B-154685, NOV. 4, 1964

B-154685: Nov 4, 1964

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PROTESTING THE ACTION TAKEN BY THE UNITED STATES ARMY AMMUNITION AND SUPPLY AGENCY IN DECLARING THAT YOUR BIDS SUBMITTED IN CONNECTION WITH UNITED STATES ARMY INVITATIONS FOR BIDS AMC/A) 11-173 64- 122 AND AMC/A) 11-173-64-123 WERE NONRESPONSIVE. YOUR BIDS WERE REJECTED DUE TO FAILURE TO OBTAIN WRITTEN AUTHORIZATION PERMITTING THE USE OF GOVERNMENT FACILITIES PRIOR TO BID OPENING. EVIDENCE OF SUCH AUTHORIZATION SHALL BE SUBMITTED UPON REQUEST FROM THE CONTRACTING OFFICER UNDER THIS IFB. "*WARNING: POSSESSION OF GOVERNMENT-OWNED PROPERTY UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT DOES NOT NECESSARILY MEAN THE BIDDER IS ACTUALLY AUTHORIZED TO USE SUCH GOVERNMENT-OWNED PROPERTY IN THE PERFORMANCE OF ANY CONTRACT AS A RESULT OF THIS IFB.'.

B-154685, NOV. 4, 1964

TO KENNEDY VAN SAUN MANUFACTURING AND ENGINEERING CORPORATION:

WE REFER TO BOTH YOUR LETTER OF JULY 7, 1964, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THE ACTION TAKEN BY THE UNITED STATES ARMY AMMUNITION AND SUPPLY AGENCY IN DECLARING THAT YOUR BIDS SUBMITTED IN CONNECTION WITH UNITED STATES ARMY INVITATIONS FOR BIDS AMC/A) 11-173 64- 122 AND AMC/A) 11-173-64-123 WERE NONRESPONSIVE.

THE ADMINISTRATIVE REPORT SHOWS THAT ALTHOUGH YOUR FIRM SUBMITTED THE LOWEST BID PRICES, YOUR BIDS WERE REJECTED DUE TO FAILURE TO OBTAIN WRITTEN AUTHORIZATION PERMITTING THE USE OF GOVERNMENT FACILITIES PRIOR TO BID OPENING. EXAMINATION OF THE ABOVE INVITATIONS DISCLOSES THAT EACH CONTAINED THE FOLLOWING PROVISION REGARDING THE USE OF GOVERNMENT-OWNED PROPERTY:

"IF IN PERFORMING THE WORK BID UPON THE BIDDER PLANS TO USE ANY ITEMS OF GOVERNMENT PROPERTY (INCLUDING ANY ITEMS OF SPECIAL TOOLING COVERED BY THE SPECIAL TOOLING CLAUSE IN ASPR 13-504) IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT WITH THE GOVERNMENT INDEPENDENT OF THIS 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, PRIOR TO THE TIME OF BID OPENING, BE IN FACT AUTHORIZED IN WRITING 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 UNDER THIS IFB.

"*WARNING: POSSESSION OF GOVERNMENT-OWNED PROPERTY UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT DOES NOT NECESSARILY MEAN THE BIDDER IS ACTUALLY AUTHORIZED TO USE SUCH GOVERNMENT-OWNED PROPERTY IN THE PERFORMANCE OF ANY CONTRACT AS A RESULT OF THIS IFB.'

IN YOUR LETTER OF PROTEST TO OUR OFFICE YOU POINT OUT THAT ALTHOUGH YOU REQUESTED AUTHORIZATION TO USE GOVERNMENT FACILITIES FROM THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION, READING, PENNSYLVANIA, YOU WERE INFORMED THAT AUTHORIZATION COULD NOT BE GRANTED UNTIL RECEIPT OF A FORMAL CONTRACT. IT WAS FURTHER SUGGESTED THAT YOUR CURRENT "USE AGREEMENT" WOULD SUFFICE AS EVIDENCE OF YOUR AUTHORITY TO USE ANY ITEM OF GOVERNMENT EQUIPMENT NEEDED TO PERFORM THE CONTRACT.

