B-136303, AUGUST 4, 1958, 38 COMP. GEN. 98

B-136303, AUGUST 4, 1958, 38 COMP. GEN. 98

BIDS - DELIVERY PROVISIONS - INDEFINITE - EVALUATION AN INVITATION WHICH SPECIFIES A DELIVERY SCHEDULE IN TERMS OF DAYS AFTER DATE OF CONTRACT SO THAT BIDDERS WHO ARE IN LOCATIONS WHERE, BECAUSE OF DISTANCE, DELIVERY OF THE CONTRACT WOULD SIGNIFICANTLY REDUCE THE PERFORMANCE TIME DOES NOT AFFORD THE FULL AND FREE COMPETITION REQUIRED FOR ADVERTISED PROCUREMENTS AND, THEREFORE, IT IS SUGGESTED THAT FUTURE INVITATIONS INDICATE DELIVERY SCHEDULES IN EXACT TERMS SO THAT BIDDERS PRIOR TO BID SUBMISSION MAY BE ABLE TO DETERMINE THE EXACT TIME AVAILABLE FOR PERFORMANCE. A LOW BIDDER WHO OFFERS TO SUPPLY MATERIAL WITHIN A STIPULATED NUMBER OF DAYS AFTER RECEIPT OF ORDER, ALTHOUGH THE INVITATION SPECIFIES DELIVERY IN THE SAME NUMBER OF DAYS AFTER DATE OF CONTRACT, HAS SUBMITTED A QUALIFIED BID WHICH MUST BE REJECTED AS NONRESPONSIVE.

TO THE SECRETARY OF THE NAVY, AUGUST 4, 1958:

WE REFER TO LETTERS OF JUNE 25, 1958, AND JULY 3, 1958, WITH ENCLOSURES, SIGNED BY THE ACTING ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, IN RESPONSE TO OUR LETTER OF JUNE 6, 1958, REQUESTING A FULL REPORT WITH REGARD TO THE REJECTION OF LOW BIDS SUBMITTED PURSUANT TO THE INVITATIONS DISCUSSED BELOW.

INVITATION FOR BIDS NO. 155-/1/-2008-58 FOR THE PROCUREMENT OF TWIST DRILLS WAS ISSUED FEBRUARY 28, 1958. BIDS WERE OPENED MARCH 19, 1958. PAGE 41 OF THE INVITATION IT WAS STATED THAT DELIVERY WAS DESIRED WITHIN 75 DAYS "AFTER DATE OF CONTRACT" BUT THAT THE BIDDER, WITHOUT PREJUDICE TO THE EVALUATION OF HIS BID, COULD OFFER DELIVERY AT ANOTHER TIME PROVIDED THAT THE DELIVERY SCHEDULE DID NOT EXTEND MORE THAN 105 DAYS "AFTER DATE OF CONTRACT.' IT WAS MADE CLEAR THAT BIDS OFFERING DELIVERY AFTER SUCH TIME WOULD BE REJECTED. THE LOW BIDDER, THE CONTINENTAL DRILL CORPORATION, OFFERED THE FOLLOWING DELIVERY SCHEDULE:

DELIVERIES TO START WITHIN THIRTY DAYS AND COMPLETE WITHIN 105 DAYS, AFTER RECEIPT OF ORDER. ( ITALICS SUPPLIED.)

INVITATION FOR BIDS NO. 155-/1/-2011-58 FOR TWIST DRILLS WAS ISSUED MARCH 3, 1958, AND BIDS RECEIVED PURSUANT THERETO WERE OPENED ON MARCH 24, 1958. THE DELIVERY SCHEDULE WAS IDENTICAL WITH THAT IN THE EARLIER INVITATION EXCEPT THAT THE DESIRED TIME OF DELIVERY WAS 60 DAYS AFTER DATE OF CONTRACT AND IN ORDER NOT TO BE REJECTED A BID HAD TO PROPOSE A DELIVERY SCHEDULE WHICH DID NOT EXTEND MORE THAN 90 DAYS AFTER DATE OF CONTRACT. THE LOW BIDDER--- THE CONTINENTAL DRILL CORPORATION--- PROPOSED THE FOLLOWING DELIVERY SCHEDULE:

DELIVERIES TO START WITHIN THIRTY DAYS (30) AND COMPLETE WITHIN 90 DAYS, AFTER RECEIPT OF ORDER. ( ITALICS SUPPLIED.)

