B-146207, JUN. 30, 1961

B-146207: Jun 30, 1961

Additional Materials:

Contact:

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

 

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

BUREAU OF RECLAMATION: WE HAVE YOUR LETTER DATED JUNE 21. THE BIDS WERE OPENED AT THE DENVER FEDERAL CENTER AT 2 P.M. THE FACTS WHICH HAVE PROMPTED YOU TO REQUEST A DECISION ARE REPORTED BY YOU AS FOLLOWS: "THE INVITATION PROVIDED FOR BIDS ON ONE OR MORE OF SEVEN SCHEDULES. 446 WAS QUOTED BY GENERAL ELECTRIC SUPPLY CO. THE ENGINEER'S ESTIMATE WAS $356. ITS BASIC BID WAS SUBMITTED ON STANDARD FORM 33 (OCTOBER 1957 EDITION) WHICH PROVIDES THAT TELEGRAPHIC BIDS WILL NOT BE CONSIDERED UNLESS AUTHORIZED BY THE INVITATION. IT HAS BEEN DETERMINED ADMINISTRATIVELY THAT THE FAILURE OF THIS LETTER QUOTATION TO ARRIVE PRIOR TO THE BID OPENING WAS DUE SOLELY TO A DELAY IN THE MAILS. "IT IS NOTED FURTHER THAT.

B-146207, JUN. 30, 1961

TO ASSISTANT COMMISSIONER AND CHIEF ENGINEER, BUREAU OF RECLAMATION:

WE HAVE YOUR LETTER DATED JUNE 21, 1961 (YOUR REFERENCE D-150), WHICH REQUESTS A DECISION WITH REGARD TO BIDS RECEIVED IN RESPONSE TO THE BUREAU OF RECLAMATION'S ADVERTISED INVITATION NO. DS-5592, INCLUDING ITS TWO SUPPLEMENTAL NOTICES DATED MAY 15 AND MAY 25, 1961, FOR CONDUCTOR, INSULATORS AND MISCELLANEOUS HARDWARE FOR GLEN CANYON SHIPROCK 230- KILOVOLT TRANSMISSION LINE, TRANSMISSION DIVISION, ARIZONA-NEW MEXICO, COLORADO RIVER STORAGE PROJECT. THE BIDS WERE OPENED AT THE DENVER FEDERAL CENTER AT 2 P.M. MST ON JUNE 6, 1961.

THE FACTS WHICH HAVE PROMPTED YOU TO REQUEST A DECISION ARE REPORTED BY YOU AS FOLLOWS:

"THE INVITATION PROVIDED FOR BIDS ON ONE OR MORE OF SEVEN SCHEDULES. NINE OF THE BIDS RECEIVED QUOTED PRICES ON THE HERE CONCERNED SCHEDULE NO. 1 WHICH REQUIRED THE FURNISHING OF 746,000 LINEAR FEET OF 1,272,000- CIRCULAR MIL ALUMINUM CONDUCTOR, STEEL REINFORCED (ACSR). THE QUOTED PRICES FOR THAT EQUIPMENT RANGE FROM A LOW OF $334,208, THE AMOUNT QUOTED BY MAY DWELL AND HARTZELL, INC. OF SAN FRANCISCO, CALIFORNIA, TO A HIGH OF $374,587.49. THE SECOND LOW BID OF $336,446 WAS QUOTED BY GENERAL ELECTRIC SUPPLY CO., A DIVISION OF GENERAL ELECTRIC COMPANY OF DENVER, COLORADO. THE ENGINEER'S ESTIMATE WAS $356,600.

