B-169732, MAY 26, 1970

B-169732: May 26, 1970

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BID IS RESPONSIVE SINCE COPY OF AMENDMENT ITSELF WAS SUBMITTED WITH BID AND IT HAS BEEN HELD THAT WHERE EXAMINATION OF ENTIRE RECORD AVAILABLE TO GOVERNMENT AT TIME OF BID OPENING SHOWS BIDDER HAS IN FACT RECEIVED AND CONSIDERED AMENDMENT. EQUAL BIDDING SYSTEM FOR ALL BIDDERS LACKING SECRETARY OF NAVY IS ADVISED THAT ALTHOUGH IT IS FUNDAMENTAL TO COMPETITIVE BIDDING SYSTEM THAT BIDS MUST RESPOND FULLY TO REQUIREMENTS OF INVITATION SO THAT CONTRACT AWARDED WILL BE SAME CONTRACT OFFERED ALL BIDDERS. DAILY RATE INFORMATION CONTAINED IN LOW BID IS SUFFICIENTLY RESPONSIVE TO SOLICITATION REQUIREMENTS. SINCE BIDS OF TWO BIDDERS ARE RENDERED DIRECTLY COMPARABLE BY APPLICATION OF SIMPLE MATHEMATICS TO INFORMATION IN BIDS THEMSELVES.

B-169732, MAY 26, 1970

CONTRACTS--SPECIFICATIONS--FAILURE TO FURNISH SOMETHING REQUIRED- ADDENDA ACKNOWLEDGMENT--ADDENDA IN BID PACKAGE EVEN THOUGH LOW BIDDER DID NOT ACKNOWLEDGE AMENDMENT TO INVITATION FOR BIDS FOR BUS SERVICE AT NORFOLK NAVAL SHIPYARD ON BID FORM, BID IS RESPONSIVE SINCE COPY OF AMENDMENT ITSELF WAS SUBMITTED WITH BID AND IT HAS BEEN HELD THAT WHERE EXAMINATION OF ENTIRE RECORD AVAILABLE TO GOVERNMENT AT TIME OF BID OPENING SHOWS BIDDER HAS IN FACT RECEIVED AND CONSIDERED AMENDMENT, MERE FAILURE TO PROPERLY ACKNOWLEDGE AMENDMENT IN USUAL FORM DOES NOT RENDER BID NONRESPONSIVE. SEE B-163744, MAR. 21, 1968. BIDS--COMPETITIVE SYSTEM--EQUAL BIDDING SYSTEM FOR ALL BIDDERS LACKING SECRETARY OF NAVY IS ADVISED THAT ALTHOUGH IT IS FUNDAMENTAL TO COMPETITIVE BIDDING SYSTEM THAT BIDS MUST RESPOND FULLY TO REQUIREMENTS OF INVITATION SO THAT CONTRACT AWARDED WILL BE SAME CONTRACT OFFERED ALL BIDDERS, AND LITERAL LANGUAGE OF SUBJECT INVITATION DID CALL FOR BIDDERS' PROPOSED HOURLY RATE FOR BUS SERVICE TO BE FURNISHED, DAILY RATE INFORMATION CONTAINED IN LOW BID IS SUFFICIENTLY RESPONSIVE TO SOLICITATION REQUIREMENTS. SINCE BIDS OF TWO BIDDERS ARE RENDERED DIRECTLY COMPARABLE BY APPLICATION OF SIMPLE MATHEMATICS TO INFORMATION IN BIDS THEMSELVES, AWARD TO LOW BIDDER IS APPROVED. CONTRACTS- SPECIFICATIONS DEFECTIVE--CORRECTIVE ACTION RECOMMENDED METHOD OF PRICING CALLED FOR BY NAVY INVITATION FOR BIDS FOR BUS SERVICE IS NOT CONSIDERED SATISFACTORY, BECAUSE INVITATION CALLED FOR BID PRICES ON HOURLY BASIS, AND IF CONTRACT WERE AWARDED STRICTLY ON BASIS OF HOURLY RATE, POTENTIAL PROBLEMS OF CONTRACT ADMINISTRATION COULD ARISE REGARDING WHICH PARTY WOULD BE LIABLE FOR PAYMENT FOR DEAD HEAD MILEAGE AND TUNNEL TOLLS. TO ELIMINATE SUCH POTENTIAL PROBLEMS, IT IS RECOMMENDED THAT FUTURE PROCUREMENTS FOR SUCH SERVICES NOT BE MADE ON BASIS OF HOURLY RATE, BUT RATHER IN MANNER WHICH WOULD FURNISH MORE DETAILED PRICING INFORMATION.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED MAY 4, 1970, REFERENCE 0211C/RP:KAM, FROM MR. J. M. COWDEN, NAVAL FACILITIES ENGINEERING COMMAND, REQUESTING OUR DETERMINATION ON A BID PROTEST BY KAHOE SERVICE COMPANY AGAINST AWARD OF CONTRACT NO. N62470-70-B-0371 TO VIRGINIA TRANSIT COMPANY.

