B-180112, APR 15, 1974, 53 COMP GEN 775

B-180112: Apr 15, 1974

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CONTRACTS - PROTESTS - TIMELINESS - SOLICITATION IMPROPRIETIES BID PROTEST FILED AFTER BID OPENING AND CHALLENGING ESTIMATES AND OTHER ALLEGED DEFECTS IN SOLICITATION IS UNTIMELY UNDER 4 CFR 20.2(A). NOTWITHSTANDING PROTESTER'S ASSERTION THAT DEFECTS BECAME APPARENT ONLY AFTER INCUMBENT CONTRACTOR'S BID WAS OPENED. SINCE RECORD INDICATES THAT ALLEGED DEFECTS WERE OR SHOULD HAVE BEEN APPARENT TO PROTESTER PRIOR TO BID OPENING. BIDDERS - QUALIFICATIONS - SMALL BUSINESS CONCERNS - STATUS DETERMINATION DETERMINATION BY SMALL BUSINESS ADMINISTRATION (SBA) THAT BIDDER IS SMALL BUSINESS IS CONCLUSIVE UPON FEDERAL AGENCIES AND ANY APPEAL FROM DETERMINATION MUST BE FILED WITH SBA. SINCE LOW BIDDER'S PARTICIPATION IN BID PROTEST FILED BY THE OTHER BIDDER SHOWS INTENTION TO KEEP BID OPEN FOR DURATION OF PROTEST AND THERE IS NO INDICATION THAT ACCEPTANCE OF LOW BID WOULD HAVE DETRIMENTAL EFFECT ON COMPETITIVE BIDDING SYSTEM OR BE PREJUDICIAL TO OTHER BIDDERS.

B-180112, APR 15, 1974, 53 COMP GEN 775

CONTRACTS - PROTESTS - TIMELINESS - SOLICITATION IMPROPRIETIES BID PROTEST FILED AFTER BID OPENING AND CHALLENGING ESTIMATES AND OTHER ALLEGED DEFECTS IN SOLICITATION IS UNTIMELY UNDER 4 CFR 20.2(A), NOTWITHSTANDING PROTESTER'S ASSERTION THAT DEFECTS BECAME APPARENT ONLY AFTER INCUMBENT CONTRACTOR'S BID WAS OPENED, SINCE RECORD INDICATES THAT ALLEGED DEFECTS WERE OR SHOULD HAVE BEEN APPARENT TO PROTESTER PRIOR TO BID OPENING. BIDDERS - QUALIFICATIONS - SMALL BUSINESS CONCERNS - STATUS DETERMINATION DETERMINATION BY SMALL BUSINESS ADMINISTRATION (SBA) THAT BIDDER IS SMALL BUSINESS IS CONCLUSIVE UPON FEDERAL AGENCIES AND ANY APPEAL FROM DETERMINATION MUST BE FILED WITH SBA. BIDS - ACCEPTANCE TIME LIMITATION - EXTENSION - EFFECT NOT PREJUDICIAL TO OTHER BIDDERS LOW BIDDER'S FAILURE TO FORMALLY EXTEND BID IN WRITING PRIOR TO EXPIRATION DATE DOES NOT PRECLUDE ACCEPTANCE OF BID SUBSEQUENTLY EXTENDED, NOTWITHSTANDING FACT THAT ANOTHER BIDDER EXTENDED ITS BID PRIOR TO EXPIRATION DATE, SINCE LOW BIDDER'S PARTICIPATION IN BID PROTEST FILED BY THE OTHER BIDDER SHOWS INTENTION TO KEEP BID OPEN FOR DURATION OF PROTEST AND THERE IS NO INDICATION THAT ACCEPTANCE OF LOW BID WOULD HAVE DETRIMENTAL EFFECT ON COMPETITIVE BIDDING SYSTEM OR BE PREJUDICIAL TO OTHER BIDDERS.

