BNUMBER:  B-279896 
DATE:  July 29, 1998
TITLE: Circle, Inc., B-279896, July 29, 1998
**********************************************************************

DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective 
Order.  This redacted version has been approved for public release.
Matter of:Circle, Inc.

File:     B-279896

Date:July 29, 1998

Patricia M. Crowley, Esq., Simon, Peragine, Smith & Redfearn, for the 
protester.
S. Leo Arnold, Esq., Ashley, Ashley & Arnold, for Souter Construction 
Co., an intervenor.
Karen Da Ponte, Esq., and Lester Edelman, Esq., Department of the 
Army, for the agency.
Marie Penny Ahearn, Esq., and John M. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that agency improperly denied firm's request for upward 
correction of mistaken bid is denied where agency reasonably found 
that discrepancies in the worksheets, as well as other evidence 
provided, did not establish intended bid.

DECISION

Circle, Inc. protests the denial of its request for upward correction 
of its low bid under invitation for bids (IFB) No. DACW29-98-B-0021, 
issued by the United States Army Corps of Engineers for construction 
of a railroad bridge and associated work involved in flood control in 
St. Charles Parish, Louisiana. 

We deny the protest.

Circle submitted the low bid of $5,793,966.  Agency Report (Rpt.) 
Exhibit (Exh.) 3. Souter Construction Company submitted the second low 
bid of $6,846,330.  Id.  By letter dated January 26, 1998, the 
contracting officer notified Circle that the firm's bid was "lower 
than the Government Estimate (without profit) of $5,927,169.68 and 
[was] considerably lower than that of the other bids received."  Rpt. 
Exh. 12.  The letter requested that Circle "review [its] bid and 
specifications to ensure you understand what is required," with 
"[p]articular attention . . . called to [line] item [No.] 0019," for 
removal of a railroad detour.  Circle bid "-0-" for that item.  Id.

Circle responded by notarized letter of January 28 from its president 
that the firm had made mistakes in a number of bid items, and 
requested an upward correction in the amount of $677,997.60 (from 
$5,793,966 to $6,471,963.60).  Rpt. Exh. 5.  The firm claimed that 
labor and material costs had been omitted in line item No. 0019 and 
that a formula error in the markup of subcontractor bids occurred in 
line item Nos. 0009-0013, 0017-0018, and 0025-0027 with the use of 
[deleted] percent instead of [deleted] percent.  Id.  Additionally, 
the firm claimed that in line item No. 0003, the cost of a crane was 
included in only one work shift rather than two, as intended, and that 
standby time for the crane had been inadvertently omitted.  Circle 
enclosed with its letter 35 bid preparation worksheets, one for each 
line item; spreadsheets for the original bid and alleged intended bid; 
and several subcontractor quotes.  Id.  The firm did not submit any 
sworn affidavits from employees who prepared the worksheets or bid 
form.   

After reviewing Circle's submission, the agency concluded that, 
although the firm provided reasonable evidence to show that a mistake 
had been made in line item No. 0003,[1] the submitted worksheets and 
notarized letter did not clearly and convincingly show mistakes or the 
intended prices on the other line items, based on discrepancies and 
inconsistencies among the bid preparation documents.[2]  Rpt. Exh. 5 
at 7.  Consequently, the agency concluded there was insufficient proof 
of the alleged intended bid to justify correction.  Id.

By letter dated April 14, the agency informed Circle that the firm 
would not be permitted to correct its bid, but would be allowed to 
withdraw it.  Rpt. Exh. 4.    The agency submitted to Circle a 
detailed written analysis of the basis for denying correction on each 
line item and listed the most notable factors militating against 
correction as follows:

     [1.]  The worksheet for Bid Item 19 contains some costs for labor
     and materials, but it is not clear that Circle ever intended to 
     bid this item as anything other than a no cost bid.  The 
     worksheet does not reflect all the subcontractor credits which 
     may be realized, and it is not clear why a $93,000 credit was 
     used, rather than one or more of the credits proposed in the 
     subcontractor quotes.

