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B-144477, DEC. 23, 1960

B-144477 Dec 23, 1960
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TO PHILADELPHIA WATCH SUPPLY CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 23. IT WAS STATED: "ATTACHED HEREWITH IS OUR BID FOR THE ABOVE MENTIONED INVITATION. THIS BID IS CONTINGENT UPON ASCERTAINING WHETHER ANYONE HAS PATENT RIGHTS COVERING THE CASE. FOUR OTHER BIDS WERE RECEIVED ON THE WATCHES. ALTHOUGH YOUR BID WAS THE LOWEST RECEIVED AS TO PRICE. SINCE IT WAS CONDITIONED UPON ASCERTAINING WHETHER ANY PATENTS WERE INVOLVED ON THE PLASTIC RING. IT WAS CONSIDERED BY THE CONTRACTING AGENCY AS NOT BEING RESPONSIVE TO THE TERMS AND CONDITIONS OF THE INVITATION AND WAS THEREFORE REJECTED. YOU CONTEND THAT YOUR INTERPRETATION OF THE ABOVE-QUOTED SECTION 2 404.2 IS THAT YOUR COMPANY DID NOT DISQUALIFY ITSELF BY THE INSERTION OF THE OBJECTIONABLE PATENT CONTINGENCIES CLAUSE BECAUSE SUCH CLAUSE HAD NO EFFECT AS TO PRICE.

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B-144477, DEC. 23, 1960

TO PHILADELPHIA WATCH SUPPLY CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 23, 1960, WITH ENCLOSURES, PROTESTING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION NO. 104-143-61, ISSUED BY THE SHIPS PARTS CONTROL CENTER, DEPARTMENT OF THE NAVY, MECHANICSBURG, PENNSYLVANIA.

THE INVITATION REQUESTED BIDS TO BE OPENED ON SEPTEMBER 2, 1960, FOR FURNISHING INCREMENT QUANTITIES OF 1,000, 2,000, AND 5,000, SUBMERSIBLE WRIST WATCHES. IN RESPONSE YOU SUBMITTED A BID DATED SEPTEMBER 1, 1960, OFFERING TO FURNISH THE WRIST WATCHES AT PRICES RANGING FROM $28.54 EACH TO $33.16 EACH. IN YOUR TRANSMITTAL LETTER OF THE SAME DATE, WHICH BECAME PART OF YOUR BID, IT WAS STATED:

"ATTACHED HEREWITH IS OUR BID FOR THE ABOVE MENTIONED INVITATION. THIS BID IS CONTINGENT UPON ASCERTAINING WHETHER ANYONE HAS PATENT RIGHTS COVERING THE CASE, OR MORE PARTICULARLY THE PLASTIC RING ATTACHED THERETO.'

FOUR OTHER BIDS WERE RECEIVED ON THE WATCHES.

ALTHOUGH YOUR BID WAS THE LOWEST RECEIVED AS TO PRICE, SINCE IT WAS CONDITIONED UPON ASCERTAINING WHETHER ANY PATENTS WERE INVOLVED ON THE PLASTIC RING, IT WAS CONSIDERED BY THE CONTRACTING AGENCY AS NOT BEING RESPONSIVE TO THE TERMS AND CONDITIONS OF THE INVITATION AND WAS THEREFORE REJECTED.

IN YOUR LETTER PROTESTING THE REJECTION OF YOUR BID YOU REFER TO THAT PORTION OF SECTION 2-404.2 OF ASPR (REJECTION OF INDIVIDUAL BIDS) WHICH READS AS FOLLOWS:

"/VI) LIMITS RIGHTS OF GOVERNMENT UNDER ANY CONTRACT CLAUSE.

"A LOW BIDDER MAY BE REQUESTED TO DELETE OBJECTIONABLE CONDITIONS FROM HIS BID PROVIDED THESE CONDITIONS DO NOT GO TO THE SUBSTANCE, AS DISTINGUISHED FROM THE FORM, OF THE BID, OR WORK AN INJUSTICE ON OTHER BIDDERS. A CONDITION GOES TO THE SUBSTANCE OF A BID WHERE IT AFFECTS PRICE, QUANTITY, QUALITY OR DELIVERY OF THE ITEMS OFFERED.'

