B-146295, AUGUST 28, 1961, 41 COMP. GEN. 165

B-146295, AUGUST 28, 1961, 41 COMP. GEN. 165

BIDS - MISTAKES - CORRECTION - LOW BID DISPLACEMENT--- BIDS - LATE - TELEGRAPHIC MODIFICATIONS AN ERROR MADE BY A TELEGRAPH COMPANY IN FAILING TO TRANSMIT TO A CONTRACTING AGENCY THE CORRECT AMOUNT OF A BID REDUCTION OFFER WHICH WOULD HAVE MADE THE OFFEROR THE LOW BIDDER IS AN ERROR MADE BY AN INDEPENDENT AGENT OVER WHICH THE BIDDER DOES NOT HAVE ANY SUPERVISORY CONTROL SO THAT IN SUCH CASES WHERE THE EVIDENCE CONCLUSIVELY ESTABLISHES THE CORRECT MODIFICATION AND THAT THE MESSAGE WAS TIMELY MADE, THE RULE AGAINST CORRECTION OF ERRORS WHEN THE RESULT IS THE DISPLACEMENT OF ANOTHER BIDDER IS NOT FOR APPLICATION AND, THEREFORE, CORRECTION OF THE BID IS PERMITTED. EVIDENCE WHICH INDICATES THAT A LATE TELEGRAM INCREASING A BID PRICE DUE TO AN ERROR IN A BID ESTIMATE WAS DELAYED BY THE TELEGRAPH COMPANY DUE TO ABNORMAL HANDLING AT THE PLACE WHERE THE MESSAGE WAS FILED AND AT A TRANSMISSION POINT SUBSTANTIATES AN ADMINISTRATIVE DETERMINATION THAT THE TELEGRAM WAS TIMELY FILED MADE PURSUANT TO A PROVISION IN THE INVITATION PERMITTING CONSIDERATION OF LATE TELEGRAPHIC MODIFICATIONS WHERE THE LATE RECEIPT IS DUE SOLELY TO THE DELAY BY THE TELEGRAPH COMPANY.

TO THE ADMINISTRATOR, FEDERAL AVIATION AGENCY, AUGUST 28, 1961:

THIS HAS REFERENCE TO A LETTER DATED JULY 12, 1961, WITH ENCLOSURES, FROM YOUR CHIEF, MATERIEL PROGRAM DIVISION, AVIATION FACILITIES SERVICE, RELATING TO THE PROTESTS TO AN AWARD TO ANY OTHER BIDDER MADE BY MISSILE SITES, INC., AND INTERNATIONAL BUILDERS OF FLORIDA, INC., RESPECTIVELY, UNDER INVITATION NO. 2-61-156, ISSUED BY THE FEDERAL AVIATION AGENCY.

THE INVITATION CALLED FOR BIDS ON A JOB BASIS FOR THE CONSTRUCTION OF AN AIR ROUTE TRAFFIC CONTROL CENTER BUILDING AT MIAMI, FLORIDA. IT WAS ISSUED BY THE FEDERAL AVIATION AGENCY SOUTHWEST REGIONAL OFFICE, FORT WORTH, TEXAS, ON MAY 10, 1961.

AT THE BID OPENING 2:00 P.M., CENTRAL STANDARD TIME ( CST), JUNE 23, 1961, THE LOW BID RECEIVED WAS FROM MISSILE SITES, INC., AT $1,700,000. INTERNATIONAL BUILDERS OF FLORIDA, INC., SUBMITTED AN ORIGINAL BID OF $2,000,000 AND 7 OTHER BIDS RECEIVED RANGED FROM $1,949,000 (SUBMITTED BY ARTHUR VENNERI COMPANY) TO $3,000,000. AT 12:54 P.M., CST, JUNE 23, 1961, PRIOR TO BID OPENING, A TELEGRAM HAD BEEN RECEIVED FROM INTERNATIONAL BUILDERS. AT THE BID OPENING THE CONTRACTING OFFICER WHILE ATTEMPTING TO READ THE TELEGRAPHIC AMENDMENT STATED THAT HE COULD NOT SAY WHAT EFFECT THE AMENDMENT WOULD HAVE ON THE ORIGINAL BID AS THE MESSAGE WAS GARBLED IN TRANSMISSION. THE TELEGRAM WAS FILED AT MIAMI, FLORIDA, AT 1:15 P.M., EST (12:15 P.M. CST), AND IT READ AS FOLLOWS:

