B-169425, JUN. 12, 1970

B-169425, JUN. 12, 1970

ADVERTISING--NEGOTIATION AFTER ADVERTISING UNDER INVITATION FOR BIDS FOR ALUMINUM WINDOWS REQUIRING SUBMISSION OF SAMPLES AND DESCRIPTIVE LITERATURE, AND ABSENT EVIDENCE OF ANY IRREGULARITY OR PRESSURE EXERTED TO DISQUALIFY BIDDERS, PROCURING ACTIVITY'S DETERMINATION THAT ALL BIDS ARE NONRESPONSIVE FOR FAILURE TO COMPLY WITH SAMPLE REQUIREMENT IS JUSTIFICATION FOR DISCARDING ALL BIDS AND, PURSUANT TO NATIONAL AERONAUTICS AND SPACE ADMINISTRATION PROCUREMENT REGULATION PAR. 3.210-2, NEGOTIATING PROCUREMENT UNDER AUTHORITY OF 10 U.S.C. 2304(A)(10). NO COMPETITIVE ADVANTAGE ACCRUES FROM PRIOR PUBLIC OPENING SINCE ALL OFFERORS HAVE EQUAL KNOWLEDGE OF DISCLOSED PRICES AND EQUAL OPPORTUNITY TO SUBMIT NEW OFFERS AS THEY MIGHT CHOOSE. SEE 36 COMP. GEN. 364 (1956). BIDS--PREPARATION--COSTS- RECOVERY IN FORMALLY ADVERTISED PROCUREMENT WHERE ALL BIDS WERE PROPERLY REJECTED AS NONRESPONSIVE AND PROCUREMENT THEREAFTER NEGOTIATED PURSUANT TO AUTHORITY OF NATIONNAL AERONAUTICS AND SPACE ADMINISTRATION PROCUREMENT REGULATION PAR. 3.210-2(III), UNSUCCESSFUL OFFEROR WHO HAS ALSO PARTICIPATED AS BIDDER IS NOT ENTITLED TO RECOVERY OF BID PREPARATION COSTS SINCE RECOVERY OF BID PREPARATION COSTS IS LIMITED TO CASE WHERE CONTRACT IS AWARDED TO OTHER THAN LOW BIDDER BECAUSE OF LACK OF GOOD FAITH OR ARBITRARY OR CAPRICIOUS ACTION ON PART OF GOVERNMENT OFFICIALS. SEE CT. CASE CITED. CONTRACTS--SPECIFICATIONS--SAMPLES- NONCOMPLIANCE WITH SPECIFICATIONS UNDER INVITATION FOR BIDS FOR ALUMINUM WINDOWS WHICH REQUIRED SUBMISSION WITH BID OF SAMPLES AND DESCRIPTIVE LITERATURE, BID WAS NONRESPONSIVE WHICH FAILED TO COMPLY WITH REQUIREMENTS REGARDING SAMPLE SINCE DEVIATIONS FROM SPECIFICATIONS RELATIVE TO DESIGN AND PARTS GO TO SUBSTANCE OF BID AND MAY NOT BE WAIVED AS MINOR INFORMALITIES, AND SAMPLE REQUIREMENT PERMITS ADMINISTRATIVE DETERMINATION OF LIMITS OF CONTRACTOR'S OBLIGATION. MOREOVER, FACTUAL DETERMINATION OF WHETHER OFFERED ITEMS MEET SPECIFICATIONS IS PRIMARILY THAT OF PROCURING ACTIVITY. SEE COMP. GEN. DECS. CITED.

TO THE ADAMS & WESTLAKE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 24, 1970, WITH ENCLOSURES, PROTESTING THE REJECTION OF YOUR LOW BID ON A PROJECT COVERED BY INVITATION FOR BIDS NO. C-452563 (IFB), AND REQUESTING OUR OFFICE TO REVIEW THE PROCUREMENT PROCEDURES WHEREBY A CONTRACT FOR SUBSTANTIALLY THE SAME ITEM WAS AWARDED TO AMELCO WINDOW CORPORATION (AMELCO) UNDER REQUEST FOR PROPOSALS NO. C-452563, ISSUED BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), LEWIS RESEARCH CENTER (LERC), CLEVELAND, OHIO.

