B-167298, AUG. 5, 1969

B-167298, AUG. 5, 1969

BID PROTEST - LATE BID DECISION TO ALLIS-CHALMERS CONCERNING PROPRIETY OF CONSIDERATION OF LATE BID OF KOPPERS-HARDINGE FOR FURNISHING GRINDERS TO A TURKISH FIRM UNDER AN AID FINANCED PROJECT. RECONSIDERATION OF DECISION OF JULY 17, 1969. IT IS CONCLUDED THAT SINCE INSTRUCTIONS DO NOT PRECLUDE CONSIDERATION OF LATE BIDS, DETERMINATION TO CONSIDER LATE BID IS PROPER. ALSO RECORD SUPPORTS VIEW THAT DELAY IN TRANSMITTAL OF KOPPERS HARDINGE BID WAS NOT DUE TO FAULT OR NEGLIGENCE OF BIDDER. AWARD SHOULD BE BASED ON PRESENT BIDS.

TO ALLIS-CHALMERS:

REFERENCE IS MADE TO THE LETTER OF JULY 23, 1969, REQUESTING RECONSIDERATION OF OUR DECISION, B-167298, JULY 17, 1969, IN WHICH WE CONSIDERED THE PROCUREMENT OF A QUANTITY OF AUTOGENOUS GRINDERS BY THE BLACK SEA COPPER COMPANY, A FIRM IN TURKEY, FOR A PROJECT FINANCED UNDER LOAN NO. 277-H-076 WITH THE AGENCY FOR INTERNATIONAL DEVELOPMENT (AID). WE CONCLUDED THAT THE BID OF KOPPERS-HARDINGE, WHICH ARRIVED AFTER THE SCHEDULED DATE FOR OPENING AND AFTER THE BID OF ALLIS CHALMERS HAD BEEN OPENED, COULD BE CONSIDERED FOR AWARD.

THE FACTS REGARDING THIS MATTER HAVE BEEN STATED IN OUR DECISION OF JULY 17, 1969, AND WILL NOT BE REPEATED HERE EXCEPT TO SUCH EXTENT AS THEY MAY BE BROUGHT INTO ISSUE BY THE REQUEST FOR RECONSIDERATION.

THE BASIC LEGAL ARGUMENT OFFERED BY COUNSEL FOR ALLIS-CHALMERS IS THAT THE COVER LETTER TO THE INVITATION (REFERRED TO IN THE LETTER OF JULY 23 AS THE TYPEWRITTEN PORTION) TAKES PRECEDENCE OVER THE LANGUAGE IN PARAGRAPH 5.1 OF THE INSTRUCTIONS TO BIDDERS (REFERRED TO IN THE LETTER OF JULY 23 AS THE PRINTED SPECIFICATIONS). THE COVER LETTER WITH THE INVITATION STATES AS FOLLOWS IN PERTINENT PART: "GENTLEMEN: "YOU ARE HEREBY ADVISED THAT SEALED BIDS IN SIX (6) COPIES SUBJECT TO THE TERMS AND CONDITIONS OF THIS BID INVITATION AND OTHER CONTRACT PROVISIONS AND SPECIFICATIONS AS ARE ATTACHED OR REFERRED TO HEREIN, WILL BE RECEIVED * * * UNTIL 16:00 HOURS ON FEB. 14 1969 AND AT THAT TIME PUBLICLY OPENED, * * *.' PARAGRAPH 5.1 OF THE INSTRUCTIONS TO BIDDERS STATES AS FOLLOWS IN PERTINENT PART: "ALL PROPOSALS MUST BE SUBMITTED IN SEALED ENVELOPES AND PROPERLY IDENTIFIED BY THE INQUIRY NUMBER. PROPOSALS WILL BE OPENED AND READ PUBLICLY AT THE KARADENIZ BAKIR ISLETMELERI, A. S. OFFICE IN ANKARA. SEALED BIDS SHALL BE DELIVERED IN PERSON OR BY REGISTERED MAIL TO:

* * * * * * * "ALL BIDS SUBMITTED PROPERLY AND WHICH ARE RESPONSIVE WILL BE TAKEN UNDER CONSIDERATION.'THE ENVELOPE ENCLOSING THE BID SHALL BEAR THE BIDDER'S NAME AND ADDRESS. THE TURKISH LABEL ENCLOSED IN THIS - INVITATION FOR BID- SHALL BE SECURELY AFFIXED TO THE ENVELOPE. ONLY PROPOSALS SUBMITTED ON OR BEFORE THE CLOSING DATE WILL BE CONSIDERED. TELEGRAPHIC BIDS WILL NOT BE CONSIDERED. BIDS MAY BE MODIFIED BY TELEGRAPHIC NOTICE PROVIDED SUCH NOTICE IS RECEIVED PRIOR TO THE TIME SET FOR THE OPENING OF THE BIDS.' THREE DECISIONS OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA) ARE CITED IN SUPPORT OF THIS PROPOSITION. THESE DECISIONS ARE APPEAL OF KOCH REFRIGERATORS, INC., ASBCA NO. 3910, MAY 27, 1957; APPEAL OF AIRWORK CORPORATION, ASBCA NO. 5050, AUGUST 26, 1958; AND APPEAL OF JAPAN AIRCRAFT MANUFACTURING COMPANY, LTD., ASBCA NOS. 5881 AND 5882, MARCH 10, 1961.

SEVERAL OTHER ARGUMENTS HAVE BEEN PRESENTED IN THE LETTER OF JULY 23, ONE IS THAT SINCE KOPPERS-HARDINGE MAINTAINS A PERMANENT OFFICE IN ANKARA, THIS FIRM SHOULD HAVE TAKEN SOME ACTION TO ASSURE THE CLEARANCE OF ITS BID THROUGH TURKISH CUSTOMS. IN THE ABSENCE OF SUCH ACTION, IT IS ARGUED, IT CANNOT BE CONCLUDED THAT KOPPERS-HARDINGE WAS FREE FROM FAULT OR NEGLIGENCE.

IT IS ASSERTED IN THE LETTER OF JULY 23 THAT SINCE KOPPERS HARDINGE'S BID WAS INITIALLY RETURNED TO THE SENDER, THE BUYER MUST HAVE DECIDED THAT THIS BID COULD NOT BE ACCEPTED AND THAT SINCE THIS WAS A DECISION BY THE BUYER INTERPRETING THE INVITATION AND SPECIFICATIONS, IT SHOULD BE CONSIDERED AS CONTROLLING BY AID. THE LETTER OF JULY 23 ADVISES THAT OUR OFFICE WAS FURNISHED WITH DOCUMENTATION CONCERNING THE ETIBANK GENERAL MANAGEMENT SOLICITATION FOR THE PURCHASE OF 15.8 KV SHUNT REACTORS AND THAT THIS INFORMATION WAS NOT CONSIDERED IN OUR DECISION.

ON PAGE 3 OF OUR DECISION OF JULY 17, WE RAISED THE QUESTION WHETHER ANY BID COULD BE CONSIDERED AS LATE SINCE THE SCHEDULED TIME FOR BID OPENING WAS IGNORED AND NO TIME WAS EVER FORMALLY SET FOR THE POSTPONED OPENING. IT IS URGED IN THE LETTER OF JULY 23, THAT THIS PORTION OF OUR DECISION WAS NOT CAREFULLY CONSIDERED. YOUR LETTER ASKS WHETHER THE OPENING OF ALLIS-CHALMERS' BID COULD BE CONSIDERED AS A MERE FORMALITY AND WHETHER ALLIS-CHALMERS MAY NOW SUBMIT ANOTHER BID TO BE OPENED TOGETHER WITH KOPPERS-HARDINGE'S BID.

