B-147041, OCT. 9, 1961

B-147041: Oct 9, 1961

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE INVITATION PROVIDED (PAGE 5 OF 23) UNDER THE HEADING "BASIS OF AWARD" THAT: "AWARD WILL BE MADE TO THE BIDDER WHOSE TOTAL AGGREGATE COST RESULTS IN THE LOWEST BID. THE TOTAL AGGREGATE COST WILL BE DETERMINED BY APPLYING THE PRICES QUOTED IN THE SCHEDULE OF PRICES TO THE UNITS OF PRODUCTION LISTED BELOW WHICH ARE BELIEVED REPRESENTATIVE OF THE VOLUME OF WORK WHICH MAY BE ORDERED DURING A 6-MONTH PERIOD BUT ARE NOT TO BE CONSTRUED AS A GUARANTEE OF THE VOLUME OF WORK WHICH WILL BE ORDERED DURING A SIMILAR PERIOD. BIDDERS WERE INSTRUCTED TO FILL OUT AND RETURN PAGES 8 THROUGH 23 OF THE INVITATION. BIDDERS WERE INSTRUCTED (PAGE 3) THAT THE CONTRACTOR MUST BE IN A POSITION TO ACCEPT COPY AND SUBMIT PROOFS THROUGHAN OFFICE OR AGENT IN CHICAGO.

B-147041, OCT. 9, 1961

TO THE LAKE SHORE ELECTROTYPE DIVISION, ELECTROGRAPHIC CORPORATION:

WE REFER TO YOUR TELEFAX OF AUGUST 24, 1961, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS NO. 3574, ISSUED BY THE GOVERNMENT PRINTING OFFICE.

THE RECORD INDICATES THAT ON JULY 28, 1961, THE GOVERNMENT PRINTING OFFICE MAILED AN INVITATION FOR BIDS TO QUALIFIED FIRMS, TO OBTAIN BID PRICES ON MATS, PROOFS, AND ADVERTISING AND PROMOTIONAL NEWSPAPER MATERIAL TO BE ORDERED DURING THE PERIOD SEPTEMBER 1, THROUGH AUGUST 31, 1962. THE INVITATION PROVIDED (PAGE 5 OF 23) UNDER THE HEADING "BASIS OF AWARD" THAT:

"AWARD WILL BE MADE TO THE BIDDER WHOSE TOTAL AGGREGATE COST RESULTS IN THE LOWEST BID. THE TOTAL AGGREGATE COST WILL BE DETERMINED BY APPLYING THE PRICES QUOTED IN THE SCHEDULE OF PRICES TO THE UNITS OF PRODUCTION LISTED BELOW WHICH ARE BELIEVED REPRESENTATIVE OF THE VOLUME OF WORK WHICH MAY BE ORDERED DURING A 6-MONTH PERIOD BUT ARE NOT TO BE CONSTRUED AS A GUARANTEE OF THE VOLUME OF WORK WHICH WILL BE ORDERED DURING A SIMILAR PERIOD. THE ITEM DESIGNATIONS USED HEREIN CORRESPOND TO THOSE USED IN THE SCHEDULE OF PRICES.'

BIDDERS WERE INSTRUCTED TO FILL OUT AND RETURN PAGES 8 THROUGH 23 OF THE INVITATION, WHICH SET FORTH THE SPECIFICATIONS AND SCHEDULE OF PRICES. PAGES 3 THROUGH 5 CONTAINED GENERAL TERMS AND CONDITIONS, AND PAGES 5 THROUGH 7 LISTED THE UNITS OF PRODUCTION OF THE SCHEDULE OF ITEMS USED IN THE AWARD EVALUATION. BIDDERS WERE INSTRUCTED (PAGE 3) THAT THE CONTRACTOR MUST BE IN A POSITION TO ACCEPT COPY AND SUBMIT PROOFS THROUGHAN OFFICE OR AGENT IN CHICAGO, ILLINOIS, AND NEW YORK CITY, SINCE THE MAJORITY OF THE WORK IS EXPECTED TO BE HANDLED, AS TO COPY WRITING, PREPARATION OF ART, CONSULTATIONS CONCERNING TYPE FACES, LAYOUT, PHOTOENGRAVINGS, ETC., BY THE ADVERTISING COUNCIL, INC., FOR THE TREASURY DEPARTMENT BOND CAMPAIGN IN CHICAGO, AND SOME OTHER COPY WORK IS EXPECTED TO BE HANDLED IN NEW YORK CITY. THE MATERIALS MANUFACTURED UNDER THE SPECIFICATIONS ARE FOR DISTRIBUTION TO DAILY AND WEEKLY NEWSPAPERS, SHOPPING NEWS SERVICES, ADVERTISING CLUBS, ETC., AND THE SPECIFICATIONS (PAGE 23) REQUIRED BIDDERS TO STATE THEIR SOURCE OF SUPPLY ON THE EAST AND WEST COASTS, AND IN THE CENTRAL PART OF THE UNITED STATES, TO FACILITATE THE MAILING OF MATS. PRICES QUOTED ARE F.O.B. CONTRACTOR'S CITY.

