B-150948, MARCH 27, 1963, 42 COMP. GEN. 532

B-150948: Mar 27, 1963

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THE INVITATION INDICATING ONLY THAT THE SEPARATE AND INDEPENDENT PLANTS WERE TO BE AVAILABLE AT THE TIME OF PRODUCTION AND NOT REQUIRING THAT BIDS ESTABLISH THE EXISTENCE OF TWO PLANTS ON BID OPENING DAY. 1963: REFERENCE IS MADE TO YOUR TELEGRAM DATED MARCH 1. IT IS NECESSARY THAT THE TOTAL NUMBER OF RADIO SETS TO BE PROCURED UNDER THIS INVITATION FOR BID BE PRODUCED IN TWO PLANTS OR FACILITIES WHICH ARE ENTIRELY SEPARATE AND OPERATED INDEPENDENTLY FROM EACH OTHER. ACCOMPLISH THIS OBJECTIVE THE REQUIREMENTS OF THIS SOLICITATION ARE DIVIDED INTO TWO GROUPS CONTAINING EQUAL QUANTITIES AS FOLLOWS: GROUP 1 GROUP 2 (ITEMS 1 THRU 16. GROUP 1 WILL BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER SUBMITTING A BID ON EITHER GROUP.

B-150948, MARCH 27, 1963, 42 COMP. GEN. 532

BIDDERS - QUALIFICATIONS - CAPACITY, ETC. - PLANT FACILITIES AN AWARD UNDER AN INVITATION FOR BIDS ON TWO IDENTICAL GROUPS OF EQUIPMENT TO BE PRODUCED FOR REASONS OF NATIONAL DEFENSE AND INDUSTRIAL MOBILIZATION AT TWO SEPARATE AND INDEPENDENT PLANTS TO THE LOW BIDDER WHO AT THE TIME OF BID OPENING HAD ONLY ONE PLANT IN OPERATION WOULD BE PROPER, THE INVITATION INDICATING ONLY THAT THE SEPARATE AND INDEPENDENT PLANTS WERE TO BE AVAILABLE AT THE TIME OF PRODUCTION AND NOT REQUIRING THAT BIDS ESTABLISH THE EXISTENCE OF TWO PLANTS ON BID OPENING DAY, AND THE INFORMATION GOING TO THE RESPONSIBILITY OF THE BIDDER RATHER THAN THE RESPONSIVENESS OF THE BID, THE LOW BIDDER HAVING SATISFIED THE CONTRACTING OFFICER AFTER BID OPENING OF ABILITY TO MEET THE CONTRACT COMMITMENTS UNDER THE CONDITIONS OF SEPARATION AND INDEPENDENCE OF THE REQUIRED FACILITIES MAY BE AWARDED THE CONTRACT.

TO THE HOFFMAN ELECTRONICS CORPORATION, MARCH 27, 1963:

REFERENCE IS MADE TO YOUR TELEGRAM DATED MARCH 1, 1963, AND TO YOUR LETTERS OF MARCH 11 AND 13, 1963, PROTESTING AGAINST AN AWARD BEING MADE TO THE MAGNAVOX COMPANY FOR BOTH GROUPS OF RADIO SET AN/VRC-12 ADVERTISED IN INVITATION FOR BIDS AMC-36-039-63-230-A1.

THE INVITATION FOR BIDS, INSOFAR AS PERTINENT TO THE PROTEST, PROVIDES AS FOLLOWS:

SCOPE

1. FOR REASONS OF NATIONAL DEFENSE AND INDUSTRIAL MOBILIZATION, IT IS NECESSARY THAT THE TOTAL NUMBER OF RADIO SETS TO BE PROCURED UNDER THIS INVITATION FOR BID BE PRODUCED IN TWO PLANTS OR FACILITIES WHICH ARE ENTIRELY SEPARATE AND OPERATED INDEPENDENTLY FROM EACH OTHER. ACCOMPLISH THIS OBJECTIVE THE REQUIREMENTS OF THIS SOLICITATION ARE DIVIDED INTO TWO GROUPS CONTAINING EQUAL QUANTITIES AS FOLLOWS:

GROUP 1 GROUP 2 (ITEMS 1 THRU 16, 24, 25 AND 26 (ITEMS 27 THRU 42, 50, 51 AND 52 CONSISTING OF:) CONSISTING OF:) A. 361 EA. RT-246) ( (VRC A. 361 EA. RT-246 ( ( (VRC B. 3535 EA. RT-524 ( ( (VRC B. 3535 EA. RT-524 ( ( (VRC C. 937 EA. R-442 ( ( (VRC C. 937 EA. R-442 ( ( (VRC D. ASSOCIATED ANCILLARY ITEMS D. ASSOCIATED ANCILLARY ITEMS

2. GROUP 1 WILL BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER SUBMITTING A BID ON EITHER GROUP. GROUP 2 WILL BE AWARDED TO THE SECOND LOWEST RESPONSIBLE BIDDER SUBMITTING A BID ON EITHER GROUP. BIDDERS ARE NOT REQUIRED TO BID ON BOTH GROUPS; HOWEVER, BIDS ON ONLY A PORTION OF EITHER GROUP WILL BE NONRESPONSIVE.

3. IN THE EVENT THAT A SINGLE FIRM DESIRES TO SUBMIT BIDS ON THE TOTAL QUANTITY OF RADIO SETS (BOTH GROUPS), IT MUST, TO BE RESPONSIVE, OFFER TO PRODUCE EACH GROUP IN PLANTS OR FACILITIES WHICH ARE ENTIRELY SEPARATE AND OPERATED INDEPENDENTLY OF EACH OTHER. AN ALL-OR-NONE BID AS TO BOTH GROUPS WILL BE NONRESPONSIVE IF SUBMITTED BY A COMPANY HAVING ONLY A SINGLE FACILITY OR ONE HAVING SEPARATE FACILITIES WHICH ARE NOT OPERATED INDEPENDENTLY.

4. A SEPARATE AND INDEPENDENTLY OPERATED PLANT OR FACILITY IS DEFINED FOR PURPOSES OF THIS SOLICITATION AS A MANUFACTURING FACILITY WHICH IS CAPABLE OF PRODUCING EITHER GROUP UNDER ONE OF THE PROPOSED CONTRACTS WITHIN THE REQUIRED DELIVERY SCHEDULE WITH PRODUCTION EQUIPMENT, PLANT MANAGEMENT, ENGINEERING, AND PURCHASING WHICH ARE SEPARATE FROM AND INDEPENDENT OF THE PRODUCTION EQUIPMENT, PLANT MANAGEMENT, ENGINEERING, AND PURCHASING OF ANY OTHER PLANT FULFILLING THE OTHER PROPOSED CONTRACT SO THAT EACH SEPARATE AND INDEPENDENTLY OPERATED PLANT OR FACILITY IS ITSELF ESSENTIALLY A SOURCE FOR THE END ITEM INDEPENDENT OF ANY OTHER SOURCE. FOR EXAMPLE, THIS CRITERIA MAY BE MET BY INDEPENDENTLY OPERATED DIVISIONS OF THE SAME CORPORATE ENTITY, SUBSIDIARY CONCERNS, JOINT VENTURES OR SUITABLE SUBCONTRACTING ARRANGEMENTS.

THE MAGNAVOX COMPANY BID $9,333,873.22 ON EACH OF THE TWO GROUPS OF RADIO SETS. IN A LETTER OF DECEMBER 31, 1962, ACCOMPANYING ITS BID, IT STATED:

THE MAGNAVOX COMPANY HAS QUOTED IDENTICAL PRICES FOR GROUP 1 AND GROUP 2 ITEMS. IN THE EVENT IT IS TO THE ADVANTAGE OF THE GOVERNMENT TO PLACE BOTH QUANTITIES WITH THE MAGNAVOX COMPANY, ONE GROUP WOULD BE PRODUCED IN ITS ENTIRETY AT THE MAGNAVOX FORT WAYNE FACILITY AND THE SECOND GROUP WOULD BE PRODUCED IN ITS ENTIRETY AT THE MAGNAVOX COMPANY, URBANA, ILLINOIS, FACILITY. THESE TWO DIVISIONS ARE OPERATED ENTIRELY SEPARATE AND INDEPENDENT OF EACH OTHER UNDER THE SCOPE DEFINITIONS ON PAGE 5 OF THE ORIGINAL IFB.

