B-155429, NOV. 23, 1964

B-155429: Nov 23, 1964

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UNDER LOT I SPACE WAS PROVIDED FOR THE INSERTION OF PRICES FOR THE TEN LISTED COMPONENTS AS WELL AS FOR THE DESIGN AND PROVISIONING DATA. UNDER LOT II SPACE WAS PROVIDED FOR THE QUOTATION OF PRICES FOR ADDITIONAL QUANTITIES OF THESE SAME COMPONENTS AND DATA. YOU STATE THAT THE LOW BID SUBMITTED BY SARATOGA INDUSTRIES IS NONRESPONSIVE TO THE INVITATION AND SHOULD BE REJECTED FOR THE FOLLOWING REASONS: (1) THE BID WAS SUBMITTED IN THE FORM OF A LETTER WHICH MADE ON REFERENCE TO THE TWO AMENDMENTS. FOR WHICH SPACE WAS PROVIDED AT PAGES 39 AND 40. (4) THE LETTER FAILED TO INCLUDE THE REQUIRED REPRESENTATION AS TO WHETHER THE BIDDER IS "A REGULAR DEALER IN" OR "A MANUFACTURER OF" THE SUPPLIES BID UPON.

B-155429, NOV. 23, 1964

TO THE MAGNAVOX COMPANY:

WE REFER TO YOUR LETTERS OF OCTOBER 19 AND NOVEMBER 11, 1964, PROTESTING CONSIDERATION OF A BID SUBMITTED BY SARATOGA INDUSTRIES FOR LOT I UNDER INVITATION FOR BIDS NO. 383-1180-64, AS AMENDED ON JULY 28 AND AUGUST 12, 1964.

THE ABOVE INVITATION, ISSUED ON JUNE 30, 1964, BY THE NAVY AVIATION SUPPLY OFFICE, SOLICITED BIDS ON SPECIFIED QUANTITIES OF TEN OF THE COMPONENTS OF THE AN/ASA-16 INDICATOR GROUP, TOGETHER WITH CHANGE PAGES TO TECHNICAL MANUALS, REVISION DRAWINGS, DESIGN DATA, AND PROVISIONING DATA. UNDER LOT I SPACE WAS PROVIDED FOR THE INSERTION OF PRICES FOR THE TEN LISTED COMPONENTS AS WELL AS FOR THE DESIGN AND PROVISIONING DATA. AMONG OTHER THINGS THE SPECIFIED QUANTITIES OF COMPONENTS INCLUDED 48 COMPUTER CONTROLS (ITEM 1). UNDER LOT II SPACE WAS PROVIDED FOR THE QUOTATION OF PRICES FOR ADDITIONAL QUANTITIES OF THESE SAME COMPONENTS AND DATA. LOT III OF THE BIDDING SCHEDULE COMBINED THE QUANTITY REQUIREMENTS SPECIFIED IN LOTS I AND II.

IN YOUR LETTER OF OCTOBER 19, YOU STATE THAT THE LOW BID SUBMITTED BY SARATOGA INDUSTRIES IS NONRESPONSIVE TO THE INVITATION AND SHOULD BE REJECTED FOR THE FOLLOWING REASONS: (1) THE BID WAS SUBMITTED IN THE FORM OF A LETTER WHICH MADE ON REFERENCE TO THE TWO AMENDMENTS; (2) THE LETTER BID FAILED TO FURNISH SIGNIFICANT INFORMATION REQUIRED FOR BID EVALUATION IN THAT THE BIDDER DID NOT DESIGNATE A PLACE OF ORIGIN FOR SHIPMENT, FOR WHICH SPACE WAS PROVIDED AT PAGES 39 AND 40; (3) THE LETTER BID FAILED TO INCLUDE INFORMATION REQUIRED UNDER CLAUSE 5-105-1.1 AT PAGE 43 OF THE INVITATION CONCERNING INSPECTION AND ACCEPTANCE; (4) THE LETTER FAILED TO INCLUDE THE REQUIRED REPRESENTATION AS TO WHETHER THE BIDDER IS "A REGULAR DEALER IN" OR "A MANUFACTURER OF" THE SUPPLIES BID UPON; (5) THE LETTER FAILED TO FURNISH INFORMATION REQUIRED BY PARAGRAPH 7-101-7.1 OF THE INVITATION CONCERNING PARENT COMPANY AND EMPLOYER IDENTIFICATION; AND FINALLY (6) SARATOGA QUOTED A UNIT AND TOTAL PRICE UNDER ITEM NO. 1 FOR ONLY 28 OF THE DESIRED 48 UNITS.

