B-156777, AUG. 11, 1965

B-156777, AUG. 11, 1965

TO UNITED STATES TRUCKING CORPORATION:

REFERENCE IS MADE TO A TELEGRAM DATED JULY 9, 1965, BEARING YOUR NAME AND THE NAMES OF MANGAM KESTER TRANSPORT (TRANSFER) CORPORATION, J. AND M. O- NEILL, INCORPORATED, ORSENBLATT'S EXPRESS, STEAMSHIP TRUCKING, INCORPORATED, AND WATERFRONT TRANSFER CORPORATION, TAKING EXCEPTION TO OUR DECISION B-156777, DATED JUNE 29, 1965 WHICH DENIED A PROTEST BY YOU AND THE OTHER FIRMS AGAINST AWARD OF A CONTRACT FOR MAIL MESSENGER SERVICE TO PRIDE TRANSPORTATION COMPANY.

BRIEFLY, THE POST OFFICE DEPARTMENT SOLICITED BIDS FOR THE SERVICES IN QUESTION ON FIVE MAIL MESSENGER ROUTES IN NEW YORK CITY UNDER FIVE ADVERTISEMENTS. ALL OF THE ADVERTISEMENTS SET FORTH ESTIMATED TRAFFIC FIGURES BY PIECES OR BAGS AND BY TRIPS FOR INFORMATIONAL PURPOSES ONLY, AND BIDDERS WERE REQUESTED TO QUOTE PER PIECE OR BAG PRICES AND MINIMUM TRIP RATES. THE SOLICITATIONS, HOWEVER, CLEARLY AND SPECIFICALLY STATED THAT THE LOW BID WOULD BE DETERMINED ON THE BASIS OF THE PER PIECE OR BAG PRICE QUOTED. ON SUCH BASIS, PRIDE, WITH A PER PIECE OR BAG PRICE OF $0.15, WAS LOW BIDDER.

IN THE INITIAL PROTEST, IT WAS CONTENDED THAT PRIDE WAS NOT QUALIFIED TO PERFORM THE SERVICES INVOLVED AND THAT ON AN OVERALL BASIS, CONSIDERING ITS MINIMUM TRIP RATE OF $60 AS WELL AS ITS PER PIECE OR BAG PRICE, PRIDE WAS NOT THE LOW BIDDER.

IN OUR DECISION OF JUNE 29, WHICH WAS ADDRESSED TO CAMBEIS TRUCKING COMPANY, ONE OF THE PARTICIPANTS IN THE ORIGINAL PROTEST, WE INDICATED THAT THE POST OFFICE DEPARTMENT REPORTED THAT IN PREVIOUS SOLICITATIONS IN THE NEW YORK REGION IN WHICH LANGUAGE SIMILAR TO THE DISPUTED LANGUAGE WAS USED NO QUESTION OF INTERPRETATION HAD ARISEN; ALSO, THAT MINIMUM TRIP RATE BILLINGS HAD BEEN VERY RARE OCCURRENCES IN THE PAST.

IT WAS OUR CONCLUSION THAT THE TERMS OF THE ADVERTISEMENTS REQUIRED EVALUATION OF THE BIDS ON A PER-PIECE OR PER-BAG PRICE BASIS. THEREFORE, WE STATED, SINCE PRIDE WAS LOW BIDDER ON SUCH BASIS, THE ACCEPTANCE OF AN OFFER MADE BY PRIDE SUBSEQUENT TO BID OPENING TO REDUCE ITS MINIMUM TRIP RATE FROM $60 TO $20 NOT BE SUBJECT TO OBJECTION. IN SUPPORT OF OUR HOLDING IN THIS RESPECT, WE CITED THE CASE OF ALEC LEITMAN V. UNITED STATES, 104 CT.CL. 324, AND 42 COMP. GEN. 170, 172. IN ADDITION, WE STATED THAT WE FOUND NO BASIS TO QUESTION THE CONTRACTING OFFICER'S DETERMINATION THAT PRIDE IS CAPABLE OF PERFORMING THE CONTRACT. WE ARE ADVISED THAT AWARD HAS SINCE BEEN MADE TO PRIDE.

