B-156746, MAY 13, 1965

B-156746: May 13, 1965

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UNIT PRICES WERE REQUESTED FOR VARIOUS DEGREES OF REPAIR WHICH MIGHT BE NECESSARY. BIDDERS WERE ALSO REQUIRED TO STATE THE NUMBER OF MAN-HOURS REQUIRED AND THE UNIT PRICE FOR FURNISHING TWO TYPES OF REPORTS. SPECIFIC NUMBER WAS SPECIFIED FOR TEARDOWN REPORTS AND BID EVALUATION APPARENTLY WAS ON THE BASIS OF ONLY ONE SUCH REPORT. WERE REQUIRED MONTHLY. IT IS STATED THAT FROM FIVE TO TEN SUCH REPORTS WOULD BE REQUIRED DEPENDING ON THE NUMBER OF GENERATOR SETS TO BE REPAIRED. THERE WERE EIGHT BIDS OPENED ON MARCH 1. IT IS UNDERSTOOD THAT ALL OF THE LATTER HAD BID ON PRIOR INVITATIONS FOR SIMILAR WORK AND THAT UNDER THESE PRIOR INVITATIONS. WHILE SIMILAR REPORTS WERE REQUIRED. NO SPECIFIC PRICE THEREFOR WAS REQUESTED.

B-156746, MAY 13, 1965

TO THE HONORABLE SECRETARY OF THE AIR FORCE:

BY LETTER DATED MAY 10, 1965, THE CHIEF, PROCUREMENT OPERATIONS DIVISION, ASKED OUR DECISION WHETHER A LOW BID SUBMITTED BY AEROTRONICS CORPORATION UNDER INVITATION FOR BIDS NO. 04-606-65-102 MAY BE ACCEPTED.

THE INVITATION SOLICITED BIDS FOR FURNISHING LABOR AND MATERIALS TO REPAIR A QUANTITY OF FROM 21 TO 40 GENERATOR SETS, AS ORDERED BY THE GOVERNMENT. UNIT PRICES WERE REQUESTED FOR VARIOUS DEGREES OF REPAIR WHICH MIGHT BE NECESSARY, WITH APPROPRIATE WEIGHTING FACTORS FOR EACH. BIDDERS WERE ALSO REQUIRED TO STATE THE NUMBER OF MAN-HOURS REQUIRED AND THE UNIT PRICE FOR FURNISHING TWO TYPES OF REPORTS, NAMELY, TEARDOWN DEFICIENCY REPORTS AND OVERHAUL CONTRACTOR'S END ITEM REPORTS. SPECIFIC NUMBER WAS SPECIFIED FOR TEARDOWN REPORTS AND BID EVALUATION APPARENTLY WAS ON THE BASIS OF ONLY ONE SUCH REPORT. THE END ITEM WHICH WE UNDERSTAND TO BE MAINLY INFORMATION AS TO THE WORK IN PROCESS, WERE REQUIRED MONTHLY, AND IT IS STATED THAT FROM FIVE TO TEN SUCH REPORTS WOULD BE REQUIRED DEPENDING ON THE NUMBER OF GENERATOR SETS TO BE REPAIRED.

THERE WERE EIGHT BIDS OPENED ON MARCH 1, 1965. THE SIX LOW BIDDERS FAILED TO QUOTE A PRICE FOR THE REPORTS MENTIONED ABOVE. IT IS UNDERSTOOD THAT ALL OF THE LATTER HAD BID ON PRIOR INVITATIONS FOR SIMILAR WORK AND THAT UNDER THESE PRIOR INVITATIONS, WHILE SIMILAR REPORTS WERE REQUIRED, NO SPECIFIC PRICE THEREFOR WAS REQUESTED, THE SMALL COST THEREOF EITHER ABSORBED BY BIDDERS OR INCLUDED IN THE OVERHAUL COSTS. UPON INQUIRY AFTER BID OPENING, EACH OF THE SIX STATED THAT THE COST OF THE REPORTS WAS INCLUDED IN HIS OVERHAUL PRICES.

THE TWO HIGH BIDDERS DID FURNISH THE NUMBER OF MAN-HOURS AND A PRICE PER REPORT, 3 HOURS FOR THE TEARDOWN REPORT, $15.00 AND $16.50, AND 2 HOURS FOR THE END ITEM REPORT, $10.00 AND $10.86. AT THE LOW BIDDER'S HOURLY RATE OF $8.00, AND ASSUMING THE SAME NUMBER OF HOURS PER REPORT, HIS PRICE FOR THE REPORTS IF QUOTED SEPARATELY WOULD APPARENTLY HAVE BEEN A MINIMUM OF $104.00 AND A MAXIMUM OF $184.00. THE TWO LOW BIDS, AS EVALUATED, WERE $31,598 AND $32,576. THE LOWER OF THE TWO BIDS QUOTING REPORT PRICES (GENERAL ENGINE REBUILDERS) WAS $60,039.

WE ARE ADVISED THAT AWARD WOULD NOT BE MADE IN ANY CASE TO GENERAL ENGINE BECAUSE OF THE APPROXIMATELY $28,000 DIFFERENCE BETWEEN ITS BID AND THAT OF THE LOW BIDDER, AND THAT IF ONE OF THE TWO LOW BIDS CANNOT BE ACCEPTED THE PROCUREMENT WILL BE READVERTISED. THE CONTRACTING OFFICER CONSIDERS THAT THE FAILURE ON THE PART OF SIX OF THE EIGHT BIDDERS TO QUOTE A PRICE ON REPORTS IS AN IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION HAVING MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, THEREFORE RECOMMENDS WAIVER OF THE DEVIATION AS A MINOR INFORMALITY OR IRREGULARITY UNDER SECTION 2-405 OF THE ARMED SERVICES PROCUREMENT REGULATION AND AWARD TO THE LOW BIDDER.

THE SITUATION IS THAT THE SIX LOW BIDDERS DID IN FACT COMPETE ON EQUAL TERMS, AND IF NO OTHER BIDS HAD BEEN RECEIVED, IT WOULD SEEM PREFERABLE NOT TO READVERTISE. THE MAXIMUM VALUE OF THE REPORTS IS LESS THAN SEVEN- TENTHS OF ONE PERCENT OF BOTH THE LOW BID AND THE DIFFERENCE BETWEEN THAT BID AND THE LOWEST BID QUOTING REPORT PRICES. IT SEEMS OBVIOUS, ALSO, THAT NEITHER OF THE TWO BIDDERS WHO COMPLIED STRICTLY WITH THE INVITATION COULD HOPE TO BECOME LOW BIDDER IN THE EVENT OF A READVERTISEMENT.

BECAUSE OF THE FACT THAT THE PROCUREMENT WOULD OTHERWISE BE READVERTISED, AND IN VIEW OF THE OTHER CIRCUMSTANCES OUTLINED ABOVE, WE BELIEVE THE INTERESTS OF THE COMPETITIVE BIDDING SYSTEM WOULD BEST BE SERVED IN THIS CASE BY CONSIDERING THE DEFECTS IN THE SIX LOW BIDS AS WAIVABLE MINOR IRREGULARITIES.