B-164522, JULY 17, 1968, 48 COMP. GEN. 19

B-164522: Jul 17, 1968

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REJECTION OF THE BID WAS NOT CONTRARY TO THE PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM. THE EXTENSION OF THE BID ACCEPTANCE DATE PRESCRIBED BY SECTION 1-2.404-1 OF THE FEDERAL PROCUREMENT REGULATIONS DESIGNED FOR SITUATIONS WHERE A GROUP OF OFFERS MIGHT EXPIRE BEFORE AWARD ACTION IS COMPLETED. IS NOT INTENDED TO GRANT A PARTICULAR OFFEROR LIMITING BID ACCEPTANCE TIME. 1968: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 5. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION FOR BIDS THAT SCALED BIDS WOULD BE RECEIVED UNTIL 3:00 P.M. THE PURCHASE REQUEST ADVISED PROSPECTIVE BIDDERS THAT "IT IS PLANNED THAT THE SUCCESSFUL BIDDER WILL RECEIVE THE NOTICE OF AWARD BY: MAY 24. THE NEXT LOWEST BID WAS SUBMITTED BY THE FEDERATED METALS DIVISION.

B-164522, JULY 17, 1968, 48 COMP. GEN. 19

BIDS - ACCEPTANCE TIME LIMITATION - BIDS OFFERING DIFFERENT ACCEPTANCE TIME A LOW BID CONDITIONED UPON RECEIPT OF NOTICE OF AWARD WITHIN 24 HOURS AFTER THE CLOSING HOUR FOR RECEIPT OF BIDS UNDER AN INVITATION PROVIDING FOR A 4-DAY BID ACCEPTANCE PERIOD HAVING AUTOMATICALLY EXPIRED BEFORE AN AWARD COULD BE MADE, REJECTION OF THE BID WAS NOT CONTRARY TO THE PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM. TO PERMIT THE BIDDER TO DELETE THE ACCEPTANCE TIME CONDITION WOULD PROVIDE AN OPTION TO ACCEPT OR REJECT AN AWARD SUBSEQUENT TO BID OPENING, AN ADVANTAGE UNAVAILABLE TO OTHER BIDDERS. THE EXTENSION OF THE BID ACCEPTANCE DATE PRESCRIBED BY SECTION 1-2.404-1 OF THE FEDERAL PROCUREMENT REGULATIONS DESIGNED FOR SITUATIONS WHERE A GROUP OF OFFERS MIGHT EXPIRE BEFORE AWARD ACTION IS COMPLETED, IS NOT INTENDED TO GRANT A PARTICULAR OFFEROR LIMITING BID ACCEPTANCE TIME, THE RIGHT TO EXTEND THE ACCEPTANCE TIME.

TO THE REPUBLIC METALS CO., INC., JULY 17, 1968:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 5, 1968, PROTESTING THE REJECTION OF YOUR LOW BID UNDER PURCHASE REQUEST NO. 24937, ISSUED BY THE GOVERNMENT PRINTING OFFICE (GPO), WASHINGTON, D.C.

THE PURCHASE REQUEST DATED MAY 8, 1968, REQUESTED BIDS FOR THE DELIVERY OF 30,000 POUNDS OF TIN-ANTIMONY, F.O.B. GOVERNMENT PRINTING OFFICE, 35 "G" STREET, WASHINGTON, D.C., ON OR BEFORE JUNE 19, 1968. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION FOR BIDS THAT SCALED BIDS WOULD BE RECEIVED UNTIL 3:00 P.M., MAY 20, 1968. IN REGARD TO DATE OF THE AWARD, THE PURCHASE REQUEST ADVISED PROSPECTIVE BIDDERS THAT "IT IS PLANNED THAT THE SUCCESSFUL BIDDER WILL RECEIVE THE NOTICE OF AWARD BY: MAY 24, 1968.' IN RESPONSE TO THE PURCHASE REQUEST, YOUR FIRM SUBMITTED A BID DATED MAY 16, 1968, OFFERING TO FURNISH THE TIN-ANTIMONY ALLOY AT A PRICE OF $0.7347 PER POUND. ON THE FACE OF YOUR BID, YOU INSERTED THE FOLLOWING NOTE: "SUBJECT TO ACCEPTANCE NO LATER THAN :00 P.M. MAY 21, 1968.' THE NEXT LOWEST BID WAS SUBMITTED BY THE FEDERATED METALS DIVISION, AMERICAN SMELTING AND REFINING COMPANY, IN THE AMOUNT OF $0.7443 PER POUND.

