
Christina Sklarew, Esq., and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting agency reasonably allowed correction of a mistake in the 
awardee's low bid where the awardee presented clear and convincing 
evidence of the existence of the mistake and of the intended bid 
within a narrow range of uncertainty, throughout which the bid 
remained low.  

DECISION

H.A. Sack Co., Inc. protests the award of a contract to MMT 
Enterprises, Inc. under invitation for bids (IFB) No. 
DABT11-97-B-0011, issued by the Department of the Army for the 
replacement of a high temperature hot water distribution system in 
various buildings in Fort Gordon, Georgia, asserting that the Army 
improperly permitted MMT to correct a mistake in its low bid.

We deny the protest.

The IFB, issued on August 18, 1997, included three contract line item 
numbers (CLIN), one for each of three sets of buildings in which the 
high temperature hot water distribution system needed to be replaced; 
the first CLIN was listed as the base bid, while the other two were 
listed as options.  Bid, performance, and payment bonds for each CLIN 
were separately priced as subCLINs.  The Army reserved the right to 
make an award based on the base CLIN with or without either or both of 
the other two CLINs.  The IFB stated that no funds were available at 
the time the IFB was issued and that no award would be made until 
appropriated funds were available.

The Army received seven timely bids, including MMT's and Sack's.  When 
bids were opened on September 18, MMT's total aggregate bid of 
$1,853,000 was low, while Sack's bid of $2,719,942 was next low.  
Because both bids were significantly lower than the other submitted 
bids and lower than the government estimate of $3,027,280, on that 
same day the contract specialist called both bidders and requested 
that MMT and Sack review their bids and verify their prices.  Both 
bidders verified their prices, MMT on September 19 and Sack on 
September 18.  

On September 26, however, MMT notified the contracting officer that it 
had discovered a mistake in the formula contained in the Lotus 1-2-3 
electronic spreadsheets used to develop the job estimate used to 
prepare MMT's bid.  MMT explained that, when it verified its bid 
previously, it had confirmed that all of the elements of cost needed 
to develop its job estimate were listed on the spreadsheet; however, a 
subsequent, more careful review revealed that a number of cost 
elements, while listed on the spreadsheet, had not been included in 
the column total that was calculated by the job estimate spreadsheet.  
MMT now requested that it be allowed to correct its bid.  In support 
of its request, MMT submitted a computer diskette containing a 
spreadsheet file dated 9/18/97 (the date of bid opening), along with a 
printout of the spreadsheet and a statement that these were the 
original documents that had been used in preparing MMT's bid.  MMT 
also provided a new diskette and printout showing a revised 
spreadsheet file dated 9/25, reflecting the upward correction that MMT 
was requesting.

The contracting officer reviewed MMT's documentation and concluded 
that the evidence was sufficient to support the firm's claim of a 
mistake and to permit the requested upward correction to $2,239,000.  
This protest followed.

Sack argues that MMT's initial verification of its bid constitutes 
evidence which contravenes MMT's subsequent claim of a bid mistake.  
In addition, Sack contends that there is no clear and convincing 
evidence of the intended bid, because the amount of the corrected bid 
does not match the amount of the corrected spreadsheets.  The 
spreadsheets establish the job estimate upon which MMT based its bid, 
but must be converted through additional calculations to arrive at the 
intended bid amount; Sack argues that, because the end sheets showing 
these calculations were not in existence at the time of bid opening, 
they cannot provide clear and convincing evidence of the intended bid.

A bidder who seeks upward correction of its bid price prior to award 
must submit clear and convincing evidence that a mistake was made, the 
manner in which the mistake occurred, and the intended price.  Federal 
Acquisition Regulation   sec.  14.407-3(a).  Workpapers, including records 
of computer generated software spreadsheets/worksheets (hard copy 
printouts, computer disks, tapes or other software media), 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.  Merrick Constr. Co., Inc., B-270661, Apr. 8, 
1996, 96-1 CPD  para.  181 at 2.  Whether the evidence of the intended bid 
amount meets this standard is a question of fact, and we will not 
question an agency's decision in this regard unless it lacks a 
reasonable basis.  Id.  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 after correction.  Maple Constr. 
Co., Inc., B-270073, Feb. 6, 1996, 96-1 CPD  para.  43 at 2. 

Sack provides no authority to support its allegation that once a bid 
has been verified, that verification constitutes contravening evidence 
which bars any subsequent claim of mistake, and we are not aware of 
any such prohibition.  On the contrary, the fact that when MMT 
initially reviewed its bid it did so simply by ascertaining whether it 
listed all of the elements of cost that were used to develop the 
estimate--and then concluded that the bid must be accurate because it 
apparently included all of the intended totals--actually supports 
MMT's subsequent assertion regarding the nature of its mistake and the 
actually intended bid.  The mistake could only be found by re-adding 
all of the entries listed on the worksheet.  When MMT eventually did 
so, and found that the total job estimate amount that was generated by 
the program formula was mistaken because it did not reflect the sum of 
all the entries on the worksheet, it discovered that its bid was not, 
in fact, the amount that MMT had intended.  MMT's subsequently 
submitted documents (identifying the items that were inadvertently 
omitted from the computation) provide a reasonable basis for the 
agency to conclude that a mistake was made.  

