B-156331, MAY 11, 1965, 44 COMP. GEN. 698

B-156331: May 11, 1965

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1965: REFERENCE IS MADE TO A LETTER DATED APRIL 12. OR WITHDRAWALS RECEIVED AFTER THE TIME SET FOR RECEIPT OF BIDS ARE LATE AND MAY BE CONSIDERED ONLY IF THEIR LATE RECEIPT MAY BE WAIVED UNDER INSTRUCTION NO. 7 OF INSTRUCTIONS TO BIDDERS (STANDARD FORM 22). OR WITHDRAWALS RECEIVED AFTER THE TIME SET FOR OPENING OF BIDS ARE LATE AND MAY BE CONSIDERED ONLY IF THEIR LATE RECEIPT MAY BE WAIVED UNDER INSTRUCTION NO. 7 OF INSTRUCTIONS TO BIDDERS (STANDARD FORM 22). LISTS OF SUBCONTRACTORS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF BIDS WILL NOT BE CONSIDERED UNLESS: (1) THEY ARE RECEIVED BEFORE AWARD IS MADE.

B-156331, MAY 11, 1965, 44 COMP. GEN. 698

BIDS - LATE - TIME AMBIGUITY TO PERMIT CONSIDERATION OF A DOWNWARD MODIFICATION OF A LOW BID RECEIVED AFTER THE TIME SET FOR RECEIPT OF BIDS AND MODIFICATIONS BUT PRIOR TO BID OPENING UNDER AN INVITATION CONTAINING CONFLICTING INSTRUCTIONS AS TO THE TIME MODIFICATIONS COULD BE CONSIDERED WOULD NOT ONLY BE UNFAIR TO THE OTHER BIDDERS BUT, BECAUSE OF THE AMBIGUITY, THE GOVERNMENT HAS NOT RECEIVED THE BENEFITS OF FULL AND FREE COMPETITION AND, THEREFORE, THE INVITATION SHOULD BE CANCELED.

TO THE ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, MAY 11, 1965:

REFERENCE IS MADE TO A LETTER DATED APRIL 12, 1965, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, GENERAL SERVICES ADMINISTRATION, CONCERNING THE PROTEST OF ARONOFF CONSTRUCTION COMPANY, INC., AGAINST THE AWARD OF A CONTRACT TO ANY BIDDER OTHER THAN ITSELF FOR REMODELING AND CONVERSION, PHASE, I, U.S. POST OFFICE AND COURT HOUSE AND U.S. CUSTOM HOUSE (NEW), DENVER, COLORADO. AWARD HAS NOT YET BEEN MADE.

THE PROTEST CONCERNS THE DELAYED BID OPENING PROCEDURE PRESCRIBED BY GENERAL SERVICES PROCUREMENT REGULATIONS, AS PUBLISHED IN 41 CFR 5B 2.202- 70, 29 F.R. 15026-15027, WHICH REQUIRES THE LISTING OF SUBCONTRACTORS BY BIDDERS ON CONSTRUCTION PROJECTS. THAT REGULATION PROVIDES IN PERTINENT PART AS FOLLOWS:

"/F)CONTRACTING OFFICERS SHALL TREAT SEPARATE SUBMISSIONS OF LISTS OF SUBCONTRACTORS IN THE SAME MANNER AS SUBMISSIONS OF BIDS WITH RESPECT TO TIMELINESS OF RECEIPT, MODIFICATION, OR WITHDRAWAL. BIDS, MODIFICATIONS, OR WITHDRAWALS RECEIVED AFTER THE TIME SET FOR RECEIPT OF BIDS ARE LATE AND MAY BE CONSIDERED ONLY IF THEIR LATE RECEIPT MAY BE WAIVED UNDER INSTRUCTION NO. 7 OF INSTRUCTIONS TO BIDDERS (STANDARD FORM 22). LISTS OF SUBCONTRACTORS, IF SUBMITTED SEPARATELY FROM THE BID, MODIFICATIONS, OR WITHDRAWALS RECEIVED AFTER THE TIME SET FOR OPENING OF BIDS ARE LATE AND MAY BE CONSIDERED ONLY IF THEIR LATE RECEIPT MAY BE WAIVED UNDER INSTRUCTION NO. 7 OF INSTRUCTIONS TO BIDDERS (STANDARD FORM 22). ACCORDINGLY, INSTRUCTION NO. 7 OF INSTRUCTIONS TO BIDDERS SHALL BE MODIFIED AS FOLLOWS:

"LATE BIDS AND MODIFICATIONS OR WITHDRAWALS

"/A) BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR RECEIPT OF BID, AND IF SUBMITTED SEPARATELY, LISTS OF SUBCONTRACTORS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF BIDS WILL NOT BE CONSIDERED UNLESS: (1) THEY ARE RECEIVED BEFORE AWARD IS MADE; AND EITHER (2) THEY ARE SENT BY REGISTERED MAIL OR BY CERTIFIED MAIL FOR WHICH AN OFFICIAL DATED POST OFFICE STAMP (POSTMARK) ON THE ORIGINAL RECEIPT FOR CERTIFIED MAIL HAS BEEN OBTAINED, OR BY TELEGRAPH IF AUTHORIZED, AND IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO DELAY IN THE MAILS, OR DELAY BY THE TELEGRAPH COMPANY, FOR WHICH THE BIDDER WAS NOT RESPONSIBLE; OR (3) IF SUBMITTED BY MAIL (OR BY TELEGRAM IF AUTHORIZED), IT IS DETERMINED THAT THE LATE RECEIPT WAS DUE SOLELY TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION; PROVIDED, THAT TIMELY RECEIPT AT SUCH INSTALLATION IS ESTABLISHED UPON EXAMINATION OF AN APPROPRIATE DATE OR TIME STAMP (IF ANY) OF SUCH INSTALLATION, OR OF OTHER DOCUMENTARY EVIDENCE OF RECEIPT (IF READILY AVAILABLE) WITHIN THE CONTROL OF SUCH INSTALLATION OF THE POST OFFICE SERVING IT. HOWEVER, A MODIFICATION WHICH MAKES THE TERMS OF THE OTHERWISE ACCEPTABLE BID MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME IT IS RECEIVED AND MAY THEREAFTER BE ACCEPTED.

"/B)BIDDERS USING CERTIFIED MAIL ARE CAUTIONED TO OBTAIN A RECEIPT FOR CERTIFIED MAIL SHOWING A LEGIBLE, DATED POSTMARK AND TO RETAIN SUCH RECEIPT AGAINST THE CHANCE THAT IT WILL BE REQUIRED AS EVIDENCE THAT A LATE BID WAS TIMELY MAILED.

"/C) THE TIME OF MAILING OF LATE BIDS SUBMITTED BY REGISTERED OR CERTIFIED MAIL SHALL BE DEEMED TO BE THE LAST MINUTE OF THE DATE SHOWN IN THE POSTMARK ON THE REGISTERED MAIL RECEIPT OR REGISTERED MAIL WRAPPER OR ON THE RECEIPT FOR CERTIFIED MAIL UNLESS THE BIDDER FURNISHES EVIDENCE FROM THE POST OFFICE STATION OF MAILING WHICH ESTABLISHES AN EARLIER TIME. IN THE CASE OF CERTIFIED MAIL, THE ONLY ACCEPTABLE EVIDENCE IS AS FOLLOWS: (1) WHERE THE RECEIPT FOR CERTIFIED MAIL IDENTIFIES THE POST OFFICE STATION OF MAILING, EVIDENCE FURNISHED BY THE BIDDER WHICH ESTABLISHES THAT THE BUSINESS DAY OF THAT STATION ENDED AT AN EARLIER TIME, IN WHICH CASE THE TIME OF MAILING SHALL BE DEEMED TO BE THE LAST MINUTE OF THE BUSINESS DAY OF THAT STATION; OR (2) AN ENTRY IN INK ON THE RECEIPT FOR CERTIFIED MAIL SHOWING THE TIME OF MAILING AND THE INITIALS OF THE POSTAL EMPLOYEE RECEIVING THE ITEM AND MAKING THE ENTRY, WITH APPROPRIATE WRITTEN VERIFICATION OF SUCH ENTRY FROM THE POST OFFICE STATION OF MAILING, IN WHICH CASE THE TIME OF MAILING SHALL BE THE TIME SHOWN IN THE ENTRY. IF THE POSTMARK ON THE ORIGINAL RECEIPT FOR CERTIFIED MAIL DOES NOT SHOW A DATE, THE BID SHALL NOT BE CONSIDERED.'

