B-174842, JUN 5, 1972, 51 COMP GEN 792

B-174842: Jun 5, 1972

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NOR IS THE BID INVALID BECAUSE A 90 PERCENT DISCOUNT WAS OFFERED ON THE CAPTIVE PARTS. IT WAS INAPPROPRIATE IN THE EVALUATION OF THE ALTERNATE BID TO CONSIDER AN UNLIQUIDATED COST REDUCTION TO ADMINISTER ONE DISCOUNT. 1972: REFERENCE IS MADE TO LETTER LGPM DATED FEBRUARY 14. WE RECOMMEND THAT THE CONTRACT AWARDED TO EAST BAY BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT SINCE THE RECORD ESTABLISHES THAT AWARD WAS MADE TO OTHER THAN THE LOW RESPONSIVE BIDDER AND THAT AWARD OF THE PROCUREMENT BE MADE TO PENSACOLA. IS WILLING TO ACCEPT THE AWARD AT ITS BID PRICE AND IT IS DETERMINED TO BE A RESPONSIBLE PROSPECTIVE CONTRACTOR. WE WOULD APPRECIATE ADVICE OF WHATEVER ACTION IS TAKEN ON OUR RECOMMENDATION.

B-174842, JUN 5, 1972, 51 COMP GEN 792

BIDS - ALTERNATIVE - FAILURE TO BID ON ALTERNATE - BID REJECTION UNJUSTIFIED THE REQUIREMENTS AWARD UNDER AN IFB SOLICITING BASE AND ALTERNATE BIDS FOR MOTOR VEHICLE PARTS PURSUANT TO THE CONCEPT OF A CONTRACTOR OPERATED ON-BASE PARTS STORE, WHICH ASKED FOR SEPARATE DISCOUNTS IN THE BASE BID ON COMMON AND CAPTIVE PARTS AND A SINGLE DISCOUNT IN THE ALTERNATE BID ON THE PARTS, SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND AN AWARD OFFERED TO THE LOW BIDDER ON THE BASE BID SINCE THE BIDDER'S FAILURE TO BID ON THE ALTERNATE ITEMS DID NOT JUSTIFY REJECTION OF ITS LOW BASE BID AS THE BID COVERED ALL THE WORK CONTEMPLATED, NOR IS THE BID INVALID BECAUSE A 90 PERCENT DISCOUNT WAS OFFERED ON THE CAPTIVE PARTS, AS THE UNUSUALLY HIGH DISCOUNT DOES NOT EVIDENCE THE SUBMISSION OF AN UNBALANCED BID, A MISTAKE, OR THE FUTURE INTENT TO TRANSFER PARTS DURING CONTRACT PERFORMANCE TO THE LOWER COMMON PARTS CATEGORY. MOREOVER, IN THE ABSENCE OF AN IFB PROVISION, IT WAS INAPPROPRIATE IN THE EVALUATION OF THE ALTERNATE BID TO CONSIDER AN UNLIQUIDATED COST REDUCTION TO ADMINISTER ONE DISCOUNT. GENERAL ACCOUNTING OFFICE - RECOMMENDATIONS - IMPLEMENTATION A RECOMMENDATION FOR CORRECTIVE ACTION - THE TERMINATION OF A CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT AND AN AWARD TO THE LOW, RESPONSIVE BIDDER - REQUIRES THE CONTRACTING AGENCY UNDER SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91-510, TO SUBMIT WRITTEN STATEMENTS OF THE ACTION TAKEN WITH RESPECT TO THE RECOMMENDATION TO THE HOUSE AND SENATE COMMITTEES ON GOVERNMENT OPERATIONS NOT LATER THAN 60 DAYS AFTER THE DATE OF THE RECOMMENDATION, AND TO THE COMMITTEES ON APPROPRIATION IN CONNECTION WITH THE FIRST REQUEST FOR APPROPRIATIONS MADE MORE THAN 60 DAYS AFTER THE DATE OF THE RECOMMENDATION.

