B-181451, NOV 6, 1974, 54 COMP GEN 340

B-181451, NOV 6, 1974, 54 COMP GEN 340

BIDDERS - RESPONSIBILITY V. BID RESPONSIVENESS - INFORMATION - CONFIDENTIAL LOW BIDDER'S REQUEST THAT INFORMATION REQUIRED BY INVITATION BE KEPT CONFIDENTIAL DID NOT RENDER BID NONRESPONSIVE NOR VIOLATE REQUIREMENT THAT BIDS BE PUBLICLY OPENED, SINCE INFORMATION PERTAINED TO BIDDER'S CAPABILITY TO PERFORM CONTRACT (RESPONSIBILITY), RATHER THAN TO PRICE, QUANTITY AND DELIVERY TERMS OF BID, AND PARAGRAPH FPR 1-1.1207, FEDERAL PROCUREMENT REGULATIONS, PROVIDES THAT INFORMATION PERTAINING TO RESPONSIBILITY SHALL NOT BE RELEASED OUTSIDE GOVERNMENT AND SHALL NOT BE MADE AVAILABLE FOR INSPECTION BY OTHER BIDDERS. BIDS - PRICES - EXCESSIVE - ALLEGATION - NOT SUPPORTED BY RECORDS PROTESTER'S ALLEGATION THAT PRICES QUOTED BY LOW BIDDER WERE EXCESSIVE AND VIOLATE INVITATION PROVISION, IMPLEMENTING PUBLIC LAW 92 463, WHICH REQUIRES THAT RATES BID FOR A PAGE COPY OF TRANSCRIPT BE ACTUAL COST OF DUPLICATION, BASED UPON UNSUBSTANTIATED INFERENCE IN BIDDER'S MANNER OF BIDDING, IS NOT SUPPORTED BY RECORD SINCE BIDDER HAS FURNISHED SATISFACTORY EXPLANATION AS TO ITS MANNER OF BIDDING AND ITS PRICES ARE CONSISTENT WITH THOSE OF OTHER BIDDERS ON THIS AND PRIOR PROCUREMENTS FOR SAME SERVICE. BIDS - MISTAKES - CORRECTION - STILL LOWEST BID WHILE GENERAL ACCOUNTING OFFICE HAS RIGHT OF REVIEW WITH RESPECT TO BID CORRECTION AFTER BID OPENING BUT PRIOR TO AWARD, IT WILL NOT QUESTION ADMINISTRATIVE DETERMINATION PERMITTING CORRECTION UNLESS SUCH DETERMINATION HAS NO REASONABLE BASIS. THEREFORE, CORRECTION, PURSUANT TO PARAGRAPH 1-2.405-2, FEDERAL PROCUREMENT REGULATIONS, ON BASIS CLERICAL MISTAKE WAS APPARENT ON FACE OF BID, WILL NOT BE DISTURBED WHERE SUCH DETERMINATION WAS REASONABLE AND RELATIVE STANDING OF BIDS REMAINS UNCHANGED AND CORRECTED BID REMAINS LOW.

IN THE MATTER OF ACE-FEDERAL REPORTERS, INC., NOVEMBER 6, 1974:

ON MAY 15, 1974, INVITATION FOR BIDS (IFB) NO. BI-FMC74-1, WAS ISSUED BY THE FEDERAL MARITIME COMMISSION (FMC). THE IFB SOLICITED BIDS FOR THE FURNISHING OF STENOGRAPHIC REPORTING SERVICES TO THE FMC FOR THE PERIOD JULY 1, 1974, THROUGH JUNE 30, 1975. IN RESPONSE TO THE SUBJECT IFB, SIX BIDS WERE RECEIVED AND OPENED ON JUNE 5, 1974, AS SCHEDULED. THE LOW BID BASED UPON THE AGGREGATE OF THE ITEM UNIT PRICES FOR THE VARIOUS SERVICES WAS FROM HOOVER REPORTING COMPANY, INCORPORATED (HOOVER), IN THE AMOUNT OF $632.85, AND THE NEXT LOW BID IN THE AMOUNT OF $874.30 WAS SUBMITTED BY ACE-FEDERAL REPORTERS, INCORPORATED (ACE FEDERAL). THE CONTRACT WAS AWARDED TO HOOVER ON JUNE 14, 1974.

