B-158459, APR. 14, 1966

B-158459, APR. 14, 1966

TO INDUSTRIAL ENGINEERING AND EQUIPMENT CO.:

REFERENCE IS MADE TO YOUR PROTEST AGAINST AWARD OF A CONTRACT TO VULCAN ELECTRIC COMPANY (VULCAN) UNDER INVITATION FOR BIDS (IFB) NO. DSA-700-66- 2913, ISSUED FEBRUARY 2, 1966, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC), DEFENSE SUPPLY AGENCY (DSA), COLUMBUS, OHIO. THE BASIS OF YOUR PROTEST IS THAT VULCAN'S BID IS SOME 46 PERCENT HIGHER THAN YOUR LOW BID, AND, THEREFORE, AWARD TO VULCAN "MEANS THAT THE GOVERNMENT IS PAYING A PREMIUM OF OVER $3,200.00 TO VULCAN FOR THIS EQUIPMENT.'

THE IFB, AS AMENDED, SOLICITED BIDS TO FURNISH A TOTAL OF 140 ELECTRIC IMMERSION HEATERS CONFORMING TO ORDNANCE DRAWING NO. 9175896. THE TOTAL PROCUREMENT REQUIREMENT WAS SUBDIVIDED INTO FOUR ITEMS DESIGNATED AS ITEMS NOS. 1A, 1B, 2A AND 2B.

ON PAGE 1 OF THE IFB, BIDDERS WERE ADVISED THAT THE BIDDING INSTRUCTIONS, TERMS AND CONDITIONS, STANDARD FORM 33-A, WERE INCORPORATED THEREIN BY REFERENCE. PARAGRAPH 8 (A) OF STANDARD FORM 33-A READS AS FOLLOWS:

"8. AWARD OF CONTRACT.--- (A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.' PAGE 1 ALSO BORE THE FOLLOWING PERTINENT NOTATION:

"THE PORTIONS OF DCSC CONTRACT CLAUSE BOOK, EDITION 1--- 1 OCT. 65, REFERENCED IN THE SCHEDULE OF THIS IFB ARE INCORPORATED INTO AND BECOME A PART OF THIS SOLICITATION AND ANY RESULTANT CONTRACTS. (COPIES AVAILABLE UPON REQUEST TO: DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO 43215, ATTN: DCSC-DP (A.)"

ON PAGE 3 OF THE IFB BIDDERS WERE ADVISED THAT INCLUDING IN THE IFB ONLY A PORTION OF A CLAUSE SET OUT IN THE CONTRACT CLAUSE BOOK WOULD NOT VARY THE TERMS OF THE ENTIRE CLAUSE. AMONG THE CLAUSES IN THE DCSC CONTRACT CLAUSE BOOK WHICH WERE INCORPORATED INTO THE IFB BY REFERENCE, WAS ,4.108 TIME OF DELIVERY--- IFB," WHICH READS AS FOLLOWS IN THE DCSC CONTRACT CLAUSE BOOK:

"4.108 TIME OF DELIVERY (IFB) (MAY 60)

" (A) DELIVERY IS DESIRED BY THE GOVERNMENT IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:

TABLE

ITEM NO. QUANTITY TIME

(WITHIN THE NUMBER OF

DAYS STATED BELOW AFTER

DATE OF AWARD.)

(TO BE INCLUDED IN SOLICITATION)

"IF THE BIDDER IS UNABLE TO MEET THE ABOVE DELIVERY SCHEDULE, HE MAY WITHOUT PREJUDICE TO THE EVALUATION OF HIS BID, SET FORTH HIS PROPOSED DELIVERY SCHEDULE BELOW, BUT SUCH DELIVERY SCHEDULE MUST NOT EXTEND THE DELIVERY PERIOD BEYOND THE TIME FOR DELIVERY CALLED FOR IN THE FOLLOWING REQUIRED DELIVERY SCHEDULE SET FOR BELOW:

TABLE

REQUIRED DELIVERY SCHEDULE

ITEM NO. QUANTITY TIME

(WITHIN THE NUMBER OF

DAYS STATED BELOW AFTER

DATE OF AWARD.)

(TO BE INCLUDED IN SOLICITATION)

"BIDS OFFERING DELIVERY OF A QUANTITY UNDER SUCH TERMS OR CONDITIONS THAT DELIVERY WILL NOT CLEARLY FALL WITHIN THE APPLICABLE REQUIRED DELIVERY PERIOD SPECIFIED ABOVE WILL BE CONSIDERED NONRESPONSIVE AND WILL BE REJECTED.

