B-163744, APR. 26, 1968

B-163744: Apr 26, 1968

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MITCHELL AND BIXLER: REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 21. THAT SAID BID WAS NOT RESPONSIVE TO THE TERMS OF THE INVITATION. BECAUSE THE TWO BIDS WERE INTERRELATED SEGMENTS OF ONE PROCUREMENT. THE PROTEST WAS DENIED ON THIS BASIS. IN YOUR CURRENT CORRESPONDENCE A NUMBER OF ARGUMENTS ARE ADVANCED IN SUPPORT OF YOUR ALLEGATION THAT OUR DECISION WAS IN ERROR. THESE CONTENTIONS ARE FIRST QUOTED THEN COMMENTED UPON IN ORDER BELOW: "1. THAT NO NEW IFB WAS ISSUED. SUCH A PROCEDURE IS CONTRARY TO ASPR 2-404.1 WHICH CONTEMPLATES CANCELLATION OF AN IFB WHERE ALL PRIOR BIDS ARE REJECTED AND THE ISSUANCE OF A NEW IFB. THIS WAS THE PROCEDURE CLEARLY CONTEMPLATED BY THE NAVY. ANY OTHER PROCEDURE WOULD HAVE BEEN MANIFESTLY UNFAIR TO OTHER BIDDERS.'.

B-163744, APR. 26, 1968

TO LEWIS, MITCHELL AND BIXLER:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 21, 1968, AND LETTERS OF MARCH 22 AND 25, 1968, REQUESTING RECONSIDERATION OF OUR DECISION, B- 163744, OF MARCH 21, 1968. THE SUBJECT DECISION CONCERNED YOUR CONTENTION, ADVANCED IN BEHALF OF PHOENIX GENERAL CONSTRUCTION COMPANY (PHOENIX), THAT INDUSTRIAL ENGINEERING COMPANY, INCORPORATED(INDUSTRIAL), THE APPARENT LOW BIDDER AT THE SECOND (FEBRUARY 14, 1968) OPENING OF BIDS UNDER INVITATION NO. N62477-68-B 0039 ISSUED BY THE CHESAPEAKE DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, WASHINGTON NAVY YARD, WASHINGTON, D.C., HAD NOT PROPERLY ACKNOWLEDGED AMENDMENT NO. 1 AND, THEREFORE, THAT SAID BID WAS NOT RESPONSIVE TO THE TERMS OF THE INVITATION.

WE CONCLUDED THAT BECAUSE INDUSTRIAL HAD DEMONSTRATED ACTUAL KNOWLEDGE OF AMENDMENT NO. 1, AS EVIDENCED BY ITS FIRST BID, AND BECAUSE THE TWO BIDS WERE INTERRELATED SEGMENTS OF ONE PROCUREMENT, INDUSTRIAL'S FAILURE TO ACKNOWLEDGE AMENDMENT NO. 1 IN THE USUAL FORM ON ITS SECOND BID DID NOT AFFECT THE RESPONSIVENESS OF THAT BID. THE PROTEST WAS DENIED ON THIS BASIS.

IN YOUR CURRENT CORRESPONDENCE A NUMBER OF ARGUMENTS ARE ADVANCED IN SUPPORT OF YOUR ALLEGATION THAT OUR DECISION WAS IN ERROR. THESE CONTENTIONS ARE FIRST QUOTED THEN COMMENTED UPON IN ORDER BELOW:

"1. YOU ADMIT, PAGE 3, THE -UNUSUAL CIRCUMSTANCES OF THIS PROCUREMENT;- TO WIT, THAT NO NEW IFB WAS ISSUED. SUCH A PROCEDURE IS CONTRARY TO ASPR 2-404.1 WHICH CONTEMPLATES CANCELLATION OF AN IFB WHERE ALL PRIOR BIDS ARE REJECTED AND THE ISSUANCE OF A NEW IFB. THIS WAS THE PROCEDURE CLEARLY CONTEMPLATED BY THE NAVY, AS INDICATED BY THEIR REPORT TO YOU OF 6 MARCH 1968 AND BY THEIR LETTER TO THE BIDDERS OF 11 JANUARY 1968 (ENCLOSURE 6 TO THE REPORT). SINCE AMENDMENT 4 REMOVED THE RESTRICTION OF SMALL BUSINESS QUALIFIED BIDDERS, ANY OTHER PROCEDURE WOULD HAVE BEEN MANIFESTLY UNFAIR TO OTHER BIDDERS.'

