B-162117, DEC. 7, 1967

B-162117: Dec 7, 1967

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BIDDER WHO IN RESPONSE TO INVITATION REQUIRING DELIVERY OF FIRST ARTICLE IN 150 DAYS SUBMITTED DATA INDICATING DELIVERY IN 168 1/2 DAYS MAY NOT HAVE HIS NONRESPONSIVE BID CORRECTED ON BASIS OF ERROR ALLEGED AFTER OPENING. BERESFORD AND COBURN: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 26. THE SUBJECT INVITATION WAS ISSUED ON JUNE 8. BIDS WERE SOLICITED FROM PRIOR PRODUCERS ON A FIRST ARTICLE (PREPRODUCTION) APPROVAL WAIVED BASIS (BID "A") AND FROM OFFERORS WHO HAD NOT PREVIOUSLY PRODUCED THE EQUIPMENT ON A FIRST ARTICLE APPROVAL REQUIRED BASIS (BID "B"). LIQUIDATED DAMAGES FOR LATE DELIVERY WERE STIPULATED. ANY NEW SUPPLIER WAS FLATLY ADVISED THAT "IT (DID) NOT APPEAR POSSIBLE" FOR HIM TO ACCOMPLISH THIS.

B-162117, DEC. 7, 1967

BIDS - DELIVERY PROVISIONS - PREPRODUCTION ITEM DECISION DENYING PROTEST OF INDUSTRIAL RESEARCH ASSOCIATES, INC., AGAINST AWARD BY NAVAL SHIP SYSTEMS COMMAND TO JETRONIC INDUSTRIES. BIDDER WHO IN RESPONSE TO INVITATION REQUIRING DELIVERY OF FIRST ARTICLE IN 150 DAYS SUBMITTED DATA INDICATING DELIVERY IN 168 1/2 DAYS MAY NOT HAVE HIS NONRESPONSIVE BID CORRECTED ON BASIS OF ERROR ALLEGED AFTER OPENING. SINCE TWO FIRMS HAD PREVIOUSLY DELIVERED SUPPLIES FACT THAT A NEW PRODUCER COULD NOT MEET DELIVERY REQUIREMENT DOES NOT MAKE INVITATION RESTRICTIVE OF COMPETITION.

TO VOM BAUR, BERESFORD AND COBURN:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 26, 1967, SUPPLEMENTING A TELEGRAM OF JULY 24, 1967, FROM INDUSTRIAL RESEARCH ASSOCIATES, INC. (IRA), PROTESTING AGAINST THE AWARD OF A CONTRACT TO JETRONIC INDUSTRIES, INC., UNDER INVITATION FOR BIDS NO. N00024-67-B-0831 ISSUED BY THE NAVAL SHIP SYSTEMS COMMAND.

