B-154064, JUN 23, 1964

B-154064: Jun 23, 1964

Additional Materials:

Contact:

Ralph O. White
(202) 512-8278
WhiteRO@gao.gov

Kenneth E. Patton
(202) 512-8205
PattonK@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ESQUIRE REFERENCE IS MADE TO YOUR TELEGRAM DATED APRIL 29. BIDDERS SHOULD ASSUME THAT GOVERNMENT TOOLING IS NOT AVAILABLE AT THIS TIME. AN EQUITABLE ADJUSTMENT WILL BE MADE IN THE CONTRACT PRICE. ANY DISAGREEMENT BETWEEN THE CONTRACTOR AND THE GOVERNMENT WITH REGARD TO ITS PRICE ADJUSTMENT WILL BE CONSIDERED A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF THE GENERAL PROVISIONS ENTITLED 'DISPUTES'. IN SUCH EVENT THE BIDDER MAY USE SUCH GOVERNMENT PROPERTY AT THE RENTAL RATES STIPULATED IN SUCH FACILITIES CONTRACT OR OTHER AGREEMENT PROVIDED SUCH USE IS THEREBY AUTHORIZED. BIDS SUBMITTED CONTINGENT UPON USE OF SUCH GOVERNMENT PROPERTY ON A NO CHARGE BASIS WILL BE CONSIDERED NONRESPONSIVE.".

B-154064, JUN 23, 1964

PRECIS-UNAVAILABLE

SELLERS, CONNER AND CUNEO, ATTORNEYS AT LAW

ATTENTION:

ELDON H. CROWELL, ESQUIRE

REFERENCE IS MADE TO YOUR TELEGRAM DATED APRIL 29, 1964, AND SUBSEQUENT CORRESPONDENCE PROTESTING AWARD OF A CONTRACT TO ANY BIDDER OTHER THAN THE MINNEAPOLIS-HONEYWELL REGULATOR COMPANY UNDER INVITATION FOR BIDS NO. 600- 602-64.

THE RECORD SHOWS THAT ON FEBRUARY 27, 1964, THE DEPARTMENT OF THE NAVY, BUREAU OF NAVAL WEAPONS, ISSUED THE ABOVE INVITATION FOR BIDS ON A SPECIFIED QUANTITY OF IGNITION SEPARATION ASSEMBLIES AND IGNITERS. ALTHOUGH THE BID ABSTRACT SHOWS THAT FOUR BIDDERS SUBMITTED BID PRICES LOWER THAN THAT SUBMITTED BY MINNEAPOLIS-HONEYWELL, YOU CONTEND THAT MINNEAPOLIS-HONEYWELL MUST BE CONSIDERED THE LOWEST RESPONSIVE BIDDER UNDER THE CIRCUMSTANCES HEREINAFTER DESCRIBED. SPECIFICALLY YOU STATE:

"*** DESPITE THE FACT THAT THE ITEMS COVERED BY

THE INVITATION COULD NOT BE PRODUCED WITHOUT THE

UTILIZATION OF GOVERNMENT FACILITIES, EACH OF THESE FOUR

BIDDERS FAILED TO INDICATE THAT GOVERNMENT PROPERTY

AND FACILITIES WOULD BE UTILIZED IN THE PERFORMANCE OF

THE WORK BID UPON. EACH OF THESE BIDDERS ALSO FAILED

TO FURNISH INFORMATION PERTAINING TO THE SHIPMENT OF

THE IGNITER UNITS AS REQUIRED ON THE BID

EVALUATION TRANSPORTATION DATA SHEET."

IN REGARD TO THE POSSIBLE USE OF GOVERNMENT-OWNED PROPERTY OR FACILITIES, THE INVITATION PROVIDES AS FOLLOWS:

"GOVERNMENT PROPERTY (SPECIAL TOOLING AND OTHER PROPERTY)

"(A) IN PREPARING BIDS UNDER THIS INVITATION

FOR BIDS, BIDDERS SHOULD ASSUME THAT GOVERNMENT TOOLING

IS NOT AVAILABLE AT THIS TIME. HOWEVER, SHOULD IT

BE MADE AVAILABLE AT A LATER DATE AND BE FURNISHED

TO THE CONTRACTOR, AN EQUITABLE ADJUSTMENT WILL

BE MADE IN THE CONTRACT PRICE. ANY DISAGREEMENT

BETWEEN THE CONTRACTOR AND THE GOVERNMENT WITH REGARD

TO ITS PRICE ADJUSTMENT WILL BE CONSIDERED A DISPUTE

CONCERNING A QUESTION OF FACT WITHIN THE MEANING

OF THE CLAUSE OF THE GENERAL PROVISIONS ENTITLED

'DISPUTES'.

