B-178625, JUL 19, 1973, 53 COMP GEN 32

B-178625, JUL 19, 1973, 53 COMP GEN 32

BIDS - DELIVERY PROVISIONS - ALTERNATE SCHEDULE - NONRESPONSIVE - ERRONEOUS AWARD THE AWARD FOR SEPARATE CONTRACT LINE ITEMS OF FORK LIFT TRUCKS ON THE BASIS OF A PERMITTED ALTERNATE DELIVERY SCHEDULE THAT OFFERED DELIVERY 90 DAYS EARLIER THAN PRESCRIBED BY THE INVITATION FOR BIDS AND, THEREFORE, WAS NONRESPONSIVE TO THE MANDATORY REQUIREMENT THAT THE FIRST PRODUCTION UNITS BE DELIVERED NO EARLIER THAN A MINIMUM OF 365 DAYS AFTER APPROVAL OF THE FIRST ARTICLE TEST REPORT - A REQUIREMENT INTENDED TO ASSURE DELIVERY OF SPARES, REPAIR PARTS, AND PUBLICATION CONCURRENTLY WITH THE FIRST PRODUCTION UNITS - SHOULD BE TERMINATED, THE PROCUREMENT RESOLICITED WITH DELIVERY PROVISIONS INFORMING BIDDERS AS TO PERMISSIBLE DEVIATIONS AND THE CONSEQUENCES OF NONCONFORMITY IN ACCORDANCE WITH THE COMPETITIVE BIDDING SYSTEM, AND THE APPROPRIATE CONGRESSIONAL COMMITTEES INFORMED, PURSUANT TO SECTION 236 OF THE LEGISLATIVE REORGANIZATION ACT, OF THE ACTION TAKEN ON THIS RECOMMENDATION. FURTHERMORE, THE SOLICITATION MAKES NO PROVISION THAT IN THE EVENT AN ALTERNATE DELIVERY SCHEDULE IS UNACCEPTABLE, THE REQUIRED SCHEDULE WILL GOVERN. MODIFIED BY 53 COMP. GEN. (B 178625, NOVEMBER 8, 1973).

TO THE DIRECTOR, DEFENSE SUPPLY AGENCY, JULY 19, 1973:

WE REFER TO LETTER DSAH-G DATED JUNE 21, 1973, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, AND PRIOR CORRESPONDENCE, REPORTING ON THE PROTESTS OF DREXEL INDUSTRIES, INC. AND PETTIBONE CORPORATION. THE PROTESTS INVOLVE THE AWARD OF A CONTRACT TO J. I. CASE COMPANY, THE LOW BIDDER, UNDER INVITATION FOR BIDS (IFB) NO. DSA700-73-B-2031, ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC), COLUMBUS, OHIO, FOR 13 SEPARATE CONTRACT LINE ITEMS (CLIN) OF FORK LIFT TRUCKS, 1 CLIN FOR FIRST ARTICLE TESTING AND 10 DATA CLIN'S. IN THE EVENT WE HOLD ADVERSE TO THE AWARD TO CASE, DREXEL, THE THIRD LOW BIDDER, HAS PROTESTED ANY AWARD TO MULTI- PALLET FORK LIFTS, INC., THE SECOND LOW BIDDER.

FOR THE REASONS WHICH FOLLOW, WE RECOMMEND THAT THE CONTRACT AWARDED TO CASE BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THE PROCUREMENT RESOLICITED SINCE THE AWARD WAS MADE TO OTHER THAN THE LOW RESPONSIVE BIDDER UNDER A DEFECTIVE IFB. SEE 51 COMP. GEN. 792 (1972), AND ID. 635 (1972). TERMINATION FOR CONVENIENCE IS BEING RECOMMENDED BECAUSE THERE IS NO INDICATION IN THE RECORD BEFORE US THAT EITHER THE CONTRACTOR OR THE PROCUREMENT ACTIVITY CONTRACTED OTHER THAN IN GOOD FAITH OR WITH INTENT TO DEPRIVE OTHER BIDDERS OF AN EQUAL OPPORTUNITY TO COMPLETE. SEE 52 COMP. GEN. 215 (1972); AND 51 ID. 481 (1972). WE WOULD APPRECIATE ADVICE OF THE ACTION TAKEN ON OUR RECOMMENDATION.

