B-149267, JUN. 29, 1962

B-149267, JUN. 29, 1962

TO DEPARTMENT OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 21, 1962, WITH ENCLOSURES, REQUESTING OUR DECISION AS TO WHETHER AN AWARD OF THE FORMALLY ADVERTISED PROJECT HEREINAFTER REFERRED TO IS REQUIRED TO BE MADE TO THE WILLIAM B. DILLARD CONSTRUCTION COMPANY, INC., AS THE LOWEST BIDDER FOR THE COMBINED PROJECTS, OR WHETHER AWARDS MAY BE MADE TO SEPARATE BIDDERS AS THE INTERESTS OF THE GOVERNMENT MAY REQUIRE. IN THE EVENT OUR OFFICE DECIDES THAT AWARDS MAY BE MADE IN THE LATTER MANNER YOU THEN REQUEST OUR DECISION AS TO WHETHER THE BID OF THE DILLARD COMPANY MAY BE DISREGARDED.

THE RECORD INDICATES THAT PURSUANT TO INVITATION FOR BIDS NO. BIA 0150-62 -60, DATED APRIL 17, 1962, AS AMENDED BY ADDENDUM NO. 1, BIDS WERE RECEIVED AND OPENED IN THE OFFICE OF THE BUREAU OF INDIAN AFFAIRS AT 2:00 P.M. ON MAY 23, 1962, FOR THE CONSTRUCTION OF CERTAIN HOUSING FACILITIES AT CHEROKEE, NORTH CAROLINA, ONE OF THE PROJECTS BEING NUMBERED ABU-PH-53 (22, COVERING HOUSING TO BE CONSTRUCTED FOR THE PUBLIC HEALTH SERVICE UNDER THE DIRECTION OF THE BUREAU OF INDIAN AFFAIRS AND FINANCED FROM PUBLIC HEALTH SERVICE FUNDS, AND THE OTHER NUMBERED BU652-587, COVERING HOUSING FACILITIES FINANCED FROM BUREAU OF INDIAN AFFAIRS FUNDS. AS A PART OF THE DOCUMENTS COMPRISING THE INVITATION FOR BIDS THERE WERE TRANSMITTED WITH YOUR LETTER THE USUAL SUPPORTING INSTRUMENTS, AMONG WHICH WERE STANDARD FORM NO. 21, THE BID BOND, STANDARD FORM NO. 22, ETC.

THE WORK COVERED BY THE INVITATION FOR BIDS COVERED TWO PROPOSALS READING AS FOLLOWS:

TABLE

"1. LOCATION AND SCOPE OF THE WORK:

"/1) PROPOSAL NO. 1: THIS PROPOSAL INCLUDES ALL THE WORK FOR THE PHS HOUSING UNITS FOR PROJECT NO. ABU-PH-53 (22) NOTED BELOW:

BUILDING NUMBERS 2-BEDROOM 3-BEDROOM

1, 2, 3, AND 4 1 1

"/2) PROPOSAL NO. 2: THIS PROPOSAL INCLUDES ALL THE WORK FOR BIA HOUSING UNITS FOR PROJECT NO. BU 652-587 NOTED BELOW:

BUILDING NUMBERS 3-BEDROOM 2-BEDROOM 4-UNIT

DUPLEX APT.

5, 6, 7, 8, 9, 3 4 1"

10, 11, AND 12

IT WAS STATED IN YOUR LETTER THAT PROVISION WAS MADE ON THE BID FORM STANDARD FORM NO. 21, FOR BIDDING ON EACH OF THE INDICATED PROPOSALS, BUT THAT, HOWEVER, THERE WAS NO PROVISION IN THE BID FORM WHEREBY PROSPECTIVE BIDDERS WERE TO ENTER THE TOTAL OF THE TWO PROPOSALS OF FOR BIDDING ONE LUMP SUM FOR THE TWO PROPOSALS. IT WAS POINTED OUT IN YOUR LETTER THAT NEITHER THE BID FORM NOR ANY OTHER DOCUMENT INCLUDED IN THE INVITATION CONTAINED A PROVISION PRECLUDING A BIDDER FROM ENTERING AN ALL-OR-NONE QUALIFICATION OF A BID. IT IS REPORTED THAT THE BID SUBMITTED BY THE DILLARD COMPANY WAS NOT QUALIFIED IN SUCH MANNER.

