B-170836, B-170940, DEC. 29, 1970

B-170836, B-170940, DEC. 29, 1970

BID PROTEST - LATE BID - TERMINATION OF CONTRACT REAFFIRMING PREVIOUS DECISION DENYING PROTEST OF SPRINGFIELD WHITE CASTLE CO., AGAINST THE CONSIDERATION OF A LATE BID AND THE SUBSEQUENT AWARD OF A CONTRACT FOR JANITORIAL SERVICES ISSUED BY THE NAVY PUBLIC WORKS CENTER, NORFOLK, VA., TO ROYAL SERVICES, INCORPORATED. WHERE A CONTRACT WAS ERRONEOUSLY AWARDED TO PROTESTANT AS THE RESULT OF THE CONTRACTING OFFICER'S IMPROPER REJECTION OF ANOTHER BID, THEN TERMINATION FOR THE CONVENIENCE OF THE CONTRACTING AGENCY IS THE PROPER LEGAL REMEDY FOR CANCELING AN OTHERWISE VALID CONTRACT SO AS TO COMPLY WITH PROCUREMENT POLICY; FURTHERMORE PROTESTANT'S CLAIM THAT SINCE THE POST MARK ON THE LETTER REVEALS THAT IT WAS STAMPED 5-1/2 HOURS AFTER BID OPENING, THE BID SHOULD BE REGARDED AS LATE, DOES NOT TAKE INTO ACCOUNT OTHER CRITERIA PROVIDED FOR IN ASPR FOR DETERMINING THE TIME A BID IS DEEMED SUBMITTED. ALTHOUGH THE BID WAS RETURNED TO ROYAL THE INFORMATION SUPPLIED BY THE CRIME LABORATORY OF THE POST OFFICE IS ADEQUATE EVIDENCE THAT THE BID WAS NOT TAMPERED WITH AND THEREFORE, IT IS NO LONGER APPROPRIATE TO CONSIDER SUCH BIDS PRIMA FACIE UNACCEPTABLE.

TO MESSRS. FREDRIC T. SUSS, CHARLES S. RHYNE AND ALFRED J. TIGHE:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 9, 1970, REQUESTING, ON BEHALF OF THE SPRINGFIELD WHITE CASTLE CO., RECONSIDERATION OF OUR DECISION B-170836, B-170940 OF NOVEMBER 2, 1970, WHICH UPHELD THE CONSIDERATION OF THE LATE BID OF ROYAL SERVICES, INC., FOR THE PERFORMANCE OF JANITORIAL SERVICES AT THE NAVY PUBLIC WORKS CENTER, NORFOLK, VIRGINIA.

THE REQUEST FOR RECONSIDERATION IS BASED UPON SEVERAL GROUNDS. THE FIRST IS THAT SPRINGFIELD WHITE CASTLE HAD A BINDING JANITORIAL SERVICES CONTRACT, CITING LEVINSON V UNITED STATES, 258 U.S. 198, 200 (1922), AND THAT IT WAS CONTRARY TO LAW TO TERMINATE THE CONTRACT FOR CONVENIENCE TO PERMIT AN AWARD TO ROYAL SERVICES. IN THE LEVINSON CASE, THE COURT SUSTAINED AN AWARD TO THE CONTRACTOR NOTWITHSTANDING A MORE FAVORABLE BID HAD BEEN MISPLACED AND OVERLOOKED. HOWEVER, NO TERMINATION ACTION HAD BEEN TAKEN BY THE CONTRACTING AGENCY IN THAT CASE. IN THE IMMEDIATE CASE, THE CONTRACT ERRONEOUSLY AWARDED TO SPRINGFIELD WHITE CASTLE AS A RESULT OF THE CONTRACTING OFFICER'S IMPROPER REJECTION OF ANOTHER BID HAS BEEN TERMINATED FOR CONVENIENCE BY THE CONTRACTING AGENCY. TERMINATION FOR CONVENIENCE IS THE PROPER LEGAL REMEDY FOR CANCELING AN OTHERWISE VALID CONTRACT TO COMPLY WITH PROCUREMENT POLICY. JOHN REINER V UNITED STATES, 163 CT. CL. 381 (1963); AND BROWN & SON ELECTRIC COMPANY V UNITED STATES, 163 CT. CL. 465 (1963).

