B-156840, AUG. 12, 1965

B-156840: Aug 12, 1965

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 18. FIVE BIDS WERE RECEIVED AND OPENED ON APRIL 26. YOUR BID WAS THE APPARENT LOW BID AT A PRICE OF $11. THE SECOND LOW BID WAS FROM VAGHINI CONSTRUCTION COMPANY. THE EVENT THAT PAYMENT IS NOT RECEIVED FOR PROGRESS PAYMENTS WITHIN THE FIFTEENTH DAY AFTER REQUEST ON FIRST DAY OF ONTH. FINAL PAYMENT IS NOT RECEIVED WITHIN 30 DAYS OF FINAL INSPECTION AND ACCEPTANCE WE WILL REQUIRE THE PAYMENT OF THE ABOVE SUM PLUS TWENTY FIVE PERCENT TO ALLOW FOR THE COST OF COLLECTION AND INTEREST AND DAMAGE TO OUR CREDIT DUE TO LATE PAYMENTS.'. THE CONTRACTING OFFICER FOUND YOUR BID NONRESPONSIVE BECAUSE THE ABOVE-QUOTED CLAUSE HAD THE EFFECT OF CREATING AN AMBIGUITY AS TO AMOUNT OF YOUR BID AND WAS REPUGNANT TO THE PAYMENT PROVISIONS OF THE INVITATION AS FOUND IN ARTICLE 7 THEREOF.

B-156840, AUG. 12, 1965

TO MARK. A. CARROLL AND SON, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 18, 1965, AND ENCLOSURE, PROTESTING AGAINST REJECTION OF YOUR BID UNDER INVITATION FOR BIDS NO. AMC/X) 19-129-65-59E, BY THE UNITED STATES ARMY NATICK LABORATORIES, NATICK, MASSACHUSETTS.

THE SUBJECT INVITATION CALLED FOR BIDS FOR CONSTRUCTION OF A NEW ROOM IN WAREHOUSE NO. 20 AT THE ABOVE INSTALLATION. FIVE BIDS WERE RECEIVED AND OPENED ON APRIL 26, 1965. YOUR BID WAS THE APPARENT LOW BID AT A PRICE OF $11,367, AND THE SECOND LOW BID WAS FROM VAGHINI CONSTRUCTION COMPANY, INC., IN THE AMOUNT OF $15,500. HOWEVER, YOU HAD THE FOLLOWING CLAUSE TYPED ON YOUR BID:

"A TWENTY FIVE PERCENT DISCOUNT HAS BEEN ALLOWED IN THE ABOVE PRICE. THE EVENT THAT PAYMENT IS NOT RECEIVED FOR PROGRESS PAYMENTS WITHIN THE FIFTEENTH DAY AFTER REQUEST ON FIRST DAY OF ONTH; AND FINAL PAYMENT IS NOT RECEIVED WITHIN 30 DAYS OF FINAL INSPECTION AND ACCEPTANCE WE WILL REQUIRE THE PAYMENT OF THE ABOVE SUM PLUS TWENTY FIVE PERCENT TO ALLOW FOR THE COST OF COLLECTION AND INTEREST AND DAMAGE TO OUR CREDIT DUE TO LATE PAYMENTS.'

AFTER CONSULTATION WITH LEGAL PERSONNEL AT THE BASE, THE CONTRACTING OFFICER FOUND YOUR BID NONRESPONSIVE BECAUSE THE ABOVE-QUOTED CLAUSE HAD THE EFFECT OF CREATING AN AMBIGUITY AS TO AMOUNT OF YOUR BID AND WAS REPUGNANT TO THE PAYMENT PROVISIONS OF THE INVITATION AS FOUND IN ARTICLE 7 THEREOF. THE FOLLOWING EXCERPT FROM THE CONTRACTING OFFICER'S STATEMENT EXPLAINS THE BASIS OF HER POSITION THAT YOUR BID IS AMBIGUOUS:

"3. WITH RESPECT TO THE PAYMENT CONDITION, THE BIDDER STATED THAT A 25 PERCENT DISCOUNT HAS BEEN ALLOWED IN THE PRICE OF $11,367. IF THIS FIGURE OF $11,367 REPRESENTS 75 PERCENT OF THE TOTAL BID PRICE, 100 PERCENT WOULD AMOUNT TO $15,156.00. THE BIDDER THEN STATED THAT IF PAYMENTS WERE NOT MADE AS PROVIDED FOR IN ITS CONDITION, IT WOULD REQUIRE PAYMENT OF $11,367 PLUS 25 PERCENT OF THAT AMOUNT TO ALLOW FOR COST OF COLLECTION, OF INTEREST AND DAMAGE TO ITS CREDIT. TWENTY FIVE PERCENT OF $11,367 IS $2,842, WHICH GIVES A TOTAL FIGURE OF $14,209. UNDER THIS BID, THE CONTRACTING OFFICER WOULD BE UNABLE TO DETERMINE THE AMOUNT OF MONEY TO OBLIGATE UNDER THIS CONTRACT * * *.'

