B-162922, DEC. 13, 1967

B-162922, DEC. 13, 1967

BIDS - SALES - AWARD TO OTHER THAN HIGH BIDDER DECISION TO CAPCO STEEL CO. CONCURRING IN ADMINISTRATIVE RECOMMENDATION OF DEFENSE SUPPLY AGENCY THAT SURPLUS NOT BE RELEASED TO PROTESTANT, THAT CONTRACT BE CANCELLED, AND AWARD MADE TO HIGHER BIDDER, B-AND-J METALS CO. A HIGH BIDDER WHO BID ON SURPLUS SCRAP ON A PER POUND BASIS RATHER THAN ON AN ITEM PER POUND PRICE BASIS AS REQUIRED BY THE SALES INVITATION SHOULD, SINCE THE BASIS WAS READILY CONVERTIBLE, HAVE HAD THE PRICE CONVERTED TO A DEFINITE PRICE FOR THE ITEM. THEREFORE RECOGNITION OF SUCH BID WAS IMPROPER AND AWARD TO THE SECOND HIGH BIDDER SHOULD BE CANCELLED.

TO CAPCO ALLOY STEEL COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAMS AND LETTERS DATED NOVEMBER 14, 24, 27 AND 30, 1967, PROTESTING THE GOVERNMENT'S REFUSAL TO RELEASE TO YOU MATERIAL UNDER ITEM 86 OF DEFENSE SUPPLY AGENCY SALES INVITATION 44-8035, ISSUED BY THE OAKLAND, CALIFORNIA, DEFENSE SURPLUS SALES OFFICE, FOR WHICH A SALES CONTRACT WAS AWARDED TO YOUR COMPANY. ITEM 86 WAS DESCRIBED AS FOLLOWS: "EAR, STEEL, ROUND: CORROSION RESISTANT, 316 LSS, REFORGING STOCK, 10 INCH DIAMETER, FIVE LENGTHS FROM 5 FEET 10-3/4 INCHES TO 11 FEET 3-3/4 INCHES. TOTAL 44 FEET. OUTSIDE BLDG. 571 - UNPACKED UNUSED - EXCELLENT CONDITION. TOTAL COST $10,485. EST. TOTAL WT. 11,800 LBS. 5 EACH.' PARAGRAPH 3 OF THE GENERAL SALE TERMS AND CONDITIONS REQUIRED THAT, UNLESS OTHERWISE SPECIFIED, BIDS BE SUBMITTED ON THE BASIS OF THE UNIT SPECIFIED FOR THE ITEM IN THE INVITATION. THE PARAGRAPH FURTHER PROVIDED THAT THE GOVERNMENT RESERVES THE RIGHT TO WAIVE ANY TECHNICAL DEFECTS IN BIDS WHEN IN ITS BEST INTEREST.

YOUR BID FOR ITEM 86 WAS $628.86 EACH FOR A TOTAL PRICE OF $3,144.30. THE BID OF B AND J METALS COMPANY WAS SUBMITTED FOR 11,800 POUNDS AT ?31153 PER POUND OR A TOTAL PRICE OF $3,676.06. HOWEVER, THE SALES OFFICE REJECTED SUCH BID AS NONRESPONSIVE BECAUSE IT WAS NOT SUBMITTED ON THE BASIS OF THE UNIT SPECIFIED FOR THAT ITEM. AN AWARD WAS MADE TO YOUR COMPANY AS THE HIGHEST RESPONSIVE BIDDER FOR THE MATERIAL DESCRIBED IN ITEM 86. B AND J METALS PROTESTED THE REJECTION OF ITS BID. DELIVERY OF THE MATERIAL HAS BEEN WITHHELD PENDING RESOLUTION OF THE PROTEST.

WHILE YOUR BID WAS SUBMITTED ON AN ITEM PRICE BASIS AND YOU REPORT THAT OTHER BIDDERS USED THE SAME BASIS FOR BIDDING, THE BIDDER SUBMITTING THE HIGHEST TOTAL PRICE BID WAS B AND J METALS COMPANY WHICH USED A PRICE PER POUND BASIS AS ITS UNIT PRICE BID. THE OWNER OF B AND J METALS COMPANY HAS STATED THAT HE PERSONALLY EXAMINED THE MATERIAL AND FOUND IT TO BE IN VARYING LENGTHS OF 7 FEET 2 INCHES; 5 FEET 11 INCHES; 11 FEET 4 INCHES; 9 FEET 5 INCHES; AND 10 FEET 6 INCHES FOR A TOTAL FOOTAGE OF 44 FEET, 4 INCHES AND, IN EFFECT, THAT BECAUSE THE PIECES VARIED IN LENGTH AND THE TOTAL WEIGHT WAS SHOWN, HE BID A UNIT PRICE ON A PER POUND BASIS. YOU CONTEND THAT SINCE A UNIT PRICE PER EACH BASIS WAS SOLICITED A BID ON A PER POUND BASIS WAS NONRESPONSIVE. YOU CONTEND FURTHER THAT BECAUSE STAINLESS STEEL STOCK VARIES IN WEIGHT ACCORDING TO GRADE OF STEEL USED THAT A UNIT PRICE BID ON A PER POUND BASIS WOULD BE INACCURATE AND IMPOSSIBLE OF COMPUTATION.

