B-173243, JUL 12, 1971

B-173243: Jul 12, 1971

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ALTHOUGH THE LANGUAGE OF BID ITEM 1 STATES IT IS FOR ALL THE WORK. THE PURPOSE OF THE AMENDMENT WAS CLEARLY TO PROVIDE FOR ADDITIONAL WORK AND TO INCLUDE AN ADDITIONAL BID ITEM. SECRETARY: REFERENCE IS MADE TO A LETTER DATED JUNE 10. I. IT IS REPORTED THAT THE INVITATION HAD ONLY ONE BID ITEM. WHICH WAS FORWARDED WITH THE AMENDMENT. IT IS FURTHER REPORTED THAT AT BID OPENING ON MAY 14. THE FOLLOWING BIDS WERE RECEIVED: CONTRACTOR ITEM 1 ADDITIVE ITEM 1 HYUNDAI AMERICA CORP. $1. 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. *** " THE JUNE 10.

B-173243, JUL 12, 1971

CONTRACTS - AWARDS - ADDITIVE ITEMS ADVISING THAT HYUNDAI AMERICA CORP. MAY NOT RECEIVE AN AWARD OF A CONTRACT UNDER AN IFB ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, MARIANAS. ARTICLE 95 OF STANDARD FORM 21 INCORPORATED IN THE SOLICITATION PROVIDING THAT A BIDDER MUST BE LOW ON THE AGGREGATE AMOUNT OF THE FIRST OR BASE BID ITEM PLUS ADDITIVE ITEMS, PROHIBITS AWARD TO A FIRM (HYUNDAI) WHICH ACKNOWLEDGED RECEIPT OF AN AMENDMENT ADDING A NEW BID ITEM BUT FAILED TO INCLUDE A PRICE ON THAT ITEM IN ITS BID. ALTHOUGH THE LANGUAGE OF BID ITEM 1 STATES IT IS FOR ALL THE WORK, THE PURPOSE OF THE AMENDMENT WAS CLEARLY TO PROVIDE FOR ADDITIONAL WORK AND TO INCLUDE AN ADDITIONAL BID ITEM; TO ALLOW HYUNDAI'S BID ON ITEM 1 TO QUALIFY AS A BID ON THE TOTAL WORK WOULD COMPROMISE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED JUNE 10, 1971, WITH ENCLOSURES, REFERENCE FAC 0211:JMC:WH, REQUESTING OUR ADVICE AS TO THE PROPER AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. N62766-71-B-0090, ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, MARIANAS.

THE SUBJECT SOLICITATION, ISSUED APRIL 8, 1971, CALLED FOR THE CONSTRUCTION OF 17 HIGH EXPLOSIVE MAGAZINES AT THE UNITED STATES NAVAL MAGAZINE, GUAM, M. I. IT IS REPORTED THAT THE INVITATION HAD ONLY ONE BID ITEM, THE PRICE FOR THE ENTIRE WORK, COMPLETE IN ACCORDANCE WITH THE DRAWINGS AND SPECIFICATIONS. THE INVITATION INCLUDED A BID FORM, STANDARD FORM 21 (1965 ED.), WHICH INDICATED ONLY ONE BID ITEM.

AMENDMENT NO. 0001 TO THE SOLICITATION, ISSUED APRIL 27, 1971, MADE SUBSTANTIAL CHANGES TO THE WORK. THE AMENDMENT ADDED A NEW BID ITEM WHICH PROVIDED AS FOLLOWS:

"'ADDITIVE ITEM NO. 1. PRICE FOR DRAINAGE CORRECTION COMPLETE IN ACCORDANCE WITH THE SPECIFICATIONS AND AS INDICATED ON NAVFAC DRAWING NOS. 1323687, 1323688, 1323689, 1323690 AND 1323691.' THE REVISED BID FORM, STANDARD FORM 21 ATTACHED HERETO." THE NEW BID FORM REFERRED TO ABOVE, WHICH WAS FORWARDED WITH THE AMENDMENT, PROVIDED SPACES FOR BOTH BID ITEM 1 AND ADDITIVE ITEM NO. 1. HYUNDAI ACKNOWLEDGED RECEIPT OF THE AMENDMENT BUT DID NOT INCLUDE A PRICE FOR THE ADDITIVE ITEM.

IT IS FURTHER REPORTED THAT AT BID OPENING ON MAY 14, 1971, THE FOLLOWING BIDS WERE RECEIVED:

CONTRACTOR ITEM 1 ADDITIVE ITEM 1

HYUNDAI AMERICA CORP. $1,483,700 (BLANK)

VINNELL CORP. 1,797,000 $16,000

MARTIN-JOHNSON-CLOSE 1,999,907 17,000

BLACK CONSTRUCTION CORP. 2,232,040 42,000

NAVFAC FORM 4-4330/5, INCORPORATED IN THE SOLICITATION BY STANDARD FORM 21 (SEE ALSO ASPR 2-201(B)(XLI)) PROVIDES IN ARTICLE 95, AS FOLLOWS:

"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. *** "

