B-167899, NOV. 5, 1969

B-167899: Nov 5, 1969

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INC.: REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 12. NINE OTHER ITEMS IN SUPPORT OF THE AMPLIFIERS WERE LISTED ON THE SCHEDULE. 14 BIDS WERE OPENED AND ABSTRACTED. 066.60 WAS LOW WITH THE OTHER BIDS RECEIVED RANGING FROM $392. THE CONTRACTING OFFICER DETERMINED THAT YOUR BID WAS NONRESPONSIVE AND THEREFORE REJECTED IT. IN CORRESPONDENCE TO THE PROCURING ACTIVITY AND OUR OFFICE YOU CONTEND THAT SINCE DD FORM 1423 (CONTRACT DATA REQUIREMENTS LIST) IS A PART OF THE IFB. YOUR PRICE FOR ITEM 4 WAS CLEARLY ASCERTAINABLE AND ITS OMISSION SHOULD BE WAIVED. INDICATE THAT THE ESTIMATED PRICES FILLED IN BLOCK 26 WILL NOT BE SEPARATELY USED IN THE EVALUATION OF OFFERS AND THAT THE ESTIMATED PRICES ARE.

B-167899, NOV. 5, 1969

SPECIFICATIONS--DEVIATIONS--INFORMAL V. SUBSTANTIVE FAILURE OF LOW BIDDER TO SHOW SEPARATE PRICE IN AMOUNT COLUMN OF ITEM 4 (DATA) UNDER INVITATION FOR BIDS FOR RADIO FREQUENCY AMPLIFIER AND ITEMS IN SUPPORT THEREOF CONSTITUTED MATERIAL DEVIATION WHICH COULD NOT BE WAIVED BY CONTRACTING OFFICER OR CURED BY REGARDING DD FORM 1423 ESTIMATED TOTAL PRICE AS BID PRICE FOR ITEM 4 SINCE FAILURE TO INSERT UNIT PRICE OPPOSITE ITEM 4 RAISES SERIOUS DOUBT THAT CONTRACTOR WOULD BE OBLIGATED TO FURNISH DATA REQUIRED. THEREFORE, BID MAY NOT BE CORRECTED TO MAKE IT ELIGIBLE FOR CONSIDERATION IN MAKING AWARD.

TO ASTROSPHERICS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 12, 1969, WITH ENCLOSURES, PROTESTING THE REJECTION OF YOUR BID UNDER INVITATION FOR BIDS (IFB) NO. N00024-69-B-3519, ISSUED BY THE NAVAL SHIPS SYSTEM COMMAND, DEPARTMENT OF THE NAVY, ON MAY 28, 1969.

THE IFB, AS AMENDED, DETAILED A REQUIREMENT FOR AM-4823/U, RADIO FREQUENCY PRESELECTOR AMPLIFIER LISTED AS ITEMS 1 AND 2. NINE OTHER ITEMS IN SUPPORT OF THE AMPLIFIERS WERE LISTED ON THE SCHEDULE, ITEM 4 OF WHICH STATED:

QUANTITY UNIT UNIT PRICE AMOUNT

-------- ---- ---------- ------ "DATA FOR ITEMS 1, 2, 5 AND 6 $ (SEE DD FORM 1423, EXHIBIT A HERETO) (SEE NOTE B)"

ON JULY 24, 1969, 14 BIDS WERE OPENED AND ABSTRACTED. ASTROSPHERICS' BID OF $385,066.60 WAS LOW WITH THE OTHER BIDS RECEIVED RANGING FROM $392,571 TO $1,033,593.70.

