B-162096, OCT. 9, 1967

B-162096, OCT. 9, 1967

BIDS - DEVIATIONS - DELIVERY PROVISIONS DECISION TO ROTARY MACHINE CO. INC. PROTESTING REJECTION OF LOW BID OF SUBSIDIARY, BENJAMIN REEL PRODUCTS, INC. BY SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE FOR STATIC DISCHARGE REELS AND CABLE. LOW BIDDER WHO, IN RESPONSE TO AN URGENT PROCUREMENT REQUIRING FIRST ARTICLE TEST REPORT 180 DAYS FROM DATE OF CONTRACT, SUBMITTED BID WITH FOOTNOTE INDICATING 210 DAYS FOR PRODUCTION AND TESTING REPORT HAD BID PROPERLY REJECTED AS CONTAINING A MATERIAL DEVIATION FROM THE DELIVERY REQUIREMENTS. A LOW BIDDER WHOSE PRICE WAS 27 PERCENT LOWER THAN THAT OF SUCCESSFUL BIDDER WHO DID NOT DEVIATE FROM DELIVERY REQUIREMENTS MAY NOT HAVE FACT OF LOW PRICE REGARDED AS OFFSETTING DELIVERY DEVIATION SINCE ACCEPTANCE OF LOW BID OFFERING DELIVERY LATER THAN SPECIFIED IS CONTRARY TO LAWS OF FORMAL ADVERTISING.

TO ROTARY MACHINE COMPANY, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF JULY 18, 1967, WITH ENCLOSURES, PROTESTING AGAINST THE REJECTION OF THE LOW BID SUBMITTED BY YOUR SUBSIDIARY, BENJAMIN REEL PRODUCTS, INC. (BRP), IN RESPONSE TO INVITATION FOR BIDS NO. F41608-67-B-1833, AND THE SUBSEQUENT AWARD OF A CONTRACT THEREUNDER TO THE SECOND LOWEST BIDDER. BRP'S LOW BID WAS REJECTED BY THE CONTRACTING OFFICER AS NONRESPONSIVE SINCE IT SPECIFICALLY DEVIATED FROM THE INVITATION REQUIREMENT FOR DELIVERY OF THE FIRST ARTICLE TEST REPORT 180 DAYS FROM THE DATE OF THE CONTRACT.

THE INVITATION, ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS, DEPARTMENT OF THE AIR FORCE, ON MARCH 30, 1967, SOLICITED BIDS FOR THE PROCUREMENT OF 7,199 STATIC DISCHARGE REELS WITH ACCOMPANYING CABLES TO BE MANUFACTURED IN ACCORDANCE WITH SPECIFICATION MIL-R-38489, DECEMBER 27, 1966. THE INVITATION ALSO PROVIDED FOR THE OPTIONAL PURCHASE OF ADDITIONAL INCREMENTAL UNITS.

THE REQUIREMENT FOR FURNISHING THE FIRST ARTICLE TEST REPORT WITHIN 180 DAYS FROM DATE OF THE CONTRACT WAS SPECIFICALLY SET OUT IN TWO PROVISIONS OF THE INVITATION. HOWEVER, BRP INSERTED A FOOTNOTE ON ONE OF THE PAGES OF THE INVITATION DEALING WITH THE FIRST ARTICLE TEST REPORT DELIVERY REQUIREMENT READING AS FOLLOWS: "WILL REQUIRE 160 DAYS TO PRODUCE THE FIRST ARTICLE AND 50 DAYS FOR TESTING AND REPORT TO BE COMPLETED.'

ON THE BASIS THAT THE 180-DAY FIRST ARTICLE APPROVAL TESTING PERIOD WAS A REALISTIC MANDATORY DELIVERY REQUIREMENT, PARTICULARLY IN VIEW OF THE URGENT NEED FOR A PORTION OF THE ITEMS, THE CONTRACTING OFFICER DETERMINED THAT THE BID SUBMITTED BY BRP WAS NONRESPONSIVE AND, AS SUCH, COULD NOT BE CONSIDERED FOR AWARD. SEE, IN THIS REGARD, PARAGRAPH 2-404.2 (C) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH PROVIDES THAT "ANY BID WHICH FAILS TO CONFORM TO THE DELIVERY SCHEDULE OR PERMISSIBLE ALTERNATES THERETO STATED IN THE INVITATION FOR BIDS SHALL BE REJECTED AS NONRESPONSIVE.' THE MATERIALITY OF THIS DELIVERY REQUIREMENT IS MADE EVEN MORE EVIDENT BY REFERENCE TO THE INVITATION PROVISION STATING THAT FAILURE TO DELIVER THE TEST REPORT WITHIN THE SPECIFIED PERIOD WOULD RENDER THE CONTRACT SUBJECT TO DEFAULT TERMINATION.

