B-159560, OCTOBER 7, 1966, 46 COMP. GEN. 275

B-159560: Oct 7, 1966

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AN AWARD TO A BIDDER WHO BEFORE BID OPENING WAS GIVEN PERMISSION TO USE OTHER EQUIPMENT THAN THAT SPECIFIED IN THE INVITATION IS AN AWARD UNDER CHANGED SPECIFICATIONS IN FAVOR OF ONE BIDDER IN CONTRAVENTION OF THE COMPETITIVE BIDDING SYSTEM GIVING ALL PERSONS THE RIGHT TO COMPETE ON A COMMON BASIS AND. 1966: REFERENCE IS MADE TO TWO LETTERS DATED JULY 26. THE REPORT WAS SUBMITTED IN CONNECTION WITH TWO RELATED PROTESTS FILED IN THIS OFFICE BY THE POTOMAC DISPOSAL COMPANY (POTOMAC) AGAINST THE AWARD OF THE CONTRACT. THREE BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED ON JUNE 14. 613.60 AWARD WAS MADE TO THE LOW BIDDER ON JUNE 29. POTOMAC CONTENDED THAT THE AWARD TO UNITED WAS INVALID BECAUSE UNITED'S BID OF "N.C.

B-159560, OCTOBER 7, 1966, 46 COMP. GEN. 275

CONTRACTS - AWARDS - CANCELLATION - SPECIFICATION CHANGES. AN AWARD TO A BIDDER WHO BEFORE BID OPENING WAS GIVEN PERMISSION TO USE OTHER EQUIPMENT THAN THAT SPECIFIED IN THE INVITATION IS AN AWARD UNDER CHANGED SPECIFICATIONS IN FAVOR OF ONE BIDDER IN CONTRAVENTION OF THE COMPETITIVE BIDDING SYSTEM GIVING ALL PERSONS THE RIGHT TO COMPETE ON A COMMON BASIS AND, THEREFORE, SUCH AN AWARD CANNOT RESULT IN A VALID AND ENFORCEABLE CONTRACT AND THE TRANSACTION SHOULD BE CANCELED.

TO THE SECRETARY OF THE NAVY, OCTOBER 7, 1966:

REFERENCE IS MADE TO TWO LETTERS DATED JULY 26, AND SEPTEMBER 16, 1966, FROM THE CONTRACT PROCEDURES BRANCH, NAVAL FACILITIES ENGINEERING COMMAND (NFEC), RELATIVE TO THE AWARD OF CONTRACT NO. NBY 75720 TO THE UNITED DISPOSAL CORPORATION (UNITED) FOR TRASH REMOVAL SERVICES AT THE DAVID TAYLOR MODEL BASIN, CARDEROCK, MARYLAND. THE REPORT WAS SUBMITTED IN CONNECTION WITH TWO RELATED PROTESTS FILED IN THIS OFFICE BY THE POTOMAC DISPOSAL COMPANY (POTOMAC) AGAINST THE AWARD OF THE CONTRACT.

THREE BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED ON JUNE 14, 1966, AS FOLLOWS:

BIDDER AMOUNT OF BID

UNITED DISPOSAL CORPORATION $13,140.00

POTOMAC DISPOSAL COMPANY 13,311.85

SQUARE DEAL TRUCKING, INCORPORATED 13,613.60

AWARD WAS MADE TO THE LOW BIDDER ON JUNE 29, 1966.

IN THE LETTER OF JUNE 24, 1966, POTOMAC CONTENDED THAT THE AWARD TO UNITED WAS INVALID BECAUSE UNITED'S BID OF "N.C;, (NO CHARGE) UNDER ITEMS NOS. 5 AND 6 OF THE INVITATION---THE GARBAGE CONTAINER STEAM CLEANING ITEMS---WAS NONRESPONSIVE AS BEING CONTRARY TO PARAGRAPH 2/B) OF THE INVITATION WHICH PROVIDED THAT "UNIT PRICES FOR ALL BID ITEMS SHALL BE SHOWN UNLESS BIDS UPON LESS THAN ALL BID ITEMS ARE EXPRESSLY PERMITTED;, THIS CONTENTION IS WITHOUT MERIT. WE HAVE HELD ON NUMEROUS OCCASIONS THAT A "NO CHARGE" BID IS NOT A FAILURE TO BID, SUCH AS IS CONTEMPLATED BY THE ABOVE-QUOTED PARAGRAPH OF THE INVITATION, BUT RATHER IS A ZERO BID THAT HAS THE FORCE AND EFFECT OF LEGALLY BINDING THE BIDDER TO PERFORM THE WORK IF IT IS AWARDED THE CONTRACT. 44 COMP. GEN. 221. CF. 41 ID. 412; ID. 721; 43 ID. 579; BRUCE CONSTRUCTION CORPORATION ET AL. V. THE UNITED STATES, 163 CT. CL. 97.