"THE BASIC BID OF MAY DWELL AND HARTZELL, INC., DATED JUNE 2, 1961, STATED "NO BID" ON SCHEDULE NO. 1 OF THE INVITATION. ON JUNE 6, 1961 AT 8:48 A.M., PRIOR TO THE TIME OF THE BID OPENING, THIS BIDDER SUBMITTED A TELEGRAPHIC BID FOR SCHEDULE NO. 1. ITS BASIC BID WAS SUBMITTED ON STANDARD FORM 33 (OCTOBER 1957 EDITION) WHICH PROVIDES THAT TELEGRAPHIC BIDS WILL NOT BE CONSIDERED UNLESS AUTHORIZED BY THE INVITATION. THE INVITATION DID NOT AUTHORIZE THE MAKING OF TELEGRAPHIC BIDS.

"ON JUNE 7, 1961, THE BUREAU OF RECLAMATION RECEIVED AN AIRMAILED ENVELOPE POSTMARKED AT SAN FRANCISCO ON JUNE 5, 1961 AT SAN FRANCISCO ON JUNE 5, 1961 AT 7 P.M. ENCLOSING A LETTER QUOTATION BY MAY DWELL AND HARTZELL, INC. CONFIRMING ITS TELEGRAPHIC BID OF JUNE 5, 1961. IT HAS BEEN DETERMINED ADMINISTRATIVELY THAT THE FAILURE OF THIS LETTER QUOTATION TO ARRIVE PRIOR TO THE BID OPENING WAS DUE SOLELY TO A DELAY IN THE MAILS.

"THE LETTER QUOTATION CONTAINS PRINTED PROVISIONS ON THE FACE THEREOF OVER THE SIGNATURE OF THE BIDDER WHICH CONFLICT WITH THE TERMS OF THE INVITATION RELATING TO FACTORS SUCH AS DELAY IN DELIVERY, CHANGES IN PRICE, ACCEPTANCE BY THE BIDDER, AND THE LIABILITY FOR SALES, REVENUE, EXCISE, OR OTHER TAX. IT ALSO REFERS TO THE REVERSE SIDE THEREOF FOR STANDARD CONDITIONS APPLYING TO ALL TRANSACTIONS AND THESE STANDARD CONDITIONS ALSO CONFLICT WITH THE TERMS OF THE INVITATION WITH RESPECT TO FACTORS SUCH AS ACCEPTANCE BY THE BIDDER, DATE OF SHIPMENT, LIABILITY FOR DELAYS IN SHIPMENT, AND EXPRESS OR IMPLIED WARRANTY AS TO THE PRODUCTS FURNISHED.

"IT IS NOTED FURTHER THAT, ALTHOUGH THE LETTER QUOTATION INCREASED THE AMOUNT OF THE BASIC BID, IT WAS NOT ACCOMPANIED BY ANY SECURITY IN ADDITION TO THAT SECURING THE BASIC BID, WHICH SECURITY WAS A SURETY COMPANY BOND IN THE PENAL SUM OF "TWENTY PERCENT (20 PERCENT) OF AMOUNT OF BID.'

"AS CONTRACTING OFFICER, I REQUEST YOUR DECISION AS TO WHETHER (1) THE ABOVE MENTIONED PRINTED PROVISIONS AND CONDITIONS ON MAY DWELL AND HARTZELL'S QUOTATION FOR SCHEDULE NO. 1, DATED JUNE 5, 1961, PRECLUDES IT FROM CONSIDERATION FOR AWARD, (2) THE MANNER IN WHICH THE BID FOR SCHEDULE NO. 1 WAS PRESENTED IS SUFFICIENT TO PERMIT CONSIDERATION FOR AWARD, AND (3) THE BID BOND IN THE AMOUNT OF 20 PERCENT OF THE BID SUBMITTED WITH THE BASIC BID IS SUFFICIENT.'

