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B-150318, MAR. 25, 1963

B-150318 Mar 25, 1963
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A COPY OF WHICH WAS FORWARDED TO THIS OFFICE. THE SUBSTANCE OF YOUR PROTEST IS THAT THE SPECIFICATIONS FOR THE DESIGN AND INSTALLATION OF OUTSIDE PLANT TELEPHONE SYSTEMS DID NOT PERMIT THE SUBMISSION OF FAIR AND COMPETITIVE BIDS. YOU ALLEGE THAT RELATED ITEMS OF THE 544 INSTALLATION ITEMS SUBJECT TO ORDER BY THE AIR FORCE ARE BROKEN DOWN IN SUCH A MANNER THAT UNDER SCHEDULE "D" THE SUCCESSFUL BIDDER MAY ENGINEER A SYSTEM OR "SCHEME" WHICH WILL INCORPORATE ONLY ITEMS ON WHICH HE HAS SUBMITTED A REASONABLE PRICE. THE AIR FORCE REPORTS THAT SUCH A DEVELOPMENT IS HYPOTHETICAL AND UNREALISTIC BECAUSE THE INVITATION PROVIDES THAT PROPOSED SCHEMES MUST BE REVIEWED AND APPROVED BY AIR FORCE TECHNICAL PERSONNEL PRIOR TO ORDERS FOR INSTALLATION.

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B-150318, MAR. 25, 1963

TO THE ELCOM CORPORATION:

IN YOUR LETTER OF NOVEMBER 13, 1962, TO MCCLELLAN AIR FORCE BASE, A COPY OF WHICH WAS FORWARDED TO THIS OFFICE, YOU PROTEST THE AWARD OF ANY CONTRACT UNDER INVITATION FOR BIDS 04-606-63-65. THE SUBSTANCE OF YOUR PROTEST IS THAT THE SPECIFICATIONS FOR THE DESIGN AND INSTALLATION OF OUTSIDE PLANT TELEPHONE SYSTEMS DID NOT PERMIT THE SUBMISSION OF FAIR AND COMPETITIVE BIDS.

THE INVITATION CONTEMPLATES AN INDEFINITE QUANTITY FIXED-PRICE CONTRACT FOR OUTSIDE PLANT TELEPHONE SYSTEM REQUIREMENTS GENERATED AT VANDENBERG AIR FORCE BASE, CALIFORNIA, FOR A PERIOD OF ONE YEARS FROM TIME OF AWARD. THE INVITATION PROPOSED TO ACCOMPLISH THE WORK BY THE ISSUANCE OF ORDERS FOR ENGINEERING AND DRAFTING SERVICE IN ACCORDANCE WITH SCHEDULE "D" AND SPECIFICATION GEEIA-Y-80012, AS AMENDED, AND ORDERS FOR FURNISHING INSTALLATION SERVICES AND MATERIALS IN ACCORDANCE WITH SCHEDULE "C" AND SPECIFICATION GEEIA-W-8002, AS AMENDED. IT SPECIFIES CERTAIN MINIMUM AND MAXIMUM TOTAL AMOUNTS FOR THE ORDERS TO BE ISSUED UNDER THE SUBJECT SPECIFICATIONS.

YOU ALLEGE THAT RELATED ITEMS OF THE 544 INSTALLATION ITEMS SUBJECT TO ORDER BY THE AIR FORCE ARE BROKEN DOWN IN SUCH A MANNER THAT UNDER SCHEDULE "D" THE SUCCESSFUL BIDDER MAY ENGINEER A SYSTEM OR "SCHEME" WHICH WILL INCORPORATE ONLY ITEMS ON WHICH HE HAS SUBMITTED A REASONABLE PRICE, AND THUS AVOID AN INSTALLATION REQUIREMENT CONTAINING ITEMS ON WHICH THE BIDDER SUBMITTED EXTREMELY LOW PRICES. THE AIR FORCE REPORTS THAT SUCH A DEVELOPMENT IS HYPOTHETICAL AND UNREALISTIC BECAUSE THE INVITATION PROVIDES THAT PROPOSED SCHEMES MUST BE REVIEWED AND APPROVED BY AIR FORCE TECHNICAL PERSONNEL PRIOR TO ORDERS FOR INSTALLATION. IN ADDITION TO THE FACT THAT THE SUCCESSFUL CONTRACTOR WILL NOT BE GIVEN AN OPPORTUNITY TO ENGINEER HIGHER COST ITEMS INTO THE SYSTEMS, HE MAY BE REQUIRED TO PERFORM INSTALLATION WORK PURSUANT TO ALREADY-EXISTING SCHEMES, AND IN ADDITION, MAY BE REQUIRED TO DESIGN SCHEMES WHICH WILL NOT BE SCHEDULED FOR INSTALLATION DURING THE DURATION OF HIS CONTRACT.

