B-148017, APRIL 24, 1962, 41 COMP. GEN. 696

B-148017: Apr 24, 1962

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BIDS - MODIFICATION - RECEIPT BY RELATED AGENCY UNDER AN INVITATION SPECIFYING THE PLACE FOR SUBMISSION OF BIDS AND PERMITTING CONSIDERATION OF LATE BID MODIFICATIONS THAT ARE MISHANDLED BY THE GOVERNMENT INSTALLATION AFTER RECEIPT OF THE BID. 2 DAYS AFTER SUBMISSION OF A BID TO A RELATED MILITARY AGENCY AT ANOTHER LOCATION ADVISING THAT FOR THE USE OF SPECIAL GOVERNMENT-OWNED TOOLING THE BIDDER WAS OFFERING A RENTAL IN AN AMOUNT WHICH WOULD MAKE THE BID SUBMITTED AT THE OTHER LOCATION THE LOW BID. 1962: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22. INTERESTED PARTIES WERE ADVISED THAT SEALED BIDS. THE INVITATION NUMBER ON THE FACE OF THE ENVELOPE. * * * LATE BIDS AND MODIFICATIONS OR WITHDRAWALS: BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF THE BIDS WILL NOT BE CONSIDERED.

B-148017, APRIL 24, 1962, 41 COMP. GEN. 696

BIDS - MODIFICATION - RECEIPT BY RELATED AGENCY UNDER AN INVITATION SPECIFYING THE PLACE FOR SUBMISSION OF BIDS AND PERMITTING CONSIDERATION OF LATE BID MODIFICATIONS THAT ARE MISHANDLED BY THE GOVERNMENT INSTALLATION AFTER RECEIPT OF THE BID, A LETTER SENT TO A MILITARY INSTALLATION RESPONSIBLE FOR THE ACCOUNTABILITY OF GOVERNMENT- OWNED EQUIPMENT LEASED TO CONTRACTORS, 2 DAYS AFTER SUBMISSION OF A BID TO A RELATED MILITARY AGENCY AT ANOTHER LOCATION ADVISING THAT FOR THE USE OF SPECIAL GOVERNMENT-OWNED TOOLING THE BIDDER WAS OFFERING A RENTAL IN AN AMOUNT WHICH WOULD MAKE THE BID SUBMITTED AT THE OTHER LOCATION THE LOW BID, MAY NOT BE REGARDED AS BEING CONSTRUCTIVELY RECEIVED BY THE PROCURING ACTIVITY NOR AS A LATE BID MODIFICATION MISHANDLED BY THE PROCURING ACTIVITY; THEREFORE, THE BIDDER'S LETTER NOT HAVING BEEN RECEIVED AT THE PROCURING AGENCY PRIOR TO OPENING MAY NOT BE CONSIDERED AS A PART OF THE BID FOR EVALUATION PURPOSES.

TO MARTIN, KUNEN AND WHITFIELD, APRIL 24, 1962:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22, 1962, PROTESTING ON BEHALF OF EMCO PORCELAIN ENAMEL CO., INC., PORT CHESTER, NEW YORK, THE AWARD OF A CONTRACT TO OTHER THAN THAT CONCERN UNDER INVITATION FOR BIDS NO. ORD-11-173-20, ISSUED BY HEADQUARTERS, ORDNANCE AMMUNITION COMMAND, JOLIET, ILLINOIS, AS AMENDED BY AMENDMENT NO. 1, ISSUED DECEMBER 21, 1961; AND TO YOUR LETTERS OF FEBRUARY 1 AND MARCH 9, 1962, SUBMITTED IN SUPPORT OF THE PROTEST.

UNDER THE INVITATION, AS AMENDED, INTERESTED PARTIES WERE ADVISED THAT SEALED BIDS, SUBJECT TO THE TERMS AND CONDITIONS INCORPORATED IN THE INVITATION, WOULD BE RECEIVED AT THE ISSUING OFFICE UNTIL 2:00 P.M., CENTRAL STANDARD TIME, JANUARY 4, 1962, AND AT THAT TIME PUBLICLY OPENED, FOR FURNISHING 319,935 M2A1 AMMUNITION BOXES, DESIGNATED AS ITEM NO. 1, AND 589,735 M19A1 AMMUNITION BOXES, DESIGNATED AS ITEM NO. 2. RELATIVE TO THE SUBMISSION AND MODIFICATION OF BIDS, THE " TERMS AND CONDITIONS OF THE INVITATION FOR BIDS," AS AMENDED BY THE PROVISIONS APPEARING AT THE TOP OF PAGE 16 OF THE " SCHEDULE" OF THE INVITATION, PROVIDED:

2. SUBMISSION OF BIDS.--- (A) BIDS AND MODIFICATIONS THEREOF SHALL BE ENCLOSED IN SEALED ENVELOPES ADDRESSED TO THE ISSUING OFFICE, WITH THE NAME AND ADDRESS OF THE BIDDER, THE DATE AND HOUR OF OPENING, AND THE INVITATION NUMBER ON THE FACE OF THE ENVELOPE. * * *

