B-169843(2), DEC 7, 1970

B-169843(2): Dec 7, 1970

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

A NOTIFICATION OF CORRECTION AND AN AMENDMENT TO THE INVITATION WHICH WAS NOT TIMELY RECEIVED BY PROTESTANT DOES NOT CONSTITUTE A SUFFICIENT BASIS TO CANCEL THE INVITATION WHERE THE MISPELLED WORD DID NOT FORM A CHEMICAL TERM FOR ANOTHER INGREDIENT. DOES NOT APPEAR TO HAVE MISLED ANY ACTUAL OR PROSPECTIVE BIDDERS. WHERE PROTESTANT CHARGES COLLUSION IN THAT THREE BIDS SUBMITTED ON SIX ITEMS IN THE BID SCHEDULE WERE IDENTICAL. ROBERT SHERIFFS MOSS: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MAY 19. ALL ITEMS WERE DESCRIBED IN THE SALES INVITATION AS FOLLOWS: "EXPLOSIVE: PENTOLITE. THAT AS FAR AS HE KNEW THERE IS NO CHEMICAL NAMED "PENTAERYTHRITETETRA" AND IF HIS UNDERSTANDING WAS CORRECT.

B-169843(2), DEC 7, 1970

BID PROTEST - MISTAKE IN INVITATION - COLLUSION DENIAL OF PROTEST BY PETROF TRADING COMPANY AGAINST A CONTRACT ISSUED BY DEFENSE SURPLUS SALES OFFICE, FOR SEVERAL EXPLOSIVE COMPOUNDS AND AWARD TO OTHER BIDDERS BY THE DRAWING OF LOTS. WHERE A SALES INVITATION FOR EXPLOSIVE COMPOUNDS CONTAINED AN INCORRECT DESIGNATION OF A CHEMICAL AND PROTESTANT BRINGS SUCH ERROR TO THE ATTENTION OF THE CONTRACTING AGENCY, A NOTIFICATION OF CORRECTION AND AN AMENDMENT TO THE INVITATION WHICH WAS NOT TIMELY RECEIVED BY PROTESTANT DOES NOT CONSTITUTE A SUFFICIENT BASIS TO CANCEL THE INVITATION WHERE THE MISPELLED WORD DID NOT FORM A CHEMICAL TERM FOR ANOTHER INGREDIENT, CHANGING THE COMPOUND, AND DOES NOT APPEAR TO HAVE MISLED ANY ACTUAL OR PROSPECTIVE BIDDERS. FURTHER, WHERE PROTESTANT CHARGES COLLUSION IN THAT THREE BIDS SUBMITTED ON SIX ITEMS IN THE BID SCHEDULE WERE IDENTICAL, GAO DIRECTS ATTENTION TO ITS RECOMMENDATION TO THE DIRECTOR OF THE CONTRACTING AGENCY.

TO MR. ROBERT SHERIFFS MOSS:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MAY 19, 1970, AND SUBSEQUENT CORRESPONDENCE PROTESTING IN BEHALF OF PETROF TRADING COMPANY AGAINST AWARDS UNDER SALES INVITATION NO. 21-0144, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE (DSSO), ATLANTA ARMY DEPOT, FOREST PARK, GEORGIA.

THE SALES INVITATION, WITH A SCHEDULED BID OPENING DATE OF MAY 7, 1970, OFFERED 8 ITEMS IN UNIT QUANTITIES ON A PER POUND BASIS. ALL ITEMS WERE DESCRIBED IN THE SALES INVITATION AS FOLLOWS:

"EXPLOSIVE: PENTOLITE, GRANULAR, (MIXTURE OF 50% TNT AND 50% PENTAERYTHRITETETRA, BURSTING OR DETONATING CHARGE), MANUFACTURED BY RADFORD ARMY AMMUNITION PLANT IN 1945. *** "

THE ADMINISTRATIVE REPORT SHOWS THAT FOLLOWING THE ISSUANCE OF THE INVITATION, MR. PETROFSKY, PRESIDENT OF THE PETROF TRADING COMPANY, ADVISED DSSO, BY LETTER RECEIVED APRIL 30, 1970, THAT AS FAR AS HE KNEW THERE IS NO CHEMICAL NAMED "PENTAERYTHRITETETRA" AND IF HIS UNDERSTANDING WAS CORRECT, THE INVITATION WAS NOT VALID. IT WAS THEN DETERMINED BY THE CONTRACTING OFFICE THAT THE CORRECT DESIGNATION OF THE CHEMICAL WAS "PENTAERYTHRITOL TETRANITRATE". ON MAY 4, 1970, MR. PETROFSKY WAS ADVISED BY TELEPHONE OF THE PROPER DESIGNATION OF THE CHEMICAL. HE WAS ALSO NOTIFIED THAT A CORRECTION WAS BEING MADE BY AMENDMENT TO THE INVITATION AND, THAT THE AMENDMENT WOULD NOT HAVE TO BE ACKNOWLEDGED AND, BECAUSE OF THE AMENDMENT, BID OPENING WAS BEING EXTENDED TO MAY 14, 1970. THIS INFORMATION WAS CONFIRMED BY LETTER DATED MAY 4, 1970.

