B-179876, AUG 15, 1974, 54 COMP GEN 120

B-179876: Aug 15, 1974

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DETERMINATIONS - RATES UNDER PRIOR CONTRACTS WHERE OCTOBER 1973 SERVICE CONTRACT ACT MINIMUM WAGE AND FRINGE BENEFIT DETERMINATION ISSUED FOR GENERAL SERVICES ADMINISTRATION SOLICITATION IS BASED ON MAY 1973 SURVEY DATA COVERING MANUFACTURING AND NONMANUFACTURING EMPLOYEES IN LOCALITY. CONTENTION THAT DETERMINATION SHOULD HAVE SPECIFIED CONFORMABLE RATES DEVELOPED UNDER PRIOR CONTRACTS BETWEEN BIDDER AND AIR FORCE IN SAME LOCALITY WHICH CONTAINED WAGE DETERMINATION BASED ON MAY 1972 SURVEY DATA IS WITHOUT MERIT. SINCE ACT PROVIDES THAT DETERMINATIONS ARE TO BE IN ACCORDANCE WITH PREVAILING RATES IN LOCALITY. CONTRACTS - SPECIFICATIONS - DEFINITENESS REQUIREMENT - LABOR STIPULATIONS LISTING IN INVITATION FOR BIDS OF SPECIFIC EQUIPMENT TYPES TO BE REPAIRED IS PREFERABLE.

B-179876, AUG 15, 1974, 54 COMP GEN 120

CONTRACTS - LABOR STIPULATIONS - SERVICE CONTRACT ACT OF 1965 - AMENDMENTS - MINIMUM WAGE, ETC., DETERMINATIONS - RATES UNDER PRIOR CONTRACTS WHERE OCTOBER 1973 SERVICE CONTRACT ACT MINIMUM WAGE AND FRINGE BENEFIT DETERMINATION ISSUED FOR GENERAL SERVICES ADMINISTRATION SOLICITATION IS BASED ON MAY 1973 SURVEY DATA COVERING MANUFACTURING AND NONMANUFACTURING EMPLOYEES IN LOCALITY, CONTENTION THAT DETERMINATION SHOULD HAVE SPECIFIED CONFORMABLE RATES DEVELOPED UNDER PRIOR CONTRACTS BETWEEN BIDDER AND AIR FORCE IN SAME LOCALITY WHICH CONTAINED WAGE DETERMINATION BASED ON MAY 1972 SURVEY DATA IS WITHOUT MERIT, SINCE ACT PROVIDES THAT DETERMINATIONS ARE TO BE IN ACCORDANCE WITH PREVAILING RATES IN LOCALITY. CONTRACTS - SPECIFICATIONS - DEFINITENESS REQUIREMENT - LABOR STIPULATIONS LISTING IN INVITATION FOR BIDS OF SPECIFIC EQUIPMENT TYPES TO BE REPAIRED IS PREFERABLE, SINCE BID CALCULATION IS DIFFICULT WHERE SOLICITATION LISTS ONLY GENERAL EQUIPMENT TYPES, REQUIRING BIDS ON FLAT LABOR HOUR RATE FOR EACH TYPE; ALSO, APPLICABLE REPAIR STANDARD DEPENDS ON EQUIPMENT SPECIFIED IN PURCHASE ORDERS PLACED UNDER CONTRACT. SINCE SOLICITATION PROVIDED COMMON BASIS FOR BIDDING, AND SUBMISSION OF 20 BIDS IS INDICATION TERMS WERE REASONABLE, CONCLUSION CANNOT BE DRAWN THAT DEFECTS WERE SO SERIOUS AS TO CONTRAVENE REQUIREMENT FOR FULL AND FREE COMPETITION. BIDS - COMPETITIVE SYSTEM - GOVERNMENT PROPERTY FURNISHED - NOT PREJUDICIAL TO OTHER BIDDERS NO REASONABLE BASIS IS FOUND TO SUPPORT CONCLUSION THAT ALLEGED AVAILABILITY TO SOME BIDDERS OF GOVERNMENT-FURNISHED SPECIALIZED TESTING EQUIPMENT ADVERSELY AFFECTED COMPETITION UNDER GENERAL SERVICES ADMINISTRATION SOLICITATION FOR REPAIR SERVICES, SINCE RECORD INDICATES GOVERNMENT-FURNISHED EQUIPMENT IN POSSESSION OF BIDDERS WAS RECALLED BEFORE BID OPENING AND SOLICITATION TERMS PROVIDED THAT CONTRACTOR WOULD BE RESPONSIBLE TO FURNISH ALL NECESSARY EQUIPMENT. DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN - PROCUREMENT OF SUPPLIES AND SERVICES - AIRCRAFT SERVICES NO IMPROPRIETY HAS BEEN DEMONSTRATED IN GENERAL SERVICES ADMINISTRATION'S (GSA) PROCUREMENT OF HEAVY EQUIPMENT REPAIR SERVICES FOR USE OF AIR FORCE SINCE SOLICITATION WAS ISSUED PURSUANT TO GSA-AIR FORCE AGREEMENT EXECUTED UNDER AIR FORCE AUTHORIZING REGULATIONS; MOREOVER, PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION 5-205 WHEREUNDER GSA SOURCES ARE REQUIRED TO BE USED FOR REPAIR SERVICES DOES NOT PROHIBIT GSA FROM PROCURING SUBJECT REPAIR SERVICES ON BEHALF OF AIR FORCE. BIDS - OPENING - PUBLIC - INFORMATION DISCLOSURE WHERE DIRECT LABOR HOUR CAPACITY STATED IN BIDS IS NECESSARY TO DETERMINE ENTITLEMENT TO AWARD UNDER SOLICITATION'S PROGRESSIVE AWARDS PROVISION, GENERAL ACCOUNTING OFFICE BELIEVES THIS INFORMATION SHOULD HAVE BEEN READ ALOUD AT BID OPENING ALONG WITH BIDDERS' NAMES, DISCOUNT TERMS, AND PRICES; BUT EVEN IF FAILURE TO DO SO WAS IMPROPER, PROCEDURAL DEFICIENCY DOES NOT COMPROMISE PROTESTER'S RIGHTS, AND IN ANY EVENT INFORMATION COULD HAVE BEEN OBTAINED BY TAKING ADVANTAGE OF OPPORTUNITY TO EXAMINE BIDS. BIDS - EVALUATION - OPTIONS - STATUS SOLICITATION STATING CONTRACTOR MUST ACCEPT ALL ORDERS, BUT THAT OFFEROR CAN INDICATE BY CHECKING BOX WHETHER IT WILL OR WILL NOT ACCEPT ORDERS UNDER $50, AND WHICH PROVIDES BLANK WHERE OFFEROR CAN INDICATE SPECIFIC MINIMUM AMOUNT BELOW $50, MEANS THAT BIDDERS ARE OFFERED THREE OPTIONS: TO ACCEPT ALL ORDERS LESS THAN $50; TO REFUSE ALL SUCH ORDERS; OR TO ACCEPT ORDERS UNDER $50 BUT ABOVE A SPECIFIED MINIMUM. HOWEVER, SINCE PROVISION IS SOMEWHAT CONFUSING, AGENCY SHOULD CONSIDER REVISION TO PROVIDE CLARITY. BIDS - QUALIFIED - DOLLAR MINIMUM BIDS INDICATING BIDDERS WOULD NOT ACCEPT ORDERS LESS THAN $50, AND CONTAINING INSERTIONS OF "$500.00" AND "$100.00" IN BLANK CALLING FOR SPECIFIC MINIMUM AMOUNT UNDER $50, WERE PROPERLY REJECTED BY CONTRACTING OFFICER, SINCE DEFECTS PERTAIN TO MATERIAL PROVISION AND ARE NOT WAIVABLE IRREGULARITIES UNDER FEDERAL PROCUREMENT REGULATIONS 1 2.405. CONTRACTS - REQUIREMENTS - PROGRESSIVE AWARDS - TO INSURE SUPPLY LOW BIDDER FOUND TO BE NONRESPONSIBLE TO PERFORM FULL AMOUNT OF LABOR HOURS CAPACITY SPECIFIED IN ITS BID WAS PROPERLY EXCLUDED FROM AWARD CONSIDERATION UNDER INVITATION FOR BIDS (IFB) PROVISION WHICH CALLED FOR PROGRESSIVE AWARDS TO LOW RESPONSIBLE, RESPONSIVE BIDDERS UNTIL GOVERNMENT'S ESTIMATED NEEDS WERE SATISFIED; HOWEVER, IF SOME AMOUNT OF GOVERNMENT'S REQUIREMENTS WERE NOT CONTRACTED FOR AFTER FOLLOWING AWARD PROCEDURE IN IFB, AGENCY COULD RECONSIDER RESPONSIBILITY OF LOW BIDDER FOR AWARD OF SOME QUANTITY OF HOURS LESS THAN MAXIMUM SPECIFIED IN BID, PROVIDED BID WAS NOT OTHERWISE QUALIFIED, SINCE UNDER IFB INSTRUCTIONS AND CONDITIONS, GOVERNMENT RESERVES RIGHT TO MAKE AWARD FOR QUANTITY LESS THAN QUANTITY OFFERED.

