B-163229, APR. 29, 1968

B-163229: Apr 29, 1968

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TO HANSON AND GARRETT: REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 3 AND LETTER OF JANUARY 12. THE SOLICITATION STATED THAT THE CRATES WERE TO BE MANUFACTURED IN ACCORDANCE WITH FEDERAL SPECIFICATION PPP-C-650. OF THE REFERENCED SPECIFICATION PROVIDES THAT CRATES WITH DIMENSIONS COMPARABLE TO THOSE SPECIFIED IN THE SOLICITATION WERE TO HAVE THREE VERTICAL STRUTS ON THE SIDE PANELS INSTEAD OF TWO. THE RECORD INDICATES THAT THIRTEEN OFFERS WERE RECEIVED UNDER THE SOLICITATION RANGING FROM $10.87 TO $31.00 PER UNIT. DSA-003-67-C-0097 WAS AWARDED ON DECEMBER 19. BUTLER WAS REJECTED AFTER A PREAWARD SURVEY FOUND THAT SUCH OFFEROR WAS NONRESPONSIBLE. WE ARE ADVISED THAT THE ENTIRE QUANTITY OF CRATES PURCHASED UNDER THE CONTRACT WAS DELIVERED BY AUGUST 29.

B-163229, APR. 29, 1968

TO HANSON AND GARRETT:

REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 3 AND LETTER OF JANUARY 12, 1968, PROTESTING, ON BEHALF OF CERTIFIED PACKAGING, INC., CERTIFIED WOODCRAFT, INC., AND SALT LAKE CONTAINER, INC., AGAINST CERTAIN ACTIONS TAKEN BY THE DEFENSE SUPPLY AGENCY (DSA), DEFENSE DEPOT OGDEN, UTAH, UNDER SOLICITATIONS NOS. DSA-003-67-R-0159, -68-R 0112, -68-B-0123, -68-B-0146, -68-B-0163, AND -68-B-0141, DISCUSSED BELOW, SERIATIM.

SOLICITATION -R-0159, A 100 PERCENT SMALL BUSINESS SET-ASIDE, ISSUED NOVEMBER 30, 1966, REQUESTED OFFERS FOR THE PURCHASE OF A MINIMUM OF 4,000 TYPE IV, STYLE A WOOD CRATES DESIGNED FOR A MAXIMUM NET LOAD OF 480 POUNDS, TO MEASURE 51-1/2 INCHES LONG, 51-1/2 INCHES WIDE AND 54 1/2 INCHES DEEP. THE SOLICITATION STATED THAT THE CRATES WERE TO BE MANUFACTURED IN ACCORDANCE WITH FEDERAL SPECIFICATION PPP-C-650, JUNE 2, 1964. PARAGRAPH 3.8.1.2. OF THE REFERENCED SPECIFICATION PROVIDES THAT CRATES WITH DIMENSIONS COMPARABLE TO THOSE SPECIFIED IN THE SOLICITATION WERE TO HAVE THREE VERTICAL STRUTS ON THE SIDE PANELS INSTEAD OF TWO, AS ORDINARILY REQUIRED.

THE RECORD INDICATES THAT THIRTEEN OFFERS WERE RECEIVED UNDER THE SOLICITATION RANGING FROM $10.87 TO $31.00 PER UNIT, AND THAT CONTRACT NO. DSA-003-67-C-0097 WAS AWARDED ON DECEMBER 19, 1966, TO HURST LUMBER COMPANY, THE LOWEST RESPONSIVE, RESPONSIBLE OFFEROR, AT A UNIT PRICE OF $11.67. THE LOW OFFER IN THE AMOUNT OF $10.87 SUBMITTED BY ORVIL W. BUTLER WAS REJECTED AFTER A PREAWARD SURVEY FOUND THAT SUCH OFFEROR WAS NONRESPONSIBLE. WE ARE ADVISED THAT THE ENTIRE QUANTITY OF CRATES PURCHASED UNDER THE CONTRACT WAS DELIVERED BY AUGUST 29, 1967.

THEREAFTER, ON NOVEMBER 17, 1967, REPRESENTATIVES OF CERTIFIED PACKAGING INFORMALLY PROTESTED TO THE CONTRACTING OFFICER THAT THE CONTRACTOR HAD SUPPLIED CRATES WHICH DID NOT CONFORM WITH THE CITED FEDERAL SPECIFICATIONS, AND THAT THE UNIT PRICES PAID FOR THE CRATES WERE BELOW THEIR MATERIAL COST ALONE. THE ADMINISTRATIVE RECORD INDICATES IN THIS REGARD AS FOLLOWS: "THIS ALLEGATION RESULTED IN A PHONE CALL * * * TO THE DCASO-SLC IN WHICH THE CONTRACTING OFFICER REQUESTED INFORMATION AS TO THE INSPECTOR'S UNDERSTANDING OF PPP-C-650 WITH RESPECT TO THE ADDITIONAL VERTICAL AND DIAGONAL STRUTS. THE CONTRACTING OFFICER TOOK THE POSITION THAT THE SPECIFICATIONS REQUIRED SUCH ADDITIONAL STRUTS WHILE THE INSPECTOR HELD OTHERWISE. JOINT READING OF THE SPECIFICATION RESULTED IN THE CONTRACTING OFFICER'S VIEW BEING ADOPTED.

