B-5984, SEPTEMBER 13, 1939, 19 COMP. GEN. 356

B-5984: Sep 13, 1939

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ADVERTISING BIDS - REJECTION - LEGALITY OF SUBSEQUENT ACCEPTANCE WITH BIDDER'S CONSENT WHERE ALL BIDS FOR CONSTRUCTION OF A HOUSING PROJECT IN THE DISTRICT OF COLUMBIA WERE REJECTED BY THE ALLEY DWELLING AUTHORITY BUT IT IS NOW DESIRED TO RESCIND THE ACTION TAKEN IN REJECTING THE BIDS AND TO ACCEPT THE LOWEST BID SUBMITTED AND THE LOW BIDDER HAS AGREED TO PERMIT ACCEPTANCE OF THE REJECTED BID IF THE ACCEPTANCE IS MADE PRIOR TO A SPECIFIED TIME. THE UNITED STATES HOUSING AUTHORITY ADVISED THE ALLEY DWELLING AUTHORITY THAT IT COULD NOT APPROVE THE AWARD OF THE CONTRACT ON THE LOWEST BID SUBMITTED BECAUSE THE AMOUNT OF THE BID EXCEEDED THE ESTIMATES FOR THE PROJECT AND IT WAS ADVISED THAT ALL BIDS BE REJECTED.

B-5984, SEPTEMBER 13, 1939, 19 COMP. GEN. 356

ADVERTISING BIDS - REJECTION - LEGALITY OF SUBSEQUENT ACCEPTANCE WITH BIDDER'S CONSENT WHERE ALL BIDS FOR CONSTRUCTION OF A HOUSING PROJECT IN THE DISTRICT OF COLUMBIA WERE REJECTED BY THE ALLEY DWELLING AUTHORITY BUT IT IS NOW DESIRED TO RESCIND THE ACTION TAKEN IN REJECTING THE BIDS AND TO ACCEPT THE LOWEST BID SUBMITTED AND THE LOW BIDDER HAS AGREED TO PERMIT ACCEPTANCE OF THE REJECTED BID IF THE ACCEPTANCE IS MADE PRIOR TO A SPECIFIED TIME, THE AUTHORITY MAY LEGALLY RESCIND ITS ACTION IN REJECTING THE LOWEST BID AND MAY AWARD THE CONTRACT TO THE LOWEST BIDDER WITHOUT READVERTISING.

COMPTROLLER GENERAL BROWN TO THE EXECUTIVE OFFICER, ALLEY DWELLING AUTHORITY FOR THE DISTRICT OF COLUMBIA, SEPTEMBER 13, 1939:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 11, 1939, AS FOLLOWS:

PURSUANT TO ITS ADVERTISED REQUEST FOR BIDS, THE ALLEY DWELLING AUTHORITY ON AUGUST 10, 1939, OPENED BIDS FOR THE CONSTRUCTION OF A LOW RENT HOUSING PROJECT IN THE DISTRICT OF COLUMBIA. IN ACCORDANCE WITH AN AGREEMENT IT HAD WITH THE UNITED STATES HOUSING AUTHORITY, THE ALLEY DWELLING AUTHORITY SUBMITTED TO THE UNITED STATES HOUSING AUTHORITY FOR APPROVAL A RECOMMENDATION THAT THE LOWEST BID, SUBMITTED BY JOHN MCSHAIN, INCORPORATED, OF BALTIMORE, BE ACCEPTED.

AFTER SOME STUDY OF THE BID AND THE RECOMMENDATION, THE UNITED STATES HOUSING AUTHORITY ADVISED THE ALLEY DWELLING AUTHORITY THAT IT COULD NOT APPROVE THE AWARD OF THE CONTRACT ON THE LOWEST BID SUBMITTED BECAUSE THE AMOUNT OF THE BID EXCEEDED THE ESTIMATES FOR THE PROJECT AND IT WAS ADVISED THAT ALL BIDS BE REJECTED, THE PLANS REVISED AND NEW BIDS ACCEPTED, AND IN ACCORDANCE THEREWITH THE ALLEY DWELLING AUTHORITY REJECTED ALL OF THE BIDS.

THE NEXT DAY THEREAFTER THE UNITED STATES HOUSING AUTHORITY RECONSIDERED ITS ACTION AND REQUESTED THE ALLEY DWELLING AUTHORITY TO RESCIND ITS ACTION IN REJECTING THE BIDS AND TO ACCEPT THE BID OF JOHN MCSHAIN, INCORPORATED, AND AWARD A CONTRACT TO IT. AFTER CONSULTATION, JOHN MCSHAIN, INCORPORATED (THE LOWEST BIDDER), INDICATED THAT IT WOULD ACCEPT AWARD OF A CONTRACT PROVIDED IT COULD BE MADE TO IT BEFORE THREE (-CLOCK P.M. ON SEPTEMBER 13, 1939.

