B-179929, APR 2, 1974, 53 COMP GEN 737

B-179929: Apr 2, 1974

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SINCE ALL OTHER BIDS WERE REJECTED. GOVERNMENT MAY ACCEPT THE REVIVED BID RATHER THAN READVERTISE IF SUCH ACTION IS IN GOVERNMENT'S BEST INTEREST. 1974: BIDS IN RESPONSE TO SALES INVITATION NO. 31-4003 ISSUED BY THE DEFENSE PROPERTY DISPOSAL SERVICE FOR HARDWARE FITTINGS AND SPECIALTIES WERE OPENED ON AUGUST 16. SURPLUS TIRE SALES (SURPLUS TIRE) WAS HIGH BIDDER ON ITEMS 169. IT WAS CONTACTED BY PHONE BY THE CONTRACTING OFFICER. NOTIFIED OF A MISDESCRIPTION RELATING TO ITEM 170 AND ASKED TO EXECUTE A WAIVER ACCEPTING ITEM 170 AS IT WAS CONSTITUTED. THE BIDDER ALLEGES THAT IT WAS ALSO REQUESTED TO EXTEND ITS OFFER UNTIL AWARD COULD BE EFFECTED. WHICH WAS AFTER EXPIRATION OF THE BID. THAT AT THE TIME OF THIS CONTACT HE WAS NOT AWARE THAT THE BID HAD EXPIRED.

B-179929, APR 2, 1974, 53 COMP GEN 737

BIDDERS - WAIVER OF MISDESCRIPTION - EXECUTION - REVIVAL OF BID BIDDER'S EXECUTION OF A WAIVER OF MISDESCRIPTION IN A SOLICITATION UPON AGENCY'S REQUEST AFTER THE BID EXPIRED MAY BE VIEWED AS A REVIVAL OF THE BID. SINCE ALL OTHER BIDS WERE REJECTED, GOVERNMENT MAY ACCEPT THE REVIVED BID RATHER THAN READVERTISE IF SUCH ACTION IS IN GOVERNMENT'S BEST INTEREST.

IN THE MATTER OF SURPLUS TIRE SALES, APRIL 2, 1974:

BIDS IN RESPONSE TO SALES INVITATION NO. 31-4003 ISSUED BY THE DEFENSE PROPERTY DISPOSAL SERVICE FOR HARDWARE FITTINGS AND SPECIALTIES WERE OPENED ON AUGUST 16, 1973, AND SURPLUS TIRE SALES (SURPLUS TIRE) WAS HIGH BIDDER ON ITEMS 169, 170, AND 174. IT HAD, HOWEVER, LIMITED THE PERIOD WITHIN WHICH ITS BID COULD BE ACCEPTED TO 10 CALENDAR DAYS. SURPLUS TIRE CONTENDS THAT PRIOR TO EXPIRATION OF THE BID, IT WAS CONTACTED BY PHONE BY THE CONTRACTING OFFICER, NOTIFIED OF A MISDESCRIPTION RELATING TO ITEM 170 AND ASKED TO EXECUTE A WAIVER ACCEPTING ITEM 170 AS IT WAS CONSTITUTED. THE BIDDER ALLEGES THAT IT WAS ALSO REQUESTED TO EXTEND ITS OFFER UNTIL AWARD COULD BE EFFECTED, WHICH IT ORALLY AGREED TO DO. THE BIDDER THEREAFTER RECEIVED BY MAIL A WAIVER PURCHASE FORM DATED AUGUST 29, 1973, WHICH IT SIGNED AND DATED SEPTEMBER 5, 1973.

THE CONTRACTING OFFICER HAS REPORTED THAT HE FIRST CONTACTED SURPLUS TIRE BY TELEPHONE ON AUGUST 28, WHICH WAS AFTER EXPIRATION OF THE BID, AND THAT AT THE TIME OF THIS CONTACT HE WAS NOT AWARE THAT THE BID HAD EXPIRED. THIS CONNECTION WE NOTE THAT THE BIDDER'S FIRST LETTER OF INQUIRY, DATED SEPTEMBER 22, 1973, AND ADDRESSED TO THE SALES CONTRACTING OFFICER, INDICATED THAT THE ABOVE-DESCRIBED TELEPHONE CONVERSATION TOOK PLACE "ON OR ABOUT AUGUST 29, 1973." IN ITS PROTEST TO THIS OFFICE THE PROTESTER HAS STATED IN ONE INSTANCE THAT THE TELEPHONE CONVERSATION OCCURRED ON AUGUST 21 AND IN ANOTHER CORRESPONDENCE A DATE OF AUGUST 23 IS REFERENCED. HOWEVER, THE RECORD OF TELEPHONE CALLS PLACED BY THE CONTRACTING OFFICER FOR THE PERIOD AUGUST 1 TO SEPTEMBER 7, 1973, SHOWS THAT TWO TELEPHONE CALLS WERE PLACED TO SURPLUS TIRE ON AUGUST 28, 1973. WE HAVE NO RECORD BEFORE US OF ANY CONTACT BETWEEN SURPLUS TIRE AND THE CONTRACTING OFFICER PRIOR TO AUGUST 28, AND THUS MUST CONCLUDE THAT ITS BID EXPIRED PRIOR TO ANY CONTACT BETWEEN THE PARTIES.