"(B) OTHER GOVERNMENT PROPERTY. IF THE BIDDER

PLANS TO USE, IN PERFORMING THE WORK BID UPON, ANY

ITEMS OF GOVERNMENT PROPERTY OTHER THAN GOVERNMENT-OWNED

SPECIAL TOOLING AS SPECIFIED IN PARAGRAPH (A) ABOVE

IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT

OR OTHER AGREEMENT WITH THE GOVERNMENT INDEPENDENT

OF THIS INVITATION FOR BID, THE BIDDER SHALL SO

INDICATE BY CHECKING THE FOLLOWING BOX. IN SUCH

EVENT THE BIDDER MAY USE SUCH GOVERNMENT PROPERTY

AT THE RENTAL RATES STIPULATED IN SUCH FACILITIES

CONTRACT OR OTHER AGREEMENT PROVIDED SUCH

USE IS THEREBY AUTHORIZED; AND THE BIDDER AGREES,

UPON REQUEST OF THE CONTRACTING OFFICER, TO SUBMIT

EVIDENCE THAT A FACILITIES CONTRACT OR OTHER SEPARATE

AGREEMENT WITH THE GOVERNMENT AUTHORIZES THE BIDDER

TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR

PERFORMING THE WORK BID UPON. HOWEVER, BIDS SUBMITTED

CONTINGENT UPON USE OF SUCH GOVERNMENT PROPERTY

ON A NO CHARGE BASIS WILL BE CONSIDERED NONRESPONSIVE." YOU TAKE THE POSITION THAT FAILURE TO INDICATE POSSIBLE USE OF GOVERNMENT PROPERTY OR FACILITIES REQUIRES AUTOMATIC REJECTION OF A BID. IN SUPPORT THEREOF YOU CALL ATTENTION TO PRIOR DECISIONS OF OUR OFFICE REPORTED AT 42 COMP.GEN. 36 AND 38 COMP.GEN. 508. THE FORMER CASE INVOLVED AN UNUSUAL SITUATION IN THAT THE LOW BIDDER ATTACHED A NOTE TO HIS BID OFFERING TO ABSORB THE COST OF ANY SPECIAL TOOLING SUBSEQUENTLY FOUND NECESSARY IN THE PERFORMANCE OF THE CONTRACT. IN CONCLUDING THAT THIS NOTE CONSTITUTED A DEVIATION FROM THE ADVERTISED SPECIFICATIONS WE POINTED OUT THAT THE EFFECT OF THE NOTE WAS TO EXEMPT FROM THE CONTRACT ALL TOOLING, REGARDLESS OF WHETHER THE GOVERNMENT MIGHT CONSIDER IT SPECIAL TOOLING OR NOT, WHEREAS THE INVITATION CLEARLY CONTEMPLATED THAT THE GOVERNMENT WOULD OBTAIN THE RIGHT TO TAKE TITLE FROM BOTH THE PRIME CONTRACTOR AND SUBCONTRACTOR TO ALL SPECIAL TOOLING NEEDED TO PERFORM THE CONTRACT. IN OTHER WORDS, SINCE THE NOTE EFFECTIVELY RESULTED IN NULLIFYING VARIOUS VALUABLE PROVISIONS OF THE CONTRACT, WE HELD THAT THE BID COULD NOT BE CONSIDERED FOR AWARD. IN 38 COMP.GEN. 508, QUOTING FROM THE SYLLABUS, WE HELD:

"A BIDDER WHO, IN RESPONSE TO AN INVITATION WHICH DID

NOT CONTAIN ANY PROVISION FOR THE USE OF GOVERNMENT-FURNISHED

FACILITIES IN PERFORMANCE OF THE CONTRACT, SUBMITTED

WITH HIS BID A LETTER IN WHICH REQUEST FOR THE USE

OF RENT-FREE GOVERNMENT FACILITIES WAS MADE FOR WHICH

THE BIDDER SUGGESTED AN EQUALIZATION FACTOR TO BE

ADDED TO THE BID PRICE FOR COMPARISON PURPOSES HAS

SUBMITTED AN OFFER WHICH CONTAINS A MATERIAL DEVIATION

WHICH GOES TO THE SUBSTANCE OF THE BID AFFECTING THE

COST OF THE ARTICLE TO BE FURNISHED AND, THEREFORE, THE BID

WAS PROPERLY REJECTED AS PREJUDICIAL TO THE OTHER

BIDDERS, NOTWITHSTANDING THAT CIRCUMSTANCES

SUBSEQUENTLY RENDERED THE CONDITION IN THE LETTER

MEANINGLESS."

