B-168298, DEC. 22, 1969

B-168298, DEC. 22, 1969

BIDS--ALTERNATIVE--FAILURE TO BID ON ALTERNATE BIDDER SUBMITTING LOW TOTAL BID PRICE FOR TUCKPOINTING SERVICES, BUT OMITTING PRICES ON SEPARATE BID-DEDUCTIBLE ITEMS, SHOULD NOT BE REGARDED AS NONRESPONSIVE AND IS ENTITLED TO AWARD, IF FOUND RESPONSIBLE, SINCE BIDDER'S FAILURE TO RESPOND TO ALTERNATE BID REQUEST CONSTITUTES NO BASIS, SUFFICIENT IN ITSELF, TO REQUIRE BID REJECTION, SUCH REQUEST BEING SOLELY FOR GOVERNMENT'S BENEFIT, AND WHERE, AS HERE, BID COVERS ENTIRE WORK CONTEMPLATED UNDER ONE ALTERNATE, FAILURE TO BID ON ANOTHER ALTERNATE DOES NOT PRECLUDE ACCEPTANCE OF BID COVERING ALTERNATE SELECTED BY GOVT. THIS RULE APPLIES EVEN THOUGH BIDS ON ALTERNATES ARE CLEARLY REQUIRED BY INVITATION, SO LONG AS GOVT.'S BEST INTEREST WOULD BE SERVED BY AWARD ON ITEM BID UPON, RATHER THAN ALTERNATE OMITTED.

TO MR. JOHNSON:

WE REFER TO LETTER DATED DECEMBER 2, 1969 (YOUR REFERENCE 134), FROM THE CHIEF MEDICAL DIRECTOR, DEPARTMENT OF MEDICINE AND SURGERY, FORWARDING A REPORT AND RELATED PAPERS ON A PROTEST FILED WITH OUR OFFICE BY THE LAW FIRM OF GOFF AND GOFF, ATTORNEYS FOR BURG-MILLER TUCKPOINTING, INC. (BURG- MILLER), MINNEAPOLIS, MINNESOTA, AGAINST AWARD TO ANOTHER BIDDER OF A CONTRACT FOR PROJECT NO. 70-1 ADVERTISED UNDER INVITATION FOR BIDS (IFB) DATED SEPTEMBER 12, 1969, ISSUED BY THE VETERANS ADMINISTRATION HOSPITAL, TUSKEGEE, ALABAMA.

THE IFB, STANDARD FORM 20 (INVITATION FOR BIDS (CONSTRUCTION CONTRACT) (, SOLICITED BIDS FOR THE PERFORMANCE OF TUCKPOINTING ON BUILDINGS 2, 3, 4 AND 10 AT THE HOSPITAL. THE BID FORM, STANDARD FORM 21 (BID FORM (CONSTRUCTION CONTRACT) (, REQUESTED A TOTAL BID PRICE ON ALL FOUR BUILDINGS UNDER ITEM 1, AND SEPARATE BIDS ON TWO DEDUCTIBLES UNDER ITEMS A AND B. ITEM A COVERED BUILDINGS 2 AND 3, AND ITEM B COVERED BUILDINGS 2, 3 AND 4.

THE FACE SHEET OF THE BID FORM INCLUDED THE FOLLOWING PERTINENT PARAGRAPH IMMEDIATELY BELOW ITEM 1 AND ABOVE ITEMS A AND B: "IT IS CONTEMPLATED THAT THE ENTIRE JOB WILL BE AWARDED UNDER ITEM NO. 1 PROVIDED FUNDS ARE AVAILABLE. BIDS ARE ALSO REQUIRED ON THE FOLLOWING DEDUCTIBLE ITEMS. BID PRICE ON ITEM NO. 1 IS GREATER THAN FUNDS AVAILABLE, AWARD WILL BE MADE TO THE LOWEST BIDDER ON ITEM NO. 1 LESS ANY COMBINATION OF DEDUCTIBLE ITEMS WITHIN AMOUNT OF FUNDS AVAILABLE.'

STANDARD FORM 22 (INSTRUCTIONS TO BIDDERS (CONSTRUCTION CONTRACT) (, PROVIDED IN PARAGRAPH 10, RELATING TO AWARD OF CONTRACT, THAT AWARD WOULD BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED; THAT THE GOVERNMENT MAY, WHEN IN ITS INTEREST, REJECT ANY OR ALL BIDS OR WAIVE ANY INFORMALITY IN BIDS RECEIVED; AND THAT THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED BY THE INVITATION FOR BIDS OR THE BIDDER INCLUDES IN HIS BID A RESTRICTIVE LIMITATION.

