B-156880, AUG. 27, 1965

B-156880: Aug 27, 1965

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TO HAZELTINE CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 27. THIS INVITATION IS THE SECOND STEP OF A TWO-STEP. IT WAS ISSUED MARCH 11. THE "BIDDING REQUIREMENTS AND CRITERIA FOR EVALUATION OF BIDS" SECTION OF THE INVITATION STATES THAT (1) BIDDERS ARE REQUIRED TO SUBMIT A UNIT PRICE AND TOTAL PRICE FOR THE FIRST PROGRAM YEAR . IF THE MULTI-YEAR PRICE IS LOW. (6) CANCELLATION NOTICE DATE FOR THE SECOND PROGRAM YEAR'S REQUIREMENT WILL BE OCTOBER 15. QUOTATIONS ARE REQUESTED UNDER ITEM 1 FOR 10 UNITS OF THE RECEIVING SET. UNDER THE TITLE "LOT II - TOTAL REQUIREMENT" QUOTATIONS ARE REQUESTED UNDER ITEM 1 FOR 180 UNITS. UNDER ITEM 10 OF THE SAME LOT II ADDITIONAL QUOTATIONS ARE REQUESTED AS FOLLOWS: CHART MIN-MAX 181-201 $ .

B-156880, AUG. 27, 1965

TO HAZELTINE CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 27, 1965, AND FURTHER CORRESPONDENCE, PROTESTING AGAINST AN AWARD TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. 600-1169-64.

THIS INVITATION IS THE SECOND STEP OF A TWO-STEP, FORMALLY ADVERTISED MULTI-YEAR PROCUREMENT. IT WAS ISSUED MARCH 11, 1965, BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., WITH BID OPENING SET FOR APRIL 5, 1965, LATER MODIFIED TO APRIL 12, 1965, AND CALLS FOR THE SUPPLY OF A QUANTITY OF AN-APR 19 RADAR RECEIVING SETS, WITH RELATED DATA, SERVICES, REPAIR PARTS, AND SPECIAL SUPPORT EQUIPMENT.

THE "BIDDING REQUIREMENTS AND CRITERIA FOR EVALUATION OF BIDS" SECTION OF THE INVITATION STATES THAT (1) BIDDERS ARE REQUIRED TO SUBMIT A UNIT PRICE AND TOTAL PRICE FOR THE FIRST PROGRAM YEAR ,/LOTI); " (2) BIDDERS MAY SUBMIT A PRICE FOR THE MULTI-YEAR REQUIREMENT BUT SUCH PRICE SHALL BE FOR THE ENTIRE QUANTITY SET FORTH UNDER "LOT II" (WHICH INCLUDES THE REQUIREMENTS FOR BOTH THE FIRST AND SECOND YEARS); (3) THE UNIT PRICE FOR LIKE ITEMS IN THE MULTI-YEAR REQUIREMENTS SHALL BE THE SAME FOR EACH PROGRAM YEAR'S REQUIREMENTS; (4) IN COMPARING PRICES FOR THE FIRST PROGRAM YEAR REQUIREMENT AGAINST PRICES FOR THE MULTI-YEAR REQUIREMENT THE EVALUATED UNIT PRICE OF THE LOWEST BID RECEIVED UNDER LOT I SHALL BE MULTIPLIED BY THE TOTAL NUMBER OF UNITS OF THAT ITEM UNDER LOT II AND, IF THE MULTI-YEAR PRICE IS LOW, AWARD SHALL BE MADE ON THAT BASIS; (5) IF THE GOVERNMENT DEEMS IT NECESSARY TO CANCEL THE REQUIREMENTS OF THE CONTRACT EFFECTIVE AT THE END OF THE FIRST PROGRAM YEAR, THE CANCELLATION CEILING COST SHALL BE 25 PERCENT OF THE TOTAL MULTI-YEAR CONTRACT PRICE; AND (6) CANCELLATION NOTICE DATE FOR THE SECOND PROGRAM YEAR'S REQUIREMENT WILL BE OCTOBER 15, 1966.

