B-159639, OCTOBER 28, 1966, 46 COMP. GEN. 371

B-159639: Oct 28, 1966

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THE ADMINISTRATIVE DETERMINATION THAT A CONTRACTOR IS CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT THAT IS ACCEPTED BY THE GENERAL ACCOUNTING OFFICE IN THE ABSENCE OF EVIDENCE THE DETERMINATION WAS BASED UPON ERROR. A DETERMINATION BY A CONTRACTING OFFICER BASED ON AN AFFIRMATIVE PREAWARD SURVEY THAT A LOW BIDDER IS A RESPONSIBLE BIDDER THEREFORE WILL NOT BE QUESTIONED. THE AWARD OF A CONTRACT TO A LOW BIDDER WHO AFTER THE EXPIRATION OF A 60- DAY BID ACCEPTANCE PERIOD EXTENDED THE BID ACCEPTANCE TIME IS A VALID AWARD. REJECTION OF ALL BIDS AND CANCELLATION OF THE INVITATION IS NOT REQUIRED. THE SECOND LOW BID SO MUCH HIGHER IN PRICE THAN THE ACCEPTABLE LOW BID IS NOT WITHIN THE SCOPE OF THE REGULATION.

B-159639, OCTOBER 28, 1966, 46 COMP. GEN. 371

BIDDERS - QUALIFICATIONS - ADMINISTRATIVE DETERMINATIONS - FINALITY. THE ADMINISTRATIVE DETERMINATION THAT A CONTRACTOR IS CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT THAT IS ACCEPTED BY THE GENERAL ACCOUNTING OFFICE IN THE ABSENCE OF EVIDENCE THE DETERMINATION WAS BASED UPON ERROR, FRAUD OR FAVORITISM, AND A DETERMINATION BY A CONTRACTING OFFICER BASED ON AN AFFIRMATIVE PREAWARD SURVEY THAT A LOW BIDDER IS A RESPONSIBLE BIDDER THEREFORE WILL NOT BE QUESTIONED. BIDS - ACCEPTANCE TIME LIMITATION - EXTENSION - AFTER EXPIRATION. THE AWARD OF A CONTRACT TO A LOW BIDDER WHO AFTER THE EXPIRATION OF A 60- DAY BID ACCEPTANCE PERIOD EXTENDED THE BID ACCEPTANCE TIME IS A VALID AWARD, THE BIDDER WILLING TO ACCEPT AN AWARD ON THE BASIS OF THE BID AS SUBMITTED HAVING WAIVED HIS RIGHT TO REFUSE TO PERFORM UNDER A CONTRACT AWARD, AND THE WAIVER OF THE TIME LIMITATION NOT COMPROMISING THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM OR PREJUDICING THE ONLY OTHER BIDDER, REJECTION OF ALL BIDS AND CANCELLATION OF THE INVITATION IS NOT REQUIRED. BIDS - ACCEPTANCE TIME LIMITATION - EXTENSION - AFTER EXPIRATION. THE FAILURE OF THE CONTRACTING OFFICER TO REQUEST AN EXTENSION OF THE BID ACCEPTANCE PERIOD FROM THE ONLY OTHER BIDDER UNDER AN INVITATION FOR BIDS, WHOSE BID PRICE GREATLY EXCEEDED THAT OF THE LOW BIDDER DOES NOT VIOLATE PARAGRAPH 2-404.1/C) OF THE ARMED SERVICES PROCUREMENT REGULATION RELATING TO REQUESTING TIME EXTENSIONS FROM BIDDERS SHOULD ADMINISTRATIVE DIFFICULTIES BE ENCOUNTERED AFTER BID OPENING WHICH MIGHT DELAY AWARD BEYOND BIDDERS' ACCEPTANCE PERIODS, AND THE CONTRACTING OFFICER HAVING THE DUTY TO REQUEST EXTENSION OF BID ACCEPTANCE TIME ONLY FROM THE ,SEVERAL LOWEST BIDDERS", THE SECOND LOW BID SO MUCH HIGHER IN PRICE THAN THE ACCEPTABLE LOW BID IS NOT WITHIN THE SCOPE OF THE REGULATION.

