B-159473, SEP. 7, 1966

B-159473: Sep 7, 1966

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE ELECTRONIC SERVICE COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 14. THE SUBJECT INVITATION WAS ISSUED ON MAY 16. THE TELEVISION RECEIVER SETS ARE DESIGNATED ITEM 1. UNDER WHICH SOME 85 TELEVISION SETS ARE GROUPED INTO FOUR SUBITEMS ACCORDING TO MAKE AND MODEL NUMBER. THE CONTRACT WAS AWARDED TO THAT FIRM. AFTER THE AWARD WAS MADE THE CONTRACTING OFFICER RECEIVED CORRESPONDENCE FROM YOU PROTESTING THE AWARD AND STATING THE BASIS THEREFOR. THE PRIMARY BASIS FOR YOUR PROTEST IS THE CONTENTION THAT THE REQUIREMENT FOR SUBMITTING A BID ON ALL SUB-ITEMS IS MANDATORY AND. THE FAILURE OF THE CONTRACTOR TO INDICATE SEPARATELY THE TOTAL AMOUNT BID FOR EACH SUB -ITEM UNDER ITEM 1 (THE UNIT PRICES FOR EACH WAS STATED) AND ITS FAILURE TO STATE THE UNIT PRICE FOR THE SUB ITEMS UNDER ITEM 2 RESULT IN ITS BID BEING NONRESPONSIVE.

B-159473, SEP. 7, 1966

TO THE ELECTRONIC SERVICE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 14, 1966, WITH ENCLOSURES, PROTESTING AGAINST AWARD OF A CONTRACT TO RADIO-TELEVISION CORPORATION, LTD., BY THE UNITED STATES ARMY AT FORT SHAFTER, HONOLULU, HAWAII, UNDER INVITATION FOR BIDS (IFB) NO. DAGA01-66-B-0110.

THE SUBJECT INVITATION WAS ISSUED ON MAY 16, 1966, FOR BIDS ON FURNISHING ALL LABOR, MATERIALS AND EQUIPMENT NECESSARY TO MAINTAIN AND KEEP IN OPERATING CONDITION THE TELEVISION RECEIVER SETS AND THE MASTER TELEVISION ANTENNA DISTRIBUTION SYSTEM AT THE UNITED STATES ARMY TRIPLER GENERAL HOSPITAL. THE TELEVISION RECEIVER SETS ARE DESIGNATED ITEM 1, UNDER WHICH SOME 85 TELEVISION SETS ARE GROUPED INTO FOUR SUBITEMS ACCORDING TO MAKE AND MODEL NUMBER, ALONG WITH THE RESPECTIVE QUANTITIES OF EACH. ITEM 2, THE MASTER TELEVISION ANTENNA DISTRIBUTION SYSTEM, CONSISTS OF THREE SUB- ITEMS OF FOUR ANTENNA AND TWO AMPLIFIERS. WITH RESPECT TO THE AWARD OF A CONTRACT, THE FOLLOWING PROVISION APPEARS AT THE END OF THE SCHEDULE OF THE EQUIPMENT TO BE SERVICED UNDER THE CONTRACT:

"A. AWARD SHALL BE MADE ON AN "ALL OR NONE" BASIS, ITEMS 1 AND 2 INCLUSIVE, TO ANY ONE FIRM AND IN ACCORDANCE WITH PARAGRAPH 8 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS.

"B. ANY BIDDER WHO FAILS TO SUBMIT A BID ON ALL SUBITEMS SPECIFIED HEREIN SHALL BE CONSIDERED NON-RESPONSIVE AND SHALL BE REJECTED.' THE INVITATION CALLS FOR BOTH QUARTERLY INSPECTION AND MAINTENANCE AND SERVICING ON A NEEDS BASIS OF ALL THE TELEVISION RECEIVER SETS AND THE MASTER ANTENNA DISTRIBUTION SYSTEM WITHOUT ADDITIONAL COST TO THE GOVERNMENT. THE INVITATION ALSO RESERVES TO THE GOVERNMENT THE RIGHT TO WITHDRAW ANY TELEVISION SET FROM THE CONTRACT AND TO MAKE APPROPRIATE MODIFICATION THEREOF.

THE SOLICITATION RESULTED IN THE RECEIPT AND OPENING ON JUNE 1, 1966, OF THREE BIDS AS FOLLOWS:

CHART

SATELLITE TV ELECTRONIC SERV RADIO TELEVISION

"ITEM NO. SERVICE CO. CORP., LTD.

1A $75.00 $14.955 PER QTR $60.00

B 65.00 14.955 DO. DO. 50.00

C 60.00 14.955 DO. DO. 40.00

D 40.00 14.955 DO. DO. 40.00 2A

ALL FOR 251.70 DO. DO. ALL FOR

B 2,120.00 12.175 DO. DO. 499.00

C 125.80 DO. DO.

