B-180295, MAR 29, 1974

B-180295, MAR 29, 1974

1. ALTHOUGH BID WAS REMOVED FROM BID BOX TO PERMIT MODIFICATION BEFORE BID OPENING CONTRARY TO ASPR 2-401(A), SUCH VIOLATION DOES NOT REQUIRE CONTRACT CANCELLATION SINCE OTHER BIDDERS WERE PRESENT AND THERE IS NO INDICATION OTHER BIDS WERE REVEALED OR FRAUD WAS INVOLVED. 2. WHERE TWO PREVIOUS SOLICITATIONS FOR SUBJECT PROJECT AS SMALL BUSINESS SET-ASIDES RESULTED IN LOW BID IN EXCESS OF AVAILABLE FUNDING AND THE RECEIPT OF NO BIDS, RESPECTIVELY, GAO WILL NOT OBJECT TO DETERMINATION OF CONTRACTING OFFICER NOT TO SET-ASIDE INSTANT PROCUREMENT SINCE FOREGOING FACTS SUPPORT DETERMINATION THAT NO REASONABLE EXPECTATION EXISTED THAT BIDS WOULD BE RECEIVED FROM SUFFICIENT NUMBER OF SMALL BUSINESSES TO PERMIT AWARD AT REASONABLE PRICE. SEE ASPR 1-706.5(A)(1).

TO L. A. EASTERLING COMPANY, INC.:

INVITATION FOR BIDS (IFB) NO. N62467-72-B-0104 WAS ISSUED OCTOBER 18, 1973, FOR THE PROJECT DESIGNATED AS "CHAPEL AND RELIGIOUS EDUCATIONAL BUILDING, NAVAL CONSTRUCTION BATTALION CENTER, GULFPORT, MISSISSIPPI." 2:00 P.M. ON NOVEMBER 29, 1973, BIDS WERE OPENED, REVEALING GREENHUT CONSTRUCTION COMPANY, PENSACOLA, FLORIDA, TO BE THE LOW BIDDER ON BOTH ITEMS NO. 1 AND 2. A MODIFICATION REDUCING GREENHUT'S PRICE ON ITEM 1 IN THE SUM OF $25,000 HAD RESULTED IN ITS BID BEING LOW ON THAT ITEM.

THE L. A. EASTERLING COMPANY, THE SECOND LOW BIDDER ON ITEM 1, CONTENDS THAT THE MODIFICATION TO GREENHUT'S BID WAS IMPROPERLY PERMITTED SINCE:

1.) THE WATCH OF ONE OF ITS REPRESENTATIVES INDICATED THAT THE MODIFIED BID MAY HAVE BEEN STAMPED AFTER 2:00 P.M. - THE SCHEDULED BID OPENING TIME;

2.) A MEMBER OF THE PROCURING ACTIVITY AIDED GREENHUT PERSONNEL IN MODIFYING ITS BID;

3.) THE BID WAS NOT MODIFIED IN ACCORDANCE WITH THE LATE BIDS, MODIFICATIONS OF BIDS OR WITHDRAWAL OF BIDS PROVISION OF THE IFB;

4.) WHEN THE BID WAS TAKEN FROM THE BID BOX AND HANDED TO THE GREENHUT REPRESENTATIVE FOR MODIFICATION, NO RECEIPT WAS OBTAINED FOR THE RETURNED BID AS REQUIRED;

5.) WHEN THE BID WAS FIRST READ BY THE OFFICER IN CHARGE OF CONSTRUCTION, HE SHOULD HAVE RECOGNIZED AN INFORMALITY IN THAT THE MODIFICATION WAS NOT ENTERED ON BOTH THE ORIGINAL AND DUPLICATE BID FORMS;

6.) THE PROTESTER IS NOT CERTAIN WHETHER THE MODIFICATION WAS MADE BY AN OFFICER OF GREENHUT.