* * * * * * * "THE CONTRACTING OFFICER AND DCASO-SLC REPRESENTATIVES INSPECTED MATERIALS DELIVERED BY THE HURST COMPANY AT DEFENSE DEPOT OGDEN ON 20 NOVEMBER 1967. ON SAID DATE ALL CRATES, EXCEPT FOR A HANDFUL, HAD BEEN ASSEMBLED BY GOVERNMENT PERSONNEL AND WERE BEING UTILIZED. THOSE OBSERVED LACKED THE ADDITIONAL STRUTS. AS TO QUALITY OF LUMBER, THE NUMBER OF KNOTS WAS WITHIN THE PERMISSIBLE SPECIFICATION VARIATION, MIL STD 731, BUT AS TO SPLITS SOME DOUBT EXISTED BY VIRTUE OF AN INABILITY TO TELL WHETHER THE WOOD HAD BEEN SPLIT BY THE CONTRACTOR OR BY GOVERNMENT PERSONNEL DURING STORAGE, ASSEMBLY AND LOADING. A LETTER OF 7 DECEMBER 1967 FROM DCASO-SLC INDICATED THAT THE INSPECTORS HAD MISINTERPRETED THE SPECIFICATION AND THAT CORRECTIVE ACTION WOULD BE TAKEN. "WHEN IT BECAME KNOWN THAT NON-SPECIFICATION MATERIALS HAD BEEN DELIVERED, CONSIDERATION WAS IMMEDIATELY GIVEN TO RECOUPMENT FROM THE CONTRACTOR. IT WAS CONCLUDED THAT SUCH RECOVERY WAS NOT POSSIBLE INASMUCH AS FINAL INSPECTION AND ACCEPTANCE HAD BEEN IN AUGUST, THE PURCHASE PRICE PAID, THE CRATES USED AND ALL DEFECTS WERE OBVIOUS. ACCORDING TO GENERAL PROVISION NO. 5 OF THE CONTRACT, ACCEPTENCE IN SUCH CONTEXT IS CONCLUSIVE. THIS CONFORMS TO THE APPARENTLY SETTLED JUDICIAL VIEW. SEE CUDAHY PACKING CO. V U.S., 109 CT. CL. 833, 75 F.SUPP. 239 (1948). LIKEWISE, AN ACTION FOR BREACH WOULD BE IMPROVIDENT AS ALL CRATES HAVE BEEN USED AND NO KNOWN CONSEQUENTIAL DAMAGES HAVE BEEN SUFFERED. SEE BROWN AND ROOT, INC. V U.S., 126 CT. CL. 684.

* * * * * * * "AS TO THE PRICE BID BY THE HURST COMPANY, CERTAIN FACTS APPEAR PERTINENT. THREE PRIOR CONTRACTS INVOLVING THE CRATES HERE CONCERNED WERE AWARDED BY THE CONTRACTING OFFICER IN OCTOBER, NOVEMBER AND DECEMBER, 1966. PRICES WERE $14.20, $14.39 WITH 2 PERCENT DISCOUNT AND $12.50 RESPECTIVELY. BOX SHOP COSTS AT THIS COMMAND FOR IDENTICAL CRATES MADE AT ABOUT THE SAME TIME WERE $4.50 FOR LABOR AND OVERHEAD AND $7.37 FOR MATERIALS. GOVERNMENT ESTIMATES OF THE COST OF THE FOUR ADDITIONAL STRUTS WOULD BE $1.05 PER CRATE. THE BID OF THE HURST COMPANY WAS $11.67, WHICH APPEARS WELL WITHIN REASONABLE LIMITS EVEN WITH THE ADDITION OF $1.05PER CRATE.'

YOU PROTEST AGAINST THE AWARD OF SUCH CONTRACT ON THE GROUND THAT HURST KNEW THAT THE MINIMUM NEEDS OF THE PROCURING ACTIVITY COULD BE SATISFIED BY A LESS EXPENSIVE CRATE THEN ADVERTISED AND, THAT THIS INFORMATION WAS NOT PRIVY TO YOUR CLIENTS.

