B-144111, NOV. 7, 1960

B-144111, NOV. 7, 1960

TO THE POSTMASTER GENERAL:

WE REFER TO A LETTER OF SEPTEMBER 27, 1960, FROM THE CHIEF OF PROCUREMENT FOR THE POST OFFICE DEPARTMENT, MR. LEONARD J. SHELTON, IN WHICH OUR ADVICE IS REQUESTED WITH REGARD TO AUTHORITY TO SOLICIT NEW BIDS FOR THE SALE OF SCRAP METAL COVERED BY ITEMS 1 AND 4 OF POST OFFICE DEPARTMENT INVITATION NO. 11 FOR THE SALE OF GOVERNMENT PROPERTY, DATED MAY 25, 1960.

THAT INVITATION REQUESTED BIDS FOR FOUR ITEMS OF VARIOUS TYPES OF SCRAP METAL TO BE ACCUMULATED BY THE DEPARTMENT DURING THE PERIOD JULY 1, 1960, THROUGH JUNE 30, 1961. THE SPECIAL CONDITIONS IN THE INVITATION REQUIRED THAT EACH BID MUST BE ACCOMPANIED BY A BID GUARANTEE IN AN AMOUNT REPRESENTING 10 PERCENT OF THE VALUE (COMPUTED ON THE BASIS OF THE AGGREGATE BID PRICE) OF THE ESTIMATED QUANTITY OF MATERIAL BID UPON.

THE SPECIAL CONDITIONS FURTHER REQUIRED THAT IF THE BID GUARANTEE WAS SUBMITTED ON U.S. STANDARD FORM NO. 24, THAT FORM SHOULD BE AMENDED BY STRIKING OUT THE ENTIRE CONDITION OF THE BOND BEGINNING WITH THE WORDS "NOW THEREFORE," AND ENDING WITH THE WORD "VIRTUE," AND BY INSERTING THE FOLLOWING IN LIEU THEREOF:

"NOW THEREFORE, IF THE PRINCIPAL SHALL NOT WITHDRAW SAID BID WITHIN 10 DAYS AFTER THE DATE OF OPENING OF BIDS, AND SHALL WITHIN 10 DAYS AFTER RECEIPT OF NOTICE OF THE ACCEPTANCE OF SAID BID FURNISH A PERFORMANCE BOND AS REQUIRED, OR IN THE EVENT OF WITHDRAWAL OF SAID BID WITHIN THE PERIOD SPECIFIED, OR THE FAILURE TO FURNISH SUCH BOND WITHIN THE TIME SPECIFIED, IF THE PRINCIPAL SHALL PAY THE POST OFFICE DEPARTMENT THE DIFFERENCE BETWEEN THE AMOUNT SPECIFIED IN SAID BID AND THE AMOUNT FOR WHICH THE MATERIAL MAY OTHERWISE BE DISPOSED OF, IF THE LATTER AMOUNT BE LESS THAN THE FORMER, THEN THE ABOVE OBLIGATION SHALL BE VOID AND OF NO EFFECT, OTHERWISE TO REMAIN IN FULL FORCE AND EFFECT.'

THE STANDARD CONDITION IN FORM NO. 24 READS AS FOLLOWS:

"NOW THEREFORE, IF THE PRINCIPAL SHALL NOT WITHDRAW SAID BID WITHIN THE PERIOD SPECIFIED THEREIN AFTER THE OPENING OF THE SAME, OR, IF NO PERIOD BE SPECIFIED, WITHIN SIXTY (60) DAYS AFTER SAID OPENING, AND SHALL WITHIN THE PERIOD SPECIFIED THEREFOR, OR, IF NO PERIOD BE SPECIFIED, WITHIN TEN (10) DAYS AFTER THE PRESCRIBED FORMS ARE PRESENTED TO HIM FOR SIGNATURE, EXECUTE SUCH FURTHER CONTRACTUAL DOCUMENTS, IF ANY, AS MAY BE REQUIRED BY THE TERMS OF THE BID AS ACCEPTED, AND GIVE BONDS WITH GOOD AND SUFFICIENT SURETY OR SURETIES, AS MAY BE REQUIRED, FOR THE FAITHFUL PERFORMANCE AND PROPER FULFILLMENT OF THE RESULTING CONTRACT, AND FOR THE PROTECTION OF ALL PERSONS SUPPLYING LABOR AND MATERIAL IN THE PROSECUTION OF THE WORK PROVIDED FOR IN SUCH CONTRACT, OR IN THE EVENT OF THE WITHDRAWAL OF SAID BID WITHIN THE PERIOD SPECIFIED, OR THE FAILURE TO ENTER INTO SUCH CONTRACT AND GIVE SUCH BONDS WITHIN THE TIME SPECIFIED, IF THE PRINCIPAL SHALL PAY THE GOVERNMENT THE DIFFERENCE BETWEEN THE AMOUNT SPECIFIED IN SAID BID AND THE AMOUNT FOR WHICH THE GOVERNMENT MAY PROCURE THE REQUIRED WORK, SUPPLIES, AND SERVICES, IF THE LATTER AMOUNT BE IN EXCESS OF THE FORMER, THEN THE ABOVE OBLIGATION SHALL BE VOID AND OF NO EFFECT, OTHERWISE TO REMAIN IN FULL FORCE AND VIRTUE.'

