B-180422, MAY 13, 1974

B-180422: May 13, 1974

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BID WAS PROPERLY REJECTED AS NONCONFORMING ITEM COST LESS. DSA130-74-E-0809 WAS ISSUED BY THE DEFENSE SUPPLY AGENCY. FIVE BIDS WERE RECEIVED AND OPENED ON DECEMBER 21. THE LOW BID FROM HAWTHORN MELLODY DAIRY (HAWTHORN) WAS DETERMINED TO BE NONRESPONSIVE PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2 FOR FAILURE TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE SOLICITATION. THIS PROTEST WAS DENIED BY THE CONTRACTING AGENCY AND THE CONTRACT WAS AWARDED TO ANOTHER BIDDER. COUNSEL FOR HAWTHORN CONTENDS THAT THE DEVIATION IN HAWTHORN'S BID WAS NOT OF A MATERIAL NATURE BECAUSE HAWTHORN OFFERED THE GOVERNMENT AN EQUALLY DESIRABLE BUT LESS COSTLY PRODUCT WHICH ALSO FULFILLED THE STATED REQUIREMENTS.

B-180422, MAY 13, 1974

WHERE BIDDER UNDER DAIRY REQUIREMENTS SOLICITATION OFFERED ITEM IN CONTAINER SIZES DIFFERENT FROM THOSE CALLED FOR BY SOLICITATION, BID WAS PROPERLY REJECTED AS NONCONFORMING ITEM COST LESS, THEREBY PROVIDING COMPETITIVE ADVANTAGE OVER BIDS ON CONFORMING ITEM, AND BECAUSE AGENCY DEMONSTRATED A NEED FOR SIZES SPECIFIED.

TO HAWTHORN MELLODY DAIRY:

ON DECEMBER 5, 1973, ADDENDUM 6 TO ADVERTISED NOTICE OF INTENT TO PURCHASE NO. DSA130-74-E-0809 WAS ISSUED BY THE DEFENSE SUPPLY AGENCY, SUBSISTENCE REGIONAL HEADQUARTERS, CHICAGO, FOR DAIRY REQUIREMENTS AT WHITEMAN AIR FORCE BASE, MISSOURI, FOR THE PERIOD OF JANUARY 1, 1974 THROUGH MARCH 31, 1974. FIVE BIDS WERE RECEIVED AND OPENED ON DECEMBER 21, 1973. THE LOW BID FROM HAWTHORN MELLODY DAIRY (HAWTHORN) WAS DETERMINED TO BE NONRESPONSIVE PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2 FOR FAILURE TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE SOLICITATION. SPECIFICALLY, THE NONCONFORMANCE CONSISTED OF INSERTIONS OF 12 OUNCE CONTAINERS FOR ITEMS 21 AND 22 OF THE SOLICITATION WHICH SPECIFIED PINT AND HALF-PINT CONTAINERS, RESPECTIVELY, FOR SOUR CREAM. UPON NOTIFICATION OF THE AGENCY'S INTENT TO DECLARE ITS BID NONRESPONSIVE, HAWTHORN PROTESTED TO THE CONTRACTING OFFICER. THIS PROTEST WAS DENIED BY THE CONTRACTING AGENCY AND THE CONTRACT WAS AWARDED TO ANOTHER BIDDER, BEATRICE FOODS COMPANY, ON DECEMBER 27, 1973, AT A TOTAL ESTIMATED PRICE OF $126,868.75.

COUNSEL FOR HAWTHORN CONTENDS THAT THE DEVIATION IN HAWTHORN'S BID WAS NOT OF A MATERIAL NATURE BECAUSE HAWTHORN OFFERED THE GOVERNMENT AN EQUALLY DESIRABLE BUT LESS COSTLY PRODUCT WHICH ALSO FULFILLED THE STATED REQUIREMENTS. IN THIS REGARD, IT IS CONTENDED THAT THE DEVIATION RELATED TO A RELATIVELY MINOR PART OF THE CONTRACT REQUIREMENTS (LESS THAN $1,000) AND SHOULD HAVE BEEN WAIVED IN VIEW OF THE APPROXIMATE $10,000 IN SAVINGS WHICH HAWTHORN'S BID REPRESENTED IN COMPARISON TO THE PRICE OF THE SUCCESSFUL BIDDER. COUNSEL QUESTIONS THE PROPRIETY OF THE SPECIFICATION REQUIREMENTS FOR PINT AND HALF-PINT CONTAINERS OF SOUR CREAM SINCE THOSE QUANTITIES CANNOT ORDINARILY BE SECURED THROUGH A NORMAL PROCESS RUN, BUT ONLY THROUGH A SPECIAL PRODUCTION RUN, THEREBY INVOLVING EXTRA EXPENSE THAT MUST BE PASSED ON TO THE GOVERNMENT. COUNSEL ALSO CITES B-166466, APRIL 22, 1969, AS PRECEDENT FOR WAIVING THE REQUIREMENT FOR PINTS AND HALF-PINTS, SINCE THAT DECISION APPROVED AWARD TO A BIDDER OFFERING TO SUPPLY HALF-PINTS OF CREAM IN LIEU OF THE PINT UNITS SPECIFIED IN THE INVITATION.

