B-153340, FEB. 17, 1964

B-153340, FEB. 17, 1964

TO PUBLIC PRINTER, U.S. GOVERNMENT PRINTING OFFICE:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22, 1964, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE PROPRIETY OF THE ACTION TAKEN BY YOUR OFFICE IN DISQUALIFYING THE BID OF BELL AND HOWELL COMPANY, AND WHETHER THE AWARDS MADE FOR ITEM 5, PRICE CLASS 4 (APERTURE CARDS AND COPY (DUPLICARD) CARDS), UNDER YOUR TERM CONTRACT FOR TABULATING CARDS FOR THE PERIOD BEGINNING FEBRUARY 1, 1964, AND ENDING JULY 31, 1964, MAY BE SUSTAINED FOR THE FULL TERM OF THE CONTRACT.

YOU STATE THAT IN RESPONSE TO THE PROPOSAL, BIDS WERE RECEIVED ON ITEM 5, PRICE CLASS 4, FROM BELL AND HOWELL COMPANY, DAKOTA MICROFILM SERVICE, INC., MINNESOTA MINING AND MANUFACTURING COMPANY, AND INTERNATIONAL BUSINESS MACHINES CORPORATION. THE BID FROM INTERNATIONAL BUSINESS MACHINES CORPORATION SUBMITTED ON THE COPY (DUPLICARD) CARDS WAS NOT ACCEPTED SINCE IT WAS QUALIFIED AS TO THE THICKNESS OF THE MICROFILM TO BE MOUNTED ON THE CARDS. THE BELL AND HOWELL COMPANY BID ON THE COPY (DUPLICARD) CARDS WAS REJECTED BY LETTER DATED DECEMBER 20, 1963, BECAUSE PRICES WERE QUOTED F.O.B. ARDMORE, PENNSYLVANIA, WHEREAS "NC (NO CHARGE) WAS ENTERED IN ITEM 38 UNDER WHICH SHIPPING CHARGES WERE TO BE QUOTED TO TWELVE DESIGNATED DELIVERY AREAS IN THE UNITED STATES AND IT WAS THEREFORE DETERMINED THAT SUCH SEPARATE PROVISIONS WERE NOT COMPATIBLE AND MADE THE BID NON RESPONSIVE TO THE INVITATION. THE BIDS FROM DAKOTA MICROFILM SERVICE, INC., AND MINNESOTA MINING AND MANUFACTURING COMPANY WERE ACCEPTED AND CONTRACTS WERE AWARDED THOSE COMPANIES UNDER THE PROPOSAL.

PRIOR TO THE REJECTION OF ITS BID, AND BY LETTER OF DECEMBER 16, 1963, TO YOUR OFFICE, THE BELL AND HOWELL COMPANY EXPLAINED ITS ENTRY OF "NC" IN ITEM 38 AS FOLLOWS:

"THE ENTRY OF "NC" IN ALL AREAS IN ITEM 38 WAS BASED ON THE FOLLOWING: IT HAD BEEN PREVIOUSLY NOTED IN ITEM 5 (NOTE 2) AND UNDER REMARKS THAT ALL PRICES QUOTED WERE F.O.B. ARDMORE, PA. WE INTERPRETED PARAGRAPH 40 UNDER GENERAL TERMS AND CONDITIONS TO MEAN THAT SHOULD THE BIDDER SEEK COMPENSATION FOR SHIPPING CHARGES OTHER THAN THAT ALREADY SPECIFIED, (WHICH IN THE CASE OF BELL AND HOWELL WAS ALREADY SPECIFIED AS F.O.B. ARDMORE, PA.) HE WOULD MAKE APPROPRIATE ENTRIES IN ITEM 38. SINCE BELL AND HOWELL HAD ALREADY SPECIFIED HOW SHIPPING CHARGES WERE TO BE HANDLED, ANY ADDITIONAL INDICATION OF CHANGES (CHARGES) IN ITEM 38 WOULD HAVE BEEN, IN OUR OPINION, INAPPROPRIATE, THEREFORE, NO CHARGE OR "NC" WAS ENTERED THEREIN.'

