B-167102(1), OCT. 10, 1969

B-167102(1): Oct 10, 1969

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WAS REJECTED AS NONRESPONSIVE. EVEN THOUGH CONTRACTING OFFICER'S INTERPRETATION WAS CLEARLY ERRONEOUS PROTEST IS DENIED SINCE GENERAL ACCOUNTING OFFICE WOULD NOT BE JUSTIFIED IN CONSIDERING CONTRACT AWARDED AS ILLEGAL OR A NULLITY BECAUSE OF CONTRACTING OFFICER'S FAILURE TO FOLLOW REGULATIONS. BECAUSE HE WAS PUT ON NOTICE OF PROBLEM REGARDING PROGRESS PAYMENTS BEFORE AWARD. ACTION SHOULD HAVE BEEN RECONSIDERED AND INVITATION REISSUED ALLOWING SUCH PAYMENTS. COMPLIANCE WITH STATUTORY REQUIREMENTS LOW NONRESPONSIVE BIDDER'S PROTEST TO AWARD ON BASIS THAT ALL APPLICABLE REQUIREMENTS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) WERE NOT FOLLOWED AND NO AUTHORITY WAS VESTED IN CONTRACTING OFFICER UNDER ASPR 1- 402 AND THUS NO VALID CONTRACT COULD RESULT IS DENIED.

B-167102(1), OCT. 10, 1969

BIDS--QUALIFIED--PROGRESS PAYMENTS WHEN INVITATION FOR BIDS FAILED TO PROVIDE FOR PROGRESS PAYMENTS ALTHOUGH CONTRACT PERFORMANCE TIME WOULD EXCEED 6 MONTHS, LOW BID, CONDITIONED BY REQUEST FOR PROGRESS PAYMENTS, WAS REJECTED AS NONRESPONSIVE. IN VIEW OF MANDATORY REQUIREMENT IN PAR. E-504.1 OF ARMED SERVICES PROCUREMENT REGULATION FOR PROGRESS PAYMENTS IF CONTRACT PERFORMANCE TIME EXCEEDS 6 MONTHS, EVEN THOUGH CONTRACTING OFFICER'S INTERPRETATION WAS CLEARLY ERRONEOUS PROTEST IS DENIED SINCE GENERAL ACCOUNTING OFFICE WOULD NOT BE JUSTIFIED IN CONSIDERING CONTRACT AWARDED AS ILLEGAL OR A NULLITY BECAUSE OF CONTRACTING OFFICER'S FAILURE TO FOLLOW REGULATIONS. HOWEVER, BECAUSE HE WAS PUT ON NOTICE OF PROBLEM REGARDING PROGRESS PAYMENTS BEFORE AWARD, ACTION SHOULD HAVE BEEN RECONSIDERED AND INVITATION REISSUED ALLOWING SUCH PAYMENTS. CONTRACTING OFFICERS--AUTHORITY--COMPLIANCE WITH STATUTORY REQUIREMENTS LOW NONRESPONSIVE BIDDER'S PROTEST TO AWARD ON BASIS THAT ALL APPLICABLE REQUIREMENTS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) WERE NOT FOLLOWED AND NO AUTHORITY WAS VESTED IN CONTRACTING OFFICER UNDER ASPR 1- 402 AND THUS NO VALID CONTRACT COULD RESULT IS DENIED. ERRONEOUS FAILURE OF CONTRACTING OFFICER TO FOLLOW REGULATORY PROVISIONS MAY NOT BE REGARDED AS AUTOMATICALLY DEPRIVING HIM OF ALL AUTHORITY TO ACT AND SINCE REGULATIONS ARE PRIMARILY FOR BENEFIT OF GOVERNMENT, IT HAS BEEN HELD THAT THEY CONFER NO ENFORCEABLE RIGHTS UPON PROSPECTIVE BIDDERS. BECAUSE CONTRACTING OFFICER'S ACTIONS WERE WITHIN SCOPE OF REGULATIONS AND ARE BINDING UPON GOVT. AWARD MADE CONSUMMATED VALID AND BINDING CONTRACT. DOCUMENTS--INCORPORATION BY REFERENCE--CHRISTIAN DOCTRINE WHEN LOW BID WAS HELD NONRESPONSIVE TO INVITATION BECAUSE PROGRESS PAYMENTS WERE REQUESTED, EVEN THOUGH PROGRESS PAYMENTS WERE SPECIFICALLY DELETED BY LANGUAGE INCLUDED IN INVITATION, "CHRISTIAN DOCTRINE" THAT CLAUSES REQUIRED BY STATUTORY REGULATIONS ARE INCORPORATED BY REFERENCE IS NOT FOR APPLICATION IN PRESENT SITUATION FOR WHERE BIDDING TERM IS INADVERTENTLY OR INTENTIONALLY OMITTED FROM SOLICITATION, IT MAY NOT SUBSEQUENTLY BE INCORPORATED THEREIN TO MAKE A NONRESPONSIVE BID RESPONSIVE AND BIDDER'S ATTEMPT TO BID ON BASIS EXPRESSLY PRECLUDED BY INVITATION MUST BE CONSIDERED AS RENDERING BID NONRESPONSIVE, BID SO QUALIFIED BEING NONRESPONSIVE IN MATERIAL RESPECT AND SUCH DEVIATION CANNOT BE WAIVED. PROTEST, THEREFORE, IS DENIED AS AWARD MADE CONSUMMATED VALID AND BINDING CONTRACT.

TO REACTION INSTRUMENTS, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 29, 1969, AND LETTERS OF JUNE 3, JULY 15, AND AUGUST 4, 1969, PROTESTING THE AWARD OF THE CONTRACT UNDER INVITATION FOR BIDS (IFB) NO. N00039-69-B-0014, ISSUED BY THE NAVAL ELECTRONIC SYSTEMS COMMAND.

