B-162000, SEP. 1, 1967

B-162000: Sep 1, 1967

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LOW BIDDER WHO LIMITED BID ACCEPTANCE TO 31 DAYS UNDER INVITATION WHICH PROVIDED FOR 90 DAY ACCEPTANCE PERIOD UNLESS DIFFERENT PERIOD WAS SPECIFIED HAD BID PROPERLY REJECTED AND FACT THAT CONTRACTING OFFICER DID NOT NOTIFY BIDDER THAT AN EXTENSION WAS REQUIRED AS SPECIFIED IN ASPR 2- 404.1 (C) IS NOT APPLICABLE SINCE AWARD WAS MADE WITHIN 90 DAYS CONTEMPLATED. WHEN FIVE OF SIX OFFERORS DID NOT VARY ACCEPTANCE TIME AND AWARD WAS MADE. WITHIN TIME SPECIFIED ANY REGULATION DESIGNED TO AVOID NEED FOR READVERTISEMENT IS NOT IN POINT. BECAUSE ITS BID ACCEPTANCE TIME EXPIRED PRIOR TO THE TIME THE AWARD WAS MADE. WHOSE ORIGINAL BID ACCEPTANCE PERIOD WAS STILL EFFECTIVE. PROVIDED FOR A BID ACCEPTANCE PERIOD OF 90 DAYS UNLESS A DIFFERENT PERIOD WAS SELECTED BY THE OFFEROR IN THE FOLLOWING WORDS: .

B-162000, SEP. 1, 1967

BIDS - ACCEPTANCE TIME - EXTENSION DECISION TO RANDALL MANUFACTURING CO., INC. PROTESTING REFUSAL OF SAN ANTONIO AIR MATERIAL AREA TO MAKE AWARD BECAUSE BID ACCEPTANCE TIME HAD EXPIRED. LOW BIDDER WHO LIMITED BID ACCEPTANCE TO 31 DAYS UNDER INVITATION WHICH PROVIDED FOR 90 DAY ACCEPTANCE PERIOD UNLESS DIFFERENT PERIOD WAS SPECIFIED HAD BID PROPERLY REJECTED AND FACT THAT CONTRACTING OFFICER DID NOT NOTIFY BIDDER THAT AN EXTENSION WAS REQUIRED AS SPECIFIED IN ASPR 2- 404.1 (C) IS NOT APPLICABLE SINCE AWARD WAS MADE WITHIN 90 DAYS CONTEMPLATED. WHEN FIVE OF SIX OFFERORS DID NOT VARY ACCEPTANCE TIME AND AWARD WAS MADE, WITHIN TIME SPECIFIED ANY REGULATION DESIGNED TO AVOID NEED FOR READVERTISEMENT IS NOT IN POINT.

TO RANDALL MANUFACTURING COMPANY, INCORPORATED:

WE REFER TO YOUR TELEGRAM OF JULY 10, 1967, AND SUBSEQUENT CORRESPONDENCE PROTESTING A REFUSAL TO MAKE AWARD TO RANDALL MANUFACTURING COMPANY, INCORPORATED (RANDALL), BECAUSE ITS BID ACCEPTANCE TIME EXPIRED PRIOR TO THE TIME THE AWARD WAS MADE, AND QUESTIONING THE PROPRIETY OF THE AWARD TO THE NEXT HIGHER OFFEROR, AMERICAN CHAIN AND CABLE COMPANY, INCORPORATED, WHOSE ORIGINAL BID ACCEPTANCE PERIOD WAS STILL EFFECTIVE, UNDER INVITATION FOR BIDS NO. F41608-67-B-1689, ISSUED MARCH 20, 1967, BY THE DIRECTORATE, PROCUREMENT AND PRODUCTION, SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS, TO PROCURE FROM 43 TO 200 PROPELLER TRANSPORT DOLLY ASSEMBLIES.

ITEM 9 OF DD FORM 1490, INCLUDED IN THE SUBJECT INVITATION, PROVIDED FOR A BID ACCEPTANCE PERIOD OF 90 DAYS UNLESS A DIFFERENT PERIOD WAS SELECTED BY THE OFFEROR IN THE FOLLOWING WORDS: ,IN COMPLIANCE WITH THE ABOVE, THE UNDERSIGNED OFFERS AND AGREES, IF THIS OFFER IS ACCEPTED WITHIN -------- CALENDAR DAYS (90 CALENDAR DAYS UNLESS A DIFFERENT PERIOD IS INSERTED BY THE OFFEROR) FROM THE DATE FOR RECEIPT OF OFFERS SPECIFIED IN THE SOLICITATION ABOVE, TO FURNISH ANY OR ALL OF THE ITEMS UPON WHICH PRICES ARE OFFERED, AT THE PRICES SET OPPOSITE EACH ITEM, DELIVERED AT THE DESIGNATED POINT/S) WITHIN THE TIME SPECIFIED IN THE SCHEDULE.'

