B-144507, JAN. 19, 1961

B-144507: Jan 19, 1961

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TO SUN SHIPBUILDING AND DRY DOCK CO.: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 5. IT IS YOUR CONTENTION. THAT SINCE YOU WERE THE LOW BIDDER AWARD SHOULD HAVE BEEN MADE TO YOU. BY THE SUBJECT INVITATION BIDS WERE SOUGHT ON PROPOSALS TO FABRICATE. THE INVITATIONS WERE CIRCULATED WITH A LETTER DATED SEPTEMBER 2. WHICH STATES THAT THE RESEARCH FACILITY IS URGENTLY NEEDED. THAT DELIVERY IS REQUIRED WITHIN 360 CALENDAR DAYS. THAT INSTALLATION WILL COMMENCE IMMEDIATELY UPON DELIVERY. THE ORIGINAL DELIVERY PROVISIONS OF THE INVITATION WERE AMENDED BY ADDENDUM NO. 3. IS REQUIRED WITHIN 420 CALENDAR DAYS FROM THE DATE OF RECEIPT OF NOTICE TO PROCEED. BIDS REQUIRING A GREATER NUMBER OF DAYS WILL BE CONSIDERED.

B-144507, JAN. 19, 1961

TO SUN SHIPBUILDING AND DRY DOCK CO.:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 5, 1960, WITH ENCLOSURE, PROTESTING AGAINST THE ACTION TAKEN BY NATIONAL AERONAUTICS AND SPACE ADMINISTRATION IN THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. L-1140, ISSUED BY THE LANGLEY RESEARCH CENTER, LANGLEY FIELD, VIRGINIA. IT IS YOUR CONTENTION, IN SUBSTANCE, THAT THE ADMINISTRATIVE AGENCY ERRED IN DETERMINING YOUR OFFER TO BE NONRESPONSIVE, AND THAT SINCE YOU WERE THE LOW BIDDER AWARD SHOULD HAVE BEEN MADE TO YOU.

BY THE SUBJECT INVITATION BIDS WERE SOUGHT ON PROPOSALS TO FABRICATE,SHOP ASSEMBLE AND DELIVER F.O.B. HAMPTON, VIRGINIA, A HIGH TEMPERATURE STRUCTURES TUNNEL, TO BE INSTALLED UNDER ANOTHER CONTRACT, IN ACCORDANCE WITH THE DRAWINGS AND SPECIFICATIONS MADE A PART OF THE INVITATION. THE INVITATIONS WERE CIRCULATED WITH A LETTER DATED SEPTEMBER 2, 1960, WHICH STATES THAT THE RESEARCH FACILITY IS URGENTLY NEEDED; THAT CHANGES TO THE CONDITIONS OF THE INVITATION CANNOT BE ONSIDERED; THAT DELIVERY IS REQUIRED WITHIN 360 CALENDAR DAYS; AND THAT INSTALLATION WILL COMMENCE IMMEDIATELY UPON DELIVERY. THE ORIGINAL DELIVERY PROVISIONS OF THE INVITATION WERE AMENDED BY ADDENDUM NO. 3, DATED OCTOBER 3, 1960, WHICH PROVIDED IN PERTINENT PART AS FOLLOWS:

1 (A) (A) COMPLETE DELIVERY OF ALL ITEMS F.O.B. HAMPTON, VIRGINIA, IS REQUIRED WITHIN 420 CALENDAR DAYS FROM THE DATE OF RECEIPT OF NOTICE TO PROCEED. IF THE BIDDER CANNOT COMPLETE THE WORK WITHIN SUCH PERIOD HE SHALL STATE THE NUMBER OF DAYS REQUIRED THEREFOR. BIDS REQUIRING A GREATER NUMBER OF DAYS WILL BE CONSIDERED, BUT FOR THE PURPOSE OF COMPARISON OF BIDS ON A BASIS OF SPECIFIED TIME, THE BIDS REQUIRING A LONGER TIME THAN 420 CALENDAR DAYS WILL BE EVALUATED BY AN AMOUNT EQUAL TO FIVE HUNDRED DOLLARS ($500.00) FOR EACH CALENDAR DAY IN EXCESS OF THE TIME SPECIFIED, PROVIDED, HOWEVER, THAT BIDS REQUIRING IN EXCESS OF 480 CALENDAR DAYS WILL NOT BE CONSIDERED.

