B-146218, SEP. 5, 1961

B-146218: Sep 5, 1961

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BIDS WERE REQUESTED AS FOLLOWS: "1 RADIO SET AN/GRC-19 ( (. CLAUSE NO. 27 OF THE ADDITIONAL GENERAL PROVISIONS OF THE INVITATION PROVIDED: "PRICES OF SUB-ITEMS "BIDS AND PROPOSALS WILL SHOW PRICES FOR END-ITEMS WHICH INCLUDE PRICES OF ALL COMPONENTS AND SUB-ITEMS. BIDDERS AND OFFERORS ARE REQUESTED TO SHOW THE UNIT PRICES OF SUB-ITEMS FOR THE INFORMATION OF THE CONTRACTING OFFICER. SUCH UNIT PRICES OF SUB-ITEMS WILL NOT BE EXTENDED AS TOTALS.'. EIGHTEEN BIDS WERE RECEIVED AND OPENED ON JUNE 12. THE SECOND LOW BID WAS REJECTED AS BEING NONRESPONSIVE TO THE INVITATION SINCE THAT BIDDER CONDITIONED ITS BID ON THE USE OF GOVERNMENT FACILITIES AND SPECIAL TOOLING CONTRARY TO THE INVITATION. FURTHER CLARIFICATION WAS REQUESTED.

B-146218, SEP. 5, 1961

TO MEGADYNE ELECTRONICS, INC.:

BY LETTER DATED JUNE 28, 1961, YOU PROTESTED AGAINST THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. SC-36-039-61-922-A1 TO A BIDDER OTHER THAN YOUR COMPANY.

THE INVITATION, AS AMENDED, ISSUED ON MAY 12, 1961, REQUESTED BIDS FOR FURNISHING "RADIO SET AN/GRC-19 ( (, ETC. ITEM/S) SET FORTH ON PAGE/S) 4 THRU 15," TO BE OPENED ON JUNE 12, 1961.

BIDS WERE REQUESTED AS FOLLOWS:

"1 RADIO SET AN/GRC-19 ( (, EACH TO INCLUDE THE FOLLOWING SUB ITEMS; (RANGE QUANTITIES) * * *

"2 RECEIVER, RADIO R-392 ( ( (URR (RANGE QUANTITIES) * * * EACH RADIO RECEIVER * * * SHALL INCLUDE THE FOLLOWING SUB-ITEMS: * * *

"3 ELECTRONIC TEST FIXTURE, * * *.

"4 GAGES AND GAGE CASES * * *.

"5 ITEM DESCRIPTION LIST * * *.

"6 PROVISIONING DOCUMENTATION FOR ITEM (1) * * *.'

ITEMS 7 THROUGH 10 PROVIDED FOR INCREASES IN UNIT COST FOR PACKAGING.

WITH RESPECT TO THE COMPONENTS FOR ITEMS 1 AND 2 LISTED AS SUB ITEMS, CLAUSE NO. 27 OF THE ADDITIONAL GENERAL PROVISIONS OF THE INVITATION PROVIDED:

"PRICES OF SUB-ITEMS

"BIDS AND PROPOSALS WILL SHOW PRICES FOR END-ITEMS WHICH INCLUDE PRICES OF ALL COMPONENTS AND SUB-ITEMS. BIDDERS AND OFFERORS ARE REQUESTED TO SHOW THE UNIT PRICES OF SUB-ITEMS FOR THE INFORMATION OF THE CONTRACTING OFFICER. SUCH UNIT PRICES OF SUB-ITEMS WILL NOT BE EXTENDED AS TOTALS.'

THE INVITATION FURTHER PROVIDED THAT ONLY AGGREGATE AWARDS WOULD BE MADE FOR THE RADIO SETS AND ANCILLARY EQUIPMENT.

EIGHTEEN BIDS WERE RECEIVED AND OPENED ON JUNE 12, 1961, AND IT APPEARED THAT YOUR FIRM SUBMITTED THE LOWEST BID IN THE AGGREGATE AMOUNT OF $4,261,283.81 AND THAT DUBROW ELECTRONIC INDUSTRIES, INC., SUBMITTED THE THIRD LOW AGGREGATE BID IN THE AMOUNT OF $5,910,014.07. THE SECOND LOW BID WAS REJECTED AS BEING NONRESPONSIVE TO THE INVITATION SINCE THAT BIDDER CONDITIONED ITS BID ON THE USE OF GOVERNMENT FACILITIES AND SPECIAL TOOLING CONTRARY TO THE INVITATION.

THE CONTRACTING OFFICER REQUESTED YOUR FIRM TO CONFIRM YOUR PRICES SINCE THEY APPEARED TO BE OUT OF LINE WITH PRICES SUBMITTED BY OTHER BIDDERS. ON JUNE 13, 1961, YOUR FIRM CONFIRMED YOUR PRICES AND ADVISED:

ITEMS 1, 3 THROUGH 10 AS QUOTED STOP ITEM 2 PLUS GAGES, DOCUMENTATION, LISTS AND DRAWINGS.'

