B-158689, APR. 28, 1966

B-158689: Apr 28, 1966

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TO THE SECRETARY OF THE NAVY: WE HAVE RECEIVED A LETTER DATED MARCH 11. IN WHICH HE REQUESTS OUR ADVANCE DECISION ON WHETHER A LOW BID BY NORTH AMERICAN AVIATION IS RESPONSIVE TO INVITATION FOR BIDS (IFB) 600-593-66-S. FIVE BIDS WERE OPENED ON FEBRUARY 25. THE TWO LOWEST OF WHICH WERE THOSE RECEIVED FROM NORTH AMERICAN AVIATION AND FROM GENERAL DYNAMICS CORPORATION. IS ENTIRELY RESPONSIVE TO THE MATERIAL PROVISIONS OF THE IFB. AT A BID PRICE THEY WERE TO INSERT IN THE BID FORM. THE SECOND ARTICLE OF THE GENERAL PROVISIONS WAS ENTITLED "ORDER OF PRECEDENCE. THIS PORTION WAS EITHER PARAPHRASED OR MODIFIED BY THE TERMS AND CONDITIONS OF NORTH AMERICAN'S "PROPOSAL.'. THE ATTACHED "PROPOSAL" STATED THAT "THE PRICE CONTAINED HEREIN IS CONTINGENT UPON THE TERMS AND CONDITIONS SET FORTH ON THE SUBSEQUENT PAGES OF THIS PROPOSAL.'.

B-158689, APR. 28, 1966

TO THE SECRETARY OF THE NAVY:

WE HAVE RECEIVED A LETTER DATED MARCH 11, 1966, FROM THE DIRECTOR OF CONTRACTS, BUREAU OF SHIPS, IN WHICH HE REQUESTS OUR ADVANCE DECISION ON WHETHER A LOW BID BY NORTH AMERICAN AVIATION IS RESPONSIVE TO INVITATION FOR BIDS (IFB) 600-593-66-S, FOR THE CONSTRUCTION OF TWO DEEP SUBMERGENCE RESEARCH VEHICLES.

FIVE BIDS WERE OPENED ON FEBRUARY 25, 1966, THE TWO LOWEST OF WHICH WERE THOSE RECEIVED FROM NORTH AMERICAN AVIATION AND FROM GENERAL DYNAMICS CORPORATION, ELECTRIC BOAT DIVISION. THE DIRECTOR'S RELUCTANCE TO ACCEPT NORTH AMERICAN'S LOW OFFER ARISES BECAUSE THAT FIRM SUBMITTED A ,PROPOSAL" WHICH SET FORTH ITS OWN TERMS AND CONDITIONS. NORTH AMERICAN CONTENDS THAT ITS ,PROPOSAL" MERELY PARAPHRASED THE TERMS AND CONDITIONS OF THE BID DOCUMENTS, AND IS ENTIRELY RESPONSIVE TO THE MATERIAL PROVISIONS OF THE IFB. GENERAL DYNAMICS MAINTAINS A CONTRARY POSITION.

THE RECORD SHOWS THAT PROSPECTIVE BIDDERS HAD RECEIVED AN IFB PACKAGE INCLUDING, AMONG OTHER DOCUMENTS, A "BID FORM," WHICH CONTAINED FORMAL STATEMENTS TITLED "CERTIFICATES" AND REPRESENTATIONS," AND SPACES FOR SUPPLYING CERTAIN REQUESTED INFORMATION. IN ADDITION, PARAGRAPH 1 OF THE BID FORM, ENTITLED "OFFER," REQUESTED BIDDERS TO OFFER AND AGREE TO FULLY PERFORM, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF A "PRO FORMA CONTRACT" INCLUDED IN THE IFB PACKAGE, AT A BID PRICE THEY WERE TO INSERT IN THE BID FORM.

THE PRO FORMA CONTRACT CONTAINED THE "SPECIAL PROVISIONS," WHICH IN TURN INCORPORATED A GOVERNMENT FORM ENTITLED,"GENERAL PROVISIONS.' THE SECOND ARTICLE OF THE GENERAL PROVISIONS WAS ENTITLED "ORDER OF PRECEDENCE," AND IT PROVIDED, INTER ALIA, THAT THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE CONTRACT WOULD BE GOVERNED BY THE SPECIAL PROVISIONS, THE GENERAL PROVISIONS, THE SPECIFICATIONS, AND THE APPROVED PLANS, IN THAT ORDER. THE GENERAL PROVISIONS ALSO MADE OTHER BUT LESS IMPORTANT REFERENCES TO THE SPECIAL PROVISIONS.

