B-169641, APR 19, 1971

B-169641: Apr 19, 1971

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WILL NOT PROPOSE LEGISLATION UNDER 31 U.S.C. 236. DEPENDING UPON WHICH IS MORE IN THE INTEREST OF THE GOVERNMENT. ART STEEL WAS ENTITLED TO SUBMIT A BID ON A QUANTITY LESS THAN THAT SPECIFIED IN THE INVITATION AND GSA HAD A RIGHT TO SPLIT THE AWARD - 29. BECAUSE THE CONTRACTING OFFICER KNEW THAT CLAIMANT'S TOOLING COSTS WOULD BE IN EXCESS OF THE AMOUNT OF THE CONTRACT AWARDED HE SHOULD HAVE REQUESTED A BID VERIFICATION FOR 2. RELIEF IS LIMITED TO THE DIFFERENCE BETWEEN THE BID AS SUBMITTED AND ACCEPTED FOR THE QUANTITY DELIVERED AND THE NEXT LOW BID PRICE FOR THE SAME QUANTITY. THE CLAIM WILL NOT BE SUBMITTED TO CONGRESS. INC.: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 28. THE CITED INVITATION WAS FOR A DEFINITE QUANTITY CONTRACT FOR A TOTAL OF 31.

B-169641, APR 19, 1971

CONTRACTS - SPLIT AWARD - MERITORIOUS CLAIMS ACT DECISION THAT THE COMP. GEN. WILL NOT PROPOSE LEGISLATION UNDER 31 U.S.C. 236, MERITORIOUS CLAIMS ACT, TO AUTHORIZE PAYMENT OF $46,439.17 IN REIMBURSEMENT OF LOSSES ARISING FROM THE ACTION OF GSA IN MAKING SPLIT AWARDS UNDER AN IFB TO EMERCO AND ART STEEL COMPANY, INC., FOR A QUANTITY OF STEEL INDEX CARD BOXES. BECAUSE SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, PARAGRAPH 10(C) HAS BEEN INTERPRETED BY THE COMP. GEN. AS PERMITTING AWARDS TO BE MADE TO ONE OR MORE BIDDERS, DEPENDING UPON WHICH IS MORE IN THE INTEREST OF THE GOVERNMENT, ART STEEL WAS ENTITLED TO SUBMIT A BID ON A QUANTITY LESS THAN THAT SPECIFIED IN THE INVITATION AND GSA HAD A RIGHT TO SPLIT THE AWARD - 29,183 UNITS TO ART STEEL AT ITS BID PRICE OF $2.78 PER UNIT AND 2,713 UNITS TO EMECO AT ITS BID PRICE OF $3.04 PER UNIT. HOWEVER, BECAUSE THE CONTRACTING OFFICER KNEW THAT CLAIMANT'S TOOLING COSTS WOULD BE IN EXCESS OF THE AMOUNT OF THE CONTRACT AWARDED HE SHOULD HAVE REQUESTED A BID VERIFICATION FOR 2,713 UNITS AT $3.04 PER UNIT. RELIEF IS LIMITED TO THE DIFFERENCE BETWEEN THE BID AS SUBMITTED AND ACCEPTED FOR THE QUANTITY DELIVERED AND THE NEXT LOW BID PRICE FOR THE SAME QUANTITY. THEREFORE, THE CLAIM WILL NOT BE SUBMITTED TO CONGRESS.

TO EMECO INDUSTRIES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 28, 1970, AND PRIOR CORRESPONDENCE, CONCERNING THE LOSSES SUSTAINED BY YOUR FIRM IN PERFORMING GENERAL SERVICES ADMINISTRATION (GSA) CONTRACT NO. GS-03S 33359. YOU REQUEST THAT OUR OFFICE PROPOSE LEGISLATION UNDER 31 U.S.C. 236 WHICH WOULD AUTHORIZE THE PAYMENT OF $46,439.17 IN REIMBURSEMENT OF LOSSES ARISING FROM THE ACTION OF GSA IN MAKING SPLIT AWARDS UNDER INVITATION FOR BIDS NO. WA-A2-R-B21147-10-14-69.

