B-154899, DEC. 22, 1964, 44 COMP. GEN. 347

B-154899: Dec 22, 1964

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MULTI-YEAR PROCUREMENT THE FAILURE OF A LOW BIDDER TO SUBMIT AN ALTERNATE BID ON A SINGLE YEAR QUANTITY FOR MILITARY REQUIREMENTS THAT ARE TO BE CONTRACTED FOR ON A MULTI-YEAR BASIS IN ACCORDANCE WITH PARAGRAPHS 1-322.2 (II) AND OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH REQUIRE. 1964: REFERENCE IS MADE TO THE LETTER DATED OCTOBER 7. ALTHOUGH THE CONTRACTING OFFICER HAS DETERMINED THAT THE BID SUBMITTED BY ITT IS RESPONSIVE AND HAS RECOMMENDED THAT THE PROTEST BY BENDIX BE DENIED. IT IS CONSIDERED THAT THE DEFICIENCIES OF THE ITT BID GO TO THE SUBSTANCE OF THE SOLICITATION AND THEREFORE THAT BID SHOULD BE CONSIDERED NONRESPONSIVE. THE INVITATION IN QUESTION IS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED.

B-154899, DEC. 22, 1964, 44 COMP. GEN. 347

BIDS - EVALUATION - ALTERNATE BASES - FISCAL V. MULTI-YEAR PROCUREMENT THE FAILURE OF A LOW BIDDER TO SUBMIT AN ALTERNATE BID ON A SINGLE YEAR QUANTITY FOR MILITARY REQUIREMENTS THAT ARE TO BE CONTRACTED FOR ON A MULTI-YEAR BASIS IN ACCORDANCE WITH PARAGRAPHS 1-322.2 (II) AND OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH REQUIRE, IN MULTI-YEAR PROCUREMENTS, THE SUBMISSION OF A PRICE FOR THE FIRST PROGRAM YEAR SO THAT A COST COMPARISON BETWEEN ONE AND MULTI-YEAR PROCUREMENTS CAN BE MADE, DOES NOT COME UNDER THE RULE THAT, WHERE A BID COVERS THE ENTIRE WORK UNDER ONE ALTERNATIVE, FAILURE OF A BIDDER TO SUBMIT AN ALTERNATE BID ON ANOTHER BASIS, DOES NOT REQUIRE REJECTION, BECAUSE THE FAILURE TO SUBMIT THE SINGLE YEAR BID, WHICH PREVENTED THE COST COMPARISON REQUIRED BY A REGULATION HAVING THE FORCE AND EFFECT OF LAW, CANNOT BE CONSIDERED A MINOR DEVIATION THAT CAN BE WAIVED AND, THEREFORE, THE LOW BID, WITHOUT THE ONE YEAR ALTERNATE, MUST BE REJECTED AS NONRESPONSIVE.

TO THE SECRETARY OF THE ARMY, DECEMBER 22, 1964:

REFERENCE IS MADE TO THE LETTER DATED OCTOBER 7, 1964, FROM THE ACTING DIRECTOR, PROCUREMENT AND PRODUCTION, ARMY MATERIEL COMMAND, TRANSMITTING AN ADMINISTRATIVE REPORT AND FILE RELATING TO THE PROTEST OF THE BENDIX CORPORATION, BENDIX RADIO DIVISION (BENDIX), AGAINST THE AWARD OF A CONTRACT TO THE INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, FEDERAL LABORATORIES DIVISION (ITT), UNDER INVITATION FOR BIDS NO. AMC (E/- 36-039 -64-598-U (STEP II).

THE ACTING DIRECTOR OF PROCUREMENT AND PRODUCTION STATES IN THE LETTER THAT, ALTHOUGH THE CONTRACTING OFFICER HAS DETERMINED THAT THE BID SUBMITTED BY ITT IS RESPONSIVE AND HAS RECOMMENDED THAT THE PROTEST BY BENDIX BE DENIED, IT IS CONSIDERED THAT THE DEFICIENCIES OF THE ITT BID GO TO THE SUBSTANCE OF THE SOLICITATION AND THEREFORE THAT BID SHOULD BE CONSIDERED NONRESPONSIVE. ACCORDINGLY, THE ACTING DIRECTOR OF PROCUREMENT AND PRODUCTION RECOMMENDS THAT THE PROTEST BY BENDIX BE SUSTAINED.