LATE BIDS AND MODIFICATIONS OR WITHDRAWALS: BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION FOR BIDS AFTER THE EXACT TIME SET FOR OPENING OF THE BIDS WILL NOT BE CONSIDERED, UNLESS THEY ARE RECEIVED BEFORE AWARD IS MADE AND (I) ARE SUBMITTED BY MAIL * * * AND (II) IT IS DETERMINED BY THE GOVERNMENT THAT LATE RECEIPT WAS DUE SOLELY TO EITHER (A) DELAY IN THE MAILS * * * FOR WHICH THE BIDDER WAS NOT RESPONSIBLE OR (B) MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION. * * *

UNDER THE TERMS OF PARAGRAPH 5 OF THE TERMS AND CONDITIONS, AND OF THE SCHEDULE, OF THE INVITATION IT WAS PROVIDED THAT NO GOVERNMENT OWNED FACILITIES, PRODUCTION EQUIPMENT OR TOOLING WERE TO BE FURNISHED TO THE SUCCESSFUL BIDDER FOR THE PERFORMANCE OF THE CONTRACT. HOWEVER, AT PAGE 11 OF THE SCHEDULE IT WAS PROVIDED:

USE OF GOVERNMENT-OWNED EQUIPMENT AND/1OR TOOLING: BIDDERS SHALL INDICATE BY CHECK MARK BELOW THEIR INTENTION TO USE, IN THE PERFORMANCE OF ANY CONTRACT AWARDED AS A RESULT OF THIS INVITATION FOR BID, GOVERNMENT-OWNED EQUIPMENT AND/OR TOOLING ALREADY IN THEIR POSSESSION AT THE TIME OF BID SUBMISSION AND SHALL, UPON REQUEST OF THE CONTRACTING OFFICER, SUBMIT DOCUMENTARY EVIDENCE OF LEASE OR OTHER SEPARATE AGREEMENT WHICH AUTHORIZES THE BIDDER TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON. SUCH LEASE OR OTHER SEPARATE AGREEMENT MUST REQUIRE THE BIDDER TO PAY A FAIR RENTAL VALUE (COMPUTED IN ACCORDANCE WITH EXISTING REGULATIONS).

THE SUPPLIES WERE TO BE DELIVERED F.O.B. CARRIERS' EQUIPMENT AT ORIGIN AT THE PARTICULAR LOCATION TO BE SPECIFIED BY BIDDER, AND IN ACCORDANCE WITH THE DELIVERY SCHEDULE SET FORTH IN THE INVITATION, ALTHOUGH BIDDERS WERE PERMITTED TO SET FORTH AN ACCELERATED DELIVERY SCHEDULE IN THEIR BIDS, IN WHICH EVENT THEIR BIDS WERE TO BE GIVEN PREFERENCE IN THE CASE OF SUBMISSION OF EQUAL BIDS. THE INVITATION PROVIDED THAT THE DELIVERY REQUIREMENTS SET FORTH THEREIN WERE BASED UPON THE ASSUMPTION THAT THE GOVERNMENT WOULD MAKE AWARD BY JANUARY 26, 1962, AND THAT BIDS FOR THE ITEMS WERE TO BE SUBMITTED ON A UNIT PRICE AND TOTAL AMOUNT BASIS, INDICATING ANY DIFFERENTIAL IN PRICES RESULTING FROM THE USE OF RAIL OR TRUCK TRANSPORTATION. SHIPMENTS OF THE SUPPLIES FROM THE F.O.B. DELIVERY POINT WERE TO BE MADE AT GOVERNMENT EXPENSE IN ACCORDANCE WITH SHIPPING INSTRUCTIONS OF THE CONTRACTING OFFICER, BUT THE INVITATION PROVIDED THAT GOVERNMENT TRANSPORTATION COSTS WOULD NOT BE A FACTOR IN EVALUATING BIDS. PARAGRAPH 7 OF THE TERMS AND CONDITIONS, AS AMENDED BY THE PROVISION APPEARING AT PAGE 14 OF THE SCHEDULE, OF THE INVITATION PROVIDED THAT WHERE, AS IN THE PRESENT INSTANCE, DELIVERY AND ACCEPTANCE OF THE SUPPLIES WERE TO BE ACCOMPLISHED AT POINT OF ORIGIN, PROMPT PAYMENT DISCOUNTS WOULD BE CONSIDERED IN THE EVALUATION OF BIDS IF THE MINIMUM PERIOD OF THE OFFERED DISCOUNT SHOULD BE 10 DAYS.