AS THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN, IT IS BEING TRANSMITTED BY LETTERS OF TODAY TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91-510, 31 U.S.C. 1172. IN VIEW THEREOF, YOUR ATTENTION IS DIRECTED TO SECTION 236 OF THE ACT, 31 U.S.C. 1174, WHICH REQUIRES THAT YOU SUBMIT WRITTEN STATEMENTS AS TO THE ACTION TAKEN WITH RESPECT TO THE RECOMMENDATION. THE STATEMENTS ARE TO BE SENT TO THE HOUSE AND SENATE COMMITTEES ON GOVERNMENT OPERATIONS NOT LATER THAN 60 DAYS AFTER THE DATE OF THIS LETTER AND TO THE COMMITTEES ON APPROPRIATIONS IN CONNECTION WITH THE FIRST REQUEST FOR APPROPRIATIONS MADE BY YOUR AGENCY MORE THAN 60 DAYS AFTER THE DATE OF THIS LETTER.

THE BASIS FOR THE DREXEL AND PETTIBONE PROTESTS CONCERNS THE ALLEGATION THAT THE CASE BID WAS NONRESPONSIVE TO THE MANDATORY IFB REQUIREMENT THAT THE FIRST PRODUCTION UNITS BE DELIVERED NO EARLIER THAN 365 DAYS AFTER APPROVAL BY THE GOVERNMENT OF THE FIRST ARTICLE TEST REPORT.

THE IFB AS ISSUED PROVIDED FOR SUBMISSION OF THE FIRST ARTICLE TEST REPORT BY THE CONTRACTOR WITHIN 270 DAYS AFTER DATE OF AWARD (ADA), APPROVAL OR DISAPPROVAL OF THE TEST REPORT BY THE GOVERNMENT WITHIN 30 DAYS THEREAFTER, AND DELIVERY OF THE FIRST PRODUCTION UNITS 665 DAYS ADA. THUS, DELIVERY OF THE FIRST PRODUCTION UNITS WAS REQUIRED 365 DAYS AFTER SUBMISSION AND APPROVAL OF FIRST ARTICLE TEST REPORT. THE TIME OF DELIVERY PROVISION OF THE IFB WARNED BIDDERS THAT FAILURE TO MEET THE REQUIRED DELIVERY SCHEDULE WOULD RESULT IN A DETERMINATION OF NONRESPONSIVENESS. THE DCSC MASTER SOLICITATION MADE PART OF THE IFB READS, IN PERTINENT PART, AS FOLLOWS:

A. DELIVERY IS REQUIRED TO BE MADE IN ACCORDANCE WITH THE SCHEDULE SET FORTH BELOW, EXCEPT THAT WHERE DELIVERY FOR AN ITEM IS PHASED, BIDS MAY BE ON ANY BASIS PROVIDED DELIVERY PROPOSED IS WITHIN THE PERIOD REQUIRED FOR THE ENTIRE QUANTITY. BIDS FAILING TO MEET THE REQUIRED DELIVERY SCHEDULE WILL BE REJECTED AS NONRESPONSIVE.

CLINS) QUANTITY TIME

(DAYS AFTER DATE OF AWARD)

PAGE 15 OF THE IFB SET OUT THE REQUIRED DELIVERY SCHEDULE OF ALL CLIN'S. FURTHERMORE, THE IFB AS ISSUED CONTAINED TWO NOTES TO BIDDERS CONCERNING THE DELIVERY SCHEDULE WHICH DEALT WITH THE TIME FOR THE SUBMISSION OF THE FIRST ARTICLE TEST REPORT, AS FOLLOWS:

NOTE 2: CONCURRENT DELIVERY WITH THE END ITEMS IS REQUIRED FOR STOCK REPAIR PARTS AND PUBLICATIONS. ACCELERATION IN THE DELIVERY OF END ITEM WILL NOT BE ACCEPTABLE TO THE GOVERNMENT UNLESS ALL OTHER SCHEDULED DELIVERIES RELATING TO CONTRACT ITEMS SUCH AS PROVISIONING, TECHNICAL DOCUMENTATION, DRAWINGS, PUBLICATIONS, OVERPACK MANUALS, ETC. AND SPECIFICALLY FIRST ARTICLE TESTING, ARE ACCELERATED BY AN EQUAL PERIOD OF TIME AND PRIOR APPROVAL OF THE PROCURING CONTRACTING OFFICER IS OBTAINED.

