B-145617, JUL. 7, 1961

B-145617, JUL. 7, 1961

TO ADMINISTRATOR, GENERAL SERVICE ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 7, 1961, FURNISHING A REPORT CONCERNING THE PROTEST OF KINEMAX CORPORATION AGAINST THE FAILURE OF THE GENERAL SERVICES ADMINISTRATION TO ACCEPT ITS BID UNDER PROJECT NO. 49219, COVERING CERTAIN WORK AT GALLAUDET COLLEGE, WASHINGTON, D.C.

BIDS FOR PROJECT NO. 49219 FOR THE CONSTRUCTION OF ROADS, WALKS, GRADING, ETC. (SITE UTILITIES), AT GALLAUDET COLLEGE, WERE INVITED ON JANUARY 30, 1961, WITH A BID OPENING DATE OF FEBRUARY 28, 1961, AND LIQUIDATED DAMAGES IN THE AMOUNT OF $60 PER CALENDAR DAY WERE INCLUDED IN THE PROJECT SPECIFICATIONS. BY ADDENDUM NO. 2 THE BID OPENING DATE WAS EXTENDED TO MARCH 7, 1961, AND THE TIME FOR PERFORMANCE OF THE WORK WAS REDUCED FROM 300 TO 210 CALENDAR DAYS.

FIVE BIDS WERE RECEIVED AND OPENED ON MARCH 7, 1961. THE LUMP SUM BID OF THE APPARENT LOW BIDDER OF $224,250 WAS CONSIDERED NONRESPONSIVE AS THE BIDDER SUBMITTED A BID BOND OF ONLY $4,000, ALLEGEDLY DUE TO AN ERROR BY THE SURETY, WHEREAS THE INVITATION REQUIRED A BID GUARANTEE OF NOT LESS THAN 20 PERCENT OF THE AMOUNT OF THE BID. 38 COMP. GEN. 532; 39 ID. 827. KINEMAX CORPORATION, THE PROTESTANT, SUBMITTED THE LOWEST RESPONSIVE BID IN THE LUMP SUM OF $229,800. THE THREE OTHER BIDS WERE IN THE AMOUNT OF $244,490, $276,650 AND $288,736. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS $253,400. NO CONTRACT WAS AWARDED AND ALL BIDS WERE ALLOWED TO EXPIRE BY FAILURE TO ACCEPT WITHIN THE 30 DAYS PROVIDED IN THE INVITATION.

IT IS REPORTED THAT CONTRACT NO. GS-R3-B-8036 FOR $1,032,800 FOR THE CONSTRUCTION OF KENDALL SCHOOL, ETC., AT GALLAUDET COLLEGE WAS AWARDED TO THE AMERICAN CONSTRUCTION COMPANY ON DECEMBER 30, 1960, WITH A COMPLETION DATE OF APRIL 11, 1962. LIQUIDATED DAMAGES IN THE AMOUNT OF $90 PER CALENDAR DAY WERE INCLUDED UNDER THE CONTRACT SPECIFICATIONS. THE PRESIDENT OF GALLAUDET COLLEGE URGED THE GENERAL SERVICES ADMINISTRATION TO USE EVERY FACILITY AVAILABLE TO ASSURE THAT THE KENDALL SCHOOL, TOGETHER WITH THE NECESSARY SERVICES INCLUDED UNDER PROJECT NO. 49219, BE COMPLETED AT AN EARLIER DATE IN ORDER THAT SCHOOLING FOR AN INCREASED NUMBER OF HANDICAPPED CHILDREN COULD BE PROVIDED. IN ORDER FOR THE SCHOOL BUILDINGS TO BE OPERATED THE SITE UTILITIES WORK MUST BE COMPLETED. THE RECORD INDICATES THAT THE ADDITIONAL WORK WOULD HAVE BEEN INCLUDED AS A PART OF THE PRINCIPAL CONTRACT FOR THE SCHOOL BUILDINGS, EXCEPT FOR THE FACT THAT SUFFICIENT FUNDS WERE NOT MADE AVAILABLE AT THE TIME TO THE GENERAL SERVICES ADMINISTRATOR.

THE AMERICAN CONSTRUCTION COMPANY EXPRESSED A WILLINGNESS TO COMPLETE THE SCHOOL BUILDINGS PRIOR TO APRIL 11, 1962, AS REQUIRED UNDER ITS CONTRACT. IN VIEW OF THE SERIOUSNESS OF THE SITUATION AS EXPRESSED BY THE PRESIDENT OF GALLAUDET COLLEGE AND THE NECESSITY FOR HAVING BOTH PHASES OF THE WORK CONTROLLED AND COORDINATED BY ONE CONTRACTOR IF IT WERE TO BE SPEEDED UP, IT WAS ADMINISTRATIVELY DETERMINED THAT THE WORK COVERED BY PROJECT NO. 49219 SHOULD BE INCLUDED UNDER A NEGOTIATED AMENDMENT TO CONTRACT NO. GS- R3-B-8036 WITH THE AMERICAN CONSTRUCTION COMPANY, PURSUANT TO SECTIONS 302 (C) (2) AND (10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, ON THE BASIS THAT THE EXIGENCY WOULD NOT ADMIT OF THE DELAY INCIDENT TO ADVERTISING AND THAT IT WAS IMPRACTICABLE TO SECURE COMPETITION. ACCORDINGLY, A SUPPLEMENTAL AGREEMENT WAS ENTERED INTO AS OF APRIL 10, 1961, WITH THE AMERICAN CONSTRUCTION COMPANY, WHEREBY THE CONTRACTOR AGREED TO ACCELERATE PERFORMANCE AND TO COMPLETE ALL WORK UNDER CONTRACT NO. GS-R3-B-8036 AS WELL AS ALL WORK REQUIRED BY PROJECT NO. 49219 NOT LATER THAN JANUARY 15, 1962, FOR THE ADDITIONAL SUM OF $223,750. THE CONTRACTOR ALSO AGREED TO PAY LIQUIDATED DAMAGES IN THE AMOUNT OF $150 PER CALENDAR DAY FOR FAILURE TO COMPLETE ALL OF THE WORK ON OR BEFORE THE ACCELERATED COMPLETION DATE.