TO ENGLISH, CIANCIULLI AND REISMAN, OCTOBER 28, 1966:

WE REFER TO YOUR TELEGRAM OF JULY 7, 1966, AND YOUR LETTER OF JULY 19, 1966, AND ENCLOSURES, PROTESTING ON BEHALF OF YOUR CLIENT, SIMMON BROS., INC., AGAINST THE AWARD OF A CONTRACT BY THE DEPARTMENT OF THE AIR FORCE TO BELFORT INSTRUMENT COMPANY FOR FURNISHING 965 PRINTERS, PROJECTION PHOTOGRAPHIC TYPE EN-91, IN ACCORDANCE WITH SPECIFICATION MIL-P-55419 TOGETHER WITH DATA AND REPAIR PARTS.

INVITATION FOR BIDS NO. 33-657-66-165, AS AMENDED, COVERING THE ABOVE DESCRIBED PRINTERS WAS ISSUED BY AFSC AERONAUTICAL SYSTEMS DIVISION, WRIGHT-PATTERSON AIR FORCE BASE ON FEBRUARY 17, 1966. TWO BIDS WERE RECEIVED AND OPENED ON MARCH 29, 1966. BELFORT INSTRUMENT COMPANY SUBMITTED THE LOW BID OF $378,525. YOUR CLIENT, SIMMON BROS., SUBMITTED A BID OF $659,562.91. AWARD WAS MADE TO BELFORT INSTRUMENT COMPANY ON JUNE 28, 1966, AT ITS BID PRICE.

IN YOUR LETTER OF JULY 19 YOU CONTEND THAT THE LOW BID OF BELFORT INSTRUMENT COMPANY WAS COMPLETELY UNREALISTIC AND THAT BELFORT WOULD NOT BE ABLE TO MEET THE DELIVERY SCHEDULE SET FORTH IN THE INVITATION FOR BIDS. YOU ALSO CONTEND THAT THE AWARD MADE TO BELFORT ON JUNE 28 WAS ILLEGAL SINCE AS OF THAT DATE THE 60-DAY PERIOD FOR ACCEPTANCE OF BELFORT'S BID HAD EXPIRED AND THERE WAS, THEREFORE, NO PENDING OFFER AVAILABLE FOR THE AIR FORCE TO ACCEPT IN ORDER TO CREATE A CONTRACT. YOU CITE 42 COMP. GEN. 604 AND B-137396, DECEMBER 30, 1958, IN SUPPORT OF THIS CONTENTION. YOU FURTHER STATE THAT SIMMON BROS., WAS NOT REQUESTED TO EXTEND THE 60 DAY ACCEPTANCE PERIOD OF ITS BID IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 2-404.1/C), ARMED SERVICES PROCUREMENT REGULATION, AND THAT BELFORT, AT BEST, GAVE ONLY AN ORAL EXTENSION OF ITS BID.

WITH RESPECT TO YOUR FIRST CONTENTION, WE HAVE SONSISTLY HELD THAT WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT AND, IN THE ABSENCE OF EVIDENCE THAT A DETERMINATION OF A BIDDER'S CAPABILITY WAS BASED UPON ERROR, FRAUD OR FAVORITISM, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY. BY LETTER DATED SEPTEMBER 23, 1966, TO OUR OFFICE, THE DEPARTMENT OF THE AIR FORCE REPORTS THAT BELFORT CONFIRMED ITS QUOTED PRICE BY LETTER DATED APRIL 19, 1966, AND THAT A COMPLETELY AFFIRMATIVE PREAWARD SURVEY ON BELFORT WAS RECEIVED BY THE CONTRACTING OFFICER, WHO MADE A FORMAL DETERMINATION THAT BELFORT WAS, IN FACT, A RESPONSIBLE CONTRACTOR. ON THE BASIS OF THE RECORD BEFORE US WE HAVE NO REASON TO QUESTION THE CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION REGARDING BELFORT'S CAPABILITIES TO PRODUCE IN ACCORDANCE WITH THE CONTRACT REQUIREMENTS.

