B-159691, MAR. 6, 1967

B-159691: Mar 6, 1967

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INCORPORATED: REFERENCE IS MADE TO YOUR LETTER DATED JULY 14. BIDS WERE REQUESTED FOR THE FURNISHING OF VARIOUS QUANTITIES OF LUMINESCENT INDICIA DETECTOR MODIFICATION KITS FOR MARK II SINGLE AND TANDEM FACING AND CANCELING MACHINES. ONLY TWO BIDS WERE RECEIVED AS OF THE SCHEDULED BID OPENING DATE. THESE BIDS WERE SUBMITTED BY YOUR COMPANY AND THE NATIONAL CASH REGISTER COMPANY IN THE RESPECTIVE TOTAL AMOUNTS OF $1. THE CONTRACT WAS AWARDED TO THE NATIONAL CASH REGISTER COMPANY FOLLOWING A DETERMINATION THAT YOUR BID SHOULD BE REJECTED AS NONRESPONSIVE. YOUR BID WAS CONSIDERED TO BE NONRESPONSIVE BECAUSE IT WAS ACCOMPANIED BY A LETTER DATED JUNE 16. WHICH APPEARED TO THE POST OFFICE DEPARTMENT TO BE SO AMBIGUOUS THAT IT COULD NOT BE DETERMINED WHETHER YOU INTENDED TO COMPLY WITH ALL OF THE ESSENTIAL REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS IF THE PROPOSED CONTRACT WAS AWARDED TO YOUR COMPANY.

B-159691, MAR. 6, 1967

TO PITNEY-BOWES, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 14, 1966, AND TO SUBSEQUENT CORRESPONDENCE, CONCERNING YOUR PROTEST AGAINST THE REJECTION OF YOUR BID AND AWARD OF A CONTRACT TO THE NATIONAL CASH REGISTER COMPANY PURSUANT TO POST OFFICE DEPARTMENT, BUREAU OF FACILITIES, INVITATION FOR BIDS NO. 1345, ISSUED MAY 13, 1966, AS AMENDED.

BIDS WERE REQUESTED FOR THE FURNISHING OF VARIOUS QUANTITIES OF LUMINESCENT INDICIA DETECTOR MODIFICATION KITS FOR MARK II SINGLE AND TANDEM FACING AND CANCELING MACHINES, CIRCUIT ANALYZERS, SPARE PARTS FOR THE KITS AND CIRCUIT ANALYZERS, AND INSTALLATION OF 19 MODIFICATION KITS FOR TANDEM MARK II FACING AND CANCELING MACHINES AT DESIGNATED POST OFFICES. ONLY TWO BIDS WERE RECEIVED AS OF THE SCHEDULED BID OPENING DATE, JUNE 17, 1966. THESE BIDS WERE SUBMITTED BY YOUR COMPANY AND THE NATIONAL CASH REGISTER COMPANY IN THE RESPECTIVE TOTAL AMOUNTS OF $1,092,505 AND $1,196,858.71.

THE CONTRACT WAS AWARDED TO THE NATIONAL CASH REGISTER COMPANY FOLLOWING A DETERMINATION THAT YOUR BID SHOULD BE REJECTED AS NONRESPONSIVE. YOUR BID WAS CONSIDERED TO BE NONRESPONSIVE BECAUSE IT WAS ACCOMPANIED BY A LETTER DATED JUNE 16, 1966, WHICH APPEARED TO THE POST OFFICE DEPARTMENT TO BE SO AMBIGUOUS THAT IT COULD NOT BE DETERMINED WHETHER YOU INTENDED TO COMPLY WITH ALL OF THE ESSENTIAL REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS IF THE PROPOSED CONTRACT WAS AWARDED TO YOUR COMPANY, AND BECAUSE THE LETTER OTHERWISE APPEARED TO CONTAIN OBJECTIONABLE CONDITIONS. IN A LETTER DATED JULY 19, 1966, YOU WERE ADVISED BY THE POST OFFICE DEPARTMENT THAT YOU BID WAS DEEMED UNRESPONSIVE IN ACCORDANCE WITH SECTION 1-2.404-2, FEDERAL PROCUREMENT REGULATIONS (FPR).

SECTION 1-2.404-2, FPR, PROVIDES IN PART AS FOLLOWS:

"/A)ANY BID WHICH FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION FOR BIDS, SUCH AS SPECIFICATIONS, DELIVERY SCHEDULE, OR PERMISSIBLE ALTERNATES THERETO, SHALL BE REJECTED AS NONRESPONSIVE.

"/B) ORDINARILY, A BID SHALL BE REJECTED WHERE THE BIDDER IMPOSES CONDITIONS WHICH WOULD MODIFY REQUIREMENTS OF THE INVITATION FOR BIDS OR LIMIT HIS LIABILITY TO THE GOVERNMENT SO AS TO GIVE HIM AN ADVANTAGE OVER OTHER BIDDERS. FOR EXAMPLE, BIDS SHALL BE REJECTED IN WHICH THE BIDDER:

"/5) LIMITS RIGHTS OF GOVERNMENT UNDER ANY CONTRACT CLAUSE. HOWEVER, A LOW BIDDER MAY BE REQUESTED TO DELETE OBJECTIONABLE CONDITIONS FROM HIS BID IF THESE CONDITIONS DO NOT GO TO THE SUBSTANCE, AS DISTINGUISHED FROM THE FORM OF THE BID. A CONDITION GOES TO THE SUBSTANCE OF A BID WHERE IT AFFECTS PRICE, QUANTITY, QUALITY, OR DELIVERY OF THE ITEMS OFFERED.'

IN VIEW OF CERTAIN OF YOUR CONTENTIONS, THE FOLLOWING ADDITIONAL PROVISIONS OF THE FPR ARE SET FORTH:

CANCELLATION OF INVITATION AFTER OPENING (1-2.404-1 (FPR) ).

"/A) PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT, AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. EVERY EFFORT SHALL BE MADE TO ANTICIPATE CHANGES IN A REQUIREMENT PRIOR TO THE DATE OF OPENING AND TO NOTIFY ALL PROSPECTIVE BIDDERS OF ANY RESULTING MODIFICATION OR CANCELLATION, THEREBY PERMITTING BIDDERS TO CHANGE THEIR BIDS AND PREVENTING UNNECESSARY EXPOSURE OF BID PRICES. ***.

"/B) INVITATIONS FOR BIDS MAY BE CANCELLED AFTER OPENING BUT PRIOR TO AWARD, AND ALL BIDS REJECTED, WHERE SUCH ACTION IS CONSISTENT WITH SEC. 1- 2.404-1 (A) AND THE CONTRACTING OFFICER DETERMINES IN WRITING THAT CANCELLATION IS IN THE BEST INTEREST OF THE GOVERNMENT FOR REASONS SUCH AS THE FOLLOWING:

"/1) INADEQUATE, AMBIGUOUS, OR OTHERWISE DEFICIENT SPECIFICATIONS WERE CITED IN THE INVITATION FOR BIDS.

"/7)THE BIDS RECEIVED DID NOT PROVIDE COMPETITION WHICH WAS ADEQUATE TO INSURE REASONABLE PRICES.'

MINOR INFORMALITIES OR IRREGULARITIES IN BIDS (1-2.405 (FPR) ).

"A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM AND NOT OF SUBSTANCE OR PERTAINS TO SOME IMMATERIAL OR INCONSEQUENTIAL DEFECT OR VARIATION OF A BID FROM THE EXACT REQUIREMENT OF THE INVITATION FOR BIDS, THE CORRECTION OR WAIVER OF WHICH WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. THE DEFECT OR VARIATION IN THE BID IS IMMATERIAL AND INCONSEQUENTIAL WHEN ITS SIGNIFICANCE AS TO PRICE, QUANTITY, QUALITY, OR DELIVERY IS TRIVIAL OR NEGLIGIBLE WHEN CONTRASTED WITH THE TOTAL COST OR SCOPE OF THE SUPPLIES OR SERVICES BEING PROCURED. THE CONTRACTING OFFICER SHALL EITHER GIVE THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID OR WAIVE SUCH DEFICIENCY, WHICHEVER IS TO THE ADVANTAGE OF THE GOVERNMENT. ***.'

