B-168633, DEC 29, 1970, 50 COMP GEN 447

B-168633: Dec 29, 1970

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THE CANCELLATION OF AN AWARD TO THE SECOND LOW BIDDER TO AWARD A CONTRACT TO THE LOW BIDDER WHOSE AGGREGATE FIRM BID CONFORMING TO BID INSTRUCTIONS THAT WERE OVERLOOKED IN THE EVALUATION PROCESS WAS DISPLACED BY THE ERRONEOUS APPLICATION OF THE UNIT PRICE RULE TO ESTIMATED DATA PRICES. WERE PROPER ADMINISTRATIVE ACTIONS. SINCE THE AUTHORITY TO ISSUE STOP ORDERS IS NOT DEPENDENT ON A CONTRACT PROVISION BUT ON WHETHER THE ACTION IS NECESSARY IN THE INTEREST OF THE GOVERNMENT. CANCELLATION OF THE AWARD WAS LEGALLY PERMISSIBLE. BIDS - EVALUATION - DELIVERY PROVISIONS - PARCEL POST COSTS WHEN A PROCUREMENT ITEM IS SHIPPED BY PARCEL POST UNDER GOVERNMENT MAILING INDICIA PURSUANT TO PARAGRAPH 19-403.3(A) OF THE ARMED SERVICES PROCUREMENT REGULATION.

B-168633, DEC 29, 1970, 50 COMP GEN 447

CONTRACTS - AWARDS - CANCELLATION - ERRONEOUS AWARDS - BID EVALUATION ERROR THE ISSUANCE OF A STOP ORDER PENDING RESOLUTION OF A BID PROTEST, AND THE CANCELLATION OF AN AWARD TO THE SECOND LOW BIDDER TO AWARD A CONTRACT TO THE LOW BIDDER WHOSE AGGREGATE FIRM BID CONFORMING TO BID INSTRUCTIONS THAT WERE OVERLOOKED IN THE EVALUATION PROCESS WAS DISPLACED BY THE ERRONEOUS APPLICATION OF THE UNIT PRICE RULE TO ESTIMATED DATA PRICES, WERE PROPER ADMINISTRATIVE ACTIONS, NOTWITHSTANDING THE CONTRACT DID NOT PROVIDE FOR STOP ORDERS, SINCE THE AUTHORITY TO ISSUE STOP ORDERS IS NOT DEPENDENT ON A CONTRACT PROVISION BUT ON WHETHER THE ACTION IS NECESSARY IN THE INTEREST OF THE GOVERNMENT, AND THE PROCUREMENT SUBJECT TO THE STATUTORY REQUIREMENT THAT AWARD BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, THE ERRONEOUS AWARD WHICH DID NOT INVOLVE THE EXERCISE OF ANY AUTHORIZED DISCRETION DID NOT CREATE A BINDING CONTRACT, AND CANCELLATION OF THE AWARD WAS LEGALLY PERMISSIBLE. CONTRACTS - PERFORMANCE - STOP ORDERS WHILE PARAGRAPH 2-407.8(C) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT A CONTRACTING OFFICER SEEK A MUTUAL AGREEMENT WITH A SUCCESSFUL BIDDER TO SUSPEND PERFORMANCE OF A CONTRACT ON A NO COST BASIS WHEN IT APPEARS LIKELY THAT AN AWARD MAY BE INVALIDATED AND DELAY RECEIPT OF SUPPLIES AND SERVICES, IT DOES NOT BAR THE ISSUANCE OF A STOP ORDER IN THE EVENT THE CONTRACTOR DECLINES TO COOPERATE WITH THE CONTRACTING AGENCY. BIDS - EVALUATION - DELIVERY PROVISIONS - PARCEL POST COSTS WHEN A PROCUREMENT ITEM IS SHIPPED BY PARCEL POST UNDER GOVERNMENT MAILING INDICIA PURSUANT TO PARAGRAPH 19-403.3(A) OF THE ARMED SERVICES PROCUREMENT REGULATION, TRANSPORTATION COSTS AS A BID EVALUATION FACTOR ARE ELIMINATED, EVEN THOUGH EVENTUALLY THE CONTRACTING AGENCY IS REQUIRED TO REIMBURSE THE POST OFFICE DEPARTMENT FOR THE POSTAL SERVICES. BIDS - EVALUATION - FACTORS OTHER THAN PRICE - NOTICE OF FACTORS TO BIDDERS THE USE OF THE PHRASE "OTHER FACTORS CONSIDERED" PURSUANT TO PARAGRAPH 2- 407.1 OF THE ARMED SERVICES PROCUREMENT REGULATION, IMPLEMENTING 10 U.S.C. 2305, DOES NOT AUTHORIZE THE AWARD OF CONTRACTS UNDER ADVERTISED PROCUREMENTS TO OTHER THAN THE LOW, RESPONSIVE, QUALIFIED BIDDER; AND WHEN BIDS ARE TO BE EVALUATED ON SOME BASIS IN ADDITION TO PRICE, IT IS REQUIRED THAT THOSE ADDITIONAL FACTORS AND THE RELATIVE IMPORTANCE TO BE ATTACHED TO EACH FACTOR BE CLEARLY STATED IN THE INVITATION SO ALL BIDDERS ARE AWARE OF THE FACTORS IN THE PREPARATION OF THEIR BIDS.

