B-146374, SEPTEMBER 20, 1961, 41 COMP. GEN. 203

B-146374: Sep 20, 1961

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IS IN CONFORMITY WITH THE OPTION PROVISIONS IN PARAGRAPH 1-1504 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION. AN AWARD TO A BIDDER WHO WAS LOW ON 10 UNITS BUT HIGH ON 30 UNITS IN PREFERENCE TO ANOTHER BIDDER WHO WAS HIGH ON 10 UNITS BUT LOW ON 30 UNITS WAS VALID. IT BEING IMPROPER TO ACCEPT A HIGH BID UPON THE BASIS THAT IT WILL BECOME THE LOW BID UPON THE OCCURRENCE OF A CONTINGENCY THAT MIGHT OR MIGHT NOT ARISE. TO CLARIFY HIS BID AFTER BID OPENING TO SHOW THAT THE LOWER PRICE WAS INTENDED TO APPLY ON ALL UNITS WHEN MORE THAN 5 UNITS WERE PROCURED AND THUS BECOME THE LOW BIDDER ON THE QUANTITY OF 10 UNITS WHICH THE PROCURING ACTIVITY ELECTED TO PURCHASE WOULD BE TANTAMOUNT TO GIVING THE BIDDER A SECOND CHANCE TO BID AFTER BIDS ARE OPENED AND THEREFORE WOULD BE IMPROPER.

B-146374, SEPTEMBER 20, 1961, 41 COMP. GEN. 203

BIDS - EVALUATION - OPTIONS - ADDITIONAL QUANTITIES--- BIDS - EVALUATION - OPTIONS - ADDITIONAL QUANTITIES UNDER AN INVITATION WHICH REQUESTED BIDS ON AN ESTIMATED QUANTITY OF 30 UNITS BUT WHICH PROVIDED THAT THE GOVERNMENT WOULD NOT BE OBLIGATED TO PURCHASE MORE THAN 10 UNITS, EVALUATION OF BIDS ON THE BASIS OF THE LOWEST PRICE OFFERED ON 10 UNITS, THE QUANTITY WHICH THE PROCURING ACTIVITY ELECTED TO PURCHASE, IS IN CONFORMITY WITH THE OPTION PROVISIONS IN PARAGRAPH 1-1504 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION; THEREFORE, AN AWARD TO A BIDDER WHO WAS LOW ON 10 UNITS BUT HIGH ON 30 UNITS IN PREFERENCE TO ANOTHER BIDDER WHO WAS HIGH ON 10 UNITS BUT LOW ON 30 UNITS WAS VALID, IT BEING IMPROPER TO ACCEPT A HIGH BID UPON THE BASIS THAT IT WILL BECOME THE LOW BID UPON THE OCCURRENCE OF A CONTINGENCY THAT MIGHT OR MIGHT NOT ARISE. TO PERMIT A BIDDER WHO QUOTED A FIRM PRICE ON 5 UNITS AND A LOWER PRICE ON UNITS IN EXCESS OF FIVE UP TO A MAXIMUM OF 30 UNITS IN RESPONSE TO AN INVITATION THAT REQUESTED BIDS ON A MAXIMUM ESTIMATED QUANTITY OF 30 UNITS, BUT OBLIGATED THE GOVERNMENT TO PURCHASE ONLY 10 UNITS, TO CLARIFY HIS BID AFTER BID OPENING TO SHOW THAT THE LOWER PRICE WAS INTENDED TO APPLY ON ALL UNITS WHEN MORE THAN 5 UNITS WERE PROCURED AND THUS BECOME THE LOW BIDDER ON THE QUANTITY OF 10 UNITS WHICH THE PROCURING ACTIVITY ELECTED TO PURCHASE WOULD BE TANTAMOUNT TO GIVING THE BIDDER A SECOND CHANCE TO BID AFTER BIDS ARE OPENED AND THEREFORE WOULD BE IMPROPER.

