B-150529, FEB. 12, 1964

B-150529, FEB. 12, 1964

TO PEED AND WISE:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 31, 1963, REQUESTING RECONSIDERATION OF OUR DECISIONS DATED FEBRUARY 25 AND SEPTEMBER 19, 1963, CONCERNING ARMY CONTRACT NO. DA-04-167-ENG-2761, WHICH WAS AWARDED TO THE SHARPS CONSTRUCTION COMPANY, ARROYO GRANDE, CALIFORNIA, PURSUANT TO INVITATION FOR BIDS NO. ENG-04-167-63-33, ISSUED BY THE DISTRICT ENGINEER, U.S. ARMY ENGINEER DISTRICT, SACRAMENTO, CALIFORNIA. THE CONTRACT WAS CANCELED ON MARCH 15, 1963, IN ACCORDANCE WITH OUR DECISION DATED FEBRUARY 25, 1963, TO THE SECRETARY OF THE ARMY, ON THE PROTEST OF THE JEN-MAR CONSTRUCTION COMPANY, SAN DIEGO, CALIFORNIA, ONE OF THE TWO LOWEST BIDDERS; AND A CLAIM OF THE SHARPS CONSTRUCTION COMPANY, IN THE AMOUNT OF $23,546.69, FOR EXPENSES ALLEGEDLY INCURRED PRIOR TO CANCELLATION OF THE CONTRACT, PLUS LEGAL FEES AND PROFIT, WAS DISALLOWED BY THE DECISION DATED SEPTEMBER 19, 1963.

THE PERTINENT FACTS OF THE CASE ARE AS FOLLOWS: THE INVITATION CALLED FOR THE SUBMISSION OF A BASE BID FOR CONSTRUCTION OF A STUDENT DORMITORY AND APPURTENANT FACILITIES AT THE PRESIDIO, MONTEREY, CALIFORNIA. IT ALSO CALLED FOR THE SUBMISSION OF BIDS FOR FIVE ADDITIVE ITEMS AND IT WAS CONTEMPLATED THAT ONE OR MORE OF THE ADDITIVE ITEMS OF WORK WOULD BE INCLUDED IN THE CONTRACT AWARD IF FUNDS WERE AVAILABLE FOR THAT PURPOSE. THE SHARPS CONSTRUCTION COMPANY WAS THE LOW BIDDER FOR THE "BASE SCHEDULE" AND IT REMAINED THE LOW BIDDER UNTIL CONSIDERATION OF PRICES QUOTED FOR ADDITIVE ITEM NO. 4. THE COMPANY ALLEGED THAT ITS $24,065 BID PRICE FOR ADDITIVE ITEM NO. 4 WAS INTENDED TO BE $2,465, AND THE CONTRACTING OFFICER ALLOWED THE BID TO BE CORRECTED WITH THE RESULT THAT SHARPS' TOTAL BID FOR THE "BASE SCHEDULE" AND ALL ADDITIVE ITEMS DISPLACED THE LOWER TOTAL BID OF THE JEN-MAR CONSTRUCTION COMPANY. WE HELD THAT CORRECTION OF SHARPS' BID WAS IMPROPER AND THAT THE AWARD TO THAT COMPANY COULD NOT BE JUSTIFIED ON THE BASIS THAT IT HAD SUBMITTED THE LOWEST "BASE SCHEDULE" BID AND THE SUM OF $705,000, ANNOUNCED IMMEDIATELY PRIOR TO BID OPENING AS AVAILABLE FOR CONTRACT AWARD, WAS INSUFFICIENT TO PERMIT THE INCLUSION OF EITHER ADDITIVE NO. 1 OR ADDITIVE NO. 2 IN THE PROPOSED CONTRACT. WE ALSO CONSIDERED THAT THERE WAS AN AMBIGUITY OR POSSIBLE CONTRADICTION INHERENT IN THE AWARD PROVISIONS OF THE INVITATION FOR BIDS RESPECTING THE USE OF THE TERMS "FUNDS LIMITATION" AND "ANNOUNCED AVAILABLE FUNDS; " AND THE FACT THAT THE GOVERNMENT'S NEED FOR ALL OF THE ADDITIVE ITEMS WAS DETERMINED WITH SPECIFIC REFERENCE TO THE COST THAT THE GOVERNMENT WOULD INCUR IF IT ACCEPTED SHARPS' CORRECTED BID. IN SUCH CIRCUMSTANCES, IT WAS CONCLUDED THAT THE AWARD TO SHARPS SHOULD BE CANCELED AND THAT NO AWARD SHOULD BE MADE TO THE PROTESTING BIDDER UNDER INVITATION NO. ENG-04-167-63 -33. THE DECISION WHICH DENIED THE CLAIM FOR $23,546.69 IS TO THE EFFECT THAT THE CANCELED CONTRACT WAS INVALID BECAUSE IT WAS AWARDED CONTRARY TO THE ADVERTISING REQUIREMENTS OF 10 U.S.C. 2304 AND 2305; AND THAT NO PART OF THE CLAIM COULD BE ALLOWED BECAUSE THE GOVERNMENT OBTAINED NO BENEFIT FROM THE WORK ALLEGEDLY PERFORMED BY SHARPS ON THE BASIS OF ITS BELIEF THAT A NOTICE TO PROCEED WOULD BE ISSUED.