TO THE BRUNO-NEW YORK INDUSTRIES CORPORATION, DECEMBER 29, 1970:

WE REFER TO YOUR PROTEST BY TELEGRAM DATED APRIL 2, 1970, AS SUPPLEMENTED BY CORRESPONDENCE FROM YOUR ATTORNEYS, AGAINST THE CANCELLATION BY THE DEPARTMENT OF THE AIR FORCE OF YOUR CONTRACT F33657 70-C-0551 AND THE AWARD OF ANOTHER CONTRACT FOR THE SAME REQUIREMENTS TO UNION INSTRUMENT CORPORATION (UNION).

THE PROCUREMENT WAS ADVERTISED UNDER INVITATION FOR BIDS (IFB) F33657 70- B-0013, ISSUED SEPTEMBER 8, 1969, BY AIR FORCE SYSTEMS COMMAND (AFSC), WRIGHT-PATTERSON AIR FORCE BASE, OHIO. THE PROCUREMENT ITEMS WERE TYPE C- 3491/ARN-58 CONTROL RECEIVERS, ON WHICH BIDS WERE REQUESTED ON QUANTITIES STATED IN FOUR INCREMENTS. IN ADDITION, BIDDERS WERE REQUESTED TO FURNISH DATA UNDER ITEM 2, WHICH READ AS FOLLOWS:

DATA IN ACCORDANCE WITH DD FORM 1423, DESIGNATED EXHIBIT "A" ATTACHED HERETO AND HEREBY MADE A PART HEREOF. THE PRICE SET FORTH IN THE DD FORM 1423 FOR THE DATA IS EXCLUSIVE OF THE DATA DESCRIBED IN PARAGRAPHS 2D(1) AND (2) OF NOTE ON PAGES 14 AND 15 THEREOF.

DD FORM 1423, OF WHICH THERE WERE 10 PAGES, LISTED VARIOUS DATA ITEMS AND PROVIDED SPACE FOR ENTRY OF CERTAIN INFORMATION ON EACH ITEM. BLOCK 25 CALLED FOR DESIGNATION OF PRICE GROUP (IDENTIFICATION OF THE PARTICULAR ITEM BY GROUPS AS SET FORTH IN INSTRUCTIONS ON THE BACK OF THE FORM), AND BLOCK 26 CALLED FOR AN ESTIMATED TOTAL PRICE FOR EACH ITEM. AN UNNUMBERED BLOCK FOR ENTRY OF THE SUM OF ALL ESTIMATED TOTAL PRICES WAS LABELED "CONTRACT VALUE."

THE INSTRUCTIONS FOR COMPLETING THE FORM INCLUDED THE FOLLOWING PERTINENT LANGUAGE:

2. THE CONTRACTOR AGREES THAT, REGARDLESS OF WHETHER HE HAS MADE ANY ENTRIES IN ITEMS 25 AND 26, AND REGARDLESS OF WHAT THOSE ENTRIES ARE, HE IS OBLIGATED TO DELIVER ALL THE DATA LISTED HEREON, AND THE PRICE HE IS TO BE PAID THEREFOR IS INCLUDED IN THE TOTAL PRICE SPECIFIED IN THIS CONTRACT.

3. THE ESTIMATED PRICES FILED IN ITEM 26 WILL NOT BE SEPARATELY USED IN EVALUATION OF OFFERS.

5. EACH OFFEROR SHALL COMPLETE ITEMS 25 AND 26 IN ACCORDANCE WITH THE FOLLOWING INSTRUCTIONS (THIS DOES NOT APPLY TO ADVERTISED CONTRACTS OR TO NEGOTIATED CONTRACTS UNDER $100,000).

ITEM 26. ESTIMATED TOTAL PRICE.

A. FOR EACH ITEM OF DATA LISTED THE BIDDER OR OFFEROR SHALL ENTER AN AMOUNT EQUAL TO THAT PORTION OF THE TOTAL PRICE WHICH IS ESTIMATED TO BE ATTRIBUTABLE TO THE PRODUCTION OR DEVELOPMENT FOR THE GOVERNMENT OF THAT ITEM OF DATA. THESE ESTIMATED DATA PRICES SHALL BE DEVELOPED ONLY FROM THOSE COSTS WHICH WILL BE INCURRED AS A DIRECT RESULT OF THE REQUIREMENT TO SUPPLY THE DATA, OVER AND ABOVE THOSE COSTS WHICH WOULD OTHERWISE BE INCURRED IN PERFORMANCE OF THE CONTRACT IF NO DATA WERE REQUIRED.

THE NOTE ON PAGES 14 AND 15 OF THE IFB, TO WHICH ITEM 2 MADE REFERENCE, WAS ENTITLED "DATA APPLICABILITY AND DATA PRICING," AND IT ADVISED BIDDERS THAT THE TOTAL PRICE OF ALL DATA OR A PROPER RESPONSE SHOULD BE ENTERED ON THE LAST PAGE OF THE DD FORM 1423 EXHIBIT IN THE "CONTRACT VALUE" BLOCK AND THAT THE SAME ENTRY SHOULD BE INSERTED IN THE "AMOUNT" COLUMN OF THE SCHEDULE DATA ITEM (ITEM 2). PARAGRAPH 2.D.(1) AND (2) OF THE NOTE PROVIDED FOR NEGOTIATION OF THE PRICE OF NEW AND/OR REVISED DATA INCIDENT TO CERTAIN CHANGES AND THE PRICE OF DOCUMENTATION REQUIRED FOR PROVISIONING SPARE PARTS AT THE TIME OF NEGOTIATION OF THE CHANGE OR THE TIME OF ESTABLISHMENT OF THE REQUIREMENT FOR SPARE PARTS. THE DATA ITEMS RELATED TO PROVISIONING SPARE PARTS WERE NOS. A015, A016, AND A017 ON PAGE 6 OF DD FORM 1423.

