B-120436, AUGUST 20, 1954, 34 COMP. GEN. 82

B-120436: Aug 20, 1954

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WHO RESERVED THE RIGHT TO REFUSE TO ACCEPT THE AWARD OF ANYTHING LESS THAN BOTH SCHEDULES SUBMITTED A QUALIFIED BID WHICH COULD NOT BE ACCEPTED EVEN THOUGH THE BIDDER ATTEMPTED TO WAIVE THE QUALIFICATION AFTER THE BIDS WERE OPENED. 1954: REFERENCE IS MADE TO YOUR LETTER DATED JULY 28. IS REPORTED TO HAVE BEEN MADE AND CONTRACT EXECUTED UNDER DATE OF JUNE 18. IT APPEARS FROM THE RECORD SUBMITTED THAT BIDS WERE INVITED FOR THE CONSTRUCTION OF AN 85 MILE SECTION OF TRANSMISSION LINE. IN THE BID FORM IT WAS EXPRESSLY PROVIDED THAT "1AWARD WILL BE MADE BY SCHEDULE. BIDS ON ONE OR BOTH SCHEDULES WERE SUBMITTED BY TWELVE BIDDERS. SCHEDULE IV THE LOWEST BID WAS $485. WITH AN INCREASE THREE PERCENT ON EITHER SCHEDULE IF ONLY ONE WERE AWARDED.

B-120436, AUGUST 20, 1954, 34 COMP. GEN. 82

BIDS - MODIFICATION - AFTER OPENING OF BIDS - WITHDRAWAL OF ALL OR NONE QUALIFICATION A BIDDER FOR A CONTRACT TO CONSTRUCT AN ELECTRIC TRANSMISSION LINE, UNDER AN INVITATION WHICH DIVIDED THE WORK INTO TWO SCHEDULES, WHO RESERVED THE RIGHT TO REFUSE TO ACCEPT THE AWARD OF ANYTHING LESS THAN BOTH SCHEDULES SUBMITTED A QUALIFIED BID WHICH COULD NOT BE ACCEPTED EVEN THOUGH THE BIDDER ATTEMPTED TO WAIVE THE QUALIFICATION AFTER THE BIDS WERE OPENED.

ACTING COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF THE INTERIOR, AUGUST 20, 1954:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 28, 1954, TRANSMITTING A REPORT FROM THE BONNEVILLE POWER ADMINISTRATION RELATIVE TO THE AWARD BY THAT AGENCY OF A CONTRACT ON SCHEDULE V, INVITATION NO. 7366, FOR CONSTRUCTION OF THE MCNARY-ROSS 345 KV TRANSMISSION LINE. THE AWARD, TO PARKER-SCHRAM COMPANY, IS REPORTED TO HAVE BEEN MADE AND CONTRACT EXECUTED UNDER DATE OF JUNE 18, 1954, FOLLOWING BID OPENING ON JUNE 4 AND ADMINISTRATIVE REJECTION OF A PROTEST, BY LETTER DATED JUNE 7, FROM MIDLAND CONSTRUCTORS, INC.

IT APPEARS FROM THE RECORD SUBMITTED THAT BIDS WERE INVITED FOR THE CONSTRUCTION OF AN 85 MILE SECTION OF TRANSMISSION LINE, DIVIDED INTO TWO SCHEDULES OF 43.8 AND 41.2 MILES, RESPECTIVELY. IN THE BID FORM IT WAS EXPRESSLY PROVIDED THAT "1AWARD WILL BE MADE BY SCHEDULE, COMBINATION OF SCHEDULES OR AS A WHOLE TO ONE BIDDER.'

BIDS ON ONE OR BOTH SCHEDULES WERE SUBMITTED BY TWELVE BIDDERS. SCHEDULE IV THE LOWEST BID WAS $485,489.97, BY W. L. RIDGE CONSTRUCTION CO., WHICH DID NOT BID ON SCHEDULE V. PARKER-SCHRAM COMPANY BID $1,085,197.60 FOR THE COMBINED SCHEDULES, MADE UP OF $523,701.60 FOR SCHEDULE IV AND $561,496 FOR SCHEDULE V, BUT STIPULATED IN ITS BID: "WE RESERVE THE RIGHT TO REFUSE TO ACCEPT THE AWARD OF ANY LESS THAN BOTH SCHEDULES IV AND V.' MIDLAND CONSTRUCTORS, INC., THE PROTESTING BIDDER, BID $1,089,719.25 FOR THE COMBINED SCHEDULES, DIVIDED INTO $523,217.25 FOR SCHEDULE IV AND $566,502 FOR SCHEDULE V, WITH AN INCREASE THREE PERCENT ON EITHER SCHEDULE IF ONLY ONE WERE AWARDED. THE THREE ENUMERATED OFFERED THE LOWEST COMBINATION OF INDIVIDUAL PRICES RECEIVED.

