B-167110, NOV. 4, 1969

B-167110: Nov 4, 1969

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RESPONSIBLE BID RECEIVED AND NO BASIS IS FOUND IN RECORD TO DISAGREE WITH AGENCY'S DETERMINATION THAT CLEAR AND CONVINCING EVIDENCE ESTABLISHED BOTH EXISTENCE OF MISTAKE AND ACTUAL BID INTENDED. BECAUSE CORRECTION OF MISTAKE IN BID IS AUTHORIZED ONLY WHEN BID IS RESPONSIVE IN FORM IN WHICH IT IS SUBMITTED LOW BID WAS FULLY RESPONSIVE TO TERMS OF INVITATION AND WAS ELIGIBLE FOR CORRECTIONS. THE SUBJECT IFB WAS ISSUED ON OCTOBER 4. BIDS WERE OPENED ON JANUARY 24. IT IS REPORTED THAT THE LOW RESPONSIVE BIDDER WAS DETERMINED TO BE NON- RESPONSIBLE FOR REASONS NOT PERTINENT HERE. THE SECOND LOW BIDDER WAS GIBBS AND THE THIRD LOW BIDDER WAS REPUBLIC. IT IS REPORTED THAT THE DIFFERENCE IN PRICE BETWEEN GIBBS AND REPUBLIC WAS IN EXCESS OF $75.

B-167110, NOV. 4, 1969

BIDS--DELIVERY PROVISIONS--MISTAKE--CORRECTION BID WHICH INDICATED JANESVILLE, WISC; AS SHIPPING POINT FOR F.O.B. ORIGIN ITEMS MAY BE CORRECTED TO SHOW LA PUENTE, CALIF; AS SHIPPING, INSPECTION AND ACCEPTANCE POINT SINCE BID AS SUBMITTED AND AS CORRECTED REMAINED LOWEST RESPONSIVE, RESPONSIBLE BID RECEIVED AND NO BASIS IS FOUND IN RECORD TO DISAGREE WITH AGENCY'S DETERMINATION THAT CLEAR AND CONVINCING EVIDENCE ESTABLISHED BOTH EXISTENCE OF MISTAKE AND ACTUAL BID INTENDED. BECAUSE CORRECTION OF MISTAKE IN BID IS AUTHORIZED ONLY WHEN BID IS RESPONSIVE IN FORM IN WHICH IT IS SUBMITTED LOW BID WAS FULLY RESPONSIVE TO TERMS OF INVITATION AND WAS ELIGIBLE FOR CORRECTIONS, BID NOT DEVIATING, TAKING EXCEPTION TO, OR QUALIFYING ANY REQUIREMENTS OF INVITATION.

TO WACHTEL, WIENER AND ROSS:

WE REFER TO YOUR TELEGRAM OF MAY 29, 1969, AND SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF REPUBLIC ELECTRONICS INDUSTRIES CORPORATION (REPUBLIC), AGAINST THE AWARD OF A CONTRACT TO GIBBS MANUFACTURING AND RESEARCH CORPORATION (GIBBS) UNDER INVITATION FOR BIDS NO. N00017-69-B- 1105, ISSUED BY THE NAVAL ORDNANCE SYSTEMS COMMAND.

THE SUBJECT IFB WAS ISSUED ON OCTOBER 4, 1968, AND CONTEMPLATED THE PROCUREMENT OF ASROC IGNITION SEPARATION ASSEMBLIES, ANCILLARY ITEMS AND FIRST ARTICLE SAMPLES, ON A TWO-YEAR MULTI-YEAR BASIS, AS WELL AS AN OPTION FOR INCREASED QUANTITIES. BIDS WERE OPENED ON JANUARY 24, 1969. IT IS REPORTED THAT THE LOW RESPONSIVE BIDDER WAS DETERMINED TO BE NON- RESPONSIBLE FOR REASONS NOT PERTINENT HERE. THE SECOND LOW BIDDER WAS GIBBS AND THE THIRD LOW BIDDER WAS REPUBLIC. IT IS REPORTED THAT THE DIFFERENCE IN PRICE BETWEEN GIBBS AND REPUBLIC WAS IN EXCESS OF $75,000.

