B-146343, NOV. 1, 1961

B-146343: Nov 1, 1961

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INC.: REFERENCE IS MADE TO LETTER DATED JUNE 23. A COPY OF WHICH WAS FORWARDED TO THIS OFFICE BY HONORABLE JOHN J. WE HAVE MADE A CAREFUL REVIEW OF THE RECORD FORWARDED BY THE DEPARTMENT OF THE AIR FORCE. IS ON THREE POINTS. (3) THE ALLEGATION THAT ONE OF THE TWO MEMBERS OF THE JOINT VENTURE WHICH SUBMITTED THE SUCCESSFUL BID (HOSSLER CONSTRUCTION COMPANY) IS NOT A LEGAL ENTITY. YOUR POINTS OF PROTEST WILL BE CONSIDERED IN REVERSE ORDER. THE ACCEPTED BID WAS SUBMITTED IN THE NAMES OF THE NORTHEAST CONSTRUCTION COMPANY. IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT THE JOINT VENTURE WAS A RESPONSIBLE BIDDER. WE HAVE NOT BEEN INFORMED OF ANY REASON TO QUESTION THAT DETERMINATION. FAIL TO SEE ANY BASIS UPON WHICH IT COULD BE CONTENDED THAT THESE INDIVIDUALS ARE NOT LEGALLY OBLIGATED UNDER THE CONTRACT.

B-146343, NOV. 1, 1961

TO ARIZONA CONTRACTORS, INC.:

REFERENCE IS MADE TO LETTER DATED JUNE 23, 1961, WRITTEN IN YOUR BEHALF BY YOUR ATTORNEY, TO THE DEPARTMENT OF THE AIR FORCE, BASE PROCUREMENT OFFICE, WILLIAMS AIR FORCE BASE, ARIZONA, A COPY OF WHICH WAS FORWARDED TO THIS OFFICE BY HONORABLE JOHN J. RHODES ON JULY 5, 1961, PROTESTING THE ACTION OF THE DEPARTMENT OF THE AIR FORCE INMAKING AN AWARD TO A JOINT VENTURE CONSISTING OF NORTHEAST CONSTRUCTION COMPANY AND HOSSLER CONSTRUCTION COMPANY, COVERING REHABILITATION AND IMPROVEMENTS TO A 500 UNIT WHERRY HOUSING PROJECT AT WILLIAMS AIR FORCE BASE, ARIZONA.

WE HAVE MADE A CAREFUL REVIEW OF THE RECORD FORWARDED BY THE DEPARTMENT OF THE AIR FORCE, ON THE BASIS OF WHICH THE PERTINENT FACTS APPEAR TO BE AS FOLLOWS:

YOUR PROTEST DATED JUNE 23, 1961, IS ON THREE POINTS, (1) THE METHOD OF SELECTION OF ADDITIVE ALTERNATES AND EVALUATION OF BIDS, (2) THE FACT THAT THE PERFORMANCE BOND SUBMITTED BY THE SUCCESSFUL BIDDER REFERRED TO THE CONTRACT NUMBER AS AF 12/600/-1459 RATHER THAN AF 02/600/-1459, AND (3) THE ALLEGATION THAT ONE OF THE TWO MEMBERS OF THE JOINT VENTURE WHICH SUBMITTED THE SUCCESSFUL BID (HOSSLER CONSTRUCTION COMPANY) IS NOT A LEGAL ENTITY.