THE ORIGINAL SPECIFICATIONS REQUIRED THAT THE BIDS LIE FOR A PERIOD OF SIXTY DAYS AFTER THE DATE OF OPENING BEFORE THEY MIGHT BE WITHDRAWN OR WITHIN WHICH TIME ACCEPTANCE OR REJECTION WOULD BE MADE. THE BIDS WERE OPENED ON AUGUST 10, CONSEQUENTLY THE ACCEPTANCE OR REJECTION PERIOD WILL NOT EXPIRE UNTIL OCTOBER 10, 1939. JOHN MCSHAIN, INCORPORATED, WILL ASSUME ALL OF THE OBLIGATIONS OF ITS BID EXCEPT THIS ONE WHICH IT WILL NOW LIMIT TO SEPTEMBER 13, 1939.

THE ALLEY DWELLING AUTHORITY IS OF THE BELIEF THAT THE BID SUBMITTED BY JOHN MCSHAIN, INCORPORATED, IS A FAIR ONE AND REPRESENTS A REASONABLE COST FOR THE CONSTRUCTION OF THIS PROJECT. IT IS FEARED, IN VIEW OF THE RECENT TURN OF EVENTS, THAT IF THE PLANS AND SPECIFICATIONS ARE READVERTISED AND BIDS ACCEPTED THE BIDS WILL COME IN AT A MUCH HIGHER FIGURE THAN THE PRESENT BIDS AND THAT NO MATERIAL GAIN CAN BE MADE THROUGH READVERTISEMENT. IT IS THE DESIRE OF THIS AUTHORITY TO RESCIND ITS ACTION IN REJECTING THE BIDS AND TO NOW ACCEPT THE LOWEST BID SUBMITTED AND AWARD THE CONTRACT TO JOHN MCSHAIN, INCORPORATED, IF SUCH ACTION IS NOT PROHIBITED BY LAW OR THE RULES AND REGULATIONS OF YOUR OFFICE. AFTER SEARCHING THROUGH THE DECISIONS OF THE COMPTROLLER GENERAL AND OF THE ATTORNEY GENERAL WE ARE UNABLE TO FIND A CASE PARALLEL TO THIS ONE OR ANY PRECEDENT WHICH WOULD SERVE AS GUIDE TO US. IT WOULD APPEAR LOGICAL AND REASONABLE THAT AN AGENCY OF THE GOVERNMENT MIGHT RESCIND ITS ACTION IN REJECTING A BID AND AWARD THE CONTRACT TO THE LOWEST BIDDER, PROVIDED THE LOWEST BIDDER WERE AMENABLE AND THAT THE ACTION IS TAKEN WITHIN A REASONABLE TIME AFTER THE ORIGINAL REJECTION OF THE BID. IN THE PRESENT CASE IT WOULD APPEAR MORE LOGICAL IN THAT THE PERIOD FOR THE ACCEPTANCE OR REJECTION OF THE BIDS HAS NOT YET RUN OUT.

IN VIEW OF THE FACT THAT THE LOWEST BIDDER HAS INDICATED ITS WILLINGNESS TO ACCEPT AN AWARD OF THE CONTRACT CONDITIONED UPON THAT AWARD BEING MADE ON OR BEFORE THREE O-CLOCK P.M. ON SEPTEMBER 13, 1939, THIS OFFICE WOULD GREATLY APPRECIATE HAVING YOUR RULING AS TO WHETHER OR NOT---

(A) THE AUTHORITY MAY LEGALLY RESCIND ITS ACTION IN REJECTING THE

LOWEST BID SUBMITTED ON THE PROJECT AND (B) AWARD THE

CONTRACT TO THE LOWEST BIDDER WITHOUT READVERTISING

FOR NEW BIDS.

THE RULE IS STATED IN MINNEAPOLIS AND ST. LOUIS RAILWAY V. COLUMBUS ROLLING MILL, 119 U.S. 149, 151, THAT:

THE OTHER PARTY, HAVING ONCE REJECTED THE OFFER, CANNOT AFTERWARDS REVIVE IT BY TENDERING AN ACCEPTANCE OF IT. ELIASON V. HENSHAW, 4 WHEAT. 225; CARR V. DUVAL, 14 PET. 77; NATIONAL BANK V. HALL, 101 U.S. 43, 50; HYDE V. WRENCH, 3 BEAVAN, 334; FOX V. TURNER, 1 BRADWELL, 153.

IN THAT CASE THE RAILWAY COMPANY, AFTER REJECTING THE BID ATTEMPTED, WITHOUT THE CONSENT OF THE ROLLING MILL COMPANY, TO ACCEPT THE BID. BUT IN THIS CASE THE LOW BIDDER HAS STATED ITS WILLINGNESS TO PERMIT ACCEPTANCE OF THE REJECTED BID PROVIDED THE ACCEPTANCE IS MADE PRIOR TO SEPTEMBER 13, 1939. IN SUCH A SITUATION THE RULE OF LAW SEEMS TO BE THAT A BID MAY BE REVIVED AND ACCEPTED WITHOUT READVERTISING WITH THE RENEWED CONSENT OF THE PERSON MAKING SAME. SEC. 13 C.J. 296, PAR. 110, AND CASES THERE CITED.

THE RESULT IS THAT BOTH OF YOUR QUESTIONS ARE ANSWERED IN THE AFFIRMATIVE IN THE ABSENCE OF ANY OTHER OBJECTION.