B-166983, JUN. 30, 1969

B-166983: Jun 30, 1969

Additional Materials:

Contact:

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

 

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

TO KELTRON COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 14. THE UNIT PRICE TO BE PAID WILL BE DETERMINED BY THE TOTAL NUMBER OF ITEM IDENTIFICATIONS OFFERED. 4. WILL BE DETERMINED IN ACCORDANCE WITH THE SCHEDULE CLAUSE VIII.'. THE ABOVE-CITED CLAUSE VIII ENTITLED "AWARD" PROVIDES AS FOLLOWS: "AWARD WILL BE MADE ON THE BASIS OF THE LOWEST AGGREGATE BID RECEIVED FOR THE ITEMS AND QUANTITIES ORDERED AT THE TIME OF AWARD. IF SUCH INTERMEDIATE QUANTITY IS AWARDED. BE DETERMINED BY THE FOLLOWING FORMULA: "THE DIFFERENCE BETWEEN THE ADJACENT UNIT PRICES WILL BE DIVIDED BY THE DIFFERENCE BETWEEN THE ADJACENT QUANTITIES. THIS PRODUCT WILL THEN BE SUBTRACTED FROM THE UNIT PRICE OF THE LESSER OF THE ADJACENT QUANTITIES AND THE RESULT WILL BE THE UNIT PRICE FOR THE QUANTITY AWARDED.'.

B-166983, JUN. 30, 1969

TO KELTRON COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 14, 1969, PROTESTING THE PROPOSED AWARD OF A CONTRACT TO THE MECHTRON CORPORATION, ORLANDO, FLORIDA, UNDER INVITATION FOR BIDS NO. WA5M-9-0395B1, ISSUED BY THE FEDERAL AVIATION ADMINISTRATION, WASHINGTON, D.C.

THE INVITATION, ISSUED ON APRIL 14, 1969, REQUESTED BIDS -- TO BE OPENED ON MAY 13, 1969 -- FOR FURNISHING A QUANTITY OF POWER AND CONTROL ASSEMBLIES, SPARE PARTS, AND INSTRUCTION BOOKS, ITEMS 1 THROUGH 5, AS FOLLOWS:

UNIT

"ITEM NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNTS

1. POWER AND CONTROL ASSEMBLY 80 EA.

IN ACCORDANCE WITH 110 EA.

SPECIFICATION FAA-E2372

DATED DECEMBER 5, 1968, COMPLETE

WITH TWO EACH INSTRUCTION

BOOKS, IN ACCORDANCE WITH

SPECIFICATION FAA-D-2160A

DATED JULY 30, 1968 AND

AMENDMENT 1 DATED

DECEMBER 18, 1968

2. REPLACEABLE PARTS LIST (RPL)

FOR ITEM 1 IN ACCORDANCE

WITH SPECIFICATION FAA-G-1210A

DATED APRIL 15, 1960 AND

AMENDMENT 4 DATED MAY 9, 1967 1 LIST

3. ITEM IDENTIFICATION FOR

ITEM 1 IN ACCORDANCE WITH

SPECIFICATION FAA-G-1210A,

DATED APRIL 15, 1960, AND 5 EA.

AMENDMENT 4 DATED MAY 9, 15 EA.

1967. 25 EA.

NOTE: INSERT A UNIT PRICE

FOR EACH QUANTITY

SPECIFIED IN ITEM 3.

THE UNIT PRICE TO BE

PAID WILL BE

DETERMINED BY THE

TOTAL NUMBER OF ITEM

IDENTIFICATIONS OFFERED.

4. SPARE PARTS PECULIAR FOR

ITEM 1 IN ACCORDANCE WITH

SPECIFICATION FAA-E-1375

DATED MAY 1, 1962 AND

ISSUE 3. 1 LOT

5. INSTRUCTION BOOKS, IDENTICAL

AND IN ADDITION TO THOSE

REQUIRED TO BE FURNISHED UNDER

ITEM 1 ABOVE. 70 EA.