YOUR POINTS OF PROTEST WILL BE CONSIDERED IN REVERSE ORDER. THE ACCEPTED BID WAS SUBMITTED IN THE NAMES OF THE NORTHEAST CONSTRUCTION COMPANY, A WEST VIRGINIA CORPORATION, AND THE HOSSLER CONSTRUCTION COMPANY, STATED TO BE A PARTNERSHIP OF HAROLD K. HOSSLER, ARTHUR L. HOSSLER, JR., AND MARION J. HOSSLER, AS A JOINT VENTURE. IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT THE JOINT VENTURE WAS A RESPONSIBLE BIDDER, AND WE HAVE NOT BEEN INFORMED OF ANY REASON TO QUESTION THAT DETERMINATION. WHETHER THE HOSSLER CONSTRUCTION COMPANY HAS OR HAS NOT RECORDED ITSELF AS A PARTNERSHIP IN THE STATE OF OHIO HAS NO EFFECT UPON ITS RIGHT TO ACT AS A MEMBER OF A JOINT VENTURE IN THE PERFORMANCE OF A FEDERAL CONTRACT IN THE STATE OF ARIZONA. THE PERFORMANCE BOND FURNISHED BY THE SUCCESSFUL BIDDER SPECIFICALLY IDENTIFIES THE HOSSLER CONSTRUCTION COMPANY AS HAROLD K., ARTHUR L., JR., AND MARION J. HOSSLER, ALL OF WHOM SIGNED THE BOND. FAIL TO SEE ANY BASIS UPON WHICH IT COULD BE CONTENDED THAT THESE INDIVIDUALS ARE NOT LEGALLY OBLIGATED UNDER THE CONTRACT.

SO FAR AS CONCERNS THE TYPOGRAPHICAL ERROR IN THE PERFORMANCE BOND AS TO THE NUMBER OF THE CONTRACT AWARDED, IT IS OUR OPINION THAT THIS FACT WOULD NOT AFFECT THE VALIDITY OF THE BOND OR THE LIABILITY OF THE PRINCIPALS AND SURETY THEREUNDER. YOU CONTEND THAT A FAILURE TO FURNISH A SATISFACTORY AND DULY EXECUTED PERFORMANCE BOND PRIOR TO AWARD IS SUFFICIENT TO DISQUALIFY AN AWARD MADE ON THE BASIS OF A DEFICIENT BOND. WE CANNOT AGREE WITH THIS CONTENTION. WHILE IT MAY BE THAT SUCH AN AWARD MIGHT BE DISAVOWED BY THE GOVERNMENT IN THE EVENT OF THE AWARDEE'S REFUSAL OR INABILITY TO FURNISH A SATISFACTORY PERFORMANCE BOND, WE KNOW OF NO REASON WHY THE GOVERNMENT MIGHT NOT PERMIT A DEFICIENCY IN SUCH A BOND TO BE REMEDIED AFTER AWARD. IN THE PRESENT CASE THE SURETY, BY LETTER OF JUNE 30, 1961, HAS CORRECTED THE ERRONEOUS CONTRACT NUMBER ON THE BOND.

YOUR REMAINING POINT RELATES TO THE FOLLOWING PROVISIONS OF THE INVITATION FOR BIDS:

"AWARD OF CONTRACT * * *

AWARD WILL BE MADE TO THE RESPONSIBLE BIDDER WHOSE AGGREGATE BID ON THE BASIC ITEMS, PLUS ANY SELECTED COMBINATION OF ADDITIVE ITEMS, IS LOW.

"11. AWARD OF CONTRACT.

"/C) THE GOVERNMENT FURTHER RESERVES THE RIGHT TO ACCEPT OR REJECT ANY OR ALL ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES SUCH BID BY SPECIFIC LIMITATIONS; ALSO TO MAKE AN AWARD TO THE BIDDER WHOSE AGGREGATE BID ON ANY COMBINATION OF BID ITEMS IS LOW.'

THE INVITATION CALLED FOR BIDS ON CERTAIN ITEMS NUMBERED 1 THROUGH 28, DESIGNATED AS BASIC ITEMS, PLUS ADDITIVE ALTERNATE ITEMS NUMBERED 29 THROUGH 49. AFTER BIDS WERE OPENED ON JUNE 13, 1961, IT WAS DETERMINED TO MAKE AWARD ON THE 28 BASIC ITEMS, PLUS ADDITIVE ALTERNATES NUMBERED 29 THROUGH 36. ON THE BASIS OF THIS DETERMINATION, THE TWO LOWEST BIDS WERE AS FOLLOWS:

NORTHEAST

AND HOSSLER ARIZONA

-------------- ----------- ITEMS 1 THROUGH 28

$788,691.14 $796,758.88 ITEMS 29 THROUGH 36 179,960.00 196,292.00

$968,651.14 $993,050.88

YOUR BID ON ITEMS 1 THROUGH 36 WAS $24,399.74 HIGHER, ALTHOUGH IT WAS $27,148.26 LOWER ON ITEMS 1 THROUGH 49. SINCE IT HAD BEEN DETERMINED TO AWARD ONLY ITEMS 1 THROUGH 36, AWARD WAS MADE FOR THOSE ITEMS ON JUNE 21, 1961, TO NORTHEAST AND HOSSLER.

