B-149051, JUN. 29, 1962

B-149051: Jun 29, 1962

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TO ALVEY-FERGUSON COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 1. "PRICES ARE TO BE QUOTED ON THIS MEMORANDUM IN THE SPACE PROVIDED ABOVE. "AWARD WILL BE MADE TO LOWEST BIDDER IN THE AGGREGATE.'. SUBSEQUENT TO THE ISSUANCE OF THIS MEMORANDUM TELEPHONE CALLS WERE RECEIVED FROM THE JERVIS B. THESE INQUIRIES WERE ANSWERED BY STATING THAT THE DEPARTMENT WOULD MAKE AWARD FOR THE TOTAL COST FOR THE ENTIRE SYSTEM AND THE OTHER THREE FIGURES WERE REQUIRED FOR INTERNAL INFORMATION AND BUDGETARY REASONS. SIX BIDS WERE RECEIVED. THE TWO LOWEST BIDS RECEIVED WERE SUBMITTED BY YOU AND THE JERVIS B. YOUR BID ON ITEM 4 WAS IN THE AMOUNT OF $1. 422 AND WEBB'S BID ON ITEM 4 WAS IN THE AMOUNT OF $1.

B-149051, JUN. 29, 1962

TO ALVEY-FERGUSON COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 1, 1962, LETTERS OF JUNE 8, AND 14, 1962, FROM YOUR REPRESENTATIVE, COOPER AND MINICH, INC., AND LETTER OF JUNE 22, 1962, FROM YOUR ATTORNEYS, PROTESTING THE POSSIBLE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. 2111 ISSUED APRIL 31, 1962, BY THE POST OFFICE DEPARTMENT FOR FURNISHING AND INSTALLING THE BULK MAIL HANDLING SYSTEM IN THE UNITED STATES POST OFFICE, SAINT PAUL, MINNESOTA.

THE INVITATION SOLICITED BIDS, TO BE OPENED MAY 31, 1962, FOR THE ABOVE SUPPLIES AND EQUIPMENT. THE INVITATION, AS ORIGINALLY ISSUED, CALLED FOR BIDS ON A "TOTAL COST OF THE ENTIRE SYSTEM" BASIS. HOWEVER, ON MAY 23, 1962, THE DEPARTMENT ISSUED A MEMORANDUM TO PROSPECTIVE BIDDERS, CHANGING A PORTION OF THE SPECIFICATIONS AND CHANGING THE WORDING ON A PORTION OF THE INVITATION AS FOLLOWS:

"THE "TOTAL COST OF THE ENTIRE SYSTEM" APPEARING ON PAGE 2A OF THE INVITATION FOR BIDS SHALL BE CHANGE TO READ AS FOLLOWS:

TABLE

"1. COST OF SACKED MAIL AND LOOSE

PARCEL CONVEYORS. $----------

"2. COST FOR THE PARCEL SORTING

MACHINE. $----------

"3. COST FOR THE TROLLEY CONVEYOR. $----------

"4. TOTAL COST OF THE ENTIRE SYSTEM. $----------

"PRICES ARE TO BE QUOTED ON THIS MEMORANDUM IN THE SPACE

PROVIDED ABOVE.

"AWARD WILL BE MADE TO LOWEST BIDDER IN THE AGGREGATE.'

SUBSEQUENT TO THE ISSUANCE OF THIS MEMORANDUM TELEPHONE CALLS WERE RECEIVED FROM THE JERVIS B. WEBB COMPANY AND THE AEROJET-GENERAL CORPORATION ASKING FOR A CLARIFICATION OF THE INTENTION OF THE PRICE BREAKDOWN REQUIRED BY THE MEMORANDUM. THESE INQUIRIES WERE ANSWERED BY STATING THAT THE DEPARTMENT WOULD MAKE AWARD FOR THE TOTAL COST FOR THE ENTIRE SYSTEM AND THE OTHER THREE FIGURES WERE REQUIRED FOR INTERNAL INFORMATION AND BUDGETARY REASONS.

