B-168761, MAY 14, 1970

B-168761, MAY 14, 1970

BIDS--ACCEPTANCE TIME LIMITATION--FAILURE TO COMPLY CANADIAN FIRM'S BID, SUBMITTED TO CANADIAN COMMERCIAL CORPORATION (CCC) WITH LETTER--DETACHED BEFORE BID TRANSMITTAL TO NAVAIR, STATING NO BID EXCEPTIONS WERE TAKEN--BUT WHICH FAILED TO SPECIFY REQUIRED ACCEPTANCE PERIOD OF NO LESS THAN 90 DAYS, WAS NONRESPONSIVE, SUCH DEFICIENCY NOT BEING CURED BY CANADIAN GOVERNMENT'S GUARANTEE OF CONTRACT PERFORMANCE NOR BY COVERING LETTER, SINCE CCC CANNOT BE CONSIDERED UNITED STATES GOVERNMENT'S AGENT TO RECEIVE BIDS BUT IS DEEMED PRIME CONTRACTOR WHOSE BIDS (AND MULTIPLE BIDS ARE NOT ILLEGAL PER SE) MUST BE EVALUATED AS SUBMITTED, GUARANTEE EXCEPTED, ON SAME BASIS AS OTHER BIDS. SEE 39 COMP. GEN. 892, 894 (1960).

TO MESSRS. MILTON C. GRACE AND JOHN F. WOLF:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 14, 1970, REQUESTING RECONSIDERATION OF THAT PART OF DECISION DATED APRIL 1, 1970, B-168761, 49 COMP. GEN. (1970), WHICH DENIED THE PROTEST OF THE CANADIAN COMMERCIAL CORPORATION (BRISTOL AEROSPACE (1968), LIMITED, WINNIPEG, MANITOBA, CANADA), AGAINST REJECTION OF ITS BID AS NONRESPONSIVE AND AWARD TO ANY OTHER COMPANY UNDER INVITATION FOR BIDS NO. N00019-70-B 0014, ISSUED BY THE NAVAL AIR SYSTEMS COMMAND (NAVAIR), WASHINGTON, D.C.

THE FACTS AS RECITED IN OUR PRIOR DECISION ARE IN SUBSTANCE AS FOLLOWS:

THE INVITATION REQUESTED BIDS FOR THE MANUFACTURE AND SUPPLY OF MK36 MOD 5 AND MK 50 MOD 0 ROCKET MOTORS AND DATA APPLICABLE THERETO. BIDS WERE OPENED ON DECEMBER 3, 1969. THE CANADIAN COMMERCIAL CORPORATION BID WAS THE LOWEST EVALUATED BID.

THE INVITATION CONTAINED STANDARD FORM 33A (JULY 1966) ENTITLED "SOLICITATION INSTRUCTIONS AND CONDITIONS" AND STANDARD FORM 33 (JULY 1966) ENTITLED "SOLICITATION, OFFER AND AWARD." OF RELEVANCE TO OUR CONSIDERATION HERE, THE "OFFER" PORTION OF THE LATTER FORM PROVIDES AS FOLLOWS:

"IN COMPLIANCE WITH THE ABOVE, THE UNDERSIGNED OFFERS AND AGREES, IF THIS OFFER IS ACCEPTED WITHIN CALENDAR DAYS (60 CALENDAR DAYS UNLESS A DIFFERENT PERIOD IS INSERTED BY THE OFFEROR) FROM THE DATE FOR 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 POINTS), WITHIN THE TIME SPECIFIED IN THE SCHEDULE."

IMMEDIATELY FOLLOWING STANDARD FORM 33, A PAGE OF "ADDITIONAL INFORMATION" IS PROVIDED WHEREIN BIDDERS ARE CAUTIONED: "SEE 'BID ACCEPTANCE PERIOD' PROVISION IN THE ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS ATTACHED HERETO." PARAGRAPH 45 OF THE ADDITIONAL SOLICITATION INSTRUCTIONS STATES:

"(45) BID ACCEPTANCE PERIOD (APR. 1969) BIDS OFFERING LESS THAN NINETY (90) DAYS FOR ACCEPTANCE BY THE GOVERNMENT FROM THE DATE SET FOR OPENING OF BIDS WILL BE CONSIDERED NONRESPONSIVE AND WILL BE REJECTED (ASPR 2-201 (A) (XV)). BIDDERS ARE CAUTIONED THAT THE PERIOD SPECIFIED ABOVE MUST BE ENTERED IN THE APPROPRIATE SPACE UNDER OFFER ON THE SOLICITATION FORM (STANDARD FORM 33)."