NOTE 3: PROVISION C27A - SUBPARAGRAPH (B) (RIGHT OF OFFERORS TO EXTEND TIME FOR FIRST ARTICLE TEST REPORT SUBMISSION) HAS BEEN DELETED. OFFERORS MAY NOT EXTEND THE TIME FOR SUBMISSION OF FIRST ARTICLE TEST REPORT AS REQUIRED HEREIN.

AMENDMENT 0001 TO THE IFB PROVIDED, IN PERTINENT PART, AS FOLLOWS:

THE DELIVERY TIMES AND ACCELERATION CONDITIONS STATED IN THE SOLICITATION ARE FIRM. THE 12 MONTH LEAD TIME BETWEEN FIRST ARTICLE APPROVAL AND FIRST PRODUCTION DELIVERY IS NECESSARY TO ALLOW FOR CONCURRENT DELIVERY OF REPAIR PARTS.

AMENDMENT 0002 CHANGED THE DELIVERY SCHEDULE BY REQUIRING DELIVERY OF THE FIRST PRODUCTION UNITS 755 DAYS ADA AND ALL CLIN'S BY 905 DAYS ADA AS OPPOSED TO THE ORIGINAL IFB REQUIREMENT OF 665 DAYS ADA AND 815 DAYS ADA, RESPECTIVELY - A 90-DAY EXTENSION. IN ADDITION, THE FIRST ARTICLE TEST REPORT DATE WAS EXTENDED FROM THE ORIGINAL 270 DAYS ADA TO 330 DAYS ADA. THEN, NOTE 3, ABOVE, WAS DELETED AND THE FOLLOWING NEW NOTE 3 WAS SUBSTITUTED (QUOTED AS COMPLETED BY CASE):

TIME FOR SUBMISSION OF FIRST ARTICLE TEST REPORT AND DELIVERY SCHEDULE FOR PRODUCTION UNITS MAY BE ACCELERATED OR EXTENDED UNDER THE FOLLOWING CONDITIONS, BUT IN NO CASE MAY FIRST ARTICLE TEST REPORT EXCEED 360 DAYS ADA:

1. TIME BETWEEN SCHEDULED GOVERNMENT APPROVAL OF 1ST ARTICLE TEST REPORT (THE NUMBER OF DAYS SCHEDULED FOR SUBMISSION OF REPORT PLUS 30 DAYS) AND 1ST DELIVERY OF PRODUCTION TRUCKS IS A MINIMUM 365 DAYS.

2. FINAL DELIVERY OF ALL ITEMS DOES NOT EXCEED 905 DAYS.

3. OFFEROR, WHEN ACCELERATING OR EXTENDING THE TIME FOR SUBMISSION OF THE 1ST ARTICLE TEST REPORT IS REQUESTED TO INDICATE BELOW HIS ALTERNATE DELIVERY SCHEDULE ENCOMPASSING ALL CLINS 0001 THROUGH 0014 CONSISTENT WITH THE CONDITIONS CITED ABOVE OR NAMED ELSEWHERE IN THE SOLICITATION.

TIME - NO. DAYS AFTER DATE

OF AWARD - MAX TIME 905

CLIN QTY DAYS

0001, 2 & 3 100 665

0004 & 5 65 695

0006 65 725

0007 65 755

0008, 9 & 10 65 785

0011, 12 & 13 66 815

0014 360

(FIRST ARTICLE REQUIREMENT.)