WE ARE OF THE OPINION THAT, IN VIEW OF THE INFORMATION CONTAINED IN THE ADMINISTRATIVE RECORD MADE AVAILABLE TO OUR OFFICE, YOUR PROTEST IS WITHOUT MERIT. IT IS REGRETTED THAT THE CONTRACTOR WAS PERMITTED TO SUPPLY CRATES WHICH DID NOT CONFORM TO THE SPECIFICATIONS; HOWEVER, THERE IS NO EVIDENCE OF FRAUD OR PREFERENTIAL TREATMENT SUCH AS YOU ALLEGE AND, IN THE CIRCUMSTANCES, WE FEEL THAT THE CASES CITED ABOVE EFFECTIVELY PRECLUDE ANY RECOUPMENT FROM THE CONTRACTOR, ESPECIALLY SINCE FINAL INSPECTION AND ACCEPTANCE WAS MADE, AND THE CONTRACT PRICE PAID, PRIOR TO ASCERTAINMENT OF SPECIFICATION DEVIATIONS.

SOLICITATION NO. -R-0112, ISSUED OCTOBER 23, 1967, REQUESTED OFFERS FOR THE DELIVERY OF 2,000 CRATES FROM SMALL BUSINESS CONCERNS ONLY IDENTICAL TO THOSE SPECIFIED IN CONTRACT -C-0097, SUPRA. THE RECORD INDICATES THAT EIGHT OFFERS WERE RECEIVED RANGING FROM $9.21 TO $22.00 PER UNIT, AND THAT AWARD WAS MADE TO THE LOW RESPONSIVE, RESPONSIBLE OFFEROR, ANDERSON LUMBER COMPANY, ON NOVEMBER 9, 1967, AT A UNIT PRICE OF $10.66.

ON NOVEMBER 15, 1967, A REPRESENTATIVE OF CERTIFIED WOODCRAFT AGAIN INFORMALLY QUESTIONED THE CONTRACTING OFFICER AS TO THE NEED FOR THE ADDITIONAL STRUTS REQUIRED BY SPECIFICATION PPP-C-650. THE RECORD INDICATES IN THIS REGARD, AS FOLLOWS:"ON THE NEXT DAY, THIS REPRESENTATIVE CALLED THE CONTRACTING OFFICER AND A DISCUSSION WAS HAD AS TO THE REQUIREMENTS FOR ADDITIONAL STRUTS ON THE CRATES CONCERNED. IT BECAME APPARENT THAT THE INSPECTOR HAD MISINTERPRETED THE SPECIFICATION AND HE STATED THAT HE WOULD SO INFORM ANDERSON LUMBER COMPANY. "ON 16 NOVEMBER 1967, THE CRATING AND PACKAGING SPECIALISTS AT THE DEPOT ADVISED THE CONTRACTING OFFICER THAT THE LIGHT LOAD LIMITATIONS PLACED UPON THE CRATES OF 480 POUNDS MAXIMUM WOULD ALLOW THEIR PROPER USE OMITTING THE FOUR ADDITIONAL VERTICAL AND DIAGONAL STRUTS. A CHANGE ORDER WAS ISSUED OMITTING THE REQUIREMENT FOR SUCH ADDITIONAL MEMBERS AND STATING THAT AN APPROPRIATE PRICE REDUCTION WOULD BE REQUIRED. ,THEREAFTER, CONTRACTOR DELIVERED 288 CRATES ON 24 NOVEMBER 1967 AND THESE WERE FOUND TO BE NON- CONFORMING AS TO LUMBER QUALITY. ALL WERE REWORKED BY THE CONTRACTOR TO CONFORM FULLY IN SUCH REGARD. AFTER REDELIVERY WAS MADE, IT WAS ASCERTAINED THAT THE SAID 288 CRATES, PLUS AN ADDITIONAL 1,340 ALREADY FABRICATED AT THE CONTRACTOR'S PLANT, WERE 1/32 INCH LESS THAN THE ONE INCH THICKNESS CALLED FOR. THEREFORE, ON 4 DECEMBER 1967 A SUPPLEMENTAL AGREEMENT WAS ENTERED INTO WHICH REDUCED THE PRICE PER CRATE BY 73 CENTS TO COMPENSATE FOR THE THICKNESS DEVIATION AS TO 1628 CRATES, WITH ALL OTHERS MEETING THE STANDARD. THIS AGREEMENT FURTHER PROVIDED A PRICE REDUCTION OF $1.08 PER CRATE FOR ALL CRATES BY VIRTUE OF THE ELIMINATION OF THE FOUR ADDITIONAL STRUTS. "IN THIS RESPECT THE PRICE REDUCTIONS FOR THE NON-CONFORMING SUPPLIES WERE ARRIVED AT ON THE BASIS OF THE ESTIMATE OF THE CHIEF OF THE DEPOT BOX SHOP THAT ELIMINATION OF SUCH STRUTS WOULD INVOLVE A VALUE OF $1.05 PER CRATE. THE CONTRACTOR INITIALLY TENDERED A PRICE REDUCTION OF 43 CENTS PER CRATE BUT, WHEN THIS WAS REJECTED BY THE CONTRACTING OFFICER, HE OFFERED $1.08, WHICH WAS ACCEPTED. THE REDUCTION OF 73 CENTS FOR THE MINUS 1/32 THICKNESS ON ONE INCH MEMBERS WAS ARRIVED AT BY THE CONTRACTING OFFICER AS THE DIFFERENCE IN PRICE BETWEEN RESAWN LUMBER VERSUS S4S LUMBER.'