IN PROTESTING THE ACTION TAKEN ON ITS BID BY YOUR LETTER OF DECEMBER 20, 1963, BELL AND HOWELL COMPANY EXPRESSES THE BELIEF THAT NO INCOMPATIBILITY EXISTS BETWEEN THE "F.O.B. ARDMORE" PRICES QUOTED AND THE "NC" ENTRIES IN ITEM 38, AND REQUESTS THAT YOUR OFFICE TAKE ONE OF FOUR SUGGESTED REMEDIAL ACTIONS. ESSENTIALLY, THE SUGGESTED ACTIONS ARE (1) ACCEPT THE BID IN THE FORM SUBMITTED AS F.O.B. ARDMORE AND THE BIDDER'S INTERPRETATION THAT THE INSERTION OF "NC" IN ITEM 38 INDICATES THAT THE BIDDER IS TO ARRANGE FOR THE DELIVERY OF THE CARDS AT DESTINATION BY COMMON CARRIER (AT GOVERNMENT EXPENSE FOR TRANSPORTATION) AND PAY FOR LOCAL DRAYAGE TO A COMMON CARRIER OFFICE AT ARDMORE; (2) CONSIDER THE INSERTION OF "NC" IN ITEM 38 AS A MINOR VARIANCE HAVING NO EFFECT ON THE BIDDER'S INTENDED F.O.B. ORIGIN SALE TERMS; (3) PERMIT THE DELETION OF ALL "NC" ENTRIES IN ITEM 38; OR (4) CANCEL THE INVITATION FOR BIDS AND EITHER READVERTISE OR RENEGOTIATE ALL BIDS ON THE GROUNDS THAT THE ACCEPTABLE BIDS ARE AT UNREASONABLE PRICES IN VIEW OF BELL AND HOWELL COMPANY'S ALLEGED LOW BID PRICE ON THE CARDS. THE LETTER ALSO CONTAINS AN EXPRESSION OF THE COMPANY'S CONVICTION THAT ITS LOW BASIC BID PRICE WHEN ADDED TO THE COMMON CARRIER TRANSPORTATION CHARGES PAID BY THE PURCHASER WOULD GENERALLY RESULT IN LOWER DELIVERED COSTS TO THE GOVERNMENT THAN PROVIDED BY ANY OTHER BIDDER.

PARAGRAPH 40--- "EXPLANATION OF SHIPPING CHARGES"--- OF THE GENERAL TERMS AND CONDITIONS OF THE PROPOSAL AS REFERRED TO IN THE COMPANY'S LETTER OF DECEMBER 16, 1963, DEFINES THE TWELVE REGIONAL DESTINATION AREAS AND STATES THAT FOR THE PURPOSE OF COMPENSATING SUPPLIERS FOR SHIPPING CHARGES PURSUANT TO THE PROVISIONS OF PARAGRAPH 39, BIDDERS ARE INVITED TO QUOTE A PRICE PER 1,000 CARDS, BY AREAS, FOR ITEMS 38, 39, AND 40. PARAGRAPH 39 PROVIDES IN PRINCIPAL PART AS FOLLOWS:

"39. DELIVERY--- THE PRICES QUOTED FOR PRICE CLASS 1 CARDS INCLUDE THE SHIPPING CHARGE TO ANY DESTINATION (INCLUDING THOSE WITHIN THE COMMERCIAL ZONE OF THE MUNICIPALITY IN WHICH THE SHIPMENT ORIGINATES AS DEFINED BY THE INTERSTATE COMMERCE COMMISSION) FALLING WITHIN EACH OF THE TWELVE (12) REGIONAL AREAS AS EXPLAINED IN PAR. 40. THE PRICES QUOTED FOR PRICE CLASS 2, 3, AND 4 CARDS, PLUS THE APPROPRIATE CHARGE IN ITEM 38, 39 OR 40, COVER DELIVERY TO ANY DESTINATION (INCLUDING THOSE WITHIN THE COMMERCIAL ZONE OF THE MUNICIPALITY IN WHICH THE SHIPMENT ORIGINATES AS DEFINED BY THE INTERSTATE COMMERCE COMMISSION) FALLING WITHIN THE RESPECTIVE AREA.

"THE FOLLOWING PROVISIONS APPLY TO---

"/A) PRICE CLASSES 1, 2, 3, AND 4. DELIVERY TO THE DOOR OF THE SPECIFIED GOVERNMENT ACTIVITY BY FREIGHT OR EXPRESS COMMON CARRIERS ON ARTICLES FOR WHICH STORE-DOOR DELIVERY IS PROVIDED, FREE OR SUBJECT TO A CHARGE, PURSUANT TO REGULARLY PUBLISHED TARIFFS DULY FILED WITH THE FEDERAL AND/OR STATE REGULATORY BODIES GOVERNING SUCH CARRIER; OR, AT THE OPTION OF THE CONTRACTOR, BY PARCEL POST ON MAILABLE ARTICLES, OR BY THE CONTRACTOR'S VEHICLE. WHERE STORE-DOOR DELIVERY IS SUBJECT TO A CHARGE THE CONTRACTOR SHALL (A) PLACE THE NOTATION "DELIVERY SERVICE REQUESTED" ON BILLS OF LADING COVERING SUCH SHIPMENTS, AND (B) PAY SUCH CHARGE AND ADD THE ACTUAL COST THEREOF AS A SEPARATE ITEM TO HIS INVOICE.'

