B-149730, OCT. 12, 1962

B-149730: Oct 12, 1962

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YOUR LOW BID WAS REJECTED AS NONRESPONSIVE BECAUSE YOU REQUESTED PROGRESS PAYMENTS. PROSPECTIVE BIDDERS WERE NOT ADVISED THAT BIDS CONDITIONED ON THE RECEIPT OF PROGRESS PAYMENTS WOULD BE DECLARED NONRESPONSIVE. PROVIDES IN PART: "PROVISION FOR PROGRESS PAYMENTS SHALL BE MADE IN INVITATIONS FOR BIDS WHENEVER THE CONTRACTING OFFICER CONSIDERS (1) THAT THE PERIOD BETWEEN THE BEGINNING OF WORK AND THE REQUIRED FIRST PRODUCTION DELIVERY WILL EXCEED SIX MONTHS * * *.'. BOTH THE 2ND AND FINAL DRAFTS SHALL BE DELIVERED WITHIN 30 DAYS AFTER BUREAU REVIEWS ARE COMPLETED. THE BUREAU SHALL HAVE 60 DAYS TO REVIEW THE FIRST DRAFT AND 30 DAYS TO REVIEW EACH OF THE SUBSEQUENT DRAFTS.'. " IT IS CLEAR THAT THE DEPARTMENT OF THE NAVY SHOULD HAVE INCLUDED A PROVISION FOR PROGRESS PAYMENTS IN INVITATION FOR BIDS 600 1449-62.

B-149730, OCT. 12, 1962

TO EDWARD T. JOHNSON AND ASSOCIATES:

IN YOUR LETTER OF AUGUST 16, 1962, YOU PROTEST THE AWARD OF A CONTRACT ON AUGUST 2, 1962, FOR REVISING, UPDATING AND EXPANSION OF THE BUREAU OF AERONAUTICS PROCUREMENT MANAGEMENT HANDBOOK AND CORRESPONDENCE COURSE, TO GOODWAY PRINTING COMPANY, ISSUED PURSUANT TO INVITATION FOR BIDS 600-1449- 62. YOUR LOW BID WAS REJECTED AS NONRESPONSIVE BECAUSE YOU REQUESTED PROGRESS PAYMENTS. THE DEPARTMENT OF NAVY REPORTS THAT THE INVITATION DID NOT PROVIDE FOR PROGRESS PAYMENTS BECAUSE OF THE RELATIVELY LOW DOLLAR VALUE OF THE PROCUREMENT. HOWEVER, CONTRARY TO CURRENT PROCUREMENT REGULATIONS, PROSPECTIVE BIDDERS WERE NOT ADVISED THAT BIDS CONDITIONED ON THE RECEIPT OF PROGRESS PAYMENTS WOULD BE DECLARED NONRESPONSIVE.

SECTION 2307 OF TITLE 10, U.S.C. PROVIDES THAT THE HEAD OF ANY AGENCY MAY MAKE PROGRESS PAYMENTS UNDER CONTRACTS FOR PROPERTY OR SERVICES MADE BY THE AGENCY. SECTION 504.1, PART 5, APPENDIX "E," ARMED SERVICES PROCUREMENT REGULATION, ISSUED PURSUANT TO THIS STATUTE, PROVIDES IN PART:

"PROVISION FOR PROGRESS PAYMENTS SHALL BE MADE IN INVITATIONS FOR BIDS WHENEVER THE CONTRACTING OFFICER CONSIDERS (1) THAT THE PERIOD BETWEEN THE BEGINNING OF WORK AND THE REQUIRED FIRST PRODUCTION DELIVERY WILL EXCEED SIX MONTHS * * *.'

"REASONABLE DOUBTS SHOULD BE RESOLVED IN FAVOR OF INCLUSION OF PROGRESS PAYMENT PROVISIONS IN INVITATIONS FOR BIDS, IN ORDER TO * * * AVOID THE NECESSITY FOR REJECTING, AS NONRESPONSIVE, BIDS CONDITIONED ON PROGRESS PAYMENTS WHEN THE INVITATIONS FOR BIDS DO NOT PROVIDE FOR PROGRESS PAYMENTS.'

THE SUBJECT INVITATION PROVIDES:

"TIME OF DELIVERY

"THE CONTRACTOR SHALL DELIVER THE FIRST DRAFT OF ALL CHAPTERS OF THE TEXT 150 DAYS AFTER DATE OF CONTRACT. BOTH THE 2ND AND FINAL DRAFTS SHALL BE DELIVERED WITHIN 30 DAYS AFTER BUREAU REVIEWS ARE COMPLETED. THE BUREAU SHALL HAVE 60 DAYS TO REVIEW THE FIRST DRAFT AND 30 DAYS TO REVIEW EACH OF THE SUBSEQUENT DRAFTS.'

THUS, IT APPEARS THAT THE PERIOD BETWEEN THE BEGINNING OF WORK AND THE REQUIRED FIRST PRODUCTION DELIVERY WOULD RANGE BETWEEN 6 AND 10 MONTHS. IN VIEW OF THE STATUTORY AUTHORIZATION REGARDING PROGRESS PAYMENTS, AND THE MANDATORY LANGUAGE OF THE ABOVE-QUOTED PART OF APPENDIX "E," IT IS CLEAR THAT THE DEPARTMENT OF THE NAVY SHOULD HAVE INCLUDED A PROVISION FOR PROGRESS PAYMENTS IN INVITATION FOR BIDS 600 1449-62. THE DEPARTMENT WILL BE ADVISED OF THIS CONCLUSION.

HOWEVER, WE DO NOT BELIEVE IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO CANCEL THE AWARD OF A CONTRACT MADE IN GOOD FAITH TO AN INNOCENT BIDDER, WHO HAS ALREADY COMMENCED PRODUCTION AND HAS SUBMITTED ITS FIRST DRAFT OF THE REVISION FOR APPROVAL. THIS BELIEF IS REINFORCED BY THE FACT THAT THE DIFFERENCE BETWEEN YOUR BID AND THE $10,525 BID OF GOODWAY PRINTING COMPANY WAS ONLY $238.39. ACCORDINGLY, OUR OFFICE WILL TAKE NO FURTHER ACTION IN THIS MATTER.