B-175682, JUN 28, 1972, 51 COMP GEN 831

B-175682: Jun 28, 1972

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BIDS - LATE - TELEGRAPHIC MODIFICATIONS - PROPRIETY OF CONSIDERATION A TELEGRAM THAT REDUCED BOTH BASE AND ADDITIVE ALTERNATE BIDS AND COMPLETED INFORMATION OMITTED FROM THE INITIAL BID RESPECTING SUBCONTRACTOR LISTING WHICH WAS TELEPHONED TO THE CONTRACTING AGENCY 6 MINUTES BEFORE BID OPENING. WAS PROMPTLY TRANSCRIBED AND HAND CARRIED TO THE CONTRACTING OFFICER. IS AN ACCEPTABLE MODIFICATION PURSUANT TO FEDERAL PROCUREMENT REGULATIONS 1 2.304. THE FAILURE TO INDICATE WHETHER PRICES WERE TO BE REDUCED "BY" OR "TO" THE DOLLAR AMOUNTS LISTED CREATED NO AMBIGUITY. FOR AN AMBIGUITY EXISTS ONLY WHEN THE TERMS OF A BID ARE SUBJECT TO TWO OR MORE REASONABLE INTERPRETATIONS. ALSO A TELEGRAPHIC ABBREVIATION COMBINING TWO CATEGORIES OF SUBCONTRACTING WORK WAS PROPERLY INTERPRETED TO COVER BOTH CATEGORIES AND TO SATISFY THE REQUIREMENT THAT THE BID IDENTIFY THE SUBCONTRACTOR TO BE USED IN EACH CATEGORY.

B-175682, JUN 28, 1972, 51 COMP GEN 831

BIDS - LATE - TELEGRAPHIC MODIFICATIONS - PROPRIETY OF CONSIDERATION A TELEGRAM THAT REDUCED BOTH BASE AND ADDITIVE ALTERNATE BIDS AND COMPLETED INFORMATION OMITTED FROM THE INITIAL BID RESPECTING SUBCONTRACTOR LISTING WHICH WAS TELEPHONED TO THE CONTRACTING AGENCY 6 MINUTES BEFORE BID OPENING, WAS PROMPTLY TRANSCRIBED AND HAND CARRIED TO THE CONTRACTING OFFICER, AND LATER CONFIRMED BY WESTERN UNION, IS AN ACCEPTABLE MODIFICATION PURSUANT TO FEDERAL PROCUREMENT REGULATIONS 1 2.304. FURTHERMORE, THE FAILURE TO INDICATE WHETHER PRICES WERE TO BE REDUCED "BY" OR "TO" THE DOLLAR AMOUNTS LISTED CREATED NO AMBIGUITY, FOR AN AMBIGUITY EXISTS ONLY WHEN THE TERMS OF A BID ARE SUBJECT TO TWO OR MORE REASONABLE INTERPRETATIONS, WHEREAS REDUCING PRICES "BY" THE AMOUNTS SPECIFIED BROUGHT THE PRICES IN LINE WITH OTHER BIDS AND THE GOVERNMENT'S ESTIMATE. ALSO A TELEGRAPHIC ABBREVIATION COMBINING TWO CATEGORIES OF SUBCONTRACTING WORK WAS PROPERLY INTERPRETED TO COVER BOTH CATEGORIES AND TO SATISFY THE REQUIREMENT THAT THE BID IDENTIFY THE SUBCONTRACTOR TO BE USED IN EACH CATEGORY.

TO PAUL & GORDON, JUNE 28, 1972:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 21, 1972, WITH ENCLOSURES, IN SUPPORT OF THE PROTEST OF THE CARDAN COMPANY, INCORPORATED, (CARDAN) AGAINST THE AWARD OF A CONTRACT TO THE ALDER CONSTRUCTION COMPANY (ALDER) UNDER INVITATION FOR BIDS (IFB) BIA-0150 72-17, ISSUED BY THE BUREAU OF INDIAN AFFAIRS, UNITED STATES DEPARTMENT OF THE INTERIOR, ON FEBRUARY 14, 1972.

