B-157828, DEC. 16, 1965

B-157828: Dec 16, 1965

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 8. THE FIRST STEP OF THIS PROCUREMENT WAS ISSUED ON MAY 24. SEVEN PROPOSALS WERE RECEIVED. NAVAL AMMUNITION DEPOT EARLE FOUND THAT THREE PROPOSALS INCLUDING YOURS WERE ACCEPTABLE FOR THE SOLICITATION OF PRICES FOR THE FOUR PROTOTYPES. IN ADDITION IT WAS REQUESTED THAT PRODUCTION PRICING BE SOLICITED IN LOTS OF 50 AND 100 UNITS TOGETHER WITH SPARE PARTS RECOMMENDATIONS AND COSTS FOR 12 AND 24 MONTHS. WE ARE ADVISED THAT THE PRODUCTION PRICES AND THE PRICES FOR THE SPARE PARTS WERE REQUESTED FOR THE PURPOSE OF DETERMINING WHICH SYSTEM WOULD BE THE OPTIMUM SYSTEM FROM THE SOURCES SELECTED. THE INSTANT INVITATION WAS ISSUED TO THE THREE FIRMS INCLUDING YOURS WHICH SUBMITTED ACCEPTABLE PROPOSALS UNDER STEP ONE.

B-157828, DEC. 16, 1965

TO ARKWIN INDUSTRIES, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 8, 1965, PROTESTING THE PROPOSED CANCELLATION OF INVITATION FOR BIDS NO. DSA-4 66-963, ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER, DEFENSE SUPPLY AGENCY, RICHMOND, VIRGINIA.

ON APRIL 29, 1965, THE UNITED STATES NAVAL AMMUNITION DEPOT EARLE, COLTS NECK, NEW JERSEY, REQUESTED THE PROCUREMENT BY TWO-STEP FORMAL ADVERTISEMENT OF FOUR PROTOTYPES OF MINE AND TORPEDO HANDLING SYSTEMS CAPABLE OF TRANSPORTING A VARIETY OF WEAPONS INTO THE BOMB BAYS OF DIFFERENT NAVAL AIRCRAFT.

THE FIRST STEP OF THIS PROCUREMENT WAS ISSUED ON MAY 24, 1965, AND SEVEN PROPOSALS WERE RECEIVED. NAVAL AMMUNITION DEPOT EARLE FOUND THAT THREE PROPOSALS INCLUDING YOURS WERE ACCEPTABLE FOR THE SOLICITATION OF PRICES FOR THE FOUR PROTOTYPES. IN ADDITION IT WAS REQUESTED THAT PRODUCTION PRICING BE SOLICITED IN LOTS OF 50 AND 100 UNITS TOGETHER WITH SPARE PARTS RECOMMENDATIONS AND COSTS FOR 12 AND 24 MONTHS. WE ARE ADVISED THAT THE PRODUCTION PRICES AND THE PRICES FOR THE SPARE PARTS WERE REQUESTED FOR THE PURPOSE OF DETERMINING WHICH SYSTEM WOULD BE THE OPTIMUM SYSTEM FROM THE SOURCES SELECTED.

ON AUGUST 27, 1965, THE INSTANT INVITATION WAS ISSUED TO THE THREE FIRMS INCLUDING YOURS WHICH SUBMITTED ACCEPTABLE PROPOSALS UNDER STEP ONE. PAGE 3 OF THE INVITATION SOLICITED PRICES ON THE FOUR PROTOTYPE UNITS. THIS PAGE ALSO PROCEDED AS FOLLOWS:

" THE FOLLOWING INFORMATION IS REQUIRED AND WILL BE CONSIDERED IN THE EVALUATION OF THIS INVITATION.

CHART

"PRODUCTION PRICING

"EST QTY PRICE

50 EACH $

OR (

100 EACH $

"SPARE PARTS RECOMMENDATIONS SHOULD BE INCLUDED WITH THIS INVITATION AND SHOULD BE GIVEN FOR A 12 MONTH AND 24 MONTH PERIOD.

"EST. COST 12 MONTHS $ (

"EST. COST 24 MONTHS $ "

BIDS WERE OPENED ON SEPTEMBER 17, 1965. THE FOLLOWING PRICES WERE QUOTED FOR THE VARIOUS REQUIREMENTS OF THE INVITATION WHICH WOULD BE USED IN THE EVALUATION OF BIDS.

CHART BIDDER PROTOTYPE (TOTAL PRICE) PRODUCTION PRICING

50 EACH 100 EACH ARKWIN $35,760.00 $2,000.00 $1,800.00

PER UNIT PER UNIT SPACE CORPORATION $38,279.20 $1,488.26 $1,139.60

PER UNIT PER UNIT AIR LOGISTICS CORPORATION $39,808.00 $89,070.00 $156,400

(TOTAL PRICE) (TOTAL PRICE)

YOUR TOTAL PRICE FOR PROTOTYPE PLUS PRODUCTION UNITS IS $135,760 FOR 50 UNITS AND $215,760 FOR 100 UNITS. SPACE CORPORATION'S BID EVALUATED ON THIS BASIS IS $112,692.20 FOR 50 UNITS AND $152,239.20 FOR 100 UNITS. THE BID OF AIR LOGISTICS CORPORATION SO EVALUATED IS $128,878 FOR 50 UNITS AND $196,208 FOR 100 UNITS.

