B-149211, JULY 27, 1962, 42 COMP. GEN. 61

B-149211, JULY 27, 1962, 42 COMP. GEN. 61

BIDS - EVALUATION - ALTERNATE BASES - FAILURE TO BID ON ALL BASES. CONTRACTS - SPECIFICATIONS - DEVIATIONS - INFORMAL V. SUBSTANTIVE - FAILURE TO BID ON ALTERNATES UNDER AN INVITATION WHICH REQUESTED BIDS ON THREE BASES, A PRIME BID AND TWO ALTERNATES, AND WHICH PROVIDED THAT BIDS WHICH DID NOT INCLUDE COMPLETED BID SCHEDULES WOULD BE CONSIDERED NONRESPONSIVE, BUT DID NOT STATE THAT FAILURE TO BID ON EACH OF THE THREE BASES WOULD RESULT IN REJECTION OF A BID, THE REJECTION OF A LOW PRIME BID SUPPORTED BY A COMPLETED BID SCHEDULE SOLELY BECAUSE THE BIDDER FAILED TO BID ON THE TWO ALTERNATES AND, THEREFORE, DID NOT EXECUTE BID SCHEDULES ON THE ALTERNATES WAS IMPROPER, AS WAS AWARD TO THE NEXT LOW BIDDER ON HIS ALTERNATE NO. BID, IN THE ABSENCE OF JUSTIFICATION FOR THE REQUIREMENT THAT A BIDDER MUST BID ON EACH OF THE OPTIONS THAT MIGHT BE EXERCISED BY THE GOVERNMENT: HOWEVER, THE WORK HAVING PROCEEDED UNDER THE CONTRACT, AND THE DIFFERENCE BETWEEN THE LOW BID AND THE CONTRACT PRICE BEING SMALL, CANCELLATION OF THE CONTRACT WOULD NOT BE JUSTIFIED. THE FAILURE OF THE LOW BIDDER ON A PRIME BID TO SUBMIT BIDS ON THE TWO ALTERNATE BASES REQUIRED BY THE INVITATION, WHICH DID NOT STATE THAT FAILURE TO SUBMIT A BID ON EACH OF THE THREE BASES INVITED WOULD RESULT IN REJECTION OF THE BID, IS NOT FATAL, AND MAY BE TREATED AS AN INFORMALITY, THE REQUEST FOR SUBMISSION OF ALTERNATE BIDS BEING SOLELY FOR THE BENEFIT OF THE GOVERNMENT; THEREFORE, WHERE A BID COVERS THE ENTIRE WORK CONTEMPLATED, FAILURE TO RESPOND TO THE REQUEST FOR ALTERNATE BIDS IS INSUFFICIENT TO REQUIRE REJECTION OF THE LOW BID, AND THE FAILURE OPERATES TO THE ADVANTAGE OF OTHER BIDDERS RATHER THAN TO THEIR DISADVANTAGE, THE BIDDER WHO DID NOT SUBMIT ALTERNATE BIDS ELIMINATING HIMSELF FROM COMPETITION WITH OTHER BIDDERS ON THE ALTERNATE WORK.

TO THE SECRETARY OF THE ARMY, JULY 27, 1962:

REFERENCE IS MADE TO LETTER OF JUNE 15, 1962, FROM THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION ON THE PROTEST BY THE SMITH-MILLER CONSTRUCTION CO., AGAINST THE AWARD OF A CONTRACT TO DOUGLAS JARDINE UNDER INVITATION FOR BIDS NO. AV-05 -010-62-21 FOR FURNISHING MATERIALS AND PERFORMING WORK FOR REHABILITATION OF RAILROAD WYE, FORT CARSON, COLORADO, IN ACCORDANCE WITH CERTAIN SPECIFICATIONS.

THE INVITATION REQUESTED BIDS--- TO BE OPENED MARCH 13, 1962--- TO BE SUBMITTED ON THREE DIFFERENT BASES. ON PAGE 1 OF STANDARD FORM 21 (BID FORM--- CONSTRUCTION CONTRACT) SPACE WAS PROVIDED FOR BIDDERS TO INSERT A PRICE OPPOSITE THE WORDS "PRIME BID" AND SPACES ALSO WERE PROVIDED FOR BIDDERS TO INSERT PRICES OPPOSITE THE WORDS "ALTERNATE NO. 1" AND "ALTERNATE NO. 2.' ATTACHED TO THIS FORM AS SHEETS 1-1, 1 2 AND 1-3 WERE UNIT PRICE SCHEDULES IN SUPPORT OF EACH OF THREE BIDS REQUESTED WHICH WERE TO BE USED IN CASE THE QUANTITIES OF MATERIALS OR WORK DIFFERED FROM THOSE ESTIMATED. FOR EXAMPLE, SHEET 1-1 COMPRISED THE FOLLOWING ITEMS AND CONTAINED THE FOLLOWING INFORMATION:

TABLE

UNIT PRICE SCHEDULE

REHABILITATION OF RAILROAD WYE

POST REQUEST NR. 37-B-62

PRIME BID ITEM ESTIMATED UNIT ESTIMATED NUMBER DESCRIPTION QUANTITIES UNIT PRICE PRICE 1 TRACK . . . . . . . . . . . . . 6200 FOOT $---- $------ -- 2 TURNOUTS . . . . . . . . . . . 3

EA $---- $------- 3 BALLAST: PREPARED CRUSHED STONE. 3800 TON $---- $--- ---- 4 TIES, NEW . . . . . . . . . . . 660 EA $---- $------- 5 TIES, REUSE . . . . . . . . . . 230 EA $---- $-------

TOTAL ITEMS, 1, 2, 3, 4, AND 5. ---- --- $---- $------

NOTE: BIDS WILL BE EVALUATED ON BASIS OF QUANTITIES AND PRICES ON THIS BID FORM. THE CONTRACT IS SUBJECT TO INCREASE OR DECREASE BY 25 PERCENT OF THE TOTAL BID PRICE, TO BE COMPUTED AT THE UNIT PRICES INCLUDED IN THE UNIT PRICE SCHEDULE.

SHEETS 1-2 AND 1-3 WERE IDENTICAL WITH SHEET 1-1 EXCEPT AS TO THE THIRD ITEM NUMBER DESIGNATED AS "BALLAST.' AS INDICATED ABOVE, ON THE FIRST SHEET NUMBER 1-1 AND COVERING THE PRIME BID THE BALLAST WAS SHOWN AS PREPARED CRUSHED STONE. ON ALTERNATE NOS. 1 AND 2, THE BALLAST TO BE USED WAS SHOWN AS PREPARED CRUSHED GRAVEL AND PIT-RUN GRAVEL, RESPECTIVELY. SECTION 1-04 OF THE TECHNICAL PROVISIONS IT WAS STATED THAT THE FIRST CHOICE FOR MATERIALS TO BE USED AS BALLAST WAS THAT SHOWN UNDER THE REQUEST FOR A "PRIME BID" OR CRUSHED STONE SIZE NO. 3. PARAGRAPHS 3 AND 4 OF STANDARD FORM 20 PROVIDED AS FOLLOWS:

3. BID SCHEDULES MUST BE COMPLETED AS TO ITEMS 1 THROUGH 5; AND ATTACHED TO THE BID TO BE GIVEN CONSIDERATION. BIDS WHICH DO NOT HAVE BID SCHEDULES COMPLETED AND ATTACHED WILL BE CONSIDERED NONRESPONSIVE AND REJECTED.

4. ALTERNATE BIDS WILL BE ACCEPTED ON ITEM 3 OF THE BID SCHEDULES ATTACHED TO THIS INVITATION FOR BIDS. TO BE GIVEN CONSIDERATION IN EVALUATING BIDS, BIDDERS ARE REQUESTED TO SUBMIT A PRIME BID AND ALTERNATE BIDS NO. 1 AND NO. 2, TOGETHER WITH THE THREE SCHEDULES.

FOUR BIDS WERE RECEIVED. THE BID OF THE SMITH-MILLER CONSTRUCTION CO. WAS THE LOWEST RECEIVED ON THE "PRIME BID" AND WAS IN THE AMOUNT OF $60,700.84. IT WAS SUPPORTED BY A UNIT PRICE SCHEDULE PROPERLY FILLED OUT. THAT COMPANY DID NOT BID ON ALTERNATE NO. 1 OR NO. 2 AND THUS DID NOT SUBMIT ANY UNIT PRICE SCHEDULES ON THESE ALTERNATES. THE OTHER THREE BIDS RECEIVED COVERED THE PRIME BID AS WELL AS ALTERNATE NOS. 1 AND 2. THE ABSTRACT OF BIDS SHOWS THE FOLLOWING AMOUNTS ID:

TABLE

ALTERNATE ALTERNATE

PRIME BID NO. 1 NO. 2 SWANSON CONSTRUCTION CO., INC.... $64,532.00$63,962.00 $63,582.00 W. H. NICHOLS CO., INC........... 74,329.60 72,353.60 75,887.60 THE SMITH-MILLER CONSTRUCTION CO.. 60,700.84 --------- --------- DOUGLAS JARDINE................... 68,482.20 62,516.20 65,480.20

ON MARCH 20, 1962, SMITH-MILLER WAS ADVISED BY THE CONTRACTING OFFICER THAT ITS BID WAS REJECTED AS NONRESPONSIVE BECAUSE OF ITS FAILURE TO BID ON ALL SCHEDULES AS REQUIRED BY THE INVITATION. SINCE THE NEXT LOWEST BID WAS THAT OF DOUGLAS JARDINE ON ALTERNATE NO. 1 IN THE AMOUNT OF $62,516.20, AWARD OF THE CONTRACT WAS MADE TO MR. JARDINE. SMITH-MILLER PROTESTED THE AWARD ON THE GROUND THAT PARAGRAPHS 3 AND 4 OF STANDARD FORM 20 DID NOT REQUIRE THE SUBMISSION OF BIDS ON THE ALTERNATES BUT ONLY REQUESTED SUCH BIDS AND THAT THE GOVERNMENT WAS PAYING MORE MONEY FOR AN INFERIOR JOB. THE WORK WAS CONSIDERED URGENT AND A NOTICE TO PROCEED WAS ISSUED TO MR. JARDINE ON APRIL 18, 1962. AS OF JUNE 4, 1962, IT WAS REPORTED BY YOUR DEPARTMENT THAT THE CONTRACTOR HAD BEGUN WORK AND HAD MATERIALS ON THE JOB VALUED AT $17,891.78 OR ABOUT 28 PERCENT OF ALL MATERIALS NEEDED TO COMPLETE THE JOB. ALSO, HE HAD COMPLETED ABOUT 6 PERCENT OF JOB CONSISTING OF ENGINEERING LAYOUT OF WORK. IN ADDITION HE HAD MOBILIZED THE REQUIREMENT EQUIPMENT AND WAS AWAITING DELIVERY OF STEEL AT THE TIME.

THE QUESTION AS TO WHETHER THE BID OF SMITH-MILLER WAS NONRESPONSIVE TO THE INVITATION MUST BE DETERMINED NOT ONLY FROM THE WORDING OF THE INVITATION BUT ALSO FROM THE SURROUNDING CIRCUMSTANCES. THE WORK TO BE ACCOMPLISHED WAS THE WORK OF REHABILITATION OF THE RAILROAD WYE. STATED ABOVE, BLANK SPACES WERE PROVIDED ON PAGE 1 OF STANDARD FORM 21 FOR BIDDERS TO QUOTE LUMP-SUM PRICES FOR "PRIME BID," "ALTERNATE NO. 1" AND "ALTERNATE NO. 2.' THE FIVE ITEMS OF WORK AND THE ESTIMATED QUANTITIES OF EACH ITEM WERE SET OUT ON SHEETS 1-1, 1-2 AND 1-3 AND THE UNIT PRICES ON THE ITEMS WERE NECESSARY IN ORDER TO ASCERTAIN WHAT MIGHT BE DUE THE CONTRACTOR IF THE ACTUAL QUANTITIES VARIED FROM THE ESTIMATED QUANTITIES. A BID UNDER ANY OF THE THREE HEADINGS COULD BE CONSIDERED AS COMPLETE IF THE SUPPORTING UNIT PRICE SCHEDULE ON EACH BASIS WAS PROPERLY FILLED OUT. THUS, THE WORDING IN PARAGRAPH 3, STANDARD FORM 20, QUOTED HEREINABOVE, MUST BE REGARDED AS ONLY REQUIRING A BIDDER WHO QUOTED A LUMP-SUM PRICE UNDER THE HEADING OF "PRIME BID," TO COMPLETE THE UNIT PRICE SCHEDULE RELATING TO THE "PRIME BID" IN ORDER TO RECEIVE CONSIDERATION. WHILE PARAGRAPH 4 OF STANDARD FORM 20 REQUESTED BIDDERS TO SUBMIT BIDS ON TWO ALTERNATE BASES, IT DID NOT STATE THAT FAILURE TO SUBMIT A BID ON EACH OF THE THREE BASES WOULD RESULT IN REJECTION OF A BID. IN FACT, IT DOES NOT APPEAR IN WHAT WAY THE GOVERNMENT WOULD BE PREJUDICED BY SUCH FAILURE OR A BIDDER WOULD SECURE AN ADVANTAGE OVER OTHER BIDDERS.

