B-119039, MARCH 30, 1954, 33 COMP. GEN. 421

B-119039: Mar 30, 1954

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BIDS - ACCEPTANCE OR REJECTION - DEVIATION FROM ADVERTISED SPECIFICATIONS - FAILURE TO STATE WHETHER BID PRICE WAS FIRM OR SUBJECT TO ESCALATION UNDER AN INVITATION TO BID WHICH PROVIDES THAT THE BIDDER SHALL STATE WHETHER THE BID PRICE IS FIRM OR SUBJECT TO ESCALATION. THE FAILURE TO SO STATE IS A MATERIAL DEVIATION FROM THE INVITATION WHICH MAY NOT BE WAIVED. SO THAT A BID SUBMITTED PURSUANT TO SUCH AN INVITATION WHICH FAILED TO STATE WHETHER THE PRICE WAS FIRM OR SUBJECT TO ESCALATION MUST BE CONSIDERED AS NOT RESPONSIVE TO THE INVITATION. 1954: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 25. PARAGRAPH 11B OF THE SCHEDULE ATTACHED TO AND MADE A PART OF THE REFERRED -TO INVITATION PROVIDES AS FOLLOWS: EACH BIDDER SHALL STATE IN HIS BID WHETHER THE BID PRICE FOR ITEM A OR ITEM 2 OF THE SCHEDULE IS FIRM OR SUBJECT TO ESCALATION AND.

B-119039, MARCH 30, 1954, 33 COMP. GEN. 421

BIDS - ACCEPTANCE OR REJECTION - DEVIATION FROM ADVERTISED SPECIFICATIONS - FAILURE TO STATE WHETHER BID PRICE WAS FIRM OR SUBJECT TO ESCALATION UNDER AN INVITATION TO BID WHICH PROVIDES THAT THE BIDDER SHALL STATE WHETHER THE BID PRICE IS FIRM OR SUBJECT TO ESCALATION, THE FAILURE TO SO STATE IS A MATERIAL DEVIATION FROM THE INVITATION WHICH MAY NOT BE WAIVED, SO THAT A BID SUBMITTED PURSUANT TO SUCH AN INVITATION WHICH FAILED TO STATE WHETHER THE PRICE WAS FIRM OR SUBJECT TO ESCALATION MUST BE CONSIDERED AS NOT RESPONSIVE TO THE INVITATION.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE ARMY, MARCH 30, 1954:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 25, 1954, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE PROPRIETY OF MAKING AN AWARD OF A CONTRACT TO THE ALLIS-CHALMERS MANUFACTURING COMPANY ON THE BASIS OF ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. CIVENG-49-080 54-46, COVERING THE PROCUREMENT OF SWITCHGEAR FOR THE DALECARLIA PUMPING PLANT IN WASHINGTON, 1.D.C.

PARAGRAPH 11B OF THE SCHEDULE ATTACHED TO AND MADE A PART OF THE REFERRED -TO INVITATION PROVIDES AS FOLLOWS:

EACH BIDDER SHALL STATE IN HIS BID WHETHER THE BID PRICE FOR ITEM A OR ITEM 2 OF THE SCHEDULE IS FIRM OR SUBJECT TO ESCALATION AND, IF SUBJECT TO ESCALATION, THE BIDDER SHALL STATE THE APPLICABLE PERCENT PRICE ADJUSTMENT.

