B-141786, JANUARY 28, 1960, 39 COMP. GEN. 546

B-141786: Jan 28, 1960

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BIDS - AMBIGUOUS - ACCEPTANCE - FAILURE TO SPECIFY TYPE OF ITEM A LOW BIDDER WHO FAILS TO INDICATE WHICH OF SEVERAL TYPES OF AN ITEM HE IS BIDDING ON COULD HAVE SUCH AN AMBIGUOUS BID ACCEPTED ON THE BASIS OF THE TYPE MOST ADVANTAGEOUS TO THE GOVERNMENT UNDER THE RULE THAT ANY AMBIGUITY IS TO BE CONSTRUED AGAINST THE PART WHO CREATED THE AMBIGUITY. EVEN THOUGH THE BIDDER MAY HAVE INTENDED ANOTHER TYPE. ADVISED THAT THE BID PRICE WAS BASED ON FURNISHING THE TYPE MOST ADVANTAGEOUS TO THE GOVERNMENT AND THE LEAST ADVANTAGEOUS TO THE BIDDER WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. 1960: REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 22. OF THESE BIDS THE LOWEST BID FOR THE A TYPE WAS $44.00.

B-141786, JANUARY 28, 1960, 39 COMP. GEN. 546

BIDS - AMBIGUOUS - ACCEPTANCE - FAILURE TO SPECIFY TYPE OF ITEM A LOW BIDDER WHO FAILS TO INDICATE WHICH OF SEVERAL TYPES OF AN ITEM HE IS BIDDING ON COULD HAVE SUCH AN AMBIGUOUS BID ACCEPTED ON THE BASIS OF THE TYPE MOST ADVANTAGEOUS TO THE GOVERNMENT UNDER THE RULE THAT ANY AMBIGUITY IS TO BE CONSTRUED AGAINST THE PART WHO CREATED THE AMBIGUITY, EVEN THOUGH THE BIDDER MAY HAVE INTENDED ANOTHER TYPE, AND SUCH ACCEPTANCE WOULD NOT BE PREJUDICIAL TO THE OTHER BIDDERS; THEREFORE, ACCEPTANCE OF THE LOW BID AFTER THE BIDDER, UPON REQUEST FOR CLARIFICATION, ADVISED THAT THE BID PRICE WAS BASED ON FURNISHING THE TYPE MOST ADVANTAGEOUS TO THE GOVERNMENT AND THE LEAST ADVANTAGEOUS TO THE BIDDER WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS; HOWEVER, IN FUTURE PROCUREMENTS IT MIGHT BE ADVISABLE TO DESCRIBE EACH TYPE AS A SEPARATE ITEM AND TO REQUEST THE INSERTION OF BID PRICES FOR EACH ITEM.

TO THE ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, JANUARY 28, 1960:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 22, 1960, REQUESTING OUR ADVICE AS TO WHETHER A BID SUBMITTED BY TRI-STATE INSURANCE COMPANY UNDER INVITATION FOR BIDS NO. SBA-P AND S 60-1, MAY BE ACCEPTED.

THE INVITATION REQUESTED BIDS ON STANDARD FORM 33 UNDER ITEM 1 FOR FURNISHING SURETY BONDS COVERING CERTAIN OFFICERS AND EMPLOYEES OF YOUR ADMINISTRATION. HOWEVER, AN ATTACHMENT ENTITLED " ADDITIONAL INSTRUCTIONS TO BIDDERS" INVITED BIDDERS TO SUBMIT BIDS ON THE FOLLOWING BASIS:

A. POSITION SCHEDULE BOND WITHOUT PREMIUM ADJUSTMENT COVERING WASHINGTON EMPLOYEES ONLY AS LISTED ON EXHIBIT D AND COVERED BY BOND FORM SBA FORM 315.

B. BLANKET BOND WITHOUT PREMIUM ADJUSTMENT COVERING ALL POSITIONS OF THE AGENCY AS REFLECTED IN EXHIBIT C AND COVERED BY BOND FORM SBA FORM 316.

C. BLANKET BOND WITHOUT PREMIUM ADJUSTMENT COVERING ALL FIELD EMPLOYEES OF THE AGENCY AS REFLECTED IN EXHIBIT C AND COVERED BY BOND FORM SBA FORM 317.

UNDER THE ABOVE DESCRIPTIONS, BONDS COMPLYING WITH B WOULD AFFORD THE GREATEST COVERAGE, BONDS COMPLYING WITH C WOULD AFFORD THE SECOND GREATEST COVERAGE, AND BONDS COMPLYING WITH A WOULD AFFORD THE LEAST COVERAGE. THREE COMPANIES SUBMITTED SEPARATE BIDS ON EACH TYPE OF BOND COVERED BY A, B, AND C. OF THESE BIDS THE LOWEST BID FOR THE A TYPE WAS $44.00, THE LOWEST FOR THE B TYPE WAS $1,432.91, AND THE LOWEST FOR THE C TYPE WAS $1,281.31.