IT IS CERTAINLY TRUE THAT THIS PROCUREMENT INVOLVED "UNUSUAL CIRCUMSTANCES" . HOWEVER, OUR OPINION WAS LIMITED TO THE LEGAL EFFECT OF INDUSTRIAL'S BID UNDER THE FACTS AS THEY EXIST, AND DID NOT TOUCH THE DESIRABILITY OF THE PROCUREMENT TECHNIQUES REVEALED BY THE RECORD. MAKE CLEAR OUR POSITION IN THIS REGARD, WE ARE ADDRESSING A SEPARATE LETTER TO THE NAVY DEPARTMENT POINTING OUT THAT IN OUR OPINION THE PRACTICES USED IN THIS PROCUREMENT SHOULD BE DISCONTINUED.

AS YOU INDICATE, ASPR 2-404.1 CONTEMPLATES THE CANCELLATION OF A SOLICITATION WHEN ALL BIDS ARE REJECTED, AND THE ISSUANCE OF A SEPARATE SOLICITATION IN ITS PLACE. IT IS ALSO TRUE THAT THE PROCURING ACTIVITY'S LETTER OF JANUARY 11, 1968, ADVISING BIDDERS THAT ALL BIDS HAD BEEN REJECTED, TENDS TO SUPPORT YOUR POSITION THAT THIS PROCUREMENT SHOULD BE VIEWED AS TWO SEPARATE SOLICITATIONS IN ACCORDANCE WITH ASPR.

HOWEVER, WE BELIEVE THAT A PREPONDERANCE OF THE EVIDENCE TENDS TO SUPPORT THE CONCLUSION THAT THIS WAS ONE CONTINUOUS PROCUREMENT PROCESS RATHER THAN TWO SEPARATE SOLICITATIONS. FURTHER, ALTHOUGH ASPR 2-404.1 CONTEMPLATES SEPARATE SOLICITATIONS IN CASES REQUIRING CANCELLATION AND REISSUANCE OF INVITATIONS, WE BELIEVE THAT THE PROCESS FOLLOWED IN THIS CASE WILL RESULT IN A VALID, BINDING CONTRACT.

FINALLY, REGARDING THE FACT THAT AMENDMENT NO. 4 REMOVED THE SMALL BUSINESS SET-ASIDE RESTRICTION, ASPR 1-706.3 PROVIDES THAT A CONTRACTING OFFICER MAY, UNDER CERTAIN CIRCUMSTANCES, WITHDRAW A SMALL BUSINESS SET- ASIDE AT ANY TIME PRIOR TO THE AWARD OF A CONTRACT. THIS WOULD APPEAR TO PERMIT THE AMENDMENT OF AN EXISTING SOLICITATION TO ACCOMPLISH THIS PURPOSE, RATHER THAN REQUIRING CANCELLATION AND READVERTISEMENT IN EVERY CASE.

"2. ADMITTEDLY, ASPR IS FOR THE BENEFIT OF THE GOVERNMENT, NOT CONTRACTORS. HOWEVER, THE COURTS HAVE HELD THAT CONTRACTORS ARE OBLIGATED BY THE TERMS OF THOSE REGULATIONS. HOW, THEREFORE, CAN A CONTRACTOR BE SAID TO ANTICIPATE AND THEREBY BENEFIT FROM A PROCEDURE OUTSIDE OF THE REGULATIONS AS YOU HAVE HELD IS THE CASE WITH INDUSTRIAL IN THE INSTANT MATTER?

OUR PRIOR DECISION WAS NOT PREMISED UPON THE ASSUMPTION THAT INDUSTRIAL COULD BE SAID "TO ANTICIPATE AND THEREFORE BENEFIT FROM A PROCEDURE OUTSIDE THE REGULATION.' WE BELIEVE, GENERALLY, THAT THE SUBMISSION OF AN OFFER REFLECTS AN INTENTION TO COMPLY WITH THE REQUIREMENTS OF THE INVITATION, THE REGULATIONS AND THE APPLICABLE STATUTES. TO ASSUME OTHERWISE IS TO ASSUME AN OFFEROR KNOWINGLY INDULGES IN A FUTILE ACT.

