B-171788, JUN 10, 1971

B-171788, JUN 10, 1971

BID PROTEST - BID RESPONSIVENESS - AMBIGUITIES IN IFB DENIAL OF PROTEST OF SUPERIOR SLEEPRITE AGAINST AWARD OF CONTRACT TO ANOTHER FIRM UNDER IFB ISSUED BY GSA, FEDERAL SUPPLY SERVICE, FOR NORMAL SUPPLY REQUIREMENTS FOR STEEL DESKS FOR THE TEN GSA REGIONS. PROTESTANT WAS REJECTED AS NONRESPONSIVE FOR FAILING TO INCLUDE BID BASED ON F.O.B. DESTINATION. IT IS ALLEGED BY SUPERIOR THAT AMBIGUITIES IN IFB MISLEAD THE FIRM INTO SUBMITTING BID F.O.B. ORIGIN PRICES. FOR AMBIGUITY TO EXIST MORE THAN ONE REASONABLE INTERPRETATION OF A BIDDING SCHEDULE MUST BE SHOWN. PROTESTANT'S BID WAS PROPERLY REJECTED AS IFB PARAGRAPH 4(D) CLEARLY STATED CONTRACT WOULD BE AWARDED ON BASIS OF F.O.B. DESTINATION PRICE AND THAT ORIGIN PRICES WOULD NOT BE CONSIDERED. PROTESTANT'S INTERPRETATION IN LIGHT OF PARAGRAPH 4(D) WAS UNREASONABLE.

TO SUPERIOR SLEEPRITE:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 29, 1971, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE AWARDS OF CONTRACTS TO OTHER CONCERNS UNDER INVITATION FOR BIDS (IFB) NO. FPNFO-T5-18723-A-10-15-70, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA), FEDERAL SUPPLY SERVICE, ON SEPTEMBER 15, 1970.

FOR THE REASONS HEREINAFTER STATED, THE PROTEST IS DENIED.

THE IFB, AS AMENDED, SOLICITED BIDS ON 20 ITEMS CLASSIFIED UNDER FEDERAL SUPPLY CATALOG CLASS 7125, COVERING THE NORMAL SUPPLY REQUIREMENTS OF SPECIFIED GSA SUPPLY DEPOTS FOR GENERAL OFFICE STEEL DESKS FOR THE PERIOD FROM FEBRUARY 1, 1971, OR DATE OF AWARD, WHICHEVER WAS LATER, THROUGH JANUARY 31, 1972. SUBSEQUENT TO THE OCTOBER 15, 1970, BID OPENING, GSA REJECTED THE BID OF SUPERIOR SLEEPRITE AS NONRESPONSIVE IN THAT THE BID FAILED TO INCLUDE PRICES ON AN F.O.B. DESTINATION BASIS. A REVIEW OF THE BID DISCLOSES THAT SUPERIOR QUOTED PRICES ON AN F.O.B. ORIGIN BASIS ONLY. ON APRIL 22, 1971, CONTRACTS WERE AWARDED TO TWO OTHER FIRMS.

SINCE THE PRINCIPAL BASIS OF YOUR PROTEST RELATES TO ALLEGED AMBIGUITIES IN THE IFB, WHICH, IT IS CONTENDED, MISLED THE FIRM INTO SUBMITTING ONLY F.O.B. ORIGIN PRICES, WE WILL FOCUS UPON THOSE PROVISIONS OF THE IFB WHICH ARE PERTINENT TO THE RESOLUTION OF THE MATTER. BIDDERS WERE REQUIRED TO INDICATE THE TOTAL NUMBER OF DESKS WHICH COULD BE ALLOCATED AND FURNISHED GSA ON A MONTHLY BASIS DURING THE CONTRACT PERIOD (MONTHLY QUANTITY ALLOCATION). PARAGRAPH 2 OF THE IFB SET FORTH THE 20 FEDERAL STOCK ITEMS TO BE PROCURED ALONG WITH ESTIMATED ANNUAL REQUIREMENTS FOR EACH ITEM. PARAGRAPH 4 CONTAINED THE METHOD OF AWARD PROVISIONS OF THE IFB, IN PERTINENT PART, AS FOLLOWS:

"(A) BASIC AWARDS: AWARD WILL BE MADE ITEM-BY-ITEM (REGIONAL AREA) UNDER EACH FEDERAL STOCK NUMBER ON THE BASIS OF THE GOVERNMENT'S ESTIMATED ANNUAL REQUIREMENTS TO THE LOW RESPONSIVE OFFERORS UP TO THEIR STATED MONTHLY QUANTITY ALLOCATIONS. WITHIN THE LIMITS PRESCRIBED BY THE OFFEROR, THE GOVERNMENT WILL APPLY OFFEROR'S MONTHLY QUANTITY ALLOCATION TO ANY ITEMS OFFERED, AS THE GOVERNMENT'S INTERESTS REQUIRE. IN ORDER TO QUALIFY FOR AN AWARD, AN OFFEROR MUST OFFER A MONTHLY QUANTITY ALLOCATION WHICH, WHEN MULTIPLIED BY THE NUMBER OF MONTHS REPRESENTING THE CONTRACT PERIOD, COVERS THE GOVERNMENT'S ESTIMATED ANNUAL REQUIREMENT ON AT LEAST ONE ITEM UNDER A FEDERAL STOCK NUMBER. INDIVIDUAL ITEM (REGIONAL AREA) QUANTITIES WILL NOT BE SUBDIVIDED FOR AWARD PURPOSES.

"(D) F.O.B. POINT OF ORIGIN AND EXPORT PACKING PRICES: THESE PRICES WILL NOT BE CONSIDERED IN THE EVALUATION OF OFFERS. HOWEVER, AWARDS ON THESE BASES WILL BE MADE TO OFFERORS WHO ARE AWARDED CONTRACTS ON AN F.O.B. DESTINATION BASIS WHEN THE PRICES OFFERED ARE CONSIDERED REASONABLE."

PARAGRAPHS 6 AND 7 DISCUSSED DELIVERY REQUIREMENTS AS FOLLOWS:

"6. DELIVERY-POINT OF ORIGIN PRICES:

"(A) PRICES ARE F.O.B. POINT OF ORIGIN, AND SUCH PRICES COVER DELIVERY TO ANY POINTS WITHIN THE METROPOLITAN AREA OF THE SHIPPING POINT.

"(B) WHEN DELIVERY IS TO BE MADE TO POINTS NOT INCLUDED UNDER PARAGRAPH (A), ABOVE, AND ORDERING OFFICES HAVE NOT SPECIFIED OTHERWISE IN DELIVERY INSTRUCTIONS, THE CONTRACTOR WILL SHIP ON GOVERNMENT BILLS OF LADING.

"7. DELIVERY - DESTINATION PRICES: PRICES COVER DELIVERY TO DESTINATIONS WITHIN THE GENERAL SERVICES ADMINISTRATION REGIONAL AREAS SPECIFIED IN THIS CONTRACT, AS PROVIDED BELOW; AND MUST BE BASED ON THE USE OF OVERLAND TRANSPORTATION."

FURTHER, PARAGRAPH 7 LISTED THE GSA REGIONS AND THEIR GEOGRAPHIC AREAS BY STATE. WITH RESPECT TO F.O.B. ORIGIN PRICES, IN CONJUNCTION WITH THE "CARLOAD QUANTITIES AND GUARANTEED SHIPPING WEIGHTS" SCHEDULE, PARAGRAPH 13 STATED:

"OFFERORS SUBMITTING F.O.B. ORIGIN PRICES ARE REQUESTED TO FURNISH IN THE SPACES PROVIDED ELSEWHERE IN THIS SOLICITATION THE MINIMUM AND MAXIMUM NUMBER OF UNITS THAT CAN BE LOADED AND SHIPPED AT FULL CARLOAD RATE IN A FREIGHT CAR OF THE SPECIFIED SIZE AND THE GUARANTEED SHIPPING WEIGHT AND CUBAGE OF THE PACKED CONTAINER. *** "

PARAGRAPH 14 CALLED FOR CERTAIN INFORMATION TO BE FURNISHED BY BIDDERS UNDER THE CAPTION "F.O.B. POINT OF ORIGIN INFORMATION REQUIRED." THE BID SCHEDULE OF ITEMS DIVIDED GSA'S ESTIMATED ANNUAL REQUIREMENTS BY REGIONAL AREA, AND STATED, QUOTING THE SCHEDULE ON ITEM NO. 7 FOR PURPOSES OF EXAMPLE, AS FOLLOWS:

(CHART OMITTED)

GSA FORM 1126, INCORPORATED INTO THE IFB BY REFERENCE, CONTAINED CONSIGNMENT INFORMATION AND INSTRUCTIONS FOR BIDDERS, AND LISTED THE GSA REGIONAL AREAS AND SUPPLY DISTRIBUTION FACILITIES (SUPPLY DEPOTS).