YOU ALLEGE THAT ITEMS 113, 114, 115 AND 116 (CONCRETE HANDHOLES AND MANHOLES OF A SPECIFIED WIDTH, LENGTH AND HEADROOM) AND ITEM 117, WHICH CALLS FOR THE CONTRACTOR'S PRICE FOR EACH ADDITIONAL 6-INCH INCREMENT IN HEADROOM, CAN BE BID IN SUCH A MANNER THAT WHEN A REQUIREMENT EXISTS UNDER ITEMS 294 THROUGH 311--- TYPES "X," "B" AND "A" (NEW CONCRETE MANHOLES OF CORRESPONDING WIDTH AND LENGTH, BUT SUBSTANTIALLY GREATER HEADROOM) THE SUCCESSFUL BIDDER CAN OBTAIN A HIGHER PRICE FROM THE GOVERNMENT BY CHARGING THE PRICE IT HAS BID ON ITEMS 113, 114, 115, OR 116 PLUS THE PRICE FOR THE NECESSARY 6-INCH INCREMENTS IN HEADROOM. THE AIR FORCE REPORTS THAT EACH OF THE NAMED GROUPS OF ITEMS CALLS FOR MANHOLES IN TWO WIDELY DIFFERENT OUTSIDE PLANT SYSTEMS, NAMELY,"BURIED PLANT" AND "UNDERGROUND CONDUIT.' THE PARTICULAR SYSTEM TO WHICH EACH GROUP APPLIES IS CLEARLY IDENTIFIED IN SCHEDULE "C," AND THIS, PLUS THE SEPARATE PROVISIONS OF SPECIFICATION GEEIA-W-8002, SECTION 3, RELATING TO EACH GROUP OF ITEMS, AFFORDS AN ADEQUATE BASIS FOR CONTROL BY THE ADMINISTRATIVE CONTRACTING OFFICER AND PREVENTS A CONTRACTOR FROM CHARGING PRICES BID ON ITEMS 113 THROUGH 117 FOR WORK DESCRIBED IN ITEMS 294 THROUGH 311.

YOU FURTHER ALLEGE THAT UNDER ITEMS 135 THROUGH 179, THE 10-WAY DUCT IS NOT A STANDARD MANUFACTURED ITEM, AND THEREFORE, CHARGES FOR A 6 WAY PLUS A 4-WAY DUCT COULD BE REQUESTED. THE AIR FORCE REPORTS THAT THE CONFIGURATION FOR A 10-WAY DUCT IS SET FORTH IN TECHNICAL ORDER 31W3-1- 15. IN ADDITION TO 10-WAY DUCTS, ITEMS 135 THROUGH 179 ALSO CALL FOR 4-, 6-, 9- AND 12-WAY DUCTS. THE INVITATION REQUIRES THAT THE BIDDERS FURNISH UNIT PRICES ON ALL OF THESE ITEMS. THE UNIT PRICE OF THE SELECTED CONDUIT SPECIFIED IN SCHEDULE "C" WILL BE THE PRICE APPLICABLE TO THE ORDER.

YOU CONTEND THAT ITEM 410 IS NOT A MANUFACTURED ITEM AND SHOULD NOT BE A BID FACTOR. THE AIR FORCE REPORTS THAT ITEM 410 CALLS FOR THE FURNISHING OF CABLE SPLICING SERVICES ON GOVERNMENT-FURNISHED CABLES AND DOES NOT INCLUDE THE MANUFACTURING COST OF THE CABLE.

