B-153687, JUL. 7, 1964

B-153687: Jul 7, 1964

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 10 AND LETTER OF MARCH 13. BIDDERS WERE ADVISED THAT THE BOXES IN WHICH THE AMMUNITION WAS TO BE PACKED WOULD BE FURNISHED BY THE GOVERNMENT AND THAT TRANSPORTATION COSTS OF SUCH PROPERTY WOULD BE A FACTOR IN THE EVALUATION OF THE BIDS RECEIVED. BIDDERS WERE ADVISED IN PERTINENT PART ON PAGES 19 AND 20 OF THE INVITATION AS FOLLOWS: "USE OF GOVERNMENT-OWNED PROPERTY: (USE AS-IS-WHERE-IS WITHOUT CHARGE) "1. WAS THE LOW EVALUATED BIDDER ON ITEM 1. SINCE AWARD OF THIS ITEM IS NOT UNDER PROTEST. NO FURTHER CONSIDERATION WILL BE GIVEN TO ITEM 1. DOLLAR VALUES AND ITEMS WILL REFER ONLY TO ITEM 2 UNLESS ITEM 1 IS SPECIFICALLY MENTIONED. WHICH WAS THE LOWEST UNEVALUATED BID RECEIVED.

B-153687, JUL. 7, 1964

TO REMINGTON ARMS COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 10 AND LETTER OF MARCH 13, 1964, PROTESTING AGAINST THE AWARD ACTION TAKEN BY THE CONTRACTING OFFICER UNDER INVITATION NO. AMC/A/-11-173-64-62, ISSUED BY THE AMMUNITION PROCUREMENT AND SUPPLY AGENCY, DEPARTMENT OF THE ARMY, JOLIET, ILLINOIS.

THE INVITATION, AS AMENDED, REQUESTED BIDS FOR FURNISHING 12,700,000 ROUNDS OF 7.62 MM TRACER AMMUNITION AND 239,600,480 ROUNDS OF 7.62 MM BALL AMMUNITION, ITEMS 1 AND 2, RESPECTIVELY. BIDDERS WERE ADVISED THAT THE BOXES IN WHICH THE AMMUNITION WAS TO BE PACKED WOULD BE FURNISHED BY THE GOVERNMENT AND THAT TRANSPORTATION COSTS OF SUCH PROPERTY WOULD BE A FACTOR IN THE EVALUATION OF THE BIDS RECEIVED. ALSO, IN REGARD TO THE USE OF GOVERNMENT-OWNED FACILITIES IN THE BIDDER'S POSSESSION, BIDDERS WERE ADVISED IN PERTINENT PART ON PAGES 19 AND 20 OF THE INVITATION AS FOLLOWS:

"USE OF GOVERNMENT-OWNED PROPERTY: (USE AS-IS-WHERE-IS WITHOUT

CHARGE)

"1. PROPERTY IN BIDDER'S POSSESSION

"IF, IN PERFORMING THE WORK BID UPON, THE BIDDER PLANS TO USE ANY ITEMS OF GOVERNMENT PROPERTY (INCLUDING ANY ITEMS OF SPECIAL TOOLING) IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT WITH THE GOVERNMENT INDEPENDENT OF THE IFB, THE BIDDER SHALL SO INDICATE BY CHECKING THE BOX BELOW AND BY IDENTIFYING SUCH FACILITIES CONTRACT AND/OR OTHER AGREEMENT AUTHORIZING SUCH USE. IN ORDER TO BE RESPONSIVE, THE BIDDER MUST AT THE TIME OF BID OPENING, BE IN FACT AUTHORIZED TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON. EVIDENCE OF SUCH AUTHORIZATION SHALL BE SUBMITTED UPON REQUEST FROM THE CONTRACTING OFFICER.

"4. EVALUATION

"A. FOR PURPOSES OF EQUALIZATION OF COMPETITIVE ADVANTAGE, THE USE OF SUCH GOVERNMENT PROPERTY, INCLUDING SPECIAL TOOLING, SHALL BE EVALUATED BY ADDING TO THE PROPOSED PRICE OF THE ITEM/S) BID UPON, THE FOLLOWING RATES FOR EACH MONTH OF THE PROPOSED PRODUCTION PERIOD. BIDDER SHOULD NOT INCLUDE IN THEIR BID PRICES ANY PROVISION FOR PAYMENT OF A USE CHARGE FOR SUCH PROPERTY.