CANADIAN COMMERCIAL CORPORATION (BRISTOL AEROSPACE) AND HERCULES, INCORPORATED, DID NOT ENTER IN THE APPROPRIATE SPACE ON STANDARD FORM 33 ANY BID ACCEPTANCE PERIOD AND, IN VIEW OF SUCH DEFICIENCY, THE CONTRACTING OFFICER DETERMINED THAT THE TWO LOWEST BIDS WERE NONRESPONSIVE. THE ATTORNEYS FOR BRISTOL AND CANADIAN COMMERCIAL CORPORATION, IN BRIEFS FILED WITH OUR OFFICE, CONTEND THAT THE BRISTOL BID, TOGETHER WITH THE ACCOMPANYING DOCUMENTATION WHICH WAS TRANSMITTED TO THE CANADIAN COMMERCIAL CORPORATION (CCC), INDICATED A BID ACCEPTANCE PERIOD OF AT LEAST 90 DAYS AND THEREFORE IS RESPONSIVE.

THE RECORD INDICATES THAT THE BID AS SUBMITTED BY BRISTOL TO CCC WAS ACCOMPANIED BY A COVER LETTER DATED NOVEMBER 28, 1969, ADDRESSED TO NAVAIR. THIS LETTER STATED THAT THE SOLICITATION, OFFER, AND SOLICITATION AMENDMENTS WERE ATTACHED. IT ALSO REQUESTED PROGRESS PAYMENTS AND STATED THAT "(NO EXCEPTIONS ARE TAKEN TO THE BID." IN PROCESSING BRISTOL'S BID, CCC DETACHED THIS LETTER BEFORE FORWARDING THE BID TO NAVAIR. THE LETTER WAS SUBMITTED TO NAVAL AIR SYSTEMS COMMAND AT A LATER DATE.

OUR PRIOR DECISION HELD THAT:

"NO AUTHORITY HAS BEEN CITED TO SUPPORT THE PROPOSITION THAT CCC IS EXEMPT FROM THE ORDINARY REQUIREMENTS REGARDING BID RESPONSIVENESS. NEITHER ARE WE AWARE THAT CCC MAY BE ACCORDED ANY SPECIAL CONSIDERATION, WHETHER AS A QUASI-GOVERNMENTAL AGENCY OR OTHERWISE. AS REGARDS THE CONTENTION THAT CCC ACTS AS AN AGENT OF THE DEPARTMENT OF DEFENSE IN THE HANDLING OF BIDS FROM CANADIAN FIRMS, ASPR 6-504.1 (B) (1) PROVIDES THAT 'THE CANADIAN COMMERCIAL CORPORATION SHOULD NORMALLY BE THE PRIME CONTRACTOR' AND IT APPEARS TO US THAT CCC WAS ACTING IN THAT CAPACITY IN THIS CASE.

"IN OUR OPINION, THE TERMS AND CONDITIONS OF THE NAVAIR INVITATION FOR BIDS ARE CONTROLLING IN DECIDING WHETHER (BRISTOL'S BID IS) RESPONSIVE. THE ATTORNEYS FOR BRISTOL CONTEND THAT THE 'COVER LETTER' AND THE CCC FORM 3B ARE PART OF BRISTOL'S BID. SINCE NEITHER THE COVER LETTER NOR THE CCC FORM 3B WERE SUBMITTED TO NAVAIR WITH BRISTOL'S BID, THEY MUST BE CONSIDERED, IF AT ALL, AS LATE BID MODIFICATIONS. THE GENERAL RULE FOLLOWED BY OUR OFFICE IS THAT THE BIDDER HAS THE RESPONSIBILITY FOR THE DELIVERY OF HIS BID TO THE PROPER PLACE AT THE PROPER TIME, AND THAT EXCEPTIONS TO THE RULE REQUIRING REJECTION OF LATE BID MODIFICATIONS MAY BE PERMITTED ONLY IN THE EXACT CIRCUMSTANCES PROVIDED FOR IN THE INVITATION. 37 COMP. GEN. 35 (1957); B-144842, MARCH 10, 1961."

THREE REASONS ARE ADVANCED, IN THE REQUEST FOR RECONSIDERATION, AS BASES FOR DETERMINATION THAT THE CCC (BRISTOL AEROSPACE) BID DID IN FACT CONTAIN AN EXPRESS BID ACCEPTANCE PERIOD OF 90 DAYS. THE REASONS ARE STATED AS FOLLOWS:

1. BRISTOL WAS OBLIGATED TO ACCEPT THE AWARD WITHIN THE PRESCRIBED BID ACCEPTANCE PERIOD.

2. THE PERFORMANCE OF THE CONTRACT BY BRISTOL WAS GUARANTEED BY THE CANADIAN GOVERNMENT.

3. THE INSTANT DECISION VIOLATES PRINCIPLES OF THE COMPETITIVE BID SYSTEM, AND IS IN CONFLICT WITH THE BEST INTEREST OF THE GOVERNMENT.