IN THE MATTER OF MISSION VAN & STORAGE COMPANY, INC. AND MAPAC, INC., A JOINT VENTURE, APRIL 15, 1974:

INVITATION FOR BIDS (IFB) NO. M00681-74-B-0030, ISSUED SEPTEMBER 25, 1973, BY THE MARINE CORPS AT CAMP PENDLETON, CALIFORNIA, SOLICITED BIDS FOR PROVIDING SERVICES RELATING TO THE STORAGE AND SHIPMENT OF PERSONAL PROPERTY BELONGING TO DEPARTMENT OF DEFENSE PERSONNEL FOR THE CALENDAR YEAR 1974. THE SOLICITATION CONTAINED ESTIMATED AMOUNTS OF THE VARIOUS TYPES OF SERVICES THAT WOULD BE REQUIRED DURING THE YEAR, AND INCLUDED A NOTATION THAT THE PROCUREMENT WAS A 100 PERCENT SMALL BUSINESS SET ASIDE. ON NOVEMBER 13, 1973, BIDS WERE OPENED AND DEWITT TRANSFER AND STORAGE COMPANY (DEWITT), BIDDING ON AN "ALL OR NONE" BASIS, WAS FOUND TO BE THE LOW BIDDER.

BY LETTER AND TELEGRAM DATED NOVEMBER 20, 1973, MISSION VAN & STORAGE CO., INC. AND MAPAC, INC. (MISSION - MAPAC), WHICH HAD BID AS A JOINT VENTURE, PROTESTED ANY AWARD UNDER THE IFB ON THE BASIS THAT IT CONTAINED SEVERAL DEFECTS, INCLUDING GROSSLY INACCURATE GOVERNMENT ESTIMATES. AWARD TO DEWITT WAS ALSO PROTESTED ON THE GROUND THAT THE FIRM WAS NOT A SMALL BUSINESS. THEREAFTER, BY LETTER OF JANUARY 18, 1974, MISSION - MAPAC FURTHER PROTESTED AGAINST AWARD TO ANY BIDDER OTHER THAN ITSELF, CLAIMING THAT ALL BIDS EXCEPT ITS OWN HAD EXPIRED ON JANUARY 13, 1974.

THE SPECIFIC IFB DEFECTS ALLEGED BY MISSION - MAPAC DEAL WITH ESTIMATES OF THE SERVICES THAT WOULD BE REQUIRED ANNUALLY UNDER THE CONTRACT. MISSION - MAPAC ASSERTS THAT SOME ESTIMATES ARE OVERSTATED, WHILE OTHER SERVICES THAT WILL BE REQUIRED ARE NOT PROVIDED FOR AT ALL. UNDER SECTION 20.2(A) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN SOLICITATIONS WHICH ARE APPARENT PRIOR TO BID OPENING MUST BE FILED PRIOR TO BID OPENING. 4 CFR 20.2(A). MISSION - MAPAC CLAIMS THAT THE DEFECTS IT ALLEGES WERE NOT APPARENT PRIOR TO BID OPENING, BUT BECAME APPARENT ONLY AFTER THE BID OF DEWITT, THE INCUMBENT CONTRACTOR, WAS REVEALED.

