B-169368, APRIL 21, 1970, 49 COMP. GEN. 713

B-169368: Apr 21, 1970

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THE QUESTION FOR RESOLUTION IS NOT THE RESPONSIVENESS OF THE LOW BID THAT DID NOT INDICATE PERFORMANCE TIME OR THE ENTITLEMENT TO A CONTRACT AWARD OF THE ONLY OTHER BIDDER WHO HAD INDICATED PERFORMANCE TIME IN ITS BID. WHETHER THE INVITATION WAS DEFECTIVE. 1970: REFERENCE IS MADE TO LETTER 134G OF MARCH 19. PARAGRAPH 5 OF THE GENERAL REQUIREMENTS IN THE INVITATION FOR BIDS PROVIDED THAT IF THERE IS A FAILURE TO COMPLETE THE WORK IN THE TIME STATED THERE WILL BE A DEDUCTION IN THE AMOUNT OF $50 FOR EACH CALENDAR DAY OF DELAY BEYOND THE DAYS SPECIFIED FOR COMPLETION OF THE WORK. THE NUMBER OF DAYS WAS OMITTED FROM THE PARAGRAPH. THE PARAGRAPH MERELY STATED: WORK IS TO BE COMPLETED WITHIN CALENDAR DAYS.

B-169368, APRIL 21, 1970, 49 COMP. GEN. 713

BIDS -- DISCARDING ALL BIDS -- SPECIFICATIONS DEFECTIVE -- PERFORMANCE TIME WHEN AN INVITATION FOR BIDS PROVIDES FOR LIQUIDATED DAMAGES BUT OMITS TO STATE THE NUMBER OF DAYS IN WHICH THE WORK OF CONVERTING ELEVATORS TO AUTOMATIC CONTROLS MUST BE COMPLETED, THE QUESTION FOR RESOLUTION IS NOT THE RESPONSIVENESS OF THE LOW BID THAT DID NOT INDICATE PERFORMANCE TIME OR THE ENTITLEMENT TO A CONTRACT AWARD OF THE ONLY OTHER BIDDER WHO HAD INDICATED PERFORMANCE TIME IN ITS BID, BUT WHETHER THE INVITATION WAS DEFECTIVE. THE INVITATION IN OMITTING PERFORMANCE TIME DID NOT COMPLY WITH THE REQUIREMENT IN SECTION 1-18.203-1(B) OF THE FEDERAL PROCUREMENT REGULATIONS, AND IN FAILING TO INDICATE WHAT TIME, IF ANY, WOULD BE ACCEPTABLE, DID NOT PERMIT BIDDERS TO COMPETE ON AN EQUAL BASIS AND, THEREFORE, THE DEFECTIVE INVITATION SHOULD BE CANCELED AND THE PROCUREMENT READVERTISED.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, APRIL 21, 1970:

REFERENCE IS MADE TO LETTER 134G OF MARCH 19, 1970, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING A DECISION WITH RESPECT TO THE BIDS RECEIVED ON PROJECT 17 5084 FOR THE CONVERSION OF FOUR ELEVATORS TO AUTOMATIC CONTROL AT THE VETERANS ADMINISTRATION HOSPITAL AT NEW ORLEANS, LOUISIANA.

PARAGRAPH 5 OF THE GENERAL REQUIREMENTS IN THE INVITATION FOR BIDS PROVIDED THAT IF THERE IS A FAILURE TO COMPLETE THE WORK IN THE TIME STATED THERE WILL BE A DEDUCTION IN THE AMOUNT OF $50 FOR EACH CALENDAR DAY OF DELAY BEYOND THE DAYS SPECIFIED FOR COMPLETION OF THE WORK. PARAGRAPH 5 DOES NOT SPECIFY ANY NUMBER OF DAYS FOR COMPLETION OF THE WORK. AS A MATTER OF FACT, THE INVITATION FOR BIDS NEGLECTED TO STATE THE NUMBER OF CALENDAR DAYS REQUIRED FOR COMPLETION OF THE WORK. THE INVITATION CONTAINED A PARAGRAPH (H) FOR PROVIDING THAT INFORMATION, BUT THE NUMBER OF DAYS WAS OMITTED FROM THE PARAGRAPH. THE PARAGRAPH MERELY STATED:

WORK IS TO BE COMPLETED WITHIN CALENDAR DAYS. FURTHER, THE BID FORM PROVIDED FOR THE SUBMISSION OF BIDS, STANDARD FORM 21, BID FORM FOR CONSTRUCTION CONTRACTS, INCLUDED A PARAGRAPH IN WHICH THE NUMBER OF DAYS FOR COMPLETION OF THE WORK WAS ALSO LEFT BLANK. AS INCLUDED IN THE BID FORM, THE PARAGRAPH READ:

THE UNDERSIGNED AGREES, IF AWARDED THE CONTRACT, TO COMMENCE THE WORK WITHIN 10 CALENDAR DAYS AFTER THE DATE OF RECEIPT OF NOTICE TO PROCEED, AND TO COMPLETE THE WORK WITHIN CALENDAR DAYS AFTER THE DATE OF RECEIPT OF NOTICE TO PROCEED.

BIDS WERE OPENED JANUARY 20, 1970. TWO BIDS WERE RECEIVED. HAUGHTON ELEVATOR COMPANY AND OTIS ELEVATOR COMPANY SUBMITTED BIDS IN THE AMOUNTS OF $195,319 AND $196,162, RESPECTIVELY. OTIS ELEVATOR COMPANY COMPLETED THE BID FORM TO SHOW COMPLETION OF THE WORK WITHIN 635 CALENDAR DAYS. HAUGHTON ELEVATOR COMPANY DID NOT PROVIDE ANY TIME FOR COMPLETION OF THE WORK IN ITS BID. BY LETTER OF JANUARY 21, 1970, TO THE CONTRACTING AGENCY, HAUGHTON ELEVATOR COMPANY STATED THAT, SINCE THERE WAS NO DIRECT INSTRUCTIONS REQUIRING A COMPLETION TIME TO BE STATED IN THE BID, IT INADVERTENTLY OMITTED THE COMPLETION TIME, BUT THAT THE BID WAS BASED UPON A COMPLETION TIME, BUT THAT THE BID WAS BASED UPON A COMPLETION TIME OF 825 CALENDAR DAYS AFTER THE RECEIPT OF A NOTICE TO PROCEED. THE LETTER STATED FURTHER THAT BARRING UNFORESEEN DELAYS, THE COMPLETION TIME SHOULD ACTUALLY BE LESS THAN 825 DAYS.

BY LETTER OF FEBRUARY 4, 1970, TO THE CONTRACTING OFFICER, OTIS ELEVATOR COMPANY PROTESTED AN AWARD TO HAUGHTON ELEVATOR COMPANY ON THE GROUND THAT THE BID RECEIVED FROM THE LATTER BIDDER WAS NONRESPONSIVE. THE BASIS FOR THE CONTENTION WAS THAT PARAGRAPH 5 OF THE GENERAL REQUIREMENTS PROVIDED LIQUIDATED DAMAGES FOR DELAY, STANDARD CONTRACT FORM 23-A MADE COMPLETION TIME AN IMPORTANT PART OF THE CONTRACT, THE BID FORM REQUIRED THE BIDDER TO INDICATE THE TIME FOR COMPLETION, AND STANDARD FORM 19-B CONTAINED AN ADMONITION TO BIDDERS TO SET FORTH FULL, ACCURATE AND COMPLETE INFORMATION AS REQUIRED BY THE INVITATION FOR BIDS.

