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PRESIDENT: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 27. THE CONTEMPLATED CONTRACT WORK WAS TO BE MADE SUBJECT TO INDIVIDUAL CALLS BY THE GOVERNMENT AND BIDS WERE SOLICITED ON THE BASIS OF UNIT PRICES WHICH WOULD BE APPLICABLE TO THE QUANTITY OF WORK ACTUALLY TO BE PERFORMED UNDER SUCH CALLS OR ORDERS AS THE GOVERNMENT MIGHT ISSUE DURING THE PERIOD EXTENDING FROM THE DATE OF CONTRACT AWARD THROUGH JUNE 30. ESTIMATED QUANTITIES OF WORK WERE SET FORTH IN SCHEDULE C OF THE INVITATION WHICH LISTED SIX ITEMS. SPACES WERE PROVIDED IN THE SCHEDULE FOR THE INSERTION OF UNIT PRICES AND EXTENDED TOTAL PRICES FOR EACH OF THE SIX ITEMS. AT THE BOTTOM OF THE COLUMN FOR THE INSERTION OF THE TOTAL PRICES ON THE ITEMS A SPACE WAS PROVIDED FOR INSERTION OF AN AMOUNT TO REPRESENT THE "ESTIMATED ANNUAL AGGREGATE TOTAL.'.

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B-143648, SEP. 23, 1960

TO MR. HENRY KLIPPEL, PRESIDENT:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 27, 1960, PRESENTING A CLAIM AGAINST THE GOVERNMENT IN CONNECTION WITH YOUR PROTEST AGAINST AN AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS NO. 30-601- 60-39, ISSUED MAY 23, 1960, BY THE BASE PROCUREMENT OFFICE, MITCHEL AIR FORCE BASE, NEW YORK.

THE INVITATION, AS AMENDED ON MAY 25, 1960, REQUESTED BIDS FOR INTERIOR PAINTING, FLOOR REFINISHING AND HARDWARE REPLATING IN 30 NCO BUILDINGS AT THE MITCHEL AIR FORCE BASE. THE CONTEMPLATED CONTRACT WORK WAS TO BE MADE SUBJECT TO INDIVIDUAL CALLS BY THE GOVERNMENT AND BIDS WERE SOLICITED ON THE BASIS OF UNIT PRICES WHICH WOULD BE APPLICABLE TO THE QUANTITY OF WORK ACTUALLY TO BE PERFORMED UNDER SUCH CALLS OR ORDERS AS THE GOVERNMENT MIGHT ISSUE DURING THE PERIOD EXTENDING FROM THE DATE OF CONTRACT AWARD THROUGH JUNE 30, 1961. ESTIMATED QUANTITIES OF WORK WERE SET FORTH IN SCHEDULE C OF THE INVITATION WHICH LISTED SIX ITEMS, AS FOLLOWS: (1) PAINTING INTERIOR OF AN ESTIMATED QUANTITY OF FOUR BUILDINGS CONTAINING TWO-BEDROOM QUARTERS; (2) PAINTING INTERIOR OF AN ESTIMATED QUANTITY OF 26 BUILDINGS CONTAINING THREE-BEDROOM QUARTERS; (3) REFINISHING OF THE FLOORS IN AN ESTIMATED QUANTITY OF FOUR BUILDINGS CONTAINING TWO BEDROOM QUARTERS; (4) REFINISHING OF THE FLOORS IN AN ESTIMATED QUANTITY OF 26 BUILDINGS CONTAINING THREE-BEDROOM QUARTERS; (5) REPLATING THE HARDWARE IN AN ESTIMATED QUANTITY OF FOUR BUILDINGS CONTAINING TWO-BEDROOM QUARTERS; AND (6) REPLATING THE HARDWARE IN AN ESTIMATED QUANTITY OF 26 BUILDINGS CONTAINING THREE-BEDROOM QUARTERS. SPACES WERE PROVIDED IN THE SCHEDULE FOR THE INSERTION OF UNIT PRICES AND EXTENDED TOTAL PRICES FOR EACH OF THE SIX ITEMS, AND AT THE BOTTOM OF THE COLUMN FOR THE INSERTION OF THE TOTAL PRICES ON THE ITEMS A SPACE WAS PROVIDED FOR INSERTION OF AN AMOUNT TO REPRESENT THE "ESTIMATED ANNUAL AGGREGATE TOTAL.'