IN SUBSTANCE, THE OBJECTIONS RAISED BY THE JULY 9 TELEGRAM TO OUR DECISION ARE AS FOLLOWS:

1. THE CLEAR AND LOGICAL INTENT OF THE SOLICITATIONS WAS THAT THE LOW BIDDER WOULD BE DETERMINED ON BOTH THE MINIMUM TRIP AND PER UNIT BASES.

2. IF THE MINIMUM TRIP RATE WAS NOT AN IMPORTANT FACTOR, WHY DID THE GOVERNMENT REQUIRE IT AND WHY DID PRIDE LOWER ITS RATE AFTER BID OPENING?

3. THE LEITMAN DECISION DOES NOT SHED LIGHT ON WHETHER PRIDE WAS THE LOWEST BIDDER.

4. 42 COMP. GEN. 170 RELATED TO PROPERTY LEASED TO THE GOVERNMENT AND, THEREFORE, HAS NO BEARING ON THE PROCUREMENTS IN QUESTION; ALSO, IT HAS NO BINDING EFFECT SINCE IT HAS APPARENTLY NEVER BEEN TESTED IN THE COURTS.

WHILE THE RECORD DOES NOT SHOW WHY MINIMUM TRIP RATES WERE REQUESTED IN THE BID SOLICITATIONS, THE RECORD DOES INDICATE THAT THE MINIMUM TRIP RATE HAS RARELY BEEN A DECISIVE FACTOR IN PAST SIMILAR PROCUREMENTS, AND FOR THAT REASON THE SOLICITATIONS RESTRICTED BID EVALUATION TO THE PER PIECE OR BAG BASIS ONLY. SUCH EVIDENCE, IN OUR OPINION, CLEARLY INDICATES THAT THE MINIMUM TRIP RATE WAS NOT CONSIDERED BY THE CONTRACTING AGENCY AS AN IMPORTANT FACTOR AND THAT THE EVALUATION PROVISION IN THE SOLICITATIONS REFLECTS THE INTENT OF SUCH AGENCY. ACCORDINGLY, WE FIND NO LEGAL BASIS TO ALTER OUR CONCLUSION IN OUR JUNE 29 DECISION THAT THE BIDS WERE REQUIRED TO BE EVALUATED ON THE PER PIECE OR BAG BASIS.

AS TO PRIDE'S REASON FOR OFFERING THE MINIMUM TRIP RATE REDUCTION AFTER BID OPENING, WE HAVE NO INFORMATION IN THIS REGARD.

CONCERNING YOUR CONTENTION THAT THE LEITMAN CASE HAS NO BEARING ON WHETHER PRIDE WAS THE LOWEST BIDDER, OUR CITATION OF THE CASE WAS NOT DIRECTED TO THAT POINT. RATHER, HAVING CONCLUDED THAT PRIDE WAS THE LOW BIDDER UNDER THE REQUIRED METHOD OF BID EVALUATION, WE THEN PROCEEDED TO CONSIDER THE PROPRIETY OF ACCEPTANCE BY THE PROCURING AGENCY OF PRIDE'S POST-BID OPENING OFFER OF A REDUCTION IN ITS MINIMUM TRIP RATE, AND WE CONCLUDED FURTHER THAT ITS ACCEPTANCE WOULD NOT BE SUBJECT TO OBJECTION UNDER THE PRINCIPLE ENUNCIATED IN BOTH THE LEITMAN CASE AND 42 COMP. GEN. 170, 172, THAT THE ACCEPTANCE OF A BID MODIFICATION BY A BIDDER WHO HAS ALREADY BEEN DETERMINED TO HAVE SUBMITTED THE LOWEST POSSIBLE BID IS NOT PREJUDICIAL TO OTHER BIDDERS. THE CITATIONS WERE GIVEN SOLELY TO SUPPORT OUR SECOND CONCLUSION. IN THIS CONNECTION, IT MAY BE STATED THAT APPLICATION OF THE PRINCIPALS INVOLVED IS NOT RESTRICTED TO THE EXACT TYPES OF CONTRACTS CONSIDERED IN LEITMAN AND 42 COMP. GEN. 170, AND IT IS TO BE NOTED THAT THE BID MODIFICATION NEED NOT BE IN THE NATURE OF A PRICE REDUCTION. SEE 37 COMP. GEN. 251; 39 ID. 779, 781; 40 ID. 466, 468.

