B-147092, FEB 23, 1962

B-147092: Feb 23, 1962

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FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 8. THE THREE LOWEST BIDS RECEIVED WERE AS FOLLOWS: SCHEDULES "A" "B" UTAH CONSTRUCTION & MINING CO $1. 900 NO BID INVITATION ARTICLE 10 PROVIDES: "PERFORMANCE OF WORK: EACH BIDDER SHALL SUBMIT WITH HIS BIDS A STATEMENT OF THE WORK HE WILL PERFORM WITH HIS OWN ORGANIZATION (E.G. OTHERWISE THE BID WILL BE CONSIDERED NON- RESPONSIVE.". WRITTEN APPROVAL OF SUCH REDUCTION IS OBTAINED BY THE CONTRACTOR FROM THE CONTRACTING OFFICER.". YOU STATE THAT THIS FAILURE OF THE TWO LOW BIDDERS TO FURNISH WITH THEIR BIDS THE STATEMENTS OF THE AMOUNT OF WORK TO BE PERFORMED WITH THEIR OWN FORCES WAS A MATERIAL DEVIATION REQUIRING THE DISREGARD OF THOSE BIDS.

B-147092, FEB 23, 1962

PRECIS-UNAVAILABLE

RICHARD G. DANNER, ESQUIRE:

1029 VERMONT AVENUE, N.W.

WASHINGTON 5, D.C.

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 8, 1962, PROTESTING, ON BEHALF OF THE ALCAN PACIFIC CO., AGAINST THE AWARD OF A CONTRACT TO EITHER ACME CONSTRUCTION CO. OR UTAH CONSTRUCTION & MINING CO. IN THAT THEY FAILED TO FURNISH WITH THEIR BIDS PERFORMANCE INFORMATION REQUESTED IN ARTICLE 10 OF INVITATION ENG-04-167-62-14.

ON SCHEDULES "A" AND "B" OF THE INVITATION, THE THREE LOWEST BIDS RECEIVED WERE AS FOLLOWS:

SCHEDULES

"A" "B"

UTAH CONSTRUCTION & MINING CO $1,890,913 $1,846,913

ACME CONSTRUCTION CO. 1,849,000 1,853,500

ALCAN PACIFIC CO. 1,849,900 NO BID

INVITATION ARTICLE 10 PROVIDES:

"PERFORMANCE OF WORK: EACH BIDDER SHALL SUBMIT WITH HIS BIDS A STATEMENT OF THE WORK HE WILL PERFORM WITH HIS OWN ORGANIZATION (E.G., EARTHWORK, PAVING, BRICKWORK, OR ROOFING, ETC.), THE PERCENTAGE OF THE TOTAL WORK (INCLUDING ADDITIVE ITEMS) THIS REPRESENTS, AND THE ESTIMATE COST THEREOF. THAT PERCENTAGE SHALL BE EQUAL TO OR GREATER THAN THEN PERCENTAGE FIGURE ESTABLISHED IN SC-16, 'PERFORMANCE OF WORK CONTRACTOR' OF THE SPECIAL CONDITIONS; OTHERWISE THE BID WILL BE CONSIDERED NON- RESPONSIVE."

SPECIAL CONDITION SC-15, INADVERTENTLY REFERRED TO AS SC-16 IN ARTICLE 10 ABOVE, PROVIDES:

"PERFORMANCE OF WORK BY CONTRACTOR: THE CONTRACTOR SHALL PERFORM ON THE SITE, AND WITH HIS OWN ORGANIZATION, WORK EQUIVALENT TO AT LEAST TWENTY PERCENT (20%) OF THE TOTAL AMOUNT OF THE WORK TO BE PERFORMED UNDER THE CONTRACT. IF DURING THE PROGRESS OF THE WORK HEREUNDER, THE CONTRACTOR REQUESTS A REDUCTION IN SUCH PERCENTAGE, AND THE CONTRACTING OFFICER DETERMINES THAT IT WOULD BE TO THE GOVERNMENT'S ADVANTAGE, THE PERCENTAGE OF THE WORK REQUIRED TO BE PERFORMED BY THE CONTRACTOR MAY BE REDUCED; PROVIDED, WRITTEN APPROVAL OF SUCH REDUCTION IS OBTAINED BY THE CONTRACTOR FROM THE CONTRACTING OFFICER."

