B-162201, OCT. 4, 1967

B-162201: Oct 4, 1967

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BIDDER COULD HAVE ESTIMATED COST OF SPARE PARTS KITS AND INCLUDED SUCH AMOUNT IN BID PRICE. SINCE CONDITION ON BID WAS INTEGRAL PART OF BID QUALIFICATION COULD NOT BE WAIVED AS INFORMALITY. TO FUTURE CRAFT CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1. THE SOLICITATION FOR BIDS WAS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT FOR THE MANUFACTURE AND DELIVERY OF 60 TO 300 UNITS OF A PORTABLE PRESSURE GAGE COMPARATOR. FOUR BIDS WERE RECEIVED ON JUNE 27. THE LOWEST APPARENT BID WAS SUBMITTED BY YOUR FIRM. THAT THE PRICES WERE CONDITIONAL. THE NOTE REFERENCED BY THE ASTERISK ON THAT PAGE OF YOUR BID STATED: "SOFT GOODS KITS AND PRICES WILL BE DETERMINED AFTER THE ACCEPTANCE OF THE PREPRODUCTION UNIT.'.

B-162201, OCT. 4, 1967

BIDS - DEVIATIONS - WAIVER PROPRIETY DECISION TO FUTURE CRAFT CORPORATION CONCERNING REJECTION OF BID FOR TWO- STEP PROCUREMENT FOR QUANTITY OF PORTABLE PRESSURE GAGE COMPARATORS BY NAVY PURCHASING OFFICE, LOS ANGELES, CALIFORNIA. LOW BIDDER WHO SUBMITTED CONDITIONAL PRICE FOR SPARE PARTS BECAUSE MANUFACTURER ALSO A BIDDER WOULD NOT FURNISH A PRICE FOR THE SPARE PARTS KIT MUST BE REGARDED AS HAVING QUALIFIED HIS BID SO AS TO MAKE THE CONTRACT PRICE INDEFINITE REQUIRING REJECTION. BIDDER COULD HAVE ESTIMATED COST OF SPARE PARTS KITS AND INCLUDED SUCH AMOUNT IN BID PRICE, PARTICULARLY SINCE SPARE PARTS REPRESENTED NEGLIGIBLE AMOUNT OF BID. SINCE CONDITION ON BID WAS INTEGRAL PART OF BID QUALIFICATION COULD NOT BE WAIVED AS INFORMALITY.

TO FUTURE CRAFT CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1, 1967, WITH ENCLOSURES, PROTESTING THE REJECTION OF YOUR BID AS NONRESPONSIVE UNDER SOLICITATION NO. N00123-67-B-2161-C, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, LOS ANGELES, CALIFORNIA, ON JUNE 15, 1967.

THE SOLICITATION FOR BIDS WAS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT FOR THE MANUFACTURE AND DELIVERY OF 60 TO 300 UNITS OF A PORTABLE PRESSURE GAGE COMPARATOR, LIQUID AND GAS. PARAGRAPH 2.4 OF THE SPECIFICATIONS PROVIDED THAT CERTAIN SPARE PARTS REQUIRED FOR COMPLETE OVERHAUL OF EACH ASSEMBLY SHALL BE FURNISHED. FOUR BIDS WERE RECEIVED ON JUNE 27, 1967, IN RESPONSE TO THE SECOND STEP OF THE PROCUREMENT. THE LOWEST APPARENT BID WAS SUBMITTED BY YOUR FIRM. HOWEVER, ON THE PRICE SCHEDULE PAGE OF YOUR BID, YOU INDICATED BY AN ASTERISK PLACED IN THE UNIT PRICE COLUMN, THAT THE PRICES WERE CONDITIONAL. THE NOTE REFERENCED BY THE ASTERISK ON THAT PAGE OF YOUR BID STATED: "SOFT GOODS KITS AND PRICES WILL BE DETERMINED AFTER THE ACCEPTANCE OF THE PREPRODUCTION UNIT.'

