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B-168761, APRIL 1, 1970, 49 COMP. GEN. 649

B-168761 Apr 01, 1970
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FAILURE TO COMPLY THE NONRESPONSIVENESS OF THE LOW BID OF A CANADIAN FIRM OFFERING A 60 DAY BID ACCEPTANCE PERIOD UNDER AN INVITATION SPECIFYING A PERIOD OF "AT LEAST 90 DAYS" IS NOT OVERCOME BY THE FACT THAT THE BID SUBMITTED TO THE CANADIAN COMMERCIAL CORPORATION (CCC). WAS ACCOMPANIED BY A CCC FORM OFFERING TO KEEP THE BID FIRM FOR AN ADDITIONAL 10 DAYS. AS THE BIDDER'S INTENT TO BE BOUND BY THE SPECIFIED BID ACCEPTANCE PERIOD WAS NOT SUBMITTED TO DOD BEFORE BID OPENING. CCC IS CONSIDERED THE PRIME CONTRACTOR AND. THE LOW BID IS NOT FOR CONSIDERATION. EVEN THOUGH THE GOVERNMENT IS DEPRIVED OF LOWER PRICES. WHICH STATED THE BID IS "IN RESPONSE TO SOLICITATION NO. *** " IS NOT SUFFICIENT TO OFFSET THE FAILURE OF THE BIDDER TO MEET THE BID ACCEPTANCE TERMS OF THE INVITATION.

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B-168761, APRIL 1, 1970, 49 COMP. GEN. 649

BIDS -- ACCEPTANCE TIME LIMITATION -- FAILURE TO COMPLY THE NONRESPONSIVENESS OF THE LOW BID OF A CANADIAN FIRM OFFERING A 60 DAY BID ACCEPTANCE PERIOD UNDER AN INVITATION SPECIFYING A PERIOD OF "AT LEAST 90 DAYS" IS NOT OVERCOME BY THE FACT THAT THE BID SUBMITTED TO THE CANADIAN COMMERCIAL CORPORATION (CCC), THE QUASI-GOVERNMENTAL AGENCY THAT HANDLES THE BIDS OF CANADIAN FIRMS WITH THE DEPARTMENT OF DEFENSE (DOD), WAS ACCOMPANIED BY A CCC FORM OFFERING TO KEEP THE BID FIRM FOR AN ADDITIONAL 10 DAYS, OR A TOTAL OF 100 DAYS, AS THE BIDDER'S INTENT TO BE BOUND BY THE SPECIFIED BID ACCEPTANCE PERIOD WAS NOT SUBMITTED TO DOD BEFORE BID OPENING. CCC IS CONSIDERED THE PRIME CONTRACTOR AND, THEREFORE, SUBJECT TO THE ORDINARY REQUIREMENTS REGARDING BID RESPONSIVENESS, AND THE OFFER TO MEET THE BID ACCEPTANCE TERMS OF THE INVITATION NOT COMING WITHIN THE EXCEPTIONS THAT PERMIT LATE BID MODIFICATIONS, THE LOW BID IS NOT FOR CONSIDERATION, EVEN THOUGH THE GOVERNMENT IS DEPRIVED OF LOWER PRICES. CONTRACTS -- SPECIFICATIONS -- FAILURE TO FURNISH SOMETHING REQUIRED -- BLANKET OFFER TO CONFORM TO SPECIFICATIONS THE LANGUAGE OF A COVERING LETTER ACCOMPANYING A BID THAT FAILED TO MEET THE "AT LEAST 90 DAYS" ACCEPTANCE PERIOD SPECIFIED IN THE INVITATION, WHICH STATED THE BID IS "IN RESPONSE TO SOLICITATION NO. *** " IS NOT SUFFICIENT TO OFFSET THE FAILURE OF THE BIDDER TO MEET THE BID ACCEPTANCE TERMS OF THE INVITATION. THE COVERING LETTER FAILED TO CURE THE NONRESPONSIVENESS OF THE BID AS IT DID NOT EXPRESSLY OR IMPLIEDLY INDICATE THAT THE BIDDER WAS OFFERING THE REQUIRED BID ACCEPTANCE PERIOD OF AT LEAST 90 DAYS. BIDS -- DISCARDING ALL BIDS -- COMPELLING REASONS ONLY THE QUESTION WHETHER THE DIFFERENCE BETWEEN A NONRESPONSIVE BID AND THE LOWEST ACCEPTABLE BID IS SUFFICIENTLY SUBSTANTIAL TO JUSTIFY REJECTION OF ALL BIDS AND TO READVERTISE THE PROCUREMENT IS FOR DETERMINATION BY THE CONTRACTING OFFICER. PARAGRAPH 2-404.1(B)(VI) OF THE ARMED SERVICES PROCUREMENT REGULATION PERMITS CANCELLATION OF INVITATIONS FOR BIDS AFTER OPENING BUT PRIOR TO AWARD WHERE THE ACTION IS CONSISTENT WITH PARAGRAPH 2 -404.1(A), WHICH RESTRICTS REJECTION OF ALL BIDS TO SITUATIONS WHERE THE REASON FOR THE CANCELLATION OF THE INVITATION IS COMPELLING, AND THE CONTRACTING OFFICER DETERMINES IN WRITING THAT ALL OTHERWISE ACCEPTABLE BIDS RECEIVED ARE AT UNREASONABLE PRICES.

