B-160442, MAR. 3, 1967

B-160442: Mar 3, 1967

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NASA ACCEPTED THE CONTRACTOR'S PROPOSAL TO CHANGE THE LOCATION OF THE ROAD AS SPECIFIED IN THE INVITATION FOR BIDS (IFB E-67-2) TO AN AREA YOU HAD SUGGESTED BEFORE BIDS WERE SUBMITTED. WHO IS ANOTHER CONTRACTOR IN ELY. I SUBMITTED OUR SEPARATE BIDS FOR THE ROAD WHICH WAS ON THE SIDE OF THE MOUNTAIN WHICH APPEARED TO BE ROCK AS SHOWN ON THE PLANS AND SPECIFICATIONS. "SOMETIME LATER I WAS ADVISED THAT THE CONTRACT WAS AWARDED TO NEVIN MUNSON AND THAT NO CHANGES IN SPECIFICATIONS OR PLANS HAD BEEN MADE. I THEN FOUND OUT THAT THE ROAD WAS BUILT IN THE AREA WHERE I HAD SUGGESTED TO JOE TAPP AND HAD BEEN ADVISED THAT THE CONTRACTING OFFICER REFUSED TO ACCEPT OUR BIDS ON THE SITE WHERE IT WAS ALL DIRT WHICH INSTANCE OUR BIDS WOULD HAVE BEEN MUCH LOWER.

B-160442, MAR. 3, 1967

TO MR. ANGELO RECK, MR. HAL R. JENSEN:

YOUR LETTER OF NOVEMBER 10, 1966, TO SENATOR ALAN BIBLE, IN WHICH YOU REQUESTED AN INVESTIGATION OF A CONTRACT AWARDED FOR A ROAD CONSTRUCTION PROJECT AT THE SITE OF THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) HIGH RANGE FACILITY IN ELY, NEVADA, HAS BEEN FORWARDED TO THIS OFFICE FOR APPROPRIATE CONSIDERATION. YOUR COMPLAINT STEMS FROM THE FACT THAT AFTER AWARD OF THE CONTRACT, NASA ACCEPTED THE CONTRACTOR'S PROPOSAL TO CHANGE THE LOCATION OF THE ROAD AS SPECIFIED IN THE INVITATION FOR BIDS (IFB E-67-2) TO AN AREA YOU HAD SUGGESTED BEFORE BIDS WERE SUBMITTED. YOUR LETTER YOU STATE:

"THE FIRST PART OF AUGUST I TRAVELLED TO THE SITE TO SURVEY THE JOB IN ORDER THAT I MAY SUBMIT A BID. AT THIS TIME I SUGGESTED TO MR. JOE TAPP (SITE MANAGER) THAT MY BID WOULD BE CONSIDERABLY LESS IF IT WOULD BE POSSIBLE TO CHANGE THE ROAD TO THE EAST SIDE OF THE MOUNTAIN WHICH WOULD APPEAR TO BE ALL DIRT. MR. TAPP STATED THAT HE WOULD CONSULT THE CONTRACTING OFFICER, MR. CYRIL P. ATHANS (CONTRACT SPECIALIST AND CONTRACTING OFFICER'S REPRESENTATIVE) AND WOULD ADVISE ME ON MY SUGGESTION.

"I MADE A SPECIAL TRIP TO THE SITE TO SEE MR. JOE TAPP TO SEE WHAT MR. ATHANS HAD DECIDED. MR. TAPP SAID THAT THE CONTRACTING OFFICER, MR. ATHANS, ADVISED THAT HE DID NOT WANT THE ROAD ON THE NORTH EAST SIDE ON ACCOUNT OF SNOW.

"HAL JENSEN, WHO IS ANOTHER CONTRACTOR IN ELY, AND I SUBMITTED OUR SEPARATE BIDS FOR THE ROAD WHICH WAS ON THE SIDE OF THE MOUNTAIN WHICH APPEARED TO BE ROCK AS SHOWN ON THE PLANS AND SPECIFICATIONS.

"SOMETIME LATER I WAS ADVISED THAT THE CONTRACT WAS AWARDED TO NEVIN MUNSON AND THAT NO CHANGES IN SPECIFICATIONS OR PLANS HAD BEEN MADE.