THE AMENDMENT WAS ISSUED MAY 6, 1970. BIDS WERE RECEIVED FROM EIGHT FIRMS AND OPENED AS SCHEDULED; HOWEVER, NO BID WAS RECEIVED FROM THE PETROF TRADING COMPANY. THREE BIDDERS SUBMITTED IDENTICAL BIDS ON 6 ITEMS, AS FOLLOWS:

ITEM UNIT BID PRICE TOTAL BID PRICE

001 $.12 $26,708.76

002 .12 28,163.40

003 .12 28,782.00

004 .12 25,559.40

006 .12 21,048.00

007 .12 16,468.80

ON MAY 18, 1970, THE SALES CONTRACTING OFFICER REQUESTED ADVICE FROM THE DEFENSE LOGISTICS SERVICES CENTER (DLSC) WHETHER HE WOULD HAVE TO DELAY BREAKING THE TIE BIDS AND MAKING THE AWARDS UNTIL SUBMISSION OF A REPORT TO THE ATTORNEY GENERAL IN ACCORDANCE WITH DEPARTMENT OF DEFENSE MANUAL (DOD) 4160.21-M, PART 3, CHAPTER VIII, PARAGRAPH C9D. UPON RECEIVING A NEGATIVE REPLY, THE SALES CONTRACTING OFFICER MADE AWARDS BY THE DRAWING OF LOTS ON FIVE OF THE SIX ABOVE ITEMS ON WHICH THE IDENTICAL BIDS WERE HIGH PURSUANT TO DOD 4160.21-M, PART 3, CHAPTER VIII, PARAGRAPH C9A. AS A RESULT OF THE DRAWING, TWO BIDDERS WERE AWARDED TWO ITEMS EACH AND THE OTHER BIDDER WAS AWARDED THE REMAINING ITEM.

IN YOUR TELEGRAM DATED MAY 19, 1970, YOU CONTEND THAT PETROF WAS UNABLE TO SUBMIT A TIMELY BID BECAUSE THE AMENDMENT CORRECTING THE DESCRIPTION OF PENTOLITE AND EXTENDING THE OPENING DATE BY ONLY ONE WEEK WAS NOT RECEIVED BY PETROF UNTIL AFTER BID OPENING. IN YOUR LETTER DATED JULY 14, 1970, YOU CONTEND THAT AWARDS MADE TO THE THREE BIDDERS WHO OFFERED IDENTICAL BIDS SHOULD BE CANCELLED AND THE ITEMS READVERTISED. IN SUPPORT OF CANCELLATION, YOU INVITE OUR ATTENTION TO THE FACT THAT THE EIGHT ITEMS OFFERED UNDER THE SALES INVITATION WERE IDENTICAL, EXCEPT FOR QUANTITIES.

YOU STATE THAT:

"NEVERTHELESS, AS APPEARS FROM AN ANALYSIS OF THE BIDS, ('A'), ('B'), AND ('C'), BID 12[ PER POUND EACH FOR ITEMS 1, 2, 3, 4, 6 AND 7. ('A'), AND ('B') BID 12[ EACH FOR ALL EIGHT ITEMS. ITEMS 7 AND 8, HOWEVER, WENT TO ('D') AND ('E') AT 20-1/2[ AND 22.1[ PER POUND RESPECTIVELY. THE NUMEROUS TIES WERE BROKEN BY DRAWING LOTS. ('A') WAS THUS AWARDED ITEMS 3 AND 4 AT 12[ EACH, ('B') WAS AWARDED ITEMS 2 AND 6 AT 12[ EACH AND ('C') WAS AWARDED ITEM 1 AT 12[ PER POUND. SINCE ('C') HAD BID 19[ PER POUND ON ITEM 5, IT WAS ALSO AWARDED THAT ITEM. UNDER ALL THE CIRCUMSTANCES THE BIDDING, FROM THE ANALYSIS WE HAVE SUPPLIED TO YOU HAD NO BASIS IN LOGIC OR REASON. THERE WAS NO REASON FOR ('C') TO BID 19[ ON ITEM 5 ON A QUANTITY OR OTHER BASIS AS THE QUANTITY WAS ABOUT THE SAME AS THAT OF ITEMS 1, 2, 3, AND 4, WHICH WERE BID 12[ PER POUND, A PRICE IDENTICAL TO THAT BID BY ('A') AND ('B'). UNLESS THERE WAS COLLUSION, THERE IS NO EXPLANATION FOR THE IDENTICAL BIDS BY THREE BIDDERS FOR SIX (6) ITEMS AND THE SAME IDENTICAL BIDS BY TWO (2) BIDDERS FOR ALL EIGHT ITEMS."

