B-164560, AUG. 1, 1968

B-164560: Aug 1, 1968

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST REJECTION OF YOUR BID UNDER INVITATION FOR BIDS NO. THE SUBJECT INVITATION WAS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT ISSUED ON MAY 16. AMENDMENT NO. 1 WAS ISSUED TO PROVIDE FOR PROGRESS PAYMENTS IN ACCORDANCE WITH THE CLAUSE PRESCRIBED AT ASPR E- 510.1. FIVE BIDS WERE RECEIVED ON THE DATE SCHEDULED. ALTHOUGH YOURS WAS THE LOWEST BID RECEIVED. IT WAS FOUND NONRESPONSIVE BECAUSE OF THE FOLLOWING LANGUAGE INCLUDED IN THE LETTER DATED JUNE 3. TRANSMITTING YOUR BID: "THE ABOVE QUOTATION IS ... PROGRESS PAYMENTS WILL BE REQUIRED.'. AWARD WAS MADE TO THE SECOND LOWEST BIDDER ON JUNE 21. IT IS YOUR CONTENTION THAT BECAUSE OF DOUBT AS TO WHETHER THE AMENDMENT PROVIDING FOR PROGRESS PAYMENTS WOULD BE EFFECTIVE.

B-164560, AUG. 1, 1968

TO BLOCK ENGINEERING, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST REJECTION OF YOUR BID UNDER INVITATION FOR BIDS NO. N00123-68-B-0971C, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, LOS ANGELES, CALIFORNIA, FOR THE PROCUREMENT OF A CUSTOM MADE MOBILE SPECTRORADIOMETRIC LABORATORY.

THE SUBJECT INVITATION WAS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT ISSUED ON MAY 16, 1968, WITH OPENING SCHEDULED ON JUNE 6, 1968. ON MAY 22, 1968, AMENDMENT NO. 1 WAS ISSUED TO PROVIDE FOR PROGRESS PAYMENTS IN ACCORDANCE WITH THE CLAUSE PRESCRIBED AT ASPR E- 510.1. FIVE BIDS WERE RECEIVED ON THE DATE SCHEDULED. ALTHOUGH YOURS WAS THE LOWEST BID RECEIVED, IT WAS FOUND NONRESPONSIVE BECAUSE OF THE FOLLOWING LANGUAGE INCLUDED IN THE LETTER DATED JUNE 3, 1968,TRANSMITTING YOUR BID:

"THE ABOVE QUOTATION IS ... CONTINGENT UPON A CONTRACT INCORPORATING MUTUALLY ACCEPTABLE TERMS AND CONDITIONS. PROGRESS PAYMENTS WILL BE REQUIRED.' AWARD WAS MADE TO THE SECOND LOWEST BIDDER ON JUNE 21, 1968.

IT IS YOUR CONTENTION THAT BECAUSE OF DOUBT AS TO WHETHER THE AMENDMENT PROVIDING FOR PROGRESS PAYMENTS WOULD BE EFFECTIVE, YOU INCLUDED THE ABOVE -QUOTED LANGUAGE TO MAKE SURE YOU WOULD BE ENTITLED TO SUCH PAYMENTS IN THE EVENT OF AN AWARD. YOU STATE THAT YOUR DOUBT IN THIS REGARD RESULTED FROM THE FACT THAT THE AMENDMENT DID NOT DELETE SECTION 7.4 OF STANDARD FORM 36, WHICH PROVIDES: "IF THIS INVITATION FOR BIDS DOES NOT PROVIDE FOR PROGRESS PAYMENTS, A PROGRESS PAYMENT CLAUSE CANNOT BE INCLUDED IN THE CONTRACT AT THE TIME OF AWARD, AND ACCORDINGLY UNDER THESE CIRCUMSTANCES ANY BID CONDITIONED UPON PROVISIONS FOR PROGRESS PAYMENTS WILL BE REJECTED AS NON RESPONSIVE.' YOU CONCEDE THAT IT IS UNFORTUNATE THE TWO SENTENCES IN YOUR TRANSMITTAL LETTER WERE NOT TIED TOGETHER; HOWEVER, YOU STATE THAT THE "MUTUALLY ACCEPTABLE TERMS AND CONDITIONS" IN THE FIRST SENTENCE WERE INTENDED TO REFER ONLY TO THE "INCLUSION OF PROVISIONS DEALING WITH PROGRESS PAYMENTS".

IN SUPPORT OF YOUR ARGUMENT AS TO THE INTENDED MEANING OF THE LANGUAGE, YOU HAVE SUBMITTED AN AFFIDAVIT FROM THE AUTHOR OF THE LANGUAGE IN WHICH HE SAYS THAT IT WAS INTENDED TO CONDITION THE OFFER SOLELY UPON THE INCLUSION OF PROGRESS PAYMENTS. AS FURTHER EVIDENCE THAT THIS WAS THE INTENDED MEANING, YOU STATE THAT IT WOULD BE "ABSURDFOR A FIRM AS EXPERIENCED IN BIDDING ON GOVERNMENT CONTRACTS AS BLOCK TO TAKE EXCEPTION TO, OR TO ATTEMPT TO PROVIDE FOR RENEGOTIATION OF, ANY SUBSTANTIVE MATTER ON THE SECOND STEP OF A FORMALLY ADVERTISED TWO-STEP PROCUREMENT".