AFTER BIDS WERE OPENED THE PARKER-SCHRAM COMPANY, BY LETTER DATED JUNE 4, 1954, TO THE CONTRACTING OFFICER, STATED AS FOLLOWS:

THIS WILL SERVE TO CONFIRM OUR SUBSEQUENT ORAL STATEMENT TO YOU THAT IT IS NOT OUR INTENTION TO EXERCISE ANY RIGHTS WE MAY HAVE RESERVED IN CONNECTION WITH OUR PROPOSAL AND OUR AGREEMENT TO ACCEPT THE AWARD OF SCHEDULE V OF THE ABOVE PROJECT IN THE TOTAL AMOUNT OF $561,496.00, BASED ON OUR UNIT PRICE BID SUBMITTED AS ABOVE.

AWARD WAS THEREAFTER MADE TO W. L. RIDGE CONSTRUCTION CO. FOR SCHEDULE IV AND TO PARKER-SCHRAM COMPANY FOR SCHEDULE V.

THE CONTRACTING OFFICER IN HIS REPORT RELIES UPON CERTAIN STATEMENTS IN 20 COMP. GEN. 4 AND 30 COMP. GEN. 179, DEALING WITH THE EXTENT TO WHICH DEVIATIONS FROM ADVERTISED SPECIFICATIONS IN BIDS MAY BE PERMITTED TO BE WAIVED.

THE SITUATION HERE PRESENTED IS NOT ONE OF A MERE DEVIATION FROM SPECIFICATIONS WHICH CAN BE SOLVED BY APPLICATION OF THE RULES STATED IN THE DECISIONS REFERRED TO. IN THOSE CASES, AND THE CLASS OF CASES WHICH THEY TYPIFY, THE BIDDERS HAVE MADE OFFERS WHICH, ASIDE FROM CONSIDERATIONS OF RESPONSIVENESS OR FAIRNESS TO OTHER BIDDERS, CAN BE MADE BINDING CONTRACTS BY ACCEPTANCE. THE BID OF THE PARKER-SCHRAM COMPANY WAS NOT SUCH A BID EXCEPT AS TO THE COMBINATION OF SCHEDULES IV AND V; IT MADE NO BID ON EITHER INDIVIDUAL SCHEDULE WHICH THE CONTRACTING OFFICER COULD HAVE CONVERTED INTO A CONTRACT BY ACCEPTANCE. THE WAIVER, AFTER BIDS WERE OPENED, OF THE QUALIFICATION STATED IN THE BID, WAS IN EFFECT THE SUBMISSION OF A NEW BID ON SCHEDULE V.

IN CITY OF CHICAGO V. MOHR, 216 ILL. 320, 74 N.E. 1056, IT WAS SAID:

* * * WHEN A BID IS PERMITTED TO BE CHANGED (AFTER THE OPENING) IT IS NO LONGER THE SEALED BID SUBMITTED IN THE FIRST INSTANCE, AND, TO SAY THE LEAST, IS FAVORITISM, IF NOT FRAUD--- A DIRECT VIOLATION OF THE LAW--- AND CANNOT BE TOO STRONGLY CONDEMNED.

AS POINTED OUT IN 17 COMP. GEN. 554, THE STRICT MAINTENANCE OF THE COMPETITIVE BIDDING PROCEDURES REQUIRED BY LAW IS INFINITELY MORE IN THE PUBLIC INTEREST THAN OBTAINING A PECUNIARY ADVANTAGE IN INDIVIDUAL CASES BY PERMITTING PRACTICES WHICH DO VIOLENCE TO THE SPIRIT AND PURPOSE OF THE LAW. CONDITIONS OR RESERVATIONS WHICH GIVE A BIDDER A CHANGE OF SECOND- GUESS HIS COMPETITORS AFTER BID-OPENING MUST BE REGARDED AS FATAL TO THE BID.

IT FOLLOWS THAT THE AWARD OF SCHEDULE V TO THE PARKER-SCHRAM COMPANY WAS NOT IN ACCORDANCE WITH LAW AND CANNOT BE RECOGNIZED AS BINDING ON THE GOVERNMENT. THE PURPORTED CONTRACT ENTERED INTO WITH THAT COMPANY SHOULD ACCORDINGLY BE CANCELLED AND ANY WORK IN PROGRESS THEREUNDER DISCONTINUED AT THE EARLIEST POSSIBLE TIME.