IN ADDITION, THE PROTESTER, AN APPARENT SMALL BUSINESS CONCERN, OBJECTS TO THE SOLICITATION OF BIDS FROM LARGE BUSINESS FIRMS SINCE THE PROTESTER HAD SUBMITTED THE LOW BID FOR THE PROJECT THE PREVIOUS MARCH WHEN IT HAD BEEN SOLICITED UNDER A SMALL BUSINESS SET-ASIDE.

WITH REGARD TO THE SUBMISSION OF THE MODIFICATION TO GREENHUT'S BID, THE RECORD PROVIDED BY THE PROCURING ACTIVITY SHOWS THAT AT 1:53 P.M., NOVEMBER 29, 1973, 7 MINUTES PRIOR TO BID OPENING, A PERSON KNOWN BY THE PROCURING ACTIVITY TO BE A REPRESENTATIVE OF GREENHUT ADVISED THE BID OPENING OFFICER THAT HE DESIRED TO MODIFY THE GREENHUT BID. ACCORDINGLY, THE GREENHUT BID WAS REMOVED FROM THE LOCKED BID BOX AND HANDED TO THE GREENHUT REPRESENTATIVE IN THE PRESENCE OF OTHER BIDDERS ATTENDING THE BID OPENING. THE BID CLERK PRESENTED THE GREENHUT REPRESENTATIVE WITH TAPE TO RESEAL THE BID AFTER THE MODIFICATION WAS EXECUTED. THE BID, AS MODIFIED, WAS RESUBMITTED AND TIME-STAMPED AT 1:58 P.M. THE BID OPENING OFFICER REPORTS THAT IN ACCORDANCE WITH USUAL PROCEDURE FOR BID OPENINGS, CLOCKS, INCLUDING THE TIME-STAMP CLOCK, HAD BEEN CALIBRATED THAT MORNING TO NAVAL OBSERVATORY TIME. THEREFORE THE MODIFICATION WAS DETERMINED TO HAVE BEEN TIMELY RECEIVED.

DURING THE PUBLIC READING OF BIDS AFTER OPENING, THE OFFICER IN CHARGE OF CONSTRUCTION APPARENTLY DID NOT NOTICE THE BID MODIFICATION ("CUT BID ITEM #1 $25,000.00") MADE ON THE GREENHUT BID IMMEDIATELY ABOVE THE PREVIOUSLY INSERTED FIGURE AND READ THE BID FOR ITEM 1 IN THE ORIGINAL AMOUNT OF $867,394.00. THE PRESENCE OF THE BID MODIFICATION WAS THEN CALLED TO HIS ATTENTION AND THE AMOUNT THEREOF WAS RECORDED. IT IS STATED, CONTRARY TO THE PROTESTER'S ALLEGATION, THAT BOTH COPIES OF THE BID FORM CONTAINED THE MODIFICATION.

STANDARD FORM 22, INSTRUCTIONS TO BIDDERS, AT PARAGRAPH 5(D), PROVIDES THAT WRITTEN MODIFICATIONS OF BIDS ALREADY SUBMITTED WILL BE CONSIDERED IF RECEIVED AT THE OFFICE DESIGNATED IN THE IFB BY THE TIME SET FOR OPENING OF BIDS. IN VIEW OF THE FACT THAT THE MODIFIED BID WAS TIME-STAMPED 2 MINUTES PRIOR TO SCHEDULED OPENING BY A CLOCK-MACHINE CALIBRATED TO NAVAL OBSERVATORY TIME THAT VERY DAY, WE CONCLUDE THAT THE MODIFICATION WAS TIMELY.

THE CONTENTION THAT THE BID WAS NOT MODIFIED IN ACCORDANCE WITH THE APPLICABLE PROVISION OF THE IFB APPEARS TO BE BASED UPON THE FACT THAT THE BID WAS REMOVED FROM THE BID BOX AND RETURNED TO THE GREENHUT REPRESENTATIVE FOR MODIFICATION WITHOUT REQUIRING A RECEIPT THEREFOR. WHILE THE PROVISION REFERRED TO DOES REQUIRE A RECEIPT FROM THE BIDDER, THE REQUIREMENT IS DIRECTED TO BIDS WHICH ARE WITHDRAWN PRIOR TO OPENING FROM CONSIDERATION FOR AWARD AND NOT TO MODIFICATIONS OF BIDS.