THE "LETTER BID" SUBMITTED BY SARATOGA INDUSTRIES DATED AUGUST 18, 1964, READS IN PERTINENT PART, AS FOLLOWS:

"PLEASE CONSIDER THIS AS OUR BID AGAINST LOT I OF IFB 383-1180-64. THE OPENING DATE OF THIS BID IS 20 AUGUST 1964 AT 10:00 A.M., EDST.

"WE REPRESENT THAT WE ARE A SMALL BUSINESS INCORPORATED IN THE STATE OF NEW YORK. WE FURTHER REPRESENT THAT WE HAVE NOT EMPLOYED OR RETAINED ANY COMPANY OR PERSON (OTHER THAN A FULL-TIME BONA FIDE EMPLOYEE WORKING SOLELY FOR THE BIDDER) TO SOLICIT OR SECURE THIS CONTRACT.

CHART

UNIT

"ITEM NO. DESCRIPTION QTY PRICE EXTENSION

1 COMPUTER CONTROL 28 $152.00 $ 4,256.00

TOTAL $1,523,170.00

"WE ARE FULLY COGNIZANT OF AND AGREE TO THE TERMS AND CONDITIONS OF SUBJECT IFB INCLUDING DELIVERY REQUIREMENTS AND THE REQUIREMENTS OF INTERCHANGEABILITY OF THESE PARTS DOWN TO A REPLACEMENT PART LEVEL.

"TEST EQUIPMENT DESIGNATED AS ASM-32 AND ASM-35 WILL BE REQUIRED AS GOVERNMENT FURNISHED EQUIPMENT. PROGRESS PAYMENTS BASED ON 70 PERCENT OF TOTAL COSTS WILL LIKEWISE BE REQUESTED.

"THE ABOVE PRICES ARE QUOTED FOB ORIGIN AND OUR TERMS ARE 1/4 OF 1 PERCENT 20 DAYS, NET 30 S.'

BY TELEGRAM OF SEPTEMBER 22, SARATOGA INDUSTRIES CONFIRMED ALL UNIT PRICES BID ON LOT I AND STATED WITH RESPECT TO ITEM NO. 1 THAT IT HAD MISTAKENLY INDICATED A QUANTITY OF 28 RATHER THAN 48 UNITS AND THAT THE BID SHOULD BE AMENDED TO SHOW ITEM NO. 1 AS 48 UNITS MULTIPLIED BY THE UNIT PRICE OF $152 WHICH WOULD MAKE THE TOTAL PRICE FOR THAT ITEM AMOUNT TO $7,296, AND THAT ITS TOTAL BID SHOULD BE CORRESPONDINGLY AMENDED TO $1,526,210.

