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B-143526, FEB. 20, 1961

B-143526 Feb 20, 1961
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TO MUNSTON ELECTRONIC MANUFACTURING CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM DATED DECEMBER 19. THE MATTERS SET FORTH IN YOUR LETTER ARE. YOU CONTEND THAT THE DOMINANT FACTOR IN THIS CASE IS THAT THE CONTRACTING OFFICER AWARDED A CONTRACT AT A PRICE MORE THAN $24. 000 IN EXCESS OF YOUR BID PRICE BECAUSE THE BID ON WHICH THE AWARD WAS BASED LISTED . THOSE UNLISTED ITEMS" (WHICH WERE NOT LISTED IN YOUR BID). YOU EXPRESSED THE VIEW THAT THE CONTRACTING OFFICER MUST HAVE KNOWN THE COST OF THE . " OTHERWISE HE DECIDED TO MAKE THE HIGHER AWARD WITHOUT KNOWING WHETHER HE WAS PAYING A REASONABLE PRICE. IN SUPPORT OF YOUR VIEW REFERENCE WAS MADE TO PARAGRAPH 2-403F OF THE ARMY PROCUREMENT PROCEDURE.

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B-143526, FEB. 20, 1961

TO MUNSTON ELECTRONIC MANUFACTURING CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM DATED DECEMBER 19, 1960, AND TO YOUR LETTER OF JANUARY 6, 1961, RELATING FURTHER TO THE MATTER OF YOUR PROTEST AGAINST THE REJECTION BY THE ARMY SIGNAL SUPPLY AGENCY OF YOUR LOW BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. SC-36-039-60 256-A1, COVERING THE PURCHASE OF A QUANTITY OF AZIMUTH AND RANGE INDICATORS. CONNECTION WITH YOUR REQUEST THAT OUR OFFICE RECONSIDER THE POSITION TAKEN IN OUR DECISIONS OF OCTOBER 24 AND DECEMBER 7, 1960, IN THE LIGHT OF THE MATTERS SET FORTH IN YOUR LETTER, YOU EXPRESSED THE VIEW THAT YOUR PROTEST AND APPEAL SHOULD BE ALLOWED; THAT THE CONTRACT AWARDED IN THIS CASE SHOULD BE CANCELLED AND THAT AN AWARD SHOULD BE MADE TO YOUR CONCERN.

THE MATTERS SET FORTH IN YOUR LETTER ARE, FOR THE MOST PART, A REPETITION OF THE CONTENTIONS PREVIOUSLY MADE BY YOU IN SUPPORT OF YOUR PROTEST. AMONG OTHER THINGS, YOU CONTEND THAT THE DOMINANT FACTOR IN THIS CASE IS THAT THE CONTRACTING OFFICER AWARDED A CONTRACT AT A PRICE MORE THAN $24,000 IN EXCESS OF YOUR BID PRICE BECAUSE THE BID ON WHICH THE AWARD WAS BASED LISTED ,THOSE UNLISTED ITEMS" (WHICH WERE NOT LISTED IN YOUR BID), ALTHOUGH THOSE ITEMS COST ONLY $124.25. YOU EXPRESSED THE VIEW THAT THE CONTRACTING OFFICER MUST HAVE KNOWN THE COST OF THE ,UNLISTED ITEMS; " OTHERWISE HE DECIDED TO MAKE THE HIGHER AWARD WITHOUT KNOWING WHETHER HE WAS PAYING A REASONABLE PRICE, AND THAT APPLICABLE REGULATIONS REQUIRED THAT HE DETERMINE THE REASONABLENESS OF THE BID PRICE. IN SUPPORT OF YOUR VIEW REFERENCE WAS MADE TO PARAGRAPH 2-403F OF THE ARMY PROCUREMENT PROCEDURE, PROVIDING AS FOLLOWS:

"F. UNREASONABLE BIDS. BIDS MAY BE REJECTED IF THE CONTRACTING OFFICER DETERMINES THAT SUCH BIDS ARE NOT REASONABLE. THE CONTRACTING OFFICER MAY MAKE PARTIAL AWARD TO LOW BIDDERS WHOSE PRICES ARE CONSIDERED REASONABLE AND REJECT ALL OTHER BIDS AS UNREASONABLE.'

