B-154759, NOV. 16, 1964

B-154759, NOV. 16, 1964

TO FLINCHBAUGH PRODUCTS, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 20, 1964, AND RELATED CORRESPONDENCE, PROTESTING THE REJECTION OF YOUR BID SUBMITTED UNDER INVITATION FOR BIDS NO. AMC/A/-11-173-64-117.

THE INVITATION, WHICH WAS ISSUED ON APRIL 29, 1964, BY THE UNITED STATES ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS, SOLICITED BIDS FOR THE SUPPLY OF PROJECTILES IN STATED QUANTITIES DURING THE PERIOD MAY 1, 1965 THROUGH APRIL 30, 1966.

THE PROVISIONS IN THE INVITATION REGARDING THE USE OF GOVERNMENT PROPERTY IN THE BIDDER'S POSSESSION READ, IN PERTINENT PART, AS FOLLOWS:

"IF IN PERFORMING THE WORK BID UPON, THE BIDDER PLANS TO USE ANY ITEMS OF GOVERNMENT PROPERTY (INCLUDING ANY ITEMS OF SPECIAL TOOLING COVERED BY THE SPECIAL TOOLING CLAUSE INASPR 13-504) IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT WITH THE GOVERNMENT INDEPENDENT OF THIS IFB, THE BIDDER SHALL SO INDICATE BY CHECKING THE BOX BELOW AND BY IDENTIFYING SUCH FACILITIES CONTRACT AND/OR OTHER AGREEMENT AUTHORIZING SUCH USE. *IN ORDER TO BE RESPONSIVE, THE BIDDER MUST, PRIOR TO THE TIME OF BID OPENING, BE IN FACT AUTHORIZED IN WRITING TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON. EVIDENCE OF SUCH AUTHORIZATION SHALL BE SUBMITTED UPON REQUEST FROM THE CONTRACTING OFFICER UNDER THIS IFB.

"*WARNING: POSSESSION OF GOVERNMENT-OWNED PROPERTY UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT DOES NOT NECESSARILY MEAN THE BIDDER IS ACTUALLY AUTHORIZED TO USE SUCH GOVERNMENT-OWNED PROPERTY IN THE PERFORMANCE OF ANY CONTRACT AS A RESULT OF THIS IFB.'

FURTHER PROVISIONS REQUIRED BIDDERS TO IDENTIFY EACH SUCH ITEM OF GOVERNMENT PROPERTY AND TO LIST ITS ACQUISITION COST, AND PRESCRIBED THE FOLLOWING EVALUATION FORMULA:

"A. FOR PURPOSES OF EQUALIZATION OF COMPETITIVE ADVANTAGE, THE USE OF SUCH GOVERNMENT PROPERTY, INCLUDING SPECIAL TOOLING, SHALL BE EVALUATED BY ADDING TO THE PROPOSED PRICE OF THE ITEMS BID UPON, THE FOLLOWING RATES FOR EACH MONTH OF THE PROPOSED PRODUCTION PERIOD. BIDDER SHALL NOT INCLUDE IN THEIR BID PRICES ANY PROVISION FOR PAYMENT OF A USE CHARGE FOR SUCH PROPERTY. NOTWITHSTANDING ANY OTHER CONTRACTUAL ARRANGEMENTS, THE PROVISIONS OF THIS PARAGRAPH WILL APPLY; THEREFORE, BIDDERS ARE ADVISED TO ARRANGE WITH THE CONTRACTING OFFICER HAVING JURISDICTION OVER THE PROPERTY FOR RENT-FREE USE OF SUCH PROPERTY OR FOR A WAIVER OR RENTAL PAYMENT DUE UNDER ANY OTHER ARRANGEMENT, PRIOR TO SUBMISSION OF A BID.

"EQUIPMENT--- 1 PERCENT PER MONTH OF THE ACQUISITION COST.

"SPECIAL TOOLING--- 1 2/3 PERCENT PER MONTH OF THE ACQUISITION COST.

"REAL PROPERTY--- 5 PERCENT PER YEAR OF LAND ACQUISITION COST AND 8 PERCENT PER YEAR OF ACQUISITION COSTS OF IMPROVEMENTS THEREON COMPUTED FOR THE PROPOSED PRODUCTION PERIOD.'

