B-153302, MAY 25, 1964

B-153302: May 25, 1964

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TO WEAVER AND GLASSIE: FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF BUSINESS SUPPLIES CORPORATION OF AMERICA (BSC) AGAINST THE REJECTION BY THE POST OFFICE DEPARTMENT OF ITS BIDS UNDER TWO INVITATIONS FOR FURNISHING DOMESTIC POSTAL MONEY ORDER FORMS FOR THE PERIOD ENDING JUNE 30. INSOFAR AS IS HERE MATERIAL. THE FORMS WERE TO BE IN ACCORDANCE WITH SPECIFICATION POD-F-172/A) (RE) DATED OCTOBER 5. THE SECTION OF THE INVITATION PERTAINING TO BID SAMPLES PROVIDED: "FAILURE OF SAMPLES TO CONFORM TO THE REQUIREMENTS OF THE INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID.'. PARAGRAPH 3.2 OF SPECIFICATION POD-F-172A PROVIDED: "THESE SAMPLE MONEY ORDERS AND THE SAMPLE CARTON WILL BE EVALUATED FOR COMPLIANCE WITH EVERY APPLICABLE REQUIREMENT OF THIS SPECIFICATION AND FAILURE TO MEET THE SPECIFICATION REQUIREMENTS WILL RESULT IN REJECTION OF THE BID.'.

B-153302, MAY 25, 1964

TO WEAVER AND GLASSIE:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF BUSINESS SUPPLIES CORPORATION OF AMERICA (BSC) AGAINST THE REJECTION BY THE POST OFFICE DEPARTMENT OF ITS BIDS UNDER TWO INVITATIONS FOR FURNISHING DOMESTIC POSTAL MONEY ORDER FORMS FOR THE PERIOD ENDING JUNE 30, 1965.

BY INVITATION NO. 1 ISSUED ON MAY 14, 1963, THE POST OFFICE DEPARTMENT REQUESTED BIDS FOR FURNISHING, INSOFAR AS IS HERE MATERIAL, DOMESTIC POSTAL MONEY ORDER FORMS AS REQUIRED FOR THE PERIOD ENDING JUNE 30, 1965. THE FORMS WERE TO BE IN ACCORDANCE WITH SPECIFICATION POD-F-172/A) (RE) DATED OCTOBER 5, 1962, AND OTHER TERMS AND CONDITIONS SET FORTH IN THE INVITATION. PAGE 4 OF THE INVITATION AND PARAGRAPH 3.2 OF THE SPECIFICATION REQUIRED THE SUBMISSION WITH THE BID OF SAMPLE POSTAL MONEY ORDER FORMS. THE SECTION OF THE INVITATION PERTAINING TO BID SAMPLES PROVIDED:

"FAILURE OF SAMPLES TO CONFORM TO THE REQUIREMENTS OF THE INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID.'

PARAGRAPH 3.2 OF SPECIFICATION POD-F-172A PROVIDED:

"THESE SAMPLE MONEY ORDERS AND THE SAMPLE CARTON WILL BE EVALUATED FOR COMPLIANCE WITH EVERY APPLICABLE REQUIREMENT OF THIS SPECIFICATION AND FAILURE TO MEET THE SPECIFICATION REQUIREMENTS WILL RESULT IN REJECTION OF THE BID.'

PARAGRAPH 3.8 OF THE SPECIFICATION PROVIDED:

"PARTICULAR ACCURACY IN PRINTING MUST BE MAINTAINED TO ASSURE THAT THE PRINTED VERTICAL LINE SEPARATING DOLLARS FROM CENTS FIGURES IN THE AMOUNT BLOCK DOES NOT TOUCH THE FIGURES POST-PRINTED BY THE MONEY ORDER ISSUING MACHINE. FORMS FURNISHED WITH THIS DEFICIENCY WILL BE REJECTED.

TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. BSC QUOTED A PRICE OF $1.734 PER THOUSAND FOR TWO-COLOR PRINTING AND $1.624 PER THOUSAND FOR ONE-COLOR PRINTING. INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM) QUOTED A PRICE OF $2.05 PER THOUSAND FOR BOTH ONE AND TWO-COLOR PRINTING. THE SAMPLES SUBMITTED BY EACH BIDDER WERE SENT TO THE BUREAU OF STANDARDS FOR TESTING TO DETERMINE WHETHER THEY COMPLIED WITH THE REQUIREMENTS OF THE SPECIFICATION. THE SAMPLES OF BOTH BIDDERS WERE FOUND TO MEET REQUIREMENTS AS TO QUALITY OF PAPER. HOWEVER, THE TESTS TO DETERMINE COMPLIANCE WITH PARAGRAPH 3.8 OF THE SPECIFICATION SHOWED THAT ON BSC'S SAMPLES THE PRINTED MONEY AMOUNT EXTENDED OVER THE PRINTED VERTICAL LINE SEPARATING THE DOLLAR AND CENTS FIGURES IN THE AMOUNT BLOCKS. THE TESTS ALSO SHOWED THAT ON THE IBM SAMPLES THE PRINTED MONEY AMOUNT TOUCHED THE PRINTED VERTICAL LINE SEPARATING THE DOLLAR AND CENTS FIGURES IN THE AMOUNT BLOCKS.

SINCE THE SAMPLES FURNISHED BY EACH OF THE BIDDERS FAILED TO CONFORM TO THE REQUIREMENTS OF THE SPECIFICATION, THEY WERE REJECTED PURSUANT TO THE TERMS OF THE INVITATION. THE POST OFFICE DEPARTMENT THEN PREPARED TO NEGOTIATE FOR A CONTRACT FOR THE POSTAL MONEY ORDER FORMS. HOWEVER, THIS COURSE OF ACTION WAS ABANDONED AND THE REQUIREMENT WAS READVERTISED FORMALLY UNDER INVITATION FOR BIDS NO. 105, ISSUED ON AUGUST 14, 1963. THE SPECIFICATION UNDER THE SECOND INVITATION WAS SUBSTANTIALLY THE SAME AS UNDER THE FIRST INVITATION. THERE WERE TWO CHANGES PERTINENT HERE: (1) NEW LOCATIONS FOR THE INTERFACE OR VERTICAL LINES SEPARATING THE DOLLAR AND CENTS FIGURES AND (2) THE DELETION OF THAT PORTION OF PARAGRAPH 3.8 QUOTED ABOVE.

IN RESPONSE TO THIS SECOND INVITATION BSC QUOTED A PRICE OF $1.93 PER THOUSAND FOR BOTH ONE AND TWO-COLOR PRINTING, AS COMPARED WITH $1.624 PER THOUSAND FOR ONE-COLOR PRINTING AND $1.734 FOR TWO-COLOR PRINTING UNDER THE FIRST INVITATION. IBM QUOTED THE SAME PRICE AS WAS QUOTED UNDER THE FIRST INVITATION, $2.05 PER THOUSAND FOR BOTH ONE AND TWO-COLOR PRINTING. AS PROVIDED FOR IN THE INVITATION, BOTH BIDDERS CERTIFIED THAT THE QUALITY OF THE PAPER IN THE SAMPLES SUBMITTED WAS IDENTICAL WITH THOSE SAMPLES SUBMITTED UNDER THE FIRST INVITATION AND, THEREFORE, THE PAPER QUALITY TESTS WERE WAIVED. THE SAMPLES SUBMITTED BY BOTH BIDDERS WERE TESTED BY THE BUREAU OF STANDARDS FOR CONFORMITY WITH PARAGRAPH 3.11 OF THE SPECIFICATION, WHICH COVERED THE LOCATION OF THE INTERFACE OR VERTICAL LINES SEPARATING THE DOLLAR AND CENTS FIGURES. THE BUREAU OF STANDARDS REPORTED THAT THE IBM SAMPLES COMPLIED WITH THE REQUIREMENTS OF PARAGRAPH 3.11 AND THAT THE BSC SAMPLES FAILED TO MEET THE REQUIREMENTS WITH RESPECT TO THE LOCATION OF THE INTERFACE OR VERTICAL LINE IN THE PURCHASER'S RECEIPT PORTION OF THE FORM. SINCE SAID LINE WAS PROPERLY POSITIONED ON THE MAIN AND ONE OTHER PORTION OF THE MONEY ORDER, AND SINCE THE SECOND PARAGRAPH OF PARAGRAPH 3.8, REQUIRING REJECTION OF BIDS FOR THIS DEFICIENCY, WAS ELIMINATED FROM THE SECOND INVITATION, THIS FAILURE WAS CONSIDERED TO BE MINOR AND WAS NOT THE BASIS FOR THE REJECTION OF BSC'S BID.

