B-153161, MAR. 5, 1964

B-153161: Mar 5, 1964

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FOURTEEN BIDS WERE RECEIVED AND OPENED AS SCHEDULED AND THE APPARENT LOW BIDDER WAS WHITE PLAINS IN THE AMOUNT OF $39. WESTINGHOUSE'S BID WAS REJECTED BECAUSE IT WAS BIG BUSINESS AND HENCE NOT ENTITLED TO AWARD. THE BID OF WHITE PLAINS WAS REJECTED AS NONRESPONSIVE SINCE THE CONTRACTING OFFICER WAS UNABLE TO DETERMINE THE ULTIMATE COSTS TO THE GOVERNMENT FOR TRANSPORTATION COSTS TO DESTINATION UNDER THE WHITE PLAINS' BID. AWARD WAS MADE TO STATE ELECTRIC SUPPLY. THAT IS. BIDDERS WERE REQUIRED TO FURNISH INFORMATION AS TO WHETHER RAIL. TRUCK OR WATER TRANSPORTATION FACILITIES WERE AVAILABLE AT THE SHIPPING POINT. IT WAS FURTHER PROVIDED THAT FAILURE TO FURNISH SUCH INFORMATION WILL CAUSE THE BID TO BE REJECTED.

B-153161, MAR. 5, 1964

TO THE SECRETARY OF THE NAVY:

BY LETTER DATED FEBRUARY 10, 1964, FILE R1.2, THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, FURNISHED A REPORT WITH RESPECT TO THE PROTEST OF THE WHITE PLAINS ELECTRICAL SUPPLY CO. AGAINST THE REJECTION OF ITS BID SUBMITTED UNDER INVITATION FOR BIDS NO. 228-1958- 64 ISSUED ON NOVEMBER 1, 1963, BY THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA.

THE INVITATION REQUESTED BIDS--- TO BE OPENED ON NOVEMBER 22, 1963-- ON A SMALL BUSINESS SET-ASIDE BASIS FOR 10,468 FLUORESCENT LIGHTING FIXTURES, F.O.B. ORIGIN, FOR USE BY THE U.S. NAVAL ADVISORY GROUP, KOREA, IN NEW CONSTRUCTION. FOURTEEN BIDS WERE RECEIVED AND OPENED AS SCHEDULED AND THE APPARENT LOW BIDDER WAS WHITE PLAINS IN THE AMOUNT OF $39,244.53, FOLLOWED BY THE WESTINGHOUSE ELECTRIC SUPPLY COMPANY AND STATE ELECTRIC SUPPLY, INC., IN THE AMOUNTS OF $40,825.20 AND $41,243.92, RESPECTIVELY. WESTINGHOUSE'S BID WAS REJECTED BECAUSE IT WAS BIG BUSINESS AND HENCE NOT ENTITLED TO AWARD. ALSO, THE BID OF WHITE PLAINS WAS REJECTED AS NONRESPONSIVE SINCE THE CONTRACTING OFFICER WAS UNABLE TO DETERMINE THE ULTIMATE COSTS TO THE GOVERNMENT FOR TRANSPORTATION COSTS TO DESTINATION UNDER THE WHITE PLAINS' BID. SPECIFICALLY, WHILE WHITE PLAINS' BID OFFERED DELIVERY FREE OF EXPENSE AT ITS PLANT IN BROOKLYN, NEW YORK, ITS BID DID NOT OFFER TO LOAD, BLOCK OR BRACE ON BOARD THE CARRIER OR OTHERWISE INCLUDE THE ADDITIONAL SERVICES THAT WOULD BE REQUIRED AFTER THE GOVERNMENT SELECTED THE MODE OF SHIPMENT. ACCORDINGLY, AWARD WAS MADE TO STATE ELECTRIC SUPPLY, INC., ON DECEMBER 27, 1963, AS THE LOWEST RESPONSIBLE BIDDER UNDER THE INVITATION.

THE INVITATION PROVIDED ON PAGE 6 THAT BIDS WOULD BE EVALUATED ON THE BASIS OF DELIVERED PRICES, THAT IS, BID PRICES PLUS THE COST OF TRANSPORTATION BY THE MEANS SELECTED. IN ORDER TO SELECT THE MODE OF TRANSPORTATION AND DETERMINE THE COST TO THE GOVERNMENT THEREFOR, BIDDERS WERE REQUIRED TO FURNISH INFORMATION AS TO WHETHER RAIL, TRUCK OR WATER TRANSPORTATION FACILITIES WERE AVAILABLE AT THE SHIPPING POINT. IT WAS FURTHER PROVIDED THAT FAILURE TO FURNISH SUCH INFORMATION WILL CAUSE THE BID TO BE REJECTED. SPECIFICALLY AS TO RAIL SHIPMENTS, BIDDERS WERE REQUESTED TO ADVISE OF THE RAIL SIDING OR TERMINAL WHERE THEY WOULD LOAD, BLOCK AND BRACE ON BOARD THE CARRIER.

