B-161929, AUG. 28, 1967

B-161929, AUG. 28, 1967

BIDS - DEVIATIONS - OMISSION DECISION TO CONSOLIDATED DIESEL ELECTRIC CO., PROTESTING AWARD TO ADT INDUSTRIES, DIVISION OF UNITEC CORP., BY NAVY FOR MOBILE ELECTRIC POWER PLANTS AND SUPPORTING EQUIPMENT. LOW BIDDER WHO FAILED TO STATE PRICE FOR ONE ITEM CALLING FOR PROVISIONING DOCUMENTATION ON BASIS THAT IT WAS OPTION RATHER THAN FIRM ITEM MUST HAVE PROTEST DENIED SINCE NAVY INDICATES THAT IT WAS A FIRM ITEM AND ALL 7 OTHER BIDDERS INTERPRETED INVITATION AS REQUIRING PRICE. THEREFORE SINCE PROTESTANT'S INTERPRETATION IS NOT REASONABLE THERE IS NO BASIS FOR DISAGREEMENT WITH CONTRACTING AGENCY'S POSITION. WITH RESPECT TO CONTENTION THAT BID SHOULD HAVE BEEN EVALUATED WITHOUT ITEM AND THEN PRICE NEGOTIATED SUCH PROCEDURE WOULD BE VIOLATIVE OF PRINCIPLE THAT FAIRNESS TO ALL BIDDERS REQUIRES EVALUATION ON SAME TERMS.

TO CONSOLIDATED DIESEL ELECTRIC COMPANY:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO ADT INDUSTRIES, DIVISION OF UNITEC CORPORATION, PURSUANT TO INVITATION FOR BIDS NO. N00600-67-B-1129, ISSUED BY THE NAVY PURCHASING OFFICE.

THE SUBJECT INVITATION WAS ISSUED ON MAY 17, 1967, BASED ON A REQUISITION OF THE NAVAL AIR SYSTEMS COMMAND FOR A BASIC QUANTITY OF 441 NC-8A MOBILE ELECTRIC POWER PLANTS, RELATED SUPPORTING EQUIPMENT AND DATA, AND OPTION ITEMS. EIGHT BIDS WERE RECEIVED AND OPENED ON JUNE 28, 1967, AS SCHEDULED. YOUR FIRM (CONDEC) WAS THE APPARENT LOW BIDDER AT A TOTAL PRICE OF $5,570,911, AND ADT WAS THE SECOND LOWEST AT A TOTAL PRICE OF $5,687,095. HOWEVER, THE CONTRACTING OFFICER DETERMINED YOUR BID WAS NONRESPONSIVE BECAUSE YOU HAD FAILED TO STATE A PRICE FOR ITEM 8. THE CONTRACTING OFFICER REPORTS THAT HE INTERPRETED YOUR BID AS AN OFFER TO NEGOTIATE THE PRICE OF ITEM 8 AT A LATER DATE. UPON CHECKING WITH THE REQUIRING ACTIVITY HE WAS ADVISED THAT THE REQUIREMENT FOR THE PROVISIONING DOCUMENTATION CALLED FOR IN ITEM 8 WAS FIRM. THEREFORE, HE AWARDED A CONTRACT TO ADT ON JUNE 30, 1967.

THE SUBJECT INVITATION CONSISTS OF 15 LINE ITEMS UNDER SECTION A, SUPPLIES OR SERVICES. MOST ITEMS SPECIFY THE QUANTITY TO BE BID ON AND CALL FOR A UNIT AND TOTAL PRICE. WITH RESPECT TO ITEMS 6, 7, 9, 10, 13, AND 15 THE IFB PROVIDES THAT THE QUANTITY AND/OR UNIT PRICE ARE "TO BE DETERMINED LATER.' ITEM 8 CALLS FOR A BID PRICE ON ONE LOT OF "PROVISIONING DATA/SERVICES" WHICH IS DESCRIBED IN SECTION B, DESCRIPTION OR SPECIFICATIONS, AS FOLLOWS: "ITEM 8. PROVISIONING DATA AND/OR SERVICES SHALL BE FURNISHED IN ACCORDANCE WITH SPECIFICATION WEAPONS REQUIREMENTS WR-1,- AND THE PROVISIONING POLICY STATEMENT INCORPORATED HEREIN.' YOUR BID, IN THE "AMOUNT" COLUMN OPPOSITE ITEM 8, ARE THE WORDS, "INCLUDED IN ITEM 6.' ITEM 6,"REPAIR PARTS AND SPARES," IS ONE OF THE "TO BE DETERMINED LATER" ITEMS, AND IS DESCRIBED IN SECTION B AS FOLLOWS: "ITEM 6. THE GOVERNMENT MAY REQUIRE THE CONTRACTOR TO FURNISH SUPPLY ITEMS (SPARE AND REPAIR PARTS) UNDER ITEM 6 IN ACCORDANCE WITH THE REQUIREMENTS OF WR-1, DATED 15 SEPTEMBER 1960, AND AMENDMENT 1 THERETO DATED 5 JANUARY 1962. THIS OPTION WILL BE EXERCISED BY WRITTEN NOTICE, FROM THE ORDERING ACTIVITY TO THE CONTRACTOR. SUCH OPTION EXERCISE WILL BE REFLECTED IN A UNILATERAL MODIFICATION TO THE CONTRACT EXECUTED BY THE CONTRACTING OFFICER. IN THE EVENT THE OPTION IS EXERCISED, (I) THE TIME REQUIREMENTS OF WR-1 WHICH ARE BASED UPON THE DATE OF THE CONTRACT AWARD WILL BE COMPUTED FROM THE DATE OF THE OPTION EXERCISE IN LIEU OF THE DATE OF THE CONTRACT AWARD; (II) THE DOLLAR LIMITATION WILL BE ESTABLISHED BY THE DOCUMENT WHICH EXERCISES THE OPTION; AND (III) EXCEPT AS NOTED ABOVE, THE REMAINDER OF THESE SECTION B SCHEDULE PROVISIONS RELATING TO PROVISIONING AND SUPPORT DOCUMENTS SHALL BE APPLICABLE.'

