B-182303, APR 18, 1975

B-182303: Apr 18, 1975

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"FLOATING BID" COVERING SUCCESSIVE SALES ITEMS OF IDENTICALLY DESCRIBED SURPLUS PROPERTY WAS IMPROPERLY CONSIDERED FOR AWARD OF ONE ITEM AS TO WHICH IT WAS HIGHEST BID RECEIVED. RESTRICTION AGAINST ACCEPTANCE OF QUALIFIED BIDS IS APPROPRIATE WHEN EVALUATION OF BIDS IS TO BE ACCOMPLISHED THROUGH MECHANIZED PROCESS WHICH IS NOT CAPABLE OF BEING PROGRAMMED FOR QUALIFIED BIDS. RECOMMENDATION IS MADE THAT FUTURE SOLICITATIONS SUBJECT TO MECHANIZED EVALUATION CLEARLY INFORM PROSPECTIVE BIDDERS OF THIS TYPE OF EVALUATION AND OF NECESSITY FOR INDIVIDUAL PRICING OF EACH ITEM. ALL-OR-NONE OR COMBINATION BIDS WILL NOT BE ACCEPTABLE AND WILL BE REJECTED AS NONRESPONSIVE. ALL-OR-NONE OR COMBINATION BIDS ARE NOT ACCEPTABLE AND WILL BE REJECTED AS NONRESPONSIVE UNLESS SPECIFICALLY AUTHORIZED BY THE TERMS OF THE INVITATION FOR BIDS.".

B-182303, APR 18, 1975

1. "FLOATING BID" COVERING SUCCESSIVE SALES ITEMS OF IDENTICALLY DESCRIBED SURPLUS PROPERTY WAS IMPROPERLY CONSIDERED FOR AWARD OF ONE ITEM AS TO WHICH IT WAS HIGHEST BID RECEIVED, AS INVITATION PROHIBITED BIDS CONDITIONED UPON ACCEPTANCE OR NONACCEPTANCE OF BID ON OTHER ITEMS. THEREFORE, IMPROPER AWARD SHOULD BE SET ASIDE AND AWARD MADE TO HIGH RESPONSIVE BIDDER FOR PROPERTY IN QUESTION. 2. RESTRICTION AGAINST ACCEPTANCE OF QUALIFIED BIDS IS APPROPRIATE WHEN EVALUATION OF BIDS IS TO BE ACCOMPLISHED THROUGH MECHANIZED PROCESS WHICH IS NOT CAPABLE OF BEING PROGRAMMED FOR QUALIFIED BIDS; HOWEVER, RECOMMENDATION IS MADE THAT FUTURE SOLICITATIONS SUBJECT TO MECHANIZED EVALUATION CLEARLY INFORM PROSPECTIVE BIDDERS OF THIS TYPE OF EVALUATION AND OF NECESSITY FOR INDIVIDUAL PRICING OF EACH ITEM.

LEONARD JOSEPH COMPANY:

INVITATION FOR BIDS (IFB) 41-5026, ISSUED BY THE DEFENSE PROPERTY DISPOSAL SERVICE (DPDS), OFFERED FOR SALE SOME 217 ITEMS OF DEPARTMENT OF DEFENSE SURPLUS PERSONAL PROPERTY. THE PRESENT CASE CONCERNS THE PROPRIETY OF AWARD OF ITEM 112 (MITTEN INSERTS) TO MOUNTAIN VIEW SURPLUS (MOUNTAIN VIEW).

THE IFB, ON PAGE 21, INCORPORATED BY REFERENCE THE PROVISIONS OF A DPDS PAMPHLET DATED AUGUST 1973 AND ENTITLED "SALE BY REFERENCE - INSTRUCTIONS, TERMS AND CONDITIONS APPLICABLE TO DEPARTMENT OF DEFENSE SURPLUS PERSONAL PROPERTY OFFERED FOR SALE BY DEFENSE PROPERTY DISPOSAL SERVICE." PARAGRAPH 26 OF PART 2, ON PAGE 6 OF THE PAMPHLET PROVIDED AS FOLLOWS:

"QUALIFIED, TIE-IN, ALL-OR-NONE OR COMBINATION BIDS WILL NOT BE ACCEPTABLE AND WILL BE REJECTED AS NONRESPONSIVE. THIS INCLUDES BIDS CONDITIONED UPON THE ACCEPTANCE OR NONACCEPTANCE OF BIDS ON OTHER ITEMS."