THE LETTER OF JUNE 16, 1966, WHICH ACCOMPANIED YOUR BID, READS AS FOLLOWS:

"ATTACHED IS OUR BID IN RESPONSE TO YOUR INVITATION FOR BID NO. 1345 FOR LUMINESCENT INDICIA DETECTOR MODIFICATION KIT FOR MARK II FACING AND CANCELING MACHINE.

"IN REVIEWING THE SPECIFICATIONS, IN THE LIGHT OF OUR CONSIDERABLE EXPERIENCE WITH THE MARK II FACER-CANCELERS, SEVERAL REQUIREMENTS WERE NOTED WHICH ARE NOT CLEAR, AND WE THEREFORE WISH TO MAKE THE FOLLOWING POINTS, OF WHICH THE SATISFACTORY RESOLUTION IS A CONDITION OF OUR BID.

"1. THE MOST UNCERTAIN FACTOR IN THE CONTRACT IS THE INSTALLATION COST. OUR BID IS BASED ON THE ASSUMPTION THAT NO MORE THAN $1,628 PER UNIT ON THE AVERAGE WILL BE REQUIRED AT THE SITE AND FOR PRIOR TRAINING. WHILE WE DO NOT CONDITION OUR BID ON THE ASSUMPTION THAT WE WILL BE REIMBURSED FOR ANY EXCESS, BECAUSE THIS IS A SMALL PORTION OF THE TOTAL CONTRACT COVERING ONLY NINETEEN KITS, WE CITE THIS AS BEARING UPON THE SATISFACTORY RESOLUTION OF THE MANY POINTS MENTIONED BELOW.

"2. SECTIONS 1.1, 1.4, 3.5, 3.9.6.2, 3.9.6.4 REQUIRE THAT THE CONTRACTOR COMPLETE ALL WORK NECESSARY TO PROVIDE GOOD FUNCTIONAL OPERATING PERFORMANCE, AND SECTION 3.3 STATES THAT THE KIT IS DESIGNED TO BE EASILY INSTALLED WITH A MINIMUM OF MODIFICATIONS.

IT MAY DEVELOP THAT SOME OF THE OLDER MACHINES WILL REQUIRE FURTHER MODIFICATION BEYOND THAT CALLED FOR, OR THE KIT ITSELF MAY HAVE TO BE MODIFIED. WE DO NOT KNOW WHICH OF THE MACHINES IN THE POST OFFICES SELECTED FOR CONTRACTOR INSTALLATION ARE TO BE FITTED WITH THE KITS. MUST ASSUME THAT THE MACHINES SO SELECTED FOR MODIFICATION WILL CONFORM TO THE DRAWINGS FURNISHED US.

"3. SECTION 3.2 DESCRIBES THE KIT AS BEING CAPABLE OF DETECTING LUMINESCENT INDICIA, INCLUDING POSTAGE METER IMPRESSIONS.

WE ARE ASSUMING, FOR THE PURPOSE OF THIS PROPOSAL, THAT TAGGED METER STAMPS WILL NOT BE INCLUDED IN ANY OF THE OPERATIONAL TESTS.

"4. IN ORDER FOR MODIFICATION KIT ACCEPTANCE TESTS TO BE FULLY MET, THE MARK II, ON WHICH THE CONTRACTOR INSTALLED KIT IS TO BE FITTED, MUST BE IN GOOD OPERATING CONDITION. WHILE SECTION 3.10.3 REQUIRES THAT THE CONTRACTOR RESTORE THE MACHINE TO NORMAL OPERATING CONDITION, NO SPECIFICATION COULD BE FOUND DEFINING THIS CONDITION OR, MORE IMPORTANTLY, THE ORIGINAL CONDITION OF THE MACHINE ON WHICH INSTALLATION IS TO BE MADE.

OUR PROPOSAL DOES NOT INCLUDE PUTTING THE MACHINE INTO GOOD OPERATING CONDITION PRIOR TO KIT INSTALLATION, AND NO RESPONSIBILITY CAN BE ASSUMED FOR DELAY OR EXTRA COST IF SUCH WORK IS REQUIRED TO PREPARE THE MACHINE FOR TEST.

"5. SECTION 3.10.8 REQUIRES THE CONTRACTOR TO BE RESPONSIBLE FOR ALL PERMITS, INSPECTIONS, REGULATIONS, ETC., REQUIRED BY GOVERNING AUTHORITY.

IN PREVIOUS INSTALLATIONS IN POSTAL FACILITIES, NO PROBLEMS OF THIS TYPE HAVE BEEN ENCOUNTERED. WE, OF COURSE, CANNOT BE COMPETEL AWARE OF ALL REQUIREMENTS OF THIS NATURE IN ALL OFFICES WHERE THIS EQUIPMENT IS TO BE CONTRACTOR INSTALLED PRIOR TO SUBMISSION OF BID. WE WOULD EXPECT TO BE INFORMED OF ANY UNUSUAL OR EXTRAORDINARY CIRCUMSTANCES ANTICIPATED IN THIS AREA, HAVING A SERIOUS BEARING ON THE TIMELY EXECUTION OF THE CONTRACT. "6. ON THE GENERAL SUBJECT OF PERFORMANCE TESTING OF THE KITS IN THE PLANT, AND PARTICULARLY WITH LIVE MAIL IN THE FIELD, THERE APPEARS TO BE NO CLEAR DEFINITION OF TEST PROCEDURES IN TERMS OF THE ACTUAL CONDITIONS THAT WILL BE EXPERIENCED, IN ORDER TO OBTAIN A 1 PERCENT ERROR RATE.

SECTION 4.2.1 (5) REQUIRES THAT THE ACCEPTABLE LEVEL OF PERFORMANCE BE NO MORE THAN 1 PERCENT ATTRIBUTABLE TO DETECTOR ERROR. SECTION 4.2.5 DEFINES THE CALCULATION FOR ERROR RATE IN OPERATIONAL TESTS.

OUR EXPERIENCE WITH THE MARK II'S HAS REPEATEDLY SHOWN THAT UNDER NORMAL CONDITIONS THE ERRORS CAUSED BY TYPE OF MAIL, VARIATIONS IN MANUAL FEEDING, DOUBLE FEEDING, MISREGISTRATION, CONDITION OF MACHINE, ETC., WILL CAUSE ERRORS, NOT ATTRIBUTABLE TO DETECTION OR RECOGNITION, IN EXCESS OF 1 PERCENT. EXCEPT IN VERY OBVIOUS CASES, WITHOUT EXTENSIVE INSTRUMENTATION IT IS VIRTUALLY IMPOSSIBLE TO DIFFERENTIATE BETWEEN SO-CALLED "MECHANICAL" AND "ELECTRONIC" ERRORS TO THE DEGREE REQUIRED TO MEET THE 1 PERCENT SPECIFICATION.

MOREOVER, AS IN THE PAST, CONSIDERABLE CONFUSION EXISTS OVER WHAT CONSTITUTES AN ERROR. FOR EXAMPLE: HOW FAR OUT OF POSITION MUST AN ADHESIVE STAMP BE IN ORDER FOR IT TO BE CLASSIFIED AS AN ERROR IF IT IS NOT PROPERLY DETECTED ?

THE TEST PROCEDURES, PARTICULARLY WITH LIVE MAIL, SHOULD BE CLARIFIED AND REDUCED TO A PRACTICAL WORKING SYSTEM PRIOR TO MAKING AND EVALUATING TESTS.

"7. SECTION 4.2.3 REQUIRES THAT THE CONTRACTOR "CONDUCT" LIVE MAIL OPERATIONAL TESTS ON CONTRACTOR INSTALLATIONS.

