B-155985, JUN. 2, 1965

B-155985: Jun 2, 1965

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED FEBRUARY 5. WHICH WAS ISSUED ON DECEMBER 31. IN RESPONSE TO THE INVITATION THREE BIDS WERE RECEIVED AND OPENED ON JANUARY 18. 396.20 AND THE OTHER TWO BIDS WERE $268. IN EVALUATING THE BIDS THE DEPARTMENT OF THE ARMY DETERMINED THAT SINCE YOUR BID OFFERED ONLY 10 DAYS FOR THE ACCEPTANCE THEREOF IT WAS NOT RESPONSIVE AND WOULD HAVE TO BE REJECTED. THE BASIS OF YOUR PROTEST IS THAT SINCE BIDS WERE NOT OPENED UNTIL JANUARY 18. THE INVITATION REQUIREMENT THAT ALL BIDS MUST GRANT A 15-DAY ACCEPTANCE PERIOD WAS IMPOSSIBLE OF FULFILLMENT IN VIEW OF THE GOVERNMENT'S COMMITMENT IN THE INVITATION TO GIVE THE SUCCESSFUL BIDDER NOT LESS THAN 7 DAYS' NOTICE OF AWARD PRIOR TO THE START OF THE CONTRACT.

B-155985, JUN. 2, 1965

TO EXPORT PACKING AND CRATING COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED FEBRUARY 5, 1965, AND TO YOUR LETTER DATED FEBRUARY 10, 1965, WITH ENCLOSURES, PROTESTING THE ACTION TAKEN BY THE DEPARTMENT OF THE ARMY UNDER INVITATION NO. AMC (M) 30 -358-65-43.

THE INVITATION, WHICH WAS ISSUED ON DECEMBER 31, 1964, BY THE U.S. ARMY TERMINAL COMMAND, ATLANTIC CONTRACTS DIVISION, BROOKLYN, NEW YORK, SOLICITED BIDS FOR THE PROCESSING, PRESERVATION AND PACKAGING, FOR OVERSEAS SHIPMENT, OF ALL SUPPLIES AS MAY BE ALLOCATED BY THE GOVERNMENT DURING THE PERIOD BEGINNING FEBRUARY 1, 1965, AND ENDING JANUARY 31, 1966. THE INVITATION PROVIDED THAT BIDS SHALL OFFER THE GOVERNMENT 15 DAYS FOR THE ACCEPTANCE THEREOF; ALSO, THAT THE GOVERNMENT WOULD GIVE THE SUCCESSFUL BIDDER NOT LESS THAN SEVEN DAYS' NOTICE OF AWARD PRIOR TO THE START OF THE CONTRACT. IN RESPONSE TO THE INVITATION THREE BIDS WERE RECEIVED AND OPENED ON JANUARY 18, 1965. YOU SUBMITTED THE LOW BID IN THE AMOUNT OF $256,396.20 AND THE OTHER TWO BIDS WERE $268,410.50 AND $504,627.47. IN EVALUATING THE BIDS THE DEPARTMENT OF THE ARMY DETERMINED THAT SINCE YOUR BID OFFERED ONLY 10 DAYS FOR THE ACCEPTANCE THEREOF IT WAS NOT RESPONSIVE AND WOULD HAVE TO BE REJECTED. THEREFORE, BY TELEGRAM DATED JANUARY 22, 1965, THE CONTRACTING OFFICER NOTIFIED THE SECOND LOW BIDDER, THE BI STATE PACKING CORPORATION, NEW YORK, NEW YORK, THAT THE GOVERNMENT HAD ACCEPTED ITS BID IN THE AMOUNT OF $268,410.50.

