B-219405.2, OCT 25, 1985, 85-2 CPD 460

B-219405.2: Oct 25, 1985

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PROVIDES THAT FOREIGN END PRODUCTS EXCEEDING IN TOTAL VALUE A SPECIFIC DOLLAR THRESHOLD WILL NOT BE ACCEPTED UNLESS THOSE PRODUCTS ORIGINATE IN A DESIGNATED COUNTRY. A BIDDER'S OFFER OF NON-DESIGNATED COUNTRY ITEMS THAT WOULD EXCEED THE DOLLAR LIMITATION IS PROPERLY REJECTED AS NONRESPONSIVE. THE EXCEPTION IN THE FEDERAL ACQUISITION REGULATION TO ALLOW FOR THE LATE MODIFICATION OF AN "OTHERWISE SUCCESSFUL BID" IS ONLY APPLICABLE WHERE THE BID AS ORIGINALLY SUBMITTED IS BOTH LOW AND RESPONSIVE. THERE IS NO REQUIREMENT THAT AN AGENCY'S ESTIMATES BE ABSOLUTELY CORRECT BEFORE THE AGENCY MAY PROPERLY SOLICIT BIDS ON THE BASIS OF THOSE ESTIMATES. THE PROCUREMENT WAS FOR THE ACQUISITION OF PLUMBING MATERIALS TO MEET GSA'S ANNUAL REQUIREMENTS.

B-219405.2, OCT 25, 1985, 85-2 CPD 460

BIDS - RESPONSIVENESS - EXCEPTIONS TAKEN TO INVITATION TERMS DIGEST: 1. WHERE A SOLICITATION PROVISION, IMPLEMENTING THE TRADE AGREEMENTS ACT OF 1979, PROVIDES THAT FOREIGN END PRODUCTS EXCEEDING IN TOTAL VALUE A SPECIFIC DOLLAR THRESHOLD WILL NOT BE ACCEPTED UNLESS THOSE PRODUCTS ORIGINATE IN A DESIGNATED COUNTRY, A BIDDER'S OFFER OF NON-DESIGNATED COUNTRY ITEMS THAT WOULD EXCEED THE DOLLAR LIMITATION IS PROPERLY REJECTED AS NONRESPONSIVE. THE FACT THAT THE SOLICITATION PROVIDES ONLY ESTIMATES OF QUANTITIES TO BE FURNISHED DOES NOT CHANGE THIS RESULT BECAUSE THE ESTIMATES PROVIDE THE BASIS FOR EVALUATION AND AWARD. BIDS - MISTAKES - CORRECTION - RULE 2. THE EXCEPTION IN THE FEDERAL ACQUISITION REGULATION TO ALLOW FOR THE LATE MODIFICATION OF AN "OTHERWISE SUCCESSFUL BID" IS ONLY APPLICABLE WHERE THE BID AS ORIGINALLY SUBMITTED IS BOTH LOW AND RESPONSIVE. BIDS - INVITATION FOR BIDS - SPECIFICATIONS - ADEQUACY 3. THERE IS NO REQUIREMENT THAT AN AGENCY'S ESTIMATES BE ABSOLUTELY CORRECT BEFORE THE AGENCY MAY PROPERLY SOLICIT BIDS ON THE BASIS OF THOSE ESTIMATES.

THE W.H. SMITH HARDWARE COMPANY:

THE W.H. SMITH HARDWARE COMPANY (SMITH) PROTESTS THE REJECTION OF ITS BID AS NONRESPONSIVE UNDER INVITATION FOR BIDS (IFB) NO. 7PRT 52650/F5/7SB, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA). THE PROCUREMENT WAS FOR THE ACQUISITION OF PLUMBING MATERIALS TO MEET GSA'S ANNUAL REQUIREMENTS. WE DISMISS THE PROTEST, WITHOUT REQUIRING THE SUBMISSION OF AN AGENCY REPORT, PURSUANT TO 4 C.F.R. SEC. 21.3(F) (1985).

