TITLE:  Gulf-Atlantic Constructors, Inc., B-289032, January 4, 2002
BNUMBER:  B-289032
DATE:  January 4, 2002
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Decision

Matter of: Gulf-Atlantic Constructors, Inc.

File: B-289032

Date: January 4, 2002

William D. Coleman, Esq., Capell & Howard, for the protester.

Karl Dix, Jr., Esq., and Blair A. Andrews, Esq., Smith, Currie & Hancock,
for Advance Construction Services, Inc., an intervenor.

Edward T. Goldstein, Esq., and Joseph A. Gonzales, Esq., Army Corps of
Engineers, for the agency.

Christine S. Melody, Esq., Office of the General Counsel, GAO, participated
in the preparation of the decision.

DIGEST

Protest challenging agency's decision to allow awardee to upwardly correct
its low bid is denied where it was not unreasonable for the agency to
conclude that the awardee had presented clear and convincing evidence of the
claimed mistake and the intended bid.

DECISION

Gulf-Atlantic Constructors, Inc. protests the award of a contract to Advance
Construction Services, Inc. under invitation for bids (IFB) No.
DACA01-01-B-0003, issued by the U.S. Army Engineer District, Mobile,
Alabama, to upgrade road access at Hurlburt Field Air Force Base, in
Florida. Gulf-Atlantic argues that the Army improperly permitted Advance to
make an upward correction of its apparent low bid.

We deny the protest.

The Army issued the IFB on May 14, 2001, contemplating the award of a
fixed-price contract for the required services. Bidders were required to
submit unit prices for each of nine contract line item numbers (CLIN) (the
base bid) and a subtotal base bid amount; unit and subtotal prices for each
of three option items; and a grand total price. Agency Report (AR) exh. 4.G,
IFB Schedule.

Four firms, including the protester and the awardee, submitted bids by the
time set on August 14, 2001. Total bid prices ranged from $5,163,920 to
$8,695,227; Advance submitted the apparent low bid, and Gulf-Atlantic's bid
was second low. The following table shows the prices Advance and
Gulf-Atlantic submitted and the independent government estimate (IGE):

 CLIN      Advance      Gulf-Atlantic  IGE

 1         $2,445,000   $2,591,645     $2,523,032

 2         28,000       21,200         26,312

 3         45,000       39,660         49,207

 4         45,000       52,720         48,534

 5         825,000      1,025,550      1,184,414

 6         65,000       8,600          6,266

 7         400,000      240,885        143,257

 8         145,000      62,000         263,990

 9         15,000       15,490         11,047

 Subtotal  $4,113,000   $4,057,750     $4,256,059

 Option 1

 10        $375,000     $1,528,890     $1,112,441

 11        36,000       28,800         33,213

 Subtotal  $411,000     $1,557,690     $1,145,654

 Option 2

 12        533,920      $1,743,405     $1,586,209

 13        18,000       10,735         13,019

 Subtotal  $551,920     $1,754,140     $1,599,228

 Option 3

 14        175,000      281,765        213,453

 15        13,000       6,365          48,534

 Subtotal  $188,000     $288,130       $ 261,987

 Options   $1,150,920   $3,599,960     $3,006,869
 Subtotal

 Grand     $5,163,920   $7,657,710     $7,262,928
 Total

AR exh. E, Bid Abstract; U.S. Army Corps of Engineers, Mobile District
Webpage at http://www.sam.usace.army.mil.

The contracting officer (CO) suspected a mistake in Advance's bid. In
particular, the CO noted that there was an apparent calculation error in
Advance's base bid subtotal: when added correctly, CLINs 1-9 totaled
$4,013,000, rather than $4,113,000, as Advance had entered as its base bid
subtotal. Pursuant to Federal Acquisition Regulation (FAR) sect. 14.407, the
Army requested that Advance verify all line items and its total bid amount.
AR exh. F, Letter To Advance from Mobile District Chief, Arch.-Eng'g (A-E) &
Constr. Branch, Aug. 16, 2001. In that letter, the Army noted that Advance's
total bid was more than 20 percent below the government's estimate, and
significantly lower than Gulf-Atlantic's second-low bid ($7,657,710) and the
third-low bid ($7,948,000).