WE BELIEVE, HOWEVER, THAT THE MANNER IN WHICH THE MODIFICATION WAS EFFECTED WAS CONTRARY TO THE EXPRESS REQUIREMENT OF ARMED SERVICES PROCUREMENT REGULATION 2-401(A) THAT ALL BIDS AND MODIFICATIONS BE KEPT SECURE AND UNOPENED IN A LOCKED BID BOX OR SAFE UNTIL THE TIME SET FOR BID OPENING HAS ARRIVED. RATHER THAN REMOVING THE BID FROM THE LOCKED BID BOX FOR THE PURPOSE OF MODIFYING IT, THE GREENHUT REPRESENTATIVE SHOULD HAVE BEEN ADVISED TO SUBMIT THE MODIFICATION ON A SEPARATE PAPER IN A SEALED ENVELOPE. NEVERTHELESS, WE DO NOT BELIEVE THAT SUCH VIOLATION REQUIRES CANCELLATION OF THE CONTRACT IN THE INSTANT CASE BECAUSE OTHER BIDDERS WERE PRESENT AT THE TIME OF THE OCCURRENCE AND THERE IS NO INDICATION THAT THE CONTENTS OF OTHER BIDS WERE REVEALED OR THAT ANY FRAUDULENT PURPOSE WAS INVOLVED.

CONCERNING THE ALLEGATION THAT THE MODIFICATION APPEARED ON ONLY ONE OF THE BID FORMS, AS NOTED ABOVE, THE PROCURING ACTIVITY STATES THAT BOTH COPIES OF THE BID FORM CONTAINED THE MODIFICATION. FURTHERMORE, THERE IS NO REQUIREMENT THAT MODIFICATIONS APPEAR ON THE BID FORM. BOTH THE APPLICABLE IFB PROVISION AND REGULATION CONTEMPLATE AND PERMIT WRITTEN OR TELEGRAPHIC MODIFICATIONS APART FROM THE BID.

THE RECORD CONFIRMS THE PROTESTER'S STATEMENT THAT THE REQUIREMENT WAS ORIGINALLY SOLICITED AS A SMALL BUSINESS SET-ASIDE. HOWEVER, THE PROTESTER SUBMITTED A LOW BID IN EXCESS OF THE FUNDS AVAILABLE. THEREFORE, THE SOLICITATION WAS CANCELED. ALTHOUGH THE PROJECT WAS THEN REDESIGNED TO REDUCE COSTS AND READVERTISED UNDER A SMALL BUSINESS SET- ASIDE, NO BIDS WERE RECEIVED. THEREFORE, IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-706.8, THE SET-ASIDE WAS AUTOMATICALLY DISSOLVED AND, WITH THE CONCURRENCE OF THE SMALL BUSINESS ADMINISTRATION, THE PROCUREMENT WAS OPENED FOR COMPETITION TO FIRMS WITHOUT RESTRICTION AS TO SIZE IN AN ATTEMPT TO OBTAIN MORE COMPETITION. IT IS STATED THAT SUCH ACTION WAS TAKEN BECAUSE THERE WAS NO REASONABLE EXPECTATION THAT BIDS WOULD BE RECEIVED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESSES SO THAT AWARD COULD BE MADE AT A REASONABLE PRICE, CITING ASPR 1-706.5(A)(1).

IT IS CLEAR THAT IN THE CIRCUMSTANCES REFERRED TO ABOVE, THE CITED REGULATIONS AUTHORIZED THE AGENCY'S ACTION IN SOLICITING THE REQUIREMENT ON AN UNRESTRICTED BASIS. THEREFORE, THERE IS NO BASIS FOR OUR OFFICE TO OBJECT TO SUCH ACTION.

ACCORDINGLY, THE PROTEST IS DENIED.