TO THE SECRETARY OF THE AIR FORCE, JUNE 5, 1972:

REFERENCE IS MADE TO LETTER LGPM DATED FEBRUARY 14, 1972, WITH ENCLOSURES, FROM THE CHIEF, CONTRACT MANAGEMENT DIVISION, DIRECTORATE, PROCUREMENT POLICY, DEPUTY CHIEF OF STAFF, SYSTEMS AND LOGISTICS, AND SUPPLEMENTAL DOCUMENTATION SUPPLIED SUBSEQUENT THERETO, ALL REPORTING ON THE PROTEST OF PENSACOLA ELECTRIC GARAGE, INC. (PENSACOLA), AGAINST THE AWARD OF A CONTRACT TO EAST BAY AUTO SUPPLY INC. (EAST BAY), UNDER INVITATION FOR BIDS (IFB) NO. F08651-72-B-0089, ISSUED BY EGLIN AIR FORCE BASE (EGLIN), FLORIDA.

FOR THE REASONS HEREINAFTER STATED, WE RECOMMEND THAT THE CONTRACT AWARDED TO EAST BAY BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT SINCE THE RECORD ESTABLISHES THAT AWARD WAS MADE TO OTHER THAN THE LOW RESPONSIVE BIDDER AND THAT AWARD OF THE PROCUREMENT BE MADE TO PENSACOLA, IF THAT FIRM, THE LOW BIDDER, IS WILLING TO ACCEPT THE AWARD AT ITS BID PRICE AND IT IS DETERMINED TO BE A RESPONSIBLE PROSPECTIVE CONTRACTOR. SEE 51 COMP. GEN. 62 (1971). IN MAKING THIS RECOMMENDATION, WE REQUESTED, RECEIVED AND CONSIDERED THE VIEWS OF EAST BAY, IN ACCORDANCE WITH OUR BID PROTEST REGULATIONS (4 CFR 20.2). FURTHERMORE, WE WOULD APPRECIATE ADVICE OF WHATEVER ACTION IS TAKEN ON OUR RECOMMENDATION.

AS THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN, IT IS BEING TRANSMITTED BY LETTERS OF TODAY TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91-510, 31 U.S.C. 1172. IN VIEW THEREOF, YOUR ATTENTION IS DIRECTED TO SECTION 236 OF THE ACT WHICH REQUIRES THAT YOU SUBMIT WRITTEN STATEMENTS OF THE ACTION TAKEN WITH RESPECT TO THE RECOMMENDATION. THE STATEMENTS ARE TO BE SENT TO THE HOUSE AND SENATE COMMITTEES ON GOVERNMENT OPERATIONS NOT LATER THAN 60 DAYS AFTER THE DATE OF THIS LETTER AND TO THE COMMITTEES ON APPROPRIATIONS IN CONNECTION WITH THE FIRST REQUEST FOR APPROPRIATIONS MADE BY YOUR AGENCY MORE THAN 60 DAYS AFTER THE DATE OF THIS LETTER.

THE IFB REQUESTED BIDS ON A REQUIREMENTS CONTRACT FOR THE FURNISHING TO EGLIN OF COMMERCIAL PARTS AND ACCESSORIES FOR MOTOR VEHICLES AND OTHER EQUIPMENT SPECIFIED THEREIN UNDER THE CONCEPT OF A CONTRACTOR OPERATED, ON -BASE MOTOR VEHICLE PARTS STORE (COPARS) FOR THE PERIOD OF JANUARY 1 THROUGH DECEMBER 31, 1972. THE SCHEDULE OF ITEMS IN THE IFB SOLICITED BIDS ON BASE BID AND ALTERNATE BID BASES. THE BASE BID SET FORTH GOVERNMENT ESTIMATES OF PARTS CONSUMPTION REPRESENTING THE TOTAL ANNUAL ANTICIPATED REQUIREMENTS AT RETAIL VALUE OF THREE TYPES OF PARTS (COMMON, CAPTIVE AND REBUILT) TO WHICH BIDDERS WERE TO CITE SEPARATE DISCOUNTS. THE ALTERNATE BID CALLED FOR A SINGLE DISCOUNT FOR COMMON AND CAPTIVE PARTS, WHILE REQUESTING A SEPARATE DISCOUNT ONLY FOR REBUILT PARTS. BOTH THE BASE AND ALTERNATE BID REQUIRED AN HOURLY RATE FOR OPERATION OF THE PARTS STORE DURING NONDUTY HOURS FOR AN ESTIMATED 80 HOURS. IN ADDITION, THE IFB SUPPLIED THE FOLLOWING DEFINITIONS:

E. REBUILT PART. A USED, UNSERVICEABLE PART THAT HAS BEEN RECONDITIONED TO BECOME A SERVICEABLE PART.

H. COMMON PART. A PART THAT IS PRODUCED BY MORE THAN ONE MANUFACTURER THEREBY BECOMING AVAILABLE FROM MORE THAN ONE SOURCE OF SUPPLY IN THE COMPETITIVE COMMERCIAL REPLACEMENT PARTS SYSTEM. (FOR EXAMPLE, IF A PARTICULAR PART FOR AN INTERNATIONAL VEHICLE MUST BE OBTAINED FROM INTERNATIONAL OR THEIR DEALERS, THE PART IS "CAPTIVE." HOWEVER, IF THE PART OR A SUBSTITUTE PART ALSO CAN BE OBTAINED FROM OTHER MANUFACTURERS OR DEALERS, THE PART IS COMMON REGARDLESS OF WHERE IT IS OBTAINED. A SEAL FOR A FORD VEHICLE WHICH CAN BE OBTAINED FROM SOURCES OTHER THAN THE FORD PARTS DISTRIBUTION SYSTEM IS "COMMON" EVEN THOUGH THE BOX IT COMES IN MAY BE MARKED "FOR FORD MODEL YEAR

I. CAPTIVE PARTS. A PART (1) MANUFACTURED OR CONTROLLED BY A SINGLE SOURCE AND AVAILABLE ONLY FROM THE MANUFACTURER OR HIS DEALERS AND (2) NOT AVAILABLE UNDER THE PROVISIONS OF PARAGRAPH H ABOVE. A COMMON PART REQUESTED BY THE GOVERNMENT BY BRAND NAME BECOMES A CAPTIVE PART.

SECTION "D" OF THE IFB, ENTITLED "EVALUATION OF BIDS," READS AS FOLLOWS:

BIDS WILL BE EVALUATED AND AWARD BASED ON THE LOWEST AGGREGATE OF THE NET AMOUNTS OF EITHER ITEMS IA, IB(1), IB(2), IC(1), IC(2), AND II OF THE BASE BID OR NET AMOUNTS OF ITEMS IA, IB, AND II OF THE ALTERNATE BID. ALL NET AMOUNTS (ITEM I) WILL BE THE GOVERNMENT'S ESTIMATE LESS THE DISCOUNT OFFERED. FAILURE TO BID ON EVERY ITEM IN THE BASE BID AND EVERY ITEM IN THE ALTERNATE BID WILL CAUSE REJECTION OF BID.

ONLY ONE CONTRACT WILL BE AWARDED FROM THIS SOLICITATION.

PENSACOLA SUBMITTED THE LOW BID ON THE BASE BID ITEMS AMOUNTING TO $277,847.40 AFTER CONSIDERING PROMPT PAYMENT DISCOUNTS, BUT FAILED TO BID ON THE ALTERNATE ITEMS. THE EGLIN CONTRACTING OFFICER REJECTED THE PENSACOLA BID PRIMARILY BECAUSE IT FAILED TO BID ON THE ALTERNATE ITEMS AS REQUIRED BY SECTION "D," QUOTED ABOVE. WHEREUPON, THE CONTRACT WAS AWARDED TO EAST BAY ON NOVEMBER 19, 1971, AS THE LOWEST RESPONSIVE BIDDER ON THE BASIS OF ITS ALTERNATE BID IN THE AGGREGATE NET AMOUNT OF $302,264.72. PENSACOLA PROTESTED THE AWARD TO OUR OFFICE ON THE GROUND THAT, AS LOW BIDDER IN ACCORDANCE WITH THE EVALUATION SECTION OF THE IFB, IT WAS ENTITLED TO THE AWARD, AND THAT IT WAS NOT NECESSARY TO SUBMIT AN ALTERNATE BID TO BE RESPONSIVE TO THE ADVERTISED REQUIREMENTS.

