B-153367, FEB. 28, 1964

B-153367, FEB. 28, 1964

TO KOBIN AND MEYER:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 24, 1964, AND ENCLOSURE, PROTESTING ON BEHALF OF HANNAN BROS. CO., THE PROPOSED AWARD BY THE DEPARTMENT OF AGRICULTURE, U.S. FOREST SERVICE, OF SEPARATE CONTRACTS ON SCHEDULE NO. 1 AND SCHEDULE NO. 5, INVITATION FOR BIDS NO. R6-64 160, TO RASMUSSEN-B-E-C-K, INC., AND HANNAN BROS.CO., RESPECTIVELY.

THE INVITATION WAS DIVIDED INTO FIVE SCHEDULES AND BIDS WERE SOLICITED ON EACH SCHEDULE. THE PRINCIPAL FEATURES OF THE FIRST SCHEDULE, WHICH CONTAINED THE MAJOR PORTION OF THE WORK TO BE PERFORMED UNDER THE INVITATION, INVOLVED THE REHABILITATION OF CLEAR CREEK DAM AND APPURTENANT WORKS ON THE TIETON RIVER IN SNOQUALMIE NATIONAL FOREST, YAKIMA COUNTY, WASHINGTON, TOGETHER WITH THE CARE OF WATER DURING CONSTRUCTION AND REMOVAL OF DEBRIS FROM THE VICINITY OF THE OUTLET WORKS. THE OTHER SCHEDULES CONCERNED OPTIONS FOR CLEARING STUMPS, LOGS, TIMBER, ETC., FROM PROGRESSIVELY LARGER DESIGNATED RESERVOIR AREAS, WITH ALL SUCH AREAS BEING GROUPED UNDER SCHEDULE NO. 5.

THE INTRODUCTORY PARAGRAPH TO THE BIDDING SCHEDULES STIPULATES;

"BIDS WILL BE CONSIDERED ON ANY OR ALL OF THE FOLLOWING SCHEDULES, BUT NO BID WILL BE CONSIDERED FOR ONLY A PART OF A SCHEDULE. AWARD WILL BE MADE FOR ONLY ONE OF SCHEDULES NO. 2, 3, 4 AND 5 AS BEST SUITS THE INTEREST OF THE GOVERNMENT (SEE PARAGRAPH 14). BIDDERS MAY MAKE SUCH STIPULATIONS AS THEY DESIRE REGARDING A COMBINATION OF SCHEDULES: PROVIDED, THAT NO BID WILL BE CONSIDERED WHICH RESERVES A RIGHT TO DETERMINE AFTER BIDS ARE OPENED WHAT SCHEDULE OR COMBINATION OF SCHEDULES WILL BE ACCEPTED AS AN AWARD OF CONTRACT. IF BIDDER OFFERS A REDUCTION FOR A COMBINATION OF SCHEDULES, HE SHALL STATE THE ITEMS TO WHICH REDUCTIONS ARE TO BE MADE AND ALL PAYMENTS UNDER SUCH ITEMS WILL BE MADE AT THE REDUCED UNIT PRICES REGARDLESS OF OVERRUNS IN ESTIMATED QUANTITIES.'

THE REFERENCED PARAGRAPH 14 PROVIDES:

"14. AWARD OF CONTRACT

"THE AMOUNT OF FUNDS AVAILABLE FOR THE WORK UNDER THESE SPECIFICATIONS IS LIMITED. AWARD OF CONTRACT WILL BE MADE AS BEST SUITS THE INTEREST OF THE GOVERNMENT AND SO AS TO ACCOMPLISH THE MAXIMUM AMOUNT OF WORK AT THE LOWEST POSSIBLE COST WITH AVAILABLE FUNDS. THEREFOR, IT IS DESIRABLE THAT BIDDERS SUBMIT BIDS ON EACH SCHEDULE.'

ADDITIONAL PROVISIONS CONCERNING THE AWARD OF CONTRACTS UNDER THE INVITATION WERE SET FORTH UNDER PARAGRAPH 10 OF THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22) AS FOLLOWS:

"10. AWARD OF CONTRACT. (A) AWARD OF CONTRACT WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

(B) THE GOVERNMENT MAY, WHEN IN ITS INTEREST, REJECT ANY OR ALL BIDS OR WAIVE ANY INFORMALITY IN BIDS RECEIVED.

