B-183282, MAY 14, 1975

B-183282: May 14, 1975

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WHICH IS ACCEPTED INDUSTRY STANDARD FOR EFFICIENT DREDGING. WAS IMPROPER. TENDER WAS FOUND TO ONLY HAVE 110 HORSEPOWER. REJECTION OF BID AS NONRESPONSIVE WAS IMPROPER BECAUSE BID. WAS RESPONSIVE AND ABILITY OF BIDDER TO PERFORM IN ACCORDANCE WITH SPECIFICATION IS MATTER OF RESPONSIBILITY. BIDS WERE OPENED ON JANUARY 23. AWARD WAS MADE TO JAMES ON FEBRUARY 21. HEREBY ARE. ORDERED AND DIRECTED TO TAKE WHATEVER ACTION IS NECESSARY TO INSURE THAT T.L. WHICHEVER IS SOONER. IT IS THE PRACTICE OF OUR OFFICE NOT TO RENDER A DECISION ON THE MERITS OF A PROTEST WHERE THE ISSUES INVOLVED ARE LIKELY TO BE DISPOSED OF IN LITIGATION BEFORE A COURT OF COMPETENT JURISDICTION. AN EXCEPTION TO THIS GENERAL POLICY IS THAT OUR OFFICE WILL RENDER A DECISION ON THE MERITS IN CIRCUMSTANCES WHERE THE COURT EXPRESSES AN INTEREST IN RECEIVING OUR DECISION. 52 COMP.

B-183282, MAY 14, 1975

1. REJECTION OF BID FOR LACK OF EFFICIENCY UNDER IFB STATING THAT CONTRACTOR MUST "EFFICIENTLY" DREDGE TO CERTAIN WIDTH AND DEPTH AND WHICH CONTRACTING OFFICER CONTENDS MEANT AT NO GREATER SWING ANGLE THAN 45 DEGS., WHICH IS ACCEPTED INDUSTRY STANDARD FOR EFFICIENT DREDGING, WAS IMPROPER, SINCE DETAILED SCHEME FOR EVALUATION OF BIDS IN IFB DID NOT INCLUDE EFFICIENCY. 2. WHERE BIDDER OFFERED TO FURNISH DREDGE TENDER OF 200 HORSEPOWER IN ITS BID AND UPON SUBSEQUENT INSPECTION BY PROCURING ACTIVITY, TENDER WAS FOUND TO ONLY HAVE 110 HORSEPOWER, REJECTION OF BID AS NONRESPONSIVE WAS IMPROPER BECAUSE BID, ON ITS FACE, WAS RESPONSIVE AND ABILITY OF BIDDER TO PERFORM IN ACCORDANCE WITH SPECIFICATION IS MATTER OF RESPONSIBILITY, PROOF OF WHICH MAY BE SUBMITTED AFTER BID OPENING AND UP TO TIME OF AWARD.

M-S AND ASSOCIATES:

ON DECEMBER 19, 1974, THE UNITED STATES ARMY CORPS OF ENGINEERS, VICKSBURG, MISSISSIPPI, ISSUED INVITATION FOR BIDS (IFB) NO. DACW38-75 B- 0068 FOR THE HIRE OF ONE FULLY OPERATED CUTTERHEAD, HYDRAULIC PIPELINE DREDGE AND ATTENDANT PLANT TO BE USED IN REMOVING SEDIMENT FROM THE TALLAHATCHIE RIVER.

THE LOW BIDDER, M-S AND ASSOCIATES (M-S) HAS PROTESTED THE REJECTION OF ITS BID AND THE AWARD OF THE CONTRACT TO THE SECOND LOW BIDDER, T.L. JAMES & COMPANY, INC. (JAMES).