IN YOUR LETTER OF JANUARY 12 YOU ADVISED OUR OFFICE THAT,"WE ARE STILL OF THE OPINION THAT EITHER THIS CONTRACT WAS MODIFIED TO PERMIT THE ACCEPTANCE OF THE STYLE BEING SUPPLIED, OR THAT NOTHING WAS DONE ABOUT THE MATTER * * * AND THE CONTRACTOR IS STILL SUPPLYING THE SAME BOX WITH THE SAME GRADE OF LUMBER THAT WE STARTED WITH ORIGINALLY.' AS INDICATED ABOVE, THE UNIT PRICE OF THE CONTRACT WAS NEGOTIATED DOWNWARDS TO COMPENSATE FOR THE COST DIFFERENCE BETWEEN THE CRATES ORIGINALLY SPECIFIED AND THOSE ACCEPTED UNDER THE CONTRACT. WITH REGARD TO THE PRICE REVISION YOUR ATTENTION IS INVITED TO PARAGRAPH 2 OF THE GENERAL PROVISIONS OF THE CONTRACT, STANDARD FORM 32, WHICH PROVIDES AS FOLLOWS:

"CHANGES

"THE CONTRACTING OFFICER MAY AT ANY TIME, BY A WRITTEN ORDER, AND WITHOUT NOTICE TO THE SURETIES, MAKE CHANGES, WITHIN THE GENERAL SCOPE OF THIS CONTRACT, IN ANY ONE OR MORE OF THE FOLLOWING: (I) DRAWINGS, DESIGNS, OR SPECIFICATIONS, WHERE THE SUPPLIES TO BE FURNISHED ARE TO BE SPECIALLY MANUFACTURED FOR THE GOVERNMENT IN ACCORDANCE THEREWITH; * * * IF ANY SUCH CHANGE CAUSES AN INCREASE OR DECREASE IN THE COST OF, OR THE TIME REQUIRED FOR, THE PERFORMANCE OF ANY PART OF THE WORK UNDER THIS CONTRACT, WHETHER CHANGED OR NOT CHANGED BY ANY SUCH ORDER, AN EQUITABLE ADJUSTMENT SHALL BE MADE IN THE CONTRACT PRICE OR DELIVERY SCHEDULE, OR BOTH, AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY.'

IN ACCORDANCE THEREWITH, AND THE HOLDING IN FARWELL COMPANY, INC. V UNITED STATES, 137 CT. CL. 832 (1957), THAT THE GOVERNMENT HAS A CONTRACTUALLY RESERVED RIGHT TO INSIST UPON A LOWER CONTRACT PRICE WHEN THE MATERIALS USED ARE LESS EXPENSIVE THAN THOSE SPECIFIED, YOUR ALLEGATION WITH REGARD TO THE CAUSE FOR THE MODIFICATION AGREED TO BY THE PARTIES UNDER THE CONTRACT IS TRUE, BUT NO LEGAL BASIS EXISTS FOR CHALLENGING THE PROPRIETY OR LEGALITY OF THE MODIFICATION.

INVITATION FOR BIDS NO. -B-0123 ISSUED NOVEMBER 1, 1967, SOLICITED BIDS FOR THE PURCHASE OF AN INDEFINITE QUANTITY OF CRATES TO BE MANUFACTURED IN ACCORDANCE WITH THE ABOVE-REFERENCED FEDERAL SPECIFICATION, WITH CERTAIN EXCEPTIONS NOT PERTINENT HERE. THE INVITATION ALSO PROVIDED FOR UNITIZING (PACKING) BY THE CONTRACTOR OF TRUNK LOCKERS INTO THE CRATES SUPPLIED THEREUNDER.