WE BELIEVE THAT THE AWARD PROVISIONS OF THE INVITATION FOR BIDS IN THIS CASE WERE SO AMBIGUOUS AS TO REQUIRE THE CONCLUSION THAT THEY DID NOT PERMIT THE FREE AND OPEN COMPETITION REQUIRED BY THE PROVISIONS OF SECTION 2305, TITLE 10, U.S.C. AND THAT THE AWARD TO SHARPS WAS OTHERWISE ILLEGAL FROM THE STANDPOINT THAT SHARPS WAS PERMITTED TO CHANGE ITS BID CONTRARY TO THE ESTABLISHED RULE OF FORMAL COMPETITIVE PROCUREMENT THAT BIDS MAY NOT BE CHANGED AFTER PUBLIC OPENING OR CORRECTED IN THE CASE OF AN ALLEGED MISTAKE IN BID IF SUCH ACTION WOULD BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. IN OUR OPINION, CORRECTION OF THE MISTAKE HERE INVOLVED WAS NOT AUTHORIZED UNDER THE PROVISIONS OF SECTION 2-406 OF THE ARMED SERVICES PROCUREMENT REGULATION, GOVERNING THE CONSIDERATION OF ALLEGED MISTAKES IN BIDS AS RELATED TO THE QUESTION WHETHER OR NOT A PARTICULAR BID MAY BE CORRECTED BECAUSE OF A MISTAKE AND THEN CONSIDERED FOR AWARD.

IN REQUESTING A REVIEW OF THE MATTER, YOU REFER PARTICULARLY TO THE DECEMBER 13, 1963, DECISIONS RENDERED BY THE COURT OF CLAIMS ON SUITS BY TWO FIRMS WHOSE CONTRACTS WERE CANCELED BY GOVERNMENT AGENCIES FOLLOWING RULINGS BY THIS OFFICE ON PROTESTS OF UNSUCCESSFUL BIDDERS. (JOHN REINER AND COMPANY V. UNITED STATES, CT.CL. NO. 431-57; AND BROWN AND SON ELECTRIC COMPANY V. UNITED STATES, CT.CL. NO. 76-61). IN EACH CASE JUDGMENT WAS RENDERED IN FAVOR OF THE PLAINTIFF. THE FACTS OF THE REINDER CASE REASONABLY APPEAR TO SUPPORT THE COURT'S CONCLUSION THAT THE REINDER CONTRACT WAS VALID. HOWEVER, WE HAVE RECOMMENDED TO THE DEPARTMENT OF JUSTICE THAT A PETITION FOR WRIT OF CERTIORARI BE FILED WITH RESPECT TO THE JUDGMENT ENTERED IN FAVOR OF BROWN AND SON ELECTRIC COMPANY.

WE QUESTION YOUR CONTENTION THAT THE BROWN CASE "IS ON ALL FOURS WITH THE SUBJECT CASE," SINCE THE INVITATION INVOLVED IN BROWN CLEARLY STATED THAT "AWARD WILL BE MADE ON THE LOWEST RESPONSIVE BASE BID.' HERE, THE INVITATION CALLED FOR EVALUATION OF BIDS "WITHIN THE FUNDS LIMITATION" ON THE BASIS OF THE AGGREGATE COST OF THE BASE SCHEDULE AND ALL OF THE ADDITIVE ITEMS IN THE ORDER OF THEIR STATED PRIORITY, AND IT IS IMPOSSIBLE TO DETERMINE FROM OTHER LANGUAGE IN THE AWARD PROVISIONS OF THE INVITATION WHETHER THIS BASIS FOR BID EVALUATION WAS INTENDED TO BE CHANGED ,"FUNDS" IN ADDITION TO THE SUM ANNOUNCED PRIOR TO BID OPENING AS AVAILABLE FOR CONTRACT AWARD WERE INCREASED TO PERMIT THE INCLUSION OF ALL ADDITIVE ITEMS IN THE PROPOSED CONTRACT.

IN THE PARTICULAR CIRCUMSTANCES, WE REMAIN OF THE OPINION THAT THE CONTRACT WITH THE SHARPS CONSTRUCTION COMPANY WAS INVALID, AND WE CONSIDER THE CLAIM PRESENTED BY THAT COMPANY TO BE OF SUCH DOUBTFUL VALIDITY AS TO REQUIRE ITS REJECTION BY THIS OFFICE. SEE LONGWILL V. UNITED STATES, 17 CT.CL. 288, 291; AND CHARLES V. UNITED STATES, 19 CT.CL. 316, 319. ACCORDINGLY, THE DECISION OF SEPTEMBER 19, 1963, WHICH DISALLOWED THE CLAIM FOR $23,546.69, IS AFFIRMED.