THE BASIS OF YOUR PROTEST IS THAT SINCE BIDS WERE NOT OPENED UNTIL JANUARY 18, 1965, FOR A PROPOSED CONTRACT COMMENCEMENT DATE OF FEBRUARY 1, 1965, THE INVITATION REQUIREMENT THAT ALL BIDS MUST GRANT A 15-DAY ACCEPTANCE PERIOD WAS IMPOSSIBLE OF FULFILLMENT IN VIEW OF THE GOVERNMENT'S COMMITMENT IN THE INVITATION TO GIVE THE SUCCESSFUL BIDDER NOT LESS THAN 7 DAYS' NOTICE OF AWARD PRIOR TO THE START OF THE CONTRACT. YOU POINT OUT THAT IN ORDER TO COMPLY WITH BOTH THE EFFECTIVE CONTRACT DATE OF FEBRUARY 1, 1965, AND THE 7 DAYS' NOTICE REQUIREMENT, THE GOVERNMENT WOULD HAVE TO MAKE THE AWARD NOT LATTER THAN JANUARY 25, 1965, AND, THEREFORE, SINCE THIS LATTER DATE IS ONLY 7 DAYS AFTER THE BID OPENING DATE, ANY PERIOD OF TIME IN EXCESS OF SUCH 7 DAYS FOR THE ACCEPTANCE OF BIDS WAS MEANINGLESS.

INVITATION NO. AMC (M) 30-358-65-43 INCLUDED THE FOLLOWING PERTINENT TERMS AND CONDITIONS---

"BID ACCEPTANCE. BIDS OFFERING LESS THAN FIFTEEN (15) DAYS FOR ACCEPTANCE BY THE GOVERNMENT FROM THE DATE SET FOR OPENING OF BIDS WILL BE CONSIDERED NON-RESPONSIVE AND WILL BE REJECTED.

"PREPARATION OF BIDS, EVALUATION AND AWARD

"D. AWARD WILL BE MADE ON THE BASIS OF THE TOTAL BID PRICE FOR ITEMS 1-25 INCL.SUCCESSFUL BIDDER WILL BE GIVEN NOT LESS THAN SEVEN DAYS NOTICE OF AWARD PRIOR TO START OF CONTRACT.'

IT IS AXIOMATIC THAT A BID MAY BE CONSIDERED FOR AWARD ONLY IF IT COMPLIES IN ALL MATERIAL RESPECTS WITH THE TERMS OF THE INVITATION. SEE 17 COMP. GEN. 554. IT IS ALSO WELL ESTABLISHED THAT A PROVISION IN AN INVITATION SUCH AS HERE, REQUIRING THAT A BID TO BE CONSIDERED FOR AWARD MUST REMAIN AVAILABLE FOR ACCEPTANCE FOR A DESIGNATED PERIOD OF TIME, IS A MATERIAL REQUIREMENT AND THAT FAILURE TO CONFORM THEREWITH RENDERS THE BID NONRESPONSIVE. 39 COMP. GEN. 779; B-144748, MARCH 29, 1961; B-148399, JULY 9, 1962; B-150611, FEBRUARY 25, 1963; B 152832, JANUARY 20, 1964; B- 154793, SEPTEMBER 21, 1964; B-154728, SEPTEMBER 28, 1964. IT IS OBVIOUS FROM THE REPORT RECEIVED FROM THE DEPARTMENT OF THE ARMY IN THIS CASE THAT THE CONTRACTING OFFICER RELIED SOLELY UPON THIS GENERALLY ACCEPTED DOCTRINE IN REJECTING YOUR BID--- WHICH ALLOWED ONLY A 10-DAY PERIOD FOR ACCEPTANCE INSTEAD OF THE 15 DAYS REQUIRED--- AND AWARDING THE CONTRACT TO THE BI-STATE PACKING CORPORATION. IN VIEW OF THIS, AND OF THE MANDATORY LANGUAGE OF THE "BID ACCEPTANCE" PROVISION OF THE INVITATION THAT BIDS OFFERING ANY LESSER PERIOD OF TIME THAN 15 DAYS WILL BE REJECTED AS BEING NONRESPONSIVE, THERE WOULD APPEAR TO BE NO BASIS FOR OUR OFFICE TO CONCLUDE THAT THE ACTION TAKEN BY THE CONTRACTING OFFICER WAS ILLEGAL.