ITEM 38--- "SHIPPING CHARGES"--- PROVIDES FOR THE QUOTATION OF SHIPPING CHARGES PER 1,000 CARDS ON PRICE CLASSES 2, 3, AND 4 FROM THE BIDDER'S DESIGNATED SHIPPING POINT TO THE TWELVE REGIONAL AREAS IN SHIPMENTS OF 2,000 TO 20,000 CARDS; 20,001 TO 860,000 CARDS; 860,001 TO 4,000,000 CARDS; AND FROM 4,000,001 CARDS UP. THE ITEM ALSO STATES THAT THE BIDDER MAY ENTER A RATE OR "NC" (NO CHARGE) AND THAT SPACES LEFT BLANK WILL INDICATE NO BID (CANNOT FURNISH). BELL AND HOWELL COMPANY SHOWED ARDMORE, PENNSYLVANIA, AS ITS SHIPPING POINT AND ENTERED "NC" IN ALL OF THE ITEM 38 PRICE QUOTATION SPACES.

WHILE IT HAS BEEN CONSISTENTLY STATED BY THIS OFFICE THAT IT IS IMPROPER TO ALLOW A BIDDER TO CHANGE HIS BID AFTER THE PUBLIC OPENING TO THE PREJUDICE OF OTHER BIDDERS, WE DO NOT FEEL UNDER THE CIRCUMSTANCES HERE PRESENTED THAT ACCEPTANCE OF THE EXPLANATION FURNISHED BY THE PROTESTANT IN ITS LETTER OF DECEMBER 16, 1963, AS TO THE "NC" ENTRIES IN ITEM 38 WOULD NECESSARILY AMOUNT TO A CHANGE IN THE BELL AND HOWELL COMPANY'S BID; RATHER IT WAS A CLARIFICATION OF AN AMBIGUITY APPARENT ON THE FACE OF THE BID. WE HAVE HELD (39 COMP. GEN. 653) THAT A BIDDER PROPERLY MAY BE REQUESTED TO CONFIRM A BID, AS APPEARS TO HAVE BEEN DONE IN THIS CASE, WITH THE RESTRICTION THAT THE CONFIRMATION BE CONSISTENT WITH A REASONABLE INTERPRETATION OF THE BID SUBMITTED. HERE THE BELL AND HOWELL COMPANY MADE THE SPECIFIC NOTATION "ALL PRICES QUOTED ARE F.O.B. ARDMORE, PENN.' ON THE PRICE QUOTATION SHEET FOR THE COPY (DUPLICARD) CARDS, WHICH STATEMENT WAS MADE AGAIN ON THE "REMARKS" PAGE OF THE BID. THE APPARENT INCONSISTENCY TO SUCH REPEATED F.O.B. TERMS WAS THE ENTRY BY THE BIDDER OF THE LETTERS "NC" IN ALL AREAS OF ITEM 38. THE COMPANY'S LETTER OF DECEMBER 16, 1963, AFFIRMS THAT THE PRICES INTENDED WERE F.O.B. ARDMORE, AS EMPHASIZED IN THE BID, AND EXPLAINS THAT IN VIEW THEREOF IT CONSIDERED ANY ADDITIONAL INDICATION OF CHARGES IN ITEM 38 AS INAPPROPRIATE, SINCE TRANSPORTATION WOULD BE THE RESPONSIBILITY OF THE GOVERNMENT. IN THE CIRCUMSTANCES ACCEPTANCE OF THE BID WOULD NOT HAVE OBLIGATED THE BIDDER TO PREPAY SHIPPING CHARGES, AS INTENDED BY THE INVITATION, AND TO ACCEPT PAYMENT THEREFOR AT THE RATE QUOTED IN ITEM 38--- NAMELY, WITHOUT ANY CHARGE. CONSIDERING THE BID EITHER ON ITS FACE OR IN THE LIGHT OF THE BIDDER'S EXPLANATION, THE CONTRACTING OFFICER PROPERLY REGARDED THE BID AS OFFERING A PRICE FOR DELIVERY F.O.B. ARDMORE, PENNSYLVANIA, WITH ALL SHIPPING CHARGES TO BE PAID BY THE GOVERNMENT. 40 COMP. GEN. 393.