WE HAVE ALSO RECEIVED A COPY OF AN AID SMALL BUSINESS MEMO DATED JULY 23, 1969, APPLICABLE TO ,INVITATIONS FOR BIDS HEREAFTER ISSUED" ENTITLED "FORMAL COMPETITIVE BID PROCEDURE LATE BIDS.' THE PERTINENT PARAGRAPH OF THIS MEMO IS AS FOLLOWS:

"UNDER THIS NEW POLICY, A LATE BID WILL NOT BE CONSIDERED EVEN THOUGH IT BECAME LATE BECAUSE OF FACTORS BEYOND THE BIDDER'S CONTROL SUCH AS DELAYS IN MAIL HANDLING, TELEGRAPHIC TRANSMISSION OR CUSTOMS CLEARANCE. * * *.' THE MEMO PROVIDES THAT LATE BIDS MAY BE CONSIDERED ONLY WHERE THE BID ARRIVES BEFORE AWARD AND WHERE THE DELAY IS DUE TO MISHANDLING BY THE PURCHASER. THE MEMO FURTHER STATES THAT THE PRUDENT POLICY IS FOR BIDDERS TO HAND CARRY THEIR BIDS AND HENCEFORTH RELIANCE ON THE MAILS, WHETHER OR NOT REGISTERED, IS AT THE BIDDER'S OWN RISK. IT IS URGED THAT THE POLICY SET FORTH IN THIS MEMO SHOULD BE APPLIED TO THE INSTANT CASE.

AID'S POSITION IS THAT PARAGRAPH 5.1, QUOTED ABOVE, DISTINGUISHES BETWEEN THE WORDS DELIVERED, SUBMITTED, AND RECEIVED AND THAT SUBMITTED DOES NOT NECESSARILY MEAN DELIVERED. AID ARGUES THAT TO SUBMIT MEANS TO YIELD OR TO REFER AND THAT THE DEPOSIT OF A LETTER IN THE POST OFFICE FOR DELIVERY BY REGISTERED MAIL COULD REASONABLY BE CONSIDERED AS BEING SUBMITTED IN THE LIGHT OF THE COMMON DEFINITION OF THE WORD. AID'S CONCLUSION IS THAT THE INVITATION FOR BIDS DOES NOT PRECLUDE THE CONSIDERATION OF A LATE BID AND THAT THE KOPPERS-HARDINGE BID SHOULD BE OPENED AND CONSIDERED.

WE DO NOT AGREE WITH YOUR CONTENTION THAT THE THREE CITED ASBCA DECISIONS REQUIRE THE CONCLUSION THAT THE COVER LETTER WITH THE INVITATION TAKES PRECEDENCE OVER PARAGRAPH 5.1 OF THE INSTRUCTIONS TO BIDDERS. IN THE APPEAL OF AIRWORK CORPORATION DECISION, SUPRA, A CONTRACTOR SUBMITTED A COVER LETTER WHICH QUALIFIED THE ENCLOSED EXECUTED CONTRACT DOCUMENT WHICH WAS BEING RETURNED TO THE PROCURING ACTIVITY. THE BOARD HELD THAT THE QUALIFICATION IN THE COVER LETTER WAS A COUNTEROFFER WHICH MUST BE CONSIDERED IN CONNECTION WITH THE EXECUTED DOCUMENT. IT WAS CLEAR THAT THE CONTRACTOR INTENDED THAT THE COVER LETTER SHOULD QUALIFY THE EXECUTED CONTRACT DOCUMENT.

IN APPEAL OF KOCH REFRIGERATORS, INC., SUPRA, THE ASBCA CONSIDERED A SITUATION WHERE THE SPECIFICATIONS LEFT OPEN WHETHER ONE OR MORE COMPRESSOR MOTORS WOULD HAVE TO BE FURNISHED WITH THE TWO REFRIGERATORS DESCRIBED IN THE SPECIFICATIONS. THE SUCCESSFUL BIDDER INCLUDED A COVER LETTER WITH HIS BID WHICH STATED THAT ONLY ONE COMPRESSOR MOTOR WAS REQUIRED FOR THE TWO UNITS. THE BOARD HELD THAT THE CONSTRUCTION OF THE SPECIFICATIONS IN THE COVER LETTER COULD NOT BE IGNORED AND THAT THE CONTRACTOR WOULD BE ENTITLED TO A PROPER ADJUSTMENT IF REQUIRED TO FURNISH MORE THAN ONE COMPRESSOR.

