B-142210, MAY 2, 1960

B-142210: May 2, 1960

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INC.: REFERENCE IS MADE TO YOUR LETTER OF MARCH 4. THE SECOND LOW BID WAS SUBMITTED BY PACIFIC COAST ENGINEERING COMPANY IN THE AMOUNTS OF $115. THE MANUFACTURER WILL HOLD FIRM THE PRICES QUOTED HEREIN. CANCELLATION WILL BE ACCEPTED ONLY WITH THE UNDERSTANDING THAT THE PURCHASER WILL PAY US IN FULL FOR (A) ALL ENGINEERING WORK DONE (B) ALL MATERIALS CONTRACTED FOR WHICH CANNOT IN TURN BE CANCELLED OR OTHERWISE USED. "GUARANTEE: "THE MANUFACTURER GUARANTEES THAT EQUIPMENT FURNISHED PURSUANT TO THIS PROPOSAL WILL BE FREE FROM DEFECTS IN MATERIAL OR WORKMANSHIP AND WILL BE CAPABLE OF SAFELY AND PROPERLY HANDLING THE RATED LOADS AT THE SPEEDS STATED IN OUR CONDENSED SPECIFICATION SHEET WHEN INSTALLED ON SUITABLE RUNWAY OR FOUNDATION UNDER THE SUPERVISION OF ONE OF ITS EXPERIENCED FIELD ENGINEERS.

B-142210, MAY 2, 1960

TO COLBY STEEL AND MANUFACTURING, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 4, 1960, PROTESTING AGAINST THE REJECTION OF YOR BID UNDER INVITATION NO. 451-60-72 ISSUED BY THE U.S. ATOMIC ENERGY COMMISSION, HANFORD OPERATIONS OFFICE, RICHLAND, WASHINGTON.

THE INVITATION, DATED DECEMBER 17, 1959, AS AMENDED, REQUESTED BIDS- - TO BE OPENED FEBRUARY 4, 1960--- FOR FURNISHING A GANTRY CRANE. IN RESPONSE TO THE INVITATION, YOU SUBMITTED ON STANDARD GOVERNMENT FORM 32 THE LOW BID OF $109,800 F.O.B. ORIGIN ON ITEM 1 (GANTRY CRANE) AND $106,655 F.O.B. ORIGIN ON ITEM 2 (GANTRY CRANE WITH ALTERNATE HOIST BRAKES). THE SECOND LOW BID WAS SUBMITTED BY PACIFIC COAST ENGINEERING COMPANY IN THE AMOUNTS OF $115,600 AND $113,350 ON ITEMS 1 AND 2 RESPECTIVELY.

WITH YOUR BID AND MADE A PART THEREOF, YOU SUBMITTED ON YOUR LETTERHEAD "COLBY PROPOSAL NO. 1524" DATED JANUARY 15, 1960, COVERING 8 PAGES INCLUDING THE FOLLOWING PROVISIONS:

"TAXES:

"OUR PROPOSAL PRICES DO NOT INCLUDE ANY SPECIAL STATE OR FEDERAL TAXES, LEVIES OR DUTIES OF ANY NATURE WHATSOEVER, NOW OR TO BECOME PAYABLE, NO MATTER HOW DESIGNATED. ALL SUCH ITEMS SHALL BE FOR THE PURCHASER'S ACCOUNT.

"PROPOSAL PRICES:

"BASED UPON RECEIVING NOTIFICATION OF AWARD NOT LATER THAN 3 MARCH 1960, AND UPON THE PURCHASER ACCEPTING SHIPMENT OF THE CRANE AS SOON AS ITS MANUFACTURE CAN BE COMPLETED, THE MANUFACTURER WILL HOLD FIRM THE PRICES QUOTED HEREIN. "ACCEPTANCE:

"FOLLOWING ACCEPTANCE OF THIS PROPOSAL OR SUCH MODIFICATIONS THERETO AS MAY BE MUTUALLY AGREED UPON, CANCELLATION WILL BE ACCEPTED ONLY WITH THE UNDERSTANDING THAT THE PURCHASER WILL PAY US IN FULL FOR (A) ALL ENGINEERING WORK DONE (B) ALL MATERIALS CONTRACTED FOR WHICH CANNOT IN TURN BE CANCELLED OR OTHERWISE USED, (C) ALL LABOR WHICH HAS BEEN PERFORMED, AND (D) OVERHEAD AND A PROPORTIONATE PERCENTAGE OF PROFIT ON (A), (B) AND (C).

