Payne Hackenbracht & Sullivan
Application of Variations in Estimated Quantities Clause
As a general rule, the Variations in Estimated Quantities clause provides for an equitable adjustment in the contract price when the quantity of a pay item is an estimated quantity, and the actual quantity varies more than 15 percent above or below the estimated quantity. The recognized purpose of this clause is to apportion the risk of an overrun or underrun in estimated quantities resulting from factors not reasonably apparent to the parties at the time they entered into the contract.
Avoiding Application of the Clause
Although its percentage limitations are strictly applied in determining entitlement to an equitable adjustment, the Variations in Estimated Quantities clause will not be enforced where the quantity variation is cognizable under either the Changes or Differing Site Conditions clause. United Contractors v. United States, 177 Ct.Cl. 151, 368 F.2d 585 (1966); Dunbar & Sullivan Dredginq Co., Eng BCA 3165, 73-2 BCA 10,285 (1973); Morrison-Knudsen Co. v. United States, 184 Ct.Cl. 661, 397 F.2d 826 (1968).
Similarly, it has been held that the clause is not applicable when the cause of the variation is an erroneous estimate resulting from the active misrepresentation, deliberate wrong, gross or inexcusable error, or the negligence of the government. Maya Transit Company, ASBCA No. 20186, 75-2 BCA 11,552 (1975); Womack v. United States, 182 Ct.Cl. 599, 389 F.2d 793 (1968); Chemical Technology. Inc. v. United States, 227 Ct.Cl. 120, 645 F.2d 934 (1981); John Murphy Construction Co., AGBCA 418, 79-1 BCA 13,836(1979). Indeed, the bidder does not assume responsibility for the government's miscalculation, error or negligence:
[W]here a negligently-prepared estimate by the government results in additional costs to a contractor, the contractor should be entitled to reimbursement for such costs.
Intearity Management International. Inc., ASBCA No. 18289, 75-2 BCA 11,602 (1975).
Therefore, in these situations, the government may not invoke the Variations in Estimated Quantities clause to limit or defeat a claim for an equitable adjustment resulting from a quantity variation.
The government is held to a standard of reasonable care in preparing estimates for solicitations:
[I]n promulgating an estimate for bidding invitation purposes, the Government is not required to be clairvoyant, but it is obliged to base that estimate on all relevant information that is reasonably available to it.
Womack v. United States, 389 F.2d 798, 801 (1968). Moreover, the degree of care to be taken in preparing estimates for a solicitation depends upon the importance of the estimate in preparinq the bids. See Inteqrity Manaqement International, supra.
An estimate of quantities of material typically is critical to a contractor's bid preparation. Moreover, a contractor has a right to rely on the quantity estimate in preparing its bid. As the Board noted in similar circumstances in John Murphy Construction Co., AGBCA 418, 79-1 BCA 13,836 (1979):
The fact that after the mistake was called to the government's attention it was decided not to issue an addendum or to cancel the IFB . . . does not persuade us that the estimated quantities were established with the exercise of due care.
(Also See Variation in Estimated Quantities, Narrative)
(Also See Calculation of Adjustment under VEQ clause)
(Also See Corps of Engineers Bulletin)