B-155543, DEC. 1, 1964

B-155543: Dec 1, 1964

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ASKS WHETHER THE BID OF CREST ULTRASONICS CORPORATION IS RESPONSIVE TO IFB 41-608-65-59. THE RECORD DISCLOSES THAT A QUANTITY OF CLEANERS WHICH WILL SATISFY AIR FORCE REQUIREMENTS CAN BE PURCHASED AT THE LOWEST PRICE BY AWARDING A CONTRACT TO CREST. THE PERTINENT LANGUAGE OF THE IFB IS AS FOLLOWS: "C. SERVICE AND REPAIR (2) OVERHAUL INSTRUCTIONS OR OVERHAUL INSTRUCTIONS (SINGLE POINT)" AMENDMENT NO. 1 INDICATED THAT THE SECOND ALTERNATIVE OF PARAGRAPH C (1) AND THE FIRST ALTERNATIVE OF PARAGRAPH C (2) WERE REQUIRED. THE ADMINISTRATIVE REPORT STATES THAT AIR FORCE TECHNICAL PERSONNEL ESTIMATE THAT THE ADDITIONAL COST OF THE MANUALS SPECIFIED IN THE AMENDMENT OVER THOSE WHICH COULD HAVE BEEN FURNISHED UNDER THE ORIGINAL PROVISION OF THE INVITATION SHOULD BE ABOUT $2.

B-155543, DEC. 1, 1964

TO THE HONORABLE SECRETARY OF THE AIR FORCE:

IN A LETTER OF NOVEMBER 5, 1964, THE CHIEF, PROCUREMENT OPERATIONS DIVISION, ASKS WHETHER THE BID OF CREST ULTRASONICS CORPORATION IS RESPONSIVE TO IFB 41-608-65-59, AND ITS AMENDMENTS, ISSUED BY SAN ANTONIO AIR MATERIEL AREA FOR VARIOUS QUANTITIES OF ULTRASONIC CLEANERS.

THE RECORD DISCLOSES THAT A QUANTITY OF CLEANERS WHICH WILL SATISFY AIR FORCE REQUIREMENTS CAN BE PURCHASED AT THE LOWEST PRICE BY AWARDING A CONTRACT TO CREST. HOWEVER, CREST FAILED TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 1 OF THE IFB PRIOR TO BID OPENING. THIS AMENDMENT IDENTIFIED REQUIREMENTS FOR THE PRODUCTION OF CERTAIN INSTRUCTION DATA MANUALS, SOME OF WHICH REQUIREMENTS HAD BEEN SPECIFIED IN THE IFB ONLY IN TERMS OF ALTERNATIVE MANUALS WITHOUT ANY INDICATION THAT EITHER ALTERNATIVE WOULD NOT BE ACCEPTABLE. THE PERTINENT LANGUAGE OF THE IFB IS AS FOLLOWS:

"C. THE TECHNICAL MANUALS LISTED BELOW SHALL BE FURNISHED:

TITLE OR TYPE

(1) OPERATION AND SERVICE INSTRUCTIONS

OR

OPERATION, SERVICE AND REPAIR

(2) OVERHAUL INSTRUCTIONS

OR

OVERHAUL INSTRUCTIONS

(SINGLE POINT)"

AMENDMENT NO. 1 INDICATED THAT THE SECOND ALTERNATIVE OF PARAGRAPH C (1) AND THE FIRST ALTERNATIVE OF PARAGRAPH C (2) WERE REQUIRED.

THE ADMINISTRATIVE REPORT STATES THAT AIR FORCE TECHNICAL PERSONNEL ESTIMATE THAT THE ADDITIONAL COST OF THE MANUALS SPECIFIED IN THE AMENDMENT OVER THOSE WHICH COULD HAVE BEEN FURNISHED UNDER THE ORIGINAL PROVISION OF THE INVITATION SHOULD BE ABOUT $2,450, OR LESS THAN 1/3 OF 1 PERCENT OF CREST'S TOTAL BID PRICE. THIS DETERMINATION WAS REACHED BY ESTIMATING BOTH THE NUMBER OF PAGES PER MANUAL AND THE COST PER PAGE, AND BY ASSUMING THAT UNLESS OTHERWISE RESTRICTED A BIDDER WOULD CHOOSE TO SUPPLY THE LESS COSTLY OF THE ALTERNATIVE MANUALS SPECIFIED IN THE ABOVE QUOTED PARAGRAPHS C (1) AND (2). CREST MAINTAINS THAT THE AMENDMENT HAS NO EFFECT ON ITS PRICE, WHILE THE COMPANY WHOSE BID REPRESENTS THE NEXT LOWEST COST TO THE GOVERNMENT ASSERTS THAT ITS BID PRICE WOULD HAVE BEEN MANY THOUSANDS OF DOLLARS LOWER IF IT HAD NOT INCLUDED THE CORRECT MANUALS IN COMPUTING ITS PRICE.

