B-146233, AUG. 22, 1961

B-146233, AUG. 22, 1961

TO PERFECTION ELECTRONIC PRODUCTS COMPANY:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. ENG-11-184-61 AF-479- JD, ISSUED BY THE U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, ILLINOIS.

THE INVITATION, ISSUED ON APRIL 22, 1961, AS MODIFIED BY FOUR AMENDMENTS, REQUESTED BIDS FOR FURNISHING GENERATOR SETS, 2 KW, 15 VOLTS. THE PROCUREMENT WAS A SET-ASIDE FOR AWARD ONLY TO SMALL BUSINESS CONCERNS. THE INVITATION CONTAINED ITEM 1 FOR 1 UNIT F.O.B. COLUMBUS, OHIO, AND ITEM 1.1 WITH A BASIC QUANTITY OF 1,599 UNITS AND RANGE BIDDING COVERING 1,600 UNITS TO 2,800 UNITS. THE INVITATION FURTHER CONTAINED ITEM 1.1A COVERING AN OPTION QUANTITY OF 400 UNITS AND PROVIDED THAT SUCH OPTION MIGHT BE EXERCISED BY THE GOVERNMENT AT ANY TIME WITHIN 90 DAYS AFTER APPROVAL AND ACCEPTANCE OF THE PREPRODUCTION MODEL. NOTE 1 PROVIDED "IF BIDDER SUBMITS A BID ON ITEM 1.1 AS CALLED FOR UNDER THIS INVITATION, HE MUST ALSO SUBMIT A BID COVERING THE OPTION QUANTITY AS CALLED FOR UNDER ITEM 1.1A, OTHERWISE HIS BID WILL BE CONSIDERED AS NON-RESPONSIVE.' A PREPRODUCTION MODEL OF THE ITEM WAS REQUIRED TO BE COMPLETED AND READY FOR TEST NOT LATER THAN 180 DAYS AFTER AWARD OF THE CONTRACT. DELIVERIES OF THE BASIC REQUIREMENTS WERE TO COMMENCE NO LATER THAN 270 DAYS AFTER DATE OF AWARD.

PRIOR TO THE OPENING OF THE 12 BIDS RECEIVED IN RESPONSE TO THE INVITATION ON MAY 29, 1961, IT WAS ANNOUNCED THAT THE AWARD WOULD BE MADE FOR 2,600 UNITS. YOUR BID, QUOTING A SINGLE PRICE OF $297.50 PER UNIT FOR ALL QUANTITIES, WAS LOW. HOWEVER, NO QUOTATION WAS SUBMITTED BY YOU ON THE OPTION QUANTITY. THE NEXT LOW BID ON THE 2,600 QUANTITY WAS $420 PER UNIT. SUBSEQUENT TO THE OPENING OF THE BIDS YOU CALLED THE BUYER AND INQUIRED AS TO THE RESULTS OF THE BIDS RECEIVED AND YOU WERE FURNISHED THE NAMES OF THE BIDDERS AND PRICES BID. YOU WERE FURTHER ADVISED THAT YOUR BID DID NOT SET FORTH A PRICE FOR THE OPTION QUANTITY AND YOU STATED THAT THIS WAS AN OVERSIGHT. ALSO, DURING THE CONVERSATION WITH THE BUYER YOU WERE ADVISED THAT YOU HAD SUBMITTED THREE CARBON COPIES OF THE BID WHEREAS NORMALLY ONE ORIGINAL AND TWO CARBON COPIES WERE SUBMITTED. AT THE REQUEST OF THE BUYER YOU STATED THAT YOU WOULD MAIL, ADDRESSED TO THE BUYER'S ATTENTION, THE RIBBON COPY OF THE BID. BY LETTER DATED JUNE 8, 1961, THE BUYER RETURNED TO YOU, UNOPENED, AN ENVELOPE ADDRESSED TO HIS ATTENTION WHICH HE STATED HE ASSUMED CONTAINED THE RIBBON COPY OF THE BID, PURSUANT TO THE TELEPHONE CONVERSATION OF MAY 29, AND HE ADVISED THAT THE MATTER HAD BEEN DISCUSSED WITH LEGAL COUNSEL AND THEY DETERMINED THAT YOUR BID, AS SUBMITTED, WOULD BE CONSIDERED AND THERE WAS NO NECESSITY FOR YOU TO FURNISH THE RIBBON COPY. APPARENTLY IN SAID LETTER YOU CONFIRMED THE STATEMENT THAT THE FAILURE TO QUOTE ON THE OPTION QUANTITY WAS AN OVERSIGHT AND STATED THAT YOUR PRICE WAS $297.50.

DURING THE EVALUATION OF THE BIDS RECEIVED, IT WAS DETERMINED THAT YOUR BID WAS NOT RESPONSIVE SINCE YOU FAILED TO QUOTE A PRICE FOR THE OPTION QUANTITY UNDER ITEM 1.1A AS REQUIRED BY THE EXPRESS TERMS OF THE INVITATION. IT IS REPORTED THAT SINCE THE BID WAS DETERMINED TO BE NON- RESPONSIVE, NO PRE-AWARD QUESTIONAIRE WAS SENT TO YOU NOR WAS ANY PRE- AWARD INFORMATION REQUESTED IN CONNECTION WITH THIS PROCUREMENT, CONTRARY TO THE STATEMENTS MADE IN YOUR LETTER OF JUNE 27, 1961. IT IS REPORTED HOWEVER THAT A PRE-AWARD QUESTIONAIRE WAS FORWARDED TO YOU IN CONNECTION WITH ANOTHER PROCUREMENT WHICH WAS LATER CANCELLED AND ALL BIDS REJECTED.