"IF THE BIDDER DOES NOT PROPOSE A DIFFERENT DELIVERY SCHEDULE, THE GOVERNMENT'S DESIRED DELIVERY SCHEDULE SHALL APPLY.

TABLE

BIDDER'S PROPOSED DELIVERY SCHEDULE

(TO BE COMPLETED BY BIDDER)

ITEM NO. QUANTITY TIME

(WITHIN THE NUMBER OF

DAYS STATED BELOW AFTER

DATE OF AWARD.)

(TO BE INDICATED IN SOLICITATION)

"/B) ATTENTION IS DIRECTED TO PARAGRAPH 8 (D) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS (STANDARD FORM 33A) WHICH PROVIDES THAT A WRITTEN AWARD MAILED OR OTHERWISE FURNISHED TO THE SUCCESSFUL BIDDER RESULTS IN A BINDING CONTRACT. ANY AWARD HEREUNDER, OR A PRELIMINARY NOTICE THEREOF, WILL BE MAILED OR OTHERWISE FURNISHED TO THE BIDDER THE DAY THE AWARD IS DATED. THEREFOR, IN COMPUTING THE TIME AVAILABLE FOR PERFORMANCE, THE BIDDER SHOULD TAKE INTO CONSIDERATION THE TIME REQUIRED FOR THE NOTICE OF AWARD TO ARRIVE THROUGH THE ORDINARY MAILS. HOWEVER, A BID OFFERING DELIVERY BASED ON DATE OF RECEIPT BY THE CONTRACTOR OF THE CONTRACT OR NOTICE OF AWARD (RATHER THAN THE CONTRACT DATE) WILL BE EVALUATED BY ADDING THE MAXIMUM NUMBER OF DAYS NORMALLY REQUIRED FOR DELIVERY OF THE AWARD THROUGH THE ORDINARY MAILS. IF, AS SO COMPUTED, THE DELIVERY DATE OFFERED IS LATER THAN THE DELIVERY DATE REQUIRED IN THE INVITATION, THE BID WILL BE CONSIDERED NONRESPONSIVE AND REJECTED.'

THE DESIRED TIME OF DELIVERY FOR ALL QUANTITIES OF ALL ITEMS WAS STATED AS 30 DAYS, AND THE REQUIRED TIME WAS SPECIFIED AS 60 DAYS. IN ADDITION, DSA FORM 299-R, ENTITLED "INFORMATION TO BIDDERS" AND TRANSMITTED WITH THE BID FORMS, INCLUDED THE FOLLOWING ADMONITION:

"TIME OF DELIVERY: TO BE RESPONSIVE, BIDS MUST MEET THE REQUIRED DELIVERY TIME. BIDS BASED ON DELIVERY WITHIN A STATED NUMBER OF DAYS "AFTER RECEIPT OF ORDER" WILL BE NON-RESPONSIVE, UNLESS THE DELIVERY TIME OFFERED AND TRANSMISSION TIME OF THE AWARD BY MAIL DO NOT EXCEED THE REQUIRED DELIVERY TIME.'

BIDS WERE OPENED ON FEBRUARY 17, AS SCHEDULED. OF THE FIVE BIDS RECEIVED, YOUR BID WAS LOW WITH A UNIT PRICE OF $49.20 ON ALL ITEMS, AND VULCAN'S BID WAS SECOND LOW WITH UNIT PRICES OF $72.02 FOR ITEM 1A, $73.40 FOR ITEM 1B, $72.05 FOR ITEM 2A, AND $72.70 FOR ITEM 2B.

YOUR PROPOSED DELIVERY SCHEDULE, INSERTED IN THE SPACE PROVIDED ON PAGE NO. 3 OF THE IFB FOR ,TIME OF DELIVERY--- RFP," SPECIFIED THAT DELIVERY OF ITEMS 1A AND 1B, COVERING 70 UNITS, WOULD BE MADE "60 DAYS FROM RECEIPT OF ORDER.' VULCAN'S BID PROPOSED "60 DAYS" DELIVERY OF ALL QUANTITIES FOR ALL FOUR ITEMS, WHICH IS TO BE CONSTRUED UNDER THE LANGUAGE OF CLAUSE 4.108 AS SET OUT IN THE CONTRACT CLAUSE BOOK TO MEAN "WITHIN 60 DAYS AFTER DATE OF AWARD.'