BY LETTERS OF JUNE 6 AND JUNE 13, 1974, FROM ITS COUNSEL TO OUR OFFICE ACE-FEDERAL PROTESTED AGAINST THE AWARD OF A CONTRACT TO HOOVER. ACE- FEDERAL FIRST CONTENDS THAT HOOVER'S BID, SUBMITTED WITH A CONFIDENTIAL LETTER, THE CONTENTS OF WHICH WERE NOT DISCLOSED AT BID OPENING, SHOULD HAVE BEEN REJECTED AS NON-RESPONSIVE. SPECIFICALLY, ACE-FEDERAL STATES THAT HOOVER'S DEMAND FOR CONFIDENTIALITY MADE IT IMPOSSIBLE TO PUBLICLY OPEN ITS COMPLETE BID AND THAT THE "SUPPRESSION AND NONDISCLOSURE OF INFORMATION (UNLESS PROVIDED FOR IN THE BID INVITATION) IS WHOLLY INCONSISTENT WITH THE RULES OF FORMAL ADVERTISING AND THE LONG STANDING POLICIES OF PUBLIC DISCLOSURE UNDERLYING THE FORMAL ADVERTISING CONCEPT."

IN THIS REGARD, THE IFB REQUIRED THAT "EACH BID BE ACCOMPANIED BY A DETAILED STATEMENT OF FACTS SETTING FORTH THE BUSINESS AND TECHNICAL ORGANIZATION OF THE BIDDER AVAILABLE FOR THE PERFORMANCE OF THE REQUIRED SERVICES, INCLUDING SATISFACTORY EVIDENCE OF EXPERIENCE IN THE CLASS OF WORK ***." IN RESPONSE TO THIS REQUIREMENT, HOOVER SUBMITTED AN INFORMATION SHEET OUTLINING THE BUSINESS BACKGROUND AND EXPERIENCE OF THE COMPANY AND A LIST MARKED "CONFIDENTIAL" DELINEATING THE NAMES AND ADDRESSES OF THE BIDDER'S REPRESENTATIVES IN ALL THE PRINCIPAL PORT CITIES THAT WOULD BE PERFORMING THE REQUIRED SERVICES.

FEDERAL LAW, AS CODIFIED AT 41 U.S.C. 253(B), INCLUDES THE FOLLOWING WITH RESPECT TO ALL ADVERTISED PROCUREMENTS:

(B) ALL BIDS SHALL BE PUBLICLY OPENED AT THE TIME AND PLACE STATED IN THE ADVERTISEMENT. ***

A PUBLIC OPENING HAS BEEN INTERPRETED TO MEAN THAT THE BID MUST PUBLICLY DISCLOSE TO ALL COMPETING BIDDERS THE ESSENTIAL NATURE AND TYPE OF THE PRODUCTS OFFERED AND THOSE ELEMENTS OF THE BID WHICH RELATE TO PRICE, QUANTITY AND DELIVERY TERMS. 53 COMP. GEN. 24 (1973). PUBLIC DISCLOSURE WAS MADE AS TO THOSE PORTIONS OF HOOVER'S BID CONCERNING PRICE, QUANTITY, AND DELIVERY TERMS. WE HAVE CAREFULLY REVIEWED THE MATERIAL THAT HOOVER REQUESTED BE KEPT CONFIDENTIAL WITH DISCLOSURE OUTSIDE FMC FORBIDDEN. THAT INFORMATION, AS NOTED ABOVE, CONCERNED HOOVER'S PREVIOUS EXPERIENCE IN PERFORMING SIMILAR REPORTING SERVICES, AND THE PORTION OF THE MATERIAL MARKED "CONFIDENTIAL" WAS THE LIST OF ITS REPRESENTATIVES IN VARIOUS PORT CITIES. THE INFORMATION WAS REQUIRED BY THE SOLICITATION AND DID NOT RELATE TO THE OBLIGATION OF THE BIDDER TO PERFORM THE CONTRACT WITH RESPECT TO PRICE, QUANTITY AND DELIVERY, BUT RATHER DEALT WITH THE CAPACITY OR ABILITY OF THE BIDDER TO PERFORM. THE QUESTION OF A BIDDER'S ABILITY TO PERFORM A PROPOSED CONTRACT, AS OPPOSED TO HIS COMPLIANCE WITH THE MATERIAL TERMS AND CONDITIONS OF AN INVITATION FOR BIDS, IS A QUESTION OF RESPONSIBILITY RATHER THAN OF RESPONSIVENESS. B-166144, MARCH 20, 1969. WITH REGARD TO THE MATTER OF RESPONSIBILITY, SECTION 1-1.1207 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) PROVIDES THAT:

DATA *** ACCUMULATED FOR PURPOSE OF DETERMINING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR SHALL NOT BE RELEASED OUTSIDE THE GOVERNMENT, AND SHALL NOT BE MADE AVAILABLE FOR INSPECTION BY INDIVIDUALS, FIRMS, OR TRADE ORGANIZATIONS ***.

IN VIEW OF THE FACT THAT THE INFORMATION REQUIRED TO BE FURNISHED IN THE INSTANT PROCUREMENT DEALT SOLELY WITH BIDDER RESPONSIBILITY, AND SINCE THE APPLICABLE REGULATION PROHIBITS ITS DISCLOSURE, THE RESTRICTION OF CONFIDENTIALITY IMPOSED ON THE DISCLOSURE OF THAT INFORMATION BY HOOVER DID NOT REQUIRE REJECTION OF ITS BID AS NONRESPONSIVE AND DID NOT UNDERMINE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM.

ACE-FEDERAL NEXT CONTENDS THAT THE PRICES QUOTED BY HOOVER FOR ITEMS 2 AND 6 OF THE SCHEDULE RATES WERE NONRESPONSIVE TO PARAGRAPH 15(E) OF THE IFB, IMPLEMENTING PUBLIC LAW 92-463, 86 STAT. 770, SEC. 11(A), REQUIRING THAT THE RATES BID FOR A PAGE COPY OF TRANSCRIPTS SHALL REPRESENT THE ACTUAL COST OF DUPLICATION OF A TRANSCRIPT PAGE, WHICH ACCORDING TO THE IFB IS THE PRICE THAT WOULD BE PAID TO A COMMERCIAL DUPLICATION FIRM IN A COMPETITIVE MARKET, INCLUDING REASONABLE OVERHEAD AND PROFIT BUT NOT COST OF TRANSCRIPTION. SPECIFICALLY, ACE-FEDERAL CONTENDS THAT HOOVER'S BID OF 20 CENTS (ITEM 6A) FOR DAILY COPY AND 30 CENTS (ITEM 2A) FOR REGULAR COPY (QUOTED PRICES ARE FOR WASHINGTON, D.C.), CLEARLY REVEALS THAT HOOVER BID AN AMOUNT FAR IN EXCESS OF THE ACTUAL COST OF DUPLICATION AS DEFINED IN PARAGRAPH 15(E). IN THIS REGARD, THE PROTESTER CONTENDS THAT HOOVER'S BID OF 30 CENTS FOR DUPLICATION OF REGULAR COPY IS EXCESSIVE ON ITS FACE WHEN EVALUATED IN CONJUNCTION WITH THE LOWER PRICE QUOTED FOR DAILY COPY, BASED ON THE ASSERTION THAT WHILE THE COST TO THE BIDDER FOR DUPLICATING REGULAR COPY MIGHT BE LESS THAN THE COST OF DUPLICATING DAILY COPY, IT CAN IN NO EVENT COST MORE. IN THIS CONNECTION, IT IS POINTED OUT THAT ACE FEDERAL'S PRICE FOR THESE ITEMS WAS 10 CENTS, WHICH IT CONTENDS IS THE PREVAILING RATE IN WASHINGTON. MOREOVER, THE PROTESTER CONTENDS THAT SOME OF HOOVER'S OTHER QUOTED PRICES ARE IN EXCESS OF THE PREVAILING COMMERCIAL PRICES IN THE RESPECTIVE CITIES AND THUS SIMILARLY NONRESPONSIVE TO PARAGRAPH 15(E). FOR EXAMPLE, ACE-FEDERAL POINTS OUT THAT IT BID 25 CENTS FOR COPY IN ALASKA, HAWAII, AND PUERTO RICO AS COMPARED TO HOOVER'S BID OF 75 CENTS.

