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B-118428, APR 19, 1954

B-118428 Apr 19, 1954
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PRECIS-UNAVAILABLE OCTAGON PROCESS INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22. THE OPENING OF BIDS WAS SCHEDULED FOR NOVEMBER 18. "AS YOU WILL NOTE FROM THE LETTER OF THE TOPEKA DIRECTOR OF PROCUREMENT AND PRODUCTION (ENCLOSURE NO. 1). "IT IS QUITE APPARENT FROM THE RECORD THAT THIS BIDDER'S TELEGRAPHIC MODIFICATION OF HIS ORIGINAL BID WAS SO PHRASED AS PROPERLY TO RAISE A QUESTION IN THE BUYER'S MIND. IT IS EQUALLY APPARENT. THAT FURTHER CHECKING WITH THE BIDDER PRIOR TO AWARD COULD HAVE RESOLVED THE AMBIGUITY IN THE BIDDER'S FAVOR. WE NOW RECOGNIZE THAT SUCH A CHECK SHOULD HAVE BEEN MADE. AWARD WAS MADE ON DECEMBER 30 TO THE R.M. WHICH ARE THE SUBJECT OF THIS PROTEST.

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B-118428, APR 19, 1954

PRECIS-UNAVAILABLE

OCTAGON PROCESS INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22, 1954, PROTESTING THE ACTION OF THE DEPARTMENT OF THE AIR FORCE IN REFUSING TO MAKE AN AWARD OF A CONTRACT TO YOU ON ITEM 2 OF INVITATION NO. 14-604 54-121.

YOU CONTEND THAT YOU DID NOT RECEIVE THE AWARD AS LOW BIDDER BECAUSE OF AN ERROR IN EVALUATING THE DRUM GAGE AND PROTEST THAT THE BUYER HAD NOT REQUESTED YOUR CLARIFICATION THEREOF PRIOR TO REJECTING YOUR BID.

THERE NOW HAS BEEN RECEIVED FROM THE DEPUTY FOR PROCUREMENT AND PRODUCTION, DEPARTMENT OF THE AIR FORCE, A REPORT WHICH STATES, IN PART, THAT:

"IN VIEW OF THE PROTEST OF OCTAGON PROCESS, INCORPORATED, THIS DEPARTMENT HAS CAREFULLY REVIEWED THE PROCUREMENT ACTION IN THIS CASE. THE INVITATION FOR BIDS REQUIRED, WITH RESPECT TO PACKAGING OF ITEM 2, THAT CONTAINERS BE 55 GALLON METAL DRUMS, 16 GAUGE, CONFORMING TO SPEC. JAN-P- 110. OCTAGON PROCESS, INC. SUBMITTED A BID, DATED NOVEMBER 16, 1953, WHICH COMPLIED WITH THOSE SPECIFICATIONS. THE OPENING OF BIDS WAS SCHEDULED FOR NOVEMBER 18, 1953, AT 1:00 P.M. BY TELEGRAM AND FOLLOW-UP LETTER DATED NOVEMBER 17, 1953, THIS BIDDER CHANGED THE PRICES QUOTED IN ITS ORIGINAL BID AND ALSO STATED 'WITH REGARD TO PACKAGING REQUIREMENTS ON 55 GALLON DRUMS, WE PROPOSE TO FURNISH A DRUM CONFORMING TO JAN-P-110, 1CC 17C'.

