B-153636, MAR. 17, 1964

B-153636, MAR. 17, 1964

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 28, 1964, FROM THE DEPUTY ASSISTANT POSTMASTER GENERAL, REQUESTING OUR VIEWS AS TO THE PROPRIETY OF AWARDING A CONTRACT FOR A PROPOSED POSTAL FACILITY AT LAWRENCE, MASSACHUSETTS.

THE RECORD DISCLOSES THAT ON NOVEMBER 25, 1963, THE BUREAU OF FACILITIES, WASHINGTON, D.C., ISSUED AN ADVERTISEMENT SOLICITING BIDS FOR THE LEASING AND CONSTRUCTION OF A NEW POSTAL FACILITY IN THE AREA OF LAWRENCE, MASSACHUSETTS, AT AN ANNUAL RENTAL FOR A BASE TERM OF 30 YEARS, TOGETHER WITH EIGHT FIVE-YEAR RENEWAL TERM OPTIONS. IN ADDITION, EACH BIDDER WAS REQUIRED TO GRANT THE GOVERNMENT AN OPTION TO PURCHASE THE FEE SIMPLE TITLE TO THE PREMISES, INCLUDING THE UNDERLYING LAND, AT THE END OF THE BASIC 30-YEAR TERM AS WELL AS AT THE END OF EACH RENEWAL TERM THEREAFTER. PARAGRAPH 2 OF THE PROPOSED LEASE AGREEMENT FURTHER PROVIDES AS FOLLOWS:

"A RECORD OF THE DOLLAR AMOUNT OF THE INCREASED AND DECREASED PERFORMANCE COSTS RESULTING FROM CHANGE ORDERS ISSUED BY THE GOVERNMENT, AS SET OUT IN ARTICLE 8 OF THE POST OFFICE DEPARTMENT GENERAL CONDITIONS, DATED MARCH 15, 1962, WILL BE KEPT BY THE GOVERNMENT DURING THE COURSE OF CONSTRUCTION. IF, UPON SATISFACTORY COMPLETION OF CONSTRUCTION, THE TOTAL DOLLAR AMOUNT OF ALL INCREASED COSTS IS GREATER THAN THE TOTAL DOLLAR AMOUNT OF ALL DECREASED COSTS, THEN THE AMOUNT OF SUCH DIFFERENCE WILL BE PAID TO THE UNDERSIGNED IN A LUMP SUM AS ADDITIONAL RENTAL AT THE TIME THE FIRST MONTH'S RENTAL IS PAYABLE OR, AT THE SOLE ELECTION OF THE GOVERNMENT, THE ANNUAL RENTAL STIPULATED HEREIN DURING THE BASIC LEASE TERM WILL BE INCREASED BY----------) ( PERCENT OF SUCH DIFFERENCE. IF THE TOTAL DOLLAR AMOUNT OF ALL DECREASED COSTS IS GREATER THAN THE TOTAL DOLLAR AMOUNT OF ALL INCREASED COSTS, THEN THE ANNUAL RENTAL STIPULATED HEREIN DURING THE BASIC LEASE TERM WILL BE REDUCED BY----------) ( PERCENT OF SUCH DIFFERENCE. ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, THE GOVERNMENT SHALL IN NO EVENT REQUIRE THE UNDERSIGNED TO ACCEPT A NET DOLLAR AMOUNT OF INCREASE OR DECREASE IN COMPLETION COSTS AS TO A RESULT OF CHANGES GREATER THAN $80,000.00, WITHOUT WRITTEN AGREEMENT THERETO.'

WITH REGARD TO AWARD, PARAGRAPH 4 OF THE ADVERTISEMENT FOR BIDS STATES:

"4. AWARD WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THIS ADVERTISEMENT FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IN DETERMINING PRICE, THE DEPARTMENT WILL ALLOW THE GREATER WEIGHT TO THE RENTAL SPECIFIED DURING THE BASIC 30- YEAR LEASE TERM.'

IN ACCORDANCE WITH THE PROVISIONS OF THE ADVERTISEMENT, BIDS WERE OPENED ON JANUARY 29, 1964, AT THE DEPARTMENT'S BOSTON REGIONAL OFFICE. THE ABSTRACT OF BIDS FURNISHED THIS OFFICE SHOWS THAT SEVENTEEN BIDS WERE RECEIVED. THOUGH NATIONAL CONSTRUCTION COMPANY CLEARLY SUBMITTED THE LOWEST BID FOR THE BASIC 30-YEAR TERM, AWARD HAS NOT BEEN MADE TO THAT FIRM BECAUSE IT FAILED TO INCLUDE THE PERCENTAGE AMOUNTS REQUIRED BY PARAGRAPH 2 OF THE AGREEMENT TO LEASE. IT HAS BEEN CONTENDED THAT THIS OMISSION MAY RENDER NATIONAL'S BID NONRESPONSIVE IN VIEW OF PARAGRAPH 3 OF THE ADVERTISEMENT FOR BIDS WHICH STATES:

"3.DEVIATIONS IN THE BID FROM THE REQUIREMENTS SET OUT IN THIS ADVERTISEMENT, INCLUDING FAILURE OF A BIDDER TO BID RENT FOR THE BASIC 30- YEAR LEASE TERM AND FOR EACH RENEWAL TERM, FAILURE TO GRANT ALL THE OPTIONS TO PURCHASE THE FEE SIMPLE TITLE TO THE PREMISES AT STATED PRICES OR FAILURE TO SPECIFY ANY OF THE OTHER SUMS OR AMOUNTS CALLED FOR BY THE AGREEMENT TO LEASE, MAY BE CAUSE FOR REJECTION OF THE BID.'

WHILE THIS OFFICE HAS CONSISTENTLY HELD THAT A BID MUST BE RESPONSIVE TO AN INVITATION, WE HAVE GENERALLY TAKEN THE VIEW THAT IF THE DEFICIENCIES IN A LOW BID NEITHER GO THE SUBSTANCE OF THE BID, NOR WORK ANY INJUSTICE TO OTHER BIDDERS, THERE IS NO REASON WHY AWARD MAY NOT BE MADE TO SUCH LOW BIDDER. B-129208, SEPTEMBER 24, 1956, AND 35 COMP. GEN. 98, 99. UNDER ADVERTISED BIDDING, ALL QUALIFIED BIDDERS MUST BE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT BIDS WHICH ARE BASED UPON THE SAME SPECIFICATIONS, AND TO HAVE SUCH BIDS EVALUATED ON THE SAME BASIS. TO THE EXTENT THAT WAIVER OF THE PROVISIONS OF AN INVITATION FOR BIDS MIGHT RESULT IN FAILURE OF ONE OR MORE BIDDERS TO ATTAIN THE EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS WITH OTHER BIDDERS, SUCH PROVISION MUST BE CONSIDERED MANDATORY. HOWEVER, THE CONCEPT OF FORMALLY ADVERTISED PROCUREMENT, INSOFAR AS IT RELATES TO THE SUBMISSION AND EVALUATION OF BIDS, GOES NO FURTHER THAN TO GUARANTEE EQUAL OPPORTUNITY TO COMPETE AND EQUAL TREATMENT IN THE EVALUATION OF BIDS. IT DOES NOT CONFER UPON BIDDERS ANY RIGHT TO INSIST UPON ENFORCEMENT OF PROVISIONS IN AN INVITATION THE WAIVER OF WHICH WOULD NOT RESULT IN AN UNFAIR COMPETITIVE ADVANTAGE TO OTHER BIDDERS BY PERMITTING A METHOD OF CONTRACT PERFORMANCE DIFFERENT FROM THAT CONTEMPLATED BY THE INVITATION OR BY PERMITTING THE BID PRICE TO BE EVALUATED UPON A BASIS NOT COMMON TO ALL BIDS. SUCH PROVISIONS MUST THEREFORE BE CONSTRUED TO BE SOLELY FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT AND THEIR ENFORCEMENT OR WAIVER CAN HAVE NO EFFECT UPON THE RIGHTS OF BIDDERS TO WHICH THE RULES AND PRINCIPLES APPLICABLE TO FORMAL ADVERTISING ARE DIRECTED. TO THIS END, THE DECISIONS OF OUR OFFICE HAVE CONSISTENTLY HELD THAT WHERE DEVIATIONS FROM, OR FAILURES TO COMPLY WITH, THE PROVISIONS OF AN INVITATION DO NOT AFFECT THE BID PRICE UPON WHICH A CONTRACT WOULD BE BASED OR THE QUANTITY OR QUALITY OF THE WORK REQUIRED OF THE BIDDER IN THE EVENT HE IS AWARDED A CONTRACT, A FAILURE TO ENFORCE SUCH PROVISION WILL NOT INFRINGE UPON THE RIGHTS OF OTHER BIDDERS AND THE FAILURE OF A BIDDER TO COMPLY WITH THE PROVISION MAY BE CONSIDERED AS A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE.

IN THE INSTANT CASE, THE PERCENTAGES REFERRED TO WOULD HAVE EFFECT ONLY IN THE EVENT A CHANGE IN BUILDING REQUIREMENTS CAUSED A DOWNWARD CHANGE IN THE COST OF THE BUILDING AS ORIGINALLY PLANNED OR UPON AN UPWARD CHANGE IF THE GOVERNMENT ELECTED NOT TO PAY THE INCREASE IN A LUMP SUM. IN ANY EVENT, THE GOVERNMENT REMAINS CLEARLY OBLIGATED FOR THE TOTAL COST OF ANY CHANGES ORDERED WITH OR WITHOUT THE PERCENTAGE FIGURE. FIGURE. IF WE MUST ASSUME THAT THERE WILL IN FACT BE CHANGES, IT WOULD NECESSARILY CONSTITUTE A CHANGE WHICH UNDER THE "CHANGES" ARTICLE OF THE CONTRACT, WOULD REQUIRE AN EQUITABLE ADJUSTMENT. SEE 37 COMP. GEN. 529. THEREFORE, IN REALITY, THE PRACTICAL EFFECT FOR REQUIRING THE INSERTION OF A PERCENTAGE FIGURE WOULD ONLY BE TO FIX BEFOREHAND--- SUBJECT TO SUBSEQUENT REVISION--- THE RATE OF INTEREST INCLUDED IN THE REPAYMENT OF SUCH EQUITABLE ADJUSTMENT AND IN NO WAY WOULD APPEAR TO AFFECT THE BASIS FOR EVALUATION.

