B-170795, OCT. 6, 1970

B-170795: Oct 6, 1970

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THE LANGUAGE OF PROVISION WHICH ADVISES THAT THE FUNDS STATED AVAILABLE PRIOR TO BID OPENING ARE FOR EVALUATION PURPOSES ONLY AND THAT ADDITIONAL FUNDS MAY BE OBTAINED FOR PURPOSE OF MAKING AWARD. IS CONSTRUED AS CONTEMPLATING AWARD AT A PRICE IN EXCESS OF FUNDS AT BID OPENING. DACA 21-70-B-0036 TO ANY OTHER COMPANY WHICH WAS REFERRED TO THIS OFFICE BY THE CORPS OF ENGINEERS PURSUANT TO YOUR LETTER OF SEPTEMBER 4. DACA 21-70-B-0036 WAS ISSUED BY THE CORPS OF ENGINEERS. BIDS WERE REQUESTED ON THE BASIS OF THE FIRST OR BASE BID ITEM WHICH COVERED FIFTEEN ITEMS OF WORK AND ON THE BASIS OF SEVEN DEDUCTIVE ITEMS. SINCE THE FUNDS DETERMINED TO BE AVAILABLE PRIOR TO BID OPENING FOR THIS CONSTRUCTION WORK WERE LESS THAN ANY BIDS RECEIVED.

B-170795, OCT. 6, 1970

BID PROTEST - AWARDS - BASE BID V ADDITIVES DENIAL OF PROTEST ON BEHALF OF THE RANGER CONSTRUCTION COMPANY, AGAINST REJECTION OF BASE BID AND SIX ADDITIVE OR DEDUCTIVE ITEMS, AND AGAINST THE AWARD OF CONTRACT TO THE COITE SOMER COMPANY, LOW BIDDER ON BASIS OF SEVEN ADDITIVE ITEMS, FOR CONSTRUCTION OF BACHELOR OFFICERS QUARTERS AT FORT GORDON, GA., BY THE CORPS OF ENGINEERS, ARMY. AN EVALUATION PROVISION IN AN INVITATION THAT SPECIFIES THAT THE LOW BID FOR THE BASE ITEM TOGETHER WITH EITHER THOSE ADDITIVES OR DEDUCTIVES WHICH OFFER THE MOST FEATURES OF WORK WITHIN THE FUNDS AVAILABLE BEFORE BID OPENING DOES NOT REQUIRE EVALUATION SOLELY ON THE BASIS OF THE BASE BID BUT THE BID WITH THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED AVAILABLE. FURTHER, THE LANGUAGE OF PROVISION WHICH ADVISES THAT THE FUNDS STATED AVAILABLE PRIOR TO BID OPENING ARE FOR EVALUATION PURPOSES ONLY AND THAT ADDITIONAL FUNDS MAY BE OBTAINED FOR PURPOSE OF MAKING AWARD, IS CONSTRUED AS CONTEMPLATING AWARD AT A PRICE IN EXCESS OF FUNDS AT BID OPENING. THEREFORE AWARD ON BASIS OF THE LOW BASE BID MINUS DEDUCTIVES WHICH OFFERED THE MOST FEATURES WITHIN FUNDS AVAILABLE AT THE BID OPENING.

TO HANSELL, POST, BRANDON & DORSEY:

THIS CONCERNS YOUR PROTEST ON BEHALF OF RANGER CONSTRUCTION COMPANY AGAINST AN AWARD UNDER INVITATION FOR BIDS NO. DACA 21-70-B-0036 TO ANY OTHER COMPANY WHICH WAS REFERRED TO THIS OFFICE BY THE CORPS OF ENGINEERS PURSUANT TO YOUR LETTER OF SEPTEMBER 4, 1970, AND THE SUBSEQUENT CORRESPONDENCE RELATING TO THAT PROTEST.