TWO OTHER DOCUMENTS IN THE "BID PACKAGE" ARE OF PARTICULAR RELEVANCE TO YOUR PROTEST. THEY ARE (1) THE CONTRACT DATA REQUIREMENT LIST SPECIFICATION (PP. 13-14 OF SCHEDULE B) AND DD FORM 1423, WITH THE SAME TITLE, AND (2) THE PROVISIONING POLICY STATEMENT REFERRED TO IN THE SECTION B DESCRIPTION OF ITEM 8. DD FORM 1423 CONTAINS A LISTING OF EIGHT ITEMS OF DATA REQUIRED TO BE DELIVERED UNDER THE CONTRACT, INCLUDING DELIVERY DATES FOR FIRST SUBMISSION OF THE DATA AND SPACES (BLOCKS 25 AND 26) FOR LISTING THE PRICE GROUP AND TOTAL ESTIMATED PRICE FOR EACH ITEM OF DATA. THE PROVISIONING POLICY STATEMENT PRESCRIBES CERTAIN PROCEDURES, TERMS, AND CONDITIONS APPLICABLE TO THE PROVISIONING DOCUMENTATION TO BE PROCURED UNDER THE CONTRACT PURSUANT TO ITEM 8.

YOUR BASIC CONTENTION IS THAT THE ONLY REASONABLE INTERPRETATION TO BE ASCRIBED TO THE INVITATION PROVISIONS RELATING TO ITEM 8 IS THAT THE PERFORMANCE REQUIRED THEREUNDER IS TO BE AT A LATER DATE FOR A PRICE TO BE NEGOTIATED AND, THEREFORE, YOUR BID WAS INCORRECTLY DETERMINED NONRESPONSIVE FOR FAILING TO STATE A PRICE OPPOSITE ITEM 8. THIS INTERPRETATION IS REQUIRED, YOU SAY, IN ORDER FOR ALL APPLICABLE PROVISIONS OF THE IFB TO BE CONSISTENT WITH EACH OTHER. IN THIS CONNECTION, YOU POINT OUT THAT THE LOGISTIC PLAN CONTEMPLATED BY VARIOUS SPECIFIED PROVISIONS OF THE IFB INDICATES THAT THE REPAIR AND SPARE PARTS CALLED FOR UNDER ITEM 6 WILL NOT BE NEEDED FOR SUPPORT UNTIL SOMETIME FAR IN THE FUTURE AND ITEM 8 WILL THEN BE A TOOL IN SELECTING THE PARTS TO BE PURCHASED. AS SUPPORT FOR THIS ARGUMENT YOU NOTE THAT NAVY SPECIFICATION WR-1 IS MADE APPLICABLE TO BOTH ITEMS BY THE TERMS OF THE IFB, AND THAT WR -1 TIES TOGETHER THE PROCUREMENT OF SPARES, REPAIR PARTS AND PROVISIONING DOCUMENTATION. ITEM 2 OF PART II OF WR-1, WHICH YOU HAVE CITED, CONTEMPLATES NEGOTIATION OF A PROVISIONING POLICY STATEMENT WITH THE CONTRACTOR WITHIN 30 DAYS AFTER AWARD OF CONTRACT AND FURTHER PROVIDES THAT SUCH STATEMENT SHALL SET FORTH THE GENERAL PROVISIONING POLICY UNDER WHICH PROVISIONING IS TO BE ACCOMPLISHED AND THE TIME SCHEDULE FOR SUBMISSION OF PROVISIONING DOCUMENTATION TOGETHER WITH THE CONTEMPLATED METHOD OF DELIVERY OF SUPPLY ITEMS.

AS A FURTHER INDICATION THAT A FIRM FIXED-PRICE WAS NOT CONTEMPLATED UNDER ITEM 8, YOU CONTEND THERE IS NO DELIVERY DATE FOR THE PROVISIONING DOCUMENTATION STATED IN THE IFB AND THERE WILL BE NONE UNTIL SOMETIME AFTER THE CONTRACT AWARD WHEN THE PROVISIONS OF WR-1 ARE MADE APPLICABLE BY EXERCISE OF THE OPTION FOR ITEM 6 AND NEGOTIATION THEREUNDER OF DELIVERY DATES FOR SUPPLIES AND PROVISIONING DOCUMENTATION. YOU CONTEND THAT THE LACK OF A DELIVERY DATE FOR ITEM 8 IS NOT CURED BY THE PROVISIONING POLICY STATEMENT ATTACHED TO THE BID SET AS THAT DOCUMENT IS NOT TO BE A PART OF THE RESULTANT CONTRACT. YOU CITE SECTION J, "SUMMARY OF CONTENTS," IN THIS CONNECTION AND POINT OUT THAT ALTHOUGH THE STATEMENT WAS LISTED THEREUNDER IT WAS NOT MARKED BY AN ASTERISK TO INDICATE IT WOULD BE PART OF THE CONTRACT. YOU THEREFORE CONCLUDE THAT IT WAS FURNISHED ONLY TO ASSIST IN PREPARATION OF DD FORM 1423 AND WOULD BE ADDED TO THE CONTRACT BY UNILATERAL MODIFICATION ONCE THE GOVERNMENT EXERCISED ITS OPTION UNDER ITEM 6.

