B-170013, JUL 22, 1970, 50 COMP GEN 48

B-170013: Jul 22, 1970

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BIDS - BLOCK BIDDING - PREVENTION THE QUANTITY LIMITATION PROHIBITION CLAUSE INTENDED TO PREVENT BLOCK BIDDING THAT WAS INCLUDED IN AN INVITATION FOR BIDS TO MANUFACTURE FLIGHT JACKETS FOR DELIVERY AT SEVERAL DESTINATIONS WHICH PROVIDED EACH BIDDER MAY SUBMIT ONE QUANTITY ONLY AT ONE PRICE FOR EACH ITEM BID. 1970: FURTHER REFERENCE IS MADE TO A TELEGRAM DATED JUNE 9. THE SOLICITATION WAS ISSUED ON APRIL 22. ATTACHED TO THE FRONT OF THE SOLICITATION WAS DSA FORM 299-R. WILL RENDER THE OFFERS NONRESPONSIVE. IT IS REPORTED THAT FOUR OFFERS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE CONTRACTING OFFICER REJECTED RALPH EDWARDS' BID CONCLUDING THAT THE BID WAS NONRESPONSIVE SINCE IT VIOLATED THE QUANTITY LIMITATION PROVISION SET FORTH IN CLAUSE 172.5 (QUOTED ABOVE) BY "BLOCK BIDDING.".

B-170013, JUL 22, 1970, 50 COMP GEN 48

BIDS - BLOCK BIDDING - PREVENTION THE QUANTITY LIMITATION PROHIBITION CLAUSE INTENDED TO PREVENT BLOCK BIDDING THAT WAS INCLUDED IN AN INVITATION FOR BIDS TO MANUFACTURE FLIGHT JACKETS FOR DELIVERY AT SEVERAL DESTINATIONS WHICH PROVIDED EACH BIDDER MAY SUBMIT ONE QUANTITY ONLY AT ONE PRICE FOR EACH ITEM BID, AND MAY STIPULATE THE MAXIMUM/MINIMUM QUANTITY ACCEPTABLE FOR EACH ITEM OR THE OVERALL PROCUREMENT CAUSED NO AMBIGUITY IN THE INVITATION, AND AN OFFER BIDDING ON THE FIRST 7,470 FOR EACH DESTINATION AND THEN INCLUDING THIS SAME QUANTITY WITH AN ADDITIONAL 1,000 FOR THE NEXT INCREMENT OF 8,470 EACH AND SO ON UNTIL EACH ADDITIONAL 1,000 ADDED THEREON REACHED THE TOTAL PROCUREMENT QUANTITY OF 16,470 EACH, OFFERED MORE THAN ONE PRICE FOR A QUANTITY AND THE VIOLATION OF THE CLAUSE MAY NOT BE WAIVED UNDER PARAGRAPH 2-405 OF THE ARMED SERVICES PROCUREMENT REGULATION AS AN INFORMALITY.

TO LIMBAUGH, LIMBAUGH & RUSSELL, JULY 22, 1970:

FURTHER REFERENCE IS MADE TO A TELEGRAM DATED JUNE 9, 1970, FROM RALPH EDWARDS SPORTSWEAR, INCORPORATED, AND YOUR LETTER ON THEIR BEHALF DATED JUNE 9, 1970, PROTESTING AWARD OF CONTRACT BY THE DEFENSE SUPPLY AGENCY ON INVITATION FOR BIDS NO. DSA100-70-B-1329.

THE SOLICITATION WAS ISSUED ON APRIL 22, 1970, WITH A SCHEDULED OPENING DATE OF MAY 12, 1970. IT CALLED FOR THE MANUFACTURE AND DELIVERY F.O.B. DESTINATION OF 16,470 EACH JACKET, FLYING, MAN'S, LEATHER, BROWN.

ATTACHED TO THE FRONT OF THE SOLICITATION WAS DSA FORM 299-R, INFORMATION TO BIDDERS, WHICH STATED THE FOLLOWING: "SEE SECTION H CLAUSE 172.5 ON PAGE 43." CLAUSE 172.5 ON PAGE 43 OF THE INVITATION PROVIDED:

172.5 QUANTITY LIMITATION PROHIBITION (DPSC 1969 MAY)

EACH OFFEROR MAY SUBMIT ONE QUANTITY ONLY, AT ONE PRICE FOR EACH ITEM. HOWEVER, IF SOLICITATION SO AUTHORIZED, THIS ONE QUANTITY MAY BE OFFERED ON AN FOB ORIGIN AND/OR FOB DESTINATION BASIS.

