Matter of: Valix Federal Partnership I File: B-250686 Date: February 1, 1993

Matter of: Valix Federal Partnership I File: B-250686 Date: February 1, 1993

PROCUREMENT Sealed Bidding Bids Responsiveness Price data Minor deviations In a procurement for the purchase of up to 1,500 notebook computers where the schedule in the invitation for bids required bidders to submit single unit prices for estimated line item quantities of computers and where the protester split the agency's estimated line item quantities of computers to what it considered quantities most economically advantageous to the firm and separately priced these quantities, the protester's bid was properly rejected as nonresponsive. The protester's pricing scheme permits it to structure its bid to obtain maximum profits and to limit its economic risks in the event the agency does not purchase its estimated item quantities of computers, thus affording the protester an unfair pricing advantage over the other bidders.

Attorneys

DECISION Valix Federal Partnership I protests the rejection of its bids as nonresponsive under invitation for bids (IFB) No. OAM-92-A-0003 issued by the General Accounting Office (GAO) for notebook computers. GAO rejected Valix's bids because the firm did not comply with the IFB bid schedule.

We deny the protest.

The IFB, issued June 10, 1992, contemplated the award of an indefinite delivery/indefinite quantity fixed-priced contract for a base year and 1 option year. The IFB required firms to provide notebook computers, software, manuals and support services for the installation and support of the computers. The IFB set forth a base year minimum order of 10 and a total maximum order of 1,500 notebook computers. GAO estimated that it would order 800 computers during the base period and 700 during the option period and reserved the right to order the total quantity of 1,500 during the base period or up to 1,490 during the option period, depending on the availability of funds.

The IFB set forth the bid schedule essentially as follows:

BASE PERIOD: DATE OF AWARD THROUGH SEPTEMBER 30, 1992

Item Quantity Unit Price TOTAL

1. "NOTEBOOK" COMPUTER 800 $ $

BIDDING ON: MANUFACTURER: MODEL NUMBER:

OPTION I: OCTOBER 1, 1992 THROUGH SEPTEMBER 30, 1993

Item Quantity Unit Price TOTAL

2. "NOTEBOOK COMPUTER" 700 $ $

BIDDING ON: MANUFACTURER: MODEL NUMBER:

TOTAL BID--------------------------------------------$

In accordance with the terms of the IFB, the agency used the total bid price to determine the low bidder. The IFB cautioned that "[b]idders must bid on all quantities for each fiscal year (2 years). A less than complete bid on a line item or any other deviation from the above bidding scheme may cause the bid to be judged nonresponsive."

Thirty-four bids from 24 firms were submitted by the bid opening date of July 24, 1992. The agency rejected the Valix bids as nonresponsive because the firm did not submit single unit prices for the base and option years in conformance with the IFB schedule. Rather, Valix split the agency's estimated quantities as listed in the bid schedule and submitted separate unit prices for each of those quantities. For example, the lowest of Valix's six bids was set forth as follows:

Item 1

From To Qty. Unit Total Unit No. Unit No. Price

1 10 10 $3,894 $ 38,940 11 100 90 $3,744 $ 336,960 101 200 100 $3,544 $ 354,400 201 300 100 $3,294 $ 329,400 301 400 100 $2,994 $ 299,400 401 500 100 $2,644 $ 264,400 501 600 100 $2,244 $ 224,400 601 700 100 $1,794 $ 179,400 701 800 100 $1,294 $ 129,400 800 $2,156,700

Total Bid Item 1

Item 2

1 100 100 $1,165 $ 116,460 101 200 100 $1,106 $ 110,637 201 300 100 $1,051 $ 105,105 301 400 100 $ 998 $ 99,850 401 500 100 $ 949 $ 94,857 501 600 100 $ 901 $ 90,115 601 700 100 $ 856 $ 85,609 700 $ 702,633

Total Bid 1,500 $2,859,333

Valix used the same pricing structure for all of its six bids. Instead of bidding a single unit price per computer, Valix bid varying prices depending on the number of computers ordered by the agency. Because of this, the agency rejected the bids as nonresponsive.

Valix argues that the agency improperly evaluated the bids and improperly rejected its bids as nonresponsive. The protester argues that the low bid was to be determined by adding the total price for the option period to the total price of the basic requirement and that based on that evaluation scheme all of its six bids are lower than the awardee's bid. The protester says that the agency's caution against deviating from the bidding scheme applies only to the requirement that the bidders bid on "the full quantities for all years," and that there was no requirement that bidders submit a single unit price.

We conclude that the agency properly rejected the protester's bids. The award of government contracts pursuant to the rules of sealed bidding must be made on the same terms that they were offered to all bidders. Copy Duplicating Prods., Inc., B-245381, Dec. 30, 1991, 92-1 CPD Para. 15. An irregularity in a bid resulting in benefits to a bidder not extended to all bidders by the IFB, and which is prejudicial to other bidders renders the bid nonresponsive. See New World Technology, B-237158, Jan. 19, 1990, 90-1 CPD Para. 77; Thomas Constr. Co., Inc., B-184810, Oct. 21, 1975, 75-2 CPD Para. 248; Federal Acquisition Regulation (FAR) Sec. 14.404-2(d).

It is true as the protester points out, that there was no separate, specific instructions stating that only single unit prices could be submitted. Nevertheless, we think that it was clear from the structure of the bid schedule, which provided a single space for a unit price next to the estimated quantity, that a single price was called for. This, in our view, was reinforced by the IFB's warning that any "deviation" from the bid schedule may cause the bid to be considered nonresponsive.

For each line item, Valix deviated from the IFB schedule by splitting the estimated line item quantity and pricing these smaller quantities separately. While this type of pricing structure yields a total bid for evaluation purposes, the higher unit prices for the initial quantities afford Valix the opportunity to realize more of a profit at the earlier stages of contract performance. Valix thereby not only minimized any risk that the agency will not need the total estimated quantity of computers, see Copy Duplicating Prods., Inc., supra., but placed itself in a position to receive an increased profit with each computer ordered below the maximum.

Valix's pricing strategy enabled it to offer lower overall prices than it otherwise would have and thereby worked to the prejudice of the other bidders who did not deviate from the single unit pricing scheme of the IFB schedule. Under these circumstances, we agree with the agency's view that acceptance of the Valix bids would have been prejudicial to the other bidders. Therefore, we conclude that the agency properly rejected the Valix bids as nonresponsive. Copy Duplicating Prods., Inc., supra.

The protest is denied.