THE REFERENCED IFB WAS ISSUED ON NOVEMBER 18, 1968, AND CALLED FOR BIDS ON FOUR ITEMS OF HIGH FREQUENCY RADIO RECEIVERS AND RELATED EQUIPMENT, DATA, AND PARTS. THE SOLICITATION STATED THAT AWARD WOULD BE MADE ONLY TO ONE OFFEROR FOR ALL UNITS OF THE FOUR ITEMS.

SEVEN BIDS FROM FOUR BIDDERS WERE RECEIVED AND OPENED ON JANUARY 28, 1969, AS FOLLOWS:

BIDDER TOTAL

REACTION INSTRUMENTS, INC. $142,892

BEUKERS LABORATORIES, INC. 268,596

HONEYWELL, INC. 281,088

RACAL COMMUNICATIONS, INC. 1ST BID - $788,400

2ND BID - 531,600

3RD BID - 333,600

AFTER A PRE-AWARD SURVEY OF YOUR COMPANY HAD BEEN REQUESTED BY THE CONTRACTING OFFICER, BEUKERS LABORATORIES, INC., PROTESTED TO THE CONTRACTING OFFICER BY LETTER OF FEBRUARY 26, 1969, THAT YOUR BID WAS NONRESPONSIVE IN THAT PROGRESS PAYMENTS WERE REQUESTED CONTRARY TO THE PROVISIONS OF THE INVITATION. YOU HAD INSERTED IN THE SCHEDULE PORTION OF STANDARD FORM 33 AND IN BETWEEN THE DESCRIPTION OF ITEMS 3AA AND 4 IN SECTION A OF STANDARD FORM 36 THE PHRASE "PROGRESS PAYMENTS REQUESTED.'

YOU WERE TELEPHONICALLY CONTRACTED BY THE NEGOTIATOR REGARDING YOUR REQUEST FOR PROGRESS PAYMENTS AND YOU NOTIFIED THE PROCURING ACTIVITY BY LETTER DATED MARCH 14, 1969, THAT THE REQUEST FOR PROGRESS PAYMENTS "WAS NOT INSERTED AS A -CONDITION PRECEDENT- TO SAID BID.'

THE PRE-AWARD SURVEY REPORT, DATED MARCH 3, 1969, RECOMMENDED THAT AWARD NOT BE MADE TO YOUR CORPORATION, AND THE SMALL BUSINESS ADMINISTRATION WAS THEREUPON ADVISED OF THE PROPOSED REJECTION OF YOUR BID FOR NONRESPONSIBILITY. ON MARCH 27, 1969, THE NAVAL ELECTRONIC SYSTEMS COMMAND WAS NOTIFIED BY THE SMALL BUSINESS ADMINISTRATION THAT YOUR FIRM HAD ELECTED TO FILE FOR A CERTIFICATE OF COMPETENCY ON THE SUBJECT INVITATION. WITHOUT AWAITING ACTION THEREON, THE CONTRACTING OFFICER PROCEEDED TO DETERMINE THAT YOUR BID WAS NONRESPONSIVE DUE TO YOUR PROGRESS PAYMENTS REQUEST, AND AWARD WAS MADE ON MAY 27, 1969, TO THE SECOND LOWEST BIDDER, BEUKERS LABORATORIES, INC. YOU WERE NOTIFIED OF THE AWARD AND FOR THE FIRST TIME NOTIFIED THAT YOUR BID WAS DEEMED NONRESPONSIVE ON MAY 29, 1969.

THE IFB SCHEDULE ON PAGE 20 STATED THAT CLAUSE 41 ENTITLED "PROGRESS PAYMENTS (TOTAL COSTS)" OF THE GENERAL PROVISIONS WAS DELETED IN ITS ENTIRETY. THIS REFERRED TO CLAUSE 41 OF THE ADDITIONAL GENERAL PROVISIONS AND ALTERATIONS IN CONTRACT, NAVELEX 7-67, FIXED PRICE SUPPLY CONTRACT (NEGOTIATED AND ADVERTISED), WHICH BY SECTION G OF THE IFB HAD BEEN INCORPORATED IN THE SOLICITATION, UNLESS SPECIFICALLY DELETED ELSEWHERE IN THE INVITATION, AS IN THE INSTANT CASE.

CLAUSE 41 READS IN PART AS FOLLOWS:

"41. PROGRESS PAYMENTS (TOTAL COSTS)

"/THE FOLLOWING CLAUSE IS APPLICABLE ONLY IF SPECIFICALLY SO PROVIDED ELSEWHERE IN THIS CONTRACT.)

"PROGRESS PAYMENTS SHALL BE MADE TO THE CONTRACTOR AS WORK PROGRESSES, FROM TIME TO TIME UPON REQUEST, IN AMOUNTS APPROVED BY THE CONTRACTING OFFICER UPON THE FOLLOWING TERMS AND CONDITIONS: * * *" THE IFB SCHEDULE ON PAGE 18 CONTAINED THE FOLLOWING CLAUSE: "LIMITATION OF PROGRESS PAYMENTS: IF THE CLAUSE ENTITLED -PROGRESS PAYMENT- (WHETHER OR NOT MODIFIED TO CHANGE THE FIGURE -80 PERCENT- TO READ -85 PERCENT-) FORMS A PART OF ANY CONTRACT RESULTING FROM THIS SOLICITATION AND IF SUCH RESULTING CONTRACT CONTAINS PREPRODUCTION REQUIREMENTS, THEN PROGRESS PAYMENTS SHALL NOT BE PAID BY THE GOVERNMENT ON ANY COSTS INCURRED UNDER THIS CONTRACT IN EXCESS OF TWENTY PERCENT (20 PERCENT) OF THE TOTAL PRICE OF ITEMS 1 UNTIL SUCH TIME AS THE CONTRACTOR SHALL HAVE RECEIVED APPROVAL OR CONDITIONAL APPROVAL OF THE PREPRODUCTION EQUIPMENT REQUIRED HEREUNDER.'