TO THE SECRETARY OF THE NAVY, APRIL 1, 1970:

WE REFER TO A REPORT DATED FEBRUARY 9, 1970 (REFERENCE AIR OOC:CJM/JT), AND LETTER DATED MARCH 20, 1970 (REFERENCE AIR OOC:CJM/SKR), FROM COUNSEL, NAVAL AIR SYSTEMS COMMAND (NAVAIR), REPORTING ON THE PROTEST OF THE CANADIAN COMMERCIAL CORPORATION (BRISTOL AEROSPACE (1968) LIMITED, WINNIPEG, MANITOBA, CANADA) AGAINST AWARD TO ANY OTHER COMPANY UNDER INVITATION FOR BIDS (IFB) NO. N00019 70-B-0014, ISSUED ON SEPTEMBER 17, 1969, BY THE NAVAL AIR SYSTEMS COMMAND, WASHINGTON, D.C. TWO OTHER FIRMS, HERCULES, INC., AND THIOKOL CHEMICAL CORPORATION, HAVE SUBMITTED PROTESTS REGARDING THE SUBJECT PROCUREMENT.

THE INVITATION REQUESTED BIDS FOR THE MANUFACTURE AND SUPPLY OF MK36 MOD 5 AND MK 50 MOD 0 ROCKET MOTORS AND DATA APPLICABLE THERETO. BIDS WERE OPENED ON DECEMBER 3, 1969, AND THE SIX BIDS RECEIVED, AS EVALUATED (INCLUDING RENTAL FACTORS), WERE AS FOLLOWS:

BIDDER TOTAL PRICE

CANADIAN COMMERCIAL CORP. (BRISTOL AEROSPACE

(1968) LIMITED) $4,393,688.00

HERCULES, INC. 4,503,420.14

THIOKOL CHEMICAL CORPORATION 4,601,443.00

BERMITE DIVISION, WHITAKER CORP. 4,915,616.00

NORTH AMERICAN ROCKWELL 5,360,280.00

UNITED AIRCRAFT CORP. 5,450,564.00

THE INVITATION CONTAINED STANDARD FORM 33A (JULY 1966) ENTITLED "SOLICITATION INSTRUCTIONS AND CONDITIONS" AND STANDARD FORM 33 (JULY 1966) ENTITLED "SOLICITATION, OFFER AND AWARD." OF RELEVANCE TO OUR CONSIDERATION HERE, THE "OFFER" PORTION OF THE LATTER FORM PROVIDES AS FOLLOWS:

IN COMPLIANCE WITH THE ABOVE, THE UNDERSIGNED OFFERS AND AGREES, IF THIS OFFER IS ACCEPTED WITHIN-------CALENDAR DAYS (60 CALENDAR DAYS UNLESS A DIFFERENT PERIOD IS INSERTED BY THE OFFEROR) FROM THE DATE FOR RECEIPT OF OFFERS SPECIFIED ABOVE, TO FURNISH ANY OR ALL ITEMS UPON WHICH PRICES ARE OFFERED, AT THE PRICE SET OPPOSITE EACH ITEM, DELIVERED AT THE DESIGNATED POINTS, WITHIN THE TIME SPECIFIED IN THE SCHEDULE.

IMMEDIATELY FOLLOWING STANDARD FORM 33, A PAGE OF "ADDITIONAL INFORMATION" IS PROVIDED WHEREIN BIDDERS ARE CAUTIONED: "SEE 'BID ACCEPTANCE PERIOD' PROVISION IN THE ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS ATTACHED HERETO." PARAGRAPH 45 OF THE ADDITIONAL SOLICITATION INSTRUCTIONS STATES:

(45) BID ACCEPTANCE PERIOD (APR. 1969) BIDS OFFERING LESS THAN NINETY (90) DAYS FOR ACCEPTANCE BY THE GOVERNMENT FROM THE DATE SET FOR OPENING OF BIDS WILL BE CONSIDERED NONRESPONSIVE AND WILL BE REJECTED (ASPR 2- 201(A)(XV)). BIDDERS ARE CAUTIONED THAT THE PERIOD SPECIFIED ABOVE MUST BE ENTERED IN THE APPROPRIATE SPACE UNDER OFFER ON THE SOLICITATION FORM (STANDARD FORM 33).