ON OCTOBER 7, 1969, BIDS WERE OPENED AS SCHEDULED. ON ITEM 1, THE BID OF $34,900 BY BURG-MILLER WAS LOWEST, AND THE BID OF $36,946 BY ST. LOUIS TUCKPOINTING CO., INC. (ST. LOUIS) WAS SECOND LOW. BOTH BIDS WERE WITHIN THE FUNDS AVAILABLE FOR THE PROJECT.

EXAMINATION OF BURG-MILLER'S BID SHOWED THAT NO PRICES HAD BEEN QUOTED ON THE TWO DEDUCTIBLE ITEMS. RATHER, IN THE SPACES PROVIDED ON THE FACE OF THE BID FORM FOR ENTRY OF THE ITEM PRICES, THE BIDDER HAD ENTERED A TYPEWRITTEN NOTATION READING AS FOLLOWS: "WE ARE SORRY WE CAN ONLY BID ON THE ENTIRE JOB AS IT WOULD NOT BE FEASIBLE FOR US TO COME THIS DISTANCE IF WE DID NOT DO THE COMPLETE JOB.'

ON THE BASIS THAT BURG-MILLER'S FAILURE TO BID ON THE DEDUCTIBLES RENDERED ITS BID NONRESPONSIVE, THE CONTRACTING OFFICER DETERMINED THAT THE BID SHOULD BE REJECTED AND THAT AWARD FOR THE WORK COVERED BY ITEM 1 SHOULD BE MADE TO ST. LOUIS, WHOSE BID INCLUDED THE DEDUCTIBLES AS WELL AS ITEM 1. ACCORDINGLY, ST. LOUIS WAS NOTIFIED OF THE ACCEPTANCE OF ITS BID IN A LETTER DATED OCTOBER 14. BURG-MILLER, HOWEVER, WAS NOT INFORMED OF THE CONTRACTING OFFICER'S ACTIONS UNTIL OCTOBER 17, WHEREUPON IT PROMPTLY REGISTERED A VERBAL PROTEST WITH THE CONTRACTING OFFICER, VIA ITS ATTORNEYS, WHICH WAS CONFIRMED BY LETTER OF THE SAME DATE. THE PROTEST WAS DENIED BY THE CONTRACTING OFFICER IN A LETTER DATED OCTOBER 21, WHICH INCLUDED THE FOLLOWING PERTINENT LANGUAGE: ,UPON THE BASIS OF A PREAWARD SURVEY OF THE ST. LOUIS TUCKPOINTING CO., INC., AND CONSIDERATION OF COMPLYING WITH THE REQUIREMENTS SET FORTH IN THE -INVITATION FOR BID,- WE HAVE DETERMINED THAT THE ST. LOUIS TUCKPOINTING CO., INC. IS THE LOW BIDDER BASED ON YOUR FAILURE TO BID ON THE -DEDUCTIBLE ITEM- AS REQUIRED ON STANDARD FORM 21, -BID FORM- AND STANDARD FORM 22, -INSTRUCTION TO BIDDERS,- PARAGRAPH 5 (B).'

PARAGRAPH 5 (B) OF STANDARD FORM 22, RELATING TO PREPARATION OF BIDS, PROVIDES, AMONG OTHER THINGS, THAT WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID.

