B-166821, JUL. 10, 1969

B-166821: Jul 10, 1969

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TO FWD CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF MAY 1. THE IFB WAS ISSUED ON AUGUST 12. TWO BIDS WERE RECEIVED AND OPENED ON NOVEMBER 15. THE ADVERSE RECOMMENDATIONS WERE BASED ON THE SAME REASON. THAT IS. FWD WAS DETERMINED PURSUANT TO PARAGRAPH 1-904.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) TO BE A NONRESPONSIBLE PROSPECTIVE CONTRACTOR. DCSC APPARENTLY ATTEMPTED TO HAVE FWD ACCEPT A PROVISION FOR LIQUIDATED DAMAGES IN THE EVENT IT WAS AWARDED THE 15 VEHICLE CONTRACT. FWD REFUSED TO ACCEPT SUCH A PROVISION UNLESS THE AWARD WAS FOR 26 VEHICLES. THE CONTRACT FOR 15 TRUCKS WAS AWARDED TO OSHKOSH AS THE LOWEST. FWD APPARENTLY BELIEVES THAT THE REDUCTION IN THE QUANTITY REQUIREMENT AND THE GOVERNMENT'S ATTEMPT TO HAVE FWD ACCEPT A LIQUIDATED DAMAGES CLAUSE.

B-166821, JUL. 10, 1969

TO FWD CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF MAY 1, 1969, PROTESTING THE AWARD OF A CONTRACT TO THE OSHKOSH TRUCK CORPORATION (OSHKOSH) BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC) UNDER INVITATION FOR BIDS (IFB) DSA700-69-B-0169.

THE IFB WAS ISSUED ON AUGUST 12, 1968, FOR THE FURNISHING OF 26 DUMP TRUCKS. TWO BIDS WERE RECEIVED AND OPENED ON NOVEMBER 15, 1968, ONE FROM YOUR FIRM IN THE AMOUNT OF $29,590 PER TRUCK AND THE OTHER FROM OSHKOSH IN THE AMOUNT OF $35,404, PLUS $3,407.23 PER TRUCK FOR FEDERAL EXCISE TAX IF APPLICABLE. TWO PREAWARD SURVEYS, CONDUCTED OF THE CAPABILITY OF FWD TO PERFORM WITHIN THE DELIVERY SCHEDULE, RECOMMENDED THAT IT NOT BE AWARDED THE CONTRACT. THE ADVERSE RECOMMENDATIONS WERE BASED ON THE SAME REASON; THAT IS, FWD'S INABILITY TO MEET THE REQUIRED DELIVERY DATES. THE REPORTS TOOK INTO CONSIDERATION FWD'S PRIOR UNSATISFACTORY CONTRACT PERFORMANCE AND THE ANTICIPATED LEAD TIMES INVOLVED IN THE PERFORMANCE OF THE ANTICIPATED AWARD. AS A RESULT OF THE TWO NEGATIVE PREAWARD SURVEYS, FWD WAS DETERMINED PURSUANT TO PARAGRAPH 1-904.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) TO BE A NONRESPONSIBLE PROSPECTIVE CONTRACTOR. IN THIS REGARD, WE DO NOT QUESTION DETERMINATIONS OF NONRESPONSIBILITY WHERE, AS HERE, THEY REPRESENT FINDINGS BASED ON SUFFICIENT PERTINENT INFORMATION RELATING TO A BIDDER'S COMPETENCY. COMP. GEN. 430.

PRIOR TO THIS DETERMINATION DCSC ADVISED FWD THAT THE ORIGINALLY SOLICITED REQUIREMENT FOR 26 TRUCKS HAD BEEN REDUCED TO 15. AT THE TIME OF THIS ADVICE, DCSC APPARENTLY ATTEMPTED TO HAVE FWD ACCEPT A PROVISION FOR LIQUIDATED DAMAGES IN THE EVENT IT WAS AWARDED THE 15 VEHICLE CONTRACT. BY TELEPHONE AND TELEGRAM, FWD REFUSED TO ACCEPT SUCH A PROVISION UNLESS THE AWARD WAS FOR 26 VEHICLES. THEREAFTER, THE CONTRACT FOR 15 TRUCKS WAS AWARDED TO OSHKOSH AS THE LOWEST, RESPONSIBLE BIDDER.