ON PAGE 17 OF THE BID SCHEDULE, BIDDERS WERE INFORMED THAT OFFERS SUBMITTED ON A BASIS OTHER THAN F.O.B. ORIGIN WOULD BE REJECTED AS NONRESPONSIVE. ON PAGE 18, BIDDERS WERE ADVISED THAT FOR THE PURPOSE OF EVALUATING BIDS, AND FOR NO OTHER PURPOSE, THE FINAL DESTINATION FOR THE SUPPLIES WOULD BE CONSIDERED TO BE FORT WORTH, TEXAS.

PARAGRAPH I OF THE GENERAL PROVISIONS ON PAGE 38 OF THE BID SCHEDULE PROVIDED THAT WHEN DELIVERY WAS TO BE MADE ON OTHER THAN AN F.O.B. DESTINATION OR A FREIGHT PREPAID BASIS, THE SHIPMENTS WOULD BE MADE ON GOVERNMENT BILLS OF LADING OR GOVERNMENT MAILING INDICIA. SUBPARAGRAPH (B) SPECIFICALLY PROVIDED FOR THE USE OF GOVERNMENT MAILING INDICIA IN LIEU OF GOVERNMENT BILLS OF LADING WHEN THE WEIGHT, CUBE, AND CHARACTER OF THE COMMODITY PERMITS MOVEMENT WITHIN THE UNITED STATES POSTAL SYSTEM. SUBPARAGRAPH (C) STATED AN AGREEMENT ON THE PART OF THE CONTRACTOR THAT NO MAILING CHARGE IS, OR WILL BE, INCLUDED IN THE COST/PRICE FOR POSTAGE FEES IN THOSE INSTANCES WHEREIN GOVERNMENT MAILING INDICIA IS AUTHORIZED AND USED.

AMONG VARIOUS FORMS INCORPORATED IN THE IFB TERMS WAS STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS, PARAGRAPH 2(C) OF WHICH, RELATING TO PREPARATION OF OFFERS, READS AS FOLLOWS:

UNIT PRICE FOR EACH UNIT OFFERED SHALL BE SHOWN AND SUCH PRICE SHALL INCLUDE PACKING UNLESS OTHERWISE SPECIFIED. A TOTAL SHALL BE ENTERED IN THE AMOUNT COLUMN OF THE SCHEDULE FOR EACH ITEM OFFERED. IN CASE OF DISCREPANCY BETWEEN A UNIT PRICE AND EXTENDED PRICE, THE UNIT PRICE WILL BE PRESUMED TO BE CORRECT, SUBJECT, HOWEVER, TO CORRECTION TO THE SAME EXTENT AND IN THE SAME MANNER AS ANY OTHER MISTAKE.

BIDS WERE OPENED ON OCTOBER 8, 1969, AS SCHEDULED. UNION'S BID OF $35.05 PER UNIT AND $2,025 FOR ITEM 2, WITH FIRST ARTICLE APPROVAL REQUIRED, WAS LOWEST AT $9,490.65 ON THE 213 UNITS PROCURED. YOUR BID OF $44.65 PER UNIT WITH NO SEPARATE CHARGE FOR ITEM 2, THE COST OF WHICH WAS INCLUDED IN ITEM 1, AND WITH FIRST ARTICLE APPROVAL NOT REQUIRED, WAS SECOND-LOW AT $9,510.45 ON THE 213 UNITS.

EXAMINATION OF THE FORM DD 1423 EXECUTED BY UNION SHOWED THAT THE TOTAL OF ALL THE PRICES ENTERED IN BLOCK 26 FOR EACH OF THE DATA ITEMS AMOUNTED TO $2,065, OR $40 MORE THAN THE AMOUNT OF $2,025 ENTERED BY UNION IN THE "CONTRACT VALUE" BLOCK ON THE LAST PAGE OF FORM DD 1423 AND ALSO ENTERED AS THE PRICE OF ITEM 2 IN THE BID SCHEDULE.

THE CONTRACTING OFFICER, ACTING ON THE ASSUMPTION THAT THE UNIT PRICE RULE QUOTED ABOVE FROM STANDARD FORM 33A APPLIED TO THE DATA ITEMS ON DD FORM 1423, CORRECTED THE CONTRACT VALUE FIGURE ON THE LAST PAGE OF THE FORM TO $2,045 AFTER ELIMINATING THE AMOUNT OF $20 QUOTED ON ITEM AO17, THE PRICE OF WHICH IS SUBJECT TO NEGOTIATION AT THE TIME OF ESTABLISHMENT OF THE REQUIREMENTS FOR SPARE PARTS. THE CORRECTION BROUGHT UNION'S BID PRICE UP TO $9,510.65 OR 20 CENTS HIGHER THAN YOUR EVALUATED PRICE OF $9,510.45. AWARD WAS THEREFORE MADE TO YOU AS THE LOW BIDDER ON DECEMBER 3, 1969, AND NOTICE OF SUCH ACTION WAS GIVEN TO UNION BY LETTER DATED DECEMBER 4.

