B-156207, MAR. 24, 1965

B-156207: Mar 24, 1965

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TO ELECTRONIC SPACE STRUCTURES CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEFAX DATED FEBRUARY 25. TO THREE PROSPECTIVE BIDDERS AS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT WAS OPENED ON FEBRUARY 1. OHIO IT IS CONTENDED ON YOUR BEHALF THAT A STATEMENT MADE BY NORTH AMERICAN AVIATION. THIS IS CONFIRMATION OF DISCUSSIONS WHICH RECENTLY HAVE TAKEN PLACE BETWEEN OUR RESPECTIVE CONTRACTING PERSONNEL. * * *.'. SUCH A STIPULATION IS MANDATORY FOR INCLUSION IN AN INVITATION INITIATING THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT BY THE TERMS OF ARMED SERVICES PROCUREMENT REGULATION 2 503.2 (III). YOU ARGUE THAT THE SILENCE OF THE INVITATION ON THIS POINT IS IMMATERIAL SINCE THE LANGUAGE OF THE INVITATION GENERALLY INDICATES AN INTENT THAT THE GOVERNMENT'S SPECIFICATION SHALL TAKE PRECEDENCE.

B-156207, MAR. 24, 1965

TO ELECTRONIC SPACE STRUCTURES CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX DATED FEBRUARY 25, 1965, AND TO THE LETTER OF MARCH 8, 1965, FROM YOUR ATTORNEY, PROTESTING THE REJECTION OF ALL BIDS SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 30-635-65-96 ISSUED BY THE DEPARTMENT OF THE AIR FORCE, AND THE READVERTISEMENT OF THE REQUIREMENT FOR THE MANUFACTURE OF A ONE-HUNDRED AND FORTY FOOT RADOME, CW -798 ( ( (FPS-24, TOGETHER WITH ITS PERMANENT INSTALLATION AT A SITE LOCATED IN MT. NEBO, OREGON.

INVITATION FOR BIDS NO. 30-635-65-96, ISSUED ON JANUARY 15, 1965, TO THREE PROSPECTIVE BIDDERS AS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT WAS OPENED ON FEBRUARY 1, 1965, WITH THE FOLLOWING RESULTS:

TABLE

ELECTRONICS SPACE STRUCTURES CORPORATION (ESSCO) $555,000

WEST CONCORD, MASSACHUSETTS

NORTH AMERICAN AVIATION, INCORPORATED 556,298

COLUMBUS, OHIO

GOODYEAR AEROSPACE COMPANY 803,732

AKRON, OHIO

IT IS CONTENDED ON YOUR BEHALF THAT A STATEMENT MADE BY NORTH AMERICAN AVIATION, INCORPORATED, IN A COVER LETTER DATED JANUARY 29, 1965, WHICH ACCOMPANIED ITS BID, SO QUALIFIED THAT COMPANY'S OFFER AS TO RENDER IT NONRESPONSIVE. THE STATEMENT READS:

"* * * AS HAS ALWAYS BEEN THE UNDERSTANDING OF THE CONTRACTING PARTIES, OUR PROPOSAL CONTEMPLATES THAT IN EVENT OF A CONFLICT BETWEEN SITED (CITED) GOVERNMENT SPECIFICATIONS AND THE CONTRACTOR'S TECHNICAL PROPOSAL THE CONTRACTOR'S TECHNICAL PROPOSAL SHALL GOVERN. THIS IS CONFIRMATION OF DISCUSSIONS WHICH RECENTLY HAVE TAKEN PLACE BETWEEN OUR RESPECTIVE CONTRACTING PERSONNEL. * * *.'

IN SUPPORT OF YOUR PROTEST YOU ARGUE THAT THE ABOVE-RECITED CONDITION AMOUNTS TO A DECLARATION OF THE BIDDER'S REFUSAL TO BE BOUND BY THE GOVERNMENT'S EXHIBIT (SPECIFICATION), A CIRCUMSTANCE VIOLATIVE OF THE STATUTES GOVERNING COMPETITIVE BIDDING WHICH REQUIRE THAT ALL BIDDERS PREDICATE THE BIDS UPON DELIVERY OF ITEMS EQUAL IN ALL MATERIAL RESPECTS.

