B-135983, MAY 23, 1958

B-135983: May 23, 1958

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

J. PELTIER: REFERENCE IS MADE TO A LETTER OF APRIL 29. BOTH INVITATIONS WERE SET FOR OPENING AT 2 P.M. THE LOW BIDDER ON INVITATION NBY 15367 WAS MILLER BUILDING CORPORATION AT $65. THE SECOND LOW BIDDER WAS SHAW AND ESTES AT $66. THE LOW BIDDER ON INVITATION NBY 15371 WAS SHAW AND ESTES AT $285. THE SECOND LOW BID RECEIVED WAS $294. BEFORE BID OPENING THE FOLLOWING TELEGRAM WAS RECEIVED FROM SHAW AND ESTES: "NBY 15367 AND NBY 15371. THIS IS NOT A QUALIFICATION OR MODIFICATION TO OUR PROPOSALS ON THESE SEPARATE NBY NUMBERS. IF THIS CONTRACTOR IS SUCCESSFUL BIDDER ON EITHER OF THESE PROJECTS. MILLER BUILDING CORPORATION WAS INVITED TO BID ON BOTH JOBS BUT DID NOT BID ON NBY 15371. IS WHETHER THE ACCEPTANCE OF A BID CONDITIONED UPON THE AWARD TO THE BIDDER OF WORK UNDER ANOTHER AND SEPARATE INVITATION VIOLATES THE PRINCIPLE OF EQUALITY OF TREATMENT WHICH IS REQUIRED BY COMPETITIVE BIDDING STATUTES TO BE GIVEN ALL PROSPECTIVE BIDDERS.

B-135983, MAY 23, 1958

TO REAR ADMIRAL E. J. PELTIER:

REFERENCE IS MADE TO A LETTER OF APRIL 29, 1958, FROM THE DIRECTOR, CONTRACTS DIVISION, BUREAU OF YARDS AND DOCKS, REQUESTING OUR OPINION ON THE PROPRIETY OF ACCEPTING A BID SUBMITTED BY THE FIRM OF SHAW AND ESTES, INC., ON INVITATIONS NOS. NBY 15367 AND NBY 15371 ISSUED BY THE 5TH NAVAL DISTRICT.

INVITATION NBY 15367 COVERED THE CONSTRUCTION OF A JET ENGINE AIR STARTER FACILITY AND INVITATION NBY 15371 THE CONSTRUCTION OF A CHEMICAL CLEANING FACILITY, BOTH AT CHERRY POINT, NORTH CAROLINA. BOTH INVITATIONS WERE SET FOR OPENING AT 2 P.M. ON APRIL 25, 1958. THE LOW BIDDER ON INVITATION NBY 15367 WAS MILLER BUILDING CORPORATION AT $65,456; THE SECOND LOW BIDDER WAS SHAW AND ESTES AT $66,000. THE LOW BIDDER ON INVITATION NBY 15371 WAS SHAW AND ESTES AT $285,348; THE SECOND LOW BID RECEIVED WAS $294,194. HOWEVER, BEFORE BID OPENING THE FOLLOWING TELEGRAM WAS RECEIVED FROM SHAW AND ESTES:

"NBY 15367 AND NBY 15371. THIS IS NOT A QUALIFICATION OR MODIFICATION TO OUR PROPOSALS ON THESE SEPARATE NBY NUMBERS. IF THIS CONTRACTOR IS SUCCESSFUL BIDDER ON EITHER OF THESE PROJECTS, THEN A $10,000 REDUCTION IN PRICE CAN BE OFFERED FOR AWARD OF THE COMBINED WORK. WE REALIZE THAT DUE TO PROCUREMENT REGULATIONS THE SEPARATE PROPOSALS CANNOT BE COMBINED; HOWEVER, WE SUBMIT THIS FOR YOUR CONSIDERATION.'

MILLER BUILDING CORPORATION WAS INVITED TO BID ON BOTH JOBS BUT DID NOT BID ON NBY 15371.

THE LETTER OF APRIL 29, 1958, REQUESTS ADVICE WHETHER OUR DECISION B- 132611 OF SEPTEMBER 10, 1957, 37 COMP. GEN. 186, PRECLUDES CONSIDERATION OF THE $10,000 PRICE REDUCTION OFFERED FOR THE COMBINED WORK.

THE GENERAL QUESTION INVOLVED IN THAT CASE, AS HERE, IS WHETHER THE ACCEPTANCE OF A BID CONDITIONED UPON THE AWARD TO THE BIDDER OF WORK UNDER ANOTHER AND SEPARATE INVITATION VIOLATES THE PRINCIPLE OF EQUALITY OF TREATMENT WHICH IS REQUIRED BY COMPETITIVE BIDDING STATUTES TO BE GIVEN ALL PROSPECTIVE BIDDERS. FOR THE REASONS GIVEN IN OUR DECISION OF SEPTEMBER 10, 1957, PARTICULARLY THE UNEQUAL POSITION OF BIDDERS WHO MAY NOT HAVE KNOWN OF THE ISSUANCE OF BOTH INVITATIONS OR WHO MAY HAVE FAILED TO OFFER A LOWER COMBINATION BID BECAUSE OF A BELIEF THAT SUCH A BID WOULD NOT BE PERMISSIBLE, WE BELIEVE IT WOULD NOT HAVE BEEN PROPER TO HAVE ACCEPTED SHAW AND ESTES' COMBINATION BID. BECAUSE OF THE NECESSITY FOR MAKING AWARDS THE DAY AFTER RECEIPT OF THE BUREAU'S LETTER, WE UNDERSTAND THAT AWARDS WERE MADE SEPARATELY ON THE TWO INVITATIONS AFTER INFORMAL ADVICE FROM OUR OFFICE TO THE EFFECT THAT SUCH ACTION WOULD NOT BE IMPROPER.