B-171313, JUL 30, 1971

B-171313: Jul 30, 1971

Additional Materials:

Contact:

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

 

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

THE RECORD INDICATES THAT VU DATA BELIEVED THE MAXIMUM ORDER LIMITATION CLAUSE WAS AMBIGUOUS AND THAT THEY SOUGHT CLARIFICATION OF THIS AMBIGUITY FROM THE CONTRACTING OFFICER AND THE GENERAL SERVICES ADMINISTRATION. 667 OF WHICH WAS FOR 28 MONITOR OSCILLOSCOPES AND THE REMAINDER FOR CERTAIN MINOR ASSOCIATED EQUIPMENT. WAS ISSUED UNDER GENERAL SERVICES ADMINISTRATION (GSA) FEDERAL SUPPLY SCHEDULE CONTRACT NO. THE BASIS OF YOUR PROTEST IS THAT THE SUBJECT PURCHASE ORDER IS IN DEROGATION OF SUBPARAGRAPH (A)(2) OF SPECIAL PROVISION 1 IN THE BASIC GSA CONTRACT WHICH LIMITS ORDERS THEREUNDER TO $50. THE ADMINISTRATIVE REPORT INDICATES THAT IT WAS DETERMINED AT NASA HEADQUARTERS ON NOVEMBER 18.

B-171313, JUL 30, 1971

BID PROTEST - MAXIMUM ORDER LIMITATION - AMBIGUOUS CLAUSE DECISION DENYING PROTEST OF AIKEN INDUSTRIES, INC. AGAINST A PURCHASE ORDER ISSUED BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION TO VU DATA CORPORATION FOR THE PROCUREMENT OF MONITOR OSCILLOSCOPES AND ASSOCIATED EQUIPMENT. THE RECORD INDICATES THAT VU DATA BELIEVED THE MAXIMUM ORDER LIMITATION CLAUSE WAS AMBIGUOUS AND THAT THEY SOUGHT CLARIFICATION OF THIS AMBIGUITY FROM THE CONTRACTING OFFICER AND THE GENERAL SERVICES ADMINISTRATION. UNDER THESE CIRCUMSTANCES, THE COMP. GEN. DOES NOT BELIEVE THAT THE GOVERNMENT CAN NOW INSIST UPON AN INTERPRETATION OF THE CLAUSE DETRIMENTAL TO VU DATA.

TO COLE AND GRONER:

WE REFER TO YOUR LETTER DATED NOVEMBER 18, 1970, AND OTHER CORRESPONDENCE, ON BEHALF OF AIKEN INDUSTRIES, INCORPORATED, PROTESTING AGAINST PURCHASE ORDER NO. S-61176A, ISSUED BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) ON SEPTEMBER 30, 1970, TO VU DATA CORPORATION (VU DATA). THE SUBJECT ORDER IN THE SUM OF $81,606.20, $79,667 OF WHICH WAS FOR 28 MONITOR OSCILLOSCOPES AND THE REMAINDER FOR CERTAIN MINOR ASSOCIATED EQUIPMENT, WAS ISSUED UNDER GENERAL SERVICES ADMINISTRATION (GSA) FEDERAL SUPPLY SCHEDULE CONTRACT NO. GS-00S 86675. THE BASIS OF YOUR PROTEST IS THAT THE SUBJECT PURCHASE ORDER IS IN DEROGATION OF SUBPARAGRAPH (A)(2) OF SPECIAL PROVISION 1 IN THE BASIC GSA CONTRACT WHICH LIMITS ORDERS THEREUNDER TO $50,000 FOR SINGLE ITEMS AND $100,000 FOR COMBINATION OF ITEMS.

THE ADMINISTRATIVE REPORT INDICATES THAT IT WAS DETERMINED AT NASA HEADQUARTERS ON NOVEMBER 18, 1970, THAT THE ORDER HAD BEEN IMPROPERLY ISSUED AND SHOULD BE CANCELLED IMMEDIATELY. THIS INFORMATION WAS RELAYED TO A REPRESENTATIVE OF VU DATA WHO AFTER CONSIDERING THE MATTER ADVISED THAT THE ORDER WOULD BE RETURNED. HOWEVER, THE NEXT DAY COUNSEL FOR VU DATA ADVISED THAT THE ORDER WOULD NOT BE RETURNED. ON NOVEMBER 20 AFTER A MEETING WITH NASA PERSONNEL, VU DATA ADVISED IN WRITING THAT THEY WOULD INCUR NO FURTHER COST AND MAKE NO FURTHER DELIVERIES PENDING RESOLUTION OF THE MATTER. AT THAT TIME VU DATA HAD COMPLETED AND SHIPPED 11 UNITS AND THE REMAINING UNITS WERE ESTIMATED TO BE 90 PERCENT COMPLETE.

THE PERTINENT PROVISION OF THE FEDERAL SUPPLY SCHEDULE CONTRACT STATES:

"(2) MAXIMUM ORDER LIMITATION. THE TOTAL DOLLAR VALUE OF ANY ORDER PLACED UNDER THIS CONTRACT SHALL NOT EXCEED THE AMOUNTS SHOWN BELOW, PROVIDED, THAT THE DOLLAR VALUE FOR ANY SINGLE ITEM ORDERED, WHETHER ORDERED SEPARATELY OR IN COMBINATION WITH OTHER ITEMS, SHALL NOT EXCEED THE DOLLAR AMOUNTS SET FORTH BELOW IN THE ITEMS INDICATED. THE CONTRACTOR AGREES NOT TO ACCEPT OR FULFILL ANY ORDERS IN VIOLATION OF THIS PROVISION. VIOLATION MAY RESULT IN TERMINATION OF THE CONTRACT PURSUANT TO THE CLAUSE OF THE GENERAL PROVISIONS ENTITLED 'DEFAULT.'

