B-156751, JUN. 25, 1965

B-156751: Jun 25, 1965

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED MAY 11 AND 13. FOUR BIDS WERE RECEIVED AND OPENED AS SCHEDULED ON APRIL 1. THE TOTAL PRICE FOR THE MINIMUM QUANTITY OF 533 UNITS WAS $15. 963.35 AND THE TOTAL PRICE FOR THE MAXIMUM QUANTITY OF 733 UNITS WAS $21. SINCE THE BID OF YOUR COMPANY WAS NOT SIGNED. IT WAS REJECTED AND THE CONTRACT AWARD WAS MADE TO THE SONOTONE CORPORATION. SONOTONE'S TOTAL PRICE FOR 533 UNITS WAS $20. 989.54 AND ITS TOTAL PRICE FOR 733 UNITS WAS $28. THE UNSIGNED BID WAS TYPEWRITTEN EXCEPT AT PAGE 1 OF THE BIDDING SCHEDULE WHERE HANDWRITTEN UNIT AND TOTAL PRICES WERE LISTED AND AT PAGE 6 OF THE BIDDING SCHEDULE WHERE THE WORDS "AS REQUIRED" WERE HANDWRITTEN WITH REFERENCE TO PROPOSED DELIVERY SCHEDULE.

B-156751, JUN. 25, 1965

TO CULTON INDUSTRIES, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED MAY 11 AND 13, 1965, RESPECTIVELY, PROTESTING THE REJECTION OF YOUR UNSIGNED BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 600-683-65, ISSUED BY THE NAVY PURCHASING OFFICE ON FEBRUARY 24, 1965, IN CONNECTION WITH A PROPOSED PROCUREMENT OF A MINIMUM OF 533 AND MAXIMUM OF 733 NICKEL-CADMIUM STORAGE BATTERIES.

FOUR BIDS WERE RECEIVED AND OPENED AS SCHEDULED ON APRIL 1, 1965. THE SPECIFIED MINIMUM QUANTITY OF 533 UNITS, AND UNIT PRICES OF $29.80, $29.65, $29.45, AND $29.25 ON THE FOUR SPECIFIED QUANTITY RANGES INVOLVING OPTIONAL INCREASED QUANTITIES. THE TOTAL PRICE FOR THE MINIMUM QUANTITY OF 533 UNITS WAS $15,963.35 AND THE TOTAL PRICE FOR THE MAXIMUM QUANTITY OF 733 UNITS WAS $21,440.25. SINCE THE BID OF YOUR COMPANY WAS NOT SIGNED, IT WAS REJECTED AND THE CONTRACT AWARD WAS MADE TO THE SONOTONE CORPORATION, ELMSFORD, NEW YORK, ON THE BASIS FOR ALL QUANTITIES WITHIN THE RANGES FOR OPTIONAL QUANTITY INCREASES. SONOTONE'S TOTAL PRICE FOR 533 UNITS WAS $20,989.54 AND ITS TOTAL PRICE FOR 733 UNITS WAS $28,865. 54.

THE UNSIGNED BID WAS TYPEWRITTEN EXCEPT AT PAGE 1 OF THE BIDDING SCHEDULE WHERE HANDWRITTEN UNIT AND TOTAL PRICES WERE LISTED AND AT PAGE 6 OF THE BIDDING SCHEDULE WHERE THE WORDS "AS REQUIRED" WERE HANDWRITTEN WITH REFERENCE TO PROPOSED DELIVERY SCHEDULE. THE NAME AND ADDRESS OF THE BIDDER WERE SET FORTH IN BLOCK 12 OF THE BID FORM AND WILLIAM E. RYDER, APPLICATIONS MANAGER, WAS DESIGNATED IN BLOCK 5AS THE "NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER.' HOWEVER, BLOCK 16, IN WHICH SPACE WAS PROVIDED FOR THE SIGNATURE OF THE PERSON AUTHORIZED TO SIGN THE BID, WAS LEFT BLANK.