HOWEVER, IT IS CLEAR FROM BOTH MISSION - MAPAC'S LETTER OF NOVEMBER 27, 1973, AND ITS BID THAT ITS AWARENESS OF THE ALLEGED SOLICITATION DEFECTS WAS NOT DEPENDENT UPON DEWITT'S BID. FOR EXAMPLE, IT IS POINTED OUT THAT THE TOTAL ESTIMATED SERVICES IN CONNECTION WITH OVERFLOW GOODS FOR TYPE II OR AIR CARGO CONTAINERS IS 150 PERCENT OF THE TOTAL ESTIMATE FOR THE BULK (NON-OVERFLOW) CARGO, WHEREAS MISSION - MAPAC'S "EXPERIENCE AS A GOVERNMENT CONTRACTING MOVING AND STORAGE COMPANY HAS SHOWN THAT IN ACTUALITY OVERFLOW ARTICLES AMOUNT TO APPROXIMATELY 5 PERCENT TO 15 PERCENT OF THE BULK TYPE II OR AIR CARGO ARTICLES." IT IS ALSO ALLEGED THAT THE IFB DID NOT EXPLICITLY PROVIDE FOR SHIPMENT OF HOUSEHOLD GOODS REQUIRING OTHER THAN TYPE II, CONEX, OR AIR CARGO CONTAINERS, SO THAT IT WAS NOT CLEAR TO MISSION - MAPAC WHETHER THESE SERVICES, ALLEGED TO BE NEEDED BY THE MARINES, WERE EITHER OVERLOOKED OR INCLUDED IN ANOTHER ITEM. IT IS FURTHER CLAIMED THAT "ITEMS 18 (INBOUND SERVICE) AND 23 (STORAGE) BOTH PROVIDE FOR ESTIMATED ANNUAL QUANTITIES OF SERVICE IN AREAS II AND III WHEN, IN FACT, THE IFB DEFINES SUCH SERVICES SO THAT NONE EXISTS FOR AREAS II AND III." THESE ALLEGATIONS OBVIOUSLY INVOLVE MATTERS EVIDENT FROM THE FACE OF THE INVITATION AND ARE NOT RELATED TO THE BID SUBMITTED BY DEWITT.

MISSION - MAPAC DOES ALLEGE TWO DEFECTS WHICH COULD HAVE BEEN POINTED UP BY THE DEWITT BID. FIRST, IT ASSERTS THAT THE ESTIMATE OF 36,000 GCWT. FOR ITEM 15 (COMPLETE SERVICE, INBOUND HOUSEHOLD GOODS) WAS A "GROSS OVERSTATEMENT OF FANTASTIC PROPORTIONS" WHICH WAS DEMONSTRATED BY DEWITT'S BID OF $.01 PER GCWT., "WHEN, IN FACT, NORMAL OPERATING COSTS WOULD AMOUNT TO APPROXIMATELY $1.00 PER GCWT." THE PROTESTER ALSO ASSERTS THAT DEWITT'S BID OF $.10 PER GCWT. FOR AN ESTIMATED AMOUNT OF 5,000 GCWT. ITEM 22 (INBOUND SERVICE, CONTRACTOR FACILITY - UNACCOMPANIED BAGGAGE) DEMONSTRATES AN ERROR IN THE ESTIMATE BECAUSE THE TRUE COST WOULD BE APPROXIMATELY $1.25 PER GCWT. HOWEVER, WITH RESPECT TO BOTH ITEM, MISSION - MAPAC STATES THAT ITS "RECORDS DISCLOSE THAT THE ESTIMATED ANNUAL QUANTITIES PROVIDED IN THE INSTANT IFB ARE THE SAME QUANTITIES, ALMOST WITHOUT EXCEPTION, THAT HAVE BEEN USED IN SOLICITATION *** IN AT LEAST SIX (6) PRIOR YEARS" AND THAT THIS "EVIDENCES THE MEANINGLESSNESS OF THE FIGURES USED." FURTHERMORE, WITH RESPECT TO ITEM 15, MISSION - MAPAC STATES THAT "THE WAREHOUSE FACILITIES OF THE PRESENT CONTRACTOR ALSO PROVE THAT THE ESTIMATED ANNUAL QUANTITY HAS NO RELATIONSHIP TO ANNUAL NEEDS" SINCE DEWITT'S FACILITIES COULD NOT ACCOMMODATE TOTAL CONTRACT REQUIREMENTS IF THIS ESTIMATE WERE ACCURATE, EVEN THOUGH DEWITT "HAS BEEN ABLE TO SERVICE THE CONTRACT ADEQUATELY IN THE PAST WITH ITS PRESENT WAREHOUSE SPACE." THIS ALONE SUGGESTS THAT MISSION - MAPAC KNOWLEDGE OF DEWITT'S FACILITIES, RATHER THAN DEWITT'S BID ON THE CURRENT INVITATION, PROVIDED A BASIS FOR QUESTIONING THE ITEM 15 ESTIMATE. IN ADDITION, MISSION - MAPAC'S OWN BID INDICATES THAT ITS BIDDING PATTERN WAS SIMILAR TO DEWITT'S. THUS, ON ITEM 15, IT BID $.05 ON THE AREA I REQUIREMENTS AND $.10 ON AREA II AND AREA III REQUIREMENTS, DESPITE ITS ASSERTION THAT $1.00 WOULD BE A MORE APPROPRIATE FIGURE. SIMILARLY, ON ITEM 22, MISSION - MAPAC BID $.10, JUST AS DEWITT DID, EVEN THOUGH IT STATES THAT $1.25 WOULD BE THE APPROXIMATE TRUE COST.

