B-182530, NOV 19, 1974

B-182530: Nov 19, 1974

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BID ACCOMPANIED BY LETTER FROM BIDDER CITING BID ON PROCUREMENT IN QUESTION AND TAKING EXCEPTION TO DEFAULT PROVISION IN IFB IN THAT IT STATED BIDDER CANNOT BE RESPONSIBLE FOR SUPPLIER DELAYS IS NONRESPONSIVE. SIX BIDS WERE RECEIVED AND OPENED ON OCTOBER 22. THE LOW BID WAS SUBMITTED BY MONTAGUE-BETTS COMPANY. M-B'S BID WAS ACCOMPANIED BY A LETTER WHICH STATED IN PERTINENT PART. DELIVERY OF THE STRUCTURAL STEEL AND OTHER ITEMS INCLUDED IN THIS BID IS CONDITIONAL ON RECEIPT OF MATERIAL FROM OUR NORMAL MILL AND SUPPLIER SOURCES. SINCE THE SAME ISSUES AND PARTIES ARE INVOLVED IN BOTH THE ARCHITECT OF THE CAPITOL'S REQUEST FOR AN ADVANCE DECISION AND ROANOKE'S PROTEST. WE ARE CONSIDERING THE MATTER IN A SINGLE DECISION.

B-182530, NOV 19, 1974

BID ACCOMPANIED BY LETTER FROM BIDDER CITING BID ON PROCUREMENT IN QUESTION AND TAKING EXCEPTION TO DEFAULT PROVISION IN IFB IN THAT IT STATED BIDDER CANNOT BE RESPONSIBLE FOR SUPPLIER DELAYS IS NONRESPONSIVE, SINCE CONTRACT AWARDED WOULD NOT BE CONTRACT OFFERED ALL BIDDERS.

MONTAGUE-BETTS COMPANY, INCORPORATED:

ON SEPTEMBER 30, 1974, THE OFFICE OF THE ARCHITECT OF THE CAPITOL INVITED COMPETITIVE BIDS UNDER INVITATION FOR BIDS (IFB) NO. 7515 FOR THE PROCUREMENT OF FABRICATED STRUCTURAL STEEL FOR A NEW REFRIGERATION PLANT FOR THE CAPITOL COMPLEX, TO BE ERECTED UNDER THE CAPITOL POWER PLANT MODIFICATIONS AND ENLARGEMENT PROJECT. SIX BIDS WERE RECEIVED AND OPENED ON OCTOBER 22, 1974.

THE LOW BID WAS SUBMITTED BY MONTAGUE-BETTS COMPANY, INCORPORATED (M B), IN THE AMOUNT OF $224,200. HOWEVER, M-B'S BID WAS ACCOMPANIED BY A LETTER WHICH STATED IN PERTINENT PART,

SUBJECT: BID FOR FABRICATED STRUCTURAL STEEL

NEW REFRIGERATION PLANT

CAPITOL POWER PLANT

WASHINGTON, D.C.

GENTLEMEN:

PURSUANT TO OUR BID FOR FABRICATED STRUCTURAL STEEL FOR THE NEW REFRIGERATION PLANT FOR THE CAPITOL POWER PLANT, WE WOULD LIKE TO DISCUSS THE FOLLOWING:

1. DELIVERY OF THE STRUCTURAL STEEL AND OTHER ITEMS INCLUDED IN THIS BID IS CONDITIONAL ON RECEIPT OF MATERIAL FROM OUR NORMAL MILL AND SUPPLIER SOURCES. WE CANNOT BE RESPONSIBLE FOR DELAYS IN DELIVERY OF STEEL OR AGENCY ITEMS DUE TO STRIKE OR SOURCE CONDITIONS."

IN LIGHT OF THIS LETTER, THE ARCHITECT OF THE CAPITOL HAS REQUESTED AN ADVANCE DECISION FROM OUR OFFICE AS TO WHETHER THE BID OF M-B CAN BE ACCEPTED.