     [2.]  [The] [w]orksheet . . . for Bid Item No. 3, contains 
     markings added after bid opening, which detract from its 
     credibility.  The worksheet clearly called for one 10-hour shift 
     . . . and did not call for standby time.

     [3.]  No original calculations were furnished showing how markups 
     were applied to the bid items where markup errors are alleged, 
     and there is no pre-bid evidence showing the intended markup for 
     "subcontractor" items.  Our own calculations of markups generally 
     do not support either the alleged mistakes or the intended bid.  
     Many of the so-called "subcontractor" bid items appear to be 
     contractor performed items.

     [4.]  In general, the bid documents are not easy to follow or 
     understand.  Also, Circle's letter requesting correction of the 
     alleged mistakes does not adequately explain how the 
     subcontractor quotations were used in preparing the bid.

                   .     .     .     .     .  

     [5.]  Circle's submission does not meet all of [the Army Corps of 
     Engineers Federal Acquisition Regulation Supplement (EFARS)  sec.  
     14.407-3(g)(S-100)] requirements [for sworn affidavits as to the 
     mistake and the authenticity of the working papers used to 
     compute the bid].  The only affidavit submitted is the notarized 
     letter signed by [Circle's president].  There is no information 
     on who prepared the worksheets or the bid.  

Rpt. Exh. 5 at 6.  
  
By letter dated April 24, Circle requested that the Army reconsider 
its decision and enclosed new documentary evidence, including a 
spreadsheet, a subcontractor quote for a number of line items, and 
three sworn affidavits.  Rpt. Exh. 6.  On the same day, Circle filed 
this protest with our Office.  Rpt. Exh. 1. 

A low bidder's request for upward correction of its 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 (FAR)  sec.  14.407-3(a).  Whether the evidence 
meets the clear and convincing standard is a question of fact, and our 
Office will not question an agency's decision unless it lacks a 
reasonable basis.  Apache Enters., Inc., B-255943, B-255943.2, Apr. 
20, 1994, 94-1 CPD  para.  270 at 5.         

The Army's decision to disallow correction was reasonable.  In its 
report on the protest, the agency has provided a detailed explanation 
as to precisely why correction of the bid is not warranted.  In its 
comments on the report, Circle has failed to rebut the agency's 
determination with regard to any of the specific line items.  We have 
reviewed the report, as well as the information submitted by Circle, 
and agree with the Army's analysis--even ignoring the question of 
whether there is sufficient evidence to support the existence of the 
numerous alleged mistakes, the worksheets and other evidence generally 
do not contain clear and convincing evidence as to the intended prices 
for the items in question, such that correction would be warranted. 

For example, regarding Circle's alleged mistake in markup (which 
affected 10 of the 12 allegedly mistaken line items), the agency not 
only found no evidence supporting Circle's contention that it had 
mistakenly applied a [deleted]-percent rather than a [deleted]-percent 
markup to subcontractor costs, but found that the worksheets contained 
amounts that were inconsistent with amounts stated elsewhere.[3]  Rpt. 
Exh. 5.  As a specific example, for line item No. 0025, a lump-sum 
item for precast concrete girders, Circle's worksheet entry showed a 
direct cost of [deleted], but a subcontractor quote, submitted with 
the firm's correction request, showed a price of [deleted] and yet 
another subcontractor quote submitted with the firm's agency 
reconsideration request, showed a price of [deleted] for the item.[4]  
Rpt. Exh. 5 and Reconsideration Request, dated April 24, 1998 (as 
submitted for record by Circle).  More importantly, while the total 
bid amount for this item was [deleted]--which is [deleted] percent 
greater than the [deleted] subcontractor quote--the agency found, and 
our review has confirmed, that there is no evidence in the worksheets, 
or other contemporaneous documentation, that Circle actually intended 
a [deleted]-percent rate (or, for that matter, any rate other than 
[deleted] percent) at the time it prepared its bid.  Although Circle 
explained in an affidavit (submitted for the first time in connection 
with the agency reconsideration request) that the mistake resulted 
from a misunderstanding by clerical staff--instead of [deleted] the 
standard [deleted]-percent markup by [deleted]-percent for 
subcontractor items and applying a [deleted]-percent rate, as 
allegedly directed, they applied a [deleted]-percent rate--this 
explanation was not supported by any worksheet entries, or even by 
affidavits from the clerical staff involved.  Rpt. Exh. 6, Hines 
Affidavit at 4.  There is nothing unreasonable in an agency's refusal 
to accept uncorroborated, self-serving statements as the basis for 
permitting an upward correction.  Thus, the agency properly concluded 
that there was no clear and convincing evidence that Circle intended 
to apply a markup greater than [deleted] percent.