THE FIRST REASON IS PREDICATED ON THE PREMISE THAT THE FUNCTION OF THE CCC IS TO SERVE AS A "CONDUIT" OR "FUNNEL" FOR THE TRANSMISSION OF BIDS BY CANADIAN PRODUCERS TO UNITED STATES GOVERNMENT DEFENSE CONTRACTING OFFICERS WITHOUT CHANGE OR ALTERATION, AND THAT ANY RESULTING CONTRACT IS BETWEEN THE UNITED STATES AND THE CANADIAN PRODUCER.

THE ARMED SERVICES PROCUREMENT REGULATION 6-504, PROCEDURES OF CANADIAN PURCHASES, ALSO SET OUT IN THE PRODUCTION SHARING HANDBOOK, DEPARTMENT OF DEFENCE PRODUCTION, OTTAWA, STATES IN PERTINENT PART:

"6-504.1 BIDDING PROCEDURES.

"(B) SUBMISSION OF BIDS AND PROPOSALS.

"(1) AS INDICATED IN 6-504.2 BELOW, THE CANADIAN COMMERCIAL CORPORATION SHOULD NORMALLY BE THE PRIME CONTRACTOR. IN ORDER TO INDICATE ITS ACCEPTANCE OF BIDS OR PROPOSALS BY INDIVIDUAL CANADIAN COMPANIES, THE CANADIAN COMMERCIAL CORPORATION ISSUES A LETTER SUPPORTING THE CANADIAN BID PROPOSAL WITH THE FOLLOWING INFORMATION CONTAINED THEREIN: NAME OF THE CANADIAN BIDDER; CONFIRMATION AND ENDORSEMENT OF THE BID IN THE NAME OF THE CANADIAN COMMERCIAL CORPORATION; A STATEMENT THAT PRICES FOR LISTED ITEMS ARE EXCLUSIVE OF UNITED STATES IMPORT DUTIES (SEE 6-103.5); A STATEMENT AS TO WHETHER THE PRICES FOR UNLISTED ITEMS INCLUDE OR EXCLUDE UNITED STATES IMPORT DUTIES; AND A STATEMENT THAT THE CORPORATION SHALL SUBCONTRACT 100% WITH THE BIDDER.

"(2) WHEN A CANADIAN BID OR PROPOSAL CANNOT BE PROCESSED THROUGH THE CANADIAN COMMERCIAL CORPORATION IN TIME TO MEET THE BID OPENING REQUIREMENT, THE CORPORATION IS AUTHORIZED TO PERMIT CANADIAN FIRMS TO SUBMIT BIDS OR PROPOSALS DIRECTLY, PROVIDED THE CANADIAN BID OR PROPOSAL AND THE CANADIAN COMMERCIAL CORPORATION ENDORSEMENT ARE BOTH RECEIVED BY THE PURCHASING OFFICE PRIOR TO BID OPENING.

"(4) ALL PROPOSALS AND QUOTATIONS SUBMITTED BY THE CANADIAN COMMERCIAL CORPORATION, EXCEPT THOSE IN WHICH COMPETITION IS OBTAINED, SHALL BE IN TERMS OF CANADIAN CURRENCY. HOWEVER, THE CORPORATION MAY, AT THE TIME OF SUBMITTING THE PROPOSAL OR QUOTATION, ELECT TO QUOTE AND RECEIVE PAYMENT IN TERMS OF UNITED STATES CURRENCY; IN WHICH EVENT CONTRACTS ARISING THEREFROM SHALL PROVIDE FOR PAYMENT IN UNITED STATES CURRENCY AND SHALL NOT BE SUBJECT TO ADJUSTMENT FOR LOSSES OR GAINS RESULTING FROM FLUCTUATION IN EXCHANGE RATES. (SEE 6-506.)

"6-504.2 CONTRACTING PROCEDURES.

