TITLE: B-296855.2, Odyssey International, Inc., November 16, 2005
BNUMBER: B-296855.2
DATE: November 16, 2005
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B-296855.2, Odyssey International, Inc., November 16, 2005

   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.

   Decision

   Matter of: Odyssey International, Inc.

   File: B-296855.2

   Date: November 16, 2005

   Patrick S. Hendrickson, Esq., for the protester.

   Timothy A. Sullivan, Esq., and Michael H. Payne, Esq., Payne Hackenbracht
   and Sullivan, for Allied Contractors and Engineers, Inc., an intervenor.

   Carrie E. Kamler, Esq., Department of Labor, for the agency.

   Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Agency improperly failed to allow correction of claimed mistake in bid,
   where the bidder established its mistake and its intended bid (which was
   still low) by clear and convincing evidence and the agency denied the
   requested correction because of other suspected mistakes which were
   unrelated to the one claimed and which the agency did not bring to the
   bidder's attention, as required by Federal Acquisition Regulation
   sections 14.407-1, 14.407-3(g)(1)(iv), and where the evidence in the
   record, including hearing testimony and worksheets, does not evidence that
   the bidder made additional mistakes (as suspected by the agency) or that
   the worksheets were not in good order.

   DECISION

   Odyssey International, Inc. protests the Department of Labor's (DOL)
   decision to deny its request for correction of a mistake in its low bid
   under invitation for bids (IFB) No. 051RB20036, for construction services,
   and the consequent rejection of its bid.

   We sustain the protest.

   The IFB, issued on April 1, 2005, sought bids for the construction of a
   new 178-bed, 43,788 square foot, three-story dormitory building at the Red
   Rock Job Corps Center, Lopez, Pennsylvania. At the bid opening on May 10,
   DOL received eight bids. Odyssey submitted the low bid at $6,246,616 (a
   base bid of $6,034,000 plus two solicited and evaluated alternates
   totaling $212,616) and Allied Contractors and Engineers, Inc. submitted
   the next low bid at $7,319,800. Agency Report, Tab 31, Bid Tabulation
   Form. The government estimate for the project was $7,352,357. Agency
   Report, Tab 21, Architect's Bid Analysis, at 2.

   After the agency requested the three lowest bidders to verify their bid
   prices, Odyssey, on May 11, requested correction of an alleged mistake in
   its bid attributed to "a dramatic posting error" in its bid tabulation
   sheet. Agency Report, Tab 25, Letter from Odyssey to DOL, May 11, 2005, at
   1. Odyssey claimed that it mistakenly recorded a $1,275,000 quote for
   structural steel from a subcontractor as $275,000 in its electronic
   spreadsheet, and as evidence of the mistake and the intended bid it
   furnished the subcontractor's proposal of $1,275,000, as well as printed
   copies of the original bid tabulation spreadsheet and the corrected
   spreadsheet, both dated May 11.[1] Id. DOL requested that Odyssey provide
   all pertinent evidence "establishing the existence of the error, and the
   manner in which it occurred, and the bid actually intended." Agency
   Report, Tab 22, Letter from DOL to Odyssey, May 16, 2005.

   On May 19, Odyssey furnished additional evidence related to the mistake,
   including a compact disc (CD) containing the electronic version of the
   previously printed spreadsheets. Odyssey requested that it be allowed to
   correct its base-bid price to $7,104,600 to account for the mistake. This
   figure included not only the $1,000,000 shortfall on the bid tabulation
   sheet in recording the subcontractor's quote, but also, consistent with
   the methodology employed on the original bid tabulation spreadsheet, a
   [DELETED] markup for profit and overhead on the increased price, an
   additional 1-percent markup for bond premium, and a $54 bid reduction to
   round off the bid.[2] Agency Report, Tab 25, Odyssey's Request for
   Correction, May 11, 2005; Tab 29, Odyssey's Supplement to Request for
   Correction, May 19, 2005. This would make Odyssey's corrected bid,
   including the two alternates, total $7,317,216,[3] which is only $2,584
   less than Allied's $7,319,800 bid.