"GUARANTEE:

"THE MANUFACTURER GUARANTEES THAT EQUIPMENT FURNISHED PURSUANT TO THIS PROPOSAL WILL BE FREE FROM DEFECTS IN MATERIAL OR WORKMANSHIP AND WILL BE CAPABLE OF SAFELY AND PROPERLY HANDLING THE RATED LOADS AT THE SPEEDS STATED IN OUR CONDENSED SPECIFICATION SHEET WHEN INSTALLED ON SUITABLE RUNWAY OR FOUNDATION UNDER THE SUPERVISION OF ONE OF ITS EXPERIENCED FIELD ENGINEERS.

"SHIPMENT:

"SHIPMENT OF THE CRANE COVERED BY THIS PROPOSAL IS BASED UPON PROMISED DELIVERIES OF ELECTRICAL EQUIPMENT AND SUB-ASSEMBLIES BY THE MANUFACTURERS, AND IS SUBJECT TO STRIKES, DELAYS OF CARRIERS, AVAILABILITY OF MATERIALS OR OTHER CAUSES BEYOND OUR CONTROL. SHIPMENT IS ALSO SUBJECT TO ANY STATE OR FEDERAL EMERGENCY MEASURES WHICH MAY BE INSTITUTED AND TO ALLOCATION OF CRITICAL MATERIALS SHOULD SUCH BE INSTITUTED SUBSEQUENT TO THE DATE OF THIS PROPOSAL SO AS TO AFFECT THE SHIPMENTS QUOTED HEREIN.'TERMS OF PAYMENT:

"TERMS OF PAYMENT SUGGESTED IN CONNECTION WITH THIS PROPOSAL ARE:

90 PERCENT CASH UPON PRESENTATION OF INVOICES AND BILLS OF LADING; THE REMAINING

10 PERCENT WITHIN FORTY-FIVE (45) DAYS FROM DATE OF DELIVERY OF EQUIPMENT AT SITE OF ERECTION, BUT IN NO CASE LONGER THAN SEVENTY-FIVE (75) DAYS FROM DATE OF SHIPMENT FROM POINTS OF MANUFACTURE.'

PRINTED AT THE BOTTOM OF THE LETTERHEAD IS THE FOLLOWING:

"ALL CONTRACTS AND AGREEMENTS ARE CONTINGENT UPON STRIKES, DELAYS OF CARRIERS ABILITY TO OBTAIN MATERIALS PROMISED FROM MILLS AND OTHER MANUFACTURERS, AND OTHER CAUSES BEYOND OUR CONTROL, AND ARE SUBJECT TO ACCEPTANCE BY HEAD OFFICE.'

OBVIOUSLY, THE ABOVE PROVISIONS OF COLBY PROPOSAL NO. 1524 ARE INCONSISTENT WITH PROVISIONS OF THE INVITATION FOR BIDS AND WITH THE PROCUREMENT PRACTICES OF THE GOVERNMENT AND WOULD MAKE EVEN THE EXISTENCE OF A DEFINITE AND BINDING CONTRACT DEPENDENT ON THE GOVERNMENT'S ACCEPTANCE OF YOUR VARIOUS PROPOSALS DIFFERING FROM THE REQUIREMENTS OF THE INVITATION FOR BIDS AND MATERIALLY AFFECTING PERFORMANCE UNDER THE CONTRACT AND THE ULTIMATE COST. FOR EXAMPLE, PARAGRAPH 2 OF SUPPLEMENT "A" TO GENERAL PROVISIONS ATTACHED TO AND MADE A PART OF THE INVITATION PROVIDES GENERALLY THAT "THE CONTRACT PRICE INCLUDES ALL FEDERAL, STATE AND LOCAL TAXES AND DUTIES IN EFFECT AND APPLICABLE TO THIS CONTRACT," WHEREAS, THE ABOVE-QUOTED PROVISION OF YOUR PROPOSAL SPECIFIES THAT YOUR BID PRICES "DO NOT INCLUDE ANY SPECIAL STATE OR FEDERAL TAXES, LEVIES OR DUTIES OF ANY NATURE WHATSOEVER, NOW OR TO BECOME PAYABLE, NO MATTER HOW DESIGNATED.'