INVITATION FOR BIDS NO. 30-635-65-96 DID NOT CONTAIN A PROVISION TO THE EFFECT THAT IN THE EVENT OF A CONFLICT BETWEEN THE GOVERNMENT'S EXHIBIT AND AN OFFEROR'S TECHNICAL PROPOSAL, THE FORMER WOULD GOVERN. SUCH A STIPULATION IS MANDATORY FOR INCLUSION IN AN INVITATION INITIATING THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT BY THE TERMS OF ARMED SERVICES PROCUREMENT REGULATION 2 503.2 (III). YOU ARGUE THAT THE SILENCE OF THE INVITATION ON THIS POINT IS IMMATERIAL SINCE THE LANGUAGE OF THE INVITATION GENERALLY INDICATES AN INTENT THAT THE GOVERNMENT'S SPECIFICATION SHALL TAKE PRECEDENCE. CF. 40 COMP. GEN. 514, 517.

IT IS CLEAR THAT THE TECHNICAL PROPOSAL OF NORTH AMERICAN AVIATION WAS CONSIDERED ACCEPTABLE BY THE CONTRACTING OFFICER AND HIS ENGINEERING STAFF OR THE COMPANY WOULD NEVER HAVE RECEIVED AN INVITATION TO BID ON THE SECOND STEP OF THE PROCUREMENT. THERE IS EVIDENCE IN THE RECORD BEFORE US THAT THE CONDITION ATTACHED BY THE PROPOSER TO ITS OFFER WAS ACTUALLY DISCUSSED WITH ROME AIR MATERIEL AREA PERSONNEL DURING THE FIRST STEP AND WAS ANNOUNCED TO BE ACCEPTABLE TO THEM BEFORE THE OPENING OF BIDS. THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO WAIVE THE GOVERNMENT'S RIGHT TO STRICT COMPLIANCE BY ALL OFFERORS WITH THE REQUIREMENTS OF THE EXHIBIT AND OTHER BIDDERS MAY HAVE BEEN PREJUDICED BY THE UNEQUAL TREATMENT ACCORDED NORTH AMERICAN AVIATION. A STATEMENT OF THE PARAMOUNTCY OF THE GOVERNMENT'S EXHIBIT SHOULD HAVE BEEN INCLUDED IN THE INVITATION BUT IN THE ABSENCE OF AN EXPRESS CLAUSE SO PROVIDING,AND IN THE LIGHT OF THE GOVERNMENT'S NEGOTIATIONS WITH NORTH AMERICAN DURING THE FIRST STEP OF THE PROCUREMENT, WE BELIEVE IT WOULD BE GROSSLY UNFAIR TO THAT COMPANY WERE WE TO DECLARE THE CONTRACTING OFFICER'S DETERMINATION OF THE RESPONSIVENESS OF ITS BID TO HAVE BEEN IN ERROR.

IT IS TO BE NOTED THAT NO ACTUAL DISCREPANCY BETWEEN THE TECHNICAL PROPOSAL OF NORTH AMERICAN AVIATION AND THE GOVERNMENT'S EXHIBIT HAS BEEN CALLED TO OUR ATTENTION. FURTHERMORE WE HAVE HELD THAT AN OFFER ON A TWO- STEP FORMALLY ADVERTISED PROCUREMENT MAY NOT BE ELIMINATED FROM COMPETITION WITHOUT GOING THROUGH THE PROCEDURES SPECIFIED IN ARMED SERVICES PROCUREMENT REGULATION 2-503.1 (C) AND (D) FOR THE ELIMINATION OF UNACCEPTABLE PROPOSALS. SEE B-153195 DATED FEBRUARY 6, 1964.

YOU ARGUE THAT THE INVITATION SHOULD NOT HAVE BEEN CANCELLED BUT THAT AWARD SHOULD HAVE BEEN MADE TO YOUR COMPANY ON THE BASIS OF ITS LOW BID. INVITATION FOR BIDS NO. 30-635-65-96 SOLICITED BIDS ON AN F.O.B. ORIGIN BASIS WITH TRANSPORTATION TO THE ULTIMATE DESTINATION VIA A GOVERNMENT BILL OF LADING. THE INVITATION DID NOT PROVIDE THAT THE COST OF TRANSPORTATION TO DESTINATION WOULD BE CONSIDERED IN THE EVALUATION OF THE BIDS. NOR WERE THE BIDDERS CALLED UPON TO SUBMIT AND CERTIFY TO GUARANTEED SHIPPING DATA. UNGUARANTEED TRANSPORTATION DATA WAS SUBMITTED ALONG WITH THE BIDS ON AFPI FORM 28A. IN THIS REGARD THE TWO LOWEST BIDS COMPARED AS FOLLOWS:

CHART

ESSCO NORTH AMERICAN

------ -------------- WEIGHT 200,000 LBS. 220,000 LBS. FREIGHT CLASSIFICATION ANTENNA ENCLOSURE ALUMINUM ARTICLES

OR RADAR HOUSING. AND FORMS, BRACES,

BRACKETS, AND FORMS.

