B-173545, JAN 24, 1972, 51 COMP GEN 423

B-173545: Jan 24, 1972

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CONTRACTS - TERMINATION - CONVENIENCE OF GOVERNMENT - ERRONEOUS AWARDS WHERE THE CONTRACTING OFFICER OVERLOOKED A DISCOUNT OFFERED BY A BIDDER WHICH IF EVALUATED WOULD HAVE DISPLACED THE SUCCESSFUL BIDDER AWARDED A 1- YEAR JANITORIAL REQUIREMENTS CONTRACT UNDER THE INVITATION FOR BIDS. WHEN THE FIRST TWO LOW BIDDERS WERE FOUND NONRESPONSIVE BECAUSE THE LOW BIDDER. AS ADMINISTRATIVELY RECOMMENDED ON THE BASIS NO DIFFICULTIES ARE ANTICIPATED IN CHANGING CONTRACTORS AND THAT TERMINATION WOULD BE IN THE BEST INTEREST OF THE UNITED STATES. 1972: REFERENCE IS MADE TO LETTER SAOASI&L)-MO DATED DECEMBER 15. DABC09-71-B-0143 WAS ISSUED TO 57 PROSPECTIVE BIDDERS ON MAY 19. IT WAS FURTHER PROVIDED THAT THE QUANTITIES OF SERVICES SPECIFIED ARE ESTIMATES ONLY.

B-173545, JAN 24, 1972, 51 COMP GEN 423

CONTRACTS - TERMINATION - CONVENIENCE OF GOVERNMENT - ERRONEOUS AWARDS WHERE THE CONTRACTING OFFICER OVERLOOKED A DISCOUNT OFFERED BY A BIDDER WHICH IF EVALUATED WOULD HAVE DISPLACED THE SUCCESSFUL BIDDER AWARDED A 1- YEAR JANITORIAL REQUIREMENTS CONTRACT UNDER THE INVITATION FOR BIDS, WHEN THE FIRST TWO LOW BIDDERS WERE FOUND NONRESPONSIVE BECAUSE THE LOW BIDDER, UNABLE TO SHOW ITS INTENDED BID, WITHDREW AND THE SECOND LOW BIDDER, ALTHOUGH ERRONEOUSLY INTERPRETING THE SPECIFICATIONS, WOULD NOT ALLEGE A MISTAKE, THE AWARD MADE CONTRARY TO 10 U.S.C. 2305(C) TO OTHER THAN THE LOWEST RESPONSIVE BIDDER SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT, NOTWITHSTANDING A CLAIM FOR 6 MONTHS PERFORMANCE UNDER THE CONTRACT, AS ADMINISTRATIVELY RECOMMENDED ON THE BASIS NO DIFFICULTIES ARE ANTICIPATED IN CHANGING CONTRACTORS AND THAT TERMINATION WOULD BE IN THE BEST INTEREST OF THE UNITED STATES.

TO THE SECRETARY OF THE ARMY, JANUARY 24, 1972:

REFERENCE IS MADE TO LETTER SAOASI&L)-MO DATED DECEMBER 15, 1971, FROM THE ASSISTANT DEPUTY FOR MATERIEL ACQUISITION, OFFICE OF THE ASSISTANT SECRETARY, AND PRIOR CORRESPONDENCE, REPORTING ON THE PROTESTS OF INDUSTRIAL MAINTENANCE SERVICES AND OLD ATLANTIC SERVICES, INC., AGAINST THE AWARD OF CONTRACT NO. DABC09-72-C-1284 TO WORLDWIDE SERVICES, INC.

INVITATION FOR BIDS NO. DABC09-71-B-0143 WAS ISSUED TO 57 PROSPECTIVE BIDDERS ON MAY 19, 1971, BY THE PURCHASING AND CONTRACTING OFFICE, FORT BENNING, GEORGIA. THE INVITATION CALLED FOR TEN LINE ITEMS OF CUSTODIAL SERVICES TO BE PERFORMED IN ADMINISTRATIVE BUILDINGS AT FORT BENNING, GEORGIA, IN ACCORDANCE WITH THE PERFORMANCE SCHEDULE. THE INVITATION PROVIDED THAT THE CONTRACT TO BE AWARDED WOULD BE A REQUIREMENTS CONTRACT AND THAT SERVICES WOULD BE RENDERED ONLY AS AUTHORIZED BY ORDERS ISSUED IN ACCORDANCE WITH THE CLAUSE ENTITLED "ORDERING." IT WAS FURTHER PROVIDED THAT THE QUANTITIES OF SERVICES SPECIFIED ARE ESTIMATES ONLY. THE FIRST FOUR LINE ITEMS WERE TO BE PERFORMED, IF ORDERED, 6 DAYS PER WEEK, 5 DAYS PER WEEK, 3 DAYS PER WEEK AND 6 DAYS PER WEEK, RESPECTIVELY. THE REMAINING LINE ITEMS WERE TO BE PERFORMED AT THE DIRECTION OF THE CONTRACTING OFFICER. ORDERS WERE TO BE ISSUED ON A MONTHLY BASIS. PROMPT PAYMENT DISCOUNTS WERE TO BE CONSIDERED IN THE EVALUATION OF THE BIDS IF OFFERED ON THE BASIS OF 20 DAYS OR MORE.