IN THE MATTER OF PAGE AIRWAYS, INC.; SPACE A.G.E. INC.; B.B. SAXON COMPANY, INC.; ALCO TOOL & MANUFACTURING COMPANY; BORDER MACHINERY COMPANY; MIDWEST MAINTENANCE & CONSTRUCTION COMPANY, INC., AUGUST 15, 1974:

INVITATION FOR BIDS (IFB) NO. GS-07-DP-(P)-45903 WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) ON SEPTEMBER 28, 1973, AND SOLICITED BIDS ON 1-YEAR REQUIREMENTS-TYPE CONTRACTS FOR SERVICES INVOLVING THE MAINTENANCE, REPAIR, AND OVERHAUL OF HEAVY CONSTRUCTION, MATERIAL HANDLING GROUND POWERED INDUSTRIAL AND VEHICULAR EQUIPMENT, INCLUDING ENGINES AND RELATED ITEMS. THE SOLICITATION CONTEMPLATED THE AWARD OF CONTRACTS IN 10 DIFFERENT SERVICE AREAS IN THE SOUTHWESTERN UNITED STATES; THE CONTRACTS WERE TO BE MANDATORY FOR USE BY GOVERNMENT AGENCIES IN THESE AREAS FOR THEIR NORMAL SERVICE REQUIREMENTS.

PRIOR TO BID OPENING ON DECEMBER 13, 1973, THREE CONCERNS IN THE SAN ANTONIO, TEXAS, SERVICE AREA - PAGE AIRWAYS, INC. (PAGE), SPACE A.G.E. INC., AND B.B. SAXON COMPANY, INC. (SAXON) - PROTESTED TO OUR OFFICE.

FIRST, PAGE OBJECTED TO THE SERVICE CONTRACT ACT MINIMUM WAGE AND FRINGE BENEFIT DETERMINATION FOR THE SAN ANTONIO AREA FURNISHED BY THE DEPARTMENT OF LABOR AND INCLUDED IN THE SOLICITATION. SECOND, PAGE, SPACE A.G.E. AND SAXON CONTENDED THAT VARIOUS TERMS OF THE SOLICITATION WERE EXCESSIVELY VAGUE, DEFICIENT, OR OTHERWISE PRECLUDED FAIR COMPETITION AMONG THE BIDDERS. THIRD, PAGE PROTESTED THAT THE CONTEMPLATED WORK IN SERVICE AREA 10, SAN ANTONIO, INCLUDED WORK ON AEROSPACE GROUND EQUIPMENT WHICH IS THE PRIMARY RESPONSIBILITY OF THE DEPARTMENT OF THE AIR FORCE'S SAN ANTONIO AIR MATERIEL AREA (SAAMA). PAGE CONTENDED IN THIS REGARD THAT AN AWARD BY GSA WOULD DUPLICATE CONTRACT COVERAGE ALREADY AVAILABLE UNDER THREE CONTRACTS BETWEEN THE AIR FORCE AND PAGE.

AFTER BID OPENING, PAGE PROTESTED AGAINST THE MANNER IN WHICH THE BID OPENING WAS CONDUCTED. ALSO, PAGE AND ALCO TOOL & MFG. COMPANY (ALCO) PROTESTED AGAINST THE REJECTION OF THEIR BIDS AS NONRESPONSIVE.

FOR THE REASONS WHICH FOLLOW, THE PROTESTS ARE DENIED.

PAGE'S OBJECTION TO THE SAN ANTONIO WAGE DETERMINATION INITIALLY ISSUED FOR THIS SOLICITATION WAS ON THE GROUND THAT IT WAS INADEQUATE AND IN VIOLATION OF THE SERVICE CONTRACT ACT BECAUSE WAGE RATES WERE PROVIDED FOR ONLY FIVE CLASSES OF SERVICE EMPLOYEES. PAGE ALSO EXPRESSED THE VIEW THAT THE WAGE RATES SPECIFIED SHOULD HAVE BEEN THOSE CONFORMABLE RATES DEVELOPED UNDER A PREVIOUS WAGE DETERMINATION APPLICABLE TO SEVERAL CONTRACTS BETWEEN THE AIR FORCE AND PAGE IN THE SAN ANTONIO AREA. CONFORMABLE RATES ARE THOSE AGREED UPON BY THE CONTRACTOR, THE CONTRACTING AGENCY AND THE EMPLOYEES FOR CLASSES OF SERVICE EMPLOYEES WHICH WERE NOT LISTED IN A DETERMINATION ISSUED BY THE DEPARTMENT OF LABOR. SEE FEDERAL PROCUREMENT REGULATIONS (FPR) 1 12.905-5.

AS FOR PAGE'S CONTENTION THAT THE DETERMINATIONS SHOULD HAVE SPECIFIED THE CONFORMABLE RATES IN EFFECT UNDER OTHER SERVICE CONTRACTS BETWEEN PAGE AND THE AIR FORCE, WE NOTE THAT THE SERVICE CONTRACT ACT PROVIDES THAT DETERMINATIONS ARE TO BE IN ACCORDANCE WITH THE PREVAILING WAGE RATES AND FRINGE BENEFITS IN THE LOCALITY. SEE 41 U.S.C. 351(A) (1), (2). THE ACTING ADMINISTRATOR, WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR, IN A LETTER TO OUR OFFICE DATED JANUARY 22, 1974, POINTED OUT THAT THE DETERMINATION ISSUED FOR THE INSTANT SOLICITATION, NO. 72-120 (REV.-3), WAS BASED ON MAY 1973 SURVEY DATA COLLECTED IN THE SAN ANTONIO AREA. THIS LETTER ALSO STATES:

*** THIS SURVEY WAS BASED UPON WAGES PAID TO A CROSS SECTION OF MANUFACTURING AND NON-MANUFACTURING INDUSTRIES IN THE SAN ANTONIO AREA, WHICH OF COURSE INCLUDES PAGE AIRWAYS EMPLOYEES BUT IS NOT LIMITED THERETO. ON THE OTHER HAND, THE WAGE RATES AGREED TO BY THE AIR FORCE AND PAGE AIRWAYS WERE CONFORMED TO THOSE CONTAINED IN WAGE DETERMINATION 72- 120 DERIVED FROM THE MAY 1972 WAGE SURVEY DATA. THUS, THE WAGE RATES CONTAINED IN WAGE DETERMINATION 72-120 (REV.-3) ARE THOSE PREVAILING IN THE LOCALITY AND NOT WAGE RATES OF A 1972 VINTAGE.

IN VIEW OF THE FOREGOING, WE SEE NO MERIT IN PAGE'S CONTENTION. ALSO, SINCE DETERMINATION NO. 72-120 (REV.-3) CONTAINED WAGE RATES FOR 43 CLASSES OF SERVICE EMPLOYEES, AND WAS NOT OBJECTED TO BY PAGE, IT APPEARS THAT ITS ADEQUACY IN THIS REGARD IS AN ACADEMIC ISSUE.

