B-140644, OCTOBER 9, 1959, 39 COMP. GEN. 282

B-140644: Oct 9, 1959

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CONTRACTS - OFFER AND ACCEPTANCE - BIDS - EVALUATION A BIDDER WHO WAS ADVISED BY THE CONTRACTING OFFICER THAT HIS BID WAS THE LOW ACCEPTABLE BID ON ONE ITEM OF A MULTIPLE ITEM INVITATION BUT THAT THE CONTRACT SUBMITTED FOR SIGNATURE WOULD NOT BECOME EFFECTIVE UNTIL APPROVED BY A HIGHER ADMINISTRATIVE AUTHORITY MAY NOT HAVE THE LETTER OR ANY ORAL CONVERSATIONS WITH THE CONTRACTING OFFICER REGARDED AS AN ABSOLUTE. UNDER AN INVITATION WHICH PROVIDES THAT AN AWARD WILL BE MADE ON THE BASIS OF THE LOWEST PRICE FOR ANY COMBINATION OF TWO OR MORE ITEMS OF WORK. AN AWARD TO A BIDDER ON THE BASIS THAT THREE OF THE ITEMS COULD NOT BE SEPARATED IS NOT PROPER. PARTICULARLY WHEN THE CONTRACTING AGENCY WAS AWARE OF THE NECESSITY FOR USING SUCH METHOD OF EVALUATION PRIOR TO THE ISSUANCE OF THE INVITATION AND SHOULD HAVE INDICATED THE METHOD IN THE INVITATION.

B-140644, OCTOBER 9, 1959, 39 COMP. GEN. 282

CONTRACTS - OFFER AND ACCEPTANCE - BIDS - EVALUATION A BIDDER WHO WAS ADVISED BY THE CONTRACTING OFFICER THAT HIS BID WAS THE LOW ACCEPTABLE BID ON ONE ITEM OF A MULTIPLE ITEM INVITATION BUT THAT THE CONTRACT SUBMITTED FOR SIGNATURE WOULD NOT BECOME EFFECTIVE UNTIL APPROVED BY A HIGHER ADMINISTRATIVE AUTHORITY MAY NOT HAVE THE LETTER OR ANY ORAL CONVERSATIONS WITH THE CONTRACTING OFFICER REGARDED AS AN ABSOLUTE, UNEQUIVOCAL ACCEPTANCE WHICH CONSUMMATES A LEGAL AND BINDING CONTRACT. UNDER AN INVITATION WHICH PROVIDES THAT AN AWARD WILL BE MADE ON THE BASIS OF THE LOWEST PRICE FOR ANY COMBINATION OF TWO OR MORE ITEMS OF WORK, AN AWARD TO A BIDDER ON THE BASIS THAT THREE OF THE ITEMS COULD NOT BE SEPARATED IS NOT PROPER, PARTICULARLY WHEN THE CONTRACTING AGENCY WAS AWARE OF THE NECESSITY FOR USING SUCH METHOD OF EVALUATION PRIOR TO THE ISSUANCE OF THE INVITATION AND SHOULD HAVE INDICATED THE METHOD IN THE INVITATION; THEREFORE, IF AN AWARD CANNOT BE MADE IN ACCORDANCE WITH THE INVITATION, THE WORK SHOULD BE READVERTISED.

TO THE SECRETARY OF THE AIR FORCE, OCTOBER 9, 1959:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 29, 1959, WITH ENCLOSURES, FROM THE DEPUTY FOR PROCUREMENT AND PRODUCTION, REPORTING ON THE PROTEST OF MONACO AND SON, INC. AGAINST THE PROPOSED AWARDS TO BE MADE UNDER NO. 49- 642-59-117, ISSUED BY THE OFFICE OF THE BASE PROCUREMENT OFFICER, 1001ST AIR BASE WING, HEADQUARTERS COMMAND, UNITED STATES AIR FORCE, ANDREWS AIR FORCE BASE, WASHINGTON 25, D.C.

THE REFERRED-TO INVITATION REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS AND FOR PERFORMING ALL WORK NECESSARY FOR THE REPLACEMENT OF UNDERGROUND STEAM MAINS, AREAS 1 AND 3, ANDREWS AIR FORCE BASE. THE WORK COVERED BY AREA 1 WAS BROKEN DOWN INTO 2 ITEMS AND THE WORK COVERED BY AREA 3 WAS BROKEN DOWN INTO 3 ITEMS. ITEM 6 COVERED ALL THE WORK IN AREAS 1 AND 3. PROSPECTIVE BIDDERS WERE ADVISED IN SCHEDULE "C" OF THE INVITATION THAT:

AN AWARD WILL BE MADE TO THE LOWEST QUALIFIED BIDDER FOR ANY COMBINATION OF ITEMS, 1 THROUGH 5, BUT THIS AWARD WILL NOT BE MADE FOR LESS THAN TWO ITEMS, OR ALTERNATIVELY AN AWARD WILL BE MADE FOR ITEM 6.

IN RESPONSE, MONACO AND SON, INC. SUBMITTED A BID DATED JUNE 26, 1959, OFFERING TO PERFORM THE WORK COVERED BY ITEMS 1, 2, 3, 4, AND 5 AT PRICES OF $37,980, $37,330, $48,930, $41,510, AND $36,440, RESPECTIVELY, AND TO PERFORM THE WORK COVERED BY ITEM 6 ( AREAS 1 AND 3) FOR THE LUMP SUM OF $195,500.

