B-128352, AUGUST 29, 1956, 36 COMP. GEN. 177

B-128352: Aug 29, 1956

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THE CONTRACTING OFFICER SHOULD NOT HAVE DISREGARDED A TELEGRAPHIC BID MODIFICATION WHICH OFFERED A LUMP-SUM REDUCTION IN THE TOTAL AMOUNT OF THE BID PROVIDED THE BIDDER WAS AWARDED BOTH LOTS. 1956: REFERENCE IS MADE TO LETTER DATED JULY 27. IT APPEARS FROM THE RECORD THAT THE INVITATION WAS DIVIDED INTO THREE LOTS. BIDDERS WERE ADVISED IN THE BID SCHEDULE TO QUOTE AN AVERAGE PRICE PER 1. WHEN THE BIDS WERE OPENED IT WAS FOUND THAT THE ATLANTIC CREOSOTING COMPANY WAS LOW BIDDER ON LOT 1 AND THAT LORD AND BUSHNELL WAS LOW BIDDER ON LOT 2. WHOSE BID WAS NOT LOW ON EITHER LOT. IS REPORTED THAT THE CONTRACTING OFFICER CONSIDERED THE TELEGRAPHIC MODIFICATION UNACCEPTABLE BECAUSE IT DID NOT PERMIT HIM TO ASCERTAIN AN AVERAGE PRICE FOR EITHER LOT 1 OR 2 AS PROVIDED IN THE BID INVITATION.

B-128352, AUGUST 29, 1956, 36 COMP. GEN. 177

BIDS - ITEM BASIS - LUMP-SUM PRICE - MODIFICATION UNDER AN INVITATION TO BID WHICH DOES NOT PROHIBIT THE AWARD OF ALL LOTS TO THE SAME BIDDER AND DOES NOT REQUIRE A TELEGRAPHIC MODIFICATION TO BE IN THE SAME FORM AS THE ORIGINAL BID, THE CONTRACTING OFFICER SHOULD NOT HAVE DISREGARDED A TELEGRAPHIC BID MODIFICATION WHICH OFFERED A LUMP-SUM REDUCTION IN THE TOTAL AMOUNT OF THE BID PROVIDED THE BIDDER WAS AWARDED BOTH LOTS.

TO THE SECRETARY OF THE ARMY, AUGUST 29, 1956:

REFERENCE IS MADE TO LETTER DATED JULY 27, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS), FURNISHING A REPORT ON THE AWARD OF CONTRACTS PURSUANT TO INVITATION NO. ENG-09-026 54-434, ISSUED JUNE 5, 1956, BY THE PROCUREMENT BRANCH, SOUTH ATLANTIC DIVISION, CORPS OF ENGINEERS, U.S. ARMY, ATLANTA, GEORGIA, AND ON THE PROTEST OF THE NIEDERMEYER-1MARTIN COMPANY AGAINST THE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO THE SAME INVITATION.

IT APPEARS FROM THE RECORD THAT THE INVITATION WAS DIVIDED INTO THREE LOTS, NAMELY, LOTS 1, 2 AND 3. THE FIRST TWO LOTS COVERED VARIOUS ITEMS OF TREATED LUMBER AND LOT 3 COVERED TWO ITEMS OF PILING. BIDDERS WERE ADVISED IN THE BID SCHEDULE TO QUOTE AN AVERAGE PRICE PER 1,000 BOARD FEET FOR EACH OF LOTS 1 AND 2, AND THAT AWARD OF EACH LOT WOULD BE MADE AS A WHOLE TO THE LOWEST RESPONSIBLE BIDDER. WHEN THE BIDS WERE OPENED IT WAS FOUND THAT THE ATLANTIC CREOSOTING COMPANY WAS LOW BIDDER ON LOT 1 AND THAT LORD AND BUSHNELL WAS LOW BIDDER ON LOT 2. BY TELEGRAM RECEIVED BEFORE THE BID OPENING NIEDERMEYER-1MARTIN COMPANY, WHOSE BID WAS NOT LOW ON EITHER LOT, MODIFIED ITS BID BY OFFERING A LUMP-SUM REDUCTION OF $650 IN THE TOTAL AMOUNT OF ITS BID ON LOTS 1 AND 2, IF AWARDED BOTH LOTS. IS REPORTED THAT THE CONTRACTING OFFICER CONSIDERED THE TELEGRAPHIC MODIFICATION UNACCEPTABLE BECAUSE IT DID NOT PERMIT HIM TO ASCERTAIN AN AVERAGE PRICE FOR EITHER LOT 1 OR 2 AS PROVIDED IN THE BID INVITATION. THE MODIFICATION WAS THEREFORE DISREGARDED AND AWARD WAS MADE TO THE LOW BIDDER ON EACH INDIVIDUAL LOT ON THE BIDS AS RECEIVED.

THE NIEDERMEYER-1MARTIN COMPANY PROTESTED THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING THE MODIFICATION OF ITS BID ON THE GROUND THAT THE AWARDS AS MADE WERE IN EXCESS OF ITS TOTAL BID ON LOTS 1 AND 2 BY $308.32. ITS FIGURES APPEAR TO BE CORRECT.

