B-154261, JUNE 18, 1964, 43 COMP. GEN. 813

B-154261, JUNE 18, 1964, 43 COMP. GEN. 813

CONTRACTS - SPECIFICATIONS - DEVIATIONS - INFORMAL V. SUBSTANTIVE - TEST REQUIREMENTS WHEN A BID SUBSTANTIALLY DEVIATES FROM THE REQUIREMENTS OF THE SPECIFICATIONS, THE BID IS NONRESPONSIVE WHETHER OR NOT THE DEVIATION CONCERNS THE BASIC PROCUREMENT OR THE TESTING PROGRAM; THEREFORE, UNDER AN INVITATION SOLICITING BIDS BOTH ON A PRODUCT AND A RELIABILITY PROGRAM TO TEST THAT PRODUCT, AN OFFER TO FURNISH THE ENVIRONMENTAL AND TEST DATA OF THE PROGRAM WITHIN THE 100 DAYS SPECIFIED IN THE INVITATION, BUT "AFTER THE RECEIPT OF THE ORDER" RATHER THAN THE REQUIRED ,AFTER DATE OF CONTRACT" IS NONRESPONSIVE, AND THE ONLY OTHER BID RECEIVED UNDER THE INVITATION ALSO BEING NONRESPONSIVE, THE PROCUREMENT MAY BE READVERTISED, THE RULE THAT DEVIATIONS IN BIDS WHICH AFFECT PRICE, QUALITY, QUANTITY OR DELIVERY CANNOT BE WAIVED APPLYING EQUALLY TO THE PROCUREMENT AND TESTING PROGRAM, AND ALTHOUGH THE RELIABILITY PROGRAM IS "PERIPHERAL" AND IS OFFERED AS A PROPOSED PROGRAM FREE OF CHARGE IT IS, NONETHELESS, AN INTEGRAL FACET OF THE ITEM BEING PROCURED.

TO SELLERS, CONNER AND CUNEO, JUNE 18, 1964:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 21 AND JUNE 3, 1964, PROTESTING ON BEHALF OF MIDWESTERN INSTRUMENTS, INC., THAT AN AWARD SHOULD BE MADE TO THAT COMPANY UNDER DEPARTMENT OF THE NAVY INVITATION IFB 251 (338/64 INSTEAD OF THE ACTION TAKEN TO CANCEL THE INVITATION BY THE ADMINISTRATIVE OFFICE.

THE SUBJECT INVITATION SOLICITED BIDS ON TWO ITEMS DESCRIBED AS OSCILLOGRAPHS TOTALING 762 UNITS AND ON A THIRD ITEM DESCRIBED AS A RELIABILITY PROGRAM FOR THE FIRST TWO ITEMS. THE INVITATION EXPLAINED THAT THE PURPOSE OF THE RELIABILITY PROGRAM WAS TO ASSURE THAT THE OSCILLOGRAPHS ARE OF HIGH RELIABILITY. TO ACCOMPLISH THAT END, IT PROVIDED THAT THE CONTRACTOR DEVELOP AND CONDUCT A PROGRAM MEETING CERTAIN MINIMUM REQUIREMENTS. THE INVITATION STATED THAT BIDS SHALL PROVIDE DETAILS OF THE RELIABILITY PROGRAMS PROPOSED FOR USE.

WITH RESPECT TO DELIVERY OF THE THREE ITEMS, THE INVITATION PROVIDED:

TIME OF DELIVERY: THE GOVERNMENT REQUIRES THAT DELIVERY BE MADE IN THE QUANTITIES AND WITHIN THE NUMBER OF DAYS AFTER DATE OF CONTRACT STATED BELOW:

TABLE

ITEM QUANTITY DELIVERY REQUIRED

1. 50 EA. 100 DAYS--- BALANCE 50 PER MONTH THEREAFTER

UNTIL COMPLETED

2. 50 EA. 110 DAYS--- BALANCE 50 PER MONTH THEREAFTER

UNTIL COMPLETED

3. 1 LOT 100 DAYS

BIDS OFFERING DELIVERY OF EACH QUANTITY WITHIN THE APPLICABLE DELIVERY PERIOD SPECIFIED ABOVE WILL BE EVALUATED EQUALLY AS REGARDS TIME OF DELIVERY. BIDS OFFERING DELIVERY OF A QUANTITY UNDER SUCH TERMS OR CONDITIONS THAT DELIVERY WILL NOT THEREBY FALL WITHIN THE APPLICABLE DELIVERY PERIOD SPECIFIED ABOVE WILL BE CONSIDERED NONRESPONSIVE AND WILL BE REJECTED. WHERE A BIDDER OFFERS AN EARLIER DELIVERY SCHEDULE THAN THAT CALLED FOR ABOVE, THE GOVERNMENT RESERVES THE RIGHT TO AWARD EITHER IN ACCORDANCE WITH THE REQUIRED SCHEDULE OR IN ACCORDANCE WITH THE SCHEDULE OFFERED BY THE BIDDER. IF THE BIDDER OFFERS NO OTHER DELIVERY SCHEDULE, THE DELIVERY SCHEDULE STATED ABOVE SHALL APPLY.