YOUR ATTORNEY CONTENDS THAT IT IS IMPROPER FOR THE GOVERNMENT TO RESERVE UNTIL AFTER BID OPENING THE RIGHT TO CHOOSE THE PARTICULAR COMBINATION OF ITEMS ON WHICH BIDS WILL BE EVALUATED, CLAIMING THAT THE CONTRACTING OFFICER MIGHT THEREBY, THROUGH A CAREFUL SELECTION OF ITEMS, CHOOSE ANY CONTRACTOR OTHER THAN THE ONE WHO HAD SUBMITTED THE LOWEST AGGREGATE BID FOR ALL ITEMS. YOU ARE UNDOUBTEDLY AWARE THAT IT IS NOT AT ALL UNUSUAL TO SOLICIT BIDS FOR CERTAIN MINIMUM WORK, PLUS OPTIONAL ADDITIONAL WORK. THE PURPOSE OF ADVERTISING ON THIS BASIS ORDINARILY IS TO ENABLE AWARD TO BE MADE IN ACCORDANCE WITH THE FUNDS AVAILABLE AND THE BEST BARGAIN OFFERED BY BIDDERS. THE NET RESULT THEREOF IS TO REQUIRE BIDDERS TO QUOTE PRICES ON VARIOUS COMBINATIONS OF ITEMS, SUBJECT TO THE GOVERNMENT'S RIGHT TO CHOOSE ANY PARTICULAR COMBINATION IT WISHES AS THE BASIS OF AWARD.

WHILE IT MAY BE, AS IN THIS CASE, THAT DIFFERENT COMBINATIONS OF ITEMS WILL RESULT IN DIFFERENT LOW BIDDERS, WE CAN SEE NO BASIS FOR CLAIMING THAT THIS IS DISCRIMINATORY AS BETWEEN BIDDERS. EACH BIDDER IS COMPETING AGAINST EACH OTHER BIDDER ON EACH POSSIBLE COMBINATION OF ITEMS, AND THE COMPARATIVE DESIRABILITY OF DIFFERENT ITEMS MAY WELL DEPEND ON THE PRICES QUOTED THEREFOR. IT IS OBVIOUS THAT AWARD COULD NOT BE MADE ON ANY COMBINATION OF ITEMS TO A BIDDER WHOSE AGGREGATE PRICE FOR THOSE ITEMS WAS NOT LOW, MERELY BECAUSE HE HAPPENED TO HAVE OFFERED AN OFFSETTING LOWER PRICE FOR WORK WHICH IS NOT TO BE PERFORMED. WE BELIEVE ALSO THAT IT IS THE EXCEPTION RATHER THAN THE RULE WHEN DIFFERENT COMBINATIONS OF ITEMS WILL RESULT, AS HERE, IN DIFFERENT LOW BIDDERS. CERTAINLY IT IS NOT TRUE, AS SEEMS TO BE IMPLIED BY YOUR ATTORNEY, THAT ANY BIDDER OTHER THAN YOURSELF OR NORTHEAST AND HOSSLER COULD HAVE BEEN MADE THE LOW BIDDER BY A PARTICULAR COMBINATION OF ADDITIVE ITEMS.

THE RECORD BEFORE US CONTAINS NO INDICATION THAT THE ACTION TAKEN WAS INFLUENCED BY ANY CONSIDERATION OTHER THAN THE BEST JUDGMENT OF THE CONTRACTING OFFICIALS CONCERNED, AND WE FIND NO BASIS FOR QUESTIONING THE AWARD MADE.