IN B-149421, DATED SEPTEMBER 21, 1962, 42 COMP. GEN. - , WE HAD OCCASION TO EXPRESS OUR OPINION AS TO THE USE OF A PHRASE GENERALLY EMPLOYED BY THE POST OFFICE DEPARTMENT INDICATING THAT IN EVALUATING BIDS "GREATER WEIGHT" WILL BE PLACED UPON THE AMOUNT BID FOR A SPECIFIED TERM. IN CRITICIZING THE USE OF SUCH LANGUAGE, WE STATED:

"IN VIEW OF THE VAGUENESS OF SUCH LANGUAGE WE ARE ADVISING THE DEPARTMENT TO TAKE STEPS IN FUTURE CASES TO SET OUT, IF POSSIBLE, THE EXACT BASIS ON WHICH BIDS WILL BE EVALUATED SO THAT EACH BIDDER MAY ESTIMATE WITHIN REASONABLE LIMITS THE EFFECT OF THE APPLICATION OF SUCH EVALUATION FACTOR ON HIS BID IN RELATION TO OTHER BIDS.'

WE BELIEVE THE SAME COMMENT IS ALSO APPLICABLE HERE. MOREOVER, WE DO NOT BELIEVE THAT THE REQUIRED PERCENTAGE FIGURES ARE CAPABLE OF BEING USED IN BID EVALUATION ON ANY REALISTIC BASIS SINCE AT THE PRESENT TIME, THE EXTENT OF ANY CHANGES ARE PURELY CONJECTURAL. IN B 143271, OCTOBER 7, 1960, THERE WAS CONSIDERED A CASE IN WHICH THE INSTRUCTIONS TO BIDDERS STATED THAT THE BIDS ,MUST BE SUBMITTED ON ALL ITEMS" AND "BIDS NOT SO SUBMITTED WILL BE CONSIDERED NON-RESPONSIVE AND WILL BE REJECTED.' NEVERTHELESS, IT WAS CONCLUDED THAT IT WAS IMPROPER TO REJECT THE BID SUBMITTED BY THE LOW BIDDER FOR ITS FAILURE TO BID ON AN ITEM THAT WAS NOT PART OF THE EVALUATION. IN OUR DECISION B-150488, DATED FEBRUARY 21, 1963, WE STATED THAT A DISTINCTION MUST BE DRAWN BETWEEN DATA WHICH REPRESENTS A RELATIVELY FREE CHOICE BY THE BIDDER, AND DATA WHICH THE BIDDER FURNISHES FOR GENERAL INFORMATION AND WITH RESPECT TO WHICH THERE IS NO NEED FOR A BIDDER TO MAKE A CHOICE. HERE WE HAVE AN ANALOGOUS SITUATION IN THAT WHILE THE REQUIRED PERCENTAGE FIGURES MAY HAVE BEEN INTENDED TO BE CONSIDERED AS A FACTOR FOR PURPOSES OF BID EVALUATION, THEIR INSERTION COULD NOT AS A PRACTICAL MATTER PLAY ANY PART IN THE EVALUATION PROCESS. AND WHERE, AS HERE, A BIDDER FAILS TO INSERT A PERCENTAGE FIGURE, THE GOVERNMENT STILL RETAINS THE RIGHT TO PAY FOR SUCH CHANGES ON A LUMP-SUM BASIS UNDER PARAGRAPH 2 OR IT MAY PAY FOR SUCH CHANGES ON AN EQUITABLE BASIS, AS PROVIDED IN THE "CHANGES" CLAUSE, BY APPROPRIATE MODIFICATION OF THE LEASE AGREEMENT.

ACCORDINGLY, IN VIEW OF THE PURELY SPECULATIVE EFFECT OF THE OMITTED FIGURES AND THE FACT THAT THE GOVERNMENT CAN STILL CHOOSE TO PAY FOR SUCH ADDITIONS IN EITHER A LUMP SUM OR HAVE ITS RENT ADJUSTED AS PREVIOUSLY INDICATED, WE WILL INTERPOSE NO OBJECTION TO AN AWARD TO THE NATIONAL CONSTRUCTION COMPANY. SEE 39 COMP. GEN. 595.