In response to the Army's verification request, Advance claimed that it had
made a mistake in its bid, explaining as follows:

The wrong numbers were read from a printed spreadsheet when Bid Item Nos.
10, 12, and 14 were written on the face of the bidding schedule included
with our bid. A spreadsheet workpaper was used which only included the
pricing for the subcontractors and suppliers for those items. Those
workpapers were mistakenly used rather than the workpapers that contained
the total price for those line items and which were included in the
spreadsheet.

AR exh. D, Advance Letter to Chief, A-E Constr. Branch, Aug. 17, 2001, at 1.

In support of its request for correction, Advance submitted affidavits from
Advance's Project Manager (PM), who was responsible for estimating Advance's
bid, and from Advance's Office Manager (OM). Advance also provided copies of
eight separate Microsoft/Excel spreadsheets containing the calculations and
the subtotal price for the base bid (spreadsheet No. 1); the calculations
and subtotal prices for CLINs 10, 12, and 14 for the three option items
(spreadsheet Nos. 2, 3, and 4); and the calculations and subtotal material
supplier and subcontractor prices for the base bid and the three options
(spreadsheet Nos. 5, 6, 7, and 8).

Advance also provided a revised bid schedule with its corrected prices. With
respect to the base bid, Advance added $50,000 to each of CLINs 1 and 5, for
a base bid subtotal increase of $100,000, making its total base bid add up
to $4,113,000--the amount Advance had written in the space provided in the
schedule for the base bid subtotal. Advance also submitted revised prices of
$1,131,924.91 for CLIN 10; $1,094,447.01 for CLIN 12; and $412,669.04 for
CLIN 14, for an increase of $1,555,120.96 to the option items, making
Advance's revised option price subtotal $2,639,040.96, and raising Advance's
grand total bid to $6,819,040.00.

The Army reviewed Advance's correction request and determined that Advance's
calculation error with respect to its base bid subtotal was not de minimis.
In this connection, the Army found that Advance had provided no explanation
for the $100,000 discrepancy in its base bid subtotal. Instead, in its
revised bid schedule, Advance simply increased CLINs 1 and 5 by $50,000
each, without providing any explanation. With respect to the base bid
subtotal, the Army concluded that it was clear from totaling CLINs 1-9 that
the correct subtotal for Advance's base bid was $4,013,000 (i.e., not
including the additional $100,000 Advance submitted in its corrected bid
schedule), and disallowed the upward adjustment to Advance's subtotal base
bid. [1]

With respect to Advance's request for upward correction of CLINs 10, 12, and
14, the Army found that the documents Advance submitted with its correction
request evidenced that Advance had made mistakes in preparing its bid, and
the manner in which the mistakes occurred. Division Engineer Decision, Sept.
7, 2001. Accordingly, the Army informed Advance that it would be allowed to
correct its bid upward to $6,719,040.96 (i.e., without the $100,000 upward
adjustment to Advance's base bid price), or the firm could withdraw its bid.
By letter dated September 12, Advance accepted award at the allowed
corrected price. This protest to our Office followed.

A bidder who seeks upward correction of its bid after bid opening but prior
to award must submit clear and convincing evidence that a mistake was made,
and the intended bid price. FAR sect. 14.407-3(a); C Constr. Co., Inc.,
B-253198.2, Sept. 30, 1993, 93-2 CPD para. 198 at 2. 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. C Constr.
Co., Inc., supra. For an upward adjustment of a bid, workpapers, including
hard copy printouts of computer-generated software spreadsheets/worksheets,
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. Id. at 2-3. Whether evidence of the intended bid amount meets the
clear and convincing 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. at 3. Here, as explained below, we think that the Army's conclusion that
Advance provided clear and convincing evidence of the mistakes, and that
Advance's grand total bid could be determined within a narrow range of
uncertainty, was not unreasonable.