"/B)IN ORDER TO REDUCE "LEAD TIME" ON OTHER CRITICAL CONTRACTS SUCH AS INSTRUMENTATION, CONTROLS, FOUNDATIONS, ETC., PARTIAL DELIVERY UNDER THIS CONTRACT SHALL BE MADE AS FOLLOWS:

(1) TEST SECTION UNIT AND SUPPORT STRUCTURE, DRAWING LD-518,695, SHEET 1, SHALL BE DELIVERED F.O.B. HAMPTON, VIRGINIA, WITHIN 300 CALENDAR DAYS AFTER RECEIPT OF NOTICE TO PROCEED.

(2) TUNNEL 2ND MINIMUM SECTION AND SUPPORT STRUCTURE, DRAWING LD 518,787; EJECTOR ASSEMBLY AND SUPPORT STRUCTURE, DRAWING LD-518,773, SHEET 1; AND MANIFOLD AND SUPPORT STRUCTURE, DRAWING LD-518,781, SHEET 1, DELIVERED F.O.B. HAMPTON, VIRGINIA, WITHIN 300 TO 360 CALENDAR DAYS AFTER RECEIPT OF NOTICE TO PROCEED.'

THE AMENDMENT FURTHER PROVIDED FOR THE ASSESSMENT OF LIQUIDATED DAMAGES AS FOLLOWS:

"LIQUIDATED DAMAGES:

1 (B) (A) FIVE HUNDRED DOLLARS ($500.00) PER CALENDAR DAY FOR EACH CALENDAR DAY OF DELAY IN DELIVERY OF THE TEST SECTION UNIT AND SUPPORT STRUCTURE (DRAWING LD-518,695, SHEET 1) F.O.B. HAMPTON, VIRGINIA, WITHIN 300 CALENDAR DAYS, UNTIL DELIVERY IS ACCOMPLISHED.

(B) FIVE HUNDRED DOLLARS ($500.00) PER CALENDAR DAY FOR EACH CALENDAR DAY OF DELAY IN COMPLETE DELIVERY OF ALL ITEMS SPECIFIED IN THE CONTRACT F.O.B. HAMPTON, VIRGINIA, WITHIN THE CONTRACT TIME SPECIFIED, UNTIL COMPLETE DELIVERY IS ACCOMPLISHED.'

SINCE THE UNDERTAKING COVERED BY THIS INVITATION MUST BE COORDINATED WITH APPROXIMATELY NINE OTHER SEPARATE CONTRACTS CONTEMPLATED TO COMPLETE THE PROJECT, AND IN VIEW OF THE ABOVE-STATED LANGUAGE OF THE INVITATION AND COVERING LETTER, THERE CAN BE NO QUESTION THAT PROMPT PERFORMANCE WAS MADE A MATERIAL CONDITION OF THE SOLICITATION.

YOUR BID CONTAINED THE FOLLOWING LEGEND:

"BID IS CONDITIONED FOR LOT 1 ONLY, THAT DELIVERY OF FIXED STRUT, CURVED STRUT AND CORRESPONDING STINGS WILL NOT BE INCLUDED WITH THE TEST SECTION UNIT AND SUPPORT STRUCTURE. THESE ITEMS WILL BE DELIVERED WITHIN THE 420 DAYS REQUIRED BY THE DELIVERY SCHEDULE.'

THE ONLY QUESTION PRESENTED IS WHETHER THE EXCLUSION, FOR DELIVERY PURPOSES, OF THE ABOVE-LISTED ITEMS FROM THE TEST SECTION UNIT AND RELATED COMPONENTS, WHICH WERE REQUIRED TO BE DELIVERED WITHIN 300 CALENDAR DAYS UNDER PARAGRAPH 1 (A) (B) (1) OF ADDENDUM NO. 3, IS A MATERIAL DEVIATION FROM THE REQUIREMENTS OF THE INVITATION WHICH RENDERED YOUR PROPOSAL NONRESPONSIVE. YOU CONTEND THAT SINCE THE UNITS CAN BE TESTED SEPARATELY THEIR AVAILABILITY IN 300 DAYS HAS NO RELATIONSHIP TO THE PROGRESS OF THE ERECTION OF THE WIND TUNNEL, AND THEREFORE YOUR OFFER TO DELIVER THE COMPONENTS WITHIN 420 DAYS, THE PERIOD FIXED BY THE ADDENDUM FOR COMPLETE DELIVERY, COMPLIED WITH THE TERMS OF THE INVITATION AND WAS ENTIRELY RESPONSIVE.