SIX BIDS WERE RECEIVED. THE TWO LOWEST BIDS RECEIVED WERE SUBMITTED BY YOU AND THE JERVIS B. WEBB COMPANY. YOUR BID ON ITEM 4 WAS IN THE AMOUNT OF $1,993,422 AND WEBB'S BID ON ITEM 4 WAS IN THE AMOUNT OF $1,880,970. THE AMOUNTS SHOWN ON YOUR BID ON ITEM 4 WAS IN THE AMOUNT OF $1,880,970. THE AMOUNTS SHOWN ON YOUR BID UNDER ITEMS 1, 2 AND 3, TOTALED THE AMOUNT SHOWN AS THE COST FOR THE ENTIRE SYSTEM UNDER ITEM 4. THE AMOUNTS SHOWN BY WEBB UNDER ITEMS 1, 2 AND 3 WERE IN THE RESPECTIVE AMOUNTS OF $1,445,705, $591,072 AND $14,481 OR A TOTAL OF $2,051,258. WHILE ABSTRACTING THE BIDS IT WAS NOTED THAT THE PRICE BID FOR ITEM 4 BY WEBB WAS NOT THE SUM TOTAL OF ITEMS 1, 2 AND 3. FOR THIS REASON VERIFICATION WAS REQUESTED. WEBB REPLIED THAT IT HAD INTERPRETED THE PHRASE "IN THE AGGREGATE" AS SYNONYMOUS WITH THE PHRASE "FOR THE ENTIRE SYSTEM; " THAT IT HAD CONFIRMED ITS INTERPRETATION WITH THE DEPARTMENT BEFORE SUBMITTING ITS BID, AND THAT IT WAS INFORMED THAT AMOUNTS OF THE INDIVIDUAL ITEMS WERE REQUESTED FOR PURPOSES OTHER THAN AWARD. IT EXPLAINED THAT LOWER COSTS FOR THREE ITEMS IN THE AGGREGATE THAN "FOR EACH ITEM SEPARATELY MERELY REFLECTS WELL-KNOWN FACT THAT SEVERAL RELATED CONVEYOR SYSTEMS CAN BE SUPPLIED AS A SINGLE PROJECT AT LESS COST TO CUSTOMER THAN AS SEPARATE SYSTEM.'

IN YOUR TELEGRAM OF JUNE 1, 1962, YOU CONTEND THAT THE CONTRACT SHOULD BE AWARDED TO YOU. YOU STATE THAT THE DICTIONARY DEFINES THE TERM "IN THE AGGREGATE" AS THE "SUM" AND IN THIS PARTICULAR CASE THE AGGREGATE REPRESENTS THE SUM OF ITEMS 1, 2 AND 3. ALSO, YOU CONTEND THAT ALL BIDDERS EXCEPT WEBB INTERPRETED THE MEMORANDUM AS YOU DID. IN A LETTER OF JUNE 22 FROM YOUR ATTORNEYS IT IS STATED THAT IN "OUR CLIENT'S PRELIMINARY CONVERSATIONS WITH THE POST OFFICE, THEY WERE GIVEN TO BELIEVE THAT "AGGREGATE" MEANT THE SUM OF THE INDIVIDUAL ITEMS STATED IN THE FIRST THREE SPECIFICATIONS OF THE BID.' YOUR REPRESENTATIVE, COOPER AND MINICH, INC., CONTENDS THAT "STANDARD FORM 30 (33) STATES THAT IN CASE OF ERROR IN THE EXTENSION THE UNIT PRICE WILL GOVERN.' ALSO, YOUR REPRESENTATIVE, IN A LETTER OF JUNE 8, REFERS TO PREVIOUS INVITATIONS FOR BIDS ISSUED BY THE POST OFFICE DEPARTMENT ON SIMILAR PROJECTS WHICH PERMITTED BIDDERS TO BID ON ITEMS INDIVIDUALLY OR IN COMBINATION, WITH AWARDS BEING MADE WHICH WERE MOST FAVORABLE TO THE GOVERNMENT.

