B-120805, SEPTEMBER 9, 1954, 34 COMP. GEN. 119

B-120805, SEPTEMBER 9, 1954, 34 COMP. GEN. 119

BIDS - QUALIFIED - VITAL QUALIFICATION REQUIRING BID REJECTION - DELIVERY DATE CHANGES A BID TO LEASE SPACE TO GOVERNMENT WHICH QUALIFIED AVAILABILITY DATE SET OUT IN INVITATION FOR BIDS DID NOT MEET A VITAL REQUIREMENT OF THE INVITATION AND MAY NOT BE ACCEPTED.

ACTING COMPTROLLER GENERAL KELLER TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, SEPTEMBER 9, 1954:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 23, 1954, WITH ENCLOSURES, FURNISHING A REPORT IN RESPONSE TO A PROTEST ON BEHALF OF THE FIRST NATIONAL LIFE INSURANCE COMPANY OF NEW ORLEANS AGAINST THE PROPOSED AWARD OF A CONTRACT TO LOWICH INDUSTRIES, INC., OF WACO, TEXAS, PURSUANT TO INVITATION TO BID NO. 2-REM, DATED MARCH 29, 1954, COVERING THE LEASE FOR AN INTERNAL REVENUE SERVICE BUILDING IN NEW ORLEANS. BRIEFLY STATED, THE INSURANCE COMPANY PROTESTS THE AWARD TO LOWICH INDUSTRIES, C., ON THE GROUND THAT THE LATTER FAILS TO RESPOND TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION IN THE FOLLOWING TWO RESPECTS:

1. IT DOES NOT COMPLY WITH THE REQUIREMENT THAT THE BUILDING MEET APPLICABLE BUILDING CODES AND REGULATIONS FOR THE CITY OF NEW ORLEANS, AND

2. IT FAILS TO MEET THE REQUIREMENT OF THE INVITATION WITH RESPECT TO THE LOCATION OF THE PROPOSED BUILDING.

IN RESPONSE TO THE FIRST CONTENTION, IT IS POINTED OUT IN YOUR REPORT THAT THE LOWICH BID DID NOT CONTAIN ANY EXPRESS EXCEPTION TO THIS SPECIFIC REQUIREMENT; HOWEVER, THE SKETCH, PLAN AND PICTURES SUBMITTED THEREWITH DID RAISE SOME QUESTION AS TO WHETHER THE PROPOSED BUILDING WOULD COMPLY WITH LOCAL ZONING REGULATIONS REGARDING OFF STREET PARKING. DISCUSSIONS THEN WERE HELD WITH THE BIDDER, WHO PROMISED UNEQUIVOCALLY THAT THE LOCAL ZONING REQUIREMENTS IN THIS REGARD WOULD BE MET; AND IN VIEW OF SUCH ASSURANCE YOU STATE THAT IT IS THE INTENTION OF YOUR ADMINISTRATION TO HAVE INCLUDED IN THE LEASE A SPECIFIC REQUIREMENT THAT FINAL PLANS AND SPECIFICATIONS WOULD NOT HAVE THE APPROVAL OF THE GOVERNMENT IN THE ABSENCE OF EVIDENCE THAT SUCH PLANS AND SPECIFICATIONS WOULD COMPLY WITH THE AFOREMENTIONED BUILDING CODES AND REGULATIONS.

AS TO THE SECOND CONTENTION, WITH REGARD TO THE LOCATION OF THE PROPOSED BUILDING, THE INVITATION FOR BIDS PROVIDES AS FOLLOWS:

LOCATION: SPACE IS DESIRED IN THE AREA BEGINNING AT THE INTERSECTION OF NORTH CLAIBORNE AND IBERVILLE, EAST TO ROYAL, SOUTH ON ROYAL AND ST. CHARLES TO PERDIDO, WEST ON PERDIDO TO LOYOLA, NORTH TO TULANE, WEST TO SOUTH CLAIBORNE, NORTH TO POINT OF BEGINNING. SPACE IN LOCATIONS OTHER THAN THAT DESCRIBED WILL BE CONSIDERED, HOWEVER, BIDDERS ARE PLACED ON NOTICE THAT LOCATION OF SPACE, ACCESSIBILITY BY THE PUBLIC AND CONVENIENCE OF TRANSPORTATION WILL BE FACTORS IN MAKING AN AWARD.

