BNUMBER: B-279521
DATE: June 23, 1998
TITLE: Asbestos Control Management, Inc., B-279521, June 23, 1998
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Matter of:Asbestos Control Management, Inc.
File: B-279521
Date: June 23, 1998
Edward W. Brady, Esq., Miles & Stockbridge, for the protester.
William M. Huddles, Esq., Huddles & Jones, for Philips Way, Inc., an
intervenor.
Charles D. Raymond, Esq., and Ruurd C. Segaar, Esq., Department of
Labor, for the agency.
Jacqueline Maeder, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency reasonably denied request for bid correction where, after
initially confirming its bid, the protester subsequently sought
correction based on worksheets which contained discrepancies and
inconsistencies, as a result of which the agency reasonably concluded
that the worksheets did not provide clear and convincing evidence of
the intended bid.
DECISION
Asbestos Control Management, Inc. (ACMI) protests the Department of
Labor's (DOL) denial of ACMI's request to correct a mistake in its low
bid under invitation for bids (IFB) No. 97-DAA-51-JC for the
installation of a new heating and air-conditioning system, electrical
upgrades, demolition, and asbestos removal at the Woodstock Jobs Corps
Center in Woodstock, Maryland.
We deny the protest.
The bid mistake concerns the base bid item covering the project, for
which the IFB required only a single lump-sum entry. The protester
submitted the lowest of 10 bids received by the December 16, 1997 bid
opening. The lowest two bids and the government estimate are as
follows:
Base Bid
ACMI $2,410,000
Philips Way, Inc. $3,130,000
Government Estimate $3,902,760
On December 18, the agency requested ACMI to provide a detailed bid
breakdown. The following day, the agency requested that ACMI confirm
its bid and reiterated its request for a bid breakdown. By letter
dated December 22, ACMI confirmed its bid and provided the agency with
bid breakdown information. ACMI's bid breakdown included $315,000 for
automatic temperature controls, $294,000 for electrical work, $34,600
for testing and balancing, $100,000 for asbestos abatement, $150,000
for sheet metal and $175,000 for insulation.[1]
Because of the disparity between ACMI's bid and both the government
estimate and the other bids, on January 30, 1998, the contracting
officer asked ACMI to review its bid for the possibility of a mistake.
On February 5, ACMI retracted its confirmation and informed DOL that
its bid contained a mistake. ACMI claimed that its bid was
understated by $623,480, consisting of mistakenly excluded prices of
$393,140 for electrical work, $1,610 for hardware and doors, $109,600
for asbestos removal, $3,500 for chemical water treatment, $10,440 for
frequency drives, $34,395 for cooling towers, $14,115 for heat
exchangers and $56,680 for overhead. ACMI stated that it had intended
to include these amounts in its bid, but that they had been omitted as
the result of a computer error arising from ACMI's use of a new
computer networking system. The requested correction would make
ACMI's bid $3,013,261, which is approximately 4 percent lower than the
next low bid.
To support its mistake claim, ACMI provided DOL with worksheets and
other back-up data used to prepare its bid, including
computer-generated estimate and spreadsheet printouts, its in-house
costs, and its subcontractors quotation sheets for services to be
performed under the solicitation. In addition, ACMI included a letter
from its computer supplier attesting to incompatibility problems
experienced with ACMI's software which can cause problems in
spreadsheet applications, and an affidavit in which ACMI's vice
president explained the mistake and the intended bid. ACMI's actually
submitted bid of $2,410,000 did not appear on any of the submitted
spreadsheets. The subtotals on ACMI's allegedly original incorrect
spreadsheet total to $1,634,710.10 and a "total estimate" amount of
$2,386,293 appears on the estimate printout. According to the
protester, this $2,386,293 represents its "hard cost" amount which was
"jumped" to the $2,410,000 bid on bid day. The seven excluded
quotations in question consist of five quotations from three different
subcontractors and two in-house quotations (plus overhead). The
subcontractors' quotation sheets are dated before bid opening and each
sheet clearly reflects subcontractor price quotes. However, ACMI's
$109,600 quotation for asbestos abatement is dated February 11, 1998
(after bid opening), and its $3,500 quotation for chemical water
treatment has no supporting documentation.
ACMI explained that its error resulted from the use of its estimating
software system in combination with the computerized spreadsheet.
ACMI prepares a tally or "bid prep" sheet using a computerized
spreadsheet for supplier and subcontractor costs and a total bid using
its estimating software. ACMI calculates its bid by adding the bid
prep spreadsheet results to the numbers in the estimating software
program, which then combines these totals with ACMI's in-house costs.
