B-152417, OCT. 3, 1963

B-152417, OCT. 3, 1963

TO THE SECRETARY OF THE ARMY:

BY LETTER DATED SEPTEMBER 19, 1963, THE OFFICE OF THE CHIEF OF ENGINEERS FURNISHED A REPORT CONCERNING THE PROTEST OF ACRO-V BUILDERS CORPORATION, NEW YORK, NEW YORK, AGAINST THE MAKING OF ANY AWARD OTHER THAN TO THAT CORPORATION UNDER INVITATION NO. ENG-08-123-64-1.

THE DISTRICT ENGINEER, U.S. ARMY ENGINEER DISTRICT, JACKSONVILLE, FLORIDA, BY THE REFERRED-TO INVITATION, REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS AND FOR PERFORMING THE WORK NECESSARY FOR THE COMPLETION OF THE PROJECT KNOWN AS DEFENSE AREA, PHASE II, IMPROVEMENT OF INTERIM FACILITIES, MIAMI, HOMESTEAD, AND KEY WEST, FLORIDA. THE WORK TO BE PERFORMED WAS DESCRIBED IN 11 SCHEDULES, 1 FOR EACH SITE. EACH SCHEDULE CONTAINED A BASE BID AND ADDITIVE ALTERNATES. ON PAGES BF-23 AND -24 THERE APPEARED THE FOLLOWING NOTES:

"ADDITIVE ALTERNATES

"EACH RESPECTIVE BIDDER SHALL INDICATE THE LUMP SUM PRICES FOR THE ADDITIVE ALTERNATES LISTED ABOVE TO BE ADDED TO THE TOTAL ESTIMATED AMOUNTS OF THE BASE BIDS ABOVE IN THE ORDER OF THE STATED PRIORITIES. THE CONTRACTING OFFICER'S REPRESENTATIVE RESPONSIBLE FOR OPENING OF BIDS WILL ANNOUNCE AT THE BID OPENING, AND PRIOR TO THE OPENING OF ANY BID, THE NET AMOUNT OF MONEY FOR EACH SITE THEN AVAILABLE FOR AWARD UNDER THIS INVITATION. THE BIDS WILL BE EVALUATED SEPARATELY FOR EACH SITE ON THE BASIS OF THE AGGREGATE COST OF EACH OF THE BASE SCHEDULES AND ALL OF THE ADDITIVES IN THE ORDER OF STATED PRIORITY TO BE AWARDED UNDER THE INVITATION WHICH ARE WITHIN THE ANNOUNCED AVAILABLE FUNDS FOR EACH RESPECTIVE SITE, PROVIDED, HOWEVER, THAT AFTER THE RELATIVE ORDER OF BIDDERS FOR EACH SITE HAS BEEN DETERMINED AS PROVIDED ABOVE, THE GOVERNMENT RESERVES THE RIGHT TO CHANGE THE ORDER OF STATED PRIORITY OF ADDITIVES TO BE AWARDED FOR ANY SITE IF SUCH CHANGE WILL HAVE NO EFFECT ON THE PREVIOUS DETERMINATION OF THE LOW RESPONSIBLE RESPONSIVE BIDDER FOR THAT SITE. THE GOVERNMENT FURTHER RESERVES THE RIGHT TO ADD, IF NECESSARY, TO THE ANNOUNCED AVAILABLE FUNDS FOR AWARD OF THE CONTRACT AT ANY SITE (I) TO THE EXTENT NECESSARY TO PERMIT AWARD OF THE BASE SCHEDULE TO THE LOW ACCEPTABLE BIDDER OF (II) TO AWARD ADDITIVES IN AMOUNTS WHICH IN TOTAL WILL EXCEED THE ANNOUNCED AVAILABLE FUNDS FOR CONTRACT AWARD, IF SUCH ADDITIVES WILL HAVE NO EFFECT ON THE PREVIOUS DETERMINATION OF THE LOW RESPONSIBLE RESPONSIVE BIDDER FOR THAT SITE.

"THE ORDER OF PRIORITY FOR EACH ADDITIVE ALTERNATE WILL BE THE RESPECTIVE ORDER IN WHICH THE ADDITIVE ALTERNATES ARE LISTED FOR EACH RESPECTIVE SITE.

