B-146303, OCT. 9, 1961

B-146303, OCT. 9, 1961

TO THE VAN NORMAN MACHINE COMPANY:

WE REFER TO THE LETTER OF JUNE 30, 1961, AND SUBSEQUENT CORRESPONDENCE, INCLUDING LETTER OF AUGUST 31, 1961, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS NO. ORD-33-079-61-231.

THE INVITATION WAS ISSUED BY THE ROSSFORD ORDNANCE DEPOT, DEPARTMENT OF THE ARMY, ON APRIL 12, 1961, AND CALLED FOR BIDS ON FURNISHING 38 GRINDING MACHINES, VALVE FACE, HEAVY DUTY, FLOOR MOUNTED, WET TYPE, IN ACCORDANCE WITH FEDERAL SPECIFICATION 00-G-686A DATED JULY 17, 1959, TYPE II WITH CERTAIN EXCEPTIONS. BIDS WERE OPENED ON MAY 12, 1961, AND THREE BIDS WERE RECEIVED. THE LOW BID WAS SUBMITTED BY K. O. LEE CO. AT $1,795 PER UNIT BUT THAT BID WAS REJECTED AS NONRESPONSIVE TO THE SPECIFICATION REQUIREMENTS. VAN NORMAN BID AT $2,250 AND WRIGHT TOOL COMPANY BID A UNIT PRICE OF $2,260 EACH,"WITH PREPRODUCTION SAMPLE AND TEST RUNS" AND $1,995 CH,"WITHOUT PREPRODUCTION SAMPLE AND TEST RUNS.'

THE GOVERNING SPECIFICATION (FED.SPEC. 00-G-686A, JULY 17, 1959), PARAGRAPH 3.1, REQUIRED A GRINDING MACHINE SAMPLE FOR PREPRODUCTION INSPECTION ONLY WHEN SPECIFIED. THIS INVITATION DID NOT SPECIFY THAT A SAMPLE WAS REQUIRED. EACH GRINDING MACHINE SUBMITTED FOR ACCEPTANCE WAS REQUIRED TO PASS AN ACCEPTANCE EXAMINATION TO DETERMINE IF THE MACHINE WAS FREE OF THE DEFECTS LISTED IN PARAGRAPH 4.3.2 OF THE SPECIFICATION. ADDITION, ACCEPTANCE TESTS WERE SPECIFIED IN PARAGRAPH 4.3.3 AS FOLLOWS:

"4.3.3 ACCEPTANCE TESTS.--- EACH GRINDING MACHINE SUBMITTED FOR ACCEPTANCE SHALL BE SUBJECTED TO THE CHUCK CONCENTRICITY TEST SPECIFIED IN 4.4.2.1. FROM THE SAMPLES WHICH HAVE PASSED THE ACCEPTANCE EXAMINATION SPECIFIED IN 4.3.1, SAMPLES FOR ACCEPTANCE TESTS SHALL BE SELECTED IN ACCORDANCE WITH INSPECTION LEVEL II OF MILITARY STANDARD MIL-STD-105. EACH SAMPLE SHALL BE SUBJECTED TO TESTS (A), (B) AND (C) LISTED BELOW. ACCEPTANCE OR REJECTION SHALL BE BASED ON AN AQL OF 2.5 PERCENT DEFECTIVE.

"/A) PRODUCTION TEST (SEE 4.4.2.2 OR 4.4.2.3) * * *.

"/B) VALVE STEM GRINDING TEST (SEE 4.4.3).

"/C) DIELECTRIC TEST (SEE 4.4.4).'

WRIGHT TOOL SUBMITTED WITH ITS BID A LETTER DATED MAY 11, 1961, WHICH STATES IN PART AS OLLOWS:

"SINCE WE HAVE PREVIOUSLY SUPPLIED THE SAME IDENTICAL ITEM AND HAVE COMPLIED WITH THE PREPRODUCTION SAMPLE, PERFORMANCE AND PRODUCT CHARACTERISTICS, COMPONENT PARTS, FUNGUS CONTROL, SAMPLING, INSPECTION AND TEST PROCEDURES, WE ARE OFFERING THE GOVERNMENT A LOWER PRICE FOR CONSIDERATION IN WAIVING THE PREPRODUCTION SAMPLE AND TEST RUNS.

"MODEL 682-L MACHINE WITH PREPRODUCTION SAMPLE AND TEST RUNS AS SPECIFIED IN FEDERAL SPECIFICATION OO-G-686A, DATED 17 JULY 1959, TYPE II.

$2,260.00 EACH NET

"MODEL 682-L MACHINE WITHOUT PREPRODUCTION SAMPLE AND TEST RUNS AS SPECIFIED IN FEDERAL SPECIFICATION OO-G-686A, DATED 17 JULY 1959, TYPE II.

$1,995.00 EACH NET

"ALL OTHER REQUIREMENTS CITED IN THE IFB AND FEDERAL SPECIFICATIONS OO-G- 686A, DATED 17 JULY 1959, TYPE II WILL BE COMPLIED WITH 100 PERCENT.'

BY LETTER OF MAY 19, 1961 (AFTER THE BID OPENING), WRIGHT TOOL STATED THAT:

"I WISH TO CLARIFY THE FOLLOWING STATEMENT: "WITHOUT PREPRODUCTION SAMPLE AND TEST RUNS.'