The bid prep spreadsheet has five columns across the page: the
specification section, the service to be performed, the subcontractor
to perform the service, the base cost and the total cost. ACMI stated
that it entered all the necessary supplier and subcontractor pricing
onto the spreadsheet, but the seven prices noted above did not carry
over from the base cost column to the total cost column because "some
simple math formulas were not in place . . . ." As a result, these
seven prices were listed as $0 in the total cost column and were not
carried over to the estimating software program, and therefore not
included in the computation of ACMI's total bid.[2] ACMI tendered an
undated spreadsheet as its original worksheet, which shows the
following information for these seven items and for other relevant
items in the same spreadsheet section:[3]
Spec Section Serv./Supply Base Cost Total Cost
02515 Pavement $17,000 $17,000
07217 Insulation $19,031 $19,031
15972 Controls $315,000 $315,000
15990 Test/bal $34,560 $34,560
16000 Electrical $393,140 $0
80210-08710 Doors & Hardware $1,610 $0
13281 Asbestos $109,600 $0
15545 Water Treatment $3,500 $015543Frequency
Drives $10,440 $0
15640 Cooling Towers $34,395 $0
15755 Heat Exchangers $14,115 $0
As indicated, only the costs for seven items were not carried over
from the base cost to the total cost column. All other costs entered
under base cost on the spreadsheet, such as $315,000 for controls and
$19,031 for insulation, were carried over to the total cost column.
Therefore, $566,800 of costs plus $56,680 of overhead[4] for a total
of $623,480 were not included in the bid calculation.
After reviewing the information provided by ACMI to support its claim
of a mistake in bid, DOL determined that ACMI had not submitted clear
and convincing evidence of its intended bid. The agency noted that
there was no consistency in the amounts that were carried and the
amounts that were not carried from the base cost column to the total
cost column on the spreadsheet, suggesting some sort of operator error
from the input of incorrect mathematical functions or formulas, and
not an incompatibility problem as ACMI maintained. More importantly,
DOL found that ACMI's lump-sum breakdowns, provided to DOL in its
December 22, 1997 bid confirmation included "significant items of cost
that were revised substantially in ACMI's later request for
correction." For example, DOL found that ACMI's worksheets show a
price of $258,360 for mechanical/insulation and a price of $393,140
for electrical work; yet, the December bid breakdown information puts
insulation at $175,000 and electrical at $294,000. DOL believed that
ACMI should have been able to supply more accurate bid breakdown
information in December, in spite of its misfiled spreadsheet, since
these costs were either in-house costs or quotations from
subcontractors for which ACMI had quotation sheets.
DOL also found that, according to information on ACMI's spreadsheet,
overhead and profit were to be calculated as 10 percent of "the entire
job," yet the supporting documentation for ACMI's in-house
mechanical/insulation costs are inconsistent and list a 15-percent
markup for overhead and a 10-percent markup for profit. In addition,
the agency was troubled by the February 1998 dates on some of ACMI's
supporting documentation. For example, supporting documentation for
ACMI's in-house insulation costs consists of seven pages. While the
first page is dated December 16, 1997, before bid opening, the other
six pages are dated February 11, 1998, after the December bid opening
date. Similarly, ACMI's supporting documentation for its $109,600
in-house costs for asbestos abatement is dated February 11, 1998.
Finally, the agency was troubled about ACMI's delay in reporting the
alleged mistake, in conjunction with the fact that the critical bid
prep spreadsheet which the protester was initially unable to locate is
undated. Based on these uncertainties as to ACMI's intended bid, DOL
did not permit correction and instead rejected ACMI's bid and
subsequently awarded the contract to Philips Way. This protest
followed.
ACMI alleges that DOL unreasonably denied its request for bid
correction of an upward adjustment of its bid in the amount of
$623,480, which corresponds to the total of the seven figures that
were not carried over from the base cost column to the total cost
column on ACMI's original spreadsheet plus ACMI's standard 10-percent
markup for these items.
A bidder's request for upward correction of a bid before award may be
granted only where the request is supported by clear and convincing
evidence of both the mistake and the intended bid. Federal
Acquisition Regulation sec. 14.407-3(a); Strand Hunt Constr., Inc.,
B-261808, 95-2 CPD para. 193 at 3. For upward correction of a low bid,
worksheets, including records of computer-generated software
spreadsheets/worksheets, may constitute clear and convincing evidence
if they are in good order and indicate the intended price, and there
is no contravening evidence. CRK-JVC/Shockley Joint Venture,
B-265937, Jan. 17, 1996, 96-1 CPD para. 85 at 5. Whether the evidence
meets the clear and convincing standard is a question of fact, and we
will not question an agency's decision unless it lacks a reasonable
basis. M.A. Mortenson Co., B-256636, July 14, 1994, 94-2 CPD para. 22 at
3. However, the closer an intended bid comes to the next low bid, the
more difficult it is to establish the amount of the intended bid, and
the more closely we will scrutinize the claim of mistake. RJS
Constructors, B-257457, Oct. 7, 1994, 94-2 CPD para. 130 at 3; Vrooman
Constructors, Inc., B-226965.2, June 17, 1987, 87-1 CPD para. 606 at 3.
