B-143767, JAN. 24, 1961

B-143767: Jan 24, 1961

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TO CONTINENTAL ELECTRIC EQUIPMENT CO.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 16 AND LETTER DATED AUGUST 19. THE ORIGINAL INVITATION WHICH WAS ISSUED ON JULY 18. IT IS REPORTED THAT AT THE TIME OF THE ISSUANCE OF THE ORIGINAL INVITATION THE DEPARTMENT OF THE AIR FORCE WAS IN THE PROCESS OF CONDUCTING A MANUAL SURVEY TO ASCERTAIN THE EXACT NUMBER OF TEST SETS REQUIRED BY THE DEPARTMENT. INASMUCH AS THE SURVEY MIGHT ESTABLISH THAT A LESSER NUMBER OF TEST SETS WERE NEEDED THE DEPOT ISSUED AMENDMENT NO. 2 ON JULY 22. IT ALSO ADVISED BIDDERS AS FOLLOWS: "THE REQUIREMENTS OF THE INITIATING ACTIVITY ARE NOT KNOWN AT THIS TIME * YOU SUBMITTED A BID ON 100-125 UNITS. BIDS WERE ALSO RECEIVED FROM FOUR OTHER BIDDERS ALL CONTAINING QUOTATIONS ON THE INCREMENT QUANTITIES CALLED FOR IN THE AMENDED INVITATION.

B-143767, JAN. 24, 1961

TO CONTINENTAL ELECTRIC EQUIPMENT CO.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 16 AND LETTER DATED AUGUST 19, 1960, PROTESTING AGAINST THE AWARD OF A CONTRACT ON ANY OTHER BASIS THAN 170 UNITS UNDER INVITATION NO. 33-604-61-281, AS AMENDED, ISSUED BY THE DAYTON AIR FORCE DEPOT, GENTILE AIR FORCE STATION, DAYTON, OHIO.

THE ORIGINAL INVITATION WHICH WAS ISSUED ON JULY 18, 1960, REQUESTED BIDS FOR FURNISHING 170 TEST SETS, LOAD BANK, TYPE MC-3. IT IS REPORTED THAT AT THE TIME OF THE ISSUANCE OF THE ORIGINAL INVITATION THE DEPARTMENT OF THE AIR FORCE WAS IN THE PROCESS OF CONDUCTING A MANUAL SURVEY TO ASCERTAIN THE EXACT NUMBER OF TEST SETS REQUIRED BY THE DEPARTMENT. INASMUCH AS THE SURVEY MIGHT ESTABLISH THAT A LESSER NUMBER OF TEST SETS WERE NEEDED THE DEPOT ISSUED AMENDMENT NO. 2 ON JULY 22, 1960, REQUESTING PROSPECTIVE BIDDERS TO QUOTE, IN ADDITION TO THE FIXED QUANTITY OF 170 UNITS, PRICES FOR INCREMENT QUANTITIES OF 100-125 UNITS, 126-170 UNITS, AND 171-203 UNITS. THE AMENDMENT ALSO AUTHORIZED BIDDERS TO SUBMIT BIDS ON FURTHER BREAKDOWNS OF THE INCREMENTS LISTED. IT ALSO ADVISED BIDDERS AS FOLLOWS:

"THE REQUIREMENTS OF THE INITIATING ACTIVITY ARE NOT KNOWN AT THIS TIME *

YOU SUBMITTED A BID ON 100-125 UNITS, 126-169 UNITS, AND 171-203 UNITS ON AUGUST 4, 1960. YOUR BID ALSO CONTAINED A PRICE FOR EXACTLY 170 UNITS. ON JULY 29, 1960, UNITED MANUFACTURING COMPANY DIVISION, THE W. L. MAXSON CORPORATION, SUBMITTED A BID QUOTING PRICES FOR INCREMENTS OF 100-114 UNITS, 115-125 UNITS, 126-135 UNITS, 136-145 UNITS, 146-155 UNITS, 156-165 UNITS, 166-170 UNITS, 171-180 UNITS, 181 190 UNITS, AND 191-203 UNITS. BIDS WERE ALSO RECEIVED FROM FOUR OTHER BIDDERS ALL CONTAINING QUOTATIONS ON THE INCREMENT QUANTITIES CALLED FOR IN THE AMENDED INVITATION.

