B-237288, Feb 7, 1990, 90-1 CPD 158

B-237288, Feb 7, 1990, 90-1 CPD 158

PROCUREMENT - Sealed Bidding - Bids - Modification - Submission methods - Procedural defects DIGEST: 1. Bid modification written on outside of bid envelope does not render bid nonresponsive where bid complied with all material requirements of the solicitation. PROCUREMENT - Sealed Bidding - Bids - Modification - Interpretation - Intent 2. Contracting agency may consider a downward bid modification written on the bid envelope where agency's procedures for inspecting bid documents are sufficiently thorough that agency would have discovered the notation on the bid envelope regardless of whether the bidder called it to the agency's attention, and it was clear that the modification was not an internal note since it was signed by the individual responsible for preparing the bid. 3.Where bid modification is written on outside of bid envelope and is signed with the initials of the person who signed the bid, the contracting
agency reasonably assumed that the person whose initials accompanied the
modification signed the modification himself, not through an agent.

Attorneys

Qualicon Corporation:

Qualicon Corporation protests the Navy's award of a contract to Pittman
Mechanical Contractors, Inc., under invitation for bids (IFB) No. N62470-
89-B-3781 for chiller replacement and building renovations at Building
3607, Naval Amphibious Base, Little Creek, Virginia Beach, Virginia.
Qualicon contends that the Navy improperly considered a notation on
Pittman's bid envelope as a downward modification to Pittman's bid price
in determining that Pittman was the lowest bidder.

We deny the protest.

Pittman's bid was the fifth of 11 opened on September 21, 1989.
The Navy
representative read aloud and recorded Pittman's bid as $459,000, which
made it the highest of the five bids opened up to that point.
As the Navy
representative prepared to open the sixth bid, a representative of Pittman
inquired as to whether there was something pertinent on the outside of
Pittman's bid envelope.
The Navy representative examined the bid envelope
and discovered that the notation "Deduct-$272,000 RCP" had been
handwritten on the envelope; "RCP" are the initials of Pittman's
president, Ronnie C. Pittman.
The Navy representative determined that the
notation was a bid modification and deducted $272,000 from Pittman's bid,
which was then recorded as $187,000.
The remaining bids were then
opened.
Qualicon's bid of $208,880 was second low.

The protester argues that Pittman's bid should have been rejected as
nonresponsive because Pittman failed to comply with the solicitation
requirement that all bid modifications be submitted in sealed envelopes.
We disagree.
Responsiveness concerns whether a bid constitutes an offer
to perform, without exception, the exact thing called for in the
invitation.
Central Mechanical Constr., Inc., B-220594, Dec. 31, 1985,
85-2 CPD Para. 730.
Since Pittman's bid complied with all of the IFB's
material provisions, it was responsive.
Qualicon also argues that the
notation on Pittman's bid envelope gave Pittman an advantage over other
bidders by allowing it to select between its price with the modification
and its price without the modification after other bids had been exposed.
The protester contends that Pittman could have brought the notation to the
attention of the Navy, or remained silent, depending on its status
relative to other bidders, and that even if the Navy representative had
noticed the notation on her own, Pittman could have claimed that the
writing was an internal note or that the deduction had already been
incorporated into its bid price.
Further-more, the protester argues,
because the handwriting of the signature on the bid and the notation on
the bid envelope were dissimilar, Pittman could have disavowed the writing
on the envelope as unauthorized.
Qualicon also argues that the amount of
the modification was unclear since the notation could be read as "Deduct-
$272.000" or "Deduct-$272,000" and that in either case the instruction to
"deduct," without more, is not sufficiently clear.