BECAUSE YOUR BID FAILED TO STATE A PRICE IN THE AMOUNT COLUMN OF ITEM 4 (DATA), THE CONTRACTING OFFICER DETERMINED THAT YOUR BID WAS NONRESPONSIVE AND THEREFORE REJECTED IT. IN CORRESPONDENCE TO THE PROCURING ACTIVITY AND OUR OFFICE YOU CONTEND THAT SINCE DD FORM 1423 (CONTRACT DATA REQUIREMENTS LIST) IS A PART OF THE IFB, THE SUM OF THE INDIVIDUAL AMOUNTS FOUND IN BLOCK 26, CAPTIONED "ESTIMATED TOTAL PRICE," OPPOSITE EACH ITEM OF REQUIRED DATA, REFLECTS THE PRICE FOR DATA CALLED FOR BY ITEM 4. AS SUCH, YOU MAINTAIN, YOUR PRICE FOR ITEM 4 WAS CLEARLY ASCERTAINABLE AND ITS OMISSION SHOULD BE WAIVED. IN ADDITION, YOU POINT OUT THAT THE INSTRUCTIONS FOR COMPLETING DD FORM 1423, APPEARING ON THE REVERSE THEREOF, INDICATE THAT THE ESTIMATED PRICES FILLED IN BLOCK 26 WILL NOT BE SEPARATELY USED IN THE EVALUATION OF OFFERS AND THAT THE ESTIMATED PRICES ARE, IN FACT, THE EFFECTIVE ITEM 4 PRICE CALLED FOR BY THE IFB.

WE CONCUR WITH THE DETERMINATION OF THE CONTRACTING OFFICER THAT YOUR BID WAS NONRESPONSIVE TO A MANDATORY REQUIREMENT OF THE IFB. NOTE "B" IN ITEM 4 OF THE IFB STATES: "NOTE B: OFFEROR TO QUOTE TOTAL PRICE FOR ITEM 4. SEE INSTRUCTIONS FOR PRICING ON THE DD FORM 1423.'

WE CONSTRUE THIS NOTE AND THE INDICATION OF A DOLLAR SIGN IN THE AMOUNT COLUMN OF ITEM 4 AS IMPOSING UPON A BIDDER THE OBLIGATION OF STATING A PRICE FOR THAT ITEM IN THE SPACE PROVIDED. APPARENTLY, THIS WAS ALSO YOUR UNDERSTANDING, SINCE IN EVERY OTHER INSTANCE YOU INSERTED A PRICE IN THE APPROPRIATE SPACE ON THE SCHEDULE.

FURTHERMORE, WE DO NOT BELIEVE THAT THE INSTRUCTIONS FOR COMPLETING DD FORM 1423 IN ANY WAY MODIFY THE ABOVE OBLIGATION. WHATEVER EFFECT OR RELEVANCE THESE INSTRUCTIONS MAY HAVE APPEARS, IN THIS INSTANCE, TO BE COMPLETELY OBVIATED BY THE PROVISION ON PAGE 15 OF THE SCHEDULE WHICH ROVIDES: "ITEM/S) ---4---: CONTRACT DATA REQUIREMENTS LIST/S) (DD FORM 1423): THE CONTRACT DATA REQUIREMENTS LIST/S), DD FORM 1423, ATTACHED HERETO, FORMS A PART OF THE SCHEDULE OF THIS CONTRACT EXCEPT FOR ANY INSTRUCTIONS AND OTHER PRINTED MATTER THAT MAY APPEAR ON THE REVERSE SIDE OF SAID FORM. * * *"

CLEARLY, THE INTENT OF THIS PROVISION WAS TO NEGATE THE OPERATIVE EFFECT OF THE OBLIGATIONS AND ASSURANCES FOUND IN THE INSTRUCTION SECTION ON THE REVERSE OF DD FORM 1423 AND TO RELEGATE THE PERTINENCE OF THE INSTRUCTION TO ONLY THE COMPLETION OF THE FORM AND NO FURTHER.

