B-154631, DEC. 21, 1964

B-154631: Dec 21, 1964

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 1. THE INVITATION FOR BIDS CONTEMPLATED AN INDEFINITE QUANTITY TYPE OF CONTRACT AND THE TOTAL QUANTITIES SPECIFIED IN THE SCHEDULE UNDER THE HEADING "BASIS OF AWARD" WERE ESTIMATES ONLY. THESE ESTIMATES WERE DOUBLED TO CONFORM TO THE DIRECTIONS OF AMENDMENT NO. 1. AWARD WILL BE MADE ON AN ALL-OR-NONE BASIS TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. BIDDERS ARE CAUTIONED TO BID ON ALL ITEMS AND ONLY THOSE ITEMS SET FORTH IN THE SCHEDULE. WILL MAKE THAT BIDDER NONRESPONSIVE. "THE LOW BID WILL BE DETERMINED ON THE FOLLOWING BASIS: "A. WILL BE DEDUCTED FROM THE FIGURE OBTAINED BY 18.B. "D. AWARD WILL BE MADE TO THE BIDDER WITH THE LOWEST PRICE OBTAINED THROUGH THIS COMPUTATION PROVIDING THE BIDDER HAS QUALIFIED FOR AWARD UNDER ALL REQUIRED PROVISIONS OF THIS INVITATION FOR BID.'.

B-154631, DEC. 21, 1964

TO COOPER-TRENT, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 1, 1964, AND LETTER DATED NOVEMBER 3, 1964, AND TO YOUR ATTORNEY'S LETTER OF JULY 6, 1964, PROTESTING AGAINST THE MAKING OF ANY AWARD OTHER THAN TO YOUR FIRM UNDER INVITATION NO. SC-1560, ISSUED BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, GODDARD SPACE FLIGHT CENTER, GREENBELT, MARYLAND.

THE INVITATION, A SMALL BUSINESS SET-ASIDE, REQUESTED BIDS FOR 68 ITEMS OF PRINTING SUPPLIES OR SERVICES TO BE FURNISHED FROM TIME TO TIME AS ORDERED BY THE GOVERNMENT DURING THE PERIOD JULY 1, 1964, THROUGH FEBRUARY 28, 1966. THE INVITATION FOR BIDS CONTEMPLATED AN INDEFINITE QUANTITY TYPE OF CONTRACT AND THE TOTAL QUANTITIES SPECIFIED IN THE SCHEDULE UNDER THE HEADING "BASIS OF AWARD" WERE ESTIMATES ONLY. THESE ESTIMATES WERE DOUBLED TO CONFORM TO THE DIRECTIONS OF AMENDMENT NO. 1. PARAGRAPH 18 OF THE INVITATION FOR BIDS PROVIDED AS FOLLOWS:

"EVALUATION OF BIDS. AWARD WILL BE MADE ON AN ALL-OR-NONE BASIS TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. BIDDERS ARE CAUTIONED TO BID ON ALL ITEMS AND ONLY THOSE ITEMS SET FORTH IN THE SCHEDULE. FAILURE TO BID ON ALL ITEMS OR FOR QUANTITIES LESS THAN THOSE SPECIFIED, WILL MAKE THAT BIDDER NONRESPONSIVE.

"THE LOW BID WILL BE DETERMINED ON THE FOLLOWING BASIS:

"A. MULTIPLY THE UNIT PRICE TIMES THE TOTAL FIGURE IN THE COLUMN "BASIS OF AWARD.'

"B. ADD THE RESULTS OBTAINED ABOVE.

"C. THE PROMPT PAYMENT DISCOUNT, IF ANY, WILL BE DEDUCTED FROM THE FIGURE OBTAINED BY 18.B.

"D. AWARD WILL BE MADE TO THE BIDDER WITH THE LOWEST PRICE OBTAINED THROUGH THIS COMPUTATION PROVIDING THE BIDDER HAS QUALIFIED FOR AWARD UNDER ALL REQUIRED PROVISIONS OF THIS INVITATION FOR BID.'