THE INSTANT PROCUREMENT WAS FOR SERVICES, LABOR, MATERIAL AND EQUIPMENT FOR INSTALLATION OF NEW ALUMINUM WINDOWS IN THE MATERIALS AND STRESSES LABORATORY AND THE CHEMISTRY LABORATORY AT LERC. INITIALLY, THE REQUIREMENT WAS SOLICITED BY THE IFB WHICH WAS ISSUED ON NOVEMBER 3, 1969. THE IFB REQUIRED BIDDERS TO SUBMIT SAMPLES AND DESCRIPTIVE LITERATURE, JUSTIFICATION FOR WHICH WAS DOCUMENTED AS FOLLOWS:

"THE TYPE OF WINDOW REQUIRED UNDER SUBJECT INVITATION WAS PREVIOUSLY AVAILABLE FROM ONLY ONE SOURCE. ALTHOUGH THESE SPECIFICATIONS HAVE BEEN PREPARED TO ALLOW FOR COMPETITIVE BIDDING, THERE IS NO ASSURANCE THAT INDUSTRY CAN MEET ALL OF THE SALIENT CHARACTERISTICS CONTAINED THEREIN SINCE THERE IS NO INDUSTRY STANDARD FOR THIS TYPE OF WINDOW.

"IN ORDER TO BE COMPETITIVE, PROSPECTIVE FIRMS WOULD HAVE TO MAKE SOME MODIFICATIONS IN THEIR STANDARD UNITS TO MEET OUR SPECIFICATIONS. THERE ARE MANY WAYS IN WHICH THE MANUFACTURERS CAN VARY THEIR DESIGNS WITHOUT AFFECTING THE ESSENTIAL CHARACTERISTICS OF THE PRODUCT. THE SPECIFICATIONS ARE NOT COMPLETELY DEFINITIVE AND DO NOT DESCRIBE ALL OF THE CHARACTERISTICS REQUIRED; THEREFORE IT IS NECESSARY TO REQUIRE THE BIDDER TO SUBMIT A SAMPLE TO ASSURE PROCUREMENT OF AN ACCEPTABLE PRODUCT.

"FURTHER, IT IS NECESSARY TO OBTAIN DESCRIPTIVE LITERATURE TO EXAMINE IN DETAIL THE NUMEROUS SALIENT FEATURES SPECIFIED TO DETERMINE IN ADVANCE OF AWARD OF CONTRACT EXACTLY WHAT THE BIDDER PROPOSES TO FURNISH AND WHETHER THE WINDOW UNITS OFFERED MEET THE MINIMUM REQUIREMENTS OF PERFORMANCE, CONSTRUCTION, INSTALLATION, UTILITY AND MAINTENANCE."

WE WERE ALSO INFORMALLY ADVISED THAT THE LABORATORY ROOMS THAT WERE TO RECEIVE THE WINDOWS HOUSED VERY DELICATE AND PRECISE INSTRUMENTS WHICH REQUIRED EXTRA PROTECTION THAT WOULD BE AFFORDED BY THIS SPECIAL TYPE OF WINDOW.

THE FOLLOWING BIDS WERE OPENED AS SCHEDULED ON DECEMBER 9, 1969:

BIDDER AMOUNT

FRED J. CRISP (ADAMS & WESTLAKE AGENT) $159,984.00

DECATUR IRON & STEEL COMPANY 166,596.00

AMELCO WINDOW CORPORATION 172,400.00

TECTONICS INC. 179,000.00

STERLING PLATE GLASS (ALPANA) 229,000.00

AFTER A REVIEW OF THE SAMPLES AND LITERATURE FURNISHED BY THE BIDDERS IT WAS DETERMINED THAT NONE OF THE BIDS WAS FULLY RESPONSIVE TO ALL OF THE SPECIFIED REQUIREMENTS. SPECIFICALLY, IT WAS FOUND THAT YOUR BID WAS NOT RESPONSIVE IN THE FOLLOWING RESPECTS:

1. WAND OPERATOR FOR VENETIAN BLINDS WAS NOT INCLUDED IN SAMPLE.

2. PERFORMANCE REQUIREMENTS TEST DATA WAS NOT BASED ON A HORIZONTALLY PIVOTED WINDOW AND THERE WAS NO DATA ON SOLAR HEAT GAIN. WATER INFILTRATION DATA WAS AT A LOWER PRESSURE THAN SPECIFIED.

