B-171812, MAR 22, 1971

B-171812, MAR 22, 1971

BID RESPONSIVENESS - AMBIGUITY DECISION HOLDING THAT THE BID OF WAYNE MANUFACTURING COMPANY FOR A QUANTITY OF INDUSTRIAL SWEEPERS IS PROPERLY FOR ACCEPTANCE. ALTHOUGH LOW BIDDER, WAYNE, INCLUDED A COVER LETTER WITH ITS BID WHEREIN IT EXPLAINED WHY THE AVERAGE FREIGHT RATES FOR ITEMS I AND II, SOLICITED ON AN F.O.B. DESTINATION BASIS, WERE NOT APPLICABLE TO ITEMS III AND IV, SOLICITED ON AN F.O.B. ORIGIN BASIS SUCH LANGUAGE CANNOT BE READ TO PROVIDE A BASIS FOR INCREASING PRICES FOR ITEMS I AND II IN THE EVENT OF A FREIGHT INCREASE. THE ABOVE LANGUAGE IS SIMPLY UNNECESSARY AND DOES NOT RENDER THE BID NONRESPONSIVE.

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO A LETTER DATED JANUARY 29, 1971, WITH ENCLOSURES, FROM JAMES J. WILSON, ASSISTANT GENERAL COUNSEL, REAL PROPERTY AND PROCUREMENT DIVISION, REQUESTING OUR OPINION AS TO THE RESPONSIVENESS OF A BID SUBMITTED BY THE WAYNE MANUFACTURING COMPANY PURSUANT TO INVITATION FOR BIDS NO. 3113.

THE SUBJECT INVITATION WAS ISSUED ON NOVEMBER 27, 1970, FOR A QUANTITY OF 35 CLASS 1 INDUSTRIAL SWEEPERS AND A QUANTITY OF 6 CLASS 2 INDUSTRIAL SWEEPERS UNDER ITEMS I AND II, RESPECTIVELY, WITH PRICES TO BE QUOTED ON AN F.O.B. DESTINATION BASIS. ITEMS III AND IV OF THE INVITATION FOR BIDS ALSO CALLED FOR BIDS ON ESTIMATED QUANTITIES OF CLASS 1 AND CLASS 2 INDUSTRIAL SWEEPERS, RESPECTIVELY, BUT ON AN F.O.B. ORIGIN BASIS. TWO BIDS WERE RECEIVED AND OPENED ON DECEMBER 18, 1970. WAYNE SUBMITTED THE LOW BID OF $183,271.07, AND THE TENNANT COMPANY SUBMITTED A BID OF $184,247.40.

THE QUESTION CONCERNING THE RESPONSIVENESS OF WAYNE'S BID RESULTS FROM THE FOLLOWING PARAGRAPHS OF THE COVER LETTER ACCOMPANYING AND SPECIFICALLY MADE A PART OF ITS BID:

1. "THE EXACT FREIGHT INVOLVED TO THE VARIOUS 'POSTAL FACILITIES' LISTED ON PAGES 11, 12, 13, AND 14 OF THIS SOLICITATION WILL VARY FROM 'FACILITY' TO 'FACILITY' OF COURSE. IN ORDER TO ACCOMPLISH YOUR DESIRED PURPOSE OF ONE SINGLE PRICE PER UNIT 'TO BE DELIVERED ON PLATFORMS OF POSTAL FACILITIES ... ', AS LISTED ON PAGES 11, 12, 13, AND 14 OF THIS SOLICITATION, WE HAVE AVERAGED THE FREIGHT FOR THE 35 EACH CLASS 1 - GASOLINE-ENGINE POWERED AND FOR THE 6 EACH CLASS 2 - ELECTRIC-MOTOR POWERED. THE EXACT FREIGHT WILL BE HIGHER FOR SOME OF THE LOCATIONS, AND LOWER FOR OTHERS. THEREFORE, THIS BID IS BASED UPON AN AWARD FOR THE ENTIRE TOTAL OF 41 UNITS LISTED UNDER ITEM NO. I AND ITEM NO. II OF THIS SOLICITATION, AND FOR DELIVERY ONLY TO THE 41 'POSTAL FACILITIES' LISTED ON PAGES 11, 12, 13, AND 14 OF THIS SOLICITATION."

2. "THE 'AVERAGE FREIGHT RATES' USED TO ESTABLISH THE UNIT PRICES FOR ITEMS I AND II OF THIS SOLICITATION ARE NOT BINDING OR APPLICABLE TO OUR F.O.B. ORIGIN UNIT PRICE FOR ITEM III AND ITEM IV OF THIS SOLICITATION. THE 'POSTAL FACILITIES' TO BE PROVIDED AT A LATER DATE FOR ITEMS III AND IV COULD EASILY CHANGE THE 'AVERAGED FREIGHT RATES' USED FOR ITEMS I AND II. IN ADDITION, INCREASES IN FREIGHT RATES ARE ANTICIPATED IN 1971 THAT WOULD ALSO INCREASE THE 'AVERAGED FREIGHT RATES' USED FOR ITEMS I AND II."

