B-149208, SEP. 14, 1962

B-149208: Sep 14, 1962

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INC: FURTHER REFERENCE IS MADE TO LETTERS DATED JUNE 18 AND JUNE 25. IT IS YOUR CONTENTION THAT STANDARD CONTAINER. JUST BELOW THESE UNIT PRICES IT INSERTED THE FOLLOWING LANGUAGE: "ABOVE PRICES ARE PREDICATED ON THE QUANTITIES INDICATED.'. IT INSERTED THE STATEMENT: "ABOVE BID IS PREDICATED ON A COMBINED AWARD OF BOTH ITEM 1 AND ITEM 2.'. WE ARE CONVINCED. IS TO BE FOUND IN PARAGRAPH 8 (C) OF THE TERMS AND CONDITIONS OF THE INVITATION WHICH READS AS FOLLOWS: "THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID. IT IS OBVIOUS THAT STANDARD'S BID QUALIFICATION CONCERNING A COMBINED AWARD OF ITEMS 1 AND 2 WAS INTENDED TO TAKE ADVANTAGE OF THE PERMISSION GRANTED BY THE FIRST SENTENCE OF PARAGRAPH 8 (C) TO BID ON AN ALL OR NONE BASIS AS TO ITEMS.

B-149208, SEP. 14, 1962

TO KUSIC-HAINES MANUFACTURING CO., INC:

FURTHER REFERENCE IS MADE TO LETTERS DATED JUNE 18 AND JUNE 25, 1962, AND SUBSEQUENT CORRESPONDENCE FROM THE ABOVE-CAPTIONED LAW FIRM, WRITTEN IN YOUR BEHALF, PROTESTING AN AWARD TO STANDARD CONTAINER, INC., MONTCLAIR, NEW JERSEY, UNDER IFB-ORD-11-173-62-75. IN BRIEF, IT IS YOUR CONTENTION THAT STANDARD CONTAINER, INC., BY INSERTING CERTAIN LANGUAGE IN ITS BID NULLIFIED THE OPTION RESERVED TO THE GOVERNMENT TO ORDER INCREASED QUANTITIES.

THE INVITATION CALLED FOR BIDS ON TWO TYPES OF AMMUNITION BOXES. STANDARD BID $1.15 EACH FOR THE 523,300 BOXES CALLED FOR UNDER ITEM 1, FOR A TOTAL OF $601,795; IT BID $0.815 EACH FOR THE 112,800 BOXES CALLED FOR UNDER ITEM 2, FOR A TOTAL OF $91,932. JUST BELOW THESE UNIT PRICES IT INSERTED THE FOLLOWING LANGUAGE:

"ABOVE PRICES ARE PREDICATED ON THE QUANTITIES INDICATED.'

A FEW LINES BELOW THAT, FOLLOWING A NOTE IN THE INVITATION CONCERNING BIDS ON DIFFERENT MODES OF TRANSPORTATION, IT INSERTED THE STATEMENT:

"ABOVE BID IS PREDICATED ON A COMBINED AWARD OF BOTH ITEM 1 AND ITEM 2.'

THE REASON FOR THE INSERTION OF THESE QUALIFICATIONS BY STANDARD, WE ARE CONVINCED, IS TO BE FOUND IN PARAGRAPH 8 (C) OF THE TERMS AND CONDITIONS OF THE INVITATION WHICH READS AS FOLLOWS:

"THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATION. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, BIDS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED: AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY BID UPON AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN HIS BID.'

IT IS OBVIOUS THAT STANDARD'S BID QUALIFICATION CONCERNING A COMBINED AWARD OF ITEMS 1 AND 2 WAS INTENDED TO TAKE ADVANTAGE OF THE PERMISSION GRANTED BY THE FIRST SENTENCE OF PARAGRAPH 8 (C) TO BID ON AN ALL OR NONE BASIS AS TO ITEMS. WE FAIL TO SEE HOW STANDARD'S ALL OR NONE BID ON BOTH ITEMS HAS ANY BEARING WHATEVER ON THE OPTION RESERVED BY THE GOVERNMENT TO INCREASE THE QUANTITY UNDER EITHER OR BOTH ITEMS.

