B-145645, JUN. 28, 1961

B-145645: Jun 28, 1961

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TO THE SECRETARY OF THE ARMY: WE HAVE A LETTER OF JUNE 14. THE INVITATION FOR BIDS WAS ISSUED FEBRUARY 24. BIDS WERE OPENED AS SCHEDULED ON MARCH 27. THE LOW BID AT $76 PER UNIT WAS SUBMITTED BY SPECIALTY ELECTRONICS. THE NEXT LOW BID WAS THAT OF UP-RIGHT SCAFFOLDS AT $91.10 PER UNIT. PARAGRAPH 2 OF THE PROVISIONS APPEARING ON PAGE 5 OF THE INVITATION PROVIDES "* * * FINAL INSPECTION AS TO QUANTITY AND CONDITION AND ACCEPTANCE WILL BE MADE AT DESTINATION. * * *" PARAGRAPH 3B OF THE PROVISIONS ON THE SAME PAGE STATES "FINAL INSPECTION AND ACCEPTANCE WILL BE PERFORMED AT DESTINATION. * * *" IN THE LOW BID THE LAST-QUOTED SENTENCE WAS CHANGED BY THE BIDDER BY DELETING THE WORD "DESTINATION" AND SUBSTITUTING THEREFOR "SOURCE.

B-145645, JUN. 28, 1961

TO THE SECRETARY OF THE ARMY:

WE HAVE A LETTER OF JUNE 14, 1961, WITH ENCLOSURES, SIGNED BY THE CHIEF, CONTRACTS DIVISION, DEPUTY CHIEF OF STAFF FOR LOGISTICS, FORWARDING A REPORT IN RESPONSE TO OUR REQUEST OF APRIL 27, 1961, ON A PROTEST BY THE SPECIALTY ELECTRONICS DEVELOPMENT CORPORATION AGAINST THE PROPOSED REJECTION OF ITS LOW BID UNDER INVITATION NO. SC-36-237-61 52.

THE INVITATION FOR BIDS WAS ISSUED FEBRUARY 24, 1961, BY THE TOBYHANNA SIGNAL DEPOT FOR THE PROCUREMENT OF 63 GUYS ON A F.O.B. DESTINATION BASIS. BIDS WERE OPENED AS SCHEDULED ON MARCH 27, 1961. THE LOW BID AT $76 PER UNIT WAS SUBMITTED BY SPECIALTY ELECTRONICS. THE NEXT LOW BID WAS THAT OF UP-RIGHT SCAFFOLDS AT $91.10 PER UNIT.

PARAGRAPH 2 OF THE PROVISIONS APPEARING ON PAGE 5 OF THE INVITATION PROVIDES "* * * FINAL INSPECTION AS TO QUANTITY AND CONDITION AND ACCEPTANCE WILL BE MADE AT DESTINATION. * * *" PARAGRAPH 3B OF THE PROVISIONS ON THE SAME PAGE STATES "FINAL INSPECTION AND ACCEPTANCE WILL BE PERFORMED AT DESTINATION. * * *" IN THE LOW BID THE LAST-QUOTED SENTENCE WAS CHANGED BY THE BIDDER BY DELETING THE WORD "DESTINATION" AND SUBSTITUTING THEREFOR "SOURCE, BEFORE SHIPMENT BY US.' THE QUESTION PRESENTED IS WHETHER THE CHANGE CONSTITUTES A MATERIAL DEVIATION FROM THE INVITATION PROVISIONS REQUIRING REJECTION OF THE LOW BID.

IT HAS BEEN NOTED THAT WHILE THE LOW BIDDER MADE A CHANGE IN THE QUOTED PROVISION IN PARAGRAPH 3B HE MADE NO SIMILAR CHANGE IN THE EQUIVALENT LANGUAGE IN PARAGRAPH 2. WE HAVE NO QUESTION THAT THE CONFLICT IN THE TWO PROVISIONS MUST BE RESOLVED BY ADOPTING THE LANGUAGE OF PARAGRAPH 3B AS AMENDED BY THE BIDDER, SINCE A WRITTEN PROVISION MUST PREVAIL OVER A CONFLICTING PROVISION IN A PRINTED FORM.

AN ADMINISTRATIVE REPORT FROM THE SIGNAL CORPS DATED MAY 19, 1961, AND A LETTER FROM THE BIDDER DATED APRIL 21, 1961, POINT OUT THAT BECAUSE OF OTHER SIGNAL CORPS CONTACTS HELD BY THE LOW BIDDER THERE WILL BE SIGNAL CORPS INSPECTORS IN RESIDENCE AT THE BIDDER'S PLANT AT THE TIME OF PERFORMANCE UNDER THIS CONTRACT SO THAT INSPECTION COULD BE MADE AT THE LOW BIDDER'S PLANT PURSUANT TO THE TERMS OF HIS BID WITHOUT ADDITIONAL COST OF INCONVENIENCE TO THE GOVERNMENT.

