B-145969, JUN. 9, 1961

B-145969: Jun 9, 1961

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO THE LETTER OF MAY 24. ON TWO BID FORMS BID PRICES ARE QUOTED ON ALL ITEMS THROUGH ADDITIVE 4 (DIVIDED INTO A AND B). ALL BID PRICES ARE HANDWRITTEN. A REPRESENTATIVE OF THE COMPANY TOLD THE CONTRACTING OFFICER THAT THROUGH INADVERTENCE TWO OF THE BID FORMS WERE NOT CONFORMED TO THE THIRD. PROVIDES THAT BIDS WILL BE EVALUATED BY ADDING ADDITIVES IN SEQUENCE TO THE BASE BID AS LONG AS CERTAIN SPECIFIED DOLLAR LIMITATIONS ARE NOT EXCEEDED. AFTER THE ADDITION OF ADDITIVE 4 TO THE PREVIOUS ADDITIVES AND BASE BID INDICATES THAT RICH IS THE LOWEST BIDDER. RICH DOES NOT EXCEED THE LIMITATION UNTIL THE ADDITIVE AFTER 5A IS ADDED TO ITS BASE BID AND PREVIOUS ADDITIVES.

B-145969, JUN. 9, 1961

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO THE LETTER OF MAY 24, 1961, WITH ENCLOSURES, FROM THE DEPUTY SPECIAL ASSISTANT FOR INSTALLATION, REQUESTING A DECISION WHETHER OUR OFFICE WOULD OBJECT TO THE AWARD OF A CONTRACT TO F. D. RICH COMPANY, INCORPORATED, FOR THE CONSTRUCTION OF 280 CAPEHART FAMILY HOUSING UNITS FOR MILITARY PERSONNEL AT TRUAX FIELD, WISCONSIN, COVERED BY INVITATION 47-602-61-28.

THE F. D. RICH COMPANY, IN COMPLIANCE WITH THE REQUEST THAT BIDDERS SUBMIT BID FORMS IN TRIPLICATE, FURNISHED THREE BID FORMS EACH SIGNED BY THE VICE PRESIDENT OF THE FIRM. ON TWO BID FORMS BID PRICES ARE QUOTED ON ALL ITEMS THROUGH ADDITIVE 4 (DIVIDED INTO A AND B), AND ON THE THIRD, ON ALL ITEMS THROUGH ADDITIVE 5 (DIVIDED INTO A, B AND C). ALL BID PRICES ARE HANDWRITTEN. IMMEDIATELY AFTER THE BID OPENING, A REPRESENTATIVE OF THE COMPANY TOLD THE CONTRACTING OFFICER THAT THROUGH INADVERTENCE TWO OF THE BID FORMS WERE NOT CONFORMED TO THE THIRD.

PARAGRAPH 10. A. OF THE INVITATION, AS AMENDED, PROVIDES THAT BIDS WILL BE EVALUATED BY ADDING ADDITIVES IN SEQUENCE TO THE BASE BID AS LONG AS CERTAIN SPECIFIED DOLLAR LIMITATIONS ARE NOT EXCEEDED. THE BID EVALUATION CEILING APPLICABLE TO THIS CASE HAS BEEN DETERMINED TO BE $4,592,000 ($16,400 PER HOUSING UNIT MULTIPLIED BY 280 UNITS). A COMPARISON OF THE BIDS OF THE F. D. RICH COMPANY AND THE ELECTRONICS AND MISSILE FACILITIES, INC., AFTER THE ADDITION OF ADDITIVE 4 TO THE PREVIOUS ADDITIVES AND BASE BID INDICATES THAT RICH IS THE LOWEST BIDDER. RICH DOES NOT EXCEED THE LIMITATION UNTIL THE ADDITIVE AFTER 5A IS ADDED TO ITS BASE BID AND PREVIOUS ADDITIVES. HOWEVER, THE TOTAL BID OF ELECTRONICS EXCEEDS THE CUTOFF POINT WITH THE ADDITION OF ADDITIVE 5A TO THE BASE BID AND PREVIOUS ADDITIVES.

ELECTRONICS HAS PROTESTED AGAINST AN AWARD BEING MADE TO RICH ON THE GROUND THAT THE COMPANY'S BID WAS NOT RESPONSIVE IN THAT IT DID NOT QUOTE PRICES ON ALL 18 ADDITIVES LISTED IN THE BID FORM, SINCE PARAGRAPH 10. OF THE INVITATION SPECIFIED THAT A SEPARATE BID "MUST" BE SUBMITTED ON EACH ADDITIVE AND PARAGRAPH 10. B. STATED THAT A SEPARATE BID IS "REQUIRED" ON EACH ADDITIVE.

SINCE RICH INCLUDED A PRICE FOR ADDITIVE 5 ONLY ON ONE OF THE THREE BID FORMS SUBMITTED, AND SINCE ELECTRONICS HAS OTHERWISE CONTESTED THE RESPONSIVENESS OF THE COMPANY'S BID, WE HAVE BEEN REQUESTED TO RENDER A DECISION IN THE CIRCUMSTANCES.