THE SECOND BASIS FOR RECONSIDERATION IS THAT THE BIDDER HAS THE RESPONSIBILITY TO SEE THAT ITS BID IS MAILED IN TIME TO REACH THE DESIGNATED OFFICE BY THE BID OPENING TIME AND THAT, SINCE THE BID WAS NOT RECEIVED UNTIL THE DAY AFTER BID OPENING AND THE BACK OF THE BID ENVELOPE BEARS A 7:30 P.M. NORFOLK POST OFFICE TIME STAMP DATED SEPTEMBER 17, 1970, WHICH WAS 5-1/2 HOURS AFTER THE BID OPENING TIME, THE CONTRACTING OFFICER WAS CORRECT IN FINDING THAT THE BID WAS LATE AND RETURNING IT TO ROYAL SERVICES. THE STATEMENT WITH RESPECT TO THE BIDDER'S RESPONSIBILITY FOR THE TIMELY MAILING OF A BID IS CORRECT. HOWEVER, WHETHER THE BIDDER HAS MET THAT RESPONSIBILITY IS MEASURED NOT BY THE FACT THAT THE BID IS RECEIVED LATE BY THE CONTRACTING OFFICE OR THAT THE TIME STAMP OF THE DELIVERING POST OFFICE SHOWS THAT IT WAS RECEIVED LATE IN THAT POST OFFICE, BUT BY OTHER CRITERIA PROVIDED IN PARAGRAPH 2-303 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AS SET FORTH IN THE NOVEMBER 2 DECISION. HERE, THE CONTRACTING OFFICER DID NOT REQUEST OR OBTAIN THE INFORMATION REQUIRED BY ASPR AT THE TIME THE BID WAS REJECTED. MERELY RETURNING THE BID TO THE BIDDER BECAUSE IT WAS LATE WITHOUT ATTEMPTING TO DETERMINE WHETHER IT WAS AN ACCEPTABLE LATE BID WAS NOT THE CORRECT PROCEDURE UNDER ASPR 2-303.

THE THIRD BASIS FOR RECONSIDERATION IS THAT THE NOVEMBER 2 DECISION IS NOT CONSISTENT WITH PRIOR DECISIONS OF OUR OFFICE WHICH HAVE EXPRESSED RESERVATIONS ABOUT CONSIDERING A LATE BID ONCE IT HAS BEEN RETURNED TO THE BIDDER EVEN THOUGH THE RETURN WAS IMPROPER. HOWEVER, AS INDICATED IN THE NOVEMBER 2 DECISION, IN LIGHT OF THE LATE BID REGULATIONS AND THE REASONABLE ASSURANCES THE POST OFFICE DEPARTMENT CAN PROVIDE THAT SEALED BID ENVELOPES HAVE NOT BEEN TAMPERED WITH, WE NO LONGER BELIEVE IT IS APPROPRIATE TO CONSIDER SUCH BIDS PRIMA FACIE UNACCEPTABLE. THEREFORE, TO THE EXTENT THAT PRIOR DECISIONS ARE INCONSISTENT WITH THE NOVEMBER 2 DECISION, THEY WILL NO LONGER BE FOLLOWED.

THE FINAL BASIS FOR RECONSIDERATION IS MADE UP OF SEVERAL POINTS HEREINAFTER CONSIDERED. IT IS STATED THAT THE CASE IN 41 COMP. GEN. 807 (1962), REFERRED TO IN THE NOVEMBER 2 DECISION, WAS SIGNIFICANTLY DIFFERENT FROM THE INSTANT CASE IN THAT IN THE CITED CASE THE BID WAS RETURNED TO THE BIDDER ONLY AFTER IT WAS OPENED IN THE BID OPENING ROOM BEFORE THE CONTRACTING OFFICER WHO NOTED THE CONTENTS AND THE INTEGRITY OF THE BIDDING SYSTEM WAS THUS NOT ENDANGERED. HOWEVER, SUCH ANALYSIS OF THE CASE IN 41 COMP. GEN. 807 OVERLOOKS THE FACT THAT WHEN THE BID WAS FIRST TENDERED TO THE CONTRACTING OFFICER IT WAS REFUSED AND REMAINED IN THE BIDDER'S CONTROL THROUGHOUT THE READING OF BIDS. IT WAS ONLY AFTER THE READING OF ALL THE BIDS THAT THE BIDDER OPENED THE BID IN THE PRESENCE OF THE CONTRACTING OFFICER AND LEFT WITH IT WHEN SUBMISSION WAS AGAIN REFUSED, ONLY TO RETURN LATER TO RESUBMIT IT. THUS, THE INTEGRITY OF THE BIDDING SYSTEM WAS INITIALLY THREATENED BY THE FACT THAT AFTER THE BID WAS INITIALLY RETURNED TO THE BIDDER HE HAD AN OPTION AFTER HEARING ALL THE OTHER BIDS TO DECIDE WHETHER TO RESUBMIT THE BID. HOWEVER, AS RECOGNIZED IN THAT DECISION, SUCH OPTION WAS CREATED BY THE GOVERNMENT'S WRONGFUL ACTION, NOT BY THE BIDDER, AND THE BID WAS PERMITTED TO BE CONSIDERED SINCE THE EVIDENCE WAS DEEMED SUFFICIENT TO ESTABLISH THAT THE BID ORIGINALLY SUBMITTED WAS THE BID RESUBMITTED.

