B-127251, MAY 18, 1956

B-127251: May 18, 1956

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST CONCERNING THE ACTION TAKEN BY THE DEPARTMENT OF THE ARMY. IT APPEARS FROM THE REPORT FURNISHED BY THE DEPARTMENT OF THE ARMY THAT ONLY A CERTAIN AMOUNT OF MONEY WAS AVAILABLE FOR THE IMPROVEMENT OF ELMENDORF AIR FORCE BASE AND THAT IT WAS NECESSARY TO LIMIT THE DESIRED IMPROVEMENTS TO THE FUNDS AVAILABLE ON A PRIORITY BASIS. TO CARRY OUT THE CONSTRUCTION PROGRAM INVITATIONS FOR BIDS WERE ISSUED FOR VARIOUS PHASES OF THE WORK. THE WORK UNDER EACH OF THE FIVE SCHEDULES WAS ESSENTIALLY THE SAME EXCEPT THAT ITEM 1 OF EACH SCHEDULE COVERED A DIFFERENT NUMBER OF STORAGE TANKS. AWARD WAS TO BE MADE UNDER ONLY ONE SCHEDULE AND EACH SCHEDULE PROVIDED: "ITEMS 1 THROUGH 3 OR 1 THROUGH 4 WILL BE AWARDED UNDER ONE CONTRACT.

B-127251, MAY 18, 1956

TO PACIFIC ALASKA CONTRACTORS, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST CONCERNING THE ACTION TAKEN BY THE DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS, UNDER INVITATIONS NOS. ENG -95-507-56-9 AND ENG-95-507-56-31.

IT APPEARS FROM THE REPORT FURNISHED BY THE DEPARTMENT OF THE ARMY THAT ONLY A CERTAIN AMOUNT OF MONEY WAS AVAILABLE FOR THE IMPROVEMENT OF ELMENDORF AIR FORCE BASE AND THAT IT WAS NECESSARY TO LIMIT THE DESIRED IMPROVEMENTS TO THE FUNDS AVAILABLE ON A PRIORITY BASIS. TO CARRY OUT THE CONSTRUCTION PROGRAM INVITATIONS FOR BIDS WERE ISSUED FOR VARIOUS PHASES OF THE WORK.

ON DECEMBER 9, 1955, THE DISTRICT ENGINEER OPENED THE BIDS RECEIVED IN RESPONSE TO INVITATION NO. ENG-95-507-56-9 COVERING THE CONSTRUCTION OF UNDERGROUND JET FUEL AND AVGAS SYSTEMS. THE INVITATION REQUESTED BIDS ON FIVE SCHEDULES NUMBERED A THROUGH E, EACH CONSISTING OF FOUR ITEMS. THE WORK UNDER EACH OF THE FIVE SCHEDULES WAS ESSENTIALLY THE SAME EXCEPT THAT ITEM 1 OF EACH SCHEDULE COVERED A DIFFERENT NUMBER OF STORAGE TANKS. SCHEDULE A COVERED FOUR TANKS, SCHEDULE B FIVE TANKS, SCHEDULE C SIX TANKS, SCHEDULE D SEVEN TANKS AND SCHEDULE E EIGHT TANKS. AWARD WAS TO BE MADE UNDER ONLY ONE SCHEDULE AND EACH SCHEDULE PROVIDED:

"ITEMS 1 THROUGH 3 OR 1 THROUGH 4 WILL BE AWARDED UNDER ONE CONTRACT.

"THE GOVERNMENT RESERVES THE RIGHT TO AWARD OR NOT TO AWARD ALTERNATE ITEM 4, WHICHEVER IS IN THE BEST INTEREST TO THE GOVERNMENT.'

EIGHT BIDS WERE RECEIVED IN RESPONSE TO INVITATION ENG-95-507-56-9. THE BID OF PACIFIC ALASKA CONTRACTORS, INC., WAS THE LOWEST BID RECEIVED ON EACH OF THE FIVE SCHEDULES EITHER INCLUDING OR EXCLUDING ALTERNATE ITEM 4.

