B-148649, JUN. 8, 1962

B-148649: Jun 8, 1962

Additional Materials:

Contact:

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

 

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

INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 10. RECEIPT IS ALSO ACKNOWLEDGED OF YOUR LETTER OF MAY 12. THAT NO GUARANTEE WAS GIVEN OR IMPLIED THAT ANY ORDERS WOULD BE PLACED PURSUANT TO THE CONTRACT. THAT THE GOVERNMENT WOULD HAVE THE RIGHT TO ORDER AMOUNTS LESS THAN THE QUANTITY ESTIMATED. IT IS STATED THAT THE ANTICIPATED PURCHASES WOULD AMOUNT TO APPROXIMATELY 100. IT WAS PROVIDED THAT IN NO CASE WOULD AN ORDER BE PLACED FOR LESS THAN A MINIMUM CARLOAD QUANTITY OF 600 BALES (30. BIDDERS WERE TO QUOTE FOR FURNISHING THE WIPING RAGS TO ANY OR ALL OF THE STORES DEPOTS. THE ABOVE QUOTES ARE BASED ON 100. DELIVERED MONTHLY TO OAKLAND YOUR BID WAS LOW ON ITEM 1. THE CONTRACTING OFFICER DETERMINED THAT YOUR PRICES WERE QUOTED ON AN "ALL OR NONE" BASIS WHICH WERE APPLICABLE ONLY WHEN AT LEAST 250.

B-148649, JUN. 8, 1962

ASSOCIATED WIPERS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 10, 1962, WITH ENCLOSURES, PROTESTING THE AWARDS MADE UNDER INVITATION FOR BIDS NO. SFT- 26482-62. RECEIPT IS ALSO ACKNOWLEDGED OF YOUR LETTER OF MAY 12, 1962.

THE INVITATION ISSUED ON FEBRUARY 6, 1962, BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, SAN FRANCISCO REGIONAL OFFICE, REQUESTED BIDS FOR FURNISHING THE REGIONAL REQUIREMENTS FOR WIPING RAGS FOR THE PERIOD FROM THE DATE OF AWARDS THROUGH SEPTEMBER 30, 1962. THE INVITATION PROVIDED THAT THE CONTRACT WOULD COVER THE NORMAL SUPPLY REQUIREMENTS OF THE THREE GENERAL SERVICES ADMINISTRATION STORES DEPOTS; THAT THE QUANTITIES SHOWN REPRESENTED THE ESTIMATED REQUIREMENTS FOR EACH ITEM DURING THE CONTRACT PERIOD; THAT NO GUARANTEE WAS GIVEN OR IMPLIED THAT ANY ORDERS WOULD BE PLACED PURSUANT TO THE CONTRACT; AND THAT THE GOVERNMENT WOULD HAVE THE RIGHT TO ORDER AMOUNTS LESS THAN THE QUANTITY ESTIMATED. IT IS STATED THAT THE ANTICIPATED PURCHASES WOULD AMOUNT TO APPROXIMATELY 100,000 POUNDS PER MONTH FOR EACH OF THE GENERAL SERVICES ADMINISTRATION STORES DEPOTS AT SOUTH SAN FRANCISCO AND BELL, CALIFORNIA, AND APPROXIMATELY 150,000 POUNDS PER MONTH FOR THE GENERAL SERVICES ADMINISTRATION STORES DEPOT AT OAKLAND, CALIFORNIA. IT WAS PROVIDED THAT IN NO CASE WOULD AN ORDER BE PLACED FOR LESS THAN A MINIMUM CARLOAD QUANTITY OF 600 BALES (30,000 POUNDS).

THE INVITATION REQUIRED BIDDERS TO STATE THEIR MONTHLY PRODUCTION CAPACITY, AS PROGRESSIVE AWARDS MIGHT BE MADE TO REACH THE QUANTITY REQUIRED. BIDDERS WERE TO QUOTE FOR FURNISHING THE WIPING RAGS TO ANY OR ALL OF THE STORES DEPOTS, EITHER ON AN F.O.B. ORIGIN OR DESTINATION BASIS, OR BOTH.

IN RESPONSE TO THE INVITATION YOU SUBMITTED A BID AS FOLLOWS: BIDDER TO STATE MONTHLY PRODUCTION CAPACITY: 400,000 POUNDS PER MONTH.

CHART

REQUIREMENTS FOR

ITEM CONTRACT PERIOD BID PRICE

1. F.O.B. SO. SAN FRANCISCO 900,000 LBS. .1945 FOR 350,000 LBS.

.2035 FOR 350,000 LBS.

2. F.O.B. BELL 1,100,000 LBS. .1870 FOR 350,000 LBS.

.1905 FOR 350,000 LBS.

