B-181796, NOV 21, 1974, 54 COMP GEN 416

B-181796: Nov 21, 1974

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REQUIRING BID PROTESTS TO GENERAL ACCOUNTING OFFICE TO BE FILED WITHIN 5 DAYS AFTER BASIS OF PROTEST IS KNOWN OR SHOULD HAVE BEEN KNOWN. PROTEST RECEIVED ON THE MORNING OF THE 6TH DAY ALTHOUGH UNTIMELY IS CONSIDERED ON MERITS BECAUSE THE PROTEST RAISES ISSUES WITH RESPECT TO THE INTERPRETATION OF 10(C) OF SF 33A AND DECISION ON ISSUES RAISED MAY BE SIGNIFICANT TO PROCUREMENT PRACTICES AND PROCEDURES (4 CFR 20.2(C)). BIDS - QUALIFIED - ALL OR NONE - DEFINITE QUANTITIES "ALL OR NONE" BID ON ARMY FIRE EXTINGUISHER PROCUREMENT RESERVING BIDDER'S RIGHT TO QUOTE A REVISED UNIT PRICE IF AWARD MADE FOR LESSER QUANTITIES THAN STATED IN INVITATION FOR BIDS (IFB) IS NOT CONSIDERED NONRESPONSIVE WHERE SOLICITATION NEITHER AUTHORIZED NOR PROHIBITED "ALL OR NONE" BID SINCE ARMED SERVICES PROCUREMENT REGULATION 2-404.5 PROVIDES THAT UNLESS THE IFB SO STATES BID IS NOT RENDERED NONRESPONSIVE BY FACT THAT BIDDER SPECIFIES THAT AWARD WILL BE ACCEPTED ONLY ON ALL.

B-181796, NOV 21, 1974, 54 COMP GEN 416

CONTRACTS - PROTESTS - TIMELINESS - CONSIDERED ON MERITS UNDER 4 CFR 20.2(A), REQUIRING BID PROTESTS TO GENERAL ACCOUNTING OFFICE TO BE FILED WITHIN 5 DAYS AFTER BASIS OF PROTEST IS KNOWN OR SHOULD HAVE BEEN KNOWN, PROTEST RECEIVED ON THE MORNING OF THE 6TH DAY ALTHOUGH UNTIMELY IS CONSIDERED ON MERITS BECAUSE THE PROTEST RAISES ISSUES WITH RESPECT TO THE INTERPRETATION OF 10(C) OF SF 33A AND DECISION ON ISSUES RAISED MAY BE SIGNIFICANT TO PROCUREMENT PRACTICES AND PROCEDURES (4 CFR 20.2(C)). BIDS - QUALIFIED - ALL OR NONE - DEFINITE QUANTITIES "ALL OR NONE" BID ON ARMY FIRE EXTINGUISHER PROCUREMENT RESERVING BIDDER'S RIGHT TO QUOTE A REVISED UNIT PRICE IF AWARD MADE FOR LESSER QUANTITIES THAN STATED IN INVITATION FOR BIDS (IFB) IS NOT CONSIDERED NONRESPONSIVE WHERE SOLICITATION NEITHER AUTHORIZED NOR PROHIBITED "ALL OR NONE" BID SINCE ARMED SERVICES PROCUREMENT REGULATION 2-404.5 PROVIDES THAT UNLESS THE IFB SO STATES BID IS NOT RENDERED NONRESPONSIVE BY FACT THAT BIDDER SPECIFIES THAT AWARD WILL BE ACCEPTED ONLY ON ALL, OR A SPECIFIED GROUP, OF ITEMS INCLUDED IN INVITATION. MOREOVER, RESERVATION TO QUOTE REVISED UNIT PRICE ON LESSER QUANTITIES MAY PROPERLY CONSTITUTE PART OF "ALL OR NONE" QUALIFICATION. CONTRACTS - AWARDS - ADVANTAGE TO GOVERNMENT - SINGLE V. MULTIPLE AWARDS PROTEST OF BIDDER ON PARTIAL QUANTITY AGAINST AWARD TO ONLY OTHER HIGH BIDDER (BIDDING "ALL OR NONE") IS DENIED SINCE "ALL OR NONE" BID LOWER IN AGGREGATE THAN ANY COMBINATION OF INDIVIDUAL BIDS AVAILABLE MAY BE ACCEPTED BY GOVERNMENT ALTHOUGH PARTIAL AWARD COULD BE MADE AT LOWER UNIT COST. MOREOVER, AWARD TO HIGHER PRICED "ALL OR NONE" BIDDER IN LIEU OF PARTIAL AWARD TO LOW BIDDER AND RESOLICITATION OF REMAINING QUANTITY WAS NOT ILLEGAL AS CONTRACTING OFFICER DETERMINED HIGHER PRICE WAS NEVERTHELESS REASONABLE. BIDS - MODIFICATION - AFTER OPENING - NONRESPONSIVE BIDDER PARTIAL BIDDER WHO AFTER BID OPENING SOUGHT TO REVISE ITS OFFER BY BIDDING ON TOTAL REQUIREMENT MAY NOT DO SO SINCE BIDDERS MAY NOT VARY THEIR BIDS AFTER OPENING ON COMPETITIVE BASIS.