According to Advance's PM's affidavit, he finalized the electronic
spreadsheet he was using to calculate Advance's bid prices for this
solicitation on the morning of Monday, August 13 (the day before bid
opening). The PM states that he was also preparing Advance's bid on another
large project. As bid opening for that other project was scheduled for
Wednesday, August 15, in Tampa, Florida, the PM drove to Tampa to complete
his estimate for that project. AR exh. D, PM Affidavit, Aug. 17, 2001, para. 6.

The PM explains in his affidavit that he printed out the worksheet and left
it on the OM's desk with a note instructing her to "check the arithmetic of
these bids as well as to include" any last minute subcontractor or supplier
prices she might receive prior to bid opening. Id. para. 7. On the morning of
August 14 (bid opening day), he received a telephone call from Advance's OM,
and asked her to read the numbers for the bid line items from the
worksheets. Id. para. 8. The PM then entered those numbers on the bid schedule,
and provided the completed bid package to Advance's vice president (VP), who
signed and sealed the bid without making any changes. On bid opening day
(August 14), Advance's VP then drove to Brewton, Alabama, picked up the OM
and together they drove to Mobile, Alabama to deliver Advance's bid on the
instant project. Id. para. 9.

In his affidavit, the PM explains that the Microsoft/Excel spreadsheets he
used in preparing the bid consisted of eight separate worksheets, which
appear in the record labeled as sheets Nos. 1 through 8. As already
explained, worksheet No. 1 shows the calculations for the total base bid
price under the column heading "Total Job Costs," of $4,113,004.70. The
record shows that that total matches Advance's the subtotal price Advance
submitted for the base bid item (rounded down to $4,113,000).

Spreadsheet No. 2 shows the calculations and a subtotal price of
$1,131,924.91 under the column heading "Total Job Costs" for option No. 1.
However, Advance did not enter that figure on its bid schedule. Instead,
Advance submitted a price of $375,000 for CLIN 10 and $36,000 for CLIN 11,
for a subtotal of $411,000 for bid option No. 1. Spreadsheet No. 3 shows the
calculations and a subtotal bid price of $1,094,447.01 under the column
heading "Total Job Costs" for option No. 2. Advance did not enter that price
in its bid, instead entering $533,920 for CLIN 12 and $18,000 for CLIN 13,
for a subtotal of $551,920 for option No. 2. Finally, sheet No. 4 shows the
calculations and a subtotal price of $1,094,447.01 for option No. 3. Advance
actually entered $175,000 for CLIN 14 and $13,000 for CLIN 15, for a
subtotal of $188,000 for option No. 3. AR exh. F, Advance's Uncorrected Bid.

The PM states that in addition to the spreadsheets (identified above as
sheets No. 1, 2, and 3), he broke out the individual CLINs using other
sheets to calculate the pricing of supplier and subcontractor quotes to keep
abreast of the most up-to-date quotations. AR exh. D, supra, para. 21. In this
regard, the record shows that spreadsheet No. 5 contains subcontractor and
supplier quotations for option No. 1, showing under the heading "Total Mat.
Costs," the sum of $375,060.20. According to the PM, that was the number the
OM read to him over the telephone, which he then inserted for CLIN 10
(rounded down to $375,000). Worksheet No. 6 shows the subcontractor and
supplier quotations for option No. 2 totaling $533,921.20. According to the
PM, that was the amount the OM read to him over the telephone, which he
inserted as Advance's bid for CLIN 12 (rounded down to $533,920). Worksheet
No. 7 shows the subcontractor and supplier quotations for option No. 3
totaling $174,922.07. According to the PM, that was the figure the OM read
to him over the telephone, which he then submitted as Advance's price for
CLIN 14 (rounded up to $175,000).

The PM concludes in his affidavit as follows:

Apparently, [the OM] was reading the numbers from the wrong sheets when she
read me the numbers for each of the bid options. I had intended to include
as a total price for bid option numbers one, two, and three, the numbers
from sheets two, three and four from my spreadsheet. Instead, [the OM] read
me the numbers from sheets five, six, and seven of the spreadsheet which
only contained the pricing for the subcontractor and supplier quotations. I
intended to include the pricing for the bid option items which were on
sheets two through four.

