B-191616, JUN 8, 1978

B-191616, JUN 8, 1978

DIGEST: 1. WHERE SOLICITATION PROVIDES THAT GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS, ACCEPTANCE OF BID OFFERING 10 PERCENT ADDITIONAL DISCOUNT IF ALL ITEMS BID ON ARE AWARDED IS PROPER WHERE IT RESULTS IN LESS COST TO GOVERNMENT THAN IF SEPARATE AWARDS ARE MADE FOR INDIVIDUAL ITEMS. 2. DISCOUNT OFFERED IN COVER LETTER ACCOMPANYING BID MAY BE CONSIDERED SINCE BIDS OR PARTS OF BIDS MAY BE SUBMITTED IN CORRESPONDENCE ACCOMPANYING BID FROM PROVIDING NO EXCEPTION IS TAKEN TO SOLICITATION PROVISIONS. 3. FAILURE TO READ ALOUD AT BID OPENING ALL OR PART OF BID IS MERELY DEVIATION AS TO FORM AND DOES NOT PRECLUDE ACCEPTANCE OF BID.

MOIR RANCH AND CONSTRUCTION COMPANY; MULINO CONSTRUCTION COMPANY, INC.:

MOIR RANCH AND CONSTRUCTION COMPANY (MOIR) AND MULINO CONSTRUCTION COMPANY, INC. (MULINO) PROTEST THE AWARD OF A CONTRACT TO PAPE BROTHERS, INC. (PAPE) UNDER SOLICITATION R6-1-78-17, ISSUED BY THE U.S. DEPARTMENT OF AGRICULTURE, FOREST SERVICE, DESCHUTES NATIONAL FOREST, OREGON, FOR THE RENTAL OF VARIOUS SPECIFIED EQUIPMENT INCLUDING CRAWLER TRACTORS, TRUCK TRACTORS, AND FORKLIFT TRUCKS.

PAPE BID ON 8 OF 10 LISTED ITEMS. ALTHOUGH PAPE'S INDIVIDUAL ITEM PRICES WERE LOW ON ONLY THREE ITEMS, WITH MOIR AND MULINO BEING THE LOW BIDDERS ON ITEMS 1 AND 7, RESPECTIVELY, PAPE SUBMITTED A COVER LETTER WITH ITS BID STIPULATING THAT IN ADDITION TO THE RENTAL RATES QUOTED, IT WOULD OFFER AN ADDITIONAL 10 PERCENT DISCOUNT IF ALL OF THE EIGHT ITEMS ON WHICH IT BID WERE ACCEPTED BY THE GOVERNMENT.

UPON EVALUATION, TAKING THE 10 PERCENT DISCOUNT INTO CONSIDERATION, THE CONTRACTING OFFICER DETERMINED THAT AWARD ON THE BASIS OF PAPE'S EXTRA DISCOUNT OFFER FOR THE EIGHT ITEMS WOULD RESULT IN A TOTAL COST TO THE GOVERNMENT OF $108,390.30, COMPARED WITH A TOTAL COST OF $112,208 IF AWARD WERE MADE ON THE BASIS OF EACH LOW INDIVIDUAL ITEM PRICE.

NEITHER MOIR NOR MULINO TAKES EXCEPTION TO THE VALIDITY OF THIS COMPUTATION; HOWEVER, THEY QUESTION THE LEGAL PROPRIETY OF AN AWARD ON THE BASIS OF SUCH AN OFFERED DISCOUNT. IT IS ARGUED THAT NOTHING IN THE SOLICITATION PACKAGE INDICATED THAT A BID COULD BE SUBMITTED IN THIS MANNER, AND THAT THE 10 PERCENT DISCOUNT (OFFERED IN THE COVER LETTER TO PAPE'S BID) WAS NOT SUBMITTED ON THE APPROPRIATE PAGE ON THE BID FORM. IS ALSO ARGUED THAT CONSIDERATION OF THE DISCOUNT IS INAPPROPRIATE BECAUSE AT THE PUBLIC BID OPENING THE LETTER WAS NOT READ IN ITS "ENTIRETY" AFTER IT WAS INDICATED THAT PAPE WAS LOW ON ONLY THREE ITEMS. IN ADDITION, MOIR TAKES EXCEPTION TO A STATEMENT BY THE CONTRACTING OFFICER THAT ITS OFFERED EQUIPMENT DOES NOT MEET THE SPECIFICATIONS.