REFERENCE IS MADE TO OUR BID FOR CONSTRUCTION OF AN AIR ROUTE TRAFFIC CONTROL CENTER BUILDING DADE COUNTY MIAMI FLORIDA PROPOSAL 2 61-156 TO BE OPENED AT 2PM CST JUNE 23, 1961 LYHHLEZRDEM TOTAL BID $47,000

A REQUEST FOR CLARIFICATION WAS MADE OF WESTERN UNION IMMEDIATELY AFTER BID OPENING AND AT 2:29 P.M., CST, A CONFIRMING MESSAGE WAS RECEIVED ON THE FAA PRINTER, IN PERTINENT PART AS FOLLOWS:

* * * DEDUCT FROM TOTAL BID $47,000 BASED ON THE FOREGOING CLARIFICATION, INTERNATIONAL BUILDERS' BID WAS SHOWN AS $1,953,000 ON THE ORIGINAL ABSTRACT OF BIDS.

THIRTY-SEVEN MINUTES AFTER THE 2:00 P.M. BID OPENING TIME, A TELEGRAM WAS RECEIVED AT THE FAA MESSAGE CENTER FROM MISSILE SITES, INC., WHO HAD SUBMITTED THE ORIGINAL LOW BID OF $1,700,000. THIS MESSAGE WAS FILED AT MIAMI, FLORIDA, AT 2:20 P.M., EST (FORTY MINUTES BEFORE THE 2:00 P.M. CST BID OPENING AT FORT WORTH) AND IT READ AS FOLLOWS:

REFERENCE OUR BID ARTC BUILDING MIAMI FLORIDA PROPOSAL 2-61-156ADD 160,000 TO BASE BID ACKNOWLEDGE ADDENDA 1 2 3 AND 4 RIDERS 1 2 AND 3

IT IS REPORTED THAT VERY SHORTLY AFTER RECEIPT OF THIS MESSAGE, MR. ZARPAS OF MISSILE SITES, C., TELEPHONED FROM MIAMI, FLORIDA, TO INQUIRE AS TO THE BID RESULTS. HE WAS INFORMED THAT HE WAS THE APPARENT LOW BIDDER, BUT AT THE TIME IT COULD NOT BE STATED WHAT ITS BID WAS SINCE THE TELEGRAM INCREASING THE MISSILE BID BY $160,000 ARRIVED LATE.

THE INVITATION PROVIDED THAT MODIFICATION BY TELEGRAPH OF BIDS ALREADY SUBMITTED WOULD BE CONSIDERED AND, WITH RESPECT TO LATE BIDS, THAT:

BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF BIDS WILL NOT BE CONSIDERED, UNLESS THEY ARE RECEIVED BEFORE AWARD AND (A) SUBMITTED BY MAIL (OR BY TELEGRAM, IF AUTHORIZED) AND (B) IT IS DETERMINED BY THE GOVERNMENT THAT LATE RECEIPT WAS DUE SOLELY TO EITHER (I) DELAY IN THE MAILS (OR BY THE TELEGRAPH COMPANY, IF TELEGRAPHIC BIDS ARE AUTHORIZED) FOR WHICH THE BIDDER WAS NOT RESPONSIBLE OR (II) MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION. HOWEVER, A MODIFICATION WHICH IS RECEIVED FROM AN OTHERWISE SUCCESSFUL BIDDER AND WHICH MAKES THE TERMS OF THE BID MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME IT IS RECEIVED AND MAY THEREAFTER BE ACCEPTED.

MR. ZARPAS SAID THAT THE FORT WORTH WESTERN UNION OFFICE HAD NOTIFIED HIM OVER THE TELEPHONE THAT THE MISSILE TELEGRAM HAD ALREADY BEEN PLACED ON THE FAA PRINTER SO THAT HE HAD NOT CONSIDERED IT NECESSARY TO SEND ANOTHER MESSAGE OVER THE TELEPHONE FOR TRANSMITTAL TO FAA.

