B-152286, AUG. 27, 1963, 43 COMP. GEN. 215

B-152286: Aug 27, 1963

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BIDS - EVALUATION - OPTIONS - ADDITIONAL AMOUNTS - APPROPRIATION AVAILABILITY EXTENT A TERMINATION FOR CONVENIENCE CLAUSE IN AN INVITATION FOR A 3-YEAR PROCUREMENT FOR ACTUALLY DETERMINED REQUIREMENTS TO BE DELIVERED IN DEFINITE INCREMENTS FOR EACH OF THE YEARS WHICH PROVIDES FOR TERMINATION IN THE EVENT FUNDS ARE NOT ALLOTTED IN THE SECOND OR THIRD YEARS AND LIMITS THE GOVERNMENT'S LIABILITY YEARS DOES NOT CREATE SUCH AN UNCERTAINTY AS TO PRECLUDE THE EVALUATION OF BIDS ON THE BASIS OF THE ENTIRE QUANTITY STIPULATED IN THE INVITATION AND. SUCH AN INVITATION IS NOT SUBJECT TO THE SAME OBJECTION AS MULTIYEAR INVITATIONS CONTAINING INDEFINITE OPTIONS TO PURCHASE IN SUCCEEDING YEARS. 1963: REFERENCE IS MADE TO LETTER AFSPPCA OF AUGUST 15.

B-152286, AUG. 27, 1963, 43 COMP. GEN. 215

BIDS - EVALUATION - OPTIONS - ADDITIONAL AMOUNTS - APPROPRIATION AVAILABILITY EXTENT A TERMINATION FOR CONVENIENCE CLAUSE IN AN INVITATION FOR A 3-YEAR PROCUREMENT FOR ACTUALLY DETERMINED REQUIREMENTS TO BE DELIVERED IN DEFINITE INCREMENTS FOR EACH OF THE YEARS WHICH PROVIDES FOR TERMINATION IN THE EVENT FUNDS ARE NOT ALLOTTED IN THE SECOND OR THIRD YEARS AND LIMITS THE GOVERNMENT'S LIABILITY YEARS DOES NOT CREATE SUCH AN UNCERTAINTY AS TO PRECLUDE THE EVALUATION OF BIDS ON THE BASIS OF THE ENTIRE QUANTITY STIPULATED IN THE INVITATION AND, THEREFORE, SUCH AN INVITATION IS NOT SUBJECT TO THE SAME OBJECTION AS MULTIYEAR INVITATIONS CONTAINING INDEFINITE OPTIONS TO PURCHASE IN SUCCEEDING YEARS.

TO THE SECRETARY OF THE AIR FORCE, AUGUST 27, 1963:

REFERENCE IS MADE TO LETTER AFSPPCA OF AUGUST 15, 1963, FROM THE CHIEF, PROCUREMENT OPERATIONS DIVISION, DIRECTORATE, PROCUREMENT POLICY, DEPUTY CHIEF OF STAFF, SYSTEMS AND LOGISTICS, REQUESTING A DECISION ON A PROTEST BY THE ECLIPSE-PIONEER DIVISION OF THE BENDIX CORPORATION UNDER INVITATION FOR BIDS NO. 33-657-63-321.

THE INVITATION LISTED THE AIR FORCE REQUIREMENT FOR CERTAIN INSTRUMENTS FOR C-141 AIRCRAFT FOR FISCAL YEARS 1963, 1964 AND 1965 AND PROVIDED THAT AT THE TIME OF AWARD THE FISCAL YEAR 1963 REQUIREMENTS WOULD BE FUNDED AND THAT AN ADDITIONAL $75,000 WOULD BE RESERVED AS A CEILING ON THE GOVERNMENT'S LIABILITY TO THE CONTRACTOR IN THE EVENT FUNDS WERE NOT ALLOTTED TO MEET THE REQUIREMENTS OF FISCAL YEAR 1964 OR, FUNDS HAVING BEEN ALLOTTED FOR THAT YEAR, FAILING TO ALLOT FUNDS FOR THE 1965 REQUIREMENTS. IT IS OUR UNDERSTANDING ACCORDING TO INFORMAL REPRESENTATIONS THAT THE FUNDS THAT WILL COVER THE 3-YEAR PROCUREMENT WILL BE UTILIZED FROM APPROPRIATIONS WHICH ARE NOT LIMITED BY STATUTE FOR OBLIGATION DURING THE FISCAL YEAR IN WHICH THE CONTRACT IS EXECUTED.