THE SUBJECT INVITATION WAS ISSUED ON JUNE 8, 1967, WITH CLOSING DATE OF JUNE 22, 1967, CALLING FOR 10 AN/SSW-1) ( DIGITAL DATA COMMUNICATIONS CONTROL TERMINALS, ASSOCIATED MAINTENANCE AND REPAIR PARTS, ANCILLARY SERVICES, DATA AND REPORTS. BIDS WERE SOLICITED FROM PRIOR PRODUCERS ON A FIRST ARTICLE (PREPRODUCTION) APPROVAL WAIVED BASIS (BID "A") AND FROM OFFERORS WHO HAD NOT PREVIOUSLY PRODUCED THE EQUIPMENT ON A FIRST ARTICLE APPROVAL REQUIRED BASIS (BID "B"). THE URGENCY OF THE NAVY'S REQUIREMENT FOR THE EQUIPMENT MADE IT NECESSARY THAT, ON EITHER BASIS, DELIVERY OF PRODUCTION EQUIPMENT BEGIN BY MARCH 30, 1968, 9 MONTHS AFTER THE EFFECTIVE DATE OF THE CONTRACT. LIQUIDATED DAMAGES FOR LATE DELIVERY WERE STIPULATED. THE INVITATION UNDER THE HEADING "SUBMITTAL OF PERT AND MANNING DATA BY NEW SUPPLIERS ONLY" SPELLED OUT IN THE PLAINEST TERMS THE EXTREME DIFFICULTY THERE WOULD BE FOR A NEW SUPPLIER, FOR WHOM THE FIRST ARTICLE APPROVAL REQUIREMENT WOULD NOT BE WAIVED, TO DESIGN, BUILD, TEST WITH SATISFACTORY RESULTS, AND SUBMIT TO THE GOVERNMENT FOR APPROVAL AN AN/SSW-1) ( FIRST ARTICLE EQUIPMENT, ALLOW 120 DAYS FOR GOVERNMENT APPROVAL, AND MEET THE 9-MONTH DELIVERY SCHEDULE FOR THE FIRST PRODUCTION UNITS. ANY NEW SUPPLIER WAS FLATLY ADVISED THAT "IT (DID) NOT APPEAR POSSIBLE" FOR HIM TO ACCOMPLISH THIS. FURTHER, HE WAS TOLD THAT, IF HE BID, HE MUST INCLUDE A PRELIMINARY PERT WORK BREAKDOWN STRUCTURE, A PRELIMINARY PERT NETWORK, AND MANNING DATA, ALL IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-P-23189A (NAVY), OCTOBER 25, 1962, AND THAT, IF THE PERT AND MANNING DATA SUBMITTED WERE UNSATISFACTORY, HIS BID WOULD BE CONSIDERED NONCONFORMING AND WOULD BE REJECTED.

THE PREVIOUS SUPPLIERS OF THE AN-SSW-1) ( WERE THE WESTERN ELECTRIC COMPANY AND JETRONIC. WESTERN ELECTRIC HAD PRODUCED THE EQUIPMENT UNDER THE INITIAL PRODUCTION CONTRACT (NOW-62-0740D, MAY 1962). JETRONIC HAD PRODUCED, AND WAS CURRENTLY PRODUCING, THE EQUIPMENT UNDER A CURRENT CONTRACT (NOBSR-93104, JANUARY 1965) UNDER WHICH THE PRIME CONTRACTOR, IRA, HAD SUBCONTRACTED THE ENTIRE PRODUCTION OF THE EQUIPMENT TO JETRONIC. THE TWO PRIOR PRODUCERS WERE LISTED IN THE INVITATION AS SUCH, AND THE INVITATION PROVIDED THAT THE GOVERNMENT WOULD WAIVE FIRST ARTICLE (PRE-PRODUCTION) APPROVAL FOR THEM. IRA WAS NOT CONSIDERED OR LISTED AS A PRIOR PRODUCER OF THE EQUIPMENT, SINCE IT HAD NOT IN FACT PRODUCED THE EQUIPMENT, PRODUCTION UNDER NOBSR 93104 HAVING BEEN ACCOMPLISHED ENTIRELY BY JETRONIC IN JETRONIC'S PLANT. IRA DID NOT BID AS A PRIOR PRODUCER. APPROXIMATELY 15 PROSPECTIVE OFFERORS, INCLUDING THE TWO PRIOR PRODUCERS OF THE EQUIPMENT, WERE FURNISHED BID SETS. TWO BIDS WERE RECEIVED AS FOLLOWS:

BIDDER UNIT PRICE TOTAL PRICE

INDUSTRIAL RESEARCH

ASSOCIATES, INC. $43,700 $460,550

JETRONIC INDUSTRIES,

INC. 48,450 504,125

AS REQUIRED BY THE INVITATION, IRA SUBMITTED THE FOLLOWING PRELIMINARY PERT/TIME DOCUMENTS AND MANNING DATA:

A. PERT WORK BREAKDOWN STRUCTURE

B. PERT NETWORK

C. MANNING CHART

AS PROVIDED BY THE INVITATION, THE PERT AND MANNING DATA ESTABLISHED WHAT IRA AGREED TO DO TO MEET THE DELIVERY REQUIREMENTS FOR BOTH FIRST ARTICLE (PREPRODUCTION) AND PRODUCTION DELIVERIES THROUGH THE FIRST MONTH OF PRODUCTION DELIVERY, AS FOLLOWS: "4. * * * THE PERT AND MANNING DATA SUBMITTED WILL ESTABLISH WHAT THE BIDDER AGREES TO DO TO MEET THE DELIVERY REQUIREMENTS FOR BOTH PREPRODUCTION AND PRODUCTION DELIVERIES THROUGH THE FIRST MONTH OF PRODUCTION DELIVERIES. THE PERT AND MANNING DATA SUBMITTED BY A BIDDER WILL BECOME PART OF ANY RESULTING CONTRACT THAT MAY BE AWARDED TO THAT BIDDER, AND ANY FAILURE TO ADHERE TO THE WORK PLAN SHOWN ON THE PERT AND MANNING SUBMITTAL SHALL BE A FAILURE TO PERFORM A PROVISION OF THE CONTRACT WITHIN THE MEANING OF THE CLAUSE OF THE CONTRACT ENTITLED - DEFAULT.- "5. IF AN OFFEROR FOR WHOM THE PREPRODUCTION REQUIREMENTS WILL NOT BE DELETED FAILS TO SUBMIT SATISFACTORY PERT AND MANNING DATA PURSUANT TO PARAGRAPH 4 ABOVE, HIS OFFER WILL BE NON-CONFORMING AND REJECTED. BE SATISFACTORY THE PERT AND MANNING DATA SUBMITTED MUST BE SUFFICIENTLY COMPLETE, DETAILED AND FEASIBLE TO AFFIRMATIVELY SHOW THAT THE OFFEROR HAS OFFERED AND AGREES TO A REALISTIC WORK PLAN FOR MEETING DELIVERY UIREMENTS.'

THE ADMINISTRATIVE OFFICE REPORTS THAT IRA'S BID WAS REJECTED AS BEING NONRESPONSIVE. THEREFORE, AWARD WAS MADE TO JETRONIC ON JULY 17, 1967, AS THE LOWEST RESPONSIVE BIDDER. WHILE IT APPEARS THAT CERTAIN OF THE REASONS ASSIGNED FOR REJECTING THE BID RELATED TO ITS RESPONSIBILITY, WE THINK THAT THE BID OF IRA WAS NONRESPONSIVE IN AT LEAST ONE MATERIAL RESPECT AND, THEREFORE, THE REJECTION OF ITS BID WAS LEGALLY PROPER. ALTHOUGH YOU ALLEGE THAT IRA DID NOT TAKE ANY EXCEPTION TO THE DELIVERY TERMS OF THE INVITATION, THE ADMINISTRATIVE OFFICE POINTS OUT THAT THE FIRST ARTICLE APPROVAL--GOVERNMENT TESTING AND FIRST ARTICLE (GOVERNMENT TESTING) SPECIAL PROVISION CLAUSES OF THE INVITATION SCHEDULE, SECTION "C," PAGES 8 AND 9, REQUIRED THE DELIVERY OF THE FIRST ARTICLE (PREPRODUCTION) UNIT, 150 DAYS AFTER THE DATE OF THE CONTRACT. IT REPORTS THAT THE WORK PLAN OF IRA REQUIRED 168-1/2 DAYS AS SHOWN BY THE RED CRITICAL PATH OF THE PERT NETWORK SUBMITTED WITH ITS BID. IN YOUR LETTER OF OCTOBER 26, 1967, YOU ADMIT THAT IF THE WORK PLAN CONTAINED IN THE PERT AND MANNING DATA REQUIRED 168-1/2 DAYS FOR DELIVERY OF THE FIRST ARTICLE, IT WOULD BE INCONSISTENT WITH THE REQUIREMENT OF THE INVITATION. HOWEVER, YOU CONTEND THAT THE NAVY IS MISTAKEN AND THAT THE PERT NETWORK SHOWS THAT THE TIME ACTUALLY REQUIRED FOR DELIVERY OF THE FIRST ARTICLE IS 128 1/2 DAYS. YOU STATE THAT THE PERT CHART RED LINE PATH SHOWS SHEETS 200 (2 DAYS), 10,000 (1 DAY), 17,000 (95.5 DAYS) AND 19,000 (30 DAYS). WE HAVE EXAMINED THOSE SHEETS AND AGREE WITH YOU EXCEPT FOR THE 30 DAYS SHOWN ON SHEET 19,000. ON THAT RED LINE PATH, THE NUMERAL 30 APPEARS TWO TIMES. ADDING THE ADDITIONAL 30 TO THE 128-1/2 IT IS CLEAR THAT IRA INDICATED DELIVERY OF THE FIRST ARTICLE WOULD TAKE LONGER THAN THE 150 DAYS SPECIFIED IN THE INVITATION.

