B-161943, AUG. 29, 1967

B-161943: Aug 29, 1967

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BIDDER WHO INSERTED AFTER ONE ITEM FOR DATA IN PRICE COLUMN TO BE NEGOTIATED MAY NOT HAVE SUCH NOTATION CONSIDERED AS . DETERMINATION OF NAVY TO REJECT BID AS NONRESPONSIVE IS NOT SUBJECT TO LEGAL OBJECTION. THE RESULTS WERE AS FOLLOWS: DYNELL ELECTRONICS CORPORATION $2. 075.00 THE BID OF DYNELL ELECTRONICS CORPORATION WAS ACCOMPANIED BY A LETTER REQUESTING PROGRESS PAYMENTS OF 75 PERCENT. IT WAS REJECTED AS NONRESPONSIVE. THE BID SUBMITTED BY RAYTHEON ELECTRIC CORPORATION WAS ALSO REJECTED AS NONRESPONSIVE. BECAUSE ALL BIDS WERE DETERMINED TO BE NONRESPONSIVE. ITEMS 1 THROUGH 8 HAVE BLANK SPACES FOR THE INSERTION OF BID PRICES. 10 AND 11 HAVE THE WORDS "/SEE SECTION C)" IN THE PRICE LINE.

B-161943, AUG. 29, 1967

BIDS - REJECTION AND READVERTISEMENT - JUSTIFICATION DECISION CONCERNING PROTEST AGAINST REJECTION OF BID OF REEVES INSTRUMENT DIVISION, DYNAMICS CORP. BY NAVAL ORDNANCE SYSTEMS COMMAND FOR 23 RADARS, SETS AND EQUIPMENT. BIDDER WHO INSERTED AFTER ONE ITEM FOR DATA IN PRICE COLUMN TO BE NEGOTIATED MAY NOT HAVE SUCH NOTATION CONSIDERED AS ,NO CHANGE" FOR ITEM. FURTHER FAILURE TO BID FIRM PRICE ON DATA MAY NOT BE REGARDED AS MINOR DEVIATION. OTHER DECISIONS DISTINGUISHED. DETERMINATION OF NAVY TO REJECT BID AS NONRESPONSIVE IS NOT SUBJECT TO LEGAL OBJECTION. CIRCUMSTANCES PROVIDE ADEQUATE REASONS FOR CONTRACTING OFFICERS DECISION TO CANCEL INVITATION AND READVERTISE.

TO SURREY, KARASIK, GOULD AND GREENE:

WE REFER TO YOUR LETTERS OF JULY 10, 1967, JULY 28, 1967, AUGUST 7, 1967, AND AUGUST 15, 1967, PROTESTING THE REJECTION OF THE BID OF REEVES INSTRUMENT DIVISION, DYNAMICS CORPORATION OF AMERICA (REEVES), AS NONRESPONSIVE TO INVITATION FOR BIDS NO. N00017-67-B-2008 ISSUED APRIL 19, 1967, BY THE NAVAL ORDNANCE SYSTEMS COMMAND, WASHINGTON, D.C., TO PROCURE TWENTY-THREE AN/SPG-53A RADARS, WAVEGUIDE SETS AND ASSOCIATED EQUIPMENT BECAUSE REEVES' BID CONTAINED THE WORDS "TO BE NEGOTIATED" ON THE PRICE LINE OPPOSITE ITEM 12, FOR THE PURCHASE OF DATA.

ON BID OPENING, JUNE 7, 1967, THE RESULTS WERE AS FOLLOWS:

DYNELL ELECTRONICS CORPORATION $2,073,337.76

REEVES INSTRUMENT DIVISION $2,925,554.00

RAYTHEON ELECTRIC CORPORATION $3,140,075.00

THE BID OF DYNELL ELECTRONICS CORPORATION WAS ACCOMPANIED BY A LETTER REQUESTING PROGRESS PAYMENTS OF 75 PERCENT, ALTHOUGH THE INVITATION PROVIDED FOR MAXIMUM PROGRESS PAYMENTS OF 70 PERCENT. BECAUSE DYNELL'S BID COULD BE VIEWED AS CONDITIONED BY THE REQUEST, IT WAS REJECTED AS NONRESPONSIVE.

