B-150014, NOV. 20, 1962

B-150014, NOV. 20, 1962

TO NORMAN JACOBSON, ESQUIRE:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF THE GENTEX CORPORATION AGAINST THE AWARD MADE TO THE SIERRA ENGINEERING COMPANY UNDER INVITATION FOR BIDS NO. 383-120-63, ISSUED BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

THE INVITATION REQUESTED BIDS TO BE OPENED ON AUGUST 29, 1962, FOR PILOT'S PROTECTIVE HELMETS UNDER TWO ITEMS. THE TWO ITEMS COVER THE SAME TYPE HELMET EXCEPT THAT ITEM 1 IS FOR MEDIUM SIZE HELMETS AND ITEM 2 IS FOR LARGE SIZE HELMETS. THE QUANTITY REQUIRED TO BE DELIVERED TO VARIOUS DESTINATIONS AND THE TOTAL QUANTITIES FOR ITEMS 1 AND 2, TOGETHER WITH SPACES FOR BIDDERS TO QUOTE PRICES THEREON, ARE SET FORTH ON PAGES 9 AND 10 OF THE BID SCHEDULE, RESPECTIVELY.

PAGE 1 OF THE BID SCHEDULE (STANDARD FORM 31, NOVEMBER 1949 EDITION) CONTAINS SPACES FOR BIDDERS TO SHOW DISCOUNTS OFFERED FOR PROMPT PAYMENT WITHIN 10, 20 AND 30 CALENDAR DAYS. THIS PARTICULAR INVITATION, HOWEVER, PROVIDED THAT PROMPT PAYMENT DISCOUNTS OF LESS THAN 30 DAYS WOULD NOT BE CONSIDERED IN THE EVALUATION OF THE BIDS.

TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. ONE WAS SUBMITTED BY GENTEX CORPORATION, CARBONDALE, PENNSYLVANIA (GENTEX). THE OTHER WAS SUBMITTED BY THE SIERRA ENGINEERING COMPANY, SIERRA MADRE, CALIFORNIA (SIERRA).

GENTEX OFFERED A UNIT PRICE OF $53.65 FOR BOTH ITEMS AND OFFERED A DISCOUNT OF 1/2 PERCENT FOR PAYMENT WITHIN 30 CALENDAR DAYS. THE TOTAL AMOUNT OF THE BID WAS $284,453.15 GROSS, AND $247,210.88 NET, FOR BOTH ITEMS.

SIERRA QUOTED UNIT PRICES OF $54.18 FOR ITEM 1 AND $53.81 FOR ITEM 2 ON PAGES 9 AND 10, RESPECTIVELY, OF THE BID SCHEDULE. AN ASTERISK WAS PLACED BETWEEN THE UNIT PRICE AND THE TOTAL AMOUNT FOR EACH ITEM WHICH REFERRED TO A STATEMENT TYPED ON BOTH PAGES, AS FOLLOWS: "*YOU MAY DEDUCT AN ADDITIONAL 1 PERCENT FROM THE SELLING PRICE IF WE ARE AWARDED 100 PERCENT OF ITEMS 1 AND 2.' SIERRA OFFERED, ON PAGE 1 OF THE BID SCHEDULE, A DISCOUNT OF 1/2 PERCENT FOR PAYMENT WITHIN 20 CALENDAR DAYS.

IN EVALUATING THE BIDS FOR AWARD THE CONTRACTING OFFICER INTERPRETEDSIERRA'S BID AS OFFERING A QUANTITY DISCOUNT OF 1 PERCENT FROM THE PRICES QUOTED IF AWARDED 100 PERCENT OF ITEMS 1 AND 2. ON SUCH BASIS THE TOTAL AMOUNT OF SIERRRA'S BID WAS $247,100.48. THE 1/2 PERCENT 20-DAY PAYMENT DISCOUNT WAS NOT CONSIDERED IN THE EVALUATION, SINCE IT WAS LESS THAN THE MINIMUM OF THE 30 DAYS REQUIRED BY THE INVITATION. AS SO EVALUATED, SIERRA'S BID WAS THE LOWEST RECEIVED, AND IT IS REPORTED THAT DURING THE EARLY PART OF THE MORNING OF OCTOBER 1, 1962 (MONDAY), THE CONTRACTING OFFICER SIGNED AN AWARD THAT HAD BEEN PREPARED ON THE BID FORM SUBMITTED BY SIERRA.

BY TELEGRAM DATED SEPTEMBER 28, 1962, RECEIVED IN THE AVIATION SUPPLY OFFICE ON SEPTEMBER 29 (SATURDAY), GENTEX PROTESTED AN AWARD OF A CONTRACT UNDER THE INVITATION TO ANYONE OTHER THAN ITSELF. IT IS REPORTED THAT THE TELEGRAM OF PROTEST WAS RECEIVED BY THE CONTRACTING OFFICER DURING THE LATTER PART OF THE AFTERNOON OF OCTOBER 1 (MONDAY), AND HE ASSUMED THAT THE AWARD TO SIERRA WHICH HE HAD SIGNED THAT MORNING HAD BEEN MAILED AND, THEREFORE, TOOK NO ACTION TO STOP THAT AWARD.

