B-218042.2, MAR 11, 1985, 85-1 CPD 295

B-218042.2, MAR 11, 1985, 85-1 CPD 295

ESTOPPEL - AGAINST GOVERNMENT - NOT ESTABLISHED - PRIOR ERRONEOUS ADVICE, CONTRACT ACTION, ETC. DIGEST: 1. AN ESTOPPEL WILL NOT BE FOUND AGAINST THE GOVERNMENT UNLESS THE GOVERNMENT EMPLOYEE OR AGENT, UPON WHOSE ERRONEOUS REPRESENTATIONS THE PARTY ASSERTING THE ESTOPPEL RELIED UPON TO ITS DETRIMENT, WAS ACTING WITHIN THE SCOPE OF HIS AUTHORITY. THEREFORE, AN ESTOPPEL IS NOT FOUND HERE SINCE THE CONTRACTING AGENCY'S EMPLOYEE, WHO ERRONEOUSLY ADVISED THE PROTESTER THAT THE AGENCY WOULD CONSIDER THE PROTESTER'S OFFER OF A PROMPT PAYMENT DISCOUNT IN EVALUATING THE FIRM'S BID, COULD NOT AUTHORIZE THE CONSIDERATION OF SUCH DISCOUNTS IN EVALUATING BIDS AS THAT IS NOW EXPRESSLY PROHIBITED BY THE FEDERAL ACQUISITION REGULATION (FAR), WHICH HAS THE FORCE AND EFFECT OF LAW. ESTOPPEL - AGAINST GOVERNMENT - NOT ESTABLISHED - PRIOR ERRONEOUS ADVICE, CONTRACT ACTION, ETC. 2. AN ESTOPPEL CANNOT BE SUCCESSFULLY RAISED WHERE THE PROTESTER, ALTHOUGH LACKING ACTUAL KNOWLEDGE OF THE REGULATORY PROHIBITION AGAINST A CONTRACTING AGENCY'S CONSIDERATION OF PROMPT PAYMENT DISCOUNTS IN EVALUATING BIDS, IS NONETHELESS HELD TO BE ON CONSTRUCTIVE NOTICE OF THE PROHIBITION BY MEANS OF THE PUBLICATION OF THE APPLICABLE SECTION OF THE FAR IN THE FEDERAL REGISTER.

TRI-STATE LAUNDRY SERVICES, INC. D/B/A HOLZBERG'S LAUNDERERS AND CLEANERS -- REQUEST FOR RECONSIDERATION:

TRI-STATE LAUNDRY SERVICES, INC. D/B/A HOLZBERG'S LAUNDERERS AND CLEANERS (TRI-STATE) REQUESTS RECONSIDERATION OF OUR DECISION, TRI STATE LAUNDRY SERVICES, INC. D/B/A HOLZBERG'S LAUNDERERS AND CLEANERS, B-218042, FEB. 1, 1985, 85-1 CPD PARA. ---, IN WHICH WE DISMISSED TRI STATE'S PROTEST COMPLAINING THAT THE FIRM HAD OFFERED A PROMPT PAYMENT DISCOUNT UNDER INVITATION FOR BIDS (IFB) NO. IFB-130-022-5, ISSUED BY THE BUREAU OF PRISONS, IN RELIANCE UPON ERRONEOUS ORAL ADVICE FROM A MEMBER OF THE CONTRACTING OFFICER'S STAFF THAT THE AGENCY WOULD CONSIDER A 20-DAY DISCOUNT PERIOD IN EVALUATING BIDS. TRI-STATE, WHOSE BID WOULD HAVE BEEN LOW IF ITS OFFERED DISCOUNT HAD BEEN CONSIDERED, URGED THAT THE GOVERNMENT WAS BOUND BY THE REPRESENTATION OF ITS EMPLOYEE AND THAT THE FIRM WAS THEREFORE ENTITLED TO THE AWARD AS THE LOW BIDDER. IN THE ALTERNATIVE, TRI-STATE URGED THAT THE ERRONEOUS ADVICE NECESSITATED A RECOMPETITION.