INVITATION FOR BIDS NO. DACA 21-70-B-0036 WAS ISSUED BY THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, ON MAY 18, 1970, FOR THE CONSTRUCTION OF ONE EIGHT-STORY 299-MAN BACHELOR OFFICERS QUARTERS AT FORT GORDON, GEORGIA. BIDS WERE REQUESTED ON THE BASIS OF THE FIRST OR BASE BID ITEM WHICH COVERED FIFTEEN ITEMS OF WORK AND ON THE BASIS OF SEVEN DEDUCTIVE ITEMS, OR THE BASIC WORK MINUS SEVEN SPECIFIED ITEMS OF WORK. YOUR CLIENT, RANGER, SUBMITTED THE LOW BASE BID AND THE LOW BID CONSIDERING THE FIRST SIX DEDUCTIVE BID ITEMS. HOWEVER, THE COITE SOMERS COMPANY SUBMITTED THE LOW BID CONSIDERING ALL SEVEN DEDUCTIVE BID ITEMS. SINCE THE FUNDS DETERMINED TO BE AVAILABLE PRIOR TO BID OPENING FOR THIS CONSTRUCTION WORK WERE LESS THAN ANY BIDS RECEIVED, THE CONTRACTING OFFICER PROPOSED TO SEEK ADDITIONAL FUNDS AND TO MAKE AWARD TO COITE SOMERS ON THE BASIS OF THE SEVENTH OR TOTAL DEDUCTIVE BID ITEM BASIS. YOU PROTEST THAT PROPOSED ACTION ON THE BASIS THAT RANGER SUBMITTED THE LOW BASE BID, THAT THE BID BY COITE SOMERS WAS NOT SIGNED BY AN AUTHORIZED OFFICIAL AND THAT IF SUFFICIENT FUNDS WERE NOT AVAILABLE PRIOR TO BID OPENING TO MAKE AWARD ON THE BASIS OF THE TOTAL DEDUCTIVE BID ITEMS THEN THE INVITATION SHOULD BE CANCELLED.

THE FIRST BASIS FOR YOUR PROTEST, THAT RANGER SUBMITTED THE LOW BID, IS PREMISED UPON YOUR INTERPRETATION OF CLAUSE 15 OF STANDARD FORM 20 WHICH STATES:

"15. ADDITIVE OR DEDUCTIVE ITEMS (APR 1968). THE LOW BIDDER FOR PURPOSES OF AWARD SHALL BE THE CONFORMING RESPONSIBLE BIDDER OFFERING THE LOW AGGREGATE AMOUNT FOR THE FIRST OR BASE BID ITEM, PLUS OR MINUS (IN THE ORDER OF PRIORITY LISTED IN THE SCHEDULE) THOSE ADDITIVE OR DEDUCTIVE BID ITEMS PROVIDING THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED BY THE GOVERNMENT TO BE AVAILABLE BEFORE BIDS ARE OPENED. IF ADDITION OF ANOTHER BID ITEM IN THE LISTED ORDER OF PRIORITY WOULD MAKE THE AWARD EXCEED SUCH FUNDS FOR ALL BIDDERS, IT SHALL BE SKIPPED AND THE NEXT SUBSEQUENT ADDITIVE BID ITEM IN A LOWER AMOUNT SHALL BE ADDED IF AWARD THEREON CAN BE MADE WITHIN SUCH FUNDS. FOR EXAMPLE, WHEN THE AMOUNT AVAILABLE IS $100,000 AND A BIDDER'S BASE BID AND FOUR SUCCESSIVE ADDITIVES ARE $85,000, $10,000, $8,000, $6,000 AND $4,000, THE AGGREGATE AMOUNT OF THE BID FOR PURPOSES OF AWARD WOULD BE $99,000 FOR THE BASE BID PLUS THE FIRST AND FOURTH ADDITIVES, THE SECOND AND THIRD ADDITIVES BEING SKIPPED BECAUSE EACH OF THEM WOULD CAUSE THE AGGREGATE BID TO EXCEED $100,000. IN ANY CASE ALL BIDS SHALL BE EVALUATED ON THE BASIS OF THE SAME ADDITIVE OR DEDUCTIVE BID ITEMS, DETERMINED AS ABOVE PROVIDED. THE LISTED ORDER OF PRIORITY NEED BE FOLLOWED ONLY FOR DETERMINING THE LOW BIDDER. AFTER DETERMINATION OF THE LOW BIDDER AS STATED, AWARD IN THE BEST INTERESTS OF THE GOVERNMENT MAY BE MADE TO HIM ON HIS BASE BID AND ANY COMBINATION OF HIS ADDITIVE OR DEDUCTIVE BID ITEMS FOR WHICH FUNDS ARE DETERMINED TO BE AVAILABLE AT THE TIME OF THE AWARD, PROVIDED THAT AWARD ON SUCH COMBINATION OF BID ITEMS DOES NOT EXCEED THE AMOUNT OFFERED BY ANY OTHER CONFORMING RESPONSIBILE BIDDER FOR THE SAME COMBINATION OF BID ITEMS." YOU CONSTRUE THAT LANGUAGE TO MEAN THE LOW BIDDER WILL BE THE OFFEROR SUBMITTING THE LOW BASE BID PLUS ANY NET ADDITIVE AMOUNT PROVIDING FOR THE MOST FEATURES OF THE WORK WHICH COMES WITHIN THE FUNDS DETERMINED TO BE AVAILABLE PRIOR TO BID OPENING. IN THIS INSTANCE SINCE THE FUNDS DETERMINED AVAILABLE DID NOT COVER EVEN THE BASE BID MINUS ALL DEDUCTIVES YOU BELIEVE THE BASE BID ALONE IS DETERMINATIVE OF THE LOW BIDDER SINCE IT OFFERS THE MOST FEATURES OF THE WORK. YOU ALSO STATE THAT CLAUSE 15 CANNOT BE CONSTRUED TO MEAN THE BASE BID MINUS DEDUCTIVES ONLY SINCE THE BASE BID WOULD BE MEANINGLESS INASMUCH AS THE REAL MINIMUM OR BASE BID WOULD THE BASE BID MINUS ALL DEDUCTIVES.

