B-160909, APRIL 19, 1967, 46 COMP. GEN. 745

B-160909: Apr 19, 1967

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AMBIGUOUS AS TO WHETHER A MAXIMUM DELIVERY SCHEDULE OF 90 DAYS WAS DESIRED OR WHETHER AN OFFER OF A LATER DELIVERY DATE WOULD BE WITHOUT PREJUDICE TO THE EVALUATION OF A BID. INADEQUATELY INFORMED BIDDERS OF THE STANDARDS THEIR BIDS HAD TO SATISFY WILL NOT BE DISTURBED AS CANCELLATION OF THE AWARD MADE TO THE LOWEST BIDDER IN GOOD FAITH WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT. WHEN EARLY DELIVERY IS NOT ESSENTIAL. BIDS - EVALUATIONS - DELIVERY PROVISIONS - ACCEPTANCE OF OTHER THAN REQUIRED DATE A RESERVATION TO THE GOVERNMENT IN AN INVITATION TO BID OF THE RIGHT TO MAKE AN AWARD TO THE RESPONSIVE BIDDER OFFERING THE CLOSEST DELIVERY TIME TO THE REQUIRED DELIVERY DATE WHEN NO RESPONSIBLE BID MEETING THE DELIVERY DATE SPECIFIED IS RECEIVED IS AN AMBIGUITY.

B-160909, APRIL 19, 1967, 46 COMP. GEN. 745

BIDS - EVALUATION - DELIVERY PROVISIONS - DESIRED AND LATER CUTOFF DATES ALTHOUGH AN AWARD TO THE LOW BIDDER OFFERING DELIVERY WITHIN 90 TO 120 DAYS AFTER RECEIPT OF AN ORDER UNDER AN INVITATION WHICH, AMBIGUOUS AS TO WHETHER A MAXIMUM DELIVERY SCHEDULE OF 90 DAYS WAS DESIRED OR WHETHER AN OFFER OF A LATER DELIVERY DATE WOULD BE WITHOUT PREJUDICE TO THE EVALUATION OF A BID, INADEQUATELY INFORMED BIDDERS OF THE STANDARDS THEIR BIDS HAD TO SATISFY WILL NOT BE DISTURBED AS CANCELLATION OF THE AWARD MADE TO THE LOWEST BIDDER IN GOOD FAITH WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT, FUTURE INVITATIONS, WHEN EARLY DELIVERY IS NOT ESSENTIAL, SHOULD PROVIDE A DESIRED DELIVERY DATE AND A LATER CUTOFF DATE. BIDS - EVALUATIONS - DELIVERY PROVISIONS - ACCEPTANCE OF OTHER THAN REQUIRED DATE A RESERVATION TO THE GOVERNMENT IN AN INVITATION TO BID OF THE RIGHT TO MAKE AN AWARD TO THE RESPONSIVE BIDDER OFFERING THE CLOSEST DELIVERY TIME TO THE REQUIRED DELIVERY DATE WHEN NO RESPONSIBLE BID MEETING THE DELIVERY DATE SPECIFIED IS RECEIVED IS AN AMBIGUITY, THE PROVISION NOT MEETING THE STANDARDS OF SECTION 1-1.316-2 (C) OF THE FEDERAL PROCUREMENT REGULATION, AS A BIDDER IS LEFT TO GUESS AT THE EXTENT OF DEVIATION WHICH WILL SATISFY THE GOVERNMENT, AND THE RESERVATION DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM, THE RESERVED RIGHT OF THE GOVERNMENT SHOULD BE ELIMINATED FROM THE BID FORM. 41 COMP. GEN. 599, MODIFIED.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, APRIL 19, 1967:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 9, 1967, IN RESPONSE TO OUR REQUEST FOR A REPORT ON A PROTEST FROM NATIONAL STEEL PARTITION COMPANY, INCORPORATED (NATIONAL), AGAINST AN AWARD UNDER INVITATION FOR BIDS NO. 5024-67-23 ISSUED JANUARY 12, 1967, BY THE SUPPLY DIVISION, VETERANS ADMINISTRATION HOSPITAL, PALO ALTO, CALIFORNIA, FOR 469 WARDROBE TYPE STEEL LOCKERS. NATIONAL CONTENDS THAT THE LOW BID, SUBMITTED BY LYON METAL PRODUCTS, INCORPORATED, OF BURLINGAME, CALIFORNIA (LYONS), WAS NOT RESPONSIVE TO THE DELIVERY DATE REQUIREMENTS AND, THEREFORE, THAT AWARD SHOULD BE MADE TO THE NEXT LOW BIDDER, NATIONAL, WHOSE BID WAS RESPONSIVE TO ALL TERMS OF THE INVITATION INCLUDING THE DELIVERY DATE REQUIREMENTS.

