B-171727, MAY 24, 1971, 50 COMP GEN 815

B-171727: May 24, 1971

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REAL PROPERTY - SURPLUS GOVERNMENT PROPERTY - SALE - PRICE SUFFICIENCY THE WITHDRAWAL OF THE OPPORTUNITY AFFORDED THE HIGH BIDDER TO INCREASE ITS BID FOR THE PURCHASE OF GOVERNMENT REAL PROPERTY WHICH WAS SUBMITTED IN AN AMOUNT LESS THAN THE ESTIMATED VALUE OF THE PROPERTY AND THE REJECTION OF THE BID UPON RECEIPT OF A LATE HIGHER BID IN EXCESS OF THE APPRAISED VALUE OF THE PROPERTY WHERE THE LATE DELIVERY OF THE BID SENT BY SPECIAL DELIVERY CERTIFIED AIRMAIL WAS DUE SOLELY TO A DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE WAS IN ACCORD WITH THE PROCEDURE PRESCRIBED IN SECTION 101-47. THE AWARD MADE TO THE HIGHEST BIDDER WILL NOT BE DISTURBED. IT IS IMMATERIAL THAT THE DISPLACED HIGH BIDDER HAD BEEN ADVISED TO HAND CARRY ITS BID TO INSURE TIMELY DELIVERY AND WAS NOT GIVEN ADVANCE NOTICE OF THE SALE.

B-171727, MAY 24, 1971, 50 COMP GEN 815

REAL PROPERTY - SURPLUS GOVERNMENT PROPERTY - SALE - PRICE SUFFICIENCY THE WITHDRAWAL OF THE OPPORTUNITY AFFORDED THE HIGH BIDDER TO INCREASE ITS BID FOR THE PURCHASE OF GOVERNMENT REAL PROPERTY WHICH WAS SUBMITTED IN AN AMOUNT LESS THAN THE ESTIMATED VALUE OF THE PROPERTY AND THE REJECTION OF THE BID UPON RECEIPT OF A LATE HIGHER BID IN EXCESS OF THE APPRAISED VALUE OF THE PROPERTY WHERE THE LATE DELIVERY OF THE BID SENT BY SPECIAL DELIVERY CERTIFIED AIRMAIL WAS DUE SOLELY TO A DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE WAS IN ACCORD WITH THE PROCEDURE PRESCRIBED IN SECTION 101-47, 305-1 OF TITLE 41, CODE OF FEDERAL REGULATIONS WHICH GOVERNS THE DISPOSAL OF SURPLUS REAL PROPERTY, AND THE AWARD MADE TO THE HIGHEST BIDDER WILL NOT BE DISTURBED, AND IT IS IMMATERIAL THAT THE DISPLACED HIGH BIDDER HAD BEEN ADVISED TO HAND CARRY ITS BID TO INSURE TIMELY DELIVERY AND WAS NOT GIVEN ADVANCE NOTICE OF THE SALE.

TO THE GENERAL DYNAMICS CORPORATION, MAY 24, 1971:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 5, 1971, WITH ENCLOSURES, PROTESTING THE ACCEPTANCE BY THE GENERAL SERVICES ADMINISTRATION OF A LATE BID UNDER SALE NO. GS-09-DR)-71-11, ISSUED BY THE PROPERTY MANAGEMENT AND DISPOSAL SERVICE, GENERAL SERVICES ADMINISTRATION (GSA), SAN FRANCISCO, CALIFORNIA.

THE NOTICE OF SALE INVITED BIDS FOR THE PURCHASE OF GOVERNMENT REAL PROPERTY DESCRIBED AS A PORTION OF THE MARINE CORPS RECRUIT DEPOT, SAN DIEGO, CALIFORNIA, CONSISTING OF ONE PARCEL CONTAINING APPROXIMATELY 1.22 ACRES, MORE OR LESS, OF WHICH 0.73 ACRE IS ENCUMBERED BY ROAD EASEMENTS AND THE REMAINDER IS PAVED WITH ASPHALT. IT IS LOCATED ON WASHINGTON STREET AT THE SOUTH ON-RAMP TO PACIFIC COAST HIGHWAY, SAN DIEGO, CALIFORNIA. GSA BEGAN ADVERTISING THE PARCEL FOR SALE ON NOVEMBER 16, 1970, BY PLACING ADS IN THE SAN DIEGO UNION AND SAN DIEGO EVENING TRIBUNE AND ANNOUNCING THE TIME AND PLACE OF BID OPENING AS DECEMBER 17, 1970. GSA ALSO MAILED 1,450 NOTICE OF SALE ANNOUNCEMENTS TO PROSPECTIVE PURCHASERS MAINTAINED ON ITS MAILING LIST. THE ANNOUNCEMENTS STATED THAT ALL BIDS MUST BE SUBMITTED ON BID FORMS PROVIDED BY GSA.

