B-172816, JUN 10, 1971

B-172816, JUN 10, 1971

BID PROTEST - LATE MODIFICATION - DELAY OF TELEGRAPH COMPANY DENYING PROTEST OF VANGUARD CONSTRUCTION CORP. AGAINST THE POSSIBLE AWARD OF A CONTRACT TO CARNEY GENERAL CONTRACTORS UNDER AN IFB ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, NORFOLK, VA., FOR PUMPING IMPROVEMENTS FOR DRY DOCKS AT NORFOLK NAVAL SHIPYARD. CARNEY SUBMITTED A BID MODIFICATION AFTER OPENING WHICH MADE IT LOW. ALTHOUGH ASPR 2-303.4 PROVIDES THAT A LATE TELEGRAPHIC BID MODIFICATION WILL NOT BE CONSIDERED UNLESS THE DELAY WAS DUE TO MISHANDLING BY THE GOVERNMENT AN UNREVISED VERSION OF STANDARD FORM 22, JUNE 1964 EDITION, PERMITTING CONSIDERATION OF LATE MODIFICATIONS WHEN THE DELAY WAS DUE TO MISHANDLING OF THE TELEGRAPH COMPANY, WAS MISTAKENLY MADE PART OF THE INVITATION. UNDER THE CIRCUMSTANCES AND IN ACCORDANCE WITH B 170217, JULY 17, 1970, A RESOLICITATION LIMITED TO THE CONCERN WHICH WOULD BE LOW UNDER FORM 22 (CARNEY) AND THE ONE WHICH WOULD BE LOW UNDER ASPR 2-303.4 (VANGUARD) IS PROPER, ESPECIALLY AS CARNEY APPARENTLY RELIED ON THE LANGUAGE OF FORM 22 IN SUBMITTING ITS BID MODIFICATION.

TO VANGUARD CONSTRUCTION CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED APRIL 30, 1971, PROTESTING THE POSSIBLE AWARD OF A CONTRACT TO CARNEY GENERAL CONTRACTORS (CARNEY) UNDER INVITATION FOR BIDS NO. N62470-68-B-0734, ISSUED BY THE ATLANTIC DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, NAVAL STATION, NORFOLK, VIRGINIA, FOR PUMPING IMPROVEMENTS FOR DRY DOCKS 1, 2 AND 3 AT THE NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA.

THE IFB WAS FIRST ISSUED JANUARY 30, 1971. BIDS WERE SCHEDULED FOR OPENING AT 2:00 P.M., EASTERN STANDARD TIME, APRIL 13, 1971. TWO BIDS HAD BEEN RECEIVED AS OF SUCH TIME, ONE FROM YOUR COMPANY QUOTING A PRICE OF $1,253,333, AND THE OTHER FROM CARNEY, QUOTING A PRICE OF $4,000,000. SUBSEQUENT TO THE BID OPENING, AT 2:49 P.M., EASTERN STANDARD TIME, APRIL 13, 1971, A TELEGRAM WAS RECEIVED FROM CARNEY REDUCING ITS BID PRICE BY THE AMOUNT OF $2,870,400, OR FROM $4,000,000 TO $1,129,600. THE TELEGRAM WAS FILED IN THE WESTERN UNION OFFICE AT HIGHLAND PARK, ILLINOIS, AT 11:22 A.M., CENTRAL STANDARD TIME, TRANSMITTED AT 11:33 A.M., BUT NOT RECEIVED IN THE NORFOLK, VIRGINIA, OFFICE OF THE WESTERN UNION UNTIL 2:30 P.M., EASTERN STANDARD TIME. THE TELEGRAM WAS FILED ONE HOUR AND 38 MINUTES BEFORE THE SCHEDULED BID OPENING TIME, AND IT APPEARED THAT THE LATE RECEIPT OF THE TELEGRAM WAS DUE TO DELAY BY THE TELEGRAPH COMPANY, FOR WHICH CARNEY WAS NOT RESPONSIBLE.

STANDARD FORM 22, JUNE 1964 EDITION, WAS MADE A PART OF THE INVITATION FOR BIDS. PARAGRAPH 7 THEREOF, ENTITLED "LATE BIDS AND MODIFICATIONS OR WITHDRAWALS," PERMITS THE CONSIDERATION OF A LATE TELEGRAPHIC BID MODIFICATION IF THE LATE RECEIPT WAS DUE TO DELAY BY THE TELEGRAPH COMPANY FOR WHICH THE BIDDER WAS NOT RESPONSIBLE. HOWEVER, SECTION 2-303.4 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), PROVIDES THAT A LATE TELEGRAPHIC BID MODIFICATION SHALL NOT BE CONSIDERED UNLESS THE DELAY WAS DUE TO MISHANDLING BY THE GOVERNMENT IN ITS TRANSMITTAL TO THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS FOR THE RECEIPT OF BIDS.

