B-159018, JUN. 6, 1966

B-159018, JUN. 6, 1966

TO DIESEL SERVICE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 23, 1966, AND TO THE LETTER DATED APRIL 22, 1966, WITH ENCLOSURE, FROM DIESEL SERVICE COMPANY, SEATTLE, WASHINGTON, PROTESTING AGAINST THE RELEASE TO ANY COMPANY OTHER THAN DIESEL SERVICE COMPANY OF THREE CRANKSHAFTS IDENTIFIED AS ITEM 138 IN INVITATION FOR BIDS NO. 44-6085, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, DEFENSE SUPPLY AGENCY, OAKLAND,CALIFORNIA.

THE ABOVE-REFERENCED INVITATION SOLICITED BIDS FOR THE SALE OF MARINE EQUIPMENT AND SUPPLIES. ITEM 138 CONSISTED OF THREE DIESEL CRANKSHAFTS SHOWN AS A QUANTITY OF "3 EACH" IN THE INVITATION. AMONG THE BIDS SUBMITTED ON THIS ITEM WERE ONE FROM DIESEL SERVICE COMPANY SHOWING THE QUANTITY BID ON AS "3," A UNIT PRICE BID OF $3,190, AND A TOTAL PRICE BID OF $9,570, AND ONE FROM ABC DIESEL, SAN FRANCISCO, CALIFORNIA, SHOWING THE QUANTITY BID ON AS "LOT," AND THE UNIT PRICE BID AND TOTAL PRICE BID AS $10,580. DIRECTLY ABOVE THESE FIGURES ON PAGE 24 OF THE SEALED BID IS THE FOLLOWING INSTRUCTION TO BIDDERS:

"SUBMIT A "UNIT PRICE BID" WHEN BIDS ARE SOLICITED ON AN EACH, FOOT, POUND, GT, ETC, BASIS. SUBMIT ONLY A "TOTAL PRICE BID" WHEN BIDS ARE SOLICITED ON A "LOT" BASIS. BIDS WILL BE ACCEPTED ONLY IN THE TOTAL QUANTITIES OFFERED.'

AS MENTIONED ABOVE, THE CRANKSHAFTS BEING SOLD WERE SHOWN TO BE IN A QUANTITY OF "3 EACH; " THE CONTRACTING OFFICER, THEREFORE, DETERMINED THAT ABC DIESEL'S BID WAS NONRESPONSIVE IN THAT IT INSERTED NO UNIT PRICE BID BUT MERELY INSERTED ITS TOTAL BID PRICE IN BOTH PRICE COLUMNS. AS A RESULT, A NOTICE OF AWARD WAS MAILED TO DIESEL SERVICE COMPANY ON APRIL 19, 1966, COVERING SEVEN ITEMS INCLUDING ITEM 138. HOWEVER, THE NEXT DAY, AFTER A DISCUSSION OF THE FACTS AND LAW INVOLVED, THE CONTRACTING OFFICER ADVISED DIESEL SERVICE COMPANY THAT HE HAD MADE AN ADMINISTRATIVE ERROR BY NOT AWARDING THE CONTRACT TO ABC DIESEL, THE HIGHEST BIDDER FOR ITEM 138. ACCORDINGLY, A CORRECTED NOTICE OF AWARD WAS MAILED TO DIESEL SERVICE ON APRIL 21, 1966, OMITTING ITEM 138. MEANWHILE, A NOTICE OF AWARD FOR ITEM 138 HAD BEEN MAILED TO ABC DIESEL ON APRIL 20, 1966.

DIESEL SERVICE COMPANY CONTENDS THAT INASMUCH AS THE CONTRACTING OFFICER MADE A FINDING, EXECUTED THE SALE AND ISSUED A NOTICE OF AWARD AND RELEASE TO DIESEL SERVICE, THERE IS NO AUTHORITY TO PERMIT THE PARTIAL RESCISSION OF THE CONTRACT. IT FURTHER CONTENDS THE BID OF ABC DIESEL WAS NONRESPONSIVE AND SPECIFICALLY REQUESTS THE CONTRACTING OFFICER BE DIRECTED TO RELEASE ITEM 138 TO IT. WE DO NOT AGREE WITH THESE CONTENTIONS.

CONTRACTING OFFICERS, WHILE NECESSARILY VESTED WITH CONSIDERABLE DISCRETION WHEN DETERMINING THE FACTUAL BASES UPON WHICH AN AWARD SHOULD BE MADE, STILL MUST COMPLY WITH THE PROCUREMENT REGULATIONS WHEN DETERMINING THE LEGAL BASES FOR AWARDS. THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.1 PROVIDES THAT:

"UNLESS ALL BIDS ARE REJECTED, AWARD SHALL BE MADE BY THE CONTRACTING OFFICER, WITHIN THE TIME FOR ACCEPTANCE SPECIFIED IN THE BID OR EXTENSION THEREOF, TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. * * *"

SOME OF THE "OTHER FACTORS" ARE LISTED IN ASPR 2-407.5, NONE OF WHICH IS APPLICABLE HERE. THEREFORE, THE CONTRACTING OFFICER MUST MAKE THE AWARD WITHIN THE FRAMEWORK OF THE ABOVE-QUOTED SECTION, I.E., TO THE HIGHEST RESPONSIBLE, RESPONSIVE BIDDER. IT FOLLOWS, THEN, IF ABC DIESEL'S BID WAS RESPONSIVE OR IF IT CONTAINED ONLY MINOR IRREGULARITIES WHICH SHOULD BE WAIVED, THE CONTRACTING OFFICER IS BOUND BY LAW TO MAKE AWARD TO ABC SINCE IT SUBMITTED THE HIGHEST ACCEPTABLE BID.