IN THE PROTEST BY LETTER DATED OCTOBER 31, 1969, FILED WITH OUR OFFICE APPEALING THE CONTRACTING OFFICER'S DECISION, BURG-MILLER'S ATTORNEYS URGE THAT ABSENT ANYTHING IN THE IFB PROVIDING THAT A BID SPECIFYING THAT AWARD WOULD BE ACCEPTED ONLY FOR ALL ITEMS WOULD BE NONRESPONSIVE, THE BURG- MILLER LOW BID IS RESPONSIVE. FURTHER, THE ATTORNEYS ASSERT THAT THE FAILURE TO BID ON THE DEDUCTIBLE ITEMS WAS NOT FATAL, NOR DID IT CONSTITUTE A MATERIAL VARIANCE. CONVERSELY, IT IS STATED, IT WAS NOT PREJUDICIAL TO ANY OF THE OTHER BIDDERS OR TO THE GOVERNMENT, AND THE AVAILABILITY OF SUFFICIENT FUNDS TO COVER ALL OF THE WORK CONTEMPLATED BY ITEM 1 RENDERS THE OMISSION ENTIRELY MOOT. IN ADDITION, IT IS STATED THAT AWARD TO BURG-MILLER, WHOSE BID IS OVER $2,000 LOWER THAN THE ST. LOUIS BID, IS THE MOST ADVANTAGEOUS AWARD CONTEMPLATED BY PARAGRAPH 1-2.101 (D) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), THE LANGUAGE OF WHICH IS SIMILAR TO PARAGRAPH 10 (A) OF STANDARD FORM 22. ACCORDINGLY IT IS URGED THAT JUSTICE, EQUITY AND COMMON SENSE DICTATE THE REJECTION AND CANCELLATION OF THE AWARD TO ST. LOUIS AND THE MAKING OF AWARD TO BURG- MILLER AS THE TRUE LOWEST, QUALIFIED AND RESPONSIBLE BIDDER.

BY LETTER DATED DECEMBER 12, ATTORNEYS FOR ST. LOUIS STATE THAT THE BIDDER WENT TO GREAT EXPENSE TO BID ON THE PROJECT AND HAS INCURRED AN EXPENSE IN THE AMOUNT OF $369 FOR A PREMIUM ON A PERFORMANCE BOND. FURTHER, THE ATTORNEYS COMPLAIN THAT WHILE THE BURG-MILLER PROTEST WAS MADE ON OCTOBER 17 (THE DATE ON WHICH ST. LOUIS EXECUTED ITS PERFORMANCE BOND), ST. LOUIS WAS NOT APPRISED UNTIL DECEMBER 6 OF THE PROTEST. DURING SUCH TIME, IT IS STATED, ST. LOUIS TURNED DOWN OTHER HIGHLY PROFITABLE JOBS AND CONFERRED WITH EMPLOYEES OF THE VETERANS ADMINISTRATION CONCERNING THE MATERIALS TO BE USED AND OTHER MINOR DETAILS RELATING TO THE PROJECT. THEREFORE, IT IS ARGUED, CANCELLATION OF THE AWARD TO ST. LOUIS AT THIS POINT WOULD BE TOTALLY INEQUITABLE, UNJUST AND DISCRIMINATORY. ACCORDINGLY, REQUEST IS MADE THAT A NOTICE TO PROCEED BY ISSUED TO ST. LOUIS SO THAT IT MAY PERFORM THE CONTRACT WHICH IT ACCEPTED IN GOOD FAITH.

THE FAILURE OF A BIDDER TO RESPOND TO A REQUEST FOR AN ALTERNATE BID CONSTITUTES NO BASIS, SUFFICIENT IN ITSELF, TO REQUIRE REJECTION OF THE BID. SUCH AN OMISSION CAN ONLY OPERATE TO THE ADVANTAGE OF OTHER BIDDERS RATHER THAN TO THEIR DISADVANTAGE SINCE THE BIDDER THEREBY ELIMINATES ITSELF FROM COMPETITION WITH THE OTHER BIDDERS INSOFAR AS THE ALTERNATE WORK IS CONCERNED. FURTHER, THE REQUEST FOR ALTERNATE BIDS IS SOLELY FOR THE BENEFIT OF THE GOVERNMENT, AND WHERE A BID AS MADE COVERS THE ENTIRE WORK CONTEMPLATED UNDER ONE ALTERNATE, THE FAILURE TO BID ON ANOTHER ALTERNATE DOES NOT PRECLUDE ACCEPTANCE OF A BID WHICH COVERS THE ALTERNATE SELECTED BY THE GOVERNMENT. 34 COMP. GEN. 633 (1955); 42 ID. 61 (1962); B -126389, FEBRUARY 3, 1956; B 147038, SEPTEMBER 7, 1961. THIS RULE APPLIES EVEN THOUGH BIDS ON ALTERNATES ARE REQUIRED BY THE CLEAR MEANING OF THE INVITATION, SO LONG AS IT IS ADMINISTRATIVELY DETERMINED THAT THE GOVERNMENT'S BEST INTEREST WOULD BE SERVED BY MAKING AN AWARD ON THE ITEM BID UPON RATHER THAN THE ALTERNATE OMITTED. B-149610, DECEMBER 11, 1962; B-147038, SUPRA.