IN THE MATTER OF GENERAL FIRE EXTINGUISHER CORPORATION, NOVEMBER 21, 1974:

INVITATION FOR BIDS DSA 700-74-B-2444 WAS ISSUED ON MARCH 27, 1974, BY THE DEFENSE SUPPLY AGENCY, COLUMBUS, OHIO, FOR BIDS ON A TOTAL REQUIREMENT OF 11,116 FIRE EXTINGUISHERS, CONSISTING OF 2400 UNITS UNDER LINE ITEMS 0001 THROUGH 0005 AND AN ADDITIONAL 8,716 IDENTICAL UNITS UNDER LINE ITEMS 0006 AND 0007.

TWO BIDS WERE RECEIVED AND OPENED ON MAY 3, 1974. THE LOW BIDDER, GENERAL FIRE EXTINGUISHER CORPORATION (GENERAL), BID ONLY ON ITEMS 0001 THROUGH 0005 (2400 UNITS) IN THE AMOUNT OF $106,454.40. THE OTHER BIDDER, WALTER KIDDE AND COMPANY (KIDDE), BID "ALL OR NONE" ON THE TOTAL REQUIREMENT. ITS PRICE FOR THE FIRST 2400 UNITS WAS $136,459.20, WHILE ITS BID FOR THE 8,716 ADDITIONAL UNITS AMOUNTED TO $478,508.40. FURTHERMORE, KIDDE STATED IN ITS BID THAT:

THE UNIT PRICE OF $57.85 AND $54.90 ON THIS PROPOSAL IS CONTINGENT UPON OUR BEING AWARDED THE TOTAL REQUIREMENT OF 11,116 EA. ITEM 0001 THROUGH 0007. IF AWARD IS TO BE MADE FOR ANY LESSER QUANTITY, WE RESERVE THE RIGHT TO QUOTE A REVISED UNIT PRICE.

ALTHOUGH GENERAL WAS LOW BIDDER BY $30,000 ON ITEMS 0001 THROUGH 0005, THE CONTRACT FOR ALL 11,116 EXTINGUISHERS WAS AWARDED TO KIDDE ON JUNE 13, 1974. GENERAL WAS INFORMED OF THE REJECTION OF ITS BID BY LETTER DATED JUNE 27, IN WHICH THE AWARD TO KIDDE WAS JUSTIFIED ON THE BASIS THAT (1) GENERAL HAD NOT BID ON THE TOTAL REQUIREMENT AND (2) THAT DUE TO THE URGENCY OF THE PROCUREMENT AND IN ORDER TO PRESERVE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, THE AWARD TO KIDDE WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT. ON JULY 3 GENERAL TELEPHONED THE CONTRACTING OFFICER OBJECTING TO THE REJECTION OF ITS BID. THE CONTRACTING OFFICER AGAIN EXPLAINED THE REASONS FOR REJECTION.

WE ARE IN RECEIPT OF GENERAL'S BID PROTEST LETTER DATED JULY 8, 1974. OUR OFFICE TIME STAMP INDICATES THAT THE PROTEST WAS FILED SOMETIME BEFORE NOON ON JULY 12, 1974. OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS (4 C.F.R. SEC. 20.2(A)) STIPULATE THAT BID PROTESTS MUST BE FILED WITH THE GENERAL ACCOUNTING OFFICE (GAO) "NOT LATER THAN 5 DAYS AFTER THE BASIS FOR PROTEST IS KNOWN OR SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER." THE ADMINISTRATIVE REPORT SUGGESTS THAT GENERAL'S PROTEST SHOULD BE CONSIDERED UNTIMELY:

SINCE GENERAL WAS INFORMED NOT LATER THAN 3 JULY 1974 ***OF THE REASONS FOR REJECTING ITS BID AND THAT CLINS 0001 THROUGH 0007 OF DSA 700-74-B- 2444 WERE AWARDED TO KIDDE, IT IS VERY DOUBTFUL THAT GENERAL'S PROTEST DATED 8 JULY 1974 WAS RECEIVED IN THE GENERAL ACCOUNTING OFFICE WITHIN 5 DAYS AFTER 3 JULY 1974 AS REQUIRED BY SECTION 20.2 OF PART 20 OF TITLE 4 OF THE CODE OF FEDERAL REGULATIONS.

