B-153731, MAY 12, 1964

B-153731, MAY 12, 1964

TO MR. SAMUEL PANZER:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 1, 1963, ADDRESSED TO THE U.S. CORPS OF ENGINEERS, 111 EAST 16TH STREET, NEW YORK 3, NEW YORK, RELATIVE TO THE CLAIM OF A. A. SALERNO FOR AN INCREASE OF $56,000 IN THE PRICE FOR WORK PERFORMED UNDER CONTRACT NO. ENG-30-075 63-123.

INVITATION FOR BIDS NO. ENG-30-075-63-123, DATED MAY 16, 1963, ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, NEW YORK, SOLICITED BIDS FOR THE CONSTRUCTION OF THE U.S. ARMY RESERVE CENTER AT FORT TILDEN, NEW YORK. OPENING OF BIDS WAS SCHEDULED FOR 3:00 P.M., EASTERN DAYLIGHT SAVING TIME, JUNE 13, 1963, AT THE DISTRICT OFFICE IN NEW YORK CITY.

THE BIDDING DOCUMENTS INCLUDED TWO SCHEDULES--- ONE FOR EIGHT BASIC BID ITEMS AND ANOTHER FOR SEVEN ADDITIVE BID ITEMS. BIDDERS WERE ADVISED THAT THE NET AMOUNT OF MONEY AVAILABLE FOR AWARD WOULD BE ANNOUNCED AT THE TIME OF BID OPENING.

THE "INSTRUCTIONS TO BIDDERS" PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"7. LATE BIDS AND MODIFICATIONS OR WITHDRAWALS. BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF BIDS WILL NOT BE CONSIDERED UNLESS: (A) THEY ARE RECEIVED BEFORE AWARD IS MADE; (B) THEY ARE SENT BY REGISTERED MAIL, OR BY CERTIFIED MAIL FOR WHICH AN OFFICIAL POST OFFICE STAMP (POSTMARK) ON THE ORIGINAL RECEIPT FOR CERTIFIED MAIL HAS BEEN OBTAINED, OR BY TELEGRAPH IF AUTHORIZED; AND (C) IT IS DETERMINED BY THE GOVERNMENT THAT LATE RECEIPT WAS DUE SOLELY TO EITHER (I) DELAY IN THE MAILS, OR DELAY BY THE TELEGRAPH COMPANY IF TELEGRAPHIC BIDS ARE AUTHORIZED, FOR WHICH THE BIDDER WAS NOT RESPONSIBLE OR (II) MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION. HOWEVER, A MODIFICATION WHICH IS RECEIVED FROM AN OTHERWISE SUCCESSFUL BIDDER AND WHICH MAKES THE TERMS OF THE BID MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME IT IS RECEIVED AND MAY THEREAFTER BE ACCEPTED. BIDDERS USING CERTIFIED MAIL ARE CAUTIONED TO OBTAIN A LEGIBLY POSTMARKED RECEIPT FOR CERTIFIED MAIL AND RETAIN IT AGAINST THE CHANCE THAT THE POSTMARK THEREON WILL BE REQUIRED AS EVIDENCE THAT A LATE BID WAS TIMELY MAILED. IF THE POSTMARK ON SUCH RECEIPT, OR ON THE REGISTERED MAIL WRAPPER SHOWS THE HOUR OF MAILING AS WELL AS THE DATE, THE TIME OF MAILING SHALL BE ESTABLISHED ACCORDINGLY; IF IT SHOWS THE DATE BUT NOT THE HOUR, THE TIME OF MAILING SHALL BE DEEMED TO BE THE LAST MINUTE OF THE DATE SHOWN, UNLESS THE BIDDER FURNISHES EVIDENCE FROM THE POST OFFICE OF MAILING WHICH, IN THE CASE OF REGISTERED MAIL, ESTABLISHES AN EARLIER TIME; OR IN THE CASE OF CERTIFIED MAIL, WHERE THE RECEIPT FOR CERTIFIED MAIL IDENTIFIES THE POST OFFICE STATION OF MAILING, THE TIME OF MAILING SHALL BE DEEMED TO BE THE LAST MINUTE OF THE BUSINESS DAY OF THAT STATION. (APR. 1962).

"8. WITHDRAWAL OF BIDS. BIDS MAY BE WITHDRAWN BY WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM BIDDERS PRIOR TO THE TIME SET FOR OPENING OF BIDS.'

AT THE TIME OF BID OPENING, ANNOUNCEMENT WAS MADE THAT THE AMOUNT OF $760,000 WAS AVAILABLE FOR AWARD. THEREAFTER, THE 13 BIDS WHICH HAD BEEN TIMELY RECEIVED WERE OPENED. A. A. SALERNO, WHO WAS NOT PRESENT OR REPRESENTED AT THE OPENING, WAS THE LOW BIDDER ON THE BASIS OF HIS BID OF $723,850 ON THE EIGHT BASIC ITEMS. ALL OF THE REMAINING BIDS ON THE BASIC ITEMS EXCEEDED THE AVAILABLE FUND AMOUNT OF $760,000. A. A. SALERNO BID $68,620 ON THE SEVEN ADDITIVE ITEMS, MAKING HIS TOTAL BID $792,470.