THERE IS NOTHING IN THE FACTS OF THE INSTANT CASE WHICH WOULD INDICATE THAT IT WAS INTENDED THAT THE COVER LETTER TO THE INVITATION SHOULD BE CONSIDERED EXCLUSIVELY OF THE OTHER PROVISIONS OF THE INVITATION. IN THE CIRCUMSTANCES WE DO NOT FIND THE ABOVE TWO ASBCA DECISIONS AS CONTROLLING HERE.

WE HAVE ALSO REVIEWED APPEAL OF JAPAN AIRCRAFT MANUFACTURING COMPANY, SUPRA. THE QUESTION IN THAT CASE WAS WHETHER CERTAIN REQUIREMENTS IN A TECHNICAL ORDER WHICH WAS ONE OF MORE THAN 800 TECHNICAL ORDERS INCORPORATED INTO APPELLANT'S CONTRACTS COULD BE REQUIRED AS PART OF THESE CONTRACTS ON THE BASIS OF GENERALIZED LANGUAGE THAT APPEARED IN THE APPENDIX TO EACH OF THE CONTRACTS. THERE IS NOTHING IN THIS BOARD DECISION WHICH WOULD REQUIRE THE CONCLUSION THAT THE COVER LETTER MUST BE CONSIDERED AS TAKING PRECEDENCE OVER OTHER PROVISIONS IN THE INVITATION.

IT IS A FUNDAMENTAL PRINCIPLE THAT ALL RELEVANT PROVISIONS ARE TO BE CONSIDERED IN CONTRACT INTERPRETATION. THE COVER LETTER SPECIFICALLY STATES THAT BIDS ARE "SUBJECT TO THE TERMS AND CONDITIONS OF THIS BID INVITATION AND OTHER CONTRACT PROVISIONS OR SPECIFICATIONS AS ARE ATTACHED OR REFERRED TO HEREIN.' IN THIS CASE BOTH THE COVER LETTER AND PARAGRAPH 5.1 OF THE INSTRUCTIONS TO BIDDERS MUST BE CONSIDERED IN DETERMINING WHETHER THIS INVITATION EXPRESSLY PRECLUDES THE CONSIDERATION OF LATE BIDS. FOR THE REASONS PREVIOUSLY STATED THIS RESULT IS NOT INCONSISTENT WITH THE ASBCA DECISIONS CITED IN THE LETTER OF JULY 23.

THERE IS PRECEDENT FOR THE PROPOSITION THAT A PROVISION IN AN INVITATION THAT BIDS WILL BE RECEIVED UNTIL A CERTAIN HOUR DOES NOT REQUIRE THE CONCLUSION THAT THE INVITATION SPECIFICALLY PRECLUDES THE CONSIDERATION OF LATE BIDS. SEE B-107417, APRIL 11, 1952, WHEREIN IT WAS STATED AS FOLLOWS:

"WHILE THE INVITATION ADVISED PROSPECTIVE BIDDERS THAT PROPOSALS WOULD BE RECEIVED UNTIL 11:00 A.M. ON NOVEMBER 29, 1951, AND THEN PUBLICLY OPENED AND DID NOT PROVIDE FOR THE CONSIDERATION OF BIDS RECEIVED AFTER THAT HOUR, SUCH FACT DOES NOT CONSTITUTE A SUFFICIENT BASIS FOR HOLDING THAT THE ACTION OF THE DEPARTMENT OF THE NAVY IN CONSIDERING THE LATE BID HERE IN QUESTION WAS NOT LEGAL OR WAS NOT WITHIN THE AUTHORITY TO BE EXERCISED BY THAT DEPARTMENT IN THE MATTER. AS WAS POINTED OUT IN THE DECISION OF MARCH 11, 1952, THE DELAYED RECEIPT OF THE PROPOSAL WAS NOT DUE TO THE FAULT OR NEGLIGENCE OF THE BIDDER. THE PROPOSAL WAS MAILED EARLY ENOUGH TO HAVE BEEN DELIVERED BY THE TIME SPECIFIED FOR THE OPENING. HENCE, THE SPONSOR COULD NOT HAVE HAD ANY KNOWLEDGE OF THE AMOUNTS OF THE OTHER PROPOSALS AND OBVIOUSLY DID NOT SUBMIT ITS PROPOSAL LATE IN AN ATTEMPT TO GAIN AN UNFAIR ADVANTAGE OVER THE OTHER BIDDERS. UNDER SUCH CIRCUMSTANCES, THE RIGHTS OF THE OTHER BIDDERS COULD NOT HAVE BEEN PREJUDICED BY THE SELECTION OF THAT BIDDER AS A SPONSOR.'

