B-126017, NOVEMBER 21, 1955, 35 COMP. GEN. 291

B-126017: Nov 21, 1955

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1955: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 8. IN PARAGRAPH 2 OF THE BID SPECIFICATIONS IT IS STATED THAT " IT IS THE INTENT OF THESE SPECIFICATIONS TO PROCURE A PILOT MODEL OF EQUIPMENT WHICH WILL AT HIGH SPEED WITH UTMOST ACCURACY PERFORM AN OPERATION NOW DONE BY HAND AND SO EFFECT SUBSTANTIAL SAVINGS TO THE BUREAU. " AND THAT " THE VALUE OF EACH OF SUCH PROPOSALS THAT MAY BE OFFERED WILL BE CONSIDERED AND EVALUATED BEFORE AN AWARD OF CONTRACT IS MADE AS STATED IN PARAGRAPH 13. PARAGRAPH 13 OF THE BID SPECIFICATIONS INCLUDES THE STATEMENT THAT " IN EVALUATING THE BIDS CONSIDERATION WILL BE GIVEN TO (1) ACCEPTABLE DESIGN. UNDER PARAGRAPH 19 OF THE BID SPECIFICATIONS IT IS PROVIDED THAT " OPERATION WITH THE DESIGNATION ACCURACY SHALL BE REQUIRED AT A RATE OF AT LEAST 250 NOTES PER MINUTE.'.

B-126017, NOVEMBER 21, 1955, 35 COMP. GEN. 291

BIDS - EVALUATION - ACCEPTANCE OF OTHER THAN LOWEST - SPECIFICATION FOR NEW EQUIPMENT AN INVITATION WHICH SETS FORTH THE MINIMUM NEEDS OF THE GOVERNMENT FOR DEVELOPMENT OF ENTIRELY NEW EQUIPMENT, BUT REQUESTS ALTERNATE PROPOSALS FOR EQUIPMENT OF THE HIGHEST POSSIBLE EFFICIENCY, DOES NOT REQUIRE AN AWARD TO THE LOWEST RESPONSIBLE BIDDER OFFERING EQUIPMENT MEETING THE SPECIFIED MINIMUM REQUIREMENTS BUT ON THE CONTRARY REQUIRES AN AWARD BASED ON THE EVALUATION OF ALL BIDS TO FURNISH EQUIPMENT MEETING OR EXCEEDING THE MINIMUM REQUIREMENTS, PERFORMANCE AND SAVINGS CONSIDERED.

TO THE SECRETARY OF THE TREASURY, NOVEMBER 21, 1955:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 8, 1955, REQUESTING A DECISION AS TO THE PROPRIETY OF MAKING AN AWARD OF A CONTRACT TO THE HUCK COMPANY PURSUANT TO INVITATION FOR BIDS NO. BEP-199, ISSUED ON JUNE 28, 1955, BY THE BUREAU OF ENGRAVING AND PRINTING, AND WHICH REQUESTED BIDS FOR THE FURNISHING OF ALL LABOR AND MATERIAL NECESSARY TO DESIGN AND CONSTRUCT A PILOT MODEL MACHINE FOR AUTOMATICALLY REPLACING DEFECTIVE CURRENCY NOTES.

IN PARAGRAPH 2 OF THE BID SPECIFICATIONS IT IS STATED THAT " IT IS THE INTENT OF THESE SPECIFICATIONS TO PROCURE A PILOT MODEL OF EQUIPMENT WHICH WILL AT HIGH SPEED WITH UTMOST ACCURACY PERFORM AN OPERATION NOW DONE BY HAND AND SO EFFECT SUBSTANTIAL SAVINGS TO THE BUREAU; " THAT " BIDDERS MAY, IF THEY SO DESIRE, PROPOSE ALTERNATE DESIGNS TO MEET THE SPECIFIED REQUIREMENTS; " AND THAT " THE VALUE OF EACH OF SUCH PROPOSALS THAT MAY BE OFFERED WILL BE CONSIDERED AND EVALUATED BEFORE AN AWARD OF CONTRACT IS MADE AS STATED IN PARAGRAPH 13, EVALUATION OF BIDS FOR AWARD OF CONTRACT.' PARAGRAPH 13 OF THE BID SPECIFICATIONS INCLUDES THE STATEMENT THAT " IN EVALUATING THE BIDS CONSIDERATION WILL BE GIVEN TO (1) ACCEPTABLE DESIGN, AND (2) THE BID PRICE OF THE PILOT EL.'

UNDER PARAGRAPH 19 OF THE BID SPECIFICATIONS IT IS PROVIDED THAT " OPERATION WITH THE DESIGNATION ACCURACY SHALL BE REQUIRED AT A RATE OF AT LEAST 250 NOTES PER MINUTE.' IT IS REPORTED THAT FIVE PRICES WERE QUOTED IN THE AMOUNTS OF $94,590, $105,100, $118,000, $139,400 AND $243,600; THAT THE LOW BIDDER, ACF ELECTRONICS, PROPOSED TO DESIGN A MACHINE WHICH WOULD MEET SUCH MINIMUM REQUIREMENT; AND THAT THE HUCK COMPANY, WHICH QUOTED THE PRICES OF $105,100 AND $139,400, PROPOSED IN ITS ALTERNATE BID OF $139,400 TO DESIGN A MACHINE WHICH WOULD REPLACE NOTES AT A SPEED OF 750 NOTES PER MINUTE.