THE SOLICITATION INSTRUCTIONS AND CONDITIONS (SF 33A, MARCH 1969), INCLUDED IN THE SOLICITATION SPECIFIED:

"10. AWARD OF CONTRACT. (A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE OFFEROR WHOSE OFFER CONFORMING TO THE SOLICITATION WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

"(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS." SUPPLEMENTAL INSTRUCTIONS TO SF 33A FURTHER PROVIDED:

"CLAUSE 9 - DISCOUNTS

"IF ANY DISCOUNT IS OFFERED IN EXCESS OF 5 PERCENT, THE ENTIRE DISCOUNT WILL BE CONSIDERED AS A TRADE OR SPECIAL DISCOUNT WHICH SHALL BE AVAILABLE TO THE GOVERNMENT AS A REDUCTION FROM THE PRICES QUOTED, WITHOUT REGARD TO WHETHER INVOICES ARE ACTUALLY PAID WITHIN THE DESIGNATED PERIOD."

WHERE, AS HERE, A SOLICITATION CONTAINS THE PARAGRAPH 10 PROVISIONS SET OUT ABOVE, IT IS CLEAR THAT A BIDDER MAY SUBMIT AND HAVE CONSIDERED FOR AWARD A BID ON AN AGGREGATE GROUP OF ITEMS AND THAT THE GOVERNMENT MAY AVAIL ITSELF OF AN "AGGREGATE" BID PRICE THAT IS MORE ADVANTAGEOUS THAN A COMBINATION OF INDIVIDUAL BID ITEM PRICES, EVEN THOUGH PARTIAL AWARDS, SUCH AS TO MOIR FOR ITEM 1 AND MULINO FOR ITEM 7, COULD BE MADE AT A LOWER UNIT COST FOR THOSE ITEMS. SEE GENERAL FIRE EXTINGUISHER CORPORATION, 54 COMP.GEN. 416 (1974), 74-2 CPD 278, AND CITATIONS THEREIN.

IT IS ALSO WELL SETTLED THAT A BIDDER, IN ADDITION TO OFFERING INDIVIDUAL ITEM PRICES, MAY OFFER A QUANTITY DISCOUNT OR AN OVERALL AGGREGATE PRICE WHICH IS LOWER THAN THE SUM OF HIS INDIVIDUAL ITEM BIDS, AND THAT THE GOVERNMENT MAY ACCEPT SUCH AN OFFER WHEN IT IS ADVANTAGEOUS TO THE GOVERNMENT TO DO SO. SEE 40 COMP.GEN. 518 (1961); 48 ID. 256 (1968). MOREOVER, DESPITE THE PROTESTER'S ASSERTION THAT THE SOLICITATION DID NOT ALERT BIDDERS TO THE POSSIBILITY OF OFFERING SUCH AN OVERALL DISCOUNT, WE THINK CLAUSE 9 CLEARLY INDICATED THE GOVERNMENT'S INTENTION TO EVALUATE BIDS ON THE BASIS OF ANY SUCH OFFERED DISCOUNTS.

WITH RESPECT TO THE USE OF THE COVER LETTER, FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.301(C) (1964 ED. AMEND 118) ACKNOWLEDGES THAT BIDS MAY BE SUBMITTED BY WAY OF A LETTER AS LONG AS NO EXCEPTION IS TAKEN TO ANY OF THE TERMS AND CONDITIONS OF THE SOLICITATION. IN THIS REGARD, OUR OFFICE HAS RULED THAT TO BE CONSIDERED FOR AWARD, A BID NEED NOT BE SUBMITTED ON THE OFFICIAL BID FORM PROVIDED WITH THE IFB, BUT MAY BE SUBMITTED ON A COMPANY LETTERHEAD OR IN OTHER CORRESPONDENCE. SEE B-178559, JUNE 25, 1973. THEREFORE, CONSIDERATION OF PAPE'S 10 PERCENT ADDITIONAL DISCOUNT WAS NOT IMPROPER.

FINALLY, WHILE WE DO NOT FULLY UNDERSTAND WHAT IS MEANT BY THE ASSERTION THAT THE COVER LETTER WAS NOT READ IN ITS ENTIRETY SINCE THAT LETTER CONTAINS ONLY ONE SENTENCE, WE POINT OUT THAT A FAILURE TO READ ALL OR PART OF A BID AT BID OPENING IS ONLY A PROCEDURAL DEFECT WHICH DOES NOT PRECLUDE ACCEPTANCE OF THE BID. SEE EDMUND LEISING BUILDING CONTRACTOR, INC., B-184405, OCTOBER 29, 1975, 75-2 CPD 263.

ACCORDINGLY, WE CONCLUDE THAT ACCEPTANCE OF PAPE'S AGGREGATE BID, ON THE BASIS OF ITS OFFERED 10 PERCENT ADDITIONAL DISCOUNT, WAS PROPER. THEREFORE NEED NOT CONSIDER WHETHER THE EQUIPMENT OFFERED BY MOIR MEETS THE SPECIFICATIONS IN THE SOLICITATION.

THE PROTEST IS DENIED.