THE TWO LOWEST BIDDERS (BRISTOL AEROSPACE AND HERCULES, INC.) DID NOT ENTER IN THE APPROPRIATE SPACE ON STANDARD FORM 33 A BID ACCEPTANCE PERIOD OF AT LEAST 90 DAYS AND, IN VIEW OF SUCH DEFICIENCY, THE CONTRACTING OFFICER DETERMINED THAT THE TWO LOWEST BIDS WERE NONRESPONSIVE. BOTH BIDDERS HAVE ASSERTED THAT SUCH A FAILURE SHOULD NOT MAKE THEIR BIDS NONRESPONSIVE. THE ATTORNEYS FOR BRISTOL, IN BRIEFS FILED WITH OUR OFFICE, CONTEND THAT THE BRISTOL BID, TOGETHER WITH THE ACCOMPANYING DOCUMENTATION WHICH WAS TRANSMITTED TO THE CANADIAN COMMERCIAL CORPORATION (CCC), INDICATES A BID ACCEPTANCE PERIOD OF AT LEAST 90 DAYS AND THEREFORE IS RESPONSIVE.

HERCULES, INC., ARGUES THAT ITS FAILURE TO COMPLY WITH THE 90-DAY ACCEPTANCE PERIOD MAY BE CONSIDERED AS A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE. HERCULES STATES THAT SUCH A RESULT WOULD BE CONSISTENT WITH THE DEFINITION OF A MINOR IRREGULARITY APPEARING IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-405. FURTHER, IN A LETTER TO OUR OFFICE DATED FEBRUARY 16, 1970, HERCULES CONTENDS THAT ITS BID IS RESPONSIVE SINCE ITS COVER LETTER WHICH ACCOMPANIED THE HERCULES BID STATED, UNEQUIVOCALLY AND WITHOUT EXCEPTION, THAT THE BID IS "IN RESPONSE TO SOLICITATION NO. N00019-70-B 0014." OUR OFFICE HAS ALSO RECEIVED A PROTEST FROM THIOKOL CHEMICAL CORPORATION PROTESTING ANY AWARD TO CCC, HERCULES, OR ANY COMPANY OTHER THAN THIOKOL. THIOKOL CONTENDS THAT THE BID OF BRISTOL AS SUBMITTED BY CCC TO NAVAIR AND THE BID OF HERCULES ARE NONRESPONSIVE AND THAT THIOKOL IS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER AND THEREFORE IS ENTITLED TO THE AWARD.

THE RECORD INDICATES THAT A BID PREPARED BY BRISTOL, A CANADIAN FIRM, AND SUBMITTED TO NAVAIR BY CCC--A CORPORATION OWNED AND OPERATED BY THE CANADIAN GOVERNMENT--WAS THE LOWEST BID RECEIVED BY NAVAIR UNDER THE SOLICITATION. AS ABOVE INDICATED, THE BRISTOL BID WHICH WAS RECEIVED BY NAVAIR DID NOT CONTAIN A BID ACCEPTANCE PERIOD OF AT LEAST 90 DAYS AND THE CONTRACTING OFFICER DETERMINED THE BID TO BE NONRESPONSIVE.

THE ATTORNEYS FOR BRISTOL STATE THAT ON JANUARY 27, 1970, THEY MET WITH COUNSEL, NAVAIR, AND EXHIBITED TO COUNSEL, NAVAIR, "CONCLUSIVE EVIDENCE," FROM AN UNIMPEACHABLE SOURCE, THAT THE BID SUBMITTED BY BRISTOL CONTAINED A PROVISION WHICH REQUIRED BRISTOL TO KEEP ITS BID FIRM FOR A PERIOD 10 DAYS IN EXCESS OF THE BID ACCEPTANCE REQUIREMENTS OF THE SUBJECT NAVAIR INVITATION, I.E., AN ACCEPTANCE PERIOD OF 100 DAYS. WE ARE ADVISED THAT AT THE CONCLUSION OF THAT CONFERENCE COUNSEL, NAVAIR, INDICATED THAT THIS MATTER INVOLVED SOME UNIQUE ASPECTS, AND THAT IT SHOULD, IN HIS OPINION, BE DECIDED BY OUR OFFICE.

WHEN AN INVITATION PROVISION REQUIRES A BID TO REMAIN OPEN FOR ACCEPTANCE FOR A SPECIFIED PERIOD TO BE CONSIDERED FOR AWARD, OUR OFFICE HAS HELD THAT SUCH PROVISION IS MATERIAL AND NONCOMPLIANCE THEREWITH RENDERS THE BID NONRESPONSIVE. WE ARE ADVISED BY NAVAIR THAT, WHILE THE RULE OF LAW WHICH IS GENERALLY APPLICABLE TO THIS TYPE OF SITUATION HAS BEEN ESTABLISHED (CITING B-165690, FEBRUARY 3, 1969; B 164851, OCTOBER 17, 1968; 47 COMP. GEN. 769 (1968); B-161628, JULY 20, 1967; AND 46 COMP. GEN. 418 (1966)), IT IS ITS POSITION THAT THE FACTS INVOLVED IN CCC'S SUBMISSION OF BRISTOL'S BID PRESENT A UNIQUE SITUATION AS TO WHICH A DIFFERENT RULE OF LAW MAY BE APPLICABLE.

