B-143312, AUGUST 1, 1960, 40 COMP. GEN. 70

B-143312: Aug 1, 1960

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WHICH PERMITS THE SUBMISSION OF ALTERNATE BIDS BUT PROVIDES THAT THE BIDDERS MUST NOT IN ANY WAY RESTRICT THE GOVERNMENT'S ACCEPTANCE OF "AN INDIVIDUAL BID OR COMBINATION OF BIDS WHICH WILL BE IN THE GOVERNMENT'S INTEREST. ALTERNATE BIDS MAY BE COMBINATION BIDS ON VARIOUS GROUPS OF VESSELS SO LONG AS THERE IS NO RESTRICTION ON THE GOVERNMENT'S RIGHT TO ACCEPT ANY COMBINATION OF BIDS. THE REJECTION OF A BIDDER'S FIRST CHOICE FOR ALL FIVE VESSELS AND THE ACCEPTANCE OF THE BIDDER'S ALTERNATE SECOND CHOICE BID FOR FOUR VESSELS AFTER THE ACCEPTANCE OF ANOTHER BIDDER'S HIGHER INDIVIDUAL BID FOR ONE OF THE VESSELS WERE PROPER AWARDS CONSISTENT WITH THE TERMS OF THE INVITATION. 1960: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24.

B-143312, AUGUST 1, 1960, 40 COMP. GEN. 70

BIDS - EVALUATION - ALTERNATIVE BIDS - COMBINATIONS UNDER AN INVITATION FOR THE DISPOSAL OF FIVE VESSELS, WHICH PERMITS THE SUBMISSION OF ALTERNATE BIDS BUT PROVIDES THAT THE BIDDERS MUST NOT IN ANY WAY RESTRICT THE GOVERNMENT'S ACCEPTANCE OF "AN INDIVIDUAL BID OR COMBINATION OF BIDS WHICH WILL BE IN THE GOVERNMENT'S INTEREST," BIDDERS MAY SUBMIT MORE THAN ONE BID, AND ALTERNATE BIDS MAY BE COMBINATION BIDS ON VARIOUS GROUPS OF VESSELS SO LONG AS THERE IS NO RESTRICTION ON THE GOVERNMENT'S RIGHT TO ACCEPT ANY COMBINATION OF BIDS, WHICH RIGHT INCLUDES ACCEPTANCE OF A COMBINATION OF ANY ALTERNATE BID WITH ANY BID OR BIDS BY ANOTHER BIDDER OR BIDDERS; THEREFORE, THE REJECTION OF A BIDDER'S FIRST CHOICE FOR ALL FIVE VESSELS AND THE ACCEPTANCE OF THE BIDDER'S ALTERNATE SECOND CHOICE BID FOR FOUR VESSELS AFTER THE ACCEPTANCE OF ANOTHER BIDDER'S HIGHER INDIVIDUAL BID FOR ONE OF THE VESSELS WERE PROPER AWARDS CONSISTENT WITH THE TERMS OF THE INVITATION.

TO WACHTEL, WIENER AND ROSS, AUGUST 1, 1960:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24, AND LETTER OF JUNE 28, 1960, ON BEHALF OF ATLAS IRON AND METAL CORPORATION, PROTESTING AN AWARD TO SHIPS, INC., OF LSMR-523 UNDER INVITATION FOR BIDS NO. 325-60- 131.

ON MAY 25, 1960, NEW YORK NAVAL SHIPYARD ISSUED INVITATION FOR BIDS NO. 325-60-131, COVERING THE DISPOSAL OF 5 VESSELS, LANDING SHIPS, MEDIUM, ROCKET (LSMR-411), (LSMR-511), (LSMR-514), (LSMR-523) AND (LSMR 529). PARAGRAPH 3 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION PROVIDES THAT THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS, TO WAIVE ANY TECHNICAL DEFECTS IN THE BID, AND, UNLESS OTHERWISE SPECIFIED BY THE GOVERNMENT OR BY THE BIDDER, TO ACCEPT ANY ONE ITEM OR GROUP OF ITEMS IN THE BID, AS MAY BE IN THE BEST INTEREST OF THE GOVERNMENT.

SIX BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION COVERING ALL OR SOME OF THE VESSELS. SHIPS, INC., OFFERED TO PURCHASE LSMR-411 FOR $31,666.66 AND LSMR-523 FOR $36,666.66. THE BID WAS UNQUALIFIED AND DID NOT INDICATE A FIRST CHOICE OR PREFERENCE FOR EITHER VESSEL.

