A-27635, JUNE 17, 1929, 8 COMP. GEN. 649

A-27635: Jun 17, 1929

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SHOULD NOTIFY PROSPECTIVE BIDDERS OF THE BASIS ON WHICH BIDS WILL BE EVALUATED IF CONSIDERATION IS TO BE GIVEN TO FACTORS OTHER THAN THE AMOUNTS OF THE BIDS IN MAKING THE AWARD. THE AMOUNT TO BE FIXED AS LIQUIDATED DAMAGES IN CASE OF DELAY IN COMPLETION OF A CONTRACT FOR THE PERFORMANCE OF PUBLIC WORK SHOULD BE AS NEARLY AS CAN BE ESTIMATED THE AMOUNT OF THE GOVERNMENT'S LOSS OR DAMAGE AS A RESULT OF THE DELAY AND WHEN THE AMOUNT IS SO FIXED IT MAY BE CONSIDERED IN EVALUATING BIDS SPECIFYING DIFFERENT TIMES FOR PERFORMANCE. AS FOLLOWS: INCLOSED ARE ALL BIDS RECEIVED BY THE SUPERINTENDENT OF LIGHTHOUSES. THESE BIDS WERE OPENED MAY 29. THE LOWEST BID IS THAT OF CHARLESTON DRY DOCK AND MACHINE COMPANY.

A-27635, JUNE 17, 1929, 8 COMP. GEN. 649

ADVERTISING - BIDS - SPECIFICATIONS - LIQUIDATED DAMAGES ADVERTISEMENTS FOR PROPOSALS FOR THE PERFORMANCE OF PUBLIC WORK UNDER THE PROVISIONS OF SECTION 3709, REVISED STATUTES, SHOULD NOTIFY PROSPECTIVE BIDDERS OF THE BASIS ON WHICH BIDS WILL BE EVALUATED IF CONSIDERATION IS TO BE GIVEN TO FACTORS OTHER THAN THE AMOUNTS OF THE BIDS IN MAKING THE AWARD. THE AMOUNT TO BE FIXED AS LIQUIDATED DAMAGES IN CASE OF DELAY IN COMPLETION OF A CONTRACT FOR THE PERFORMANCE OF PUBLIC WORK SHOULD BE AS NEARLY AS CAN BE ESTIMATED THE AMOUNT OF THE GOVERNMENT'S LOSS OR DAMAGE AS A RESULT OF THE DELAY AND WHEN THE AMOUNT IS SO FIXED IT MAY BE CONSIDERED IN EVALUATING BIDS SPECIFYING DIFFERENT TIMES FOR PERFORMANCE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF COMMERCE, JUNE 17, 1929:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 11, 1929, AS FOLLOWS:

INCLOSED ARE ALL BIDS RECEIVED BY THE SUPERINTENDENT OF LIGHTHOUSES, KEY WEST, FLORIDA, ON HIS PROPOSAL NO. 7865 FOR DOCKING AND MAKING REPAIRS AND ALTERATIONS TO THE LIGHTHOUSE TENDER IVY. THESE BIDS WERE OPENED MAY 29, 1929. THE LOWEST BID IS THAT OF CHARLESTON DRY DOCK AND MACHINE COMPANY, CHARLESTON, S.C., IN THE AMOUNT OF $38,611.58 FOR PERFORMING THE WORK IN 90 WORKING DAYS. THE NEXT LOWEST BID IS THAT OF THE GIBBS GAS ENGINE COMPANY, JACKSONVILLE, FLORIDA, IN THE AMOUNT OF $39,329.70, WORK TO BE COMPLETED IN 90 CALENDAR DAYS. THE KEY WEST MARINE RAILWAY COMPANY, KEY WEST, FLORIDA, BID $43,360.50 FOR PERFORMING THE WORK IN 80 CALENDAR DAYS.

THERE IS ALSO INCLOSED A TABULATED STATEMENT SETTING FORTH THE COSTS THAT WOULD BE INVOLVED IN THE ACCEPTANCE OF EACH OF THESE BIDS, INCLUDING NOT ONLY THE CONTRACT PRICE BUT THE STEAMING COSTS, THE PROBABLE AMOUNT OF OPTIONAL WORK REQUIRED, INSPECTION, AND THE LOSS OF THE TENDER'S TIME FOR THE CONTRACT PERIOD WHICH LOSS PER DAY REPRESENTS THE AVERAGE DAILY COST OF OPERATION. A COMPARISON OF THE BIDS ON THIS BASIS SHOWS THAT THE GIBBS GAS ENGINE COMPANY OF JACKSONVILLE IS LOWER THAN ANY OTHER BY THE AMOUNT OF $437.16.