THE IFB CALLED FOR PRICES ON THE BASE ITEM AND SEVEN ADDITIVE ALTERNATES. BIDS WERE TO BE SUBMITTED BY 2:00 P.M., APRIL 11, 1972. OPPOSITE EACH OF 24 CATEGORIES OF WORK THE BIDDER WAS TO INSERT THE NAME AND ADDRESS OF A SUBCONTRACTOR OR SUBCONTRACTORS PROPOSED TO PERFORM THAT CATEGORY OF WORK OR HIS OWN NAME AND ADDRESS WHERE HE PROPOSED TO DO THAT WORK WITH HIS OWN FORCES. FIVE BIDS WERE RECEIVED BY BID OPENING. ALDER'S ORIGINAL BID SUBMISSION FAILED TO INCLUDE NAMES AND ADDRESSES FOR ALL 24 CATEGORIES. HOWEVER, ALDER SENT A TELEGRAM TO AMEND ITS PRICES FOR THE BASE AND ALTERNATE ITEMS AND TO COMPLETE THE SUBCONTRACTOR LISTING. THE TELEGRAM WAS TELEPHONED BY WESTERN UNION TO THE CONTRACTING OFFICER'S SECRETARY AT 1:54 P.M., APRIL 11, 1972, JUST MINUTES BEFORE BID OPENING. THE SECRETARY REDUCED IT TO WRITING AND CARRIED IT TO THE BID OPENING ROOM. A CONFIRMATION COPY WAS RECEIVED AFTER BID OPENING FROM WESTERN UNION. THE TELEGRAM READ:

REVISE OUR BID PROJECT LH53-137 STEWART GYMNASIUM AS FOLLOWS REDUCE BASE BID $365,000.00 REDUCE ALTERNATE A $130,000 REDUCE ALTERNATE B $75,000 REDUCE ALTERNATE C $50,000 REDUCE ALTERNATE D $2,000 REDUCE ALTERNATE E $8,000 REDUCE ALTERNATE F $5,000 ALTERNATE G $13,000 SUBCONTRACTORS AS FOLLOWS: REINFORCING, STEEL ENGINEERS, LAS VEGAS; PILLING TURZILLO, OMAHA, NEBRASKA; STRUCTURAL STEEL DECKING, ALDER CONSTRUCTION; WALLBOARD, PLASTER, PAINTING, TED MILLER, SALT LAKE CITY; CERAMIC TILE, KINGSBERRY TILE, CARSON CITY; GLAZING, DESERT GLASS RENO; SYNTHETIC FLOOR SURFACING, WESTERN ATHLETIC SURFACING; OAKLAND; SHEET METAL, NEVADA; SHEET METAL, RENO; ROOFING, YANCEY, RENO; PLUMBING, HEATING, SEWER LINE, AND WATER LINE, ASCO ENGINEERING, VENTURA, CALIFORNIA; ELECTRICAL, ACME COLLINS, RENO, RESILIENT FLOORING, ALDER CONSTRUCTION.

BASED ON THE TELEGRAM ALDER'S BID PRICES WERE REDUCED BY THE AMOUNTS LISTED AND THE SUBCONTRACTOR LISTING WAS CONSIDERED COMPLETE. INCLUDING ALDER'S BID MODIFICATION, THE PROCURING AGENCY COMPUTED THE THREE LOW BASE BIDS AS FOLLOWS:

ALDER CONSTRUCTION COMPANY $935,000

THE CARDAN COMPANY, INC. 962,000

J. R. YOUNGDALE CONSTR. CO., INC. 962,800

THE ORIGINAL ALDER BASE BID HAD BEEN $1,300,000. CONSEQUENTLY, THE AGENCY'S ACCEPTANCE OF THE ALDER BID MODIFICATION HAS THE EFFECT OF DISPLACING CARDAN AS THE LOW BIDDER. THE SAME RESULT OCCURS FOR EACH COMBINATION OF BASE BID AND ALTERNATES LISTED IN THE IFB.

YOU CONTEND THAT THE ALDER TELEGRAM AMENDING ITS ORIGINAL BID SHOULD NOT BE ACCEPTED BY THE AGENCY BECAUSE IT WAS DELIVERED TO THE BID ROOM AFTER THE TIME DESIGNATED FOR BID OPENING. TELEGRAPHIC MODIFICATIONS OF BIDS WERE AUTHORIZED BY PARAGRAPH 5(D) OF STANDARD FORM 22, "INSTRUCTIONS TO BIDDERS" WHICH WAS INCORPORATED INTO THE IFB. CONCERNING THE MODIFICATION OF BIDS, FEDERAL PROCUREMENT REGULATIONS 1 2.304 STATES IN PART:

(A) BIDS MAY BE MODIFIED OR WITHDRAWN BY WRITTEN OR TELEGRAPHIC NOTICE RECEIVED IN THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS NOT LATER THAN THE EXACT TIME SET FOR OPENING OF BIDS. A TELEGRAPHIC MODIFICATION OR WITHDRAWAL OF A BID RECEIVED IN SUCH OFFICE BY TELEPHONE FROM THE RECEIVING TELEGRAPH OFFICE NOT LATER THAN THE TIME SET FOR OPENING OF BIDS SHALL BE CONSIDERED IF SUCH MESSAGE IS CONFIRMED BY THE TELEGRAPH COMPANY BY SENDING A COPY OF THE WRITTEN TELEGRAM WHICH FORMED THE BASIS OF THE TELEPHONE CALL.