IT APPEARS THAT, OF THE 21 BIDS RECEIVED IN RESPONSE TO THE INVITATION, THE BID OF STANDARD CONTAINER, INC., IN THE AMOUNTS OF $1.219 AND $1.209 PER UNIT FOR ITEM 1, AND THE AMOUNTS OF $0.964 AND $0.959 PER UNIT FOR ITEM 2, DEPENDING UPON WHETHER THE SUPPLIES (WHICH WERE TO BE DELIVERED AT MONTCLAIR, NEW JERSEY) MOVED BY RAIL OR TRUCK, WITH THE PROVISION THAT IF IT RECEIVED THE AWARD OF BOTH ITEMS THE UNIT PRICE WOULD BE REDUCED ONE CENT FOR EACH ITEM, AND AN OFFER OF 1/2 PERCENT DISCOUNT FOR PAYMENT WITHIN 20 DAYS, WAS THE LOWEST RECEIVED FROM THE STANDPOINT OF THE BID PRICES SUBMITTED. THE BID OF EMCO PORCELAIN ENAMEL CO., INC., DATED DECEMBER 18, 1961, SUBMITTED ON AN ALL-OR-NONE BASIS FOR THE ITEMS, IN THE AMOUNTS OF $1.2584 AND $1.2384 PER UNIT FOR ITEM 1, AND THE AMOUNTS OF $0.9756 AND $0.9556 PER UNIT FOR ITEM 2, DEPENDING UPON WHETHER THE SUPPLIES (WHICH WERE TO BE DELIVERED AT PORT CHESTER, NEW YORK) MOVED BY RAIL OR TRUCK, WITH THE PROVISION (STATED AS AN " ALTERNATE BID" ON THE REVERSE OF AMENDMENT NO. 1) THAT IF AWARDED ITEM 1 ONLY, THE UNIT PRICE THEREFOR WOULD BE $1.295, IF SHIPMENT MOVED BY RAIL, AND $1.275, IF BY TRUCK, AND IF AWARDED ITEM 2 ONLY, THE UNIT PRICE WOULD BE $0.99, OR $0.9694, DEPENDING UPON WHETHER SHIPMENT MOVED BY RAIL OR TRUCK, AND AN OFFER OF 2 PERCENT DISCOUNT FOR PAYMENT WITHIN 20 DAYS, WAS THE SECOND LOW BID FROM THE STANDPOINT OF THE BID PRICES SUBMITTED. IN SUBMITTING ITS BID, STANDARD CONTAINER INDICATED IN THE SPACE PROVIDED FOR SUCH INFORMATION ON PAGE 11 OF THE SCHEDULE THAT THE CONTRACTOR DID NOT INTEND TO USE GOVERNMENT-OWNED EQUIPMENT AND/OR TOOLING IN THE PERFORMANCE OF THE CONTRACT, WHEREAS EMCO INDICATED IN ITS BID THAT IT DID INTEND TO USE SUCH GOVERNMENT EQUIPMENT AND/OR TOOLING ALREADY IN ITS POSSESSION IN THE PERFORMANCE OF THE CONTRACT. IN ITS BID, STANDARD CONTAINER OFFERED TO DELIVER THE SUPPLIES IN ACCORDANCE WITH THE DELIVERY SCHEDULE SET FORTH IN THE INVITATION, WHEREAS EMCO OFFERED IN ITS BID TO ACCOMPLISH DELIVERIES ON THE BASIS OF AN ACCELERATED DELIVERY SCHEDULE.

BY LETTER DATED DECEMBER 20, 1961, 2 DAYS AFTER THE DATE OF THE BID SUBMITTED TO THE PROCURING ACTIVITY IN JOLIET, ILLINOIS, EMCO ADVISED THE NEW YORK ORDNANCE DISTRICT, 770 BROADWAY, NEW YORK 3, NEW YORK, AS FOLLOWS:

WE HAVE IN OUR POSSESSION GOVERNMENT OWNED SPECIAL TOOLING FOR USE IN THE MANUFACTURE OF M19A1 AMMUNITION BOXES.

IN CONSIDERATION FOR THE USE OF THE GOVERNMENT OWNED TOOLING ON FUTURE PROCUREMENTS, WE ARE WILLING TO PAY THE SUM OF $400.00 PER MONTH OF USE.

IN YOUR LETTER OF JANUARY 22, 1962, TO US, YOU STATED THAT EMCO HAD BEEN INFORMALLY NOTIFIED BY THE CONTRACTING OFFICER THAT AN AWARD OF THE CONTRACT TO STANDARD CONTAINER, INC., WAS "PRESENTLY CONTEMPLATED," BUT THAT EMCO CONSIDERED THAT IT WAS THE LOWEST RESPONSIBLE BIDDER, ALL FACTORS CONSIDERED, AND, HENCE, DESIRED TO ENTER ITS PROTEST TO ANY SUCH AWARD; ALSO, THAT YOU WOULD SUBMIT A BRIEF IN SUPPORT OF THE PROTEST NOT LATER THAN FEBRUARY 1, 1962.