THERE WOULD APPEAR TO BE NO DOUBT THAT THE FAILURE TO INCLUDE PRICES FOR ITEM 5 ON TWO OF THE BID FORMS WAS AN OVERSIGHT BY THE BIDDER. FROM THE INFORMATION MADE AVAILABLE TO BIDDERS IN THE INVITATION, THEY WERE PUT ON NOTICE THAT THE OUTSIDE LIMITATION ON THE EVALUATION OF BIDS WOULD BE $4,592,000. THIS FIGURE WOULD THEREFORE NECESSARILY BECOME A TARGET PRICE FOR ALL BIDDERS. SINCE THE BIDDER'S BID THROUGH ADDITIVE 4 WAS WELL WITHIN THE TARGET PRICE IT IS ONLY LOGICAL TO ASSUME THAT IT INTENDED TO CONTINUE BIDDING ON ADDITIONAL ADDITIVES AT LEAST UP TO THE TARGET PRICE, IF NOT OVER TO PROVIDE POSITIVE EVIDENCE OF THE ADDITIVES THAT WILL FALL WITHIN THE LIMITATION AND TO SHOW THAT THE ITEMS THEREAFTER DO NOT COME WITHIN THE CUTOFF.

FURTHERMORE, IF THE BID SHOULD BE VIEWED AS AMBIGUOUS ON THE GROUND THAT IT IS NOT CLEAR WHETHER THE BIDDER INTENDED TO INCLUDE PRICES FOR ALL THE ADDITIVES THROUGH 4 ONLY, OR THROUGH 5, THE FACT REMAINS THAT UNDER EITHER INTERPRETATION IT IS STILL THE LOWEST BID RECEIVED AND ACCEPTING THE VIEW MORE FAVORABLE TO THE GOVERNMENT, AS CONFIRMED BY THE BIDDER TO BE ITS INTENTION, AND NOT BEING INCONSISTENT WITH A REASONABLE INTERPRETATION OF THE BID AS SUBMITTED, NO PREJUDICE RESULTS TO THE OTHER BIDDERS WHO HAD DISQUALIFIED THEMSELVES BY REASON OF THEIR HIGHER PRICES. IN THIS CONNECTION, SEE 39 COMP. GEN. 653.

WITH RESPECT TO THE RESPONSIVENESS OF THE BID OF THE F. D. RICH COMPANY FOR FAILURE TO BID ON ALL 18 ADDITIVES, THE ATTORNEYS FOR THE PROTESTING BIDDER IN A LETTER TO US OF MAY 26, 1961, GENERALLY RELY UPON THE PRINCIPLE STATED IN SEVERAL DECISIONS OF OUR OFFICE THAT BIDS WHICH DISREGARD THE MANDATORY REQUIREMENTS OF BID INVITATIONS ARE REQUIRED TO BE REJECTED. HOWEVER, IN THOSE CASES THE BIDDER HAD NEGLECTED TO FURNISH INFORMATION OR PRICES WHICH WERE MATERIAL TO THE EVALUATION OF BIDS. THIS IS NOT SO IN THE IMMEDIATE CASE. HERE THE LOW BIDDER HAS QUOTED A PRICE ON EVERY ITEM ESSENTIAL TO THE BID EVALUATION. AND WHILE YOUR DEPARTMENT HAS RESERVED IN THE INVITATION THE RIGHT TO MAKE AN AWARD THAT MAY INCLUDE ADDITIVES OTHER THAN THOSE INCLUDED IN THE ACTUAL EVALUATION, IN THIS CASE IT IS REPORTED THAT IT HAS BEEN DECIDED TO MAKE THE AWARD ON THE BASIS OF THE EXACT SEQUENCE SPECIFIED IN THE INVITATION. THEREFORE, SINCE THE BIDDER EXCEEDS THE LIMITATION SPECIFIED IN THE EVALUATION FORMULA WITH THE ADDITION OF ADDITIVES AFTER 5A, THE PRICES ON THOSE ADDITIONAL ADDITIVES ARE IMMATERIAL AND UNNECESSARY IN CONNECTION WITH THE EVALUATION OF BIDS, AND THEIR OMISSION MAY BE CONSIDERED AN INFORMALITY WHICH MAY BE WAIVED. AS NOTED IN THE LETTER OF MAY 24, 1961, OUR DECISION IN B 143271, OCTOBER 7, 1960, SUPPORTS THIS REASONING. IN THAT CASE, THE INSTRUCTIONS TO BIDDERS STATED THAT BIDS "MUST BE SUBMITTED ON ALL ITEMS" AND THAT "BIDS NOT SO SUBMITTED WILL BE CONSIDERED NON RESPONSIVE AND WILL BE REJECTED.' NEVERTHELESS, IT WAS CONCLUDED THAT IT WAS IMPROPER TO REJECT THE BID OF THE LOW BIDDER FOR FAILING TO BID ON AN ITEM THAT WAS NOT PART OF THE EVALUATION OF BIDS, SINCE THE ITEM DID NOT AFFECT THE SUBSTANCE OF THE BID.

IN VIEW OF THE CIRCUMSTANCES OF THE IMMEDIATE CASE, WE WOULD HAVE NO OBJECTION IF THE AWARD IS MADE TO THE F. D. RICH COMPANY.

THE FILE THAT ACCOMPANIED THE LETTER OF MAY 24, 1961, IS RETURNED AS REQUESTED.