NUMEROUS OBJECTIONS HAVE BEEN RAISED BY PAGE AND SAXON AGAINST THE ALLEGED INADEQUACY OF VARIOUS TERMS OF THE SOLICITATION. ONE OF THE CENTRAL OBJECTIONS IS THAT THE EQUIPMENT TO BE SERVICED WAS DESCRIBED IN VAGUE AND GENERAL TERMS, RATHER THAN BY FEDERAL STOCK NUMBER OR BY MANUFACTURER'S NAME AND MODEL NUMBER. THE EQUIPMENT TYPES WERE CLASSIFIED IN 14 GROUPS ("A" THROUGH "N") IN THE SCHEDULE. GROUP "A" EQUIPMENT WAS DESCRIBED AS FOLLOWS:

ON AND OFF THE ROAD HEAVY CONSTRUCTION AND RELATED EQUIPMENT, SUCH AS; CRAWLERS AND WHEEL TRACTORS, LOADERS, SCRAPERS, EARTH MOVERS, ROLLERS, CRANES, SHOVELS, TRENCHES, PAVERS, ETC., AND RELATED ITEMS (GAS AND DIESEL ENGINE DRIVEN).

THE DESCRIPTIONS OF EQUIPMENT IN GROUPS "B" THROUGH "N" WERE SIMILARLY STATED IN GENERAL TERMS. FOR EXAMPLE, GROUP "B" EQUIPMENT WAS DESCRIBED AS "MATERIAL HANDLING EQUIPMENT, TOWING TUGS AND TRACTORS AND RELATED ITEMS;" GROUP "G" EQUIPMENT WAS STATED TO CONSIST OF "AIRCRAFT GROUND SERVICING EQUIPMENT AND RELATED ITEMS."

THE OBJECTION RAISED IS THAT IT WAS IMPOSSIBLE FOR BIDDERS TO BID INTELLIGENTLY SINCE THEY COULD NOT KNOW HOW TO CALCULATE THE VARIOUS COST FACTORS IN PREPARING THEIR BIDS. IN OTHER WORDS, NOT KNOWING THE EXACT TYPES OF EQUIPMENT INVOLVED, BIDDERS COULD NOT KNOW WHAT TOOLS WOULD BE NEEDED TO PERFORM THE WORK; WHAT MILITARY TECHNICAL ORDERS OR EQUIPMENT MANUFACTURER'S INSTRUCTIONS AND MANUALS WOULD HAVE TO BE FOLLOWED; WHAT TYPE AND QUANTITY OF SPARE PARTS WOULD HAVE TO BE OBTAINED; AND HOW PROJECTED LABOR COSTS SHOULD BE PRICED.

IN ADDITION, PAGE BELIEVES THE SOLICITATION SHOULD HAVE CONTAINED ESTABLISHED TIME STANDARDS DEVELOPED BY THE AIR FORCE FOR WORK ON VARIOUS EQUIPMENT TYPES SINCE HIS WOULD ENABLE GSA TO MAINTAIN MORE CONTROL OVER THE REASONABLENESS OF ESTIMATES FOR A PARTICULAR REPAIR JOB AND WOULD ELIMINATE THE NEGOTIATED OR TIME AND MATERIALS CHARACTER OF THE PROCEDURE FOR DETERMINING THE AMOUNT OF INDIVIDUAL PURCHASE ORDERS ISSUED UNDER THE CONTRACT.

ALSO, SAXON HAS RAISED SEVERAL OTHER OBJECTIONS TO THE TERMS OF THE SOLICITATION. THE PROTESTER ALLEGES THAT PARAGRAPH 21 OF THE SOLICITATION, REQUIRING A CONTRACTOR TO PROVIDE STORAGE SPACE FOR EQUIPMENT FOR A HOLDING PERIOD OF FROM 1 TO 6 MONTHS, PRECLUDES IT FROM SUBMITTING AN INTELLIGENT BID, SINCE IT COULD NOT ESTIMATE HOW MUCH STORAGE SPACE IT MIGHT NEED. SECOND, SAXON CHALLENGES THE REASONABLENESS OF PARAGRAPH 22, REQUIRING CONTRACTORS TO GUARANTEE OR WARRANT MATERIALS OBTAINED FROM SUPPLIERS.

WE BELIEVE THAT MANY OF THESE OBJECTIONS HAVE BEEN SATISFACTORILY ANSWERED BY THE REPORTS FURNISHED OUR OFFICE BY GSA. GSA'S DECEMBER 14, 1973, REPORT POINTS OUT THAT THE AIR FORCE ADVISED AGAINST THE USE OF ESTIMATED TIME STANDARDS BECAUSE THEY HAVE PROVED TO BE UNREALISTIC, AND ALSO THAT STANDARDS FOR MUCH OF THE EQUIPMENT ARE NON-EXISTENT. THUS, WHILE THE SOLICITATION DID CONTAIN ESTIMATED TOTAL DIRECT MAN HOUR REQUIREMENTS FOR THE VARIOUS EQUIPMENT GROUPS, THE ESTIMATES WERE INTENDED TO REFLECT THE GOVERNMENT'S TOTAL PROJECTED NEEDS, AGAINST WHICH INDIVIDUAL PURCHASE ORDERS WOULD BE PLACED.

THE REPORT ALSO STATES:

AS FAR AS THE USE OF FEDERAL STOCK NUMBERS IS CONCERNED, THE HEAVY EQUIPMENT TO BE REPAIRED UNDER GSA CONTRACTS WERE PURPOSELY DESCRIBED IN GENERAL TERMS BECAUSE IT IS IMPOSSIBLE FOR THE AIR FORCE TO PREDICT WHICH EQUIPMENT, IF ANY, WILL REQUIRE REPAIR. ANY LISTING BY FEDERAL STOCK NUMBER OF EQUIPMENT NEEDING SERVICE MUST NECESSARILY INCLUDE EQUIPMENT WHICH MIGHT NEVER NEED REPAIR DURING THE CONTRACT PERIOD. THIS APPROACH, IN OUR OPINION, IS TOTALLY UNREALISTIC AND BURDENSOME. OUR CONTRACTING OFFICIAL HAS ALSO NOTED THAT SEVERAL OF OUR PRESENT CONTRACTS FOR THESE TYPES OF REPAIR SERVICE WHICH LIST EQUIPMENT BY GENERAL TYPES AND GROUPS HAVE CREATED NO SIGNIFICANT PROBLEMS. IT IS ALSO TO BE NOTED THAT AS A RESULT OF PAGE AIRWAY'S INITIAL PROTEST, THE SOLICITATION WAS AMENDED TO EXCLUDE FROM THE SCOPE OF THE CONTRACT, SERVICES ALREADY UNDER CONTRACTS TO BE PERFORMED BY THE PROTESTOR ***. THUS, THERE EXISTS LITTLE POSSIBILITY FOR DUPLICATIVE SERVICES.

ALSO TO BE NOTED IS THE CONTRACTING OFFICER'S OBSERVATION THAT THE VARIOUS EQUIPMENT ITEMS WERE GROUPED ON THE SCHEDULE BY HOMOGENOUS TYPES SO THAT, IN THE CONTRACTING OFFICER'S VIEW, A BIDDER FOUND CAPABLE OF HANDLING ONE ITEM IN A GROUP WOULD BE CAPABLE OF HANDLING ALL ITEMS IN THE GROUP. IN ADDITION, THE CONTRACTING OFFICER BELIEVES THAT THE REQUIRED TESTING EQUIPMENT WOULD GENERALLY CORRESPOND TO THE HOMOGENOUS EQUIPMENT TYPE GROUPINGS.