FINALLY, YOU CONTEND THAT ITEMS 403 THROUGH 437 AND ITEMS 503 THROUGH 508 DO NOT FOLLOW STANDARD ENGINEERING PRACTICES. IT IS REPORTED THAT EXCEPT FOR INCIDENTAL MATERIALS ALL OF THESE ITEMS CALL FOR SERVICES ONLY. THE CRITERIA SUBSTANTIALLY DESCRIBING THESE SERVICES ARE SET FORTH IN THE APPLICABLE TECHNICAL ORDERS. IN THE EVENT OF A CONFLICT BETWEEN STANDARD ENGINEERING PRACTICES AND THE PROVISIONS OF THE TECHNICAL ORDERS THE INVITATION REQUIRES THAT THE TECHNICAL ORDER REQUIREMENTS PREVAIL.

IT IS THE PROVINCE OF THE ADMINISTRATIVE AGENCY TO DRAFT PROPER SPECIFICATIONS NECESSARY TO SUBMIT FOR FAIR COMPETITIVE BIDDING PROPOSED CONTRACTS TO SUPPLY GOVERNMENT NEEDS. 17 COMP. GEN. 554, 557. FROM THE FOREGOING, IT APPEARS THAT THE AIR FORCE HAS DRAFTED SPECIFICATIONS WHICH DEFINE ITS NEEDS AS ACCURATELY AS POSSIBLE UNDER THE CIRCUMSTANCES, AND WHICH HAVE AFFORDED ALL BIDDERS AN OPPORTUNITY TO SUBMIT BIDS WHICH ARE TO BE EVALUATED ON A COMMON BASIS. HOWEVER, YOU SUBMIT THAT THE WIDE DISPARITY OF BID PRICES INDICATES THAT THE GOVERNMENT DID NOT RECEIVE FAIR AND COMPETITIVE PRICES.

A PERUSAL OF THE ABSTRACT OF BIDS SHOWS THAT IN THE NINE BIDS SUBMITTED, APPROXIMATE PRICES RANGED FROM THE TWO LOW BIDS OF $36,000 AND $51,000 TO A HIGH BID OF $1 MILLION. THE AIR FORCE REPORTS THAT EXCEPT FOR THE TWO LOW BIDS THE VARIATION IN BID PRICES IS CONSIDERED NORMAL, REALISTIC AND NOT IRREGULAR.

IT IS TRUE THAT THE TWO LOW BIDDERS MAY BE UNREALISTICALLY LOW ON CERTAIN ITEMS, AND MAY HAVE SPECULATED THAT THE GOVERNMENT WOULD NOT ORDER THE INSTALLATION OF THESE ITEMS ON ANY RESULTING CONTRACT. HOWEVER, THESE BIDDERS ARE AWARE THAT ALL ITEMS ARE SUBJECT TO ORDER, AND HAVE BEEN ADVISED NOT ONLY THAT THEIR TOTAL BID PRICES ARE EXCEPTIONALLY LOW, BUT HAVE ALSO BEEN GIVEN SPECIFIC EXAMPLES OF WHERE THEY BID EXTREMELY LOW UNIT PRICES. NONETHELESS, THE BIDDERS HAVE CONFIRMED THEIR PRICES AND HAVE ACKNOWLEDGED THAT SUCH PRICES WILL BECOME A PART OF ANY RESULTING CONTRACT AND THAT THE VARIOUS WORK CLASSIFICATIONS MUST BE PERFORMED AT THE PRICES BID. NOTHING IN THE BIDS OF THESE TWO LOW BIDDERS INDICATES THAT THEIR LOW PRICES WERE THE RESULT OF AN ERROR. CF. 35 COMP. GEN. 33. FURTHERMORE, WE ARE AWARE OF NO LEGAL PRINCIPLE ON THE BASIS OF WHICH AN AWARD MAY BE PRECLUDED OR DISTURBED MERELY BECAUSE THE LOW BIDDER SUBMITTED AN UNPROFITABLE PRICE, AND WE DO NOT BELIEVE THAT THE SUBMISSION OF A BELOW-COST BID NECESSARILY CONSTITUTES BAD FAITH. B-149551, DATED AUGUST 16, 1962.

FOR THE FOREGOING REASONS, WE DO NOT BELIEVE THAT THE POINTS YOU HAVE RAISED ARE SO OBJECTIONABLE AS TO REQUIRE OUR PREVENTING AN AWARD BEING MADE IN THE INSTANT PROCUREMENT TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. WE UNDERSTAND THAT NO DETERMINATION HAS YET BEEN MADE AS ..END :

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