OFFERORS MAY STIPULATE THE MINIMUM/MAXIMUM QUANTITY ACCEPTABLE FOR EACH ITEM. IN ADDITION, OFFERORS MAY STIPULATE AN OVERALL ACCEPTABLE MINIMUM/MAXIMUM QUANTITY IF THE SOLICITATION REQUESTS OFFERS ON TWO OR MORE ITEMS.

ANY OFFER OF MORE THAN ONE QUANTITY FOR EACH ITEM OR ANY OFFER FOR A QUANTITY AT MORE THAN ONE PRICE, EXCEPT AS PERMITTED ABOVE, WILL RENDER THE OFFERS NONRESPONSIVE.

IT IS REPORTED THAT FOUR OFFERS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE ADMINISTRATIVE REPORT CONTAINS THE FOLLOWING INFORMATION WITH REGARD TO RALPH EDWARDS' OFFER:

FOB DESTINATION

UNIT PRICE TOTAL AMOUNT MIN. QTY BID UPON

$31.00 $231,750.00 7470

30.90 261,722.00 8470

30.80 291,676.00 9470

30.70 321,429.00 10470

30.60 350,982.00 11470

30.42 501,017.40 16470

NOT LESS THAN 7470 UNITS ON ANY OR ALL DESTINATIONS OR ITEMS. DISCOUNT TERMS: 2% - 20 CALENDAR DAYS.

BY LETTER DATED MAY 27, 1970, THE CONTRACTING OFFICER REJECTED RALPH EDWARDS' BID CONCLUDING THAT THE BID WAS NONRESPONSIVE SINCE IT VIOLATED THE QUANTITY LIMITATION PROVISION SET FORTH IN CLAUSE 172.5 (QUOTED ABOVE) BY "BLOCK BIDDING." IN THIS REGARD THE CONTRACTING OFFICER STATES IN HIS REPORT DATED JUNE 12, 1970, AS FOLLOWS:

*** RALPH EDWARDS VIOLATED THIS PROVISION BY BLOCK BIDDING, I.E., BIDDING ON THE FIRST 7,470 EACH AND THEN INCLUDING THIS SAME QUANTITY WITH AN ADDITIONAL 1,000 FOR THE NEXT INCREMENT OF 8,470 EACH AND SO ON UNTIL EACH ADDITIONAL 1,000 ADDED THEREON REACHES THE TOTAL PROCUREMENT QUANTITY OF 16,470 EACH. THE VIOLATION OF THE CAUSE BECOMES QUITE APPARENT BY ADDING THE MINIMUM QUANTITY BID UPON FOR EACH BLOCK. THIS TOTAL EXCEEDS THE PROCUREMENT QUANTITY OF 16,470 EACH. SINCE RALPH EDWARDS EVIDENTLY IS NOT BIDDING ON MORE THAN THE TOTAL PROCUREMENT QUANTITY, IT IS CLEAR THAT THIS FIRM HAS OFFERED MORE THAN ONE PRICE FOR A QUANTITY.

IN DISCUSSING THE VALIDITY OF THE QUANTITY LIMITATION PROHIBITION CLAUSE, WE STATED AT 48 COMP. GEN. 372,376 (1968):

IT DOES NOT APPEAR THAT WE WOULD BE WARRANTED IN TAKING THE POSITION THAT THE TESTING OF THE PROHIBITION AGAINST BLOCK BIDDING AS A POSSIBLE MEANS OF ENABLING THE DEFENSE PERSONNEL SUPPORT CENTER TO MAKE MORE TIMELY AWARDS WOULD BE IMPROPER, SINCE 10 U.S.C. 2305 CONTEMPLATES THAT AWARDS BE MADE WITH REASONABLE PROMPTNESS AND IT IS APPARENT THAT THE SUBMISSION OF BLOCK BIDS IN THE PAST ON GOVERNMENT PROCUREMENTS OF CLOTHING AND TEXTILE PRODUCTS HAS HAD THE EFFECT OF CAUSING UNREASONABLE DELAYS IN THE MAKING OF CONTRACT AWARDS. ALSO, THE FACT THAT THE PRACTICE OF BLOCK BIDDING MAY HAVE AFFORDED CERTAIN COMPANIES, SUCH AS TANENBAUM TEXTILE COMPANY, INCORPORATED, AN OPPORTUNITY TO QUOTE LESS THAN AN AVERAGE PRICE ON RELATIVELY SMALL QUANTITIES OF TEXTILES AS COMPARED WITH THE TOTAL QUANTITY BID ON, WOULD NOT APPEAR NECESSARILY TO JUSTIFY A CONCLUSION THAT IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO ALLOW THE PRACTICE OF BLOCK BIDDING TO BE CONTINUED IN THESE CASES.