IN OUR DECISION B-150488 DATED FEBRUARY 21, 1963, 42 COMP. GEN. --, WE CONSIDERED A SIMILAR SITUATION WHERE THE INVITATION FOR BIDS PROVIDED THAT TRANSPORTATION DATA FOR F.O.B. ORIGIN BIDS MUST BE FURNISHED FOR BID EVALUATION PURPOSES, INCLUDING RAIL, WATER AND TRUCK SHIPPING FACILITIES OF THE BIDDERS. BIDDERS WERE WARNED THAT FAILURE TO FURNISH SUCH DATA WOULD CAUSE THE BID TO BE NONRESPONSIVE, AND THAT "ALL COSTS FOR LOADING, BLOCKING, BRACING, DRAYAGE, SWITCHING OR OTHER SERVICES NECESSARY TO EFFECT DELIVERY FOB AVAILABLE * * * CARRIER'S EQUIPMENT SPECIFIED BY THE GOVERNMENT AT THE TIME OF SHIPMENT WILL BE CONSIDERED AS INCLUDED IN THE ITEM BID PRICE QUOTED.' IN THAT DECISION WE STATED:

"THE COMPETITIVE BIDDING STATUTE CODIFIED AT 10 U.S.C. 2305 REQUIRES THAT THE AWARD OF A CONTRACT BE MADE TO THAT RESPONSIBLE BIDDER SUBMITTING THE LOWEST RESPONSIVE BID,"OTHER FACTORS CONSIDERED.' 37 COMP. GEN. 550. ONE OF THE FACTORS FOR CONSIDERATION IN THE SELECTION OF A LOW BID SUBMITTED ON AN F.O.B. ORIGIN BASIS IS THE COST TO THE GOVERNMENT OF TRANSPORTATION TO DESTINATION. IN SUCH CIRCUMSTANCES, THE TRANSPORTATION FACILITIES AVAILABLE TO EACH BIDDER IS AN ESSENTIAL ELEMENT IN EVALUATING THE GOVERNMENT'S TRANSPORTATION COSTS APPLICABLE TO EACH RESPONSIVE BIDDER'S OFFER. THE PURPOSE OF SUCH EVALUATION IS TO FIX THE EXACT COST OF THE ITEM TO THE GOVERNMENT.

"AS A GENERAL RULE A DATA REQUIREMENT, TOGETHER WITH LANGUAGE MAKING IT MANDATORY UPON THE CONTRACTING OFFICER TO REJECT BIDS WHICH FAIL TO COMPLY WITH SUCH REQUIREMENT IS TO BE CONSTRUED AND ENFORCED AS WRITTEN. COMP. GEN. 132, 135. HOWEVER, AS STATED AT 39 COMP. GEN. 595, 597, IT MUST BE RECOGNIZED THAT AN AUTOMATIC REJECTION OF A BID BECAUSE OF A FAILURE TO CONFORM TO A PURELY TECHNICAL OR OVERLITERAL READING OF THE STATED REQUIREMENTS MAY BE AS ARBITRARY AS THE WAIVER OF NON- RESPONSIVENESS TO A MATERIAL AND SUBSTANTIAL REQUIREMENT. IN THAT DECISION WE THEREFORE HELD IT PROPER TO EXAMINE INTO THE QUESTION WHETHER INFORMATION FURNISHED BY A BIDDER IN LIEU OF STRICT COMPLIANCE WITH THE DATA REQUIREMENTS OF THE INVITATION, TOGETHER WITH INFORMATION ALREADY AVAILABLE TO THE CONTRACTING AGENCY, WAS SUFFICIENT TO ACCOMPLISH THE SAME PURPOSES WHICH WOULD BE ACCOMPLISHED BY STRICT COMPLIANCE WITH THE TERMS OF THE INVITATION.