THE EGLIN CONTRACTING OFFICER SUPPORTS, IN DETAIL, THE REJECTION OF THE PENSACOLA BID AND EXPLAINS THE BASIS FOR REQUIRING BIDS ON THE TWO BASES AS FOLLOWS:

OTHER DOD ACTIVITIES HAVE ENCOUNTERED DIFFICULTIES WHEN COPARS CONTRACTS HAVE BEEN AWARDED WHICH CONTAIN SEPARATE AND DIFFERENT DISCOUNTS FOR "COMMON" AND "CAPTIVE" PARTS. MISCLASSIFICATION OF "COMMON" PARTS AS "CAPTIVE" WAS NOTED AS A MAJOR DEFICIENCY IN CONTRACTS AUDITED BY THE AUDITOR GENERAL, AS REPORTED IN AFSC (PPPR) LETTER TO THIS CENTER DATED 28 AUGUST 1970. AN "ACROSS-THE-BOARD" DISCOUNT ON COMMON AND CAPTIVE PARTS HAS BEEN SUGGESTED AS A BETTER METHOD OF PROCUREMENT IN SEVERAL INSTANCES (FOR EXAMPLE, THE REPORT FROM THE WORLD-WIDE COMMAND PROCUREMENT CONFERENCE IN 1969). BECAUSE OF THIS, AND SINCE IT IS RECOGNIZED THAT A CONSOLIDATED DISCOUNT SHOULD AFFORD A BETTER OVERALL PRICE TO THE GOVERNMENT BY REDUCING THE CONTRACTOR'S ADMINISTRATIVE TIME AND BY REDUCING COST OF AUDITING BY GOVERNMENT PERSONNEL, IT WAS DECIDED THAT BIDS ON THE CURRENT SOLICITATION BE OBTAINED THAT WAY. BECAUSE OF THE POSSIBILITY THAT NO BIDS WOULD BE SUBMITTED ON AN "ACROSS-THE-BOARD" DISCOUNT UNLESS REQUIRED, AND SINCE IT WAS UNCERTAIN WHETHER IT WOULD BE A LOWER NET COST IF BIDS WERE OFFERED IN THAT MANNER, IT WAS DECIDED TO REQUIRE BIDS ON BOTH BASES; THAT IS, WITH THE "COMMON" AND "CAPTIVE" DISCOUNTS SEPARATELY AS A BASE BID, AND CONSOLIDATED AS AN ALTERNATE BID.

*** THIS AMOUNT (TOTAL DOLLAR VALUE) IS AN ESTIMATE FOR THE ONE YEAR CONTRACT PERIOD, AND AS SUCH, THERE IS NO WAY TO DETERMINE EXACTLY WHAT MONETARY DIFFERENCE WILL ACTUALLY RESULT FROM THE AWARD IN THIS MANNER.

*** THERE IS NO WAY TO DETERMINE A DOLLAR FIGURE THAT THE GOVERNMENT WILL SAVE BY AWARDING ON THE BASIS OF THE COMBINED DISCOUNTS; BUT WITHOUT DOUBT, THE COST OF ADMINISTRATION AND AUDIT WILL BE SIGNIFICANTLY REDUCED. ***

*** THE BID SUBMITTED BY PENSACOLA ELECTRIC GARAGE IS CONSIDERED TO BE UNBALANCED AND AS SUCH, AWARD TO THAT FIRM WOULD HAVE REQUIRED AN EXTENSIVE EVALUATION IN CONSIDERING THEIR RESPONSIBILITY IF THE BID HAD BEEN OTHERWISE RESPONSIVE. IT SHOULD BE NOTED THAT THE DISCOUNT OFFERED ON ITEMS IB(1) CAPTIVE PARTS FOR SWEEPING AND FIRE FIGHTING EQUIPMENT WAS 90% AND IB(2) OTHER CAPTIVE PARTS WAS 90%. THE OTHER BIDS ON ITEM IB(1) RANGED FROM 0% TO 45% AND IB(2) FROM 10% TO 45%. RECORDS ON PREVIOUS COPARS BIDS AT THIS CENTER INDICATE THAT DISCOUNTS BID ON OTHER CAPTIVE PARTS HAVE NEVER BEEN HIGHER THAN 60%. A TABULATION OF STATISTICS (COMPILED BY THE AIR FORCE LOGISTICS COMMAND/AFLC) ON COPARS CONTRACTS AS FURNISHED TO ATTENDEES OF THE WORLD-WIDE MAJOR COMMAND STAFF PROCUREMENT CONFERENCE IN 1969 INDICATES NO DISCOUNT BEING OFFERED ON CAPTIVE PARTS IN EXCESS OF 50% WHILE THE AVERAGE OFFERED FOR THE 87 CONTRACTS REPRESENTED IS 9.67%. BASED ON THIS, AND COMMON KNOWLEDGE REGARDING PRICE LISTED AUTOMOTIVE PARTS IT IS THE OPINION OF THE CONTRACTING OFFICER THAT THE 90% DISCOUNT IS BELOW COST AND AS SUCH WOULD BE INDICATIVE OF A MISTAKE IN BID OR SOME INTENTION ON THE PART OF THE BIDDER TO MOVE A SIGNIFICANT PORTION OF "CAPTIVE" PARTS INTO THE "COMMON" CATEGORY DURING PERFORMANCE OF THE CONTRACT. AGAIN IT SHOULD BE NOTED THAT THE DISCOUNT OFFERED BY PENSACOLA ELECTRIC GARAGE, INC. FOR "COMMON" PARTS WAS 30% WHILE THE AWARD TO EAST BAY AUTO SUPPLY RESULTS IN 45% DISCOUNT BEING OBTAINED ON "COMMON" PARTS.