ACCORDINGLY, THE RECORD INDICATES THAT THE VARIOUS DEFECTS COMPLAINED OF WERE OR SHOULD HAVE BEEN APPARENT TO MISSION - MAPAC PRIOR TO BID OPENING. THEREFORE, ITS PROTEST WITH RESPECT TO THE ALLEGED SOLICITATION DEFECTS MUST BE CONSIDERED UNTIMELY. 53 COMP. GEN. 533 (1974).

WE ARE CONCERNED, HOWEVER, THAT SOME OF THE ESTIMATED QUANTITIES APPEAR TO BEAR LITTLE RELATIONSHIP TO ACTUAL REQUIREMENTS OF PREVIOUS YEARS. FOR EXAMPLE, SERVICES REQUIRED BY ITEM 15 (ESTIMATED AT 36,000 GCWT.) TOTALED 5650 GCWT. IN 1972 AND 1980 GCWT. DURING THE FIRST 9 MONTHS OF 1973, WHILE SERVICES REQUIRED BY ITEM 22 (ESTIMATED AT 5,000 GCWT.) TOTALED 367 GCWT. IN 1972 AND 660 GCWT. THROUGH OCTOBER 1, 1973. WHILE THESE ESTIMATES REFLECT REQUIREMENTS FAR IN EXCESS OF NEEDS THAT ACTUALLY DEVELOPED, OTHER ESTIMATES (I.E., ITEMS 4B, 31, AND 33) ARE SUBSTANTIALLY LOWER THAN THE ACTUAL REQUIREMENTS FOR 1972 AND 1973. THE MARINE CORPS IDENTIFIES SEVERAL FACTORS WHICH WERE CONSIDERED IN DETERMINING ESTIMATED REQUIREMENTS (SUCH AS CESSATION OF THE VIETNAM CONFLICT, OCCUPANCY OF QUARTERS NEARING COMPLETION, POSSIBILITY OF INCREASED RETIREMENTS IN THE SOUTHERN CALIFORNIA AREA), AND STATES THAT IN LIGHT OF THESE OFFSETTING FACTORS, IT WAS CONCLUDED "THAT THE BEST OVERALL BASIS FOR ESTABLISHING ESTIMATES *** WAS TO UTILIZE ESTIMATES CONSISTENT WITH THOSE USED IN PRIOR YEARS." WHILE WE AGREE WITH THE CORPS THAT THESE FACTORS DO NOT "AFFORD A PRECISE BASIS FOR PREDICTING FUTURE HOUSEHOLD GOODS MOVEMENTS," WE THINK THAT IT WOULD HAVE BEEN MORE PRUDENT TO GIVE GREATER WEIGHT TO ACTUAL PRIOR YEAR REQUIREMENTS IN DETERMINING 1974 ESTIMATES THAN TO ADOPT THE PREVIOUSLY USED ESTIMATES REGARDLESS OF HOW INACCURATE THEY PROVED TO BE. WE ARE SO ADVISING THE SECRETARY OF THE NAVY.

WITH RESPECT TO DEWITT'S SMALL BUSINESS STATUS, THAT DETERMINATION CAN BE MADE ONLY BY THE SMALL BUSINESS ADMINISTRATION (SBA), AND ITS DECISION IN THIS RESPECT IS CONCLUSIVE UPON FEDERAL PROCURING AGENCIES. 15 U.S.C. 637(B)(6); 44 COMP. GEN. 271 (1964). THE RECORD INDICATES THAT SBA HAS DETERMINED DEWITT TO BE A SMALL BUSINESS FOR THIS PROCUREMENT. ANY APPEAL FROM THAT DETERMINATION MUST GO TO SBA'S SIZE APPEALS BOARD IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1.703(B)(4).