IT IS CONTENDED THAT THE LANGUAGE OF THE SOLICITATION WAS AMBIGUOUS TO SUCH AN EXTENT THAT SUPERIOR WAS MISLED INTO SUBMITTING A NONRESPONSIVE BID. OUR OFFICE HAS HELD THAT NO AMBIGUITY EXISTS IN THE ABSENCE OF MORE THAN ONE REASONABLE INTERPRETATION OF A BIDDING SCHEDULE. SEE 48 COMP. GEN. 757, 760 (1969), WHEREIN WE STATED:

"THE MERE ALLEGATION THAT SOMETHING IS AMBIGUOUS DOES NOT MAKE IT SO. SIMILARLY, SOME FACTOR IN A WRITTEN INSTRUMENT MAY BE SOMEWHAT CONFUSING AND PUZZLING WITHOUT CONSTITUTING AN AMBIGUITY, PROVIDED THAT AN APPLICATION OF REASON WOULD SERVE TO REMOVE THE DOUBT. IN OTHER WORDS, AN AMBIGUITY EXISTS ONLY IF TWO OR MORE REASONABLE INTERPRETATIONS ARE POSSIBLE. DITTMORE-FREIMUTH CORP. V UNITED STATES, 182 CT. CL. 507, 390 F. 2D 664 (1968). KEEPING IN MIND CORBIN'S STATEMENT THAT 'VAGUENESS, INDEFINITENESS, AND UNCERTAINTY ARE MATTERS OF DEGREE, WITH NO ABSOLUTE STANDARD FOR COMPARISON' (CORBIN ON CONTRACTS, SEC 95, PAGE 396), THE INQUIRY IS WHETHER THE BIDDING SCHEDULE CAUSED SUCH UNCERTAINTY THAT ONE MIGHT REASONABLY BELIEVE THAT THE GOVERNMENT DESIRED PRICES ON PACKAGING AND NOT ON THE DATA ITEM."

SEE, ALSO, B-169594(1), OCTOBER 27, 1970. FURTHERMORE, THE FACT THAT THE PROVISIONS OF A SOLICITATION ARE SUBJECT TO DIVERGENT INTERPRETATIONS IS INSUFFICIENT, IN AND OF ITSELF, TO CREATE AN AMBIGUITY. B-170825, APRIL 14, 1971, AND CASES CITED THEREIN. KEEPING THESE PRINCIPLES IN MIND, WE BELIEVE THAT SUPERIOR'S FAILURE TO SUBMIT PRICES ON AN F.O.B. DESTINATION BASIS, AS REQUIRED BY THE IFB, RESULTED FROM AN UNREASONABLE INTERPRETATION OF THE IFB PROVISIONS.

OUR ATTENTION IS INVITED TO SECTION 5A-72.105-6(D) OF THE GENERAL SERVICES PROCUREMENT REGULATIONS (GSPR) WHICH STATES THAT "WHEN PRICES ARE TO BE REQUESTED ON MORE THAN ONE BASIS, THE INVITATION SHOULD STATE CLEARLY THE BASIS ON WHICH AWARDS WILL BE MADE." SUPERIOR ASSERTS THAT NO CLEAR STATEMENT EXISTS IN THE IFB AS TO THE BASIS UPON WHICH AWARDS WILL BE MADE. EXPANDING ON THIS ASSERTION, SUPERIOR STATES THAT THE USE OF THE TERM "ITEM-BY-ITEM" IN PARAGRAPH 4(A) CONTRIBUTES TO THE AMBIGUOUS NATURE OF THE IFB. WE DO NOT AGREE. WE NEED ONLY REFER TO THE ABOVE-QUOTED WORDING OF PARAGRAPH 4(D) WHICH WARNS BIDDERS THAT F.O.B. POINT OF ORIGIN PRICES WILL NOT BE CONSIDERED IN THE EVALUATION OF OFFERS. IN VIEW OF THIS LANGUAGE, WE CAN ENVISAGE NO SITUATION WHEREIN A BIDDER WOULD BE REASONABLY JUSTIFIED IN SUBMITTING PRICES ON AN F.O.B. ORIGIN BASIS ONLY. A REVIEW OF THE IFB REVEALS NO REASONABLE INTERPRETATION OTHER THAN THAT AWARDS WERE TO BE MADE ON AN F.O.B. DESTINATION BASIS. MORE SPECIFICALLY, PARAGRAPH 4(D) CLEARLY INDICATES THAT F.O.B. ORIGIN PRICES WILL NOT BE THE BASIS FOR EVALUATION UNLESS AND UNTIL CONTRACTS HAVE BEEN AWARDED TO BIDDERS ON AN F.O.B. DESTINATION BASIS IN THE SITUATION WHEN THE ORIGIN PRICES ARE CONSIDERED REASONABLE. GSA HAS ADVISED THAT SUBSEQUENT TO AWARD ON A DESTINATION BASIS, THE AWARDEE'S F.O.B. ORIGIN PRICES ARE REVIEWED TO DETERMINE THE MORE ECONOMICAL BASIS UPON WHICH TO ISSUE A PURCHASE ORDER. SUCH A PROCEDURE, AS WELL, IS SET FORTH IN GSPR 5A-72.105 -26 AND 5A-72.106-1.