IN A TELEGRAM DATED DECEMBER 11, UNION NOTIFIED THE PROCURING ACTIVITY OF ITS INTENT TO LODGE A FORMAL PROTEST, AND COPIES OF ITS PROTEST LETTER OF THE SAME DATE WERE FURNISHED BY UNION TO AFSC AND TO OUR OFFICE.

UNION'S PROTEST LETTER STATED THAT THE DECEMBER 4 AWARD NOTICE WAS NOT RECEIVED BY UNION UNTIL DECEMBER 11, FOLLOWING WHICH UNION COMMUNICATED BY TELEPHONE WITH THE PROCURING ACTIVITY AND WAS INFORMED THAT THE BID PRICE HAD BEEN CHANGED BY THE CONTRACTING OFFICER TO CORRECT WHAT WAS REGARDED BY THE PROCURING ACTIVITY AS A MISTAKE IN BID WHICH CAME UNDER THE UNIT PRICE RULE STATED IN STANDARD FORM 33A. THE CORRECTION, IT WAS EXPLAINED, INVOLVED CHANGING THE PRICE QUOTED BY UNION IN ITS BID SCHEDULE ON ITEM 2, AND ALSO SHOWN ON THE LAST PAGE OF DD FORM 1423 AS THE "CONTRACT VALUE," TO CORRESPOND WITH THE ACTUAL TOTAL OF THE ESTIMATED PRICES ENTERED IN BLOCK 26 ON DD FORM 1423 FOR VARIOUS DATA ITEMS.

UNION PROTESTED THAT THE CORRECTION WAS NOT IN ORDER. IN THIS CONNECTION, UNION MAINTAINED THAT THE PRICE QUOTED FOR ITEM 2 IN THE BID SCHEDULE WAS A FIRM PRICE, WHEREAS THE VARIOUS FIGURES ENTERED IN BLOCK 26 ON THE DD FORM 1423 WERE ONLY ESTIMATES. AS SUPPORT FOR ITS POSITION, UNION CITED THE PROVISIONS OF PARAGRAPHS 2 AND 3 OF THE INSTRUCTIONS ON DD FORM 1423 CONCERNING THE CONTRACTOR'S OBLIGATION TO FURNISH REQUIRED DATA AT THE PRICE INCLUDED IN ITS BID AND PRECLUDING THE USE OF THE ESTIMATED PRICES IN BLOCK 26 FOR EVALUATION PURPOSES. UNION THEREFORE REQUESTED THAT THE CONTRACT WHICH HAD BEEN AWARDED TO YOU BE NULLIFIED AND THAT A NEW CONTRACT BE ISSUED TO UNION, AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER.

IN VIEW OF UNION'S PROTEST, THE CONTRACTING OFFICER WIRED THE FOLLOWING MESSAGE TO YOU ON DECEMBER 22, 1969:

A FORMAL PROTEST HAS BEEN LODGED AGAINST THE AWARD ON IFB F33657-70-B 0013. YOU ARE HEREBY ORDERED TO STOP WORK ON CONTRACT F33657-70-C-0551 UNTIL A RESOLUTION OF SUBJECT PROTEST HAS BEEN MADE.

UNION'S PROTEST BEFORE THIS OFFICE WAS ALSO WITHDRAWN ON THAT DATE, SUBJECT TO BEING REINSTATED IF THE FINAL ACTION BY THE AIR FORCE WAS UNFAVORABLE TO THAT FIRM.

THE CONTRACTING OFFICER, AFTER REVIEWING THE TERMS OF THE IFB AND THE INSTRUCTIONS ON THE BACK OF DD FORM 1423, WHICH HAD NOT BEEN CONSIDERED IN THE EVALUATION OF UNION'S BID, CONCLUDED THAT THE ESTIMATED DATA PRICES SHOULD NOT HAVE BEEN AN EVALUATION FACTOR; THAT UNION'S BID WAS ACTUALLY LOWER; AND THAT THE AWARD TO YOU WAS IMPROPER. HOWEVER, IN LIGHT OF INFORMATION FURNISHED BY YOU, IN A TELEPHONE CONVERSATION OF DECEMBER 21 WITH THE AFSC BUYER AND CONFIRMED BY YOUR LETTER OF JANUARY 6, 1970, TO THE EFFECT THAT PRIOR TO THE ISSUANCE OF THE STOP WORK ORDER YOU HAD EXPENDED $6,000 TOWARDS PERFORMANCE OF THE CONTRACT, THE CONTRACTING OFFICER RECOMMENDED TO THE HEAD OF THE PROCURING ACTIVITY THAT THE AWARD NOT BE DISTURBED. THE MATTER WAS SUBSEQUENTLY SUBMITTED TO HEADQUARTERS UNITED STATES AIR FORCE (USAF) WITH A MEMORANDUM WHICH STATED THAT YOU HAD NOT BEGUN ACTUAL PRODUCTION ON THE CONTRACT.

