B-144322, JAN. 4, 1961

B-144322: Jan 4, 1961

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INCLUDED IN YOUR BID WAS THE FOLLOWING STATEMENT: "AT THE GOV-T'S OPTION IF AWARDED ITEMS 73 TO 114 INCLUSIVE WE OFFER $83. ITEMS 105 THROUGH 108 WERE WITHDRAWN FROM THE SALE DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE SURPLUS SALES OFFICE. THE TIMING WAS SUCH THAT IT WAS IMPOSSIBLE FOR THE OFFICE TO GIVE THE BIDDERS WRITTEN ADVANCE NOTICE OF THE WITHDRAWAL. AN ANNOUNCEMENT WAS MADE ORALLY JUST PRIOR TO BID OPENING. IT IS REPORTED THAT AFTER. GOLDBERG OF YOUR FIRM ADVISED THE CONTRACTING OFFICER THAT HE HAD NOT BEEN PRESENT WHEN THE WITHDRAWAL OF THE FOUR ITEMS WAS ANNOUNCED. IT WAS DETERMINED THAT AWARD TO REX-TEX ON THE BASIS PROPOSED WOULD BE IMPROPER AND AWARDS ON AN INDIVIDUAL ITEM BASIS WERE SUBSEQUENTLY MADE.

B-144322, JAN. 4, 1961

TO THE REX-TEX EQUIPMENT CORPORATION:

WE REFER AGAIN TO YOUR LETTER OF OCTOBER 26, 1960, WITH ENCLOSURES, PROTESTING AGAINST THE REJECTION OF YOUR BID, SUBMITTED IN RESPONSE TO SALES INVITATION NO. B-1-61-63066, ISSUED BY THE CONSOLIDATED SURPLUS SALES OFFICE AT NEWPORT, RHODE ISLAND, ON SEPTEMBER 26, 1960, FOR THE SALE OF VARIOUS SURPLUS VEHICLES AND OTHER EQUIPMENT.

IN ADDITION TO OTHER ITEMS NOT HERE IN QUESTION, YOU BID INDIVIDUAL AMOUNTS ON ITEMS 73 THROUGH 114. INCLUDED IN YOUR BID WAS THE FOLLOWING STATEMENT:

"AT THE GOV-T'S OPTION IF AWARDED ITEMS 73 TO 114 INCLUSIVE WE OFFER $83,006.00"

IT SHOULD BE NOTED THAT ON AN INDIVIDUAL BASIS YOU BID $1,501 FOR EACH ITEM IN QUESTION EXCEPT ONE. YOUR INCLUSIVE OFFER, HOWEVER, AVERAGES IN EXCESS OF $1,975 PER UNIT. SHORTLY BEFORE BID OPENING ON OCTOBER 18, 1960, ITEMS 105 THROUGH 108 WERE WITHDRAWN FROM THE SALE DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE SURPLUS SALES OFFICE. THE TIMING WAS SUCH THAT IT WAS IMPOSSIBLE FOR THE OFFICE TO GIVE THE BIDDERS WRITTEN ADVANCE NOTICE OF THE WITHDRAWAL. INSTEAD, AN ANNOUNCEMENT WAS MADE ORALLY JUST PRIOR TO BID OPENING.

IT IS REPORTED THAT AFTER, BUT ON THE DAY OF, BID OPENING MR. GOLDBERG OF YOUR FIRM ADVISED THE CONTRACTING OFFICER THAT HE HAD NOT BEEN PRESENT WHEN THE WITHDRAWAL OF THE FOUR ITEMS WAS ANNOUNCED, BUT THAT HE WOULD ACCEPT THE REMAINING ITEMS UNDER THE INCLUSIVE BID AT A PRORATED PRICE. IT APPEARS FURTHER THAT, SINCE SUCH PRICE WOULD RESULT IN A GREATER RETURN TO THE GOVERNMENT THAN WOULD AWARD ON AN INDIVIDUAL ITEM BASIS, THE CONTRACTING OFFICER CONSIDERED MAKING AWARD TO REX-TEX AND, APPARENTLY, GAVE MR. GOLDBERG SOME ORAL INDICATION OF THAT INTENT. AFTER CONSULTATION WITH HIGHER HEADQUARTERS, HOWEVER, IT WAS DETERMINED THAT AWARD TO REX-TEX ON THE BASIS PROPOSED WOULD BE IMPROPER AND AWARDS ON AN INDIVIDUAL ITEM BASIS WERE SUBSEQUENTLY MADE.