AR exh. D, PM Affidavit para. 25.

Consistent with the PM's explanation, Advance's correction request stated
that the prices the firm intended to submit for CLINs 10, 12, and 14 were
the total prices shown on spreadsheets No. 2, 3, and 4 of $1,131,924.91,
$1,094,447.01, and $412,669.04, respectively, and not the figures from
sheets 5, 6, and 7, which contained only subcontractor and material supplier
costs.

In her affidavit in support of Advance's correction request, the OM states
as follows:

Sometime [after bid opening], it was discovered that I had mistakenly given
[the PM] the numbers from the spreadsheet which only contained the supplier
and subcontractor pricing but did not contain [Advance's] pricing for the
work. When I read [the PM] the numbers to insert on the bid schedule, I had
both numbers in front of me and mistakenly provided him the wrong numbers.

AR exh. D, OM Affidavit para. 11.

At a hearing conducted by our Office, however, the OM stated that in a
telephone conversation, the PM had specifically asked her to give him the
totals from sheet Nos. 5, 6, and 7 only (Video Transcript (VT) 8:52), which
were the figures for the material suppliers for options 1, 2, and 3 (VT
8:57, 9:06, 9:11; 9:13). [2]

In its post-hearing comments, Gulf-Atlantic argues that Advance made no
error in completing its bid, thus implying that Advance's original bid was
its intended bid. In this connection, the protester points out that since
the OM testified that the PM specifically asked her for the figures on
sheets 5, 6, and 7, and she read to him precisely what he asked for, there
was no mistake.

We recognize the inconsistencies and gaps in the record that Gulf-Atlantic
focuses on, and we believe that the Army could have reasonably decided to
deny Advance's correction request. Nonetheless, because the Army decided to
allow correction, we cannot sustain the protest unless we conclude that the
Army's decision was unreasonable. Although we view this as a close call, we
conclude that the Army's action was not unreasonable.

Regardless of which numbers the PM asked the OM to provide him, the fact
remains that the spreadsheets (whose authenticity the protester does not
challenge) can reasonably be viewed as clear and convincing evidence that
the numbers entered on Advance's bid as the prices for CLINs 10, 12, and 14
were mistakes, since the spreadsheets identify those numbers as total
material costs. [3] The Army could also, not unreasonably, view the
spreadsheets as clear and convincing evidence of the intended prices for
those line items, since they plainly set out, as total job costs for the
option years, the figures that Advance identified as its intended
option-year bids. Under these circumstances, we cannot conclude that the
Army's decision to allow correction of Advance's bid was unreasonable.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. The $100,000 correction request is not at issue in this protest. We note,
however, that, given that Advance provided no evidence or support in its
correction request for increasing the sum of the line items comprising its
base bid subtotal price, the Army reasonably concluded that Advance had not
provided clear and convincing evidence that it intended to include the
additional $100,000 in its base bid price.

2. Prior to the hearing, counsel for Advance and the Army advised that the
PM was no longer employed by Advance, and that he would be unable to attend
the hearing. Instead of the PM, we permitted Advance to produce at the
hearing its VP, whose testimony, which we found credible, was useful in
providing an overall explanation of how Advance generally develops its
estimates, compiles subcontractor quotations, and prepares its bids. We also
obtained testimony from the OM, who explained in greater detail the
telephone conversation she had with the PM on the morning of bid opening
regarding Advance's bid.

3. Gulf-Atlantic notes various inconsistencies in the documents Advance
submitted in support of its correction request, and thus questions whether
the worksheets are in good order. In this connection, the Army identified
several discrepancies in the worksheets supporting Advance's subtotal
prices, particularly with respect to option Nos. 1 and 3. AR exh. 3, supra,
para. 19. While the agency acknowledged these discrepancies, it concluded, and
the record shows, that any total price differences resulting from the
discrepancies (approximately $652.80), were de minimis relative to Advance's
intended grand total bid price. We have no reason to question the Army's
conclusion in this regard.