HOWEVER, WE CONCLUDE THAT THE AWARD OF THE CONTRACT TO UNITED WAS IMPROPER ON OTHER GROUNDS.

PARAGRAPH 3.2.1, GENERAL PARAGRAPHS, OF THE INVITATION SPECIFICATIONS, PROVIDES THAT THE CONTRACTOR SHALL INSTALL ONE 30 CUBIC YARD CONTAINER AT PICKUP POINT 22, BUILDING NO. 9. PARAGRAPH 3.3 DEFINES THE TERM "CONTAINERS" AS FOLLOWS:

3.3 CONTAINERS.---CONTAINERS OF THE SIZES AND QUANTITIES LISTED ABOVE SCHEDULE SHAL BE FURNISHED BY, AND REMAIN THE PROPERTY OF THE CONTRACTOR. THEY SHALL BE THE COVERED SANITARY TANK TYPE, AND BE OF A HEIGHT WHICH WILL FACILITATE LOADING FROM THE SIDE OR TOP FROM A NORMAL STANDING POSITION, CONTAINERS SHALL HAVE SIDE OPENING DOORS WITH FULL OPENINGS, CONSTRUCTED SO AS TO PREVENT SPILLAGE OF LIQUIDS AND SCATTERING OF CONTENTS. CONTAINERS SHALL BE OF A TYPE AFFORDING MECHANICAL HANDLING. CONTAINERS SHALL BE SUBJECT TO INSPECTION AND ACCEPTANCE BY THE OIC OR HIS REPRESENTATIVE, ANY MECHANICAL OR APPEARANCE DEFECTS SHALL BE CORRECTED WITHIN THIRTY DAYS AFTER EFFECTIVE DATE OF THIS CONTRACT AND MAINTAINED IN ACCEPTABLE CONDITION THROUGHOUT CONTRACT PERIOD.

IN ITS PROTEST LETTER OF AUGUST 4, 1966, POTOMAC ALLEGED THAT UNITED IS BEING "* * * PERMITTED TO SUPPLY AND KEEP IN PLACE AN OPEN TRUCK, INSTEAD OF THE SPECIFIED 30 CUBIC YARD CONTAINER", AND THAT UNITED "* * * MUST HAVE HAD PRIOR KNOWLEDGE WHEN IT BID THAT IT WOULD BE PERMITTED TO MAKE SUCH (A) SUBSTITUTION;, IN THAT REGARD, NFEC IN ITS SUPPLEMENTAL REPORT OF SEPTEMBER 16, 1966, ADVISED THAT BEFORE BID OPENING, UNITED WAS INFORMALLY ADVISED BY PERSONNEL AT THE MODEL BASIN, THAT THE ABOVE-DESCRIBED TRUCK WOULD MEET THE CONTRACTUAL REQUIREMENTS OF SECTION 3.3 IF THE OTHER PROVISIONS WERE COMPLIED WITH.

AN INVESTIGATION AFTER AWARD OF THE CONTRACT CONDUCTED BY PERSONNEL AT THE MODEL BASIN REVEALED THAT THE CONTRACTOR WAS IN FACT USING A TRUCK IN LIEU OF A CONTAINER, BUT THAT IT DID NOT FULLY COMPLY WITH THE ADMINISTRATIVE INTERPRETATION OF THE SPECIFICATIONS. THE CONTRACTOR WAS THEREUPON ISSUED A WRITTEN ORDER REQUIRING HIM TO MODIFY THE TRUCK TO ALLEGEDLY CONFORM WITH SECTION 3.3, WHICH WAS DONE. IN CONJUNCTION WITH THIS THE PARTIES TENTATIVELY NEGOTIATED A DEDUCTIVE CREDIT, TAKING INTO CONSIDERATION THE EXTENT OF THE DEVIATION AND THE TIME OF USE INVOLVED.

IN THE LETTER OF SEPTEMBER 16, 1966, IT IS STATED THAT THE CONTRACTING OFFICER CONSIDERS THAT THE USE OF A 30 CUBIC YARD CONTAINER MOUNTED ON WHEELS IN THE FORM OF A TRUCK COMPLIED WITH THE TERMS OF THE CONTRACT AND THAT THE CONTRACTOR DERIVED NO FINANCIAL GAIN BY USING A TRUCK INSTEAD OF A CONTAINER, AND THAT IN THE OPINION OF THE COMMAND THE ACTIONS TAKEN WITH REGARD TO THE AWARD OF THE CONTRACT WERE IN ACCORDANCE WITH GOVERNING PROCEDURES AND REGULATIONS, AND WERE PROPER IN EVERY RESPECT.

