B-125701, OCT. 31, 1955

B-125701: Oct 31, 1955

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WERE REQUESTED ON A UNIT-PRICE BASIS FOR FURNISHING 1. " BIDS WERE REQUESTED ON A UNIT-PRICE BASIS FOR FURNISHING 3. THE GOVERNMENT DID NOT AGREE TO PURCHASE MORE OF THE SUPPLIES INVOLVED THAN WERE NEEDED AND ORDERED DURING THE RESPECTIVE PERIODS OF TIME. WERE LEFT BLANK BY FAIRMONT. SINCE THE REFERRED-TO STATEMENT MADE BY FAIRMONT ON THE FIRST PAGE OF THE FORM WAS NOT REGARDED AS LIMITING THE LENGTH OF TIME DURING WHICH THE BIDDER HAD OFFERED TO FURNISH THE SUPPLIES. ITS BID WAS ACCEPTED ON SEPTEMBER 19. AS FOLLOWS: "THE EXHIBIT WHICH WAS ATTACHED TO THE INVITATION TO BID REFERRED TO THE THREE MONTH PERIOD. WE DID NOT ENTER THE UNIT PRICE OR THE TOTAL AMOUNT BECAUSE WE WERE NOT SURE WHETHER YOU WOULD BE INTERESTED IN THE ONE POUND SOLID WRAP OR THE QUARTERED PARCHMENT WRAP.

B-125701, OCT. 31, 1955

TO MR. GEORGE SPATAFORE, PROCUREMENT OFFICER, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE:

YOUR LETTER OF SEPTEMBER 29, 1955, REQUESTS A DECISION CONCERNING THE MERITS OF THE PROTEST MADE BY FAIRMONT FOODS COMPANY TO THE AWARD OF CONTRACT NO. SA80PH-19 TO IT UNDER INVITATION NO. 64-8-29-55, ISSUED BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, PUBLIC HEALTH SERVICE, INDIAN HEALTH AREA OFFICE, FOR FURNISHING MARGERINE TO THE SIOUX SANATORIUM, RAPID CITY, SOUTH DAKOTA.

ON PAGE 1 OF THE INVITATION, BID AND AWARD, STANDARD FORM 33, BIDS TO BE OPENED SEPTEMBER 15, 1955, WERE REQUESTED ON A UNIT-PRICE BASIS FOR FURNISHING 1,050 POUNDS OF "MARGERINE, VEGETABLE OILS, VITAMIN A ADDED; COLORED, TYPE NO. 2, 1 LB. PARCHMENT WRAPPED, (INDIVIDUAL SLICED SERVINGS). FED.SPEC. EE-O-451B," DESIGNATED AS ITEM NO. 1, TO THE SIOUX SANATORIUM DURING THE PERIOD OCTOBER 1 THROUGH DECEMBER 31, 1955. ON PAGE 2 OF THE FORM, UNDER THE HEADING "ALTERNATE BID," BIDS WERE REQUESTED ON A UNIT-PRICE BASIS FOR FURNISHING 3,150 POUNDS OF THE IDENTICAL ITEM, HERE DESIGNATED AS ITEM NO. 1A, TO THE SANATORIUM DURING THE PERIOD OCTOBER 1, 1955, THROUGH JUNE 30, 1956. THE INVITATION ADVISED BIDDERS THAT, NOTWITHSTANDING THE CONTRACT QUANTITIES SET FORTH THEREIN, THE GOVERNMENT DID NOT AGREE TO PURCHASE MORE OF THE SUPPLIES INVOLVED THAN WERE NEEDED AND ORDERED DURING THE RESPECTIVE PERIODS OF TIME.

FAIRMONT FOODS COMPANY SUBMITTED A BID UNDER DATE OF SEPTEMBER 14, 1955, BY EXECUTING FORM 33 IN THE SPACE PROVIDED ON PAGE 1. THE SPACES PROVIDED IN THE FORM FOR BIDDERS TO INSERT UNIT-BID PRICES FOR ITEMS 1 AND 1A, RESPECTIVELY, WERE LEFT BLANK BY FAIRMONT. IN EXPLANATION, THE BIDDER WROTE THE WORDS "SEE ATTACHED" BELOW THE DESCRIPTION AND SPACE PROVIDED FOR THE INSERTION OF PRICE OF THE ITEM ON PAGE 1 OF THE FORM. A LETTER ACCOMPANYING THE BID STATED:

"WE FIND INDIVIDUAL SLICED SERVINGS IN ONE POUND PARCHMENT WRAP MARGERINE UNAVAILABLE.