THE RECORD SHOWS THAT TWENTY-FOUR FIRMS WERE SOLICITED FOR THE REQUIREMENTS AND SIX FIRMS SUBMITTED BIDS IN THE FOLLOWING AGGREGATE AMOUNTS:

BIDDER AMOUNT

GOODWAY PRINTING COMPANY, INC. $371,211.00

COOPER-TRENT, INCORPORATED 423,767.00

LITHOGRAPHIC PUBLICATIONS, INC. 448,648.00

DORSEL GRAPHIC ART SERVICES, INC. 462,041.00

MCCOLLUM PRESS 527,633.00

ROBERT J. BRADY COMPANY 592,133.00

(THE ABOVE-STATED AGGREGATE AMOUNTS ARE BASED ON ADMINISTRATIVE COMPUTATIONS AND DIFFER FROM COOPER-TRENT COMPUTATIONS EXCEPT AS TO YOUR OWN AGGREGATE BID.)

IT IS REPORTED THAT THE CONTRACTING OFFICE CONTEMPLATES MAKING AN AWARD TO THE GOODWAY PRINTING COMPANY. YOU CONTEND THAT AN AWARD SHOULD NOT BE MADE TO THE GOODWAY PRINTING COMPANY AND THAT THE COMPANY'S BID SHOULD BE REJECTED BECAUSE IT IS AN UNBALANCED BID. YOU STATE THAT THE ORDERS FOR 1963 WERE NOT MADE AVAILABLE TO ALL BIDDERS ALTHOUGH THE APPARENT LOW BIDDER, GOODWAY, KNEW WHAT THE ORDERS WERE IN 1963 SINCE IT HELD THE CONTRACT FOR THAT PERIOD. IT ALSO IS STATED THAT BY REASON OF HOLDING THE PRESENT CONTRACT, GOODWAY WAS ABLE TO QUOTE HIGH PRICES FOR ITEMS THAT IT BELIEVED WOULD BE ORDERED IN LARGE QUANTITIES AND TO QUOTE LOW PRICES FOR ITEMS WHICH IT BELIEVED WOULD BE ORDERED IN SMALLER QUANTITIES. YOU STATE THAT THE METHOD OF BIDDING EMPLOYED BY GOODWAY MAKES A FARCE OF COMPETITIVE BIDDING PROCEDURES, WORKS AGAINST THE BEST INTEREST OF THE GOVERNMENT AND THAT ITS BID SHOULD BE REJECTED.

IN THE LETTER OF JULY 6, 1964, FROM YOUR ATTORNEYS IT IS STATED:

"COOPER-TRENT HAS PREPARED AN ABSTRACT OF ALL BIDS (EX. 1) WHICH REVEALS THAT ON ITEMS 4, 5, AND 6, WHICH ARE ITEMS THAT MUST BE PRODUCED IN ORDER TO PERFORM UNDER THIS CONTRACT, COOPER-TRENT BID $33,120.00 AS AGAINST $124,000.00 BID BY THE APPARENT LOW BIDDER FOR A DIFFERENCE OF $90,880.00. ALL OF THE REMAINING ITEMS UNDER THE BID INVITATION, EXCEPT FOR ITEM 37, ARE NOT REQUIRED IN ORDER TO PRODUCE ANY ONE GIVEN JOB, WHEREAS, ONE OF THE ITEMS 4, 5 OR 6, MUST BE USED IN ORDER TO PRODUCE ANY GIVEN JOB.

"AN EXAMINATION OF SPECIFIC ITEMS IN THE BID OF THE APPARENT LOW BIDDER INDICATES THE EXTREME UNBALANCING OF THE BID AS FOLLOWS:

"/1) ON ITEM 3, STRIP-IN OF LINE NEGATIVES, THE APPARENT LOW BIDDER BID $1.20; YET ITEM 3A WHICH IS FAR MORE COMPLICATED AND COSTLY IS BID AT NO CHARGE.

