B-124572, JAN. 11, 1956

B-124572: Jan 11, 1956

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 6. PAYMENT WILL BE MADE ON PARTIAL DELIVERIES ACCEPTED BY THE GOVERNMENT WHEN THE AMOUNT DUE ON SUCH DELIVERIES SO WARRANTS. IN A TRANSMITTAL LETTER ACCOMPANYING YOUR BID YOU STATED: "WE ARE ENCLOSING OUR BID ON SUBJECT INVITATION. OUR BID IS BASED ON THE PERFORMANCE REQUIREMENTS OF THE SPECIFICATION AND THE DRAWINGS ARE TO BE USED AS GUIDES. WE ARE PLANNING SEVERAL CHANGES WHICH WILL SIMPLIFY THE UNIT. "IF ANY FURTHER INFORMATION IS NEEDED. WE WILL BE PLEASED TO FURNISH IT TO YOU.'. YOUR STATEMENT REGARDING PARTIAL DELIVERIES WAS CONSIDERED BY THE CONTRACTING AGENCY AS BEING NON-CONFORMING TO THE INVITATION. WAS REJECTED AND AWARD WAS MADE TO THE ATLANTIC RESEARCH CORPORATION AS THE LOWEST RESPONSIBLE BIDDER.

B-124572, JAN. 11, 1956

TO SYSTEMS DEVELOPMENT, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 6, 1955, PROTESTING THE ACTION OF THE DEPARTMENT OF THE NAVY IN AWARDING A CONTRACT TO ATLANTIC RESEARCH CORPORATION UNDER INVITATION NO. IFB-600 996-55-S, ISSUED ON MAY 19, 1955.

THE INVITATION REQUESTED BIDS FOR FURNISHING SWELL RECORDERS, REPAIR PARTS, PRODUCTION DRAWINGS AND INSTRUCTIONS. ARTICLE 7 OF THE GENERAL PROVISIONS OF THE INVITATION ENTITLED "PAYMENTS" PROVIDED AS FOLLOWS:

"THE CONTRACTOR SHALL BE PAID, UPON THE SUBMISSION OF PROPERLY CERTIFIED INVOICES OR VOUCHERS, THE PRICES STIPULATED HEREIN FOR SUPPLIES DELIVERED AND ACCEPTED OR SERVICES RENDERED AND ACCEPTED, LESS DEDUCTIONS, IF ANY, AS HEREIN PROVIDED. UNLESS OTHERWISE SPECIFIED, PAYMENT WILL BE MADE ON PARTIAL DELIVERIES ACCEPTED BY THE GOVERNMENT WHEN THE AMOUNT DUE ON SUCH DELIVERIES SO WARRANTS; OR, WHEN REQUESTED BY THE CONTRACTOR, PAYMENT FOR ACCEPTED PARTIAL DELIVERIES SHALL BE MADE WHENEVER SUCH PAYMENT WOULD EQUAL OR EXCEED EITHER $1,000 OR 50 PERCENT OF THE TOTAL AMOUNT OF THIS CONTRACT.'

IN A TRANSMITTAL LETTER ACCOMPANYING YOUR BID YOU STATED:

"WE ARE ENCLOSING OUR BID ON SUBJECT INVITATION. IN CONFORMANCE WITH BID SET REQUIREMENTS, OUR BID IS BASED ON THE PERFORMANCE REQUIREMENTS OF THE SPECIFICATION AND THE DRAWINGS ARE TO BE USED AS GUIDES. WE ARE PLANNING SEVERAL CHANGES WHICH WILL SIMPLIFY THE UNIT. WE REQUEST A 75 PERCENT PARTIAL PAYMENTS CLAUSE.

"IF ANY FURTHER INFORMATION IS NEEDED, WE WILL BE PLEASED TO FURNISH IT TO YOU.'

BECAUSE OF THE PROVISIONS OF ARTICLE 7 OF THE GENERAL PROVISIONS, SUPRA, YOUR STATEMENT REGARDING PARTIAL DELIVERIES WAS CONSIDERED BY THE CONTRACTING AGENCY AS BEING NON-CONFORMING TO THE INVITATION. CONSEQUENTLY, YOUR BID, TOGETHER WITH THAT OF B. M. HARRISON LABORATORIES, INC., WHICH LIKEWISE REQUESTED PARTIAL PAYMENTS, WAS REJECTED AND AWARD WAS MADE TO THE ATLANTIC RESEARCH CORPORATION AS THE LOWEST RESPONSIBLE BIDDER.

IN YOUR LETTER OF JULY 6, 1955, YOU STATE THAT YOU WERE READY TO ACCEPT THE AWARD WITH OR WITHOUT A PARTIAL PAYMENT CLAUSE AND THAT YOUR REQUEST SHOULD NOT BE CONFUSED AS A CONDITION TO YOUR BID SINCE, ON ITS FACE, IT WAS IN THE NATURE OF A PRAYER RATHER THAN A DEMAND OR QUALIFICATION.

A REPORT ON THE MATTER OF YOUR PROTEST WHICH WAS SECURED FROM THE SECRETARY OF THE NAVY WAS MADE AVAILABLE TO YOUR ATTORNEY FOR HIS INFORMATION AND CONSIDERATION FOLLOWING WHICH HE PREPARED AND SUBMITTED TO OUR OFFICE A SUPPLEMENTAL BRIEF IN SUPPORT OF THE PROTEST.