WITH ALLOWANCE FOR MAILING OF AWARD, UNDER YOUR BID, DELIVERY COULD NOT BE MADE WITHIN 60 DAYS AFTER AWARD AS REQUIRED BY THE TERMS OF THE IFB. ACCORDINGLY, IT IS THE POSITION OF DCSC THAT YOUR BID IS NONRESPONSIVE. FURTHER, THE BID OF VULCAN BEING RESPONSIVE TO THE IFB AS TO DELIVERY TIME AND OTHER FACTORS, AND THE PRICES OFFERED BY VULCAN HAVING BEEN DETERMINED TO BE FAIR AND REASONABLE BASED UPON PRICES PREVIOUSLY PAID FOR THE ITEMS IN QUESTION, THE CONTRACTING OFFICER PROPOSES TO MAKE AWARD TO VULCAN. DSA HEADQUARTERS CONCURS WITH THE RECOMMENDATION OF THE CONTRACTING OFFICER, BUT AWARD IS BEING WITHHELD PENDING OUR DECISION ON YOUR PROTEST.

THE APPLICABLE PROCUREMENT STATUTE, 10 U.S.C. 2305 (C), REQUIRES THAT AWARDS IN FORMALLY ADVERTISED PROCUREMENTS BE MADE TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED. THE LANGUAGE IN PARAGRAPH 8 (A), STANDARD FORM 33-A, IS SIMILAR TO THE LANGUAGE OF THE STATUTE. FURTHER, ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2 (A), ISSUED IN IMPLEMENTATION OF THE PROCUREMENT STATUTE, REQUIRES REJECTION OF BIDS WHICH FAIL TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION.

WHERE AN INVITATION ON ITS FACE REQUIRES DELIVERY WITHIN A STATED PERIOD, TIME MUST BE REGARDED AS OF THE ESSENCE OF THE CONTRACT. 36 COMP. GEN. 181. FAILURE OF A BID TO CONFORM TO THE REQUIRED DELIVERY SCHEDULE MUST BE REGARDED AS A MATERIAL DEVIATION WHICH CANNOT BE WAIVED AND WHICH REQUIRES REJECTION OF THE BID, 34 COMP. GEN. 24, AND UNDER AN INVITATION WHICH REQUIRES DELIVERY WITHIN A STATED NUMBER OF DAYS AFTER DATE OF CONTRACT, A BID WHICH OFFERS DELIVERY WITHIN THE SAME NUMBER OF DAYS "AFTER RECEIPT OF ORDER" IS NOT RESPONSIVE. 43 COMP. GEN. 813; 38 ID. 876, 878.

THE IFB PLACED YOU ON NOTICE THAT A BID OFFERING DELIVERY BASED ON DATE OF RECEIPT OF NOTICE OF AWARD, RATHER THAN DATE OF CONTRACT (OR AWARD), WOULD BE EVALUATED BY ADDING TO THE OFFERED DELIVERY PERIOD THE TIME REQUIRED FOR MAILING THE NOTICE OF AWARD TO YOU. CLEARLY, THEREFORE, DELIVERY 60 DAYS AFTER RECEIPT OF ORDER (I.E., NOTICE OF AWARD) WOULD BE LATER THAN 60 DAYS AFTER DATE OF CONTRACT (OR AWARD), NO MAILING TIME BEING FOR CONSIDERATION IN THE LATTER CASE. ACCORDINGLY, YOUR BID WAS NOT RESPONSIVE TO A MATERIAL REQUIREMENT OF THE IFB THEREBY NECESSITATING ITS REJECTION IN COMPLIANCE WITH THE PROVISIONS OF THE PROCUREMENT STATUTE AND REGULATIONS, AND YOUR PROTEST AGAINST SUCH REJECTION MUST BE DENIED.

WITH RESPECT TO YOUR REMARK THAT AWARD TO VULCAN WILL RESULT IN PAYMENT OF MORE THAN $3,200 FOR THE PROCUREMENT ITEM, WHETHER RESPONSIVE BIDS SHOULD BE REJECTED AS UNREASONABLE IN PRICE IS A MATTER WITHIN THE DISCRETION OF THE CONTRACTING AGENCY, AND IN THE EVENT DSA DETERMINES, AFTER PROPER CONSIDERATION OF ALL APPROPRIATE FACTORS, THAT VULCAN'S BID PRICE IS REASONABLE, THIS OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF DSA. HOWEVER, WE HAVE RECOMMENDED TO DSA THAT FULL CONSIDERATION BE GIVEN TO BOTH THE REASONABLENESS OF YOUR SUBSTANTIALLY LOWER BID PRICE AND TO THE LIKELIHOOD THAT YOUR COMPANY WOULD BE ABLE TO SATISFACTORILY PERFORM THE CONTRACT AT ..END :