IN REGARD TO THE FIRST OF YOUR REASONS FOR REJECTION YOU STATE THAT AMENDMENT NO. 1 HAD THE EFFECT OF PRECLUDING POTENTIAL CONTRACTORS FROM MAKING A SYSTEM OF LESS QUALITY THAN THE PARTICULAR SYSTEM ON DISPLAY AT THE NAVAL AVIONICS FACILITY, INDIANAPOLIS, INDIANA. FROM THIS PREMISE YOU CONCLUDE THAT SARATOGA'S BID MUST BE REJECTED SINCE THERE WAS NO ACKNOWLEDGEMENT OF THIS VITAL AMENDMENT AND SARATOGA WOULD NOT BE BOUND BY THE TERMS THEREOF IF IT WERE AWARDED A CONTRACT ON THE BASIS OF ITS "LETTER BID.' WITH THIS WE CANNOT AGREE. THE PROPERTY SPECIFICALLY LISTS THREE ITEMS WHICH WILL BE FURNISHED TO THE SUCCESSFUL BIDDER, THE FIRST OF WHICH ATES,"ONE EACH OF THE AN/ASA-16 COMPONENTS DISPLAYED AT NAFI, IND.' SIMILARLY, AMENDMENT NO. 1 LISTED THE SAME THREE ITEMS. COMPARISON OF THE AMENDED CALUSE WITH THE ORIGINAL SHOWS THAT THE FORMER IS IDENTICAL TO THE LATTER CLAUSE EXCEPT FOR THE ADDITION OF THE ABOVE-QUOTED STATEMENT AND DELETION OF THE PHRASE,"EXCEPT FOR CONTRACT INTERCHANGEABILITY REQUIREMENTS ESTABLISHED AND SET OUT UNDER THE CLAUSE OF THIS CONTRACT ENTITLED "SPECIFICATIONS" FOR WHICH PURPOSE THE COMPONENTS ARE ALSO FURNISHED.' THIS PHRASE WAS INTENDED AS A MODIFICATION TO THE SENTENCE RELATING TO INTENDED USE, BUT A PERIOD, INSTEAD OF A COMMA WAS USED AFTER THE WORD "FURNISHED.' THE AMENDMENT WAS THEREFORE DESIGNED TO CORRECT THE GRAMMATICAL ERROR INVOLVED. WHILE IT IS TRUE THAT AMENDMENT NO. 1 CONTAINS THE FIRST SPECIFIC DESIGNATION OF COMPONENTS TO BE USED FOR INTERCHANGEABILITY PURPOSES, WE THINK PROSPECTIVE BIDDERS WERE PREVIOUSLY PLACED ON NOTICE THAT THE AN/ASA 16 COMPONENTS DISPLAYED AT THE NAVAL AVIONICS FACILITY WERE TO BE SELECTED BY THE GOVERNMENT AS BEING FOR USE FOR INTERCHANGEABILITY PURPOSES. CONSEQUENTLY, WE BELIEVE THAT THE NAVY WOULD BE JUSTIFIED IN WAIVING ACKNOWLEDGEMENT OF THIS AMENDMENT AS AN INFORMALITY OR MINOR IRREGULARITY PURSUANT TO PARAGRAPH 8/B) OF THE TERMS AND CONDITIONS OF THE INVITATION. ON PREVIOUS OCCASIONS THIS OFFICE HAS HELD THAT WHERE AN AMENDMENT DOES NOT, AS A PRACTICAL MATTER, AFFECT THE COST OF THE WORK OR ANY OTHER MATERIAL TERM OF THE INVITATION, FAILURE TO ACKNOWLEDGE RECEIPT OF A LETTER AMENDMENT MAY BE WAIVED FOR PURPOSES OF AWARD. B-144185, JANUARY 25, 1961. CF. 37 COMP. GEN. 785. UNDER THE CIRCUMSTANCES HERE PRESENT, WE BELIEVE THAT THE ABOVE RULE IS FOR APPLICATION. NO FURTHER COMMENTS APPEAR NECESSARY REGARDING THE FAILURE TO ACKNOWLEDGE AMENDMENT NO. 2 SINCE THIS AMENDMENT ONLY EXTENDED THE DATE SET FOR BID OPENING.

