TITLE: B-299906, Bighorn Lumber Company, Inc., September 25, 2007
BNUMBER: B-299906
DATE: September 25, 2007
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B-299906, Bighorn Lumber Company, Inc., September 25, 2007

   Decision

   Matter of: Bighorn Lumber Company, Inc.

   File: B-299906

   Date: September 25, 2007

   Alan I. Saltman, Esq., Saltman & Stevens, P.C., for the protester.

   Lori Polin Jones, Esq., Department of Agriculture, for the agency.

   Nora K. Adkins, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   An agency may not correct an obvious mistake if the bidder's intended bid
   amount is neither ascertainable from the face of the bid nor supported by
   clear and convincing evidence.

   DECISION

   Bighorn Lumber Company, Inc. protests the award of a timber sales contract
   to Trapper Peak Timber Company by the U.S. Department of Agriculture,
   Forest Service, under the Two Elks timber sale in the MedicineBow-Routt
   National Forest, Colorado.

   We sustain the protest.

   On May 12, 2007, the Forest Service advertised the Two Elks timber sale in
   a Wyoming newspaper. The timber sale prospectus and bid forms called for
   bidders to submit only one bid amount, a "weighted average minimum (WAM)
   bid rate,"[1] on a combination of 23,505 ccf[2] of "Lodgepole Pine and
   Other" and 96 ccf of "True Fir" for a total estimated quantity on the sale
   of 23,601 ccf as follows:

+-------------------------------------------------------------------------------------+
|14. Bid Information                  |Rates Per Unit of Measure                      |
|-------------------------------------+-----------------------------------------------|
| Species | Product |Unit of|Estimated|Base | Minimum  | Weighted  |Additional| Base  |
|         |         |Measure|Quantity |Rate |Acceptable|Average Bid| Deposits |       |
|   (a)   |   (b)   |       |         | (e) | Bid Rate |           |for Slash |Indices|
|         |         |  (c)  |   (d)   |     |          |    (g)    | Disposal |       |
|         |         |       |         |     |   (f)    |           |          |  (i)  |
|         |         |       |         |     |          |           |   (h)    |       |
|---------+---------+-------+---------+-----+----------+-----------+----------+-------|
|Lodgepole|Sawtimber|  CCF  |23,505.00|$9.87|  $11.82  |*//////////|  $1.25   |130.32 |
|Pine and |         |       |         |     |          |           |          |       |
|Other,   |         |       |         |     |          |           |          |       |
|Live and |         |       |         |     |          |           |          |       |
|Dead     |         |       |         |     |          |           |          |       |
|---------+---------+-------+---------+-----+----------+-----------+----------+-------|
|True Fir,|Sawtimber|  CCF  |  96.00  |$9.87|  $19.92  |*//////////|  $1.25   |116.60 |
|Live     |         |       |         |     |          |           |          |       |
|-------------------------------------------------------------------------------------|
|Minimum Acceptable Weighted Average Rate, 14(j)          $ 11.85                     |
|-------------------------------------------------------------------------------------|
|Bidder's Weighted Average Minimum Bid Rate, 14(g)     |  $        |                  |
|-------------------------------------------------------------------------------------|
|* Weighted Average Bidding: Forest Service to determine proportionate rates for      |
|Species and Products.                                                                |
|-------------------------------------------------------------------------------------|
+-------------------------------------------------------------------------------------+

   AR, exh. 3, Bid Form at 1. Because this is a sale, rather than a
   procurement, award was to be made based on the highest WAM bid rate.

   On June 12, 2007, the agency received and opened three sealed bids for the
   timber sale. Bighorn's WAM bid rate inserted in section 14(g) of the bid
   form was $21.01, which equates to $495,857.01 for the total 23,601 ccf of
   sawtimber.[3] Trapper's bid listed its WAM bid rate in section 14(g) as
   $522,281.10. The other bid's WAM bid rate was $16.26, which equates to
   $383,752.26 for the 23,601 ccf of sawtimber. AR at 2.

   After bid opening, the agency bid official found that Trapper's bid
   evidenced an obvious mistake in that the bidder apparently inserted a
   "total sale value bid," rather than the WAM bid rate, in section 14(g) of
   the bid form.[4] The official noted that the mistaken bid, when divided by
   23,601 ccf, would equate to a WAM bid rate of $22.13.[5] AR, exh. 4, Bid
   Official Memorandum (June 12, 2007), at 5; exh. 5, Contracting Officer's
   Request for Correction (June 18, 2007). On June 13, the contracting
   officer contacted Trapper to determine whether its WAM bid rate was in
   error or was intended. AR, exh. 5, Contracting Officer's Request for
   Correction, at 1. Trapper responded that it intended to bid $22.22 for
   23,505 ccf of Lodgepole Pine and Other, for a total value of $522,281.10,
   which is the figure that it inserted as its bid in section 14(g).[6] Id.
   The contracting officer then informed Trapper that the WAM bid rate was
   for the entire sale volume of 23,601 ccf for both species groups and that
   the bid rate for both biddable species, based on the total bid value
   included in Trapper's total bid, would be $22.13. Id.; AR at 3.