AT 3:42 P.M. ON JUNE 13, 1963, AFTER COMPLETION OF THE BID OPENING, A TELEGRAM FROM SALERNO WAS RECEIVED IN THE PROCUREMENT OFFICE MODIFYING HIS BID BY REDUCING THE AMOUNT OF THE BID ON BASIC ITEM NO. 1 BY $56,000. THE MODIFICATION REDUCED SALERNO'S BASE BID TO $667,850 AND HIS TOTAL BID TO $736,470, MAKING SUCH BID LESS THAN THE AVAILABLE AMOUNT OF FUNDS.

AFTER THE TELEGRAPHIC MODIFICATION HAD BEEN RECEIVED, BUT PRIOR TO AWARD, SALERNO ADVISED THE PROCUREMENT OFFICE THAT AT 2:44 P.M. ON JUNE 13, 1963, HE HAD REQUESTED THE NEW ROCHELLE, NEW YORK, WESTERN UNION OFFICE TO CANCEL THE MODIFICATION MESSAGE WHICH SALERNO'S SECRETARY HAD TELEPHONED TO THAT OFFICE AT 1:44 P.M., JUNE 13, OR ONE HOUR EARLIER.

INVESTIGATION BY THE PROCUREMENT OFFICE DISCLOSED THAT SALERNO'S SECRETARY HAD MADE SUCH A CANCELLATION REQUEST AT 2:44 P.M. ON JUNE 13 BUT WAS ADVISED THAT WESTERN UNION POLICY REQUIRES RECEIPT OF A CANCELLATION NOTICE WITHIN SEVEN MINUTES OF THE RECEIPT OF THE ORIGINAL MESSAGE. ACCORDINGLY, NO ACTION WAS TAKEN ON THE SECRETARY'S REQUEST. ALSO, WHILE SALERNO FOLLOWED UP ON THE CANCELLATION REQUEST BY A CALL TO THE WESTERN UNION NEW ROCHELLE OFFICE AT 3:47 P.M., JUNE 13, AND ANOTHER CALL TO THE WESTERN UNION NEW YORK CITY OFFICE AT 4:10 P.M., JUNE 13, NO MESSAGE CANCELLING OR WITHDRAWING THE TELEGRAPHIC BID MODIFICATION WAS RECEIVED IN THE PROCUREMENT OFFICE PRIOR TO AWARD ON JUNE 28, 1963, TO SALERNO, AT HIS REDUCED TOTAL BID PRICE OF $736,470.

SUBSEQUENT TO AWARD, SALERNO SUBMITTED TO THE PROCUREMENT OFFICE AFFIDAVITS OF HIS SECRETARY AND TWO EMPLOYEES OF THE NEW ROCHELLE WESTERN UNION OFFICE REGARDING THE TIME OF TRANSMISSION OF THE ORIGINAL MESSAGE. THE AFFIDAVITS OF THE WESTERN UNION EMPLOYEES INCLUDE STATEMENTS TO THE EFFECT THAT HAD A CANCELLATION MESSAGE BEEN TRANSMITTED AT 2:44 P.M., JUNE 13, IT WOULD HAVE BEEN RECEIVED BY THE PROCUREMENT OFFICE AT 3:00 P.M. THE SAME DAY.

TEST TELEGRAMS DISPATCHED TO THE PROCUREMENT OFFICE ON FEBRUARY 11, 1964, BY A PROCUREMENT OFFICE EMPLOYEE FROM THE NEW ROCHELLE AND MOUNT VERNON, NEW YORK, WESTERN UNION OFFICES WERE TELEPHONED BY WESTERN UNION TO THE PROCUREMENT OFFICE WITHIN FIVE AND EIGHT MINUTES OF FILING TIME, RESPECTIVELY, AND WERE LATER CONFIRMED BY WRITTEN TELEGRAMS.

THE BASIS OF SALERNO'S CLAIM IS THAT THE ATTEMPTED CANCELLATION OF THE TELEGRAPHIC BID MODIFICATION SHOULD BE REGARDED AS A TIMELY TRANSMITTED TELEGRAPHIC BID MODIFICATION WHICH WAS RECEIVED LATE THROUGH NO FAULT OF THE BIDDER AND THEREFORE IS PROPERLY FOR CONSIDERATION UNDER PARAGRAPH 7 OF THE "INSTRUCTIONS TO BIDDERS.'

PARAGRAPH 2-304 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDES THAT BIDS MAY BE MODIFIED OR WITHDRAWN BY WRITTEN OR TELEGRAPHIC NOTICE RECEIVED PRIOR TO THE TIME SET FOR BID OPENING. ASPR 2-305 PROVIDES THAT LATE TELEGRAPHIC BID MODIFICATIONS ARE SUBJECT TO THE RULES IN ASPR 2-303 APPLICABLE TO LATE BIDS.

