B-168479, DEC. 31, 1969

B-168479: Dec 31, 1969

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BIDDING FORMULA TO AVOID ALL OR NONE BIDS UNDER INVITATION FOR BIDS FOR DRYDOCKING AND TOPSIDE WORK IN WHICH WORK WAS ARRANGED INTO LOTS WITH BIDS REQUIRED ON CERTAIN COMBINATIONS OF LOTS BUT RESERVING GOVERNMENT'S RIGHT TO MAKE AWARD IN ANY COMBINATION OF LOTS IN BEST INTEREST OF GOVT. LOW BIDDERS FOR DRYDOCK WORK AND FOR TOPSIDE WORK WHO DID NOT SUBMIT BIDS IN COMBINED LOTS AS REQUIRED BY INVITATION ARE RESPONSIVE BIDDERS AND MAY BE GRANTED AWARD FOR WHILE BIDS ARE IN EFFECT "ALL OR NONE" BIDS AND APPARENT PURPOSE OF COMBINATIONS OF LOTS WAS TO PRECLUDE ALL OR NONE BID. SUCH PROHIBITION UNDULY RESTRICTS COMPETITION AND IS CONTRARY TO PURPOSE OF STATUTES GOVERNING PUBLIC PROCUREMENT. SECRETARY: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 24.

B-168479, DEC. 31, 1969

BIDS--AGGREGATE V. SEPARABLE ITEMS, PRICES, ETC.--BIDDING FORMULA TO AVOID ALL OR NONE BIDS UNDER INVITATION FOR BIDS FOR DRYDOCKING AND TOPSIDE WORK IN WHICH WORK WAS ARRANGED INTO LOTS WITH BIDS REQUIRED ON CERTAIN COMBINATIONS OF LOTS BUT RESERVING GOVERNMENT'S RIGHT TO MAKE AWARD IN ANY COMBINATION OF LOTS IN BEST INTEREST OF GOVT; PRICE AND OTHER FACTORS CONSIDERED, LOW BIDDERS FOR DRYDOCK WORK AND FOR TOPSIDE WORK WHO DID NOT SUBMIT BIDS IN COMBINED LOTS AS REQUIRED BY INVITATION ARE RESPONSIVE BIDDERS AND MAY BE GRANTED AWARD FOR WHILE BIDS ARE IN EFFECT "ALL OR NONE" BIDS AND APPARENT PURPOSE OF COMBINATIONS OF LOTS WAS TO PRECLUDE ALL OR NONE BID, SUCH PROHIBITION UNDULY RESTRICTS COMPETITION AND IS CONTRARY TO PURPOSE OF STATUTES GOVERNING PUBLIC PROCUREMENT. SEE 42 COMP. GEN. 415 (1963).

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 24, 1969, FROM THE COUNSEL FOR NAVAL SHIP SYSTEMS COMMAND, DEPARTMENT OF THE NAVY, REFERENCE NUMBER 00J:CJT:GW, SER 184, REQUESTING OUR ADVICE WHETHER AWARD OF JOB ORDERS SHOULD BE MADE TO THE SECOND LOW BIDDERS UNDER INVITATION FOR BIDS NO. N63124-70-B-0007, ASSUMING THEIR BIDS ARE CONFORMING AND THE BIDDERS RESPONSIBLE.

THE IFB WAS ISSUED ON OCTOBER 17, 1969, FOR THE DRYDOCKING AND TOPSIDE INACTIVATION OF LST 983 AND LST 722. THE SOLICITATION DESCRIBED THE WORK AND ARRANGED THE WORK INTO LOTS AS FOLLOWS:

SHIP GROUP DESCRIPTION OF WORK

LST 722 A UNDERWATER (DRYDOCK)

LST 722 B TOPSIDE

LST 983 C UNDERWATER (DRYDOCK)

LST 983 D TOPSIDE

LST'S 722/983 E MISC. ITEMS

LOT ARRANGEMENT FOR BID PURPOSES:

LOT GROUP PRICE BID

I A, B, C, D

& E

II A & E

III A, B & E

IV C & E

V C, D & E

VI A, C, & E

VII B, D & E

VIII B & E

IX D & E

"IMPORTANT BIDDING INFORMATION REQUIREMENTS" OF THE SOLICITATION ARE SET FORTH IN PARAGRAPH 7A OF THE SCHEDULE. SUBPARAGRAPH (A) PROVIDES THAT:

"THE GOVERNMENT RESERVES THE RIGHT TO MAKE AWARD TO BIDDERS IN ANY COMBINATION OF LOTS I THROUGH IX AS MAY BE IN THE BEST INTERESTS OF THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED."

SUBPARAGRAPH (B) PROVIDES:

"BIDS WILL NOT BE CONSIDERED WHICH DO NOT CONTAIN THE INFORMATION CALLED FOR IN SUBPARAGRAPH (1), AND/OR WHICH ARE NOT SUBMITTED IN STRICT COMPLIANCE WITH SUBPARAGRAPH (2) AS FOLLOWS: * * *" SUBPARAGRAPH (1) REQUIRES EACH BIDDER TO INDICATE THE NUMBER OF VESSELS HE IS CAPABLE OF WORKING ON, EITHER TOPSIDE, DRYDOCK OR BOTH. SUBPARAGRAPH (2) THEN STATES:

"(2) * * * ALL BIDDERS INDICATING A CAPABILITY OF TWO SHIPS UNDER 1 (A) ABOVE (REPRESENTATION OF CAPABILITY FOR TOPSIDE WORK) MUST SUBMIT BIDS ON LOTS 8, 9 AND 7; * * * ALL BIDDERS INDICATING A CAPABILITY OF TWO SHIPS UNDER 1 (B) ABOVE (REPRESENTATION OF CAPABILITY FOR DRYDOCK WORK) MUST SUBMIT BIDS ON LOTS 2, 4, AND 6, * * *."