   In response, Trapper indicated that it had made two mistakes: (1) entering
   the total value of its bid, instead of a WAM bid rate as required in the
   bid instructions, and (2) only bidding for the 23,505 ccf of Lodgepole
   Pine and Other, instead of the 23,601 ccf of combined sawtimber included
   in the sale. AR, exh. 5, Contracting Officer's Request for Correction, at
   1. Trapper requested that its bid be corrected to reflect a WAM bid rate
   of $22.13 for the total 23,601 ccf of sawtimber. Id. On June 14, the
   agency received a memo from Trapper stating, "I guess I made a mistake on
   filling out TBR [timber] weighted avg. I put total amt instead of ccf
   price. I would like to change the total amt. [black line on copy provided
   GAO, presumably $522,281.10] to a ccf price of 22.13 per ccf on two elks
   TBR sale." AR, exh. 6, Trapper's Request for Correction, at 1. No other
   evidence regarding Trapper's claimed mistake or intended bid, such as bid
   work sheets or other business records, was provided to the agency or to
   our Office.

   Based on the foregoing, the regional Deputy Forest Ranger, the Forest
   Service official responsible for reviewing claimed mistakes in bid,
   determined:

     It is my decision that since this bid is the apparent high bid, the
     bidder has requested permission to correct the mistake, and the
     Contracting Officer determined that clear and convincing evidence
     establishes both the existence of the mistake and the bid actually
     intended, you are permitted to allow the bidder to correct the mistake.

   AR, exh. 5, Deputy Forest Ranger Determination (July 3, 2007). Award has
   been withheld because of this protest. AR at 4.

   Bighorn challenges the agency decision to correct Trapper's bid. The
   agency responds that Trapper's bid may be corrected to reflect the $22.13
   bid rate because the contracting officer found clear and convincing
   evidence to support that an error had been made in Trapper's bid, the
   manner in which it was made and Trapper's intended bid price. In any
   event, the agency argues that there is no prejudice to Bighorn because
   Trapper's bid is high with or without the adjustment.

   An agency may allow a bidder to correct a mistake in its bid after bid
   opening when the bidder presents clear and convincing evidence that a
   mistake occurred, the manner in which it occurred and the intended bid
   price. A & J Constr. Co., Inc., B-213495, Apr. 18, 1984, 84-1 CPD para.
   443 at 5. Since the authority to correct mistakes alleged after bid
   opening but prior to award is vested in the procuring agency, and because
   the weight to be given the evidence in support of an asserted mistake is a
   question of fact, we will not disturb an agency's determination concerning
   bid correction unless there is no reasonable basis for the decision. Id.

   First, we agree with the agency that there is clear and convincing
   evidence that a mistake in Trapper's bid occurred. Trapper's bid of
   $522,281.10, resulting in a total bid value of $12,326,356,241.10, was
   obviously an unreasonable amount.

   The record shows that the agency assumed that Trapper had made a clerical
   error in not entering the requested WAM bid rate but instead entering the
   total value, that is, the intended WAM bid rate multiplied by the total
   estimated sawtimber stumpage covered by the prospectus, and that Trapper's
   intended WAM bid rate could be ascertained by dividing Trapper's bid as
   submitted by 23,601 ccf, that is, $22.13.

   A clerical error that is apparent on the face of a bid may be corrected by
   the contracting officer prior to award, if the contracting officer is able
   to ascertain the intended bid without the benefit of advice from the
   bidder. See SCA Servs. Of Georgia, Inc., B-209151, Mar. 1, 1983, 83-1 CPD
   para. 209 at 4; G.S. Hulsey Crushing, Inc., B-197785, Mar. 25, 1980, 80-1
   CPD para. 222 at 2. Such a correction is allowable if the discrepancy
   admits to only one reasonable interpretation ascertainable from the face
   of the bid, or from reference to the government estimate, the range of
   other bids, or the contracting officer's logic and experience. G.S. Hulsey
   Crushing, Inc., supra.