IT IS NOT SEEN WHEREIN THE QUOTED PARAGRAPH HAS ANY APPLICATION TO THE INSTANT MATTER. YOUR LETTER APPEARS TO BE AN ATTEMPT TO CHARGE THE CONTRACTING OFFICER WITH KNOWLEDGE OF THE COST OF THE "UNLISTED ITEMS" AND THUS, HAVING KNOWLEDGE OF SUCH COST, YOU SAY, IN EFFECT, THAT UNDER THE CITED PARAGRAPH HE WAS REQUIRED TO DETERMINE THE REASONABLENESS THEREOF. THE FACT IS THAT THE COST OF THE "UNLISTED ITEMS" WAS TO BE INCLUDED IN THE UNIT PRICE OF THE INDICATORS. YOUR BID WAS DEFICIENT AND AT VARIANCE WITH THE INVITATION IN THAT THE BID SUBMITTED BY YOU OMITTED CERTAIN ITEMS OF LAMPS AND FUSES, AND THE QUANTITY COUNT OF THE SPARE PARTS WAS IN ERROR. ON THE BASIS OF THE RECORD BEFORE HIM THE CONTRACTING OFFICER CONCLUDED THAT YOUR BID WAS NONRESPONSIVE AS SUBMITTED, AND THAT, SINCE SPECIFIC COST DATA AS TO THE MISSING COMPONENTS WAS NOT AVAILABLE, THE PROCUREMENT OFFICIALS, EVEN IF AUTHORIZED, COULD NOT MAKE THE NECESSARY ADJUSTMENT IN THE PRICING OF THE OMITTED PARTS. IT IS OUR VIEW THAT UNDER THE FACTS OF THIS CASE THERE IS NO PROPER BASIS FOR CHARGING THE CONTRACTING OFFICER WITH THE DUTY OF DETERMINING THE COST FOR THE "UNLISTED ARTS" WHEN THE RESPONSIBILITY FOR SUBMITTING A RESPONSIVE BID WAS YOURS. THE MATTER APPEARS TO HAVE BEEN FULLY COVERED IN THE PENULTIMATE PARAGRAPH OF OUR DECISION DATED OCTOBER 24, 1960.

ON PAGE TWO OF YOUR LETTER IT WAS STATED THAT THE OMISSION OF THE LIST OF ITEMS WAS AN INADVERTENCE ON YOUR PART AND, BEING AN OBVIOUS MISTAKE, WAS SUBJECT TO CORRECTION UNDER GOVERNMENT PROCUREMENT PRACTICES. THIS CONTENTION WAS CONSIDERED ON PAGE TWO OF THE DECISION OF OCTOBER 24, 1960, WHEREIN WE POINTED OUT THAT SECTION 2305 (C) OF TITLE 10, U.S. CODE, REQUIRES THAT A BID TO BE ACCEPTABLE MUST CONFORM TO THE INVITATION; ALSO, THAT THE COURTS AND OUR OFFICE HAVE REPEATEDLY HELD THAT BIDDERS SHOULD NOT BE PERMITTED TO ALTER THEIR PROPOSALS AFTER THE BIDS ARE OPENED SINCE SUCH PRACTICE COULD DEFEAT THE PURPOSE OF COMPETITIVE BIDDING PRACTICES.

YOU AGAIN ALLEGE THAT YOUR MISTAKE IN FAILING TO LIST THE "SPARES" WAS NO DIFFERENT FROM THE SITUATION IN THE "EARLIER CASE OF APRIL 21, 1955.' THAT CASE INVOLVED AN ERROR IN BID ALLEGED BY THE NORTH AMERICAN PHILIPS COMPANY, INC. WE INDICATED IN OUR DECISION OF OCTOBER 24, 1960, THAT WE DO NOT REGARD AS CONTROLLING IN THE INSTANT MATTER THE CONCLUSION REACHED IN THE DECISION OF APRIL 21, 1955, BECAUSE OF THE DISSIMILARITY OF THE ATTENDANT FACTS, AND THAT POSITION WAS ADHERED TO IN OUR DECISION OF DECEMBER 7, 1960. THE ESSENTIAL FACTUAL DIFFERENCE BETWEEN THE TWO CASES IS THAT IN THE EARLIER CASE THE QUESTIONED BID FAILED COMPLETELY TO QUOTE ANY PRICE ON ONE SEVERABLE ITEM OF THE INVITATION. THAT BID COULD HAVE BEEN ACCEPTED ON ALL ITEMS EXCEPT THE ITEM FOR WHICH NO PRICE WAS QUOTED, AND ON THAT BASIS, THE BID WAS LOWER THAN THE BID SUBMITTED BY YOU. THIS IS NOT TRUE IN THE PRESENT CASE SINCE THE RUNNING SPARES WERE NOT SEPARABLE BUT AN INTEGRAL PART OF THE END ITEM, AND YOUR BID FAILED TO LIST CERTAIN REQUIRED SPARES AND LISTED DEFICIENT QUANTITIES OF OTHER SPARES, THUS CREATING SERIOUS DOUBT WHETHER ACCEPTANCE OF YOUR BID WOULD HAVE OBLIGATED YOU TO FURNISH ANYTHING MORE THAN WAS LISTED.

REFERRING TO THE SECOND PARAGRAPH ON PAGE THREE OF YOUR LETTER, INFORMATION INFORMALLY RECEIVED IS TO THE EFFECT THAT NO CLAIM BY NORTH AMERICAN PHILIPS COMPANY, INC., HAS BEEN CONSIDERED BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS. NEITHER HAVE WE BEEN ABLE TO FIND ANY RECORD OF A SUIT HAVING BEEN FILED BY THAT CONCERN IN THE COURT OF CLAIMS.

FOR THE REASONS SET FORTH ABOVE, WE ADHERE TO THE VIEWS EXPRESSED IN OUR DECISIONS OF OCTOBER 24 AND DECEMBER 7, 1960. IT MAY BE SAID FOR YOUR INFORMATION THAT FOLLOWING THE RECEIPT OF YOUR LETTER, WE MADE INFORMAL INQUIRY OF THE DEPARTMENT OF THE ARMY AS TO THE STATUS OF THE CONTRACT AND WE WERE ADVISED THAT THE CONTRACTOR HAS MADE SUBSTANTIAL DELIVERIES THEREUNDER.

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