B-216615, FEB 19, 1985, 85-1 CPD 211

B-216615: Feb 19, 1985

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NOTATIONS DIGEST: BIDS WHICH CONTAIN "N/C" (NO CHARGE) OR SIMILAR NOTATIONS INSTEAD OF DOLLAR PRICES FOR CERTAIN ITEMS IN THE SCHEDULE ARE RESPONSIVE. THE PROCUREMENT WAS FOR THE ACQUISITION OF AN INDEFINITE QUANTITY OF PERSONAL COMPUTER. BACKGROUND THE ESTIMATED RANGE OF PURCHASES FOR THE FIRST 12 MONTHS WAS FROM 75 TO 350 MICROCOMPUTER SYSTEMS. EACH CONTRACT LINE ITEM WAS ASSIGNED A WEIGHTED VALUE THAT REFLECTED THE ESTIMATED QUANTITIES OF THAT ITEM THE AGENCY EXPECTED TO ORDER FOR SYSTEM CONFIGURATION PURPOSES. IF THERE IS NO PRICE ASSOCIATED WITH THE ITEM. THE FOLLOWING CLAUSE WAS ADDED TO THE IFB BY AMENDMENT. OTHER THAN A DOLLAR COST WILL INVALIDATE THE ENTIRE BID. ...". WHICH WAS REJECTED AS NONRESPONSIVE BECAUSE THE FIRM HAD INSERTED "N/C" NOTATIONS FOR NINE CONTRACT LINE ITEMS INSTEAD OF A DOLLAR COST.

B-216615, FEB 19, 1985, 85-1 CPD 211

BIDS - RESPONSIVENESS - "NO-CHARGE", ETC. NOTATIONS DIGEST: BIDS WHICH CONTAIN "N/C" (NO CHARGE) OR SIMILAR NOTATIONS INSTEAD OF DOLLAR PRICES FOR CERTAIN ITEMS IN THE SCHEDULE ARE RESPONSIVE, BECAUSE SUCH NOTATIONS CLEARLY EQUATE WITH ZERO DOLLAR COSTS, AND THEREBY INDICATE THE BIDDER'S AFFIRMATIVE INTENT TO BE OBLIGATED TO PROVIDE THE ITEMS AT NO CHARGE TO THE GOVERNMENT.

SPECTRUM LEASING CORPORATION:

SPECTRUM LEASING CORPORATION PROTESTS THE AWARD OF A CONTRACT TO ISYX, INC. UNDER INVITATION FOR BIDS (IFB) NO. NA-84-IFB-00143, ISSUED BY THE DEPARTMENT OF COMMERCE. THE PROCUREMENT WAS FOR THE ACQUISITION OF AN INDEFINITE QUANTITY OF PERSONAL COMPUTER, SOFTWARE, AND PERIPHERAL COMPONENTS IN VARIOUS CONFIGURATIONS TO SUPPLEMENT EXISTING AUTOMATIC DATA PROCESSING (ADP) SYSTEMS, WITH THE RIGHT OF THE GOVERNMENT TO EXTEND THE TERM OF THE CONTRACT UP TO A TOTAL OF 36 MONTHS. SPECTRUM COMPLAINS THAT THE AGENCY IMPROPERLY REJECTED ITS BID AS NONRESPONSIVE BECAUSE THE FIRM HAD INSERTED "N/C" (NO CHARGE) NOTATIONS FOR CERTAIN CONTRACT LINE ITEMS, IN APPARENT DEROGATION OF AN IFB PROVISION WHICH REQUIRED BIDDERS TO PROVIDE DOLLAR COSTS FOR THESE ITEMS. WE SUSTAIN THE PROTEST.

BACKGROUND

THE ESTIMATED RANGE OF PURCHASES FOR THE FIRST 12 MONTHS WAS FROM 75 TO 350 MICROCOMPUTER SYSTEMS. EACH CONTRACT LINE ITEM WAS ASSIGNED A WEIGHTED VALUE THAT REFLECTED THE ESTIMATED QUANTITIES OF THAT ITEM THE AGENCY EXPECTED TO ORDER FOR SYSTEM CONFIGURATION PURPOSES. FOR EXAMPLE, FOR EVERY 50 BASIC SYSTEMS (PERSONAL COMPUTERS AND INTERNAL DISK DRIVE/CONTROLLERS), THE AGENCY EXPECTED TO ORDER 10 PARALLEL PORTS, 10 SERIAL PORTS, 5 CLOCK/CALENDAR BOARDS, 4 FILE COMMANDS, AND ESTIMATED QUANTITIES OF OTHER SUCH PERIPHERAL COMPONENTS.