THE REFERENCE TO "THE SCOPE DEFINITIONS ON PAGE 5 OF THE ORIGINAL IFB" IS TO THE PROVISION QUOTED IN THE PREVIOUS PARAGRAPH.

YOU CONTEND THAT UNDER THE LANGUAGE QUOTED ABOVE FROM THE INVITATION, A BIDDER TO BE ELIGIBLE TO RECEIVE AN AWARD ON BOTH GROUPS WAS REQUIRED TO HAVE TWO PLANTS SEPARATE AND INDEPENDENT OF EACH OTHER WITH EACH HAVING ALL THE REQUISITE FACILITIES TO PRODUCE EITHER GROUP ON THE BID OPENING DATE. YOU STATE THAT THE URBANA PLANT DID NOT MEET THAT STANDARD. THEREFORE, YOU SUGGEST THAT AN AWARD CAN BE MADE TO THE MAGNAVOX COMPANY ONLY FOR THE GROUP TO BE MANUFACTURED AT FORT WAYNE AND THAT THE SECOND GROUP SHOULD BE AWARDED TO YOU AS THE NEXT LOW BIDDER HAVING SUBMITTED A BID OF $12,249,070 ON A SINGLE GROUP.

THE POSITION OF THE CONTRACTING AGENCY HAS BEEN THAT THE INVITATION DID NOT MAKE IT NECESSARY THAT THE COMPLETE FACILITIES TO PRODUCE THE GROUPS BE IN EXISTENCE ON THE BID OPENING DAY, BUT REQUIRED ONLY THAT THE BIDDER OFFER TO PRODUCE EACH GROUP IN A SEPARATE AND INDEPENDENT PLANT.

THE INVITATION REQUIREMENT THAT THE PLANTS OR FACILITIES WHICH ARE TO PRODUCE THE GROUPS INVOLVED ARE TO BE SEPARATE AND INDEPENDENT OF EACH OTHER IS IN OUR OPINION A MATTER OF RESPONSIBILITY OF BIDDERS RATHER THAN RESPONSIVENESS OF THE BIDDERS AND, THEREFORE, IT WAS NOT INTENDED THAT A BIDDER BE REQUIRED TO EXPEND A CONSIDERABLE AMOUNT OF MONEY TO ESTABLISH A FACILITY AS A CONDITION PRECEDENT TO HAVING ITS BID CONSIDERED. THIS SEEMS APPARENT FROM THE FACT THAT THE INVITATION FOR BIDS ONLY REQUIRED A BIDDER TO MAKE A FIRM OFFER TO PERFORM THE CONTRACT WORK IN SEPARATE PLANTS. WHILE THE SECOND SENTENCE TO THE THIRD PARAGRAPH OF THE "SCOPE" PROVISION STATES THAT AN ALL-OR-NONE BID ON THE TOTAL QUANTITY WILL BE NONRESPONSIVE IF SUBMITTED BY A COMPANY "HAVING" ONLY A SINGLE FACILITY OR SEPARATE FACILITIES WHICH ARE NOT INDEPENDENT, IT DOES NOT REQUIRE NOR DOES ANY OTHER LANGUAGE IN THE "SCOPE" PROVISION REQUIRE THAT THE BIDDER INTRODUCE EVIDENCE WITH ITS BID TO ESTABLISH THE SEPARATION AND INDEPENDENCE. THEREFORE, OF NECESSITY, THE SEPARATION AND INDEPENDENCE CAN ONLY BE DETERMINED ON THE BASIS OF INFORMATION FURNISHED AFTER ALL THE BIDS ARE MADE KNOWN. FOR A MATTER TO BE ONE OF RESPONSIVENESS IT MUST BE DECIDED ON THE BASIS OF EVIDENCE SUBMITTED PRIOR TO OR AT BID OPENING. WHERE THE INFORMATION IS TO BE FURNISHED OR ACCUMULATED AFTER BID OPENING WE DO NOT CONSIDER SUCH A REQUIREMENT AS BEING FOR ANY PURPOSE OTHER THAN TO ESTABLISH THE BIDDER'S RESPONSIBILITY.

