B-148624, MAY 2, 1962, 41 COMP. GEN. 721

B-148624: May 2, 1962

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IN RELATION TO THE COST OF THE TWO MAJOR ITEMS WHICH WERE SEPARATE AND UNRELATED TO THE MINOR ITEM. IN VIEW OF THE FACT THAT THE LOW BID WAS SUBSTANTIALLY LOWER THAN OTHER BIDS IF THE PRICE ON THE OMITTED ITEM HAD BEEN QUOTED. 1962: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF APRIL 9. BIDS WERE REQUESTED FOR PERFORMANCE OF WORK. ITEM NO. 1 WAS DIVIDED INTO TWO SUBITEMS. WAS THE SECOND LOWEST BID. IT IS ALSO ADMINISTRATIVELY REPORTED AND CONFIRMED BY THE EVIDENCE OF RECORD. IT IS FURTHER REPORTED THAT. SPENCER'S BID WAS RESPONSIVE TO THE INVITATION. IT IS YOUR CONTENTION. THAT THE ACCEPTANCE OF SPENCER'S BID WAS CONTRARY TO AND IN VIOLATION OF 10 U.S.C. 2305 (C) AND IMPLEMENTING ADMINISTRATIVE REGULATIONS.

B-148624, MAY 2, 1962, 41 COMP. GEN. 721

BIDS - QUALIFIED - OMISSION OF ITEMS - ACCEPTANCE JUSTIFICATION--- BIDS QUALIFIED - OMISSION OF ITEMS - ACCEPTANCE JUSTIFICATION--- BIDS - QUALIFIED - EVALUATION - AGGREGATE V. SEPARABLE ITEMS, PRICES, ETC. THE FAILURE OF A LOW BIDDER IN RESPONSE TO A CONSTRUCTION INVITATION TO QUOTE A PRICE ON ONE MINOR ITEM, IN RELATION TO THE COST OF THE TWO MAJOR ITEMS WHICH WERE SEPARATE AND UNRELATED TO THE MINOR ITEM, NOT ONLY WOULD NOT AFFECT THE BIDDER'S OBLIGATION TO PERFORM THE WORK ON THE TWO MAJOR ITEMS, REGARDLESS OF THE REASON FOR THE OMISSION, SO THAT HE COULD NOT BE REGARDED AS HAVING AN UNFAIR ADVANTAGE OVER OTHER BIDDERS, BUT, IN VIEW OF THE FACT THAT THE LOW BID WAS SUBSTANTIALLY LOWER THAN OTHER BIDS IF THE PRICE ON THE OMITTED ITEM HAD BEEN QUOTED, ACCEPTANCE WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS; THEREFORE, ALL BIDDERS BEING ABLE TO COMPETE ON AN EQUAL BASIS, AWARD TO THE LOW BIDDER, WHO AGREED TO PERFORM ALL THREE ITEMS OF WORK WITHOUT ADDITIONAL CHARGE MAY NOT BE LEGALLY QUESTIONED. THE FAILURE OF A LOW BIDDER TO QUOTE A PRICE ON ONE ITEM IN RESPONSE TO AN INVITATION, WHICH DID NOT CONTAIN ANY EXPLICIT REQUIREMENT THAT FAILURE TO QUOTE A PRICE ON ALL ITEMS WOULD DISQUALIFY THE BID, WOULD AFFORD NO LEGAL BASIS FOR DISQUALIFICATION ON THAT ACCOUNT ALONE. UNDER AN INVITATION WHICH RESERVED TO THE GOVERNMENT THE RIGHT TO MAKE AN AWARD ON ANY AND ALL ITEMS, ACCEPTANCE OF BIDS ON AN ITEM TO ITEM BASIS WOULD NOT BE PRECLUDED, THE RESERVATION ENTITLING THE GOVERNMENT TO MAKE AN AWARD ON THE BASIS DETERMINED TO BE MOST ADVANTAGEOUS, PRICE AND OTHER FACTORS CONSIDERED.

TO HART, ROCKWOOD, DAVIES, BIGGS, AND STRAYER, MAY 2, 1962:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF APRIL 9, 1962, WITH ENCLOSURE, PROTESTING ON BEHALF OF THE UMPQUA RIVER NAVIGATION COMPANY THE AWARD MADE TO S. D. SPENCER AND SON, J. N. CONLEY, AND G. D. DENNIS AND SONS (HEREINAFTER REFERRED TO AS SPENCER), A JOINT VENTURE, UNDER INVITATION FOR BIDS NO. CIVENG-35-026-62-116, ISSUED UNDER DATE OF FEBRUARY 8, 1962, BY THE U.S. ARMY ENGINEER DISTRICT, PORTLAND, OREGON.

