B-145813, JUNE 1, 1961, 40 COMP. GEN. 653

B-145813: Jun 1, 1961

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WHOSE BID WHEN EVALUATED SHOWS THAT THE PRICES ARE LOWER ON ANY QUANTITY CATEGORY THAN THOSE OF ANY OF THE OTHER BIDDERS. YOU HAVE PROTESTED ON BEHALF OF THE UNITED MANUFACTURING AND ENGINEERING CORPORATION OF INDEPENDENCE. IS THAT THE INVITATION REQUIRED THE SUBMISSION OF BIDS BY THE STATED INCREMENTS AND THAT FAILURE TO CONFORM CONSTITUTED A MATERIAL DEVIATION NECESSITATING REJECTION OF THE BID. THAT SUCH OFFER IS NOT ONLY NOT RESPONSIVE TO THE CLEAR REQUIREMENTS OF THE INVITATION BUT ALSO MAY NOT PROPERLY BE COMPARED WITH BIDS CONFORMING TO THE INVITATION BECAUSE THE LATTER MUST AVERAGE IN THE HIGHER UNIT COSTS FOR LOWER QUANTITIES. IS NOT REASONABLE. IF THE BIDDER IS WILLING TO FURNISH 375 UNITS IT IS REASONABLE TO ASSUME THAT IT COULD.

B-145813, JUNE 1, 1961, 40 COMP. GEN. 653

BIDS - QUALIFIED - QUANTITY DEVIATIONS A LOW BIDDER WHO SUBMITS A BID SHOWING PRICES ON A DIFFERENT UNIT QUANTITY PATTERN THAN THE INCREMENT QUANTITY PATTERN IN THE INVITATION, BUT WHOSE BID WHEN EVALUATED SHOWS THAT THE PRICES ARE LOWER ON ANY QUANTITY CATEGORY THAN THOSE OF ANY OF THE OTHER BIDDERS, HAS NOT SUBMITTED A BID WHICH MUST BE INTERPRETED AS AN OFFER OF ONLY THE INDIVIDUAL QUANTITIES LISTED IN THE BID AND AN AWARD TO SUCH BIDDER WOULD NOT BE PREJUDICIAL TO ANY OTHER BIDDERS.

TO GRANOFF, LEVY AND CRAIG, JUNE 1, 1961:

BY LETTERS DATED MAY 1, 1961, AND MAY 18, 1961, YOU HAVE PROTESTED ON BEHALF OF THE UNITED MANUFACTURING AND ENGINEERING CORPORATION OF INDEPENDENCE, MISSOURI, THE AWARD TO ANOTHER BIDDER OF A CONTRACT UNDER INVITATION NO. 101-601-61-940, ISSUED DECEMBER 9, 1960, BY THE MOBILE AIR MATERIAL AREA FOR THE PROCUREMENT OF AIRCRAFT MAINTENANCE STANDS.

THE INVITATION PROVIDED AT PAGE 1 OF THE SCHEDULE AS FOLLOWS:

CHART

BIDS SHALL BE SUBMITTED IN THE FOLLOWING INCREMENTS: ITEM NO. 1-1 FROM 189 EACH TO 376 EACH INCLUSIVE 1-2 FROM 377 EACH TO 564 EACH INCLUSIVE 1-3 FROM 565 EACH TO 750 EACH INCLUSIVE 1-4 FROM 751 EACH TO 938 EACH INCLUSIVE

THE LOW BIDDER, TUBULAR AIRCRAFT PRODUCTS COMPANY, INCORPORATED, OF LOS ANGELES, CALIFORNIA, INSTEAD OF BIDDING ON THE DESIGNATED INCREMENTS, SUBMITTED THE FOLLOWING BID PRICES:

CHART

QUANTITY UNIT PRICE AMOUNT 200 EACH ------------------------------ $503.30 $100,660.00 375 EACH ------------------------------ 482.65 180,993.75 550 EACH ------------------------------ 464.35 255,392.50750 EACH ------------------------------ 456.35342,262.50

AFTER SOME CONSIDERATION OF THE MATTER THE CONTRACTING OFFICER ON FEBRUARY 23, 1961, AWARDED A CONTRACT FOR 751 UNITS TO THE LOW BIDDER AT A UNIT PRICE OF $456.35.