IN EACH INSTANCE, THE LOW BID WAS REJECTED FOR FAILURE TO CONFORM TO THE STIPULATED DELIVERY SCHEDULE. BY TELEGRAM OF MAY 16, 1958, THE LOW BIDDER REQUESTED THAT THE DELIVERY SCHEDULES BE AMENDED BY ADDING TO EACH, AFTER THE PHRASE "AFTER RECEIPT OF ORDER," THE FOLLOWING:

* * * OR RECEIPT OF TELEGRAPHIC NOTICE OF AWARD, THE TELEGRAPHIC EXPENSES BEING BORNE BY THE BIDDER.

THE LOW BIDDER WAS ADVISED BY TELEGRAM OF MAY 19, 1958, FROM THE CONTRACTING AGENCY THAT ITS BIDS WERE STILL REGARDED AS NONRESPONSIVE BECAUSE OF THE EXCEPTIONS TAKEN TO THE DELIVERY SCHEDULES AND FURTHER THAT BOTH INVITATIONS HAD BEEN WITHDRAWN AND THE PROCUREMENT READVERTISED.

THE REJECTION OF THE TWO LOW BIDS WAS PROTESTED BY LETTER OF MAY 27, 1958, FROM THE ATTORNEY FOR THE CONTINENTAL DRILL CORPORATION IN WHICH IT WAS INDICATED THAT THE DIFFERENCE BETWEEN THE DELIVERY SCHEDULES OFFERED BY THE BIDDER AND THOSE PRESCRIBED BY THE TERMS OF THE INVITATIONS WERE NOT MATERIALLY DIFFERENT. IT WAS FURTHER STATED:

WHEN CONTINENTAL DRILL CORP. INSERTED THE WORDING "105 DAYS, AFTER RECEIPT OF ORDER," IT WAS ONLY ANXIOUS TO PROTECT ITSELF AGAINST A RATHER BAD HABIT INTO WHICH SOME GOVERNMENT AGENCIES HAVE FALLEN BY EITHER PREDATING A LETTER OR HOLDING A LETTER OR CONTRACT FOR A NUMBER OF DAYS BEFORE SENDING IT THROUGH THE MAILS.

PARAGRAPH 8 (D) OF THE TERMS AND CONDITIONS OF BOTH INVITATIONS PROVIDES:

A WRITTEN AWARD MAILED (OR OTHERWISE FURNISHED) TO THE SUCCESSFUL BIDDER WITHIN THE TIME FOR ACCEPTANCE SPECIFIED IN THE BID RESULTS IN A BINDING CONTRACT WITHOUT FURTHER ACTION BY EITHER PARTY.

SINCE, AS STATED IN THE ADMINISTRATIVE REPORT, IT IS THE POLICY OF THE GENERAL STORES SUPPLY OFFICE TO DATE ALL AWARDS ON THE MAILING DATE, THE DATE OF CONTRACT IN ACCORDANCE WITH THE TERMS OF PARAGRAPH 8 (D) WOULD BE THE DATE ON WHICH THE NOTICE OF AWARD WAS MAILED. THEREFORE, EXCEPT IN THOSE INSTANCES WHERE THE DATE OF MAILING COINCIDES WITH THE DATE OF RECEIPT OF NOTICE, IT CANNOT BE SAID THAT AN AN OFFER TO DELIVER WITHIN A STATED NUMBER OF DAYS AFTER RECEIPT OF ORDER IS RESPONSIVE TO A REQUIREMENT THAT DELIVERY BE MADE WITHIN THE SAME NUMBER OF DAYS AFTER AWARD. ACCORDINGLY, IN THIS INSTANCE, IT APPEARS THAT THE DELIVERIES OFFERED WERE NOT RESPONSIVE TO THE TERMS OF THE INVITATIONS AND THE BIDS WERE PROPERLY REJECTED AS CONTAINING MATERIAL DEVIATIONS WHICH COULD NOT BE WAIVED OR CHANGED AFTER OPENING. SEE 30 COMP. GEN. 179.

