B-154064, SEP. 11, 1964

B-154064: Sep 11, 1964

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WE CONCLUDED IN OUR PRIOR DECISION THAT ON THE FACTS PRESENTED AN AWARD TO SPERRY RAND (SPERRY-FARRAGUT DIVISION) AS LOW BIDDER WAS PROPER. YOU CONTENDED IN YOUR INITIAL PROTEST THAT THE FOUR LOWEST BIDDERS (MINNEAPOLIS-HONEYWELL WAS FIFTH LOWEST BIDDER) WERE NONRESPONSIVE ON TWO COMMON GROUNDS. AS TO POINT (1) YOU NOW SAY THAT IF A SUCCESSFUL BIDDER IS ALLOWED TO UTILIZE GOVERNMENT FACILITIES EVEN THOUGH HE DID NOT INDICATE SUCH UTILIZATION IN HIS BID. IF NO QUESTION IS RAISED. YOU BELIEVE THAT OUR PRIOR CONCLUSION INVITES ALL BIDDERS TO OMIT ANY INDICATION THAT GOVERNMENT FACILITIES ARE TO BE UTILIZED. MAY BE PERMITTED TO USE GOVERNMENT PROPERTY ON A CASH RENTAL BASIS WHETHER OR NOT HIS BID IS BASED ON USING SUCH PROPERTY.

B-154064, SEP. 11, 1964

TO SELLERS, CONNER AND CUNEO:

BY LETTER OF JULY 8, 1964, YOU REQUEST RECONSIDERATION ON BEHALF OF THE MINNEAPOLIS-HONEYWELL REGULATOR COMPANY OF OUR DECISION B-154064, DATED JUNE 23, 1964, DENYING THE PROTEST OF MINNEAPOLIS-HONEYWELL REGULATOR COMPANY AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. 600-602-64, ISSUED BY THE DEPARTMENT OF THE NAVY. WE CONCLUDED IN OUR PRIOR DECISION THAT ON THE FACTS PRESENTED AN AWARD TO SPERRY RAND (SPERRY-FARRAGUT DIVISION) AS LOW BIDDER WAS PROPER.

YOU CONTENDED IN YOUR INITIAL PROTEST THAT THE FOUR LOWEST BIDDERS (MINNEAPOLIS-HONEYWELL WAS FIFTH LOWEST BIDDER) WERE NONRESPONSIVE ON TWO COMMON GROUNDS; (1) FAILURE TO INDICATE THAT GOVERNMENT PROPERTY AND FACILITIES WOULD BE UTILIZED IN THE WORK BID UPON WHEN, IN FACT, GOVERNMENT PROPERTY AND FACILITIES WOULD BE USED BY EACH OF THESE BIDDERS; (2) FAILURE TO FURNISH WITH THE BID INFORMATION PERTAINING TO THE SHIPMENT OF THE IGNITER UNITS. WE FOUND THAT NEITHER OF THESE BID OMISSIONS AFFECTED THE BID EVALUATION AND, HENCE, DID NOT REQUIRE THAT THE BIDS BE REJECTED.

AS TO POINT (1) YOU NOW SAY THAT IF A SUCCESSFUL BIDDER IS ALLOWED TO UTILIZE GOVERNMENT FACILITIES EVEN THOUGH HE DID NOT INDICATE SUCH UTILIZATION IN HIS BID, HE CAN BASE HIS QUOTATION ON THE RENT-FREE USE OF GOVERNMENT FACILITIES WITHOUT INDICATING THAT HE INTENDS TO DO SO; IF NO QUESTION IS RAISED, HE MAY, UPON RECEIPT OF AN AWARD, PROCEED WITH SUCH CONTEMPLATED UTILIZATION; IF QUESTIONED REGARDING THE PROHIBITED USE OF RENT-FREE FACILITIES, HE HAS THE OPTION TO SHIFT TO OTHER FACILITIES AND ABSORB THE RESULTING INCREASE IN COST. YOU BELIEVE THAT OUR PRIOR CONCLUSION INVITES ALL BIDDERS TO OMIT ANY INDICATION THAT GOVERNMENT FACILITIES ARE TO BE UTILIZED, THUS DESTROYING THE FUNCTION INTENDED BY THE INVITATION PROVISION (THE GOVERNMENT PROPERTY CLAUSE). YOU REQUEST THAT WE MODIFY OUR CONCLUSION TO REQUIRE THAT THE LOW BIDDER IN THIS CASE NOT BE PERMITTED TO UTILIZE GOVERNMENT PROPERTY IN THE WORK.