SURPLUS TIRE FURTHER CONTENDS THAT ATTACHED TO THE WAIVER PURCHASE FORM WHICH IT RECEIVED ON OR BEFORE SEPTEMBER 5, 1973, WAS THE FOLLOWING HANDWRITTEN NOTE:

MR. SCHWARTZ:

AWARD WILL BE MADE UPON RECEIPT OF LETTER FROM YOU EXTENDING BID ACCEPTANCE PERIOD. REMOVAL DATE WILL BE ADJUSTED ACCORDINGLY.

SURPLUS TIRE ACKNOWLEDGES THAT IT DID NOT SEND SUCH A LETTER TO THE CONTRACTING OFFICER ALTHOUGH IT DID SIGN AND RETURN THE WAIVER FORM. ALSO BELIEVES THAT ITS BID WAS EFFECTIVELY EXTENDED, OR REINSTATED, BY RETURN OF THE WAIVER FORM. THEREAFTER, UPON ITS INQUIRY OF SEPTEMBER 22, 1973, TO THE CONTRACTING OFFICER, IT WAS NOTIFIED THAT "SINCE AN EXTENSION OF YOUR BID ACCEPTANCE TIME WAS NEVER RECEIVED, AN AWARD MAY NOT BE MADE INASMUCH AS THE BID BECAME INVALID UPON EXPIRATION OF YOUR 10-DAY BID ACCEPTANCE TIME."

WE UNDERSTAND THAT ALL BIDS WERE SUBSEQUENTLY REJECTED ON THE ITEMS IN WHICH SURPLUS TIRE IS INTERESTED AND THAT THE DEFENSE PROPERTY DISPOSAL SERVICE INTENDS TO READVERTISE THESE ITEMS AT A LATER DATE.

IN ORDER FOR ACCEPTANCE AND AWARD TO TAKE PLACE, THE GOVERNMENT MUST HAVE IN ITS POSSESSION A RESPONSIVE AND VIABLE BID. HOWEVER, THIS IS NOT TO SAY THAT IN PROPER CIRCUMSTANCES THE GOVERNMENT MAY NOT CHOOSE TO ACCEPT A BID, ONCE EXPIRED, WHICH HAS SUBSEQUENTLY BEEN REVIVED BY THE BIDDER. LIMITATION SET BY THE BIDDER ON THE TIME IN WHICH ITS BID MAY BE ACCEPTED SERVES TO BENEFIT THE BIDDER IN MARKETS WHERE THERE ARE FREQUENT FLUCTUATIONS IN PRICE OR PRODUCT DEMAND. EXPIRATION OF THE ACCEPTANCE PERIOD ENABLES THE BIDDER, IF IT DESIRES, TO REFUSE TO PERFORM ANY CONTRACT AWARDED TO IT THEREAFTER AND DEPRIVES THE GOVERNMENT OF ANY RIGHT TO CREATE A CONTRACT BY ACCEPTANCE ACTION. NONETHELESS, THE BIDDER MAY WAIVE AN ACCEPTANCE TIME LIMITATION, BEFORE OR FOLLOWING EXPIRATION OF THE ACCEPTANCE PERIOD, IF IT IS STILL WILLING TO ACCEPT AN AWARD ON THE BASIS OF THE BID AS SUBMITTED. 46 COMP. GEN. 371, 373 (1966); 42 ID. 604, 606 (1963); B-143404, NOVEMBER 25, 1960. HOWEVER, THE BIDDER MAY NOT BY SUCH ACTION COMPEL THE GOVERNMENT TO ACCEPT ITS BID. SINCE THE GOVERNMENT WOULD NOT HAVE BEEN ABLE TO COMPEL THE BIDDER TO EXTEND ITS ACCEPTANCE PERIOD BEYOND THE STATED NUMBER OF DAYS, IT DOES NOT APPEAR ENTIRELY INEQUITABLE THAT THE BIDDER CANNOT FORCE THE GOVERNMENT TO DO SO. 48 COMP. GEN. 19, 22 (1968).

IN OUR OPINION IT IS APPARENT FROM SURPLUS TIRE'S EXECUTION OF THE WAIVER FORM THAT IT INTENDED TO EXTEND THE LIFE OF ITS BID. OTHERWISE, THE WAIVER WOULD HAVE BEEN MEANINGLESS.

HOWEVER, AS WE NOTED ABOVE, THE CONTRACTING OFFICER IS NOT COMPELLED TO MAKE AWARD TO SURPLUS TIRE UNLESS IT IS CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT TO DO SO.