MISSION - MAPAC ALSO CLAIMS THAT THE MARINE CORPS FAILED TO SOLICIT BID EXTENSIONS WHILE THIS PROTEST WAS PENDING, THAT NO BIDDER OTHER THAN MISSION - MAPAC TOOK THE NECESSARY STEPS TO EXTEND ITS BID BEYOND THE EXPIRATION DATE, AND THEREFORE ONLY MISSION - MAPAC NOW HAS A BID WHICH MAY BE ACCEPTED UNDER THE SOLICITATION.

BOTH MISSION - MAPAC AND DEWITT INITIALLY OFFERED A 60 DAY ACCEPTANCE PERIOD EXPIRING ON SATURDAY, JANUARY 12, 1974. THE MARINE CORPS REPORTS THAT ON JANUARY 11, 1974, MISSION - MAPAC EXTENDED ITS BID, BUT THAT DEWITT'S BID WAS NOT EXTENDED UNTIL JANUARY 16, 1974, IN RESPONSE TO THE CONTRACTING OFFICER'S REQUEST OF THAT DATE. THE MARINE CORPS BELIEVES THAT ACCEPTANCE OF DEWITT'S BID, AS EXTENDED, WOULD BE PROPER AND IT PROPOSES TO DO SO.

WE HAVE HELD, AS THE PROTESTER POINTS OUT, THAT A REINSTATED BID SHOULD NOT BE ACCEPTED WHEN TO DO SO WOULD COMPROMISE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. 42 COMP. GEN. 604 (1963); 48 ID. 19 (1968). HOWEVER, AS STATED IN 42 COMP. GEN. 604, SUPRA, THIS DOES NOT MEAN THAT IN THE PROPER CIRCUMSTANCES THE GOVERNMENT MAY NOT ACCEPT A BID, ONCE EXPIRED, WHICH HAS SUBSEQUENTLY BEEN REVIVED BY THE BIDDER. IN 46 COMP. GEN. 371 (1966), THE LOW BIDDER EXTENDED ITS BID ACCEPTANCE PERIOD WHEN REQUESTED TO DO SO 3 DAYS AFTER THE ORIGINAL 60 DAY PERIOD HAD LAPSED. HELD THAT THE BID PROPERLY COULD BE ACCEPTED BECAUSE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WOULD NOT BE COMPROMISED THEREBY AND BECAUSE THERE WOULD BE NO PREJUDICE TO ANOTHER BIDDER WHOSE 60 DAY ACCEPTANCE PERIOD HAD ALSO EXPIRED. WE DISTINGUISHED THAT SITUATION FROM THE ONE IN 42 COMP. GEN. 604, SUPRA, IN WHICH THE LOW BIDDER OFFERED AN ACCEPTANCE PERIOD OF ONLY 20 DAYS WHILE THE SECOND LOW BIDDER OFFERED THE MORE CUSTOMARY 60 DAYS. THERE WE HELD THAT THE LOW BID, WHICH WAS NOT EXTENDED UNTIL MORE THAN 2 WEEKS AFTER EXPIRATION OF THE ORIGINAL 20 DAY PERIOD, SHOULD NOT BE ACCEPTED BECAUSE THE LOW BIDDER "SOUGHT AND GAINED AN ADVANTAGE AFTER BID OPENING IN THE NATURE OF AN OPTION NOT SOUGHT BY OTHER BIDDERS, OF RENEWING ITS BID IN SHORT INCREMENTS OR ALLOWING IT TO LAPSE AS DICTATED BY MARKET CONDITIONS," AND THAT "THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WOULD BEST BE SERVED BY MAKING AN AWARD TO THE SECOND LOW BIDDER." 46 COMP. GEN. 371, 373. MISSION - MAPAC ARGUES THAT OUR CONCLUSION IN 46 COMP. GEN. 371, SUPRA, IS NOT APPLICABLE BECAUSE HERE THE GOVERNMENT HAS ALWAYS HAD A BID (MISSION - MAPAC'S) IT COULD ACCEPT WHILE IN THAT CASE ALL BIDS HAD EXPIRED. IT FURTHER ARGUES THAT ACCEPTANCE OF DEWITT'S BID WOULD VIOLATE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM BECAUSE DEWITT, BY FAILING TO EXTEND ITS BID PRIOR TO EXPIRATION OF THE ACCEPTANCE PERIOD, RELIEVED ITSELF "OF THE BURDEN OF SERVICING THE CONTRACT AT PRICES SET ON 1973 COSTS" AND WOULD HAVE THE OPTION TO RENEW OR NOT TO RENEW ITS BID AS WAS THE CASE IN 42 COMP. GEN. 604, SUPRA.

