B-158399, FEB. 2, 1966

B-158399: Feb 2, 1966

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SOUTHWESTERN POWER ADMINISTRATION: REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 21. ON WHICH IT WAS THE LOW BIDDER. THEY ARE FIRM FOR A PERIOD OF 60 DAYS.' 2. 10 0/0 WHEN THE TERMS OF THE CONTRACT HAVE BEEN FULLY COMPLIED WITH. WE ARE ALSO PREPARED TO ACCEPT ANY OTHER TERMS YOU MAY PROPOSE.'" YOU ADVISE FURTHER THAT. THE BIDDER ADVISED AS FOLLOWS: " "THE WORDING REGARDING OUR BID BEING FIRM FOR A PERIOD OF 60 DAYS IS UNDERSTOOD THAT WE HOLD OUR BID FIRM FOR ACCEPTANCE FOR 60 DAYS AFTER THE DATE OF BID OPENING. THAT WE ARE PREPARED TO FURNISH ALL THE ITEMS AT THE PRICES SET OPPOSITE EACH ITEM WITHOUT ANY CHANGES WHATSOEVER.'" YOU STATE ALSO THAT THE INVITATION FOR BIDS SPECIFIED THAT BIDS CONTAINING PRICE ESCALATION PROVISIONS WILL BE NONRESPONSIVE AND SHALL BE REJECTED AND CONTAINED IN ADDITION THE "PAYMENTS" CLAUSE.

B-158399, FEB. 2, 1966

TO MR. FRED C. MCCURDY, SOUTHWESTERN POWER ADMINISTRATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 21, 1966, REQUESTING A DECISION AS TO WHETHER AN AWARD MAY BE MADE TO THE AMERICAN ELIN CORPORATION PURSUANT TO ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS SPA-458, ON WHICH IT WAS THE LOW BIDDER.

YOU STATE THAT IN A LETTER TRANSMITTING THE BID THE BIDDER STATED AS FOLLOWS:

"* * * 1. "PRICES: OUR PRICES COVER DELIVERY F.O.B. DESTINATION AS PER PAGE 15 OF YOUR SPECIFICATIONS, INCLUDING SEAWORTHY PACKING. THEY ARE FIRM FOR A PERIOD OF 60 DAYS.' 2. "TERMS: 90-0/0 OF THE CONTRACT PRICE TO BE PAID ON RECEIPT OF INVOICE, WHEN DELIVERY HAS BEEN MADE AT DESTINATION AND MATERIAL RECEIVED IN GOOD CONDITION; 10 0/0 WHEN THE TERMS OF THE CONTRACT HAVE BEEN FULLY COMPLIED WITH,HOWEVER, NOT LATER THAN 120 DAYS AFTER RECEIPT OF EQUIPMENT AT DESTINATION. WE ARE ALSO PREPARED TO ACCEPT ANY OTHER TERMS YOU MAY PROPOSE.'"

YOU ADVISE FURTHER THAT, IN A LETTER WRITTEN AFTER BID OPENING, THE BIDDER ADVISED AS FOLLOWS:

" "THE WORDING REGARDING OUR BID BEING FIRM FOR A PERIOD OF 60 DAYS IS UNDERSTOOD THAT WE HOLD OUR BID FIRM FOR ACCEPTANCE FOR 60 DAYS AFTER THE DATE OF BID OPENING, AND THAT WE ARE PREPARED TO FURNISH ALL THE ITEMS AT THE PRICES SET OPPOSITE EACH ITEM WITHOUT ANY CHANGES WHATSOEVER.'"

YOU STATE ALSO THAT THE INVITATION FOR BIDS SPECIFIED THAT BIDS CONTAINING PRICE ESCALATION PROVISIONS WILL BE NONRESPONSIVE AND SHALL BE REJECTED AND CONTAINED IN ADDITION THE "PAYMENTS" CLAUSE, WHICH IS PARAGRAPH 7 OF STANDARD FORM 32. IT IS ALSO OUR UNDERSTANDING THAT THE INVITATION PROVIDES FOR 60 DAYS FOR ACCEPTANCE OF BIDS AND CALLS FOR DELIVERY OF THE ITEMS 90 DAYS AFTER AWARD OF THE CONTRACT.

WHILE THE BIDDER STATES IN THE LETTER SUBMITTED AFTER BID OPENING THAT THE STATEMENT IN ITS BID TRANSMITTAL LETTER THAT ITS PRICES ARE FIRM FOR A PERIOD OF 60 DAYS WAS INTENDED TO INDICATE THAT ITS BID WAS FIRM FOR ACCEPTANCE FOR 60 DAYS AFTER BID OPENING, THAT STATEMENT IS ALSO SUSCEPTIBLE TO AN INTERPRETATION THAT ITS PRICE IS FIXED FOR 60 DAYS AND SUBJECT TO CHANGE AFTER THAT EVEN IF AN AWARD IS MADE TO IT WITHIN THE 60 DAYS. IN B-144114, OCTOBER 4, 1960, WHERE A BIDDER HAD INCLUDED IN ITS BID A STATEMENT THAT ITS "PRICE IS FIRM FOR ONE YEAR," IT STATED THAT IT INTENDED BY THE STATEMENT THAT ITS PRICE SHOULD REMAIN FIRM WITH RESPECT TO DELIVERY WITHIN ONE YEAR FROM THE DATE OF THE BID OPENING. IN THAT CASE, OUR OFFICE HELD THAT IT WAS WITHIN THE REALM OF POSSIBILITY THAT CIRCUMSTANCES MIGHT OCCUR RESULTING IN DELIVERY BEYOND THE PERIOD THE PRICE WOULD REMAIN FIRM. CONSEQUENTLY, SINCE NO MAXIMUM ESCALATION WAS STATED WE CONCLUDED THAT THE BID SHOULD NOT BE ACCEPTED BECAUSE THERE WAS NO BASIS UPON WHICH THE BID COULD BE EVALUATED. MOREOVER, LANGUAGE INDICATING THAT PRICES ARE FIRM FOR A PARTICULAR PERIOD GENERALLY IS USED IN SITUATIONS WHERE BIDDERS WISH TO INDICATE THE POSSIBILITY OF PRICE ESCALATION. SEE, FOR EXAMPLE, 38 COMP. GEN. 253.

IN ANY EVENT, THE STATEMENT IN THE AMERICAN ELIN CORPORATION BID THAT THE PRICES ARE FIRM FOR A PERIOD OF 60 DAYS IS NOT SO CLEAR THAT IT CAN DEFINITELY BE UNDERSTOOD TO MEAN WHAT THE BIDDER SAYS IT INTENDED IT TO MEAN IN ITS EXPLANATORY LETTER WRITTEN AFTER THE BID OPENING. OUR OFFICE HAS STATED THAT WHERE TWO POSSIBLE MEANINGS CAN BE REACHED FROM THE TERMS OF A BID, THE BIDDER SHOULD NOT BE ALLOWED TO EXPLAIN ITS MEANING AFTER BID OPENING WHEN IT IS IN A POSITION THEREBY TO PREJUDICE OTHER BIDDERS OR TO AFFECT THE RESPONSIVENESS OF ITS BID. 40 COMP. GEN. 393.

ACCORDINGLY, THE AMERICAN ELIN CORPORATION BID SHOULD NOT BE CONSIDERED FOR AWARD.