EIGHT BIDS WERE RECEIVED AND OPENED ON JUNE 23, 1971. THE BIDDERS AND THE EVALUATED AGGREGATE AMOUNTS OF THEIR ALL OR NONE BIDS ARE SET FORTH BELOW:

EVALUATED BID

BIDDER AMOUNT

NASH JANITORIAL SERVICES, INC. $421,350.00

INDUSTRIAL MAINTENANCE SERVICES, INC. 557,259.07

WORLDWIDE SERVICES, INC. 678,089.11

DYNAMIC INTERNATIONAL, INC. 693,085.50

OLD ATLANTIC SERVICES, INC. 732,660.59

SPRINGFIELD WHITE CASTLE COMPANY 739,978.81

ELLIOTT JANITOR SERVICE (SOUTHWEST JANITORIAL) 803,824.00

KENTUCKY BUILDING MAINTENANCE, INC. 871,968.74

NASH JANITORIAL SERVICES WAS ALLOWED TO WITHDRAW ITS BID AFTER A MISTAKE WAS DISCOVERED SINCE ITS INTENDED BID COULD NOT BE DETERMINED FROM THE BID OR ITS WORKING PAPERS. THE BID OF INDUSTRIAL WAS REJECTED AS BEING NONRESPONSIVE TO THE TERMS AND CONDITIONS OF THE INVITATION. ON JUNE 28, 1971, CONTRACT NO. DABC09-72-C1284 WAS AWARDED TO WORLDWIDE SERVICES AND THAT FIRM COMMENCED PERFORMANCE ON JULY 1, 1971. THE CONTRACT PERIOD WAS FROM JULY 1, 1971, TO JUNE 30, 1972.

THE RECORD INDICATES THAT AFTER BID OPENING BUT PRIOR TO AWARD, THE GOVERNMENT NOTIFIED INDUSTRIAL MAINTENANCE, INC., THAT IT SUSPECTED A MISTAKE IN ITS BID BECAUSE OF THE WIDE VARIANCE BETWEEN ITS BID AND THOSE OF THE OTHER BIDDERS. THE CONTRACTING OFFICER STATES THAT DURING A TELEPHONE CONVERSATION, MR. HOLLOMON, PRESIDENT OF INDUSTRIAL, STATED HE HAD REVIEWED HIS BID FOR ERROR BUT THAT NO ERROR WAS FOUND. MR. HOLLOMON'S ATTENTION WAS INVITED PARTICULARLY TO PART II, SECTION "F", PARAGRAPH 36B, OF THE INVITATION WHICH ESTABLISHES THE MINIMUM NUMBERS OF PERSONNEL THAT MUST BE PROVIDED UNDER THE CONTRACT. MR. HOLLOMON ADVISED THAT HE WAS AWARE OF THIS PROVISION AND THAT HIS BID WAS BASED ON PROVIDING THE REQUIRED MINIMUM NUMBER OF PERSONNEL. NOTWITHSTANDING INDUSTRIAL'S TELEPHONIC VERIFICATION OF ITS BID, AN ERROR WAS STILL SUSPECTED. ON JUNE 25, 1971, MR. HOLLOMON VISITED THE PURCHASING OFFICE, FURNISHED A COPY OF HIS WORKSHEETS, AND EXPLAINED THE METHOD AND MANNER IN WHICH HE PROPOSED TO PERFORM THE CONTRACT WORK AT THE PRICES BID.

A REVIEW OF THE INFORMATION SHOWN ON INDUSTRIAL'S WORKSHEETS REVEALS THAT INDUSTRIAL BASED ITS BID PRICES UPON PROVIDING LESS THAN THE MINIMUM NUMBER OF PERSONNEL REQUIRED BY THE INVITATION. PART II, SECTION "F", PARAGRAPH 36B OF THE INVITATION REQUIRES THE CONTRACTOR TO PROVIDE A SPECIFIED MINIMUM NUMBER OF LABORERS, LABOR FOREMAN, AND ASSISTANT LABOR FOREMAN FOR A FULL 8-HOUR TOUR OF DUTY, OR AN EQUIVALENT NUMBER OF PRODUCTIVE MANHOURS, ON EACH DAY ON WHICH SERVICES ARE ORDERED BY THE GOVERNMENT TO BE PERFORMED. THE MINIMUM NUMBER OF PERSONNEL TO BE PROVIDED IS PREDICATED UPON THE RANGE OF SQUARE FEET ORDERED ON EACH DAY IN EACH AREA OF PERFORMANCE. WE AGREE WITH THE CONTRACTING OFFICER THAT A REVIEW OF INDUSTRIAL'S WORKSHEET DISCLOSED THAT ITS BID WAS BASED ON PROVIDING LESS THAN THE MINIMUM NUMBER OF PERSONNEL REQUIRED UNDER THE TERMS OF THE INVITATION. ALTHOUGH INDUSTRIAL HAS STATED IN A LETTER OF OCTOBER 15, 1971, THAT IT HAS CONFIRMED ITS BID AND THAT IT DOES NOT DESIRE TO ALLEGE A MISTAKE IN BID, IT HAS INDICATED IN THE LETTER THAT THE BID IS BASED ON ITS INTERPRETATION OF THE SPECIFICATIONS, WHICH INTERPRETATION AS INDICATED HEREIN IS ERRONEOUS. WHILE INDUSTRIAL DOES NOT CHOOSE TO ALLEGE MISTAKE, IT IS CLEAR THAT A MISTAKE WAS MADE AND THAT INDUSTRIAL DID NOT PREPARE ITS BID ON THE BASIS OF THE NECESSARY REQUIREMENTS. THEREFORE, WE DO NOT OBJECT TO THE REJECTION OF THE INDUSTRIAL BID.