YOU CONTEND THAT YOUR INTERPRETATION OF THE ABOVE-QUOTED SECTION 2 404.2 IS THAT YOUR COMPANY DID NOT DISQUALIFY ITSELF BY THE INSERTION OF THE OBJECTIONABLE PATENT CONTINGENCIES CLAUSE BECAUSE SUCH CLAUSE HAD NO EFFECT AS TO PRICE, QUANTITY, QUALITY OR DELIVERY OF THE ITEM OFFERED.

THE "PRICE, QUANTITY, QUALITY" RULE TO WHICH YOU REFER IS NOT DETERMINATIVE OF YOUR CASE. IN 34 COMP. GEN. 82, 83, WE CONSIDERED THE DECISIONS (20 COMP. GEN. 4 AND 30 ID. 179) WHICH DEVELOPED THE RULE AND POINTED OUT THAT THE RULE IS FOR APPLICATION ONLY IN CASES WHERE THE BIDDERS HAVE MADE OFFERS WHICH, ASIDE FROM CONSIDERATIONS OF RESPONSIVENESS OR FAIRNESS TO OTHER BIDDERS, CAN BE MADE BINDING BY ACCEPTANCE. HOWEVER, YOUR BID IS OBJECTIONABLE BECAUSE IT IS NOT A FIRM OFFER AND IT IMPOSES A RESERVATION, NOT REQUIRED OR PERMITTED BY THE INVITATION, THAT MUST BE SATISFIED BEFORE THE CONTRACTING OFFICER CAN CONVERT IT INTO A CONTRACT BY ACCEPTANCE. IN OTHER WORDS, YOU HAD THE ADVANTAGE OVER OTHER BIDDERS--- AFTER THE BIDS WERE OPENED AND DISCLOSED-- - OF DECIDING WHETHER OR NOT TO ASCERTAIN THE INFORMATION REFERRED TO IN YOUR LETTER AND THUS MAKE AN AWARD DEPEND UPON YOUR DECISION IN THAT REGARD. AND THE WAIVER OF THE QUALIFICATION AFTER BIDS ARE OPENED WOULD BE OBJECTIONABLE BECAUSE IT WOULD IN EFFECT BE TANTAMOUNT TO THE SUBMISSION OF A NEW BID ON THE INVITATION.

YOU ALSO CONTEND THAT YOU SHOULD BE AWARDED THE CONTRACT FOR THE REASON THAT AN EXAMINATION OF THE LETTER DATED AUGUST 29, 1960, WHICH WAS ATTACHED TO THE BID OF ALLEN V. TORNEK CO., THE NEXT LOWEST BIDDER, INDICATES THAT ITS PRODUCT ADMITTEDLY DOES NOT MEET THE REQUIREMENTS OF THE SPECIFICATIONS. THE REFERRED-TO STATEMENT IN THE LETTER OF AUGUST 29, 1960, IS AS FOLLOWS:

"WE HAVE SUBMITTED A SAMPLE OF OUR WATCH AS PER SPECIFICATION MIL-W 22176 (SHIPS) TO BUREAU OF SHIPS AND IT HAS MET ALL REQUIREMENTS WITH THE EXCEPTION OF THE MAGNETIC CHARACTERISTICS.'

IN REGARD TO THE LETTER OF AUGUST 29, 1960, FROM THE TORNEK CO., IT IS ADMINISTRATIVELY REPORTED THAT THE REFERRED-TO STATEMENT AS TO THE SUBMISSION OF A SAMPLE TO THE BUREAU OF SHIPS, WAS FOLLOWED BY ANOTHER STATEMENT BY THE COMPANY IN THE SAME LETTER TO THE EFFECT THAT UNDER THE INVITATION IT WAS BIDDING IN ACCORDANCE WITH THE SPECIFICATIONS AND THAT IT WOULD DELIVER TO THE DEPARTMENT OF THE NAVY, IF IT RECEIVED THE CONTRACT, A WATCH THAT WOULD MEET ALL OF THE REQUIREMENTS OF THE SPECIFICATIONS. IT IS FURTHER REPORTED THAT IN VIEW OF THE LATTER STATEMENT, THE TORNEK CO.'S BID WAS DETERMINED RESPONSIVE BY THE SPARE PARTS CONTROL CENTER. WE CONCUR WITH THE ADMINISTRATIVE OFFICE'S OPINION THAT THE TORNEK CO.'S BID IS RESPONSIVE TO THE INVITATION.

IN VIEW OF THE FOREGOING, THERE IS FOUND NO PROPER BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE ADMINISTRATIVE OFFICE IN REJECTING YOUR BID UNDER INVITATION NO. 104-143-61.

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