B-216804, APR 30, 1985, 85-1 CPD 486

B-216804: Apr 30, 1985

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AN AGENCY MAY PROPERLY REJECT A BID AS NONRESPONSIVE WHERE THE BIDDER SUBMITS DESCRIPTIVE LITERATURE THAT SHOWS THAT THE PRODUCT IT IS OFFERING DOES NOT CONFORM TO SPECIFICATIONS. SINCE AGENCY DETERMINATIONS OF PRICE REASONABLENESS ARE MATTERS OF ADMINISTRATIVE DISCRETION. GAO WILL NOT QUESTION SUCH A DETERMINATION UNLESS IT IS UNREASONABLE OR THERE IS A SHOWING OF POSSIBLE FRAUD OR BAD FAITH ON THE PART OF CONTRACTING OFFICIALS. THE VA REQUIRED ONLY GENERAL DESCRIPTIVE LITERATURE TO BE SUBMITTED BY BID OPENING AND THAT MORE SPECIFIC INFORMATION AND A SAMPLE WINDOW WERE TO BE SUPPLIED AFTER BID OPENING. THE PROTESTER FURTHER ALLEGES THAT THE AWARD WAS AT AN UNREASONABLE PRICE. SINCE SULLIVAN'S BID WAS NEARLY 75 PERCENT HIGHER THAN ITS OWN OR THAT OF THE NEXT LOW BIDDER.

B-216804, APR 30, 1985, 85-1 CPD 486

BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - INDICATION THAT ITEM OFFERED FAILED TO MEET SPECIFICATIONS DIGESTS: 1. AN AGENCY MAY PROPERLY REJECT A BID AS NONRESPONSIVE WHERE THE BIDDER SUBMITS DESCRIPTIVE LITERATURE THAT SHOWS THAT THE PRODUCT IT IS OFFERING DOES NOT CONFORM TO SPECIFICATIONS. BIDS - PRICES - REASONABLENESS - ADMINISTRATIVE DETERMINATION 2. SINCE AGENCY DETERMINATIONS OF PRICE REASONABLENESS ARE MATTERS OF ADMINISTRATIVE DISCRETION, GAO WILL NOT QUESTION SUCH A DETERMINATION UNLESS IT IS UNREASONABLE OR THERE IS A SHOWING OF POSSIBLE FRAUD OR BAD FAITH ON THE PART OF CONTRACTING OFFICIALS.

A.O. STILWELL CO., INC.:

A.O. STILWELL CO., INC., PROTESTS THE REJECTION OF ITS BID AND THE AWARD OF A CONTRACT TO SULLIVAN SALES CORPORATION UNDER INVITATION FOR BIDS (IFB) NO. 528-57-84, ISSUED BY THE VETERANS ADMINISTRATION (VA). THE SOLICITATION CALLED FOR STORM WINDOW REPLACEMENT AT THE VA MEDICAL CENTER, BUFFALO, NEW YORK.

WE DENY THE PROTEST.

THE VA REJECTED STILWELL'S BID AS NONRESPONSIVE BECAUSE THE DESCRIPTIVE LITERATURE SUBMITTED WITH IT DEMONSTRATED THAT THE WINDOWS OFFERED DID NOT CONFORM TO SPECIFICATIONS OR, IN SOME INSTANCES, BECAUSE THE LITERATURE LACKED SUFFICIENT DETAIL TO ENABLE THE VA TO DETERMINE WHETHER THEY DID SO.

STILWELL ARGUES THAT, UNDER THE PREAWARD QUALIFICATION PROVISIONS OF THE IFB, AS AMENDED, THE VA REQUIRED ONLY GENERAL DESCRIPTIVE LITERATURE TO BE SUBMITTED BY BID OPENING AND THAT MORE SPECIFIC INFORMATION AND A SAMPLE WINDOW WERE TO BE SUPPLIED AFTER BID OPENING. THE PROTESTER FURTHER ALLEGES THAT THE AWARD WAS AT AN UNREASONABLE PRICE, SINCE SULLIVAN'S BID WAS NEARLY 75 PERCENT HIGHER THAN ITS OWN OR THAT OF THE NEXT LOW BIDDER.