THE ADMINISTRATIVE FILE INDICATES THAT ON NOVEMBER 16, 1967, AFTER OPENING, IT WAS DETERMINED THAT A VALID AWARD COULD NOT BE MADE UNDER INVITATION -B-0123 SINCE IT FAILED TO INCLUDE THE CLAUSES RESPECTING INDEFINITE QUANTITY CONTRACTS AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 7-1102.3. ACCORDINGLY, THE PROCUREMENT WAS CANCELLED PURSUANT TO ASPR 2-404.1 WHICH PROVIDES THAT INVITATIONS FOR BIDS MAY BE CANCELLED AFTER BID OPENING BUT BEFORE AWARD WHERE, AS HERE, COMPELLING REASONS EXIST FOR THE CANCELLATION OF AN INVITATION WHICH DID NOT CONFORM TO ASPR REQUIREMENTS. SINCE THE RESPONSIBILITY FOR MAKING A DETERMINATION TO REJECT ALL BIDS RESTS WITH THE ADMINSTRATIVE OFFICERS OF THE PROCURING ACTIVITY, OUR OFFICE WILL NOT OBJECT TO SUCH ACTION IF PROPERLY EXERCISED IN ACCORDANCE WITH THE REGULATION. OF COURSE, WE HAVE REPEATEDLY OBSERVED THAT THE REJECTION OF BIDS AFTER THEY HAVE BEEN OPENED AND EACH BIDDER OR PROSPECTIVE BIDDER HAS LEARNED HIS COMPETITOR'S PRICES IS A SERIOUS MATTER AND SUCH ACTION SHOULD NOT BE TAKEN EXCEPT FOR THE MOST COGENT REASONS. 153229, FEBRUARY 5, 1964; B-140452, NOVEMBER 9, 1959. HOWEVER, WE BELIEVE THAT THE FACTS OF THIS PARTICULAR CASE SUBSTANTIALLY SUPPORT THE DETERMINATION TO REJECT ALL BIDS AND CANCEL THE INVITATION AND, THAT BEING THE CASE, WE WOULD NOT BE JUSTIFIED IN OBJECTING TO THE ACTION.

ON DECEMBER 4, 1967, THE PROCUREMENT WAS READVERTISED UNDER INVITATION FOR BIDS -B-0146, WITH CORRECTED TERMS AND PROVISIONS. HOWEVER, WHEN IT BECAME EVIDENT THAT UNITIZING THE LOCKERS COULD BE ACCOMPLISHED MORE ECONOMICALLY BY GOVERNMENT PERSONNEL RATHER THAN BY CONTRACT, AMENDMENT NO. 1, EFFECTIVE DECEMBER 8, 1967, WAS ISSUED CANCELLING THE INVITATION IN ITS ENTIRETY.

WITH RESPECT TO THE PROPRIETY OF THE CANCELLATION OF INVITATION -B 0146, IT IS WELL-ESTABLISHED THAT THE GOVERNMENT SHOULD NOT BE COMPELLED TO MAKE AN AWARD FOR AN ITEM OR SERVICE WHICH IT NO LONGER NEEDS OR WANTS. SEE B- 153229, SUPRA, AND ASPR 2-404.1 (B) (VI). THE INVITATION WAS CANCELLED BY THE CONTRACTING OFFICER PURSUANT TO COMPETENT ADVICE GIVEN HIM BY THE PERSONNEL KNOWLEDGEABLE IN SUCH MATTERS WHICH CONCLUSIVELY INDICATED THAT THE UNITIZING SERVICES AS ADVERTISED WERE NO LONGER NEEDED. IN THIS REGARD, WE HAVE HELD THAT CONTRACTING OFFICERS NOT ONLY HAVE THE RIGHT TO REJECT BIDS FOR SUPPLIES AND SERVICES WHICH ARE NO LONGER NEEDED, BUT THAT THEY WOULD BE DERELICT IN THEIR DUTY IF THEY DID NOT DO SO. B-159865, OCTOBER 6, 1966. ON DECEMBER 20, 1967, INVITATION FOR BIDS NO. -B-0163 WAS ISSUED FOR THE PURCHASE OF AN INDEFINITE QUANTITY OF CRATES DESCRIBED AS FOLLOWS:

"CRATE, WOOD, LOCKER, SIZE 51-1/2 INCHES LONG, 51-1/2 INCHES WIDE, 54-1/2 INCHES DEEP (INSIDE DIMENSIONS) FOR MAXIMUM LOAD OF 480 LBS.'

IN ADDITION, THE INVITATION ADVISED PROSPECTIVE OFFERORS THAT THE CRATES WERE TO BE MANUFACTURED IN ACCORDANCE WITH FEDERAL SPECIFICATION PPP-C- 650, TYPE IV, STYLE A, WITH THE REQUIREMENT FOR ADDITIONAL HORIZONTAL AND VERTICAL STRUTS OMITTED. IT IS TO BE NOTED THAT THE REFERENCED SPECIFICATION PROVIDED THAT TYPE IV, STYLE A CRATES WERE TO BE 72 INCHES LONG, 48 INCHES WIDE, AND 48 INCHES HIGH. THE RECORD INDICATES THAT AWARD WAS MADE TO ANDERSON LUMBER COMPANY, THE LOW RESPONSIVE, RESPONSIBLE BIDDER ON JANUARY 11, 1965.