   However here, contrary to the agency's assumption, the $22.13 WAM bid rate
   was not logically ascertainable from the face of Trapper's
   bid--$522,281.10 divided by 23,601 ccf equals 22.129617, not $22.13. If
   this mistake were simply that of inserting the extended value on the bid
   form instead of the requested WAM bid rate, no such discrepancy would be
   expected. In fact, Trapper advised the agency that its intended WAM bid
   rate was $22.22 for Lodgepole Pine and Other, and that Trapper intended
   this bid rate is confirmed by the fact that if $22.22 were multiplied by
   the 23,505 ccf quantity of Lodgepole Pine and Other, the product would
   equal Trapper's actual bid of $522.281.10. Thus, this mistake was not a
   correctable clerical error apparent from the face of the bid. See Sundance
   Constr., Inc., B-182485, Feb. 28, 1975, 75-1 CPD para. 123 at 5
   (contracting officer could not ascertain intended bid by multiplying
   quoted unit prices by correct units).

   Nevertheless, as indicated above, the mistake can be corrected if the
   bidder presents clear and convincing evidence that a mistake occurred, the
   manner in which it occurred and the intended bid price. A & J Constr. Co.,
   Inc., supra. There is no evidence that $22.13 was Trapper's intended WAM
   bid rate. Indeed, Trapper's request to the agency to correct its WAM bid
   rate to $22.13 was not supported by worksheets or any other form of bid
   calculation documents. In fact, the record shows that it was not Trapper
   who calculated this amount, but the agency's bid official. See AR at 3.

   While the agency asserts that Trapper's bid rate would be higher than
   Bighorn's in any case, there is no evidence in the record supporting this
   assertion. In fact, Trapper, by its own admission, did not account in the
   $22.22 WAM bid rate for the 96 ccf of True Fir timber, and there is no
   evidence in the record whether this failure was intentional or the result
   of a mistaken or erroneous interpretation of the bid instructions, much
   less any indication as to how this would have affected Trapper's WAM bid
   rate. This leaves open the possibility that Trapper may, in the exercise
   of its business judgment, have found it uneconomical to harvest True Fir
   under the terms of the prospectus or that its bid rate would have been
   more significantly affected if it had been accounted for, such that its
   bid could closely approach or be displaced by Bighorn's bid. See
   Protester's Comments at 5 n.5. Where a bidder fails to include a price for
   a contract requirement, and there is no clear and convincing evidence of
   the intended bid if this price had been included, the bidder may not be
   permitted to recalculate its bid to arrive at a bid not intended before
   bid opening. See Astro Quality Servs., Inc., B-280676, Nov. 5, 1998, 98-2
   CPD para. 107 at 3-4. To allow a bidder to correct its bid in such
   circumstances would prejudice the other bidders and the competitive bid
   system. See Panoramic Studios, B-200664, Aug. 17, 1981, 81-2 CPD para. 144
   at 5.

   Accordingly, the agency's decision to allow Trapper to correct its bid was
   not reasonable. Instead, the agency should have permitted Trapper to
   withdraw its bid. See id. at 4-5. We recommend that award be made to
   Bighorn if otherwise appropriate.[7]

   The protest is sustained.

   Gary L. Kepplinger
   General Counsel

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

   [1] The WAM is the bid rate for the stumpage of various species of timber
   covered by the sale. According to the prospectus, "[t]he Forest Service
   shall establish bid rates by species in the contract by multiplying each
   species' minimum acceptable bid rate by the bid increase percentage [and]
   [t]he bid increase percentage is the bidder's weighted average bid rate
   divided by the minimum acceptable weighted average rate. The total amount
   for stumpage is the volume of each biddable species multiplied by its bid
   rate." Agency Report (AR), exh. 1, Timber Sale Prospectus, at 2.

   [2] A ccf is one hundred cubic feet.

   [3] 23,505 ccf Lodgepole Pine and Other + 96 ccf True Fir.

   [4] Trapper's bid as entered on the bid form was an obvious error because
   its $522,281.10 WAM bid rate would result in a total bid of
   $12,326,356,241.10. AR at 5.

   [5] Actually, the bid amount, $522,281.10, divided by 23,601 ccf is
   $22.129617. Using $22.13 results in a total bid value of $522,290.13
   ($22.13 multiplied by 23,601 ccf).

   [6] Trapper's bid of $522,281.10 when divided by 23,505 ccf is exactly
   $22.22.

   [7] We considered this protest under 4 C.F.R. sect. 21.13(a) (2007)
   because the Forest Service has agreed to have protests of timber sales
   decided by our Office. When we consider protests of sales, the provisions
   of 4 C.F.R. sect. 21.8(d), pertaining to recommendations for the payment
   of protest costs, do not apply. 4 C.F.R. sect. 21.13(b). See Squires
   Timber Co., B-298859, Dec. 1, 2006, 2006 CPD para. 181 at n.2.