B-155166, NOV. 16, 1964

B-155166: Nov 16, 1964

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TO THE HONORABLE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO THE LETTER DATED OCTOBER 8. AWARD IS BEING HELD IN ABEYANCE PENDING DISPOSITION OF THE PROTEST. SCHEDULE "C" OF SAID INVITATION INCLUDED FOUR ITEMS AS FOLLOWS: "* * * ITEM 1 CALLED FOR A BASE BID UNDER WHICH A LUMP SUM PRICE WAS TO BE SUBMITTED FOR ALL WORK SPECIFIED IN THE TECHNICAL PROVISIONS AND SHOWN ON THE DRAWINGS FURNISHED WITH THE INVITATION. UNDER WHICH A LUMP SUM PRICE WAS TO BE SUBMITTED FOR ALL WORK TO REPLACE EXISTING CONDUCTORS BETWEEN CERTAIN NUMBERED POLES. UNDER WHICH A LUMP SUM PRICE WAS TO BE SUBMITTED FOR FURNISHING AND INSTALLING FIVE NEW EIGHT FOOT ALUMINUMMAST ARMS. THE FOLLOWING STATEMENT: "THE ADDITIVE ITEMS LISTED BELOW ARE IN THE ORDER OF PRIORITY TO BE AWARDED.'.

B-155166, NOV. 16, 1964

TO THE HONORABLE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO THE LETTER DATED OCTOBER 8, 1964, AND ENCLOSURES, FROM THE CHIEF, PROCUREMENT OPERATIONS DIVISION, REGARDING THE PROTEST OF POLYPHASE CONTRACTING CORPORATION AGAINST THE PROPOSED AWARD OF A CONTRACT TO HYER CONSTRUCTION COMPANY, INC., BY STEWARD AIR FORCE BASE UNDER INVITATION FOR BIDS NO. 30-603-65-7. AWARD IS BEING HELD IN ABEYANCE PENDING DISPOSITION OF THE PROTEST.

THE INVITATION REQUESTED BIDS FOR FURNISHING ALL LABOR, EQUIPMENT, AND MATERIALS TO PERFORM ALL WORK REQUIRED FOR REPLACING EXISTING ELECTRICAL POWER POLES AND STREET LIGHTING FOR BRUENING ROAD AT THE BASE. SCHEDULE "C" OF SAID INVITATION INCLUDED FOUR ITEMS AS FOLLOWS:

"* * * ITEM 1 CALLED FOR A BASE BID UNDER WHICH A LUMP SUM PRICE WAS TO BE SUBMITTED FOR ALL WORK SPECIFIED IN THE TECHNICAL PROVISIONS AND SHOWN ON THE DRAWINGS FURNISHED WITH THE INVITATION, BUT NOT INCLUDED IN ADDITIVE ITEMS A, B, AND C. ITEM 2 CALLED FOR ADDITIVE ITEM A, UNDER WHICH A LUMP SUM PRICE WAS TO BE SUBMITTED FOR ALL WORK TO REPLACE EXISTING CONDUCTORS BETWEEN CERTAIN NUMBERED POLES, AS INDICATED IN THE DRAWINGS. ITEM 3 CALLED FOR ADDITIVE ITEM B, UNDER WHICH A LUMP SUM PRICE WAS TO BE SUBMITTED FOR FURNISHING AND INSTALLING FIVE NEW EIGHT FOOT ALUMINUMMAST ARMS, INCLUDING FIVE NEW MERCURY-VAPOR STREET LIGHTS, AS SPECIFIED IN PARAGRAPH 2.13 OF THE TECHNICAL PROVISIONS, IN LIEU OF REINSTALLING FIVE EXISTING STREET LIGHTS AND BRACKETS. ITEM 4 CALLED FOR ADDITIVE ITEM C. THE PROTEST CONCERNS THE INTERPRETATION PLACED ON THIS ITEM. IT READS AS FOLLOWS:

"THE BIDDER SHALL SUBMIT A LUMP SUM PRICE TO BE DEDUCTED OR ADDED FOR DELETING THE FURNISHING AND INSTALLATION OF NINE NEW POLES (NO. 328 TO NO. 336 INCLUSIVE) REQUIRED UNDER BASE BID, AND ALSO DELETING ADDITIVE ITEM "B" IN ITS ENTIRETY AND IN LIEU THEREOF FURNISH AND INSTALL EIGHT ALUMINUM POLES WITH ALUMINUM MAST ARMS INCLUDING EIGHT MERCURY VAPOR STREET LIGHTS AS SPECIFIED IN PARAGRAPH 2.13 OF THE TECHNICAL PROVISIONS, COMPLETE, IN STRICT ACCORDANCE WITH SECTION II OF THE TECHNICAL PROVISIONS AND SHEET 2 OF DWG NO. STW 812-003.'"

