B-180195, APR 25, 1974, 53 COMP GEN 797

B-180195: Apr 25, 1974

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BIDS - EVALUATION - ON BASIS OTHER THAN ON INVITATION - INFORMATION DEVIATING FROM SPECIFICATIONS AWARD FOR TRANSPORTATION SERVICES EVALUATED ON BASIS OF ORAL ANNOUNCEMENT AT BID OPENING INSTEAD OF EVALUATION METHOD PROVIDED IN IFB WHICH WOULD HAVE RESULTED IN DIFFERENT BIDDER BEING SUCCESSFUL SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND REQUIREMENT RESOLICITED. SINCE ORAL STATEMENT WAS NOT BINDING ON BIDDERS. BIDDERS WERE EFFECTIVELY DENIED OPPORTUNITY TO CONSIDER WHETHER BIDS SHOULD BE MODIFIED AND FPR 1- 2.207(D) PRECLUDES AWARD IN SUCH CIRCUMSTANCE. BIDS - EVALUATION - ESTIMATES - REQUIREMENTS CONTRACT INVITATION FOR BIDS IS DEFECTIVE WHERE NO ESTIMATED QUANTITIES OF SERVICES ADVERTISED ARE STATED AS REQUIRED BY FPR 1-3.409(B)(1) AND PRIOR GAO DECISIONS.

B-180195, APR 25, 1974, 53 COMP GEN 797

BIDS - EVALUATION - ON BASIS OTHER THAN ON INVITATION - INFORMATION DEVIATING FROM SPECIFICATIONS AWARD FOR TRANSPORTATION SERVICES EVALUATED ON BASIS OF ORAL ANNOUNCEMENT AT BID OPENING INSTEAD OF EVALUATION METHOD PROVIDED IN IFB WHICH WOULD HAVE RESULTED IN DIFFERENT BIDDER BEING SUCCESSFUL SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND REQUIREMENT RESOLICITED, SINCE ORAL STATEMENT WAS NOT BINDING ON BIDDERS; MOREOVER, BIDS MAY NOT BE EVALUATED ON DIFFERENT BASIS THAN STATED IN IFB. BIDDERS WERE EFFECTIVELY DENIED OPPORTUNITY TO CONSIDER WHETHER BIDS SHOULD BE MODIFIED AND FPR 1- 2.207(D) PRECLUDES AWARD IN SUCH CIRCUMSTANCE. BIDS - EVALUATION - ESTIMATES - REQUIREMENTS CONTRACT INVITATION FOR BIDS IS DEFECTIVE WHERE NO ESTIMATED QUANTITIES OF SERVICES ADVERTISED ARE STATED AS REQUIRED BY FPR 1-3.409(B)(1) AND PRIOR GAO DECISIONS.

IN THE MATTER OF JACOBS TRANSFER, INC.; KANE TRANSFER COMPANY, APRIL 25, 1974:

ON NOVEMBER 1, 1973, SOLICITATION NO. 3TTM-801 WAS ISSUED BY THE TRANSPORTATION MANAGEMENT DIVISION, FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION (GSA) TO SECURE A REQUIREMENTS CONTRACT FOR PICKUP AND/OR DELIVERY SERVICE FOR STORE-STOCK MERCHANDISE BETWEEN THE FRANCONIA STORES DEPOT IN VIRGINIA AND POINTS WITHIN THE WASHINGTON, D.C. COMMERCIAL ZONE, LAUREL AND FORT GEORGE G. MEADE, MARYLAND. THE CONTRACT WOULD BE FOR A PERIOD OF 1 YEAR BEGINNING DECEMBER 1, 1973, AND ENDING NOVEMBER 30, 1974, WITH AN OPTION TO EXTEND FOR TWO 1-YEAR PERIODS.

BY AMENDMENT NO. 1, BID OPENING WAS EXTENDED TO NOVEMBER 19, 1973. THE METHOD OF AWARD CLAUSE (PARAGRAPH 21) CONTAINED IN THE SOLICITATION PROVIDED:

AWARD WILL BE BASED ON THE BASIS OF RATE PER 100 POUNDS TO LOWEST RESPONSIBLE BIDDER. MINIMUM CHARGES WILL NOT BE CONSIDERED AND NO MULTIPLE AWARDS WILL BE MADE.