SECTION B OF THE IFB SCHEDULE ENTITLED "DELIVERIES" STATES IN PERTINENT PART:

"ITEMS 7, 10, 11, 12, 13 AND 16 -- F.O.B. ORIGIN. BIDS SUBMITTED ON A BASIS OTHER THAN F.O.B., CARRIER'S EQUIPMENT, WHARF, OR FREIGHT STATION AT A SPECIFIED CITY OR SHIPPING POINT, AT OR NEAR THE CONTRACTOR'S PLANT, WILL BE REJECTED AS NONRESPONSIVE. BIDS WILL BE EVALUATED ON THE BASIS OF THE LOWEST OVERALL COST TO THE GOVERNMENT, TAKING ACCOUNT OF TRANSPORTATION COSTS TO THE GOVERNMENT FROM THE POINT OF ORIGIN TO THE DESIGNATED DOMESTIC DESTINATIONS.

"FOR THE PURPOSE OF EVALUATING BIDS AND FOR NO OTHER PURPOSE, THE FINAL DESTINATIONS FOR THE SUPPLIES WILL BE CONSIDERED TO BE AS FOLLOWS: "45 PERCENT OF EACH APPLICABLE ITEM -- NAVAL WEAPONS STATION, SEAL BEACH, CALIFORNIA.'55 PERCENT OF EACH APPLICABLE ITEM -- NAVAL WEAPONS STATION, YORKTOWN, VIRGINIA.'

SECTION E OF THE SCHEDULE REQUIRED BIDDERS TO INSERT THE LOCATION WHERE F.O.B. ORIGIN ITEMS WERE TO BE OFFERED FOR INSPECTION AND ACCEPTANCE BY THE GOVERNMENT. GIBBS SPECIFIED THIS LOCATION IN ITS BID AS ITS PLANT AT 340 NO. FRANKLIN STREET, JANESVILLE, WISCONSIN. IN ADDITION, GIBBS INDICATED "TEAM TRACK, JANESVILLE, WISCONSIN," AS ITS SHIPPING POINT FOR THE F.O.B. ORIGIN ITEMS. HOWEVER, DURING THE PRE AWARD SURVEY OF GIBBS IT WAS LEARNED THAT GIBBS WOULD SUBCONTRACT ALL EXPLOSIVE COMPONENTS TO REYNOLDS ROCKET SYSTEMS OF LA PUENTE, CALIFORNIA, AND THAT UPON COMPLETION THE SUBCONTRACTOR WOULD SHIP THE EXPLOSIVES DIRECTLY TO THE GOVERNMENT.

PRIOR TO THE CONTRACTING OFFICER'S RECEIPT OF THE RESULTS OF THE PRE AWARD SURVEY, REPUBLIC PROTESTED THE PENDING AWARD TO GIBBS ON THE BASIS THAT GIBBS WAS NOT A RESPONSIVE BIDDER BECAUSE IT HAD INDICATED THAT INSPECTION AND ACCEPTANCE WOULD TAKE PLACE AT ITS JANESVILLE, WISCONSIN, PLANT AND IT DID NOT POSSESS THE CAPABILITY FOR EXPLOSIVE HANDLING AT THIS PLANT. THE NAVAL ORDNANCE SYSTEMS COMMAND TOOK THE POSITION, HOWEVER, THAT GIBBS' BID WAS RESPONSIVE ON ITS FACE AND IT WOULD BE NECESSARY TO COMPLETE THE PRE-AWARD SURVEY IN ORDER TO DETERMINE MATTERS RELATING TO RESPONSIBILITY.