3. WINDOW FASTENERS WERE VISIBLE IN SOME LOCATIONS.

4. THERE WAS NO HORIZONTAL WINDOW ADJUSTMENT AT MULLIONS OR JAMBS.

5. MULTIPLE UNITS WERE NOT SECURED IN FIELD.

6. PIVOTING HARDWARE WAS EXPOSED.

7. NO STAINLESS STEEL STAY ARM WAS INCLUDED WITH SAMPLE.

ACCORDINGLY, ON DECEMBER 16, 1969, THE FOLLOWING TELEGRAM WAS SENT TO ALL BIDDERS:

"ALL BIDS RECEIVED UNDER INVITATION FOR BIDS NO. C-452563 HAVE BEEN DECLARED NON-RESPONSIVE FOR FAILURE TO COMPLY WITH THE REQUIREMENTS REGARDING SAMPLES AND/OR LITERATURE. AWARD WILL THEREFORE NOT BE MADE UNDER THE INVITATION AS ISSUED. THE GOVERNMENT HAS DECIDED TO PROCURE THE WINDOWS BY NEGOTIATION. EACH OFFEROR WILL BE CONTACTED BY TELEPHONE SHORTLY TO ARRANGE A MEETING TO CONDUCT NEGOTIATIONS."

SINCE NO RESPONSIVE BIDS WERE RECEIVED AFTER FORMAL ADVERTISING THE CONTRACTING OFFICER EXECUTED A DETERMINATION AND FINDING (D&F) ON DECEMBER 22, 1969, TO PROCURE THE WINDOWS UNDER THE AUTHORITY OF PARAGRAPH 3.210- 2(III) OF THE NASA PROCUREMENT REGULATION AUTHORIZING NEGOTIATION, PURSUANT TO 10 U.S.C. 2304(A)(10), "WHEN BIDS HAVE BEEN SOLICITED PURSUANT TO THE REQUIREMENTS OF FORMAL ADVERTISING, AND NO RESPONSIVE BID HAS BEEN RECEIVED FROM A RESPONSIBLE BIDDER *** ."

IN THE D&F THE CONTRACTING OFFICER ALSO FOUND:

"3. AS DEMONSTRATED BY THE RESPONSE TO THE ADVERTISED INVITATION, IT IS IMPRACTICAL TO WRITE A DETAILED SPECIFICATION FOR THE WINDOWS WHICH WILL NOT UNDULY RESTRICT COMPETITION."

CONSEQUENTLY RFP NO. C-452563, WITH REVISED SPECIFICATIONS, WAS ISSUED UNDER DATE OF DECEMBER 30, 1969. IT IS REPORTED THAT NEGOTIATIONS HAD BEEN COMMENCED WITH THOSE ORIGINAL BIDDERS WHO HAD EXPRESSED INTEREST IN COMPETING FOR THE PROJECT BEFORE THE ACTUAL RELEASE OF THE RFP ON JANUARY 14, 1970. ALL PROSPECTIVE OFFERORS WERE ADVISED DURING NEGOTIATIONS AS TO THE NATURE OF THE SPECIFICATION CHANGES TO BE INCORPORATED IN THE RFP, AND VARIOUS QUESTIONABLE ITEMS WERE CLARIFIED.

BY TELEGRAM OF JANUARY 27, 1970, THE PROSPECTIVE OFFERORS WERE ADVISED THAT THERE WOULD BE NO PUBLIC OPENING OF PROPOSALS. THE OFFERS RECEIVED ON THE CLOSING DATE, JANUARY 28, 1970, WERE AS FOLLOWS:

OFFEROR AMOUNT

AMELCO WINDOW CORPORATION $155,970.00

DECATUR IRON & STEEL COMPANY 157,998.00

ADAMS AND WESTLAKE COMPANY 158,800.00

ALL OFFERS WERE FOUND TO BE RESPONSIVE AND AWARD WAS MADE TO THE LOW OFFEROR, AMELCO, ON FEBRUARY 9, 1970.