BACKGROUND

GSA REJECTED THE BID AS NONRESPONSIVE BECAUSE SMITH OFFERED TO FURNISH FOREIGN END PRODUCTS FOR ITEMS 67-73 OF THE IFB (DOUBLE FAUCETS), THE TOTAL VALUE OF WHICH EXCEEDED THE DOLLAR LIMITATION FOR NON-DESIGNATED COUNTRY END PRODUCTS AS PRESCRIBED BY THE FEDERAL ACQUISITION REGULATION (FAR), SEC. 52.225-9(B) (FEDERAL ACQUISITION CIRCULAR NO. 84-7, APRIL 30, 1985). AS INCORPORATED INTO THE IFB, SECTION 52.225-9(B) PROVIDED THAT A CONTRACTOR COULD NOT SUPPLY A FOREIGN END PRODUCT WITH A TOTAL VALUE OF $156,000 OR MORE UNLESS THE PRODUCT WAS FROM A DESIGNATED COUNTRY AS LISTED AT 48 C.F.R. SEC. 25.401, OR UNLESS A WAIVER WAS GRANTED IN ACCORDANCE WITH 48 C.F.R. SEC. 25.402(B).

GSA'S ANNUAL ESTIMATED REQUIREMENTS FOR DOUBLE FAUCETS WAS 13,854 UNITS, AND THE IFB PROVIDED THAT THE AWARD WOULD BE MADE ON THE BASIS OF THE GOVERNMENT'S ESTIMATES. BECAUSE THE FAUCETS TO BE FURNISHED BY SMITH ORIGINATED IN TAIWAN, WHICH IS NOT A DESIGNATED COUNTRY, SEE 48 C.F.R. SEC. 25.401, AND BECAUSE THE TOTAL VALUE WOULD BE MORE THAN $156,000 BASED UPON SMITH'S UNIT PRICE BID OF $11.94, GSA REJECTED THE BID AS NONRESPONSIVE FOR EXCEEDING THE ESTABLISHED DOLLAR LIMITATION.

SMITH CONTENDS THAT THE REJECTION WAS IMPROPER BECAUSE THE IFB PROVIDED FOR ONLY ESTIMATED QUANTITIES, AND, THEREFORE, THE FIRM ARGUES THAT GSA CANNOT ACCURATELY DETERMINE THAT THE TOTAL VALUE OF THE FAUCETS WILL IN FACT EXCEED $156,000. SMITH ASSERTS IN THIS REGARD THAT GSA'S ANNUAL FAUCET REQUIREMENTS ARE EXCESSIVELY HIGH, BASED UPON GSA'S PURCHASE OF ONLY 11,000 OF THE SAME ITEMS FROM SMITH LAST YEAR. SMITH ALSO URGES THAT SINCE IT HAS OFFERED TO REDUCE ITS UNIT PRICE FOR THE FAUCETS FROM $11.94 TO $11.44, THEIR TOTAL VALUE WILL BE LESS THAN $156,000 EVEN IF GSA PURCHASES THE FULL ESTIMATED QUANTITY.

ANALYSIS

IT IS WELL-SETTLED THAT, IN ORDER TO BE RESPONSIVE, A BID AS SUBMITTED MUST BE AN UNEQUIVOCAL OFFER TO PROVIDE THE PRODUCT OR SERVICE IN TOTAL CONFORMANCE WITH THE MATERIAL REQUIREMENTS OF THE IFB. EDW. KOCHARIAN & CO., INC., 58 COMP.GEN. 214 (1979), 79-1 CPD PARA. 20. IN THIS REGARD, THE FAR, SEC. 52.225-9(B) IMPLEMENTS IN PART THE TRADE AGREEMENTS ACT OF 1979 (19 U.S.C. SECS. 2501-2582 (1982)) TO PROHIBIT THE PURCHASE OF FOREIGN END PRODUCTS EXCEEDING IN TOTAL VALUE THE ESTABLISHED DOLLAR THRESHOLD UNLESS THOSE PRODUCTS ORIGINATE IN A DESIGNATED COUNTRY. ACCORDINGLY, COMPLIANCE WITH SECTION 52.225-9(B) WAS A MATERIAL REQUIREMENT OF THE IFB, AND, THEREFORE, SMITH'S BID WAS PROPERLY REJECTED AS NONRESPONSIVE BECAUSE THE TOTAL VALUE OF THE OFFERED FAUCETS EXCEEDED THE $156,000 LIMITATION. THE FACT THAT THE SOLICITATION PROVIDED ONLY ESTIMATES OF QUANTITIES TO BE FURNISHED DOES NOT CHANGE THIS RESULT, BECAUSE THE ESTIMATES PROVIDED THE BASIS FOR EVALUATION AND AWARD.