BIDS WERE OPENED ON JANUARY 23, 1975, AND AWARD WAS MADE TO JAMES ON FEBRUARY 21, 1975, FOLLOWING THE REJECTION OF M-S'S BID. AFTER RECEIVING NOTICE OF THE AWARD, M-S PROTESTED TO OUR OFFICE, WHICH PROCEEDED TO OBTAIN THE INFORMATION NECESSARY TO RENDER A DECISION IN ACCORDANCE WITH OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS (4 C.F.R. PART 20 (1974)). ON APRIL 3, 1975, THE CORPS OF ENGINEERS ISSUED A NOTICE TO PROCEED TO JAMES. ON APRIL 4, 1975, M-S INSTITUTED CIVIL ACTION NO. FS-75 -46-C IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF ARKANSAS, FORT SMITH DIVISION (M-S AND ASSOCIATES, A JOINT VENTURE V. DEPARTMENT OF THE ARMY, ET AL.). THE COMPLAINT REQUESTED A TEMPORARY RESTRAINING ORDER (TRO) AGAINST THE DEFENDANTS PROCEEDING WITH PERFORMANCE UNDER THE CONTRACT UNTIL OUR OFFICE COULD RULE ON THE PROTEST. LATER THE SAME DAY, THE COURT GRANTED THE TRO REQUESTED BY M-S AND ON APRIL 25, 1975, AFTER A HEARING ON A MOTION FILED BY M-S FOR PRELIMINARY INJUNCTION AND A MOTION BY THE DEFENDANTS TO DISSOLVE THE TRO, THE COURT ISSUED A PRELIMINARY INJUNCTION WHICH ORDERED:

"*** THAT THE DEFENDANTS BE, AND HEREBY ARE, ORDERED AND DIRECTED TO TAKE WHATEVER ACTION IS NECESSARY TO INSURE THAT T.L. JAMES & COMPANY, INC. DOES NOT BEGIN WORK UNDER THE CONTRACT AWARDED UPON INVITATION FOR BID DACW38-75-B-0068 PENDING FURTHER ORDER OF THIS COURT, OR UNTIL TEN (10) DAYS AFTER RECEIPT BY THIS COURT OF THE DECISION AND REPORT TO BE MADE BY THE COMPTROLLER GENERAL ON THE PROTEST NO. B-183282, WHICHEVER IS SOONER;

IT IS THE PRACTICE OF OUR OFFICE NOT TO RENDER A DECISION ON THE MERITS OF A PROTEST WHERE THE ISSUES INVOLVED ARE LIKELY TO BE DISPOSED OF IN LITIGATION BEFORE A COURT OF COMPETENT JURISDICTION. NORTON CORP. ET AL., 53 COMP. GEN. 730 (1974). AN EXCEPTION TO THIS GENERAL POLICY IS THAT OUR OFFICE WILL RENDER A DECISION ON THE MERITS IN CIRCUMSTANCES WHERE THE COURT EXPRESSES AN INTEREST IN RECEIVING OUR DECISION. 52 COMP. GEN. 706 (1973) AND 53 COMP. GEN. 522 (1974). AS THIS IS THE CASE IN THE INSTANT MATTER, WE WILL CONSIDER THE PROTEST ON ITS MERITS.

THE IFB CONTEMPLATED A CONTRACT FOR THE DREDGING OF APPROXIMATELY 13 MILES OF THE TALLAHATCHIE RIVER WITH THE CONTRACTOR TO BE PAID ON AN HOURLY BASIS. THE IFB STATED THAT:

"BIDS WILL BE EVALUATED AND AWARD WILL BE MADE ON THE BASIS OF EMPLOYMENT OF THE PLANT WHICH, IN THE OPINION OF THE CONTRACTING OFFICER, WILL RESULT IN THE LOWEST OVERALL COST TO THE GOVERNMENT FOR THE EQUIPMENT."