IT IS NOT CLEAR TO WHAT EXTENT THE CONTRACTOR IS TO FURNISH THE LABOR FOR MAIL EXAMINATION DURING SUCH TESTS. DEPENDING UPON THE ACTUAL SYSTEM FOR EXAMINATION, CLASSIFICATION AND LOGGING OF ERRORS AND TOTAL PIECES AS DISCUSSED ABOVE, THE NUMBER OF PERSONNEL REQUIRED TO PERFORM THIS OPERATION MAY VARY CONSIDERABLY. THE NUMBER OF PEOPLE REQUIRED ALSO DEPENDS ON THE INDIVIDUAL POST OFFICE LIMITATION ON HOLDING UP THE MAIL.

WE ARE ASSUMING, FOR PURPOSES OF THIS PROPOSAL, THAT THE BULK OF THE MANUAL LABOR REQUIRED FOR THIS TASK WILL BE PERFORMED BY ASSIGNED POST OFFICE PERSONNEL, AS WAS THE CASE IN MARK II ACCEPTANCE TESTS.

"8. SECTION 4.2.4, LAST PARAGRAPH PROVIDES FOR THE ISSUANCE OF WRITTEN ACCEPTANCE OF INDIVIDUAL DETECTOR KITS TO BE INSTALLED BY THE DEPARTMENT.

SECTION 4.2.3, DEALING WITH KITS TO BE INSTALLED BY THE CONTRACTOR, SHOULD HAVE A SIMILAR ACCEPTANCE PROVISION.

ACCEPTANCE TESTS OF INSTALLATIONS IN THE FIELD SHOULD BE A SEPARATE MATTER.

"9. SECTION 4.2.1 (4) REQUIRES THE CONTRACTOR PROVIDE LUMINESCENT TAGGED SAMPLE MAIL PIECES OF AVAILABLE RED AND GREEN ACCEPT STANDARDS, AS DEFINED IN ANNEX II INSTALLATION MANUAL.

ON PAGES 23 AND 26 OF THE MANUAL ARE FOOTNOTES DEFINING THE ACCEPT STANDARDS FOR REGULAR AND AIR MAIL ENVELOPES. IT IS REQUIRED THAT THESE MEASURE NINETEEN UNITS ON A MODEL 3 PHOSPHOR METER.

THERE IS NO METHOD OUTLINED FOR MAKING SUCH STANDARD ENVELOPES, NOR PROVISION FOR OBTAINING A PHOSPHOR METER.

"10. SECTION 4.2.1 (5) SPECIFIES TESTS TO BE MADE WITH SIMULATED MAIL TEST DECKS TO BE MADE UP PRESUMABLY ACCORDING TO SECTION 1 PAGE 2 ANNEX V OF POD-L-290A (RE) APRIL 30, 1966. THIS SECTION DOES NOT SPECIFY WHAT INDICIA IS TO BE PUT ON THE TEST DECK ENVELOPES UNLESS THEY ARE TO BE CONSTRUED AS BEING "SAMPLE MAIL PIECES" FOR WHICH THE ACCEPT STANDARD IS TO BE USED. THIS MUST BE CLARIFIED.

"11. DUE TO THE UNCERTAINTIES OF INSTALLATION REQUIREMENTS IN THE VARIOUS POST OFFICES, IT HAS NOT BEEN POSSIBLE TO ACCURATELY DETERMINE THE ACTUAL ANTICIPATED COST FOR EACH INSTALLATION AS REQUIRED ON PAGE 3 OF THE INVITATION. THE NUMBERS SHOWN ARE BASED ON THE AVERAGE COST ANTICIPATED UNDER THE CONDITIONS DESCRIBED ABOVE.'

IT IS YOUR CONTENTION THAT THE LETTER OF JUNE 16, 1966, IS NOT AMBIGUOUS AND THAT, IF THE CONTRACTING OFFICER BELIEVED THAT IT WAS AMBIGUOUS, HE SHOULD HAVE REQUESTED A CLARIFICATION OF ITS CONTENTS IN ACCORDANCE WITH SECTION 1-2.404-2, PARAGRAPH (B) (5), FPR. IT IS ALSO YOUR CONTENTION THAT THE LETTER DOES NOT CONTAIN MATERIAL EXCEPTIONS TO THE ADVERTISED SPECIFICATIONS AND THAT ANY APPARENT DEFECTS OR VARIATIONS IN THE BID COULD HAVE BEEN WAIVED BY THE CONTRACTING OFFICER AS MINOR INFORMALITIES OR IRREGULARITIES NOT AFFECTING THE SUBSTANCE OF THE BID, AS PERMITTED UNDER SECTION 1-2.405, FPR. IT IS STATED AS YOUR OPINION THAT THE SIGNIFICANCE OF THE ELEVEN POINTS MADE IN THE LETTER OF JUNE 16, 1966, AS TO PRICE, QUANTITY, QUALITY OR DELIVERY "WAS TRIVIAL OR NEGLIGIBLE WHEN CONTRASTED WITH THE TOTAL COST OF THE MODIFICATION KITS BEING CURED.' IS ALSO ARGUED THAT THE INVITATION FOR BIDS WAS CONFUSING AND UNFAIR TO ANY BIDDER OTHER THAN THE NATIONAL CASH REGISTER COMPANY, WHICH DEVELOPED THE MODIFICATION KIT FOR THE MARK II FACING AND CANCELING MACHINE; AND THAT, IF WE DETERMINE THAT YOUR BID WAS NOT RESPONSIVE, THE CONTRACT WITH THE NATIONAL CASH REGISTER COMPANY SHOULD NEVERTHELESS BE CANCELED AND THE PROCUREMENT READVERTISED ON THE BASIS OF REVISED SPECIFICATIONS SHOWING MORE CLEARLY THE EXACT REQUIREMENTS OF THE GOVERNMENT. YOU SUBMITTED A MEMORANDUM DATED JULY 25, 1966, EXPLAINING THE CONTENTS OF THE LETTER WHICH ACCOMPANIED YOUR BID. WE REQUESTED THE POST OFFICE DEPARTMENT TO CONSIDER THE MEMORANDUM IN CONNECTION WITH THE PREPARATION OF THE DEPARTMENTAL REPORT ON YOUR PROTEST. WE ALSO AGREED TO DISCUSS THE CASE WITH YOUR REPRESENTATIVES AFTER RECEIPT OF THE REPORT. THE REPORT WAS MADE BY LETTER DATED AUGUST 29, 1966, AND A COPY OF THE LETTER WAS FURNISHED TO YOU. YOU SUBMITTED A MEMORANDUM DATED OCTOBER 3, 1966, IN REPLY TO THE DEPARTMENTAL REPORT, AND THE FACTS OF THE CASE WERE DISCUSSED WITH YOUR REPRESENTATIVES IN A CONFERENCE HELD AT OUR OFFICE ON OCTOBER 11, 1966. A WRITTEN STATEMENT WAS PRESENTED DURING THE CONFERENCE AND A SUPPLEMENTAL MEMORANDUM IN SUPPORT OF YOUR PROTEST WAS SUBMITTED BY LETTER DATED OCTOBER 14, 1966.

THE MEMORANDUM OF JULY 25, 1966, REFERS TO THE FACT THAT THE INVITATION FOR BIDS WAS ACCOMPANIED BY 158 DRAWINGS AND VARIOUS DOCUMENTS WHICH HAD TO BE CAREFULLY ANALYZED BY ANY BIDDER. IT IS ALLEGED THAT IT PROVED TO BE IMPOSSIBLE TO ENTER A BID WITHIN THE RELATIVELY SHORT PERIOD OF TIME ALLOWED FOR SUBMISSION OF BIDS UNLESS THE BID WAS ACCOMPANIED BY SOME CLARIFYING REQUEST AS WAS CONTAINED IN THE LETTER OF JUNE 16, 1966. IT IS CONTENDED THAT THE LETTER DOES NOT STATE THAT THE BID IS CONDITIONAL BUT ONLY THAT THE SATISFACTORY RESOLUTION (CLARIFICATION) OF THE ELEVEN POINTS RAISED WAS NECESSARY. THE MEMORANDUM ALSO QUESTIONS THE PROPRIETY OF INCLUDING ANY PERFORMANCE TESTING STANDARDS OR PROCEDURES AT ALL,SINCE THE DETAILED DESIGN AND SPECIFICATIONS FOR THE LUMINESCENT INDICIA DETECTOR MODIFICATION KIT WERE THOSE ENTIRELY OF THE POST OFFICE DEPARTMENT.