Here, the agency determined that the protester had not clearly and
convincingly established that its base bid mistakenly omitted the
costs indicated for the seven items that were not carried over on the
proffered Lotus spreadsheet, or what the intended bid would have been.
The record reflects that DOL weighed the protester's evidence and
discovered various ambiguities and inconsistencies that, in the
agency's view, raised a question as to whether the documents were in
good order, and thereby precluded bid correction. Based on our review
of the record, particularly in light of the closeness of the corrected
bid to the next low bid, the agency had a reasonable basis to conclude
that the protester's evidence was not in good order and therefore was
less than clear and convincing.
First, ACMI's work papers are not in good order for purposes of
supporting its request for correction. As noted above, the critical
spreadsheets provided by ACMI to support its mistake claim are not
dated. Similarly, ACMI's in-house $109,600 quotation for asbestos
abatement is dated February 11, after bid opening. While ACMI
explains that the February date appears on this quotation because the
protester had to reprint the quotation, we do not find this argument
compelling. A comparison of this quotation sheet and the spreadsheet
reveals there are no inconsistencies between the price quoted for the
asbestos abatement. However, absent the benefit of advice from the
bidder, there is no way to determine when this quotation was prepared,
since the quotation sheet itself is dated after bid opening and the
spreadsheet is undated. Thus, absent the self-serving explanation and
statements in the affidavit, this supporting documentation does not
establish that this $109,600 quotation was prepared prior to bid
opening or that this quotation was actually used to prepare ACMI's
bid. ACMI also has no supporting documentation for its $3,500
quotation for chemical water treatment. In short, the supporting
documentation is ambiguous both as to when and how it was prepared and
as to the intended bid and thus cannot support correction. The
weakness in the supporting documentation is particularly significant
here because the correction requested by ACMI would bring its bid to
within $116,739 of the next low bid.
Next, the computer printouts provided by ACMI do not consistently or
conclusively point to any particular intended bid. Neither of ACMI's
original computer printouts reflected ACMI's actual base bid of
$2,410,000. Moreover, ACMI's alleged $623,480 error, when added to
either its alleged incorrect $2,386,293 "total estimate" from its
original estimating software printout or to its "jumped" bid of
$2,410,000 does not total its alleged intended bid of $3,013,261.[5]
ACMI does not explain this discrepancy.[6]
Finally, the agency was reasonably concerned with ACMI's delay in
finding the alleged error, especially where, as here, the protester
originally claimed in its December confirmation that it had reviewed
the bid submitted and found "no errors or omissions in the bid" and
waived "any and all claims of a bid mistake after award of the
contract." While ACMI suggests that it often bids lower than other
bidders and thus its low bid in this instance did not cause alarm, we
believe that the protester should have been alerted to the significant
discrepancy between its bid and the other bids. Yet ACMI inexplicably
did not thoroughly examine its bid, even after DOL requested
verification and a bid breakdown, until approximately 7 weeks after
bid opening when the agency specifically asked if ACMI had made a
mistake in its bid. By that time, DOL questioned the reliability of
the late-discovered spreadsheet used to support the claimed intended
bid. The tardy production of a crucial work sheet document is
reasonably viewed as raising credibility concerns and doubts about the
good order of the work papers. Pueblo Enters., Inc., B-278279, Jan.
14, 1998, 98-1 CPD para. 15 n. 2 at 5.
The protest is denied.
Comptroller General
of the United States
1. According to the protester, the bid breakdown information submitted
to the agency in December provided only "ballpark" estimates because
ACMI was unable to find its computerized spreadsheet which contained
subcontractors', suppliers' and in-house costs. ACMI explains that it
later realized that the spreadsheet had been mistakenly filed under a
different solicitation on which the protester had also bid.
2. ACMI states that it did not find the spreadsheet error when the
agency first requested a bid verification because, as noted above, its
spreadsheet was improperly filed under another solicitation on which
the protester bid.
3. We have deleted the column identifying subcontractors as
irrelevant. In addition, other line items on the spreadsheet are not
listed here because their costs were included in other costs and not
separately priced.
4. The overhead was calculated as a percentage of the costs for the
work required.
5. The $623,480 error and ACMI's alleged incorrect $2,386,293 bid
total $3,009,773; the $623,480 error and the "jumped" bid of
$2,410,000 total $3,033,480.
6. A bidder may obtain correction where the intended bid cannot be
determined exactly, provided there is clear and convincing evidence
that the bid would remain low after correction and the amount of the
intended bid falls within a narrow range of uncertainty that is
significantly below the next low bid. 4-S Constr., Inc., B-248090,
June 16, 1992, 92-1 CPD para. 523 at 5. However, ACMI's bid does not
qualify for correction under this standard because ACMI's work papers
are not in good order.