B-154271, MAY 27, 1964

B-154271, MAY 27, 1964

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO LETTER OF MAY 22, 1964, FROM THE DEPUTY ASSISTANT POSTMASTER GENERAL REQUESTING OUR ADVICE WHETHER THE BID SUBMITTED BY JERVIS B. WEBB COMPANY ON INVITATION FOR BIDS NO. 1448 MAY BE CONSIDERED FOR AWARD.

THE INVITATION COVERED THE FURNISHING AND INSTALLING OF A MAIL HANDLING SYSTEM IN THE SOUTH SUBURBAN POSTAL FACILITY, CHICAGO, ILLINOIS, IN ACCORDANCE WITH SPECIFICATIONS POD-M-1074/RE). ALTERNATE BIDS WERE NOT AUTHORIZED BY THE INVITATION. SEVEN BIDS WERE OPENED MAY 18, 1964, THE THREE LOWEST BEING AS FOLLOWS:

TABLE

J. B. WEBB COMPANY $876,220

THE SPRA-CON COMPANY 968,730

ALVEY-FERGUSON COMPANY 975,000

THE DEPARTMENT'S QUESTION AS TO THE ACCEPTABILITY OF WEBB'S $876,220 BID ARISES FROM THE FOLLOWING STATEMENT ON PAGE THREE THEREOF:

"SEE ATTACHED SHEET FOR ELECTRICAL ALTERNATE.'

ATTACHED TO THE BID WERE SIX SHEETS, THE FIRST OF WHICH HAD THE FOLLOWING LANGUAGE:

"WE HAVE QUOTED IN ACCORDANCE TO YOUR SPECIFICATIONS. HOWEVER, IT IS OUR BELIEF THAT IT WOULD BE DESIRABLE TO HAVE SOME ADDED FEATURES IN THE ELECTRICAL CONTROLS AND IN FIELD WIRING, WHICH ARE NOT COVERED IN YOUR SPECIFICATIONS. THE PRICE FOR THESE ADDED FEATURES IF DESIRED IS ........................................ $74,149.00.'

FOUR OF THE OTHER SHEETS CONTAINED A LISTING OF SOME 50 OR 60 ITEMS PERTAINING ONLY TO A PORTION OF THE ELECTRICAL WORK. SOME OF THESE ITEMS WERE MARKED WITH AN ASTERISK, AND AT THE BOTTOM OF THE FIRST SHEET WAS THE FOLLOWING COMMENT:

"*NOTE: IN ACCORDANCE WITH WRITTEN SPECIFICATIONS, ALL OTHERS MAKE UP AN ALTERNATE METHOD OF CONTROL WHICH WOULD PROVIDE A BETTER OPERATING SYSTEM. ITEMS WITH NO * ARE IN ALTERNATE PRICE.'

IT MAY BE NOTED THAT THE TOTAL OF WEBB'S $876,220 BID PLUS ITS $74,149 ALTERNATE IS $950,369, OR $18,361 LESS THAN THE NEXT LOW BID BY SPRA-CON.

THE LOGICAL MEANING OF THE "NOTE" QUOTED ABOVE WOULD SEEM TO BE THAT THE LISTED ELECTRICAL ITEMS WERE OF TWO KINDS, THOSE MARKED WITH AN ASTERISK AND INCLUDED IN THE BASIC BID OF $876,220, AND THOSE WITHOUT AN ASTERISK VALUED AT $74,149 WHICH WERE NOT INCLUDED IN THE BASIC BID. HOWEVER, A CAREFUL ANALYSIS OF THE ITEMS LISTED SHOWED THAT AT LEAST 38 WHICH WERE NOT IDENTIFIED WITH AN ASTERISK WERE, IN FACT, REQUIRED BY

THE SPECIFICATIONS OF THE INVITATION.

