B-145867, JUNE 7, 1961, 40 COMP. GEN. 671

B-145867, JUNE 7, 1961, 40 COMP. GEN. 671

BIDS - REJECTION AND READVERTISEMENT - JUSTIFICATION A TYPOGRAPHICAL ERROR IN THE NUMERICAL REFERENCE TO THE WARRANTY PARAGRAPH IN AN INVITATION--- REFERENCE TO PARAGRAPH 3 INSTEAD OF 23--- WHICH ERROR DID NOT CAUSE THE SUBMISSION OF NONRESPONSIVE BIDS NOR MISLEAD EITHER OF THE TWO BIDDERS, ALTHOUGH ONE OF THE BIDDERS SUBSTITUTED HIS OWN COMMERCIAL WARRANTY FOR THE WARRANTY IN THE INVITATION THEREBY RENDERING HIS BID NONRESPONSIVE, DOES NOT JUSTIFY THE REJECTION OF ALL BIDS AFTER OPENING AND THE READVERTISEMENT OF THE ROCUREMENT; THEREFORE, THE SUBSEQUENT INVITATION SHOULD BE CANCELED AND AWARD MADE TO THE LOW RESPONSIVE BIDDER UNDER THE ORIGINAL INVITATION.

TO THE SECRETARY OF THE AIR FORCE, JUNE 7, 1961:

REFERENCE IS MADE TO THE LETTER OF MAY 26, 1961, FROM YOUR DEPUTY FOR PROCUREMENT AND PRODUCTION REGARDING THE PROTEST OF THE MIEHLE COMPANY, CHICAGO, ILLINOIS, AGAINST THE REJECTION OF ALL BIDS SUBMITTED IN RESPONSE TO AIR FORCE INVITATION NO. IFB 25-600-61-80 AND THE READVERTISING OF THE PROCUREMENT UNDER A NEW INVITATION, NO. IFB 25-600 61-121.

THE ORIGINAL INVITATION WAS ISSUED BY OFFUTT AIR FORCE BASE, NEBRASKA, ON FEBRUARY 3, 1961, FOR THE PROCUREMENT OF THREE OFFSET PRINTING PRESSES. TWO BIDS WERE RECEIVED AND OPENED ON FEBRUARY 23, 1961. THE MIEHLE COMPANY SUBMITTED A TOTAL BID PRICE $97,218 WITH A TRADE-IN ALLOWANCE OF $19,300 FOR THE PRESSES BEING REPLACED, OR A NET BID OF $77,918. THE HARRIS-SEYBOLD COMPANY, CLEVELAND, OHIO, SUBMITTED A TOTAL BID OF $99,288, WITH A TRADE-IN ALLOWANCE OF $19,500, OR A NET BID OF $79,788.

PARAGRAPH 23 OF THE SPECIFICATIONS ON PAGE 9 OF THE INVITATION PROVIDED AS FOLLOWS:

23. ANY FAULT DUE TO DEFECTIVE DESIGN, MATERIAL OR WORKMANSHIP WHICH MAY DEVELOP PRIOR TO THE COMPLETION OF THE FIRST YEAR OF ACTUAL SERVICE MUST BE MADE GOOD BY AND AT THE EXPENSE OF THE CONTRACTOR. HOWEVER, THE GOVERNMENT RESERVES THE RIGHT, DURING THIS PERIOD AND WHEN NECESSARY TO MAINTAIN PRODUCTION, TO MAKE EMERGENCY REPAIRS AND ADJUSTMENTS REQUIRED BY CONDITIONS OUTLINED ABOVE, AND TO CHARGE THE CONTRACTOR FOR ACTUAL COST OF THE WORK PERFORMED. FOR INFORMATIONAL PURPOSES, WORK PERFORMED BY GOVERNMENT EMPLOYEES WILL BE COSTED AT APPROXIMATELY $3.50 PER HOUR. ANY SPECIAL MACHINING, SHEET METAL WORK, WELDING OR SPECIALIZED WORK WHICH MUST BE PERFORMED BY A COMMERCIAL CONTRACTOR WILL BE COSTED AT THE ACTUAL INVOICE PRICE TO THE GOVERNMENT. SUPPLIES AND MATERIALS WILL BE COSTED AT GOVERNMENT COST PRICES. REIMBURSEMENT TO THE GOVERNMENT WILL BE MADE WITHIN THIRTY (30) DAYS AFTER RECEIPT OF GOVERNMENT BILLING BY CHECK MADE PAYABLE TO TREASURER OF THE UNITED STATES.