EMCO'S PROTEST WAS INFORMALLY BROUGHT TO THE ATTENTION OF THE DEPARTMENT OF THE ARMY BY US ON JANUARY 26, 1962, AND UNDER DATE OF JANUARY 30, 1962, WE TRANSMITTED YOUR LETTER OF JANUARY 22, 1962, TO THE SECRETARY OF THE ARMY WITH THE REQUEST THAT WE BE FURNISHED WITH A FULL REPORT IN THE MATTER. ALSO, BY LETTER OF FEBRUARY 5, 1962, WE FURNISHED THE SECRETARY OF THE ARMY WITH A COPY OF YOUR LETTER OF FEBRUARY 1, 1962, SUBMITTED IN SUPPORT OF THE PROTEST, FOR CONSIDERATION IN CONNECTION WITH THE MATTER. THE REQUESTED REPORT WAS RECEIVED ON MARCH 5, 1962.

ON JANUARY 25, 1962, THE CONTRACTING OFFICER, HAVING BEEN INFORMED BY YOU OF THE PROTEST FILED BY EMCO WITH OUR OFFICE AND THE BASIS THEREFOR, NAMELY, THAT THE $2,400 RENTAL WHICH THE GOVERNMENT WOULD RECEIVE FOR THE GOVERNMENT-OWNED SPECIAL TOOLING IN EMCO'S POSSESSION DURING THE 6-MONTH PERIOD OF CONTRACT PERFORMANCE (BASED UPON THE $400 PER MONTH RENTAL OFFERED IN THE ABOVE-QUOTED LETTER) CONSTITUTED A FACTOR NECESSARY TO BE CONSIDERED IN EVALUATING THE BIDS, WHICH WOULD MAKE EMCO THE LOW BIDDER, NOTIFIED STANDARD CONTAINER THEREOF AND--- BECAUSE OF DELAY IN AWARD ANTICIPATED DUE TO FILING OF THE PROTEST--- REQUESTED AN EXTENSION OF TIME ON BEHALF OF THE GOVERNMENT WITHIN WHICH TO ACCEPT THE CONCERN'S BID, WHICH BY ITS TERMS WAS TO EXPIRE ON FEBRUARY 3, 1962. SUCH REQUEST WAS DENIED, HOWEVER, FOR THE STATED REASONS, AMONG OTHERS, THAT EMCO'S PROTEST WAS WITHOUT MERIT AND AN EXTENSION OF TIME WOULD DELAY THE START UP OF CONTRACT OPERATIONS BY STANDARD CONTAINER, WITH THE RESULT THAT THE CONTRACTOR MIGHT INCUR INCREASED COSTS OF PERFORMANCE.

PURSUANT TO THE PROVISIONS OF APP 2-407.9F., REVISED JUNE 23, 1961, WHICH PROVIDES THAT WHERE A PROTEST IS RECEIVED PRIOR TO AWARD OF THE CONTRACT THE CONTRACTING OFFICER WILL WITHHOLD SUCH AWARD PENDING INSTRUCTIONS FROM THE HEAD OF THE PROCURING ACTIVITY CONCERNED, THE CONTRACTING OFFICER REFERRED THE MATTER TO THE CHIEF OF ORDNANCE BY MEMORANDUM OF JANUARY 31, 1962, WITH REQUEST FOR INSTRUCTIONS, STATING THAT IT WAS HIS (THE CONTRACTING OFFICER-S) DETERMINATION THAT PROMPT AWARD TO STANDARD CONTAINER, INC., AS "THE LOW RESPONSIVE RESPONSIBLE BIDDER," WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT.

ON FEBRUARY 2, 1962, THE CONTRACT WAS AWARDED TO STANDARD CONTAINER, INC., FOLLOWING APPROVAL BY THE OFFICE OF CHIEF OF ORDNANCE. THE BASES FOR SUCH ACTION WAS (1) THAT EMCO'S LETTER OF DECEMBER 20, 1961, OF WHICH THE PROCURING ACTIVITY HAD NO KNOWLEDGE UNTIL JANUARY 15, 1962, COULD NOT BE CONSIDERED AS A MODIFICATION OF ITS BID, AND (2) THAT THE PROCURING ACTIVITY WAS NOT AUTHORIZED TO TAKE RENTAL TO BE RECEIVED FROM GOVERNMENT- OWNED PROPERTY IN A BIDDER'S POSSESSION INTO CONSIDERATION IN EVALUATING BIDS IN ANY EVENT. IN THE LATTER CONNECTION, PARAGRAPH 2-201.1 OF ORDNANCE PROCUREMENT INSTRUCTION, 1959 EDITION, AS REVISED APRIL 1, 1960, WHICH WAS IN EFFECT AT THE TIME THE INVITATION INVOLVED WAS ISSUED, PROVIDED, IN PERTINENT PART, AS FOLLOWS:

2-201.1 BID SCHEDULE--- USE OF GOVERNMENT-OWNED PROPERTY. ALL ORDNANCE INSTALLATIONS AND ACTIVITIES WILL COMPLY WITH ASPR 2-201 (C) (XV) WITH RESPECT TO A STATEMENT, IF APPLICABLE, BY A BIDDER IN HIS BID THAT THE USE IS PLANNED, IN THE PERFORMANCE OF THE WORK BID UPON, OF ANY ITEMS OF GOVERNMENT-OWNED PROPERTY IN THE BIDDER'S POSSESSION.

