B-170217, JUL 17, 1970, 50 COMP. GEN. 42

B-170217: Jul 17, 1970

Additional Materials:

Contact:

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

 

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

BIDS - LATE - TELEGRAPHIC MODIFICATIONS - INCONSISTENT PROVISIONS WHERE THE INVITATION FOR BIDS PROVIDED FOR CONSIDERATION OF A LATE BID MODIFICATION ONLY IF THE DELAY WAS DUE TO WESTERN UNION AND PARAGRAPH 2- 303.4 OF THE ARMED SERVICES PROCUREMENT REGULATION. PROVIDED FOR CONSIDERATION ONLY IF THE LATE RECEIPT OF A MODIFICATION WAS CAUSED BY GOVERNMENT MISHANDLING. THE INCONSISTENCY OF THE PROVISIONS WAS PREJUDICIAL TO BIDDERS AND DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM. ALTHOUGH THE SECOND LOW BIDDER'S TELEGRAPHIC MODIFIED BID PRICE WAS LOWER. 1970: REFERENCE IS MADE TO THE LETTER WITH ENCLOSURES DATED JULY 2. N62467-70-B-6622 WAS ISSUED ON MAY 5. BIDS WERE OPENED AS SCHEDULED AND THE BID OF JA-MAR AT $74.

B-170217, JUL 17, 1970, 50 COMP. GEN. 42

BIDS - LATE - TELEGRAPHIC MODIFICATIONS - INCONSISTENT PROVISIONS WHERE THE INVITATION FOR BIDS PROVIDED FOR CONSIDERATION OF A LATE BID MODIFICATION ONLY IF THE DELAY WAS DUE TO WESTERN UNION AND PARAGRAPH 2- 303.4 OF THE ARMED SERVICES PROCUREMENT REGULATION, IN EFFECT AT THE TIME, PROVIDED FOR CONSIDERATION ONLY IF THE LATE RECEIPT OF A MODIFICATION WAS CAUSED BY GOVERNMENT MISHANDLING, THE INCONSISTENCY OF THE PROVISIONS WAS PREJUDICIAL TO BIDDERS AND DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM. THEREFORE, A CONTRACT AWARD MADE ON THE BASIS OF THE REGULATION TO THE LOW BIDDER AT ITS REDUCED TELEGRAPHIC PRICE PURSUANT TO PARAGRAPH 2-305 OF THE REGULATION, ALTHOUGH THE SECOND LOW BIDDER'S TELEGRAPHIC MODIFIED BID PRICE WAS LOWER, BOTH MODIFICATIONS HAVING BEEN TIMELY RECEIVED BY WESTERN UNION BUT NOT DELIVERED UNTIL AFTER BID OPENING, SHOULD BE CANCELED AND THE PROCUREMENT RESOLICITED ONLY FROM THE TWO INVOLVED CONCERNS.

TO THE SECRETARY OF THE NAVY, JULY 17, 1970:

REFERENCE IS MADE TO THE LETTER WITH ENCLOSURES DATED JULY 2, 1970, FROM THE NAVAL FACILITIES ENGINEERING COMMAND, REFERENCE: 0211E/RSL:KAM, REQUESTING OUR DECISION ON THE PROTEST FROM HOWARD FERRIEL & SONS, INCORPORATED (FERRIELL) AGAINST THE AWARD OF A CONTRACT TO JA-MAR PAINTING COMPANY, INCORPORATED (JA-MAR).

INVITATION FOR BIDS NO. N62467-70-B-6622 WAS ISSUED ON MAY 5, 1970, BY THE NAVAL AIR STATION, MEMPHIS (NAS, MEMPHIS), MILLINGTON, TENNESSEE, FOR INTERIOR AND EXTERIOR PAINTING OF FAMILY HOUSING AT THE INSTALLATION WITH THE BID OPENING SCHEDULED FOR 2:00 P.M. C.D.T., JUNE 1, 1970. BIDS WERE OPENED AS SCHEDULED AND THE BID OF JA-MAR AT $74,856.50 WAS LOW. THE BID OF FERRIELL AT $80,685 WAS THE SECOND LOW BID.

AT 8:00 A.M. ON JUNE 2, 1970, SUBSEQUENT TO BID OPENING, THE OFFICER IN CHARGE OF CONSTRUCTION (OICC) RECEIVED TWO TELEGRAPHIC MODIFICATIONS. ONE MODIFICATION WAS FROM JA-MAR DECREASING ITS BID PRICE BY 6 PERCENT. THIS TELEGRAM FROM MIAMI, FLORIDA, ARRIVED AT THE WESTERN UNION OFFICE LOCATED AT NAS, MEMPHIS, AT 8:01 A.M. ON JUNE 1, 1970, BUT WAS NOT TRANSMITTED TO THE COMMUNICATIONS CENTER AT THE NAVAL AIR STATION UNTIL 2:55 P.M., JUNE 1, 1970, WHICH WAS AFTER BID OPENING. THE OTHER MODIFICATION FROM FERRIELL, WHICH REDUCED ITS PRICE TO $63,933, WAS SENT FROM LOUISVILLE, KENTUCKY, AND ARRIVED AT THE WESTERN UNION OFFICE LOCATED AT NAS, MEMPHIS, AT 10:30 A.M., JUNE 1, 1970. THIS MESSAGE ALSO ARRIVED AT THE NAS COMMUNICATIONS CENTER AFTER BID OPENING AT 2:55 P.M., ON JUNE 1, 1970. INDICATED BOTH OF THE MODIFICATIONS WERE RECEIVED BY THE OICC AT 8:00 A.M. ON JUNE 2, 1970.