WE DO NOT BELIEVE THAT THE FAILURE OF PENSACOLA TO SUBMIT AN ALTERNATE BID JUSTIFIED REJECTION, EVEN THOUGH THE IFB CLEARLY REQUIRED A BID ON THE ALTERNATE ITEMS. THERE CAN BE NO DOUBT THAT PENSACOLA, IN ACCORDANCE WITH THE ABOVE-QUOTED SECTION "D" OF THE IFB, SUBMITTED THE LOWEST EVALUATED BID. WE HAVE HELD THAT THE FAILURE OF A BIDDER TO RESPOND TO A REQUEST FOR PRICES ON AN ALTERNATE CONSTITUTES NO BASIS, SUFFICIENT IN ITSELF, TO REQUIRE REJECTION OF A BID. THE CONCLUSION TO BE DRAWN FROM DECISIONS OF OUR OFFICE IN SITUATIONS SUCH AS THIS, WHEN A BIDDER FAILS TO BID ON A REQUIRED ALTERNATE, IS THAT THE BID SHOULD NOT BE REJECTED WHERE, AS MADE, IT COVERS THE ENTIRE WORK CONTEMPLATED UNDER THE RESULTANT CONTRACT. SEE B-175055, MARCH 28, 1972, AND CASES CITED THEREIN. NOTHING HAS BEEN PROFFERED BY EGLIN CONTRACTING OFFICIALS WHICH DETRACTS FROM THE CONCLUSION THAT PENSACOLA WOULD HAVE BEEN LEGALLY REQUIRED TO PERFORM ALL WORK UNDER THE CONTRACT, AS REQUIRED BY THE IFB.

IN THIS REGARD, WE DO NOT SUBSCRIBE TO THE CONTRACTING OFFICER'S CONSIDERATION OF EVALUATION FACTORS OTHER THAN PRICE TO JUSTIFY THE REJECTION OF THE PENSACOLA BID, I.E., AN UNLIQUIDATED REDUCTION OF THE GOVERNMENT'S COSTS OF ADMINISTRATION AND AUDIT IF A CONTRACT WITH A SINGLE DISCOUNT FOR COMMON AND CAPTIVE PARTS WERE AWARDED. WE HAVE HELD THAT A CARDINAL RULE OF COMPETITIVE BIDDING PROCEDURES REQUIRES THAT THE INVITATION FOR BIDS MUST ADVISE BIDDERS OF ANY FACTOR OTHER THAN BID PRICE WHICH IS TO BE CONSIDERED IN DETERMINING THE LOW BIDDER. SEE 45 COMP. GEN. 433, 435 (1966). THEREFORE, IF EGLIN FELT THAT CONSIDERATION OF REDUCED ADMINISTRATION COSTS, WHICH COULD REASONABLY BE QUANTIFIED BY AN AWARD ON THE ALTERNATE ITEMS WAS A FACTOR TO BE CONSIDERED, THE IFB SHOULD HAVE SET FORTH THE ADMINISTRATIVE COST SAVING TO BE USED IN BID EVALUATION. SEE 47 COMP. GEN. 233, 234, 235 (1967); 50 ID. 447, 454 (1970); AND PARAGRAPH 2 201(A) SEC. DI) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH CALLS FOR THE INSERTION IN AN IFB OF "A STATEMENT OF THE EXACT BASIS UPON WHICH BIDS WILL BE EVALUATED AND AWARD MADE, TO INCLUDE ANY GOVERNMENT COSTS OR EXPENDITURES (OTHER THAN BID PRICES) TO BE ADDED OR DEDUCTED." IN THE ABSENCE OF SUCH A STATEMENT OF ADMINISTRATIVE COST SAVINGS IN THE IFB, IT IS INAPPROPRIATE TO CONSIDER ADMINISTRATIVE COSTS IN THE EVALUATION OF BIDS FOR AWARD. SEE B-172107(1), JULY 19, 1971.