IT WAS STATED IN YOUR LETTER THAT THREE BIDS WERE RECEIVED AND OPENED ON MAY 23, 1962, THE SAME BEING TABULATED ON PAGE 3, INCLUDING THE GOVERNMENT ESTIMATE; ALSO, THERE WAS INCLUDED AN ANALYSIS INDICATING THE RATIO OF THE BID FOR EACH PROPOSAL TO THE SUM OF THE TWO PROPOSALS. THE TABULATION FOLLOWS:

CHART

R.B.RITCHIE WM.B.DILLARD B.F.CHURCHILL GOVERNMENT

CON.CO.,INC. AND SONS ESTIMATE

PERCENT PERCENT PERCENT PERCENT

BID OF BID OF BID OF BID OF

AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL

------ ------ ------ ------ ------ ----- ------ ----- BASE PROPOSAL 88,000 20.9 85,000 25.6 75,500 19.7 85,547 20.4NO. 1 BASE PROPOSAL/333,500 79.1 247,500 74.4 307,000 80.3 333,317 79.6 NO. 2 ------- ---- ------- ---

SUM 421,500 100.0 332,500 100.0382,500 100.0 418,864 100.0

THE RECORD INDICATES THAT ON MAY 24, 1962, MR. WILLIAM B. DILLARD, PRESIDENT OF THE DILLARD COMPANY, WAS CONTACTED BY TELEPHONE FOR THE PURPOSE OF REQUESTING A REVIEW OF THE HOUSING COSTS ENTERED ON "ATTACHMENT 2," AND AT THAT TIME HE WAS ADVISED OF THE BIDS RECEIVED AND OF THE PROSPECT THAT AWARDS OF THE TWO PROJECTS WOULD BE MADE TO SEPARATE CONTRACTORS. MR. DILLARD ADVISED THAT HE HAD NOT ANTICIPATED THAT AWARDS COULD BE MADE IN SUCH MANNER AND IN A LETTER DATED MAY 29, 1962, HE STATED THAT UNDER NO CIRCUMSTANCES WOULD HIS COMPANY CONSIDER THE AWARD OF ANYTHING BUT THE ENTIRE PROJECT.

THERE FOLLOWED CERTAIN CORRESPONDENCE WITH THE DILLARD COMPANY, INCLUDING A LETTER DATED JUNE 8, 1962, FROM MR. DILLARD, STATING THAT A CORRECT BREAKDOWN OF THE PROPOSALS SHOULD BE THE SUM OF $64,800 FOR PROPOSAL NO. 1, AND THE SUM OF $267,700 FOR PROPOSAL NO. 2. THERE WAS SUBSEQUENTLY RECEIVED A COPY OF THE LETTER OF JUNE 8, 1962, INCLUDING A PENNED REVISION IN THE CONCLUDING PARAGRAPH, AS FOLLOWS:

"WE ARE UNWILLING TO ACCEPT PROPOSAL NO. 2 ALONE. WE ARE WILLING TO ACCEPT THE TOTAL CONTRACT AS WE BID IT IN ITS ENTIRETY. SINCE CONSULTING WITH OUR ATTORNEYS WE ARE UNWILLING FOR OUR BID TO BE REJECTED. OBVIOUSLY BID THE PROJECT IN ENTIRETY AND REQUEST THAT IT BE AWARDED AS WE BID IT. WE ARE WILLING TO TAKE PROPOSAL NO. 2 ALONE FOR THE REVISED PRICE OF $267,700.00.'