THE PROTESTING FIRM, RANDALL, INSERTED THE NUMBER "31" IN THE SPACE PROVIDED, THEREBY INDICATING THAT ITS BID ACCEPTANCE PERIOD WAS LIMITED UNTIL 31 DAYS AFTER THE APRIL 19, 1967, BID OPENING DATE, THAT IS, RANDALL'S OFFER WOULD EXPIRE ON MAY 20, 1967, IF NOT ACCEPTED EARLIER.

AT BID OPENING, WELLS INDUSTRIES CORPORATION (WELLS) OFFER OF $1,835 PER UNIT FOR THE INCREMENT PURCHASED, 101 UNITS, WAS LOW AMONG THE SIX OFFERS RECEIVED. RANDALL'S OFFER OF $1,887 PER UNIT FOR THE SAME QUANTITY WAS SECOND LOW, WHILE THE OFFER OF AMERICAN CHAIN AND CABLE OF $1,948 PER UNIT FOR A SIMILAR AMOUNT WAS THIRD LOW.

BECAUSE WELLS' OFFER INDICATED THAT THE PRICE OF CERTAIN DATA WAS TO BE NEGOTIATED AT A LATER DATE, IT APPEARED THAT IT MIGHT BE NECESSARY TO REJECT ITS BID AS NONRESPONSIVE.

BY A LETTER DATED APRIL 26, 1967, TO THE PROCURING ACTIVITY, RANDALL POINTED OUT THIS APPARENT QUALIFICATION OF WELLS' OFFER AND OBJECTED TO THE PROPOSED AWARD TO WELLS. WHETHER THIS LETTER WAS SUFFICIENT TO BE CONSIDERED A FORMAL PROTEST OF AWARD IS DISPUTED BY THE PARTIES, BUT BECAUSE WELLS' OFFER WAS EVENTUALLY REJECTED FOR OTHER REASONS, AND BECAUSE OUR CONCLUSIONS DEPEND ON OTHER FACTORS, WE NEED NOT EXAMINE THAT ISSUE. IN ANY EVENT, IN THE CONSIDERED OPINION OF THE CONTRACTING OFFICER, WELLS' OFFER WAS UNQUALIFIED, AND SO A PRE-AWARD SURVEY OF WELLS' PRODUCTION FACILITIES WAS ORDERED ON MAY 9, 1967. ALTHOUGH WELLS HAD OBTAINED FAVORABLE PRE-AWARD SURVEYS UNDER PREVIOUS AIR FORCE CONTRACTS, IT WAS DETERMINED THAT WELLS WAS NOT QUALIFIED TO PERFORM THE INSTANT CONTRACT AND ON JUNE 2, 1967, THE CONTRACTING OFFICER WAS SO ADVISED.

OVERLOOKING THE FACT RANDALL'S 31 DAY BID ACCEPTANCE TIME HAD EXPIRED ON MAY 20, 1967, THE CONTRACTING OFFICER THEN REQUESTED A PRE AWARD SURVEY OF RANDALL'S PRODUCTION FACILITIES. ON JUNE 15, 1967, WHEN IT WAS DISCOVERED THAT RANDALL'S BID HAD EXPIRED, THE REQUEST FOR A SURVEY OF RANDALL'S PLANT WAS IMMEDIATELY CANCELLED. MEANWHILE, IN THE PERIOD BETWEEN JUNE 5 AND JUNE 15, 1967, REPRESENTATIVES FROM THE DEFENSE CONTRACT ADMINISTRATIVE SERVICE DISTRICT OFFICE IN NEWARK, NEW JERSEY, HAD VISITED RANDALL'S PLANT, CONDUCTED A PRE-AWARD SURVEY AND FORWARDED THE COMPLETED FAVORABLE REPORT TO THE AIR FORCE.

THE NEXT OFFER IN LINE FOR AWARD, THAT OF AMERICAN CHAIN AND CABLE COMPANY, INCORPORATED, WAS THEN EVALUATED, AND, FOLLOWING A FAVORABLE PRE- AWARD SURVEY, THAT COMPANY WAS AWARDED A CONTRACT ON JUNE 28, 1967, TO PRODUCE 101 PROPELLER TRANSPORT DOLLY ASSEMBLIES FOR A TOTAL PRICE OF $201,205.

