B-162451, DEC. 19, 1967

B-162451: Dec 19, 1967

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 11. WHICH WAS ISSUED BY WARNER ROBINS AIR FORCE BASE ON JULY 5. (A) NOTWITHSTANDING THE FACT THAT A BLANK IS PROVIDED FOR A TEN (10) DAY DISCOUNT. PROMPT PAYMENT DISCOUNTS OFFERED FOR PAYMENT WITHIN LESS THAN TWENTY (20) CALENDAR DAYS WILL NOT BE CONSIDERED IN EVALUATING OFFERS FOR AWARD. OFFERED DISCOUNTS OF LESS THAN 20 DAYS WILL BE TAKEN IF PAYMENT IS MADE WITHIN THE DISCOUNT PERIOD. 246.56 SHOULD HAVE BEEN EVALUATED BY DEDUCTING A 10 DAY PROMPT PAYMENT DISCOUNT OF 1/2 PERCENT. IN WHICH CASE YOUR BID WOULD HAVE BEEN DETERMINED TO BE $74.96 LOWER THAN THE BID OF REYNOLDS. YOU HAVE FURNISHED INVOICES PAID BY THE SAME ADMINISTERING OFFICE UNDER A PREVIOUS CONTRACT ON WHICH 10 DAY DISCOUNTS WERE FREQUENTLY TAKEN.

B-162451, DEC. 19, 1967

TO DEMAC MANUFACTURING COMPANY, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 11, 1967, AND SUBSEQUENT CORRESPONDENCE IN WHICH YOU PROTESTED AN AWARD MADE TO THE REYNOLDS METALS COMPANY UNDER INVITATION FOR BIDS (IFB) 09603-68-B 0025, WHICH WAS ISSUED BY WARNER ROBINS AIR FORCE BASE ON JULY 5, 1967, FOR THE FURNISHING OF 7,496 CARTONS OF COUNTERMEASURE CHAFF.

SOLICITATION INSTRUCTION AND CONDITION NO. 9 OF THE IFB STATED THAT PROMPT PAYMENT DISCOUNTS OFFERED BY BIDDERS WOULD BE ACCEPTED AS FOLLOWS: "9. DISCOUNTS. (A) NOTWITHSTANDING THE FACT THAT A BLANK IS PROVIDED FOR A TEN (10) DAY DISCOUNT, PROMPT PAYMENT DISCOUNTS OFFERED FOR PAYMENT WITHIN LESS THAN TWENTY (20) CALENDAR DAYS WILL NOT BE CONSIDERED IN EVALUATING OFFERS FOR AWARD, UNLESS OTHERWISE SPECIFIED IN THE SOLICITATION. HOWEVER, OFFERED DISCOUNTS OF LESS THAN 20 DAYS WILL BE TAKEN IF PAYMENT IS MADE WITHIN THE DISCOUNT PERIOD, EVEN THOUGH NOT CONSIDERED IN THE EVALUATION OF OFFERS.'

NOTWITHSTANDING THE ADVICE IN 9 ABOVE, YOU INSERTED "1/2" IN THE BLANK SPACE OF ITEM 16 ON THE FACE SHEET OF THE BID, WHICH READS AS FOLLOWS:

"16. DISCOUNT FOR PROMPT PAYMENT

------------PERCENT 10 CALENDAR DAYS.' YOU CONTEND THAT YOUR BID OF $381,246.56 SHOULD HAVE BEEN EVALUATED BY DEDUCTING A 10 DAY PROMPT PAYMENT DISCOUNT OF 1/2 PERCENT, AMOUNTING TO $1,906.23, IN WHICH CASE YOUR BID WOULD HAVE BEEN DETERMINED TO BE $74.96 LOWER THAN THE BID OF REYNOLDS. ADDITIONALLY, YOU HAVE FURNISHED INVOICES PAID BY THE SAME ADMINISTERING OFFICE UNDER A PREVIOUS CONTRACT ON WHICH 10 DAY DISCOUNTS WERE FREQUENTLY TAKEN, AND YOU CONTEND SUCH VOUCHERS SHOW THAT A 10 DAY DISCOUNT SHOULD HAVE BEEN PRESCRIBED IN THE SUBJECT INVITATION FOR BID EVALUATION PURPOSES.

THE PROVISIONS OF SOLICITATION INSTRUCTION AND CONDITION NO. 9 SPECIFICALLY STATED THAT IF BIDDERS OFFERED PROMPT PAYMENT DISCOUNTS OF LESS THAN 20 DAYS, THE REDUCTIONS WOULD NOT BE CONSIDERED IN PRICING THE BIDS UNLESS OTHERWISE SPECIFIED IN THE IFB. SINCE THE CONSIDERATION OF PAYMENT DISCOUNTS OF LESS THAN 20 DAYS WAS NOT OTHERWISE SPECIFIED IN THE IFB, ALL BIDDERS WERE ENTITLED TO RELY UPON CONDITION NO. 9 AND THE 10 DAY DISCOUNT YOU OFFERED COULD NOT BE CONSIDERED IN FAIRNESS TO OTHER BIDDERS; OTHERWISE, BIDDERS COULD NOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW SINCE THEY WOULD NOT KNOW THE PRECISE BASIS ON WHICH BIDS WOULD BE EVALUATED. B-160279, DECEMBER 1, 1966. CONSEQUENTLY, UNDER THE TERMS OF THE IFB WE MUST CONCLUDE THAT THE BID OF REYNOLDS METALS COMPANY WAS PROPERLY DETERMINED TO BE THE LOWEST AT $381,171.60.

CONCERNING YOUR CONTENTION THAT BIDS SHOULD HAVE BEEN SOLICITED ON A 10 DAY DISCOUNT BASIS, THE PROCURING ACTIVITY ADVISES US THAT THE STANDARD 20 DAY DISCOUNT PERIOD WAS UTILIZED BECAUSE IT DID NOT HAVE ANY SPECIFIC INFORMATION FROM THE CONTRACT ADMINISTRATION OFFICES WHETHER THEY COULD MAKE PAYMENTS IN LESS THAN 20 DAYS ON THE SUBJECT AWARD, BUT THAT BASED UPON LOCAL PAYMENT PERIODS 20 DAYS APPEARED REALISTIC. CONSIDERING THIS ADVICE WE CANNOT HOLD THAT THE DECISION TO USE THE 20 DAY DISCOUNT IN THE SUBJECT IFB WAS IMPROPER. BECAUSE OF THE DATA YOU HAVE SENT TO US, HOWEVER, WE WILL GIVE FURTHER CONSIDERATION TO WHETHER DISCOUNT PERIODS OF LESS THAN TWENTY DAYS COULD PROPERLY BE PRESCRIBED FOR FUTURE PROCUREMENTS.