B-166482, MAY 5, 1969

B-166482: May 5, 1969

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

RETHERFORD: REFERENCE IS MADE TO A LETTER DATED MARCH 18. IT IS REPORTED THAT THE INVITATION COVERS THE FOLLOWING THREE CONSTRUCTION PROJECTS AT VOLK FIELD. THE FIRST PARAGRAPH OF THE BIDDING SCHEDULE STATED: "EACH PROJECT * * * ON THIS SCHEDULE IS SUBJECT TO A STATUTORY LIMITATION OF $25. BIDS WERE SOLICITED ON TWO ALTERNATIVE BASES FOR THE PROCUREMENT. THE ONLY BID WAS SUBMITTED BY ORVEDAHL CONSTRUCTION. SINCE ITS BID ON THE SECOND ALTERNATIVE WAS HIGHER THAN THE FIRST. NO CONSIDERATION IS BEING GIVEN TO AWARD THEREUNDER. ORVEDAHL'S BID ON THE FIRST ALTERNATIVE IS REPORTED TO BE AS FOLLOWS: (1) PROJECT VOL 8-6 $ 2. ORVEDAHL WAS NOTIFIED THAT NO AWARD COULD BE MADE UNDER THE INVITATION.

B-166482, MAY 5, 1969

TO MR. DEWARD D. RETHERFORD:

REFERENCE IS MADE TO A LETTER DATED MARCH 18, 1969, FROM MAJOR ELMER D. SHIPLEY, UNITED STATES AIR FORCE, ON YOUR BEHALF AND IN YOUR ABSENCE, REQUESTING AN ADVANCE DECISION CONCERNING THE ACCEPTABILITY OF A BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. F21603-69-B 0261. IT IS REPORTED THAT THE INVITATION COVERS THE FOLLOWING THREE CONSTRUCTION PROJECTS AT VOLK FIELD, WISCONSIN:

"/1) PROJECT VOL 8-6: AN/GMQ-11 TEMPERATURE RELATIVE HUMIDITY SET.

"/2) PROJECT VOL 7-6: AN/GMQ-13 CEILOMETER DETECTOR AND PROJECTOR WITH DOUBLE BITUMINOUS ROADS.

"/3) PROJECT VOL 6-6: AN/GMQ-10 TRANSMISSO METER WITH DOUBLE BITUMINOUS ROADS.'

BECAUSE OF THE CLOSE SIMILARITY OF WORK, THE BID SCHEDULE PROVIDED THAT A SINGLE AWARD WOULD BE MADE FOR ALL THREE PROJECTS. THE FIRST PARAGRAPH OF THE BIDDING SCHEDULE STATED:

"EACH PROJECT * * * ON THIS SCHEDULE IS SUBJECT TO A STATUTORY LIMITATION OF $25,000. BIDS EXCEEDING THIS AMOUNT SHALL BE CONSIDERED NONRESPONSIVE AND SHALL BE REJECTED.'

BIDS WERE SOLICITED ON TWO ALTERNATIVE BASES FOR THE PROCUREMENT. THE ONLY BID WAS SUBMITTED BY ORVEDAHL CONSTRUCTION, INC., AND SINCE ITS BID ON THE SECOND ALTERNATIVE WAS HIGHER THAN THE FIRST, NO CONSIDERATION IS BEING GIVEN TO AWARD THEREUNDER. ORVEDAHL'S BID ON THE FIRST ALTERNATIVE IS REPORTED TO BE AS FOLLOWS:

(1) PROJECT VOL 8-6 $ 2,600

(2) PROJECT VOL 7-6 $12,200

(3) PROJECT VOL 6-6 $26,500

THE BIDDING SCHEDULE STATED "AWARD SHALL BE MADE TO THE RESPONSIBLE BIDDER SUBMITTING THE LOW BID ON THE TOTAL BASIC BID OR ON THE TOTAL ALTERNATE BID.' BECAUSE THE PRICE BID ON PROJECT VOL 6-6 EXCEEDED THE STATUTORY LIMITATION OF $25,000, AND SINCE PROVISION HAD BEEN MADE FOR AGGREGATE AWARD ONLY, ORVEDAHL WAS NOTIFIED THAT NO AWARD COULD BE MADE UNDER THE INVITATION. IT IS REPORTED THAT IN RESPONSE TO THE "INFORMAL" NOTIFICATION, ORVEDAHL MADE A WRITTEN OFFER OF A VOLUNTARY PRICE REDUCTION ON VOL 6-6 FROM $26,500 TO $24,500. PROCUREMENT OFFICIALS THEN DETERMINED THAT AWARD COULD BE MADE UNDER THE INVITATION BECAUSE OF THE PRICE REDUCTION TO AN AMOUNT WITHIN THE $25,000 STATUTORY LIMIT PRESCRIBED BY 10 U.S.C. 2674 AND BECAUSE ORVEDAHL WAS AN OTHERWISE RESPONSIVE, RESPONSIBLE BIDDER. HOWEVER, WHEN THE MATTER WAS REFERRED TO YOUR LOCAL STAFF JUDGE ADVOCATE FOR LEGAL ADVICE, HE CONCLUDED THAT THE PROPOSED AWARD WOULD BE LEGALLY INSUFFICIENT. IT WAS HIS OPINION THAT TO ALLOW A NONRESPONSIVE BIDDER TO MADE HIS BID RESPONSIVE AFTER BID OPENING, EVEN WHERE THERE ARE NO OTHER BIDS, VIOLATES THE SPIRIT OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-301 (A) WHICH PROVIDES AS FOLLOWS:

"/A) TO BE CONSIDERED FOR AWARD, A BID MUST COMPLY IN ALL MATERIAL RESPECTS WITH THE INVITATION FOR BIDS SO THAT BOTH AS TO THE METHOD AND TIMELINESS OF SUBMISSION AND AS TO THE SUBSTANCE OF ANY RESULTING CONTRACT, ALL BIDDERS MAY STAND ON AN EQUAL FOOTING AND THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM MAY BE MAINTAINED.' THE STAFF JUDGE ADVOCATE FURTHER STATED:

"THERE MAY HAVE BEEN OTHERS WHO DID NOT SUBMIT ANY BID BECAUSE THEY COULD NOT BID BELOW $25,000 ON PROJECT VOL 6-6. THEY MIGHT, HOWEVER, IF GIVEN THE CHANCE TO RECONSIDER, AS WAS NON-RESPONSIVE ORVEDAHL, HAVE BEEN WILLING TO LOWER THEIR BIDS AFTER THE OPENING DATE. WE COULD BE OPEN TO CRITICISM AND I SUBMIT WE WOULD BE IN ERROR AS A MATTER OF LAW TO ALLOW ORVEDAHL TO WIN THE CONTRACT IN THIS WAY. WE SHOULD EITHER NEGOTIATE IT WITH HIM AT THIS TIME, DUE TO OUR BEING CONFRONTED BY AN EMERGENCY SITUATION RESULTING FROM SHORTAGE OF TIME, OR READVERTISE THIS PROJECT FOR BID.'

THE MARCH 18, 1969, LETTER INDICATES DOUBT AS TO THE VALIDITY OF THE STAFF JUDGE ADVOCATE'S OPINION. THE FOLLOWING CASES ARE CITED AS SUPPORTING A CONCLUSION OPPOSITE TO THAT OF THE STAFF JUDGE ADVOCATE: 5 COMP. GEN. 470; 40 ID. 561; 42 ID. 170; ALEC LEITMAN V UNITED STATES, 104 CT.CL. 324; MILLER V UNITED STATES, 62 F.SUPP. 327. WE BELIEVE THAT THE POSITION OF THE STAFF JUDGE ADVOCATE IS LEGALLY CORRECT AND THAT THE BID OF ORVEDAHL MAY NOT BE CONSIDERED FOR AWARD.