THE RECORD INDICATES THAT THE BID AS SUBMITTED BY BRISTOL TO CCC WAS ACCOMPANIED BY A COVER LETTER DATED NOVEMBER 28, 1969, ADDRESSED TO NAVAIR. THIS LETTER STATED THAT THE SOLICITATION, OFFER, AND SOLICITATION AMENDMENTS WERE ATTACHED. IT ALSO REQUESTED PROGRESS PAYMENTS AND STATED THAT "NO EXCEPTIONS ARE TAKEN TO THE BID." IN PROCESSING BRISTOL'S BID, CCC DETACHED THIS LETTER BEFORE FORWARDING THE BID TO NAVAIR. THE ATTORNEYS FOR BRISTOL CONTEND THAT THE STANDARD BID FORM OF CCC (CCC FORM 3B) WHICH WAS SUBMITTED BY BRISTOL TO CCC PROVIDES THAT THE BID OF BRISTOL TO CCC IS "VALID FOR TEN DAYS BEYOND THE PERIOD CITED IN THE U.S. INVITATION FOR BID." IT IS THE OPINION OF CCC, BASED ON ITS STANDARD FORM AND THE LETTER ADDRESSED TO NAVAIR, THAT BRISTOL HAS MADE A FIRM OFFER TO CCC WITH AN ACCEPTANCE PERIOD OF 100 DAYS. ASSUMING THAT BRISTOL HAS MADE AN OFFER TO CCC WHICH HAS AN ACCEPTANCE PERIOD OF AT LEAST 90 DAYS, THE ISSUE FOR OUR CONSIDERATION IS THE LEGAL EFFECT OF THIS FIRM OFFER WHICH WAS MADE TO CCC BUT NOT CONTAINED IN BRISTOL'S BID AS TIMELY SUBMITTED TO NAVAIR BY CCC.

OUR OFFICE HAS CONSISTENTLY HELD THAT THE BID ACCEPTANCE PERIOD IS A MATERIAL TERM AND THAT THE OFFER OF A SHORTER BID ACCEPTANCE PERIOD THAN THAT REQUIRED BY THE SOLICITATION RENDERS THE BID MATERIALLY NONRESPONSIVE. FURTHER, SUCH NONRESPONSIVENESS MAY NOT BE WAIVED AS A MINOR INFORMALITY AS REQUESTED BY HERCULES. SEE B-165690, FEBRUARY 3, 1969, AND CASES CITED THEREIN. OUR OFFICE HAS ALSO STATED THAT A BID WHICH IS NONRESPONSIVE ON ITS FACE MAY NOT BE CONSIDERED FOR CORRECTION REGARDLESS OF THE CIRCUMSTANCES. 38 COMP. GEN. 819 (1959); 40 ID. 132 (1960).

UNDER THE RULES SET FORTH ABOVE, THE BID OF BRISTOL MUST BE CONSIDERED TO BE NONRESPONSIVE UNLESS THE BRISTOL "COVER LETTER" AND/OR THE CCC FORM 3B CAN BE CONSIDERED AS CURING THE DEFECT IN THE BID ITSELF. THE ATTORNEYS FOR BRISTOL, IN A BRIEF DATED FEBRUARY 5, 1970, CONTEND THAT THE BRISTOL BID, SUBMITTED IN RESPONSE TO THE CCC INVITATION FOR BIDS, INCORPORATED A BID ACCEPTANCE PERIOD 10 DAYS IN EXCESS OF THE 90-DAY PERIOD REQUIRED BY THE NAVAIR INVITATION FOR BIDS. IT IS FURTHER CONTENDED THAT THE CONTRACTING OFFICER CAN PROPERLY CONSIDER THE EVIDENCE WHICH ESTABLISHES THAT FACT WITHOUT DOING VIOLENCE TO THE PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM.