IN B-163777, APRIL 16, 1968, IT WAS ALSO HELD THAT A LATE BID MIGHT PROPERLY BE CONSIDERED EVEN THOUGH THE INVITATION DID NOT CONTAIN ANY SPECIFIC PROVISIONS PERMITTING THE CONSIDERATION OF LATE BIDS. THE SOLICITATION IN THAT CASE CONTAINED LANGUAGE WHICH IS VERY SIMILAR TO THAT IN THE COVER LETTER TO THE INSTANT PROCUREMENT. THE PROVISION IN B-163777 STATED THAT SEALED PROPOSALS WOULD BE RECEIVED "AT THE OFFICE OF THE BUREAU OF RECLAMATION, P.O. BOX 1629, GREAT FALLS, MONTANA, UNTIL 0:00 A.M., DECEMBER 21, 1967.' IT WAS FOUND THAT THIS PROVISION DID NOT EXPRESSLY PRECLUDE THE CONSIDERATION OF A LATE BID.

PURSUANT TO OUR REVIEW WE FIND THAT THE COVER LETTER AND PARAGRAPH 5.1 OF THE INSTRUCTIONS TO BIDDERS DO NOT EXPRESSLY PRECLUDE THE CONSIDERATION OF LATE BIDS; THEREFORE, AID'S DECISION TO CONSIDER THE KOPPERS-HARDINGE BID WOULD BE CONSISTENT WITH THE PRECEDENT IN B 107417, APRIL 11, 1952, AND B- 163777, APRIL 16, 1968.

WITH RESPECT TO WHETHER KOPPERS-HARDINGE WAS NEGLIGENT IN NOT TAKING SOME AFFIRMATIVE STEPS TO ASSURE THAT ITS BID WOULD NOT BE HELD UP IN TURKISH CUSTOMS, THE REPORT FROM AID STATES AS FOLLOWS: "THE KOPPERS COMPANY HAS EXTENSIVE EXPERIENCE IN DEALING IN TURKEY. WE WERE ADVISED, HOWEVER, THAT THE PEOPLE AT THE HARDINGE PLANT ARE NOT SO EXPERIENCED AND THAT THE USUAL INTERNATIONAL FACILITIES OF KOPPERS WERE NOT USED IN THIS CASE. ON THE OTHER HAND, THE HARDINGE PERSONNEL ASKED MCKEE OVERSEAS CORPORATION, THE CONSULTING ENGINEER ENGAGED BY THE BUYER, ABOUT MAILING. THEY WERE TOLD THAT THERE WAS NO NEED TO BE REPRESENTED AT THE OPENING, THAT MAILING WOULD BE SATISFACTORY, AND THAT MAIL FROM SAN FRANCISCO, WHERE MCKEE IS LOCATED, TAKES ABOUT SEVEN DAYS.'IN THESE CONVERSATIONS, THERE WAS NO WARNING OF POSSIBLE DELAYS IN THE MAIL OR CUSTOMS.'WHAT EXPERIENCE HARDINGE HAD GAVE IT NO WARNING OF THE RISK. THE FIRM MAILED TWO OTHER ITEMS DURING THE FIRST TWO WEEKS IN MARCH, ONE A SIZABLE PARCEL, FROM YORK, PENNSYLVANIA TO THE BUYER, AND EACH WAS DELIVERED IN SIX DAYS.'THE HARDINGE PEOPLE COULD REASONABLY ASSUME THAT MCKEE WITH ITS KNOWLEDGE AND EXPERIENCE, WOULD WARN IT OF RISKS INVOLVED IN MAILING IF THERE WERE ANY REAL ONES THAT PRUDENT BIDDERS SHOULD AVOID. MOREOVER, MCKEE WAS DESIGNATED IN THE INVITATION AS THE BUYER'S REPRESENTATIVE TO WHICH BIDDERS COULD DIRECT REQUESTS FOR CLARIFICATION. IN THESE CIRCUMSTANCES, WE DO NOT HAVE A BASIS TO SAY KOPPERS-HARDINGE WAS IMPRUDENT IN CHOOSING TO USE THE MAILS AND IN NOT TAKING SPECIAL PRECAUTIONS AGAINST A DELAY IN CUSTOMS. ON THE BASIS OF THE PRESENT EXPERIENCE, HOWEVER, IT WOULD BE DIFFICULT TO CONCLUDE THAT A FUTURE REPETITION WOULD BE PRUDENT.'