THE SCHEDULE DID NOT CONTAIN THE CAUTIONARY CLAUSE CONCERNING PROGRESS PAYMENTS MENTIONED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) E- 504.5:

"E-504.5 NONRESPONSIVE BIDS--- UNINVITED PROGRESS PAYMENT CONDITION. MINIMIZE THE POSSIBILITY OF MISUNDERSTANDINGS, THE RECIPIENTS OF INVITATIONS FOR BIDS, OR THOSE INCLUDED ON BIDDERS LISTS, SHOULD BE INFORMED AND KEPT AWARE THAT WHEN INVITATIONS FOR BIDS DO NOT PROVIDE FOR PROGRESS PAYMENTS, PROGRESS PAYMENT CLAUSES CANNOT BE INCLUDED IN THE CONTRACT AT TIME OF AWARD, AND THAT BIDS CONDITIONED UPON PROVISION FOR PROGRESS PAYMENTS WILL HAVE TO BE REJECTED AS NONRESPONSIVE. THIS PRECAUTIONARY WARNING NOTICE MAY BE INCLUDED IN INVITATIONS FOR BIDS, OR MAY ACCOMPANY INVITATIONS FOR BIDS, OR MAY BE OTHERWISE CIRCULATED OR MADE KNOWN TO PROSPECTIVE BIDDERS BY SUCH MEANS AS ARE CONSIDERED APPROPRIATE.'

ASPR E-504.1 STATES THE FOLLOWING CONCERNING THE INCLUSION OF PROGRESS PAYMENTS IN IFB-S:

"E-504.1 PROGRESS PAYMENT PROVISION IN INVITATIONS FOR BIDS. WHEN PROGRESS PAYMENTS ARE CONTEMPLATED, THE INVITATIONS FOR BIDS SHALL INCLUDE A NOTICE OF AVAILABILITY OF PROGRESS PAYMENTS AS DESCRIBED IN E 504.4. THE PERCENTAGE OF TOTAL COSTS TO BE MENTIONED IN THESE INVITATIONS FOR BIDS IS 85 PERCENT FOR SMALL BUSINESS CONCERNS AND 80 PERCENT FOR FIRMS WHICH ARE NOT SMALL BUSINESS CONCERNS.

"PROVISION FOR PROGRESS PAYMENTS SHALL BE MADE IN INVITATIONS FOR BIDS WHENEVER THE CONTRACTING OFFICER CONSIDERS (1) THAT THE PERIOD BETWEEN THE BEGINNING OF WORK AND THE REQUIRED FIRST PRODUCTION DELIVERY WILL EXCEED SIX MONTHS, OR (2) THAT PROGRESS PAYMENTS WILL BE USEFUL OR NECESSARY BY REASON OF CIRCUMSTANCES THAT WILL INVOLVE SUBSTANTIAL ACCUMULATION OF PREDELIVERY COSTS THAT MAY HAVE A MATERIAL IMPACT ON A CONTRACTOR'S WORKING FUNDS (INCLUDING BUT NOT LIMITED TO SUBSTANTIAL SMALL BUSINESS SET -ASIDES EXPECTED TO INVOLVE A RELATIVELY LARGE PREDELIVERY ACCUMULATION OF MATERIALS, PURCHASED PARTS OR COMPONENTS).

"PROVISION FOR PROGRESS PAYMENTS SHALL ALSO BE MADE IN INVITATIONS FOR BIDS WHENEVER IT IS ESTIMATED THAT THE PROCUREMENT WILL INVOLVE APPROXIMATELY $100,000 OR MORE AND THAT BIDS ARE LIKELY TO BE SUBMITTED BY ONE OR MORE SMALL BUSINESS CONCERNS, UNLESS THE PROCUREMENT IS WITHIN ONE OR MORE OF THE EXCEPTED CATEGORIES SET OUT BELOW. PROVISION FOR PROGRESS PAYMENTS ORDINARILY WILL NOT BE MADE IN INVITATIONS FOR BIDS WHEN THE PROCUREMENT IS FOR QUICK TURN-OVER ITEMS OF KINDS FOR WHICH PREDELIVERY FINANCING BY PROGRESS PAYMENTS IS NOT THE CUSTOM OR PRACTICE ON SALES BY MEMBERS OF THE INDUSTRY TO PRIVATE COMMERCIAL CUSTOMERS, SUCH AS (I) SUBSISTENCE, (II) CLOTHING AND APPAREL, (III) OFF-THE-SHELF- ITEMS, AND (IV) STANDARD COMMERCIAL ITEMS OR EQUIVALENT ITEMS (INCLUDING MEDICAL AND DENTAL SUPPLIES), NOT REQUIRING SUBSTANTIAL ACCUMULATION OF PREDELIVERY EXPENDITURES.

"REASONABLE DOUBTS SHOULD BE RESOLVED IN FAVOR OF INCLUSION OF PROGRESS PAYMENT PROVISIONS IN INVITATIONS FOR BIDS, IN ORDER TO (I) FACILITATE NECESSARY CONTRACT FINANCING ASSISTANCE TO SMALL SUPPLIERS AND (II) AVOID THE NECESSITY FOR REJECTING, AS NONRESPONSIVE, BIDS CONDITIONED ON PROGRESS PAYMENTS WHEN THE INVITATIONS FOR BIDS DO NOT PROVIDE FOR PROGRESS PAYMENTS.'

YOUR PROTEST CONSISTS OF THREE PARTS. THE FIRST GROUND OF PROTEST IS THAT THE IFB CONSIDERED AS A WHOLE DID PROVIDE FOR PROGRESS PAYMENTS, BUT EVEN IF IT DID NOT, SINCE ASPR E-504.1 REQUIRES PROGRESS PAYMENTS IN INVITATIONS IN WHICH THE PERIOD BETWEEN THE BEGINNING OF WORK AND THE REQUIRED PRODUCTION DELIVERY WOULD EXCEED SIX MONTHS, THE PROGRESS PAYMENTS CLAUSE SHOULD BE READ INTO THE INVITATION.

YOUR SECOND GROUND OF PROTEST IS THAT SINCE THE APPLICABLE PROVISIONS CONCERNING PROGRESS PAYMENTS WERE NOT MET, UNDER ASPR 1-402 AND 1-403 NO AUTHORITY WAS VESTED IN THE CONTRACTING OFFICER, SO NO VALID CONTRACT COULD RESULT FROM HIS ACTIONS IN REGARD THERETO.