SUBSEQUENTLY, BY LETTER DATED APRIL 11, 1969, GIBBS ALLEGED THAT IT HAD MADE A MISTAKE IN BID AND REQUESTED THAT ITS BID BE CORRECTED TO CHANGE THE POINT OF INSPECTION AND ACCEPTANCE FROM JANESVILLE, WISCONSIN, TO THE PLANT OF ITS SUBCONTRACTOR IN LA PUENTE, CALIFORNIA. GIBBS AT THAT TIME FURNISHED THE QUOTATION OF REYNOLDS ROCKET SYSTEM FOR ACCOMPLISHING THE SUBCONTRACT WORK. THIS QUOTATION WAS DATED JANUARY 8, 1969, WHICH WAS SEVERAL DAYS PRIOR TO THE SUBMISSION OF GIBBS' BID. THE NAVY REPORTS THAT IT WAS APPARENT FROM THE PRE-AWARD SURVEY AND THE QUOTATION FROM REYNOLDS THAT GIBBS NEVER INTENDED TO HANDLE THE EXPLOSIVE COMPONENTS AND THERE WAS NO EVIDENCE TO SUGGEST THAT GIBBS EVER CONTEMPLATED OR HAD THE SPECIALIZED TECHNICAL CAPABILITY OF LOADING THE EXPLOSIVE COMPONENTS AT ITS OWN FACILITIES IN WISCONSIN. ACCORDING TO THE NAVY IT DID NOT APPEAR REASONABLE THAT THE CONTRACTOR WOULD GO TO THE CONSIDERABLE EXPENSE OF PREPARING A BID BASED UPON A SPECIALIZED TECHNICAL CAPABILITY IT DID NOT POSSESS, OR THAT, IN THE ALTERNATIVE, IT WOULD SHIP THE COMPLETED HARDWARE FROM CALIFORNIA BACK TO WISCONSIN MERELY FOR THE PURPOSE OF FINAL INSPECTION AND ACCEPTANCE WHEN THE SAME PURPOSE COULD BE SERVED BY PERFORMING THE INSPECTION AND ACCEPTANCE AT ITS SUBCONTRACTOR'S PLANT IN CALIFORNIA. ACCORDINGLY, ON MAY 16, 1969, THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND MADE A DETERMINATION TO CORRECT THE BID PURSUANT TO GIBBS' REQUEST AND ON MAY 23, 1969, AWARD WAS MADE TO GIBBS. IN HIS FINDINGS AND DETERMINATION TO SUPPORT THE BID CORRECTION, THE DEPUTY COMMANDER STATED: "* * * THE CONTRACTING OFFICER STATED HIS BELIEF THAT THE EVIDENCE IS CLEAR AND CONVINCING BOTH AS TO A MISTAKE AND THE INTENDED BID AND HE RECOMMENDED THAT THE BID BE CORRECTED AND CONSIDERED AS INTENDED.'4. COMPUTATIONS OF TRANSPORTATION COSTS THAT WOULD BE INCURRED BY THE GOVERNMENT FOR DELIVERY FOB ORIGIN ITEMS FROM BOTH JANESVILLE, WISCONSIN, AS BID, AND FROM LAPUENTE, CALIFORNIA, AS INTENDED, TO SEAL BEACH AND YORKTOWN, WERE PREPARED FOR THE CONTRACTING OFFICER BY THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICES, BASED ON THE GUARANTEED SHIPPING WEIGHTS OF THE TWO BIDDERS. THESE COMPUTATIONS REVEAL THAT CORRECTION OF THE ACCEPTANCE POINT WOULD RESULT IN AN INCREASE OF $10.50 FOR EACH 600 UNITS AND RELATED ITEMS. THE BIDS SUBMITTED BY GIBBS AND THE NEXT LOWEST BIDDER, REPUBLIC ELECTRONICS INDUSTRIES, PLUS TRANSPORTATION COSTS ON THE FOB ORIGIN ITEMS WERE AS FOLLOWS:

"LOT I (FY 1969)