THE PROCURING AGENCY REPORTS THAT THE LOCAL WESTERN UNION OFFICE TELEPHONED THE ALDER TELEGRAM TO THE DIVISION OF PLANT DESIGN AND CONSTRUCTION, THE OFFICE DESIGNATED IN THE IFB FOR RECEIPT OF BIDS. NOTED, THE MESSAGE WAS TAKEN BY THE SECRETARY TO THE CONTRACTING OFFICER, WHOSE OFFICE IS JUST A SHORT DISTANCE FROM THE BID OPENING ROOM; THE MESSAGE WAS PROMPTLY TRANSCRIBED AND HAND CARRIED TO THE CONTRACTING OFFICER AND WAS LATER CONFIRMED BY THE TELEGRAPH COMPANY. WE DO NOT CONSTRUE THE REGULATION TO REQUIRE THAT THE CALL FROM THE TELEGRAPH COMPANY MUST BE TAKEN ON A TELEPHONE IN THE BID OPENING ROOM. SINCE, PRESUMABLY, ONLY THE INDIVIDUAL WITH THE RECEIVER TO HIS EAR WOULD HEAR THE MESSAGE, WE DO NOT BELIEVE IT IS SIGNIFICANT THAT THE CALL WAS RECEIVED IN A NEARBY OFFICE. WE HAVE PREVIOUSLY INDICATED THAT A TELEGRAPHIC BID MODIFICATION TELEPHONED TO THE ADDRESSEE CONTRACTING OFFICER PRIOR TO OPENING AND LATER CONFIRMED IN WRITING MAY BE CONSIDERED. B-142110, MARCH 10, 1960. SEE ALSO B-168210(2), JULY 10, 1970. ACCORDINGLY, WE CONCLUDE THAT THE ALDER BID MODIFICATION WAS RECEIVED ON TIME UNDER THE REGULATION.

THE TELEGRAM STATES IN PART THAT THE BASE BID AND ALTERNATES A THROUGH F SHOULD BE REDUCED IN PRICE; HOWEVER, THERE IS NO EXPRESS DIRECTIVE AS TO WHETHER THE BIDS SHOULD BE REDUCED "BY" OR "TO" THE DOLLAR AMOUNT LISTED. THE PROCURING AGENCY INTERPRETED THE BID MODIFICATION AS DIRECTING A REDUCTION IN BIDS "BY" THE DOLLAR AMOUNTS LISTED BECAUSE THIS INTERPRETATION IS CONSISTENT WITH THE OTHER BIDS (BASE BID RANGE: $962,000 TO $985,000) AND THE GOVERNMENT ESTIMATE (BASE BID: $923,000). SINCE THE ORIGINAL ALDER BASE BID WAS $1,300,000, REDUCTION OF THE ORIGINAL BID "BY" $365,000 WOULD BE IN LINE WITH THE OTHER BIDS AND THE GOVERNMENT ESTIMATE; REDUCTION "TO" $365,000 WOULD RESULT IN AN UNREASONABLY LOW BID.

YOU CONTEND THAT THE BID PRICES ARE AMBIGUOUS DUE TO THE LACK OF DIRECTION IN THE BID MODIFICATION CONCERNING HOW THE BID PRICES ARE TO BE REDUCED AND THAT OUR DECISION, 50 COMP. GEN. 302 (1970) REQUIRES A REJECTION OF THE ALDER BID FOR AMBIGUITY.

