B-164763, OCT. 17, 1968

B-164763, OCT. 17, 1968

TO AMERICAN AIR FILTER COMPANY, INCORPORATED:

WE REFER TO YOUR LETTER OF AUGUST 22, 1968, AND SUBSEQUENT CORRESPONDENCE, REQUESTING RECONSIDERATION OF OUR DECISION, B-164763 OF AUGUST 13, 1968, WHICH HELD THAT YOUR FIRM'S BID UNDER ADVERTISED SOLICITATION NO. DAAK01-68-B-7510 WAS CONDITIONED UPON THE RECEIPT OF PROGRESS PAYMENTS AND, BECAUSE SUCH PAYMENTS WERE NOT AVAILABLE TO LARGE BUSINESS CONCERNS UNDER THE TERMS OF THE SOLICITATION, IT WAS PROPERLY REJECTED AS NONRESPONSIVE.

THE SUBJECT SOLICITATION INCORPORATED STANDARD FORM 33, OF JULY 1966, ON WHICH AMERICAN AIR FILTER COMPANY, INCORPORATED, (AMERICAN) MARKED THE BOX INDICATING THAT IT WAS NOT A SMALL BUSINESS.

PARAGRAPH 21 OF STANDARD FORM 33A, CONTINUED, WARNED LARGE BUSINESS FIRMS THAT:

"WHEN INVITATIONS FOR BIDS PROVIDE FOR PROGRESS PAYMENTS FOR SMALL BUSINESS CONCERNS ONLY, PROGRESS PAYMENT PROVISIONS SHALL NOT BE MADE FOR CONTRACTORS WHO ARE NOT SMALL BUSINESS CONCERNS, AND BIDS OF THOSE WHO ARE NOT SMALL BUSINESS CONCERNS, IF CONDITIONED UPON PROVISION FOR PROGRESS PAYMENTS SHALL BE REJECTED AS NON-RESPONSIVE.'

ARTICLE 33, PAGE 63 OF THE SOLICITATION, PROVIDED FOR PROGRESS PAYMENTS AS FOLLOWS:

"ARTICLE 33 AVAILABILITY OF PROGRESS PAYMENTS

"THE PROGRESS PAYMENTS CLAUSE WILL BE AVAILABLE TO SMALL BUSINESS CONCERNS ONLY, AND WILL NOT BE INCLUDED FOR CONTRACTORS WHO ARE NOT SMALL BUSINESS CONCERNS.

"PROGRESS PAYMENTS (MAY 1959)

"THE NEED FOR PROGRESS PAYMENTS CONFORMING TO REGULATIONS (APPENDIX E, ARMED SERVICES PROCUREMENT REGULATION) WILL NOT BE CONSIDERED AS A HANDICAP OR ADVERSE FACTOR IN THE AWARD OF CONTRACTS. BIDDERS DESIRING PROGRESS PAYMENTS IN ACCORDANCE WITH THE PROGRESS PAYMENT CLAUSE ATTACHED HERETO, SHALL INCLUDE A WRITTEN REQUEST THEREFOR IN THEIR BIDS AND BIDS INCLUDING REQUESTS FOR PROGRESS PAYMENTS WILL BE EVALUATED ON AN EQUAL BASIS WITH BIDS NOT INCLUDING A REQUEST FOR PROGRESS PAYMENTS. IF A BID DOES NOT CONTAIN A REQUEST FOR PROGRESS PAYMENT PROVISION, THE PROGRESS PAYMENT CLAUSE WILL NOT BE INCLUDED IN THE CONTRACT AS AWARDED.

"BIDDER/OFFEROR ( ( DOES ( ( DOES NOT DESIRE PROGRESS PAYMENTS.' AMERICAN PLACED AN "X" IN THE BOX TO THE LEFT, THEREBY INDICATING A DESIRE TO OBTAIN PROGRESS PAYMENTS. ON THIS BASIS THE CONTRACTING OFFICER IN ACCORDANCE WITH PARAGRAPH 21 REJECTED AMERICAN'S BID AS NONRESPONSIVE. OUR DECISION OF AUGUST 13, 1968, SUSTAINED THIS DETERMINATION.