HEADQUARTERS USAF REVIEWED THE PROCUREMENT; CONCLUDED THAT UNION WAS THE LOWEST BIDDER AND THEREFORE THE AWARD TO YOU WAS ILLEGAL; AND RECOMMENDED TO THE PROCURING ACTIVITY THAT AWARD BE GIVEN TO UNION PROVIDED UNION WAS DETERMINED TO BE A RESPONSIBLE BIDDER. FOLLOWING A FAVORABLE PREAWARD SURVEY OF UNION AND A DETERMINATION THAT IT WAS A RESPONSIBLE BIDDER, THE CONTRACTING OFFICER NOTIFIED YOU ON MARCH 17, 1970, THAT YOU WERE NOT THE LOW BIDDER UNDER THE IFB AND YOUR CONTRACT WAS THEREFORE CANCELED. ON THE SAME DATE, CONTRACT F33657-70-C-0923 WAS AWARDED TO UNION FOR THE PROCUREMENT REQUIREMENT AT ITS CORRECT BID PRICE OF $9,490.65.

YOU COMPLAIN THAT THE DEPARTMENT OF THE AIR FORCE HAS NOT COMPLIED WITH THE PROCEDURES PRESCRIBED IN ASPR WITH RESPECT TO THE NOTICE ISSUED TO YOU REGARDING UNION'S PROTEST, WHICH DID NOT STATE THE BASIS FOR THE PROTEST. FURTHER, YOU CLAIM THAT THE DEPARTMENT HAD NO AUTHORITY TO "BYPASS" OUR OFFICE AND ADMINISTRATIVELY RESOLVE THE PROTEST IN VIEW OF ITS FILING WITH OUR OFFICE. IN ADDITION, YOU STATE THAT BY FAILING TO SOLICIT YOUR VIEWS ON THE PROTEST AND TO TRANSMIT THEM TO OUR OFFICE FOR CONSIDERATION, THE DEPARTMENT VIOLATED ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2- 407.8(A)(3).

AS STATED ABOVE, UNION'S PROTEST WAS WITHDRAWN FROM OUR OFFICE ON DECEMBER 22, 1969, AND AT THE TIME THE MATTER WAS RESOLVED BY CANCELLATION OF YOUR CONTRACT AND ISSUANCE OF A CONTRACT TO UNION, THERE WAS NO PROTEST BEFORE OUR OFFICE FOR CONSIDERATION. IT SHOULD ALSO BE NOTED THAT ASPR 2- 407.8(A)(3), WHICH YOU CITE, WAS NOT EFFECTIVE UNTIL AFTER UNION'S PROTEST WAS ADMINISTRATIVELY RESOLVED, AND THE REGULATIONS APPLICABLE TO THE PROTEST (ASPR 2-407.9(C) AS SUPPLEMENTED BY THE AIR FORCE) DID NOT REQUIRE THE ACTIONS WHICH YOU SAY THE AIR FORCE SHOULD HAVE TAKEN. IN THE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT THE DEPARTMENT VIOLATED ANY PERTINENT REGULATIONS IN ITS HANDLING OF UNION'S PROTEST. IN ANY EVENT, IT IS APPARENT THAT YOU HAD AMPLE TIME, AFTER YOU WERE NOTIFIED OF UNION'S PROTEST IN THE CONTRACTING OFFICER'S WIRE OF DECEMBER 22, TO INQUIRE INTO THE NATURE OF THE PROTEST AND TO REGISTER A PROTEST WITH THE CONTRACTING OFFICER OR HIS OFFICE AGAINST ANY ADMINISTRATIVE DECISION WHICH WOULD BE ADVERSE TO YOUR CONTRACT.

YOU RAISE TWO QUESTIONS CONCERNING THE RESPONSIVENESS OF UNION'S BID. FIRST, YOU STATE THAT YOU BID F.O.B. ORIGIN, AS REQUIRED BY THE IFB, WHEREAS AN ABSTRACT OF BIDS PREPARED BY A COMMERCIAL BID SERVICE INDICATES THAT UNION BID ON AN F.O.B. DESTINATION BASIS. SECOND, YOU CLAIM THAT UNION, BY FILLING IN BLOCKS 25 AND 26 ON THE DD FORM 1423 CONTRARY TO THE INSTRUCTIONS ON THE FORM, CAUSED A BID DEVIATION WHICH SHOULD NOT HAVE BEEN WAIVED, SINCE SUCH ACTION WAS PREJUDICIAL TO YOU.

AN EXAMINATION OF A COPY OF UNION'S BID DISCLOSES NO INDICATION THAT THE BID WAS ON AN F.O.B. DESTINATION BASIS. IN EXECUTING PARAGRAPH A, F.O.B. POINT, ON PAGE 17 OF THE SCHEDULE, UNION CLEARLY DESIGNATED ITS PLANT AT PLAINFIELD, NEW JERSEY, AS THE F.O.B. DELIVERY POINT AND THE PLACE OF FINAL INSPECTION AND ACCEPTANCE OF THE EQUIPMENT.