GENTEX CONTENDED IN THE TELEGRAM THAT SIERRA'S BID WAS ON THE BASIS OF 1/2 PERCENT PROMPT PAYMENT DISCOUNT, 20 DAYS, NET 30, AND AN ADDITIONAL DISCOUNT OF 1 PERCENT ON THE SAME TERMS, IF AWARDED THE ENTIRE QUANTITY, AND THAT, SINCE ANY DISCOUNT OF LESS THAN 30 DAYS WAS NOT TO BE TAKEN INTO CONSIDERATION IN EVALUATING THE BIDS, GENTEX WAS THE LOW BIDDER. IT WAS REQUESTED THAT IF IT WAS INTENDED TO MAKE AN AWARD TO SIERRA THE MATTER BE REFERRED TO THE COMPTROLLER GENERAL FOR REVIEW AND EVALUATION OF THE FORMAL PROTEST, AND IT WAS STATED THAT A DUPLICATE TELEGRAM WAS BEING SENT TO THE COMPTROLLER GENERAL. SUCH A TELEGRAM WAS RECEIVED IN THIS OFFICE.

IN YOUR LETTER OF OCTOBER 3, 1962, CONFIRMING THE TELEGRAM OF PROTEST, IT IS STATED IN PART AS FOLLOWS:

"AN EXAMINATION OF THE BID ABSTRACT SHOWS THAT GENTEX BID A TOTAL OF $248,453.15, LESS 1/2 PERCENT DISCOUNT FOR PAYMENT IN 30 DAYS. THE NET PRICE THEREFORE IS $247,210.88. SIERRA'S PRICE TOTALED $249,596.30, LESS 1/2 PERCENT DISCOUNT FOR PAYMENT IN 20 DAYS, NET 30 DAYS AND THE PROPOSAL WENT ON TO STATE "YOU MAY DEDUCT AN ADDITIONAL 1 PERCENT FROM THE AGGREGATE TOTAL BILLING PRICES IF WE ARE AWARDED 100 PERCENT OF ITEMS 1 AND 2.' THE QUOTED SENTENCE IS TAKEN FROM SIERRA'S PROPOSAL.

"CONDITION 101-2.2 TITLED "DISCOUNTS" APPEARING ON PAGE 10 OF THE IFB STATES THAT THE DISCOUNT PERIOD ALLOWED BY ANY BIDDER MUST BE A MINIMUM OF 30 DAYS OR THE DISCOUNT OFFERED WILL NOT BE CONSIDERED IN THE EVALUATION OF THE QUOTATIONS. SIERRA'S DISCOUNT WAS LIMITED TO 20 DAYS AND THEREFORE MUST BE ELIMINATED FROM CONSIDERATION. THE EXTRA ONE-PERCENT WAS IN ADDITION TO THE BASIC 1/2 PERCENT AND WAS SO INTENDED BY THE BIDDER OR ELSE THERE WAS NO POINT IN THE COMPANY STATING "YOU MAY DEDUCT AN ADDITIONAL 1 PERCENT . . .' OBVIOUSLY, THE 1 PERCENT WAS IN ADDITION TO THE 1/2 PERCENT, AND SINCE THE 1/2 PERCENT MUST BE IGNORED, THE "ADDITIONAL" 1 PERCENT CANNOT BE IN ADDITION TO SOMETHING WHICH ITSELF IS PROHIBITED FROM BEING CONSIDERED IN THE EVALUATION OF THE QUOTATIONS.'

WE DO NOT KNOW THE SOURCE OF THE QUOTED LANGUAGE "AGGREGATE TOTAL BILLING PRICES" SAID TO HAVE BEEN TAKEN FROM SIERRA'S PROPOSAL, BUT IT IS NOT IN ACCORDANCE WITH THE STATEMENT APPEARING ON THE OFFICIAL ABSTRACT OF BIDS, NOR IS IT IN ACCORDANCE WITH THE ACTUAL STATEMENTS APPEARING ON PAGES 9 AND 10 OF SIERRA'S BID, WHICH IS "YOU MAY DEDUCT AN ADDITIONAL 1 PERCENT FROM THE SELLING PRICE IF WE ARE AWARDED 100 PERCENT OF ITEMS 1 AND 2.'