THE BID SCHEDULE CONTAINED, IMMEDIATELY FOLLOWING ITEM 1, THE FOLLOWING STATEMENT:

"THE ADDITIVE ITEMS LISTED BELOW ARE IN THE ORDER OF PRIORITY TO BE AWARDED.' ADDITIONALLY, FOLLOWING ITEM 4, THE SCHEDULE STATED:

"AWARD: FOR PURPOSE OF LOW BID EVALUATION, THE GOVERNMENT WILL ADD TO BASIC BID IN ORDER LISTED ABOVE AS MANY ADDITIVE ALTERNATES AS CAN BE ACCEPTED WITHIN AVAILABLE FUNDS.'

FOUR BIDS WERE RECEIVED, SUMMARIZES AS FOLLOWS:

TABLE

BASE BID ADD.'A" ADD.'B" ADD.'C" TOTAL HYER $11,500 $575.00 $1,150

$5,750 $18,975 POLYPHASE 15,200 400.00 900 2,300 18,800 VALENTI

24,078 407.00 792 7,086 32,363 DALE 13,332 757.00 8005,687 20,656

ON THE BASIS OF THE BIDS RECEIVED IT HAS BEEN DETERMINED THE FUNDS AVAILABLE FOR THE PROJECT ARE ADEQUATE FOR ALL THE WORK CALLED FOR UNDER THE BASE BID AND ADDITIVE ITEMS. ALTHOUGH THE TOTAL BID PRICE OF POLYPHASE IS THE LOWEST RECEIVED, THE CONTRACTING OFFICER PROPOSES TO AWARD A CONTRACT TO HYER, FOR ITEMS 1, 2 AND 4, THAT IS, THE BASE BID AND ADDITIVE ITEMS A AND C, FOR A TOTAL CONTRACT PRICE OF $17,825, AS COMPARED TO A TOTAL BID OF $17,900 BY POLYPHASE FOR THE IDENTICAL ITEMS. THE PROPOSED AWARD WOULD OMIT ITEM 3 (ADDITIVE ITEM B) THEREBY RESULTING IN HYER BEING THE LOW BIDDER RATHER THAN SECOND LOWEST ON THE BASIS OF ALL ITEMS.

THE CONTRACTING OFFICER'S DETERMINATION THAT ADDITIVE ITEM B SHOULD BE OMITTED FROM THE BIDS IN EVALUATING THEM IS BASED UPON THE FOLLOWING INTERPRETATION OF THE INVITATION PROVISIONS:

"* * * THE POSITION OF THIS OFFICE IS THAT "ADDITIVE ITEM C" IS AN ALTERNATE TO "ADDITIVE ITEM B" AND A PORTION OF THE "BASE BID.' THE "AWARD" PARAGRAPH CLEARLY TERMS THESE ADDITIVES AS ,ADDITIVE ALTERNATES" AND "ADDITIVE ITEM C" CLEARLY STATES THAT THE TOTAL TO BE INDICATED THEREUNDER SHALL REPRESENT "A LUMP SUM ... FOR DELETING ... NINE NEW POLES REQUIRED UNDER BASE BID, AND ALSO FOR DELETING "ADDITIVE ITEM B" IN ITS ENTIRETY AND "IN LIEU THEREOF FURNISH....'"

IN OTHER WORDS, HE READS ADDITIVE ITEM C AS MEANING THAT IF FUNDS ARE AVAILABLE FOR THE WORK REQUIRED THEREUNDER, THEN IT WILL BE SUBSTITUTED FOR THE WORK REQUIRED BY ADDITIVE ITEM B AND A PORTION OF THE BASE BID. THEREFORE, AS THE FUNDS ARE ADEQUATE TO INCLUDE ADDITIVE ITEM C, THE AMOUNT BID ON ADDITIVE ITEM B SHOULD BE DISREGARDED IN EVALUATING THE BIDS. IT IS NOT EXPLAINED HOW THE SUBSTITUTED PORTION OF THE BASE BID ALSO DELETED BY ITEM C IS TO BE CONSIDERED IN EVALUATING THE BIDS.

THE PROTESTING BIDDER VIEWS THE EFFECT OF THE LANGUAGE OF THE ITEM IN QUESTION AS GOING TO THE METHOD OF COMPUTING THE AMOUNT OF THE BID THEREUNDER, AND ILLUSTRATES THIS BY THE FOLLOWING EXAMPLE:

"* * * AS AN EXAMPLE, UNDER "ADDITIVE ITEM "C" " IF THE BIDDER ESTIMATED THAT THE COST OF INSTALLING THE ALUMINUM POLES, MAST ARMS AND LIGHTS WOULD COST TEN THOUSAND DOLLARS ($10,000.00), THAT HE SHOULD, IN ACCORDANCE WITH THE INSTRUCTIONS IN THAT PARAGRAPH, SUBTRACT THE COST OF THE ORIGINAL 9 WOODEN POLES AND THE COST OF THE 5 MERCURY LIGHT FIXTURES AND BRACKET ARMS. IF THE FIRST AMOUNTED TO FIFTEEN HUNDRED DOLLARS ($1500.00), AND THE SECOND AMOUNTED TO TWO THOUSAND DOLLARS ($2,000.00), THEN THE NET TO BE BID UNDER "ADDITIVE ITEM "C" " WOULD BE SIXTY FIVE HUNDRED DOLLARS ($6,500.00).'

