B-127594, JUL. 2, 1956

B-127594: Jul 2, 1956

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TO SUNROC CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 12. IT WAS STATED IN YOUR LETTER THAT YOU WERE THE LOWEST RESPONSIVE RESPONSIBLE BIDDER AND THAT A CHECK WOULD REVEAL THAT AN ILLEGAL AND IMPROPER AWARD WAS MADE WHICH SHOULD BE RESCINDED. PROVIDED THE PERIOD OF THE OFFERED DISCOUNT WAS SUFFICIENT TO PERMIT PAYMENT WITHIN SUCH PERIOD IN THE REGULAR COURSE OF BUSINESS UNDER THE DELIVERY. THE ABSTRACT OF BIDS FURNISHED BY THE DEPARTMENT OF THE AIR FORCE SHOWS THAT 10 BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION OFFERING TO FURNISH ONE OR MORE OF THE ITEMS INCLUDED IN THE INVITATION. THE BID OF THE DALLMAN COMPANY ON ITEM 009 WAS IN THE AMOUNT OF $143.50 PER UNIT. YOUR BID ON THE SAME ITEM WAS IN THE AMOUNT OF $144 PER UNIT LESS A DISCOUNT OF 5 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS.

B-127594, JUL. 2, 1956

TO SUNROC CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 12, 1956, PROTESTING THE AWARD OF A CONTRACT TO THE DALLMAN COMPANY PURSUANT TO INVITATION FOR BIDS NO. 04-643-56-345 ISSUED BY THE PACIFIC USAF LOGISTIC CONTROL GROUP, OAKLAND, CALIFORNIA. ALSO, THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 15, 1956, ENCLOSING A COPY OF YOUR LETTER OF APRIL 12, 1956.

IT WAS STATED IN YOUR LETTER THAT YOU WERE THE LOWEST RESPONSIVE RESPONSIBLE BIDDER AND THAT A CHECK WOULD REVEAL THAT AN ILLEGAL AND IMPROPER AWARD WAS MADE WHICH SHOULD BE RESCINDED.

THE INVITATION REQUESTED BIDS ON FURNISHING CERTAIN ITEMS OF AIR CONDITIONING AND REFRIGERATING EQUIPMENT AND PARTS. THE PRINTED BID FORM CONTAINED SPACES FOR THE QUOTING OF DISCOUNTS OFFERED FOR PROMPT PAYMENT, WITHIN 10 CALENDAR DAYS, 20 CALENDAR DAYS, AND 30 CALENDAR DAYS. PARAGRAPH 3 (A) OF THE TERMS AND CONDITIONS ON THE REVERSE OF THE INVITATION PROPER PROVIDED THAT PROMPT PAYMENT DISCOUNTS WOULD BE INCLUDED IN THE EVALUATION OF BIDS, PROVIDED THE PERIOD OF THE OFFERED DISCOUNT WAS SUFFICIENT TO PERMIT PAYMENT WITHIN SUCH PERIOD IN THE REGULAR COURSE OF BUSINESS UNDER THE DELIVERY, INSPECTION, AND PAYMENT PROVISIONS OF THE INVITATION AND BID.

THE ABSTRACT OF BIDS FURNISHED BY THE DEPARTMENT OF THE AIR FORCE SHOWS THAT 10 BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION OFFERING TO FURNISH ONE OR MORE OF THE ITEMS INCLUDED IN THE INVITATION. THE BID OF THE DALLMAN COMPANY ON ITEM 009 WAS IN THE AMOUNT OF $143.50 PER UNIT, LESS A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 20 CALENDAR DAYS. YOUR BID ON THE SAME ITEM WAS IN THE AMOUNT OF $144 PER UNIT LESS A DISCOUNT OF 5 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS.

THE DEPARTMENT OF THE AIR FORCE REPORTS THAT IT WAS DETERMINED ADMINISTRATIVELY THAT THE 10 DAY DISCOUNT PERIOD OFFERED BY YOU WAS INSUFFICIENT TO PERMIT PAYMENT WITHIN THE REGULAR COURSE OF BUSINESS UNDER THE DELIVERY, INSPECTION, AND PAYMENT PROVISIONS OF THE INVITATION AND THAT "THE PAST EXPERIENCE OF THE PROCURING ACTIVITY HAS SHOWN THAT IT IS NOT NORMALLY POSSIBLE TO PROCESS RECEIVING DOCUMENTS AND RELATED PAPER WORK WITHIN TEN DAYS OF THE DELIVERY DATE, WHERE THE SUPPLIES ARE TO BE DELIVERED TO AND ACCEPTED AT PORT OF EMBARKATION," AS THEY WERE IN THIS CASE. IT WAS STATED ALSO THAT DELIVERIES UNDER THE CONTRACT AWARDED IN THIS CASE WERE COMPLETED ON MARCH 23, 1956, THAT THE RECEIVING REPORT FROM THE DELIVERY AND INSPECTION POINT WAS RECEIVED BY THE PURCHASING ACTIVITY ON APRIL 2, 1956, AND WAS TRANSMITTED TO THE FINANCE OFFICER, MCCLELLAN AIR FORCE BASE, MCCLELLAN, CALIFORNIA--- DESIGNATED IN THE INVITATION AS THE PAYING AUTHORITY--- FOR PAYMENT, AND THAT PAYMENT WAS MADE ON APRIL 13, 1956. IT THUS IS SHOWN THAT THE RECEIVING DOCUMENTS AND RELATED PAPER WORK WERE NOT PROCESSED WITHIN 10 DAYS, AND THERE IS NO INDICATION THAT THEIR PROCESSING WAS NOT ACCOMPLISHED IN ACCORDANCE WITH NORMAL PROCEDURE.

SECTION 3 (B) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947 EXPRESSLY REQUIRES THAT AWARD BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT. WHILE YOUR BID WAS THE LOWEST RECEIVED, IF THE 5 PERCENT DISCOUNT IS CONSIDERED, IT IS APPARENT FROM THE RECORD THAT IT WOULD NOT HAVE BEEN POSSIBLE FOR THE GOVERNMENT TO TAKE ADVANTAGE OF THE DISCOUNT OFFERED FOR PAYMENT WITHIN 10 CALENDAR DAYS BECAUSE SUCH PERIOD WAS TOO SHORT. THEREFORE, THE GOVERNMENT WOULD HAVE BEEN REQUIRED TO PAY FOR THE EQUIPMENT AT THE GROSS AMOUNT OF YOUR BID, WHICH WAS NOT THE MOST ADVANTAGEOUS PRICE TO THE GOVERNMENT IN THIS INSTANCE, AND YOUR DISCOUNT OFFER WAS PROPERLY EXCLUDED FROM CONSIDERATION IN ACCORDANCE WITH THE RIGHT RESERVED TO THE GOVERNMENT IN THE INVITATION. THEREFORE, WE HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT WE WOULD NOT BE JUSTIFIED IN TAKING ANY ACTION IN THE MATTER.