IT IS REPORTED THAT THE BID SUBMITTED BY THE ALLIS-CHALMERS MANUFACTURING COMPANY TECHNICALLY CONFORMS TO THE SPECIFICATIONS, BUT THE BIDDER FAILED TO STATE WHETHER THE PRICE WAS FIRM OR SUBJECT TO ESCALATION AS REQUIRED BY PARAGRAPH 11B OF THE CONTINUATION SCHEDULE; AND SINCE, ON EVALUATION, THIS BID BECOMES LOW IF CONSIDERED FIRM, YOU REQUEST ADVICE AS TO WHETHER SUCH OMISSION MAY BE CONSIDERED AN INFORMALITY WHICH MAY BE WAIVED. THIS CONNECTION, YOU POINT OUT THAT THE DISTRICT ENGINEER, IN CANVASSING THE BIDS, HAS CONSIDERED THE FAILURE OF ALLIS-CHALMERS TO AFFIRMATIVELY STATE WHETHER OR NOT THE BID SUBMITTED WAS A FIRM PRICE OR ONE SUBJECT TO ESCALATION AS A MINOR INFORMALITY WHICH MAY BE WAIVED, AND HAS RECOMMENDED THAT AWARD BE MADE ON THIS BID AS A FIRM PRICE.

A REVIEW OF THE MATERIAL TRANSMITTED WITH YOUR SUBMISSION INDICATES THAT OTHER BIDDERS CONFORMED TO THE REQUIREMENTS OF PARAGRAPH 11B, EXCEPT THE ALLIS-CHALMERS MANUFACTURING COMPANY, THE OMISSION ON THE PART OF THIS FIRM MAY HAVE BEEN UPON THE BASIS THAT PARAGRAPH 30 OF THE GENERAL CONDITIONS WOULD GIVE AUTOMATIC PRICE ADJUSTMENTS TO THE SUCCESSFUL BIDDER. AND PARAGRAPH 30, STANDING ALONE, WOULD HAVE SO OPERATED. HOWEVER, SINCE PARAGRAPH 11B MUST OF NECESSITY BE GIVEN EFFECT IT MUST BE REGARDED AS A PREREQUISITE TO THE APPLICATION OF PARAGRAPH 30.

IT FREQUENTLY HAS BEEN HELD BY THE GENERAL ACCOUNTING OFFICE THAT THE PURPOSE OF THE STATUTORY REQUIREMENTS OF ADVERTISING FOR BIDS IN MATTERS OF THIS TYPE IS TO SECURE FREE AND OPEN COMPETITION AMONG BIDDERS IN ORDER THAT THE NEEDS OF THE GOVERNMENT MAY BE SUPPLIED UPON THE MOST ADVANTAGEOUS TERMS AVAILABLE, AND TO GIVE ALL PERSONS AN EQUAL RIGHT TO COMPETE FOR GOVERNMENT BUSINESS. TO INSURE TO THE GOVERNMENT THE BENEFITS OF SUCH COMPETITION, IT IS ESSENTIAL THAT AWARDS OF CONTRACTS BE FAIRLY MADE UPON THE BASIS OF THE ESSENTIAL REQUIREMENTS OF THE SPECIFICATIONS SUBMITTED FOR COMPETITION. DEVIATIONS BY A BIDDER FROM TERMS OF THE INVITATION REQUIREMENTS MAY BE WAIVED ONLY IF THEY DO NOT GO TO THE SUBSTANCE OF THE BID OR WORK AN INJUSTICE TO OTHER BIDDERS.

IN THE PRESENT MATTER, IT CLEARLY APPEARS THAT THE DEVIATION FROM THE ADVERTISED REQUIREMENTS WAS OF SUCH SUBSTANCE AS TO AFFECT NOT ONLY THE PRICE OF THE UNITS OFFERED BY THE BIDDER, BUT ALSO WAS PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS IN THAT IT OBVIOUSLY WOULD ENABLE THE ALLIS- CHALMERS COMPANY SUBSEQUENTLY TO MAKE AN ELECTION TO ITS OWN ADVANTAGES. TO PERMIT A BIDDER THUS TO CLARIFY ITS ORIGINAL BID AFTER OPENING WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS.

ACCORDINGLY, IT MUST BE CONCLUDED THAT THE BID WAS SUBMITTED BY THE ALLIS -CHALMERS MANUFACTURING COMPANY IS NOT RESPONSIVE TO INVITATION NO. CIVENG -49-080-54-46.