THE BID OF MAY DWELL AND HARTZELL WAS SUBMITTED ON THE BIDDER'S STANDARD BID FORM AND CONTAINED THE FOLLOWING PRINTED PROVISION ON THE FACT THEREOF:

"ALL AGREEMENTS ARE MADE CONTINGENT UPON DELAYS BEYOND OUR CONTROL: QUOTATION IS SUBJECT TO CHANGE WITHOUT NOTICE UNLESS OTHERWISE STATED, AND ALL ORDERS ARE SUBJECT TO ACCEPTANCE. THE AMOUNT OF ANY PRESENT OR FUTURE SALES, REVENUE, EXCISE OR OTHER TAX APPLICABLE TO THE MERCHANDISE COVERED BY THIS QUOTATION, OR TO THE SALE OR USE THEREOF, SHALL BE ADDED TO THE PURCHASE PRICE AND SHALL BE PAID BY THE PURCHASER.'

ON THE REVERSE SIDE OF THE BID FORM APPEARS THE STATEMENT THAT: "THIS QUOTATION SUPERSEDES ALL PREVIOUS QUOTATIONS, AND IT IS SUBJECT TO CHANGE WITHOUT NOTICE, UNLESS OTHERWISE STATED.' ALSO APPEARING ON THE REVERSE SIDE OF THE BID FORM ARE THE FOLLOWING "STANDARD CONDITIONS" WHICH ARE MADE APPLICABLE TO ALL TRANSACTIONS:

"ALL ORDERS ARE SUBJECT TO THE ACCEPTANCE OF OUR DISTRICT SERVING THE PURCHASER; AND, UNLESS OTHERWISE STATED, ALL SALES ARE MADE F.O.B. POINT OF SHIPMENT, AND EACH SHIPMENT OR DELIVERY SHALL BE CONSIDERED A SEPARATE AND INDEPENDENT TRANSACTION.

"SHIPPING DATES GIVEN IN ADVANCE OF ACTUAL SHIPMENT ARE ESTIMATED, AND DELIVERIES WILL BE MADE SUBJECT TO PRIOR ORDERS ON FILE WITH US; WE SHALL NOT BE LIABLE FOR DELAYS RESULTING FROM CAUSES BEYOND OUR REASONABLE CONTROL OR CAUSED BY FIRE, LABOR DIFFICULTIES, DELAYS IN OUR USUAL SOURCES OF SUPPLY.

"WE SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE FOR SPECIAL OR CONSEQUENTIAL DAMAGES ON ACCOUNT OF DELAY IN FURNISHING MERCHANDISE CONTRACTED FOR OR ON ACCOUNT OF THE USE OR RESALE OF SUCH MERCHANDISE.

"THE GOODS SOLD BY US ARE THE PRODUCTS OF REPUTABLE MANUFACTURERS, SOLD UNDER THEIR RESPECTIVE BRANDS OR TRADE NAMES. WE, THEREFORE, MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO SUCH PRODUCTS. WE SHALL USE OUR BEST EFFORTS TO OBTAIN FROM THE MANUFACTURER, IN ACCORDANCE WITH ITS CUSTOMARY PRACTICE, THE REPAIR OR REPLACEMENT OF SUCH OF ITS PRODUCTS AS MAY PROVE DEFECTIVE IN WORKMANSHIP OR MATERIAL. THE FOREGOING STATES OUR ENTIRE LIABILITY IN RESPECT TO SUCH PRODUCTS, EXCEPT AS AN AUTHORIZED EXECUTIVE OF THE COMPANY MAY OTHERWISE AGREE IN WRITING.

"IF, IN OUR JUDGMENT, THE FINANCIAL CONDITION OF THE PURCHASER AT THE TIME MERCHANDISE IS READY FOR SHIPMENT DOES NOT JUSTIFY THE TERMS OF PAYMENT SPECIFIED, WE RESERVE THE RIGHT TO REQUIRE PAYMENT IN CASH BEFORE SHIPMENT OR DELIVERY.

"NO SALES REPRESENTATIVE OF THE COMPANY HAS AUTHORITY TO ALTER, VARY, OR WAIVE ANY OF THE FOREGOING STANDARD CONDITIONS.'