A NUMBER OF THE SAMPLE FORMS WERE SUBMITTED TO THE OFFICE OF RESEARCH AND ENGINEERING OF THE POST OFFICE DEPARTMENT FOR EXAMINATION. THAT OFFICE EXAMINED 100 BSC SAMPLES: ON 25 THE PRINTING WAS BADLYSMEARED, NONUNIFORM IN DENSITY, PRINTING WAS MISSING AND THE LETTERING WAS RAGGED; ON THE REMAINING 75 SAMPLES THE PRINTING WAS GENERALLY SMEARED AND NOT OF THE HIGHEST INDUSTRY STANDARD QUALITY. THE IBM SAMPLES WERE REPORTED TO COMPLY WITH SPECIFICATION REQUIREMENTS. IN ORDER TO BE SURE, AN ADDITIONAL GROUP OF THE SAMPLES WAS SUBMITTED TO THE OFFICE OF RESEARCH AND ENGINEERING FOR EVALUATION AND A GROUP OF BOTH SAMPLES WAS SUBMITTED TO THE GOVERNMENT PRINTING OFFICE, WITH THE REQUEST THAT THEY GIVE THEIR EXPERT OPINION AS TO WHETHER THE SAMPLE FORMS MET THE REQUIREMENTS OF PARAGRAPH 3.9 OF THE SPECIFICATION. THE OFFICE OF RESEARCH AND ENGINEERING CONFIRMED ITS PRIOR REPORT AND THE GOVERNMENT PRINTING OFFICE REPORTED (BSC'S SAMPLES WERE IDENTIFIED WITH THE LETTER "B" AND THE IBM SAMPLES WITH THE LETTER "A") AS FOLLOWS:

"IT IS THE OPINION OF THIS OFFICE THAT THE SAMPLE IDENTIFIED BY THE LETTER "B" DOES NOT MEET THE SPECIFICATIONS. THIS SAMPLE IS ASSUMED TO REPRESENT THE QUALITY WHICH THIS CONTRACTOR INTENDS TO FURNISH. THE PRINTING ON THIS SAMPLE IS NOT SHARP AND CLEAR, BUT IS SLURRED OR FUZZY,WITH UNEVEN INKING OF THE LETTERS. THE SAMPLE IDENTIFIED WITH THE LETTER "A," IN OUR OPINION, DOES MEET YOUR SPECIFICATION AS CONTAINED IN PARAGRAPH 3.9. THE PRINTING IN SAMPLE A IS UNIFORM IN COLOR, CLEAR, AND SHARP.'

BASED UPON SUCH EVALUATION REPORTS, THE CONTRACTING OFFICER DETERMINED THAT THE BSC SAMPLES DID NOT COMPLY WITH THE REQUIREMENTS OF PARAGRAPH 3.9 OF THE SPECIFICATION. PRIOR TO NOTIFYING EITHER BIDDER OF THE DETERMINATION, A MEETING WAS HELD ON OCTOBER 11, 1963, AT WHICH TIME REPRESENTATIVES OF BSC WERE ADVISED OF THE DETERMINATION, AND EXAMPLES OF THE FORMS FAILING TO COMPLY WITH THE SPECIFICATION WERE EXHIBITED AND DISCUSSED WITH THEM. THE BSC REPRESENTATIVES STATED THAT THE SMUDGES AND BLANK SPOTS ON THESE FORMS WERE NOT PRESENT WHEN THE FORMS WERE DELIVERED TO THE POST OFFICE DEPARTMENT AND THAT THE SMUDGES AND BLANKS COULD HAVE BEEN CAUSED AFTER THE FORMS HAD BEEN DELIVERED. AFTER THE MEETING THE CONTRACTING OFFICER HAD THE FORMS EXAMINED BY THE BUREAU OF IDENTIFICATION LABORATORY OF THE CHIEF POSTAL INSPECTOR FOR THE PURPOSE OF DETERMINING WHETHER THE BLANK SPOTS WERE CAUSED AFTER DELIVERY TO THE POST OFFICE DEPARTMENT. THAT BUREAU ADVISED THAT THE DEFECTS WERE NOT CAUSED AFTER DELIVERY AND IN A CONFIRMING REPORT STATED:

"THE ORIGINAL BLACK INK PRINTING IN THE LETTERING "PURCHASER'S CITY AND STATE" OF THE NINE ORDERS WERE FOUND TO BE SERIOUSLY DEFICIENT IN FINISHED PRINT QUALITY. ALL REVEALED BLOTCHY LINES. MARKED UNEVENNESS IN PRINTING DENSITY, EXTENDING TO ALMOST TOTAL INK FAILURE REGARDING SEVERAL CHARACTERS IN THE ABOVE LETTERING.

