B-169824, JUN. 26, 1970

B-169824, JUN. 26, 1970

CONTRACTS--SPECIFICATIONS AMBIGUOUS--WHAT CONSTITUTES AN AMBIGUITY INVITATION FOR EXTRACTING DATA FROM MORTGAGE BINDERS PROVIDES FOR FIXED PRICE AND UTILIZATION OF GOVERNMENT-FURNISHED FACILITIES. LOW BIDDER ($0.115) STATED THAT IF FASTENERS, ETC; WERE TO BE FURNISHED BY CONTRACTOR, UNIT PRICE WOULD HAVE BEEN $0.128--THAT INVITATION WAS AMBIGUOUS. BIDDER INTERPRETS "FACILITIES" AND "MATERIALS" AS BEING SYNONOMOUS. WHILE HUD DISAGREES WITH PROTESTANT, GAO CANNOT AGREE WITH HUD. WORD "FACILITIES" IS VERY INDEFINITE. LOW BIDDER, WHEN INSPECTING SITE, DID NOT QUESTION FURNISHING OF EQUIPMENT AND SUPPLIES WHILE OTHER BIDDERS DID, INDICATING SOLICITATION WAS AMBIGUOUS. INVITATION SHOULD HAVE BEEN AMENDED. CONTRACTS--SPECIFICATIONS AMBIGUOUS--CLARIFICATION BEFORE BIDDING INVITATION FOR EXTRACTING DATA FROM MORTGAGE BINDERS PROVIDED FOR FIXED PRICE AND UTILIZATION OF GOVERNMENT-FURNISHED FACILITIES. UNSUCCESSFUL LOW BIDDER INTERPRETS "FACILITIES" AND "MATERIALS" AS SYNONOMOUS. REASONABLE INTERPRETATION IS THAT GOVERNMENT WILL FURNISH ALL "FACILITIES" --EVERYTHING REASONABLY NECESSARY FOR CONTRACTOR'S EMPLOYEES TO PERFORM WORK; HOWEVER, THIS IS NOT WHAT HUD INTENDED AND NOT IN ACCORDANCE WITH ADVICE GIVEN TO SOME BIDDERS. WORD "FACILITIES" IS VERY INDEFINITE; MOREOVER, FEDERAL PROCUREMENT REGULATIONS 1 2.207(D) PROVIDES THAT ANY INFORMATION GIVEN PROSPECTIVE BIDDER CONCERNING INVITATION SHALL BE FURNISHED ALL OTHER PROSPECTIVE BIDDERS AS AMENDMENT TO INVITATION. CONTRACTS--SPECIFICATIONS AMBIGUOUS- CLARIFICATION BEFORE BIDDING INVITATION FOR EXTRACTING DATA FROM FEDERAL HOUSING ADMINISTRATION HOME MORTGAGE BINDERS PROVIDED FOR FIXED PRICE AND UTILIZATION OF GOVERNMENT- FURNISHED FACILITIES, WITH $0.2895 GOVERNMENT-ESTIMATED UNIT PRICE. LOW BIDDER ($0.115) STATED THAT IF FASTENERS, ETC; WERE TO BE FURNISHED BY CONTRACTOR, UNIT PRICE WOULD HAVE BEEN $0.128--THAT INVITATION WAS AMBIGUOUS. ONE REASON GIVEN FOR BID REJECTION WAS UNREASONABLY LOW PRICE; HOWEVER, GAO QUESTIONS PROPRIETY OF REJECTION ON THAT BASIS. TO PROPERLY REJECT BID AS BEING UNREASONABLY LOW WOULD REQUIRE DETERMINATION THAT BIDDER IS NOT RESPONSIBLE. SEE B-158143, MAR. 4, 1966. CONTRACTS-- OPTIONS NOT TO BE EXERCISED UNDER INVITATION FOR EXTRACTING DATA FROM HOME MORTGAGE BINDERS, WITH PROVISION FOR UTILIZATION OF GOVERNMENT-FURNISHED FACILITIES, UNSUCCESSFUL BIDDER, WHOSE BID WAS REJECTED FOR UNREASONABLY LOW PRICE (QUESTIONABLE PROPRIETY) AND NONRESPONSIVENESS, CONTENDS, WITH REASON, THAT INVITATION WAS AMBIGUOUS. WORD "FACILITIES" IS VERY INDEFINITE. UNDER TERMS OF AWARDED CONTRACT, CONTRACT PERIOD EXPIRES JUNE 30, 1970 WITH OPTION TO RENEW. GAO BELIEVES OPTION SHOULD NOT BE EXERCISED AND PROCUREMENT SHOULD BE RESOLICITED UNDER DEFINITE SPECIFICATIONS WHICH WILL AFFORD FULL AND FREE COMPETITION.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED JUNE 2, 1970, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, FORWARDING FOR OUR CONSIDERATION THE PROTEST OF NETWORK INFORMATION SYSTEMS, INCORPORATED (NETWORK), AGAINST THE AWARD OF A CONTRACT BY HUD TO MANLOADING AND MANAGEMENT ASSOCIATES, INCORPORATED (M&M), UNDER INVITATION FOR BIDS NO. H-32-70.

