B-159579, OCT. 14, 1966

B-159579, OCT. 14, 1966

TO ROSS, MATZKIN AND DAY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 22, 1966, ON BEHALF OF GILMORE INDUSTRIES, INCORPORATED, REQUESTING THAT OUR DECISION OF JULY 20, 1966, TO MR. R. A. LEVI, CHIEF, PROCUREMENT SECTION, NATIONAL BUREAU OF STANDARDS (NBS), BE REVISED TO ADVISE MR. LEVI THAT READVERTISEMENT OF THE NBS'S REQUIREMENT FOR THREE UNIVERSAL TESTING MACHINES IS UNNECESSARY, AND THAT AN AWARD MAY BE MADE TO GILMORE UNDER THE FIRST INVITATION, UNLESS HE DETERMINES THAT ITS BID PRICE WAS UNREASONABLE. IT IS OUR UNDERSTANDING THAT BIDS SUBMITTED UNDER THE READVERTISEMENT ARE SCHEDULED FOR OPENING ON OCTOBER 7, 1966.

IN OUR DECISION OF JULY 20 WE HELD THAT THE SUBJECT INVITATION WAS DEFECTIVE BECAUSE OF THE DESCRIPTIVE LITERATURE CLAUSE INCLUDED THEREIN AND THAT THE REQUIREMENT SHOULD THEREFORE EITHER BE READVERTISED UNDER SPECIFICATIONS WHICH PROPERLY SET FORTH THE NEEDS OF THE GOVERNMENT AND THE STANDARDS TO BE APPLIED IN THE EVALUATION OF BIDS, OR THAT NEGOTIATIONS BE CONDUCTED IN ACCORDANCE WITH 41 U.S.C. 252 (C) (14), WHICH REQUIRES NEGOTIATION WITH ALL RESPONSIBLE BIDDERS WHERE THE BID PRICES ARE CONSIDERED UNREASONABLE.

IT IS YOUR CONTENTION THAT HAD OUR OFFICE BEEN COGNIZANT OF ALL THE FACTS CONCERNING THE RESPONSIVENESS OF THE STEELCRAFT AND TINIUS OLSEN BIDS, WE WOULD NOT HAVE CONCLUDED THAT THE DEFECT IN THE INVITATION REQUIRED CANCELLATION AND READVERTISEMENT. IN THIS CONNECTION, YOU CONTEND THAT WE WERE NOT AWARE OF CERTAIN FACTS WHICH MAKE THE STEELCRAFT BID NONRESPONSIVE IRRESPECTIVE OF ITS NONCOMPLIANCE WITH THE DESCRIPTIVE LITERATURE REQUIREMENT. MOREOVER, YOU INTERPRET OUR DECISION AS INDICATING THAT TINIUS OLSEN'S NONRESPONSIVENESS WAS DUE TO EXCEPTIONS TAKEN TO THE SPECIFICATIONS IN THE COVER LETTER TRANSMITTING ITS BID AND UNRELATED TO COMPLIANCE WITH THE DESCRIPTIVE LITERATURE CLAUSE. THEREFORE, YOU CONCLUDE THAT ANY DEFECT IN THE INVITATION WAS NOT PREJUDICIAL TO EITHER OF THESE BIDDERS AND CANCELLATION AND READVERTISEMENT IS NEITHER NECESSARY NOR JUSTIFIED.

YOUR NEXT POINT IS THAT SINCE NO DETERMINATION HAS BEEN MADE THAT GILMORE'S BID PRICE IS UNREASONABLE, THE REQUIREMENT OF 41 U.S.C. 252 (C) (14) THAT NEGOTIATIONS BE CONDUCTED WITH ALL RESPONSIBLE BIDDERS IS NOT FOR APPLICATION. THEREFORE, GILMORE'S VOLUNTARY REDUCTION OF ITS BID PRICE WOULD NOT VIOLATE THE PROVISIONS OF THE STATUTE AND ITS REDUCED BID IN THE AMOUNT OF $219,900 MAY PROPERLY BE ACCEPTED WITHOUT NEGOTIATING WITH STEELCRAFT AND TINIUS OLSEN.

WE CANNOT AGREE WITH YOUR ARGUMENT THAT TINIUS OLSEN WAS NOT PREJUDICED BY THE DEFECTIVE DESCRIPTIVE LITERATURE CLAUSE. AS POINTED OUT ON PAGE 4 OF OUR EARLIER DECISION THE LANGUAGE OF SAID CLAUSE, TO THE EFFECT, THAT "MINOR" DEVIATIONS FROM THE SPECIFICATIONS MAY BE PROPOSED AND WILL NOT REQUIRE REJECTION OF THE BID PERMITTED BIDDERS TO OFFER EQUIPMENT VARYING FROM THE SPECIFICATIONS TO SOME UNDEFINED EXTENT. SUCH LANGUAGE IS SO INDEFINITE AND AMBIGUOUS THAT IT CANNOT BE SAID TO PERMIT THE PREPARATION AND EVALUATION OF BIDS ON A COMMON BASIS. IN VIEW OF THIS LANGUAGE, TO FIND THE TINIUS OLSEN BID NONRESPONSIVE FOR EXCEPTIONS TO THE SPECIFICATION IS MANIFESTLY PREJUDICIAL. SINCE AT LEAST TINIUS OLSEN WAS CLEARLY PREJUDICED BY THE DEFECTIVE LITERATURE CLAUSE, WE BELIEVE THE FULL AND FREE COMPETITION CONTEMPLATED BY FORMAL ADVERTISING PROCEDURES WAS NOT OBTAINED. WHILE WE HAVE REPEATEDLY OBSERVED THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER OR PROSPECTIVE BIDDER HAS LEARNED HIS COMPETITOR'S PRICES IS A SERIOUS MATTER AND SUCH ACTION SHOULD NOT BE TAKEN EXCEPT FOR COGENT REASONS, WE BELIEVE THAT THE IMPROPER INCLUSION OF THE DEFECTIVE DESCRIPTIVE LITERATURE CLAUSE AND THE PREJUDICIAL EFFECT IT HAD ON ONE OR MORE OF THE BIDDERS REQUIRES THAT THE INVITATION BE CANCELLED.

IN THESE CIRCUMSTANCES, WHETHER THE STEELCRAFT BID WAS NONRESPONSIVE IRRESPECTIVE OF THE DESCRIPTIVE LITERATURE CLAUSE, AS YOU ALLEGE, IS ACADEMIC AND NEED NOT BE FURTHER CONSIDERED BY OUR OFFICE.

SINCE, AS YOU POINT OUT, NO DETERMINATION HAS BEEN MADE THAT THE BID PRICES UNDER THE ORIGINAL SOLICITATION WERE UNREASONABLE, THERE WOULD BE NO AUTHORITY, ABSENT SUCH A DETERMINATION, TO NEGOTIATE A CONTRACT PURSUANT TO 41 U.S.C. 252 (C) (14), AND READVERTISEMENT OF THE REQUIREMENT WOULD BE THE PROPER ADMINISTRATIVE ACTION.

ACCORDINGLY, THERE IS NO BASIS UPON WHICH OUR OFFICE MAY PROPERLY OBJECT TO THE ADMINISTRATIVE ACTION IN THIS CASE.