THE BID SUBMITTED BY RAYTHEON ELECTRIC CORPORATION WAS ALSO REJECTED AS NONRESPONSIVE. THUS, BECAUSE ALL BIDS WERE DETERMINED TO BE NONRESPONSIVE, THE NAVY DEEMED IT NECESSARY TO CANCEL THIS INVITATION AND READVERTISE THE PROCUREMENT.

PAGE 2 OF THE INVITATION'S SCHEDULE, SECTION A, ENTITLED "SUPPLIES AND SERVICES TO BE FURNISHED AND PRICES," LISTS A TOTAL OF TWELVE ITEMS. ITEMS 1 THROUGH 8 HAVE BLANK SPACES FOR THE INSERTION OF BID PRICES, AS DOES ITEM 12. ITEMS 9, 10 AND 11 HAVE THE WORDS "/SEE SECTION C)" IN THE PRICE LINE. A LINE AT THE BOTTOM OF THE PRICE COLUMN PROVIDES FOR THE INSERTION OF THE BIDDER'S TOTAL PRICE.

THE "DESCRIPTION OF ITEMS AND SPECIFICATIONS" FOR ITEM 12, PAGE 11 OF SECTION C OF THE SCHEDULE, REQUIRES THE DATA TO BE FURNISHED IN ACCORDANCE WITH DD FORM 1423 OF DECEMBER 1, 66,"CONTRACT DATA REQUIREMENTS LIST," ATTACHED TO THE INVITATION IN ADDENDUM A. THIS PARAGRAPH ALSO PROVIDES THAT THE CONTRACTOR SHALL NOT "DUPLICATE WORK UNDER THIS CONTRACT WHICH HAS BEEN ORDERED AND FINANCED UNDER ANY OTHER CONTRACTS EITHER IN THE CONTRACT SCHEDULE, WARRANT OR ANY PROVISION OF OTHER GOVERNMENT CONTRACTS.'

SECTION V OF THE SCHEDULE, PAGE 40, STATES THAT THE CONTRACTOR IS REQUIRED TO DELIVER, AND THE GOVERNMENT TO PAY FOR, ONLY SUCH TECHNICAL DATA AS IS LISTED ON DD FORM 1423, AND FURTHER THAT DATA MENTIONED ELSEWHERE IN THE INVITATION BUT NOT LISTED ON DD FORM 1423 NEED NOT BE DELIVERED.

THE DD FORM 1423 INCLUDED WITH THE INVITATION REQUIRES FOUR TYPES OF DATA, NAMELY: ENGINEERING CHANGE PROPOSALS, ENGINEERING DRAWINGS AND ASSOCIATED DATA, MANUAL REVISIONS, AND SPARE/REPAIR PARTS PROVISIONING DATA.

YOUR LETTER OF JULY 10, ATTACKS THE DETERMINATION OF THE CONTRACTING OFFICER THAT REEVES' BID IS NONRESPONSIVE BECAUSE IT CONTAINS THE WORDS "TO BE NEGOTIATED" IN THE SPACE PROVIDED FOR THE INSERTION OF A BID PRICE FOR ITEM 12. AMONG THE REASONS PRESENTED ARE THE DETRIMENT SUFFERED WHEN AN INVITATION IS CANCELLED AFTER BIDS ARE EXPOSED, THE FACT THAT DD FORM 1423 DATA INFORMATION IS ONLY AN ESTIMATED COST ACCORDING TO THE APPLICABLE REGULATION, REEVES INCLUDED ITS DATA COST IN THE HARDWARE ITEMS, REEVES WAS OBLIGATED TO FURNISH THE DATA IN ANY CASE, THE FAILURE TO FURNISH A PRICE FOR THE DATA IS A MINOR DEVIATION WHICH SHOULD BE WAIVED, THE WORDS "TO BE NEGOTIATED" WERE INTENDED TO APPLY TO THE DATA AND NOT TO THE PRICE, REEVES WAS BOUND BY ITS TOTAL BID PRICE OF $2,925,554, AND, FINALLY, A BID SHOULD NOT BE REJECTED SIMPLY BECAUSE "AS A MATTER OF FORM" IT DID NOT USE THE PROPER WORDS WHEN THE TOTAL BID PRICE WAS STATED.