TO THE EXTENT THAT SMITH HAS OFFERED TO REDUCE ITS UNIT PRICE FOR THE FAUCETS SO AS NOT TO EXCEED THE DOLLAR LIMITATION, IT IS ALSO A FUNDAMENTAL PRINCIPLE OF SEALED BIDDING THAT A NONRESPONSIVE BID MAY NOT BE MODIFIED AFTER BID OPENING IN ORDER TO MAKE IT RESPONSIVE. WHOLESALE OFFICE FURNITURE, INC., B-216081, DEC. 4, 1984, 84-2 CPD PARA. 618.

SMITH ATTEMPTS TO RELY UPON THE FAR, 48 C.F.R. SEC. 52.214-7(E), AS INCORPORATED INTO THE IFB, TO SUPPORT ITS POSITION THAT THE OFFERED REDUCTION IN ITS UNIT PRICE FOR THE FAUCETS IS PERMISSIBLE IN ORDER TO MAKE ITS BID RESPONSIVE. SMITH'S RELIANCE IS MISPLACED. SECTION 52.214- 7(E) SPECIFICALLY PROVIDES THAT A LATE MODIFICATION OF AN "OTHERWISE SUCCESSFUL BID" WHICH MAKES IT TERMS MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME AND MAY BE ACCEPTED. HOWEVER, THE PREREQUISITE FOR PERMITTING A LATE MODIFICATION IS THAT THE BID AS ORIGINALLY SUBMITTED MUST ALREADY BE THE LOW, RESPONSIVE BID. SPACE AGE ENGINEERING, INC.-- RECONSIDERATION, B-205594.3, SEPT. 24, 1982, 82-2 CPD PARA. 269. BECAUSE SMITH'S BID AS ORIGINALLY SUBMITTED WAS NONRESPONSIVE FOR FAILING TO COMPLY WITH THE DOLLAR LIMITATION FOR FOREIGN END PRODUCTS, SECTION 52.214 -7(E) IS INAPPLICABLE.

FINALLY, SMITH'S CHALLENGE THAT THE ESTIMATED ANNUAL FAUCET REQUIREMENTS PROVIDED IN THE IFB ARE TOO HIGH IS CLEARLY UNTIMELY. OUR BID PROTEST REGULATIONS REQUIRE THAT PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN AN IFB WHICH ARE APPARENT PRIOR TO BID OPENING MUST BE PROTESTED PRIOR TO BID OPENING IN ORDER TO BE CONSIDERED. 4 C.F.R. SEC. 21.2(A)(1); SEE ALSO IBI SECURITY SERVICE, INC., B-217446, JUNE 27, 1985, 85-1 CPD PARA. 732. HERE, SMITH DID NOT RAISE THE ISSUE UNTIL IT FILED AN INITIAL PROTEST WITH THE CONTRACTING OFFICER ON SEPTEMBER 20, 1985, A DATE AFTER THE OPENING OF BIDS.

IN ANY EVENT, A PROTESTER BEARS THE BURDEN OF PROVING THAT THE AGENCY'S ESTIMATES ARE NOT BASED ON THE BEST INFORMATION AVAILABLE, OTHERWISE MISREPRESENT THE AGENCY'S NEEDS, OR RESULT FROM FRAUD OR BAD FAITH. YAMAS CONSTRUCTION CO., INC., B-217459, MAY 24, 1985, 85-1 CPD PARA. 599. EVEN THOUGH SMITH ASSERTS THAT THE ANNUAL FAUCET REQUIREMENTS IN THE IFB ARE EXCESSIVELY HIGH GIVEN GSA'S PURCHASES LAST YEAR, THIS DOES NOT MEET THE FIRM'S BURDEN OF PROOF, SINCE THERE IS NO REQUIREMENT THAT ESTIMATES BE ABSOLUTELY CORRECT FOR THE AGENCY TO SOLICIT BIDS ON THE BASIS OF THOSE ESTIMATES. ID.

THE PROTEST IS DISMISSED.