PARAGRAPH H ON PAGE 4 OF THE INVITATION STATED THE FOLLOWING:

H. WARRANTY: MINIMUM WARRANTY PERIOD FOR ITEMS SUPPLIED UNDER ANY CONTRACT RESULTING FROM THIS INVITATION FOR BIDS IS CONTAINED IN PARAGRAPH 3 OF SPECIFICATIONS.

WARRANTY OFFERED:

THE REFERENCE TO PARAGRAPH 3 WAS A TYPOGRAPHICAL ERROR AND SHOULD HAVE BEEN PARAGRAPH 23. THE MIEHLE COMPANY TOOK NO EXCEPTION TO THE WARRANTY PROVISIONS IN THE INVITATION. HARRIS-SEYBOLD WAS AWARE THAT THE REFERENCE SHOULD HAVE BEEN TO PARAGRAPH 23 AND IN SUBMITTING ITS BID INSERTED THE FOLLOWING PROVISION IN THE BLANK SPACE FOLLOWING THE WORDS "1WARRANTY OFFERED: "

IN LIEU OF PROVISION 23, WE WARRANT THIS EQUIPMENT FOR ONE YEAR AGAINST BREAKAGE OF PARTS DUE TO IMPERFECTION OF DESIGN, WORKMANSHIP OR MATERIAL, OUR OBLIGATION AND RESPONSIBILITY TO BE LIMITED SOLELY TO REPAIR OR REPLACEMENT OF SAID PARTS, ALL BROKEN PARTS REQUIRING REPLACEMENT TO BE RETURNED TO US, CARRIAGE CHARGES PREPAID.

THE CONTRACTING OFFICER FOUND THE BID OF HARRIS-SEYBOLD TO BE NON RESPONSIVE SINCE THE WARRANTY OFFERED IN LIEU OF PARAGRAPH 23 DID NOT MEET THE NEEDS OF THE GOVERNMENT TO INSURE CONTINUITY OF OPERATION OF THE PRESSES. THE SUBSTITUTE WARRANTY DID NOT COVER LABOR CHARGES NOR DID IT PERMIT THE GOVERNMENT TO MAKE REPAIRS NECESSARY TO KEEP THE PRESSES RUNNING EXCEPT AT GOVERNMENT COST, WITH THE PROBABILITY OF VOIDING THE WARRANTY BY SUCH ACTION.

HARRIS-SEYBOLD, BY TELEGRAM OF MARCH 6, 1961, AND LETTER OF MARCH 10, 1961, PROTESTED AWARD TO ANY BIDDER OTHER THAN ITSELF, CONTENDING THAT ITS BID WAS LOW IF A FACTOR OF 6 PERCENT WAS ADDED TO THE PRICE OF THE FOREIGN PRODUCT OFFERED BY THE MIEHLE COMPANY. HARRIS-SEYBOLD FURTHER CONTENDED THAT ITS BID WAS RESPONSIVE SINCE IT INTERPRETED THE WARRANTY PROVISIONS IN THE INVITATION TO ALLOW BIDDERS TO INSERT ANY SUBSTITUTE WARRANTY THEY MIGHT CHOOSE PROVIDED THE TERM OF THE WARRANTY WAS ONE YEAR.

THE CONTRACTING OFFICER DETERMINED THAT THE INTERPRETATION BY HARRIS SEYBOLD WAS CONTRARY TO THE REQUIREMENTS STATED IN THE INVITATION AND ITS BID SHOULD BE REJECTED AS NONRESPONSIVE. SINCE THE BID OF HARRIS SEYBOLD WAS NOT FOR CONSIDERATION, THE ADDITION OF THE EVALUATION FACTOR TO THE BID OF THE MIEHLE COMPANY WAS UNNECESSARY. THE CONTRACTING OFFICER RECOMMENDED AWARD TO THE MIEHLE COMPANY AS THE LOW RESPONSIVE BIDDER AND RECOMMENDED THAT THE PROTEST OF HARRIS-SEYBOLD BE DISALLOWED. THE DEPARTMENT OF THE AIR FORCE ALSO CONCLUDED THE SUBSTITUTE WARRANTY OFFERED BY HARRIS-SEYBOLD WAS NOT IN ACCORDANCE WITH THE INVITATION AND THEREFORE ITS BID WAS PROPERLY CONSIDERED NON RESPONSIVE. HOWEVER, THE DEPARTMENT FELT THAT THE PROVISIONS REGARDING THE WARRANTY COULD HAVE MISLED BIDDERS, AND INSTRUCTIONS WERE ISSUED TO REJECT BOTH BIDS, CANCEL THE INVITATION AND READVERTISE THE PROCUREMENT. THE NEW INVITATION WAS ISSUED ON MAY 8, 1961.