ON DECEMBER 28, 1955, BIDS UNDER INVITATION NO. ENG-95-507-56-1 COVERING THE CONSTRUCTION OF RUNWAY AND TAXIWAY EXTENSION, HARDSTANDS AND TRUCK FILL STAND WERE OPENED. DUE TO THE FACT THAT ON THIS HIGH PRIORITY PROJECT ALL BIDS RECEIVED EXCEEDED THE GOVERNMENT'S ESTIMATE BY 22 PERCENT OR MORE THE DISTRICT ENGINEER WAS ADVISED ON DECEMBER 30, 1955, BY THE AIR FORCE REPRESENTATIVE THAT ALL BIDS ON INVITATION 56-1 SHOULD BE REJECTED AND THAT NO AWARD SHOULD BE MADE AT THAT TIME ON ITEM 1 (STORAGE TANKS) OF INVITATION 56-9. HOWEVER, AWARD OF A CONTRACT WAS AUTHORIZED FOR THE OTHER FACILITIES COVERED BY ITEMS 2, 3 AND 4 OF INVITATION 56-9.

THE DISTRICT ENGINEER (CONTRACTING OFFICER) BY LETTERS DATED DECEMBER 30, 1955, REJECTED THE BIDS RECEIVED UNDER INVITATION 5611 AND ON THE SAME DATE SENT A TELEGRAM TO PACIFIC ALASKA CONTRACTORS, INC., RELATIVE TO ITS BID UNDER INVITATION 56-9. THE TELEGRAM IS AS FOLLOWS:

"YOU ARE HEREBY NOTIFIED THAT SCHEDULE A ITEMS 2 COMMA 3 AND ALTERNATE ITEM 4 OF YOUR BID DATED 9 DECEMBER 1955 IN RESPONSE TO INVITATION ENG-95- 507-56-9 REVISED BY ADDENDA 1 AND 2 FOR CONSTRUCTION OF UNDERGROUND JET FUEL AND AVGAS SYSTEMS AT ELMENDORF AIR FORCE BASE ALASKA IN TOTAL AMOUNT OF $671 R21 FOR COMPLETION READY FOR USE NOT LATER THAN 1 AUGUST 1957 IS ACCEPTED PERIOD THE GOVERNMENT RESERVES THE RIGHT TO AWARD EITHER ITEM 1 OF SCHEDULE A OR ITEM 1 OF SCHEDULE C OR ITEM 1 OF SCHEDULE E WITHIN 60 CALENDAR DAYS OF BID DATE PERIOD THE GOVERNMENT FURTHER RESERVES THE RIGHT TO SUBSTITUTE PIPING FOR 8 TANKS COMMA ITEM 2 OF SCHEDULE E OR 6 TANKS COMMA ITEMS 2 OF SCHEDULE C IN LIEU OF PIPING FOR 4 TANKS COMMA ITEM 2 OF SCHEDULE A COMMA AND TO SUBSTITUTE ITEM 3 ON SCHEDULE C OR ITEM 3 OF SCHEDULE E FOR ITEM 3 OF SCHEDULE A AT BID PRICE WITHIN 60 CALENDAR DAYS OF BID DATE PERIOD THIS AWARD FURTHER CONTAINS THE PROVISO THAT NO WORK SHALL COMMENCE ON ALTERNATE ITEM 4 UNTIL EXCAVATION IS COMPLETED ON RUNWAY AND NOTICE TO PROCEED IS ISSUED BY CONTRACTING OFFICER FOR THIS WORK PERIOD YOUR CONTRACT WILL BE NUMBERED DA-95-507-ENG-886 AND WILL BE DATED 30 DECEMBER 1955 PERIOD COPIES OF THE CONTRACT AND FORMAL NOTICE OF AWARD WITH COMPLETE INSTRUCTIONS FOR EXECUTING BONDS WILL BE FORWARDED SHORTLY FOR SIGNATURE PERIOD NOTICE TO PROCEED WILL NOT BE GIVEN UNTIL CONTRACT IS SIGNED AND SATISFACTORY BONDS HAVE BEEN FURNISHED PERIOD TELEGRAPHIC ACKNOWLEDGEMENT OF THIS NOTICE IS REQUESTED PERIOD"

ON JANUARY 3, 1956, MR. OSTRUSKE OF PACIFIC ALASKA CONTRACTORS TELEPHONED THE CONTRACTING OFFICE AND A MEMORANDUM CONCERNING THE TELEPHONE CONVERSATION IS AS FOLLOWS:

"1. RECEIVED TELEPHONE CALL FROM MR. OSTRUSKE OF PACIFIC ALASKA CONTRACTORS, 3 JANUARY 1956, IN WHICH HE STATED THAT TELEGRAPHIC NOTIFICATION OF AWARD FOR INVITATION 56-9 HAD BEEN RECEIVED. HOWEVER, THE MANNER IN WHICH IT WAS AWARDED PROHIBITED HIS COMPANY FROM ORDERING STEEL NECESSARY FOR THE TANKS WHICH WERE HELD AS OPTION FOR LATER AWARD AND HE REQUESTED THAT THE TELEGRAPHIC AWARD BE REWORDED IN SUCH A MANNER AS TO PERMIT HIS COMPANY TO PLACE AN ORDER FOR THE STEEL TO BE USED IN CONNECTION WITH THE TANKS.

"2. MR. OSTRUSKE WAS INFORMED THAT THE AWARD NOTICE MUST PRESENTLY REMAIN AS WRITTEN AND THAT HE WOULD BE ADVISED AT A LATER DATE RELATIVE TO POSSIBLE AWARD OF THE ITEMS HELD AS OPTION. HE WAS INFORMED THAT FURTHER DISCUSSION PERTAINING TO THIS AWARD SHOULD BE WITH THE CONTRACTING OFFICER. HE THEN STATED THAT HE WOULD CALL BACK AND DISCUSS THE MATTER WITH COLONEL FARRELL OR COLONEL HASEMAN AT A TIME WHEN THEY WERE IN THE OFFICE.'

THE TELEPHONE CONVERSATION WAS CONFIRMED BY A TELEGRAM OF THE SAME DATE AS FOLLOWS:

"REFERENCE TELEPHONE CONVERSATION 3 JANUARY 1956 BETWEEN YOUR MR OSTRUSKE AND OUR MR MARR RELATIVE TO AWARD FOR CONTRACT DA-886 PERIOD REGRET THAT NO COMMITMENT AS TO POSSIBLE EXERCISE OF OPTIONS CONCERNING NUMBER OF TANKS TO BE REQUIRED UNDER YOUR CONTRACT CAN BE MADE AT PRESENT TIME PERIOD ANTICIPATE ADDITIONAL INFORMATION ABOUT 5 FEBRUARY 1956"

MR. OSTRUSKE AGAIN TELEPHONED ON JANUARY 4 AND A MEMORANDUM OF THE CONVERSATION READS:

"1. MR. OSTRUSKE, PACIFIC-ALASKA CONTRACTORS, TACOMA, WASHINGTON, CALLED WITH REGARD TO OUR TELETYPE AWARD OF ITEMS 2, 3 AND ALTERNATE 4 ON ADVERTISEMENT 56-9. HE STATED THAT IN HIS OPINION THE AWARD WAS IMPROPER AND INSUFFICIENT IN THAT OUR BID DOCUMENTS PROVIDED FOR A SINGLE AWARD ON ONE CONTRACT OF ITEMS 1 THROUGH 3 OR 1 THROUGH ALTERNATE 4 OF A SELECTED SCHEDULE. INSTEAD, WE HAD MADE AN AWARD OF ONLY SELECTED ITEMS FROM A SINGLE SCHEDULE.

"2. HE STATED THAT HE HAD PROBLEMS WITH HIS STEEL SUPPLIER AND THAT HE WOULD BE UNABLE TO OBTAIN STEEL FOR TANKS IF, AT SOME SUBSEQUENT DATE WITHIN THE 60-DAY BID PERIOD, WE EXERCISED OUR PROPOSED RIGHT TO AWARD FOUR OR MORE TANKS. HE REQUESTED THAT WE RECONSIDER THE AWARD TO PROVIDE FOR THE AWARD OF TANKAGE AT THIS TIME.