UNDER THE TITLE "LOT I - FIRST PROGRAM YEAR" IN SECTION 1.0 OF THE SCHEDULE OF SUPPLIES AND SERVICES, QUOTATIONS ARE REQUESTED UNDER ITEM 1 FOR 10 UNITS OF THE RECEIVING SET. UNDER THE TITLE "LOT II - TOTAL REQUIREMENT" QUOTATIONS ARE REQUESTED UNDER ITEM 1 FOR 180 UNITS, AND UNDER ITEM 10 OF THE SAME LOT II ADDITIONAL QUOTATIONS ARE REQUESTED AS FOLLOWS:

CHART

MIN-MAX

181-201 $ ------------ $ --------------

202-222 $ ------------ $ ------------ -

223-243 $ ------------ $ --------------

244-264 $ ------------ $ --------------

265-285 $ ------------ $ ------------ -

SECTION 1.0 OF THE SCHEDULE CONTAINS THE FOLLOWING STATEMENTS WITH RESPECT TO THE ITEM 10 QUANTITIES:

"OPTION FOR INCREASED QUANTITIES:

"/A) THE GOVERNMENT MAY INCREASE THE QUANTITY OF SUPPLIES CALLED FOR HEREIN UP TO BUT NOT EXCEEDING THE MAXIMUM AMOUNT SET FORTH UNDER ITEM 10 AT THE UNIT PRICE SPECIFIED IN THE SCHEDULE FOR SUCH QUANTITY. THE CONTRACTING OFFICER MAY EXERCISE THIS OPTION AT THE TIME SET FORTH IN THE SCHEDULE FOR NOTIFICATION THAT FUNDS ARE AVAILABLE FOR THE SECOND PROGRAM YEAR BY GIVING WRITTEN NOTICE TO THE CONTRACTOR.

"THE QUANTITY UNDER OPTION SHALL NOT BE CONSIDERED A QUANTITY CANCELLED FOR THE PURPOSE OF COMPUTING ALLOWABLE CANCELLATION CHARGES.'

THE FIVE BIDS RECEIVED WERE OPENED ON APRIL 12, 1965. HAZELTINE CORPORATION AND EMERSON ELECTRIC COMPANY WERE THE LOWEST BIDDERS. INASMUCH AS THE MULTI-YEAR BIDS WERE EVALUATED TO BE LOWER THAN THE BIDS ON THE FIRST-YEAR QUANTITY WE ARE CONCERNED ONLY WITH THE MULTI YEAR BIDS. EMERSON BID $18,425 PER UNIT FOR 180 UNITS REQUESTED UNDER ITEM 1 LOT II, WHILE HAZELTINE BID $18,944 PER UNIT ON THAT LOT. EMERSON BID THE SAME AMOUNT, $18,425 PER UNIT, FOR EACH OF THE QUANTITIES LISTED UNDER ITEM 10. ON SUCH QUANTITIES HAZELTINE BID AS FOLLOWS:

TABLE

MIN-MAX

181-201 $18,624 $ ----------

202-222 17,950 $ ----------

223-243 17,378 $ ----------

244-264 16,832 $ ----------

265-285 16,418 $ ----------

IN A LETTER REPLYING TO A REQUEST FOR CLARIFICATION OF ITS QUOTED REDUCTION FOR WAIVER OF CERTAIN TESTS, HAZELTINE UNDERTOOK ALSO TO EXPLAIN THAT ITS PRICES STATED OPPOSITE THE SEVERAL QUANTITY BRACKETS UNDER ITEM 10 WERE INTENDED, IN ACCORDANCE WITH ITS UNDERSTANDING OF THE INVITATION, TO APPLY TO THE ENTIRE QUANTITY AWARDED RATHER THAN ONLY TO THE QUANTITY IN EACH BRACKET. IF THE BID WERE SO INTERPRETED, HAZELTINE'S BID IS LOW ON ANY QUANTITY IN EXCESS OF 201 UNITS. EMERSON'S BID IS LOW ON THE 180 UNITS LISTED UNDER ITEM 1.