"THE ABOVE STATEMENT SHOULD READ AS FOLLOWS: "WITHOUT PREPRODUCTION SAMPLE AND PREPRODUCTION TEST RUNS.'"

ON JUNE 21, 1961, A CONTRACT WAS AWARDED TO WRIGHT TOOL COMPANY AT $1,995 PER UNIT, FOR A TOTAL PRICE OF $75,810.

YOU CONTEND THAT THE WRIGHT TOOL BID WAS IN THE ALTERNATIVE AND THEREFORE UNRESPONSIVE, SINCE THE INVITATION MADE NO REFERENCE TO PREPRODUCTION SAMPLES, NOR PERMITTED THE DELETION OF ANY TESTING REQUIREMENTS. YOU SAY THAT THE WRIGHT TOOL BID OF $1,995 PER UNIT "WITHOUT PREPRODUCTION SAMPLE AND TEST RUNS," WAS INTENDED TO ELIMINATE NOT ONLY A PREPRODUCTION SAMPLE WHICH WAS NOT REQUIRED ANYWAY, BUT ALSO TEST RUNS ON ALL 38 MACHINES WHICH ARE REQUIRED. FOR OTHERWISE, THE WORDS "TEST RUNS" WOULD BE REDUNDANT. AT BEST, YOU CONTEND, THE PHRASE IN QUESTION IS SO AMBIGUOUS AS TO GIVE THE BIDDER AN OPPORTUNITY TO "EXPLAIN" ITS BID AFTER THE BID OPENING. THUS, IF WRIGHT TOOL HAD BID $2,240 FOR ITS HIGH BID INSTEAD OF $2,260, IT WOULD HAVE BEEN IN A POSITION TO INSIST ON AN AWARD AT THAT PRICE (WHICH IS LOWER THAN THE VAN NORMAN BID OF $2,250) BY INSISTING THAT ITS BID OF $1,995 WAS CONDITIONED ON THE ELIMINATION OF TESTS ON ALL THE UNITS. YOU SAY FURTHER, THAT THE DIFFERENCE IN PRICE BETWEEN WRIGHT TOOL'S TWO BIDS ($2,260 LESS $1,995 ON 38 UNITS, OR A TOTAL OF $10,070) DOES NOT MAKE SENSE ECONOMICALLY BY MERELY ELIMINATING THE PREPRODUCTION SAMPLE AND THE TESTS ON THAT MACHINE ALONE, SINCE THIS IS NOT A MACHINE WHICH MUST BE DEVELOPED FOR THIS PARTICULAR CONTRACT.

THE PROHIBITION AGAINST "ALTERNATE" BIDS IN STANDARD FORM 33 (A PART OF THE SUBJECT INVITATION) FORBIDS CONSIDERATION OF BIDS WHICH OFFER SOMETHING OTHER THAN THAT WHICH IS CALLED FOR BY THE SPECIFICATIONS. COMP. GEN. 499. IF THE WRIGHT TOOL BID OF $1,995 PER UNIT WHICH WAS ACCEPTED MERELY ELIMINATES THE PREPRODUCTION SAMPLE, AND TEST RUNS ON THAT MACHINE ALONE, THAT WOULD NOT MAKE IT AN "ALTERNATE" BID SINCE A SAMPLE WAS NOT REQUIRED. WE THINK THIS IS ALL THAT WAS ELIMINATED BY THE ACCEPTED BID. IN OUR VIEW, THE WORDS "TEST RUNS" IN QUESTION HERE, MOST REASONABLY REFER TO THE TESTS REQUIRED BY THE GOVERNING SPECIFICATIONS ON A PREPRODUCTION SAMPLE. WITH REGARD TO THE PRICE DIFFERENTIAL OF $10,070 (BETWEEN WRIGHT TOOL'S TWO BIDS), THE CONTRACTING OFFICE SUGGESTS THAT THE DIFFERENTIAL MAY BE EXPLAINED ON THE BASIS THAT WHILE WRIGHT WOULD OFFER A MACHINE IT CURRENTLY HAS IN PRODUCTION AT A PRICE OF $1,995, IT WOULD WANT A CONSIDERABLY HIGHER PRICE UNDER A CONTRACT WHERE A PREPRODUCTION SAMPLE AND TEST RUNS WERE REQUIRED, WITH POSSIBLE RESULTING CHANGES IN THE MACHINE AND TOOLING PROCESS. IN THIS REGARD, WE ARE ADVISED THAT WRIGHT WAS RECENTLY AWARDED AN ARMY CONTRACT FOR THE SAME MACHINE. THE PERTINENT CONSIDERATION IS WHETHER THE GOVERNMENT ACCEPTED A BID CONFORMING TO THE TERMS OF THE INVITATION AND SPECIFICATIONS CONTAINED THEREIN. ON ITS FACE,THE WRIGHT TOOL BID OF $1,995 PER UNIT DOES OFFER TO MEET THE INVITATION REQUIREMENTS. IN THIS RESPECT, WE NOTE THAT IN ITS LETTER OF MAY 19, 1961, WRIGHT TOOL COMPANY CLEARLY SIGNIFIED ITS INTENT TO ELIMINATE THE SAMPLE MACHINE AND ONLY THE TESTS ON THAT ..END :