B-132385, B-132386, NOV. 20, 1957

B-132385, B-132386, NOV. 20, 1957

TO J. E. MORGAN AND SONS:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF JUNE 29, 1957 AND TO LETTER DATED OCTOBER 16, 1957, FROM YOUR ATTORNEYS, ENCLOSING A BRIEF IN SUPPORT OF YOUR PROTEST AGAINST THE ACTION TAKEN BY CONTRACTING OFFICIALS IN CONNECTION WITH YOUR BIDS SUBMITTED IN RESPONSE TO INVITATIONS FOR BIDS NOS. AIV-41-014-57-189 AND AIV-41-014-57-191, ISSUED BY THE DEPARTMENT OF THE ARMY, FORT BLISS, TEXAS.

THE REPORT AND PAPERS FURNISHED BY THE DEPARTMENT OF THE ARMY IN THE MATTER SHOW THAT THE TWO INVITATIONS REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS NECESSARY FOR THE CONVERSION, ALTERATIONS, AND ADDITIONS TO VARIOUS FACILITIES AND BUILDINGS AT FORT BLISS, TEXAS. INSOFAR AS CONCERNS THE QUESTION HERE INVOLVED, BOTH OF THE INVITATIONS AND THE BIDS SUBMITTED BY YOU IN RESPONSE THERETO ARE SIMILAR AND, THEREFORE, THEY WILL BE CONSIDERED HEREINAFTER AS ONE AND WHAT IS SAID IS EQUALLY APPLICABLE TO BOTH, UNLESS OTHERWISE SPECIFICALLY STATED.

PARAGRAPHS 11 AND 12 OF STANDARD FORM 22, INSTRUCTIONS TO BIDDERS, WHICH FORMED A PART OF THE INVITATION, INFORMED BIDDERS THAT THE CONTRACT WOULD BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID CONFORMING TO THE INVITATION FOR BIDS WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED; THAT THE GOVERNMENT RESERVED THE RIGHT, AS ITS INTERESTS MIGHT REQUIRE, TO REJECT ANY AND ALL BIDS, TO WAIVE ANY INFORMALITIES IN THE BIDS RECEIVED, AND TO ACCEPT OR REJECT ANY OR ALL ITEMS OF ANY BID UNLESS QUALIFIED BY SPECIFIC LIMITATION OF THE BIDDER.

FOR BIDDING PURPOSES THE WORK TO BE PERFORMED UNDER THE INVITATIONS WAS BROKEN DOWN IN APPENDIX A, SCHEDULE OF ITEMS BID, INTO LOTS. THE SCHEDULE AND YOUR BID SUBMITTED THEREON, TOGETHER WITH A RESERVATION WHICH IS UNDERSCORED, IS AS FOLLOWS:

TABLE

"LOT I--- ALL WORK IN CONNECTION WITH THE RENOVATION OF

SOUTH FORT BLISS TO SUPPORT SAM PROGRAM, FORT BLISS,

TEXAS, IN ACCORDANCE WITH SPECIFICATIONS NO. 7-83,

DATED 1 MAY 1957.

FOR THE JOB $490,930.00

"LOT II--- ALL WORK IN CONNECTION WITH THE CONVERSION OF

BUILDINGS TO SCHOOL AND LABORATORY FACILITIES, 1600 -

1700 AREAS, FORT BLISS, TEXAS, IN ACCORDANCE WITH

SPECIFICATIONS NO. 7-84, DATED 3 MAY 1957.

FOR THE JOB $365,793.00

"LOT III--- ALL WORK IN CONNECTION WITH THE CONVERSION OF

BUILDINGS TO SCHOOL AND LABORATORY FACILITIES,

1800 AREA, FORT BLISS, TEXAS, IN ACCORDANCE

WITH SPECIFICATIONS NO. 7-85, DATED 3 MAY 1957.

FOR THE JOB $239,944.00

"LOT IV--- ALL WORK IN CONNECTION WITH LOTS I, II, III, ON

AN "ALL OR NONE" BASIS

FOR THE JOB $1,091,667.00

"WE RESERVE THE RIGHT TO ACCEPT OR REJECT ANY ONE OF THE ABOVE NUMBERED LOTS OFFERED US.'