AFTER DISCUSSION OF THE ELEVEN POINTS INDIVIDUALLY, THE MEMORANDUM OF JULY 25, 1966, SUGGESTS THAT, IN GENERAL, THE LETTER OF JUNE 16, 1966, CONSTITUTED NO MORE THAN REQUESTS FOR CLARIFICATION DURING THE COURSE OF CONTRACT PERFORMANCE, AND THAT THE LETTER SET FORTH YOUR POSITION IN A MANNER WHICH ANY FAIR AND REASONABLE CONTRACTING OFFICER COULD UNDERSTAND AND ADJUDICATE. IT IS CONTENDED, IN EFFECT,THAT THE QUESTIONS PRESENTED NEED NOT HAVE BEEN RESOLVED BEFORE ACCEPTANCE OF YOUR BID AND THAT THE REQUESTS FOR CLARIFICATION REASONABLY COULD NOT BE REGARDED AS A CONDITION WHICH RENDERED THE BID NONRESPONSIVE TO THE INVITATION FOR BIDS.

THE DEPARTMENTAL REPORT OF AUGUST 29, 1966, FIRST EXPRESSES THE OPINION THAT THE STATEMENT OF ,SATISFACTORY RESOLUTION" CONSTITUTED AN EXPRESS BID QUALIFICATION. THE DEPARTMENT CONSIDERED THAT ANY REQUESTS FOR CLARIFICATION OF THE INVITATION FOR BIDS SHOULD HAVE BEEN PRESENTED, AS REQUIRED BY THE TERMS OF THE INVITATION, BEFORE THE SCHEDULE TIME FOR THE PUBLIC OPENING OF BIDS; AND THAT YOU SHOULD NOT NOW BE PERMITTED TO EXPLAIN OR DISAVOW THE EFFECT OF THE BID QUALIFICATION SINCE THIS WOULD BE TANTAMOUNT TO PERMITTING YOU A SECOND CHANCE TO BID. ALSO, IT WAS REPORTED THAT THE ADVERTISEMENT DID NOT CONTAIN PERFORMANCE REQUIREMENTS AS SUCH BUT DID CONTAIN A QUALITY ASSURANCE PROCEDURE FOR ACCEPTANCE OF THE EQUIPMENT BEING PURCHASED AS MEETING DETAILED ENGINEERING REQUIREMENTS. WE BELIEVE THAT THERE IS NO BASIS FOR YOUR SUGGESTION THAT THE ADVERTISED SPECIFICATIONS SHOULD NOT HAVE INCLUDED ANY PERFORMANCE TESTING OR PROCEDURES BECAUSE THE MODIFICATION KITS WERE REQUIRED TO BE MANUFACTURED IN ACCORDANCE WITH THE GOVERNMENT'S DETAILED DESIGN AND SPECIFICATIONS.

WITH RESPECT TO THE ELEVEN POINTS MADE IN THE LETTER OF JUNE 16, 1966, THE DEPARTMENTAL REPORT INDICATED THAT POINT NO. 1 DOES NOT IN ITSELF CONSTITUTE A BID QUALIFICATION; THAT POINT NO. 2 IS AN EXCEPTION TAKEN TO THE ADVERTISED SPECIFICATIONS; THAT THE FIRST PART OF YOUR POINT NO. 4 APPEARED TO CONSTITUTE AN EXCEPTION; THAT POINT NO. 5 IS SUSCEPTIBLE TO AN INTERPRETATION THAT IT CONSTITUTED AN EXCEPTION; THAT POINTS NOS. 6 AND 7 ARE EXCEPTIONS; THAT NO. 8, WHILE ORIGINALLY BELIEVED TO BE AMBIGUOUS WITH NO SERIOUS EXCEPTION APPARENT, NOW APPEARS TO HAVE BEEN INTENDED AS AN EXCEPTION IN VIEW OF WHAT WAS SAID IN YOUR EXPLANATION OF THAT POINT AT PAGE 9 OF YOUR MEMORANDUM OF JULY 25, 1966; THAT POINT NO. 9 IS AN EXCEPTION; THAT THERE IS NO BASIS FOR THE CONTENTION MADE IN POINT NO. 10; AND THAT YOUR POINT NO. 11 IS SUSCEPTIBLE TO AN INTERPRETATION THAT YOU WERE NOT SUBMITTING A FIRM BID.

IT IS CONTENDED IN THE MATERIAL SUBMITTED TO OUR OFFICE IN OCTOBER 1966 THAT THE POST OFFICE DEPARTMENT HAS TAKEN THE STATEMENT OF "SATISFACTORY RESOLUTION" OUT OF CONTEXT WITH THE PREVIOUS STATEMENT N THE LETTER DATED JUNE 16, 1966, THAT SEVERAL REQUIREMENTS WERE NOTED WHICH ARE NOT CLEAR. IT IS AGAIN ARGUED THAT ONLY CLARIFICATION OF THE SPECIFICATIONS WAS A CONDITION OF YOUR BID AND IT WAS STATED THAT YOU DID NOT RAISE ANY QUESTIONS WHICH THE CONTRACTING OFFICER WOULD NOT HAVE HAD TO DETERMINE AND RESOLVE DURING PERFORMANCE OF THE PROPOSED CONTRACT. YOU STATED THAT IT WOULD BE INCONSISTENT AND ILLOGICAL TO CONSTRUE THE SECOND PARAGRAPH OF THE JUNE 16, 1966, LETTER TO MEAN THAT THE ACCEPTANCE OF YOUR BID WOULD HAVE REQUIRED THE POST OFFICE DEPARTMENT TO CONSTRUE EVERY POINT IN ACCORDANCE WITH YOUR ASSUMPTION OR TO "YOUR SATISFACTION.'

WITH REFERENCE TO POINT NO. 2, YOU STATED THAT IT MUST BE ASSUMED THAT THE MACHINES "WILL CONFORM TO THE DRAWINGS EXACTLY AS WE STATED IN OUR BID.' SUBSEQUENTLY, YOUR REPRESENTATIVE ADMITTED THAT THIS STATEMENT WAS ERRONEOUS BECAUSE NO DRAWINGS OF YOUR MARK II FACING AND CANCELING MACHINES WERE INCLUDED AMONG THE DRAWINGS MADE A PART OF THE GOVERNMENT'S INVITATION FOR BIDS. WE ARE ADVISED THAT YOU INTENDED TO SAY THAT YOU WERE ASSUMING THAT THE MACHINES SELECTED FOR KIT INSTALLATIONS IN THE FIELD WOULD CONFORM TO YOU "LAST MACHINES," OR THE NEWER MODELS OF SUCH MACHINES.

WITH REFERENCE TO YOUR POINT NO. 5, YOU STATED THAT THE POST OFFICE DEPARTMENT'S ANSWER THAT IT WOULD COMMUNICATE EXTRAORDINARY CIRCUMSTANCES OF WHICH IT HAD KNOWLEDGE WAS EXACTLY WHAT YOU ,WANTED TO KNOW" AND "IS ALL WE COULD EXPECT.'

