B-180392, MAY 6, 1974

B-180392: May 6, 1974

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BIDDER WHOSE TELEGRAPHIC MODIFICATION MAKING BID LOW WAS UNTIMELY RECEIVED BY PROCURING ACTIVITY SPECIFIED IN IFB BECAUSE COMMUNICATION CENTER IN STATE AGENCY ADJOINGING PROCURING ACTIVITY'S BUILDING DID NOT DELIVER MODIFICATION BEFORE BID OPENING IS NOT ENTITLED TO LOSS OF ANTICIPATED PROFIT AND BID PREPARATION COSTS. SINCE THERE IS NO LEGAL BASIS FOR ALLOWING ANY UNSUCCESSFUL BIDDER TO RECOVER ANTICIPATED PROFIT AND THERE IS NO INDICATION THAT BIDS WERE SOLICITED IN BAD FAITH OR CONTRACTING OFFICER ACTED ARBITRARILY OR CAPRICIOUSLY IN REJECTING MODIFICATION. INASMUCH AS THERE WAS NO MISHANDLING OF LATE MODIFICATION BY PROCURING ACTIVITY AS CONTEMPLATED IN INSTRUCTIONS TO BIDDERS AS CONDITION FOR CONSIDERATION.

B-180392, MAY 6, 1974

BIDDER WHOSE TELEGRAPHIC MODIFICATION MAKING BID LOW WAS UNTIMELY RECEIVED BY PROCURING ACTIVITY SPECIFIED IN IFB BECAUSE COMMUNICATION CENTER IN STATE AGENCY ADJOINGING PROCURING ACTIVITY'S BUILDING DID NOT DELIVER MODIFICATION BEFORE BID OPENING IS NOT ENTITLED TO LOSS OF ANTICIPATED PROFIT AND BID PREPARATION COSTS, SINCE THERE IS NO LEGAL BASIS FOR ALLOWING ANY UNSUCCESSFUL BIDDER TO RECOVER ANTICIPATED PROFIT AND THERE IS NO INDICATION THAT BIDS WERE SOLICITED IN BAD FAITH OR CONTRACTING OFFICER ACTED ARBITRARILY OR CAPRICIOUSLY IN REJECTING MODIFICATION, INASMUCH AS THERE WAS NO MISHANDLING OF LATE MODIFICATION BY PROCURING ACTIVITY AS CONTEMPLATED IN INSTRUCTIONS TO BIDDERS AS CONDITION FOR CONSIDERATION.

TO MACK ELECTRIC COMPANY:

INVITATION FOR BIDS (IFB) DAHA 23-73-B0629, ISSUED BY THE UNITED STATES PROPERTY AND FISCAL OFFICER FOR MISSOURI (USPFO), JEFFERSON CITY, MISSOURI, SOLICITED BIDS FOR THE REHABILITATION OF THE PRIMARY AND SECONDARY ELECTRICAL SYSTEMS AT ROBERTSON AIR NATIONAL GUARD BASE, MISSOURI AIR NATIONAL GUARD, ST. LOUIS, MISSOURI. THE IFB, AS AMENDED, SCHEDULED THE BID OPENING FOR 2:00 P.M., JUNE 15, 1973.

THE THREE BIDS OPENED AT THAT TIME WERE:

SACHS ELECTRIC COMPANY $760,000

MACK ELECTRIC COMPANY (MACK) $694,944

LOUIS PAYNE ELECTRIC COMPANY, INC. (PAYNE) $654,200

PAYNE SUBSEQUENTLY REDUCED ITS BID BY $40,000.

SHORTLY BEFORE BID OPENING, USPFO CALLED WESTERN UNION TO ASCERTAIN WHETHER THERE WERE ANY UNDELIVERED TELEGRAPHIC BID MODIFICATIONS. NEGATIVE RESPONSE WAS RECEIVED. AT ABOUT 3:00 P.M., MACK TELEPHONED TO ASCERTAIN THE RESULTS OF THE BID OPENING. WHEN IT WAS NOTIFIED THAT PAYNE WAS THE LOW BIDDER AT $654,200, MACK STATED THAT IT HAD TRANSMITTED A TELEGRAPHIC MODIFICATION WHICH REDUCED ITS BID PRICE BY $60,944 WHICH MADE IT THE LOW BIDDER. WESTERN UNION HAS STATED THAT IT RECEIVED THE TELEGRAM AT 9:46 A.M., JUNE 15, 1973, AND AT 10:45 A.M., TRANSMITTED IT OVER TELEX LINES TO THE ADJUTANT GENERAL'S OFFICE, MISSOURI NATIONAL GUARD, WHICH RECEIVED IT ON BEHALF OF USPFO. HOWEVER, THE TELEGRAM WAS NOT FORWARDED TO USPFO UNTIL AFTER MACK'S INQUIRY CONCERNING THE BID RESULTS. THE CONTRACTING OFFICER HAS REPORTED THAT PRIOR TO THE IMMEDIATE SITUATION, WESTERN UNION HAD ALWAYS DELIVERED TELEGRAMS ADDRESSED TO USPFO DIRECTLY TO USPFO BY MESSENGER.