IT CONSISTENTLY HAS BEEN HELD THAT WHERE A CONTRACT IS REQUIRED TO BE LET ONLY AFTER ADVERTISING, ITS SCOPE MAY NOT, SUBSEQUENT TO AWARD, BE INCREASED BY AMENDMENT EXCEPT WHERE COMPETITIVE BIDDING WOULD BE USELESS OR DISADVANTAGEOUS, AS WHERE THE ORIGINAL AND THE ADDITIONAL WORK WOULD HAVE TO BE PERFORMED BY THE SAME CONTRACTOR OR WHERE AN EXCEPTION TO THE ADVERTISING REQUIREMENTS MAY PROPERLY BE INVOKED. 30 COMP. GEN. 34; 37 ID. 528; AND 39 ID. 566. WHILE THE SITE UTILITIES HERE INVOLVED ARE CLOSELY RELATED TO THE CONSTRUCTION OF THE SCHOOL THEY NORMALLY WOULD NOT BE SUCH AN INSEPARABLE PART OF THE ORIGINAL CONTRACT AS TO MAKE IT REASONABLY IMPOSSIBLE OF PERFORMANCE BY OTHER THAN THE ORIGINAL CONTRACTOR. HOWEVER, THE PRESIDENT OF GALLAUDET COLLEGE WAS MOST INSISTENT THAT THE KENDALL SCHOOL PROJECT, WHICH OF NECESSITY INCLUDED THE SITE UTILITIES, BE COMPLETED AT THE EARLIEST POSSIBLE DATE IN ORDER TO MEET THE URGENT NEED FOR THE SCHOOL. IN THE EVENT THE SCHOOL COULD BE COMPLETED BY JANUARY 15, RATHER THAN APRIL 11, 1962, IT COULD BE UTILIZED FOR THE SECOND TERM OF THE 1961-1962 SCHOOL YEAR AND THE CONTRACTOR EXPRESSED A WILLINGNESS TO EXPEDITE THE CONSTRUCTION. IF THE CONSTRUCTION OF THE SCHOOL WAS TO BE SO STEPPED UP, IT COULD REASONABLY HAVE BEEN CONSIDERED NECESSARY TO HAVE BOTH PHASES OF THE WORK CONTROLLED AND COORDINATED BY ONE CONTRACTOR. WHILE WE CANNOT APPROVE THE NEGOTIATION AS A SOUND PRECEDENT FOR APPLICATION OF CLAUSES 2 AND 10 OF SECTION 302 (C) OF THE APPLICABLE ACT, WE ARE NOT DISPOSED TO QUESTION THE EXERCISE OF THE ADMINISTRATIVE DISCRETION IN REFUSING TO MAKE AN AWARD UNDER THE ADVERTISED INVITATION, AND IN THE PECULIAR CIRCUMSTANCES OF THIS CASE WE DO NOT FEEL THAT IT WOULD BE IN THE INTEREST OF THE GOVERNMENT TO REQUIRE CANCELLATION OF THE NEGOTIATED AMENDMENT TO THE CONSTRUCTION CONTRACT.

IT WOULD APPEAR, HOWEVER, WHERE WORK AS CLOSELY RELATED AS THAT HERE INVOLVED IS CONCERNED, THAT EVERY EFFORT SHOULD BE MADE TO OBTAIN SUFFICIENT ALLOTMENTS OF FUNDS TO PERMIT THE ADVERTISING OF ALL SUCH WORK AT ONE TIME. PERHAPS WHERE FUNDS ARE NOT IMMEDIATELY AVAILABLE BUT ARE REASONABLY EXPECTED TO BE AVAILABLE IN A SHORT TIME, AS APPARENTLY WAS THE CASE IN THIS INSTANCE, THE ADDITIONAL WORK MIGHT BE INCLUDED IN THE ORIGINAL INVITATION UNDER AN OPTION TO BE EXERCISED BY THE GOVERNMENT WITHIN A REASONABLE TIME. WE ARE SURE THAT YOU AGREE THAT IT IS A SERIOUS MATTER TO REQUEST BIDS ON A PROJECT AS LARGE AS PROJECT NO. 49219 AND THEN TO REJECT ALL BIDS OR ALLOW THEM TO EXPIRE AND IMMEDIATELY THEREAFTER LET THE WORK TO THE EXISTING CONTRACTOR. ANY SUCH ACTION SHOULD BE AVOIDED EXCEPT FOR MOST COGENT REASONS.