B-174673, MAY 24, 1972

B-174673: May 24, 1972

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THE LATE BID PROVISIONS OF ASPR 2-303.4 ARE NOT APPLICABLE IN THIS CASE BECAUSE THE CONTRACTING OFFICER WAS NO LONGER UNDER A DUTY TO CONSIDER PROTESTANT'S PROPOSAL BY THE TIME IT ARRIVED. THE CIRCUMSTANCES WERE SUCH THAT THE CONTRACTING OFFICER COULD REASONABLY HAVE ASSUMED THAT THE AWARD WOULD BE MADE BASED ON THE PROPOSALS RECEIVED. INCORPORATED: REFERENCE IS MADE TO YOUR TELEGRAM DATED DECEMBER 3. YOUR BASIS OF PROTEST IS THAT YOUR TELEGRAPHIC MODIFICATION OF BID PRICE WAS IN THE HANDS OF NAVY PERSONNEL AT MECHANICSBURG FOR MORE THAN 37 HOURS PRIOR TO THE TIME OF AWARD TO ANOTHER COMPANY BUT WAS NOT COMMUNICATED TO THE CONTRACTING OFFICER UNTIL ALMOST THREE HOURS AFTER AWARD. YOU CONTEND THAT THE DECISION THAT YOUR MODIFIED BID PRICE WAS A "LATE BID" WAS IN ERROR.

B-174673, MAY 24, 1972

BID PROTEST - LATE BID DENIAL OF PROTEST BY LAND-AIR, INC., AGAINST THE AWARD OF A CONTRACT TO ERIE TOOL WORKS FOR 803,000 MS3314 SUSPENSION LUGS BY THE NAVY SHIP PARTS CONTROL CENTER, MECHANICSBURG, PA. THE LATE BID PROVISIONS OF ASPR 2-303.4 ARE NOT APPLICABLE IN THIS CASE BECAUSE THE CONTRACTING OFFICER WAS NO LONGER UNDER A DUTY TO CONSIDER PROTESTANT'S PROPOSAL BY THE TIME IT ARRIVED. THE CIRCUMSTANCES WERE SUCH THAT THE CONTRACTING OFFICER COULD REASONABLY HAVE ASSUMED THAT THE AWARD WOULD BE MADE BASED ON THE PROPOSALS RECEIVED.

TO LAND-AIR, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEGRAM DATED DECEMBER 3, 1971, PROTESTING THE AWARD OF A CONTRACT TO ANOTHER BIDDER FOR 803,000 MS3314 SUSPENSION LUGS BY THE NAVY SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA.

YOUR BASIS OF PROTEST IS THAT YOUR TELEGRAPHIC MODIFICATION OF BID PRICE WAS IN THE HANDS OF NAVY PERSONNEL AT MECHANICSBURG FOR MORE THAN 37 HOURS PRIOR TO THE TIME OF AWARD TO ANOTHER COMPANY BUT WAS NOT COMMUNICATED TO THE CONTRACTING OFFICER UNTIL ALMOST THREE HOURS AFTER AWARD. YOU CONTEND THAT THE DECISION THAT YOUR MODIFIED BID PRICE WAS A "LATE BID" WAS IN ERROR, PARTICULARLY SINCE YOUR FINAL BID WAS LOWER THAN THE PRICE FOR WHICH AWARD WAS MADE AND THAT THE DELAY WAS DUE TO MISHANDLING BY NAVY PERSONNEL, A SITUATION WITHIN THE EXCEPTION OF ASPR 2-303.4.

IT IS REPORTED THAT IN SEPTEMBER 1971, AN URGENT REQUIREMENT FOR MS3314 SUSPENSION LUGS WAS RECEIVED. THESE LUGS ARE USED IN THE MK-80 BOMB AND WERE TO BE USED TO SUPPORT OPERATIONS IN SOUTHEAST ASIA.

IN ACCORDANCE WITH 10 U.S.C. 2304(A)(2), APPROPRIATE AUTHORITY GRANTED PERMISSION TO NEGOTIATE COMPETITIVELY FOR 803,000 UNITS OF SUSPENSION LUGS WITH ERIE TOOL WORKS AND LAND-AIR. THESE TWO COMPANIES WERE THE ONLY SOURCES WHICH HAD PREVIOUSLY MANUFACTURED MS3314 SUSPENSION LUGS AND FOR WHICH FIRST ARTICLE TESTING COULD BE WAIVED. SOLICITATIONS WERE LIMITED TO THESE TWO SOURCES BECAUSE OF THE URGENCY INVOLVED AND TIGHT REQUIREMENTS OF THE DELIVERY SCHEDULE. PERMISSION WAS ALSO GRANTED TO WAIVE SYNOPSIS OF THE SOLICITATION IN THE COMMERCE BUSINESS DAILY AND TO SOLICIT PROPOSALS ORALLY. ACCORDINGLY, ON OCTOBER 5, 1971, ERIE TOOL AND LAND-AIR WERE EACH VERBALLY REQUESTED TO SUBMIT QUOTATIONS ON 803,000 UNITS OF THE MS3314 SUSPENSION LUGS ON THE FOLLOWING BASIS.

