B-154855, SEP. 21, 1964

B-154855, SEP. 21, 1964

TO M. CARL LEVINE, MORGULAS AND FOREMAN:

REFERENCE IS MADE TO YOUR LETTER OF JULY 29, 1964, WITH ENCLOSURES, AND YOUR LETTER OF SEPTEMBER 14, 1964, PROTESTING ON BEHALF OF REGAN CONSTRUCTION COMPANY, INC., AND NAGER ELECTRIC COMPANY, INC., AGAINST THE REJECTION OF THEIR BID ON THE CONSTRUCTION AND LEASE OF A PROPOSED POSTAL FACILITY, FRANKLIN DELANO ROOSEVELT STATION, NEW YORK, NEW YORK, UNDER ADVERTISEMENT FOR BIDS DATED APRIL 9, 1964, ISSUED BY THE POST OFFICE DEPARTMENT, BUREAU OF FACILITIES, WASHINGTON, D.C.

THE RECORD SHOWS THAT PURSUANT TO THE PROVISIONS OF 39 U.S.C. 2103 AND 2112, THE POST OFFICE DEPARTMENT, ON APRIL 9, 1964, ISSUED AN ADVERTISEMENT FOR BIDS FOR NEW CONSTRUCTION AND LEASE OF SPACE FOR THE FRANKLIN DELANO ROOSEVELT STATION, NEW YORK, NEW YORK, TO BE CONSTRUCTED ON LANDS OWNED BY THE GOVERNMENT AND TO BE PURCHASED BY THE SUCCESSFUL BIDDER. ALTERNATE BIDS WERE SOLICITED, SCHEME "A" CALLING FOR CONSTRUCTION OF A MULTIOCCUPANCY BUILDING, AND SCHEME "B" FOR A BUILDING FOR EXCLUSIVE USE BY THE POSTAL SERVICE. UNDER PROPOSAL 1 OF EITHER SCHEME, THE SUCCESSFUL BIDDER WAS TO PAY THE GOVERNMENT $3,195,195 FOR THE SITE, WHEREAS UNDER PROPOSAL 2 IT WAS TO PAY $6,500,000. BIDS WERE TO BE OPENED ON JUNE 16, 1964, AT 2 P.M. REGAN CONSTRUCTION COMPANY, INC., AND NAGER ELECTRIC COMPANY, INC., SUBMITTED A BID UNDER SCHEME "B.'

TWO AMENDMENTS TO THE BIDDING FORMS WERE ISSUED PRIOR TO THE TIME SET FOR OPENING OF BIDS. AMENDMENT NO. 1 WAS ISSUED ON APRIL 28, 1964, AND THE ONLY MATERIAL EFFECT OF IT AS TO BIDDERS UNDER SCHEME "B" WAS TO INSTRUCT THEM TO INSERT THE FIGURES $6,500,000 IN THREE DESIGNATED SPACES ON THE AGREEMENT TO LEASE FORM WHICH CONSTITUTED THEIR BIDS. AMENDMENT NO. 2 WAS ISSUED ON MAY 18, 1964, AND IT ADVISED ALL BIDDERS OF THE ISSUANCE OF "ADDENDUM POD NO. 1, MAY 15, 1964.' BOTH AMENDMENT NO. 1 AND AMENDMENT NO. 2 BORE A STATEMENT THAT THEY MUST BE ACKNOWLEDGED BY ALL BIDDERS SUBMITTING A BID AND THAT A COPY OF THE AMENDMENTS MUST BE ATTACHED TO AND MADE A PART OF THE AGREEMENT TO LEASE. ON EACH OF THE AMENDMENTS A SPACE WAS PROVIDED FOR SIGNATURE BY THE BIDDERS AND THE INSERTION OF THE DATE OF SIGNATURE. REGAN CONSTRUCTION COMPANY, INC., AND NAGER ELECTRIC COMPANY, INC., DID NOT ATTACH EITHER AMENDMENT NO. 1 OR AMENDMENT NO. 2 TO THEIR BID. IT IS SHOWN THAT THE ABOVE-MENTIONED FIGURE OF $6,500,000 WAS INSERTED IN THE AGREEMENT TO LEASE FORM IN THE SPECIFIED PLACES IN ACCORDANCE WITH THE INSTRUCTION CONTAINED IN AMENDMENT NO. 1, WHICH ESTABLISHES, IN OUR VIEW, THAT AMENDMENT NO. 1 WAS RECEIVED BY REGAN AND NAGER AND ACKNOWLEDGED IN THEIR BID. HOWEVER, THE CRUX OF THE MATTER REVOLVES AROUND THE FACT THAT AMENDMENT NO. 2 (ADVISING BIDDERS OF THE ISSUANCE OF "ADDENDUM POD NO. 1, MAY 15, 1964.'' WAS NOT ACKNOWLEDGED BY REGAN AND NAGER AS REQUIRED BY EXPLICIT INSTRUCTIONS TO ALL BIDDERS.