IT IS A FUNDAMENTAL PRINCIPLE OF THE COMPETITIVE BID SYSTEM THAT IN ORDER TO BE CONSIDERED FOR AWARD A BID MUST COMPLY WITH THE REQUIREMENTS OF THE INVITATION FOR BIDS AT THE TIME OF THE BID OPENING. A BIDDER MAY NOT BE PERMITTED TO ADD TO OR MODIFY ITS BID AFTER THE OPENING TO MAKE THE BID COMPLY WITH THE REQUIREMENTS OF THE INVITATION, AND IT DOES NOT MATTER WHETHER THE FAILURE TO COMPLY WAS DUE TO INADVERTENCE, MISTAKE OR OTHERWISE. 30 COMP. GEN. 179; 36 ID. 535; 38 ID. 819. THE FAILURE TO QUOTE ON THE OPTION QUANTITY UNQUESTIONABLY WAS A MATERIAL DEVIATION. THE OPTION GAVE THE GOVERNMENT A SUBSTANTIVE AND VALUABLE RIGHT TO INCREASE THE QUANTITY BY 400 UNITS AT ANY TIME WITHIN 90 DAYS AFTER APPROVAL AND ACCEPTANCE OF THE PREPRODUCTION MODEL WHICH, UNDER THE TERMS OF THE LOW RESPONSIVE BID, WOULD BE NOT LESS THAN 210 DAYS AFTER AWARD. FURTHERMORE THE INVITATION SPECIFICALLY PROVIDED THAT A BIDDER "MUST ALSO SUBMIT A BID COVERING THE OPTION QUANTITY AS CALLED FOR UNDER ITEM 1.1A, OTHERWISE HIS BID WILL BE CONSIDERED AS NON-RESPONSIVE.' ACCORDINGLY, WE FIND NO LEGAL BASIS FOR QUESTIONING THE ADMINISTRATIVE DETERMINATION THAT YOUR BID WAS NOT RESPONSIVE AND, THEREFORE, NOT ELIGIBLE FOR AWARD UNDER THE INVITATION HERE INVOLVED.

IN VIEW OF THE DIFFERENCE BETWEEN YOUR BID PRICE AND THE AMOUNT QUOTED BY THE OTHER BIDDERS THERE REMAINS THE QUESTION WHETHER THE CONTRACTING OFFICER SHOULD HAVE REJECTED ALL BIDS AND READVERTISED. IT IS CONTENDED THAT THE REASON WHY YOU WERE ABLE TO SUBMIT SUCH A LOW PRICE WAS DUE TO THE FACT THAT ARRANGEMENTS HAD BEEN MADE WITH THE RECEIVER OF THE GENERAL EQUIPMENT COMPANY TO PURCHASE FOR $30,000 ASSETS HAVING A BOOK VALUE OF APPROXIMATELY $300,000, CONSISTING OF TEST EQUIPMENT, MACHINERY, TOOLS, DIES AND JIGS, THE GREATER PART BEING COMPONENT PARTS AND RAW MATERIALS WHICH COULD BASICALLY BE UTILIZED IN THE PRODUCTION OF THE UNITS REQUIRED UNDER THE INVITATION HERE INVOLVED. THE RECORD SHOWS THAT THE CONTRACTING OFFICER CONSIDERED YOUR CONTENTIONS BUT DETERMINED THAT THE PRICE QUOTED BY THE LOWEST RESPONSIVE BIDDER WAS REASONABLE IN COMPARISON WITH THE PRICES PREVIOUSLY PAID FOR THE ITEM AND WAS LOWER THAN 11 OTHER BIDS RECEIVED UNDER THE INSTANT INVITATION. WITH RESPECT TO TAKING OVER THE ASSETS OF THE GENERAL EQUIPMENT COMPANY, THE CONTRACTING OFFICER REPORTS THAT THE INFORMATION AVAILABLE TO HIM INDICATED THAT MATERIALS REMAINING AT THAT COMPANY AFTER DEFAULT PROCEEDINGS ON A CONTRACT FOR A SIMILAR ITEM WERE APPROXIMATELY SIX GASOLINE ENGINES, ABOUT 2,000 TUBULAR FRAMES, A FEW GENERATORS, A NUMBER OF CONTROL BOXES AND SOME WIRE, AND THAT A SUBSTANTIAL PORTION OF THESE LEFTOVER PARTS COULD NOT BE UTILIZED IN THE PRODUCTION OF THE GENERATOR SETS AS CALLED FOR UNDER THIS INVITATION, SINCE THEY DID NOT COMPLY WITH THE SPECIFICATION REQUIREMENTS APPLICABLE TO THE UNITS PRESENTLY INVOLVED.

THE QUESTION WHETHER AN INVITATION SHOULD BE CANCELLED AND READVERTISED IN THE HOPE OF OBTAINING A LOWER PRICE IS ONE PRIMARILY FOR THE CONSIDERATION OF THE CONTRACTING AGENCY. IN VIEW OF THE FACTS REPORTED WE FIND NO BASIS TO QUESTION THE ADMINISTRATIVE DETERMINATION MADE IN THIS RESPECT.