THIS OFFICE RECOGNIZES THAT THE AUTHORITY VESTED IN THE CONTRACTING OFFICER TO REJECT ANY OR ALL BIDS AND READVERTISE IS EXTREMELY BROAD, AND WE WILL ORDINARILY NOT QUESTION HIS ACTION. SEE 49 COMP. GEN. 244, 249 (1969). IN EXERCISING SUCH AUTHORITY, THE CONTRACTING OFFICER MUST NOT ACT IN A MANNER WHICH WOULD COMPROMISE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. AS WAS STATED BY THE COURT OF CLAIMS IN MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 60 F. SUPP. 635, 643, 102 CT. CL. 699, CERT. DENIED 325 U.S. 866 (1945):

TO HAVE A SET OF BIDS DISCARDED AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE IS A SERIOUS MATTER, AND IT SHOULD NOT BE PERMITTED EXCEPT FOR COGENT REASONS.

CONSISTENT WITH THE POLICY SET FORTH IN THE MASSMAN CASE, SUBPARAGRAPH (A) OF SECTION 1-2.404-1 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT IN ORDER TO PRESERVE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM, AFTER BID OPENING AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER SUBMITTING THE LOWEST RESPONSIVE BID "UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION." THE PRINCIPAL EXPRESSED THEREIN AND IN THE MASSMAN CASE EQUALLY APPLIES TO SURPLUS SALES. COMP. GEN. 244, 249 (1969).

MOREOVER, IN 46 COMP. GEN. 371, 374 (1966), WE UPHELD THE CONTRACTING OFFICER'S DECISION TO ALLOW THE BIDDER TO WAIVE THE EXPIRATION OF ITS BID ACCEPTANCE PERIOD, AND EXPRESSED OUR OPINION THAT THE ALTERNATIVE PROCEDURE LEFT OPEN TO THE CONTRACTING OFFICER, I.E., OF CANCELING THE IFB AND READVERTISING THE PROCUREMENT, WAS NOT PROPER IN THAT EXPIRATION OF THE BID IN THAT CASE DID NOT CONSTITUTE A "COMPELLING REASON" TO REJECT ALL BIDS AND CANCEL THE INVITATION, ESPECIALLY IN LIGHT OF THE HARM THAT WOULD BE CAUSED TO THE BIDDER BY EXPOSURE OF ITS BID.

IN 42 COMP. GEN. 604, SUPRA, WE HELD THAT THE LOW BIDDER SHOULD NOT BE PERMITTED TO REVIVE ITS EXPIRED BID. IN THAT CASE THE NEXT LOW BID WAS AVAILABLE TO THE GOVERNMENT AND WAS REASONABLE AS TO PRICE. IN THOSE CIRCUMSTANCES WE CONCLUDED THAT IT WOULD BE UNFAIR TO THE SECOND LOW BIDDER, WHO HAD OFFERED THE GOVERNMENT A LONGER BID ACCEPTANCE PERIOD THAN THE LOW BIDDER, TO PERMIT THE LOW BIDDER TO REVIVE ITS BID. IN THE CASE AT HAND, HOWEVER, THE QUESTION OF RELATIVE FAIRNESS TO THE BIDDERS DOES NOT ARISE. HERE SURPLUS TIRE SUBMITTED THE ONLY ACCEPTABLE BID FOR THE ITEMS INVOLVED AND THEREFORE OTHER BIDDERS WHO MAY HAVE OFFERED A LONGER ACCEPTANCE PERIOD ARE NOT UNFAIRLY PREJUDICED BY REINSTATEMENT OF THE ONLY ACCEPTABLE BID.

FROM THE RECORD BEFORE US IT APPEARS THAT CANCELLATION AND READVERTISEMENT OF THE ITEMS WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST. IN THIS CONNECTION WE NOTE THAT WAIVER OF THE MISDESCRIPTION REQUESTED BY THE CONTRACTING OFFICER AND EXECUTED BY THE BIDDER WAS AUTHORIZED ONLY IN THE INSTANCE OF A MINOR MISDESCRIPTION THAT REASONABLY COULD NOT HAVE AFFECTED COMPETITION, IF THE COST OF CANCELLATION OF THE ITEM AND ITS READVERTISEMENT WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT. WE FIND NOTHING IN THE SUBSEQUENT FACTS PRESENTED TO US THAT WOULD CONSTITUTE A COGENT OR COMPELLING REASON FOR PERMITTING CANCELLATION AND READVERTISEMENT OF ITEMS 169, 170, AND 174. HOWEVER, SHOULD THE MARKET VALUE OF THESE ITEMS HAVE SO CHANGED THAT THE GOVERNMENT FEELS CANCELLATION AND READVERTISEMENT WOULD BE IN ITS BEST INTEREST, THEN WE WOULD NOT OBJECT TO THAT DETERMINATION. ON THE BASIS OF THE RECORD BEFORE US, HOWEVER, WE FEEL THAT THE GOVERNMENT'S INTEREST WOULD BE BETTER SERVED BY ACCEPTANCE OF THE BIDS THAN BY CANCELLATION AND READVERTISEMENT.