"/2) ITEMS 3A, 44 AND 65 ARE GIVEN TO THE GOVERNMENT AT NO CHARGE.

"/3) ITEMS 50 THROUGH 53 INVOLVING THE USE OF GOVERNMENT SPECIFIED CLEAR PRINT, TRACING PAPER AND/OR EQUAL ARE ALL BID FAR BELOW THE ACTUAL MATERIAL WHOLESALE PRICES FOR SUCH MATERIAL. FOR EXAMPLE, ON ITEM 50 THE WHOLESALE PRICE FOR SHEET 17 BY 22 INCHES IS $6.48 PER 100 WHEREAS THE APPARENT LOW BIDDER'S BID IS BASED ON FURNISHING THIS FOR $2.00 PRINTED. (EX. 2)

"/4) ITEMS 4, 5 AND 6 REQUIRE VARIOUS SIZES OF METAL PLATES, HOWEVER, THE PLATES ARE EXCESSIVELY OVERPRICED BY THE APPARENT LOW BIDDER. ON ITEM 6 THE APPARENT LOW BIDDER BID $24.00, WHICH IS THREE TIMES HIGHER THAN STANDARD COMMERCIAL RATES.

(5) ITEMS 9, 11, 13, 15, 17, 50, 52, AND 54 ARE FOR THE PRINTING OF ORIGINAL LOTS OF 100 AT A GIVEN PRICE, WHERE AS ITEMS 10, 12, 14, 16, 18, 51, 53, AND 55 ARE FOR PRINTING ADDITIONAL LOTS ON THE SAME RUN BUT AT A COST EQUAL TO OR HIGHER THAN IS QUOTED ON THE ORIGINAL UNITS. FOR EXAMPLE, ON ITEM 50 THE APPARENT LOW BIDDER BID $2.00 TO PRINT 100 SHEETS ON THE FIRST RUN AND ON THE ADDITIONAL LOTS OF 100 SHEETS THE BID JUMPED TO $4.00. THIS IS CONTRARY TO ALL COSTING PRINCIPLES. ITEM 54, PRINTING ON PRESSURE SENSITIVE PAPER, THE APPARENT LOW BIDDER BID AT $3.85 FOR THE FIRST 100 COPIES AND FOR ADDITIONAL FIFTY COPIES AT $12.00. THUS THE GOVERNMENT IS PAYING $3.85 FOR THE FIRST 100 AND $24.00 FOR ADDITIONAL 100 -S. IN 1963 THE APPARENT LOW BIDDER BID $5.85 FOR FIRST 100 COPIES AND $2.50 FOR ADDITIONAL LOTS OF 50 COPIES, WHICH IN OUR OPINION IS THE PROPER METHOD OF BIDDING.

"/6) ON ITEM 37 INVOLVING THE PUBLICATION OF THE GODDARD NEWS ON A BI- WEEKLY BASIS THE APPARENT LOW BIDDER HAS QUOTED A PRICE OF $850.00; YET ALL THE OTHER BIDDERS HAVE BID AT A MUCH LOWER PRICE. THE APPARENT LOW BIDDER'S BID IS THUS OBVIOUSLY HIGH ON ITEMS THAT EVERYONE KNOWS WILL BE ORDERED AND LOW ON ITEMS THAT, BASED ON THEIR PAST EXPERIENCE THEY FEEL WILL IN ALL PROBABILITY NOT BE ORDERED OR ORDERED IN SMALL QUANTITIES.