A. F.O.B. ORIGIN.

B. SPECIFICATION MIL-L-81558 INVOKED.

C. PACKAGING FOR 125,000 UNITS TO BE COMMERCIAL TYPE.

PACKAGING FOR 678,000 UNITS TO BE SPECIAL TYPE.

D. DELIVERY REQUIREMENTS: DATE UNITS

12/71 251,000

1/72 276,000

2/72 276,000

E. QUOTATIONS TO BE FURNISHED BY OCTOBER 11, 1971.

TIMELY OFFERS WERE RECEIVED FROM BOTH COMPANIES AND NEITHER COMPANY TOOK EXCEPTION TO THE DELIVERY SCHEDULE. ERIE TOOL OFFERED TO SUPPLY THE ENTIRE QUANTITY AT A UNIT PRICE OF $1.018. LAND-AIR OFFERED TO SUPPLY THE 678,000 SPECIAL TYPE PACKAGING UNITS AT A UNIT PRICE OF $1.02 AND THE 125,000 COMMERCIAL TYPE PACKAGING UNITS AT A UNIT PRICE OF $1.025. THE PRICES QUOTED COMPARED FAVORABLY WITH EARLIER PRICES WHICH RANGED BETWEEN $1.005 AND $1.035, AND THE CONTRACTING OFFICER CONSIDERED THAT ADEQUATE PRICE COMPETITION EXISTED. HE PROPOSED TO MAKE AWARD TO THE LOW OFFEROR, ERIE TOOL, WITHOUT NEGOTIATION; AUTHORITY TO CONTRACT WITH ERIE TOOL WAS REQUESTED FROM THE CHIEF OF NAVAL MATERIAL (CNM), ON NOVEMBER 5, 1971. PRIOR TO CLEARANCE, NAVAL MATERIAL REQUESTED ADDITIONAL INFORMATION.

WHILE THE ADDITIONAL INFORMATION WAS BEING GATHERED FOR NAVAL MATERIAL, HOWEVER, TECHNICAL PERSONNEL INFORMED THE CONTRACTING OFFICER THAT THE PACKAGING FOR THE ENTIRE LOT OF 803,000 SUSPENSION LUGS SHOULD BE COMMERCIAL SINCE SPECIAL PACKAGING FOR A PORTION OF THE LOT WAS NO LONGER REQUIRED. THIS INFORMATION WAS TRANSMITTED TO BOTH ERIE TOOL AND LAND-AIR ON NOVEMBER 18, 1971, AND BOTH COMPANIES WERE VERBALLY REQUESTED TO SUBMIT THEIR BEST AND FINAL OFFER AS SOON AS POSSIBLE ON THIS CHANGE IN PACKAGING REQUIREMENTS.

BASED UPON THE CHANGE IN PACKAGING REQUIREMENTS, LAND-AIR REVISED ITS QUOTATION TO $1.0175 PER UNIT, BY TELEGRAM OF NOVEMBER 18, 1971, AND FURTHER REVISED ITS PRICE ON NOVEMBER 19, 1971, TO $1.0075 PER UNIT. THIS LATTER PRICE REVISION STATED THAT" *** THIS IS OUR BEST AND FINAL OFFER." ERIE TOOL SUBMITTED ITS BEST AND FINAL OFFER ON NOVEMBER 22, 1971, AT A UNIT PRICE OF $1.005 PER SUSPENSION LUG.

NO FIRM DATE WAS ESTABLISHED FOR THE RECEIPT OF BEST AND FINAL OFFERS.

