B-147571, JAN. 23, 1962

B-147571: Jan 23, 1962

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 7. PROTESTING AGAINST THE REJECTION OF YOUR BID ON CERTAIN SUBITEMS THAT WERE A PART OF ITEM 1 IN GENERAL SERVICES ADMINISTRATION INVITATION SE2S-1942. ITEM 1 WAS BROKEN DOWN INTO SUBITEMS A THROUGH U. IN THE BLANK SPACES FOLLOWING EACH SUBITEM BIDDERS WERE REQUESTED TO QUOTE THE PRICES AND THE MINIMUM BATCH QUANTITIES AT WHICH THOSE PRICES WOULD PREVAIL. BIDDERS ALSO WERE REQUESTED TO OFFER A PRICE REDUCTION FOR AN AWARD IN THE AGGREGATE ON ITEM 1 AND IT WAS INDICATED IN THE "AWARD BASIS" CLAUSE IN THE INVITATION THAT IF ANY BIDDER'S TOTAL PRICE ON THE AGGREGATE BASIS WAS LOWER THAN THE TOTAL OF THE INDIVIDUAL LOW BIDS RECEIVED ON EACH SUBITEM.

B-147571, JAN. 23, 1962

TO NORRIS PAINT AND VARNISH CO., INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 7, 1961, PROTESTING AGAINST THE REJECTION OF YOUR BID ON CERTAIN SUBITEMS THAT WERE A PART OF ITEM 1 IN GENERAL SERVICES ADMINISTRATION INVITATION SE2S-1942, COVERING RUBBER BASE PAINT.

ITEM 1 WAS BROKEN DOWN INTO SUBITEMS A THROUGH U. IN THE BLANK SPACES FOLLOWING EACH SUBITEM BIDDERS WERE REQUESTED TO QUOTE THE PRICES AND THE MINIMUM BATCH QUANTITIES AT WHICH THOSE PRICES WOULD PREVAIL. THE "MINIMUM BATCH" CLAUSE IN THE INVITATION CAUTIONED BIDDERS THAT IF THE MINIMUM BATCH STATED BY THE BIDDER EXCEEDED CERTAIN STATED LIMITATIONS THE BID WOULD BE CONSIDERED NONRESPONSIVE. BIDDERS ALSO WERE REQUESTED TO OFFER A PRICE REDUCTION FOR AN AWARD IN THE AGGREGATE ON ITEM 1 AND IT WAS INDICATED IN THE "AWARD BASIS" CLAUSE IN THE INVITATION THAT IF ANY BIDDER'S TOTAL PRICE ON THE AGGREGATE BASIS WAS LOWER THAN THE TOTAL OF THE INDIVIDUAL LOW BIDS RECEIVED ON EACH SUBITEM, THE AWARD WOULD BE MADE ON THE AGGREGATE BASIS.

YOU QUOTED A PRICE ON EVERY SUBITEM IN ITEM 1. ALSO, YOU OFFERED A PRICE REDUCTION IN THE EVENT AN AGGREGATE AWARD ON ITEM 1 WAS MADE TO YOU. HOWEVER, YOU HAVE STATED THAT IN THE PREPARATION OF YOUR BID YOU REFERRED BACK TO THE INVITATION FOR THE PREVIOUS YEAR AND THROUGH AN OVERSIGHT YOU DID NOT NOTICE THAT THE MINIMUM BATCH REQUIREMENT HAD BEEN MADE MORE STRINGENT IN THE CURRENT PROCUREMENT AND AS A RESULT YOU OVERSTATED THE MINIMUM BATCH ON A NUMBER OF SUBITEMS.

APPARENTLY, YOU OBJECT TO AN AWARD BEING MADE TO YOU ONLY FOR THE SUBITEMS ON WHICH YOU WERE LOW AND RESPONSIVE, YOUR CONTENTION BEING THAT YOU WERE THE LOW AGGREGATE BIDDER AND THAT THE OVERSTATEMENT OF MINIMUM BATCH QUANTITIES WAS AN IMMATERIAL DEVIATION THAT SHOULD HAVE BEEN WAIVED.

WE HAVE REVIEWED YOUR BID AND THE ABSTRACT OF THE OTHER BIDS RECEIVED ON ITEM 1 AND WE HAVE FOUND THAT EVEN IF THE FAILURE TO COMPLY WITH THE "MINIMUM BATCH" CLAUSE WERE ALLOWED TO BE WAIVED AN AWARD COULD NOT HAVE BEEN MADE TO YOU IN THE AGGREGATE INASMUCH AS YOUR BID ON THAT BASIS WAS NOT LOWER THAN THE TOTAL OF THE INDIVIDUAL LOW BIDS RECEIVED ON THE SUBITEMS. IN THAT CONNECTION, YOUR AGGREGATE BID WAS $59,605.25, WHEREAS THE SUM OF THE INDIVIDUAL LOW BIDS ON THE SUBITEMS WAS $59,559.62.