YOU PROTEST AGAINST THE DETERMINATION OF NONRESPONSIVENESS ON THE GROUND THAT THE EXTENDED DELIVERY TIME OFFERED BY BRP WAS MORE THAN OFFSET BY ITS LOW BID PRICE, WHICH, WE ARE ADVISED, IS 27 PERCENT LOWER THAN THE SECOND LOW BID ON THE BASIC CONTRACT ITEMS AND 50 PERCENT LOWER ON THE OPTION ITEMS.

WE HAVE CONSISTENTLY HELD THAT THE ACCEPTANCE OF A LOW BID OFFERING DELIVERY LATER THAN THAT SPECIFIED IN THE INVITATION IS CONTRARY TO THE SPIRIT AND PURPOSE OR THE LAWS GOVERNING PROCUREMENTS MADE PURSUANT TO FORMAL ADVERTISING. B-120582, SEPTEMBER 13, 1954; B 158335, APRIL 1, 1966; B-153868, MAY 8, 1964; B-158423, APRIL 1, 1966. FURTHER, WE HELD AT 36 COMP. GEN. 181, 183, AS FOLLOWS:

"THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE SAME OFFERED IN THE INVITATION. 34 COMP. GEN. 119. WHILE THE CONTRACTING OFFICER MAY WAIVE INFORMALITIES IN BIDS, THIS AUTHORITY DOES NOT EXTEND TO THE WAIVER OF MATERIAL VARIATIONS TO THE TERMS AND CONDITIONS OF THE INVITATION. AWARD A CONTRACT TO A LOW BIDDER WITHOUT REGARD TO THE TERMS AND CONDITIONS OF DELIVERY ADVERTISED WOULD DISCRIMINATE AGAINST OTHER BIDDERS WHO MAY WELL HAVE INCLUDED OVERTIME PAY AND OTHER ADDITIONAL COSTS IN ORDER TO MEET THE DEADLINE. A PROVISION OF AN INVITATION WHICH ON ITS FACE ESTABLISHES A DEFINITE REQUIREMENT AS TO TIME OF DELIVERY IS MATERIAL. CF. B-104418, AUGUST 23, 1951. THE ACCEPTANCE OF A BID NOT COMPLYING WITH SUCH MATERIAL PROVISION IS UNAUTHORIZED AND DOES NOT BIND THE GOVERNMENT. 17 COMP. GEN. 554, 559. * * *"

YOU ALSO CONTEND THAT INASMUCH AS THE SECOND LOW BIDDER WAS NOT A RESPONSIBLE MANUFACTURER OF THE PROCURED ITEMS, IT WAS NOT ENTITLED TO AWARD. WE ARE ADVISED IN THIS REGARD THAT PURSUANT TO ASPR 1-902, WHICH REQUIRES THAT CONTRACTS SHALL BE AWARDED ONLY TO PROSPECTIVE CONTRACTORS WHICH THE CONTRACTING OFFICER HAS AFFIRMATIVELY DETERMINED TO BE RESPONSIBLE, A COMPLETE PREAWARD SURVEY WAS CONDUCTED TO DETERMINE THE RESPONSIBILITY OF THE SECOND LOW BIDDER. THE RESULTS OF THAT SURVEY DEMONSTRATED THAT SUCH BIDDER POSSESSED THE NECESSARY CAPABILITIES AND COMPETENCY TO PERFORM THE CONTRACT. IN VIEW THEREOF, AWARD TO THAT BIDDER WAS RECOMMENDED. AWARD OF THE CONTRACT WAS MADE ON JUNE 23, 1967, TO HENRY PRODUCTS COMPANY, INC., AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER.

IT IS WELL SETTLED THAT OUR OFFICE WILL NOT INTERFERE WITH SUCH A DETERMINATION OF RESPONSIBILITY IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFOR. 37 COMP. GEN. 430. THE UNDERLYING REASONS FOR THIS RULE ARE SET OUT IN OUR DECISION AT 39 COMP. GEN. 705, IN PART, AS FOLLOWS:

"* * * THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED, SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY, AND THEY MUST MAINTAIN THE DAY TO DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS. * * *"

UNDER THE CIRCUMSTANCES, NO LEGAL BASIS EXISTS FOR DISTURBING THE AWARD MADE OR QUESTIONING THE ACTIONS OF THE CONTRACTING OFFICER LEADING UP TO THE AWARD. WE ARE ADVISED BY THE PROCUREMENT AGENCY THAT IN VIEW OF THE SUBSTANTIAL UNIT PRICE DISPARITY BETWEEN BRP'S BID AND HENRY'S BID ON BOTH THE BASIC QUANTITY AND THE OPTION QUANTITIES, THE OPTIONS WILL NOT BE EXERCISED UNDER THE HENRY CONTRACT BUT WILL BE PROCURED UNDER A NEW SOLICITATION.