B-158694, MAY 9, 1966

B-158694: May 9, 1966

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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO THE LETTER DATED MARCH 21. BIDS WERE OPENED AS SCHEDULED ON MARCH 2. WHERE IT WAS DETERMINED GUIMOND FARMS WAS THE LOW BIDDER. THE CONTRACT WAS TO BE FOR A SIX MONTH PERIOD BEGINNING APRIL 1. WHILE IT IS TRUE MAINE IS NOT IN A FEDERAL MILK MARKET AREA. MAINE DOES HAVE A STATE MILK CONTROL COMMISSION WHICH. THE RESULT OF THE SUSPENSION ORDER AND CHANGE IN CLASS I PRICES IS THE SAME AS THOUGH MAINE WERE IN A FEDERAL MILK MARKET AREA. THE SUSPENSION ORDER WAS PARTIALLY REVISED TO LESSEN ITS EFFECT SOMEWHAT FOR MAY AND JUNE. THE CONTRACTING OFFICER REPORTS THE PROBABLE RESULT OF THE SUSPENSION ORDER IS THAT NORMAL SEASONAL DECREASES IN PRICES WHICH WERE EXPECTED TO OCCUR ABSENT THE SUSPENSION ORDER.

B-158694, MAY 9, 1966

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO THE LETTER DATED MARCH 21, 1966, YOUR REFERENCE DSAH -G, FROM THE ASSISTANT COUNSEL, DEFENSE SUPPLY AGENCY, IN CONNECTION WITH THE PROTEST OF GUIMOND FARMS, FALL RIVER, MASSACHUSETTS, AGAINST THE AWARD TO THAT FIRM OF A CONTRACT UNDER INVITATION FOR BIDS NO. DSA 136-66-62.

THE ABOVE-REFERENCED INVITATION CALLED FOR THE FURNISHING OF MILK AND MILK PRODUCTS AT BRUNSWICK NAVAL AIR STATION, BRUNSWICK, MAINE. BIDS WERE OPENED AS SCHEDULED ON MARCH 2, 1966, AT THE SUBSISTENCE REGIONAL HEADQUARTERS, BROOKLYN, NEW YORK, WHERE IT WAS DETERMINED GUIMOND FARMS WAS THE LOW BIDDER. THE CONTRACT WAS TO BE FOR A SIX MONTH PERIOD BEGINNING APRIL 1, 1966. HOWEVER, ON OR ABOUT MARCH 1, 1966, THE UNITED STATES DEPARTMENT OF AGRICULTURE SUSPENDED PART OF THE CLASS I PRICING PROVISIONS OF THE MASSACHUSETTS-RHODE ISLAND FEDERAL MILK MARKETING ORDER. WHILE IT IS TRUE MAINE IS NOT IN A FEDERAL MILK MARKET AREA, MAINE DOES HAVE A STATE MILK CONTROL COMMISSION WHICH, ACCORDING TO THE CONTRACTING OFFICER'S REPORT, AUTOMATICALLY FOLLOWS THE MASSACHUSETTS- RHODE ISLAND ORDER IN FIXING CLASS I MILK PRICES IN MAINE. THEREFORE, THE RESULT OF THE SUSPENSION ORDER AND CHANGE IN CLASS I PRICES IS THE SAME AS THOUGH MAINE WERE IN A FEDERAL MILK MARKET AREA. SUBSEQUENTLY, THE SUSPENSION ORDER WAS PARTIALLY REVISED TO LESSEN ITS EFFECT SOMEWHAT FOR MAY AND JUNE.