YOU ALSO RELY ON SECTION D, PARAGRAPH 7, OF THE PROVISIONING POLICY STATEMENT AS FURTHER INDICATION THAT THE REQUIREMENT FOR ITEM 8 WAS INTENDED TO BE LATER NEGOTIATED. THIS CLAUSE, WHICH WAS MADE APPLICABLE BY THE NAVY'S CHECKING IT, PROVIDES AS FOLLOWS:

"/X/7. COST AND PRICE ANALYSIS. IF NOT INCLUDED IN THE COST OF THE END ITEM, OR A DATA ITEM, IF INCLUDED IN THE CONTRACT, THE CONTRACTOR SHALL SUBMIT TO THE ASO, CODE PCC-A, THE COST AND A PRICE ANALYSIS OF EACH ITEM OF PROVISIONING TECHNICAL DOCUMENTATION OR SERVICES OUTLINED IN THIS STATEMENT OF POLICY. THIS ANALYSIS SHALL INCLUDE DESCRIPTION, MATERIAL COST, LABOR HOURS AND RATE, BURDEN RATE, GENERAL AND ADMINISTRATIVE (G AND A) RATES, PROFIT AND TOTAL UNIT PRICE. THIS ANALYSIS SHALL BE FORWARDED VIA THE COGNIZANT MIS FOR REVIEW AND COMMENT.' YOU CONTEND THAT SINCE THIS CLAUSE REQUIRES A COST AND PRICE ANALYSIS ONLY WHEN THE COST IS NOT INCLUDED IN AN END ITEM OR CONTRACT DATA ITEM IT WOULD NOT HAVE BEEN MADE APPLICABLE IF A FIRM PRICE FOR ITEM 8 WAS INTENDED.

IN SUMMARY, IT IS YOUR CONTENTION THAT WHEN ALL OF THE FOREGOING PROVISIONS OF THE IFB ARE READ TOGETHER THEIR MEANING IS CONSISTENT WITH YOUR INTERPRETATION THAT THE PROVISIONING DOCUMENTATION CALLED FOR UNDER ITEM 8 IS NOT REQUIRED UNTIL SOMETIME IN THE FUTURE WHEN THE OPTION FOR ITEM 6 IS EXERCISED. THEREFORE, YOU CLAIM YOU BID WAS IMPROPERLY CONSIDERED NONRESPONSIVE FOR FAILING TO STATE A PRICE IN THE SCHEDULE OPPOSITE ITEM 8. TO SUBSTANTIATE THE CORRECTNESS AND REASONABLENESS OF THE ABOVE INTERPRETATION YOU DIRECT OUR ATTENTION TO A PREVIOUS SOLICITATION BY THE NAVY PURCHASING OFFICE. WE QUOTE FROM PAGE 9 OF YOUR LETTER OF JULY 28, 1967:

"* * * IN SUPPORT OF THE CONSISTENCY OF OUR UNDERSTANDING OF THIS BID SOLICITATION, WE SUBMIT AS EXHIBIT 1 A BID SET ISSUED BY THE NAVY PURCHASING OFFICE, N-00600-67-B-0200 DATED NOVEMBER 30, 1966. PLEASE NOTE THE FOLLOWING PAGES OF SAID BID SET: "PAGES 1 AND 2, SECTION -A- ITEMS 4 AND 5, 13 AND 14. BOTH SPARE PARTS AND PROVISIONING DATA HAVE THE ENTRY - TO BE DETERMINED LATER.- ,PAGE 3. CONTRACTOR DATA REQUIREMENTS LIST. "PAGE 9, SECTION -B-, REPAIR PARTS AND SPARES. TO BE FURNISHED IN ACCORDANCE WITH WR-1 AND ATTACHMENT -A- (PROVISIONING POLICY STATEMENT).

"PROVISIONING DATA - WR-1 AND ATTACHMENT -A-. "PAGE 39, SECTION J - SUMMARY OF CONTENTS. ALL ATTACHMENTS ASTERISKED. "ATTACHMENT -A- - PROVISIONING POLICY STATEMENT. "SECTION D, PARAGRAPH 7- -X- ENTERED IN THE BOX PRECEDING PARAGRAPH.

"IT SHOULD BE NOTED THAT THERE IS NO OPTION RETAINED FOR THE PURCHASE OF SPARES AND THEREFORE ALL APPLICABLE DOCUMENTS ARE INCLUDED IN THE AWARD WITH ADEQUATE PROVISION FOR A COST BREAKDOWN FOR THE ITEM TO BE NEGOTIATED. THERE IS TOTAL CONSISTENCY IN EVERY RESPECT AND THIS IS COMPATIBLE WITH THE CONSISTENCY WE POINT OUT IN OUR UNDERSTANDING OF THE NC8A PROCUREMENT.'

