from the precedents offered by the decisions and opinions of the courts, the Attorney General, and the Comptroller General under Revised Statutes 3709. In general, the bid procedures approved under the more restrictive language of the earlier statute would be permissible under the more liberal language of the present law. It is to be noted that R. S. 3709 remains in effect with respect to practically all of the Departments of the Government other than the Armed Services.

For purposes of discussion this chapter is divided into the following parts:

1. Introduction.

2. Solicitation of bids.

3. Submission of bids.

4. Opening and recording of bids.

5. Waiver of minor informalities or irregularities in bids.

6. Rejection of bids.

7. Mistakes in bids.

8. Award.

SOLICITATION OF BIDS

Revised Statutes 3709 provides for—“advertising a sufficient time previously for proposals." Section 3 (a) of the Armed Services Procurement Act provides that whenever advertising is required—

"The advertisement for bids shall be a sufficient time previous to the purchase or contract, and specifications and invitations for bids shall permit such full and free competition as is consistent with the procurement of types of supplies and services necessary to meet the requirements of the agency concerned." It is apparent from the above quoted provisions that neither Section 3709 of the Revised Statutes nor the new Act prescribes the exact procedure to be followed or the forms to be used in advertising for bids.

It has been repeatedly held, under R. S. 3709, that the selection of a particular method of advertising is left by law to the discretion of the Department advertising. The method required to be used by the Navy in all cases is that of displaying a copy of the invitation for bids in the purchasing office or other appro

115 Op. Atty. Gen. 226; 21 Op. Atty Gen. 595; 3 Comp. Dec. 175.

224 Comp. Gen. 481.

44 U. S. Code 324; 5 U. S. Code 22a.

422 Comp. Gen. 817.

priate public place and of mailing or delivering invitations for bids to a representative selection of prospective bidders. This procedure has been approved by the Comptroller General.2 In the use of this method, the issuing activity provides the prospective bidders with the following bid forms: Invitation for Bids, Bid, Schedule, and General Provisions. These forms and the award form are set forth in the appendix to this chapter, with the exception of the General Provisions (Standard Contract Clauses) which are discussed in chapter 9 of this course.

The contract with the successful bidder consists of the invitation for bids, the bid, and the award. The Navy has discontinued its prewar practice of formalizing the agreement in a two-party contract after the issuance of an award.

Paid advertisements in newspapers are seldom used by the Navy for the solicitation of bids, and when this method is used, the invitation for bids must also be mailed or delivered to prospective bidders and displayed at the purchasing office or at some other appropriate public place. A brief announcement of any proposed purchase may be made available to newspapers and trade journals for free publication. When the use of paid newspaper advertisements is deemed necessary to secure full competition, written authority must be secured in advance from the Secretary of the Department or from his duly authorized representative.3 The forms and the detailed procedure for paid newspaper advertising are prescribed in General Regulation No. 109-Revised, issued 17 January 1949 by the Comptroller General.

Oral solicitation of bids has been authorized by the Comptroller General under R. S. 3709 where reasonable publicity was given and all available competition was obtained. While oral solicitation would be authorized under the new Act, the Armed Services Procurement Regulation (generally referred to as ASPR) requires that each prospective bidder actually receive the forms used in the solicitation of bids. Telegraphic solicitation of bids is not authorized by the Armed Services Procurement Regulation.

The solicitation must be made sufficiently in advance of the opening of bids to allow prospective bidders a reasonable time within which to prepare and submit their bids. What is a

sufficient time depends, of course, on the particular circumstances of each case.

In the cases discussed below, the advertisement was found by the Comptroller General to be inadequate to insure full and free competition because of (1) the method adopted, (2) the fact that insufficient time was allowed bidders, or (3) the invitation having been sent to an insufficient number of prospective bidders.

An invitation to bid on the purchase of three copies of a book was sent to only one dealer, and a notice was posted in a public place. It was held that this was not a sufficient compliance with R. S. 3709.5

An invitation to bid on a contract to supply two automobiles was readvertised. On the readvertisement, invitations were sent by telegram, 48 hours before the opening, to only four bidders who had responded to the original solicitation. Only one bid was received. The Comptroller General held that this was an insufficient advertisement, with respect to the inadequate number of prospective bidders solicited as well as the inadequate time afforded the bidders."