OUR PRIOR OPINION WAS RESTRICTED TO THE NARROW QUESTION OF WHETHER INDUSTRIAL'S SECOND BID COULD BE CONSIDERED LEGALLY RESPONSIVE. TO THE EXTENT THAT IT WAS NECESSARY TO IMPUTE AN INTENTION TO INDUSTRIAL, THE DECISION WAS PREMISED UPON THE ASSUMPTION THAT INDUSTRIAL'S FAILURE TO PROPERLY ACKNOWLEDGE AMENDMENT NO. 1 ON ITS SECOND BID WAS ATTRIBUTABLE TO EITHER INADVERTENCE OR A MISUNDERSTANDING OF THE FORMAL REQUIREMENTS REGARDING THE ACKNOWLEDGMENT OF BID AMENDMENTS.

"3. WE SUBMIT THE SAME IFB NUMBER WAS UTILIZED MERELY TO EXPEDITE THE PROCUREMENT NOT, AS YOU SUGGEST, TO CONSTITUTE A -CONTINUOUS SOLICITATION, - NOT PROVIDED FOR IN THE REGULATIONS. HAD A CONTINUOUS SOLICITATION BEEN INTENDED THE CONTRACTING OFFICER SHOULD HAVE MERELY SOLICITED CREDIT QUOTATIONS FROM THE ORIGINAL TEN BIDDERS FOR AMENDMENT 4, WHICH ALLOWED EXCAVATION BY BLASTING, INSTEAD OF GOING TO THE TROUBLE OF REQUIRING NEW BIDS.'

YOUR CONTENTION THAT THE SAME INVITATION NUMBER WAS UTILIZED TO EXPEDITE THE PROCUREMENT DOES NOT IN ANY WAY CONTRADICT OUR CONCLUSION THAT THE PROCUREMENT MUST BE VIEWED AS ONE CONTINUING SEQUENCE IN ORDER TO EVALUATE BIDS UNDER THE SECOND OPENING. IT IS LIKELY THAT TIME WAS ONE OF THE CONSIDERATIONS WHICH LED TO THE DECISION TO CONTINUE WITH THE ORIGINAL SOLICITATION AFTER THE FIRST OPENING OF BIDS. THE FACT THAT SOME OTHER ALTERNATIVE PROCESS, SUCH AS OBTAINING CREDIT QUOTATIONS FROM THE BIDDERS, COULD HAVE BEEN USED TO OBTAIN A SECOND ROUND OF PRICES DOES NOT BEAR UPON THE QUESTION BEFORE US, THE INTERPRETATION OF INDUSTRIAL'S BID UNDER THE FACTS AS THEY EXIST.

"4. IF A CONTINUOUS SOLICITATION WAS CONTEMPLATED WHY WERE THE BIDDERS REQUIRED TO FURNISH NEW BONDS INSTEAD OF CONTINUING THOSE ORIGINALLY SUBMITTED?

AGAIN, WE CANNOT ANSWER WHY SOME ALTERNATE TECHNIQUE WAS NOT USED. OUR COMMENTS ABOVE UPON PARAGRAPH NO. 1, REGARDING THE LETTER OF JANUARY 11, 1968, ARE FOR APPLICATION HERE.

"5. YOUR DECISION IS INCONSISTENT WITH THE FACTS;

(A) AMENDMENTS 4 AND 5 REQUIRED THAT -EACH AMENDMENT- BE ACKNOWLEDGED.-

THIS, OF COURSE, IS THE GIST OF THE ENTIRE CASE. WE BELIEVE OTHER FACTORS ACTED AS THE REQUIRED ACKNOWLEDGMENT IN LIEU OF THE USUAL ACKNOWLEDGMENT UPON THE BID FORM.

"/B) THAT NFEC'S MR. KING ORALLY INFORMED MR. LAGE OF PHOENIX THAT HE SHOULD ACKNOWLEDGE AMENDMENTS 1, 2, 3, 4 AND 5.'

ASSUMING THIS CONTENTION TO BE TRUE, WE WOULD EXPECT GOVERNMENT PROCUREMENT PERSONNEL TO SO ADVISE PROSPECTIVE CONTRACTORS IN ORDER TO INSURE RESPONSIVENESS UNDER ORDINARY CIRCUMSTANCES. UNDER THE FACTS OF THIS CASE, SUCH ADVICE WOULD ENABLE PROSPECTIVE BIDDERS TO AVOID THE POSSIBILITY OF DISPUTES SUCH AS THE ONE AT HAND.

"/C) PHOENIX DID RECEIVE ANOTHER COPY OF AMENDMENT NO. 1 AFTER THE FIRST BID OPENING BUT BEFORE THE SECOND.'

