B-136050, JUN. 18, 1958

B-136050: Jun 18, 1958

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED MAY 28. TWENTY-FOUR BIDS WERE RECEIVED AND. WAS FOUND TO HAVE SUBMITTED THE LOWEST BID OF $1. IT IS THE CONTENTION OF THE PROTESTANT THAT THIS BILL OF MATERIALS BECAME A PART OF THE BID AND SINCE CERTAIN OF THE ITEMS LISTED THEREIN DEVIATE FROM SPECIFICATION REQUIREMENTS IN MATERIAL RESPECTS. WE ARE CERTAIN THAT THE BALANCE OF THE BILL OF MATERIALS IS DEFICIENT IN SIMILAR RESPECT AS COMPARED WITH OTHER SPECIFICATION REQUIREMENTS. "3. THAT IT WAS THE INTENTION OF THE CONTRACTOR TO LIMIT ITS LIABILITY IN THE CASE OF AN AWARD. "4.THAT EVEN IF IT WAS NOT THE CONTRACTOR'S INTENTION. "A. THE BILL OF MATERIALS DEVIATES IN CERTAIN RESPECTS OR IS INCOMPLETE.

B-136050, JUN. 18, 1958

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED MAY 28, 1958, FROM THE DEPUTY ASSISTANT SECRETARY, TRANSMITTING THE FILE PERTAINING TO THE PROTEST OF THE CONSOLIDATED DIESEL ELECTRIC CORPORATION AGAINST ANY AWARD OF A CONTRACT TO A BIDDER OTHER THAN ITSELF UNDER INVITATION FOR BIDS NO. 14- 604-58-655, OPENED ON APRIL 10, 1958, AT THE TOPEKA AIR FORCE DEPOT.

THE INVITATION REQUESTED OFFERS FOR 144 AIRCRAFT HYDRAULIC SYSTEM TEST STANDS, TOGETHER WITH RELATED ENGINEERING AND TECHNICAL DATA. TWENTY-FOUR BIDS WERE RECEIVED AND, UPON PUBLIC OPENING, THE INDUSTRIAL ENGINEERING COMPANY OF LOUISVILLE, KENTUCKY, WAS FOUND TO HAVE SUBMITTED THE LOWEST BID OF $1,383,300. GREER HYDRAULICS ENGINEERING CORPORATION OF LOS ANGELES, CALIFORNIA, SUBMITTED THE SECOND LOW BID OF $1,551,771.01; AND THE PROTESTANT SUBMITTED THE THIRD LOW BID AT $1,561,631.

INDUSTRIAL ENGINEERING IN SUBMITTING ITS BID INCLUDED A BILL OF MATERIALS ENTITLED "MAJOR COMPONENTS MATERIAL LIST" FOR TYPE MJ-2 (GASOLINE) (2) 30 GPM PUMPS (2) ENGINES, "OUR QUOTATION NO. X-17 085.' IT IS THE CONTENTION OF THE PROTESTANT THAT THIS BILL OF MATERIALS BECAME A PART OF THE BID AND SINCE CERTAIN OF THE ITEMS LISTED THEREIN DEVIATE FROM SPECIFICATION REQUIREMENTS IN MATERIAL RESPECTS, INDUSTRIAL'S BID SHOULD BE REJECTED AS NON-RESPONSIVE. SPECIFICALLY, THE PROTESTANT STATES THAT:

"2. THE BILL OF MATERIALS INCLUDED A RESERVOIR WHICH AS DESCRIBED DOES NOT MEET FULLY THE RESERVOIR REQUIREMENTS OF PARAGRAPH 3.9.6 OF THE SPECIFICATIONS. WE ARE CERTAIN THAT THE BALANCE OF THE BILL OF MATERIALS IS DEFICIENT IN SIMILAR RESPECT AS COMPARED WITH OTHER SPECIFICATION REQUIREMENTS.

"3. THAT IT WAS THE INTENTION OF THE CONTRACTOR TO LIMIT ITS LIABILITY IN THE CASE OF AN AWARD.

"4.THAT EVEN IF IT WAS NOT THE CONTRACTOR'S INTENTION, THIS BID OF WHICH THE BILL OF MATERIALS FORMS A PART SHOULD STILL BE REJECTED ON THE FOLLOWING BASIS.

"A. THE BILL OF MATERIALS DEVIATES IN CERTAIN RESPECTS OR IS INCOMPLETE, AND THUS WOULD LIMIT THE CONTRACTOR'S LIABILITY TO PERFORM TO THE ADVERTISED SPECIFICATIONS.

