B-131248, APR. 24, 1957

B-131248: Apr 24, 1957

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TO EASTERN ROTORCRAFT CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF MARCH 26. BIDDERS WERE ADVISED THAT INSPECTION FOR CONFORMANCE WITH CONTRACT REQUIREMENTS WOULD BE MADE AT THE PLACE OF MANUFACTURE SPECIFIED BY THE CONTRACTOR. NAVY S AND A FORM 111 ENTITLED "ADDITIONAL GENERAL PROVISIONS" WAS INCLUDED AS A PART OF THE INVITATION. " AMENDED THE TERMS AND CONDITIONS OF THE INVITATION DEALING WITH OFFERS OF DISCOUNT AS FOLLOWS: "/C) PROMPT PAYMENT DISCOUNTS WILL BE CONSIDERED IN THE EVALUATION OF BIDS. PROVIDED THE MINIMUM PERIOD OF THE OFFERED DISCOUNT IS 10 DAYS WHEN DELIVERY AND ACCEPTANCE ARE AT POINT OF ORIGIN. 20 DAYS WHEN PRELIMINARY INSPECTION IS AT POINT OF ORIGIN BUT DELIVERY.

B-131248, APR. 24, 1957

TO EASTERN ROTORCRAFT CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 26, 1957, PROTESTING THE PROPOSED AWARD OF A CONTRACT TO DAVIS AIRCRAFT PRODUCTS, INC., PURSUANT TO INVITATION NO. JD-IFB-383-1743-57, ISSUED BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

THE INVITATION AS AMENDED BY SUPPLEMENT NO. 1, DATED FEBRUARY 12, 1957, REQUESTED BIDS FOR FURNISHING A QUANTITY OF AIRCRAFT TIEDOWN CARGO UNITS, DELIVERY TO BE MADE IN SPECIFIED QUANTITIES TO VARIOUS WIDELY-SEPARATED NAVAL ACTIVITIES LISTED IN THE BID SCHEDULE. BIDDERS WERE ADVISED THAT INSPECTION FOR CONFORMANCE WITH CONTRACT REQUIREMENTS WOULD BE MADE AT THE PLACE OF MANUFACTURE SPECIFIED BY THE CONTRACTOR, SUBJECT TO FINAL INSPECTION AND ACCEPTANCE AT THE SEVERAL DESTINATION POINTS SPECIFIED. NAVY S AND A FORM 111 ENTITLED "ADDITIONAL GENERAL PROVISIONS" WAS INCLUDED AS A PART OF THE INVITATION. PARAGRAPH 35 OF THIS FORM, ENTITLED "DISCOUNTS," AMENDED THE TERMS AND CONDITIONS OF THE INVITATION DEALING WITH OFFERS OF DISCOUNT AS FOLLOWS:

"/C) PROMPT PAYMENT DISCOUNTS WILL BE CONSIDERED IN THE EVALUATION OF BIDS, PROVIDED THE MINIMUM PERIOD OF THE OFFERED DISCOUNT IS 10 DAYS WHEN DELIVERY AND ACCEPTANCE ARE AT POINT OF ORIGIN; 20 DAYS WHEN PRELIMINARY INSPECTION IS AT POINT OF ORIGIN BUT DELIVERY, FINAL INSPECTION AND ACCEPTANCE ARE AT A SINGLE POINT OF DESTINATION; AND 30 DAYS WHEN PRELIMINARY INSPECTION IS AT POINT OF ORIGIN BUT DELIVERY, FINAL INSPECTION AND ACCEPTANCE ARE AT MULTIPLE POINTS OF DESTINATION, OR WHEN COMPLETE INSPECTION, DELIVERY AND ACCEPTANCE ARE AT ONE OR MORE POINTS OF DESTINATION. THE OFFERED DISCOUNT OF A SUCCESSFUL BIDDER WILL FORM A PART OF THE AWARD, WHETHER OR NOT SUCH DISCOUNT WAS CONSIDERED IN THE EVALUATION OF HIS BID, AND SUCH DISCOUNT WILL BE TAKEN IF PAYMENT IS MADE WITHIN THE DISCOUNT PERIOD.'

THE DEPARTMENT OF THE NAVY REPORTS THAT BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AS FOLLOWS:

BIDDER UNIT PRICE TERMS

DAVIS AIRCRAFT PRODUCTS, INC. $ 9.18 NET

EASTERN ROTORCRAFT CORP. 9.19 1 PERCENT

- 20 DAYS

EASTERN ROTORCRAFT CORP. (ALTERNATE MATERIAL) 10.05 1 PERCENT

- 20 DAYS

EASTERN ROTORCRAFT CORP. (ALTERNATE MATERIAL) 9.85 1 PERCENT

- 20 DAYS

IF YOUR BID OF $9.19 IS EVALUATED ON THE BASIS OF THE ONE PERCENT DISCOUNT OFFERED, IT OBVIOUSLY IS THE LOW BID; IF THE DISCOUNT IS IGNORED THE $9.18 BID OF DAVIS AIRCRAFT PRODUCTS, C., IS LOW. IT IS YOUR CONTENTION THAT THE DISCOUNT OFFERED BY YOU, ALTHOUGH ON THE BASIS OF A PERIOD SHORTER THAN THE 30 DAYS SPECIFIED IN THE ABOVE QUOTED PROVISION FOR THE TYPE OF CONTRACT INVOLVED, SHOULD BE CONSIDERED IN THE EVALUATION, BECAUSE INVOICES RENDERED BY YOU UNDER A PRIOR CONTRACT WHICH CALLED FOR SEPARATE ITEMS DELIVERED TO DIFFERENT DESTINATIONS WERE HANDLED IN A MAJORITY OF INSTANCES IN THE REGULAR COURSE OF BUSINESS WITHIN A 20-DAY PERIOD. FROM THIS YOU ARGUE THAT THE CONTRACTING OFFICER IS IN ERROR IN HIS INTERPRETATION OF PARAGRAPH 35 WITH RESPECT TO THE MEANING OF MULTIPLE POINTS OF DESTINATION; AND THAT HIS EVALUATION OF YOUR BID WITHOUT DISCOUNT DISREGARDS THE REALITIES OF INVOICE PROCESSING BY THE FINANCE OFFICER AND IS IN DIRECT CONFLICT WITH THE LANGUAGE AND INTENT OF PARAGRAPH 7 (A) OF THE TERMS AND CONDITIONS, WHICH PROVIDES THAT PROMPT PAYMENT DISCOUNTS WILL BE INCLUDED IN THE EVALUATION OF BIDS, PROVIDED THE PERIOD OF THE OFFERED DISCOUNT IS SUFFICIENT TO PERMIT PAYMENT WITHIN SUCH PERIOD IN THE REGULAR COURSE OF BUSINESS UNDER THE DELIVERY, INSPECTION, AND PAYMENT PROVISIONS OF THE INVITATION FOR BID.

THE PURPOSE OF THE STATUTES REQUIRED ADVERTISEMENTS FOR BIDS IN THE PROCUREMENT OF SUPPLIES FOR THE GOVERNMENT IS TO AFFORD ALL PARTIES WHO MIGHT BE INTERESTED A FAIR AND EQUAL OPPORTUNITY TO COMPETE FOR THE BUSINESS OF SUPPLYING THE NEEDS OF THE GOVERNMENT AND TO SECURE TO THE UNITED STATES THE BENEFIT OF FREE AND OPEN COMPETITION. IN THE ACCOMPLISHMENT OF THAT PURPOSE IT IS ESSENTIAL THAT A UNIFORM BASIS FOR EVALUATION OF BIDS BE PROVIDED. IN THE INSTANT CASE THE INVITATION FOR BIDS DEFINITELY ADVISED BIDDERS AS TO THE BASIS ON WHICH THE BIDS RECEIVED IN RESPONSE THERETO WOULD BE EVALUATED, AND BY PARAGRAPH 35 OF FORM 111, WHICH EXPRESSLY AMENDED PARAGRAPH 3 (SHOULD BE 7) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, CLEARLY INDICATED THAT OFFERS OF DISCOUNT FOR PAYMENT IN ANY PERIOD LESS THAN 30 DAYS WOULD NOT BE CONSIDERED IN EVALUATION. TO CONSIDER YOUR DISCOUNT IN THE EVALUATION, IN THE FACE OF THE EXPRESS TERMS OF THE INVITATION, WOULD OBVIOUSLY BE UNFAIR TO THE OTHER BIDDER, WHO MIGHT ALSO HAVE OFFERED A TWENTY-DAY DISCOUNT IF ADVISED THAT IT WOULD BE CONSIDERED. ALSO, SINCE IT IS REPORTED THAT IT MAY NOT BE POSSIBLE FOR THE GOVERNMENT TO TAKE ADVANTAGE OF THE DISCOUNT OFFERED FOR PAYMENT WITHIN 20 CALENDAR DAYS BECAUSE SUCH PERIOD IS CONSIDERED TO BE TOO SHORT, IT IS ENTIRELY POSSIBLE THAT THE GOVERNMENT, AFTER AWARD TO YOU, MIGHT FIND ITSELF REQUIRED TO PAY FOR THE EQUIPMENT AT THE GROSS AMOUNT OF YOUR BID, TO ITS OWN DISADVANTAGE. IT FOLLOWS THAT YOUR DISCOUNT OFFER OF ONE PERCENT FOR PAYMENT WITHIN 20 CALENDAR DAYS MUST BE EXCLUDED FROM CONSIDERATION IN AWARDING THE CONTRACT PURSUANT TO THE INVITATION.

WITHOUT DISCUSSING IN DETAIL THE VARIOUS HYPOTHETICAL SITUATIONS ADVANCED IN YOUR LETTER AS SHOWING THE ERRONEOUS BASIS FOR LIMITING DISCOUNT OFFERS TO THIRTY DAYS WE ARE SATISFIED FROM THE ADMINISTRATIVE REPORT THAT IN THIS INSTANCE THERE IS NO SUBSTANTIAL BASIS FOR OUR DISAPPROVAL OF THE TERMS OF THE SUBJECT INVITATION. ACCORDINGLY, WE WILL NOT OBJECT TO THE AWARD OF A CONTRACT TO DAVIS AIRCRAFT PRODUCTS, INC., IF SUCH BID IS OTHERWISE CORRECT AND PROPER.