"(A) INDIVIDUAL CONTRACTS COVERING PURCHASES FROM SUPPLIERS LOCATED IN CANADA, EXCEPT AS NOTED IN (B) BELOW (NOT MATERIAL HERE), SHALL BE MADE WITH THE CANADIAN COMMERCIAL CORPORATION. * * * CONTRACTS NORMALLY SHOULD BE AWARDED TO AND ADMINISTERED THROUGH THE HEAD OFFICE OF THE CANADIAN COMMERCIAL CORPORATION IN OTTAWA, AND ALL PAYMENTS UNDER SUCH CONTRACTS AWARDED TO THE CANADIAN COMMERCIAL CORPORATION SHALL BE MADE TO ITS OTTAWA OFFICE. UNDER CONTRACTS WITH THE CANADIAN COMMERCIAL CORPORATION, DIRECT COMMUNICATION WITH THE CANADIAN SUPPLIER IS AUTHORIZED AND ENCOURAGED IN CONNECTION WITH ALL TECHNICAL ASPECTS OF THE CONTRACT, PROVIDED, HOWEVER, THAT THE APPROVAL OF THE CORPORATION SHALL BE OBTAINED ON ANY MATTERS INVOLVING CHANGES TO THE CONTRACT."

IN ADDITION, ASPR 6-503 PROVIDES, IN ACCORDANCE WITH THE AGREEMENT BETWEEN THE CANADIAN AND UNITED STATES GOVERNMENTS, THAT:

"THE CANADIAN GOVERNMENT GUARANTEES TO THE UNITED STATES GOVERNMENT ALL COMMITMENTS, OBLIGATIONS, AND COVENANTS OF THE CANADIAN COMMERCIAL CORPORATION IN CONNECTION WITH ANY CONTRACT OR ORDER ISSUED TO SAID CORPORATION BY ANY PROCURING ACTIVITY OF THE UNITED STATES GOVERNMENT. THE CANADIAN GOVERNMENT HAS LIKEWISE WAIVED NOTICE OF ANY CHANGE OR MODIFICATION WHICH MAY BE MADE FROM TIME TO TIME IN THESE COMMITMENTS, OBLIGATIONS, OR COVENANTS."

IT MAY BE STATED AT THE OUTSET THAT THE BIDS AS RECEIVED BY THE NAVY FROM BOTH HERCULES, INC. AND FROM THE CANADIAN COMMERCIAL CORPORATION IN BEHALF OF BRISTOL AEROSPACE LIMITED WERE NONRESPONSIVE. BASED ON THE DOCUMENTS RECEIVED BY THE NAVY IN BOTH CASES, EACH BID LIMITED THE PERIOD FOR ITS ACCEPTANCE TO 60 DAYS, WHICH WAS LESS THAN THE PERIOD OF 90 DAYS OR MORE BIDDERS WERE REQUIRED BY PARAGRAPH 45 OF THE ADDITIONAL SOLICITATION INSTRUCTIONS TO ENTER IN THE APPROPRIATE SPACE ON THE SOLICITATION FORM (STANDARD FORM 33). IT SHOULD BE NOTED AT THIS POINT THAT PARAGRAPH 45 MADE IT MANDATORY FOR BIDDERS TO ENTER SOME FIGURE ON THE STANDARD FORM 33, WHICH FIGURE HAD TO BE NOT LESS THAN 90 DAYS FOR THE BID TO BE RESPONSIVE.

IT IS UNFORTUNATE THAT PARAGRAPH 45 DID NOT FOLLOW THE SELF-EXECUTING FORMAT OF THE LANGUAGE IN THE STANDARD FORM, WHICH PROVIDES THAT BIDDERS WILL BE CONSIDERED TO HAVE OFFERED 60 DAYS FOR BID ACCEPTANCE IF THEY FAIL SPECIFICALLY TO ENTER A DIFFERENT PERIOD. HOWEVER, PARAGRAPH 45 DID NOT USE SUCH SELF-EXECUTING LANGUAGE; IT CAUTIONED BIDDERS THAT A PERIOD OF TIME MUST BE ENTERED ON THE STANDARD FORM 33. BIDDERS COULD, OF COURSE, ENTER 100 DAYS OR MORE IF THEY WISHED TO DO SO, BUT IN ANY EVENT THEY WERE REQUIRED TO ENTER SOME FIGURE. NO SUCH FIGURE APPEARS ON EITHER THE BRISTOL OR HERCULES BID AS RECEIVED BY THE NAVY.