"B. THE BID IS NOT IN FULL COMPLIANCE WITH THE SPECIFICATIONS AS EVIDENCED BY THE BILL OF MATERIALS. AS SUCH THERE IS NO BASIS FOR COMPARISON. UNDER THESE CONDITIONS, ANY RESULTANT AWARD WOULD NOT BE THE SAME CONTRACT WHICH WOULD GO TO THE OTHER BIDDERS.

"5. THAT THE CONTRACTING OFFICER AFTER STUDYING THE BILL OF MATERIALS MUST HAVE DOUBTS AS TO THE CONTRACTOR'S INTENDED PERFORMANCE AS TO DEVIATIONS, OMISSIONS, ETC., ESPECIALLY IN VIEW OF THE EXTREMELY LOW PRICE IN RELATION TO THE OTHER BIDDERS.

"6. IN VIEW OF THE NON-CONFORMANCE TO SPECIFICATIONS OR AREAS OF DOUBT, THE CONTRACTING OFFICER MAY NOT REQUEST CLARIFICATION FOR IT WOULD GO TO THE SUBSTANCE OF THE BID. THE BIDDER CANNOT BE GIVEN A CHANCE TO CHANGE HIS BID.'

INDUSTRIAL HAS ALLEGED THAT THE BILL OF MATERIALS WAS APPENDED TO ITS BID INADVERTENTLY AND WITH NO INTENTION THAT IT BE CONSIDERED AS A PART THEREOF; THAT THE BILL OF MATERIALS WAS FOR INTER-OFFICE USE ONLY IN PREPARING ITS BID, AND THAT IT WAS NOT THE BILL OF MATERIALS USED IN COMPUTING ITS BID BECAUSE OF OBVIOUS ERRORS THEREIN. AFFIDAVITS HAVE BEEN SUBMITTED BY INDUSTRIAL IN SUPPORT OF THESE ALLEGATIONS. THE COMPANY REQUESTS THAT ITS BID BE CONSIDERED AS SUBMITTED WITHOUT REFERENCE TO THE BILL OF MATERIALS.

WITH RESPECT TO THE INCLUSION OF THE BILL OF MATERIALS WITH THE INVITATION, MR. NASH, PRESIDENT OF INDUSTRIAL, STATED IN A LETTER DATED MAY 29, 1958, TO OUR OFFICE, THAT:

"* * * THE BID FORM ITSELF COMPLETELY AND ACCURATELY REFLECTS OUR INTENDED BID. THE BILL OF MATERIALS WAS TYPED ONLY FOR OUR OWN OFFICE USE AND, AS PREPARATION OF THE BID PROGRESSED, CHANGES AND CORRECTIONS WERE MADE ON THE COPIES SO THAT OUR FINAL BID WOULD CONFORM TO THE INVITATION AND TO THE SPECIFICATIONS. WE DO NOT KNOW WHAT COPY OF OUR BILL OF MATERIALS WORK SHEET WAS INCLUDED IN THE BID ENVELOPE, BUT WE DO KNOW THAT IT WAS NOT INTENDED TO BE INCLUDED AS PART OF OUR BID. WE FURTHER CALL TO YOUR ATTENTION OUR CUSTOMARY PRACTICE OF WRITING A LETTER OF TRANSMITTAL WHEN A BILL OF MATERIALS IS TO BE DEEMED PART OF THE BID. NO BILL OF MATERIALS WAS REQUIRED OR REQUESTED BY THE CONTRACTING AGENCY. WE REPEAT THAT WE ARE READY AND ABLE TO PERFORM UNDER THE TERMS OF OUR BID AT THE UNIT PRICE QUOTED THE GOVERNMENT THEREIN.'

SWORN AFFIDAVITS EXECUTED ON THE SAME DAY BY MR. NASH AND MR. DAVENPORT, WHO EXECUTED THE BID ON BEHALF OF INDUSTRIAL, SUBSTANTIATE THE ABOVE STATEMENTS.

IT SHOULD BE OBSERVED AT THE OUTSET THAT THE INVITATION DID NOT REQUIRE THE SUBMISSION OF A BILL OF MATERIALS OR ANY OTHER DATE. NEITHER DOES ANYTHING APPEAR ON THE BID AS SUBMITTED WHICH INDICATES THAT THE BILL OF MATERIALS WAS TO BE CONSIDERED A PART THEREOF OR WAS SUBMITTED FOR USE IN EVALUATING THE BID. WHILE THE TERM "OUR QUOTATION NO. X-17-085" APPEARS ON BOTH THE BILL OF MATERIALS AND THE INVITATION, THE FACTS OF RECORD ESTABLISH THAT SUCH TERM IS AN OFFICE REFERENCE NUMBER SPECIFICALLY ASSIGNED BY INDUSTRIAL TO THE INSTANT INVITATION FOR CONTROL PURPOSES.