YOU CONTEND THAT IT WOULD HAVE BEEN TO THE GOVERNMENT'S ADVANTAGE TO MAKE AWARD ON THE PRORATED BASIS TO YOU, BOTH IN TERMS OF THE RETURN REALIZED AND THE CONVENIENCE IN DEALING WITH A SINGLE CONTRACTOR. YOU FURTHER INDICATE THAT YOU DO NOT REGARD YOUR INCLUSIVE OFFER AS AN "ALL OR NONE" BID. FINALLY, YOU ASSERT THAT YOU ARE ENTITLED TO THE AWARD BECAUSE THE ITEMS WERE WITHDRAWN SOLELY FOR THE CONVENIENCE OF THE GOVERNMENT, AND THE GENERAL SALES TERMS AND CONDITIONS PROVIDE AT PAGE 6 THAT IF NO UNIT PRICE IS SHOWN THE GOVERNMENT MAY ASCERTAIN THAT PRICE BY DIVIDING THE QUANTITY OFFERED BY THE TOTAL PRICE SUBMITTED.

THE INVITATION CONTEMPLATED AWARD OR AWARDS AFTER ADVERTISING TO THOSE RESPONSIBLE BIDDERS OFFERING THE HIGHEST PRICE FOR THE ITEMS IN QUESTION. DISPOSAL BY THAT MODE, WITH CERTAIN EXCEPTIONS NOT HERE RELEVANT, IS REQUIRED BY SECTION 203 (E) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 AS AMENDED, 40 U.S.C. 484. UNDER FORMALLY ADVERTISED SALES, AS WELL AS PROCUREMENTS, THE BID CONSTITUTES AN OFFER WHICH, UPON PROPER ACCEPTANCE, RIPENS INTO A CONTRACT. IT IS FUNDAMENTAL THAT AN ACCEPTANCE TO BE VALID MUST CONFORM IN EVERY MATERIAL RESPECT TO THE TERMS OF THE OFFER, OTHERWISE IT AMOUNTS ONLY TO A COUNTEROFFER. YOUR INCLUSIVE OFFER, REASONABLY INTERPRETED, COULD UPON ACCEPTANCE RESULT IN A BINDING CONTRACT ONLY IFALL OF THE ITEMS 73 THROUGH 114 WERE INCLUDED. IN OTHER WORDS, UNDER THE BASIC RULE OF LAW REFERRED TO ABOVE, THE SALES OFFICE COULD REQUIRE YOU TO PERFORM IN ACCORDANCE WITH YOUR INCLUSIVE OFFER ONLY IF ALL OF THE ITEMS COVERED WITHIN THAT OFFER WERE AWARDED TO YOU. SINCE THE WITHDRAWAL OF THE FOUR UNITS MADE SUCH AN AWARD MANIFESTLY IMPOSSIBLE, AN AWARD OF THE REMAINING ITEMS WITHIN THE INCLUSIVE BID WOULD AMOUNT ONLY TO A COUNTEROFFER WHICH YOU COULD ELECT AT YOUR OPTION TO ACCEPT OR DECLINE. SUCH AN OPTION, HOWEVER, IS ENTIRELY INCONSISTENT WITH COMPETITIVE REQUIREMENTS AND CANNOT BE PERMITTED IF THE INTEGRITY OF THE SYSTEM IS TO BE MAINTAINED. ACCEPTANCE OF YOUR VERBAL OFFER WOULD BE EQUALLY IMPROPER, SINCE THAT WAS IN FACT A NEW BID MADE AFTER THE ANNOUNCED TIME FOR BIDDING HAD EXPIRED.

IN ACCORDANCE WITH THE FOREGOING, ANY AWARD TO YOU ON THE BASIS YOU URGE WOULD BE INVALID AND IN CONTRAVENTION OF THE STATUTORY PROVISION REQUIRING THE EMPLOYMENT OF COMPETITIVE BID PROCEDURES.

SO FAR AS CONCERNS YOUR ARGUMENT THAT THE PROVISION ON PAGE 6, CITED ABOVE, PROVIDES FOR THE TYPE OF AWARD YOU URGE, IT SHOULD BE NOTED THAT THE STATEMENT REGARDING THE ASCERTAINMENT OF AN INDIVIDUAL PRICE BY DIVIDING THE QUANTITY BY THE TOTAL PRICE BID APPLIES ONLY TO UNITS WITHIN AN ITEM AND NOT TO A COMBINATION OF ITEMS. NOTE IN THIS REGARD THAT THE SPECIAL NOTICE TO BIDDERS, BEGINNING ON PAGE 5, CLEARLY DISTINGUISHES BETWEEN UNITS AND ITEMS, PARTICULARLY IN THE THIRD PARAGRAPH, AND THAT THE BID SCHEDULE ITSELF USES THE TERM "ITEM" TO DESIGNATE EACH SEPARATE OFFERING AND THE TERM "UNIT" TO DESIGNATE MEASURABLE ENTITIES WITHIN EACH SUCH OFFERING.