B-169679, JUN. 19, 1970

B-169679: Jun 19, 1970

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PROTEST TO AWARD TO BIDDER OFFERING SUCH DISCOUNT IS DENIED SINCE IT IS LONG-ESTABLISHED GOVERNMENT POLICY TO CONSIDER DISCOUNTS IN EVALUATING BIDS FOR CONTRACTS AWARDED UNDER FORMAL ADVERTISEMENTS. CONSIDERATION OF SUCH DISCOUNT OFFERS IS LEGALLY ESSENTIAL IN EVALUATING BIDS. EVEN WHERE NO PROVISION THEREFOR IS MADE IN INVITATION CONCERNED. HARLAN FLOYD: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 7. THE TWO LOWEST BIDS WERE SUBMITTED BY YOU AND REED IN THE AMOUNTS OF $1. IT WAS DETERMINED THAT THE TIME ALLOWED WAS AMPLE FOR THE GOVERNMENT TO AVAIL ITSELF OF THE DISCOUNT. THE CONTRACT WAS AWARDED TO REED AS THE LOW BIDDER. ON THE PREMISE THAT DISCOUNTS SHOULD NOT HAVE BEEN CONSIDERED IN EVALUATING THE BIDS.

B-169679, JUN. 19, 1970

BIDS--EVALUATION--DISCOUNT PROVISIONS--ABSENCE OF PROVISION IN INVITATION ALTHOUGH INVITATION FOR BIDS WHICH REQUESTED BIDS FOR CONSTRUCTION DID NOT CONTAIN ANY PROVISION EITHER SOLICITING OR EXCLUDING OFFERS OF DISCOUNTS FOR PROMPT PAYMENT, PROTEST TO AWARD TO BIDDER OFFERING SUCH DISCOUNT IS DENIED SINCE IT IS LONG-ESTABLISHED GOVERNMENT POLICY TO CONSIDER DISCOUNTS IN EVALUATING BIDS FOR CONTRACTS AWARDED UNDER FORMAL ADVERTISEMENTS, AND CONSIDERATION OF SUCH DISCOUNT OFFERS IS LEGALLY ESSENTIAL IN EVALUATING BIDS, EVEN WHERE NO PROVISION THEREFOR IS MADE IN INVITATION CONCERNED. SEE COMP. GEN. DECS. CITED.

TO MR. HARLAN FLOYD:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 7, 1970, WITH ENCLOSURES, TO THE HONORABLE WILLIAM S. MAILLIARD, UNITED STATES HOUSE OF REPRESENTATIVES, PROTESTING THE AWARD OF A CONTRACT TO MR. JAMES A. REED (REED) UNDER INVITATION FOR BIDS NO. K4500450, ISSUED BY THE MARINE MINERAL TECHNOLOGY CENTER, TIBURON, CALIFORNIA, ON MARCH 20, 1970.

THE INVITATION WHICH REQUESTED BIDS FOR THE CONSTRUCTION OF A WOODEN PLATFORM IN BUILDING 36 AT THE MARINE MINERAL TECHNOLOGY CENTER, DID NOT CONTAIN ANY PROVISION EITHER SOLICITING OR EXCLUDING OFFERS OF DISCOUNTS FOR PROMPT PAYMENT. THE TWO LOWEST BIDS WERE SUBMITTED BY YOU AND REED IN THE AMOUNTS OF $1,950 AND $1,989.14, RESPECTIVELY. REED, HOWEVER, HAD INSERTED A PROVISION IN HIS BID ALLOWING A DISCOUNT OF $51.02 FOR PAYMENT WITHIN 10 DAYS. IT WAS DETERMINED THAT THE TIME ALLOWED WAS AMPLE FOR THE GOVERNMENT TO AVAIL ITSELF OF THE DISCOUNT, AND THE CONTRACT WAS AWARDED TO REED AS THE LOW BIDDER. YOU QUESTION THE LEGALITY OF THE AWARD, ON THE PREMISE THAT DISCOUNTS SHOULD NOT HAVE BEEN CONSIDERED IN EVALUATING THE BIDS, SINCE THERE WAS NOTHING IN THE INVITATION PROVIDING FOR DISCOUNTS OR INDICATING THAT DISCOUNTS WOULD BE CONSIDERED.

IT HAS LONG BEEN AN ESTABLISHED POLICY OF THE GOVERNMENT TO CONSIDER DISCOUNTS IN EVALUATING BIDS FOR CONTRACTS TO BE AWARDED UNDER FORMAL ADVERTISEMENTS, AND WE HAVE FREQUENTLY HELD THAT CONSIDERATION OF DISCOUNT OFFERS IS AN ESSENTIAL LEGAL REQUIREMENT IN EVALUATING BIDS. B-167984, DECEMBER 3, 1969. SUCH HAS BEEN OUR HOLDING EVEN WHERE THE INVITATION DID NOT INCLUDE ANY PROVISIONS FOR DISCOUNTS OR FOR THE PARTICULAR TYPE OF DISCOUNT WHICH WAS OFFERED. SEE 40 COMP. GEN. 518 (1961); 48 COMP. GEN. 256 (1968); B-167462, AUGUST 15, 1969, COPIES OF WHICH ARE ENCLOSED. 48 COMP. GEN. 256, SUPRA, WE STATED:

" *** HOWEVER, WE DO NOT BELIEVE THAT, AS A GENERAL RULE, THE GOVERNMENT'S FAILURE TO MAKE SPECIFIC PROVISION FOR EVERY POSSIBLE METHOD OF PRICE QUOTATION SHOULD DEPRIVE IT OF THE RIGHT TO TAKE ADVANTAGE OF A CLEARLY OFFERED BENEFIT WHICH DID NOT CONTRAVENE ANY STATED REQUIREMENT OR PROHIBITION.

"UNDER THE GOVERNMENT'S COMPETITIVE BIDDING SYSTEM, WE THINK THAT A BIDDER MAY PROPERLY QUOTE ITS BEST TERMS, INCLUDING PROVISIONS, IF THEY SO DESIRE, FOR ALLOWANCE OF DISCOUNTS AND OTHER PRICE REDUCTIONS WHICH MIGHT BE BASED ON THE AMOUNT OF WORK OR SUPPLIES INCLUDED IN AWARDS. *** "

ACCORDINGLY, SINCE CONSIDERATION OF THE DISCOUNT OFFERED BY REED WAS NOT CONTRARY TO THE INVITATION'S PROVISIONS OR OTHERWISE PROHIBITED, YOUR PROTEST IS DENIED.