A TOTAL OF FIVE BIDS WERE RECEIVED IN RESPONSE TO EACH OF THE INVITATIONS. YOURS WAS THE ONLY ONE WHICH CONTAINED A LIMITATION ON ACCEPTANCE OF THE VARIOUS LOTS. WITHOUT CONSIDERING THE LIMITATIONS CONTAINED IN YOUR BIDS, THE LOW AGGREGATE BIDS ON BOTH INVITATIONS WOULD HAVE CONSISTED OF YOUR QUOTATIONS ON LOTS II AND III, TOGETHER WITH THE QUOTATION OF ANOTHER BIDDER ON LOT I. YOUR QUOTATIONS ON AN "ALL OR NONE" BASIS (LOT IV) WERE THE LOWEST.

IMMEDIATELY FOLLOWING THE OPENING OF THE BIDS ON AIV 189 ON JUNE 14, 1957, ONE OF THE BIDDERS ADVISED THE CONTRACTING OFFICER THAT IF YOUR BID WERE ACCEPTED A FORMAL PROTEST WOULD BE MADE IN VIEW OF THE RESERVATION CONTAINED IN YOUR BID. THE BIDDER WAS ADVISED THAT NO AWARD WOULD BE MADE UNTIL A LEGAL OPINION WAS OBTAINED. THE CONTRACTING OFFICER REFERRED THE MATTER TO THE STAFF JUDGE ADVOCATE FOR AN OPINION AND CONCURRENTLY CONTACTED YOU BY TELEPHONE AND ASKED WHETHER YOU WOULD ACCEPT AWARD ON LOTS II AND III. YOU ADVISED THAT YOU WOULD NOT AS CERTAIN COSTS HAD BEEN INCLUDED IN LOT I WHICH PERMITTED THE LOW BIDS ON LOTS II AND III. THE CONTRACTING OFFICER WAS ADVISED THAT THE RESERVATION CONTAINED IN YOUR BID MADE IT NON RESPONSIVE TO THE INVITATION AND THAT THE DEVIATION WAS NOT CONSIDERED AN INFORMALITY WHICH COULD BE WAIVED. IN VIEW THEREOF YOUR BID WAS REJECTED AND THE AWARD WAS MADE TO THE BIDDER WHO HAD SUBMITTED THE LOW RESPONSIVE BID.

YOUR PROTEST AGAINST THE ACTION TAKEN BY THE CONTRACTING OFFICIALS PRIMARILY IS ON THE BASIS THAT THE RESERVATION CONTAINED IN YOUR BID WAS APPLICABLE ONLY TO LOTS I, II AND III AND THAT THE BID ON LOT IV ("ALL OR NONE") WAS FIRM. IN SUPPORT OF YOUR CONTENTION IT IS STATED IN YOUR ATTORNEY'S BRIEF:

"FIRST OF ALL, MORGAN BY ITS BIDDING RESERVATION WAS SIMPLY SAYING THAT IT WAS RESERVING THE RIGHT TO ACCEPT OR REJECT ANY ONE OF THE ITEMS OF WORK. LOT IV, DESPITE ITS IDENTIFYING LABEL, WAS IN TRUTH AND IN FACT THREE ITEMS OF WORK, NOT "ANY ONE" AND IT WAS CLEARLY SO STATED AS SUCH: "ALL WORK IN CONNECTION WITH LOTS I, II, AND III.' MORGAN AND SONS SUBMIT THAT WHAT EACH "LOT" STANDS FOR, THE WORK THAT IT INVOLVES, IS THE CRITICAL CONSIDERATION AND NOT THE DESIGNATION OR LABEL IT CARRIED.

