Skip to main content

B-169255, APR. 16, 1970

B-169255 Apr 16, 1970
Jump To:
Skip to Highlights

Highlights

INCREASE UNIT PRICES BY 20 PERCENT TO COVER ADDITIONAL FREIGHT" AND WHO CONTENDS WORDS REPRESENTED OPTION AND THAT 20 PERCENT WAS ERRONEOUSLY INSERTED FOR 2 PERCENT. TO PER CASE INCORPORATED: REFERENCE IS MADE TO YOUR LETTER OF MARCH 6. THE IFB WAS ISSUED ON DECEMBER 16. "SECTION 'D' DELIVERIES" ADVISED BIDDERS THAT DELIVERY WAS TO BE MADE IN INCREMENTS TO VARIOUS LOCATIONS AT THREE DIFFERENT TIMES AND FURTHER ADVISED: "BIDDER SHOULD NOT OFFER ALTERNATE DELIVERY SCHEDULE. ATTENTION IS INVITED TO CLAUSE NR. 272.2 DELIVERY OFFER CONDITION.". PROVIDES: "COMPLETION OF DELIVERY BY THE TIME SPECIFIED IN THIS SOLICITATION IS AN IMPORTANT FACTOR AND WILL BE CONSIDERED IN MAKING AWARDS. OFFERS FOR THE TOTAL QUANTITY MUST INDICATE DELIVERIES IN ACCORDANCE WITH THE SPECIFIED SCHEDULE. * * * ANY OFFERS MADE ON THE BASIS OF AN ALTERNATE SCHEDULE WILL BE REJECTED AS NONRESPONSIVE.".

View Decision

B-169255, APR. 16, 1970

BIDS--QUALIFIED DELIVERY PROVISIONS INVITATION REQUIRED DELIVERY IN INCREMENTS TO VARIOUS LOCALITIES AT 3 DIFFERENT TIMES AND WARNED THAT ALTERNATE SCHEDULES WOULD CAUSE REJECTION. UNSUCCESSFUL NONRESPONSIVE BIDDER WHO INSERTED STATEMENT "IF THESE ITEMS CANNOT ALL BE SHIPPED IN THE FIRST DELIVERY PERIOD, INCREASE UNIT PRICES BY 20 PERCENT TO COVER ADDITIONAL FREIGHT" AND WHO CONTENDS WORDS REPRESENTED OPTION AND THAT 20 PERCENT WAS ERRONEOUSLY INSERTED FOR 2 PERCENT, OFFERS NO BASIS FOR OBJECTION SINCE OFFER, BASED ON COMPLETE DELIVERY AT ONE TIME, CLEARLY DEVIATED FROM INVITATION'S SCHEDULE; MOREOVER, CONSISTENT USE OF 20 PERCENT NEGATES ALLEGATION OF ERROR. SEE COMP. GEN. DECS. CITED.

TO PER CASE INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 6, 1970, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) NO. DSA 100-70-B-0887, ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA.

THE IFB WAS ISSUED ON DECEMBER 16, 1969, FOR A QUANTITY OF DISPOSABLE HEADREST COVERS. "SECTION 'D' DELIVERIES" ADVISED BIDDERS THAT DELIVERY WAS TO BE MADE IN INCREMENTS TO VARIOUS LOCATIONS AT THREE DIFFERENT TIMES AND FURTHER ADVISED:

"BIDDER SHOULD NOT OFFER ALTERNATE DELIVERY SCHEDULE. ATTENTION IS INVITED TO CLAUSE NR. 272.2 DELIVERY OFFER CONDITION."

CLAUSE 272.2, IN PERTINENT PART, PROVIDES:

"COMPLETION OF DELIVERY BY THE TIME SPECIFIED IN THIS SOLICITATION IS AN IMPORTANT FACTOR AND WILL BE CONSIDERED IN MAKING AWARDS. OFFERS, WHETHER FOR THE TOTAL QUANTITY OR FOR LESS THAN THE TOTAL QUANTITY OF ANY ITEM OR SUBITEM, MUST OFFER DELIVERIES IN EACH OF THE DELIVERY PERIODS SPECIFIED HEREIN. OFFERS FOR THE TOTAL QUANTITY MUST INDICATE DELIVERIES IN ACCORDANCE WITH THE SPECIFIED SCHEDULE. * * * ANY OFFERS MADE ON THE BASIS OF AN ALTERNATE SCHEDULE WILL BE REJECTED AS NONRESPONSIVE."

THE BIDS, WHEN OPENED, INDICATED THE FOLLOWING PRICES PER BOX FOR DELIVERY OF THE HEADREST COVERS TO THE THREE REQUIRED LOCATIONS:

PER CASE, INC. $4.20 $4.14 $4.33

ACME PAPER PRODUCTS CO; INC. 4.30 4.404.40

BAY STATE NOVELTY CO; INC. 6.20 6.20 6.20

YOUR ALL OR NONE BID WAS LOW. HOWEVER, FOLLOWING YOUR PRICE OFFERS ON PAGES 6 AND 7 OF THE IFB AND AGAIN ON PAGE 14 IN THE SECTION PERTAINING TO DELIVERIES, YOU INSERTED THE STATEMENT THAT:

"IF THESE ITEMS CANNOT ALL BE SHIPPED IN THE FIRST DELIVERY PERIOD, INCREASE UNIT PRICES BY 20% TO COVER ADDITIONAL FREIGHT."

