B-171233, MAY 13, 1971

B-171233: May 13, 1971

Additional Materials:

Contact:

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

 

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

BECAUSE THE CONTRACTOR'S POST OFFICE BOX WAS NOT CHECKED ON BID OPENING DAY AT A TIME REASONABLY CLOSE TO THE LATEST TIME BY WHICH BIDS COULD HAVE BEEN DELIVERED TO THE BID OPENING ROOM. IT WAS PROPER TO CONSIDER GEAR'S BID AS TIMELY. IT WOULD ADVERSELY AFFECT THE INTEGRITY OF THE COMPETITIVE BID SYSTEM TO REJECT GEAR'S BID AS NONRESPONSIVE BECAUSE THEY CLOSED THE ACCOUNT ON WHICH ITS BID DEPOSIT CHECK WAS DRAWN. KOCH & TUBB: REFERENCE IS MADE TO YOUR LETTER OF MARCH 23. BIDS WERE OPENED AS SCHEDULED AT 2:00 P.M. GEAR WAS PICKED UP AT THE RIVERSIDE STATION POST-OFFICE BOX DESIGNATED IN THE SALES INVITATION AND DELIVERED TO THE PLANT CLEARANCE OFFICER AT MENASCO. GEAR THAT ITS BID WAS RECEIVED LATE AND THEREFORE WAS CONSIDERED NONRESPONSIVE.

B-171233, MAY 13, 1971

BID PROTEST - LATE BID - BID RESPONSIVENESS DECISION DENYING PROTEST AGAINST AWARD OF A SALES CONTRACT TO U.S. GEAR EQUIPMENT COMPANY FOR A USED ROTARY SURFACE GRINDER ISSUED BY MENASCO MANUFACTURING COMPANY, A GOVERNMENT CONTRACTOR. BECAUSE THE CONTRACTOR'S POST OFFICE BOX WAS NOT CHECKED ON BID OPENING DAY AT A TIME REASONABLY CLOSE TO THE LATEST TIME BY WHICH BIDS COULD HAVE BEEN DELIVERED TO THE BID OPENING ROOM, IT WAS PROPER TO CONSIDER GEAR'S BID AS TIMELY. ALSO, IT WOULD ADVERSELY AFFECT THE INTEGRITY OF THE COMPETITIVE BID SYSTEM TO REJECT GEAR'S BID AS NONRESPONSIVE BECAUSE THEY CLOSED THE ACCOUNT ON WHICH ITS BID DEPOSIT CHECK WAS DRAWN. HOWEVER, THE COMP. GEN. HAS INFORMED THE DSA THAT IF SUCCESSFUL BIDDER DOES NOT PERFORM, THE AWARD SHOULD BE CANCELLED AND THE ITEMS READVERTISED.

TO AKIN, VIAL, HAMILTON, KOCH & TUBB:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 23, 1971, CONCERNING THE PROTEST BY PRODUCT DESIGN & MANUFACTURING COMPANY (PRODUCT DESIGN) AGAINST THE SALE TO U.S. GEAR EQUIPMENT COMPANY (U.S. GEAR) OF A USED ROTARY SURFACE GRINDER UNDER ITEM NO. 1 OF SALE NO. 40 AT THE MENASCO MANUFACTURING COMPANY (MENASCO), FORT WORTH, TEXAS.

THE SALES INVITATION, ISSUED AUGUST 12, 1970, OFFERED FOUR ITEMS OF GOVERNMENT-OWNED INDUSTRIAL PLANT EQUIPMENT UNDER A CONTRACTOR CONDUCTED SALE. BIDS WERE OPENED AS SCHEDULED AT 2:00 P.M., AUGUST 28, 1970.