RANDALL ASSERTS THE CONTRACTING OFFICER HAD A DUTY TO NOTIFY RANDALL THAT AN EXTENSION OF ITS BID ACCEPTANCE PERIOD WAS REQUIRED IN ORDER TO REMAIN IN CONTENTION FOR THE AWARD. UNDER THIS VIEW, BECAUSE THE FAILURE TO EXTEND RANDALL'S BID ACCEPTANCE PERIOD RESULTED FROM THE FAILURE OF THE PROCURING ACTIVITY TO CARRY OUT ITS DUTY, RANDALL CONTENDS THAT THE PRESENT AWARD SHOULD BE CANCELLED AND A NEW CONTRACT SHOULD BE AWARDED TO IT.

RANDALL RELIES ON SUBPARAGRAPH 2-404.1 (C) OF THE ARMED SERVICES PROCUREMENT REGULATION TO SUPPORT ITS POSITION THAT THE AIR FORCE WAS OBLIGATED TO ADVISE RANDALL OF THE IMPENDING EXPIRATION OF ITS BID ACCEPTANCE TIME, THEREBY GIVING RANDALL A TIMELY OPPORTUNITY TO EXTEND ITS ACCEPTANCE DATE. THIS SUBPARAGRAPH PROVIDES:

"SHOULD ADMINISTRATIVE DIFFICULTIES BE ENCOUNTERED AFTER BID OPENING WHICH MAY DELAY AWARD BEYOND BIDDERS' ACCEPTANCE PERIOD THE SEVERAL LOWEST BIDDERS SHOULD BE REQUESTED, BEFORE EXPIRATION OF THEIR BIDS, TO EXTEND THE BID ACCEPTANCE PERIOD (WITH CONSENT OF SURETIES IF ANY) IN ORDER TO AVOID THE NEED FOR READVERTISEMENT.'

THIS SUBPARAGRAPH, TO OUR KNOWLEDGE, IS THE ONLY REGULATION DEALING WITH THE SUBJECT OF BID ACCEPTANCE EXTENSIONS INITIATED BY THE PROCURING ACTIVITY.

ON ITS FACE, THE PROVISION OF ASPR IS NOT APPLICABLE TO THE PRESENT SITUATION BECAUSE THE REGULATION SPEAKS OF ADMINISTRATIVE DELAY BEYOND "BIDDERS'" ACCEPTANCE PERIODS, WHILE RANDALL'S OFFER WAS THE ONLY ONE WHICH LAPSED. FURTHER, BECAUSE THE PROVISION DIRECTS THAT EXTENSIONS SHOULD BE REQUESTED FROM "THE SEVERAL LOWEST BIDDERS," THE FACT THAT ALL OFFERORS BUT RANDALL HAD TWO MONTHS REMAINING AT THE TIME RANDALL'S BID EXPIRED INDICATES THE PROVISION IS NOT NECESSARILY APPLICABLE HERE, FOR IT WOULD HAVE SERVED NO USEFUL PURPOSE TO HAVE REQUESTED EXTENSION FROM THE ,SEVERAL LOWEST BIDDERS" WHOSE ORIGINAL ACCEPTANCE PERIOD WAS STILL EFFECTIVE AT THE TIME OF THE AWARD. WE NOTE TOO THAT AWARD WAS MADE WITHIN THE 90 DAYS CONTEMPLATED BY THE AIR FORCE WHEN THE SOLICITATION WAS ISSUED, SO THERE WOULD APPEAR TO BE NO "ADMINISTRATIVE DIFFICULTIES" WHICH "MAY DELAY AWARD" BEYOND THAT TIME IN THE PRESENT CASE. THUS, BY READING THE WORDS OF THE PROVISION IN QUESTION, WE MAY CONCLUDE IT WAS DESIGNED FOR SITUATIONS WHEN, DUE TO UNFORESEEN DELAY, A GROUP OF OFFERS MIGHT EXPIRE BEFORE AWARD ACTION WAS COMPLETED, RATHER THAN GRANTING A PARTICULAR OFFEROR WHO CHOSE TO LIMIT ITS BID ACCEPTANCE TIME A RIGHT TO BE REQUESTED TO EXTEND ITS ACCEPTANCE TIME.