IN 37 COMP. GEN. 190, A CASE INVOLVING A SALE OF SURPLUS SCRAP, IN WHICH THE HIGH BIDDER ENTERED HIS BID ON A GROSS TON RATHER THAN POUND UNIT BASIS AS SPECIFICALLY REQUIRED BY THE INVITATION, IT WAS HELD THIS DEVIATION DID NOT AFFECT THE PRICE OR SUBSTANCE OF THE BID OR WORK AN INJUSTICE TO THE OTHER BIDDERS AND SHOULD, THEREFORE, BE WAIVED. ON PAGE 192 THE COMPTROLLER GENERAL STATED:

"* * * IT HAS BEEN CONSISTENTLY HELD THAT DEFICIENCIES OR DEVIATIONS IN BIDS MAY BE WAIVED, IN THE INTEREST OF THE GOVERNMENT, ONLY IF THEY DO NOT GO TO THE SUBSTANCE OF THE BID OR WORK AN INJUSTICE TO OTHER BIDDERS. OTHER WORDS, THE PRIMARY QUESTION FOR DETERMINATION IN SUCH CASES IS WHETHER THE DEFICIENCY OR DEVIATION GOES TO THE SUBSTANCE OF THE BID SO AS TO AFFECT EITHER THE PRICE, QUANTITY OR QUALITY OF THE ARTICLES OFFERED AND THEREFORE IS PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS OR IS MERELY A MATTER OF FORM OR SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE SPECIFICATIONS SUCH AS WOULD NOT AFFECT EITHER THE PRICE, QUALITY, OR QUANTITY OF THE ARTICLES OFFERED. * * *"

IN THE PRESENT CASE WE FEEL THE INSERTION OF THE TOTAL PRICE IN BOTH THE UNIT PRICE BID AND TOTAL PRICE BID COLUMNS DID NOT AFFECT THE PRICE, QUALITY, OR QUANTITY OF THE ARTICLES OFFERED, NOR WAS IT PREJUDICIAL TO THE RIGHTS OF THE OTHER BIDDERS IN ANY MANNER WHATSOEVER. IT WAS A MERE MATTER OF FORM AND DID NOT GO TO THE SUBSTANCE OF THE BID SINCE THE TRUE INTENT OF THE CONTRACTOR IS EASILY GLEANED FROM HIS BID. FURTHERMORE, ARTICLE AE OF THE SPECIAL SEALED BID CONDITIONS, WHILE IT DOES NOT COVER THE EXACT SITUATION IN OUR CASE, DOES CONTEMPLATE MINOR DEVIATIONS IN FORM IN ENTERING PRICES IN THE PRICE COLUMNS. OF COURSE, IT IS NOT POSSIBLE TO LIST ALL PRICE DEVIATION SITUATIONS THAT MIGHT ARISE, BUT WE FEEL ARTICLE AE SHOWS THE INTENT OF THE GOVERNMENT TO CATEGORIZE THESE TYPES OF DEVIATIONS AS MINOR IRREGULARITIES IN FORM THAT SHOULD BE WAIVED.

FINALLY, IN REGARD TO DIESEL SERVICE COMPANY'S CONTENTION THAT THERE IS NO AUTHORITY TO CANCEL THE AWARD ERRONEOUSLY MADE TO IT, WE REFER TO 36 COMP. GEN. 94, 96, WHERE AN ERRONEOUS AWARD WAS MADE AS A RESULT OF AN ADMINISTRATIVE ERROR AND THE COMPTROLLER GENERAL APPROVED CANCELLATION OF THE CONTRACT, QUOTING FROM SCOTT V. UNITED STATES, 44 CT.CL. 524, 527, AS FOLLOWS:

"THE AGENTS OF THE GOVERNMENT STAND UPON A DIFFERENT FOOTING FROM PRIVATE INDIVIDUALS IN THE MATTER OF ADVERTISING FOR THE LETTING OF CONTRACTS IN BEHALF OF THE UNITED STATES. THEY HAVE NO DISCRETION. THEY MUST ACCEPT THE LOWEST OR THE HIGHEST RESPONSIBLE BID, OR REJECT ALL AND READVERTISE.'

IN VIEW OF THE FACTS AND CIRCUMSTANCES INVOLVED, WE HAVE NO OBJECTION TO THE ACTION TAKEN BY THE CONTRACTING OFFICER IN CANCELING THE AWARD MADE TO DIESEL SERVICE COMPANY.