B-166756, JUL. 2, 1969

B-166756: Jul 2, 1969

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TO MID STATES REFINING COMPANY: REFERENCE IS MADE TO YOUR PROTEST AGAINST REJECTION OF YOUR BIDS FOR THE PROCUREMENT OF PETROLEUM PRODUCTS SUBMITTED PURSUANT TO SOLICITATIONS NOS. WERE ISSUED ON NOVEMBER 25. WHICH WERE OPENED ON DECEMBER 30. IT IS REPORTED THAT ALTHOUGH YOU WERE THE APPARENT LOW BIDDER ON SEVERAL ITEMS UNDER THE THREE SOLICITATIONS. YOUR BIDS WERE REJECTED AS NONRESPONSIVE AND AWARDS WERE MADE TO THE LOW RESPONSIVE BIDDERS BY APRIL 1. THE TWO STATEMENTS ARE AS FOLLOWS: -TRANSPORT TRUCK RATES ARE BASED ON STATE LEGAL MAXIMUM LOAD LIMITS. NO STATE TAX IS INCLUDED ON ANY ITEM. STATE TAXES WILL BE ADDED TO INVOICES WHERE APPLICABLE UNLESS EXEMPTION CERTIFICATES ARE FURNISHED.- .

B-166756, JUL. 2, 1969

TO MID STATES REFINING COMPANY:

REFERENCE IS MADE TO YOUR PROTEST AGAINST REJECTION OF YOUR BIDS FOR THE PROCUREMENT OF PETROLEUM PRODUCTS SUBMITTED PURSUANT TO SOLICITATIONS NOS. DSA600-69-B-0004, DSA600-69-B0005 AND DSA600-69-B 0006, ISSUED BY THE DEFENSE FUEL SUPPLY CENTER, CAMERON STATION, ALEXANDRIA, VIRGINIA.

THE THREE SOLICITATIONS, CALLING FOR BIDS ON SEVERAL ITEMS OF PETROLEUM PRODUCTS, WERE ISSUED ON NOVEMBER 25, 1968, DECEMBER 5, 1968, AND FEBRUARY 4, 1969, RESPECTIVELY, FOR BOTH CIVILIAN AND MILITARY REQUIREMENTS FOR THREE SPECIFIED GEOGRAPHICAL AREAS. YOU BID ON A TOTAL OF 168 ITEMS UNDER ALL THREE SOLICITATIONS, WHICH WERE OPENED ON DECEMBER 30, 1968, JANUARY 16, 1969, AND FEBRUARY 4, 1969, RESPECTIVELY. IT IS REPORTED THAT ALTHOUGH YOU WERE THE APPARENT LOW BIDDER ON SEVERAL ITEMS UNDER THE THREE SOLICITATIONS, YOUR BIDS WERE REJECTED AS NONRESPONSIVE AND AWARDS WERE MADE TO THE LOW RESPONSIVE BIDDERS BY APRIL 1, 1969.

