B-165799, FEB. 27, 1969

B-165799, FEB. 27, 1969

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER OF JANUARY 29, 1969, FROM THE NAVAL ORDNANCE SYSTEMS COMMAND FURNISHING A REPORT ON THE PROTEST BY BARRY MILLER, INCORPORATED, UNDER INVITATION FOR BIDS NO. N00017-69-B-2009.

THE INVITATION FOR BIDS WAS ISSUED FOR THE PROCUREMENT OF SAFETY ARMING DEVICES, MK 17 MOD 0, ON OCTOBER 2, 1968, BY THE NAVAL ORDNANCE SYSTEMS COMMAND. BIDS WERE OPENED ON NOVEMBER 13, 1968. THE LOW BID WAS SUBMITTED BY HAMILTON-STANDARD DIVISION OF UNITED AIRCRAFT CORPORATION (HAMILTON-STANDARD), THE NEXT LOW BID BY BARRY MILLER.

THE CRUX OF THE PROTEST BY BARRY MILLER INVOLVES PARAGRAPH 44 OF ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS. THAT PARAGRAPH, ENTITLED USE OF GOVERNMENT PRODUCTION AND RESEARCH PROPERTY, REQUIRES BIDDERS TO STATE WHETHER GOVERNMENT PROPERTY WILL BE USED; IF SO WHETHER ON A RENT-FREE OR RENT-CHARGE BASIS, AND IF ON A RENT-FREE BASIS TO FURNISH INFORMATION NEEDED BY THE CONTRACTING OFFICER TO ADD, FOR PURPOSES OF EVALUATION, A RENTAL VALUE TO THE BID PRICE SO AS TO ELIMINATE COMPETITIVE ADVANTAGE.

THE HAMILTON-STANDARD BID HAD A CHECK IN THE BOX ADVISING THAT THE BIDDER WOULD REQUIRE THE USE OF GOVERNMENT PROPERTY, BUT NEITHER THE RENT-FREE NOR RENT-CHARGE BASIS USE BOX WAS CHECKED. BARRY MILLER CONTENDS THAT THE FAILURE TO CHECK EITHER BOX RENDERED THE HAMILTON STANDARD BID NONRESPONSIVE, AND THE ORDNANCE COMMAND IN THE REPORT OF JANUARY 29, 1969, CONCURS. HOWEVER, HAMILTON-STANDARD CONTENDS THAT THE OMISSION IN THE BID SHOULD EITHER BE WAIVED AS A MINOR INFORMALITY OR IRREGULARITY UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 405 OR CORRECTED BY THE CONTRACTING OFFICER AS A MISTAKE IN BID UNDER ASPR 2-406.3 (A) (3).

THIS OFFICE IS COMPELLED TO REJECT BOTH OF THE POSITIONS ADVANCED BY HAMILTON-STANDARD. IN THE FIRST PLACE, A MINOR INFOMALITY OR IRREGULARITY IS DEFINED IN THE REGULATIONS AS ONE HAVING NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE. IT IS CLEAR FROM PARAGRAPH 44 THAT IF THE RENT-FREE USE BOX HAD BEEN MARKED, AN EVALUATION FACTOR WOULD HAVE BEEN ADDED TO THE HAMILTON-STANDARD BID WHICH NOT ONLY WOULD AFFECT THE BID EVALUATION BUT MAY EVEN HAVE DISPLACED THAT BIDDER AS LOW. THEREFORE, THE MANNER IN WHICH THIS IRREGULARITY IS CHANGED GOES TO THE VERY HEART OF THE COMPETITIVE BIDDING SYSTEM. THIS BASIS IS EQUALLY AS VALID FOR REFUSING TO ALLOW CORRECTION OF THIS OMISSION AS A MISTAKE IN BID. ADDITIONALLY, ASPR 2 406.3 (A) (3) RELIED UPON BY HAMILTON-STANDARD REQUIRES THAT THE MISTAKE AND INTENDED BID BE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. THIS FUNDAMENTAL REQUIREMENT FOR CORRECTION IS ABSENT IN THIS CASE. WHILE THE OMISSION MAY BE CONCEDED, THE INTENDED BID IS AT BEST A MATTER OF SPECULATION. HAMILTON STANDARD HAS URGED THAT THE FAILURE TO FURNISH THE INFORMATION REQUIRED WHEN BIDDING ON A RENT-FREE BASIS ESTABLISHES THAT A RENT CHARGE BASIS WAS INTENDED. HOWEVER, IT IS EQUALLY POSSIBLE THAT THE BIDDER SIMPLY FAILED TO FURNISH THE REQUIRED INFORMATION. IN ANY CIRCUMSTANCE, THE REQUESTED CORRECTIONS WOULD HAVE THE EFFECT OF RENDERING RESPONSIVE A BID WHICH IS OTHERWISE NONRESPONSIVE. SUCH ACTION AFTER BID OPENING IS PATENTLY PREJUDICIAL TO OTHER BIDDERS AND CONTRARY TO THE WELL-ESTABLISHED PROHIBITION AGAINST CORRECTION OF NONRESPONSIVE BIDS. SEE 38 COMP. GEN. 819.