ALUMINUM ARTICLES

AND OTHERS. CUBAGE RAIL: 10 CARS 8600 CUBIC FEET

TRUCK: 20 TRUCK (SHIPMENT IN KNOCKED

LOADS DOWN, UNITIZED

PACKAGES.) COST BY RAIL $29,500 PLUS

$ 9,700

DRAYAGE BLOCKING,

BRACING AT

CAMBRIDGE. COST BY TRUCK $43,350 $16,298

IT IS WELL SETTLED THAT EVEN WHEN THE INVITATION FAILS TO SPECIFY FREIGHT COSTS AS A FACTOR IN THE EVALUATION OF BIDS, THE COST OF DELIVERY OF THE EQUIPMENT OR MATERIALS BEING PURCHASED MUST BE TAKEN INTO CONSIDERATION BY THE GOVERNMENT IN DETERMINING WHICH IS IN FACT THE LOWEST BID RECEIVED. 39 COMP. GEN. 684, 693; 37 ID. 162, 164; 10 ID. 402, CF. ARMED SERVICES PROCUREMENT REGULATION 2-407.5 (A) AND 1 1313.1. IT IS DISCERNIBLE FROM THE FREIGHT DATA SET FORTH ABOVE THAT NORTH AMERICAN AVIATION, INCORPORATED, HAS AN OSTENSIBLE ADVANTAGE OVER ESSCO OF AT LEAST $20,000 IN DELIVERY CHARGES. WHEN THE BID PRICES ARE ADJUSTED TO TAKE THIS DIFFERENCE INTO ACCOUNT NORTH AMERICAN AVIATION BECOMES THE LOWEST BIDDER BY $18,512 ($584,500 FOR ESSCO VERSUS $565,998 FOR NORTH AMERICAN). BUT THE ACTUAL TRANSPORTATION COSTS TO BE EXPECTED FROM AN AWARD TO EITHER COMPANY ARE UNCERTAIN BECAUSE THE INVITATION FAILED TO REQUIRE BIDDERS TO SUBMIT GUARANTEED SHIPPING WEIGHTS, DIMENSIONS, AND CERTIFIED FREIGHT CLASSIFICATIONS. FURTHERMORE THE INVITATION LACKED A PROVISION RENDERING THE CONTRACTOR LIABLE FOR ANY ADDITIONAL SHIPPING COSTS INCURRED BY THE GOVERNMENT BY REASON OF VARIATION BETWEEN GUARANTEED AND ACTUAL WEIGHTS. IT CANNOT HERE BE SAID, AS WAS SAID IN 40 COMP. GEN. 514, AT PAGE 517, AND IN 43 COMP. GEN. 537, THAT FAILURE OF THE INVITATION TO REQUIRE THE SUBMISSION OF GUARANTEED SHIPPING INFORMATION COULD NOT AFFECT THE RELATIVE STANDING OF THE BIDDERS. AN INVITATION FOR BIDS WHICH FAILS TO REQUIRE BIDDERS TO STATE THE GUARANTEED SHIPPING WEIGHT OF AN ITEM TO BE FURNISHED ON AN F.O.B. ORIGIN BASIS, AND WHICH NEGLECTS TO ESTABLISH THE BIDDER'S LIABILITY FOR ADDITIONAL TRANSPORTATION COSTS IN CASE OF VARIATION BETWEEN THE GUARANTEED AND ACTUAL WEIGHTS DOES NOT PROVIDE A BASIS FOR EQUITABLE BID EVALUATION AND IS TO BE CONSIDERED LEGALLY DEFECTIVE. 40 COMP. GEN. 160.

A SET OF BIDS OUGHT NOT TO BE DISCARDED AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE EXCEPT FOR COGENT REASONS. MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699, 719. THE BASIS OF THE RECORD BEFORE US WE BELIEVE IT WOULD BE IMPOSSIBLE TO DETERMINE WITH CERTAINTY WHO IS THE LOWEST BIDDER ON INVITATION FOR BIDS NO. 30-635-65-96. IN OUR OPINION THIS CONSTITUTES A COGENT REASON FOR CANCELLATION OF THE INVITATION AND READVERTISEMENT. WE INTEND, THEREFORE, TO ADVISE THE SECRETARY OF THE AIR FORCE THAT WE WOULD HAVE NO OBJECTION TO THE OPENING OF BIDS ON INVITATION FOR BIDS NO. 30-635-65-173 ISSUED ON FEBRUARY 26, 1965, AND TO THE AWARD OF A CONTRACT TO THE LOWEST RESPONSIVE BIDDER THEREON.

IN LIGHT OF THE ABOVE, THERE IS NO NEED FOR DISCUSSION OF THE OTHER ISSUES RAISED BY YOUR PROTEST.