YOU INVITE OUR ATTENTION TO GSPR 5-2.407-52(A) AND (B), WHICH PROVIDES:

"(A) WHEN AN INVITATION FOR BIDS PROVIDES FOR BID PRICES BASED ON DELIVERY AT DESTINATION, ALL BIDS BASED ON F.O.B. SHIPPING POINT SHALL BE REJECTED. WHERE NO ACCEPTABLE BIDS BASED ON F.O.B. DESTINATION ARE RECEIVED, OR WHERE COMPARISON OF PRICES F.O.B. SHIPPING POINT AND F.O.B. DESTINATION INDICATES THAT READVERTISEMENT WOULD OTHERWISE BE IN THE BEST INTERESTS OF THE GOVERNMENT, THE REQUIREMENT SHOULD BE READVERTISED AND PROVISION MADE FOR BIDDERS TO BID BOTH F.O.B. SHIPPING POINT AND F.O.B. DESTINATION.

"(B) WHEN THE INVITATION FOR BIDS PERMITS BID PRICES ON AN F.O.B. DESTINATION BASIS OR AN F.O.B. SHIPPING POINT BASIS, OR BOTH, BIDS SHALL BE CONSIDERED AND AWARD MADE ON WHICHEVER BASIS WILL RESULT IN THE LOWEST OVERALL COST TO THE GOVERNMENT. IN SUCH CASES, ALL PERTINENT FACTORS, INCLUDING TRANSPORTATION COSTS AND BILL OF LADING PREPARATION AND PROCESSING COSTS, SHALL BE CONSIDERED."

IN THIS CONNECTION, YOU CONTEND THE IFB WAS DEFECTIVE IN FAILING TO INCLUDE F.O.B. ORIGIN PRICES IN THE EVALUATION, THUS DEPRIVING THE GOVERNMENT OF AN OPTION TO CONSIDER PRICES ON BOTH BASES AND, THEREBY, MAKE AN AWARD WHICH WILL RESULT IN THE LOWEST COST. ALSO, YOU CONTEND THAT SUPERIOR'S ORIGIN PRICES, IF CONVERTED TO DESTINATION PRICES BY USING THEIR COST OF DELIVERY FIGURES, WOULD RESULT IN AWARDS AT LOWER PRICES THAN THE ACTUAL AWARDS TO THE OTHER BIDDERS. GSA HAS RESPONDED THAT THE IFB "WAS SPECIFICALLY DRAFTED TO PROVIDE FOR THE LOWEST OVERALL COST TO THE GOVERNMENT" SINCE F.O.B. ORIGIN PRICES WERE UTILIZED IF MORE ECONOMICAL THAN THE DESTINATION PRICES SUBMITTED BY AWARDEES.

IN ADDITION, GSA STATED:

" *** THE CLAIM BY SUPERIOR THAT ITS ORIGIN PRICES, IF ADJUSTED TO REFLECT THE COST OF DELIVERY TO VARIOUS DESTINATIONS, WOULD BE DEMONSTRABLY LOWER THAN THE DESTINATION PRICES SUBMITTED BY OTHER OFFERORS, IS SPECULATIVE. BEING A SOLICITATION FOR A REQUIREMENTS CONTRACT, IT IS IMPOSSIBLE TO DETERMINE WHAT PERCENTAGE OF ORDERS WOULD BE SHIPPED TO VARIOUS DESTINATIONS WITHIN EACH REGIONAL AREA; WHAT PERCENTAGE WOULD BE SHIPPED BY COMMON CARRIER, OR BY CONTRACTOR'S VEHICLE; OR WHAT PERCENTAGE WOULD BE SHIPPED IN CARLOAD, LESS-THAN CARLOAD, TRUCKLOAD, OR LESS-THAN-TRUCKLOAD LOTS TO EACH DESTINATION. ESTIMATIONS WOULD, OF COURSE, PRODUCE HIGHLY SPECULATIVE DESTINATION PRICES. ALSO, THE ARGUMENT THAT LOWER PRICES WOULD BE RECEIVED UPON RESOLICITATION IS, OF COURSE, TOTALLY UNSUBSTANTIATED AND MERE CONJECTURE."