BIDS WERE OPENED ON OCTOBER 29, 1969. SIX BIDDERS RESPONDED. LEVINGSTON SHIPBUILDING COMPANY SUBMITTED THE LOW BID FOR LOT VI, DRYDOCK WORK ON BOTH SHIPS, BUT DID NOT SUBMIT BIDS ON LOTS II OR IV. SIMILARLY THE LOW BID ON LOT VII WAS SUBMITTED BY LOONEY SHEET METAL SHOP FOR TOPSIDE WORK, BUT NO BID WAS ENTERED FOR LOTS VIII AND IX. THE OTHER BIDDERS SUBMITTED BIDS ON THE APPROPRIATE THREE LOTS IN EACH INSTANCE.

THE QUESTION PRESENTED INVOLVES THE RESPONSIVENESS OF THE LOWEST BIDS FOR LOT VI AND LOT VII INASMUCH AS NEITHER BID COMPLIED WITH THE REQUIREMENT OF THE SOLICITATION THAT BIDS FOR LOT VI MUST BE ACCOMPANIED BY BIDS FOR LOTS II AND IV AND THAT BIDS FOR LOT VII MUST BE ACCOMPANIED BY BIDS FOR LOTS VIII AND IX.

WE ARE ADVISED THAT AWARDS HAVE BEEN MADE TO LEVINGSTON SHIPBUILDING COMPANY ON LOT VI AND TO LOONEY SHEET METAL SHOP ON LOT VII.

THE LEVINGSTON BID AND THE LOONEY SHEET METAL BID ARE, IN EFFECT, "ALL OR NONE" BIDS, THAT IS, ALL DRYDOCK WORK ON BOTH SHIPS OR NONE, AND ALL TOPSIDE WORK ON BOTH SHIPS OR NONE.

THE APPARENT PURPOSE OF REQUIRING BIDS ON LOTS II AND IV IN ADDITION TO VI AND VII AND IX IN ADDITION TO VII WAS TO PRECLUDE AN ALL OR NONE BID ON THE TOPSIDE WORK OR ON ALL OR NONE BID ON THE DRYDOCK WORK. WITH RESPECT TO AN ALL OR NONE BID PROHIBITION WE STATED AT 42 COMP. GEN. 415, 417 (1963):

"WE * * * CONCLUDE, IN THE ABSENCE OF CIRCUMSTANCES REASONABLY ESTABLISHING THAT THE INTEREST OF THE GOVERNMENT WOULD BE SERVED BY PROHIBITING THE SUBMISSION OF BIDS ON AN ALL OR NONE OR COMBINATION BASIS, THAT SUCH PROHIBITION UNDULY RESTRICTS COMPETITION AND IS CONTRARY TO THE PURPOSE OF THE STATUTES GOVERNING PUBLIC PROCUREMENT."

WE THINK THE FOREGOING RULE IS APPLICABLE WITH RESPECT TO ANY EFFORT TO PREVENT AN ALL OR NONE ONLY BID ON THE TOPSIDE WORK OR ON THE DRYDOCK WORK. TO REQUIRE A BIDDER TO INSERT BIDS ON SINGLE SHIP WORK, WHERE HIS INTEREST IS IN TWO SHIPS OR NONE, WOULD BE MEANINGLESS SINCE HE COULD, WITH IMPUNITY, INSERT UNREASONABLE PRICES IN THE SINGLE SHIP SPACES AND THUS MEET THE LITERAL REQUIREMENTS OF THE INVITATION WITHOUT ANY REAL POSSIBILITY OF AWARD ON THAT BASIS.

THIS IS NOT TO SAY THAT THE IFB MAY NOT PROPERLY PRECLUDE BIDS WHICH MAY BE ACCEPTED ONLY FOR BOTH TOPSIDE AND DRYDOCK WORK. IN SUCH SITUATIONS WE ARE AWARE THAT WHERE ONLY ONE BIDDER HAS THE ABILITY TO PERFORM EITHER THE TOPSIDE OR DRYDOCK WORK, AND HE KNOWS OF THE POSSIBILITY OF SUCH RESULT WHEN HE SUBMITS HIS BID, AN ALL OR NONE BID FOR THE ENTIRE WORK MAY FORCE THE GOVERNMENT TO AWARD THE WORK ON WHICH THERE IS COMPETITION AT AN UNREASONABLE PRICE OR TO FOREGO THAT PORTION OF THE WORK FOR WHICH NO COMPETITION EXISTS. THIS IS PRECISELY THE TYPE OF SITUATION FOR INCLUDING THE EXCEPTION TO THE GENERAL RULE IN THE QUOTED PORTION OF 42 COMP. GEN. 415.

IN VIEW OF THE ABOVE, WE CONCLUDE THE LEVINGSTON AND LOONEY BIDS WERE RESPONSIVE TO THE INVITATION AND WE PERCEIVE NO LEGAL OBJECTION TO THE AWARDS AS MADE.