B-144371, NOVEMBER 16, 1960, 40 COMP. GEN. 290

B-144371, NOVEMBER 16, 1960, 40 COMP. GEN. 290

BIDS - LATE - TELEGRAPHIC BIDS - NORMAL V. ABNORMAL DELAYS THE "NORMAL, USUAL AND FORESEEABLE DELAYS" WHICH BIDDERS, WHO TRANSMIT BIDS OR MODIFICATIONS BY TELEGRAPH, MUST TAKE INTO ACCOUNT BEFORE THEIR LATE BIDS MAY BE CONSIDERED ON THE BASIS OF HAVING BEEN DELAYED FOR AN ABNORMAL PERIOD OF TIME BY THE TELEGRAPH COMPANY ARE THOSE DELAYS WHICH MIGHT BE EXPECTED OR ANTICIPATED IN THE NORMAL ROUTINE BY WHICH THE TELEGRAPH COMPANY ACCOMPLISHES DELIVERY; THEREFORE, A TELEGRAPHIC BID MODIFICATION WHICH WAS TRANSMITTED FROM NEWTONVILLE, MASSACHUSETTS, 40 MINUTES BEFORE BID OPENING, BUT WHICH WAS NOT RECEIVED IN THE NEW YORK CITY BID OPENING OFFICE UNTIL 10 MINUTES AFTER OPENING, HAVING TAKEN 50 MINUTES IN TRANSMISSION, MAY NOT BE REGARDED AS HAVING BEEN ABNORMALLY DELAYED TO BE CONSIDERED FOR AWARD.

TO B. J. KATZ, DEPARTMENT OF THE NAVY, NOVEMBER 16, 1960:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 1, 1960, REQUESTING A DECISION AS TO WHETHER A TELEGRAPHIC MODIFICATION OF THE BID OF FRANCHI CONSTRUCTION COMPANY, INC., SHOULD BE CONSIDERED FOR AWARD UNDER SPECIFICATION NO. 26755/59.

THE INVITATION ISSUED BY THE DEPARTMENT OF THE NAVY, BUREAU OF YARDS AND DOCKS, AREA PUBLIC WORKS OFFICE, 633 FEDERAL OFFICE BUILDING, 90 CHURCH STREET, NEW YORK 7, NEW YORK, REQUESTED BIDS TO BE RECEIVED UNTIL 3:00 P.M; EDT, ON OCTOBER 20, 1960, FOR THE CONSTRUCTION OF UNDERSEA WARFARE RESEARCH BUILDING AT THE U.S. NAVY UNDERWATER SOUND LABORATORY, FORT TRUMBULL, NEW LONDON, CONNECTICUT.

SUBPARAGRAPHS 5 (D) AND 7 (B) OF THE INSTRUCTIONS TO BIDDERS (CONSTRUCTION CONTRACTS), STANDARD FORM 22, REVISED MARCH 1953, WHICH ACCOMPANIED THE INVITATION, ADVISED ALL BIDDERS AS FOLLOWS:

5 (D) UNLESS SPECIFICALLY CALLED FOR, TELEGRAPHIC BIDS WILL NOT BE CONSIDERED. MODIFICATION BY TELEGRAPH OF BIDS ALREADY SUBMITTED WILL BE CONSIDERED IF RECEIVED PRIOR TO THE TIME FIXED IN THE INVITATION FOR BIDS. TELEGRAPHIC MODIFICATIONS SHALL NOT REVEAL THE AMOUNT OF THE ORIGINAL OR REVISED BID.

7 (B) SUBJECT TO THE PROVISIONS OF PARAGRAPH 5 (D) OF THESE INSTRUCTIONS, BIDS OR BID MODIFICATIONS WHICH WERE DEPOSITED FOR TRANSMISSION BY TELEGRAPH IN TIME FOR RECEIPT, BY NORMAL TRANSMISSION PROCEDURE, PRIOR TO THE TIME FIXED IN THE INVITATION FOR BIDS AND SUBSEQUENTLY DELAYED BY THE TELEGRAPH COMPANY THROUGH NO FAULT OR NEGLECT ON THE PART OF THE BIDDER, WILL BE CONSIDERED IF RECEIVED PRIOR TO THE AWARD OF THE CONTRACT. THE BURDEN OF PROOF OF SUCH ABNORMAL DELAY WILL BE UPON THE BIDDER AND THE DECISION AS TO WHETHER OR NOT THE DELAY WAS SO CAUSED WILL REST WITH THE OFFICER AWARDING THE CONTRACT.