IN B-161576, JULY 13, 1967, AN IFB PROVISION SPECIFICALLY REQUIRED THE BIDDER TO BID ON FOUR SEPARATE ITEMS OF DATA. IN REACHING THE CONCLUSION THAT HIS FAILURE TO SO BID RESULTED IN THE REJECTION OF THE BID AS NONRESPONSIVE, WE DISCUSSED THE LEGAL CONSEQUENCES OF PRICES FOUND IN BLOCK 26 OF DD FORM 1423 AND THOSE REQUIRED BY THE IFB TO BE INSERTED OPPOSITE EACH OF THE FOUR DATA ITEMS. AS WE BELIEVE THAT DISCUSSION APPLIES WITH EQUAL VALIDITY AND EFFECT TO THE PRESENT SITUATION, IT IS SET OUT BELOW:

"YOU CONTEND, HOWEVER, THAT THE PRICES OF ITEMS 2 THROUGH 5 COULD NOT HAVE BEEN CONSIDERED SEPARATELY IN BID EVALUATION, AND THAT THE INVITATION DID NOT MAKE THE PRICING OF THESE ITEMS MANDATORY. YOU BASE THE FORMER OBSERVATION ON THE ASSUMED IDENTITY OF DATA PRICING INFORMATION REQUESTED IN ITEMS 2 THROUGH 5 AND THAT REQUIRED IN BLOCK 26 OF DD FORM 1423. HOWEVER, IT WOULD APPEAR THAT THE LATTER ARE ESTIMATED PRICES WHICH ARE NOT TO BE USED FOR BID EVALUATION PURPOSES WITHOUT FURTHER ANALYSIS' BECAUSE OF THE VARIED METHODS CONTRACTORS MAY USE IN DETERMINING THESE COSTS, AND PRESUMABLY SINCE BIDDERS HAVE THE OPTION TO INCREASE OR DECREASE THE AMOUNT ESTIMATED. SEE DEPARTMENT OF DEFENSE INSTRUCTION 5010.12, ENCLOSURE 5, PARAGRAPH 2 (B), SEPTEMBER 22, 1965. WHILE THE DATA PRICES REQUIRED IN ITEMS 2 THROUGH 5 MIGHT REFLECT THE SAME COSTS DETAILED IN BLOCK 26 OF DD FORM 1423 FROM AN ACCOUNTING VIEWPOINT, IT APPEARS THAT THE PROVISIONS MUST BE VIEWED DIFFERENTLY FROM A LEGAL VIEWPOINT, SINCE THE EFFECT OF INSERTING PRICES OPPOSITE ITEMS 2 THROUGH 5 WOULD OBLIGATE THE CONTRACTOR TO FURNISH THE DATA AT THE LISTED PRICES, AND SUCH PRICES COULD THEREFORE BE USED FOR BID EVALUATION PURPOSES. IF THIS WERE NOT THE CASE ITEMS 2 THROUGH 5 WOULD BE SURPLUSAGE, MERELY REPEATING THE ESTIMATED PRICES LISTED IN BLOCK 26 WITHOUT ANY OTHER PURPOSE, AND THE PROVISION REQUIRING INSERTION OF DATA PRICES FOLLOWING ITEM 5 WOULD NOT BE GIVEN ANY MEANING AS A METHOD OF DENOTING A DIFFERENT USE OF THIS INFORMATION FROM THAT REQUIRED ON DD FORM 1423. IT IS WELL ESTABLISHED THAT AN INTERPRETATION WHICH GIVES REASONABLE MEANING TO ALL PARTS OF AN INSTRUMENT WILL BE PREFERRED TO ONE WHICH LEAVES PORTIONS OF IT SUPERFLUOUS. HOL-GAR MANUFACTURING CORP. V UNITED STATES, 351 F.2D 972 (1965); 4 WILLISTON CONTRACTS, SEC. 619 AT 731 (3RD ED. 1961). CONSEQUENTLY, WE MUST CONSTRUE THE ABOVE REFERENCED PROVISIONS (ITEMS 2 THROUGH 5) AS INSERTED FOR PURPOSES OTHER THAN THOSE REQUIRING THE INSERTION OF PRICES IN DD FORM 1423. THE ONLY OTHER PURPOSE WHICH CAN REASONABLY BE SEEN UNDER THE CIRCUMSTANCES IS TO REQUIRE THE BIDDER TO BE LEGALLY OBLIGATED TO FURNISH THE DATA AT FIRM PRICES WHICH COULD ALSO BE USED FOR BID EVALUATION PURPOSES.'