IN THE LETTER OF JULY 27, 1956, THE STATEMENT IS MADE THAT IN VIEW OF THE SPECIFIC LANGUAGE RELATIVE TO MAKING AN AWARD ON LOTS 1 AND 2 IT WAS CONSIDERED THAT THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING THE TELEGRAPHIC MODIFICATION WAS THE ONLY ACTION POSSIBLE WITHIN THE TERMS OF THE INVITATION FOR BIDS. THIS STATEMENT, HOWEVER, IS NOT UNDERSTOOD. PARAGRAPH 8 (B) OF THE " TERMS AND CONDITIONS OF THE INVITATION FOR BIDS" RESERVED TO THE GOVERNMENT THE RIGHT TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED AND PARAGRAPH 8 (C) PROVIDED THAT THE GOVERNMENT MIGHT ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID UNLESS THE BIDDER QUALIFIED HIS BID BY SPECIFIC LIMITATIONS. BIDDERS WERE ADVISED THAT NO VARIATIONS IN QUANTITY ABOVE A 10 PERCENT VARIATION ALLOWABLE SUBJECT TO THE CONDITIONS OF GENERAL PROVISIONS 4 WAS JUSTIFIABLE UNLESS PERMISSION WAS GRANTED IN WRITING BY THE CONTRACTING OFFICER. THERE WAS NOTHING IN THE INVITATION WHICH PROHIBITED THE AWARD OF BOTH LOTS 1 AND 2 TO THE SAME BIDDER AND THERE WAS NOTHING THEREIN WHICH REQUIRED THAT A TELEGRAPHIC MODIFICATION--- PERMITTED BY PARAGRAPH 2 (A) OF THE " TERMS AND CONDITIONS OF THE INVITATION FOR BIDS" IF RECEIVED PRIOR TO THE OPENING DATE--- SHOULD BE IN THE SAME FORM AS THE ORIGINAL BID.

ALTHOUGH ALL BIDDERS WERE ON NOTICE THAT EACH LOT WOULD BE AWARDED AS A WHOLE TO THE LOWEST RESPONSIBLE BIDDER, THEY WERE ON NOTICE ALSO THAT IN THE ABSENCE OF SPECIFIC LIMITATION IN THEIR BIDS THE GOVERNMENT RESERVED THE RIGHT TO AWARD ALL OR ANY OF THE LOTS AS ITS INTEREST MIGHT REQUIRE.

IN THE ABSENCE OF ANY CONTRARY STATEMENT IN THE TELEGRAM OF MODIFICATION THE AMOUNT OF $650 COULD READILY HAVE BEEN PRORATED TO THE PRICES QUOTED FOR LOTS 1 AND 2, AND CONSTRUED AS A PERCENTAGE DISCOUNT OFFERED ON CONDITION OF AWARD OF BOTH LOTS. WE HAVE ALSO HELD THAT AN OFFER OF A LUMP-SUM DEDUCTION FROM PRICES QUOTED ON THE BASIS OF UNIT PRICES ON ESTIMATED QUANTITIES MAY BE CONSTRUED AS FURNISHING A LUMP SUM PRICE FOR THE QUANTITIES ESTIMATED, WITH UNIT RATES (NOT AFFECTED BY THE OFFERED DEDUCTION) APPLICABLE TO ADJUSTMENTS FOR VARIATIONS FROM THE ESTIMATED QUANTITIES. SEE B-124221, JUNE 16, 1955.

THE ESTABLISHED RULE IS THAT THE BID MOST ADVANTAGEOUS TO THE GOVERNMENT IS FOR ACCEPTANCE IN THE ABSENCE OF VALID OBJECTION. THIS REQUIREMENT IS NOW STATED SPECIFICALLY IN SECTION 3 (B) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 21, 41 U.S.C. 151 (B), 23, 41 U.S.C. 153 (B), WHICH IS APPLICABLE HERE, AND IN PARAGRAPH 8 (A) OF THE " TERMS AND CONDITIONS OF THE INVITATION FOR BIDS," AS FOLLOWS:

THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. ( ITALICS SUPPLIED.)

THEREFORE, IT IS OUR VIEW THAT THE CONTRACT SHOULD HAVE BEEN AWARDED TO THE NIEDERMEYER-1MARTIN COMPANY ON THE BASIS OF ITS MODIFIED BID.

WHILE NO FURTHER QUESTION WILL BE RAISED TO THE ADMINISTRATIVE ACTION TAKEN IN THIS INSTANCE--- IT BEING NOTED THAT COMPLETE DELIVERY OF THE LUMBER WAS DUE BY AUGUST 1, 1956, AND IT BEING ASSUMED THAT PERFORMANCE HAS NOW BEEN COMPLETED--- THE MATTER IS BROUGHT TO YOUR ATTENTION FOR SUCH ACTION AS MAY BE NECESSARY TO ASSURE THAT IN FUTURE CASES AWARDS ARE MADE IN ACCORDANCE WITH THE SPIRIT AND PURPOSE OF THE LAW.