"EQUIPMENT--- 1 PERCENT PER MONTH OF THE ACQUISITION COST.

"SPECIAL TOOLING--- 1 2/3 PERCENT PER MONTH OF THE ACQUISITION COST.

"REAL PROPERTY--- 5 PERCENT PER YEAR OF LAND ACQUISITION COST AND 8

PERCENT PER YEAR OF ACQUISITION COSTS OF IMPROVEMENTS

THEREON COMPUTED FOR THE PROPOSED PRODUCTION PERIOD.

IN REGARD TO THE BIDS RECEIVED, THE CONTRACTING OFFICER STATES IN HIS REPORT AS FOLLOWS:

"B. OLIN MATHIESON CHEMICAL CORPORATION, WINCHESTER-WESTERN DIVISION, EAST ALTON, ILLINOIS (HEREINAFTER REFERRED TO AS WESTERN), WAS THE LOW EVALUATED BIDDER ON ITEM 1. SINCE AWARD OF THIS ITEM IS NOT UNDER PROTEST, NO FURTHER CONSIDERATION WILL BE GIVEN TO ITEM 1. ALL FURTHER REFERENCES TO QUANTITIES, DOLLAR VALUES AND ITEMS WILL REFER ONLY TO ITEM 2 UNLESS ITEM 1 IS SPECIFICALLY MENTIONED.

"C. WESTERN BID ON A MAXIMUM QUANTITY OF 33,000,000 ROUNDS AT A PRICE OF $61.01 PER THOUSAND, WHICH WAS THE LOWEST UNEVALUATED BID RECEIVED.

"D. REMINGTON ARMS COMPANY, INC., BRIDGEPORT, CONNECTICUT (HEREINAFTER REFERRED TO AS REMINGTON), BID ON A MAXIMUM AGGREGATE QUANTITY OF 165,600,000 OF BOTH ITEMS. SINCE THEY DID NOT RECEIVE AN AWARD OF ITEM 1, THEY WILL BE CONSIDERED AS HAVING BID $61.89 PER THOUSAND ON A MAXIMUM QUANTITY OF 165,600,000 OF ITEM 2. THEIR BID DID NOT CONTAIN ANY RESTRICTIONS OR LIMITATIONS AGAINST AN AWARD OF A LESSER QUANTITY THAN THAT BID UPON, EXCEPT THAT IF AWARD OF A LESSER QUANTITY WAS MADE, THE BIDDER REQUESTED AUTHORIZATION TO PRODUCE AT A DELIVERY RATE OF NOT LESS THAN 2,500,000 MONTHLY.

"E. OLIN MATHIESON CHEMICAL CORPORATION, WINCHESTER-WESTERN DIVISION, NEW HAVEN, CONNECTICUT (HEREINAFTER REFERRED TO AS WINCHESTER), BID $61.99 PER THOUSAND ON QUANTITIES BETWEEN 150,000,001 AND 160,000,000 (THEIR MAXIMUM QUANTITY), $63.96 PER THOUSAND ON QUANTITIES BETWEEN 100,000,001 AND 150,000,000, $65.92 PER THOUSAND ON QUANTITIES BETWEEN 70,000,001 AND 100,000,000 AND $67.97 PER THOUSAND ON QUANTITIES BETWEEN 22,000,000 AND 70,000,000.

"F. CANADIAN INDUSTRIES, LTD., MONTREAL, QUEBEC, CANADA (HEREINAFTER REFERRED TO AS C.I.L.), BID $68.00 PER THOUSAND (AMERICAN DOLLARS) ON QUANTITIES BETWEEN 42,000,001 AND 70,000,000 (THEIR MAXIMUM QUANTITY) AND $70.00 PER THOUSAND ON 42,000,000 OR LESS.

"G. EVALUATION WAS MADE OF THE BIDS RECEIVED BY ADDING THE COST OF TRANSPORTATION OF GOVERNMENT-FURNISHED MATERIAL FROM ITS SOURCE TO THE PLACES OF PERFORMANCE AND THE GOVERNMENT-OWNED FACILITIES FACTOR AS PROVIDED IN THE INVITATION (SEE TAB C).

