B-157219, AUG. 30, 1965

B-157219, AUG. 30, 1965

TO VOM BAUR, BERESFORD AND COBURN:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 12 AND CONFIRMING LETTERS DATED JULY 16 AND AUGUST 19, 1965, PROTESTING, IN BEHALF OF DIEBOLD, INC., ANY AWARD TO REMINGTON RAND OFFICE SYSTEMS, UNDER INVITATION FOR BIDS NO. M7-40-65, ISSUED BY THE VETERANS ADMINISTRATION, HINES, ILLINOIS.

THE INVITATION WAS ISSUED MAY 14, 1965, AND SOLICITED BIDS TO SUPPLY VARIOUS UNITS OF MECHANIZED FILING EQUIPMENT FOR DESIGNATED VETERANS ADMINISTRATION HOSPITALS AND CENTERS IN VARIOUS STATES, GROUPINGS OF WHICH STATES WERE DESIGNATED BY ZONE NUMBERS IN WHICH DELIVERY AND INSTALLATION WERE TO BE MADE AT CONTRACTOR'S EXPENSE. IN ADDITION, THE PROCUREMENT WAS DIVIDED INTO ITEMS NUMBERED 1 TO 7, EACH ITEM CORRESPONDING TO A ZONE AS DESIGNATED IN THE INVITATION.

SUMMARY BIDS WERE INVITED OF WHICH "A" WAS UPON ITEMS 1-3,INCLUSIVE, ALL OR NONE,"B" WAS UPON ITEMS 5-7, INCLUSIVE, ALL OR NONE AND "C" WAS UPON ITEMS 1-7, INCLUSIVE, ALL OR NONE. EXHIBIT I OF THE INVITATION STATED THE QUANTITIES REQUIREMENTS AS TO EACH TYPE OF EQUIPMENT THAT WAS TO BE DELIVERED TO EACH STATION IN THAT DELIVERY ZONE. THESE QUANTITIES COVERED DELIVERIES TO BE MADE ON TWO DATES, THOSE UNITS TO BE DELIVERED NOT LATER THAN OCTOBER 29, 1965--- DESIGNATED AS "/A)" QUANTITY FOR EACH ZONE--- AND THOSE UNITS TO BE DELIVERED BY DECEMBER 31, 1965--- KNOWN AS THE ,/B)" QUANTITY FOR EACH ZONE. YOUR PROTEST IS CONCERNED ONLY WITH THE AWARD OF THE MECHANIZED FILING EQUIPMENTS IN TERMS OF THE QUANTITIES OF EACH TYPE TO BE DELIVERED AND INSTALLED AT VARIOUS VETERANS ADMINISTRATION STATIONS THROUGHOUT THE COUNTRY UNDER ITEMS 1 AND 3 OF THE INVITATION.

REMINGTON RAND OFFICE SYSTEMS AND DIEBOLD, INC., WERE THE ONLY BIDDERS. THE CONTRACTING OFFICE AWARDED ITEMS 1 AND 3 AND 5 TO 7 TO REMINGTON RAND. ITEMS 2 AND 4 WERE AWARDED TO DIEBOLD. WHILE DIEBOLD WAS LOW BIDDER ON ITEMS 1 AND 3, AS WELL, ITS BID WAS CONSIDERED TO BE NONRESPONSIVE BY THE CONTRACTING OFFICER BECAUSE ITS FACTORY TRAINED SERVICE PERSONNEL AND FACILITIES WITH RESPECT TO SOME OF THE STATIONS INCLUDED IN ITEMS 1 AND 3, WERE LOCATED MORE THAN 100 MILES FROM THE STATIONS TO WHICH THOSE PARTICULAR UNITS OF EQUIPMENT WERE TO BE DELIVERED, INSTALLED AND SERVICED. IT IS THE ADMINISTRATIVE VIEW THAT THESE CIRCUMSTANCES RENDERED THE DIEBOLD BID NONRESPONSIVE FOR THE QUANTITIES OF ITEMS 1 AND 3 BECAUSE OF THE PROVISION ON PAGE 10 OF THE INVITATION REGARDING THE REQUIRED LOCATION OF SUCH SERVICE FACILITIES. IS DIEBOLD'S CONTENTION THAT THE DEVIATIONS RESPECTING THOSE STATIONS IN ITEMS 1 AND 3 WERE IMMATERIAL AS NOT AFFECTING THE PRICE, QUALITY OR QUANTITY OF THE EQUIPMENT AND SHOULD HAVE BEEN WAIVED AS AN INFORMALITY AND THAT, IN ANY EVENT, THERE WAS NO AUTHORITY FOR THE CONTRACTING OFFICER TO REJECT THE REMAINING UNITS UNDER ITEMS 1 AND 3 AS TO WHICH DIEBOLD WAS PLAINLY THE LOW RESPONSIVE BIDDER.

