Many contractors prepare bids on a computer, using either commercially prepared bid packages or “home grown” spreadsheets using Excel or similar programs, to automatically calculate their bids.  A recent decision by the Comptroller General, however, reveals some of the dangers that these “automatic” packages hold for a contractor.  A bidder on a sewer lagoon project for the Corps of Engineers recently utilized a computer program and contended that an erroneous entry resulted in its bid of $6,881,800 being 25 percent lower than the next competitor’s bid.  The low bidder alleged that it had made a “mistake” in preparing its bid and requested upward correction.  The Federal Acquisition Regulations (FAR) allow upward correction of a bid when the bidder provides clear and convincing evidence of both the existence of a mistake and the bid actually intended, but only where the correction would not result in displacing one or more lower bids. See FAR 14.407-3(a).  The low bidder alleged that a “mistake” occurred because it “overrode” the automatic calculations in the spreadsheet by manually entering a dollar amount in the “total” column for a bid item rather than allowing that total amount to be automatically calculated by the formula in that cell.

The bidder submitted a second “corrected” bid spreadsheet, prepared after bid opening, to demonstrate the intended bid. When the Corps accepted this explanation as clear and convincing evidence of the “mistake” and allowed the bidder to raise its bid by $1,431,286, the second low bidder filed a protest to the Government accountability Office (GAO). After reviewing the evidence, the Comptroller General agreed with the protestor and recommended that the Corps award the contract to the second low bidder. The Comptroller General was particularly skeptical of the “evidence” that the low bidder presented in support of its “mistake,” emphasizing that the low bidder:

…does not explain why he ignored the formulas set up in the spreadsheet and overrode the automatically calculated figures. He does not explain the discrepancy between that intentional act and his current claim that the figures he overrode, calculated by the formulas he ignored, were, after all, the intended figures.

The decision contains additional criticism of the mischaracterizations and unsupported assumptions in the agency documentation that was used to support its erroneous decision to permit upward correction of the low bid. B-298609, Miramar Construction, Inc., October 31, 2006.