BY LETTER DATED AUGUST 5, 1959, THE CONTRACTING OFFICER ADVISED MONACO AND SON, INC. THAT ITS BID OF $195,500 FOR ITEM 6 ( AREAS 1 AND 3) HAD BEEN DETERMINED TO BE THE LOW ACCEPTABLE BID UNDER INVITATION NO. 49-642- 59-117. WHILE COPIES OF THE PROPOSED CONTRACT WERE FORWARDED BY LETTER OF AUGUST 5, 1959, TO MONACO FOR SIGNATURE, MONACO WAS SPECIFICALLY ADVISED BY THE CONTRACTING OFFICER THAT THE LETTER DID NOT CONSTITUTE AN AWARD OF THE SUBJECT CONTRACT TO IT OR AN OFFICIAL NOTICE TO PROCEED. SUBSEQUENTLY, BY LETTER DATED AUGUST 17, 1959, THE CONTRACTING OFFICER ADVISED MONACO THAT A REEVALUATION OF THE BIDS SUBMITTED IN RESPONSE TO THE INVITATION HAD REVEALED THAT IT WAS MANDATORY FOR THE GOVERNMENT TO AWARD ONE PART OF THE PROJECT TO THE POOLE AND KENT COMPANY, THE LOW BIDDER ON ITEMS 1 AND 2 ( AREA 1), AND TO AWARD THE OTHER PART OF THE PROJECT TO SCHWEIGERT, INC., THE LOW BIDDER ON ITEMS 3, 4, AND 5 ( AREA 3); AND THAT AN AWARD TO THESE BIDDERS IN THE TOTAL SUM OF $192,050 WOULD RESULT IN A SAVINGS TO THE GOVERNMENT OF $3,450.

IN A LETTER DATED AUGUST 31, 1959, MONACO CONTENDED THAT THE AWARDS PROPOSED BY THE CONTRACTING OFFICER IN HIS LETTER OF AUGUST 17, 1959, WOULD NOT RESULT IN THE LOWEST AGGREGATE BID PRICE TO THE GOVERNMENT FOR ITEMS 1 TO 5, INCLUSIVE; THAT THE AWARD OF ITEMS 3 AND 4 TO MONACO AND OF ITEMS 1, 2, AND 5 TO SCHWEIGERT, INC. WOULD RESULT IN A TOTAL PRICE OF $190,340, WHICH, IT STATED IS $1,710 LESS THAN THE TOTAL OF THE AWARDS PROPOSED BY THE CONTRACTING OFFICER.

IN REGARD TO MONACO'S CONTENTION THAT IT HAD A BINDING CONTRACT WITH THE GOVERNMENT BY VIRTUE OF ORAL CONVERSATIONS HELD WITH THE CONTRACTING OFFICIALS AND BY RECEIPT OF THE LETTER OF AUGUST 5, 1959, IT IS WELL SETTLED THAT TO PRODUCE A BINDING CONTRACT AN ACCEPTANCE MUST, AMONG OTHER THINGS, BE ABSOLUTE, UNAMBIGUOUS, UNEQUIVOCAL, WITHOUT CONDITION OR RESERVATION. 1 WILLISTON CONTRACTS 207. IN THE PRESENT CASE, THE LETTER OF AUGUST 5, 1959, WAS NOT DESIGNATED AS A " NOTICE OF ARD," NOR WAS THERE ANY AFFIRMATIVE STATEMENT THEREIN THAT THE BID HAD BEEN ACCEPTED. RATHER, MONACO WAS ADVISED MERELY THAT ITS BID HAD BEEN DETERMINED TO BE THE LOW ACCEPTABLE BID ON ITEM 6 AND EXPRESSLY ADVISED THAT THE CONTRACT, WHICH IT WAS ASKED TO SIGN, WOULD NOT BECOME EFFECTIVE UNTIL APPROVAL BY HIGHER HEADQUARTERS. IT IS, THEREFORE, APPARENT THAT A LEGAL AND BINDING CONTRACT WAS NOT CONSUMMATED BY THE LETTER OF AUGUST 5, 1959. SEE 21 COMP. GEN. 605.

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

WE CONSISTENTLY HAVE HELD THAT BIDS SHOULD NOT BE EVALUATED ON A BASIS CONTRARY TO THAT STATED IN THE INVITATION, 10 COMP. GEN. 261. THEREFORE, IN VIEW OF THE PLAIN LANGUAGE ABOVE QUOTED CONTAINED IN SCHEDULE "C" OF THE INVITATION, IN OUR OPINION IT IS NOT PROPER TO EVALUATE THE BIDS ON ANY BASIS OTHER THAN THE LOWEST PRICE FOR ANY COMBINATION OF TWO OR MORE ITEMS. THE CONTRACTING OFFICER HAS, HOWEVER, EVALUATED THE BIDS ON THE BASIS THAT THE INTEREST OF THE GOVERNMENT REQUIRES THAT ITEMS 3, 4, AND 5 BE AWARDED TO ONE BIDDER ONLY. INASMUCH AS IT APPEARS THAT THE GOVERNMENT WAS AWARE OF THE NECESSITY FOR EMPLOYING THIS METHOD OF EVALUATION PRIOR TO THE ISSUANCE OF THE INVITATION FOR BIDS, WE BELIEVE THAT APPROPRIATE LANGUAGE TO THAT EFFECT SHOULD HAVE BEEN INCLUDED IN THE INVITATION.

IT IS OUR VIEW, THEREFORE, THAT AWARD SHOULD BE MADE EITHER IN THE MANNER INDICATED BY MONACO OR, IF THIS IS NOT FEASIBLE, ALL BIDS SHOULD BE REJECTED AND THE WORK READVERTISED IN A MANNER CLEARLY SHOWING THE BASIS ON WHICH BIDS WILL BE EVALUATED.

THE DRAWINGS ACCOMPANYING THE REPORT OF SEPTEMBER 29, 1959, ARE RETURNED.