SOON AFTER THE FOREGOING TELEPHONE CONVERSATION WITH MR. ZARPAS OF MISSILE, MR. DUMONT OF INTERNATIONAL BUILDERS TELEPHONED TO INQUIRE AS TO THE BID RESULTS. HE WAS TOLD THAT SINCE HIS FIRM HAD SUBMITTED AN ORIGINAL BID OF $2,000,000, AND THEN ONLY A $47,000 DEDUCTION BY TELEGRAPHIC MODIFICATION, ITS BID OF $1,953,000 WAS NOT LOW. MR. DUMONT STATED THAT INTERNATIONAL BUILDERS HAD REDUCED ITS BID IN THE TELEGRAM BY $147,000, NOT $47,000, AND THAT THIS COULD BE CONFIRMED BY WESTERN UNION.

THE WESTERN UNION OFFICE IN FORT WORTH, TEXAS, WAS IMMEDIATELY CONTACTED BY TELEPHONE AND REQUESTED TO FURNISH INFORMATION AS TO (1) THE TIMELINESS OF THE MESSAGE FILED BY MISSILE SITES, INC., AND (2) THE CORRECTNESS OF THE FIGURE CONTAINED IN THE MESSAGE FROM INTERNATIONAL BUILDERS OF FLORIDA, INC. IN RESPONSE, THE DISTRICT MANAGER OF WESTERN UNION AT FORT WORTH HAD THE FOLLOWING TWO MESSAGES TRANSMITTED VIA THE FAA TELETYPE:

1. MIAMI HAS NOW CORRECTED THE AMOUNT IN MESSAGE FILED 115P EST FROM INITIAL BUILDERS OF FLA TO READ $147,000 INSTEAD OF $47,000. THE ORIGINAL MESSAGE FILED AT 115P EST AT MIAMI READS $147,000 AND THE ERROR WAS MADE IN TRANSMISSION. WE REGRET THIS ERROR, AS THE SENDER HAD THE CORRECT AMOUNT WRITTEN AT $147,000.

2. WITH REFERENCE TO THE TELEGRAM WUE117 FROM FRED KAPLAN MISSILE SITES INC FILED AT MIAMI FLORIDA EST, IT HAS BEEN DEVELOPED THAT THE MESSAGE WAS DELAYED IN MIAMI OFFICE UNTIL 242 EST BEFORE BEING TRANSMITTED. IT WAS RECEIVED FORT WORTH 212P CST AND SENT YOU AT 237P CST. THIS IS ABNORMAL HANDLING BOTH AT MIAMI AND FORT WORTH AND UNDER NORMAL CIRCUMSTANCES SHOULD HAVE BEEN SENT YOU BY 200P CST. MR. KAPLAN CALLED US LONG DISTANCE APPROXIMATELY 145P TO SEE IF THE MESSAGE HAD BEEN TRANSMITTED TO F.A.A. AND THE GIRL HANDLING THE MATTER TOLD HIM IT HAD ALREADY BEEN SENT TO THE F.A.A. HOWEVER, SHE HAD THE WRONG MESSAGE WHEN THIS INFORMATION WAS GIVEN TO MR. KAPLAN.

WE ARE THUS PRESENTED WITH TWO QUESTIONS:FIRST, WHETHER INTERNATIONAL BUILDERS' BID MAY BE CONSIDERED AS $1,853,000, AND SECOND, WHETHER MISSILE SITES' BID SHOULD BE CONSIDERED AS $1,700,000 OR AS $1,860,000.

WE WILL CONSIDER FIRST THE BID OF INTERNATIONAL BUILDERS. THE TELEGRAM REDUCING ITS BID WAS FILED WITH WESTERN UNION IN MIAMI 1 HOUR AND 45 MINUTES BEFORE BID OPENING. WESTERN UNION PURPORTEDLY DELIVERED THIS TELEGRAM TO FAA 39 MINUTES LATER, WHICH WAS 66 MINUTES BEFORE BID OPENING, BUT THE MESSAGE DELIVERED WAS GARBLED AND WAS NOT THAT GIVEN TO IT IN MIAMI. IMMEDIATELY AFTER BID OPENING THE CONTRACTING OFFICER ASKED WESTERN UNION TO VERIFY THE GARBLED MESSAGE AND IT WAS CLARIFIED BY WESTERN UNION TO STATE A DEDUCTION OF $47,000 FROM INTERNATIONAL BUILDERS' BID. SUBSEQUENTLY, UPON FURTHER INQUIRY BY FAA, WESTERN UNION NOTIFIED THE CONTRACTING OFFICE THAT THE ORIGINAL MESSAGE FILED FOR TRANSMISSION BY INTERNATIONAL BUILDERS AT MIAMI STATED A DEDUCTION OF $147,000 AND THAT AN ERROR IN TRANSMISSION HAD OCCURRED.