YOUR FINAL ARGUMENT IS THAT YOU HAVE BEEN PREJUDICED IN THAT THE PROCURING ACTIVITY REFUSED TO ACCEPT YOUR PROTESTS BOTH BEFORE AND AFTER AWARD CONCERNING THE PRESENT PROCUREMENT.

IN REGARD TO YOUR FIRST ARGUMENT WE CANNOT AGREE WITH YOUR CONTENTION THAT THE INVITATION TAKEN AS A WHOLE DID PROVIDE FOR PROGRESS PAYMENTS. THE IFB SPECIFICALLY DELETED THE PROGRESS PAYMENTS CLAUSE, CLAUSE 41, CITED ABOVE. THE INCLUSION OF THE "LIMITATION OF PROGRESS PAYMENTS" CLAUSE WAS NOT AN INDICATION THAT PROGRESS PAYMENTS WERE ALLOWED AS YOU ARGUE, BUT CONVERSELY, THE CLAUSE BY ITS VERY TERMS BECAME APPLICABLE ONLY IF THE PROGRESS PAYMENTS CLAUSE FORMED A PART OF ANY CONTRACT RESULTING FROM THE SOLICITATION, AND AS NOTED ABOVE THIS CLAUSE WAS SPECIFICALLY DELETED FROM THE INVITATION. SEE B-166620, JULY 7, 1969. SIMILARLY, THE CAUTIONARY WARNING STATED IN ASPR E-504.5 CONCERNING INVITATIONS NOT PROVIDING FOR PROGRESS PAYMENTS, BY ITS VERY LANGUAGE IS TO BE USED "TO MINIMIZE THE POSSIBILITY OF MISUNDERSTANDING" AND THE MERE ABSENCE THEREFORE OF THE CLAUSE IS NOT AN INDICATION THAT PROGRESS PAYMENTS WILL BE ALLOWED.

YOU FURTHER CONTEND THAT EVEN IF THE INVITATION CONSIDERED AS A WHOLE DID NOT PROVIDE FOR PROGRESS PAYMENTS THEN IT SHOULD HAVE IN THAT ASPR E-504.1 REQUIRES PROGRESS PAYMENTS IN INVITATIONS IN WHICH THE PERIOD BETWEEN THE BEGINNING OF WORK AND THE REQUIRED PRODUCTION DELIVERY WOULD EXCEED SIX MONTHS. THE PROCURING ACTIVITY STATES THE FOLLOWING IN ANSWER TO THIS ARGUMENT:

"IN THE INSTANT PROCUREMENT AN AWARD IN AN AMOUNT LESS THAN $100,000 WAS ANTICIPATED, BASED UPON AN ENGINEERING ESTIMATE MADE OF A SIMILAR PROCUREMENT. THE CONTRACTING OFFICER INTERPRETED ASPR E-504.1 AS REQUIRING, EXCEPT WHERE PROGRESS PAYMENTS WOULD BE USEFUL OR NECESSARY FOR OTHER CIRCUMSTANCES INVOLVING SUBSTANTIAL ACCUMULATION OF PREDELIVERY COSTS, THAT THE PROCUREMENT BE ESTIMATED TO EXCEED $100,000 AND THAT IT INVOLVE AT LEAST A SIX MONTH PERIOD FROM BEGINNING OF WORK TO REQUIRED FIRST PRODUCTION. SINCE ONLY ONE OF THE ELEMENTS WAS PRESENT AND SINCE THE WORDING OF ASPR E-504.1 INDICATES THAT THESE ELEMENTS ARE MATTERS FOR CONSIDERATION AND NOT MERELY TO BE FOUND AS A FACT, THE CONTRACTING OFFICER MADE THE DETERMINATION THAT PROGRESS PAYMENTS SHOULD NOT BE INCLUDED IN THE PRESENT INVITATION. THIS DETERMINATION NOT TO INCLUDE PROGRESS PAYMENTS WAS NOT INADVERTENT BUT MADE ON THE BASIS OF AN INTERPRETATION OF THE REGULATIONS.

"IT APPEARS THAT CONSIDERATION BY THE CONTRACTING OFFICER, AS CALLED FOR BY ASPR E-504.1, IS RELATED SOLELY TO WHETHER PROGRESS PAYMENTS WILL BE USEFUL AND NECESSARY AND NOT TO THE ANTECEDENT STATEMENT REGARDING EXTENDED DELIVERY SCHEDULES. THEREFORE, IF THE MATTER WERE NOW BEFORE THE CONTRACTING OFFICER FOR DECISION, THE EXTENDED DELIVERY SCHEDULE ALONE WOULD SUPPORT THE INCLUSION OF PROGRESS PAYMENTS IN THIS CASE. HOWEVER, THE DETERMINATION NOT TO INCLUDE PROGRESS PAYMENTS WAS NOT INADVERTENT, DOES NOT APPEAR TO HAVE UNDULY LIMITED COMPETITION IN VIEW OF THE NUMBER OF BIDS RECEIVED, WAS MADE IN GOOD FAITH AND IS NOT IN DEROGATION TO THE STATUTORY AUTHORITY FOR PROGRESS PAYMENTS, 10 U.S.C. 2307, BUT ONLY TO THE ADMINISTRATIVE IMPLEMENTATION AS CONTAINED IN SECTION E OF THE ARMED SERVICES PROCUREMENT REGULATION. IT IS THEREFORE SUBMITTED THAT THE - CHRISTIAN- DOCTRINE HAS NO APPLICATION TO THE PRESENT PROTEST AND THE FAILURE TO PROVIDE PROGRESS PAYMENTS UNDER THESE CIRCUMSTANCES DOES NOT REQUIRE THE CANCELLATION OF THE CONTRACT AWARDED PURSUANT TO THE INVITATION TO BEUKERS LABORATORIES, INC.'

