B-165150, SEPT. 16, 1968

B-165150: Sep 16, 1968

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WEATHERLY: REFERENCE IS MADE TO LETTER OOJ:PAF:JAR N00024-68-B-7553 SER 69 OF AUGUST 27. THREE BIDS WERE RECEIVED IN THE TOTAL AMOUNTS OF $594. THE RESPONSIVENESS OF THE POLYMER BID IS QUESTIONED ON THREE BASES: (1) IT FAILED TO ACKNOWLEDGE RECEIPT OF AMENDMENTS 0001 AND 0002 TO THE INVITATION. IT IS RECOMMENDED THAT THE POLYMER BID BE REJECTED AS NONRESPONSIVE. IS RECEIVED PRIOR TO THE OPENING HOUR AND DATE SPECIFIED.'. WE ARE ADVISED THAT AMENDMENTS 0001 AND 0002 PROVIDE FOR THE FURNISHING OF CERTAIN GOVERNMENT PROPERTY TO THE CONTRACTOR AND THAT THE AMENDMENTS WOULD RESULT IN A REDUCTION IN THE COST OF PERFORMANCE BY ABOUT $25. REFERENCE IS MADE TO THE GENERAL RULE THAT THE FAILURE OF A BIDDER TO ACKNOWLEDGE AN INVITATION AMENDMENT AFFECTING PRICE.

B-165150, SEPT. 16, 1968

TO MR. WEATHERLY:

REFERENCE IS MADE TO LETTER OOJ:PAF:JAR N00024-68-B-7553 SER 69 OF AUGUST 27, 1968, REQUESTING A DECISION REGARDING THE RESPONSIVENESS OF THE BID OF POLYMER RESEARCH CORP. OF AMERICA UNDER INVITATION FOR BIDS N00024-68-B- 7553.

THE INVITATION SOLICITED BIDS FOR FURNISHING A SILVER ZINC SUBMARINE BATTERY, SPARE CELLS AND SUPPORTING ENGINEERING SERVICES AND DATA. THREE BIDS WERE RECEIVED IN THE TOTAL AMOUNTS OF $594,180, $777,833 AND $1,119,460. POLYMER RESEARCH CORP. SUBMITTED THE LOW BID.

THE RESPONSIVENESS OF THE POLYMER BID IS QUESTIONED ON THREE BASES: (1) IT FAILED TO ACKNOWLEDGE RECEIPT OF AMENDMENTS 0001 AND 0002 TO THE INVITATION; (2) IT FAILED TO QUOTE A PRICE FOR OVERTIME ENGINEERING SERVICES; AND (3) IT STIPULATED A PRICE OF $2.64 PER TROY OUNCE AS THE SILVER BASE PRICE FOR ADJUSTMENT PURPOSES IN THE EVENT THE PRICE OF SILVER CHANGED DURING THE PERFORMANCE OF THE CONTRACT, WHEREAS THE INVITATION, AS AMENDED BY AMENDMENT 0003, PROVIDED THAT THE SILVER BASE PRICE SHOULD BE $2.38 PER TROY OUNCE. IN THE LIGHT OF THESE DEFICIENCIES, IT IS RECOMMENDED THAT THE POLYMER BID BE REJECTED AS NONRESPONSIVE.

WITH RESPECT TO THE ACKNOWLEDGMENT OF AMENDMENTS, THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDE: "4. ACKNOWLEDGMENT OF AMENDMENTS TO SOLICITATIONS. "RECEIPT OF AN AMENDMENT TO A SOLICITATION BY AN OFFEROR MUST BE ACKNOWLEDGED (A) BY SIGNING AND RETURNING THE AMENDMENT, (B) ON THE REVERSE OF STANDARD FORM 33, OR (C) BY LETTER OR TELEGRAM. SUCH ACKNOWLEDGEMENT MUST BE RECEIVED PRIOR TO THE HOUR AND DATE SPECIFIED FOR RECEIPT OF OFFERS.' THE FACESHEETS OF AMENDMENTS 0001 AND 0002 PROVIDE: "OFFERORS MUST ACKNOWLEDGE RECEIPT OF THIS AMENDMENT PRIOR TO THE HOUR AND DATE SPECIFIED IN THE SOLICITATION, OR AS AMENDED, BY ONE OF THE FOLLOWING METHODS: "/A) BY SIGNING AND RETURNING 3 COPIES OF THIS AMENDMENT; (B) BY ACKNOWLEDGING RECEIPT OF THIS AMENDMENT ON EACH COPY OF THE OFFER SUBMITTED, OR (C) BY SEPARATE LETTER OR TELEGRAM WHICH INCLUDES A REFERENCE TO THE SOLICITATION AND AMENDMENT NUMBERS. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. IF, BY VIRTUE OF THIS AMENDMENT YOU DESIRE TO CHANGE AN OFFER ALREADY SUBMITTED, SUCH CHANGE MAY BE MADE BY TELEGRAM OR LETTER, PROVIDED SUCH TELEGRAM OR LETTER MAKES REFERENCE TO THE SOLICITATION AND THIS AMENDMENT, AND IS RECEIVED PRIOR TO THE OPENING HOUR AND DATE SPECIFIED.'

