B-145643, JUNE 15, 1961, 40 COMP. GEN. 701

B-145643, JUNE 15, 1961, 40 COMP. GEN. 701

BIDS - EVALUATION - GOVERNMENT EQUIPMENT - RENT-FREE USE UNDER AN INVITATION WHICH CONTAINED A GOVERNMENT PROPERTY CLAUSE AND A GOVERNMENT-FURNISHED SPECIAL TOOLING PROVISION--- THE PROPERTY CLAUSE AUTHORIZING THE USE OF GOVERNMENT PROPERTY IN THE BIDDER'S POSSESSION AT THE RENTAL RATES IN HIS FACILITIES CONTRACT AND SPECIFYING THAT BIDS CONTINGENT UPON THE RENT-FREE USE OF GOVERNMENT PROPERTY WOULD MAKE BIDS NONRESPONSIVE, AND THE TOOLING PROVISION LISTING THE GOVERNMENT TOOLS TO BE DELIVERED TO THE CONTRACTOR'S PLANT--- A BIDDER WHO ACCOMPANIED A BID, INDICATING THE USE OF GOVERNMENT PROPERTY, WITH A TRANSMITTAL LETTER STATING THAT BID PRICES WERE QUOTED ON THE BASIS OF CONTINUED RENT-FREE USE OF GOVERNMENT TOOLS THEN IN HIS POSSESSION HAS SUBMITTED A BID WHICH THE CONTRACTING OFFICER WAS JUSTIFIED IN INTERPRETING AS RENT-FREE USE OF GOVERNMENT FACILITIES THEREBY MAKING IT NONRESPONSIVE, AND TO PERMIT THE BIDDER TO FURNISH INFORMATION AFTER OPENING TO ESTABLISH AN APPROPRIATE RENTAL FOR THE GOVERNMENT TOOLS WOULD BE PREJUDICIAL TO OTHER BIDDERS.

TO THE AMERICAN BOSCH ARMS CORPORATION, JUNE 15, 1961:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 27, 1961, PROTESTING THE AWARD OF A CONTRACT TO GENERAL ELECTRIC COMPANY UNDER INVITATION FOR BIDS NO. OFB-128-113-61 ISSUED ON MARCH 20, 1961, BY THE U.S. NAVAL SUPPLY DEPOT, GREAT LAKES, ILLINOIS.

THE INVITATION REQUESTED BIDS--- TO BE OPENED APRIL 3, 1961--- FOR FURNISHING 719 DIRECT CURRENT MOTORS TO CONFORM TO CERTAIN DRAWINGS AND SPECIFICATIONS. FOUR BIDS WERE RECEIVED, ONE OF WHICH WAS A TELEGRAPHIC BID RECEIVED NOT IN TIME TO BE CONSIDERED IN MAKING AWARD. YOUR BID IN THE AMOUNT OF $288 PER MOTOR WAS THE LOWEST BID RECEIVED BUT WAS REJECTED FOR REASONS HEREINAFTER SET OUT. THE NEXT LOW BID WAS CONSIDERED NONRESPONSIVE AS TO MAXIMUM DELIVERY TIME AND THE AWARD WAS MADE TO THE THIRD LOW BIDDER, GENERAL ELECTRIC COMPANY, AT ITS REDUCED PRICE OF $288 PER MOTOR.

YOUR BID WAS REJECTED FOR TWO REASONS. THE FIRST REASON CONCERNED THE STATEMENT IN YOUR COVERING LETTER WITH THE BID TO THE EFFECT THAT THE DELIVERY SCHEDULE WAS BASED ON THE UNDERSTANDING THAT CONTRACT AWARD WOULD BE MADE BY APRIL 10, 1961. IN ITS REPORT TO US THE DEPARTMENT OF THE NAVY EXPRESSES THE VIEW THAT THIS STATEMENT DID NOT MAKE YOUR BID NONRESPONSIVE. HAVING REGARD FOR THE DELIVERY REQUIREMENTS SET OUT ON PAGE 10 OF THE INVITATION, WE AGREE THAT YOUR BID WAS RESPONSIVE INSOFAR AS DELIVERY WAS CONCERNED. THE SOLE QUESTION FOR CONSIDERATION, THEREFORE, IS WHETHER YOUR BID WAS QUALIFIED WITH REGARD TO THE RENT-FREE USE OF GOVERNMENT TOOLING BECAUSE OF THE FOLLOWING CIRCUMSTANCES.