THE FINAL PARAGRAPH IN THE TIME OF DELIVERY CLAUSE ADMONISHED BIDDERS HOW OFFERS OF DELIVERY COUNTED FROM THE DATE OF RECEIPT OF THE NOTICE OF AWARD WOULD BE EVALUATED. THE PARAGRAPH STATED:

ATTENTION IS DIRECTED TO PARAGRAPH 8 (D) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, WHICH PROVIDES THAT A WRITTEN AWARD MAILED OR OTHERWISE FURNISHED TO THE SUCCESSFUL BIDDER RESULTS IN A BINDING CONTRACT. ANY AWARD HEREUNDER, OR A PRELIMINARY NOTICE THEREOF, WILL BE MAILED OR OTHERWISE FURNISHED TO THE BIDDER THE DAY THE AWARD IS DATED. THEREFORE, IN COMPUTING THE TIME AVAILABLE FOR PERFORMANCE, THE BIDDER SHOULD TAKE INTO CONSIDERATION THE TIME REQUIRED FOR THE NOTICE OF AWARD TO ARRIVE THROUGH THE ORDINARY MAILS. HOWEVER, A BID OFFERING DELIVERY BASED ON DATE OF RECEIPT BY THE CONTRACTOR OF THE CONTRACT OR NOTICE OF AWARD (OTHER THAN THE CONTRACT DATE) WILL BE EVALUATED BY ADDING THE MAXIMUM NUMBER OF DAYS NORMALLY REQUIRED FOR DELIVERY OF THE AWARD THROUGH THE ORDINARY MAILS. IF, AS SO COMPUTED, THE DELIVERY DATE OFFERED IS LATER THAN THE DELIVERY DATE REQUIRED IN THE INVITATION, THE BID WILL BE CONSIDERED AS NONRESPONSIVE AND REJECTED.

BESIDE THE FOREGOING ADMONITIONS, BIDDERS WERE REMINDED ON THE FIRST PAGE OF THE SCHEDULE THAT RULES OF FORMAL ADVERTISING REQUIRE THAT BIDS MUST CONFORM TO THE SPECIFICATIONS AND OTHER REQUIREMENTS AS ADVERTISED.

MIDWESTERN INSTRUMENTS, INC., AND CENTURY ELECTRONICS AND INSTRUMENTS, INC., WERE THE ONLY BIDDERS. THE BID PRICES WERE AS FOLLOWS:

TABLE

MIDWESTERN CENTURY ITEM 1 OSCILLOGRAPHS TOTAL PRICE $318,511.20 $326,928 ITEM 2 OSCILLOGRAPHS TOTAL PRICE 403,826.70 403,848 ITEM 3 RELIABILITY PROGRAM NO CHARGE 46,729

TOTAL BID PRICE $722,337.90 $777,505

BOTH BIDS HAVE BEEN REJECTED AS NONRESPONSIVE AND THE CONTRACTING OFFICER PROPOSES TO READVERTISE THE PROCUREMENT. THE MIDWESTERN BID WAS REJECTED AS NONRESPONSIVE BECAUSE THE 100 DAY ARO (AFTER RECEIPT OF ORDER) DELIVERY OF ENVIRONMENTAL AND TEST DATA STATED IN THE DESCRIPTION OF THE PROPOSED RELIABILITY PROGRAM WHICH ACCOMPANIED THE COMPANY'S BID WAS NOT IN ACCORDANCE WITH THE 100 DAY AFTER DATE OF CONTRACT REQUIREMENT IN THE INVITATION FOR BIDS AND THE STATEMENT IN THE PROPOSED RELIABILITY PROGRAM THAT "CORRECTION OF THE FAILURES WOULD NOT BE A PART OF THE COST OF THIS PROGRAM" WAS THOUGHT TO BE SUSCEPTIBLE TO AN INTERPRETATION WHICH WOULD PERMIT THE COMPANY TO CHARGE THE GOVERNMENT FOR THE CORRECTION OF ANY DEFICIENCIES FOUND THROUGH THE RELIABILITY PROGRAM. THE CENTURY BID WAS REJECTED AS NONRESPONSIVE BECAUSE THE STATEMENT IN THE DESCRIPTION OF THE RELIABILITY PROGRAM THAT THE LIFE TEST REQUIRED IN MIL-0-23560 WILL BE REPLACED BY THE LIFE TEST IN THE INVITATION FOR BIDS WAS REGARDED AS A PROPOSAL OF SOMETHING LESS THAN REQUIRED SINCE THE MILITARY SPECIFICATION REQUIRED A LIFE TEST OF 500 OPERATING CYCLES, BUT A SIMILAR TEST WAS NOT SPELLED OUT IN THE INVITATION FOR BIDS.

