B-165439, MAR. 4, 1969

B-165439: Mar 4, 1969

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

SECRETARY: REFERENCE IS MADE TO THE ADMINISTRATIVE REPORT DATED DECEMBER 5. WAS ARRANGED UNDER THREE SCHEDULES FOR A TOTAL OF 84 LINE ITEMS. ALL ITEMS WERE REQUIRED TO BE A. WHERE CHANCE PART NUMBERS WERE KNOWN. THEY WERE INDICATED. A FULL DESCRIPTION WAS USED. WAS AS FOLLOWS: BIDDER SCH. 490.53 AT THE BID OPENING IT WAS NOTED THAT THE MAY DWELL HARTZELL BID AS SUBMITTED DID NOT INCLUDE THE APPLICABLE ARIZONA STATE TAX. THE CONTRACTING OFFICER REPORTS THAT SINCE IT IS STANDARD INDUSTRY PRACTICE IN ARIZONA FOR OFFERORS TO INDICATE THE TAX AS A SEPARATE ITEM. THE OMISSION WAS CONSIDERED A CLERICAL ERROR AND THE TAX WAS INCLUDED IN THE BID FOR COMPARISON UNDER EACH OF THE THREE SCHEDULES. HOT LINE TOOLS NOW IN USE THROUGHOUT THE PROJECT ARE PRIMARILY OF A.B.

B-165439, MAR. 4, 1969

TO MR. SECRETARY:

REFERENCE IS MADE TO THE ADMINISTRATIVE REPORT DATED DECEMBER 5, 1968, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, CONCERNING THE PROTEST OF MAY DWELL HARTZELL UTILITY EQUIPMENT CORPORATION, AGAINST THE AWARD OF A CONTRACT TO A.B. CHANCE COMPANY, UNDER A FORMALLY ADVERTISED PROCUREMENT, SOLICITATION NO. 304-39-198, FOR THE FURNISHING OF HOTLINE TOOLS AND EQUIPMENT TO SERVICE THE 345 KV TRANSMISSION LINES ON THE PARKER-DAVIS PROJECT.

THE SOLICITATION, ISSUED ON AUGUST 19, 1968, WAS ARRANGED UNDER THREE SCHEDULES FOR A TOTAL OF 84 LINE ITEMS. ALL ITEMS WERE REQUIRED TO BE A. B. CHANCE OR EQUAL. WHERE CHANCE PART NUMBERS WERE KNOWN, THEY WERE INDICATED; FOR CERTAIN SPECIAL TOOLS LISTED, A FULL DESCRIPTION WAS USED.

THE ABSTRACT OF BIDS WITH ARIZONA STATE TAX INCLUDED, WHERE APPLICABLE, WAS AS FOLLOWS:

BIDDER SCH. I SCH. II SCH. III TOTAL

------ ------ ------- -------- ----- 1. MAY DWELL HARTZELL $3,246.88 $2,713.04 $2,385.35 $8,345.27 2. A.B. CHANCE CO. 3,237.40 2,778.15 2,376.00 8,391.55 3. GRAYBAR ELECTRIC CO. 3,343.82 2,742.43 2,404.78 8,490.53 4. WESTINGHOUSE ELECTRIC

SUPPLY COMPANY 3,343.82 2,742.43 2,404.78 8,490.53

AT THE BID OPENING IT WAS NOTED THAT THE MAY DWELL HARTZELL BID AS SUBMITTED DID NOT INCLUDE THE APPLICABLE ARIZONA STATE TAX. THE CONTRACTING OFFICER REPORTS THAT SINCE IT IS STANDARD INDUSTRY PRACTICE IN ARIZONA FOR OFFERORS TO INDICATE THE TAX AS A SEPARATE ITEM, THE OMISSION WAS CONSIDERED A CLERICAL ERROR AND THE TAX WAS INCLUDED IN THE BID FOR COMPARISON UNDER EACH OF THE THREE SCHEDULES. THE MAY DWELL HARTZELL REPRESENTATIVE STATED AT BID OPENING THAT THEY HAD FORGOTTEN TO ADD THE TAX TO THEIR BID.

IN A LETTER OF OCTOBER 11, 1968, MAY DWELL HARTZELL QUESTIONS THE AUTHORITY OF THE CONTRACTING OFFICER TO ADD THE ARIZONA STATE TAX TO THE MAY DWELL HARTZELL BID, OUSTING THAT FIRM AS LOW BIDDER ON SCHEDULES I AND III, ALTHOUGH LEAVING IT AS LOW BIDDER ON SCHEDULE II AND THE TOTAL OF THE THREE SCHEDULES.

ALL OFFERORS PROPOSED TO FURNISH A. B. CHANCE TOOLS AND EQUIPMENT EXCEPT MAY DWELL HARTZELL WHO OFFERED A COMBINATION OF A. B. CHANCE AND JAMES R. KEARNEY MANUFACTURE.