AS AN ALTERNATIVE ARGUMENT, YOU CONTEND THAT YOUR BID DID IN FACT OFFER TO PERFORM IN ACCORDANCE WITH ITEM 8 AT A FIRM-FIXED PRICE, IRRESPECTIVE OF THE STATEMENT "INCLUDED IN ITEM 6" OPPOSITE ITEM 8. THIS ARGUMENT IS BASED ON THE LEGAL SIGNIFICANCE YOU ATTACH TO THE "CONTRACT DATA REQUIREMENT LIST" SPECIFICATION ON PAGE 13 OF THE IFB AND YOUR COMPLETION OF DD FORM 1423 BY INSERTING "GROUP II" IN BLOCK 25 AND $1,000 IN BLOCK 26 FOR ITEM 8. THIS, YOU SAY, MANIFESTS A CLEAR INTENT TO FURNISH THE DATA, THE COST OF WHICH IS INCLUDED IN THE BID PRICES FOR THE MAIN EFFORT IN SECTION A, AS INDICATED BY SELECTING GROUP II, AND THE ENTRY IN BLOCK 26 IS A FIRM PRICE OFFERED TO THE GOVERNMENT TO BE SUBTRACTED FROM YOUR TOTAL CONTRACT AMOUNT IF THE PROVISIONING DATA IS NOT REQUIRED. ALTHOUGH BLOCK 26 IS DESIGNATED "TOTAL ESTIMATED PRICE," YOU CONTEND THAT IT IS INTENDED TO BE A FIRM PRICE WHEN FORM 1423 IS USED IN CONJUNCTION WITH AN IFB. THIS CONCLUSION IS BASED ON THE PROVISIONS OF AN AIR FORCE MANUAL FURNISHING INSTRUCTIONS FOR COMPLETING FORM 1423 WHICH YOU HAVE CITED AND WHICH YOU CONTEND YOU ARE ENTITLED TO RELY ON. IT IS THEREFORE YOUR VIEW THAT THERE WAS SUFFICIENT INFORMATION IN THE BID TO DETERMINE THE MAXIMUM COST FOR ITEM 8 AND THAT YOUR BID IS RESPONSIVE. IN THIS CONNECTION, YOU CITE OUR DECISIONS B-160494, MARCH 3, 1967, AND B-155691, FEBRUARY 26, 1965.

IN VIEW OF THE FOREGOING, YOU CONTEND THAT YOUR BID IS RESPONSIVE UNDER THE TWO METHODS OF EVALUATION DICTATED BY THE INVITATION, WHICH YOU SAY ARE:

"1. AWARD OF ALL ITEMS INCLUDING ITEM 8 - ITEM 8 NOT EVALUATED, BUT LEFT FOR NEGOTIATION AS SET FORTH IN THE INVITATION, WR-1, AND PROVISIONING POLICY STATEMENT.

"2. AWARD OF ALL ITEMS INCLUDING ITEM 8, WITH A FIXED PRICE ON ITEM 8.' YOU ALSO CONTEND THAT THE OBJECTIVES OF THE SOLICITATION COULD HAVE BEEN ATTAINED WITHOUT PREJUDICE TO OTHER BIDDERS IF THE CONTRACTING OFFICER HAD EXERCISED THE RIGHT RESERVED TO THE GOVERNMENT TO AWARD ANY ITEM OR COMBINATION THEREOF, BY MAKING AN AWARD IN ACCORDANCE WITH THE FIRST METHOD ABOVE EVEN THOUGH YOUR BID WAS CONSIDERED NONRESPONSIVE. YOU CITE 41 COMP. GEN. 721 IN THIS REGARD.

A FINAL ARGUMENT CONCERNS THE RESPONSIVENESS OF THE BID OF THE SUCCESSFUL BIDDER. YOU NOTE THAT ADT'S BID INCLUDES THE FOLLOWING LANGUAGE: "PRICES FOR ITEM 1, 2, 3AA, 3AB, 3AC, AND 3AD APPLY ONLY IF AWARD IS MADE FOR ALL THESE ITEMS. "THE PRICE FOR ITEM 4 APPLIES IF ALL ITEMS ARE AWARDED.' IS YOUR POSITION THAT THIS LANGUAGE QUALIFIES THE BID ON ITEM 4 AND IS THEREFORE NONRESPONSIVE. THE QUALIFICATION HAS THE EFFECT, YOU CONTEND, OF PERMITTING THE BIDDER "TWO BITES AT THE APPLE," THAT IS, IT CAN AVOID THE AWARD OR INSIST ON AWARD OF ALL ITEMS, INCLUDING OPTION ITEMS 6 AND 14. THEREFORE, THE AWARD WAS VOID AND SHOULD BE CANCELLED.