FURTHER, THE FIRST SENTENCE OF THE THIRD PARAGRAPH OF THE "SCOPE" PROVISION PROVIDES THAT A BIDDER ON THE TOTAL QUANTITY TO BE RESPONSIVE MUST OFFER TO PRODUCE IN SEPARATE AND INDEPENDENT FACILITIES. THEREFORE, A BIDDER WHO MEETS THAT REQUIREMENT IS A RESPONSIVE BIDDER. AS TO WHETHER THE BIDDER IS CAPABLE OF PERFORMING UNDER THE CONDITIONS OF ITS OFFER IS A MATTER OF FITNESS AND ABILITY WHICH IN TURN IS AN ELEMENT OF RESPONSIBILITY. SEE 26 COMP. GEN. 676, 677.

THE FOURTH PARAGRAPH OF THE "SCOPE" PROVISION DEFINES WHAT IS A SEPARATE AND INDEPENDENT PLANT OR FACILITY FOR PURPOSES OF THE INVITATION. IT SAYS THAT SUCH A PLANT OR FACILITY IS ONE WHICH IS CAPABLE OF PRODUCING EITHER GROUP UNDER ONE OF THE PROPOSED CONTRACTS WITHIN THE REQUIRED DELIVERY SCHEDULE WITH ITS OWN PRODUCTION EQUIPMENT, PLANT MANAGEMENT, ENGINEERING AND PURCHASING. IT DOES NOT REQUIRE THAT ALL THE EQUIPMENT AND PERSONNEL MUST BE IN BEING AT THE TIME OF BID OPENING OR AT THE TIME OF SURVEY, BUT RATHER IT IMPORTS THAT THE BIDDER SHOULD HAVE THE ABILITY TO PRODUCE THE PROPOSED CONTRACT WITHIN THE REQUIRED DELIVERY SCHEDULE AND ACTUALLY THIS COULD BE ACCOMPLISHED BY A BIDDER WHO MIGHT NOT HAVE ALL THE NECESSARY EQUIPMENT OR PERSONNEL AT THE TIME OF BID OPENING, BUT WHO MIGHT HAVE THE ABILITY TO OBTAIN THE SAME PRIOR TO AWARD. SINCE CAPABILITY IS A MATTER OF RESPONSIBILITY, A BIDDER WHO MAY NOT HAVE THE EQUIPMENT AND PERSONNEL BUT WHO MAY HAVE THE ASSETS, COMMITMENTS AND WHEREWITHAL TO OBTAIN THEM, COULD BE CONSIDERED TO BE CAPABLE OF PERFORMING.

MOREOVER, ALTHOUGH THE FIRST PARAGRAPH OF THE "SCOPE" PROVISION SPECIFIES THAT FOR REASONS OF NATIONAL DEFENSE AND INDUSTRIAL MOBILIZATION IT IS NECESSARY THAT EACH GROUP OF RADIO SETS BE PRODUCED IN PLANTS WHICH ARE SEPARATE AND INDEPENDENT, THERE IS NO STATEMENT THEREIN THAT THE SEPARATION AND INDEPENDENCE MUST BE IN EXISTENCE AS OF THE TIME OF BID OPENING. THE STATEMENT THAT THE EQUIPMENT IS TO "BE" PRODUCED IN PLANTS WHICH "ARE" SEPARATE AND INDEPENDENT INDICATES NO MORE THAN THAT THE EQUIPMENT IS TO BE MANUFACTURED IN PLANTS WHICH ARE SEPARATE AND INDEPENDENT AT THE TIME OF PRODUCTION. THERE WOULD SEEM TO BE NO VALID REASON WHY SUCH SEPARATION AND INDEPENDENCE SHOULD HAVE BEEN REQUIRED TO EXIST AS OF THE TIME OF BID OPENING.

IN VIEW OF THE FOREGOING, AND SINCE THE MAGNAVOX URBANA PLANT MANAGEMENT HAS SATISFIED THE CONTRACTING OFFICER THAT IT WILL BE ABLE TO MEET ITS CONTRACT COMMITMENTS UNDER THE CONDITIONS OF SEPARATION AND INDEPENDENCE OF THE REQUIRED FACILITIES, WE MUST CONCLUDE THAT YOUR PROTEST IS WITHOUT MERIT.