THE INVITATION IN QUESTION IS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED, MULTI-YEAR PROCUREMENT, AND PURSUANT TO PARAGRAPH 1-322.2, ARMED SERVICES PROCUREMENT REGULATION (ASPR), IT REQUESTS BIDS FOR BOTH A SINGLE YEAR PROGRAM QUANTITY (ALTERNATE B) AND A TWO-YEAR PROGRAM QUANTITY (ALTERNATE A) OF CERTAIN MEDIUM RANGE RADIO REPEATER SETS. ONE GROUND OF THE BENDIX PROTEST IS BASED UPON THE MULTI-YEAR PROCUREMENT SECTION OF THE INVITATION, WHICH PROVIDES IN PART AS FOLLOWS:

1. GENERAL:

THIS INVITATION FOR BIDS CONTAINS PROVISIONS FOR THE FOLLOWING CONCEPT WHICH SHOULD BE CAREFULLY REVIEWED PRIOR TO THE PREPARATION OF STEP I OF TWO STEP FORMAL ADVERTISING AND PRIOR TO SUBMITTING A BID IF REQUESTED UNDER STEP TWO.

(A) MULTIPLE YEAR PROCUREMENT

TABLE I AT THE END OF THIS SCOPE, OUTLINES THE GOVERNMENT OPTION TO AWARD A TWO YEAR PROGRAM QUANTITY OR A SINGLE YEAR PROGRAM QUANTITY.

2. MULTIPLE YEAR PROCUREMENT

(A) THIS SOLICITATION INVITES BIDS ON REQUIREMENT FOR A TWO YEAR PROGRAM QUANTITY AS WELL AS A SINGLE YEAR PROGRAM QUANTITY. EACH GROUP TO BE AWARDED UNDER THE MULTIPLE AWARD CONCEPT IS SUBDIVIDED INTO A SERIES OF ITEMS COVERING A TWO YEAR PROGRAM QUANTITY IDENTIFIED IN THE SCHEDULE AS ALTERNATE A AND A SERIES OF ITEMS COVERING A SINGLE YEAR PROGRAM QUANTITY IDENTIFIED IN THE SCHEDULE AS ALTERNATE B.

(B) THE TWO YEAR REQUIREMENT OF 110 EACH AN/GRC-68) (RADIO SETS IS MADE UP OF THE FIRST AND SECOND YEAR'S PROGRAM QUANTITIES UNDER GROUP I, ALTERNATE A. SINGLE YEAR REQUIREMENT OF 49 EACH AN/GRC-68) ( IS MADE UP OF THE QUANTITIES SHOWN UNDER GROUP I, ALTERNATE B.

(C) IT IS THE INTENT OF THE GOVERNMENT TO AWARD EITHER A TWO YEAR PROGRAM QUANTITY (ALTERNATE A) OR A SINGLE YEAR PROGRAM QUANTITY "ALTERNATE B.' THE UNIT PRICES BID UNDER "ALTERNATE A" SHOULD INCLUDE ALL QUANTITY DISCOUNT APPLICABLE TO THE ENTIRE QUANTITY BEING PROCURED UNDER ALTERNATE A.