THE BASIC QUESTION, IT SEEMS TO US, IS WHETHER OR NOT CORRECTION OF THE TELEGRAPHIC MODIFICATION RECEIVED PRIOR TO BID OPENING FROM INTERNATIONAL BUILDERS SHOULD BE PERMITTED. THE GENERAL RULE, AS STATED AT 37 COMP. GEN. 210, 212, IS THAT CORRECTION OF A BID SHOULD NOT BE PERMITTED IF THE RESULT IS DISPLACEMENT OF ANOTHER BID, UNLESS THE CORRECT BID IS SUBSTANTIALLY ASCERTAINABLE FROM THE BID AS MADE. HOWEVER, IN THAT AND SIMILAR CASES THE ERROR INVOLVED WAS ONE WHICH WAS MADE BY THE BIDDER HIMSELF. HERE THE ERROR WAS MADE BY THE TELEGRAPH COMPANY. THE WEIGHT OF AUTHORITY SEEMS TO SUPPORT THE VIEW THAT WESTERN UNION IS AN INDEPENDENT CONTRACTOR, OR AT MOST AN AGENT WHOSE AUTHORITY TO BIND THE VENDOR IS LIMITED TO TRANSMISSION OF THE MESSAGE ACTUALLY GIVEN IT. WESTERN UNION TELEGRAPH CO. V. COWIN AND CO., 20 F.2D 103; SEE ALSO ANNOTATION AT 42 A.L.R. 293.

THIS BEING SO, SHOULD THE GENERAL RULE AGAINST CORRECTION OF ERROR WHICH WOULD RESULT IN DISPLACEMENT OF ANOTHER BIDDER APPLY IN A SITUATION WHERE THE ERROR HAS BEEN MADE, NOT BY THE BIDDER HIMSELF, BUT BY A LIMITED AGENT WHOSE ERRORS ARE NOT BINDING ON THE BIDDER. THERE IS, PERHAPS, AN INTRINSIC UNDESIRABILITY IN THE USE OF SUCH A LIMITED AGENT FOR THE PURPOSE OF SUBMITTING EITHER BIDS OR MODIFICATIONS THEREOF ON FORMALLY ADVERTISED PROCUREMENTS, SINCE NEITHER THE GOVERNMENT NOR OTHER BIDDERS CAN BE SURE AFTER BIDS ARE OPENED THAT A BID SUBMITTED BY A LIMITED AGENT IS IN FACT AN OFFER WHICH WILL BE BINDING IF ACCEPTED. HOWEVER, THE SUBMISSION OF OFFERS BY TELEGRAM IS GENERALLY ACCEPTED IN THE BUSINESS WORLD TODAY, AND THE INVITATION IN THIS CASE SPECIFICALLY AUTHORIZED TELEGRAPHIC MODIFICATION OF BIDS.

