B-143220, JUN. 30, 1960

B-143220, JUN. 30, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF JUNE 15, 1960, WITH ENCLOSURES, FROM THE CHIEF, CONTRACTS BRANCH, PROCUREMENT DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION WITH RESPECT TO A PROTEST BY WESTINGHOUSE ELECTRIC CORPORATION AGAINST THE REJECTION OF BIDS UNDER INVITATION ENG-31-001-60-71 AND THE READVERTISEMENT UNDER INVITATION ENG- 31-001-60-86.

A VOLTAGE REGULAR WAS NEEDED URGENTLY AT FORT BRAGG TO REPLACE ONE BURNED OUT DURING A STORM IN MARCH. THEREFORE, ON MARCH 25, 1960, INVITATION ENG -31-001-60-71 WAS ISSUED SOLICITING BIDS FOR DELIVERY OF A VOLTAGE REGULATOR NO LATER THAN 30 DAYS AFTER RECEIPT OF AWARD. UPON ORAL REPRESENTATIONS OF SEVERAL PROSPECTIVE BIDDERS THAT DELIVERY WAS IMPOSSIBLE WITHIN 30 DAYS AND THAT THEY WOULD REQUIRE 60 TO 90 DAYS, OR MORE, THE CONTRACTING OFFICER ISSUED THE FOLLOWING AMENDMENT TO THE INVITATIONS:

"DUE TO THE URGENT NEED OF THE REGULATOR COVERED BY THE BASIC INVITATION FOR BIDS THE DELIVERY CLAUSE APPEARING ON PAGE 2 OF THE BASIC INVITATION IS AMENDED TO READ AS FOLLOWS:

" "TIME OF DELIVERY IS A MATERIAL REQUIREMENT FOR THE PROCUREMENT OF THE ITEM COVERED HEREIN, AND DELIVERY WILL BE REQUIRED TO BE MADE BY THE CONTRACTOR WITHIN 1ST PRIORITY, 30 DAYS; 2ND PRIORITY, 60 DAYS; 3RD PRIORITY, 90 DAYS; 4TH PRIORITY, 120 DAYS, AFTER RECEIPT OF AWARD. BIDS OFFERING DELIVERY WITHIN THE ACCEPTABLE TIME LIMITS STATED WILL BE CONSIDERED RESPONSIVE AND WILL BE EVALUATED EQUALLY, SUBJECT TO THE CONDITIONS SPECIFIED BELOW. BIDS OFFERING DELIVERY BEYOND THE TIME LIMITS STATED WILL BE REJECTED AS NONRESPONSIVE.'

"BASIS OF AWARD: CONSISTENT WITH REASONABLE COST, AS DETERMINED BY THE CONTRACTING OFFICER, THE RIGHT IS RESERVED TO MAKE AWARD ON EACH ITEM ON THE BASIS OF THE LOWEST RESPONSIVE BID UNDER THE 1ST PRIORITY OF DELIVERY. IF NO BID IS RECEIVED UNDER THE 1ST PRIORITY OF DELIVERY, BIDS UNDER THE 2ND, 3RD AND 4TH PRIORITIES OF DELIVERY WILL BE SO CONSIDERED IN TURN FOR AWARD.'

THE RESPONSIVE BIDS RECEIVED UNDER THE AMENDED INVITATION WERE AS FOLLOWS:

TABLE

PRIORITY

1ST 2ND 3RD4TH CAROLINA TRANSFORMER CO.

$65,280 GENERAL ELECTRIC SUPPLY CO. $62,016 GRAYBAR ELECTRIC CO. $62,016 WESTINGHOUSE ELECTRIC CO.

$52,220

THE DIFFERENCES IN THE AMOUNT OF BIDS RECEIVED UNDER THE 2ND AND 3RD PRIORITIES AS COMPARED WITH THE AMOUNT OF THE BID UNDER THE 4TH PRIORITY WERE CONSIDERED SO UNREASONABLE BY THE CONTRACTING OFFICER AS TO CAUSE HIM TO ANNOUNCE PUBLICLY THAT HE WOULD RECOMMEND AWARD UNDER THE 4TH PRIORITY, BUT THAT THE POST ENGINEER WOULD BE PERMITTED ON THE BASIS OF URGENCY OF THE NEED FOR THE VOLTAGE REGULATOR TO DETERMINE THE PRIORITY UNDER WHICH AWARD WOULD BE MADE. THEREAFTER, THE POST ENGINEER ADVISED THE CONTRACTING OFFICER THAT THE ONLY BIDDER UNDER THE 2ND PRIORITY HAD ADVISED THAT IF IT DID NOT GET THE AWARD IT WOULD LODGE A PROTEST BECAUSE OF THE WORDING IN THE LAST PARAGRAPH IN THE INVITATION AMENDMENT QUOTED ABOVE. AS A PRECAUTION, THE MATTER WAS REFERRED TO THE STAFF JUDGE ADVOCATE FOR AN OPINION AS TO THE LEGALITY OF THE ACCEPTANCE OF THE ONLY BID UNDER THE 4TH PRIORITY. THE STAFF JUDGE ADVOCATE DETERMINED THAT THE INVITATION WAS AMBIGUOUS AS TO THE METHOD OF EVALUATION AND RECOMMENDED REJECTION OF ALL BIDS AND READVERTISEMENT ON A CLEAR BASIS. ACCORDINGLY, ON APRIL 21, 1960, THE CONTRACTING OFFICER ISSUED INVITATION ENG-31-001-60 -86 OMITTING THE SCHEDULE OF DELIVERY PRIORITIES AND PROVIDING FOR BID PROPOSALS FOR DELIVERY NO LATER THAN 120 DAYS AFTER RECEIPT OF AWARD.