"ASSUMING AN ORDER INVOLVING PRINTING OF A 64-PAGE BOOK, WITH COVER, SADDLE STITCHING AND ALL LINE COPY, COOPER-TRENT COULD PRODUCE THIS JOB ON THE BASIS OF ITS BID FOR $182.04. ON THE SAME ORDER THE APPARENT LOW BIDDER WOULD CHARGE THE GOVERNMENT $271.00 FOR THE FIRST 100 COPIES. ADDITIONAL LOTS OF 100 COPIES COOPER-TRENT CHARGE TO THE GOVERNMENT IS $12.80 AND THE APPARENT LOW BIDDER'S IS $14.50. (SEE EX. 3 FOR THIS COMPARISON) IN ADDITION, WE HAVE FOUND THAT BY USING THE ACTUAL USAGE FOR THE CONTRACT PERIOD 1962-63 UNDER THIS CONTRACT AND APPLYING THE BID PRICES UNDER THE PRESENT INVITATION, COOPER-TRENT WOULD PRODUCE THESE ITEMS FOR A TOTAL OF $238,488.30, WHEREAS THE APPARENT LOW BIDDER'S CHARGE WOULD BE $311,732.50 FOR AN ADDITIONAL COST TO THE GOVERNMENT OF $73,244.20.'

IN HIS REPORT THE CONTRACTING OFFICER AGREES WITH YOUR CONTENTION THAT THE BID OF GOODWAY PRINTING COMPANY IS UNBALANCED AND THAT THE COMPANY WAS "SECOND-GUESSING" THE GOVERNMENT'S ESTIMATES. HE STATES, HOWEVER, THAT ALL BIDS WERE DECIDEDLY UNBALANCED INCLUDING THAT OF YOUR FIRM.

IN REGARD TO THE ABOVE CONTENTIONS, THE CONTRACTING OFFICE STATES AS FOLLOWS:

"REFERENCE PARAGRAPH 3. COOPER-TRENT CLAIMS THAT ITEMS 4, 5, AND 6 MUST BE USED TO PRODUCE ANY OTHER ITEM WITH THE EXCEPTION OF ITEM 37. EXCEPTION TO THIS CLAIM IS TAKEN.

"1. PLATES CAN BE FURNISHED UNDER THIS CONTRACT ELIMINATING THE USE OF 4, 5, OR 6. (GODDARD HAS THE IN-HOUSE CAPABILITY TO DO THIS).

"2. STORED PLATES CAN BE RE-RUN.

"3. PRINTED JOBS (AT GODDARD) CAN BE SENT OUT FOR BINDING ITEM NUMBERS ONLY.

"4. ITEMS 7 AND 8 CAN BE USED TO PRODUCE ITEMS 9, 10, 11, 12, 13, 14, 15, 16, 38, 39, 43, 44, 45, 46, 47, 48, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 65, 67, AND 68.

"IN ANSWER TO COOPER-TRENTS STATEMENT (4) PAGE 2.

"WHAT IS STANDARD COMMERCIAL RATES? IF YOU STUDY COOPER-TRENTS BID IN RELATION WITH THE OTHER FOUR BIDDERS (GOODWAY EXCLUDED), YOU FIND NO STANDARD RATES BID.

EXAMPLE NO. 1

"ITEM PERCENTAGE COOPER TRENT IS HIGHER

THAN LOW BIDDER (GOODWAY EXCLUDED)

2 104 PERCENT

19 206 PERCENT

21 93.7 PERCENT

22 42.6 PERCENT

25 87.6 PERCENT

27 65.1 PERCENT

56 274.6 PERCENT

EXAMPLE NO. 2

"ITEM PERCENTAGE COOPER TRENT IS LOWER

THAN HIGH BIDDER (GOODWAY EXCLUDED)

44 1,150 PERCENT

45 100 PERCENT

46 210 PERCENT

47 771 PERCENT

48 390 PERCENT

49 429 PERCENT

60 316 PERCENT

61 900 PERCENT

65 400 PERCENT

"CONCLUSION. IF COOPER TRENT BIDS ON INDIVIDUAL ITEM NUMBERS, EITHER HIGH OR LOW, REFLECTS SUCH A LARGE PERCENTAGE OF DIFFERENCE, SURELY THEY DID NOT FOLLOW A SYSTEM OF BIDDING THAT WAS BASED ON "STANDARD COMMERCIAL RATES.'