THE BASIS OF YOUR PROTEST ON BEHALF OF UNITED, THE NEXT LOW BIDDER, AS STATED IN A LETTER DATED FEBRUARY 28, 1961, FROM UNITED TO THE CONTRACTING OFFICER, AND YOUR LETTER OF MAY 1, IS THAT THE INVITATION REQUIRED THE SUBMISSION OF BIDS BY THE STATED INCREMENTS AND THAT FAILURE TO CONFORM CONSTITUTED A MATERIAL DEVIATION NECESSITATING REJECTION OF THE BID. APPEARS FURTHER TO BE YOUR CONTENTION THAT THE LOW BID SHOULD BE INTERPRETED AS OFFERING TO FURNISH ONLY THE FOUR INDIVIDUAL QUANTITIES LISTED, AND THAT SUCH OFFER IS NOT ONLY NOT RESPONSIVE TO THE CLEAR REQUIREMENTS OF THE INVITATION BUT ALSO MAY NOT PROPERLY BE COMPARED WITH BIDS CONFORMING TO THE INVITATION BECAUSE THE LATTER MUST AVERAGE IN THE HIGHER UNIT COSTS FOR LOWER QUANTITIES, THUS PRESENTING A HIGHER PRICE FOR THE SPECIFIC QUANTITY OFFERED BY TUBULAR. FINALLY, YOU CONTEND THAT SINCE THE LOW BID, AS PROPERLY INTERPRETED, OFFERED TO FURNISH A MAXIMUM OF 750 UNITS, THE AWARD OF A HIGHER QUANTITY, 751 UNITS, WOULD NOT EFFECT A BINDING CONTRACT BUT WOULD, IF PROPERLY CONSTRUED, AMOUNT TO A COUNTER- OFFER WHICH THE LOW BIDDER COULD AT HIS OPTION EITHER ACCEPT OR REJECT.

WE DO NOT QUESTION THAT THE AWARD OF A CONTRACT WHICH VARIES THE TERMS OF THE BID VIOLATES THE INTENT OF THE COMPETITIVE BIDDING STATUTES AND SHOULD NOT BE PERMITTED. HOWEVER, IN OUR VIEW YOUR INTERPRETATION OF THE INTENT OF THE TUBULAR BID, I.E; THAT IT OFFERED TO FURNISH ONLY THE FOUR QUANTITIES LISTED, IS NOT REASONABLE. NO REASON APPEARS FOR ANY BIDDER TO LIMIT THE TERMS OF ITS OFFER IN SUCH MANNER. IF THE BIDDER IS WILLING TO FURNISH 375 UNITS IT IS REASONABLE TO ASSUME THAT IT COULD, AND WOULD, AS READILY FURNISH 374 OR 376 UNITS.