FOR THE PURPOSE OF EVALUATING BIDS, THE IFB CONTAINED A CHART SHOWING THE ESTIMATED DREDGE OUTPUT FOR A WORKING DAY (20 HOURS PUMPING TIME) BASED ON THE HORSEPOWER OF THE DREDGE AND THE SIZE OF THE DISCHARGE PIPE. ESTIMATED QUANTITIES WERE SHOWN FOR A 14-INCH OR A 16-INCH DISCHARGE PIPE WITH THE NOTATION THAT IF A LARGER DISCHARGE PIPE WAS OFFERED IT WOULD BE EVALUATED AT 16 INCHES. FURTHER, THE IFB STATED THAT, FOR EVALUATION PURPOSES, IT WOULD BE CONSIDERED THAT THE DREDGE, DURING THE COURSE OF THE CONTRACT, WOULD BE REQUIRED TO MOVE 2,000,000 CUBIC YARDS OF MATERIAL. BASED ON THESE FACTORS AND THE BID PRICE PER HOUR, THE TOTAL COST FOR ITEM A (OPERATION OF THE DREDGE AND ATTENDANT PLANT) WAS COMPUTED. ITEM B WAS FOR FURNISHING ONE CRAWLER-TYPE TRACTOR ON AN HOURLY BASIS AND 4,000 HOURS WAS THE ESTIMATED QUANTITY USED TO EVALUATE THE BIDS. ITEM C WAS THE FURNISHING OF ONE DRAGLINE AND THE BID WAS EVALUATED THE SAME AS ITEM B, ASSUMING 4,000 HOURS OF OPERATION. ITEM D CALLED FOR A LUMP-SUM BID FOR DESIGNING, BUILDING, OPERATING AND MAINTAINING THE CONTROL STRUCTURES AND WEIRS AND EFFLUENT RETURNS AND ITEM E WAS A LUMP-SUM BID FOR MOBILIZATION AND DEMOBILIZATION. THE LOW BIDDER WAS TO BE DETERMINED BY THE ADDITION OF ALL FIVE ITEMS.

THE FOLLOWING IS THE CORPS' EVALUATION OF M-S'S AND JAMES' BIDS:

T.L. JAMES M-S & ASSOCIATES

PUMP DISCHARGE DIAMETER 16" 18"

BRAKE HORSEPOWER 1440 1325

CU. YDS. PER 23-HR. DAY 10,376 10,093

ESTIMATED CU. YDS. 2,000,000 2,000,000

ESTIMATED WORKDAYS 192.75 198.16

ESTIMATED HOURS 4,433.25 4,557.68

BID PRICE PER HOUR

(ITEM A) $ 255.70 $ 225.00

TOTAL DREDGE COST

(ITEM A) $1,133,582.03 $1,025,478.00

ITEM B $ 127,200.00 $ 140,000.00

ITEM C $ 172,800.00 $ 180,000.00

ITEM D $ 60,000.00 $ 140,000.00

ITEM E $ 175,510.00 $ 100,000.00

TOTAL EVALUATED BID $1,669,092.03 $1,585,478.00

BASED ON THE CALCULATION, M-S WAS THE LOW EVALUATED BIDDER. THE CORPS PROCEEDED TO INSPECT THE EQUIPMENT OF M-S PRIOR TO MAKING AWARD. THIS WAS IN ACCORDANCE WITH THE IFB WHICH PROVIDED:

"IF THE BID PRICE AND THE DESCRIPTION OF THE DREDGE AND ATTENDANT PLANT IN THE BID FORM INDICATE THAT AWARD MAY BE MADE AND LEASE ENTERED INTO, THE CONTRACTING OFFICER OR HIS DULY AUTHORIZED REPRESENTATIVE WILL MAKE AN INSPECTION OF THE DREDGE AND ATTENDANT PLANT OFFERED FOR LEASE AT ANY POINT DESIGNATED BY THE BIDDER TO DETERMINE WHETHER OR NOT THE DREDGE AND ATTENDANT PLANT IS SUITABLE AND IN SATISFACTORY CONDITION TO PERFORM THE WORK. THE CONTRACTOR SHALL HAVE THE DREDGE AND ATTENDANT PLANT, AS BID UNDER ITEM A, AVAILABLE FOR INSPECTION AT ANY TIME DESIGNATED BY THE CONTRACTING OFFICER AFTER THE OPENING OF THE BIDS. FAILURE OF THE DREDGE AND ATTENDANT PLANT TO COMPLY WITH THE BID SPECIFICATIONS AT THE TIME OF THIS INSPECTION WILL REQUIRE REJECTION OF THE BID. THE BIDDER SHALL STATE IN THE BID FORM WHERE THE DREDGE AND ATTENDANT PLANT MAY BE INSPECTED."

AT THE FEBRUARY 5, 1975, INSPECTION, THE M-S DREDGE "LITTLE ROCK" AND THE TWO DREDGE TENDERS WERE EXAMINED. IT WAS DETERMINED THAT THE "LITTLE ROCK" WAS TOO SMALL TO DREDGE A 150-FOOT WIDE CUT AT A DEPTH 15 FEET AT A SWING FROM THE CENTERLINE OF 45 DEGS. THE "LITTLE ROCK" COULD DREDGE A CUT 116.4 FEET WIDE AT A SWING ANGLE OF 45 DEGS. ALSO, ONE OF THE TENDERS OFFERED ONLY HAD A 110-HORSEPOWER ENGINE WHILE THE SPECIFICATIONS CALLED FOR IT TO BE AT LEAST 200 HORSEPOWER.