YOUR LETTER OF JULY 28, 1967, DISTINGUISHES THE CASE AT HAND FROM B 161576, OF JULY 13, 1967, A DECISION WHICH HELD A BID NONRESPONSIVE WHICH FAILED TO MAKE ANY NOTATION IN THE UNIT PRICE COLUMN OF THE INVITATION FOR FOUR LINE ITEMS OF DATA.

YOUR LETTER OF AUGUST 7, 1967, SUGGESTS THAT OUR DECISION, B-161012 OF JUNE 13, 1967, WHICH PERMITTED ACCEPTANCE AT THE TOTAL BID PRICE OF A BID WHICH LEFT THE PRICE FOR A DATA ITEM BLANK, PROVIDES PRECEDENT FOR YOUR POSITION.

YOUR LETTER OF AUGUST 15, 1967, DISCUSSES WHAT YOU CONSIDER ERRORS IN THE NAVAL ORDNANCE SYSTEMS COMMAND REPORT ON YOUR PROTEST.

WE FEEL THAT A PROPER DISPOSITION OF THE INSTANT CASE DEPENDS IN LARGE PART UPON THE EFFECT OF INSERTING THE WORDS "TO BE NEGOTIATED" IN RESPONSE TO AN ITEM WHICH NORMALLY WOULD BE PRICED. STATED IN THIS MANNER, WITH EMPHASIS ON THE FACT YOUR BID APPARENTLY INDICATES AN INTENTION TO NEGOTIATE THE PRICE OF ITEM 12 AT SOME LATER DATE AFTER AWARD, IT IS APPARENT THAT THE MOST COMPELLING PROOF WOULD BE REQUIRED TO OVERCOME THIS INTERPRETATION OF REEVES' BID. AND, FOR REASONS DISCUSSED LATER, WE DO NOT FEEL THE CASES AND DECISIONS CITED IN YOUR LETTERS COMPEL THE CONCLUSION YOU SUGGEST.

YOUR LETTER OF JULY 10, 1967, AFTER INDICATING THAT DATA COSTS ARE INCLUDED IN THE OTHER LINE ITEMS, SO THAT NO CHARGE WAS INTENDED FOR SEPARATE DATA COSTS OF ITEM 12, STATES:

"CERTAINLY, OUR CLIENT'S BID SHOULD NOT BE REJECTED SIMPLY BECAUSE, AS A MATTER OF FORM, IT DID NOT USE THE WORDS -NO CHARGE-. SUCH A DEVIATION HAS NO BEARING ON THE SUBSTANCE--THE PRICE--OF THE BID. SEE 40 COMP. GEN. 321, 324.'

THIS SENTENCE ILLUSTRATES A BASIC DIFFERENCE BETWEEN YOUR VIEWS AND THOSE OF THIS OFFICE. WE CANNOT AGREE THAT THE INSERTION OF THE WORDS "TO BE NEGOTIATED" IN RESPONSE TO A BLANK FOR THE INSERTION OF A PRICE SHOULD BE CONSIDERED SIMPLY "A MATTER OF FORM.' IF REEVES INTENDED NOT TO CHARGE FOR THE DATA, IT SHOULD HAVE INDICATED "NO CHARGE.' THE MEANING CONVEYED BY THE WORDS "NO CHARGE" IS BY NO MEANS EQUIVALENT TO THE MEANING CONVEYED BY THE WORDS "TO BE NEGOTIATED," AND WE DO NOT VIEW THE SUBSTITUTION OF THE ONE PHRASE FOR THE OTHER AS A MATTER OF FORM.

