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.