THE INVITATION, ON PAGE 3, PROVIDED: SPECIFY TIME FOR DELIVERY: -- ------ - DAYS AFTER RECEIPT OF ORDER (IF NO TIME FOR DELIVERY IS SPECIFIED, 90 DAYS WILL BE ALLOWED FOR DELIVERY)

VA FORM 10-1130 OF AUGUST 1965, A SUPPLEMENTARY FORM CONTAINING ADDITIONAL TERMS AND CONDITIONS, PROVIDES AT PARAGRAPH 1 (II):

(II) WHEN DELIVERY TIME IS SCHEDULED IN THE INVITATION, DELIVERY WILL BE MADE AS SCHEDULED. BIDS OFFERING DELIVERY DIFFERING FROM THAT REQUIRED WILL BE REJECTED AS NOT RESPONSIVE, UNLESS NO OTHERWISE RESPONSIVE BID IS RECEIVED OFFERING DELIVERY WITHIN THE REQUIRED TIME. IN SUCH EVENT, THE GOVERNMENT RESERVES THE RIGHT TO MAKE THE AWARD BASED ON THE CLOSEST DELIVERY TIME THERETO.

NO OTHER PROVISIONS IN THE INVITATION DEAL WITH DELIVERY DATES. PARTICULAR, THERE IS NO EXPLICIT MENTION OF A REQUIRED DELIVERY DATE.

THE PROTESTING BIDDER, NATIONAL, SUBMITTED A BID OF $54.50 PER LOCKER, OR $25,560.50 OVERALL, LESS 20 DAY PROMPT PAYMENT DISCOUNT OF ONE HALF OF 1 PERCENT, AND WITH 30 TO 90 DAY DELIVERY INDICATED IN THE APPROPRIATE SPACE ON PAGE 3 OF THE INVITATION. LYON OFFERED A BID PRICE OF $50.30 PER LOCKER, OR $23,591.64 TOTAL, NET, AND SPECIFIED IN THE PROPER SPACE THAT DELIVERY WOULD BE WITHIN 90 TO 120 DAYS AFTER RECEIPT OF AN ORDER.

ON FEBRUARY 16, 1967, THE CONTRACTING OFFICER AWARDED THE CONTRACT TO LYON, AS THE LOW RESPONSIVE BIDDER. NATIONAL ON THE NEXT DAY PROTESTED THAT THE LOW BID WAS NOT RESPONSIVE TO THE DELIVERY DATE REQUIREMENTS. NATIONAL CONTENDS THAT THE PROVISION ALLOWING 90 DAYS FOR DELIVERY UNLESS THE BIDDER INDICATED OTHERWISE, DEMONSTRATES THE GOVERNMENT'S INTENT TO LIMIT THE DELIVERY TIME TO 90 DAYS FOR ALL BIDDERS.

THE POSITION OF THE VETERANS ADMINISTRATION IS THAT THE 90 DAY DELIVERY PERIOD STATED ON PAGE THREE OF THE INVITATION WAS APPLICABLE ONLY WHEN NO OTHER DELIVERY DATE WAS INDICATED BY THE BIDDER BUT THAT THE BIDDER COULD INSERT A LONGER DELIVERY PERIOD WITHOUT PREJUDICE TO THE EVALUATION OF THE BID. BY THIS VIEW, IT MUST BE ASSUMED THAT ANY DELIVERY DATE SELECTED BY A BIDDER, SO LONG AS IT IS REASONABLE, IS RESPONSIVE TO THE DELIVERY DATE CONDITIONS SET OUT IN THE INVITATION.

WE HAVE UPHELD INVITATIONS PERMITTING THE BIDDER TO SELECT A DELIVERY DATE SO LONG AS SUCH DATE WAS WITHIN EITHER A STIPULATED OR A REASONABLE TIME AFTER THE "DESIRED" DATE STATED IN THE INVITATION. IN THESE CASES BIDS OFFERING DELIVERY AFTER THE "DESIRED" DATE HAVE BEEN REGARDED AS RESPONSIVE SO LONG AS SUCH OFFERED DATE WAS WITHIN THE STATED TIME LIMITATION OR IF NO TIME LIMIT WAS STATED WITHIN A REASONABLE TIME AFTER THE "DESIRED" DATE. SEE B-155989, FEBRUARY 24, 1965, AND B-155035, NOVEMBER 20, 1964.

THESE DECISIONS ARE DISTINGUISHABLE FROM THE CASE AT HAND BOTH IN THE FACT THE INVITATIONS CLEARLY CHARACTERIZED THE STATED DELIVERY DATES AS "DESIRED," AND BY OTHER TERMS INDICATING THAT IT WAS NOT VITAL TO THE RESPONSIVENESS OF THE BID TO OFFER TO MEET THE "DESIRED" DELIVERY DATE.