WE ARE ADVISED THAT AMENDMENTS 0001 AND 0002 PROVIDE FOR THE FURNISHING OF CERTAIN GOVERNMENT PROPERTY TO THE CONTRACTOR AND THAT THE AMENDMENTS WOULD RESULT IN A REDUCTION IN THE COST OF PERFORMANCE BY ABOUT $25,000. IN THIS CONNECTION, REFERENCE IS MADE TO THE GENERAL RULE THAT THE FAILURE OF A BIDDER TO ACKNOWLEDGE AN INVITATION AMENDMENT AFFECTING PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT CANNOT BE WAIVED AND TO ASPR 2-405 (IV) PROVIDING THAT THE FAILURE TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT MAY BE WAIVED ONLY IF THE BID RECEIVED CLEARLY INDICATES THAT THE BIDDER RECEIVED THE AMENDMENT OR THE AMENDMENT WOULD HAVE NO AFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE AFFECT ON PRICE. ALSO, REFERENCE IS MADE TO THE STATEMENT IN 44 COMP. GEN. 753, 756, THAT OUR OFFICE IN THE ORDINARY CASE WOULD NOT CONSIDER A DEVIATION OF $1,000 OR MORE AS TRIVIAL OR INSIGNIFICANT, AND TO B 159412, JULY 26, 1966, WHEREIN A DECREASE IN THE COST OF PERFORMANCE OF SOME $3,000 WAS CONSIDERED TO BE A MINOR IRREGULARITY. HOWEVER, IT IS STRESSED BY THE PROCUREMENT ACTIVITY THAT THE $25,000 INVOLVED HERE IS SIGNIFICANTLY MORE THAN THE AMENDMENT AMOUNT CONSIDERED IN 44 COMP. GEN. 753. IT IS POINTED OUT, TOO, THAT THE OBJECTION TO THE CONSIDERATION OF BIDS FAILING TO ACKNOWLEDGE AMENDMENTS AFFECTING A MATERIAL ASPECT OF THE CONTRACT IS THAT IT IS PREJUDICIAL TO OTHER BIDDERS AND LEAVES AN OPTION TO THE NONACKNOWLEDGING BIDDER TO DECIDE AFTER BID OPENING WHETHER TO MAKE HIMSELF ELIGIBLE FOR AWARD BY PRODUCING EVIDENCE TO SHOW THAT HE CONSIDERED THE UNACKNOWLEDGED AMENDMENT OR TO AVOID AWARD BY REMAINING SILENT.

