B-162378, DEC. 21, 1967

B-162378: Dec 21, 1967

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TO UNITED STATES HELIUM: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED AUGUST 30. YOU ALLEGE THAT YOUR COMPANY WAS THE LOW BIDDER. THE INVITATION WAS FOR A FEDERAL SUPPLY SCHEDULE CONTRACT COVERING FSC GROUP 68. THE BIDS WERE OPENED ON JUNE 19. YOUR NET PRICES WERE LOW ON 12 ITEMS. ON ONE OTHER ITEM YOU WERE THE ONLY BIDDER. THE BLOCK WAS COMPLETED TO SHOW ALSO A ONE PERCENT PROMPT PAYMENT DISCOUNT WITHIN 20 DAYS AND THE NET PRICE FOR PAYMENT WITHIN 30 DAYS. THE CONTRACTING OFFICER CONSIDERED THAT THE PROVISION QUOTED CONSTITUTED A MATERIAL QUALIFICATION TO YOUR BID WHICH WAS. BLOCK 16 OF THE STANDARD FORM PROVIDES A MEANS WHEREBY A BIDDER MAY OFFER A DISCOUNT TO HIS BID PRICE IF PAYMENT IS MADE WITHIN A GIVEN PERIOD OF TIME.

B-162378, DEC. 21, 1967

TO UNITED STATES HELIUM:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED AUGUST 30, 1967, PROTESTING AWARD OF CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. FPNGC-E-27499-A-6-5-67, ISSUED BY THE GENERAL SERVICES ADMINISTRATION. IN PARTICULAR, YOU ALLEGE THAT YOUR COMPANY WAS THE LOW BIDDER, AND FURTHER THAT NO AWARD SHOULD BE MADE TO ANY BIDDER FAILING TO ACKNOWLEDGE AND RETURN AMENDMENT NO. 1 TO THE INVITATION.

THE INVITATION WAS FOR A FEDERAL SUPPLY SCHEDULE CONTRACT COVERING FSC GROUP 68, PART III, CHEMICALS AND CHEMICAL PRODUCTS, CLASS 6830 GASES, COMPRESSED AND LIQUIFIED, SECTION G. HELIUM, FOR THE PERIOD SEPTEMBER 1, 1967, THROUGH AUGUST 31, 1968. THE BIDS WERE OPENED ON JUNE 19, 1967, AND YOUR NET PRICES WERE LOW ON 12 ITEMS. ON ONE OTHER ITEM YOU WERE THE ONLY BIDDER.

HOWEVER, YOUR BID INCLUDED IN BLOCK 16, DISCOUNT FOR PROMPT PAYMENT, OF STANDARD FORM 33, JULY 1966, A STATEMENT ADDED TO THE BLOCK TITLE TO READ IN FULL: "DISCOUNT FOR PROMPT PAYMENT AFTER DATE OF INVOICE. INTEREST CHARGED AT 1 PERCENT PER MONTH AFTER 30 DAYS.' THE BLOCK WAS COMPLETED TO SHOW ALSO A ONE PERCENT PROMPT PAYMENT DISCOUNT WITHIN 20 DAYS AND THE NET PRICE FOR PAYMENT WITHIN 30 DAYS. THE CONTRACTING OFFICER CONSIDERED THAT THE PROVISION QUOTED CONSTITUTED A MATERIAL QUALIFICATION TO YOUR BID WHICH WAS, THEREFORE, REJECTED.

BLOCK 16 OF THE STANDARD FORM PROVIDES A MEANS WHEREBY A BIDDER MAY OFFER A DISCOUNT TO HIS BID PRICE IF PAYMENT IS MADE WITHIN A GIVEN PERIOD OF TIME. PURSUANT TO FPR 1-2.407-3 (B), THE PROMPT PAYMENT DISCOUNT OFFERED IS DEDUCTED FROM THE PRICE IN EVALUATING THE BID UNLESS THE PROMPT PAYMENT PERIOD IS LESS THAN THE MINIMUM SPECIFIED IN THE INVITATION. PARAGRAPH 9 (A) OF STANDARD FORM 33A, JULY 1966, WHICH IS ALSO A PART OF THE INVITATION, PROVIDES THAT A PROMPT PAYMENT DISCOUNT PRICE OF LESS THAN 20 DAYS WILL NOT BE CONSIDERED. PARAGRAPH 9 (B) STATES THAT, IN CONNECTION WITH ANY DISCOUNT OFFERED, TIME IS COMPUTED FROM DATE OF DELIVERY OR DATE OF RECEIPT OF CORRECT INVOICE WHICHEVER IS LATER.