THE COMPETITIVE BIDDING STATUTE CODIFIED AT 10 U.S.C. 2305 REQUIRES THAT AWARD OF A CONTRACT BE MADE TO THAT RESPONSIBLE BIDDER SUBMITTING THE LOWEST RESPONSIVE BID. 37 COMP. GEN. 550. WHERE BIDS ARE SUBMITTED ON AN F.O.B. ORIGIN BASIS, ONE OF THE FACTORS FOR CONSIDERATION IS THE GOVERNMENT'S COST OF TRANSPORTATION. SEE GENERALLY 42 COMP. GEN. 434. ESSENTIALLY YOU APPEAR TO TAKE THE POSITION THAT SINCE SARATOGA DID NOT EXPLICITLY DESIGNATE ITS INTENDED F.O.B. POINT OF ORIGIN, ITS BID CANNOT BE EVALUATED FAIRLY SINCE THE GOVERNMENT CANNOT COMPUTE THE COST OF TRANSPORTATION. THE CONTRACTING OFFICER ON THE OTHER HAND HAS TAKEN THE POSITION THAT SINCE SARATOGA HAS ONLY ONE PLANT, WHICH IS LOCATED AT SARATOGA SPRINGS, NEW YORK, IT IS ONLY FAIR TO ASSUME THAT SARATOGA INTENDED TO DESIGNATE SARATOGA SPRINGS AS THE F.O.B. POINT OF ORIGIN FOR PURPOSES OF BID EVALUATION. IT COULD WELL BE ARGUED THAT SARATOGA'S LETTER BID ITSELF INDICATES SARATOGA SPRINGS, NEW YORK, AS ITS INTENDED F.O.B. ORIGIN POINT, SINCE THAT LETTER SHOWS SARATOGA SPRINGS AS THE COMPANY LOCATION, NO OTHER LOCATION IS MENTIONED IN THE LETTER, AND THE LETTER STATES THE COMPANY IS A SMALL BUSINESS INCORPORATED IN THE STATE OF NEW YORK. FURTHER, IN VIEW OF THE FACT THAT SARATOGA'S BID IS APPROXIMATELY $150,000 LESS THAN THE NEXT LOWEST BID (BY RODALE ELECTRONICS), IT IS APPARENT THAT THE COST OF TRANSPORTATION FROM ANY POINT OF ORIGIN (TOTAL WEIGHT IS UNDER 30,000 POUNDS) COULD NOT CHANGE SARATOGA'S STANDING AS LOW BIDDER. IT IS OF COURSE SIGNIFICANT TO NOTE THAT THE INVITATION SPECIFICALLY PROVIDED, AT PAGE 52, AS FOLLOWS:

"/C) IF A BIDDER FAILS TO INSERT A GROSS SHIPPING WEIGHT IN THE SPACE PROVIDED ABOVE, OR IF A BIDDER--- BY USE OF THE WORD "APPROXIMATELY" OR OTHER INDEFINITE WORD OR PHRASE--- FAILS TO INSERT A SPECIFIC WEIGHT, THE GUARANTEED SHIPPING WEIGHT OF THE ARTICLES TO BE DELIVERED HEREUNDER SHALL BE DEEMED TO BE THE WEIGHT SET FORTH BELOW FOR THAT ARTICLE.

CHART

"ITEM GUARANTEED SHIPPING WEIGHT (POUNDS)

1, 15 AND 29 6 LBS.

2, 16 AND 30 9 LBS.

3, 17 AND 31 2 LBS.

4, 18 AND 32 125 LBS.

5, 19 AND 33 130 LBS.

6, 20 AND 34 15 LBS.

7, 21 AND 35 20 LBS.

8, 22 AND 36 20 LBS.

9, 23 AND 37 110 LBS. 10, 24 AND 38 10 LBS.

SHOULD THE ARTICLES DELIVERED, IN FACT, EXCEED THE GROSS SHIPPING WEIGHT SPECIFIED, THE GOVERNMENT WOULD THEN HAVE THE RIGHT TO REDUCE THE CONTRACTOR'S PRICE FOR THAT ARTICLE BY AN AMOUNT EQUAL TO THE DIFFERENCE IN THE COSTS OF SHIPPING.

IN CONNECTION WITH YOUR REFERENCE TO THE "INSPECTION AND ACCEPTANCE" INFORMATION REQUIRED AT PAGE 43, THE NAVY AVIATION OFFICE HAS TAKEN THE POSITION, WITH WHICH WE AGREE, THAT THIS INFORMATION IS OF THE TYPE WHICH MAY BE FURNISHED AFTER BID OPENING. SIMILARLY, WE AGREE WITH THE NAVY THAT FAILURE TO SUPPLY INFORMATION ON WHETHER THE BIDDER WAS "A REGULAR DEALER IN" OR A ,MANUFACTURER OF" THE SUPPLIES BID UPON CAN BE WAIVED SINCE THIS INFORMATION WOULD APPEAR TO RELATE TO THE QUESTION OF RESPONSIBILITY AS DISTINGUISHED FROM RESPONSIVENESS. FOR THE SAME REASON WE THINK THE NAVY COULD DISREGARD THE FACT THAT THE BIDDER FAILED TO FURNISH INFORMATION CONCERNING THE BIDDER'S RELATIONSHIP TO OTHER COMPANIES. B-147943, MARCH 23, 1962; 39 COMP. GEN. 881.