THE RECORD SHOWS THAT UNDER THE CITED INVITATION, BEARING BID OPENING DATE OF MARCH 20, 1962, BIDS WERE REQUESTED FOR PERFORMANCE OF WORK, DESCRIBED THEREIN AS " REPAIR TO SOUTH JETTY AT THE MOUTH OF THE UMPQUA RIVER, OREGON," IN ACCORDANCE WITH ATTACHED DRAWINGS AND SPECIFICATIONS. THE BID SCHEDULE, ATTACHED TO THE BID FORM, LISTED THE WORK COVERED BY THE INVITATION UNDER THREE ITEMS. ITEM NOS. 1 AND 2 COVERED THE FURNISHING AND PLACEMENT OF PRESCRIBED CLASSES OF STONE, IN THE ESTIMATED QUANTITIES OF 270,000 AND 40,000 TONS, RESPECTIVELY, AND ITEM NO. 3 COVERED THE CONSTRUCTION OF AN ACCESS GATE ON THE CREST OF THE JETTY. ITEM NO. 1 WAS DIVIDED INTO TWO SUBITEMS, (A) AND (B), FOR QUOTING PRICES ON THE STONE FURNISHED UP TO AND ABOVE 200,000 TONS, RESPECTIVELY. THE BID SCHEDULE AS SUBMITTED BY SPENCER CONTAINED THE FOLLOWING ENTRIES: CHART

ESTIMATED UNIT ESTIMATED ITEM NO. QUANTITIES UNIT PRICE AMOUNT

1. A. 200,000 TON $6.47 $1,294,000

B. 70,000 TON 5.80 406,000

2. 40,000 TON 10.00 400,000

3. 1 JOB

TOTAL--------- 2,100,000

OF THE SIX OTHER BIDS RECEIVED, RANGING UP TO A TOTAL ESTIMATED PRICE OF $3,254,280, UMPQUA'S BID IN THE TOTAL ESTIMATED AMOUNT OF $2,132,990, OR $32,990 IN EXCESS OF THE TOTAL FIGURE IN SPENCER'S BID, WAS THE SECOND LOWEST BID. THE RECORD FURTHER SHOWS THAT IMMEDIATELY UPON THE OPENING AND THE READING OF ITS BID, SPENCER'S REPRESENTATIVE ALLEGED THAT THE QUOTATION OF A PRICE ON ITEM NO. 3 OF THE INVITATION HAD BEEN INADVERTENTLY OMITTED. IT IS ALSO ADMINISTRATIVELY REPORTED AND CONFIRMED BY THE EVIDENCE OF RECORD, CONSISTING OF THE BIDDER'S NOTARIZED STATEMENT OF MARCH 22, 1962, AND ITS ORIGINAL WORKSHEETS, THAT SPENCER HAD INTENDED TO QUOTE A PRICE OF $1,500 FOR FURNISHING THE ACCESS GATE. IT IS FURTHER REPORTED THAT, BASED ON THE ADMINISTRATIVE DETERMINATION THAT, NOTWITHSTANDING THE OMISSION OF A PRICE QUOTATION ON ITEM NO. 3, SPENCER'S BID WAS RESPONSIVE TO THE INVITATION, AWARD HAS BEEN MADE TO THAT FIRM AND THAT, UNDER THE TERMS OF THE WORK COVERED BY THE INVITATION WITHOUT ANY ADDED CHARGE FOR THE CONSTRUCTION OF THE ACCESS GATE.

IT IS YOUR CONTENTION, IN SUBSTANCE, AS SET FORTH IN YOUR CORRESPONDENCE OF APRIL 9, 1962, AND IN SUPPLEMENTARY MEMORANDUM AND LETTER OF APRIL 16 AND 20, 1962, RESPECTIVELY, THAT THE ACCEPTANCE OF SPENCER'S BID WAS CONTRARY TO AND IN VIOLATION OF 10 U.S.C. 2305 (C) AND IMPLEMENTING ADMINISTRATIVE REGULATIONS. THAT SECTION PROVIDES THAT UNDER FORMAL ADVERTISEMENTS FOR BIDS AWARD SHALL BE MADE "TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.' IT IS YOUR POSITION THAT, BY REASON OF ITS FAILURE TO QUOTE A PRICE ON ITEM NO. 3 OF THE INVITATION, THE SPENCER BID DID NOT ,CONFORM" TO THE INVITATION AND, ACCORDINGLY, THE AWARD TO THAT FIRM SHOULD BE CANCELED AND THE CONTRACT AWARDED TO UMPQUA. ( ITALICS SUPPLIED.)