WHILE YOU ALLEGE THAT THE ADDITIONAL 30 DAYS WAS INCLUDED IN ERROR, THE QUESTION THEN ARISES AS TO WHETHER A NONRESPONSIVE BID MAY BE CORRECTED ON THE BASIS OF AN ALLEGATION THAT THE REASON FOR THE BID BEING NONRESPONSIVE WAS A MISTAKE. WE HAVE HELD THAT AN UNRESPONSIVE BID DOES NOT CONSTITUTE AN OFFER WHICH MAY PROPERLY BE ACCEPTED, AND TO PERMIT A BIDDER TO MAKE HIS BID RESPONSIVE BY CHANGING, ADDING TO, OR DELETING A PART OF THE BID ON THE BASIS OF AN ERROR ALLEGED AFTER OPENING WOULD BE TANTAMOUNT TO PERMITTING A BIDDER TO SUBMIT A NEW BID. CONSEQUENTLY, WE ARE OF THE OPINION THAT AN ALLEGATION OF ERROR IS PROPER FOR CONSIDERATION ONLY IN CASES WHERE THE BID IS RESPONSIVE TO THE INVITATION AND IS OTHERWISE PROPER FOR ACCEPTANCE. 38 COMP. GEN. 819.

WE CANNOT AGREE WITH YOUR CONTENTION THAT THE INVITATION WAS RESTRICTIVE OF COMPETITION BECAUSE NO NEW SUPPLIER COULD MEET THE CONTRACT DELIVERY REQUIREMENTS. IT IS REPORTED THAT TWO FIRMS HAD PREVIOUSLY DELIVERED THE SUPPLIES. HENCE, IT APPEARS THAT COMPETITION WAS AVAILABLE. SEE ASPR 2- 102.1 (A) WHICH PROVIDES IN PART THAT:

"* * * PROCUREMENTS SHALL GENERALLY BE MADE BY SOLICITING BIDS FROM ALL QUALIFIED SOURCES OF SUPPLIES OR SERVICES DEEMED NECESSARY BY THE CONTRACTING OFFICER TO ASSURE FULL AND FREE COMPETITION CONSISTENT WITH THE PROCUREMENT OF THE REQUIRED SUPPLIES OR SERVICES. * * *"

THEREFORE, IT WOULD HAVE BEEN IMPROPER TO NEGOTIATE A CONTRACT ON A SOLE- SOURCE BASIS. WHILE IT APPEARS THAT A NEW SUPPLIER OF THE ITEMS POSSIBLY COULD NOT MEET THE DELIVERY REQUIREMENTS, THAT FACT DOES NOT, IN OUR OPINION, RENDER THE INVITATION UNDULY RESTRICTIVE OF COMPETITION. WE HAVE HELD CONSISTENTLY THAT WHILE THE LAW REQUIRING ADVERTISING FOR BIDS CONTEMPLATES UNRESTRICTED COMPETITION, THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE TO MEET THE MINIMUM ADVERTISED REQUIREMENTS FOR SUPPLYING THE NEEDS OF THE GOVERNMENT WILL NOT BE SUFFICIENT TO WARRANT THE CONCLUSION THAT THE INVITATION WAS UNDULY RESTRICTIVE. 30 COMP. GEN. 368.