(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.'

TWENTY-FOUR BIDDERS RESPONDED TO THE INVITATION. FOUR BID ON ONLY SCHEDULE NO 1; THREE STATED THAT THEIR BIDS WERE TO BE CONSIDERED FOR ONLY SPECIFIC COMBINATIONS OF SCHEDULES; SEVENTEEN, INCLUDING HANNAN BROS. CO., AND RASMUSSEN-B-E-C-K, INC., BID ON ALL SCHEDULES WITHOUT EXPRESSLY QUALIFYING THEIR BIDS TO AN "ALL OR NONE" BASIS; AND NO BIDS WERE RECEIVED ON SCHEDULES 2, 3, 4 AND 5, ALONE. INASMUCH AS THE BIDS ON SCHEDULE NO. 1 WERE SUFFICIENTLY LOW AND ADEQUATE FUNDS WERE AVAILABLE FOR THE CLEARANCE OF THE COMPLETE RESERVOIR AREA, THE CONTRACTING OFFICER PROPOSED TO AWARD SEPARATE CONTRACTS TO THE LOW BIDDER ON SCHEDULE NO. 1, RASMUSSEN-B-E-C-K, INC., AND THE LOW BIDDER ON SCHEDULE NO. 5, HANNAN BROS. CO.

THE BID PRICES HERE FOR CONSIDERATION ARE AS FOLLOWS:

CHART

SCHEDULE HANNAN BROS. RASMUSSEN-B-E-C-K

1 $248,505 $245,425

2 1,540 2,200

3 5,187 10,920

4 6,804 15,120

5 14,259 29,100

TOTAL (1 AND 5) $262,764 $274,525

ESSENTIALLY, YOUR CONTENTIONS ARE (1) THAT AWARD SHOULD BE MADE TO HANNAN BROS.CO., AS THE LOWEST AGGREGATE BIDDER ON SCHEDULES 1 AND 5, COMBINED, FOR THE REASON THAT THE LANGUAGE OF THE INVITATION, ADVANTAGES TO THE GOVERNMENT, AND THE NATURE OF THE WORK INVOLVED ARE SUCH THAT THE JOB COULD ONLY REASONABLY HAVE BEEN CONTEMPLATED TO BE PERFORMED UNDER A SINGLE CONTRACT WITH THE GOVERNMENT; (2) OR, ALTERNATIVELY, THAT ALL BIDS BE REJECTED ON THE BASIS THAT THE INVITATION DOES NOT CLEARLY EXPRESS THE INTENT TO AWARD CONTRACTS ON SEPARATE SCHEDULES, BUT IS AMBIGUOUS AND SUBJECT TO MORE THAN ONE REASONABLE INTERPRETATION; (3) OR THAT, IN ANY EVENT, HANNAN BROS.CO., SHOULD NOT BE REQUIRED TO ACCEPT AN AWARD ON SCHEDULE NO. 5, ALONE, FOR THE REASON THAT ITS BIDS ON SCHEDULES 2, 3, 4 AND 5 WERE INTENDED TO BE IN COMBINATION WITH SCHEDULE NO. 1, AND THAT SUCH INTENT WAS OBVIOUS AT THE TIME OF THE BID OPENING INASMUCH AS THE HANNAN BROS.CO., A LARGE GENERAL CONTRACTING CONCERN SPECIALIZING IN BRIDGE AND CONCRETE WORK, COULD NOT BE REASONABLY EXPECTED TO BE INTERESTED IN A SINGLE CLEARING CONTRACT FOR AS LITTLE AS $1,540 (SCHEDULE NO. 2) AT A SITE REMOTE FROM ITS HOME BASE.