GIBBS $1,060,698 PLUS TRANSPORTATION

$2,350,50 EQUALS $1,063,048.50

REPUBLIC $1,101,079 PLUS TRANSPORTATION

$2,559.00 EQUALS $1,103,638.00

(GIBBS IF CORRECTED: $1,060,698 PLUS

TRANSPORTATION $2,361.00 EQUALS $1,063,059.00)

"LOT II MULTI-YEAR (FY 1969 AND FY 1970) GIBBS

$1,954,999 PLUS TRANSPORTATION $4,701.00 EQUALS

$1,959,700 REPUBLIC $2,040,304 PLUS TRANSPORTATION

$5,118.00 EQUALS $2,045,422 (GIBBS IF

CORRECTED: $1,954,999 PLUS TRANSPORTATION $4,722.00

EQUALS $1,959,721)

"DETERMINATION

"BASED ON THE FOREGOING, IT IS HEREBY DETERMINED THAT THE EVIDENCE IS CLEAR AND CONVINCING BOTH AS TO THE ERROR AND THE INTENDED BID OF GIBBS MANUFACTURING AND RESEARCH CORPORATION. CORRECTION OF THE MISTAKE WILL NOT CHANGE GIBBS' BIDDING POSITION. ITS BID BOTH AS SUBMITTED AND AS CORRECTED REMAINS THE LOWEST RESPONSIVE, RESPONSIBLE BID RECEIVED. ACCORDINGLY, THE BID SHALL BE CORRECTED AND CONSIDERED AS INTENDED.'

THE NAVAL ORDNANCE SYSTEMS COMMAND PURSUANT TO ITS INTERPRETATION OF THE ABOVE FINDINGS AND DETERMINATION CORRECTED GIBBS' BID BY MODIFYING THE F.O.B. ORIGIN POINT AS WELL AS THE INSPECTION AND FINAL ACCEPTANCE POINT FOR THE F.O.B. ORIGIN ITEMS FROM JANESVILLE, WISCONSIN TO LA PUENTE, CALIFORNIA.

THE FACTS AS OUTLINED ABOVE PRESENT TWO QUESTIONS FOR CONSIDERATION: (1) WAS GIBBS' BID NON-RESPONSIVE FOR FAILING TO INDICATE THE CORRECT SHIPPING POINT AND THE CORRECT PLACE FOR INSPECTION AND ACCEPTANCE? (2) WAS THE BID CORRECTION BY THE DEPARTMENT OF THE NAVY AUTHORIZED AND PROPER? THIS LATTER CONNECTION, AN AFFIRMATIVE ANSWER TO THE FIRST QUESTION WOULD NECESSARILY RESOLVE THE SECOND SINCE THE LAW IS CLEAR THAT IN CASES OF THE KIND PRESENTED HERE, A CORRECTION OF MISTAKE IN BID IS AUTHORIZED ONLY WHEN THE BID IS RESPONSIVE IN THE FORM IN WHICH IT IS SUBMITTED. 40 COMP. GEN. 132, 134; 38 COMP. GEN. 819; B-158889, JUNE 13, 1966.

YOU NOTE THAT IN ORDER TO BE RESPONSIVE A BID MUST ACCORD WITH THE SPECIFICATIONS AND THE BIDDER MUST AGREE WITHOUT QUALIFICATION TO COMPLY WITH THEM. YOU CONTEND THAT ON THE TERMS AND CONDITIONS OF THE BID SUBMITTED BY GIBBS, IT WAS NOT ABLE TO COMPLY WITH THE SPECIFICATION SAFETY REQUIREMENTS SINCE GIBBS LACKED THE EXPLOSIVE HANDLING CAPABILITY AT ITS JANESVILLE, WISCONSIN PLANT. THE SPECIFICATIONS CONTEMPLATED, YOU SAY, THAT THE SHIPPING POINT WOULD BE A LOCATION WHERE THE PLANT WAS ABLE TO LOAD THE CONTRACT ITEMS WITH THE EXPLOSIVE CHARGE AND THAT ACCEPTANCE AND INSPECTION WOULD OCCUR AT THIS LOCATION. YOU FURTHER CONTEND THAT AFTER THE OPENING OF BIDS GIBBS WAS IN A POSITION WHERE IT COULD "SECOND GUESS OTHER BIDDERS" SINCE IT COULD HAVE ALLOWED ITSELF TO BE CONSIDERED NONRESPONSIVE OR IT COULD HAVE CLAIMED A MISTAKE AND HAD THE BID CORRECTED.