OUR OFFICE HAS HAD OCCASION TO CONSIDER SIMILAR CONTENTIONS IN CONNECTION WITH A REQUIREMENTS-TYPE GSA PROCUREMENT. IN 48 COMP. GEN. 62 (1968), WE WERE FACED WITH THE CONTENTION SUCH AS YOURS UNDER A SOLICITATION CONTAINING SIMILAR CLAUSES THAT WHERE GSA CONSIDERED ONLY F.O.B. DESTINATION PRICES IN THE EVALUATION PROCESS, BIDDERS WERE NOT INDUCED TO SUBMIT THEIR BEST ORIGIN PRICES. WE NOTE THAT IN THE IMMEDIATE CASE, HILLSIDE METAL PRODUCTS, INC., SUBMITTED HIGHER ORIGIN PRICES THAN DESTINATION PRICES. IN THE FORMER SOLICITATION, AS HERE, BIDDERS WERE ADVISED THAT F.O.B. ORIGIN PRICES WOULD NOT BE CONSIDERED IN EVALUATION OF OFFERS, BUT THAT WHEN SUCH PRICES ARE REASONABLE, AWARDS WOULD BE MADE ON THAT BASIS. SUBSEQUENT TO THE ISSUANCE OF THAT DECISION, GSA ADVISED OUR OFFICE OF THE DIFFICULTIES INHERENT IN ATTEMPTING TO SOLICIT ORIGIN PRICES IN REQUIREMENTS-TYPE CONTRACTS OF THIS NATURE. THE GSA GENERAL COUNSEL STATED:

" *** ALTHOUGH IT MAY BE THEORETICALLY POSSIBLE TO PREPARE AN INVITATION WHICH WOULD INCLUDE AN F.O.B. ORIGIN EVALUATION FOR A REQUIREMENTS CONTRACT OF THIS TYPE, SUCH AN EVALUATION WOULD, OF NECESSITY, BE BASED ON HIGHLY SPECULATIVE WEIGHT FACTORS AND WOULD BE EXTREMELY TIME CONSUMING AND COSTLY. IN ORDER TO PROVIDE A BASIS FOR EVALUATION THAT WOULD HAVE ANY POSSIBLE VALIDITY, IT APPEARS TO US THAT WE WOULD HAVE TO ESTIMATE THE PROBABLE SHIPMENTS TO VARIOUS DESTINATIONS; WE WOULD THEN HAVE TO ESTIMATE THE PERCENTAGE OF THOSE SHIPMENTS THAT WOULD BE MADE IN CARLOAD, TRUCKLOAD, LESS-THAN-CARLOAD, AND LESS-THAN-TRUCKLOAD LOTS TO EACH DESTINATION. THE TYPE OF SHIPMENT IS, OF COURSE, OF PARTICULAR IMPORTANCE WHERE, AS IN THIS CASE, TRANSPORTATION REPRESENTS A SUBSTANTIAL PART OF THE COST OF THE ITEM INVOLVED."

WE NOTE THAT IN THE IMMEDIATE CASE DELIVERIES COULD BE ORDERED TO 25 SEPARATE SUPPLY DEPOTS WITHIN THE 10 GSA REGIONS. THUS THE SAME PROBLEMS ARE PRESENT HERE AS WERE EVIDENT IN THE PRIOR CASE. WITH RESPECT TO THE FORMER SITUATION, WE ADVISED GSA IN B-163917, NOVEMBER 18, 1968, THAT "IN VIEW OF THE DIFFICULTIES OUTLINED IN THE GENERAL COUNSEL'S LETTER WE WILL IMPOSE NO OBJECTION TO THE USE OF THE SAME PROCEDURES IN FUTURE PROCUREMENTS FOR THE GOVERNMENT'S REQUIREMENTS FOR THE ITEMS INVOLVED." CONSISTENT THEREWITH, WE FIND NO BASIS UPON WHICH TO OBJECT TO THE USE BY GSA OF SIMILAR EVALUATION METHODS IN THIS SOLICITATION.

ACCORDINGLY, GSA PROPERLY REJECTED SUPERIOR'S BID AS NONRESPONSIVE TO THE MATERIAL TERMS OF THE SOLICITATION. B-151984, NOVEMBER 4, 1963; B 160294, DECEMBER 9, 1966.