   Upon learning that Odyssey had requested correction of its mistake in bid,
   on May 12, Allied protested to the agency the propriety of permitting
   Odyssey to correct its bid. On June 21, after reviewing Odyssey's
   documentation, DOL accepted Odyssey's corrected bid, finding that there
   was clear and convincing evidence of the mistake and the intended bid.
   Thus, on June 28, DOL denied Allied's protest. Allied then filed a protest
   at our Office on July 8, challenging DOL's decision. Allied based this
   protest on its review of the printed bid tabulation spreadsheets provided
   by Odyssey in support of its mistake claim that Allied had obtained from
   DOL. We dismissed this protest as academic on August 3 after DOL reversed
   its prior position and advised that it would now not accept Odyssey's
   corrected bid because of "a number of other serious errors, unrelated to
   [the] initial mistake in bid claimed by Odyssey," which were found in
   Odyssey's spreadsheets and which prevented the agency from determining
   Odyssey's intended bid price. See Agency Corrective Action Letter, August
   3, 2005.

   As indicated above, as a result of Allied's protest to our Office, DOL
   found, upon further review, that Odyssey's spreadsheets did not establish
   clear and convincing evidence of the mistake and intended bid. This change
   in position was based on factors not related to the particular mistake
   claimed by Odyssey. Specifically, DOL now found an apparent computational
   error in the "General Conditions" section of the spreadsheets because the
   total for this section when added was $316,293, instead of $422,043, which
   was the total that appeared on both the original and the corrected
   spreadsheets. DOL next points to section 5500, "Metal Fabrications," in
   the original and the corrected spreadsheets where, instead of prices, the
   original worksheet said "in" and the corrected worksheet said "in 05120."
   DOL found that these changed notations reflected a potential error because
   it indicated that the metal fabrications, including the stairs, were a
   part of Odyssey's structural steel subcontractor's quote, but that
   subcontractor's quote did not include stairs, an item for which DOL
   estimated the cost to be between $60,000 and $70,000. With respect to
   sections 8310, "Access Doors and Panels"; 10400, "Signage"; 10520, "Fire
   Protection Specialties"; and 10810, "Toilet Accessories" on the
   spreadsheets, DOL found that Odyssey had a supplier's quote for the
   materials, but had not included the cost of labor in the spreadsheets,
   which the government estimated to be $17,205. Finally, DOL found that in
   section 2821, "Chain Link Fences and Gates," the original spreadsheet
   contained the notation "in 03300," but the corrected spreadsheet changed
   the notation to "in 02980." Since DOL had estimated the item at $18,000,
   it found that whether Odyssey had included a price for this item could not
   be determined from the changes to this notation. DOL found that the
   foregoing problems indicated that Odyssey's spreadsheets were not in good
   order and did not reasonably support by clear and convincing evidence
   Odyssey's claimed intended bid price. See Agency Report, Tab 7, Letter
   from DOL to Odyssey, Aug. 2, 2005 at 1-2. On August 2, DOL notified
   Odyssey that its request for correction was denied but that it could
   withdraw its bid because of the mistake. This protest followed.

   Odyssey maintains that DOL improperly reversed its decision to permit
   correction of the mistake, based on Allied's and DOL's misunderstanding of
   Odyssey's spreadsheets.[4] Odyssey argues that DOL mistakenly concluded
   that the subtotal in its General Conditions section was not properly
   calculated because it accepted Allied's reading of the printed
   spreadsheets, which did not include two rows that had been hidden to
   protect the confidentiality of the information, but were accessible to the
   agency on the CD by unhiding these rows, which would have confirmed the
   accuracy of the subtotal for this section reflected in the printed
   spreadsheets.[5] Odyssey further contends that the various revised
   notations on the spreadsheets did not evidence any mistakes in its bid and
   did not affect its bid amount. Odyssey complains that the agency
   improperly denied correction for reasons not related to the mistake that
   was claimed without providing Odyssey with an opportunity to respond to
   these issues.

   A bidder who seeks upward correction of its bid price prior to award must
   submit clear and convincing evidence that a mistake was made, the manner
   in which the mistake occurred, and the intended price. Federal Acquisition
   Regulation (FAR) sect. 14.407-3(a). Workpapers, including records of
   computer generated software spreadsheets/workpapers (hardcopy printouts,
   computer disks, tapes or other software media), may constitute clear and
   convincing evidence if they are in good order, and indicate the intended
   bid price, and there is no contravening evidence. Holmes Mech., Inc.,
   B-281417, Jan. 13, 1999, 99-1 CPD para. 6 at 2. Whether the evidence is
   sufficient to meet this standard is a question of fact that an agency must
   decide. Our Office only questions this decision where it lacks a
   reasonable basis. H.A. Sack Co., Inc., B-278359, Jan. 20, 1998, 98-1 CPD
   para. 27 at 3. Correction of the bid is not precluded merely because the
   corrected bid price is close to the next lowest bid price; while such a
   case requires a higher degree of scrutiny to ascertain the amount of the
   intended bid, the bid still can be corrected if the intended price is
   clearly established and the bid remains low. Pacific Components, Inc.,
   B-252585, June 21, 1993, 93-1 CPD para. 478 at 7.

