Bidder beware. Interpreting federal law can sometimes feel like solving a riddle. For example, when is an early bid late?
In the case, In re Sea Box, Inc., the Government Accountability Office (GAO) determined that a bid received by government servers eight minutes before the deadline was late because it did not arrive in the Contract Officer’s inbox until shortly after the deadline. To be clear, it did not matter when the bid was received by government servers, nor did it matter that the bid was fully in the control of the government once it was submitted.
Instead, the case turned on the interpretation of a Federal Acquisition Regulation (FAR 52.215-1) that was incorporated into the bid by reference. That FAR specified that any bid received at the designated office after exact time specified was late unless it was received before the award is made, accepting it would not cause delay, and it satisfied one of three conditions:
1.If it was transmitted through an electronic commerce method authorized by the solicitation, it was received at the initial point of entry to the Government infrastructure not later than 5 p.m. one working day prior to the date specified for receipt of proposals; or
2.There is acceptable evidence to establish that it was received at the Government installation designated for receipt of offers and was under the Government’s control prior to the time set for receipt of offers; or
3.It is the only proposal received.
Sea Box argued that option (2) should apply because once it electronically submitted its bid, it was under the Government’s control. The GAO, however, determined that if it accepted this interpretation, then option (1), requiring electronic submissions to be received by 5 p.m. the day before, would become meaningless. In the end, the GAO decided that Sea Box’s early bid was late. Doubtless, this FAR and others like it are outdated and do not reflect how modern business is done. It makes little sense to set a deadline that a bidder has no ability to control, other than to submit its bid a day or days in advance. Furthermore, electronic submissions are not only the exclusive means used by bidders, but servers are also much faster than when these FARs were originally drafted. Finally, there’s no question that government is overpaying on many projects by automatically rejecting lower bids by some accident of how long it takes a submission to wend its way through its servers. These arguments, however, should be directed at our elected officials rather than the GAO.
Accordingly, if you are a bidding on a federal solicitation, be sure to check whether electronic submissions must be submitted by 5 p.m. the previous business day and ensure that your subcontractors and suppliers get their bids to you far enough in advance that you can meet the deadline before the deadline.
Bern M. Velaso is an attorney with Mesch Clark Rothschild. The firm’s construction attorneys are here to assist owners, contractors, subcontractors, and suppliers at every stage from contract negotiation through litigation. We represent clients before the GAO, state and federal courts, and the ROC. We are also seasoned mediators and arbiters. Call our office in Tucson at (520) 624-8886.