"3. I TOLD HIM WE WOULD REVIEW THE MATTER AND WOULD CALL HIM BACK. AFTER DISCUSSING THE CASE WITH LEGAL BRANCH AND CONTRACT ADMINISTRATION BRANCH, IT SEEMED APPARENT THAT THE CONTRACTOR'S CONTENTION WAS VALID. SINCE WE DID NOT HAVE ADEQUATE FUNDS AT THIS TIME TO MAKE AN AWARD OF ANY OF THE TANKS, I INFORMED MR. OSTRUSKE BY SUBSEQUENT PHONE CALL THAT WE WOULD EXERCISE OUR OPTION TO AWARD 56-9 AS ADVERTISED WITHIN THE 60-DAY PERIOD AFTER BID OPENING DATE AND WOULD AT THAT TIME MAKE A COMPLETE AWARD IF FUNDS WERE AVAILABLE. I REQUESTED THAT HE TELETYPE US HIS REFUSAL OF OUR ORIGINAL AWARD, STATING HIS GROUNDS FOR REFUSAL.'

A TELEGRAM DATED JANUARY 4 FROM PACIFIC ALASKA CONTRACTORS TO THE ACTING DISTRICT ENGINEER IS AS FOLLOWS:

"REFERENCE TO TELEPHONE CONVERSATION JANUARY FOUR WITH COL. HASEMAN RELATIVE TO AWARD OF CONTRACT DA886 PERIOD INASMUCH AS AWARD AS NOW MADE IS NOT IN CONFORMANCE WITH BID SCHEDULES COMMA SUGGEST GOVERNMENT REQUEST OPTION OF FORTY DAYS ADDITIONAL TIME IN WHICH TO AWARD ITEM ONE OF EITHER SCHEDULE "A" SCHEDULE "C" OR SCHEDULE "E" COMMA ACKNOWLEDGING ERROR PERIOD UPON RECEIPT OF THIS CORRECTION WE WILL ACKNOWLEDGE"

BY TELEGRAM DATED JANUARY 11 THE DISTRICT ENGINEER ADVISED PACIFIC ALASKA CONTRACTORS AS FOLLOWS:

"FOR W H OSTRUSKE FROM NPASP 0182 REFERENCE YOUR WIRE DATED 4 JANUARY 1956 AND TELEPHONE CONVERSATION COLONEL HASEMAN AND YOUR MR OSTRUSKE PERIOD THE AWARD FORWARDED TO YOU 31 DECEMBER 1955 STATES THAT THE GOVERNMENT RESERVES THE RIGHT TO AWARD THE ITEM 1 OF 3 SCHEDULES WHICH IN ITSELF IS AN OPTION PERIOD WHETHER WE EXERCISE THIS OPTION IMMEDIATELY IS DEPENDENT UPON FACTORS TO BE RESOLVED PRIOR TO EXPIRATION OF YOUR BID PERIOD IT IS POINTED OUT THAT A COMPLETE AWARD IS NOT MANDATORY UNTIL BID EXPIRATION DATE AND THAT COMMITMENTS BY SUPPLIERS UNDER YOUR BID SHOULD HOLD FOR THIS PERIOD"

ON JANUARY 17 THE FOLLOWING TELEGRAM WAS SENT TO PACIFIC ALASKA CONTRACTORS:

"REFERENCE TELETYPE NPASP-C 8960 DATED 30 DECEMBER 1955 PERIOD AWARD OF SCHEDULE A ITEMS 2 COMMA 3 AND ALTERNATE ITEM 4 OF YOUR BID DATED 9 DECEMBER 1955 IN RESPONSE TO INVITATION ENG-95-507-56-9 IS HEREBY CANCELLED AND WITHDRAWN PERIOD GOVERNMENT WILL EXERCISE THE RIGHT TO REJECT OR TO AWARD IN ACCORDANCE WITH THE TERMS OF YOUR BID PRIOR TO BID EXPIRATION DATE PERIOD"

ON JANUARY 18 THERE WAS RECEIVED IN THE DISTRICT ENGINEER'S OFFICE A LETTER FROM PACIFIC ALASKA CONTRACTORS DATED JANUARY 16, 1956, AS FOLLOWS:

"SUBJECT: ACKNOWLEDGING RECEIPT OF AWARD CONTRACT NO. DA-886

"WE ARE IN RECEIPT OF YOUR TELEGRAMS DATED DECEMBER 31, 1955, JANUARY 3RD AND JANUARY 11TH, 1956 IN WHICH AWARD IS MADE TO THIS CONTRACTOR FOR CONSTRUCTION OF UNDERGROUND JET FUEL AND AVGAS SYSTEMS AT ELMENDORF AIR FORCE BASE, ALASKA. OUR BID WAS MADE IN RESPONSE TO INVITATION NO. ENG-95 -507-56-9, DECEMBER 9TH, 1955.