ALSO, PARAGRAPH 4, PART 1, ON PAGE 1 OF THE SAME PAMPHLET STATED THAT "TIE-IN, ALL-OR-NONE OR COMBINATION BIDS ARE NOT ACCEPTABLE AND WILL BE REJECTED AS NONRESPONSIVE UNLESS SPECIFICALLY AUTHORIZED BY THE TERMS OF THE INVITATION FOR BIDS." THE SUBJECT IFB DID NOT AUTHORIZE SUCH BIDS.

MOUNTAIN VIEW SUBMITTED A BID CONTAINING THE FOLLOWING LANGUAGE APPLICABLE TO ITEMS 107 THROUGH 117:

"ANY AMOUNT UP TO 3,600 PR. (AT) .60 $2,160.00

ANY AMOUNT UP TO 5,000 (AT) .30 "

ITEMS 107 THROUGH 117 ARE IDENTICAL IN DESCRIPTION EXCEPT THAT ITEMS 107 AND 112 COVER 3,600 PAIRS OF MITTEN INSERTS; ITEMS 108 THROUGH 111 COVER 1,800 PAIRS; AND ITEM 117 COVERS 3,051 PAIRS. MOUNTAIN VIEW WAS AWARDED ITEM 112 AT $0.60 FOR 3,600 PAIRS AS HIGH BIDDER - IT WAS NOT HIGH ON ITEM 107. LEONARD JOSEPH WAS HIGH SUCCESSFUL BIDDER ON ITEM 107 AT $0.609 PER PAIR AND APPARENT HIGH BIDDER ON ITEM 112 AT $0.559. IT PROTESTS THE AWARD OF ITEM 112 BECAUSE THE BID OF MOUNTAIN VIEW CAME WITHIN THE PROHIBITIONS QUOTED ABOVE.

THE EFFECT OF THE LANGUAGE USED BY MOUNTAIN VIEW AS TO AMOUNTS UP TO 5,000 PAIRS IS NOT IN ISSUE AND WILL NOT BE DISCUSSED. THE QUESTION FOR RESOLUTION IS WHETHER THE HIGH BID OF MOUNTAIN VIEW FOR ITEM 112 WAS RESPONSIVE TO THE INSTANT SOLICITATION.

EVALUATION OF THE BIDS SUBMITTED UNDER THE SUBJECT IFB WAS ACCOMPLISHED IN THE FOLLOWING MANNER. AS EACH BID WAS OPENED, A COMPUTER CARD WAS "PUNCHED" CONTAINING INFORMATION REGARDING THE BIDDER, THE ITEM NUMBER AND THE PRICE. AFTER CARDS HAD BEEN "PUNCHED" FOR ALL BIDS SUBMITTED, A COMPUTER PRINT-OUT WAS RUN WHICH INDICATED, BY ITEM NUMBER, ALL BIDS RANGING FROM THE HIGHEST TO THE LOWEST AND THEN THE COMPUTER PRINTED OUT THE BIDDER (BY NUMBER) WHO SUBMITTED THE HIGHEST BID FOR AN ITEM. MOUNTAIN VIEW'S BID, HOWEVER, WAS EVALUATED BY DPDS BY FIRST "PUNCHING" A CARD FOR ITEM 107 AND THEN MANUALLY COMPARING MOUNTAIN VIEW'S BID AGAINST THE OTHERS SUBMITTED FOR ITEMS 108 THROUGH 117. AS MOUNTAIN VIEW'S BID OF $0.60 WAS HIGHER THAN LEONARD JOSEPH'S FOR ITEM 112, IT WAS MANUALLY INSERTED ON THE COMPUTER PRINT-OUT AS THE HIGHEST BID.