IN A MORE ANALOGOUS CASE, B-140071, SEPTEMBER 29, 1959, WE UPHELD THE CANCELLATION OF AN INVITATION WHERE A BIDDER HAD PROPOSED A DELIVERY DATE LATER THAN THAT STATED IN THE FOLLOWING INVITATION PROVISIONS:

DELIVERY SHALL BE MADE WITHIN ---------- CALENDAR DAYS AFTER RECEIPT BY THE CONTRACTOR OF DELIVERY ORDER. FAILURE OF THE BIDDER TO INSERT HEREIN ANY SPECIFIED NUMBER OF CALENDAR DAYS INDICATING DELIVERY TIME SHALL BE CONSTRUED TO MEAN THAT DELIVERY SHALL BE MADE WITHIN SEVENTY TWO (72) HOURS (MAXIMUM) EXCLUDING SATURDAY, SUNDAYS OR NATIONAL HOLIDAYS, AFTER RECEIPT BY THE CONTRACTOR OF DELIVERY ORDER. THIS INVITATION ALSO CONTAINED LANGUAGE RESEMBLING PARAGRAPH 1 (II) OF VA FORM 10-1130 OF AUGUST 1965, INFORMING PROSPECTIVE BIDDERS THAT ONLY BIDS OFFERING DELIVERY WITHIN "THE ACCEPTABLE TIME LIMITS STATED ELSEWHERE" WOULD BE CONSIDERED RESPONSIVE TO THE INVITATION'S DELIVERY REQUIREMENTS.

ON THIS BASIS, WE HELD: * * * IN SHORT, THE PLAIN FACT IS THAT THE PROCURING AGENCY FAILED TO SET FORTH ANY PLACE THE ACCEPTABLE TIME LIMITS. IN OUR VIEW THERE RESULTED A PATENT AMBIGUITY WHICH ALSO IS INDICATED BY THE APPARENT DIVERGENCE OF INTERPRETATION BY THE BIDDERS. ALLOW SUCH AMBIGUITY TO STAND WOULD BE INCONSISTENT WITH THE PURPOSES OF THE ADVERTISING STATUTES REQUIRING THE LETTING OF PUBLIC CONTRACTS AFTER ADVERTISING IN ORDER TO SECURE FOR THE GOVERNMENT THE BENEFITS FLOWING FROM FREE AND UNRESTRICTED COMPETITION. UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461. OBVIOUSLY, FREE AND UNRESTRICTED COMPETITION CANNOT BE OBTAINED UNLESS ALL BIDS ARE MADE ON THE SAME BASIS. UNDER THE CIRCUMSTANCES, WE THINK THE DEPARTMENT HAD NO CHOICE BUT TO REJECT ALL BIDS AND READVERTISE UNDER SPECIFICATIONS WHICH SPELLED OUT THE MISSING INFORMATION. * * *.

SEE ALSO B-129678, NOVEMBER 8, 1956; B-128405, AUGUST 3, 1956, AND SEPTEMBER 17, 1956.

FFR 1-1.316-2 (C) DIRECTS THAT ALL INVITATIONS "SHALL, WHEN APPROPRIATE, INFORM BIDDERS OR OFFERORS OF THE BASIS ON WHICH THEIR BIDS OR PROPOSALS WILL BE EVALUATED WITH RESPECT TO TIME OF DELIVERY OR PERFORMANCE.' THE UNCLEAR DELIVERY PROVISIONS OF THE PRESENT INVITATION DO NOT ADEQUATELY INFORM PROSPECTIVE BIDDERS OF WHAT STANDARDS THEIR BIDS ARE EXPECTED TO SATISFY. SPECIFICALLY IT IS NOT CLEAR WHETHER THE INVITATION ESTABLISHES A MAXIMUM ACCEPTABLE DELIVERY SCHEDULE OF 90 DAYS OR WHETHER THE BIDDER MAY, AS LYON DID, OFFER LATER DELIVERY WITHOUT PREJUDICE TO THE EVALUATION OF HIS BID. WE THEREFORE CONCLUDE THAT AWARD UNDER THIS INVITATION WAS IMPROPER, BECAUSE OF ITS AMBIGUOUS DELIVERY TERMS. HOWEVER, BECAUSE THE CONTRACT HAS BEEN AWARDED, AND BECAUSE THE CONTRACTING OFFICER APPARENTLY MADE AWARD UNDER THE INVITATION IN GOOD FAITH TO THE LOWEST BIDDER, WE DO NOT BELIEVE IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE CONTRACT AT THIS TIME. WE HAVE INFORMED THE PROTESTING BIDDER OF OUR DECISION NOT TO DISTURB THE PRESENT AWARD BY LETTER OF TODAY, COPY ENCLOSED.