THEREAFTER, THE CONTRACTING OFFICER ORDERED THE DREDGE AND PLANT OF JAMES BE INSPECTED. THE INSPECTION REPORT ON JAMES' DREDGE AND PLANT WAS ACCEPTABLE.

THE CONTRACTING OFFICER DETERMINED THE BID OF M-S TO BE NONRESPONSIVE AND MADE AN AWARD TO JAMES ON FEBRUARY 21, 1975.

THE REJECTION OF THE M-S BID WAS BASED MAINLY ON THE FACT THAT THE DREDGE "LITTLE ROCK," ACCORDING TO THE CONTRACTING OFFICER, FAILED TO MEET THE IFB TECHNICAL PROVISIONS REQUIREMENT WHICH STATED:

"THE DREDGE SHALL BE CAPABLE OF EFFICIENTLY DREDGING A CUT 150 FEET WIDE TO A DEPTH OF 15 FEET."

THE CONTRACTING OFFICER STATES THAT "EFFICIENTLY," AS USED IN THIS CONTEXT, MEANT AT NO GREATER A SWING ANGLE THAN 45 DEGS. AND SINCE THE "LITTLE ROCK" WOULD HAVE TO SWING OVER 60 DEGS. TO MAKE THE REQUIRED CUT, IT WAS DETERMINED THAT IT WAS INEFFICIENT AND WOULD, THEREFORE, ACTUALLY COST THE GOVERNMENT MORE TO HAVE THE CONTRACT PERFORMED BY M-S THAN BY JAMES BECAUSE PAYMENT FOR THE WORK WAS TO BE MADE ON AN HOURLY BASIS.

THE CONTRACTING OFFICER SUPPORTS THIS DECISION BY STATING THAT THE ONLY WAY M-S COULD MAKE THE REQUIRED CUT WHILE SWINGING AT 45 DEGS. WOULD BE TO MAKE TWO PASSES DOWN THE CHANNEL OR TO UNDERCUT THE BANKS AND RELY ON CAVING-IN OF THE BANKS TO OBTAIN THE REQUIRED CUT. BOTH OF THESE METHODS WOULD REQUIRE ADDITIONAL TIME INCREASING THE COST TO THE GOVERNMENT.

M-S HAS PROTESTED THAT ITS BID WAS REJECTED BECAUSE OF THE FAILURE TO COMPLY WITH AN UNDISCLOSED BID EVALUATION FACTOR, NAMELY THAT A 45 DEGS. SWING EQUALS EFFICIENT DREDGING. THE CORPS TAKES THE POSITION THAT IT IS WELL KNOWN IN THE INDUSTRY THAT 45 DEGS. IS THE GREATEST ANGLE FROM THE CENTERLINE THAT PERMITS EFFICIENT DREDGING AND AS THE SWING ANGLE BECOMES GREATER THAN 45 DEGS EFFICIENCY DROPS.