THE SOLICITATION REQUESTED BIDS FOR THE RESEARCH OF FEDERAL HOUSING ADMINISTRATION HOME MORTGAGE CASE BINDERS AND THE EXTRACTION OF CERTAIN DATA FOR CONVERSION TO AN AMPEX VIDEOFILE SYSTEM. THE DATA TO BE EXTRACTED IS SET-FORTH IN ATTACHMENT A, PAGES 28 THROUGH 34 OF THE SOLICITATION, ENTITLED "BINDER PREPARATION INSTRUCTIONS FHA VIDEOFILE SYSTEM PROJECT."

THE SOLICITATION PROVIDED THAT BIDDERS WERE TO QUOTE A FIRM-FIXED PRICE, INCLUSIVE OF ALL COSTS AND EXPENSES, FOR EACH CASE BINDER EXAMINED AND FROM WHICH DATA WAS EXTRACTED. THERE WAS TO BE NO CHARGE FOR THE EXAMINATION OF CASE BINDERS WHICH CONTAINED NO EXTRACTABLE DATA. THE SOLICITATION FURTHER PROVIDED, IN PART, AS FOLLOWS:

"I. STATEMENT OF WORK

"A. USING GOVERNMENT-FURNISHED FACILITIES, THE CONTRACTOR SHALL PROVIDE ALL TECHNICAL AND CLERICAL PERSONNEL NECESSARY TO PREPARE FEDERAL HOUSING ADMINISTRATION HOME MORTGAGE INSURANCE CASE BINDERS FOR CONVERSION TO A MAGNETIC TAPE INFORMATION STORAGE AND RETRIEVAL SYSTEM. IN ACCORDANCE WITH THE PROCESSING INSTRUCTIONS CONTAINED IN ATTACHMENT A, THE CONTRACTOR WILL REMOVE ALL UNPREPARED CASE BINDERS FROM THE FILE CABINETS IN WHICH THEY ARE KEPT; TRANSPORT THE BINDERS TO THE PREPARATION AREA; ISOLATE WITHIN THE ACTIVE CASE BINDERS THE DOCUMENTS TO BE RECORDED ON TAPE; RETURN THE ACTIVE CASE BINDERS TO THE FILE CABINETS IN CORRECT NUMERICAL SEQUENCE & SET INACTIVE CASE BINDERS ASIDE.

"D. WITHIN ONE WEEK AFTER A CONTRACT IS AWARDED PURSUANT TO THIS IFB, THE GTR SHALL MEET WITH THE CONTRACTOR TO:

"1. DISCUSS THE PROCEDURE TO BE FOLLOWED BY THE CONTRACTOR WHEN PREPARING THE BINDERS, INCLUDING THE FURNISHING OF INSTRUCTIONS FOR THE CONTRACTOR'S EMPLOYEES;

"2. ALLOCATE ADEQUATE OFFICE SPACE (APPROXIMATELY 10,000 SQUARE FEET - SEE ATTACHMENT B) AND FURNITURE (TABLES AND CHAIRS) FOR USE BY THE CONTRACTOR IN PERFORMING THE WORK REQUIRED BY THE CONTRACT;

"3. PROVIDE THE CONTRACTOR WITH A COMPUTER PRINTOUT OF ACTIVE CASES PREPARED PRIOR TO JANUARY 1, 1962 (APPROXIMATELY 1.7 MILLION); AND

"4. ESTABLISH WITH THE CONTRACTOR A METHOD OF QUALITY CHECKS TO BE USED BY THE CONTRACTOR."

