B-159056, JUN. 13, 1966

B-159056: Jun 13, 1966

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TO BEKINS VAN AND STORAGE CO.: REFERENCE IS MADE TO YOUR LETTERS OF APRIL 25. BIDS WERE SCHEDULED FOR OPENING ON APRIL 22. IN THE EVENT THE BUILDING WAS NOT READY FOR OCCUPANCY IN TIME FOR THE SCHEDULED MOVE THE CONTRACTOR MUST PROCEED ON A REVISED SCHEDULE. IT IS REPORTED THAT SEVERAL PROSPECTIVE BIDDERS ADVISED THE GSA REPRESENTATIVE THAT THEIR UNION CONTRACTS EXPIRED ON MAY 31. IT WAS NOT AMENDED TO SO PROVIDE. SEVEN BIDS WERE RECEIVED AND OPENED ON APRIL 22. YOUR BID WAS LOW AT $19. WITH THE FOLLOWING QUALIFICATION: "IF MOVE IS DELAYED BEYOND MAY 31. 1966 BID WILL BE INCREASED BY THE SAME PERCENTAGE AS NEW UNION CONTRACT INCREASES OVER WAGE RATE IN EFFECT MAY 31. TO GSA WAS IN RESPONSE TO A TELEPHONE INQUIRY FROM GSA CONCERNING BOTH THE "0" FIGURE AND ESCALATION PROVISION IN THE BID.

B-159056, JUN. 13, 1966

TO BEKINS VAN AND STORAGE CO.:

REFERENCE IS MADE TO YOUR LETTERS OF APRIL 25, 1966, TO CONGRESSMAN JOEL T. BROYHILL AND TO THE TRANSPORTATION AND COMMUNICATION SERVICE, GENERAL SERVICES ADMINISTRATION (GSA), PROTESTING AGAINST REJECTION OF YOUR BID UNDER INVITATION FOR BIDS (IFB) NO. 3TTM-317, ISSUED BY GSA.

THE SUBJECT INVITATION, ISSUED APRIL 18, 1966, CALLED FOR BIDS ON FURNISHING TRANSPORTATION AND RELATED MOVING SERVICES FOR RELOCATION OF THE FOREIGN SERVICE INSTITUTE, DEPARTMENT OF STATE, FROM ITS PRESENT LOCATIONS TO A NEW BUILDING IN ARLINGTON, VIRGINIA. BIDS WERE SCHEDULED FOR OPENING ON APRIL 22, 1966. THE INVITATION PROVIDED THAT THE MOVE WOULD COMMENCE ON MAY 27, 1966 AND SHOULD BE COMPLETED ON MAY 30, 1966, AND IN THE EVENT THE BUILDING WAS NOT READY FOR OCCUPANCY IN TIME FOR THE SCHEDULED MOVE THE CONTRACTOR MUST PROCEED ON A REVISED SCHEDULE. APRIL 20, DURING A TOUR OF INSPECTION OF THE PREMISES, IT IS REPORTED THAT SEVERAL PROSPECTIVE BIDDERS ADVISED THE GSA REPRESENTATIVE THAT THEIR UNION CONTRACTS EXPIRED ON MAY 31, 1966, AND THAT WHILE FIRM BIDS COULD BE MADE TO THAT DATE ASSURANCES COULD NOT BE GIVEN THAT THE SAME PRICES WOULD PREVAIL THEREAFTER. THEREUPON, THE GSA REPRESENTATIVE ERRONEOUSLY ADVISED THE PROSPECTIVE BIDDERS THAT THEY COULD INCLUDE AN ESCALATION PROVISION IN THEIR BIDS TO COVER THE CONTINGENCY. HOWEVER, THE IFB DID NOT PROVIDE FOR ESCALATED BIDS, AND IT WAS NOT AMENDED TO SO PROVIDE.

SEVEN BIDS WERE RECEIVED AND OPENED ON APRIL 22, AND YOUR BID WAS LOW AT $19,495, WITH THE FOLLOWING QUALIFICATION:

"IF MOVE IS DELAYED BEYOND MAY 31, 1966 BID WILL BE INCREASED BY THE SAME PERCENTAGE AS NEW UNION CONTRACT INCREASES OVER WAGE RATE IN EFFECT MAY 31, 1966.' YOUR BID ALSO INCLUDED THE FIGURE "0" IN THE SPACE PROVIDED FOR INDICATING THE NUMBER OF CALENDAR DAYS WITHIN WHICH YOUR OFFER COULD BE ACCEPTED. THE THIRD LOW BIDDER ALSO INCLUDED AN ESCALATION CLAUSE IN ITS BID. KANE TRANSFER COMPANY, THE SECOND LOW BIDDER AT $21,649 (LESS A 1 PERCENT DISCOUNT FOR PAYMENT WITHIN 20 DAYS), DID NOT INCLUDE AN ESCALATION CLAUSE IN ITS BID. YOUR LETTER OF APRIL 25, 1966, TO GSA WAS IN RESPONSE TO A TELEPHONE INQUIRY FROM GSA CONCERNING BOTH THE "0" FIGURE AND ESCALATION PROVISION IN THE BID. IT IS THEREIN EXPLAINED THAT THE "0" WAS INTENDED TO MEAN THAT YOUR OFFER WAS OPEN FOR ACCEPTANCE FOR THE 60 DAY PERIOD STATED IN THE BID FORM "UNLESS A DIFFERENT PERIOD IS INSERTED BY THE BIDDER.' WITH REGARD TO THE ESCALATION CLAUSE, YOU ASKED THAT YOU BE PERMITTED TO DELETE IT FROM THE BID AND HAVE THE $19,495 FIGURE CONSIDERED YOUR FIRM AND TOTAL FIGURE.

THE REPORT FROM GSA INDICATES THAT WHILE THE "O" FIGURE WAS CONSIDERED AS BEING SOMEWHAT AMBIGUOUS IN MEANING, NO DECISION WAS MADE TO REJECT YOUR BID FOR THIS REASON. HOWEVER, IT WAS CONCLUDED THAT THE ESCALATION PROVISION DID MAKE THE BID NONRESPONSIVE AND, THEREFORE, IT MUST BE REJECTED AS REQUIRED BY FEDERAL PROCUREMENT REGULATIONS 1-2.407-4 (A), WHICH PROVIDES THAT WHERE THE IFB DOES NOT CONTAIN A PRICE ESCALATION CLAUSE, BIDS WHICH CONTAIN ESCALATION WITH NO CEILING SHALL BE REJECTED UNLESS A CLEAR BASIS FOR EVALUATION EXISTS.

WE MUST AGREE WITH THE ADMINISTRATIVE POSITION THAT INCLUSION OF THE INDEFINITE ESCALATION CLAUSE IN YOUR BID RENDERED IT NONRESPONSIVE AND PROPERLY FOR REJECTION UNDER THE CITED REGULATION. IN THE FORM SUBMITTED, IT WOULD BE IMPOSSIBLE TO EVALUATE YOUR BID ON AN EQUAL BASIS WITH OTHER BIDS, SINCE THE MAXIMUM AMOUNT, ABOVE WHICH THE BID PRICE COULD NOT ESCALATE, WAS UNDETERMINABLE. 38 COMP. GEN. 253. MOREOVER, THE REQUEST AND OFFER TO DELETE THIS PROVISION FROM THE BID COULD NOT PROPERLY BE CONSIDERED OR PERMITTED SINCE TO DO SO WOULD BE PREJUDICIAL TO THE OTHER BIDDERS. 38 ID. 612. ACCORDINGLY, YOUR PROTEST AGAINST REJECTION OF YOUR BID MUST BE DENIED.

IT SHOULD BE NOTED HOWEVER, THAT IN ADDITION TO THE DECISION TO REJECT YOUR BID FOR THE REASON HERETOFORE DISCUSSED, IT WAS ULTIMATELY DECIDED TO REJECT ALL BIDS AND READVERTISE. THE BASIS FOR THIS DECISION WAS TWOFOLD. FIRST, IT WAS FELT THAT THE UNAUTHORIZED STATEMENT OF THE GSA REPRESENTATIVE CONCERNING THE ACCEPTABILITY OF ESCALATION CLAUSES IN THE BIDS WAS MISLEADING AND PREJUDICIAL TO AT LEAST TWO OF THE BIDDERS. SECOND, SINCE THE INCREASE IN UNION WAGES WAS AN IMMINENT POSSIBILITY IT WAS BELIEVED THAT THE IFB SHOULD HAVE BEEN AMENDED TO ALLOW ESCALATION ON A UNIFORM BASIS SO THAT ALL POTENTIAL BIDDERS WOULD HAVE BEEN ON AN EQUAL BASIS IN THIS REGARD, AND THE GOVERNMENT WOULD HAVE GAINED THE ADVANTAGE OF TRULY COMPETITIVE BIDDING, WITHOUT THE INCLUSION OF AMOUNTS TO COVER CONTINGENCIES WHICH MAY NEVER MATERIALIZE. ALTHOUGH IT IS OUR OPINION THAT BIDS SHOULD BE REJECTED AFTER THEY HAVE BEEN PUBLICLY OPENED ONLY FOR THE MOST COGENT REASONS, WE BELIEVE THE CIRCUMSTANCES IN THE INSTANT CASE PRESENT SUCH REASONS, AND WE ARE THEREFORE ADVISING THE ADMINISTRATOR OF GENERAL SERVICES ADMINISTRATION THAT WE SEE NO VALID BASIS FOR OBJECTION TO SUCH ACTION UNDER IFB 3TTM-317.