"WE PROPOSE A BID OF 19 CENTS PER POUND FOR 1 LB. SOLID OR 20 CENTS PER POUND FOR QUARTERED IN PARCHMENT WRAP.'

YOU STATE THAT, SINCE THE REFERRED-TO STATEMENT MADE BY FAIRMONT ON THE FIRST PAGE OF THE FORM WAS NOT REGARDED AS LIMITING THE LENGTH OF TIME DURING WHICH THE BIDDER HAD OFFERED TO FURNISH THE SUPPLIES, ITS BID WAS ACCEPTED ON SEPTEMBER 19, 1955, FOR THE ALTERNATE NINE-MONTH PERIOD. ALSO, YOU STATE: "TO COMPLETE THE CONTRACT THIS OFFICE INSERTED, BY TYPEWRITER, THE BID PRICE OF 19 CENTS OPPOSITE THE ALTERNATE ITEM.'

UPON RECEIPT OF NOTICE THAT IT HAD BEEN AWARDED ITEM 1A, FAIRMONT REPLIED BY LETTER OF SEPTEMBER 26, 1955, AS FOLLOWS:

"THE EXHIBIT WHICH WAS ATTACHED TO THE INVITATION TO BID REFERRED TO THE THREE MONTH PERIOD. WE DID NOT ENTER THE UNIT PRICE OR THE TOTAL AMOUNT BECAUSE WE WERE NOT SURE WHETHER YOU WOULD BE INTERESTED IN THE ONE POUND SOLID WRAP OR THE QUARTERED PARCHMENT WRAP.

"THE EXECUTED CONTRACT INDICATES THAT WE HAVE BEEN GRANTED THE AWARD FOR SOLID WRAP AT 19 CENTS A POUND, BUT UNDER THE ALTERNATE BID FOR A NINE MONTH PERIOD.

"SINCE OUR BID WAS BASED ON A GUARANTEED PRICE FROM OUR SOURCE OF SUPPLY FOR A THREE MONTH PERIOD, WE CANNOT BECOME OBLIGATED FOR THIS SAME PRICE FOR A NINE MONTH PERIOD.

"SINCE THE PRICE IS SUBJECT TO VIOLENT FLUCTUATION AT TIMES, WE COULD NOT GUARANTEE ANY PRICE FOR A LONGER PERIOD THAN THREE MONTHS. IF THIS IS NOT SATISFACTORY, WE WOULD PREFER TO WITH-DRAW OUR BID RATHER THAN TO BE OBLIGATED TO SUPPLY THIS PRICE PAST DECEMBER 31, 1955.'

IF THE REQUIREMENT FOR "INDIVIDUAL SLICED SERVINGS" WAS A MATERIAL ONE, FAIRMONT'S BID WAS NOT RESPONSIVE TO THE INVITATION SINCE IT OFFERED MARGERINE ON A PER POUND OR QUARTERED BASIS. SEE 30 COMP. GEN. 179. ANY EVENT, SINCE THE WORDS "SEE ATTACHED" WERE NOT WRITTEN BELOW THE DESCRIPTION AND SPACE PROVIDED FOR THE INSERTION OF PRICE FOR ITEM 1A, AND THAT ITEM WAS DESCRIBED ON A SEPARATE PAGE FROM ITEM 1, FAIRMONT REASONABLY MAY NOT BE HELD TO HAVE SUBMITTED A BID FOR FURNISHING ITEM 1A, PARTICULARLY IN VIEW OF THE EXPLANATION OFFERED IN THE ABOVE LETTER.

ACCORDINGLY, THE AWARD TO FAIRMONT CANNOT BE SAID TO HAVE RESULTED IN A VALID CONTRACT OBLIGATING FAIRMONT TO FURNISH MARGERINE IN ACCORDANCE WITH ITEM 1A OF THE INVITATION.

THE COPY OF BIDDER'S LETTER OF SEPTEMBER 26, 1955, TRANSMITTED WITH YOUR LETTER, IS RETURNED.