B-163703, APR. 1, 1968

B-163703: Apr 1, 1968

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ROBERT STEINBERG: REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 29 AND MARCH 15. PROTESTING THAT YOUR COMPANY WAS IMPROPERLY DEPRIVED OF AN AWARD UNDER DEFENSE SUPPLY AGENCY INVITATION FOR BIDS DSA100-68-B-1009. A TELEGRAM WAS RECEIVED BY THE PROCUREMENT ACTIVITY FROM YOUR COMPANY. HE DECIDED THAT THE BID AND TELEGRAM WERE AN INDICATION THAT AWARD WOULD HAVE TO BE MADE TO YOUR COMPANY FOR 129. THE BASIS FOR HIS DETERMINATION WAS TWOFOLD. IN THIS INVITATION THE PRICES WERE BID IN A DESCENDING ORDER. THE DICTIONARY DEFINITION OF THE WORD "INCREMENT" USED IN THE TELEGRAPHIC MODIFICATION IS "INCREASE" OR "ONE OF A SERIES OF REGULAR CONSECUTIVE ADDITIONS. " SO THAT THE TELEGRAM WAS INTERPRETED AS AN INDICATION THAT THE 129.

B-163703, APR. 1, 1968

TO MR. ROBERT STEINBERG:

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 29 AND MARCH 15, 1968, PROTESTING THAT YOUR COMPANY WAS IMPROPERLY DEPRIVED OF AN AWARD UNDER DEFENSE SUPPLY AGENCY INVITATION FOR BIDS DSA100-68-B-1009.

THE INVITATION SOLICITED BIDS FOR FURNISHING A TOTAL OF 189,400 PAIRS OF LEATHER WORK GLOVES TO SEVEN DESTINATIONS AS FOLLOWS:

NO. OF ITEM

DESTINATION PAIRS

1 DEFENSE DEPOT MECHANICSBURG 94,320

2 DEFENSE DEPOT OGDEN 54,520

3 ATLANTA ARMY DEPOT 6,840

4 DEFENSE DEPOT MEMPHIS 29,640

5 NAVAL SUPPLY CENTER NORFOLK1,200

6 NAVAL SUPPLY CENTER OAKLAND 2,640

7 NAVAL SUPPLY CENTER SAN DIEGO 240 UNDER ITEM 1 OF YOUR BID YOU INSERTED THE FOLLOWING: "ANY DESTINATIONS 111,400 PR $2.90 ADD ?02 PER PAIR

TO ITEMS 5, 6, 7 "ANY DESTINATIONS 78,000 PR 2.65 ADD ?02 PER PAIR

TO ITEMS 5, 6, 7.'

UNDER EACH OF THE OTHER SIX ITEMS, YOU INSERTED THE WORDS "AS ABOVE.' THEREAFTER, A TELEGRAM WAS RECEIVED BY THE PROCUREMENT ACTIVITY FROM YOUR COMPANY, PRIOR TO BID OPENING, WHICH READ:

"RE OUR BID DSA100-68-B-1009 OPENS JANUARY 30TH INCREASE FIRST INCREMENT QUANTITY TO 129400 PAIR AND REDUCE SECOND INCREMENT QUANTITY TO 60000 PAIR ALL OTHER TERMS CONDITIONS REMAIN THE AME"

THE CONTRACTING OFFICER INTERPRETED YOUR COMPANY'S BID AND TELEGRAPHIC MODIFICATION AS A SPECIFIC LIMITATION UPON THE AWARD WHICH COULD BE MADE TO YOUR COMPANY. HE DECIDED THAT THE BID AND TELEGRAM WERE AN INDICATION THAT AWARD WOULD HAVE TO BE MADE TO YOUR COMPANY FOR 129,400 PAIRS OF GLOVES AT $2.90 A PAIR BEFORE AN AWARD COULD BE MADE TO IT FOR ALL OR ANY PART OF THE 60,000 PAIRS OFFERED AT $2.65 A PAIR. THE BASIS FOR HIS DETERMINATION WAS TWOFOLD. FIRST, IN THE PAST, YOUR COMPANY HAD ALWAYS BID PRICES IN AN ASCENDING ORDER, WHEREAS, IN THIS INVITATION THE PRICES WERE BID IN A DESCENDING ORDER. SECOND, THE DICTIONARY DEFINITION OF THE WORD "INCREMENT" USED IN THE TELEGRAPHIC MODIFICATION IS "INCREASE" OR "ONE OF A SERIES OF REGULAR CONSECUTIVE ADDITIONS," SO THAT THE TELEGRAM WAS INTERPRETED AS AN INDICATION THAT THE 129,400 PAIRS WERE THE FIRST QUANTITY TO BE AWARDED AND THE 60,000 PAIRS AS THE INCREASE OR SECOND QUANTITY TO BE AWARDED. THE CONTRACTING OFFICER'S LEGAL COUNSEL CONCURRED IN THE DETERMINATION.

SIX BIDS WERE RECEIVED UNDER THE INVITATION. THE PRICES OFFERED BY OTHER BIDDERS WERE SUCH THAT THE TOTAL QUANTITY WAS AWARDED BEFORE YOUR COMPANY'S $2.90 PRICE WAS REACHED. IF THE $2.65 PRICE HAD BEEN INTERPRETED AS BEING AVAILABLE BEFORE THE $2.90 PRICE, YOUR COMPANY WOULD HAVE BEEN ELIGIBLE TO RECEIVE AN AWARD FOR 45,400 PAIRS AT THAT PRICE.