THE INVITATION CONTAINED ON PAGE 13 THE FOLLOWING CLAUSE REGARDING GOVERNMENT PROPERTY IN THE BIDDER'S POSSESSION:

GOVERNMENT PROPERTY IN BIDDER'S POSSESSION (F-30) IF THE BIDDER PLANS TO USE, IN PERFORMING THE WORK BID UPON, ANY ITEMS OF GOVERNMENT PROPERTY (INCLUDING ANY ITEMS OF SPECIAL TOOLING) IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT WITH THE GOVERNMENT INDEPENDENT OF THIS INVITATION FOR BIDS, THE BIDDER SHALL SO INDICATE BY CHECKING THE FOLLOWING BOX. (BOX OMITTED) IN SUCH EVENT THE BIDDER MAY USE SUCH GOVERNMENT PROPERTY AT THE RENTAL RATES STIPULATED IN SUCH FACILITIES CONTRACT OR OTHER AGREEMENT PROVIDED SUCH USE IS THEREBY AUTHORIZED; AND THE BIDDER AGREES, UPON REQUEST OF THE CONTRACTING OFFICER, TO SUBMIT EVIDENCE THAT A FACILITIES CONTRACT OR OTHER SEPARATE AGREEMENT WITH THE GOVERNMENT AUTHORIZES THE BIDDER TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON. HOWEVER, BIDS SUBMITTED CONTINGENT UPON USE OF SUCH GOVERNMENT PROPERTY ON A NO CHARGE BASIS WILL BE CONSIDERED NONRESPONSIVE.

IN SUBMITTING YOUR BID YOU CHECKED THE BOX IN THE ABOVE CLAUSE, THEREBY INDICATING THAT YOU PLANNED TO USE GOVERNMENT PROPERTY UNDER AN AGREEMENT INDEPENDENT TO THE SUBJECT INVITATION. YOUR LETTER OF MARCH 31, 1961, TRANSMITTING YOUR BID CONTAINED A STATEMENT THAT THE "QUOTED PRICES ARE BASED ON THE CONTINUED RENT-FREE USE OF THE SPECIAL TOOLS AND TEST EQUIPMENT NOW IN THE CONTRACTOR'S POSSESSION.' THE ABOVE CLAUSE PROVIDES IN PLAIN TERMS THAT IF THE BIDDER IS PLANNING THE USE OF GOVERNMENT PROPERTY IN HIS POSSESSION UNDER AN INDEPENDENT GOVERNMENT AGREEMENT AND SO INDICATES BY CHECKING THE BOX, HE IS AUTHORIZED TO USE PROPERTY AT THE RENTAL RATES STIPULATED IN THE AGREEMENT; BUT IT ALSO PROVIDES THAT BIDS SUBMITTED CONTINGENT UPON USE OF THE PROPERTY ON A NO CHARGE BASIS WILL BE CONSIDERED NONRESPONSIVE. IN VIEW OF YOUR PLANNED USE OF GOVERNMENT PROPERTY AND THE STATEMENT IN YOUR TRANSMITTAL LETTER, YOUR BID WAS CONSIDERED NONRESPONSIVE IN ACCORDANCE WITH THE SPECIFIC TERMS OF THE INVITATION.

PAGES 4 THROUGH 7 OF THE INVITATION UNDER THE HEADING "1GOVERNMENT FURNISHED SPECIAL TOOLING" LISTS THE TOOLING TO BE SUPPLIED BY THE GOVERNMENT TO THE SUCCESSFUL BIDDER ON A RENT-FREE BASIS AND IS IN PART AS FOLLOWS:

SUCH SPECIAL TOOLING SHALL BE DELIVERED AT OR NEAR CONTRACTOR'S PLANT, UNDER GOVERNMENT BILLS OF LADING, FREE OF EXPENSE TO THE CONTRACTOR, ON BOARD THE CONVEYANCE SELECTED BY THE GOVERNMENT, WITHIN FIVE (5) DAYS FROM DATE OF CONTRACT TO THE INSPECTOR SPECIFIED HEREIN, IN CARE OF THE CONTRACTOR'S PLANT AT * * *

IN THE BLANK SPACE IMMEDIATELY AFTER THE WORD "AT" YOU TYPED IN THE WORDS "1TOOLING NOW AT CONTRACTOR'S POSSESSION.' THE GOVERNMENT INTERPRETED THIS STATEMENT TO MEAN THAT IF YOU WERE THE SUCCESSFUL BIDDER NO ADDITIONAL DELIVERY OF TOOLING NEED BE MADE BY THE GOVERNMENT TO A SEPARATE OR NEW ADDRESS AS THE TOOLING LISTED IN THE CLAUSE WAS ALREADY IN YOUR POSSESSION.