AN AMBIGUITY EXISTS WHERE THE TERMS OF A BID ARE SUBJECT TO TWO OR MORE REASONABLE INTERPRETATIONS. HOWEVER, AN ITEM IN THE BID MAY BE CONFUSING WITHOUT BEING AMBIGUOUS IF AN APPLICATION OF REASON WOULD SERVE TO REMOVE THE DOUBT. 48 COMP. GEN. 757, 760 (1969); B-173907(1) DECEMBER 22, 1971. WE BELIEVE THE ONLY REASONABLE CONSTRUCTION OF THE ALDER TELEGRAM IS THAT THE ITEMS WERE TO BE REDUCED "BY" RATHER THAN "TO" THE DOLLAR AMOUNTS LISTED SINCE THE INSERTION OF "TO" WOULD CONSTITUTE REDUCTIONS SIGNIFICANTLY BEYOND WHAT COULD REASONABLY HAVE BEEN INTENDED. THEREFORE, WE FIND THAT THE CONTRACTING OFFICER PROPERLY CONSTRUED ALDER'S BASE BID AND BIDS FOR ALTERNATES A THROUGH F.

IN THE CASE YOU CITE, 50 COMP. GEN. 302 (1970), WE HELD THAT THE TELEGRAPHIC BID MODIFICATION OF A BID FOR GOVERNMENT SURPLUS PROPERTY COULD REASONABLY BE INTERPRETED AS MODIFYING THE ORIGINAL BID OF $6,161.61 EITHER "BY" OR "TO" $8,900. A WIDE DIVERGENCE IN PRICES UNDER GOVERNMENT SURPLUS SALES CAN REASONABLY BE EXPECTED, WHEREAS SIMILAR DIFFERENCES IN BIDS ON GOVERNMENT PROCUREMENT ARE MUCH LESS LIKELY: FOR EXAMPLE, WE HAVE RECOGNIZED THAT SUCH A DIVERGENCE MAY NOT PUT THE CONTRACTING OFFICER ON NOTICE OF POSSIBLE ERROR IN A SURPLUS SALE WHILE IT WOULD IN A GOVERNMENT PURCHASE. B-175630, MAY 11, 1972. THEREFORE, WE THINK THE PRESENT CASE IS DISTINGUISHABLE FROM 50 COMP. GEN. 302 (1970).

CONCERNING ALTERNATE G, THE PROCURING AGENCY REPORTS THAT DUE TO INADEQUATE FUNDS ALTERNATE G WILL NOT BE INCLUDED IN ANY AWARD MADE. CONSEQUENTLY, IT IS NOT NECESSARY TO DETERMINE WHETHER OR NOT ALDER'S BID MODIFICATION FOR ALTERNATE G IS AMBIGUOUS.

AS INDICATED, ALDER'S BID AS INITIALLY SUBMITTED DID NOT INCLUDE A PROPOSED SUBCONTRACTOR OR ITS OWN NAME FOR EACH OF THE 24 DESIGNATED WORK CATEGORIES. ALDER SOUGHT TO REMEDY THE OMISSIONS IN ITS TELEGRAM. HOWEVER, THE TELEGRAM TELESCOPED OR ABRIDGED THE CATEGORIES AS INDICATED IN THE FOLLOWING TABULATION:

ALDER ALDER SUBCONTRACTOR

CATEGORY PER IFB ABBREVIATION IDENTIFICATION

STRUCTURAL STEEL STRUCTURAL ALDER CONSTRUCTION

(INSTALLATION) STEEL

STEEL DECKING DECKING

LIGHTGAGE FRAMING WALLBOARD

AND WALLBOARD TED MILLER,

PLASTER AND STUCCO PLASTER SALT LAKE

PAINTING PAINTING CITY

PLUMBING (WITHIN PLUMBING

BUILDINGS)

HEATING, VENTILATING HEATING ASCO ENGINEERING,

AND AIR CONDITIONING

SEWER LINES (OUTSIDE SEWER LINE VENTURA,

UTILITIES) CALIFORNIA

WATER LINES (OUTSIDE WATER LINE

UTILITIES)

THE PROCURING ACTIVITY CONSIDERED THE WORK DESCRIPTIONS USED BY ALDER AS ABBREVIATIONS FOR THE ENTIRE WORK CATEGORY BECAUSE THE SAME SUBCONTRACTOR USUALLY PERFORMS ALL THE WORK IN EACH CATEGORY. THERE WAS NO CATEGORY LISTED AS "STRUCTURAL STEEL DECKING". THE PROCURING ACTIVITY REPORTS THAT "STRUCTURAL STEEL" NORMALLY DOES NOT REFER TO "STEEL DECKING" AND THE LATTER TERM DOES NOT NORMALLY DENOTE "STRUCTURAL STEEL" AND THAT DUE TO THE SIMILARITY IN THE WORDING OF THE TERMS "STRUCTURAL STEEL" AND "STEEL DECKING" AND SINCE ALDER HAD NOT PREVIOUSLY FURNISHED A SUBCONTRACTOR LISTING FOR THESE CATEGORIES, THE PROCURING AGENCY INTERPRETED THE BID MODIFICATION AS COVERING BOTH CATEGORIES. CONSEQUENTLY, IT WAS CONSIDERED THAT ALDER HAD IDENTIFIED ITSELF TO PERFORM THESE TWO CATEGORIES WITH ITS OWN FORCES. FAILURE TO FULLY SET OUT THE ADDRESSES AS CALLED FOR BY THE IFB WAS ALSO NOT CONSIDERED MATERIAL. HOWEVER, YOU CONTEND THAT THE TELEGRAPHED INFORMATION CONTAINED AMBIGUITIES AND OMISSIONS WHICH RENDERED THE ALDER BID NONRESPONSIVE.