WE MUST FIRST DETERMINE THE NATURE OF THE BID SUBMITTED BY MOUNTAIN VIEW. IN OUR OPINION, THE PROTESTED BID CAN BEST BE CLASSIFIED AS A "FLOATING BID." A "FLOATING BID" IS A SINGLE BID WHICH IS SUBMITTED FOR EVALUATION AGAINST OTHER BIDS, IN SUCCESSION, FOR THE ITEMS IN QUESTION (IN THIS CASE ITEMS 107 THROUGH 117) WITH A QUALIFICATION ATTACHED THERETO. IN SHORT, A "FLOATING BID" IS FIRST COMPARED FOR AWARD PURPOSES AGAINST ALL OTHER BIDS ON THE FIRST PARTICULAR ITEM (ITEM 107). IF THE "FLOATING BID" IS NOT THE HIGH BID FOR THIS ITEM, IT THEN "FLOATS" TO THE NEXT ITEM FOR COMPARISON, AND SO ON, UNTIL EITHER ALL OF THE PARTICULAR ITEMS HAVE BEEN COMPARED OR UNTIL THE QUALIFICATION ATTACHED TO THE BID HAS BECOME EFFECTIVE. THE QUALIFICATION ATTACHED TO MOUNTAIN VIEW'S BID WAS THAT MOUNTAIN VIEW WOULD ONLY TAKE ANY COMBINATION OF ITEMS UP TO 3,600 PAIRS AT A PRICE OF $0.60 OR ANY COMBINATION OF ITEMS UP TO 5,000 PAIRS AT A PRICE OF $0.30. UNDER NO CIRCUMSTANCES WOULD MOUNTAIN VIEW HAVE ACCEPTED MORE THAN 5,000 PAIRS OF MITTEN INSERTS, EVEN IF ITS BID WAS THE HIGH BID ON MORE THAN ITEM 112. THIS IS EVIDENCED BY THE SEPTEMBER 4, 1974, MEMORANDUM FOR RECORD, WRITTEN BY THE SALES CONTRACTING OFFICER WHEREIN IT IS INDICATED THAT MOUNTAIN VIEW'S REASON FOR NOT BIDDING ON EACH ITEM SEPARATELY WAS THAT IT DID NOT WANT TO TAKE THE CHANCE OF BEING AWARDED ALL OF THE ITEMS (107 THROUGH 117) AS IT ONLY WANTED 3,600 PAIRS. BY SUBMITTING A BID AS ANNOTATED ON THE BID SHEET, THIS WOULD LIMIT MOUNTAIN VIEW TO ITS DESIRED AMOUNT REGARDLESS OF THE NUMBER OF ITEMS INVOLVED.

HAVING REACHED THE CONCLUSION THAT THE BID SUBMITTED BY MOUNTAIN VIEW WAS A "FLOATING," AND THEREFORE, QUALIFIED BID, WE MUST FURTHER CONCLUDE THAT THE BID WAS NONRESPONSIVE UNDER THE TERMS AND CONDITIONS OF THE SOLICITATION. THE STATUTE GOVERNING THE DISPOSITION OF SURPLUS GOVERNMENT PROPERTY, 40 U.S.C. SEC. 484 (1970), REQUIRES THAT ADVERTISEMENTS FOR BIDS BE MADE THROUGH SUCH METHODS, AND ON SUCH TERMS, AS SHALL PERMIT FULL AND FREE COMPETITION WHICH IS CONSISTENT WITH THE VALUE AND NATURE OF THE PROPERTY, AND THAT AWARD BE MADE TO THE RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE IFB, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THIS REQUIREMENT FOR AWARD ON THE BASIS OF THE MOST ADVANTAGEOUS BID TO IFB. THESE PROVISIONS REQUIRE ACCEPTANCE OF THE HIGHEST RESPONSIVE BID SUBMITTED BY A RESPONSIBLE BIDDER IN RESPONSE TO THE IFB. B-169550, JUNE 30, 1970.

