B-151910, SEP. 17, 1963

B-151910, SEP. 17, 1963

TO HILLSIDE METAL PRODUCTS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 22, 1963, REQUESTING RECONSIDERATION OF OUR DECISION OF AUGUST 20, 1963, DENYING YOUR PROTEST AGAINST THE ACTION TAKEN BY THE GENERAL SERVICES ADMINISTRATION IN CANCELLING GROUP ITEMS 1, 2, AND 3 FROM INVITATION FOR BIDS NO. FPNFO-P- 26830-A-5-8-63 AND READVERTISING THEREFOR.

IT APPEARS TO BE YOUR CONTENTION THAT THE GOVERNMENT, ACTING THROUGH CONTRACTING OFFICERS, HAVING ONCE SPECIFIED IN AN INVITATION THE METHOD BY WHICH THE BIDS RECEIVED WOULD BE EVALUATED, MUST MAKE AWARD ACCORDINGLY, REGARDLESS OF OTHER CONSIDERATIONS OR ACTIONS OF THE BIDDERS DISCOVERED AFTER THE OPENING OF BIDS.

AS STATED IN THE DECISION OF AUGUST 20, 1963, THE INVITATION INVOLVED PROVIDED THAT THE LOW AGGREGATE BIDDER WOULD BE DETERMINED BY MULTIPLYING THE TOTAL AMOUNT OF THE UNIT PRICES FOR EACH REGION IN EACH OF THE THREE GROUPS BY THE WEIGHT FACTORS SPECIFIED FOR THE GROUPS. APPARENTLY THE METHOD OF EVALUATION SPECIFIED IN THE INVITATION WOULD HAVE BEEN ADEQUATE PROVIDED BIDDERS HAD QUOTED REALISTIC UNIT PRICES FOR THE ITEMS WITHIN EACH GROUP. HOWEVER, THE EVALUATION FORMULA MADE POSSIBLE A SITUATION WHEREBY, ON ITEMS WITHIN THE GROUPS, BIDDERS COULD BID LOW ON ITEMS KNOWN FROM PAST EXPERIENCE, OR ON SPECULATION, TO BE PURCHASED INFREQUENTLY AND HIGH ON ITEMS FREQUENTLY PURCHASED.

AFTER OPENING OF THE BIDS, IT WAS FOUND THAT YOU TOOK ADVANTAGE OF THE SITUATION MADE POSSIBLE BY THE EVALUATION FORMULA BY SUBMITTING UNBALANCED PRICES ON ITEMS WITHIN THE GROUPS. FACED WITH THIS SITUATION, THE CONTRACTING OFFICER REVIEWED THE EVALUATION FORMULA, AND IT WAS DETERMINED THAT THE WEIGHT FACTORS DID NOT ACCURATELY REFLECT THE POTENTIAL REQUIREMENTS FOR THE ITEMS. BY EVALUATING THE BIDS ON THE BASIS OF ESTIMATED ACTUAL REQUIREMENTS FOR THE INDIVIDUAL ITEMS IT WAS FOUND THAT THE COST UNDER YOUR BID WOULD AMOUNT TO APPROXIMATELY $250,000 MORE THAN THE COST UNDER THE NEXT LOW BID. IN SUCH CIRCUMSTANCES, IT IS DIFFICULT TO SEE HOW THE CONTRACTING OFFICER COULD ARRIVE AT ANY OTHER CONCLUSION THAN THAT THE EVALUATION FORMULA PROVIDED IN THE INVITATION WAS INADEQUATE AND ERRONEOUS. THE FACT THAT THE ERROR WAS NOT REALIZED UNTIL AFTER OPENING OF THE BIDS DOES NOT MAKE THE FORMULA ANY LESS ERRONEOUS OR PREVENT ITS CORRECTION, IF CORRECTION MAKES A MATERIAL DIFFERENCE.

AN INVITATION THAT PERMITS UNBALANCING OF BIDS BASED UPON SPECULATION AS TO PROBABLE REQUIREMENTS DOES NOT AFFORD FREE AND OPEN COMPETITION IN SUPPLYING THE GOVERNMENT ITS NEEDS. SUCH AN INVITATION IS A MERE GAMBLE WHICH UNDOUBTEDLY WOULD RESULT IN UNFAIRNESS TO THE GOVERNMENT OR THE BIDDER. SEE B-151770, AUGUST 15, 1963. FURTHERMORE, 41 U.S.C. 253 REQUIRES THAT "AWARD SHALL BE MADE * * * TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.' IN A SITUATION SUCH AS IS HERE INVOLVED, AN AWARD TO THE LOW EVALUATED BIDDER WOULD IN ALL PROBABILITY RESULT IN HIGHER COST TO THE GOVERNMENT. IT IS NOT SEEN HOW AN AWARD TO THAT BIDDER COULD BE CONSIDERED MOST ADVANTAGEOUS TO THE GOVERNMENT AS REQUIRED BY LAW.

FOR THE FOREGOING REASONS, WE SEE NO LEGAL BASIS TO MODIFY THE CONCLUSION REACHED IN THE ..END :