APPARENTLY THE CONTRACTING OFFICER DOES NOT CONSIDER THIS AN UNREASONABLE INTERPRETATION IN VIEW OF THE FOLLOWING STATEMENT FROM HIS REPORT:

"HENCE, AS TO "ADDITIVE ITEM C" THE LUMP SUM ARRIVED AT BY THE POTENTIAL BIDDER FOR THE COST OF "EIGHT ALUMINUM POLES WITH ALUMINUM MAST ARMS, INCLUDING EIGHT MERCURY-VAPOR STREET LIGHTS" MUST BE REDUCED, IN ARRIVING AT ADDITIVE ITEM C'S TOTAL, BY THE VALUE THE BIDDER PLACES ON THE NINE WOODEN POLES PREVIOUSLY COMPUTED IN ARRIVING AT THE BASE BID AND BY THE VALUE OF THE FIVE ALUMINUM MAST ARMS AND FIVE MERCURY-VAPOR STREET LIGHTS, AS PREVIOUSLY COMPUTED IN "ADDITIVE ITEM B.'" POLYPHASE ALSO CONTENDS THAT ON THE BASIC OF ITS METHOD OF COMPUTING ITS BID ON ADDITIVE ITEM C, THE OMISSION OF ADDITIVE ITEM B FROM EVALUATION OF THE BIDS RESULTS IN THE TOTAL BID PRICE BEING LESS THAN INTENDED BY THE AMOUNT BID ON ADDITIVE ITEM B.

IN THE LIGHT OF THE TWO SPECIFIC STATEMENTS IN THE INVITATION AS TO THE EVALUATION AND AWARD OF ALTERNATES IN THE ORDER STATED, WE ARE FORCED TO CONCLUDE THAT THE LANGUAGE OF ITEM 4 CREATED SUCH AN AMBIGUITY OR INCONSISTENCY AS TO PRECLUDE A VALID AWARD FOR THE TOTAL WORK DESIRED UNDER SCHEDULE C. BASIC TO THE COMPETITIVE BIDDING SYSTEM IS THE NECESSITY THAT ALL BIDDERS HAVE THE OPPORTUNITY TO BID 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 THE BIDS BE EVALUATED IN ACCORDANCE WITH THE METHOD SPECIFICALLY PROVIDED FOR IN THE INVITATION. 38 COMP. GEN. 550. THE INVITATION CLEARLY STATES, AS QUOTED ABOVE FROM PAGE 2 OF SCHEDULE "C," THAT FOR PURPOSES OF DETERMINING THE LOW BID, AS MANY ADDITIVE ALTERNATES AS MAY BE ACCEPTED WITHIN AVAILABLE FUNDS WILL BE ADDED TO THE BASE BID IN THE ORDER LISTED. IN ADDITION, TO THE SAME EFFECT IS THE ADDITIONAL LANGUAGE: "THE ADDITIVE ITEMS LISTED BELOW ARE IN THE ORDER OF PRIORITY TO BE AWARDED.' WHILE IT MAY HAVE BEEN THE INTENTION OF THE GOVERNMENT TO DETERMINE THE LOW BID BY ADDING EITHER ADDITIVE ITEM A, A AND B, OR A AND C, DEPENDING ON THE FUNDS AVAILABLE, THIS UNFORTUNATELY IS NOT THE METHOD OF EVALUATION STATED, AND WE DO NOT BELIEVE THAT IT CAN BE PRESUMED THAT THE RESPECTIVE AMOUNTS OF THE ITEM BIDS WERE INTENDED TO BE AVAILABLE ON THE BASIS PROPOSED TO BE USED BY THE CONTRACTING OFFICER FOR AWARD. THE ONLY PERMISSIBLE BASIS OF EVALUATION AND AWARD MUST INCLUDE THE BID PRICE FOR THE BASE PLUS ALL ADDITIVE ITEMS, IN WHICH CASE POLYPHASE WOULD BE ENTITLED TO THE AWARD AS THE LOWEST BIDDER; HOWEVER, IN VIEW OF THE POSSIBILITY THAT AWARD OF A CONTRACT TO POLYPHASE ON THAT BASIS MIGHT RESULT IN THE GOVERNMENT PAYING FOR AN ITEM, ADDITIVE ITEM B, WHICH IT NEITHER NEEDS NOR INTENDS TO PROCURE, OR PAYING MORE THAN INTENDED BY OTHER BIDDERS FOR THE WORK ACTUALLY AWARDED, REJECTION OF ALL BIDS AND READVERTISEMENT IS NECESSARY. WHILE WE ARE COGNIZANT OF THE FACT THAT SUCH ACTION, AFTER BIDS ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITORS' PRICES, IS A SERIOUS MATTER AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS, 39 COMP. GEN. 396, WE THINK THAT SUCH "COGENT REASONS" ARE PRESENT IN THE INSTANT CASE BY REASON OF THE AMBIGUITY AND UNCERTAINTY OF EVALUATION CREATED BY THE INCONSISTENT PROVISIONS OF THE INVITATION.

ACCORDINGLY, THE INVITATION SHOULD BE CANCELLED AND THE REQUIREMENTS READVERTISED.