PARAGRAPH 2 (A) OF THE INVITATION FOR BIDS (STANDARD FORM 33, OCTOBER 1957 EDITION) PROVIDES, IN PART, THAT TELEGRAPHIC BIDS WILL NOT BE CONSIDERED UNLESS AUTHORIZED BY THE INVITATION. SINCE THE INVITATION DID NOT AUTHORIZE THE SUBMISSION OF TELEGRAPHIC BIDS, THE TELEGRAPHIC BID SUBMITTED BY MAY DWELL AND HARTZELL ON JUNE 6, 1961, IS CLEARLY NOT FOR CONSIDERATION AND NEED NOT BE FURTHER DISCUSSED. THE PRINCIPAL QUESTION REMAINING IN THE CASE, THEREFORE, IS WHETHER THE ABOVE-QUOTED PRINTED PROVISIONS AND CONDITIONS APPEARING ON THE LETTER BID QUALIFIED THE BID AND RENDERED IT NONRESPONSIVE AND, FURTHER, WHETHER THOSE PROVISIONS AND CONDITIONS MAY PROPERLY BE WAIVED AS MINOR INFORMALITIES OR IRREGULARITIES.

THE PRINTED PROVISIONS AND CONDITIONS OF THE LETTER BID SUBMITTED BY MAY DWELL AND HARTZELL WERE AN INTEGRAL PART OF THE BID AND, IF THE BID WERE ACCEPTED, WOULD TAKE PRECEDENCE OVER THE PROVISIONS PRINTED IN THE FORMAL GOVERNMENT CONTRACT. UNDER WELL-ESTABLISHED PRINCIPLES OF LAW SUCH PROVISIONS WOULD CONTROL THE GOVERNMENT'S RIGHTS IN THE MATTER. 36 COMP. GEN. 535.

BIDDERS WERE ADVISED IN PARAGRAPH 8 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS THAT THE CONTRACT WOULD BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THEY WERE ALSO ADVISED THAT THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY OR ALL BIDS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED. THE INFORMALITIES IN A BID WHICH A CONTRACTING OFFICER PROPERLY MAY WAIVE, HOWEVER, ARE THOSE OF FORMAND NOT OF SUBSTANCE, OR SOME IMMATERIAL OR INCONSEQUENTIAL DEFECT IN OR VARIATION OF A BID FROM THE EXACT REQUIREMENTS OF THE ADVERTISED INVITATION AND SPECIFICATIONS SUCH AS WOULD NOT AFFECT EITHER THE SUFFICIENCY OF THE ARTICLE BEING PROCURED OR THE ACCOUNTABILITY OR LIABILITY OF A CONTRACTOR TO THE GOVERNMENT IN THE EVENT OF DELAYS OR FAILURE TO PERFORM. 20 COMP. GEN. 4; 37 ID. 110.

THE SUBJECT INVITATION FOR BIDS CONTAINS THE FOLLOWING PERTINENT PROVISIONS:

1. A CLAUSE REQUIRING COMPLETE SHIPMENT FROM A UNITED STATES SHIPPING POINT OR POINTS WITHIN 150 CALENDAR DAYS AFTER DATE OF RECEIPT OF NOTICE OF AWARD OF CONTRACT (SCHEDULE NO. 1), AND A CLAUSE TO THE EFFECT THAT TIME OF DELIVERY IS IMPORTANT AND THAT BIDS SPECIFYING A LONGER SHIPPING TIME THAN THAT STATED IN THE SCHEDULE WOULD NOT BE CONSIDERED (PARAGRAPH B -7 OF THE SPECIAL REQUIREMENTS);