Bids on a contract in connection with the landscaping of public grounds were solicited by advertisement in The Washington Post and by posting a notice in a room set apart for contractors' representatives in the purchasing office. The contract had previously been advertised three times. There was no mailing to prospective bidders, not even to those who had bid before. After ruling that this did not constitute a sufficient advertisement, the Comptroller General recommended that, on readvertisement, notices should be sent to bidders who submitted bids in response to the original invitation and to other prospective bidders as well." Invitations to prospective bidders may not impose conditions or restrictions which tend to limit competition unless required by statute or otherwise permitted in the public interest. For example, the Comptroller General has held that

1 Comp. Gen. 232.

16 Comp. Gen. 485.

14 Comp. Gen. 364.

17 Comp. Gen. 37.

8 Comp. Gen. 252.

19 R. S. 3719, 34 U. S. Code 562, repealed by Sec. 11(a) of the Armed Services Procurement Act.

118 Comp. Gen. 310.

there was no authority to include in the invitation a requirement of compliance with the National Labor Relations Act, there being no statute that requires compliance with the Act as a condition of doing business with the Government.s

Cases involving restrictions in the invitation relating to a bidder's qualification to do the work or to furnish the supplies are discussed below under the part on Award, as also is the question of the use and propriety of debarred bidders lists. However, it may be noted that for projects of a special nature, such as the construction of a building, the invitation may properly state certain minimum qualifications which a bidder must possess in order to be considered in making the award, although a showing of such qualifications may not be made a condition of his right to submit a bid. The Armed Services Procurement Regulation provides that all supplies (other than those procured from other Government agencies) must be procured from manufacturers or regular dealers. A restriction to this effect may properly be imposed in invitations for supplies.

Contracting Officers in the Navy are now authorized, in their discretion, to require (by the terms of the invitation) bid and performance bonds. Prior to the enactment of the Armed Service Procurement Act, the requirement of furnishing a performance bond was mandatory.10 While the bidder may properly be required to submit a bid bond with his bid, he may not be required to submit a performance bond with the bid.11 One of the conditions of the bid bond is that the bidder will furnish a performance bond if awarded the contract. Therefore, in cases where a performance bond is deemed necessary, the performance bond should be required to be furnished at the time of the award.

Navy Specifications, Federal Specifications (prepared by the Director of the Bureau of Federal Supply, Treasury Department), and specifications prescribed by the Munitions Board are used in invitations to bid issued by the Navy.

As a general rule, the specifications must define the product being procured in terms sufficiently definite to assure that every bid made in compliance therewith will be for substan

tially the same product. This is necessary to enable all bidders to compete on a common basis and to assure the Government the lowest price obtainable.12

Specifications should be drawn with regard to the actual needs of the Service, and should not reflect the preference of a Purchasing or Contracting Officer for a particular make of article.13 Nor should they be drawn to favor the product of one manufacturer or group of manufacturers.14 Only if it is essential in order to provide a clear description should the product be described as that of a particular manufacturer, and in such case the words "or equal" should be added.15

Any unreasonable requirements should be exIcluded. An invitation to bid on a contract for nation-wide stenographic services required that the contractor should agree to supply a stenographer on thirty minutes' notice anywhere in the United States. While such availability may have been desirable, it is not surprising that this requirement was so manifestly impossible of performance that it shocked the protesting bidders as well as the Comptroller General.16

It is not proper to request in the invitation that prospective bidders draft their own specifications without any standard as their guide, because such a procedure affords no basis on which to evaluate the bids.17

SUBMISSION OF BIDS

The authority to invite bids implies an authority to prescribe reasonable terms and conditions. 18 Where bids are invited and directions issued as to how they should be made and what they should contain, it is necessary that such rules and instructions be carefully observed by the bidder. Such rules and instructions are for the benefit of the United States and may be

12 38 Op. Atty. Gen. 555; 11 Comp. Gen. 220.

13 16 Comp. Gen. 318; 13 Comp. Gen. 284; 9 Comp. Gen. 519.

14 United States v. Brookridge Farm, 111 F. (2d) 461 (C.C.A. 10th, 1940); 16 Comp. Gen. 38; 15 Comp. Gen. 1119.

15 13 Comp. Gen. 357; 10 Comp. Gen. 555.

18 14 Comp. Gen. 667.

17 10 Comp. Gen. 480.

18 13 Op. Atty. Gen. 510.

19 22 Op. Atty. Gen. 45.

20 22 Comp. Gen. 817.

waived only when in the interest of the Government and not prejudicial to the other bidders.