THE VA ASSERTS THAT THE IFB CLEARLY REQUIRED DESCRIPTIVE LITERATURE TO BE SUBMITTED BY BID OPENING AND THAT STILWELL'S WAS INADEQUATE. BECAUSE STILWELL'S BID WAS NONRESPONSIVE, THE VA ASSERTS THAT ITS REFUSAL TO ALLOW THE FIRM TO SUBMIT PREAWARD QUALIFICATION MATERIALS AFTER BID OPENING WAS PROPER, ADDING THAT IT INTENDED TO OBTAIN THIS MATERIAL ONLY FROM THE LOW, RESPONSIVE BIDDER. MOREOVER, THE VA ARGUES THAT IF THE DESCRIPTIVE LITERATURE AND/OR PREAWARD QUALIFICATION REQUIREMENTS WERE UNCLEAR, STILWELL SHOULD HAVE PROTESTED BEFORE BID OPENING. THE VA FINALLY ASSERTS THAT THE CONTRACT PRICE WAS CONSISTENT WITH THE GOVERNMENT'S ESTIMATE.

THE VA WARNED IN A SPECIAL NOTICE ON THE FACE OF THE SOLICITATION THAT: "BIDDERS MUST SUPPLY DESCRIPTIVE LITERATURE DESCRIBING WINDOWS BEING OFFERED. SEE CLAUSE ON PAGE 7 OF SOLICITATION, OFFER AND AWARD." PAGE 7 INCLUDED THE STANDARD CLAUSE SET FORTH IN THE FEDERAL ACQUISITION REGULATION (FAR), 48 C.F.R. SEC. 52.214-21 (1984), WHICH STATES THAT:

"(A) 'DESCRIPTIVE LITERATURE' MEANS INFORMATION (E.G. CUTS, ILLUSTRATIONS, DRAWINGS, AND BROCHURES) THAT IT SUBMITTED AS PART OF A BID. DESCRIPTIVE LITERATURE IS REQUIRED TO ESTABLISH, FOR THE PURPOSE OF EVALUATION AND AWARD, DETAILS OF THE PRODUCT OFFERED THAT ARE SPECIFIED ELSEWHERE IN THE SOLICITATION AND PERTAIN TO SIGNIFICANT ELEMENTS SUCH AS (1) DESIGN; (2) MATERIALS; (3) COMPONENTS; (4) PERFORMANCE CHARACTERISTICS; AND (5) METHODS OF MANUFACTURE, ASSEMBLY, CONSTRUCTION, OR OPERATION. THE TERM INCLUDES ONLY INFORMATION REQUIRED TO DETERMINE THE TECHNICAL ACCEPTABILITY OF THE OFFERED PRODUCT. IT DOES NOT INCLUDE OTHER INFORMATION SUCH AS THAT USED IN DETERMINING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR OR FOR OPERATING OR MAINTAINING EQUIPMENT.

"(B) DESCRIPTIVE LITERATURE, REQUIRED ELSEWHERE IN THIS SOLICITATION, MUST BE (1) IDENTIFIED TO SHOW THE ITEMS) OF THE OFFER TO WHICH IT APPLIES AND (2) RECEIVED BY THE TIME SPECIFIED IN THIS SOLICITATION FOR RECEIPT OF BIDS. FAILURE TO SUBMIT DESCRIPTIVE LITERATURE ON TIME WILL REQUIRE REJECTION OF THE BID. ...

"(C) THE FAILURE OF DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT OFFERED CONFORMS TO THE REQUIREMENTS OF THIS SOLICITATION WILL REQUIRE REJECTION OF THE BID."

IN ADDITION TO THE FOREGOING, THE IFB AT SUBPARAGRAPH 1.02C, SECTION 08523, ENTITLED "PRE-AWARD QUALIFICATIONS," STATED:

"1. MANUFACTURERS SHALL SUBMIT A DEMONSTRATION WINDOW SAMPLE REPRESENTATIVE OF UNIT SPECIFIED, TEST DATA, MANUFACTURERS SPECIFICATIONS, INCLUDING A LIST OF ANY MODIFICATIONS REQUIRED TO BRING STOCK SAMPLE INTO CONFORMANCE WITH REQUIREMENTS OF THIS SECTION FOR THE CONTRACTING OFFICER'S CONDITIONAL APPROVAL.

