B-129322, NOV. 16, 1956

B-129322, NOV. 16, 1956

TO EDWIN J. MCDERMOTT, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 31, 1956, REQUESTING RECONSIDERATION OF OUR DECISION OF OCTOBER 26, 1956, WHICH HELD THE BID SUBMITTED BY RICE-STIX UNDER INVITATION NO. IFB-N140-108-57 TO HAVE BEEN A RESPONSIVE BID.

THE LANGUAGE OF THE BID WHICH YOU ALLEGE MADE IT UNRESPONSIVE WAS INSERTED BY RICE-STIX IN A SPACE PROVIDED FOR BIDDERS TO SET FORTH THE QUANTITY ON WHICH THEY DESIRED TO BID, AND READ AS FOLLOWS:

"465,980 (EA.) PLUS OPTION--- ALL OR NONE"

THE INVITATION REQUESTED BIDS FOR FURNISHING ALL OR PART OF 465,980 PAIRS OF TROUSERS, WITH AN OPTION ON THE PART OF THE GOVERNMENT TO PURCHASE AN ADDITIONAL 232,990 PAIRS. IN OUR DECISION OF OCTOBER 26, 1956, WE CONCLUDED THAT THE LANGUAGE USED BY RICE-STIX IN ITS BID MEANT MERELY THAT IT WAS BIDDING ON NOT LESS THAN THE TOTAL QUANTITY WHICH WAS NOT SUBJECT TO THE OPTION, THAT IS, 465,980 PAIRS, PLUS SUCH ADDITIONAL OPTIONAL QUANTITY AS THE GOVERNMENT MIGHT ORDER.

YOU CONTEND THAT RICE-STIX'S BID WAS AN ALL OR NONE BID ON 465,980 PAIRS PLUS 232,990 PAIRS, OR, IN OTHER WORDS, THAT IT WAS AN ATTEMPT ON THE PART OF RICE-STIX TO DO AWAY WITH ANY OPTION ON THE PART OF THE GOVERNMENT AND TO COMPEL THE PURCHASE OF 698,970 PAIRS. IF THE BID WERE TO BE SO CONSTRUED, WE AGREE THAT A SERIOUS QUESTION WOULD ARISE AS TO ITS ACCEPTABILITY. IN SUPPORT OF YOUR CONTENTION THAT THE BID SHOULD BE GIVEN THIS MEANING YOU HAVE SUBMITTED AFFIDAVITS TO THE EFFECT THAT THE PRESIDENT OF RICE-STIX, PRIOR TO THE SUBMISSION OF ITS BID, SECURED A QUOTATION FOR SUFFICIENT CLOTH TO MANUFACTURE 698,970 PAIRS OF TROUSERS, THE TOTAL QUANTITY OF CLOTH TO BE DELIVERED IN ONE LOT UPON AWARD TO IT; THAT TWO DAYS AFTER BID OPENING RICE-STIX'S PRESIDENT TOLD THE CLOTH SUPPLIER THAT ITS BID WAS INTENDED TO MEAN 698,970 PAIRS OR NONE.

THE QUESTION FOR DECISION IS THE LEGAL EFFECT TO BE GIVEN RICE STIX'S BID, CONSIDERED IN THE LIGHT OF THE CONDITIONS AND DIRECTIONS CONTAINED IN THE INVITATION. THE INVITATION ITSELF (STANDARD FORM 33) BECAME THE BID UPON INSERTION OF PRICES AND OTHER DATA BY A BIDDER. AS WE POINTED OUT IN OUR DECISION OF OCTOBER 26, 1956, THE INVITATION SPECIFICALLY STATED THAT THE INITIAL AWARD WOULD BE MADE ONLY FOR THE QUANTITY OF 465,980 PAIRS OF TROUSERS. IN OTHER WORDS, BIDDERS WERE PLAINLY NOTIFIED THAT AWARD WOULD BE MADE WITHOUT REGARD TO ANY OPTIONAL AMOUNT WHICH THE GOVERNMENT MIGHT OR MIGHT NOT ORDER LATER ON FROM THE BIDDER (OR BIDDERS) WHO RECEIVED AN AWARD OF THE BASIC QUANTITY OF 465,980. A BID WHICH ATTEMPTED TO COMPEL THE GOVERNMENT TO EXERCISE ITS OPTION BEFORE AWARD WOULD DEFINITELY BE UNRESPONSIVE SINCE IT WOULD REQUIRE AWARD TO BE MADE ON A BASIS DIFFERENT FROM THAT SET FORTH IN THE INVITATION. WE BELIEVE THE GOVERNMENT HAD A RIGHT TO ASSUME, IN THE ABSENCE OF CLEAR LANGUAGE TO THE CONTRARY IN A BID, THAT BY THE FACT OF SUBMITTING A BID THE BIDDER INTENDED HIS BID TO BE RESPONSIVE AND HOPED TO HAVE IT ACCEPTED. THAT BEING SO, ASSUMING RICE -STIX'S BID HAD BEEN ACCEPTED IMMEDIATELY AFTER BID OPENING, WE DO NOT THINK THE COMPANY REASONABLY COULD ARGUE THAT WHILE IT HAD SUBMITTED A BID IN RESPONSE TO THE INVITATION IT HAD NOT INTENDED TO SUBMIT A BID WHICH COULD BE ACCEPTED. HAD THIS BEEN ITS INTENTION, OF COURSE, IT NEED NOT HAVE BID AT ALL. FURTHERMORE, AS YOU STATE IN YOUR LETTER OF OCTOBER 31, 1956, THE BIDDER'S LANGUAGE IS TO BE CONSTRUED AGAINST HIM. APPLICATION OF THIS PRINCIPLE TO RICE-STIX'S BID WOULD RESULT IN LEAVING WITH THE GOVERNMENT THE OPTION TO PURCHASE OR TO REFUSE TO PURCHASE ANYTHING IN EXCESS OF 465,980 PAIRS OF TROUSERS, WHICH IS WHAT THE COMPANY ITSELF, IN A TELEGRAM DATED OCTOBER 3, 1956, ADVISED THE NAVY PURCHASING OFFICER IT INTENDED ITS BID TO MEAN.