The questions considered in this part, with respect to the submission of bids, are the method of submission, the submission of alternative bids, the time of submission, and the time for modification or withdrawal of bids. The "Waiver of Minor Informalities or Irregularities in Bids" and the "Rejection of Bids" not conforming to the requirements of the invitation for bids are discussed under those headings.

The method of submitting bids is prescribed by the terms of the invitation, including the instructions to bidders. Formerly, these instructions were issued on a separate form which did not in all cases accompany the invitation. The instructions to bidders are now made a part of the invitation. Telegraphic bids may be submitted and received only if permitted by the terms of the invitation.19 Oral solicitation and verbal quotation have been held to be permissible under R. S. 3709 if it is otherwise impracticable to obtain written quotations.20 However, this procedure is not permitted by the Armed Services Procurement Regülation. According to Navy procedures and instructions to bidders, bids are submitted in duplicate on the form of bid issued with the invitation. The bids are submitted in sealed envelopes, usually by mail. A bid submitted in letter form incorporating by reference all of the provisions of the invitation, general provisions and the bid form, and setting forth the required information as to price and delivery terms, can legally be considered, although such a procedure is certainly not desirable and is not suitable for processing of bids in an orderly manner. However, in such a case the bidder should complete the required forms prior to award.

Alternative bids are not authorized, and an award cannot be made on an alternative bid unless permitted by the terms of the invitation. In an invitation to bid on ballast cars for the Alaskan Railway, a bidder submitted one bid conforming to the specifications and another based on improved specifications with a lower price. It was held that the latter bid could not be accepted; but since it appeared that the Government's needs would be better met by the

improved specifications, the Comptroller General stated that all bids should be rejected and the contract readvertised with the improved specifications.21

A bidder submitted an alternative bid offering to reduce the price quoted in his other bid if he was also awarded another contract. It was held that this offer must be disregarded as being unfair to the other bidders.22 Where, however, a bidder is low on both bids, one of which meets the specifications and the other provides for a different specification, the alternative bid may be accepted.23

It is the responsibility of the bidder to see that his bid reaches the designated office before the time fixed for opening of bids. The Armed Services Procurement Regulation provides that bids received after the time fixed for opening are late bids. Such late bids may be considered provided they are received before the award has been made and provided the failure to arrive on time was due solely to a delay in the mails for which the bidder was not responsible. The Attorney General has held that this procedure is legal.2+

In order to prevent fraud and to preserve integrity in the competitive bid system, bids received after the hour of opening must be examined carefully to insure that no one is permitted to bid after having received knowledge of the terms of other bids. In one case à crafty bidder had contrived, with a messenger boy for a telegraphic service, the following procedure: while other bids were being opened, this bidder kept walking up and down the hallway in front of the bid room exclaiming, "Where could that messenger boy be with my bid?" Finally, the messenger boy arrived and gave an envelope to the bidder who handed it to the Contracting Officer. This bid was the low bid. Having become suspicious of the actions of this bidder, the Contracting Officer interrogated the messenger boy, who confessed that

21 11 Comp. Gen. 264.

228 Comp. Gen. 663. 23 15 Comp. Gen. 354.

24 21 Op. Atty. Gen. 546.

25 Purcell Envelope Co. v. United States, 249 U. S. 313 (1919); Levenson v. United States, 258 U. S. 198 (1922); 20 Comp. Gen. 530.

26 24 Comp. Gen. 350.

21 Haldane v. United States, 69 Fed 819 (C.C.A. 8th, 1895); Scott v. United States, 44 Ct. Cl. 524 (1909); 17 Comp. Gen. 388.

the delivery by him of one of two envelopes depended upon a prearranged hand signal. Thus, the Contracting Officer frustrated the bidder's attempt to secure an unfair advantage over other bidders by the use of this "one if by land, two if by sea" system of signalling.

A late bid cannot be considered after award. This is necessarily so since the award is the acceptance of the offer and results in a contract binding on both the Government and the bidder.25

Bids may be modified or withdrawn, at any time prior to the time fixed for opening, by written or telegraphic notice received prior to the time fixed for opening. As in the case of late bids, a modification or withdrawal of a bid, if sent before the time set for opening, even though not received until afterwards, may be given effect if (1) the bidder is not responsible for the delay in transmission, and (2) it is clearly shown that the bid was not submitted with knowledge of the terms of other bids.20 A bid may, however, be modified after the opening of bids when the modification is in the interests of the Government and is not prejudicial to other bidders. For example, where the low bidder offers to reduce his price the modification may be accepted. Since the low bidder was already entitled to the award, obviously no valid complaint could be made by other bidders.