ADDITIONALLY, THE ORDNANCE COMMAND CONSIDERED THE HAMILTON-STANDARD BID NONRESPONSIVE IN VIEW OF THE EXCEPTION TAKEN ON PAGE FOUR OF THE BID TO SPECIFICATION MIL 1246 (MI) FOR A CLASS I CLEAN ROOM. THIS OFFICE CONCURS IN THAT DETERMINATION. IT IS FUNDAMENTAL TO THE CONCEPT OF ADVERTISED PROCUREMENTS THAT THE CONTRACT TO BE AWARDED MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. 38 COMP. GEN. 131. AWARD ON THE BASIS OF THE EXCEPTION TAKEN TO MIL 1246 (MI) WOULD VIOLATE THAT PRINCIPLE. FURTHER, THE ORDNANCE COMMAND HAS STATED THAT SPECIFICATION 7MIL 1246 (MI) DID IN FACT REFLECT THEIR ACTUAL MINIMUM NEEDS. WHILE THIS FACT HAS BEEN DISPUTED BY HAMILTON-STANDARD, IN SUCH INSTANCES WE ACCEPT THE BONA FIDE TECHNICAL JUDGMENT OF THE PROCURING ACTIVITY. 40 COMP. GEN. 294. ACCORDINGLY, WE CONCUR IN THE ORDNANCE COMMAND'S POSITION THAT THE HAMILTON-STANDARD BID SHOULD BE REJECTED AS NONRESPONSIVE.

THE REPORT FROM THE ORDNANCE COMMAND ADVISED THAT THE SECOND LOW BID, SUBMITTED BY BARRY MILLER, WAS ALSO CONSIDERED NONRESPONSIVE FOR REASONS RESPECTING PARAGRAPH 44. BARRY MILLER CHECKED THE BOXES DENOTING THAT GOVERNMENT PROPERTY WOULD BE REQUIRED AND USED ON A RENT FREE BASIS. HOWEVER, BARRY MILLER DID NOT FURNISH WITH THE BID WRITTEN PERMISSION FOR SUCH USE BY THE CONTRACTING OFFICER HAVING COGNIZANCE OF THE PROPERTY AS REQUIRED BY PARAGRAPH 44. ATTACHED TO THE BID WAS A COPY OF A LETTER FROM BARRY MILLER TO THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C., WHICH WAS ROUTED THROUGH THE U.S. NAVAL WEAPONS CENTER, CORONA, CALIFORNIA, REQUESTING WRITTEN PERMISSION FROM THE CENTER. THAT LETTER, GRANTING WRITTEN PERMISSION FOR RENT-FREE USE OF GOVERNMENT PROPERTY, ARRIVED SIX DAYS AFTER BID OPENING. THE ORDNANCE COMMAND IN VIEW OF THE ABOVE CIRCUMSTANCES ADVISED THAT IT CONSIDERS THE BARRY MILLER BID NONRESPONSIVE CITING OUR DECISIONS, 45 COMP. GEN. 572, AND B-154598, DATED NOVEMBER 16, 1964. THIS OFFICE AGREES WITH THAT CONCLUSION.

