B-156444, JUN. 29, 1965

TO PINDAR, MCELROY, CONNELL AND FOLEY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 4, 1965, ON BEHALF OF C. J. LANGENFELDER AND SON, INC., REQUESTING RECONSIDERATION OF OUR DECISION OF APRIL 26, 1965, DENYING THE PROTEST OF LANGENFELDER AGAINST THE ADMINISTRATIVE DETERMINATION ALLOWING ONEGLIA AND GERVASINI, INC., TO CORRECT A MISTAKE IN ITS BID SUBMITTED PURSUANT TO INVITATION FOR BIDS CIVENG-19-016-65-25.

THE PRIMARY BASIS FOR YOUR REQUEST FOR RECONSIDERATION IS THE CONTENTION THAT WE FAILED TO APPLY THE PROPER TEST TO THE SUFFICIENCY OF THE EVIDENCE RELIED UPON IN MAKING THE DETERMINATION ALLOWING CORRECTION. IT IS STATED, IN EFFECT, THAT WHILE OUR DECISION APPROVED THE DETERMINATION AS BEING BASED UPON "CLEAR AND CONVINCING" EVIDENCE OF THE EXISTENCE OF A MISTAKE AND OF THE INTENDED BID PRICE, THE APPLICABLE REGULATION FURTHER REQUIRES THAT THESE MATTERS BE ESTABLISHED ,CONCLUSIVELY.'

IT IS TRUE THAT ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406 SPEAKS IN TERMS OF BOTH ,CLEAR AND CONVINCING" EVIDENCE AND "CONCLUSIVE" EVIDENCE IN CONNECTION WITH MISTAKES IN BIDS, BUT IN USING THE FORMER TERM WE DID NOT INTEND TO APPLY A LESS STRINGENT REQUIREMENT OR TO MAKE A DISTINCTION BETWEEN THE TWO TERMS, NOR DID WE MEAN TO INDICATE ANY MODIFICATION OF OUR POSITION, ESTABLISHED BY A LONG SERIES OF DECISIONS, THAT CORRECTION OF A BID REQUIRES A SUBSTANTIALLY HIGHER DEGREE OF PROOF THAN WITHDRAWAL. ALSO WE SERIOUSLY QUESTION WHETHER THE WORD ,CONCLUSIVELY" AS USED IN THE REGULATION WAS INTENDED TO MEAN ANYTHING MORE THAN OR DIFFERENT FROM THE TERM "CLEAR AND CONVINCING.' MOREOVER, GRANTING YOUR CONTENTION THAT "CONCLUSIVE" CAN BE SAID TO MEAN SOMETHING MORE THAN "CLEAR AND CONVINCING," WE NEVERTHELESS CONCLUDE THAT THE EVIDENCE IN THIS CASE IS SUCH AS TO READILY FALL WITHIN THE DEFINITION OF "CONCLUSIVE" AS THAT TERM IS GENERALLY DEFINED. SEE COVINGTON COUNTY V. FITE, 82 SO. 308, 309, 120 MISS. 421; HOUSING CORPORATION V. KELLY, 82 N.Y.S. 2D 577, 579, 580, 581, 193 MISC. 961.