A PORTION OF THE SPECIAL PROVISIONS DEALT WITH THE DELIVERY SCHEDULE, GOVERNMENT-FURNISHED PROPERTY, THE USE OF FACILITIES UNDER OTHER CONTRACTS, AND A LIMITATION ON THE CONTRACTOR'S LIABILITY FOR CORRECTION OF DEFECTS. THIS PORTION WAS EITHER PARAPHRASED OR MODIFIED BY THE TERMS AND CONDITIONS OF NORTH AMERICAN'S "PROPOSAL.' HOWEVER, THE SPECIAL PROVISIONS ALSO CONTAINED OTHER ARTICLES RESPECTING WEIGHT CONTROL, PROVISIONS AGAINST THE USE OF OTHER THAN NEW MATERIAL, REPRESENTATIONS REGARDING THE USE OF GOVERNMENT SURPLUS PROPERTY, AND MODIFICATIONS OF THE GENERAL PROVISIONS.

IN THE SIGNATURE SPACE PROVIDED IN THE BID FORM, NORTH AMERICAN TYPED IN THE PHRASE,"SIGNATURE ON PAGE 1 OF PROPOSAL LETTER NO. 66AN11590.' WITH THE PROPOSAL LETTER, NORTH AMERICAN SUBMITTED A "PROPOSAL" WHICH IT REPRESENTED AS BEING COMPLETELY RESPONSIVE TO THE REFERENCED IFB. HOWEVER, THE ATTACHED "PROPOSAL" STATED THAT "THE PRICE CONTAINED HEREIN IS CONTINGENT UPON THE TERMS AND CONDITIONS SET FORTH ON THE SUBSEQUENT PAGES OF THIS PROPOSAL.'

ON THE SUBSEQUENT PAGES OF ITS PROPOSAL, NORTH AMERICAN STATED ITS WILLINGNESS TO ACCEPT A CONTRACT INCORPORATING THE GENERAL PROVISIONS, AS MODIFIED BY ARTICLE 12 OF THE SPECIAL PROVISIONS OF THE PRO FORMA CONTRACT. NORTH AMERICAN ALSO SET FORTH CERTAIN OF ITS OWN TERMS AND CONDITIONS EITHER PARAPHRASING, OR, AS GENERAL DYNAMICS MAINTAINS, MODIFYING BOTH (1) ARTICLES OF THE GENERAL PROVISIONS, WHICH PROVISIONS IT APPARENTLY WAS OTHERWISE WILLING TO ACCEPT, AND (2) THE PORTION OF THE SPECIAL PROVISIONS WHICH WE HAVE PREVIOUSLY IDENTIFIED. HOWEVER, THE SPECIAL PROVISIONS EXCEPT FOR ARTICLE 12 THEREOF, WERE NOT EXPLICITLY MENTIONED OR ACCEPTED IN NORTH AMERICAN'S ,PROPOSAL.' IN THE LAST SECTION OF THE "PROPOSAL," ENTITLED "GENERAL," THERE APPEARS THE TENCE,"THE BID FORM REQUIRED BY IFB-600 593-665 HAS BEEN MADE A PART OF THIS PROPOSAL.'

NORTH AMERICAN ATTACHED THE BID FORM TO ITS "PROPOSAL," AND PROVIDED INFORMATION AT DESIGNATED SPACES IN THE BID FORM. AS A RESULT OF THIS ACTION, THERE IS REASON TO CONCLUDE THAT NORTH AMERICAN'S "PROPOSAL" DID INCORPORATE THE CERTIFICATES, REPRESENTATIONS AND INFORMATION REQUESTED IN THE BID FORM. HAD THE "PROPOSAL" DONE NO MORE THAN THIS, ONE MIGHT ALSO REASONABLY ASSUME THAT NORTH AMERICAN'S PROPOSAL TOOK NO EXCEPTION TO THE "OFFER" IN PARAGRAPH 1 OF THE BID FORM TO COMPLY WITH THE TERMS AND CONDITIONS OF THE PRO FORMA CONTRACT. HOWEVER, NORTH AMERICAN CHOSE TO CONSTRUCT "ITS ... PROPOSAL" WITH ITS OWN TERMS AND CONDITIONS, WHICH WERE IN APPARENT CONTRADISTINCTION TO THE TERMS OF THE "OFFER" BIDDERS WERE INVITED TO SUBMIT, AND WHICH OMITTED ANY SPECIFIC REFERENCE TO THE SPECIAL PROVISIONS OF THE PRO FORMA CONTRACT. SINCE THE ARTICLES OF THE SPECIAL PROVISIONS WHICH WERE NOT MENTIONED OR REWRITTEN IN NORTH AMERICAN'S "PROPOSAL" COULD AFFECT PRICE, QUALITY, OR DELIVERY OF THE CONTRACT ITEMS, THEIR OMMISSION MUST BE CONSIDERED A MATERIAL DEVIATION. 30 COMP. GEN. 179.

