B-166840, MAY 19, 1969

B-166840, MAY 19, 1969

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER 0211E:RSL:WH, DATED MAY 2, 1969, WITH ATTACHMENTS, FROM THE COUNSEL, NAVAL FACILITIES ENGINEERING COMMAND, FORWARDING FOR OUR CONSIDERATION A PROTEST BY THE PHOENIX GENERAL CONSTRUCTION COMPANY OF THE PROPOSED AWARD OF A CONTRACT UNDER FORMALLY ADVERTISED SPECIFICATION 08-69-0030 BY THE GULF DIVISION, NAVAL SUPPORT ACTIVITY, NEW ORLEANS, LOUISIANA.

THE SPECIFICATION, DATED DECEMBER 23, 1968, SOLICITED BIDS FOR THE CONVERSION OF EXISTING RECIPROCATING ENGINE TEST CELLS 2, 3 AND 4, AND TWO CONTROL ROOMS, TO TURBINE ENGINE TEST CAPABILITY AT THE U.S. NAVAL AIR STATION, CORPUS CHRISTI, TEXAS. AS ISSUED, THE SPECIFICATION COMPLETELY OUTLINED ALL OF THE WORK TO BE PERFORMED THEREUNDER AND, AT SECTION 1B.3, IN PART, ENTITLED "BASE BID ITEM," ADVISED PROSPECTIVE BIDDERS TO SUBMIT (ON STANDARD FORM 21, BID FORM, DECEMBER 1965 EDITION) A "PRICE FOR THE ENTIRE WORK, COMPLETE IN ACCORDANCE WITH THE DRAWINGS AND SPECIFICATIONS.' THE SPECIFICATION WAS SUBSEQUENTLY AMENDED FIVE TIMES; HOWEVER, THE PROTEST AND, THEREFORE, OUR DISCUSSION, ARE DIRECTED ONLY TO THE PROVISIONS OF AMENDMENT 2 WHICH REVISED THOSE PORTIONS OF SECTION 1B.3, REFERRED TO ABOVE. AMENDMENT 2 PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"1B.3 ITEM OF BIDS.

DELETE THE BASE BID ITEM PARAGRAPH AND SUBSTITUTE THE FOLLOWING BASE BID ITEM, AND ADDITIVE BID ITEM PARAGRAPHS IN PLACE THEREOF:

-BASE BID ITEM. PRICE FOR THE ENTIRE WORK, COMPLETE IN ACCORDANCE WITH THE DRAWINGS AND SPECIFICATIONS BASED ON THE OMISSION OF ALL WORK SPECIFIED UNDER ADDITIVE BID ITEMS 1, 2 AND 3.

ADDITIVE BID ITEM 1. PRICE FOR ALL WORK SPECIFIED IN SECTIONS 11A AND 11B OF THE SPECIFICATIONS AS PERTAINS TO TEST CELL NO. 2B.

ADDITIVE BID ITEM 2. PRICE FOR ALL WORK SPECIFIED IN SECTION 110 OF THE SPECIFICATIONS AS PERTAINS TO TEST CELL NO. 2B.

ADDITIVE BID ITEM 3. PRICE FOR ALL WORK SPECIFIED IN SECTION 11D OF THE SPECIFICATIONS AS PERTAINS TO TEST CELL NO. 2B.-" ATTACHED TO AMENDMENT 2 WAS A SPECIAL BID SHEET LISTING ADDITIVE BID ITEMS 1 THROUGH 3 AND PROVIDING BLANK SPACES FOR BID PRICES OPPOSITE EACH ADDITIVE ITEM.

THE RECORD SHOWS THAT SEVEN BIDS WERE RECEIVED UNDER THE SPECIFICATION AND THAT THE BID OF FIRE DETECTION SERVICE, INC. (FDS) WAS THE LOWEST ON THE BASE BID. HOWEVER, EVEN THOUGH FDS ACKNOWLEDGED RECEIPT OF ALL OF THE AMENDMENTS IN THE PROPER MANNER ON STANDARD FORM 21, IT FAILED TO INCLUDE WITH ITS BID THE SPECIAL BID SHEET. BY TELEGRAMS DATED APRIL 16 AND 17, 1969, FDS STATED THAT BECAUSE IT HAD ACKNOWLEDGED RECEIPT OF ALL OF THE AMENDMENTS (INCLUDING AMENDMENT 2) IT IS THE LOW RESPONSIVE BIDDER. SUCH, FDS HAS OFFERED TO PERFORM ALL OF THE WORK ON THE THREE ADDITIVE ITEMS CALLED OUT IN AMENDMENT 2 AT NO ADDITIONAL COST TO THE GOVERNMENT.

