B-166873, OCT. 15, 1969

B-166873: Oct 15, 1969

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ANY QUANTITY OF BALANCE FROM THEN ON" WAS PROPERLY DETERMINED TO BE NONRESPONSIVE SINCE UNDER BOTH CONTRACTING OFFICER'S AND PROTESTANT'S INTERPRETATION. PROTESTANT WOULD ONLY HAVE BEEN OBLIGED TO DELIVER AN AMOUNT EQUAL TO TOTAL ESTIMATED YEARLY QUANTITY. WOULD HAVE FAR EXCEEDED ESTIMATED YEARLY REQUIREMENTS. TO AFFILIATED METAL PRODUCTS COMPANY: REFERENCE IS MADE TO YOUR LETTER OF MAY 1. WAS FOR A REQUIREMENTS CONTRACT FOR FSC 5120-CLAMPS "C" AND SCREW. WHICHEVER WAS LATER. MONTHLY SUPPLY POTENTIAL: SET FORTH IN THE SCHEDULE OF ITEMS ARE THE GOVERNMENT'S ESTIMATED REQUIREMENTS FOR THE PERIOD OF THIS CONTRACT ESTIMATED PEAK MONTHLY REQUIREMENTS FOR EACH STOCK ITEM COVERED BY THIS SOLICITATION.

B-166873, OCT. 15, 1969

BIDS--QUALIFIED--QUANTITY LIMITATION UNDER INVITATION WHERE GOVERNMENT LISTED ITS TOTAL ESTIMATED REQUIREMENTS FOR VARIOUS CLAMPS FOR PERIOD OF CONTRACT, AS WELL AS ITS ESTIMATED PEAK MONTHLY REQUIREMENTS FOR EACH ITEM REQUIRED, LOW OFFEROR WHO AGREED TO DELIVER "25 PERCENT OF TOTAL QUANTITY BID OF ANY ITEM ON FIRST ORDER -- ANY QUANTITY OF BALANCE FROM THEN ON" WAS PROPERLY DETERMINED TO BE NONRESPONSIVE SINCE UNDER BOTH CONTRACTING OFFICER'S AND PROTESTANT'S INTERPRETATION, PROTESTANT WOULD ONLY HAVE BEEN OBLIGED TO DELIVER AN AMOUNT EQUAL TO TOTAL ESTIMATED YEARLY QUANTITY, RATHER THAN ESTIMATED PEAK MONTHLY REQUIREMENTS EACH MONTH FOR LIFE OF CONTRACT, AND THE LATTER, IF FULLY USED, WOULD HAVE FAR EXCEEDED ESTIMATED YEARLY REQUIREMENTS.

TO AFFILIATED METAL PRODUCTS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 1, 1969, WHEREIN YOU PROTEST THE REJECTION OF YOUR BID UNDER INVITATION FOR BIDS (IFB) NO. FPNTN-G4 70417- A, ISSUED BY THE PROCUREMENT OPERATIONS DIVISION, FSS, GENERAL SERVICES ADMINISTRATION, WASHINGTON, D.C.

THE REFERENCED INVITATION, ISSUED ON NOVEMBER 22, 1968, WAS FOR A REQUIREMENTS CONTRACT FOR FSC 5120-CLAMPS "C" AND SCREW, WITH GUARANTEED MINIMUM, FOR THE PERIOD MAY 1, 1969, OR DATE OF AWARD, WHICHEVER WAS LATER, THROUGH APRIL 30, 1970. PARAGRAPH 6, PAGE 10, OF THE IFB CONTAINED THE FOLLOWING MONTHLY SUPPLY POTENTIAL CLAUSE WHICH, TOGETHER WITH THE PORTIONS YOU FILLED IN, READS AS FOLLOWS:

"6. MONTHLY SUPPLY POTENTIAL: SET FORTH IN THE SCHEDULE OF ITEMS ARE THE GOVERNMENT'S ESTIMATED REQUIREMENTS FOR THE PERIOD OF THIS CONTRACT ESTIMATED PEAK MONTHLY REQUIREMENTS FOR EACH STOCK ITEM COVERED BY THIS SOLICITATION. IN ORDER TO PRECLUDE THE PLACEMENT OF ORDERS WITH ANY CONTRACTOR IN EXCESS OF HIS PRODUCTION CAPACITY, OFFERORS ARE REQUESTED TO INDICATE IN THE SPACES PROVIDED, THE TOTAL QUANTITY PER MONTH WHICH THEY ARE WILLING TO FURNISH OF ANY ITEM OR GROUP OF ITEMS INVOLVING THE USE OF THE SAME PRODUCTION FACILITIES. SINCE THE NUMBER OF ITEMS ON WHICH ANY OFFEROR MAY BE ELIGIBLE FOR AWARD CANNOT BE DETERMINED IN ADVANCE OF BID OPENING, OFFERORS ARE URGED, IN SETTING THEIR MONTHLY SUPPLY POTENTIALS, TO GROUP AS MANY ITEMS AS POSSIBLE. SUCH GROUP WILL MAKE IT POSSIBLE FOR THE GOVERNMENT TO MAKE FULLEST USE OF THE PRODUCTION FACILITIES OF EACH OFFEROR. FOR EXAMPLE, IF AN OFFEROR'S PRODUCTION FACILITIES CAN BE USED TO PRODUCE ANY OF THE ITEMS COVERED BY THE SOLICITATION, THE OFFEROR MAY INSERT A SINGLE OVERALL LIMITATION ON THE QUANTITY HE CAN SUPPLY APPLICABLE TO ALL ITEMS.