AS TO THE EFFECT OF UNION'S COMPLETION OF ITEMS 25 AND 26 ON DD FORM 1423, THE INTERPRETATION TO BE PLACED ON THE INFORMATION SO FURNISHED MUST BE BASED ON THE WORDING OF THE FORM AND THE IFB AS A WHOLE. 39 COMP. GEN. 17 (1959); ID. 247 (1959). UNDER THE TERMS QUOTED ABOVE FROM DD FORM 1423, NOT ONLY WERE THE ENTRIES IN BLOCK 26 MERE ESTIMATES WHICH WERE NOT TO BE CONSIDERED IN THE EVALUATION OF BIDS, BUT BIDDERS WERE BOUND TO THE PRICE INCLUDED IN THE CONTRACT FOR THE FURNISHING OF DATA REGARDLESS OF THE ENTRIES IN BLOCK 26. FURTHER, THE INSTRUCTIONS ON PAGE 14 AND 15 OF THE IFB REQUIRING THAT THE TOTAL PRICE FOR ALL DATA BE ENTERED ON THE LAST PAGE OF DD FORM 1423 IN THE "CONTRACT VALUE" BLOCK AND THAT THE SAME ENTRY BE MADE IN THE BID SCHEDULE FOR THE DATA ITEM, WITH WHICH UNION COMPLIED, LEFT NO DOUBT THAT IT WAS THIS PRICE TO WHICH THE BIDDER WOULD BE HELD FOR THE FURNISHING OF THE REQUIRED DATA. THE ENTRY BY UNION, THEREFORE, OF PRICES IN BLOCK 26 ON DD FORM 1423 DID NOT, IN OUR VIEW, CONSTITUTE A DEVIATION WHICH REQUIRED A WAIVER BY THE CONTRACTING OFFICER UNDER THE MINOR DEVIATIONS AND MINOR INFORMALITIES PROVISIONS OF ASPR 2-405.

THE UNIT PRICE PROVISIONS IN STANDARD FORM 33A, IT IS TO BE NOTED, RELATE TO ITEMS IN THE BID SCHEDULE OF WHICH MORE THAN ONE UNIT IS TO BE PURCHASED, AND THEY ARE INVOKED WHEN THERE IS A DISCREPANCY BETWEEN THE UNIT PRICE QUOTED IN THE SCHEDULE AND THE TOTAL PRICE ALSO QUOTED IN THE SCHEDULE FOR THE NUMBER OF UNITS OF THE ITEM INVOLVED. CLEARLY, SUCH PROVISIONS MAY NOT BE EMPLOYED TO CHANGE THE PRICE OF AN ITEM SUCH AS ITEM 2 IN THE IFB IN QUESTION, WHICH CALLS FOR A LUMP SUM PRICE FOR THE ITEM.

IN LINE WITH THE FOREGOING, WE CONCUR WITH THE ULTIMATE CONCLUSION OF THE PROCURING ACTIVITY THAT THE DATA PRICE LISTED IN UNION'S BID AND ALSO ENTERED IN THE "CONTRACT VALUE" BLOCK OF THE LAST PAGE OF DD FORM 1423 WAS THE ONLY PRICE APPLICABLE TO ITEM 2 IN THE BID SCHEDULE.

YOU ALSO PLACE IN ISSUE THE MATTER OF WHETHER TRANSPORTATION COSTS WERE CONSIDERED IN THE EVALUATION OF THE BIDS IN ACCORDANCE WITH THE PROVISIONS OF ASPR 19-301.

THE FILE ON THIS PROCUREMENT INCLUDES A MEMORANDUM DATED OCTOBER 9, 1969, WHICH INDICATES THAT ON THAT DATE, ONE DAY AFTER THE OPENING OF THE BIDS, THE CONTRACT NEGOTIATOR CONFERRED WITH THE PROCURING ACTIVITY TRANSPORTATION OFFICER IN ORDER TO DETERMINE THE TRANSPORTATION COSTS FOR THE PROCUREMENT FOR THE PURPOSE OF EVALUATING THE BIDS. AFTER EXAMINATION OF THE TRANSPORTATION DATA AND THE PRODUCTION SCHEDULE IN THE IFB, THE TRANSPORTATION OFFICER DETERMINED THAT THE PROCUREMENT ITEM WOULD BE SHIPPED BY PARCEL POST UNDER GOVERNMENT MAILING INDICIA, THEREBY ELIMINATING TRANSPORTATION COSTS AS A BID EVALUATION FACTOR.

ASPR 19-208.2(C), RELATING TO F.O.B. ORIGIN SHIPMENTS, PROVIDES THAT LAND METHODS OF TRANSPORTATION BY REGULATED COMMON CARRIER ARE THE NORMAL MEANS OF TRANSPORTATION USED BY THE GOVERNMENT BETWEEN POINTS IN THE CONTINENTAL UNITED STATES AND THEREFORE THE RELATED PROVISION IN ASPR 2-201(ADVI) SHALL BE INCLUDED IN F.O.B. ORIGIN SOLICITATIONS TO ESTABLISH THE MEANS TO BE USED BY THE GOVERNMENT IN APPLYING TRANSPORTATION COSTS FOR EVALUATION. WHEN THE USE OF OTHER MEANS OF TRANSPORTATION IN EVALUATING BIDS OR PROPOSALS IS APPROPRIATE, HOWEVER, ASPR 19-208.2(C) PROVIDES FOR A CORRESPONDING MODIFICATION TO THE ASPR 2-201(ADVI) PROVISION.

ASPR 19-403.3(A) AUTHORIZES THE USE OF PARCEL POST AND OTHER CLASSES OF MAIL FOR DELIVERIES OF MAILABLE MATTER WHICH MEETS THE SIZE, WEIGHT, AND DISTANCE LIMITATIONS PRESCRIBED BY THE POST OFFICE DEPARTMENT. ASPR 19- 403.3(B) AUTHORIZES THE USE OF OFFICIAL MAILING LABELS PRINTED "POSTAGE AND FEES PAID" BY THE CONTRACTOR WHEN PARCELS ARE TO BE MAILED UNDER "POSTAGE AND FEES PAID" INDICIA.

