B-153827, APR. 23, 1964

B-153827: Apr 23, 1964

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" READS IN PERTINENT PART: "/A) AWARD OF CONTRACT WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID. IS MOST ADVANTAGEOUS TO THE GOVERNMENT. SINCE DILLARD WAS LOW ON ITEMS 2. HAWKINS WAS LOW ON ITEMS 1. AWARD WAS MADE ON JANUARY 28. BOTH OF THESE SUCCESSFUL BIDDERS HAVE PROTESTED AGAINST SUCH AWARDS AND HAVE CONTENDED THAT ONLY ONE CONTRACT SHOULD HAVE BEEN AWARDED IN THE AGGREGATE. IT IS ARGUED THAT THE LANGUAGE AND INFORMATION ON STANDARD FORM 21 AND THE BID SCHEDULE ITSELF NULLIFIED THE ITEM BY ITEM AWARD PROVISION OF PARAGRAPH 10. "BELOW THIS PARAGRAPH (MENTIONED IN "1" ABOVE) THERE IS A NOTE STATING THAT "BIDDERS SHOULD ENTER THEIR BID OFFER ON THE BID SCHEDULE ATTACHED TO THIS FORM WHICH IS MADE A PART OF THIS INVITATION.'.

B-153827, APR. 23, 1964

TO THE SECRETARY OF AGRICULTURE:

BY LETTER DATED MARCH 25, 1964, THE ADMINISTRATIVE ASSISTANT SECRETARY REQUESTED OUR DECISION WITH RESPECT TO THE PROTESTS OF WILLIAM B. DILLARD CONSTRUCTION COMPANY, INC., AND THE HAWKINS PLUMBING COMPANY AGAINST THE AWARDS MADE TO THEM UNDER INVITATION FOR BIDS NO. 3-64-33, ISSUED ON JANUARY 15, 1964, BY THE FOREST SERVICE, GAINESVILLE, GEORGIA, COVERING CERTAIN CONSTRUCTION WORK IN THE LAKE CHATUGE RECREATION AREA DEVELOPMENT AS SCHEDULED IN SEVEN BID ITEMS.

PARAGRAPH 10 OF INSTRUCTIONS TO BIDDERS (CONSTRUCTION CONTRACT), MADE A PART OF THE INVITATION, ENTITLED "AWARD OF CONTRACT," READS IN PERTINENT PART:

"/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.

"/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.'

THE BID SCHEDULE REQUESTED LUMP-SUM BIDS FOR EACH OF THE SEVEN ITEMS AND A TOTAL BID FOR ALL ITEMS. PURSUANT THERETO, DILLARD SUBMITTED LUMP-SUM ITEM BIDS WHICH TOTALED $20,845, AND HAWKINS SUBMITTED LUMP-SUM ITEM BIDS WHICH TOTALED $20,845, AND HAWKINS SUBMITTED LUMP-SUM ITEM BIDS WHICH TOTALED $20,364. SINCE DILLARD WAS LOW ON ITEMS 2, 3, 4, AND 6, AND HAWKINS WAS LOW ON ITEMS 1, 5, AND 7, AWARD WAS MADE ON JANUARY 28, 1964, TO DILLARD IN THE TOTAL AMOUNT OF $6,710 AND TO HAWKINS IN THE TOTAL AMOUNT OF $10,961. HOWEVER, BOTH OF THESE SUCCESSFUL BIDDERS HAVE PROTESTED AGAINST SUCH AWARDS AND HAVE CONTENDED THAT ONLY ONE CONTRACT SHOULD HAVE BEEN AWARDED IN THE AGGREGATE. IT IS ARGUED THAT THE LANGUAGE AND INFORMATION ON STANDARD FORM 21 AND THE BID SCHEDULE ITSELF NULLIFIED THE ITEM BY ITEM AWARD PROVISION OF PARAGRAPH 10, QUOTED ABOVE, FOR THE FOLLOWING REASONS:

"1. "THE FIRST PARAGRAPH OF BID FORM SF-21 STATES THAT "IN COMPLIANCE WITH THE ABOVE DATED INVITATION FOR BIDS, THE UNDERSIGNED HEREBY PROPOSES TO PERFORM ALL WORK FOR LAKE CHATUGE RECREATION AREA, ITEMS 1 THROUGH 7, SHOWN ON THE BID SCHEDULE.'" (QUOTE FROM WILLIAM B. DILLARD CONSTRUCTION COMPANY, INC., LETTER) UNDERLINING OF SF-21 STANDARD LANGUAGE SUPPLIED.