YOU CONTEND THAT THE MIDWESTERN BID IS RESPONSIVE AND SHOULD NOT HAVE BEEN REJECTED. IT IS YOUR POSITION THAT THE BID WAS RESPONSIVE TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION, TO WIT, THE OSCILLOGRAPHS, AND THAT THE VARIATION IN SPECIFYING "AFTER RECEIPT OF ORDER" INSTEAD OF ,AFTER DATE OF CONTRACT" FOR THE PURPOSES OF DELIVERY OF TEST DATA RELATES ONLY TO A PERIPHERAL ITEM, TO WIT, THE RELIABILITY PROGRAM, FOR WHICH NO CHARGE WAS MADE IN THE BID AND WHICH YOU DO NOT CONSIDER AS AFFECTING THE SUBSTANCE OF THE BID. IN THAT CONNECTION, YOU EXPRESS THE VIEW THAT THE RULE THAT DEVIATIONS IN BIDS WHICH AFFECT PRICE, QUALITY, QUANTITY OR DELIVERY CANNOT BE WAIVED APPLIES ONLY TO THE ARTICLES BEING PROCURED AND NOT TO THE TEST DATA. FURTHER, YOU STATE THAT THE RELIABILITY PROGRAM IS ONLY A "PROPOSED" PROGRAM AND THAT THE GOVERNMENT IS PROVIDED WITH THE RIGHT TO APPROVE IT AND IN EXERCISING THIS RIGHT COULD ELIMINATE THE VARIATION. MOREOVER, YOU POINT OUT THAT MIDWESTERN DID NOT STATE ANY EXCEPTION IN THE STANDARD BID FORM AND YOU CONTEND THAT REFERENCES IN THE DESCRIPTION OF THE RELIABILITY PROGRAM TO "THE TIME REQUIREMENT OF THE IFB FOR DELIVERY" DEMONSTRATE AN INTENT TO BE RESPONSIVE AND THE USE OF "AFTER RECEIPT OF ORDER" MERELY CREATED AN INCONSISTENCY WITHIN THE BID. IN THE ALTERNATIVE, YOU STATE THAT IF THE "AFTER RECEIPT OF ORDER" LANGUAGE CANNOT BE WAIVED, THEN IT SHOULD BE TREATED AS AN OBVIOUS MISTAKE WHICH MAY BE CORRECTED TO CONFORM TO THE DELIVERY DATE REQUIRED BY THE INVITATION FOR BIDS.