"COOPER TRENTS STATEMENT NUMBER 5

"IF YOU COMBINE THE ITEM NUMBERS AS LISTED BY COOPER TRENT AND COMPARE THEM WITH GOODWAYS BID THE RESULTS ARE AS FOLLOWS:

EXAMPLE NO. 3

"ITEM NUMBERS COOPER TRENT GOODWAY

9 AND 10 .72* .80

11 AND 12 1.12* 1.40

13 AND 14 2.50* 3.36

15 AND 16 2.39 1.75*

17 AND 18 5.05 1.75*

50 AND 51 17.93 6.00*

52 AND 53 34.33 10.00*

54 AND 55 7.60* 15.85

$71.64 $40.91

"CONCLUSION.EACH BIDDER IS LOW ON FOUR ITEMS. A SERIES OF ORDERS INVOLVING ALL COMBINATIONS WOULD RESULT IN A DIFFERENCE OF $30.73 IN GOODWAYS FAVOR FOR COMBINATIONS OF ITEMS AS LISTED BY COOPER TRENT.

"ITEM 6. COOPER TRENT STATES THAT 850.00 IS TOO HIGH A PRICE. THIS STATEMENT IS NOT SUBSTANTIATED SIMPLY BECAUSE OF LOWER BIDS BY THE OTHER BIDDERS. DUE TO THE TIGHT DEADLINES, OVERTIME, AND THE QUALITY SPECIFIED, $850.00 IS MORE IN LINE THAN THE LOWER BIDS OF THE OTHER BIDDER.

"ON PAGE 2, LAST PARAGRAPH, WHICH REFERS TO EXHIBIT 3 IS BASED ON AN ASSUMPTION THAT ALL 64 PAGES ARE LINE COPY, PAGE SIZE. THIS TYPE OF WORK WOULD BE ORDERED UNDER ITEMS OTHER THAN AS SHOWN BY COOPER TRENT.

EXAMPLE NO. 4 64 PAGES PLUS COVER

"ITEM UNITS COOPER TRENT GOODWAY

7 65 29.44 48.00

11 32 1/2 21.45 22.75

12 32 1/2 14.95 22.75

38 100 5.00 5.00

39 200 2.00 2.00

43 1 .41 .25

44 5 .20 0

73.45 100.75

"FURTHERMORE THIS IS ONLY ONE TYPE OF JOB THAT WILL BE ORDERED. LET US EXAMINE ANOTHER TYPE. WE WILL TAKE AN ACTUAL OPERATIONAL PLAN. DOCUMENT X-539-64-159, 2,000 COPIES ORDERED UNDER T.I.D. 43464.

EXAMPLE NO. 5

"ITEM UNITS COOPER TRENT GOODWAY

1 162 157.14 81.00

2 13 19.89 6.50

3 13 6.63 15.60

5 41 146.37 471.50

17 2 7.14 1.50

18 38 56.24 38.00 19 20 122.40 30.00

20 380 699.20 285.00

21 1 8.725.00

22 9 38.52 27.00

38 12,000 600.00 600.00

42 4 6.12 6.00

43 40 16.40 10.00

--------- --------- $1,884.79 $1,577.10

"CONCLUSION. 1. GODDARD WILL ORDER UNDER THE CONTRACT TO THE GOVERNMENTS BEST ADVANTAGE.

"2. COST OF JOB WILL BE DEPENDENT ON TYPE OF ITEMS ORDERED, PLUS LENGTH OF RUN.'

IN FURTHER SUPPORT OF YOUR PROTEST IT IS STATED THAT OUR DECISIONS, B- 151770, AUGUST 15, 1963, 43 COMP. GEN. 159, AND B-151910, AUGUST 20, 1963, CLEARLY SUPPORT YOUR POSITION. IN YOUR LETTER OF NOVEMBER 3, 1964, COMMENTING ON THE REPORT OF NASA TO OUR OFFICE YOU DENY THAT YOUR BID WAS UNBALANCED AND YOU ALSO QUESTION THE ACTION OF ANSA IN DOUBLING THE ESTIMATED QUANTITIES BY THE ISSUANCE OF AMENDMENT NO. 1.