THE INVITATION PROVIDES THAT THE GOVERNMENT FURNISH THE GASOLINE ENGINE SYSTEM, INCLUDING THE CARBURATOR, CARBURATOR AIR FILTER,IGNITION CABLE ASSEMBLY, MAGNETO, SPARK PLUGS, WINTERIZATION EQUIPMENT, OIL COOLER, STARTER, AND FUEL PUMP. HOWEVER, CERTAIN OTHER ITEMS PERTAINING TO THE ENGINE SYSTEM ARE REQUIRED TO BE FURNISHED BY THE SUCCESSFUL BIDDER, I.E., ENGINE GOVERNORS, BATTERIES AND GENERATOR SYSTEMS, FUSE OR CIRCUIT BREAKERS, FUEL TANK, GEAR CASE OR DRIVE COUPLING, HEATERS, AND ENGINE CONTROLS AND INSTRUMENTS. IT IS NOTED THAT THE BILL OF MATERIALS INCLUDED SOME ITEMS WHICH WERE TO BE GOVERNMENT-FURNISHED AND EXCLUDED SOME ITEMS WHICH WERE REQUIRED TO BE FURNISHED BY THE SUCCESSFUL BIDDER. SEVERAL IDENTICAL COPIES OF THE BILL OF MATERIALS AND A WORKSHEET WERE SUBMITTED TO OUR OFFICE BY INDUSTRIAL WHICH SHOW PENCILLED CORRECTIONS AND ADDITIONS THEREON. CAREFUL ANALYSIS AND COMPARISON OF THESE COPIES WITH THE ONE SUBMITTED WITH THE BID CONVINCES US THAT THE BILL OF MATERIALS WAS, IN FACT, A BID WORKSHEET FOR OFFICE USE IN PREPARING THE DETAILS OF ITS BID, AND WAS NOT DESIGNED FOR CONSIDERATION IN EVALUATING INDUSTRIAL'S BID. OUR OPINION THE INCOMPLETENESS OF THE DATA AND, FURTHER, THE ENUMERATION OF SOME OF THE NECESSARY COMPONENT PARTS WITH A MINIMUM OF TECHNICAL DESCRIPTION BUT WITHOUT DIRECT REFERENCE TO THE INVITATION, CONFIRMS THIS VIEW.

A REASONABLE APPRAISAL OF ALL THE FACTS OF RECORD IN OUR OPINION JUSTIFIES THE CONCLUSION THAT THE BILL OF MATERIALS WAS INCLUDED BY INDUSTRIAL AS A RESULT OF MISTAKE AND WITH NO INTENTION TO QUALIFY ITS BID OR LIMIT ITS OBLIGATION TO PERFORM IN ACCORDANCE WITH THE SPECIFICATIONS. ACCORDINGLY, THE BID OF INDUSTRIAL SHOULD BE CONSIDERED FOR AWARD WITHOUT REGARD TO THE BILL OF MATERIALS. THIS CONCLUSION DOES NOT CONFLICT WITH THE DECISIONS CITED BY THE PROTESTANT IN SUPPORT OF ITS POSITION (36 COMP. GEN. 193 ID. 535; ID. 705; 30 ID. 179), SINCE, UNLIKE HERE, THE BIDDERS IN THOSE CASES INDICATED A PURPOSE TO DEPART FROM THE REQUIREMENTS OF THE INVITATION IN EXPRESS TERMS, OR DELIBERATELY SUBMITTED NONCONFIRMING DATA WITH THE INTENTION THAT IT BE CONSIDERED AN INTEGRAL PART OF THE BID.

THE PROTESTANT ALSO CONTENDS THAT NEITHER THE SECOND-LOW BID OF GREER HYDRAULICS ENGINEERING CORPORATION NOR THE FOURTH-LOW BID OF GREER HYDRAULICS CORPORATION SHOULD BE CONSIDERED FOR AWARD IN VIEW OF THE INTERRELATION BETWEEN THE FIRMS. HOWEVER, WE FIND IT UNNECESSARY TO CONSIDER THIS CONTENTION SINCE YOUR DEPARTMENT HAS INFORMALLY ADVISED THAT IF INDUSTRIAL'S BID MAY PROPERLY BE CONSIDERED AWARD OF THE CONTRACT WILL BE MADE TO THAT COMPANY. IF A DETERMINATION OF THE SECOND LOW BIDDER'S ELIGIBILITY FOR AWARD UNDER THIS INVITATION SUBSEQUENTLY BECOMES NECESSARY, THAT MATTER MAY THEN BE SUBMITTED HERE FOR OUR CONSIDERATION.

THE ENCLOSURES TO THE LETTER OF MAY 28, 1958, ARE RETURNED AS REQUESTED.