STRENGTHENING THIS CONCLUSION, AN EXAMINATION OF THE QUOTED PROVISION, ASPR 2-404.1 (C), WITHIN THE CONTEXT OF ITS RELATED SUBPARAGRAPHS REVEALS THE INTENDED PURPOSE OF THE QUOTED SUBPARAGRAPH. SUBPARAGRAPH "/A)" OF ASPR 2-404.1, IN THE STATED INTEREST OF PRESERVING THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, ADMONISHES PROCUREMENT PERSONNEL TO REFRAIN FROM CANCELLING ADVERTISED SOLICITATIONS EXCEPT FOR COMPELLING REASONS. SUBPARAGRAPH "/B)" LISTS OCCURRENCES WHICH CONSTITUTE COMPELLING REASONS FOR CANCELLING AND READVERTISING. THE LAST SUBSECTION OF THE PARAGRAPH, THE ONE IN QUESTION, IS THEREFORE RELEVANT ONLY FOR THOSE OCCASIONS WHERE EXTENSION OF BID ACCEPTANCE PERIODS WOULD BE NEEDED "IN ORDER TO AVOID THE NEED FOR READVERTISEMENT.'

UNDER THE FACTS HERE, WHEN FIVE OUT OF SIX OFFERORS DID NOT VARY THE 90 DAY ACCEPTANCE TIME, AND AWARD WAS MADE WITHIN THE CONTEMPLATED 90 DAYS OF BID OPENING, IT IS APPARENT ANY REGULATION DESIGNED TO AVOID THE NEED FOR READVERTISEMENT IS NOT IN POINT. WE MAY THEREFORE CONCLUDE ASPR 2-404.1 (C) DID NOT OBLIGATE THE CONTRACTING OFFICER TO APPRISE RANDALL OF THE NECESSITY FOR EXTENDING ITS BID ACCEPTANCE PERIOD IN ORDER TO REMAIN QUALIFIED FOR AWARD.

WE ARE ALSO OF THE OPINION THE LAPSING OF RANDALL'S BID WAS NOT CONTRARY TO THE GENERAL PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM, FOR AS WE POINTED OUT IN 42 COMP. GEN. 604, 607, WHEN AN OFFEROR LIMITS ITS BID ACCEPTANCE PERIOD, IT HAS THE LEGAL RIGHT TO REFUSE AWARD AFTER THAT TIME, SO THAT IT WOULD BE IN THE POSITION OF BEING ABLE TO REJECT AN AWARD IN THE EVENT OF UNANTICIPATED INCREASES IN COST, OR BY EXTENDING ITS ACCEPTANCE PERIOD, TO ACCEPT AN AWARD IF DESIRED. SINCE THE GOVERNMENT WOULD NOT HAVE BEEN ABLE TO COMPEL RANDALL TO EXTEND ITS BID ACCEPTANCE PERIOD BEYOND 31 DAYS, IT DOES NOT APPEAR ENTIRELY INEQUITABLE THAT RANDALL CANNOT FORCE THE GOVERNMENT TO DO SO.

RANDALL HAS ALSO CONTENDED THAT BECAUSE A PRE-AWARD SURVEY OF ITS PRODUCTION FACILITIES WAS CONDUCTED WITHIN ITS ORIGINAL 31 DAY BID ACCEPTANCE PERIOD, ON MAY 9, 1967, RANDALL WAS LULLED INTO ASSUMING NO FURTHER ACTION ON ITS PART WAS NECESSARY IN ORDER TO BE CONSIDERED FOR AWARD. BECAUSE WE HAVE BASED OUR CONCLUSION ON OTHER FACTORS, THE FACT A PRE-AWARD SURVEY WAS CONDUCTED, OR THE SURVEY'S TIMING, IS NOT DETERMINATIVE OF RANDALL'S LEGAL RIGHT TO THE CONTRACT AWARD, SO THAT WE NEED NOT PASS UPON THE MATTER. HOWEVER, FOR YOUR INFORMATION, WE NOTE THAT THE CONTRACTING OFFICER'S REPORT, INCORPORATED IN THE AUGUST 11, 1967, REPORT FROM THE DEPARTMENT OF THE AIR FORCE TO THIS OFFICE STATES THE PRE-AWARD SURVEY OF RANDALL'S PLANT FACILITIES WAS NOT INITIATED UNTIL THE NEGATIVE RESULT OF THE PRE-AWARD SURVEY OF THE FACILITIES OF THE LOW BIDDER, WELLS, WAS RECEIVED ON JUNE 2, 1967, AND THE DD FORM 1524 "PRE AWARD SURVEY OF PROSPECTIVE CONTRACTOR" INCLUDED WITH THE CONTRACTING OFFICER'S REPORT INDICATES THE PRE-AWARD SURVEY OF RANDALL'S FACILITIES INCIDENT TO THIS AWARD WAS REQUESTED BY THE AIR FORCE FROM THE NEWARK, NEW JERSEY OFFICE OF THE DEFENSE CONTRACT ADMINISTRATION SERVICE DISTRICT ON JUNE 5, 1967.