B-147143, NOV. 9, 1961

B-147143: Nov 9, 1961

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TO SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED OCTOBER 4. VARIATION IN QUANTITIES CALLED FOR HEREIN WILL BE ACCEPTED AS IN COMPLIANCE WITH THIS CONTRACT IN AN AMOUNT NOT EXCEEDING ONE (1) PERCENT. THIS VARIATION IS APPLICABLE SEPARATELY TO EACH SHIPMENT AND/OR DESTINATION.'. DELIVERY WAS TO BE COMPLETED WITHIN 60 DAYS AFTER THE CONTRACTOR'S RECEIPT OF WRITTEN NOTICE OF AWARD. SEVEN BIDS WERE RECEIVED. ALLISON DIVISION TYPED THE FOLLOWING SENTENCE: "AUTHORIZATION IS REQUESTED FOR VARIATION IN QUANTITY NOT TO EXCEED FIVE (5) PERCENT IF VARIATION IS CAUSED BY CONDITIONS OF LOADING. AWARD WAS MADE TO ALLISON DIVISION AS LOW BIDDER (CONTRACT NO. HE STATES THAT IT WAS HIS DETERMINATION THAT THE USE OF THE WORD REQUESTED" IN NO WAY IMPLIED THAT ALLISON REQUIRED THE INCLUSION OF A FIVE PERCENT VARIATION IN QUANTITY IN ANY RESULTING CONTRACT.

B-147143, NOV. 9, 1961

TO SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 4, 1961, FROM THE DEPUTY FOR PROCUREMENT AND PRODUCTION, FURNISHING A REPORT ON THE PROTEST OF THE INDUSTRIAL FITTING CORPORATION AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION NO. 01-601-61-1978 ISSUED BY THE BROOKLEY AIR FORCE BASE, ALABAMA, ON JUNE 23, 1961.

THE INVITATION AS AMENDED REQUESTED BIDS--- TO BE OPENED JULY 31,1961--- FOR FURNISHING 114,000 SCREWS DESCRIBED AS GENERAL MOTORS PART NO. 6704891. WITH RESPECT TO VARIATION IN QUANTITIES, THE INVITATION PROVIDED:

"WITH REFERENCE TO GENERAL PROVISION NO. 4, VARIATION IN QUANTITIES CALLED FOR HEREIN WILL BE ACCEPTED AS IN COMPLIANCE WITH THIS CONTRACT IN AN AMOUNT NOT EXCEEDING ONE (1) PERCENT. THIS VARIATION IS APPLICABLE SEPARATELY TO EACH SHIPMENT AND/OR DESTINATION.'

DELIVERY WAS TO BE COMPLETED WITHIN 60 DAYS AFTER THE CONTRACTOR'S RECEIPT OF WRITTEN NOTICE OF AWARD.

SEVEN BIDS WERE RECEIVED, RANGING FROM $0.47 PER UNIT (ALLISON DIVISION, GENERAL MOTORS CORPORATION) TO $0.69 PER UNIT. INDUSTRIAL FITTING CORPORATION SUBMITTED THE SECOND LOW BID OF $0.49 PER UNIT LESS DISCOUNT OF ONE-HALF PERCENT 10 CALENDAR DAYS OR ONE-FOURTH PERCENT 20 CALENDAR DAYS. ON ITS BID, ALLISON DIVISION TYPED THE FOLLOWING SENTENCE:

"AUTHORIZATION IS REQUESTED FOR VARIATION IN QUANTITY NOT TO EXCEED FIVE (5) PERCENT IF VARIATION IS CAUSED BY CONDITIONS OF LOADING, SHIPPING OR PACKING OR ALLOWANCES IN MANUFACTURING PROCESSES.'

IN ITS LETTER OF AUGUST 3, 1961, TO BROOKLEY AIR FORCE BASE, INDUSTRIAL SUGGESTED THAT THE LOW BID OF ALLISON DIVISION SHOULD BE REGARDED AS NONRESPONSIVE "DUE TO THE 5 PERCENT QUANTITY VARIATION SPECIFIED BY THIS BIDDER.' ON AUGUST 30, 1961, AWARD WAS MADE TO ALLISON DIVISION AS LOW BIDDER (CONTRACT NO. AF 01/601/38912).