THE INVITATION FOR BIDS, ISSUED ON MARCH 5, 1970, WITH A SCHEDULED BID OPENING OF APRIL 9, 1970, WAS FOR MOTOR VEHICLE RENTAL (BUS SERVICE) AT THE NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA. BIDS WERE RECEIVED FROM VIRGINIA TRANSIT COMPANY AND KAHOE SERVICE COMPANY. KAHOE SERVICE COMPANY ALLEGES THAT THE BID OF VIRGINIA TRANSIT WAS NOT RESPONSIVE TO THE INVITATION SINCE IT SUBMITTED A PRICE ON A DAILY BASIS INSTEAD OF AN HOURLY RATE AS REQUIRED BY THE INVITATION AND ALSO ALLEGES THAT VIRGINIA TRANSIT DID NOT ACKNOWLEDGE AN AMENDMENT TO THE INVITATION.

THE AMENDMENT AT ISSUE, ADDENDUM NO. 1, ISSUED MARCH 9, 1970, PERTAINED TO SECURITY REQUIREMENTS OF THE BASE, THE CONTRACTOR'S LIABILITY FOR PROPERTY DAMAGE AND LIMITATIONS ON THE CONTRACTOR'S OPERATIONS. AMENDMENTS WERE TO BE ACKNOWLEDGED ON THE BID FORM, NAVDOCKS 2419 (REV. 1- 58). VIRGINIA TRANSIT COMPANY DID NOT ACKNOWLEDGE THE AMENDMENT ON THE BID FORM BUT DID SUBMIT A COPY OF THE AMENDMENT ITSELF WITH THE BID. THE POSITION TAKEN IN THE NAVY'S LETTER OF MAY 4, 1970, IS THAT THE INCORPORATION OF THE ADDENDUM IN THE BID PACKAGE CONSTITUTED AN ACKNOWLEDGEMENT. WE HAVE STATED THAT WHERE AN EXAMINATION OF THE ENTIRE RECORD AVAILABLE TO THE GOVERNMENT AT THE TIME OF BID OPENING SHOWS THAT A BIDDER HAS IN FACT RECEIVED AND CONSIDERED AN AMENDMENT, THE MERE FAILURE TO PROPERLY ACKNOWLEDGE THE AMENDMENT IN THE USUAL FORM DOES NOT RENDER THE BID NONRESPONSIVE. B 163744, MARCH 21, 1968, AND CASES CITED. SINCE VIRGINIA TRANSIT COMPANY SUBMITTED THE ADDENDUM AS PART OF ITS BID, IT IS APPARENT THE AMENDMENT WAS CONSIDERED. CONSEQUENTLY, VIRGINIA TRANSIT'S BID IS NOT RENDERED NONRESPONSIVE FOR FAILURE TO ACKNOWLEDGE THE AMENDMENT IN THE USUAL FORM.

WITH RESPECT TO THE CONTENTION THAT VIRGINIA TRANSIT'S BID WAS NONRESPONSIVE SINCE IT WAS SUBMITTED WITH THREE DIFFERENT DAILY RATES RATHER THAN AN HOURLY RATE AS REQUIRED BY THE INVITATION, WE QUOTE FROM THE ABOVE REFERENCED LETTER FROM THE NAVY DATED MAY 4, 1970:

"WITH REGARD TO THE FACT THAT THE VIRGINIA TRANSIT FIRM SUBMITTED THE BID ON A DAILY RATE RATHER THAN AN HOURLY BASIS, IT IS NOTED THAT WHAT IS REALLY CALLED FOR IS NOT AN HOURLY OR A DAILY BASIS, BUT A PRICE FOR FURNISHING THE EQUIPMENT AND SERVICE FOR THE ENTIRE WORK (SEE CLAUSE 1A.2, ITEMS OF BIDS). BY ADDING THE DAILY AMOUNTS OF $79.50 FOR UNIT 1, $87.50 FOR UNIT 2, AND $91.50 FOR UNIT 3, YOU ARRIVE AT A TOTAL OF $258.50 PER DAY. INASMUCH AS THE CONTRACT STATES THAT WORK WILL ONLY BE ON NORMAL WORKING DAYS, WE CAN ASSUME 261 DAYS. THIS AMOUNT MULTIPLIED BY THE PRICE PER DAY ABOVE RESULTS IN A TOTAL PRICE OF $67,468.50. THE PRICE OF KAHOE OF $9.21 PER HOUR WHEN MULTIPLIED BY THE NUMBER OF HOURS IN THE SCHEDULE GIVES US $82.89 PER DAY FOR UNIT 1, $92.10 PER DAY FOR UNIT 2, AND $95.18 FOR UNIT 3. THIS PRICE IS CLEARLY HIGHER THAN THAT OF VIRGINIA TRANSIT. INASMUCH AS IT IS POSSIBLE TO READILY COMPUTE ARITHMETICALLY THE OVERALL PRICE FOR BOTH BIDDERS AND TO MAKE THEIR BIDS DIRECTLY COMPARABLE BY THE APPLICATION OF SIMPLE MATHEMATICS TO INFORMATION IN THE BIDS THEMSELVES, IT IS CONSIDERED THAT THE FAILURE OF BOTH BIDDERS TO SUBMIT A PRICE FOR THE OVERALL WORK CAN BE WAIVED AS A MINOR INFORMALITY." SECTION 1A OF THE SPECIFICATIONS PROVIDES AS FOLLOWS:

"1A.1 BIDS SHALL BE SUBMITTED, IN DUPLICATE, ON NAVDOCKS 2419 REVISED JANUARY 1958, BID FORM AND IN ACCORDANCE WITH NAVDOCKS FORM 2418 AND 2419 UPON THE FOLLOWING UNIT:

"UNIT 1. RATE PER BUS PER HOUR, FOR SCHEDULED SERVICE LISTED ON UNITS 1, 2 & 3.

"1A.2 ITEMS OF BIDS.

ITEM 1. PRICE TO FURNISH EQUIPMENT AND SERVICES IN STRICT ACCORDANCE WITH SPECIFICATIONS AND SCHEDULES (UNITS 1 THROUGH 3)."

WE DO NOT AGREE WITH THE ANALYSIS CONTAINED IN THE LETTER OF MAY 4, 1970, QUOTED ABOVE, WHICH STATES THAT THE INVITATION CALLED FOR AN OVERALL PRICE. ITEM 1A.1 CLEARLY CALLS FOR AN HOURLY RATE PER BUS, PER HOUR, FOR SCHEDULED SERVICE LISTED ON UNITS 1, 2, AND 3. FURTHER, CONTRARY TO THE THEORY QUOTED ABOVE, SECTION 1A.2 OF THE SPECIFICATIONS DOES NOT CALL FOR AN AGGREGATE PRICE FOR THE ENTIRE WORK. SECTION 1A.2 SIMPLY CALLS FOR A PRICE IN STRICT ACCORDANCE WITH THE SPECIFICATIONS AND SCHEDULES FOR UNITS 1 THROUGH 3 WHICH HAS ALREADY BEEN ESTABLISHED TO BE AN HOURLY RATE PER BUS, PER HOUR.

IT IS FUNDAMENTAL TO THE COMPETITIVE BIDDING SYSTEM THAT BIDS MUST RESPOND FULLY TO THE REQUIREMENTS OF THE INVITATION, SO THAT THE CONTRACT AWARDED WILL BE THE SAME CONTRACT OFFERED TO BIDDERS. ALTHOUGH THE LITERAL LANGUAGE OF THE INVITATION DID CALL FOR AN HOURLY RATE, WE ARE OF THE OPINION THAT THE INFORMATION CONTAINED IN VIRGINIA TRANSIT'S BID IS SUFFICIENTLY RESPONSIVE TO THE REQUIREMENTS OF THE SOLICITATION. EACH OF THE THREE BUS SCHEDULES IS FOR A DEFINITE LENGTH OF TIME. THE NAVY EVALUATED KAHOE'S BID BY MULTIPLYING THEIR QUOTED HOURLY RATE BY THE NUMBER OF SCHEDULED HOURS FOR EACH OF THE THREE UNITS. WE ARE SATISFIED THAT THE BIDS OF THE TWO COMPANIES ARE DIRECTLY COMPARABLE AND, THEREFORE, THE REQUEST FOR AUTHORIZATION TO AWARD THE CONTRACT TO VIRGINIA TRANSIT COMPANY, THE LOW BIDDER, IS APPROVED.

HOWEVER, WE DO NOT CONSIDER THE METHOD OF PRICING CALLED FOR BY THE SOLICITATION SATISFACTORY. AS ALREADY DISCUSSED, THE INVITATION CALLED FOR BID PRICES ON AN HOURLY BASIS. VIRGINIA TRANSIT'S BID FOR EACH BUS SCHEDULE CONSISTED OF 10 DEAD HEAD MILES AT $0.35 PER MILE, THE FIRST HOUR AT $10 AND EACH HOUR THEREAFTER AT $8, PLUS $2 FOR TUNNEL TOLLS. HOWEVER, IF THE CONTRACT WERE AWARDED STRICTLY ON THE BASIS OF AN HOURLY RATE, WE SEE POTENTIAL PROBLEMS OF CONTRACT ADMINISTRATION WITH REGARD TO WHICH PARTY WOULD BE LIABLE FOR PAYMENT FOR DEAD HEAD MILEAGE AND TUNNEL TOLLS. TO ELIMINATE SUCH POTENTIAL PROBLEMS, WE RECOMMEND THAT FUTURE PROCUREMENTS FOR SUCH SERVICES NOT BE MADE ON THE BASIS OF AN HOURLY RATE, BUT RATHER IN A MANNER WHICH WOULD FURNISH MORE DETAILED PRICING INFORMATION SUCH AS CONTAINED IN THE BID OF VIRGINIA TRANSIT COMPANY.