BIDS WERE OPENED ON AUGUST 11, 1961, AND 6 COMPLETED BIDS WERE RECEIVED. WHILE ATTEMPTING TO PREPARE AN ABSTRACT OF BIDS FOR DETERMINING THE LOW BIDDER, THE CONTRACTING OFFICER CONCLUDED FROM THE BID PRICES SUBMITTED BY THE FIRM OF WESTCOTT AND THOMSON, INC., OF PHILADELPHIA, PENNSYLVANIA, THAT THE BIDDER HAD QUOTED PRICES ON THE ITEMS CONSISTING OF ITS UNIT PRICE MULTIPLIED BY THE UNITS OF PRODUCTION FOR THAT UNIT AS LISTED UNDER THE "BASIS OF AWARD," RATHER THAN THE UNIT PRICE OF EACH ITEM. WHERE THE ITEM WAS NOT INCLUDED AS A BID EVALUATION FACTOR, THE BIDDER QUOTED UNIT PRICES, MOSTLY LOWER THAN THE PRICES QUOTED BY THE OTHER BIDDERS.

ON AUGUST 23, 1961, THE CONTRACTING OFFICER TELEPHONED WESTCOTT AND THOMSON, ASKING FOR AN EXPLANATION OF ITS BID. THE FIRM'S VICE PRESIDENT STATED THAT ITS UNIT PRICES WERE MULTIPLIED BY THE "BASIS OF AWARD" FIGURES AND THAT THE TOTALS WERE ENTERED INTO ITS SUBMITTED SCHEDULE OF PRICES. THIS STATEMENT WAS CONFIRMED IN A LETTER DATED AUGUST 23, 1961, FROM THE BIDDER. THE LETTER STATED THAT THE BASIS OF AWARD FIGURE SHOULD BE DIVIDED INTO ITS TOTAL FIGURE TO GIVE THE PRICE PER UNIT FOR EACH ITEM. ACTING ON THIS BASIS, THE CONTRACTING OFFICER EVALUATED WESTCOTT'S BID AT $26,604.56. THE BID FROM LAKE SHORE ELECTROTYPE CORPORATION OF CHICAGO, ILLINOIS, A DIVISION OF THE ELECTROGRAPHIC CORPORATION OF NEW YORK CITY, WAS EVALUATED AT $27,636.66. THE OTHER BIDS RANGED HIGHER IN PRICE, SO THAT WESTCOTT WAS LOW BIDDER AND LAKE SHORE WAS SECOND LOW.

THE CONTRACTING OFFICER NOTIFIED WESTCOTT ON AUGUST 23, 1961, THAT IT WAS TO RECEIVE THE AWARD. HOWEVER, DUE TO A PROTEST FILED BY THE SECOND LOW BIDDER, LAKE SHORE ELECTROTYPE CORPORATION, WESTCOTT WAS NOTIFIED TO MAKE NO OBLIGATIONS PENDING THE PROTEST.