WE BELIEVE THAT SINCE 4 C.F.R. SEC. 20.12 DEFINES "DAYS" TO MEAN "WORKING DAYS" OF THE AGENCIES OF THE FEDERAL GOVERNMENT, JULY 4 CANNOT BE COUNTED AS A "WORK DAY," WHILE JULY 5 MUST BE SO COUNTED FOR PURPOSES OF THE 5-DAY LIMITATION. THEREFORE THE PROTEST WAS "FILED" IN THIS OFFICE ON THE 6TH DAY. HOWEVER, SINCE THE PROTEST RAISES ISSUES WITH RESPECT TO THE INTERPRETATION OF PARAGRAPH 10(C) OF SF 33A AND A DECISION ON THE ISSUES RAISED MAY BE SIGNIFICANT TO PROCUREMENT PRACTICE AND PROCEDURES, WE WILL CONSIDER THE PROTEST, IN ACCORDANCE WITH SECTION 20.2(B) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS.

GENERAL'S PRIMARY CONTENTION REGARDING THE PROPRIETY OF THE SUBJECT PROCUREMENT CONCERNS THE FACT THAT KIDDE CONDITIONED ACCEPTANCE OF ITS BID ON BEING AWARDED THE TOTAL REQUIREMENT, WHILE ALSO RESERVING THE RIGHT TO QUOTE A REVISED UNIT PRICE IF AWARD WAS TO BE MADE FOR ANY LESSER QUANTITY. GENERAL POINTS OUT THAT CLAUSE C-15 OF THE SOLICITATION, CALLING FOR AWARD TO BE MADE ON AN "ALL OR NONE" BASIS, WAS NOT CHECKED ON SF 33A AS BEING APPLICABLE TO THE PROCUREMENT. MOREOVER, IN VIEW OF THE FACT THAT PARAGRAPH 10(C) OF FORM 33A STIPULATES (IN PART) THAT 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 ***," IT IS CONTENDED THAT KIDDE'S "ALL OR NONE" BID SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE.

THE RESPONSIVENESS OF A BID IS FOR DETERMINATION UPON THE BASIS OF THE TERMS OF THE INVITATION UNDER WHICH THE BID IS SUBMITTED. 41 COMP. GEN. 721, 723 (1962). ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 404.5, RELATING TO THE "ALL OR NONE QUALIFICATION," PROVIDES THAT "UNLESS THE INVITATION FOR BIDS SO PROVIDES, A BID IS NOT RENDERED NONRESPONSIVE BY THE FACT THAT THE BIDDER SPECIFIES THAT AWARD WILL BE ACCEPTED ONLY ON ALL, OR A SPECIFIED GROUP, OF THE ITEMS INCLUDED IN THE INVITATION FOR BIDS." SEE ALSO 41 COMP. GEN. 721, SUPRA. THE SOLICITATION IN THE INSTANT CASE CONTAINED NO PROHIBITION AGAINST BIDDING ON AN "ALL OR NONE" BASIS. THE FACT THAT CLAUSE C-15 WAS NOT APPLICABLE TO THIS PROCUREMENT IS NOT RELEVANT SINCE ITS EFFECT IS TO REQUIRE "ALL OR NONE" AWARDS IN CERTAIN INSTANCES AND ITS APPLICABILITY IS NOT NECESSARY TO AUTHORIZE SUCH AWARDS.

FURTHERMORE, IT IS WELL ESTABLISHED THAT "ALL OR NONE" BIDS MAY BE CONSIDERED FOR AWARD EVEN THOUGH NOT AUTHORIZED BY THE INVITATION TERMS. 47 COMP. GEN. 223, 232 (1967); 47 ID. 657, 661 (1968); B 175952, SEPTEMBER 8, 1972.

WE ALSO FIND GENERAL'S ARGUMENT THAT KIDDE'S BID WAS NONRESPONSIVE UNDER PARAGRAPH 10(C) OF STANDARD FORM 33A TO BE WITHOUT MERIT. THIS PARAGRAPH READS IN FULL AS FOLLOWS:

(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.