ON AUGUST 31, 1970, AT 11:00 A.M., A SEALED BID FROM U.S. GEAR WAS PICKED UP AT THE RIVERSIDE STATION POST-OFFICE BOX DESIGNATED IN THE SALES INVITATION AND DELIVERED TO THE PLANT CLEARANCE OFFICER AT MENASCO. AFTER A PRELIMINARY EXAMINATION, MENASCO BY LETTER DATED SEPTEMBER 4, 1970, ADVISED U.S. GEAR THAT ITS BID WAS RECEIVED LATE AND THEREFORE WAS CONSIDERED NONRESPONSIVE. U.S. GEAR PROTESTED, ALLEGING THAT ITS BID WAS DELIVERED TO MENASCO IN AMPLE TIME TO BE CONSIDERED. DOCUMENTATION WAS FURNISHED THE FORT WORTH POST OFFICE SHOWING THAT THE LETTER SENT AIRMAIL- SPECIAL DELIVERY WAS METER STAMPED BY THE FORT WORTH MAIN POST OFFICE, "RECEIVED AUGUST 28, 11:00 A.M."

BY LETTER DATED SEPTEMBER 23, 1970, THE FORT WORTH POSTMASTER ADVISED THAT ALL SPECIAL DELIVERY MAIL IS DATED AND TIMED AT THE MAIN POST OFFICE BY A BACK STAMP AT THE TIME OF RECEIPT AND A LETTER BACK-STAMPED AT 11:00 A.M. WOULD HAVE BEEN DISPATCHED TO RIVERSIDE STATION AT 12 NOON THE SAME DAY. THE RECORD ALSO DISCLOSES THAT THE LAST PICK-UP MADE BY MENASCO FROM ITS POST OFFICE BOX AT THE RIVERSIDE STATION PRIOR TO BID OPENING WAS AT 11:00 A.M.

PARAGRAPH 2 OF THE SALES INVITATION SET FORTH THE FOLLOWING INSTRUCTIONS TO BIDDERS:

"MAILED BIDS MUST BE MAILED IN TIME TO BE IN POSSESSION OF THE 'CONTRACTOR' BY THE DATE AND HOUR OF BID OPENING. A LATE MAILED BID WILL BE CONSIDERED ONLY IF RECEIVED BEFORE AWARD AND SUCH BID WAS MAILED BY REGISTERED MAIL OR BY CERTIFIED MAIL FOR WHICH AN OFFICIAL POST OFFICE STAMP (POST MARK) ON THE ORIGINAL RECEIPT FOR CERTIFIED OR REGISTERED MAIL HAS BEEN OBTAINED AND IT IS DETERMINED THAT EITHER THE LATENESS WAS DUE SOLELY TO A DELAY IN MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE OR THE BID WAS RECEIVED AT THE SALES OFFICE IN SUFFICIENT TIME TO BE RECEIVED BY THE 'CONTRACTOR' IN TIME FOR OPENING AND EXCEPT FOR DELAY DUE TO MISHANDLING ON THE PART OF THE 'CONTRACTOR' AT THE SALES OFFICE, WOULD HAVE BEEN ON TIME. BIDDERS USING CERTIFIED MAIL ARE CAUTIONED TO OBTAIN A RECEIPT FOR CERTIFIED MAIL SHOWING A LEGIBLE, DATED POSTMARK AND TO RETAIN SUCH RECEIPT AGAINST THE CHANCE THAT IT WILL BE REQUIRED AS EVIDENCE THAT A LATE BID WAS TIMELY MAILED."

IN VIEW OF THE QUOTED LANGUAGE AND THE INFORMATION FROM THE POST OFFICE, IT WAS DETERMINED THAT THE BID OF U.S. GEAR WAS TIMELY. AUTHORITY FOR AWARDS WAS ISSUED ON OCTOBER 6, 1970. SUCCESSFUL BIDDERS WERE NOTIFIED OF AWARD BY MENASCO AND BID DEPOSITS OF UNSUCCESSFUL BIDDERS WERE RETURNED. SUCCESSFUL BIDDERS' CHECKS WERE DEPOSITED BY MENASCO ON OCTOBER 12, 1970, INCLUDING A COMPANY CHECK DRAWN BY U.S. GEAR IN THE AMOUNT OF $5,000. OCTOBER 19, 1970, MENASCO'S BANK ADVISED THAT THE U.S. GEAR COMPANY CHECK HAD BEEN RETURNED TO THEM MARKED "ACCOUNT CLOSED."