SINCE PARCEL POST UNDER GOVERNMENT MAILING INDICIA WAS ONE OF THE METHODS OF SHIPMENT SPECIFIED IN THE IFB, AND SINCE AFSC ELECTED TO USE SUCH METHOD, NO COMMON CARRIER TRANSPORTATION COSTS WERE FOR CONSIDERATION IN THE EVALUATION OF THE BIDS. ACCORDINGLY, AND IN THE ABSENCE OF SPECIFICATION OF ANY EVALUATION FACTOR IN THE ASPR, OR IN THE AIR FORCE ASPR SUPPLEMENT, TO COVER WHATEVER AMOUNT THE DEPARTMENT OF THE AIR FORCE MIGHT EVENTUALLY BE REQUIRED TO REIMBURSE THE POST OFFICE DEPARTMENT FOR THE POSTAL SERVICES INVOLVED IN THE PROCUREMENT UNDER CONSIDERATION, WE ARE UNABLE TO CONCLUDE THAT AFSC IMPROPERLY EXCLUDED TRANSPORTATION AS A FACTOR IN THE EVALUATION OF THE BIDS.

YOU FURTHER URGE THAT YOUR BID WAS THE BID WHICH WAS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, THE ACCEPTANCE OF WHICH IS CONTEMPLATED BY 10 U.S.C. 2305(C) AND BY ASPR 2 407.1 AND 2- 407.5. IN THIS REGARD, YOU POINT TO THE FACT THAT, AS THE ONLY BIDDER WHO QUOTED ON THE BASIS OF FIRST ARTICLE TESTING NOT REQUIRED, YOUR DELIVERY SCHEDULE WAS 4 MONTHS EARLIER THAN UNION'S SCHEDULE. IN ADDITION, YOU CLAIM THAT DELAYS TO THE GOVERNMENT RESULTING FROM DIFFERENCES IN INSPECTION CONSTITUTE FORESEEABLE COSTS OR DELAYS WHICH SHOULD HAVE BEEN CONSIDERED UNDER ASPR 2-407.5(I) AS JUSTIFICATION FOR AWARD TO YOU.

WE HAVE STATED THAT THE PHRASE "OTHER FACTORS CONSIDERED" AS USED IN 10 U.S.C. 2305, AND IN THE IMPLEMENTING PROVISIONS OF ASPR 2-407.1 DOES NOT AUTHORIZE AND WAS NOT INTENDED TO AUTHORIZE THE AWARD OF CONTRACTS UNDER ADVERTISED PROCUREMENTS TO OTHER THAN THE LOW, RESPONSIVE, QUALIFIED BIDDER. FURTHER, IT HAS BEEN CONSISTENTLY HELD BY OUR OFFICE AND BY THE COURTS THAT THE RULES OF COMPETITIVE ADVERTISED BIDDING AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE THAT BIDDERS BE INFORMED OF THE BASIS UPON WHICH THEIR BIDS WILL BE EVALUATED AND THE AWARD WILL BE MADE. THEREFORE, IF BIDS ARE TO BE EVALUATED ON SOME BASIS IN ADDITION TO PRICE, THOSE ADDITIONAL FACTORS AND THE RELATIVE IMPORTANCE TO BE ATTACHED TO EACH FACTOR SHOULD BE CLEARLY STATED IN THE INVITATION SO THAT ALL BIDDERS MAY BE AWARE THEREOF IN THE PREPARATION OF THEIR BIDS. SEE 42 COMP. GEN. 467 (1963) AND COURT CASES AND DECISIONS OF OUR OFFICE CITED THEREIN. ALSO CALL YOUR ATTENTION TO THE PROVISIONS OF ASPR 1-1903(A)(I)(B), RELATING TO WAIVER OF FIRST ARTICLE APPROVAL REQUIREMENTS, WHICH EXPRESSLY PRECLUDE CONSIDERATION OF AN EARLIER DELIVERY SCHEDULE RESULTING FROM WAIVER OF FIRST ARTICLE APPROVAL AS A FACTOR IN EVALUATION OF BIDS FOR AWARD. SEE, ALSO, 41 COMP. GEN. 788 (1962).

YOU ALSO PROTEST THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO ISSUE A STOP WORK ORDER TO YOU. ON THIS ACCOUNT, YOU STATE THAT THERE WAS NO STOP WORK ORDER CLAUSE IN THE CONTRACT; THAT YOU WERE IN PRODUCTION BECAUSE YOU HAD ALREADY EXPENDED MORE THAN $6,000 FOR LABOR AND MATERIAL BY DECEMBER 29, 1969, THE DATE YOU RECEIVED THE STOP WORK ORDER; AND THAT THE ISSUANCE OF THE ORDER VIOLATED ASPR 2-407.8(C).