"WHEN MORGAN WROTE INTO ITS BID THE WORDS "ANY ONE" IT WAS CALCULATINGLY SELECTING THE WORDS THAT WOULD RESERVE THE RIGHT TO ACCEPT OR REJECT SEPARATE AWARDINGS OF THE THREE ITEMS, LEAVING AS A FIRM AND BINDING BID THE "ALL OR NONE" BID FIGURE. HAD MORGAN DONE OR ATTEMPTED TO DO WITH ITS RESERVATION WHAT THE ARMY HAS SUGGESTED THAT IT DID DO, THEN THE QUESTION MIGHT WELL BE ASKED BY A FAIR AND IMPARTIAL OBSERVER, WHY DID THEY BOTHER TO USE THE WORD "ONE," WHY DIDN-T THEY JUST SIMPLY SAY: "WE RESERVE THE RIGHT TO ACCEPT OR REJECT ANY OF THE ABOVE WORK OFFERED US? " "

IT IS WELL RECOGNIZED THAT A BID IS AN OFFER WHICH UPON PROPER ACCEPTANCE RIPENS INTO A CONTRACT. AN OFFER HAS BEEN DEFINED AS AN ACT ON THE PART OF ONE PERSON WHEREBY HE GIVES TO ANOTHER THE LEGAL POWER OF CREATING THE OBLIGATION CALLED CONTRACT. IN VIEW OF THE RESERVATION CONTAINED IN YOUR BIDS OF "THE RIGHT TO ACCEPT OR REJECT ANY ONE OF THE ABOVE-NUMBERED LOTS OFFERED US" IT MAY NOT BE CONSIDERED THAT YOUR PURPORTED BIDS IN FACT CONSTITUTED OPERATIVE BIDS (OFFERS) ON YOUR PART. HOWEVER, IT IS CONTENDED THAT THE RESERVATION WAS APPLICABLE ONLY TO LOTS I, II AND III AND, THEREFORE, THERE REMAINS THE QUESTION AS TO WHETHER THE RESERVATION WAS APPLICABLE TO LOT IV.

THE SCHEDULE OF ITEMS BID SET FORTH ABOVE CONSISTS OF FOUR LOTS--- LOT I, LOT II, LOT III AND LOT IV. ALTHOUGH IT IS TRUE THAT LOT IV CONSISTED OF ALL THE WORK COVERED BY THE FIRST THREE LOTS AND WAS MERELY REQUESTING BIDS ON "ALL OR NONE" BASIS, IT NONETHELESS WAS SPECIFICALLY DESIGNATED AS LOT IV AND IS AS MUCH OF A "LOT" AS ANY ONE OF THE OTHER THREE. THE RESERVATION WAS WRITTEN BY YOU IMMEDIATELY BELOW LOT IV AND IT IS NOT UNDERSTOOD HOW IT CAN BE SERIOUSLY CONTENDED THAT THE CLEAR AND PLAIN LANGUAGE OF THE RESERVATION WAS NOT AS EQUALLY APPLICABLE TO LOT IV AS ANY ONE OF THE OTHER THREE LOTS. HENCE, IT MUST BE CONSIDERED THAT YOUR BIDS ON ALL FOUR LOTS DID NOT CONSTITUTE AN OPERATIVE OFFER GIVING THE GOVERNMENT THE LEGAL POWER, BY ACCEPTANCE, OF CREATING A VALID AND BINDING CONTRACT.

IT IS FUNDAMENTAL THAT UNDER THE LAWS REQUIRING PUBLIC ADVERTISEMENT, BIDS MUST BE SUBMITTED PRIOR TO THE TIME SET FOR THE OPENING. A BID, ALTHOUGH TIMELY SUBMITTED, WHICH RESERVES THE RIGHT IN THE BIDDER TO ACCEPT OR REJECT AN ACCEPTANCE BY THE GOVERNMENT, MAY NOT BE MODIFIED AFTER THE BID OPENING BY WITHDRAWAL OF THE CONDITION OR OTHERWISE SO AS TO CONSTITUTE AN OPERATIVE OFFER. ANY SUCH ACTION WOULD BE TANTAMOUNT TO PERMITTING BIDS TO BE SUBMITTED AFTER THE OPENING OF THE BIDS, IN THAT IT WOULD PLACE IN THE BIDDER THE POWER OF DECIDING, AFTER THE DISCLOSURE OF THE OTHER BIDS RECEIVED, WHETHER OR NOT HE DESIRED TO ACCEPT AN AWARD.

ACCORDINGLY, IT MUST BE CONCLUDED THAT THE ADMINISTRATIVE ACTION TAKEN IN REJECTING YOUR BIDS AS NOT BEING RESPONSIVE TO THE INVITATION FOR BIDS WAS PROPER AND THAT THERE IS NO BASIS UPON ..END :