ADMITTEDLY, WHEN THERE IS CONSIDERED THE FACT THAT NOTICE OF AWARD OF THE CONTRACT TO THE BI-STATE PACKING CORPORATION IN THIS PARTICULAR CASE WAS ISSUED ON JANUARY 22, 1965, OR ONLY 4 DAYS AFTER BIDS WERE OPENED ON JANUARY 22, 1965, THERE MAY BE SOME QUESTION AS TO WHETHER THE SUBJECT REQUIREMENTS OF THE INVITATION WERE SET FORTH IN THE MOST PRUDENT MANNER. HOWEVER, IT MUST BE STRESSED THAT WHEN THE ADVISABILITY OF USING SUCH TIME REQUIREMENTS IN INVITATIONS IS QUESTIONED, FOREMOST FOR CONSIDERATION IS THE ALLOWANCE OF SUCH TIME AS MAY BE NEEDED FOR THE PRACTICAL OR USEFUL SOLUTION OF ANY PROBLEMS WHICH MIGHT BE PRESENT OR ARISE PRIOR TO THE TIME THAT AN AWARD OF CONTRACT IS MADE. OBVIOUSLY, CONSIDERATION OF THE USE OF SUCH REQUIREMENTS GENERALLY MUST BE GIVEN AT THE TIME THE INVITATION IS PREPARED AND THE FACT THAT IT LATER MAY DEVELOP THAT THE NEED THEREFOR WAS UNNECESSARY IS OF NO LEGAL CONSEQUENCE. AS OUR OFFICE EXPLAINED IN B- 144748, APRIL 14, 1961:

"THE FACT THAT BIDS UNDER PARTICULAR INVITATIONS MAY BE EVALUATED AND AWARD MADE BEFORE EXPIRATION OF THE STATED ACCEPTANCE PERIOD IS NOT SIGNIFICANT SINCE THE GOVERNMENT AS A CONTRACTOR IS ENTITLED TO PRESCRIBE REASONABLE CONDITIONS UNDER WHICH BIDS MUST BE SUBMITTED FOR CONSIDERATION. THE BID ACCEPTANCE PERIOD STATED IN THE INVITATION OR INVITATIONS REPRESENTS ONLY AN ESTIMATE OF THE TIME REQUIRED BY THE GOVERNMENT TO EFFECTUATE A LEGAL AND BINDING AWARD. THE GOVERNMENT IS NOT LEGALLY REQUIRED TO MAKE AN AWARD ON ANY PARTICULAR DAY FALLING WITHIN THE BID ACCEPTANCE PERIOD, BUT ONLY TO MAKE AN AWARD TO A RESPONSIVE BIDDER WITHIN THE ACCEPTANCE PERIOD SPECIFIED IN THE INVITATION AND CONFORMING BIDS.'

WHILE YOU INDICATE THAT YOU BELIEVE THAT THE CONTRACT WOULD HAVE HAD TO BE AWARDED BY JANUARY 25, 1965, IN VIEW OF THE FEBRUARY 1 COMMENCEMENT DATE AND THE PROVISION FOR NOTICE OF AWARD 7 DAYS PRIOR TO THE START OF THE CONTRACT, THE ADMINISTRATIVE OFFICE HAS INDICATED THAT ALTHOUGH THE TERM OF THE CONTRACT IS SHOWN AS 1 YEAR, THE ACTUAL START OF WORK UNDER THE CONTRACT, WHICH IS A REQUIREMENT CONTRACT, MIGHT COMMENCE LATER THAN FEBRUARY 1 AND IT CONSIDERS THE "START OF ONTRACT" TO MEAN THE PLACING OF THE FIRST ORDER FOR WORK UNDER THE CONTRACT AND CONSTRUES THE INVITATION ONLY AS REQUIRING 7 DAYS' NOTICE BEFORE PLACING SUCH ORDER.