AS FOR THE ALLEGED PROBLEM OF DETERMINING WHAT PROCEDURES ARE TO BE FOLLOWED IN PERFORMING REPAIR WORK, AND THE CONSEQUENT DIFFICULTIES IN PREPARING A BID, GSA HAS POINTED OUT THAT THE SOLICITATION DOES PROVIDE GUIDANCE FOR BIDDERS IN THIS AREA. PARAGRAPH 9A OF AMENDMENT NO. 2 PROVIDED THAT THE REQUIRED WORK WAS TO BE PERFORMED IN ACCORDANCE WITH AN ORDER OF PRECEDENCE - FIRST, APPLICABLE TECHNICAL ORDERS; SECOND, EQUIPMENT MANUFACTURER'S MANUALS, INSTRUCTIONS, ETC.; THIRD, REPAIR PROCEDURES DEVELOPED BY THE CONTRACTOR AND APPROVED BY THE CONTRACTING OFFICER; AND FORTH, STANDARD COMMERCIAL PRACTICE. MOREOVER, PARAGRAPH 9A REQUIRES THAT A TECHNICAL ORDER AND DATA LIBRARY SHALL BE ESTABLISHED BY THE CONTRACTOR WITHIN 20 DAYS AFTER AWARD, WITH RESPECT TO KNOWN ITEMS, AND THAT ADDITIONAL TECHNICAL ORDERS WILL BE REQUISITIONED AS REQUIRED. IN OTHER WORDS, THE ACCUMULATION OF NECESSARY TECHNICAL INFORMATION IS RECOGNIZED TO BE A CONTINUING PROCESS.

CONSISTENT WITH THIS PROVISION, THE PROCEDURE TO BE FOLLOWED ON A PARTICULAR REPAIR JOB WOULD BE DEPENDENT ON THE PURCHASE ORDER ISSUED FOR THAT JOB, WHICH WOULD INDICATE THE SPECIFIC EQUIPMENT TO BE SERVICED. BIDDERS WERE REQUIRED TO QUOTE A LABOR HOUR RATE FOR THE VARIOUS EQUIPMENT GROUPS; THIS RATE WOULD BE APPLICABLE GENERALLY TO THE PURCHASE ORDERS ISSUED FOR SPECIFIC ITEMS. A SPECIFIC JOB MIGHT REQUIRE THAT ANY OF THE FOUR STANDARDS DESCRIBED IN PARAGRAPH 9A BE FOLLOWED, DEPENDING ON THE TYPE OF EQUIPMENT INVOLVED. ALTHOUGH THIS MAY HAVE MADE PRICING OF BIDS DIFFICULT, IT CANNOT BE SAID THAT BIDDERS WERE WITHOUT A COMMON BASIS UPON WHICH TO CALCULATE THEIR BIDS, OR THAT BIDDERS WERE ALLOWED TO SUBMIT BIDS BASED UPON THEIR OWN INDIVIDUAL SPECIFICATIONS.

GSA RESPONDED TO SAXON'S OBJECTION TO THE STORAGE FACILITIES AND GUARANTEE CLAUSES AS FOLLOWS:

THE STORAGE FACILITIES CLAUSE AND THE GUARANTEE CLAUSE ARE BOTH STANDARD CLAUSES FOR THIS TYPE OF CONTRACT. THE AIR FORCE HAS ALWAYS USED THE STORAGE FACILITIES CLAUSE IN ITS PREVIOUS CONTRACTS, AS THE PROTESTOR SHOULD WELL KNOW. ADMITTEDLY, IN MOST INSTANCES, STORAGE CAPACITIES ARE ONLY NEEDED FOR A FEW DAYS OR WEEKS. OCCASIONALLY, HOWEVER, SOME EQUIPMENT MAY REQUIRE STORAGE FOR LONGER PERIODS DUE TO UNAVAILABILITY OF PARTS. UNDER THE CIRCUMSTANCES, WE THINK THE CLAUSE IS A PERFECTLY VALID REQUIREMENT, ESPECIALLY SINCE IT IS DIFFICULT TO PREDICT WHAT EQUIPMENT WOULD NEED REPAIR AND WHETHER PARTS WOULD BE READILY AVAILABLE. WE MIGHT NOTE THAT NINETEEN OUT OF TWENTY BIDDERS APPARENTLY HAD NO DIFFICULTY WITH THESE REQUIREMENTS.

WITH REGARD TO THE GUARANTEE CLAUSE, WE DO NOT THINK IT IS UNFAIR TO REQUIRE A CONTRACTOR TO GUARANTEE OR WARRANT HIS WORK OR HIS PARTS EVEN IF THE PARTS ARE ACQUIRED FROM HIS SUPPLIERS. A CONTRARY RULE WOULD COMPLETELY ABSOLVE A CONTRACTOR FROM RESPONSIBILITY FOR DEFECTIVE PARTS AND WOULD CERTAINLY ENCOURAGE NEGLIGENCE OR CARELESSNESS IN THE SELECTION OF EQUIPMENT PARTS. IN ANY EVENT, WE UNDERSTAND THIS REQUIREMENT IS GENERAL COMMERCIAL PRACTICE AND, AS SUCH, SHOULD NOT BE ANY BURDEN ON THE CONTRACTOR.

FROM A POLICY STANDPOINT, WE AGREE WITH PAGE AND SAXON THAT IT WOULD HAVE BEEN PREFERABLE TO IDENTIFY THE EQUIPMENT BY FEDERAL STOCK NUMBERS SO THAT BIDDERS COULD QUOTE PRICES FOR WORK ON SPECIFIC ITEMS OF EQUIPMENT, AND MORE DEFINITE WORK STANDARDS COULD BE SPECIFIED. SPECIFICATIONS SHOULD BE AS DEFINITE AS PRACTICABLE. IN THIS REGARD, WE VIEW WITH APPROVAL GSA'S INDICATION THAT WHILE TO HAVE LISTED SPECIFIC EQUIPMENT TYPES IN THE PRESENT SOLICITATION WAS UNDULY BURDENSOME UNDER THE CIRCUMSTANCES, THE PROVISIONS OF THE SOLICITATION WILL BE REVIEWED AND POSSIBLY REVISED PRIOR TO THE NEXT SOLICITATION FOR THESE SERVICES. IN THIS REGARD, WE NOTE THAT THE PRESENT SOLICITATION WAS APPARENTLY THE FIRST OF ITS TYPE ISSUED BY GSA FOR THESE SERVICES IN THE AREAS IN QUESTION.

IN ADDITION, WE HAVE CONSIDERED THE PROTESTERS' CONTENTIONS THAT ALLEGED SOLICITATION DEFECTS WILL LEAD TO PERFORMANCE DIFFICULTIES AND DISPUTES AFTER CONTRACT AWARD. IN THIS REGARD, SAXON CONTENDS THAT THE IFB'S ESTIMATED QUANTITIES ARE NOT BEST ESTIMATES, WITH THE RESULTING POSSIBILITY OF CLAIMS BY CONTRACTORS DISSATISFIED WITH THE QUANTITIES ORDERED; SAXON EXPECTS POSSIBLE DISPUTES WHERE THE CONTRACTING OFFICER DETERMINES THAT A CONTRACTOR HAS NOT OBTAINED PARTS AND MATERIALS AT THE MOST ECONOMICAL PRICE REASONABLY AVAILABLE, AS REQUIRED BY SPECIAL PROVISION 7 OF THE IFB; PAGE BELIEVES THAT THE INSTANT PROCUREMENTS MIGHT DUPLICATE EXISTING CONTRACT COVERAGE TO THE END THAT CONTRACT ADMINISTRATION COSTS WILL INCREASE AND GENERATE CLAIMS; AND PAGE AND SAXON BELIEVE THAT PURCHASE ORDERS PLACED UNDER THE PRESENT CONTRACTS ARE IN THE NATURE OF TIME AND MATERIALS CONTRACTS, REQUIRING CONSTANT GOVERNMENT SURVEILLANCE IF EXCESSIVE COSTS ARE TO BE AVOIDED. IT MAY WELL BE, AS PAGE AND SAXON HAVE OBSERVED, THAT SOME OF THE SUCCESSFUL BIDDERS WILL FIND THEIR BIDS TO HAVE BEEN "IMPROVIDENT," AND THAT CONTRACT ADMINISTRATION MIGHT INVOLVE SUBSTANTIAL DIFFICULTIES. IN THIS CONNECTION, WE NOTE THAT TWO OF THE BIDDERS (MIDWEST MAINTENANCE & CONSTRUCTION CO., INC., AND BORDER MACHINERY COMPANY) AND ONE OF THE PROTESTERS (SPACE A.G.E.) IN WRITTEN COMMENTS TO OUR OFFICE HAVE TAKEN ISSUE WITH PAGE'S AND SAXONS' ALLEGATIONS REGARDING THE INADEQUACY OF THE SPECIFICATIONS AND THE METHOD OF CONTRACTING EMPLOYED. AFTER CAREFUL CONSIDERATION, WE DO NOT BELIEVE A REASONABLE BASIS EXISTS ON THE RECORD TO CONCLUDE THAT THE ALLEGED DEFECTS IN THE SPECIFICATIONS WERE SO SERIOUS AS TO CONTRAVENE THE STATUTORY REQUIREMENT FOR FULL AND FREE COMPETITION.