THE CONTRACTING OFFICER REPORTS THAT HE AWARDED THE CONTRACT TO ALLISON "WITH A VARIATION IN QUANTITY OF ONE (1) PERCENT AS CALLED OUT BY PARAGRAPH F OF IFB, AND WITH NO FURTHER NEGOTIATIONS WITH BIDDERS.' ALSO, HE STATES THAT IT WAS HIS DETERMINATION THAT THE USE OF THE WORD REQUESTED" IN NO WAY IMPLIED THAT ALLISON REQUIRED THE INCLUSION OF A FIVE PERCENT VARIATION IN QUANTITY IN ANY RESULTING CONTRACT. THE RECORD SHOWS THAT THE CONTRACTING OFFICER DID NOT MAKE ANY MENTION OF THE VARIATION IN QUANTITY WHEN THE AWARD WAS MADE. IN THE LETTER OF OCTOBER 4, 1961, FROM YOUR DEPARTMENT, TRANSMITTING THE REPORT ON THIS MATTER IT IS STATED THAT EVEN IF THE ALLISON STATEMENT AS TO VARIATION IN QUANTITY COULD BE CONSIDERED AS CREATING AN AMBIGUITY THAT AMBIGUITY SHOULD BE CONSTRUED AGAINST THE BIDDER WHICH WOULD RESULT IN THE ALLISON BID BEING REGARDED AS RESPONSIVE, IN VIEW OF OUR DECISION IN 39 COMP. GEN. 653.

IN OUR DECISION OF JANUARY 11, 1956, B-124572, INVOLVING A CONTRACT WITH THE DEPARTMENT OF THE NAVY, WE HAD OCCASION TO CONSIDER THE MEANING OF THE WORD "REQUEST" IN CONNECTION WITH A BID WHICH CONTAINED A STATEMENT "WE REQUEST A 75 PERCENT PARTIAL PAYMENTS CLAUSE.' WE HELD THERE THAT IF THE INTENT OF THE BIDDER WAS MERELY TO EXPRESS A PREFERENCE AND IF HE WOULD HAVE ACCEPTED THE AWARD SUBJECT ONLY TO THE OTHER PROVISIONS OF THE INVITATION, SUCH INTENT SHOULD HAVE BEEN CLEARLY EXPRESSED. IN THE ABSENCE OF SUCH A CLARIFICATION IT WAS CONSIDERED BY OUR OFFICE THAT THE REQUEST CONSTITUTED A BID QUALIFICATION AND THAT THE BID WAS NOT RESPONSIVE TO THE INVITATION. WE THINK THAT THE REQUEST IN THIS CASE FOR A PERMISSIBLE FIVE PERCENT VARIATION IN QUANTITY IN LIEU OF THE ONE PERCENT VARIATION REFERRED TO IN THE INVITATION LIKEWISE MUST BE REGARDED AS A BID QUALIFICATION AND THAT THE BID OF ALLISON SHOULD HAVE BEEN REJECTED AS NOT RESPONSIVE TO THE INVITATION.

EVEN IF WE WOULD HOLD THAT THE BIDDER'S STATEMENT DID NOT AMOUNT TO A BID QUALIFICATION, AND THAT IT WAS MERELY AMBIGUOUS, YOUR ATTENTION IS INVITED TO 40 COMP. GEN. 393, WHICH IN TURN REFERS TO 39 COMP. GEN. 653, CITED IN THE REPORT OF YOUR DEPARTMENT. WE IN EFFECT HELD THAT AN AMBIGUOUS BID MAY NOT BE EXPLAINED AFTER OPENING IF EITHER OF THE TWO POSSIBLE MEANINGS OF THE BID MIGHT PREJUDICE OTHER BIDDERS SO AS TO UNDERMINE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM.

THERE WOULD SEEM TO BE LITTLE DOUBT THAT THE PERMISSIBLE VARIATION IN QUANTITY COULD AFFECT THE CONTRACT PRICE AND, THEREFORE, THE BID OF ALLISON SHOULD NOT HAVE BEEN ACCEPTED. HOWEVER, IT HAS BEEN INFORMALLY ASCERTAINED THAT THE CONTRACTOR IS PROCEEDING WITH MANUFACTURE OF THE SUPPLIES AND THAT THE PROGRESS OF THE WORK INDICATES THAT DELIVERY WILL BE MADE WITHIN THE CONTRACT COMPLETION DATE OF NOVEMBER 8, 1961. IN VIEW THEREOF, AND SINCE IT APPEARS THAT THE CONTRACT WAS AWARDED IN GOOD FAITH, IT IS OUR OPINION THAT CANCELLATION WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT AND THE REQUEST OF INDUSTRIAL THAT WE DIRECT SUCH CANCELLATION MUST THEREFORE BE DENIED.