B-139983, AUG. 20, 1959

B-139983: Aug 20, 1959

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TO GERSTEN CONSTRUCTION COMPANY: REFERENCE IS MADE TO A TELEGRAM OF JUNE 23. BY THE AFOREMENTIONED INVITATION BIDS WERE REQUESTED. BIDS WERE INVITED ON 15 ADDITIVE ALTERNATE ITEMS WITH THE AIR FORCE RETAINING THE RIGHT TO ACCEPT BIDS BASED ON ANY OR ALL OF THE ALTERNATE ITEMS. BIDS WERE SUBMITTED BY SHERIDEN-MURRAY. SHERIDEN-MURRAY WAS DETERMINED TO BE THE LOW BIDDER AND ON JUNE 26. A LETTER OF ACCEPTABILITY WAS ISSUED TO THAT FIRM BY THE AIR FORCE. THE TOTAL BID PRICE WAS $14. THEIR BIDS ARE NONRESPONSIVE AND SHOULD BE REJECTED. IT IS ADMINISTRATIVELY REPORTED THAT THIS ADDENDUM WAS NEVER OFFICIALLY DISTRIBUTED TO BIDDERS BY THE AIR FORCE. IN CASES WHERE AN ADDENDUM WAS MADE A PART OF THE INVITATION THE CONTRACTING OFFICER ISSUED AN AMENDMENT TO THE INVITATION TO THAT EFFECT AND REQUIRED THE BIDDER'S WRITTEN ACCEPTANCE OF THE AMENDMENT WHEN SUBMITTING BIDS.

B-139983, AUG. 20, 1959

TO GERSTEN CONSTRUCTION COMPANY:

REFERENCE IS MADE TO A TELEGRAM OF JUNE 23, 1959, FROM MR. ALBERT GERSTEN, PRESIDENT OF YOUR COMPANY, PROTESTING THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION NO. IFB 25-600-59-84 ISSUED BY THE BASE PROCUREMENT OFFICE, OFFUTT AIR FORCE BASE, NEBRASKA.

BY THE AFOREMENTIONED INVITATION BIDS WERE REQUESTED--- TO BE OPENED JUNE 19, 1959--- FOR THE CONSTRUCTION OF 900 CAPEHART HOUSING UNITS AT RICHARD BONG AIR FORCE BASE, KANSASVILLE, WISCONSIN. IN ADDITION TO THE BASIC ITEM, BIDS WERE INVITED ON 15 ADDITIVE ALTERNATE ITEMS WITH THE AIR FORCE RETAINING THE RIGHT TO ACCEPT BIDS BASED ON ANY OR ALL OF THE ALTERNATE ITEMS. BIDS WERE SUBMITTED BY SHERIDEN-MURRAY, INC., SCHROEDEL GANSER AND ASSOCIATES, AND YOUR FIRM. SHERIDEN-MURRAY WAS DETERMINED TO BE THE LOW BIDDER AND ON JUNE 26, 1959, A LETTER OF ACCEPTABILITY WAS ISSUED TO THAT FIRM BY THE AIR FORCE. THIS LETTER ACCEPTED THE LOW BASIC BID OF $14,088,000 PLUS ALTERNATE 1 (GARAGE SLABS) IN THE AMOUNT OF $108,000, ALTERNATE 3 (LAUNDRY TRAYS) IN THE AMOUNT OF $33,000 AND THE ADDITIONAL AMOUNT OF $135,000 REPRESENTING THE COST OF INSPECTION SERVICES (TITLE II FEES). THE TOTAL BID PRICE WAS $14,364,000 AS COMPARED WITH YOUR BID OF $14,469,000 FOR THE SAME ITEMS.