YOU CONTEND THAT THE PROVISIONS OF THE SOLICITATION CONCERNING PROGRESS PAYMENTS ARE MISLEADING, ARE IMPRECISELY WORDED AND ARE READILY SUSCEPTIBLE OF INTERPRETATIONS CONTRARY TO THE GOVERNMENT-S. FURTHER, WITH RESPECT TO ARTICLE 33, WHICH PROVIDES SPACES FOR OFFERORS TO CHECK WHETHER PROGRESS PAYMENTS ARE DESIRED, YOU ARGUE THAT A DILEMMA EXISTS, IN THAT ANY REPLY BY A LARGE BUSINESS ORGANIZATION, AFFIRMATIVE, NEGATIVE OR SILENT, MIGHT BE REGARDED AS RENDERING THE BID NONRESPONSIVE.

YOU ALSO CONTEND THAT IN VIEW OF AMERICAN'S ADMITTED LARGE BUSINESS STATUS, THE CONTRACTING OFFICER SHOULD HAVE CONSIDERED AMERICAN'S REQUEST FOR PROGRESS PAYMENTS AS AN APPARENT MISTAKE, CORRECTABLE UNDER THE REGULATIONS APPLICABLE TO MISTAKES IN BIDS. FINALLY, YOU DISCUSS THE IMPACT OF THE WORD "DESIRE" IN ARTICLE 33, SUGGESTING THAT THE WORD EXPRESSES A MERE WISH OR HOPE, NOT AN INTENT TO CONDITION ONE'S OFFER.

PART OF YOUR DISSATISFACTION WITH ARTICLE 33'S LANGUAGE CONCERNS THE SECOND SENTENCE, WHICH INSTRUCTS OFFERORS DESIRING PROGRESS PAYMENTS TO "INCLUDE A WRITTEN REQUEST THEREFOR IN THEIR IDS". YOU SUGGEST THAT IN VIEW OF THE BOXES PROVIDED IMMEDIATELY BELOW FOR OFFERORS TO INDICATE THEIR PREFERENCES IN THIS REGARD, THE LANGUAGE SHOULD BE MODIFIED TO DIRECT OFFERORS TO "CHECK THE APPROPRIATE BOX BELOW" , OR LANGUAGE TO THAT EFFECT. YOU CONTEND THAT SUCH A MODIFICATION IN THE LANGUAGE WOULD CLARIFY THE GOVERNMENT'S INTENTION, BECAUSE THE PRESENT LANGUAGE IS OPEN TO THE INTERPRETATION THAT A FORMAL WRITTEN REQUEST IS REQUIRED IN ADDITION TO THE MARKING OF THE APPROPRIATE BOX.

YOU ALSO SUGGEST THAT THE LANGUAGE OF THE LAST CLAUSE IN ARTICLE 33, WHERE OFFERORS MARK WHETHER THEY DESIRE PROGRESS PAYMENTS, SHOULD BE CHANGED BY DELETING THE WORDS "DOES - DOES NOT DESIRE PROGRESS PAYMENTS" AND SUBSTITUTING SUCH LANGUAGE AS "DOES - DOES NOT REQUIRE PROGRESS PAYMENTS" OR "DOES - DOES NOT CONDITION ITS OFFER UPON THE RECEIPT OF PROGRESS PAYMENTS". SUCH A MODIFICATION WOULD, IN YOUR OPINION, BETTER ADVISE OFFERORS OF THE LEGAL EFFECT OF THEIR ACTIONS.

