B-169019, FEB. 25, 1970

B-169019, FEB. 25, 1970

BIDS--ALL OR NONE DECISION TO SECRETARY OF NAVY AS TO PROPRIETY OF AWARD TO SECOND LOW BIDDER. A BIDDER WHO SUBMITTED THE LOW AGGREGATE BID BUT FAILED TO SUBMIT PRICES FOR TWO ITEMS AS REQUIRED BY INVITATION MAY HAVE BID CONSIDERED FOR AWARD. ALTHOUGH PURPOSE OF REQUIRING BIDDERS SUBMITTING BIDS ON ITEM 3 TO ALSO SUBMIT PRICES ON ITEMS 1 AND 2 WAS INTENDED SUCH REQUIREMENT PRECLUDES SUBMISSION OF AN ALL OR NONE BID AND IS THEREFORE RESTRICTIVE OF COMPETITION.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 5, 1970, 00J: CJT: GW, SER 98, FROM THE DIRECTOR OF CONTRACTS, NAVAL SHIP SYSTEMS COMMAND, DEPARTMENT OF THE NAVY, REQUESTING OUR DECISION AS TO WHETHER AN AWARD MAY BE MADE TO THE SECOND LOW BIDDER UNDER INVITATION FOR BIDS NO. N00024-70-B-0530.

THE INVITATION FOR BIDS, ISSUED SEPTEMBER 23, 1969, CALLED FOR THE CONSTRUCTION AND DELIVERY OF 16 FIFTY FOOT UTILITY BOATS, PLUS RELATED DATA ITEMS. THE SOLICITATION REQUIRED THAT PRICES BE SUBMITTED ON AN ITEM BASIS FOR QUANTITIES AS FOLLOWS: ITEM 1 - 11 BOATS; ITEM 2 - 5 BOATS; AND ITEM 3, A COMBINATION OF ITEMS 1 AND 2 - 16 BOATS. SECTION A ENTITLED "SUPPLIES AND/OR SERVICES AND PRICES," ALSO PROVIDED, IN PART, AS FOLLOWS:

"* * * AWARDS) WILL BE MADE ON THE BASIS OF EITHER INDIVIDUAL ITEMS OR COMBINATION OF ITEMS AS SET FORTH HEREIN, WHICHEVER IS TO THE BEST INTEREST OF THE GOVERNMENT. HOWEVER, IF AN OFFEROR QUOTES A PRICE FOR ITEM 3, HE MUST ALSO SUBMIT PRICES FOR ITEMS 1 AND 2. IF AN OFFEROR QUOTES PRICES FOR BOTH OF ITEMS 1 AND 2, HE MUST ALSO SUBMIT A PRICE FOR ITEM 3."

TWO BIDS WERE RECEIVED AND OPENED ON NOVEMBER 7, 1969. GULFSTREAM SUBMITTED THE LOW BID ON ITEM 3 AT $49,875 PER BOAT, BUT DID NOT SUBMIT PRICES FOR ITEMS 1 AND 2. UNIFLITE, INCORPORATED, BID ON ALL ITEMS WITH BID ON ITEM 3 AT $50,982 PER BOAT.

THE CONTRACTING OFFICER CONSIDERED THE GULFSTREAM BID NONRESPONSIVE SINCE IT FAILED TO BID ON ITEMS 1 AND 2. THE ADMINISTRATIVE REPORT STATES THAT BECAUSE OF THE DETERMINATION OF NONRESPONSIVENESS, NO PREAWARD SURVEY WAS CONDUCTED TO DETERMINE WHETHER GULFSTREAM WAS RESPONSIBLE, AND NO EXTENSION OF THE PERIOD FOR ACCEPTANCE OF ITS BID WAS REQUESTED. GULFSTREAM'S BID EXPIRED ON JANUARY 6, 1970.

IT IS EXPLAINED THAT THE PROVISION REQUIRING BID PRICES ON EACH ITEM WAS INCLUDED IN THE IFB BECAUSE OF THE PECULIAR DELIVERY REQUIREMENTS. SECTION B THEREIN, ENTITLED "DELIVERIES", REQUIRED THAT THE ELEVEN BOATS UNDER ITEM 1 BE DELIVERED F.O.B. DESTINATION ON THE EAST COAST AND THAT THE FIVE BOATS UNDER ITEM 2 BE DELIVERED F.O.B. DESTINATION ON THE WEST COAST. IT WAS THOUGHT THAT SOME EAST COAST YARDS WOULD SUBMIT BIDS ONLY ON ITEM 1 AND THAT SOME WEST COAST YARDS WOULD SUBMIT BIDS ONLY ON ITEM 2. IT WAS THEREFORE CONSIDERED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO REQUIRE BIDDERS SUBMITTING BIDS ON ITEM 3, TO ALSO SUBMIT BIDS ON ITEMS 1 AND 2, SO THAT THE MOST ADVANTAGEOUS COMBINATION COULD BE AWARDED.

WE DO NOT QUESTION THE INTENDED PURPOSE OF THE REQUIREMENT; HOWEVER, WE CONCUR WITH THE DIRECTOR OF CONTRACTS THAT REQUIRING BIDS ON INDIVIDUAL ITEMS 1 AND 2 PRECLUDES AN ALL OR NONE BID. AS STATED IN THE ADMINISTRATIVE REPORT, OUR DECISION, B-168479, DECEMBER 31, 1969, TO THE SECRETARY OF THE NAVY, CONCERNED A SIMILAR PROVISION. WE STATED IN THAT DECISION, QUOTING FROM 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."

IT IS APPARENT THAT THE GULFSTREAM COMBINATION BID WAS THE LOW AGGREGATE BID FOR THE ITEMS REQUIRED AND THE CONTRACTING OFFICER SHOULD REQUEST GULFSTREAM TO REINSTATE ITS OFFER. IN THE EVENT GULFSTREAM DOES NOT ELECT TO REINSTATE ITS OFFER OR IF IT IS OTHERWISE FOUND NOT ELIGIBLE FOR AWARD, WE PERCEIVE NO LEGAL OBJECTION TO THE AWARD BEING MADE TO UNIFLITE.