WHILE OUR OFFICE HAS CONSISTENTLY HELD THAT A BID MUST BE RESPONSIVE TO AN INVITATION, WE HAVE GENERALLY TAKEN THE VIEW THAT IF THE DEFICIENCIES IN A LOW BID NEITHER GO TO THE SUBSTANCE OF THE BID, NOR WORK ANY INJUSTICE TO OTHER BIDDERS, THERE IS NO REASON WHY AWARD MAY NOT BE MADE TO SUCH LOW BIDDER. B-129208, SEPTEMBER 24, 1956, AND 35 COMP.GEN. 98, 99. UNDER ADVERTISED BIDDING, ALL QUALIFIED BIDDERS MUST BE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT BIDS WHICH ARE BASED UPON THE SAME SPECIFICATIONS, AND TO HAVE SUCH BIDS EVALUATED ON THE SAME BASIS. TO THE EXTENT THAT WAIVER OF THE PROVISIONS OF AN INVITATION FOR BIDS MIGHT RESULT IN FAILURE OF ONE OR MORE BIDDERS TO ATTAIN THE EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS WITH OTHER BIDDERS, SUCH PROVISION MUST BE CONSIDERED MANDATORY. HOWEVER, THE CONCEPT OF FORMALLY ADVERTISED PROCUREMENT, INSOFAR AS IT RELATES TO THE SUBMISSION AND EVALUATION OF BIDS, GOES NO FURTHER THAN TO GUARANTEE EQUAL OPPORTUNITY TO COMPETE AND EQUAL TREATMENT IN THE EVALUATION OF BIDS. IT DOES NOT CONFER UPON BIDDERS ANY RIGHT TO INSIST UPON THE ENFORCEMENT OF PROVISIONS IN AN INVITATION THE WAIVER OF WHICH WOULD NOT RESULT IN AN UNFAIR COMPETITIVE ADVANTAGE TO OTHER BIDDERS BY PERMITTING BID PRICES TO BE EVALUATED UPON A BASIS NOT COMMON TO ALL BIDS. SUCH PROVISIONS MUST THEREFORE BE CONSTRUED TO BE SOLELY FOR THE PROTECTION OF THE GOVERNMENT AND THEIR ENFORCEMENT OR WAIVER CAN HAVE NO EFFECT UPON THE RIGHTS OF BIDDERS TO WHICH THE RULES AND PRINCIPLES APPLICABLE TO FORMAL ADVERTISING ARE DIRECTED. TO THIS END, THE DECISIONS OF OUR OFFICE HAVE CONSISTENTLY HELD THAT WHERE DEVIATIONS FROM, OR FAILURES TO COMPLY WITH, THE PROVISIONS OF AN INVITATION DO NOT AFFECT THE BID PRICE UPON WHICH A CONTRACT WOULD BE BASED OR THE QUANTITY OR QUALITY OF THE WORK REQUIRED OF THE BIDDER IN THE EVENT HE IS AWARDED A CONTRACT, A FAILURE TO ENFORCE SUCH PROVISION WILL NOT INFRINGE UPON THE RIGHTS OF OTHER BIDDERS AND THE FAILURE OF A BIDDER TO COMPLY WITH THE PROVISION MAY BE CONSIDERED A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE. B-153636, MARCH 17, 1964.