YOU QUESTIONED THE POST OFFICE DEPARTMENT'S ANSWER TO POINT NO. 6, PARTICULARLY FROM THE STANDPOINT THAT, WHILE THE TECHNICAL PERSONNEL OF THE DEPARTMENT MIGHT BE "ALERT" TO ERRORS, THE CONTRACTOR CERTAINLY WOULD NOT KNOW WHICH TYPES OF ERRORS WOULD BE EXCLUDED IN DETERMINING WHETHER THE EQUIPMENT MET THE ACCEPTABLE PERFORMANCE LEVEL.

WITH REFERENCE TO POINT NO. 7, YOU FURNISHED EXCERPTS FROM CERTAIN OF YOUR PREVIOUS CONTRACTS WITH THE POST OFFICE DEPARTMENT, CONCERNING THE FURNISHING OF LABOR IN THE PERFORMANCE OF TESTS. YOU CONTENDED THAT THE DEPARTMENT DID NOT STRICTLY ENFORCE THOSE CONTRACT PROVISIONS AND IT WAS THEREFORE QUESTIONABLE WHETHER IN THIS CASE THE DEPARTMENT INTENDED TO ENFORCE THE REQUIREMENT OF PARAGRAPH 4.2.3 OF THE ADVERTISED SPECIFICATIONS THAT THE CONTRACTOR FURNISH "ALL LABOR" REQUIRED FOR THE TESTING OF CONTRACTOR INSTALLED MODIFICATION KITS.

WITH REFERENCE TO POINT NO. 8, YOU CONTENDED THAT THERE IS NOTHING IN YOUR MEMORANDUM OF JULY 25, 1966, TO SHOW THAT YOU WERE OBJECTING TO TWO TESTS OF EQUIPMENT TO BE INSTALLED AT THE SELECTED 19 POST OFFICES.

WITH REFERENCE TO POINT NO. 9, YOU STATED THAT THE NEED FOR CLARIFICATION IN REGARD TO THE MAKING OF STANDARD ENVELOPES AND THE NEED FOR AN ACCURATE DESCRIPTION OF THE MEANING OF "19 PHOSPHOR UNITS" STILL REMAIN. IT WAS ARGUED THAT THERE IS NO BASIS FOR THE DEPARTMENTAL STATEMENT THAT YOU WERE UNWILLING TO COMPLY WITH A REQUIREMENT OF THE ADVERTISED SPECIFICATIONS.

CONCERNING THE QUESTION AS TO THE AVAILABILITY OF A MODEL 3 PHOSPHOR METER, IT WAS STATED THAT YOU HAVE ONE OF THOSE METERS IN YOUR POSSESSION WHICH MUST BE RETURNED TO THE POST OFFICE DEPARTMENT. YOU EXPRESSED THE VIEW THAT THE MAKING OF A CHINESE COPY OF THE METER WOULD, AT BEST, INVOLVE AN UNCERTAIN PROCEDURE. YOU SUGGESTED THAT, IF IT WAS INTENDED THAT A SUCCESSFUL BIDDER COULD NOT USE ONE OF THE DEPARTMENT'S METERS, THE SPECIFICATIONS SHOULD HAVE SO PROVIDED, SINCE NO BIDDER OTHER THAN THE NATIONAL CASH REGISTER COMPANY COULD HAVE BEEN EXPECTED TO OWN OR TO BE ABLE READILY TO PRODUCE A PHOSPHOR METER OF THE REQUIRED TYPE. THE MODEL 3 PHOSPHOR METER ALLEGEDLY HAD BEEN DEVELOPED BY THE NATIONAL CASH REGISTER COMPANY UNDER CONTRACT WITH THE POST OFFICE DEPARTMENT.

WITH REFERENCE TO POINT NO. 10, AFTER DISCUSSION OF THE PROCEDURES INVOLVED, YOU RECOGNIZED THE POSSIBILITY THAT THE SETTING PROCEDURE ACTUALLY FIXES THE BORDERLINE RECOGNITION LEVEL AT SOME POINT BELOW THE 19 PHOSPHOR UNIT LEVEL. YOU ALSO REFERRED TO YOUR POINT NO. 10 AS BEING ANOTHER EXAMPLE OF WHAT YOU CONSIDER TO BE OF RELATIVELY MINOR IMPORTANCE WHEN A BIDDER REQUESTS A CLARIFICATION OF CERTAIN PARTS OF THE ADVERTISED SPECIFICATIONS IN A LETTER ACCOMPANYING HIS BID.

WITH REFERENCE TO POINT NO. 11, YOU STATED THAT YOUR BID IS A FIRM PROPOSAL AND WAS SO STATED IN PARAGRAPH 1 OF YOUR JUNE 16, 1966, LETTER. YOU ALSO INDICATED THAT IT IS DIFFICULT FOR YOU TO UNDERSTAND HOW ANY ESTIMATE OF ANTICIPATED COST COULD POSSIBLY SUGGEST AN UNFIRM BID.

YOU CONTENDED THAT THE LETTER OF JUNE 16, 1966, DID NOT CONTAIN ANY EXCEPTIONS WHICH AFFECTED THE PRICE, QUALITY, QUANTITY, OR DELIVERY OF THE OFFERED EQUIPMENT; THAT ONLY YOUR POINTS NOS. 9 AND 10 COULD REMOTELY BE CONSTRUED AS RELATING TO QUALITY; THAT ONLY A PART OF YOUR POINT NO. 4 COULD HAVE AFFECTED PRICE; AND THAT THE ASSUMPTIONS MADE IN POINTS NOS. 2, 5, 6 AND 7 DID NOT AFFECT PRICE BECAUSE EXCESS INSTALLATION COSTS WERE EXPRESSLY EXCLUDED FROM THE BID PRICE BY THE STATEMENT MADE IN YOUR POINT NO. 1.

THE FIRST PARAGRAPH OF THE LETTER DATED JUNE 16, 1966, MERELY REFERS TO YOUR ATTACHED SIGNED BID AND PROVIDES NO BASIS FOR DETERMINING WHETHER THE REMAINING PARAGRAPHS OF THE LETTER CONTAINED AMBIGUOUS LANGUAGE OR UNACCEPTABLE BID QUALIFICATIONS.

IN OUR OPINION, THE SECOND PARAGRAPH OF THE LETTER WOULD NORMALLY BE FOR CONSIDERATION AS MEANING THAT YOUR BID WAS CONDITIONED UPON THE RESOLUTION OF PARTICULAR QUESTIONS ON A BASIS WHICH WOULD BE SATISFACTORY TO YOUR COMPANY REGARDLESS OF THE PROVISIONS OF SECTION 3.9.6.7 OF THE ADVERTISED SPECIFICATIONS WHICH PROVIDES IN PART THAT "SHOULD ANY QUESTIONS ARISE AFTER AWARD OF THE CONTRACT, CONCERNING THE EXACT MEANING OF THE SPECIFICATIONS AND DRAWINGS, THE CONTRACTOR SHALL PROVIDE IMMEDIATE WRITTEN NOTICE TO THE CONTRACTING OFFICER FOR INTERPRETATION.'

WE BELIEVE THAT, IF YOU DID NOT INTEND THAT THE LETTER SHOULD BE SO CONSTRUED, IT SHOULD HAVE BEEN CLEARLY INDICATED THAT, BY USING THE TERM "SATISFACTORY RESOLUTION," YOU PROPOSED ONLY TO RESERVE THE RIGHT WHICH ANY CONTRACTOR WOULD HAVE HAD TO TAKE EXCEPTION TO AN INTERPRETATION OF THE CONTRACT SPECIFICATIONS AS MADE BY THE CONTRACTING OFFICER DURING THE CONTRACT PERFORMANCE PERIOD.