ALCAN FURNISHED WITH ITS BID THE STATEMENT REQUIRED IN INVITATION ARTICLE 10. HOWEVER, THE TWO LOW BIDDERS, AS WELL AS EIGHT OTHER, DID NOT FURNISH THE STATEMENT PRIOR TO THE OPENING OF BIDS. AFTER THE OPENING OF BIDS, THE TWO LOW BIDDERS DID FURNISH THE REQUIRED STATEMENTS. UTAH CONSTRUCTION & MINING CO, INDICATED IT DID NOT INTEND TO MEET THE REQUIREMENT THAT AT LEAST 20 PERCENT OF THE WORK BE PERFORMED WITH ITS OWN FORCES AN ACME CONSTRUCTION CO. INDICATED THAT IT WOULD MEET THE REQUIREMENT BY PERFORMING 25.35 PERCENT OF THE WORK WITH ITS OWN FORCES.

YOU POINT OUT THAT ASPR 2-301(A) PROVIDES THAT "TO BE CONSIDERED FOR AWARD, A BID MUST COMPLY IN ALL MATERIAL RESPECTS WITH THE INVITATION FOR BIDS DO THAT, BOTH AS TO THE METHOD AND TIMELINESS OF SUBMISSION AND AS TO THE SUBSTANCE OF ANY RESULTING CONTRACT, ALL BIDDERS MAY STAND ON AN EQUAL FOOTING AND THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM MAY BE MAINTAINED." IN VIEW OF THIS PROVISION AND INVITATION ARTICLE 10, WHICH YOU INTERPRET BY ITSELF AS REQUIRING THE BID TO BE CONSIDERED NONRESPONSIVE FOR FAILURE TO SUBMIT THE PERFORMANCE OF WORK STATEMENT, YOU STATE THAT THIS FAILURE OF THE TWO LOW BIDDERS TO FURNISH WITH THEIR BIDS THE STATEMENTS OF THE AMOUNT OF WORK TO BE PERFORMED WITH THEIR OWN FORCES WAS A MATERIAL DEVIATION REQUIRING THE DISREGARD OF THOSE BIDS. YOU STATE, FURTHER, THAT THE PRECISE QUESTION HAS NEVER BEEN CONSIDERED BY OUR OFFICE BEFORE, BUT THAT STATEMENTS IN DECISION B-146539, AUGUST 10, 1961, 41 COMP.GEN. 106, THAT FAILURE TO FURNISH INFORMATION WITH BIDS AS REQUESTED BY CONTRACTING AGENCIES, WILL RESULT IN REJECTION, AND THE SUGGESTION IN DECISION B-139923, SEPTEMBER 30, 1959, 39 COMP.GEN. 247, THAT THE SECRETARY OF THE ARMY CLARIFY AN INVITATION REQUIREMENT FOR SUBCONTRACTING DATA, LEND SUPPORT TO YOUR POSITION THAT THE LOW BIDS SHOULD BE DISREGARDED. IT IS SUGGESTED ALSO THAT THE DECISION IN B- 137319, FEBRUARY 5, 1959, 38 COMP.GEN. 532, HOLDING THAT NONCOMPLIANCE WITH A REQUIREMENT IN AN INVITATION THAT A BID BOND BE SUBMITTED WITH A BID REQUIRES REJECTION OF THE BID AS NONRESPONSIVE, SHOULD BE MADE APPLICABLE TO THE IMMEDIATE SITUATION. FINALLY, YOU SUGGEST THAT THE FAILURE TO STRICTLY ENFORCE THE REQUIREMENT INVOLVED WILL LEAVE THE WAY OPEN FOR BROKERS TO OBTAIN LUCRATIVE CONTRACTS AND THEREAFTER SUBCONTRACT ALL THE WORK TO OTHER COMPANIES.