THE BID OF YOUR FIRM WAS REJECTED BECAUSE IT WAS CONDITIONED UPON THE RECEIPT OF A NOTICE OF AWARD ON OR BEFORE 3:00 P.M., MAY 21, 1968, 24 HOURS AFTER THE CLOSING HOUR SPECIFIED FOR RECEIPT OF BIDS, AND BECAUSE IT WAS NOT FEASIBLE TO FOLLOW GPO'S REGULAR PROCEDURES, INCLUDING REVIEW AND APPROVAL BY THE CONGRESSIONAL JOINT COMMITTEE ON PRINTING, AND STILL MAKE AN AWARD TO YOUR FIRM WITHIN THE 24 HOURS ALLOWED IN YOUR BID. THEREFORE, YOUR BID, BY ITS TERMS, AUTOMATICALLY EXPIRED BEFORE AN AWARD COULD BE MADE TO YOUR FIRM. SEE 14 COMP. GEN. 612; 16 ID. 699; 35 ID. 50. IT IS REPORTED THAT THE CONTRACTING OFFICER IS CONTEMPLATING MAKING AN AWARD OF A CONTRACT TO THE FEDERATED METALS DIVISION, AMERICAN SMELTING AND REFINING COMPANY, AT A NET AMOUNT OF $22,329, SUBJECT TO APPROVAL OF THE CONGRESSIONAL JOINT COMMITTEE ON PRINTING.

THE PRESIDENT OF YOUR FIRM PROTESTED THE REJECTION OF YOUR COMPANY'S BID ON MAY 22, 1968, AND STATED AT THAT TIME HIS WILLINGNESS TO DELETE THE CONDITIONAL ACCEPTANCE STATEMENT SO THAT AN AWARD COULD BE MADE TO YOUR FIRM. THE PRESIDENT OF YOUR FIRM WAS ADVISED THAT THE CONTRACTING OFFICER COULD NOT DELETE THE ACCEPTANCE TIME CONDITION FROM YOUR BID SINCE THIS WOULD GIVE YOUR COMPANY AN ADVANTAGE OVER OTHER BIDDERS, THAT IS, THE OPTION OF ACCEPTING OR REJECTING AN AWARD SUBSEQUENT TO THE BID OPENING.

IN YOUR LETTER OF JUNE 5, 1968, YOU STATE THAT YOUR FIRM WAS ADVISED BY GPO THAT ITS DECISION TO AWARD THE CONTRACT TO THE SECOND LOWEST BIDDER WAS BASED ON THE NONRESPONSIVENESS OF YOUR BID BECAUSE OF YOUR CONDITIONAL ACCEPTANCE STATEMENT. YOU CONTEND THAT THE STATEMENT IN THE INVITATION FOR BIDS TO THE EFFECT THAT "IT IS PLANNED THAT THE SUCCESSFUL BIDDER WILL RECEIVE THE NOTICE OF AWARD BY: MAY 24, 1968" IS "NOT SPECIFIC ENOUGH, NOR STRONGLY ENOUGH WORDED TO AUTOMATICALLY DISQUALIFY ANY BIDDER THAT MAY STIPULATE THAT THE PRICE SUBMITTED TO THE GOVERNMENT PRINTING OFFICE WAS SUBJECT TO ACCEPTANCE BY THE GOVERNMENT ON AN EARLIER DATE.' YOU STATE THAT THE WORDS "IT IS PLANNED" USED IN THE NOTE ON THE PURCHASE REQUEST CAN BE SO CONSTRUED THAT UNDER EXTENUATING CIRCUMSTANCES, SUCH PLANS COULD OR MAY BE ALTERED. YOU STATE THAT IN OTHER CASES INVOLVING OTHER GOVERNMENT AGENCIES WHERE YOUR FIRM HAS SPECIFIED IN ITS BID A TIME FOR ACCEPTANCE OF YOUR BID WHICH IS INSUFFICIENT FOR THE AGENCY INVOLVED TO EVALUATE YOUR BID WITH THE OTHERS RECEIVED, THE AGENCY HAS REQUESTED AN EXTENSION OF TIME BY TELEPHONE OR TELEGRAPH FROM YOUR FIRM. FURTHER, YOU ADVISE THAT HAD GPO REQUESTED AN EXTENSION OF YOUR BID ACCEPTANCE PERIOD, THE TIME WOULD HAVE BEEN EXTENDED FOR A LIMITED NUMBER OF DAYS.