ON APRIL 24, 1969, PHOENIX GENERAL CONSTRUCTION CO., INC., THE SECOND LOW BIDDER ON THE BASE BID, AND THE LOWEST EVALUATED BIDDER ON THE 3 ADDITIVE ITEMS, PROTESTED ANY AWARD OF A CONTRACT TO FDS ON THE GROUND THAT FDS' BID WAS NONRESPONSIVE TO THE SPECIFICATION BY REASON OF ITS FAILURE TO QUOTE PRICES ON THE THREE ADDITIVE ITEMS.

THE MAY 2 REPORT RECOMMENDS THAT THE FDS' BID BE CONSIDERED AS FULLY RESPONSIVE TO THE BASE BID ITEM AND THAT THE PROCURING ACTIVITY BE PERMITTED TO MAKE AN IMMEDIATE AWARD OF A CONTRACT TO FDS FOR THE BASE BID ITEM AND ALL OF THE ADDITIVE ITEMS IN ACCORDANCE WITH FDS' TELEGRAMS OF APRIL 16 AND 17. IN ADDITION, THE REPORT STATES THAT ANY OTHER CONCLUSION WOULD RESULT IN A "MANIPULATION OF THE COST FIGURE TO PICK THE SUCCESSFUL BIDDER," WHICH IS PROSCRIBED BY THE ADDITIVE OR DEDUCTIVE BID ITEMS CLAUSE OF PARAGRAPH 2-201 (C) (XII) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) TO THE DETRIMENT OF THE INTEGRITY OF THE BIDDING SYSTEM. HOWEVER, IT IS STATED THAT SUCH CLAUSE WAS NOT INCLUDED IN THE INVITATION.

WHILE WE BELIEVE THAT THE FAILURE OF FDS TO ENTER A BID IN COMPLIANCE WITH ALL OF THE TERMS AND CONDITIONS OF THE SPECIFICATION AS AMENDED WAS AN INADVERTENCE, THE FACT REMAINS THAT IF ITS INTENT IS TO PERFORM ALL THE WORK DESCRIBED IN THE ADDITIVE ITEMS AT ITS BASE BID PRICE, SUCH INTENT IS NOT EVIDENCED BY ITS BID AS SUBMITTED. IN THIS RESPECT, SEE 38 COMP. GEN. 372, WHEREIN WE STATED THAT "WHERE THE ERROR IS ONE OF A FAILURE TO QUOTE A PRICE, SUCH AS MAY BE CONSIDERED TO BE INVOLVED IN THE INSTANT CASE, THE BID NORMALLY WOULD BE FOR REJECTION AS NOT BEING RESPONSIVE TO THE INVITATION.' WE ARE AWARE OF THE FACT THAT PROSPECTIVE BIDDERS WERE NOT SPECIFICALLY ADVISED IN THE SPECIFICATION THAT A SINGLE AWARD WOULD BE MADE. HOWEVER, IT IS CLEAR FROM THE NATURE OF THE PROCUREMENT AND THE FORMAT OF THE SPECIFICATION THAT SUCH WAS THE INTENTION OF THE PROCURING ACTIVITY, AND THE RECORD SHOWS THAT ALL OF THE OTHER RESPONDING BIDDERS UNDERSTOOD THE NECESSITY FOR SUBMITTING SEPARATE PRICES FOR THE THREE ADDITIVE ITEMS PROVIDED FOR IN AMENDMENT 2. IN FACT, BY LETTER DATED APRIL 8, 1969, THE SAME DAY AS BID OPENING BUT SUBSEQUENT THERETO, FDS FORMALLY ADVISED THE CONTRACTING OFFICER THAT IT HAD BID ON THE THREE ADDITIVE ITEMS BUT IT APPEARS THAT THAT PART OF FDS' BID WAS NEVER RECEIVED BY THE PROCURING ACTIVITY. ATTACHED TO FDS' LETTER OF APRIL 8 IS A COPY OF ITS ADDITIVE ITEM BID SHEET INDICATING BID PRICES FOR THE THREE ADDITIVE ITEMS VIZ., IN THE AMOUNTS OF $83,000, $11,000, AND $23,000, RESPECTIVELY.