A PRIMARY EFFECT OF THIS REGULATION IS TO AMEND THAT PORTION OF INSTRUCTION NO. 7 IN STANDARD FORM 22 UNDER WHICH A BID IS CLASSIFIED AS A LATE BID ONLY IF IT IS RECEIVED AFTER THE TIME SET FOR BID OPENING, AND TO SUBSTITUTE A PROVISION THAT "BIDS, MODIFICATIONS, OR WITHDRAWALS RECEIVED AFTER THE TIME SET FOR RECEIPT OF BIDS ARE LATE AND MAY BE CONSIDERED ONLY IF THEIR LATE RECEIPT MAY BE WAIVED UNDER INSTRUCTION NO. 7 OF INSTRUCTIONS TO BIDDERS (STANDARD FORM 22).' HOWEVER, THE REGULATION DOES NOT PURPORT TO MODIFY INSTRUCTIONS NOS. 5 AND 8 OF STANDARD FORM 22, WHICH IS ALSO REQUIRED UNDER 41 CFR 1 16.401 (E) TO BE USED FOR ADVERTISED CONSTRUCTION CONTRACTS. THOSE INSTRUCTIONS READ RESPECTIVELY AS FOLLOWS:

"5. PREPARATION OF BIDS. * * *

(D) MODIFICATIONS OF BIDS ALREADY SUBMITTED WILL BE CONSIDERED IF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS BY THE TIME SET FOR OPENING OF BIDS. TELEGRAPHIC MODIFICATIONS WILL BE CONSIDERED, BUT SHOULD NOT REVEAL THE AMOUNT OF THE ORIGINAL OR REVISED BID.

"8. WITHDRAWAL OF BIDS. BIDS MAY BE WITHDRAWN BY WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM BIDDERS PRIOR TO THE TIME SET FOR OPENING OF BIDS.'

THE INVITATION FOR BIDS, AS AMENDED, SET THE TIME FOR RECEIPT OF BIDS AS 1:30 P.M., MARCH 2, 1965, WITH THE TIME FOR BID OPENING AS 1:30 P.M., MARCH 4, 1965. IT CONTAINED STANDARD FORM 22 AS REQUIRED BY 41 CFR 1- 16.401 (E), WITH INSTRUCTION NO. 7 MODIFIED ACCORDING TO 41 CFR 5B-2.202- 70.

TWELVE BIDS WERE OPENED ON MARCH 4, 1965. THE TWO LOWEST BIDDERS AND THEIR BASE BIDS WERE: ARONOFF CONSTRUCTION COMPANY, INC.,--- $1,225,000, FRANK BRISCOE COMPANY, INC.,--- $1,208,802.

HOWEVER, ON MARCH 4, 1965, BUT PRIOR TO THE TIME SET FOR OPENING OF BIDS, ARONOFF HAD SUBMITTED A WRITTEN MODIFICATION OF ITS BID WHICH REDUCED IT TO $1,198,830. YOUR ADMINISTRATION REPORTS THAT BECAUSE SUCH MODIFICATION WAS NOT RECEIVED UNTIL AFTER THE TIME SET FOR RECEIPT OF BIDS HAD EXPIRED, IT WAS TREATED AS A LATE MODIFICATION WHICH COULD NOT BE CONSIDERED. ARONOFF CONSTRUCTION COMPANY DISPUTES SUCH CONTENTION, POINTING OUT THAT UNDER INSTRUCTION NO. 5 (D) MODIFICATIONS OF BIDS ARE PERMITTED IF RECEIVED AT THE DESIGNATED OFFICE BY THE TIME SET FOR OPENING OF BIDS.