YOU INSERTED SEVERAL QUALIFICATIONS ON PAGE 3 OF YOUR BID. WITH RESPECT TO THE PRODUCTION PRICING YOU INSERTED: "ESTIMATED, NOT PART OF PRICE PROPOSAL.' IN CONNECTION WITH THE SPARE PARTS RECOMMENDATION YOU INSERTED: "NOT INCLUDED IN PRICE PROPOSAL.'

ON SEPTEMBER 29, 1965, YOU WERE INFORMALLY ADVISED BY DSA THAT THE INSTANT INVITATION MIGHT BE CANCELLED. ON OCTOBER 8, 1965, YOU PROTESTED ANY PROPOSED CANCELLATION OF THE INSTANT INVITATION TO OUR OFFICE. YOU CONTEND THAT AN AWARD SHOULD BE MADE TO YOU FOR THE FOUR PROTOTYPE UNITS. YOU ADVISE THAT YOU INSERTED THE QUALIFICATIONS, INDICATED ABOVE, ON PAGE THREE OF YOUR BID BECAUSE YOU ASSUMED THE PRODUCTION PRICING REQUIREMENT IN THE INVITATION WAS FOR BUDGET PLANNING.

THE FIRST QUESTION IS WHETHER AN AWARD COULD PROPERLY BE MADE TO YOU ON THE BASIS OF THE BID SUBMITTED BY YOU. THE PUBLIC ADVERTISING STATUTES REQUIRE THAT AWARD BE MADE TO THE LOWEST RESPONSIVE BIDDER. ALSO, THE RULES OF COMPETITIVE ADVERTISED BIDDING REQUIRE THAT BIDS BE EVALUATED ON A COMMON BASIS WHICH IS PRESCRIBED IN THE INVITATION. 40 COMP. GEN. 160, 161. OTHERWISE, BIDDERS COULD NOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW, SINCE THEY WOULD NOT KNOW IN ADVANCE THE BASIS ON WHICH THEIR BIDS WOULD BE EVALUATED. 36 COMP. GEN. 380, 385. ACCORDINGLY, WE HAVE HELD THAT THE INVITATION ITSELF MUST BE CONSIDERED AS CONTROLLING THE BASIS UPON WHICH BIDS WILL BE EVALUATED, NOTWITHSTANDING THAT SOME BIDDERS MAY HAVE HAD REASON TO BELIEVE THAT BIDS WOULD BE EVALUATED IN A MANNER CONTRARY TO THE ONE STATED IN THE INVITATION. B-150529, FEBRUARY 25, 1963, AND 38 COMP. GEN. 550.

IN THE INSTANT CASE THE INVITATION CLEARLY STATED ON PAGE 3 THAT PRODUCTION PRICING WOULD BE CONSIDERED IN THE EVALUATION OF BIDS. EVALUATE YOUR BID ON THE BASIS OF YOUR PRICES FOR THE PROTOTYPE UNITS ONLY, WOULD BE CONTRARY TO THE BASIS FOR EVALUATION SPECIFIED ON PAGE 3 OF THE INVITATION. FOR THE REASONS STATED IN THE PRECEDING PARAGRAPH WE FIND THAT BIDS MUST BE EVALUATED ON THE BASIS OF THE PRICE FOR THE PROTOTYPE UNITS AND PRICES FOR THE PRODUCTION UNITS AS SPECIFIED ON PAGE 3 OF THE INVITATION. CONSEQUENTLY, YOUR BID AS QUALIFIED BY YOUR INSERTIONS ON PAGE 3 CANNOT BE EVALUATED. IN THESE CIRCUMSTANCES THERE IS NO BASIS FOR AN AWARD TO YOU UNDER THE INSTANT INVITATION. MOREOVER, EVEN IF YOUR BID COULD BE EVALUATED ON THE BASIS OF YOUR PRICE FOR THE PROTOTYPE UNITS AND YOUR PRICES FOR PRODUCTION UNITS, YOUR BID WOULD NOT BE LOW.

THE INVITATION FOR THE INSTANT PROCUREMENT DID NOT PROVIDE THAT THE GOVERNMENT HAD AN OPTION TO PURCHASE PRODUCTION UNITS. CONSEQUENTLY, THERE WOULD BE NO CONTRACTUAL OBLIGATION TO FURNISH PRODUCTION UNITS TO THE GOVERNMENT. THE INVITATION REQUIRED PRODUCTION PRICING FOR EVALUATION PURPOSES. IN THESE CIRCUMSTANCES A BIDDER COULD INSERT AN UNREALISTICALLY LOW PRICE FOR THE PRODUCTION UNITS FOR EVALUATION PURPOSES AND NOT BE CONTRACTUALLY BOUND TO FURNISH THE ITEM IF HE WERE AWARDED A CONTRACT. THE BASIS FOR EVALUATION SPECIFIED IN THE INVITATION WOULD THEREFORE PERMIT AN AWARD TO A BIDDER WHO WAS NOT IN FACT THE LOW BIDDER. IN THESE CIRCUMSTANCES WE FIND THAT THE BASIS FOR EVALUATION SPECIFIED IN THE INSTANT INVITATION IS MATERIALLY DEFECTIVE AND THIS INVITATION MUST THEREFORE BE CANCELLED. SEE 42 COMP. GEN. 257.