A-25283, DECEMBER 13, 1928, 8 COMP. GEN. 299

A-25283: Dec 13, 1928

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REQUESTING DECISION WHETHER YOU ARE AUTHORIZED. THE MATTER BEING SUBMITTED AS TO WHETHER PAYMENT IS AUTHORIZED "IN VIEW OF THE FACTS AND CONDITIONS SET FORTH IN THE CORRESPONDENCE ACCOMPANYING THE VOUCHER.'. THIS IS NOT A PROPER FORM OF SUBMISSION. WHICH IS ONE OF THE INCLOSURES WITH YOUR SUBMISSION. THAT FOUR BIDS WERE RECEIVED IN RESPONSE TO ADVERTISEMENTS FOR THE PAINTING WORK IN QUESTION. ON REPRESENTATION THAT A MISTAKE WAS MADE IN THE SUBMISSION OF SAME. THE QUESTION OF ACCEPTANCE OF BID WAS THEN LIMITED TO THE TWO NEXT LOWEST BIDS. THE COMMISSIONER OF IMMIGRATION AT ELLIS ISLAND WAS INSTRUCTED TO ACCEPT THE BID OF $8. THE BASIS OF THIS ACTION SEEMED TO BE THAT IT WAS TO THE INTEREST OF THE UNITED STATES TO PAY $143 MORE FOR THE WORK TO SECURE THE COMPLETION OF SAME 60 DAYS EARLIER.

A-25283, DECEMBER 13, 1928, 8 COMP. GEN. 299

ADVERTISING - BIDS - ACCEPTANCE ON BASIS OF ELEMENT NOT MENTIONED IN ADVERTISEMENT A BID SHOULD NOT BE ACCEPTED BECAUSE THE BIDDER PROPOSES TO DO THE WORK IN LESS TIME THAN THE LOWEST BIDDER WHEN THE ADVERTISEMENT FOR PROPOSALS HAS NOT NOTIFIED ALL CONCERNED THAT THE TIME ELEMENT WOULD BE CONSIDERED IN THE ACCEPTANCE OF BIDS.

COMPTROLLER GENERAL MCCARL TO R. P. BROWN, DISBURSING CLERK, DEPARTMENT OF LABOR, DECEMBER 13, 1928:

THERE HAS BEEN RECEIVED YOUR LETTER DATED NOVEMBER 27, 1928, REQUESTING DECISION WHETHER YOU ARE AUTHORIZED, UNDER CONTRACT LI 2043, DATED AUGUST 20, 1928, TO PAY $5,473.12 AS 68 PERCENT OF THE CONTRACT PRICE OF $8,943, LESS 10 PERCENT RESERVED PENDING COMPLETION, STATED ON AN APPROVED VOUCHER IN FAVOR OF NEPTUNE B. SMYTH (INC.), FOR PAINTING THE ADMINISTRATION, BAGGAGE AND DORMITORY, KITCHEN AND LAUNDRY BUILDINGS, AND POWER HOUSE ON ISLAND NO. 1, ELLIS ISLAND, N.Y. THE QUESTION ON WHICH YOU REQUEST DECISION IN CONNECTION WITH THIS MATTER HAS NOT BEEN FORMULATED, THE MATTER BEING SUBMITTED AS TO WHETHER PAYMENT IS AUTHORIZED "IN VIEW OF THE FACTS AND CONDITIONS SET FORTH IN THE CORRESPONDENCE ACCOMPANYING THE VOUCHER.' THIS IS NOT A PROPER FORM OF SUBMISSION. SEE 25 COMP. DEC. 653.

IT APPEARS FROM AN OPINION DATED OCTOBER 19, 1928, OF THE SOLICITOR FOR THE DEPARTMENT OF LABOR, WHICH IS ONE OF THE INCLOSURES WITH YOUR SUBMISSION, THAT FOUR BIDS WERE RECEIVED IN RESPONSE TO ADVERTISEMENTS FOR THE PAINTING WORK IN QUESTION. ONE OF THE BIDDERS PROPOSED TO DO THE WORK IN 90 CALENDAR DAYS FOR $3,985; ANOTHER BIDDER PROPOSED TO DO THE WORK IN 150 CALENDAR DAYS FOR $8,800; A THIRD BIDDER PROPOSED TO DO THE WORK IN 90 CALENDAR DAYS FOR $8,943, ON REPRESENTATION THAT A MISTAKE WAS MADE IN THE SUBMISSION OF SAME, THE MISTAKE BEING THAT THE BIDDER "HAD PLACED A CARD ON HIS DESK WITH TWO SEPARATE ITEMS, EACH IN THE AMOUNT OF $3,985, COVERING ALL THE WORK IN THE SPECIFICATIONS WHICH HE INTENDED HIS EMPLOYEE TO ADD TOGETHER IN PREPARING THE BID SHEET, THUS MAKING THE TOTAL AMOUNT OF HIS BID $7,970.' THE QUESTION OF ACCEPTANCE OF BID WAS THEN LIMITED TO THE TWO NEXT LOWEST BIDS--- ONE BIDDER PROPOSING TO DO THE WORK FOR $8,800 IN 150 CALENDAR DAYS AND THE OTHER BIDDER PROPOSING TO DO THE WORK IN 90 CALENDAR DAYS FOR $8,943. THE COMMISSIONER OF IMMIGRATION AT ELLIS ISLAND WAS INSTRUCTED TO ACCEPT THE BID OF $8,943 BECAUSE THE BIDDER PROPOSED TO DO THE WORK IN 60 CALENDAR DAYS LESS TIME THAN THE BIDDER SUBMITTING THE PROPOSAL OF $8,800. THE BASIS OF THIS ACTION SEEMED TO BE THAT IT WAS TO THE INTEREST OF THE UNITED STATES TO PAY $143 MORE FOR THE WORK TO SECURE THE COMPLETION OF SAME 60 DAYS EARLIER.