IT THUS APPEARS THAT, BECAUSE OF A CONFLICT IN THE GOVERNING REGULATIONS, THE INVITATION CONTAINS CONFLICTING INSTRUCTIONS TO BIDDERS RELATIVE TO THE TIME BY WHICH THEY WOULD BE REQUIRED TO SUBMIT BID MODIFICATIONS IF SUCH MODIFICATIONS WERE TO BE CONSIDERED IN MAKING AN AWARD. IN VIEW OF SUCH AMBIGUITY, TOGETHER WITH THE POSSIBILITY THAT OTHER BIDDERS MAY HAVE PLACED A CONSTRUCTION ON INSTRUCTIONS NOS. 5, 7 AND 8 WHICH WAS CONTRARY TO THAT ADOPTED BY ARONOFF AND MAY THEREFORE HAVE REFRAINED FROM SUBMITTING DOWNWARD REVISIONS OF THEIR BID PRICES BETWEEN THE TIME SET FOR RECEIPT OF BIDS AND THE TIME SET FOR BID OPENING, WE MUST CONCLUDE THAT IT WOULD BE IMPROPER TO NOW ACCEPT ARONOFF'S BID AT A PRICE WHICH IS LOW ONLY BY REASON OF THE REDUCTION RESULTING FROM ITS MODIFICATION. CONVERSELY, IT IS APPARENT FROM THE FACT THAT ARONOFF (TOGETHER WITH OTHER BIDDERS SIMILARLY SITUATED WHOSE PROTESTS ARE PRESENTLY BEING CONSIDERED BY THIS OFFICE) WAS ABLE AND WILLING TO OFFER A PRICE REDUCTION PRIOR TO OPENING AND PUBLICATION OF BIDS, THAT THE GOVERNMENT HAS NOT RECEIVED, AND MAY NOT REASONABLY BE EXPECTED TO RECEIVE, THE BENEFITS OF FULL AND FREE COMPETITION UNDER AMBIGUOUS PROVISIONS SUCH AS WERE INCLUDED IN THE INVITATION.

UNDER THE CIRCUMSTANCES IT IS OUR OPINION THAT THE INVITATION IN QUESTION SHOULD BE CANCELLED.

WE UNDERSTAND THAT YOUR AGENCY HAS ALREADY TAKEN CORRECTIVE ACTION TO ASSURE THAT FUTURE SIMILAR PROCUREMENTS WHICH ARE FORMALLY ADVERTISED WILL BE BASED ON REGULATIONS, AND INSTRUCTIONS TO BIDDERS, WHICH ACCURATELY REFLECT YOUR AGENCY'S INTENTIONS WITH RESPECT TO THE TIMELINESS OF BID MODIFICATIONS WHERE DELAYED SUBCONTRACTOR LISTING IS INVOLVED. IN THIS CONNECTION, WE SHOULD LIKE TO OBSERVE THAT THE EFFECT OF THE 48 HOUR INTERVAL BETWEEN BID SUBMISSION AND BID OPENING, IF BID MODIFICATION DURING THAT PERIOD IS NOT PERMITTED, APPEARS TO BE TO GIVE BIDDERS AN OPPORTUNITY FOR SUBCONTRACT BID SHOPPING, WITHOUT ANY CORRESPONDING BENEFIT TO THE GOVERNMENT. SINCE IT WAS OUR UNDERSTANDING THAT THE PRIMARY PURPOSE OF THE SUBCONTRACTOR LISTING REQUIREMENT WAS TO ELIMINATE BID SHOPPING, IT IS SUGGESTED THAT FURTHER CONSIDERATION BE GIVEN TO THIS ASPECT OF THE PROCEDURE BEFORE NEW INVITATIONS ARE ISSUED.

IN VIEW OF THE FOREGOING IT IS UNNECESSARY TO CONSIDER THE CONTENTIONS RAISED WITH RESPECT TO THE RESPONSIVENESS OF THE RESPECTIVE LOWEST BIDDERS. THE ENCLOSURES TO THE GENERAL COUNSEL'S LETTER ARE RETURNED.