YOU CONCLUDE THAT THE SITUATION PRESENT IS NOT UNLIKE THE SITUATION IN B- 145959, AUGUST 29, 1961, WHEREIN WE UPHELD THE ADMINISTRATIVE DETERMINATION THAT THE PREPONDERANCE OF IDENTICAL BIDS INDICATED THAT THE BIDS HAD NOT BEEN ARRIVED AT INDEPENDENTLY AND THAT THE BEST INTEREST OF THE GOVERNMENT WOULD BE SERVED BY REJECTING ALL BIDS UNDER THE SCHEDULES AND READVERTISING THE REQUIREMENTS UNDER REVISED INVITATIONS, INCLUDING A RECENTLY ADOPTED NONCOLLUSIVE BIDDING CLAUSE. FOR ADDITIONAL SUPPORT, YOU QUOTE FROM THE COMMERCE CLEARING HOUSE, GOVERNMENT CONTRACT SERVICE, PARAGRAPH 3525.17, CITING A UNITED STATES ATTORNEY GENERAL OPINION DATED JUNE 30, 1937, 39 OP. ATTY. GEN. 71, AS FOLLOWS:

"WHILE IT IS THE DUTY OF GOVERNMENT OFFICERS TO REJECT ALL BIDS WHERE THERE IS EVIDENCE SUCH AS WOULD CONVINCE A REASONABLE MAN THAT THE BIDS WERE MADE AS A RESULT OF COLLUSION AMONG BIDDERS, IT IS IN THE DISCRETION OF THE OFFICER TO REJECT ALL OR ONLY COLLUSIVE BIDS IN THE CASE OF BIDS SOME BUT NOT ALL OF WHICH THE OFFICER IS CONVINCED ARE COLLUSIVE."

CONCERNING YOUR CONTENTION THAT THE INVITATION SHOULD HAVE BEEN WITHDRAWN AND READVERTISED BASED UPON THE ERROR IN SPELLING THE INGREDIENT "PENTAERYTHRITOL-TETRANITRATE", WE THINK IT SIGNIFICANT THAT THE GOVERNMENT WAS OFFERING FOR SURPLUS SALE "PENTOLITE", A COMPOUND AND NOT INDIVIDUAL INGREDIENTS. SINCE PENTOLITE IS A KNOWN COMPOSITION OF EQUAL PARTS OF "PENTAERYTHRITOL-TETRANITRATE AND TRINITROTOLUENE (Q.V.), NO OTHER INTERPRETATION COULD BE APPLIED TO THIS DESCRIPTION EVEN THOUGH ONE INGREDIENT IS MISSPELLED. IT MAY BE TRUE THAT HAD THE MISSPELLED WORD FORMED A CHEMICAL TERM FOR ANOTHER INGREDIENT, CHANGING THE COMPOUND, SUCH AN ERROR COULD HAVE BEEN MATERIAL ENOUGH TO WARRANT THE WITHDRAWAL OF THE ITEM OFFERED. HOWEVER, WHERE, AS HERE, THE MISSPELLED WORD DOES NOT REPRESENT A CHEMICAL INGREDIENT DIFFERENT FROM THAT ACTUALLY BEING SOLD AND DOES NOT APPEAR TO HAVE MISLED ANY ACTUAL OR PROSPECTIVE BIDDERS, WE DO NOT BELIEVE THE SITUATION REQUIRES WITHDRAWAL OF THE ITEM FROM THE SALE AS CONTEMPLATED BY DOD MANUAL 4160.21-M, PART 3, CHAPTER VI, PARAGRAPH J1, EVEN WITHOUT A CLARIFYING AMENDMENT. IN THIS RESPECT, THE FAILURE OF A BIDDER TO TIMELY RECEIVE A COPY OF AN INVITATION FOR BIDS OR A MATERIAL AMENDMENT DOES NOT CONSTITUTE A SUFFICIENT BASIS TO CANCEL THE INVITATION OR TO QUESTION AN OTHERWISE PROPER AWARD UNDER THE INVITATION. SEE B- 161242, MAY 8, 1967. ALSO, SEE OUR DECISIONS B-157241 AND B-157266, DATED SEPTEMBER 3, 1965, OCTOBER 25, 1965 AND MARCH 21, 1966.

REGARDING YOUR SECOND GROUND OF PROTEST ASKING THAT OUR OFFICE DIRECT THE SETTING ASIDE OF AWARDS MADE UNDER THE TIE BIDS, WE ARE ENCLOSING A COPY OF OUR LETTER OF TODAY TO THE DIRECTOR OF THE DEFENSE SUPPLY AGENCY SETTING FORTH OUR VIEWS ON THE MATTER.