AS TO THE ABOVE SPECIAL TOOLING TO BE FURNISHED BY THE GOVERNMENT AND THEN LOCATED AT YOUR PLANT BY VIRTUE OF ITS USE UNDER ANOTHER CONTRACT, IT IS APPARENT FROM THE PROVISIONS IN THE SCHEDULE AND THE GOVERNMENT- FURNISHED PROPERTY CLAUSE THAT SUCH TOOLING WAS INTENDED TO BE FURNISHED WITHOUT CHARGE. YOU CONCEDE THIS FACT BY YOUR STATEMENT IN PARAGRAPH 12 OF YOUR LETTER OF APRIL 27, TO OUR OFFICE THAT "1IT WOULD APPEAR OBVIOUS THAT THE PROVISION ON PAGE 13 REFERS PRIMARILY TO FACILITIES OR EQUIPMENT OTHER THAN SPECIAL TOOLS LISTED ON PAGES 4 THROUGH 7, AND PROVIDES THAT ANY BID TO BE ENTERED MUST BE ON A BASIS OF THE PAYMENT OF RENTAL FOR THE USE OF SUCH FACILITIES IN ORDER THAT ALL BIDS CAN BE EVALUATED ON AN EQUAL BASIS.' ALSO, YOU ADD THAT "1ON THE OTHER HAND, THE PROVISION APPEARING ON PAGES 4 THOUGH 7 OF THE IFB REFERS TO SPECIAL TOOLING WHICH IS TO BE PROVIDED TO THE SUCCESSFUL BIDDER ON A RENT-FREE BASIS.' WE THINK THIS STATEMENT INDICATES THAT YOU CLEARLY UNDERSTOOD THE PURPOSE AND MEANING OF THE PROVISION ON PAGE 13 OF THE INVITATION. IN ANY EVENT SINCE YOU CHECKED THE BOX IN THAT PROVISION--- THUS INDICATING THAT YOU INTENDED TO USE OTHER GOVERNMENT FACILITIES AND/OR SPECIAL TOOLING IN YOUR POSSESSION UNDER AN INDEPENDENT AGREEMENT IN PERFORMING THE CONTRACT WORK--- WE THINK THE CONTRACTING OFFICER WAS JUSTIFIED IN INTERPRETING THE RENT-FREE STIPULATION IN YOUR TRANSMITTAL LETTER AS APPLYING TO SUCH GOVERNMENT PROPERTY AND DETERMINING YOUR BID TO BE NONRESPONSIVE. IN THAT CONNECTION, IT IS REPORTED BY THE ADMINISTRATIVE OFFICE THAT YOUR DIRECTOR OF CONTRACTS VISITED THE PURCHASING OFFICE AFTER THE AWARD TO GENERAL ELECTRIC COMPANY AND ADMITTED AT THE TIME THAT THERE WERE SPECIAL TOOLS AND TEST EQUIPMENT REQUIRED FOR PERFORMANCE UNDER INDEPENDENT GOVERNMENT AGREEMENTS AND THAT HE DID NOT KNOW WHETHER THESE AGREEMENTS PROVIDED FOR RENTAL. HE STATED FURTHER AT THAT TIME THAT IN THE EVENT SUCH AGREEMENTS DID NOT PROVIDE FOR RENTAL A FAIR RENTAL COULD BE NEGOTIATED AFTER AWARD.

THE CONTRACTING OFFICE REPORTS THAT PRIOR TO REJECTING YOUR BID, THE POSSIBILITY OF CONSIDERING YOUR BID WAS EXPLORED. THE ADDITION OF A RENTAL CHARGE (IN LIEU OF RENT-FREE USE) FOR YOUR USE OF UNSPECIFIED GOVERNMENT PROPERTY UNDER UNSPECIFIED AGREEMENTS COULD HAVE MADE YOUR BID HIGHER THAN THE OTHER BIDS. HOWEVER, SINCE APPROPRIATE RENTAL COULD NOT BE DETERMINED AFTER OPENING WITHOUT OBTAINING ADDITIONAL INFORMATION FROM YOU, AND THUS GIVE YOU ANOTHER CHANCE IN THE BIDDING, IT WOULD HAVE BEEN PREJUDICIAL TO THE OTHER BIDDERS TO ALLOW YOU TO PRESENT FURTHER INFORMATION FOR CONSIDERATION.

WITH REGARD TO YOUR ALLEGATION THAT THIS PROCUREMENT WAS ORIGINALLY COMMENCED UNDER INVITATION NO. IFB-128-79-61, DATED JANUARY 20, 1961, AND THEN CANCELED "WITHOUT SIGNIFICANT JUSTIFICATION" IT IS STATED BY THE CONTRACTING OFFICER THAT THE FIRST INVITATION WAS CANCELED BECAUSE YOU HAD FAILED TO COOPERATE, IN THE CASE OF AT LEAST ONE BIDDER, BY REFUSING TO PERMIT THE VIEWING OF THE GOVERNMENT-FURNISHED SPECIAL TOOLING LISTED IN THE CANCELED INVITATION AND LOCATED AT YOUR PLANT, WHICH ACTION ALLEGEDLY HANDICAPPED THE BIDDER IN SUBMITTING A PROPER AND TIMELY BID.

IN VIEW OF THE FOREGOING WE CANNOT HOLD THAT THE AWARD TO THE GENERAL ELECTRIC COMPANY WAS IMPROPER.