FOR THE 3-YEAR QUANTITY, LEAR SIEGLER'S $4,011,058 BID WAS LOWER THAN BENDIX'S $4,236,873.85 BID. FOR THE 1963 REQUIREMENT ALONE, BENDIX'S $788,303.17 BID WAS LOWER THAN LEAR SIEGLER'S $1,085,522 BID.

BENDIX CONTENDS THAT THE REQUIREMENTS OF THE LATTER 2 YEARS OF THE 3 YEARS INVOLVED, BEING UNFUNDED, ARE OPTIONS TO PURCHASE WHICH MAY OR MAY NOT BE EXERCISED AND SHOULD NOT BE INCLUDED IN THE EVALUATION OF BIDS IN ACCORDANCE WITH 41 COMP. GEN. 203 WITH THE RESULT THAT THE AWARD SHOULD BE MADE TO IT AS THE LOW BIDDER BY $297,218 ON THE FIRST YEAR REQUIREMENTS.

THE CITED CASE IS READILY DISTINGUISHABLE FROM THE INSTANT ONE IN THAT IN THE FORMER THERE WAS INVOLVED A COMMITMENT FOR ACTUALLY DETERMINED REQUIREMENTS WITH AN OPTION PROVIDED FOR FUTURE REQUIREMENTS AS MIGHT MATERIALIZE, WHEREAS IN THE IMMEDIATE CASE THE INVITATION REFLECTS AN INTENTION TO MAKE AN AWARD FOR THE ACTUALLY DETERMINED REQUIREMENTS, DELIVERY OF WHICH IS REQUIRED TO BE MADE IN DEFINITE INCREMENTS AT TIMES SPECIFIED IN THE DELIVERY SCHEDULE PROVIDED IN THE INVITATION FOR EACH OF THE 3 YEARS INVOLVED. WHILE PROVISION IS MADE FOR TERMINATION OF THE 1964 AND 1965 FISCAL YEAR REQUIREMENTS IN THE EVENT FUNDS ARE NOT ALLOTTED FOR THE REQUIREMENTS IN THOSE YEARS, THE INVITATION INDICATES IN SCHEDULE I (3) THAT THE GOVERNMENT CONTEMPLATES THE ALLOTMENT OF FUNDS FOR THOSE YEARS WILL BE MADE. IT SEEMS QUITE CLEAR THAT IN THE IMMEDIATE CASE THE GOVERNMENT HAS SCHEDULED VERY DEFINITE REQUIREMENTS FOR THE 3 YEARS INVOLVED WITH ONLY A REMOTE POSSIBILITY THAT THOSE REQUIREMENTS MAY NOT BE FUNDED AND THAT THE PROVISION FOR TERMINATION FOR THE SUCCEEDING YEARS AFTER THE FIRST WAS INCLUDED TO MAKE CLEAR IN ADVANCE WHAT THE GOVERNMENT'S LIABILITY WOULD BE IN THE EVENT THE GOVERNMENT CHOSE NOT TO COMPLETE THE ENTIRE CONTRACT AND TO TERMINATE IT. THE GOVERNMENT GENERALLY HAS THE RIGHT TO TERMINATE CONTRACTS FOR ITS CONVENIENCE DURING THE PROGRESS OF CONTRACTS. IN FACT, SUCH A TERMINATION FOR CONVENIENCE PROVISION IS INCLUDED IN THE IMMEDIATE CONTRACT AND IS APPLICABLE TO THE FUNDED YEAR. WE DO NOT CONSIDER THAT SUCH A RIGHT CREATES AN UNCERTAINTY WHICH WOULD PRECLUDE THE EVALUATION OF BIDS ON THE BASIS OF THE QUANTITY STIPULATED IN THE INVITATION.

IN VIEW OF THE FOREGOING, WE AGREE WITH THE POSITION EXPRESSED IN THE AUGUST 15 LETTER THAT THE BENDIX PROTEST IS WITHOUT MERIT AND SHOULD BE DENIED.