HOWEVER, SINCE IT APPEARED THAT YOUR FIRM HAD INSERTED BID AMOUNTS FOR SUBITEMS UNDER ITEMS 1 AND 2, WHICH, AS TO ITEM 1 SUBITEMS, EXCEEDED THE UNIT PRICE FOR THE END ITEM AND THAT YOUR FIRM HAD INSERTED BID AMOUNTS OPPOSITE PARAGRAPHS (A) AND (B) OF SUBITEMS 1-2 AND 1-3, COVERING THE APPLICABLE SPECIFICATIONS AND DRAWINGS, FURTHER CLARIFICATION WAS REQUESTED. THE CONTRACTING OFFICER FURTHER NOTED THAT YOUR FIRM INSERTED UNIT PRICES FOR ITEMS 1 AND 2 IN THE UNIT PRICE COLUMN BUT SHOWED SUBITEM PRICES FOR COMPONENTS OF ITEMS 1 AND 2 IN BOTH THE UNIT PRICE AND AMOUNT COLUMNS, CONTRARY TO THE LAST SENTENCE OF CLAUSE 27, QUOTED ABOVE. TELEGRAM DATED JUNE 22, 1961, YOUR FIRM RECONFIRMED YOUR BID AS FOLLOWS:

"* * * ITEM 1 IN QUANTITIES FROM 353 EACH TO 705 EACH $3500.

IN QUANTITIES FROM 706 EACH TO 1058 EACH $3200.

IN QUANTITIES FROM 1059 EACH TO 1412 EACH $3040, WHICH PRICES INCLUDE SUBITEMS 1-1 THROUGH 1-21, AND RESPECTIVE SUB-SUB ITEMS. PLEASE NOTE THE TOTALS IN ITEM 1 HAVE BEEN ROUNDED OFF AND WILL NOT CORRESPOND TO THE SUM OF THE SUB ITEMS BUT ARE LESS.

"ITEM 2 IN QUANTITIES FROM 20 EACH TO 39 EACH $1080.

IN QUANTITIES FROM 40 EACH TO 60 EACH $1050.

IN QUANTITIES FROM 61 EACH TO 80 EACH $980, WHICH PRICES INCLUDE SUBITEMS 2-1 THROUGH 2-12.

"ITEM 3 FOR THE LOT $3,000.

"ITEM 4 FOR THE LOT $15000.

"ITEM 5 FOR THE LOT $1,000.

"ITEM 6 FOR THE LOT $1,200.

"ITEM 7 FROM 177 EACH TO 353 EACH $9.40.

FROM 354 EACH TO 530 EACH $9.00.

FROM 531 EACH TO 708 EACH $8.70.

"ITEM 8 FROM 170 EACH TO 339 EACH $4.70.

FROM 340 EACH TO 509 EACH $4.50.

FROM 510 EACH TO 680 EACH $4.40.

"ITEM 9 FROM 6 EACH TO 11 EACH $4.70.

FROM 12 EACH TO 17 EACH $4.70.

FROM 18 EACH TO 24 EACH $4.70.

"ITEM 10 FROM 20 EACH TO 39 EACH $4.20.

FROM 40 EACH TO 59 EACH $4.20.

FROM 60 EACH TO 80 EACH $4.20.

"ITEMS YOU QUESTIONED APPEARING UNDER 1-2 (A) AND (B) $300 AND $8000 RESPECTIVELY AND 1-3 (A) AND (B) $500 AND $7000 RESPECTIVELY CONSIST OF OUR ENGINEERING ESTIMATES IN ORDER TO COMPLY WITH (NOTE ONE) REFERRED TO IN YOUR BID AND ARE AVERAGED AND INCLUDED REPEAT INCLUDED IN THE RESPECTIVE RANGE QUANTITY PRICES. WE WISH TO REITERATE THIS TELEGRAM CONFIRMS AND CLARIFYS BUT DOES NOT CHANGE OUR PRICE ON IFB SC-36-039-61- 922-A1 AS QUOTED AND SUPERSEDES ANY OTHER COMMUNICATION WHICH MAY HAVE RESULTED FROM MISINTERPRETATION.'

THEREAFTER, ON JUNE 24, 1961, YOUR BID WAS REJECTED AS NONRESPONSIVE. AWARD WAS MADE TO DUBROW ON JUNE 24, 1961, IN THE AMOUNT OF $5,910,014.07. AFTER A CAREFUL CONSIDERATION OF THE RECORD WE BELIEVE THAT THE AWARD IS NOT SUBJECT TO QUESTION BY OUR OFFICE.