THERE IS NO QUESTION THAT THE LOW BID HAS BEEN QUALIFIED BY CHANGING ONE OF THE PROVISIONS OF THE INVITATION. WHETHER THAT BID MAY BE ACCEPTED DEPENDS UPON WHETHER THE QUALIFICATION GOES TO THE PRICE, QUANTITY, OR QUALITY OF PERFORMANCE. 30 COMP. GEN. 179. IF THE DEVIATION AFFECTS ANY OF THE THREE NAMED FACTORS, IT MUST BE DEEMED MATERIAL AND THE BID REJECTED.

IN OUR VIEW THERE ARE THREE POSSIBLE AREAS FOR APPLICATION OF OF THE TEST AS TO MATERIALITY. THE FIRST IS WHETHER THE BID QUALIFICATION WILL INCREASE THE COST OF FINAL INSPECTION AND ACCEPTANCE TO THE GOVERNMENT. SINCE, AS INDICATED EARLIER, GOVERNMENT INSPECTORS WILL BE IN RESIDENCE AT THE LOW BIDDER'S PLANT AT THE TIME OF PERFORMANCE, IT DOES NOT APPEAR THAT THE GOVERNMENT'S COSTS WILL BE INCREASED. SINCE THE BIDDER'S PLANT AND FACILITIES WILL BE USED FOR INSPECTION AND FINAL ACCEPTANCE THE QUALIFICATION MAY BE REGARDED AS PROVIDING THE GOVERNMENT AN ADDITIONAL ADVANTAGE. INDEED, IT IS NOT UNLIKELY THAT THE BIDDER QUALIFIED HIS BID AS HE DID BECAUSE HE FELT THAT THIS ADVANTAGE TO THE GOVERNMENT WOULD OPERATE AS AN INDUCEMENT TO THE AWARD OF A CONTRACT TO HIS FIRM.

THE SECOND AREA OF APPLICATION OF THE TEST AS TO MATERIALITY IS WHETHER THE QUALIFICATION WOULD EFFECT A CHANGE IN THE RESPONSIBILITY FOR THE SUPPLIES BETWEEN THE TIME OF ACCEPTANCE UNDER THE LOW BID AND UNDER THE INVITATION AS ISSUED. STANDARD FORM 32, OCTOBER 1957 EDITION, WHICH WOULD BECOME PART OF THE CONTRACT UNDER THE TERMS OF THE INVITATION, PROVIDES AT PARAGRAPH 6 THAT THE CONTRACTOR SHALL BE RESPONSIBLE FOR THE SUPPLIES COVERED BY THE CONTRACT UNTIL DELIVERED TO THE DESIGNATED RECEIVING POINT REGARDLESS OF THE POINT OF INSPECTION. SINCE DELIVERY IS PROVIDED FOR ON A F.O.B. DESTINATION BASIS, THE LOW BIDDER UNDER THE TERMS OF HIS BID AS SUBMITTED WOULD REMAIN RESPONSIBLE FOR THE SUPPLIES UNTIL DELIVERY NOTWITHSTANDING THE TIME OF INSPECTION AND ACCEPTANCE. THIS PERIOD OF RESPONSIBILITY IS COEXTENSIVE WITH THE PERIOD OF RESPONSIBILITY UNDER THE INVITATION AS ISSUED.

THE THIRD AREA IS A POSSIBLE CHANGE IN THE TIME OF PAYMENT. PARAGRAPH 7 OF STANDARD FORM 32 PROVIDES THAT THE CONTRACTOR SHALL BE PAID UPON THE SUBMISSION OF PROPER INVOICES OR VOUCHERS FOR SUPPLIES "DELIVERED AND ACCEPTED.' SINCE, AS INDICATED EARLIER, THE TIME AND POINT OF DELIVERY WOULD NOT BE CHANGED UNDER THE LOW BID, THE TIME OF PAYMENT WOULD REMAIN THE SAME.

IN THE LIGHT OF THE FOREGOING WE FIND IN APPLYING THE TEST OF MATERIALITY AS PRESCRIBED IN 30 COMP. GEN. 179 THAT THE QUALIFICATION IN THE LOW BID MAY BE REGARDED AS IMMATERIAL AND THEREFORE SHOULD BE WAIVED.