"AS YOU WILL NOTE FROM THE LETTER OF THE TOPEKA DIRECTOR OF PROCUREMENT AND PRODUCTION (ENCLOSURE NO. 1), THE BUYER CONSTRUED THIS STATEMENT AS CHANGING THE ORIGINAL BID WITH RESPECT TO PACKAGING AND CHECKED WITH THE PACKAGING DIVISION OF THE DEPOT TO ASCERTAIN THE EFFECT OF THESE PROVISIONS. ON BEING ADVISED BY PACKAGING PERSONNEL THAT DRUMS CONFORMING TO 1CC-17C DID NOT CONFORM TO THE REQUIREMENTS OF JAN-P-110, THE BUYER REJECTED THE BID AS NON-RESPONSIVE. THE CORRESPONDENCE DISCLOSES FURTHER CHECKS WITH DEPOT AND HEADQUARTERS, AMC, PACKAGING PERSONNEL, IN RESPONSE TO MR. ROSENBERG'S LATER INQUIRIES, RESULTING IN DIFFERENCES OF OPINION AMONG AIR FORCE PERSONNEL AS TO THE EFFECT OF THIS BIDDER'S STIPULATION WITH RESPECT TO PACKAGING.

"IT IS QUITE APPARENT FROM THE RECORD THAT THIS BIDDER'S TELEGRAPHIC MODIFICATION OF HIS ORIGINAL BID WAS SO PHRASED AS PROPERLY TO RAISE A QUESTION IN THE BUYER'S MIND, AND THAT THE BUYER MADE A CONSCIENTIOUS EFFORT TO DETERMINE THE EFFECT OF THE BIDDER'S LANGUAGE THROUGH THE APPROPRIATE AIR FORCE CHANNELS. THE RECORD ALSO DISCLOSES A HISTORY OF DIFFICULTIES WITH THIS COMPANY CONCERNING COMPLIANCE WITH PACKAGING REQUIREMENTS WHICH, COUPLED WITH THE ADVICE RECEIVED FROM PACKAGING PERSONNEL, EXPLAIN THE BUYER'S ACTION IN DETERMINING TO REJECT THE BID AS NON-RESPONSIVE. IT IS EQUALLY APPARENT, HOWEVER, IN THE LIGHT OF THE INFORMATION WHICH SUBSEQUENTLY BECAME KNOWN, THAT FURTHER CHECKING WITH THE BIDDER PRIOR TO AWARD COULD HAVE RESOLVED THE AMBIGUITY IN THE BIDDER'S FAVOR, AND WE NOW RECOGNIZE THAT SUCH A CHECK SHOULD HAVE BEEN MADE.

"FOLLOWING REJECTION OF COMPLAINANT'S BID, AWARD WAS MADE ON DECEMBER 30 TO THE R.M. HOLLINGSHEAD CORPORATION FOR TEN ITEMS, INCLUDING ITEMS 2A AND 2B, WHICH ARE THE SUBJECT OF THIS PROTEST. HOLLINGSHEAD TO DATE HAS DELIVERED SOME FORTY PER CENT OF THE SUPPLIES CALLED FOR, OF THE VALUE OF SOME $70,000."

THE REFERRED-TO REPORT OF THE TOPEKA DIRECTOR OF PROCUREMENT AND PRODUCTION CONCURS IN THE BUYER'S REJECTION OF YOUR BID AS NON RESPONSIVE TO THE ADVERTISED PACKAGING REQUIREMENTS AND EXPLAINS THAT, ALTHOUGH THE BUYER HAD BEEN ERRONEOUSLY ADVISED THROUGH APPROPRIATE AIR FORCE CHANNELS THAT THE ICC 17C SPECIFICATIONS REQUIRED ONLY 18 GAGE DRUMS INSTEAD OF THE 16 GAGE DRUMS CALLED FOR BY JAN-P-110, IT WAS FURTHER DEVELOPED THAT THE FORMER SPECIFICATIONS DO NOT COMPLY WITH THE MORE RIGID REQUIREMENTS OF THE LATTER WITH RESPECT TO "GASKETS" AND "FINISH." IN EXPLANATION OF THE BUYER'S FAILURE TO VIEW THE BID AS AMBIGUOUS, THAT REPORT FURTHER STATES THAT:

"3. WITH RESPECT TO THE BIDDERS COMMENTS REGARDING THE BUYER OBTAINING CLARIFICATION PRIOR TO REJECTION OF HIS BID, SUCH CLARIFICATION WAS NOT REQUESTED BECAUSE AS STATED IN THE FACTS ABOVE, THERE WAS NO QUESTION BUT THAT THE PURPOSE OF TELEGRAPHIC MODIFICATION TO THE BID, IN ADDITION TO PRICE CHANGES, WAS ALSO TO CHANGE THE DRUM SPECIFICATIONS. IF THIS WAS NOT THE INTENT, THERE WAS NO POINT IN BIDDER REFERRING TO THE PACKAGING REQUIREMENTS IN PREFERENCE TO ANY OF THE OTHER TERMS, CONDITIONS, OR SPECIFICATIONS OF HIS ORIGINAL BID."

INASMUCH AS THE PACKAGING REQUIREMENTS OF JAN-P-110 WERE SPECIFIED IN THE INVITATION AND ARE MORE STRINGENT THAN THOSE OF ICC-17C, YOUR PROPOSAL "TO FURNISH A DRUM CONFORMING TO JAN-P-110, ICC-17C" CONSTITUTED A MATERIAL DEVIATION FROM THE INVITATION IF IT COULD BE CONSTRUED AS GIVING YOU THE RIGHT TO MEET THE LESSER REQUIREMENTS OF ICC-17C. THE CONTRACTING OFFICER BELIEVED IT SHOULD BE SO CONSTRUED, AND CONSIDERING THE MANNER IN WHICH IT WAS WORDED, TOGETHER WITH THE DEPARTMENT'S PAST EXPERIENCE WITH YOUR COMPANY CONCERNING PACKAGING REQUIREMENTS, HIS INTERPRETATION IN THAT REGARD WAS NOT UNREASONABLE, ARBITRARY OR CAPRICIOUS.

YOU CONTEND THAT YOU SHOULD HAVE BEEN CONSULTED WITH REGARD TO ANY DOUBT AS TO HOW THE OFFER SHOULD HAVE BEEN INTERPRETED BUT A BID SO AMBIGUOUS THAT ITS INTENDED MEANING COULD NOT BE REASONABLY DETERMINED WITHOUT CONSULTING THE BIDDER HIMSELF WOULD BE LEGALLY DEFECTIVE. IN ADDITION TO THE OBVIOUS FACT THAT SUCH A BID COULD NOT BE CONSIDERED AS CONFORMING TO THE INVITATION TO BID AS REQUIRED BY SECTION 3(B) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT 21 APPLICABLE HERE, TO PERMIT A BIDDER TO DECIDE FOR HIMSELF WHETHER HE INTENDED TO MEET THE ESSENTIAL REQUIREMENTS OF THE ADVERTISED INVITATION WOULD BE TANTAMOUNT TO GIVING HIM AN ELECTION TO WITHDRAW HIS BID AFTER OPENING, AN ADVANTAGE NOT ENJOYED BY OTHER BIDDERS IN THE ABSENCE OF BONA FIDE ERROR IN THEIR BIDS.

ACCORDINGLY, ON THE BASIS OF THE FACTS REPORTED IN THIS CASE, THIS OFFICE WOULD NOT BE WARRANTED IN QUESTIONING THE CONTRACTING OFFICER'S ACTION IN DISREGARDING YOUR BID. AS A MATTER OF FACT, THE DEPARTMENT OF THE AIR FORCE FURTHER REPORTS THAT, PRIOR TO THE REJECTION OF YOUR BID AND AWARD OF THE CONTRACT TO R.M. HOLLINGSHEAD CORPORATION, A FACILITY CAPABILITY SURVEY HAD BEEN INITIATED WITH RESPECT TO YOUR FIRM'S ABILITY TO PERFORM THE WORK INVOLVED AND THAT ON THE BASIS OF THE RESULTS PRODUCED "IT APPEARS THAT OCTAGON PROBABLY WOULD NOT HAVE RECEIVED THE AWARD ON THE PROTESTED ITEMS EVEN IF ITS BID HAD NOT BEEN REJECTED FOR THE REASONS STATED ABOVE."

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