B-160294, DEC. 9, 1966

B-160294: Dec 9, 1966

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WE HAVE CONSIDERED YOUR PROTEST AGAINST THE REJECTION OF YOUR BID SUBMITTED PURSUANT TO INVITATION FOR BIDS NO. 251 849-66. BIDS WERE REQUESTED ON TWO LOTS OF MAGNETIC DRIVE METERS FOR CERTAIN VESSELS UNDER CONSTRUCTION AT THE PUGET SOUND NAVAL SHIPYARD. FIVE BIDS WERE RECEIVED AND OPENED. THE LOWEST BID WAS REJECTED BECAUSE IT WAS INCOMPLETE AND NONRESPONSIVE ON SEVERAL COUNTS. YOUR BID WAS THE LOWEST BUT IT WAS CONSIDERED AS NONRESPONSIVE BECAUSE THE PRICES QUOTED WERE FOR DELIVERY. DESTINATION WILL BE REJECTED AS NON-RESPONSIVE.'. THE NEXT LOWEST OF THOSE THREE BIDS WAS REJECTED BECAUSE IT WAS ACCOMPANIED BY A TECHNICAL PROPOSAL WHICH WAS FOUND BY THE NAVY TO CONTAIN MATERIAL EXCEPTIONS TO THE ADVERTISED SPECIFICATIONS.

B-160294, DEC. 9, 1966

TO BROOKS INSTRUMENT DIVISION, EMERSON ELECTRIC COMPANY:

IN ACCORDANCE WITH A REQUEST OF THE HONORABLE RICHARD S. SCHWEIKER, MEMBER OF CONGRESS, WE HAVE CONSIDERED YOUR PROTEST AGAINST THE REJECTION OF YOUR BID SUBMITTED PURSUANT TO INVITATION FOR BIDS NO. 251 849-66, ISSUED JUNE 27, 1966, BY THE PUGET SOUND NAVAL SHIPYARD, BREMERTON, WASHINGTON.

BIDS WERE REQUESTED ON TWO LOTS OF MAGNETIC DRIVE METERS FOR CERTAIN VESSELS UNDER CONSTRUCTION AT THE PUGET SOUND NAVAL SHIPYARD, TOGETHER WITH RELATED DRAWINGS, MANUALS, WEIGHT AND TEST REPORTS, AND PROVISIONING AND TECHNICAL DOCUMENTATION. FIVE BIDS WERE RECEIVED AND OPENED, AS SCHEDULED, ON AUGUST 19, 1966.

THE LOWEST BID WAS REJECTED BECAUSE IT WAS INCOMPLETE AND NONRESPONSIVE ON SEVERAL COUNTS. OF THE NEXT THREE BIDS, YOUR BID WAS THE LOWEST BUT IT WAS CONSIDERED AS NONRESPONSIVE BECAUSE THE PRICES QUOTED WERE FOR DELIVERY, F.O.B. HATFIELD, PENNSYLVANIA, WHEREAS THE BIDDING SCHEDULE CALLED FOR THE QUOTATION OF PRICES FOR DELIVERY, F.O.B. PUGET SOUND NAVAL SHIPYARD, BREMERTON, WASHINGTON, AND STATED THAT "BIDS SUBMITTED ON A BASIS OTHER THAN F.O.B. DESTINATION WILL BE REJECTED AS NON-RESPONSIVE.' THE NEXT LOWEST OF THOSE THREE BIDS WAS REJECTED BECAUSE IT WAS ACCOMPANIED BY A TECHNICAL PROPOSAL WHICH WAS FOUND BY THE NAVY TO CONTAIN MATERIAL EXCEPTIONS TO THE ADVERTISED SPECIFICATIONS. THE BID OF THE HERSEY-SPARLING METER COMPANY WAS NEXT IN LINE FOR CONSIDERATION AND THE CONTRACT WAS AWARDED TO THAT FIRM AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER.

