BNUMBER: B-278364
DATE: December 15, 1997
TITLE: Reynosa Construction, Inc., B-278364, December 15, 1997
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Matter of:Reynosa Construction, Inc.
File: B-278364
Date:December 15, 1997
Douglas Seegmiller, Esq., for the protester.
Barbara Bear, Esq., Department of the Army, for the agency.
Jennifer Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
Where correction of bid did not result in displacement of lower bid,
agency properly relied on evidence extraneous to the invitation for
bids and bid itself in determining that bidder had demonstrated, by
clear and convincing evidence, both the existence of a mistake and the
bid intended.
DECISION
Reynosa Construction, Inc. protests the decision of the U.S. Army
Corps of Engineers to allow Elkhorn Construction, L.L.C. to make an
upward correction in its low bid under invitation for bids (IFB) No.
DACA63-97-B-0059, for construction of a loading ramp and parking lot
extension at the Marine Corps Reserve Center in Amarillo, Texas.
We deny the protest.
The IFB asked bidders for a single lump-sum price for the construction
work. Four bids were received by the September 24, 1997, opening
date. Elkhorn's bid of $188,424 was lowest of the four; Reynosa's bid
of $383,000 was second low. The government estimate for the work was
$317,170.
Elkhorn's manager, Jerry Bublitz, telephoned the agency after bid
opening and was told that his company was the apparent low bidder with
a bid of $188,424. Mr. Bublitz responded that this was not his
company's bid, and immediately faxed to the agency copies of Elkhorn's
computer worksheets for this solicitation and for a second
solicitation issued by the same contracting office, IFB No.
DACA63-97-B-0021, for construction work at the Marine Corps Reserve
Center in Broken Arrow, Oklahoma, for which his company had also
submitted a bid on September 24. Mr. Bublitz explained that he had
been preparing his company's bids on the two projects simultaneously,
and that in hastening to complete the two bid schedules, he had
inadvertently entered the bid price from his working papers for IFB
No. -0021 on the bid schedule for IFB No. -0059, and the bid price
from his working papers for IFB No. -0059 on the bidding schedule for
IFB No. -0021. Mr. Bublitz was advised that if an error existed,
Elkhorn should ask either to withdraw its bid or to correct it.
Elkhorn subsequently submitted a request that it be permitted to
correct its bid amount from $188,424 to $362,670. In an affidavit
accompanying the request, Mr. Bublitz explained in greater detail how
he had interchanged the two bid schedules. Mr. Bublitz noted that,
since both IFBs required the submission of a copy of the bid with the
original, he had sent his office manager out to make copies of the bid
forms. When the office manager returned the forms to him, he had
placed the bid form pertaining to IFB No. -0059 on the bid package
pertaining to IFB No. -0021, and the bid form pertaining to IFB No.
-0021 on the bid package pertaining to IFB No. -0059. As a result, he
had entered the sum that he intended to bid for IFB No. -0059--i.e.,
$362,670--on the form pertaining to IFB No. -0021, and the sum that he
had intended to bid for IFB No. -0021--i.e., $188,424--on the form
pertaining to IFB No. -0059. The work papers submitted support Mr.
Bublitz's claim in that they show an intended bid of $188,427 for the
Broken Arrow project[1] and an intended bid of $362,670 for the
Amarillo project. The bid abstract pertaining to IFB No. -0021 also
supports Mr. Bublitz's claim in that it shows that the agency received
a bid of $362,670 from Elkhorn.
The agency determined that Elkhorn had submitted clear and convincing
evidence that a mistake had been made, the manner in which it
occurred, and of the bid actually intended. It therefore permitted
Elkhorn to correct the amount of its bid. Reynosa's protest to our
Office followed.
Reynosa first argues that the agency improperly relied on evidence
outside of Elkhorn's bid in deciding to allow correction of the bid.
In this regard, the applicable Federal Acquisition Regulation (FAR)
provision, FAR sec. 14.407-3(a), states:
If a bidder requests permission to correct a mistake and clear
and convincing evidence establishes both the existence of the
mistake and the bid actually intended, the agency head may make a
determination permitting the bidder to correct the mistake;
provided, that if this correction would result in displacing one
or more lower bids, such a determination shall not be made unless
the existence of the mistake and the bid actually intended are
ascertainable substantially from the invitation and the bid
itself.
Reynosa contends that Elkhorn displaced it as the bidder in line for
award when it was permitted to correct its bid since Elkhorn's bid, as
uncorrected, was so far out of line with the other bids and the
government estimate that the agency could not have accepted it. The
protester thus asserts, citing the final clause of FAR sec. 14.407-3(a),
that since the corrected bid could not be determined without reference
to evidence outside the bid, it was improper to allow correction.