IN OUR VIEW ASPR 2-301(A) IS NOT APPLICABLE TO THE IMMEDIATE CASE. THAT REGULATION IS LISTED UNDER THE HEADING "RESPONSIVENESS OF BIDS" AND WOULD THEREFORE BE FOR APPLICATION ONLY IN SITUATIONS WHERE THE INFORMATION IS TO BE USED TO DETERMINE THE RESPONSIVENESS OF BIDS. MOREOVER, IN 41 COMP.GEN.106, WE CONSIDERED THE REASON FOR THE PERFORMANCE OF WORK INFORMATION REQUIREMENT AND CONCLUDED THAT IT WAS FOR THE PURPOSE OF DETERMINING THE RESPONSIBILITY OF BIDDERS. WE DO NOT THINK THAT THE PURPOSE IN REQUIRING THE INFORMATION IS CHANGED EVEN IF THE ADDITIONAL LANGUAGE THAT NOW HAD BEEN ADDED TO THE CLAUSE CAN BE CONSIDERED AS MAKING THE SUBMISSION MANDATORY. THE RULE AS IT WAS EXPRESSED IN THE CITED DECISION IS THAT "WHERE THE INFORMATION IS INTENDED FOR USE IN DETERMINING THE BIDDER'S RESPONSIBILITY, IT MAY BE CHANGED OR PROVIDED SUBSEQUENT TO BID OPENING WITHOUT PREJUDICE TO CONSIDERATION OF THE BID EVEN WHERE THE INVITATION WARNS THAT FAILURE TO CONFORM MAY RESULT IN BID REJECTION. WHILE IT WAS STATED IN 41 COMP.GEN. 106 THAT THE FAILURE TO FURNISH CERTAIN INFORMATION WITH A BID WILL RESULT IN THE REJECTION OF THE BID, THAT RULE HAS BEEN APPLIED GENERALLY TO THE REQUIREMENTS IN INVITATIONS FOR DESCRIPTIVE LITERATURE AND SAMPLES NEEDED FOR THE EVALUATION OF BIDS, AND THE REQUIREMENT FOR INFORMATION, CONCERNING THE DEGREE TO WHICH THE BIDDER WILL PERFORM THE WORK HIMSELF, WAS DISTINGUISHED FROM THOSE REQUIREMENTS.

AS TO THE DECISION IN 39 COMP.GEN. 247, ALTHOUGH WE SUGGESTED IN THAT CASE THAT THE SECRETARY OF THE ARMY CLARIFY THE SITUATION IN CONNECTION WITH THE AMBIGUITY CREATED BY THE CLAUSES USED IN THAT PROCUREMENT, THE VIEW EXPRESSED BY OUR OFFICE IN THE DECISION WAS THAT SINCE THE LIST OF SUBCONTRACTORS THAT THE BIDDERS WERE TO FURNISH WITH THEIR BIDS WAS INFORMATION RELATED TO RESPONSIBILITY, IT COULD NOT BE CONSIDERED A MATERIAL PART OF THE BID, AND OUR SUGGESTION THAT INVITATION ADVISE BIDDERS OF THE NATURE OF INVITATION REQUIREMENTS AND THE EFFECT OF FAILURE TO COMPLY THEREWITH WAS INTENDED TO APPLY TO SITUATIONS WHERE THE REQUIREMENT IS AS TO A MATERIAL PART OF THE BID, FOR ANY ATTEMPT TO MAKE AN IMMATERIAL REQUIREMENT MANDATORY WOULD BE WITHOUT ANY FORCE OR EFFECT. 39 COMP.GEN. 655; ID. 881.