THE RATES AND CHARGES CLAUSE (PARAGRAPH 22) STATED:

(A) RATE ON STORES STOCK ITEMS IN ANY QUANTITY OF WEIGHT $

(B) MINIMUM CHARGE PER SHIPMENT ON EMERGENCY SHIPMENTS OF STORES STOCK ITEMS

(C) RATE ON STORES STOCK ITEMS APPLICABLE ON SHIPMENTS MADE ON SATURDAYS, SUNDAYS AND FEDERAL HOLIDAYS IN ANY QUANTITY OF WEIGHT $

(D) HOURLY CHARGES, WHERE AUTHORIZED BY FEDERAL SUPPLY SERVICE (HELPER ONLY)

$ VEHICLE AND DRIVER

THE SOLICITATION ALSO REQUIRED BIDDERS TO CERTIFY THAT THEY EITHER HOLD OR DO NOT HOLD AUTHORIZATION FROM THE INTERSTATE COMMERCE COMMISSION (ICC) OR OTHER COGNIZANT REGULATORY BODY AND TO FURNISH COPIES OF THE AUTHORIZATION IF REQUESTED.

VERY SHORTLY BEFORE BID OPENING, THE EXACT MOMENT BEING IN DISPUTE, IT WAS STATED TO EVERYONE PRESENT IN THE GSA BID ROOM, INCLUDING THE PROTESTER:

ONLY ONE PRICE WILL BE READ, AND THAT PRICE WILL BE THE PRICE ENTERED UNDER PARAGRAPH 22(A) OF THE INVITATION. THIS PRICE WILL BE THE FIGURE USED IN EVALUATING THE BID FOR AWARD PURPOSES.

NO OBJECTION OR QUESTION WAS RAISED AS TO THE PROPOSED METHOD OF AWARD.

ON NOVEMBER 21, 1973, JACOBS TRANSFER, INC (JACOBS), BY LETTER TO THE CONTRACTING OFFICER, ASSERTED THAT BASED ON THE METHOD OF AWARD CLAUSE IT, RATHER THAN KANE TRANSFER COMPANY (KANE), SHOULD BE THE LOW BIDDER. THE SAME DAY, COUNSEL FOR JACOBS, BY A SEPARATE LETTER TO THE CONTRACTING OFFICER, ALLEGED THAT KANE WAS NOT A RESPONSIBLE OR ELIGIBLE BIDDER. SPECIFICALLY, JACOBS ALLEGED THAT KANE DID NOT POSSESS PROPER AUTHORITY TO TRANSPORT CERTAIN COMMODITIES FROM VIRGINIA NORTHBOUND TO CERTAIN AREA CONTEMPLATED IN THE SOLICITATION. THE CONTRACTING OFFICER, AFTER DUE CONSIDERATION, CONCLUDED THAT KANE WAS A RESPONSIBLE CONTRACTOR AND HAD PROPERLY BEEN EVALUATED AS THE LOW OFFEROR AND THEREAFTER MADE AWARD TO KANE ON NOVEMBER 30, 1973. ON DECEMBER 3, 1973, JACOBS, THROUGH COUNSEL, FILED THE PROTEST WITH OUR OFFICE.

JACOBS CONTENDS THAT THE METHOD OF AWARD CLAUSE, ALTHOUGH SPECIFICALLY OMITTING MINIMUM CHARGES (PARAGRAPH (B)), DID NOT SPECIFICALLY PRECLUDE EVALUATING A BID PRICE FOR PARAGRAPH (C) UNDER THE RATES AND CHARGES CLAUSE. JACOBS THEREFORE CONTENDS THAT HAD GSA EVALUATED THE BIDS ON THE BASIS OF BOTH PARAGRAPHS (A) AND (C), JACOBS, RATHER THAN KANE, WOULD HAVE BEEN THE LOW BIDDER. JACOBS FURTHER ASSERTS THAT THE STATEMENTS MADE PRIOR TO BID OPENING AS TO THE EVALUATION METHOD FOR THE BIDS WERE IMPROPER AND NOT BINDING.