PARAGRAPH 5.1 OF THE INSTRUCTIONS TO BIDDERS PROVIDES THAT THE "TURKISH LABEL" INCLUDED WITH THE INVITATION FOR BIDS SHOULD BE ATTACHED TO THE BID PACKAGE. IT IS ALSO PROVIDED THAT THE INQUIRY NUMBER SHOULD BE PLACED ON THE BIDS. WE ASSUME THAT THE "TURKISH LABEL" WAS AFFIXED TO THE KOPPERS- HARDINGE BID. AID HAS ADVISED THAT IT WOULD BE NECESSARY TO CONTACT THE MISSION IN ANKARA TO FIND OUT EXACTLY WHAT WAS STATED ON THE "TURKISH LABEL" AND THAT THIS WOULD TAKE SEVERAL DAYS TO PROCESS. BECAUSE OF THE URGENCY INVOLVED IN RENDERING OUR DECISION WE HAVE NOT SPECIFICALLY REQUESTED THIS INFORMATION. HOWEVER, THE PURPOSE OF THE "TURKISH LABEL" OBVIOUSLY WAS TO IDENTIFY PARCELS AS BIDS TO THE BID OPENING OFFICE. WOULD SEEM TO FOLLOW THAT PARCELS WITH THE "TURKISH LABEL" ATTACHED WOULD ALSO BE RECOGNIZED AS BIDS BY OFFICIALS IN TURKISH CUSTOMS. AGAIN, BECAUSE OF THE URGENCY FACTOR WE HAVE NOT ATTEMPTED TO INVESTIGATE THE INTERNAL PROCEDURES OF TURKISH CUSTOMS TO ASCERTAIN WHETHER THERE IS SOME SPECIAL PROCEDURE APPLICABLE IN THE SITUATION WHERE A BID PARCEL PASSES THROUGH TURKISH CUSTOMS. IN OUR VIEW IT DOES NOT SEEM IMPRUDENT FOR A BIDDER TO ASSUME THAT CUSTOMS OFFICIALS WILL NOT UNNECESSARILY DELAY A PARCEL HAVING INDICATIONS ON IT THAT IT IS A BID. PURSUANT TO OUR REVIEW WE FIND THAT THE RECORD SUPPORTS AID'S CONCLUSION THAT THE DELAY IN THE TRANSMITTAL OF THE KOPPERS-HARDINGE BID WAS NOT DUE TO THE FAULT OR NEGLIGENCE OF THE BIDDER.