PRODUCTS DESIGN AND MANUFACTURING COMPANY, THE SECOND HIGH BIDDER FOR ITEM 1, PROTESTS THE AWARD TO U.S. GEAR ON THE BASES THAT THE BID ARRIVED TOO LATE TO BE CONSIDERED AND THAT THE SUBSEQUENT CLOSING OF ITS BANK ACCOUNT RENDERED U.S. GEAR'S BID NONRESPONSIVE.

IN THE INTERESTS OF OBTAINING COMPETITION WE BELIEVE THAT MENASCO'S POST OFFICE BOX SHOULD HAVE BEEN CHECKED ON BID OPENING DAY AT A TIME REASONABLY CLOSE TO THE LATEST TIME BY WHICH BIDS COULD HAVE BEEN DELIVERED FROM THE POST OFFICE BOX TO THE BID OPENING ROOM. IT IS NOT CLEAR WHETHER THE BID WAS DISPATCHED FROM THE MAIN POST OFFICE IN FORT WORTH TO RIVERSIDE AT NOON OR WHETHER IT WAS RECEIVED AT RIVERSIDE AT NOON. EVEN ASSUMING THE FORMER, SINCE THE DISTANCE BETWEEN THE TWO LOCATIONS IS ONLY 30 CITY BLOCKS, WE BELIEVE IT IS REASONABLE TO CONCLUDE THAT THE BID WAS RECEIVED AT RIVERSIDE AT NOON OR WITHIN A SHORT TIME THEREAFTER. IN EITHER CASE, MAIL COULD READILY HAVE BEEN PICKED UP WELL AFTER THAT TIME AND STILL HAVE BEEN DEPOSITED IN THE BID OPENING ROOM AT 2:00 P.M. WE, THEREFORE, FIND NO BASIS TO DISAGREE WITH THE ADMINISTRATIVE POSITION THAT THE U.S. GEAR BID SHOULD HAVE BEEN CONSIDERED FOR AWARD WITHIN THE QUOTED PROVISIONS OF THE SOLICITATION.

WE THINK THE PRIMARY ISSUE TO BE RESOLVED HERE IS THE ACCEPTABILITY OF THE U.S. GEAR BID IN LIGHT OF THE FAILURE OF THE BID DEPOSIT CHECK TO CLEAR. THE RECORD DOES NOT SHOW THE EXACT DATE ON WHICH U.S. GEAR CLOSED THE ACCOUNT IN QUESTION. IN ANY CASE, THE ACCEPTANCE OF THE U.S. GEAR OFFER TO PURCHASE THE PROPERTY INVOLVED AT THE PRICE STATED RESULTED IN A VALID AND BINDING CONTRACT, AND AT THAT TIME THE RIGHTS AND LIABILITIES OF THE PARTIES BECAME FIXED. TO PERMIT A BIDDER TO HAVE HIS BID REJECTED AFTER ALL BIDS HAVE BEEN EXPOSED BY THE SIMPLE EXPEDIENT OF CLOSING THE ACCOUNT ON WHICH HIS BID DEPOSIT CHECK WAS DRAWN, WOULD ADVERSELY AFFECT THE INTEGRITY OF THE COMPETITIVE BID SYSTEM. IT HAS LONG BEEN RECOGNIZED THAT THE SYSTEM'S INTEGRITY CAN BE MAINTAINED ONLY IF BIDS ARE SET AS OF BID OPENING AND MAY NOT BE AMENDED OR WITHDRAWN THEREAFTER FOR THE PERIOD SET. SEE 27 COMP. GEN. 436 (1948), B-133796, DECEMBER 4, 1957.

THEREFORE, WE HAVE ADVISED THE DEFENSE SUPPLY AGENCY THAT IF U.S. GEAR HAS NOT PERFORMED IN ACCORDANCE WITH THE TERMS OF THE AWARD AFTER A REASONABLE OPPORTUNITY TO DO SO, THE AWARD SHOULD BE CANCELLED AND ITEMS 1 AND 2 SHOULD BE READVERTISED FOR SALE.