GSA HAS RESPONDED THAT JACOBS HAS BEEN A GOVERNMENT CONTRACTOR FOR NEARLY 10 YEARS AS A RESULT OF CONTRACTS AWARDED FOR THE SAME REQUIREMENT IN 1964, 1967, AND 1970. ACCORDING TO GSA, NONE OF THE CONTRACTS WERE AWARDED ON THE BASIS OF AN OVERTIME RATE, ALTHOUGH AT LEAST THE 1970 SOLICITATION REQUIRED BIDDERS TO INDICATE SUCH A RATE IN THE BIDS. VIEW OF THIS BACKGROUND, GSA BELIEVES THAT IT WOULD BE SOMEWHAT INCONCEIVABLE THAT JACOBS EXPECTED THAT THE AWARD WOULD BE MADE ON THE BASIS OF THE COMBINATION OF THE PARAGRAPH (A) NORMAL RATES AND (C) OVERTIME RATES OF THE RATES AND CHARGES CLAUSE.

IN ANY CASE, GSA CONTENDS THAT IT IS TOTALLY UNREASONABLE TO INTERPRET THE CLAUSES AS SUGGESTED BY THE PROTESTER. PARAGRAPH (C), RELATING TO SHIPMENTS TO BE MADE ON SATURDAYS, SUNDAYS AND FEDERAL HOLIDAYS, WOULD ONLY BE UTILIZED WHERE MOVEMENT COULD NOT POSSIBLY BE ACCOMPLISHED DURING THE NORMAL WORK WEEK. AS A PRACTICAL MATTER, IT WOULD THEREFORE BE IMPOSSIBLE TO ESTIMATE THE AMOUNT OF WEEKEND AND HOLIDAY MOVEMENT WITH ANY DEGREE OF ACCURACY. TO GIVE AS MUCH WEIGHT TO THE BIDDING PRICES FOR MOVEMENT DURING THE NORMAL WORK WEEK UNDER PARAGRAPH (A) AS FOR MOVEMENT ON THE WEEKENDS UNDER PARAGRAPH (C) LENDS ITSELF TO AN UNBALANCED BIDDING SITUATION WHEREBY A BIDDER COULD BID LOW ON PARAGRAPH (C) WHERE LITTLE TRAFFIC IS EXPECTED AND BID HIGH UNDER PARAGRAPH (A) WHERE THE MAIN BULK OF THE MOVEMENT IS ANTICIPATED.

FINALLY, GSA RELIES ON THE STATEMENT MADE JUST PRIOR TO BID OPENING AS FIXING THE METHOD OF AWARD. GSA CONTENDS THAT SINCE NO PARTY EITHER RAISED AN OBJECTION OR QUESTIONED THE PROPOSED METHOD OF AWARD IT SHOULD STAND.

OUR REVIEW OF THE PROVISIONS OF THE INVITATION FOR BIDS (IFB) LEAVES NO DOUBT THAT PARAGRAPHS 21 AND 22 CONTEMPLATED AND REQUIRED THE EVALUATION OF BID PRICES BY INCLUDING BOTH SUBPARTS (A) AND (C). WHILE GSA ACTUALLY MAY NOT HAVE INTENDED TO EVALUATE BIDS ON THAT BASIS, THE RULE IS SETTLED THAT BIDS MAY NOT BE EVALUATED ON A DIFFERENT BASIS THAN THAT SET OUT IN THE IFB. B-148749, JUNE 25, 1962. MOREOVER, PARAGRAPH 3 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, STATES, "ORAL EXPLANATIONS OR INSTRUCTIONS GIVEN BEFORE THE AWARD OF THE CONTRACT WILL NOT BE BINDING."

KANE'S BID ON ITEM (A) IN THE AMOUNT OF $0.714 PER 100 POUNDS WAS EVALUATED BY GSA AS LOWER THAN JACOBS' BID IN THE AMOUNT OF $0.758 PER 100 POUNDS LESS A 5 PERCENT PROMPT PAYMENT DISCOUNT. AS A RESULT OF THIS EVALUATION, KANE WAS AWARDED THE CONTRACT. HOWEVER, EVALUATION IN ACCORDANCE WITH THE TERMS OF THE SOLICITATION WOULD HAVE REQUIRED CONSIDERATION OF THE AMOUNTS QUOTED UNDER PARAGRAPH (C) - JACOBS, $1.438; KANE, $1.428 RESULTING IN NET BIDS OF - JACOBS, $2.086 (INCLUDING APPLICABLE DISCOUNT FACTOR) AND KANE, $2.142. THEREFORE, JACOBS SHOULD HAVE BEEN DETERMINED TO BE THE LOW BIDDER, IF RELATIVE QUANTITIES ARE IGNORED.