IN REGARD TO YOUR SECOND CONTENTION, IT IS NOTED THAT THE 60-DAY BID ACCEPTANCE PERIOD ENDED ON SATURDAY MAY 28, 1966, WHICH OCCURRED ON THE MEMORIAL DAY WEEKEND. IT IS REPORTED THAT ON THE FIRST WORKING DAY THEREAFTER (TUESDAY MAY 31, 1966) THE AIR FORCE REQUESTED AND RECEIVED AN EXTENSION OF THE TIME FOR ACCEPTANCE OF ITS BID FROM BELFORT BY LETTER DATED MAY 31, 1966, READING IN ITS ENTIRETY AS FOLLOWS:

CONFIRMING OUR TELEPHONE CONVERSATION OF TODAY, WE HEREBY GRANT AN EXTENSION OF FORTY-FIVE (45) DAYS FROM MAY 29, 1966, FOR ACCEPTANCE OF THE ABOVE INVITATION FOR BIDDING.

THE CONTRACTING OFFICER'S REPORT STATES THAT WHILE THE EXTENSION WAS NOT REQUESTED OR RECEIVED PRIOR TO EXPIRATION OF THE ORIGINAL 60 DAY PERIOD, IT WAS CONSIDERED IN THE BEST INTEREST OF THE GOVERNMENT TO PERMIT THE BIDDER TO WAIVE THE TIME LIMITATION SINCE, IN HIS OPINION, SUCH TIME LIMITATION WAS SOLELY FOR THE PROTECTION OF THE BIDDER AND MAY BE WAIVED BY HIM IF HE IS STILL WILLING TO ACCEPT THE AWARD. WHILE WE QUESTION WHETHER THE TIME LIMITATION WAS SOLELY FOR THE PROTECTION OF THE BIDDER DURING THE PERIOD FROM BID OPENING UNTIL EXPIRATION OF THE ACCEPTANCE PERIOD SET OUT IN THE BIDS, IT IS CLEAR THAT EXPIRATION OF THE ACCEPTANCE PERIOD OPERATED TO DEPRIVE THE GOVERNMENT OF ANY RIGHT TO CREATE A CONTRACT BY ACCEPTANCE ACTION AND TO CONFER UPON THE BIDDER A RIGHT TO REFUSE TO PERFORM ANY CONTRACT AWARDED TO HIM THEREAFTER. THUS, SINCE THE ONLY RIGHT WHICH IS CONFERRED BY EXPIRATION OF THE ACCEPTANCE PERIOD IS CONFERRED UPON THE BIDDER, IT FOLLOWS THAT THE BIDDER MAY WAIVE SUCH RIGHT IF FOLLOWING EXPIRATION OF THE ACCEPTANCE PERIOD, HE IS STILL WILLING TO ACCEPT AN AWARD ON THE BASIS OF THE BID AS SUBMITTED. WE HAVE SO HELD. - B 143404, NOVEMBER 25, 1960; 42 COMP. GEN. 604, 606. IN THE INSTANT CASE, BELFORT GRANTED A 45-DAY EXTENSION FOR ACCEPTANCE OF ITS BID AND THE AIR FORCE AWARDED THE CONTRACT WITHIN THIS EXTENDED PERIOD. THE FACT THAT SUCH EXTENSION WAS NOT REQUESTED NOR RECEIVED PRIOR TO EXPIRATION OF THE ORIGINAL 60-DAY PERIOD DOES NOT, IN OUR OPINION, ALTER THE CONCLUSION REACHED SEE 19 COMP. GEN. 356 AND 34 ID. 535 WHERE, AFTER THE REJECTION OF ALL BIDS, OUR OFFICE AUTHORIZED THE ACCEPTANCE OF THE ORIGINAL LOW BID UPON REINSTATEMENT OF THE INVITATION FOR BIDS IF THE BIDDERS IN THOSE CASES WERE WILLING TO ACCEPT AWARD ON THE BASIS OF THEIR ORIGINAL BIDS.