SINCE THE FDS BID DID NOT COMPLY WITH THE ADVERTISED REQUIREMENTS OF THE SPECIFICATION IN THAT IT FAILED TO INCLUDE BID PRICES FOR THE THREE ADDITIVE ITEMS SET FORTH IN AMENDMENT 2, WE MUST CONCLUDE THAT THE FDS BID WAS NOT RESPONSIVE TO THE ADVERTISED REQUIREMENTS AND THAT SUCH FAILURE TO BID MAY NOT BE CURED AFTER BID OPENING. IN REACHING THIS CONCLUSION, WE HAVE CONSIDERED THOSE CASES WHEREIN WE HAVE ACKNOWLEDGED THE PROPRIETY OF AN AWARD TO A BIDDER WHO BID ON THE BASE ITEM BUT FAILED TO RESPOND TO ONE OR MORE OF THE ADDITIVES. HOWEVER, IN THOSE CASES THE PROCURING AGENCY DETERMINED NOT TO MAKE AN AWARD COVERING THE ITEM/S) OMITTED FROM THE SUCCESSFUL BID. SEE, FOR EXAMPLE B-136578, SEPTEMBER 17, 1958. WE HELD IN THAT CASE, IN PART, THAT:

"THERE IS NO REQUIREMENT THAT A BIDDER QUOTE ON ANY OR ALL ADDITIVE ALTERNATES SET FORTH IN AN INVITATION TO RENDER ITS BID RESPONSIVE. HOWEVER, A BIDDER BY FAILING TO PROPERLY RESPOND TO ALTERNATES DOES RUN THE RISK THAT SHOULD THE GOVERNMENT ELECT TO ACCEPT AN ALTERNATE NOT PROPERLY BID UPON HIS BID WOULD THEN BE UNRESPONSIVE.'

SINCE IT IS REPORTED THAT THE PROCURING ACTIVITY STILL NEEDS, AND FULLY INTENDS TO AWARD A CONTRACT TO ONE BIDDER FOR THE BASE ITEM AND AS MANY OF THE ADDITIVES AS FUNDING WILL PERMIT, FDS, WHICH FAILED TO INDICATE IN ITS BID ANY INTENTION TO PERFORM THE ADDITIVE REQUIREMENTS AT ITS BASE ITEM PRICE, MAY NOT PROPERLY BE CONSIDERED AS ELIGIBLE FOR AN AWARD. WHILE A SAVINGS TO THE GOVERNMENT COULD BE EFFECTED BY ACCEPTANCE OF THE FDS BID, WE HAVE CONSISTENTLY HELD THAT IT IS MORE IN THE PUBLIC INTEREST TO COMPLY WITH THE ESTABLISHED PROCEDURES FOR PROTESTING AND PRESERVING THE COMPETITIVE BIDDING SYSTEM THAN TO OBTAIN A PECUNIARY ADVANTAGE IN ANY ONE PARTICULAR CASE. 41 COMP. GEN. 412.

FURTHER, THE STATEMENT IN THE MAY 2 REPORT THAT AN AWARD TO ANY BIDDER OTHER THAN FDS WOULD BE IN VIOLATION OF THE PROVISIONS OF ASPR 2-210 (C) (XII) IS NOT PERSUASIVE BECAUSE, IN ANY EVENT, SOME AMOUNT WILL HAVE TO BE ADDED TO THE ADMINISTRATIVE CONTROL COST FIGURE ($677,250) IN ORDER TO MAKE ANY AWARD UNDER THE SPECIFICATION. UNDER THE REPORTED FACTS, AN EVALUATION OF THE ADDITIVE ITEMS BEGINNING WITH THE LOWEST RESPONSIVE BASE BID SUBMITTED BY PHOENIX GENERAL CONSTRUCTION COMPANY, AND A RESULTING INCREASE OF THE CONTROL COST FIGURE TO MEET THE AWARDED CONTRACT PRICE, COULD NOT CONCEIVABLY PREJUDICE ANY OTHER BIDDER INASMUCH AS THE ONLY BIDDER WHICH COULD BE DISPLACED BY SUCH ACTION IS FDS, WHICH FOR THE REASONS STATED ABOVE, IS NOT ELIGIBLE FOR AWARD.