THE CASES CITED ABOVE ARE DISTINGUISHABLE FROM THE IMMEDIATE CASE. NONE OF THOSE CASES INVOLVED A SITUATION WHERE, AS HERE, A LOW NONRESPONSIVE BIDDER DESIRES TO MAKE ITS BID RESPONSIVE AFTER BID OPENING BY REDUCING ITS BID PRICE. IN THE CASES YOU CITE, OUR OFFICE AND THE COURTS HAVE HELD THAT ONCE A BIDDER HAS BEEN DETERMINED TO HAVE SUBMITTED THE LOWEST RESPONSIVE BID, THERE CAN BE NO POSSIBLE REASON WHY THE LOW RESPONSIVE BIDDER CANNOT THEREAFTER VOLUNTARILY DECREASE THE AMOUNT OF HIS BID. THE PRESENT CASE, ORVEDAHL'S BID EXCEEDED THE $25,000 STATUTORY COST LIMITATION, A MATERIAL REQUIREMENT OF THE INVITATION, AND, THEREFORE, NONCOMPLIANCE WITH THAT REQUIREMENT MAY NOT BE WAIVED TO CURE THE NONRESPONSIVENESS OF ORVEDAHL'S BID. SEE ASPR 18-110 (B).

TO ALLOW ORVEDAHL, A NONRESPONSIVE BIDDER, TO REDUCE ITS BID PRICE AFTER BID OPENING TO MAKE ITS BID RESPONSIVE WOULD BE TANTAMOUNT TO PERMITTING THE SUBMISSION OF A NEW BID. OUR OFFICE HAS HELD THAT ORDINARILY, BIDDERS MAY NOT VARY THEIR BIDS AFTER THE BIDS ARE OPENED ON A COMPETITIVE BASIS. 17 COMP. GEN. 554; 40 ID. 432. TO PERMIT ORVEDAHL TO REDUCE ITS BID PRICE TO MAKE ITS BID RESPONSIVE WOULD TEND TO COMPROMISE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM BY MAKING IT POSSIBLE FOR THE BIDDER TO DECIDE AFTER BID OPENING WHETHER OR NOT TO MAKE HIS BID ACCEPTABLE. IN VIEW OF THE FOREGOING, WE CONCLUDE THAT THE BID OF ORVEDAHL CONSTRUCTION, INC. MUST BE REJECTED.

THE RECORD BEFORE OUR OFFICE CONTAINS A MEMORANDUM FROM AN ASSISTANT GENERAL COUNSEL, DEPARTMENT OF THE AIR FORCE, DATED APRIL 11, 1969, WHICH CONSIDERS THE QUESTION OF WHETHER THE THREE CONSTRUCTION PROJECTS ADVERTISED HERE ARE SEPARATE FOR PURPOSES OF APPLYING THE $25,000 LIMITATION. THE MEMORANDUM, AFTER QUOTING PERTINENT SECTIONS OF AIR FORCE REGULATION 85-6 AND AIR FORCE MANUAL 85-26 WHICH DEFINE THE TERM "PROJECT" , STATES IN PERTINENT PART AS FOLLOWS:

"THIS CASE PRESENTS A CLOSE QUESTION WHETHER UNDER THE ABOVE-QUOTED CRITERIA THE THREE PROJECTS PROPOSED HERE ARE SEPARATE. THEY ARE NOT CONTIGUOUS SO THEY ARE NOT AUTOMATICALLY A SINGLE PROJECT. THEY INVOLVE SEPARATE FUNCTIONAL PURPOSES (EACH MEASURES A DIFFERENT ASPECT OF WEATHER), BUT IT IS HARD TO SAY THEY ARE -COMPLETELY UNRELATED.- THIS IS PARTICULARLY TRUE WHEN MAJOR SHIPLEY SAYS THE WORK ON EACH IS SO SIMILAR THAT A SINGLE AWARD WILL BE MADE FOR ALL THREE.'

SINCE THE RECORD CREATES A DOUBT AS TO THE NUMBER OF CONSTRUCTION PROJECTS INVOLVED, WE BELIEVE THAT BEFORE FURTHER ACTION IS TAKEN WITH RESPECT TO THIS PROCUREMENT, A DETERMINATION SHOULD BE MADE WHETHER UNDER 10 U.S.C. 2674 AND THE IMPLEMENTING REGULATIONS THE THREE PROJECTS ADVERTISED HERE ARE IN FACT SEPARATE CONSTRUCTION PROJECTS OR CONSTITUTE A SINGLE CONSTRUCTION PROJECT SUBJECT TO SECRETARIAL ADVANCE APPROVAL.