B-136197, JUN. 11, 1958

B-136197: Jun 11, 1958

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TO DIMOND AND THERMAN: REFERENCE IS MADE TO YOUR LETTER OF MAY 19. THE BIDDER IS REQUIRED TO INSERT THE BID PRICE PER MONTH FOR PROVIDING THE SERVICE. THE INVITATION INDICATES THAT APPROXIMATE MONTHLY QUANTITIES INVOLVED ARE 4. IT IS FURTHER PROVIDED. THAT THE QUANTITIES ARE ESTIMATES AND FURNISHED FOR INFORMATION ONLY. THAT THEY ARE NOT TO BE REGARDED AS WARRANTIES. YOU CONCLUDE THAT THE PROVISION IN QUESTION IS UNFAIR AND WOULD REQUIRE THE INCLUSION OF AN ADDITIONAL AMOUNT IN THE BID PRICE TO COVER SUCH CONTINGENCIES. IT IS SUFFICIENT TO POINT OUT THAT THE TERMS OF A PUBLIC CONTRACT ARE FOR DETERMINATION BY AUTHORIZED REPRESENTATIVES OF THE CONTRACTING AGENCY. WHO ARE IN THE BEST POSITION TO KNOW THE LEGITIMATE REQUIREMENT OF THE GOVERNMENT WITH REGARD TO THE PROCUREMENT.

B-136197, JUN. 11, 1958

TO DIMOND AND THERMAN:

REFERENCE IS MADE TO YOUR LETTER OF MAY 19, 1958, PROTESTING ON BEHALF OF ARNOLD N. GILMER OF RFD NUMBER 2, ABERDEEN, MARYLAND, THE PROVISIONS OF INVITATION FOR BIDS NO. ORD-18-001-58-123, ISSUED MARCH 21, 1958, BY THE ABERDEEN PROVING GROUND FOR THE COLLECTION, REMOVAL AND DISPOSAL OF REFUSE AND ASH FROM THE PROVING GROUND.

UNDER ITEM NO. 1 OF THE INVITATION, THE BIDDER IS REQUIRED TO INSERT THE BID PRICE PER MONTH FOR PROVIDING THE SERVICE. THE INVITATION INDICATES THAT APPROXIMATE MONTHLY QUANTITIES INVOLVED ARE 4,000 TONS OF REFUSE AND 4,200 TONS OF ASHES. IT IS FURTHER PROVIDED, HOWEVER, THAT THE QUANTITIES ARE ESTIMATES AND FURNISHED FOR INFORMATION ONLY, THAT THEY ARE NOT TO BE REGARDED AS WARRANTIES, AND THAT THE GOVERNMENT ACCEPTS NO RESPONSIBILITY FOR THE ACCURACY THEREOF NOR FOR THE CONSEQUENCES OF ANY CONCLUSIONS DRAWN THEREFROM.

YOU CONTEND THAT "IN ALL FAIRNESS" THE CONTRACT SHOULD PROVIDE FOR AN EQUITABLE ADJUSTMENT FOR ANY VARIATIONS BEYOND A STATED PERCENTAGE IN THE ESTIMATED QUANTITIES. YOU POINT OUT THAT IN CONSIDERING AN EARLIER CONTRACT FOR THE REMOVAL OF GARBAGE WE HELD (B-98396, MARCH 13, 1951) THAT THE CONTRACTOR COULD NOT BE RELIEVED OF HIS RESPONSIBILITIES THEREUNDER NOTWITHSTANDING AN UNANTICIPATED DRASTIC INCREASE IN THE QUANTITY TO BE REMOVED. YOU CONCLUDE THAT THE PROVISION IN QUESTION IS UNFAIR AND WOULD REQUIRE THE INCLUSION OF AN ADDITIONAL AMOUNT IN THE BID PRICE TO COVER SUCH CONTINGENCIES.

WE NEED NOT HERE CONSIDER WHETHER CLAUSE 3 OF THE SPECIAL PROVISIONS PROVIDING FOR AN INCREASE IN THE AMOUNT OF PAYMENT UNDER THE CONTRACT FOR CHANGES IN PICK-UP STATIONS, COLLECTION SCHEDULE, FREQUENCY OF COLLECTIONS OR DISPOSAL SITES WHICH INCREASE THE COST OF PERFORMANCE--- ONE OR MORE OF WHICH CHANGES WOULD LIKELY ACCOMPANY ANY SIGNIFICANT INCREASE IN QUANTITY- -- WOULD PROVIDE THE PROTECTION YOU SEEK. IT IS SUFFICIENT TO POINT OUT THAT THE TERMS OF A PUBLIC CONTRACT ARE FOR DETERMINATION BY AUTHORIZED REPRESENTATIVES OF THE CONTRACTING AGENCY, WHO ARE IN THE BEST POSITION TO KNOW THE LEGITIMATE REQUIREMENT OF THE GOVERNMENT WITH REGARD TO THE PROCUREMENT. OUR FUNCTION IN SUCH MATTERS IS TO INSURE THAT THE PROCUREMENT IS EFFECTED IN ACCORDANCE WITH APPLICABLE LAW AND REGULATION AND THAT APPROPRIATED FUNDS ARE EXPENDED ONLY FOR THE PURPOSE AUTHORIZED. YOU HAVE NOT POINTED OUT, NOR ARE WE AWARE OF, ANY REASON WHY THE ESTIMATED QUANTITY FEATURE OF THE INVITATION WOULD RENDER A CONTRACT RESULTING THEREFROM ILLEGAL.