(D) IN THE EVENT A CONTRACT IS AWARDED FOR THE TWO YEAR PROGRAM QUANTITIES (ALTERNATE A), THE CLAUSE ENTITLED "LIMITATION OF PRICE AND CONTRACTOR OBLIGATIONS" PROVIDE THAT PERFORMANCE WILL BE LIMITED TO THE FIRST YEAR PROGRAM QUANTITY (ITEMS 1A1 THROUGH 1A24). UPON AVAILABILITY TO THE CONTRACTING OFFICER OF ADDITIONAL FUNDS SUFFICIENT FOR PERFORMANCE OF THE SECOND YEAR PROGRAM QUANTITIES (ITEMS 2A2) THE CONTRACTING OFFICER SHALL NOTIFY THE CONTRACTOR TO PROCEED WITH PRODUCTION OF THE SECOND YEAR PROGRAM QUANTITIES. THIS NOTIFICATION SHALL BE IN WRITING AND SHALL BE ISSUED NOT LATER THAN 180 DAYS PRIOR TO THE SCHEDULED DELIVERY OF THE SECOND YEAR PROGRAM QUANTITIES UNLESS A LATER DATE IS AGREED TO BY THE PARTIES.

(E) CANCELLATION OF THE SECOND YEAR PROGRAM QUANTITIES SHALL OCCUR IF WITHIN THE TIME PERIOD SPECIFIED, THE CONTRACTING OFFICER NOTIFIES THE CONTRACTOR THAT FUNDS WILL NOT BE AVAILABLE FOR CONTRACT PERFORMANCE OR THE CONTRACTING OFFICER FAILS TO NOTIFY THE CONTRACTOR THAT FUNDS HAVE BEEN MADE AVAILABLE.

3. CANCELLATION CEILING COST:

IN THE EVENT OF CANCELLATION OF ITEM 2A2 AS PROVIDED IN THE CLAUSE ENTITLED "CANCELLATION OF ITEMS" THE CONTRACTOR WILL BE PAID AS CONSIDERATION THEREFORE A CHARGE NOT TO EXCEED SIX PERCENT (6 PERCENT) OF THE TOTAL CONTRACT PRICE.

4. SUBMISSION OF BIDS:

A. BIDDERS WHICH SUBMIT A BID ON ALTERNATE A (THE TWO YEAR PROGRAM QUANTITY) ARE REQUIRED TO SUBMIT AN ACCOMPANYING BID ON ALTERNATE B THE SINGLE YEAR PROGRAM QUANTITY).

B. A BID TO BE RESPONSIVE, MUST MEET THE FOLLOWING CRITERIA:

(1) A BID ON ONLY ALTERNATE B WILL BE RESPONSIVE.

(2) A BID ON ALTERNATE A FOR LESS THAN THE FULL QUANTITY OF ALTERNATE A WILL BE NON-RESPONSIVE.

(3) A BID ON ALTERNATE B FOR LESS THAN THE FULL QUANTITY OF ALTERNATE B WILL BE NON-RESPONSIVE.

(4) THE UNIT PRICE SUBMITTED UNDER ALTERNATE A FOR CORRESPONDING ITEMS WITHIN EACH PROGRAM YEAR MUST BE IDENTICAL. AS AN ILLUSTRATION, THE UNIT PRICE FOR ITEMS 1A2 AND 2A2 SHALL BE THE SAME.

5. EVALUATION OF BIDS:

A. AWARD WILL BE MADE TO THE RESPONSIVE BIDDER WHOSE BID/S), CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

B. THE DECISION TO AWARD ALTERNATE A OR ALTERNATE B WILL BE MADE ON THE BASIS OF THE LOWEST OVERALL COST TO THE GOVERNMENT. THE TOTAL AMOUNT OF THE LOW EVALUATED BID UNDER ALTERNATE A, INCLUDING ALL EVALUATION FACTORS, WILL BE COMPARED WITH THE PRODUCT OF THE UNIT PRICES OF THE LOW EVALUATED BID UNDER ALTERNATE B MULTIPLIED BY THE TOTAL NUMBER OF UNITS REQUIRED FOR ALTERNATE A PLUS EVALUATING FACTORS. THE EVALUATING FACTORS, SUCH AS: TRANSPORTATION CHARGES, EXPORT PACKAGING AND PACKING, ETC., WILL LIKEWISE BE COMPUTED ON THE BASIS OF THE QUANTITIES REQUIRED UNDER ALTERNATE A.