"H. AN UNSOLICITED COMMUNICATION WAS RECEIVED FROM WINCHESTER ON OR ABOUT 12 FEBRUARY 1964 (SEE TAB K) WHICH CONTAINED CERTAIN COMPUTATIONS REGARDING THE ALLOCATION OF QUANTITIES OF THE ITEM. THESE COMPUTATIONS WOULD BE, AND WERE, APPARENT TO ALL PERSONNEL RESPONSIBLE FOR THIS PROCUREMENT. SEE ALSO PARAGRAPH 1 (A), MEMORANDUM OF LAW (TAB E).'

IT WAS ADMINISTRATIVELY DETERMINED BY THE CONTRACTING OFFICER AND HIGHER AUTHORITY THAT THE LOWEST COMBINATION OF AWARDS COULD BE OBTAINED BY EVALUATING THE BIDS ON AN OUT-OF-POCKET COST BASIS WHICH DID NOT INCLUDE THE USE OF GOVERNMENT-OWNED FACILITIES POSSESSED BY THE CONTRACTORS. FEBRUARY 28, 1964, CONTRACTS FOR FURNISHING 33,000,000 ROUNDS, 150,000,480 ROUNDS, AND 56,600,000 ROUNDS BALL AMMUNITION COVERED BY ITEM 2 OF THE INVITATION WERE AWARDED TO WESTERN (EAST ALTON), WINCHESTER (NEW HAVEN), AND YOUR FIRM, RESPECTIVELY.

AS TO THE VARIOUS COMBINATION OF AWARDS CONSIDERED BY THE CONTRACTING OFFICE AND THE REASONS FOR MAKING SUCH AWARDS, THE CONTRACTING OFFICER STATES IN HIS REPORT AS FOLLOWS:

"I. (1) A COMPARISON OF THE COST OF PROCURING THE TOTAL QUANTITY OF THE ITEM REVEALS THAT THE LOWEST COMBINATION OF AWARDS ON AN EVALUATED BASIS (INCLUDING FACILITIES) IS AS FOLLOWS:

TABLE

BIDDER QUANTITY EVALUATED COST

WESTERN NONE NONE

WINCHESTER 150,000,480 $9,443,677

REMINGTON89,600,000 5,570,352

$15,014,029

"/2) ON AN OUT-OF-POCKET BASIS (NOT INCLUDING FACILITIES), THE LOWEST COMBINATION OF AWARDS (WHICH WERE, IN FACT, MADE) IS AS FOLLOWS:

TABLE

BIDDER QUANTITY OUT-OF-POCKET COST

WESTERN 33,000,000 $ 2,017,950

WINCHESTER 150,000,480 9,317,872

REMINGTON 56,600,000 3,510,270

$14,846,092

"/3) ON AN OUT-OF-POCKET BASIS, THE AWARDS SET OUT IN PARAGRAPH I (1) ABOVE, WOULD HAVE A TOTAL COST AS FOLLOWS:

TABLE

BIDDER QUANTITY OUT-OF-POCKET COST

WESTERN NONE NONE

WINCHESTER 150,000,480 $ 9,317,872

REMINGTON 89,600,000 5,556,896

$14,874,768

"/4) AWARDS ON THE BASIS ADVOCATED BY THE PROTESTOR (TAB D, PAGES 2 AND 21) WOULD PRODUCE THE FOLLOWING RESULTS:

TABLE

BIDDER QUANTITY OUT-OF-POCKET COST EVALUATED COST

REMINGTON 165,600,000 $10,270,335 $10,283,791

WESTERN 33,000,000 2,017,950 2,055,711

C.I.L. 41,000,480 2,881,273 2,881,273

$15,169,558 $15,220,775

"J. UPON COMPLETION OF THE EVALUATION, IT WAS DETERMINED THAT THE AWARDS WHICH ARE THE SUBJECT OF THIS PROTEST PRODUCED THE LOWEST OUT OF-POCKET COST TO THE GOVERNMENT. IN ORDER TO MAKE THESE AWARDS, APPROVAL OF HIGHER AUTHORITY WAS SOUGHT AND OBTAINED IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE AMC GUIDELINES (SEE TAB J).