THE QUESTION THEN ARISES WHETHER THE F.O.B. ARDMORE PRICE QUOTATIONS BY BELL AND HOWELL COMPANY, WITHOUT ANY QUOTATION OF SHIPPING CHARGES TO DESTINATION AS CALLED FOR BY ITEM 38, IS AN INFORMALITY WHICH PROPERLY MAY BE WAIVED AS NOT GOING TO THE SUBSTANCE OF THE BID, OR WHETHER THE SHIPPING CHARGES CONSTITUTE A MATERIAL FACTOR OF THE PROPOSAL WHICH MAY NOT BE WAIVED AS AN INFORMALITY OR MINOR IRREGULARITY, AND HENCE AFFECTS THE RESPONSIVENESS OF THE BID.

ITEM 38 OF THE PROPOSAL, REQUIRING BIDDERS TO QUOTE CHARGES, IF ANY, TO COVER THE COST OF SHIPPING THE CARDS TO THE DESTINATION AREAS, IS INTENDED TO FIX EXACTLY THE TOTAL MAXIMUM COST, INCLUDING SHIPPING CHARGES, TO THE GOVERNMENT. WHILE THE NECESSITY FOR SUCH QUOTATIONS IN DETERMINING THE LOW BIDDER COULD BE MORE CLEARLY EXPRESSED IN PARAGRAPH 40, THE FACT THAT AWARDS ARE CONTEMPLATED ON THE BASIS OF PRICES WHICH INCLUDE DELIVERY TO DESTINATIONS FALLING WITHIN THE RESPECTIVE AREAS IS ADEQUATELY SHOWN ELSEWHERE IN THE PROPOSAL. PARAGRAPH 6.1 OF THE GENERAL TERMS AND CONDITIONS STATES IN CONNECTION WITH ORDERS FOR PRICE CLASSES 2, 3 AND 4 AS FOLLOWS:

"EACH CARD SPECIFICATION TO BE ORDERED WILL BE PRICED AGAINST EACH OF THE SEVERAL CONTRACTORS' PRICES FOR THE PURPOSE OF DETERMINING THE LOWEST PRICE FOR THE CARDS.

"TO THIS FIGURE WILL BE ADDED THE APPROPRIATE SHIPPING CHARGES (ITEM 38, 39 OR 40) TO ALL DESTINATIONS FALLING WITHIN THE RESPECTIVE AREAS.'

COMPUTATION OF THE DELIVERED PRICE BY ADDING THE BASIC BID PRICE AND THE APPROPRIATE CHARGE SET FORTH IN ITEM 38 IS ALSO SHOWN IN THE PROVISIONS OF PARAGRAPH 39 QUOTED HEREINBEFORE, AND THE ADDITION OF SUCH FACTORS IS STATED AGAIN IN THE EXPLANATION OF BASIC CHARGES ON PAGE 11 OF THE PROPOSAL. FURTHER, WHILE NOT VIEWED AS SUBSTITUTING FOR THE CONTRACT, THE "INSTRUCTIONS TO USING AGENCIES" ACCOMPANYING THE PROPOSAL SPECIFICALLY STATE UNDER "PRICES" THAT FOR OTHER THAN PRICE CLASS 1 CARDS AND EXCEPT WHERE SHIPMENT IS ORDERED BY A PREMIUM METHOD, DETERMINATION OF THE CONTRACT PRICE "MUST" INCLUDE SHIPPING COSTS IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 39, 40 AND 41. UNDER "SPECIAL NOTICE" OF THE INSTRUCTIONS IT IS STATED "THIS CONTRACT PROVIDES PRICES FOR DELIVERY TO ANY DESTINATION WITHIN THE VARIOUS STATES AND THE DISTRICT OF COLUMBIA. IT WILL NOT BE NECESSARY FOR USERS TO DETERMINE WEIGHT AND COMPUTE ACTUAL CHARGES OF CARRIERS TO DETERMINE WHICH CONTRACTOR IS LOW FOR ANY PARTICULAR ORDER.' THUS, IT IS EVIDENT THAT THE PROPOSAL PROVIDED AMPLE NOTICE TO THE BIDDERS AS TO THE NECESSITY AND REASONS FOR QUOTING SHIPPING CHARGES TO THE DELIVERY AREAS UNDER ITEM 38. SINCE THE REQUIREMENT FOR SHIPPING CHARGE QUOTATIONS IS AN ESSENTIAL ELEMENT OF THE BID, AND IS NECESSARY TO DETERMINE THE TOTAL AMOUNT THE GOVERNMENT WILL BE REQUIRED TO PAY FOR THE CARDS DELIVERED AT THE DESTINATIONS WITHOUT DETAILED COMPUTATION OF TRANSPORTATION COSTS, IT DOES NOT APPEAR THAT THE FAILURE TO STATE THE SHIPPING CHARGES UNDER ITEM 38 MAY REASONABLY BE VIEWED AS MERE INFORMALITY WHICH MAY BE WAIVED. COMPARE 38 COMP. GEN. 819, INVOLVING AN INVITATION REQUIRING BIDDERS TO STATE A GUARANTEED SHIPPING WEIGHT.

