B-158182, MAR. 4, 1966

B-158182, MAR. 4, 1966

TO ELECTRONIC INDUSTRIES, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 14, 1965, AND THE COPY OF THE LETTER FROM YOUR ATTORNEYS TO THE CONTRACTING OFFICER DATED DECEMBER 15, 1965, PROTESTING THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. AMC/E/-36-039-66-16-1, ISSUED BY THE UNITED STATES ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA, FOR THE PROCUREMENT OF RADIO RECEIVERS R-390) ( (URR AND COMPONENTS IN ACCORDANCE WITH APPLICABLE SPECIFICATIONS.

THIS WAS A MULTI-YEAR PROCUREMENT. ALTERNATE "A," THE SINGLE-YEAR PROGRAM WAS FOR 5,099 UNITS AND COMPONENTS. THE MULTI-YEAR PROCUREMENT UNDER ALTERNATE "B" WAS FOR 5,099 UNITS AND COMPONENTS IN THE FIRST- PROGRAM YEAR, 1,145 UNITS AND COMPONENTS IN THE SECOND PROGRAM YEAR AND 1,000 UNITS AND COMPONENTS IN THE THIRD-PROGRAM YEAR. BIDS WERE OPENED ON SEPTEMBER 20, 1965, AND YOUR BID WAS LOW. THE BID FROM ELECTRONIC ASSISTANCE CORPORATION WAS SECOND LOW. THE ACCEPTANCE PERIOD IN ALL THE BIDS WAS 60 DAYS AND THE EXPIRATION DATE FOR ALL THE BIDS WAS NOVEMBER 19, 1965.

BY TELEGRAM OF NOVEMBER 10, 1965, THE CONTRACTING OFFICER REQUESTED THAT THE BID ACCEPTANCE OF THE BIDDERS IN THE PRICE RANGE FOR CONSIDERATION BE EXTENDED UNTIL DECEMBER 31, 1965. ON NOVEMBER 15, 1965, YOU REQUESTED THAT THE CONTRACTING OFFICER ADVISE YOU AS TO THE REASON WHY AN AWARD COULD NOT BE MADE TO YOU WITHIN THE ACCEPTANCE PERIOD SPECIFIED. NOVEMBER 17, 1965, THE CONTRACTING OFFICER ADVISED YOU BY TELEGRAM THAT THE EVALUATION OF YOUR RESPONSIBILITY HAD NOT BEEN COMPLETED. BY TELEGRAM OF NOVEMBER 19, 1965, YOUR BID EXPIRATION DATE, YOU ADVISED THE CONTRACTING OFFICER THAT YOUR BID WOULD BE EXTENDED TO DECEMBER 31, 1965, CONDITIONED ON AN INCREASE IN YOUR UNIT PRICE FROM $805 PER UNIT TO $925 PER UNIT ON ALTERNATES "A" AND "B.' THIS TELEGRAM ALSO ADVISED THAT YOU WOULD ACCELERATE DELIVERIES AND WOULD OFFER MILITARY QUALITY CONTROL STANDARDS IN EXCESS OF THOSE REQUIRED. YOUR BID WITH THE INCREASE IN PRICE WOULD STILL BE LOW.

ON DECEMBER 13, 1965, THE CONTRACTING OFFICER ADVISED YOU THAT YOUR EXTENSION FOR BID ACCEPTANCE WHICH WAS CONDITIONED ON AN INCREASE IN YOUR UNIT PRICE COULD NOT BE CONSIDERED. YOU WERE FURTHER ADVISED THAT SINCE YOUR BID HAD EXPIRED, AN AWARD WAS MADE ON DECEMBER 13, 1965, TO ELECTRONICS ASSISTANCE CORPORATION AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. ON DECEMBER 6, 1965, THE CONTRACTOR EVALUATION BOARD OF THE UNITED STATES ARMY ELECTRONICS COMMAND COMPLETED ITS REVIEW OF YOUR FINANCIAL AND TECHNICAL ABILITY TO PERFORM THIS CONTRACT.

THE COPY OF YOUR ATTORNEY'S LETTER TO THE CONTRACTING OFFICER DATED DECEMBER 15, 1965, CONTENDS THAT THE AWARD SHOULD HAVE BEEN MADE TO YOU PRIOR TO THE EXPIRATION OF THE ACCEPTANCE PERIOD SPECIFIED IN YOUR BID. THIS LETTER ALSO CONTENDS THAT THE PRICE INCREASE ON WHICH YOUR EXTENSION FOR BID ACCEPTANCE WAS CONDITIONED SHOULD HAVE BEEN CONSIDERED AS A MODIFICATION TO A BID. IN THIS CONNECTION YOUR ATTORNEY HAS CITED 1 CCH GOVERNMENT CONTRACTS REP.PARA. 3415.

THERE IS NO REQUIREMENT THAT AN AWARD BE MADE WITHIN THE TIME OF BID ACCEPTANCE SPECIFIED IN THE BID. IN THIS CONNECTION ARMED SERVICES PROCUREMENT REGULATION 2-404.1/C) PROVIDED THAT IF ADMINISTRATIVE DIFFICULTIES WERE ENCOUNTERED AFTER BID OPENING WHICH MIGHT DELAY AWARD BEYOND THE BIDDERS' ACCEPTANCE PERIODS, THE SEVERAL LOWEST BIDDERS SHOULD BE REQUESTED, BEFORE EXPIRATION OF BIDS, TO EXTEND THE BID ACCEPTANCE PERIOD IN ORDER TO AVOID THE NEED FOR READVERTISEMENT.