"K. DUE CONSIDERATION WAS GIVEN TO THE FEASIBILITY OF AWARDING CONTRACTS TO WESTERN FOR 33,000,000 AND REMINGTON FOR 165,600,000 AND OBTAINING THE BALANCE OF 41,000,480 (1) BY EXERCISE OF THE OPTION CLAUSES CONTAINED IN SUCH CONTRACTS, (2) BY PURCHASE FROM LAKE CITY, (3) BY NEGOTIATION AND (4) BY ISSUANCE OF A NEW INVITATION FOR THAT QUANTITY. ANY OF THE ABOVE ALTERNATIVES WOULD HAVE RESULTED IN DELIVERY SCHEDULES FOR THIS QUANTITY WHICH WOULD HAVE MADE IT IMPOSSIBLE TO MEET THE COMMITMENTS WHICH HAVE BEEN MADE TO SUPPLY THE REQUIREMENTS FOR THIS ITEM.

"FINDINGS:

"A. THE AWARDS UNDER PROTEST PRODUCED THE LOWEST AGGREGATE COST TO THE GOVERNMENT IN KEEPING WITH PREVIOUS DECISIONS OF THE COMPTROLLER GENERAL IN CASES OF THIS NATURE. WHILE THE SAVINGS WHICH RESULTED FROM THE AWARDS AS MADE, OVER AWARDS BASED ON THE LOWEST EVALUATED COST, WERE APPROXIMATELY $28,000, TO HAVE AWARDED CONTRACTS FOR THE TOTAL QUANTITY AS PROPOSED BY THE PROTESTOR (TAB D, PAGES 2 AND 21) WOULD HAVE RESULTED IN AN OUT-OF-POCKET COST TO THE GOVERNMENT APPROXIMATELY $323,500 HIGHER THAN THAT ACCOMPLISHED BY THE AWARDS UNDER PROTEST.

"B. REJECTION OF ALTERNATIVE METHODS OF PROCURING 41,000,480 ROUNDS (IF AWARDS HAD BEEN MADE ONLY TO WESTERN (33,000,000) AND REMINGTON (165,600,000) ( WAS DECIDED UPON ONLY AFTER DUE CONSIDERATION OF THE IMPACT OF SUCH ACTION UPON THE DELIVERY SCHEDULE NECESSARY TO MEET COMMITMENTS, AND OTHER FACTORS.

"C. WAIVER OF FACILITIES EVALUATION WAS MADE IN ACCORDANCE WITH THE TERMS OF THE INVITATION FOR BID AND THE APPLICABLE AMC GUIDELINES.

"D. THE DUAL BIDS SUBMITTED BY WESTERN AND WINCHESTER WERE NOT PREJUDICIAL TO THE GOVERNMENT OR TO THE OTHER BIDDERS.

"RECOMMENDATION:

"THAT THE AWARDS AS MADE BE DECLARED PROPER AND ALLOWED TO STAND.'

IN THE BRIEF SUBMITTED BY YOUR FIRM YOU STATE THAT (1) THE LOWEST COST TO THE GOVERNMENT PRINCIPLE SHOULD NOT HAVE DEFEATED THE LOW BIDDER, YOUR FIRM, IN THE CIRCUMSTANCES PRESENT IN THIS CASE; (2) THAT THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING THE GOVERNMENT FURNISHED EQUIPMENT FACTOR IN EVALUATING THE BIDS WAS IMPROPER AND PREJUDICIAL TO YOUR FIRM; AND (3) THAT THE CONTRACTING OFFICER'S ACCEPTANCE OF OLIN'S TWO SEPARATE BIDS, ONE FROM ITS EAST ALTON PLANT AND ONE FROM ITS NEW HAVEN PLANT, WAS IMPROPER UNDER THESE CIRCUMSTANCES.