WE HAVE NO PROOF OF THIS CONTENTION. THE NAVY INFORMS US THAT ACCORDING TO ITS RECORDS AMENDMENT NO. 1 WAS NOT REISSUED AFTER THE FIRST BID OPENING. THE NAVY FURTHER ADVISES THAT, TO THE BEST OF ITS KNOWLEDGE, NO OTHER COPIES OF AMENDMENT NO. 1 WERE DISTRIBUTED AFTER THE FIRST BID OPENING EITHER UPON REQUEST OR OTHERWISE.

IN CIRCUMSTANCES SUCH AS THESE IT IS THE LONG STANDING POLICY OF OUR OFFICE TO ACCEPT THE ADMINISTRATIVE VERSION OF FACTS IN ISSUE IN THE ABSENCE OF A CLEAR INDICATION TO THE CONTRARY.

"/D) THAT PHOENIX'S FIRST BID WAS LESS THAN THE FUNDS AVAILABLE AT THE TIME OF THE SECOND BID OPENING.'

ALTHOUGH THE PHOENIX FIRST BID MAY HAVE BEEN LESS THAN THE FUNDS AVAILABLE AT THE TIME OF THE SECOND BID OPENING, THE SPECIFICATIONS HAD BY THEN BEEN CHANGED AND THE PHOENIX BID, IN ANY CASE, WAS NO LONGER LOW.

"6. IT IS SUBMITTED THAT THE TERM -BID FORM REVISED- ON THE REISSUED BID FORM REFERRED TO THE FACT THAT ADDITIONAL BID ITEMS WERE REQUIRED AND WAS NOT INTENDED TO EVIDENCE A -CONTINUOUS SOLICITATION.- "

WE AGREE THAT THE INSERTION OF THE WORD "REVISED" AFTER THE WORDS "BID FORM," BY ITSELF, IS OPEN TO VARIOUS INTERPRETATIONS. IN OUR OPINION, IN THE CONTEXT OF THIS CASE, THIS CHOICE OF WORDS SHOULD BE TAKEN AS ONE AMONG MANY SIGNS THAT THE NAVY CONSIDERED THE PROCUREMENT AS ONE CONTINUOUS PROCESS INVOLVING TWO BID OPENINGS, AND, THAT, ACCORDINGLY, BIDDERS WERE TO SUBMIT REVISIONS OF THEIR PRIOR OFFERS.

"7. YOUR ARGUMENT, PAGE 4, THAT ACKNOWLEDGEMENT OF AMENDMENT 4 WAS ACKNOWLEDGEMENT OF AMENDMENT 1 IS OBVIOUSLY LESS PERSUASIVE THAN THE CONVERSE; TO WIT, THAT SINCE AMENDMENT 4 CANCELLED AND SUPERSEDED AMENDMENTS 2 AND 3, THAT AMENDMENTS 1 AND 4 HAD TO BE ACKNOWLEDGED, PARTICULARLY IN LIGHT OF THE FACT THAT AMENDMENT 4 REQUIRED THAT -EACH AMENDMENT- BE KNOWLEDGED.'

ADMITTEDLY, THIS ASPECT OF THE CASE, STANDING ALONE, MIGHT BE OPEN TO THE INTERPRETATION YOU SUGGEST. OUR EARLIER TREATMENT OF THIS ARGUMENT, BY PLACEMENT AND BY EMPHASIS, INDICATES THAT IT WAS CONSIDERED AN ADDED FACTOR, NOT CRUCIAL TO OUR CONCLUSIONS. IN THE CONTENT OF THIS CASE, CANCELLATION OF AMENDMENT NOS. 2 AND 3 COULD REASONABLY BE TAKEN TO IMPLY THAT THE GOVERNMENT CONSIDERED ALL THREE PRIOR AMENDMENTS IN EFFECT UNTIL CANCELLED, AND THAT, THEREFORE, AMENDMENT NO. 1 NOT HAVING BEEN CANCELLED, REMAINED IN EFFECT.

FINALLY, YOUR LETTER OF MARCH 25, 1968, STATES THAT IF INDUSTRIAL DID NOT GRANT THE GOVERNMENT AN EXTENSION OF ITS BID ACCEPTANCE TIME, INDUSTRIAL SHOULD NOT BE AWARDED A CONTRACT. THE NAVY ADVISES US THAT INDUSTRIAL DID IN FACT PROPERLY EXTEND ITS BID ACCEPTANCE TIME IN A TIMELY FASHION.

IN ACCORDANCE WITH THE FOREGOING, WE FIND NO BASIS TO MODIFY OUR DECISION, B-163744, MARCH 21, 1968.

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