THE ATTORNEYS FOR THIOKOL CONTEND THAT THE BRISTOL COVER LETTER DATED NOVEMBER 28, 1969, CANNOT BE CONSIDERED UNDER THE MISTAKE IN BID PROCEDURES OR AS A LATE BID MODIFICATION. FURTHER, THE ATTORNEYS FOR THIOKOL CONTEND THAT EVEN IF THE BRISTOL LETTER BE CONSIDERED AS PART OF ITS BID, IT WOULD NOT BE EFFECTIVE TO REMEDY THE NONRESPONSIVENESS OF THE BID. IT IS CONTENDED THAT THE LANGUAGE OF THE LETTER, "NO EXCEPTIONS ARE TAKEN TO THE BID," IS TOO VAGUE AND UNCERTAIN TO EXPRESS AN INTENTION TO OFFER A BID ACCEPTANCE PERIOD DIFFERENT THAN THE EXPRESS 60-DAY ACCEPTANCE PERIOD PROVIDED FOR IN THE INVITATION "UNLESS A DIFFERENT PERIOD IS INSERTED BY THE OFFEROR." THIOKOL'S ATTORNEYS STATE THAT THE NAVY'S RELIANCE ON CCC FORM 3B AS EFFECTIVELY OFFERING A BID ACCEPTANCE PERIOD OF 90 OR 100 DAYS IS TOTALLY MISPLACED, QUITE APART FROM THE FACT THAT THE FORM 3B WAS NOT SUBMITTED TO NAVAIR PRIOR TO BID OPENING.

IN SUPPORT OF THE NAVY'S POSITION THAT THE FACTS INVOLVED IN THE SUBMISSION OF CCC'S BID PRESENT A UNIQUE SITUATION, WE ARE ADVISED AS FOLLOWS:

AS STATED IN THE ANNUAL REPORT FOR CCC, "THE PRINCIPAL PURPOSE OF THE CORPORATION IS TO ACT ON BEHALF OF THE CANADIAN GOVERNMENT AS THE CONTRACTING AGENCY WHEN OTHER COUNTRIES AND INTERNATIONAL AGENCIES WISH TO PURCHASE DEFENSE AND OTHER SUPPLIES AND SERVICES FROM CANADA ON A GOVERNMENT-TO-GOVERNMENT BASIS."

IN THE SUBMISSION OF A BID, CCC IS CHARACTERIZED AS THE PRIME CONTRACTOR, BUT IT IS A GOVERNMENTAL AGENCY OF CANADA AND RECEIVES NO MONETARY GAIN FROM ANY CONTRACTS OF THIS NATURE.

BRISTOL AEROSPACE (1968) LIMITED IS THE CANADIAN FIRM WHICH PREPARED AND SUBMITTED THE BID TO CCC AND, IF THE CONTRACT WERE AWARDED TO CCC, WOULD DO 100% OF THE WORK.

FOR MANY PURPOSES, CCC CAN BE CHARACTERIZED AS AN AGENT FOR THE DEPARTMENT OF DEFENSE. CCC PROVIDES MANY SERVICES WITHOUT COST TO THE DEPARTMENT OF DEFENSE, WHICH WOULD OTHERWISE BE PERFORMED BY DOD.

SOME OF THESE SERVICES ARE SET FORTH IN THE LETTER OF AGREEMENT APPEARING AS ASPR 6-506, AND INCLUDE: ASSURANCE THAT ALL FIRST-TIER SUBCONTRACTS WILL BE PLACED IN ACCORDANCE WITH THE PRACTICES, POLICIES AND PROCEDURES OF THE GOVERNMENT OF CANADA, DETERMINE AND RETURN "EXCESS PROFITS" TO THE APPROPRIATE MILITARY DEPARTMENTS, PROVIDE FOR THE AUDIT OF COSTS AND PROFITS WHERE APPLICABLE, AND PROVIDE INSPECTION PERSONNEL AND FACILITIES. IN ADDITION, ASPR 6-504.2 AND 6-504.3 PROVIDE THAT SUCH CONTRACTS WILL BE ADMINISTERED THROUGH CCC.

ASPR 1-904.4 PROVIDES THAT ANY FIRM PROPOSED BY CCC AS ITS SUBCONTRACTOR WILL BE PRESUMED TO BE "RESPONSIBLE" UNDER THE PROVISIONS OF ASPR 1-906.

PURSUANT TO ASPR 8-216, CCC HAS THE AUTHORITY TO SETTLE ALL CANADIAN SUBCONTRACTS WHICH ARE TERMINATED, WITHOUT LIMITATION AS TO DOLLAR AMOUNT AND WITHOUT THE APPROVAL OR RATIFICATION OF THE TCO.

PURSUANT TO AN AGREEMENT BETWEEN THE DEPARTMENT OF DEFENSE AND THE DEPARTMENT OF DEFENSE PRODUCTION (CANADA), ASPR 6-504.2(A) PROVIDES THAT "INDIVIDUAL CONTRACTS COVERING PURCHASES FROM SUPPLIERS LOCATED IN CANADA

*** SHALL BE MADE WITH THE CANADIAN COMMERCIAL CORPORATION *** ." THIS AGREEMENT AND RESTRICTION ARE MEANT TO ADVANCE THE MUTUAL CANADIAN AMERICAN INTERESTS AS SET FORTH IN ASPR 6-501.

