B-157650, DEC. 14, 1965

B-157650, DEC. 14, 1965

TO HERCULES POWDER COMPANY, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 10, 1965, PROTESTING AGAINST AWARD OF A CONTRACT TO ALLIED CHEMICAL CORPORATION BY THE MIDDLETOWN AIR MATERIEL AREA FOR ITEMS 1.2 AND 4.3 UNDER INVITATION FOR BIDS NO. 36-600-65-928.

THE INVITATION CALLED FOR BIDS FURNISHING VARIOUS ESTIMATED QUANTITIES OF NITRIC ACID PROPELLANT TO BE DELIVERED TO SEVERAL GOVERNMENT INSTALLATIONS "F.O.B. CARRIER'S EQUIPMENT AT THE PLANT OR PLANTS AT WHICH SUCH SUPPLIES ARE TO BE FINALLY INSPECTED AND ACCEPTED ...' THE INVITATION ALSO PROVIDED THAT IN DETERMINING THE LOWEST BID THE ESTIMATED TRANSPORTATION COST FROM THE PLANT OR PLANTS SPECIFIED BY THE BIDDER WOULD BE ADDED TO THE UNIT BID PRICE FOR EACH ITEM.

IN DESIGNATING THE F.O.B. POINTS YOUR BID LISTED BESSEMER, ALABAMA, HERCULES, CALIFORNIA, AND PARLIN, NEW JERSEY. HOWEVER, THE WORDS "PARLIN, NEW JERSEY" WERE PRECEEDED BY AN ASTERISK, WHICH WAS EXPLAINED IN A MARGINAL NOTE AS MEANING "APPLIES TO ITEMS 1.2, 1.5, 4.3 AND 4.6.' EVALUATING YOUR BID, THE CONTRACTING OFFICER CONSTRUED THIS NOTE TO MEAN THAT THE DESIGNATED ITEMS WOULD BE SHIPPED ONLY FROM PARLIN, NEW JERSEY. HE THEREFORE APPLIED THE FREIGHT RATES FROM THAT POINT TO THE DESTINATIONS IN ESTIMATING THE TRANSPORTATION COST FOR THOSE ITEMS. AS EVALUATED, YOUR BID COMPARES WITH ALLIED CHEMICAL'S BID ON THE TWO ITEMS INVOLVED AS FOLLOWS:

CHART

ITEM 1.2 HERCULES BID PRICE ?0715

TRANSPORTATION COST

FROM PARLIN, N.J. .0353

TOTAL UNIT COST ?1068 ALLIED CHEMICAL BID PRICE

?0655

TRANSPORTATION COST

FROM BUFFALO, N.Y. .0353

TOTAL UNIT COST ?1008

ITEM 4.3 HERCULES BID PRICE ?0765

TRANSPORTATION COST

FROM PARLIN, N.J. .0340

TOTAL UNIT COST ?1105 ALLIED CHEMICAL BID PRICE

?0700

TRANSPORTATION COST

FROM BUFFALO, N.Y. .0377

TOTAL UNIT COST ?1077

ON THE BASIS OF THE ABOVE EVALUATION AND COMPARISON, ALLIED RECEIVED THE AWARD FOR ITEMS 1.2 AND 4.3 ON AUGUST 27, 1965.

IT IS YOUR CONTENTION THAT THE INTERPRETATION OF THE CONTRACTING OFFICER ON THE F.O.B. POINT OF THE DESIGNATED ITEMS IS BOTH CONTRARY TO YOUR INTENDED MEANING AND UNREASONABLE. YOU STATE THAT YOUR INTENT "WAS TO SHOW THAT PARLIN WOULD BE ONE OF THE F.O.B. POINTS FOR THOSE FOUR ITEMS BUT NOT FOR ANY OTHER ITEMS.' YOUR EXPLANATION OF WHY YOU CONSIDER THE CONTRACTING OFFICER'S INTERPRETATION UNREASONABLE IS STATED THUSLY:

"HOWEVER, THE CONTRACTING OFFICER READ THE NOTE SO AS TO IMPOSE A LIMITATION UPON BESSEMER AND HERCULES, EVEN THOUGH THE LISTING OF THOSE POINTS WAS NOT QUALIFIED IN ANY WAY. TO THE WORDS ,APPLIES TO ITEMS 1.2, 1.5, 4.3 AND 4.6" HE ADDED THE WORDS "AND BESSEMER, ALABAMA AND HERCULES, CALIFORNIA ARE NOT SHIPPING POINTS FOR THESE ITEMS.' HE CHANGED THE CHARACTER OF THE LIMITATION APPLYING TO PARLIN BY READING IN LANGUAGE APPLICABLE TO BESSEMER AND HERCULES THAT WAS NOT THERE. NO REASONABLE MAN WHO INTENDED ITEMS 1.2, 1.5, 4.5 AND 4.6 NOT TO APPLY TO BESSEMER AND HERCULES WOULD HAVE DONE IT IN THAT WAY. THE INSTRUCTION WAS TO DESIGNATE THE CITY AND STATE OF THE F.O.B. POINT--- AN AFFIRMATIVE DIRECTION. DID IT BY AFFIRMATIVELY DESIGNATING BESSEMER AND HERCULES AS TO ALL ITEMS AND PARLIN AS TO FOUR ITEMS. YET THE CONTRACTING OFFICER HAS CHOSEN TO IGNORE THE AFFIRMATIVE DIRECTION AND READ INTO THE WORDS A NEGATIVE IMPLICATION OF DESIGNATING THE CITY AND STATE WHICH IS NOT THE CITY AND STATE OF THE F.O.B. POINT.'

IF YOUR BID HAD BEEN INTERPRETED AS YOU CONTEND IT SHOULD HAVE BEEN, YOU WOULD HAVE BEEN THE LOW BIDDER ON BOTH ITEMS AND ENTITLED TO AWARD.

WHILE WE HAVE NO REASON TO DOUBT THAT YOU INTENDED YOUR BID TO INDICATE THAT ONLY THOSE ITEMS DESIGNATED WOULD BE SHIPPED FROM PARLIN, NEW JERSEY, WE CANNOT AGREE THAT THIS IS THE ONLY REASONABLE, OR NECESSARILY THE MOST REASONABLE, INTERPRETATION OF WHAT IS EXPRESSED BY YOUR BID. INDICATING THE THREE CITIES AS THE POINTS FROM WHICH THE ITEMS WOULD BE SHIPPED, IT COULD REASONABLY BE INFERRED THAT SUCH F.O.B. POINTS APPLIED TO ALL ITEMS, UNLESS OTHERWISE INDICATED. HOWEVER, SINCE YOU PLACED FOUR ITEMS IN A SEPARATE CATEGORY AND RELATED THEM SPECIFICALLY TO PARLIN, NEW JERSEY, ONLY, IT IS OUR OPINION IT COULD REASONABLY BY INFERRED THAT THESE ITEMS WERE TO BE SHIPPED ONLY FROM THAT POINT.

IN VIEW THEREOF THE LANGUAGE EMPLOYED IN YOUR BID MUST BE REGARDED AS HAVING RENDERED THE BID AT LEAST SUSCEPTIBLE OF TWO INTERPRETATIONS, AND THEREFORE AMBIGUOUS. WITH RESPECT TO AN AMBIGUOUS BID, OUR POSITION IS, AS STATED IN OUR DECISION OF JANUARY 3, 1961, 40 COMP. GEN. 393, AS FOLLOWS:

"... IN THE CASE OF COMPETITIVE BIDDING ON GOVERNMENT CONTRACTS ... A BIDDER MIGHT BE ABLE TO DETERMINE HIS OWN COMPETITIVE STANDING AFTER THE BIDS ARE EXPOSED BY CLARIFICATION OF HIS BID. IT HAS CONSISTENTLY BEEN STATED BY THIS OFFICE THAT IT IS IMPROPER TO ALLOW A PARTICULAR BIDDER TO CHANGE HIS BID AFTER THE PUBLIC OPENING TO THE PREJUDICE OF OTHER BIDDERS. WE HAVE GENERALLY TAKEN THE POSITION THAT AN AMBIGUOUS BID MAY NOT BE EXPLAINED AFTER OPENING SINCE THE BIDDER WOULD,IN EFFECT, HAVE AN ELECTION AS TO WHETHER OR NOT HE WISHED TO HAVE HIS BID CONSIDERED.

IN CIRCUMSTANCES WHERE EACH OF TWO POSSIBLE MEANINGS CAN BE REACHED FROM THE TERMS OF A BID, THE BIDDER SHOULD NOT BE ALLOWED TO EXPLAIN HIS MEANING WHEN HE IS IN A POSITION THEREBY TO PREJUDICE OTHER BIDDERS OR TO AFFECT THE RESPONSIVENESS OF HIS BID. SUCH ACTION WOULD SERVE TO UNDERMINE THE INTEGRITY OF THE BIDDING SYSTEM AND CAUSE OVERALL HARM TO THE SYSTEM OF COMPETITIVE BIDDING DESPITE THE IMMEDIATE ADVANTAGE GAINED BY A LOWER PRICE IN THE PARTICULAR PROCUREMENT.'

ACCORDINGLY, WE FIND NO LEGAL BASIS TO QUESTION THE ADMINISTRATIVE INTERPRETATION PLACED UPON YOUR BID, AND YOUR PROTEST IS THEREFORE DENIED.