B-128836, OCT. 18, 1956

B-128836: Oct 18, 1956

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TO THE STANDARD REGISTER COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 26. THE UNIT PRICE WILL GOVERN.' "8. - (A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID. WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT. ANY VARIATION IN THE QUANTITY OF DELIVERED STENCILS NOT EXCEEDING 10 PERCENT WILL BE ACCEPTED AS FULFILLMENT OF THE ORDER. 400 AND STIPULATED THAT THE BID WAS BASED ON THE AWARD BEING MADE IN THE AGGREGATE. NO UNIT PRICES WERE QUOTED FOR ANY OF THE INDIVIDUAL ITEMS. TWO OF THE OTHER BIDS WERE ALSO CONDITIONED ON AWARD BEING MADE ON AN "ALL OR NONE" BASIS. THE NEXT-LOWEST BID ON THE QUANTITIES SPECIFIED WAS IN THE TOTAL AMOUNT OF $11. YOUR BID WAS THE LOWEST RECEIVED FOR THE QUANTITIES SPECIFIED.

B-128836, OCT. 18, 1956

TO THE STANDARD REGISTER COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 26, 1956, PROTESTING THE AWARD OF THE CONTRACT MADE BY THE DEFENSE SUPPLY SERVICE, DEPARTMENT OF THE ARMY, UNDER INVITATION FOR BIDS NO. DSS-49 083-57-2, OPENED ON JULY 20, 1956.

THE INVITATION REQUESTED BIDS FOR FURNISHING CONTINUOUS, TABULATING, STOCK FORMS, SIZE 14 7/8 INCHES BY 11 INCHES, IN THE QUANTITIES AND TYPES SET FORTH UNDER ITEMS NOS. 1 THROUGH 4. THE INVITATION SPECIFIED A DESIRED DELIVERY SCHEDULE OF ONE-SIXTH OF THE QUANTITY OF EACH TYPE OF FORM BY SEPTEMBER 15, 1956, AND THE SAME QUANTITIES EACH MONTH THEREAFTER UNTIL COMPLETED.

THE TERMS AND CONDITIONS MADE A PART OF THE INVITATION PROVIDE, IN PART, AS FOLLOWS:

"1.PREPARATION OF BIDS.--- * * *

"/C) UNIT PRICE FOR EACH UNIT BID ON SHALL BE SHOWN AND SUCH PRICE SHALL INCLUDE PACKING UNLESS OTHERWISE SPECIFIED. A TOTAL SHALL BE ENTERED IN THE AMOUNT COLUMN OF THE SCHEDULE FOR EACH ITEM BID ON. IN CASE OF ERROR IN EXTENSION OF PRICE, THE UNIT PRICE WILL GOVERN.'

"8. AWARD OF CONTRACT.--- (A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

"/B) THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED.

"VARIATION IN DELIVERED QUANTITIES: SEE GENERAL PROVISIONS, CONDITION 4, ANY VARIATION IN THE QUANTITY OF DELIVERED STENCILS NOT EXCEEDING 10 PERCENT WILL BE ACCEPTED AS FULFILLMENT OF THE ORDER, WHEN CAUSED BY CONDITIONS OF LOADING, SHIPPING, PACKING OR ALLOWANCE IN MANUFACTURING PROCESSES, AND PAYMENT SHALL BE ADJUSTED ACCORDINGLY.'

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID OFFERING TO FURNISH ALL OF THE SPECIFIED NUMBER OF FORMS FOR THE LUMP SUM OF $11,400 AND STIPULATED THAT THE BID WAS BASED ON THE AWARD BEING MADE IN THE AGGREGATE. NO UNIT PRICES WERE QUOTED FOR ANY OF THE INDIVIDUAL ITEMS. ALL OF THE SEVEN OTHER BIDS RECEIVED QUOTED INDIVIDUAL UNIT PRICES AS REQUIRED BY PARAGRAPH 1 (C). TWO OF THE OTHER BIDS WERE ALSO CONDITIONED ON AWARD BEING MADE ON AN "ALL OR NONE" BASIS. ALL BIDDERS OFFERED TO PERFORM IN ACCORDANCE WITH THE DESIRED DELIVERY SCHEDULE. THE NEXT-LOWEST BID ON THE QUANTITIES SPECIFIED WAS IN THE TOTAL AMOUNT OF $11,417.62.

YOUR BID WAS THE LOWEST RECEIVED FOR THE QUANTITIES SPECIFIED. HOWEVER, SINCE THE BID DID NOT SHOW PRICES FOR THE INDIVIDUAL ITEMS, IT WAS CONSIDERED AS BEING UNRESPONSIVE AND WAS REJECTED. THE REASONS FOR SUCH DETERMINATION ARE SET FORTH IN REPORT DATED AUGUST 20, 1956, FROM THE DEPARTMENT OF THE ARMY, AS FOLLOWS:

"UNDER THE TERMS AND CONDITIONS OF THE BID INVITATION, A VARIATION IN QUANTITY DELIVERED NOT EXCEEDING 10 PERCENT WAS AUTHORIZED UNDER CERTAIN CONDITIONS SPECIFIED THEREIN. NONE OF THE CONDITIONS SPECIFIED ARE THOSE OVER WHICH THE CONTRACTING OFFICER COULD EXERCISE CONTROL. SINCE THE BID OF THE STANDARD REGISTER COMPANY DID NOT QUOTE UNIT PRICES AS REQUIRED BY THE BID INVITATION, IT WAS IMPOSSIBLE TO EVALUATE THEIR BID WITH RESPECT TO OTHERS, AND TO ESTIMATE THE POTENTIAL COST TO THE GOVERNMENT IN THE EVENT OF AN OVER-RUN ON ANY OR ALL ITEMS. THE EXPERIENCE OF THE DEFENSE SUPPLY SERVICE-WASHINGTON WITH RESPECT TO CONTRACT AWARDS FOR STOCK AND OTHER TABULATING FORMS HAS BEEN THAT OVER-RUNS OCCUR ALMOST INVARIABLY, WHICH SEEMS TO BE A COMMON PRACTICE IN THE FORMS INDUSTRY. THE EXECUTION OF A CONTRACT INCLUDING AN UNKNOWN POTENTIAL AS TO QUANTITIES AND PRICES WAS NOT CONSIDERED PROPER BY THE CONTRACTING OFFICER; NEITHER WAS IT CONSIDERED PROPER TO ACCEPT UNIT PRICES AFTER THOSE OF OTHER BIDDERS HAD BEEN PUBLICLY DISCLOSED.'

IT IS STATED IN YOUR LETTER OF JULY 26, 1956, THAT THE FAILURE TO SPECIFY UNIT PRICES FOR THE INDIVIDUAL ITEMS WAS A MERE INFORMALITY AND, AS SUCH, SHOULD HAVE BEEN WAIVED UNDER THE PROVISIONS OF PARAGRAPH 8 (B); THAT THE REASONS FOR REJECTION WERE BASED UPON CONJECTURE AS TO WHAT MIGHT HAPPEN AND NOT UPON THE ACTUAL SITUATION, SINCE THE FORMS INVOLVED WERE STOCK FORMS ORDINARILY CARRIED ON THE SHELF IN PRECISE QUANTITIES, AND THERE WAS NO REASON TO ASSUME THAT THERE WOULD BE AN OVER-SHIPMENT OR UNDER- SHIPMENT, AND THAT IF THERE WERE ANY BASIS FOR SUCH FEARS THE COMPANY SHOULD HAVE BEEN PERMITTED TO FURNISH THE PRICES FOR THE INDIVIDUAL ITEMS.

YOUR CONTENTION THAT THERE WAS NO REASON TO ASSUME THAT THERE WOULD BE AN OVER-SHIPMENT OR UNDER-SHIPMENT, SINCE THE FORMS INVOLVED WERE STOCK FORMS CARRIED ON THE SHELF RATHER THAN CUSTOM MADE FORMS, MIGHT BE CORRECT PROVIDED IT COULD ALSO BE ASSUMED THAT THE CONTRACTOR DESIRED TO LIMIT UNDER-SHIPMENTS OR OVER-SHIPMENTS. HOWEVER, WHETHER OR NOT HE DOES SO IS LEFT TO HIM AND IT IS REPORTED THAT EXPERIENCE HAS SHOWN THAT OVER- SHIPMENTS INVARIABLY OCCUR. THUS, IT WOULD APPEAR THAT FOR THE CONTRACTING AGENCY TO HAVE FAILED TO CONSIDER THE POSSIBILITY OF UNDER- SHIPMENTS OR OVER-SHIPMENTS WOULD HAVE BEEN TO IGNORE A SITUATION WHICH PAST EXPERIENCE HAS DEMONSTRATED TO BE INEVITABLE.

THE INVITATION REQUIRED THAT UNIT PRICES BE SHOWN FOR THE INDIVIDUAL ITEMS AND, IN VIEW OF THE FACT THAT A TEN PERCENT OVER-SHIPMENT OR UNDER- SHIPMENT WAS PERMITTED, WITH APPROPRIATE ADJUSTMENT OF THE CONTRACT PRICE, SUCH PRICES WERE DEFINITELY REQUIRED IN ORDER TO PERMIT OF A PROPER EVALUATION OF THE BIDS. THIS IS NOT A CASE WHERE THE UNIT PRICE WAS ARITHMETICALLY DETERMINABLE FROM THE LUMP-SUM PRICE QUOTED; SINCE THE INDIVIDUAL ITEMS WERE DIFFERENT THERE WAS NO METHOD BY WHICH THE PRICES FOR THOSE ITEMS COULD BE DETERMINED FROM THE LUMP SUM QUOTED BY YOU. SUCH BEING THE FACTS, THE FAILURE TO QUOTE PRICES FOR THE FOUR ITEMS WAS NOT A MERE INFORMALITY PARTICULARLY WHERE, AS HERE, THE DIFFERENCE BETWEEN YOUR BID AND THE NEXT LOWEST BID WAS SO SMALL.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO PROPER BASIS UPON WHICH WE COULD OBJECT TO THE AWARD MADE BY THE DEPARTMENT OF THE ARMY.