ALTHOUGH POLYMER DID NOT RETURN AMENDMENTS 0001 AND 0002 WITH ITS BID, IT DID SIGN AND RETURN WITH THE BID AMENDMENT 0003. THIS LAST AMENDMENT INCORPORATED BY REFERENCE AMENDMENTS 0001 AND 0002 IN THAT IT REFERRED TO "SCHEDULE PAGE 10, AS AMENDED BY AMENDMENTS 0001 AND 0002.' THEREFORE, BY THE EXECUTION AND RETURN OF AMENDMENT 0003, POLYMER HAS, IN EFFECT, AGREED TO PERFORM IN ACCORDANCE WITH AMENDMENTS 0001 AND 0002. IN ANY EVENT, IT IS REPORTED THAT THE CHANGES BROUGHT ABOUT BY AMENDMENTS 0001 AND 0002 CREATE REDUCTIONS IN PRICE ONLY. WHILE THE GENERAL RULE IS THAT UNACKNOWLEDGED AMENDMENTS AFFECTING PRICE TO A DE MINIMIS EXTENT CAN BE WAIVED, SUCH RULE IS APPLICABLE ONLY IN SITUATIONS WHERE THE AMENDMENTS EFFECT CHANGES WHICH INCREASE THE COST OF PERFORMANCE SINCE, IN THAT EVENT, THE BIDDER IS OFFERING THE GOVERNMENT SOMETHING LESS THAN IT REQUIRES. HOWEVER, IN A SITUATION WHERE THE AMENDMENTS PROVIDE FOR CHANGES WHICH REDUCE THE COST OF PERFORMANCE, AND THE BIDDER FAILS TO ACKNOWLEDGE SUCH CHANGES, HE THEN IS OFFERING TO UNDERTAKE A MORE BURDENSOME CONTRACT THAN OTHER BIDDERS. AS WAS STATED IN 41 COMP. GEN. 550, 553, IF IT IS ASSUMED "THAT THE LOW BIDDER'S FAILURE TO ACKNOWLEDGE THE ADDENDUM WAS DUE TO IGNORANCE OF ITS EXISTENCE, THEN HIS BID PRICE WOULD NOT REFLECT THE LESSENED REQUIREMENTS OF THE SPECIFICATIONS AND, THEREFORE, HIS FAILURE TO ACKNOWLEDGE WOULD ONLY BE PREJUDICIAL TO HIS COMPETITIVE POSITION AND EVEN POSSIBLY BENEFICIAL TO THE POSITION OF THE OTHER BIDDERS.' FURTHER, IN B-159412, JULY 26, 1966, WE HELD THAT "WHERE THE UNACKNOWLEDGED AMENDMENT MERELY EFFECTS A DECREASE IN THE COST OF PERFORMANCE FAILURE TO ACKNOWLEDGE IT SHOULD BE WAIVED AS A MINOR INFORMALITY.' THUS, THE AMOUNT OF THE DECREASE WAS NOT THE SIGNIFICANT FACTOR IN THAT CASE. SEE, ALSO, B-156651, JUNE 21, 1965. FURTHER, IN A SITUATION WHERE THE BIDDER FAILS TO ACKNOWLEDGE AMENDMENTS HAVING THE EFFECT OF DECREASING THE COST OF PERFORMANCE, THE BIDDER DOES NOT HAVE THE OPTION OF REMAINING SILENT AND NOT RECEIVING THE AWARD, SINCE THE GOVERNMENT, PURSUANT TO ASPR 2-405, MAY WAIVE THE FAILURE TO ACKNOWLEDGE THE AMENDMENTS AND MAKE AN AWARD ON THE BASIS OF THE BID AS SUBMITTED.

IN THE CIRCUMSTANCES, THE BID OF POLYMER SHOULD NOT BE REJECTED FOR FAILURE TO ACKNOWLEDGE RECEIPT OF AMENDMENTS 0001 AND 0002.

CONCERNING THE SECOND BASIS OF BID REJECTION, IT IS OBSERVED THAT THE INVITATION REQUIRED BIDDERS TO QUOTE A PRICE FOR OVERTIME ENGINEERING SERVICES, AND THAT SINCE POLYMER DID NOT QUOTE A PRICE ON THAT ITEM, ITS BID IS NONRESPONSIVE. THE REQUIREMENT FOR OVERTIME SERVICES WAS INCLUDED IN THE INVITATION UNDER ITEM 4 AS FOLLOWS:

"4 SUPPORT FOR ITEM 3 (SEE NOTE A)

"4AA TRANSPORTATION (NSP) - NOT SEPARATELY

(PRICED. PRICE OF 4AA

"4AB OVERTIME FOR ITEM 3 (AND 4AB TO BE INCLUDED

(IN ESTIMATED PRICE OF

EXCESS OF 8 HOURS PER DAY (ITEM 4.

MONDAY THRU FRIDAY

($------------PER HOUR)

SATURDAY

($----------- PER HOUR)

SUNDAYS AND HOLIDAYS

($----------- PER HOUR)" NOTE "A" REFERENCED ABOVE STATED:

"OFFEROR TO QUOTE UNIT PRICE FOR SUBITEM 4AA, BUT NOT TO QUOTE

TOTAL PRICE FOR ITEM 4. AN ESTIMATED TOTAL PRICE WILL BE SET FORTH

IN THE RESULTING CONTRACT.'