FWD APPARENTLY BELIEVES THAT THE REDUCTION IN THE QUANTITY REQUIREMENT AND THE GOVERNMENT'S ATTEMPT TO HAVE FWD ACCEPT A LIQUIDATED DAMAGES CLAUSE, SO AS TO INSURE ON-TIME DELIVERY IN THE EVENT FWD WAS AWARDED THE CONTRACT, AMOUNTED TO NEGOTIATION WHICH CHANGED THE NATURE OF THE PROCUREMENT FROM ADVERTISED TO NEGOTIATED. CONSEQUENTLY, FWD CONTENDS THAT THE CONTRACT SHOULD BE CANCELLED, A NEW INVITATION ISSUED, AND ALL BIDDERS BE ALLOWED TO NEGOTIATE ON MATTERS OF PRICE AND DELIVERY TIME.

THE TERM "NEGOTIATION" IMPLIES A SERIES OF OFFERS AND COUNTER-OFFERS UNTIL A MUTUALLY SATISFACTORY AGREEMENT IS CONCLUDED BY THE PARTIES. 151013, APRIL 16, 1963. NEITHER THE REDUCTION IN QUANTITY NOR THE ATTEMPT TO HAVE FWD ACCEPT A LIQUIDATED DAMAGES CLAUSE IN THE EVENT IT WAS AWARDED THE CONTRACT COMES WITHIN THIS DEFINITION.

THE QUANTITY REDUCTION WAS MADE PURSUANT TO PARAGRAPH 10 (C), STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS, WHICH WAS SPECIFICALLY INCORPORATED INTO THE SOLICITATION AND WHICH PROVIDES AS FOLLOWS:

"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER.'

IMPLICIT IN THE AWARD OF A LESSER QUANTITY THAN THAT ADVERTISED IS A CHANGE IN QUANTITY REQUIREMENT. JUST AS EXERCISE OF THE FORMER ACTION DOES NOT REQUIRE A BIDDER'S CONSENT (B-150197, NOVEMBER 14, 1962), NEITHER DOES THE LATTER. IN ADVISING FWD THAT THE QUANTITY OF TRUCKS REQUIRED HAD BEEN REDUCED, NO OFFER WAS MADE BY THE PROCUREMENT AGENCY NOR WAS A COUNTEROFFER ANTICIPATED FROM FWD. THE ACTION TAKEN PURSUANT TO PARAGRAPH 10 (C) WAS UNILATERAL AND, THUS, NOT A ,NEGOTIATION.'

ALTHOUGH THE ATTEMPT TO HAVE FWD ACCEPT A LIQUIDATED DAMAGES CLAUSE COULD POSSIBLY BE CONSIDERED AN OFFER, IT WAS EFFECTIVELY REJECTED BY FWD IN ITS TELEGRAM TO DCSC ON APRIL 25, 1969. THIS ATTEMPT BY THE GOVERNMENT AND ITS REJECTION BY FWD MAY NOT BE VIEWED AS AN OFFER AND A COUNTEROFFER WHICH TAKEN TOGETHER CONSTITUTES "NEGOTIATION.'

IT IS SIGNIFICANT TO NOTE THAT YOUR APRIL 25, 1969, TELEGRAM NEGATES YOUR CONTENTION THAT THE REDUCTION RENDERED THE IFB A NEGOTIATED PROCUREMENT. THE TELEGRAM READS,"WE ARE NOT INTERESTED IN A LESSER QUANTITY AT THE PRICE WE BID.' THE "LESSER QUANTITY" WAS THE 15 TRUCKS AS TO WHICH FWD HAD PREVIOUSLY BEEN ADVISED WOULD BE AWARDED TO THE SUCCESSFUL BIDDER.

ACCORDINGLY, AND SINCE 10 U.S.C. 2305 (C) AND ASPR 1-902 PRECLUDE AN AWARD TO A NONRESPONSIBLE BIDDER, YOUR PROTEST IS DENIED.