IT IS INDICATED IN YOUR LETTER THAT THE PURCHASE OF 86 MACHINES HAVING A REPLACEMENT SPEED OF 250 NOTES PER MINUTE WOULD BE REQUIRED AND THAT THIS WOULD EFFECT PERSONNEL SAVINGS OF ABOUT $725,000 ANNUALLY. AS COMPARED WITH THOSE FIGURES, IT IS INDICATED THAT THE BUREAU WOULD HAVE TO PURCHASE ONLY 29 MACHINES HAVING A REPLACEMENT SPEED OF 750 NOTES PER MINUTE AND THAT THIS WOULD EFFECT PERSONNEL SAVINGS OF MORE THAN $1,000,000 ANNUALLY, AND OTHER BENEFITS SUCH AS WOULD ACCRUE FROM CONSIDERABLE SAVINGS OF FLOOR SPACE WHICH IS AT A PREMIUM IN THE BUREAU. CONSEQUENTLY, IT IS PROPOSED TO ACCEPT THE ALTERNATE BID OF THE HUCK COMPANY AS BEING THE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IT IS REPORTED IN THAT CONNECTION THAT THE BUREAU IS OF THE OPINION THAT THE CONTRACT SHOULD BE AWARDED ON THE BASIS OF THE BIDS RECEIVED, AS ALL BIDDERS HAD THE SAME OPPORTUNITY TO PRESENT ALTERNATE PROPOSALS.

ORDINARILY, THE ADVERTISED SPECIFICATIONS FOR A PROPOSED GOVERNMENT CONTRACT SHOULD STATE FAIRLY AND CLEARLY THE MINIMUM NEEDS OF THE GOVERNMENT AND THE LOWEST BID OFFERING EQUIPMENT MEETING SUCH MINIMUM REQUIREMENTS IS FOR ACCEPTANCE, IF OTHERWISE PROPER. 16 COMP. GEN. 991, 992. OF COURSE, APPROPRIATE PROVISIONS MAY BE MADE FOR THE SUBMISSION OF ALTERNATE BIDS BUT IT IS GENERALLY TO BE PRESUMED THAT AN ALTERNATE BID WOULD NOT BE FOR ACCEPTANCE IF HIGHER THAN THE LOWEST BID MEETING THE SPECIFIED MINIMUM REQUIREMENTS OF THE GOVERNMENT. THERE IS, HOWEVER, A CLEAR DISTINCTION TO BE DRAWN BETWEEN ADVERTISEMENTS FOR PROPOSALS ON EQUIPMENT ALREADY IN EXISTENCE AND THOSE WHICH RELATE TO THE PROPOSED DEVELOPMENT OF ENTIRELY NEW EQUIPMENT AS TO WHICH CERTAIN MINIMUM NEEDS COULD BE ASCERTAINED BUT AS TO WHICH THE PRIMARY CONSIDERATION IS THE DEVELOPMENT OF EQUIPMENT OF THE HIGHEST POSSIBLE EFFICIENCY.

IN THE LATTER TYPE OF SITUATION, IT SEEMS OBVIOUS THAT, WHERE ALTERNATE BIDS ARE REQUESTED, THE AWARD OF THE CONTRACT SHOULD NOT NECESSARILY BE MADE TO THE LOWEST RESPONSIBLE BIDDER OFFERING EQUIPMENT MEETING THE SPECIFIED MINIMUM REQUIREMENTS OF THE GOVERNMENT. ON THE CONTRARY, THE AWARD SHOULD BE MADE ON THE BASIS OF AN APPROPRIATE EVALUATION OF ALL BIDS UNDER WHICH IT IS PROPOSED TO FURNISH EQUIPMENT MEETING OR EXCEEDING SUCH MINIMUM REQUIREMENTS. IN THE PRESENT CASE, THE PROVISIONS OF PARAGRAPHS 2 AND 13 OF THE BID SPECIFICATIONS CLEARLY APPEAR TO HAVE CONTEMPLATED THAT THE AWARD WOULD BE BASED NOT ONLY UPON THE LOWEST BID PRICE BUT ALSO ON THE BASIS OF A DETERMINATION AS TO WHICH OF THE PROPOSED MODELS OF EQUIPMENT WOULD ULTIMATELY PROVE MOST SATISFACTORY FROM THE STANDPOINT OF EFFECTING THE GREATEST POSSIBLE SAVINGS TO THE GOVERNMENT.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS PERCEIVED NO OBJECTION TO THE ACCEPTANCE OF THE ALTERNATE BID OF THE HUCK COMPANY PROPOSING TO CONSTRUCT A PILOT MODEL OF A MACHINE CAPABLE OF REALIZING SAVINGS SUBSTANTIALLY MORE THAN COULD BE EFFECTED THROUGH THE DEVELOPMENT OF A MODEL MEETING ONLY THE MINIMUM REQUIREMENTS OF THE BID SPECIFICATIONS.