B-164565, SEPT. 5, 1968

B-164565: Sep 5, 1968

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WILDER: REFERENCE IS MADE TO YOUR LETTER OF JUNE 14. THE INVITATION WAS ISSUED ON MAY 27. TWO BIDS WERE RECEIVED. THE WELLESLEY CORPORATION BID WAS IN THE AMOUNT OF $6. THE DISCOUNT OFFERED BY RICH WAS DEDUCTED IN THE EVALUATION OF ITS BID RESULTING IN ITS BID BEING LOW AT $6. AWARD WAS MADE TO IT ON JUNE 13. YOU CONTEND THAT THE WELLESLEY CORPORATION WAS IN FACT THE LOW BIDDER SINCE THE DISCOUNT OFFERED BY W.T. SHOULD NOT HAVE BEEN CONSIDERED IN EVALUATING ITS BID. YOU STATE THAT ANY PROMISE OF A DISCOUNT BY ANY OTHER BIDDER IS SOLELY CONTINGENT ON THAT BIDDER BEING PAID BY THE GOVERNMENT WITHIN 20 DAYS. (A) NOTWITHSTANDING THE FACT THAT A BLANK IS PROVIDED FOR A TEN (10) DAY DISCOUNT.

B-164565, SEPT. 5, 1968

TO MR. RICHARD L. WILDER:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 14, 1968, PROTESTING, ON BEHALF OF THE WELLESLEY CORPORATION, THE AWARD OF A CONTRACT TO THE W.T. RICH COMPANY, INC., NEWTON, MASSACHUSETTS, UNDER UNITED STATES ARMY NATICK LABORATORIES INVITATION FOR BIDS NO. DAAG17-68-B-0041.

THE INVITATION WAS ISSUED ON MAY 27, 1968, AND REQUESTED BIDS FOR THE PROCUREMENT OF SERVICES TO RELOCATE TWO BALLISTICS RANGES AND AN AIR CONDITIONING SYSTEM FROM THE UNITED STATES ARMY NATICK LABORATORIES, NATICK, MASSACHUSETTS, TO THE ARMY MATERIALS AND MECHANICS RESEARCH CENTER, WATERTOWN, MASSACHUSETTS.

TWO BIDS WERE RECEIVED. THE WELLESLEY CORPORATION BID WAS IN THE AMOUNT OF $6,850 WITH NO CASH DISCOUNT OFFERED THE GOVERNMENT FOR PROMPT PAYMENT. THE BID SUBMITTED BY W.T. RICH COMPANY, INC., IN THE AMOUNT OF $6,900 OFFERED A ONE PERCENT 20-DAY CASH DISCOUNT FOR PROMPT PAYMENT. THE DISCOUNT OFFERED BY RICH WAS DEDUCTED IN THE EVALUATION OF ITS BID RESULTING IN ITS BID BEING LOW AT $6,831, AND AWARD WAS MADE TO IT ON JUNE 13, 1968.

YOU CONTEND THAT THE WELLESLEY CORPORATION WAS IN FACT THE LOW BIDDER SINCE THE DISCOUNT OFFERED BY W.T. RICH COMPANY, INC., SHOULD NOT HAVE BEEN CONSIDERED IN EVALUATING ITS BID. YOU STATE THAT ANY PROMISE OF A DISCOUNT BY ANY OTHER BIDDER IS SOLELY CONTINGENT ON THAT BIDDER BEING PAID BY THE GOVERNMENT WITHIN 20 DAYS, AND THAT SUCH PAYMENT WOULD PROBABLY NOT BE MADE.

SECTION 16 ON PAGE 1 OF THE INVITATION HERE INVOLVED SPECIFICALLY SOLICITED DISCOUNTS FOR PROMPT PAYMENT. MOREOVER, SOLICITATION INSTRUCTIONS AND CONDITIONS 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.'

UNDER THE TERMS OF THIS INVITATION, ANY BIDDER HAD A RIGHT TO OFFER A DISCOUNT. SECTION 2-407.3 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR),"DISCOUNT," CLEARLY STATES THAT ,ANY DISCOUNT OFFERED SHALL BE DEDUCTED FROM THE BID PRICE * * * UNLESS THE DISCOUNT OFFERED IS FOR A LESSER PERIOD THAN THE MINIMUM NUMBER OF DAYS SPECIFIED IN THE INVITATION FOR BIDS.' PURSUANT TO ASPR 2-407.3 (B), THE DISCOUNT OFFERED BY W.T. RICH COMPANY, INC., CAME WITHIN THE ALLOWABLE DISCOUNT PERIOD AND ACCORDINGLY WAS DEDUCTED FROM THE BID PRICE TO DETERMINE WHO WAS THE SUCCESSFUL BIDDER. IN EVALUATING BIDS, IT IS REQUIRED THAT THERE BE DEDUCTED FROM THE GROSS PRICE THE AMOUNT OF THE DISCOUNT OFFERED BY THE BIDDER, SINCE IT IS PRESUMED THAT THE GOVERNMENT WILL TAKE ADVANTAGE OF ANY DISCOUNT OFFERED. SEE 32 COMP. GEN. 328. THE PRACTICE OF BIDDERS OFFERING DISCOUNTS FOR PROMPT PAYMENT BY THE GOVERNMENT IS SO WELL ESTABLISHED THAT THE GOVERNMENT MAY ACCEPT THE SAME EVEN WHEN THE IFB DOES NOT CONTAIN ANY PROVISION FOR CONSIDERING THE SAME. 40 COMP. GEN. 518.

SINCE THE ADMINISTRATIVE ACTION TAKEN WAS IN CONFORMITY WITH THE TERMS OF THE IFB AND THE APPLICABLE REGULATIONS, WE MUST CONCLUDE THAT THE BID OF THE W.T. RICH COMPANY, INC., WAS PROPERLY DETERMINED TO BE THE LOWEST AT $6,831.