B-158751, MAY 3, 1966

B-158751: May 3, 1966

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MANUEL AUERBACH: REFERENCE IS MADE TO YOUR LETTERS DATED MARCH 30. THE SUBJECT INVITATION WAS THE SECOND STEP OF A TWO-STEP ADVERTISED PROCUREMENT FOR 6 INTEGRATED INTERCOMMUNICATION SYSTEMS AN/WIC- (V) AND ANCILLARY ITEMS AND WAS ISSUED TO THE REMLER COMPANY AND RCA. THE INVITATION STATED THAT NO PREPRODUCTION EQUIPMENT WAS REQUIRED OF RCA. AS IT WAS A PREVIOUS SUPPLIER OF THE EQUIPMENT SPECIFIED IN THE INVITATION. BIDS WERE OPENED ON JANUARY 4. THE BID OF THE REMLER COMPANY WAS IN THE AMOUNT OF $298. 260 AND THE BID OF RCA WAS IN THE AMOUNT OF $382. THE REMLER COMPANY STATED THAT ITS BID THEREFORE SHOULD HAVE BEEN IN THE AMOUNT OF $361. 854.12 AND REQUESTED THAT THE CONTRACT BE AWARDED TO IT AS THE CORRECTED BID WAS STILL LOW.

B-158751, MAY 3, 1966

TO MR. MANUEL AUERBACH:

REFERENCE IS MADE TO YOUR LETTERS DATED MARCH 30, 1966, AND APRIL 14, 1966, PROTESTING, ON BEHALF OF THE REMLER COMPANY, AGAINST THE AWARD OF A CONTRACT TO THE RADIO CORPORATION OF AMERICA (RCA) UNDER NAVY INVITATION FOR BIDS NO. 600-591-66-S.