C. CANCELLATION CEILING COSTS WILL NOT BE CONSIDERED IN THE EVALUATION OF BIDS. FUNDS EQUAL TO THE APPLICABLE CANCELLATION CEILING SHALL BE COMMITTED. AT THE TIME THE CONTRACTOR IS NOTIFIED THAT FUNDS ARE AVAILABLE FOR THE SUCCEEDING PROGRAM YEAR'S REQUIREMENT (1) FUNDS SHALL BE OBLIGATED TO COVER THAT REQUIREMENT AND (2) THE COMMITMENT FOR CANCELLATION FOR THE PRIOR PROGRAM YEAR SHALL BE CANCELLED.

A SECOND GROUND OF THE PROTEST INVOLVES PROVISION Z OF THE INVITATION, PART (C) OF WHICH READS IN PART AS FOLLOWS:

(C) IT IS UNDERSTOOD THAT (FOR) ALL THOSE TUBES CALLED FOR HEREIN THAT ARE NOT LISTED IN SPECIFICATION MIL-E-1, BIDDERS MUST FURNISH WITH THEIR BIDS A TUBE SPECIFICATION SHEET, TRIPLICATE, DESCRIBING IN DETAIL THE CHARACTERISTICS OF THE TUBE AND SPECIFYING BY PARAGRAPH NUMBER THE PARTICULAR PARAGRAPHS OF MIL-E-1 WHICH WILL APPLY, AND FOR EACH TEST THE PROPOSED TEST LIMITS.

TWO FIRMS QUALIFIED UNDER STEP I, BENDIX AND ITT. THE BID OPENING UNDER STEP II WAS HELD ON JULY 22, 1964. BENDIX BID $4,985,146 ON ALTERNATE B (ONE-YEAR QUANTITY) AND $7,471,106 ($4,304,047, FIRST-YEAR QUANTITY, PLUS $3,167,059, SECOND-YEAR QUANTITY) ON ALTERNATE A. ITT DID NOT BID ON ALTERNATE B. ITS BID ON ALTERNATE A TOTALS $6,996,999 ($4,057,409, FIRST- YEAR QUANTITY, PLUS $2,939,590, SECOND-YEAR QUANTITY). THUS THE BID OF ITT ON ALTERNATE A IS $474,107 LOWER THAN THAT OF BENDIX. IT SHOULD ALSO BE NOTED THAT ITT DID NOT SUBMIT THE ELECTRON TUBE INFORMATION AS SPECIFIED IN PROVISION Z OF THE INVITATION.

BENDIX CONSIDERS THE BID SUBMITTED BY ITT TO BE NONRESPONSIVE, FOR THE FOLLOWING REASONS:

1. FAILURE BY INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, FEDERAL LABORATORIES DIVISION, TO INCLUDE WITH ITS BID SUBMISSION THE DATA REQUIRED BY PROVISION Z, PAGE 143, OF THE INVITATION FOR BID, ENTITLED "ELECTRON TUBES SUPPLIED WITH EQUIPMENT.'

2. FAILURE BY INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, FEDERAL LABORATORIES DIVISION, TO SUBMIT A BID ON ALTERNATE B (THE SINGLE YEAR PROGRAM QUANTITY) AS REQUIRED BY PARAGRAPH 4.2, PAGE 4 OF THE INVITATION FOR BIC (SIC), ENTITLED "MULTI-YEAR PROCUREMENT.'

IT IS THE UNDERSTANDING OF BENDIX THAT THE ARMY HAS DECIDED TO PROCURE THE MULTI-YEAR RATHER THAN THE SINGLE-YEAR QUANTITY. IN CONNECTION THEREWITH BENDIX STATES THAT THE DISMISSAL OF THE SINGLE YEAR PROGRAM QUOTATION HAS BEEN CRITICALLY PREJUDICIAL TO THEM IN THE FOLLOWING RESPECTS:

(1) A GREAT DEAL OF TIME AND EFFORT WAS EXPENDED IN PRICING THE SINGLE YEAR QUANTITY. SINCE THE PRICING OF THIS PORTION WAS NOT SIMPLY A DERIVATIVE OF THE MULTI-YEAR PROCING (SIC), OR VICE VERSA, WE WOULD HAVE BEEN ABLE TO CONCENTRATE MORE ON THE MULTI-YEAR APPROACH HAD WE ANY INDICATION THAT THE BID LANGUAGE WAS NOT TO BE INTERPRETED AS WRITTEN.