"THE TYPE OF BLACK PRINTING INK USED IS SUSCEPTIBLE OF EASY REMOVAL BY USE OF A PENCIL ERASURE.

"CONCERNING THE OBSERVATIONS EXPRESSED IN SUB-PARAGRAPH 4, ABOVE, THE QUALITY OF PRINTING IN THE SUBMITTED SPECIMENS MAY BE EXPECTED TO BECOME INCREASINGLY DEFICIENT IN IMAGE SHARPNESS AS THE PLATES BECOME PROGRESSIVELY USED.

"IN SUMMARY, THE QUALITY OF THE PRINTING EXISTING IN THE SUBMITTED SAMPLES APPEARS NOT TO MEET THE DEPARTMENTAL SPECIFICATIONS (SEC. 3.9 PRINTING--- ON UNITED STATES POSTAL MONEY ORDER FORMS, POD-F-172A (RE) OCTOBER 5, 1962).'

SINCE THE BSC ALLEGATION AS TO THE CAUSE OF THE DEFECTS WAS NOT SUBSTANTIATED, THE AWARD WAS MADE TO IBM ON OCTOBER 11, 1963.

YOU PROTEST THE ACTION TAKEN BY THE POST OFFICE DEPARTMENT UNDER BOTH INVITATIONS. AS TO THE SECOND INVITATION, IT IS STATED THAT A CONTROVERSY EXISTS AS TO THE PHYSICAL CONDITION OF THE SAMPLE FORMS AT THE TIME OF DELIVERY, AND IT IS RECOGNIZED THAT THIS AND OTHER MORE SUBJECTIVE CONSIDERATIONS, SUCH AS THE DEGREE OF "FUZZINESS" OF THE PRINTING, ETC., WOULD BE EXCEEDINGLY DIFFICULT TO RESOLVE AT THIS TIME. IT IS CONTENDED THAT THIS IS NOT NECESSARY SINCE THE REJECTION OF BSC'S FIRST BID WAS WITHOUT JUSTIFICATION. IT IS THEREFORE URGED THAT THE AWARD MADE TO IBM BE RESCINDED AND THAT A CONTRACT BE AWARDED TO BSC FOR THE REMAINDER OF THE CONTRACT PERIOD ON THE BASIS OF ITS FIRST BID BUT AT THE PRICES SET FORTH IN THE SECOND BID.

IT IS URGED THAT THE FAILURE OF BID SAMPLES TO COMPLY WITH PARAGRAPH 3.8 WAS CAUSED BY THE POST OFFICE DEPARTMENT'S OWN MISTAKE IN THAT THE POSITION OF THE VERTICAL LINE ON THE SPECIMEN COPY SUPPLIED WITH THE INVITATION FOR BIDS WAS NOT CONSISTENT WITH THE SPECIFICATION (PARAGRAPH 3.11) AND THAT THE DEFICIENCY WAS A MINOR DEVIATION WHICH COULD EASILY HAVE BEEN CORRECTED. IT IS FURTHER STATED THAT THE POST OFFICE DEPARTMENT ITSELF RECOGNIZED THE IMMATERIALITY OF THE DEFICIENCY BY STATING THAT A SIMILAR DEFICIENCY IN THE SAMPLES UNDER THE SECOND INVITATION WAS MINOR AND WAS NOT THE BASIS FOR THE REJECTION OF THAT BID.

OUR OFFICE HAS RECOGNIZED THE PROPRIETY OF REQUIRING BIDDERS TO SUBMIT SAMPLES WITH THEIR BIDS IF IT IS DEEMED NECESSARY IN ORDER TO AFFORD ADMINISTRATIVE OFFICIALS AN OPPORTUNITY TO DETERMINE THAT THE ITEM PROPOSED TO BE FURNISHED COMPLIES WITH ADVERTISED SPECIFICATIONS. IT HAS CONSISTENTLY BEEN HELD THAT IF, THROUGH OVERSIGHT, MISINTERPRETATION OF THE SPECIFICATIONS OR OTHERWISE, THE SAMPLE SUBMITTED WITH THE BID DOES NOT MEET THE ESSENTIAL REQUIREMENTS OF THE SPECIFICATIONS, THE BID MUST BE TAKEN AS QUALIFIED BY THE SAMPLE SUBMITTED AND IS REQUIRED TO BE REJECTED AS NONRESPONSIVE. IN 36 COMP. GEN. 376, AT PAGE 378, IT WAS STATED THAT WHERE INFORMATION, WHICH WOULD ALSO APPLY TO THE SAMPLES HERE INVOLVED, IS DEEMED ESSENTIAL THE INVITATION SHOULD CONTAIN AN AFFIRMATIVE STATEMENT TO THE EFFECT THAT FAILURE TO CONFORM WILL RESULT IN THE REJECTION OF THE BID. THE CONCEPT HAS BEEN EXPANDED TO THE POINT THAT WHERE DESIGNATED INFORMATION OR PARTICULAR FEATURES OF A SAMPLE ARE SPECIFICALLY REQUIRED BY THE INVITATION THE INFERENCE ARISES THAT THE REQUIREMENT IS MATERIAL AND FAILURE TO CONFORM REQUIRES THE REJECTION OF THE BID. 39 COMP. GEN. 247,249.

