B-138973, APRIL 6, 1959, 38 COMP. GEN. 674

B-138973, APRIL 6, 1959, 38 COMP. GEN. 674

BIDS - LATE - TELEGRAPHIC MODIFICATION - REDUCTION OF LOW BID A LOW BIDDER WHO SENT TWO TELEGRAMS REDUCING THE PRICE QUOTED IN THE ORIGINAL BID BY DIFFERENT AMOUNTS IN TIME TO REACH THE PROCUREMENT AGENCY PRIOR TO OPENING AND WHO SEEKS TO PREVENT CONSIDERATION OF ONE TELEGRAM, WHICH WAS RECEIVED 6 MINUTES AFTER BID OPENING, BECAUSE THE ORIGINAL BID WAS LOW HAS THE BURDEN OF PROVING THAT THE TELEGRAM WAS NOT TIMELY FILED AND TO HAVE BEEN RECEIVED WITHIN THE TIME SPECIFIED THROUGH NORMAL TRANSMISSION FACILITIES, IN THE ABSENCE OF SUCH PROOF, BOTH TELEGRAMS ARE PROPER FOR CONSIDERATION AS A PART OF THE BID AND REMAIN OPEN FOR ACCEPTANCE FOR THE FULL TIME FIXED FOR ACCEPTANCE OF THE BID.

TO THE SECRETARY OF THE ARMY, APRIL 6, 1959:

REFERENCE IS MADE TO A LETTER DATED MARCH 11, 1959, WITH ENCLOSURES, FROM THE HONORABLE F. H. HIGGINS, ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS), REQUESTING A DECISION AS TO WHETHER RELIEF MAY BE GRANTED IN THE FORM OF A $5,000 INCREASE IN THE ESTIMATED AMOUNT OF CONTRACT NO. DA-25-066-ENG- 5052, ENTERED INTO ON JUNE 30, 1958, WITH CHARLES RAMSEY AND COMPANY AND J. D. LEFTWICH CONTRACTORS, INC., FOR THE CONSTRUCTION OF A SERVICE CLUB AND TWO CLASSROOMS AT FORT CARSON, COLORADO, PURSUANT TO INVITATION FOR BIDS NO. ENG-25-066-58-150, ISSUED BY THE DISTRICT ENGINEER, OMAHA, NEBRASKA, ON MAY 19, 1958, WITH BIDS HAVING BEEN SCHEDULED FOR OPENING AT 2 P.M., M.S.T., JUNE 18, 1958, IN THE OFFICE OF THE AREA ENGINEER, CORPS OF ENGINEERS, DENVER FEDERAL CENTER, DENVER, COLORADO.

THE INVITATION CALLED FOR BIDS ON 36 LUMP-SUM AND UNIT PRICE ITEMS. THE CONTRACTOR APPARENTLY SUBMITTED A BID WITH PRICES AGGREGATING THE AMOUNT OF $773,284.72. HOWEVER, BY TWO TELEGRAMS DISPATCHED ON THE DATE OF THE BID OPENING THE CONTRACTOR REQUESTED THAT CHANGES BE MADE IN CERTAIN OF ITS BID PRICES. THE FIRST TELEGRAM REDUCED THE TOTAL BID BY $99,024 AND THE SECOND TELEGRAM FURTHER REDUCED THE TOTAL BID BY $5,000. THE FIRST TELEGRAM WAS RECEIVED BEFORE THE SCHEDULED TIME FOR OPENING OF BIDS BUT THE SECOND TELEGRAM WAS RECEIVED SIX MINUTES LATE, OR AT 2:06 P.M., M.S.T. THE ABSTRACT OF BIDS SHOWS THAT THE NET TOTAL BID--- AFTER GIVING EFFECT TO BOTH REDUCTIONS--- WAS $669,260.72, AND THAT FIVE OTHER BIDDERS QUOTED PRICES AGGREGATING THE APPROXIMATE AMOUNTS OF $679,000, $683,000, $705,000, $763,000, AND $817,000. THE INVITATION PERMITTED BIDS TO BE MODIFIED BY TELEGRAPH, SUBJECT TO CERTAIN LIMITATIONS, AND IT WAS PROVIDED, IN EFFECT, THAT THE GOVERNMENT WOULD HAVE THE RIGHT TO ACCEPT ANY BID WITHIN 30 DAYS AFTER THE DATE OF OPENING OF BIDS. THE CONTRACTOR'S BID MADE NO EXCEPTION TO THE STATED 30-DAY ACCEPTANCE PERIOD.