FOR THE FUTURE, IT IS SUGGESTED THAT, IN DRAFTING INVITATIONS TO PROVIDE THAT EARLY DELIVERY IS NOT AN ESSENTIAL FACTOR, LANGUAGE SIMILAR TO THE CLAUSE SET OUT IN FPR 1-1.316-5 (C) WHICH PROVIDES BOTH A DESIRED DELIVERY DATE AND A LATER CUT-OFF DATE FOR RESPONSIVE BIDS, SHOULD BE USED.

ALTHOUGH WE HAVE UPHELD AS LEGALLY SUFFICIENT INVITATIONS SPECIFYING ONLY THE "DESIRED DELIVERY DATES, SO THAT THE RESPONSIVENESS OF OFFERED DELIVERY TERMS COULD ONLY BE GOVERNED BY A REASONABLENESS TEST, AS A MATTER OF POLICY WE FEEL SUCH OPEN ENDED DELIVERY TERMS ARE UNWISE IN THAT THEY AFFORD AN OPPORTUNITY FOR THE ARBITRARY INCLUSION OR EXCLUSION OF BIDS. EVEN GRANTING IMPARTIAL CONSIDERATION, THESE UNDEFINED DELIVERY TERMS CAN ONLY RESULT IN UNEVEN AND UNPREDICTABLE TREATMENT OF BIDDERS, BECAUSE REASONABLE MEN WILL DIFFER ON WHAT CONSTITUTES A REASONABLE DELIVERY DATE UNDER ANY GIVEN SET OF CIRCUMSTANCES.

THEREFORE, IN THE INTEREST OF PROVIDING AS CLEAR A GUIDE TO PROSPECTIVE BIDDERS AS POSSIBLE, WHERE EARLY DELIVERY IS NOT OF THE ESSENCE--- SUCH AS IN INVITATIONS STATING A DESIRED DELIVERY SCHEDULE-- THE INVITATION SHOULD STATE A FINAL ACCEPTABLE DATE AND CLEARLY ADVISE THAT BIDS OFFERING LATER DELIVERY WILL BE CONSIDERED NONRESPONSIVE.

FINALLY, WE NOTE VA FORM 10-1130 OF AUGUST 1965, PARAGRAPH 1 (II) PROVIDES THAT IN THE EVENT NO OTHERWISE RESPONSIVE BID IS RECEIVED OFFERING DELIVERY WITHIN THE STATED TIME "THE GOVERNMENT RESERVES THE RIGHT TO MAKE THE AWARD BASED ON THE CLOSEST DELIVERY TIME THERETO.' THINK THIS RESERVATION IS DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM. IN THE EVENT THE INVITATION SPECIFIED AN UNREALISTICALLY SHORT DELIVERY PERIOD, AWARD UNDER THIS RESERVATION COULD BE MADE TO BIDDER WHO CHOSE TO IGNORE THE DELIVERY PERIOD SET OUT IN THE INVITATION AND SUBSTITUTE A LATER DELIVERY DATE, EVEN THOUGH OTHER COMPETENT CONTRACTORS MIGHT WELL HAVE FAILED TO REPLY TO THE INVITATION BECAUSE OF THE UNREALISTICALLY SHORT DELIVERY REQUIREMENTS. FURTHER, THE PROVISION DOES NOT MEET THE STANDARDS OF FPR 1-1.316-2 (C) IN THAT THE BIDDER IS LEFT TO GUESS AT THE EXTENT OF DEVIATION WHICH WILL SATISFY THE GOVERNMENT IF THE BIDDER CHOOSES TO GAMBLE ON A BID OFFERING DELIVERY LATER THAN SPECIFIED.

WE DO NOT THINK THE ADVANTAGES GAINED THROUGH THE USE OF THIS RESERVATION, MAINLY THE AVOIDANCE OF EXTRA COSTS AND DELAY INCIDENT TO READVERTISING, CAN OFFSET THE HARM DONE THE COMPETITIVE BIDDING SYSTEM BY WRITING THIS AMBIGUITY INTO AN INVITATION.

THEREFORE, PARAGRAPH 1 (II) OF VA FORM 10-1130 OF AUGUST 1956, SHOULD BE REDRAFTED TO ELIMINATE REFERENCE TO A RESERVED RIGHT OF THE GOVERNMENT TO MAKE AWARD TO AN OTHERWISE RESPONSIVE BIDDER WHO OFFERS THE CLOSEST DELIVERY TIME TO THE REQUIRED DELIVERY DATE IN THOSE CASES WHERE NO RESPONSIVE BID MEETING THE DELIVERY DATE IS RECEIVED. TO THE EXTENT THAT THE FOREGOING IS IN CONFLICT WITH 41 COMP. GEN. 599,603, THE LATTER IS OVERRULED.