THE FIRST INVITATION SPECIFICALLY REQUIRED THAT "PARTICULAR ACCURACY IN PRINTING MUST BE MAINTAINED TO ASSURE THAT THE PRINTED VERTICAL LINE SEPARATING DOLLARS AND CENTS FIGURES IN THE AMOUNT BLOCK DOES NOT TOUCH THE FIGURES POST PRINTED BY THE MONEY ORDER ISSUING MACHINE. FORMS FURNISHED WITH THIS DEFICIENCY WILL BE REJECTED.' IN VIEW OF THE SPECIFIC TERMS OF THE INVITATION, WE FIND NO LEGAL BASIS TO QUESTION THE ADMINISTRATIVE ACTION IN REJECTING ALL BIDS FOR FAILURE OF THE BID SAMPLES TO COMPLY WITH SUCH REQUIREMENTS. WE DO NOT BELIEVE THAT THE ACTION TAKEN WITH RESPECT TO BSC'S SAMPLES UNDER THE TWO INVITATIONS WAS, IN FACT, INCONSISTENT. IN THE SAMPLES SUBMITTED UNDER THE FIRST INVITATION THE VERTICAL LINE WAS IMPROPERLY POSITIONED ON ALL THREE PORTIONS OF THE MONEY ORDER FORM, WHEREAS IN THE SAMPLES SUBMITTED UNDER THE SECOND INVITATION THE VERTICAL LINE WAS IMPROPERLY POSITIONED ON ONLY ONE PART OF THE FORM, THE PURCHASER'S RECEIPT PORTION. ALSO THAT PART OF PARAGRAPH 3.8 OF THE SPECIFICATION WHICH MADE SUCH DEFICIENCY A SPECIFIC CAUSE FOR THE REJECTION OF BIDS WAS OMITTED FROM THE SECOND INVITATION.

IT IS CONTENDED THAT THE SPECIFICATION UNDER THE FIRST INVITATION COULD HAVE BEEN CHANGED PURSUANT TO THE "CHANGES" CLAUSE WITHOUT REJECTION OF THE BID. THE "CHANGES" CLAUSE BY ITS VERY TERMS RELATES TO CHANGES IN SPECIFICATIONS IN A CONTRACT AND MAY NOT BE USED TO CHANGE THE SPECIFICATIONS PRIOR TO AN AWARD OF A CONTRACT. IF PRIOR TO AWARD IT IS FOUND THAT THE SPECIFICATIONS SET FORTH IN AN INVITATION FOR BIDS DO NOT REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT, THE ONLY COURSE THAT CAN BE TAKEN AFTER BID OPENING IS TO REJECT ALL BIDS, CANCEL THE INVITATION, AND ISSUE A NEW INVITATION WHICH WILL REFLECT THE GOVERNMENT'S NEEDS. OTHERWISE THERE WOULD NOT BE COMPLIANCE WITH THE ADVERTISING STATUTES WHICH REQUIRE THAT THE CONTRACT AWARDED MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. ON THE BASIS OF THE FACTS INVOLVED, WE FIND NO BASIS TO QUESTION THE ADMINISTRATIVE DETERMINATIONS THAT BSC'S BID SAMPLES SUBMITTED UNDER BOTH INVITATIONS FAILED TO COMPLY WITH SPECIFICATION REQUIREMENTS IN MATERIAL RESPECTS. ACCORDINGLY, WE FIND NO LEGAL OBJECTION TO THE AWARD MADE TO IBM UNDER THE SECOND INVITATION AS THE LOW RESPONSIVE BIDDER.