SINGLE COMBINATION

ITEM OF ITEMS

CHARTS, RECORDING $20,000 $ 35,000

RECORDERS, ANALOG $20,000 $ 50,000

OSCILLOSCOPES AND OSCILLOGRAPHS $50,000 $100,000"

YOU CONTEND THAT THE SUBJECT PURCHASE ORDER WAS ISSUED IN VIOLATION OF THE MAXIMUM ORDER LIMITATION CLAUSE (MOL) OF THE GSA CONTRACT AND THEREFORE THE ORDER MUST BE CANCELLED AND A COMPETITIVE REPROCUREMENT SOLICITED FOR THE TOTAL QUANTITY. ON THE OTHER HAND, COUNSEL FOR VU DATA CONTENDS THAT THE MOL IS AMBIGUOUS AND AS SUCH SHOULD BE CONSTRUED AGAINST THE GOVERNMENT AND THE ORDER UPHELD, AS ISSUED, PURSUANT TO VU DATA'S REASONABLE INTERPRETATION OF THE MOL. IN THE ALTERNATIVE, VU DATA'S COUNSEL CONTENDS THAT IF THE ORDER IS HELD TO HAVE BEEN ISSUED IN VIOLATION OF THE MOL, THEN VU DATA SHOULD BE COMPENSATED PURSUANT TO THE DOCTRINE OF QUANTUM VALEBAT FOR THE ENTIRE VALUE OF THE ORDER.

MORE SPECIFICALLY, COUNSEL FOR VU DATA CONTENDS THAT THE ORDER MUST BE UPHELD BASED UPON THE PREMISE THAT ALTHOUGH THE TERM "ITEM" IN THE COLUMNS OF THE MOL ENTITLED "SINGLE ITEM" AND "COMBINATION OF ITEMS" REFERS TO LINE ITEMS, IT WAS REASONABLE FOR VU DATA TO CONCLUDE THAT THE PHRASE "SINGLE ITEM" APPEARING IN THE TEXT OF THE MOL WAS INTENDED TO DENOTE A SINGLE UNIT IN THE CATEGORY OF OSCILLOSCOPES. IN THE ALTERNATIVE, COUNSEL FOR VU DATA ARGUES THAT SINCE MULTIPLE ITEMS ARE INVOLVED IT WAS REASONABLE FOR THAT FIRM TO ASSUME THAT THE $100,000 LIMITATION COULD BE APPLIED TO THE ITEM, OSCILLOSCOPES, RATHER THAN THE TOTAL VALUE OF THE COMBINATION ORDER. THESE CONTENTIONS ARE PUT FORTH IN SUPPORT OF COUNSEL'S ARGUMENT FOR APPLICATION OF THE DOCTRINE THAT A REASONABLE INTERPRETATION BY A NONDRAFTING PARTY OF AN AMBIGUOUS CLAUSE IS BINDING ON THE DRAFTING PARTY.

WE BELIEVE THERE IS A REASONABLE BASIS FOR VU DATA'S CONTENTION THAT THE ABOVE-QUOTED PORTION OF THE CONTRACT IS AMBIGUOUS. THE RECORD SHOWS THAT VU DATA SOUGHT CLARIFICATION OF THIS AMBIGUITY FROM THE GOVERNMENT. SHOWS FURTHER THAT THE NASA CONTRACTING OFFICER DISCUSSED THE MAXIMUM ORDER LIMITATION WITH THE GSA CONTRACTING OFFICER BEFORE PLACING THE DELIVERY ORDER, AND WAS UNDER THE IMPRESSION THE ORDER WAS PROPER. UNDER THE CIRCUMSTANCES, WE DO NOT BELIEVE THE GOVERNMENT CAN NOW INSIST UPON AN INTERPRETATION OF THE AMBIGUOUS LANGUAGE DETRIMENTAL TO VU DATA.

WE FEEL THAT HIS MOL CLAUSE SHOULD BE SUBJECT TO THE FAMILIAR RULE WHICH HOLDS THAT WHEN A SUBSTANTIVE PROVISION OF A GOVERNMENT-DRAWN AGREEMENT IS FAIRLY SUSCEPTIBLE OF A CERTAIN CONSTRUCTION AND THE CONTRACTOR ACTUALLY AND REASONABLY SO CONSTRUES THE CLAUSE, THAT INTERPRETATION WILL BE ADOPTED UNLESS THE PARTIES' INTENTION IS OTHERWISE AFFIRMATIVELY REVEALED. WPC ENTERPRISES, INCORPORATED V UNITED STATES, 323 F. 2D 874, 177 CT. CL. 1084 (1964).

IN THESE CIRCUMSTANCES, WHERE IT IS EVIDENT FROM THE RECORD THAT VU DATA WAS MISLED BY THE GOVERNMENT INTO INCURRING CONSIDERABLE EXPENSE WE FEEL THAT IT WOULD BE MANIFESTLY UNFAIR FOR THIS OFFICE TO RECOMMEND THAT THE ORDER BE CANCELED AT THIS TIME. ACCORDINGLY, IT IS OUR CONCLUSION THAT YOUR PROTEST MUST, THEREFORE, BE DENIED.