THE IFB PROVIDED AT CLAUSE B.2.1, IN PART, THAT:

"... ALL MANDATORY ITEMS OFFERED MUST BE LISTED IN THE UNIT PRICE TABLES. IF THERE IS NO PRICE ASSOCIATED WITH THE ITEM, N/C (NO CHARGE) SHALL BE INSERTED. ..."

HOWEVER, BECAUSE THE AGENCY, AS IT STATES, DESIRED THE FLEXIBILITY TO ORDER INDIVIDUAL COMPONENTS ALONG WITH BASIC SYSTEMS SO AS TO BE ABLE TO CONFIGURE COMPLETE SYSTEMS AS IT SAW FIT, THE FOLLOWING CLAUSE WAS ADDED TO THE IFB BY AMENDMENT, WHICH PROVIDED IN PERTINENT PART:

C12. SPECIAL PRICING INSTRUCTION

THE OFFEROR MUST SHOW A PRICE FOR EACH CONTRACT LINE ITEM BEING EVALUATED ... ANY ENTRY ... OTHER THAN A DOLLAR COST WILL INVALIDATE THE ENTIRE BID. ..."

SPECTRUM SUBMITTED THE APPARENT THIRD LOW BID, WHICH WAS REJECTED AS NONRESPONSIVE BECAUSE THE FIRM HAD INSERTED "N/C" NOTATIONS FOR NINE CONTRACT LINE ITEMS INSTEAD OF A DOLLAR COST. THE APPARENT LOW BID WAS REJECTED FOR ESSENTIALLY THE SAME REASON, IN THAT THE BIDDER HAD INSERTED "NSP" (NOT SEPARATELY PRICED) NOTATIONS FOR SEVERAL ITEMS. THE APPARENT SECOND LOW BID WAS REJECTED AS NONRESPONSIVE BECAUSE THE BIDDER HAD FAILED TO SUBMIT A BID ON ALL ITEMS, THAT IS, HAD LEFT BLANK SEVERAL SPACES TO INSERT A PRICE. THE AGENCY THEN AWARDED THE CONTRACT TO ISYX, WHICH WAS FOURTH LOW, AS THE REMAINING LOW RESPONSIVE, RESPONSIBLE BIDDER. /1/

SPECTRUM CONTENDS THAT IT WAS IMPROPER FOR THE AGENCY TO REJECT IT BID AS NONRESPONSIVE BECAUSE IT HAD NOT PROVIDED A DOLLAR COST FOR THE ITEMS IN QUESTION. THE FIRM ASSERTS THAT CLAUSE B.2.1 EXPRESSLY ALLOWED INDIVIDUAL ITEMS TO BE PRICED AS "N/C," AND THAT THIS PROVISION WAS NOT CONTRADICTED BY CLAUSE C12. WHEN THE TWO PROVISIONS WERE READ TOGETHER IN CONTEXT. SUPPORT FOR ITS POSITION, SPECTRUM REFERS TO PRIOR DECISIONS OF THIS OFFICE IN WHICH WE HELD THAT BIDS CONTAINING "NO CHARGE" OR SIMILAR NOTATIONS INSTEAD OF PRICES WERE RESPONSIVE, SINCE THE BIDDER WAS THEREBY AFFIRMATIVELY INDICATING ITS WILLINGNESS TO PROVIDE ITEMS OR SERVICES AT NO CHARGE OR COST TO THE GOVERNMENT.

THE AGENCY STATES THAT CLAUSE B.2.1 WAS ACCIDENTALLY LEFT IN THE IFB AND THAT IT SHOULD HAVE BEEN DELETED BECAUSE IT CONFLICTED WITH THE SPECIAL PRICING PROVISIONS OF CLAUSE C12. HOWEVER, THE AGENCY BELIEVES THAT BIDDERS WERE CLEARLY AWARE FROM THE GENERAL TENOR OF THE SOLICITATION THAT THE PROCUREMENT ENTAILED THE POSSIBLE PURCHASE OF INDIVIDUAL COMPONENTS, APART FROM COMPLETE SYSTEMS, AND THAT BIDDERS WERE ON NOTICE TO STRUCTURE THEIR BIDS IN ACCORDANCE WITH THE SPECIFIC PRICING INSTRUCTIONS OF CLAUSE C12. THE AGENCY EMPHASIZES THAT THOSE SPECIAL INSTRUCTIONS WERE INCORPORATED INTO THE IFB TO PREVENT SITUATIONS WHERE THE GOVERNMENT CONCEIVABLY COULD PURCHASE WHICH THE CONTRACTOR HAD OFFERED NO PRICE IN ITS BID. THE AGENCY CONTENDS THAT NO REASONABLE BIDDER WOULD ASSUME THAT THE CONTRACTOR WOULD BE OBLIGATED TO PROVIDE A LARGE QUANTITY OF AN ITEM TO THE GOVERNMENT AT NO CHARGE.

