B-162967, FEB. 29, 1968

B-162967, FEB. 29, 1968

BIDS - AMOUNTS - REDUCTION DECISION TO ANCHOR MACHINE CO., INC. DENYING PROTEST AGAINST AWARD OF A LESSER QUANTITY THAN ADVERTISED AND REQUEST FOR A NEGOTIATED UNIT PRICE INCREASE IN PROCUREMENT OF REFUSE CONTAINERS BY DEPT. OF THE ARMY. WHERE BEFORE BID OPENING CONTRACTING AGENCY IN ORDER TO CONSERVE FUNDS DECIDED TO REDUCE QUANTITY FROM 160 TO 100 UNITS UNDER INVITATION THAT RESERVED TO GOVT. RIGHT TO PURCHASE LESS THAN TOTAL QUANTITY, LOW BIDDER WHO WAS AWARDED CONTRACT ON BASIS OF UNIT BID PRICE MAY NOT HAVE AWARD QUESTIONED SINCE GOVT. HAD UNQUALIFIED RIGHT TO PURCHASE LESS NOTWITHSTANDING THAT PRIOR TO AWARD THAT REDUCED QUANTITY WAS KNOWN.

TO ANCHOR MACHINE COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 21, 1967, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD TO YOUR COMPANY OF A LESSER QUANTITY OF ITEMS THAN ADVERTISED IN AN INVITATION FOR BIDS, AND REQUESTING A NEGOTIATED UNIT PRICE INCREASE FOR THE QUANTITY PURCHASED BY THE DEPARTMENT OF THE ARMY, PURCHASING AND CONTRACTING OFFICE, FORT HOOD, TEXAS, UNDER CONTRACT NO. DABD09-68-C-0068.

INVITATION FOR BIDS NO. DABD09-68-B-0008, ISSUED AUGUST 7, 1967, SOLICITED BIDS FOR THE PURCHASE OF 160 REFUSE CONTAINERS, TO BE MANUFACTURED IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-R-22827B, NOVEMBER 3, 1965. THE FACESHEET OF THE INVITATION, IN THE BLOCK CAPTIONED "OFFER," STATED AS FOLLOWS: "IN COMPLIANCE WITH THE ABOVE, THE UNDERSIGNED OFFERS AND AGREES, IF THIS OFFER IS ACCEPTED WITHIN 60 CALENDAR DAYS (60 CALENDAR DAYS UNLESS A DIFFERENT PERIOD IS INSERTED BY THE OFFEROR) FROM THE DATE FOR RECEIPT OF OFFERS SPECIFIED ABOVE, TO FURNISH ANY OR ALL ITEMS UPON WHICH PRICES ARE OFFERED, AT THE PRICE SET OPPOSITE EACH ITEM, DELIVERED AT THE DESIGNATED POINT/S), WITHIN THE TIME SPECIFIED IN THE SCHEDULE.' ARTICLE NO. 10 (C) OF THE "SOLICITATION INSTRUCTIONS AND CONDITIONS" ADVISED BIDDERS THAT:

"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER.'

IN THIS REGARD, THERE WAS INCLUDED IN THE INVITATION A PAGE ENTITLED "IMPORTANT NOTICE TO BIDDERS" WHICH SPECIFICALLY ADMONISHED BIDDERS AS FOLLOWS:

"* * * CITE LIMITATIONS, IF ANY, SUCH AS: -BIDDING ALL OR NONE- BID IS BASED ON MINIMUM ORDER OF $1,000.00- -ITEMS 4-6 ACCEPTED ONLY IF AWARDED ITEM 2-"

THE RECORD INDICATES THAT ON AUGUST 28, 1967, 9 DAYS PRIOR TO THE BID OPENING DATE OF SEPTEMBER 5, 1967, THE CONTRACTING OFFICER WAS ADVISED THAT THE FUNDS AVAILABLE FOR THE PURCHASE OF REFUSE CONTAINERS, AMONG OTHER ITEMS, HAD BEEN ADJUSTED DOWNWARDS IN ORDER TO CONSERVE FISCAL YEAR 1968 FUNDS. SINCE THE NEED FOR 160 REFUSE CONTAINERS REMAINED AFTER THE AVAILABLE FUND ADJUSTMENT, THE CONTRACTING OFFICER DETERMINED THAT IT WOULD BE "IN THE BEST INTEREST OF THE GOVERNMENT TO OPEN BIDS AND AWARD THE CONTRACT FOR THE MAXIMUM NUMBER OF CONTAINERS WHICH AVAILABLE FUNDS WOULD OW.'

YOU SUBMITTED A BID OF $699.80 PER UNIT, BUT YOU DID NOT EXTEND YOUR UNIT PRICE BID TO REFLECT A TOTAL PRICE FOR 160 UNITS. SINCE YOUR UNIT PRICE BID WAS THE LOWEST RESPONSIVE BID OF THE SIX BIDS RECEIVED UNDER THE INVITATION, THE CONTRACTING OFFICER MADE AN AWARD TO YOUR FIRM FOR 110 REFUSE CONTAINERS ON OCTOBER 11, 1967, AT A TOTAL CONTRACT PRICE OF $76,978 -- THE MAXIMUM QUANTITY THAT COULD BE PURCHASED WITH THE AVAILABLE FUNDS.