THE NAVY REPORTS THAT THE REQUIREMENT FOR PROVISIONING DOCUMENTATION IS FIRM AND THAT IT WAS THE INTENT OF THE IFB TO REQUIRE A FIRM BID PRICE ON ITEM 8. WE ARE ADVISED BOTH IN THE ADMINISTRATIVE REPORT AND INFORMALLY THAT THE PROCEDURES SET FORTH IN THE PROVISIONING POLICY STATEMENT ATTACHED TO THE BID SET ARE INTENDED FOR IMPLEMENTATION IN ACCORDANCE WITH THE TIME REQUIREMENTS STATED THEREIN EVEN THOUGHTHE OPTION UNDER ITEM 6 IS NEVER EXERCISED. THIS PROCEDURE OF BUYING PROVISIONING DATA ON A FIRM BASIS AND SPARE PARTS ON AN OPTION BASIS IS REPORTED TO BE COMMON PRACTICE IN NAVY PROCUREMENTS. IN THIS CONNECTION, THE NAVY CITES IFB 600-866-65, ISSUED IN 1965, AND NOTES THAT YOU BID $6,000 ON ITEM 6, PROVISIONING DATA/SERVICES FOR REPAIR PARTS AND SPARES. ALTHOUGH YOU HAVE STATED THAT THE INSTANT IFB IS NOT SIMILAR, WE NOTE THAT ITEM 5 UNDER THE EARLIER IFB IS "TO BE DETERMINED AND NEGOTIATED LATER.' OTHER SIGNIFICANT PROVISIONS ALSO APPEAR SIMILAR.

FURTHERMORE, THE NAVY TAKES THE POSITION THAT THE INVITATION CLEARLY INDICATED THAT ITEM 8 WAS FIRM AND NOT AN OPTION. THEY POINT TO THE FACT THAT ITEM 8, ALONG WITH SEVERAL OTHER LINE ITEMS, PROVIDED SPACE FOR THE UNIT AND TOTAL PRICES, WHEREAS OTHER ITEMS, INCLUDING ITEM 6, STATED EITHER "TO BE DETERMINED LATER" OR "NOT SEPARATELY PRICED.' AS FURTHER EVIDENCE THAT THE IFB CLEARLY INDICATED ITEM 8 TO BE A FIRM REQUIREMENT AND NOT AN OPTION, AND THAT THE IFB WAS SO INTERPRETED BY OTHER FIRMS, THE NAVY CITES THE FACT THAT ALL SEVEN OF THE OTHER BIDDERS STATED A FIRM BID PRICE FOR SUCH ITEM. CONTRARY TO YOUR ARGUMENT, THE NAVY TAKES THE POSITION THAT THE IFB PROVIDED FOR THE PROVISIONING POLICY STATEMENT TO BECOME A PART OF THE CONTRACT IN LIEU OF THE PROVISIONING POLICIES SPECIFIED IN WR-1, WHICH CONCEDEDLY CONTEMPLATE NEGOTIATION OF PROVISIONING REQUIREMENTS, EVEN THOUGH AN ASTERISK WAS INADVERTENTLY OMITTED IN SECTION J. THE NAVY POINTS OUT THAT ITEM 8 SAYS THE PROVISIONING DATA SHALL BE FURNISHED IN ACCORDANCE WITH THE "PROVISIONING POLICY STATEMENT INCORPORATED HEREIN.' THE NAVY DENIES THAT SUBPARAGRAPH (III) OF THE DESCRIPTION OF ITEM 6 IS INCONSISTENT WITH ITS POSITION THAT THE PROVISIONING POLICY STATEMENT ESTABLISHES DELIVERY REQUIREMENTS FOR ITEM 8, POINTING OUT THAT THE LANGUAGE OF SUBPARAGRAPH (III) MEANS NO MORE THAN THAT THE OBLIGATION TO DELIVER PROVISIONING DOCUMENTATION EXISTS WHETHER THE OPTION IS EXERCISED OR NOT.

AS TO YOUR ARGUMENT THAT SECTION D, PARAGRAPH 7, OF THE PROVISIONING POLICY STATEMENT INDICATES NEGOTIATION OF ITEM 8 WAS INTENDED, THE NAVY POINTS OUT THAT THE COST AND PRICE ANALYSIS IS REQUIRED ONLY IF THE DATA COSTS ARE NOT INCLUDED IN THE CONTRACT. SINCE THE IFB CLEARLY CALLS FOR A PRICE FOR ITEM 8 WHICH WILL BE INCLUDED IN A RESULTING CONTRACT, THE PARAGRAPH IS NOT APPLICABLE.

THE NAVY'S REPLY TO THE ARGUMENT THAT YOUR BID SHOULD BE INTERPRETED AS INCLUDING A FIXED PRICE FOR THE PROVISIONING DOCUMENTATION BY REASON OF THE CONTRACT DATA REQUIREMENT LIST PROVISIONS OF THE IFB AND YOUR INSERTION OF $1,000 IN BLOCK 26 OF FORM 1423, IS AS FOLLOWS: "* * * IN THE OPINION OF THE CONTRACTING OFFICER, THE CONDEC BID IS SUSCEPTIBLE OF ONLY ONE REASONABLE INTERPRETATION. THIS INTERPRETATION IS THAT THE PRICE OF ITEM 8, PROVISIONING DOCUMENTATION, IS TO BE NEGOTIATED LATER. THE INSERTION OF AN ESTIMATED PRICE ON THE FORM 1423, A DOCUMENT WHICH IS BY ITS TERMS FOR INFORMATION ONLY, CANNOT CURE THIS DEFICIENCY. NEITHER CAN THE DEFICIENCY BE CURED BY THE FORM 1423INSTRUCTION WHICH INDICATES THAT DATA PRICES WILL BE PRESUMED TO BE INCLUDED ELSEWHERE IN THE BID PRICE. THIS LANGUAGE WAS INCLUDED TO EMPHASIZE THE FACT THAT THE FORM 1423 WAS PURELY FOR INFORMATION PURPOSES AND TO ENSURE THAT FAILURE TO FURNISH OR COMPLETE THE FORM WOULD NOT REFLECT UPON THE BID ITSELF. THE STATED PRESUMPTION THAT THE DATA PRICES ARE INCLUDED ELSEWHERE CANNOT STAND IN VIEW OF THE SPECIFIC LANGUAGE OF THE CONDEC BID WHICH INDICATES THAT THE PROVISIONING DATA PRICE IS NOT INCLUDED ELSEWHERE, BUT RATHER IS TO BE DETERMINED LATER. IN SHORT, THE LANGUAGE OF THE CONDEC BID CAN ONLY BE INTERPRETED AS AN OFFER TO NEGOTIATE THE PRICE OF ITEM 8. THE ESTIMATED PRICE OF $1,000 COULD BE NO MORE THAN A STARTING POINT IN NEGOTIATION. UNDER THESE CIRCUMSTANCES, AN AWARD ON ITEM 8 OF THE CONDEC BID, WOULD NEITHER BIND CONDEC TO FURNISH THE PROVISIONING DOCUMENTATION NOR FIX THE ULTIMATE PRICE TO THE GOVERNMENT. * * *"