UNDER ASPR 2-303, A LATE TELEGRAPHIC BID IS PRESUMED TO HAVE BEEN FILED TOO LATE WITH THE TELEGRAPH COMPANY UNLESS THE BIDDER DEMONSTRATES BY CLEAR AND CONVINCING EVIDENCE, WHICH INCLUDES SUBSTANTIATION BY AN AUTHORIZED OFFICIAL OF THE TELEGRAPH COMPANY, THAT THE BID WAS FILED WITH THE TELEGRAPH COMPANY IN SUFFICIENT TIME FOR TIMELY DELIVERY BY NORMAL TRANSMISSION PROCEDURES. HOWEVER, PARAGRAPH 2-305, ASPR, PERMITS CONSIDERATION OF A BID MODIFICATION WHICH IS FAVORABLE TO THE GOVERNMENT FROM AN OTHERWISE SUCCESSFUL BIDDER AT ANY TIME.

ASPR 2-304 CONTEMPLATES THAT A BID MODIFICATION BE IN WRITING OR IN TELEGRAPHIC FORM. THE TELEGRAPHIC MESSAGE TRANSMITTED BY SALERNO TO THE PROCUREMENT OFFICE REDUCING ITS BID THEREFORE COMES WITHIN THE PURVIEW OF ASPR 2-304. ALSO, SINCE SALERNO WAS THE LOW BIDDER, SUCH MODIFICATION, BEING FAVORABLE TO THE GOVERNMENT, IS FOR CONSIDERATION UNDER THE TERMS OF THE INVITATION AND ASPR 2-305 WITHOUT REGARD TO ITS RECEIPT AFTER BID OPENING, PROVIDED IT WAS NOT EFFECTIVELY WITHDRAWN BY SALERNO. 40 COMP. GEN. 466.

SINCE SALERNO DID NOT, IN HIS ATTEMPTS TO CANCEL THE TELEGRAPHIC MODIFICATION, ADDRESS EITHER A TIMELY WRITTEN OR TELEGRAPHIC COMMUNICATION TO THE PROCUREMENT OFFICE ADVISING THAT THE MODIFICATION SHOULD BE DISREGARDED, THERE WAS NO SECOND MODIFICATION WITHIN THE CONTEMPLATION OF ASPR 2-304. RATHER, THERE WAS AN ATTEMPTED WITHDRAWAL OF THE BID MODIFICATION MESSAGE VIA THE AGENCY OF THE WESTERN UNION TELEGRAPH COMPANY.

THERE WOULD APPEAR TO BE NO QUESTION THAT, HAD THE TELEGRAPH COMPANY SUCCEEDED IN RECALLING THE ORIGINAL MESSAGE OR IN DELIVERING TO THE PROCUREMENT OFFICE A MESSAGE CANCELLING THE ORIGINAL MESSAGE PRIOR TO BID OPENING, SALERNO'S OFFER OF A PRICE REDUCTION WOULD HAVE BEEN EFFECTIVELY WITHDRAWN AND COULD NOT PROPERLY HAVE BEEN CONSIDERED BY THE GOVERNMENT. SEE MILLER V. UNITED STATES, 62 F.SUPP. 327. HERE, HOWEVER, THE TELEGRAPH COMPANY DID NOT RETRACT THE ORIGINAL MESSAGE OR NOTIFY THE ADDRESSEE OF THE SENDER'S DESIRE TO RETRACT IT, NOR DID THE SENDER FILE WITH THE TELEGRAPH COMPANY A SECOND MESSAGE FOR TRANSMITTAL TO THE ADDRESSEE. THE GOVERNMENT WAS NOT ADVISED OF THE ATTEMPTED MODIFICATION WITHDRAWAL UNTIL AFTER BID OPENING AND RECEIPT OF THE MODIFICATION, AND EVEN THEN THE INITIAL ADVICE WAS NOT RECEIVED BY TELEGRAM OR FROM THE TELEGRAPH COMPANY, BUT FROM THE BIDDER. ACCORDINGLY, THERE WAS NO EFFECTIVE WITHDRAWAL OF THE BID MODIFICATION. THIS CONCLUSION RENDERS UNNECESSARY ANY DETERMINATION WHETHER A TELEGRAPHIC MESSAGE DISPATCHED FROM NEW ROCHELLE AT 2:44 P.M., JUNE 13, WOULD HAVE BEEN DELIVERED VIANORMAL TRANSMISSION PROCEDURES TO THE BID OPENING OFFICE PRIOR TO 3:00 P.M. THE SAME DAY, THE TIME FIXED IN THE INVITATION FOR BID OPENING.

IN VIEW OF THE FOREGOING, AWARD TO SALERNO AT HIS REDUCED BID PRICE WAS PROPER. IT FOLLOWS THAT NO LEGAL BASIS EXISTS FOR ALLOWANCE OF A CONTRACT PRICE INCREASE, AND YOUR REQUEST FOR SUCH INCREASE IS THEREFORE DENIED.