B-162574, JAN. 10, 1968

B-162574, JAN. 10, 1968

BIDS - LOW BID REJECTION - QUANTITY DECISION TO SECY. OF NAVY ADVISING THAT ALTHOUGH REJECTION OF PROTESTANT'S BID WAS PROPER, THE REVIEW OF THE PROCUREMENT INDICATED THAT REJECTION OF LOW BID OF R-AND-D CONSTRUCTORS, INC., IS SUBJECT TO QUESTION. WHERE LOW BID WAS REJECTED BECAUSE IT OFFERED ONE MORE UNIT THAN REQUIRED AND AWARD WAS MADE AT PRICE OF $62,000 MORE, CONTRACTING OFFICER SHOULD HAVE EVALUATED LOW ON BASIS OF PRICE FOR QUANTITY REQUIRED SINCE UNDER INVITATION AND BID GOVT. WAS AUTHORIZED TO MAKE AN AWARD FOR A QUANTITY LESS THAN THE QUANTITY BID UPON. MOREOVER THERE WOULD HAVE BEEN NO OBJECTION TO AWARD FOR A LARGER NUMBER OF UNITS THAN THOSE SOLICITED IN CIRCUMSTANCES INVOLVED. STEPS SHOULD BE TAKEN TO PREVENT A RECURRENCE OF THE SITUATION.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER AIR:OOC:RBB/PML DATED DECEMBER 1, 1967, WITH ENCLOSURES, FROM THE COUNSEL, NAVAL AIR SYSTEMS COMMAND, REPORTING ON THE PROTEST OF AIRFLOTE, INC., AGAINST THE REJECTION OF ITS BID UNDER INVITATION FOR BIDS N00019-67-B-0152.

THERE IS ENCLOSED FOR YOUR INFORMATION A COPY OF OUR LETTER OF TODAY TO THE ATTORNEY FOR THE COMPANY DENYING THE PROTEST. ALTHOUGH WE FOUND NO BASIS TO QUESTION THE DETERMINATION TO REJECT THE AIRFLOTE BID, WE DO NOT BELIEVE THAT THE REJECTION OF THE LOW BID OF R-AND-D CONSTRUCTORS, INC. WAS APPROPRIATE UNDER THE CIRCUMSTANCES.

THE INVITATION SOLICITED BIDS FOR AIRCRAFT SHELTERS ON A UNIT PRICE BASIS. THE 83 UNITS ORIGINALLY ADVERTISED BY THE INVITATION WERE REDUCED TO 49 BY AMENDMENT. INSTEAD OF OFFERING 49 UNITS, R-AND-D CONSTRUCTORS OFFERED TO FURNISH 50 UNITS. ITS TOTAL BID IN THE AMOUNT OF $198,650 FOR 50 UNITS WAS LOWER THAN THE BID OF AIRFLOTE FOR 49 UNITS BY MORE THAN $61,000 AND LOWER THAN THE BID OF STROMBERG-CARLSON FOR 49 UNITS BY MORE THAN $62,000. HOWEVER, THE R-AND-D CONSTRUCTORS' BID WAS REJECTED AS NONRESPONSIVE BECAUSE IT OFFERED ONE MORE SHELTER THAN THE INVITATION, AS AMENDED, REQUIRED. THE AIRFLOTE BID WAS REJECTED BECAUSE THE CONTRACTING OFFICER DETERMINED THAT THE BIDDER WAS NOT RESPONSIBLE, WHICH DETERMINATION WAS AFFIRMED, IN EFFECT, BY THE SMALL BUSINESS ADMINISTRATION. THE AWARD WAS MADE TO STROMBERG CARLSON IN THE AMOUNT OF $261,125 FOR 49 UNITS, OR MORE THAN $62,000 IN EXCESS OF THE LOW BID PRICE FOR 50 UNITS.

THE BIDDING INFORMATION IN THE INVITATION "BID EVALUATION AND AWARD" CLAUSE PROVIDED THAT BIDS SHALL BE SUBMITTED ON THE BASIS OF FURNISHING THE QUANTITIES SPECIFIED IN THE SCHEDULE, BUT RESERVED TO THE GOVERNMENT THE RIGHT TO MAKE AN AWARD FOR A QUANTITY LESS THAN THE QUANTITY BID UPON IF MOST ADVANTAGEOUS TO THE GOVERNMENT. FURTHER, EVEN THOUGH R-AND-D CONSTRUCTORS OFFERED THE GOVERNMENT 50 UNITS ON A UNIT PRICE BASIS, IT DID NOT RESTRICT ITS BID TO AN AWARD FOR 50 UNITS.