IT MAY BE THAT A BETTER PRICE MIGHT BE OBTAINED ON BEHALF OF THE GOVERNMENT BY THE INCLUSION OF CERTAIN ADDITIONAL PROVISIONS OR THE MODIFICATION OR EXCLUSION OF OTHERS. COST, HOWEVER, IS NOT THE SOLE CONSIDERATION AND THE FAILURE TO MAKE SUCH CHANGES DOES NOT ALONE RENDER THE INVITATION INVALID. FOR EXAMPLE, IT IS APPARENT THAT GOVERNMENT SURPLUS COULD BE SOLD AT A HIGHER PRICE IF A WARRANTY AS TO THE QUANTITY AND QUALITY OF THE MERCHANDISE WERE SUBSTITUTED FOR THE CUSTOMARY "AS IS, WHERE IS" PROVISION. IT COULD NOT SERIOUSLY BE ARGUED, HOWEVER, THAT THE INCLUSION OF THE LATTER PROVISION IS ILLEGAL OR THAT THE GOVERNMENT'S INTEREST WOULD BE BETTER SERVED BY ITS ELIMINATION. THE LACK OF A PROVISION FOR WHICH YOU CONTEND, THEREFORE, WOULD NOT RENDER A CONTRACT ENTERED INTO UNDER THE INVITATION ILLEGAL NOR WOULD IT JUSTIFY OUR REQUIRING THE CONTRACTING AGENCY TO WITHDRAW THE INVITATION.

YOU ALSO CONTEND THAT THE INVITATION IS "AMBIGUOUS AND INCOMPLETE" FOR FAILURE TO INCORPORATE BY REFERENCE THE DOCUMENT ENTITLED "SPECIAL PROVISIONS" WHICH WAS ENCLOSED WITH INVITATION. YOU POINT OUT THAT A BID PROPERLY SUBMITTED ON THE INVITATION FORM WHEN ACCEPTED BY THE GOVERNMENT BECOMES THE CONTRACT AND YOU ALLEGE THAT UNDER THE CIRCUMSTANCES A SERIOUS QUESTION WOULD ARISE AS TO WHETHER THE SPECIAL PROVISIONS WERE A PART OF THE CONTRACT. YOUR CONCLUSION APPEARS TO BE BASED ON THE PARAGRAPH HEADED "CONTRACT PROVISIONS" APPEARING ON PAGE 2 OF THE INVITATION WHICH PROVIDES FOR THE INCORPORATION OF OTHER MATERIAL BUT NOT OF THE SPECIAL PROVISION.

WE AGREE THAT ANY PROVISIONS INTENDED TO BE MADE A PART OF THE INVITATION SHOULD BE PHYSICALLY INCLUDED OR REFERENCED SO THAT NO REASONABLE DOUBT COULD EXIST AS TO THE PROVISIONS COMPRISING THE RESULTING CONTRACT. WITH REGARD TO THE INCLUSION OF THE "SPECIAL PROVISIONS," YOUR ATTENTION IS INVITED TO THE LANGUAGE AT THE TOP OF PAGE 1 OF THE INVITATION PROVIDING IN PART---

"SEALED BIDS IN TRIPLICATE, SUBJECT TO (1) THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, (2) THE ACCOMPANYING SCHEDULE, (3) GENERAL PROVISIONS (STANDARD FORM 32, NOV. 1949EDITION), WHICH ARE INCORPORATED HEREIN BY REFERENCE, AND (4)SUCH OTHER CONTRACT PROVISIONS AND SPECIFICATIONS AS ARE ATTACHED OR INCORPORATED BY REFERENCE IN THE SCHEDULE * * *.'

YOUR ATTENTION IS FURTHER INVITED TO ITEM 1 WHICH APPEARS ON PAGE 3 OF THE INVITATION AND WHICH READS IN PERTINENT PART:

"SERVICES AND EQUIPMENT NECESSARY FOR THE COLLECTION, HAULING AND DISPOSAL OF ASHES AND REFUSE WITHIN THE NON-INDUSTRIAL AREA, SWAN MEADOWS AND LEE VILLAGE HOUSING PROJECTS, AND THE APG TRAILER CAMP, ABERDEEN PROVING GROUND, MARYLAND, IN ACCORDANCE WITH SPECIAL PROVISIONS * * *.'

WE CONSIDER THAT THE PROVISIONS QUOTED ABOVE COULD LEAVE NO REASONABLE DOUBT THAT THE "SPECIAL PROVISIONS" WOULD BE AN ESSENTIAL PART OF ANY CONTRACT RESULTING FROM THE INVITATION. 35 COMP. GEN. 484, 486.

IN ACCORDANCE WITH THE FOREGOING, YOU ARE ADVISED THAT YOUR LETTER OF MAY 19 CONTAINS NO BASES FOR CONCLUDING THAT THE SUBJECT INVITATION IS IN ANY WAY ILLEGAL.