IT IS YOUR CONTENTION THAT THE OTHER QUALIFICATION IN STANDARD'S BID, NAMELY, THAT ITS UNIT PRICES OF $1.15 AND $0.815 FOR ITEMS 1 AND 2 RESPECTIVELY WERE PREDICATED ON "THE QUANTITIES INDICATED," SHOULD BE CONSTRUED AS IMPOSING A MAXIMUM LIMIT OF 523,300 UNITS UNDER ITEM 1 AND 112,800 UNITS UNDER ITEM 2 WHICH STANDARD WAS WILLING TO SUPPLY AT THE UNIT PRICES IT QUOTED. WE DO NOT AGREE WITH THIS POSITION FOR THE FOLLOWING REASONS. BY THE TERMS OF THE LAST SENTENCE OF PARAGRAPH 8 (C) QUOTED ABOVE STANDARD WAS FACED WITH THE POSSIBILITY THAT, UNLESS IT SPECIFIED OTHERWISE IN ITS BID, THE GOVERNMENT COULD AWARD IT LESS THAN 523,300 BOXES UNDER ITEM 1 AND LESS THAN 112,800 BOXES UNDER ITEM 2 AT THE SAME UNIT PRICES IT HAD BID FOR THE LARGER QUANTITIES. WE ARE CONVINCED IT WAS TO AVOID THIS POSSIBILITY THAT STANDARD SAID ITS UNIT PRICES WERE PREDICATED ON THE QUANTITIES INDICATED. IT SHOULD BE NOTED THAT THE COMPANY DID NOT SAY ITS QUOTED PRICES WERE PREDICATED ON 523,300 AND 112,800 UNITS FOR ITEMS 1 AND 2 RESPECTIVELY. IT SAID ITS PRICES WERE PREDICATED ON "THE QUANTITIES INDICATED.' THE QUANTITIES "INDICATED" BY THE INVITATION WERE FROM 523,300 AND 112,800 UNITS TO 170 PERCENT OF THOSE QUANTITIES, DEPENDING ON THE EXERCISE OF THE GOVERNMENT'S OPTION. THE OPTION QUANTITY BEING INCLUDED IN THE "QUANTITIES INDICATED," WE CANNOT CONCLUDE THAT THE COMPANY HAS PLACED ITSELF IN THE POSITION WHERE IT COULD LEGALLY REFUSE TO ACCEPT AN EXERCISE OF THE GOVERNMENT'S OPTION.

FURTHERMORE, IT CONTRAVENES COMMON EXPERIENCE TO ASSUME THAT UNIT PRICES WILL INCREASE AS THE QUANTITY PURCHASED INCREASES WHERE, AS HERE, THE OPTIONAL INCREASE IS TO BE DELIVERED IMMEDIATELY AFTER AND AT THE SAME RATE AS THE BASIC QUANTITY AND THE OPTION MUST BE EXERCISED ONE MONTH PRIOR TO THE COMMENCEMENT OF BASIC DELIVERIES WHICH EXTEND OVER A FIVE- MONTH PERIOD. WHILE IT S ARGUED THAT THE QUALIFICATION CONCERNING UNIT QUANTITIES UNDER EACH ITEM WAS UNNECESSARY IN VIEW OF STANDARD'S "ALL OR NONE" QUALIFICATION AS TO ITEMS 1 AND 2, THE LANGUAGE OF PARAGRAPH 8 (C) DOES NOT CLEARLY COMPEL SUCH A CONCLUSION SINCE IT TREATS ITEMS THEMSELVES AND QUANTITIES UNDER EACH ITEM SEPARATELY. WE CERTAINLY COULD NOT FAULT A BIDDER FOR TAKING CARE IN HIS BID TO COVER BOTH CONTINGENCIES, AND WE THINK THAT STANDARD'S UNWILLINGNESS TO ACCEPT AWARD FOR LESS THAN BOTH ITEMS ARGUES FOR CONSTRUCTION OF ITS OTHER QUALIFICATION MERELY AS A MINIMUM LIMIT ON THE QUANTITIES IT WAS OFFERING UNDER EACH ITEM AT ITS BID PRICES.

ACCORDINGLY, IT IS OUR OPINION THAT STANDARD'S BID DID NOT NULLIFY THE GOVERNMENT'S RIGHT TO ORDER ADDITIONAL QUANTITIES OF EITHER OR BOTH ITEMS AND COULD NOT BE CONSIDERED NONRESPONSIVE FOR THIS REASON.

WHILE YOUR ATTORNEY'S LETTER OF JUNE 18, 1962, RAISES THE ADDITIONAL GROUND OF PROTEST THAT THE AWARD MADE FAILS TO RECOGNIZE THE "PRIORITY DUE TO COMPANIES WHICH ARE NOT ONLY SMALL BUSINESS BUT ALSO ARE LOCATED IN AN AREA OF PERSISTENT AND SUBSTANTIAL LABOR SURPLUS," WE HAVE NOT BEEN INFORMED OF ANY STATUTORY OR REGULATORY REQUIREMENT THAT ALL PROCUREMENT SET-ASIDES BE MADE ON A LABOR SURPLUS AREA BASIS, RATHER THAN ON A SMALL BUSINESS BASIS AS WAS DONE IN THIS CASE.

FOR THE REASONS STATED, WE FIND NO BASIS FOR HOLDING THE AWARD TO BE INVALID.