FINALLY, THE NAVY DOES NOT BELIEVE IT WOULD BE PROPER UNDER COMPETITIVE BIDDING RULES TO EVALUATE YOUR BID AND AWARD A CONTRACT EXCLUSIVE OF ITEM 8 WHERE IT CONSIDERS YOUR BID NONRESPONSIVE TO THAT ITEM, AND LATER NEGOTIATES WITH YOU FOR IT. FURTHERMORE, THE NEED FOR THE PROVISIONING DOCUMENTATION WOULD STILL EXIST AND IT WOULD NOT BE FEASIBLE TO PURCHASE IT FROM ANOTHER CONTRACTOR.

THE STATUTE GOVERNING THIS PROCUREMENT PROVIDES THAT THE AWARD OF A CONTRACT SHALL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT. U.S.C. 2305 (C). UNDER THE STATUTE, A NONRESPONSIVE BID DOES NOT CONSTITUTE AN OFFER WHICH PROPERLY MAY BE ACCEPTED. THE RESPONSIVENESS OR NONRESPONSIVENESS OF A BID IS FOR DETERMINATION UPON THE BASIS OF THE TERMS OF THE INVITATION ON WHICH THE BID IS SUBMITTED. WHERE A BID FAILS TO QUOTE A PRICE ON AN ITEM WHICH IS TO BE CONSIDERED IN EVALUATION OF THE BIDS AND AWARD OF A CONTRACT, THE BID NORMALLY WOULD BE FOR REJECTION AS NOT BEING RESPONSIVE TO THE INVITATION. 38 COMP. GEN. 372, 376.

IF, AS YOU CONTEND, ITEM 8 WAS AN OPTION ITEM AND, CONSEQUENTLY, NOT FOR CONSIDERATION IN THE EVALUATION OF BIDS, AS PROVIDED IN THE IFB, THEN YOUR FAILURE TO QUOTE A PRICE WOULD NOT REQUIRE REJECTION OF YOUR BID. HOWEVER, WE CANNOT AGREE WITH YOUR ARGUMENT THAT THE REQUIREMENT FOR ITEM 8 WAS NOT INTENDED FOR AWARD UNTIL A LATER DATE AND, THEREFORE, IT WAS NOT MANDATORY TO QUOTE A PRICE FOR IT. THE NAVY HAS STATED THAT PRIOR TO THE ISSUANCE OF THE INVITATION IT WAS DETERMINED THAT THERE WAS A DEFINITE REQUIREMENT FOR THE PROVISIONING DATA, WHETHER OR NOT THE OPTION TO PURCHASE REPAIR AND SPARE PARTS WAS LATER EXERCISED. IT IS ALSO REPORTED THAT THIS PROCEDURE IS NOT UNCOMMON, AND THE NAVY HAS CITED ONE INVITATION EMPLOYING THIS METHOD WHERE YOU BID ON THE PROVISIONING DATA. THE SCHEDULE OF SUPPLIES OR SERVICES CLEARLY INDICATED A PRICE ON ITEM 8 WAS REQUIRED, CONTRARY TO SEVERAL OTHER ITEMS WHICH INDICATED THE OPPOSITE. ALL SEVEN OTHER BIDDERS INTERPRETED THE IFB TO REQUIRE A PRICE ON ITEM 8, AND BID FROM $800 TO $25,000 THEREFOR.

YOUR ARGUMENT THAT A PRICE ON ITEM 8 WAS NOT MANDATORY DEPENDS ON THE VALIDITY OF YOUR INTERPRETATION OF VARIOUS PROVISIONS OF THE IFB AS SET FORTH HERETOFORE. BASIC TO THIS INTERPRETATION IS THE CONCLUSION THAT THE PROVISIONS OF WR-1 ARE APPLICABLE TO ITEM 8, RATHER THAN THE PROVISIONING POLICY STATEMENT INCLUDED IN THE BID PACKAGE, AND THAT THESE PROVISIONS CONTEMPLATE NEGOTIATION OF PROVISIONING DATA. IN OUR OPINION THE INVITATION EFFECTIVELY MADE THE PROVISIONING POLICY STATEMENT APPLICABLE TO ITEM 8 IN LIEU OF WR-1 INSOFAR AS ESTABLISHING THE FACT THAT THE REQUIREMENT FOR PROVISIONING DATA WAS FIRM AND WAS TO BE DELIVERED UNDER THE RESULTANT CONTRACT AS PROVIDED THEREIN. WHILE WE DO NOT BELIEVE IT WAS NECESSARY FOR THE NAVY TO HAVE CHECKED PARAGRAPH 7 OF SECTION D OF THE STATEMENT, WE DO NOT BELIEVE THIS WOULD JUSTIFY THE CONCLUSION THAT THE REQUIREMENT FOR PROVISIONING DATA WAS TO BE NEGOTIATED IN VIEW OF THE CLEAR REQUIREMENT FOR A PRICE IN THE SCHEDULE.

