B-148239, MARCH 30, 1962, 41 COMP. GEN. 631

B-148239: Mar 30, 1962

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CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - ADDENDA ACKNOWLEDGMENT FAILURE TO ACKNOWLEDGE AN AMENDMENT INCREASING THE QUANTITY SPECIFIED IN THE INVITATION BY A LOW BIDDER WHO HAD GRATUITOUSLY OFFERED TO FURNISH A LARGER QUANTITY AT THE SAME PRICE SO THAT BID ON WHICH HE COULD BE BOUND MEETS THE REQUIREMENTS IN THE AMENDED INVITATION DOES NOT RESULT IN GIVING THE BIDDER A CHOICE AFTER BID OPENING AND IS NOT PREJUDICIAL TO OTHER BIDDERS. 1962: REFERENCE IS MADE TO LETTER OF MARCH 21. THERE WAS INCLUDED IN THE GENERAL PROVISIONS CLAUSE 47. PARAGRAPH S IN THE SCHEDULE SPECIFIED THE AMOUNT OF THE OPTIONAL QUANTITY AND INDICATED THAT IT WAS NOT NECESSARY THAT BIDDERS GRANT THE OPTION TO HAVE AN ACCEPTABLE BID.

B-148239, MARCH 30, 1962, 41 COMP. GEN. 631

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - ADDENDA ACKNOWLEDGMENT FAILURE TO ACKNOWLEDGE AN AMENDMENT INCREASING THE QUANTITY SPECIFIED IN THE INVITATION BY A LOW BIDDER WHO HAD GRATUITOUSLY OFFERED TO FURNISH A LARGER QUANTITY AT THE SAME PRICE SO THAT BID ON WHICH HE COULD BE BOUND MEETS THE REQUIREMENTS IN THE AMENDED INVITATION DOES NOT RESULT IN GIVING THE BIDDER A CHOICE AFTER BID OPENING AND IS NOT PREJUDICIAL TO OTHER BIDDERS; THEREFORE, THE FAILURE TO ACKNOWLEDGE THE AMENDMENT MAY BE WAIVED AS AN INFORMALITY AND THE BID CONSIDERED FOR AWARD.

TO THE SECRETARY OF THE AIR FORCE, MARCH 30, 1962:

REFERENCE IS MADE TO LETTER OF MARCH 21, 1962, FROM THE ASSISTANT DEPUTY FOR PROCUREMENT MANAGEMENT, REPORTING ON THE PROTEST OF THE RAINIER COMPANY, INCORPORATED, UNDER IFB 33-657-62-129 AND REQUESTING A DECISION WHETHER AN AWARD MAY BE MADE TO THE PROTESTANT.

ITEMS 1.1 THROUGH 1.22 OF THE SUBJECT INVITATION SCHEDULE SOLICITED BIDS FOR FURNISHING TO THE GOVERNMENT A TOTAL OF 739 RECEIVER TRANSMITTERS. ADDITION, THERE WAS INCLUDED IN THE GENERAL PROVISIONS CLAUSE 47, AN OPTION FOR INCREASED QUANTITY PROVISION, WHICH SPECIFIED AS FOLLOWS:

THE GOVERNMENT MAY INCREASE THE QUANTITY OF SUPPLIES CALLED FOR HEREIN BY THE AMOUNT STATED IN THE SCHEDULE AND AT THE UNIT PRICE SPECIFIED THEREIN. THE CONTRACTING OFFICER MAY EXERCISE THIS OPTION, AT ANY TIME WITHIN THE PERIOD SPECIFIED IN THE SCHEDULE, BY GIVING WRITTEN NOTICE TO THE CONTRACTOR. DELIVERY OF THE ITEMS ADDED BY THE EXERCISE OF THIS OPTION SHALL CONTINUE IMMEDIATELY AFTER, AND AT THE SAME RATE AS, DELIVERY OF LIKE ITEMS CALLED FOR UNDER THIS CONTRACT UNLESS THE PARTIES OTHERWISE AGREE.