"2. AFTER CONDITIONAL APPROVAL, INSTALL A COMPLETE WINDOW UNIT ...

"3.TEST INSTALLATION IN CONFORMANCE WITH 'ON SITE TESTS' FOLLOWING. SUBMIT RESULTS TO CONTRACTING OFFICER.

"4. IN THE EVENT OF A SUCCESSFUL TEST, THE VETERANS ADMINISTRATION WILL ENTER INTO CONTRACT WITH THE MANUFACTURER. SAMPLE INSTALLATION SHALL REMAIN AS A STANDARD OF QUALITY THROUGHOUT THE CONSTRUCTION PERIOD. ..."

ON SEPTEMBER 10, 1984, 8 DAYS BEFORE THE SCHEDULED BID OPENING, THE VA ISSUED AN AMENDMENT THAT, AMONG OTHER THINGS, ADVISED BIDDERS THAT: "ALL PRE-AWARD QUALIFICATIONS MUST BE MET BY 12 NOON, SEPTEMBER 28, 1984."

THE VA RECEIVED THREE BIDS ON SEPTEMBER 18, 1984, AS FOLLOWS:

A.O. STILWELL CO., INC. $1,807,988

CORTLAND GLASS CO., INC. $1,857,850

SULLIVAN SALES CORP. $3,103,000 AFTER REVIEWING THE DESCRIPTIVE LITERATURE SUBMITTED WITH THESE BIDS, THE VA FOUND BOTH STILWELL'S AND CORTLAND'S BIDS NONRESPONSIVE AND CONCLUDED THAT SULLIVAN HAD SUBMITTED THE ONLY ACCEPTABLE BID; THE AGENCY APPARENTLY ALSO PROCEEDED WITH TESTING OF THE WINDOW OFFERED BY SULLIVAN.

ON SEPTEMBER 27, 1984, STILWELL CONTACTED THE CONTRACTING OFFICER AND INQUIRED AS TO WHERE IT SHOULD DELIVER ITS WINDOW AND ADDITIONAL LITERATURE IN ORDER TO MEET THE SEPTEMBER 28 DEADLINE FOR PREAWARD QUALIFICATION. THE CONTRACTING OFFICER INFORMED STILWELL THAT THE TIME FOR SUBMISSION OF DESCRIPTIVE LITERATURE HAD BEEN WITH ITS BID AND THAT SHE COULD NOT ACCEPT ANYTHING FURTHER FROM SEPTEMBER 28, 1984, AND STILWELL'S PROTEST TO OUR OFFICE FOLLOWED. THE FIRM SEEKS OUR RECOMMENDATION FOR AWARD TO IT OR, ALTERNATIVELY, BID PREPARATION COSTS, LOST PROFIT, AND DAMAGES.

THE QUESTION HERE IS WHETHER THE VA, AFTER IMPOSING TWO SEPARATE REQUIREMENTS-- ONE FOR DESCRIPTIVE LITERATURE AND ANOTHER FOR PREAWARD QUALIFICATION MATERIALS-- COULD PROPERLY REJECT BIDS AS NONRESPONSIVE ON THE BASIS OF THE DESCRIPTIVE LITERATURE SUBMITTED WITH THEM. STILWELL IS IN EFFECT CHALLENGING THE ADEQUACY AND USE OF THE DESCRIPTIVE LITERATURE CLAUSE BY ARGUING THAT THE SOLICITATION REQUIRED ONLY GENERAL INFORMATION TO BE SUBMITTED WITH BIDS.