IN VIEW OF THE FOREGOING AND THE POSITIONING IN THE LOW BID OF THE UNIT QUANTITIES OPPOSITE THE STATED INCREMENTS, IT IS CLEAR THAT THE UNIT PRICES QUOTED BY TUBULAR WERE INTENDED TO APPLY TO ANY QUANTITIES BETWEEN THE NUMBERS INSERTED BY IT, AND NOT MERELY TO THE DEFINITE NUMBERS STATED. IN THIS CONNECTION, WE WERE INFORMALLY ADVISED THAT THE UNIT COST OF ALUMINUM, THE LARGEST CONSTITUENT OF THE ITEM UNDER PROCUREMENT, CHANGED AT THOSE QUANTITIES LISTED IN THE TUBLAR BID. THIS FACT FURTHER TENDS TO ESTABLISH THAT THE TUBULAR BID SHOULD PROPERLY BY INTERPRETED AS OFFERING QUANTITIES IN INCREMENTS, ALTHOUGH USING POINTS OF DIVISION DIFFERING FROM THOSE PROPOSED BY THE INVITATION FORM. ASSUMING, AS YOU CONTEND, THAT THE USE OF DIFFERENT INCREMENT QUANTITIES AS THE BASIS OF QUOTING PRICES COULD HAVE GIVEN THE LOW BIDDER AN UNDUE ADVANTAGE, SINCE THE HIGHER UNIT COST OF THE LOWER QUANTITIES WITHIN THE QUANTITY GROUPS STATED IN THE INVITATION WOULD NOT HAVE BEEN AVERAGED INTO THE LOWER UNIT COST OF THE HIGHER QUANTITIES WITHIN THE SAME RESPECTIVE GROUPS, IT DOES NOT APPEAR THAT ANY SUCH UNDUE ADVANTAGE IS PRESENT IN THIS INSTANCE. THIS IS CLEAR FROM THE FACT THAT THE TUBULAR BID ON THE LOWEST CATEGORY IS LOWER THAN UNITED'S BID ON THE SECOND CATEGORY; ITS BID ON THE SECOND CATEGORY IS LOWER THAN UNITED'S ON THE THIRD CATEGORY, ETC. IN OTHER WORDS, EVEN TAKING INTO ACCOUNT THE ADVANTAGE TUBULAR MAY HAVE OBTAINED BY ITS REORGANIZATION OF THE INCREMENTS STATED IN THE INVITATION, ITS PRICE ON ANY QUANTITY CATEGORY IS STILL LOWER THAN THAT OF ANY OTHER BIDDER. THEREFORE, WE FIND NO BASIS FOR THE CONTENTION THAT ANY OTHER BIDDER WAS PREJUDICED BY THE CONSIDERATION OF TUBULAR'S BID.

WHILE THE FORM OF THE BID DOES NOT FURNISH SOME BASIS FOR ARGUMENT AS TO ITS INTERPRETATION, WE FEEL THAT YOUR INTERPRETATION IS UNDULY STRAINED. CONSIDERING ALSO THE TIME WHICH HAS ELAPSED SINCE THE AWARD, THE MAXIMUM INCREASE INVOLVED, AND THE FACT THAT IN THIS TYPE OF SITUATION POSSIBLE AMBIGUITIES SHOULD BE RESOLVED IN THE MANNER MOST FAVORABLE TO THE GOVERNMENT, IF REASONABLY POSSIBLE, WE FIND NO BASIS FOR HOLDING THE AWARD INVALID. SEE 39 COMP. GEN. 546.

YOU ALSO POINT OUT THAT THE PRESIDENT OF UNITED CALLED AT THE OFFICE OF THE CONTRACTING OFFICER ON FEBRUARY 23, 1961, THE DATE OF AWARD, BUT WAS UNABLE TO SEE HIM. FURTHER, YOU STATE THAT UNITED'S PRESIDENT WAS AT THAT TIME ADVISED THAT THE BIDS WERE STILL BEING EVALUATED. WE HAVE NO INFORMATION AS TO THE JUSTIFICATION FOR SUCH TREATMENT; BUT REGARDLESS OF THE CIRCUMSTANCES IT DOES NOT APPEAR THAT THEY WOULD AFFECT THE VALIDITY OF THE AWARD.

IN YOUR LETTER OF MAY 18, 1961, IN ADDITION TO REPEATING THE ARGUMENTS ALREADY CONSIDERED ABOVE, YOU REQUEST THAT THE COSTS OF DELIVERY TO FIRST DESTINATION BE CALCULATED. IT IS YOUR POSITION THAT BECAUSE OF UNITED'S LOCATION CONSIDERATION OF SUCH TRANSPORTATION COSTS MAY MAKE UNITED THE LOW BIDDER. WE HAVE BEEN ADVISED BY THE DEPARTMENT OF THE AIR FORCE THAT NO ATTEMPT WAS MADE TO CALCULATE SHIPPING COSTS BECAUSE OF LACK OF INFORMATION AS TO THE LOCATIONS TO WHICH THE UNITS WILL BE SHIPPED. UNDER THE CIRCUMSTANCES AN EVALUATION OF SHIPPING COSTS WOULD NOT BE POSSIBLE.