B-146170, SEP. 15, 1961

B-146170: Sep 15, 1961

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 19. TWO OF THE ITEMS WERE CANCELED AND THE BID PRICES OF STEWART STEEL PRODUCTS. WERE LOWER THAN THOSE QUOTED BY OTHER BIDDERS ON 13 OF THE REMAINING 19 ITEMS. NO AWARD WAS MADE TO STEWART STEEL PRODUCTS. BECAUSE ITS QUOTED PRICES APPEARED TO HAVE BEEN BASED UPON DELIVERY F.O.B. IT IS CONTENDED IN YOUR LETTER OF JUNE 19. WAS IN ACCORDANCE WITH ALL TERMS AND CONDITIONS OF THE INVITATION. SPACES WERE PROVIDED FOR BIDDERS TO INSERT INFORMATION AS TO THE LOCATION OF THEIR PLANTS FOR DELIVERY. THOSE PARAGRAPHS OF THE SCHEDULE WERE DELETED BY PROVISIONS AT PAGE 5 OF THE SCHEDULE WHICH ALSO SET FORTH THAT THE SUPPLIES WERE TO BE DELIVERED F.O.B.

B-146170, SEP. 15, 1961

TO MR. HENRY SKRILL, PRESIDENT, STEWART AVIONICS, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 19, 1961, AND LETTER OF THE SAME DATE, PROTESTING THE AWARD ACTION TAKEN BY THE AIR FORCE UNDER INVITATION FOR BIDS NO. 40-604-61-4193, ISSUED APRIL 12, 1961, BY HEADQUARTERS, 2709TH AF VEHICLE CONTROL GROUP, MEMPHIS, TENNESSEE.

THE SCHEDULE OF THE INVITATION LISTED 21 ITEMS OF AUTOMOTIVE PARTS. TWO OF THE ITEMS WERE CANCELED AND THE BID PRICES OF STEWART STEEL PRODUCTS, INC., PREDECESSOR TO STEWART AVIONICS, NC., WERE LOWER THAN THOSE QUOTED BY OTHER BIDDERS ON 13 OF THE REMAINING 19 ITEMS. NO AWARD WAS MADE TO STEWART STEEL PRODUCTS, INC., BECAUSE ITS QUOTED PRICES APPEARED TO HAVE BEEN BASED UPON DELIVERY F.O.B. BROOKLYN, NEW YORK, INSTEAD OF F.O.B.'BROOKLEY AIR FORCE BASE, MOBILE," AS REQUIRED BY THE TERMS OF THE INVITATION.

IT IS CONTENDED IN YOUR LETTER OF JUNE 19, 1961, THAT THE BID OF STEWART STEEL PRODUCTS, INC., WAS IN ACCORDANCE WITH ALL TERMS AND CONDITIONS OF THE INVITATION, INCLUDING THE DELETIONS AS CALLED FOR IN THE SCHEDULE DELETING PARAGRAPHS D AND F.

PARAGRAPHS D AND F OF THE BIDDING SCHEDULE PROVIDED IN EFFECT FOR DELIVERY, INSPECTION AND ACCEPTANCE TO BE ACCOMPLISHED AT OR NEAR THE PLANTS OF SUCCESSFUL BIDDERS. SPACES WERE PROVIDED FOR BIDDERS TO INSERT INFORMATION AS TO THE LOCATION OF THEIR PLANTS FOR DELIVERY, INSPECTION AND ACCEPTANCE PURPOSES. THOSE PARAGRAPHS OF THE SCHEDULE WERE DELETED BY PROVISIONS AT PAGE 5 OF THE SCHEDULE WHICH ALSO SET FORTH THAT THE SUPPLIES WERE TO BE DELIVERED F.O.B. DESTINATION, BROOKLEY AIR FORCE BASE, MOBILE; THAT F.O.B. ORIGIN BIDS WOULD NOT BE ACCEPTABLE AND WOULD BE REJECTED; AND THAT INSPECTION WOULD BE MADE AT CONTRACTOR'S PLANT, WITH FINAL ACCEPTANCE AT DESTINATION.

THE RECORD SHOWS THAT STEWART STEEL PRODUCTS, INC., STAMPED ITS NAME AND ADDRESS IN THE BLANK SPACES OF THE DELETED PARAGRAPHS D AND F AND IN THE SPACE PROVIDED AT PAGE 5 OF THE SCHEDULE FOR SHOWING THE PLACE WHERE THE SUPPLIES COULD BE INSPECTED BY THE GOVERNMENT PRIOR TO SHIPMENT. THE INSERTIONS AT THE DELETED PARAGRAPHS RESULTED IN A DETERMINATION BY THE CONTRACTING OFFICER THAT THE BIDDER INTENDED ITS BID PRICES TO BE ON AN F.O.B. ORIGIN BASIS.