THE NEXT QUESTION IS WHETHER YOUR EXTENSION FOR BID ACCEPTANCE WHICH WAS CONDITIONED ON AN INCREASED UNIT PRICE IN YOUR BID COULD BE CONSIDERED BY THE CONTRACTING OFFICER. THE ANSWER TO THIS QUESTION MUST BE NO, SINCE TO GIVE YOU AN OPPORTUNITY TO INCREASE YOUR UNIT PRICE WOULD BE THE SAME AS PERMITTING YOU TO SUBMIT A NEW BID AFTER BID OPENING. WE HAVE CONSISTENTLY HELD THAT THE SUBMISSION OF A SECOND BID AFTER DISCLOSURE OF ALL BID PRICES IS CONTRARY TO THE WELL ESTABLISHED PRINCIPLE GOVERNING COMPETITIVE BIDDING. SEE 34 COMP. GEN. 82; 35 ID. 33; 41 ID. 203. IN B- 157540, DECEMBER 29, 1965, WE HELD THAT WHERE THE LOW BIDDER ALLOWED ITS BID TO EXPIRE NOTWITHSTANDING AN ADMINISTRATIVE REQUEST THAT THE BID ACCEPTANCE BE EXTENDED, THIS BIDDER'S OFFER WAS EFFECTIVELY WITHDRAWN AND WAS NO LONGER THE LOW RESPONSIVE BID. WE ALSO HELD IN THAT DECISION THAT THE EXPIRATION OF WHAT WAS ONCE THE LOW RESPONSIVE BID WOULD NOT BY ITSELF REQUIRE THE READVERTISEMENT OF THE PROCUREMENT.

IN THE CIRCUMSTANCES OF THIS CASE IT SEEMS THAT THE EXTENSION OF THE BID ACCEPTANCE WAS REQUESTED FOR A VALID REASON--- TO GIVE THE PROCURING ACTIVITY ADEQUATE TIME TO COMPLETE ITS REVIEW OF YOUR FINANCIAL AND TECHNICAL CAPACITY. SINCE THE EXTENSION OF YOUR BID ACCEPTANCE COULD NOT BE CONSIDERED IT IS OUR VIEW THAT YOUR OFFER WAS EFFECTIVELY WITHDRAWN WHEN YOUR BID EXPIRED. IN THESE CIRCUMSTANCES THE CONTRACTING OFFICER COULD LEGALLY MAKE THE AWARD TO ELECTRONIC ASSISTANCE CORPORATION AS THE LOW RESPONSIVE BIDDER.

WE HAVE REVIEWED 1 CCH GOVERNMENT CONTRACTS REP.PARA. 3415, WHICH DEALS WITH THE "FIRM BID" RULE, CORRECTION OF BIDS FOR MISTAKE, LATE BIDS, MODIFICATIONS AND WITHDRAWALS OF BIDS. THE "FIRM BID" RULE IS THAT A BID IS IRREVOCABLE BY THE BIDDER FOR A REASONABLE TIME AFTER BID OPENING. THIS RULE WOULD HAVE NO APPLICATION TO THE INSTANT CASE. THE RULES REGARDING CORRECTION OF BIDS FOR MISTAKE AND CONSIDERATION OF LATE BIDS ALSO WOULD HAVE NO APPLICATION TO THE INSTANT SITUATION. WITH RESPECT TO MODIFICATIONS AND WITHDRAWAL OF BIDS, 1 CCH GOVERNMENT CONTRACTS REP.PARA. 3415 PROVIDES THAT BIDS MAY BE MODIFIED OR WITHDRAWN BY NOTICE RECEIVED AT THE PROPER GOVERNMENT OFFICE BEFORE THE TIME SET FOR THE OPENING OF BIDS. IN THE INSTANT CASE YOU ARE CONTENDING THAT YOU SHOULD BE PERMITTED TO MODIFY YOUR BID AFTER BID OPENING. EXAMPLE .20 OF THE ANNOTATION TO PARA. 3415, SUPRA, ENTITLED "CHANGE AFTER OPENING" , CITING B-150327, NOVEMBER 30, 1962, STATES:

"A CONTRACTOR WAS NOT ALLOWED TO CHANGE ITS BID AFTER OPENING TO MEET SPECIFICATIONS IN THE INVITATION ON THE BASIS OF AN ALLEGED INTENTION TO COMPLY WITH THE SPECIFICATIONS, SINCE PERMISSION TO CLARIFY THE BIDDER'S INTENTION WOULD HAVE AMOUNTED TO PERMISSION TO CHANGE THE BID AFTER OPENING.'

IN OUR VIEW THIS QUOTED EXAMPLE MOST CLOSELY PARALLELS YOUR SITUATION. CONSEQUENTLY, WE FIND THAT 1 CCH GOVERNMENT CONTRACTS REP.PARA. 3415 CANNOT BE CONSIDERED AS AUTHORITY FOR PERMITTING ACCEPTANCE OF A BID EXTENSION WHICH IS CONDITIONED ON AN INCREASE IN PRICE.