WE AGREE WITH YOUR CONTENTION THAT PROGRESS PAYMENTS SHOULD HAVE BEEN PROVIDED IN THE IFB. SECTION B OF THE IFB DID NOT REQUIRE DELIVERY ON THE FIRST UNIT OF ITEM 1 FOR FIRST ARTICLE APPROVAL TESTS UNTIL 360 CALENDAR DAYS FROM THE DATE OF THE CONTRACT AND ASPR E-504.1 SPECIFICALLY REQUIRES THAT "PROVISION FOR PROGRESS PAYMENTS SHALL BE MADE IN INVITATION FOR BIDS WHENEVER THE CONTRACTING OFFICER CONSIDERS (1) THAT THE PERIOD BETWEEN THE BEGINNING OF WORK AND THE REQUIRED FIRST PRODUCTION DELIVERY WILL EXCEED SIX MONTHS ...' SEE 46 COMP. GEN. 368.

WHILE THE CONTRACTING OFFICER'S INTERPRETATION OF ASPR E-504.1 WAS CLEARLY AND OBVIOUSLY ERRONEOUS, WE DO NOT FEEL WE WOULD BE JUSTIFIED IN CONSIDERING THE CONTRACT AWARDED IN THIS CASE A NULLITY OR ILLEGAL SIMPLY BECAUSE THE CONTRACTING OFFICER FAILED TO FOLLOW THE REGULATION PERTAINING TO INCLUSION OF PROVISION FOR PROGRESS PAYMENTS. SEE B 165792, APRIL 23, 1969. WE ARE HOWEVER, NOTIFYING THE NAVY DEPARTMENT BY SEPARATE LETTER THAT WE FEEL THAT WHEN THE CONTRACTING OFFICER WAS PUT ON NOTICE BEFORE AWARD CONCERNING A PROBLEM REGARDING PROGRESS PAYMENTS THAT HE SHOULD HAVE RECONSIDERED HIS ACTION AND REISSUED THE INVITATION TO PROVIDE FOR PROGRESS PAYMENTS. THE DEPARTMENT HAS RECOGNIZED THE IMPROPRIETY OF THE FAILURE OF THE CONTRACTING OFFICER TO GIVE PROMPT NOTICE TO THE SMALL BUSINESS ADMINISTRATION OF THE DETERMINATION OF NONRESPONSIVENESS, AND WE ARE POINTING OUT THE DESIRABILITY OF PROMPT NOTICE TO THE AFFECTED BIDDER ALSO. THE PROCURING ACTIVITY HAS ALREADY INFORMED THIS OFFICE THAT ACTION IS BEING TAKEN TO ASSURE THAT PROGRESS PAYMENTS WILL BE PROVIDED IN ACCORDANCE WITH THE PROVISIONS OF ASPR E-504.1, OR THAT PROPER WARNING TO THAT EFFECT WILL BE INSERTED IN THE SOLICITATION IN THOSE CASES WHICH DO NOT QUALIFY FOR INCLUSION.

YOU CONTEND THAT THE DECISION IN G. L. CHRISTIAN AND ASSOCIATES V UNITED STATES (160 CT. CL. 1, 312 F.2D 418 (1963), MOTION FOR RECONSIDERATION DENIED, 160 CT. CL. 58, 320 F.2D 345 (1963), CERT. DENIED, 375 U.S. 954 (1963) ( IS APPLICABLE IN THESE CIRCUMSTANCES SO AS TO MAKE YOUR BID RESPONSIVE, SINCE PROGRESS PAYMENTS WERE REQUIRED UNDER AN ASPR PROVISION AND UNDER THE "CHRISTIAN DOCTRINE" ASPR PROVISIONS HAVE THE FORCE AND EFFECT OF LAW. YOU HAVE STATED THE FOLLOWING REGARDING THE "CHRISTIAN DOCTRINE":

"A SECOND ARGUMENT IS THAT THE -CHRISTIAN DOCTRINE- IS APPLICABLE IN THIS CASE. IN THE -CONDEC CASE-, IT WAS HELD APPLICABLE TO IFB-S. THIS DECISION WENT FURTHER THAN THE -CHRISTIAN DOCTRINE-. THE COMPTROLLER GENERAL APPEARS TO FEEL IN B-163753, B-164797 AND B-165792 THAT THE CHRISTIAN DOCTRINE- WOULD NOT ACT TO MAKE A BID RESPONSIVE, WHERE THE BID IS LACKING IN SOME AREA OF NEGATIVE RESPONSIVENESS TO AN IFB (B 165792). THE RULINGS THAT CAME TO NOTICE DO NOT DECIDE THE QUESTION OF POSITIVE NONRESPONSIVENESS. IN OTHER WORDS THE BIDDER, AS IN THE PRESENT CASE, OVERRESPONDED BASED ON THE -CHRISTIAN DOCTRINE- THAT ASPR HAS THE FORCE AND EFFECT OF LAW AND IS OPERATIVE REGARDLESS OF THE EFFICIENCY OR KNOWLEDGE OF THE CONTRACTING OFFICER TO ANNUNCIATE ITS PROVISIONS.'

WE DO NOT FEEL THAT THERE IS A MATERIAL DISTINCTION BETWEEN POSITIVE NONRESPONSIVENESS AND NEGATIVE NONRESPONSIVENESS IN THIS RESPECT. EITHER INSTANCE THE QUESTION IS STILL AS TO THE RESPONSIVENESS OF THE BID TO THE INVITATION, AND THE MATERIAL POINT IS WHETHER THE INVITATION IS TO BE READ AS CONTAINING THE OMITTED PROVISION. THE POSITION OF THIS OFFICE IN REGARD TO THE QUESTION OF RESPONSIVENESS UNDER THE "CHRISTIAN DOCTRINE" AND THE CASE OF CONDEC CORPORATION V UNITED STATES (177 CT. CL. 958, 369 F.2D 753 (1966) ( WAS STATED IN B-165792, MARCH 13, 1969, AS FOLLOWS:

"* * * IN B-163753, MAY 28, 1968, 47 COMP. GEN. -----, WE STATED THAT:

"-* * * WE BELIEVE THAT THE COURT'S DECISION (IN CHRISTIAN) MUST OF NECESSITY BE LIMITED TO SITUATIONS WHEREIN MANDATORY CONTRACT PROVISIONS IMPOSED BY STATUTORY PROCUREMENT REGULATIONS ARE INCORPORATED BY OPERATION OF LAW IN OTHERWISE PROPERLY AWARDED GOVERNMENT CONTRACTS AS TO WHICH SUCH REGULATIONS CLEARLY APPLY.-

"THE CONDEC DECISION DID NOT INVOLVE THE RESPONSIVENESS OF A BID. CONDEC'S BID WAS RESPONSIVE, BUT IT SOUGHT TO PREVENT THE GOVERNMENT FROM TAKING ADVANTAGE OF A LATE TELEGRAPHIC MODIFICATION LOWERING ITS ALREADY LOW BID PRICE BY CLAIMING THAT THE INVITATION DID NOT PROVIDE FOR THE FAVORABLE CONSIDERATION OF LATE TELEGRAPHIC MODIFICATIONS. THE COURT HELD THAT ASPR IS CONTROLLING ON THE CONTRACTING OFFICER AND THAT EVEN THOUGH THE MANDATORY PROVISION HAD BEEN OMITTED FROM THE INVITATION, ASPR REQUIRED THE CONSIDERATION OF LATE TELEGRAPHIC BID MODIFICATIONS. OTHER WORDS, THE MISSING ASPR PROVISION HAD NO EFFECT UPON THE RESPONSIVENESS OF CONDEC'S BID, BUT MERELY CONSTITUTED A PROCEDURAL REQUIREMENT CONCERNING THE CONSIDERATION OF LATE TELEGRAPHIC BID MODIFICATIONS.

"WE THEREFORE BELIEVE THAT THE -CHRISTIAN DOCTRINE- HAS BEEN APPLIED ONLY IN CASES WHERE THE RESPONSIVENESS OF THE BID IN QUESTION HAS NOT BEEN IN ISSUE. COLLINS' BID WAS NOT RESPONSIVE TO THE F.O.B. DELIVERY TERMS OF THE INVITATION; THEREFORE, THE -CHRISTIAN DOCTRINE- WAS NOT APPLICABLE SO AS TO HAVE MADE COLLINS' NONRESPONSIVE BID RESPONSIVE TO A MANDATORY INVITATION REQUIREMENT.'

IN B-165792, APRIL 23, 1969, WE FURTHER DISCUSSED THE EFFECT THE "CHRISTIAN DOCTRINE" HAS IN CASES IN WHICH A MANDATORY BIDDING TERM IS INADVERTENTLY OR INTENTIONALLY OMITTED FROM THE SOLICITATION, AND WE FEEL THAT THE FOLLOWING STATEMENT FROM THAT DECISION APPLIES IN THE INSTANT CASE:

"AS STATED, ASPR 2-201 (B) (XXXII) IS A MANDATORY BIDDING TERM FOR INCLUSION IN SOLICITATIONS OF THIS NATURE (SEE ASPR 19-212); HOWEVER, FOR THE REASONS STATED IN THE MARCH 13 DECISION, IF THAT BIDDING TERM IS INADVERTENTLY OR INTENTIONALLY OMITTED FROM THE SOLICITATION, IT MAY NOT SUBSEQUENTLY BE INCORPORATED THEREIN BY LAW UNDER THE -CHRISTIAN DOCTRINE- SO AS TO MAKE A NONRESPONSIVE BID RESPONSIVE. SEE, IN THIS RESPECT, PAGES 5 AND 6 OF THE MARCH 13 DECISION. THAT REGULATION, LIKE OTHER BIDDING TERMS AND CONDITIONS INCLUDED IN THE SOLICITATION, IS TO BE CONSIDERED BY BIDDERS IN PREPARING THEIR BIDS AND BY THE GOVERNMENT IN EVALUATION IF INCLUDED IN THE SOLICITATION AND LIKE THE OTHER TERMS AND CONDITIONS WOULD THEREBY BE INCORPORATED INTO THE RESULTING CONTRACT. AS SUCH, SUBPARAGRAPH -B- THEREOF IS NOT SIMPLY, AS COLLINS CONTENDS, AN INSTRUCTION TO THE CONTRACTING OFFICER TO EVALUATE BIDS ON A BASIS OTHER THAN AS SPECIFIED IN THE INVITATION OR AS CONTEMPLATED BY COMPETING BIDDERS DURING PREPARATION OF THEIR BIDS. IN OTHER WORDS, WE AGREE THAT THE IMPORT OF THE CITED REGULATIONS WOULD BE TO RENDER A BID, LIKE COLLINS IN THIS INSTANCE, FULLY RESPONSIVE TO THE DELIVERY TERMS OF THE INVITATION, BUT BY THE CLEAR LANGUAGE OF THOSE REGULATIONS AND THE APPLICABLE CASE LAW CITED IN OUR DECISION OF MARCH 13, THE METHOD OF EVALUATION OF BIDS PRESENTED THEREIN IS PROPER FOR APPLICATION ONLY IN SITUATIONS WHERE ASPR 2-201 (B) (XXXII) B IS ACTUALLY INCLUDED OR INCORPORATED BY REFERENCE INTO THE INVITATION.'