(3) OUR ENTIRE PRICING APPROACH WOULD HAVE BEEN DRASTICALLY MORE COMPETITIVE HAD WE KNOWN THE ARMY INTENDED TO PROCURE THE FULL QUANTITY.

BENDIX ALSO STATES THAT WHILE THE FAILURE TO SUBMIT THE REQUIRED ELECTRON TUBE DATA MIGHT BE CONSIDERED SOMEWHAT LESS SERIOUS THAN THE FAILURE TO QUOTE ON THE SINGLE YEAR REQUIREMENT, THE NONDELINEATION OF THIS ELEMENT AT THIS TIME WOULD SEEM TO CONSTITUTE AN AVENUE FOR THE CONTRACTOR TO MAKE SUBSEQUENT CHANGES, AT WILL, WITH POSSIBLE FINANCIAL INJURY TO THE GOVERNMENT.

THE CONTRACTING OFFICER HAS MADE THE FOLLOWING COMMENTS IN RESPONSE TO THE CONTENTIONS ADVANCED IN THE LETTER OF PROTEST:

(1) "ELECTRON TUBES SUPPLIED WITH EQUIPMENT," PROVISION Z OF THE SOLICITATION IS MERELY FOR INFORMATION PURPOSES DURING CONTRACT ADMINISTRATION AND DOES NOT PERMIT THE CONTRACTOR TO SUBMIT ANY TUBES OTHER THAN THOSE AUTHORIZED BY THE GOVERNMENT.

(2) ALTHOUGH PARAGRAPH 4 OF THE INVITATION PROVIDES THAT A BIDDER SUBMITTING A BID ON ALTERNATE A (THE TWO YEAR PROGRAM QUANTITY) IS REQUIRED TO SUBMIT AN ACCOMPANYING BID ON ALTERNATE B (THE SINGLE YEAR PROGRAM QUANTITY), THERE IS NOTHING IN THIS OR ANY OTHER PARAGRAPH WHICH PROVIDES THAT THE NON-SUBMISSION OF A PRICE FOR A SINGLE YEAR REQUIREMENT MAKES THE BID NON-RESPONSIVE. INDEED, THE FAILURE OF THE LOW BIDDER IN THIS INSTANCE TO SUBMIT A PRICE ON ALTERNATE B WOULD NOT CHANGE THE RELATIVE POSITION OF THE BIDDERS WITH REGARD TO THEIR ELIGIBILITY FOR AWARD. NOT ONLY IS INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, FEDERAL LABORATORIES LOW IN ITS BID ON THE TWO YEAR BUY AS COMPARED WITH THE BID ON THE TWO YEAR BUY SUBMITTED BY THE COMPETITOR BUT IS ALSO LOW WHEN EVALUATED AGAINST THE LOWEST ONE YEAR BID RECEIVED ON THE SOLICITATION.

(3) THE INTENT OF THE CONTRACTING OFFICER WAS THAT THE PRICING INFORMATION FOR ALTERNATE B (SINGLE YEAR QUANTITY) WAS DESIRED AND REQUIRED FOR EVALUATION PURPOSES. THE SOLICITATION CLEARLY STATES ON PAGE 4, PARAGRAPH B (2) AND (3) THOSE BIDS, IN PARTICULAR WHICH ARE NON- RESPONSIVE; THEREFORE, THE FAILURE TO SUBMIT A BID ON ALTERNATE B WOULD HAVE BEEN LISTED AS NON-RESPONSIVE, IF THIS HAD BEEN INTENDED AS SUCH BY THE CONTRACTING OFFICER. IT IS SUBMITTED THAT THE RESULT REACHED IN EVALUATING THE BIDS RECEIVED IS THE SAME AS IF INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION FEDERAL LABORATORIES, HAD SUBMITTED AN UNDULY HIGH BID FOR THE ONE YEAR BUY IN LIEU OF ITS "NO BID.'