In the case of private contracts, an offer not supported by legal consideration, may be withdrawn or modified if the withdrawal or modification is received before the acceptance is mailed. However, between the opening and the award, the United States is allowed the time for acceptance set forth in the bid, or if none is stated, it is allowed a reasonable time after opening in which to accept or reject the bid, and during that period, a bid may not generally be withdrawn or modified." The reason for this rule is stated in Scott v. United States, 44 Ct. Cl. 524 (1909) as follows:

"The agents of the Government stand upon a different footing from private individuals in the matter of advertising for the letting of contracts in behalf of the United States. They have no discretion. They must accept the lowest or the highest responsible bid, or reject all and readvertise. Private individuls are not required thus to act. Hence it is apparent that gov ernment agents should be allowed a reasonable time after the opening of bids before they are allowed to be withdrawn, so

they can be afforded opportunities to ascertain whether collusion or fraud had been perpetrated against the United States by the parties engaged in the bidding. It is also apparent that if the rule of allowing immediate withdrawals after the results of the bidding are made known, frauds innumerable could be perpetrated against the United States, and thus public justice would be greatly hampered."

OPENING AND RECORDING OF BIDS

Section 3 (b) of the Procurement Act provides:

"All bids shall be publicly opened at the time and place stated in the advertisement."

With respect to this provision of the Act the Senate Report states:

"This section establishes broad standards for advertising. The committee is of the opinion that it is both unnecessary and unwise to prescribe detailed and restrictive requirements as to... (4) who may and how many must be present at the opening of bids. These are matters which may appropriately be left to the services to deal with by regulation.”

Section 11 (a) of the Armed Services Procurement Act specifically repeals two earlier statutes pertaining to the opening and recording of bids: R. S. 3718 (34 U. S. Code 561) requiring, among other things, the presence of at least two witnesses at the opening of bids on Navy purchases; and R. S. 3720 (34 U. S. Code 563) requiring, among other things, that all proposals for naval supplies shall be preserved and recorded.

The Armed Services Procurement Regulation provides that all bids received prior to the opening will be kept secure and unopened until the time of the opening, whereupon the bids shall be publicly opened and read aloud by a Government official. An unidentified bid may be opened solely for purposes of identification. However, the Armed Services Procurement Regulation requires that in such case the bid shall be resealed immediately and that no information obtained from the bid shall be disclosed.

In a case under R. S. 3709, the Attorney General said that the designation of 2 o'clock for the opening of all proposals means only that such proposals shall not be opened before 2 o'clock, and does not preclude consideration of a bid received by mail shortly after 2 o'clock provided it is certain that the later bid was not

28 21 Op. Atty. Gen. 546.

29 15 Comp. Gen. 354.

30 8 Comp. Gen. 52.

prepared and submitted with knowledge of the terms of other bids. In this case the bid was mailed in time to reach the purchasing office in the usual course of the mails prior to the hour of opening.28

Although the Contracting Officer should not permit a bid to pass out of the hands of an official of the Government (except, as provided in the Armed Services Procurement Regulation, when a duplicate bid cannot be made available for public inspection, and then only under the immediate supervision of a Government official and under proper safeguarding conditions), nevertheless a bid which was erroneously returned unopened to a bidder at the time of the opening could be taken back and considered when there was no possibility of prejudice to the other bidders. In this case it appeared that the bidder had not left the bid room and could not have changed his bid.29

Oral instructions to bidders are objectionable. In one case bidders were only advised orally at the time of opening that the time of delivery was to be an important factor in awarding the contract. A higher bidder had provided for delivery in 21 days as opposed to 60 days provided for by the low bidder. The Comptroller General held that the oral instructions were objectionable and that the instruction should have been given to the bidders in the written invitation.30

The present statutory requirement as to opening, quoted above, is silent on the question of recording. Nevertheless, the Armed Services Procurement Regulation expressly provides as follows with respect to recording of bids:

"The names of the bidders and the prices bid shall be entered in an abstract or record which shall be available for public inspection. When the items are too numerous to warrant the recording of all bids completely, an entry shall be made of the opening date, invitation number, general description of the material, lot number, and total bid price. As soon as all bids have been opened and read, the official in charge shall make the certification in the record in accordance with procedures prescribed by each respective Department."

In passing, it may be of interest to outline the procedure now employed by the Bureau of Supplies and Accounts with respect to opening and recording of bids.

This Bureau is charged with the responsibility of issuing, opening and recording all in