UNDER POINT 1 OF YOUR BRIEF YOU CONTEND THAT THE AWARDS SHOULD HAVE BEEN MADE TO THE LOW BIDDERS IN TURN EVEN AT A HIGHER COST TO THE GOVERNMENT. YOU STATE THAT OLIN'S EAST ALTON PLANT SHOULD HAVE RECEIVED AN AWARD FOR FURNISHING 33,000,000 ROUNDS AND THAT YOUR FIRM SHOULD HAVE RECEIVED AN AWARD FOR FURNISHING 165,600,000 ROUNDS. AS TO THE REMAINING 41,000,000 ROUNDS, YOU STATE THAT SINCE OLIN'S NEW HAVEN PLANT BID PRICE COULD NOT BE CONSIDERED REASONABLE BECAUSE IT WAS INSULATED FROM COMPETITION, NEGOTIATIONS SHOULD HAVE BEEN CONDUCTED FOR SUCH QUANTITY OR SUCH QUANTITY READVERTISED. YOU ALLEGE THAT THE CONTRACTING OFFICER MISCONCEIVED THE LIMITS OF HIS AUTHORITY AND CONSIDERED THAT, ONCE HAVING ADVERTISED FOR 239,600,000 ROUNDS OF AMMUNITION, HE HAD TO MAKE AWARDS TOTALING THAT QUANTITY AT THE LOWEST OUT-OF-POCKET COST. IN THAT REGARD, IT IS ADMINISTRATIVELY REPORTED THAT THE CONTRACTING OFFICER WAS NOT UNDER THE IMPRESSION THAT HE HAD NO POWER TO AWARD LESS THAN THE ITEMS SPECIFIED IN THE INVITATION FOR BID; AND THAT ON THE CONTRARY THE CONTRACTING OFFICER CONSIDERED AND DISCARDED THREE ALTERNATIVE METHODS OF FULFILLING THE PROCUREMENT QUANTITY BECAUSE NONE WOULD SATISFY THE REQUIRED DELIVERY SCHEDULE.

OUR OFFICE HAS HELD ON NUMEROUS OCCASIONS THAT THE ONLY PROPER BASIS OF EVALUATION AND AWARD WOULD BE THE LOWEST AGGREGATE COST TO THE GOVERNMENT. 38 COMP. GEN. 550, 552. WE ARE OF THE OPINION THAT IT WAS NOT NECESSARY FOR THE CONTRACTING OFFICER TO CONSIDER THE LONG-TERM EFFECTS OF THIS PROCUREMENT AND THAT IT WOULD NOT HAVE BEEN PROPER FOR HIM TO DISREGARD THE "SHORT-TERM" COSTS. THE SECOND GROUND OF YOUR PROTEST IS THAT THE ACTION OF THE CONTRACTING OFFICE IN DISREGARDING THE USE OF GOVERNMENT-FURNISHED EQUIPMENT BY CONTRACTORS AS AN EVALUATION FACTOR IN EVALUATING THE BIDS WAS IMPROPER AND PREJUDICIAL TO YOUR FIRM. YOU STATE THAT YOUR FIRM HAS SUBSTANTIALLY LESS GOVERNMENT-FURNISHED EQUIPMENT THAN THE OTHER BIDDERS AND THAT THE EFFECT OF THE GOVERNMENT-FURNISHED EQUIPMENT FACTOR IS STRONGLY IN FAVOR OF YOUR FIRM. YOU ALSO STATE THAT WHILE THE INVITATION CONTAINED LANGUAGE TO THE EFFECT THAT THE CONTRACTING OFFICER COULD OVERRIDE THE GOVERNMENT-FURNISHED EQUIPMENT FACTOR IF THERE WERE "SUBSTANTIAL" OUT OF-POCKET SAVINGS TO THE GOVERNMENT, YOUR FIRM STILL WOULD REASONABLY HAVE BEEN EXPECTED TO BID ON THE BASIS OF THE GOVERNMENT-FURNISHED EQUIPMENT FACTOR BEING CONSIDERED; THAT IF OUT-OF- POCKET COST TO THE GOVERNMENT WAS AUTOMATICALLY TO BE THE FINAL CRITERION, IT MADE NO SENSE TO ASK FOR INFORMATION AS TO THE GOVERNMENT-FURNISHED EQUIPMENT IN THE BIDDER'S POSSESSION; THAT YOUR FIRM, AS THE MAJOR BIDDER WITHOUT SUBSTANTIAL QUANTITIES OF GOVERNMENT-FURNISHED EQUIPMENT, WAS PREJUDICIALLY MISLED ON THE QUESTION OF WHAT WAS SUBSTANTIAL; AND THAT AS IT TURNED OUT SUBSTANTIAL OUT-OF-POCKET COST MEANT $29,000 OUT OF A PROCUREMENT OF OVER $15,000,000.