YOU ALLEGE THAT THE FAILURE TO QUOTE ON AN F.O.B. DESTINATION BASIS, AS REQUIRED BY THE INVITATION FOR BIDS, WAS DUE TO INADVERTENCE, AND THAT THE TRANSPORTATION COSTS WOULD NOT HAVE BEEN ANYWHERE NEAR THE DIFFERENCE BETWEEN THE AMOUNT OF YOUR BID AND THAT OF THE NEXT LOW BID. IN SUCH CIRCUMSTANCES IT IS YOUR POSITION THAT THE OVERSIGHT SHOULD HAVE BEEN WAIVED AS A MINOR INFORMALITY.

THE DEPARTMENT OF THE NAVY REPORTS THAT, SINCE IT WAS CONSIDERED YOUR BID WAS NONRESPONSIVE DUE TO THE F.O.B. POINT, THE TECHNICAL DATA SUBMITTED WITH YOUR BID WAS NOT EVALUATED TO DETERMINE WHETHER THE EQUIPMENT OFFERED COMPLIED WITH SPECIFICATION REQUIREMENTS. IN ADDITION TO THE BID'S BEING CONDITIONED UPON FURNISHING EQUIPMENT AS DESCRIBED IN THE TECHNICAL DATA, THE BID WAS FURTHER CONDITIONED UPON THE WAIVER OF VIBRATION TESTS. THIS CONNECTION IT WAS STATED IN YOUR LETTER DATED JULY 22, 1966, WHICH ACCOMPANIED THE BID, AS FOLLOWS:

"SINCE METERS OF THIS DESIGN HAVE BEEN SUPPLIED PREVIOUSLY AND ARE DESCRIBED IN NAV SHIPS 0955-001-5000 FOR SHIPBOARD FUEL MEASUREMENT SYSTEMS, BUREAU OF SHIPS CONTRACT NOBS4721, SHIP APPLICABLE AO-105, AO 107, AO-108, AO (JUMBO) FLEET OILERS WE ASK THAT THE VIBRATION TESTS (PAGE 8) BE WAIVED. THE COSTS OF THESE VIBRATION TESTS ARE NOT INCLUDED IN OUR PROPOSAL.'

ALTHOUGH AS STATED ABOVE THE TECHNICAL DATA WAS NOT EVALUATED, THE CONTRACTING OFFICER REPORTS THAT HE DID HAVE INFORMATION WHICH INDICATED THAT THE EQUIPMENT OFFERED EITHER DID NOT COMPLY WITH SPECIFICATION REQUIREMENTS OR THAT AN ERROR WAS MADE IN THE PRICES QUOTED. THIS WAS BASED UPON THE FACT THAT YOU WERE AWARDED A CONTRACT IN JULY 1962 FOR 8 INCH AND 10 INCH METERS WHICH WERE SIMILAR IF NOT IDENTICAL TO THE METERS COVERED BY THE INSTANT INVITATION AND THAT IN 1962 THE 8 INCH METERS WERE PRICED AT $6,130 EACH FOR THE FOUR REQUIRED, WHEREAS YOUR PRESENT PRICE WAS $2,200 EACH FOR THE 12 REQUIRED. THE SAME COMPARATIVE PRICE DIFFERENCE WAS APPARENT FOR THE 10 INCH METERS WHERE SIX WERE PRICED AT $5,350 EACH IN 1962 AND 12 AT $1,990 EACH ON THE PRESENT PROCUREMENT. IS REPORTED THAT NO PRACTICAL EXPLANATION WAS AVAILABLE TO ACCOUNT FOR THESE LARGE PRICE REDUCTIONS.

OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION, THAT, TO INSURE THE GOVERNMENT THE BENEFITS OF FREE AND OPEN COMPETITION, IT IS MANDATORY THAT AWARDS OF CONTRACTS FOR REQUIRED SERVICES OR SUPPLIES BE MADE UPON THE BASIS OF THE ADVERTISED SPECIFICATIONS SUBMITTED FOR COMPETITION, INCLUDING DELIVERY AND OTHER PERFORMANCE REQUIREMENTS, AND THAT ONLY INCONSEQUENTIAL OR IMMATERIAL DEFECTS OR VARIATIONS WHICH DO NOT AFFECT THE PRICE, QUANTITY, OR QUALITY OF THE ARTICLES OFFERED MAY BE WAIVED. DECISION OF AUGUST 7, 1961, B-146451, IT WAS STATED:

"OUR OFFICE HAS HELD THAT A DEVIATION FROM ADVERTISED REQUIREMENTS IS MATERIAL IF IT AFFECTS EITHER THE PRICE, QUANTITY OR QUALITY OF THE ARTICLES OFFERED. SEE 30 COMP. GEN. 179; 31 ID. 660; AND 33 ID. 421. UNDER THE FACTS STATED BY YOU, YOUR OFFER TO FURNISH THE EQUIPMENT ON AN F.O.B. ORIGIN BASIS, IF IT HAD BEEN ACCEPTED, WOULD HAVE VARIED THE OBLIGATION INTENDED TO BE ASSUMED BY A PROSPECTIVE CONTRACTOR UNDER THE INVITATION. IN OTHER WORDS, UNDER SUCH A CONTRACT YOU COULD HAVE SATISFIED THE DELIVERY REQUIREMENT BY MERELY HANDING IT TO A COMMON CARRIER AT SOUTH NORWALK, CONNECTICUT, THUS RELIEVING YOUR COMPANY OF ANY FURTHER LIABILITY FOR LOSS OR DAMAGE EN ROUTE, AND AT THE SAME TIME PLACE UPON THE GOVERNMENT THE BURDEN AND EXPENSE INCIDENT TO THE DETERMINATION OF RESPONSIBILITY FOR POSSIBLE LOSS OR DAMAGE IN TRANSIT. THE CHANGES IN CONTRACT TERMS WHICH WOULD HAVE RESULTED FROM ACCEPTANCE OF YOUR BID MUST BE REGARDED AS AFFECTING THE CONTRACT PRICE. IN THE CIRCUMSTANCES OUTLINED BY YOU IT WOULD APPEAR THAT YOUR BID WAS PROPERLY REJECTED AS BEING NONRESPONSIVE.'

SINCE IT MUST BE CONSIDERED THAT THE EXCEPTION TAKEN AS TO PLACE OF DELIVERY AFFECTED THE SUBSTANCE OF YOUR BID, THE CONTRACTING OFFICER HAD NO ALTERNATIVE BUT TO ACT AS SPECIFICALLY PROVIDED IN THE INVITATION FOR BIDS AND REJECT THE BID AS BEING NONRESPONSIVE.

IN CONNECTION WITH YOUR PROTEST, REFERENCE WAS MADE TO THE POSSIBILITY THAT THE NAVY MIGHT DETERMINE, IN VIEW OF YOUR ADVANTAGEOUS PRICES, THAT IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE INVITATION AND READVERTISE FORBIDS. THE CANCELLATION OF AN ADVERTISEMENT FOR BIDS AFTER BIDS HAVE BEEN OPENED HAS ALWAYS BEEN CONSIDERED A SERIOUS MATTER AND IT HAS BEEN CONSISTENTLY HELD THAT AN INVITATION FOR BIDS SHOULD NOT BE CANCELED AFTER OPENING OF BIDS UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND READVERTISE. SEE SECTION 1-2.404-1, ARMED SERVICES PROCUREMENT REGULATION. IT APPEARS FROM THE FACTS REPORTED THAT THE CONTRACTING OFFICER EXERCISED REASONABLE JUDGMENT IN THIS CASE WHEN HE MADE THE CONTRACT AWARD TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. ACCORDINGLY, WE FIND NO BASIS FOR TAKING EXCEPTION TO THE CONTRACT AS AWARDED TO THE HERSEY-SPARLING METER COMPANY AND YOUR PROTEST IN THE MATTER MUST BE DENIED.