WE DO NOT FIND THE DECISIONS REPORTED AT 42 COMP. GEN. 604 AND B 137396, DECEMBER 30, 1958, TO BE CONTROLLING HERE, SINCE THEY ARE READILY DISTINGUISHABLE ON THE FACTS INVOLVED. IN 42 COMP. GEN. 604, THE LOW BIDDER DELIBERATELY SELECTED A 20-DAY ACCEPTANCE PERIOD RATHER THAN GRANTING THE PROCUREMENT AGENCY THE USUALLY CONTEMPLATED BID ACCEPTANCE PERIOD OF 60 DAYS. THE SECOND LOW BIDDER GRANTED THE USUAL 60 DAYS FOR ACCEPTANCE. DUE TO THE WORKLOAD IN THE PROCUREMENT AGENCY, AND OTHER CIRMUMSTANCES, THE LOW BIDDER'S 20-DAY ACCEPTANCE PERIOD WAS INADVERTENTLY ALLOWED TO EXPIRE. MORE THAN 2 WEEKS AFTER SUCH EXPIRATION, THE LOW BIDDER GRANTED AN ADDITIONAL 14 DAYS EXTENSION TO ITS BID ACCEPTANCE PERIOD. THE SECOND LOW BIDDER GRANTED AN ADDITIONAL 31-DAYS EXTENSION PRIOR TO EXPIRATION OF ITS ORIGINAL BID ACCEPTANCE PERIOD. THE ISSUE PRESENTED WAS WHETHER AWARD SHOULD BE MADE TO THE LOW BIDDER NOT WHETHER A VALID AWARD COULD BE MADE SINCE WE RECOGNIZED THAT IF AN AWARD WERE MADE TO THE LOW BIDDER, IT WAS PROBABLE THE COURTS WOULD HOLD THAT THE RESULTING CONTRACT WOULD BE ENFORCEABLE. HOWEVER, WE CONCLUDED THAT SUCH AN AWARD WOULD COMPROMISE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. IN THAT CONNECTION, WE POINTED OUT THAT THE LOW BIDDER BY LIMITING ITS BID ACCEPTANCE PERIOD TO 20 DAYS ASSUMED THE RISK THAT THE GOVERNMENT, DUE TO UNFORESEEN CAUSES, MIGHT BE UNABLE TO ACCEPT WITHIN 20 DAYS BUT, AT THE SAME TIME, IT DID NOT ASSUME THE RISK OF A PRICE INCREASE IN THE SUPPLIES DURING THE FOLLOWING 40-DAY PERIOD AS DID THE SECOND LOW BIDDER IN GRANTING 60 DAYS FOR ACCEPTANCE. THE LOW BIDDER, IN EFFECT, SOUGHT AND GAINED AN ADVANTAGE AFTER BID OPENING IN THE NATURE OF AN OPTION NOT SOUGHT BY THE OTHER BIDDERS, OF RENEWING ITS BID IN SHORT INCREMENTS OR ALLOWING IT TO LAPSE AS DICTATED BY MARKET CONDITIONS. UNDER THESE CIRCUMSTANCES WE BELIEVED THAT THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WOULD BEST BE SERVED BY MAKING AN AWARD TO THE SECOND LOW BIDDER. SIGNIFICANTLY, IT WAS ALSO STATED: "WE RECOGNIZE THE FACT THAT SITUATIONS MAY ARISE, SUCH AS IMPROPER REJECTION OF ALL BIDS, WHERE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM IS BETTER SERVED BY ACCEPTANCE OF SUCH A REJECTED BID THAN BY READVERTISING, BUT THIS IS NOT, IN OUR OPINION, SUCH A CASE;,

AN ALMOST IDENTICAL SITUATION TO THAT FOUND IN 42 COMP. GEN. 604 WAS PRESENTED IN B-137396, DECEMBER 30, 1956, AND WE CONCLUDED THAT ACTION TO UPSET AWARDS TO HIGHER BIDDERS WHOSE BID ACCEPTANCE PERIODS HAD NOT EXPIRED WOULD NOT BE WARRANTED.