A. THE USE OF GOVERNMENT-OWNED EQUIPMENT IN CONNECTION WITH FORMALLY ADVERTISED PROCUREMENTS SHALL BE PERMITTED ONLY ON ONE OF THE FOLLOWING TWO BASES:

(1) INCLUDE IN THE IFB A LIST OF GOVERNMENT-OWNED EQUIPMENT AVAILABLE TO ALL BIDDERS ON A " WHERE IS, AS IS, AND RETURN" BASIS.

(2) PRECLUDE THE USE BY BIDDERS OF GOVERNMENT-OWNED EQUIPMENT, UNLESS BIDDERS CAN FURNISH DOCUMENTARY EVIDENCE OF LEASE OR OTHER LEGALLY BINDING CONTRACT WITH THE GOVERNMENT UNDER WHICH THE PROPERTY IS IN THEIR POSSESSION, WHICH REQUIRES THEM TO PAY A FAIR RENTAL VALUE (COMPUTED IN ACCORDANCE WITH EXISTING REGULATIONS).

(A) PARAGRAPH 8, STANDARD FORMS 30 AND 33, STATES THAT NO MATERIAL, LABOR, OR FACILITIES WILL BE FURNISHED, BUT DOES NOT SPECIFICALLY PRECLUDE THE USE OF GOVERNMENT PROPERTY ALREADY IN THE CONTRACTOR'S POSSESSION FOR WHICH RENTAL IS NOT BEING PAID. (AS INDICATED ABOVE, PARAGRAPH 5 OF THE TERMS AND CONDITIONS, STANDARD FORM 30, OCTOBER 1957 USED., AS WELL AS THE SCHEDULE OF THE INVITATION CONTAINED THIS PROVISION.)

(B) THEREFORE, AN APPROPRIATE PROVISION SHALL BE INCLUDED IN THE IFB REQUIRING BIDDERS WHO INTEND TO USE GOVERNMENT-OWNED PROPERTY IN THEIR POSSESSION TO PRESENT THE TYPE OF DOCUMENTARY EVIDENCE REFERRED TO ABOVE. THE PROVISION SHALL NOT BE WORDED SO AS TO REQUIRE EVALUATION OF THE RENTAL BEING PAID BY THE CONTRACTOR AS A PART OF THE EVALUATION OF THE UNIT PRICE BID. IT SHOULD MERELY REQUIRE DOCUMENTARY EVIDENCE THAT THE RENTAL IS COMPUTED UNDER APPLICABLE REGULATIONS. IF IT CAN BE ESTABLISHED THAT THE CONTRACTOR WILL BE REQUIRED TO PAY AN OUT-OF-POCKET RENTAL, IT IS OF NO CONCERN TO THE GOVERNMENT IF HE DOES NOT CHOOSE TO INCLUDE IT IN HIS BID PRICE, PROVIDED OF COURSE, THAT IT CAN BE ASCERTAINED THROUGH A PREAWARD SURVEY THAT THE BIDDER OTHERWISE HAS THE NECESSARY FINANCIAL RESOURCES TO PERFORM THE PROCUREMENT.

(C) CONTRACTORS WHO HAVE GOVERNMENT-OWNED EQUIPMENT IN THEIR POSSESSION, NOT UNDER LEASE OR OTHER LEGALLY BINDING CONTRACT WITH THE GOVERNMENT WHICH REQUIRES THE PAYMENT OF A FAIR RENTAL VALUE, SHALL NOT BE PERMITTED UNDER ANY CIRCUMSTANCES TO BID ON THE BASIS OF USING SUCH EQUIPMENT IN CONNECTION WITH FORMALLY ADVERTISED PROCUREMENTS. B. THE ORDNANCE CORPS WILL NOT UTILIZE ANY SYSTEM OF ALTERNATE BIDS FOR THE PURPOSE OF EVALUATING THE USE BY CONTRACTORS OF GOVERNMENT OWNED EQUIPMENT. SUCH A SYSTEM NOT ONLY REQUIRES COMPLICATED AND TIME CONSUMING CALCULATIONS AND EVALUATIONS WHICH ARE NOT CONDUCIVE TO THE PROMPT AND EXPEDITIOUS PLACEMENT OF CURRENT PROCUREMENT BUT ALSO PROVIDES INTERESTED PARTIES WITH FERTILE FIELDS FOR PROTESTS.