OFFEROR'S MONTHLY SUPPLY POTENTIAL

STOCK ITEMS, GROUPS OF OFFEROR'S MONTHLY

STOCK ITEMS OR AGGREGATE SUPPLY POTENTIAL

GROUPS ------------------

25 PERCENT OF TOTAL QUANT. BID OF ANY -------------------

ITEM ON FIRST ORDER - ANY QUANTITY -------------------

OF BALANCE FROM THEN ON ------------------"

PARAGRAPH 7, PAGE 11, OF THE IFB, AS AMENDED, CONTAINED THE FOLLOWING METHOD OF AWARD CLAUSE:

"7. METHOD OF AWARD:

"/A) AWARDS WILL BE MADE IN ACCORDANCE WITH (B) BELOW ON THE BASIS OF THE GOVERNMENT'S ESTIMATED PEAK MONTHLY REQUIREMENTS TO THE LOW RESPONSIVE OFFERORS UP TO THEIR STATED MONTHLY SUPPLY POTENTIALS. WITHIN THE LIMITS PRESCRIBED BY THE OFFEROR, THE GOVERNMENT WILL APPLY OFFEROR'S MONTHLY SUPPLY POTENTIAL TO ANY ITEMS OR GROUPS OF ITEMS OFFERED, AS THE GOVERNMENT'S INTERESTS REQUIRE. IN ORDER TO QUALIFY FOR AN AWARD AN OFFEROR MUST OFFER A MONTHLY SUPPLY POTENTIAL TO COVER THE GOVERNMENT'S ESTIMATED PEAK MONTHLY REQUIREMENT ON AT LEAST ONE GROUP OR INDIVIDUAL ITEM. GROUPS OR INDIVIDUAL ITEMS WILL NOT BE SUBDIVIDED FOR AWARD PURPOSES.

"/B) AWARDS WILL BE MADE AS FOLLOWS:

"/1) GROUPS 1, 2, 3, 4 AND 5: IN THE AGGREGATE BY GROUP. THE LOW AGGREGATE OFFEROR WILL BE DETERMINED BY MULTIPLYING THE UNIT PRICE BID ON EACH ITEM BY THE ESTIMATED QUANTITY SPECIFIED, AND ADDING THE RESULTANT EXTENSIONS. IN ORDER TO QUALIFY FOR AN AWARD ON A GROUP, PRICES MUST BE SUBMITTED ON EACH ITEM WITHIN THE GROUP.

"/2) ITEMS 16 THRU 44: ITEM-BY-ITEM.'

WHEN BIDS WERE OPENED ON JANUARY 7, 1969, YOUR FIRM WAS THE LOW BIDDER ON GROUPS 2, 3 AND 4 AND ON ITEMS 20, 26, AND 35. YOUR BID WAS FOUND NONRESPONSIVE IN THAT THE PROCURING ACTIVITY FELT YOU QUALIFIED YOUR BID SO THAT IT COULD NOT ASCERTAIN WITH CERTAINTY WHAT YOU INTENDED TO BID REGARDING THE STATED MONTHLY SUPPLY POTENTIAL. AWARDS OF CONTRACTS UNDER THE SOLICITATION WERE MADE ON APRIL 7, 1969, PRIOR TO RECEIPT OF THE INSTANT PROTEST.

YOUR POSITION CONCERNING THE MEANING OF THE CLAUSE "25 PERCENT OF TOTAL QUANTITY BID OF ANY ITEM ON FIRST ORDER - ANY QUANTITY OF BALANCE FROM THEN ON" WHICH YOU INSERTED IN PARAGRAPH 6 UNDER OFFEROR'S MONTHLY SUPPLY POTENTIAL, IS SET OUT IN YOUR LETTER OF MAY 1, 1969, AS FOLLOWS:

"IT IS SELF-EVIDENT THEN THAT AT THE END OF 90 DAYS AFTER THE RECEIPT OF A CONTRACT THAT WE AGREED TO DELIVER AN INCREMENT OF 25 PERCENT OF ANY ITEM WHICH WE BID. OUR PRODUCTION ABILITY WOULD BE THEN THAT WE WOULD PRODUCE THIS 25 PERCENT AS OUR FIRST MONTH'S PRODUCTION AND AS TO THE BALANCE OF OUR MONTHLY PRODUCTION SCHEDULES, WE WOULD PRODUCE ANY QUANTITY WHICH THE GOVERNMENT REQUIRED UP TO THE ESTIMATED YEARLY VOLUME REQUIREMENT.'

THIS IS THE EXACT INTERPRETATION THE CONTRACTING OFFICER PLACED ON YOUR BID, AND WE FEEL THIS TO BE A REASONABLE INTERPRETATION. HOWEVER, FOR EVERY GROUP OR INDIVIDUAL ITEM IN THE SCHEDULE, THE ESTIMATED PEAK MONTHLY REQUIREMENTS, IF FULLY USED, FAR EXCEEDED THE ESTIMATED YEARLY REQUIREMENTS. WE THEREFORE AGREE WITH THE CONTRACTING OFFICER'S FINDING THAT YOUR BID WAS NONRESPONSIVE, IN THAT UNDER BOTH HIS AND YOUR INTERPRETATION OF YOUR BID, IF YOU HAD BEEN AWARDED THE CONTRACT FOR ANY GROUP OR INDIVIDUAL ITEMS YOU COULD ONLY HAVE BEEN REQUIRED TO DELIVER AN AMOUNT EQUAL TO THE TOTAL ESTIMATED YEARLY QUANTITY, RATHER THAN THE ESTIMATED PEAK MONTHLY REQUIREMENTS EACH MONTH FOR THE LIFE OF THE CONTRACT, AS REQUIRED BY PARAGRAPH 7 OF THE SOLICITATION.