WITH REGARD TO YOUR MAIN CONTENTION THAT THE TERM "IN THE AGGREGATE" MUST BE CONSTRUED AS THE SUM OF ITEMS 1, 2 AND 3, IT MAY BE POINTED OUT THAT IN THE FIRST PLACE THE INVITATION AS ORIGINALLY ISSUED REQUIRED A BID ONLY ON A "TOTAL COST OF THE ENTIRE SYSTEM" BASIS. IN THE MEMORANDUM OF MAY 23, 1962, IT IS ABUNDANTLY CLEAR THAT THE AMOUNTS TO BE INSERTED AS COSTS UNDER ITEMS 1, 2 AND 3 WERE NOT TO BE USED FOR EVALUATION PURPOSES. ALSO, IF THE AMOUNT UNDER ITEM 4 WAS REQUIRED TO BE THE SUM OF THE AMOUNTS SET OUT UNDER ITEMS 1, 2 AND 3, THEN THE REQUIREMENT FOR A PRICE TO BE INSERTED UNDER ITEM 4 AS THE COST OF THE ENTIRE SYSTEM WAS SUPERFLUOUS SINCE THIS WOULD MERELY ENTAIL THE MATHEMATICAL PROCESS OF SIMPLE ADDITION. IN THE LETTER OF JUNE 8, YOUR REPRESENTATIVE STATES THAT WEBSTER'S DICTIONARY DEFINES "IN THE AGGREGATE" AS "THE SUM.' REFERENCE TO WEBSTER'S NEW INTERNATIONAL DICTIONARY, SECOND EDITION, UNABRIDGED, PAGE 49, LISTS THE PHRASE "IN THE AGGREGATE" AS MEANING COLLECTIVELY OR TOGETHER. ALSO, ON PAGE 2525 OF THAT DICTIONARY THERE ARE LISTED THE SYNONYMS UNDER THE WORD "SUM.' THE WORD "SUM" IS SHOWN AS DENOTING THE RESULT OF SIMPLE ADDITION WHILE THE WORD "AGGREGATE" IS SHOWN AS IMPLYING A RESULT REACHED BY THE ASSEMBLING OR COLLECTION OF PARTICULARS. WHILE IT IS CONTENDED THAT ALL BIDDERS EXCEPT WEBB INTERPRETED THE MEMORANDUM OF MAY 23 AS YOU DID, THE REPORT OF THE DEPARTMENT ON JUNE 11, 1962, INDICATES THAT THIS IS MERELY AN OPINION AND IT IS STATED THAT THE OTHER BIDDERS COULD HAVE "CREDITED EACH ITEM RATHER THAN DEDUCTING FROM THE SUM OF SUCH ITEMS THE DECREASE IN COST RESULTING FROM FURNISHING AN ENTIRE SYSTEM RATHER THAN A PART OF THE SYSTEM.'

WITH REGARD TO THE TERMS OF THE INVITATION APPEARING ON THE REVERSE SIDE OF PAGE 1 OF THE BID FORM, PARAGRAPH 1 (C) PROVIDES AS FOLLOWS:

"/C) UNIT PRICE FOR EACH UNIT BID ON SHALL BE SHOWN AND SUCH PRICE SHALL INCLUDE PACKING UNLESS OTHERWISE SPECIFIED. A TOTAL SHALL BE ENTERED IN THE AMOUNT COLUMN OF THE SCHEDULE FOR EACH ITEM BID ON. IN CASE OF ERROR IN EXTENSION OF PRICE, THE UNIT PRICE WILL GOVERN.'

IT IS PLAIN THAT THE MATTER HERE IS NOT ONE OF QUOTING ON ONE UNIT WHERE THERE ARE A NUMBER OF UNITS TO BE PURCHASED SO THAT IT BECOMES A MATTER OF PROPER MULTIPLICATION. THE MATTER OF EXTENSION OF PRICE IS NOT INVOLVED HERE.

AS TO THE MATTER OF GIVING WEBB TWO CHANCES ON ITS BID BY REASON OF THE REQUEST FOR VERIFICATION, IF ITS BID IS CONSIDERED RESPONSIVE, THE DEPARTMENT REPORTS THAT IT WAS FELT THAT ALTHOUGH THERE WAS NO REASON TO SUSPECT THAT AN ERROR HAD BEEN MADE, CONFIRMATION OF THE PRICES WAS REQUESTED TO PREVENT THE COMPANY FROM CLAIMING AN ERROR SUBSEQUENT TO AN AWARD, CITING IN SUPPORT THEREOF 39 COMP. GEN. 653. IN FACT, IT APPEARS FROM THE TELEGRAM OF JUNE 1, 1962, TO WEBB THAT THE REQUEST FOR CONFIRMATION WAS PROMPTED BY THE FAILURE OF WEBB TO INSERT THE DOLLARS-AND -CENTS FIGURE ON ITS BID BOND. IN THIS CONNECTION WE HAVE BEEN ADVISED THAT THE BID BOND ONLY SHOWED 20 PERCENT OF THE AMOUNT BID. FURTHERMORE, WEBB WOULD BE ESTOPPED FROM CLAIMING THAT ITS LUMP SUM BID WAS ERRONEOUS ON THE BASIS THAT IT WAS NOT THE SUM OF ITEMS 1, 2 AND 3, IN VIEW OF ITS INQUIRY REGARDING THE PURPOSE OF THE PRICE BREAKDOWN. IN ADDITION, THE METHOD OF BIDDING EMPLOYED BY WEBB IS NOT NOVEL IN THE COMMERCIAL WORLD, ESPECIALLY AS FAR AS WEBB IS CONCERNED, SINCE THE RECORD SHOWS PREVIOUS DEALINGS WITH THE GOVERNMENT IN A SIMILAR MANNER. AN EXAMINATION OF THE PHOTOSTAT COPY OF THE WORKSHEETS REVEALS THAT THE BID WAS AS INTENDED.

IN VIEW OF THE FOREGOING WE AGREE WITH THE RECOMMENDATION OF THE POST OFFICE DEPARTMENT THAT YOUR PROTEST BE REJECTED.