B-128485, AUG. 30, 1956

B-128485: Aug 30, 1956

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED AUGUST 14. IN THE INVITATION IT IS STATED: "AWARDS SHALL BE MADE WITH REASONABLE PROMPTNESS BY WRITTEN NOTICE TO THAT RESPONSIBLE BIDDER WHOSE BID. WILL BE MOST ADVANTAGEOUS TO THE SELLER. IN PARAGRAPH 3 OF GENERAL PROVISIONS IT IS STATED IN PART: "* * * BIDS MAY BE SUBMITTED ON BASIS OF PURCHASE BY ITEM OR BY LOT UNLESS MATERIAL IS OFFERED EXPRESSLY ON A LOT BASIS. IF BID IS ON ITEM BASIS. THE AMOUNT OFFERED SHOULD APPEAR OPPOSITE EACH LINE ITEM IN WHICH THE PURCHASER IS INTERESTED. IF BID IS ON LOT BASIS. FIVE BIDS WERE RECEIVED. THE GROBAN BID SUBMITTED ON THE BID FORM WAS IN THE AMOUNTS OF $0.334 PER POUND ON THE FIRST FOUR ITEMS.

B-128485, AUG. 30, 1956

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED AUGUST 14, 1956, WITH ENCLOSURES, FROM THE DEPUTY FOR PROCUREMENT AND PRODUCTION, IN RESPONSE TO OUR REQUEST OF JULY 9, 1956, FOR A REPORT RELATIVE TO THE PROTEST OF MR. MILT GROBAN IN CONNECTION WITH THE CONTEMPLATED SALE OF SURPLUS PROPERTY, ARISING FROM CONTRACT TERMINATION INVOLVING THE LADISH COMPANY OF CUDAHY, WISCONSIN.

IT APPEARS THAT ON MAY 7, 1956, THE LADISH COMPANY ISSUED AN INVITATION FOR BIDS (BID NO. 130) ON 10 ITEMS OF TITANIUM MATERIAL WHICH CONSTITUTED TERMINATION INVENTORY UNDER AN AIR FORCE PRIME CONTRACT, BIDS TO BE OPENED MAY 17, 1956. THE INVITATION LISTED THE MATERIAL IN LOTS 1, 2 AND 3, LOT 1 CONTAINING 4 ITEMS AND LOTS 2 AND 3 EACH CONTAINING 3 ITEMS, A DESCRIPTION AND THE APPROXIMATE WEIGHT OF EACH ITEM BEING STATED ON THE BID FORM.

IN THE INVITATION IT IS STATED:

"AWARDS SHALL BE MADE WITH REASONABLE PROMPTNESS BY WRITTEN NOTICE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFIRMING TO THE INVITATION FOR BID, WILL BE MOST ADVANTAGEOUS TO THE SELLER, PRICE AND OTHER FACTORS CONSIDERED. THE SELLER RESERVES THE RIGHT TO MAKE AWARDS, AT THE BID UNIT PRICES (1) FOR QUANTITIES OF ANY ITEM LESS THAN THOSE SET FORTH IN THE BID, (II) FOR LESS THAN ALL ITEMS BID UPON, (III) FOR GROUPS OF ITEMS, OR (IV) FOR ALL ITEMS BID UPON COLLECTIVELY, UNLESS THE BIDDER INDICATES IN HIS BID THAT SUCH AN AWARD WOULD NOT BE ACCEPTABLE.'

PARAGRAPH 1 OF THE GENERAL PROVISIONS ATTACHED TO THE INVITATION PROVIDES:

"REJECTION OF BIDS: SELLER RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS, INCLUDING HIGHEST BIDS, WAIVE ANY INFORMALITY IN BIDS, AND UNLESS OTHERWISE SPECIFIED BY BIDDER, ACCEPT ANY ITEM OR ITEMS IN BID.'

IN PARAGRAPH 3 OF GENERAL PROVISIONS IT IS STATED IN PART:

"* * * BIDS MAY BE SUBMITTED ON BASIS OF PURCHASE BY ITEM OR BY LOT UNLESS MATERIAL IS OFFERED EXPRESSLY ON A LOT BASIS. IF BID IS ON ITEM BASIS, THE AMOUNT OFFERED SHOULD APPEAR OPPOSITE EACH LINE ITEM IN WHICH THE PURCHASER IS INTERESTED. IF BID IS ON LOT BASIS, TOTAL AMOUNT OFFERED FOR LOTS SHOULD BE ENTERED IN SPACE INDICATED ON FIRST PAGE OF MATERIAL LISTS.'

FIVE BIDS WERE RECEIVED, INCLUDING A BID OF SURPLEX SALES AND MILTON GROBAN AS PARTNERS IN A JOINT VENTURE (HEREINAFTER REFERRED TO AS THE GROBAN BID). THE GROBAN BID SUBMITTED ON THE BID FORM WAS IN THE AMOUNTS OF $0.334 PER POUND ON THE FIRST FOUR ITEMS, $0.712 PER POUND ON THE NEXT FIVE ITEMS, AND $0.432 PER POUND ON THE LAST ITEM. HOWEVER, IN A LETTER DATED MAY 16, 1956, SUBMITTING THE GROBAN BID, IT WAS STATED:

"WE ASK THAT YOU CONSIDER AN ALTERNATIVE BID BY US OF $0.533 PER LB. FOR THE ENTIRE 71,208 LBS. FOR THE 10 ITEMS LISTED ON THE THREE LOTS FORWARDED WITH BID NO. 130. WE REQUEST THAT OUR REGULAR BID NOT BE USED TO DEFEAT THE ALTERNATIVE OR VICE-VERSA. THE TOTAL CASH INVOLVED AT 53.3 CENTS/LB IS $37,953.86. IF ANY QUESTION ARISES IN CONNECTION WITH THIS BID, PLEASE CALL US COLLECT BEFORE YOUR RULING.'