THE CONTRACTING OFFICER REPORTS THE PROBABLE RESULT OF THE SUSPENSION ORDER IS THAT NORMAL SEASONAL DECREASES IN PRICES WHICH WERE EXPECTED TO OCCUR ABSENT THE SUSPENSION ORDER, WILL NOT OCCUR. GUIMOND CLAIMS THIS SUDDEN AND COMPLETELY UNEXPECTED ACTION BY THE DEPARTMENT OF AGRICULTURE WILL MEAN A LOSS TO THEM OF MANY THOUSANDS OF DOLLARS UNLESS THEY ARE GRANTED SOME TYPE OF RELIEF. IN CORRESPONDENCE DATED MARCH 3, MARCH 8, AND MARCH 9, 1966, GUIMOND HAS REQUESTED RELIEF ALTERNATIVELY IN THE FORM OF (1) A PRICE ADJUSTMENT OF ?01 PER QUART; (2) CANCELLATION OF THE INVITATION, OR (3) WITHDRAWAL OF THEIR BID. HOWEVER, PENDING DETERMINATION OF ITS PROTEST, GUIMOND COMMENCED PERFORMANCE UNDER THE CONTRACT AS OF APRIL 1, 1966, AND IS CONTINUING TO PERFORM AS OF THIS DATE.

THE FIRST QUESTION WE WILL CONSIDER IS WHETHER THE CONTRACT PRICE CAN BE REVISED TO REFLECT THE CHANGES RESULTING FROM THE SUSPENSION ORDER, RATHER THAN USING THE PRICES IN GUIMOND'S BID. THE ANSWER TO THIS QUESTION MUST BE IN THE NEGATIVE BECAUSE SUCH A CHANGE, IN EFFECT, WOULD PERMIT GUIMOND TO CHANGE ITS BID AFTER THE OPENING OF BIDS. THIS OFFICE HAS CONSISTENTLY HELD THAT THE SUBMISSION OF A SECOND BID AFTER OPENING IS CONTRARY TO THE ESTABLISHED RULE GOVERNING COMPETITIVE BIDDING. SEE 34 COMP. GEN. 82; 35 COMP. GEN. 33; 41 COMP. GEN. 203.

NEXT, IN VIEW OF THE FACT GUIMOND HAS COMMENCED PERFORMANCE UNDER THE AWARD, IT BECOMES UNNECESSARY TO RULE ON ITS TWO OTHER CLAIMS FOR RELIEF. THAT IS, THE REQUEST BY GUIMOND THAT THE INVITATION BE CANCELLED OR THAT IT BE ALLOWED TO WITHDRAW ITS BID, NOW HAS NO APPLICABILITY TO THE DISPOSITION OF THIS CASE.

AT THE TIME THE SUSPENSION ORDER WAS PROMULGATED, GUIMOND HAD THE OPPORTUNITY EITHER TO WITHDRAW ITS BID AND ASSUME THE CONSEQUENT LIABILITY FOR EXCESS COSTS IF IT WAS LATER DETERMINED IT HAD NO SUCH RIGHT, OR IT COULD HAVE COMMENCED PERFORMANCE UNDER THE SUBSEQUENT AWARD AND URGED THE INCLUSION IN THE CONTRACT OF SOME KIND OF PRICE RELIEF, PREFERABLY IN THE FORM OF AN ESCALATION CLAUSE. GUIMOND CHOSE THE LATTER COURSE. THUS, THE ONLY ISSUE THAT REMAINS TO BE SETTLED IS THE AMOUNT OF PAYMENT DUE GUIMOND FOR ITS PERFORMANCE UNDER THE CONTRACT.

WE HAVE ALREADY NOTED THE INSERTION OF AN ESCALATION CLAUSE IN THE CONTRACT WOULD NOT BE PROPER. THE AVENUES OF WITHDRAWAL OF THE BID AND CANCELLATION OF THE INVITATION HAVE BEEN CLOSED. WE ARE, THEREFORE, LED TO THE CONCLUSION THAT GUIMOND IS BOUND BY THE TERMS OF ITS BID.

IT IS THE OPINION OF THIS OFFICE THAT, UNDER PRESENT CIRCUMSTANCES, GUIMOND FARMS IS ENTITLED TO NO RELIEF AS A RESULT OF THE SUSPENSION ORDER.