IT IS REPORTED THAT ON JUNE 27, 1967, SHORTLY AFTER THE BID OPENING,AN OFFICIAL OF THE NAVY PURCHASING OFFICE CONTACTED A MR. CASTER OF YOUR FIRM FOR A CLARIFICATION OF THE ASTERISK NOTATION ON YOUR BID. THE NAVY OFFICIAL WAS ADVISED BY MR. CASTER THAT THE NOTATION REFERRED TO THE REQUIREMENT UNDER PARAGRAPH 2.4 OF THE SPECIFICATIONS FOR SPARE PARTS, AND THAT THE COST OF THE SEAL REPACK KIT FOR THE PUMP ASSEMBLY REFERENCED IN THE SPECIFICATIONS WAS NOT AVAILABLE FROM THE MANUFACTURER, WHO WAS ALSO ONE OF THE BIDDERS. THE APPROXIMATE PRICE FOR THE KITS WAS STATED TO BE $50. MR. CASTER WAS ADVISED BY THE PROCUREMENT OFFICIAL THAT THE PRICE BID BY HIS COMPANY WAS NOT A FIRM PRICE AND THAT IN ACCORDANCE WITH INSTRUCTIONS CONTAINED IN PARAGRAPH3 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, THE COMPANY SHOULD HAVE CONTACTED THE PURCHASING OFFICE IF IT WAS UNCERTAIN HOW TO RESOLVE THE PROBLEM, OR IF, AS ALLEGED BY MR. CASTER, THE ITEMS INVOLVED REPRESENTED A NEGLIGIBLE AMOUNT, A UNIT PRICE COULD AND SHOULD HAVE BEEN COMPUTED INCLUDING THE ESTIMATED COST OF THE SPARE PARTS. IT ALSO IS REPORTED THAT WHEN MR. CASTER STATED THAT HIS COMPANY WOULD INCLUDE THE COST OF THE SPARE PARTS IN ITS BID PRICE, HE WAS ADVISED THAT THIS WOULD NOT BE POSSIBLE UNDER FORMAL ADVERTISING BID PROCEDURES. ON JUNE 28, 1967, THE NAVY PURCHASING OFFICE REVIEW BOARD DETERMINED THAT YOUR BID WAS RENDERED NONRESPONSIVE BY YOUR FAILURE TO STATE A FIRM PRICE FOR THE REQUIRED EQUIPMENT. SUBSEQUENTLY, A CONTRACT FOR FURNISHING THE EQUIPMENT WAS AWARDED TO THE LOWEST RESPONSIBLE, RESPONSIVE BIDDER.

IN RESPONSE TO YOUR LETTER OF JULY 13, 1967, PROTESTING THE REJECTION OF YOUR BID, THE CONTRACTING OFFICER ADVISED YOU THAT SINCE YOU HAD QUALIFIED YOUR BID BY CONDITIONING YOUR PRICES UPON AN OCCURENCE OF AN EVENT AFTER ACCEPTANCE OF THE PREPRODUCTION UNIT, YOUR BID WAS REQUIRED TO BE REJECTED AS NONRESPONSIVE PURSUANT TO PARAGRAPH 2-404.2 (D) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). THIS PARAGRAPH PROVIDES THAT A BID SHOULD BE REJECTED WHERE THE BIDDER ATTEMPTS TO IMPOSE CONDITIONS WHICH WOULD MODIFY THE REQUIREMENTS OF THE INVITATION OR LIMIT HIS LIABILITY TO THE GOVERNMENT. ONE OF THE EXAMPLES GIVEN THEREIN WHICH WOULD REQUIRE BID REJECTION IS WHERE A BIDDER STATES A PRICE, BUT QUALIFIES SUCH A PRICE AS BEING SUBJECT TO "PRICE IN EFFECT AT TIME OF DELIVERY.'

IN YOUR LETTER OF AUGUST 1, 1967, TO OUR OFFICE, YOU PROTESTED THE REJECTION OF YOUR BID AND THE MAKING OF AN AWARD TO ANOTHER BIDDER UNDER THIS INVITATION. YOU STATE THAT PRIOR TO THE SUBMISSION OF YOUR BID, YOU TRIED TO OBTAIN THE PRICE OF THE SPARE PARTS OR "SOFT GOODS KITS" FROM THE MANUFACTURER, MANSFIELD AND GREEN, BUT WITHOUT SUCCESS, AND THAT IT WAS NOT UNTIL AFTER AN AWARD WAS MADE UNDER THE INVITATION IN QUESTION THAT THE MANUFACTURER FURNISHED YOU WITH A QUOTATION ON THE SOFT GOODS KIT (SPARE PARTS). YOU ALSO STATE THAT THE CONTRACTING OFFICER KNEW THAT THE PRICE OF SUCH A KIT WAS IN THE RANGE OF $7.50 TO $20 AND THAT THIS WAS AN INSIGNIFICANT COST ITEM IN THE OVERALL BID. YOU CONTEND THAT IN VIEW OF THE SUBSTANTIAL DIFFERENCE BETWEEN YOUR BID AND THE NEXT LOWEST BID AND SINCE THE TOTAL COST OF THE KITS FOR EACH UNIT WAS RELATIVELY NEGLIGIBLE, YOUR BID SHOULD NOT HAVE BEEN REJECTED ON A SUPPOSED TECHNICALITY.