THE SIX BIDS RECEIVED ON THE READVERTISEMENT RANGED FROM A LOW OF $52,220, OFFERED BY CAROLINA TRANSFORMER CO., TO A HIGH OF $70,499.97. THE WESTINGHOUSE BID UNDER THE NEW INVITATION WAS $65,280. AWARD WAS MADE TO THE LOW BIDDER.

THE WESTINGHOUSE PROTEST IS GROUNDED ON THE BASIS THAT UNDER THE ORIGINAL INVITATION THE GOVERNMENT COULD HAVE ELECTED TO MAKE THE AWARD ON THE BASIS OF DELIVERY OR OF PRICE, AND THAT INASMUCH AS THE ADVANTAGE IN PRICE OUTWEIGHED THE ADVANTAGE TO BE GAINED BY EARLIER DELIVERY, THE CONTRACTING OFFICER SHOULD HAVE MADE THE AWARD TO IT ON THE FORMER BASIS. IT IS CONTENDED FURTHER THAT THE REJECTION OF ALL BIDS AND READVERTISEMENT ON THE BASIS UPON WHICH ITS ORIGINAL BID WAS SUBMITTED VIOLATED THE PRINCIPLES OF COMPETITIVE BIDDING.

WE CONCUR IN THE OPINION OF THE STAFF JUDGE ADVOCATE. THE METHOD OF EVALUATION SPELLED OUT IN THE INVITATION AMENDMENT IS AT LEAST CONFUSING. AT THE OUTSET IT STRESSES THE "URGENT NEED" FOR THE VOLTAGE REGULATORS AND THE MATERIALITY OF TIME OF DELIVERY BY SETTING UP FOUR PRIORITY GROUPS BASED UPON DELIVERY. HOWEVER, AT THAT JUNCTURE, IT ABANDONS THE STRESS OF TIME IN FAVOR OF EQUAL CONSIDERATION OF ALL BIDS RESPONSIVE TO THE TIME PRIORITIES ON THE BASIS OF PRICE. THEN, IN THE SECOND PARAGRAPH, THE EMPHASIS ON EARLY DELIVERY IS RENEWED. WHILE THE AMENDMENT APPARENTLY WAS DRAFTED TO RESERVE TO THE CONTRACTING OFFICER THE RIGHT TO MAKE AWARD EITHER ON THE BASIS OF THE LOWEST RESPONSIVE BID RECEIVED OR ON THE LOWEST BID FOR THE EARLIEST DELIVERY, THE MANNER IN WHICH IT WAS WORDED COULD EASILY HAVE CONFUSED BIDDERS BECAUSE OF ITS SHIFTING EMPHASIS. SINCE NO BIDDER SUBMITTED A RESPONSIVE BID UNDER MORE THAN ONE PRIORITY, IT SEEMS EVIDENT THAT THE BIDDERS BELIEVED THAT THEY SHOULD AIM ONLY FOR THE EARLIEST DELIVERY DATE POSSIBLE. SUCH A VIEW COULD HAVE BEEN CREATED BY THE LANGUAGE IN THE SECOND PARAGRAPH WHICH SEEMS TO IMPLY THAT THE CONTRACTING OFFICER WOULD ACCEPT THE LOWEST RESPONSIVE BID IN THE EARLIEST PRIORITY GROUP OR REJECT IT AS INCONSISTENT WITH REASONABLE COST. IT IS NOT CLEAR THAT HE COULD CONSIDER THE NEXT DELIVERY GROUP ONCE THE RESPONSIVE BIDS RECEIVED IN THE PRIOR GROUP HAD BEEN DETERMINED TO BE UNACCEPTABLE.

INASMUCH AS THE BASIS OF AWARD WAS CONFUSING IN THAT IT WAS NOT CLEAR WHETHER THE TIME OF DELIVERY OR THE COST OF THE VOLTAGE REGULATOR WAS IMPORTANT TO THE EVALUATION AND THE CONTRACTING OFFICER ACTED ON ADVICE OF COUNSEL IN REJECTING ALL BIDS AND READVERTISING ON A CLEAR BASIS THAT PERMITTED ALL BIDDERS TO COMPETE ON A SINGLE COMMON GROUND WITHIN THE NEEDS OF THE GOVERNMENT, IT IS CONSIDERED THAT THE CONTRACTING OFFICER ACTED UPON A BONA FIDE DETERMINATION THAT THE PUBLIC INTEREST WOULD BEST BE SERVED.

IN THE CIRCUMSTANCES, WE DO NOT THINK THAT THERE WAS ANY IMPROPRIETY IN THE REJECTION OF BIDS AND READVERTISEMENT.