THE ADMINISTRATIVE REPORT OF THE DEFENSE LOGISTICS SERVICES CENTER SHOWS THE LENGTHS OF THE BARS TO BE AS FOLLOWS: 1 OF 70-3/4 INCHES; 1 OF 86 INCHES; 1 OF 113 INCHES; 1 OF 126-1/4 INCHES AND 1 OF 135-3/4 INCHES. THE PROPERTY HAS BEEN FURTHER IDENTIFIED TO FEDERAL STOCK NUMBER (FSN) 9640- 261-5744. DESCRIPTIVE DATA APPLICABLE TO THAT IDENTIFICATION SHOWS THE ITEM TO WEIGH 267 POUNDS PER FOOT. UNDER THE TERMS OF THE WARRANTY IN THE INVITATION, THE PURCHASER IS GUARANTEED THAT 44 FEET OF 10-INCH DIAMETER STOCK WILL BE DELIVERED. SINCE EACH FOOT OF THE BAR STOCK HAS A DEFINITE WEIGHT ATTRIBUTABLE TO IT OF 267 POUNDS, THE COMPUTED WEIGHT FOR THE 44- FOOT TOTAL STATED TO BE DELIVERED WOULD BE 11,748 POUNDS. BECAUSE OF THE ADDITIONAL .31FEET INVOLVED, THE ACTUAL QUANTITY AVAILABLE WOULD APPROACH 11,830.77 POUNDS.

BECAUSE OF THE ABOVE FACTORS, IT IS OUR VIEW THAT THE BID OF B AND J METALS COMPANY OF ?31153 PER POUND IS READILY CONVERTIBLE TO A DEFINITE BID PRICE FOR THE ITEM AND THEREFORE SHOULD HAVE BEEN CONSIDERED FOR AWARD. B-159018, JUNE 6, 1966; 37 COMP. GEN. 190. WE HELD IN THE LATTER CASE THAT WHERE A HIGH BIDDER ENTERED HIS BID ON GROSS TON RATHER THAN POUND UNIT BASIS AS SPECIFICALLY REQUIRED BY THE INVITATION, THE DEVIATION DID NOT AFFECT THE PRICE OR SUBSTANCE OF THE BID OR WORK AN INJUSTICE TO THE OTHER BIDDERS AND THAT THEREFORE THE TECHNICAL DEVIATION SHOULD HAVE BEEN WAIVED. WE HAVE HELD FURTHER THAT AN AUTOMATIC REJECTION OF A BID BECAUSE OF FAILURE TO CONFORM TO A PURELY TECHNICAL OR OVERLITERAL READING OF THE STATED REQUIREMENTS MAY BE AS ARBITRARY AS THE WAIVER OF NONRESPONSIVENESS TO MATERIAL AND SUBSTANTIAL REQUIREMENTS. 40 COMP. GEN. 435.

IN THE CIRCUMSTANCES, THE CONTRACTING OFFICER ACTED IN ERROR WHEN HE AWARDED A CONTRACT FOR ITEM 86 TO YOUR COMPANY. IN THAT CONNECTION IT WAS HELD IN 36 COMP. GEN. 94 THAT WHERE THE HIGHEST BID FOR THE PURCHASE OF GOVERNMENT SURPLUS SOLD UNDER COMPETITIVE BIDDING PROCEDURES WAS PROPER, BUT THROUGH ADMINISTRATIVE ERROR THE AWARD WAS MADE TO THE SECOND HIGHEST BIDDER, THE INTERESTS OF THE UNITED STATES, AS WELL AS THE DUTY OF THE CONTRACTING OFFICER TO AWARD SUCH CONTRACTS TO THE HIGHEST BIDDER, REQUIRED CANCELLATION OF THE CONTRACT AND AWARD TO THE HIGHEST BIDDER. ARRIVING AT THAT CONCLUSION, THE CITED DECISION QUOTED FROM SCOTT V. UNITED STATES, 44 CT. CL. 524, 527, AS FOLLOWS:

"THE AGENTS OF THE GOVERNMENT STAND UPON A DIFFERENT FOOTING FROM PRIVATE INDIVIDUALS IN THE MATTER OF ADVERTISING FOR THE LETTING OF CONTRACTS IN BEHALF OF THE UNITED STATES. THEY HAVE NO DISCRETION. THEY MUST ACCEPT THE LOWEST OR THE HIGHEST RESPONSIBLE BID, OR REJECT ALL AND READVERTISE.'

IN VIEW OF THE FOREGOING, OUR OFFICE CONCURS IN THE RECOMMENDATION OF THE ADMINISTRATIVE OFFICE THAT THE AWARD TO YOUR COMPANY BE CANCELED AND THAT THE ITEM BE AWARDED TO B AND J METALS COMPANY.