YOU PROTEST AGAINST THE SPECIFICATIONS ADVERTISED IN INVITATION -B 0163, ON THE GROUND THAT ,THE SIZE OF THIS CRATE AND THE WEIGHT THAT IT MUST HOLD ARE NOT WITHIN THE SPECIFICATION STANDARDS SET FORTH IN PPP-C-650, AND THAT THE MODIFICATIONS TO THE REFERENCED SPECIFICATION" WERE MADE TO FIT THE CAPACITY OF THE TWO CONTRACTORS (HURST AND ANDERSON) WHO ARE MOST SUCCESSFUL IN GETTING THIS WORK.

WITH RESPECT TO THE FOREGOING, THE ADMINISTRATIVE REPORT STATES AS FOLLOWS:

"THE PROTEST ALLEGES THAT THE SIZE OF THE CRATES AND THE WEIGHT SPECIFIED AS SET FORTH ABOVE ARE NOT WITHIN THE STANDARDS OF PPP-C 650. AS TO THIS, CRATES CALLED FOR EXCEEDED THE WIDTH AND HEIGHT PROVISION OF SAID SPECIFICATION (PAGE 1) BY 3-1/2 INCHES AND 6-1/2 INCHES RESPECTIVELY. FURTHER, INASMUCH AS THE GOVERNMENT NEED FOR THE CRATES WAS FOR A MAXIMUM LOAD OF 480 POUNDS, THE FOUR ADDITIONAL STRUTS WERE OMITTED. IN THIS RESPECT, THEN, IT IS TRUE THE STANDARDS WERE EXCEEDED IN SIZE BUT COME TO LESS THAN HALF OF THE LOAD LIMIT.

"IT SHOULD BE NOTED THAT THE GOVERNMENT PACKING SPECIALISTS OF THIS COMMAND, WITH THE CONCURRENCE OF THOSE AT HEADQUARTERS, DEFENSE SUPPLY AGENCY, AUTHORIZED VARIATIONS AS STATED ABOVE. THE NEED FOR THE CRATES AROSE OUT OF AN ARMY REQUEST FOR THE SHIPMENT TO VIET NAM OF GREAT QUANTITIES OF FOOTLOCKERS. IT WAS DETERMINED THAT THE BEST STORING, PACKING AND SHIPPING LOAD FOR THESE WOULD BE IN UNITS OF 16. THIS UNIT DICTATED THAT THE DIMENSIONS AS TO WIDTH AND DEPTH HAD TO BE EXCEEDED AS INDICATED. IT WAS FURTHER CONCLUDED THAT THE MAXIMUM WEIGHT OF THE 16 FOOTLOCKERS, 480 POUNDS, WOULD NOT REQUIRE ANY ADDITIONAL STRUTS. THUS, THE INTEREST OF THE GOVERNMENT IN OBTAINING MATERIALS THAT WOULD MEET THE GOVERNMENT'S NEEDS BUT WOULD NOT UNECONOMICALLY EXCEED THEM DICTATED THE ACTIONS TAKEN. SUBSTANTIAL SAVINGS RESULTED. PRIOR EXPERIENCE IN THE SHIPMENT OF THESE FOOTLOCKERS WHEREIN SOME WERE DAMAGED IN TRANSIT TO VIET NAM, INDICATED THAT TYPE IV, STYLE A CRATES WERE A NECESSITY BUT THAT THE 1/32 DEVIATION IN THICKNESS, THE VARIATION AS TO WIDTH AND HEIGHT AND THE OMISSION OF THE FOUR STRUTS HAD NO ADVERSE EFFECT UPON THE USEABILITY OF THE CRATES. SUCH ACTIONS APPEAR PROPER AND, IN FACT, REQUIRED.

"THE LETTER OF PROTEST CHARGES THAT THE ABOVE FACTS INFER THAT THE MODIFICATION WAS MADE TO FIT THE CAPACITY OF THE TWO CONTRACTORS WHO HAD BEEN MOST SUCCESSFUL IN GETTING THE WORK. SUCH INFERENCE APPEARS WHOLLY UNWARRANTED WHEN THE PAST PERFORMANCE HISTORY OF THE HURST AND ANDERSON LUMBER COMPANIES, ON SEVERAL CRATE CONTRACTS EXTENDING TO 1966, DISPLAYS TIMELY DELIVERIES IN EVERY INSTANCE. THE ADDING OF FOUR STRUTS IN EACH CASE, CONSTITUTING A RELATIVELY MINOR INCREASE IN WORK, COULD NOT HAVE AFFECTED THE RESULT.'

IT IS WELL-RECOGNIZED THAT THE RESPONSIBILITY FOR THE DRAFTING OF SPECIFICATIONS FOR EQUIPMENT TO MEET THE MINIMUM REQUIREMENTS OF THE GOVERNMENT IS THAT OF THE PROCURING ACTIVITY. ASSUMING THAT THE ABOVE QUOTED STATEMENTS ACCURATELY REFLECTED THE SITUATION AS IT EXISTED AT THE OGDEN DEFENSE DEPOT--AND WE HAVE NO EVIDENCE THAT THEY DO NOT--OUR OFFICE MAY NOT CONCLUDE THAT THE MINOR DEVIATION FROM THE SPECIFICATIONS WAS ARBITRARY OR CAPRICIOUS. NEITHER DO WE FIND THAT SUCH DEVIATION REPRESENTED OTHER THAN COMPLIANCE WITH THE GOVERNMENT'S MINIMUM NEEDS. SEE 43 COMP. GEN. 680, AND CASES CITED THEREIN.