THE CITED INVITATION WAS FOR A DEFINITE QUANTITY CONTRACT FOR A TOTAL OF 31,896 STEEL INDEX CARD BOXES FOR DELIVERY TO ACTIVITIES OF THE MARINE CORPS, AIR FORCE, ARMY, AND NAVY. WHEN BIDS WERE OPENED ON OCTOBER 14, 1969, EMECO WAS THE APPARENT LOW BIDDER AT $3.04 EACH. CONSEQUENTLY, ON OCTOBER 16, 1969, A REQUEST WAS MADE FOR A PLANT FACILITIES REPORT ON EMECO. SUBSEQUENT TO THE SUBMISSION OF THE REQUEST FOR THE PLANT FACILITIES REPORT, BUT PRIOR TO THE AWARD OF A CONTRACT TO EMECO, THE CONTRACTING OFFICE RECEIVED A LATE BID FROM ART STEEL COMPANY, INC., WHICH HAD BEEN SENT BY CERTIFIED MAIL. IN ACCORDANCE WITH SECTION 1-2.303-3 OF THE FEDERAL PROCUREMENT REGULATIONS, WHICH ALLOWS FOR THE CONSIDERATION OF LATE BIDS IF THE LATE RECEIPT WAS DUE SOLELY TO A DELAY IN THE MAILS, THE PROCURING ACTIVITY PROCEEDED TO DETERMINE WHETHER ART STEEL'S LATE BID COULD BE CONSIDERED. ULTIMATELY, IT WAS DETERMINED BY THE PROCURING ACTIVITY THAT THE ART STEEL BID WAS TIMELY MAILED AND, THEREFORE, SHOULD BE OPENED AND CONSIDERED FOR AWARD. UPON OPENING ART STEEL'S BID, IT WAS NOTED THAT ITS BID PRICE FOR THE INDEX CARD BOXES WAS $2.78 EACH BUT THAT IT HAD QUALIFIED ITS BID IN THE FOLLOWING MANNER:

"BIDDING ON QUANTITY LESS THAN SPECIFIED, IN ACCORDANCE WITH PROVISION CONTAINED IN PARAGRAPH 10C OF STANDARD FORM 33A. BID COVERS ALL QUANTITIES SPECIFIED EXCEPT 2,713 BOXES FOR NAVY REQUIREMENTS *** ."

PARAGRAPH 10(C) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, MARCH 1969, ATTACHED TO THIS INVITATION PROVIDED:

"(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER."

THIS PARAGRAPH HAS BEEN INTERPRETED BY OUR OFFICE AS PERMITTING AWARDS TO BE MADE TO ONE OR MORE BIDDERS, DEPENDING UPON WHICH IS MORE IN THE INTEREST OF THE GOVERNMENT. SEE B-154644, SEPTEMBER 28, 1964; B 145859, MAY 22, 1961. THE PROCURING ACTIVITY DETERMINED THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO SPLIT THE AWARD BETWEEN EMECO AND ART STEEL. ACCORDINGLY, FOLLOWING THE COMPLETION OF THE EVALUATION OF ALL THE BIDS SUBMITTED, PURCHASE ORDERS WERE ISSUED ON DECEMBER 3, 1969, TO EMECO AND ART STEEL FOR FURNISHING 2,713 AND 29,183 INDEX CARD BOXES, RESPECTIVELY, AT THEIR BID PRICES. YOU STATE THAT EMECO'S PRICE OF $3.04 WAS PREDICATED ON 31,896 INDEX CARD BOXES BEING DELIVERED TO 1,500 DESTINATIONS LISTED IN THE INVITATION. ALSO, YOU OBSERVE THAT THE CONTRACT AWARDED TO EMECO COVERED DELIVERY OF 2,713 INDEX CARD BOXES TO 1,355 DESTINATIONS, WHEREAS THE CONTRACT AWARDED TO ART STEEL COVERED DELIVERY OF 29,183 INDEX CARD BOXES TO ONLY 145 DESTINATIONS. FURTHER, YOU NOTE THAT FROM THE INFORMATION FURNISHED BY YOUR REPRESENTATIVE TO THE GSA PREAWARD MONITOR, GSA WAS AWARE THAT EMECO'S TOOLING COSTS WOULD AMOUNT TO APPROXIMATELY $10,300, OR IN EXCESS OF THE AMOUNT OF THE CONTRACT AWARDED TO EMECO.

