B-136543, AUG. 1, 1958

B-136543: Aug 1, 1958

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TO DE LAVAL STEAM TURBINE COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 25. BY THE REFERRED TO INVITATION BIDS WERE REQUESTED. TWO FIXED PRICE BIDS WERE RECEIVED. AS FOLLOWS: "IT IS THE INTERPRETATION OF THIS BIDDER THAT THE CLAUSE "RIGHTS IN DATA- UNLIMITED" REFERS ONLY TO THE REPRODUCTION OF INSTRUCTION BOOK MATERIAL FOR USAGE BY THE GOVERNMENT.'. WORKS OF ANY SIMILAR NATURE (WHETHER OR NOT COPYRIGHTED) WHICH ARE SPECIFIED TO BE DELIVERED UNDER THIS CONTRACT. YOU ADVISED THE PROCURING AGENCY THAT YOUR INTERPRETATION OF THE RIGHTS IN DATA-UNLIMITED PROVISION WAS INCORRECT AND YOU REQUESTED THAT THE THIRD PARAGRAPH OF YOUR LETTER OF MAY 14. YOUR ALLEGATION OF MISTAKE AND REQUEST FOR CORRECTION WAS SUBMITTED TO THE CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS FOR CONSIDERATION.

B-136543, AUG. 1, 1958

TO DE LAVAL STEAM TURBINE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 25, 1958, WITH ENCLOSURES, PROTESTING THE AWARD OF A CONTRACT TO WARREN PUMPS, INC., UNDER INVITATION NO. 600-1111-58-S, ISSUED BY THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C.

BY THE REFERRED TO INVITATION BIDS WERE REQUESTED--- TO BE OPENED MAY 1, 1958 (POSTPONED TO MAY 15, 1958/--- FOR FURNISHING OIL SERVICE PUMPS, ON- BOARD REPAIR PARTS, TECHNICAL MANUALS, PRELIMINARY DRAWINGS, FINAL DRAWINGS AND OTHER PARTS FOR THE EQUIPMENT. IN RESPONSE THERETO, TWO FIXED PRICE BIDS WERE RECEIVED--- YOURS IN THE AMOUNT OF $62,000 AND THAT OF WARREN PUMPS, INC., IN THE AMOUNT OF $73,187. IN A LETTER DATED MAY 14, 1958, WHICH TRANSMITTED YOUR BID, YOU STATED, IN PERTINENT PART, AS FOLLOWS:

"IT IS THE INTERPRETATION OF THIS BIDDER THAT THE CLAUSE "RIGHTS IN DATA- UNLIMITED" REFERS ONLY TO THE REPRODUCTION OF INSTRUCTION BOOK MATERIAL FOR USAGE BY THE GOVERNMENT.'

THE REFERRED TO RIGHTS IN DATA CLAUSE PROVIDES IN PERTINENT PART, AS FOLLOWS:

"RIGHTS IN DATA--- UNLIMITED: (A) THE TERM "SUBJECT DATA" AS USED HEREIN INCLUDES WRITINGS, SOUND RECORDINGS, PICTORIAL REPRODUCTIONS, DRAWINGS OR OTHER GRAPHICAL REPRESENTATIONS, AND WORKS OF ANY SIMILAR NATURE (WHETHER OR NOT COPYRIGHTED) WHICH ARE SPECIFIED TO BE DELIVERED UNDER THIS CONTRACT. THE TERM DOES NOT INCLUDE FINANCIAL REPORTS, COST ANALYSES AND OTHER INFORMATION INCIDENTAL TO CONTRACT ADMINISTRATION.'

FOLLOWING THE OPENING OF BIDS, AND IN A LETTER DATED MAY 23, 1958, YOU ADVISED THE PROCURING AGENCY THAT YOUR INTERPRETATION OF THE RIGHTS IN DATA-UNLIMITED PROVISION WAS INCORRECT AND YOU REQUESTED THAT THE THIRD PARAGRAPH OF YOUR LETTER OF MAY 14, 1958, QUOTED ABOVE, BE ELIMINATED IN ITS ENTIRETY.