TOTAL AMOUNT $6,895.00 $6,789.50 $4,299.00" BECAUSE OF THE SIGNIFICANT DIFFERENCE IN THE AMOUNTS BID, THE CONTRACTING OFFICER REQUESTED AND RECEIVED IN WRITING VERIFICATION OF THE BID PRICES OF THE RADIO-TELEVISION CORP., LTD. ON JUNE 16, 1966, THE CONTRACT WAS AWARDED TO THAT FIRM.

AFTER THE AWARD WAS MADE THE CONTRACTING OFFICER RECEIVED CORRESPONDENCE FROM YOU PROTESTING THE AWARD AND STATING THE BASIS THEREFOR. THE PRIMARY BASIS FOR YOUR PROTEST IS THE CONTENTION THAT THE REQUIREMENT FOR SUBMITTING A BID ON ALL SUB-ITEMS IS MANDATORY AND, THEREFORE, THE FAILURE OF THE CONTRACTOR TO INDICATE SEPARATELY THE TOTAL AMOUNT BID FOR EACH SUB -ITEM UNDER ITEM 1 (THE UNIT PRICES FOR EACH WAS STATED) AND ITS FAILURE TO STATE THE UNIT PRICE FOR THE SUB ITEMS UNDER ITEM 2 RESULT IN ITS BID BEING NONRESPONSIVE. IN SUPPORT OF THIS CONTENTION YOU CITE VARIOUS PROVISIONS OF THE INVITATION, INCLUDING THE ONE HERETOFORE QUOTED, AND THE PROVISION REGARDING THE WITHDRAWAL OF TELEVISION SETS FROM THE CONTRACT. WITH RESPECT TO THE LATTER PROVISION, YOU STATE THAT THE BID UNDER ITEM 1 LACKS THE ITEMIZATION NECESSARY TO MODIFY THE CONTRACT PRICE IN THE EVENT A TELEVISION SET IS WITHDRAWN THEREUNDER. IN ADDITION TO THE FOREGOING, YOU ALSO CONTEND THAT THE RADIO-TELEVISION CORPORATION BID WAS SO LOW AS TO INDICATE EITHER IT WAS AN ATTEMPT TO "BUY IN" IN VIOLATION OF ARMED SERVICES PROCUREMENT REGULATION 1-311, WAS MADE IN EXPECTATION OF DOING INFERIOR AND LESS COSTLY WORK, OR WITH THE EXPECTATION OF RECEIVING INCREASES BY WAY OF CONTRACT ADJUSTMENTS.

SINCE YOU HAVE SUBMITTED NO EVIDENCE IN SUPPORT OF YOUR ALLEGATIONS CONCERNING THE LOW FIGURES BID BY RADIO-TELEVISION CORPORATION, AND SINCE THE FIGURES WERE VERIFIED AS CORRECT PRIOR TO THE AWARD, WE ARE UNABLE TO ASCRIBE ANY VALIDITY TO SUCH ALLEGATIONS AND MAY NOT THEREFORE TAKE ANY ACTION BASED THEREUPON.

WITH REGARD TO YOUR CONTENTIONS CONCERNING THE MANDATORY EFFECT OF THE REQUIREMENT FOR A BID ON ALL SUB-ITEMS, WE BELIEVE THE FOLLOWING LANGUAGE FROM OUR DECISION REPORTED AT 40 COMP. GEN. 321, 324, IS APPLICABLE THERETO:

"WHETHER CERTAIN PROVISIONS OF AN INVITATION FOR BIDS ARE TO BE CONSIDERED MANDATORY OR DISCRETIONARY DEPENDS UPON THE MATERIALITY OF SUCH PROVISIONS AND WHETHER THEY ARE INSERTED FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT OR FOR THE PROTECTION OF THE RIGHTS OF BIDDERS. UNDER AN ADVERTISED PROCUREMENT ALL QUALIFIED BIDDERS MUST BE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT BIDS WHICH ARE BASED UPON THE SAME SPECIFICATIONS, AND TO HAVE SUCH BIDS EVALUATED ON THE SAME BASIS. TO THE EXTENT THAT WAIVER OF THE PROVISIONS OF AN INVITATION FOR BIDS MIGHT RESULT IN FAILURE OF ONE OR MORE BIDDERS TO ATTAIN THE EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS WITH OTHER BIDDERS, SUCH PROVISION MUST BE CONSIDERED MANDATORY. HOWEVER, THE CONCEPT OF FORMALLY ADVERTISED PROCUREMENT, INSOFAR AS IT RELATES TO THE SUBMISSION AND EVALUATION OF BIDS, GOES NO FURTHER THAN TO GUARANTEE EQUAL OPPORTUNITY TO COMPETE AND EQUAL TREATMENT IN THE EVALUATION OF BIDS. IT DOES NOT CONFER UPON BIDDERS ANY RIGHT TO INSIST UPON THE ENFORCEMENT OF PROVISIONS IN AN INVITATION, THE WAIVER OF WHICH WOULD NOT RESULT IN AN UNFAIR COMPETITIVE ADVANTAGE TO OTHER BIDDERS BY PERMITTING A METHOD OF CONTRACT PERFORMANCE DIFFERENT FROM THAT CONTEMPLATED BY THE INVITATION OR BY PERMITTING THE BID PRICE TO BE EVALUATED UPON A BASIS NOT COMMON TO ALL BIDS. SUCH PROVISIONS MUST THEREFORE BE CONSTRUED TO BE SOLELY FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT AND THEIR ENFORCEMENT OR WAIVER CAN HAVE NO EFFECT UPON THE RIGHTS OF BIDDERS TO WHICH THE RULES AND PRINCIPLES APPLICABLE TO FORMAL ADVERTISING ARE DIRECTED. TO THIS END, THE DECISIONS OF THIS OFFICE HAVE CONSISTENTLY HELD THAT WHERE DEVIATIONS FROM, OR FAILURES TO COMPLY WITH, THE PROVISIONS OF AN INVITATION DO NOT AFFECT THE BID PRICE UPON WHICH A CONTRACT WOULD BE BASED OR THE QUANTITY OR QUALITY OF THE WORK REQUIRED OF THE BIDDER IN THE EVENT HE IS AWARDED A CONTRACT, A FAILURE TO ENFORCE SUCH PROVISION WILL NOT INFRINGE UPON THE RIGHTS OF OTHER BIDDERS AND THE FAILURE OF A BIDDER TO COMPLY WITH THE PROVISION MAY BE CONSIDERED AS A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE.'

APPLYING THESE PRINCIPLES TO THE INVITATION IN THE INSTANT CASE, IT IS OUR CONSIDERED OPINION THAT THE FAILURE OF A BIDDER TO COMPLY WITH THE REQUIREMENT FOR STATING UNIT PRICES IS A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE. SINCE ONLY THE TOTAL BIDS FOR THE TWO ITEMS WERE TO BE CONSIDERED IN DETERMINING THE LOW BID, OMISSION OF THE UNIT PRICES UNDER BOTH ITEMS 1 AND 2 "WOULD NOT RESULT IN AN UNFAIR COMPETITIVE ADVANTAGE TO OTHER BIDDERS BY PERMITTING A METHOD OF CONTRACT PERFORMANCE DIFFERENT FROM THAT CONTEMPLATED BY THE INVITATION OR BY PERMITTING THE BID PRICE TO BE EVALUATED UPON A BASIS NOT COMMON TO ALL BIDS.' THEREFORE, THE REQUIREMENT MUST BE CONSTRUED AS ONE SOLELY FOR THE BENEFIT OF THE GOVERNMENT AND ITS ENFORCEMENT OR WAIVER CONFERS NO RIGHTS UPON BIDDERS. SINCE THE CONTRACT PRICE FOR ITEM 1 MIGHT WELL REQUIRE MODIFICATION IN THE EVENT THE GOVERNMENT EXERCISES ITS RIGHT TO WITHDRAW ANY TELEVISION SETS COVERED THEREUNDER, THE STATEMENT OF A UNIT PRICE FOR EACH SUB-ITEM WOULD BE TO THE GOVERNMENT'S BENEFIT AND PROPERLY SHOULD BE ENFORCED. THE CONTRACTOR DID STATE A UNIT PRICE FOR EACH SUB-ITEM WHICH WHEN MULTIPLIED BY THE NUMBER OF UNITS EQUALS THE TOTAL BID FOR ITEM 1. WHILE NO UNIT PRICE WAS STATED FOR THE ITEM 2 SUB-ITEMS, THIS WAS NOT CONSIDERED A DEVIATION REQUIRING REJECTION OF THE RADIO-TELEVISION BID SINCE REMOVAL OF A PART OF THE MASTER ANTENNA DISTRIBUTION SYSTEM IS NEITHER CONTEMPLATED NOR PROVIDED FOR IN THE CONTRACT.

SINCE ACCEPTANCE OF THE RADIO-TELEVISION CORPORATION BID RESULTED IN A VALID AND BINDING CONTRACT OBLIGATING THE BIDDER TO PERFORM IN ACCORDANCE WITH THE ADVERTISED SPECIFICATIONS AT THE PRICE BID, AND SINCE THE BIDDER GAINED NO COMPETITIVE ADVANTAGE BY REASON OF THE MINOR DEVIATIONS IN ITS BID, THERE IS NO BASIS UPON WHICH OUR OFFICE MAY PROPERLY OBJECT TO THE AWARD.