"AFTER NEVIN MUNSON COMPLETED THE JOB, I THEN FOUND OUT THAT THE ROAD WAS BUILT IN THE AREA WHERE I HAD SUGGESTED TO JOE TAPP AND HAD BEEN ADVISED THAT THE CONTRACTING OFFICER REFUSED TO ACCEPT OUR BIDS ON THE SITE WHERE IT WAS ALL DIRT WHICH INSTANCE OUR BIDS WOULD HAVE BEEN MUCH LOWER.

"I FEEL THAT AS A GOVERNMENT PROJECT ALL BIDDERS SHOULD HAVE BEEN NOTIFIED OF ANY CHANGES IN SPECIFICATIONS OR PLANS IN ORDER THAT THEY COULD REVISE THEIR BIDS.

"BOTH MR. JENSEN AND MYSELF FEEL THAT AN INVESTIGATION SHOULD BE MADE AS TO WHY CHANGES WERE MADE WITHOUT CONTACTING THE OTHER BIDDERS IN ORDER THAT THEY COULD RESUBMIT THEIR BIDS WHICH IN THIS PARTICULAR INSTANCE WOULD HAVE BEEN MUCH LOWER.

"MR. JENSEN AND I FEEL THAT MAYBE SOME SPECIAL CONSIDERATION MAY HAVE BEEN GIVEN TO THE CONTRACTOR ON THIS PROJECT.'

WE HAVE RECEIVED ADMINISTRATIVE REPORTS FROM NASA WHICH CONFIRM THAT BEFORE BID OPENING MR. RECK DID SUGGEST A NORTHEAST ROUTE TO MR. TAPP, WHICH ROUTE APPARENTLY WAS TO SOME EXTENT SIMILAR, BUT NOT IDENTICAL, TO THE ONE SUBSEQUENTLY CONSTRUCTED BY NEVIN MUNSON. THE FOLLOWING IS THE CHRONOLOGY OF EVENTS AS REFLECTED BY THE ADMINISTRATIVE REPORTS.

A PERMANENT RECORD OF ALL VISITORS TO THE HIGH RANGE SITE IS SAID TO INDICATE THAT MR. RECK VISITED THE SITE ON JULY 20, 1966, ONE WEEK AFTER THE IFB HAD BEEN ISSUED. THE AGENCY REPORTS THAT DURING THIS VISIT MR. RECK DISCUSSED WITH MR. TAPP TWO POSSIBLE LOCATIONS FOR THE ROAD OTHER THAN THE ONE DESIGNATED BY THE IFB. ONE OF THESE TWO POSSIBILITIES WAS A NORTHEAST LOCATION AND THE OTHER WAS A ROUTE IN WHICH A PORTION OF THE ROAD WOULD RUN SOUTH, RATHER THAN NORTH, OF A GENERATOR AT THE SITE.

MR. TAPP IS THE MANAGER OF THE SITE, BUT WAS NOT RESPONSIBLE FOR THE PROCUREMENT, AND APPARENTLY HAD VERY LITTLE KNOWLEDGE OF THE DETAILS OR CIRCUMSTANCES PERTINENT TO THE CONSTRUCTION OF THIS ROAD. THEREFORE, HE ADVISED MR. RECK OF THIS FACT, AND SUGGESTED THAT HE TAKE UP SUCH MATTERS AS ALTERNATE ROUTES WITH THE CONTRACTING OFFICER'S REPRESENTATIVE WHOSE NAME, TITLE, AND PHONE NUMBER APPEARED ON THE FACE OF THE IFB. MR. TAPP ALSO TOLD MR. RECK THAT ALL QUESTIONS WOULD BE ANSWERED DURING THE BIDDER'S SITE EXAMINATION ON JULY 26, 1966. ADDITIONALLY, MR. TAPP CALLED MR. STANLEY MARKEY, HEAD, FACILITIES, ENGINEERING AND MAINTENANCE BRANCH, NASA, TO INFORM HIM THAT MR. RECK HAD SUGGESTED SOME ALTERNATE ROUTES. MR. MARKEY REPLIED THAT ALTERNATE ROUTES COULD BE BETTER DISCUSSED DURING THE FORTHCOMING SITE EXAMINATION. NO ATTEMPT WAS MADE TO IDENTIFY THE ALTERNATE ROUTES IN QUESTION.