"IRREGULARITIES ARE NOTED IN THIS AWARD WHICH MAY RESULT IN LEGAL CLAIMS BY THE CONTRACTOR. WE TAKE EXCEPTION TO THE FOLLOWING;

"1 - AWARD IS NOT COMPLETE, THEREFORE DOES NOT CONFORM TO BID SCHEDULES.

"REFER TO UPS-4 QUOTE,"ITEM ONE THROUGH THREE OR ITEM ONE THROUGH FOUR WILL BE AWARDED UNDER ONE CONTRACT.'

"2 - CONTRACTING OFFICER ATTEMPTS TO RESERVE ADDITIONAL ACCEPTANCE TIME AFTER AWARD HAS BEEN MADE.

"MISTAKES OR ERRORS IN AWARD DOES NOT GIVE THE GOVERNMENT THE RIGHT TO RESERVE THE REMAINING UNUSED TIME OF THE SIXTY (60) DAYS ALLOWED FOR ACCEPTANCE. REFER TO STANDARD BID FORM NO. 21, QUOTE,"UPON WRITTEN ACCEPTANCE OF THIS BID, MAILEDOR OTHERWISE FURNISHED, WITHIN CALENDAR DAYS (60-CALENDAR DAYS UNLESS A SHORTER PERIOD BE INSERTED BY THE BIDDER) AFTER THE DATE OF OPENING OF BIDS.'

"THERE ARE NO PROVISION IN BID DOCUMENTS WHICH ALLOWS ADDITIONAL TIME TO COMPLETE AWARD, ONCE THE AWARD IS MADE.

"3 - IMPLICATIONS BY ACTING DISTRICT ENGINEER AS TO EXISTENCE OF OPTIONS:

"OUR ATTITUDE IS THAT AWARD MADE DOES INCLUDED ITEM ONE. HOWEVER, WE ARE UNABLE TO DETERMINE FROM THE TELEGRAMS WHETHER YOU ARE IN AGREEMENT OR THAT YOUR UNCERTAINTY IS ONLY AS TO THE TOTAL NUMBER OF TANKS THAT ARE TO BE VARIFIED.

"DUE TO CONFUSION IN THIS COMMITMENT WE ADVISE THAT WE WILL HOLD THE GOVERNMENT RESPONSIBLE FOR ALL COST AS TO THE RESULT THEREOF.

"4 - PROVISION CONCERNING WORK ON ALT. ITEM FOUR; "QUOTE,"NO WORK SHALL COMMENCE ON ALT. ITEM FOUR UNTIL EXCAVATION IS COMPLETED ON RUNWAYS.' THIS IMPOSES A CONDITION THAT WAS NOT CONTAINED IN THE ORIGINAL SPECIFICATIONS UNDER WHICH BID WAS SUBMITTED. IT COULD MATERIALLY DELAY THIS CONTRACTOR AND MAKE IT IMPOSSIBLE TO COMPLETE THE INSTALLATION BY SEPTEMBER 1, 1956, AS REQUIRED.

"NO CONTRACT BEING IN FORCE OR EFFECT FOR RUNWAY EXCAVATION.

"WE REQUEST THAT THE FORMAL NOTICE OF AWARD AND COPIES OF CONTRACT BE FORWARDED, CORRECTED OR OTHERWISE. UPON RECEIPT OF WHICH, WE WILL FURNISH THE REQUIRED BOND.'

BY LETTER DATED JANUARY 24, 1956, PACIFIC ALASKA CONTRACTORS WAS ADVISED AS FOLLOWS:

"REFERENCE IS MADE TO YOUR LETTER DATED 16 JANUARY 1956 RELATIVE TO AWARD OF CONTRACT NO. DA-95-507-ENG-886.

"TELETYPE NO. NPASP-C 0278 WAS DISPATCHED 17 JANUARY 1956 TO YOU AND CONTAINED NOTICE THAT AWARD OF YOUR CONTRACT DA-95-507-ENG-886 HAD BEEN CANCELLED AND WITHDRAWN. IN ACCORDANCE WITH TERMS OF YOUR BID, THE GOVERNMENT WILL NOTIFY YOU AT A DATE PRIOR TO BID EXPIRATION DATE WHETHER AWARD OR REJECTION OF BID IS TO BE MADE.