BRISTOL'S CONTENTION IS THAT WHILE THIS SHORTCOMING MAY BE FATAL TO THE RESPONSIVENESS OF THE HERCULES BID, IT SHOULD NOT DISQUALIFY THE BRISTOL BID BECAUSE OF THE FACT THAT THE BID WAS CHANNELED THROUGH THE CANADIAN COMMERCIAL CORPORATION. THIS POSITION IS BASED ON THE FURTHER ALLEGATION THAT BRISTOL HAD SUBMITTED A FULLY RESPONSIVE BID TO CCC AND CONSEQUENTLY IT WOULD BE OBLIGATED TO PERFORM AS REQUIRED IF NAVY ACCEPTED THE CCC- BRISTOL BID. BRISTOL'S CASE RESTS ON THE PREMISE THAT ANY DEFICIENCIES IN THE BID PACKAGE SENT IN TO THE NAVY IN ITS BEHALF BY CCC ARE CURED BY ITS BID TO CCC. WHAT THIS AMOUNTS TO, ESSENTIALLY, IS THAT CCC IS AN AGENT OF THE UNITED STATES IN RECEIVING BIDS FROM CANADIAN FIRMS AND THAT ALL SUCH BIDS WHICH CCC IS WILLING TO TRANSMIT TO THE UNITED STATES PROCURING ACTIVITY AND GUARANTEE ARE RESPONSIVE AND RESPONSIBLE BIDS.

WE CANNOT AGREE THAT THE INTERNATIONAL AGREEMENT BETWEEN CANADA AND THE UNITED STATES HAS OR WAS INTENDED TO HAVE ANY SUCH EFFECT. UNDER THAT AGREEMENT CCC SELECTS THOSE CANADIAN FIRMS IT IS WILLING TO GUARANTEE AS TO PERFORMANCE AND INVITES THEM TO SUBMIT BIDS TO IT. CCC'S INVITATION TO THESE FIRMS (FORM CCC-3B) STATES THAT THEIR BIDS TO BE CONSIDERED MUST BE MADE ON THE UNITED STATES INVITATION FOR BID WITHOUT ANY ALTERATION OR ADDITION. CANADIAN FIRMS WHO RESPOND MUST ALSO SIGN FORM CCC-3B BY WHICH THEY AGREE TO SELL TO CCC "UPON THE TERMS AND CONDITIONS OF" THE UNITED STATES INVITATION FOR BID, AND UPON CERTAIN ADDITIONAL TERMS AND CONDITIONS RELEVANT ONLY TO THE PRIME SUBCONTRACTOR RELATIONSHIP BETWEEN CCC AND THE CANADIAN FIRM. AMONG THESE ADDITIONAL CONDITIONS IS A REQUIREMENT THAT THE CANADIAN FIRM'S BID TO CCC BE "VALID FOR TEN DAYS BEYOND THE PERIOD CITED IN THE U.S. INVITATION FOR BID."

IT IS OUR UNDERSTANDING THAT CCC ACCEPTS AND FORWARDS ALL BIDS MADE TO IT BY THOSE CANADIAN FIRMS WHOSE PERFORMANCE IT IS WILLING TO GUARANTEE. CCC DOES NOT EVALUATE THESE BIDS, BUT ACTS MERELY AS FORWARDING AGENT, WITH ITS GUARANTEE OF PERFORMANCE FOR EACH. THE PROCESS OF EVALUATION OF SUCH BIDS AND DETERMINATION OF THE RESPONSIVENESS THEREOF IS, AS WE UNDERSTAND IT, LEFT TO THE UNITED STATES PROCURING ACTIVITY. CONTRARY TO THE CONTENTIONS OF BRISTOL'S COUNSEL, IT CANNOT BE ASSUMED THAT ALL SUCH BIDS ARE RESPONSIVE. NO EVALUATION OF RESPONSIVENESS IS MADE BY CCC. FOR EXAMPLE, CCC WOULD NOT UNDERTAKE TO DETERMINE WHETHER AN "EQUAL" PRODUCT OFFERED UNDER A UNITED STATES SOLICITATION CALLING FOR A SPECIFIED AMERICAN BRAND NAME PRODUCT "OR EQUAL" WAS OR WAS NOT "EQUAL." ALSO, IF A BID TO CCC FAILED TO SPECIFY A GUARANTEED SHIPPING WEIGHT AS REQUIRED BY THE TERMS OF THE UNITED STATES INVITATION, THE BID WOULD BE FORWARDED BY CCC IN THAT CONDITION. IT SEEMS TO US THAT WHAT CCC GUARANTEES BY ITS TRANSMITTAL OF CANADIAN BIDS IS SIMPLY THAT IT WILL GUARANTEE PERFORMANCE IN ACCORDANCE WITH WHATEVER THE CANADIAN FIRM HAS OFFERED ON THE UNITED STATES INVITATION IT FILLS OUT AND SUBMITS TO CCC. SO FAR AS THE UNITED STATES IS CONCERNED, IT MUST EVALUATE THOSE BIDS, EXCEPT FOR RESPONSIBILITY WHICH CCC GUARANTEES, ON THE SAME BASIS AS BIDS RECEIVED FROM UNITED STATES FIRMS. WE CANNOT AGREE THAT ANY ADDITIONAL TERMS OR CONDITIONS TO WHICH THE CANADIAN FIRM AGREES RESPECTING ITS CONTRACTUAL RELATIONSHIP WITH CCC CONSTITUTE ANY PART OF THE BID FOR EVALUATION PURPOSES SO FAR AS COMPETITION WITH UNITED STATES FIRMS IS CONCERNED, UNLESS, OF COURSE, SUCH TERMS ARE SPECIFICALLY REITERATED IN CCC'S TRANSMITTAL OFFER.