WE DISMISSED THE PROTEST WITHOUT REQUIRING AN AGENCY REPORT BECAUSE WE DETERMINED THAT THE PROTEST ON ITS FACE DID NOT STATE A VALID BASIS FOR PROTEST. SEE GAO BID PROTEST REGULATIONS, SEC. 21.3(F), 49 FED.REG. 49,417, 49,421 (1984) (TO BE CODIFIED AT 4 C.F.R. SEC. 21.3(F)). THE DECISION NOTED THAT THE FEDERAL ACQUISITION REGULATION (FAR), IN ACCORD WITH THE FINAL REVISIONS OF THE NOW-SUPERSEDED FEDERAL PROCUREMENT REGULATIONS, PROHIBITS THE GOVERNMENT FROM CONSIDERING PROMPT PAYMENT DISCOUNTS WHEN EVALUATING BIDS. SEE FAR, 48 C.F.R. SEC. 14.407-3 (1984). THEREFORE, WE CONCLUDED THAT TRI-STATE COULD NOT SUCCESSFULLY ARGUE EITHER THAT IT HAD NO KNOWLEDGE OF THIS PROHIBITION, OR THAT THE AGENCY WOULD BE ACTING PROPERLY IN NOW CONSIDERING THE DISCOUNT, SINCE PUBLICATION OF THE APPLICABLE FAR SECTION IN THE FEDERAL REGISTER HAD PLACED TRI-STATE, A MEMBER OF THE CONTRACTING COMMUNITY, ON AT LEAST CONSTRUCTIVE NOTICE OF THE PROHIBITION.

FURTHERMORE, SINCE WE ASSUMED THAT THE IFB CONTAINED THE STANDARD CLAUSE REQUIRED BY FAR, 48 C.F.R. SEC. 14.201-6(C)(2), WHICH CAUTIONS BIDDERS FROM RELYING UPON ORAL EXPLANATIONS OR INSTRUCTIONS FROM CONTRACTING AGENCY PERSONNEL, IT WAS OUR VIEW THAT THE FIRM HAD NO BASIS TO PROTEST SINCE IT HAD DISREGARDED THAT CAUTION TO ITS PERIL BY ACTING UPON ORAL ADVICE WHICH LATER PROVED TO BE ERRONEOUS. WE NOTED IN THIS REGARD THE WELL-SETTLED RULE THAT ERRONEOUS ADVICE FROM CONTRACTING PERSONNEL GENERALLY NEITHER BINDS THE GOVERNMENT NOR REQUIRES A RECOMPETITION. JENSEN CORP., 60 COMP.GEN. 543 (1981), 81-1 CPD PARA. 524.

TRI-STATE REQUESTS RECONSIDERATION OF OUR FEBRUARY 1 DECISION ON THE GROUNDS THAT THE BUREAU OF PRISONS IS ESTOPPED, UNDER GENERAL PRINCIPLES OF AGENCY LAW, FROM DENYING THAT ITS EMPLOYEE, WITH THE APPARENT AUTHORITY TO DO SO, REPRESENTED THAT PROMPT PAYMENT DISCOUNTS WOULD BE CONSIDERED IN EVALUATING BIDS. THUS, TRI-STATE URGES THAT THE AGENCY IS BOUND BY THAT REPRESENTATION AND MUST CONSIDER ITS OFFERED DISCOUNT SO AS TO MAKE IT THE LOW BIDDER. IN ADDITION, TRI-STATE CONTENDS THAT THE AGENCY ACTED IMPROPERLY BY NOT FURNISHING THE ERRONEOUS INFORMATION CONCERNING THE CONSIDERATION OF DISCOUNTS TO THE OTHER BIDDERS.