PARAGRAPH S IN THE SCHEDULE SPECIFIED THE AMOUNT OF THE OPTIONAL QUANTITY AND INDICATED THAT IT WAS NOT NECESSARY THAT BIDDERS GRANT THE OPTION TO HAVE AN ACCEPTABLE BID. SO FAR AS PERTINENT, PARAGRAPH S STATED:

THE STATED AMOUNT AS CONTEMPLATED BY CLAUSE 47 OF THE CENTRAL PROVISIONS HEREOF IS 50 PERCENT OF ITEMS 1.1 THRU 1.22. THE OPTION UNDER SAID CLAUSE MAY BE EXERCISED NO LATER THAN 180 DAYS PRIOR TO THE LAST SCHEDULED DELIVERY FOR SUCH ITEMS. EVALUATION OF BIDS WILL BE ON THE BASIS OF QUANTITY TO BE AWARDED EXCLUSIVE OF THE OPTION QUANTITY.

BIDDERS WHO DESIRE TO GRANT SUCH AN OPTION WILL INDICATE " OPTION ACCEPTABLE.'

BIDDERS WHO DO NOT DESIRE TO GRANT SUCH AN OPTION WILL INDICATE " OPTION NOT ACCEPTABLE.' BIDS OFFERING OPTIONS AND BIDS REFUSING OPTIONS WILL BE EQUALLY ACCEPTABLE.

ABOUT 2 WEEKS AFTER THE ISSUANCE OF THE INVITATION, THERE WAS ISSUED AMENDMENT 1 TO INVITATION THAT INCREASED THE 739 TOTAL-UNIT REQUIREMENT BY 101 UNITS TO 840 UNITS AND MADE THE 50 PERCENT INCREASED QUANTITY OPTION APPLICABLE TO THE NEW TOTAL. THE AMENDMENT STATED THAT THE BIDDERS MUST ACKNOWLEDGE RECEIPT OF IT PRIOR TO THE OPENING OF BIDS.

ON THE BID FORM PROVIDED WITH THE INVITATION FOR BIDS, RAINIER BID ON THE 739 TOTAL-UNIT REQUIREMENT AND INDICATED THAT IT WOULD GRANT THE 50 PERCENT OPTION FOR INCREASED QUANTITY, BUT IT DID NOT ACKNOWLEDGE RECEIPT OF THE AMENDMENT. RAINIER AND ANOTHER BIDDER BOTH HAVE COMPLAINED THAT THEY WERE NEVER FURNISHED THE AMENDMENT.

THE CONTRACTING OFFICER REJECTED THE RAINIER BID AS NONRESPONSIVE BECAUSE IT FAILED TO ACKNOWLEDGE AMENDMENT 1. IN SUPPORT OF THE ACTION TAKEN, THE CONTRACTING OFFICER CITED THE GENERAL RULE THAT IF AN AMENDMENT TO AN INVITATION AFFECTS THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, FAILURE TO ACKNOWLEDGE THE AMENDMENT CANNOT BE WAIVED. HOWEVER, THE ASSISTANT DEPUTY FOR PROCUREMENT MANAGEMENT RECOMMENDS IN THE REPORT OF MARCH 21, 1962, THAT THE BID BE ACCEPTED FOR REASONS AS FOLLOWS:

RAINIER INDICATED IN ITS BID THAT IT WOULD GRANT THE 50 PERCENT OPTION FOR INCREASED QUANTITY SOLICITED BY THE IFB. WE SUGGEST THAT THERE IS NO SUBSTANTIAL DIFFERENCE BETWEEN RAINIER'S BID OFFERING EITHER 739 OR 1108 OF THE ITEMS AT A GIVEN PRICE AND A BID, WHICH WOULD CLEARLY HAVE BEEN RESPONSIVE TO THE AMENDED IFB, OFFERING ONLY 840 OF THE ITEMS AT THAT PRICE. BECAUSE THE GREATER QUANTITY INCLUDES THE LESSER, NO UNFAIRNESS RESULTS TO THE OTHER BIDDERS WHEN RAINIER'S BID IN RESPONSE TO THE UNAMENDED IFB IS COMPARED WITH THEIR BIDS ACKNOWLEDGING THE AMENDMENT. DIFFERENT RESULT WOULD OBTAIN IF THE OPTION PROVISION HAD BEEN MANDATORY IN THE IFB, BECAUSE THEN RAINIER WOULD HAVE MADE NO OFFER OF THE REQUIRED MAXIMUM QUANTITY UNDER THE AMENDMENT. BUT THAT IS NOT THE CASE HERE; THE COMPANY HAS, BY EXTENDING A GRATUITOUS OPTION WITH ITS BID, OFFERED ALL OF THE ITEMS REQUIRED FOR RESPONSIVENESS TO THE AMENDED IFB AND MORE.