TWELVE BIDS WERE RECEIVED AND OPENED ON APRIL 29, 1970, AS SPECIFIED. NETWORK WAS THE LOW BIDDER, WITH A UNIT PRICE OF $0.115 PER BINDER. M&M WAS THE SECOND LOW BIDDER, WITH A UNIT PRICE OF $0.245 PER BINDER. OTHER BIDS WERE IN THE AMOUNTS OF $0.255, $0.27, $0.277, $0.395 AND RANGED ON UP TO A HIGH OF $1.66. THE GOVERNMENT'S ESTIMATE, STATED TO HAVE BEEN BASED UPON PREVIOUS EXPERIENCE, WAS $0.2895 PER UNIT.

IN VIEW OF THE LOW PRICE QUOTED, NETWORK WAS REQUESTED BY TELEPHONE ON APRIL 29, 1970, TO VERIFY ITS BID PRICE. ON MAY 1, 1970, NETWORK'S REPRESENTATIVE MET WITH HUD OFFICIALS. NETWORK STATED THAT ITS BID PRICE WAS NOT UNREASONABLY LOW AND THAT IT COULD PERFORM AT THE PRICE BID. HOWEVER, IT WAS STATED THAT NETWORK'S BID PRICE DID NOT INCLUDE THE COST OF CERTAIN SUPPLIES, WHICH THE HUD OFFICIALS CONTENDED WERE TO BE FURNISHED BY THE CONTRACTOR AND WERE TO BE INCLUDED IN THE BID PRICE. NETWORK CONTENDED THAT THE SOLICITATION DID NOT PROVIDE THAT THE SUPPLIES (FASTNERS, PERFORATORS, RED MARKING PENCILS AND MISCELLANEOUS SUPPLIES), TO BE USED IN THE PERFORMANCE OF THE WORK AS SET FORTH IN ATTACHMENT A, WERE TO BE FURNISHED BY THE CONTRACTOR, AND THAT, IF SO, THE INVITATION WAS AMBIGUOUS.

BY LETTER DATED MAY 8, 1970, THE CONTRACTING OFFICER FORMALLY REQUESTED NETWORK TO VERIFY WHETHER IT WOULD BE ABLE TO MEET, AT ITS BID PRICE OF $0.115 PER UNIT, ALL CONDITIONS AND REQUIREMENTS OF THE IFB INCLUDING A MINIMUM OUTPUT OF 150,000 UNITS PER MONTH AND THE FURNISHING OF ALL SUPPLIES AND EQUIPMENT NECESSARY TO PERFORM IN ACCORDANCE WITH ATTACHMENT A, ENTITLED "BINDER PREPARATION INSTRUCTIONS FHA VIDEOFILE SYSTEM PROJECT." NETWORK RESPONDED BY LETTER OF THE SAME DATE VERIFYING ITS BID OF $0.115 PER UNIT, BUT CONTENDING THAT THE SOLICITATION DID NOT PROVIDE FOR THE CONTRACTOR TO FURNISH THE SUPPLIES AND EQUIPMENT TO BE USED IN THE PERFORMANCE OF THE WORK AS SET FORTH IN ATTACHMENT A. IT WAS FURTHER STATED THAT IF SUCH SUPPLIES AND EQUIPMENT WERE TO BE FURNISHED BY THE CONTRACTOR, ITS PRICE WOULD HAVE BEEN $0.128 PER UNIT.

BY LETTER DATED MAY 14, 1970, THE CONTRACTING OFFICER NOTIFIED NETWORK THAT ITS BID HAD BEEN REJECTED PURSUANT TO SECTION 1-2.404-2(C) AND (A) OF THE FEDERAL PROCUREMENT REGULATIONS AS BEING BOTH UNREASONABLY LOW AND NONRESPONSIVE TO THE PROVISIONS OF THE SOLICITATION. ON THE SAME DATE CONTRACT NO. H-1279 WAS AWARDED TO M&M.

WITH RESPECT TO THE REJECTION OF NETWORK'S BID AS BEING UNREASONABLY LOW, WE QUESTION THE PROPRIETY THEREOF. NORMALLY, IF A BIDDER IS FULLY AWARE OF THE REQUIREMENTS AND IS A RESPONSIBLE BIDDER IN ACCORDANCE WITH THE CRITERIA PRESCRIBED BY SECTION 1-1.310-5 OF THE FPR, THERE WOULD BE NO BASIS TO REJECT A BID MERELY BECAUSE IT WAS BELIEVED THAT THE BID WAS LOW. SEE B-158143, MARCH 4, 1966. WE BELIEVE THAT TO PROPERLY REJECT A BID AS BEING UNREASONABLY LOW WOULD REQUIRE A DETERMINATION THAT THE BIDDER IS NOT RESPONSIBLE.