IN REGARD TO THE QUESTION AS TO WHETHER THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING THE GOVERNMENT-FURNISHED EQUIPMENT FACTOR IN EVALUATING THE BIDS WAS PROPER, TWO BASIC PRINCIPLES ARE FOR CONSIDERATION. FIRST, THE STATUTORY REQUIREMENT IN 10 U.S.C. 2305 (C) THAT ADVERTISED CONTRACTS SHALL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED. SECOND, THE DEPARTMENT OF DEFENSE POLICY, AS SET OUT IN ASPR 13-407 (A) (3), THAT A SUITABLE METHOD FOR ELIMINATING ANY COMPETITIVE ADVANTAGE SHALL BE EMPLOYED TO INSURE THAT A CONCERN POSSESSING GOVERNMENT FACILITIES WITHOUT CHARGE IS NOT THEREBY PLACED IN A FAVORED POSITION IN COMPETING FOR GOVERNMENT BUSINESS.

WHILE THE POLICY OF COMPLETE EQUALIZATION OF COMPETITIVE ADVANTAGE TO WHICH THE ABOVE-REFERRED PROVISIONS OF THE ASPR ARE DIRECTED IS A DESIRABLE OBJECTIVE IN PROCUREMENTS INVOLVING THE USE OF GOVERNMENT OWNED EQUIPMENT, TO THE EXTENT THAT SUCH POLICY MIGHT CONFLICT WITH 10 U.S.C. 2305 (C), THE STATUTE MUST PREVAIL. SEE DECISION B-151854, DATED OCTOBER 7, 1963, 43 COMP. GEN. ---. HENCE, SINCE THE LOWEST AGGREGATE PRICE FOR THE TOTAL QUANTITY OF AMMUNITION REQUIRED UNDER THE INVITATION WAS OBTAINED BY DISREGARDING THE GOVERNMENT-FURNISHED EQUIPMENT AS AN EVALUATION FACTOR, THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING SUCH FACTOR IN EVALUATING THE BIDS IN THE PRESENT CASE WAS PROPER.

THE THIRD BASIS FOR YOUR PROTEST IS THAT OLIN SHOULD NOT HAVE BEEN PERMITTED TO SUBMIT TWO SEPARATE INCONSISTENT BIDS, ONE FROM ITS EAST OLIN PLANT AND ONE FROM ITS NEW HAVEN PLANT. YOU CONTEND THAT THE SUBMISSION OF DUAL BIDS WAS IMPROPER UNDER THESE PARTICULAR CIRCUMSTANCES BECAUSE OLIN WAS GIVEN A DECISIVE COMPETITIVE ADVANTAGE TO THE DETRIMENT OF THE GOVERNMENT AND THE OTHER BIDDERS. YOU STATE THAT THE BASIC COMPETITIVE ADVANTAGE THAT OLIN HAD WAS TWO-FOLD: (1) IT PUT OLIN AND ONLY OLIN, IN A POSITION TO KNOW THAT A PARTIAL AWARD WOULD MOST LIKELY GO TO ITS NEW HAVEN PLANT AND THEREFORE THAT A NEW HAVEN "RANGE" OR A "BRACKET" BID WITH HIGH PRICES ON LESSER QUANTITIES WOULD IMPROVE ITS CHANCES OF BEING AWARDED A HIGH QUANTITY EVEN THOUGH IT WAS NOT A LOW BIDDER AND (2) IT PUT OLIN IN A POSITION TO MAKE TWO SEPARATE BIDS ON AN INCONSISTENT BASIS. IS FURTHER STATED THAT ARMY REPRESENTATIVES HAVE SUGGESTED TO YOUR FIRM THAT ONE REASON WHY DUAL BIDS FROM OLIN WERE NOT IMPROPER IS THAT IF EAST ALTON AND NEW HAVEN BIDS HAD BEEN PUT IN THE SAME SET OF PAPERS, THE RESULT WOULD HAVE BEEN THE SAME. IN THAT REGARD, YOU STATE THAT YOUR COMPLAINT, HOWEVER, IS ONE OF SUBSTANCE NOT OF FORM; THAT IF OLIN IS ALLOWED TO BID DIFFERENT LOCATIONS ON AN INCONSISTENT PRICE-QUANTITY BASIS, THERE WILL BE A DUAL BID AND A RESULTING ADVANTAGE REGARDLESS OF WHETHER THERE IS FORMALLY ONE BID OR TWO; AND THAT OLIN SHOULD HAVE BEEN ALLOWED TO SUBMIT ONLY A SINGLE BID ON A CONSISTENT BASIS, THAT IS, IF ITS PRICE FOR 33,000,000 ROUNDS IS $61.01 PER THOUSAND, THEN ITS BID SHOULD SO STATE AND NOT $61.01 AND $67.97 PER THOUSAND.

