B-157006, JUN. 29, 1965

B-157006, JUN. 29, 1965

TO AMERICAN PURE MILK COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 11, 1965, PROTESTING AGAINST THE AWARDING OF SEPARATE VETERANS ADMINISTRATION CONTRACTS, NOS. V5093P-871 (DIETETIC SERVICE) TO THE BORDEN COMPANY AND V5093P-872 (CANTEEN SERVICE) TO YOUR FIRM, PURSUANT TO IFB NO. 66-8 FOR FURNISHING MILK AND OTHER DAIRY ITEMS TO THE VA HOSPITAL AT KERRYVILLE, TEXAS, DURING THE PERIOD JULY 1, 1965, THROUGH JUNE 30, 1966.

FROM A TOTAL OF EIGHT FIRMS SOLICITED THE FOLLOWING TWO BIDS, NEITHER OF WHICH WAS QUALIFIED BY AN "ALL OR NONE" LIMITATION, WERE RECEIVED:

CHART

DIETETIC GROUP PRICE OF D AND C

(LESS ITEM 4) CANTEEN GROUP GROUPS COMBINED BORDEN$22,532.23

$1,127.20 $23,659.43 AMERICAN22,538.72 1,081.50 23,620.22

INASMUCH AS THE COMBINED AMOUNT OF YOUR BIDS ON THE DIETETIC AND CANTEEN GROUPS IS LOW, YOU ASK THAT WE REVIEW THE SEPARATE AWARDS WHICH YOU APPARENTLY BELIEVE WERE MADE ARBITRARILY AND CONTRARY TO THE FOLLOWING PROVISIONS OF PARAGRAPH 4.11 OF VA DEPARTMENT OF MEDICINE AND SURGERY MANUAL, M-1, PART IV:

"4.11 PROCUREMENT OF ITEMS ON SUPPLY CONTRACT

"A. THE CHIEF, SUPPLY DIVISION, IS AUTHORIZED TO INCLUDE A CLAUSE IN LOCAL VENDORS' CONTRACTS PROVIDING FOR PURCHASES BY THE VCS.

"B. EACH CANTEEN OFFICER WILL FURNISH THE CHIEF, SUPPLY DIVISION, TIMELY ESTIMATES OF HIS REQUIREMENTS FOR ITEMS BEING CONTRACTED FOR SO THAT HE MAY INCLUDE SUCH ITEMS IN HIS CONTRACT AND INSERT THE NECESSARY CLAUSE TO PERMIT THE VCS TO PLACE PURCHASE ORDERS AGAINST THEM TO THE EXTENT OF THE CANTEEN'S ESTIMATED REQUIREMENTS.

"C. PURCHASE ORDERS PLACED BY A CANTEEN OFFICER AGAINST CONTRACTS MADE BY THE CHIEF, SUPPLY DIVISION, WILL SPECIFY THAT INVOICES FOR PAYMENT WILL BE SUBMITTED SEPARATELY BY THE CONTRACTOR DIRECT TO THE VCS FIELD OFFICE. AVOID CONFUSION, THE PURCHASE ORDER WILL ALSO INDICATE THAT DELIVERIES ARE TO BE MADE TO THE CANTEEN RECEIVING ROOM.'

WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT THE ABOVE PROVISIONS, WHICH APPEAR TO BE PERMISSIVE IN NATURE, REQUIRE THE AWARDING OF A CONTRACT FOR BOTH THE CANTEEN'S AND THE HOSPITAL'S REQUIREMENTS, WHEN INCLUDED IN THE SAME IFB, TO A SINGLE BIDDER.

THE INVITATION SETS FORTH ON PAGES 3 AND 4 THE HOSPITAL'S NEEDS FOR DIETETIC SERVICE, LISTING EIGHT ITEMS, WITH PROVISION FOR THE STATING OF SEPARATE AGGREGATE TOTALS FOR STATED ALTERNATE COMBINATIONS OF ALL EXCEPT ITEM 4 OR ALL EXCEPT ITEMS 5 AND 6. FOLLOWING THIS LISTING THE INVITATION STATES:

"IT IS CONTEMPLATED THAT ITEMS 1 THROUGH 8 (EXCLUDING EITHER ITEM 4 OR ITEMS 5 AND 6) WILL BE AWARDED IN THE AGGREGATE BUT THE RIGHT IS RESERVED TO CANCEL ANY ITEM OR ITEMS AFTER THE BIDS ARE OPENED, BEFORE MAKING AWARD.'

