B-154703, SEP. 11, 1964

B-154703: Sep 11, 1964

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TO HYSAN PRODUCTS COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED JULY 10. WAS ISSUED ON JUNE 9. IT WAS SUBSEQUENTLY DETERMINED THAT AN AGGREGATE AWARD FOR BOTH ITEMS BY DESTINATION WOULD BE MORE APPROPRIATE. WAS PREPARED FOR ISSUANCE ON JUNE 15. THE AMENDMENT WAS NOT DISPATCHED UNTIL THE MORNING OF JUNE 17 BECAUSE OF DELAYS IN THE PRINTING THEREOF. THE PRINTING OF THIS AMENDMENT WAS ALSO DELAYED. IT WAS NOT READY FOR DISTRIBUTION UNTIL LATE ON JUNE 22. WHICH WAS ONE DAY BEFORE BID OPENING. THE CONTRACTING OFFICER WAS ON LEAVE. FEELING THAT IT WAS TOO LATE TO EXTEND THE BID OPENING DATE. WHEN THE BRANCH CHIEF MADE THIS DECISION HE WAS UNAWARE OF THE FACT THAT A MR. BROWNSTEIN OF YOUR COMPANY HAD CALLED DURING THE PRECEDING WEEK AND HAD BEEN INFORMED BY THE PURCHASING AGENT THAT THE BID OPENING DATE WAS TO BE EXTENDED.

B-154703, SEP. 11, 1964

TO HYSAN PRODUCTS COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 10, 1964, WITH ENCLOSURES, AND A TELEGRAM DATED JULY 11, 1964, REQUESTING THAT URGENT ACTION BE TAKEN TO PREVENT AWARD OF A CONTRACT UNDER GENERAL SERVICES ADMINISTRATION INVITATION FOR BIDS NO. FPNGC-W-55109-A-6-23-64.

THE INVITATION FOR BIDS, COVERING TWO STOCK ITEMS OF GENERAL PURPOSE DEODORANT, WAS ISSUED ON JUNE 9, 1964, WITH A SCHEDULED BID OPENING DATE OF JUNE 23, 1964. THE INVITATION FOR BIDS AS ORIGINALLY ISSUED CONTEMPLATED THAT AWARDS WOULD BE MADE SEPARATELY FOR EACH STOCK ITEM AT EACH DESTINATION. HOWEVER, IT WAS SUBSEQUENTLY DETERMINED THAT AN AGGREGATE AWARD FOR BOTH ITEMS BY DESTINATION WOULD BE MORE APPROPRIATE, SINCE EACH SUCCESSFUL BIDDER COULD THEN BE ASSURED OF RECEIVING AN ECONOMIC PRODUCTION RUN OF THE ITEMS.

IN VIEW OF THIS DETERMINATION, AMENDMENT NO. 1 TO THE INVITATION, WHICH PROVIDED FOR AGGREGATE AWARDS, WAS PREPARED FOR ISSUANCE ON JUNE 15. THE AMENDMENT WAS NOT DISPATCHED UNTIL THE MORNING OF JUNE 17 BECAUSE OF DELAYS IN THE PRINTING THEREOF. DUE TO THE RELATIVELY SHORT TIME REMAINING BEFORE BID OPENING (JUNE 17-23, 1964), THE CONTRACTING OFFICER INSTRUCTED THE PURCHASING AGENT HANDLING THE CASE TO PREPARE A SECOND AMENDMENT EXTENDING THE BID OPENING DATE. THE PRINTING OF THIS AMENDMENT WAS ALSO DELAYED, AND IT WAS NOT READY FOR DISTRIBUTION UNTIL LATE ON JUNE 22, WHICH WAS ONE DAY BEFORE BID OPENING.

ON JUNE 22, THE CONTRACTING OFFICER WAS ON LEAVE, AND HIS BRANCH CHIEF, FEELING THAT IT WAS TOO LATE TO EXTEND THE BID OPENING DATE, STOPPED DISTRIBUTION OF AMENDMENT NO. 2. WHEN THE BRANCH CHIEF MADE THIS DECISION HE WAS UNAWARE OF THE FACT THAT A MR. BROWNSTEIN OF YOUR COMPANY HAD CALLED DURING THE PRECEDING WEEK AND HAD BEEN INFORMED BY THE PURCHASING AGENT THAT THE BID OPENING DATE WAS TO BE EXTENDED.

ON JUNE 23, THE ELEVEN BIDS RECEIVED WERE OPENED AS SCHEDULED. THE FOLLOWING DAY A TELEGRAM WAS RECEIVED FROM YOUR COMPANY ADVISING THE GENERAL SERVICES ADMINISTRATION THAT YOU HAD NOT RECEIVED NOTIFICATION OF THE EXTENSION OF THE BID OPENING, AND THAT YOUR BID WOULD ARRIVE BY JUNE 29. THE BID, POSTMARKED JUNE 25, 1964, DID ARRIVE AS YOU PROMISED ON JUNE 29. THE ADMINISTRATIVE AGENCY DID NOT CONSIDER YOUR BID FOR AWARD BECAUSE IT WAS POSTMARKED 2 DAYS AFTER THE SCHEDULED BID OPENING, AND WAS 6 DAYS LATE IN ARRIVING AT THE AGENCY.

SINCE YOUR BID WAS MAILED AFTER THE TIME SET FOR OPENING OF THE BIDS IT COULD NOT BE CONSIDERED. SEE 40 COMP. GEN. 91. THEREFORE, THE BASIC LEGAL QUESTION FOR CONSIDERATION IN THIS CASE IS WHETHER,UNDER THE CIRCUMSTANCES RELATED ABOVE, THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WAS BEST SERVED BY DISREGARDING YOUR BID OR WHETHER ALL BIDS SHOULD HAVE BEEN REJECTED AND THE PROCUREMENT READVERTISED.

THE COURT OF CLAIMS STATED IN MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699, 719:

"* * * TO HAVE A SET OF BIDS DISCARDED AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE IS A SERIOUS MATTER, AND IT SHOULD NOT BE PERMITTED EXCEPT FOR COGENTREASONS. * * *"

THIS RULE IS RECOGNIZED IN SECTION 1-2.404-1 (A) OF THE FEDERAL PROCUREMENT REGULATIONS WHICH STATES:

"PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT, AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. * * *"

WHILE IT IS UNFORTUNATE THAT YOU WERE MISINFORMED THAT THE BID OPENING DATE WAS TO BE EXTENDED, WE THINK IT WOULD HAVE BEEN UNFAIR TO HAVE REJECTED THE BIDS OF THE OTHER ELEVEN BIDDERS WHO HAD SUBMITTED THEIR BIDS TIMELY IN STRICT ACCORDANCE WITH THE TERMS OF THE INVITATION FOR BIDS. FURTHERMORE, WE HAVE BEEN ADVISED BY THE ADMINISTRATIVE OFFICE THAT THE SUPPLIES INVOLVED WERE URGENTLY NEEDED AND THAT IF THE BIDS HAD BEEN REJECTED PROCUREMENT OF THE ITEMS WOULD HAVE BEEN DELAYED AT LEAST ANOTHER MONTH. THUS, IT APPEARS THAT REJECTION OF ALL BIDS WOULD HAVE BEEN NOT ONLY UNFAIR TO THE OTHER BIDDERS BUT ALSO WOULD NOT HAVE BEEN IN THE INTEREST OF THE GOVERNMENT. IN VIEW THEREOF, WE SEE NO LEGAL BASIS FOR CANCELING THE AWARD AND READVERTISING THE PROCUREMENT.