AWARD WAS MADE TO PAYNE FOR $614,200. BY LETTER DATED DECEMBER 28, 1973, THE ATTORNEYS FOR MACK SUBMITTED A CLAIM TO OUR OFFICE FOR $62,749.95, OF WHICH $2,749.95 WAS FOR BID PREPARATION COSTS AND $60,000 WAS FOR THE ANTICIPATED PROFIT LOST BECAUSE OF USPFO'S FAILURE TO AWARD THE CONTRACT TO MACK.

BID PREPARATION COSTS ARE NOT RECOVERABLE UNLESS IT CAN BE DEMONSTRATED THAT THE ACTIONS OF THE PROCUREMENT AGENCY WERE IN BAD FAITH, ARBITRARY OR CAPRICIOUS. SEE HEYER PRODUCTS CO. V. UNITED STATES, 140 F. SUPP. 409 (1956); KECO INDUSTRIES, INC. V. UNITED STATES, 428 F.2ND 1233 (1970), FURTHER CONSIDERED IN U.S. CT. CL. NO. 173-69, DECIDED FEBRUARY 20, 1974. IN ANY EVENT, THERE IS NO LEGAL BASIS FOR ALLOWING ANY UNSUCCESSFUL BIDDER TO RECOVER ANTICIPATED PROFIT. SEE HEYER PRODUCTS CO. V. UNITED STATES, SUPRA; KECO INDUSTRIES, INC. V. UNITED STATES, SUPRA.

THE IFB INCLUDED STANDARD FORM 22 (SF22), "INSTRUCTIONS TO BIDDERS." PARAGRAPH 7 OF SF22 STATES IN PERTINENT PART:

"(A) BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF BIDS WILL NOT BE CONSIDERED UNLESS: (1) THEY ARE RECEIVED BEFORE AWARD IS MADE; AND EITHER (2) THEY ARE SENT BY REGISTERED MAIL, OR BY CERTIFIED MAIL ***; OR (3) IF SUBMITTED BY MAIL (OR BY TELEGRAM IF AUTHORIZED), IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION:"

THIS PARAGRAPH CLEARLY PRECLUDES CONSIDERATION OF LATE TELEGRAPHIC BID MODIFICATIONS UNLESS THEY ARE RECEIVED PRIOR TO AWARD AND DELAY WAS DUE SOLELY TO MISHANDLING BY GOVERNMENT PERSONNEL AFTER RECEIPT OF THE TELEGRAM AT THE GOVERNMENT INSTALLATION.

IN THE PRESENT CASE, THERE IS NO EVIDENCE THAT THE DELAY IN USPFO RECEIVING THE TELEGRAPHIC BID MODIFICATION WAS THE RESULT OF MISHANDLING BY UNITED STATES EMPLOYEES. IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE ADJUTANT GENERAL IS A STATE OFFICIAL AND ALL EMPLOYEES IN THE ADJUTANT GENERAL'S COMMUNICATION CENTER IN WHICH THE TELEGRAPHIC MODIFICATION WAS RECEIVED ARE EMPLOYEES OF THE STATE. ALSO, THE FACT THAT THE TELEX MACHINE IS IN AN ADJOINING BUILDING TO USPFO AND THAT MILITARY MESSAGES ARE CUSTOMARILY RECEIVED FOR USPFO ON THAT MACHINE, DOES NOT CONSTITUTE THE COMMUNICATION CENTER A GOVERNMENT INSTALLATION WITHIN THE MEANING OF PARAGRAPH 7, SUPRA. SEE B-173593, SEPTEMBER 22, 1971, WHEREIN IT WAS STATED, "IT IS CLEAR THAT THE PARAGRAPH HAS REFERENCE TO MISHANDLING BY THE PROCUREMENT ACTIVITY IDENTIFIED IN THE SOLICITATION AS THE PLACE FOR RECEIPT OF BIDS." IN THAT REGARD, THE PROCUREMENT ACTIVITY SPECIFIED FOR RECEIPT OF BIDS IN THE IFB WAS USPFO AT 1715 INDUSTRIAL DRIVE AND NOT THE ADJUTANT GENERAL'S OFFICE LOCATED AT 1717 INDUSTRIAL DRIVE, WHERE THE COMMUNICATION CENTER WAS SITUATED.

THERE IS NO EVIDENCE IN THE RECORD THAT BIDS WERE SOLICITED IN BAD FAITH OR THAT THE ACT OF THE CONTRACTING OFFICER IN REJECTING THE MACK TELEGRAPHIC MODIFICATION WAS ARBITRARY OR CAPRICIOUS. ACCORDINGLY, THE MACK CLAIM IS DENIED.