THE REPORT INDICATES THAT NEITHER MR. RECK NOR MR. TAPP DISCUSSED THE PROPOSED ALTERNATE ROUTES WITH MR. ATHANS, AND THEREFORE, THAT THE ONE PERSON MOST DIRECTLY RESPONSIBLE FOR CONSIDERING SUCH MATTERS WAS TOTALLY UNAWARE OF THE CIRCUMSTANCES WHICH ULTIMATELY LED TO MR. RECK'S COMPLAINT. MR. TAPP RECALLS THAT HIS ONLY DISCUSSION WITH MR. RECK ABOUT SNOW WAS HIS OWN CONCERN FOR THE PROBABLE SNOW REMOVAL PROBLEM ON MR. RECK'S PROPOSED ROUTE, WHICH WOULD HAVE RUN SOUTH OF THE GENERATOR. DENIES HAVING TOLD MR. RECK THAT HE WOULD CONSULT WITH MR. ATHANS ON THE SUGGESTED ALTERNATE ROUTES, OR HAVING MENTIONED ANY REJECTION BY THE CONTRACTING OFFICER OF EITHER OF THE ALTERNATE ROUTES.

IT IS REPORTED THAT MR. TAPP'S ATTENDANCE AT THE SITE EXAMINATION MEETING ON JULY 26 WAS SPORADIC, SINCE HE WAS NOT RESPONSIBLE FOR THIS PROCUREMENT AND HAD OTHER DUTIES. MR. MARKEY DID NOT ATTEND. NOONE AT THE MEETING, INCLUDING MR. RECK, RAISED THE QUESTION OF A NORTHEAST ROUTE. HOWEVER, DURING THE MEETING BIDDERS DID RAISE A QUESTION REGARDING RELATIVELY MINOR CHANGES IN THE SPECIFIED ROUTE, AND THEY WERE ADVISED THAT ALTHOUGH NASA WOULD NOT AWARD A CONTRACT ON ANY BIDS BASED ON AN ALTERNATE ROUTE, IT WOULD LATER CONSIDER SUCH CHANGES IN THE SPECIFIED ROUTE FROM WHOMEVER WAS THE SUCCESSFUL CONTRACTOR. CONSEQUENTLY, WHEN THE ACTIVITY LATER RECEIVED BIDS OF $13,000 FROM NEVIN MUNSON AND SONS, $14,516 FROM MR. RECK AND $27,439 FROM MR. JENSEN, AND WHEN THE CONTRACT SUBSEQUENTLY WAS AWARDED TO THE LOW BIDDER ON SEPTEMBER 1, 1966, THE PROCUREMENT OFFICIALS WERE NOT COGNIZANT OF THE DEPARTURE FROM THE SPECIFICATIONS WHICH THE LOW BIDDER WAS TO PROPOSE ON SEPTEMBER 8, 1966. HOWEVER, AFTER EXAMINATION AND CONSIDERATION, THIS PROPOSAL WAS ACCEPTED AND THE CONTRACT MODIFIED ACCORDINGLY WITH NO CHANGE IN PRICE.

MR. RECK ALLEGES THAT THE AREA WHERE THE ROAD WAS ULTIMATELY CONSTRUCTED "WAS ALL DIRT IN WHICH INSTANCE OUR BIDS WOULD HAVE BEEN MUCH LOWER.' THE PROCURING ACTIVITY GRANTS THAT IT IS IMPOSSIBLE TO SAY WHAT THE BID PRICES WOULD HAVE BEEN IF ALL THREE BIDDERS HAD BEEN GIVEN AN OPPORTUNITY TO BID ON THE CONSTRUCTION OF A ROAD OVER THE ROUTE ULTIMATELY ACCEPTED BY THE GOVERNMENT. (PARENTHETICALLY, IT SHOULD BE NOTED THAT IN ORDER TO HAVE AFFORDED BIDDERS THIS OPPORTUNITY, THE AGENCY WOULD HAVE HAD TO TERMINATE THE LOW BIDDER'S CONTRACT AND READVERTISE ON THE BASIS OF THE CHANGED LOCATION.) HOWEVER, WE ARE INFORMED THAT NASA OFFICIALS ANALYZED THE COST OF THE LOW BIDDER'S PROPOSED ALTERNATE ROUTE AND DETERMINED THAT SUCH ROUTE WOULD BETTER SERVE THE ACTIVITY'S NEEDS AND WOULD INVOLVE NO REDUCTION IN CONTRACTOR EFFORT. THE ACTIVITY ALSO REMARKS THAT THE ROUTE ADOPTED WAS NOT "ALL DIRT," BUT RATHER WAS COMPOSED OF HEAVY ROCK TERRAIN WHICH REQUIRED BLASTING SIMILAR TO WHAT WOULD HAVE BEEN REQUIRED FOR THE ORIGINALLY SPECIFIED ROUTE. MOREOVER, EVEN ASSUMING CONSTRUCTION OF THE NORTHEAST ROUTE IS LESS EXPENSIVE THAN THE ORIGINALLY SPECIFIED ROUTE, IT IS QUESTIONED WHETHER THE 11 PERCENT ADVANTAGE OF THE LOW BID OVER MR. RECK'S BID, AND THE 53 PERCENT ADVANTAGE OVER MR. JENSEN'S BID, WOULD HAVE BEEN DISSIPATED IF BIDS HAD BEEN RECEIVED FOR THE NORTHEAST ROUTE.