(4) THE FACT THAT INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, FEDERAL LABORATORIES DID NOT BID THE SINGLE YEAR QUANTITY IS NOT IMPORTANT, BECAUSE THEY COULD HAVE PRICED THEMSELVES OUT OF COMPETITION WITH THE SUBMISSION OF VERY HIGH PRICES. THE FACT THAT INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, FEDERAL LABORATORIES CHOSE TO QUOTE ON ONLY THE LOWEST AGGREGATE PRICE AND THAT ACCEPTANCE OF SUCH BID WOULD BE IN CONFORMITY WITH THE STATUTORY REQUIREMENT OF 10 U.S.C. 2305 (C) THAT ADVERTISED CONTRACTS BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID IS MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.

(5) EVALUATION: PURSUANT TO ASPR 1-322.3, EVALUATION WAS MADE AND INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, FEDERAL LABORATORIES WAS DETERMINED TO BE LOW BIDDER.

(6) THE CONTRACTING OFFICER IS OF THE OPINION THAT THE POINTS RAISED BY THE BENDIX CORPORATION WITH REGARD TO THE FOLLOWING ARE WITHOUT FOUNDATION AND CONSIDERED NOT RELEVANT TO THE ISSUE OF NON RESPONSIVENESS:

(A) TIME AND EFFORT SPENT BY BENDIX IN PRICING THE SINGLE YEAR QUANTITY.

(7) THE CONTRACTING OFFICER DID NOT KNOW THE QUANTITY TO BE PROCURED UNTIL ISSUANCE OF PRON NUMBER C9-5-00092-00-C9-CZ DATED 27 JULY 1964, WHICH WAS FIVE (5) DAYS AFTER THE BID OPENING. THE PURPOSE OF THE MULTI- YEAR SOLICITATION METHOD IS TO AVAIL THE GOVERNMENT OF THE ADVANTAGES OF ASPR 1-322. THE FIRMS SOLICITED WERE INFORMED PRIOR TO ISSUANCE OF STEP II THE GOVERNMENT WOULD PURCHASE WITH QUANTITY BASED ON AVAILABLE FUNDS, PRICE AND OTHER FACTORS CONSIDERED.

MULTI-YEAR PROCUREMENT IS A RECENTLY INSTITUTED METHOD OF COMPETITIVE CONTRACTING FOR KNOWN REQUIREMENTS OF MILITARY SUPPLIES, IN QUANTITIES NOT IN EXCESS OF PLANNED REQUIREMENTS FOR FIVE YEARS SET FORTH IN, OR IN SUPPORT OF, THE DEPARTMENT OF DEFENSE FIVE YEAR FORCE STRUCTURE AND FINANCIAL PROGRAM, EVEN THOUGH THE TOTAL FUNDS ULTIMATELY TO BE OBLIGATED BY THE CONTRACT ARE NOT AVAILABLE TO THE CONTRACTING OFFICER AT THE TIME OF ENTERING INTO THE CONTRACT. UNDER THIS METHOD, CONTRACT QUANTITIES ARE BUDGETED AND ACCOUNTED FOR IN ACCORDANCE WITH THE PROGRAM YEAR IN WHICH EACH QUANTITY IS AUTHORIZED. ASPR 1-322.1 (B). UNDER ASPR 1-322.1 (C) (I), THIS METHOD OF PROCUREMENT IS TO BE USED WHERE REDUCED UNIT PRICES CAN REASONABLY BE ANTICIPATED OVER ANNUAL BUYS BY REASON OF ELIMINATION OF REPETITIVE, SUBSTANTIAL START UP COSTS INCLUDING SUCH COSTS AS PREPRODUCTION ENGINEERING, SPECIAL TOOLING, PLANT REARRANGEMENT, INITIAL REWORK, INITIAL SPOILAGE, AND PILOT RUNS. IN THIS CONNECTION AND TO INSURE THAT MULTI-YEAR CONTRACTS ARE AWARDED ONLY WHERE REDUCED UNIT PRICES ARE OBTAINED OVER ANNUAL BUYS BY REASON OF THE ELIMINATION OF REPETITIVE, SUBSTANTIAL START-UP COSTS, ASPR 1-322.3 PROVIDES, IN PART, AS FOLLOWS:

1-322.3 EVALUATION.