In its comments on the agency's report--which, again, do not address 
any of the agency's specific explanations--Circle focuses on the 
agency's reference to Circle's failure to submit sworn affidavits as a 
reason for denying the correction.  Comments at 2, 3. However, as 
discussed, the agency ultimately considered Circle's later-furnished 
affidavits, and found that they were not sufficient to overcome the 
other evidentiary deficiencies.  It is clear from the record, 
moreover, that even the Army's original determination principally was 
based, not on the lack of affidavits, but on the insufficiency of the 
evidence as a whole.[5]  

Finally, contrary to the protester's additional contention, the 
circumstances of this case do not present a narrow range of 
uncertainty regarding the intended bid under which correction would be 
permissible, because Circle has failed to establish any intended bid, 
even within such a range.  Cf. ACS Constr. Co., Inc. of Miss., 
B-257775, Nov. 9, 1994, 94-2 CPD  para.  179 (where the agency determined 
that clear and convincing evidence established the existence of a 
mistake, the intended bid price with a narrow range of uncertainty, 
and the corrected bid remained low as corrected). 

The protest is denied.

Comptroller General
of the United States
 
1. On line item No. 0003, the agency determined that it was reasonable 
to assume that Circle's calculations based on one 10-hour shift rather 
than two 8-hour shifts per day was a mistake, because it was not 
likely that the job could be completed using one 10-hour shift.  Rpt. 
Exh. 5 at 4.  It further determined, however, that the evidence Circle 
submitted for this line item--a worksheet which contained notations 
added after bid opening--did not constitute original evidence of an 
otherwise intended bid, and thus was insufficient to establish 
Circle's intended bid.  Rpt. Exh. 5 at 7.

2. Generally, in this regard, the agency determined that the figures 
in the bid preparation worksheets did not correlate with the alleged 
mistaken line items in the intended bid spreadsheet, the worksheets 
contained no explanation for the difference between the figures in the 
bid total column of the intended bid spreadsheet and those in the 
original bid spreadsheet, and there was no evidence submitted such as 
employee affidavits to establish the alleged mistakes that caused the 
original bid to be submitted.  Rpt. Exh. 5.  

3. Indeed, the agency was able to confirm the use of a 
[deleted]-percent markup for only 2 of the 10 line items (Nos. 0017 
and 0018).  Even for these items, however, the agency found no 
evidence that the [deleted]-percent markup was applied by mistake, or 
that the firm intended to apply some other rate.  Rpt. Exh. 5 at 3.

4. Circle's request for correction also included an "abstract of bids" 
computer spreadsheet, which listed 10 bids from subcontractors for 
line item No. 25 ranging from [deleted] to [deleted].  Rpt. Exh. 5. 

5. The protester also has failed to rebut the agency's further 
position that the firm's later-submitted documents are largely 
irrelevant to the question before our Office, 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, and that a tardy 
production of a critical document raises credibility concerns as well 
as doubts about the good order of the workpapers.  See Pueblo Enters. 
Inc., B-278279, Jan. 14, 1998, 98-1 CPD  para.  15 at 5 n.2.