BY LETTER DATED OCTOBER 18, 1967, YOUR COMPANY ACCEPTED THE AWARD,BUT REQUESTED A NEGOTIATED UNIT PRICE INCREASE PREDICATED UPON THE FACT THAT NONE OF THE BIDDERS WERE INFORMED OF THE CONTRACTING OFFICER'S DECISION, MADE PRIOR TO BID OPENING, TO PURCHASE A LESSER QUANTITY THAN ADVERTISED. YOU STATED FURTHER IN THIS REGARD, IN A LETTER DATED NOVEMBER 21, 1967, TO THE CONTRACTING OFFICER, AS FOLLOWS: "* * * IF THE CONTRACTING OFFICE KNEW OF THIS REDUCTION IN QUANTITY PRIOR TO THE BID OPENING TIME, THERE WAS A DEFINITE OBLIGATION ON THE PART OF THE CONTRACTING OFFICER TO MAKE A REDUCTION AS SUBSTANTIAL AS THIS ONE, KNOWN TO ALL BIDDERS. * * * ,* * * WE BELIEVE THAT IF THE REDUCTION IN REQUIREMENTS WAS KNOWN TO THE CONTRACTING OFFICER PRIOR TO BID OPENING TIME, THEN WE ARE ENTITLED TO NEGOTIATING AN INCREASE IN PRICE FOR THE REDUCED QUANTITIES PURCHASED BY FORT HOOD, UNDER THE SUBJECT CONTRACT, AT THIS TIME. AS WE HAVE POINTED OUT PREVIOUSLY, FREIGHT COSTS WILL BE HIGHER, AS WILL MATERIAL COSTS, AS A RESULT OF THE REDUCTION IN QUANTITY.'

IT IS THE OPINION OF THIS OFFICE THAT IN THE ABSENCE OF LANGUAGE IN YOUR BID LIMITING THE GOVERNMENT'S RESERVED RIGHT UNDER ARTICLE 10 (C) TO AWARD A QUANTITY LESS THAN THAT OFFERED, THE CONTRACTING OFFICER HAD AN UNQUALIFIED CONTRACT RIGHT TO EXERCISE THAT RESERVED RIGHT NOTWITHSTANDING THE FACT THAT IT WAS KNOWN, PRIOR TO BID OPENING, THAT FUNDS WERE NOT AVAILABLE FOR THE PURCHASE OF ALL OF THE ITEMS ADVERTISED. MOREOVER, WITH REGARD TO THE ALLEGED ADVERSE IMPACT OF SUCH AWARD, THE CONTRACTING OFFICER HAS ADVISED THAT:

"THE CONTRACTOR'S ALLEGATION OF INCREASED FREIGHT AND MATERIAL COSTS IS WITHOUT FOUNDATION. THE CONTRACTOR HAS NOT SUBMITTED EVIDENCE OR SUPPORT OF ANY NATURE TO SUBSTANTIATE THIS ALLEGATION OF INCREASED COST. WITH REFERENCE TO FREIGHT COSTS, IT APPEARS REASONABLE TO ASSUME THAT THE CONTRACTOR WILL MAKE SHIPMENT IN CAR LOADS AND/OR TRUCK LOADS IN SIZES COMMENSURATE WITH THE NUMBER OF CONTAINERS, RESULTING IN NO CHANGE IN FREIGHT COST PER CONTAINER. THE TRANSPORTATION OFFICER, FORT HOOD, TEXAS, ADVISES HE IS UNAWARE OF ANY CONDITION WHEREBY THE UNIT TRANSPORTATION COST COULD CONCEIVABLY BE AFFECTED BY THE REDUCTION IN THE NUMBER PURCHASED FROM 160 TO 110. IN THE ABSENCE OF EVIDENCE OF HIGHER MATERIAL COST PER UNIT BY THE CONTRACTOR, IT IS BELIEVED THAT THE INCREASE IN THE MATERIAL COST PER UNIT, IF ANY, WOULD BE MINIMAL.'

YOUR COMPANY DID NOT SPECIFY THAT ITS UNIT BID PRICE WAS ONLY APPLICABLE IN THE EVENT THAT THE MAXIMUM QUANTITY WOULD BE AWARDED. THEREFORE, AND IN VIEW OF THE FACT THAT THE INVITATION WAS DEVOID OF ANY LANGUAGE LIMITING THE RIGHT RESERVED TO THE GOVERNMENT TO AWARD A CONTRACT FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICE OFFERED, WE FIND NO LEGAL BASIS TO QUESTION THE PROPRIETY OF THE AWARD MADE TO YOU PURSUANT TO YOUR UNQUALIFIED UNIT PRICE BID.

ACCORDINGLY, YOUR PROTEST AGAINST AWARD AS MADE IS DENIED, AND YOUR REQUEST FOR AN APPROPRIATE UNIT PRICE INCREASE ALSO MUST BE DENIED.