"WHILE, AS INDICATED ABOVE, A DATA REQUIREMENT MUST NORMALLY BE REGARDED AS MATERIAL AND COMPLIED WITH FULLY, WE THINK THAT, HAVING IN MIND THE PURPOSE OF SUCH REQUIREMENT, A DISTINCTION MUST BE DRAWN BETWEEN DATA WHICH REPRESENT A RELATIVELY FREE CHOICE BY THE BIDDER, AND DATA WHICH THE BIDDER FURNISHES FOR GENERAL INFORMATION AND WITH RESPECT TO WHICH THERE IS NO NEED FOR A BIDDER TO MAKE A CHOICE. IN THIS CASE THE GOVERNMENT, NOT THE BIDDER, WILL SELECT THE MODE OF TRANSPORTATION TO BE USED IN TRANSPORTING THE ITEM FROM POINT OF ORIGIN TO THE DESTINATION POINT. DO NOT BELIEVE, AS THE CONTRACTING OFFICER SUGGESTS IN HIS REPORT, THAT PERMITTING THE MOTOR TRUCK PARTS CO. TO FURNISH THE REQUIRED DATA AFTER THE BID OPENING DATE WILL HAVE ANY SERIOUS ADVERSE EFFECT ON THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM.'

THE TRANSPORTATION DATA CLAUSE HERE INVOLVED IS SUBSTANTIALLY SIMILAR TO THAT CONSIDERED IN THE ABOVE-QUOTED DECISION IN THAT BIDDERS WERE REQUIRED TO BID ON THE BASIS THAT LOADING, BLOCKING, ETC., COSTS ON BOARD CARRIER'S EQUIPMENT WERE INCLUDED IN THEIR BID PRICES, AND THAT THE TRANSPORTATION DATA REQUESTED WAS FOR THE PURPOSE OF ASSISTING THE GOVERNMENT IN SELECTING THE MODE OF TRANSPORTATION TO DESTINATION. WE BELIEVE THAT THE RATIONALE OF THE CITED DECISION IS EQUALLY APPLICABLE HERE AND THAT WHITE PLAINS' FAILURE TO COMPLETELY SUBMIT TRANSPORTATION DATA SHOULD HAVE BEEN WAIVED BY THE CONTRACTING OFFICER AS A MINOR INFORMALITY UNDER ASPR 2-405, SINCE UNDER ANY CONTRACT ENTERED INTO, THE GOVERNMENT WOULD HAVE HAD THE OPTION TO SELECT THE MODE OF TRANSPORTATION MOST BENEFICIAL TO IT.

WE, THEREFORE, CONCLUDE THAT WHITE PLAINS SHOULD HAVE BEEN PERMITTED TO FURNISH THE REQUIRED TRANSPORTATION INFORMATION AFTER BID OPENING WITHOUT REGARD TO THE WARNING IN THE INVITATION THAT SUCH FAILURE WOULD RESULT IN BID REJECTION. THERE IS FOR CONSIDERATION, HOWEVER, THE CONTRACTING OFFICER'S STATEMENT WITH RESPECT TO THE URGENCY OF THE PROCUREMENT AS FOLLOWS:

"THE LIGHTING FIXTURES COVERED BY THE SUBJECT INVITATION ARE URGENTLY REQUIRED BY THE U.S. NAVAL ADVISORY GROUP, KOREA, FOR USE IN NEW CONSTRUCTION. THE DELIVERY SCHEDULE QUOTED TO AND ACCEPTED BY THIS ACTIVITY MUST BE MET. THE SCHEDULE CALLS FOR DELIVERY OF 2,468 EACH WITHIN 21 DAYS, 3,000 EACH WITHIN 45 DAYS AND 5,000 EACH WITHIN 75 DAYS. DELAY IN AWARD WILL UNDULY DELAY THE DELIVERY. THE MUTUAL SECURITY DEPARTMENT, NCS, OAKLAND, HAS REQUESTED THAT SUPPLY ACTION BE EXPEDITED.

"BECAUSE OF THE URGENCY AND IN ACCORDANCE WITH ASPR-1-407.9, AWARD WAS MADE TO THE LOW RESPONSIVE BIDDER, AND THE PROTESTER WAS NOTIFIED BY LETTER OF THIS DATE.'

WE ARE ALSO ADVISED BY THE PROCUREMENT OFFICE THAT STATE ELECTRIC SUPPLY, INC., HAD PLACED ITS ORDER WITH A MANUFACTURER ON JANUARY 6, 1964; THAT PRODUCTION HAS COMMENCED; AND THAT THE FIRST INCREMENT OF THE PRODUCTION IS NOW BEING INSPECTED. IN VIEW THEREOF, IT WOULD NOT APPEAR TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO DIRECT CANCELLATION OF THE CONTRACT AWARDED TO STATE ELECTRIC SUPPLY, INC. HOWEVER, WE RECOMMEND THAT APPROPRIATE ACTION BE TAKEN TO PRECLUDE A RECURRENCE OF THIS SITUATION.