"SPECIAL NOTES:

"1. EACH OF THE ABOVE SITES HAS A MONETARY LIMITATION WHICH HAS BEEN ESTABLISHED BY HIGHER AUTHORITY; EXCEEDING THIS LIMIT WILL NOT BE PERMITTED. IN AN EFFORT TO ASSURE RECEIVING ACCEPTABLE BIDS WITHIN THE MONETARY LIMITS FOR EACH SITE AND FOR WHICH CONTRACTS CAN BE AWARDED, SUFFICIENT ADDITIVE ALTERNATES FOR EACH SITE HAVE BEEN PROVIDED.

"2. BIDDERS MAY SUBMIT BIDS ON ANY ONE OR ANY COMBINATION OF THE VARIOUS SITES THEY CHOOSE; HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO AWARD A CONTRACT, IF AWARD IS MADE, FOR THE WORK AT EACH SITE SEPARATELY, FOR ANY COMBINATION OF SITES IN THE SAME CONTRACT, OR FOR ALL SITES IN ONE CONTRACT, WHICHEVER IS TO THE BEST INTERESTS OF THE GOVERNMENT, ON THE BASIS OF THE LOWEST ACCEPTABLE BID RECEIVED FOR EACH INDIVIDUAL SITE.

"3. BIDDERS SUBMITTING BIDS FOR THE WORK AT ALL ELEVEN SITES SHALL INSERT, IN SPACES PROVIDED BELOW, THE APPLICABLE PERCENTAGES BY WHICH EACH RESPECTIVE BID PRICE QUOTED IN THE UNIT PRICE SCHEDULES I THROUGH XI, ABOVE, MAY BE REDUCED IF A CONTRACT FOR THE WORK AS A WHOLE IS AWARDED TO ONE BIDDER: "

SPACES WERE PROVIDED WHERE THE BIDDER COULD INSERT THE PERCENTAGE OF REDUCTION FOR EACH SITE.

THE RECORD INDICATES THAT 12 BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION; THAT FOUR BIDDERS QUOTING ON ALL 11 SCHEDULES OFFERED DISCOUNTS ON EACH SITE IN THE SPACES PROVIDED ON PAGE BF-24 OF THE INVITATION AND THAT TWO OF THE BIDDERS WHO DID NOT QUOTE ON ALL 11 SCHEDULES OFFERED DISCOUNTS ON THE WORK ON WHICH BIDS WERE SUBMITTED IN THE SPACES PROVIDED ON PAGE BF-24. THE ACRO-V BUILDERS CORPORATION SUBMITTED A BID ON ALL 11 SCHEDULES AND INSERTED IN THE SPACES PROVIDED UNDER PARAGRAPH 3 OF THE "SPECIAL NOTES" A 50 PERCENT REDUCTION IN PRICE FOR EACH SCHEDULE. IF THE DISCOUNT IS APPLIED TO THE BASE BID PRICES QUOTED BY ACRO-V THE CORPORATION WILL BE THE LOWEST BIDDER ON ALL 11 SCHEDULES.

IT IS REPORTED THAT UPON OPENING OF THE BIDS IT WAS DISCOVERED THAT NO BIDDER, INCLUDING ACRO-V, AFTER APPLICATION OF THE DISCOUNT OFFERED, HAD SUBMITTED A BID ON SCHEDULE II WHICH WAS WITHIN THE AMOUNT OF AVAILABLE FUNDS ANNOUNCED PRIOR TO BID OPENING AND THAT THE METHOD OF EVALUATION PRESCRIBED IN THE PROVISION ENTITLED "ADDITIVE ALTERNATES" APPEARING ON PAGE BF-23 OF THE INVITATION PRECLUDES ANY AWARD ON SCHEDULE II.

IT IS THE POSITION OF THE CONTRACTING OFFICER THAT THE DISCOUNT PROVISION APPEARING UNDER PARAGRAPH 3 OF THE "SPECIAL NOTES" IS FOR APPLICATION ONLY IN THE EVENT THAT AWARD IS TO BE MADE TO A SINGLE BIDDER FOR ALL 11 SITES AND THAT SUCH PROVISION MUST BE DISREGARDED IN MAKING AN AWARD UNDER THIS INVITATION SINCE FEWER THAN 11 SITES ARE TO BE AWARDED.