ALTHOUGH YOU CITED YOUR POINT NO. 1 AS BEARING UPON THE SATISFACTORY RESOLUTION OF THE REMAINING POINTS, WE CONSIDER THAT THE FULL IMPORT OF THE EXCESS COST DISCLAIMER IS NOT SUFFICIENTLY CLEAR TO JUSTIFY A CONCLUSION THAT IT WAS MEANT TO TAKE PRECEDENCE OVER THE SPECIFIC ASSUMPTIONS AND CONDITIONS OF THE REMAINING POINTS. THIS VIEW OF THE MATTER APPEARS TO BE REQUIRED UNDER THE RULE OF CONSTRUCTION THAT GENERAL PROVISIONS OF A WRITTEN DOCUMENT ARE TO BE GIVEN A RESTRICTED MEANING IF THEY ARE OR APPEAR TO BE IN CONFLICT WITH THE MORE SPECIFIC PROVISIONS OF THE SAME DOCUMENT.

YOUR POINTS NOS. 1 AND 11 DO NOT APPEAR TO HAVE CONSTITUTED EXCEPTIONS TAKEN TO THE ADVERTISED SPECIFICATIONS OR TO SUGGEST THAT YOU WERE SUBMITTING AN UNFIRM BID.

YOUR POINT NO. 2 APPEARS TO HAVE CONSTITUTED AN EXCEPTION TAKEN TO THE ADVERTISED SPECIFICATIONS. YOU ERRONEOUSLY ASSUMED THAT DRAWINGS OF YOUR MARK II FACING AND CANCELING MACHINES HAD BEEN FURNISHED WITH THE GOVERNMENT'S INVITATION FOR BIDS AND YOUR BID WAS, IN EFFECT, CONDITIONED ON THE BASIS OF LIMITING YOUR RESPONSIBILITY FOR COMPLETE PERFORMANCE IN THE MATTER OF KIT INSTALLATIONS IF ANY OF THE POST OFFICE MACHINES INVOLVED WERE DIFFERENT IN MATERIAL RESPECTS FROM YOUR MORE RECENT MODELS OF MARK II FACING AND CANCELING MACHINES.

YOUR POINT NO. 3 APPEARS SIMILARLY TO HAVE CONSTITUTED AN EXCEPTION. HOWEVER, WE ARE ADVISED BY THE POST OFFICE DEPARTMENT THAT THE ASSUMPTION MADE IN POINT NO. 3 WAS CORRECT AND IT IS OBVIOUS THAT SUCH POINT COULD NOT HAVE SERVED AS A BASIS FOR REJECTION OF YOUR BID.

YOUR POINT NO. 4 DOES NOT APPEAR TO HAVE CONSTITUTED AN EXCEPTION SINCE THE BASIC CONDITION OR ASSUMPTION CONTAINED IN THAT POINT IS NOT INCONSISTENT WITH THE PROVISIONS OF SECTION 3.10.3 OF THE ADVERTISED SPECIFICATIONS AND YOU DID NOT REQUEST A CLARIFICATION OF THE TERM "NORMAL OPERATING CONDITION," BUT MERELY STATED AS A FACT THAT NO SPECIFICATION COULD BE FOUND DEFINING SUCH CONDITION OR THE ORIGINAL CONDITION OF MACHINES ON WHICH THE CONTRACTOR WAS TO INSTALL THE LUMINESCENT INDICIA DETECTOR MODIFICATION KITS.

YOUR POINT NO. 5 RECOGNIZES THE FACT THAT THE ADVERTISED SPECIFICATIONS REQUIRE THE CONTRACTOR TO BE RESPONSIBLE FOR OBTAINING ANY NECESSARY PERMITS, LICENSES, ETC., AND WE DOUBT THAT THERE WAS ANY INTENTION TO SHIFT ANY PART OF THAT RESPONSIBILITY TO THE GOVERNMENT. HOWEVER, YOUR POINT NO. 5 IS SUSCEPTIBLE TO AN INTERPRETATION THAT YOU INTENDED TO IMPOSE A CONDITION UNDER WHICH THE GOVERNMENT MIGHT HAVE BEEN SUBJECTED TO LIABILITY FOR DELAYS IN CONTRACT PERFORMANCE RESULTING FROM ITS FAILURE TO COMMUNICATE ANY UNUSUAL OR EXTRAORDINARY CIRCUMSTANCES OF WHICH IT HAD KNOWLEDGE, REGARDING THE MATTER OF OBTAINING PERMITS AND LICENSES FOR THE PERFORMANCE OF INSTALLATION WORK AT THE DESIGNATED POST OFFICES. REGARD TO YOUR POINT NO. 6, PARAGRAPH 4.2.3 (5) OF THE ADVERTISED SPECIFICATIONS STATES IN PART THAT "ERRORS THAT CANNOT BE ATTRIBUTED TO A SPECIFIC CAUSE OTHER THAN DETECTOR ERROR, SHALL BE ATTRIBUTED TO DETECTOR ERROR.' ALTHOUGH THE POST OFFICE DEPARTMENT TAKES THE POSITION THAT CERTAIN OF YOUR STATEMENTS IN POINT NO. 6 ARE TO THE EFFECT THAT THE TEST REQUIREMENT IS IMPRACTICAL AND CANNOT BE MET, AND THAT YOU WERE UNWILLING TO MEET SUCH REQUIREMENT, IT APPEARS THAT YOU WERE PRIMARILY INTERESTED IN ASCERTAINING BEFORE TESTING WITH LIVE MAIL WHAT THE DEPARTMENT CONSIDERED TO BE RECOGNITION ERRORS WHICH CLEARLY WOULD NOT BE ATTRIBUTED TO SO- CALLED DETECTOR ERRORS. IT IS A MATTER OF SOME DOUBT WHETHER YOUR SUGGESTION THAT THE TEST PROCEDURES BE CLARIFIED AND REDUCED TO A PRACTICAL WORKING SYSTEM PRIOR TO MAKING AND EVALUATING TESTS CONSTITUTED AN EXCEPTION TO THE EXACT REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS.

YOUR POINT NO. 7 APPEARS TO HAVE CONSTITUTED AN EXPRESS BID QUALIFICATION. IN OUR OPINION, REGARDLESS OF WHATEVER ASSISTANCE WAS AFFORDED TO YOU IN THE PAST, YOU WERE NOT JUSTIFIED IN ASSUMING, SO FAR AS YOUR PROPOSAL WAS CONCERNED, THAT THE BULK OF THE MANUAL LABOR REQUIRED FOR TESTING PURPOSES AT THE 19 POST OFFICES WOULD BE PERFORMED BY ASSIGNED POST OFFICE PERSONNEL.

YOUR POINT NO. 8 DOES NOT APPEAR TO HAVE CONSTITUTED A MATERIAL EXCEPTION TO THE ADVERTISED SPECIFICATIONS. ALSO, IN OUR OPINION, YOUR MEMORANDUM OF JULY 25, 1966, DOES NOT INDICATE THAT YOU WERE OBJECTING TO TWO TESTS, ONE AT YOUR PLANT, AND ANOTHER IN THE FIELD, ON THE KITS WHICH THE CONTRACTOR WAS REQUIRED TO INSTALL.

YOUR POINT NO. 9 APPEARS ON ITS FACE TO CONSTITUTE AN EXCEPTION TAKEN TO THE ADVERTISED SPECIFICATIONS. HOWEVER, IN VIEW OF YOUR CONSIDERABLE AMOUNT OF EXPERIENCE IN THE DEVELOPMENT OF POSTAL MACHINERY, IT SEEMS UNLIKELY THAT YOU WOULD HAVE OBJECTED IF THE POST OFFICE DEPARTMENT DECLINED TO DETERMINE THE METHOD OF PREPARING STANDARD TEST DECK ENVELOPES OR REFUSED TO PERMIT YOU TO USE A GOVERNMENT-OWNED PHOSPHOR METER DURING THE TESTS AT YOUR PLANT.