IT IS THE ADMINISTRATIVE POSITION THAT THE COST OF DUPLICATION QUOTED IN THE HOOVER BID ARE REASONABLE AND PROPERLY INCLUDE REASONABLE CHARGES FOR OVERHEAD AND PROFIT. IN THIS REGARD, FMC DRAWS ATTENTION TO HOOVER'S ASSERTION, MADE IN RESPONSE TO THE PROTESTER'S CONTENTION, THAT THE BID OF 20 CENTS FOR ITEM 6A (DAILY COPY IN WASHINGTON, D.C.) WAS A CLERICAL ERROR AND THAT THE AMOUNT FOR THAT ITEM SHOULD HAVE READ 30 CENTS, WHICH WOULD BE EQUAL TO THE AMOUNT BID FOR ITEM 2A. HOOVER ASSERTS THAT, NOTWITHSTANDING THE ERROR, WHICH WAS DISCOVERED AFTER BID OPENING BUT BEFORE AWARD, IT WILL PERFORM THE CONTRACT AT THE 20 CENTS PRICE.

ALTHOUGH HOOVER'S QUOTE OF A HIGHER PRICE FOR REGULAR COPY THAN THAT QUOTED FOR DAILY COPY MAY CREATE SOME DOUBT AS TO ITS REASONABLENESS, WE BELIEVE HOOVER HAS PROVIDED A REASONABLE EXPLANATION FOR THE DISPARITY. MOREOVER, OUR REVIEW OF THE "ABSTRACT OF BIDS," SUBMITTED AS PART OF THE RECORD IN THE INSTANT PROCUREMENT, REVEALS THAT THE PRICES QUOTED BY HOOVER FOR ITEMS 2A AND 6A (AS CORRECTED) ARE CONSISTENT WITH AND CLOSELY WITHIN THE PRICE RANGE OF THE OTHER BIDS SUBMITTED FOR THE SAME SERVICES, WHILE THERE EXISTS A WIDE DISPARITY BETWEEN THE PRICES OFFERED BY ACE- FEDERAL AND THE OTHER PARTICIPATING BIDDERS. ALTHOUGH THE SUBSTANTIAL DISPARITY BETWEEN THE AMOUNT BID BY THE PROTESTER AND THE OTHER BIDDERS, INCLUDING HOOVER, DOES NOT IN AND OF ITSELF ESTABLISH HOOVER'S PRICES AS BEING REASONABLE, IT DOES LEND SOME WEIGHT TO THIS CONCLUSION. WHILE THE PROTESTER CONTENDS THAT THE PREVAILING RATE IN WASHINGTON IS ABOUT 10 CENTS AND 10 TO 20 CENTS IN OTHER AREAS, IT HAS NOT SUBMITTED DATA OR OTHER EVIDENCE TO SUBSTANTIATE ITS CLAIM. HOOVER, HOWEVER, HAS SUBMITTED EVIDENCE OF THE PRICES ON OTHER CONTRACTS WHICH TEND TO SUPPORT THE REASONABLENESS OF ITS BID, AND HAS POINTED OUT THAT ACE-FEDERAL PREVIOUSLY BID 75 CENTS FOR ALASKA, HAWAII, AND PUERTO RICO. IN THESE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT HOOVER WAS NONRESPONSIVE AS ALLEGED.

