B-143295, SEP. 9, 1960

B-143295: Sep 9, 1960

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TO THE LIQUIDOMETER CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 23 AND YOUR LETTER OF JUNE 29. TC 23-204-60-162 WAS ISSUED APRIL 5. AS FOLLOWS: "WE ARE ENCLOSING HEREWITH OUR BID ON THE SUBJECT INVITATION. "WE WISH TO ADVISE THAT THE MATERIAL WILL BE AVAILABLE FOR SHIPMENT IN ACCORDANCE WITH THE DELIVERY REQUIREMENTS OF ARTICLE 6. THERE IS. WE HAVE BEEN UNABLE TO OBTAIN DRAWINGS OF THESE CONNECTORS SO THAT THEY COULD BE FABRICATED IN OUR SHOPS AND THE BEST DELIVERY COMMITMENT WE HAVE BEEN ABLE TO OBTAIN TO DATE FROM THESE TWO COMPANIES IS FOR THEM TO COMMENCE DELIVERY 120 DAYS AFTER RECEIPT OF OUR PURCHASE ORDER. THE OFFICE OF THE COMMAND JUDGE ADVOCATE STATED THAT YOUR BID WAS CONSIDERED NONRESPONSIVE BECAUSE OF THE UNCERTAINTY RESULTING FROM YOUR LETTER OF MAY 13 MADE A PART OF THE BID.

B-143295, SEP. 9, 1960

TO THE LIQUIDOMETER CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 23 AND YOUR LETTER OF JUNE 29, 1960, PROTESTING AGAINST THE AWARD TO ANOTHER BIDDER AFTER READVERTISEMENT UNDER INVITATION FOR BIDS NO. TC 23-204-60-253 ISSUED BY THE ARMY TRANSPORTATION MATERIEL COMMAND, ST. LOUIS, MISSOURI.

THE ORIGINAL INVITATION NO. TC 23-204-60-162 WAS ISSUED APRIL 5, 1960, REQUESTING BIDS--- TO BE OPENED MAY 23, 1960--- FOR FURNISHING 102 "TESTER, CAPACITOR TYPE FUEL SYSTEMS" AND SPARE PARTS THEREFOR. ARTICLE 6 REQUIRED DELIVERY WITHIN 150 CALENDAR DAYS AFTER RECEIPT OF CONTRACT. RESPONSE TO THE INVITATION, YOU SUBMITTED A BID OF $500 EACH--- A TOTAL OF $51,000--- WITH A LETTER DATED MAY 13, 1960, AS FOLLOWS:

"WE ARE ENCLOSING HEREWITH OUR BID ON THE SUBJECT INVITATION.

"WE WISH TO ADVISE THAT THE MATERIAL WILL BE AVAILABLE FOR SHIPMENT IN ACCORDANCE WITH THE DELIVERY REQUIREMENTS OF ARTICLE 6. THERE IS, HOWEVER, THE POSSIBILITY THAT A DELAY MAY BE INCURRED AS A RESULT OF YOUR REQUIREMENTS FOR THE EXTRA CABLE ASSEMBLIES CALLED OUT ON PAGE 2 OF THE INVITATION, WHICH INCLUDE CONNECTORS MANUFACTURED BY AVIEN AND MINNEAPOLIS -HONEYWELL. WE HAVE BEEN UNABLE TO OBTAIN DRAWINGS OF THESE CONNECTORS SO THAT THEY COULD BE FABRICATED IN OUR SHOPS AND THE BEST DELIVERY COMMITMENT WE HAVE BEEN ABLE TO OBTAIN TO DATE FROM THESE TWO COMPANIES IS FOR THEM TO COMMENCE DELIVERY 120 DAYS AFTER RECEIPT OF OUR PURCHASE ORDER. THIS, OF COURSE, COINCIDES WITH YOUR DELIVERY REQUIREMENT.

"IN ORDER TO MEET YOUR DELIVERY REQUIREMENTS, IT MAY BE NECESSARY FOR US TO CALL UPON YOUR OFFICE TO ASSIST US IN EXPEDITING THESE CONNECTORS FROM THESE MANUFACTURERS.'

ARTICLE 6 OF THE INVITATION (DELIVERY SCHEDULE) YOU HAD TYPED:

"SEE OUR LETTER MAY 13 FORMING PART OF OUR QUOTATION ON THIS INQUIRY.'

TWO OTHER BIDS RECEIVED QUOTED UNIT PRICES OF $747.80 AND $850 AND THE OTHER BID RECEIVED QUOTED UNIT PRICES RANGING FROM $1,365.13 TO $1,374.70 DEPENDING ON DESTINATION.

IN COMMENT NO. 2 DATED MAY 31, 1960, THE OFFICE OF THE COMMAND JUDGE ADVOCATE STATED THAT YOUR BID WAS CONSIDERED NONRESPONSIVE BECAUSE OF THE UNCERTAINTY RESULTING FROM YOUR LETTER OF MAY 13 MADE A PART OF THE BID. BY A DETERMINATION DATED JUNE 2, 1960, THE CONTRACTING OFFICE REJECTED ALL BIDS "AS IT DEVELOPED AFTER BID OPENING THAT THE TIME ALLOWED FOR DELIVERY WAS NOT REALISTIC, AS REQUIRED BY APP 2-201E.' IT WAS STATED THAT SUPPLIERS OF CONNECTOR PLUGS FOR USE IN THE TESTERS HAD INDICATED THAT DELIVERY OF THE PLUGS WOULD COMMENCE 120 DAYS AFTER RECEIPT OF AN ORDER AND THAT, THEREFORE, THE REQUIREMENT IN THE INVITATION THAT THE TESTERS BE DELIVERED WITHIN 150 DAYS AFTER RECEIPT OF CONTRACT WAS CONSIDERED UNREALISTIC.