IN OUR OPINION, GIBBS' BID WAS FULLY RESPONSIVE TO THE TERMS OF THE INVITATION FOR BIDS AND WAS, THEREFORE, ELIGIBLE FOR CORRECTION. THE RESPONSIVENESS OF A BID MUST BE DETERMINED FROM THE CONTENTS OF THE BID ITSELF AT THE TIME OF OPENING. B-166858, JUNE 19, 1969. GENERALLY, A BID WILL BE CONSIDERED RESPONSIVE IF, UPON ITS ACCEPTANCE, THE BIDDER WOULD BE LEGALLY REQUIRED TO PERFORM THE RESULTING CONTRACT IN STRICT ACCORDANCE WITH ALL THE TERMS AND SPECIFICATIONS OF THE INVITATION FOR BIDS. COMP. GEN. 502. THE BID SUBMITTED BY GIBBS DID NOT DEVIATE FROM, TAKE EXCEPTION TO, OR QUALIFY, ANY OF THE TERMS OR REQUIREMENTS OF THE BID INVITATION. HAD AN AWARD BEEN MADE TO GIBBS ON THE BASIS OF THE BID AS SUBMITTED GIBBS COULD HAVE PERFORMED THE RESULTING CONTRACT IN STRICT ACCORDANCE WITH THE SPECIFICATIONS AND TERMS OF THE INVITATION ALTHOUGH, ADMITTEDLY, ITS COST OF PERFORMANCE WOULD HAVE BEEN INCREASED BY THE COST OF TRANSPORTING THE LOADED ITEMS FROM ITS LA PUENTE, CALIFORNIA, SUBCONTRACTOR'S PLANT TO ITS JANESVILLE, WISCONSIN, PLANT FOR INSPECTION AND ACCEPTANCE. WHILE YOU MAINTAIN THAT THE SPECIFICATIONS CONTEMPLATED THAT THE SHIPPING POINT AND THE INSPECTION AND ACCEPTANCE POINT WOULD BE A LOCATION WHERE THE PLANT WAS CAPABLE OF LOADING THE CONTRACT ITEMS WITH THE EXPLOSIVE CHARGE, IT NEED ONLY BE NOTED THAT THE SPECIFICATIONS DID NOT REQUIRE THAT THESE POINTS BE LOCATED AT THE LOADING PLANT. WE HAVE BEEN ADVISED BY THE NAVY, CONTRARY TO YOUR CONTENTIONS, THAT HAD GIBBS' BID NOT BEEN CORRECTED THE NAVY WOULD HAVE PERFORMED AN INITIAL INSPECTION OF EXPLOSIVE LOADING AT THE SUBCONTRACTOR'S PLANT AND THAT THE INSPECTION AND ACCEPTANCE CONTEMPLATED BY SECTION E OF THE SCHEDULE (I.E.'INSPECTION FOR THE PURPOSES OF ACCEPTANCE AND ACCEPTANCE") WOULD HAVE BEEN LATER ACCOMPLISHED AT JANESVILLE, WISCONSIN. NOTHING IN THE BID INVITATION PROHIBITED SUCH A PROCEDURE.