WE CANNOT AGREE WITH YOUR CONSTRUCTION OF CLAUSE 15. AS YOU STATE IN YOUR LETTER OF AUGUST 25, 1970, TO THE CONTRACTING OFFICER (UNDER YOUR INTERPRETATION) "THE LANGUAGE IS INAPPLICABLE TO ALTERNATIVE BID ITEMS WHICH ARE ALL ONLY DEDUCTIVES". THIS INVITATION FOR BIDS INCLUDED ONLY DEDUCTIVE ITEMS AND THEREFORE IT IS IMPOSSIBLE TO INCREASE THE BASE BID. CLAUSE 15 AS YOU INTERPRET IT WOULD BE VIABLE ONLY WHERE THE INVITATION CONTAINED ADDITIVES OR ADDITIVES AND DEDUCTIVES BOTH. YOUR INTERPRETATION WOULD RENDER THE INCLUSION OF CLAUSE 15 IN THE INSTANT INVITATION FOR BIDS MEANINGLESS. COURTS ARE RELUCTANT ABSENT CONCLUSIVE EVIDENCE TO INTERPRET A CONTRACT PROVISION SO AS TO RENDER IT MEANINGLESS. SEE FRED R. COMB CO. V UNITED STATES, 100 CT. CL. 259 (1943) AND BETHLEHEM STEEL CO. V UNITED STATES, 75 CT. CL. 845 (1932).

WE DO NOT CONSIDER THE LANGUAGE IN CLAUSE 15 TO BE AMBIGUOUS. THAT LANGUAGE STATES THAT FOR THE PURPOSES OF EVALUATION THE LOW BID SHALL BE THAT OFFERING THE LOW BID FOR THE BASE ITEM TOGETHER WITH EITHER THOSE ADDITIVES OR DEDUCTIVES (WHICHEVER THE IFB CONTAINS) IN ORDER OF PRECEDENCE WHICH OFFERS THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED AVAILABLE BEFORE BID OPENING. WE DO NOT CONSIDER THIS INTERPRETATION TO BE INCONSISTENT WITH THE USE OF THE TERM "BASE BID." SIMPLY STATED, THE "BASE BID" IN THE INVITATION IS THAT WORK WHICH THE GOVERNMENT FEELS SATISFIES EITHER ITS MINIMUM OR ITS MAXIMUM REQUIREMENTS. IN ANY CASE BIDDERS WERE APPRISED BY CLAUSE 15 THAT EVALUATION WOULD NOT BE MADE SOLELY ON THE BASIS OF THE BASE BID. RATHER THE LOW BID WAS TO BE THAT BID WHICH COVERED THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED TO BE AVAILABLE PRIOR TO BID OPENING. CF. B- 170168, SEPTEMBER 10, 1970.