IT HAS BEEN SUGGESTED THAT THE INTERNATIONAL BUILDERS TELEGRAM SHOULD BE CONSIDERED AS A LATE TELEGRAPHIC BID MODIFICATION, IN WHICH CASE THE RULE AGAINST DISPLACEMENT CORRECTIONS WOULD NOT APPLY. WE DO NOT BELIEVE THE INVITATION PROVISION PERMITTING CONSIDERATION OF LATE TELEGRAPHIC MODIFICATIONS WHERE LATE RECEIPT IS "DUE SOLELY TO * * * DELAY * * * BY THE TELEGRAPH COMPANY * * * FOR WHICH THE BIDDER WAS NOT RESPONSIBLE" WAS INTENDED TO APPLY TO A SITUATION SUCH AS THAT IN THE PRESENT CASE. IN THE USUAL CASE OF A "LATE" MODIFICATION, THE ACTUAL CORRECT MODIFICATION IS EN ROUTE TO THE CONTRACTING OFFICE AT THE TIME OF BID OPENING, AND IT WILL EVENTUALLY ARRIVE. IN THE CASE OF ERROR IN A TELEGRAM, DELIVERY OF THE SUPPOSED MESSAGE HAS BEEN MADE AND UNLESS INQUIRY IS MADE BY SOMEONE NO FURTHER COMMUNICATION WILL BE DELIVERED. FOR EXAMPLE, IN THE INSTANT CASE, ASSUMING THE INTERNATIONAL BUILDERS TELEGRAM FIRST DELIVERED HAD CLEARLY STATED A DEDUCTION OF $47,000, AND ASSUMING FURTHER THAT THE INTERNATIONAL BID WAS LOW BY REASON OF THAT DEDUCTION, THE CONTRACTING OFFICE NEVER WOULD HAVE RECEIVED THE "LATE" CORRECT MODIFICATION UNLESS INTERNATIONAL HAD REQUESTED IT FROM WESTERN UNION. IN THE PRESENT CASE WESTERN UNION DID NOT "DELAY" IN DELIVERING THE MESSAGE BUT IT FAILED TO DELIVER THE CORRECT MESSAGE. IN OUR OPINION, THE INVITATION PROVISION IS INTENDED TO APPLY ONLY WHERE THERE IS "DELAY" IN DELIVERY OF ANY MESSAGE AT ALL BY WESTERN UNION, AND NOT TO A SITUATION WHERE BOTH A TIMELY MESSAGE AND A LATE MESSAGE ARE RECEIVED, THE LATTER ONLY BECAUSE OF AN ERROR IN THE MESSAGE FIRST DELIVERED. WE BELIEVE WE MUST, THEREFORE, DECIDE WHETHER OR NOT THE GENERAL RULE AGAINST DISPLACEMENT CORRECTION APPLIES TO THE PRESENT SITUATION.

WHILE NOT SPECIFICALLY STATED IN 37 COMP. GEN. 210, ONE OF THE UNDERLYING REASONS FOR THE RULE AGAINST DISPLACEMENT CORRECTIONS IS THE NECESSITY FOR RESORT TO EXTRANEOUS EVIDENCE WHICH HAS BEEN PREPARED BY THE BIDDER OR HIS ESTIMATORS AND WHICH WAS SUBJECT TO THE BIDDER'S SUPERVISION. CORRECTION IN SUCH CASES RESULTS IN OVERLOOKING OR FORGIVING THE BIDDER'S OWN CARELESSNESS TO THE DISADVANTAGE OF OTHER MORE CAREFUL BIDDERS. IN THE PRESENT CASE THIS IS NOT THE SITUATION. THE ERROR WAS MADE BY AN INDEPENDENT AGENCY OVER WHICH THE BIDDER EXERCISED NO SUPERVISORY CONTROL. THE EVIDENCE AS TO THE CORRECT MODIFICATION DEMONSTRATES CONCLUSIVELY THAT IT WAS MADE TIMELY AND THAT IT WAS A DEDUCTION OF $147,000. WE BELIEVE IN SUCH CIRCUMSTANCES THE RULE AGAINST DISPLACEMENT CORRECTIONS SHOULD NOT APPLY, AND THAT CORRECTION OF INTERNATIONAL BUILDERS' BID TO $1,853,000 SHOULD BE PERMITTED.

THIS LEAVES THE QUESTION WHETHER MISSILE SITES WOULD BE OBLIGATED TO PERFORM UPON ACCEPTANCE OF ITS BID OF $1,700,000 IF ITS TELEGRAPHIC MODIFICATION BE CONSIDERED INEXCUSABLY LATE. WHILE THERE IS SOME DOUBT AS TO THE TIMELINESS OF FILING OF THE MODIFICATION, THE EVIDENCE SUBMITTED IS SUCH THAT WE ARE NOT DISPOSED IN THIS INSTANCE TO QUESTION THE PROPRIETY OF THE ADMINISTRATIVE DETERMINATION THAT IT WAS TIMELY FILED. THIS CONCLUSION IS FURTHER SUPPORTED BY INFORMAL ADVICE FROM COUNSEL FOR MISSILE SITES THAT THE PRICE INCREASE STATED BY THE MODIFICATION WAS NECESSITATED BY AN ERROR IN ITS BID ESTIMATE.

ACCORDINGLY, IT IS OUR OPINION THAT THE BID OF MISSILE SITES SHOULD BE EVALUATED AT $1,860,000 AND THAT OF INTERNATIONAL BUILDERS AT $1,853,000.