THE PRIMARY QUESTION, HOWEVER, TO BE DECIDED HERE IS WHETHER THE SOLICITATION REQUIRED THE SUPPLIES TO BE FURNISHED BY THE CONTRACTOR AS CONTENDED BY HUD OR WHETHER THE INVITATION WAS AT LEAST AMBIGUOUS IN THIS REGARD AS CONTENDED BY NETWORK.

THE ASSISTANT SECRETARY'S LETTER OF JUNE 2, 1970, STATES HUD'S POSITION IN PERTINENT PART, AS FOLLOWS:

"CLAUSE 11 OF S.F. 33A, WHICH WAS CONTAINED ON PAGE 7 OF THE IFB PROVIDES AS FOLLOWS:

'NO MATERIAL, LABOR, OR FACILITIES WILL BE FURNISHED BY THE GOVERNMENT UNLESS OTHERWISE PROVIDED FOR IN THE SOLICITATION.'

"ARTICLE I OF THE IFB, STATEMENT OF WORK, PROVIDED IN PARAGRAPH A STATES THAT THE CONTRACTOR SHALL PROVIDE ALL TECHNICAL AND CLERICAL PERSONNEL NECESSARY TO PREPARE THE FHA BINDERS AND THAT GOVERNMENT FURNISHED FACILITIES WOULD BE UTILIZED. THESE FACILITIES ARE SET FORTH IN ARTICLE I, PARAGRAPH D. 2. -- APPROXIMATELY 10,000 SQUARE FEET OF OFFICE SPACE AND FURNITURE (TABLES AND CHAIRS). THE IFB DOES NOT PROVIDE FOR GOVERNMENT FURNISHING OF MATERIALS, BUT NETWORK APPARENTLY IS INTERPRETING MATERIALS AND FACILITIES AS BEING SYNONOMOUS.

"ATTACHMENT A TO THE IFB, CAPTIONED 'BINDER PREPARATION INSTRUCTIONS FHA VIDEOFILE SYSTEM PROJECT', STATES WHAT MATERIALS ARE NECESSARY. FOR EXAMPLE, ON PAGE 33 OF THE IFB, ARTICLE III IS CAPTIONED 'SEQUENCE OF ITEMS TO BE FASTENED ON THE LEFT SIDE OF THE BINDER WITH ACCO FASTENER OR EQUIVALENT.' ON PAGE 34, THE LAST ITEM IS A DESCRIPTION OF THE HOLE PUNCH REQUIRED. THIS DESCRIPTION INCLUDES DETAILED SPECIFICATIONS, INCLUDING A FEDERAL SPECIFICATION DESIGNATION.

"IN DISCUSSIONS WHICH OFFICIALS OF THIS DEPARTMENT HAVE HELD WITH NETWORK AND ITS ATTORNEYS, NETWORK HAS STATED THAT IT CONSTRUES ATTACHMENT A TO BE NO MORE THAN A STEP-BY-STEP SET OF INSTRUCTIONS. HOWEVER, THE ATTACHMENT IS A PART OF THE IFB AND ANY RESULTING CONTRACT, AS SPECIFIED IN ITEM NUMBER 6 ON PAGE 8 OF THE IFB. ACCORDINGLY, IT IS MORE THAN JUST A SET OF STEP-BY-STEP INSTRUCTIONS AND THE MATERIALS SET FORTH THEREIN ARE REQUIRED TO BE FURNISHED BY THE CONTRACTOR. IT IS HUD'S POSITION THAT IF THESE MATERIALS WERE TO BE FURNISHED BY THE GOVERNMENT, THE ATTACHMENT WOULD HAVE STATED THIS EXPLICITLY. FOR EXAMPLE, THE CAPTION TO ARTICLE III ON PAGE 33 WOULD HAVE NOT USED THE TERM 'ACCO FASTENER OR EQUIVALENT'; IT WOULD HAVE STATED 'FASTENER SUPPLIED BY THE GOVERNMENT.' SIMILARLY, IF THE GOVERNMENT WAS GOING TO FURNISH THE HOLE PUNCH, THERE WOULD HAVE BEEN NO NEED TO SET OUT THE SPECIFICATIONS, AND THE IFB'S PROVISIONS WOULD HAVE STATED THAT HOLES WOULD BE PUNCHED WITH GOVERNMENT-FURNISHED PUNCHES.