   Here, the agency acknowledges, and we agree, that Odyssey's documentation
   establishes by clear and convincing evidence that Odyssey made a
   $1,000,000 error in transcribing its structural steel subcontractor's
   quote in section 5120 of its spreadsheets. There is also no dispute that
   when this error is corrected and the markups and rounding are taken into
   account that Odyssey's corrected bid would be $7,317,216.[6] The only
   dispute concerns the sufficiency of the spreadsheets as evidence of the
   intended bid because of additional alleged mistakes, other than those
   claimed by Odyssey, that DOL suspected were made in the other areas of the
   spreadsheets, which in DOL's view meant that Odyssey's spreadsheets were
   not in good order so as to establish by clear and convincing evidence its
   intended bid price.

   In our view, DOL did not act reasonably in determining that Odyssey's
   spreadsheets were not in good order and did not provide clear and
   convincing evidence of Odyssey's intended bid. DOL's reversal of its
   initial decision permitting Odyssey to upwardly correct the bid was based
   upon what DOL regarded as possible additional mistakes in the spreadsheets
   beyond the one Odyssey claimed. Under FAR sect. 14.407-1, in cases of
   apparent mistakes and in cases where the contracting officer has reason to
   believe that a mistake may have been made, the contracting officer is
   required to request from the bidder a verification of the bid, calling
   attention to the suspected mistakes. Since DOL suspected other mistakes in
   Odyssey's bid than the one Odyssey was requesting to correct, consistent
   with FAR sect. 14.407-1, it should have requested further verification of
   Odyssey's bid price, and called Odyssey's attention to the suspected
   mistakes in its spreadsheets. In this regard, FAR sect. 14.407-3(g)(1)(iv)
   provides that to ensure that the bidder will be put on notice of mistakes
   suspected by the contracting officer, the bidder should be advised as
   appropriate "of any other information, proper for disclosure, that leads
   the contracting officer to believe that there is a mistake in bid." See
   Enco Dredging, B-284107, Feb. 22, 2000, 2000 CPD para. 44 at 6. Here, the
   agency did not advise Odyssey of these additional suspected mistakes prior
   to rejecting Odyssey's request for correction (which effectively served as
   a rejection of Odyssey's bid).

   Based on our review of the record, including the spreadsheets, the CD, and
   the hearing testimony from the individual responsible for preparing
   Odyssey's bid, we find that none of the items referenced by DOL (or all
   these items in total) as indicating a possible mistake beyond that claimed
   by Odyssey provides a valid basis for denying Odyssey's correction
   request.

   Specifically, the record confirms that Odyssey's spreadsheets on the CD
   contained hidden rows that included prices of [DELETED] for a contract
   administrator and [DELETED] for a safety officer that, when added to the
   other rows in the General Conditions section, equal the $422,043 subtotal
   in the spreadsheets. Although Odyssey printed the spreadsheets that it
   provided to DOL in support of the mistake correction claim without these
   rows being visible, it furnished DOL the CD that contained the complete
   spreadsheet, which was completely accessible to the agency by manipulating
   certain commands in the spreadsheet program.[7]

   While DOL does not dispute, and we have confirmed, that the correct total
   of the General Conditions section can be discerned from the spreadsheet on
   the CD once the rows are unhidden, it contends that the protester's
   spreadsheets still should not be accepted as reliable proof of its
   intended bid because the spreadsheets were printed on May 11 (after bid
   opening) and the spreadsheet on the CD reflects that it was created on May
   19.

   However, the fact that bid worksheets were generated by a computer does
   not preclude them from constituting valid evidence to support a request
   for bid correction, even where a worksheet on a computer was not printed
   until after bid opening. See Holmes Mech., Inc., supra, at 2 n.1, 4. The
   key consideration is whether or not the submissions are clear and
   convincing evidence of the mistake and intended bid; the manipulation of
   the mistake in bid rules may occur just as easily when a bidder has
   prepared its worksheets without the use of a computer. Id. at 4. There is
   no evidence of such manipulation here.