ATLAS IRON AND METAL CORPORATION SUBMITTED A BID AS FOLLOWS:

ST CHOICE FOR ITEMS NOS. 1, 2, 3, 4, AND 5, TOTAL OF 5 VESSELS, ALL OR NONE, LUMP SUM OF $163,585.85. IT (SIC) NOT SUCCESSFUL, THEN OUR 2D CHOICE IS AS FOLLOWS:

2D CHOICE FOR ANY 4 VESSELS, ALL OR NONE, LUMP SUM OF $134,868.89.

3D CHOICE FOR ANY 3 VESSELS, ALL OR NONE, LUMP SUM OF $93,717.85.

4TH CHOICE FOR ANY 2 VESSELS, ALL OR NONE, LUMP SUM OF $59,454.89.

5TH CHOICE INDIVIDUAL ITEM PRICES AS FOLLOWS:

ITEM NO. 1, $33,109.89

ITEM NO. 2, $33,109.89

ITEM NO. 3, $33,109.89

ITEM NO. 4, $34,109.89

ITEM NO. 5, $32,109.89

ONE OTHER BID WAS SUBMITTED IN THE EXACT SAME MANNER AS ATLAS' BID.

THE DEPARTMENT OF THE NAVY REPORTS THAT IT HAS PERMITTED A COMBINATION OF BIDS WHEN SELLING ITS VESSELS BECAUSE EXPERIENCE HAS INDICATED THAT A HIGHER NET RETURN TO THE UNITED STATES CAN BE EXPECTED, AND IN AN EFFORT TO PRODUCE THE GREATEST MONETARY RETURN AND TO GIVE THE GOVERNMENT SOME FLEXIBILITY IN THE CONSIDERATION AND EVALUATION OF COMBINATION BIDS, THE FOLLOWING LANGUAGE WAS INSERTED IN THE INSTANT INVITATION:

NOTE--- ALTERNATE BIDS WILL BE CONSIDERED, PROVIDED THAT THE BIDDER DOES NOT ATTEMPT TO RESTRICT IN ANY WAY THE GOVERNMENT'S ACCEPTANCE OF ANY INDIVIDUAL BID OR COMBINATION OF BIDS WHICH WILL BE IN THE GOVERNMENT'S INTEREST. ANY SUCH RESTRICTION BY THE BIDDER WILL RESULT IN A REJECTION OF THE BID.

IN EVALUATING THE BIDS RECEIVED, IT WAS CLEAR THAT THE ACCEPTANCE OF THE BID OF SHIPS, INC., ON LSMR-523 FOR $36,666.66, AND THE SECOND CHOICE BID OF ATLAS FOR $134,868.89 WOULD RESULT IN THE HIGHEST RETURN TO THE UNITED STATES. SINCE ATLAS LISTED FIVE CHOICES, IT WAS CONSIDERED TO BE OBVIOUS THAT ATLAS ENVISIONED THE POSSIBILITY THAT ITS FIRST CHOICE MIGHT NOT BE SUCCESSFUL AND, THEREFORE, AWARD WAS MADE ON THE HIGH INDIVIDUAL BID OF SHIP, INC., ON LSMR-523 (WHICH AUTOMATICALLY ELIMINATED ATLAS' FIRST CHOICE), AND ON ATLAS' SECOND CHOICE FOR THE REMAINING FOUR VESSELS.

YOU PROTEST THE ACTION TAKEN BY THE DEPARTMENT OF THE NAVY ON THE BASIS THAT ATLAS SUBMITTED A FIRST CHOICE FOR ALL FIVE VESSELS AND THAT BEFORE THE NAVY COULD DISREGARD THAT CHOICE, IT WAS REQUIRED TO DETERMINE THAT INDIVIDUAL OR COMBINATION BIDS OF OTHER BIDDERS ON ALL FIVE VESSELS WAS HIGHER THAN THE ATLAS FIRST CHOICE BID. IT IS URGED THAT THE LANGUAGE OF THE BID DOES NOT AUTHORIZE THE NAVY TO DETERMINE THE HIGHEST RETURN TO THE GOVERNMENT BY USING THE SECOND CHOICE COMBINATION OF ATLAS IN CONJUNCTION WITH THE OFFER OF ANOTHER BIDDER TO MAKE THE FIRST CHOICE OF ATLAS UNSUCCESSFUL. IT IS ALLEGED THAT TO PERMIT THE USE OF SUCH METHOD OF EVALUATION IS TO HOLD THAT A BIDDER IN EFFECT IS BIDDING AGAINST HIMSELF. IT IS ALSO CONTENDED THAT THE ACTION TAKEN IN THE INSTANT CASE IS INCONSISTENT WITH THE ACTION TAKEN UNDER INVITATION FOR BIDS NO. B-28-60- 131, WHICH WAS THE SUBJECT OF OUR DECISION OF DECEMBER 3, 1959, B-140053.