THE RECORD SHOWS THAT AT 3:00 P.M; EDT, ON OCTOBER 20, 1960, A TOTAL OF 15 BIDS HAD BEEN RECEIVED, INCLUDING A BID BY FRANCHI CONSTRUCTION COMPANY, INC. DURING THE COURSE OF THE OPENING OF THE BIDS, OR AFTER ALL BIDS HAD BEEN READ BUT BEFORE THE BIDDERS PRESENT HAD LEFT THE SCENE, A TELEGRAPHIC MODIFICATION OF THE BID OF FRANCHI CONSTRUCTION COMPANY, INC; WAS DELIVERED TO THE BID ROOM. AN ANNOUNCEMENT WAS MADE THAT A TELEGRAPHIC MODIFICATION OF A BID HAD BEEN RECEIVED WHICH DID NOT AFFECT THE RELATIVE STANDING OF THE BIDDERS BUT THAT THE TEXT OF THE MODIFICATION WOULD NOT BE MADE PUBLIC UNTIL A DETERMINATION WAS MADE AS TO WHETHER IT COULD BE ACCEPTED BECAUSE OF ITS LATE ARRIVAL. THE FRANCHI BID, AS TIMELY SUBMITTED, QUOTED A PRICE OF $2,500,000. IT IS ALLEGED, AND IT IS CLEAR FROM THE RECORD, THAT THIS BID WAS ONLY A TENTATIVE FIGURE AND THAT IT WAS THE INTENTION OF FRANCHI TO MODIFY THE BID PRIOR TO THE OPENING. THE OTHER BIDS RECEIVED ARE ALL IN THE NEIGHBORHOOD OF $4,000,000.

AT APPROXIMATELY 3:30 P.M; ON OCTOBER 20, 1960, FRANCHI COMMUNICATED BY TELEPHONE WITH THE AREA PUBLIC WORKS OFFICE TO ASCERTAIN THE RESULTS OF THE BIDDING. FRANCHI WAS ADVISED THAT THE TELEGRAM MODIFYING THEIR BID WAS NOT RECEIVED UNTIL 3:10 P.M; AND THAT THE TELEGRAM WAS NOT FOR CONSIDERATION UNLESS EVIDENCE WAS SUBMITTED SHOWING THAT THE DELAY WAS OCCASIONED BY THE TELEGRAPH COMPANY AND WAS NOT DUE TO THE FAULT OF FRANCHI.

WITH RESPECT TO THE FACTS CONCERNING THE TELEGRAM, THERE IS NO DISPUTE. THE MESSAGE WAS RECEIVED OVER THE TELEPHONE IN THE NEWTONVILLE, MASSACHUSETTS, OFFICE OF WESTERN UNION AT 2:20 P.M; ON OCTOBER 20, 1969, 40 MINUTES BEFORE THE TIME DESIGNATED FOR THE OPENING OF THE BIDS. THE TELEGRAM, MARKED RX, WAS TRANSMITTED FROM NEWTONVILLE ON ITS WAY TO NEW YORK AT 2:28 P.M; AND WAS RECEIVED AT THE DELIVERY BRANCH, BARCLAY STREET OFFICE, NEW YORK, AT APPROXIMATELY 2:55 P.M. IT WAS DISPATCHED BY MESSENGER TO ROOM 633, 90 CHURCH STREET, WHERE IT WAS DELIVERED TO THE AREA PUBLIC WORKS OFFICE AT APPROXIMATELY 3:10 P.M; AN OVERALL ELAPSED TIME OF APPROXIMATELY 50 MINUTES.