FOR EXAMPLE, IN A CASE WHERE THE CANADIAN FIRM OFFERED 60 DAYS FOR ACCEPTANCE OF ITS BID IN FILLING OUT THE UNITED STATES INVITATION, WE DO NOT BELIEVE THE UNITED STATES COULD ACCEPT CCC'S BID ON BEHALF OF THAT FIRM ON THE 65TH DAY WITHOUT CCC'S CONSENT, EVEN THOUGH THE CANADIAN FIRM'S BID TO CCC WAS VALID FOR 70 DAYS. THE EXTRA 10 DAYS WHICH CCC REQUIRES FROM CANADIAN FIRMS IS FOR ITS OWN PURPOSES. THE BID CCC TRANSMITS TO THE UNITED STATES MUST BE GOVERNED BY ITS OWN TERMS.

WE ARE ADVISED THAT UNDER THE CANADIAN PROCUREMENT PROCEDURE, WHERE THE CORPORATION RECEIVES SEVERAL BIDS IN RESPONSE TO ITS INVITATION FOR BIDS (CCC 3-B), IT MAKES NO ATTEMPT TO EVALUATE THE BIDS AND SUBMIT ONLY THE LOWEST RESPONSIVE BID. ON THE CONTRARY, IT SUBMITS ALL THE BIDS RECEIVED, AND IT SUPPORTS OR ENDORSES EACH AND EVERY ONE OF THE BIDS OF THOSE CANADIAN COMPANIES WHICH IT DEEMS CAPABLE OF PERFORMANCE OF THE CONTRACT. IT REMOVES THE FORM 3B, WHICH COMPRISES ITS CONTRACT WITH THE CANADIAN FIRM, AND FORWARDS THE REMAINING PAPERS WITH ITS COVER LETTER TO THE CONTRACTING OFFICE. IT IS CONTENDED THAT THIS PROCEDURE SUBSTANTIATES THE VIEW THAT THE CCC IS NO MORE THAN A "CONDUIT" FOR THE TRANSMISSION OF BIDS. WE DO NOT AGREE. THE FORM CCC 3B, THE INVITATION FOR BID ISSUED BY THE CCC AND THE BIDDING COMPANY'S OFFER WHICH IS A PART OF THE FORM, CLEARLY STATES THAT UNITED STATES PROCUREMENT REGULATIONS REQUIRE THAT CANADIAN BIDS BE SUBMITTED BY CCC. SHOULD THAT BID BE SUCCESSFUL THE UNITED STATES PROCUREMENT AGENCY WILL ENTER INTO A PRIME CONTRACT WITH CCC WHICH PLACES A SUBCONTRACT WITH THE COMPANY OFFERING THE SUCCESSFUL BID. THE "CONDITIONS OF BID" AGREED TO BY THE CANADIAN BIDDER, CONTAINS THE FOLLOWING PERTINENT STATEMENTS:

"B. IF A CONTRACT RESULTS FROM THIS BID, THE FOLLOWING WILL APPLY:

"(1) PAYMENT WILL BE MADE UPON PRESENTATION TO CANADIAN COMMERCIAL CORPORATION OF THE REQUIRED DOCUMENTS. CASH DISCOUNTS WILL BE CALCULATED FROM THE ACTUAL DATE INVOICES WITH ALL SUPPORTING DOCUMENTS ARE RECEIVED, INCLUDING, WHEN APPLICABLE, EVIDENCE OF DESTINATION ACCEPTANCE.

"(4) IF THE CONTRACT PRICE IS A FIXED OR FIRM PRICE AND THE CONTRACT PROVIDES FOR PROGRESS PAYMENTS, THE RISK OF LOSS OF OR DAMAGE TO ALL MATERIALS, WORK-IN-PROCESS AND FINISHED GOODS PRIOR TO DELIVERY AND ACCEPTANCE THEREOF, SHALL BE ON THE SELLER WHETHER OR NOT TITLE THERETO SHALL BE VESTED IN CANADIAN COMMERCIAL CORPORATION BY VIRTUE OF PROGRESS OR OTHER PAYMENTS HAVING BEEN MADE BY THE CORPORATION TO THE SELLER, AND THE SELLER AGREES TO INSURE AND KEEP INSURED THE SAME * * * IN THE JOINT NAMES OF THE SELLER AND CANADIAN COMMERCIAL CORPORATION, WITH LOSS PAYABLE AS THEIR RESPECTIVE INTERESTS MAY APPEAR * * *.