TO DUO-MATIC, INC., SEPTEMBER 20, 1961:

BY LETTER DATED JULY 7, 1961, YOU PROTESTED AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. ORD-36-038-61 SP- 460, ISSUED ON JUNE 6, 1961, BY THE FRANKFORD ARSENAL FOR A QUANTITY OF " BALLISTIC COMPUTER M14.'

THE INVITATION REQUESTED BIDS FOR FURNISHING A MAXIMUM ESTIMATED QUANTITY OF 30 COMPUTERS AND PROVIDED ON PAGES 3 AND 4:

ESTIMATED QUANTITY AND IMMEDIATE REQUIREMENTS: THE QUANTITY OF SUPPLIES SET OUT HEREINBELOW IS AN ESTIMATE ONLY OF THE GOVERNMENT'S REQUIREMENTS DURING THE TERM OF THE CONTRACT AS HEREINAFTER DEFINED. THE GOVERNMENT HAS AN IMMEDIATE REQUIREMENT OF THE QUANTITY SET FORTH IN DELIVERY ORDER NO. 1 HEREINBELOW AND MADE A PART HEREOF. AS THE GOVERNMENT'S FUTURE REQUIREMENTS MATERIALIZE, ADDITIONAL DELIVERY ORDERS WILL BE ISSUED UNDER ALL THE TERMS AND CONDITIONS OF THE CONTRACT. THE GOVERNMENT'S REQUIREMENTS AS SET FORTH IN THE INVITATION FOR BIDS REFER ONLY TO THE GOVERNMENT'S REQUIREMENTS AS AUTHORIZED TO BE PROCURED BY FRANKFORD ARSENAL. ALL THE GENERAL PROVISIONS OF THIS CONTRACT ARE EQUALLY APPLICABLE TO ANY FUTURE DELIVERY ORDER ISSUED HEREINAFTER WITHOUT NECESSITY OF BEING ATTACHED THERETO AND MADE A PART THEREOF.

CONTRACTOR'S UNDERTAKING: IN CONSIDERATION OF THE GOVERNMENT'S AGREEMENT TO PLACE ITS FUTURE REQUIREMENTS FOR THE PERIOD OF THIS CONTRACT WITH THE CONTRACTOR, THE CONTRACTOR AGREES TO ACCEPT ANY FUTURE DELIVERY ORDER ISSUED BY THE GOVERNMENT WITHIN THE TERM OF THE CONTRACT, AS HEREINBELOW DEFINED, AND UNDER THE TERMS AND CONDITIONS OF THE CONTRACT. HOWEVER, IT IS UNDERSTOOD AND AGREED THAT THE GOVERNMENT IS NOT OBLIGATED TO ISSUE ANY FUTURE DELIVERY ORDER SHOULD NO REQUIREMENT ARISE. UNLESS OTHERWISE AGREED TO BY THE CONTRACTING PARTIES THERETO, FUTURE DELIVERY ORDERS WILL CALL FOR A MINIMUM QUANTITY AND DELIVERY AT THE RATE SET OUT UNDER PARAGRAPH ENTITLED " MINIMUM QUANTITIES AND RATE OF DELIVERY OF FUTURE DELIVERY ORDERS.'

QUANTITY TO BE BID UPON: BIDS SHALL NOT BE SUBMITTED FOR ANY QUANTITY LESS THAN THE MAXIMUM ESTIMATED QUANTITY.

FOUR BIDS WERE RECEIVED AND OPENED ON JUNE 26, 1961, AND IT APPEARED THAT THE AIRTEMP DIVISION, CHRYSLER CORPORATION, SUBMITTED THE LOWEST BID IN THE AMOUNT OF $6,826.84 PER UNIT OR A TOTAL OF $204,805.20 FOR 30 UNITS. THE BID OF YOUR FIRM AS EXTRACTED FROM PAGE 5 OF THE INVITATION WAS AS FOLLOWS:

CHART

QUANTITY

( NUMBER OF UNIT

SUPPLIERS OR SERVICES UNITS) UNIT PRICE AMOUNT BALLISTIC COMPUTER M14, ORD MAXIMUM PART NO. 8602750 IN ESTIMATED ACCORDANCE WITH DRAWING NO. QUANTITY F8602750, SPECIFICATION NO. MIL-C-45133A (1), AND ALL DATA LISTED ON TECHNICAL DATA PACKAGE LIST NO. 8602750 DATED 3/2/61, FEDERAL STOCK NO. 1220 622-4934, ( TRANSACTION-1ANALYSIS CODE 1116).