THE FIRST NATIONAL LIFE INSURANCE COMPANY--- THE THIRD LOW BIDDER MAINTAINS THAT SINCE THE SITE PROPOSED BY LOWICH INDUSTRIES, INC. IS NOT WITHIN THE ABOVE-DELINEATED BOUNDARIES, IT FAILS TO MEET THE REQUIREMENT OF THE INVITATION. IT IS FURTHER CONTENDED THAT INASMUCH AS SITES OUTSIDE THE BOUNDARIES ARE NOT ON A PAR WITH SITES WITHIN THE BOUNDARIES, IT IS NEITHER FAIR NOR SOUND PRACTICE TO ALLOW THE PRICE TO BE THE SOLE DETERMINANT IN AWARDING A BID TO A SITE OUTSIDE THE BOUNDARIES.

WHILE THE GOVERNMENT EXPRESSED THE DESIRE TO HAVE A LOCATION WITHIN THE AREA ENUMERATED ABOVE, IT WAS CLEARLY POINTED OUT THAT SPACE IN LOCATIONS OTHER THAN THAT DESCRIBED WOULD BE CONSIDERED, AND BIDDERS WERE PLACED ON NOTICE THAT LOCATION OF SPACE, ACCESSIBILITY BY THE PUBLIC AND CONVENIENCE OF TRANSPORTATION WOULD BE FACTORS IN MAKING AN AWARD. THIS OFFICE, THEREFORE, WOULD NOT BE DISPOSED TO DISAGREE WITH YOUR POSITION THAT, UNDER THE INVITATION TO BID, THE GOVERNMENT RESERVED THE RIGHT TO CONSIDER LOCATIONS OUTSIDE THE SPECIFIED AREAS. ACCORDINGLY, SINCE THE LOCATION OFFERED BY LOWICH INDUSTRIES, INC. WAS ADMINISTRATIVELY DETERMINED TO BE ACCESSIBLE TO THE PUBLIC AND CONVENIENTLY REACHED BY PUBLIC TRANSPORTATION, THERE IS PERCEIVED NO LEGAL BASIS UPON WHICH THIS OFFICE WOULD BE WARRANTED IN QUESTIONING THIS ASPECT OF THE BID. AT THE SAME TIME, THERE IS SOME MERIT IN THE ARGUMENT THAT UNDER THE TERMS OF THE INVITATION THE WAY IS OPEN FOR THE ADMINISTRATIVE AGENCY TO EVALUATE THE BIDS IN ALMOST ANY MANNER IT CHOOSES.

HOWEVER, ASIDE FROM THAT, THE RECORD DISCLOSES ANOTHER FACTOR WHICH PRESENTS A MORE SERIOUS QUESTION AS TO THE RESPONSIVENESS OF THE LOWICH BID. PARAGRAPH 3 OF THE INVITATION ENTITLED " ERM" PROVIDES, IN PERTINENT PART, AS FOLLOWS:

* * * IF THE SPACE IS AVAILABLE FOR OCCUPANCY BY DECEMBER 16, 1954, IT WILL BE ACCEPTED BY THE GOVERNMENT ON THAT DATE IF WRITTEN NOTICE THAT THE SPACE WILL BE AVAILABLE ON DECEMBER 16, 1954, IS SERVED UPON THE GOVERNMENT AT LEAST 20 DAYS PRIOR TO DECEMBER 16, 1954. HOWEVER, IF THE SPACE IS NOT AVAILABLE BY DECEMBER 16, 1954, THE GOVERNMENT WILL NOT ACCEPT THE PREMISES UNTIL APRIL 1, 1955, AND NO RENTAL SHALL ACCRUE UNTIL THE PREMISES ARE ACCEPTED. THE SPACE WILL BE ACCEPTED AS OUTLINED ABOVE ON EITHER DECEMBER 16, 1954, OR APRIL 1, 1955, BUT MUST BE AVAILABLE FOR OCCUPANCY NOT LATER THAN APRIL 1, 1955, UNLESS THE PREMISES OFFERED ARE ALREADY OCCUPIED BY THE GOVERNMENT UNDER A LEASE WHICH EXPIRES WITH ITS OWN TERMS ON JUNE 30, 1955. * * * (ITALICS SUPPLIED.)

IN THE SPECIFICATIONS ATTACHED TO THE LOWICH BID, SUCH PARAGRAPH WAS ALTERED BY THE DELETION OF SEVERAL LINES AND THERE WAS SUBSTITUTED THEREFORE A TYPEWRITTEN LEGEND WHICH READS IN PART AS FOLLOWS:

IT IS UNDERSTOOD, HOWEVER, IF THE SPACE IS NOT COMPLETED BY DECEMBER 16, 1954, THE GOVERNMENT WILL NOT ACCEPT THE PREMISES UNTIL APRIL 1, 1955, OR AT AN AGREED COMPLETION DATE. (ITALICS SUPPLIED.)