YOUR POINT NO. 10 REQUESTED A CLARIFICATION OF THE SPECIFICATIONS TO SHOW WHAT INDICIA WAS TO BE USED ON THE TEST DECK ENVELOPES. THE POST OFFICE DEPARTMENT CONSIDERS THAT THE REFERENCED SPECIFICATION IS ADEQUATE AS WRITTEN AND IT IS POSSIBLE THAT YOU WOULD HAVE INSISTED ON THE RECEIPT OF ADDITIONAL INFORMATION IN THE MATTER BEFORE PROCEEDING WITH THE PREPARATION OF THE TEST DECKS FOR MAKING TESTS OF YOUR PILOT MODEL AND OTHER MANUFACTURED LUMINESCENT INDICIA DETECTOR MODIFICATION KITS. IN OUR OPINION, YOUR POINT NO. 10 MAY BE REGARDED AS AN EXCEPTION TAKEN TO THE ADVERTISED SPECIFICATIONS.

AS YOUR KNOW, THE POST OFFICE DEPARTMENT REQUESTED AN OPPORTUNITY TO SUBMIT A SUPPLEMENTAL REPORT ON YOUR PROTEST. A SUPPLEMENTAL REPORT WAS FURNISHED BY LETTER DATED JANUARY 30, 1967, WHICH STATES IN PART AS FOLLOWS:

"DURING THE CONFERENCE HELD IN YOUR OFFICE DURING THE MONTH OF DECEMBER, THE POINTS AND CONTENTIONS MADE BY PITNEY-BOWES IN ITS VARIOUS MEMORANDA AND LETTERS WERE DISCUSSED AS WAS OUR ADMINISTRATIVE REPLY TO YOU OF AUGUST 29, 1966.

"AFTER GIVING THE MATTER FURTHER CONSIDERATION, WE HAVE DECIDED THAT ESSENTIALLY WE HAVE NOTHING TO ADD TO WHAT WE HAVE ALREADY STATED IN THE ADMINISTRATIVE REPLY OF AUGUST 29 AND DURING THE CONFERENCE.

"WE BELIEVE THAT BY ITS LETTER OF JUNE 16, 1966, PITNEY-BOWES QUALIFIED ITS BID IN A NUMBER OF VITAL RESPECTS. EVEN IF IT WERE DETERMINED THAT PITNEY-BOWES DID NOT INTEND TO QUALIFY, AND HAD NOT QUALIFIED ITS BID, AT THE VERY LEAST THE PITNEY-BOWES' LETTER CAUSED UNCERTAINTY TO ARISE AS TO WHAT EXACTLY WOULD BE ITS OBLIGATIONS UNDER THE CONTRACT AND AS TO EXACTLY WHAT THIS DEPARTMENT'S RIGHTS WOULD BE UNDER THE CONTRACT. THIS UNCERTAINTY WOULD HAVE BEEN HIGHLY UNDESIRABLE. IT COULD EASILY HAVE LED TO DISPUTES AND THE ULTIMATE RESULT COULD HAVE BEEN THE DEPARTMENT WOULD NOT HAVE OBTAINED THE EQUIPMENT IT DESIRED.

"WE DO NOT BELIEVE THAT IT WOULD HAVE BEEN PROPER FOR THIS DEPARTMENT TO HAVE INQUIRED OF PITNEY-BOWES AS TO EXACTLY WHAT EFFECT PITNEY-BOWES INTENDED SHOULD BE GIVEN TO ITS LETTER OF JUNE 16. WE BELIEVE SUCH AN INQUIRY WOULD HAVE PRESENTED PITNEY-BOWES WITH AN OPPORTUNITY TO MAKE ITS BID RESPONSIVE AND, HENCE, IN EFFECT WOULD HAVE GIVEN IT "TWO BITES AT THE APPLE.' IN THIS CONNECTION SEE DIGEST OF DECISION NOS. B-157163, DATED DECEMBER 16, 1965, AND B-158639, DATED APRIL 20, 1966 * * *. WE ALSO WISH TO REITERATE THAT, AS POINTED OUT DURING THE CONFERENCE, THE TESTS CONCERNING PREVIOUS PROCUREMENTS MENTIONED IN PITNEY-BOWES' LETTER OF OCTOBER 14, 1966, WERE DIFFERENT FROM THAT PRESCRIBED IN THE PROCUREMENT UNDER CONSIDERATION. IT IS ALSO OUR VIEW THAT THE QUALIFICATIONS AND EXCEPTIONS TAKEN BY PITNEY-BOWES WERE DELIBERATELY TAKEN AND AFFECT PRICE AND QUALITY AND, HENCE, WERE NOT OF THE TYPE THE DEPARTMENT COULD PROPERLY WAIVE OR ASK THE BIDDER TO DELETE PURSUANT TO FPR 1 2.414-2 (B) (5).'

THE PROVISIONS OF SECTIONS 1-2.404-2 AND 1-2.405, FPR, ARE SUBSTANTIALLY IN ACCORDANCE WITH THE VIEWS EXPRESSED BY OUR OFFICE IN VARIOUS CASES TO THE EFFECT THAT A BIDDER MAY NOT BE PERMITTED TO CHANGE HIS BID AFTER OPENING, AND THAT CONTRACTING OFFICERS ARE AUTHORIZED TO WAIVE ONLY INCONSEQUENTIAL OR IMMATERIAL DEFECTS OR VARIATIONS IN BID. IT IS AN ESTABLISHED RULE WITH RESPECT TO FORMAL COMPETITIVE PROCUREMENT BY GOVERNMENTAL AGENCIES THAT THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. 36 COMP. GEN. 536, 38 ID. 508. IN VIEW THEREOF, THE AUTHORITY TO WAIVE DEFECTS OR VARIATIONS IN BID MUST BE LIMITED TO THE WAIVER OF MINOR DEFECTS OR VARIATIONS IN BID WHICH DO NOT MATERIALLY AFFECT THE SUBSTANCE OF THE BID, AS DISTINGUISHED FROM THE FORM OF THE BID. THERE IS NO AUTHORITY FOR WAIVING AS A MINOR INFORMALITY OR IRREGULARITY IN BID MATERIAL EXCEPTIONS TO SPECIFICATIONS IMPOSED BY BIDDERS. NEITHER IS THERE ANY AUTHORITY TO WAIVE CONDITIONS IN A BID WHICH RESERVE RIGHTS AND IMMUNITIES FROM RESPONSIBILITY NOT EXTENDED TO ALL BIDDERS IF IT CLEARLY APPEARS THAT SUCH RESERVATIONS MATERIALLY AFFECT THE SUBSTANCE OF THE BID, AS DISTINGUISHED FROM THE FORM OF THE BID. AS INDICATED IN 35 COMP. GEN. 684, 38 ID. 253, AND 39 ID. 259, A BID WHICH LIMITS RIGHTS OF THE GOVERNMENT UNDER ANY CLAUSE OF THE PROPOSED CONTRACT MUST BE REJECTED AS NONRESPONSIVE EXCEPT WHERE THERE IS ONLY A REMOTE POSSIBILITY THAT THE OBJECTIONABLE CONDITION OR CONDITIONS WILL REQUIRE AN ADJUSTMENT IN THE CONTRACT PRICE OR RESULT IN ANY OTHER ADDED COST FOR THE PROCUREMENT INVOLVED.