IT IS FUNDAMENTAL THAT THE STATUTES RELATING TO COMPETITIVE BIDS FOR GOVERNMENT CONTRACTS CONTEMPLATE THE SUBMISSION OF BIDS WHICH ARE FIRM AND DEFINITE IN RESPECT TO THE PRICE TO BE PAID. WE HAVE CONSISTENTLY HELD THAT BIDS SO QUALIFIED AS TO RENDER THE CONTRACT PRICE INDEFINITE ARE FOR REJECTION FOR UNCERTAINTY. 19 COMP. GEN. 614; 37 ID. 780. THE INVITATION FOR BIDS IN THIS CASE CLEARLY REQUIRED THE SUBMISSION OF BIDS ON A FIRM, FIXED-PRICE BASIS TO ENABLE THE GOVERNMENT TO DETERMINE EXACTLY THE COST OF THE DESIRED EQUIPMENT COMPLETE WITH SPARE PARTS. SINCE THE PRICE FOR THE SOFT GOODS KIT (SPARE PARTS) WOULD BE DETERMINED AFTER ACCEPTANCE OF THE PREPRODUCTION UNIT BY THE GOVERNMENT, YOUR BID AS SUBMITTED OBVIOUSLY WAS NOT DEFINITE AND CERTAIN SO AS TO PERMIT A DETERMINATION AS TO THE FIXED PRICE OFFERED BY YOU FOR THE EQUIPMENT INCLUDING THE SOFT GOODS KITS (SPARE PARTS). WHILE THE RECORD DOES INDICATE THAT YOUR FIRM WAS UNABLE TO OBTAIN A QUOTATION ON THE SOFT GOODS KIT FROM YOUR SUPPLIER PRIOR TO THE SUBMISSION OF YOUR BID, WE BELIEVE THAT YOUR FIRM PROPERLY COULD HAVE ESTIMATED THE COST OF THE SOFT GOODS KITS AND INCLUDED THE AMOUNT OF SUCH COST IN YOUR BID PRICE, PARTICULARLY, IN VIEW OF THE NEGLIGIBLE AMOUNT INVOLVED.

WITH RESPECT TO YOUR OFFER AFTER THE BID OPENING TO DELETE THE OBJECTIONABLE CONDITION IN YOUR BID AND TO INCLUDE THE COST OF THE SPARE PARTS IN YOUR BID PRICE, WE HAVE MANY TIMES CONSIDERED THE QUESTION AS TO WHETHER A BIDDER MAY BE PERMITTED TO CHANGE A PROVISION IN ITS BID SUBSEQUENT TO THE OPENING OF THE BID, AND WE HAVE HELD THAT IF THE PROVISION BE MATERIAL AND IN ANY WAY AFFECTS THE PRICE OF THE ARTICLES OFFERED--AS IS THE CASE HERE--A CHANGE MAY NOT BE PERMITTED TO THE PREJUDICE OF OTHER BIDDERS. 38 COMP. GEN. 612; 37 ID. 780; CF. 44 ID. 193.

IT IS A CARDINAL RULE THAT A CONTRACT AWARDED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. WHERE ONE BIDDER RESERVES RIGHTS AND IMMUNITIES FROM RESPONSIBILITY NOT EXTENDED TO ALL BIDDERS BY THE ADVERTISED CONDITIONS AND SPECIFICATIONS, IT SEEMS MANIFEST THAT A CONTRACT AWARDED UPON THE BASIS OF THE CONDITIONAL BID WOULD NOT BE THE CONTRACT OFFERED TO ALL PROSPECTIVE BIDDERS. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461-463; 36 COMP. GEN. 535.

CONTRACTING OFFICIALS OF THE GOVERNMENT ARE AUTHORIZED TO WAIVE INFORMALITIES IN BIDS WHEN IN THE INTEREST OF THE GOVERNMENT. GENERALLY, THE INFORMALITIES WHICH PROPERLY MAY BE WAIVED ARE THOSE THAT DO NOT GO TO THE SUBSTANCE OF THE BID SO AS TO AFFECT EITHER THE PRICE, QUANTITY OR QUALITY OF THE MATERIAL OFFERED AND THEREFORE ARE NOT PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. 30 COMP. GEN. 179. ALSO, SEE, 40 COMP. GEN. 447. HOWEVER, THERE IS NO AUTHORITY FOR WAIVING, AFTER BID OPENING, MATERIAL CONDITIONS IMPOSED BY A BIDDER IN ITS BID. SEE ASPR 2-405.

IN THESE CIRCUMSTANCES, THE CONTRACTING OFFICER PROPERLY CONSIDERED THE CONDITION APPEARING ON YOUR BID AS AN INTEGRAL PART OF THE BID WHICH COULD NOT BE WAIVED AS A MINOR INFORMALITY OR IRREGULARITY. FOR THESE REASONS, WE CONCLUDE THAT YOUR BID WAS PROPERLY REJECTED AS BEING NONRESPONSIVE TO THE INVITATION.