TEN BIDS WERE RECEIVED PRIOR TO THE BID OPENING, INCLUDING YOUR BID WHICH, UPON THE SUGGESTION OF GSA IN REPLY TO YOUR INQUIRY OF HOW BEST TO MEET THE BID OPENING HOUR, HAD BEEN HAND-CARRIED TO THE BID OPENING. YOUR BID OF $15,100 WAS THE HIGH BID OPENED AT THE BID OPENING. INASMUCH AS NO LATE BIDS WERE RECEIVED BY LATE AFTERNOON OF THE BID OPENING DATE, GSA, IN ACCORDANCE WITH STANDARD PROCEDURE WHEN THE HIGH BID RECEIVED IS LESS THAN THE ESTIMATED VALUE OF THE PROPERTY OFFERED, PREPARED A LETTER AFFORDING YOU AN OPPORTUNITY TO INCREASE YOUR OFFER.

AFTER DISPATCHING THE ABOVE LETTER TO YOU THE CONTRACTING OFFICER WAS ADVISED THAT FOUR LATE BIDS HAD BEEN RECEIVED, ONE OF WHICH WAS REJECTED AS NONRESPONSIVE INASMUCH AS NO MONEY ACCOMPANIED THIS BID. THE FOUR LATE BIDS WERE AS FOLLOWS:

BIDDER DATE RECEIVED AMOUNT OF BID

WILLIAM MISSLER 12-18-70 $7,100.00

MR. & MRS. JACK F. BELFANZ 12-18-70 $1,000.00

CHULA VISTA ELECTRIC COMPANY 12-18-70 $23,928.00

W. C. HENRY 12-20-70 NONRESPONSIVE

THE BID OPENING OFFICIAL, AFTER DETERMINING THAT ALL LATE BIDS WERE MAILED AS CERTIFIED OR REGISTERED MAIL, CONTACTED THE SCHEDULES DIVISION, U.S. POST OFFICE, RINCON ANNEX, SAN FRANCISCO, TO DETERMINE WHETHER THE LATE ARRIVAL WAS DUE SOLELY TO DELAY IN THE MAILS. THE POST OFFICE DEPARTMENT VERIFIED, FROM THE DATE STAMP PLACED ON EACH BID ENVELOPE AND FROM CURRENT MAIL SCHEDULES, THAT THE LATE ARRIVAL OF THE BIDS WAS DUE SOLELY TO THE HEAVY VOLUME OF CHRISTMAS MAIL AND THAT UNDER NORMAL CONDITIONS THE BIDS SHOULD HAVE ARRIVED ON TIME. FOR THIS REASON THE THREE LATE BIDS WERE OPENED AND ABSTRACTED ON THE AFTERNOON OF DECEMBER 18, 1970. AS SHOWN, THE BID OF CHULA VISTA ELECTRIC COMPANY (CHULA VISTA) WAS HIGHER THAN YOUR BID AND WAS IN EXCESS OF THE APPRAISED VALUE OF THE PROPERTY. YOU WERE IMMEDIATELY ADVISED OF THIS TURN OF EVENTS BY LETTER OF DECEMBER 18, 1970, IN WHICH GSA RESCINDED ITS EARLIER LETTER OF THE SAME DATE WHICH HAD AFFORDED YOU AN OPPORTUNITY TO INCREASE YOUR OFFER, AND REJECTED YOUR OFFER BECAUSE A HIGHER BID HAD BEEN RECEIVED. DECEMBER 28, 1970, CHULA VISTA WAS AWARDED THE PROPERTY BY GSA.

BY LETTER OF DECEMBER 23, 1970, YOU PROTESTED TO GSA AGAINST THE ACTION TAKEN, STATING THAT YOU DID NOT FEEL CHULA VISTA HAD FILED A VALID BID WITHIN THE TERMS SET FORTH FOR BID SUBMITTAL. ON JANUARY 5, 1971, YOU PROTESTED THE AWARD TO CHULA VISTA TO THIS OFFICE ALLEGING THAT GSA HAD NOT FAIRLY INFORMED YOU OF THE PENDING SALE, THAT YOU WERE REQUIRED TO HAND-CARRY YOUR BID BEFORE IT COULD BE CONSIDERED, WHEREAS IF GSA'S CONTENTION IS CORRECT (APPARENTLY IN REFERENCE TO LATE BIDS) YOU COULD HAVE HAD YOUR BID POSTMARKED BEFORE THE BID OPENING AND CLAIMED THAT IT WAS DELAYED BY THE MAILS, WHICH YOU STATE NORMALLY INVOLVES A 1-DAY TRIP BETWEEN SAN DIEGO AND SAN FRANCISCO. YOU STATE YOUR BELIEF THAT YOUR BID, BEING THE HIGHEST BID, SHOULD BE ACCEPTED BY GSA, AND THAT YOU SHOULD BE AWARDED THE PROPERTY.