ANALYSIS

AS A GENERAL RULE, A BID MUST BE REJECTED AS NONRESPONSIVE IF THE BID, AS SUBMITTED, DOES NOT INCLUDE A PRICE FOR EVERY ITEM REQUESTED BY THE IFB. TELEX COMMUNICATIONS, INC., ET AL., B-212385, ET AL., JAN. 30, 1984, 84-1 CPD PARA. 127. THE REASON FOR THIS RULE IS THAT WHERE A BIDDER FAILS TO SUBMIT A PRICE FOR AN ITEM, THE BIDDER GENERALLY IS NOT OBLIGATED TO PROVIDE THAT ITEM AS PART OF THE OTHER REQUIREMENTS FOR WHICH PRICES WERE OFFERED. 52 COMP.GEN. 604 (1973); CON-CHEN ENTERPRISES, B-187795, OCT. 12, 1977, 77-2 CPD PARA. 284.

HOWEVER, AS INDICATED EARLIER, WE HAVE RECOGNIZED AN EXCEPTION TO THIS RULE. IN LIEU, OF SUBMITTING A PRICE, A BIDDER MAY INDICATE ITS INTENT TO BE OBLIGATED TO PROVIDE AN ITEM BY INSERTING IN THE APPROPRIATE SPACE IN THE BID SCHEDULE A NOTATION THAT THE ITEM WILL BE PROVIDED AT "NO COST" OR "NO CHARGE" TO THE GOVERNMENT. AARDVARK/KEITH MOVING CO., B-200680, MAR. 6, 1981, 81-1 CPD PARA. 180; YONKER, INC., B-189869, DEC. 22, 1977, 77-2 CPD PARA. 495. THE BIDDER MAY NOT LEAVE THE SPACE BLANK, BUT IT REQUIRED TO TAKE SOME AFFIRMATIVE STEP-- SUCH AS INSERTING A ZERO, THE APPROPRIATE NOTATION, OR DASHES-- TO ESTABLISH THAT IT IS AWARE OF AND WILLING TO COMMIT ITSELF TO FURNISHING THE ITEM IN QUESTION AT NO CHARGE. DYNETERIA, INC., ET AL., 54 COMP.GEN. 345 (1974), 74-2 CPD PARA. 240; AMERICAN INTERNATIONAL RENT-A-CAR, B-211326, APR. 22, 1983, 83-1 CPD PARA. 452.

WE AGREE WITH SPECTRUM THAT CLAUSES B.2.1 AND C12., WHEN READ TOGETHER IN CONTEXT, ARE NOT MUTUALLY CONTRADICTORY. BOTH CLAUSES REQUIRE BIDDERS TO INSERT A PRICE FOR ALL CONTRACT LINE ITEMS BEING EVALUATED. CONSISTENT WITH OUR PRIOR DECISIONS, WE BELIEVE THAT THE "N/C" NOTATIONS INSERTED BY SPECTRUM CLEARLY EQUATE WITH ZERO DOLLAR COSTS, THE SAME AS IF SPECTRUM HAD OFFERED "$0" OR A PURELY NOMINAL AMOUNT. THAT IS, THEY REPRESENT THE FIRM'S AFFIRMATIVE INTENT TO OBLIGATE ITSELF TO PROVIDE THE NINE ITEMS IN QUESTION AT NO COST TO THE GOVERNMENT. IN YONKER, INC., SUPRA, THE APPLICABLE PROVISION STATED THAT THE BIDDER MUST "QUOTE" ON ALL ITEMS OF THE SCHEDULE FOR WHICH A BID WAS SUBMITTED. WE HELD THAT THE WORD "QUOTE" DID NOT REQUIRE THAT A SPECIFIC PRICE BE PLACED NEXT TO EACH ITEM, NOR DID IT PRECLUDE THE USE OF AN ACCEPTABLE SYMBOL UNAMBIGUOUSLY INDICATING NO CHARGE OR COST. SIMILARLY, IN AARDVARK/KEITH MOVING COMPANY, SUPRA, THE APPLICABLE PROVISION REQUIRED BIDDERS TO "BID" ON ALL ITEMS OR SUBITEMS; WE HELD THAT AN ITEM COULD BE "BID" AT NO CHARGE TO THE GOVERNMENT. WE DO NOT BELIEVE THAT THE PRESENT SITUATION IS FUNDAMENTALLY DIFFERENT.