PARAGRAPH 2-201 (C) (XV) OF THE ARMED SERVICES PROCUREMENT REGULATION, AS REVISED APRIL 20, 1959, CITED IN THE ABOVE REGULATION, PROVIDED AS FOLLOWS:

2-201. PREPARATION OF FORMS. THE FORM OR FORMS TO BE USED IN THE SOLICITATION OF BIDS, (SEE ASPR SECTION XVI, PART 1) SHOULD CONTAIN SUBSTANTIALLY THE FOLLOWING INFORMATION AND ANY OTHER INFORMATION REQUIRED BY PROCEDURES PRESCRIBED BY EACH RESPECTIVE DEPARTMENT.

(C) SCHEDULE

(XV) ANY AUTHORIZED SPECIAL PROVISIONS RELATING TO GOVERNMENT FURNISHED PROPERTY PROPOSED TO BE FURNISHED FOR THE PERFORMANCE OF THE CONTRACT; AND IN ADDITION, A PROVISION THAT IF THE BIDDER PLANS TO USE, IN PERFORMING THE WORK BID UPON, ANY ITEMS OF GOVERNMENT PROPERTY IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT INDEPENDENT OF THE INVITATION FOR BIDS, THE BIDDER SHALL SO STATE IN THE BID, AND UPON REQUEST OF THE CONTRACTING OFFICER, SUBMIT EVIDENCE THAT A FACILITIES CONTRACT OR OTHER SEPARATE AGREEMENT AUTHORIZES THE BIDDER TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON.

A PROVISION IDENTICAL IN ALL MATERIAL RESPECTS TO THAT SET FORTH ABOVE APPEARS IN PARAGRAPH 2-201 (A) (XIV) OF THE CURRENT ARMED SERVES PROCUREMENT REGULATION, WHICH ALSO PROVIDES:

(XX) IF GOVERNMENT COSTS OR EXPENDITURES OTHER THAN BID PRICES ARE TO BE CONSIDERED IN THE EVALUATION OF BIDS, SUCH FACTORS MUST BE IDENTIFIED AND INCLUDED.

PARAGRAPH 2-201 (A) (XXV) OF THE CURRENT ARMED SERVICES PROCUREMENT REGULATION ALSO REQUIRES THAT A PROVISION RELATING TO LATE BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF IDENTICAL TO THAT WHICH WAS INCLUDED IN THE INSTANT INVITATION, SUPRA, BE INCLUDED IN ALL INVITATIONS RELATING TO FORMALLY ADVERTISED PROCUREMENTS.

PARAGRAPH 2-201 (A), SUBPARTS (XIV) AND (XXV), OF THE CURRENT ARMED SERVICES PROCUREMENT REGULATION, THE PROVISIONS OF WHICH WERE IN EFFECT AT THE TIME THE INVITATION INVOLVED WAS ISSUED, IS CODIFIED TO SECTION 2.201 (A), SUBPARTS (14) AND (25), OF TITLE 32 OF THE CODE OF FEDERAL REGULATIONS, REVISED JANUARY 1, 1961. INASMUCH AS THE LATTER WAS PUBLISHED PURSUANT TO PART 30 OF THE REGULATIONS OF THE ADMINISTRATIVE COMMITTEE OF THE FEDERAL REGISTER, AS REVISED MARCH 20, 1959 (23 F.R. 2352; 1 CFR PART 30), UNDER THE AUTHORITY CONTAINED IN SECTION 11 OF THE FEDERAL REGISTER ACT AS AMENDED (67 STAT. 388; 44 U.S.C. 311), THE CONTENTS THEREOF ARE REQUIRED TO BE JUDICIALLY NOTICED. XWEI V. ROBINSON, C.A. ILL. 1957, 246 F.2D 739, CERTIORARI DENIED 355 U.S. 879.

IT APPEARS THAT ON FRIDAY, JANUARY 12, 1962, EMCO SENT THE FOLLOWING TELEGRAM TO THE ORDNANCE AMMUNITION COMMAND, JOLIET, ILLINOIS:

RE CFB ORD-111173-62-20 REQ YOU TAKA INTO ACCT CREDIT OFFERED IN YOUR LTR OF DEC 20 1961 SENT TO NYOD FORNUSE OF GOVERNMENT OWNED SPECIAL TOOLING.

THE TELEGRAM BEARS A STAMP SHOWING THAT IT WAS RECEIVED BY " OAC" ON JANUARY 15, 1962.

IT FURTHER APPEARS THAT ON JANUARY 19, 1962, OAC RECEIVED FROM THE NEW YORK ORDNANCE DISTRICT INFORMATION PERTAINING TO EMCO'S LETTER OF DECEMBER 20, 1961, SUPRA, AND THAT A COPY THEREOF WAS FORWARDED TO THE PROCURING ACTIVITY BY " NYOD" ON JANUARY 23RD.