(A) EVALUATION OF OFFERS IN A MULTI-YEAR PROCUREMENT INVOLVES NOT ONLY THE DETERMINATION OF THE LOWEST OVERALL EVALUATED COST TO THE GOVERNMENT FOR BOTH ALTERNATIVES, THE MULTI-YEAR PROCUREMENT AND THE FIRST PROGRAM YEAR PROCUREMENT; IT ALSO INVOLVES THE COMPARISON OF THE COST OF BUYING THE TOTAL REQUIREMENT UNDER A MULTI-YEAR PROCUREMENT WITH COST OF BUYING THE TOTAL REQUIREMENT IN SUCCESSIVE INDEPENDENT PROCUREMENTS. ALL THE FACTORS TO BE CONSIDERED FOR THE VARIOUS EVALUATIONS INVOLVED SHALL BE SET FORTH IN THE SOLICITATION.

(E) IN COMPARING PRICES FOR THE FIRST PROGRAM YEAR REQUIREMENT AGAINST PRICES FOR MULTI-YEAR REQUIREMENTS, THE EVALUATED UNIT PRICE FOR EACH ITEM OF THE LOWEST EVALUATED OFFER RECEIVED ON THE FIRST PROGRAM YEAR ALTERNATIVE SHALL BE MULTIPLIED BY THE TOTAL NUMBER OF UNITS OF THAT ITEM REQUIRED BY THE MULTI-YEAR ALTERNATIVE. THE SUM OF THESE PRODUCTS, PLUS THE DOLLAR AMOUNT OF ANY ADMINISTRATIVE COSTS OF THE GOVERNMENT WHICH ARE TO BE USED IN THE EVALUATION SHALL BE COMPARED AGAINST THE TOTAL EVALUATED PRICE OF THE LOWEST OFFER RECEIVED FOR ALL ITEMS UNDER THE MULTI-YEAR ALTERNATIVE. IF THE MULTI-YEAR PRICE IS LOW, AWARD SHALL BE MADE ON THAT BASIS; OTHERWISE, AWARD SHALL BE MADE ON THE BASIS OF THE FIRST PROGRAM YEAR ALTERNATIVE.

TO THAT END AND FOR THE FURTHER PURPOSE OF OBTAINING THE FIGURES NECESSARY FOR COMPILING STATISTICS ON COMPARATIVE BID PRICES ON A MULTI- YEAR AND SINGLE-YEAR BASIS, ASPR 1-322.2 (II) DIRECTS THAT SOLICITATIONS SHALL INCLUDE "A PROVISION THAT A PRICE MUST BE SUBMITTED FOR THE TOTAL REQUIREMENTS OF THE FIRST PROGRAM YEAR.'

AS A GENERAL RULE WHERE A BID AS MADE COVERS THE ENTIRE WORK CONTEMPLATED UNDER ONE ALTERNATE, FAILURE TO RESPOND TO AN INVITATIONAL REQUEST FOR AN ALTERNATE BID ON ANOTHER BASIS IS NOT SUFFICIENT IN ITSELF TO REQUIRE REJECTION OF THE BID. B-126389, FEBRUARY 3, 1956. HOWEVER, THE PROVISION IN THE SUBJECT INVITATION REQUIRING THAT BIDDERS WHO BID ON ALTERNATE A (THE TWO-YEAR PROGRAM) MUST ALSO SUBMIT AN ACCOMPANYING BID ON ALTERNATE B (THE SINGLE-YEAR PROGRAM) WAS INCLUDED PURSUANT TO THE MANDATE OF ASPR 1- 322.2 (II) WHICH, SINCE PROMULGATED UNDER THE ARMED SERVICES PROCUREMENT ACT, 10 U.S.C. 2301 ET SEQ., HAS THE FORCE AND EFFECT OF LAW. G. L. CHRISTIAN AND ASSOCIATES V. UNITED STATES, 160 CT.CL. 1,320 F.2D 345. 153567, MAY 14, 1964. IT IS WELL-SETTLED THAT ADMINISTRATIVE REGULATIONS ISSUED IN IMPLEMENTATION OF A STATUTE, AS HERE, ARE BINDING NOT ONLY UPON PERSONS SUBJECT THERETO OR AFFECTED THEREBY BUT ALSO UPON THE HEAD OF THE AGENCY PROMULGATING THE REGULATIONS AND OFFICERS SUBSIDIARY THERETO. SERVICE V. DULLES, 354 U.S. 364; SHERIDAN-WYOMING COAL CO. V. KRUG, 172 F.2D 282.