YOU ALSO PROTEST THAT EVEN UNDER THE INTERPRETATION GIVEN CLAUSE 15 BY THE CONTRACTING OFFICER AWARD SHOULD NOT BE MADE TO COITE SOMERS SINCE NO BASE BIDS EVEN MINUS ALL DEDUCTIVES CAME WITHIN THE FUNDS DETERMINED TO BE AVAILABLE BEFORE BID OPENING. YOU CONTEND WAIVER OF THAT REQUIREMENT FOR AWARD WOULD BE PREJUDICIAL TO OTHER BIDDERS AND WOULD INTRODUCE A SUBJECTIVE FACTOR INTO THE EVALUATION PROCESS. WE MUST REJECT THAT POSITION. FIRST, CLAUSE 15 CLEARLY ADVISES THAT THE FUNDS STATED AVAILABLE PRIOR TO BID OPENING ARE FOR EVALUATION PURPOSES ONLY AND THAT ADDITIONAL FUNDS MAY BE OBTAINED FOR THE PURPOSE OF MAKING AWARD. BELIEVE THAT LANGUAGE CLEARLY CONTEMPLATES AWARD OF A CONTRACT AT A PRICE IN EXCESS OF THE FUNDS DETERMINED AVAILABLE PRIOR TO BID OPENING. NOR DO WE BELIEVE SUCH ACTION PREJUDICES OTHER BIDDERS OR INTRODUCES A SUBJECTIVE EVALUATION INTO THE BIDDING. AS WE HAVE STATED WE FEEL BIDDERS WERE APPRISED THAT THE LOW BID WOULD BE THE LOWEST PRICE OFFERED FOR THE BASE BID MINUS DEDUCTIVES WHICH OFFERED THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED AVAILABLE BEFORE BID OPENING. HERE THAT WOULD BE THE LOW PRICE FOR THE BASE BID MINUS ALL DEDUCTIVES SINCE EVEN THAT WORK WOULD NOT COME WITHIN THE FUNDS DETERMINED AVAILABLE PRIOR TO BID OPENING.

WE BELIEVE THIS IS ANALOGOUS TO THE SITUATION WHERE ONLY ADDITIVES ARE INVOLVED. IN SUCH A SITUATION WHERE FUNDS DETERMINED AVAILABLE PRIOR TO BID OPENING ARE INSUFFICIENT TO COVER THE LOWEST BASE BID, AWARD COULD BE MADE, IF FUNDS CAN BE OBTAINED, ONLY TO THE BIDDER SUBMITTING THE LOWEST BID ON THE LEAST WORK. OF COURSE AFTER THE FUNDS ARE OBTAINED AWARD COULD ALSO INCLUDE AN ADDITIVE BUT ONLY IF SOME OTHER RESPONSIBLE BIDDER HAD NOT SUBMITTED A LOWER BID ON THAT COMBINATION. IN EITHER SITUATION BIDDERS HAVE BEEN ADVISED OF THE FEWEST FEATURES OF WORK FOR WHICH BIDS MAY BE SUBMITTED AND AS SUCH ARE BIDDING ON AN EQUAL BASIS. FURTHER, NO MATTER WHAT AMOUNT OF FUNDS THE CONTRACTING OFFICER ACTUALLY OBTAINS, AWARD CAN BE MADE ONLY TO THE BIDDER SUBMITTING THE LOWEST PRICE FOR THE FEWEST FEATURES OF THE WORK PLUS ANY SUBSEQUENT INCREASE IN THE WORK EITHER BY AN ADDITIVE OR BY RESTORING A DEDUCTIVE FOR WHICH THAT SAME BIDDER HAD ALSO SUBMITTED THE LOWEST AGGREGATE BID PRICE. AS A RESULT THE CONTRACTING OFFICER CAN NOT SUBJECTIVELY OR OTHERWISE SELECT A PARTICULAR BIDDER BY OBTAINING ONLY A CERTAIN AMOUNT OF FUNDS.

FINALLY, YOU QUESTIONED THE AUTHORITY OF THE SECRETARY OF THE CORPORATION TO BIND COITE SOMERS SINCE IN THE STATE OF GEORGIA SUCH OFFICIAL DOES NOT HAVE APPARENT OR OSTENSIBLE AUTHORITY TO BIND HIS CORPORATION. THE SHORT ANSWER TO THIS POINT IS THAT THIS OFFICE HAS BEEN FURNISHED DOCUMENTS SHOWING THAT THE SECRETARY IN THIS CASE HAD ACTUAL AND DIRECT AUTHORITY TO SO BIND COITE SOMERS.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.