THE CANTEEN SERVICE REQUIREMENTS ARE LISTED IN 7 ITEMS ON PAGES 5 AND 6 AND PROVISION IS ALSO MADE THERE FOR SHOWING THE AGGREGATE TOTAL BID ON SUCH ITEMS, FOLLOWED BY THE STATEMENT:

"AGGREGATE AWARD: IT IS CONTEMPLATED THAT ITEMS 1 THROUGH 7 WILL BE AWARDED IN THE AGGREGATE BUT THE RIGHT IS RESERVED TO CANCEL ANY ITEM OR ITEMS AFTER THE BIDS ARE OPENED, BEFORE MAKING AWARD.'

THE INVITATION DOES NOT PROVIDE FOR SHOWING A TOTAL FIGURE COMPRISED OF BOTH THE DIETETIC AND CANTEEN AGGREGATE BIDS, NOR DO WE FIND ANYTHING THEREIN WHICH MAY REASONABLY BE CONSTRUED AS PROMISING THAT ONE AWARD WOULD BE MADE FOR THE TWO GROUPS OF ITEMS. ON THE CONTRARY, IN ADDITION TO THE SPECIFIC STATEMENTS QUOTED ABOVE, THE INVITATION CONTAINS, ON THE REVERSE OF THE FIRST PAGE, THE STANDARD "TERMS AND CONDITIONS OF THE INVITATION FOR BIDS" PRESCRIBED BY GENERAL SERVICES ADMINISTRATION FOR USE BY ALL AGENCIES OF THE GOVERNMENT, ARTICLE 8 (C) OF WHICH PROVIDES "THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATIONS.'

IN RECOMMENDING ACCEPTANCE OF BORDEN'S LOW BID FOR FURNISHING DIETETIC ITEMS 1 THROUGH 8 (EXCLUDING ITEM 4), AND OF YOUR LOW BID FOR FURNISHING CANTEEN ITEMS 1 THROUGH 7, THE HOSPITAL REPORTED ITS PURPOSE FOR THE SEPARATE GROUPING OF THE ITEMS IN THE INVITATION AS FOLLOWS:

"2. OUR INVITATION, 66-8, WAS PREPARED SOLICITING BIDS ON ONE GROUP OF ITEMS CONSISTING OF REQUIREMENTS FOR THE HOSPITAL AND ANOTHER GROUP OF ITEMS CONSISTING OF REQUIREMENTS FOR THE CANTEEN. THE PURPOSE IN THIS SEGREGATION WAS TO ISOLATE THE REQUIREMENTS FOR EACH. UNDER THE TERMS OF THE INVITATION EACH MUST COMPLY WITH ITS OBLIGATION TO PROCURE 75 PERCENT OF THE ORIGINAL ESTIMATED REQUIREMENTS AND THE CONTRACTOR HAS AN OBLIGATION TO SUPPLY UP TO 125 PERCENT OF THE ORIGINAL ESTIMATES. ISOLATING THE REQUIREMENTS OF THE HOSPITAL AS DISTINGUISHED FROM THOSE OF THE CANTEEN PROVIDES EASIER CONTROL FOR CONTRACT COMPLIANCE IN THIS RESPECT SINCE THE CANTEEN PLACES THEIR OWN ORDERS WITHOUT OUR KNOWLEDGE OF THE AMOUNTS.'

PARAGRAPH 1-2.407-5 OF THE FEDERAL PROCUREMENT REGULATIONS MENTIONS SEVERAL FACTORS IN ADDITION TO PRICE WHICH MAY BE CONSIDERED IN EVALUATING BIDS. ONE OF THESE FACTORS IS "ADVANTAGES OR DISADVANTAGES TO THE GOVERNMENT THAT MIGHT RESULT FROM MAKING MORE THAN ONE AWARD.' UNDER THIS AUTHORIZATION IT IS SOMETIMES PROVIDED IN INVITATIONS FOR BIDS THAT THE ADDED COST OF ADMINISTRATION OF ADDITIONAL CONTRACTS, IN A STATED DOLLAR AMOUNT, WILL BE CONSIDERED IN DETERMINING WHETHER TO MAKE SEPARATE CONTRACTS FOR DIFFERENT ITEMS, BUT NO SUCH PROVISION WAS MADE IN THIS INVITATION, AND THE ABOVE STATEMENT APPEARS TO SHOW THAT IN THIS INSTANCE NO ADDITIONAL ADMINISTRATIVE COST WILL BE ENTITLED BY SEPARATE AWARDS, SINCE ADMINISTRATION OF THE TWO CLASSES OF PURCHASES WOULD BE SEPARATELY HANDLED EVEN UNDER A SINGLE CONTRACT.

FOR THE FOREGOING REASONS, WE FIND NO LEGAL BASIS FOR OBJECTION TO THE CONTRACTING OFFICER'S ACTION UNDER THE SUBJECT INVITATION, AND YOUR PROTEST IS THEREFORE DENIED.