B-158382, MAR. 11, 1966

B-158382: Mar 11, 1966

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INC.: REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 19. OF THE INVITATION IT WAS STATED: "METHOD OF AWARD: AWARD WILL BE MADE IN THE AGGREGATE FOR ITEMS 1 AND 2 SHOWN BELOW. THE LOW AGGREGATE BIDDER WILL BE DETERMINED BY MULTIPLYING THE UNIT PRICES BY THE ESTIMATED QUANTITIES SHOWN FOR EACH ITEM AND ADDING THE RESULTING EXTENSIONS. YOUR BID WAS THEREFORE REJECTED AS NONRESPONSIVE BY THE CONTRACTING AGENCY. THE LOW AGGREGATE BID ON BOTH ITEMS WAS SUBMITTED BY ALCOA. THIS BID WAS ALSO REJECTED AS NONRESPONSIVE SINCE ITS PROPOSED DELIVERY SCHEDULE FAILED TO CONFORM TO THE IFB. AWARD WAS THEREFORE MADE TO REYNOLDS. GSA SPECIFICALLY INDICATED ON THE FIRST PAGE THAT THE PROCUREMENT WAS BEING ENTERED INTO PURSUANT TO SECTION 302/C) (2) OF PUBLIC LAW 152.

B-158382, MAR. 11, 1966

TO PHIFER WIRE PRODUCTS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 19, 1966, WHICH PROTESTED AGAINST THE AWARD OF A NEGOTIATED CONTRACT BASED ON INVITATION FOR BIDS (IFB) NSFV-AID-E05863-A-66 TO REYNOLDS METALS COMPANY (REYNOLDS), RICHMOND, VIRGINIA.

THE IFB REQUESTED BIDS ON 365,000 SHEETS OF ALUMINUM ROOFING UNDER ITEM 1, AND ON 65,200 POUNDS OF ALUMINUM ALLOY ROOFING NAILS UNDER ITEM 2.

IN NUMBERED PARAGRAPH 15, PAGE 5, OF THE INVITATION IT WAS STATED:

"METHOD OF AWARD:

AWARD WILL BE MADE IN THE AGGREGATE FOR ITEMS 1 AND 2 SHOWN BELOW. THE LOW AGGREGATE BIDDER WILL BE DETERMINED BY MULTIPLYING THE UNIT PRICES BY THE ESTIMATED QUANTITIES SHOWN FOR EACH ITEM AND ADDING THE RESULTING EXTENSIONS. UNIT PRICES MUST BE QUOTED ON EACH ITEM TO BE CONSIDERED FOR AN AGGREGATE AWARD.'

THE BID SUBMITTED BY YOUR COMPANY ON DECEMBER 29, 1965, THE BID OPENING DATE, QUOTED A UNIT PRICE OF $0.922 (TOTAL $60,114.40) ON ITEM 2 ONLY. YOUR BID WAS THEREFORE REJECTED AS NONRESPONSIVE BY THE CONTRACTING AGENCY, GENERAL SERVICES ADMINISTRATION (GSA), ON THE GROUND THAT IT DID NOT BID ON BOTH ITEM NO. 1 AND ITEM NO. 2.

THE LOW AGGREGATE BID ON BOTH ITEMS WAS SUBMITTED BY ALCOA, BUT THIS BID WAS ALSO REJECTED AS NONRESPONSIVE SINCE ITS PROPOSED DELIVERY SCHEDULE FAILED TO CONFORM TO THE IFB.

AWARD WAS THEREFORE MADE TO REYNOLDS, THE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, AT A TOTAL PRICE OF $1,391,776. THIS INCLUDED $1,327,870 FOR ITEM NO. 1, ALUMINUM ROOFING, AND $63,896 FOR ITEM NO. 2, ALUMINUM ROOFING NAILS.