THE INVITATION PROVIDED THAT THE AWARD OF THE CONTRACT WOULD BE BASED UPON "THE ESTIMATED ANNUAL AGGREGATE TOTAL PRICE FOR ALL WORK OUTLINED IN SCHEDULE C" AND THAT "BIDS TO BE RESPONSIVE MUST BE SUBMITTED ON AN ALL OR NONE BASIS.' THE INVITATION FURTHER PROVIDED THAT FAILURE TO SUBMIT A BID ON AN ALL OR NONE BASIS WOULD CONSTITUTE GROUNDS FOR REJECTION. BIDDERS WERE ALSO REQUIRED TO SUBMIT A BID GUARANTY OF NOT LESS THAN 20 PERCENT OF THE BID PRICE IF SUCH PRICE WERE IN EXCESS OF $2,000.

NINE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE AGGREGATE AMOUNT OF YOUR BID WAS $180,000 AND THE EIGHT OTHER BIDDERS QUOTED PRICES WHICH RANGED FROM $16,740 TO $29,300. HOWEVER, IN THE SPACE PROVIDED FOR INSERTION OF AN AMOUNT TO REPRESENT THE "ESTIMATED ANNUAL AGGREGATE TOTAL" OF YOUR BID, YOU INSERTED THE FIGURE $2,000. YOU QUOTED THE SAME AMOUNT FOR EACH OF THE 90 UNITS OF WORK AND YOUR EXTENDED TOTAL PRICES ON THE SIX ITEMS OF SCHEDULE C WERE IN THE RESPECTIVE AMOUNTS OF $8,000, $52,000, $8,000, $52,000, $8,000 AND $52,000.

YOUR BID WAS NOT ACCOMPANIED WITH A BID BOND OR OTHER ACCEPTABLE BID GUARANTEE BUT EACH OF THE OTHER EIGHT BIDDERS SUBMITTED A BID BOND. THE CONTRACT WAS AWARDED TO AR AND BEE CONTRACTING SERVICE, INC., HEMPSTEAD, NEW YORK, THE FIRM WHICH HAD SUBMITTED THE LOWEST AGGREGATE BID OF $16,740. THAT COMPANY'S TOTAL PRICE AGREED WITH ITS STATED UNIT PRICES ON ALL OF THE ESTIMATED QUANTITIES OF WORK, INCLUDING PRICES OF $335 AND $395 FOR INTERIOR PAINTING, $90 AND $110 FOR REFINISHING FLOORS, AND $55 AND $65 FOR REPLATING OF HARDWARE.

IT IS YOUR CONTENTION THAT THE "ESTIMATED ANNUAL AGGREGATE TOTAL" FOR CONTRACT AWARD IS NOT RELATED TO ANY SUM OF FIGURES EITHER IN WHOLE OR IN PART, SINCE NO SUCH REQUIREMENT EXISTED IN THE INVITATION AND THE GOVERNMENT WAS NOT GUARANTEEING THAT ANY CALLS WOULD BE MADE DURING THE CONTRACT PERIOD. YOU STATE THAT BY THE VERY NATURE OF THE INVITATION THE GOVERNMENT REQUESTED THE CONTRACTORS TO SUBMIT AN ESTIMATE FOR THE ANNUAL AMOUNT OF THE CONTRACT AND STATED THAT THIS AMOUNT WAS TO BE THE BASIS FOR AWARD. ACCORDING TO YOUR LETTER, YOU ESTIMATED THAT ONLY ONE CALL WOULD BE MADE AND YOU CONSIDERED THAT THIS WOULD ENTAIL A GREAT DEAL OF NUISANCE VALUE. THEREFORE, YOU ASSUMED THAT, SHOULD THE GOVERNMENT DESIRE TO MAKE ADDITIONAL CALLS, THE CONTRACT WOULD BE MODIFIED ACCORDINGLY. YOU HAVE ESTIMATED THAT THE PROFIT ON A SINGLE CALL WOULD HAVE BEEN ABOUT $1,600 AND, BY VIRTUE OF THE FACT THAT THE CONTRACT WAS AWARDED TO ANOTHER FIRM, YOU EXPRESS THE OPINION THAT THE GOVERNMENT IS LIABLE TO YOUR COMPANY IN AN AMOUNT NOT LESS THAN $1,600 NOR MORE THAN $144,000 (90 TIMES $1,600).