WE BELIEVE THAT THE ALTERNATE DELIVERY SCHEDULE PROPOSED BY CASE WAS NONRESPONSIVE TO THE DELIVERY PROVISIONS OF THE IFB. CASE EXTENDED THE NUMBER OF DAYS FOR SUBMISSION OF ITS FIRST ARTICLE TEST REPORT FROM 330 DAYS ADA TO 360 DAYS ADA. HOWEVER, CASE ACCELERATED THE DELIVERY TIME FOR THE FIRST PRODUCTION UNITS FROM 755 DAYS ADA TO 665 DAYS ADA. THIS ALTERNATE SCHEDULE PROVIDED A PERIOD OF 275 DAYS BETWEEN APPROVAL OF THE TEST REPORT AND DELIVERY OF THE FIRST PRODUCTION UNITS - 90 DAYS LESS THAN THE MINIMUM 365 DAYS REQUIRED BY THE IFB, AS AMENDED. THE ASSISTANT COUNSEL AND CONTRACTING OFFICER ADVISE THAT THE PURPOSE OF THE 365-DAY INTERVAL IS TO ASSURE DELIVERY OF SPARES, REPAIR PARTS, AND PUBLICATIONS CONCURRENTLY WITH THE FIRST PRODUCTION UNITS. UNDER THIS PROCUREMENT, THE CONTRACTOR HAS NO CONTROL OVER THE SOURCE OR TIMING OF DELIVERY OF SPARES AND REPAIR PARTS. NO EVIDENCE HAS BEEN PRESENTED WHICH DETRACTS FROM THE MATERIALITY OF THE 365-DAY INTERVAL REQUIREMENT SET FORTH IN THE IFB, AS AMENDED. THEREFORE, SINCE THE ALTERNATE DELIVERY SCHEDULE OFFERED BY CASE PERMITS IT TO DELIVER 90 DAYS EARLIER THAN REQUIRED, THAT SCHEDULE IS NONRESPONSIVE. CASE AND THE CONTRACTING OFFICER ARGUE THAT VARIOUS PROVISIONS OF THE IFB, AS AMENDED, SUCH AS NOTE 2 QUOTED ABOVE, CALL FOR CONCURRENT DELIVERY OF THE END ITEM AND SPARES AND REPAIR PARTS BY CASE. HOWEVER, THIS POSITION IGNORES THE EXPRESS PROVISION INSERTED BY CASE IN ITS BID DEALING WITH DELIVERY TIME WHICH ALLOWS A TIME INTERVAL BETWEEN SUBMISSION AND APPROVAL OF THE FIRST ARTICLE REPORT AND FIRST PRODUCTION UNIT DELIVERY CONTRARY TO A MATERIAL DELIVERY REQUIREMENT OF THE IFB, AS AMENDED. SEE 46 COMP. GEN. 307, 310 (1966).

IN ANY EVENT, NOTE 2, QUOTED ABOVE, CLEARLY REQUIRES THAT ACCELERATION IN THE DELIVERY OF END ITEMS WILL NOT BE ACCEPTABLE UNLESS ALL OTHER SCHEDULED DELIVERIES RELATING TO CONTRACT ITEMS, SPECIFICALLY FIRST ARTICLE TESTING, ARE ACCELERATED BY AN EQUAL PERIOD OF TIME. AMENDMENT 0001 REINFORCES THIS REQUIREMENT. THE CASE ALTERNATE DELIVERY SCHEDULE ACCELERATED THE DELIVERY OF THE FIRST PRODUCTION UNITS FROM 755 DAYS ADA TO 665 DAYS ADA; HOWEVER, IT EXTENDED, RATHER THAN ACCELERATED, THE DATE FOR SUBMISSION OF THE FIRST ARTICLE TEST REPORT. THUS, THE ALTERNATE DELIVERY SCHEDULE WAS NONRESPONSIVE TO THE NOTE 2 AND AMENDMENT 0001 REQUIREMENTS OF THE IFB.

THE ASSISTANT COUNSEL AND CASE ARGUE THAT, DESPITE A DEFECT FATAL TO THE RESPONSIVENESS OF THE ALTERNATE DELIVERY SCHEDULE, CASE MAY FALL BACK ON THE REQUIRED DELIVERY SCHEDULE AS REVISED IN AMENDMENT 0002. THE ASSISTANT COUNSEL VIEWS THE LANGUAGE OF AMENDMENT 0002 WHICH INSERTS A NEW NOTE 3 AND NOTE 2 AS ENCOURAGING BIDDERS TO SUBMIT ALTERNATE DELIVERY SCHEDULES FOR DELIVERY OF END ITEMS WHERE POSSIBLE AND TO PERMIT FLEXIBILITY IN THE DELIVERY OF THE FIRST ARTICLE TEST REPORT. FURTHERMORE, THE ASSISTANT COUNSEL CONTENDS THAT THERE WAS NO INTENTION TO BIND BIDDERS TO ANY PROPOSED ACCELERATION OR EXTENSION.