FINALLY, ACE-FEDERAL ALLEGES THAT THE AMOUNT BID BY HOOVER FOR ITEM 5A OF THE SCHEDULE OF RATES WAS NONRESPONSIVE TO THE INVITATION IN THAT THE AMOUNT BID, $1.85, WAS NOT, AS REQUIRED, "EQUAL TO THE DIFFERENCE BETWEEN ITEM 3(A) AND 4(A) ABOVE." THE RECORD INDICATES THAT ON JUNE 14, 1974, THE CONTRACTING OFFICER RECEIVED VERIFICATION FROM HOOVER THAT THE AMOUNT BID FOR ITEM 5A HAD BEEN MISTAKENLY ENTERED AS $1.85 IN LIEU OF $1.80. HOOVER ASSERTS THAT THE ERROR WAS A TYPOGRAPHICAL MISTAKE IN THE ENTRY OF THE DIFFERENCE BETWEEN THE AMOUNT BID FOR ITEM 3A ($3.85) LESS THE AMOUNT BID FOR ITEM 4A ($2.05). PURSUANT TO FPR 1 2.406-2, HOOVER'S INDICATED PRICE FOR ITEM 5A WAS TREATED AS A CLERICAL MISTAKE, APPARENT ON THE FACE OF THE BID AND CORRECTED TO REFLECT A PRICE OF $1.80. WHILE ACE-FEDERAL CONCEDES THAT AN ERROR WAS MADE IN HOOVER'S BID, IT DOES NOT CONCEDE THAT THE AMOUNT BID FOR ITEM 5A WAS AN APPARENT CLERICAL ERROR, BUT CONTENDS THAT THE ERROR COULD BE IN EITHER 3A OR 5A (PROTESTER AGREES WITH FMC THAT ITEM 4A IS CORRECT). IN THIS REGARD, ACE-FEDERAL STATES THAT SINCE IT IS NOT CLEAR WHERE THE MISTAKE AROSE, HOOVER SHOULD HAVE BEEN REQUIRED, PURSUANT TO FPR 1 2.406-3(A)(2), TO SUPPORT ITS REQUEST FOR CORRECTION BY CLEAR AND CONVINCING EVIDENCE WHICH FULLY DEMONSTRATES THE NATURE OF THE MISTAKE AND THE AMOUNT OF THE BID ACTUALLY INTENDED.

IN REGARD TO AN ALLEGED ERROR IN BID, OUR OFFICE HAS HELD THAT TO PERMIT CORRECTION PRIOR TO AWARD, A BIDDER MUST SUBMIT CLEAR AND CONVINCING EVIDENCE THAT AN ERROR HAS BEEN MADE, THE MANNER IN WHICH THE ERROR OCCURRED, AND THE INTENDED BID PRICE. SEE 49 COMP. GEN. 480, 482 (1970); B-173031, SEPTEMBER 17, 1971. THE SAME BASIC REQUIREMENTS FOR THE CORRECTION OF A BID ARE FOUND IN SECTION 1-2.406-3(A)(2), FPR. HOWEVER, FPR 1-2.406-2 AUTHORIZES THE CORRECTION OF A CLERICAL MISTAKE WHICH IS "APPARENT ON THE FACE OF THE BID." THE AUTHORITY TO CORRECT MISTAKES ALLEGED AFTER BID OPENING BUT PRIOR TO AWARD IS VESTED IN THE PROCURING AGENCY. ALTHOUGH THE GENERAL ACCOUNTING OFFICE RETAINS THE RIGHT TO REVIEW ADMINISTRATIVE DETERMINATIONS, GAO WILL NOT QUESTION A FACTUAL DETERMINATION PERMITTING CORRECTION UNLESS THERE IS NO REASONABLE BASIS FOR SUCH DETERMINATION. B-179084, OCTOBER 17, 1973; B 178593, OCTOBER 10, 1973.