PURSUANT TO EXISTING PROCUREMENT PROCEDURES, YOUR ALLEGATION OF MISTAKE AND REQUEST FOR CORRECTION WAS SUBMITTED TO THE CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS FOR CONSIDERATION. THAT OFFICIAL, IN A LETTER DATED JUNE 12, 1958, TO THE CHIEF OF THE BUREAU OF SHIPS STATED THAT---

"1. IT IS THE VIEW OF THE BUREAU OF SUPPLIES AND ACCOUNTS THAT DE LAVAL STEAM TURBINE COMPANY'S BID IS NONRESPONSIVE AND MUST BE REJECTED IN ACCORDANCE WITH ASPR 2-403. THE BIDDER'S REQUEST, MADE AFTER THE OPENING, TO CHANGE THE BID CANNOT BE CONSIDERED.

"2. THE BIDDER'S INTERPRETATION OF THE "RIGHTS IN DATA--- UNLIMITED" CLAUSE, AS EXPRESSED IN ITS LETTER ATTACHED TO THE BID, CONSTITUTES AN EXCEPTION TO A PROVISION OF THE INVITATION.

"3. THE BIDDER'S EXCEPTION TO THE "RIGHTS IN DATA--- UNLIMITED" CLAUSE CONSTITUTES A SUBSTANTIVE MODIFICATION OF THE TERMS AND CONDITIONS OF THE INVITATION IN THAT THE BIDDER'S LIABILITY WOULD BE LIMITED TO THE MANUALS, THEREBY RENDERING THE BID NON-RESPONSIVE.

"4. TO ALLOW THE BIDDER TO CORRECT OR MODIFY HIS INTENDED BID WOULD BE PREJUDICIAL TO BOTH THE BIDDING SYSTEM AND THE OTHER BIDDER.'

WE AGREE WITH THE POSITION TAKEN BY THE DEPARTMENT OF THE NAVY THAT THE STATEMENT ATTACHED TO YOUR BID, BEING IN CONFLICT WITH THE RIGHTS IN DATA- UNLIMITED PROVISION, CONSTITUTED A MAJOR DEVIATION FROM THE TERMS OF THE INVITATION WHICH COULD NOT BE WAIVED WITHOUT PREJUDICE TO THE OTHER BIDDER. THE DEVIATION WAS SO MATERIAL AS TO AFFECT THE PRICE SINCE IT IS ENTIRELY CONCEIVABLE THAT THE OTHER BIDDER MIGHT HAVE SUBMITTED A LOWER BID HAD IT BEEN PERMITTED TO INCLUDE IN ITS BID A PROVISION LIMITING THE GOVERNMENT TO THE USE OF ITS MANUALS ONLY. IN ADDITION, THE DEVIATION HAD THE EFFECT OF PREVENTING THE GOVERNMENT FROM SECURING CERTAIN SPECIFIC RIGHTS CONTEMPLATED BY THE INVITATION.

WHILE CONTRACTING OFFICERS NECESSARILY ARE VESTED WITH A CERTAIN AMOUNT OF DISCRETION IN SUCH MATTERS, IT HAS BEEN CONSISTENTLY HELD THAT DEFICIENCIES OR DEVIATIONS MAY BE WAIVED ONLY IF THEY DO NOT GO TO THE SUBSTANCE OF THE BID OR WORK AN INJUSTICE TO OTHER BIDDERS. 30 COMP. GEN. 179. FURTHERMORE, IT IS A RECOGNIZED RULE THAT A CONTRACT AWARDED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. IN THE PRESENT CASE THE CONTRACTING AGENCY REJECTED YOUR BID AS NOT BEING RESPONSIVE TO THE INVITATION. THE EXPLANATION FOR SUCH ADMINISTRATIVE ACTION APPEARING TO BE REASONABLE, OUR OFFICE WOULD NOT BE JUSTIFIED IN HOLDING THAT THE AWARD TO WARREN PUMPS, INC., WAS ILLEGAL.