IN YOUR LETTER DATED MARCH 1, 1960, TO THE HANFORD OPERATIONS OFFICE, YOU STATED:

"WE REGRET VERY MUCH THAT THESE PAPERS INADVERTENTLY CONTAINED STANDARD COMMERCIAL CLAUSES REGARDING TAXES, PROPOSAL PRICES, ACCEPTANCE, EXPIRATION, GUARANTEE, SHIPMENT, DRAWINGS FOR APPROVAL, FINAL DRAWINGS, SPARE PARTS MANUALS AND INSPECTION. IF ANY OF THESE CLAUSES MAKES OUR BID NON-RESPONSIVE, WE CERTAINLY WOULD WAIVE ANY OR ALL OF THEM. IT WAS DEFINITELY OUR INTENT THAT THE FORMAL BID PAPERS AND SPECIFICATIONS AS FILLED OUT AND SIGNED BY US WOULD BE GOVERNING AND BINDING IF ACCEPTED.'

IN 37 COMP. GEN. 110 IT WAS HELD (QUOTING SYLLABUS):

"A LOW BID ACCOMPANIED BY THE BIDDER'S "STANDARD CONDITIONS OF SALES" PROVISIONS, WHICH ARE CONTRARY TO THE STANDARD GOVERNMENT CONTRACT FORM, AND QUALIFIED BY A WRITTEN STATEMENT THAT THE BIDDER ESTIMATES SHIPMENT OF THE MATERIAL CAN BE MADE IN ACCORDANCE WITH THE DESIRED TIME OF DELIVERY SHOULD BE REJECTED AS NON-RESPONSIVE REGARDLESS OF THE BIDDER'S INTENT TO COMPLY WITH THE ADVERTISED SPECIFICATIONS AND CONDITIONS.'

IN THAT DECISION IT WAS STATED:

"AS SET OUT IN THE DECISION, 36 COMP. GEN. 535, COPY ATTACHED, IT IS A CARDINAL RULE THAT A CONTRACT AWARDED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. WHERE ONE BIDDER RESERVES RIGHTS AND IMMUNITIES FROM RESPONSIBILITY NOT EXTENDED TO ALL BIDDERS BY THE ADVERTISED CONDITIONS AND SPECIFICATIONS, IT SEEMS MANIFEST THAT A CONTRACT AWARDED UPON THE BASIS OF THE CONDITIONAL BID WOULD NOT BE THE CONTRACT OFFERED TO ALL PROSPECTIVE BIDDERS. INFORMALITIES WHICH PROPERLY MAY BE WAIVED ARE THOSE THAT DO NOT GO TO THE SUBSTANCE OF THE BID SO AS TO BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS, BUT MATERIAL CONDITIONS IMPOSED BY THE BIDDER MAY NOT BE WAIVED AS AN INFORMALITY OR MINOR IRREGULARITY. SEE 20 COMP. GEN. 4. TO PERMIT PUBLIC OFFICERS TO ACCEPT BIDS NOT COMPLYING IN SUBSTANCE WITH THE ADVERTISED SPECIFICATIONS, OR TO PERMIT BIDDERS TO VARY THEIR PROPOSALS AFTER THE BIDS ARE OPENED, WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS. THE STRICT MAINTENANCE OF SUCH PROCEDURE, REQUIRED BY LAW, IS INFINITELY MORE IN THE PUBLIC INTEREST THAN OBTAINING AN APPARENTLY PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY A VIOLATION OF THE RULES. CF. UNITED STATES V. BROOKRIDGE, 111 F.2D 461, 464, AND THE OPINION OF THE SUPREME COURT OF ILLINOIS IN CITY OF CHICAGO V. MOHR, 74 N.E. 1056.' SEE, ALSO, 34 COMP. GEN. 82 AND 39 ID. 259.

IT SEEMS CLEAR THAT THE QUOTED LANGUAGE AND THE DECISIONS ABOVE REFERRED TO ARE APPLICABLE TO THE INSTANT MATTER. ACCORDINGLY, YOUR BID MUST BE HELD TO BE NOT RESPONSIVE AND NOT FOR CONSIDERATION IN MAKING THE AWARD.