THE JUNE 10, 1971, LETTER FROM THE NAVAL FACILITIES ENGINEERING COMMAND REQUESTS OUR ADVICE AS TO THE PROPER AWARD, STATING THE PROBLEM TO BE RESOLVED AS FOLLOWS:

"AS A RESULT OF THE BIDS RECEIVED, IT IS DIFFICULT TO DETERMINE WHO IS THE LOW CONFORMING BIDDER. THE LANGUAGE OF BID ITEM 1 STATES THAT IT IS FOR ALL OF THE WORK. HOWEVER, THE CLEAR AND APPARENT PURPOSE OF AMENDMENT 1 WAS TO ADD ADDITIONAL WORK, AND THE ADDITIONAL BID ITEM, SPECIFICALLY INCLUDED AS A PART OF THE AMENDMENT, WAS FOR THE PURPOSE OF OBTAINING A PRICE FOR THIS ADDITIONAL WORK. HYUNDAI HAS CONFIRMED ITS BID AND NOW ADVISES OUR GUAM OFFICE THAT ITS PRICE FOR BID ITEM 1 WAS FOR ALL OF THE WORK, INCLUDING THAT COVERED BY ADDITIVE ITEM 1. HOWEVER, SUCH A POSITION GIVES HYUNDAI 'TWO BITES AT THE APPLE' AND RAISES SERIOUS LEGAL QUESTIONS AS TO WHETHER OR NOT, ON THE BASIS OF THE BID RECEIVED, THE FIRM COULD BE HELD RESPONSIBLE FOR THE PERFORMANCE OF ALL OF THE WORK COVERED BY THE ORIGINAL INVITATION AND AMENDMENT 1.

"THE BID OF VINNELL CORP. IS THE LOW CONFORMING BID, IF THE PROVISIONS OF ARTICLE 95 ARE STRICTLY APPLIED. IN THIS REGARD, THE FIRST SENTENCE OF ARTICLE 95 PROVIDES THAT THE LOW BIDDER, FOR PURPOSES OF AWARD, SHALL BE THE FIRM OFFERING THE LOW AGGREGATE AMOUNT FOR THE FIRST BID ITEM PLUS THOSE ADDITIVE ITEMS OF WORK THAT CAN BE INCLUDED WITHIN THE FUNDS DETERMINED TO BE AVAILABLE BEFORE BIDS ARE OPENED. IN THIS INSTANCE THE FUNDS DETERMINED TO BE AVAILABLE ARE WELL IN EXCESS OF THE VINNELL BID FOR ITEM 1, PLUS ADDITIVE ITEM 1. SINCE HYUNDAI DID NOT BID ON ADDITIVE ITEM 1, THE PROVISIONS OF ARTICLE 95 REQUIRE AWARD TO THE VINNELL CORP."

IT IS CLEAR THAT THE PURPOSE OF AMENDMENT NO. 0001 WAS TO PROVIDE FOR ADDITIONAL WORK TO BE DONE UNDER THE CONTRACT AND TO INCLUDE AN ADDITIONAL BID ITEM FOR DETERMINING THE PRICE FOR THIS EXTRA WORK. THE PROVISIONS OF ARTICLE 95 (QUOTED ABOVE) STATE THAT THE LOW BIDDER, FOR PURPOSES OF AWARD, SHALL BE THE FIRM OFFERING THE LOW AGGREGATE AMOUNT FOR THE FIRST BID ITEM PLUS THOSE ADDITIVE ITEMS OF WORK THAT CAN BE INCLUDED WITHIN THE FUNDS DETERMINED TO BE AVAILABLE BEFORE BIDS ARE OPENED. QUITE OBVIOUSLY, THIS PROVISION PROHIBITS AWARD TO HYUNDAI. TO CONCLUDE OTHERWISE WOULD COMPROMISE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM BY MAKING IT POSSIBLE FOR A BIDDER TO DECIDE AFTER BID OPENING WHETHER OR NOT TO TRY TO HAVE HIS BID REJECTED. THE EFFECT OF THIS WOULD BE DETRIMENTAL TO FULLY RESPONSIVE AND RESPONSIBLE BIDDERS AND CLEARLY WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT. CF. 38 COMP. GEN. 532 (1959).

THE FACT THAT HYUNDAI ACKNOWLEDGED RECEIPT OF AMENDMENT NO. 0001 DOES NOT NEGATE THE AMBIGUITY CREATED BY THEIR FAILING TO SUBMIT A BID PRICE FOR THE ADDITIVE ITEM. HYUNDAI'S REPRESENTATION THAT THE PRICE FOR THE BID ITEM WAS INTENDED TO COVER THE ADDITIVE ITEM AS WELL MAY NOT BE CONSIDERED. WHERE A BID CONTAINS SUCH AN AMBIGUITY THAT IT IS NOT CLEAR WHETHER IT CONSTITUTES AN UNQUALIFIED OFFER TO COMPLY WITH THE SPECIFICATIONS, OUR OFFICE HAS HELD THAT CLARIFICATION AFTER BID OPENING IS NOT PROPER. B-170006, AUGUST 17, 1970, B-164711, SEPTEMBER 30, 1968.

FOR THE REASONS STATED, IN OUR OPINION THE AWARD TO HYUNDAI WOULD NOT BE PROPER.