HOWEVER, AFTER THE BID HAD BEEN ACCEPTED, IT DEVELOPED THAT NOWHERE IN THE ADVERTISEMENT HAD PROSPECTIVE BIDDERS BEEN NOTIFIED THAT TIME WAS AN ESSENTIAL ELEMENT OF THE CONTRACT, AND DOUBT AROSE AS TO WHETHER THE AWARD HAD BEEN PROPERLY MADE. THE SOLICITOR OF THE DEPARTMENT OF LABOR CORRECTLY STATED IN HIS OPINION OF OCTOBER 19, 1928, THAT---

* * * TO REJECT THE LOWEST BID BECAUSE OF NONCOMPLIANCE WITH A CONDITION THAT THE BIDDER WAS NOT GIVEN REASONABLE NOTICE WOULD BE MATERIAL IN DETERMINING THE AWARD CREATES A SITUATION WHERE THE BIDDERS ARE NOT PLACED ON A FAIR AND EQUAL BASIS AND DENIES THE GOVERNMENT THE FUNDAMENTAL RIGHT TO FULL AND FREE COMPETITION IN THE SOLICITATION OF BIDS. * * * CITING 8 COMP. GEN. 52.

THIS VIEW OF THE SOLICITOR OF THE DEPARTMENT OF LABOR IS NOT ONLY IN ACCORD WITH THE DECISIONS OF THIS OFFICE BUT IT IS IN ACCORD WITH AN OPINION, DATED OCTOBER 13, 1928, OF THE ATTORNEY GENERAL, CONCERNING THE INVALIDITY OF CERTAIN CONTRACTS FOR THE SALE OF CRUDE OIL FROM THE SALT CREEK FIELD, WHERE HE STATED---

IT IS WELL ESTABLISHED LAW THAT A PUBLIC OFFICER GIVEN POWER BY STATUTE TO ENTER INTO A CONTRACT ON BEHALF OF THE PUBLIC WITH THE BEST BIDDER, HAS NO POWER TO GRANT THAT BIDDER ANY TERM MATERIALLY ADVANTAGEOUS TO HIM WHICH WAS NOT ANNOUNCED IN THE ADVERTISEMENT FOR BIDS. THE CONTRACT ENTERED INTO MUST BE THE CONTRACT OFFERED TO THE HIGHEST RESPONSIBLE BIDDER BY ADVERTISEMENT. * * *

THIS VIEW OF THE MATTER APPEARS TO HAVE BEEN ACCEPTED IN THE DEPARTMENT OF LABOR, FOR, UNDER DATE OF OCTOBER 25, 1928, THE ASSISTANT SECRETARY WROTE THE COMMISSIONER OF IMMIGRATION AT ELLIS ISLAND IN REFERENCE TO THE CONTRACT, WHEREIN HE DIRECTED---

* * * THAT IN ALL CASES ARISING HEREAFTER WHERE TIME IS TO BE OF THE ESSENCE OF THE CONTRACT THE INVITATION TO BIDDERS AND THE SPECIFICATIONS SHALL CLEARLY STATE THE PERIOD OF TIME WITHIN WHICH THE WORK PRESCRIBED BY THE CONTRACT MUST BE PERFORMED. THE SAME PERIOD OF TIME SHOULD BE STATED IN EACH INVITATION AND SPECIFICATION RELATING TO THE SAME CONTRACT, AND THE PERIOD OF TIME SHOULD BE REASONABLE AND FAIR BOTH TO THE GOVERNMENT AND TO THE BIDDERS.

THE BID OF $8,943, WHICH WAS NOT THE LOWEST, SHOULD NOT HAVE BEEN ACCEPTED BECAUSE OF THE DIFFERENCE IN TIME WHEN PROSPECTIVE BIDDERS HAD NOT BEEN NOTIFIED THAT TIME WOULD BE AN ESSENCE OF THE CONTRACT AND WOULD BE CONSIDERED IN MAKING THE AWARD. HOWEVER, THE MISTAKE HAVING BEEN MADE OF INSTRUCTING THE COMMISSIONER TO ACCEPT THE BID OF $8,943, AND THE PROPER ADMINISTRATIVE ACTION HAVING BEEN TAKEN TO PREVENT THE RECURRENCE OF SUCH MISTAKE, THE CONTRACT WILL NOT BE FURTHER QUESTIONED BY THIS OFFICE BECAUSE THE AWARD WAS TO OTHER THAN THE LOWEST BIDDER.