"(6) THE DEPARTMENT OF DEFENCE PRODUCTION GENERAL CONDITIONS DDP-26A (SUPPLIES - FIRM PRICE) (REV. 7/64), WITH THE EXCEPTION OF CLAUSES 6, 7, 8, 19, 21 AND 28 THEREOF; OR, IF APPLICABLE, THE DEPARTMENT OF DEFENCE PRODUCTION GENERAL CONDITIONS DDP-26B (SUPPLIES - COST REIMBURSEMENT) (REV. 7/64), WITH THE EXCEPTION OF CLAUSES 7, 8, 9, 23 AND 24 THEREOF, AND THE CONTRACT CLAUSES REFERRED TO IN THE U.S. INVITATION TO BID, COPIES OF WHICH THE SELLER ACKNOWLEDGES TO HAVE RECEIVED; SHALL BE APPLICABLE TO AND FORM PART OF THE CONTRACT.

"(7) THE APPLICABLE LABOUR CONDITIONS ESTABLISHED BY ORDER-IN COUNCIL P.C. 1954-2029 OF DECEMBER, 1954, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS THERETO, COPIES OF WHICH THE SELLER ACKNOWLEDGES TO HAVE RECEIVED, SHALL BE APPLICABLE TO AND SHALL FORM PART OF THE CONTRACT. * *

IT IS STATED THAT SINCE CCC IS PROHIBITED FROM COMPETING IN THE COMPETITION FOR UNITED STATES DEFENSE CONTRACTS, IT DOES NOT SUBMIT A BID OF ITS OWN, AND ACCORDINGLY, THE UNITED STATES DEPARTMENT OF DEFENSE "CANNOT ACTUALLY AWARD A CONTRACT TO A PERSON OR COMPANY, ET CETERA, WHO HAS NOT SUBMITTED A BID IN THE COMPETITION FOR THAT CONTRACT." THE STATED CONCLUSION IS CORRECT, BUT THE PREMISE IS INCORRECT. THE BID SUBMITTED IS THAT OF CCC, ALBEIT IT IS PREDICATED ON A BID SUBMITTED TO IT BY A PROSPECTIVE 100 PERCENT CANADIAN SUBCONTRACTOR. WITHOUT THE BID OF A PROPOSED SUBCONTRACTOR CCC WOULD BE IN NO POSITION TO SUBMIT A BID TO THE UNITED STATES CONTRACTING OFFICER. NOR IS THIS CIRCUMSTANCE ALTERED BY THE FACT THAT SEVERAL CANADIAN COMPANIES MAY SUBMIT BIDS TO CCC AS PROPOSED SUBCONTRACTORS AND EACH OF THESE BIDS IS ADOPTED AND TRANSMITTED AS ITS OWN BID BY CCC. MULTIPLE BIDS ARE NOT ILLEGAL PER SE. SEE 39 COMP. GEN. 892, 894 (1960).

CONSIDERATION OF ALL OF THE ABOVE RESULTS IN THE CONCLUSION THAT THE CCC IS IN FACT, IF AN AWARD IS MADE TO IT, THE PRIME CONTRACTOR WITH THE APPROPRIATE SUBCONTRACTOR INDICATED IN THE ACCEPTED BID. ALL THE CIRCUMSTANCES ARE CONSONANT WITH THIS VIEW AND NEGATIVE A VIEW THAT CCC IS MERELY A "CONDUIT" FOR CHANNELING BIDS. ONE FURTHER OBSERVATION MAY BE MADE -- ON THE MATTER OF PAYMENT. PAYMENT IS MADE TO THE CANADIAN COMPANY BY CCC AND CCC IS PAID UNDER THE CONTRACT BY THE UNITED STATES DISBURSING OFFICER, TYPICAL OF A BUYER-PRIME CONTRACTOR-SUBCONTRACTOR RELATIONSHIP.