ON THE OTHER HAND, IT IS POSSIBLE, AS ALLEGED BY YOU, THAT THE BIDDER WAS FULLY AWARE OF THE SUBSTITUTE PROVISION AT PAGE 5 OF THE SCHEDULE, REQUIRING BIDS TO BE SUBMITTED ON AN F.O.B. DESTINATION BASIS, AND THAT THE INSERTIONS AT THE DELETED PARAGRAPHS D AND F WERE MADE WITHOUT REALIZING THAT THOSE PARAGRAPHS WERE DESIGNED FOR SUPPLY CONTRACTS UNDER WHICH THE GOVERNMENT UNDERTAKES TO INSPECT AND ACCEPT THE SUPPLIES AT OR NEAR THE CONTRACTORS' PLANTS, AND TO SHIP THE SUPPLIES TO DESTINATION POINTS AT ITS OWN EXPENSE.

REGARDLESS OF WHAT MAY HAVE BEEN INTENDED, THE INSERTIONS AT THE DELETED PARAGRAPHS D AND F MUST BE REGARDED AS HAVING RENDERED THE BID AT LEAST SUSCEPTIBLE TO AN INTERPRETATION WHICH WOULD HAVE THE EFFECT OF VARYING THE BIDDER'S OBLIGATION FROM THAT CONTEMPLATED BY THE INVITATION WITH RESPECT TO DELIVERY OF THE SUPPLIES, ALL TRANSPORTATION CHARGES PAID, TO THE BROOKLEY AIR FORCE BASE.

IF AN AWARD HAD BEEN MADE TO STEWART STEEL PRODUCTS, INC., WITHOUT VERIFICATION OF ITS BID PRICES, IT IS APPARENT THAT THE BIDDER REASONABLY COULD HAVE MAINTAINED THAT SUCH PRICES DID NOT INCLUDE TRANSPORTATION COSTS AND CLAIMED ADJUSTMENTS IN THE PRICES OF THE ACCEPTED BID. ALSO, IF A CLARIFICATION OF THE BID HAD BEEN REQUESTED PRIOR TO AWARD, THE BIDDER MIGHT WELL HAVE INSISTED UPON CONSIDERATION OF THE INSERTIONS MADE AT THE DELETED PARAGRAPHS D AND F AS REQUIRING A REJECTION OF THE BID, OR REQUESTED THAT THE INSERTIONS BE DISREGARDED IF IT STILL WANTED A CONTRACT. AN OPPORTUNITY FOR ANY SUCH CHOICE IN THE MATTER AFTER OPENING OF BIDS WOULD HAVE HAD AN ADVERSE EFFECT UPON THE RIGHTS OF OTHER BIDDERS WHOSE BIDS WERE CLEARLY AND WHOLLY RESPONSIVE TO THE INVITATION FOR BIDS.

IN THE PARTICULAR CIRCUMSTANCES, WE ARE OF THE OPINION THAT IT WOULD NOT HAVE BEEN PROPER TO ACCEPT ANY PART OF THE BID OF STEWART STEEL PRODUCTS, INC., ALTHOUGH YOU SUGGEST THAT THE REJECTION OF SUCH BID AND AWARDS AT HIGHER PRICES CONSTITUTED AN UNWARRANTED WASTE ON THE PART OF THE GOVERNMENT.

IT IS AN ESTABLISHED PRINCIPLE OF GOVERNMENTAL FORMAL COMPETITIVE PROCUREMENT THAT A CONTRACT OFFERED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. THAT PRINCIPLE COULD NOT BE MAINTAINED IF THE GOVERNMENT, IN ORDER TO OBTAIN A PECUNIARY ADVANTAGE IN PURCHASING SUPPLIES, PERMITTED MATERIAL CHANGES IN BIDS AFTER OPENING OR ALLOWED ANY BIDDER AN OPPORTUNITY BEFORE AWARD TO CLARIFY AN APPARENT QUALIFICATION IN BID WHICH MIGHT BE CONSIDERED AS AFFECTING THE SUBSTANCE OF THE BID EITHER AS TO PRICE, QUALITY OR QUANTITY OF THE ARTICLES OFFERED. SEE 31 COMP. GEN. 179; 34 ID. 24; 35 ID. 33; AND 36 ID. 535.