ALTHOUGH THE INVITATION FORM EMPLOYED IN THIS CASE WOULD NORMALLY BE USED WITH A FORMAL ADVERTISED CONTRACT, GSA SPECIFICALLY INDICATED ON THE FIRST PAGE THAT THE PROCUREMENT WAS BEING ENTERED INTO PURSUANT TO SECTION 302/C) (2) OF PUBLIC LAW 152, 81ST CONGRESS, AS AMENDED (41 U.S.C. 252/C) (2) (, AND THAT "NEGOTIATED BIDS" WERE THEREFORE SOLICITED. THE PROVISIONS OF 41 U.S.C. 252/C) (2) SET FORTH AN EXCEPTION TO THE REQUIREMENTS FOR FORMAL ADVERTISING, AND PROVIDE THAT CONTRACTS MAY BE NEGOTIATED WHEN "THE PUBLIC EXIGENCY WILL NOT ADMIT OF THE DELAY INCIDENT TO ADVERTISING.'

IN YOUR LETTER OF JANUARY 19 TO THIS OFFICE IT IS STATED, IN PART, THAT:

"WE PROTEST THE AWARD OF THIS CONTRACT ALTHOUGH WE UNDERSTAND THAT THE GSA CLAIMS THAT ITEM 1 AND 2 WERE NECESSARILY AWARDED TO THE SAME COMPANY IN VIEW OF THE PROBLEMS CONCERNING SHIPPING TO SOUTH EASTERN ASIA AND THE SCHEDULE OF SUCH ITEMS TO THE PORT OF EMBARKATION. WE SUBMIT THAT ITEM 1 WILL BE MANUFACTURED BY REYNOLDS METALS AT A PLANT LOCATION SOMEWHERE IN THE DOMESTIC U.S. WHEREAS ITEM 2 WILL BE PURCHASED BY REYNOLDS METALS COMPANY FROM THE NICHOLS WIRE AND ALUMINUM O., AND MADE BY NICHOLS IN DAVENPORT, IOWA. WE SUBMIT THAT THIS NEGATES THE GSA ARGUMENT IN FAVOR OF THE AWARD TO REYNOLDS METALS COMPANY ON THE GROUNDS OF COORDINATING THE SHIPMENT TO THE PORT OF EMBARKATION.'

IN THE REPORT SUBMITTED TO OUR OFFICE FROM GSA THE REASON GIVEN FOR REQUIRING AN AGGREGATE AWARD WAS THE ABSOLUTE NECESSITY OF HAVING BOTH ITEMS AVAILABLE FOR SHIPMENT ON THE SAME VESSEL SO AS TO ASSURE THEY WOULD ARRIVE IN VIET NAM ON THE SAME VESSEL. ANY OTHER ALTERNATIVE TO AN AGGREGATE AWARD, SUCH AS REQUESTING BIDS ON THE BASIS OF F.O.B. THE PORT TO BE USED BY THE MANUFACTURER OF THE SHEETING OR F.O.B. THE PLANT OF THE MANUFACTURER OF THE ALUMINUM ROOFING, WAS BELIEVED TO ENTAIL AN ALMOST IMPOSSIBLE EVALUATION TASK. IN ADDITION, GSA STATES THAT ALTHOUGH SIMILAR DELAYS WERE POSSIBLE FROM EITHER AN AGGREGATE-AWARD CONTRACTOR OR FROM CONTRACTORS AWARDED INDIVIDUAL ITEMS, NEVERTHELESS, BY COMPLETE CONTROL OVER BOTH ITEMS, AN AGGREGATE-AWARD CONTRACTOR COULD ALWAYS ARRANGE FOR JOINT INLAND CARRIAGE OF THE ITEMS, AND SIMULTANEOUS ARRIVAL AT THE PORT. THIS CERTAINTY, IT IS SAID, COULD NOT BE ACHIEVED THROUGH ANY OTHER METHOD OF AWARD.