THE ESSENCE OF YOUR PROTEST, AS CONTAINED IN YOUR LETTER OF JULY 29, 1964, IS THAT "AMENDMENT NO. 2 IN NO WAY AFFECTS THE PRICE, THE NATURE OF CONSTRUCTION OR ANY OTHER RELEVANT OR MATERIAL OBLIGATION ON THE PART OF THE BIDDERS.' YOU FURTHER STATE THAT "OUR CLIENTS CONTEND, WITHOUT RESERVATION, RESTRICTION OR EXCEPTION THAT THE AMENDMENTS IN NO WAY AFFECT THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT.' HOWEVER, IN YOUR LETTER OF SEPTEMBER 14, 1964, YOU SEEM TO MODIFY YOUR ORIGINAL POSITION, IN THAT YOU ADMIT THAT THERE WOULD BE ADDITIONAL COSTS INVOLVED AS A RESULT OF THE UNACKNOWLEDGED AMENDMENT. ACCORDING TO YOUR FIGURES, THE ADDITIONAL COSTS SHOULD AMOUNT TO $4,692. YOU ALSO URGE THAT WHILE REGAN AND NAGER DID NOT FOLLOW THE INSTRUCTIONS OF THE BIDDING DOCUMENTS BY ACKNOWLEDGING THE AMENDMENTS, THEY DID TAKE THE ADDITIONAL COSTS OF THE ITEMS INVOLVED INTO CONSIDERATION IN PREPARING THEIR BID.

IN THIS RESPECT, THE POST OFFICE DEPARTMENT REPORTS THAT THE CHANGES IN CONSTRUCTION COVERED BY THE ADDENDUM IN QUESTION WILL INCREASE THE CONSTRUCTION COST OF THE BUILDING COVERED BY SCHEME B" IN THE APPROXIMATE AMOUNT OF $259,000. THE INCREASE IN COST IS SHOWN AS FOLLOWS:

CHART

SCHEME "B"

MARCH 10, 1964 ESTIMATE $10,835,100

ADDENDUM NO. 1

STRUCTURAL $ 45,000

GENERAL CONSTRUCTION 21,000

H.V.A.C. (INCL. SPRINKLERS) 150,000

ELECTRICAL 38,000

PLUMBING 5,000

259,000

TOTAL $11,094,100

IN VIEW OF THE FOREGOING, THE POST OFFICE DEPARTMENT MADE A DETERMINATION THAT AMENDMENT NO. 2 (ADDENDUM POD NO. 1) AFFECTED THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT COVERED BY THE BID SUBMITTED BY THE REGAN AND HAGER COMPANIES, AND THEIR FAILURE TO ACKNOWLEDGE ITS RECEIPT IN THE MANNER REQUIRED BY THE INVITATION RENDERED THEIR BID NONRESPONSIVE. REGAN AND NAGER WERE SO ADVISED OF THAT DECISION BY LETTER OF JULY 28, 1964.

IT IS WELL ESTABLISHED THAT THE FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN INVITATION PRIOR TO BID OPENING RENDERS THE BID NONRESPONSIVE WHERE SUCH AMENDMENT COULD, AS HERE, AFFECT PRICE, QUANTITY OR QUALITY. 37 COMP. GEN. 785. A BID SUBMITTED IN RESPONSE TO AN INVITATION IS AN OFFER; THE AWARD IS AN ACCEPTANCE WHICH EFFECTS A BINDING AGREEMENT BETWEEN THE BIDDER AND THE GOVERNMENT. IF AN AMENDMENT WHICH AFFECTS PRICE, QUANTITY OR QUALITY IS NOT ACKNOWLEDGED BY THE BIDDER PRIOR TO BID OPENING, HIS OFFER IS FOR SOMETHING OTHER THAN THE PERFORMANCE SOLICITED BY THE TERMS OF THE INVITATION, INCLUDING ANY AMENDMENTS. TO PERMIT HIM TO PERFORM IN ACCORDANCE WITH THE INVITATION WITHOUT THE UNACKNOWLEDGED AMENDMENT WOULD BE CONTRARY TO THE STATUTES GOVERNING ADVERTISED PROCUREMENTS. UNITED STATES V. ELLICOTT, 223 U.S. 525 (1911). ON THE OTHER HAND, TO PERMIT THE BIDDER TO AMEND HIS BID AFTER OPENING TO CONFORM TO THE SPECIFICATION AS MODIFIED BY ALL THE AMENDMENTS WOULD ALSO CONTRAVENE THE COMPETITIVE BIDDING STATUTES. C.J.S. MUNICIPAL CORPORATIONS, SECTION 1003 40 COMP. GEN. 447, 448. MOREOVER, WHILE IT IS NOT THE KEY ISSUE IN THIS CASE, THE DIFFERENCE IN YOUR COMPUTATION OF $4,692, AND THE POST OFFICE COMPUTATION OF $259,000 OF ADDITIONAL COSTS UNDER THE UNACKNOWLEDGED AMENDMENT, MUST BE RESOLVED IN FAVOR OF THE POST OFFICE DEPARTMENT, SINCE WHEN THERE IS A CONFLICT BETWEEN THE STATEMENT OF A CLAIMANT AND THE REPORT OF THE ADMINISTRATIVE OFFICE, IT IS THE RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO ACCEPT THE LATTER, IN THE ABSENCE OF EVIDENCE CLEARLY REQUIRING A CONTRARY CONCLUSION. 37 COMP. GEN. 568; 41 COMP. GEN. 266.

BASED ON THE FOREGOING, WE FIND NO LEGAL BASIS TO OBJECT TO THE ADMINISTRATIVE ACTIONS TAKEN WITH RESPECT TO REGAN AND NAGER'S BID. YOUR PROTEST MUST THEREFORE BE DENIED.