YOUR PROTEST THAT YOU WERE NOT GIVEN ADVANCE NOTICE OF THE SALE SEEMS TO BE IMMATERIAL, INASMUCH AS YOU DID SUBMIT A TIMELY BID. FURTHER, THE RECORD INDICATES THAT THE SUGGESTION TO HAND-CARRY YOUR BID WAS MADE BY GSA UPON YOUR REQUEST FOR INFORMATION AS TO HOW YOU COULD INSURE SUBMITTING A TIMELY BID. IN VIEW THEREOF, IT WOULD APPEAR THAT BOTH MATTERS WERE WITHOUT PREJUDICE TO YOU.

WITH REGARD TO THE PROPRIETY OF YOUR HAVING BEEN AFFORDED AN OPPORTUNITY TO INCREASE YOUR OFFER, WHICH OPPORTUNITY WAS WITHDRAWN WHEN THE HIGHER BID WAS RECEIVED, WE MUST ADVISE THAT SECTION 101-47, 305-1 OF TITLE 41, CODE OF FEDERAL REGULATIONS, PROVIDES AS FOLLOWS:

(A) WHEN THE HEAD OF THE DISPOSAL AGENCY OR HIS DESIGNEE DETERMINES THAT BID PRICES (EITHER AS TO ALL OR SOME PART OF THE PROPERTY) RECEIVED AFTER ADVERTISING THEREFOR OR RECEIVED IN RESPONSE TO THE ACTION AUTHORIZED IN PARAGRAPH (B) OF THIS SEC 101-47.305-1, ARE REASONABLE, I.E., COMMENSURATE WITH THE FAIR MARKET VALUE OF THE PROPERTY, AND WERE INDEPENDENTLY ARRIVED AT IN OPEN COMPETITION, AWARD SHALL BE MADE WITH REASONABLE PROMPTNESS BY NOTICE TO THE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. ANY OR ALL OFFERS MAY BE REJECTED WHEN THE HEAD OF THE DISPOSAL AGENCY OR HIS DESIGNEE DETERMINES IT IS IN THE PUBLIC INTEREST TO DO SO.

(B) WHERE THE ADVERTISING DOES NOT RESULT IN THE RECEIPT OF A BID AT A PRICE COMMENSURATE WITH THE FAIR MARKET VALUE OF THE PROPERTY, THE HIGHEST BIDDER MAY, AT THE DISCRETION OF THE HEAD OF THE DISPOSAL AGENCY OR HIS DESIGNEE AND UPON DETERMINATION OF RESPONSIVENESS AND BIDDER RESPONSIBILITY, BE AFFORDED AN OPPORTUNITY TO INCREASE HIS OFFERED PRICE. THE BIDDER SHALL BE GIVEN A REASONABLE PERIOD OF TIME, NOT TO EXCEED FIVE WORKING DAYS, TO RESPOND. AT THE TIME THE BIDDER IS AFFORDED AN OPPORTUNITY TO INCREASE HIS BID, ALL OTHER BIDS SHALL BE REJECTED AND BID DEPOSITS RETURNED. ANY SALE AT A PRICE SO INCREASED MAY BE CONCLUDED WITHOUT REGARD TO THE PROVISIONS OF SECS 101-47.304-9 AND 101-47.304-12.

(C) THE DISPOSAL AGENCY SHALL ALLOW A REASONABLE PERIOD OF TIME WITHIN WHICH THE SUCCESSFUL BIDDER SHALL CONSUMMATE THE TRANSACTION AND SHALL NOTIFY THE SUCCESSFUL BIDDER OF THE PERIOD ALLOWED.