ON JUNE 2, 1960, A NEW INVITATION NO. TC 23-204-60-253 WAS ISSUED, REQUESTING BIDS ON THE SAME NUMBER AND KIND OF TESTERS BUT REQUIRING DELIVERY WITHIN 210 DAYS AFTER RECEIPT OF CONTRACT INSTEAD OF WITHIN 150 DAYS. THREE BIDDERS, INCLUDING YOUR CORPORATION, SUBMITTED THE SAME BIDS AS UNDER THE ORIGINAL INVITATION BUT CONSOLIDATED AIRBORNE SYSTEMS, INC., SUBMITTED A UNIT BID OF $490 INSTEAD OF ITS PRIOR BID OF $747.80 AND WAS GIVEN THE AWARD.

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 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 A 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 DECISIONS ABOVE REFERRED TO ARE APPLICABLE TO THE INSTANT MATTER AND THAT YOUR BID WAS PROPERLY REGARDED AS NONRESPONSIVE. HAVING REGARD FOR YOUR LETTER OF MAY 13, 1960, ACCOMPANYING AND MADE A PART OF YOUR BID, AWARD TO YOU WOULD NOT HAVE RESULTED IN A DEFINITE AND BINDING CONTRACT REQUIRING DELIVERY OF THE TESTERS WITHIN 150 CALENDAR DAYS AS SPECIFIED IN THE INVITATION. IN THE EVENT OF DELAY IN DELIVERY BEYOND 150 DAYS, YOU WOULD HAVE BEEN PROTECTED BY THE STATEMENTS IN YOUR LETTER MAKING TIMELY DELIVERY DEPENDENT UPON THE PROMPT FURNISHING OF CONNECTORS BY YOUR SUPPLIERS. SUCH CONDITIONS MATERIALLY AFFECT THE SUBSTANCE OF A BID AND, UNDER THE DECISIONS ABOVE REFERRED TO, CANNOT BE WAIVED AS INFORMALITIES OR WITHDRAWN AFTER THE BIDS ARE OPENED.

IT HAS BEEN OUR POLICY TO PROTECT AND MAINTAIN THE PRINCIPLES OF IMPARTIALITY UPON WHICH THE COMPETITIVE BIDDING SYSTEM DEPENDS. WE ARE COGNIZANT OF THE DISADVANTAGES ENCOUNTERED AS A RESULT OF THE REJECTION OF ALL BIDS AFTER PUBLIC OPENING. HOWEVER, WE HAVE AUTHORIZED AND/OR APPROVED THE CANCELLATION OF ALL BIDS AND THE READVERTISEMENT OF CERTAIN CONTEMPLATED PROCUREMENTS IF THE CIRCUMSTANCES WARRANT SUCH ACTION.

IN THE INSTANT MATTER, IT IS CONCLUDED THAT THE ISSUANCE OF A NEW INVITATION FOR BIDS WAS PROPER, SINCE THE DELIVERY PERIOD FIXED IN THE ORIGINAL INVITATION WAS DETERMINED TO BE TOO SHORT AND SINCE THE LOWEST RESPONSIVE BID WAS OBVIOUSLY EXCESSIVE. PARAGRAPH 8 (B) OF TERMS AND CONDITIONS OF THE INVITATION FOR BIDS SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL BIDS. MOREOVER, 10 U.S.C. 2305 (B) PROVIDES FOR THE REJECTION OF ALL BIDS WHEN SUCH ACTION IS DETERMINED TO BE IN THE GOVERNMENT'S INTEREST. IT HAS BEEN HELD CONSISTENTLY THAT AN INVITATION FOR BIDS CARRIES NO OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED AND ALL BIDS MAY BE REJECTED WHERE IT IS DETERMINED TO BE IN THE GOVERNMENT'S INTEREST TO DO SO. SEE 37 COMP. GEN. 760, 761, AND THE CASES THEREIN CITED. THE AUTHORITY TO REJECT ALL BIDS IS NOT ORDINARILY SUBJECT TO REVIEW BY THE COURTS OR OUR OFFICE. HARNEY V. DUNKEE, 237 P.2D 561; 31 A.L.R. 2D 469; CHAMPION CODED PAPER COMPANY V. JOINT COMMITTEE, 47 APP.D.C. 141. CF. 37 COMP. GEN. 12. A SIMILAR MATTER WAS THE SUBJECT OF OUR DECISION 36 COMP. GEN. 364 AND IT WAS STATED THEREIN THAT WHEN IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO PROCURE THE PARTICULAR SUPPLIES, A REJECTION OF ALL BIDS AND A READVERTISEMENT FOR NEW BIDS WAS CONSIDERED AS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. ALSO, SEE 17 COMP. GEN. 554.

IN VIEW OF THE FOREGOING, THERE IS FOUND NO PROPER BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE ADMINISTRATIVE OFFICE IN REJECTING ALL BIDS UNDER INVITATION NO. TC 23-204-60-162 AND MAKING AWARD TO THE LOWEST RESPONSIBLE BIDDER UNDER THE NEW INVITATION NO. TC 23-204-60-253.