THE SUBJECT INVITATION WAS THE SECOND STEP OF A TWO-STEP ADVERTISED PROCUREMENT FOR 6 INTEGRATED INTERCOMMUNICATION SYSTEMS AN/WIC- (V) AND ANCILLARY ITEMS AND WAS ISSUED TO THE REMLER COMPANY AND RCA, BOTH OF WHICH HAD SUBMITTED ACCEPTABLE TECHNICAL PROPOSALS UNDER THE FIRST STEP OF THE PROCUREMENT. THE INVITATION STATED THAT NO PREPRODUCTION EQUIPMENT WAS REQUIRED OF RCA, AS IT WAS A PREVIOUS SUPPLIER OF THE EQUIPMENT SPECIFIED IN THE INVITATION, AND DIRECTED THAT ALL OTHER BIDDERS INCLUDE THE COST OF PREPRODUCTION EQUIPMENT IN THE PRICE OF ITEM 1 OF THEIR RESPECTIVE BIDS. BIDS WERE OPENED ON JANUARY 4, 1966. THE BID OF THE REMLER COMPANY WAS IN THE AMOUNT OF $298,260 AND THE BID OF RCA WAS IN THE AMOUNT OF $382,920. THE CONTRACTING OFFICER REQUESTED VERIFICATION OF THE REMLER COMPANY BID AND IN RESPONSE TO THIS REQUEST, THE REMLER COMPANY ADVISED IN A TELEGRAM DATED JANUARY 11, 1966, THAT IT HAD MADE AN ERROR IN THE AMOUNT OF $63,594.12 CAUSED BY THE INADVERTENT OMISSION OF THE COST OF PREPRODUCTION EQUIPMENT. THE REMLER COMPANY STATED THAT ITS BID THEREFORE SHOULD HAVE BEEN IN THE AMOUNT OF $361,854.12 AND REQUESTED THAT THE CONTRACT BE AWARDED TO IT AS THE CORRECTED BID WAS STILL LOW. MR. R. C. GRAY, PRESIDENT OF THE REMLER COMPANY, HAS SUBMITTED WORKSHEETS AND AFFIDAVITS EXPLAINING WHY THE PREPRODUCTION SAMPLE COST WAS OMITTED AND HOW THE $63,594.12 PREPRODUCTION SAMPLE FIGURE WAS DETERMINED. MR. GRAY ADVISED THAT A COPY OF THE INVITATION FOR THE SUBJECT PROCUREMENT WAS PERSONALLY PICKED UP BY HIM AT THE CONTRACTING OFFICER'S OFFICE IN WASHINGTON, D.C., ON DECEMBER 21, 1965, AND THAT THE COPY OF THE INVITATION WHICH HAD BEEN MAILED TO REMLER BY THE PROCURING AGENCY WAS NOT RECEIVED AT THE COMPANY'S PLANT IN CALIFORNIA UNTIL SOMETIME AFTER THAT DATE. BECAUSE OF THE PROXIMITY OF THE CHRISTMAS AND NEW YEAR'S HOLIDAYS, MR. GRAY FELT THAT THE 13 DAYS REMAINING UNTIL THE BID OPENING DATE DID NOT ALLOW SUFFICIENT TIME FOR PREPARATION OF THE REMLER BID AND REQUESTED THAT THE BID OPENING BE EXTENDED. THIS REQUEST WAS REFUSED BY THE CONTRACTING OFFICER, ACCORDING TO MR. GRAY, ON THE BASIS THAT REMLER HAD BID ON THE SAME EQUIPMENT SEVERAL TIMES IN THE PAST AND THEREFORE HAD SUFFICIENT TIME REMAINING TO PREPARE ITS BID. BECAUSE HE FELT THAT IT WAS IMPERATIVE FOR REMLER TO BEGIN WORKING ON ITS BID IMMEDIATELY, MR. GRAY THEN CALLED THE COMPANY AND INSTRUCTED THAT AN INVITATION FORM FROM A PRIOR PROCUREMENT OF THE SAME EQUIPMENT BE USED AS A GUIDE IN WORKING UP THE BID FIGURES PENDING HIS RETURN TO CALIFORNIA WITH THE INVITATION. MR. GRAY ALSO STATED THAT DURING THIS PHONE CONVERSATION HE INSTRUCTED THAT THE PREPRODUCTION SAMPLE FIGURE OF $63,594.12 CONTAINED IN THE PRIOR BID BE USED IN THE CURRENT BID. THE ERROR CAME ABOUT BECAUSE THE PRIOR BID FORM REQUIRED THAT PREPRODUCTION SAMPLE FIGURES BE INSERTED SEPARATELY, APART FROM THE PRICES FOR THE PRODUCTION ITEMS, WHILE THE CURRENT FORM REQUIRED THAT PREPRODUCTION SAMPLE FIGURES BE INCLUDED IN THE PRICE FOR PRODUCTION ITEMS. IT WAS INTENDED, THEREFORE, THAT THE PREPRODUCTION PRICE WOULD BE INSERTED SEPARATELY, AS REQUIRED BY THE PRIOR BID FORM, BUT SINCE THE CURRENT FORM HAD NO SEPARATE ITEM FOR PREPRODUCTION SAMPLE FIGURES, THE SAMPLE PRICE WAS INADVERTENTLY OMITTED. THE WORKSHEETS SUBMITTED BY REMLER CONTAIN FIGURES PERTAINING TO THE SIX PRODUCTION UNITS BUT SHOW NO FIGURES INDICATING HOW THE PREPRODUCTION SAMPLE COST WAS DETERMINED, ALTHOUGH THE AFFIDAVITS SUBMITTED BY MR. GRAY, MR. EDWARD P. CASQUERIO, REMBLER COMPANY SECRETARY-TREASURER, AND MR. HARRY A. GREENE, JR., REMLER COMPANY VICE PRESIDENT-ENGINEERING, STATE THAT INSTRUCTIONS TO USE THE $63,594.12 FIGURE FROM THE PRIOR BID WERE GIVEN BY MR. GRAY DURING THE PHONE CONVERSATION OF DECEMBER 21. THE DEPARTMENT OF THE NAVY, BUREAU OF SUPPLIES AND ACCOUNTS, PURSUANT TO AUTHORITY CONTAINED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3, DETERMINED THAT REMLER HAD SUFFICIENTLY PROVED THE EXISTENCE OF THE CLAIMED MISTAKE AND COULD THEREFORE WITHDRAW ITS BID, BUT HAD NOT PROVED THE AMOUNT OF ITS INTENDED BID BY CLEAR AND CONVINCING EVIDENCE, AND THEREFORE COULD NOT HAVE THE BID CORRECTED. THE CONTRACT WAS THEREAFTER AWARDED TO RCA.

YOU CONTEND THAT SINCE REMLER COULD PRODUCE AT THE LOWEST COST TO THE GOVERNMENT EVEN AFTER CORRECTION OF ITS BID AND SINCE "ASPR AND THE LAWS AND REGULATIONS PERTAINING TO BID PROCUREMENT ARE FOR THE BENEFIT OF THE GOVERNMENT AND NOT THE BIDDER," IT WAS IN THE GOVERNMENT'S BEST INTEREST TO SECURE THE ITEMS CALLED FOR IN THE INVITATION AT THE LOWEST POSSIBLE PRICE AND THEREFORE TO MAKE THE AWARD TO REMLER.