BARRY MILLER CONTENDS THAT THIS SITUATION IS DISTINGUISHED FROM THE SITUATION CONSIDERED IN B-154598, NOVEMBER 16, 1964, WHERE THE INVITATION SPECIFICALLY REQUIRED THE BIDDER TO HAVE WRITTEN PERMISSION PRIOR TO BID OPENING. IN VIEW OF THE DISPARITY IN THE LANGUAGE USED, WE WILL ASSUME FOR PURPOSES OF ARGUMENT THAT THE ABOVE FACTUAL DISTINCTION MAY BE MADE. HOWEVER, 45 COMP. GEN. 572, B-157626, DATED MARCH 16, 1966, WHEREIN WE REACHED THE SAME CONCLUSION, CONTAINED LANGUAGE SIMILAR TO THAT HERE. 45 COMP. GEN. 572, PARAGRAPH (B) OF THE INVITATION "GOVERNMENT PROPERTY - PRODUCTION AND RESEARCH PROPERTY" CLAUSE STATED IN PART THAT "ALL BIDDERS SHALL SUBMIT WITH THEIR BIDS * * * THE WRITTEN PERMISSION OF THE CONTRACTING OFFICER HAVING COGNIZANCE OF THE PROPERTY FOR USE OF THAT PROPERTY WITHOUT CHARGE.' WE THINK THE REASONS STATED IN THAT DECISION FOR HOLDING THE BID BY BENDIX NONRESPONSIVE, EVEN THOUGH WRITTEN AUTHORIZATION WAS FURNISHED AFTER BID OPENING, ARE EQUALLY APPLICABLE TO THIS SITUATION.

IT HAS ALSO BEEN URGED BY BARRY MILLER THAT SUBPARAGRAPHS (B), (C) AND (D) OF PARAGRAPH 44 OF THE INVITATION ILLUSTRATE THAT THE INFORMATION, REQUESTED IN SUBPARAGRAPH (A) WHEN THE RENT-FREE USE BOX IS MARKED, IS TO BE FURNISHED FOR PURPOSES OF EVALUATION ONLY. WITH THE EXCEPTION OF SUBPARAGRAPH (B) WHICH REFERS TO THE RENT-CHARGE BASIS OF USE, WE AGREE THAT INFORMATION REQUIRED TO BE FURNISHED IS FOR THE PURPOSE OF EVALUATING BIDS AND IT IS PRECISELY FOR THAT REASON THAT THE INFORMATION MAY NOT BE FURNISHED AFTER BID OPENING. SEE 38 COMP. GEN. 819.

THE FINAL QUESTIONS PRESENTED BY THE ORDNANCE COMMAND'S REPORT INVOLVE THE THIRD LOW BID SUBMITTED BY PIQUA ENGINEERING, INCORPORATED (PIQUA). PIQUA IN ITS BID SUBMITTED AN ITEM PRICE ONLY FOR THE FIRST ITEM UNDER BOTH LOT I AND LOT II. HOWEVER, THAT COMPANY DID SUBMIT A TOTAL PRICE ON EACH LOT BASIS. PIQUA ALSO FAILED TO BID ON THE OPTION ITEMS UNDER EITHER LOT. THE FAILURE TO SUBMIT ITEM PRICES IN THE BID OR TO BID ON THE OPTION QUANTITIES DOES NOT RENDER THAT BID NONRESPONSIVE UNDER THIS INVITATION. SUBPART (III), EVALUATION TO DETERMINE AWARD, PARAGRAPH 42, ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS, PROVIDES SPECIFICALLY IN PART:

"* * * OPTION ITEMS 7 AND 12 SHALL NOT BE A PART OF THE EVALUATION FOR AWARD.' SIMILARLY, AMENDMENT NO. 1, DATED OCTOBER 21, 1968, TO THE INVITATION FOR BIDS PROVIDED:

"2. UNDER -ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS-, SUBSTITUTE THE FOLLOWING IN LIEU OF PARAGRAPH 39 (B):

-/B) NOTWITHSTANDING THE CONDITIONS CONTAINED IN PARAGRAPH 10 (C) OF THE STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS, BIDS ON LESS THAN THE TOTAL REQUIREMENTS OF THE FIRST PROGRAM YEAR ONLY (LOT I) WILL NOT BE CONSIDERED, NOR WILL AWARD BE MADE TO ANY BIDDER FOR LESS THAN THE TOTAL REQUIREMENTS OF THE FIRST PROGRAM YEAR ONLY (LOT I).-"