IF IT WAS YOUR INTENTION TO OFFER A PROMPT PAYMENT DISCOUNT FOR PAYMENT WITHIN 30 DAYS, IT CERTAINLY WOULD HAVE BEEN MORE APPROPRIATE TO MAKE THE OFFER IN THE MANNER CONTEMPLATED BY THE TERMS OF THE INVITATION. THIS WOULD HAVE CALLED FOR A NET PRICE WITH A REDUCTION FOR PAYMENT WITHIN THE DESIRED TIME. HOWEVER, EVEN IF IT COULD BE CONSIDERED THAT YOUR BID OFFERED A 30-DAY PROMPT PAYMENT DISCOUNT--THAT IS, THAT THE PRICES YOU STATED WERE LESS THE DISCOUNT FOR PAYMENT WITHIN 30 DAYS AND THE NET PRICES WERE SOME PERCENTAGE IN EXCESS OF THOSE PRICES--THE OFFER WOULD FAIL BECAUSE YOUR BID PROVIDES THAT THE DISCOUNT PERIOD BEGINS FROM TIME OF INVOICE. THIS IS DISTINCTLY DIFFERENT THAN THE START OF THE DISCOUNT PERIOD PROVIDED IN STANDARD FORM 33A: DATE OF DELIVERY OR RECEIPT, WHICHEVER IS LATER. THEREFORE, THE REVERSE "PROMPT PAYMENT DISCOUNT" OFFERED BY YOU MAY NOT PROPERLY BE CONSIDERED IN THE EVALUATION OF YOUR BID.

SO FAR AS CONCERNS THE DISCOUNT OF ONE PERCENT OFFERED FOR PAYMENT WITHIN 20 DAYS, WE READ IT ALSO AS CONDITIONED ON THE DISCOUNT PERIOD BEGINNING TO RUN FROM DATE OF INVOICE. FOR THE REASONS STATED ABOVE SUCH DISCOUNT MAY NOT BE CONSIDERED IN BID EVALUATION. FURTHER, AS WE CONSTRUE YOUR STATEMENT INSERTED IN BLOCK 16, ACCEPTANCE OF YOUR BID WOULD OBLIGATE THE GOVERNMENT TO MAKE PAYMENT AS OF THE DATE OF INVOICE. WE BELIEVE THIS IS A MATERIAL QUALIFICATION OF PARAGRAPH 7 OF STANDARD FORM 32, JUNE 1964 EDITION, INCORPORATED BY REFERENCE INTO THE IFB. SEE BLOCK 9 OF STANDARD FORM 33. PARAGRAPH 7 PROVIDES, IN EFFECT, THAT THE BIDDER IS NOT ENTITLED TO PAYMENT UNTIL SUBMISSION OF AN INVOICE OR VOUCHER "FOR SUPPLIES DELIVERED AND ACCEPTED OR SERVICES RENDERED.' QUALIFICATIONS AFFECTING PRICE MATERIALLY CHANGE THE TERMS OF THE INVITATION AND ACCEPTANCE OF YOUR BID WOULD VIOLATE THE RULE THAT A CONTRACT WHICH IS REQUIRED BY LAW TO BE AWARDED MUST BE THE CONTRACT WHICH WAS SUBMITTED TO ALL BIDDERS. SEE 38 COMP. GEN. 131.