IN CIRCUMSTANCES SUCH AS THESE, WHERE THE VALIDITY OF A CONTRACT AWARDED UNDER ADVERTISED PROCUREMENT PROCEDURES IS OPEN TO QUESTION AS THE RESULT OF A BID PROTEST, THE QUESTION OF WHETHER THE CONTRACTOR SHOULD BE PERMITTED TO CONTINUE PERFORMANCE DURING PENDENCY OF THE PROTEST IS GENERALLY FOR THE CONTRACTING AGENCY TO DECIDE. FURTHER, SUCH DECISION IS NOT DEPENDENT UPON THE INCLUSION IN THE CONTRACT OF A STOP WORK ORDER OR SUSPENSION OF WORK CLAUSE BUT UPON THE INTEREST OF THE GOVERNMENT AS DETERMINED BY THE CONTRACTING AGENCY. MOREOVER, WHILE ASPR 2-407.8(C), WHICH WAS NOT ISSUED UNTIL DECEMBER 31, 1969, OR 9 DAYS AFTER AFSC HAD ISSUED THE STOP WORK ORDER TO YOU, NOW PROVIDES THAT THE CONTRACTING OFFICER SHOULD SEEK A MUTUAL AGREEMENT WITH THE SUCCESSFUL BIDDER TO SUSPEND PERFORMANCE ON A NO-COST BASIS WHEN IT APPEARS LIKELY THAT THE AWARD MAY BE INVALIDATED AND DELAY IN RECEIPT OF SUPPLIES OR SERVICES IS NOT PREJUDICIAL TO THE GOVERNMENT'S INTEREST, WE DO NOT SEE ANYTHING IN THE LANGUAGE OF ASPR 2-407.8(C) WHICH WOULD BAR ISSUANCE OF A STOP WORK ORDER IN THE EVENT THE CONTRACTOR DECLINES TO COOPERATE WITH THE CONTRACTING AGENCY. WE THEREFORE VIEW THE ISSUANCE OF THE STOP WORK ORDER AS A PROPER EXERCISE OF THE DISCRETION VESTED IN AFSC AS THE CONTRACTING AGENCY.

YOU FURTHER CHARGE THAT THE AWARD TO YOU RESULTED FROM A MISTAKE OF FACT ON THE PART OF THE CONTRACTING OFFICER AND WAS "WITHIN HIS DISCRETION," WHICH MADE THE AWARD BINDING. IN THIS REGARD, YOU STATE THAT YOU HAD NO WAY OF KNOWING WHY THE APPARENT LOW BIDDER DID NOT RECEIVE THE AWARD AND THAT, SINCE THE ERROR WAS SOLELY THE GOVERNMENT'S, THE GOVERNMENT SHOULD BE ESTOPPED, AND IS ESTOPPED, FROM DENYING THE VALIDITY OF THE AWARD. SUPPORT OF THIS ARGUMENT, YOU CITE LEVINSON V UNITED STATES ET. AL., 258 U.S. 198 (1922), IN WHICH THE SALE OF A NAVAL VESSEL TO OTHER THAN THE HIGHEST BIDDER, WHOSE BID HAD BEEN MISPLACED AND OVERLOOKED, WAS UPHELD BY THE UNITED STATES SUPREME COURT.

THE LEVINSON CASE, WE BELIEVE, MAY BE DISTINGUISHED FROM THE SITUATION UNDER CONSIDERATION HERE. IN THE LEVINSON CASE, THE SALE OF THE VESSEL WAS MADE UNDER A STATUTE WHICH EMPOWERED THE PRESIDENT TO DIRECT A DEPARTURE FROM THE PRESCRIBED MANNER OF SALE AND HIS DIRECTION TO THE SECRETARY OF THE NAVY TO SELL "FOR SUCH PRICE AS HE SHALL APPROVE." HERE THE PROCUREMENT IS SUBJECT TO THE STATUTORY REQUIREMENT THAT AWARD BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. IN ADDITION, THE MISTAKE WHICH CULMINATED IN THE ERONEOUS AWARD TO YOU DID NOT INVOLVE THE EXERCISE OF ANY AUTHORIZED DISCRETION ON THE PART OF THE CONTRACTING OFFICER; RATHER, IT RESULTED FROM THE FAILURE OF THE CONTRACTING OFFICER TO FOLLOW THE INSTRUCTIONS INCLUDED IN THE BID PAPERS, WHICH WERE CLEAR AND UNAMBIGUOUS. IN SUCH CIRCUMSTANCES, WE HAVE HELD THAT THE ADMINISTRATIVE OFFICERS USUALLY ARE REQUIRED TO CANCEL THE ERRONEOUS AWARD, PARTICULARLY IF SUCH MAY BE DONE WITHOUT JEOPARDIZING THE INTEREST OF THE UNITED STATES. B-165186, NOVEMBER 7, 1968, AND DECISIONS CITED THEREIN; B- 164826, AUGUST 29, 1968.

THE RECORD ESTABLISHES THAT UPON EVALUATION OF UNION'S BID IN ACCORDANCE WITH THE PROVISIONS OF THE SOLICITATION, UNION WAS THE LOW RESPONSIVE BIDDER. ACCORDINGLY, THE AWARD TO YOU WAS CONTRARY TO THE STATUTORY PROVISIONS CITED AND CREATED NO BINDING CONTRACT ENFORCEABLE AGAINST THE GOVERNMENT.

WHILE IT IS UNFORTUNATE THAT THE CONTRACTING OFFICER MADE AN IMPROPER INITIAL EVALUATION ON THE BIDS, NEVERTHELESS CANCELLATION OF THE AWARD TO YOU WAS LEGALLY PERMISSIBLE. ACCORDINGLY, WE SEE NO LEGAL BASIS FOR OBJECTION TO THE SUBSEQUENT AWARD WHICH WAS MADE TO UNION, WHO WAS DETERMINED TO BE RESPONSIBLE AS WELL AS RESPONSIVE. YOUR PROTEST IS THEREFORE DENIED.