YOU STATED IN A LETTER DATED APRIL 14, 1965, TO THE NAVY PURCHASING OFFICE, THAT IT IS THE PRACTICE OF THE ALKALINE BATTERY DIVISION "TO FILL IN THE PRICE IN INK AND TO SIGN BID JUST PRIOR TO SEALING IT," BUT THAT MR. RYDER INADVERTENTLY NEGLECTED TO SIGN THE BID AFTER FILLING OUT THE PRICES ON FOUR COPIES ON HAND. AN AFFIDAVIT WAS SUBMITTED BY THE VICE- PRESIDENT OF GULTON INDUSTRIES, INCORPORATED, STATING THAT "THE BID WAS IN EVERY RESPECT PROPER EXCEPT FOR THE LACK OF SIGNATURE AND GULTON INDUSTRIES CONSIDERS THIS A FIRM BID.' YOUR LETTER OF APRIL 14, 1965, INDICATED THAT MR. RYDER OFFERED TO COME TO WASHINGTON TO SIGN THE BID AS SOON AS HE WAS NOTIFIED THAT THE BID WAS NOT SIGNED, BUT THAT HIS OFFER WAS REJECTED BY THE NAVY'S PURCHASING AGENT. IN VIEW OF THE APPARENT SAVING OF FROM APPROXIMATELY $5,000 TO $7,000 WHICH COULD BE EFFECTED BY THE GOVERNMENT THROUGH ACCEPTANCE OF THE UNSIGNED BID, IT WAS SUGGESTED THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO ALLOW YOUR FIRM TO SIGN THE BID AND THEN TO ACCEPT THE BID.

YOU WERE ADVISED BY LETTER DATED MAY 6, 1965, FROM THE NAVY PURCHASING OFFICE, THAT FAILURE TO SIGN THE BID COULD NOT BE WAIVED AS A MINOR INFORMALITY OR IRREGULARITY IN BID UNDER THE PROVISIONS OF SECTION 2-405 (III) OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH PROVIDES THAT A BIDDER SHALL BE GIVEN AN OPPORTUNITY TO CORRECT THE FAILURE TO SIGN A BID, BUT ONLY IF---

"/A) THE FIRM SUBMITTING THE BID HAS FORMALLY ADOPTED OR AUTHORIZED THE EXECUTION BY TYPEWRITTEN, PRINTED OR RUBBER STAMPED SIGNATURE AND SUBMITS EVIDENCE OF SUCH AUTHORIZATION AND THE BID CARRIES SUCH A SIGNATURE, OR

"/B) THE UNSIGNED BID IS ACCOMPANIED BY OTHER MATERIAL INDICATING THE BIDDER'S INTENTION TO BE BOUND BY THE UNSIGNED DOCUMENT SUCH AS THE SUBMISSION OF A BID GUARANTEE WITH BID, OR A LETTER SIGNED BY THE BIDDER WITH THE BID REFERRING TO AND CLEARLY IDENTIFYING THE BID ITSELF; * * *"

IT WAS EXPLAINED THAT, TO BE RESPONSIVE TO A FORMAL INVITATION FOR BIDS, A BID, ONCE OPENED, MUST BE AN IRREVOCABLE OFFER, BINDING UPON THE OFFEROR FOR THE SPECIFIED ACCEPTANCE PERIOD; THAT YOUR UNSIGNED BID DID NOT CONSTITUTE SUCH AN OFFER; THAT THE RULE WHICH PRECLUDES IN GENERAL THE ACCEPTANCE OF AN UNSIGNED BID IS ONE OF SEVERAL RULES DESIGNED FOR THE PURPOSE OF MAINTAINING THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM; AND THAT, SINCE THE NAVY WOULD NOT BE JUSTIFIED IN A DETERMINATION THAT THE PRICE QUOTED BY THE SONOTONE CORPORATION IS UNREASONABLE, THE CONTRACT WAS REQUIRED TO BE AWARDED TO THAT COMPANY AS THE LOWEST RESPONSIBLE AND RESPONSIVE BIDDER.

IN REQUESTING OUR CONSIDERATION OF THE MATTER, YOU CONTEND THAT THERE IS SUFFICIENT EVIDENCE TO SHOW YOUR INTENTION TO BE BOUND BY THE UNSIGNED BID. IN ADDITION TO REFERRING TO THE FACT THAT THE PRICES SHOWN IN THE BID WERE HANDWRITTEN, YOU STATED, AND PROVIDED EVIDENCE TO SHOW, THAT THE BID WAS SENT BY REGISTERED MAIL. YOU SUGGESTED THAT IN SUCH CIRCUMSTANCES THERE SHOULD BE NO QUESTION BUT THAT GULTON INDUSTRIES, INCORPORATED, BELIEVED THAT IT WOULD BE BOTH MORALLY AND LEGALLY BOUND BY THE CONDITIONS OF THE UNSIGNED BID. THE OPINION WAS ALSO EXPRESSED THAT IT IS INCONCEIVABLE THAT OUR OFFICE WOULD PERMIT AN EXPENDITURE OF AN ADDITIONAL $5,000 OR MORE FOR A PROCUREMENT OF STORAGE BATTERIES SIMILAR TO THOSE WHICH YOU ARE MANUFACTURING CURRENTLY UNDER NAVY CONTRACT NO. N251 (253) 20124A.