THUS, CCC IS INTERPOSED BETWEEN THE U.S. MILITARY DEPARTMENT AND ANY CANADIAN FIRM THAT WISHES TO BID ON AN IFB DUE TO ASPR 6-504.2(A). THE CHARACTER WHICH CCC TAKES ON DUE TO THIS INTERPOSITION IS UNIQUE.

THE CHARACTERIZATION OF CCC AS THE PRIME CONTRACTOR DOES NOT FULLY DESCRIBE THE TRUE RELATIONSHIPS BETWEEN CCC AND BRISTOL AND BETWEEN CCC AND NAVAIR.

CCC'S POSITION IS ONE OF ADMINISTRATION. ITS OFFER TO NAVAIR IS LIMITED TO THE OFFER MADE TO IT BY BRISTOL.

IN THE SOLICITATION PROCESS CCC CAN BEST BE DESCRIBED AS A PROCEDURAL AVENUE. IT IS THE CONDUIT THROUGH WHICH A CANADIAN FIRM'S BID MUST PASS IN ORDER TO COMPETE FOR A NAVAIR CONTRACT.

IT WOULD SEEM THAT THE PRINCIPLE WHICH UNDERLIES THE DECISION IN 41 COMP. GEN. 1658 28 AUG 1961, WOULD BE PROPER FOR APPLICATION IN THE PRESENT CASE. THIS CASE STATED THAT WHERE THE " *** ERROR WAS MADE BY AN INDEPENDENT AGENCY OVER WHICH THE BIDDER EXERCISED NO SUPERVISORY CONTROL" AND THE INTENDED BID, BUT FOR THE ERROR, CAN BE CONCLUSIVELY SHOWN, THEN THE REASON FOR THE RULE PRECLUDING CORRECTION OF A MISTAKE DOES NOT EXIST AND, THEREFORE, THE RULE IS INAPPLICABLE.

IN OUR OPINION, THE TERMS AND CONDITIONS OF THE NAVAIR INVITATION FOR BIDS ARE CONTROLLING IN DECIDING WHETHER THE BIDS OF BRISTOL AND HERCULES ARE RESPONSIVE. THE ATTORNEYS FOR BRISTOL CONTEND THAT THE "COVER LETTER" AND THE CCC FORM 3B ARE PART OF BRISTOL'S BID. SINCE NEITHER THE COVER LETTER NOR THE CCC FORM 3B WERE SUBMITTED TO NAVAIR WITH BRISTOL'S BID, THEY MUST BE CONSIDERED, IF AT ALL, AS LATE BID MODIFICATIONS. THE GENERAL RULE FOLLOWED BY OUR OFFICE IS THAT THE BIDDER HAS THE RESPONSIBILITY FOR THE DELIVERY OF HIS BID TO THE PROPER PLACE AT THE PROPER TIME, AND THAT EXCEPTIONS TO THE RULE REQUIRING REJECTION OF LATE BID MODIFICATIONS MAY BE PERMITTED ONLY IN THE EXACT CIRCUMSTANCES PROVIDED FOR IN THE INVITATION. 37 COMP. GEN. 35 (1957); B-144842, MARCH 10, 1961. PARAGRAPH 22 OF THE ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDES, IN PERTINENT PART, AS FOLLOWS:

(A) OFFERS AND MODIFICATIONS OF OFFERS (OR WITHDRAWALS THEREOF, IF THIS SOLICITATION IS ADVERTISED) RECEIVED AT THE OFFICE DESIGNATED IN THE SOLICITATION AFTER THE EXACT HOUR AND DATE SPECIFIED FOR RECEIPT WILL NOT BE CONSIDERED UNLESS: (1) THEY ARE RECEIVED BEFORE AWARD IS MADE; AND EITHER (2) THEY ARE SENT BY REGISTERED MAIL, OR BY CERTIFIED MAIL FOR WHICH AN OFFICIAL DATED POST OFFICE STAMP (POSTMARK) ON THE ORIGINAL RECEIPT FOR CERTIFIED MAIL HAS BEEN OBTAINED AND IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO DELAY IN THE MAILS, FOR WHICH THE OFFEROR WAS NOT RESPONSIBLE; OR (3) IF SUBMITTED BY MAIL (OR BY TELEGRAM IF AUTHORIZED) IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION; PROVIDED, THAT TIMELY RECEIPT AT SUCH INSTALLATION IS ESTABLISHED UPON EXAMINATION OF AN APPROPRIATE DATE OR TIME STAMP (IF ANY) OF SUCH INSTALLATION, OR OF OTHER DOCUMENTARY EVIDENCE OF RECEIPT (IF READILY AVAILABLE) WITHIN THE CONTROL OF SUCH INSTALLATION OR OF THE POST OFFICE SERVING IT. HOWEVER, A MODIFICATION OF AN OFFER WHICH MAKES THE TERMS OF AN OTHERWISE SUCCESSFUL OFFER MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME IT IS RECEIVED AND MAY THEREAFTER BE ACCEPTED.