IN 40 COMP. GEN. 321, 324, IT WAS STATED:

"WHETHER CERTAIN PROVISIONS OF AN INVITATION FOR BIDS ARE TO BE CONSIDERED MANDATORY OR DISCRETIONARY DEPENDS UPON THE MATERIALITY OF SUCH PROVISIONS AND WHETHER THEY WERE INSERTED FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT OR FOR THE PROTECTION OF THE RIGHTS OF BIDDERS. UNDER AN ADVERTISED PROCUREMENT ALL QUALIFIED BIDDERS MUST BE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT BIDS WHICH ARE BASED ON THE SAME SPECIFICATIONS, AND TO HAVE SUCH BIDS EVALUATED ON THE SAME BASIS. TO THE EXTENT THAT WAIVER OF THE PROVISIONS OF AN INVITATION FOR BIDS MIGHT RESULT IN FAILURE OF ONE OR MORE BIDDERS TO ATTAIN THE EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS WITH OTHER BIDDERS, SUCH PROVISIONS MUST BE CONSIDERED MANDATORY. HOWEVER, THE CONCEPT OF FORMALLY ADVERTISED PROCUREMENT, INSOFAR AS IT RELATES TO THE SUBMISSION AND EVALUATION OF BIDS, GOES NO FURTHER THAN TO GUARANTEE EQUAL OPPORTUNITY TO COMPETE AND EQUAL TREATMENT IN THE EVALUATION OF BIDS. IT DOES NOT CONFER UPON BIDDERS ANY RIGHT TO INSIST UPON THE ENFORCEMENT OF PROVISIONS IN AN INVITATION, THE WAIVER OF WHICH WOULD NOT RESULT IN AN UNFAIR COMPETITIVE ADVANTAGE TO OTHER BIDDERS BY PERMITTING A METHOD OF CONTRACT PERFORMANCE DIFFERENT FROM THAT CONTEMPLATED BY THE INVITATION OR BY PERMITTING THE BID PRICE TO BE EVALUATED UPON A BASIS NOT COMMON TO ALL BIDS. SUCH PROVISIONS MUST THEREFORE BE CONSTRUED TO BE SOLELY FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT AND THEIR ENFORCEMENT OR WAIVER CAN HAVE NO EFFECT UPON THE RIGHTS OF BIDDERS TO WHICH THE RULES AND PRINCIPLES APPLICABLE TO FORMAL ADVERTISING ARE DIRECTED. TO THIS END, THE DECISIONS OF THIS OFFICE HAVE CONSISTENTLY HELD THAT WHERE DEVIATIONS FROM, OR FAILURES TO COMPLY WITH, THE PROVISIONS OF AN INVITATION DO NOT AFFECT THE BID PRICE UPON WHICH A CONTRACT WOULD BE BASED OR THE QUANTITY OR QUALITY OF THE WORK REQUIRED OF THE BIDDER IN THE EVENT HE IS AWARDED A CONTRACT, A FAILURE TO ENFORCE SUCH PROVISION WILL NOT INFRINGE UPON THE RIGHTS OF OTHER BIDDERS AND THE FAILURE OF A BIDDER TO COMPLY WITH THE PROVISION MAY BE CONSIDERED AS A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE.'

IN VIEW OF THE FOREGOING, AND SINCE UNDER THE TERMS OF THE INVITATION AND THE BID, THE GOVERNMENT WAS AUTHORIZED TO MAKE AN AWARD FOR A QUANTITY LESS THAN THE QUANTITY BID UPON, THE CONTRACTING OFFICER SHOULD NOT HAVE REJECTED THE LOW BID BECAUSE IT OFFERED ONE MORE UNIT THAN THE INVITATION QUANTITY. PURSUANT TO THE INVITATION THE CONTRACTING OFFICER SHOULD HAVE EVALUATED THE BID ON THE BASIS OF THE PRICE OFFERED FOR 49 UNITS AND MADE AN AWARD TO SUCH LOW BIDDER, IF OTHERWISE RESPONSIVE AND RESPONSIBLE. MOREOVER, EVEN IN THE ABSENCE OF THE INVITATION TERMS REFERRED TO, WE WOULD SEE NO LEGAL OBJECTION TO AN AWARD FOR A LARGER NUMBER OF UNITS THAN THOSE SOLICITED IN CIRCUMSTANCES SUCH AS HERE INVOLVED.

WE SUGGEST THAT APPROPRIATE MEASURES BE TAKEN TO PREVENT A RECURRENCE OF THIS SITUATION.