2. THE STANDARD FORM 32 DEFAULT CLAUSE (CLAUSE 11 OF THE GENERAL PROVISIONS);

3. A PROVISION IMPOSING LIABILITY ON THE CONTRACTOR FOR EXCESS COSTS IN THE EVENT THE CONTRACT IS TERMINATED UNDER THE DEFAULT CLAUSE AND A LIQUIDATED DAMAGES PROVISION, ASSESSING LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY IF THE CONTRACTOR REFUSES OR FAILS TO PERFORM OR MAKE SHIPMENT OF THE MATERIAL OR SUPPLIES WITHIN THE REQUIRED TIME SPECIFIED IN THE SCHEDULE (PARAGRAPH B-8 OF THE SPECIAL REQUIREMENTS);

4. CLAUSES DEALING WITH THE RESPONSIBILITY OF THE CONTRACTOR IN THE EVENT OF DEFECTIVE MATERIAL OR WORKMANSHIP (CLAUSE 5 OF THE GENERAL PROVISIONS, PARAGRAPH A-6 OF THE SPECIAL CONDITIONS AND PARAGRAPH B-10 OF THE SPECIAL REQUIREMENTS); AND

5. A PROVISION STATING THAT THE CONTRACT PRICE INCLUDES ALL FEDERAL, STATE, AND LOCAL TAXES AND DUTIES IN EFFECT APPLICABLE TO THE CONTRACT ON THE TAX INCLUSIVE DATE, EXCEPT TAXES FROM WHICH THE GOVERNMENT, THE CONTRACTOR, OR THE TRANSACTIONS OR PROPERTY COVERED BY THE CONTRACT ARE THEN EXEMPT (PARAGRAPH A-10 (B) OF THE SPECIAL CONDITIONS).

ONLY A CURSORY COMPARISON OF THE PRINTED PROVISIONS AND CONDITIONS CONTAINED IN THE LATTER BID WITH THOSE CITED ABOVE FOUND IN THE INVITATION FOR BIDS IS NEEDED TO SHOW THAT THE BID CONDITIONS CONFLICT DIRECTLY WITH THE PROVISIONS IN THE INVITATION. THE PRINTED BID PROVISIONS ATTEMPT TO LESSEN THE RESPONSIBILITY OF THE CONTRACTOR FOR DELAYS IN DELIVERY AND FOR DEFICIENCIES IN THE MATERIAL OR WORKMANSHIP OF THE ARTICLE BEING PROCURED. THE PRINTED BID PROVISIONS ALSO ATTEMPT TO LIMIT ABSOLUTELY THE CONTRACTOR'S LIABILITY FOR SPECIAL OR CONSEQUENTIAL DAMAGES ON ACCOUNT OF DELAY IN FURNISHING MERCHANDISE AND DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, ON THE MERCHANDISE FURNISHED. AND, FINALLY, THE PRINTED BID PROVISIONS ATTEMPT TO MAKE THE PURCHASER, IN THIS CASE THE GOVERNMENT, LIABLE FOR ANY PRESENT OR FUTURE TAXES ON THE MERCHANDISE RATHER THAN INCLUDING SUCH TAXES AS A PART OF THE BID AS DIRECTED BY THE INVITATION.

IN 36 COMP. GEN. 535, CONSIDERATION WAS GIVEN TO THE EFFECT CERTAIN TYPEWRITTEN PROVISIONS AND PRINTED CONDITIONS IMPOSED BY A BIDDER, SIMILAR IN LEGAL EFFECT TO THOSE INCORPORATED IN THE MAY DWELL AND HARTZELL BID, WOULD HAVE ON THE GOVERNMENT'S RIGHTS IN THE MATTER, IF THE BID WERE ACCEPTED. IT WAS HELD THAT UNDER APPLICABLE PRINCIPLES OF LAW IN SUCH CASES, THE BIDDER'S TYPEWRITTEN PROVISIONS AND PRINTED CONDITIONS WOULD CONTROL THE GOVERNMENT'S RIGHTS IN THE MATTER AND THE BID, CONDITIONED AS IT WAS, MUST BE REJECTED AS NOT BEING RESPONSIVE TO THE INVITATION FOR BIDS. INCIDENTALLY, THAT RESULT WAS REACHED EVEN THOUGH THE BIDDER REQUESTED THAT ALL PRINTED MATTER INCLUDED IN HIS QUOTATION BE CONSIDERED AS NOTHING MORE THAN AN INFORMALITY IN BIDDING WHICH SHOULD BE WAIVED ON THE GROUND HE HAD INTENDED THAT HIS BID WOULD COMPLY STRICTLY WITH THE ADVERTISED SPECIFICATIONS AND CONDITIONS. IN ACCORD WITH THE DECISION IN 36 COMP. GEN. 535; SEE 37 COMP. GEN. 110, 112, WHERE THE FOLLOWING STATEMENTS WERE MADE:

"AS SET OUT IN THE DECISION, 36 COMP. GEN. 535 * * * IT IS A CARDINAL RULE THAT A CONTRACT AWARDED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. WHERE ONE BIDDER RESERVES RIGHTS AND IMMUNITIES FROM RESPONSIBILITY NOT EXTENDED TO ALL BIDDERS BY THE ADVERTISED CONDITIONS AND SPECIFICATIONS, IT SEEMS MANIFEST THAT A CONTRACT AWARDED UPON THE BASIS OF THE CONDITIONAL BID WOULD NOT BE THE CONTRACT OFFERED TO ALL PROSPECTIVE BIDDERS. INFORMALITIES WHICH PROPERLY MAY BE WAIVED ARE THOSE THAT DO NOT GO TO THE SUBSTANCE OF THE BID SO AS TO BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS, BUT MATERIAL CONDITIONS IMPOSED BY A BIDDER MAY NOT BE WAIVED AS AN INFORMALITY OR MINOR IRREGULARITY. SEE 20 COMP. GEN. 4. TO PERMIT PUBLIC OFFICERS TO ACCEPT BIDS NOT COMPLYING IN SUBSTANCE WITH THE ADVERTISED SPECIFICATIONS, OR TO PERMIT BIDDERS TO VARY THEIR PROPOSALS AFTER THE BIDS ARE OPENED, WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS. THE STRICT MAINTENANCE OF SUCH PROCEDURE, REQUIRED BY LAW, IN INFINITELY MORE IN THE PUBLIC INTEREST THAN OBTAINING AN APPARENTLY PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY A VIOLATION OF THE RULES. CF. UNITED STATES V. BROOKRIDGE, 111 F.2D 461, 464, AND THE OPINION OF THE SUPREME COURT OF ILLINOIS IN CITY OF CHICAGO V. MOHR, 74 N.E. 1056.' THE PRINTED PROVISIONS AND CONDITIONS IN THE MAY DWELL AND HARTZELL BID WHICH QUALIFY THE BIDDER'S RESPONSIBILITY AND LIABILITY FOR DELAYS IN DELIVERY, DEFICIENCIES IN MATERIAL OR WORKMANSHIP, PRESENT AND FUTURE TAXES, AND FOR SPECIAL OR CONSEQUENTIAL DAMAGES, OBVIOUSLY CANNOT BE REGARDED AS MINOR TECHNICALITIES THAT MAY PROPERLY BE WAIVED. THESE CONDITIONS AFFECT THE SUBSTANCE OF THE BID AND IT MUST BE CONCLUDED THAT THE BID IS NOT RESPONSIVE TO THE INVITATION. ACCORDINGLY, IN ANSWER TO YOUR FIRST QUESTION, YOU ARE ADVISED THAT THE PRINTED PROVISIONS AND CONDITIONS ON MAY DWELL AND HARTZELL'S QUOTATION FOR SCHEDULE NO. 1, DATED JUNE 5, 1961, PRECLUDE IT FROM CONSIDERATION FOR AWARD AND SHOULD BE REJECTED AS NONRESPONSIVE. IN VIEW OF OUR ANSWER TO YOUR FIRST QUESTION, ANSWERS TO QUESTIONS (2) AND (3) ARE UNNECESSARY.