"FURTHERMORE, IF THE IFB WAS AMBIGUOUS, IT WAS INCUMBENT UPON NETWORK TO RESOLVE ANY SUCH AMBIGUITIES. ARTICLE VII, SET FORTH ON PAGE 12 OF THE IFB, PROVIDES IN PART, AS FOLLOWS:

'BIDDERS SHOULD VISIT THE SITE AND TAKE SUCH OTHER STEPS AS MAY BE REASONABLY NECESSARY TO ASCERTAIN THE NATURE AND LOCATION OF THE WORK, AND THE GENERAL AND LOCAL CONDITIONS WHICH CAN AFFECT THE WORK OR THE COST THEREOF. FAILURE TO DO SO WILL NOT RELIEVE BIDDERS FROM RESPONSIBILITY FOR ESTIMATING PROPERLY THE DIFFICULTY OR COST OF SUCCESSFULLY PERFORMING THE WORK.'

"PURSUANT TO THIS PROVISION IN THE IFB, NETWORK REQUESTED AN APPOINTMENT WITH THE GOVERNMENT TECHNICAL REPRESENTATIVE AT THE SITE (1725 15TH STREET, N. E; WASHINGTON, D. C.) AND AGREED TO SUCH A MEETING AT 10:00 A.M; APRIL 23, 1970. THIS WAS LATER CHANGED, AT NETWORK'S REQUEST, TO 3:00 P.M. ON THE SAME DAY. NETWORK WAS GIVEN THE OPPORTUNITY TO DISCUSS ANY OF THE TERMS AND CONDITIONS OF THE IFB AND ONLY RAISED ONE QUESTION, WHICH WAS WITH REGARD TO THE REQUIRED AVERAGE MONTHLY OUTPUT OF 150,000 UNITS. AT NO TIME DID NETWORK QUESTION ANY OTHER TERMS AND CONDITIONS, NOR DID IT INDICATE THAT THE IFB WAS AMBIGUOUS AS TO ITS REQUIREMENTS. OTHER BIDDERS REQUESTED CONFIRMATION OF THE CONDITION THAT THEY PROVIDE THE EQUIPMENT AND SUPPLIES NECESSARY FOR PERFORMANCE, AND INDICATED THAT COST OF SAME WOULD BE INCLUDED IN THEIR BIDS."

WE CANNOT AGREE WITH HUD'S POSITION. THE WORD "FACILITIES" AS SET FORTH IN ARTICLE 1.A, STATEMENT OF WORK, IS A VERY INDEFINITE TERM AND IS OFTEN USED IN WIDELY DIFFERING SENSES. SEE 35 C.J.S. 488. IN HARTFORD ELECTRIC LIGHT CO; V FEDERAL POWER COMMISSION (CCA 2D.), 131 F. 2D 953 (1942), IT WAS HELD THAT AN ELECTRIC COMPANY'S CORPORATE ORGANIZATION, CONTRACTS, ACCOUNTS, MEMORANDUMS, PAPERS AND OTHER RECORDS, SO FAR AS THEY WERE UTILIZED IN THE SALES OF ELECTRIC POWER CONSTITUTED "FACILITIES." IT WAS FURTHER STATED THAT THE WORD "FACILITIES" IS GENERALLY REGARDED AS A WIDELY INCLUSIVE TERM EMBRACING ANYTHING WHICH AIDS OR MAKES EASIER THE PERFORMANCE OF THE ACTIVITIES INVOLVED IN THE BUSINESS OF A PERSON OR CORPORATION.