As support for its position, Qualicon relies principally on our decision,
Central Mechanical Constr., Inc., B-220594, supra. In that case, we held
that a bid modification entered on a bid envelope should not be considered
where it was so inconspicuous in size and location on the envelope that
the contracting officer could not reasonably be expected to have seen it.
We also noted the potential for other abuses by the bidder submitting the
bid modification; Qualicon maintains that these same abuses-- for example,
the opportunity to remain silent and not bring the modification to the
agency's attention-- could occur here.
As explained in detail below, we
think that under the circumstances of this case, the potential for abuse
by Pittman is sufficiently remote that the modification may be
considered.

As a preliminary matter, the agency maintains-- and we agree-- that the
only reasonable interpretation of the notation on the envelope is "Deduct-
$272,000" since the writer would not have included three zeroes after the
punctuation mark if he had intended it as a decimal point.

With regard to the protester's argument that the notation permitted
Pittman to choose between its price as modified, by calling the notation
to the Navy's attention, or its price as unmodified, by remaining silent,
the Navy contends that it would in the normal course of business have
reviewed the bid envelopes for any notations that might have an impact on
the bids, and that it therefore would have discovered the notation-- and
applied it to Pittman's bid-- even if Pittman had not called the notation
to its attention.
In our view, since the Navy's procedures for inspecting
bid documents are sufficiently thorough that a bidder would not have the
opportunity in effect to renounce a bid modification by declining to bring
it to the agency's attention, those procedures eliminate the opportunity
for the type of abuse of the competitive bidding process suggested by the
protester here.

The Navy also contends that the modification would have been binding on
Pittman because it was initialed by the company's president, Ronnie C.
Pittman, and that Pittman therefore could not have renounced the
modification by claiming that it was an internal note or that the
deduction had already been incorporated into its bid price.

In the circumstances of this case, we agree that Pittman could not have
renounced the modification by claiming that it was an internal note.
think that it is clear when the notation is considered in the context of
the bid as a whole that it was directed at a party outside the company.
In particular, we note that Ronnie C. Pittman certified elsewhere in the
bid that he was responsible for the preparation of the bid; thus any
internal communication concerning bid price would have been addressed to
him.
Although it is conceivable that Mr. Pittman would have written a
note to himself on the bid envelope, it seems highly unlikely that he
would have signed a reminder to himself with his initials.
In our view,
then, the notation on the bid envelope clearly was not an internal note.

Similarly, we find that it was clear that the instruction "Deduct
$272,000" meant that the bid price contained in the bid envelope was to be
reduced by the amount written on the outside of the envelope.
Given that
the notation was written on the envelope containing the bid and that it
was signed with the initials of the person who signed the bid, it is not
reasonable to assume that the notation reflects a deduction already taken
from the bid inside the envelope, as Qualicon argues.

Finally, with regard to the protester's argument that due to the
difference between the way Ronnie C. Pittman's signature appeared on the
bid and the way his initials appeared on the bid envelope, Pittman could
have disavowed the writing on the envelope as unauthorized, /1/ we think
that the agency properly may presume that an individual has signed his own
name or initials unless it is indicated that one party is signing on
behalf of another (e.g., John Doe by Jane Roe).
Since in this case it was
not indicated that the initials "RCP" on the bid envelope had been written
on behalf of Ronnie C. Pittman by another individual, we do not think that
Mr. Pittman could have disavowed the writing as not his own.

The protest is denied.
Accordingly, Qualicon's claim for bid preparation
costs and protest costs, including attorneys' fees, also is denied.

/1/ We note that this case is distinguishable from our decisions in Government Contract Services, Inc., B-226885, Aug. 27, 1987, 87-2 CPD Para. 204, and Barnes Electric Co., Inc., B-228651, Oct. 2, 1987, 87-2 CPD Para. 331, which also involved bid price modifications written on bid envelopes, in that here both the bid and the modification on the envelope were signed by the same individual. In Government Contract Services and Barnes, in contrast, the modification was not signed by the signatory of the bid form and there was no evidence in the bid package that the author of the modification had been authorized to modify the bid, which led the agency reasonably to question the enforceability of the modification.