FEDERAL PROCUREMENT REGULATIONS (FPR) SECTION 1-2.207 PROVIDES FOR THE ISSUANCE OF A WRITTEN AMENDMENT WHEN IT BECOMES NECESSARY BEFORE BID OPENING TO MAKE CHANGES IN THE IFB. THE CHANGE IN THIS INSTANCE WAS ORAL AND IN NO WAY COMPLIED WITH FPR. FURTHER, FPR 1-2.207(D) STATES:

*** NO AWARD SHALL BE MADE ON THE INVITATION UNLESS SUCH AMENDMENT HAS BEEN ISSUED IN SUFFICIENT TIME TO PERMIT ALL PROSPECTIVE BIDDERS TO CONSIDER SUCH INFORMATION IN SUBMITTING OR MODIFYING THEIR BIDS.

THUS, THE REGULATIONS CONTEMPLATE THAT NO AWARD BE MADE UNLESS ALL PROSPECTIVE BIDDERS HAVE AN OPPORTUNITY TO CONSIDER CHANGES IN THE INVITATION AND HAVE AN OPPORTUNITY TO MODIFY THEIR BIDS AS A RESULT OF SUCH INFORMATION. IN THIS CASE, ALTHOUGH ALL BIDDERS WERE IN ATTENDANCE AT THE BID OPENING, THEY WERE EFFECTIVELY DENIED AN OPPORTUNITY TO CONSIDER WHETHER THEY WISHED TO MODIFY THEIR BIDS. IN THAT REGARD, THE ATTORNEY FOR KANE HAS INDICATED THAT UNDER THE PREVIOUS PROCUREMENT FOR THE SERVICES, GSA ISSUED A FORMAL AMENDMENT TO PROVIDE FOR EVALUATION OF BIDS ON A NON-OVERTIME BASIS ALONE. IN VIEW OF THE MANDATE IN FPR 1- 2.207(D), NO AWARD SHOULD HAVE BEEN MADE UNDER THE INVITATION.

IN ADDITION, THE INVITATION WAS DEFECTIVE. FIRST, FPR 1-3.409(B)(1) PROVIDES THAT IN A REQUIREMENTS CONTRACT -

*** AN ESTIMATED TOTAL QUANTITY IS STATED FOR THE INFORMATION OF PROSPECTIVE CONTRACTORS, WHICH ESTIMATE SHOULD BE AS REALISTIC AS POSSIBLE. THE ESTIMATE MAY BE OBTAINED FROM THE RECORDS OF PREVIOUS REQUIREMENTS AND CONSUMPTION, OR BY OTHER MEANS. ***

SECOND, OUR OFFICE HAS HELD THAT BIDS MUST BE EVALUATED ON THE BASIS OF THE ESTIMATED NUMBER OF WORK UNITS TO BE ACCOMPLISHED UNDER THE CONTRACT. 47 COMP. GEN. 272 (1967); 43 ID. 159 (1963). FURTHER, IN B 173183, SEPTEMBER 7, 1971, IT WAS STATED:

*** ALTHOUGH IT MAY INDEED BE ADMINISTRATIVELY DIFFICULT, WE FEEL THE ESTABLISHMENT OF ESTIMATED QUANTITIES BY SOME REASONABLE MEANS, RECOGNIZING THE LIMITATIONS ON ACCURACY INHERENT IN THE MOST ACCURATE MEANS AVAILABLE IN SOME SITUATIONS, WOULD CLEARLY BE SUPERIOR TO UTILIZING NO WEIGHT FACTOR AT ALL. ***

IN VIEW OF THE FOREGOING, IT IS RECOMMENDED THAT THE AWARD TO KANE BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THE PROCUREMENT BE RESOLICITED UNDER AN INVITATION WHICH PROVIDES FOR EVALUATION OF BIDS BASED ON THE ESTIMATED QUANITY OF SERVICES FOR THE ENTIRE RANGE OF CATEGORIES INVOLVED ((A) THROUGH (D)).

IN THE CIRCUMSTANCES IT WOULD BE ACADEMIC TO DISCUSS THE ICC AUTHORITY OF KANE NECESSARY FOR THE CONTRACT. THEREFORE, THAT POINT WILL NOT BE CONSIDERED.

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.