IN THESE CIRCUMSTANCES, WE DO NOT BELIEVE THE INTERPRETATION YOU URGE CONCERNING ITEM 8 IS REASONABLE AND, THEREFORE, SEE NO BASIS UPON WHICH OUR OFFICE MAY PROPERLY DISAGREE WITH THE NAVY'S POSITION THAT THE FAILURE TO QUOTE A PRICE ON ITEM 8 RENDERS YOUR BID NONRESPONSIVE.

YOU HAVE ALSO ARGUED THAT THE CONTRACTING OFFICER SHOULD HAVE CONSIDERED YOUR BID IN ITS ENTIRETY AND, HAD HE DONE SO, HE WOULD HAVE CONCLUDED THAT BY COMPLETING FORM 1423 YOU HAD MANIFESTED AN INTENTION TO FURNISH THE DATA UNDER ITEM 8 AND THAT THE COST THEREFOR OF $1,000 WAS INCLUDED IN YOUR PRICE FOR THE MAIN EFFORT UNDER SCHEDULE A. WE DO NOT BELIEVE SUCH AN INTERPRETATION IS EITHER REQUIRED OR REASONABLE. IN THE FIRST PLACE, THE ONLY REASONABLE INTERPRETATION OF YOUR NOTATION FOR ITEM 8 SEEMS TO US TO BE THAT YOU INTEND TO NEGOTIATE THE PROVISIONING DOCUMENTATION PRICE WHEN AND IF THE OPTION FOR ITEM 6 IS EXERCISED. SECONDLY, WE DO NOT AGREE THAT THE ENTRY OF $1,000 IN BLOCK 26 ON FORM 1423 MAY BE CONSIDERED A FIRM PRICE PROPERLY FOR CONSIDERATION IN EVALUATION OF BIDS IN VIEW OF THE SPECIFIC PROHIBITION OF ASPR 2-407.5 (B) THAT "ESTIMATED DATA PRICES SUBMITTED ON DD FORM 1423 ... SHALL NOT BE CONSIDERED IN EVALUATING BIDS.' THEREFORE, EVEN IF IT BE CONCEDED THAT YOU INDICATED A WILLINGNESS TO FURNISH THE DATA, AS YOU HAVE CONTENDED, YOUR FAILURE TO QUOTE A PRICE ON ITEM 8 RAISES A FURTHER QUESTION REGARDING THE RESPONSIVENESS OF YOUR BID IN VIEW OF THE FOLLOWING PROVISION APPEARING ON THE COVER PAGE OF THE IFB: "IN COMPLIANCE WITH THE ABOVE, THE UNDERSIGNED OFFERS AND AGREES, IF THIS OFFER IS ACCEPTED WITHIN -------- CALENDAR DAYS (60 CALENDAR DAYS UNLESS A DIFFERENT PERIOD IS INSERTED BY THE OFFEROR) FROM THE DATE FOR RECEIPT OF OFFERS SPECIFIED IN THE SOLICITATION ABOVE, TO FURNISH ANY OR ALL OF THE ITEMS UPON WHICH PRICES ARE OFFERED, AT THE PRICES SET OPPOSITE EACH ITEM, DELIVERED AT THE DESIGNATED POINT/S) WITHIN THE TIME SPECIFIED IN THE SCHEDULE.' UNDER THIS PROVISION, ACCEPTANCE OF YOUR BID WOULD NOT RESULT IN A CONTRACT THAT WOULD OBLIGATE YOU TO FURNISH ITEM 8 UPON WHICH NO PRICE WAS QUOTED. IN A PREVIOUS CASE INVOLVING THE BIDDER'S FAILURE TO QUOTE DATA PRICES, WE HELD THAT THE PRESENCE OF A SIMILAR CLAUSE CONDITIONED THE BIDDER'S OBLIGATION TO FURNISH DATA. 41 COMP. GEN. 412.

WE HAVE NOT OVERLOOKED YOUR CONTENTION THAT YOUR INSERTION OF PRICE GROUP "II" IN BLOCK 25 OF FORM 1423 SHOWS CLEARLY THAT YOU HAD INCLUDED THE COST OF PROVISIONING DATA IN YOUR BID PRICES FOR THE PRIMARY CONTRACTED EFFORT IN SECTION A, WHICH PRESUMABLY WOULD BE ITEMS 1, 2 AND 3, NOT ITEM 6. THIS CONTENTION OVERLOOKS THE FACT THAT THE AMOUNT TO BE INSERTED IN BLOCK 26 WAS TO BE ONLY THOSE COSTS, IF ANY, IN ADDITION TO COSTS YOU WOULD INCUR EVEN IF NO DATA WERE REQUIRED. IN OTHER WORDS, IF YOUR INSERTION OF PRICE GROUP II IN BLOCK 25 IS TAKEN TO MEAN THAT THE TOTAL COST OF FURNISHING PROVISIONING DATA WAS INCLUDED IN THE PRIMARY CONTRACTED EFFORT, THEN LOGICALLY THERE WOULD BE NO ADDITIONAL COST, AND YOU SHOULD HAVE INSERTED ZERO IN BLOCK 26.

