B-161504, JUNE 13, 1967, 46 COMP. GEN. 856

B-161504, JUNE 13, 1967, 46 COMP. GEN. 856

BIDS - GUARANTEES - FAILURE TO EXECUTE - PRODUCTION GUARANTEE UNDER SPECIFICATIONS REQUIRING A MINIMUM PAGE PRINT PRODUCTION GUARANTEE, THE FAILURE OF THE LOW BIDDER TO EXECUTE THE GUARANTEE CLAUSE IS AN OMISSION THAT GOES TO THE RESPONSIVENESS OF THE BID AND NOT TO THE RESPONSIBILITY OF THE BIDDER, AND THE VERBAL ASSURANCE OF THE LOW BIDDER AFTER BID OPENING OF INTENT TO COMPLY WITH THE PRODUCTION REQUIREMENT NOT HAVING BEEN FOR CONSIDERATION, THE CONTRACT AWARD TO THE LOW BIDDER SHOULD BE CANCELED, THE GUARANTEE OF COMPLIANCE WITH AT LEAST THE MINIMUM PRODUCTION REQUIREMENT AFFECTING NOT ONLY THE QUALITY OF WORK TO BE DELIVERED, BUT POSSIBLY ALSO THE PRICE, AND THE NONRESPONSIVE BID NOT CONSTITUTING AN OFFER FOR ACCEPTANCE, PERMITTING THE LOW BID TO BE MADE RESPONSIVE AFTER BID OPENING WAS TANTAMOUNT TO PERMITTING THE BIDDER TO SUBMIT A NEW BID.

TO THE PUBLIC PRINTER, UNITED STATES GOVERNMENT PRINTING OFFICE, JUNE 13, 1967:

BY LETTER OF MAY 10, 1967, WITH ENCLOSURES, YOU REQUESTED OUR DECISION ON THE PROTEST OF THE FEDERAL LITHOGRAPH COMPANY AGAINST THE AWARD OF A CONTRACT TO CRAFTSMAN PRESS, INC., IN THE CIRCUMSTANCES STATED.

IT IS REPORTED THAT CRAFTSMAN WAS THE LOW BIDDER UNDER AN INVITATION FOR BIDS ON A MULTIPLE AWARD CONTRACT COVERING PROGRAM 431, IRS MANUAL, FOR THE PERIOD MARCH 1, 1967, THROUGH FEBRUARY 28, 1968 (JACKET 252-640). THE CONTRACT WAS AWARDED ON FEBRUARY 28, 1967, TO CRAFTSMAN AS THE LOWEST BIDDER AND AWARDS ALSO WERE MADE IN DESCENDING ORDER OF PRECEDENCE TO METROPOLITAN LITHOGRAPH, INC., AS SECOND LOW BIDDER, FEDERAL LITHOGRAPH COMPANY AS THIRD LOW, AND TO GUTHRIE LITHOGRAPH, INC., AS FOURTH LOWEST BIDDER. PURCHASE ORDERS NOS. 52165 TO 52168 COVERING REQUIREMENTS FOR MARCH THROUGH JUNE 1967 HAVE BEEN ISSUED TO CRAFTSMAN, AND IT IS STATED THAT ORDERS WILL BE PLACED WITH THE OTHER SUCCESSFUL BIDDERS ONLY IN THE EVENT CRAFTSMAN IS UNABLE TO PERFORM AND THEN IN THE DESCENDING ORDER OF PRECEDENCE.

THE SPECIFICATIONS WHICH APPLY TO THE CONTRACTS CONTAIN THE FOLLOWING PROVISION RESPECTING THE ACCEPTANCE OF OFFERINGS:

EACH BIDDER MUST INDICATE IN THE SPACE PROVIDED THEREFOR IN THE "SCHEDULE OF PRICES" THE TOTAL NUMBER OF PRINTED PAGES (INCLUDING BLANKS) HE WILL GUARANTEE TO PRODUCE DURING ANY ONE PERIOD OF 5 WORKING DAYS FOR DELIVERY IN ACCORDANCE WITH THE SCHEDULE LIMITATION ESTABLISHED HEREIN.

ON PAGE 15 OF THE SPECIFICATIONS BIDDERS WERE ALSO REQUIRED TO SUBMIT A QUOTATION FOR EACH ITEM LISTED AND WERE WARNED THAT "FAILURE TO QUOTE ON ALL ITEMS OR ANY OTHER OMISSION, OBLITERATION, OR ALTERATION TO THESE SPECIFICATIONS OR THE ORDER AND MANNER OF SUBMITTING PRICES HEREIN WILL BE REASON FOR REJECTION OF BID.' FOLLOWING THE SCHEDULE OF PRICES, IT WAS PROVIDED ON PAGE 18 OF THE INVITATION:

GUARANTEE: THE LOW BIDDER GUARANTEES TO ACCEPT ONE OR MORE ORDERS TOTALING-----PRINTED PAGES (INCLUDING BLANK PAGES) DURING ANY PERIOD OF 5 CONSECUTIVE WORKING DAYS FOR PRODUCTION AND DELIVERY WITHIN THE SCHEDULE LIMITATIONS ESTABLISHED HEREIN. THE TOTAL NUMBER OF PRINTED PAGES PER ORDER TO BE COMPUTED BY MULTIPLYING THE NUMBER OF PAGES PER PAMPHLET BY THE QUANTITY ORDERED. (BIDDERS TO SUPPLY FIGURE IN ABOVE BLANK.) NO BID WILL BE ACCEPTED FOR PRODUCTION OF LESS THAN 500,000 PAGES FOR ANY ONE PERIOD OF 5 WORKING DAYS. IT IS WITH REFERENCE TO THIS GUARANTEE CLAUSE AND TO THE REQUIREMENT ON PAGE 15 THAT FEDERAL'S PROTEST AGAINST AWARD OF CONTRACT TO CRAFTSMAN IS BASED. FEDERAL CONTENDS THAT CRAFTSMAN AT THE TIME OF BID OPENING HAD FAILED, ALBEIT INADVERTENTLY, TO EXECUTE THE GUARANTEE CLAUSE BY SUPPLYING AN ACCEPTABLE FIGURE IN THE BLANK PROVIDED. FEDERAL THEREFORE URGES THAT THIS FAILURE CONSTITUTED A MATERIAL OMISSION WHICH SHOULD HAVE REQUIRED REJECTION OF THE BID. FEDERAL FURTHER OBSERVES THAT CRAFTSMAN WAS CONTACTED BY THE GOVERNMENT PRINTING OFFICE (GPO) WITH RESPECT TO ITS OMISSION AFTER BID OPENING AND CRAFTSMAN ADVISED: "PLEASE EXCEPT (ACCEPT) THE MINIMUM OF 500,000 PAGES AS OUR GUARANTEE.' FEDERAL CONTRASTS THIS PROCEDURE WITH THE SITUATION OCCURRING IN A PRIOR PROCUREMENT WITH GPO WHEREIN FEDERAL WAS NOT PERMITTED TO CORRECT ITS ERRONEOUS GUARANTEE FIGURE OF 200,000 INSERTED IN A SIMILAR GUARANTEE CLAUSE.

IT IS REPORTED THAT THE CONTRACTING OFFICER DISTINGUISHED THE INSTANT SITUATION FROM THAT WHICH INVOLVED FEDERAL ON THE BASIS THAT FEDERAL INSERTED 200,000 (PAGES) IN THE GUARANTEE CLAUSE, WHICH SPECIFICALLY PROVIDED THAT "NO BID WILL BE ACCEPTED FOR PRODUCTION OF LESS THAN 500,000 PAGES FOR ANY ONE PERIOD OF 5 WORKING DAYS.' FEDERAL'S BID, THEREFORE, WAS ADMINISTRATIVELY REJECTED AS NONRESPONSIVE SINCE IT DID NOT MEET THE SPECIFIED PAGE GUARANTEE REQUIRED (500,000 PAGES). IT IS FURTHER STATED THAT UNLESS FEDERAL'S PROTEST IS ALLOWED ORDERS WILL CONTINUE TO BE PLACED WITH CRAFTSMAN AND IT WILL BE REQUIRED TO FURNISH ADDITIONAL REQUIREMENTS UNTIL ITS GUARANTEED PRODUCTION IS REACHED AND THEREAFTER EXCEPT IN THOSE INSTANCES WHERE IT IS UNABLE TO MEET THE SHIPPING DATE. ORDERS WILL BE PLACED WITH THE OTHER BIDDERS ONLY IN THE EVENT CRAFTSMAN IS UNABLE TO PERFORM AND THEN IN THE DESCENDING ORDER OF PRECEDENCE AS STATED.