FINALLY, YOU PROTESTED AGAINST THE REJECTION OF THE BID OF SALT LAKE CONTAINER, INC., SUBMITTED IN RESPONSE TO INVITATION FOR BIDS -B 0141. THE INVITATION, ISSUED NOVEMBER 21, 1967, SOLICITED BIDS UNDER SCHEDULES I AND II FOR THE PURCHASE OF A QUANTITY OF FIBERBOARD BOXES TO BE MANUFACTURED IN ACCORDANCE WITH THE VARIOUS STYLES DESCRIBED IN FEDERAL SPECIFICATION PPP-B-636C. THE INVITATION PROVIDED FURTHER THAT BIDS WERE TO BE SUBMITTED AND EVALUATED ON A SQUARE-FOOT BASIS.

THE RECORD INDICATES THAT THE INCREMENTAL PRICES BID BY SALT LAKE WERE APPROXIMATELY TWELVE TIMES THOSE OF THE OTHER BIDDERS. AFTER BID OPENING BUT BEFORE AWARD, SALT LAKE ALLEGED THAT IT HAD MADE AN ERROR IN ITS BID, IN THAT IT HAD BID "PER BOX RATHER THAN PER SQUARE FOOT AS CALLED FOR IN THE CONTRACT.' THEREAFTER, THE BIDDER ALLEGED THAT THE INTENDED INCREMENTAL BID PRICES COULD BE ASCERTAINED BY DIVIDING THE QUOTED PRICES BY THE LARGEST NUMBER OF SQUARE FEET IN EACH BOX, AND THAT THE CORRECTION WOULD MAKE SALT LAKE THE LOW BIDDER.

IN VIEW OF THE URGENT NEED FOR THE ADVERTISED MATERIALS FOR SHIPMENTS TO VIETNAM, SALT LAKE'S REQUEST FOR CORRECTION OF ITS BID PRICES WAS SUBMITTED BY TELEPHONE TO THE COUNSEL, DSA, PURSUANT TO ASPR 2-406.3 (B). THE CONTRACTING OFFICER WAS ADVISED, AT THAT TIME, THAT IN ACCORDANCE WITH THE RULES AND REGULATIONS GOVERNING CORRECTION OF MISTAKE IN BIDS, AND PRIOR DECISIONS OF THIS OFFICE, THE ERROR IN SALT LAKE'S BID COULD NOT PROPERLY BE CORRECTED. SEE 41 COMP. GEN. 469; 37 ID. 210. THEREAFTER, ON DECEMBER 1, 1967, THE CONTRACT WAS AWARDED TO HURCO INDUSTRIES, THE LOW RESPONSIVE, RESPONSIBLE BIDDER.

YOU PROTEST THE AWARD TO HURCO BECAUSE THE TELEPHONIC ADVICE FROM COUNSEL, DSA, DID NOT PROPERLY CONSTITUTE A BASIS FOR THE CONTRACTING OFFICER'S REFUSAL TO CORRECT THE ALLEGED ERROR IN BID, AND THAT HURCO DOES NOT HAVE THE NECESSARY EQUIPMENT TO PERFORM THE CONTRACT.

IN THE PRESENT CASE, THE MISTAKE IN BID PROCEDURES ESTABLISHED IN ASPR 2- 406.3 (B) (4) PROVIDE THAT THE AUTHORITY TO PERMIT A CORRECTION, SUCH AS YOU REQUESTED, IS VESTED PRIMARILY IN COUNSEL, DSA, AND THAT THE CORRECTION MAY BE MADE IF THE "EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF" (ASPR 2-406.3 (A) (3) ). GENERALLY, CONSIDERATION OF A REQUEST TO CORRECT A MISTAKE IN BID MUST BE SUPPORTED BY WRITTEN EVIDENCE OF THE ERROR AND INTENDED BID,WHICH SHALL BE REFERRED TO THE COUNSEL WITH THE ADDITIONAL DATA SPECIFIED IN ASPR 2-406.3 (E) (3) (I) THROUGH (V). THE REGULATION PROVIDES FURTHER, HOWEVER, THAT "WHEN TIME IS OF THE ESSENCE BECAUSE OF THE EXPIRATION OF BIDS OR OTHERWISE, THE CONTRACTING OFFICER MAY REFER THE CASE BY TELEPHONE OR TELEGRAPH TO THE DESIGNATED AUTHORITY (COUNSEL).' SINCE, AS STATED ABOVE, THE ADVERTISED MATERIALS WERE URGENTLY NEEDED FOR SHIPMENT TO VIETNAM, OUR OFFICE WILL NOT OBJECT TO THE ACTIONS TAKEN BY THE PROCURING AGENCY WITH RESPECT TO MANNER OF DENYING CORRECTION OF YOUR CLIENT'S BID.