SUBSEQUENT TO THE ARCHITECT OF THE CAPITOL'S REQUEST, OUR OFFICE RECEIVED A PROTEST FROM ROANOKE IRON AND BRIDGE WORKS (ROANOKE) ACCOMPANYING THE BID.

SINCE THE SAME ISSUES AND PARTIES ARE INVOLVED IN BOTH THE ARCHITECT OF THE CAPITOL'S REQUEST FOR AN ADVANCE DECISION AND ROANOKE'S PROTEST, WE ARE CONSIDERING THE MATTER IN A SINGLE DECISION.

M-B ASSERTS TWO CONTENTIONS AS TO WHY ITS BID SHOULD NOT BE CONSIDERED AS HAVING BEEN QUALIFIED. FIRST, M-B CONTENDS THAT WHILE THE OCTOBER 22 LETTER WAS ENCLOSED WITH THE BID, THE BID FORM WAS NOT ALTERED IN ANY MANNER. SECOND, M-B STATES THAT THE LETTER WAS ONLY A "REQUEST TO DISCUSS" SEVERAL MATTERS, BUT IN NO WAY STATED OR IMPLIED THAT ANY RESULTANT DISCUSSION WAS MANDATORY.

TO DETERMINE THE RESPONSIVENESS OF A BID SUBMITTED, THE CONTRACTING OFFICER MUST EXAMINE ALL STATEMENTS CONTAINED WITHIN THE BID. THE OCTOBER 22 LETTER CITED ABOVE WAS WRITTEN ON M-B'S COMPANY STATIONERY, SPECIFICALLY REFERRED TO THE BID ON THE PROCUREMENT IN QUESTION, BORE THE SAME DATE, AND WAS SIGNED BY THE SAME INDIVIDUAL WHO EXECUTED THE BID. ACCORDINGLY, THE OCTOBER 2 LETTER, ALTHOUGH A SEPARATE DOCUMENT, WAS ENCLOSED WITH THE BID, SPECIFICALLY MADE REFERENCE TO THE BID, AND THEREFORE, BECAME A PART THEREOF. B-163934, MAY 17, 1968.

SINCE THE TYPEWRITTEN CONDITIONS OF M-B'S LETTER WERE AN INTEGRAL PORTION OF THE BID, IF THE BID WERE ACCEPTED THEY WOULD TAKE PRECEDENCE OVER THE PROVISIONS PRINTED IN THE FORMAL GOVERNMENT CONTRACT AND UNDER WELL- ESTABLISHED PRINCIPLES OF LAW, THEY WOULD CONTROL THE GOVERNMENT'S RIGHT IN THE MATTER. 36 COMP. GEN. 535, 539 (1957). THEREFORE, THE CRITICAL ISSUE FOR RESOLUTION OF THIS DISPUTE IS WHAT EFFECT IF ANY, THE OCTOBER 2I LETTER HAD ON THE STATED TERMS FOR THIS PROCUREMENT.

THE CLAUSE RELATIVE TO EXCUSABLE CAUSES OF DEFAULT IN THIS CASE IS SECTION 11.3 OF THE "GENERAL PROVISIONS" WHICH PROVIDES:

"IF THE FAILURE TO PERFORM IS CAUSED BY THE DEFAULT OF A SUBCONTRACTOR, AND IF SUCH DEFAULT ARISES OUT OF CAUSES BEYOND THE CONTROL OF BOTH THE CONTRACTOR AND THE SUBCONTRACTOR, AND WITHOUT THE FAULT OR NEGLIGENCE OF EITHER OF THEM, THE CONTRACTOR SHALL NOT BE LIABLE FOR ANY EXCESS COSTS FOR FAILURE TO PERFORM, UNLESS THE SUPPLIES OR SERVICES TO BE FURNISHED BY THE SUBCONTRACTOR WERE OBTAINABLE FROM OTHER SOURCES IN SUFFICIENT TIME TO PERMIT THE CONTRACTOR TO MEET THE REQUIRED DELIVERY SCHEDULE."