THE INVITATION FOR BIDS DID NOT SPECIFICALLY STATE THAT TIME OF PERFORMANCE WOULD BE CONSIDERED IN MAKING THE AWARD, ALTHOUGH LIQUIDATED DAMAGES WERE SPECIFIED AT THE RATE OF $10 PER DAY. WHILE IT IS DESIRABLE THAT THE WORK BE EXPEDITED, YET THIS DEPARTMENT COULD NOT CERTIFY THAT IT MUST OF NECESSITY BE COMPLETED IN 80 OR 90 CALENDAR DAYS. THE MAXIMUM CONTRACT PERIOD ALLOWABLE WAS NOT STATED IN THE PROPOSAL, AND ALL BIDDERS THUS QUOTED THE TIME WITHOUT INSTRUCTIONS FROM THE GOVERNMENT AS TO THE DEGREE OF URGENCY OF THE WORK.

IT APPEARS TO THIS DEPARTMENT THAT THE CONTRACT SHOULD BE AWARDED TO THE CHARLESTON DRY DOCK AND MACHINE COMPANY. WHILE THE AVERAGE DAILY COST OF OPERATION OF THE VESSEL AS SHOWN BY THE COST-KEEPING RECORDS IS $141.41, YET AT THE TIME PROPOSALS WERE ISSUED IT WAS ESTIMATED THAT THE PROBABLE LOSS TO THE GOVERNMENT FOR DELAY IN COMPLETION OF THE CONTRACT WOULD BE $10 PER DAY. IT WOULD SEEM, THEREFORE, THAT THE CONTRACT COULD NOT BE AWARDED TO OTHER THAN THE CHARLESTON DRY DOCK AND MACHINE COMPANY BY PLACING A VALUE OF MORE THAN $10 PER DAY ON THE DIFFERENCE IN TIME. APPEARS ALSO THAT IN THIS CASE IT WOULD NOT BE PERMISSIBLE TO CONSIDER THE DIFFERENCE IN TIME IN MAKING THE AWARD, AS THIS WOULD SEEM TO BE CONTRARY TO A DECISION OF THE COMPTROLLER GENERAL DATED JULY 31, 1928, 8 COMP. GEN. 52.

THE WORK UNDER THIS PROPOSED CONTRACT WILL NOT BE COMPLETED BEFORE THE HURRICANE SEASON, NO MATTER WHICH BID IS ACCEPTED, AND CERTAIN HAZARDS WILL BE INCURRED IN STEAMING THE VESSEL BACK TO KEY WEST FROM EITHER CHARLES OR JACKSONVILLE, WHICH IS A CONSIDERATION IN FAVOR OF THE BID OF THE KEY WEST MARINE RAILWAY COMPANY, SINCE THE WORK WOULD BE PERFORMED AT KEY WEST IF THIS BID WERE ACCEPTED. THE DISTANCE FROM CHARLESTON TO JACKSONVILLE IS ABOUT 198 MILES AND THE DISTANCE FROM JACKSONVILLE TO KEY WEST IS ABOUT 500 MILES. IT IS NOT POSSIBLE, HOWEVER, TO STATE THE EQUIVALENT OF THIS HAZARD IN DOLLARS AND CENTS.

THE COST OF INSPECTION IF THE WORK WERE PERFORMED AT JACKSONVILLE WOULD BE $788.44, WHEREAS NO ADDITIONAL INSPECTION COSTS WOULD BE INVOLVED IF THE WORK IS PERFORMED AT EITHER CHARLESTON OR KEY WEST. AT KEY WEST INSPECTION WOULD BE MADE BY THE PERSONNEL ATTACHED TO THE SUPERINTENDENT'S OFFICE, WHEREAS AT CHARLESTON THE BUREAU OF LIGHTHOUSES NOW MAINTAINS INSPECTORS ENGAGED IN SUPERVISING THE CONSTRUCTION OF THREE NEW LIGHTSHIPS AND THEY WOULD BE AVAILABLE FOR INSPECTION DUTY AT CHARLESTON IF THE CONTRACT FOR REPAIRS TO THE IVY WERE PERFORMED THERE.