30 EACH EACH ( NO

BID) MINIMUM QUANTITIES AND

RATE OF DELIVERY OF FUTURE DELIVERY

ORDERS: MINIMUM QUANTITY FIRST FIVE (5) EACH$10,172.30 $50,861.50

SIX (6) TO THIRTY (30) EACH $5,913.10 EACH

AWARD OF DELIVERY ORDER NO. 1--- 10 UNITS--- WAS MADE TO AIRTEMP DIVISION ON JUNE 30, 1961, AT THEIR BID PRICE OF $6,826.84 PER UNIT OR $68,268.40. UPON REVIEW OF THE RECORD BEFORE US, WE BELIEVE THAT THE AWARD WAS PROPER AND NOT SUBJECT TO QUESTION BY OUR OFFICE.

YOU PROTEST AGAINST THE AWARD ON THE FOLLOWING BASES:

1. BIDS SHOULD HAVE BEEN EVALUATED ON THE BASIS OF THE MAXIMUM ESTIMATED QUANTITY OF 30 UNITS;

2. YOUR BID WAS FOR 10 UNITS AT $5,913.10 EACH AS COMPARED TO THE $6,826.84 BID BY AIRTEMP DIVISION;

3. AIRTEMP HAD AT THEIR DISPOSAL GOVERNMENT TOOLING WHICH WAS NOT TAKEN INTO CONSIDERATION IN BID EVALUATION; AND

4. AIRTEMP'S BID WAS NONRESPONSIVE SINCE THEIR BID WAS NOT PROPERLY SIGNED.

SINCE THE INVITATION CONTEMPLATED ONLY AN AWARD FOR 10 UNITS UNDER DELIVERY ORDER NO. 1, THE BID EVALUATION WAS BASED ON A DETERMINATION OF THE LOWEST PRICE, OTHER FACTORS CONSIDERED, FOR THOSE 10 UNITS AND NOT ON THE 30 MAXIMUM ESTIMATED QUANTITY. IN VIEW THEREOF, BIDS OF THE TWO LOWEST BIDDERS WERE EVALUATED AS FOLLOWS:

CHART

DUO-MATIC 5 AT $10,172.30 $50,861.50

5 AT $5,913.10 29,565.50

80,427.00

AIRTEMP 10 AT $6,826.84 68,268.40

WE THINK THIS EVALUATION WAS CORRECT. SINCE THE REQUIREMENTS OF THE GOVERNMENT WERE UNCERTAIN, THE INVITATION SPECIFICALLY PROVIDED THAT THE QUANTITY OF 30 UNITS WAS AN "ESTIMATED" QUANTITY ONLY AND THE GOVERNMENT WAS NOT OBLIGATED TO ORDER ANY UNITS IN ADDITION TO THE 10 UNITS CALLED FOR BY DELIVERY ORDER NO. 1. WE HAVE HELD IT TO BE IMPROPER TO ACCEPT A HIGH BID UPON THE BASIS THAT IT WILL BECOME THE LOW BID UPON THE OCCURRENCE OF A CONTINGENCY THAT MIGHT OR MIGHT NOT ARISE. 15 COMP. GEN. 1136. MOREOVER, PARAGRAPH 1-1504 (B), ARMED SERVICES PROCUREMENT REGULATION, PROVIDES:

* * * WHERE IT IS ANTICIPATED THAT THE GOVERNMENT MAY ELECT TO EXERCISE THE OPTION AT TIME OF AWARD, INVITATIONS FOR BIDS AND REQUESTS FOR PROPOSALS SHALL STATE THAT IF THE GOVERNMENT DOES SO ELECT, EVALUATION WILL BE MADE ON THE BASIS OF TOTAL QUANTITY TO BE AWARDED, INCLUDING THE OPTION QUANTITY, BUT IF THE GOVERNMENT DOES NOT SO ELECT, EVALUATION WILL BE MADE ON THE BASIS OF THE QUANTITY TO BE AWARDED EXCLUSIVE OF THE OPTION QUANTITY.