EVEN THOUGH THE PROVISION FOR PROGRESS PAYMENTS WAS INADVERTENTLY OMITTED FROM THE IFB, IT WAS SPECIFICALLY DELETED BY THE LANGUAGE INCLUDED THEREIN, AND WE MUST AGREE WITH THE PROCURING ACTIVITY THAT YOUR ATTEMPT TO BID ON A BASIS EXPRESSLY PRECLUDED BY THE INVITATION MUST BE CONSIDERED AS RENDERING YOUR BID NONRESPONSIVE. THE QUESTION OF THE EFFECT OF A BID CONDITIONED UPON RECEIVING PROGRESS PAYMENTS WHERE THE INVITATION CONTAINS NO PROVISION FOR SUCH PAYMENTS HAS BEEN BEFORE OUR OFFICE ON SEVERAL OCCASIONS AND WE HAVE CONSISTENTLY HELD THAT A BID SO QUALIFIED IS NONRESPONSIVE IN A MATERIAL RESPECT AND SUCH DEVIATION CANNOT BE WAIVED, UNLESS THE INVITATION EXPLICITLY CONTEMPLATES THE INCLUSION OF PROGRESS PAYMENTS AND SOLICITS BIDS ON SUCH BASIS. 38 COMP. GEN. 131; 45 ID. 809; 46 ID. 368.

IN REGARD TO YOUR SECOND GROUND OF PROTEST REGARDING THE AUTHORITY OF THE CONTRACTING OFFICER YOU HAVE STATED THE FOLLOWING:

"IT IS RII'S POSITION THAT THE CONTRACTING OFFICER'S AUTHORITY IS DERIVED FROM ASPR-1-402 AND ASPR-1-403. THERE APPEARS TO BE NO ARGUMENT BY THE NAVY THAT ALL APPLICABLE REQUIREMENTS OF ASPR WERE FOLLOWED AS REQUIRED BY ASPR-1-403. THE NAVY ADMITS THAT PARTS OF ASPR WERE NOT FOLLOWED IN THEIR ANSWER (PAGE 3). RII MAINTAINS THAT NO AUTHORITY WAS VESTED IN THE CONTRACTING OFFICER UNDER ASPR-1-402 AND THUS NO VALID CONTRACT COULD RESULT.' ASPR 1-402 AND 1-403 STATE:

"1-402 AUTHORITY OF CONTRACTING OFFICERS. CONTRACTING OFFICERS AT PURCHASING OFFICES (SEE 1-201.24) ARE AUTHORIZED TO ENTER INTO CONTRACTS FOR SUPPLIES OR SERVICES ON BEHALF OF THE GOVERNMENT, AND IN THE NAME OF THE UNITED STATES OF AMERICA, BY FORMAL ADVERTISING, BY NEGOTIATION, OR BY COORDINATED OR INTERDEPARTMENTAL PROCUREMENT; AND WHEN AUTHORIZED BY 20- 703 TO ADMINISTER SUCH CONTRACTS, IN ACCORDANCE WITH THIS REGULATION. THIS AUTHORITY IS SUBJECT TO THE REQUIREMENTS PRESCRIBED IN 1-403 AND 1- 404 AND ANY FURTHER LIMITATIONS, CONSISTENT WITH THIS REGULATION, IMPOSED BY THE APPOINTING AUTHORITY. CONTRACTING OFFICERS AT CONTRACT ADMINISTRATION OFFICES (SEE 1-201.25) ARE, EXCEPT AS PROVIDED IN 20-703.3, AUTHORIZED TO PERFORM THE APPLICABLE CONTRACT ADMINISTRATION FUNCTIONS (SEE 1-406) AND TO PERFORM ADDITIONAL PROCUREMENT FUNCTIONS WHEN DELEGATED BY THE PURCHASING OFFICE.

"1-403 REQUIREMENTS TO BE MET BEFORE ENTERING INTO CONTRACTS. CONTRACT SHALL BE ENTERED INTO UNLESS ALL APPLICABLE REQUIREMENTS OF LAW AND OF THIS REGULATION, AND ALL OTHER APPLICABLE PROCEDURES, INCLUDING BUSINESS CLEARANCE AND APPROVAL, HAVE BEEN MET.'

YOUR INTERPRETATION OF ASPR 1-403, AS STATED ABOVE, CARRIED TO ITS LOGICAL CONCLUSION WOULD MEAN THAT ANY TIME ANY PROVISION OF LAW, ASPR, OR NUMEROUS OTHER PROCUREMENT CIRCULARS, DIRECTIVES, PROCEDURES, ETC., WAS VIOLATED THE CONTRACTING OFFICER WOULD LOSE HIS AUTHORITY. IN OUR OPINION THE ERRONEOUS FAILURE OF THE CONTRACTING OFFICER TO FOLLOW A REGULATORY PROVISION MAY NOT BE REGARDED AS AUTOMATICALLY DEPRIVING HIM OF ALL AUTHORITY TO ACT. SUCH REGULATORY, AS WELL AS STATUTORY, PROVISIONS WITH RESPECT TO PROCUREMENT PROCEDURES ARE ADDRESSED TO THE GOVERNMENT'S OFFICERS, WHO ARE RESPONSIBLE TO THE GOVERNMENT FOR THEIR PROPER OBSERVANCE. THEY ARE PRIMARILY FOR THE BENEFIT OF THE GOVERNMENT, AND IT HAS BEEN HELD THAT THEY CONFER NO ENFORCEABLE RIGHTS UPON PROSPECTIVE BIDDERS, BEING SELF-IMPOSED RESTRAINTS FOR VIOLATION OF WHICH THE GOVERNMENT--- BUT NOT BIDDERS--- CAN COMPLAIN. SEE PERKINS V LUKENS STEEL COMPANY, 310 U.S. 113, 126, 127 (1940). THE AUTHORITY OF CONTRACTING OFFICERS NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION AND THEIR ACTIONS WITHIN THE SCOPE THEREOF ARE BINDING UPON THE GOVERNMENT. SEE JOHN REINER AND CO. V UNITED STATES, 163 CT. CL. 381, 389.

ON THE RECORD IN THIS CASE, WE BELIEVE THAT THE AWARD MADE CONSUMMATED A VALID AND BINDING CONTRACT.

