B-155895, MAR. 25, 1965

B-155895, MAR. 25, 1965

TO VICE ADMIRAL JOSEPH M. LYLE, DIRECTOR, DEFENSE SUPPLY AGENCY:

ON FEBRUARY 8, 1965, YOUR ASSISTANT COUNSEL FORWARDED A REPORT IN CONNECTION WITH A PROTEST FILED BY METROPOLITAN METALS, INC., UNDER DEFENSE SURPLUS SALES OFFICE INVITATION FOR BIDS NO. 44-S-65-44.

AS PROVIDED IN THE INVITATION, BIDS WERE OPENED AT 10:00 A.M., PACIFIC STANDARD TIME, JANUARY 5, 1965. AT THAT TIME THE SALES CONTRACTING OFFICER HAD IN HIS POSSESSION A BID OF $0.0622 PER POUND FOR ITEM NO. 61 FROM METROPOLITAN METALS, INC., AS CONTRASTED WITH A BID OF $0.05 FROM BENJAMIN HARRIS AND COMPANY. LATER THAT AFTERNOON THE SALES OFFICE RECEIVED A TELEGRAM INCREASING THE BID OF BENJAMIN HARRIS AND COMPANY BY $0.01299. CONSIDERATION OF THIS MODIFICATION WOULD RESULT IN AWARD BEING MADE TO BENJAMIN HARRIS AND COMPANY FOR ITEM NO. 61 AT THE PRICE OF $0.06299 PER POUND.

WE HAVE BEEN INFORMED THAT THE TELEGRAPHIC MODIFICATION WAS PLACED WITH WESTERN UNION AT CHICAGO HEIGHTS, ILLINOIS, AT 8:53 A.M., P.S.T., ON JANUARY 5, 1965, AND RECEIVED AT THE DATA COMMUNICATION CENTER BRANCH, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, AT 9:52 A.M., P.S.T. -- EIGHT MINUTES PRIOR TO THE TIME SET FOR BID OPENING. IT IS NOTED THAT THE TELEGRAM WAS ADDRESSED TO THE SALES CONTRACTING OFFICER AND IDENTIFIED THE SALE, BUT DID NOT SPECIFY THE DATE OR TIME OF OPENING NOR DID IT CONTAIN ANY INDICIA OF SPECIAL URGENCY.

BY LETTER DATED JANUARY 26, 1965, A COPY OF WHICH WAS FORWARDED WITH OUR CORRESPONDENCE OF JANUARY 29, METROPOLITAN METALS PROTESTED AGAINST THE CONSIDERATION OF THIS MODIFICATION CONTENDING THAT IT WAS NOT TRANSMITTED IN SUFFICIENT TIME TO THE INSTALLATION TO HAVE BEEN TIMELY DELIVERED TO THE SALES CONTRACTING OFFICER UNDER ARTICLE AD OF THE SPECIAL SEALED BID CONDITIONS. THIS ARTICLE READS AS FOLLOWS:

"ARTICLE AD: TELEGRAPHIC AND TELEPHONIC BIDS. TELEGRAPHIC OR TELEPHONIC BIDS WILL NOT BE CONSIDERED, BUT MODIFICATION BY TELEGRAM OF BIDS ALREADY SUBMITTED, INCLUDING THE SUBMISSION OF BIDS ON ITEMS NOT PREVIOUSLY BID UPON, WILL BE CONSIDERED IF BOTH THE BID AND THE TELEGRAPHIC MODIFICATION THERETO ARE RECEIVED BY THE SALES CONTRACTING OFFICER PRIOR TO THE TIME SET FOR OPENING OF BIDS. BID MODIFICATIONS WHICH INCREASE THE AMOUNT BID MUST PROVIDE FOR INCREASED BID DEPOSIT WHICH MUST BE RECEIVED BY THE SALES CONTRACTING OFFICER PRIOR TO THE TIME SET FOR THE OPENING OF BIDS. TELEGRAPHIC MODIFICATIONS WHICH ARE RECEIVED AFTER THE TIME SET FOR OPENING OF BIDS WILL BE CONSIDERED ONLY IF RECEIVED PRIOR TO AWARD AND IT IS DETERMINED THAT THE TELEGRAM WAS RECEIVED AT THE INSTALLATION AT WHICH THE SALES OFFICE IS LOCATED IN SUFFICIENT TIME TO HAVE BEEN RECEIVED BY THE SALES CONTRACTING OFFICER BY THE TIME SET FOR BID OPENING, AND EXCEPT FOR DELAY DUE TO MISHANDLING ON THE PART OF THE GOVERNMENT, WOULD HAVE BEEN ON TIME. LATE MODIFICATIONS, WHETHER SUBMITTED BY MAIL OR TELEGRAM, AND WHICH MODIFY OTHERWISE HIGH ACCEPTABLE BIDS WILL BE CONSIDERED IF IT IS IN THE INTERESTS OF THE GOVERNMENT TO DO SO.'