IN THE CASE UNDER DISCUSSION FAILURE TO INDICATE INTENDED USE OF GOVERNMENT-OWNED FACILITIES WOULD NOT BE A VALID CAUSE FOR REJECTION SINCE THE USE OR NONUSE OF GOVERNMENT FACILITIES WAS NOT A BID EVALUATION FACTOR. NO ATTEMPT WAS MADE TO EQUALIZE THE BIDS OR PUT BIDDERS ON AN EQUAL FOOTING; AND, WE THINK THE RECITATION OR REPRESENTATION IN QUESTION SERVED AN INFORMATIONAL PURPOSE ONLY AND DID NOT GO TO THE RESPONSIVENESS OF THE BID. HENCE, NO BIDDER WAS PREJUDICED BY ANY OTHER BIDDER'S FAILURE TO COMPLETE THE STATEMENT. IN B-142901, DATED JUNE 1, 1960, WE POINTED OUT THAT LOW BIDS ARE NOT TO BE REJECTED BECAUSE OF AN OMISSION - ALTHOUGH REQUIRED BY THE SPECIFICATIONS - IF IT DOES NOT AFFECT THE PRICE, QUALITY, OR QUANTITY OF THE ITEMS TO BE FURNISHED. WHILE WE RECOGNIZE THAT SECTION 13-407 OF THE ARMED SERVICES PROCUREMENT REGULATION EVIDENCES AN INTENTION TO EQUALIZE A BIDDER'S COMPETITIVE ADVANTAGE IF HE POSSESSES GOVERNMENT FACILITIES, NO METHOD OR FORMULA FOR DOING SO WAS PROVIDED IN THE SUBJECT INVITATION. WE HAVE PREVIOUSLY INDICATED THAT ALTHOUGH EQUALIZATION OF A COMPETITIVE ADVANTAGE IS A DESIRABLE OBJECTIVE IN PROCUREMENTS INVOLVING THE USE OF GOVERNMENT-OWNED FACILITIES, TO THE EXTENT THAT SUCH POLICY MAY CONFLICT WITH 10 U.S.C. 2305(C), THE STATUTE MUST PREVAIL. B-153201, MARCH 17, 1964.

ON PAGE 6 OF YOUR BRIEF YOU FURTHER CONTEND THAT THESE SAME FOUR BIDS MUST BE CONSIDERED NONRESPONSIVE FOR THE REASON THAT CERTAIN REQUIRED TRANSPORTATION INFORMATION WAS MISSING FROM EACH OF THE FOUR BIDS IN QUESTION. SPECIFICALLY YOU STATE:

"*** THIS TRANSPORTATION DATA SHEET STATES CLEARLY AND

IN CAPITAL LETTERS THAT 'FAILURE TO FURNISH THIS DATA IN

THE BID WILL RESULT IN REJECTION OF THE BID.' NONE OF THE

FOUR LOW BIDDERS FURNISHED TRANSPORTATION DATA PERTAINING

TO THE SHIPMENT OF THE IGNITERS, A SEPARATE ITEM TO BE

PROCURED UNDER THE CONTRACT. THE INVITATION PROVIDES

THAT BIDS WILL BE SUBMITTED ON AN FOB ORIGIN BASIS WITH

GURANTEED MAXIMUM SHIPPING WEIGHTS AND THAT TRANSPORTATION

COSTS TO THE GOVERNMENT WILL BE TAKEN INTO CONSIDERATION IN

THE EVALUATION ***."

IN THIS CONNECTION, THE INVITATION PROVIDES 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' (PRNC-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.

"BID (PROPOSAL) EVALUATION

"FOR THE PURPOSE OF EVALUATING BIDS (PROPOSALS) (AND FOR

NO OTHER PURPOSE), THE FINAL DESTINATIONS FOR THE SUPPLIES

WILL BE CONSIDERED TO BE AS FOLLOWS:

"NAME DESTINATION 318 UNITS, SEAL BEACH,

CALIFORNIA - 366 UNITS, YORKTOWN, VIRGINIA." WHILE YOU CORRECTLY POINT OUT THAT THE INVITATION SPECIFIED A PARTICULAR DESTINATION, IT IS CONTENDED THAT THE DESTINATION POINTS MENTIONED WERE GIVEN ONLY FOR THE IGNITION SEPARATION ASSEMBLIES AND NOT FOR THE IGNITERS. IN HIS REPORT, THE CONTRACTING OFFICER STATES THAT DESTINATIONS WERE NOT GIVEN FOR THE IGNITERS SINCE THEY WERE UNKNOWN AT THE TIME. FURTHER, WE HAVE BEEN INFORMALLY ADVISED THAT THE DESTINATIONS WERE NOT EXPECTED TO BE KNOWN AND IN FACT WERE NOT KNOWN AT THE TIME OF BID EVALUATION; NOR ARE SUCH DESTINATIONS KNOWN AT THIS WRITING. ALTHOUGH NOT CONCLUSIVE WE BELIEVE THAT A BIDDER COULD HAVE REASONABLY INTERPRETED THE INVITATION TO MEAN THAT GUARANTEED SHIPPING WEIGHTS WERE REQUIRED ONLY FOR THE IGNITION SEPARATION ASSEMBLIES SINCE THE TOTAL UNITS MENTIONED (I.E. 318 UNITS, SEAL BEACH, CALIFORNIA; 366 UNITS, YORKTOWN, VIRGINIA) EXACTLY EQUALLED THE TOTAL NUMBER OF IGNITION SEPARATION ASSEMBLY UNITS CALLED FOR UNDER LOT NO. 1. IN AN ANALOGOUS CASE, B-151745, DATED JULY 2, 1963, 43 COMP.GEN. 23, 26, WE STATED:

"THE LOW BIDDER RESPONDED IN A REASONABLE FASHION TO

THE INFORMATION REQUIREMENTS OF THE INVITATION. THE FACT

THAT THIS REASONABLE RESPONSE WAS NOT IN CONFORMITY WITH

THE EXPECTATIONS OF THE CONTRACTING AGENCY PROVIDES NO

BASIS FOR REJECTING SUCH BID AS UNRESPONSIVE SINCE THE

AGENCY BEARS THE BURDEN OF SETTING OUT THE REQUIREMENTS

WITH SUFFICIENT CLARITY TO AVOID SITUATIONS OF THIS KIND."

IN 39 COMP.GEN. 624, WE STATED: "*** WE ARE MOST RELUCTANT TO DEPRIVE THE GOVERNMENT OF

THE BENEFIT OF A BONA FIDE LOW BID AND REQUIRE AWARD AT A

HIGHER COST TO A BIDDER WHOSE BID, CONSIDERED ON THE BASIS OF

THE APPARENT REAL INTENT OF THE INVITATION, IS DEFECTIVE

IN EXACTLY THE SAME WAY, SOLELY ON THE BASIS OF AN

UNFORTUNATE CONFUSION OF LANGUAGE IN THE INVITATION."

A PROVISION IN AN INVITATION REQUIRING BIDDERS TO STATE A GUARANTEED SHIPPING WEIGHT IS INTENDED TO FIX EXACTLY THE TOTAL MAXIMUM COST TO THE GOVERNMENT. AS A GENERAL RULE GUARANTEED WEIGHT IS AN ESSENTIAL ELEMENT OF A BID AND IS MATERIAL IN DETERMINING THE TOTAL AMOUNT THE GOVERNMENT WILL BE REQUIRED TO PAY FOR A PARTICULAR ITEM. 38 COMP.GEN. 819. HOWEVER, WHERE THE INVITATION FAILS TO INDICATE A KNOWN OR THEORETICAL DESTINATION POINT, AND WHERE NO SUCH POINT HAS BEEN FIXED AT THE TIME BIDS ARE EVALUATED THE INCLUSION OR EXCLUSION OF SHIPPING WEIGHT GUARANTEES CAN HAVE NO EFFECT UPON EVALUATION SINCE FREIGHT RATES COULD NOT POSSIBLY BE COMPUTED WITHOUT USING SOME DESTINATION POINT.

AS ABOVE INDICATED WHERE BIDS ARE REQUESTED ON AN F.O.B. ORIGIN BASIS, THE COST OF TRANSPORTATION SHOULD BE CONSIDERED AS AN ELEMENT IN BID EVALUATION AND THE INVITATION SHOULD SO PROVIDE. UNDER THE CIRCUMSTANCES, HOWEVER, THE NAVY CONCLUDED THAT IT WAS NOT PRACTICAL, FOR THE REASONS STATED, TO TAKE SUCH COSTS INTO CONSIDERATION INSOFAR AS THE IGNITERS WERE CONCERNED. THE SHIPPING WEIGHT INFORMATION APPLICABLE TO IGNITERS SERVED NO USEFUL PURPOSE IN BID EVALUATION, AND, THEREFORE, A BIDDER'S FAILURE TO INCLUDE SUCH INFORMATION IN HIS BID COULD NOT, IN LIGHT OF WHAT HAS ALREADY BEEN SAID, ADVERSELY AFFECT ITS CONSIDERATION. B-152911, JANUARY 27, 1964.

THE DEPARTMENT OF THE NAVY ADVISES THAT AWARD HAS BEEN WITHHELD PENDING A DETERMINATION BY OUR OFFICE; IN THE DEPARTMENT'S VIEW, HOWEVER, AWARD SHOULD BE MADE TO SPERRY RAND (SPERRY-FARRAGUT DIVISION) ON THE BASIS OF THE LOW BID SUBMITTED. ON THE BASIS OF THE FACTS AS SUBMITTED, WE CANNOT QUESTION THE LEGALITY OR PROPRIETY OF THE ACTION PROPOSED BY THE CONTRACTING AGENCY.

Oct 30, 2020

Oct 29, 2020

Oct 28, 2020

Looking for more? Browse all our products here