THE TRI-STATE INSURANCE COMPANY SUBMITTED ONLY ONE BID PRICE IN THE AMOUNT OF $1,270.20 (REDUCED TO $1,053.50 PRIOR TO BID OPENING), BUT DID NOT SPECIFY WHETHER THIS BID WAS BASED UPON SUPPLYING THE A, B, OR C TYPE BOND. YOUR LETTER POINTS OUT THAT TRI-STATE IN THE PAST HAS BID ONLY ON FURNISHING THE TYPE B BOND; THAT THE DIFFERENCE BETWEEN ITS BID AND THE OTHER BIDS ON THE TYPE A BONDS (WHICH WERE $44.00, $47.45, AND $131.81) MAKES IT APPARENT THAT THE COMPANY IS NOT BIDDING ON THE A TYPE IN THIS INSTANCE; AND THAT ITS BID PRICE IS LOWER THAN THE LOWEST OTHER BID RECEIVED FOR FURNISHING EITHER B OR C, OR A COMBINATION OF A AND C TYPE BONDS. ADDITIONALLY, YOU ADVISE THAT TRI-STATE, UPON BEING REQUESTED TO CLARIFY ITS BID AFTER BID OPENING, ADVISED THAT ITS BID PRICE WAS BASED UPON FURNISHING THE B TYPE BOND, WHICH, OF COURSE, IS THE LEAST ADVANTAGEOUS TO THE BIDDER AND THE MOST ADVANTAGEOUS TO THE GOVERNMENT.

THE FAILURE OF TRI-STATE TO DEFINITELY IDENTIFY THE TYPE OF BOND IT WAS PROPOSING TO FURNISH RESULTED IN AN AMBIGUOUS BID, IN THAT IT WAS IMPOSSIBLE TO ASCERTAIN FROM THE BID OR BID PRICE, WHETHER A TYPE B OR TYPE C BOND WAS BEING OFFERED. THE RULE APPEARS TO BE WELL ESTABLISHED THAT ANY AMBIGUITY IN A CONTRACT OR BID IS TO BE CONSTRUED AGAINST THE PARTY WHO CREATED THE AMBIGUITY. SEE 12 AM. JUR., CONTRACTS, SEC. 252; WILLISTON ON CONTRACTS, SECTIONS 37 AND 621; 16 COMP. GEN. 569; B 133769, SEPTEMBER 20, 1957; B-141092, NOVEMBER 10, 1959. UNDER THE CIRCUMSTANCES, IT MAY WELL BE THAT THE GOVERNMENT WAS ENTITLED TO ACCEPT THE BID OF TRI- STATE, WITHOUT CLARIFICATION, AND INSIST UPON THE BIDDER'S FURNISHING A TYPE B BOND AT THE BID PRICE, EVEN THOUGH THE BIDDER HAD INTENDED TO FURNISH ANOTHER TYPE. HAD SUCH COURSE OF ACTION BEEN ADOPTED BY YOUR ADMINISTRATION, WITHOUT REQUESTING CLARIFICATION FROM TRI-STATE, WE SEE NO BASIS UPON WHICH IT COULD HAVE BEEN CONTENDED THAT THE AWARD WAS NOT THE MOST ADVANTAGEOUS TO THE GOVERNMENT, OR THAT AN AWARD ON THAT BASIS WOULD HAVE BEEN UNFAIR TO OTHER BIDDERS. THE BIDDER'S CONFIRMATION, PRIOR TO ACCEPTANCE, THAT ITS BID WAS INTENDED TO OFFER THE TYPE OF BOND MOST ADVANTAGEOUS TO THE GOVERNMENT AND LEAST ADVANTAGEOUS TO THE BIDDER, THEREFORE, CANNOT BE SAID TO OPERATE TO THE DISADVANTAGE OF OTHER BIDDERS AND, ACCORDINGLY, IT IS OUR OPINION THAT THE BID MAY BE ACCEPTED ON THAT BASIS.

IN FUTURE PROCUREMENTS OF THIS NATURE, AND IN ORDER TO PRECLUDE A RECURRENCE OF THIS SITUATION, YOUR ADMINISTRATION MAY WISH TO CONSIDER THE ADVISABILITY OF DESCRIBING EACH TYPE OF BOND AS A SEPARATE ITEM ON THE BID FORM, AND REQUESTING THAT BID PRICES BE INSERTED FOLLOWING EACH ITEM PROPOSED TO BE FURNISHED.