ON AUGUST 10, 1960, FIVE DAYS AFTER THE BID OPENING, THE MANUAL SURVEY WAS COMPLETED AND IT WAS DETERMINED THAT THERE WAS A REQUIREMENT FOR 166 UNITS TO BE PURCHASED UNDER THE SUBJECT INVITATION. SUBSEQUENTLY, AS THE RESULT OF AN INDEPENDENT INVESTIGATION CONDUCTED BY OUR OFFICE, THE DEPARTMENT OF THE AIR FORCE REVIEWED ITS REQUIREMENTS AND DETERMINED THAT 123 UNITS RATHER THAN 166 UNITS WERE ACTUALLY REQUIRED. IT IS ADMINISTRATIVELY REPORTED THAT AN AWARD FOR 123 UNITS IS CONTEMPLATED TO BE MADE TO THE LOWEST RESPONSIBLE BIDDER ON THAT QUANTITY.

IN YOUR LETTER YOU STATE THAT YOU HAD BEEN ADVISED THAT THE GOVERNMENT BUYER HAD A PURCHASE REQUEST FOR 170 UNITS AND THAT SUCH PURCHASE REQUEST REMAINED IN EFFECT AT THAT LEVEL UNTIL AT LEAST AUGUST 4, 1960, AMENDED, ISSUED BY THE DAYTON AIR FORCE DEPOT, GENTILE AIR FORCE STATION, THE DAY BEFORE THE DATE OF THE BID OPENING. YOU CONTEND THAT IF THIS INFORMATION IS CORRECT THE GOVERNMENT BUYER HAD NO LOGICAL JUSTIFICATION FOR ISSUING AMENDMENT NO. 2 TO THE INVITATION FOR BIDS INCORPORATING THE REQUIREMENT FOR BIDDERS TO QUOTE ON INCREMENT QUANTITIES. YOU STATE THAT WHEN YOU RECEIVED AMENDMENT NO. 2 YOU FOUND THAT DUE TO THE LIMITED TIME AVAILABLE IT WAS IMPOSSIBLE TO PROPERLY ESTIMATE PRICES ON OTHER QUANTITIES; THAT IN ORDER TO BE RESPONSIVE YOU DID, HOWEVER, QUOTE ON THE OTHER QUANTITIES, BUT WITH CONSIDERABLE LESS ACCURATE METHODS. YOU ALSO STATE THAT YOU FEEL CERTAIN THAT ALL OTHER BIDDERS WERE COMPELLED TO PROCEED IN LIKE MANNER AND THAT THE ACTION ON THE PART OF THE PROCUREMENT OFFICIALS RESULTED IN AN UNBALANCED BIDDING SITUATION. YOU CONTEND THAT IN VIEW OF THE CIRCUMSTANCES IT WOULD APPEAR PROPER ONLY FOR THE BIDS TO BE EVALUATED ON THE BASIS OF THE FIXED QUANTITY OF 170 UNITS SPECIFIED IN THE ORIGINAL INVITATION AND A CONTRACT AWARDED ACCORDINGLY TO YOU AS THE LOWEST BIDDER THEREON.

WHILE THE INVITATION ORIGINALLY CALLED FOR BIDS ON 170 UNITS, THE AMENDED INVITATION WAS ISSUED ONLY FOUR DAYS AFTER THE ORIGINAL INVITATION REQUESTING PRICES FOR INCREMENT QUANTITIES THEREBY PLACING ALL BIDDERS ON NOTICE THAT AN AWARD MIGHT BE MADE ON A QUANTITY OTHER THAN 170 UNITS. THAT CONNECTION, PROSPECTIVE BIDDERS WERE SPECIFICALLY ADVISED BY AMENDMENT NO. 2 THAT "THE REQUIREMENTS OF THE INITIATING ACTIVITY ARE NOT KNOWN AT THIS TIME * * *.' ALSO, AMENDMENT NO. 2 ADVISED BIDDERS THAT:

"LOW PRICE FOR AN ITEM WILL BE DETERMINED BASED UPON THE NUMERICAL REQUIREMENTS AT THE TIME OF THE AWARD MULTIPLIED BY THE UNIT PRICE BID ON THE INCREMENT IN WHICH THE REQUIRED QUANTITY EARS.'