   Instead, the spreadsheet preparer testified that the spreadsheets,
   including the complete spreadsheet with unhidden columns, were printed on
   the day after bid opening, and that these spreadsheets were what Odyssey
   utilized prior to bid opening to calculate the bid, and that the printed
   date of May 11 appearing on the spreadsheets is controlled by the
   computer's software programs, and not the user. He further testified that
   although a printed copy of the complete spreadsheet was not furnished to
   the agency with its request for correction on May 11 because he did not
   believe this hidden information was necessary to support the claimed
   error, he printed a complete copy for his files on this date. See VT at
   11:22-11:30. Odyssey has provided a copy of this spreadsheet, also dated
   May 11 (evidencing that it was in fact printed on that date), with the
   columns unhidden, which confirms his explanation. We have also confirmed
   that the May 19 date on the spreadsheet on the CD is the date that it was
   copied from the computer and submitted to the agency, and was not the date
   the spreadsheet on the computer was actually created.

   Given the preparer's unrebutted and credible testimony that the
   spreadsheet, as represented on the CD that had been provided to the agency
   in support of its mistake claim, was what Odyssey utilized prior to
   opening to calculate its bid on his computer, we find the spreadsheets and
   CD are reliable and constitute clear and convincing evidence of Odyssey's
   intended bid.[8] See Cooper Constr., Inc., B-285880, Sept. 18, 2000, 2000
   CPD para. 153 at 5 (sworn statement from protester attesting to
   authenticity of undated worksheets is sufficient evidence to demonstrate
   the authenticity of worksheets in the absence of contravening evidence).
   Because the agency failed to bring this additional suspected mistake to
   Odyssey's attention as required by FAR sections 14.207-1,
   14.407-3(g)(1)(iv), it failed to obtain the supported explanation from
   Odyssey that has been obtained during the development of this protest
   record that demonstrated that the spreadsheets were in good order and did
   not evidence additional mistakes. As a result, we find that DOL improperly
   concluded that Odyssey's spreadsheet's contained a computational error
   with regard to "General Conditions."

   The other alleged mistakes in the spreadsheets that the agency now
   references also were not brought to Odyssey's attention as required. In
   each of these cases, Odyssey has provided credible and unrebutted
   explanations as to why they did not evidence mistakes. Moreover, none of
   these alleged mistakes involved apparent errors in the computation of the
   bid as discerned from the spreadsheets.

   Specifically, the notation changes Odyssey made to the corrected
   spreadsheet did not involve changes in bid price. Indeed, the preparer
   testified that the typed inscriptions that appear in the various notes
   were his personal notes denoting where unpriced work items were covered in
   the bid and did not have any impact on the scope of work to be provided
   under the contract or the price to be charged the government. The preparer
   testified that the notation "in" was made to denote that a particular line
   item was included in the contract in terms of cost and scope. He testified
   that he continued to complete the notes after bid opening because time
   constraints prior to bid opening did not permit him to fully complete the
   notes. With respect to the change from "in" to "in section 5120," the
   preparer indicated that this note was completed merely to remind himself
   and the project manager to further negotiate metal fabrication costs with
   the structural steel contractor. With respect to section 3300, the
   preparer testified that the area where the change was made was simply to
   recognize that prior to submitting the bid a change had occurred in terms
   of where these costs were being covered. See VT at 10:47-10:55:07,
   11:08:44-11:09:12. Based on our review, none of these notation changes
   from the original spreadsheet to the corrected spreadsheet indicated that
   the spreadsheets were not in good order or evidenced unclaimed mistakes.
   In any case, the agency's decision that the workpapers were not in good
   order because of these notations is not sustainable because the corrected
   bid total for Odyssey's bid can be unambiguously ascertained by a
   mechanical mathematical calculation of the spreadsheets. See Cooper
   Constr. Inc., supra, at 6.

   Moreover, the concern that Odyssey may not have included certain labor
   costs because its costs did not match the government estimate is not the
   type of mistake for which correction would be permitted under the FAR
   mistake-in-bid procedures.[9] 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 its business judgment. Reynosa
   Constr., Inc., B-278364, Dec. 15, 1997, 97-2 CPD para. 165 at 4, recon.
   denied, B-278364.2, Apr. 28, 1998, 98-1 CPD para. 124 at 2. While the
   agency might have concluded from a review of Odyssey's spreadsheets that
   Odyssey may have underpriced or underestimated certain cost elements
   unrelated to the mistake claim, this is not an appropriate basis for DOL
   to deny Odyssey permission to correct the mistake that it claimed. Id.
   This is so because a bidder's pricing of the different elements of its bid
   is dependent upon the bidder's business judgment and bidding strategy.
   There is no basis to assume that omitted or understated prices reflect a
   mistake, where there is no apparent mistake in the workpapers. M. A.
   Mortenson Co., B-254152, Nov. 19, 1993, 93-2 CPD para. 296 at 5.