THE ESSENCE OF NORTH AMERICAN'S POSITION ON THIS POINT IS THAT ITS "PROPOSAL" IS AN INDIVISIBLE DOCUMENT WHICH IS CONSISTENT WITH AND INCORPORATED ALL OF THE PROVISIONS IN THE GOVERNMENT'S IFB PACKAGE, AND BEING AN INDIVISIBLE DOCUMENT, SHOULD BE CONSTRUED SO THAT ALL OF ITS PROVISIONS ARE INTERNALLY CONSISTENT. NORTH AMERICAN POINTS OUT THAT COURTS PREFER INTERPRETATIONS WHICH GIVE MEANING TO ALL PARTS OF AN INSTRUMENT RATHER THAN ONE WHICH LEAVES A PORTION OF IT USELESS, INEXPLICABLE, INOPERATIVE, VOID, INSIGNIFICANT, MEANINGLESS OR SUPERFLUOUS. THEREFORE, IT CONTENDS WE SHOULD NOT HOLD THAT ITS "PROPOSAL" OMITTED THE SPECIAL PROVISIONS, SINCE SUCH A CONSTRUCTION WOULD RENDER MEANINGLESS BOTH THE STATEMENT IN THE "PROPOSAL" THAT THE BID FORM HAD BEEN MADE A PART THEREOF, AND THE SPECIFIC ACCEPTANCE OF THE GENERAL PROVISIONS WHICH PRESUPPOSED THE INCLUSION OF THE SPECIAL PROVISIONS.

IN OUR VIEW, ADVICE UNDER CIRCUMSTANCES SUCH AS INVOLVED HERE THAT THE BID FORM (AND PRESUMABLY, BY IMPLICATION, THE PRO FORMA CONTRACT WITH ITS SPECIAL PROVISIONS) HAS BY SOME UNSPECIFIED MEANS BEEN MADE A PART OF THE PROPOSAL, IS NOT THE EQUIVALENT OF A STATEMENT THAT THE BID FORM, TOGETHER WITH ALL TERMS AND CONDITIONS STATED IN THE PRO FORMA CONTRACT, ARE HEREBY INCORPORATED AS A PART OF THE PROPOSAL. FURTHERMORE, NORTH AMERICAN'S SPECIFIC ACCEPTANCE OF THE GENERAL PROVISIONS OF THE PRO FORMA CONTRACT, WHICH PROVISIONS PRESUPPOSED THE EXISTENCE OF SPECIAL PROVISION THAT WOULD GOVERN THE FORMER IN THE EVENT OF AN INCONSISTENCY BETWEEN THE TWO, IS CAPABLE OF BEING CONSTRUED AS AN ACCEPTANCE OF THOSE ARTICLES OF THE GENERAL PROVISIONS WHICH ARE NOT INCONSISTENT WITH THE PROVISIONS OF THE "PROPOSAL" SETTING FORTH TERMS AND CONDITIONS WHICH ALLEGEDLY PARAPHRASE A SELECTED NUMBER OF THE SPECIAL PROVISIONS. IN ANY EVENT, EACH OF THESE ASPECTS OF THE CASE IS EVIDENCE AT BEST OF AN INTENT TO INCORPORATE CERTAIN MATERIAL PROVISIONS INTO THE NORTH AMERICAN "PROPOSAL," AND DOES NOT OVERCOME POSITIVE ACTIONS OF THE BIDDER WHICH TEND TO CONTRADICT SUCH EVIDENCE AND INDICATE THAT THE GOVERNMENT'S ACCEPTANCE OF THE "PROPOSAL" WILL NOT RIPEN INTO A CONTRACT WHICH CONTAINS ALL MATERIAL PROVISIONS OF THE BID SOLICITED BY THE INVITATION. SEE 42 COMP. GEN. 502.

OUR DISAGREEMENT WITH NORTH AMERICAN'S POSITION DOES NOT RESIDE IN A PROPOSITION THAT ITS ,PROPOSAL," IF VIEWED AS AN INDIVISIBLE DOCUMENT INCORPORATING THE IFB PACKAGE, IS NOT SUSCEPTIBLE OF A CONSTRUCTION WHICH RECONCILES THE TERMS AND CONDITIONS OF THE "PROPOSAL" WITH THOSE INCORPORATED BY THE "OFFER" IN THE BID FORM. HOWEVER, IT SHOULD BE NOTED THAT SUCH A RECONCILIATION WOULD DEPEND UPON A CONSTRUCTION OF NORTH AMERICAN'S "PROPOSAL" WHICH RENDERS LARGELY MEANINGLESS AND SUPERFLUOUS THOSE TERMS AND CONDITIONS OF THE "PROPOSAL" WHICH ALLEGEDLY PARAPHRASED CERTAIN ARTICLES OF THE GENERAL AND SPECIAL PROVISIONS, A CONSTRUCTION WHICH NORTH AMERICAN SAYS IS AN ANATHEMA TO THE COURTS. MOREOVER, EVEN IF THE DIFFERENCE BETWEEN THE GOVERNMENT'S "OFFER" AND THE TERMS AND CONDITIONS SPECIFICALLY AUTHORED BY NORTH AMERICAN'S ,PROPOSAL" IS AS IMAGINARY AS NORTH AMERICAN CONTENDS, WE NEVERTHELESS CANNOT REGARD AS INSIGNIFICANT THE ACT OF SUBMITTING WITH THE BID FORM AN UNSOLICITED PROPOSAL WHICH TOOK NO EXCEPTION TO THE GENERAL PROVISIONS, BUT SPECIFICALLY ACCEPTED ONLY THAT PORTION OF THE SPECIAL PROVISONS (IN ADDITION OF ARTICLE 12 THEREOF) THAT PORTION OF THE SPECIAL PROVISIONS (IN ADDITION OF ARTICLE 12 THEREOF) WHICH WAS PARAPHRASED IN THE TERMS AND CONDITIONS OF ITS OWN "PROPOSAL.'