IT IS CLEAR FROM THE LANGUAGE OF THE PROVISION ITSELF THAT A BIDDER MAY SPECIFY AND BIND THE GOVERNMENT TO AWARD OF THE TOTAL QUANTITY UPON ACCEPTANCE OF A BID SO SPECIFYING. IN B-175689, AUGUST 28, 1972, WE NOTED THAT "THE PHRASE 'ALL OR NONE' (OR ITS EQUIVALENT) WHEN USED IN A BID GENERALLY EVIDENCES AN INTENTION TO ELIMINATE THE GOVERNMENT'S RIGHT TO MAKE AN AWARD 'FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED.'" THEREFORE, WE FIND NOTHING IMPROPER IN KIDDE'S STIPULATION THAT ITS BID WAS CONTINGENT ON BEING AWARDED THE TOTAL REQUIREMENT.

GENERAL NEXT OBJECTS TO THE FACT THAT KIDDE RESERVED THE RIGHT TO QUOTE A REVISED UNIT PRICE IN THE EVENT THAT AWARD WOULD BE MADE FOR ANY QUANTITY LESS THAN THE TOTAL REQUIREMENT. WE HAVE CONSISTENTLY HELD THAT SUCH A NOTATION CONSTITUTES AN "ALL OR NONE" QUALIFICATION. (SEE B-172734, SEPTEMBER 7, 1971, WHERE THE PHRASE "BIDDER RESERVES THE RIGHT TO REQUOTE SHOULD THE GOVERNMENT REDUCE THE QUANTITY OF ANY ITEM," AND B-151731, JULY 3, 1963, WHERE THE PHRASE "SHOULD A LESSER QUANTITY THAN THAT QUOTED BE DESIRED, WE REQUEST THE OPPORTUNITY OF RESUBMITTING OUR QUOTATION," WERE CONSTRUED AS "ALL OR NONE" RESTRICTIONS.) CONSEQUENTLY, KIDDE'S STATEMENT RESERVING TO IT THE RIGHT TO REQUOTE PRICES MAY PROPERLY BE CONSTRUED AS AN "ALL OR NONE" BID.

IT IS UNDISPUTED THAT THE BUYER FOR THE DEFENSE SUPPLY AGENCY ASSURED GENERAL THAT ITS BID FOR ANY QUANTITY OUT OF THE TOTAL REQUIREMENT OF FIRE EXTINGUISHERS WOULD BE ACCEPTED FOR CONSIDERATION. HOWEVER, GENERAL ALLEGES THAT HAD THE FACT THAT THE PROCUREMENT WAS ON AN "ALL OR NONE" BASIS BEEN REVEALED TO IT, "WE WOULD HAVE BID THE ENTIRE CONTRACT AND OBVIOUSLY WOULD HAVE BEEN LOW." SINCE THE SOLICITATION CONTAINED PARAGRAPH D02, WHICH STATES IN PERTINENT PART THAT "IN ADDITION TO OTHER FACTORS OFFERS WILL BE EVALUATED ON THE BASIS OF ADVANTAGES AND DISADVANTAGES TO THE GOVERNMENT THAT MIGHT RESULT FROM MAKING MORE THAN ONE AWARD (MULTIPLE AWARDS)," AND PARAGRAPH 10(C), RESERVING THE RIGHT TO MAKE AWARD FOR LESS THAN THE QUANTITY OFFERED, AND DID NOT INCLUDE PARAGRAPH C-15, REQUIRING AN "ALL OR NONE" AWARD, THE PROCUREMENT WAS NOT IN FACT LIMITED TO AN "ALL OR NONE" BASIS. CONSEQUENTLY, THE BUYER PROPERLY RESPONDED TO GENERAL'S PREBID INQUIRY AS TO THE ACCEPTABILITY OF BIDS ON LESS THAN THE ENTIRE QUANTITY.

GIVEN THE SUBSTANTIAL PRICE DISPARITY OF $30,000 BETWEEN GENERAL'S BID FOR ITEMS 0001 THROUGH 0005 AND KIDDE'S BID FOR THE SAME UNITS, GENERAL CONTENDS THAT THE CONTRACTING OFFICER SHOULD HAVE AWARDED THE FIRST FIVE ITEMS TO IT AS LOW BIDDER AND THEN, DUE TO KIDDE'S HIGHER UNIT PRICES, RESOLICITED THE REMAINING 8,716 UNITS. FURTHERMORE, IT IS CONTENDED THAT SINCE THE CONTRACTING OFFICER WAS TRYING TO FULFILL THE PROCUREMENT BY JUNE 30, 1974, HE "COULD HAVE ASKED FOR A NEGOTIATED BID."