THIS DISCREPANCY WAS DISCUSSED OVER THE TELEPHONE WITH OFFICIALS OF THE WEBB COMPANY, AND WITHIN ONE HOUR WEBB'S ORIGINAL ESTIMATING SHEETS WERE PICKED UP BY A POSTAL INSPECTOR. ON MAY 21, 1964, A MEETING WAS HELD WITH WEBB OFFICIALS, WHO STATED THAT THE 38 ITEMS SHOULD HAVE CARRIED AN ASTERISK SINCE THEY WERE IN FACT INCLUDED IN WEBB'S BASE BID OF $876,220. POST OFFICE ENGINEERING PERSONNEL MADE A DETAILED EXAMINATION OF WEBB'S ORIGINAL ESTIMATING SHEETS AND VERIFIED WEBB'S STATEMENT THAT THE 38 ITEMS WERE INCLUDED THEREIN. WEBB ATTRIBUTES THE ABSENCE OF ASTERISKS TO TYPING ERROR.

THE QUESTION PRESENTED IS SIMPLIFIED BY THE FACT THAT WEBB'S BID AS A WHOLE DOES OFFER A SYSTEM WHICH CONFORMS TO ALL THE REQUIREMENTS OF THE SPECIFICATIONS. WEBB'S SO-CALLED "ALTERNATE" IS NOT IN REALITY AN ALTERNATE BID, BUT MERELY AN OFFER TO FURNISH FEATURES ADDITIONAL TO THOSE REQUIRED BY THE SPECIFICATIONS. IN OTHER WORDS, WEBB HAS OFFERED TO MEET ALL THE REQUIREMENTS OF THE SPECIFICATIONS AND TO FURNISH ADDITIONAL ELECTRICAL FEATURES AT A TOTAL PRICE SOME $18,000 LOWER THAN ANY OTHER BIDDER. SINCE WEBB HAS OFFERED TO FURNISH WHAT WAS CALLED FOR, PLUS MORE, AT THE LOWEST PRICE, WE BELIEVE ITS BID PROPERLY MAY BE ACCEPTED WITHOUT PREJUDICE TO OTHER BIDDERS.

PROTEST HAS BEEN MADE TO AWARD TO WEBB BY THE SECOND LOW BIDDER, THE SPRA -CON COMPANY. SPRA-CON HAD REQUESTED, PRIOR TO BID OPENING, PERMISSION TO DEVIATE FROM THE ADVERTISED SPECIFICATIONS BE RELOCATING THE MAIL HANDLING SYSTEM IN CERTAIN AREAS. PERMISSION TO DO THIS WAS REFUSED, AND IT SHOULD BE NOTED THAT SPRA-CON'S REQUEST WOULD HAVE REQUIRED A CHANGE IN THE ADVERTISED SPECIFICATIONS, WHICH WOULD, OF COURSE, IF GRANTED, HAVE REQUIRED AN ADDENDUM TO THE SPECIFICATIONS TO PERMIT ALL BIDDERS A CHANCE TO COMPETE ON THE RELOCATED SYSTEM. SINCE IT WAS DECIDED NOT TO PERMIT BIDS ON A RELOCATED SYSTEM, THIS ASPECT OF SPRA-CON'S PROTEST IS WITHOUT MERIT.

SPRA-CON DID ADVANCE ANOTHER BASIS OF PROTEST AGAINST THE ADVERTISED SPECIFICATIONS, WHICH IS, IN EFFECT, THAT THE SPECIFICATION REQUIREMENTS AS TO TRAINING AND MAINTENANCE ARE GREATER THAN PROBABLY WILL BE NEEDED. SPRA-CON'S PROTEST ON THIS POINT IS ONE WHICH WAS ORIGINALLY ADDRESSED, BY LETTER OF MAY 13, 1964, TO SEVEN OTHER INVITATIONS, AND WAS DIRECTED TO THE INSTANT INVITATION BY ITS LETTER OF MAY 20, 1964, TWO DAYS AFTER BID OPENING.