IN SIGNING ITS BID, BRISTOL AGREED TO BE BOUND BY THE ABOVE-CITED TERMS. WE NOTE THAT THE CCC FORM 3B, WHICH THE ATTORNEYS FOR BRISTOL CONTEND INDICATES BRISTOL'S INTENTION TO KEEP ITS BID OPEN FOR AT LEAST 90 DAYS, WAS NOT SUBMITTED BY CCC TO NAVAIR WITH BRISTOL'S BID AND APPARENTLY IT WAS NOT INTENDED TO BE SUBMITTED TO NAVAIR WITH BRISTOL'S BID. EVEN IF THE FORM 3B WAS INTENDED TO BE SUBMITTED TO NAVAIR, IT COULD NOT NOW BE CONSIDERED SINCE THE CIRCUMSTANCES INVOLVED IN ITS LATE SUBMISSION DO NOT COME WITHIN ANY OF THE EXCEPTIONS SPECIFIED IN THE INVITATION FOR CONSIDERING LATE BID MODIFICATIONS. ALSO, BRISTOL'S "COVER LETTER" WHICH WAS NOT SUBMITTED BY CCC TO NAVAIR PRIOR TO BID OPENING MAY NOT BE CONSIDERED AS A LATE BID MODIFICATION UNDER THE INVITATION PROVISIONS. SEE ASPR 2-303.2.

NO AUTHORITY HAS BEEN CITED TO SUPPORT THE PROPOSITION THAT CCC IS EXEMPT FROM THE ORDINARY REQUIREMENTS REGARDING BID RESPONSIVENESS. NEITHER ARE WE AWARE THAT CCC MAY BE ACCORDED ANY SPECIAL CONSIDERATION, WHETHER AS A QUASI-GOVERNMENTAL AGENCY OR OTHERWISE. AS REGARDS THE CONTENTION THAT CCC ACTS AS AN AGENT OF THE DEPARTMENT OF DEFENSE IN THE HANDLING OF BIDS FROM CANADIAN FIRMS, ASPR 6-504.1(B)(1) PROVIDES THAT "THE CANADIAN COMMERCIAL CORPORATION SHOULD NORMALLY BE THE PRIME CONTRACTOR" AND IT APPEARS TO US THAT CCC WAS ACTING IN THAT CAPACITY IN THIS CASE.

WE CANNOT APPLY THE RATIONALE OF OUR DECISION REPORTED IN 41 COMP. GEN. 165 (1961) TO THE FACTS IN THIS CASE. IN THAT DECISION, IT WAS HELD, QUOTING FROM THE SYLLABUS AS FOLLOWS:

AN ERROR MADE BY A TELEGRAPH COMPANY IN FAILING TO TRANSMIT TO A CONTRACTING AGENCY THE CORRECT AMOUNT OF A BID REDUCTION OFFER WHICH WOULD HAVE MADE THE OFFEROR THE LOW BIDDER IS AN ERROR MADE BY AN INDEPENDENT AGENT OVER WHICH THE BIDDER DOES NOT HAVE ANY SUPERVISORY CONTROL SO THAT IN SUCH CASES WHERE THE EVIDENCE CONCLUSIVELY ESTABLISHES THE CORRECT MODIFICATION AND THAT THE MESSAGE WAS TIMELY MADE, THE RULE AGAINST CORRECTION OF ERRORS WHEN THE RESULT IS THE DISPLACEMENT OF ANOTHER BIDDER IS NOT FOR APPLICATION AND, THEREFORE, CORRECTION OF THE BID IS PERMITTED.

IN THAT CASE, OUR OFFICE PERMITTED CORRECTION, AFTER BID OPENING, OF AN ERRONEOUSLY TRANSMITTED TELEGRAPHIC MODIFICATION ON THE BASIS THAT THE ERROR HAD BEEN MADE BY AN INDEPENDENT AGENCY OVER WHICH THE BIDDER HAD NO SUPERVISORY CONTROL. THAT DECISION DOES NOT APPLY HERE BECAUSE THE MODIFICATION CONSIDERED THERE ONLY REDUCED THE BID PRICE AND SO, UNLIKE THE PRESENT CASE, THE BID AS MODIFIED COULD BE CONSIDERED SINCE THERE WAS NOT INVOLVED A CORRECTION OF A NONRESPONSIVE BID.

WHILE APPLICATION OF THE INVITATION PROVISIONS RELATING TO THE HANDLING OF "LATE" BID MODIFICATIONS MAY RESULT IN THE FAILURE OF THE GOVERNMENT TO RECEIVE THE BENEFIT OF LOWER PRICES, SUCH PROVISIONS PRESERVE AND MAINTAIN THE INTEGRITY OF THE FORMAL COMPETITIVE BIDDING PROCEDURES. THEREFORE, THE BID OF BRISTOL WHICH WE CONCLUDE PROVIDED ONLY FOR A 60-DAY BID ACCEPTANCE PERIOD MUST, ON THE RECORD BEFORE US, BE CONSIDERED AS NONRESPONSIVE TO THE 90-DAY BID ACCEPTANCE PERIOD SPECIFIED IN THE INVITATION.

