B-8531, FEBRUARY 28, 1940, 19 COMP. GEN. 761

B-8531: Feb 28, 1940

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ADVERTISING - BIDS - WITHDRAWALS THE GENERAL RULE IS THAT PROPOSALS THAT HAVE BEEN SUBMITTED IN RESPONSE TO A GOVERNMENT ADVERTISEMENT FOR BIDS MAY NOT BE WITHDRAWN AFTER THEY HAVE BEEN OPENED EVEN BEFORE AWARD IS MADE AND THAT THE BIDDER IS BOUND TO ACCEPT THE AWARD. THE SAID BIDDER WAS BOUND TO ACCEPT THE AWARD WHICH WAS MADE WITHIN 20 DAYS FROM THE DATE OF OPENING. 1940: THERE WAS RECEIVED YOUR LETTER OF FEBRUARY 13. BIDS WERE OPENED AT PICATINNY ARSENAL COVERING THE PROCUREMENT OF 350. SEVERAL BIDS WERE RECEIVED AND THE TROJAN POWDER COMPANY SUBMITTED ONE BID IN RESPONSE TO THE ADVERTISED SPECIFICATIONS AND A CONDITIONAL BID NOT RESPONSIVE TO THE ADVERTISED SPECIFICATIONS. THE CONDITIONAL BID WAS NOT FOR CONSIDERATION IN VIEW OF THE FACT THAT TO TAKE ADVANTAGE OF THIS BID IT WOULD HAVE BEEN NECESSARY FOR THE GOVERNMENT TO CANCEL AN EXISTING CONTRACT WITH ANOTHER FIRM.

B-8531, FEBRUARY 28, 1940, 19 COMP. GEN. 761

ADVERTISING - BIDS - WITHDRAWALS THE GENERAL RULE IS THAT PROPOSALS THAT HAVE BEEN SUBMITTED IN RESPONSE TO A GOVERNMENT ADVERTISEMENT FOR BIDS MAY NOT BE WITHDRAWN AFTER THEY HAVE BEEN OPENED EVEN BEFORE AWARD IS MADE AND THAT THE BIDDER IS BOUND TO ACCEPT THE AWARD. WHERE AN INVITATION FOR BIDS REFERRED TO THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS WHICH PROVIDES, IN PARAGRAPH 14, THAT "BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM BIDDERS PRIOR TO THE TIME FIXED FOR OPENING," AND THE LOW BIDDER AGREED, BY THE TERMS OF ITS BID, TO EXECUTE A CONTRACT UPON RECEIPT OF WRITTEN NOTICE OF ACCEPTANCE WITHIN 20 DAYS FROM THE DATE OF OPENING OF THE BIDS, THE SAID BIDDER WAS BOUND TO ACCEPT THE AWARD WHICH WAS MADE WITHIN 20 DAYS FROM THE DATE OF OPENING, AND IF IT SHOULD REFUSE TO PERFORM THE RESULTING CONTRACT IT SHOULD BE CHARGED WITH ANY EXCESS COST OF PROCURING THE MATERIALS ELSEWHERE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, FEBRUARY 28, 1940:

THERE WAS RECEIVED YOUR LETTER OF FEBRUARY 13, 1940, AS FOLLOWS:

AT 2:00 P.M., ON JANUARY 12, 1940, BIDS WERE OPENED AT PICATINNY ARSENAL COVERING THE PROCUREMENT OF 350,000 LBS. OF T.N.T. SEVERAL BIDS WERE RECEIVED AND THE TROJAN POWDER COMPANY SUBMITTED ONE BID IN RESPONSE TO THE ADVERTISED SPECIFICATIONS AND A CONDITIONAL BID NOT RESPONSIVE TO THE ADVERTISED SPECIFICATIONS. THE CONDITIONAL BID WAS NOT FOR CONSIDERATION IN VIEW OF THE FACT THAT TO TAKE ADVANTAGE OF THIS BID IT WOULD HAVE BEEN NECESSARY FOR THE GOVERNMENT TO CANCEL AN EXISTING CONTRACT WITH ANOTHER FIRM. SUCH CONDITION COULD NOT BE CONSIDERED IN CONNECTION WITH THE PROPOSED PROGRAM, AS IT WOULD HAVE INJECTED NEW CONSIDERATIONS NOT AVAILABLE TO OTHER BIDDERS. THEREFORE, BID NO. 2 OF THE TROJAN POWDER COMPANY WAS REJECTED. THE COMMANDING OFFICER, PICATINNY ARSENAL, FORWARDED ALL BIDS AND PERTINENT PAPERS TO THE WAR DEPARTMENT FOR ADVICE AND WAS AUTHORIZED TO ACCEPT BID NO. 1 OF THE TROJAN POWDER COMPANY, WHICH WAS THE LOWEST BID RESPONSIVE TO THE CIRCULAR ADVERTISEMENT.