MOREOVER, IN LINE WITH OUR DECISION 41 COMP. GEN. 469, WE ARE OF THE OPINION THAT, IN ANY EVENT, THE MISTAKE IN SALT LAKE'S BID COULD NOT PROPERLY HAVE BEEN CORRECTED. IN THAT DECISION WE STATED AS FOLLOWS:

"THE QUESTION WHETHER A BIDDER MAY BE PERMITTED TO CHANGE HIS BID AFTER THE BIDS ARE OPENED BECAUSE OF AN ERROR ALWAYS PRESENTS A MATTER OF SERIOUS CONCERN. A POSSIBILITY OF FRAUD OR COLLUSION, THE MAINTENANCE OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM, AND THE INTERESTS OF THE GOVERNMENT AND THE OTHER BIDDERS MUST BE TAKEN INTO CONSIDERATION. CASES WHERE A DOWNWARD CORRECTION WOULD DISPLACE ONE OR MORE OTHER BIDS, WE HAVE PERMITTED CORRECTION ONLY WHEN THE BID DOCUMENTS THEMSELVES SHOWED THAT THERE WAS AN ERROR AND WHAT THE BID WOULD HAVE BEEN EXCEPT FOR THE ERROR.'

IN THIS REGARD, THE RECORD STATES THAT:

THE EXISTENCE OF A MISTAKE IN THE SALT LAKE CONTAINER COMPANY BID WAS OBVIOUS BUT THE INTENDED PRICE WAS CERTAINLY NOT APPARENT AT TIME OF OPENING. FOR ALL THAT WAS KNOWN THEN, THE INTENDED PRICE COULD HAVE BEEN ARRIVED AT BY VARIOUS METHODS, INCLUDING BUT NOT LIMITED TO, DIVISIONS OF INCREMENT OFFERS BY AVERAGE SQUARE FEET, THE NEXT TO HIGHEST SQUARE FEET OR THE HIGHEST SQUARE FEET. UNLIMITED POSSIBILITIES EXISTED IN ADDITION TO PROCESSES OF DIVISION. THE ONLY TIME THE INTENTION BECAME KNOWN WAS AS A RESULT OF THE BIDDER'S EXPLANATION AFTER OPENING.'

YOUR ARGUMENT THAT HURCO LACKED THE CAPABILITY TO PROPERLY PERFORM THE CONTRACT IS REFUTED BY THE AFFIRMATIVE RECOMMENDATION CONTAINED IN THE PREAWARD SURVEY, DATED DECEMBER 15, 1967. THE REPORT OF SURVEY ADVISED THAT "ALL INFORMATION FURNISHED BY THE PREAWARD SURVEY TEAM HAS BEEN CAREFULLY REVIEWED AND EVALUATED. THE SUBJECT CONTRACTOR, HURCO INDUSTRIES, HAS BEEN FOUND TO BE SATISFACTORY ON ALL FACTORS.'

THE UNDERLYING QUESTION IS WHETHER HURCO WAS A RESPONSIBLE BIDDER QUALIFIED TO MEET THE COMMITMENT IT UNDERTOOK IN ITS BID. INSOFARAS YOUR CONTENTIONS ARE AT VARIANCE WITH THE FACTS ADMINISTRATIVELY REPORTED, OUR OFFICE IS BOUND BY THE WELL-SETTLED RULE THAT PROHIBITS ANY INTERFERENCE WITH ADMINISTRATIVE DETERMINATIONS OF RESPONSIBILITY IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFORE. 37 COMP. GEN. 430. THE REASONS FOR THIS RULE ARE SET OUT IN OUR DECISION AT 39 COMP. GEN. 705, IN PART, AS FOLLOWS:

"* * * WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND-SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED, SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY, AND THEY MUST MAINTAIN THE DAY TO DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS.'

IN ADDITION, WE ARE ADVISED THAT INITIAL DELIVERIES UNDER THE CONTRACT HAVE BEEN TIMELY AND PROPERLY MADE. THEREFORE, AND SINCE IT IS NOT APPARENT THAT THE CONTRACTING OFFICER ACTED OTHER THAN IN GOOD FAITH OR WITHOUT A REASONABLE BASIS IN DENYING YOUR CLIENT'S REQUEST TO CORRECT THE MISTAKE IN ITS BID, OR DETERMINING HURCO TO BE A RESPONSIBLE BIDDER IN THIS INSTANCE, OUR OFFICE WOULD NOT BE JUSTIFIED IN QUESTIONING THE AWARD.