FURTHER, YOU CONTEND THAT THE FINDINGS OF THE POST OFFICE DEPARTMENT CRIME LABORATORY QUOTED IN THE NOVEMBER 2 DECISION ARE MORE CONSISTENT WITH A CONCLUSION THAT THE BID ENVELOPE WAS TAMPERED WITH THAN THE CONCLUSION THAT IT WAS NOT REOPENED. IN THAT CONNECTION, IT IS STATED THAT THESE FINDINGS "CAN BE USED TO SUPPORT THE CONCLUSION THAT UPON THE FIRST OCCASION OF SEALING THE ENVELOPE, IT CONTAINED THE BID AND THE FLAP WAS SEALED ONLY IN THE AREA OF THE TEAR WHICH OCCURRED WHEN OPENED DURING A POSSIBLE TAMPERING TO REMOVE THE BID AND REVISE OR REPLACE IT." HOWEVER, AN EXAMINATION OF THE ENVELOPE SHOWS THAT WHENEVER THE BID ENVELOPE WAS TORN OPEN AND WHETHER OR NOT IT CONTAINED THE BID, SUCH OPENING OCCURRED BEFORE THE ENVELOPE WAS DELIVERED TO THE CONTRACTING OFFICE INITIALLY ON SEPTEMBER 18, 1970. THE TEAR ACROSS THE FLAP IS 1 INCH LONG AND IS ABOUT 2-3/4 INCHES FROM THE SIDE OF THE ENVELOPE. THE TORN END OF THE FLAP WHICH IS GLUED TO THE ENVELOPE IS AN EIGHTH OF AN INCH ABOVE THE EDGE OF THE FLAP WHICH COVERS OVER A PART OF IT. ABOUT AN INCH TO THE RIGHT OF THE TEAR, THERE IS A POST OFFICE SPECIAL DELIVERY POSTMARK DATED SEPTEMBER 17, 1970, COVERING PART OF THE FLAP AND THE BACK OF THE ENVELOPE. THE PART OF THE POSTMARK ON THE FLAP IS PERFECTLY ALIGNED WITH THE REST OF THE ENVELOPE. IF THE POSTMARK HAD BEEN PLACED ON THE ENVELOPE WHEN IT WAS FIRST SEALED, AS YOU INDICATE, IT WOULD NOW BE OVERLAPPING SINCE THE FLAP, EXCEPT FOR THE TORN PIECE, IS AN EIGHTH OF AN INCH BELOW THE PLACE WHERE THE 1-INCH PIECE IS GLUED. IN THE CIRCUMSTANCES, IN VIEW OF THE ALIGNMENT OF THE POSTMARK AND THE FINDING OF THE CRIME LABORATORY THAT THERE IS AN ABSENCE OF EVIDENCE THAT THE FLAP AS NOW SEALED HAS BEEN DISTURBED, WE HAVE NO REASON TO DOUBT THAT THE RESUBMITTED BID IS THE SAME BID AS WAS ORIGINALLY SUBMITTED.

YOU HAVE STATED FURTHER THAT AIRMAIL IS DEPENDENT UPON CONDITIONS BETWEEN DIFFERENT FLIGHTS OF DIFFERENT AIRLINES AS WELL AS RUNWAY FACILITIES AT VARIOUS AIRPORTS. YOU CONTEND THAT DELAYS RESULTING FROM SUCH CONDITIONS ARE NOT DELAYS CAUSED BY THE POST OFFICE, BUT ARE RISKS THAT MAILERS ASSUME WHEN MAILING THEIR BIDS. IT MAY BE THAT AIRMAIL DELAYS MAY BE ATTRIBUTABLE TO THE AIR CARRIERS AND AIRPORT CONDITIONS, BUT ONCE THE BID IS DEPOSITED WITH THE POST OFFICE IT IS IN THE MAIL UNTIL IT IS DELIVERED AND THE LATE BID REGULATIONS PROVIDE FOR CONSIDERATION OF BIDS WHICH ARE DELAYED IN THE MAIL.