IN HIS REPORT DATED JANUARY 15, 1965, THE SALES CONTRACTING OFFICER STATES THAT IT IS ESTABLISHED POLICY IN THE OAKLAND OFFICE TO CONSIDER THE ACTUAL TIME OF RECEIPT OF TELEGRAPHIC MESSAGES ON THE AUTOMATIC TELETYPE RECEIVING MACHINE. THE REASON FOR THIS UNUSUAL PROCEDURE IS THAT THE DATA COMMUNICATIONS BRANCH HAS NO METHOD OF EXPEDITING DELIVERY OF SUCH MESSAGES AND MUST THEREFORE RELY STRICTLY UPON ROUTINE MAIL RUNS. FOR REASONS UNKNOWN TO THIS OFFICE THE COMMUNICATIONS BRANCH IS UNABLE TO PROVIDE ADDRESSEES WITH TELEPHONIC NOTICE OF RECEIPT OF THESE MESSAGES. EXPERIENCE SHOWS, HOWEVER, THAT AT OTHER SALES OFFICES IN REGION 4 TELEGRAMS RECEIVED AT THE COMMUNICATIONS CENTER REACH THE CONTRACTING OFFICER BY TELEPHONE WITHIN LESS THAN EIGHT MINUTES AFTER THEY ARE RECEIVED. IN VIEW THEREOF THE CONTRACTING OFFICER HAS RECOMMENDED ACCEPTANCE OF THE TELEGRAPHIC MODIFICATION.

WHILE IT IS CONCEDED THAT THE FACILITY OF TRANSMITTAL BY WHICH THE DATA COMMUNICATIONS BRANCH DELIVERS TELEGRAMS TO THE SALES OFFICE AT OAKLAND IS NOT ONE WHICH FOSTERS DELIVERY WITHIN A REASONABLE TIME, YOUR DEPARTMENT DOES NOT AGREE THAT THE FAILURE OF THIS MODIFICATION TO ARRIVE BY BID OPENING TIME RESULTED FROM "MISHANDLING" BY GOVERNMENT PERSONNEL. SUPPORT OF YOUR POSITION YOU STATE:

"* * * IT IS TO BE NOTED THAT THE HARRIS' TELEGRAM IDENTIFIED THE SALE BUT IT DID NOT IDENTIFY THE DATE OR THE TIME OF OPENING. IT WAS RECEIVED AT THE COMMUNICATIONS BRANCH, LOCATED APPROXIMATELY 1/2 MILE FROM THE SALES OFFICE, EIGHT MINUTES BEFORE THE SALE OPENED. WERE IT THE POLICY OF THE BRANCH TO DELIVERY TELEGRAMS BY SPECIAL MESSENGER, IT WOULD APPEAR THAT TIMELY DELIVERY TO THE SALES OFFICE WOULD NOT HAVE BEEN EFFECTED IN THIS CASE. WHERE (WERE) IT THE POLICY OF THE BRANCH TO GIVE ADDRESSEES TELEPHONIC NOTIFICATION OF THE RECEIPT OF A TELEGRAM, IT WOULD BE DIFFICULT TO FIND THAT THE FAILURE TO EFFECT SUCH NOTIFICATION WITHIN EIGHT MINUTES AFTER RECEIPT, CONSTITUTED "MISHANDLING"--- PARTICULARLY IF THE MESSAGE DOES NOT INDICATE THE BID OPENING TIME. HAD THE TELEGRAPHIC MODIFICATION INDICATED THE DATE AND TIME OF OPENING OF THE SALE, THIS CENTER MIGHT BE PRONE TO CHARGE THE GOVERNMENT WITH THE RESPONSIBILITY TO ACT IMMEDIATELY UPON RECEIPT OF THE MESSAGE. ON THOSE FACTS, A DETERMINATION THAT THE MESSAGE WAS ,MISHANDLED" MIGHT BE SUPPORTABLE. HOWEVER SUCH WAS NOT THE CASE IN THIS INSTANCE.'

IN OUR DECISION B-152288, OCTOBER 3, 1963, OUR OFFICE DEALT WITH A SITUATION WHERE A LATE BID MODIFICATION HAD, IN FACT, BEEN DELIVERED TO THE BASE COMMUNICATIONS CENTER SOME TWO AND ONE-HALF HOURS PRIOR TO THE TIME SET FOR BID OPENING. IN HOLDING THAT THE DELAY IN TRANSMISSION FROM THE COMMUNICATIONS CENTER TO THE SALES OFFICE AMOUNTED TO A MISHANDLING PER SE WE POINTED OUT THAT THE GOVERNMENT IS OBLIGATED TO USE A FACILITY OF TRANSMITTAL WHICH WILL PERMIT DELIVERY OF A TELEGRAPHIC MODIFICATION WITHIN A REASONABLE TIME AFTER RECEIPT THEREOF AT THE INSTALLATION. WHILE WE CAN VISUALIZE SOME INSTANCES WHERE THE EIGHT MINUTE DELAY COULD BE CONSIDERED UNREASONABLE, WE DO NOT BELIEVE THAT THERE CAN BE A CHARGE OF MISHANDLING IN THIS CASE. SEE B-155061, OCTOBER 9, 1964; B-148370, APRIL 2, 1962.