WE DO NOT THINK THAT ACCEPTANCE OF DEWITT'S BID WOULD COMPROMISE THE COMPETITIVE BIDDING SYSTEM. UNLIKE THE BIDDERS IN 42 COMP. GEN. 604 AND 48 ID. 19, DEWITT DID NOT SEEK ANY ADVANTAGE OVER OTHER BIDDERS. OFFERED THE STANDARD 60 DAY ACCEPTANCE PERIOD RATHER THAN AN UNUSUALLY SHORT ONE. FURHTERMORE, IT IS REASONABLY CLEAR THAT DEWITT INTENDED AND CONSIDERED ITS BID TO BE VIABLE AT LEAST DURING THE PENDENCY OF THIS PROTEST. WE HAVE TAKEN THE POSITION THAT A PROTEST TO THIS OFFICE DURING A BIDDER'S ACCEPTANCE PERIOD COULD BE VIEWED AS TOLLING THE BID ACCEPTANCE PERIOD PENDING RESOLUTION OF THE PROTEST, 50 COMP. GEN. 357 (1970), ALTHOUGH CIRCUMSTANCES MAY INDICATE THAT A PROTESTER DESIRES TO TERMINATE ITS OFFER NOTWITHSTANDING ITS PROTEST. 52 COMP. GEN. 863 (1973). WE HAVE ALSO RECOGNIZED THAT THE INTENTION OF A BIDDER TO EXTEND THE LIFE OF ITS BID MAY BE INDICATED BY THE BIDDER'S COURSE OF ACTION IN DEALING WITH THE CONTRACTING OFFICER EVEN AFTER EXPIRATION OF THE BID. 53 C.G. 737 (1974). HERE DEWITT, THROUGH COUNSEL FILED A LETTER OF OPPOSITION TO MISSION - MAPAC'S PROTEST WITH THIS OFFICE ON DECEMBER 27, 1973, WELL WITHIN THE ORIGINAL BID ACCEPTANCE PERIOD, AND SUBSEQUENTLY FILED ADDITIONAL PAPERS. WE THINK THIS PARTICIPATION IN THE PROTEST IS SUFFICIENT TO INDICATE DEWITT'S INTENTION TO KEEP ITS BID ALIVE AND THAT UNDER THE CIRCUMSTANCES IT MAY BE REGARDED AS HAVING THAT EFFECT. ACCORDINGLY, WE WOULD NOT OBJECT TO AN AWARD TO DEWITT.

IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER COMPLIED WITH ASPR 2.404- 1(C) AND ASPR 2-407.8(B)(1), WHICH REQUIRE CONTRACTING OFFICERS TO REQUEST BID EXTENSIONS FROM THOSE BIDDERS WHICH MIGHT BE IN LINE FOR AWARD WHEN AWARD WILL NOT BE MADE BEFORE EXPIRATION OF THE BIDS. 50 COMP. GEN. 357, SUPRA. WE ARE SUGGESTING, THEREFORE, THAT APPROPRIATE STEPS BE TAKEN TO ASSURE FUTURE COMPLIANCE WITH THESE PROVISIONS.