"2. "BELOW THIS PARAGRAPH (MENTIONED IN "1" ABOVE) THERE IS A NOTE STATING THAT "BIDDERS SHOULD ENTER THEIR BID OFFER ON THE BID SCHEDULE ATTACHED TO THIS FORM WHICH IS MADE A PART OF THIS INVITATION.' PLEASE NOTE THAT THE WORD "OFFER" IS USED NOT "OFFERS.'" (QUOTE FROM WILLIAM B. DILLARD CONSTRUCTION COMPANY, INC., LETTER)

"3. "THE BID SCHEDULE LISTS SEVEN ITEMS, WITH A BLANK LINE FOR "TOTAL, ALL ITEMS.' WE PRESUMED THAT YOU WISHED THE LUMP SUM BID ITEMIZED FOR PURPOSES OF INTERNAL ACCOUNTING, OR FOR PURPOSES OF COMPUTING PERIODICAL PARTIAL PAYMENTS TO THE CONTRACTOR---.' (WILLIAM B. DILLARD CONSTRUCTION COMPANY, INC., LETTER). RIGHT HAND TOP OF PAGE IS COLUMN HEADED "LUMP SUM BID ICE.' USUAL MEANING OF THIS TERMINOLOGY IS THAT ONE PRICE IS DESIRED FOR ALL WORK.

"4. "--- WE FIND YOU ARE NOT AWARDING US THE CONTRACT AS BID, BUT ITEMS 1, 5, AND 7 ONLY. THIS IS NOT OUR INTERPRETATION OF THE BID FORM, IT REQUESTED A LUMP SUM BID, THEREFORE, A COMPLETE BID JOB.' (HAWKINS PLUMBING COMPANY LETTER)

"5. "THE BID FORM WAS MISLEADING. NO MENTION OF MORE THAN ONE CONTRACT.' (HAWKINS PLUMBING COMPANY LETTER) "THE ABOVE REVEALS A LACK OF CLEAR UNDERSTANDING OF WHAT IS DESIRED AS TO PRICE RESPONSE FROM THE BIDDERS. BY REASON OF THE STATEMENTS ON THE SF-21 BID FORM AND THE BID SCHEDULE BIDDERS ARE UNDER IMPRESSION THAT ALL ITEMS SHOULD BE AWARDED ONE BIDDER.

"BIDDERS CLAIM COMPUTATION OF OVERHEAD COSTS WAS BASED ON AWARD OF ALL WORK ADVERTISED UNDER THE INVITATION, THAT THEY ARE SEVERELY PENALIZED UNDER THE ITEM BY ITEM METHOD OF AWARD. THIS APPEARS TO BE BORNE OUT BY THE COMPARISON OF INDIVIDUAL ITEM BID PRICES, EACH BIDDER "LOADING" ONE OR TWO ITEMS WITH OVERHEAD (BONDS, BIDDING EXPENSE, EQUIPMENT MOVE-IN EXPENSE ETC.) RATHER THAN FIGURING OVERHEAD ON EACH ITEM SEPARATELY AS A JOB UNRELATED TO OTHER ITEMS.'

IN VIEW OF THE FOREGOING, IT IS RECOMMENDED THAT THE AWARDS BE CANCELED AND THE ENTIRE WORK READVERTISED AT A LATER DATE. WE DO NOT AGREE THAT SUCH ACTION IS APPROPRIATE OR REQUIRED BY THE CIRCUMSTANCES INVOLVED IN THESE AWARDS.

PARAGRAPH 10 OF THE INSTRUCTIONS TO BIDDERS EXPRESSLY SANCTIONS THE QUALIFICATION OF BIDS BY BIDDERS TO PRECLUDE ACCEPTANCE BY THE GOVERNMENT ON AN INDIVIDUAL ITEM BASIS. BOTH DILLARD AND HAWKINS WERE, THEREFORE, ENTITLED TO BID ON AN "ALL OR NONE" BASIS AND BIDS ON THAT BASIS WOULD HAVE BEEN RESPONSIVE. PARAGRAPH 10 AND THE OTHER PROVISIONS AND LANGUAGE OF THE INVITATION WHICH ARE RELIED UPON BY THESE TWO BIDDERS MUST BE READ TOGETHER, AND WE FIND NOTHING IN THE LATTER PROVISIONS AND LANGUAGE WHICH WOULD HAVE PRECLUDED THE SUBMISSION OF "ALL OR NONE" BIDS.