WE HAVE FURNISHED YOUR FIRM WITH A COPY OF THE ADMINISTRATIVE REPORT, AND WHILE YOU TAKE ISSUE THEREWITH, WE ARE UNABLE TO GRANT THE RELIEF REQUESTED. ALTHOUGH MANY CONTENTIONS AND/OR ALLEGATIONS ARE RAISED IN AN EFFORT TO REFUTE GSA'S POSITION, WE FEEL THAT THE CONTROLLING QUESTION IS WHETHER A VALID AND BINDING CONTRACT RESULTED WHEN AWARD WAS MADE TO EMECO FOR LESS THAN THE QUANTITY IT BID UPON. FOR IF THE AWARD WAS VALID UNDER THE INVITATION AND EMECO'S BID AS ACCEPTED, NO LEGAL BASIS EXISTS FOR PAYMENT OF ANY ADDITIONAL AMOUNT UNDER THE PURCHASE ORDER.

RESPECTING THE RIGHT OF ART STEEL TO QUALIFY ITS BID AS TO THE QUANTITY IT WOULD ACCEPT AND AS TO THE RIGHT OF THE GOVERNMENT TO MAKE SPLIT AWARDS UNDER THE SUBJECT DEFINITE QUANTITY SOLICITATION, WE MUST LOOK TO THE PROVISIONS OF THE SOLICITATION. WE FIND NO LANGUAGE THEREIN WHICH COULD BE CONSTRUED AS NECESSARILY REQUIRING AN AWARD TO A SINGLE BIDDER. ON THE CONTRARY, UNDER PARAGRAPH 10(C) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, QUOTED ABOVE, ART STEEL WAS ENTITLED TO SUBMIT A BID ON A QUANTITY LESS THAN THAT SPECIFIED IN THE SOLICITATION AND GSA HAD A CORRELATIVE RIGHT TO MAKE SUCH AN AWARD TO ART STEEL AND TO AWARD THE REMAINING QUANTITY TO EMECO UNDER ITS UNQUALIFIED BID. IN OTHER WORDS, WE BELIEVE THAT THERE WAS A PROPER BASIS FOR THE CONTRACTING OFFICER TO MAKE AN AWARD TO ART STEEL UNDER ITS RESTRICTED BID FOR FURNISHING 29,183 INDEX CARD BOXES, AND THAT SINCE EMECO WAS THE NEXT LOWEST BIDDER ON THE REMAINING QUANTITY OF BOXES, THE CONTRACTING OFFICER WAS ENTITLED UNDER THE INVITATION AND EMECO'S BID TO AWARD EMECO THE BALANCE OF 2,713 BOXES.

YOU ALLEGE THAT YOUR FIRM WAS ENTRAPPED BY THE RECEIPT OF THE PURCHASE ORDER INTO BELIEVING THAT THE ENTIRE QUANTITY OF 31,896 CARD BOXES HAD BEEN AWARDED TO YOUR FIRM SINCE YOU WERE THE LOW BIDDER AT THE TIME OF THE BID OPENING AND YOU HAD NOT BEEN ADVISED BY GSA OF THE RECEIPT OF AN ACCEPTABLE LATE BID FROM ART STEEL. YOU STATE THAT SINCE THE PURCHASE ORDER, WHICH COVERED THE NAVY'S REQUIREMENTS FOR CARD BOXES, CITED CONTRACT NO. GS-03S-33359, YOU BELIEVED THAT THIS PURCHASE ORDER WAS THE FIRST OF A SERIES OF PURCHASE ORDERS TO BE ISSUED PURSUANT TO THE CONTRACT.

YOU HAVE STATED THAT THERE WAS NOTHING ON THE PURCHASE ORDER TO INDICATE THAT IT REPRESENTED THE TOTAL AWARD TO YOUR FIRM. HOWEVER, THE INVITATION FOR BIDS PROVIDED FOR A DEFINITE QUANTITY CONTRACT AND THE TIME OF DELIVERY WAS THE SAME FOR THE ENTIRE QUANTITY IN THE INVITATION WITH NO PROVISION MADE FOR THE ISSUANCE OF ORDERS ON AN INCREMENTAL BASIS. FURTHER, ON THE BOTTOM HALF OF THE PURCHASE ORDER, IN THE SPACE ENTITLED "THIS ORDER IS ISSUED PURSUANT TO," THERE APPEARS THE NOTATION, "AWARDED UNDER INVITATION # WA-A2-R-B21147." IN THE CIRCUMSTANCES, THE FACT THAT THE PURCHASE ORDER INDICATED THAT THE QUANTITY WAS AWARDED UNDER THE INVITATION SHOULD HAVE ALERTED YOU TO THE FACT THAT THE PURCHASE ORDER WAS NOT THE FIRST OF A SERIES OF ORDERS TO BE ISSUED UNDER THE CONTRACT.