FURTHER, THE BID SCHEDULE CALLS FOR PRICES ON ITEMS 1, 2 AND 3 AND PROVIDES THAT THE PRICE FOR ITEMS 5AA, 5AB, 5AC SHALL BE INCLUDED IN THE PRICE FOR ITEM 1. AT THE BOTTOM OF THE BID SCHEDULE THERE IS CALLED FOR A "TOTAL (EXCLUSIVE OF ITEM 4).'

OF THE THREE BIDDERS, ONLY THE SECOND LOW BIDDER QUOTED A PRICE FOR OVERTIME. ALTHOUGH A PLACE WAS PROVIDED IN THE BID SCHEDULE FOR QUOTING OVERTIME PRICES, THE NOTE NEXT TO ITEMS 4AA AND 4AB STATED THAT BOTH ITEMS WERE NOT TO BE SEPARATELY PRICED AND THAT THE PRICE WAS TO BE INCLUDED IN THE PRICE OF ITEM 4. YET NOTE "A" ADVISED BIDDERS NOT TO QUOTE A TOTAL PRICE FOR ITEM 4 AND THAT AN ESTIMATED TOTAL PRICE WILL BE SET FORTH IN THE RESULTING CONTRACT. THUS, ON THE ONE HAND, THE BIDDERS ARE INSTRUCTED NOT TO SEPARATELY PRICE ITEM 4AB BUT TO INCLUDE A PRICE FOR THE ITEM IN ITEM 4 AND, ON THE OTHER HAND, BIDDERS ARE ALSO INSTRUCTED NOT TO QUOTE A PRICE FOR ITEM 4. IT THEREFORE MAY BE SAID THAT THE INVITATION PROBABLY CONTRIBUTED TO POLYMER'S FAILURE TO PROVIDE A PRICE FOR OVERTIME, SINCE THAT BIDDER COULD HAVE REASONABLY INTERPRETED THE ABOVE-QUOTED LANGUAGE OF THE SCHEDULE AS AN INDICATION THAT THE PRICE FOR OVERTIME SERVICES WOULD BE FIXED AFTER BID OPENING. UNDER THESE CIRCUMSTANCES, AND SINCE POLYMER IS OTHERWISE OBLIGATED TO FURNISH OVERTIME SERVICES, ITS BID SHOULD NOT BE REJECTED FOR FAILURE TO PROVIDE A PRICE FOR ITEM 4AB.

WE NOTE, ALSO, THAT NONE OF THE BIDDERS PROVIDED A PRICE FOR TRANSPORTATION, ITEM 4AA. NOTE A" PROVIDED THAT THE BIDDER SHOULD QUOTE A UNIT PRICE FOR ITEM 4AA, BUT THE NOTE NEXT TO ITEM 4AA STATED THAT THE ITEM WAS NOT TO BE SEPARATELY PRICED. FURTHER, IT WOULD BE IMPRACTICAL TO QUOTE A PRICE FOR TRANSPORTATION SINCE THE INVITATION DOES NOT CONTEMPLATE ANY SCHEDULED TRAVEL TO A SPECIFIC PLACE, BUT RATHER PROVIDES FOR TRAVEL ANYWHERE IN THE CONTINENTAL UNITED STATES. ALSO, THE SPECIFICATIONS INDICATE THAT ANY TRANSPORTATION WHICH MAY BE REQUIRED IN CONNECTION WITH ENGINEERING SERVICES PERFORMED BY THE CONTRACTOR SHALL BE REIMBURSED ON A REASONABLE ACTUAL COST BASIS.

TURNING TO THE LAST BASIS OF BID REJECTION, THE INVITATION PROVIDED FOR AN ADJUSTMENT IN THE CONTRACT PRICE IN THE EVENT OF A CHANGE IN THE COST OF SILVER. THE INVITATION, AS AMENDED BY AMENDMENT 0003, PROVIDED THAT FOR ADJUSTMENT PURPOSES ALL OFFERORS SHALL BASE THEIR UNIT PRICES UPON $2.38 PER TROY OUNCE OF SILVER REQUIRED IN THE PERFORMANCE OF THE CONTRACT. HOWEVER, IN RESPONSE TO THE INVITATION REQUIREMENT THAT BIDDERS STATE THEIR SILVER BASE PRICE, POLYMER STATED "$2.64 PER TROY OZ.'