PARAGRAPH 4 ENTITLED "LATE BIDS AND MODIFICATIONS OR WITHDRAWALS" OF THE INVITATION PROVIDED IN EFFECT THAT LATE TELEGRAPHIC MODIFICATIONS WOULD BE CONSIDERED IF THE LATE RECEIPT WAS DUE TO DELAY BY THE TELEGRAPH COMPANY FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.

ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-303.4, THE ASPR PROVISION IN EFFECT AT THE TIME THE SOLICITATION WAS ISSUED, PROVIDES THAT A LATE TELEGRAPHIC BID RECEIVED BEFORE AWARD SHALL NOT BE CONSIDERED FOR AWARD, REGARDLESS OF THE CAUSE OF THE LATE RECEIPT, INCLUDING DELAYS CAUSED BY THE TELEGRAPH COMPANY, EXCEPT FOR DELAYS DUE TO MISHANDLING ON THE PART OF THE GOVERNMENT IN ITS TRANSMITTAL TO THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS FOR THE RECEIPT OF BIDS, AS PROVIDED FOR BIDS SUBMITTED BY MAIL. THE IMPORT OF THIS REGULATION IS THAT LATE TELEGRAPHIC MODIFICATIONS ARE NOT TO BE CONSIDERED UNLESS IT IS SHOWN THAT THE DELAY WAS DUE TO MISHANDLING BY THE GOVERNMENT AT THE INSTALLATION.

ON JUNE 9, 1970, THE OICC REJECTED THE TELEGRAPHIC MODIFICATION OF FERRIELL SINCE IT WAS NOT RECEIVED UNTIL AFTER BID OPENING, AND AN AWARD WAS MADE TO JA-MAR ON THE SAME DATE. THE AWARD TO JA-MAR WAS IN THE AMOUNT OF $70,365.11 WHICH INCLUDES THE REDUCTION IN JA-MAR'S TELEGRAPHIC MODIFICATION. THE AUTHORITY FOR CONSIDERING JA-MAR'S MODIFICATION IS ASPR 2-305 WHICH PROVIDES THAT A LATE MODIFICATION OF THE OTHERWISE SUCCESSFUL BID SHALL BE OPENED AT ANY TIME IT IS RECEIVED; AND IF IN THE JUDGMENT OF THE CONTRACTING OFFICER IT MAKES THE TERMS OF THE BID MORE FAVORABLE TO THE GOVERNMENT IT SHALL BE CONSIDERED.

THE LETTER OF JULY 2, 1970, FROM NAVAL FACILITIES ENGINEERING COMMAND ADVISES THAT THE OICC HAS VERIFIED WITH THE TELEGRAPH COMPANY THAT FERRIELL'S TELEGRAM WOULD HAVE ARRIVED IN TIME FOR BID OPENING BUT FOR DELAYS OF THE TELEGRAPH COMPANY IN HANDLING THE MESSAGE.

THE SITUATION PRESENTED TO OUR OFFICE IS ONE WHERE THE OICC ACTED IN ACCORDANCE WITH THE APPLICABLE PROVISION IN THE REGULATION REGARDING LATE TELEGRAPHIC MODIFICATIONS BUT NOT IN ACCORDANCE WITH THE PROVISION IN THE INVITATION WHICH WAS INCONSISTENT WITH THE REGULATION.

WE RECOGNIZE THAT BIDDERS NORMALLY COMPUTE THEIR BIDS ON THE BASIS OF THE TERMS AND CONDITIONS STATED IN THE INVITATION, AND WILL OTHERWISE RELY ON THESE PROVISIONS AND THAT IT IS A SERIOUS MATTER TO VARY OR DISREGARD ANY OF THE STATED TERMS AND CONDITIONS OF THE SOLICITATION AFTER BIDS HAVE BEEN OPENED. IN 17 COMP. GEN. 554, (1938) IT WAS STATED THAT TO PERMIT PUBLIC OFFICERS TO PERMIT BIDDERS TO VARY THEIR PROPOSALS AFTER BIDS ARE OPENED WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING CONTRACTS ON AN OPEN COMPETITIVE BASIS. CHANGING THE GROUND RULES UPON WHICH BIDDERS ARE REQUESTED TO BID AFTER OPENING OF BIDS IS SUBJECT TO THE SAME CRITICISM.

IN OUR OPINION, NOT TO GIVE EFFECT TO THE PROVISION IN THE INVITATION REGARDING THE CONSIDERATION OF LATE TELEGRAPHIC MODIFICATIONS WOULD BE A SERIOUS MATTER AND COULD BE CONSIDERED AS BEING PREJUDICIAL TO FERRIELL SINCE IF FERRIELL KNEW THAT LATE TELEGRAPHIC MODIFICATIONS WOULD NOT BE CONSIDERED EXCEPT IN THE MISHANDLING SITUATION, THIS BIDDER MIGHT WELL HAVE HAND CARRIED THE MODIFICATION TO THE BID OPENING ROOM.

CONSIDERING THE INCONSISTENCY BETWEEN ASPR AND THE INVITATION AND SINCE A RESULT PREJUDICIAL TO EITHER JA-MAR OR FERRIELL CANNOT BE AVOIDED IF IT WERE DECIDED THAT EITHER THE REGULATION OR THE PROVISION IN THE INVITATION SHOULD BE CONSIDERED AS CONTROLLING, WE FIND THAT THE CONTRACT WITH JA-MAR SHOULD BE TERMINATED, AND THAT THERE SHOULD BE A RESOLICITATION OF THIS PROCUREMENT, LIMITED, HOWEVER, TO THESE TWO FIRMS. IN THIS REGARD WE ARE ADVISED THAT IF THE CONTRACT WITH JA-MAR WERE TERMINATED, IT IS ESTIMATED THE GOVERNMENT WOULD INCUR TERMINATION CHARGES OF APPROXIMATELY $1,000.