FURTHERMORE, WE DO NOT CONCUR WITH THE CONTRACTING OFFICER TO THE EFFECT THAT PENSACOLA'S OFFER OF AN UNUSUALLY HIGH DISCOUNT FOR THE CAPTIVE PARTS EVIDENCES THE SUBMISSION OF AN UNBALANCED BID, A MISTAKE, OR SOME FUTURE INTENTION TO TRANSFER PARTS DURING CONTRACT PERFORMANCE TO THE LOWER DISCOUNT COMMON PARTS CATEGORY. THE POSSIBILITY OF MISTAKE IS OBVIATED BY THE FACT THAT, IN A LETTER TO OUR OFFICE, PENSACOLA, THROUGH ITS ATTORNEY, VERIFIED THE BID WITH INTELLIGENT REFERENCE TO THE HIGH DISCOUNT FOR CAPTIVE PARTS. AS FOR ANY POSSIBLE ATTEMPT BY PENSACOLA DURING CONTRACT PERFORMANCE TO SUBVERT ITS HIGH DISCOUNT, WE INVITE YOUR ATTENTION TO THE FACT THAT THE PROVISIONS OF THE IFB AND APPROPRIATE AIR FORCE REGULATIONS COVERING COPARS MATTERS PROVIDE CONTRACT ADMINISTRATION TECHNIQUES AND PROCEDURES, WHICH, IF PROPERLY IMPLEMENTED, WILL PREVENT ANY SUCH SUBVERSION.

ON THE MATTER OF UNBALANCING, WE QUOTE FROM OUR DECISIONS IN 49 COMP. GEN. 330, 335 (1969), AND ID. 335, 343-344 (1969), WITH RESPECT TO OUR VIEWS EXPRESSED ON PRIOR COPARS PROCUREMENTS:

AS TO THE MATTER OF UNBALANCED BIDS GENERALLY, IT IS OUR VIEW THAT IT IS IN THE BEST INTEREST OF THE GOVERNMENT TO DISCOURAGE, THROUGH APPROPRIATE INVITATION SAFEGUARDS, THE SUBMISSION OF UNBALANCED BIDS BASED ON SPECULATION AS TO WHICH ITEMS ARE PURCHASED IN GREATER QUANTITIES. COMP. GEN. 572 (1959). HOWEVER, BID UNBALANCING PER SE DOES NOT AUTOMATICALLY OPERATE TO INVALIDATE AN AWARD OF A CONTRACT TO A BIDDER. SEE B-161928, AUGUST 8, 1967. FURTHER, THE IFB PROVIDED FOR SEPARATE DISCOUNTS ON COMMON PARTS AND CAPTIVE PARTS AT THE OPTION OF THE BIDDERS, AND THERE IS NO EVIDENCE THAT DOVER'S DISCOUNTS ON THESE TWO KINDS OF PARTS CONSTITUTED IRREGULARITY OF SUCH A SUBSTANTIAL NATURE AS TO AFFECT FAIR AND COMPETITIVE BIDDING. SEE B-164736, DECEMBER 2, 1968. (WE NOTE THAT THE MAC PROPOSAL TO ELIMINATE THIS PROBLEM OF UNBALANCED BIDS BY REQUIRING BIDDERS TO CITE ONLY ONE DISCOUNT FOR BOTH COMMON AND CAPTIVE PARTS IN A REVISED IFB MAY EFFECTIVELY ELIMINATE THIS PROBLEM.) * * * * *