FOR THE PURPOSES OF THIS DECISION IT APPEARS UNNECESSARY TO MAKE SPECIFIC REFERENCE TO THE SEVERAL ADDITIONAL STATEMENTS IN YOUR LETTER RELATING TO THE SUBMISSION BY THE DILLARD COMPANY OF A BREAKDOWN OF THE ANTICIPATED COSTS FOR THE PROJECTS INVOLVED, EXCEPT TO SAY THAT THE EVIDENCE APPEARS TO SUPPORT MR. DILLARD'S CONTENTIONS THAT THE DILLARD COMPANY'S BID WAS INTENDED TO COVER BOTH PROPOSALS; THAT THE BIDS OF THE SUBCONTRACTORS WERE BASED UPON THIS BELIEF, AND THAT FOR THESE REASONS AN AWARD AS TO PROPOSAL NO. 2 AT THE BID PRICE OF $247,500 WOULD NOT BE ACCEPTABLE TO HIM.

ON PAGE 9 OF YOUR LETTER IT WAS STATED, IN EFFECT, THAT BY TELEGRAM DATED JUNE 4, 1962, THE CONTRACTING OFFICER ADVISED THE DILLARD COMPANY THAT HE WAS WITHOUT DISCRETION TO REJECT THAT COMPANY'S BID ON ANY BASE PROPOSAL AS TO WHICH IT WAS LOW. THIS ADVICE APPEARS TO HAVE BEEN BASED ON THE CONTRACTING OFFICER'S BELIEF THAT IN THE ABSENCE OF ANY QUALIFICATION TO THE CONTRARY BY THE BIDDER, THE INVITATION FOR BIDS CLEARLY PERMITS AWARD BY PROPOSALS AS THE INTERESTS OF THE GOVERNMENT REQUIRE, BASED ON THE BIDS AS OPENED. THAT BELIEF, IN TURN, APPEARS TO HAVE BEEN BASED UPON THE PROVISION OF SECTION 10 (C) OF THE INSTRUCTIONS TO BIDDERS, STANDARD FORM 22, INCORPORATED INTO THE INVITATION FOR BIDS, PROVIDING AS FOLLOWS:

"/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.'

FOR THE REASONS SET FORTH IN THE FOURTH PARAGRAPH ON PAGE 9 OF YOUR LETTER, YOU STATE THAT A QUESTION ARISES AS TO WHETHER AN AWARD OF PROPOSAL NO. 2 TO THE DILLARD COMPANY AT THE AMOUNT BID THEREFOR AS OF THE BID OPENING TIME ($247,500) WOULD RESULT IN A BINDING CONTRACT. WE FEEL THIS TO BE THE PRIMARY QUESTION FOR CONSIDERATION IN THIS CASE. THE STATEMENTS MADE BY MR. DILLARD, TOGETHER WITH THE DOCUMENTS FURNISHED, APPEAR TO SUPPORT HIS CONTENTIONS THAT THE DILLARD COMPANY'S BID WAS INTENDED TO COVER BOTH PROPOSALS. WHILE AN ERROR IN BID IS NOT ALLEGED, THE DOCUMENTS FURNISHED BY THE DILLARD COMPANY DO INDICATE THAT THE AMOUNT BID FOR PROPOSAL NO. 2 WAS SUBSTANTIALLY LESS THAN THE COST THAT WOULD BE INVOLVED IN THE CONSTRUCTION OF THE PROJECT. UNDER THE FACTS REPORTED IT SEEMS SOMEWHAT DOUBTFUL THAT AN AWARD TO THE DILLARD COMPANY AT ITS BID PRICE FOR PROPOSAL NO. 2 WOULD RESULT IN A BINDING CONTRACT. WE THEREFORE BELIEVE IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO ACCEPT THE BID OF THE DILLARD COMPANY AT ITS ORIGINAL BID PRICE OF $322,500, IT BEING NOTED THAT THAT AMOUNT IS SUBSTANTIALLY LESS THAN THE TOTAL BID OF THE NEXT LOWEST BIDDER AND LESS THAN ANY COMBINATION OF THE PRICES QUOTED FOR THE TWO ITEMS BY THE OTHER BIDDERS.

THE ENCLOSURES TO YOUR LETTER ARE BEING RETURNED HEREWITH WITH THE EXCEPTION OF THE DRAWINGS WHICH ARE BEING RETURNED UNDER SEPARATE COVER.