WE HAVE CONSISTENTLY HELD, AS SET FORTH IN THE NUMEROUS DECISIONS OF THIS OFFICE CITED BY YOU IN SUPPORT OF YOUR POSITION, THAT A NONRESPONSIVE BID DOES NOT CONSTITUTE AN OFFER WHICH PROPERLY MAY BE ACCEPTED. WHILE SEVERAL OF THOSE DECISIONS INVOLVED THE FAILURE OF A BIDDER TO SUBMIT A PRICE ON ONE OR MORE OF THE ITEMS UNDER THE COVERING INVITATION, THIS FACT ALONE IS NOT NECESSARILY DETERMINATIVE OF THE RESPONSIVENESS OF A BID. RATHER, THE RESPONSIVENESS OR NONRESPONSIVENESS OF A BID IS FOR DETERMINATION UPON THE BASIS OF THE TERMS OF THE INVITATION ON WHICH THE BID IS SUBMITTED. WHERE THE INVITATION FOR BIDS EXPRESSLY PROVIDED THAT NO BID WOULD BE CONSIDERED FOR ONLY A PART OF THE ITEMS COVERED BY THE INVITATION ( OFFICE DECISION OF DECEMBER 15, 1959, B-141395); WHERE THE INVITATION FOR BIDS EXPRESSLY REQUIRED THAT BIDDERS BID ON EACH TYPE OF FINISH OF THE SUPPLIES THERE INVOLVED AND FURTHER PROVIDED THAT NONINCLUSION OF A PRICE THEREON WOULD RENDER THE BID NONRESPONSIVE ( OFFICE DECISION OF AUGUST 28, 1961, B-146329); AND WHERE THE INVITATION FOR BIDS EXPRESSLY PROVIDED THAT BIDDERS WHO HAD NOT PREVIOUSLY FURNISHED EQUIPMENT OF THE TYPE SPECIFIED TO THE GOVERNMENT "SHALL SUBMIT A BID ON THE ORIGINAL DATA CALLED FOR HEREIN" ( OFFICE DECISION OF DECEMBER 20, 1961, B 147586, 41 COMP. GEN. 412), WE HELD IN THE CITED DECISIONS THAT FAILURE OF THE BIDDER TO COMPLY WITH THE MANDATORY PROVISIONS OF THE INVITATION RENDERED ITS BID NONRESPONSIVE. NO SUCH MANDATORY PROVISIONS AS WERE INVOLVED IN THOSE CASES ARE PRESENT HEREIN.

APPARENTLY IN RECOGNITION OF THE PRINCIPLE THAT, UNDER INVITATIONS WHICH DO NOT REQUIRE BIDDERS TO BID ON ALL ITEMS, A BID ON LESS THAN ALL ITEMS MAY NEVERTHELESS BE REGARDED AS RESPONSIVE AS TO THOSE ITEMS ON WHICH BIDS ARE SUBMITTED, IT IS YOUR CONTENTION (1) THAT THE INVITATION HERE INVOLVED IMPLICITLY REQUIRED BIDDERS TO SUBMIT BIDS ON ALL ITEMS AND (3) THAT THE GOVERNMENT WAS PRECLUDED BY PARAGRAPH 3 OF THE INVITATION FOR BIDS FROM ACCEPTANCE OF BIDS ON AN ITEM-BY-ITEM BASIS.

SO FAR AS CONCERNS YOUR FIRST CONTENTION, PARAGRAPH 5 (B) OF THE INSTRUCTIONS TO BIDDERS ( CONSTRUCTION CONTRACT), STANDARD FORM 22, ATTACHED TO AND SPECIFICALLY MADE A PART OF THE INVITATION FOR BIDS ( CONSTRUCTION CONTRACT), STANDARD FORM 20, PROVIDES, IN PERTINENT PART, THAT:

WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID. ( ITALICS SUPPLIED.)