"IN VIEW OF THE ABOVE PARAGRAPH, NO FURTHER REPLY CONCERNING THE VARIOUS ITEMS MENTIONED IN YOUR LETTER WILL BE MADE AT THIS TIME.'

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

"* * * OUR BID IS SUBMITTED WITH THE UNDERSTANDING THAT ALL SCHEDULES AWARDED WILL BE AWARDED UNDER ONE CONTRACT.' THIS PROVISION WAS ADMINISTRATIVELY CONSIDERED AS A REQUIREMENT THAT THE M-B CONTRACTING COMPANY BE AWARDED ALL SCHEDULES ON WHICH AWARD WAS TO BE MADE. THEREFORE, SINCE AWARD WAS TO BE MADE ON ALL FOUR SCHEDULES AND THE BID OF THE M-B CONTRACTING COMPANY WAS THE LOWEST OVER ALL BID RECEIVED ON ALL SCHEULES, THE BID OF THAT CORPORATION WAS ACCEPTED FEBRUARY 28, 1956.

IT IS PACIFIC ALASKA'S PRIMARY CONTENTION THAT THE TELEGRAM OF DECEMBER 30, 1955, CONSTITUTED AN AWARD OF A MINIMUM OF FOUR TANKS PLUS ITEMS 2, 3 AND 4 OF SCHEDULE A, WITH THE RIGHT RESERVED BY THE GOVERNMENT TO INCREASE THE AWARD BY ADDING TWO OR FOUR TANKS WITHIN 60 DAYS, AND THAT THE GOVERNMENT, ONCE HAVING MADE THE AWARD COULD NOT LATER "CANCEL" IT. IT IS FURTHER CONTENDED THAT, SINCE THE WORK COVERED BY THE ITEMS 2, 3 AND 4 HAD ALREADY BEEN AWARDED TO PACIFIC ALASKA THE SAME WORK COULD NOT BE AWARDED TO M-B CONTRACTING COMPANY UNDER INVITATION 56-31.

IN THE ALTERNATIVE IT IS CONTENDED THAT THE BID OF M-B CONTRACTING COMPANY, INC., UNDER INVITATION 56-31 WAS NOT AN "ALL OR NONE" BID AND THAT, SINCE PACIFIC ALASKA WAS THE LOWEST BIDDER UNDER SCHEDULE D OF THE INVITATION, THE AWARD ON THAT SCHEDULE SHOULD HAVE BEEN MADE TO PACIFIC ALASKA.

IT APPEARS CLEAR FROM THE ABOVE CHRONOLOGY OF EVENTS THAT THE DISTRICT ENGINEER DID NOT INTEND THE TELEGRAM OF DECEMBER 30, 1955, TO CONSTITUTE AN ACCEPTANCE OF ANY TANKS UNDER ITEM 1. FURTHERMORE, IT APPEARS THAT PACIFIC ALASKA HAD SERIOUS DOUBTS WHETHER ANY TANKS WERE AWARDED. THIS IS CLEARLY EVIDENCED BY THE CORPORATION'S STATEMENT IN ITS LETTER OF JANUARY 16, 1956, TO THE EFFECT THAT ITS REPRESENTATIVES WERE UNABLE TO DETERMINE "FROM THE TELEGRAMS" WHETHER THE ARMY UNDERSTOOD THAT THE AWARD INCLUDED ITEM 1. IT IS OUR OPINION THAT THE WORDING IN THE TELEGRAM OF DECEMBER 30 "THE GOVERNMENT RESERVES THE RIGHT TO AWARD EITHER ITEM 1 OF SCHEDULE A OR ITEM 1 OF SCHEDULE C" COULD NOT BE CONSIDERED AS AN ACTUAL AWARD OF AT LEAST FOUR TANKS UNDER ITEM 1 OF SCHEDULE A WITH THE OPTION TO INCREASE THE NUMBER OF TANKS TO SIX OR EIGHT. MOREOVER, THE TELEGRAM DID NOT CONSTITUTE AN UNQUALIFIED ACCEPTANCE OF ITEM 4 AS IT IMPOSED A CONDITION WHICH WAS NOT A PART OF THE INVITATION. THIS HAS BEEN CONSISTENTLY MAINTAINED BY PACIFIC ALASKA. SINCE THE TELEGRAM DID NOT CONSTITUTE AN UNQUALIFIED ACCEPTANCE OF PACIFIC ALASKA'S BID SUBMITTED IN RESPONSE TO INVITATION 56-9, THE MOST IT COULD HAVE AMOUNTED TO WAS A COUNTEROFFER. IN SUCH CIRCUMSTANCES, THERE WOULD HAVE TO HAVE BEEN AN UNQUALIFIED ACCEPTANCE OF THE COUNTEROFFER BY PACIFIC ALASKA BEFORE A VALID AND BINDING CONTRACT COULD HAVE COME INTO EXISTENCE, EVEN ASSUMING THE DISTRICT ENGINEER HAD AUTHORITY TO ENTER INTO CONTRACTS IN SUCH MANNER.