FURTHERMORE, THE ARMED SERVICES PROCUREMENT REGULATION (SECTION 1 322.3 QUOTED ABOVE) STATES THE PURPOSE OF THE REQUIREMENT TO BE FOR EVALUATION BY ENABLING THE CONTRACTING AGENCY TO DETERMINE "THE LOWEST OVERALL EVALUATED COST TO THE GOVERNMENT FOR BOTH ALTERNATIVES, THE MULTI-YEAR PROCUREMENT AND THE FIRST PROGRAM YEAR PROCUREMENT," AND TO COMPARE "THE COST OF BUYING THE TOTAL REQUIREMENT UNDER A MULTI-YEAR PROCUREMENT WITH COST OF BUYING THE TOTAL REQUIREMENT IN SUCCESSIVE INDEPENDENT PROCUREMENTS.' SUCH A DETERMINATION AND COMPARISON CANNOT BE MADE WHERE BIDS ON A MULTI-YEAR BASIS ONLY ARE RECEIVED. IN THESE CIRCUMSTANCES WE WOULD NOT BE JUSTIFIED IN HOLDING THAT THE ONE YEAR BID REQUIREMENT MAY BE WAIVED AS A MINOR DEVIATION.

THE ARGUMENT CAN BE MADE IN THIS CASE THAT THE PURPOSE OF THE REQUIREMENT WAS MET BECAUSE BENDIX'S ONE-YEAR BID CAN BE USED AS A BASIS FOR THE COMPARISON OF COSTS BUT WE DO NOT CONSIDER THIS A VALID ARGUMENT. IF A BIDDING REQUIREMENT IS MATERIAL OR SUBSTANTIAL IT NECESSARILY APPLIES TO ALL BIDDERS ALIKE. ALSO, THE ONLY WAY THE CONTRACTING AGENCY CAN DEFINITELY DETERMINE WHETHER A BIDDER IS WILLING TO QUOTE A LOWER PRICE FOR A SINGLE-YEAR PROCUREMENT IS TO REQUIRE HIM TO SUBMIT A COMPETITIVE BID ON THAT BASIS. ACCORDINGLY, IT IS OUR VIEW THAT THE BID OF ITT SHOULD BE REJECTED AS NONRESPONSIVE.

IN VIEW OF OUR OPINION CONCERNING THE FAILURE OF ITT TO SUBMIT A BID ON ALTERNATE B IT IS UNNECESSARY FOR US TO RULE ON THE EFFECT OF ITT'S FAILURE TO PROVIDE THE INFORMATION REGARDING ELECTRON TUBES NOT LISTED IN SPECIFICATION MIL-E-1, WHICH INFORMATION WAS REQUIRED BY PROVISION Z OF THE INVITATION.

IT IS NOTED FROM LETTER DATED OCTOBER 7, 1964, FROM THE ACTING DIRECTOR, PROCUREMENT AND PRODUCTION, ARMY MATERIEL COMMAND, THAT SINCE THE PRICE SUBMITTED BY BENDIX CANNOT BE JUSTIFIED AS FAIR AND REASONABLE IF THE BENDIX PROTEST IS SUSTAINED PROCUREMENT OF THE ITEMS IN QUESTION WILL BE ACCOMPLISHED BY SOME OTHER MEANS.

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