WE BELIEVE THAT OUR RECENT DECISION OF MARCH 29, 1965, B-156163, IS PERTINENT TO THIS SITUATION. IN THAT CASE, THE LOW BID FOR A REQUIREMENTS CONTRACT FOR MILK AND RELATED ITEMS COMMENCING MARCH 1, 1965, AND ENDING AUGUST 31, 1965, AND PROVIDING FOR 24 HOURS' NOTICE BEFORE DELIVERIES ARE REQUIRED, PROVIDED A 26-DAY ACCEPTANCE PERIOD WHEN THE INVITATION, AS AMENDED, REQUIRED A 30-DAY PERIOD. IT WAS CONTENDED BY THE LOW BIDDER WHOSE BID HAD BEEN REJECTED THAT SINCE THE BID OPENING WAS ON FEBRUARY 2 AND PERFORMANCE WAS TO COMMENCE ON MARCH 1, IT WAS OBVIOUS THAT AN AWARD HAD TO BE MADE BEFORE MARCH 1 AND THAT THE 26 DAYS PROVIDED WAS THEREFORE ADEQUATE. IT WAS OBSERVED TOO THAT THE AWARD WAS ACTUALLY MADE ON FEBRUARY 10, ONLY 8 DAYS AFTER BID OPENING.

IN OUR DECISION WE COMMENTED THAT THE BID ACCEPTANCE PERIOD PROVIDED BY THE CONTRACTING OFFICER BEYOND THE DATE SET FOR COMMENCEMENT OF PERFORMANCE WAS UNWISE. WE STATED FURTHER THAT---

"ALTHOUGH HINDSIGHT INDICATES OTHERWISE, CONCEIVABLY THE AGENCY COULD HAVE MADE AWARD AFTER MARCH 1, 1965, WITHOUT CHANGING THE DATES FOR DELIVERY SINCE THE INVITATION MERELY STATED THAT MILK AND/OR RELATED ITEMS WOULD BE ORDERED DURING THE PERIOD BEGINNING MARCH 1, 1965, AND ENDING AUGUST 31, 1965. IT DID NOT STATE THAT DELIVERY WOULD IN FACT BE REQUIRED ON MARCH 1, 1965, NOR WAS THE GOVERNMENT OBLIGATED TO PURCHASE ANY SPECIFIC QUANTITY OF MILK DAILY.'

THE INVITATION UNDER WHICH YOU ARE PROTESTING LIKEWISE DOES NOT STATE THAT THE WORK WILL ACTUALLY BEGIN ON FEBRUARY 1 AND PROVIDES ONLY THAT WORK MAY BE ORDERED FROM TIME TO TIME. NEITHER DOES THE INVITATION PROVIDE THE AMOUNT OF WORK WHICH MAY BE REQUIRED AT ANY TIME.

THE DECISION IN B-156163 CONCLUDED AS FOLLOWS:

"SINCE WE ARE NOW CONFRONTED WITH A SITUATION WHERE THERE IS A VALID AND BINDING CONTRACT, WE DO NOT BELIEVE THAT CANCELLATION AT THIS TIME WOULD BE IN THE GOVERNMENT'S BEST INTEREST.'

WE SEE NO REASON FOR ANY DEPARTURE FROM THE CONCLUSION WHICH WAS REACHED IN THE CITED CASE. WE ARE AWARE THAT YOU HAVE SUGGESTED THAT RELIEF BE ACCORDED YOU UNDER PUBLIC LAW 85-804 ON THE BASIS THAT BOTH YOU AND THE CONTRACTING OFFICER MADE A MUTUAL MISTAKE IN THE ACCEPTANCE PERIOD--- YOU IN OFFERING A PERIOD TOO SHORT IN YOUR BID AND HE IN REQUIRING A PERIOD TOO LONG IN THE INVITATION FOR BIDS. HOWEVER, THE PROVISIONS OF THAT STATUTE ARE NOT APPLICABLE TO THIS KIND OF A SITUATION BUT RATHER TO ONE WHERE MISTAKES HAVE BEEN MADE BY A CONTRACTOR WHO HAS AN EXISTING CONTRACT WITH THE GOVERNMENT. IN ANY EVENT, OUR OFFICE HAS NO AUTHORITY TO GRANT ANY RELIEF UNDER PUBLIC LAW 85-804.