IT IS REPORTED BY THE NAVAL FACILITIES ENGINEERING COMMAND, THAT PARAGRAPH 7 OF STANDARD FORM 22, JUNE 1964 EDITION, SHOULD HAVE BEEN REVISED IN ACCORDANCE WITH ASPR 2-303.4, BUT THAT, THROUGH INADVERTENCE, THIS WAS NOT DONE. IN A PREVIOUS CASE INVOLVING SIMILAR CIRCUMSTANCES, B- 170217, JULY 17, 1970, WE DETERMINED THAT THERE SHOULD BE A RESOLICITATION OF THE PROCUREMENT LIMITED TO THE CONCERN WHICH WOULD BE LOW UNDER THE LATE MODIFICATION LANGUAGE OF THE SOLICITATION AND THE FIRM WHICH WOULD BE LOW UNDER ASPR 2-303.4.

IN THE INSTANT PROCUREMENT, BIDS WERE RESOLICITED FROM YOUR COMPANY AND CARNEY. BIDS ON THE RESOLICITATION WERE OPENED ON APRIL 30, 1971. CARNEY SUBMITTED A BID IN THE AMOUNT OF $1,129,600, AND A BID OF $1,203,333 WAS SUBMITTED BY YOUR COMPANY. THE LOW BID IS IN THE SAME AMOUNT AS THAT PROPOSED IN THE TELEGRAPHIC MODIFICATION OF APRIL 13, 1971, AND YOUR BID OF $1,203,333 IS $50,000 LESS THAN YOUR PREVIOUS BID OF $1,253,333.

OUR DECISION, B-170217, JULY 17, 1970, CITED ABOVE, STATES IN PART AS FOLLOWS:

"WE RECOGNIZE THAT BIDDERS NORMALLY COMPUTE THEIR BIDS ON THE BASIS OF THE TERMS AND CONDITIONS STATED IN THE INVITATION, AND WILL OTHERWISE RELY ON THESE PROVISIONS AND THAT IT IS A SERIOUS MATTER TO VARY OR DISREGARD ANY OF THE STATED TERMS AND CONDITIONS OF THE SOLICITATION AFTER THE BIDS HAVE BEEN OPENED. IN 17 COMP. GEN. 554 (1938), IT WAS STATED THAT TO PERMIT PUBLIC OFFICERS TO PERMIT BIDDERS TO VARY THEIR PROPOSALS AFTER BIDS ARE OPENED WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING CONTRACTS ON AN OPEN COMPETITIVE BASIS. CHANGING THE GROUND RULES UPON WHICH BIDDERS ARE REQUESTED TO BID AFTER OPENING OF BIDS IS SUBJECT TO THE SAME CRITICISM.

"IN OUR OPINION, NOT TO GIVE EFFECT TO THE PROVISION IN THE INVITATION REGARDING THE CONSIDERATION OF LATE TELEGRAPHIC MODIFICATIONS WOULD BE A SERIOUS MATTER AND COULD BE CONSIDERED AS BEING PREJUDICIAL TO FERRIELL SINCE IF FERRIELL KNEW THAT LATE TELEGRAPHIC MODIFICATIONS WOULD NOT BE CONSIDERED EXCEPT IN A MISHANDLING SITUATION, THIS BIDDER MIGHT WELL HAVE HAND CARRIED THE MODIFICATION TO THE BID OPENING ROOM."

WHAT WAS SAID IN THAT DECISION APPEARS TO BE APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THIS CASE. IT IS NOT UNCOMMON IN CONSTRUCTION PROJECTS FOR A BIDDER TO SUBMIT AN UNREALISTICALLY HIGH PRICE WITH AN INTENTION TO TAKE ADVANTAGE OF THE TELEGRAPHIC BID MODIFICATION PROCEDURE AFTER IT IS DETERMINED HOW FAR THE BID PRICE COULD BE REDUCED. IN THIS CASE CARNEY APPARENTLY RELIED ON THE LANGUAGE OF THE SOLICITATION IN SUBMITTING THE TELEGRAPHIC BID MODIFICATION. IF THE COMPANY HAD RECOGNIZED THAT THE MORE STRINGENT RULE IN THE ASPR MIGHT BE APPLIED, IT COULD WELL HAVE ARRANGED TO SUBMIT THE BID MODIFICATION EARLIER OR BY OTHER MEANS.

IN THE CIRCUMSTANCES, THE RESOLICITATION OF BIDS LIMITED TO CARNEY AND VANGUARD APPEARS TO HAVE BEEN APPROPRIATE. ACCORDINGLY, YOUR PROTEST IS DENIED.