YOU HAVE ATTEMPTED TO DRAW A DISTINCTION BETWEEN THE REQUIREMENT FOR THE OSCILLOGRAPHS AND THE REQUIREMENT FOR THE RELIABILITY PROGRAM WHICH SUPPORTS THEM. HOWEVER, THE INVITATION IS CLEAR THAT THE TIME OF DELIVERY IS JUST AS MATERIAL TO THE RELIABILITY PROGRAM AS IT IS TO THE OSCILLOGRAPHS THEMSELVES. AFTER SPECIFYING THE TIME OF DELIVERY FOR EACH OF THE ITEMS, THE INVITATION GOES ON TO STATE THAT BIDS OFFERING A DELIVERY WHICH WILL NOT FALL WITHIN THE APPLICABLE PERIOD SPECIFIED "WILL BE CONSIDERED NONRESPONSIVE AND WILL BE REJECTED.' IT IS FURTHER PROVIDED THAT IF A BIDDER OFFERS DELIVERY ON AN AFTER RECEIPT OF ORDER BASIS, THERE WILL BE TACKED ON TO THE TIME SPECIFIED THE TIME NECESSARY TO ALLOW FOR MAIL DELIVERY AND IF THE TIME SO COMPUTED IS LATER THAN THE DELIVERY DATE REQUIRED IN THE INVITATION,"THE BID WILL BE CONSIDERED AS NONRESPONSIVE AND REJECTED.' WHILE IT IS SUGGESTED THAT THE RULE PRECLUDING THE WAIVER OF DEVIATIONS AFFECTING PRICE, QUANTITY, QUALITY OR DELIVERY PERTAINS ONLY TO THE ARTICLES WHICH ARE BEING PROCURED, THAT IS, THE OSCILLOGRAPHS, OUR OFFICE HAS RECOGNIZED THAT IN AN APPROPRIATE CASE, THE RULE CAN APPLY TO ASSOCIATED ITEMS WHICH YOU MIGHT CALL "PERIPHERAL.' IN THAT CONNECTION, SEE B-153626, APRIL 30, 1964, 43 COMP. GEN. 707, WHEREIN THERE WAS CONSIDERED A CASE IN WHICH THE INVITATION SOLICITED BIDS FOR FURNITURE AND PROVIDED THAT FAILURE TO SUBMIT A PHOTOGRAPH OF THE FURNITURE "WILL RESULT IN THE REJECTION OF THE BID.' IN THAT CASE IT WAS HELD THAT WHEN A BIDDER AGREED IN ITS BID TO FURNISH FURNITURE AS REQUIRED BY THE TERMS OF THE INVITATION AND FURNISHED PHOTOGRAPHS AS CALLED FOR BY THE INVITATION,EXCEPT THAT SUCH PHOTOGRAPHS DID NOT ACCURATELY DEPICT THE FURNITURE THE FAILURE COULD NOT BE WAIVED AS A MINOR INFORMALITY SINCE THE PHOTOGRAPH REQUIREMENT WAS MADE A MATERIAL REQUIREMENT OF THE INVITATION FOR BIDS. MOREOVER, WHILE YOU WOULD CHARACTERIZE THE RELIABILITY PROGRAM AS "PERIPHERAL," IT IS NOT INCONSEQUENTIAL SINCE THE PROGRAM ACTUALLY IS AN INTEGRAL FACET OF THE OSCILLOGRAPHS. THIS IS MADE MANIFEST BY THE LANGUAGE IN THE INVITATION WHICH STATES THAT THE OBJECT OF THE PROGRAM IS ,TO ASSURE THAT THE OSCILLOGRAPHS FURNISHED ARE OF HIGH RELIABILITY.' FURTHER, WHILE MIDWESTERN DID NOT PROVIDE A CHARGE IN ITS BID FOR THE PROGRAM, THE REQUIREMENTS OF THE PROGRAM ARE SUCH THAT IT WOULD NOT BE UNUSUAL FOR A BIDDER TO PROVIDE A CHARGE FOR SUCH ITEM AS WAS DONE BY CENTURY, THE SECOND LOW BIDDER. FURTHER, IT IS INDICATED THAT THE REASON MIDWESTERN DID NOT CHARGE FOR THE TESTING SERVICES IS THAT SUCH TESTING IS AN ORDINARY PHASE OF MIDWESTERN'S PRODUCTION PROGRAM. THEREFORE, IT MAY REASONABLY BE SUPPOSED THAT THE EXPENSE OF SUCH TESTING WAS TAKEN INTO CONSIDERATION, ALONG WITH OTHER COST FACTORS, IN FIXING THE BID PRICE FOR THE OSCILLOGRAPHS. IN VIEW OF THE FOREGOING, THE PROGRAM WOULD SEEM TO HAVE GREATER MATERIALITY THAN YOU ARE PREPARED TO ADMIT.

WE DO NOT CONSIDER IT TO BE OF ANY RELEVANT SIGNIFICANCE THAT THE RELIABILITY PROGRAM IS OFFERED AS A PROPOSED PROGRAM OR THAT THE BIDDER'S PROPOSED PROGRAM PROVIDES A RIGHT OF APPROVAL TO THE GOVERNMENT. PROPOSAL WHICH IS MADE IN AN ADVERTISED PROCUREMENT MUST EITHER STAND OR FALL ON THE RESPONSIVENESS OF THE PROPOSAL TO THE ADVERTISED REQUIREMENTS. WHILE THE PROPOSER MIGHT CONTEMPLATE MAKING CHANGES IN THE PROPOSAL IN THE EVENT IT IS NOT ACCEPTABLE, THE PROPOSER CANNOT SHIFT THE RESPONSIBILITY FOR MAKING A RESPONSIVE BID FROM ITSELF TO THE GOVERNMENT.