LASTLY, IT IS ARGUED THAT SARATOGA'S BID CANNOT BE CONSIDERED RESPONSIVE AS THEIR BID WAS BASED UPON FURNISHING ONLY 28 OF THE DESIRED 48 COMPUTER CONTROLS. IN THOSE INSTANCES WHERE THE INVITATION FOR BIDS EXPRESSLY PROVIDES THAT NO BID WILL BE CONSIDERED FOR ONLY PART OF THE ITEMS COVERED BY THE INVITATION, FAILURE TO COMPLY THEREWITH WILL RENDER A BID NONRESPONSIVE. B-146329, AUGUST 28, 1961, AND B-141395, DECEMBER 15, 1959. HOWEVER, SINCE NO SUCH MANDATORY PROVISION IS INVOLVED HEREIN THE RULE SPELLED OUT IN THE ABOVE CASES IS NOT FOR APPLICATION.

ON THE CONTRARY, WE THINK THAT THE INVITATION CLEARLY INDICATED THE GOVERNMENT'S WILLINGNESS TO ACCEPT BIDS FOR LESS THAN THE FULL QUANTITY OF ITEMS REQUESTED. IN THIS CONNECTION WE INVITE YOUR ATTENTION TO PARAGRAPH 4-104-1.2 (PAGE 39) WHEREIN IT STATES:

"/X) 4-104-1.2 TIME OF DELIVERY: THE GOVERNMENT REQUIRES THAT DELIVERY BE MADE IN ACCORDANCE WITH THE FOLLOWING SCHEDULE: ITEM WITHIN NO. OF DAYS ITEM WITHIN NO. OF DAYS AFTER DATE OF CONTRACT AFTER DATE OF CONTRACT

*SEE PAGE 41

"A BID MAY OFFER DELIVERY OF ALL OR PART OF THE SUPPLIES COVERED BY THE INVITATION. A BID WHICH OFFERS A DELIVERY SCHEDULE NOT CONFORMING TO THE DELIVERY SCHEDULE SET FORTH ABOVE, OR WHICH OFFERS AN INDEFINITE DELIVERY SCHEDULE, OR WHICH OFFERS A DELIVERY SCHEDULE CONTINGENT UPON THE AVAILABILITY OR RECEIPT OF MATERIAL, WILL BE CONSIDERED NONRESPONSIVE AND WILL BE REJECTED, BUT ONLY TO THE EXTENT TO WHICH THE BID FAILS THUS TO CONFORM OR IS THUS INDEFINITE OR IS THUS CONTINGENT.

"A BIDDER BIDDING ON LESS THAN THE FULL QUANTITY OF AN ITEM IS REQUESTED TO INSERT, OR OTHERWISE FURNISH WITH THE BID, A DELIVERY SCHEDULE FOR THE QUANTITY BID UPON; IF A BIDDER FAILS TO SO FURNISH A DELIVERY SCHEDULE FOR SUCH PARTIAL QUANTITY BID UPON THE BID SHALL BE DEEMED TO OFFER DELIVERY OF THE ENTIRE QUANTITY OF THAT ITEM BID UPON ON THE LAST DAY OF THE DELIVERY SCHEDULE FOR THAT ITEM SET FORTH ABOVE. THE WORD "ITEM" AS USED ABOVE IN THIS CLAUSE SHALL BE DEEMED TO MEAN "SUB-ITEM" WITH RESPECT TO ANY ITEM WHICH IS DIVIDED INTO TWO OR MORE SUB-ITEMS BY THE ADDITION TO THE NUMERICAL ITEM NUMBER OF A SUFFIX, SUCH AS (A), (B), (FX), ETC.'