THE ESSENCE OF THIS ASPECT OF SPRA-CON'S PROTEST IS ITS CLAIM THAT THE SPECIFICATION REQUIREMENTS REGARDING TRAINING AND MAINTENANCE STATE YOUR DEPARTMENT'S MAXIMUM NEEDS, WHILE THE PROBABILITY IS THAT CONTRACTORS WILL ACTUALLY BE REQUIRED TO FURNISH CONSIDERABLY LESS. WE ARE ADVISED THAT THIS MAY BE TRUE; THAT WHILE THE SPECIFICATIONS CALL FOR NO MORE TRAINING AND MAINTENANCE THAN MAY BE NEEDED, IT IS POSSIBLE, DEPENDING ON VARIOUS FACTORS, THAT THE CONTRACTOR MAY NOT HAVE TO FURNISH THE MAXIMUM SPECIFIED. HOWEVER, WE ARE ALSO INFORMED THAT, AS HAS BEEN THE CASE IN SOME PRIOR INSTALLATIONS, IF THE QUANTUM OF TRAINING AND MAINTENANCE ACTUALLY REQUIRED IS DETERMINED TO BE LESS THAN THAT CALLED FOR BY THE SPECIFICATIONS, A CHANGE ORDER WILL BE ISSUED, WITH AN ACCOMPANYING EQUITABLE DOWNWARD ADJUSTMENT IN THE CONTRACT PRICE.

DETERMINATION OF THE MAXIMUM TRAINING AND MAINTENANCE WHICH MAY BE NEEDED IS, OF COURSE, A MATTER WITHIN YOUR DEPARTMENT'S SOUND DISCRETION TO DECIDE. SPRA-CON'S REQUEST TO BE PERMITTED TO REVISE ITS BID TO REDUCE THE AMOUNT ALLEGEDLY INCLUDED THEREIN FOR TRAINING AND MAINTENANCE COULD NOT, OF COURSE, BE GRANTED WITHOUT AFFORDING ALL BIDDERS THE SAME OPPORTUNITY THROUGH A READVERTISEMENT. ASIDE FROM THE FACT THAT TIME DOES NOT PERMIT SUCH ACTION, WE DO NOT BELIEVE IT WOULD BE IN THE BEST INTERESTS OF THE COMPETITIVE BIDDING SYSTEM.

THERE APPEARS TO BE NO AMBIGUITY IN THE TRAINING AND MAINTENANCE SPECIFICATIONS, AND THERE IS NO DOUBT THAT EITHER WEBB OR SPRA-CON WOULD BE OBLIGATED, UPON ACCEPTANCE OF ITS BID, TO FURNISH TRAINING AND MAINTENANCE TO THE MAXIMUM EXTENT CALLED FOR BY THE SPECIFICATIONS. SEEMS CLEAR, ALSO, THAT THE GOVERNMENT WOULD BE ENTITLED TO AN EQUITABLE PRICE ADJUSTMENT DOWNWARD FROM EITHER COMPANY IN THE EVENT SUCH TRAINING AND MAINTENANCE REQUIREMENTS WERE REDUCED. WE THEREFORE FIND NO REASON FOR CONCLUDING THAT THE INVITATION IS DEFECTIVE IN THIS RESPECT.

WE SUGGEST, IF PAST EXPERIENCE INDICATES THE USUAL TRAINING AND MAINTENANCE REQUIREMENTS TO BE LESS THAN THE MAXIMUM CALLED FOR BY THE SPECIFICATIONS, THAT CONSIDERATION BE GIVEN TO DRAFTING FUTURE SPECIFICATIONS FOR THIS PART OF THE WORK ON A UNIT PRICE BASIS OR SOME COMPARABLE METHOD, WITH BID EVALUATION TO BE ON A STATED QUANTITY BASED ON THE DEPARTMENT'S BEST ESTIMATE OF THE PROBABLE REQUIREMENTS FOR EACH JOB.

IN VIEW OF THE FOREGOING, WE FIND NO REASON TO OBJECT TO AN AWARD TO THE WEBB COMPANY IN THE AMOUNT OF $876,220 FOR THE WORK COVERED BY THE ADVERTISED SPECIFICATIONS.