NOR DO WE SEE ANY MERIT IN YOUR CONTENTION THAT GIBBS WAS IN A POSITION TO "SECOND GUESS" OTHER BIDDERS AFTER BIDS WERE OPENED. SINCE GIBBS' BID WAS RESPONSIVE ON ITS FACE AND THE EXPLOSIVE LOADING CAPABILITY WHICH IT DID NOT HAVE AT ITS WISCONSIN PLANT WAS STRICTLY A MATTER RELATING TO THE RESPONSIBILITY OF THE BIDDER, IT COULD NOT AVOID AN AWARD TO IT BY PLEADING THIS LACK OF LOADING CAPABILITY. IF GIBBS HAD BEEN AWARDED THE CONTRACT ON THE BASIS OF ITS BID AS SUBMITTED, IT WOULD HAVE BEEN LEGALLY OBLIGATED TO PERFORM THE CONTRACT IN STRICT ACCORDANCE WITH THE SPECIFICATIONS INCLUDING AN OBLIGATION TO PROVIDE THE EXPLOSIVE LOADING CAPABILITY IN-HOUSE OR BY CONTRACT. GIBBS' DESIGNATION OF JANESVILLE, WISCONSIN, AS ITS SHIPPING, INSPECTION AND ACCEPTANCE POINT IN NO WAY INFRINGED UPON OR QUALIFIED THIS LATTER OBLIGATION AND GIBBS WAS NOT THEREBY PLACED IN A POSITION TO VALIDLY DECLINE AN AWARD ON THE BASIS THAT ITS BID DID NOT CONFORM TO THE INVITATION FOR BIDS.

PARAGRAPH 2-406.3 (A) (3) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT:

"/A) THE DEPARTMENTS ARE AUTHORIZED TO MAKE THE FOLLOWING ADMINISTRATIVE DETERMINATIONS IN CONNECTION WITH MISTAKES IN BIDS, OTHER THAN APPARENT CLERICAL MISTAKES, ALLEGED AFTER OPENING OF BIDS AND PRIOR TO AWARD.

"/3) WHERE THE BIDDER REQUESTS PERMISSION TO CORRECT A MISTAKE IN HIS BID AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, A DETERMINATION PERMITTING THE BIDDER TO CORRECT THE MISTAKE MAY BE MADE; PROVIDED THAT, IN THE EVENT SUCH CORRECTION WOULD RESULT IN DISPLACING ONE OR MORE LOWER BIDS, THE DETERMINATION SHALL NOT BE MADE UNLESS THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. IF THE EVIDENCE IS CLEAR AND CONVINCING ONLY AS TO THE MISTAKE, BUT NOT AS TO THE INTENDED BID, A DETERMINATION PERMITTING THE BIDDER TO WITHDRAW HIS BID MAY BE MADE.'

WHILE YOU CONTEND THAT THE ABOVE PROVISIONS OF ASPR DID NOT AUTHORIZE THE CORRECTION HERE INVOLVED BECAUSE THE EXISTENCE OF THE MISTAKE WAS "NOT ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF" , IT IS CLEAR THAT THIS "ASCERTAINABILITY" REQUIREMENT APPLIES ONLY IF THE CORRECTION WOULD RESULT IN DISPLACING ONE OR MORE LOWER BIDS. INDICATED IN THE RECORD THE CORRECTION OF THE MISTAKE DID NOT CHANGE GIBBS' BIDDING POSITION. ITS BID BOTH AS SUBMITTED AND CORRECTED REMAINED THE LOWEST RESPONSIVE, RESPONSIBLE BID RECEIVED. MOREOVER, WE FIND NO BASIS IN THE RECORD TO DISAGREE WITH THE NAVY DEPARTMENT'S DETERMINATION THAT THE EVIDENCE WAS CLEAR AND CONVINCING TO ESTABLISH BOTH THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED. WE MUST THEREFORE CONCLUDE THAT CORRECTION OF GIBBS' BID WAS LEGALLY AUTHORIZED AND PROPER. IN VIEW OF THE FOREGOING, WE FIND NO VALID REASON TO DISTURB THE AWARD TO GIBBS AND YOUR PROTEST IS DENIED.