THE BID OF THE TROJAN POWDER COMPANY STATED THAT TWENTY (20) DAYS WOULD BE GRANTED FOR ACCEPTANCE OF THE BID. THIS WOULD PERMIT ACCEPTANCE UP TO 2:00 P.M., FEBRUARY ST. ON JANUARY 31ST, LETTER WAS PRESENTED IN THE OFFICE OF THE CHIEF OF ORDNANCE BY A REPRESENTATIVE OF THE TROJAN POWDER COMPANY WHICH STATED THAT THE TWENTY (20) DAY PERIOD OF ACCEPTANCE WAS THEN BEING TERMINATED AND THAT NO AWARD WOULD BE ACCEPTED UNDER BID NO. 1. A COPY OF THIS LETTER IS ENCLOSED HEREWITH ( INCL. 1). THE TROJAN POWDER COMPANY WAS IMMEDIATELY NOTIFIED BY TELEGRAM FROM THE CHIEF OF ORDNANCE ( INCL. 2) THAT BIDS COULD NOT BE CANCELLED OR WITHDRAWN DURING THE PERIOD FOR ACCEPTANCE INDICATED IN THE BID. ON THE SAME DATE THE CONTRACTING OFFICER (COMMANDING OFFICER, PICATINNY ARSENAL) WIRED THE TROJAN POWDER COMPANY THAT BID NO. 1 HAD BEEN ACCEPTED AND AWARD MADE ACCORDINGLY.

THERE IS ALSO ENCLOSED LETTER DATED JANUARY 31ST ( INCL. 3), FROM THE TROJAN POWDER COMPANY TO THE COMMANDING OFFICER, PICATINNY ARSENAL, EXTENDING THE PERIOD OF ACCEPTANCE UNDER ITS BID NO. 2. AS PREVIOUSLY STATED, THIS WAS A CONDITIONAL BID AND WAS REJECTED.

"THE GENERAL RULE IS THAT PROPOSALS THAT HAVE BEEN SUBMITTED IN RESPONSE TO AN ADVERTISEMENT FOR BIDS MAY NOT BE WITHDRAWN AFTER THEY HAVE BEEN OPENED, EVEN BEFORE AWARD IS MADE, AND THAT THE BIDDER IS BOUND TO ACCEPT THE AWARD. 24 C.D. 534; 6 C.G. 504.'

IT WILL BE NOTED THAT IN ENCLOSURE 4 (LETTER FROM TROJAN POWDER COMPANY TO THE CHIEF OF ORDNANCE DATED FEBRUARY 2, 1940), THE TROJAN POWDER COMPANY INJECTS A FEATURE HAVING NO BEARING WHATSOEVER ON THIS PROCUREMENT, I.E., AN AWARD PREVIOUSLY MADE WITH THE TRITON CHEMICAL CORPORATION BASED UPON YOUR DECISION B-511 (B-5111), DATED JULY 26, 1939. WHILE THERE HAS BEEN A DELAY IN DELIVERY UNDER THE TRITON CHEMICAL CORPORATION'S CONTRACT, IT IS NOT IN DEFAULT. FURTHERMORE, IT IS THE OPINION OF THIS OFFICE THAT DECISION AS TO WHETHER A CONTRACTOR IS CONSCIENTIOUSLY PERFORMING UNDER HIS CONTRACT OR SHOULD BE CONSIDERED IN DEFAULT IS A MATTER FOR ADMINISTRATIVE DETERMINATION RATHER THAN THE OPINION OF ONE OF THE CONTRACTOR'S COMPETITORS.

IN ORDER THAT ALL CORRESPONDENCE IN THIS MATTER MAY BE BEFORE YOU FOR CONSIDERATION, LETTER FROM THE TROJAN POWDER COMPANY TO THE ASSISTANT SECRETARY OF WAR (INCL. 5), DATED FEBRUARY 1, 1940, IS ALSO ENCLOSED HEREWITH. IT IS REQUESTED THAT ALL OF THE ENCLOSURES HERETO BE RETURNED TO THIS OFFICE WITH YOUR DECISION.