IN VIEW OF THE ABSENCE IN THE INVITATION OF ANY EXPLICIT REQUIREMENT THAT BIDDERS BID ON ALL ITEMS, IT MUST BE CONCLUDED THAT FAILURE TO BID ON ITEM NO. 3 IN THIS CASE WOULD AFFORD NO LEGAL BASIS FOR DISQUALIFICATION ON THAT ACCOUNT.

ALSO, WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT THE CITED PROVISION OF THE INVITATION FOR BIDS PRECLUDED THE GOVERNMENT FROM THE ACCEPTANCE OF BIDS ON AN ITEM-BY-ITEM BASIS. PARAGRAPH 10 OF THE INSTRUCTIONS TO BIDDERS, STANDARD FORM 22, PROVIDES, IN PART, THAT:

(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED BY THE INVITATION FOR BIDS OR THE BIDDER INCLUDES IN HIS BID A RESTRICTIVE LIMITATION.

PAGE "B" OF THE INVITATION FOR BIDS, WHICH EXPRESSLY STATES THAT IT IS TO BE READ " IN CONJUNCTION WITH INSTRUCTIONS TO BIDDERS, U.S. STANDARD FORM 22," PROVIDES UNDER PARAGRAPH 3 THEREOF THAT:

THE GOVERNMENT FURTHER RESERVES THE RIGHT TO MAKE AWARD ON ANY OR ALL SCHEDULES OF ANY BID, UNLESS THE BIDDER QUALIFIES SUCH BID BY SPECIFIC LIMITATION; ALSO TO MAKE AWARD TO THE BIDDER WHOSE AGGREGATE BID ON ANY COMBINATION OF BID SCHEDULES IS LOW.

CONTRARY TO THE INTERPRETATION PLACED BY YOU ON THE ABOVE-QUOTED PROVISION, IT IS OUR OPINION THAT THE GOVERNMENT WAS NOT PRECLUDED THEREBY FROM THE ACCEPTANCE OF BIDS ON AN ITEM-BY-ITEM BASIS BUT THAT, IN ADDITION THERETO, THE GOVERNMENT FURTHER RESERVED THE RIGHT TO MAKE AWARD TO ONE BIDDER FOR ALL THE ITEMS COVERED BY THE SCHEDULE, WHICHEVER ACTION WAS DETERMINED TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

THE BASIC REASON UNDERLYING THE STATUTORY REQUIREMENT THAT A BID, TO BE ELIGIBLE FOR AWARD, MUST BE IN CONFORMITY WITH THE INVITATION FOR BIDS IS TO ASSURE THAT ALL BIDDERS WILL HAVE THE OPPORTUNITY OF COMPETING ON AN EQUAL BASIS AND TO HAVE THEIR BIDS EVALUATED ON THE SAME BASIS. EQUALITY OF TREATMENT OF ALL BIDDERS, AS APPLIED TO THE CIRCUMSTANCES INVOLVED IN THIS CASE, REQUIRES THAT NO BIDDER, BY THE OMISSION OF A BID ON AN ITEM, THEREBY GAIN AN ADVANTAGE FOR HIMSELF OR PREJUDICE THE POSITION OF OTHER BIDDERS. IT SEEMS TO US THAT IF NO SUCH ADVANTAGE OR PREJUDICE RESULTS FROM THE BIDDER'S OMISSION OF A BID ON AN ITEM, THE OTHER BIDDERS HAVE NO JUST CAUSE FOR COMPLAINT AGAINST AN AWARD ON THAT BID. ON THE BASIS OF THE TERMS OF THE INVITATION HERE INVOLVED, WE FIND NO ADVANTAGE TO SPENCER IN OMITTING A BID ON ITEM NO. 3 THEREOF.