A FAILURE TO COMPLY WITH A PROPER DESCRIPTIVE LITERATURE REQUIREMENT ORDINARILY WILL RESULT IN REJECTION OF THE BID AS NONRESPONSIVE. WHOLESALE OFFICE FURNITURE, INC., B-216081, DEC. 4, 1984, 84-2 CPD PARA. 618. THIS IS BECAUSE RESPONSIVENESS CONCERNS A BIDDER'S UNEQUIVOCAL OFFER TO PROVIDE SUPPLIES OR SERVICES IN CONFORMITY WITH THE MATERIAL TERMS AND CONDITIONS OF THE SOLICITATION; IT MUST BE DETERMINED ON THE BASIS OF THE BID AS SUBMITTED AND NOT THE BASIS OF INFORMATION PROVIDED AFTER OPENING. CONTINENTAL TELEPHONE OF CALIFORNIA, B-213255, APR. 17, 1984, 84-1 CPD PARA. 428.

HERE, IN DETERMINING RESPONSIVENESS, THE VA COMPARED THE DESCRIPTIVE LITERATURE SUBMITTED BY EACH BIDDER WITH 14 SELECTED REQUIREMENTS FROM THE SOLICITATION. NONE OF THESE HAD PREVIOUSLY BEEN IDENTIFIED AS THOSE THAT WOULD BE CONSIDERED IN REVIEWING THE DESCRIPTIVE LITERATURE. WHILE SULLIVAN'S BID WAS FOUND TO MEET ALL 14 CRITERIA, THE VA'S REVIEW OF STILWELL'S LITERATURE REVEALED SEVERAL INSTANCES OF NONCOMPLIANCE. SPECIFICALLY, STILWELL'S LITERATURE INDICATES THAT (1) ITS WINDOWS USE SPIRAL SASH BALANCES, WHICH THE VA FOUND NOT ACCEPTABLE SINCE THEY ARE COMPOSED OF PRESSED STEEL PARTS NOT ALLOWED BY THE SPECIFICATIONS; (2) ITS WEATHERSTRIPPING WAS COMPOSED OF VINYL, AT LEAST IN PART, WHICH VIOLATED THE SPECIFICATIONS; (3) IT PROPOSED A CAM TYPE SASH LOCK FOR SECURITY AND POSITIVE LOCK, WHICH DID NOT COMPLY WITH A REQUIREMENT THAT LOCKS BE INTEGRAL WITHIN THE SASH AND ENGAGE AUTOMATICALLY; AND (4) IT PROPOSED A SURFACE-MOUNTED TILT LOCK WHICH DID NOT SATISFY THE REQUIREMENT THAT TILT LOCKS BE OF INTEGRAL-TYPE CONSTRUCTION.

WE WILL NOT DISTURB EVALUATOR'S DETERMINATIONS CONCERNING THE ADEQUACY OF TECHNICAL DATA ABSENT A CLEAR SHOWING OF UNREASONABLENESS, AN ARBITRARY ABUSE OF DISCRETION, OR A VIOLATION OF PROCUREMENT STATUES AND REGULATIONS. WASHEX MACHINERY CORP., B-214591.2, SEPT. 25, 1984, 84-2 CPD PARA. 352. WE DO NOT BELIEVE STILWELL HAS MADE SUCH A SHOWING HERE.

SOME OF THE ADDITIONAL REASONS ADVANCED BY THE VA FOR FINDING THE FIRM'S BID NONRESPONSIVE ARE NOT SUPPORTABLE. FOR EXAMPLE, SULLIVAN SUBMITTED CALCULATIONS FOR "MOMENT OF INERTIA" WITH ITS BID. THE SPECIFICATIONS, HOWEVER, AT SUBPARAGRAPH 1.06A.4, INDICATED THAT SUCH CALCULATIONS WERE TO BE SUBMITTED ALONG WITH SHOP DRAWINGS BEFORE THE SUCCESSFUL CONTRACTOR BEGAN FABRICATION OF THE STORM WINDOWS. FAILURE TO PROVIDE THEM IN DESCRIPTIVE LITERATURE, THEREFORE, WOULD NOT RENDER A BID NONRESPONSIVE.