AS POINTED OUT BY YOU, THE ADVERTISING STATUTES WERE ENACTED FOR THE BENEFIT OF THE GOVERNMENT AND NOT THE BIDDER. HOWEVER, IT IS WELL SETTLED THAT PRESERVATION OF THE COMPETITIVE BIDDING SYSTEM IS TO THE GOVERNMENT'S BENEFIT AND THE LOSS OF A SAVINGS IN AN INDIVIDUAL CASE IS TO BE PREFERRED OVER AN AWARD WHICH GIVES ONE BIDDER AN UNFAIR ADVANTAGE OVER OTHER BIDDERS. FOR THIS REASON, THE GENERAL RULE IS THAT BIDS MAY NOT BE WITHDRAWN OR MODIFIED UNTIL EXPIRATION OF THE TIME SPECIFIED IN THE INVITATION FOR ACCEPTANCE. REFINING ASSOCIATES, INC. V. UNITED STATES, 124 CT.CL. 115. WITHDRAWAL IS PERMITTED AFTER OPENING AND BEFORE AWARD IN CASES WHERE A BIDDER ESTABLISHES THAT AN ERROR HAS BEEN MADE BECAUSE ACCEPTANCE OF A BID BY THE GOVERNMENT WITH KNOWLEDGE OF ERROR THEREIN WOULD NOT RESULT IN A BINDING CONTRACT. 42 COMP. GEN. 723. CORRECTION OF AN ERRONEOUS BID IS PERMITTED AFTER OPENING AND BEFORE AWARD IN CASES WHERE THE CORRECTED BID WOULD STILL BE LOW ONLY IF THE BIDDER IS ABLE TO SHOW BY CLEAR AND CONVINCING EVIDENCE, IN ADDITION TO THE EXISTENCE OF THE MISTAKE, WHAT ITS BID PRICE WOULD HAVE BEEN ABSENT THE MISTAKE. THE DEGREE OF PROOF REQUIRED TO JUSTIFY CORRECTION, HOWEVER, IS MUCH HIGHER THAN THE DEGREE OF PROOF REQUIRED TO JUSTIFY WITHDRAWAL. 36 COMP. GEN. 441.

WE CONCLUDE THAT THE DETERMINATION MADE BY THE NAVY THAT REMLER BE PERMITTED TO WITHDRAW BUT NOT TO CORRECT ITS BID WAS CORRECT. THE ONLY EVIDENCE SUBMITTED TO SUBSTANTIATE THE INTENDED BID PRICE CONSISTED OF THE AFFIDAVITS MENTIONED ABOVE. THERE WAS NO INDICATION OF HOW THE FIGURE OF $63,594.12 WAS DETERMINED OTHER THAN THE EXPLANATION, SUBMITTED AFTER BID OPENING, THAT IT WAS REMLER'S INTENTION TO USE THE PREPRODUCTION SAMPLE PRICE FROM THE PRIOR BID. AS POINTED OUT IN THE NAVY REPORT, THE PRICES SUBMITTED BY REMLER IN THE PRIOR BID FOR PRODUCTION UNITS WERE SUBSTANTIALLY HIGHER THAN THOSE SUBMITTED IN THE CURRENT BID, INDICATING, ABSENT THE EXPLANATION CONTAINED IN THE AFFIDAVITS, THAT THE PRIOR PREPRODUCTION PRICE PROBABLY WOULD BE HIGHER THAN THAT INTENDED FOR THE CURRENT PROCUREMENT. WE FEEL, THEREFORE, THAT THE UNCORROBORATED AFFIDAVITS DO NOT CONSTITUTE THE CLEAR AND CONVINCING EVIDENCE REQUIRED FOR CORRECTION OF THE REMLER BID.

ALSO, WE CONCLUDE THAT THE CONTRACTING OFFICER'S REFUSAL TO GRANT AN EXTENSION OF THE BID OPENING TIME WAS WITHIN HIS DISCRETIONARY POWER IN VIEW OF THE 13 DAYS WHICH REMAINED FOR BID PREPARATION AT THE TIME THE REQUEST WAS MADE AND IN VIEW OF REMLER'S FAMILIARITY WITH THE ITEMS COVERED BY THE INVITATION, AS EVIDENCED BY ITS PRIOR BID AND THE FACT THAT THIS WAS A TWO-STEP PROCUREMENT.

ACCORDINGLY, WE CONCLUDE THAT NO BASIS EXISTS FOR DISTURBING THE AWARD MADE TO RCA.