NOTE: PRICES OF QUANTITIES

OF ITEMS 1 AND 3,

INTERMEDIATE BETWEEN

THOSE LISTED, WILL BE

DETERMINED IN ACCORDANCE

WITH THE SCHEDULE

CLAUSE VIII.' THE ABOVE-CITED CLAUSE VIII ENTITLED "AWARD" PROVIDES AS FOLLOWS:

"AWARD WILL BE MADE ON THE BASIS OF THE LOWEST AGGREGATE BID RECEIVED FOR THE ITEMS AND QUANTITIES ORDERED AT THE TIME OF AWARD, FROM A RESPONSIVE AND RESPONSIBLE BIDDER. FOR A BID TO BE CONSIDERED RESPONSIVE IT SHALL CONTAIN QUOTATIONS FOR ALL ITEMS AND QUANTITIES THEREOF. BIDDERS THEREFORE MUST QUOTE PRICES FOR EACH QUANTITY LISTED FOR EACH ITEM.'THE GOVERNMENT MAY MAKE AWARD FOR EITHER A LISTED QUANTITY OR QUANTITY INTERMEDIATE BETWEEN TWO LISTED QUANTITIES FOR ANY GIVEN ITEM. IF SUCH INTERMEDIATE QUANTITY IS AWARDED, THAT UNIT PRICE SHALL, UNLESS THE OFFEROR SPECIFIES A DIFFERENT PRICE FORMULA, BE DETERMINED BY THE FOLLOWING FORMULA: "THE DIFFERENCE BETWEEN THE ADJACENT UNIT PRICES WILL BE DIVIDED BY THE DIFFERENCE BETWEEN THE ADJACENT QUANTITIES, AND THE RESULTS MULTIPLIED BY THE NUMBER BY WHICH THE QUANTITY AWARDED EXCEEDS THE LESSER OF THE ADJACENT QUANTITIES. THIS PRODUCT WILL THEN BE SUBTRACTED FROM THE UNIT PRICE OF THE LESSER OF THE ADJACENT QUANTITIES AND THE RESULT WILL BE THE UNIT PRICE FOR THE QUANTITY AWARDED.'

BY TELEGRAM DATED MAY 12, 1969, MECHTRON AMENDED ITS BID IN THE FOLLOWING MANNER: "REFERENCE SOLICITATION NO. WA5M-9-039B1 MECHTRON CORP HEREBY MODIFIES ITS BID ON THE SUBJECT SOLICITATION AS FOLLOWS ITEM 4 QUANTITY 80 EACH LOT PRICE $594.30 QUANTITY 110 EACH LOT PRICE $741.70 CONFIRMING LETTER FOLLOWS" IN A CONFIRMING LETTER DATE MAY 20, 1969, THE CORPORATION STATED: "THIS LETTER WILL SERVE TO CONFIRM OUR BID PRICE OF $432.09 PER UNIT FOR 110 UNITS ON THE ABOVE SUBJECT OCUREMENT.'IN THE EVENT THAT LESS THAN 110 UNITS ARE AWARDED THE PRICE OF ITEM FOUR (4) WILL BE REDUCED PROPORTIONATELY FROM $741.70.'

SEVEN BIDS WERE RECEIVED AND OPENED ON MAY 13, 1969. THE LOWEST BID WAS SUBMITTED BY MECHTRON AND THE NEXT LOWEST BID WAS SUBMITTED BY YOUR FIRM. THE BID PRICES SUBMITTED BY MECHTRON AND YOUR FIRM WERE AS FOLLOWS:

ITEM

NO. QUANTITY MECHTRON KELTRON

1. 80 EACH $35,667.20 $47,600.00

110 EACH 47,529.90 65,450.00

2. 1 LIST 81.00 100.00

3. 5 EACH 100.00 125.00

15 EACH 225.00 375.00

25 EACH 250.00 625.00

4. 1 LOT 750.00

80 EACH

ITEM 1 594.30*

110 EACH

ITEM 1 741.70

5. 70 EACH 70.00 700.00 * MECHTRON, ON THE IFB FORM, DID NOT BID ON ITEM 4. BY TELEGRAM PRIOR TO BID OPENING, MECHTRON AMENDED ITS BID TO INCLUDE TWO PRICES FOR THAT ITEM.

IT IS REPORTED THAT IT IS THE INTENTION OF THE FEDERAL AVIATION ADMINISTRATION TO AWARD 80 UNITS OF ITEM 1 AND ONE LOT OF ITEM 4 AND THAT THE ADMINISTRATION IS CONTEMPLATING AWARDING A CONTRACT ON ITEMS 1 THROUGH 5 TO MECHTRON. IT ALSO IS REPORTED THAT SUCH AWARD WILL BE HELD IN ABEYANCE PENDING OUR DECISION ON YOUR PROTEST.