IN B-126389, FEBRUARY 3, 1956, WE HELD IN A SIMILAR CASE THAT A REQUEST IN AN INVITATION FOR THE SUBMISSION OF ALTERNATE BIDS IS FOR THE BENEFIT OF THE GOVERNMENT AND THAT WHERE A BID AS MADE COVERS THE ENTIRE WORK CONTEMPLATED UNDER ONE ALTERNATE, FAILURE TO RESPOND TO THE REQUEST FOR AN ALTERNATE BID ON ANOTHER BASIS IS NOT SUFFICIENT IN ITSELF TO REQUIRE A REJECTION OF THE BID. IT WAS CONSIDERED THAT SUCH A FAILURE CAN ONLY OPERATE TO THE ADVANTAGE OF OTHER BIDDERS RATHER THAN TO THEIR DISADVANTAGE SINCE A BIDDER NOT SUBMITTING AN ALTERNATE ELIMINATES HIMSELF FROM COMPETITION WITH OTHER BIDDERS SO FAR AS THE ALTERNATE WORK IS CONCERNED. IN 34 COMP. GEN. 633 WE HELD THAT THE INSTRUCTION TO BIDDERS THAT "ALL BIDS MUST BE FOR THE ENTIRE WORK AND MUST HAVE EACH APPLICABLE BLANK SPACE FILLED IN" WAS INTENDED SOLELY FOR THE BENEFIT OF THE GOVERNMENT AND THAT IF THE AWARD COVERED THE "ENTIRE WORK" EVEN THOUGH NO QUOTATION WAS MADE ON AN ALTERNATE ITEM, THE AWARD WOULD BE VALID. IN A SOMEWHAT SIMILAR CASE, B-147038, SEPTEMBER 7, 1961, INVOLVING AN OPTION BY THE GOVERNMENT UNDER AN ALTERNATE ITEM TO ORDER ADDITIONAL CONSTRUCTION, WE HELD THAT IT WOULD BE INCOMPATIBLE WITH GOOD BUSINESS PRACTICE TO DISREGARD AN OTHERWISE LOW BID ON A BASIC PROJECT MERELY BECAUSE THE OFFER FAILED TO QUOTE A PRICE ON AN OPTIONAL ITEM OF THE INVITATION WHICH HAD BEEN ELIMINATED FROM THE CONTEMPLATED WORK THROUGH SELECTION OF A MORE DESIRABLE TYPE OF PARTITION. ALSO, WE STATED THAT IF THE LOW BID WERE TO BE REJECTED FOR THAT REASON IT WOULD RESULT IN AWARD "TO A HIGHER BIDDER SOLELY BECAUSE HE QUOTED A PRICE ON A PHASE OF THE WORK WHICH IS NOT TO BE PERFORMED IN CONJUNCTION WITH THE PROJECT.'

IN THE INSTANT CASE THE BID OF SMITH-MILLER WAS REJECTED SOLELY BECAUSE IT FAILED TO BID ON ALTERNATE NOS. 1 AND 2 AND THE RESULT IS THAT THE GOVERNMENT WILL BE PAYING APPROXIMATELY $1,800 MORE FOR SECOND CHOICE BALLAST THAN WOULD BE PAID IF IT HAD ACCEPTED THE BID OF SMITH-MILLER WITH THE FIRST CHOICE BALLAST UNDER ITEM NO. 3.

THERE HAS NOT BEEN FURNISHED ANYTHING IN THIS CASE TO JUSTIFY THE REQUIREMENT--- IF SUCH A REQUIREMENT WAS INTENDED BY THE LANGUAGE USED -- THAT A BIDDER MUST BID ON EACH OF THE OPTIONS THAT MIGHT BE EXERCISED BY THE GOVERNMENT. HOWEVER, SINCE WORK HAS PROCEEDED UNDER THE CONTRACT AND THE DIFFERENCE BETWEEN THE LOW BID AND THE CONTRACT PRICE IS COMPARATIVELY SMALL, WE WOULD NOT BE JUSTIFIED IN DIRECTING CANCELLATION OF THE CONTRACT AWARDED TO MR. JARDINE.