AS ORIGINALLY ISSUED, THE INVITATION PROVIDED AT PAGE 6 UNDER SPECIAL PROVISION 2,"METHOD OF AWARD," AS FOLLOWS:

"AWARD WILL BE MADE ON ITEMS 1 TO 7, INCLUSIVE, IN THE AGGREGATE, AT THE LOWEST ACCEPTABLE NET PRICE PER FILING INCH UNDER EACH ITEM, BASED ON THE TOTAL COST OF THE EQUIPMENT AND INSTALLATION, DIVIDED BY THE TOTAL NUMBER OF FILING INCHES UNDER EACH ITEM. THE ENTIRE GROUP WILL BE AWARDED TO THE BIDDER QUOTING THE LOWEST TOTAL COST PER FILING INCH FOR ALL ITEMS IN THE GROUP. IT WILL BE NECESSARY FOR EACH BIDDER TO STATE THE UNIT PRICE OF EACH ITEM AND THE TOTAL PRICE QUOTED FOR ALL ITEMS IN THE GROUP. DISCOUNTED AGGREGATE BIDS MAY BE OFFERED WITHOUT REGARD TO INDIVIDUAL UNIT PRICES. SUCH DISCOUNTED AGGREGATE BIDS WILL BE CONSIDERED PROVIDED THEY ARE PROPERLY IDENTIFIED IN THE BID.'

AMENDMENT NO. 2, DATED MAY 28, 1965, CHANGED SPECIAL PROVISION 2, "METHOD OF AWARD" AND SUBSTITUTED THE FOLLOWING:

"2. METHOD OF AWARD: AWARD WILL BE MADE ON INDIVIDUAL ITEMS, INDIVIDUAL SUMMARY BIDS, OR A COMBINATION OF INDIVIDUAL ITEM AND SUMMARY BIDS, WHICHEVER IS MOST ADVANTAGEOUS TO THE GOVERNMENT BASED ON THE LOWEST ACCEPTABLE NET PRICE PER FILING INCH.'

PAGE 10 OF THE INVITATION CONTAINS THE FOLLOWING PARAGRAPH:

"SERVICE FACILITIES: BIDDER MUST HAVE SUITABLE FACTORY TRAINED SERVICE PERSONNEL AND FACILITIES AVAILABLE WITHIN 100 MILES OF EACH RECEIVING STATION AND MUST INCLUDE IN HIS BID INFORMATION AS TO THE LOCATION OF HIS NEAREST SERVICE FACILITIES INCLUDING DISTANCE (MILEAGE) FROM EACH STATION.'

DIEBOLD'S PROTEST RELIES UPON THE FACT THAT THE INVITATION INCORPORATED THE TERMS AND CONDITIONS OF STANDARD FORMS 30 AND 33 (OCT. 1957 ED.). PARAGRAPH 8 (C) OF THE TERMS AND CONDITIONS PROVIDED AS FOLLOWS:

"THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, BIDS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY BID UPON AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN HIS BID.'

IT IS ADMINISTRATIVELY REPORTED THAT THE AVAILABILITY OF SERVICE PERSONNEL AND FACILITIES WAS AND IS CONSIDERED A MATERIAL FACTOR IN THE PROCUREMENT OF SUCH EQUIPMENT AND AS SUCH COULD NOT BE WAIVED. WHILE IT IS ALSO ADMINISTRATIVELY CONCEDED THAT A TIME FACTOR MIGHT HAVE BEEN USED AS AN ALTERNATIVE TO THE DISTANCE FACTOR AS HAS BEEN DONE IN OTHER TYPES OF PROCUREMENT, IT IS FELT THAT HAVING SELECTED THE DISTANCE FACTOR, IT MUST BE APPLIED.