WHILE THOSE PROVISIONS AND LANGUAGE MIGHT HAVE BEEN INTERPRETED BY BY BIDDERS AS EVIDENCING AN INTENTION THAT AN AGGREGATE TOTAL AWARD MIGHT BE MADE, PARAGRAPH 10, ABOVE, REQUIRES THAT AWARD BE MADE ON THE BASIS OF ADVANTAGE TO THE GOVERNMENT WHICH WOULD ACCRUE BY ACCEPTANCE OF "ANY ITEM OR COMBINATION OF ITEMS OF A BID" UNLESS OTHERWISE PRECLUDED BY THE BIDDER ITSELF. NEITHER DILLARD NOR HAWKINS RESTRICTED ACCEPTANCE OF THEIR BIDS ON AN "ALL OR NONE" BASIS. CLEARLY, AN ADVANTAGE TO THE GOVERNMENT RESULTED WHEN IT MADE SEPARATE ITEM AWARDS AT A SAVINGS OF $2,693 OVER THE COST OF A TOTAL AGGREGATE AWARD TO HAWKINS AS THE LOWEST AGGREGATE BIDER.

IN OUR OPINION, THE GOVERNMENT, UNDER THE INVITATION, RESERVED THE RIGHT NOT TO MAKE AN AWARD IN THE AGGREGATE TO ONE BIDDER WHEN IT WOULD BE MORE COSTLY THAN COMBINATION AWARDS ON AN ITEM BY ITEM BASIS. ONE OF THE "OTHER FACTORS" IMPLICIT IN PARAGRAPH 10 IS THE POSSIBILITY THAT BIDDERS WOULD SUBMIT BIDS ON CERTAIN ITEMS, WITHOUT QUALIFICATION THAT ACCEPTANCE MUST BE MADE ON AN "ALL OR NONE" BASIS, WHICH, IN COMBINATION, ARE LOWER THAN ANY BID IN THE AGGREGATE, EVEN THOUGH BID PRICES ON SOME INDIVIDUAL ITEMS MIGHT BE HIGHER THAN THOSE PRICES MAKING UP A LOWEST AGGREGATE BID.

IF BIDDERS HAD DOUBTS AS TO WHETHER AWARDS UNDER THE INVITATION WOULD BE MADE ON AN ITEM BY ITEM BASIS OR ON AN AGGREGATE BASIS, THEY WERE REQUIRED BY PARAGRAPH 1 OF THE INSTRUCTIONS TO BIDDERS TO REQUEST AN EXPLANATION IN WRITING IN SUFFICIENT TIME TO PERMIT A REPLY THERETO TO REACH BIDDERS BEFORE THE SUBMISSION OF THEIR BIDS.

THE FACT THAT THE BID SCHEDULE PROVIDED A SPACE FOR "TOTAL, ALL ITEMS" DID NOT PRECLUDE SEPARATE ITEM AWARDS. A TOTAL BID FIGURE SERVED ONLY AS AN AID TO EVALUATION IN DETERMINING WHETHER AN AGGREGATE AWARD WOULD, OR WOULD NOT BE, MORE ADVANTAGEOUS TO THE GOVERNMENT,"PRICE AND OTHER FACTORS CONSIDERED.' THE BIDS AS SUBMITTED BY DILLARD AND HAWKINS DID NOT INDICATE THAT ANY ERROR WAS MADE IN ARRIVING AT ITEM BID PRICES OR TOTAL BID PRICES. NEITHER HAS ANY ERROR IN BID BEEN ALLEGED; ONLY THAT THEY WERE MISLEAD BY THE INVITATION TERMS. HOWEVER, INFORMED AS THEY WERE, BOTH DILLARD AND HAWKINS BID ON THE BASIS THAT THE GOVERNMENT HAD THE OPTION TO MAKE COMBINATION OR AGGREGATE AWARDS WHICHEVER MIGHT BE MORE ADVANTAGEOUS TO THE GOVERNMENT. AS REPORTED, THE CONTRACTING OFFICER CONSIDERED A COMBINATION AWARD BY INDIVIDUAL ITEMS TO BE IN THE BEST INTERESTS OF THE GOVERNMENT FROM A PRICE STANDPOINT. WE FIND NO BASIS TO DISAGREE WITH THAT DETERMINATION. SEE B-149267, JUNE 29, 1962, WHEREIN THERE WAS CONSIDERED THE EFFECT OF PARAGRAPH 10 OF THE INSTRUCTIONS TO BIDDERS IN CONNECTION WITH A BID OF THE DOLLARD COMPANY. IN OUR OPINION, THEREFORE, THE AWARDS MADE TO DILLARD AND HAWKINS MAY NOT BE QUESTIONED AS LEGALLY OBJECTIONABLE. IN VIEW THEREOF, THE QUESTION REGARDING THE RESERVATION OF FUNDS RAISED IN THE LAST PARAGRAPH ON PAGE 2 OF THE MARCH 25, 1964, LETTER NEED NOT BE CONSIDERED.