WITH RESPECT TO THE INCONSISTENCY BETWEEN YOUR BID AND ARTICLE 7, THE ADMINISTRATIVE REPORT STATES:

"* * *. THIS ARTICLE PROVIDES FOR THE MANNER OF MAKING PAYMENTS BY THE GOVERNMENT, AND AUTHORIZES THE CONTRACTING OFFICER TO RETAIN 10 PERCENT OF ANY PROGRESS PAYMENTS UNTIL FINAL COMPLETION AND ACCEPTANCE OF THE CONTRACT WORK. THE BIDDER'S PROVISION REQUESTS THE PAYMENT OF PROGRESS PAYMENTS WITHIN 15 DAYS AFTER SUBMISSION OF A REQUEST, AND IMPLIES THAT THE FULL AMOUNT REQUESTED IS EXPECTED WITHOUT 10 PERCENT WITHHOLDING BY THE CONTRACTING OFFICER. SUCH PAYMENT PROVISION WOULD NOT ONLY BE DETRIMENTAL TO THE INTERESTS OF THE GOVERNMENT, BUT WOULD AFFORD THE BIDDER AN UNFAIR ADVANTAGE OVER OTHER BIDDERS.'

ALTHOUGH YOU ATTEMPTED TO CLARIFY YOUR BID PRICE BY LETTER DATED MAY 5, 1965, THE CONTRACTING OFFICER REJECTED YOUR BID AS BEING NONRESPONSIVE AND ON MAY 7, 1965, AWARDED A CONTRACT TO THE SECOND LOW BIDDER.

THE STATUTES AND REGULATIONS GOVERNING COMPETITIVE PROCUREMENTS BY THE GOVERNMENT REQUIRE THAT THE AWARD OF ANY CONTRACT BE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE THE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. SEE 10 U.S.C. 2305 (C) AND ARMED SERVICES PROCUREMENT REGULATION 2-101 (IV). WHILE THE GOVERNMENT MAY PROPERLY WAIVE INFORMALITIES OR DEVIATIONS IN BIDS WHEN IT IS IN THE INTEREST OF THE GOVERNMENT TO DO SO, THE ONLY INFORMALITIES OR DEVIATIONS WHICH MAY PROPERLY BE WAIVED ARE THOSE WHICH DO NOT GO TO THE SUBSTANCE OF THE BID SO AS TO AFFECT EITHER THE PRICE, QUANTITY, OR QUALITY OF THE SERVICES OFFERED. 36 COMP. GEN. 535, 539. THE INSTANT CASE, REGARDLESS OF WHAT YOUR INTENTION MAY HAVE BEEN, IT IS OUR OPINION THAT A REASONABLE INTERPRETATION OF THE CLAUSE TYPED ON YOUR BID WOULD CONDITION AND LIMIT THE GOVERNMENT'S RIGHT TO MAKE PROGRESS PAYMENTS IN ACCORDANCE WITH THE TERMS OF THE INVITATION AND THAT THIS QUALIFICATION WOULD NOT THEREFORE BE A MINOR INFORMALITY OR DEVIATION WHICH MAY PROPERLY BE WAIVED.

MOREOVER, IT IS A FUNDAMENTAL RULE OF PUBLIC PROCUREMENT THAT A CONTRACT AWARDED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461-463. SINCE THE QUALIFYING CLAUSE OF YOUR BID WOULD RESULT IN YOU HAVING THE RIGHT TO DEMAND PROGRESS PAYMENTS IN FULL, A CONTRACT AWARDED UPON THE BASIS OF SUCH A BID WOULD NOT BE THE SAME CONTRACT OFFERED BY THE GOVERNMENT TO ALL OTHER RESPONSIVE AND RESPONSIBLE BIDDERS.

SINCE WE HAVE FOUND THAT YOUR BID WAS PROPERLY DETERMINED NONRESPONSIVE FOR THE FOREGOING REASONS, IT WOULD NOT APPEAR TO BE NECESSARY TO CONSIDER THE QUESTION RAISED CONCERNING THE AMBIGUITY IN YOUR BID PRICE.

IN YOUR LETTER OF MAY 18, 1965, TO THE CONTRACTING OFFICER YOU MADE THE COMMENT THAT THIS WAS THE SECOND TIME YOU HAD HAD A BID REJECTED BY THE SAME ACTIVITY. WE ARE ADVISED THAT THE PREVIOUS REJECTION WAS UNDER AN INVITATION WHERE ALL BIDS WERE REJECTED TO READVERTISE THE REQUIREMENT UNDER REVISED SPECIFICATIONS, AND THAT YOU RECEIVED AWARD OF THE CONTRACT UNDER THE READVERTISEMENT. WE THEREFORE SEE NO BASIS FOR CONSIDERING SUCH PRIOR REJECTION IN CONNECTION WITH YOUR PRESENT PROTEST.

ACCORDINGLY, WE FIND NO BASIS UPON WHICH TO OBJECT TO THE REJECTION OF YOUR BID AND THE AWARD OF A CONTRACT TO VAGHINI, AND YOUR PROTEST IS THEREFORE DENIED.