THE FACT THAT A BID MAY BE UNBALANCED DOES NOT RENDER IT NONRESPONSIVE, NOR DOES SUCH FACTOR OF ITSELF INVALIDATE AN AWARD OF A CONTRACT TO SUCH BIDDER. AS WAS STATED BY THE COURT IN FRANK STAMATO & CO. V. CITY OF NEW BRUNSWICK, 90 A. 2D. 34, 36 (1952), "THERE MUST BE PROOF OF COLLUSION OR OF FRAUDULENT CONDUCT ON THE PART OF SUCH BIDDER *** OR PROOF OF OTHER IRREGULARITY OF SUCH SUBSTANTIAL NATURE AS WILL OPERATE TO AFFECT FAIR AND COMPETITIVE BIDDING." THEREFORE, WHERE A BIDDER HAS CONFIRMED A BID WHICH APPEARS TO BE UNBALANCED AND THERE IS NO INDICATION THAT THE BID IS NOT AS INTENDED OR EVIDENCE OF ANY IRREGULARITY, WE HAVE HELD THAT THE BID MAY BE ACCEPTED IF IT IS OTHERWISE THE LOWEST ACCEPTABLE BID AND THE BIDDER IS RESPONSIBLE. 38 COMP. GEN. 572, 574 (1959); B-161928, AUGUST 8, 1967; B- 164736, DECEMBER 2, 1968, AFFIRMED JUNE 10, 1969. SEE, ALSO, OUR DECISION 49 COMP. GEN. 330 OF TODAY (ON THE DOVER CASE) TO THE SECRETARY OF THE AIR FORCE.

WE HAVE BEEN INFORMALLY ADVISED BY THE CONTRACTING OFFICER THAT THE ESTIMATES UTILIZED IN THE IFB WERE BASED ON THE BEST INFORMATION AVAILABLE, TAKING INTO ACCOUNT PAST PARTS CONSUMPTION EXPERIENCE AND PROJECTED FUTURE REQUIREMENTS FOR THE CONTRACT TERM. SINCE THE QUANTITIES USED BY EGLIN IN THE IFB REPRESENT A REASONABLE AND BONA FIDE ESTIMATE OF PROBABLE REQUIREMENTS, THE FACT THAT PENSACOLA HAS SUBMITTED A HIGH DISCOUNT FOR CAPTIVE PARTS AT ITS OWN RISK DOES NOT INVALIDATE THE BID. SEE B-168205(1), JUNE 30, 1970, AT PAGE 11. FURTHER, THERE IS NO PROHIBITION AGAINST A BIDDER SUBMITTING A BID WHICH WILL RESULT IN A CONTRACT EVENTUALLY PERFORMED AT AN UNPROFITABLE PRICE. SEE B-173487(1), DECEMBER 10, 1971. MOREOVER, WE OBSERVE THAT NO EVIDENCE HAS BEEN PRESENTED WHICH ESTABLISHES THAT PENSACOLA'S METHOD OF BIDDING WOULD NOT, IN FACT, RESULT IN THE LOWEST COST TO THE GOVERNMENT WITH REFERENCE TO THE PRICE DIFFERENTIAL BETWEEN THE FIRM'S BID AND THAT SUBMITTED BY THE CONTRACTOR. SEE B-172789, JULY 19, 1971. IN CONCLUSION ON THIS POINT, WE FIND THAT THE SUBMISSION OF THE 90-PERCENT DISCOUNT BY PENSACOLA FOR CAPTIVE PARTS FURNISHED NO BASIS FOR THE REJECTION OF THE FIRM'S BID.

WE NOTE WITH INTEREST THAT YOUR DEPARTMENT HAS TAKEN STEPS TO AVOID THE SEPARATE DISCOUNT PROBLEM BY REQUIRING, IN THE ABSENCE OF COGENT AND CONVINCING REASONS TO THE CONTRARY, A SINGLE DISCOUNT FOR CAPTIVE AND COMMON PARTS IN FUTURE COPARS CONTRACTS.

FOR ALL OF THE AFORE GOING REASONS, WE CONCLUDE THAT THE PENSACOLA BID SHOULD NOT HAVE BEEN REJECTED.