IT WAS THE CONTRACTING OFFICER'S VIEW THAT THIS STATEMENT CONSTITUTED AN ALTERNATE DELIVERY SCHEDULE AND, CONSEQUENTLY, YOUR LOW OFFER WAS REJECTED AS NONRESPONSIVE. APPARENTLY, YOU CONTEND THAT YOU DID NOT OFFER AN ALTERNATE DELIVERY SCHEDULE BUT MERELY GAVE THE GOVERNMENT THE OPTION TO CHOOSE ONE OFFER OR THE OTHER. IN ANY EVENT, THE ADDITION OF 20 PERCENT TO YOUR BIDS FOR DELIVERIES IN ACCORDANCE WITH THE REQUIRED DELIVERY SCHEDULE RESULTS IN OFFERS OF $5.04, $4.968 AND $5.196, ALL OF WHICH EXCEEDED THE PRICES OFFERED BY ACME PAPER PRODUCTS CO; INC.

THE PROCUREMENT ACTIVITY STATES WITH REFERENCE TO THE 20 PERCENT ADDITION OFFERED BY YOU IN YOUR BID THAT:

"ON 12 JANUARY 1970 OFFEROR CALLED AND VERIFIED BY LETTER OF SAME DATE THAT TYPOGRAPHICAL ERROR HAD BEEN MADE AND INCREASE SHOULD HAVE BEEN 2% INSTEAD OF 20%; THAT 20% INCREASE WAS RIDICULOUS SINCE MOST OF COST IS FOR FABRIC, AND THAT ERROR SHOULD NOT JEOPARDIZE BID. BY LETTER DATED 13 JANUARY 1970 CONTRACTOR WAS REQUESTED TO SUBMIT EVIDENCE ESTABLISHING THE EXISTENCE OF THE ERROR. BY LETTER DATED 29 JANUARY 1970 OFFEROR ADVISED IT INTENDED TO QUOTE 2% FOR 3 SEPARATE DELIVERIES TO INDICATE COST OF TYING UP MONEY FOR THAT TIME; THAT 2% WOULD INCREASE PRICE BY $757.50 WHEREAS 20% WOULD INCREASE PRICE BY $7575.00 WHICH IS AN UNBELIEVABLE CHARGE FOR 60 DAY DELIVERY; THAT COMMERCIAL INVOICES USUALLY CHARGE 1 1/2% INTEREST FOR OVERDUE PAYMENTS IN ADDITION TO TRIPLE INVOICING; THAT USE OF WORD 'FREIGHT' ON BID WAS IN ERROR. OFFEROR ADVISED BY TELEPHONE ON 17 FEBRUARY 1970 THAT HE DID NOT SUBMIT WORK SHEETS BECAUSE THE 2% ADDITION IS A COMMON CHARGE AND HE WOULD NOT CONSIDER WITHDRAWAL OF OFFER."

THE ACTIVITY THEN ADVISES THAT IF A 2 PERCENT INCREASE WAS USED INSTEAD OF 20 PERCENT, YOUR BIDS WOULD HAVE BEEN $4.284, $4.2228, AND $4.4166 WHICH, WITH YOUR 1 PERCENT TIME DISCOUNT AND YOUR ALL OR NONE OFFER, WOULD HAVE MADE YOUR BID LOW OVERALL. NONETHELESS, THE PROCURING ACTIVITY, ON THE BASIS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3 (A) (3), REFUSED TO ALLOW A REDUCTION IN YOUR OFFERED PRICES. ON THE RECORD BEFORE US, WE FIND NO BASIS FOR SUSTAINING YOUR PROTEST.

WHETHER LABELLED AN "OPTION" OR OTHERWISE, YOUR OFFER, BASED ON COMPLETE DELIVERY AT ONE TIME, CLEARLY DEVIATED FROM THE DELIVERY SCHEDULE OF THE IFB. ASIDE FROM THE CLEAR WARNINGS OF THE SOLICITATION THAT SUCH OFFERS WOULD BE REJECTED AS NONRESPONSIVE, ASPR 2-404.2 (C) PROVIDES THAT:

"ANY BID WHICH FAILS TO CONFORM TO THE DELIVERY SCHEDULE OR PERMISSIBLE ALTERNATES THERETO STATED IN THE INVITATION FOR BIDS SHALL BE REJECTED AS NONRESPONSIVE." (EMPHASIS ADDED)

OUR OFFICE HAS SUSTAINED THE REJECTION OF BIDS OFFERING DELIVERY SCHEDULES LATER THAN THAT SPECIFIED; B-162096, OCTOBER 9, 1967, AND CASES CITED THEREIN; AS WELL AS THOSE PROPOSING AN EARLIER DELIVERY TIME. 168176, DECEMBER 1, 1969.