FAR sec. 14.407-3(a) requires that the existence of a mistake and the bid
actually intended be ascertainable from the IFB and the bid itself
only where a bidder is requesting permission to make a downward
correction in its bid that would result in displacing one or more
lower bids. In other words, the FAR permits the submission of proof
outside the confines of the IFB and the bid itself where a bidder is
seeking upward correction of its bid amount. There is no suggestion
in the applicable FAR provisions that a different standard of proof is
to be applied depending on how low the mistaken bid is. On the
contrary, FAR sec. 14.407-3(g)(5), the FAR provision which addresses
rejection of very low mistaken bids, calls for rejection of such a bid
where the bidder "fails or refuses to furnish evidence in support of
[the] suspected or alleged mistake"--clearly a reference to
information outside the bid itself.
Where, as here, a bidder requests upward correction of its bid, there
must be clear and convincing evidence of the mistake and the intended
bid. FAR sec. 14.407-3(a). Whether the evidence furnished in support of
a correction meets the clear and convincing standard is a question of
fact and we will not question an agency's determination based on the
evidence unless it is unreasonable. Merrick Constr. Co., Inc.,
B-270661, Apr. 8, 1996, 96-1 CPD para. 181 at 2. In considering an upward
correction of a bid, worksheets may constitute clear and convincing
evidence if they are in good order and indicate the intended bid price
and there is no contravening evidence. Id.
Here, there was a large disparity between the awardee's bid
($188,424), and the protester's second low bid ($383,000) and the
government estimate ($317,170). This disparity, coupled with the
disparity on the other solicitation for which the awardee
simultaneously submitted a bid, reasonably indicated to the agency
that the awardee had made a mistake in its bid. The awardee's
worksheets and the affidavit from Mr. Bublitz confirmed that the
awardee had made a mistake and intended to bid $362,670 for this
project. Under these circumstances we conclude that the agency
reasonably determined that the awardee's evidence of mistake and its
intended price were clear and convincing, and thus that correction of
the bid was proper. See W.H. Hussey & Assocs., Inc., B-237207, Feb.
1, 1990, 90-1 CPD para. 137 at 3, recon. denied, B-237207.2, May 2, 1990,
90-1 CPD para. 442.
In challenging the agency's decision to allow correction here, Reynosa
argues that a review of Elkhorn's worksheets reveals that Elkhorn made
a number of errors in calculating its bid. The protester contends
that, for example, Elkhorn's allowances for meals and lodging and for
time for its job foreman, and for time for its concrete finishers and
for its laborers, are all mistakenly low, since each translates to
only about 2 months of work, whereas the contract provides for a
performance period of 150 days. Reynosa argues that if Elkhorn were
to have based its bid on a more realistic projection as to the number
of days work that would be required to complete the project, Elkhorn's
price would have been higher than its own. The protester contends
that if a contractor's worksheets show errors other than those on
which the request for correction is based, which more than account for
the difference between its bid and the next low bid, then relief for
mistake should be denied.
Assuming, for the sake of argument, that Reynosa is correct in its
allegation that Elkhorn underestimated the number of days of work that
would be required to complete this project and based its bid on that
faulty estimate, this is not the type of mistake for which correction
would be permitted under the FAR mistake-in-bid procedures. The FAR
permits correction of a mistake only where it can be demonstrated that
the bidder intended a bid other than the one submitted--that is, where
the mistake is attributable to something other than the bidder's
exercise of his own business judgment. The rule that allows bid
correction does not extend to permitting the bidder to recalculate its
bid to include factors which the bidder did not have in mind when the
bid was submitted. Thus, a bidder will not be permitted to correct
its bid if, after bid opening, it decides that it has underestimated
the number of hours that will be required to perform the job. Paul
Schmidt Constr. Co., B-204009, Aug. 5, 1981, 81-2 CPD para. 99 at 2.
Since Elkhorn could not have obtained correction of its bid on the
basis that its initial estimate regarding the number of work hours
that would be required to complete the project was faulty, we do not
think that this provides a basis upon which to question the amount of
its intended bid.
Finally, the protester alleges that Elkhorn's bid should have been
rejected because Elkhorn did not submit a revised bid bond sufficient
to cover the amount of its revised bid, as required by FAR sec.
28.101-4(c)(5).[2] The penal sum of Elkhorn's bid bond was expressed
as a percentage of its bid price--i.e., 20 percent, up to a maximum
bid amount of $500,000--and not as a specific amount. Thus, the bid
guarantee did not become inadequate as a result of Elkhorn's upward
correction of its bid.
The protest is denied.
Comptroller General
of the United States
1. The protester points out that there is a $3 discrepancy between the
amount on Elkhorn's worksheet for the Broken Arrow project and the
amount of the bid that it submitted under IFB -0059. We view the
discrepancy as de minimis.
2. FAR sec. 28.101-4(c)(5) permits the waiver of noncompliance with a
solicitation requirement for a bid guarantee where the guarantee
becomes inadequate as a result of the correction of a mistake under
FAR sec. 14.407--"but only if the bidder will increase the bid guarantee
to the level required for the corrected bid."