WHEN A BIDDER SUBMITS A LETTER WITH HIS BID, WHICH DISCUSSES THE REQUIREMENTS OF THE INVITATION FOR BIDS, HE IS TAKING CERTAIN RISKS BUT ANY SUCH LETTER MUST BE GIVEN A REASONABLE INTERPRETATION AND APPLICATION IN ORDER TO JUSTIFY A REJECTION OF THE BID ON THE GROUND THAT IT IS NOT RESPONSIVE. IN THIS CASE, THE LETTER APPEARS TO BE AMBIGUOUS IN CERTAIN RESPECTS AND IT COULD BE INTERPRETED AS MEANING THAT YOU INTENDED TO TAKE EXCEPTIONS TO THE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS. THE ASSUMPTIONS MADE IN YOUR POINTS NOS. 3, 4 AND 8 DO NOT APPEAR TO BE MATERIAL AND WE ALSO DOUBT THE MATERIALITY OF YOUR POINT NO. 6. HOWEVER, THE STATEMENTS MADE IN YOUR POINTS NOS. 2, 5, 7, 9 AND 10 SEEM TO HAVE CONSTITUTED IN THEIR ENTIRELY A MATERIAL EXCEPTION WHICH COULD NOT HAVE BEEN WAIVED AS A MERE INFORMALITY OR IRREGULARITY IN BID. AT LEAST, IN OUR OPINION, YOUR POINTS NO. 2 AND 7 COULD HAVE AFFECTED THE TOTAL COST OF THE PROCUREMENT BY MORE THAN A MINIMAL AMOUNT. IN THIS CONNECTION, OUR DECISION, B-156607, MAY 27, 1965, DISCUSSES WHAT MIGHT BE REGARDED AS MINIMAL SO FAR AS THE EFFECTS OF BIDDING DEVIATIONS ON THE BID PRICE IS CONCERNED. THE DECISION INDICATED THAT, WHILE IN SOME CASES A DIFFERENCE OF $100 OR $200 MIGHT BE REGARDED AS MINIMAL IN A DETERMINATION OF WHETHER A BID QUALIFICATION IS MATERIAL, WE WOULD NOT BE INCLINED IN THE ORDINARY CASE TO CONSIDER A POSSIBLE DEVIATION OF $1,000 OR MORE AS TRIVIAL OR INCONSEQUENTIAL EVEN WHERE THE BID UNDER CONSIDERATION EXCEEDS $250,000. ALTHOUGH YOUR BID WAS ABOUT FOUR TIMES SUCH AMOUNT, WE BELIEVE THAT IT WOULD NOT HAVE BEEN PROPER FOR THE POST OFFICE DEPARTMENT TO HAVE CONSIDERED THE VARIOUS CONDITIONS OF YOUR BID AS HAVING CONSTITUTED A MINOR IRREGULARITY OF A TYPE WHICH COULD BE WAIVED WHEN MAKING THE CONTRACT AWARD.

PARAGRAPH 1-2.404 (B) (5), FPR, DOES NOT SPECIFICALLY RELATE TO AMBIGUOUS BIDS. HOWEVER, IT REASONABLY COULD BE APPLIED IN THE CASE OF AMBIGUOUS STATEMENTS MADE IN A BID IF DETERMINED THAT UNDER VARIOUS INTERPRETATIONS THE AMBIGUITIES DID NOT GO TO THE SUBSTANCE, AS DISTINGUISHED FROM THE FORM OF THE BID. THAT IS NOT THE SITUATION IN THIS CASE AND WE SEE NO BASIS UPON WHICH THE POST OFFICE DEPARTMENT WOULD HAVE BEEN JUSTIFIED IN REQUESTING EITHER A CLARIFICATION OF THE AMBIGUOUS STATEMENTS FOUND IN YOUR LETTER OF JUNE 16, 1966, OR THAT YOU WITHDRAW THE LETTER.

WITH RESPECT, GENERALLY, TO THE QUESTION WHETHER IT WOULD BE PROPER TO REQUEST A BIDDER TO CLARIFY AMBIGUOUS STATEMENTS IN HIS BID, THE FOLLOWING COMMENTS WERE MADE IN 43 COMP. GEN. 817:

"IN OUR VIEW, IT IS AN ESSENTIAL OF A VALID BID OR OFFER THAT IT BE SUFFICIENTLY DEFINITE TO ENABLE THE OFFEREE TO ACCEPT IT WITH CONFIDENCE THAT THE CONTRACT SO MADE CAN BE INTERPRETED AND ENFORCED WITHOUT RESORT TO EXTRANEOUS EVIDENCE. IN THE CASE OF PRIVATE PARTIES, AN AMBIGUOUS OFFER MAY OF COURSE BE CLARIFIED OR EVEN CHANGED BY FURTHER COMMUNICATIONS WHICH MAY THEN BECOME A PART OF THE CONTRACT FINALLY REACHED. IN THE CASE OF THE GOVERNMENT, HOWEVER, WHERE THE CONTRACTING PROCESS IS GOVERNED BY THE STATUTORY AND REGULATORY PROVISIONS FOR FORMAL ADVERTISING AND COMPETITIVE BIDDING, WE BELIEVE THAT IT IS IMPROPER TO PERMIT A BIDDER TO CLARIFY OR EXPLAIN BY SUPPLEMENTARY STATEMENTS A BID WHICH, AS SUBMITTED, IS SO UNCLEAR IN ITS STATEMENT OF THE IMPORTANT ELEMENT OF PRICE AS TO LEAVE SUBSTANTIAL DOUBT AS TO THE RIGHTS AND OBLIGATIONS WHICH WOULD ARISE BY ACCEPTING IT. IN THE PECULIAR SITUATION HERE PRESENTED, WHERE A BID IS READILY SUSCEPTIBLE OF BEING INTERPRETED AS OFFERING EITHER ONE OR TWO PRICES SHOWN ON ITS FACE, ONE OF WHICH WOULD BE THE LOWEST BID WHILE THE OTHER WOULD NOT, WE BELIEVE THAT IT WOULD BE UNFAIR TO THE OTHER BIDDER OR BIDDERS AFFECTED TO PERMIT THE BIDDER WHO CREATED SUCH AMBIGUITY TO ELECT WHICH PRICE IT SHOULD ATTEMPT TO SUPPORT.'

ALTHOUGH YOU HAVE QUESTIONED THE RELEVANCY OF A SIMILAR DECISION WHICH WAS CITED BY THE POST OFFICE DEPARTMENT, WHAT WAS SAID IN 43 COMP. GEN. 817, REGARDING REQUESTS FOR CLARIFICATION OF AMBIGUOUS STATEMENTS IN BIDS, IS EQUALLY APPLICABLE TO A SITUATION WHERE, AS HERE, AN APPARENTLY AMBIGUOUS BID HAS BEEN SUBMITTED AND, UNDER ONE REASONABLE INTERPRETATION, IT IS FOUND TO CONTAIN BID QUALIFICATIONS WHICH CANNOT BE REGARDED AS IMMATERIAL AND SUBJECT TO WAIVER UNDER THE PROVISIONS OF SECTION 1-2.405, FPR.

REGARDLESS OF YOUR ACTUAL INTENT, WE MUST CONCLUDE IN THE PARTICULAR CIRCUMSTANCES THAT YOUR BID WAS PROPERLY CONSIDERED BY THE POST OFFICE DEPARTMENT TO BE NONRESPONSIVE TO THE INVITATION FOR BIDS IN CERTAIN MATERIAL RESPECTS, BASED UPON CONSIDERATION OF THE POSSIBLE INTERPRETATIONS OF THE AMBIGUOUS STATEMENTS IN YOUR LETTER OF JUNE 16, 1966. ALTHOUGH YOUR BID PRICE WAS LOWER THAN THAT OF THE NATIONAL CASH REGISTER COMPANY, AND THE NATIONAL CASH REGISTER COMPANY MAY HAVE HAD SOME ADVANTAGE OVER OTHER BIDDERS AS THE RESULT OF HAVING DEVELOPED THE LUMINESCENT INDICIA DETECTOR MODIFICATION KIT UNDER A PREVIOUS CONTRACT WITH THE POST OFFICE DEPARTMENT, WE FIND NO BASIS FOR RECOMMENDING TO THE DEPARTMENT THAT THE AWARD MADE ON INVITATION NO. 1345 BE CANCELED AND THAT THE UNDELIVERED PORTION OF THE CONTRACT ITEMS BE READVERTISED FOR PROCUREMENT UNDER REVISED SPECIFICATIONS. IT APPEARS THAT THE SPECIFICATIONS USED IN THE CASE WERE ADEQUATE AND IT IS ALSO APPARENT THAT THE MATTER REFERRED TO IN YOUR POINT NO. 3 DID NOT AFFECT EITHER YOUR BID PRICE OR THAT OF THE NATIONAL CASH REGISTER COMPANY, OR DISCOURAGE BIDDING BY OTHER FIRMS.