THE ADMINISTRATIVE REPORT CONCLUDES THAT SINCE THE ESTIMATED EFFECT OF THE AMENDMENT ON THE BID PRICE IS NEGLIGIBLE, CREST'S FAILURE TO TIMELY ACKNOWLEDGE SUCH AMENDMENT MAY BE WAIVED AS A MINOR INFORMALITY UNDER ASPR 2-405 (IV) (B), WHICH PROVIDES FOR SUCH WAIVER WHERE "THE AMENDMENT CLEARLY WOULD HAVE NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE AND NO EFFECT ON QUALITY...' HOWEVER, IN A SUPPLEMENTAL ADMINISTRATIVE REPORT DATED NOVEMBER 18, 1964, IT IS REPORTED THAT THE FIRST ALTERNATIVE MANUAL OF PARAGRAPH C (2) QUOTED ABOVE, IS ESSENTIAL FOR OVERHAUL AND MAINTENANCE FUNCTIONS AT THE FIELD LEVEL, WHERE THE END ITEM IS TO BE DISTRIBUTED, USED AND REPAIRED. IT IS SAID THAT THERE IS NO ASSURANCE PERSONNEL WILL BE AVAILABLE IN THE FIELD WHO HAVE THE SPECIALIZED KNOWLEDGE AND ABILITY NECESSARY TO PERFORM OVERHAUL AND MAINTENANCE FUNCTIONS WITH THE MORE LIMITED INFORMATION WHICH IS CONTAINED IN THE "SINGLE POINT" OVERHAUL MANUAL, AND THAT ACCEPTANCE OF MANUALS OTHER THAN THOSE IDENTIFIED BY AMENDMENT NO. 1 WOULD HAVE REQUIRED THAT ALL END ITEMS BE SENT TO A "SINGLE POINT" OR DEPOT LEVEL FOR OVERHAUL, THUS DECREASING THE EFFECTIVENESS AND INCREASING THE COST OF USING THE ITEMS WHICH THE DATA IS TO SUPPORT.

IN VIEW OF THE FOREGOING, IT IS APPARENT THAT EVEN IF WE WERE ABLE TO CONCLUDE THAT THE AIR FORCE HAD OBTAINED A RELIABLE ESTIMATE OF THE AMOUNT BY WHICH AMENDMENT NO. 1 INCREASED PRODUCTION COSTS, AND THAT THE ESTIMATED INCREASE WAS TRIVIAL, WE WOULD NONETHELESS BE REQUIRED TO OBSERVE THAT THE AMENDMENT HAD A MATERIAL AND SUBSTANTIAL EFFECT ON THE QUALITY OF THE DATA REQUIRED TO BE FURNISHED. ACCEPTANCE OF THE CREST BID AS SUBMITTED WOULD NOT OBLIGATE IT TO FURNISH THE MANUALS REQUIRED BY THE AMENDMENT, AND SHOWN TO BE ESSENTIAL TO THE GOVERNMENT'S NEEDS, AND THE CONTRACT CREATED BY SUCH ACCEPTANCE WOULD THEREFORE BE PREJUDICIAL TO OTHER BIDDERS WHO RECEIVED AND ACKNOWLEDGED THE AMENDMENT. NEITHER CREST'S OFFER TO PERFORM IN ACCORDANCE WITH THE AMENDMENT WITHOUT ANY PRICE INCREASE, MADE AFTER BID OPENING, NOR THE AGENCY'S ESTIMATE OF A REASONABLE PRICE ADJUSTMENT WOULD JUSTIFY SUCH ACCEPTANCE. B-141299, DATED DECEMBER 14, 1959.

FOR THE FOREGOING REASONS, WE MUST CONCLUDE THAT THE CREST BID MAY NOT BE CONSIDERED RESPONSIVE TO THE INVITATION, AND THEREFORE MAY NOT BE CONSIDERED FOR AWARD.

WE ENCLOSE A COPY OF OUR LETTER OF TODAY TO MR. J. M. HADLEY, REPRESENTATIVE FOR THE BENDIX CORPORATION, AND RETURN THE ENCLOSURE TO THE LETTER OF NOVEMBER 5, 1964, FROM CHIEF, PROCUREMENT OPERATIONS DIVISION.