IN THIS CONNECTION, THE FACT THAT THE NAVY MADE INQUIRY OF RICE-STIX CONCERNING ITS BID SHOULD NOT BE CONSTRUED AS INDICATIVE OF DOUBT AS TO ITS MEANING. WE ARE INFORMED THAT SUCH INQUIRY WOULD NOT HAVE BEEN MADE BUT FOR YOUR PROTEST THAT THE BID WAS NOT RESPONSIVE.

ANOTHER FACTOR WHICH MUST BE CONSIDERED IN DETERMINING THE LEGAL EFFECT OF RICE-STIX'S BID IS THE LANGUAGE OF PARAGRAPH 8 (C) OF THE TERMS AND CONDITIONS OF THE INVITATION. UNDER PARAGRAPH 8 (C) THE GOVERNMENT RESERVED THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY BID UPON AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIED OTHERWISE IN HIS BID. AS WE STATED IN OUR DECISION OF OCTOBER 26, 1956, THE INSERTION BY RICE-STIX OF THE FIGURE 465,980 IN THE SPACE WHICH BIDDERS WERE INSTRUCTED TO FILL IN MIGHT, AND PROBABLY WOULD, BE CONSTRUED AS THE MAXIMUM QUANTITY BID UPON AND A REFUSAL TO ACCEPT ORDERS FOR ADDITIONAL QUANTITIES UNDER THE OPTION. ON THE OTHER HAND, BECAUSE OF THE PROVISIONS OF PARAGRAPH 8 (C), IT WAS NECESSARY FOR BIDDERS TO USE THE PHRASE "ALL OR NONE" OR EQUIVALENT LANGUAGE IN CONJUNCTION WITH ANY FIGURE INSERTED IN THE SPACE PROVIDED IF THEY WERE UNWILLING TO ACCEPT AWARD FOR A LESSER QUANTITY. IT WAS, THEREFORE, NECESSARY FOR A BIDDER WISHING TO BID ON A MINIMUM OF 465,980 PAIRS AND WILLING TO ACCEPT ORDERS FOR ADDITIONAL QUANTITIES UNDER THE OPTION TO INDICATE BOTH HIS WILLINGNESS TO ACCEPT THE OPTION AND HIS UNWILLINGNESS TO ACCEPT AWARD FOR LESS THAN 465,980 PAIRS.

IN OUR OPINION, THE LANGUAGE USED BY RICE-STIX IN ITS BID WAS REASONABLY ADAPTED TO CONVEY THIS MEANING. IT DID NOT STATE THAT IT WAS BIDDING ON 698,970 PAIRS, ALL OR NONE; IT DID NOT STATE THAT IT WAS BIDDING ON 465,980 PAIRS PLUS THE "OPTIONAL AMOUNT," WHICH WAS THE LANGUAGE THE INVITATION USED TO DESCRIBE THE ADDITIONAL QUANTITY OF 232,990 PAIRS, ALL OR NONE. IT STATED SIMPLY THAT IT WAS BIDDING ON "465,980 (EA.) PLUS OPTION--- ALL OR NONE.' IT IS SIGNIFICANT THAT IT RETAINED AND USED THE WORD "OPTION" IN ITS BID. OBVIOUSLY, IF IT HAD BEEN BIDDING ON A MINIMUM OF 698,970 PAIRS, THERE WOULD BE NO "OPTION" LEFT WITH THE GOVERNMENT. THE WORD ITSELF MEANS THAT FREEDOM OF CHOICE EXISTS.

FOR THESE REASONS, DESPITE THE CONFLICTING EVIDENCE AS TO THE INTENDED MEANING OF ITS BID, WE FEEL THAT RICE-STIX'S BID WAS RESPONSIVE AND PROPERLY MAY BE ACCEPTED. ACCORDINGLY, THE DECISION OF OCTOBER 26, 1956, IS SUSTAINED.