YOU CONTEND THAT, BECAUSE OF THE INTERAGENCY RELATIONSHIP OF THE NEW YORK ORDNANCE DISTRICT AND THE ORDNANCE AMMUNITION COMMAND, JOLIET, ILLINOIS, AND THE FACT THAT EMCO HAD ON PREVIOUS OCCASIONS DEALT WITH NYOD, AS THE AGENCY CHARGED WITH PROPERTY ACCOUNTABILITY THEREFOR, IN MAKING ARRANGEMENTS TO USE THE SPECIAL TOOLING INVOLVED IN CONNECTION WITH THE PERFORMANCE OF PRIOR ,NEGOTIATED CONTRACTS" FOR FURNISHING AMMUNITION BOXES TO THE DEPARTMENT OF THE ARMY, AND NYOD WAS FULLY AWARE THAT OAC WAS PROCURING THE AMMUNITION BOXES IN QUESTION, THE PROCURING ACTIVITY SHOULD BE CHARGED WITH CONSTRUCTIVE RECEIPT OF THE LETTER OF DECEMBER 20, 1961, WHICH THEREFORE PROPERLY SHOULD BE HELD TO CONSTITUTE A PART OF EMCO'S BID. IN SUPPORT OF THIS POSITION, YOU POINT OUT THAT IT WAS NECESSARY FOR EMCO TO COMMUNICATE WITH NYOD IN REGARD TO THE USE OF THE SPECIAL TOOLING, AND STATE THAT THE CONTRACTOR REASONABLY BELIEVED THAT THIS WAS THE ONLY AGENCY WHICH IT WAS REQUIRED TO CONTACT IN THE MATTER. IN THE ALTERNATIVE, YOU CONTEND THAT THE LETTER IN QUESTION SHOULD BE CONSIDERED AS A LATE MODIFICATION OF EMCO'S BID WITHIN THE MEANING OF THE CLAUSE " LATE BIDS AND MODIFICATIONS OR WITHDRAWALS," SUPRA, ON THE BASIS THAT NYOD HAD AMPLE TIME WITHIN WHICH TO FURNISH THE PROCURING ACTIVITY WITH THE INFORMATION CONTAINED THEREIN PRIOR TO THE DATE FIXED FOR OPENING BIDS, BUT THAT IT "SAT" ON THE LETTER INSTEAD.

IN SUPPORT OF YOUR CONTENTION THAT, IF CONSIDERATION WERE GIVEN TO THE RENTAL WHICH THE GOVERNMENT WOULD RECEIVE FOR THE SPECIAL TOOLING, EMCO PROPERLY SHOULD BE CONSIDERED TO HAVE SUBMITTED THE LOW BID, YOU STATE IN YOUR LETTER OF MARCH 9, 1962, IN MATERIAL PART, AS FOLLOWS:

I HAVE BEEN INFORMED THAT EMCO'S BID TOTALED $940,557.74, AND STANDARD'S BID TOTALED $938,540.19, A DIFFERENCE OF $2,017.55. EMCO'S OFFER OF $400 PER MONTH TOTALS $2,400 FOR THE SIX MONTHS, A FIGURE IN EXCESS OF THE DIFFERENCE BETWEEN THE TWO BIDS, AND FAR IN EXCESS OF "FAIR RENTAL VALUE.'

I HAVE ALSO BEEN INFORMED THAT THE TOOLING IS OF SUCH A NATURE THAT DEPRECIATION IS VIRTUALLY NON-EXISTENT, OR, AT THE WORST, VERY SLOW INDEED. SINCE THE EQUIPMENT HAS A LONG LIFE ANY CONTEMPLATED "WEAR AND TEAR" WOULD BE AT A MINIMUM.

IN ANY EVENT, PAGE 11 OF THE SUBJECT INVITATION STATES THAT THE BIDDER MUST PAY "A FAIR RENTAL VALUE (COMPUTED IN ACCORDANCE WITH EXISTING REGULATIONS)" FOR USE OF GOVERNMENT-OWNED TOOLING. ALTHOUGH THE ARMED SERVICE PROCUREMENT REGULATIONS ARE SILENT WITH RESPECT TO THE COMPUTATION OF ,FAIR RENTAL VALUE" FOR USE OF SPECIAL TOOLING, GUIDANCE IS GIVEN BY ASPR 14-407 (A) (3) WITH ASPR 13-601.2 (I). THESE REGULATIONS, WHICH REFER TO THE RENTAL TO BE CHARGED FOR USE OF INDUSTRIAL FACILITIES, STATE THAT A FAIR RENTAL VALUE FOR INDUSTRIAL FACILITIES BETWEEN SIX AND TEN YEARS OF AGE, WOULD BE 1 PERCENT OF THE ACQUISITION COST. THE SPECIAL TOOLING IN EMCO'S POSSESSION IS APPROXIMATELY NINE YEARS OLD AND THE ACQUISITION COST, WE HAVE BEEN INFORMED, IS CARRIED ON THE GOVERNMENT'S BOOKS AT $1,566.00. ( SEE ENCLOSED COPY OF DD FORM 1149-4). ON THIS BASIS, THEN, A FAIR RENTAL VALUE WOULD BE $15.66 PER MONTH AND EMCO'S OFFER OF $400 PER MONTH WOULD HAVE INCLUDED WITHIN IT A "PROFIT" TO THE GOVERNMENT OF $384.34 PER MONTH, OR A TOTAL "PROFIT" OF $2,306.04, WHICH, IF CONSIDERED, MAKES EMCO'S BID LOW.