YOU ALSO STATE THAT THE INTENT OF NASA TO JUGGLE ORDERS TO OFFSET UNBALANCING WOULD MAKE ADMINISTRATION OF THE CONTRACT IMPRACTICAL AND IN ANY CASE, SUCH INTENDED "POKER PLAYING" BETWEEN THE USING AGENCY AND THE CONTRACTOR CANNOT BE SUBSTITUTED FOR COMPLIANCE WITH THE CLEAR REQUIREMENTS OF LAW, REGULATIONS, AND DECISIONS THAT BIDS BE TAKEN ON A BASIS WHICH IS FAIR, EVALUATED ON A BASIS WHICH IS REALISTIC AND PRECLUDES GAMBLING AND AWARDS BE MADE BASED ON CONDITIONS AS THEY EXIST AT THE TIME OF THE OPENING OF THE BIDS.

YOU ALSO POINT OUT THAT, IN THE BASIS FOR AWARD, NASA GROSSLY UNDERESTIMATED THE NUMBER OF PLATES AND NEGATIVES REQUIRED TO PRODUCE THE NUMBER OF PAGES ESTIMATED TO BE REQUIRED. A SUBSTANTIAL PART OF THIS ARISES FROM NASA'S FAILURE TO ESTIMATE TWICE THE NUMBER OF NEGATIVES AND TWICE THE NUMBER OF PLATES WHERE LITHOGRAPHING ON TWO SIDES OF A SHEET WAS INTENDED. BASED ON THE ADDITIONAL NUMBER OF NEGATIVES AND PLATES THAT WOULD BE REQUIRED IN ORDER TO PRODUCE THE NUMBER OF PRINTED PAGES SET FORTH IN THE ESTIMATE UNDER IFB-SC-1560 YOU STATE THAT COOPER-TRENT NOW BECOMES THE LOW BIDDER AND NOT ONLY IS GOODWAY PRINTING COMPANY NO LONGER THE LOW BIDDER BUT ACTUALLY RANKS 3RD AMONG THE 6 BIDS SUBMITTED. FURTHERMORE, YOU STATE THAT THE GOVERNMENT WOULD HAVE PAID LESS FOR THE ITEMS PURCHASED IN THE PRIOR FISCAL YEAR HAD YOU BEEN AWARDED THE CONTRACT. USING THE PRIOR YEAR PURCHASES AS A BASE YOU ALSO ALLEGE THAT YOUR BID WOULD BE LOW.

IN REGARD TO THE STATUS OF UNBALANCED BIDS, YOUR ATTENTION IS INVITED TO THE CASE OF FRANK STAMATO AND CO. V. CITY OF NEW BRUNSWICK, 90 A.2D 34, 36, WHEREIN THE COURT HELD AS FOLLOWS:

"AN UNBALANCED BID COMPREHENDS A BID BASED ON NOMINAL PRICES FOR SOME WORK AND ENHANCED PRICES FOR OTHER WORK. THE MERE FACT THAT A BIDDER HAS SUBMITTED AN UNBALANCED BID, DOES NOT AUTOMATICALLY OPERATE TO INVALIDATE AN AWARD OF THE CONTRACT TO SUCH BIDDER. THERE MUST BE PROOF OF COLLUSION OR OF FRAUDULENT CONDUCT ON THE PART OF SUCH BIDDER AND THE CITY OR ITS ENGINEER OR OTHER AGENT, OR PROOF OF OTHER IRREGULARITY OF SUCH SUBSTANTIAL NATURE AS WILL OPERATE TO AFFECT FAIR AND COMPETITIVE BIDDING.'

SEE ALSO WALTER V. MCCLELLAN 99 N.Y. SUPP. 78, 84, AND PHIFER V. CITY OF BAYONNE, 146 ATL. 463, 465; 38 COMP. GEN. 574.