IT IS THE DEPARTMENT'S OPINION THAT THE LAST SENTENCE OF THE PARAGRAPH 2 IS AMBIGUOUS IN THAT IT IS SUSCEPTIBLE OF TWO MEANINGS. FIRST, IT IS STATED THAT THE LANGUAGE MAY BE INTERPRETED AS AN ADDITIONAL REASON WHY THE "AVERAGED FREIGHT RATES" FOR ITEMS I AND II WERE NOT APPLICABLE TO ITEMS III AND IV, IN WHICH CASE RESPONSIVENESS OF THE BID WOULD NOT BE AFFECTED. THE SECOND POSSIBLE INTERPRETATION ACCORDING TO THE DEPARTMENT, IS THAT THE LANGUAGE WAS MEANT TO PROVIDE WAYNE A BASIS FOR INCREASING THE PRICES FOR ITEMS I AND II IN THE EVENT OF A FREIGHT RATE INCREASE, IN WHICH CASE THE BID IS RENDERED NONRESPONSIVE AND MUST BE REJECTED.

BOTH COMPANIES HAVE SUBMITTED THEIR VIEWS ON THE MATTER. BY TELEGRAM DATED JANUARY 11, 1971, WAYNE ADVISED THE CONTRACTING OFFICER THAT THE PARAGRAPH IN QUESTION REFERRED ONLY TO ITEMS III AND IV AND STATED THAT THE "AVERAGE FREIGHT RATES USED FOR ITEMS I AND II ARE NOT BINDING FOR ITEMS III AND IV AND THE CURRENT FREIGHT RATES IN EFFECT WHEN THE POSTAL FACILITIES DESTINATIONS BECOME KNOWN UNDER ITEMS III AND IV WILL BE ADDED TO THE FIRM F.O.B. POINTS OF ORIGIN BID PRICES SUBMITTED FOR ITEMS III AND IV." IN A LETTER DATED FEBRUARY 16, 1971, TO OUR OFFICE, WAYNE HAS CONFIRMED THE FOREGOING AND STATED THAT THERE WAS NO "SUBTLE" OR OTHER INTENT TO INCLUDE AN "ESCALATION FACTOR" IN ITS BID FOR ITEMS I AND II. TENNANT ARGUES THAT THE LANGUAGE USED BY WAYNE IS A CLEAR QUALIFICATION OF ITS BID PRICE FOR ITEMS I AND II AND, THEREFORE, ITS BID SHOULD BE REJECTED AS NONRESPONSIVE.

WHETHER WAYNE'S BID IS RESPONSIVE AND MUST BE ACCEPTED AS THE LOW RESPONSIVE BID, OR IS NONRESPONSIVE AND MUST BE REJECTED, DEPENDS UPON THE MEANING OF THE PARAGRAPH 2 OF ITS COVER LETTER. WE BELIEVE THE LANGUAGE OF PARAGRAPH 2 CONSIDERED IN CONJUNCTION WITH THE PRECEDING PARAGRAPH IS SUSCEPTIBLE OF ONLY ONE REASONABLE INTERPRETATION. THE FIRST SENTENCE OF THE PARAGRAPH 2 CLEARLY SAYS THAT THE "AVERAGED FREIGHT RATES" INCLUDED IN THE UNIT PRICES FOR ITEMS I AND II ARE NOT APPLICABLE TO ITEMS III AND IV. THERE IS NO DOUBT ABOUT THIS SINCE THE PRICES FOR ITEMS III AND IV ARE TO BE QUOTED ON AN F.O.B. ORIGIN BASIS. THE ONLY POSSIBLE MEANING TO BE ASCRIBED TO THE SECOND SENTENCE IS THAT SINCE THE DESTINATIONS FOR THE SWEEPERS UNDER ITEMS III AND IV MAY BE DIFFERENT THAN THE DESTINATIONS UNDER ITEMS I AND II, THE AVERAGED FREIGHT RATES USED IN THE LATTER UNIT PRICES WILL NOT BE APPLICABLE TO ITEMS III AND IV.THE LAST SENTENCE SIMPLY STATES ANOTHER REASON WHY THE AVERAGED FREIGHT RATES DEVELOPED AS EXPLAINED IN PARAGRAPH 1 FOR USE IN PRICING ITEMS I AND II, ARE NOT APPLICABLE TO ITEMS III AND IV.

ALTHOUGH THE ENTIRE PARAGRAPH 2 IS AN UNNECESSARY EXPLANATION OF WHY THE "AVERAGED FREIGHT RATES" USED FOR ITEMS I AND II ARE NOT AND CANNOT BE APPLICABLE TO ITEMS III AND IV, IT IS NOT IN OUR OPINION SUSCEPTIBLE OF ANY OTHER REASONABLE MEANING. ANY OTHER INTERPRETATION IS UNDULY STRAINED.

ACCORDINGLY, IT IS OUR DECISION THAT THE BID OF WAYNE MANUFACTURING COMPANY IS PROPERLY FOR ACCEPTANCE.