Opinion ID: 787384
Heading Depth: 3
Heading Rank: 1

Heading: Whether Hamm Relied on the Defective Specification

Text: 16 On appeal, Hamm contests the Board's finding that it was not misled by the defective specification, arguing that it relied on the government-provided policing acreage in submitting its bid. Specifically, Hamm notes, in calculating its bid using the Navy's Engineering Performance Standards (EPS), it used the given total acreages for the contract performance period and the EPS per acre staffing/pricing information. As such, Hamm claims it clearly was misled by the defective specification. Moreover, while Hamm admits that, at one point in its proposal, it relied on the single mowing acreage to assume only 166.77 acres of policing work, it contends that this assumption served only to arrive at an estimated daily staffing requirement. In particular, Hamm explains, because the solicitation required 39,427 acres of policing, it used the single mowing acreage to estimate that the solicitation called for 236 days per year of policing (39,427 acres per year / 166.77 acres per day = 236 days per year). According to Hamm, it therefore proposed policing only five days a week ((52 weeks × 5 days) — 10 federal holidays = 251 days), a proposal that the Navy incorporated when it accepted Hamm's bid. But Hamm emphasizes that this estimate of staffing requirements using the single mowing acreage did not affect its policing bid, which was wholly based on EPS calculations using the annual policing figure. 17 In response, the Navy argues that the Board correctly determined that Hamm failed to show it relied on the erroneous acreage figure when it prepared its proposal. Instead, the Navy argues, Hamm relied on two erroneous assumptions when it offered to police — according to the Board's findings — 166.77 acres daily for 236 days per year. First, the Navy contends that Hamm proposed policing 166.77 acres daily by erroneously relying on the (miscalculated) single mowing acreage in assembling its bid. Given the requirements of section C.11 of the solicitation, which clearly notes that the daily acreage to be policed includes the single mowing acreage as well as additional acreage, the Navy insists that Hamm acted unreasonably. Second, in light of the solicitation's clear requirement in section C.13 for a six-day workweek, the Navy posits that Hamm made another unreasonable assumption when it estimated policing duties were only required 236 days a year. According to the Navy, because Hamm itself made mistaken and unreasonable assumptions, it cannot claim it was misled by the erroneous policing acreage in the specification. 18 We conclude that substantial evidence does not support the Board's finding that Hamm relied on the single mowing acreage in assembling its bid for policing work. As the Navy notes here, Hamm divided the yearly policing acreage (39,427) by the single mowing acreage (166.77) to estimate that the grounds required 236 days of policing. On the basis of this calculation, the Board erroneously concluded Hamm's proposal offered to police 166.77 acres daily for 236 days per year. E.L. Hamm, ASBCA No. 51388, slip op. at 9. This is not supported by substantial evidence. Based on its estimated calculations, wherein Hamm admittedly used the single mowing acreage, Hamm proposed to police the grounds daily Monday through Friday (251 annual policing days). Contrary to the Navy's arguments, this five-day workweek was fully incorporated into the contract. It is clear that Hamm only used the single mowing acreage to arrive at a rough estimate of the daily staffing requirement, by which it then determined the appropriate workweek. This analysis in no way involved the calculation of the fixed-price bid for the policing work itself. 19 With respect to the relevant portion of its bid, Hamm in fact relied on the erroneous policing acreage from the specification. As borne out by the evidence below, Hamm used the Navy's EPS system to prepare its bid. First, Mr. Hamm testified before the Board that his company employed the Navy's EPS system to calculate its proposal, using the acreages provided by the government. In particular, as demonstrated in the portion of its proposal titled Staffing Grounds Maintenance Service Work, Hamm performed its EPS calculations using the understated policing value. In the subsection detailing the Stated Requirements in Direct Labor Hours, Hamm calculated the total hours for Policing of Grounds by multiplying the understated yearly policing acreage (39,427) by the number of time hours per acre (0.233) to arrive at a total of 9186 hours per year of policing. Further, in determining the Proposed Grounds Maintenance Staff Expressed in Productive Hours, Hamm used this yearly hours total to derive the required number of annual policing staff, which ultimately led to the fixed-price bid for work including policing services. 20 Based on our analysis, we agree with Hamm that the Board did not have substantial evidence to support its finding that Hamm was not misled by the defective specification in calculating its bid with respect to policing. While Hamm did use the mowing acreage to estimate the appropriate workweek, it otherwise relied on the understated yearly policing acreage when calculating its policing bid.