NOTICE OF AWARD IN THE AMOUNT OF $669,260.72 WAS FURNISHED TO THE CONTRACTOR BY TELEGRAM OF JUNE 30, 1958. THE CONTRACTOR ACKNOWLEDGED RECEIPT OF THE NOTICE BY TELEGRAM DATED JULY 1, 1958, BUT REQUESTED AN EXPLANATION OF THE STATED AMOUNT OF THE CONTRACT, ON THE BASIS OF ITS UNDERSTANDING THAT THE TELEGRAM WHICH DEDUCTED $5,000 FROM ITS PROPOSAL WAS RECEIVED SIX MINUTES AFTER THE BID OPENING. IT WAS EXPLAINED IN A TELEGRAM OF JULY 3, 1958, TO THE CONTRACTOR, THAT NO REQUEST WAS MADE TO DISREGARD THE SECOND TELEGRAM DISPATCHED ON JUNE 18, AND THAT THE RULE THAT AMENDMENTS TO BIDS RECEIVED AFTER OPENING ARE TO BE DISREGARDED DOES NOT APPLY TO A SITUATION WHERE A BID "IS ALREADY LOWEST" AND THE BIDDER PROPOSES BY SUCH AN AMENDMENT TO REDUCE ITS BID PRICE. THERE WAS CITED THE CASE OF ALECK LEITMAN V. UNITED STATES, 104 C.1CLS. 324, IN SUPPORT OF THE ACTION TAKEN. THIS TELEGRAM WAS CONFIRMED BY A LETTER OF THE SAME DATE, WHICH CONTAINED THE FOLLOWING ADDITIONAL STATEMENT:

IN ADDITION, THE DENVER WESTERN UNION OFFICES ADVISES THAT A WIRE DISPATCHED AT 1:30 P.M. FROM COLORADO SPRINGS WOULD, UNDER NORMAL CONDITIONS, REACH THE DENVER FEDERAL CENTER OFFICE WITHIN 30 MINUTES. YOUR WIRE NO. 2 OF 18 JUNE 1958, HOWEVER, WAS RECEIVED APPROXIMATELY 57 MINUTES AFTER TIME OF DISPATCH, THUS INDICATING THE DELAY WAS DUE SOLELY TO A DELAY "IN THE MAILS" WITHIN THE MEANING OF PARAGRAPH 7 OF INSTRUCTIONS TO BIDDERS ( STANDARD FORM 22).

BY LETTER DATED JULY 12, 1958, THE CONTRACTOR FORWARDED THREE EXECUTED COPIES OF THE CONTRACT BUT STATED THAT "WE MUST, HOWEVER, PROTEST THE AMOUNT OF THE CONTRACT, INASMUCH AS YOU HAVE TAKEN INTO ACCOUNT THE WIRE YOU RECEIVED LATE WHICH DEDUCTED $5000.00.' IN A LETTER DATED JULY 21, 1958, WHICH REQUESTED A DECISION OF THE CONTRACTING OFFICER, IT WAS CONTENDED THAT THE CIRCUMSTANCES CONCERNING THIS AWARD DIFFERED FROM THOSE OF THE LEITMAN CASE IN SEVERAL IMPORTANT PARTICULARS. IT WAS ALLEGED THAT A CALL WAS MADE TO THE DENVER AREA OFFICE ON JUNE 19, 1958, AND THAT THE CONTRACTOR'S REPRESENTATIVE ASKED MR. HENNING F. NELSON, CHIEF OF OPERATIONS, WHAT ACTION WAS PLANNED WITH REFERENCE TO THE TELEGRAM WHICH REDUCED THE PROPOSAL BY $5,000; THAT MR. NELSON HAD STATED THAT HE AND THE AREA ENGINEER HAD DISCUSSED THE MATTER AND THAT THEY HAD RECOMMENDED THAT THE SECOND TELEGRAM RECEIVED ON JUNE 18, 1958, BE DISREGARDED. MR. NELSON PURPORTEDLY WAS ADVISED THAT IT WAS THE CONTRACTOR'S DESIRE THAT THE LAST WIRE BE DISREGARDED AND THAT THE CONTRACTOR WAS PLEASED TO LEARN THAT THIS WAS THE RECOMMENDATION OF THE AREA OFFICE. HOWEVER, IT WAS STATED IN THE LETTER THAT MR. NELSON EXPLAINED THAT THE ABSTRACT OF BIDS WOULD BE PREPARED AND THE AWARD DETERMINATION MADE AT THE OFFICE OF THE DISTRICT ENGINEER, OMAHA, NEBRASKA; AND THAT, ALTHOUGH THE CONTRACTOR WAS THE APPARENT LOW BIDDER, THE MATHEMATICS OF THE PROPOSALS HAD NOT BEEN CHECKED AND ONLY THE DISTRICT OFFICE COULD DETERMINE THE ACTUAL LOW BIDDER.