IN ORDER TO ESTABLISH A CASE OF MISHANDLING THERE MUST EXIST A DIRECT RELATIONSHIP BETWEEN THE METHOD OF HANDLING AND THE SUBSEQUENT FAILURE TO DELIVER A TELEGRAPHIC MODIFICATION PRIOR TO BID OPENING TIME. ASSUMING ARGUENDO THAT IT WAS ESTABLISHED POLICY TO EITHER TELEPHONE OR PERSONALLY DELIVER TELEGRAPHIC MODIFICATIONS WITHIN TEN OF FIFTEEN MINUTES AFTER RECEIPT THEREOF, WE COULD NOT SAY AS A MATTER OF LAW THAT SUCH A PROCEDURE WAS INVALID. RATHER, WE BELIEVE THAT INTERNAL PROCEDURES FOR HANDLING BID MODIFICATIONS ARE FOR ESTABLISHMENT BY THE VARIOUS AGENCIES SUBJECT TO CRITICISM BY THIS OFFICE WHEN THOSE PROCEDURES DO NOT PROVIDE FOR DELIVERY WITHIN A REASONABLE TIME. FOR OUR OFFICE TO CONCLUDE THAT EIGHT MINUTES-- - OR FOR THAT MATTER TEN OR FIFTEEN MINUTES--- IS SUFFICIENT TIME TO DELIVER A TELEGRAPHIC MODIFICATION WOULD BE TANTAMOUNT TO FORCING THE VARIOUS SALES OFFICES TO ADOPT UNIVERSAL PROCEDURES WHICH MAY NOT AS A PRACTICAL MATTER BE FEASIBLE. AS PREVIOUSLY INDICATED, WE ARE UNABLE TO FIND THAT THE FAILURE OF THE COMMUNICATIONS CENTER TO DELIVER THE HARRIS TELEGRAM WITHIN EIGHT MINUTES AFTER ITS RECEIPT AMOUNTS TO MISHANDLING PER SE. TO REQUIRE PERSONNEL AT THE VARIOUS COMMUNICATION CENTERS TO IMMEDIATELY EXAMINE EACH TELEGRAM AND ASCERTAIN WHETHER IT REQUIRES SPECIAL HANDLING REGARDLESS OF WHETHER OR NOT THERE IS SOME INDICATION THAT IT SHOULD BE HANDLED IN AN EXPEDITIOUS MANNER WOULD, IN OUR OPINION, UNDULY BURDEN PERSONNEL AT THESE STATIONS. THEREFORE, SINCE THE INVITATION SPECIFICALLY INFORMED BIDDERS THAT LATE BID MODIFICATIONS WOULD NOT BE CONSIDERED EXCEPT FOR DELAY DUE TO GOVERNMENT PERSONNEL AND WE FIND THAT THE MODIFICATION WAS NOT TIMELY RECEIVED AT THE COMMUNICATIONS BRANCH THE LATE TELEGRAPHIC MODIFICATION FOR ITEM 61 SHOULD NOT BE CONSIDERED.

IN SO HOLDING WE ARE NOT UNMINDFUL OF THE FACT THAT BIDDERS OFTEN BID THESE ITEMS WITH THE INTENTION OF LATER MODIFYING THEIR BIDS AND THAT IT WAS ONLY BECAUSE OF THE ATTEMPT TO GET THE VERY LATEST MARKET QUOTATION THAT THE TELEGRAM WAS NOT TIMELY SENT. HAD MR. HARRIS CHOSEN TO RELY UPON THE PRIOR DAY'S QUOTATION (AS DID METROPOLITAN METALS), IN ALL PROBABILITY, HIS AMENDED BID WOULD HAVE BEEN TIMELY. WHILE OUR RESULT MAY APPEAR HARSH, STRICT ADHERENCE TO THE RULES OF COMPETITIVE BIDDING IS, OVER THE LONG RUN, IN THE GOVERNMENT'S BEST INTEREST.

STRICT ADHERENCE TO RECENT INSTRUCTIONS APPEARING IN CIRCULAR LETTER DISC -MS 337, FEBRUARY 2, 1965, SHOULD PREVENT A RECURRENCE OF THIS PROBLEM.