WHILE IT MAY BE THAT THE INTENT OF THE WORD "ADDITIONAL" IS NOT CLEAR FROM SIERRA'S BID, WE SEE NO REASON TO SPECULATE AS TO ITS INTENDED MEANING. WE AGREE WITH THE CONTRACTING OFFICER THAT IT IS NOT REASONABLE TO CONSIDER THAT SUCH WORD HAS REFERENCE TO THE 1/2 PERCENT PROMPT PAYMENT DISCOUNT OFFERED ON PAGE 1 OF THE BID SCHEDULE, PARTICULARLY WHEN THE STATEMENTS ARE ON, AND ARE SPECIFICALLY REFERENCED TO, THE PRICES QUOTED ON PAGES 9 AND 10. IN OUR OPINION THE 1 PERCENT REASONABLY CAN BE INTERPRETED ONLY AS OFFERING A QUANTITY DISCOUNT IF AWARDED 100 PERCENT OF ITEMS 1 AND 2 AND HAS NO RELATION WHATSOEVER WITH THE PROMPT PAYMENT DISCOUNT. THIS CONCLUSION SEEMS INESCAPABLE WHEN IT IS CONSIDERED THAT THE 1 PERCENT WAS APPLICABLE TO THE SELLING PRICE, NOT THE BILLING PRICE, AND THAT MATING ASTERISKS ARE POSITIONED BETWEEN THE UNIT AND THE EXTENDED PRICES ON PAGES 9 AND 10 OF THE INVITATION AND NOT IN THE VICINITY OF THE PROMPT PAYMENT PROVISION ON PAGE 1.

IT IS CONTENDED THAT SIERRA'S USE OF THE WORD "ADDITIONAL" AT LEAST CREATES AN AMBIGUITY AND THAT AS A MATTER OF LAW AN AMBIGUITY IS TO BE INTERPRETED AGAINST THE PARTY USING THE WORD. IF IT BE CONSIDERED THAT SIERRA'S BID IS AMBIGUOUS, IT IS TO BE REASONABLY CONSTRUED AGAINST SIERRA IN FAVOR OF THE GOVERNMENT, WHO IS THE PARTY TO WHOM THE OFFER WAS MADE, AND NOT AGAINST SIERRA AND THE GOVERNMENT, IN FAVOR OF ANOTHER BIDDER. SEE 39 COMP. GEN. 546, ID. 653.

IT IS FURTHER CONTENDED IN YOUR LETTERS OF OCTOBER 10 AND 29, 1962, THAT REGARDLESS OF THE MERITS OF YOUR BASIC PROTEST AS TO THE PROPER INTERPRETATION OF SIERRA'S BID THE AWARD MADE TO SIERRA IS VOID AND IN VIOLATION OF LAW. THIS CONTENTION IS BASED ON THE FACT THAT THE CONTRACTING OFFICER HAD NOTICE OF THE GENTEX PROTEST AGAINST AN AWARD TO SIERRA AND THAT SUCH A PROTEST HAD ALSO BEEN MADE TO THE COMPTROLLER GENERAL, BUT NEVERTHELESS THE CONTRACTING OFFICER PROCEEDED WITH THE AWARD CONTRARY TO THE PROVISIONS OF ASPR 2-407.9 (B) (2) AND (3) AND OF 2-407.9 (A) OF THE NAVY PROCUREMENT DIRECTIVE.

THE CITED PROVISIONS OF ASPR AND NPD COVER PROCEDURES FOR HANDLING PROTESTS AGAINST AWARD OF CONTRACTS AND PROVIDE THAT WHERE A WRITTEN PROTEST AGAINST THE MAKING OF AN AWARD IS RECEIVED AWARD SHALL NOT BE MADE UNTIL THE MATTER IS RESOLVED, UNLESS THE CONTRACTING OFFICER MAKES CERTAIN DETERMINATIONS, AND THAT WHERE IT IS KNOWN THAT A PROTEST AGAINST THE MAKING OF AN AWARD HAS BEEN LODGED DIRECTLY WITH THE COMPTROLLER GENERAL THE DETERMINATION TO MAKE AWARD MUST BE APPROVED AT AN APPROPRIATE LEVEL ABOVE THAT OF THE CONTRACTING OFFICER.

WHILE THE RECORD INDICATES THAT INSOFAR AS THE CONTRACTING OFFICER WAS CONCERNED THERE WAS AN AWARD MADE IN THIS CASE PRIOR TO THE TIME HE BECAME AWARE OF THE PROTEST, THERE MAY BE A QUESTION WHETHER THE CONTRACTING OFFICER ACTED PROPERLY AFTER BECOMING AWARE OF THE PROTEST. HOWEVER, REGARDLESS OF THE QUESTION OF WHETHER THE CONTRACTING OFFICER DID OR DID NOT HAVE NOTICE, OR WAS ON CONSTRUCTIVE NOTICE, OF THE PROTEST PRIOR TO AWARD, SINCE THE AWARD WAS MADE TO THE LOW RESPONSIVE BIDDER WE DO NOT BELIEVE THAT THE FAILURE TO COMPLY WITH THE PROVISIONS OF THE ABOVE-CITED PROVISIONS OF ASPR AND NPD, WHICH ARE FOR THE BENEFIT OF THE GOVERNMENT, WOULD RENDER INVALID AN OTHERWISE PROPER AWARD. SEE NEW YORK AND PUERTO RICO STEAMSHIP CO. V. UNITED STATES, 239 U.S. 88.

FOR THE FOREGOING REASONS WE FIND NO LEGAL BASIS TO QUESTION THE AWARD MADE TO SIERRA ENGINEERING COMPANY AND, THEREFORE, YOUR PROTEST IS DENIED.