IN REGARD TO WHETHER THE BUYER'S JUDGMENT THAT THE KOPPERS-HARDINGE BID SHOULD NOT BE CONSIDERED IS CONTROLLING, AID'S REPORT STATES AS FOLLOWS: "THE BUYER IN THIS CASE WAS PREPARED TO REJECT THE LATE BID. GREAT WEIGHT IS GIVEN TO THE BUYERS' JUDGMENT AND A.I.D. DOES NOT SUBSTITUTE ITS VIEWS FOR THOSE OF A BUYER. WE ARE OBLIGED BY STATUTE TO REVIEW AND APPROVE PROCUREMENTS, HOWEVER, WITH A VIEW TOWARD MAXIMIZING COMPETITION AND FAIRNESS TO BIDDERS. THESE CONSIDERATIONS DICTATE OPENING THE KOPPERS- HARDINGE BID, GIVEN THE LANGUAGE OF THE INVITATION AND THE CIRCUMSTANCES.' IT IS WITHIN AID'S AUTHORITY TO WITHHOLD APPROVAL OF A LOAN TO A FOREIGN GOVERNMENT IN APPROPRIATE CIRCUMSTANCES WHERE AID MAY NOT AGREE WITH A BUYER'S DECISION ON A CERTAIN MATTER. SEE B-158692, APRIL 11, 1966. PURSUANT TO OUR REVIEW WE FIND THAT THE CIRCUMSTANCES OF THIS CASE WOULD SUPPORT AID'S DETERMINATION NOT TO APPROVE THE BUYER'S DECISION THAT THE KOPPERS HARDINGE BID SHOULD BE REJECTED.

THE COPY OF THE INSTRUCTIONS TO BIDDERS ON THE ETIBANK GENERAL MANAGEMENT SOLICITATION FOR THE PURCHASE OF 15.8 KV SHUNT REACTORS FURNISHED TO OUR OFFICE WITH ALLIS-CHALMERS' LETTER OF JUNE 18, 1969, PROVIDED AS FOLLOWS: "SUBMISSION OF BIDS

SEALED BIDS SHALL BE SUBMITTED IN DUPLICATE ON THE FORMS FURNISHED AND SHALL BE DELIVERED IN PERSON OR BY REGISTERED AIR MAIL NOT LATER THAN 2:30 PM LOCAL TIME DECEMBER 24, 1968 TO * * * AT WHICH TIME AND PLACE THEY WILL BE PUBLICLY OPENED AND PRICES READ.' IT IS URGED IN THE LETTER OF JUNE 18 THAT THE ABOVE LANGUAGE IS IDENTICAL TO THAT IN THE BLACK SEA PROJECT. DO NOT AGREE. THE ABOVE SOLICITATION USES THE WORD "DELIVERED" WHILE THE INSTANT INVITATION USES THE WORD ,RECEIVED" IN THE COVER LETTER AND THE WORD "SUBMITTED" IN PARAGRAPH 5.1. WITHOUT A FULL REPORT ON THE ETIBANK SOLICITATION WE DO NOT KNOW THE SPECIFIC REASON FOR THE REJECTION OF ALLIS -CHALMERS' BID TO THAT SOLICITATION. ALSO, WE CANNOT SAY WHETHER OR NOT WE WOULD AGREE WITH AID'S DECISION IF ALL THE FACTS WERE KNOWN. CONSEQUENTLY, WE FIND THAT THE ACTIONS TAKEN WITH RESPECT TO THE ETIBANK SOLICITATION WOULD NOT BE CONTROLLING IN THIS CASE.

IN OUR DECISION OF JULY 17, 1969, WE MERELY RAISED THE QUESTION WHETHER ANY BID COULD BE CONSIDERED LATE SINCE NO TIME WAS EVER FORMALLY SET FOR THE POSTPONED OPENING. WE SUGGESTED THAT A NEW BID OPENING TIME SHOULD, PERHAPS, HAVE BEEN FORMALLY SET. THIS WOULD HAVE REQUIRED NOTICE TO ALL BIDDERS OF THE NEW DATE AND RETENTION UNOPENED OF ANY BIDS RECEIVED BEFORE THEN. THIS WAS NOT DONE, AND THE OPENING OF THE ALLIS-CHALMERS BID PRECLUDES ITS BEING DONE THEREAFTER. OUR PRIOR DECISION, HOWEVER, DID NOT TURN ON THIS PROPOSITION ALONE. OUR DECISION WAS BASED PRIMARILY ON OUR FINDING THAT BOTH ALLIS-CHALMERS AND KOPPERS-HARDINGE SUBMITTED THEIR BIDS WITH THE EXPECTATION THAT THE OTHER COMPANY WOULD BID, AND SINCE THE KOPPERS-HARDINGE BID WAS OUT OF THE BIDDER'S CONTROL FROM THE TIME OF MAILING, ALLIS-CHALMERS WOULD NOT BE PREJUDICED IF THE KOPPERS-HARDINGE BID WERE OPENED. FOR THE FURTHER REASONS STATED IN THIS DECISION, IT IS OUR VIEW THAT AID'S DETERMINATION THAT THE INVITATION DID NOT EXPRESSLY PRECLUDE THE CONSIDERATION OF A BID WHICH ARRIVED AFTER THE SCHEDULED OPENING IS NOT WITHOUT PRECEDENT. THESE ARE THE FACTORS WHICH WE CONSIDER TO BE CONTROLLING IN THIS CASE.