THE CASE YOU CITE, 40 COMP. GEN. 321, 324, DOES NOT, IN OUR OPINION, STAND FOR THE PROPOSITION PRECEDING IT IN YOUR LETTER OF JULY 10, 1967, THAT THE SUBSTITUTION OF THE WORDS USED BY REEVES FOR THE PHRASE "NO CHARGE" IS MERELY A MATTER OF FORM. THAT DECISION CONCERNS AN INVITATION FOR PRINTING WORK OF VARIOUS KINDS, WHERE 45 FREQUENTLY ORDERED ITEMS, OUT OF A TOTAL OF OVER 400 PRICE ITEMS, WERE TO BE USED FOR A WEIGHTED EVALUATION OF BIDS. THE SUCCESSFUL BIDDER NEGLECTED TO INDICATE A PRICE FOR BOTH A MINIMUM ORDER, AND A UNIT PRICE FOR ONE TYPE OF WORK OF ONE OF THE SELDOM ORDERED ITEMS WHICH WAS NOT INCLUDED IN THE EVALUATION FORMULA. FURTHER COMPLICATING MATTERS WAS THE FACT THE COMPLETE PRICE LISTING WAS SCATTERED THROUGHOUT 28 PAGES OF TYPEWRITTEN ITEM DESCRIPTIONS AND THE FACT THAT THE PRICES USED FOR EVALUATION WERE ON ANOTHER SEPARATE FORM. ALL OF THESE FACTORS COMBINE TO CREATE BOTH A LEGAL AND FACTUAL DISTINCTION BETWEEN THIS CASE AND THE CASE AT HAND WHERE THE PRICE ITEM IN QUESTION WAS TO BE USED IN BID EVALUATION AND ALL PRICE ITEMS WERE PRINTED IN A SHORT LIST ON THE SAME PAGE.

TURNING TO YOUR OTHER CONTENTIONS, YOU MAINTAIN THAT THE FAILURE TO INDICATE A PRICE FOR ITEM 12 SHOULD BE REGARDED AS A MINOR DEVIATION BECAUSE THIS ITEM IS COMPARABLE TO THE ESTIMATED DATA COSTS CONTAINED IN BLOCKS 26 OF DD FORM 1423, AND, ACCORDING TO THE ARMED SERVICES PROCUREMENT REGULATION, PARAGRAPH 2-405 (VI), THE FAILURE TO FILL OUT BLOCK 26 OF DD FORM 1423 SHOULD BE REGARDED AS A MINOR INFORMALITY NOT AFFECTING RESPONSIVENESS OF A BID.

HOWEVER, YOU HAVE NOT SHOWN WHY A REGULATION WHICH APPLIES TO COST ESTIMATE INFORMATION ON A SUPPLEMENTARY FORM SHOULD CONTROL THE EFFECT OF ASKING FOR A PRICE FOR A LINE ITEM ON THE INVITATION SCHEDULE. IN THE ABSENCE OF A SHOWING THAT THE CITED PROVISION OF ASPR CONTROLS IN THIS SITUATION, WE CAN ONLY REGARD THE FAILURE OF REEVES TO BID A FIRM PRICE ON THE DATA ITEM AS A MAJOR DEVIATION WHICH RENDERS ITS BID NONRESPONSIVE. FOR THIS REASON, B-161067 OF JUNE 5, 1967, A CASE WHERE THE BIDDER FAILED TO COMPLETE THE COST ESTIMATE BLOCKS ON DD FORM 1423, IS NOT APPLICABLE TO THE PRESENT CASE.