IN VIEW OF THOSE TWO PROVISIONS IN THE INVITATION IT IS CLEAR THAT AWARD AND EVALUATION WOULD BE MADE ON A LOT BASIS ONLY AND THAT THE SUBMISSION OF ITEM PRICES OR BIDS ON OPTION QUANTITIES WAS NOT MATERIAL TO THE EVALUATION. B-161012, DATED JUNE 13, 1967. MOREOVER, PARAGRAPH 42 (II) PROVIDES THAT WHILE UNIT PRICES FOR LIKE ITEMS IN THE TOTAL MULTI-YEAR REQUIREMENT SHALL BE THE SAME FOR EACH PROGRAM YEAR,"THE OPTION ITEMS NEED NOT BE THE SAME.' SINCE THE OPTION QUANTITIES WERE NOT TO BE EVALUATED AND BIDDERS WERE NOT REQUIRED TO SUBMIT OPTION PRICES "THE SAME" AS THE PRICES BID ON THE LOTS, THEY WERE FREE TO QUOTE UNREALISTICALLY HIGH OPTION PRICES. UNDER THESE CIRCUMSTANCES, WE DO NOT CONSIDER PIQUA'S FAILURE TO SUBMIT OPTION PRICES MATERIAL.

THERE IS ALSO FOR CONSIDERATION WHETHER THE BID BY PIQUA MAY BE CORRECTED IN RESPECT TO THE TOTAL BID PRICE SUBMITTED FOR THE SECOND PROGRAM YEAR UNDER LOT II. FOR THE SECOND PROGRAM YEAR PIQUA LISTED THE SAME UNIT PRICE AND TOTAL PRICE AS FOR THE FIRST PROGRAM YEAR. HOWEVER, THE SECOND PROGRAM YEAR CONTAINED FIVE LESS UNITS THAN THE FIRST YEAR AND THE APPROPRIATE REDUCTION TO REFLECT THE CORRECT NUMBER OF UNITS IS REQUESTED. SUCH CORRECTIVE ACTION MAY BE ACCOMPLISHED UNDER ASPR 2-406.3 (A) (2) INASMUCH AS THAT BID WAS THE LOWEST RESPONSIVE BID RECEIVED AND BOTH THE NATURE OF THE ERROR AND INTENDED BID ARE ASCERTAINABLE FROM THE BID ITSELF. IN ADDITION, UNDER THE LANGUAGE OF THE INVITATION, IN THE EVENT OF A DISCREPANCY BETWEEN THE UNIT PRICE AND THE EXTENSION, THE FORMER GOVERNS.

FINALLY, THE ORDNANCE COMMAND REQUESTS OUR CONCURRENCE IN THEIR OPINION THAT THE FAILURE OF PIQUA TO SUBMIT A QUALITY ASSURANCE PLAN WITH ITS BID AS REQUIRED BY PARAGRAPH 41 (B) OF THE ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS DOES NOT RENDER THAT BID NONRESPONSIVE. WHILE PARAGRAPH 41 (B) STATES FAILURE TO SUBMIT A PLAN SHALL RESULT IN THE BID BEING DECLARED NONRESPONSIVE, IT ALSO STATES THAT THE ADEQUACY OF THE PLAN SUBMITTED SHALL BE A FACTOR IN THE DETERMINATION OF RESPONSIBILITY. VIEW OF THIS CLEAR STATEMENT AS TO THE PURPOSE FOR WHICH THE QUALITY ASSURANCE PLAN WAS TO BE SUBMITTED, WE MUST AGREE THAT THE PRINCIPLES SET FORTH IN OUR DECISION, 45 COMP. GEN. 4, PROPERLY APPLY AND THAT FAILURE TO SUBMIT A PLAN WITH A BID DOES NOT RENDER THE BID NONRESPONSIVE.

FOR THE FOREGOING REASONS, THIS OFFICE WOULD HAVE NO OBJECTION TO THE ORDNANCE COMMAND MAKING AWARD TO PIQUA, IF THAT COMPANY IS FOUND OTHERWISE ELIGIBLE. RETURNED HEREWITH AS REQUESTED ARE THE ENCLOSURES TO THE REPORT OF JANUARY 29, 1969.