YOU HAVE ALSO MADE A POINT OF THE FACT THAT IF THE AWARD WERE MADE TO YOUR FIRM, THE SAVING TO THE GOVERNMENT WOULD BE $104,984 AND THERE WOULD BE A POTENTIAL SAVING OF $350,000 IF THE OPTIONS FOR ITEMS 14 AND 15 WERE EXERCISED. WHILE A SAVING OF THIS MAGNITUDE WOULD BE TO THE GOVERNMENT'S INTEREST THERE IS A PRINCIPLE WHICH HAS LONG BEEN FOLLOWED IN PUBLIC PROCUREMENT WHICH IS FOR CONSIDERATION. IN A VERY RECENT CASE, B-161576, JULY 13, 1967, INVOLVING A PRICE OMISSION FOR DATA, WE AGAIN HAD OCCASION TO STATE IT AS FOLLOWS:

"WE HAVE HELD THAT A PRICE OMISSION OF $1,000 SHOULD NOT BE TREATED AS TRIVIAL EVEN THOUGH IT APPEARED INSIGNIFICANT IN RELATION TO THE TOTAL COST OF BID DIFFERENCE AND EVEN THOUGH THE BIDDER WHO OMITTED THE REQUIRED ITEM PRICE WOULD STILL HAVE SUBMITTED THE LOWEST OFFER IF THE HIGHEST ASSUMED PRICE FOR THE ITEM WERE SUPPLIED. B-159725, DECEMBER 23, 1966; 44 COMP. GEN. 753. THESE DECISIONS ARE BASED ON THE PRINCIPLE THAT FAIRNESS TO ALL BIDDERS DEMANDS THAT BIDS MUST BE EVALUATED ON THE SAME BASIS FOR THE SAME ITEMS. THE MERE FACT THAT THE GOVERNMENT WOULD HAVE ACHIEVED MONETARY SAVINGS IN THESE CIRCUMSTANCES DOES NOT WARRANT DEVIATION FROM THESE CONSIDERATIONS SINCE IT IS MORE IN THE PUBLIC'S INTEREST TO MAINTAIN FAIRNESS IN COMPETITIVE BIDDING THAN TO REALIZE A PECUNIARY ADVANTAGE IN A PARTICULAR CASE. B-156539, JUNE 9, 1965.'

WITH REGARD TO CITATION OF OUR DECISION REPORTED AT 41 COMP. GEN. 721, FOR THE PROPOSITION THAT THE NAVY COULD HAVE MADE AN AWARD TO YOU FOR ALL ITEMS BUT ITEM 8, WE BELIEVE IT IS DISTINGUISHABLE FROM THE INSTANT CASE SINCE HERE IT IS OBVIOUS THAT ONLY THE PRODUCTION CONTRACTOR COULD SUPPLY THE PROVISIONING DATA BECAUSE OF THE RELATIONSHIP OF THE DATA TO THE PRODUCTION UNITS AND THE REPAIR AND SPARE PARTS. IF THE CONTRACT WERE AWARDED TO YOU EXCLUSIVE OF ITEM 8, AND IF THE GOVERNMENT IS TO SATISFY ITS REQUIREMENT FOR THE DATA, IT WOULD NECESSARILY HAVE TO NEGOTIATE WITH YOU ON YOUR TERMS. FURTHERMORE, IT WOULD APPEAR THAT SUCH AN AWARD IN THE CIRCUMSTANCES HERE PRESENT WOULD VIOLATE THE PRINCIPLE STATED ABOVE THAT "FAIRNESS TO ALL BIDDERS DEMANDS THAT BIDS MUST BE EVALUATED ON THE SAME BASIS FOR THE SAME ITEMS.'

YOUR FINAL ARGUMENT CONCERNS THE QUESTION OF ADT'S RESPONSIVENESS. THE CONTRACTING OFFICER INTERPRETED THE LANGUAGE IN ADT'S BID QUOTED HERETOFORE TO APPLY TO ALL ITEMS SPECIFICALLY MENTIONED THEREIN, WHICH, IN OUR OPINION, IS THE MOST REASONABLE INTERPRETATION SINCE THE IFB CLEARLY INDICATED THAT THEY WERE THE ONLY QUANTITIES THAT WOULD BE AWARDED AT THIS TIME AND FURTHER STATED THAT THE "EVALUATION OF BIDS WILL BE BASED ON THE QUANTITY TO BE AWARDED EXCLUSIVE OF THE OPTION QUANTITY.' WE FAIL TO SEE HOW ADT'S "ALL OR NONE" BID ON THE ITEMS TO BE AWARDED CAN BE CONSTRUED TO INCLUDE THE OPTION RESERVED BY THE GOVERNMENT UNDER ITEMS 14 AND 15 TO INCREASE THE QUANTITY.

ACCORDINGLY, WE FIND NO LEGAL BASIS TO QUESTION THE VALIDITY OF THE AWARD TO ADT.