REGARDING THE DECISIONS OF THIS OFFICE CITED BY YOU IN SUPPORT OF YOUR POSITION, IT IS OUR VIEW THAT THOSE DECISIONS ARE DISTINGUISHABLE FROM THE INSTANT CASE. IN THOSE CASES THE METHODS OF EVALUATION WERE SUCH THAT IT COULD NOT BE DETERMINED THAT A CONTRACT WOULD RESULT IN FAIR AND REASONABLE PRICES TO THE GOVERNMENT. IN THE INSTANT CASE, HOWEVER, THE GOVERNMENT HAS COMPLETE CONTROL OVER THE QUANTITIES ORDERED SINCE THE GOVERNMENT IS NOT REQUIRED TO ORDER ALL OR, IN SOME INSTANCES, ANY PART OF ITS REQUIREMENTS FOR PARTICULAR ITEMS FROM THE SUCCESSFUL BIDDER.

THE QUESTION WHETHER A BID SHOULD BE REJECTED AS NOT BEING IN THE INTEREST OF THE GOVERNMENT IS ONE PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICIALS. HOWEVER, AS POINTED OUT IN DECISION OF DECEMBER 19, 1962, B-150379, A DETERMINATION TO REJECT IN A SITUATION SUCH AS HERE INVOLVED WOULD HAVE TO BE BASED UPON A FINDING THAT THE INCONSISTENT OR UNREALISTIC METHOD OF BIDDING MIGHT RESULT IN HIGHER COSTS TO THE GOVERNMENT OR MAKE IT IMPRACTICABLE TO DETERMINE WHAT THE PROBABLE COSTS WOULD BE UNDER SUCH A BID. AS HEREINBEFORE STATED IT WAS ADMINISTRATIVELY DETERMINED THAT GOODWAY'S METHOD OF BIDDING WOULD NOT AFFECT THE OVERALL COST TO THE GOVERNMENT. THE CORRECTNESS OF SUCH DETERMINATION WOULD SEEM TO BE SUBSTANTIATED BY THE FACT THAT THE CONTRACTING OFFICE INTENDS TO USE ITS "IN-HOUSE" FACILITIES FOR THE PRODUCTION OF A MAJORITY OF THE HIGHER PRICED ITEMS AND THUS CONTROL THE OVER-ALL COST TO THE GOVERNMENT.

WE DO NOT AGREE WITH YOUR CONTENTION THAT THE INTENTION OF THE GOVERNMENT TO PURCHASE LARGER QUANTITIES OF UNDERPRICED ITEMS AND SMALLER QUANTITIES OF OVERPRICED ITEMS FOR THE SUCCESSFUL BIDDER TO OVERCOME THE EFFECT OF UNBALANCED BIDDING IS EITHER ADMINISTRATIVELY IMPRACTICAL OR LEGALLY IMPROPER.

REGARDING YOUR COMPUTATIONS BASED ON THE PRIOR YEAR UTILIZATION WE DO NOT BELIEVE THAT SUCH COMPUTATION PROPERLY MAY BE USED IN EVALUATING THE BIDS UNDER THE INSTANT INVITATION. ALL BIDDERS WERE ADVISED THAT THE BIDS WOULD BE EVALUATED ON THE BASIS OF THE ESTIMATED QUANTITIES SHOWN AT THE UNIT PRICE QUOTED. ON THAT BASIS GOODWAY WAS THE LOW BIDDER. ANY OTHER METHOD OF EVALUATION WOULD NOT ONLY BE IMPROPER BUT PREJUDICIAL TO THE OTHER BIDDERS.

FOR THE FOREGOING REASONS, WE DO NOT BELIEVE THAT THE POINTS YOU HAVE RAISED WOULD JUSTIFY OUR OFFICE IN QUESTIONING AN AWARD BEING MADE IN THE INSTANT PROCUREMENT TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.