   In sum, close scrutiny of the evidence in the record establishes by clear
   and convincing evidence both that Odyssey made a mistake as well as its
   intended bid, which will remain low after correction of the mistake.
   Consequently, we find that DOL should not have denied Odyssey's request
   for correction.

   We recommend that DOL permit Odyssey to correct its mistake in bid, and
   award the contract to that firm, if otherwise appropriate. We also
   recommend that the protester be reimbursed the reasonable costs of filing
   and pursuing the protest, including attorney's fees. 4 C.F.R. sect.
   21.8(d)(1) (2005). The protester should submit its certified claim for
   such costs, detailing the time expended and the costs incurred, directly
   to the contracting agency within 60 days after receipt of this decision.

   The protest is sustained.

   Anthony H. Gamboa

   General Counsel

   ------------------------

   [1] The spreadsheets were prepared on a Microsoft Excel spreadsheet
   program. Because it is a feature of this program, the dates appearing on
   the spreadsheets are the dates they were printed for submission to the
   agency. See Hearing Video Transcript (VT) at 11:22-11:30. (A hearing was
   conducted by our Office to take testimony from Odyssey's representative
   regarding the mistake.)

   [2] The preparer of the spreadsheets testified that the original bid price
   was rounded downward by $54 from $6,034,054--the base bid as indicated on
   Odyssey's bid calculation spreadsheet--to $6,034,000 to make submitting
   the bid easier for the bid handler. See VT at 10:43-10:43:30. The
   spreadsheets for the bid as corrected show a total base bid of $7,104,654
   from which Odyssey subtracted $54 to be consistent with the way its
   original base bid was submitted.

   [3] $7,104,600 + $212,616 = $7,317,216.

   [4] Odyssey argues that DOL should not have released the spreadsheets to
   Allied because the information was proprietary/confidential information,
   and that we should find that the agency's improper release of the
   information precludes the agency from using the information to reverse its
   decision allowing correction of its bid. Since we sustain the protest and
   recommend award based on Odyssey's corrected price, we need not resolve
   whether these spreadsheets should have been provided to Allied. However,
   we do note that the protester did not mark the submitted spreadsheets as
   confidential or proprietary as should generally be done where a firm
   believes that information should not be disclosed by the agency. See
   Litton Applied Tech., B-227090, 227156, Sept. 3, 1987, 87-2 CPD para. 219
   at 4.

   [5] The Microsoft Excel software permits columns and rows on spreadsheets
   to be hidden and "unhidden."

   [6] The computer-generated spreadsheets here contained the same markups
   that can be easily used to calculate the effect of the mistake and
   determine the intended bid but for the mistake. Where such spreadsheets
   are in good order they can constitute clear and convincing evidence of the
   intended bid. Roy Anderson Corp., B-292555, B-292555.2, Oct. 10, 2003,
   2003 CPD para. 179 at 2. The only modification to the price calculated by
   the computer-generated spreadsheets was the $54 rounding down to both the
   original base bid and the recalculated base bid. However, even assuming
   this rounding introduces some level of uncertainty as to the intended bid,
   correction of the bid may be allowed where there is clear and convincing
   evidence that the amount of the intended bid would fall into a narrow
   range of uncertainty and remain low after correction, such as those
   situations where minor rounding of bid figures is done. Id.; H.A. Sack
   Co., Inc., supra, at 4 n.1.

   [7] The preparer of the spreadsheet indicated that he hid the safety
   officer and contract administration rows to protect the confidentiality of
   the information, given that the General Conditions section was not the
   basis for the mistake that it was requesting to correct and that the
   missing rows were included on the CD. See VT at 10:55:28-10:57:39.

   [8] Although Allied questions the electronic version of the spreadsheet on
   the submitted CD because the [DELETED] for the Safety Officer figure is in
   a blank row above the row for the Safety Officer, we are not troubled by
   this because the complete sheet was printed in the proper form on May 11
   when Odyssey initially requested to correct its bid.

   [9] With respect to the agency's concern that certain labor costs were not
   included for sections 8310, 10400, 10520, and 10810, the bid preparer
   testified that these labor costs were in fact included in section 8110,
   where $14,000 in labor costs were included, and that Odyssey's bidding
   strategy often requires including labor cost in other sections, where, as
   was the case here, installation prices for all material items from
   subcontractors are not generally available. See VT at 10:54:14-10:53:19.