IN A REPORT DATED FEBRUARY 6, 1964, THE DEPARTMENT OF AGRICULTURE INFORMED THIS OFFICE THAT AN AWARD OF A CONTRACT FOR THE WORK UNDER SCHEDULE NO. 1 HAD BEEN MADE TO RASMUSSEN-B-E-C-K, INC., AS LOW RESPONSIBLE BIDDER FOR THAT PART OF THE WORK, AND THAT IN THE OPINION OF THE DEPARTMENT, HANNON BROS.CO. HAD SUBSTANTIATED ITS CLAIM THAT IT DID NOT ENTER A BID ON THE INVITATION WHICH COULD BE ACCEPTED FOR ONE OF THE CLEARING OPTIONS, SCHEDULE 2, 3, 4 OR 5, ONLY. IT IS FURTHER REPORTED THAT SINCE NO BIDS ON THE CLEARING WORK WERE RECEIVED FROM THE VARIOUS SMALL LOGGING CONCERNS IN THE VICINITY, WHICH HAD BEEN EXPECTED TO BID, AND IN VIEW OF THE EVIDENCE OF RECORD, THE DEPARTMENT OF AGRICULTURE CONSIDERS IT TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO MAKE NO AWARD ON SCHEDULES 2, 3, 4 AND 5, UNDER INVITATION FOR BIDS NO. R6-64-160, AND, UNLESS ADVISED TO THE CONTRARY BY OUR OFFICE, THEY EXPECT TO READVERTISE THE CLEARING WORK AT A LATER DATE.

CONCERNING THE REQUEST OF HANNAN BROS.CO. FOR RELIEF FROM AWARD UNDER SCHEDULE NO. 5 ALONE, IT APPEARS FROM YOUR LETTER OF JANUARY 24, 1964, THAT SUPERVISION AND OVERHEAD COSTS MAY NOT HAVE BEEN INCLUDED IN THE COMPANY'S BID PRICE ON THAT SCHEDULE BUT WERE INCORPORATED INSTEAD IN SCHEDULE NO. 1 FOR ALL WORK COVERED BY THE INVITATION. WHILE AN ERROR IN BID IS NOT ALLEGED, IT IS NOTED THAT THE AMOUNT OF ITS BID UNDER SCHEDULE 5, $14,259, IS SUBSTANTIALLY LESS THAN THE NEXT LOW BID OF $20,370 AND THE ENGINEER'S ESTIMATE OF $34,920. UNDER THE CIRCUMSTANCES HERE PRESENTED IT IS DOUBTFUL THAT AN AWARD TO HANNAN BROS.CO., AT ITS BID PRICE FOR SCHEDULE NO. 5 WOULD RESULT IN A BINDING CONTRACT. WE, THEREFORE CONCUR IN THE OPINION OF THE ADMINISTRATIVE OFFICE THAT THE BID OF HANNAN BROS.CO., SHOULD NOT BE ACCEPTED FOR AWARD OF A CONTRACT ON SCHEDULE NO. 5, ALONE. ALSO, UNDER PARAGRAPH 10 (B) OF THE INSTRUCTIONS TO BIDDERS, THE RIGHT WAS RESERVED TO THE GOVERNMENT, WHEN IN ITS INTEREST, TO REJECT ANY OR ALL BIDS. SINCE THE CONTRACTING AGENCY DETERMINED AFTER DUE CONSIDERATION OF THE MATTER THAT IT WAS IN THE BEST INTEREST OF THE GOVERNMENT TO MAKE NO AWARD UNDER THE BIDS AS SUBMITTED ON SCHEDULES 2, 3, 4 AND 5, BUT TO READVERTISE THAT WORK AT A LATER DATE, WE DO NOT FEEL THAT THE FACTORS HERE INVOLVED PRESENT A BASIS FOR THIS OFFICE TO QUESTION THE LEGALITY OF SUCH ACTION BY THE DEPARTMENT OF AGRICULTURE.

