B-159799, SEP. 21, 1966

B-159799, SEP. 21, 1966

TO BEAVER HOUSE AND WINDOW CLEANING CO., INC.:

REFERENCE IS MADE TO YOUR TELEGRAMS OF JULY 28 AND AUGUST 1, 1966, PROTESTING AGAINST THE AWARD OF TWO CONTRACTS UNDER UNITED STATES COAST GUARD INVITATIONS FOR BIDS (IFB) NOS. 03-21101-67 AND 03-21115-67 DATED JUNE 24 AND JULY 5, 1966, RESPECTIVELY. THE SUBJECT INVITATIONS REQUESTED BIDS FOR FURNISHING CERTAIN CUSTODIAL SERVICES AT THE GOVERNORS ISLAND COAST GUARD BASE, NEW YORK, FOR THE PERIOD AUGUST 1, 1966, THROUGH JUNE 30, 1967.

YOU CONTEND THAT AWARDS UNDER BOTH INVITATIONS SHOULD HAVE BEEN MADE TO YOUR COMPANY SINCE IT SUBMITTED THE LOWEST RESPONSIVE BIDS ON A COMBINED BASIS UNDER THE TWO INVITATIONS. IT IS POINTED OUT IN THIS CONNECTION THAT YOUR TWO COMBINED BIDS TOTAL $53,265.96 LESS THAN THE AWARDS MADE TO THE SEPARATE LOW BIDDERS UNDER EACH INVITATION.

THE FOUR LOWEST BIDS SUBMITTED IN RESPONSE TO IFB 03-21101-67 WERE OPENED ON JULY 21, 1966, WITH THE FOLLOWING RESULT:

CHART

BIDDER TOTAL CONTRACT PRICE

BEAVER HOUSE AND WINDOW

CLEANING CO., INC. $60,398.47 MARITIME

MAINTENANCE AND

LABOR SUPPLIERS, INC. 109,146.40 ALPINE

WINDOW CLEANING COMPANY 112,343.00 PRACTICAL

CLEANING COMPANY 114,950.00

SINCE YOUR BID APPEARED UNREASONABLY LOW WHEN COMPARED WITH THE OTHER BIDS AND THE ADMINISTRATIVE COST ESTIMATE OF $110,000, THE CONTRACTING OFFICER REQUESTED THAT YOU VERIFY THE CORRECTNESS OF YOUR LOW BID. LETTER DATED JULY 25, 1966, YOU CONFIRMED YOUR BID AS SUBMITTED.

BASED ON THE FOREGOING, THE CONTRACTING OFFICER CONCLUDED THAT ACCEPTANCE OF YOUR BID WOULD BE UNFAIR TO YOU, THE OTHER BIDDERS AND TO THE GOVERNMENT. IT IS ADMINISTRATIVELY REPORTED THAT FROM EXPERIENCE GAINED ON PREVIOUS CONTRACTS FOR THE SAME WORK, IT WAS KNOWN THAT PROPER PERFORMANCE OF THE RESULTING CONTRACT WOULD BE IMPOSSIBLE AT YOUR BID PRICE. THE PROCUREMENT OFFICE HAS STATED THAT MINIMUM LABOR COSTS ALONE ON A MONTHLY BASIS WOULD EXCEED YOUR PER MONTH BID FOR ITEMS 1-5 BY $2,162.03. YOUR BID WAS THEREFORE REJECTED UNDER THE PROVISIONS OF FPR SEC. 1-2.405-3/D) (5) WHICH PROVIDE AS FOLLOWS:

"/5) WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS, IN WHICH CASE IT MAY BE REJECTED. * * *.'

YOUR ATTEMPT AFTER BID OPENING TO INCREASE YOUR BID FROM $5,022.77 PER MONTH TO $9,500 PER MONTH WAS PROPERLY REJECTED BY THE CONTRACTING OFFICER SINCE TO DO SO WOULD HAVE BEEN THE SAME AS PERMITTING YOU TO SUBMIT A NEW BID AFTER 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. 34 COMP. GEN. 82; 35 ID. 33; 41 ID. 203.

THE FOLLOWING REFLECTS THE BIDS SUBMITTED IN RESPONSE TO IFB 03 21115-67, OPENED ON JULY 22, 1966:

CHART

TOTAL CONTRACT DISCOUNT

BIDDER PRICE TERMS

BEAVER HOUSE AND WINDOW

CLEANING CO., INC. $40,182.45 NET

MARITIME MAINTENANCE AND

LABOR SUPPLIERS, INC. 40,263.30 2 PERCENT -

20 DAYS

PRACTICAL CLEANING CONTRACTORS 40,425.00 NET

ALPINE WINDOW CLEANING COMPANY 80,850.00 NET

IN EVALUATING THE BIDS, THE CONTRACTING OFFICER TOOK INTO CONSIDERATION THE 2 PERCENT DISCOUNT OFFERED BY MARITIME, AND AWARDED THE CONTRACT TO IT AS THE LOW BIDDER ON JULY 29, 1966. YOU CONTEND THAT CONSIDERATION OF THE OFFERED DISCOUNT WAS IMPROPER UNDER ARTICLE 7 (A) OF STANDARD FORM 33- A,"BIDDING INSTRUCTIONS, TERMS, AND CONDITIONS (SUPPLY CONTRACT)," WHICH PROVIDES THAT PROMPT PAYMENT DISCOUNTS OFFERED FOR PAYMENT IN LESS THAN 20 DAYS WILL NOT BE CONSIDERED IN EVALUATING BIDS FOR AWARD UNLESS SPECIFIED IN THE INVITATION. HOWEVER, IT WAS SPECIFICALLY PROVIDED ON PAGE 12 (ARTICLE 19 ENTITLED "DISCOUNTS") OF THE INVITATION THAT:

"PARAGRAPH 7 (A) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS (SF-33) IS INAPPLICABLE AND THE FOLLOWING PARAGRAPH IS SUBSTITUTED THEREFOR:

"PROMPT PAYMENT DISCOUNTS WILL BE EVALUATED ONLY ON THE BASIS OF PAYMENT WITHIN TWENTY (20 DAYS. NO DISCOUNT OFFERED FOR PAYMENT WITHIN LESS THAN TWENTY (20 DAYS WILL BE CONSIDERED IN EVALUATING BIDS FOR AWARD. BIDS OFFERING DISCOUNTS FOR PAYMENT WITHIN PERIODS IN EXCESS OF TWENTY (20) DAYS WILL BE EVALUATED FOR PURPOSES OF AWARD AS THOUGH THEY ARE DISCOUNTS OFFERED FOR PAYMENT WITHIN TWENTY (20) DAYS. THE OFFERED DISCOUNT OF A SUCCESSFUL BIDDER WILL FORM A PART OF THE AWARD, WHETHER OR NOT SUCH DISCOUNT WAS INCLUDED IN THE EVALUATION OF HIS BID, AND SUCH DISCOUNT WILL BE TAKEN IF PAYMENT IS MADE WITHIN THE DISCOUNT PERIOD.'

IT IS CLEAR THAT THE ABOVE-QUOTED PROVISIONS OF ARTICLE 19, FURNISHED PROSPECTIVE BIDDERS WITH ADEQUATE NOTICE THAT BIDS OFFERING DISCOUNTS FOR PAYMENT WITHIN 20 OR MORE DAYS WOULD BE CONSIDERED IN THE EVALUATION OF BIDS. UPON BEING ADVISED THAT YOU WERE NOT THE APPARENT LOW BIDDER ON THE INVITATION, YOU ORALLY OFFERED A 2-PERCENT 20-DAY DISCOUNT. HOWEVER, IN ACCORDANCE WITH THE PRINCIPLE STATED ABOVE, THIS MODIFICATION WAS PROPERLY REJECTED.

YOUR CONTENTION THAT YOU SHOULD HAVE BEEN AWARDED BOTH CONTRACTS BECAUSE THE TOTAL OF YOUR BIDS SUBMITTED IN RESPONSE TO THE TWO INVITATIONS WAS $53,264.96 LESS THAN THE TOTAL OF THE OTHER LOW BIDS RECEIVED IS WITHOUT MERIT. IN THIS RESPECT, YOUR ATTENTION IS INVITED TO A DECISION OF THIS OFFICE REPORTED AT 37 COMP. GEN. 186, 187, WHEREIN WE HELD:

"IN THE FIRST PLACE, THE OPPORTUNITY TO COMBINE BIDS UNDER THE TWO INVITATIONS WAS AVAILABLE ONLY TO THE BIDDERS WHO KNEW OF THE ISSUANCE OF BOTH INVITATIONS. ALL OF THE BIDDERS WHO MIGHT HAVE BEEN INTERESTED IN QUOTING ON THE TWO PROCUREMENTS WERE NOT NECESSARILY IN THIS POSITION, AND THE COURTS AND OUR OFFICE HAVE CONSISTENTLY HELD THAT UNDER THE COMPETITIVE BIDDING PROCEDURES ALL PROSPECTIVE BIDDERS FOR A PARTICULAR PROCUREMENT MUST BE IN A POSITION OF EQUALITY.

"SECONDLY, THE ISSUANCE OF TWO SEPARATE INVITATIONS WAS SUFFICIENT IN ITSELF TO RAISE THE PRESUMPTION IN THE MINDS OF BIDDERS THAT SEPARATE AND INDEPENDENT BIDS WERE REQUIRED. IN FACT, IN 8 COMP. GEN. 663, OUR OFFICE HELD THAT SEPARATE INVITATIONS DO REQUIRE SEPARATE PROPOSALS AND THAT AWARDS SHOULD BE BASED ON THE LOW BID RECEIVED IN RESPONSE TO EACH INVITATION. AND AS LATE AS FEBRUARY 14, 1956, WE HELD IN 35 COMP. GEN. 456 THAT A BIDDER MAY NOT TAKE ADVANTAGE OF AN INTERRELATIONSHIP BETWEEN TWO INVITATIONS. ALTHOUGH THE FACTS IN THESE TWO PUBLISHED DECISIONS DIFFER IN CERTAIN MATERIAL RESPECTS FROM THE FACTS HERE INVOLVED, THE CONCLUSIONS REACHED THEREIN ARE SUFFICIENTLY IN POINT TO HAVE CAUSED THE BIDDERS IN THIS CASE TO ASSUME THAT COMBINATION BIDS WOULD NOT BE PERMISSIBLE.

"FINALLY, AS A PRACTICAL CONSIDERATION, A CONCLUSION THAT THE LUMP SUM BID IN THIS CASE PROPERLY COULD BE ACCEPTED CONCEIVABLY COULD LEAD TO A SIMILAR CONCLUSION WHERE THE RELATED INVITATIONS WERE ISSUED BY SEPARATE GOVERNMENT AGENCIES WHICH, FOR OBVIOUS REASONS, WOULD PRODUCE AN UNWORKABLE SITUATION.'

THEREFORE, IT IS OUR OPINION THAT THE AWARDS MADE UNDER BOTH OF THE PROTESTED INVITATIONS WERE ..END :