Contractor can Adjust Price Even if Deleted Items Not Priced
(Editor’s Note. It is often a good idea to anticipate actual work requirements when pricing a proposal but the following demonstrates a pitfall of this normally sound tactic.)
Contractor based its bid price on the assumption, after contract award, the government would implement a series of design changes that would delete some of the contracted work. Accordingly, it omitted the cost of this work in pricing its proposal and won the contract partly because of its lowest price. When the government actually deleted the work and sought a downward price adjustment, Contractor claimed it should not have to lower its contract price because the price it offered omitted the cost of the deleted work. The Board disagreed stating the decision of Contractor to omit the costs of required work in the expectation of its later deletion should not deprive the government of entitlement to a price adjustment. In reaching its decision the Board quoted a 1994 decision in Knight’s Piping Inc. which explained “the integrity of the competitive procurement process obliges bidders to base their bid prices on the specified contract requirements as solicited and not substitute their subjective expectations about what work will need to be performed. Therefore, the amount Contractor actually bid for later deleted work is irrelevant to the computation of the downward adjustment due the government” (Fire Security Systems Inc. ASBCA 53498).
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