THE CONTRACTING OFFICER REPORTS THAT SINCE ONLY KIDDE BID ON THE ENTIRE QUANTITY ON AN "ALL OR NONE" BASIS, AND ITS PRICE WAS DETERMINED REASONABLE AFTER A PRICE ANALYSIS, AWARD WAS MADE TO IT IN ORDER TO COMPLY WITH THE AWARD DATE OF JUNE 30, 1974, FOR ITEMS 6 AND 7 AS REQUIRED UNDER THE MOBILIZATION AUGMENTATION PROGRAM. IT IS HIS POSITION THAT IT WAS NOT FEASIBLE TO AWARD A CONTRACT TO GENERAL FOR ITEMS 1-5 AND RESOLICIT THE REMAINING QUANTITY BY THE JUNE 30TH DEADLINE.

WHERE, AS HERE, AN INVITATION PERMITS MULTIPLE AWARDS, IT IS A WELL SETTLED PRINCIPLE THAT AN "ALL OR NONE" BID LOWER IN THE AGGREGATE THAN ANY COMBINATION OF INDIVIDUAL BIDS AVAILABLE MAY BE ACCEPTED BY THE GOVERNMENT EVEN THOUGH A PARTIAL AWARD COULD BE MADE AT A LOWER UNIT COST. 35 COMP. GEN. 383, 385 (1956); 41 ID. 455, 458 (1962); 42 ID. 748, 749 (1963); 50 ID. 852, 857 (1971). WITH REGARD TO GENERAL'S ARGUMENT THAT THE DISPARITY IN PRICES NEVERTHELESS REQUIRED CANCELLATION, ASPR 2- 404.1(A) PROVIDES THAT THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM REQUIRES THAT AFTER BIDS HAVE BEEN OPENED AWARD MUST BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER UNLESS THERE IS A COMPELLING REASON TO CANCEL THE INVITATION. ALTHOUGH ASPR 2- 404.1(B)(VI) PROVIDES THAT UNREASONABLE PRICE IS A COMPELLING REASON JUSTIFYING CANCELLATION, THE CONTRACTING OFFICER DETERMINED THAT KIDDE'S PRICE FOR THE TOTAL QUANTITY WAS IN FACT REASONABLE.

GENERAL DISPUTES THE CONTRACTING OFFICER'S CONCLUSION WITH REGARD TO THE REASONABLENESS OF KIDDE'S PRICE AND POINTS OUT THAT THE PRICE ANALYSIS REPORT INDICATES THAT ON PREVIOUS CONTRACTS KIDDE'S PRICES WERE 40 TO 44 PERCENT HIGHER THAN THOSE OF GENERAL AND THAT KIDDE'S PRICES ON THE SUBJECT PROCUREMENT EXCEED GENERAL'S BY 27.4 PERCENT ON UNITS WITH LEVEL A/C AND ARE 30.2 PERCENT HIGHER ON COMMERCIAL PP&P UNITS.

IN ADDITION TO THE INFORMATION REFERRED TO BY THE PROTESTER, THE PRICE ANALYST ALSO POINTED OUT THAT KIDDE'S PRICE WAS OBTAINED IN A COMPETITIVE ATMOSPHERE AND THAT ITS PRICE COMPARED FAVORABLY WITH ITS BIDS ON PRIOR PROCUREMENTS. FURTHERMORE, THE CONTRACTING OFFICER NOTED THAT KIDDE HAD NOT PRODUCED THE ITEM FOR SEVERAL YEARS AND, THEREFORE, SET-UP CHARGES AND PURCHASE OF MATERIALS WOULD BE COSTS THAT GENERAL WOULD NOT INCUR SINCE IT HAD BEEN THE SOLE PRODUCER FOR 3 YEARS. MOREOVER, KIDDE WAS THE ONLY BIDDER OFFERING TO FULFILL THE GOVERNMENT'S ENTIRE NEEDS. SINCE AWARD WAS MADE ONLY AFTER THE CONTRACTING OFFICER ASCERTAINED THAT KIDDE'S PRICE WAS REASONABLE ON THE BASIS OF A PRICE ANALYSIS, WE CANNOT SAY THAT THE AWARD WAS ILLEGAL.

WE NOTE THAT AFTER BID OPENING GENERAL SOUGHT TO REVISE ITS OFFER BY BIDDING ON THE TOTAL REQUIREMENT. THE CONTRACTING OFFICER CORRECTLY DENIED GENERAL THIS REQUEST SINCE BIDDERS MAY NOT VARY THEIR BIDS AFTER BID OPENING. 40 COMP. GEN. 432 (1961); B-166482, MAY 5, 1969.

ACCORDINGLY, THE PROTEST IS DENIED.