WE ARE UNABLE, HOWEVER, TO AGREE WITH THIS CONCLUSION.

THIS PROCUREMENT IS GOVERNED, IN GENERAL, BY 10 U.S.C.2305, WHICH, IN PART, ADMONISHES PROCUREMENT OFFICIALS THAT:

(A) * * * THE SPECIFICATIONS AND INVITATIONS FOR BIDS SHALL PERMIT SUCH FREE AND FULL COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF THE PROPERTY AND SERVICES NEEDED BY THE AGENCY CONCERNED.

(C) AWARDS SHALL BE MADE WITH REASONABLE PROMPTNESS BY GIVING WRITTEN NOTICE TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.

A DEVIATION FROM ADVERTISED SPECIFICATION REQUIREMENTS MAY NOT BE WAIVED IF IT GOES TO THE SUBSTANCE OF THE BID OR WORKS AN INJUSTICE TO OTHER BIDDERS. PRESTEX, INC. V. UNITED STATES, 162 CT. CL. 620. THIS OFFICE HAS DEFINED A SUBSTANTIAL DEVIATION AS ONE WHICH AFFECTS EITHER THE PRICE, QUANTITY, OR QUALITY OF THE ARTICLE OR SERVICE OFFERED. 30 COMP. GEN. 179.

WE THINK IT IS CLEAR THAT UNDER ANY LOGICAL INTERPRETATION OF THE WORD "CONTAINER" AS DEFINED IN SECTION 3.3, QUOTED ABOVE, THE USE OF A MODIFIED TRUCK SUCH AS NFEC PERSONNEL ADVISED THE CONTRACTOR WOULD BE ACCEPTABLE, DID NOT CONFORM TO THE SPECIFICATIONS.

ONE OF THE CHIEF PURPOSES OF THE STATUTES REQUIRING THE USE OF THE COMPETITIVE BIDDING SYSTEM IS TO GIVE ALL PERSONS AN EQUAL RIGHT TO COMPETE FOR GOVERNMENT CONTRACTS, THAT IS, TO COMPETE ON A COMMON BASIS. UNITED STATES V. BROOKRIDGE FARM, 111 F. 2D 461. COMPETING BIDDERS HAVE A RIGHT TO ASSUME THAT SPECIFICATION REQUIREMENTS CONTAINED IN THE INVITATION ARE ESSENTIAL TO THE GOVERNMENT AND THAT THOSE REQUIREMENTS WILL NOT BE WAIVED BY THE CONTRACTING AGENCY IN FAVOR OF ONE BIDDER SINCE TO DO SO WOULD PLACE THE BIDDERS ON AN UNEQUAL FOOTING. WHERE A CHANGE IN THE SPECIFICATIONS IS SOUGHT TO BE IMPOSED OR AGREED TO AS THE RESULT SOLELY OF ACTION BY ONE OR BOTH OF THE PARTIES, AWARD ON THE BASIS OF THE CHANGED SPECIFICATIONS CONTRAVENES THE ESTABLISHED PRINCIPLES OF COMPETITIVE BIDDING. 40 COMP. GEN. 55. IN PRESTEX, SUPRA, THE COURT RULED THAT THE CONTRACT THERE AWARDED WAS INVALID BECAUSE IT WAS AWARDED ON OTHER THAN THE ADVERTISED SPECIFICATIONS.

THE FACT THAT THE BID IN THIS CASE APPEARED VALID ON ITS FACE IS OF NO MATERIALITY SINCE IT IS ESTABLISHED THAT UNITED'S BID WAS SUBMITTED, AND ACCEPTED UPON THE BASIS OF USING THE ABOVE-DESCRIBED TRUCK, INSTEAD OF A CONTAINER.

HENCE, WE ARE COMPELLED TO CONCLUDE THAT UNITED'S BID DID NOT CONFORM TO THE INVITATION FOR BIDS AND THAT THE DEVIATION FROM THE SPECICATIONS GRANTED TO UNITED HAD A MATERIAL BEARING, ADVANTAGEOUS TO IT, ON PRICE AND QUALITY. THE AWARD TO UNITED DID NOT RESULT IN A VALID AND ENFORCEABLE CONTRACT AND WE MUST, THEREFORE, ADVISE YOU THAT THE CONTRACT SHOULD BE CANCELED.

SINCE NFEC HAS INDICATED THAT THE MODIFIED TRUCK ACTUALLY MEETS THE MINIMUM NEEDS OF THE GOVERNMENT, IT MAY BE OBSERVED THAT IF IN FACT THE ACTUAL REQUIREMENT OF THE PROCURING ACTIVITY COULD BE MET BY SUCH EQUIPMENT, THE SPECIFICATIONS SHOULD BE REVISED AND THE PROCUREMENT READVERTISED.