THE LANGUAGE QUOTED ABOVE FROM THE FACE OF THE BID FORM REGARDING THE CONTEMPLATED AWARD UNDER ITEM 1 LEFT NO DOUBT THAT THE ONLY PURPOSE FOR WHICH PRICES ON THE ITEMS A AND B DEDUCTIBLES WERE REQUESTED WAS TO MAKE IT POSSIBLE FOR THE GOVERNMENT TO AWARD A CONTRACT FOR LESS THAN ALL OF THE WORK WITHOUT THE NECESSITY FOR READVERTISING IN THE EVENT THE ITEM 1 BIDS WERE IN EXCESS OF THE AVAILABLE FUNDS. FURTHER, THERE WAS NO RESTRICTION IN THE IFB AGAINST THE SUBMISSION OF A BID BASED ON PERFORMANCE OF ALL OF THE WORK. IN THIS CONNECTION, IT MAY BE OBSERVED THAT PARAGRAPH 5 (B) OF STANDARD FORM 22 HAS REFERENCE, NOT TO ALTERNATES WHICH MAY OR MAY NOT BE SELECTED BY THE GOVERNMENT AT ITS OPTION AFTER BID OPENING, BUT TO ITEMS ON WHICH THE GOVERNMENT INTENDS TO MAKE AWARD. THE CIRCUMSTANCES, AND ON THE BASIS OF THE PERTINENT DECISIONS OF OUR OFFICE CITED ABOVE, THE BURG-MILLER BID ON ITEM 1 COVERING ALL FOUR BUILDINGS, FOR WHICH FUNDS ARE AVAILABLE, MAY NOT BE REGARDED AS NONRESPONSIVE AND SHOULD HAVE BEEN CONSIDERED FOR AWARD.

TURNING TO THE EFFECT OF THE IMPROPER REJECTION OF THE BURG-MILLER BID ON THE AWARD TO ST. LOUIS, THE APPLICABLE PROCUREMENT STATUTE, 41 U.S.C. 253 (B), WITH WHICH THE PROVISIONS OF FPR 1-2.101 (D) AND 1 2.407-1 AND PARAGRAPH 10 (A), STANDARD FORM 22, ARE CONSISTENT, REQUIRES THAT AWARD IN A PUBLICLY ADVERTISED PROCUREMENT BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. UNDER SUCH PROVISIONS, AS THE BIDDER WHO QUOTED THE LOWEST PRICE ON ITEM 1, FOR WHICH SUFFICIENT FUNDS WERE AVAILABLE AND FOR WHICH AWARD WAS ACTUALLY MADE, BURG-MILLER WAS ENTITLED TO AWARD ABSENT ANY INDICATION THAT IT WAS NOT RESPONSIBLE. THEREFORE, WHILE IT IS REGRETTABLE THAT ST. LOUIS, WHO, PENDING RESOLUTION OF THE PROTEST OF BURG-MILLER, HAS NOT BEEN ISSUED A NOTICE TO PROCEED WITH PERFORMANCE OF THE CONTRACT, HAS INCURRED THE EXPENSE OF OBTAINING A PERFORMANCE BOND, THE AWARD IS NEVERTHELESS ERRONEOUS. IN THE CIRCUMSTANCES, WE BELIEVE THAT TO PERMIT THE ERRONEOUS AWARD TO STAND BECAUSE OF THE ADVERSE EFFECT OF CANCELLATION ON ST. LOUIS, WHICH WOULD REQUIRE DISREGARD OF THE RIGHT OF THE GOVERNMENT TO HAVE THE WORK PERFORMED AT THE LOW BID PRICE, AND THE RIGHT OF BURG-MILLER TO AWARD AS THE LOWEST RESPONSIVE BIDDER (ASSUMING ITS RESPONSIBILITY), WOULD BE CONTRARY TO THE PROVISIONS OF THE PROCUREMENT STATUTE, THE REGULATIONS AND THE TERMS OF THE IFB AND WOULD ALSO BE DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM.

FOR THE REASONS STATED, WE CONCLUDE THAT WE HAVE NO ALTERNATIVE BUT TO DIRECT THAT THE AWARD TO ST. LOUIS BE CANCELLED AND AWARD MADE RETROACTIVELY TO BURG-MILLER ON THE BASIS OF ITS LOW BID, IF IT IS CONSIDERED A RESPONSIBLE BIDDER.