3. F.O.B. OAKLAND 900,000 LBS. .2175 FOR 350,000 LBS.

THE ABOVE QUOTES ARE BASED ON 100,000 LBS. DELIVERED MONTHLY TO SAN FRANCISCO (TOTAL DELIVERY ALL POINTS) 100,000 LBS. DELIVERED MONTHLY TO BELL (250,000 LBS. PER MONTH) 50,000 LBS. DELIVERED MONTHLY TO OAKLAND

YOUR BID WAS LOW ON ITEM 1, FOR THE FIRST 350,000 POUNDS, AND ON ITEM 2. THE CONTRACTING OFFICER DETERMINED THAT YOUR PRICES WERE QUOTED ON AN "ALL OR NONE" BASIS WHICH WERE APPLICABLE ONLY WHEN AT LEAST 250,000 POUNDS PER MONTH WERE ORDERED. ON SUCH BASIS YOUR LOW BID PRICES (OMITTING DISCOUNTS) ON THREE ITEMS TOTALED $0.5890, WHEREAS A COMBINATION OF OTHER BIDS ON THE INDIVIDUAL ITEMS TOTALS $0.5880. THUS, YOU WERE NOT THE LOW BIDDER ON AN "ALL OR NONE" BASIS, AND AWARDS WERE MADE TO THE OTHER BIDDERS.

YOU PROTEST THE DETERMINATION MADE BY THE CONTRACTING OFFICER THAT YOUR BID WAS ON AN "ALL OR NONE" BASIS, OR THAT THE PRICES QUOTED WERE APPLICABLE ONLY WHEN AT LEAST 250,000 POUNDS PER MONTH WERE ORDERED. IS CONTENDED THAT THE 400,000 POUNDS SHOWN WAS THE MAXIMUM MONTHLY PRODUCTION OF YOUR PLANT; THAT YOU DID NOT WANT TO PLEDGE YOUR ENTIRE PRODUCTION TO THE GENERAL SERVICES ADMINISTRATION; AND THAT THE 250,000 POUNDS WAS INTENDED AS A MAXIMUM, RATHER THAN A MINIMUM, QUANTITY PER MONTH. IT IS STATED IN YOUR LETTER OF MARCH 31, 1962, TO THE SMALL BUSINESS ADMINISTRATION, LOS ANGELES, CALIFORNIA, IN PART AS FOLLOWS:

"ON THE UPPER PART OF THIS PAGE EIGHT, THERE IS A QUESTION REGARDING THE MONTHLY PRODUCTION CAPACITY OF OUR PLANT. I STATED IN ANSWER TO THIS QUESTION THAT OUR PRODUCTION WAS 400,000LBS. PER MONTH. WE DID NOT WANT TO PLEDGE THE ENTIRE 400,000LBS. PER MONTH TO THE GENERAL SERVICES ADMINISTRATION. IN A PARAGRAPH BELOW THE PRICE SCHEDULE ON THIS SAME PAGE, THE GENERAL SERVICES ADMINISTRATION STATES THAT THEIR ANTICIPATED PURCHASES PER MONTH WOULD BE APPROXIMATELY 100,000 LBS. FOR EACH STORE. THE RED OUTLINED PARAGRAPH IS SIMPLY A STATEMENT OF HOW MANY POUNDS WE WILL DELIVER EACH MONTH, TO EACH RECEIVING CENTER, IF WE ARE THE LOW BIDDER ON THIS CONTRACT. SINCE WE WERE A HIGH BIDDER AT THE OAKLAND CENTER, WE WOULD BE REQUIRED, IF GIVEN THE CONTRACT, TO DELIVER AT LEAST A CARLOAD, AND UP TO 100,000 LBS. A MONTH TO THE TWO POINTS ON WHICH WE WERE LOW BIDDERS. THE PRICES LISTED ABOVE WOULD GOVERN THE DELIVERED PRICE TO THESE POINTS WHETHER IT WOULD BE 40,000 LBS. OR 100,000 LBS. HAD WE BEEN LOW BIDDER AT ALL POINTS, THE OUTLINED PARAGRAPH WOULD HAVE BEEN A GUARANTEE OF 250,000 LBS. PER MONTH, FROM THIS PLANT. IN A PARAGRAPH BELOW THE OUTLINED DELIVERY SCHEDULE, THE CONTRACT STATES THAT NOT LESS THAN CARLOAD LOTS WILL BE CALLED .'