THE CONTRACTING OFFICER HAS INDICATED THAT HE CONSIDERS THE ADDITIONAL 190 DAYS OFFERED BY HAUGHTON TO BE EXCESSIVE AND THAT THE COST OF SALARIES TO THE GOVERNMENT IN CONTINUING THE ELEVATORS ON MANUAL OPERATION FOR THE ADDITIONAL 190 DAYS WOULD BE IN EXCESS OF $18,000 WHICH WOULD FAR EXCEED THE $843 DIFFERENCE BETWEEN THE TWO BIDS. FOR THESE REASONS, THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE AWARD BE MADE TO OTIS ELEVATOR COMPANY.

THE MARCH 19, 1970, LETTER FROM THE DIRECTOR OF THE SUPPLY SERVICE EXPRESSES THE VIEW THAT THE HAUGHTON BID IS SUBSTANTIVELY NONRESPONSIVE FOR HAVING FAILED TO SPECIFY A TIME FOR PERFORMANCE, PARTICULARLY BECAUSE OF THE LIQUIDATED DAMAGE PROVISION, AND INDICATES AN INCLINATION TO MAKE AN AWARD TO OTIS, BUT RAISES A QUESTION AS TO WHETHER THE INVITATION IS SO DEFECTIVE AS TO PRECLUDE SUCH AN AWARD.

SECTION 1-18.203-1(B) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) PROVIDES THAT--

*** INVITATIONS FOR BIDS SHALL CONTAIN THE FOLLOWING TO THE EXTENT APPLICABLE:

(4) TIME FOR PERFORMANCE; FURTHER, FPR SEC. 1-18.105 STIPULATES FACTORS THAT THE CONTRACTING OFFICER SHOULD GIVE CONSIDERATION TO IN ESTABLISHING THE TIME FOR COMPLETION OF THE CONTRACT. THUS, FPR CONTEMPLATES THE INCLUSION OF THE TIME FOR PERFORMANCE IN THE INVITATION FOR BIDS AND THE CONTRACTING OFFICER, RATHER THAN THE BIDDERS, FIXING THE AMOUNT OF SUCH TIME.

IN THIS CASE, THE INVITATION FOR BIDS WAS PREPARED TO PROVIDE FOR THE TIME OF COMPLETION, BUT THE NUMBER OF DAYS WAS OMITTED FROM THE PARAGRAPH THAT WAS TO CONTAIN THE INFORMATION. ALTHOUGH LIQUIDATED DAMAGES WERE SPECIFICALLY PROVIDED FOR AND STANDARD FORM 23-A PROVIDES THE STEPS THE GOVERNMENT MAY FOLLOW IN THE EVENT THE WORK IS NOT COMPLETED WITHIN THE TIME SPECIFIED IN THE CONTRACT, THERE WAS NOTHING IN THE INVITATION REQUIRING THE BIDDERS TO STATE IN THEIR BIDS THE TIME FOR COMPLETION. INDICATED BY THE FPR, THIS IS INFORMATION REQUIRED TO BE FURNISHED BY THE INVITATION FOR BIDS. FURTHER, THE PARAGRAPH IN THE BID FORM PERTAINING TO THE TIME FOR COMPLETION ONLY CONTEMPLATED COMPLETION OF THE BLANK WHERE THE GOVERNMENT HAD SPECIFIED A TIME FOR COMPLETION SINCE AT THE OUTSET IT USES THE TERMS "THE UNDERSIGNED AGREES." USE OF THE WORD "AGREES" INDICATES RESPONSE TO SOME PREVIOUS REQUIREMENT AND SINCE, AS INDICATED, NO REQUIREMENT AS TO TIME OF COMPLETION WAS STATED IN THE INVITATION, NO RESPONSE IN THAT REGARD WAS NECESSARILY CALLED FOR IN THE BID.