YOUR EARLY DECISION IS RESPECTFULLY REQUESTED AS TO WHICH OF THESE BIDS SHOULD BE ACCEPTED. THE BID OF THE MERRILL STEVENS DRY DOCK AND REPAIR COMPANY IN THE AMOUNT OF $40,850.00 WAS NOT MENTIONED ABOVE, ALTHOUGH IT IS INCLOSED, AS THIS CONTRACTOR'S WORKS IS ALSO LOCATED AT JACKSONVILLE, AND IT APPEARS THAT IF THE WORK IS TO BE PERFORMED AT JACKSONVILLE THE CONTRACT WILL HAVE TO BE AWARDED TO THE GIBBS GAS ENGINE COMPANY, WHOSE BID IS LOWER THAN THAT OF THE MERRILL STEVENS DRYDOCK AND REPAIR COMPANY. EACH OF THESE TWO BIDDERS QUOTES THE SAME CONTRACT TIME.

A TABULATED STATEMENT OF THE ANALYSIS OF THE BIDS WHICH ACCOMPANIED THE SUBMISSION IS AS FOLLOWS:

STATEMENT

BID ANALYSIS PRO. NO. 7865--- TENDER "IVY" REPAIRS KEY

WEST GIBBS GAS MERRILL-STEVENS CHARLESTON

MARINE ENGINE CO., DRY DOCK AND

CO., CO., JACKSONVILLE, MCH. CO.,

KEY JACKSONVILLE, FLA. CHARLESTON,

FLA. FLA. S.C.

ROUND TRIP FROM AND RETURN TO

KEY WEST -- MILES ------------ 0 900 900 1,200 ESTIMATED TIME TO MAKE TRIP -------- DAYS ------------- 0 4 2/3 4 2/3 6 1/4 TIME TO DO WORK ----- -- CALENDAR DAYS ------------- 80 90 90 106A

-------- ------------- -------------- ---------- - ESTIMATES COST OF TRIP AT $296.27 P.D -------------- 0.00 1,382.60 1,382.60 1,851.69 ESTIMATED LOSS OF TENDER WHILE UNDER REPAIRS AT $141.41 P.D ------ 11,312.80 12,726.90 12,726.90

14,989.46 TOTAL OF BIDS ---- 43,360.50 39,329.70 40,850.00 38,611.58 ESTIMATED TOTAL OF OPTIONAL ITEMS ------------ 65.25 73.75 45.00 47.50 SUPERVISION-- SALARY, SUBSISTENCE, AND TRANSPORTATION --- 0.00 788.44 788.44

0.00

---------- ------------ ----------- ------- -- TOTALS ----------- 54,738.55 54,301.39 55,792.94 55,500.23

THE ADVERTISEMENT FOR PROPOSALS NOTIFIED PROSPECTIVE BIDDERS, AMONG OTHER THINGS, THAT THEY SHOULD "STIPULATE IN THEIR BIDS THE DATE ON WHICH THEY WILL GUARANTEE THE COMPLETION OF THE WORK UNDER THESE SPECIFICATIONS" AND THAT LIQUIDATED DAMAGES AT THE RATE OF $10 PER DAY WOULD BE DEDUCTED FOR EACH AND EVERY DAY OF DELAY NOT WITHIN THE PROVISIONS OF ARTICLE 9 OF THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT BUT DID NOT SPECIFICALLY STATE THAT TIME OF DELIVERY WOULD BE CONSIDERED IN MAKING THE AWARD OR INDICATE THAT THE VALUE OF THE SERVICES OF THE VESSEL WOULD BE OTHER THAN THE AMOUNT STIPULATED AS LIQUIDATED DAMAGES. NOTHING WAS SAID IN THE ADVERTISEMENT TO NOTIFY PROSPECTIVE BIDDERS THAT COSTS OF INSPECTION AND SUPERINTENDENCE WOULD BE CONSIDERED IN MAKING THE AWARD OR THAT THE GOVERNMENT'S EXPENSES THEREFOR WOULD BE ANY MORE AT ONE PLACE THAT AT ANOTHER.

THIS OFFICE HAS HELD IN NUMEROUS DECISIONS THAT THE CONTRACT OFFERED THE SUCCESSFUL BIDDER MUST BE THE EXACT CONTRACT WHICH WAS SUBMITTED TO COMPETITION, AND ATTENTION IS INVITED TO 8 COMP. GEN. 299, 300, WHEREIN THERE WAS QUOTED AN EXTRACT FROM AN OPINION DATED OCTOBER 13, 1928, OF THE ATTORNEY GENERAL THAT NO ADMINISTRATIVE OFFICER HAS ANY POWER TO GRANT ANY BIDDER ANY TERM MATERIALLY ADVANTAGEOUS TO HIM WHICH WAS NOT ANNOUNCED IN THE ADVERTISEMENT FOR BIDS AND THAT "THE CONTRACT ENTERED INTO MUST BE THE CONTRACT OFFERED TO THE * * * BIDDER BY ADVERTISEMENT.'