BY LETTER DATED JULY 21, 1965, FROM THE BUREAU OF SUPPLIES AND ACCOUNTS WE WERE INFORMED THAT SUBSEQUENT TO BID OPENING THE BUREAU OF NAVAL WEAPONS HAD OBTAINED AUTHORITY FROM THE CHIEF OF NAVAL OPERATIONS FOR THE PROCUREMENT OF 235 UNITS. UNDER SUCH CIRCUMSTANCES WE WOULD HAVE BEEN REQUIRED TO CONSTRUE THE PROVISIONS OF THE INVITATION FOR THE PURPOSE OF DETERMINING WHETHER THE BIDS SHOULD BE EVALUATED ON THE BASIS OF THE PRICES FOR 180 OR ON THE BASIS OF THE PRICES FOR 235 UNITS. HOWEVER, BY LETTER DATED AUGUST 23, 1965, THE OFFICER IN CHARGE OF THE NAVY PURCHASING OFFICE HAS INFORMED US AS FOLLOWS:

"AS A RESULT OF CONCERN EXPRESSED BY THE ASSISTANT SECRETARY OF THE NAVY (I AND L) REGARDING THE PROCUREMENT OF AN/APR-19 RADAR SETS UNDER IFB600- 1169-64, THE BUREAU OF NAVAL WEAPONS HAS BROUGHT TO MY ATTENTION THAT THE NAVY'S CURRENT REQUIREMENT FOR THIS RADAR EQUIPMENT IS 180 UNITS AS SET FORTH IN THE ABOVE MENTIONED INVITATION FOR BIDS.

"THE QUESTION OF ADDITIONAL REQUIREMENTS OVER AND ABOVE 180 UNITS IS TO BE THE SUBJECT OF A JOINT AIR FORCE/NAVY REQUIREMENTS EVALUATION STUDY. IT IS ANTICIPATED THAT THIS STUDY WILL COVER SUCH MATTERS AS INTRODUCING THIS EQUIPMENT INTO ADDITIONAL AIRCRAFT AND PROVIDING FOR ITS USE BY THE AIR FORCE AS WELL AS THE NAVY. ANY SUBSTANTIALLY INCREASED REQUIREMENTS RESULTING FROM THIS STUDY WILL BE HANDLED AS A NEW PROCUREMENT.

"AS YOU KNOW, THE NAVY RECEIVED SIX ACCEPTABLE TECHNICAL PROPOSALS ON THE 1ST STEP OF THE PRESENT INVITATION AND, IF AN AWARD IS MADE ON THIS INVITATION, DELIVERIES OF UNITS ACCEPTABLE FOR SERVICE USE WILL LEAD TO THE DEVELOPMENT OF FIRM SPECIFICATIONS WHICH IN TURN SHOULD ENCOURAGE EVEN WIDER COMPETITION.

"IN CLOSING, I SHOULD LIKE TO POINT OUT THAT AN AWARD UNDER THE PRESENT INVITATION WILL BE CONSISTENT WITH THE EXPRESSED WISHES OF BOTH PROTESTANTS. FURTHERMORE, THE ASSISTANT SECRETARY OF THE NAVY HAS INFORMED ME THAT AN AWARD ON THE BASIS OF 180 UNITS WILL BE IN THE BEST INTEREST OF THE NAVY.'

IN THE CIRCUMSTANCES, THE BID EVALUATION QUESTION REFERRED TO HAS BECOME MOOT, SINCE THE BIDS MAY NOW BE EVALUATED ONLY ON THE BASIS OF 180 UNITS. UNDER SUCH EVALUATION EMERSON ELECTRIC COMPANY IS THE LOW BIDDER AND THE BASIS OF YOUR PROTEST HAS BEEN ELIMINATED.