IN AN AFFIDAVIT DATED AUGUST 26, 1958, MR. NELSON STATED THAT THE FACTS STATED IN THE CONTRACTOR'S LETTER WERE TRUE, EXCEPT THAT TO THE BEST OF HIS RECOLLECTION HE DID NOT RECALL THAT THE CONTRACTOR SPECIFICALLY REQUESTED THAT HIS LATE TELEGRAM BE DISREGARDED; THAT HE ADVISED THE CONTRACTOR, WHEN ASKED WHAT HE PROPOSED TO DO WITH THE SECOND TELEGRAM, THAT IT APPEARED THAT IT COULD NOT BE CONSIDERED; AND THAT, UPON SUBMISSION OF THE MATTER TO THE DISTRICT ENGINEER FOR AWARD, HE HAD POINTED OUT THAT THE TELEGRAM WAS LATE AND IT APPEARED THAT IT COULD NOT LEGALLY BE CONSIDERED. ON SEPTEMBER 8, 1958, THE CONTRACTOR WAS ADVISED THAT NEITHER THE CONTRACTING OFFICER NOR THE CORPS OF ENGINEERS AND APPEALS BOARD HAD AUTHORITY TO ENTERTAIN THE REQUEST MADE FOR AN INCREASE IN THE CONTRACT PRICE BY THE AMOUNT OF $5,000 AND, IN ACCORDANCE WITH THE SUGGESTION MADE IN THE MATTER, THE CONTRACTOR REQUESTED THAT ITS CLAIM BE REFERRED TO OUR OFFICE FOR DECISION.

WHILE THERE IS SOME CONFLICT BETWEEN THE STATEMENTS OF THE CONTRACTOR AND OF MR. NELSON AS TO WHETHER THERE WAS AN EXPRESS REQUEST THAT THE SECOND TELEGRAM BE DISREGARDED, WE WOULD BE DISINCLINED TO HOLD, EVEN ON THE BASIS OF MR. NELSON'S RECOLLECTION, THAT THE REDUCTION THEREBY OFFERED COULD BE ACCEPTED, AFTER THIS CONVERSATION, AS A VOLUNTARY OFFER OF A LOW BIDDER TO REDUCE HIS PRICE. CF. MILLER V. UNITED STATES, 104 CT. CLS. 461. IF, HOWEVER, THE FACTS OF THE TRANSMISSION AND RECEIPT OF THE TELEGRAM IN QUESTION WERE SUCH AS TO ENTITLE IT TO CONSIDERATION AS A PART OF THE BID, THEN THE BIDDER WAS NOT ENTITLED TO WITHDRAW IT AND IT REMAINED OPEN FOR ACCEPTANCE FOR THE FULL TIME FIXED FOR ACCEPTANCE OF THE BID.