(D) IT IS WITHIN THE DISCRETION OF THE HEAD OF THE DISPOSAL AGENCY OR HIS DESIGNEE TO DETERMINE WHETHER THE PROCEDURE AUTHORIZED BY PARAGRAPH (B) OF THIS SEC 101-47.305-1 IS FOLLOWED OR WHETHER THE BIDS SHALL BE REJECTED AND THE PROPERTY REOFFERED FOR SALE ON A PUBLICLY ADVERTISED COMPETITIVE BID BASIS IN ACCORDANCE WITH THE PROVISIONS OF SEC 101-47.304-7, OR DISPOSED OF BY NEGOTIATION PURSUANT TO SEC 101 47.306-1, OR OFFERED FOR DISPOSAL UNDER OTHER APPLICABLE PROVISIONS OF THIS SUBPART 101-47.3.

IN VIEW THEREOF, IT WOULD APPEAR THAT IT WAS WITHIN THE DISCRETION OF THE CONTRACTING OFFICER AS TO WHETHER OPPORTUNITY SHOULD BE AFFORDED TO INCREASE BIDS FOLLOWING RECEIPT OF CHULA VISTA'S HIGHER BID.

THE REMAINING ISSUE RAISED BY YOUR PROTEST IS WHETHER THE LATE BID OF CHULA VISTA SHOULD HAVE BEEN ALLOWED TO DISPLACE YOUR BID AND, IF NOT, WHETHER GSA MAY BE REQUIRED TO IGNORE THAT BID AND MAKE AN AWARD TO YOU ON YOUR PRESENT BID OF $15,100.

PROVISIONS GOVERNING THE CONSIDERATION OF LATE BIDS ARE CONTAINED IN PARAGRAPH 3 OF GSA FORM 1741, WHICH WAS MADE A PART OF THE INVITATION AND PROVIDES AS FOLLOWS:

3. LATE BIDS, MODIFICATIONS, AND WITHDRAWALS.

A. BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF BIDS WILL NOT BE CONSIDERED UNLESS: (1) THEY ARE RECEIVED BEFORE AWARD IS MADE; AND EITHER (2) THEY ARE SENT BY REGISTERED MAIL OR BY CERTIFIED MAIL FOR WHICH AN OFFICIAL DATED POST OFFICE STAMP (POSTMARK) ON THE ORIGINAL RECEIPT FOR CERTIFIED MAIL HAS BEEN OBTAINED, OR BY TELEGRAPH IF AUTHORIZED, AND IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO DELAY IN THE MAILS OR DELAY BY THE TELEGRAPH COMPANY, FOR WHICH THE BIDDER WAS NOT RESPONSIBLE; OR (3) IF SUBMITTED BY MAIL (OR BY TELEGRAM IF AUTHORIZED), IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION: PROVIDED, THAT TIMELY RECEIPT AT SUCH INSTALLATION IS ESTABLISHED UPON EXAMINATION OF AN APPROPRIATE DATE OR TIME STAMP (IF ANY) OF SUCH INSTALLATION, OR OF OTHER DOCUMENTARY EVIDENCE OF RECEIPT (IF READILY AVAILABLE) WITHIN THE CONTROL OF SUCH INSTALLATION OR OF THE POST OFFICE SERVING IT. HOWEVER, A MODIFICATION WHICH MAKES THE TERMS OF THE OTHERWISE SUCCESSFUL BID MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME IT IS RECEIVED AND MAY THEREAFTER BE ACCEPTED.

B. 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.

C. THE TIME OF MAILING OF LATE BIDS SUBMITTED BY REGISTERED OR CERTIFIED MAIL SHALL BE DEEMED TO BE THE LAST MINUTE OF THE DATE SHOWN IN THE POSTMARK ON THE REGISTERED MAIL RECEIPT OR REGISTERED MAIL WRAPPER OR ON THE RECEIPT FOR CERTIFIED MAIL UNLESS THE BIDDER FURNISHES EVIDENCE FROM THE POST OFFICE STATION OF MAILING WHICH ESTABLISHES AN EARLIER TIME. THE CASE OF CERTIFIED MAIL, THE ONLY ACCEPTABLE EVIDENCE IS AS FOLLOWS:

(1) WHERE THE RECEIPT FOR CERTIFIED MAIL IDENTIFIES THE POST OFFICE STATION OF MAILING, EVIDENCE FURNISHED BY THE BIDDER WHICH ESTABLISHES THAT THE BUSINESS DAY OF THAT STATION ENDED AT AN EARLIER TIME, IN WHICH CASE THE TIME OF MAILING SHALL BE DEEMED TO BE THE LAST MINUTE OF THE BUSINESS DAY OF THAT STATION; OR

(2) AN ENTRY IN INK ON THE RECEIPT FOR CERTIFIED MAIL SHOWING THE TIME OF MAILING AND THE INITIALS OF THE POSTAL EMPLOYEE RECEIVING THE ITEM AND MAKING THE ENTRY, WITH APPROPRIATE WRITTEN VERIFICATION OF SUCH ENTRY FROM THE POST OFFICE STATION OF MAILING, IN WHICH CASE THE TIME OF MAILING SHALL BE THE TIME SHOWN IN THE ENTRY. IF THE POSTMARK ON THE ORIGINAL RECEIPT FOR CERTIFIED MAIL DOES NOT SHOW A DATE, THE BID SHALL NOT BE CONSIDERED.