PACIFIC ALASKA CONSISTENTLY COMPLAINED THAT THE "AWARD" AS CONTAINED IN THE TELEGRAM OF DECEMBER 30 WAS NOT COMPLETE OR IN ACCORDANCE WITHITS BID AND IN THE LETTER OF JANUARY 16 STATED THAT SUCH IRREGULARITIES MIGHT RESULT IN LEGAL CLAIMS. THE DISTRICT ENGINEER BY TELEGRAM OF JANUARY 17 CANCELLED AND WITHDREW ANY "AWARD" MADE BY THE TELEGRAM OF DECEMBER 30. NO FURTHER ACTION WAS TAKEN WITH RESPECT TO THE BID OF PACIFIC ALASKA UNDER INVITATION 56-9. IT IS THEREFORE OUR OPINION THAT NO VALID AND BINDING CONTRACT EVER CAME INTO EXISTENCE BETWEEN PACIFIC ALASKA CONTRACTORS AND THE GOVERNMENT.

THE CONTENTION THAT PACIFIC ALASKA WAS ENTITLED TO AWARD ON SCHEDULE D OF INVITATION 56-31 AS A LOW BIDDER ON THAT SCHEDULE ALSO CANNOT BE SUSTAINED. THE CONDITION CONTAINED IN THE BID OF THE M-B CONTRACTING COMPANY, INC., "OUR BID IS SUBMITTED WITH THE UNDERSTANDING THAT ALL SCHEDULES AWARDED WILL BE AWARDED UNDER ONE CONTRACT" IS CONSIDERED TO HAVE BEEN PROPERLY INTERPRETED BY THE ADMINISTRATIVE OFFICE AS AN "ALL OR NONE" BID ON THE SCHEDULES TO BE AWARDED. THIS QUALIFICATION DIFFERS FROM THE ORDINARY "ALL OR NONE" QUALIFICATION IN THAT, IF IT SHOULD BE DECIDED NOT TO MAKE AN AWARD UNDER ONE OR MORE OF THE SCHEDULES, THE BID STILL STANDS WITH RESPECT TO THE SCHEDULES TO BE AWARDED, WHEREAS UNDER THE ORDINARY "ALL OR NONE" QUALIFICATION AWARD MUST BE MADE ON ALL SCHEDULES OR NONE. SINCE ALL FOUR SCHEDULES (A THROUGH D) WERE TO BE AWARDED AND THE M-B CONTRACTING COMPANY, INC., WAS THE LOWEST OVER ALL BIDDER ON THE FOUR SCHEDULES, THERE IS NO LEGAL BASIS TO OBJECT TO THE AWARD MADE UNDER INVITATION 56-31.

WITH RESPECT TO THE REQUEST THAT, IF IT SHOULD BE DETERMINED THAT THERE IS NO CONTRACT IN EXISTENCE, PACIFIC ALASKA BE GIVEN THE OPPORTUNITY TO SUBMIT AND BE AWARDED ITS COSTS AND EXPENSES CAUSED BY THE VARIOUS ACTIONS OF THE GOVERNMENT, YOU ARE ADVISED THAT, IN THE ABSENCE OF FRAUD OR BAD FAITH ON THE PART OF THE GOVERNMENT'S CONTRACTING OFFICIALS, THERE IS NO AUTHORITY OF LAW FOR THE PAYMENT OF EXPENSES INCURRED BY A BIDDER IN ATTEMPTING TO OBTAIN A GOVERNMENT CONTRACT.