B-157796, DEC. 22, 1965

B-157796, DEC. 22, 1965

TO MR. HERMAN H. NEUMANN:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 30, 1965, IN WHICH YOU PROTEST AGAINST THE FAILURE OF THE NATIONAL PARK SERVICE TO AWARD YOU THE CONTRACT FOR CONSTRUCTION OF VISITOR USE AND EMPLOYEE RESIDENTIAL BUILDINGS AT LASSEN VOLCANIC NATIONAL PARK, CALIFORNIA, DESIGNATED AS PROJECT NO. LV-W 549. IN EFFECT, YOU REQUEST THAT A CONTRACT FOR SUCH WORK WHICH WAS AWARDED TO GILL CONSTRUCTION COMPANY OF PACHECO, CALIFORNIA, SHOULD BE CANCELLED AND THE WORK AWARDED TO YOU. ALTERNATIVELY, YOU REQUEST THE GOVERNMENT TO PAY YOU THE SUM OF $34,200 "FOR BIDDING EXPENSES, MOBILIZATION AND PROFIT WHICH (YOU) WOULD EXPECT TO MAKE IF THE CONTRACT HAD BEEN PROPERLY AWARDED TO (YOU).'

THE PRINCIPAL ITEMS OF THIS CONTRACT WERE FIRST ADVERTISED FOR BIDS IN 1964, BUT THE BIDS RECEIVED WERE SO FAR IN EXCESS OF AVAILABLE FUNDS THAT THE GOVERNMENT REJECTED ALL BIDS AND CANCELLED THE INVITATION. AFTER SOME REDESIGN, THE ADDITION OF MORE ITEMS, AND THE PROGRAMMING OF ADDITIONAL FUNDS, THE PROJECT WAS READVERTISED IN MAY 1065, UNDER AN INVITATION WHICH CONTAINED FIVE "GROUPS" OR "SCHEDULES," EACH CONTAINING SEPARATE ITEMS OF WORK AND MATERIALS. YOUR PROTEST IS PRIMARILY CONCERNED WITH SCHEDULE IV(DUPLEX RESIDENCE BUILDING), WITH SCHEDULE VI TITLED ,DEDUCTION FOR COMBINED BID, ENTIRE PROJECT," AND WITH AN UNNUMBERED "ALTERNATE BID SCHEDULE" REQUESTING ADDITIONS TO OR DEDUCTIONS FROM THE RELATIVE BASE BID ITEMS. SCHEDULE VI PROVIDES:

"BIDDER SHALL STATE BELOW ANY REDUCTION HE WILL MAKE IN HIS TOTAL BID IF AWARD IS MADE ON THE BASIS OF A COMBINED BID FOR THE ENTIRE PROJECT, SCHEDULE I, II, III, IV, AND V COMPLETE.'

YOUR TOTAL BID PRICE FOR ALL SCHEDULES WAS $281,761. HOWEVER, ON SCHEDULE VI YOU NOTED A $10,000 DEDUCTION; $6,500 TO BE APPLIED TO SCHEDULE I (WINTER USE BUILDING COMPLETE), AND $3,500 TO BE APPLIED TO SCHEDULE IV. IT IS YOUR CONTENTION THAT THIS DEDUCTION MAKES YOU THE LOW BIDDER AND, THEREFORE, ENTITLED TO THE AWARD. THAT IS, SINCE GILL CONSTRUCTION OFFERED NO DEDUCTIONS UNDER SCHEDULE VI, ITS TOTAL BID WAS $279,769; WHEREAS, YOUR TOTAL BID AFTER THE $10,000 DEDUCTION WAS $271,461. HOWEVER, UPON EXAMINATION OF THE BIDS, THE CONTRACTING OFFICER DETERMINED THAT NONE OF THE BIDS RECEIVED ON SCHEDULE IV WERE WITHIN THE CONGRESSIONAL STATUTORY LIMITATION OF $20,000 PER RESIDENCE, THAT THE BIDS ON SCHEDULE IV THEREFORE COULD NOT BE ACCEPTED, AND THAT SCHEDULE IV SHOULD BE OMITTED FROM THE AWARD, RATHER THAN ADVERTISE FOR BIDS A THIRD TIME. THIS RIGHT WAS RESERVED TO THE GOVERNMENT IN PARAGRAPH 10 (C) OF STANDARD FORM 22, INSTRUCTIONS TO BIDDERS, WHICH READS AS FOLLOWS:

"THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED BY THE INVITATION FOR BIDS OR THE BIDDER INCLUDES IN HIS BID A RESTRICTIVE LIMITATION.'

INASMUCH AS THE AWARD WAS NOT MADE ON THE BASIS OF A COMBINED BID FOR THE ENTIRE PROJECT, WHICH IS A PREREQUISITE TO ACCEPTANCE OF ANY DEDUCTION OFFERED UNDER SCHEDULE VI, IT IS OUR OPINION THAT THE DEDUCTION YOU OFFERED COULD NOT BE CONSIDERED IN THE EVALUATION OF YOUR BID. THEREFORE CANNOT AGREE THAT YOU WERE THE LOW BIDDER.