IT IS THE POSITION OF THE CONTRACTING AGENCY THAT THE STATEMENT IN THE LETTER WHICH ACCOMPANIED YOUR BID WAS NOT A MERE EXPRESSION OF A PREFERENCE FOR PARTIAL PAYMENTS BUT, RATHER, WAS A CONDITION OF THE BID WHICH CONSTITUTED A MAJOR DEVIATION WHICH COULD NOT BE WAIVED SINCE IT AFFECTED THE PRICE, CITING 30 COMP. GEN. 179. FURTHER, IT WAS THE VIEW OF THE DEPARTMENT OF THE NAVY THAT THE LANGUAGE OF THE STATEMENT WAS SO UNCERTAIN AND INDEFINITE AS TO THE TYPE OF CLAUSE REQUESTED AS TO BE UNACCEPTABLE AND THAT YOUR BID AT BEST WAS AN ALTERNATE BID WHICH WAS NOT AUTHORIZED UNDER THE TERMS OF THE INVITATION. ON THE OTHER HAND, IT IS YOUR ATTORNEY'S CONTENTION THAT, IF YOUR REQUEST REGARDING PARTIAL PAYMENTS CONSTITUTED A QUALIFICATION, IT WAS AN IMMATERIAL ONE AMOUNTING TO A MINOR INFORMALITY WHICH COULD HAVE BEEN WAIVED.

WHILE IN ITS ORDINARY SENSE THE WORD "REQUEST" IS PRECATORY, NOT MANDATORY, ITS PRECISE MEANING MUST DEPEND UPON THE CIRCUMSTANCES IN WHICH IT IS EMPLOYED. IT IS REASONABLE TO CONSTRUE THE LANGUAGE IN THE LETTER TRANSMITTING YOUR OFFER IN THE LIGHT OF YOUR PURPOSE TO BID ON THE ADVERTISED REQUIREMENTS OF THE INVITATION AND TO CONSIDER THE "REQUEST" STATED IN CONNECTION WITH THE OFFER AS A PART OF IT, TANTAMOUNT TO A REQUIREMENT, ESPECIALLY SINCE YOU WERE IN A POSITION TO EXACT COMPLIANCE WITH THE OBJECT OF THE REQUEST AS A PROVISION OF ANY RESULTING CONTRACT. IF, AS NOW CONTENDED, THE INTENT OF THE REQUEST FOR PARTIAL PAYMENTS WAS MERELY TO EXPRESS A PRAYER OR A PREFERENCE AND YOU WOULD HAVE ACCEPTED THE CONTRACT SUBJECT TO THE PROVISIONS OF THE ,PAYMENTS" ARTICLE AS CONTAINED IN THE INVITATION TO BID, SUCH INTENT SHOULD HAVE BEEN CLEARLY EXPRESSED. IN THE ABSENCE OF SUCH A CLARIFICATION, WE ARE OF THE OPINION THAT YOUR REQUEST CONSTITUTED A BID QUALIFICATION AND WE AGREE WITH THE STATEMENT CONTAINED IN THE ADMINISTRATIVE REPORT THAT IT WOULD BE REASONABLE TO ARGUE THAT, HAD YOU BEEN AWARDED THE CONTRACT WITHOUT THE REQUESTED CLAUSE, THE REQUEST, BEING A PART OF YOUR BID, WOULD HAVE CONSTITUTED AN ENFORCEABLE CONDITION THEREOF.

THE DECISIONS OF OUR OFFICE ARE UNIFORM IN HOLDING THAT A BIDDER MAY NOT QUALIFY ITS PROPOSAL IN SUCH A MANNER AS TO MATERIALLY VARY THE ADVERTISED TERMS OF THE INVITATION. WHILE, IN THE PRESENT CASE, IT IS SPECULATIVE AS TO THE EXTENT THAT THE PRICE MAY HAVE BEEN AFFECTED, IT SEEMS CLEAR THAT THE REQUEST CONSTITUTED A DEVIATION WHICH WENT TO THE PRICE AND IT IS ENTIRELY CONCEIVABLE THAT OTHER BIDDERS MIGHT HAVE SUBMITTED LOWER BIDS HAD THEY BEEN PERMITTED TO INCLUDE IN THEIR BIDS A PROVISION FOR 75 PERCENT PARTIAL PAYMENTS. IT IS MANIFEST THAT THE REQUEST WENT BEYOND THE MEANING NOW ATTRIBUTED TO IT BY YOUR ATTORNEY AND CONSTITUTED A QUALIFICATION OF YOUR OFFER WHICH, IN ADDITION TO AFFECTING THE PRICE, HAD THE EFFECT OF VARYING THE GOVERNMENT'S PAYMENT OBLIGATION FROM THAT CONTEMPLATED BY THE INVITATION.

CAREFUL CONSIDERATION HAS BEEN GIVEN THE CONTENTIONS PRESENTED IN YOUR ATTORNEY'S BRIEF AND THE SEVERAL DECISIONS OF OUR OFFICE WHICH HE BELIEVES SUPPORT THE PROPOSITION THAT YOUR BID SHOULD HAVE BEEN ACCEPTED. IT IS TRUE THAT THE RIGHT TO WAIVE ANY INFORMALITY OR IRREGULARITY IN BIDS RECEIVED, WHEN IN THE INTEREST OF THE GOVERNMENT TO DO SO, WAS RESERVED IN THE INVITATION, BUT THE CONTRACTING AGENCY HAS DETERMINED, AS SHOWN ABOVE, THAT YOUR BID WAS NOT RESPONSIVE TO THE INVITATION. THE EXPLANATION FOR SUCH ADMINISTRATIVE ACTION APPEARING TO BE REASONABLE, OUR OFFICE WOULD NOT BE JUSTIFIED IN HOLDING THAT THE AWARD TO THE ATLANTIC RESEARCH CORPORATION WAS ILLEGAL.