WE, THEREFORE, CONCUR IN THE OPINION OF YOUR OFFICE THAT THE BID FROM BELL AND HOWELL COMPANY IS NONRESPONSIVE INASMUCH AS IT DID NOT QUOTE ON THE BASIS OF THE TERMS AND CONDITIONS OF THE INVITATION.

CONCERNING BELL AND HOWELL'S SUGGESTED FOURTH ACTION PROPOSING CANCELLATION OF THE INVITATION, IT HAS BEEN HELD CONSISTENTLY THAT AN INVITATION CARRIES NO OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED AND ALL BIDS MAY BE REJECTED WHEN IT IS DETERMINED TO BE IN THE GOVERNMENT'S INTEREST TO DO SO. HOWEVER, HERE WE DO NOT FIND THAT THE RECORD ESTABLISHES THAT THE BIDS OF DAKOTA MICROFILM SERVICE, INC., AND MINNESOTA MINING AND MANUFACTURING COMPANY ARE UNREASONABLE, OR EVEN, AS CONTENDED BY BELL AND HOWELL, THAT THE PROTESTANT'S BASIC BID PRICE ON THE CARDS PLUS COMMON CARRIER TRANSPORTATION CHARGES ASSUMED BY THE PURCHASER WOULD RESULT IN A LOWER DELIVERED COST TO THE GOVERNMENT THAN THAT PROVIDED BY SUCH OTHER BIDDERS. IN THIS CONNECTION IT IS NOTED THAT THE BASIC PRICE QUOTED ON THE COPY (DUPLICARD) CARDS BY DAKOTA MICROFILM SERVICE, INC., IS LOWER IN EACH INSTANCE FOR THE CARDS IN QUANTITIES OF LESS THAN ONE MILLION AND ALTHOUGH THE BELL AND HOWELL COMPANY BASIC PRICE OF $24 PER THOUSAND CARDS FOR ORDERS OF ONE MILLION AND UP IS LESS THAN THE DAKOTA MICROFILM SERVICE, INC., BASIC PRICE OF $24.10, THE LATTER PRICE INCLUDES DELIVERY TO ALL DESTINATIONS IN THE CONTINENTAL UNITED STATES, AND WHEN THE ORDER IS IN EXCESS OF FOUR MILLION CARDS, TO ALASKA AND HAWAII. WHILE THE BASIC PRICE QUOTATIONS OF MINNESOTA MINING AND MANUFACTURING COMPANY ARE GENERALLY SLIGHTLY HIGHER THAN THE BASIC QUOTATIONS FURNISHED BY BELL AND HOWELL COMPANY, THE MINNESOTA MINING AND MANUFACTURING COMPANY QUOTATIONS INCLUDE DELIVERY TO ALL DESTINATIONS FOR ALL ORDERS UNDER ITS BID. IN ADDITION, YOU STATE THAT THE PRICES QUOTED BY BOTH DAKOTA MICROFILM SERVICE, INC., AND MINNESOTA MINING AND MANUFACTURING COMPANY UNDER ITEM 5, PRICE CLASS 4, COMPARE FAVORABLY WITH THE PRICES PAID BY THE GOVERNMENT UNDER PREVIOUS CONTRACTS. IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT THE PRESENT RECORD AFFORDS NO LEGAL BASIS FOR OBJECTION TO THE AWARDS MADE BY YOUR OFFICE FOR COPY (DUPLICARD) CARDS AND THAT SUCH AWARDS MAY BE SUSTAINED FOR THE FULL TERM OF THE CONTRACTS.

THE FILE RECEIVED WITH YOUR LETTER OF JANUARY 22, IS RETURNED AS REQUESTED.