YOU HAVE AGAIN POINTED OUT YOUR DISAGREEMENT WITH THE AGENCY'S POSITION THAT THE PROVISIONS OF 18 U.S.C. 1905 PRECLUDED IT FROM ALLOWING YOU TO EXAMINE THE SUPPORTING DOCUMENTS SUBMITTED BY ONEGLIA AND GERVASINI, AND COMMENTED ON OUR FAILURE TO TAKE A POSITION ON THIS POINT. SINCE 18 U.S.C. 1905 IS A CRIMINAL STATUTE, ITS INTERPRETATION AND ENFORCEMENT ARE MATTERS WITHIN THE JURISDICTION OF THE ATTORNEY GENERAL AND THE COURTS. THUS, THE QUESTION OF WHETHER THE FURNISHING OF SUCH INFORMATION AS REQUESTED BY YOU WOULD BE IN VIOLATION OF THE CITED SECTION IS A MATTER FOR FINAL DETERMINATION BY THE ATTORNEY GENERAL AND THE COURTS, ON WHICH WE DO NOT BELIEVE IT WOULD BE PROPER FOR US TO EXPRESS AN OPINION. HOWEVER, WE FEEL THAT THE PROPRIETY OF DISCLOSURE BY A GOVERNMENT AGENCY OF A BIDDER'S DETAILED COST FIGURES TO ITS COMPETITORS DOES NOT DEPEND SOLELY UPON WHETHER SUCH DISCLOSURE WOULD VIOLATE A CRIMINAL STATUTE, BUT INVOLVES THE SAME CONSIDERATIONS AS ARE APPLICABLE TO YOUR SUGGESTION THAT THE "PUBLIC INTEREST COULD NOT SUFFER" AND THAT IT WOULD BE TO THE GOVERNMENT'S INTEREST TO ALLOW ALL BIDDERS TO COMMENT UPON THE REQUEST OF A BIDDER TO CORRECT AN ALLEGED MISTAKE IN BID. ALTHOUGH SOME BENEFITS MIGHT OCCASIONALLY BE GAINED FROM SUCH PROCEDURE, WE BELIEVE THAT THEY ARE OUTWEIGHED BY THE OBVIOUS DISADVANTAGES WHICH MILITATE AGAINST IT. OF PRIMARY IMPORTANCE, WE BELIEVE THAT THE ADMINISTRATIVE BURDEN AND EXPENSE WOULD MOST CERTAINLY BE GREATLY INCREASED, AND THE NORMAL AND PROPER EFFORTS OF THE PROCUREMENT OFFICIALS TO MAKE TIMELY AWARDS AND RECEIVE NEEDED SUPPLIES AND SERVICES COULD CONCEIVABLY BE SO IMPEDED AS TO INTERFERE WITH THE ORDERLY CONDUCT OF THE GOVERNMENT'S AFFAIRS.

IN THIS CONNECTION, THE SUPREME COURT HAS HELD THAT THE GOVERNMENT ENJOYS UNRESTRICTED POWER TO PRODUCE ITS OWN SUPPLIES, TO DETERMINE WITH WHOM IT MAY DEAL, AND TO FIX THE TERMS AND CONDITIONS UPON WHICH IT WILL MAKE NEEDED PURCHASES. PERKINS V. LUKENS STEEL CO., 310 U.S. 113. THIS POWER MUST OF COURSE BE EXERCISED BY INDIVIDUAL AGENTS, AND THE CONGRESS HAS BY APPROPRIATE LEGISLATION PRESCRIBED THE MANNER IN WHICH IT SHALL BE EXERCISED AND PROVIDED STANDARDS AND PROCEDURES AND PLACED CERTAIN LIMITATIONS UPON THE AUTHORITY OF THE GOVERNMENT'S AGENTS. SUCH STATUTORY REQUIREMENTS, HOWEVER, ARE FOR THE PROTECTION OF THE GOVERNMENT AND NOT FOR THE BENEFIT OF THOSE DEALING WITH IT. SEE AMERICAN SMELTING AND REFINING COMPANY V. U.S., 259 U.S. 75.

THERE IS NO QUESTION BUT THAT THE AGENTS OF THE GOVERNMENT ENGAGED IN THE PROCUREMENT OF NECESSARY GOODS AND SERVICES ARE BOUND BY THE STATUTORY REQUIREMENTS AND LIMITATIONS APPLICABLE THERETO, INCLUDING THE ADVERTISING AND COMPETITIVE BIDDING PROCEDURES. HOWEVER, WE BELIEVE IT TO BE EQUALLY TRUE THAT IN THE PERFORMANCE OF THEIR DUTIES IN THE COURSE OF SUCH PROCUREMENT, SUCH AS MAKING NECESSARY DETERMINATIONS AS TO THE RESPONSIVENESS OF BIDS, THE RESPONSIBILITY OF BIDDERS, THE EVALUATION OF BIDS, AND THE BIDDER TO WHOM AWARD SHOULD BE MADE, THESE AGENTS ARE ACTING IN A STRICTLY ADMINISTRATIVE RATHER THAN A JUDICIAL CAPACITY, AND THEIR ACTIONS ARE NOT SUBJECT TO ANY PROCEDURAL DUE PROCESS REQUIREMENT THAT THE BIDDERS MUST BE PERMITTED TO PARTICIPATE IN THE DECISION-MAKING PROCESS, ANY MORE THAN THE SIMILAR ACTIONS OF A PURCHASING AGENT OF A PRIVATE CORPORATION.

