Agency Unreasonably Allowed Upward Correction of Bid Price

Tuesday, April 03, 2018 9:08 am
April 2018 - Volume 40 Number 4

Sustained: Bid Error

Matter of: Herman Construction Group, Inc., 2018 U.S. Comp. Gen. Lexis 6 (Jan. 5, 2018)

A bidder should not have been allowed to increase its bid price by more than $1 million to fix an alleged error because its explanations for that error were "uncorroborated and self-serving."

Herman Construction Group, Inc. (Herman) protested a Department of Veterans Affairs (VA) award to Talion Construction, LLC (Talion) for a renovation project at California’s VA Palo Alto Health Care System campus. Herman alleged that the agency unreasonably allowed Talion to correct an alleged bid error, and the Comptroller General agreed.

The VA instructed bidders to submit a base bid item price and four alternate bid item prices. The timely bid Talion submitted contained a base bid price of $6.6 million. However, the day after the submission deadline, Talion informed the VA that its low bid price (for comparison, Herman’s was $7.8 million) was too good to be true.

Talion explained that it had used an erroneous amount for subcontract drywall services---$500,000 instead of $1.5 million---to calculate both the base bid and alternate bid items. The bidder requested that it be permitted to correct (or withdraw) the bid, and it sought to correct its bid price to $7.7 million.

Talion sent the VA a copy of its subcontractor quote for the drywall work. It also provided an explanation for the mistake: The $500,000 was a "plug" number that it failed to replace with the actual sub’s quoted price. This failure, Talion stated, was due to its p[..]