FOLLOWING THE AWARD TO AMELCO, CORRESPONDENCE ENSUED BETWEEN YOUR FIRM AND THE CONTRACTING OFFICER, COPIES OF WHICH WERE FURNISHED WITH YOUR LETTER OF MARCH 24, 1970.

IN SUMMARY, YOUR MAJOR CONTENTIONS ARE THAT YOUR BID WAS "GENERALLY" RESPONSIVE TO THE IFB; THAT YOUR REPRESENTATIVES IN ATTENDANCE AT BID OPENING WERE ADVISED THAT AWARD WOULD BE MADE TO YOUR COMPANY; THAT IN VIEW OF THE MINOR MODIFICATIONS MADE TO THE ORIGINAL SPECIFICATIONS, IT IS INCONCEIVABLE THAT AMELCO, IN LIGHT OF SPIRILING COSTS AND INFLATION, WOULD BE ABLE TO REDUCE ITS BID FROM $172,400 TO $155,970; AND THAT SINCE YOUR BID BECAME PUBLIC INFORMATION ON DECEMBER 9, 1969, THE DECISION TO RECEIVE AND PRIVATELY OPEN OFFERS AT A LATER DATE GAVE YOUR COMPETITION AN UNFAIR ADVANTAGE AT THE TIME OF REBIDDING. YOU ALSO SUGGEST THAT "WE FEEL AS THOUGH SOME IRREGULARITIES OR PRESSURE WAS EXERTED TO DISQUALIFY BIDDERS SO NEW PROPOSALS COULD BE SUBMITTED." IN ADDITION, YOU STATE THAT YOUR FIRM SHOULD BE REIMBURSED FOR EXPENSES IN PREPARING ITS BID.

NASA HAS DENIED THAT THERE WERE ANY "IRREGULARITIES OR PRESSURES EXERTED" TO DISQUALIFY ALL BIDDERS SO THAT THE REQUIREMENT COULD BE NEGOTIATED OR THAT THE BIDS WERE REJECTED FOR ANY REASON OTHER THAN BEING NONRESPONSIVE TO THE TECHNICAL REQUIREMENTS OF THE IFB. IN THE ABSENCE OF AN IDENTIFICATION OF THE ALLEGED IMPROPER CONDUCT, WE FIND NO BASIS FOR QUESTIONING THE ADMINISTRATIVE POSITION THAT FACTORS OF SUCH NATURE WERE NOT INVOLVED IN THE EVALUATION OF THE BIDS. ALTHOUGH YOU CONTEND THAT YOUR BID WAS "GENERALLY" RESPONSIVE, A BID WHICH CONFORMS ONLY IN A GENERAL MANNER TO THE SPECIFICATION REQUIREMENTS, AND FAILS TO MEET ALL OF THE MATERIAL DETAILS THAT WERE SET OUT AS ESSENTIAL FOR THE GOVERNMENT'S NEEDS, IS NOT SUFFICIENTLY RESPONSIVE FOR ACCEPTANCE IN A FORMALLY ADVERTISED PROCUREMENT. WHILE MINOR INFORMALITIES MAY BE WAIVED, DEVIATIONS FROM THE ADVERTISED SPECIFICATIONS RELATIVE TO THE DESIGN AND PARTS OF THE ARTICLE BID UPON GO TO THE SUBSTANCE OF THE BID AND MAY NOT BE WAIVED SO AS TO CONSIDER THE BID FOR ACCEPTANCE. 30 COMP. GEN. 179 (1950).

THE REQUIREMENT IN THE FORMALLY ADVERTISED IFB THAT SAMPLES AND DESCRIPTIVE LITERATURE BE FURNISHED WAS TO PERMIT A DETERMINATION BY THE PROCURING AGENCY OF PRECISELY WHAT THE BIDDER PROPOSED, AND WOULD BE BOUND, TO FURNISH IF AWARDED THAT CONTRACT. 39 COMP. GEN. 595 (1960). HENCE, THE DETERMINATION, AFTER TECHNICAL ANALYSIS, THAT NONE OF THE SAMPLES WAS IN ACCORDANCE WITH THE SPECIFICATIONS MUST BE REGARDED AS REQUIRING THE REJECTION OF ALL BIDS. IT IS WELL ESTABLISHED THAT THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF THE PROCURING AGENCY AND FOR DETERMINING FACTUALLY WHETHER ARTICLES OFFERED BY BIDDERS MEET THOSE SPECIFICATIONS IS PRIMARILY THAT OF THE PROCURING AGENCY. 17 COMP. GEN. 554 (1938); 36 ID. 251 (1956); 39 ID. 86 (1959). WE CANNOT CONCLUDE FROM THE EVIDENCE OF RECORD THAT THE DETERMINATION THAT ALL SAMPLES FAILED TO MEET THE SPECIFIED REQUIREMENTS WAS ARBITRARY OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

