B-148749, JUN. 25, 1962

B-148749: Jun 25, 1962

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INCORPORATED: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 17. WHICH WERE TO BE SHIPPED TO THE CONTRACTOR FOR SERVICING WITHIN 30 DAYS AND RETURNED TO THE GOVERNMENT. WHILE ITEM 8 PROVIDED THAT THE CONTRACTOR WOULD EITHER REPAIR OR REPLACE THE EXTERIOR CONTAINER IN WHICH THE FUEL CELL ASSEMBLIES WERE SHIPPED TO THE CONTRACTOR. UNDER ITEM 8 A UNIT PRICE BID WAS REQUESTED FOR REPLACING EACH OF THE VARIOUS TYPES OF EXTERIOR CONTAINERS UNDER ITEMS 1 (A) THROUGH 6 (B). WHILE A SINGLE UNIT BID PRICE WAS REQUESTED FOR REPAIR OF ANY OF THE VARIOUS TYPES OF SUCH CONTAINERS. THE EFFECT OF SUCH PROCEDURE WAS TO DETERMINE THE LOW BIDDER ON THE ASSUMPTION THAT 50 PERCENT OF THE EXTERIOR CONTAINERS WOULD BE REPLACED AND 50 PERCENT WOULD BE REPAIRED.

B-148749, JUN. 25, 1962

TO AIR OVERHAUL, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 17, 1962, PROTESTING AGAINST THE ACTION OF THE DEPARTMENT OF THE AIR FORCE IN AWARDING A CONTRACT TO THE U.S. RUBBER COMPANY UNDER IFB 04-606-62-84.

ITEMS 1 (A) THROUGH 6 (B) OF THE IFB REQUESTED BIDS ON THE OVERHAUL OF A MINIMUM OF 94 AND A MAXIMUM OF 473 FUEL CELL ASSEMBLIES OF VARIOUS TYPES, WHICH WERE TO BE SHIPPED TO THE CONTRACTOR FOR SERVICING WITHIN 30 DAYS AND RETURNED TO THE GOVERNMENT.

ITEM 7 REQUIRED BIDDERS TO SUBMIT UNIT PRICE BIDS FOR PRESERVATION, PACKAGING, AND PACKING OF ITEMS 1 (A) THROUGH 6 (B), WHILE ITEM 8 PROVIDED THAT THE CONTRACTOR WOULD EITHER REPAIR OR REPLACE THE EXTERIOR CONTAINER IN WHICH THE FUEL CELL ASSEMBLIES WERE SHIPPED TO THE CONTRACTOR. UNDER ITEM 8 A UNIT PRICE BID WAS REQUESTED FOR REPLACING EACH OF THE VARIOUS TYPES OF EXTERIOR CONTAINERS UNDER ITEMS 1 (A) THROUGH 6 (B), WHILE A SINGLE UNIT BID PRICE WAS REQUESTED FOR REPAIR OF ANY OF THE VARIOUS TYPES OF SUCH CONTAINERS.

WITH RESPECT TO THE EVALUATION OF BIDS FOR AWARD PURPOSES, PART XXX (B) OF THE SPECIAL PROVISIONS OF THE IFB PROVIDED, IN PERTINENT PART, THAT THE TOTAL LOW BID PRICE WOULD BE DETERMINED AS FOLLOWS:

1. BY MULTIPLYING THE UNIT PRICE BY THE MINIMUM QUANTITY OF ITEM 1 (A) THROUGH 6 (B).

2. BY MULTIPLYING THE UNIT PRICE ON ITEM 7 BY THE MINIMUM QUANTITY ON ITEMS 1 (A) THROUGH 6 (B).

3. BY ADDING THE UNIT PRICES SUBMITTED UNDER ITEM 8 TO THE UNIT PRICES OF THE CORRESPONDING ITEMS 1 (A) THROUGH 6 (B).

NOTWITHSTANDING THE PROVISIONS OF XXX (B) (3) OF THE SPECIAL PROVISIONS, THE CONTRACTING OFFICER FIRST EVALUATED THE BID PRICES ON ITEM 8 BY MULTIPLYING THE UNIT PRICE BID FOR THE REPLACEMENT OF EACH TYPE OF EXTERIOR CONTAINER BY ONE-HALF OF THE MINIMUM QUANTITY FOR THAT TYPE, THEN APPLYING THE SAME FORMULA TO THE UNIT BID PRICE FOR REPAIR OF CONTAINERS, AND ADDING THE TOTALS. THE EFFECT OF SUCH PROCEDURE WAS TO DETERMINE THE LOW BIDDER ON THE ASSUMPTION THAT 50 PERCENT OF THE EXTERIOR CONTAINERS WOULD BE REPLACED AND 50 PERCENT WOULD BE REPAIRED. ON THE BASIS OF SUCH COMPUTATION YOUR BID WAS EVALUATED AT $8,418.92 WHILE THE BID BY U.S. RUBBER COMPANY WAS EVALUATED AT $8,689.17. AS A RESULT OF THIS DETERMINATION THAT YOUR COMPANY WAS THE LOW BIDDER, THE AIR FORCE RECORDS INDICATE THAT THE ADMINISTRATIVE MACHINERY, WHICH RESULTED IN A NEGATIVE FACILITY CAPABILITY REPORT ON YOUR COMPANY, SUBSEQUENT ISSUANCE OF THE CERTIFICATE OF COMPETENCY BY THE SMALL BUSINESS ADMINISTRATION, AND PREMATURE ISSUANCE OF A SHIPPING DOCUMENT TO YOUR COMPANY, WAS SET IN MOTION. HOWEVER, DURING THE FINAL REVIEW OF THE PROCUREMENT DOCUMENTS PRIOR TO AWARDING A CONTRACT TO YOUR COMPANY, IT WAS NOTED THAT PART XXX (B) (3) OF THE SPECIAL PROVISIONS REQUIRED ADDITION OF BOTH THE TOTAL REPAIR AND TOTAL REPLACEMENT BID PRICES ON ITEM 8, AS SET OUT ABOVE, FOR PURPOSES OF EVALUATION AND AWARD. RECOMPUTATION OF THE BIDS ON THAT BASIS RESULTED IN A TOTAL EVALUATED BID OF $10,344.47 BY YOUR COMPANY AND A TOTAL EVALUATED BID OF $9,290.77 BY THE U.S. RUBBER COMPANY. A CONTRACT WAS THEREFORE AWARDED TO U.S. RUBBER AS THE LOW BIDDER.

OUR REVIEW OF THE PROVISIONS OF THE IFB LEAVES NO DOUBT THAT PART XXX OF THE SPECIAL PROVISIONS CONTEMPLATED AND REQUIRED THE EVALUATION OF BID PRICES ON ITEM 8 BY INCLUDING BOTH THE TOTAL REPLACEMENT AND TOTAL REPAIR PRICES, AS WAS DONE IN THE FINAL EVALUATION ON WHICH THE AWARD TO U.S. RUBBER WAS BASED. WHILE THE FACT THAT THE GOVERNMENT COULD NOT BE REQUIRED TO PAY BOTH THE REPLACEMENT AND THE REPAIR BID PRICES ON ANY CONTAINER WOULD INDICATE THAT THIS METHOD OF EVALUATION WAS IMPROPER AND THEREFORE SHOULD NOT HAVE BEEN INCLUDED IN THAT IFB, THE RULE IS SETTLED THAT BIDS MAY NOT BE EVALUATED ON A DIFFERENT BASIS THAN THAT SET OUT IN THE IFB. IT IS EQUALLY WELL ESTABLISHED THAT AN IFB MAY NOT BE AMENDED, AFTER BID OPENING, TO PROVIDE FOR A NEW METHOD OF EVALUATION WHICH WOULD RESULT IN AWARD TO A DIFFERENT BIDDER. IT IS THEREFORE APPARENT THAT YOUR BID COULD NOT BE CONSIDERED THE LOW BID UNDER THE IFB AS WRITTEN, NOR COULD THE IFB HAVE BEEN AMENDED IN ANY MANNER, FOLLOWING THE OPENING OF BIDS, WHICH WOULD HAVE PERMITTED YOUR BID TO BE CONSIDERED THE LOWEST RECEIVED.