IN A RECENT DECISION REPORTED AT 40 COMP. GEN. 721 WE HAD OCCASION TO CONSIDER A SITUATION WHERE A LOW BIDDER FAILED TO QUOTE A PRICE ON ONE OF THE ITEMS REQUESTED IN THE INVITATION. THE PROTESTING CONCERN THERE ARGUED THAT THE LOW BID SHOULD NOT HAVE BEEN ACCEPTED SINCE THE BID DID NOT CONFORM TO THE INVITATION AND THAT AWARD MADE THEREUNDER WAS CONTRARY TO THE PROCUREMENT STATUTE. IN REBUTTAL WE POINTED OUT THAT THE BASIC REASON UNDERLYING THE STATUTORY REQUIREMENT THAT A BID, TO BE ELIGIBLE FOR AWARD, MUST BE IN CONFORMITY WITH THE INVITATION IS TO INSURE THAT ALL BIDDERS WILL HAVE THE OPPORTUNITY OF COMPETING ON AN EQUAL BASIS AND TO HAVE THEIR BIDS EVALUATED ON THE SAME BASIS. EQUALITY OF TREATMENT ONLY REQUIRES THAT NO BIDDER BY HIS ACTION GAIN AN ADVANTAGE FOR HIMSELF OR PREJUDICE THE POSITION OF OTHERS. IF THERE BE NO GAIN OR PREJUDICE OTHER BIDDERS GENERALLY HAVE NO JUST CAUSE FOR COMPLAINT. IF A BIDDER NEED NOT BID UPON AN ITEM AT ALL IT FOLLOWS THAT HE NEED NOT BID UPON THE FULL QUANTITY SPECIFIED. WE MUST THEREFORE CONCLUDE THAT THERE WOULD BE NO LEGAL BASIS FOR OBJECTING TO SARATOGA'S BID MERELY BECAUSE IT SUBMITTED A BID ON LESS THAN THE TOTAL QUANTITY OF COMPUTER CONTROLS SPECIFIED. YOUR MOST RECENT COMMUNICATION DATED NOVEMBER 11, 1964, YOU STATE THAT THE NAVY HAS INFORMED YOU THAT LOTS II AND III OF THE INVITATION WERE CONSIDERED ILLEGAL SINCE THEY WERE UNDULY RESTRICTIVE OF COMPETITION. BASED ON THIS ASSUMPTION YOU ARGUE THAT AWARD UNDER LOT I OF THE INVITATION MUST ALSO BE DEEMED ILLEGAL SINCE LOTS I AND II ARE,"INTERDEPENDENT AND INDIVISIBLE BY NATURE AND SUBSTANCE.' WE DO NOT AGREE WITH THIS POSITION, NOR HAS NAVY STATED TO US THAT IT DEEMED THE INVITATION RESTRICTIVE. IN ANY EVENT, THE SECRETARY OF THE NAVY HAS SIGNED A DETERMINATION AND FINDING AUTHORIZING NEGOTIATION FOR THE ITEMS SPECIFIED UNDER LOT II PURSUANT TO THE AUTHORITY CONTAINED IN 10 U.S.C. 2304 (A) (4). WE SHOULD LIKE TO STATE, HOWEVER, THAT WE ARE IN TOTAL DISAGREEMENT WITH THE CONCLUSION THAT THE PROCUREMENT OF ITEMS UNDER ONE LOT WAS SO INTERDEPENDENT UPON PROCURING THE ITEMS UNDER THE OTHER THAT THERE CAN BE NO AWARD UNDER LOT I ONLY. WHILE IT IS TRUE THAT THE GOVERNMENT OBVIOUSLY INTENDED TO PURCHASE THE TOTAL QUANTITY SPECIFIED IN BOTH LOTS, THE INVITATION CONTAINS ABUNDANT EVIDENCE THAT THE NAVY CONTEMPLATED THE POSSIBILITY OF TWO SEPARATE AWARDS. THE FACT THAT SPECIAL QUALIFICATIONS WERE SET OUT FOR BIDDERS UNDER LOT II WHILE NO SUCH QUALIFICATION EXISTED FOR BIDDERS UNDER LOT I IS EVIDENCE ENOUGH THAT THE NAVY RECOGNIZED THE POSSIBILITY THERE MIGHT BE SOME BIDDERS FOR LOT I WHO MIGHT NOT BE ELIGIBLE FOR AWARD UNDER LOT II. ..END :