NEVERTHELESS, SINCE THE STORM WINDOWS FOR WHICH STILWELL SUBMITTED DESCRIPTIVE LITERATURE DID NOT MEET AT LEAST THE FOUR ABOVE-LISTED REQUIREMENTS (WHICH WE ASSUME ARE MATERIAL, SINCE THEY AFFECT THE QUALITY OF THE WINDOWS, SEE VEN-TEL, INC., B-203397, JULY 1, 1981, 81-2 CPD PARA. 3), WE FIND THAT THE FIRM WAS NOT PREJUDICED BY THE VA'S IMPROPER DETERMINATION OF NONRESPONSIVENESS WITH REGARD TO OTHER REQUIREMENTS.

AS FOR THE PREAWARD QUALIFICATION AMENDMENT, WE BELIEVE THAT STILWELL MISCONSTRUED THIS AS AN EXTENSION OF THE DEADLINE FOR THE SUBMISSION OF MORE SPECIFIC DESCRIPTIVE LITERATURE AND A SAMPLE WINDOW. THE AMENDMENT, IN FACT, REFERRED TO SUBMISSION BY THE LOW, RESPONSIVE BIDDER OF A SAMPLE WINDOW, TEST DATA AND MANUFACTURE'S SPECIFICATIONS, INCLUDING A LIST OF ANY MODIFICATIONS REQUIRED TO BRING THE STOCK SAMPLE INTO CONFORMANCE WITH SPECIFICATIONS. SUCH DETAILED INFORMATION WAS NECESSARY FOR THE AGENCY TO DETERMINE WHETHER THE LOW, RESPONSIVE BIDDER WAS RESPONSIBLE, I.E., WHETHER IT WAS QUALIFIED TO PRODUCE THE WINDOWS ACCORDING TO SPECIFICATIONS, AND NOT TO DETERMINE WHETHER THE BIDDER HAD PROMISED TO PERFORM THE CONTRACT IN ACCORDANCE WITH THE SOLICITATION. SEE JIMMIE MUSCATELLO'S MILITARY AND CIVILIAN TAILORS, B-211578, SEPT. 29, 1983, 83-2 CPD PARA. 390; SKYLINE CREDIT CORP., B-209193, MAR. 15, 1983, 83-1 CPD 257.

THE PROTESTER ALSO ASSERTS THAT THE AWARDEE'S PRICE WAS NOT REASONABLE AND THAT THE BIDDING PROCESS WAS NOT TRULY COMPETITIVE. THE VA RESPONDS THAT, DESPITE A $1,300,000 DIFFERENTIAL BETWEEN THE PRICES OF THE TWO NONRESPONSIVE LOW BIDDERS AND THAT OF THE AWARDEE, THE CONTRACT PRICE WAS REASONABLE AND CONSISTENT WITH ALL OTHER AVAILABLE, REVELANT COST DATA. THE VA BASED ITS DETERMINATION ON A COMPARISON OF THE AWARDEE'S PRICE WITH THE VA'S BUDGET ESTIMATES FOR THE PROJECT AND WITH ESTIMATES MADE BY AN INDEPENDENT ARCHITECT-ENGINEERING FIRM AT TWO DIFFERENT STAGES DURING DEVELOPMENT OF THE SPECIFICATIONS; THE BUDGET ESTIMATE WAS $3,600,000, WHILE THE ARCHITECT-ENGINEER'S FINAL ESTIMATE WAS $3,700,000. AS NOTED ABOVE, THE AWARDEE'S BID WAS $3,103,000.

WE WILL NOT QUESTION A DETERMINATION OF PRICE REASONABLENESS UNLESS IT IS SHOWN TO BE CLEARLY UNREASONABLE OR THERE IS A SHOWING OF POSSIBLE BAD FAITH OR FRAUD ON THE PART OF CONTRACTING OFFICIALS, SINCE SUCH DETERMINATIONS ARE MATTERS OF ADMINISTRATIVE DISCRETION. ISOMETRICS, INC., B-204556, APR. 13, 1982. 82-1 CPD PARA. 340. ON THE BASIS OF THE EVIDENCE PRESENTED BY THE VA, WE FIND THAT THE CONTRACTING OFFICER'S DETERMINATION IS THIS REGARD WAS REASONABLE.

THE PROTEST AND STILWELL'S CLAIMS FOR BID PREPARATION COSTS AND OTHER MONIES ARE DENIED.