YOU ALLEGE THAT OUR DECISION OF JUNE 27, 1960, REPORTED AT 39 COMP. GEN. 892, IS CONSISTENT WITH YOUR POSITION. YOU REFER TO THE FOLLOWING STATEMENT MADE ON PAGE 894:

" "OF COURSE, A CONTRACTING OFFICER WOULD BE JUSTIFIED IN REJECTING MORE THAN ONE BID SUBMITTED BY A PERSON, OR BY TWO OR MORE AFFILIATED COMPANIES, WHERE SUCH BIDDING WAS RESORTED TO FOR THE PURPOSE OF CIRCUMVENTING THE REQUIREMENTS OF A STATUTE . . .; WHERE AN UNFAIR ADVANTAGE MAY BE GAINED IN CASES OF AN AWARD THROUGH THE DRAWING OF LOTS; OR IN ANY OTHER INSTANCE WHERE MULTIPLE BIDDING IS PREJUDICIAL EITHER TO THE UNITED STATES OR TO THE OTHER BIDDERS.'"

IN THAT DECISION WE REFERRED TO A REPORT DATED APRIL 2, 1957, TO THE CHAIRMAN, MILITARY OPERATIONS SUBCOMMITTEE, HOUSE COMMITTEE ON GOVERNMENT OPERATIONS, AND IN SUCH REPORT WE STATED IN GENERAL TERMS THAT---

"* * * "IT IS NOT UNUSUAL FOR BIDS TO BE RECEIVED FROM DIFFERENT DIVISIONS OF THE SAME CORPORATION AND SOMETIMES FROM A PARENT CORPORATION AND ONE OR MORE OF ITS SUBSIDIARIES UNDER THE SAME INVITATION FOR BIDS. IN SUCH CASES THE BIDDERS GENERALLY ARE RESPONDING TO SEPARATE COPIES OF THE INVITATION SENT TO THEM AND APPARENTLY DO NOT HAVE ANY REASON TO BELIEVE THAT AN AFFILIATED COMPANY OR DIVISION HAS BEEN REQUESTED TO SUBMIT A BID. WE PERCEIVE NO LEGAL OBJECTION TO CONSIDERATION OF THE BIDS RECEIVED UNDER THESE CIRCUMSTANCES. AN INDIVIDUAL MIGHT ALSO HAVE LEGITIMATE REASONS FOR SUBMITTING BIDS ON BEHALF OF TWO OR MORE OF THE COMPANIES WHICH HE OWNS OR CONTROLS. THIS COULD BE THE SITUATION WHERE PARTIAL AWARDS ARE PERMITTED AND IT IS HOPED THAT AN AWARD WILL BE MADE TO EACH OF THE COMPANIES FOR SUCH AMOUNT OF THE WORK AS IT CAN CONVENIENTLY PERFORM.' THAT APPEARS TO BE THE SITUATION IN THE INSTANT CASE WHERE THE TWO BIDDING PARTIES HOPE TO BE AWARDED A CONTRACT FOR SUCH AN AMOUNT OF THE DESIRED WORK AS THEY, INDIVIDUALLY, MAY BE FOUND BY THE CONTRACTING OFFICER TO BE CAPABLE OF ACCOMPLISHING.'

WE ARE OF THE OPINION THAT OLIN NO DOUBT HAD LEGITIMATE REASONS FOR SUBMITTING BIDS ON BEHALF OF ITS EAST ALTON PLANT AND ITS NEW HAVEN PLANT. ANY COMPETITIVE ADVANTAGE ACCRUING TO OLIN WAS OCCASIONED BY ITS HAVING TWO PLANTS, NOT BY ANY ACT OF THE GOVERNMENT, NOR IS THE GOVERNMENT OBLIGATED TO EQUALIZE SUCH ADVANTAGE.

ON THE BASIS OF THE PRESENT RECORD, WE FIND NO LEGAL BASIS FOR OBJECTING TO THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING GOVERNMENT- FURNISHED EQUIPMENT AS AN EVALUATION FACTOR IN EVALUATING THE BIDS RECEIVED UNDER THIS INVITATION AND TO THE AWARDS MADE THEREUNDER. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.