YOU CONTEND THAT WESTCOTT SHOULD NOT HAVE BEEN PERMITTED TO CORRECT ITS ALLEGED ERROR AS TO UNIT AND TOTAL PRICES BECAUSE IT CANNOT BE CONCLUSIVELY DETERMINED IF ITS BID PRICES WERE ORIGINALLY INTENDED AS UNIT OR TOTAL PRICES. WE DO NOT AGREE. FOR THOSE ITEMS WHERE NO BASIS OF AWARD FIGURE IS LISTED UNDER THE "BASIS OF AWARD," WESTCOTT QUOTED A BID PRICE CONSISTENT WITH THE OTHER BIDS RECEIVED. THE "INTENDED PRICE" ON THE EVALUATION ITEMS WAS OBTAINED THROUGH SIMPLE DIVISION. THE RESULTS OF THE COMPUTATIONS SHOW A RUN OF PRICES CONSISTENT WITH THE OTHER BIDS. IS EVIDENT THAT WESTCOTT DID MULTIPLY ITS INTENDED UNIT PRICES BY THE "BASIS OF AWARD" FIGURES. WESTCOTT ACTUALLY SUBMITTED EVALUATED PRICES FOR PURPOSES OF THE AWARD. WE THINK THESE PRICES PROPERLY MAY BE USED FOR EVALUATION.

YOU OBJECT TO THE AWARD ON TWO OTHER GROUNDS. YOU POINT OUT THAT UNDER THE SPECIFICATIONS, SHIPPING TERMS ARE F.O.B. CONTRACTOR'S CITY FOR THE FINISHED WORK, AND SINCE MOST OF THE WORK WILL BE ORDERED TO GO TO CHICAGO, WHERE YOU ARE LOCATED, WHEREAS WESTCOTT IS LOCATED IN PHILADELPHIA, YOUR FINAL PRICES, INCLUDING TRANSPORTATION, ARE ACTUALLY LOWER TO THE GOVERNMENT. YOU ESTIMATE THAT THE GOVERNMENT WOULD SAVE OVER $1,200 IN TRANSPORTATION COSTS IF YOU RECEIVED THE AWARD IN PREFERENCE TO WESTCOTT.

THE INVITATION REQUIRES BIDDERS TO STATE THEIR SOURCES OF SUPPLY ON THE EAST AND WEST COAST, AND THE CENTRAL PART OF THE UNITED STATES TO FACILITATE THE MAILING OF MATS. WE CONSIDER THAT SUCH INDICATED SOURCES OF SUPPLY CONSTITUTE THE BIDDER'S CITY FOR PURPOSES OF SHIPPING. IT IS NOTED THAT WESTCOTT HAS INDICATED SOURCES OF SUPPLY IN CHICAGO, NEW YORK CITY AND SAN FRANCISCO.

THE OTHER GROUND OF OBJECTION CONCERNS ITEM E (PAGE 11) OF THE SPECIFICATIONS. BIDDERS ARE REQUESTED UNDER THAT ITEM TO INDICATE THE MAXIMUM NUMBER OF STEREOTYPE MATS WHICH WILL BE MADE FROM STEREOTYPE, ELECTROTYPE AND SPECIAL PROCESS PATTERNS. IT IS PROVIDED THAT CHARGES WILL BE MADE BASED ON THE NUMBER OF MATS INDICATED BY THE BIDDER. HOWEVER, PATTERNS MUST NOT BE USED FOR MOLDING BEYOND THE POINT WHERE A HIGH QUALITY PRODUCT CAN BE OBTAINED. WESTCOTT STATES THAT IT WILL MAKE 3,000 STEREOTYPE MATS, 6,000 ELECTROTYPE MATS AND 8,000 SPECIAL MATS FROM EACH PATTERN. YOU OBSERVE THAT THE OTHER BIDDERS INDICATE AMOUNTS OF MATS PER PATTERN UNDER ONE THOUSAND. YOU QUESTION WHETHER WESTCOTT CAN MAKE SO MANY HIGH QUALIFY MATS FROM EACH PATTERN. WE AGREE THAT THE LOW BIDDER MAY HAVE A PROBLEM IN THIS AREA. HOWEVER, THAT IS NOT SUFFICIENT REASON FOR UPSETTING THE AWARD. UNDER THE SPECIFICATIONS THE GOVERNMENT CAN REQUIRE HIGH QUALITY PRODUCTS AT THE QUOTED PRICE. THIS IS THE PERTINENT CONSIDERATION.