IT IS NO PART OF THE DUTY OR AUTHORITY OF THE GENERAL ACCOUNTING OFFICE TO ASCERTAIN THE NEEDS OF AN ADMINISTRATIVE AGENCY, DRAFT ITS LAWFUL AND PROPER CONTRACTS, OR SUPERVISE THE PERFORMANCE THEREOF. FOR THAT REASON WE MAY NOT SUBSTITUTE OUR JUDGMENT IN THIS CASE FOR THAT OF THE AUTHORIZED PROCUREMENT OFFICIALS WHO PREDETERMINED THE DELIVERY REQUIREMENTS OF THIS INVITATION. WE HAVE BEEN ADVISED THAT, CONTRARY TO YOUR REASONING IN THE MATTER, GOVERNMENT ENGINEERS ASSOCIATED WITH THE DESIGNING, ERECTING, AND TESTING OF THE PROJECTED FACILITY HAVE DETERMINED THAT DELIVERY OF THE COMPONENTS INVOLVED WITH THE TEST SECTION WAS ESSENTIAL TO MEET THE OVERALL PLANNED ERECTION AND ASSEMBLY SCHEDULE.

THIS OFFICE HAS HELD REPEATEDLY THAT DEVIATIONS IN A BID FROM THE ADVERTISED SPECIFICATIONS RELATIVE TO DELIVERY, AS WELL AS OTHER FACTORS AFFECTING PRICE, QUANTITY, OR QUALITY, GO TO THE SUBSTANCE OF THE BID SO AS TO BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS AND THEREFORE MAY NOT BE WAIVED AS MERE INFORMALITIES. MOREOVER, A BIDDER MAY NOT CHANGE A PROVISION IN A BID SUBSEQUENT TO ITS OPENING IF IT LIMITS THE BIDDER'S LIABILITY FOR DELAYS, SINCE SUCH QUALIFICATION WOULD BE A MATERIAL DEVIATION. SEE 30 COMP. GEN. 179; 36 COMP. GEN. 181; 38 ID. 98; 612; 38 ID. 876.

ADDENDUM NO. 3 PROVIDED FOR THE ASSESSMENT OF LIQUIDATED DAMAGES OF $500 PER DAY FOR DELAY BEYOND 300 DAYS IN DELIVERY OF THE TEST SECTION UNIT. THE STRUTS AND STINGS CONSTITUTE THE MOST DIFFICULT PART OF THAT UNIT TO FABRICATE, AND IT IS CLEAR THAT DELIVERY OF THE UNIT WITHOUT THE STRUTS AND STINGS WAS NOT INTENDED BY THE INVITATION TO STOP THE ACCRUAL OF LIQUIDATED DAMAGES UNDER PARAGRAPH 1 (B) (A) OF ADDENDUM NO. 3. HOWEVER, IN OUR OPINION THE LEGAL EFFECT OF THE ABOVE-QUOTED LEGEND YOU INCORPORATED IN YOUR BID IS TO RELIEVE YOU FROM LIABILITY FOR LIQUIDATED DELAY DAMAGES FOR FAILURE TO DELIVER THE STRUTS AND STINGS WITHIN 300 DAYS. UNDER THE LANGUAGE YOU USED IT IS OUR VIEW THAT YOU WOULD HAVE 420 DAYS FOR DELIVERY OF THE STRUTS AND STINGS WITHOUT LIABILITY FOR DELAY DAMAGES. AT $500 PER DAY THIS WOULD AMOUNT TO $60,000 COMPUTED ON THE DIFFERENCE BETWEEN 300 DAYS AND 420 DAYS. THIS DIFFERENCE BETWEEN YOUR LIABILITY FOR LIQUIDATED DAMAGES AND THAT IMPOSED ON BIDDERS WHO TOOK NO EXCEPTION TO THE TERMS OF THE INVITATION IS PATENTLY MATERIAL.

ACCORDINGLY, THE ACTION TAKEN BY THE ADMINISTRATIVE AGENCY IN REJECTING YOUR BID AS NONRESPONSIVE WILL NOT BE DISTURBED.