WE DO NOT AGREE. OUR REVIEW OF THE CASE BID DISCLOSES THAT THE SUBMISSION OF THE ALTERNATE SCHEDULE SHOULD BE CONSTRUED AS A DEFINITE OFFER IN LIEU OF THE REQUIRED DELIVERY SCHEDULE. THERE IS NOTHING IN THE CASE BID WHICH EVIDENCES A FIRM OBLIGATION TO COMPLY WITH THE REQUIRED DELIVERY SCHEDULE. IN OUR VIEW, CASE HAS A CHOICE OF DELIVERY SCHEDULES - ONE OF THOSE CHOICES BEING THE NONRESPONSIVE ALTERNATE SCHEDULE. THE NEW NOTE 3 IN AMENDMENT 0002 PROVIDES NOT ONLY FOR ACCELERATION OR EXTENSION OF THE FIRST ARTICLE TEST REPORT, BUT ALSO THE DELIVERY SCHEDULE SUBJECT TO VARIOUS CONDITIONS. THIS, PLUS NOTE 2'S ACCELERATION PROVISIONS, REASONABLY LEADS TO THE CONCLUSION THAT BIDDERS COULD PROPOSE AN ALTERNATE DELIVERY SCHEDULE SO LONG AS IT COMPLIED WITH THE DELIVERY REQUIREMENTS. WE BELIEVE THAT CASE'S ALTERNATE OR SUBSTITUTE DELIVERY SCHEDULE WAS THE ONLY VIABLE, ALBEIT, NONRESPONSIVE, SCHEDULE REMAINING IN ITS BID. THERE WAS NO OPERATIVE CLAUSE IN THE IFB TO PERMIT A CONSTRUCTION THAT IF CASE'S ALTERNATE DELIVERY SCHEDULE WAS UNACCEPTABLE, THE REQUIRED DELIVERY SCHEDULE WOULD GOVERN. SEE 50 COMP. GEN. 379 (1970); AND 46 ID. 307, SUPRA.

THEREFORE, THE AWARD MADE TO CASE SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT.

HOWEVER, NO CORRECTIVE ACTION SHOULD BE TAKEN ON OUR RECOMMENDATION WHICH WOULD BE BASED ON THE IFB, AS AMENDED. NOTE 2 TO THE IFB, QUOTED ABOVE, PERMITTED ACCELERATION IN END ITEM DELIVERY IF (1) EQUAL ACCELERATION FOR THE DATA CLIN'S AND THE FIRST ARTICLE TESTING CLIN, AND (2)"*** PRIOR APPROVAL OF THE PROCURING CONTRACTING OFFICER IS OBTAINED." THUS, BIDDERS WERE INVITED TO DEVIATE FROM THE REQUIRED DELIVERY SCHEDULE AT THE RISK OF HAVING THAT DEVIATION REJECTED BY THE PROCURING CONTRACTING OFFICER. THE IFB FAILED TO STIPULATE ANY STANDARDS OR CRITERIA REGARDING THE APPROVAL OR DISAPPROVAL OF AN ACCELERATED DELIVERY SCHEDULE SUBMITTED BY A BIDDER. BIDDERS WERE AT A LOSS TO DETERMINE WITH ANY DEGREE OF CERTAINTY WHETHER A TENDERED DELIVERY SCHEDULE WOULD BE ACCEPTABLE. THE DECISION WOULD BE DEPENDENT UPON THE SUBJECTIVE DETERMINATION OF THE PROCURING CONTRACTING OFFICER AFTER BID OPENING. THE COMPETITIVE BIDDING SYSTEM REQUIRES THAT ALL BIDS BE MEASURED AGAINST THE SAME OBJECTIVELY DETERMINABLE STANDARDS SO THAT ALL BIDS MAY BE EVALUATED ON AN EQUAL BASIS SO AS TO ESTABLISH THE ACCEPTABILITY OF THE LOW BID.

WE RECOMMEND THAT THE PROCUREMENT SHOULD BE RESOLICITED WITH DELIVERY PROVISIONS WHICH ADEQUATELY INFORM BIDDERS AS TO WHAT DEVIATIONS THEREFROM ARE PERMITTED FROM THE REQUIRED DELIVERY SCHEDULE AND THE CONSEQUENCES OF THE SUBMISSION OF AN UNACCEPTABLE, DEVIATING, OR SUBSTITUTED DELIVERY SCHEDULE. SEE SECTIONS 1-305, ET SEQ., AND 2 401.1(B)(I) OF THE ARMED SERVICES PROCUREMENT REGULATION; 51 COMP. GEN. 518 (1972); ID. 635, SUPRA; 49 ID. 713 (1970); 46 ID. 745 (1967); AND 43 ID. 544 (1964).

IN VIEW OF OUR CONCLUSION THAT THE PROCUREMENT SHOULD BE RESOLICITED, IT IS NOT NECESSARY TO CONSIDER THE PROTEST OF DREXEL AGAINST AN AWARD TO MULTI-PALLET FORK LIFTS, INC. ..END :