THE CITED ADMINISTRATIVE REGULATION, ASPR 2-405 (III), IS IN ACCORD WITH THE DECISIONS OF OUR OFFICE IN WHICH WE HAVE HELD THAT UNSIGNED BIDS MAY NOT BE CONSIDERED FOR AWARD UNLESS THE BID IS ACCOMPANIED BY DOCUMENTARY OR OTHER EVIDENCE SHOWING A CLEAR INTENT TO SUBMIT A BID. SEE 17 COMP. GEN. 497; 34 ID. 439; AND 36 ID. 523. THE ACTUAL TEST IN CASES OF SUCH NATURE IS WHETHER THE BID AS SUBMITTED WILL EFFECT A BINDING CONTRACT UPON ITS ACCEPTANCE WITHOUT RESORT TO THE BIDDER FOR CONFIRMATION OF ITS INTENTION. IT IS OUR OPINION THAT NEITHER THE REGISTERED MAILING OF AN UNSIGNED BID, NOR THE FACT THAT CERTAIN PORTIONS OF AN UNSIGNED BID HAVE BEEN HANDWRITTEN, WOULD ESTABLISH A CLEAR INTENT TO SUBMIT A BID AND TO BE BOUND BY ALL OF ITS TERMS AND CONDITIONS.

ALTHOUGH WE DO NOT QUESTION YOUR STATEMENT THAT THE FAILURE TO SIGN THE BID WAS INADVERTENT, IT IS NEVERTHELESS APPARENT THAT YOUR FIRM WAS IN A POSITION, IF IT SO DESIRED, TO DISAVOW THE BID AFTER THE PUBLIC OPENING THEREOF BECAUSE THE BID WAS NOT SIGNED. TO HAVE PERMITTED YOUR COMPANY TO AFFIRM THE BID AFTER IT WAS OPENED WOULD HAVE BEEN TANTAMOUNT TO THE GRANTING OF A SECOND CHANCE TO BID, CONTRARY TO THE ESTABLISHED PRINCIPLE OF FORMAL COMPETITIVE PROCUREMENT BY THE GOVERNMENTAL AGENCIES THAT BIDS MAY NOT BE CHANGED AFTER PUBLIC OPENING. SEE CITY OF CHICAGO V. MOHR, 216 ILL. 320, 74 N.E. 1056.

IT HAS LONG BEEN ESTABLISHED THAT CONTRACTING OFFICERS OF THE GOVERNMENT ARE AUTHORIZED TO WAIVE MINOR IRREGULARITIES AND INFORMALITIES IN BIDS, BASED UPON THE PROPOSITION THAT THE WAIVER OF SOME MINOR DEFECT IN FORM OR SOME IMMATERIAL OR INCONSEQUENTIAL DEFECT IN OR VARIATION FROM THE EXACT REQUIREMENTS OF INVITATIONS AND SPECIFICATIONS WOULD NOT BE PREJUDICIAL TO THE RIGHTS OF BIDDERS WHO HAD SUBMITTED FULLY RESPONSIVE BIDS. SEE 20 COMP. GEN. 4. HOWEVER, THERE IS NO AUTHORITY FOR WAIVING AS AN INFORMALITY OR IRREGULARITY MATERIAL EXCEPTIONS IMPOSED BY BIDDERS OR A FAILURE OF A BIDDER TO SIGN HIS BID WHERE, AS HERE, AN EXAMINATION OF THE UNSIGNED BID DOES NOT DISCLOSE A CLEAR INTENT OF THE PARTY NAMED IN THE BID TO SUBMIT THE BID, AND THE UNSIGNED BID IS NOT ACCOMPANIED WITH SIGNED DOCUMENTS, CORRESPONDENCE OR OTHER MATERIAL, FROM WHICH AN INTENT TO SUBMIT THE BID REASONABLY COULD BE INFERRED.

WE THEREFORE AGREE WITH THE NAVY PURCHASING OFFICE THAT THE UNSIGNED BID IN THIS CASE SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE TO THE INVITATION FOR BIDS. WITH RESPECT TO THE APPARENT FACT THAT THE CONTRACT AWARD TO THE SONOTONE CORPORATION WILL RESULT IN AN EXCESS COST OF FROM APPROXIMATELY $5,000 TO $7,000 IN THE PROCUREMENT OF THE STORAGE BATTERIES, IT HAS BEEN THE POSITION OF OUR OFFICE AND THE COURTS THAT THE STRICT MAINTENANCE OF COMPETITIVE BIDDING PROCEDURES, REQUIRED BY LAW IN CONNECTION WITH THE LETTING OF PUBLIC CONTRACTS, IS INFINITELY MORE IN THE PUBLIC INTEREST THAN THE OBTAINING OF A POSSIBLE PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY A VIOLATION OF THE RULES. 17 COMP. GEN. 554; 34 ID. 82; UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461, 463; CITY OF CHICAGO V. MOHR, SUPRA. ..END :