NEXT, YOU CONTEND THAT EVEN IF GILL CONSTRUCTION COMPANY IS THE LOW BIDDER, THE AWARD SHOULD HAVE BEEN MADE TO YOU AS SECOND LOW BIDDER IN VIEW OF THE FACT THAT THE GILL BID WAS NONRESPONSIVE. IN THIS REGARD YOU REFER TO THE ALTERNATE BID SCHEDULE, THE BID FORM (STANDARD FORM 21), AND THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22). PAGE 4 OF THE BID FORM STATES:

"BIDDER SHALL ENTER A BID FOR ALL ITEMS INCLUDING ALL ALTERNATE BIDS.'

SECTION 5 (B) OF THE INSTRUCTIONS TO BIDDERS STATES, IN PERTINENT PART:

"WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID.'

IN ITS ALTERNATE BID SCHEDULE, THE GILL COMPANY MADE NO ADDITIONS TO OR DEDUCTIONS FROM THE BASE BID ITEMS AS REQUESTED FOR ALTERNATE ITEMS A, B, AND C, BUT RATHER ENTERED THE WORDS "NONE," ,NONE," AND "NO BID," RESPECTIVELY. WHILE THE DEPARTMENT DECIDED THAT IT WOULD NOT BE TO THE GOVERNMENT'S ADVANTAGE TO AWARD ANY OF THE ALTERNATIVE ITEMS, IT IS YOUR POSITION THAT GILL'S ENTIRE BID SHOULD BE REJECTED BECAUSE THE ABOVE ENTRIES SHOULD NOT BE CONSIDERED AS "BIDS" ON THOSE ITEMS.

IN REGARD TO ALTERNATE ITEMS A AND B, IT IS OUR OPINION THAT THE PROPER INTERPRETATION OF GILL'S BID IS THAT GILL WAS OFFERING TO SUPPLY SUCH ALTERNATES AT PRECISELY THE SAME PRICE AS THE BASE BID. THAT IS, IF THE GOVERNMENT DECIDED TO USE ONE OF THE ALTERNATE ITEMS RATHER THAN THE BASE ITEM, GILL WOULD BE BOUND TO CHARGE THE AMOUNT HE BID FOR THE BASE ITEM. IN REGARD TO ALTERNATE ITEM C, IT WOULD APPEAR THAT THE ENTRY "NO BID" MUST BE INTERPRETED TO MEAN THE SAME AS ,NONE," SINCE ANY OTHER INTERPRETATION WOULD BE MEANINGLESS IN VIEW OF THE FACT GILL'S BASE BID INCLUDES THE ITEM OF ROOFING FOR THE WINTER USE BUILDING (THE SCHEDULE TO WHICH THIS ITEM APPLIES). IT SHOULD BE NOTED, HOWEVER, THAT EVEN IF GILL'S ENTRIES ON ALTERNATE ITEMS A, B, AND C ARE INTERPRETED AS "FAILURES TO BID" WITHIN THE MEANING OF SECTION 5 (B) OF THE INSTRUCTIONS TO BIDDERS, IT WOULD NOT APPEAR THAT REJECTION OF THE BID WOULD BE NECESSARY OR PROPER.

IN OUR DECISION NO. B-147038, SEPTEMBER 7, 1961, IN WHICH THE FACTS WERE QUITE SIMILAR TO THE PRESENT CASE, WE HELD AS FOLLOWS:

"IT WOULD APPEAR TO 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 HAS BEEN ELIMINATED FROM THE CONTEMPLATED WORK THROUGH THE SELECTION OF A MORE DESIRABLE TYPE OF PARTITION.'

SEE ALSO, 34 COMP. GEN. 633, INVOLVING A PROCUREMENT IN WHICH THE BIDDERS WERE DIRECTED TO ,HAVE EACH APPLICABLE BLANK SPACE FILLED IN," AND WHEREIN WE STATED THAT SUCH PROVISIONS WERE INTENDED SOLELY FOR THE BENEFIT OF THE GOVERNMENT, AND MAY BE REGARDED AS AN INFORMALITY WHICH MAY BE WAIVED. VIEW THEREOF WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT GILL'S BID SHOULD HAVE BEEN REJECTED FOR FAILURE TO BID ON ALTERNATE ITEMS A, B, AND C.

FINALLY, IN REGARD TO YOUR CLAIM FOR BIDDING EXPENSES, MOBILIZATION AND LOSS OF PROFITS, WE INVITE YOUR ATTENTION TO HEYER PRODUCTS COMPANY, INC. V. UNITED STATES, 135 CT.CL. 63, IN WHICH AN UNSUCCESSFUL BIDDER CLAIMED BOTH LOSS OF PROFITS AND COSTS INCURRED IN PREPARING ITS BID. AT PAGE 71, THE COURT HELD:

"RECOVERY CAN BE HAD IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT. IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS, AND WITH THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.'

THE COURT ALSO HELD THAT THE UNSUCCESSFUL BIDDER WAS NOT ENTITLED TO RECOVER ANTICIPATED PROFITS BECAUSE IT HAD NO CONTRACT.

IN VIEW OF THE TOTAL LACK OF PROOF SUCH AS IS REQUIRED BY THE HEYER CASE, AND BECAUSE WE ARE AWARE OF NO DECISION, EITHER BY THIS OFFICE OR THE COURTS, TO THE CONTRARY, WE MUST CONCLUDE THAT YOU ARE NOT ENTITLED TO BE PAID ANY AMOUNT REPRESENTING BIDDING EXPENSES OR ANTICIPATED PROFITS.

ACCORDINGLY, FOR THE REASONS SET OUT ABOVE, YOUR PROTEST AND CLAIM ARE DENIED.