BIDS WERE RECEIVED FROM THREE COMPANIES IN RESPONSE TO INVITATION NO. 11. HYMAN VIENER AND SONS BID ON ALL FOUR ITEMS WAS HIGH BIDDER FOR ITEMS 1 AND 3. METROPOLITAN METALS, INC., BID ON ITEMS 1 AND 4 AND WAS HIGH BIDDER FOR ITEM 4. ALEXANDRIA JUNK COMPANY, INC., BID ON ITEMS 2, 3, AND 4 AND WAS HIGH BIDDER FOR ITEM 2. THE BIDS OF HYMAN VIENER AND SONS AND METROPOLITAN METALS, INC., WERE ACCOMPANIED BY BID BONDS ON STANDARD FORM NO. 24 WHICH WERE NOT AMENDED BY STRIKING OUT THE STANDARD CONDITION AND INSERTING THE CONDITION REQUIRED BY THE INVITATION. BOTH COMPANIES WERE NOTIFIED THAT THEIR BIDS WERE NOT FOR CONSIDERATION SINCE THEIR BID BONDS DID NOT CONFORM TO THE SPECIAL CONDITIONS OF THE INVITATION. AN AWARD WAS MADE TO ALEXANDRIA JUNK COMPANY, INC., FOR ITEMS 2 AND 3.

METROPOLITAN METALS, INC., TOOK NO EXCEPTION TO THIS ACTION, BUT HYMAN VIENER AND SONS PROTESTED THE ACTION ON THE BASIS THAT THE STANDARD BID BOND AFFORDED THE GOVERNMENT ADEQUATE PROTECTION UNTIL A PERFORMANCE BOND WAS PROVIDED. VIENER REQUESTED THAT ITS BID BE CONSIDERED FOR AWARD.

OUR DECISION AT 38 COMP. GEN. 532, AND CASES FOLLOWING THE RULE THEREIN, UPON WHICH THE CONTRACTING OFFICER RELIED IN REJECTING THE BIDS OF VIENER AND METROPOLITAN, DEALT SPECIFICALLY WITH THE RULE TO BE FOLLOWED WITH RESPECT TO WAIVER OF A BIDDER'S FAILURE TO SUBMIT A BID BOND ON TIME, AND THAT CASE DOES NOT APPLY TO THE FACTS PRESENTED HERE. IN THIS CASE, THE BID BONDS WERE SUBMITTED ON TIME AND IN SUFFICIENT AMOUNTS, AND THE ONLY QUESTION FOR CONSIDERATION IS WHETHER THE BONDS AFFORDED THE GOVERNMENT THE PROTECTION IT REQUIRED.

WHILE THERE IS NO DOUBT THAT THE GOVERNMENT CAN DETERMINE THE DEGREE OF PROTECTION IT DESIRES AND REQUIRE THAT BIDDERS FURNISH A BID GUARANTEE WHICH AFFORDS SUCH PROTECTION, WE DO NOT BELIEVE THE SPECIAL CONDITION IN THE INVITATION AFFORDS ANY SIGNIFICANTLY GREATER DEGREE OF PROTECTION THAN THE STANDARD CONDITION IN THE BID FORM, PROVIDED THE BID ITSELF CONFORMS TO THE INVITATION.

THE SPECIAL CONDITIONS REQUIRE THAT THE BIDDER MAY NOT WITHDRAW HIS BID WITHIN 10 DAYS AFTER THE BID OPENING, WHILE THE STANDARD CONDITION SETS THE PERIOD AT 60 DAYS, UNLESS A SHORTER PERIOD IS SPECIFIED IN THE BID. BOTH CONDITIONS REQUIRE THAT THE BIDDER FURNISH A PERFORMANCE BOND WITHIN 10 DAYS AFTER NOTICE OF AWARD. THE REMAINDER OF THE STANDARD CONDITION IS PHRASED WITH RESPECT TO A PROCUREMENT SITUATION AND DESCRIBES THE CONDITIONS UNDER WHICH THE BIDDER MAY BE RELEASED FROM HIS BID BOND BY PAYMENT OF THE DIFFERENCE BETWEEN HIS BID AND THE COST TO THE GOVERNMENT FOR MAKING THE PROCUREMENT ELSEWHERE, IF THE COST IS GREATER. THE SPECIAL CONDITIONS MERELY CHANGE THE TERMS TO DEAL WITH SALES AND ALLOW THE BIDDER TO BE RELEASED FROM HIS BOND UPON PAYMENT OF THE DIFFERENCE BETWEEN HIS BID AND THE AMOUNT FOR WHICH THE MATERIAL MAY BE DISPOSED OF, IF LESS.