WHEN A BIDDER OFFERS DELIVERY WITHIN A PRESCRIBED TIME, HE SUBJECTS HIMSELF TO THE LEGAL CONSEQUENCES OF FAILURE TO ABIDE BY THE DELIVERY SCHEDULE SHOULD HIS BID BE ACCEPTED. THESE LEGAL CONSEQUENCES ARE SUBSTANTIAL, AND A RESPONSIBLE BIDDER PRESUMABLY DOES NOT COMMIT HIMSELF TO A DELIVERY SCHEDULE WITHOUT FIRST CAREFULLY CONSIDERING WHETHER, IN FACT, HE CAN PERFORM IN ACCORDANCE WITH ITS PROVISIONS. WHERE, HOWEVER, THE EXACT TIME WHICH HE WILL ACTUALLY HAVE IS NOT THE TIME STIPULATED IN THE INVITATION BUT SOME LESSER TIME THE EXTENT OF WHICH IS DEPENDENT UPON THE SPEED OF THE MAILS AND OTHER CIRCUMSTANCES OVER WHICH HE HAS NO CONTROL, THE BIDDER MAY JUSTIFIABLY FEEL SORELY PUT UPON INDEED WHEN HE IS ASKED TO COMMIT HIMSELF TO A DELIVERY DATE OR SCHEDULE. AS WE STATED IN OUR DECISION, B-124381, SEPTEMBER 16, 1955:

* * * FURTHERMORE, IT IS NOT BELIEVED THAT THE DELIVERY REQUIREMENT SHOULD BE TIED UP WITH ,DATE OF AWARD," BUT RATHER SHOULD BE BASED UPON RECEIPT OF NOTICE OF AWARD. CERTAINLY, A BIDDER CANNOT DELIVER UNTIL HE KNOWS THAT HE IS REQUIRED TO DELIVER. IT WOULD APPEAR THAT A BIDDER IN COMPUTING THE TIME REQUIRED TO EFFECT DELIVERY NORMALLY WOULD NOT TAKE INTO CONSIDERATION THE TIME REQUIRED FOR AN AWARD TO BE DELIVERED TO HIM AND HE WOULD NOT KNOW WHETHER THE AWARD WOULD BE MADE BY ORDINARY MAIL, AIR MAIL OR TELEGRAPH.

ONE OF THE PURPOSES OF THE STATUTES REQUIRING THE AWARD OF CONTRACTS AFTER PUBLIC ADVERTISING AND BIDDING IS TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH FLOW FROM FULL AND FREE COMPETITION. 36 COMP. GEN. 380. DELIVERY SCHEDULES, EXPRESSED IN TERMS OF DAYS AFTER DATE OF CONTRACT, WOULD TEND TO ELIMINATE FROM COMPETITION BIDDERS WHO RIGHTFULLY, WE THINK, CONSIDER THAT THE INVITATION SHOULD INDICATE THE EXACT TIME WHICH THEY WILL HAVE FOR PERFORMANCE SINCE, AS A PRACTICAL MATTER, THEY CANNOT BEGIN PERFORMANCE UNTIL NOTICE OF AWARD IS RECEIVED. FURTHER, THIS TYPE OF DELIVERY SCHEDULE PLACES AT A DISTINCT DISADVANTAGE THOSE BIDDERS IN LOCATIONS WHERE, BECAUSE OF DISTANCE OR OTHER REASONS, DELIVERY OF NOTICE OF AWARD WOULD TAKE A SIGNIFICANT AMOUNT OF TIME. THEREFORE, IN OUR VIEW FULL AND FREE COMPETITION IS NOT OBTAINED WHEN REQUIRED DELIVERY TIME IS INDICATED IN THE INVITATION IN TERMS OF TIME AFTER DATE OF CONTRACT. ACCORDINGLY, WE SUGGEST THAT FUTURE PROCUREMENTS SHOULD INDICATE DELIVERY TIMES IN SUCH TERMS THAT THE BIDDER MAY BE ABLE TO DETERMINE WHEN SUBMITTING HIS BID THE EXACT TIME HE WILL HAVE AVAILABLE TO HIM TO MAKE DELIVERY. IT IS RECOMMENDED THAT THE APPLICABLE REGULATORY MATERIAL BE AMENDED IN ACCORDANCE WITH THE FOREGOING.

WE ARE FURNISHING A COPY OF THIS LETTER TO ARNDT AND DAY IN REPLY TO THEIR LETTER OF MAY 27, 1958, PROTESTING THE REJECTION OF THE BIDS OF CONTINENTAL DRILL CORPORATION.