ALTHOUGH THE NOTE AS TO THE CONTEMPLATED DATE OF AWARD COULD HAVE BEEN WORDED SO AS TO LEAVE NO DOUBT THAT GPO REQUIRED AT LEAST A 4-DAY BID ACCEPTANCE PERIOD, WE BELIEVE THAT THE LANGUAGE EMPLOYED PLACED ALL BIDDERS ON NOTICE THAT AN AWARD WOULD BE EFFECTED BY MAY 24, 1968. WITH THAT DATE IN MIND, A PRUDENT BIDDER WOULD HAVE TO ALLOW A PERIOD OF BID ACCEPTANCE UP TO THAT DATE IN ORDER TO ASSURE THAT HIS BID WOULD BE OPEN FOR ACCEPTANCE AT THE TIME GPO WOULD BE IN A POSITION TO MAKE AN AWARD.

IT IS YOUR CONTENTION THAT YOUR FIRM IS ENTITLED TO AN AWARD AS THE LOWEST BIDDER BECAUSE, AFTER YOUR BID ACCEPTANCE PERIOD HAD EXPIRED, YOU OFFERED TO EXTEND SUCH PERIOD FOR A "LIMITED" NUMBER OF DAYS. AS TO SUCH CONTENTION GENERALLY, IT MAY BE STATED THAT STATUTES WHICH REQUIRE PURCHASES TO BE MADE AFTER ADVERTISING FOR BIDS WERE ENACTED FOR THE BENEFIT OF THE UNITED STATES AND NOT THE BIDDERS, AND IT CONSISTENTLY HAS BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AND BY THE COURTS THAT A REQUEST FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED, INCLUDING THE LOWEST CORRECT BID. 17 COMP. GEN. 554; 26 ID. 49; 41 ID. 709, 711; PERKINS V LUKENS STEEL CO., 310 U.S. 113; O- BRIEN V CARNEY, ET AL., 6 F.SUPP. 761.

IT APPEARS TO BE YOUR POSITION THAT GPO SHOULD HAVE GIVEN YOUR FIRM A TIMELY OPPORTUNITY TO EXTEND YOUR ACCEPTANCE DATE. IN THIS REGARD, FEDERAL PROCUREMENT REGULATIONS (FPR), SUBPARAGRAPH (C) OF PARAGRAPH 1 2.404-1, PROVIDES:

(C) SHOULD ADMINISTRATIVE DIFFICULTIES BE ENCOUNTERED AFTER BID OPENING WHICH MAY DELAY AWARD BEYOND BIDDERS' ACCEPTANCE PERIODS, 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 PROCUREMENT ACTIVITY. ON ITS FACE, THIS PROVISION OF FPR IS NOT APPLICABLE TO THE PRESENT SITUATION BECAUSE THE REGULATION SPEAKS OF ADMINISTRATIVE DELAY BEYOND "BIDDERS" ACCEPTANCE PERIODS, WHILE YOUR FIRM'S OFFER WAS THE ONLY ONE WHICH LAPSED. WE ARE OF THE OPINION THAT THE FPR PROVISION IN QUESTION 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 EXTEND ITS ACCEPTANCE TIME.

WE ARE ALSO OF THE OPINION THAT FAILURE OF GPO TO GIVE CONSIDERATION TO YOUR BID BECAUSE OF ITS INABILITY TO PROCESS AN AWARD TO YOUR FIRM WITHIN 1 DAY WAS NOT CONTRARY TO THE GENERAL PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM. 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 A 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 YOUR FIRM TO EXTEND ITS ACCEPTANCE PERIOD BEYOND 24 HOURS, IT DOES NOT APPEAR ENTIRELY INEQUITABLE THAT YOUR FIRM CANNOT FORCE THE GOVERNMENT TO DO SO.

IN THE CIRCUMSTANCES, IT IS OUR VIEW THAT THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WOULD BEST BE SERVED IN THE PRESENT PROCUREMENT BY MAKING AN AWARD TO AMERICAN SMELTING AND REFINING COMPANY, THE SECOND LOWEST RESPONSIBLE BIDDER, AS ADMINISTRATIVELY PROPOSED.