IN A LETTER DATED SEPTEMBER 4, 1963, TO OUR OFFICE, ACRO-V STATES THAT STRICT ADHERENCE TO THE PROVISIONS OF PARAGRAPH 1 OF THE "SPECIAL NOTES" IN DETERMINING THE LOW BIDDER WOULD REQUIRE THAT SCHEDULE II BE ELIMINATED FROM CONSIDERATION SINCE NO BIDDER ON SUCH SCHEDULE WAS WITHIN THE ANNOUNCED AVAILABLE FUNDS. THE CORPORATION CONTENDS THAT ALTHOUGH ONLY 10 SCHEDULES CAN NOW BE AWARDED UNDER THIS INVITATION IT WOULD STILL BE PROPER TO APPLY THE DISCOUNT OFFERED BY THE CORPORATION UNDER PARAGRAPH 3 OF THE "SPECIAL NOTES," SINCE AN AWARD OF ALL 10 SCHEDULES TO ONE BIDDER WOULD COMPRISE A "CONTRACT FOR THE WORK AS A WHOLE" AS CONTEMPLATED BY PARAGRAPH 3 OF THE ,SPECIAL NOTES.'

WE THINK THE WORDING OF PARAGRAPH 3 IS SUSCEPTIBLE TO THE INTERPRETATION ADVANCED BY ACRO-V. IT WOULD SEEM THAT IF IT WAS, IN FACT, THE INTENTION OF THE CORPS OF ENGINEERS THAT SUCH PROVISION WOULD BE APPLICABLE ONLY IF ALL 11 SCHEDULES WERE AWARDED TO ONE BIDDER, IT WOULD HAVE BEEN A RELATIVELY SIMPLE MATTER TO HAVE STATED THE DISCOUNT PROVISION IN A MANNER SUCH AS FOLLOWS:

"PERCENTAGE OF REDUCTION BIDDER WILL ALLOW IF AWARDED SCHEDULES I THROUGH XI--- (PERCENT).'

IT IS OBVIOUS, HAVING IN MIND THAT ACCEPTABLE BIDS ON EACH SCHEDULE WERE SUBJECT TO THE CONDITION THAT THEY BE WITHIN THE ANNOUNCED AVAILABLE FUNDS FOR EACH SCHEDULE AND THE MANNER IN WHICH THE DISCOUNT PROVISION WAS DRAWN, THAT BIDDERS WERE AWARE OF THE POSSIBILITY THAT LESS THAN 11 SCHEDULES WOULD BE AWARDED UNDER THIS INVITATION. HENCE, IT WOULD SEEM THAT A BIDDER OFFERING A DISCOUNT UNDER PARAGRAPH 3 OF THE "SPECIAL NOTES" COULD NOT OBJECT IF LESS THAN 11 SCHEDULES WERE AVAILABLE FOR AWARD UNDER THIS INVITATION. WHILE A BIDDER IN SUBSTANTIALLY DIFFERENT CIRCUMSTANCES- -- FOR EXAMPLE WHERE ONLY ONE OR TWO SCHEDULES BECAME AVAILABLE FOR AWARD TO IT--- COULD CONTEND WITH SOME MERIT THAT THE DISCOUNT PROVISION SHOULD NOT BE APPLIED WE BELIEVE THAT UNDER THE CIRCUMSTANCES IN THIS CASE INVOLVING THE AWARD OF AS MANY AS 10 SCHEDULES--- SCHEDULES I AND III TO XI--- SUCH AN AWARD REASONABLY MAY BE CONSTRUED AS "A CONTRACT FOR THE WORK AS A OLE.' SINCE ACRO-V'S NET BID PRICES FOR EACH SCHEDULE ARE BELOW THE ANNOUNCED AVAILABLE FUNDS FOR THOSE SCHEDULES AND ARE LOWER THAN THOSE SUBMITTED BY ANY OTHER BIDDER, AN AWARD TO IT WOULD NOT APPEAR TO BE UNFAIR OR PREJUDICIAL TO OTHER BIDDERS.

ACCORDINGLY, WE THINK THE DISCOUNT PROVISION MAY BE APPLIED IN EVALUATING THE BIDS SUBMITTED ON SCHEDULES I AND III TO XI BY ACRO-V AND THAT AN AWARD OF A CONTRACT TO IT COVERING THOSE SCHEDULES WOULD BE PROPER.

IT IS SUGGESTED THAT IF A DISCOUNT PROVISION SIMILAR TO ONE UNDER CONSIDERATION HERE IS USED IN FUTURE INVITATIONS THE WORDING SHOULD BE REVISED TO CLEARLY STATE THE SCOPE OF ITS APPLICATION.