FURTHERMORE, WE NOTE THAT SPECTRUM ONLY INSERTED "N/C" NOTATIONS FOR NINE CONTRACT LINE ITEMS OUT OF A TOTAL REQUIREMENT FOR SOME SEVENTY VARIOUS SYSTEMS AND COMPONENTS. THE NINE ITEMS IN QUESTION ARE ALL PERIPHERAL COMPONENTS SUCH AS PARALLEL PORTS, SERIAL PORTS, CLOCKS/CALENDAR BOARDS, PERSONAL EDITORS, FIXED DISK ORGANIZERS, AND FILE COMMANDS. FROM AN EXAMINATION OF ISYX'S BID, IT IS OBVIOUS THAT THESE PARTICULAR COMPONENTS ARE RELATIVELY INSIGNIFICANT ITEMS GIVEN THE TOTAL SCOPE AND COST OF THE PROCUREMENT, SINCE THE UNIT PRICES ISYX OFFERED FOR THEM ONLY RANGE FROM $28.00 TO $100.00. IT IS REASONABLE TO ASSUME THAT THE AGENCY WOULD NOT ORDER LARGE QUANTITIES OF SUCH ACCESSORIES BY THEMSELVES IN EXCESS OF ITS SYSTEM CONFIGURATION NEEDS. AN EXAMINATION OF THE SOLICITATION DOCUMENTS SHOWS THAT THE AGENCY NEVER EXPECTED TO ORDER THESE NINE ITEMS IN QUANTITIES APPROACHING THE NUMBER OF BASIS SYSTEMS TO BE ORDERED. FOR EXAMPLE, AS WE INDICATED EARLIER, THE ESTIMATED RATIO OF PARALLEL PORTS TO BASIC SYSTEMS WAS ONLY 1:5. FURTHERMORE IN THIS REGARD, OUT OF A TOTAL DELIVERY ORDER OF $493,508 ALREADY ISSUED TO ISYX, THE AGENCY HAS ONLY PURCHASED TWO PARTICULAR COMPONENTS FROM ISYX (A BASIC PROGRAMMING AND DEVELOPMENT SYSTEM AND AN IBM PERSONAL EDITOR AT A TOTAL PRICE OF $173.00) FOR WHICH SPECTRUM NOTED "N/C."

WE BELIEVE THAT SPECTRUM CLEARLY INTENDED TO OFFER THESE NINE ITEMS TO THE GOVERNMENT AT NO CHARGE AS PART OF ITS PRICING STRUCTURE, AND THUS LEGALLY BOUND ITSELF TO DO SO BY INSERTING THE "N/C" NOTATIONS. AARDVARK/KEITH MOVING COMPANY, SUPRA. WE FAIL TO SEE HOW THIS PATTERN OF PRICING RENDERED THE FIRM'S BID NONRESPONSIVE, AND THEREFORE CONCLUDE THAT THE AGENCY IMPROPERLY REJECTED THE BID.

SINCE THE AGENCY INFORMS US THAT NO ADDITIONAL DELIVERY ORDERS TO ISYX ARE PRESENTLY CONTEMPLATED, WE ARE RECOMMENDING TO THE SECRETARY OF COMMERCE BY SEPARATE LETTER OF TODAY THAT THE GOVERNMENT'S OPTION TO EXTEND THE TERM OF THE CONTRACT NOT BE EXERCISED, AND THAT ANY FUTURE REQUIREMENTS BE RESOLICITED.

THE PROTEST IS SUSTAINED.

/1/ THE BID PRICES WERE AS FOLLOWS:

1. REHAB. GROUP INC. $504,825.00

2. MICAS, INC. $538,215.00

3. SPECTRUM LEASING CORPORATION $554,925.00

4.ISYX, INC. $594,612.00