WE HAVE SAID THAT WE DO NOT THINK THAT THE MERE FAILURE TO UTILIZE A DESIGNATED BID BOND FORM IS SUFFICIENT BASIS TO REJECT AN OTHERWISE ACCEPTABLE BID. 39 COMP. GEN. 83. THE QUESTION IS WHETHER THE FAILURE TO UTILIZE THE DESIGNATED FORM RESULTS IN A DIFFERENCE IN THE RIGHTS AND OBLIGATIONS OF THE PARTIES. WE BELIEVE THE CONDITION IN STANDARD FORM 24 AFFORDS THE GOVERNMENT SUBSTANTIALLY THE SAME PROTECTION AS THE SPECIAL CONDITIONS, PROVIDED THE BID ITSELF CONFORMS TO THE INVITATION. IF THE BID BONDS AND BIDS OF METROPOLITAN METALS, INC., AND HYMAN VIENER AND SONS WERE OTHERWISE ACCEPTABLE, THEY SHOULD NOT HAVE BEEN REJECTED FOR FAILURE TO INSERT THE SPECIAL CONDITION IN THE BID BOND FORM. IN THE INTEREST OF THE GOVERNMENT, THE CONTRACTING OFFICER SHOULD HAVE WAIVED THE DEVIATIONS WHICH DID NOT GO TO THE SUBSTANCE OF THE BID BONDS, AND AWARDED CONTRACTS FOR THE FOUR ITEMS TO THE HIGHEST BIDDER FOR EACH ITEM.

SINCE THE BID OF ALEXANDRIA JUNK COMPANY, INC., WAS THE HIGHEST FOR ITEM 2 AND WAS THE HIGHEST IN STRICT COMPLIANCE WITH THE REQUIREMENTS OF THE INVITATION FOR ITEM 3, AND THE CONTRACT WAS ENTERED INTO IN GOOD FAITH BY THE CONTRACTING OFFICER AND THE COMPANY, WE DO NOT FEEL THAT THE CONTRACT SHOULD NOW BE VOIDED. SEE LEVINSON V. UNITED STATES, 258 U.S. 198; 37 COMP. GEN. 190; 36 COMP. GEN. 259.

WITH RESPECT TO THE BIDS FOR ITEMS 1 AND 4 WHICH WERE REJECTED, IT IS A UNIVERSALLY ACCEPTED RULE OF LAW THAT REJECTION EXTINGUISHES AN OFFER SO THAT IT MAY NOT BE LATER ACCEPTED. HOWEVER, WE HAVE HELD THAT WHERE IT IS DETERMINED THAT REJECTION OF ALL BIDS WAS UNWARRANTED, AND THE BIDDER TO WHOM THE AWARD PROPERLY SHOULD HAVE BEEN MADE IS WILLING TO ACCEPT, THE INVITATION AND THE BIDS MAY BE REINSTATED AND THE AWARD MADE AS OTHERWISE PROPER, PROVIDED THAT THE INTERESTS OF NEITHER THE GOVERNMENT NOR ANY BIDDER WOULD BE JEOPARDIZED. 37 COMP. GEN. 577; 36 COMP. GEN. 62; 34 COMP. GEN. 356; B-136251, AUGUST 29, 1958.

THEREFORE, IF THE BIDDERS WHOSE BIDS ON ITEMS 1 AND 4 WERE REJECTED ARE WILLING TO REINSTATE THEM, WE ARE AWARE OF NO REASON WHY THE BIDS FOR ITEMS 1 AND 4 MAY NOT BE REVIVED AND AWARD FOR THOSE SALES MADE TO THE HIGHEST RESPONSIVE BIDDERS. HOWEVER, IF CONDITIONS OF THE SCRAP METAL MARKET HAVE CHANGED TO THE EXTENT THAT THE BIDDERS ARE NOT WILLING TO REINSTATE THEIR OFFERS, IT WOULD BE PROPER FOR THE POST OFFICE DEPARTMENT TO REQUEST NEW BIDS FOR THE SCRAP MATERIALS COVERED BY ITEMS 1 AND 4 OF THE INVITATION NO. 11.