THE REPORT FROM THE COMMANDER, NAVAL ORDNANCE SYSTEMS COMMAND, DEPARTMENT OF THE NAVY, RELATIVE TO YOUR PROTEST, STATES THAT DYNELL ELECTRONICS CORPORATION, THE LOW BIDDER, ENTERED A BID PRICE OF $52,645.16 FOR ITEM 12. THIS OFFICE CONSIDERS THIS AMOUNT SIGNIFICANT, AND WE THEREFORE CANNOT AGREE WITH YOUR CONTENTION THAT THE FAILURE TO FURNISH A PRICE FOR ITEM 12 IS "MERELY A MINOR DEVIATION BECAUSE OF THE NATURE OF THE DATA REQUESTED.'

AS TO YOUR ASSERTION THAT THE WORDS "TO BE NEGOTIATED" SHOULD BE READ AS APPLYING TO THE TYPES AND AMOUNTS OF DATA WHICH WERE TO BE FURNISHED UNDER THE CONTRACT, EVEN IF SUCH AN INTERPRETATION WERE ADMITTED, REEVES' BID WOULD REMAIN NONRESPONSIVE, FOR DETERMINING IN ADVANCE THE BIDDER'S OBLIGATION FOR FURNISHING THE MATERIALS TO BE SUPPLIED UNDER A CONTRACT IS EQUALLY AS IMPORTANT AS SETTING A PRICE, AND THE FAILURE TO AFFIRMATIVELY ESTABLISH EITHER THE INTENDED CONTRACT GOODS AND SERVICES OR THE INTENDED PRICE RENDERS A BID NONRESPONSIVE.

OUR DECISION, B-161576 OF JULY 13, 1967, DISCUSSED IN YOUR LETTER OF JULY 28, 1967, HELD THAT THE FAILURE TO INDICATE A PRICE FOR A LINE ITEM OF DATA RENDERED A BID NONRESPONSIVE. WHILE IT MAY BE THAT THE LANGUAGE IN THE INVITATION IN THAT CASE CONVEYED THE IDEA THAT PRICES WERE REQUIRED ON ALL ITEMS, WE FEEL THE GREATEST DISTINCTION BETWEEN THE TWO CASES IS THE FACT THE BIDDER FAILED TO MAKE ANY NOTATION IN THE APPROPRIATE SPACE FOR A PRICE IN THAT CASE, WHILE REEVES INSERTED THE WORDS "TO BE NEGOTIATED" IN THE INSTANT CASE.

THEREFORE, WHEN YOU CONCLUDE THAT SEPARATE PRICING WAS NOT REQUIRED IN THE PRESENT CASE, YOU HAVE AVOIDED THE ISSUE, THAT REGARDLESS OF WHETHER THE DATA HAD TO BE PRICED SEPARATELY, REEVES INDICATED ITS PRICE FOR THE DATA WAS TO BE NEGOTIATED AFTER AWARD. WE ALSO DO NOT AGREE WITH YOUR ASSUMPTION THAT THE WORDS USED BY REEVES FOR ITEM 12 ARE EQUIVALENT TO THE WORDS "TO BE REQUESTED BY THE CONTRACTING OFFICER AND SUPPLIED (AT) NO ADDITIONAL COST.' SINCE WE DO NOT GRANT THAT REEVES' BID WAS EQUIVALENT TO THIS QUOTED PHRASE, OR ANY SIMILAR PHRASE SUCH AS ,INCLUDED IN ITEMS 1 THROUGH 8," OR "NO CHARGE," IT FOLLOWS THAT THE REST OF THE REASONING YOU PRESENT IN YOUR LETTER OF JULY 28, 1967, WHICH DEPENDS UPON SUCH AN ASSUMPTION, CANNOT ALTER OUR CONCLUSION IN THE MATTER.