YOU ALSO PROTEST ANY AWARD TO A BIDDER FAILING TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 1 TO THE INVITATION FOR BIDS. AWARDS WERE MADE TO LIQUID CARBONICS CORPORATION AND GARDNER CRYOGENICS ON AUGUST 30, 1967, AND SEPTEMBER 28, 1967, RESPECTIVELY. NEITHER OF THE TWO SUCCESSFUL BIDDERS ACKNOWLEDGED RECEIPT OF THE AMENDMENT. AMENDMENT NO. 1 TO THE INVITATION FOR BIDS PROVIDES IN ESSENCE: PARAGRAPH 1. DATE FOR BID OPENING WAS EXTENDED FROM 12:30 P.M., E.D.T., JUNE 5, 1967, TO 12:30 P.M., E.D.T., JUNE 19, 1967. PARAGRAPH 2. A. INSPECTION AT THE SOURCE PRIOR TO SHIPMENT WAS MADE DISCRETIONARY RATHER THAN MANDATORY UNDER PARAGRAPH 12 (A), PAGE 7, OF THE SPECIAL PROVISIONS OF THE INVITATION. B. THE REQUIREMENT OF PARAGRAPH 12 (B), PAGE 7, OF SPECIAL PROVISIONS OF THE INVITATION THAT ALL GRADE A HELIUM CONFORM TO INTERIM FEDERAL SPECIFICATION BB-H-001168 (GSA-FSS) DATED FEBRUARY 13, 1967, WAS ELIMINATED. PARAGRAPH 3. ADDED AFTER THE DATE FEBRUARY 13, 1967, IN THE PURCHASE DESCRIPTIONS AT PAGE 11, GROUP 1; PAGE 24, GROUP 2; PAGE 34, GROUP 3; THE LANGUAGE: "EXCEPT THAT PARAGRAPH 3.1 IS DELETED IN ITS ENTIRETY AND REPLACED BY PARAGRAPH 3.1 GRADE A HELIUM (VIV) 99.995 AND THAT SUB-PARAGRAPH (A) THROUGH (F) OF PARAGRAPH 3.6 ARE DELETED AND PARAGRAPH 4.5.2 THROUGH 4.5.6 ARE DELETED.' PARAGRAPH 4. THE ESTIMATED QUANTITY OF ITEM 2-27 WAS CHANGED FROM 25,000 TO 425,000. THE AMENDMENT ALSO PROVIDED: "FAILURE OF A BIDDER TO SIGN AND RETURN THIS AMENDMENT IN TIME FOR BID OPENING SHALL CAUSE REJECTION OF BID.' FOR THIS REASON YOU CONTEND THAT AWARD COULD NOT BE MADE TO ANY BIDDER NOT ACKNOWLEDGING THE AMENDMENT.

GENERALLY IF AN AMENDMENT TO AN INVITATION AFFECTS THE PRICE, QUANTITY OR QUALITY OF A PROCUREMENT, THE FAILURE OF A BIDDER TO ACKNOWLEDGE ITS RECEIPT IN THE MANNER REQUIRED BY THE INVITATION RENDERS THE BID NONRESPONSIVE. 44 COMP. GEN. 753; 40 ID. 48; 37 ID. 785. HOWEVER, OUR OFFICE HAS HELD THAT A REQUIREMENT CANNOT BE MADE MATERIAL BY THE LANGUAGE OF THE INVITATION UNLESS SOME RELEVANT PURPOSE IS SERVED THEREBY AND THE FAILURE TO COMPLY IS NOT MERELY A MATTER OF FORM WHICH IS TRIVIAL OR NEGLIGIBLE. 44 COMP. GEN. 753; 41 ID. 550; 40 ID. 435; 39 ID. 595, 881. CONSISTENT THEREWITH FPR 1 2.405 PROVIDES:

"A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM AND NOT OF SUBSTANCE OR PERTAINS TO SOME IMMATERIAL OR INCONSEQUENTIAL DEFECT OR VARIATION OF A BID FROM THE EXACT REQUIREMENT OF THE INVITATION FOR BIDS, THE CORRECTION OR WAIVER OF WHICH WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. THE DEFECT OR VARIATION IN THE BID IS IMMATERIAL AND INCONSEQUNTIAL WHEN ITS SIGNIFICANCE AS TO PRICE, QUANTITY, QUALITY, OR DELIVERY IS TRIVIAL OR NEGLIGIBLE WHEN CONTRASTED WITH THE TOTAL COST OR SCOPE OF THE SUPPLIES OR SERVICES BEING PROCURED. THE CONTRACTING OFFICER SHALL EITHER GIVE THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID OR WAIVE SUCH DEFICIENCY, WHICHEVER IS TO THE ADVANTAGE OF THE GOVERNMENT. EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:

"/D) FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN INVITATION FOR BIDS, BUT ONLY IF:

"/1) THE BID RECEIVED CLEARLY INDICATES THAT THE BIDDER RECEIVED THE AMENDMENT, SUCH AS WHERE THE AMENDMENT ADDED ANOTHER ITEM TO THE INVITATION FOR BIDS AND THE BIDDER SUBMITTED A BID HEREON; OR

"/2) THE AMENDMENT INVOLVES ONLY A MATTER OF FORM OR IS ONE WHICH HAS EITHER NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUANTITY, QUALITY, OR DELIVERY OF THE ITEM BID UPON.' ACCORDINGLY, WHETHER THE FAILURE TO SIGN AND RETURN THE AMENDMENT REQUIRES REJECTION OF THE BIDS BY GARDNER CRYOGENICS AND LIQUID CARBONICS DEPENDS UPON THE PURPOSE OF THE AMENDMENT.

PARAGRAPH 1 OF THE AMENDMENT EXTENDED THE TIME FOR BID OPENING AND HAD NO EFFECT ON PRICE, QUANTITY, QUALITY OR DELIVERY OF THE ITEM BID UPON.

IF PARAGRAPHS 2 AND 3 OF THE AMENDMENT HAD ANY EFFECT ON PRICE, QUANTITY, QUALITY, OR DELIVERY, IT WOULD HAVE BEEN TO DECREASE THE PRICE. WE HAVE HELD WHERE THE AMENDMENT MERELY EFFECTS A DECREASE IN COST OF PERFORMANCE, FAILURE TO ACKNOWLEDGE IT SHOULD BE WAIVED AS A MINOR INFORMALITY. 159412, JULY 26, 1966. PARAGRAPH 2 MADE INSPECTION AT THE SOURCE DISCRETIONARY INSTEAD OF MANDATORY AND DELETED SUBPARAGRAPH 12 (B) OF SPECIAL PROVISIONS OF THE INVITATION. PARAGRAPH 3 DELETED CERTAIN REQUIREMENTS OF INTERIM FEDERAL SPECIFICATION BB-H-001168 (GSA-FSS) FEBRUARY 13, 1967, AND REPLACED THOSE REQUIREMENTS WITH LESS STRINGENT ONES. THAT PARAGRAPH ALSO ELIMINATED THE CONTRACTOR'S OPTION OF TESTS TO BE PERFORMED TO DETERMINE THE QUALITY OF HELIUM OFFERED. HOWEVER, THE EFFECT OF THIS CHANGE ON THE BIDS IS MORE THEORETICAL THAN REAL INASMUCH AS THE TEST ELIMINATED REQUIED MORE COMPLICATED AND EXPENSIVE EQUIPMENT WHICH WAS LESS COMMONPLACE.

PARAGRAPH 4 OF THE AMENDMENT CHANGED THE ESTIMATED QUANTITY OF ITEM 2-27 FROM 25,000 CUBIC FEET TO 425,000 CUBIC FEET. AN ESTIMATE DOES NOT ESTABLISH THE QUANTITY TO BE FURNISHED AND CANNOT BE RELIED ON TO LIMIT SUCH QUANTITY TO THAT ESTIMATE. SEE B-143438, JUNE 22, 1961. FURTHER, THE BIDS WERE QUOTED ON PRICE PER CUBIC FOOT BASIS AND IN VIEW OF THE RELUCTANCE OF MOST BIDDERS TO ACCEPT SMALL ORDERS, THE INCREASE IN THE ESTIMATED QUANTITY WOULD ONLY PLACE THE BIDDERS ACKNOWLEDGING THE AMENDMENT IN A MORE FAVORABLE POSITION.

ACCORDINGLY, IN VIEW OF THE EFFECT OF AMENDMENT NO. 1, WE FIND NO LEGAL OBJECTION TO THE ADMINISTRATIVE ACTION TAKEN IN THIS MATTER. IT IS ALSO NOTED THAT THE BID BY GARDNER CYROGENICS WAS DATED AFTER THE ORIGINAL BID OPENING DATE AND REFLECTED THE CHANGES MADE IN PARAGRAPH 12 OF THE SPECIAL PROVISIONS BY THE AMENDMENT. THIS CLEARLY INDICATES GARDNER RECEIVED THE AMENDMENT. SEE FPR 1-2.405 (D) (1). FOR THESE REASONS YOUR PROTEST MUST BE DENIED.