WE ALSO BELIEVE THAT THE BID OF HERCULES IS NONRESPONSIVE. THE LANGUAGE CONTAINED IN HERCULES' COVER LETTER THAT THE BID IS "IN RESPONSE TO SOLICITATION NO. N00019-70-B-0014" IS NOT SUFFICIENT TO OFFSET ITS FAILURE TO MEET THE BID ACCEPTANCE TERMS OF THE INVITATION. IN OUR DECISION B- 150019, DECEMBER 5, 1962, WE HELD THAT A LETTER ACCOMPANYING A BID QUALIFIED THE BID AND RENDERED IT NONRESPONSIVE EVEN THOUGH THE LETTER STARTED WITH THE WORDS, IN ALL CAPS: "THIS LETTER DOES IN NO WAY QUALIFY MY BID." SIMILARLY, IN B-166284, APRIL 14, 1969, WE HELD THAT AN OVERALL OFFER TO CONFORM TO THE SPECIFICATIONS CAN CURE A BID DEVIATION ONLY IF THE OFFER MAKES IT PATENTLY CLEAR ON THE FACE OF THE BID THAT THE BIDDER DID IN FACT INTEND SO TO CONFORM. IN OUR VIEW, THE HERCULES COVER LETTER FAILED TO CURE THE NONRESPONSIVENESS OF ITS BID SINCE IT DID NOT EXPRESSLY OR IMPLIEDLY INDICATE THAT THE BIDDER WAS OFFERING THE REQUIRED BID ACCEPTANCE PERIOD OF AT LEAST 90 DAYS.

BRISTOL'S ATTORNEYS CONTEND THAT IF NEITHER ITS BID NOR THAT OF HERCULES IS CONSIDERED RESPONSIVE AND AWARD MAY NOT BE MADE TO EITHER OF THE TWO LOWEST BIDDERS, THEN THE PROPER PROCEDURE WOULD BE TO CANCEL THE INVITATION AND READVERTISE THE PROCUREMENT. THE BASIS FOR BRISTOL'S POSITION IS ITS CONTENTION THAT THE BID OF THE THIRD LOWEST BIDDER IS ALMOST A QUARTER OF A MILLION DOLLARS HIGHER THAN ITS BID. BRISTOL'S ATTORNEYS STATE THAT, WHILE OUR OFFICE HAS FREQUENTLY SAID THAT AN INVITATION SHOULD NOT BE CANCELED AFTER OPENING OF BIDS WITHOUT A COGENT REASON, WE HAVE HELD THAT "A SUBSTANTIAL PROSPECTIVE SAVING TO THE GOVERNMENT IS SUFFICIENT JUSTIFICATION FOR THE CANCELLATION OF AN INVITATION AFTER BID OPENING." B-143263, DECEMBER 22, 1960; B-151910, AUGUST 20, 1963; AND B-154324, AUGUST 28, 1964. ASPR 2-404.1(A) PROVIDES IN PART AS FOLLOWS:

THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. ***

ASPR 2-404.1(B)(VI) PERMITS THE CANCELLATION OF INVITATIONS FOR BIDS AFTER OPENING BUT PRIOR TO AWARD WHERE SUCH ACTION IS CONSISTENT WITH (A) ABOVE AND THE CONTRACTING OFFICER DETERMINES IN WRITING THAT ALL OTHERWISE ACCEPTABLE BIDS RECEIVED ARE AT UNREASONABLE PRICES.

WE ARE ADVISED THAT THE BID OF THIOKOL INCLUDES A RENTAL FACTOR WHICH WE UNDERSTAND AMOUNTS TO $158,962. THE RECORD BEFORE US INDICATES THAT THIS FIGURE IS AN EVALUATION FACTOR WHICH IS ADDED TO EQUALIZE THE COMPETITIVE ADVANTAGE OF A BIDDER UTILIZING GOVERNMENT PROPERTY ON A RENT-FREE BASIS AND DOES NOT REPRESENT AN ACTUAL EXPENDITURE BY THE GOVERNMENT ON THIS PROCUREMENT.

HOWEVER, AS PROVIDED BY THE REGULATION REFERRED TO ABOVE, THE QUESTION WHETHER THE DIFFERENCE BETWEEN BRISTOL'S BID AND THE LOWEST ACCEPTABLE BID IS SUFFICIENTLY SUBSTANTIAL TO JUSTIFY REJECTION OF ALL BIDS AND READVERTISEMENT IS FOR DETERMINATION BY THE CONTRACTING OFFICER.

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