YOUR LETTER OF AUGUST 7, 1967, REFERS TO OUR DECISION, B-161012 OF JUNE 13, 1967, IN WHICH WE HELD A BID RESPONSIVE DESPITE ITS FAILURE TO INDICATE A PRICE FOR A LINE ITEM OF DATA ASSOCIATED WITH THE HARDWARE, WHICH WAS THE ONLY OTHER LINE ITEM. THAT CASE CAN BE DISTINGUISHED FROM THE PRESENT CASE IN THAT THE BIDDER INDICATED A SPECIFIC DELIVERY DATE FOR THE DATA, AND THIS POSITIVE ACTION INDICATED BOTH AN AWARENESS OF THE DATA REQUIREMENTS AND AN INTENTION TO FULFILL THEM FOR THE TOTAL BID PRICE. HOWEVER, WE ARE OF THE OPINION THAT HAD THE BIDDER INVOLVED INSERTED THE WORDS "TO BE NEGOTIATED" FOR HIS PRICE, THIS OFFICE WOULD HAVE REACHED THE OPPOSITE CONCLUSION. IN ANY CASE, THE DIFFERENCE BETWEEN LEAVING THE DATA PRICE SPACE BLANK IN THE EARLIER DECISION AND REEVES' INSERTION OF WORDS INDICATING THE PRICE WAS TO BE DETERMINED AT A LATER DATE IN THE PRESENT CASE, IS A DISTINCTION WHICH CAUSES THE PRESENT CASE TO FALL OUTSIDE THE RATIONALE OF B-161012.

IN SUMMARY, WE FIND ALL OF YOUR ARGUMENTS ATTACKING THE DETERMINATION THAT REEVES' BID WAS NONRESPONSIVE TO BE UNCONVINCING BECAUSE THEY DO NOT ANSWER THE QUESTION WHETHER THE GOVERNMENT WOULD HAVE BEEN OBLIGATED TO NEGOTIATE A SEPARATE PRICE FOR THE DATA INVOLVED HAD REEVES BEEN AWARDED A CONTRACT ON THE BASIS OF ITS BID ON ITEM 12. WE, THEREFORE, FIND THAT THE NAVY'S DETERMINATION TO REJECT REEVES' BID AS NONRESPONSIVE IS NOT SUBJECT TO LEGAL OBJECTION.

WE THINK THE CIRCUMSTANCES OF THIS CASE PROVIDE ADEQUATE REASON FOR THE CONTRACTING OFFICER'S DECISION TO CANCEL THE INVITATION AND READVERTISE.

THE FACT REEVES PROTESTS IT WAS MISLED BY THE AMBIGUOUS DATA REQUIREMENTS OF THE ORIGINAL INVITATION FURNISHES SUPPORT FOR THE DECISION TO CANCEL AND READVERTISE THIS PROCUREMENT, IN THE INTERESTS OF FAIRNESS TO REEVES. WE NOTE, TOO, A LARGE DISCREPANCY BETWEEN THE BID PRICES, SO THAT IT IS POSSIBLE THE CONTRACTING OFFICER HAD REASON TO CONCLUDE THE GOVERNMENT MIGHT OBTAIN MORE FAVORABLE TERMS ON A RESOLICITATION.

THE RIGHT TO CANCEL THE INVITATION WAS RESERVED BY ARTICLE 8 (B) OF THE BIDDING INSTRUCTIONS IN STANDARD FORM 33A, IN KEEPING WITH THE POWER GRANTED CONTRACTING AGENCIES BY 10 U.S.C. 2305 (C) AND 10 U.S.C. 2311. OUR OFFICE HAS UPHELD THE EXERCISE OF THIS RESERVED RIGHT TO CANCEL AND READVERTISE WHERE THE PUBLIC INTEREST REQUIRES SUCH ACTION. SEE 38 COMP. GEN. 235, 237 AND B-160975 OF MARCH 28, 1967. WE, THEREFORE, FIND NO LEGAL OBJECTION TO CANCELLING THE ORIGINAL INVITATION AND THE SUBSEQUENT RESOLICITATION UNDER THE CIRCUMSTANCES.