FMC CONCLUDED THAT THE MISTAKE ALLEGED BY HOOVER WAS APPARENT FROM THE FACE OF ITS BID BASED ON THE FOLLOWING RATIONALE:

THE AMOUNT BID FOR ITEM 4A, $2.05, IS NOT IN ERROR. ACCORDING TO THE SCHEDULE THE AMOUNT BID FOR ITEM 4A IS TO BE THE SAME AS THE AMOUNT BID FOR ITEM 1A. HOOVER BID $2.05 FOR ITEM 1A AND $2.05 FOR ITEM 4A. THUS, IT WOULD APPEAR THAT ITEM 4A IS NOT IN ERROR. THEREFORE, EITHER THE AMOUNT BID FOR ITEM 3A, $3.85, OR THAT BID FOR ITEM 5A, $1.85, IS IN ERROR. IT IS THE LATTER AMOUNT THAT IS IN ERROR BECAUSE WHERE ONE FIGURE IS AN INITIAL ENTRY, AS IS ITEM 3A IN THIS CASE, AND THE OTHER FIGURE IS THE RESULT OF AN ARITHMETIC PROCEDURE, AS IS ITEM 5A IN THIS CASE, THE ARITHMETIC WILL BE IN ERROR, NOT THE INITIAL ENTRY. THIS VIEW IS PARTICULARLY SALUTARY IN THIS CASE AS EITHER ITEM 5A MUST BE REDUCED BY 5 CENTS OR ITEM 3A MUST BE INCREASED BY 5 CENTS FOR THE THREE FIGURES TO TALLY CORRECTLY. IF ITEM 3A IS INCREASED, THE COMMISSION WILL BE REQUIRED TO PAY 5 CENTS MORE PER PAGE FOR DAILY COPY THAN AS BID, BUT HOOVER WILL NOT BE DEPRIVED OF ITS STATUS AS THE LOW BIDDER BECAUSE THE AMOUNT OF FIRST EVALUATION WILL BE INCREASED BY ONLY 25 CENTS. HOWEVER IF THE AMOUNT BID FOR ITEM 5A IS REDUCED 5 CENTS AS WAS DONE IN THIS CASE, THE POSITION OF HOOVER AS LOW BIDDER WILL NOT BE ALTERED, THE FIRST EVALUATION AMOUNT WILL REMAIN THE SAME, AS ITEM 5A WAS NOT PART OF THE EVALUATION, AND THE PUBLIC WILL RECEIVE DAILY COPY AT 5 CENTS LESS PER PAGE THAN AS BID.

IT IS OUR VIEW THAT THE DETERMINATION HERE THAT THERE WAS A CLERICAL MISTAKE APPARENT ON THE FACE OF HOOVER'S BID WAS REASONABLE. MOREOVER, WHEN CORRECTION IS ALLOWED IN A BID WHICH IS ON ITS FACE RESPONSIVE AND THE LOWEST RECEIVED, AND WHERE AS HERE, THE CORRECTION DOES NOT MAKE IT HIGHER THAN THE NEXT LOWEST BID, THE RIGHTS OF OTHER BIDDERS ARE NOT AFFECTED AND WE ARE NOT REQUIRED TO OBJECT TO SUCH ACTION. SEE 37 COMP. GEN. 210, 212 (1957). THEREFORE, OUR OFFICE IS OF THE OPINION THAT THE ADMINISTRATIVE DECISION TO ALLOW HOOVER TO CORRECT ITS BID BY REDUCING ITEM 5A BY 5 CENTS WAS PROPER UNDER THE AUTHORITY OF THE CITED REGULATION.

ACCORDINGLY, WE FIND NO LEGAL BASIS TO CONCLUDE THAT HOOVER'S BID WAS NONRESPONSIVE AND, THEREFORE, ACE-FEDERAL'S PROTEST IS DENIED.