YOU PROTEST ANY AWARD TO MECHTRON ON THE BASIS THAT THE CORPORATION DEVIATED FROM THE SOLICITATION BY SPECIFYING TWO PRICES FOR ITEM 4 AND THEREBY ATTEMPTED TO LIMIT ITS LIABILITY BY CONDITIONING ITS PRICING FOR ITEM 4 ON THE QUANTITY TO BE AWARDED UNDER ITEM 1. YOU CONTEND THAT SINCE NO OTHER BIDDER QUOTED TWO SEPARATE PRICES FOR ITEM 4, IT WOULD BE PREJUDICIAL TO ALL OTHER BIDDERS TO ALLOW MECHTRON TO QUOTE TWO SEPARATE PRICES FOR ITEM 4. IT IS YOUR OPINION THAT MECHTRON BY SPECIFYING TWO PRICES FOR ITEM 4 WAS JUST AS NONRESPONSIVE TO THE SOLICITATION AS WAS MULTI-ELECTRIC MANUFACTURING, INC., WHO QUOTED AN "ESTIMATED PRICE" FOR ITEM 4.

FOR REASONS SET OUT BELOW, WE CONCLUDE THAT THE MECHTRON BID IS RESPONSIVE AND PROPER FOR CONSIDERATION. AS PROVIDED IN CLAUSE VIII, FOR A BID TO BE CONSIDERED RESPONSIVE IT SHALL CONTAIN QUOTATIONS FOR ALL ITEMS AND QUANTITIES THEREOF. WE BELIEVE THAT MECHTRON HAS COMPLIED WITH THIS INVITATION REQUIREMENT. WHILE THE CORPORATION SPECIFIED TWO PRICES FOR ITEM 4, THERE IS NO QUESTION AS TO THE AMOUNT OF ITS BID PRICE FOR ANY QUANTITY OF EITHER THE BASIC ITEM (ITEM 1) OR THE SPARE PARTS (ITEM 4) TO BE AWARDED. EACH BID PRICE CAN BE DETERMINED BY APPLYING THE FORMULA SET OUT IN CLAUSE VIII OF THE INVITATION FOR BIDS. IN REGARD TO YOUR CONTENTION THAT MECHTRON ATTEMPTED TO LIMIT ITS LIABILITY BY CONDITIONING ITS PRICING FOR ITEM 4 (1 LOT) ON THE QUANTITY TO BE AWARDED UNDER ITEM 1, WE DO NOT FIND SUCH BIDDING IMPROPER SINCE THE SPARE PARTS SPECIFICATION DEFINES A "LOT" AS A FLEXIBLE QUANTITY COMPUTED BY MULTIPLYING THE NUMBER OF IDENTICAL EQUIPMENTS PURCHASED BY THE NUMBER OF TIMES EACH SPECIFIED "PART PECULIAR" IS USED IN ONE EQUIPMENT. THE RESULTING PRODUCT IS THEN MULTIPLIED BY VARIOUS LISTED PERCENTAGE FACTORS TO DETERMINE THE QUANTITY OF EACH "PART PECULIAR" TO BE FURNISHED. THUS, UNDER THE INVITATION, THE TWO BID PRICES FOR ITEM 4 EACH RELATING SPECIFICALLY TO ONE OF THE TWO QUANTITIES LISTED IN ITEM 1 ARE READILY SUSCEPTIBLE TO EXACT EVALUATION AS FIRM FIXED-PRICE BIDS. MOREOVER, IT WOULD NOT BE UNREASONABLE TO ASSUME THAT THE OTHER BIDDERS WHO BID ONLY ONE PRICE FOR ITEM 4 COMPUTED THEIR BID PRICES ON THE MAXIMUM AWARDABLE QUANTITY OF ITEM 1 OR 110 UNITS. SUCH BIDDERS' PRICES FOR SPARE PARTS LIKEWISE WOULD BE GOVERNED BY CLAUSE VIII IN THE SAME MANNER AS MECHTRON-S. WE FIND NO BASIS THEREFORE FOR CONCLUDING THAT ANY OTHER BIDDER WOULD BE PREJUDICED BY THE FAVORABLE CONSIDERATION OF MECHTRON'S BID.