ALTHOUGH THE EXPLANATION GIVEN BY YOU AFTER THE OPENING OF THE BIDS IS NOT UNREASONABLE AS TO YOUR INTENT, WE BELIEVE THE BID AS SUBMITTED IS MORE SUSCEPTIBLE OF THE INTERPRETATION THAT THE PRICES QUOTED WERE BASED ON MINIMUM ORDERS OF 250,000 POUNDS PER MONTH. IT IS A MORE COMMON PRACTICE FOR BIDDERS TO QUOTE A LOWER PRICE FOR A GUARANTEED MINIMUM QUANTITY THAN FOR A MAXIMUM QUANTITY WITHOUT REGARD TO A MINIMUM QUANTITY. IN THIS CONNECTION THE BID SPECIFICALLY PROVIDES THAT THE PRICES QUOTED WERE BASED ON A TOTAL OF 250,000 POUNDS "DELIVERED MONTHLY" TO THE THREE DEPOTS. IF THE PRICES QUOTED WERE WITHOUT REGARD TO MINIMUM QUANTITY (NO ORDER WOULD BE PLACED FOR LESS THAN 600 BALES), THE BID COULD HAVE PROVIDED THAT THE MAXIMUM SHIPMENTS UNDER ANY OR ALL ITEMS WERE LIMITED TO 250,000 POUNDS PER MONTH, OR YOU COULD HAVE SHOWN THE 250,000 POUNDS IN ANSWER TO THE QUESTION ON THE BID FORM AS TO MONTHLY PRODUCTION CAPACITY. THIS QUESTION WOULD SEEM TO RELATE TO THE PRODUCTION CAPACITY THAT THE BIDDER WOULD BE WILLING TO ALLOCATE TO PERFORMING THE CONTRACT RATHER THAN TO THE BIDDER'S TOTAL PRODUCTION CAPACITY.

IN THE CIRCUMSTANCES THE EXPLANATION AS TO YOUR INTENDED BID IS NOT ENTIRELY CONSISTENT WITH THE BID AS SUBMITTED. WITH RESPECT TO AN AMBIGUOUS BID, IT WAS STATED IN OUR DECISION OF JANUARY 3, 1961, 40 COMP. GEN. 393, AS FOLLOWS:

"WE RECOGNIZE THAT IN THE COURSE OF NEGOTIATIONS LEADING TO A CONTRACT BETWEEN PRIVATE PARTIES, ONE PARTY MAY FREELY SEEK CLARIFICATION OF AMBIGUOUS OR INCONSISTENT TERMS OFFERED BY THE OTHER PARTY. HOWEVER, IN THE CASE OF COMPETITIVE BIDDING ON GOVERNMENT CONTRACTS, AS YOU POINT OUT, A BIDDER MIGHT BE ABLE TO DETERMINE HIS OWN COMPETITIVE STANDING AFTER THE BIDS ARE EXPOSED BY CLARIFICATION OF HIS BID. IT HAS CONSISTENTLY BEEN STATED BY THIS OFFICE THAT IT IS IMPROPER TO ALLOW A PARTICULAR BIDDER TO CHANGE HIS BID AFTER THE PUBLIC OPENING TO THE PREJUDICE OF OTHER BIDDERS. WE HAVE GENERALLY TAKEN THE POSITION THAT AN AMBIGUOUS BID MAY NOT BE EXPLAINED AFTER OPENING SINCE THE BIDDER WOULD, IN EFFECT, HAVE AN ELECTION AS TO WHETHER OR NOT HE WISHED TO HAVE HIS BID CONSIDERED. SEE B -120202, JULY 19, 1954, B-118428, APRIL 19, 1954. IN OUR DECISION OF MARCH 29, 1960, B-141591, REPORTED AT 39 COMP. GEN. 653, WE STATE THAT A BIDDER PROPERLY MAY BE REQUESTED TO CONFIRM A BID BUT THE CONFIRMATION MAY NOT BE INCONSISTENT WITH A REASONABLE INTERPRETATION OF THE BID AS SUBMITTED.

"IF THE H. K. PORTER COMPANY IS ALLOWED TO CLARIFY ITS BID PRIOR TO AWARD, IT WOULD BE IN A POSITION TO ALTER ITS COMPETITIVE STANDING IN RELATION TO ANOTHER LOW BIDDER. WE THINK THE RULE PROHIBITING BIDDERS "TWO BITES AT THE APPLE" (SEE 38 COMP. GEN. 532, 535-536) IS APPLICABLE HERE. IN CIRCUMSTANCES WHERE EACH OF TWO POSSIBLE MEANINGS CAN BE REACHED FROM THE TERMS OF A BID, THE BIDDER SHOULD NOT BE ALLOWED TO EXPLAIN HIS MEANING WHEN HE IS IN A POSITION THEREBY TO PREJUDICE OTHER BIDDERS OR TO AFFECT THE RESPONSIVENESS OF HIS BID. SUCH ACTION WOULD SERVE TO UNDERMINE THE INTEGRITY OF THE BIDDING SYSTEM AND CAUSE OVERALL HARM TO THE SYSTEM OF COMPETITIVE BIDDING DESPITE THE IMMEDIATE ADVANTAGE GAINED BY A LOWER PRICE IN THE PARTICULAR PROCUREMENT.'

FOR THE FOREGOING REASONS WE FIND NO LEGAL BASIS TO QUESTION THE ADMINISTRATIVE INTERPRETATION PLACED UPON YOUR BID AS SUBMITTED.