SPACE A.G.E.'S PROTEST BEFORE BID OPENING RAISED AN ADDITIONAL OBJECTION - THAT OTHER BIDDERS POSSESSED CERTAIN ITEMS OF GOVERNMENT FURNISHED EQUIPMENT, I.E., SPECIALIZED TESTING EQUIPMENT - WHILE SPACE A.G.E. DID NOT. IT WAS CONTENDED THAT COMPETITION ON THIS BASIS WAS UNFAIR.

GSA'S DECEMBER 14, 1973, REPORT POINTS OUT, HOWEVER, THAT IN NOVEMBER 1973 CONTRACTORS WHICH PLANNED TO BID ON THIS SOLICITATION WERE NOTIFIED THAT GOVERNMENT-FURNISHED EQUIPMENT IN THEIR POSSESSION WOULD BE RECALLED; THAT GSA DID NOT BELIEVE THAT THE AIR FORCE WOULD MAKE AVAILABLE ANY SPECIAL TEST EQUIPMENT; AND THAT ALL BIDDERS WERE INFORMED THAT THEY SHOULD SUBMIT BIDS WITHOUT TAKING INTO ACCOUNT THE AVAILABILITY OF SPECIALIZED TESTING EQUIPMENT. UNDER THESE CIRCUMSTANCES, WE SEE NO BASIS IN THE RECORD TO CONCLUDE THAT COMPETITION AMONG THE BIDDERS WAS ADVERSELY AFFECTED. WE NOTE THAT PAGE HAS TAKEN ISSUE WITH GSA'S STATEMENT THAT BIDDERS WERE INFORMED THAT THEY SHOULD SUBMIT BIDS WITHOUT TAKING INTO ACCOUNT THE AVAILABILITY OF SPECIAL TEST EQUIPMENT. HOWEVER, AMENDMENT NO. 2, PARAGRAPH 9A, STATES THAT THE CONTRACTOR SHALL FURNISH ALL EQUIPMENT TO PERFORM THE REQUIRED WORK, INCLUDING TESTING; MOREOVER, STANDARD FORM 33A, PARAGRAPH 11, STATES THAT NO MATERIAL, LABOR OR FACILITIES WILL BE FURNISHED BY THE GOVERNMENT UNLESS OTHERWISE PROVIDED FOR IN THE SOLICITATION.

PAGE'S OBJECTION TO THE PROPRIETY OF GSA'S PROCUREMENT OF SERVICES UNDER THE PRESENT SOLICITATION FOR THE USE OF THE AIR FORCE WAS FIRST RAISED IN ITS INITIAL PROTEST, AND FURTHER SUPPLEMENTED IN A LETTER TO OUR OFFICE DATED JANUARY 2, 1974, COMMENTING UPON GSA'S REPORT OF DECEMBER 14, 1973. THIS REPORT STATED THAT GSA HAD ENTERED INTO AN AGREEMENT WITH THE AIR FORCE IN SEPTEMBER 1972, WHEREBY GSA WOULD UNDERTAKE TO SOLICIT AND ADMINISTER, ON BEHALF OF THE AIR FORCE, A REPAIR SERVICE CONTRACT FOR VARIOUS TYPES OF HEAVY EQUIPMENT IN SAAMA, AND THAT THE INSTANT SOLICITATION WAS ISSUED IN FURTHERANCE OF THAT AGREEMENT.

PAGE CONTENDS, FIRST, THAT GSA HAS NO JURISDICTION IN THE FIELD OF LETTING CONTRACTS FOR REPAIR OF THE TYPES OF AEROSPACE GROUND EQUIPMENT USED BY SAAMA, SINCE WORK ON SUCH SPECIALIZED MILITARY SUPPORT EQUIPMENT IS RESERVED TO THE DEPARTMENT OF DEFENSE BY VIRTUE OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 5-205. ASPR 5-205 PROVIDED IN PERTINENT PART:

*** GENERAL SERVICES ADMINISTRATION REGIONAL OFFICES PROVIDE FACILITIES FOR MAINTENANCE, REPAIR, REHABILITATION AND RECLAMATION OF GOVERNMENT- OWNED PERSONAL PROPERTY AND, IN ADDITION, HAVE TERM CONTRACTS WITH COMMERCIAL CONCERNS FOR SIMILAR SERVICES. THESE CONTRACTS ARE PUBLISHED AS GENERAL SERVICES TERM CONTRACTS. WHEN REQUIREMENTS EXCEED THE IN-HOUSE CAPABILITIES OF A DEPARTMENTAL ACTIVITY OR INSTALLATION, OR IT IS OTHERWISE REQUIRED THAT OUTSIDE SOURCES BE USED, IT IS MANDATORY THAT GENERAL SERVICES ADMINISTRATION SOURCES FOR SUCH SERVICES BE USED EXCEPT WHEN:

(I) THE ITEMS INVOLVED ARE MILITARY WEAPONS SYSTEMS, SPECIALIZED MILITARY SUPPORT EQUIPMENT, OR SPECIALIZED TECHNICAL OR SCIENTIFIC EQUIPMENT;

(V) THE REQUIRED SERVICES ARE NOT WITHIN THE SCOPE OF THE EXISTING GSA TERM CONTRACT ***.

NEXT, PAGE CHALLENGES THE PROPRIETY OF THE AGREEMENT BETWEEN GSA AND SAAMA ON THE BASIS THAT A QUESTION OF THIS TYPE SHOULD HAVE BEEN RESOLVED BY HEADQUARTERS, DEPARTMENT OF THE AIR FORCE. PAGE VIEWS GSA'S ACTION IN ISSUING THE SOLICITATION AS AN UNDESIRABLE USURPATION OF SAAMA'S FUNCTIONS, RESULTING IN THE AWARD OF A "MOTHER HUBBARD" CONTRACT WHICH PURPORTS TO, BUT WILL NOT IN FACT, COVER SPECIALIZED MILITARY EQUIPMENT, SUCH AS MJ-1 BOMB LIFTS, SINCE SUCH EQUIPMENT IS NOT INCLUDED IN INDUSTRIAL GROUP 769, INDUSTRIAL CLASS 7699, SPECIFIED ON PAGE 1 OF THE IFB. ALSO, PAGE CONTENDS THAT COMPLETE COVERAGE IS AVAILABLE UNDER ITS EXISTING CONTRACTS WITH THE AIR FORCE AT LOWER PRICES.

THE CONTRACTING OFFICER HAS REPLIED TO THESE CONTENTIONS AS FOLLOWS: A DEPOT MAINTENANCE INTERSERVICE SUPPORT AGREEMENT (DMISA) WAS ENTERED INTO UNDER AUTHORITY OF AIR FORCE REGULATION 400-27 AND AFLCR 65-14. IT WAS SIGNED BY REPRESENTATIVES OF SAN ANTONIO AIR MATERIEL AREA (SAAMA), AIR FORCE LOGISTICS COMMAND, AND GENERAL SERVICES ADMINISTRATION. A SIMILAR DMISA WAS ENTERED INTO WITH WARNER ROBINS AIR MATERIEL AREA (WRAMA).