THE ABSTRACT OF BIDS SHOWS THAT HY SCHIFFMAN COMPANY WAS HIGH BIDDER ON ITEMS 1 AND 2 OF LOT 1 ($0.435 PER POUND ON EACH ITEM), WHILE THE GROBAN ORIGINAL BID WAS HIGHEST ON ALL OTHER ITEMS. IT IS REPORTED THAT ACCEPTANCE OF THE SAID HIGH BIDS ON AN ITEM BASIS WOULD RESULT IN AN AGGREGATE PRICE OF $36,703.06 AND THAT ACCEPTANCE OF THE HIGHEST BIDS REMAINING AFTER REJECTION OF BOTH GROBAN BIDS WOULD REDUCE THE PRICE TO $26,353.07. AS ABOVE STATED, THE GROBAN COMBINATION BID WAS IN THE AMOUNT OF $37,953.86 AND THEREFORE WAS THE HIGHEST BID RECEIVED.

BECAUSE OF UNCERTAINTY AS TO THE MEANING AND EFFECT OF THE LANGUAGE USED IN THE LETTER SUBMITTING THE GROBAN BIDS, IT WAS ADMINISTRATIVELY DETERMINED THAT BOTH GROBAN BIDS WERE DISQUALIFIED.

IN 35 COMP. GEN. 383, IT WAS STATED:

"IT HAS ALWAYS BEEN HELD THAT "ALL OR NONE" BIDS SUBMITTED IN RESPONSE TO INVITATIONS FOR BIDS FOR DEFINITE QUANTITIES ARE FOR CONSIDERATION EVEN IF THERE IS NO PROVISION THEREFOR IN THE INVITATION FOR BIDS. * * * ALSO, AN AWARD OF ALL LOTS TO ONE BIDDER, WHERE NO MORE ADVANTAGEOUS PRICE MAY BE OBTAINED OTHERWISE, DOES NOT APPEAR OBJECTIONABLE.'

IN THE INSTANT MATTER, THE INVITATION DID NOT PRECLUDE THE SUBMISSION OF COMBINATION BIDS. ALTHOUGH THE LANGUAGE OF THE LETTER SUBMITTING THE GROBAN ALTERNATIVE OR COMBINATION BID WAS NOT ENTIRELY CLEAR, THE GROBAN BIDS SHOULD NOT HAVE BEEN HELD DISQUALIFIED WITHOUT GIVING THE BIDDER AN OPPORTUNITY TO EXPLAIN ITS BID IN ACCORDANCE WITH THE REQUEST IN ITS SUBMITTING LETTER. THE ABOVE-QUOTED STATEMENT FROM THE LETTER IS SUSCEPTIBLE OF THE INTERPRETATION CONTENDED FOR BY THE BIDDER--- THAT ITS TWO BIDS WERE TO REMAIN COMPLETELY SEPARATE AND DISTINCT AND WERE NOT TO BE COMBINED, FOR EXAMPLE, SO AS TO RESULT IN A BID OF $0.712 PER POUND FOR 5 ITEMS (AS IN THE ORIGINAL BID) AND $0.533 PER POUND FOR THE OTHER 5 ITEMS (AS IN THE ALTERNATIVE OR COMBINATION BID). THE BIDDER WAS OFFERING TO PURCHASE THE MATERIAL ON THE BASIS OF EITHER SEPARATE BID WHICH MIGHT PROVE MOST ADVANTAGEOUS TO THE SELLER.

ALTHOUGH THE TIME FOR ACCEPTANCE OF BIDS SPECIFIED IN THE INVITATION HAS EXPIRED, IT SEEMS IMPLICIT IN THE PROTESTING BIDDER'S VARIOUS LETTERS URGING CONSIDERATION OF ITS BID THAT SUCH LETTERS WERE INTENDED TO GRANT AN EXTENSION OF ITS ACCEPTANCE PERIOD AS ORIGINALLY OFFERED. THUS THE PROTESTING BIDDER STATED IN ITS LETTER OF JUNE 27, 1956, CONTAINED IN THE FILE, THAT IT HOPED THE ENTIRE MATTER WOULD BE PRESERVED IN A STATUS WHERE IT COULD BE FINALLY REVIEWED. CONSEQUENTLY AND SINCE THE RECORD DOES NOT DISCLOSE A VALID BASIS FOR DETERMINING THAT REJECTION OF BOTH OF THE BIDS IN QUESTION WOULD BE IN THE PUBLIC INTEREST AS REQUIRED BY SECTION 3 OF THE ARMED SERVICES PROCUREMENT ACT OF 1947 (SEE B-128449, JULY 23, 1956, 36 COMP. GEN. - (, THE GROBAN ALTERNATIVE OR COMBINATION BID SHOULD BE ACCEPTED, IT BEING THE HIGHEST BID AND BEING "MOST ADVANTAGEOUS TO THE SELLER, PRICE AND OTHER FACTORS CONSIDERED.' SEE 34 COMP. GEN. 535; 19 ID. 356; 15 ID. 354.