The worksheets that MMT used to calculate its job estimate list the 
various materials and tasks that are required to perform the work for 
the base bid and each of the options, such as "sawcut sidewalk," 
"excavate," "concrete," and so on; each item is then followed by a 
line of figures, such as the required labor hours and pay rate, as 
well as the unit of measure, that were used to calculate the subtotal 
for each item.  The list for each CLIN includes an entry for "form 
walls"; in each case, the items and amounts listed above this item 
were left out of the total cost computation by the spreadsheet 
calculation, which applied a defective formula for which cells (items) 
should be included in this total calculation.  For the base bid, for 
example, which lists 121 items, "form walls" is the 14th entry; the 
costs listed for the preceding 13 entries were omitted from the total.  
The costs listed for these items add up to $206,052.  Similarly, for 
the first option item, 51 items are listed, from which 9 were omitted, 
resulting in a mistaken omission of $26,699 from the total; for the 
second option, 95 items are listed, from which 8 items were omitted, 
reducing that total by $97,340.  The sum of these mistakes, as they 
appear on the spreadsheet, is $330,091.  

While the mistaken total contained on the spreadsheet was $1,878,288, 
MMT's original bid was $1,853,000.  MMT explains that it calculates 
its bid prices by using 98.65 percent of the job estimate figures 
computed on its spreadsheets, and the contracting officer confirms 
that it is "a common practice in the construction trade to bid prices 
slightly reduced from offeror's job estimate to increase 
competitiveness . . . ."  When the original total is reduced in this 
manner and then is rounded up to the nearest thousand, it becomes the 
$1,853,000 that MMT submitted as its bid.  When all of the items on 
the spreadsheet are correctly added, the new overall total is 
$2,269,074.  If this is reduced to 98.65 percent, as was the original 
bid amount, it becomes $2,238,441.50, or, rounded, $2,239,000.  This 
is the corrected amount that MMT requested.[1]  As corrected, MMT's 
bid is $480,942 lower than Sack's bid.  Notwithstanding Sack's 
argument that the later calculations were never performed prior to bid 
opening, we believe that the Army had a reasonable basis to conclude 
that MMT intended to bid this amount.  The presented evidence makes 
clear that MMT believed it was submitting a total price that included 
everything that was listed on its spreadsheet and that, but for the 
spreadsheet program's omission of the certain groups of items from the 
computation of the total, MMT's bid would have been $2,239,000.  The 
omitted amounts are clearly listed on each of the spreadsheets, and 
the subsequent calculation (reducing the bid amount to 98.65 percent 
of the estimate amount and rounding that figure) is entirely 
consistent with the pricing methodology that is apparent from MMT's 
initial, mistaken price entry.[2]

The contract that the Army awarded was limited to the IFB's first two 
CLINs.  The total amount for CLINs 0001 and 0002 was calculated to be 
$1,432,960.  While Sack objects that the endsheet calculations upon 
which the award amount is based did not exist at the time bids were 
submitted, and that the intended bid amount therefore cannot be 
ascertained with sufficient certainty to permit correction, we 
disagree.  As long as the calculations required to produce the 
corrected award amount are consistent with the methodology that MMT 
employed in its original bid and the intended bid amount is thus 
ascertainable within a narrow range of uncertainty, correction based 
upon those calculations is permissible.[3]

Under these circumstances, the agency's decision to permit MMT to 
correct its bid was reasonable.

The protest is denied.

Comptroller General
of the United States 

1. While MMT initially requested correction of its bid to $2,269,074, 
which is simply the sum of all of the items on the spreadsheet, it 
later amended this request to $2,239,000, to reflect the same 
adjustments that were made to its original bid, i.e., reduction to 
98.65 percent of the estimate, and rounding.

2. See Utah Constr. and Dev. Co., B-222314, June 10, 1986, 86-1 CPD  para.  
541 at 4 n.3 (where bidder had rounded an element of its original bid, 
the same rounding should be used in calculating its corrected bid).  

3. When the award amount was calculated to reflect only the first two 
CLINs, an  apportionment formula was applied in order to ensure that 
the bond costs for each CLIN were accurately allocated.  While this 
precise formula is not directly ascertainable from MMT's worksheets, 
it results in a bid amount ($1,432,960) that is not meaningfully 
different from the sum of the corrected figures on the spreadsheets 
for the two CLINs, which, when reduced to 98.65 percent and rounded, 
as discussed above, is $1,430,000.  Thus, even without engaging in 
MMT's calculations to apportion its bond costs, the intended bid for 
the awarded CLINs can be determined within a narrow range of 
uncertainty of $2,960 (i.e., the difference between $1,432,960 and 
$1,430,000).  Based on a comparison of total bids, MMT's bid is 
clearly low no matter which figure in this range is used; based on 
only the CLINs for which the contract was awarded, MMT's corrected bid 
remains approximately $300,000 lower than Sack's bid.