SINCE IT WOULD THEREFORE APPEAR THAT AN AWARD COULD NOT BE MADE TO YOUR COMPANY UNDER IFB 04-606-62-84, THE SOLE REMAINING QUESTION IS WHETHER THE AWARD TO U.S. RUBBER SHOULD BE CANCELLED AT THIS TIME AND BIDS BE RESOLICITED FOR THAT PORTION OF THE WORK WHICH HAS NOT YET BEEN COMPLETED BY THE CONTRACTOR. WHETHER SUCH ACTION SHOULD BE TAKEN DEPENDS PRIMARILY UPON WHETHER IT CAN BE ESTABLISHED THAT THE BID OF U.S. RUBBER WOULD NOT, IN FACT, HAVE BEEN THE LOWEST BID UNDER A DIFFERENT AND PROPER METHOD OF BID EVALUATION. THUS, WHILE THE 50-50 METHOD OF EVALUATION FIRST APPLIED TO THE BIDS IN THIS PROCUREMENT MAY CONSTITUTE A PROPER METHOD OF EVALUATION, IT IS APPARENT THAT THERE WAS NO ASSURANCE AT THE TIME THE IFB WAS ISSUED THAT ACTUAL EXPERIENCE DURING PERFORMANCE OF THE CONTRACT WOULD NOT RESULT IN EITHER 100 PERCENT REPAIR OR 100 PERCENT REPLACEMENT OF THE EXTERIOR CONTAINERS. HAD THE IFB PROVIDED FOR EVALUATION OF BIDS ON EITHER OF THESE BASES, THIS OFFICE WOULD THEREFORE HAVE HAD NO ALTERNATIVE BUT TO ACCEPT THE JUDGMENT OF THE CONTRACTING AGENCY AND CONSIDER SUCH EVALUATION PROPER. IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE EVALUATED BID PRICE OF U.S. RUBBER WOULD HAVE BEEN LOW ON THE BASIS OF 100 PERCENT REPLACEMENT UNDER ITEM 8, WHILE YOUR BID WOULD HAVE BEEN LOW ON THE BASIS OF 100 PERCENT REPAIR.

UNDER THE CIRCUMSTANCES, IT IS APPARENT THAT THIS OFFICE IS NOT IN A POSITION TO HOLD, WITHOUT QUALIFICATION, THAT YOUR BID PRICE, PROPERLY EVALUATED, WAS LOWER THAN THAT OF U.S. RUBBER. IN VIEW THEREOF, AND SINCE WE ARE ADVISED THAT THE CONTRACTOR HAS ALREADY ACCOMPLISHED A SUBSTANTIAL AMOUNT OF THE WORK UNDER THE CONTRACT, WE WOULD NOT BE JUSTIFIED IN DIRECTING CANCELLATION OF THE CONTRACT AWARDED, AND YOUR PROTEST AGAINST THE AWARD MUST THEREFORE BE DENIED.

IT SHOULD BE NOTED, HOWEVER, THAT THE CONTRACTING ACTIVITY HAS BEEN ADVISED OF THE ADVERSE EFFECT WHICH ERRORS OF THE NATURE INVOLVED IN THIS PROCUREMENT MAY BE EXPECTED TO HAVE ON RELATIONS WITH PROSPECTIVE CONTRACTORS, AND THE ACTIVITY HAS BEEN DIRECTED TO REVIEW AND MAKE NECESSARY CHANGES IN ITS BID EVALUATION SYSTEM WHICH WILL PREVENT RECURRENCE OF SUCH ERRORS. ADDITIONALLY, THE SECRETARY OF THE AIR FORCE IS BEING ADVISED OF OUR DISAGREEMENT WITH THE METHOD OF EVALUATION SET OUT IN THE IFB.