THE LETTER OF JULY 23 ASKS IF OUR DECISION MEANS THAT ALLIS-CHALMERS SHOULD BE PERMITTED TO SUBMIT ANOTHER BID TO BE OPENED TOGETHER WITH KOPPERS-HARDINGE'S BID. THE PRICES IN THESE BIDS PRESUMABLY ARE THE ONES ON WHICH EACH OF THE BIDDERS CALCULATED ITS CHANCES FOR AN AWARD WITH EACH COMPANY BIDDING WITH KNOWLEDGE THAT IT WOULD HAVE COMPETITION FROM THE OTHER. IF IT WERE HELD THAT NEW BIDS MAY BE SUBMITTED, BOTH ALLIS- CHALMERS AND KOPPERS-HARDINGE WOULD HAVE TO BE GIVEN THE OPPORTUNITY OF SUBMITTING A NEW BID. IF THIS WERE PERMITTED ALLIS CHALMERS WOULD BE PUT IN A SITUATION WHERE IT WOULD BE AT A DISADVANTAGE IN BIDDING SINCE ITS PRICES HAVE ALREADY BEEN EXPOSED. MOREOVER, IT CAN BE ARGUED THAT AT THE TIME THE ALLIS-CHALMERS' BID WAS PUBLICLY OPENED, THIS CONSTITUTED THE INFORMAL POSTPONED BID OPENING TIME. THE SUBMISSION OF NEW BIDS WOULD CAUSE ADDITIONAL DELAYS IN AWARDING A CONTRACT FOR THIS PROCUREMENT. FIND THEREFORE, THAT THE MOST REASONABLE DISPOSITION OF THIS MATTER IS THAT ADDITIONAL BIDS NOT BE SUBMITTED AND THAT THE AWARD BE MADE BASED ON THE RESULTS OF THE EVALUATION OF THE PRESENT BIDS FROM ALLIS-CHALMERS AND KOPPERS HARDINGE.

WE HAVE BEEN ADVISED THAT THE AID SMALL BUSINESS MEMO DATED JULY 23, 1969, WAS ISSUED AS A RESULT OF THE PROBLEMS ENCOUNTERED IN THIS CASE. ALL OF THE EVENTS THAT GAVE RISE TO THE PRESENT CONTROVERSY OCCURRED PRIOR TO THE DATE THAT THE AID MEMO WAS ISSUED. THE MEMO SPECIFICALLY STATES THAT IT IS TO APPLY TO INVITATIONS HEREAFTER ISSUED AND THERE IS NOTHING TO SHOW THAT THE MEMO WAS MERELY CONFIRMING AID'S PRIOR POLICY. IN THIS REGARD THE MEMO STATES THAT THE POLICY CONTAINED THEREIN IS A "NEW" POLICY. IN THESE CIRCUMSTANCES IT WOULD NOT BE A SOUND PROCEDURE TO APPLY THE AID MEMO TO THE VERY CONTROVERSY WHICH GAVE RISE TO THE ISSUANCE OF THE MEMO. CONSEQUENTLY, WE FIND THAT THE AID MEMO OF JULY 23, 1969, DOES NOT CONSTITUTE A SUFFICIENT BASIS FOR CONCLUDING THAT THE KOPPERS-HARDINGE BID SHOULD NOT BE CONSIDERED.

IN ORDER TO AVOID ANY MISUNDERSTANDING WITH RESPECT TO THE KOPPERS HARDINGE BID, WE HAVE RECOMMENDED THAT THE OPENING OF THIS BID BE PUBLIC.