THE ADDITIONAL INFORMATION, INCLUDING THE REVISED LOW OFFER OF ERIE TOOL, WAS FORWARDED TO NAVAL MATERIAL ON NOVEMBER 23, 1971, BY TELEPHONE AND CONFIRMED BY MESSAGE. A REQUEST TO CONTRACT WITH ERIE TOOL WAS APPROVED ON NOVEMBER 24, 1971, AND THE APPROVAL TO CONTRACT WAS COMMUNICATED TO SHIPS PARTS CONTROL CENTER ON NOVEMBER 30, 1971. THE CONTRACTING OFFICER SENT AN OFFER OF AWARD TO ERIE TOOL AT 11:00 A.M. ON DECEMBER 1, 1971. MEANWHILE, LAND-AIR DISPATCHED A MESSAGE DATED NOVEMBER 29, 1971, REDUCING ITS UNIT PRICE TO $.995. THIS MESSAGE WAS APPARENTLY TRANSMITTED AT 6:16 P.M., E.S.T., ON NOVEMBER 29, 1971, FROM FORT WORTH, TEXAS, AND WAS RECEIVED AT THE SHIPS PARTS CONTROL CENTER AT 8:34 A.M. ON NOVEMBER 30, 1971, BUT WAS NOT DELIVERED TO THE CONTRACTING OFFICER UNTIL 2:00 P.M. ON DECEMBER 1, 1971. THE CONTRACTING OFFICER CAUSED AN INVESTIGATION TO BE MADE INTO THE REASONS FOR THE DELAY IN DELIVERING THE LAND-AIR MESSAGE, BUT NO VALID REASONS OR CAUSES WERE FOUND TO EXPLAIN THE DELAY IN DELIVERY.

IN YOUR TELEGRAM YOU CITE THE PROVISIONS OF THE LATE BID RULES WHICH PERMIT CONSIDERATION OF A LATE BID OR LATE BID MODIFICATION IF THE LATENESS IS ATTRIBUTABLE TO MISHANDLING ON THE PART OF THE GOVERNMENT. SEE ASPR 2-303.4 AND 2-305. WE DO NOT THINK THE CAUSE OF THE DELAY MATTERS INSOFAR AS THE TIMELINESS OF YOUR PROPOSAL IS CONCERNED. IN OUR VIEW THE CONTRACTING OFFICER NO LONGER WAS UNDER A DUTY TO CONSIDER YOUR PROPOSAL BY THE TIME IT ARRIVED. BY DECEMBER 1 HE REASONABLY COULD HAVE ASSUMED THAT AWARD SHOULD BE MADE BASED ON THE PROPOSALS RECEIVED. BOTH PROPOSERS HAD ALREADY SUBMITTED BEST AND FINAL OFFERS. HE CLEARLY DID NOT ACT HASTILY IN DISPATCHING A TELEGRAM NOTIFYING ERIE TOOL THAT IT WAS THE SUCCESSFUL OFFEROR. BECAUSE THE TIME FACTOR DICTATED THE USE OF AN ORAL SOLICITATION, ERIE TOOL WAS GIVEN UNTIL DECEMBER 8 TO ACCEPT A FORMAL CONTRACT IN ACCORDANCE WITH ITS PRICE PROPOSAL. ERIE TOOL TELEGRAPHED ITS ACCEPTANCE ON DECEMBER 2. IN THE MEANTIME THE CONTRACTING OFFICER RECEIVED YOUR PRICE REDUCTION. IT APPEARS THAT THIS PROPOSAL HAD BEEN DELAYED IN TRANSMISSION AT THE INSTALLATION. NEVERTHELESS, WE DO NOT BELIEVE EITHER THE CITED LATE BID RULES OR ANY OTHER REGULATORY PROVISION CALLED FOR THE CONTRACTING OFFICER TO REOPEN THE SELECTION PROCESS IN ORDER TO CONSIDER YOUR PROPOSAL UNDER THESE CIRCUMSTANCES.

THERE IS NO QUESTION THAT IN ORDER TO AVOID ANY CONFUSION, THE CONTRACTING OFFICER SHOULD HAVE SET FORTH A FIRM DATE FOR RECEIPT OF REVISED OFFERS. IN THIS CONNECTION THE DEPARTMENT OF THE NAVY HAS ADVISED US THAT INSTRUCTIONS HAVE BEEN ISSUED TO ALL BUYING PERSONNEL CONCERNING BEST AND FINAL OFFERS AND THE FIXING OF A SPECIFIC DATE BY WHICH THE GOVERNMENT WOULD RECEIVE SUCH OFFERS FOR USE IN CONNECTION WITH ALL FUTURE PROCUREMENTS AND SUCH INSTRUCTIONS SHOULD PRECLUDE A FUTURE OCCURRENCE OF THIS TYPE.

HOWEVER, YOUR PROTEST MUST BE DENIED.