IN A LETTER DATED APRIL 1, 1969, THE DEFENSE FUEL SUPPLY CENTER ADVISED YOU AS FOLLOWS WITH RESPECT TO REJECTION OF YOUR BIDS: "YOUR BIDS UNDER INVITATIONS DSA600-69-B-0004, DSA600-69-B-0005 AND DSA600-69 B-0006 CANNOT BE CONSIDERED FOR AWARD BECAUSE OF TWO STATEMENTS INCLUDED IN THE LETTERS ACCOMPANYING EACH BID WHICH RENDERED YOUR BIDS NONRESPONSIVE TO THE TERMS AND CONDITIONS OF THE BID. THE TWO STATEMENTS ARE AS FOLLOWS: -TRANSPORT TRUCK RATES ARE BASED ON STATE LEGAL MAXIMUM LOAD LIMITS. PENALTY FOR SMALL LOADS TO APPLY IN ACCORDANCE ICC TARIFFS' AND -FEDERAL TAX OF 4 CENTS PER GALLON INCLUDED ALL GASOLINE BIDS. NO STATE TAX IS INCLUDED ON ANY ITEM. STATE TAXES WILL BE ADDED TO INVOICES WHERE APPLICABLE UNLESS EXEMPTION CERTIFICATES ARE FURNISHED.- ,CLAUSE IVB12, PARAGRAPH (B) (3) (I) PROVIDES -AN ORDER PLACED UNDER AN ITEM OF THIS CONTRACT CALLING FOR DELIVERY BY TRANSPORT TRUCK OF MOTOR GASOLINE, FUEL OIL, DIESEL FUEL, OR KEROSENE MAY REQUIRE DELIVERY OF A QUANTITY AS LOW AS 5,200 GALLONS WHENEVER THE ACTIVITY IS RESTRICTED EITHER BY TANK CAPACITY OR BY DIRECTIVE FROM RECEIVING A LARGER QUANTITY.- SINCE YOUR BID TAKES EXCEPTION TO THE MINIMUM LOAD QUANTITIES OF THE SOLICITATION, IT IS NOT POSSIBLE TO ASCERTAIN FROM YOUR BID THE TOTAL COST TO THE GOVERNMENT FOR SUCH ITEMS AND IS THEREFORE NON-RESPONSIVE.'CLAUSE IIIA3B, PARAGRAPH (A) PROVIDES -EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT, THE CONTRACT PRICE INCLUDES ALL APPLICABLE FEDERAL, STATE, AND LOCAL TAXES AND DUTIES.- CLAUSE IVB15 PROVIDES THAT ONLY CERTAIN SPECIFIC STATE AND LOCAL TAXES ARE TO BE EXCLUDED. SINCE YOUR BID STATES THAT NO STATE TAXES ARE INCLUDED AND THAT SUCH TAXES WOULD BE ADDED TO INVOICES YOUR BID IS CLEARLY NOT IN ACCORDANCE WITH THE TERMS OF THE SOLICITATIONS AND CANNOT BE EVALUATED.'

IN SEVERAL LETTERS TO BOTH THE DEFENSE FUEL SUPPLY CENTER AND TO OUR OFFICE YOU HAVE MADE NUMEROUS COMPLAINTS CONCERNING THE CONTENTS AND COMPLEXITY OF THESE SOLICITATIONS AND, IN ADDITION, HAVE EXPLAINED YOUR REASONS FOR THE ABOVE-QUOTED STATEMENTS IN THE LETTERS TRANSMITTING YOUR BIDS. WE HAVE BEEN FURNISHED COPIES OF THE AGENCY'S REPLIES TO YOUR LETTERS AND BELIEVE THAT THEY HAVE SATISFACTORILY ANSWERED YOUR COMPLAINTS CONCERNING THE TERMS AND CONDITIONS OF THE SOLICITATIONS. THEREFORE, NO USEFUL PURPOSE WOULD BE SERVED IN REPEATING THE COMPLAINTS AND ANSWERS THERETO IN THIS DECISION.

WITH REGARD TO REJECTION OF YOUR BIDS, YOU CONTEND THAT THERE IS NO BASIS FOR SUCH ACTION AND STATE THAT THE DEFENSE FUEL SUPPLY CENTER HAS NEVER ADVISED YOU EXACTLY WHY THEY FOUND THE BIDS NONRESPONSIVE. BASICALLY, IT IS YOUR CONTENTION THAT THE PROVISIONS OF YOUR TRANSMITTAL LETTERS ARE NECESSARY TO PROTECT YOU ON RAIL AND TRUCK RATES AND TAXES, APPARENTLY BECAUSE DFSC HAS THE RIGHT UNDER THE SOLICITATIONS TO LIMIT PRICE ESCALATION TO 10 PERCENT AND THE RIGHT TO UNLIMITED DE-ESCALATION OF PRICES. YOU CONTEND THAT YOUR "LETTERS OF TRANSMITTAL SIMPLY STATED BASIS OF ESCALATION OUR BIDS AND DID NOT CHANGE GENERAL INSTRUCTIONS COVERING THESE BIDS.' WITH REGARD TO THE TAXES, IT IS YOUR STATEMENT THAT "WE WERE SIMPLY PROTECTING OURSELVES FROM ADDITIONAL TAXES WHICH MAY OCCUR DURING THE CONTRACT PERIOD, AND ELIMINATING CITY AND SPECIAL GASOLINE TAXES, WHICH INFORMATION WAS NOT AVAILABLE TO US FOR THE ENTIRE TERRITORY COVERED BY THE BIDS.' YOU EMPHASIZE THAT YOU WERE ONLY TALKING ABOUT STATE GASOLINE TAXES BEING EXCLUDED. FINALLY, YOU REQUEST THAT WE INSTRUCT DFSC TO EITHER AWARD YOU THE CONTRACTS OR REIMBURSE YOU FOR EXPENSES INCURRED IN CONNECTION WITH YOUR PROTEST AND PAY THE PROFIT YOU WOULD HAVE EARNED HAD THE CONTRACTS BEEN AWARDED TO YOU.

