B-187031, JANUARY 4, 1977

B-187031, JANUARY 4, 1977

DURING PREAWARD SURVEY, LOW BIDDER PROPOSED TO USE MATERIALS IN PERFORMANCE OF CONTRACT OTHER THAN THOSE REQUIRED BY SPECIFICATIONS. BID SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE, SINCE GOVERNMENT'S ACCEPTANCE OF BID AS SUBMITTED WOULD HAVE EFFECTIVELY BOUND BIDDER TO PERFORM IN ACCORDANCE WITH ADVERTISED TERMS OF SOLICITATION AND PROPOSAL WAS MERELY OFFER OF ALTERNATIVE APPROACH AND NOT INDICATION THAT BIDDER MISUNDERSTOOD SPECIFICATION.

NORDAM DIVISION OF R. H. SIEGFRIED, INC.:

INVITATION FOR BIDS (IFB) NO. M00681-76-B-0049 WAS ISSUED ON MARCH 23, 1976, BY THE UNITED STATES MARINE CORPS FOR ELECTRONIC EQUIPMENT SHELTERS AND OPTIONS FOR A RADIO FREQUENCY INTERFERENCE MODIFICATION KIT FOR EACH SHELTER. THE SOLICITATION'S SPECIFICATIONS PROVIDED THAT THE ROOF, FLOOR, END, SIDES, AND DOOR PANELS WERE TO BE " * * * A LAMINATION OF FOAMED PLASTIC, BONDED BETWEEN ALUMINUM ALLOY SKINS. * * * " THE LOW BID WAS SUBMITTED BY NORDAM DIVISION OF R. H. SIEGFRIED, INC. (NORDAM).

A PREAWARD SURVEY OF NORDAM WAS PERFORMED ON JUNE 16 AND 17. DURING THE SURVEY, NORDAM ORALLY PROPOSED TO ADD HONEYCOMB CORING TO THE FOAM PLASTIC REFERENCED IN THE SPECIFICATIONS, AND WAS INVITED BY A MEMBER OF THE SURVEY TEAM TO SUBMIT A PROPOSAL IN WRITING TO THE CONTRACTING OFFICER. NORDAM, IN PRESENTING THE PROPOSAL BY LETTER OF JUNE 17, NOTIFIED THE CONTRACTING OFFICER THAT IT " * * * HAS MADE THE DECISION TO UTILIZE HONEYCOMB CORE AND A HOT BOND SYSTEM IN CONJUNCTION WITH FOAM THAT HAS BEEN PRESSED INTO THE CORE * * * ." NORDAM ALSO STATED THAT ITS DECISION WAS IN COMPLIANCE WITH THE SOLICITATION'S SPECIFICATIONS.

HOWEVER, ON JUNE 21 THE SAME SURVEY TEAM MEMBER MENTIONED ABOVE ADVISED THE CONTRACTING OFFICER THAT NORDAM'S PROPOSAL " * * * CAN BE CONSIDERED NON-RESPONSIVE TO THE IFB. * * * " ON THE BASIS OF NORDAM'S LETTER AND THAT ADVICE, THE CONTRACTING OFFICER REJECTED NORDAM'S BID AS NONRESPONSIVE, AND AWARD WAS MADE TO THE SECOND LOW BIDDER, CRAIG SYSTEMS CORPORATION (CRAIG), ON JULY 6. NORDAM, IN A LETTER TO THE CONTRACTING OFFICER DATED JULY 20, STATED THAT IT ALSO ADVISED THE SURVEY TEAM THAT IT WAS " * * * PREPARED TO PERFORM THE CONTRACT BY CONSTRUCTING THE SHELTERS EITHER WITH OR WITHOUT THE HONEYCOMB CORE, BUT PREFERRED TO USE HONEYCOMB