THE FEDERAL GOVERNMENT IS NOT SUBJECT TO THE SAME RULES OF ESTOPPEL AS ARE PRIVATE PARTIES. UNITED STATES V. CALIFORNIA, 332 U.S. 19 (1947); UTAH POWER & LIGHT CO. V. UNITED STATES, 243 U.S. 389 (1917). IN THOSE CASES WHERE ESTOPPEL HAS BEEN FOUND AGAINST THE GOVERNMENT, ONE THRESHOLD ELEMENT THAT MUST BE PRESENT IS THAT THE GOVERNMENT EMPLOYEE OR AGENT, UPON WHOSE REPRESENTATIONS THE PARTY ASSERTING THE ESTOPPEL RELIED TO ITS DETRIMENT, MUST HAVE BEEN ACTING WITHIN THE SCOPE OF HIS AUTHORITY. UNITED STATES V. GEORGIA-PACIFIC COMPANY, 421 F.2D 92 (9TH CIR. 1970). HERE, IT IS OBVIOUS THAT THIS ELEMENT NECESSARY TO ESTABLISH AN ESTOPPEL IS MISSING, SINCE THE AGENCY'S EMPLOYEE COULD NOT AUTHORIZE THE CONSIDERATION OF PROMPT PAYMENT DISCOUNTS IN EVALUATING BIDS BECAUSE THAT IS PROHIBITED BY THE PROCUREMENT REGULATIONS WHICH HAVE THE FORCE AND EFFECT OF LAW. SEE A.D. ROE COMPANY, INC., 54 COMP.GEN. 271 (1974), 74-2 CPD PARA. 194.

FURTHERMORE, IT IS A SETTLED LEGAL PRINCIPLE THAT THE PARTY ASSERTING AN ESTOPPEL MUST HAVE LACKED KNOWLEDGE OF THE TRUE FACTS, AND HAVE LACKED THE MEANS TO ASCERTAIN THOSE FACTS. UNITED STATES V. HAL B. HAYES & ASSOCIATES, INC., 221 F.SUPP. 260 (N.D. CAL. 1963). IN THIS REGARD, A PARTY COULD NOT SUCCESSFULLY RAISE AN ESTOPPEL AGAINST THE GOVERNMENT WHERE THAT PARTY, ALTHOUGH LACKING ACTUAL KNOWLEDGE OF A REGULATION MATERIAL TO THE CONTROVERSY, WAS NONETHELESS HELD TO BE ON CONSTRUCTIVE NOTICE OF THAT REGULATION BY MEANS OF ITS PUBLICATION IN THE FEDERAL REGISTER. FEDERAL CROP INS. CORP. V. MERRILL, 332 U.S. 380 (1947). THE FACTS OF THE PRESENT MATTER ARE NO DIFFERENT.

WE ALSO DO NOT AGREE WITH TRI-STATE'S ASSERTION THAT THE AGENCY ACTED IMPROPERLY BY NOT PROVIDING THE ERRONEOUS ADVICE THAT ITS EMPLOYEE GAVE THE FIRM TO THE OTHER BIDDERS. WE ASSUME THAT TRI-STATE IS IMPLYING BY THIS ARGUMENT THAT THE AGENCY WAS UNDER A DUTY TO PLACE ALL BIDDERS ON AN EQUAL, IF MISTAKEN, FOOTING. THIS ARGUMENT IS RAISED FOR THE FIRST TIME ON RECONSIDERATION, AND WE DOUBT ITS TIMELINESS BECAUSE IT APPEARS TO BE AN ISSUE OF WHICH TRI-STATE SHOULD HAVE BEEN AWARE AT THE TIME IT FILED THE ORIGINAL PROTEST. SEE GAO BID PROTEST REGULATIONS, SEC. 21.2(A)(2), 49 FED.REG. AT 49,420 (TO BE CODIFIED AT 4 C.F.R. SEC. 21.2(A)(2)). QUESTIONS OF TIMELINESS ASIDE, HOWEVER, WE HARDLY THINK THAT THE REQUIREMENT OF THE FAR, 48 C.F.R. SEC. 14.208(C), THAT AGENCIES PROMPTLY FURNISH INFORMATION PROVIDED TO ONE PROSPECTIVE BIDDER TO ALL OTHER PROSPECTIVE BIDDERS CAN BE READ AS MANDATING AN IMPROPER ACTION. IT WOULD HAVE BEEN CLEARLY IMPROPER FOR THE AGENCY TO PERPETUATE THE ERROR BY ADVISING THE OTHER BIDDERS AS WELL. SEE BUCKEYE PACIFIC CORP., B-212183, AUG. 30, 1983, 83-2 CPD PARA. 282.

THE PRIOR DECISION IS AFFIRMED.