THE INVITATION FOR BIDS INCLUDED BY REFERENCE--- EXCEPT AS SPECIFICALLY MODIFIED--- THE PROVISIONS OF STANDARD FORM 22, INSTRUCTIONS TO BIDDERS. PARAGRAPH 5 (D) OF THAT FORM PROVIDES FOR CONSIDERATION OF TELEGRAPHIC MODIFICATIONS OF BIDS "IF RECEIVED PRIOR TO THE TIME FIXED IN THE INVITATION FOR BIDS.' THIS IS AMPLIFIED BY PARAGRAPH 7 (B), AS FOLLOWS:

SUBJECT TO THE PROVISIONS OF PARAGRAPH 5 (D) OF THESE INSTRUCTIONS, BIDS OR BID MODIFICATIONS WHICH WERE DEPOSITED FOR TRANSMISSION BY TELEGRAPH IN TIME FOR RECEIPT, BY NORMAL TRANSMISSION PROCEDURE, PRIOR TO THE TIME FIXED IN THE INVITATION FOR BIDS AND SUBSEQUENTLY DELAYED BY THE TELEGRAPH COMPANY THROUGH NO FAULT OR NEGLECT ON THE PART OF THE BIDDER, WILL BE CONSIDERED IF RECEIVED PRIOR TO THE AWARD OF THE CONTRACT. THE BURDEN OF PROOF OF SUCH ABNORMAL DELAY WILL BE UPON THE BIDDER AND THE DECISION AS TO WHETHER OR NOT THE DELAY WAS SO CAUSED WILL REST WITH THE OFFICER AWARDING THE CONTRACT.

SINCE IN THE PRESENT CASE THE BIDDER IS SEEKING TO PREVENT CONSIDERATION OF THE TELEGRAPHIC MODIFICATION, WE BELIEVE THAT THIS PROVISION SHOULD BE CONSTRUED TO IMPOSE UPON HIM THE BURDEN OF PROVING THAT HIS TELEGRAM WAS NOT FILED IN TIME. UNDER THE FACTS SET FORTH IN THE ABOVE QUOTED PORTION OF THE LETTER OF JULY 3, WHICH PRESUMABLY STATES THE DECISION OF THE CONTRACTING OFFICER, WE CONCLUDE THAT BOTH TELEGRAMS WERE PROPERLY FOR CONSIDERATION IN EVALUATING THE BIDS.

IN SUCH CIRCUMSTANCES, IT IS OUR OPINION THAT A BID MODIFICATION WHICH REDUCES THE PRICE OF THE ORIGINAL PROPOSAL WOULD BE EFFECTIVE, UNLESS OTHERWISE SPECIFIED, FOR THE SAME DURATION AS THE TIME ALLOWED BY THE BIDDER TO ACCEPT HIS ORIGINAL PROPOSAL. A BIDDER MIGHT BE WARRANTED IN WITHDRAWING HIS COMPLETE BID ON THE BASIS OF A MISTAKE IN BID, BUT SHOULD NOT BE PERMITTED TO WITHDRAW A MODIFICATION WHICH REDUCES HIS BID PRICE AND TO RECEIVE AN AWARD BASED UPON THE BID PRICE AT THE TIME OF OPENING OF BIDS SOLELY BY REASON OF THE FACT THAT HE WOULD HAVE BEEN ENTITLED TO THE AWARD IF HE HAD NOT SUBMITTED SUCH AN AMENDMENT TO HIS ORIGINAL OFFER. SEE LEITMAN V. UNITED STATES, 104 CT.1CLS. 324.

ACCORDINGLY, AND SINCE IT APPEARS THAT THE GOVERNMENT WAS JUSTIFIED IN MAKING THE AWARD ON THE BASIS OF THE ORIGINAL BID AS MODIFIED BY THE CONTRACTOR'S TWO TELEGRAMS OF JUNE 18, 1958, YOU ARE ADVISED THAT WE WOULD NOT BE WARRANTED IN RECOMMENDING OR APPROVING A CONTRACT MODIFICATION WHICH WOULD INCREASE THE CONTRACT AMOUNT BY $5,000, BASED UPON THE CONTRACTOR'S CONTENTION THE THE GOVERNMENT HAD NO RIGHT TO CONSIDER THE SECOND TELEGRAPHIC BID MODIFICATION.

THE ENCLOSURES OF THE LETTER DATED MARCH 11, 1959, ARE RETURNED HEREWITH.