IN THE DECISION OF DECEMBER 3, 1959, WE SUSTAINED THE AWARD MADE BY THE DEPARTMENT OF THE NAVY UNDER THE INVITATION REFERRED TO ABOVE ON THE BASIS THAT THE BIDDER RESTRICTED THE USE OF ITS SECOND CHOICE BY PROVIDING IN THE BID THAT THE SECOND CHOICE COULD BE ACCEPTED ONLY "IF WE ARE NOT THE HIGHEST BIDDER UNDER OUR FIRST CHOICE. * * *" IT MAY BE ARGUED THAT THE LANGUAGE USED IN ATLAS' BID IS EQUIVALENT TO THE QUALIFICATION CONTAINED IN THE BID INVOLVED IN THE DECISION OF DECEMBER 3, 1959, THAT IS, THAT IT PRECLUDES CONSIDERATION OF OTHER THAN ITS FIRST CHOICE BID UNLESS ITS FIRST CHOICE IS NOT HIGH ENOUGH TO BE SUCCESSFUL. THERE IS, HOWEVER, AN IMPORTANT DIFFERENCE BETWEEN THE TWO INVITATIONS INVOLVED, NAMELY, THE "1NOTE" QUOTED ABOVE.

THE "1NOTE" STATES THAT "ALTERNATE" BIDS WILL BE CONSIDERED. IT IS APPARENT THAT THIS WAS INTENDED TO PERMIT BIDDERS TO SUBMIT MORE THAN ONE BID, AND THAT SUCH ALTERNATE BIDS COULD BE ,COMBINATION" BIDS ON VARIOUS COMBINATIONS OF THE FIVE VESSELS. IT WAS PERMISSIBLE, THEREFORE, FOR ATLAS TO SUBMIT A BID ON EACH VESSEL SEPARATELY, AND OTHER BIDS ON TWO, THREE, FOUR, AND FIVE VESSELS, AS IT DID. HOWEVER, THE " NOTE" PLACES A CONDITION ON THE SUBMISSION OF MULTIPLE BIDS. SUCH BIDS MUST NOT IN ANY WAY RESTRICT THE GOVERNMENT'S ACCEPTANCE OF "ANY INDIVIDUAL BID OR COMBINATION OF BIDS WHICH WILL BE IN THE GOVERNMENT'S INTEREST.' UNDER THE TERMS OF THE "1NOTE," THEREFORE, THE GOVERNMENT MUST HAVE THE RIGHT TO ACCEPT ANY COMBINATION OF BIDS, WHICH INCLUDES A COMBINATION OF ANY ALTERNATE BID WITH ANY BID OR BIDS BY ANOTHER BIDDER OR BIDDERS.

IT IS ONLY REASONABLE TO ASSUME THAT ATLAS INTENDED TO SUBMIT A BID WHICH WOULD MEET THE CONDITIONS OF THE "1NOTE," SINCE IT WOULD HAVE BEEN A USELESS GESTURE ON ITS PART TO SUBMIT A BID WHICH COULD NOT BE CONSIDERED. WE BELIEVE THAT ITS BID MUST, THEREFORE, BE READ IN THE LIGHT OF THE CONDITIONS OF THE "1NOTE," AND GIVEN AN INTERPRETATION IF POSSIBLE WHICH WOULD NOT REQUIRE ITS REJECTION. THE INTERPRETATION OF ITS BID NOW URGED BY ATLAS WOULD PRECLUDE ACCEPTANCE BY THE GOVERNMENT OF A COMBINATION CONSISTING OF A BID BY ANOTHER BIDDER ON ONE VESSEL AND ATLAS' ALTERNATE BID ON FOUR VESSELS. IF THIS INTERPRETATION WERE TO BE ACCEPTED, THEN THE TERMS OF THE ,1NOTE" WOULD REQUIRE REJECTION OF ATLAS' BID.

WE ARE OF THE OPINION THAT THE NAVY'S DECISION TO CONSTRUE ATLAS' BID IN SUCH MANNER AS NOT TO REQUIRE ITS REJECTION WAS TO ATLAS' BENEFIT, AND WAS A REASONABLE RECONCILIATION OF THE TERMS OF THE BID WITH THE CONDITIONS OF THE "1NOTE.' IN THE CIRCUMSTANCES, WE DO NOT BELIEVE THE AWARDS AS MADE WERE IMPROPER.