YOU INDICATED THAT YOU THINK THE BID BOND DECISION IN 38 COMP.GEN. 532 SHOULD BE MADE APPLICABLE TO THE INSTANT SITUATION, SINCE OTHERWISE BIDDERS ARE FREE TO GET BETTER PRICES FROM THEIR SUBCONTRACTORS AFTER THE BIDS ARE OPENED AND THEREBY BRING THEMSELVES WITHIN THE 20-PERCENT LIMITATION, WHICH PROCEDURE YOU CONSIDER PREJUDICIAL TO BIDDERS THAT FURNISHED THE STATEMENT WITH THEIR BIDS. WHILE IT MAY BE THAT PROSPECTIVE SUBCONTRACTORS WILL OFFER BETTER PRICES TO THE LOW BIDDER AFTER THE OPENING OF BIDS AND THE LOW BIDDER MAY THEREBY BE ABLE TO CONFORM TO THE 20 PERCENT OF THE WORK REQUIREMENT WHICH HE MAY NOT BE ABLE TO DO BEFORE, THIS IS A RISK THAT THE BIDDER UNDERTAKES IN ANY EVENT SINCE, SHOULD HE FAIL IN THIS REGARD, HE WOULD FIND HIMSELF IN A STATE OF DEFAULT WHICH WOULD PERMIT THE AWARD TO BE MADE TO ANOTHER WITH THE EXCESS COSTS CHARGED TO HIS ACCOUNT. FURTHER, NOTHING PRECLUDES A BIDDER WHO FURNISHES ALL THE INFORMATION WITH HIS BID FROM OBTAINING BETTER PRICES FROM HIS SUBCONTRACTORS AFTER THE OPENING OF BIDS OR CHANGING HIS SUBCONTRACTING ARRANGEMENTS AS LONG AS HE TOO STAYS WITHIN THE 20-PERCENT LIMITATION. A RESULT, IT DOES NOT SEEM THAT THE COMPLETELY COMPLIANT BIDDER AT BID OPENING IS IN ANY MORE OF A PREJUDICED POSITION THEN THE PARTIALLY COMPLIANT BIDDER.

FURTHER, THE OPPORTUNITY FOR "TWO BITES AT THE APPLE" GIVEN TO BIDDERS FAILING TO FURNISH BID BONDS IS NOT PRESENT IN THE IMMEDIATE SITUATION, INASMUCH AS THE STANDARD BID FORM PROVIDES THAT THE BIDDER PROPOSES TO PERFORM ALL WORK "IN STRICT ACCORDANCE" WITH THE "SPECIFICATIONS" AND "CONDITIONS," AS WELL AS OTHER PROVISIONS NOT IN ISSUE HERE, AND SPECIAL CONDITION SC-15 IN THE SPECIFICATIONS PROVIDES THAT "THE CONTRACTOR SHALL PERFORM ON THE SITE, AND WITH HIS OWN ORGANIZATION, WORK EQUIVALENT TO AT LEAST TWENTY PERCENT (20%) OF THE TOTAL AMOUNT OF THE WORK TO BE PERFORMED UNDER THE CONTRACT." IN THIS CONNECTION, IT WAS STATED IN 41 COMP.GEN. 106 THAT "WHETHER OR NOT HE FURNISHED THE INFORMATION WITH HIS BID, HE COULD BE REQUIRED TO PERFORM THE CONTRACT IN ACCORDANCE WITH THE SPECIFICATIONS INCLUDING THE MINIMUM OF 20 PERCENT WITH HIS OWN ORGANIZATION."

FOR THE FOREGOING REASONS, WE ARE OF THE OPINION THAT TO PERMIT THE BIDDERS INVOLVED TO FURNISH THE PERFORMANCE OF WORK INFORMATION AFTER THE BID OPENING IS NOT IMPROPER.