THE USUAL ADVANTAGE ATTRIBUTABLE TO THE SUBMISSION OF A NONRESPONSIVE BID IS AN OPTION THEREBY GAINED BY THE BIDDER TO DECIDE AFTER OPENING WHETHER TO ACCEPT OR REJECT AN AWARD. SPENCER HAD NO SUCH OPTION WITH RESPECT TO THE ITEMS ON WHICH IT BID. OF THE THREE ITEMS COVERED BY THE INVITATION, SPENCER'S BID ON ITEM NOS. 1 AND 2, COVERING THE FURNISHING AND PLACEMENT OF STONE IN THE REPAIR OF THE JETTY AND COMPRISING, BASED ON THE GOVERNMENT'S ESTIMATED COST THEREOF OF $2,462,000, ALL BUT ABOUT ONE- TWENTIETH OF ONE PERCENT OF ITS ESTIMATED COST OF ALL ITEMS, WAS IN STRICT ACCORDANCE WITH ALL APPLICABLE TERMS AND CONDITIONS OF THE INVITATION AND SPECIFICATIONS. ITEM NO. 3 OF THE INVITATION, COVERING THE CONSTRUCTION OF AN ACCESS GATE TO CONTROL VEHICULAR TRAFFIC ON THE JETTY AND COMPRISING AN ESTIMATED COST BY THE GOVERNMENT OF ONLY $1,000, INVOLVED A RELATIVELY MINOR ACCESSORY IN THE OVERALL WORK OF REPAIRING THE JETTY. THERE IS NO DOUBT IN OUR MINDS THAT ACCEPTANCE OF SPENCER'S BID AS SUBMITTED WOULD HAVE OBLIGATED THAT FIRM TO PERFORM THE REQUIRED WORK UNDER ITEM NOS. 1 AND 2, REGARDLESS OF THE REASON FOR ITS OMISSION OF A BID PRICE ON ITEM NO. 3. IN VIEW OF OUR CONCLUSION WITH RESPECT TO THE ITEMS BID ON BY SPENCER, AND OF THE SEPARATE, UNRELATED AND RELATIVELY MINOR NATURE OF THE WORK UNDER ITEM NO. 3 IN RELATION TO ITEM NOS. 1 AND 2 OF THE INVITATION, WE CANNOT CONCLUDE THAT ANY POSSIBLE ADVANTAGE WAS GAINED BY SPENCER IN OMITTING A BID ON ITEM NO. 3.

CONCERNING THE CONSIDERATION OF POSSIBLE PREJUDICE TO OTHER BIDDERS BY THE ACCEPTANCE OF SPENCER'S BID, THE ONLY PREJUDICE REMOTELY CONCEIVABLE IS THE EFFECT OF THE OMISSION OF A BID PRICE ON ITEM NO. 3 IN EVALUATING BIDS TO DETERMINE THE LOW BIDDER. THE DIFFERENCE BETWEEN SPENCER'S BID AND THE NEXT LOW BID OF UMPQUA WAS $32,990. THE GOVERNMENT'S ESTIMATED COST OF ITEM NO. 3 WAS, AS STATED ABOVE, $1,000 AND THE SIX BIDS RECEIVED THEREON RANGED FROM YOUR LOW BID OF $490 TO $2,280. SPENCER'S ALLEGED INTENDED BID FOR ITEM NO. 3 WAS $1,500 AND IT IS ADMINISTRATIVELY REPORTED THAT IN RESPONSE TO A PREVIOUS INVITATION IT BID $1,000 FOR THE CONSTRUCTION OF A SIMILAR GATE. ON THE BASIS OF SUCH EVIDENCE, IT APPEARS INDISPUTABLE THAT THE SPENCER BID WOULD HAVE BEEN LOW EVEN IF A PRICE HAD BEEN QUOTED ON ITEM NO. 3. IN VIEW THEREOF, AND OF OUR CONCLUSION THAT SPENCER'S OMISSION OF A BID ON ITEM NO. 3, EVEN IF DELIBERATE, WOULD HAVE OBLIGATED IT TO ACCEPT AN AWARD ON ITS BID ON ITEM NOS. 1 AND 2, WE MUST CONCLUDE THAT OTHER BIDDERS WERE NOT PREJUDICED BY THE ACCEPTANCE OF SPENCER'S BID. FINALLY, WITH RESPECT TO WHETHER SPENCER WAS OBLIGATED, UPON ACCEPTANCE OF ITS BID, TO FURNISH ITEM NO. 3, WHILE WE HAVE SERIOUS DOUBT THAT IT WAS SO REQUIRED, IN VIEW OF ITS AGREEMENT UNDER THE TERMS OF THE CONTRACT TO FURNISH THAT ITEM, THE QUESTION IS ACADEMIC AND NEED NOT NOW BE DETERMINED.

ACCORDINGLY, SINCE THE RECORD SHOWS THAT THE CONTRACT HAS BEEN AWARDED TO THE LOWEST RESPONSIVE BIDDER, WE FIND NO LEGAL BASIS TO QUESTION THE AWARD AS MADE.