ARMED SERVICES PROCUREMENT REGULATION 5-205 PROVIDES THAT GSA SOURCES ARE MANDATORY FOR SPECIFIED SERVICES. THE EXCEPTIONS LISTED DO NOT PROHIBIT GSA FROM PROVIDING THOSE SERVICES. IT ONLY POINTS OUT THAT THEY ARE NOT MANDATORY. ASPR 5-206 REFERS TO FEDERAL SUPPLY CATALOG ENTITLED "GUIDE TO SOURCES OF SUPPLY AND SERVICES." SECTION 5 OF THAT GUIDE LISTS NUMEROUS CATEGORIES OF EQUIPMENT UNDER INDUSTRIAL CLASS 7699. AMONG THESE IS "AIR GROUND SUPPORT EQUIPMENT SERVICE." IF AN MJ 1 BOMB LIFT IS AIR GROUND SUPPORT EQUIPMENT, THEN IT WILL BE COVERED.

MR. GARDNER'S ALLEGATION THAT PAGE'S CONTRACTS PROVIDE COMPLETE COVERAGE CONFLICTS WITH HIS CONTENTION THAT ITEMS MUST BE LISTED BY SPECIFIC STOCK NUMBER. FURTHER, IT HAS BEEN OUR EXPERIENCE THAT NO ONE FIRM CAN HANDLE THE VOLUME OF MAINTENANCE ANTICIPATED. THIS WAS CONFIRMED BY THE CAPACITIES STATED ON BIDS RECEIVED. WHILE PAGE'S CURRENT RATES ARE LOWER THERE IS NO WAY TO ASSURE THAT THE COST OF A SPECIFIC JOB WOULD BE LOWER. ALSO, PRESENT RATES MUST BE RENEGOTIATED IF PAGE'S CONTRACTS ARE TO BE EXTENDED PAST FEBRUARY 26, 1974.

PAGE WAS PROVIDED WITH THE OPPORTUNITY TO COMMENT ON THE CONTRACTING OFFICER'S STATEMENT BUT DID NOT DO SO. WE BELIEVE THE STATEMENT ADEQUATELY RESPONDS TO PAGE'S ALLEGATIONS.

PAGE'S LETTER OF DECEMBER 18, 1973, TO OUR OFFICE, OBJECTED TO THE PROCEDURES AT THE BID OPENING BECAUSE NONE OF THE BIDDERS WERE ADVISED OF THE TOTAL MONTHLY DIRECT LABOR CAPACITY AND THE CAPACITY PER EQUIPMENT GROUP SPECIFIED IN THE BIDS. BIDDERS WERE REQUIRED TO PROVIDE THIS INFORMATION BY VIRTUE OF AMENDMENT NO. 2 TO THE IFB, WHICH ALSO PROVIDED THAT PROGRESSIVE AWARDS COULD BE MADE IN SERVICE AREA 10:

PROGRESSIVE AWARDS MAY BE MADE FOR GROUPS G THRU N FOR SERVICE AREA 10. IF THE LOW RESPONSIVE, RESPONSIBLE BIDDER OFFERS A MONTHLY DIRECT LABOR CAPACITY LESS THAN THE GOVERNMENT'S ESTIMATED REQUIREMENTS, PROGRESSIVE AWARDS MAY BE MADE TO THE EXTENT NECESSARY TO MEET THE ESTIMATED REQUIREMENTS. IN SUCH CASES, AWARDS WILL BE MADE TO THE LOW BIDDER UP TO HIS STATED DIRECT LABOR HOUR CAPACITY, AND THEN, PROGRESSIVELY TO OTHER BIDDERS TO THE EXTENT NECESSARY TO MEET THE GOVERNMENT'S ESTIMATED REQUIREMENTS.

WHERE A BIDDER IS LOW ON MORE THAN ONE GROUP, AWARDS WILL BE MADE FIRST TO THE GROUP WITH THE LARGEST LABOR HOUR REQUIREMENT, THEN IN DESCENDING ORDER TO THE GROUP WITH THE LOWEST LABOR HOUR REQUIREMENT.

IN THESE CIRCUMSTANCES, PROSPECTIVE AWARDEES IN SERVICE AREA 10 COULD NOT BE DETERMINED WITHOUT FIRST EVALUATING THE BID PRICES ACCORDING TO THE FORMULA IN THE INVITATION, THEN CONSIDERING THE BIDDERS' DIRECT LABOR CAPACITY, AND FINALLY APPLYING THE PROGRESSIVE AWARDS PROCEDURE DESCRIBED ABOVE. PAGE'S CONTENTION APPARENTLY IS THAT WITHOUT KNOWLEDGE OF THE DIRECT LABOR CAPACITY, IT WAS IMPOSSIBLE FOR BIDDERS TO KNOW EITHER THEIR ENTITLEMENT TO AN AWARD OR THE SIZE OF THE AWARD AND, THEREFORE, THE BIDDERS COULD NOT ACTIVELY PURSUE THEIR LEGAL RIGHTS IN THIS REGARD.

THE CONTRACTING OFFICER HAS RESPONDED TO THIS CONTENTION AS FOLLOWS:

IN ORDER TO MINIMIZE THE TIME REQUIRED TO CONDUCT THE FORMAL BID OPENING ONLY THE NAME OF THE BIDDER, HIS DISCOUNT TERMS, AND HIS BID PRICES WERE READ AT THE BID OPENING. EVERYONE ATTENDING THE OPENING HAD THE OPPORTUNITY TO ASK FOR ANY OTHER INFORMATION THEY DESIRED AND THE BIDS WERE AVAILABLE FOR EXAMINATION.

FPR 1-2.402 PROVIDES THAT BIDS SHALL BE PUBLICLY OPENED AND, "WHEN PRACTICABLE," READ ALOUD. WHILE THIS REGULATION CONTEMPLATES THE EXERCISE OF SOME DISCRETION BY AGENCY OFFICIALS IN CONDUCTING BID OPENINGS, OUR OFFICE HAS ALSO STATED, AS A GENERAL STANDARD, THAT "THE PURPOSE OF PUBLIC OPENING OF BIDS FOR PUBLIC CONTRACTS IS TO PROTECT BOTH THE PUBLIC INTEREST AND THE BIDDERS AGAINST ANY FORM OF FRAUD OR FAVORITISM OR PARTIALITY OR COMPLICITY, AND SUCH OPENINGS SHOULD AS FAR AS POSSIBLE BE CONDUCTED SO AS TO LEAVE NO GROUND EVEN FOR SUSPICION OF ANY IRREGULARITY." 48 COMP. GEN. 413, 414-415 (1968).

SINCE THE DIRECT LABOR CAPACITY TO THE SERVICE AREA 10 BIDS WAS CRUCIAL FOR DETERMINING THE IDENTITY OF SUCCESSFUL CONTRACTORS FOR THAT AREA, WE BELIEVE IT WOULD HAVE BEEN PREFERABLE TO READ ALOUD THIS PORTION OF THE BIDS. HOWEVER, EVEN IF THE FAILURE TO DO SO IS REGARDED AS IMPROPER, WE CANNOT SEE HOW THIS PROCEDURAL DEFICIENCY COMPROMISED PAGE'S RIGHTS. CF. B-178888, OCTOBER 26, 1973. MOREOVER, PAGE'S REPRESENTATIVES COULD HAVE OBTAINED THIS INFORMATION SIMPLY BY EXAMINING THE BIDS.

BY LETTER DATED JANUARY 8, 1974, THE CONTRACTING OFFICER ADVISED PAGE THAT ITS BID WAS DECLARED NONRESPONSIBE "*** DUE TO YOUR MINIMUM ORDER OF $100.00. THE SOLICITATION PROVIDES THAT YOU ACCEPT ANY ORDERS IN EXCESS OF $50.00." ALCO WAS SIMILARLY ADVISED THAT ITS BID WAS NONRESPONSIVE DUE TO ITS MINIMUM ORDER OF $500.

PARAGRAPH 1 OF THE IFB'S "SPECIAL PROVISIONS," ENTITLED "SCOPE OF CONTRACT," CONTAINED THE FOLLOWING PROVISIONS DEALING WITH THE RESPECTIVE OBLIGATIONS OF ORDERING AGENCIES AND BIDDERS TO PLACE AND ACCEPT ORDERS IN CERTAIN MINIMUM AMOUNTS:

1. SCOPE OF CONTRACT:

*** EACH CONTRACTOR WHOSE OFFER IS ACCEPTED WILL BE OBLIGATED TO FURNISH ALL SERVICES OF THE KIND CONTRACTED FOR THAT MAY BE ORDERED DURING THE CONTRACT TERM, EXCEPT:

(2) SMALL REQUIREMENTS. NO ORDERING OFFICE WILL BE OBLIGATED TO PLACE ANY ORDER REQUIRING DELIVERY TO ANY ONE DESTINATION AMOUNTING TO $50.00 OR LESS. THIS PROVISION ALSO APPLIES TO THE CONTRACTOR UNLESS OTHERWISE INDICATED BELOW.