IN AN AFFIDAVIT OF OCTOBER 26, 1960, BY PASQUALE FRANCHI, PRESIDENT OF THE FRANCHI CONSTRUCTION COMPANY, INC; THERE ARE SET FORTH THE FACTS CONCERNING THE TRANSMISSION OF THE TELEGRAM, AND IT IS AVERRED THAT HE INQUIRED AT WESTERN UNION PRIOR TO SENDING THE TELEGRAM WHETHER OR NOT A TELEGRAM SENT TO 90 CHURCH STREET, NEW YORK, NEW YORK, WOULD BE RECEIVED BEFORE 3:00 O-CLOCK AND WAS TOLD THAT IT WOULD SO ARRIVE. IT IS AVERRED THAT A TEST TELEGRAM WAS SENT AT THE IDENTICAL TIME 2:20 P.M; ON OCTOBER 24, 1960, TO THE CONTINENTAL CASUALTY INSURANCE Y IN NEW YORK AND THAT THE TELEGRAM WAS RECEIVED IN THE NEW YORK OFFICE OF WESTERN UNION AT 2:45 P.M. IT IS FURTHER AVERRED THAT FRANCHI HAD AN AGENT WALK FROM THE DELIVERY BRANCH IN NEW YORK TO ROOM 633, FEDERAL OFFICE BUILDING, 90 CHURCH STREET, OBEYING TRAFFIC REGULATIONS AND MAKING NO SPECIAL EFFORT TO SPEED, AND THAT IT TOOK THE AGENT APPROXIMATELY FIVE MINUTES TO ACCOMPLISH THE JOURNEY. ALSO, STATEMENTS BY WESTERN UNION OFFICIALS IN BOSTON WERE SUBMITTED TO THE EFFECT THAT THE TELEGRAM SENT AT THE TIME AND UNDER THE CIRCUMSTANCES IT WAS SENT SHOULD NORMALLY HAVE BEEN DELIVERED TO THE ADDRESSEE PRIOR TO THE TIME DESIGNATED FOR THE BID OPENING.

BY TELEGRAM OF OCTOBER 28, 1960, THE BUREAU OF YARDS AND DOCKS ADVISED FRANCHI THAT, IN ACCORDANCE WITH A RULING BY THIS OFFICE IN A SIMILAR CASE, B-141603, DATED FEBRUARY 12, 1960, 39 COMP. GEN. 586, AS A LATE BIDDER, HE HAD THE BURDEN OF PROVING THAT THE MESSAGE WAS SENT SUFFICIENTLY AHEAD OF THE BID OPENING TIME TO ALLOW FOR ANY NORMAL, USUAL, OR FORESEEABLE DELAYS, AND THAT THE FAILURE OF THE TELEGRAM TO ARRIVE BY BID OPENING TIME WAS DUE SOLELY TO ABNORMAL DELAY IN TRANSMISSION. IT IS FURTHER STATED THAT THE EVIDENCE SUBMITTED BY FRANCHI FAILED TO ESTABLISH ,ABNORMAL DELAY IN TRANSMISSION," AND THAT THE MODIFICATION OF THE BID WOULD BE DISREGARDED UNLESS FURTHER EVIDENCE WAS SUBMITTED.

THE ATTORNEY FOR FRANCHI PROTESTS THE RULING BY THE BUREAU OF YARDS AND DOCKS ON THE BASIS THAT THE 39 COMP. GEN. 586 DECISION IS NOT APPLICABLE AND THE CASE THAT ACTUALLY CONTROLS IN THIS PARTICULAR MATTER BECAUSE OF THE SIMILARITY IN THE FACTUAL SITUATION IS OUR DECISION OF FEBRUARY 23, 1956, 35 COMP. GEN. 468.

IN THE LATTER DECISION, 35 COMP. GEN. 468, AND PRIOR SIMILAR DECISIONS, VERY LITTLE, IF ANY, DISTINCTION WAS MADE BETWEEN LATE TELEGRAPHIC BIDS OR MODIFICATIONS AND LATE MAIL BIDS. THE RULE FOLLOWED IN BOTH INSTANCES WAS THAT THE EVIDENCE MUST SHOW THAT THE LATE BID OR MODIFICATION WAS SENT IN SUFFICIENT TIME TO HAVE REACHED THE DESIGNATED OFFICE BY THE TIME SPECIFIED FOR THE BID OPENING; THAT THE DELAY WAS DUE TO NO FAULT OF THE BIDDER; AND THAT THERE WAS NO POSSIBILITY OF COLLUSION, FAVORITISM, OR UNFAIR ADVANTAGE OF THE OTHER BIDDERS. HOWEVER, IN DECISION OF MARCH 10, 1958, 37 COMP. GEN. 595, SUSTAINED UNDER DATE OF APRIL 15, 1958, A DISTINCTION WAS MADE BETWEEN TELEGRAPHIC AND MAILED BIDS. THE DISTINCTION WAS BASED ON THE FOLLOWING FACTS:

THE POSTAL SERVICE IS A GOVERNMENT INSTRUMENTALITY, AND IT MAY BE CONSIDERED THAT THE GOVERNMENT IS, IN A SENSE, RESPONSIBLE FOR FAILURE OF A MAILED BID TO ARRIVE ON TIME AND THEREFORE SHOULD NOT IMPOSE THE RISK OF DELAY ON A BIDDER. COLLECTION, DISPATCHING, AND DELIVERY OF MAIL ARE ON FIXED SCHEDULES LARGELY INDEPENDENT OF VOLUME, AND, ORDINARILY, IT CAN READILY BE DETERMINED WHETHER THE FAILURE TO ARRIVE ON TIME WAS DUE SOLELY TO A DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE. THE TELEGRAPH COMPANIES ARE PRIVATE PUBLIC SERVICE CORPORATIONS AND IT IS UNDERSTOOD THAT NO TIME OF DELIVERY WILL BE GUARANTEED AND THAT DELIVERY AT ALL TIMES IS DEPENDENT ON OPERATING CONDITIONS AND VOLUME OF BUSINESS, WHICH VARIES CONSTANTLY FROM HOUR TO HOUR AND DAY TO DAY.

PURSUANT TO THE DECISIONS OF MARCH 10 AND APRIL 15, 1958, THE ARMED SERVICES PROCUREMENT REGULATION, SECTION 21303, COVERING LATE BIDS WAS MODIFIED UNDER DATE OF OCTOBER 1, 1959, BY ADDING SECTION 2-303.4 TO COVER THE DISTINCTION BETWEEN LATE MAILED AND TELEGRAPHIC BIDS AND SET FORTH THE CONDITIONS UNDER WHICH LATE TELEGRAPHIC BIDS WOULD BE CONSIDERED AS FOLLOWS:

2-303.4 TELEGRAPHIC BIDS. A LATE TELEGRAPHIC BID SHALL BE PRESUMED TO HAVE BEEN FILED WITH THE TELEGRAPH COMPANY TOO LATE TO BE RECEIVED IN TIME, EXCEPT WHERE THE BIDDER DEMONSTRATES BY CLEAR AND CONVINCING EVIDENCE WHICH INCLUDES SUBSTANTIATION BY AN AUTHORIZED OFFICIAL OF THE TELEGRAPH COMPANY THAT THE BID, AS RECEIVED IN THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS, WAS FILED WITH THE TELEGRAPH COMPANY IN SUFFICIENT TIME TO HAVE BEEN DELIVERED ON TIME BY NORMAL TRANSMISSION PROCEDURE, SO AS NOT TO HAVE BEEN LATE.

SECTION 2-305 OF ASPR, PROVIDES THAT IN DETERMINING WHETHER LATE MODIFICATIONS OR WITHDRAWALS OF BIDS SHOULD BE CONSIDERED EFFECTIVE, THE RULES STATED FOR LATE BIDS IN ASPR 2-303.3 THROUGH 2-303.5 SHALL APPLY.

IN 39 COMP. GEN. 586, AFTER SETTING FORTH THE ABOVE-QUOTED PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION, IT WAS HELD:

THE GENERAL RULE IS THAT TELEGRAPHIC MODIFICATIONS OF BIDS SHOULD BE RECEIVED PRIOR TO THE TIME SET FOR BID OPENING. EXCEPTIONS TO THE RULE TEND TO PREJUDICE THE RIGHTS OF OTHER BIDDERS, AND IT IS THEREFORE INCUMBENT UPON ANY BIDDER WHO SEEKS TO INVOKE AN EXCEPTION TO PROVE THAT HE IS ENTIRELY WITHOUT FAULT OR NEGLIGENCE IN TRANSMITTING A LATE MODIFICATION TO HIS BID. AS INDICATED AT 35 COMP. GEN. 426, THE LATE BIDDER'S LACK OF KNOWLEDGE OF OTHER BIDS IS NOT ENOUGH. THE TELEGRAPHIC BID MODIFICATION MUST HAVE BEEN DEPOSITED IN TIME FOR RECEIPT, BY NORMAL TRANSMISSION PROCEDURE, PRIOR TO THE TIME FIXED IN THE INVITATION FOR BIDS, AND WHERE THERE IS SUBSEQUENT DELAY BY THE TELEGRAPH COMPANY THROUGH NO FAULT OR NEGLECT ON THE PART OF THE BIDDER, THAT DELAY MUST BE ABNORMAL DELAY OR TIME BEYOND THAT USUALLY REQUIRED BY NORMAL TRANSMISSION PROCEDURE, THE BURDEN OF PROOF OF WHICH IS PLACED UPON THE BIDDER. UNDER THIS EXCEPTION IT IS NOT SUFFICIENT FOR A LATE BIDDER TO SHOW THAT HIS MESSAGE COULD HAVE BEEN TRANSMITTED AND RECEIVED UNDER OPTIMUM CONDITIONS. HE MUST SHOW THAT HIS MESSAGE WAS DEPOSITED SUFFICIENTLY AHEAD OF BID OPENING TIME TO ALLOW FOR ANY NORMAL, USUAL, OR FORESEEABLE DELAYS, AND THAT ITS FAILURE TO ARRIVE BEFORE BID OPENING TIME WAS DUE SOLELY TO ABNORMAL DELAY IN TRANSMISSION. (ITALICS SUPPLIED.)

WE BELIEVE THE CONCLUSION REACHED IN THAT DECISION IS IN ACCORDANCE WITH CURRENT PROCUREMENT REGULATIONS AND SETS FORTH THE CORRECT RULE TO BE FOLLOWED IN THIS TYPE OF CASE. SEE ALSO SECTIONS 1-2.303-4 AND 1 2.305 OF THE FEDERAL PROCUREMENT REGULATIONS.

THE "NORMAL, USUAL AND FORESEEABLE DELAYS" ARE THOSE DELAYS WHICH MIGHT BE EXPECTED OR ANTICIPATED IN THE NORMAL ROUTINE BY WHICH THE TELEGRAPH COMPANY ACCOMPLISHES ITS WORK. IT IS UNDERSTOOD THAT THE TELEGRAPH COMPANY WILL STATE THAT UNDER NORMAL CONDITIONS A TELEGRAM SHOULD BE DELIVERED IN A CERTAIN PERIOD OF TIME AND THAT RX MESSAGES HAVE PREFERENCE OVER REGULAR TELEGRAMS, ETC. IN THIS CONNECTION, HOWEVER, WE UNDERSTAND THAT CERTAIN WESTERN UNION OFFICIALS CONTACTED WITH REFERENCE TO THIS PARTICULAR CASE WOULD NOT CONSIDER THAT THE TRANSMISSION TIME INVOLVED WAS UNUSUAL OR ABNORMAL. DELIVERY IS ALWAYS CONDITIONED ON VOLUME AND OTHER CONDITIONS AT THE SENDING AND RECEIVING OFFICE. THERE ARE ALSO FOR CONSIDERATION THE QUESTIONS OF WHETHER THE ADDRESSEE HAS TIE-IN FACILITIES AND OTHER FACTORS AFFECTING DELIVERY TO HIM.

IN OUR OPINION, IT WAS NOT REASONABLE FOR FRANCHI TO BELIEVE THAT DELIVERY OF THE TELEGRAM WITHIN 40 MINUTES WOULD BE PREVENTED ONLY BY ABNORMAL, UNUSUAL, OR UNFORESEEABLE DELAYS BY THE TELEGRAPH COMPANY. THE MOST THAT THE EVIDENCE SUBMITTED SHOWS IS THAT THE TELEGRAM COULD HAVE BEEN DELIVERED WITHIN THE 40 MINUTES ALLOWED UNDER FAVORABLE CONDITIONS.

ACCORDINGLY, YOU ARE ADVISED THAT THE LATE TELEGRAPHIC MODIFICATION OF THE BID OF FRANCHI CONSTRUCTION COMPANY, INC; IS NOT PROPER FOR CONSIDERATION AND THAT ITS OBVIOUSLY TENTATIVE BID OF $2,500,000 MAY BE DISREGARDED IN MAKING THE AWARD.