WE DO NOT BELIEVE THAT OUR PRIOR CONCLUSION SHOULD BE MODIFIED. YOU RECOGNIZE THAT IF AN INVITATION HAS NO PROVISION FOR THE USE OF GOVERNMENT PROPERTY IN THE PERFORMANCE OF THE CONTRACT WORK, A BIDDER MAY NOT CONDITION HIS BID ON THE USE OF SUCH PROPERTY. 38 COMP. GEN. 508. THE ,GOVERNMENT PROPERTY" CLAUSE PROVIDES THAT THE BIDDER MAY USE GOVERNMENT PROPERTY IN THE CONTRACT WORK, BUT ONLY ON A CASH RENTAL BASIS. THE RENTAL PAYMENT SERVES TO ELIMINATE ANY COMPETITIVE BIDDING ADVANTAGE WHICH WOULD EXIST IN FAVOR OF BIDDERS POSSESSING GOVERNMENT PROPERTY OVER BIDDERS NOT POSSESSING SUCH PROPERTY. SEE ASPR 13-407 (A) (3). A BIDDER, THEREFORE, MAY BE PERMITTED TO USE GOVERNMENT PROPERTY ON A CASH RENTAL BASIS WHETHER OR NOT HIS BID IS BASED ON USING SUCH PROPERTY. SEE B- 145487, OCTOBER 20, 1961. THE INVITATION CLAUSE MERELY ALLOWS THE BIDDER TO CONDITION HIS BID ON SUCH INTENDED USE. THE ARMED SERVICES PROCUREMENT REGULATION, HOWEVER, REQUIRES THAT THE FACILITIES CONTRACT SPECIFY A CASH RENTAL FOR THE USE OF THE GOVERNMENT PROPERTY IN ANY CONTRACT ENTERED INTO BY FORMAL ADVERTISING. ASPR 13-407 (A) (1). HENCE, THE BIDDER YOU SUGGEST--- ONE WHO BASES HIS BID ON THE PLANNED RENT-FREE USE OF GOVERNMENT PROPERTY WITHOUT DISCLOSING HIS INTENTION TO DO SO--- WOULD BE CONTEMPLATING AN UNAUTHORIZED USE OF GOVERNMENT PROPERTY. WE DO NOT BELIEVE THAT OUR PRIOR CONCLUSION PERMITS OR INVITES BIDDERS TO FOLLOW THIS PRACTICE.

REGARDING OUR PRIOR CONCLUSION THAT BIDDERS WERE NOT REQUIRED TO FURNISH SHIPPING DATA ON THE IGNITER UNITS, YOU POINT TO THE INSTRUCTION ON PAGE 2 OF THE "EVALUATION TRANSPORTATION DATA HEET" THAT: "FAILURE TO FURNISH THIS DATA IN THE BID WILL RESULT IN REJECTION OF THE BID.' YOU CONTEND THAT THE WAIVER OF THIS CLEAR REQUIREMENT ESTABLISHES "A DANGEROUS PRECEDENT IN THAT IT ENABLES ADMINISTRATIVE AGENCIES TO JUSTIFY WAIVING ANY DEFICIENCIES IN BIDS ON THE GROUND THAT THE INFORMATION RECEIVED ON A BID, THOUGH DEFICIENT, SATISFIED THE AGENCIES' SUBJECTIVE INTENT.'

IN 38 COMP. GEN. 819 WE CONCLUDED THAT A BIDDER'S FAILURE TO FURNISH SHIPPING DATA NECESSARY TO DETERMINE THE GOVERNMENT'S TOTAL COST UNDER THE CONTRACT WAS A MATERIAL DEVIATION WHICH COULD NOT BE WAIVED. IN THE PRESENT CASE THE INVITATION PROVIDED IN PART AS FOLLOWS:

"GUARANTEED MAXIMUM SHIPPING WEIGHTS, DIMENSIONS AND RELATED DATA

"/A) WHEN DESTINATIONS OR EVALUATION POINTS ARE NAMED EACH BID/PROPOSAL WILL BE EVALUATED TO THE DESTINATIONS SPECIFIED BY ADDING TO THE FOB ORIGIN PRICE ALL TRANSPORTATION CHARGES AT THE RATE OF DELIVERY SPECIFIED TO SAID DESTINATIONS.

"/B) THE ATTACHED "EVALUATION TRANSPORTATION DATA SHEET" (PRNC-NPO 238) (6/63) WILL BE COMPLETED FOR ITEMS CHECKED IN ORDER TO PERMIT THE DETERMINATION OF TRANSPORTATION COSTS.

"/C) THE CONTRACT RESULTING FROM THIS SOLICITATION WILL PROVIDE THAT, IF DELIVERED ITEMS ARE FURNISHED IN A STATE OTHER THAN AS SPECIFIED BY THE BIDDER/OFFEROR IN THE "EVALUATION TRANSPORTATION DATA SHEET" (PRMC-NPO- 238) (6/63) AND THIS RESULTS IN A GREATER TRANSPORTATION COST TO THE GOVERNMENT, THE CONTRACT PRICE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE TRANSPORTATION COSTS COMPUTED FOR EVALUATION PURPOSES BASED ON THE BIDDER-S/OFFEROR'S GUARANTEED TRANSPORTATION DATA AND THE TRANSPORTATION COSTS THAT SHOULD HAVE BEEN USED FOR EVALUATION PURPOSES, BASED ON CORRECT TRANSPORTATION DATA.'

IN OUR DECISION OF JUNE 23, WE AGREED WITH THE CONTRACTING OFFICER THAT THE INVITATION ONLY PROVIDED DESTINATION OR EVALUATION POINTS FOR THE 684 IGNITER SEPARATION ASSEMBLIES (ITEM NO. 1 OF LOT 1), AND THAT NO DESTINATION POINTS WERE PROVIDED FOR THE 5 IGNITERS (ITEM NO. 2 OF LOT 1). (THE IGNITER UNIT WAS DESCRIBED BY NAVY AS "A SECONDARY ITEM WEIGHING APPROXIMATELY FIVE (5) POUNDS, PACKED FIVE (5) TO A BOX.'' SINCE TRANSPORTATION COSTS COULD NOT BE EVALUATED FOR THE IGNITERS, WE CONCLUDED THAT BIDDERS WERE NOT REQUIRED TO FURNISH SHIPPING DATA FOR THAT ITEM. 152911, JANUARY 27, 1964; B-151342, JUNE 18, 1963; SEE 39 COMP. GEN. 595.

ACCORDINGLY, WE SUSTAIN OUR PRIOR DECISION OF JUNE 23, 1964, B 154064.

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