IT IS NOTED THAT THE ESTIMATED LOSS OF THE TENDER WHILE UNDER REPAIRS IS REPORTED TO BE APPROXIMATELY $140 PER DAY, WHEREAS THE REQUEST FOR BIDS ADVISED THAT THE CONTRACT WOULD STIPULATE FOR DEDUCTION OF LIQUIDATED DAMAGES AT THE RATE OF ONLY $10 PER DAY FOR EACH AND EVERY DAY OF DELAY, AN AMOUNT WHOLLY OUT OF PROPORTION TO THE KNOWN DAMAGES WHICH WOULD BE SUSTAINED BY THE GOVERNMENT THROUGH DELAY.

THE SITUATION HERE PRESENTED CALLS TO MIND THE CASE OF DOW PUMP AND DIESEL ENGINE COMPANY V. UNITED STATES, E-475, WHERE THE COURT OF CLAIMS IN AN OPINION DATED JUNE 3, 1929, REFERRED TO THE FACT THAT CERTAIN REQUIREMENTS UPON WHICH THE NAVY DEPARTMENT RELIED FOR REFUSAL TO MAKE PAYMENT FOR THE ENGINES WAS NOT INCORPORATED IN THE ADVERTISEMENT OR CONTRACT AND SAID THAT---

* * * IN FACT THE WHOLE DIFFICULTY COULD HAVE BEEN AVOIDED BY A SMALL AMOUNT OF ORDINARY CARE UPON THE PART OF THE REPRESENTATIVES OF THE NAVY DEPARTMENT BY INSERTING SUCH A PROVISION IN THE CONTRACT OR NOTIFYING THE PLAINTIFF OF THE REGULATION BEFORE THE PUMPS WERE CONSTRUCTED. * * *

BY THE USE OF ORDINARY CARE IN THE PREPARATION OF THE ADVERTISEMENT IN THIS CASE, PROSPECTIVE BIDDERS COULD HAVE BEEN NOTIFIED THAT THE BIDS WOULD BE EVALUATED ON THE BASIS OF THE TIME OF COMPLETION GUARANTEED, COMPARATIVE COSTS OF INSPECTION AND SUPERINTENDENCE AND OF MOVING THE TENDER TO AND FROM PLACE WHERE WORK IS TO BE PERFORMED, ETC. FURTHERMORE, THE AMOUNT STIPULATED AS LIQUIDATED DAMAGES FOR DELAY IN COMPLETION SHOULD BE COMMENSURATE WITH THE VALUE OF THE TENDER'S SERVICES TO THE GOVERNMENT OR THE LOSS WHICH THE GOVERNMENT WOULD SUSTAIN BY BEING DEPRIVED OF SUCH SERVICES. NONE OF THESE THINGS WAS DONE, WITH THE RESULT SHOWN BY THE FOREGOING TABULATED ANALYSIS OF THE BIDS--- THAT IS, THE CHARLESTON DRY DOCK AND MACHINE COMPANY SUBMITTED THE LOWEST MONEY BID BY $718.12, WHEREAS IF THE CONTRACT SHOULD BE AWARDED TO SAID COMPANY, THE WORK WOULD PROBABLY COST THE GOVERNMENT SEVERAL HUNDRED DOLLARS MORE THAN IT WOULD COST IN EVENT THE CONTRACT WAS AWARDED TO THE GIBBS GAS ENGINE COMPANY. IN VIEW OF SUCH CIRCUMSTANCES, THE PUBLIC INTEREST WILL NOT PERMIT THE ACCEPTANCE OF THE PROPOSAL OF THE CHARLESTON DRY DOCK AND MACHINE COMPANY. ON THE OTHER HAND, THE FAILURE OF THE ADVERTISEMENT TO CONVEY TO PROSPECTIVE BIDDERS ALL OF THE ESSENTIAL COMPETITIVE FACTORS IN THE CASE AND TO STIPULATE A PROPER RATE AS LIQUIDATED DAMAGES WOULD MAKE IT UNFAIR TO THE OTHER BIDDERS TO ACCEPT THE PROPOSAL OF THE GIBBS GAS ENGINE COMPANY.

ACCORDINGLY, YOU ARE ADVISED THAT UNDER SECTION 3709, REVISED STATUTES, YOU ARE NOT AUTHORIZED TO ACCEPT ANY OF THESE FOUR BIDS FOR THE REPAIR, ETC., OF THE TENDER, AND THAT THE WORK SHOULD BE READVERTISED WITH THE ADVERTISEMENT STATING ALL OF THE ESSENTIAL COMPETITIVE FACTORS, ETC., AS HEREINBEFORE INDICATED.