OBVIOUSLY, YOU DID NOT INTEND TO PERFORM ALL WORK WHICH MIGHT HAVE BEEN ORDERED BY THE GOVERNMENT AT A LUMP-SUM PRICE OF $2,000 AND WE FIND NOTHING IN THE INVITATION TO SUGGEST THAT NEGOTIATIONS WITH THE SUCCESSFUL BIDDER WOULD BE UNDERTAKEN TO AGREE UPON PRICES FOR ADDITIONAL CALLS AFTER THE INITIAL CALL HAD BEEN MADE. THE GOVERNMENT FURNISHED ESTIMATES OF THE QUANTITIES OF WORK AND THE INVITATION REQUIRED ALL BIDS TO BE SUBMITTED ON AN ALL OR NONE BASIS. FURTHERMORE, THE INVITATION SPECIFICALLY PROVIDED THAT EACH CALL WOULD COVER A MINIMUM OF ONE BUILDING AND A MAXIMUM OF 10 BUILDINGS AND, AT THE UNIT PRICES QUOTED IN YOUR BID, THE INITIAL CALL WOULD HAVE INVOLVED THE PAYMENT OF NOT LESS THAN $6,000 AND A MAXIMUM PAYMENT OF $60,000.

CONTRARY TO YOUR SUGGESTION, IT IS OUR OPINION THAT THE INVITATION DID NOT IN ANY WAY PLACE THE RESPONSIBILITY UPON BIDDERS TO ESTIMATE THE GOVERNMENT'S REQUIREMENTS AND IT WAS INTENDED THAT THE ESTIMATED ANNUAL AGGREGATE TOTAL, REFERRED TO IN SCHEDULE C, SHOULD REPRESENT NO MORE THANA SIMPLE ADDITION OF THE EXTENDED TOTAL PRICES SHOWN BY A BIDDER FOR THE SIX ITEMS, WHICH WOULD BE SUBJECT TO MODIFICATION OR CHANGE ONLY IN THE EVENT THAT OBVIOUS ERRORS OCCURRED IN EXTENDING THE UNIT PRICES. THIS VIEW OF THE MATTER IS SUPPORTED BY THE STATEMENT IN THE INVITATION THAT "THE AWARD OF THIS CONTRACT WILL BE BASED UPON THE ESTIMATED ANNUAL AGGREGATE TOTAL PRICE FOR ALL WORK OUTLINED IN SCHEDULE C.'

IT IS CLEAR THAT THE AWARD WAS TO BE BASED UPON THE GOVERNMENT'S ESTIMATES AS TO THE QUANTITIES OF WORK TO BE PERFORMED AND THAT YOUR BID WAS PROPERLY CONSIDERED TO BE IN THE AGGREGATE AMOUNT OF $180,000, INSTEAD OF $2,000, FOR THE PURPOSE OF COMPARISON WITH THE OTHER BIDS IN THE MAKING OF THE AWARD. IT HAS BEEN NOTED, IN THIS CONNECTION, THAT YOU MAY HAVE INTENDED TO CIRCUMVENT THE BID GUARANTY REQUIREMENT BY INSERTING THE FIGURE $2,000 IN THE SPACE PROVIDED FOR "ESTIMATED ANNUAL AGGREGATE TOTAL" IN THE TOTAL PRICE COLUMN OF SCHEDULE C. WE BELIEVE THAT YOUR BID SHOULD HAVE BEEN REJECTED, NOT ONLY FOR THE REASON THAT IT WAS NOT IN FACT THE LOWEST BID RECEIVED IN RESPONSE TO THE INVITATION, BUT ALSO BECAUSE IT WAS NOT ACCOMPANIED WITH A BID BOND OR OTHER ACCEPTABLE BID GUARANTY.

ACCORDINGLY, YOU ARE ADVISED THAT WE PERCEIVE NO LEGAL BASIS FOR THE PAYMENT OF ANY CLAIM OF YOUR COMPANY ARISING OUT OF ITS FAILURE TO OBTAIN THE AWARD OF A CONTRACT UNDER THE PARTICULAR INVITATION FOR BIDS.

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