THE CONTRACTING OFFICER, THE ACTING PROJECT MANAGER, REJECTED THE LOW BID AND MADE AWARD TO A. B. CHANCE, SECOND LOW BIDDER, FOR THE FOLLOWING STATED REASONS:

"1. HOT LINE TOOLS NOW IN USE THROUGHOUT THE PROJECT ARE PRIMARILY OF A.B. CHANCE CO. MANUFACTURE, AND WE FEEL THAT STANDARDIZATION OF THIS EQUIPMENT IS IMPORTANT.

HOT LINE TOOLS ARE MADE TO INDUSTRY STANDARDS; HOWEVER THERE ARE VARIATIONS BETWEEN MANUFACTURERS; I.E., PROCESSES TO ACHIEVE HIGH VOLTAGE INSULATION, RATINGS, COLORS FOR HOT STICKS, METHODS OF ADAPTING TOOLS, ETC.

"2. THE HAZARDS WHICH ARE A PART OF ANY WORK DONE ON HIGH-VOLTAGE POWER LINES REQUIRE COMPLETE WORKER CONFIDENCE IN HIS TOOLS AND EQUIPMENT. PROJECT LINE CREWMEN HAVE HAD TRAINING USING A.B. CHANCE CO. TOOLS AND HAVE CONFIDENCE IN THEM. THIS IS VERY IMPORTANT FROM A SAFETY STANDPOINT.

"3. IN THIS SOLICITATION, THE LOW BIDDER IS OFFERING TOOLS FROM TWO MANUFACTURERS, A.B. CHANCE CO. AND JAMES R. KEARNEY CORP. THE DIFFERENCE BETWEEN THE LOW BIDDER AND THE NEXT LOW BIDDER WHO OFFERS ALL A.B. ALL A. B. CHANCE TOOLS IS THE SUM OF $46.27 OR .55 PERCENT. THE MONETARY SAVINGS TO THE GOVERNMENT DOES NOT OFFSET THE POSSIBLE CONFUSION OR INCONVENIENCE TO THE LINE CREWMEN IN A CRITICAL WORK AREA.

"4. WE FEEL THAT AWARD TO THE SECOND LOW BIDDER, A.B. CHANCE CO., IS IN THE BEST INTEREST OF THE GOVERNMENT.'

THE LAW PERMITS THE AWARD OF A CONTRACT PURSUANT TO FORMAL ADVERTISING ONLY TO "THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.' 41 U.S.C. 253 (B). SUCH LANGUAGE HAS BEEN INTERPRETED TO LIMIT AWARD TO THE RESPONSIVE AND RESPONSIBLE BIDDER WHOSE BID IS LOW. SEE 37 COMP. GEN. 550, 553.

IN THIS CASE THE CONTRACTING OFFICER RECOGNIZED THAT MAY DWELL HARTZELL'S BID WAS LOW AND IT DOES NOT APPEAR THAT HE QUESTIONED THE RESPONSIVENESS OF THAT FIRM'S BID. INSTEAD, REJECTION OF THE LOW BID IN FAVOR OF THE NEXT HIGHER BID APPEARS TO HAVE BEEN BASED SOLELY ON THE CONTRACTING OFFICER'S CONCLUSION THAT THE SMALL DIFFERENCE IN THE PRICES WOULD NOT OFFSET THE STANDARDIZATION ADVANTAGES THOUGHT TO BE OBTAINABLE BY AWARD TO THE SECOND LOW BIDDER. THE LAW APPLICABLE TO THE PROCUREMENT DOES NOT PERMIT EVALUATION OF BIDS ON SUCH BASIS. ACCORDINGLY, WE CONCLUDE THAT THE AWARD WAS CONTRARY TO STATUTE. HOWEVER, IN VIEW OF THE LAPSE OF TIME AND STATE OF PERFORMANCE WE WILL NOT REQUIRE CANCELLATION OF THE CONTRACT.

IN LIGHT OF OUR CONCLUSION IT IS NOT NECESSARY TO CONSIDER THE ADDITION OF THE ARIZONA STATE TAX TO THE LOW BID. WE NOTE ALSO THAT THE SECOND SENTENCE ON PAGE 5 OF THE SOLICITATION IS AMBIGUOUS AS TO WHETHER ONLY ONE AWARD WOULD BE MADE ON THE ENTIRE PROCUREMENT OR WHETHER SEPARATE AWARDS MIGHT BE MADE ON EACH OF THE THREE SCHEDULES. APPARENTLY THE FORMER WAS INTENDED; BUT THE LANGUAGE SHOULD BE CLARIFIED IN FUTURE PROCUREMENTS.

THE CONTRACT AND BIDS ACCOMPANYING THE LETTER OF DECEMBER 5, 1968, ARE RETURNED AS REQUESTED.