IT NECESSARILY FOLLOWS THAT ALTHOUGH, BY VIRTUE OF ITS AGREEMENTS WITH THE CCC ON FORM CCC-3B, BRISTOL AEROSPACE (1968) LIMITED MAY HAVE BEEN OBLIGATED TO ACCEPT AN AWARD FROM CCC FOR TEN DAYS BEYOND THE PRESCRIBED INVITATION PERIOD, OUR CONSIDERATION IS LIMITED TO THE BID AS SUBMITTED. IN THIS CONNECTION, COUNSEL HAVE CONCEDED THAT IF THE BRISTOL AEROSPACE BID HAD BEEN SUBMITTED DIRECTLY TO THE CONTRACTING OFFICER, IT WOULD HAVE BEEN IN THE SAME POSITION AS THE HERCULES, INCORPORATED (A UNITED STATES FIRM) BID, AND WOULD HAVE BEEN PROPERLY REJECTED AS NONRESPONSIVE. THE BID AS SUBMITTED BY CCC MUST THEREFORE BE CONSIDERED NONRESPONSIVE.

YOUR SECOND REASON MAY BE DISMISSED AS INACCURATE SINCE THE GUARANTEE OF THE CANADIAN GOVERNMENT TO THE UNITED STATES APPLIES SPECIFICALLY TO THE CONTRACT AWARDED THE CCC, NOT THE CONTRACT BETWEEN CCC AND ITS SUBCONTRACTOR. SEE ASPR 6-503. PERFORMANCE OF THE CONTRACT BY THE CCC IS GUARANTEED BY THE CANADIAN GOVERNMENT. THERE IS NO QUESTION THAT NONPERFORMANCE BY THE CANADIAN SUBCONTRACTOR WOULD BE FOLLOWED BY NONPERFORMANCE BY CCC AND UNDER TERMS OF THE INTERNATIONAL AGREEMENT THE CANADIAN GOVERNMENT WOULD BE LIABLE TO THE UNITED STATES GOVERNMENT.

THE FINAL REASON OFFERED THAT THE CONCLUSION REACHED IN OUR DECISION OF APRIL 1, 1970, VIOLATES THE PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM AND IS IN CONFLICT WITH THE BEST INTEREST OF THE GOVERNMENT, ALSO MUST BE REJECTED.

ACCEPTING, BUT ONLY FOR THE PURPOSE OF THE PRESENT DISCUSSION, THAT CCC WAS NO MORE THAN A "CONDUIT" FOR THE TRANSMISSION OF BIDS FROM CANADIAN FIRMS TO UNITED STATES CONTRACTING OFFICERS AND ASSUMING THAT THE BRISTOL AEROSPACE BID WITH THE BRISTOL AEROSPACE COVERING LETTER HAD BEEN FORWARDED TO NAVAIR, THE RESULT WOULD BE THE SAME AS IF THE BRISTOL AEROSPACE HAD HAND-CARRIED AND DEPOSITED THE BID AT THE RECEIVING CENTER. ITS SITUATION, AS INDICATED ABOVE, WOULD HAVE BEEN IDENTICAL WITH THAT OF HERCULES, INCORPORATED, AND ITS BID WOULD HAVE BEEN REQUIRED TO BE REJECTED AS NONRESPONSIVE. HENCE, THE BRISTOL AEROSPACE BID, STILL ASSUMING THAT IT IS THE BRISTOL AEROSPACE BID WHICH IS TO BE ACCEPTED BY NAVAIR, TO BECOME RESPONSIVE, WOULD HAVE TO BE IMPRESSED WITH SOME MAGIC IN THE CCC LETTER OF TRANSMITTAL. THIS DEFINITELY WOULD BE VIOLATIVE OF THE COMPETITIVE BIDDING SYSTEM SINCE SUCH AN AVENUE OF PROCEDURE OR "CONDUIT" WAS NOT AND IS NOT AVAILABLE TO UNITED STATES BIDDERS, AND IN THIS CASE, TO HERCULES, INCORPORATED. IN ANY EVENT, WE HAVE ALREADY INDICATED THAT WE CONSIDER CCC AS THE BIDDER AND THE BID IT SUBMITS IS THE BID TO BE CONSIDERED.

NOR DO WE CONSIDER OUR EARLIER CONCLUSION AS AGAINST THE BEST INTERESTS OF THE UNITED STATES. THE GIVING OF AN ADVANTAGE TO ONE BIDDER NOT AVAILABLE TO COMPETITORS IS NOT CONDUCIVE TO FREE AND FULL COMPETITION AND TO THE EXTENT IT VIOLATES PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM, IT IS NOT IN THE BEST INTERESTS OF THE GOVERNMENT. ANY TIME A LOW BID IS REJECTED AS NONRESPONSIVE, OR FOR OTHER PROPER REASON, THE MONETARY INTERESTS OF THE GOVERNMENT MAY BE PREJUDICED, BUT SUCH INTEREST IS OVERRIDDEN BY THE DESIRE TO PRESERVE THE SYSTEM.