SINCE THE PROCURING ACTIVITY DID NOT ELECT TO PURCHASE THE ENTIRE 30 UNITS BUT, AS INDICATED BY DELIVERY ORDER NO. 1, ELECTED TO AWARD 10 UNITS ONLY, THE METHOD OF EVALUATION EMPLOYED APPEARS TO HAVE BEEN IN CONFORMITY WITH THE ASPR PROVISION CITED ABOVE.

WE CANNOT AGREE WITH YOUR CONTENTION THAT THE BID AS SUBMITTED BY YOUR FIRM MUST BE INTERPRETED SO AS TO APPLY THE $5,913.10 BID TO THE 10 UNITS COVERED BY DELIVERY ORDER NO. 1. HAVING REGARD FOR THE PLAIN TERMS OF YOUR BID, WE THINK THE ONLY REASONABLE CONSTRUCTION THEREOF IS THAT YOUR BID PRICE OF $10,172.30 APPLIED TO THE "FIRST" 5 UNITS AND THAT YOUR PRICE OF $5,913.10 WAS TO BE APPLICABLE ONLY TO THOSE UNITS ORDERED IN EXCESS OF FIVE UP TO A MAXIMUM OF 30 UNITS. YOUR STATEMENT THAT YOU BID THE HIGHER PRICE FOR THE FIRST 5 UNITS ONLY TO PROTECT YOURSELVES IN THE EVENT THE GOVERNMENT EXERCISED ITS RIGHT TO PURCHASE ONLY 5 UNITS CANNOT BE RECONCILED WITH THE FACTS. THE GOVERNMENT HAD NO SUCH RIGHT SINCE BY DELIVERY ORDER NO. 1, IT WAS LEGALLY OBLIGATED TO PURCHASE 10 UNITS AND UPON AWARD THE CONTRACTOR COULD NOT BE COMPELLED TO FURNISH A LESSER NUMBER.

WITH RESPECT TO CONTENTION NO. 3, THE PROCUREMENT AGENCY HAS STATED THAT:

* * * NO DEVIATION INDICATED NOR INTENT TO USE GFP ( EQUIP OR TOOLING) INDICATED OR REQ BY CHRYSLER NOR WILL AUTH TO DO SO BE PERMITTED BY THIS ARSENAL. * * *

CONCERNING THE SIGNATURE ON AIRTEMP'S BID, IT IS NOTED THAT THE BID WAS SIGNED BY "E. E. CONNELLY, COORDINATOR, GOVERNMENT CONTRACTS.' THE RECORD BEFORE US CONTAINS A CERTIFICATE OVER THE SIGNATURE OF THE ASSISTANT COMPTROLLER, CHRYSLER CORPORATION, THAT E. E. CONNELLY WAS AUTHORIZED TO SIGN THE BID ON BEHALF OF THE CORPORATION.

THEREFORE, WE SEE NO FACTUAL BASIS TO SUPPORT YOUR CONTENTIONS 3 AND 4.

WHILE YOU ADVISED THE PROCUREMENT AGENCY--- AFTER BID OPENING BUT PRIOR TO AWARD--- THAT YOUR UNIT BID PRICE OF $5,913.10 WAS INTENDED TO APPLY WHEN ANY QUANTITY IN EXCESS OF 5 UNITS WAS ORDERED, ANY NEGOTIATIONS WITH YOUR FIRM TO CLARIFY SUCH INTENTION WOULD HAVE BEEN IMPROPER SINCE NO BIDDER MAY BE AFFORDED A SECOND CHANCE TO BID AFTER BIDS ARE OPENED. COMP. GEN. 82; 35 ID. 33.