THEREFORE, THE QUESTION OF RESPONSIVENESS ONLY IS IMPORTANT TO THE EXTENT THAT IT HAS PRECLUDED YOU FROM RECEIVING AN AWARD. ON THAT POINT, IT IS CLEAR THAT ALTHOUGH YOU WERE LOW BIDDER ON THREE SUBITEMS, YOU WERE RESPONSIVE ONLY ON TWO. ON THE THIRD, YOU EXCEEDED THE LIMITATION SPECIFIED IN THE "MINIMUM BATCH" CLAUSE.

WHETHER THE FAILURE TO MEET THE MINIMUM BATCH LIMITATION COULD HAVE BEEN WAIVED DEPENDS UPON WHETHER IT WAS A MATERIAL REQUIREMENT. IN THAT CONNECTION, THE FEDERAL PROCUREMENT REGULATIONS AND DECISIONS OF THIS OFFICE (SEE E.G. 30 COMP. GEN. 179) PROVIDE THAT DEVIATIONS OF IN BIDS WHICH AFFECT PRICE, QUANTITY OR QUALITY OF THE SUBJECT MATTER OF THE PROCUREMENT GO TO THE SUBSTANCE OF THE BID AND MAY NOT BE WAIVED AS A MERE BID INFORMALITY. SINCE THE PRICES STATED IN THE BID WERE MADE DEPENDENT UPON THE MINIMUM BATCH QUANTITIES OFFERED, TO THE EXTENT THAT ANY MINIMUM BATCH QUANTITY DOES NOT COINCIDE WITH THE LIMIT SPECIFIED IN THE INVITATION, UNDER THE CITED RULE WE MUST VIEW THE DEVIATION AS GOING TO THE SUBSTANCE OF THE BID ON THAT SUBITEM AND AS REQUIRING REJECTION THEREOF.

ACCORDINGLY, YOUR BID ONLY COULD HAVE BEEN CONSIDERED AND AN AWARD MADE FOR THE TWO SUBITEMS ON WHICH YOU WERE LOW AND RESPONSIVE. AS YOU HAVE INDICATED THAT YOU DO NOT WISH TO PERFORM ON SUCH A LIMITED BASIS, THE CONTRACTING AGENCY HAS ADVISED US THAT THE AWARD HAS BEEN CANCELED PURSUANT TO THE MUTUAL CANCELLATION PROVISIONS OF THE CONTRACT. ALSO, WE HAVE BEEN ADVISED THAT PURSUANT TO YOUR SUGGESTION, TO FACILITATE UNDERSTANDING OF THE GOVERNMENT'S MINIMUM BATCH REQUIREMENTS, IN FUTURE INVITATIONS THE TERM "EQUAL TO" WILL BE ELIMINATED FROM THE PROVISION THAT BIDS OFFERING A MINIMUM BATCH "EQUAL TO OR EXCEEDING THE GOVERNMENT'S REQUIREMENT FOR FOUR MONTHS' STOCK WILL BE CONSIDERED NONRESPONSIVE.' TO THE SUGGESTION THAT THE INVITATION STATE THE MINIMUM BATCH AS A POSITIVE SPECIFICATION REQUIREMENT WITHOUT REQUIRING BIDDERS TO STATE THE BATCH REQUIREMENTS AS A PART OF THEIR BIDS, THE CONTRACTING AGENCY IS OF THE OPINION THAT THE PRESENT REQUIREMENT IS ADEQUATE AND NECESSARY TO ENCOURAGE BIDDERS TO STUDY CAREFULLY AND TO UNDERSTAND THE GOVERNMENT'S REQUIREMENTS BEFORE PREPARING TO SUBMIT BIDS. SINCE THE MATTER OF THE PREPARATION OF SPECIFICATIONS AND INVITATIONS PRIMARILY IS A MATTER WITHIN THE ADMINISTRATIVE DISCRETION OF THE CONTRACTING AGENCIES AND IS BASED LARGELY UPON THEIR EXPERIENCE IN THE ISSUANCE OF VAST NUMBERS OF INVITATIONS, THEIR REVIEW OF NUMEROUS BIDS RECEIVED THEREUNDER AND THEIR KNOWLEDGE GAINED FROM THE ADMINISTRATION OF CONTRACTS AWARDED, WE WOULD NOT FEEL JUSTIFIED IN QUESTIONING THEIR DETERMINATION IN THIS CASE.

UPON REVIEW OF THE RECORD, WE DO NOT FIND ANY LEGAL IMPROPRIETY IN THE MANNER IN WHICH BIDS ..END :