IN VIEW OF THE FACT THAT IT NOW APPEARS THAT THE TROJAN POWDER COMPANY WILL NOT SIGN THE CONTRACT RESULTING FROM AWARD MADE IN RESPONSE TO CIRCULAR ADVERTISEMENT 672-40-984, OPENED JANUARY 12, 1940, THE FOLLOWING SPECIFIC QUESTIONS ARE ASKED:

(1) MAY THE TROJAN POWDER COMPANY BE PERMITTED TO WITHDRAW ITS BID?

(2) IF NOT, SHOULD AWARD BE MADE TO THE NEXT LOWEST BIDDER AND THE DIFFERENCE CHARGED TO THE ACCOUNT OF THE TROJAN POWDER COMPANY, IF THEY REFUSE TO SIGN A CONTRACT?

AS FINAL DATE OF ACCEPTANCE FOR OTHER BIDS IN RESPONSE TO THIS ADVERTISEMENT IS MARCH 12, 1940, AN EARLY REPLY WILL BE APPRECIATED.

IN SUBSTANCE THE CONTENTIONS OF THE TROJAN POWDER COMPANY ARE THAT IT WITHDREW ITS BID BEFORE IT WAS ACCEPTED BY THE GOVERNMENT AND THAT IT HAD A RIGHT TO DO SO FOR THE REASON THERE WAS NOTHING IN ITS BID AS ORIGINALLY SUBMITTED PROHIBITING OR PREVENTING IT FROM WITHDRAWING ANY TIME BEFORE ACCEPTANCE BY THE GOVERNMENT. THE TERMS OF THE BID WERE THAT THE COMPANY "AGREES UPON RECEIPT OF WRITTEN NOTICE OF THE ACCEPTANCE OF THIS BID WITHIN TWENTY (20) DAYS * * * AFTER THE DATE OF OPENING OF THE BIDS, TO EXECUTE, IF REQUIRED, THE STANDARD GOVERNMENT FORM OF CONTRACT ( STANDARD FORM NO. 32) IN ACCORDANCE WITH THE BID AS ACCEPTED * * *.'

THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS, REFERRED TO IN THE INVITATION FOR BIDS, PROVIDES IN PARAGRAPH 14---

WITHDRAWAL OF BIDS.--- BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM BIDDERS PRIOR TO THE TIME FIXED FOR OPENING. NEGLIGENCE ON THE PART OF THE BIDDER IN PREPARING THE BID CONFERS NO RIGHT FOR THE WITHDRAWAL OF THE BID AFTER IT HAS BEEN OPENED.

THE GENERAL RULE IS THAT PROPOSALS THAT HAVE BEEN SUBMITTED IN RESPONSE TO AN ADVERTISEMENT FOR BIDS MAY NOT BE WITHDRAWN AFTER THEY HAVE BEEN OPENED EVEN BEFORE AWARD IS MADE AND THAT THE BIDDER IS BOUND TO ACCEPT THE AWARD. 17 COMP. GEN. 536; 9 ID. 160; 6 ID. 504; ID. 786; 24 COMP. DEC. 534; AND W. A. SCOTT V. UNITED STATES, 44 CT.1CLS. 524.

THE CONTENTION OF THE TROJAN POWDER COMPANY THAT THERE WAS NO AGREEMENT ON ITS PART THAT IT WOULD NOT WITHDRAW ITS BID FOR 20 DAYS AFTER THE BIDS WERE OPENED IS NOT SUPPORTED BY THE FACTS, SINCE SAID COMPANY DID AGREE TO EXECUTE A CONTRACT UPON RECEIPT OF WRITTEN NOTICE WITHIN 20 DAYS FROM THE DATE OF OPENING OF THE BIDS, AND, IN ADDITION, SINCE THE BID MUST BE CONSIDERED IN THE LIGHT OF PARAGRAPH 14 OF THE INSTRUCTIONS, SUPRA, THERE WAS IN EFFECT AN AGREEMENT BY THE COMPANY NOT TO WITHDRAW ITS BID DURING THE 20 DAYS THE GOVERNMENT WAS ALLOWED FOR CONSIDERATION OF THE BIDS AFTER OPENING. HENCE, THE TROJAN POWDER COMPANY WAS NOT AUTHORIZED TO WITHDRAW ITS BID NO. 1 AND THE ACCEPTANCE THEREOF GAVE RISE TO A CONTRACT LEGALLY BINDING ON SAID BIDDER. UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP COMPANY, 239 U.S. 88.

ACCORDINGLY, SAID COMPANY SHOULD BE REQUIRED TO PERFORM, AND, IN THE EVENT OF REFUSAL, THE MATERIALS MAY BE PURCHASED FROM THE NEXT LOWEST BIDDER AND THE DIFFERENCE IN PRICE CHARGED TO THE DEFAULTING BIDDER.