TO HOLD THAT THE "FACILITIES" TO BE PROVIDED BY THE GOVERNMENT INCLUDED ONLY THOSE FACILITIES SET FORTH IN ARTICLE I, PARAGRAPH D.2- APPROXIMATELY 10,000 SQUARE FEET OF OFFICE SPACE AND FURNITURE (TABLES AND CHAIRS), AND DID NOT INCLUDE THE MATERIALS AND EQUIPMENT TO BE USED IN PERFORMING THE WORK AS SET FORTH IN ATTACHMENT A, WOULD SEEM TO REQUIRE HOLDING THAT THE CONTRACTOR MUST ALSO FURNISH ALL MATERIALS AND EQUIPMENT OTHER THAN TABLES AND CHAIRS, SUCH AS WASTEPAPER BASKETS, COAT RACKS, ETC. QUESTION ALSO THEN ARISES WHETHER THE CONTRACTOR MIGHT NOT BE REQUIRED TO FURNISH "SERVICES", SUCH AS CLEANING, TRASH DISPOSAL, AND EVEN ELECTRIC POWER AND HEAT.

IT IS STATED THAT NETWORK, WHILE INSPECTING THE SITE TO ASCERTAIN THE NATURE AND LOCATION OF THE WORK, AND THE GENERAL AND LOCAL CONDITIONS WHICH COULD AFFECT THE WORK OR THE COST THEREOF, AS CAUTIONED TO DO BY ARTICLE VII OF THE SOLICITATION, DID NOT RAISE ANY QUESTIONS CONCERNING THE FURNISHING OF EQUIPMENT AND SUPPLIES NECESSARY FOR PERFORMANCE, WHILE OTHER BIDDERS DID. THIS, IN OUR OPINION, INDICATES THAT THE SOLICITATION WAS AMBIGUOUS AS TO EXACTLY WHAT WAS TO BE FURNISHED BY THE GOVERNMENT. IN THIS CONNECTION SECTION 1-2.207(D) OF THE FPR PROVIDES:

"ANY INFORMATION GIVEN TO A PROSPECTIVE BIDDER CONCERNING AN INVITATION FOR BIDS SHALL BE FURNISHED PROMPTLY TO ALL OTHER PROSPECTIVE BIDDERS, AS AN AMENDMENT TO THE INVITATION, IF SUCH INFORMATION IS NECESSARY TO BIDDERS IN SUBMITTING BIDS ON THE INVITATION OR IF THE LACK OF SUCH INFORMATION WOULD BE PREJUDICIAL TO UNINFORMED BIDDERS. NO AWARD SHALL BE MADE ON THE INVITATION UNLESS SUCH AMENDMENT HAS BEEN ISSUED IN SUFFICIENT TIME TO PERMIT ALL PROSPECTIVE BIDDERS TO CONSIDER SUCH INFORMATION IN SUBMITTING OR MODIFYING THEIR BIDS."

FOR THE FOREGOING REASONS, WE BELIEVE THAT THE REASONABLE INTERPRETATION OF THE REQUIREMENTS OF THE SOLICITATION IS THAT THE CONTRACTOR IS TO PROVIDE THE TECHNICAL AND CLERICAL PERSONNEL (INCLUSIVE OF ALL COSTS AND EXPENSES IN CONNECTION WITH SUCH PERSONNEL), TO PREPARE AN AVERAGE OF 150,000 FILES (FILES WITH EXTRACTABLE DATA), PER MONTH IN ACCORDANCE WITH THE PROCEDURES AND USING THE MATERIALS AND EQUIPMENT SET FORTH IN ATTACHMENT A, AND THAT THE GOVERNMENT WILL FURNISH ALL "FACILITIES", THAT IS, EVERYTHING REASONABLY NECESSARY FOR SUCH EMPLOYEES TO PERFORM THE WORK IN ACCORDANCE WITH THE PRESCRIBED PROCEDURES. HOWEVER, THIS INTERPRETATION IS NOT WHAT WAS INTENDED AND IS NOT IN ACCORDANCE WITH THE ADVICE WHICH APPARENTLY WAS GIVEN TO AT LEAST SOME OF THE BIDDERS.

UNDER THE TERMS OF THE CONTRACT AWARDED PURSUANT TO THE SOLICITATION, THE CONTRACT PERIOD EXPIRES ON JUNE 30, 1970, WITH AN OPTION TO RENEW VESTED IN THE GOVERNMENT. WE HAVE BEEN ADVISED THAT THE OPTION HAS NOT BEEN EXERCISED. IN THE CIRCUMSTANCES, WE BELIEVE THAT THE OPTION SHOULD NOT BE EXERCISED AND PROCUREMENT SHOULD BE RESOLICITED UNDER DEFINITE SPECIFICATIONS WHICH WILL AFFORD FULL AND FREE COMPETITION.