DIEBOLD'S CONTENTION IS ALSO THAT THE CONTRACTING OFFICER SHOULD HAVE CANCELLED THE UNITS IN ITEMS 1 AND 3 WHERE THEIR SERVICE POINTS WERE MORE THAN 100 MILES FROM THE RECEIVING STATION AND AWARDED THE REMAINING UNITS TO IT. WHILE SUCH ACTION COULD HAVE BEEN TAKEN UNDER THE LANGUAGE OF PARAGRAPH 8 (C), IT WAS FELT THAT SUCH ACTION WOULD NOT BE PROPER UNDER THE CIRCUMSTANCES. THE NUMBER OF UNITS SET FORTH IN THE INVITATION CONSTITUTED A FIRM REQUIREMENT AND THE RESPONSIVE BID PRICES WERE CONSIDERED REASONABLE. UNDER SUCH CIRCUMSTANCES THERE WAS NO PROPER BASIS TO MAKE AN AWARD FOR LESS THAN THE QUANTITY CALLED FOR. WHILE THE DIFFERENCE IN THE BID PRICES OF THE TWO BIDDERS ON ITEMS 1 AND 3 WAS RECOGNIZED, THIS FACTOR WAS NOT CONSIDERED TO BE CONTROLLING AS THERE WAS NO ASSURANCE THAT THE QUANTITIES NOT AWARDED WOULD BE AVAILABLE AT THE SAME PRICES.

THE INVITATION CLEARLY PROVIDED FOR THE SUBMISSION OF BIDS ON AN ITEM BASIS, THE ITEMS BEING THOSE NUMBERED 1 THROUGH 7 OR UPON SUMMARY BIDS. THE AWARD WAS NOT MADE ON AN INDIVIDUAL UNIT OR STATION BASIS AS YOUR LETTER APPEARS TO CONTEND BUT WAS MADE ON ITEMS 1, 2, 3 AND 4 AND SUMMARY BID "B" (ITEMS 5-7). IN THIS REGARD IT IS REPORTED THAT THE CHANGE EFFECTED BY AMENDMENT NO. 2 TO THE INVITATION RESULTED FROM A PREVIOUS PROTEST IN THE MATTER FROM DIEBOLD, INC., WHEREBY AWARD ORIGINALLY CONTEMPLATED IN THE AGGREGATE ONLY WAS ADMINISTRATIVELY CHANGED TO AN ITEM OR SUMMARY BID AWARD AS SET FORTH ABOVE. IT THEREFORE APPEARS THAT THE BASIS OF AWARD HAD RECEIVED THE APPROVAL OF DIEBOLD PRIOR TO SUBMISSION OF THE BIDS. DIEBOLD'S PRESENT PROTEST DOES NOT DISCLOSE WHY ITS CURRENT OBJECTIONS TO THE METHOD OF AWARD WERE NOT PRESENTED ON THE EARLIER OCCASION. IF THE PROTESTANT COULD NOT COMPLY WITH THE 100-MILE LIMITATION THIS COULD HAVE BEEN DISCUSSED PRIOR TO BID OPENING. UNDER THE PROVISIONS OF SECTION 303 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 41 U.S.C. 253, BIDS ARE REQUIRED TO CONFORM TO THE TERMS OF THE ADVERTISED INVITATION TO BE ELIGIBLE FOR AWARD. PURSUANT THERETO SECTION 1-2.404 2 (A) OF THE FEDERAL PROCUREMENT REGULATIONS PROVIDES FOR THE REJECTION OF A BID WHICH FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION FOR BIDS. WITH RESPECT TO THE UNIT TO BE DELIVERED TO CLARKSBURG, WEST VIRGINIA, DIEBOLD'S BID SPECIFIED 110 MILES AS THE SERVICE FACILITY DISTANCE FROM THAT STATION. YOUR LETTER CONTENDS THAT THE ACTUAL DISTANCE IS 80 MILES BY AIR OR 110 MILES BY SURFACE TRANSPORTATION. THE ADMINISTRATIVE REPORT STATES THAT AT THE PRESENT IT CANNOT BE ESTABLISHED FROM STANDARD MILEAGE GUIDES THAT THE DISTANCE IS LESS THAN 115 MILES AS SHOWN BY RAND MCNALLY AND CONFIRMED IN "HOUSEHOLD GOODS CARRIER'S BUREAU MILEAGE GUIDE NO. 7.' IT IS REPORTED THAT TO ARRIVE AT THE 80 MILE FIGURE YOU STATE TO BE THE ACTUAL DISTANCE ONE MUST MULTIPLY THE MAP SCALE BY THE STRAIGHT LINE DISTANCES BETWEEN THE TWO POINTS (PITTSBURGH TO CLARKSBURG). SINCE DIEBOLD'S BID APPARENTLY USED ROAD MILEAGE IN ITS OTHER MILEAGE QUOTATIONS IN ITS BID, FOR EXAMPLE, IN THE THREE INSTANCES UNDER ITEM 3 WHERE THE INDICATED DISTANCE BETWEEN DELIVERY POINT AND SERVICE INSTALLATION ALSO EXCEEDED 100 MILES, THERE IS NO REASON WHY THE CONTRACTING OFFICER SHOULD HAVE APPLIED AIR MILEAGE TO MEASURE THE DISTANCE IN THIS INSTANCE.