THE CAUSES SPECIFIED NOT ONLY MUST BE BEYOND THE CONTROL OF THE CONTRACTOR AND SUBCONTRACTOR BUT MUST BE WITHOUT THE FAULT OR NEGLIGENCE OF EITHER OF THEM AND NOT OBTAINABLE FROM OTHER SOURCES IN SUFFICIENT TIME TO PERMIT THE CONTRACTOR TO MEET THE REQUIRED DELIVERY SCHEDULE. THESE THREE CONDITIONS MUST CONCUR TO AFFORD A CONTRACTOR IMMUNITY FROM LIABILITY FOR FAILURE TO PERFORM THE CONTRACT.

HOWEVER, UNDER THE DELIVERY CLAUSE IN M-B'S OCTOBER 22 LETTER, IT WOULD NOT BE NECESSARY THAT THE CAUSE OF DEFAULT BE WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, NOR WOULD THE CONTRACTOR HAVE TO SEEK THE MATERIALS FROM SOURCES OTHER THAN ITS "NORMAL MILL AND SUPPLIER SOURCES." THUS, IT IS READILY APPARENT THAT THE LETTER HAS LIMITED THE LIABILITY OF THE DEFAULT CLAUSE IN THE SOLICITATION. MOREOVER, THE FACT THAT THE LETTER ONLY REQUESTED DISCUSSION OF CERTAIN TERMS OF THE IFB IS NEGATED BY THE TENOR OF THE LETTER, WHICH DISCLOSES THAT M-B HAD NO INTENTION OF BEING BOUND BY THE DEFAULT PROVISION OF THE IFB.

IT IS A FUNDAMENTAL RULE OF GOVERNMENT PROCUREMENT THAT ALL BIDDERS MUST COMPETE FOR ADVERTISED CONTRACTS ON A COMMON BASIS. BIDDERS HAVE A RIGHT TO ASSUME THAT THE ESSENTIAL REQUIREMENTS OF AN INVITATION GOING TO THE PRICE, QUALITY, QUANTITY, OR DELIVERY PROVISIONS OF A CONTRACT ARE THE SAME FOR ALL BIDDERS. 46 COMP. GEN. 275, 277 (1966) AND 30 ID. 79 (1950). WHERE ONE BIDDER RESERVES RIGHTS AND IMMUNITIES FROM RESPONSIBILITY FOR BREACH NOT EXTENDED TO ALL BIDDERS BY THE ADVERTISED CONDITIONS AND SPECIFICATIONS, IT IS CLEAR THAT A CONTRACT AWARDED UPON THE BASIS OF SUCH A BID WOULD NOT BE THE CONTRACT OFFERED TO ALL PROSPECTIVE BIDDERS. FURTHER, OUR OFFICE HAS CONSISTENTLY HELD THAT DEVIATIONS FROM THE DEFAULT PROVISIONS OF AN IFB RENDER THE BID NONRESPONSIVE. MATTER OF E.M. GOSTOVICH CONSTRUCTION COMPANY, B 180362, FEBRUARY 14, 1974; B-160698, FEBRUARY 28, 1967.

IN THE CIRCUMSTANCES, THE CHANGE IN THE LETTER WAS A MATERIAL DEVIATION THAT RENDERED THE M-B BID NONRESPONSIVE. WHILE WE CAN FULLY APPRECIATE THE CURRENT ECONOMIC SITUATION AND ITS EFFECT ON A GOVERNMENT CONTRACTOR, ANY SUGGESTIONS FOR THEIR IMPROVEMENT SHOULD BE MADE KNOWN PRIOR TO THE TIME FOR BID SUBMISSION, SINCE INCLUSION OF THIS TYPE OF SUGGESTION IN THE BID MAY WELL RENDER IT QUALIFIED AND NONRESPONSIVE, AS IS THE CASE HERE.

ACCORDINGLY, IT IS OUR DECISION THAT THE ARCHITECT OF THE CAPITOL SHOULD NOT CONSIDER M-B'S BID FOR AWARD. THEREFORE, THE PROTEST OF ROANOKE IS SUSTAINED.