YOU HAVE STATED THAT IT WAS UNREASONABLE FOR ROYAL SERVICES TO HAVE EXPECTED THAT ITS BID WOULD HAVE BEEN RECEIVED ON TIME CONSIDERING THE TIME OF MAILING AND THE BID OPENING TIME. HOWEVER, THE RECEIVING POST OFFICE, THE DELIVERING POST OFFICE AND THE WASHINGTON REGIONAL OFFICE OF THE DELIVERING POST OFFICE HAVE ALL CONFIRMED THAT THE BID WAS MAILED IN ADEQUATE TIME FOR TIMELY DELIVERY. FURTHER, THE INFORMATION FURNISHED TO YOU BY THE POST OFFICE DEPARTMENT BUREAU OF OPERATIONS SHOWS THAT WITH NORMAL HANDLING THE BID WOULD HAVE BEEN DELIVERED ON THE 7:30 A.M. SPECIAL DELIVERY RUN ENDING AT 11:30 A.M., WHICH WAS 2 1/2 HOURS BEFORE THE SCHEDULED BID OPENING. ALTHOUGH THE LETTER FROM THE BUREAU STATES THAT THE BID WOULD HAVE BEEN DELIVERED TO THE NAVAL POSTAL FACILITY AT NORFOLK BEFORE 11:30 A.M., WE HAVE ASCERTAINED THAT THE BID ACTUALLY WAS DELIVERED BY THE NORFOLK POST OFFICE SPECIAL DELIVERY MESSENGER DIRECTLY TO THE OFFICE OF THE ADDRESSEE AND DID NOT GO THROUGH THE NAVAL POSTAL FACILITY. THUS PROCESSING TIME BY THE NAVAL POSTAL FACILITY WAS NOT PERTINENT TO OUR INQUIRY. SINCE VARIOUS OFFICES OF THE POST OFFICE DEPARTMENT HAVE INDICATED THAT THE BID WAS MAILED ON TIME SO THAT IT SHOULD HAVE BEEN DELIVERED TIMELY, IT DOES NOT APPEAR THAT IT WAS UNREASONABLE FOR THE BIDDER TO HAVE MAILED ITS BID WHEN IT DID.

YOU CONTEND, HOWEVER, THAT OUR OFFICE SHOULD TAKE JUDICIAL NOTICE OF THE MAIL SERVICE EXISTING IN SEPTEMBER 1970 AND THAT THE POSTAL REORGANIZATION ACT, 84 STAT. 719, WAS ENACTED IN AUGUST 1970 TO INCREASE POSTAL EFFICIENCY. HOWEVER, THE LATE BID REGULATIONS PROVIDE THAT INFORMATION AS TO THE NORMAL TIME FOR MAIL DELIVERY SHALL BE OBTAINED FROM THE POST OFFICE SERVING THE PROCUREMENT ACTIVELY. THAT POST OFFICE ADVISED THAT THE BID WAS MAILED IN TIME TO ARRIVE BEFORE THE 2 P.M. BID OPENING. INDICATED ABOVE, THIS IS CONFIRMED BY OTHER POSTAL SOURCES. FURTHER, AS INDICATED IN THE QUOTATION FROM B-156101 OF MAY 4, 1965, IN THE NOVEMBER 2 DECISION, OUR OFFICE CONSIDERS THAT THE LATE BID REGULATIONS REQUIRE THAT FULL CREDENCE BE GIVEN TO THE STATEMENTS OF THE POSTAL AUTHORITIES AS TO THE NORMAL TIME FOR MAIL DELIVERY AND THAT WHETHER NORMAL TIME FOR MAIL DELIVERY AND THAT WHETHER NORMAL MAIL HANDLING SCHEDULES ARE MAINTAINED IN ACTUAL OPERATIONS IS NOT A PROPER SUBJECT OF INQUIRY UNDER THE LATE BID REGULATIONS.

IN VIEW OF THE FOREGOING, THE NOVEMBER 2 DECISION IS SUSTAINED.