CONSISTENT WITH THE LEITMAN CASE AND OUR DECISIONS, SUBPART 1-2.305 OF THE FEDERAL PROCUREMENT REGULATIONS, PROVIDES IN PERTINENT PART, AS FOLLOWS:

"LATE MODIFICATIONS AND WITHDRAWALS.

"* * * A LATE MODIFICATION OF THE OTHERWISE SUCCESSFUL BID SHALL BE OPENED AT ANY TIME IT IS RECEIVED; AND IF IN THE JUDGMENT OF THE CONTRACTING OFFICER IT MAKES THE TERMS OF THE BID MORE FAVORABLE TO THE GOVERNMENT, IT SHALL BE CONSIDERED. * * *.'

AS CAN BE SEEN FROM THE WORDING OF THE REGULATION, ALL THAT IS NECESSARY TO WARRANT CONSIDERATION OF AN OFFER SUCH AS PRIDE-S, ONCE IT IS DETERMINED THAT THE OFFEROR IS THE LOW RESPONSIVE BIDDER, IS THAT THE OFFER MAKE THE TERMS OF THE BID MORE FAVORABLE TO THE GOVERNMENT. CLEARLY, PRIDE'S OFFER, LIKE THE OFFER IN 42 COMP. GEN. 170, DOES MEET SUCH REQUIREMENT.

AS FOR YOUR CONTENTION THAT 42 COMP. GEN. 170 IS NOT BINDING SINCE IT HAS NOT BEEN TESTED IN THE COURTS, YOU ARE ADVISED THAT BY LAW (31 U.S.C. 41 ET SEQ.) ONE OF THE PRIMARY DUTIES OF OUR OFFICE IS TO DETERMINE THE VALIDITY OF ADMINISTRATIVE EXPENDITURES OF PUBLIC FUNDS, AND WHERE SUCH EXPENDITURES ARE MADE PURSUANT TO CONTRACTS OUR DETERMINATION NECESSARILY INVOLVES CONSIDERATION OF THE VALIDITY OF SUCH CONTRACTS. BY VIRTUE OF STATUTE OUR DECISIONS ON SUCH QUESTIONS ARE CONCLUSIVE ON THE EXECUTIVE BRANCH OF THE GOVERNMENT IRRESPECTIVE OF THE WAY IN WHICH THE QUESTIONS ARISE. ADVANCE DECISIONS OF OUR OFFICE AS TO THE PROPRIETY OF PROPOSED ACTION ARE ALSO BINDING UPON US IN THE AUDIT, AND WHERE AS IN THIS INSTANCE A CONTRACT HAS BEEN AWARDED PURSUANT TO OUR DECISION WE MAY NOT THEREAFTER TAKE EXCEPTION THERETO UNLESS IT CLEARLY APPEARS THAT SUCH DECISION WAS RENDERED UPON AN ERRONEOUS STATEMENT OF THE PERTINENT FACTS.

SINCE YOU HAVE PRESENTED NO FACTUAL MATTERS DIFFERING FROM THOSE ON WHICH OUR DECISION OF JUNE 29, 1965, WAS BASED, WE ARE CONSTRAINED TO ADHERE TO THAT DECISION, WHICH WE BELIEVE WAS ALSO CORRECT IN POINT OF LAW. YOU ARE OF COURSE FREE TO PURSUE ANY JUDICIAL REMEDY WHICH YOU MAY FIND AVAILABLE.