BY WAY OF CONTRAST, BELFORT, IN THE INSTANT CASE, DID NOT LIMIT ITS BID ACCEPTANCE PERIOD TO LESS THAN 60 DAYS IN ORDER TO GAIN AN ADVANTAGE OVER OTHER POSSIBLE BIDDERS. WE THEREFORE DO NOT BELIEVE THAT THE CONTRACTING OFFICER'S DECISION TO ALLOW BELFORT TO WAIVE THE EXPIRATION OF ITS BID ACCEPTANCE PERIOD CAN BE SAID TO HAVE COMPROMISED THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM OR RESULTED IN PREJUDICE TO SIMMONS BROS. NEITHER DO WE THINK THAT THE ALTERNATIVE PROCEDURE LEFT OPEN TO THE CONTRACTING OFFICER HAD HE NOT ACCEPTED BELFORT'S BID (I.E. CANCELLATION OF THE INVITATION FOR BIDS AND READVERTISEMENT OF THE PROCUREMENT) WOULD HAVE BEEN PROPER SINCE THE EXPIRATION OF BELFORT'S BID UNDER THE CIRCUMSTANCES PRESENTED HERE DID NOT, IN OUR OPINION, CONSTITUTE A "COMPELLING REASON" TO REJECT ALL BIDS AND CANCEL THE INVITATION ESPECIALLY WHEN CONSIDERED IN THE LIGHT OF THE HARM THAT WOULD BE CAUSED TO BELFORT BY EXPOSURE OF ITS BID. SEE ASPR 2-404.1/A).

MOREOVER, THE CONTRACTING OFFICER'S FAILURE TO REQUEST AN EXTENSION OF THE BID ACCEPTANCE PERIOD FROM SIMMON BROS., DID NOT, IN OUR OPINION, VIOLATE THE PROVISIONS OF ASPR 2-404.1/C) RELATING TO REQUESTING TIME EXTENSIONS FROM BIDDERS SHOULD ADMINISTRATIVE DIFFICULTIES BE ENCOUNTERED AFTER BID OPENING WHICH MIGHT DELAY AWARD BEYOND BIDDERS' ACCEPTANCE PERIODS. THESE PROVISIONS IMPOSE A DUTY UPON CONTRACTING OFFICERS TO REQUEST EXTENSION ONLY FROM THE "SEVERAL LOWEST BIDDERS" AND IMPLIEDLY RELIEVE SUCH OFFICERS FROM THIS DUTY IN REGARD TO BIDDERS WHOSE BIDS ARE NOT WITHIN SUCH CATEGORY. THE AIR FORCE STATES THAT SIMMON BROS., WAS NOT REQUESTED TO EXTEND ITS BID ACCEPTANCE PERIOD BECAUSE SIMMON'S BID WAS SO MUCH HIGHER THAN BELFORT'S THAT IT CLEARLY DID NOT COME WITHIN THE SCOPE OF ASPR 2-404.1 (C). WE CANNOT DISAGREE WITH THE AIR FORCE DETERMINATION IN THIS RESPECT.

IN VIEW OF THE FOREGOING CONSIDERATIONS WE SEE NO BASIS UPON WHICH OUR OFFICE WOULD BE JUSTIFIED IN DISTURBING THE AWARD MADE TO BELFORT. ACCORDINGLY, YOUR PROTEST IS DENIED.