CONCERNING THE SUBSTANTIAL REDUCTION BY AMELCO IN ITS ORIGINAL PRICE, WE HAVE NO PARTICULAR INFORMATION AS TO WHETHER THAT PRICE WAS, IN FACT, REALISTIC OR AS TO THE REASONING EMPLOYED IN DECIDING THE AMOUNT OF THE REDUCTION THAT WAS MADE. WE HAVE OBSERVED, HOWEVER, THAT IT IS NOT UNUSUAL FOR BIDDERS WHOSE PRICES WERE NOT COMPETITIVE IN A SOLICITATION TO MAKE A SUBSTANTIAL REDUCTION IN THOSE PRICES UPON A RESOLICITATION FOR THE ITEM AFTER THE BIDDERS WERE INFORMED OF THE AMOUNTS ORIGINALLY QUOTED BY THEIR COMPETITORS. HERE, ALL PROSPECTIVE OFFERORS WERE AWARE OF THE PRICES SUBMITTED BY EACH BIDDER UNDER THE IFB, AND HAD AN EQUAL OPPORTUNITY TO SUBMIT SUCH NEW OFFERS AS THEY MIGHT CHOOSE. SEE 36 COMP. GEN. 364 (1956) WHEREIN WE STATED AT PAGE 366:

"IT IS OBVIOUS THAT THE IMPOSITION OF ANY RESTRICTION ON A PROSPECTIVE BIDDER WHICH WOULD REQUIRE HIM TO SUBMIT A BID BEARING ANY PARTICULAR RELATIONSHIP TO A PREVIOUSLY REJECTED BID WOULD DEFEAT THE VERY PURPOSE FOR WHICH THE ADVERTISING STATUTES WERE ENACTED."

CONCERNING YOUR CLAIM THAT YOUR FIRM IS ENTITLED TO RECOVER ITS EXPENSES FOR THE PREPARATION OF ITS BID, THIS OFFICE AND THE COURTS HAVE CONSISTENTLY HELD THAT BIDDERS CANNOT ORDINARILY RECOVER SUCH EXPENSES. WHILE IN HEYER PRODUCTS COMPANY, INC. V. UNITED STATES, 177 F. SUPP. 251, 1959, THE COURT RULED THAT SUCH EXPENSES MAY BE RECOVERABLE WHERE A CONTRACT IS AWARDED TO OTHER THAN THE BIDDER LEGALLY ENTITLED THERETO, BECAUSE OF LACK OF GOOD FAITH OR ARBITRARY OR CAPRICIOUS ACTION ON THE PART OF GOVERNMENT OFFICIALS, IT DID NOT EXPRESSLY OR BY INFERENCE EXTEND THAT PRINCIPLE TO SITUATIONS WHERE ALL BIDS ARE PROPERLY REJECTED IN GOOD FAITH PURSUANT TO THE AUTHORITY VESTED IN THE PROCUREMENT AGENCY BY LAW AND REGULATION. THERE IS NO EVIDENCE IN THIS CASE INDICATING BAD FAITH OR ARBITRARY OR CAPRICIOUS ACTS BY THE GOVERNMENT PERSONNEL CONCERNED, BUT ONLY A FAILURE OF ALL BIDDERS TO OFFER ARTICLES WHICH CONFORMED TO THE REQUIREMENTS SPECIFIED IN THE IFB.

IN THE CIRCUMSTANCES HERE INVOLVED, IT IS OUR VIEW THAT THERE IS NO LEGAL BASIS ON WHICH TO QUESTION THE REJECTION OF YOUR BID OR THE SUBSEQUENT NEGOTIATION OF THE PROCUREMENT BY NASA. YOUR ..END :