IT IS YOUR POSITION THAT NOTWITHSTANDING THE LANGUAGE IN YOUR COVER LETTER, THE LANGUAGE SHOULD HAVE BEEN TREATED AS EITHER A MINOR INFORMALITY OR IRREGULARITY UNDER ASPR 2-405 OR AS A MISTAKE IN BID UNDER ASPR 2-406 AND BLOCK SHOULD HAVE RECEIVED THE AWARD. YOUR ARGUMENT THAT THE LANGUAGE SHOULD HAVE BEEN CORRECTED OR WAIVED AS A MINOR INFORMALITY OR IRREGULARITY IS BASED ON THE PROPOSITION THAT IT REFERS TO PROGRESS PAYMENTS ONLY AND, SINCE THE INVITATION PROVIDES FOR SUCH PAYMENTS, IT IS REDUNDANT OR A MATTER OF FORM AND SHOULD BE DISREGARDED. AS TO THE MISTAKE ARGUMENT, YOU CONTEND THAT THE FACT THAT THE TWO SENTENCES WERE NOT "TIED TOGETHER, CONSTITUTED EITHER AN APPARENT MISTAKE OR A MISTAKE WHICH THE CONTRACTING OFFICER HAD REASON TO BELIEVE EXISTED" AND, IN EITHER CASE, HE WAS REQUIRED BY ASPR TO REQUEST VERIFICATION. YOU ARGUE THAT SINCE THE REFERENCE TO PROGRESS PAYMENTS WAS REDUNDANT, IT INDICATED A CLERICAL ERROR APPARENT FROM THE FACE OF THE BID OR, IF IT IS NOT REGARDED AS AN APPARENT CLERICAL ERROR, IT SHOULD HAVE ,CAUSED THE CONTRACTING OFFICER TO SUSPECT THAT A FACE READING OF THE -MUTUALLY ACCEPTABLE- CLAUSE WAS A MISTAKE". IN SUPPORT OF THESE ARGUMENTS, YOU HAVE CITED SEVERAL DECISIONS OF THE COMPTROLLER GENERAL, AS WELL AS SEVERAL PROVISIONS OF NAVY CONTRACT LAW. BECAUSE OF OUR POSITION AS STATED HEREINAFTER, WE DO NOT BELIEVE IT IS NECESSARY TO DISCUSS THESE CITATIONS INDIVIDUALLY. HOWEVER, IT SHOULD BE NOTED THAT ONE OF THE COMPTROLLER GENERAL DECISIONS YOU HAVE CITED, 37 COMP. GEN. 27, HAS BEEN OVERRULED. 40 COMP. GEN. 432.

UNDER WELL-RECOGNIZED PRINCIPLES OF COMPETITIVE BIDDING, A CONTRACT MAY BE AWARDED ONLY ON A BID WHICH IS FULLY RESPONSIVE TO THE MATERIAL TERMS OF THE INVITATION. 40 COMP. GEN. 447. THE RESERVATION IN A BID OF A RIGHT TO NEGOTIATE AFTER OPENING ON A MATERIAL PROVISION OF AN INVITATION IS INCONSISTENT WITH THE PRINCIPLES OF COMPETITIVE BIDDING AND RENDERS THE BID NONRESPONSIVE. 42 COMP. GEN. 96. THE RESPONSIVENESS OF BIDS IS DETERMINED ON THE BASIS OF THE INFORMATION AVAILABLE TO THE GOVERNMENT AT THE TIME OF BID OPENING, SO THAT MATERIAL OR INFORMATION SUBMITTED AFTER OPENING MAY NOT ENTER INTO SAID DETERMINATION. IF A BID IS NONRESPONSIVE TO THE MATERIAL REQUIREMENTS OF AN INVITATION, IT DOES NOT MATTER WHETHER THE FAILURE TO COMPLY WAS DUE TO INADVERTENCE, MISTAKE OR OTHERWISE. COMP. GEN. 819; 42 ID. 725.

THEREFORE, THE LANGUAGE IN YOUR COVER LETTER MUST BE VIEWED AS EXPRESSING THE CONDITIONS AND LIMITATIONS THE WORDS THEMSELVES CONVEY, RATHER THAN ANY UNDISCLOSED INTENTIONS, MOTIVATIONS, OVERSIGHT OR MISTAKE ATTENDING THEIR USE. WE BELIEVE THAT THE FIRST SENTENCE OF THE LANGUAGE IN QUESTION MAY REASONABLY BE CONSTRUED ONLY AS RESERVING TO BLOCK THE RIGHT TO ACCEPT, REJECT OR MODIFY ALL THE TERMS AND CONDITIONS OF THE INVITATION AND SPECIFICATIONS, AND IS NOT LIMITED TO ,MUTUALLY ACCEPTABLE" PROVISIONS FOR PROGRESS PAYMENTS. ACCORDINGLY, YOUR BID WAS NONRESPONSIVE REGARDLESS OF YOUR PRIVATE INTENTIONS REGARDING THE LANGUAGE IN QUESTION.

SINCE YOUR BID AS SUBMITTED WAS NONRESPONSIVE, THE REGULATIONS CONCERNING MINOR INFORMALITIES OR IRREGULARITIES OR MISTAKES IN BIDS ARE NOT FOR APPLICATION AND YOUR BID WAS PROPERLY REJECTED. 40 COMP. GEN. 432, 435.