THE FIGURE OF $2,017.55, MENTIONED ABOVE, APPEARS FROM OUR CALCULATIONS TO REPRESENT THE APPROXIMATE AMOUNT BY WHICH EMCO'S BID FOR FURNISHING BOTH ITEMS INVOLVED (FOR TRANSPORTATION BY TRUCK) EXCEEDED THAT SUBMITTED BY STANDARD CONTAINER, GIVING DUE ALLOWANCE TO THE PROMPT PAYMENT DISCOUNT OFFERED IN BOTH INSTANCES.

SINCE EMCO'S LETTER OF DECEMBER 20, 1961, WAS NOT DIRECTED TO HEADQUARTERS, ORDNANCE AMMUNITION COMMAND, JOLIET, ILLINOIS, AND MADE NO REFERENCE TO THE INVITATION, THERE WOULD BE NO BASIS FOR CHARGING THE PROCURING ACTIVITY WITH THE CONSTRUCTIVE RECEIPT THEREOF, PARTICULARLY IN VIEW OF THE EXPLICIT INSTRUCTIONS CONTAINED IN THE INVITATION IN REGARD TO WHERE BIDS WERE TO BE SUBMITTED. THERE WOULD EQUALLY BE NO BASIS FOR TREATING THE LETTER AS A LATE MODIFICATION OF EMCO'S BID, SINCE UNDER THE PERTINENT CLAUSE OF THE INVITATION THE "MISHANDLING BY THE GOVERNMENT" IS REQUIRED TO HAVE TAKEN PLACE "AFTER RECEIPT AT THE GOVERNMENT INSTALLATION," NAMELY, HEADQUARTERS, ORDNANCE AMMUNITION COMMAND, JOLIET, ILLINOIS.

FURTHERMORE, SINCE BIDDERS WERE NOT ADVISED IN THE INVITATION THAT RENTAL TO BE RECEIVED FROM ANY GOVERNMENT-OWNED EQUIPMENT OR TOOLING ALREADY IN A BIDDER'S POSSESSION WAS TO BE A FACTOR IN EVALUATING BIDS, THE CONSIDERATION OF SUCH A FACTOR IN THE PRESENT INSTANCE WOULD NOT BE IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 2-201 (A) (XX) OF THE ARMED SERVICES PROCUREMENT REGULATION, SUPRA, OR IN ACCORDANCE WITH THE STATUTORY REQUIREMENTS RELATING TO COMPETITIVE BIDDING. 39 COMP. GEN. 282, 284. IT SEEMS CLEAR THAT THE PROVISIONS OF PARAGRAPH 2-201.1 OF ORDNANCE PROCUREMENT INSTRUCTION, AS REVISED APRIL 1, 1960, QUOTED HEREINABOVE, WERE DESIGNED TO PRECLUDE ORDNANCE ACTIVITIES FROM INCLUDING IN THEIR INVITATIONS A PROVISION ADVISING BIDDERS THAT ANY SUCH RENTAL FACTOR WOULD BE CONSIDERED, AND, HENCE, TO PRECLUDE THE CONSIDERATION THEREOF AS A FACTOR IN EVALUATING BIDS IN CONNECTION WITH FORMALLY ADVERTISED PROCUREMENTS. AS TO THE FACT THAT CONTRACTING OFFICERS, IN EXERCISING POWERS CONFERRED UPON THEM BY STATURE OR REGULATION, ARE BOUND TO FOLLOW PRESCRIBED PROCEDURES, SEE 37 COMP. GEN. 550, 553. THE FACT--- TO WHICH YOU HAVE DRAWN ATTENTION--- THAT THE ORDNANCE PROCUREMENT INSTRUCTION INVOLVED WAS NOT PUBLISHED HAS NO MATERIAL BEARING INSOFAR AS EMCO'S RIGHTS IN THE MATTER ARE CONCERNED. SEE PERKINS V. LUKENS STEEL CO., 310 U.S. 133, 127.

ACCORDINGLY, YOU ARE ADVISED THAT WE FIND NO BASIS FOR QUESTIONING THE PROPRIETY OF THE AWARD IN THIS CASE.