IT IS AN ESTABLISHED RULE OF FORMAL COMPETITIVE PROCUREMENT BY GOVERNMENT AGENCIES THAT A CONTRACT AWARDED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS, AND WHERE A BID IS SO CONDITIONED AS TO GIVE A BIDDER A COMPETITIVE ADVANTAGE AND PRECLUDE ITS EVALUATION ON AN EQUAL BASIS WITH OTHER BIDS SUBMITTED IN ACCORDANCE WITH THE TERMS OF THE INVITATION, A CONTRACT AWARDED UPON THE BASIS OF SUCH A BID WOULD NOT BE THE CONTRACT OFFERED TO ALL BIDDERS. 41 COMP. GEN. 289. IN THE CITED CASE THE INVITATION FOR BIDS, AS IN THE INSTANT CASE, INCLUDED THE STANDARD FEDERAL, STATE AND LOCAL TAXES CLAUSE. THE BID IN THAT CASE SPECIFICALLY STATED THAT IT DID NOT INCLUDE ANY SALES OR EXCISE TAX. PAGE 293, THE CITED DECISION STATED:

"WE MUST THEREFORE CONCLUDE THAT WHERE, AS IN THE INSTANT CASE, THE INVITATION FOR BIDS INCLUDES THE STANDARD FEDERAL, STATE AND LOCAL TAXES CLAUSE, AND NO PROVISION IS OTHERWISE MADE IN THE INVITATION FOR THE EVALUATION OF TAX-EXCLUDED BID PRICES AND THE AWARD OF A CONTRACT ON THAT BASIS, A BID WHICH IS SUBMITTED ON A TAX-EXCLUDED BASIS, WITHOUT SPECIFICALLY IDENTIFYING THE CLASSES AND AMOUNTS OF TAXES WHICH HAVE BEEN EXCLUDED, MUST BE CONSIDERED NONRESPONSIVE TO THE INVITATION.'

ALTHOUGH THE SOLICITATION IN THE INSTANT CASE DIFFERS IN ONE RESPECT FROM THAT INVOLVED IN THE CITED CASE, THE CASES ARE NOT DISTINGUISHABLE ON THAT BASIS. THE SOLICITATION INVOLVED HERE CONTAINS A PROVISION IN ADDITION TO THE STANDARD TAX CLAUSE EXCLUDING SPECIFIED STATE TAXES. HOWEVER, THE STATEMENT IN YOUR BID IS NOT LIMITED TO THOSE STATE TAXES, BUT PROVIDES THAT "NO STATE TAX IS INCLUDED ON ANY ITEM.' ALTHOUGH YOU CONTEND THAT THIS SENTENCE HAS REFERENCE TO ONLY GASOLINE TAXES, WE BELIEVE THAT SUCH AN INTERPRETATION IS CONTRARY TO THE CLEAR MEANING THE WORDS THEMSELVES CONVEY. THEREFORE, WE BELIEVE THAT YOUR BIDS MUST BE VIEWED AS SUBMITTED ON A TAX-EXCLUDED BASIS AND THE RULE ENUNCIATED IN 41 COMP. GEN. 289 REQUIRES THAT THEY BE REJECTED AS NONRESPONSIVE. SEE ALSO 48 COMP. GEN. 93. SINCE YOUR BIDS WERE PROPERLY REJECTED AS NONRESPONSIVE FOR THE FOREGOING REASONS, IT IS NOT NECESSARY TO CONSIDER THE OTHER BASIS OF NONRESPONSIVENESS RELIED UPON BY DFSC.

WITH REGARD TO YOUR CLAIM FOR COSTS INCURRED IN CONNECTION WITH YOUR PROTEST AND LOSS OF ANTICIPATED PROFIT, IN HEYER PRODUCTS COMPANY, INC. V UNITED STATES, 135 CT. CL. 63, 71, THE COURT HELD: "* * * NOT EVERY UNSUCCESSFUL BIDDER IS ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. RECOVERY CAN BE HAD IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT. IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS AND WITH THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.'

ACCORDINGLY, YOUR PROTEST AGAINST REJECTION OF YOUR BIDS AND YOUR CLAIM FOR COSTS AND PROFITS IS DENIED.