HOWEVER, IT IS INDICATED BY THE CONTRACTING OFFICER THAT TIME IS AN IMPORTANT CONSIDERATION. THE BID OF OTIS INDICATES THAT IT WAS BASED UPON COMPLETING THE WORK IN 635 DAYS AND IT HAS STATED IN THE FEBRUARY 4 LETTER THAT ITS PRICE WAS BASED UPON THE EARLY PERFORMANCE. ON THE OTHER HAND, THE INFORMATION FURNISHED BY HAUGHTON THE DAY AFTER BID OPENING INDICATED THAT ITS BID WAS BASED UPON 825 DAYS. OTIS HAS STATED THAT BECAUSE OF THE LIQUIDATED DAMAGES PROVISION, IT ASSUMED THAT TIME FOR COMPLETION WAS TO BE AN IMPORTANT CONSIDERATION AND THAT IF A LONGER COMPLETION TIME WERE PERMITTED ITS BID WOULD BE LOWER. IN VIEW OF THE SLIGHT DIFFERENCE ($843) BETWEEN THE TWO BIDS, IT MAY BE THAT HAUGHTON WOULD NOT HAVE BEEN THE LOW BIDDER IF OTIS HAD BASED ITS BID UPON A LONGER COMPLETION TIME.

WE RECOGNIZE THAT ALTHOUGH HAUGHTON STATED IN ITS JANUARY 21 LETTER THAT IT BASED ITS BID UPON COMPLETION IN 825 DAYS, IT FURTHER INDICATED THAT IT MIGHT COMPLETE THE WORK EARLIER. WE HAVE NO WAY OF KNOWING FROM ITS BID WHETHER IT WOULD HAVE BID THE SAME PRICE AND WOULD HAVE BEEN THE LOW BIDDER IF IT WAS REQUIRED TO BID TO A 635-DAY COMPLETION TIME. NEITHER DO WE KNOW WHETHER OTIS WOULD HAVE BEEN THE LOW BIDDER IF IT HAD NOT BID ON THE BASIS OF COMPLETION WITHIN 635 DAYS. IT WOULD NOT BE CONSISTENT WITH FORMAL ADVERTISING PROCEDURES TO GO OUTSIDE THE BIDS TO ASCERTAIN WHAT THE BIDDERS WOULD HAVE BID IF THE INVITATION FOR BIDS HAD NOT BEEN DEFECTIVE.

IN OUR VIEW THE QUESTION AS TO THE RESPONSIVENESS OF HAUGHTON'S BID IS NOT RELEVANT TO THE MATTER. AS INDICATED ABOVE, THE FPR REQUIRED THE CONTRACTING OFFICER TO FIX THE TIME FOR COMPLETION OF THE WORK AND INCLUDE IT IN THE INVITATION FOR BIDS. WHILE A PARAGRAPH WAS INCLUDED IN THE INVITATION IN WHICH THE TIME FOR COMPLETION WAS TO BE INSERTED BY THE CONTRACTING AGENCY, IT FAILED TO DO SO. THUS, THE INVITATION DID NOT SPECIFY WHAT TIME, IF ANY, WOULD BE ACCEPTABLE FOR COMPLETION OF THE WORK AND THE BID FORM WAS NOT SPECIFIC THAT THE BIDDER WAS TO ENTER ANY TIME FOR COMPLETION. IF HAUGHTON WAS NONRESPONSIVE FOR FAILING TO SPECIFY ANY NUMBER OF DAYS FOR COMPLETION IN THE BID, IT CAN BE ATTRIBUTED TO THE DEFECTIVE INVITATION. IF IT HAD SPECIFIED 825 DAYS FOR COMPLETION IN THE BID, THERE WOULD BE NO QUESTION AS TO ITS RESPONSIVENESS, SINCE THE INVITATION DID NOT SPECIFY ANY TIME FOR COMPLETION. HOWEVER, THE CONTRACTING OFFICER HAS INDICATED THAT THE TIME FOR COMPLETION IS IMPORTANT, SO THAT IF IT WERE RESPONSIVE ON THAT POINT, THE CONTRACTING OFFICER WOULD HAVE NO CHOICE BUT TO CANCEL ALL BIDS AND READVERTISE ON AN INVITATION SPECIFYING TIME FOR COMPLETION. IN THAT REGARD, IT HAS BEEN HELD THAT BIDDERS CANNOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW UNLESS THEY KNOW IN ADVANCE THE BASIS ON WHICH BIDS WILL BE EVALUATED. 120741, MARCH 17, 1955. FURTHER, IN 37 COMP. GEN. 251 (1957), IT WAS HELD THAT THE AWARD OF A CONSTRUCTION CONTRACT TO OTHER THAN THE LOW BIDDER, ON THE BASIS OF AN EARLIER COMPLETION DATE UNDER AN INVITATION WHICH DID NOT INCLUDE ANY STATEMENT REGARDING COMPLETION TIME OR THAT TIME WOULD BE CONSIDERED AS AN EVALUATION FACTOR, WAS IMPROPER, AND THE FACT THAT THE SPECIFICATIONS REQUIRED BIDDERS TO FURNISH A COMPLETION DATE WAS NOT SUFFICIENT TO JUSTIFY AN EVALUATION ON ANY BASIS OTHER THAN PRICE. ADDITION, OUR OFFICE HAS HELD THAT FREE AND UNRESTRICTED COMPETITION CANNOT BE OBTAINED UNLESS ALL BIDS ARE MADE ON THE SAME BASIS AND THAT THERE WAS NO CHOICE BUT TO REJECT ALL BIDS AND READVERTISE WHEN TIME WAS AN IMPORTANT CONSIDERATION AND THE INVITATION DID NOT SPECIFY ANY ACCEPTABLE TIME LIMIT. B-140071, SEPTEMBER 29, 1959; 41 COMP. GEN. 599 (1962); AND 46 ID. 745 (1967). IN 41 COMP. GEN. 599, AT PAGE 602, IT WAS STATED:

WE HAVE HELD THAT TIME OF DELIVERY PROPERLY MAY BE CONSIDERED IN MAKING AN AWARD, PRICE ALONE NOT BEING CONTROLLING, WHEN EARLY DELIVERY IS REQUIRED IN THE GOVERNMENT'S INTEREST AND WHEN THE INVITATION SO PROVIDES, ALL BIDDERS THUS BEING PLACED ON NOTICE AND GIVEN AN EQUAL OPPORTUNITY TO COMPETE FOR THE GOVERNMENT'S BUSINESS. B-128405, AUGUST 3, 1956. HAVE, ALSO, HELD IN OUR NUMEROUS DECISIONS ON THIS SUBJECT THAT, IN FAIRNESS TO BIDDERS, IN THE INTEREST OF THE MAINTENANCE OF THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, AND IN COMPLIANCE WITH THE STATUTORY REQUIREMENTS, INVITATIONS FOR BIDS SHOULD BE AS CLEAR, PRECISE AND EXACT AS POSSIBLE IN ADVISING BIDDERS OF THE BASIS ON WHICH THEIR BIDS WILL BE EVALUATED. 36 COMP. GEN. 380. FURTHER, IN THIS CONNECTION, IN OUR DECISION OF NOVEMBER 8, 1956, B-129678, TO THE THEN SECRETARY OF THE NAVY, WE STATED, CONCERNING THE TIME OF DELIVERY PROVISION THERE INVOLVED, IN PART, THAT--

"WE HAVE CONSISTENTLY HELD THAT BIDDERS CANNOT COMPETE ON AN EQUAL BASIS, AS REQUIRED BY LAW, UNLESS THEY KNOW IN ADVANCE THE BASIS ON WHICH THEIR BIDS WILL BE EVALUATED. FOR THIS REASON IT IS OUR VIEW THAT A CONTRACTING AGENCY CANNOT PROPERLY RESERVE THE RIGHT TO DETERMINE AFTER THE BIDS ARE SUBMITTED WHETHER TIME OF DELIVERY WILL BE A FACTOR IN EVALUATING BIDS."