WHILE WE RECOGNIZE THAT YOU MAY HAVE BEEN MISLED BY THIS INFORMATION THE FACT REMAINS THAT YOUR COMPANY CLEARLY UNDERSTOOD THAT THE PROCURING ACTIVITY REQUIRED THIS WRITTEN AUTHORIZATION PRIOR TO BID OPENING. AS A MATTER OF FACT, YOUR FACILITIES CONTRACT ALSO REQUIRED THAT WRITTEN PERMISSION BE SUBMITTED WITH YOUR BID WHERE YOU INTENDED THE USE OF THESE FACILITIES. UNDER THESE CIRCUMSTANCES WE THINK THAT THE WARNING LANGUAGE IN THE INVITATION PREVIOUSLY QUOTED, COUPLED WITH THE REQUIREMENT FOR AUTHORIZATION CONTAINED IN YOUR FACILITIES CONTRACT, WAS SUFFICIENT TO PLACE YOU ON NOTICE OF WHAT WAS REQUIRED. CONSEQUENTLY, WE HAVE SERIOUS DOUBT WHETHER A BIDDER COULD REASONABLY ARGUE THAT HE ACTED PRUDENTLY UNDER THE CIRCUMSTANCES.

THE REQUIREMENT FOR PRIOR APPROVAL AFFORDS A SAFEGUARD AGAINST POSSIBLE ABUSES BY INDIVIDUAL BIDDERS POSSESSING GOVERNMENT PROPERTY. THE BIDDER WHO SUBMITS HIS BID WITHOUT PRIOR APPROVAL CANNOT FURNISH EXACT DATA PRIOR TO BID OPENING SINCE HE CANNOT BE ASSURED THAT HE WILL BE GRANTED THE RIGHT TO USE ANY OR ALL OF THE PROPERTY LISTED. IF A BIDDER IS NOT REQUIRED TO OBTAIN THIS INFORMATION BEFORE BID OPENING, ANY SUBSEQUENT REFUSAL OR QUALIFICATION ON THE USE OF FACILITIES IN HIS POSSESSION WILL BY NECESSITY AFFECT THE PRIOR EVALUATION.

IN A CLOSELY ANALOGOUS CASE, B-154188, DATED JUNE 26, 1964, WE STATED:

"UNDER THE PROVISIONS OF 10 U.S.C. 2305, WHICH IS A BASIC AUTHORITY FOR AGENTS OF THE GOVERNMENT TO ENTER INTO CONTRACTS BIDS ARE REQUIRED TO CONFORM TO THE TERMS AND ESSENTIAL REQUIREMENTS OF THE ADVERTISED INVITATION TO BE ELIGIBLE FOR AWARD. WHILE THE INVITATION PROVIDED FOR THE SUBMISSION OF BIDS BASED ON USE OF GOVERNMENT PROPERTY IN THE BIDDERS' POSSESSION UNDER SEPARATE FACILITIES CONTRACTS, IN RECOGNITION OF THE USUAL PROVISIONS OF SUCH CONTRACTS VESTING IN THE CONTRACTING OFFICER THE AUTHORITY TO APPROVE OR DISAPPROVE THEIR USE ON OTHER CONTRACTS AND TO PRESCRIBE THE TERMS OF SUCH USE, THE INVITATION PROPERLY REQUIRED THE APPROVALS TO HAVE BEEN IN FACT GRANTED AT TIME OF BID OPENING IN ORDER FOR SUCH BIDS TO BE CONSIDERED RESPONSIVE. THE GOVERNMENT FACILITIES WHICH YOU PLANNED TO USE AS LISTED IN YOUR BID WERE A MATERIAL FACTOR IN DETERMINING YOUR BID PRICE FOR EVALUATION PURPOSES, HENCE, THE NECESSARY PRIOR AUTHORIZATION FOR USE OF THE FACILITIES, WHICH WAS A MATTER OF ADMINISTRATIVE DISCRETION WITH THE FACILITIES CONTRACTING OFFICER, CONSTITUTED AN ESSENTIAL REQUIREMENT OF THE INVITATION NECESSARY FOR THE EVALUATION OF A BID THEREON, AND MAY NOT REASONABLY BE VIEWED AS A MERE INFORMALITY WHICH MAY BE WAIVED.'

FOR THE REASONS STATED ABOVE, WE ARE CONSTRAINED TO CONCLUDE THAT THE ACTION TAKEN BY THE UNITED STATES ARMY AMMUNITION AND SUPPLY AGENCY WAS CORRECT.