YOUR THIRD GROUND FOR PROTEST IS THAT THE PROCURING ACTIVITY BOTH BEFORE AND AFTER AWARD REFUSED TO RECEIVE YOUR PROTESTS. MR. MOOREFIELD HAS STATED IN AN AFFIDAVIT DATED AUGUST 4, 1969:

"I, CARLTON S. MOOREFIELD, COUNSEL FOR REACTION INSTRUMENTS, INCORPORATED, ACTING ON THE INSTRUCTIONS OF THE BOARD OF DIRECTORS OF REACTION INSTRUMENTS, INCORPORATED, PREPARED AND DELIVERED A WRITTEN PROTEST TO MR. JAMES WILSON, DEPARTMENT OF THE NAVY, ON OR ABOUT 13 MARCH 1969, IN REGARD TO IFB N00039-69-B-0014; THAT MR. WILSON READ SAID PROTEST, RETURNED THE PROTEST TO MR. MOOREFIELD AND STATED (IN EFFECT) THAT HE WOULDN-T TAKE THE PROTEST BECAUSE REACTION INSTRUMENTS, INCORPORATED HAD NOT BEEN DECLARED NON-RESPONSIVE, HAD NO GROUNDS FOR PROTEST, AND THAT REACTION INSTRUMENTS, INCORPORATED, WAS JUST TRYING TO GET OUT OF A LOW BID.

"THAT ON OR ABOUT 29 MAY 1969, AFTER BEING INFORMED THAT SAID IFB HAD BEEN AWARDED TO OTHERS THAN REACTION INSTRUMENTS, INCORPORATED, MR. MOOREFIELD REQUESTED A MEETING WITH THE NAVY AND OBTAINED ONE AT 2:00 P.M. 29 MAY 1969. THAT MR. MOOREFIELD PREPARED A WRITTEN PROTEST AND ATTENDED THE MEETING WHICH CONSISTED OF MR. WILSON, MR. CAMPBELL, AND COUNSEL FOR THE NAVY PLUS MR. MOOREFIELD.

"AT THE CONCLUSION OF THE MEETING, MR. MOOREFIELD STATED TO MR. CAMPBELL, THAT HE (MR. MOOREFIELD) HAD A PREPARED PROTEST AND WOULD LIKE TO PRESENT IT AT THAT TIME. MR. CAMPBELL MADE SOME MOTION TOWARDS ACCEPTANCE OF SAID PROTEST WHEN COUNSEL FOR THE NAVY INSTRUCTED MR. CAMPBELL NOT TO ACCEPT THE PROTEST, STATING -WE WILL RECEIVE THE PROTEST IN DUE COURSE-. MR. MOOREFIELD STATED THAT IN HIS UNDERSTANDING OF ASPR THAT THE CONTRACTING OFFICER IS THE PROPER PERSON TO RECEIVE A PROTEST. COUNSEL FOR NAVY AGAIN STATED THAT IN DUE COURSE MR. CAMPBELL WOULD GET THE PROTEST.

"HAVING BEEN DENIED MEANS FOR PROTEST TO THE NAVY AS PROVIDED FOR UNDER ASPR, MR. MOOREFIELD CABLED A PROTEST TO THE CONTROLLER GENERAL ON 29 MAY 1969.'

THE PROCURING ACTIVITY STATES THE FOLLOWING IN REPLY TO THE CONTENTIONS OF MR. MOOREFIELD:

"REACTION INSTRUMENTS ALSO HAS STATED THAT TWO PROTESTS WERE MADE IN ADDITION TO THE INSTANT NE; ONE BEFORE AND ONE AFTER AWARD. IN THIS REGARD REACTION INSTRUMENTS, INC. STATES THAT THE PROVISIONS OF ASPR 2 407.9 (B) WERE NOT FOLLOWED. MR. MOOREFIELD HAD SEVERAL DISCUSSIONS WITH THE NEGOTIATOR PRIOR TO AWARD. THE NEGOTIATOR STATES THAT AT NO TIME DURING ANY OF THE DISCUSSIONS DID MR. MOOREFIELD VOICE ANY KIND OF A PROTEST WITH REGARD TO THE PROPOSED AWARD. ACCORDINGLY, BASED ON OUR RECORDS AND INFORMATION, SINCE NO PROTEST WAS MADE PRIOR TO AWARD THERE WAS NO REASON TO FOLLOW THE PROCEDURE OUTLINED IN ASPR 2-407.9 (B) RELATING TO THE ACTIONS TO BE TAKEN ON PROTESTS PRIOR TO AWARD. SIMILARLY NO PROTEST WAS REFUSED AFTER AWARD BUT MR. MOOREFIELD WAS ADVISED THAT THE NAVY WOULD RESPOND TO THE GENERAL ACCOUNTING OFFICE REQUEST FOR A REPORT IN THE MATTER.'

THE PROCURING ACTIVITY HAS ALSO ADVISED THIS OFFICE, WITH RESPECT TO THE ALLEGED PROTEST AFTER AWARD, THAT NO PROTEST WAS EVER SEEN BY MR. WILSON, MR. CAMPBELL OR MR. EVAN REVELLE, THE COUNSEL FOR THE NAVY IN ATTENDANCE AT THE MEETING ON MAY 29, 1969, NOR WAS MR. CAMPBELL EVER INSTRUCTED NOT TO ACCEPT A PROTEST.

THE STATEMENTS REGARDING THE ALLEGED PROTESTS BOTH BEFORE AND AFTER AWARD ARE IN SUCH DIRECT CONFLICT THAT THIS OFFICE IS FORCED TO FOLLOW THE RULE THAT WE MUST ACCEPT THE ADMINISTRATIVE VERSION OF DISPUTED FACTS UNLESS THE PRESUMPTION OF CORRECTNESS ATTRACTING THERETO IS CLEARLY OVERCOME (47 COMP. GEN. 627, 630 (1968) (, WHICH HAS NOT BEEN DONE IN THIS CASE.

IF AT ANY TIME IN THE FUTURE YOU FEEL THAT A PROCURING ACTIVITY IS REFUSING TO ACCEPT OR GIVE CONSIDERATION TO AN OFFERED PROTEST, WE SUGGEST THAT THIS OFFICE BE IMMEDIATELY INFORMED OF THE PROTEST AND OF THE ADMINISTRATIVE ACTION OR THREATENED ACTION OBJECTED TO. ..END :