EIGHT BIDS WERE RECEIVED AND OPENED ON JUNE 17, 1964. YOUR BID, WHICH WAS BASED ON THE USE OF GOVERNMENT PROPERTY IN YOUR POSSESSION UNDER A FACILITIES CONTRACT, WAS LOW AT A UNIT PRICE OF $5.79274 F.O.B. ORIGIN, RAIL. ACCORDINGLY, ON JUNE 18 YOU WERE REQUESTED TO FURNISH, PURSUANT TO THE TERMS OF THE INVITATION, THE REQUIRED EVIDENCE OF YOUR AUTHORITY, ISSUED PRIOR TO BID OPENING, TO USE THE GOVERNMENT PROPERTY WHICH YOU HAD LISTED IN YOUR BID. ON JUNE 24 THE FACILITIES CONTRACTING OFFICE ADVISED THE PROCUREMENT OFFICE THAT WHILE YOU HAD INDICATED AN INTENT TO USE THE PROPERTY, YOU HAD SUBMITTED YOUR BID WITHOUT A WRITTEN PROPERTY USE AUTHORIZATION; HOWEVER, VERBAL APPROVAL HAD BEEN GRANTED TO YOU ON JUNE 23.

ON JULY 14 THE PROCUREMENT OFFICE NOTIFIED YOU THAT YOUR FAILURE TO OBTAIN WRITTEN AUTHORITY, PRIOR TO BID OPENING, FOR THE USE OF THE GOVERNMENT PROPERTY IN QUESTION RENDERED YOUR BID NONRESPONSIVE.

BASICALLY, IT IS YOUR POSITION THAT YOUR FAILURE TO OBTAIN THE WRITTEN AUTHORIZATION PRIOR TO BID OPENING SHOULD BE WAIVED AS A MERE INFORMALITY OR MINOR IRREGULARITY. ALSO, YOU ASSERT THAT DURING SEVERAL DISCUSSIONS WITH THE FACILITIES CONTRACTING OFFICER THERE WAS AN ORAL UNDERSTANDING THAT YOU WOULD BE PERMITTED TO USE GOVERNMENT PROPERTY--- EITHER THE EXISTING PROPERTY OR NEW PROPERTY THAT YOU HAD REQUESTED--- IN THE EVENT YOU WERE THE SUCCESSFUL BIDDER. IN THIS CONNECTION, HOWEVER, THE FACILITIES CONTRACTING OFFICER REPORTS THAT WHILE YOU HAD REQUESTED A PROPERTY USE AUTHORIZATION BY LETTER OF JUNE 12, NEITHER ORAL NOR WRITTEN AUTHORITY HAD BEEN GRANTED TO YOU PRIOR TO BID OPENING. IF THIS WERE MATERIAL, WE WOULD UNDER THE RULE LONG OBSERVED BY OUR OFFICE IN THE CASE OF DISAGREEMENT BETWEEN FACTS STATED BY A CLAIMANT AND THOSE ADMINISTRATIVELY REPORTED, BE REQUIRED TO ACCEPT THE ADMINISTRATIVE STATEMENT OF FACTS. 16 COMP. GEN. 325.

THE APPLICABLE PROCUREMENT STATUTE, 10 U.S.C. 2305, REQUIRES THAT BIDS CONFORM TO THE TERMS OF THE ADVERTISED INVITATION. ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2/A) REQUIRES REJECTION OF BIDS WHICH FAIL TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION.

WHILE ASPR 2-405 PERMITS WAIVER OF MINOR INFORMALITIES OR IRREGULARITIES IN BID, SUCH DEVIATIONS ARE LIMITED TO THOSE OF FORM OR SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BID, HAVING NO EFFECT, OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT, ON THE PRICE AND NO EFFECT ON QUALITY, QUANTITY OR DELIVERY OF THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED AND THE CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF OR BE OTHERWISE PREJUDICIAL TO BIDDERS.

SINCE THE USE OF GOVERNMENT PROPERTY IN THE PERFORMANCE OF A CONTRACT MAY MATERIALLY AFFECT THE CONTRACT PRICE, THE PREEXISTING WRITTEN AUTHORIZATION REQUIREMENT CANNOT BE SAID TO BE WITHOUT REASONABLE JUSTIFICATION, AND WE COULD NOT OBJECT TO THE REFUSAL OF THE CONTRACTING OFFICER TO WAIVE IT. SEE B-154188, JUNE 26, 1964; B 154685, NOVEMBER 4, 1964.

NOR MAY SUBMISSION OF A WRITTEN AUTHORIZATION ISSUED AFTER BID OPENING BE ACCEPTED AS COMPLIANCE WITH SUCH REQUIREMENT, SINCE A BIDDER MAY NOT BE ALLOWED TO MATERIALLY ADD TO OR MODIFY ITS BID AFTER OPENING TO MAKE THE BID COMPLY WITH THE REQUIREMENTS OF THE INVITATION. 38 COMP. GEN. 819; 40 ID. 432.

FOR THE REASONS STATED, WE FIND NO BASIS TO QUESTION THE REJECTION OF YOUR BID BY THE PROCUREMENT AGENCY.