IN OUR OPINION, THE BID AS SUBMITTED CREATED A SUBSTANTIAL DOUBT WHETHER YOUR FIRM INTENDED TO FURNISH THE SUBITEMS AS SEPARATE ITEMS OF BID EXPENSE OR WHETHER IT WAS INTENDED TO INCLUDE SUCH SUBITEMS AS PART OF THE COST OF THE END ITEMS. IN OTHER WORDS, IT COULD NOT BE ASCERTAINED WITH ANY DEGREE OF CERTAINTY THAT YOUR FIRM, IF AWARDED THE CONTRACT, WOULD HAVE BEEN LEGALLY REQUIRED TO FURNISH THE END ITEMS AND SUBITEMS AT THE PRICES QUOTED FOR THE END ITEMS. THE INVITATION CLEARLY CONTEMPLATED AN AWARD OF A CONTRACT UNDER WHICH THE GOVERNMENT WOULD BE OBLIGATED ONLY TO PURCHASE THE END ITEMS, TOGETHER WITH THE RELATED SUBITEMS, AT THE COMPOSITE PRICES QUOTED BY THE SUCCESSFUL BIDDER FOR THE END ITEMS.

IT IS FUNDAMENTAL THAT THE STATUTE RELATING TO COMPETITIVE BIDS FOR GOVERNMENT CONTRACTS CONTEMPLATES THE SUBMISSION OF BIDS WHICH ARE FIRM AND DEFINITE IN RESPECT TO THE PRICE TO BE PAID. WE HAVE CONSISTENTLY HELD THAT BIDS SO QUALIFIED AS TO RENDER THE CONTRACT PRICE INDEFINITE ARE FOR REJECTION FOR UNCERTAINTY. 19 COMP. GEN. 614; 37 ID. 780. WE BELIEVE THAT A BID, AS HERE, WHICH WAS SO UNCERTAIN AS TO THE INTENDED SCOPE OF THE PRICES BID AS TO REQUIRE THE CONTRACTING OFFICER TO REQUEST THE BIDDER TO CLARIFY AND AMPLIFY THE BID--- AFTER ALL BIDS WERE PUBLICLY EXPOSED--- SHOULD NOT BE CONSIDERED FOR AWARD ESPECIALLY WHEN THE CONTRACTING OFFICER STILL REMAINED IN DOUBT AFTER CLARIFICATION.

MOREOVER, EVEN IF IT BE CONCLUDED THAT YOUR FIRM'S BID, AS EXPLAINED AND CLARIFIED AFTER OPENING, COULD HAVE BEEN CONSIDERED REASONABLY FIRM AND DEFINITE AS TO PRICE, WE BELIEVE THAT CONSIDERATION OF YOUR FIRM'S BID FOR AWARD WOULD HAVE BEEN PRECLUDED UNDER THE ESTABLISHED PRINCIPLE THAT BIDDERS MAY NOT VARY OR MODIFY THEIR BIDS AFTER OPENING IN A MATERIAL RESPECT TO THE PREJUDICE OF OTHER BIDDERS. 38 COMP. GEN. 612; 31 ID. 660. HAD AWARD BEEN MADE TO YOUR FIRM ON THE BASIS OF THE END ITEM PRICES SPECIFIED IN THE BID WITHOUT ANY CLARIFICATION YOUR FIRM WOULD HAVE HAD THE OPTION OF ACCEPTING SUCH AWARD OR, IF THE BID WERE IMPROVIDENT, OF ALLEGING THAT THE BID ALSO INCLUDED THE SUBITEM PRICES QUOTED IN THE BID AMOUNT COLUMN. THIS IS CONTRARY TO THE PRINCIPLE THAT NO BIDDER HAS A RIGHT, AFTER OPENING, TO ANOTHER OPPORTUNITY TO BID IN DEROGATION OF THE RIGHTS OF OTHER BIDDERS. 34 COMP. GEN. 82, 84; 35 ID. 33, 38; 36 ID. 705, 707.

IN ADDITION TO THE FOREGOING, THE RECORD SHOWS THAT IMMEDIATELY AFTER OPENING OF THE BIDS A PREAWARD SURVEY WAS MADE REGARDING YOUR FIRM'S ABILITY TO PERFORM THE CONTRACT IF AWARDED TO IT. IT WAS DETERMINED BY THE CONTRACTOR EVALUATION BOARD THAT YOUR FIRM LACKED THE CAPACITY AND CREDIT TO PERFORM THE CONTRACT. SINCE YOUR FIRM IS A SMALL BUSINESS CONCERN THE CONTRACTING OFFICE'S DETERMINATION REGARDING YOUR ABILITY TO PERFORM THE CONTRACT WOULD NOT, OF COURSE, BE FINAL. HOWEVER, SINCE IT WAS DETERMINED THAT YOUR BID WAS NONRESPONSIVE TO THE INVITATION NO ACTION WAS TAKEN, AND WE AGREE NONE WAS NECESSARY, IN SUCH CIRCUMSTANCES, TO REFER THE MATTER OF YOUR RESPONSIBILITY TO THE SMALL BUSINESS ADMINISTRATION FOR A DETERMINATION AS TO WHETHER A CERTIFICATE OF COMPETENCY WOULD BE ISSUED.

ACCORDINGLY, AND IN VIEW OF THE FACT THAT THE INSTANT PROCUREMENT IS REPORTED TO BE ESSENTIAL TO NATIONAL DEFENSE AND WOULD BE REQUIRED IMMEDIATELY IN THE EVENT OF AN EMERGENCY, WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE AWARD OF THE CONTRACT TO DUBROW ELECTRONIC INDUSTRIES, INC. ..END :