OFFEROR IS ASKED TO INDICATE (BY CHECKING THE APPLICABLE BOX) WHETHER HE WILL (), OR WILL NOT () ACCEPT ORDERS REQUIRING DELIVERY TO ANY ONE DESTINATION AMOUNTING TO $50.00 OR LESS; OR WHETHER HE WILL ACCEPT SMALL ORDERS OF A SPECIFIC MINIMUM TO $50.00 OR LESS; OR WHETHER HE WILL ACCEPT SMALL ORDERS OF A SPECIFIC MINIMUM BELOW $50.00. SPECIFIC MINIMUM $ . IF "WILL" IS CHECKED OR A SPECIFIC MINIMUM BELOW $50.00 IS ENTERED, IT IS MUTUALLY AGREED THAT THE CONTRACTOR WILL ACCEPT SMALL ORDERS AS INDICATED AND THIS INFORMATION WILL BE SHOWN IN THE RESULTANT SCHEDULE AND APPLICABLE CONTRACTOR CATALOG/PRICE LIST.

IF THE OFFEROR FAILS TO FURNISH THE INFORMATION ASKED FOR ABOVE, THE GOVERNMENT MAY PLACE ORDERS FOR DELIVERIES TO ANY ONE DESTINATION AMOUNTING TO $50.00 OR LESS. FAILURE ON THE PART OF THE CONTRACTOR TO RETURN SUCH ORDERS BY MAILING OR OTHERWISE FURNISHING THEM TO THE ORDERING OFFICE WITHIN 3 DAYS AFTER RECEIPT SHALL CONSTITUTE ACCEPTANCE, WHEREUPON ALL OTHER PROVISIONS OF THE CONTRACT SHALL APPLY TO SUCH ORDER.

BOTH ALCO AND PAGE CHECKED THE "WILL NOT" BOX. ALCO INSERTED "$500.00' IN THE SPECIFIC MINIMUM BLANK AND PAGE INSERTED "$100.00.'

ALCO'S PROTEST IS ON A NUMBER OF ALTERNATIVE GROUNDS. FIRST, THAT THE ABOVE-QUOTED MINIMUM ORDER CLAUSE WAS INADEQUATE, AMBIGUOUS, AND DID NOT EXPRESSLY STATE THAT BIDDERS WOULD BE REQUIRED TO ACCEPT ALL ORDERS IN EXCESS OF $50. ALCO STATES IT CONSTRUED THE CLAUSE TO MEAN THAT IF A BIDDER DID NOT WISH TO ACCEPT ORDERS LESS THAN $50, IT COULD SO INDICATE, AND, FURTHER, THAT BIDDERS WERE PROVIDED WITH THE OPTION TO INDICATE WHAT SPECIFIC MINIMUM AMOUNT THEY WOULD ACCEPT.

ALCO ALSO CONTENDS THAT IF GSA'S INTERPRETATION OF THE CLAUSE IS CORRECT, AND THE "SPECIFIC MINIMUM" AMOUNT REFERS TO AN AMOUNT OF $50 OR LESS, THEN THE MISTAKEN INSERTION OF THE FIGURE $500 IS OBVIOUSLY MEANINGLESS AND SHOULD HAVE BEEN DISREGARDED BY THE CONTRACTING OFFICER.

ALTERNATIVELY, ALCO ARGUES THE SOLICITATION WAS SO DEFECTIVE THAT NO AWARDS SHOULD HAVE BEEN MADE UNDER IT.

PAGE SIMILARLY CONTENDS THAT THE MINIMUM ORDER PROVISION IS OBSCURE AND DOES NOT CLEARLY STATE THAT ALL ORDERS IN EXCESS OF $50 MUST BE ACCEPTED. IN ANY EVENT, PAGE BELIEVES THAT THE DEFECT IN ITS BID SHOULD HAVE BEEN WAIVED AS A MINOR INFORMALITY PURSUANT TO FPR 1 2.405.

GSA'S FEBRUARY 15, 1974, REPORT CONTAINS THE FOLLOWING PERTINENT REPLY:

IT IS CLEAR THAT THIS CLAUSE, AS WRITTEN, COULD ONLY HAVE ONE REASONABLE, LOGICAL INTERPRETATION. WHAT THE CLAUSE SAYS, ESSENTIALLY, IS THIS: CONTRACTORS ARE OBLIGATED TO ACCEPT ALL ORDERS, EXCEPT AS SPECIFICALLY PROVIDED BY THE CLAUSE. ONE OF THE EXPRESSED EXCEPTIONS IS THAT HE IS NOT OBLIGATED TO ACCEPT ORDERS FOR LESS THAN $50.00. HOWEVER, SHOULD HE WISH TO ACCEPT ANY ORDERS BETWEEN $0 AND $50.00, HE IS GIVEN AN OPPORTUNITY TO ACCEPT SUCH LESSER ORDERS BY INDICATION. IT IS UNEQUIVOCAL THAT THE PURPOSE OF THE CLAUSE IS TO ALLOW A CONTRACTOR TO ACCEPT ORDERS LESS THAN THE MINIMUM ORDER LIMITATION AND NOT TO ALLOW A BIDDER TO QUALIFY HIS BID SO THAT HE COULD CHOOSE, TO HIS OWN ADVANTAGE, WHATEVER AMOUNT OF ORDER HE WISHES TO ACCEPT. NOWHERE DOES THE CLAUSE STATE "$50 OR MORE." IF THE PROTESTOR'S THEORY IS CORRECT, THEN THE GOVERNMENT COULD NOT REJECT A BID OF AN OFFEROR WHO WOULD NOT ACCEPT AN ORDER LESS THAN $10,000 - A TOTALLY UNREASONABLE AND ILLOGICAL INTERPRETATION.

WE BELIEVE THAT GSA'S INTERPRETATION OF THE CLAUSE IS LEGALLY CORRECT. AT THE SAME TIME, WE CAN APPRECIATE THE PROTESTERS' CONTENTIONS THAT THE PROVISION IS SOMEWHAT UNCLEAR AND COULD BE CONFUSING TO BIDDERS. ACCORDINGLY, WE ARE RECOMMENDING THAT GSA REVISE SUBPARAGRAPH (2) OF THE SCOPE OF CONTRACT CLAUSE TO ACHIEVE GREATER CLARITY. AT A MINIMUM, WE THINK IT WOULD BE APPROPRIATE TO INCLUDE IN THE CLAUSE A CAUTIONARY NOTE WARNING BIDDERS THAT THE INSERTION OF AN AMOUNT GREATER THAN $50 IN THE "SPECIFIC MINIMUM" BLANK MAY RESULT IN REJECTION OF THE BID AS NONRESPONSIVE. HOWEVER, WE DO NOT BELIEVE THE SOLICITATION CAN BE REGARDED AS FUNDAMENTALLY DEFECTIVE. WE NOTE THAT IN THE PRESENT CASE ONLY THREE OF 20 BIDS WERE FOUND NONRESPONSIVE FOR THIS REASON. CF. 52 COMP. GEN. 842 (1973).