NOR CAN WE CONCLUDE THAT THE DOCTRINE OF ESTOPPEL IS APPLICABLE TO THIS CASE TO PRECLUDE THE SETTING ASIDE OF THE AWARD TO MOUNTAIN VIEW. IN THE MATTER OF FINK SANITARY SERVICE, INC., 53 COMP. GEN. 502 (1974), OUR OFFICE, CITING EMECO INDUSTRIES, INC. V. UNITED STATES, 208 CT. CL. 1006 (1973), AND UNITED STATES V. GEORGIA-PACIFIC COMPANY, 421 F.2D 92 (9TH CIR. 1970), NOTED THAT FOUR ELEMENTS MUST BE PRESENT TO ESTABLISH AN ESTOPPEL. THESE WERE:

(1) THE PARTY TO BE ESTOPPED MUST KNOW THE FACTS;

(2) HE MUST INTEND THAT HIS CONDUCT SHALL BE ACTED ON OR MUST SO ACT THAT THE PARTY ASSERTING THE ESTOPPEL HAS A RIGHT TO BELIEVE IT IS SO INTENDED;

(3) THE LATTER MUST BE IGNORANT OF THE TRUE FACTS;

(4) HE MUST RELY ON THE FORMER'S CONDUCT TO HIS INJURY."

COUNSEL FOR DPDS HAS ARGUED, PERSUASIVELY WE THINK, THAT ONE OF THE ESSENTIAL ELEMENTS FOR AN ESTOPPEL IS MISSING. THE ELEMENT REFERRED TO IS THAT THE PARTY ASSERTING THE ESTOPPEL MUST BE IGNORANT OF THE TRUE FACTS. IN THIS CASE, COUNSEL FOR DPDS CONTENDS THAT MOUNTAIN VIEW MUST BE CHARGED WITH NOTICE OF THE BIDDING REQUIREMENTS CONTAINED IN THE SOLICITATION, AND OF COURSE, THAT IT HAD ACTUAL KNOWLEDGE OF THE RESTRICTIONS WHICH IT PLACED ON ITS BID FOR ITEMS 107 THROUGH 117. WE AGREE WITH COUNSEL ON THIS MATTER.

ACCORDINGLY, WE AGREE WITH THE PROCURING ACTIVITY'S VIEW THAT THE AWARD TO MOUNTAIN VIEW OF ITEM 112 SHOULD BE SET ASIDE AND AWARD MADE TO LEONARD JOSEPH AS THE HIGHEST RESPONSIVE BIDDER FOR THE ITEM IN QUESTION.

WE REACH THIS CONCLUSION NOT UNMINDFUL OF THE MANNER IN WHICH SURPLUS PROPERTY SALES ARE CONDUCTED. DPDS HAS STATED THAT THE RESTRICTION AGAINST ACCEPTANCE OF QUALIFIED BIDS WAS PLACED UPON ITS SEALED BID SALES AFTER ITS BID INVITATION AND CONTRACTING PROCESSES WERE MECHANIZED. THIS RESTRICTION WAS NECESSARY DUE TO THE FACT THAT THE MECHANIZED BID EVALUATION PROCESS COULD NOT BE PROGRAMMED TO INCLUDE BIDS QUALIFIED IN ONE MANNER OR ANOTHER AT THAT TIME. SINCE THEN, DPDS HAS DETERMINED THAT THE INCREASE IN PROCUREMENT EFFICIENCY REALIZED THROUGH THE MECHANIZED PROCESS OUTWEIGHS ANY ALLEGED HARM TO THOSE FIRMS DESIRING TO SUBMIT QUALIFIED BIDS AND THAT TO DATE, THERE HAS BEEN NO DISCERNABLE ADVERSE EFFECT UPON COMPETITION. WHILE OUR OFFICE HAS NO OBJECTION AGAINST THE UTILIZATION OF THIS MECHANIZED PROCESS, WE ARE OF THE OPINION THAT BIDDERS SHOULD BE EXPLICITLY INFORMED OF THE MANNER IN WHICH TO SUBMIT THEIR BIDS. THEREFORE, WE RECOMMEND THAT FUTURE SOLICITATIONS SUBJECT TO THIS MECHANIZED PROCESS CLEARLY INFORM PROSPECTIVE BIDDERS OF THE MANNER IN WHICH BIDS WILL BE ELECTRONICALLY EVALUATED FOR AWARD AND EXPLAIN THE NECESSITY FOR BIDDING A DISTINCT INDIVIDUAL PRICE FOR EACH ITEM BEING COMPETED FOR.

CONSEQUENTLY, THE PROTEST IS SUSTAINED.