FURTHERMORE, SINCE A STATED DELIVERY TIME IS CONSIDERED A MATERIAL REQUIREMENT OF A PROCUREMENT UNLESS OTHERWISE SPECIFIED, IT CANNOT BE WAIVED. NOR CAN ACCEPTANCE OF A BID WHICH DEVIATES FROM THE REQUIRED DELIVERY SCHEDULE BIND THE GOVERNMENT. 36 COMP. GEN. 181 (1956). AT PAGE 183 OF THAT DECISION WE SAID:

"THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE SAME OFFERED IN THE INVITATION. 34 COMP. GEN. 119. WHILE THE CONTRACTING OFFICER MAY WAIVE INFORMALITIES IN BIDS, THIS AUTHORITY DOES NOT EXTEND TO THE WAIVER OF MATERIAL VARIATIONS TO THE TERMS AND CONDITIONS OF THE INVITATION. AWARD A CONTRACT TO A LOW BIDDER WITHOUT REGARD TO THE TERMS AND CONDITIONS OF DELIVERY ADVERTISED WOULD DISCRIMINATE AGAINST OTHER BIDDERS * * *. A PROVISION OF AN INVITATION WHICH ON ITS FACE ESTABLISHES A DEFINITE REQUIREMENT AS TO TIME OF DELIVERY IS MATERIAL. CF. B-104418, AUGUST 23, 1951. THE ACCEPTANCE OF A BID NOT COMPLYING WITH SUCH MATERIAL PROVISION IS UNAUTHORIZED AND DOES NOT BIND THE GOVERNMENT. 17 COMP. GEN. 554, 559. * * *."

THE CONTRACTING OFFICER WAS, THEREFORE, CORRECT IN REJECTING AS NONRESPONSIVE YOUR OFFER TO SUPPLY THE SOLICITED ITEM BY A ONE-TIME DELIVERY; OTHERWISE, A 20 PERCENT INCREASE WOULD BE REQUIRED.

ALTHOUGH YOU APPARENTLY FEEL THAT THE CONTRACTING OFFICER SHOULD HAVE KNOWN THAT THE 20 PERCENT INCREASE IN YOUR BID PRICES WAS A MISTAKE, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER WAS ON NOTICE OF THE ALLEGED ERROR AT THE TIME OF BID OPENING. IN EACH OF THE THREE INSTANCES WHERE YOU STATED THAT YOUR BID PRICES WERE TO BE INCREASED IN THE EVENT THREE DELIVERIES WERE REQUIRED, YOU CONSISTENTLY USED A 20 PERCENT FIGURE. SUCH CONSISTENT USE NEGATES YOUR ALLEGATION OF ERROR. MOREOVER, A 20 PERCENT INCREASE IN PRICE PUTS YOUR OFFER BETWEEN THOSE OF ACME AND BAY STATE; THAT IS TO SAY, YOUR INCREASED OFFER IS NOT OUT OF LINE WITH THE OTHER BIDS RECEIVED. WE BELIEVE, THEN, THAT NO BASIS EXISTS FOR HOLDING THAT THE CONTRACTING OFFICER SHOULD HAVE KNOWN THAT YOUR 20 PERCENT PRICE INCREASE WAS THE RESULT OF A MISTAKE.

CORRECTION OF YOUR BID ON THE BASIS OF A 2 PERCENT, AS OPPOSED TO A 20 PERCENT, PRICE INCREASE WAS DENIED BY THE CONTRACTING OFFICER UNDER ASPR 2 -406.3 (A) (3) WHICH PROVIDES:

"(3) WHERE THE BIDDER REQUESTS PERMISSION TO CORRECT A MISTAKE IN HIS BID AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, A DETERMINATION PERMITTING THE BIDDER TO CORRECT THE MISTAKE MAY BE MADE; PROVIDED THAT, IN THE EVENT SUCH CORRECTION WOULD RESULT IN DISPLACING ONE OR MORE LOWER BIDS, THE DETERMINATION SHALL NOT BE MADE UNLESS THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. IF THE EVIDENCE IS CLEAR AND CONVINCING ONLY AS TO THE MISTAKE, BUT NOT AS TO THE INTENDED BID, A DETERMINATION PERMITTING THE BIDDER TO WITHDRAW HIS BID MAY BE MADE."

AS PREVIOUSLY NOTED, THE 2 PERCENT CORRECTION WOULD MAKE YOUR BID THE LOWEST OF THE THREE AND WOULD HAVE THE EFFECT OF DISPLACING THE OTHERWISE LOW RESPONSIVE BIDDER. IN SUCH A SITUATION, THE PROSCRIPTION IN THE ABOVE PROVISION IS OBVIOUSLY APPLICABLE. SINCE, FROM THE RECORD, NEITHER THE MISTAKE YOU ALLEGE NOR YOUR INTENDED BID ARE SUBSTANTIALLY ASCERTAINABLE FROM THE IFB AND BID ITSELF, THE CONTRACTING OFFICER WAS CORRECT IN REFUSING TO ALLOW THE CORRECTION YOU SOUGHT. B-166523, AUGUST 5, 1969.

GAO Contacts

Office of Public Affairs