WITH RESPECT TO THE HANDLING OF ALLEGATIONS OF MISTAKES IN BIDS, WE BELIEVE THAT THE GUIDE LINES AND PROCEDURES ESTABLISHED BY EXISTING REGULATIONS ARE ADEQUATE TO PROTECT ALL BIDDERS AGAINST ARBITRARY ADMINISTRATIVE ACTION. THE BASIC PROPOSITION THAT A BIDDER MAY BE PERMITTED TO WITHDRAW A BID UPON PROOF OF ERROR IS MADE NECESSARY BY THE REQUIREMENT THAT BIDDERS ON GOVERNMENT PROCUREMENTS MUST ALLOW THEIR BIDS TO REMAIN OPEN FOR A STATED MINIMUM PERIOD AFTER BID OPENING, DURING WHICH THEY CANNOT WITHDRAW OR REVOKE THEM AT WILL. SEE REFINING ASSOCIATES, INC. V. UNITED STATES, 124 CT.CL. 115. HOWEVER, THE LAW IS CLEAR THAT A BIDDER CANNOT BE BOUND BY AN ACCEPTANCE OF HIS BID WHEN THE PARTY ACCEPTING IT IS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, THAT THE BID DOES NOT, BY REASON OF ERROR, STATE THE TRUE INTENT OF THE BIDDER. PERMITTING THE BID TO BE WITHDRAWN OR DISREGARDED IS THUS NECESSARY TO AVOID THE MAKING OF UNENFORCEABLE AWARDS, AND THE REQUIREMENT OF PROOF OF ERROR SERVES TO PREVENT BIDDERS FROM TENDERING HASTY OR CARELESS OR IRRESPONSIBLE BIDS WITH THE IDEA THAT THEY MAY BE WITHDRAWN AT WILL.

CORRECTION, RATHER THAN WITHDRAWAL, OF AN ERRONEOUS BID IS A LONG ESTABLISHED PRACTICE IN PROPER CASES SANCTIONED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AS A JUSTIFIABLE MEANS OF PREVENTING THE LOSS TO THE GOVERNMENT OF A POTENTIALLY ADVANTAGEOUS BID. SINCE CORRECTION IS NEVER PERMITTED WHERE ITS EFFECT WOULD BE TO DISPLACE ANOTHER BID (UNLESS THE CORRECT AMOUNT IS CLEARLY ASCERTAINABLE FROM THE FACE OF THE BID), THE PROPRIETY OF PERMITTING CORRECTION IS ESSENTIALLY A MATTER BETWEEN THE BIDDER AND GOVERNMENT (SEE 42 COMP. GEN. 723, 725) AND THE INTEREST OF OTHER BIDDERS, WHO WOULD NOT BE IN LINE FOR AWARD UNLESS THE BID IN QUESTION WERE REJECTED, ARE NOT CONSIDERED TO BE SUCH AS TO ENTITLE THEM TO PARTICIPATE AS ADVERSARY PARTIES IN THIS PURELY ADMINISTRATIVE DETERMINATION, ALTHOUGH THEY ARE PERMITTED TO APPLY FOR AND OBTAIN REVIEW BY OUR OFFICE OF THE ADMINISTRATIVE ACTION.

AS STATED IN OUR PRIOR DECISION, WE HAVE CAREFULLY CONSIDERED THE RECORD BEFORE THE ADMINISTRATIVE OFFICE AND CONCLUDED THAT THE PROOF OF THE INTENDED BID WAS FULLY ADEQUATE TO SUPPORT THE CORRECTION ALLOWED. FOR THE REASONS ABOVE INDICATED, AND SINCE THE CORRECTION WAS PERMITTED IN STRICT ACCORDANCE WITH THE REGULATIONS, OF WHICH ALL BIDDERS WERE ON NOTICE, WE DO NOT BELIEVE THAT THERE IS ANY LEGAL BASIS ON WHICH THE VALIDITY OF THE CONTRACT AWARDED CAN BE QUESTIONED, AND OUR DECISION OF APRIL 26, 1965, IS THEREFORE SUSTAINED.