GSA ALSO BELIEVES THAT, FOR THE FOLLOWING REASONS, THE CONTRACTING OFFICER ACTED PROPERLY IN REJECTING THE PAGE AND ALCO BIDS AND IN DECLINING TO WAIVE THE INSERTIONS OF $100 AND $500 AS MINOR INFORMALITIES OR TO ALLOW THE BIDDERS TO CORRECT THEIR BIDS:

*** THE GOVERNMENT CLEARLY HAS REQUIREMENTS WITHIN THE $50.00 TO $100.00 RANGE. THE $50.00 MINIMUM ORDER LIMITATION IS INCLUDED IN THE SPECIFICATION FOR THE PURPOSE OF COVERING A SPECIFIC NEED, AND, AS SUCH, IS A MATERIAL AND ESSENTIAL REQUIREMENT OF THE SOLICITATION. IN THIS REGARD, YOUR OFFICE HAS CLEARLY STATED THAT THE ACCEPTANCE OF A BID IN WHICH CONDITIONS ARE INCORPORATED IS MANIFESTLY UNFAIR TO THOSE BIDDERS WHO HAVE NOT SIMILARLY QUALIFIED THEIR BIDS. 40 COMP. GEN. 668 (1961).

OUR REGIONAL CONTRACTING OFFICER HAS ADVISED THAT WITHIN THE PAST YEAR, NINE AIR FORCE ORDERS WERE PLACED FOR LESS THAN $100.00 ***. IT MUST BE NOTED THAT THESE FIGURES DO NOT INCLUDE ORDERS FROM OTHER FEDERAL AGENCIES WHICH ARE THE MAIN USERS OF LOW VALUE REPAIR SERVICE. HAD THE CONTRACTING OFFICER WAIVED THE MINIMUM ORDER LIMITATION QUALIFICATION, HE WOULD NOT ONLY HAVE LEFT A NUMBER OF POTENTIAL ORDERS (UNDER $500.00) WITHOUT COVERAGE, BUT HE WOULD ALSO HAVE PREJUDICED OTHER BIDDERS WHO HAD SUBMITTED OFFERS BASED ON THE CONTINGENCY THAT THEY MIGHT HAVE TO UNDERTAKE LESS PROFITABLE JOB ASSIGNMENTS. ***

THE RESPONSIVENESS OF A BID MUST BE JUDGED FROM THE BID ITSELF AND WITHOUT THE BENEFIT OF SUBSEQUENT EXPLANATIONS BY THE BIDDER AS TO WHAT IT INTENDED. 51 COMP. GEN. 352, 355 (1971); 50 ID. 302 (1970). FROM EXAMINATION OF THE ALCO AND PAGE BIDS, IT CANNOT BE SAID THAT THE INSERTIONS OF $500 AND $100 WERE MEANINGLESS DEFECTS. IN OUR VIEW IT IS REASONABLE TO CONCLUDE THAT A BIDDER WHICH INSERTED $500 OR $100 WOULD NOT BE BOUND TO ACCEPT ORDERS IN LESSER AMOUNTS.

AS GSA STATES, THE DEFECTS CLEARLY PERTAIN TO A MATERIAL PROVISION OF THE INVITATION. MOREOVER, WE DO NOT BELIEVE THEIR SIGNIFICANCE AS TO PRICE, QUANTITY, QUALITY, OR DELIVERY CAN BE DETERMINED WITH CERTAINTY TO BE TRIVIAL OR NEGLIGIBLE. THEREFORE, THE CONTRACTING OFFICER ACTED PROPERLY IN REFUSING TO TREAT THE DEFECTS AS IMMATERIAL OR INCONSEQUENTIAL AND IN DECLINING TO ALLOW CORRECTION OR WAIVER UNDER FPR 1-2.405.

IN ITS LETTER DATED MARCH 27, 1974, SPACE A.G.E. RAISES A FINAL POINT FOR OUR CONSIDERATION. THE PROTESTER STATES IT WAS FOUND TO BE NONRESPONSIBLE BY THE CONTRACTING OFFICER DUE TO INADEQUATE FINANCIAL CAPABILITY AND LACK OF SPECIALIZED TEST EQUIPMENT. THE MATTER WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA), WHICH DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY. ESSENTIALLY, SPACE A.G.E. DOES NOT OBJECT TO THESE DETERMINATIONS. HOWEVER, IT POINTS OUT THAT IT MIGHT HAVE BEEN CONSIDERED RESPONSIBLE TO PERFORM SOME AMOUNT OF WORK LESS THAN THE TOTAL OF 6,920 HOURS DIRECT LABOR CAPACITY STATED IN ITS BID. IN VIEW OF THE PROGRESSIVE AWARDS MADE IN SERVICE AREA 10, SPACE A.G.E. QUESTIONS WHY IT CANNOT BE DETERMINED RESPONSIBLE FOR SOMETHING LESS THAN THE FULL CAPACITY STATED IN ITS BID, AND WHY THE CONTRACTING OFFICER COULD NOT RECONSIDER ITS RESPONSIBILITY ON THIS BASIS OR REFER ITS CASE BACK TO SBA. IN THIS REGARD, SPACE A.G.E. STATES THAT ACCORDING TO ITS INFORMATION, GSA HAS NOT AWARDED CONTRACTS TO FULLY COVER THE ESTIMATED REQUIREMENTS IN THE SAN ANTONIO AREA. GSA HAS INDICATED TO OUR OFFICE THAT PROGRESSIVE AWARDS WERE MADE IN SERVICE AREA 10 FOR EQUIPMENT GROUPS "H" THROUGH "N;" THE PRESENT RECORD DOES NOT INDICATE THE EXTENT, IF ANY, TO WHICH THE GOVERNMENT'S ESTIMATED REQUIREMENTS WERE NOT FULLY CONTRACTED FOR.

IT IS APPARENT THAT THE PROGRESSIVE AWARDS PROCEDURE SET FORTH IN AMENDMENT NO. 2, DISCUSSED SUPRA, CONTEMPLATED THAT THE LOW RESPONSIVE, RESPONSIBLE BIDDER WOULD BE DETERMINED FOR EACH EQUIPMENT GROUP, AND THAT IF ITS DIRECT LABOR CAPACITY WAS INSUFFICIENT TO EXHAUST THE GOVERNMENT'S REQUIREMENTS, RECOURSE WOULD BE HAD TO THE SUBSEQUENT RESPONSIVE, RESPONSIBLE BIDDERS, IN ORDER OF ASCENDING PRICE, TO THE EXTENT NECESSARY. SPACE A.G.E., AS A NONRESPONSIBLE PROSPECTIVE CONTRACTOR, WAS PROPERLY EXCLUDED FROM CONSIDERATION FOR AN AWARD UNDER THIS PROCEDURE. IN ADDITION, IT APPEARS THAT THE PROGRESSIVE AWARDS PROCEDURE MIGHT NOT BE SUFFICIENT TO SATISFY THE GOVERNMENT'S ESTIMATED REQUIREMENTS IN ALL INSTANCES, BECAUSE THE RESPONSIVE, RESPONSIBLE BIDDERS MAY NOT HAVE OFFERED ENOUGH LABOR CAPACITY TO MEET THE GOVERNMENT'S NEEDS. THE QUESTION, THEN, IS WHETHER THE SOLICITATION WOULD PERMIT THE AGENCY, AFTER MAKING AWARDS IN ACCORDANCE WITH THE PROGRESSIVE PROCEDURE, TO RECONSIDER THE RESPONSIBILITY OF A BIDDER FOR THE AWARD OF A CONTRACT INVOLVING A LESSER AMOUNT OF LABOR HOURS THAN SPECIFIED IN ITS BID AND, IF SUCH BIDDER IS FOUND TO BE RESPONSIBLE ON THAT BASIS, MAKE AN AWARD FOR THE LESSER AMOUNT.

IN THIS REGARD, STANDARD FORM 33A, MARCH 1969 EDITION, WHICH WAS INCORPORATED BY REFERENCE IN THE IFB, PROVIDES IN PARAGRAPH 10(C):

THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER.

IN VIEW OF THE FOREGOING, WE BELIEVE THAT, AFTER COMPLYING WITH THE PROGRESSIVE AWARDS PROCEDURE SET FORTH IN AMENDMENT NO. 2, GSA COULD, AT ITS OPTION, HAVE RECONSIDERED SPACE A.G.E.'S RESPONSIBILITY FOR THE AWARD OF A CONTRACT IN A LESSER AMOUNT OF HOURS THAN WAS SPECIFIED IN THE BID, PROVIDED THAT SPACE A.G.E.'S BID WAS NOT OTHERWISE QUALIFIED. CF. 49 COMP. GEN. 499 (1970).