THE BID RECEIVED FROM REYNOLDS SHOWS THAT ITEM NO. 2 IS TO BE PRODUCED BY THE NICHOLS WIRE AND ALUMINUM CO., DAVENPOT, IOWA. FURTHERMORE, IN ACCORDANCE WITH THE ASSERTION MADE IN YOUR LETTER TO GSA DATED JANUARY 14, 1966, THERE APPEARS TO BE ONLY ONE MANUFACTURER OF BOTH ALUMINUM ROOFING AND ALUMINUM NAILS IN THE UNITED STATES WHO COULD HAVE FULFILLED THE AGGREGATE IFB REQUIREMENTS. YOUR PROTEST QUESTIONS THE ADMINISTRATIVE DETERMINATION TO AWARD ON AN AGGREGATE BASIS, IN VIEW OF THE FACT THAT WHOEVER WAS AWARDED THE CONTRACT (WITH ONE EXCEPTION) WOULD HAVE TO SUBCONTRACT THE PRODUCTION OF AT LEAST ONE ITEM. THE SUBCONTRACTING WOULD, YOU CONTEND, RESULT IN AN ADDED MARK-UP OF THE PRICE IN THE FINAL BID SUBMITTED TO THE GOVERNMENT. IT IS THE DIFFERENCE OF THIS MARK-UP OR ADDED PROFIT WHICH YOU CONTEND THE GOVERNMENT CAN AVERT BY AWARDING TWO CONTRACTS. HAD GSA ACCEPTED YOUR BID BY SPLITTING THE AWARD OF THE TWO ITEMS INVOLVED YOU ALLEGE A SAVING IN EXCESS OF $3,700 WOULD HAVE ACCRUED TO THE GOVERNMENT.

WHETHER INDIVIDUAL BUT RELATED ITEMS COMPOSING A TOTAL PROCUREMENT NEED SHOULD BE PROCURED UNDER A SINGLE CONTRACT OR UNDER SEVERAL CONTRACTS IS A MATTER PRIMARILY FOR DETERMINATION BY THE PROCURING AGENCY. IN MAKING SUCH DETERMINATION THE AGENCY IS NOT REQUIRED TO CONSIDER ONLY THE PROCUREMENT METHOD WHICH WILL OBTAIN THE LOWEST PRICES. IT MAY LEGALLY TAKE INTO CONSIDERATION ALL FACTORS DEEMED ESSENTIAL TO THE ACCOMPLISHMENT OF THE PROCUREMENT, AND THIS OFFICE WILL NOT QUESTION SUCH DETERMINATIONS WHERE ANY REASONABLE GROUNDS EXIST TO SUPPORTING THEM.

IT APPEARS FROM THE RECORD THAT THE DECISION TO RESTRICT AWARDS TO AGGREGATE BIDDERS WAS BASED ON PRIOR PROCUREMENT EXPERIENCE AND ON THE PARTICULAR REQUIREMENTS OF THIS PROCUREMENT. THE DECISION TO CONSOLIDATE BOTH ITEMS FOR AWARD TO THE SAME CONTRACTOR WAS INFLUENCED BY DIFFICULTIES, INCLUDING A RESOLICITATION OF QUOTATIONS, WHICH WERE ENCOUNTERED IN THE PREVIOUS PROCUREMENT OF THESE ITEMS UNDER AN RFP WHICH DID NOT REQUEST PROPOSALS ON AN AGGREGATE BASIS. ADDITIONALLY, THIS WAS A PROCUREMENT REQUIRING EXPEDITIOUS ACTION, AND MAXIMUM ASSURANCE THAT BOTH ITEMS WOULD BE AVAILABLE FOR SHIPMENT ON THE SAME VESSEL. IT WAS THE JUDGMENT OF GSA THAT THIS OBJECTIVE WOULD BEST BE ACCOMPLISHED BY CONSOLIDATING CONTROL AND ADMINISTRATION UNDER A SINGLE AWARD, AND THE FACTS OF THE RECORD DO NOT CONTRADICT THE REASONABLENESS OF THIS DECISION. WHILE IT MAY BE TRUE THAT AWARD ON AN INDIVIDUAL ITEM BASIS WOULD HAVE RESULTED IN LOWER CONTRACT PRICES, THIS ALONE DOES NOT NEGATE THE REASONABLENESS OF GSA'S DECISION. FURTHER, THERE IS NO REQUIREMENT FOR AWARD BASED UPON THE LOWEST BID IN PROCUREMENTS WHICH ARE NEGOTIATED, RATHER THAN FORMALLY ADVERTISED.

IN VIEW OF THE FOREGOING WE ARE UNABLE TO CONCLUDE THAT THE AWARD TO REYNOLDS ON AN AGGREGATE ..END :