WE FIND NOTHING IN THE ADMINISTRATIVE RECORD TO INDICATE THAT EITHER THE AWARD OR THE MODIFICATION OF THE CONTRACT WAS NOT MADE IN ENTIRE GOOD FAITH AND WITHOUT ANY PREARRANGEMENT OR HIDDEN UNDERSTANDING. NEITHER DO WE PERCEIVE ANY BASIS FOR SUSPECTING THAT THE EVENTS WHICH TRANSPIRED AFTER THE AWARD WOULD HAVE BEEN DIFFERENT HAD MR. RECK BEEN THE LOW BIDDER ON THE SPECIFIED ROUTE AND THEREFORE HAD RECEIVED THE CONTRACT. PRESUMABLY, HE COULD HAVE TAKEN THE SAME ACTION WITH THE SAME SUCCESS AS THE LOW BIDDER.

THE PROCUREMENT OFFICIALS CONCEDE THAT THE PLANNING FOR THE PROCUREMENT WAS OBVIOUSLY NOT AS THOROUGH AS IT SHOULD HAVE BEEN. IN THIS REGARD, THEY CONFESS THEY ARE NOW DISSATISFIED WITH THEIR DECISION WHICH RESULTED IN HAVING THE ROAD CONSTRUCTED IN THE AREA SUGGESTED BY MR. RECK AND BY THE LOW BIDDER, AND WISH THEY HAD STAYED WITH THE ORIGINAL PLANS. HOWEVER, THEY FELT THAT EXPENDITURE OF $3,000 FOR ARCHITECT-ENGINEERING SERVICES--- THAT BEING THE AMOUNT OF AN ESTIMATE WHICH THEY HAD OBTAINED FROM AN ENGINEER IN THE AREA OF THE SITE BEFORE ISSUING THE IFB--- COULD NOT BE JUSTIFIED IN THE LIGHT OF THE ESTIMATED $16,000 CONSTRUCTION COST.

THE PROCUREMENT OFFICIALS STATE THEIR REGRET THAT YOU BELIEVE THE LOW BIDDER MAY HAVE RECEIVED SOME PREFERENTIAL TREATMENT, AND RECOGNIZE THAT YOUR SUSPICIONS ARE UNDERSTANDABLE. ACCORDINGLY, THEY ARE REVIEWING THEIR PROCEDURES TO MINIMIZE THE POSSIBILITY OF ANY RECURRENCE OF THE PROBLEMS PRESENT IN THIS PROCUREMENT. HOWEVER, THEY BELIEVE THAT WHILE THE RECORD MAY INDICATE SOME BREAKDOWN IN COMMUNICATIONS AMONG NASA OFFICIALS, ALL ACTIONS WERE TAKEN IN GOOD FAITH, THERE WAS NO INTENTION TO FAVOR ONE BIDDER OVER ANOTHER, AND IN POINT OF FACT THE CONTRACTOR DID NOT RECEIVE PREFERENTIAL TREATMENT.

IN THE LIGHT OF THE CIRCUMSTANCES SET FORTH ABOVE, WE CONCLUDE THAT THERE IS NO LEGAL BASIS FOR OBJECTING TO THE ACTIONS TAKEN BY THE PROCUREMENT OFFICIALS.