THE LANGUAGE OF THE INVITATION PROVISION REGARDING SERVICE FACILITIES CLEARLY REQUIRES THAT BIDS WILL BE CONSIDERED ONLY FROM BIDDERS WHO MEET THE REQUIREMENT FOR THOSE FACILITIES AND THE BIDDERS MUST INCLUDE IN THEIR BIDS THE DISTANCE BETWEEN THE NEAREST SERVICE FACILITY TO EACH DELIVERY POINT. SINCE YOUR BID GAVE THE DISTANCE BETWEEN CLARKSBURG AND PITTSBURGH AS 110 MILES THE CONTRACTING OFFICER HAD NO CHOICE BUT TO FIND YOUR BID NONRESPONSIVE AS TO ITEM 1. THE LINE HAD BEEN DRAWN REGARDING DISTANCE AND WHILE THE EXCESS DISTANCE MAY BE COMPARATIVELY SLIGHT THE CRITERION WAS STATED TO BE WITHIN 100 MILES. DISTANCE REASONABLY COULD AFFECT THE PRICE ASKED FOR THE EQUIPMENT BOTH AS TO DELIVERY AND MAINTENANCE AND MIGHT BE SAID TO AFFECT THE QUALITY OF THE MAINTENANCE. THE PROVISION IN THE INVITATION REQUIRING BIDDERS TO STATE MILEAGES IS INTENDED TO SHOW THAT THE DESIRABLE LIMITS STATED BY THE PROCURING AGENCY HAVE BEEN MET. AS SUCH IT IS AN ESSENTIAL ELEMENT OF THE BID. IN THE CIRCUMSTANCES, IT IS OUR OPINION THAT THE FAILURE TO PROVIDE SERVICE FACILITIES WITHIN THE LIMITS OF THE ACCEPTABLE DISTANCES FOR ALL STATIONS IN EACH ITEM IS NOT A MINOR DEVIATION OR DEFICIENCY IN THE BID WHICH MAY BE WAIVED AS AN INFORMALITY. SEE 30 COMP. GEN. 179 AND 35 ID. 98.

THE PROCUREMENT REQUIREMENTS OF THE GOVERNMENT ARE FOR DETERMINATION BY THE ADMINISTRATIVE AGENCY CONCERNED. 17 COMP. GEN. 554. HOWEVER, ADVERTISED SPECIFICATIONS SHOULD BE STATED IN SUCH TERMS AS WILL PERMIT THE BROADEST FIELD OF COMPETITION WITHIN THE MINIMUM NEEDS OF THE AGENCY. 32 COMP. GEN. 384. IN ITS REPORT TO OUR OFFICE THE VETERANS ADMINISTRATION HAS INDICATED THAT ITS MINIMUM NEEDS DICTATED THE LIMITING OF THE BIDDER'S SERVICE FACILITY DISTANCES TO 100 MILES. THE RECORDS TO BE HOUSED IN THE EQUIPMENT ARE CONSIDERED TO BE VERY IMPORTANT AND REFERENCE TO THEM IS CONSTANT. AS SUCH THEIR READY AVAILABILITY TO THE AGENCY AT ALL TIMES WAS AND IS CONSIDERED A MATERIAL FACTOR IN THE PROCUREMENT OF SUCH EQUIPMENT. REMINGTON RAND'S BID WAS FOR ALL STATIONS OR UNITS UNDER ITEMS 1 AND 3 AND IT WAS DEEMED RESPONSIVE. TO DENY IT THE AWARD OF THE ENTIRE ITEM IN EACH INSTANCE ON THE BASIS THAT DIEBOLD'S BID WAS LOWER IN PRICE THOUGH NONRESPONSIVE WOULD NOT BE PROPER AS SUCH A BID DOES NOT CONSTITUTE AN OFFER WHICH MAY PROPERLY BE ACCEPTED AND TO PERMIT A BIDDER TO MAKE HIS BID RESPONSIVE BY CHANGING, ADDING TO, OR DELETING A MATERIAL PART OF THE BID WOULD BE TANTAMOUNT TO PERMITTING A BIDDER TO SUBMIT A NEW BID.

ACCORDINGLY, WE DO NOT BELIEVE THAT IN THE CIRCUMSTANCES OF THIS CASE IT WOULD BE PROPER FOR OUR OFFICE TO INTERFERE IN THE ADMINISTRATIVE ACTION AND YOUR PROTEST IS DENIED.