IN OUR DECISION OF SEPTEMBER 15, 1956, B-128405, CITING IN SUPPORT THEREOF THE HOLDING OF THE COURT IN UNITED STATES V BROOKRIDGE FARM, 111 F. 2D 461, AFFIRMING 27 F. SUPP. 909, WE HELD THAT CONTRACTS AWARDED UNDER INVITATIONS WHICH ARE NOT SO DRAWN AS TO PERMIT COMPETITION ON AN EQUAL BASIS, BY FAILING TO SET FORTH THE BASIS FOR EVALUATION AS BETWEEN PRICE AND TIME OF DELIVERY, ARE VOIDABLE. FINALLY, CONCERNING THE POSITION THAT SAVINGS COULD BE REALIZED BY THE GOVERNMENT IF THE BASIS FOR EVALUATION AS BETWEEN PRICE AND TIME OF DELIVERY WERE LEFT OPEN, WE HAVE STATED MANY TIMES THAT IN OUR OPINION THE PRESERVATION OF THE COMPETITIVE BIDDING SYSTEM IS MORE BENEFICIAL TO THE GOVERNMENT FROM A LONG-RANGE STANDPOINT THAN THE PECUNIARY SAVING WHICH MIGHT BE REALIZED IN AN INDIVIDUAL CASE.

IT MAY BE THAT HAUGHTON WAS RESPONSIVE ON THE BASIS OF THE BID AS SUBMITTED, SINCE THE INVITATION DID NOT PROVIDE A TIME FOR COMPLETION AND DID NOT PROVIDE FOR TIME AS AN EVALUATION FACTOR. BUT, AS STATED ABOVE, THE QUESTION OF RESPONSIVENESS IS NOT THE ISSUE.

THE INVITATION WAS DEFECTIVE IN THAT IT DID NOT SUPPLY A TIME FOR COMPLETION AS THE FPR REQUIRES AND THERE WAS NOTHING IN THE INVITATION INDICATING WHAT TIME, IF ANY, WOULD BE ACCEPTABLE. PRICE, NOT TIME FOR PERFORMANCE, WOULD THEREFORE BE THE CONSIDERATION IN DETERMINING THE ACCEPTABLE BID. THUS A BIDDER COULD HAVE SPECIFIED ANY TIME FOR COMPLETION, WITHOUT LIMITATION, AND IT WOULD HAVE BEEN REQUIRED TO BE ACCEPTED IF IT WAS THE LOW BID. AS INDICATED ABOVE, ANY CONSIDERATION OF TIME AFTER THE OPENING OF BIDS WOULD REQUIRE THE READVERTISEMENT OF THE PROCUREMENT, SINCE THAT WOULD BE A NEW FACTOR ADDED AFTER THE BID OPENING.

AS WE HAVE INDICATED, THE INVITATION WAS DEFECTIVE FOR FAILING TO FOLLOW FPR AND WAS UNCERTAIN AS TO THE TIME FOR PERFORMANCE BY REASON OF THIS DEFECT. IN B-164749, AUGUST 26, 1968, OUR OFFICE UPHELD THE CANCELLATION OF AN INVITATION FOR BIDS WHICH CONTAINED UNCERTAIN AND AMBIGUOUS PERFORMANCE TERMS WITHOUT CONSIDERING THE RESPONSIVENESS OF SOME BIDS WHICH WERE ALLEGED TO BE NONRESPONSIVE TO THE DELIVERY REQUIREMENTS OF THE INVITATION. SEE, ALSO, B-143220, JUNE 30, 1960, UPHOLDING THE CANCELLATION AND READVERTISEMENT OF AN INVITATION WHICH WAS AMBIGUOUS AS TO WHETHER TIME OR PRICE WAS TO BE THE CONSIDERATION FOR AWARD. IN VIEW OF THE FOREGOING, WE ARE OF THE VIEW THAT THE CIRCUMSTANCES OF THE IMMEDIATE CASE ..END :