HOWEVER, THE CONTRACTING OFFICER ADMITS AND THE RECORD INDICATES THAT THE 12 1/2 PERCENT 20-DAY DISCOUNT OFFERED BY ANOTHER BIDDER, OLD ATLANTIC SERVICES, INC., WAS OVERLOOKED. ON PAGE 2 OF AMENDMENT NO. 3, OLD ATLANTIC HAD TYPED "INCREASE DISCOUNT FOR PROMPT PAYMENT TO 12 1/2% (TWELVE AND ONE-HALF) - 20 DAYS." THIS NOTATION BY THE BIDDER WAS NOT NOTED BY THE BID OPENING OFFICER OR BY THE BID EVALUATOR, AND THE INCREASED DISCOUNT TERMS WERE NOT CONSIDERED IN EVALUATING THE BID FOR AWARD. THE BID OF OLD ATLANTIC, PROPERLY EVALUATED, IS $18,882.92 LOWER THAN THAT OF WORLDWIDE SERVICES, INC. ACCORDINGLY, THE AWARD OF THE CONTRACT TO WORLDWIDE AT A HIGHER PRICE WAS ERRONEOUS.

IN DECIDING WHETHER A CONTRACT AWARDED ERRONEOUSLY BUT IN GOOD FAITH TO OTHER THAN THE LOW RESPONSIVE RESPONSIBLE BIDDER SHOULD BE CANCELED, ALL RELEVANT AND MATERIAL FACTORS SURROUNDING THE AWARD MUST BE CONSIDERED IN THE LIGHT OF THE BEST INTERESTS OF THE UNITED STATES.

IN ACCORDANCE WITH OUR BID PROTEST PROCEDURES (4 C.F.R. 20.2), WORLDWIDE SERVICES HAS BEEN FURNISHED WITH A COPY OF INDUSTRIAL'S AND OLD ATLANTIC SERVICES' PROTESTS AND THE FIRM HAS BEEN PROVIDED WITH AN OPPORTUNITY TO PRESENT ITS VIEWS. IN ITS LETTER TO OUR OFFICE DATED DECEMBER 23, 1971, THE ATTORNEYS FOR WORLDWIDE SUBMITTED ITS VIEWS ON THE PROTEST. IT IS THEIR POSITION THAT TERMINATION OF THIS CONTRACT WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT SINCE THIS 1-YEAR CONTRACT WAS AWARDED MORE THAN 6 MONTHS AGO AND THAT AS OF DECEMBER 23, 1971, WORLDWIDE WOULD HAVE A TERMINATION CLAIM IN THE AMOUNT OF $71,289.13. FURTHER, WORLDWIDE CONTENDS THAT TERMINATION OF ITS CONTRACT AND SUBSTITUTION OF PERFORMANCE UNDER A NEW CONTRACT WITH OLD ATLANTIC WOULD RESULT IN THE DISRUPTION OF SERVICES, POSSIBLE LABOR DIFFICULTIES, AND THE LOSS OF SUPERVISORY EMPLOYEES.

SINCE THE RECORD ESTABLISHES THAT AWARD WAS MADE TO OTHER THAN THE LOW RESPONSIVE BIDDER, WE CONCUR IN THE ADMINISTRATIVE RECOMMENDATION THAT THE CONTRACT AWARDED TO WORLDWIDE BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. SEE 49 COMP. GEN. 809, 815 (1970). WHILE IT IS CLAIMED THAT TERMINATION OF THE CONTRACT WOULD RESULT IN A SUBSTANTIAL SETTLEMENT AGAINST THE GOVERNMENT, THE AWARD MADE TO WORLDWIDE WAS CONTRARY TO 10 U.S.C. 2305(C) IN THAT, PROPERLY EVALUATED, OLD ATLANTIC WAS THE LOWEST RESPONSIVE BIDDER UNDER THE INVITATION. SEE 50 COMP. GEN. 447 (1970). FURTHER, IT HAS BEEN INDICATED ADMINISTRATIVELY THAT NO DIFFICULTIES ARE ANTICIPATED IN MAKING A TRANSITION BETWEEN CONTRACTORS SINCE OLD ATLANTIC HAS ADVISED THE CONTRACTING OFFICER THAT IT CAN COMMENCE PERFORMING THE REQUIRED SERVICES WITHIN 4 DAYS AFTER RECEIPT OF AWARD.