THE RECORD DISCLOSES THAT CHULA VISTA'S BID WAS SENT BY SPECIAL DELIVERY CERTIFIED AIRMAIL ON DECEMBER 16 AND WAS RECEIVED ON DECEMBER 18, 1970, THE DAY AFTER BIDS WERE OPENED, BUT BEFORE AN AWARD WAS MADE. SALES PERSONNEL FAILED TO ASK CHULA VISTA FOR THE RECEIPT FOR CERTIFIED MAIL IN CONNECTION WITH CONSIDERATION OF THE LATE BID UNTIL FEBRUARY 17, 1971, AT WHICH TIME THE COMPANY INDICATED IT NO LONGER HAD THE RECEIPT IN ITS POSSESSION. THE CHULA VISTA, CALIFORNIA, POSTMASTER HAS REPORTED THAT THE ENVELOPE IN WHICH THE BID WAS RECEIVED WAS DEPOSITED IN HIS OFFICE PRIOR TO 5:00 P.M., THE STATION'S CLOSING TIME, ON DECEMBER 16, 1970, AND THAT UNDER STANDARD PROCEDURES THE MAILER WOULD BE GIVEN A RECEIPT FOR CERTIFIED MAIL. IN ADDITION, THE ASSISTANT DIRECTOR OF OPERATIONS, SAN FRANCISCO, POST OFFICE, THE DELIVERING OFFICE, HAS REPORTED THAT ACCORDING TO THE CURRENT AIRMAIL SCHEDULE, AN AIRMAIL CERTIFIED SPECIAL DELIVERY LETTER PLACED IN THE MAILS AT CHULA VISTA, CALIFORNIA, BY 5:00 P.M. ON DECEMBER 16, ADDRESSED TO GENERAL SERVICES ADMINISTRATION, 49 FOURTH STREET, SAN FRANCISCO, CALIFORNIA, SHOULD HAVE BEEN DELIVERED BEFORE 9:00 A.M. ON DECEMBER 17.

SINCE IT IS REPORTED THAT THE CHULA VISTA POST OFFICE, WHERE THE BID WAS MAILED, CLOSES AT 5:00 P.M., THAT IS THE HOUR TO BE CONSIDERED AS THE TIME OF MAILING IN ACCORDANCE WITH THE LATE MAILED BID PROVISIONS ABOVE. BASED THEREON THE POST OFFICE ADVISES, AND IT MAY BE REASONABLY CONCLUDED, THAT THE DELAY IN THE RECEIPT OF THE BID OF CHULA VISTA WAS DUE SOLELY TO A DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.

THE ONLY REMAINING QUESTION IS WHETHER THE INABILITY OF CHULA VISTA TO PRODUCE A RECEIPT FOR CERTIFIED MAIL SHOWING THE EXACT TIME OF MAILING REQUIRES REJECTION OF ITS BID. WHILE IT IS OUR OPINION THAT THE REQUIREMENT FOR A RECEIPT SHOULD BE STRICTLY CONSTRUED WHEN A BIDDER IS UNABLE TO COMPLY WITH A TIMELY REQUEST THEREFOR, THE RECORD IN THE PRESENT CASE INDICATES THAT THE GOVERNMENT DID NOT REQUEST THE RECEIPT FROM CHULA VISTA UNTIL 2 MONTHS AFTER BID OPENING AND ALMOST 6 WEEKS AFTER CHULA VISTA HAD BEEN AWARDED THE PROPERTY. IN VIEW THEREOF, AND SINCE THE OTHER EVIDENCE OF TIMELY MAILING IS SUBSTANTIAL, IT IS OUR OPINION THAT THE RECORD DOES NOT REQUIRE OR JUSTIFY DISTURBING THE AWARD MADE TO CHULA VISTA.

IN VIEW OF THESE CONSIDERATIONS, YOUR PROTEST AGAINST THE AWARD MADE TO CHULA VISTA ELECTRIC COMPANY MUST BE DENIED.