THE MIEHLE COMPANY, IN ITS LETTER OF MAY 12, 1961, PROTESTED THE CANCELLATION OF THE ORIGINAL INVITATION ON THE BASIS THAT THE ALLEGED AMBIGUITY DID NOT MISLEAD THE HARRIS-SEYBOLD COMPANY AND, SINCE THAT COMPANY KNEW WHAT IT WAS DOING WHEN IT OFFERED ITS COMMERCIAL WARRANTY, ALLOWING IT TO REBID ON THE SAME PROCUREMENT IS UNFAIR TO THE MIEHLE COMPANY WHICH SUBMITTED THE ONLY LOW RESPONSIBLE BID UNDER THE ORIGINAL INVITATION.

IN THE INSTANT CASE, WE AGREE WITH THE DEPARTMENT OF THE AIR FORCE AND THE CONTRACTING OFFICER THAT THE WARRANTY OFFERED BY HARRIS-SEYBOLD WAS NOT IN ACCORDANCE WITH THE WARRANTY REQUIREMENTS OF THE ORIGINAL INVITATION AND THAT ITS BID WAS PROPERLY CONSIDERED NON-RESPONSIVE. FURTHER AGREE WITH THE CONTRACTING OFFICER THAT THE INTERPRETATION BY HARRIS-SEYBOLD IS EXACTLY THE OPPOSITE OF THE PROPER INTERPRETATION OF THE INVITATION. ALTHOUGH PARAGRAPH H ON PAGE 4 OF THE INVITATION REFERS BOTH TO WARRANTY AND TO MINIMUM PERIOD, WE FIND NOTHING IN THAT PARAGRAPH TO JUSTIFY THE INTERPRETATION BY HARRIS-SEYBOLD THAT A BIDDER COULD OFFER A WARRANTY WHICH IGNORES THE REQUIREMENTS OF PARAGRAPH 23 AS LONG AS THE MINIMUM PERIOD IS ONE YEAR.

THE COURT OF CLAIMS STATED IN MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.1CL. 699, 719:

TO HAVE A SET OF BIDS DISCARDED AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE IS A SERIOUS MATTER, AND IT SHOULD NOT BE PERMITTED EXCEPT FOR COGENT REASONS.

THIS RULE IS RECOGNIZED IN PARAGRAPH 2-404.1 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH STATES: " 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.'

OUR OFFICE HAS RECOGNIZED THAT THE ADMINISTRATIVE AUTHORITY TO REJECT ANY OR ALL BIDS AND READVERTISE IS EXTREMELY BROAD AND ORDINARILY WE WILL NOT QUESTION SUCH ACTION. HOWEVER, IN CIRCUMSTANCES IN WHICH NO COGENT OR COMPELLING REASON EXISTED FOR REJECTED ALL BIDS, WE HAVE HELD SUCH REJECTION TO BE IMPROPER AND HAVE DIRECTED CANCELLATION OF AWARDS MADE AFTER READVERTISING. 39 COMP. GEN. 396; 36 ID. 62. IN THE INSTANT CASE, IT IS OUR OPINION THAT THE ALLEGED AMBIGUITY REGARDING WARRANTY IN THE ORIGINAL INVITATION WAS NOT SUFFICIENT TO MISLEAD BIDDERS AND CAUSE SUBMISSION TO ALL BIDS WAS NOT JUSTIFIED, THAT THE SUBSEQUENT INVITATION SHOULD BE CANCELED, AND THAT AWARD SHOULD BE MADE TO THE MIEHLE COMPANY UNDER THE ORIGINAL INVITATION.