ACCOMPANYING THE BID WAS A LETTER SUBMITTED BY LOWICH INDUSTRIES, INC., BEARING THE SAME DATE, WHICH CONTAINED THE FOLLOWING:

THE BUILDING IS TO BE COMPLETED WITHIN APPROXIMATELY NINE TO FIFTEEN MONTHS AFTER FINAL APPROVAL OF BUILDING PLANS BY GENERAL SERVICES ADMINISTRATION.

ON MAY 20, 1954, A TELEGRAM WAS FORWARDED TO THE BIDDER REQUESTING A CLARIFICATION AS TO THE DATE THE SPACE WOULD BE AVAILABLE. IN RESPONSE, LOWICH INDUSTRIES, INC., BY LETTER DATED MAY 24, 1954, REQUESTED A CONTRACT PROVISION THAT THE NEW SPACE BE READY FOR OCCUPANCY BY APRIL 1, 1955, BUT UNDER WHICH NO LIABILITY FOR DELAYS WOULD ATTACH UNLESS THE PREMISES WERE NOT AVAILABLE FOR OCCUPANCY BY APRIL 30, 1955; THEREAFTER IT CONTINUED TO SUGGEST OTHER CONDITIONS CONTROLLING ITS LIABILITY FOR DELAYS SUBSEQUENT TO THAT DATE; AND THERE IS SOME INDICATION IN THE RECORD THAT THE ENTIRE REPLY WAS CHARACTERIZED BY THE REAL ESTATE DIVISION OF YOUR ADMINISTRATION AS BEING "NOT ACCEPTABLE.'

YOU ADVISE THAT SUCH DEVIATION RAISED SOME QUESTION AS TO WHETHER THE BID WAS RESPONSIVE TO THE INVITATION AND, WHILE ATTEMPTING TO JUSTIFY AN INTERPRETATION IN FAVOR OF THE BIDDER, YOU FURTHER POINTED OUT THAT IT WAS THE INTENTION OF YOUR ADMINISTRATION TO REMOVE ANY DOUBT AS TO THE BIDDER'S OBLIGATION TO DELIVER THE PREMISES WITHIN THE TIME SPECIFIED BY INCLUDING IN THE LEASE A LIQUIDATED DAMAGE CLAUSE TO INDEMNIFY THE GOVERNMENT IN EVENT OF DELAY IN THE DELIVERY OF SUCH PREMISES.

IT FREQUENTLY HAS BEEN HELD BY THE GENERAL ACCOUNTING OFFICE THAT THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE SAME PROPOSITION OFFERED IN THE INVITATION. OTHERWISE, THERE IS NO WAY OF KNOWING THAT THE NEEDS OF THE GOVERNMENT ARE BEING SUPPLIED UPON THE MOST ADVANTAGEOUS TERMS AVAILABLE. WHILE IT IS TRUE IN THE INSTANT CASE THAT LOWICH LATER AGREED TO MAKE THE PREMISES AVAILABLE BY APRIL 1, 1955, EVEN THAT AGREEMENT WAS NOT WITHOUT CERTAIN CONDITIONS AND LIMITATIONS OF LIABILITY.

THE INVITATION MADE IT UNMISTAKABLY CLEAR THAT TIME WAS OF THE ESSENCE IN CONNECTION WITH THE DATE OF AVAILABILITY OF THE PREMISES. AN ABSOLUTE DEADLINE OF APRIL 1, 1955, WAS FIXED. A DELIVERY OF THE PREMISES BEYOND THAT DATE COULD IN ALL PROBABILITY RESULT IN THE PAYMENT OF UNANTICIPATED ADDITIONAL RENTALS. MOREOVER, IF IT WERE POSSIBLE TO OFFER PREMISES TO BE AVAILABLE AT SOME LATER DATE WHO CAN TELL WHAT OTHER BIDDERS MIGHT HAVE OFFERED. HENCE, TO PERMIT THIS BIDDER TO AMEND ITS ORIGINAL BID AFTER OPENING WITH RESPECT TO SO VITAL A PART OF THE INVITATION MUST BE REGARDED AS ACTION IN CONTRAVENTION OF THE STATUTES GOVERNING THE LETTING OF PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS.

IT MUST, THEREFORE, BE CONCLUDED THAT THE BID SUBMITTED BY LOWICH INDUSTRIES, INC., WAS NOT RESPONSIVE TO INVITATION NO. 2-REM, AND PROPERLY MAY NOT BE SUBJECT OF AN AWARD.