IN SHORT, THE TWO SETS OF PRICES, INDIVIDUALLY OR COLLECTIVELY, ARE NOT THE SAME. ONE IS AN ESTIMATE ONLY, IMPOSING NO FIXED COST OBLIGATION ON THE BIDDER WHILE THE OTHER IS FIXED AND CLEARLY INDICATES AN OBLIGATION ON THE PART OF THE BIDDER TO FURNISH THE ITEM AT HIS BID PRICE THEREFOR. BEYOND THIS, BIDDERS WERE ALSO ADVISED BY THE IFB THAT: "AWARD WILL BE MADE ONLY TO ONE OFFEROR FOR ALL UNITS OF ITEMS 1 AND 2, 4 THRU 7AD, AND FOR ITEM 3 SUBJECT TO EXERCISE OF OPTION FOR ELECTRONIC REPAIR PARTS. OFFERS, THEREFORE, MUST BE ON THE BASIS OF FURNISHING (I) ALL UNITS OF ITEMS 1 AND 2, 4 THRU 7AD AND (II) SUBJECT TO EXERCISE OF OPTION FOR ELECTRONIC REPAIR PARTS, ITEM 3.'

THE OBLIGATION TO FURNISH SUCH ITEMS IS, HOWEVER, CONTINGENT UPON THE INSERTION OF PRICES IN THE APPROPRIATE PLACES AS EVIDENCED BY THE TERMS OF THE OFFER CLAUSE FOUND ON THE FACESHEET OF STANDARD FORM 33, SOLICITATION, OFFER AND AWARD. THE OFFER CLAUSE STATES: "IN COMPLIANCE WITH THE ABOVE, THE UNDERSIGNED OFFERS AND AGREES, IF THIS OFFER IS ACCEPTED WITHIN ------ -- CALENDAR DAYS * * * FROM THE DATE OF RECEIPT OF OFFERS SPECIFIED ABOVE, TO FURNISH ANY OR ALL ITEMS UPON WHICH PRICES ARE OFFERED, AT THE PRICE SET OPPOSITE EACH ITEM, DELIVERED AT THE DESIGNATED POINT/S), WITHIN THE TIME SPECIFIED IN THE SCHEDULE.'

IN VIEW OF THESE PROVISIONS, YOUR FAILURE TO QUOTE A PRICE FOR ITEM 4 RAISES SERIOUS DOUBT THAT YOU WOULD BE OBLIGATED TO FURNISH THE DATA REQUIRED. SEE B-161576, SUPRA. UNDER THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT YOUR FAILURE TO INSERT A PRICE FOR ITEM 4 MAY BE WAIVED AS A MINOR INFORMALITY OR BID IRREGULARITY WITHIN THE PREVIEW OF PARAGRAPH 2- 405 OF THE ARMED SERVICES PROCUREMENT REGULATION. THAT REGULATION PROVIDES IN PERTINENT PART AS FOLLOWS:

"* * * A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS, HAVING NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, OR DELIVERY OF THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED, AND THE CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF, OR BE OTHERWISE PREJUDICIAL TO, BIDDERS. THE CONTRACTING OFFICER SHALL EITHER GIVE TO THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID, OR, WAIVE ANY SUCH DEFICIENCY WHERE IT IS TO THE ADVANTAGE OF THE GOVERNMENT. * * *"

SINCE WE HOLD THAT THE FAILURE TO INSERT A PRICE FOR ITEM 4 CONSTITUTED A MATERIAL DEVIATION, IT MAY NOT BE WAIVED OR CURED BY REGARDING THE DD FORM 1423 ESTIMATED TOTAL PRICES AS THE BID PRICE FOR ITEM 4. SEE 41 COMP. GEN. 412 (1961); B-163756, APRIL 15, 1968; B 162793, JANUARY 18, 1968. THEREFORE, YOUR BID MAY NOT BE CORRECTED AS TO ITEM 4 SO AS TO MAKE IT ELIGIBLE FOR CONSIDERATION IN MAKING AN AWARD UNDER THE IFB. SEE 46 COMP. GEN. 434, 435 (1966).