IT IS TRUE THAT MIDWESTERN DID NOT STATE ANY EXCEPTION TO THE DELIVERY SCHEDULE IN THE STANDARD BID FORM AND THAT IT DID MAKE STATEMENTS IN THE PROPOSED RELIABILITY PROGRAM, WHICH IS CONSIDERED A PART OF THE BID, ALLUDING IN A GENERAL WAY TO THE DELIVERY SCHEDULE IN THE INVITATION. HOWEVER, THE SPECIFIC STATEMENTS IN THE PROPOSED RELIABILITY PROGRAM SHOW THAT THE BIDDER WAS FIGURING DELIVERY TIME ON THAT PHASE OF THE PROCUREMENT ON THE BASIS OF 100 DAYS AFTER RECEIPT OF ORDER INSTEAD OF 100 DAYS AFTER DATE OF CONTRACT AS THE INVITATION PROVIDED. AS A GENERAL PROPOSITION, SPECIFIC STATEMENTS ARE CONSIDERED TO OVERRIDE GENERAL STATEMENTS. BUT EVEN IF THE GENERAL AND SPECIFIC STATEMENTS COULD BE CONSIDERED TO HAVE CREATED AN AMBIGUITY, SUCH AMBIGUITY WAS OF THE BIDDER'S MAKING AND PLACES IT IN A POSITION AFTER THE OPENING OF BIDS WHEN ALL PRICES ARE EXPOSED TO DECIDE WHETHER IT WILL RELY UPON THE GENERAL STATEMENTS AND THEREBY MAKE THE BID RESPONSIVE OR RELY UPON THE SPECIFIC STATEMENTS AND THUS CREATE A NONRESPONSIVE BID. IN THAT CONNECTION, IT WAS STATED IN 17 COMP. GEN. 554, AT PAGE 558 THAT "TO PERMIT PUBLIC OFFICERS TO ACCEPT BIDS NOT COMPLYING IN SUBSTANCE WITH THE ADVERTISED SPECIFICATIONS OR TO PERMIT BIDDERS TO VARY THEIR PROPOSALS AFTER THE BIDS ARE OPENED WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS.'

AS TO THE ALTERNATIVE SUGGESTION THAT THE MATTER BE TREATED AS AN OBVIOUS ERROR AND CORRECTED IN ACCORDANCE WITH THE RULES PERTAINING TO MISTAKES IN BIDS, IT WAS HELD IN 38 COMP. GEN. 876 THAT THE USE OF THE TERM "AFTER RECEIPT OF CONTRACT" IN A BID COULD NOT BE CORRECTED TO CONFORM TO THE INVITATION TERM "AFTER DATE OF CONTRACT.' AT PAGE 878, IT WAS STATED,"ERRORS IN BID WHICH MAY BE CORRECTED AFTER OPENING ARE THOSE WHICH DO NOT AFFECT THE RESPONSIVENESS OF THE BID.'

SINCE THE BID OF MIDWESTERN IS NONRESPONSIVE BECAUSE OF THE FAILURE TO ABIDE BY THE INVITATION DELIVERY REQUIREMENT, IT IS UNNECESSARY TO CONSIDER THE OTHER REASON ADVANCED BY THE CONTRACTING OFFICER FOR REJECTING THE COMPANY'S BID.

IN VIEW OF THE NONRESPONSIVENESS OF BOTH BIDS, AN AWARD COULD NOT PROPERLY BE MADE TO EITHER BIDDER UNDER THE INVITATION, SINCE THE ADVERTISING STATUTES REQUIRE AWARD TO BE MADE TO THE RESPONSIBLE BIDDER CONFORMING TO THE INVITATION FOR BIDS. THEREFORE, SINCE NEITHER BID COULD PROPERLY BE ACCEPTED IN THE CIRCUMSTANCES, OUR OFFICE WILL NOT OBJECT TO THE PROPOSED READVERTISEMENT OF THE PROCUREMENT. IN OUR OPINION INFORMATION IN YOUR LETTER OF JUNE 11 THAT THE SAME PROCUREMENT OFFICE IN A SUBSEQUENT NEGOTIATED PROCUREMENT FOR THE SAME KIND OF OSCILLOGRAPHS HAS OMITTED THE REQUIREMENT FOR A RELIABILITY TESTING PROGRAM DOES NOT REQUIRE ANY DIFFERENT RESULT. IT IS CONCEIVABLE THAT THERE ARE SPECIAL CIRCUMSTANCES BEYOND THOSE WHICH YOU REPORT WHICH REQUIRE A RELAXATION OF REQUIREMENTS IN THE SUBSEQUENT PROCUREMENT. MOREOVER, IF THE SPECIAL SERVICES WHICH WERE BEING PROCURED IN THE FIRST PROCUREMENT ARE NO LONGER REQUIRED THAT IS REASON UNDER ASPR 2-404.1 (B) FOR CANCELING THE INVITATION FOR BIDS.