FURTHERMORE, IT CAN BE DEMONSTRATED THAT THE REASON FOR THE RULE THAT FAILURE TO ACKNOWLEDGE AN AMENDMENT INCREASING QUANTITY REQUIRES DISQUALIFICATION DOES NOT APPLY IN THIS CASE. ORDINARILY, THE MINIMUM NEEDS OF THE GOVERNMENT ARE REPRESENTED ONLY BY THE AMENDED IFB REQUIREMENT, AND THE BIDDER WHO FAILS TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT CANNOT BE BOUND TO SUPPLY THE INCREASED QUANTITY. HE THUS WOULD HAVE, IF HE WERE ELIGIBLE FOR AWARD, A CHOICE AFTER OPENING AND UP TO THE TIME OF AWARD WHETHER OR NOT TO ACCEPT AWARD FOR THE NEEDED QUANTITY AT HIS BID PRICE; AND THIS CHOICE WOULD PUT HIM IN A FAVORED POSITION VIS-A- VIS THE OTHER BIDDERS. HOWEVER, IN THIS PARTICULAR CASE, THE BID RESPONSIVE TO THE UNAMENDED IFB, ON WHICH RAINIER WOULD BE BOUND TO ACCEPT AWARD, WILL--- BECAUSE OF THE COMPANY'S OFFER OF THE OPTION--- MEET THE MINIMUM NEEDS OF THE GOVERNMENT AS EXPRESSED IN THE AMENDED IFB. THUS, NO EXTRA FREEDOM IS INVOLVED AND NO PREJUDICE RESULTS. COMPARE 33 COMP. GEN. 508, 510.

THE POSSIBILITY OF PREJUDICE TO OTHER BIDDERS BY AWARD TO RAINIER IS ALSO NEGATED BY TWO OTHER FACTORS. ONE IS THE GENERALLY RECOGNIZED TENDENCY OF AN INCREASE IN REQUIRED QUANTITY TO LOWER UNIT PRICES, RATHER THAN RAISE THEM, IF SUCH INCREASE HAS ANY EFFECT AT ALL. THUS, IF RAINIER HAD KNOWN OF THE INCREASED QUANTITY, ITS PRICE MIGHT HAVE BEEN FURTHER LOWERED; BUT THERE IS ABSOLUTELY NO REASON TO ASSUME IT WOULD HAVE BEEN RAISED. THE SECOND FACTOR IS THE LARGE MARGIN BETWEEN RAINIER'S UNIT PRICE AND THE NEXT LOWEST BID. THE DIFFERENCE IS $341 AN ITEM, OR 13 PERCENT OF THE RAINIER BID. EVEN IF THE AMENDMENT HAD SOMEHOW CAUSED RAINIER'S BID TO BE INCREASED, IT SEEMS CERTAIN IT WOULD NOT HAVE BEEN INCREASED BY 13 PERCENT.

WHILE THE GENERAL RULE IS AS STATED BY THE CONTRACTING OFFICER IT HAS NOT BEEN APPLIED INDISCRIMINATELY BY THIS OFFICE TO PREVENT WAIVER IN ALL CASES INVOLVING FAILURE TO ACKNOWLEDGE ADDENDA AFFECTING THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, AND WE DO NOT BELIEVE THAT IT HAS APPLICATION TO THE CIRCUMSTANCES PRESENTED IN THE IMMEDIATE CASE. RATHER, WE CONCUR IN THE RECOMMENDATION OF THE ASSISTANT DEPUTY FOR PROCUREMENT FOR THE REASONS STATED IN THE REPORT OF MARCH 21, 1962, THAT HAVE BEEN QUOTED ABOVE.

ACCORDINGLY, WE FIND NO BASIS FOR OBJECTING TO WAIVING AS AN INFORMALITY THE FAILURE OF RAINIER TO ACKNOWLEDGE AMENDMENT 1 TO THE INVITATION.