AMENDMENT 0003 PROVIDED THAT THE GOVERNMENT RESERVES THE RIGHT TO FURNISH ALL OR PART OF THE SILVER TO THE CONTRACTOR AS GOVERNMENT FURNISHED MATERIAL AND SPACES WERE PROVIDED FOR THE ,CONTRACTOR" TO INDICATE THE SILVER BASE PRICE AND OTHER ELEMENTS OF COST INCLUDED IN THEIR OFFERS FOR SILVER IN ORDER THAT AN APPROPRIATE ADJUSTMENT IN THE CONTRACT PRICE COULD BE MADE IF SILVER IS FURNISHED BY THE GOVERNMENT. PURSUANT THERETO, POLYMER STATED ITS SILVER BASE PRICE PER OUNCE AS $2.38, ITS "G-AND-A" AS $0.20, AND ITS PROFIT AS $0.06, ALL OF WHICH TOTAL $2.64.

THE LETTER OF AUGUST 27 STATES THAT, WHILE THE DISCREPANCY BETWEEN THE REQUIRED $2.38 SILVER BASE PRICE AND THE $2.64 SILVER BASE PRICE STATED BY POLYMER FOR MARKET PRICE ADJUSTMENT PURPOSES DOES NOT AFFECT THE TOTAL PRICE OF THE BID OR THE RELATIVE STANDING OF BIDDERS, IT WAS ESSENTIAL THAT ALL BIDDERS EMPLOY THE SAME BASE PRICE. IN ADDITION, THE LETTER RECOGNIZES THE POSSIBILITY OF ERROR IN THAT POLYMER MAY HAVE CARRIED THE TOTAL OF ITS BASE PRICE,"G-AND-A" AND PROFIT FOR ADJUSTMENT PURPOSES IN THE EVENT SILVER IS FURNISHED BY THE GOVERNMENT AS ITS BASE PRICE FOR SILVER MARKET PRICE ADJUSTMENT PURPOSES. HOWEVER, IT IS STATED THAT IT IS THE COMMAND'S VIEW THAT SUCH A MISTAKE IS NOT CURABLE UNDER ASPR 2-406.2.

WHILE IT MAY BE ESSENTIAL THAT ALL BIDDERS EMPLOY THE SAME BASE PRICE FOR SILVER, THE STATEMENT BY POLYMER OF A HIGHER SILVER BASE PRICE DOES NOT PREJUDICE OTHER BIDDERS BECAUSE IT IMPOSES A GREATER BURDEN UPON POLYMER. THIS IS SO BECAUSE BY STATING $2.64 PER TROY OUNCE AS THE SILVER BASE PRICE, THE GOVERNMENT UNDER THE MATERIAL ESCALATION CLAUSE WOULD BE ENTITLED TO A REDUCTION IN THE CONTRACT PRICE IF THE ACTUAL PRICE IS LESS THAN $2.64, WHEREAS, IF THE PRICE OF SILVER IS $2.64 PER TROY OUNCE, NO ADJUSTMENT IS AUTHORIZED BY THE CLAUSE. ON THE OTHER HAND, BIDDERS WHO HAVE QUOTED THE $2.38 BASE PRICE WOULD BE ENTITLED TO AN INCREASE IN CONTRACT PRICE IF THE PRICE OF SILVER EXCEEDED THAT AMOUNT. HOWEVER, FROM AN EXAMINATION OF THE COST FACTORS FURNISHED BY THE BIDDER IN AMENDMENT 0003 FOR ADJUSTMENT PURPOSES IN THE EVENT THE GOVERNMENT ELECTS TO PROVIDE THE SILVER, IT APPEARS THAT POLYMER MAY HAVE MISTAKENLY TAKEN THE TOTAL OF THOSE COST FACTORS AS ITS BASE PRICE FOR SILVER MARKET PRICE ADJUSTMENT PURPOSES. THEREFORE, IT WOULD BE APPROPRIATE TO REQUEST POLYMER TO VERIFY THIS ASPECT OF ITS BID AND CORRECTION SHOULD BE MADE IF POLYMER CORROBORATES THE FACT THAT IT INTENDED $2.38 PER TROY OUNCE AS ITS BASE PRICE FOR SILVER.

ACCORDINGLY, IT IS THE OPINION OF OUR OFFICE THAT THE LOW BID OF POLYMER RESEARCH CORP. IS RESPONSIVE TO THE INVITATION.

THE ENCLOSURES THAT ACCOMPANIED THE LETTER OF AUGUST 27, 1968, ARE RETURNED AS REQUESTED.