YOU ADVISE THAT THE BID PRICES WERE NOT LISTED IN A DESCENDING ORDER WITH ANY PARTICULAR PURPOSE IN MIND, BUT THAT THE HIGHER PRICE WAS COMPUTED FIRST AND ENTERED FIRST IN THE BID. YOU HAVE CONTENDED FURTHER THAT THE ONLY PURPOSE OF THE TELEGRAM WAS TO MODIFY THE NUMBER OF PAIRS OF GLOVES OFFERED AT THE DIFFERENT PRICES AND THAT THE WORD "INCREMENT" WAS NOT USED IN THE DICTIONARY SENSE BUT IN A CUSTOMARY COMMERCIAL SENSE TO INDICATE "UNIT" OR "ITEM.' YOU STATE THEREFORE THAT THERE WAS NO LIMITATION IN YOUR BID AS TO THE ORDER IN WHICH PRICES WERE TO PREVAIL AND THAT UNDER THE TERMS OF THE INVITATION THE GOVERNMENT WAS AT LIBERTY TO MAKE AN AWARD TO YOUR COMPANY BEGINNING WITH YOUR LOWEST PRICE.

YOUR BASES OF PROTEST HAVE CONSIDERABLE MERIT. THE "INFORMATION TO BIDDERS" SHEET WHICH WAS ATTACHED TO THE FRONT OF THE INVITATION FOR BIDS STATED: "* * * FOR THE PURPOSE OF EVALUATION AND AWARD THE QUANTITIES AND PRICES SUBMITTED BY THE BIDDER, WHETHER THE BIDS ARE ON AN FOB ORIGIN OR DESTINATION BASIS, WILL BE EVALUATED IN ORDER TO SECURE FOR THE GOVERNMENT THE LOWEST OVERALL COST. ANY BIDDER INTENDING TO LIMIT THE QUANTITY THE GOVERNMENT MAY ACCEPT AT A SPECIFIC QUOTED PRICE MUST AFFIRMATIVELY SO STATE. FAILURE OF A BIDDER TO LIMIT THE QUANTITY AT ANY STATED PRICE WILL RESULT IN THE GOVERNMENT ACCEPTING ANY OR ALL OF THE QUANTITY OFFERED AT THE LOWEST QUOTED PRICES.'

THE FACESHEET OF THE INVITATION PROVIDED THAT ALL OFFERS ARE SUBJECT TO SUCH PROVISIONS AS ARE ATTACHED TO THE INVITATION. THERE WAS NO STATEMENT IN YOUR ORIGINAL BID THAT THE HIGHER PRICE HAD TO BE ACCEPTED BEFORE THE LOWER ONE. APPARENTLY, TOO, FROM THE OTHER BIDS RECEIVED ON THIS AND PAST PROCUREMENTS, IT IS NOT UNUSUAL FOR BIDDERS TO QUOTE LOWER PRICES FOR FIRST QUANTITIES AND HIGHER PRICES FOR ADDITIONAL QUANTITIES. THUS, UNDER THE ORIGINAL BID IT WOULD HAVE BEEN PROPER TO INITIALLY ACCEPT THE QUANTITIES WHICH WERE QUOTED AT THE LOWER PRICE. WHILE YOUR COMPANY'S STYLE OF BIDDING MAY HAVE CHANGED FROM PRIOR PROCUREMENTS, SUCH FACT SHOULD NOT HAVE BEEN USED TO ALTER THE MEANING OF LANGUAGE AND THE PRICE QUOTATIONS ENTERED ON THE INSTANT INVITATION.

THE EVIDENT INTENT OF THE TELEGRAPHIC MODIFICATION WAS TO SWITCH 18,000 PAIRS OF GLOVES FROM THE 78,000-PAIR QUANTITY TO THE 111,400 PAIR QUANTITY. THE TELEGRAM STATED THAT ALL OTHER TERMS AND CONDITIONS WERE TO REMAIN THE SAME. THE WORDS "FIRST INCREMENT QUANTITY" AND "SECOND INCREMENT QUANTITY" APPEAR TO HAVE BEEN USED AS WORDS OF DESCRIPTION RATHER THAN OF RESTRICTION. IN OTHER WORDS, SUCH WORDS WERE BEING USED TO IDENTIFY THE LOCATION OF THE QUANTITIES IN THE BID. MOREOVER, IT IS APPARENT THAT THE WORD "INCREMENT" WAS NOT USED IN THE DICTIONARY SENSE, SINCE IF THE REFERENCED "FIRST INCREMENT" WAS AN "INCREASE" IN THE DICTIONARY SENSE IT WOULD HAVE BEEN IN ADDITION TO THE ONLY OTHER QUANTITY IN THE BID WHICH IS LABELED "SECOND INCREMENT.' THIS USAGE OF THE WORD IS PATENTLY INCONSISTENT WITH THE INTENT OF YOUR BID.

HOWEVER, WHILE THE OVERALL INTENT OF THE TELEGRAM APPEARS OBVIOUS TO US, IN VIEW OF THE REFERENCE TO "FIRST INCREMENT" AND "SECOND INCREMENT" IN THE TELEGRAM, WE CAN UNDERSTAND THE CONTRACTING OFFICER'S POSITION IN THE MATTER. CONSIDERING THAT THE CONTRACTING OFFICER'S INTERPRETATION OF YOUR BID HAD SOME BASIS IN FACT AND THAT THE POSSIBLE AMBIGUITY AROSE SOLELY FROM YOUR MODE OF BIDDING--THERE BEING NO SUGGESTION OF IRREGULARITY--OUR OFFICE WILL NOT DISTURB ANY OF THE AWARDS WHICH WERE MADE IN GOOD FAITH AND IN RELIANCE UPON LEGAL ADVICE.