WE FIND NO REASON TO QUESTION THE USE OF THE QUANTITY LIMITATION PROHIBITION CLAUSE IN THIS CASE.

YOU CONTEND THAT RALPH EDWARDS' BIDDING METHOD IS A MINOR INFORMALITY OR IRREGULARITY WHICH SHOULD BE WAIVED PURSUANT TO PARAGRAPH 10 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS. A MINOR INFORMALITY OR IRREGULARITY IS DEFINED BY ARMED SERVICES PROCUREMENT REGULATION 2-405 AS " *** ONE WHICH IS MERELY A MATTER OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS *** ." IT IS APPARENT THAT THE TYPE OF IRREGULARITY CONTEMPLATED BY THE REGULATION DOES NOT ENCOMPASS THE SITUATION PRESENTED IN THE INSTANT CASE. THE METHOD OF BIDDING EMPLOYED BY RALPH EDWARDS IS EXACTLY WHAT THE QUANTITY LIMITATION PROHIBITION CLAUSE WAS DESIGNED TO PREVENT. WE FIND NO BASIS TO QUESTION THE CONTRACTING OFFICER'S CONCLUSION THAT THE MATTER COMPLAINED OF MAY NOT BE WAIVED AS A MINOR IRREGULARITY.

WITH REGARD TO YOUR ALLEGATION THAT THE CLAUSE IS AMBIGUOUS, WE QUOTE FROM THE CONTRACTING OFFICER'S REPORT:

B. ALLEGED AMBIGUITY OF THE QUANTITY LIMITATION PROHIBITION CLAUSE

(1) THE ATTORNEY FOR RALPH EDWARDS CLAIMS THE CLAUSE IS AMBIGUOUS BECAUSE THE PROVISION WHICH PERMITS AN OFFEROR TO STIPULATE A MINIMUM AND MAXIMUM ACCEPTABLE QUANTITY FOR EACH ITEM CONTRADICTS THE STATEMENT THAT AN OFFER OF ONLY ONE QUANTITY FOR ANY ITEM IS PROPER. THE FOREGOING PROVISIONS ARE NOT IN CONFLICT BUT ACTUALLY ARE AND DESIGNED TO BE COMPATIBLE WITH EACH OTHER.

(2) THIS MAY BE DEMONSTRATED BY AN EXAMPLE FROM THE INSTANT SOLICITATION. THE QUANTITY TO BE DELIVERED TO MECHANICSBURG DEFENSE DEPOT IS 3,080 EACH. UNDER THE CLAUSE, AN OFFEROR MAY BID ONLY ONE PRICE FOR THIS QUANTITY. HOWEVER, A PARTICULAR OFFEROR MAY NOT DESIRE AN AWARD AT THIS DESTINATION IF HE IS TO RECEIVE LESS THAN A CERTAIN QUANTITY, E.G., LESS THAN 1,500 EACH. CONVERSELY, ANOTHER OFFEROR MAY NOT DESIRE AN AWARD AT THIS DESTINATION IF HE IS TO RECEIVE MORE THAN A CERTAIN QUANTITY, E.G., MORE THAN 1,500 UNITS.

(3) CONSEQUENTLY, EACH OFFEROR IS PERMITTED UNDER THE CLAUSE TO STIPULATE HOW MUCH OR HOW LITTLE HE DESIRES FOR A PARTICULAR ITEM OR DESTINATION. IT SHOULD BE EMPHASIZED THAT THE STIPULATION OF A MINIMUM AND/OR MAXIMUM ACCEPTABLE QUANTITY DOES NOT PERMIT AN OFFEROR TO GIVE MORE THAN ONE PRICE FOR THE QUANTITY INVOLVED.

BASED ON THE RECORD BEFORE US, WE FIND NO BASIS TO CONCLUDE THAT THE QUANTITY LIMITATION PROHIBITION CLAUSE CAUSED ANY AMBIGUITY IN THIS SOLICITATION.

ACCORDINGLY, FOR THE REASON STATED, YOUR PROTEST IS DENIED.