WE AGREE WITH GSA THAT YOUR FIRM COULD HAVE INSERTED AN "ALL OR NONE" CONDITION IN YOUR BID THAT IT WOULD NOT ACCEPT AN AWARD FOR LESS THAN THE ENTIRE QUANTITY TO BE AWARDED BY THE GOVERNMENT UNDER THE SUBJECT INVITATION. HOWEVER, SINCE YOU DID NOT DO SO, WE WOULD NOT BE WARRANTED IN OBJECTING TO GSA'S DETERMINATION TO MAKE SPLIT AWARDS.

ALTHOUGH THE PERFORMANCE OF YOUR FIXED-PRICE CONTRACT WAS MORE EXPENSIVE THAN EXPECTED, SUCH FACT ALONE DOES NOT ENTITLE YOU TO ADDITIONAL COMPENSATION. SEE 40 COMP. GEN. 684, 687-688 (1961).

YOU CONTEND THAT YOUR UNIT BID PRICE OF $3.04 WAS BASED UPON AWARD OF THE ENTIRE QUANTITY ADVERTISED, NAMELY, 31,896 CARD BOXES, AND NOT UPON 2,713 BOXES, THE NUMBER AWARDED TO YOUR FIRM. YOU HAVE POINTED OUT THAT FROM THE INFORMATION FURNISHED BY YOUR REPRESENTATIVE TO THE GSA PREAWARD MONITOR, GSA WAS AWARE THAT EMECO'S TOOLING COSTS WOULD AMOUNT TO APPROXIMATELY $10,300, OR IN EXCESS OF THE AMOUNT OF THE CONTRACT AWARDED TO EMECO. A QUESTION THEN ARISES AS TO WHETHER THE ACCEPTANCE BY GSA OF EMECO'S BID UNDER THESE CIRCUMSTANCES RESULTED IN A VALID AND BINDING CONTRACT IN THAT IT COULD BE SAID THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED EMECO TO CONFIRM WHETHER ITS BID PRICE FOR 2,713 UNITS AT $3.04 PER UNIT WAS AS INTENDED IN VIEW OF ITS DISCLOSED TOOLING COSTS.

WE ARE OF THE OPINION THAT SINCE THE PREAWARD SURVEY DISCLOSED THAT THE AMOUNT OF YOUR FIRM'S TOOLING COSTS EXCEEDED THE AMOUNT OF THE CONTRACT AWARDED TO EMECO, THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THE POSSIBILITY OF AN ERROR IN YOUR BID AND SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO AWARD. SINCE THE ACCEPTANCE OF YOUR BID DID NOT RESULT IN A VALID AND BINDING CONTRACT, AUTHORITY EXISTS FOR REFORMATION OF THE CONTRACT IF IT BE ESTABLISHED THAT EMECO DID IN FACT MAKE AN ERROR IN BID AND THE AMOUNT OF THE INTENDED BID. IN ANY EVENT, SUCH RELIEF WOULD BE LIMITED TO THE DIFFERENCE BETWEEN THE BID AS SUBMITTED AND ACCEPTED FOR THE QUANTITY DELIVERED AND THE NEXT LOW BID PRICE FOR THE SAME QUANTITY. C. N. MONROE MANUFACTURING COMPANY V UNITED STATES, 143 F. SUPP. 449 (1956); M. L. SHEPARD V UNITED STATES, 95 CT. CL. 407 (1942); 37 COMP. GEN. 685 (1958).

SINCE THE EQUITABLE RELIEF WHICH MAY BE GRANTED UNDER THE CIRCUMSTANCES IS THAT SET OUT ABOVE, AND SINCE WE DO NOT FIND OTHER OVERRIDING EQUITIES, YOUR REQUEST THAT OUR OFFICE SUBMIT YOUR CLAIM IN THE AMOUNT OF $46,439.17 TO THE CONGRESS AS AN EQUITABLE CLAIM UNDER 31 U.S.C. 236 IS DENIED.