AS STATED PREVIOUSLY, THE IFB CONTAINED A DETAILED SCHEME BY WHICH BIDS WOULD BE EVALUATED FOR AWARD. BASED ON THIS EVALUATION, M-S WAS THE LOW BIDDER BY $83,614.03. HOWEVER, THE CONTRACTING OFFICER REJECTED THIS LOW BID ON THE BASIS THAT AN "INEFFICIENT" METHOD OF DREDGING WOULD HAVE TO BE EMPLOYED FOR THE "LITTLE ROCK" TO MAKE THE REQUIRED CUT. IN THAT REGARD, THE CONTRACTING OFFICER CONTENDS THAT 40 DEGS. - 45 DEGS. IS THE ACCEPTED INDUSTRY STANDARD FOR EFFICIENT DREDGING AND HAS SUPPLIED STATEMENTS FROM PERSONS IN INDUSTRY TO THAT EFFECT. NEVERTHELESS, IT IS NOT APPARENT FROM THE WAY "EFFICIENTLY" IS USED IN THE TECHNICAL PROVISIONS THAT THE TERM WAS INTENDED TO HAVE THAT LIMITED A MEANING. INDICATED ABOVE, THE IFB PROVIDED A DETAILED SCHEME FOR THE EVALUATION OF BIDS WHICH DID NOT INCLUDE A COST FACTOR FOR EFFICIENCY. THEREFORE, REJECTION OF THE BID FOR LACK OF EFFICIENCY WAS IMPROPER. IN THAT CONNECTION, AFTER THE PROTEST WAS FILED BY M-S, THE CORPS MADE VARIOUS COST COMPARISONS TO SHOW THAT BY TAKING THE 45 DEGS. ANGLE OF DREDGING INTO CONSIDERATION, THE BID OF JAMES RESULTED IN THE LOWEST COST TO THE GOVERNMENT. HOWEVER, THESE COMPARISONS MAY NOT BE USED TO JUSTIFY THE REJECTION OF M-S'S BID. IF COST FACTORS OTHER THAN THE BID PRICE ARE TO BE CONSIDERED IN THE EVALUATION OF BIDS, THOSE FACTORS MUST BE IDENTIFIED BOTH QUALITATIVELY AND QUANTITATIVELY IN THE IFB. B-172252, MARCH 23, 1971.

THE SECOND BASIS FOR THE REJECTION OF M-S'S BID WAS THAT ONE OF THE DREDGE TENDERS INSPECTED WAS UNDERPOWERED. AT THE TIME OF THE INSPECTION, M-S ADVISED THE INSPECTORS THAT THE ENGINES IN THE TENDER WOULD BE REMOVED STARTING THE NEXT DAY AND REPLACED WITH LARGER ENGINES WHICH WOULD HAVE A HORSEPOWER IN EXCESS OF THE REQUIRED 200. THE CONTRACTING OFFICER DECIDED TO REJECT THE BID OF M-S PURSUANT TO THE CLAUSE RELATING TO INSPECTION WHICH STATED THAT FAILURE OF THE EQUIPMENT TO MEET THE SPECIFICATIONS AT THE TIME OF INSPECTION WILL RESULT IN REJECTION OF THE BID.

WE HAVE HELD THAT THE TEST TO BE APPLIED IN DETERMINING THE RESPONSIVENESS OF A BID IS WHETHER THE BID AS SUBMITTED IS AN OFFER TO PERFORM, WITHOUT EXCEPTION, THE EXACT THING CALLED FOR IN THE IFB AND WILL BIND THE CONTRACTOR TO PERFORM IN ACCORDANCE WITH THE TERMS OF THE IFB UPON ACCEPTANCE. UNLESS SOMETHING ON THE FACE OF THE BID LIMITS, REDUCES, OR MODIFIES THE OBLIGATION OF THE PROSPECTIVE CONTRACTOR TO PERFORM IN ACCORDANCE WITH THE TERMS OF THE IFB, IT IS RESPONSIVE. 48 COMP. GEN. 685 (1969) AND 49 COMP. GEN. 553 (1970). IN THE PRESENT CASE, M-S OFFERED TO MEET ALL THE SPECIFICATIONS AS EVIDENCED BY ITS BID. IT TOOK NO EXCEPTION TO THE 200-HORSEPOWER REQUIREMENT IN ITS BID AND, THEREFORE, ITS BID WAS RESPONSIVE.

AS TO WHETHER M-S HAD A TENDER OF 200 HORSEPOWER WAS A MATTER OF RESPONSIBILITY. EVIDENCE OF RESPONSIBILITY MAY BE SUBMITTED AFTER BID OPENING AND UP TO THE TIME OF AWARD. THEREFORE, THE FACT THAT M-S DID NOT HAVE A TENDER OF SUFFICIENT POWER AT THE TIME OF INSPECTION DID NOT REQUIRE REJECTION OF ITS BID, ESPECIALLY IN VIEW OF THE STATEMENT THAT THE ENGINES WOULD BE SWITCHED BEGINNING THE NEXT DAY. B-172252, SUPRA.

IN THE CIRCUMSTANCES, THE CONTRACT WITH JAMES SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THE PROCUREMENT RESOLICITED UNDER TERMS CLEARLY SETTING FORTH THE EVALUATION FACTORS.