BECAUSE OUR CONSIDERATION OF THE PROTEST INVOLVED ALSO THE INTERESTS OF CRAFTSMAN, WE INFORMALLY CONTACTED MR. ARNOLD R. ALTSHULER, PRESIDENT OF CRAFTSMAN, AND EXTENDED HIM AN OPPORTUNITY TO REVIEW YOUR REPORT AND TO FURNISH COMMENTS ON THE MERITS OF THE PROTEST. IN THIS CONNECTION, WE HAVE RECEIVED A LETTER DATED MAY 26, 1967, ON BEHALF OF CRAFTSMAN, FROM THE LAW OFFICES OF LANDIS, COHEN AND SINGMAN, WASHINGTON, D.C., CONCERNING THE FAILURE OF CRAFTSMAN TO INSERT THE FIGURE 500,000 IN THE GUARANTEE CLAUSE OF ITS BID. IT IS CONTENDED THAT THE GUARANTEE CLAUSE WAS DIRECTED TO THE RESPONSIBILITY OF THE BIDDER AND THAT THE OMISSION DID NOT AFFECT THE RESPONSIVENESS OF THE BID. IT IS ARGUED BY THE ATTORNEYS FOR CRAFTSMAN THAT THE PURPOSE OF THE GUARANTEE WAS TO INSURE THAT THE BIDDER HAD A BONA FIDE INTEREST IN PERFORMING ALL, OR MOST, OF THE WORK WHICH WILL BE TENDERED TO IT IF THE LOW BIDDER, AND THAT THE BIDDER WAS NOT BIDDING ON THE CONTRACT SOLELY FOR THE OPPORTUNITY OF PERFORMING ONLY THOSE ORDERS TENDERED TO IT WHICH OFFERED THE POSSIBILITY OF SUBSTANTIAL PROFIT. IN SUPPORT OF THIS ARGUMENT THAT THE GUARANTEE CLAUSE AFFECTS RESPONSIBILITY AND NOT RESPONSIVENESS, OUR DECISIONS IN 41 COMP. GEN. 106 AND ID. 555 ARE CITED FOR THE PROPOSITION THAT A BIDDER'S FAILURE TO GIVE THE REQUIRED INFORMATION AS TO THE PERCENTAGE OF THE CONTRACT ITS ORGANIZATION WILL PERFORM WAS NOT AN OMISSION AFFECTING THE RESPONSIVENESS OF THE BID, BUT WAS AN OMISSION GOING TO THE RESPONSIBILITY OF THE BIDDER. HOWEVER, THE CHIEF PURPOSE OF THE PERFORMANCE OF THE WORK INFORMATION REQUIREMENT CONSIDERED IN THOSE DECISIONS WAS TO LIMIT AWARD TO BONA FIDE CONSTRUCTION CONTRACTORS AND TO PRECLUDE AWARD TO THOSE FIRMS WHICH WERE INTERESTED ONLY IN PEDDLING THE CONTRACT TO NONBIDDING FIRMS. HENCE, SUCH REQUIREMENT WAS REGARDED AS ONE FOR THE BENEFIT OF THE GOVERNMENT AND WAS SOLELY FOR THE PURPOSE OF DETERMINING, PRIOR TO AWARD, THAT THE BIDDER HAD THE GENERAL ABILITY AND CAPACITY TO PERFORM THE CONTRACT MAINLY WITH ITS OWN FORCES UNDER ITS SUPERVISION AND CONTROL. CF. 39 COMP. GEN. 247; 45 ID. 4. HOWEVER, THE GUARANTEE PROVISION HERE WAS NOT INCLUDED IN THE INVITATION FOR THE PURPOSE OF DETERMINING BIDDERS' RESPONSIBILITY. RATHER, IT CONSTITUTED A SPECIFICATION REQUIREMENT WHICH DIRECTLY AND PERTINENTLY AFFECTED NOT ONLY THE QUANTITY OF THE WORK TO BE DELIVERED TO THE GOVERNMENT, BUT POSSIBLY ALSO THE PRICE. UNDER WELL- ESTABLISHED PRINCIPLES, A BID WHICH DEVIATES FROM A MATERIAL REQUIREMENT RELATING TO A BIDDER'S AGREEMENT TO MEET A GUARANTEE TO ACCEPT FROM THE GOVERNMENT ORDERS FOR PRODUCTION OF AT LEAST 500,000 COPIES IS REQUIRED TO BE REJECTED AS NONRESPONSIVE TO THE ADVERTISED SPECIFICATIONS. IN 45 COMP. GEN. 611, WE HELD THAT A BID OFFERING LESS THAN A REQUIRED MONTHLY SUPPLY POTENTIAL OF THE GOVERNMENT PROPERLY WAS REJECTED BY THE CONTRACTING OFFICER AS A MATERIAL SPECIFICATION DEVIATION.

WHILE THE OMISSION OF THE REQUIRED FIGURE PROBABLY WAS THE RESULT OF AN INADVERTENT ERROR BY CRAFTSMAN, A NONRESPONSIVE BID DOES NOT CONSTITUTE AN OFFER WHICH MAY PROPERLY BE ACCEPTED, AND TO PERMIT A BIDDER TO MAKE ITS BID RESPONSIVE BY CHANGING, ADDING TO, OR DELETING A MATERIAL PART OF THE BID ON THE BASIS OF ALLEGED ERROR AFTER OPENING WOULD BE TANTAMOUNT TO PERMITTING A BIDDER TO SUBMIT A NEW BID. AN ALLEGATION OF ERROR IS PROPER FOR CONSIDERATION ONLY IN CASES WHERE A BID IS RESPONSIVE TO THE INVITATION AND IS OTHERWISE PROPER FOR ACCEPTANCE. 38 COMP. GEN. 819; 45 ID. 800.

ACCORDINGLY, THE CONTRACT AWARDED TO CRAFTSMAN SHOULD BE CANCELED AND NO FURTHER PURCHASE ORDERS SHOULD BE ISSUED TO IT FOR PRINTING WORK BEYOND JUNE 30, 1967.