WE BELIEVE THIS ACT BY NORTH AMERICAN, AND THE IMPRESSION IT WOULD GENERALLY HAVE UPON A CONTRACTING OFFICER, IS MOST AMENABLE TO THE VIEW THAT THE GOVERNMENT'S INVITATION FOR A PARTICULAR "OFFER" IS ONE DOCUMENT, WHILE ANY UNSOLICITED PAPERS FROM THE OFFEROR WHICH SET FORTH ITS OWN PROPOSAL WITH SEPARATE TERMS AND CONDITIONS, CONSTITUTE AN ADDITIONAL AND SEPARATE DOCUMENT MUCH IN THE NATURE AND FORM OF A COUNTEROFFER. IT IS SETTLED AT COMMON LAW THAT EVEN WHERE THE OFFEREE INTENDS MERELY TO RESTATE THE OFFER IN HIS ACCEPTANCE, THE RESTATEMENT MUST BE ACCURATE IN EVERY MATERIAL RESPECT, AND THE OFFEREE MUST IN EFFECT AGREE TO MAKE PRECISELY THE PROMISE REQUESTED. SEE CASES CITED AT WILLISTON ON CONTRACTS, THIRD ED., SEC. 73, AND CORBIN ON CONTRACTS, SEC. 86. ALTHOUGH NORTH AMERICAN MAY HAVE INTENDED TO MERELY RESTATE IN ITS PROPOSAL THE "OFFER" INVITED BY THE GOVERNMENT, WE BELIEVE THE LAW IN THIS AREA OF GOVERNMENT PROCUREMENT SHOULD REQUIRE THAT SUCH RESTATEMENT BE ACCURATE IN EVERY MATERIAL RESPECT, AND AGREE TO MAKE PRECISELY THE PROMISE REQUESTED.

SINCE AT BEST NORTH AMERICAN'S "PROPOSAL" SPECIFICALLY AGREED TO ACCEPT ALL PROVISIONS OF THE BID DOCUMENTS EXCEPT PREVIOUSLY IDENTIFIED ARTICLES OF THE SPECIAL PROVISIONS, WE BELIEVE ITS, ,PROPOSAL" WAS NOT PRECISELY THE PROMISE REQUESTED BY THE "OFFER" IN THE BID FORM. THE SUBMISSION OF SUCH A "PROPOSAL" CONSTITUTED ACTION BY THE BIDDER WHICH MUST, AS A MATTER OF LAW, BE INTERPRETED TO MEAN THAT ITS ACCEPTANCE BY THE GOVERNMENT WOULD NOT RIPEN INTO A CONTRACT CONTAINING ALL MATERIAL PROVISIONS OF THE "OFFER.' NORTH AMERICAN'S BID, OR "PROPOSAL," WAS THEREFORE DEFECTIVE IN THAT IT WAS SUBMITTED FOR ACCEPTANCE ON A BASIS OTHER THAN THAT SOLICITED. THE MATERIALITY OF THE DEFECT IS NOT DIMINISHED BECAUSE IT MODIFIES THE LEGAL OBLIGATIONS OF THE PARTIES, RATHER THAN THE TECHNICAL SPECIFICATIONS. 37 COMP. GEN. 27, 29. AND THE FACT THAT NORTH AMERICAN STATED THAT ITS "PROPOSAL" WAS COMPLETELY RESPONSIVE TO THE REFERENCED IFB MAY NOT BE ACCEPTED AS A CURE FOR THE MATERIAL DEFECT CONTAINED IN ITS BID. SEE B-150146, DATED DECEMBER 18, 1962, COPY ENCLOSED, CITING 42 COMP. GEN. 96.

ACCORDINGLY, THE "PROPOSAL" OF NORTH AMERICAN SHOULD BE REJECTED AS A NONRESPONSIVE BID.