NORDAM SUBSEQUENTLY FILED A TIMELY PROTEST IN THIS OFFICE AGAINST THE CONTRACTING OFFICER'S DECISION, AND SHORTLY THEREAFTER FILED AN ACTION IN UNITED STATES DISTRICT COURT TO TEMPORARILY ENJOIN WORK ON THE CONTRACT. HOWEVER, PRIOR TO THE SCHEDULED HEARING ON THE MATTER, CRAIG, AFTER STATING THAT IT HAD INCURRED LITTLE OR NO COSTS IN PERFORMING THE CONTRACT, AGREED TO SUSPEND PERFORMANCE UNTIL RESOLUTION OF THE PROTEST. IN ADDITION, THE GOVERNMENT AGREED THAT, IF THIS OFFICE WERE TO DECIDE THAT THE AWARD TO CRAIG WAS VALID, THE DELIVERY DATE FOR THE SHELTERS WOULD BE EXTENDED, AND AN EQUITABLE ADJUSTMENT WOULD BE MADE IN THE CONTRACT PRICE. THE GOVERNMENT ALSO RESERVED ITS RIGHT TO FULLY TERMINATE THE CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT. AS A RESULT OF THOSE REPRESENTATIONS, NORDAM WITHDREW THE MATTER FROM COURT.

IN A REPORT RESPONSIVE TO THE PROTEST, THE MARINE CORPS HAS DECIDED THAT NORDAM'S BID WAS IN FACT RESPONSIVE, AND THAT IT ACTED ERRONEOUSLY IN REJECTING THE BID. THE BASIS FOR THAT DECISION WAS STATED AS FOLLOWS:

" * * * IT IS THE OPINION OF THE MARINE CORPS THAT NORDAM'S BID WAS RESPONSIVE, I.E., ITS ACCEPTANCE WOULD RESULT IN A LEGAL OBLIGATION TO PERFORM IN ACCORDANCE WITH THE MATERIAL PROVISIONS OF THE SOLICITATION, INCLUDING THE REQUIREMENT THAT THE PANELS BE A LAMINATION OF FOAMED PLASTIC, BONDED BETWEEN ALUMINUM ALLOY SKINS, AND ITS ACCEPTANCE WOULD NOT RESULT IN PREJUDICE TO OTHER BIDDERS. WITH REGARD TO THE LEGAL EFFECT OF NORDAM'S LETTER TO THE CONTRACTING OFFICER OF JUNE 17, 1976, SOME 30 DAYS AFTER THE DATE SET FOR RECEIPT OF BIDS, IT IS ELEMENTARY THAT A BIDDER DOES NOT HAVE THE RIGHT TO MODIFY HIS BID AFTER THE TIME SET FOR RECEIPT THEREOF. * * * "

IN ADDITION, THE MARINE CORPS STATED THAT, ALTHOUGH IT DOES NOT AGREE WITH NORDAM THAT THE USE OF A HONEYCOMB CORE MEETS THE SOLICITATION'S REQUIREMENTS, THE MATTER IS ESSENTIALLY ACADEMIC IN LIGHT OF NORDAM'S POSITION AS REFLECTED IN THE JULY 20 LETTER TO THE CONTRACTING OFFICER.

WE SEE NO BASIS TO DISAGREE WITH THE MARINE CORPS' PRESENT POSITION THAT HAD IT ACCEPTED NORDAM'S BID AS SUBMITTED, THE BIDDER WOULD EFFECTIVELY HAVE BEEN BOUND TO PERFORM IN ACCORDANCE WITH THE ADVERTISED TERMS OF THE SOLICITATION, WHICH DO NOT PROVIDE FOR THE USE OF A HONEYCOMB CORE. SEE 52 COMP.GEN. 955(1973).

IN THIS CONNECTION, WE BELIEVE THAT NORDAM'S LETTER OF JULY 20 MAKES IT CLEAR THAT ITS PROPOSAL TO USE A HONEYCOMB CORE WAS MERELY AN OFFER OF AN ALTERNATIVE APPROACH IN CONSTRUCTION OF THE SHELTERS, AND NOT AN INDICATION THAT NORDAM MISUNDERSTOOD THE SPECIFICATION IN ISSUE. FURTHER, WE HAVE BEEN ADVISED THAT THE SMALL BUSINESS ADMINISTRATION HAS RECENTLY ISSUED A CERTIFICATE OF COMPETENCY AS TO NORDAM'S CAPACITY AND CREDIT AS A PROSPECTIVE CONTRACTOR UNDER THE SUBJECT IFB. ACCORDINGLY, AND IN VIEW OF THE SUSPENSION OF PERFORMANCE AND THE REPRESENTATION MADE BY CRAIG CONCERNING PERFORMANCE COSTS TO DATE, WE RECOMMEND THAT THE CONTRACT WITH CRAIG BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THAT AWARD BE MADE TO NORDAM.