TO INSURE THE BENEFITS OF COMPETITION TO THE GOVERNMENT, IT IS ESSENTIAL THAT CONTRACT AWARDS BE MADE ON THE BASIS OF THE SPECIFICATION REQUIREMENTS SUBMITTED FOR COMPETITION, AND A DEVIATION TO THOSE REQUIREMENTS MAY ONLY BE WAIVED IF THE DEVIATION DOES NOT GO TO THE SUBSTANCE OF THE BID OR WORK AN INJUSTICE TO THE OTHER BIDDERS. 49 COMP. GEN. 211 (1969). IN THIS REGARD, DEVIATIONS WHICH AFFECT THE QUALITY, QUANTITY OR PRICE OF THE ARTICLES OFFERED, ARE MATERIAL DEVIATIONS WHICH MAY NOT BE WAIVED. 45 COMP. GEN. 365, 368 (1965). IN THE INSTANT CASE, BY COUNSEL'S OWN ADMISSION, PINT AND HALF-PINT CONTAINERS MUST BE SECURED THROUGH A SPECIAL PRODUCTION RUN WHICH WOULD ENTAIL AN EXTRA EXPENSE THAT MUST BE PASSED ON TO THE GOVERNMENT. IN VIEW THEREOF, THE DEVIATION MUST BE CONSIDERED TO AFFECT AT LEAST THE PRICE OF THE ITEM AND, THEREFORE, ITS WAIVER WOULD NOT BE PERMISSIBLE SINCE THE BIDDERS CONFORMING TO THE SPECIFICATIONS WOULD BE AT A COMPETITIVE DISADVANTAGE AS THEIR BIDS WERE BASED ON PROVIDING A MORE COSTLY ITEM.

WITH REGARD TO THE QUESTION RAISED BY COUNSEL AS TO THE GOVERNMENT'S NECESSITY FOR PINTS AND HALF-PINTS, IT IS REPORTED BY THE CONTRACTING AGENCY THAT WHITEMAN AIR FORCE BASE HAD ORDERED AND ACCEPTED SOUR CREAM IN THOSE SIZES SINCE APRIL 1973 TO FULFILL SPECIFIC REQUIREMENTS FOR PINTS FOR HOSPITAL USE AND HALF-PINTS FOR COMMISSARY RESALE. IN THIS REGARD, IT IS THE PROVINCE OF THE CONTRACTING AGENCY TO DETERMINE ITS ACTUAL NEEDS AND TO DRAFT CONTRACT SPECIFICATIONS ACCORDINGLY. 45 COMP. GEN. 365, 368, SUPRA; 17 COMP. GEN. 554, 557 (1938). THE EXERCISE OF SUCH DISCRETION, IN THE ABSENCE OF BAD FAITH, IS NOT SUBJECT TO QUESTION BY OUR OFFICE. FURTHERMORE, ANY QUESTION CONCERNING THE PROPRIETY OF THE SPECIFICATION REQUIREMENTS SHOULD HAVE BEEN RAISED PRIOR TO BID OPENING. 4 CFR 20.2(A).

CONCERNING B-166466, CITED BY HAWTHORN'S COUNSEL, WE BELIEVE THAT CASE TO BE DISTINGUISHABLE. UNLIKE THE INSTANT CASE, IN WHICH THE REQUIREMENT FOR A PARTICULAR SIZE CONTAINER WAS CONSIDERED NECESSARY FOR SPECIFIC USES, THE CONTRACTING AGENCY IN THE CITED CASE ADMITTED AFTER BID OPENING THAT THERE WAS NO ACTUAL REQUIREMENT FOR PINT CONTAINERS AND THAT HALF-PINTS WOULD SERVE ITS NEEDS AS WELL. MOREOVER, IN THE CITED CASE THE BIDDING INDICATED THAT THE DEVIATING BIDDER GAINED NO COMPETITIVE ADVANTAGE AND OTHER BIDDERS WERE NOT THEREFORE AT A COMPETITIVE DISADVANTAGE AS THEY WOULD BE IN THE INSTANT CASE.

ACCORDINGLY, WE CONCLUDE THAT HAWTHORN'S BID WAS PROPERLY REJECTED AND THE PROTEST IS THEREFORE DENIED.