REGARDING YOUR CONTENTION THAT THE WORK OF SCHEDULES 1 AND 5 IS SO INTERRELATED THAT IT COULD ONLY REASONABLY HAVE BEEN CONTEMPLATED TO BE PERFORMED BY A SINGLE CONTRACTOR, SCHEDULE 1 INVOLVED MAINLY CONCRETE AND CONCRETE STRUCTURE WORK TO BE PERFORMED AT THE DAM SITE, WHEREAS SCHEDULE 5 INVOLVED THE REMOVAL OF STUMPS, LOGS, TIMBER AND BRUSH FROM THE RESERVOIR AREA TOGETHER WITH FLOATABLE DEBRIS WHICH HAD BEEN DEPOSITED AROUND THE EDGE THEREOF. SINCE THE TWO OPERATIONS PERTAIN TO DIFFERENT TYPES OF WORK TO BE PERFORMED IN SEPARATE BASIC AREAS, THE ALLEGED NECESSITY FOR PERFORMANCE OF BOTH OPERATIONS UNDER A SINGLE CONTRACT IS NOT READILY APPARENT, NOR IS SUCH VIEW REFLECTED IN THE ADMINISTRATIVE REPORT. TO THE CONTRARY, THE ESTABLISHMENT OF THE COST FACTOR AS THE GOVERNMENT'S PRIMARY CONCERN IN THIS RESPECT IS CLEARLY SHOWN IN A STATEMENT BY THE CONTRACTING OFFICER THAT THE INTENTION OF THE BIDDING INSTRUCTIONS WAS TO ADVISE BIDDERS THAT SEPARATE AWARDS COULD BE MADE FOR EITHER SCHEDULE 1 OR ANY OPTION OF CLEARING UNDER THE OTHER SCHEDULES, IF SUCH AWARDS WOULD RESULT IN A CHEAPER OVER-ALL PRICE FOR THE TOTAL WORK TO BE DONE. IT IS FURTHER REPORTED THAT THERE WERE A NUMBER OF SMALL LOGGERS IN THE AREA WHO HAD INDICATED INTEREST IN THE CLEARING WORK AND THAT IT WAS HOPED THAT SOME OF THEM MIGHT SUBMIT LOW BIDS.

WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT THE PROVISIONS OF THE INVITATION FOR BIDS ARE SO AMBIGUOUS AS TO PRECLUDE THE GOVERNMENT FROM THE ACCEPTANCE OF BIDS ON AN INDIVIDUAL SCHEDULE BASIS. PARAGRAPH 10 (C) OF THE INSTRUCTION TO BIDDERS SPECIFICALLY STATES THAT UNLESS RESTRICTED BY PROVISIONS OF THE INVITATION OR OF THE BID, THE GOVERNMENT MAY ACCEPT "ANY" ITEM OR COMBINATION OF ITEMS OF A BID. THE FIRST SENTENCE OF THE INTRODUCTORY PARAGRAPH TO THE BIDDING SCHEDULES LIKEWISE PROVIDES THAT BIDS WILL BE CONSIDERED ON "ANY" OR ALL OF THE SCHEDULES. CONTRARY TO THE INTERPRETATION PLACED BY YOU ON THE INVITATION PROVISIONS QUOTED HEREINBEFORE, IT IS OUR VIEW THAT SUCH PROVISIONS PROVIDE CLEAR NOTICE OF THE GOVERNMENT'S RIGHT TO CONSIDER UNRESTRICTED BIDS ON EACH SCHEDULE ALONE AND THE GOVERNMENT IS NOT PRECLUDED BY THE PROVISIONS FROM MAKING AWARDS ON A SCHEDULE-BY SCHEDULE BASIS WHEN SUCH ACTION IS DETERMINED TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IN THIS CONNECTION YOU ARE ADVISED THAT RASMUSSEN-B-E-C-K, INC., HAS STATED TO THE CONTRACTING OFFICER THAT ITS BID WAS INTENDED TO BE ON A SCHEDULE BY-SCHEDULE BASIS AS SUBMITTED, AND THAT IT HAD COMPUTED ITS BIDS ON THE CLEARING SCHEDULES SUFFICIENTLY HIGH TO PLAN ON SUBCONTRACTING THE WORK IF AWARDED FOR ANY ONE OR ANY COMBINATION OF THE FIVE SCHEDULES ON WHICH IT BID.

ACCORDINGLY, SINCE THE BIDS OF RASMUSSEN-B-E-C-K, INC., ON THE SCHEDULES OF THE INVITATION WERE NEITHER INTENDED NOR IN FACT QUALIFIED BY AN "ALL OR NONE" LIMITATIONS, WE FIND NO LEGAL BASIS TO QUESTION THE AWARD OF SCHEDULE NO. 1 TO THAT FIRM AS THE LOWEST RESPONSIBLE BIDDER.