FIRST, YOU CONTEND THAT YOU RECEIVED ADDENDUM NO. 4 IN THE MAILS AND THAT YOU SUBSEQUENTLY INCREASED YOUR BASIC BID PRICE AS A RESULT OF CERTAIN INFORMATION IN THAT ADDENDUM. ALSO, YOU STATE THAT SINCE NONE OF THE OTHER BIDDERS RETURNED THEIR BIDS WITH ADDENDUM NO. 4, THEIR BIDS ARE NONRESPONSIVE AND SHOULD BE REJECTED. IT IS ADMINISTRATIVELY REPORTED THAT THIS ADDENDUM WAS NEVER OFFICIALLY DISTRIBUTED TO BIDDERS BY THE AIR FORCE. IN CASES WHERE AN ADDENDUM WAS MADE A PART OF THE INVITATION THE CONTRACTING OFFICER ISSUED AN AMENDMENT TO THE INVITATION TO THAT EFFECT AND REQUIRED THE BIDDER'S WRITTEN ACCEPTANCE OF THE AMENDMENT WHEN SUBMITTING BIDS. HOWEVER, SUCH A PROCEDURE WAS NOT FOLLOWED IN THE CASE OF ADDENDUM NO. 4, BECAUSE THE PRINTER DELIVERED THE COPIES LATE TO THE CONTRACTING OFFICER AND IT WAS DECIDED, THEREFORE, TO PROCEED WITH THE BID OPENING WITHOUT THIS DOCUMENT. THE ADMINISTRATIVE OFFICE REPORTS THAT IT IS NOT CERTAIN AS TO WHERE AND HOW YOUR FIRM OBTAINED THE COPY OF THE ADDENDUM AND THAT THE AIR FORCE DID NOT DISTRIBUTE THE ADDENDUM TO ANY BIDDERS. IT IS INDICATED THAT THE CONTRACT PRINTER FOR THE ARCHITECT ENGINEER DISTRIBUTED COPIES OF THE ADDENDUM TO PARTIES WHO HAD PURCHASED PLANS AND SPECIFICATIONS. THE CONTRACTING OFFICER, IN A SIGNED STATEMENT DATED JULY 15, 1959, REPORTS THAT:

"PRIOR TO THE BID OPENING, I WAS APPROACHED BY GERSTEN WHO ADVISED ME THAT HE HAD CONSIDERED ADDENDUM NO. 4 IN HIS BID PRICE AND WANTED TO RECEIPT FOR THE ADDENDUM. I TOLD HIM THAT ADDENDUM NO. 4 WAS NOT ISSUED BY MY OFFICE AND WAS NOT TO BE CONSIDERED IN THE BID PRICE. I ADVISED HIM TO REVISE HIS BID ACCORDINGLY. MR. GERSTEN MADE THE STATEMENT THAT THE DIFFERENCE IN PRICE WAS NEGLIGIBLE, OR WORDS TO THAT EFFECT.

"IN THE PROCESS OF CLOSING THE INVITATION FOR BIDS PERIOD, I EMPHASIZED THAT ONLY AMENDMENTS NO. 1 THROUGH NO. 6 TO INCLUDE ADDENDUM NO. 3 WERE TO BE CONSIDERED, AND ANY BIDDER WHO HAD NOT PREPARED HIS BID ACCORDINGLY, COULD WITHDRAW HIS BID AND MAKE THE NECESSARY CORRECTIONS. GERSTEN DID NOT COME FORWARD TO PICK UP HIS BID IN ORDER TO MAKE THE NECESSARY CORRECTIONS.'

IN VIEW OF THE FOREGOING WE CANNOT ACCEPT YOUR CONTENTION THAT ALL OTHER BIDS SHOULD BE REJECTED SINCE THEY FAILED TO INCLUDE ADDENDUM NO. 4 BECAUSE THE AIR FORCE NEVER REQUIRED ANY BIDDER TO COMPLY WITH THAT ADDENDUM. FURTHERMORE, SINCE YOU WERE ADVISED, BEFORE OPENING OF BIDS, THAT ADDENDUM NO. 4 WAS NOT A PART OF THE INVITATION FOR BIDS AND WERE AFFORDED THE OPPORTUNITY TO CORRECT YOUR BID IF YOU SO DESIRED, IT DOES NOT APPEAR THAT YOU HAVE BEEN PREJUDICED IN ANY WAY.

YOUR SECOND CONTENTION IS TO THE EFFECT THAT THE AIR FORCE SHOULD HAVE ACCEPTED YOUR BASIC BID AND ADDITIVE ALTERNATES 1, 3, 4, 5, 6A, 6B, 7, AND 10 TO 14 INCLUSIVE, SINCE ALL OTHER BIDDERS WHO OFFERED THESE ALTERNATES TO THE GOVERNMENT EXCEED THE STATUTORY LIMIT OF $16,500 PER UNIT WHILE YOUR BID AMOUNTED TO $16,485 PER UNIT. YOUR ATTENTION IN THIS REGARD IS INVITED TO CERTAIN PERTINENT PROVISIONS OF THE INVITATION WHICH ARE AS FOLLOWS:

"10. THE AIR FORCE RETAINS THE RIGHT TO ACCEPT ALL BIDS BASED ON ANY OR ALL OF THE FOLLOWING LISTED ALTERNATES. THE ALTERNATE, OR ALTERNATES, IF ACCEPTED BY THE AIR FORCE, WILL RESULT IN AN INCREASE IN THE BID AMOUNT SHOWN IN PARAGRAPH 1 OF THE BID FORM AND WILL BE ACCOMPLISHED BY THE ACCEPTABLE BIDDER AS PART OF THE HOUSING CONTRACT:

"12. BIDDERS ARE ADVISED THAT THE MAXIMUM TOTAL OF THE INSURABLE MORTGAGES MAY NOT EXCEED THE LESSER OF THREE ITEMS BEING (1) AMOUNT OF THE LOWEST ACCEPTABLE BID, (2) FHA TOTAL OF THE ESTIMATED REPLACEMENT COST OF THE PROPERTY OR PROJECTS OR (3) AN AVERAGE PER FAMILY UNIT OF $16,500 LESS THE ESTIMATED VALUE OF ANY USABLE UTILITIES WITHIN THE PROPERTY OR PROJECTS WHERE OWNED BY THE DEPARTMENT OR FURNISHED BY OTHER THAN MORTGAGE PROCEEDS. ATTENTION IS INVITED TO FHA'S FINAL APPRAISAL AND ELIGIBILITY STATEMENTS ATTACHED HERETO. THE BIDDER WILL BE REQUIRED TO PAY THE FEES AND COSTS PRESCRIBED IN SUCH STATEMENTS.'

FURTHERMORE, AS INDICATED IN PARAGRAPH 5A OF THE INVITATION FOR BIDS AND PARAGRAPH 4A, BID FORMS, THE CONTRACTOR MUST PAY THE AREA PREVAILING WAGE RATES AND THE CONTRACT PRICE WAS TO BE INCREASED OR DECREASED TO REFLECT CHANGES IN THE PREVAILING WAGE RATE UP TO START OF CONSTRUCTION. IT WAS ASCERTAINED THAT THE FORTHCOMING WAGE DETERMINATION WOULD RESULT IN A VERY SUBSTANTIAL INCREASE IN THE CONTRACT PRICE AND THIS MATTER HAD TO BE TAKEN INTO ACCOUNT IN ACCEPTING A BID AND THE AMOUNT THEREOF HAD TO BE CONSIDERABLY BELOW THE STATUTORY LIMITATION OF $16,500 PER UNIT AVERAGE COST SO THAT THE INCREASE IN CONTRACT PRICE OCCASIONED BY WAGE INCREASES WOULD NOT CAUSE THE STATUTORY LIMITATION TO BE EXCEEDED. IN VIEW THEREOF, AND THE FACT THAT THE AIR FORCE RESERVED THE RIGHT TO ACCEPT OR REJECT ANY OR ALL OF THE ADDITIVE ALTERNATES IN ANY ORDER DESIRED, THE AIR FORCE SURVEYED THE AVAILABLE ALTERNATES SO AS TO KEEP WITHIN THE STATUTORY LIMITATION AND ADHERED TO THEIR SEQUENCE, INSOFAR AS POSSIBLE, BY SELECTING ALTERNATES 1 AND 3. IT IS REPORTED THAT THE SELECTION MADE WAS A "BONA FIDE CHOICE" AND THAT AWARD WAS MADE SOLELY ON THE BASIS OF THE "MOST HOUSE" FOR THE MONEY.

YOUR THIRD CONTENTION IS THAT, IN THE SELECTION OF ADDITIVE ALTERNATES, ALTERNATE NO. 5 COVERING COPPER GUTTERS AND DOWNSPOUTS WHICH YOU DEEM ESSENTIAL FOR THE WISCONSIN AREA WAS EXCLUDED. IN VIEW OF THE RIGHT OF SELECTION RESERVED TO THE AIR FORCE, AND IN THE ABSENCE OF CONVINCING EVIDENCE THAT THE SELECTIONS MADE WERE ARBITRARY AND CONTRARY TO THE BEST INTEREST OF THE UNITED STATES, WE MUST CONCLUDE THAT YOUR PROTEST DOES NOT FURNISH ANY BASIS WHICH WOULD JUSTIFY US IN QUESTIONING THE ADMINISTRATIVE ACTION TAKEN IN THE CASE.