THE PURPOSE OF REQUIRING A SUBCONTRACTOR LISTING IS TO PREVENT "BID SHOPPING" AFTER AWARD OF CONTRACT AND IN 43 COMP. GEN. 206 (1963) WE HELD THAT THE FAILURE TO FURNISH A LIST OF SUBCONTRACTORS REQUIRED BY THE IFB RENDERED A BID NONRESPONSIVE. SEE ALSO 44 COMP. GEN. 526 (1965). THESE CASES THE BIDDER OMITTED THE ENTIRE NAME AND ADDRESS OF THE SUBCONTRACTOR FOR SOME OR ALL OF THE WORK CATEGORIES. HOWEVER, WHERE THERE WAS ONLY A PARTIAL OMISSION IN THE SUBCONTRACTOR NAME OR ADDRESS OR WHERE THE PROCURING AGENCY COULD DETERMINE THE SUBCONTRACTOR NAME FROM A REASONABLE INTERPRETATION OF THE JOB DESCRIPTION WITHOUT OBTAINING CLARIFICATION DATA FROM THE BIDDER, WE HAVE CONSIDERED SUCH IRREGULARITIES MINOR. 50 COMP. GEN. 295 (1970); B-170862, NOVEMBER 10, 1970.

IN B-173991(1), MARCH 20, 1972, IT WAS ALLEGED THAT A BID WAS NONRESPONSIVE BECAUSE THE SUBCONTRACTOR LISTING DID NOT INCLUDE A NAME FOR THE WORK CATEGORY "VENTILATING". HOWEVER, THE BIDDER HAD SUBMITTED THE NAME OF ITS GENERAL BUILDING SUBCONTRACTOR AND A DESCRIPTION OF THE WORK HE WAS TO PERFORM. WE FOUND THE BID RESPONSIVE SINCE THE INFORMATION ON THE FORM, REASONABLY CONSTRUED, INDICATED THAT THE GENERAL SUBCONTRACTOR WOULD PERFORM ALL THE CATEGORIES OF WORK, INCLUDING VENTILATING, NOT OTHERWISE PROVIDED FOR. WE NOTED THAT THE PROCURING ACTIVITY WAS ABLE TO IDENTIFY THE CATEGORIES OF WORK TO BE PERFORMED BY THE SUBCONTRACTOR. FIND THAT THE PRESENT SITUATION IS ANALOGOUS TO THE EARLIER CASE AND THAT THE AGENCY REASONABLY INTERPRETED THE DESCRIPTION, "STRUCTURAL STEEL DECKING" AND OTHER WORK CATEGORIES LISTED IN THE ALDER TELEGRAM TO RELATE TO THE TOTAL OF EACH OF THE CATEGORIES FOR WHICH THE REQUIRED INFORMATION HAD NOT PREVIOUSLY BEEN PROVIDED.

THE CASES CITED BY YOU IN SUPPORT OF YOUR POSITION WITH RESPECT TO THE SUBCONTRACTOR LISTING IN GENERAL SIMPLY STAND FOR THE PROPOSITION THAT THE REQUIREMENT IS MATERIAL AND FAILURE TO COMPLY IN SUBSTANCE IS FATAL TO THE BID. ONE CASE CITED BY YOU, B-171771, APRIL 23, 1971, IS DISTINGUISHABLE BECAUSE THERE THE BIDDER SOUGHT TO RESERVE AN OPTION TO SELECT ONE OF TWO LISTED SUBCONTRACTORS. IN THE PRESENT CASE THE ONLY ISSUE IS WHETHER THE BID IDENTIFIED THE SUBCONTRACTOR ALDER PROPOSED TO USE IN EACH OF THE LISTED CATEGORIES. WE FIND THAT IT HAS.

BASED ON THE ABOVE, YOUR PROTEST MUST BE DENIED.