PARAGRAPH 8 (A) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS PROVIDES THAT "THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.' THERE CAN BE NO DOUBT THAT IT WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT TO EVALUATE THE BIDS ON THE BASIS OF THE GOVERNMENT'S ACTUAL REQUIREMENTS, WHICH WERE ESTABLISHED BY A SURVEY AS BEING 123 UNITS, RATHER THAN THE NUMBER OF UNITS YOU SUGGEST, THAT IS, 170 UNITS.

WE CANNOT AGREE WITH YOUR CONTENTION THAT THERE WAS NO JUSTIFICATION FOR ISSUING AMENDMENT NO. 2. IT IS THE DUTY OF THE CONTRACTING OFFICER TO AMEND AN INVITATION FOR BIDS IN AN APPROPRIATE MANNER WHEN IT COMES TO HIS ATTENTION THAT THE REQUIREMENTS OF THE GOVERNMENT MAY NOT BE AS ORIGINALLY STATED. CERTAINLY THERE CAN BE NO JUSTIFICATION FOR A PURCHASE OF 170 UNITS WHEN THE AIR FORCE REQUIREMENT IS 123 UNITS. YOUR CONTENTION THAT AN UNBALANCED BIDDING SITUATION RESULTED BECAUSE SUFFICIENT TIME WAS NOT ALLOWED FOR PREPARING ACCURATE QUOTATIONS ON THE VARIOUS QUANTITIES CALLED FOR BY AMENDMENT NO. 2 IS NOT SUPPORTED BY THE RECORD. ALL BIDDERS WERE OPERATING WITH THE SAME INFORMATION AND UNDER THE SAME CONDITIONS. ALL BIDDERS SUBMITTED INCREMENT BIDS WITHIN THE REQUIRED TIME. FURTHERMORE, IT IS REPORTED THAT THE ADMINISTRATIVE OFFICE HAS NOT RECEIVED ANY ADVERSE COMMENTS FROM ANY OF THE OTHER FIVE BIDDERS.

IN YOUR LETTER OF SEPTEMBER 7, 1960, TO THE SPECIAL COUNSEL OF THE SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS, ARMED SERVICES, HOUSE OF REPRESENTATIVES, YOU CONTEND THAT FREIGHT COST DIFFERENTIALS SHOULD BE USED AS A FACTOR IN THE EVALUATION OF BIDS IN THE PRESENT CASE. IN THAT CONNECTION, IT IS REPORTED THAT THE DESTINATIONS OF THE UNITS BEING PROCURED WERE UNKNOWN AT THE TIME THE INVITATION WAS ISSUED AND THAT SUCH DESTINATIONS STILL REMAIN UNKNOWN. THE DESTINATION OF EACH PIECE OF EQUIPMENT IS DETERMINED SHORTLY BEFORE THE EQUIPMENT IS READY FOR SHIPMENT AND THE CONTRACTOR REQUESTS SHIPPING INSTRUCTIONS. THIS IS DUE IN PART TO THE FACT THAT THE REQUIREMENTS OF THE VARIOUS COMMANDS HAVE BEEN ALLOCATED CERTAIN PRIORITIES AND THESE PRIORITIES ARE CONSTANTLY CHANGING. IT IS ALSO REPORTED THAT IT IS NOT UNUSUAL TO CHANGE PRIORITIES AND THEREFORE DESTINATIONS EVEN AFTER THE GOVERNMENT BILL OF LADING HAS BEEN FORWARDED TO THE CONTRACTOR, AND TO ISSUE AMENDED SHIPPING INSTRUCTIONS BEFORE THE SHIPMENT IS ACTUALLY MADE. IT IS FURTHER REPORTED THAT IT WAS IMPOSSIBLE TO ESTABLISH EVEN ANY GENERAL DESTINATIONS SUCH AS THE EAST COAST, MIDDLE WEST, OR WEST COAST FOR THE ITEMS BEING PROCURED WHEN THE INVITATION FOR BIDS WAS ISSUED. CONSIDERING THESE FACTS, WE SEE NO VALID BASIS FOR CONCLUDING THAT THE FACTOR OF FREIGHT DIFFERENTIALS SHOULD HAVE BEEN USED UNDER THE CIRCUMSTANCES OF THIS PROCUREMENT.

IN VIEW OF THE FOREGOING THERE APPEARS NO PROPER BASIS FOR OBJECTION BY OUR OFFICE TO THE PROPOSED AWARD TO THE LOWEST RESPONSIBLE BIDDER ON THE QUANTITY OF 123 UNITS, IF IT IS OTHERWISE ENTITLED THERETO.