WE AGREE THAT THE LANGUAGE MODIFICATIONS YOU SUGGEST MIGHT EXPRESS THE INTENT OF ARTICLE 33 BETTER THAN THE PRESENT LANGUAGE YOU CRITICIZE. HOWEVER, WITH RESPECT TO THE RESPONSIVENESS OF AMERICAN'S BID, WE BELIEVE THAT THE ISSUE CONCERNS THE LEGAL CONSEQUENCES OF THE LANGUAGE USED, NOT WHETHER SAID LANGUAGE ADMITS OF IMPROVEMENT. WE BELIEVE THAT THE PRESENT LANGUAGE OF ARTICLE 33, WHEN READ IN CONJUNCTION WITH PARAGRAPH 21, AND INTERPRETED WITHIN THE CONTEXT OF THE SOLICITATION FORM, INDICATES AN INTENT TO REQUEST PROGRESS PAYMENTS WHEN THE APPROPRIATE BOX IS CHECKED.

ONE OF YOUR OWN ARGUMENTS SUPPORTS THIS CONCLUSION. YOU CONTEND THAT YOUR BID WAS MARKED TO INDICATE PROGRESS PAYMENTS WERE DESIRED ONLY BECAUSE IT WAS NOT REALIZED THAT PROGRESS PAYMENTS WERE RESTRICTED TO SMALL BUSINESS FIRMS. ACCORDING TO YOUR STATEMENT THIS MISTAKE WAS BROUGHT ABOUT IN PART BY THE CONFUSING SIMILARITY BETWEEN THE SUBJECT SOLICITATION AND ANOTHER ISSUED THE SAME DAY BY THE SAME COMMAND TO PROCURE SIMILAR EQUIPMENT WHICH PERMITTED PROGRESS PAYMENTS FOR ALL BIDDERS. THIS SIMILARITY ALLEGEDLY CONFUSED THE REPRESENTATIVES OF AMERICAN RESPONSIBLE FOR THE PREPARATION OF ITS BID WHO CHECKED THE BOX INDICATING PROGRESS PAYMENTS WERE DESIRED IN THE ERRONEOUS BELIEF THAT SUCH PAYMENTS WERE AVAILABLE TO ALL BIDDERS.

THIS ARGUMENTATION DOES NOT SUGGEST THAT HAD AMERICAN'S EMPLOYEES BEEN AWARE OF THE CORRECT STATE OF AFFAIRS, THEY WOULD HAVE BEEN UNABLE TO DECIPHER THE RELATIONSHIP BETWEEN PARAGRAPH 21 AND ARTICLE 33, AND CONCLUDE THAT ANY LARGE BUSINESS OFFEROR WHO CHECKED THE BOX INDICATING PROGRESS PAYMENTS WERE DESIRED WOULD THEREBY RENDER ITS BID NONRESPONSIVE.

ON THE OTHER HAND, THE ARGUMENT BASED UPON AMERICAN'S ALLEGED ERROR IS WHOLLY CONSISTENT WITH OUR VIEW THAT ANY OFFEROR WHO MARKED ARTICLE 33 TO SHOW PROGRESS PAYMENTS WERE DESIRED INTENDED TO CONDITION ITS BID UPON THE RECEIPT OF SAID PAYMENTS. WE HAVE EXAMINED OUR FILES FOR THE PAST FEW YEARS, AND WHILE WE FIND NUMEROUS CASES UTILIZING PROVISIONS SIMILAR TO ARTICLE 33, WE FAIL TO FIND ANY CASES WHERE OFFERORS ALLEGE THAT THEY WERE IN ANY MANNER MISLED BY THE PROVISIONS. WE THEREFORE CONCLUDE THAT AMERICAN'S BID WAS PROPERLY REJECTED UNDER ARTICLE 33 AND PARAGRAPH 21 READ TOGETHER.

AS TO YOUR CONTENTION THAT ARTICLE 33 POSES A DILEMMA TO OFFERORS, IN THAT ANY POSSIBLE RESPONSE TO THE PROGRESS PAYMENTS REQUEST BY A LARGE FIRM MAY BE CONSIDERED TO RENDER ITS BID NONRESPONSIVE, WE BELIEVE THE ARGUMENT IS WITHOUT MERIT. PARAGRAPH 21 SPECIFICALLY PROVIDES THAT A BID FROM A LARGE BUSINESS CONDITIONED UPON RECEIPT OF PROGRESS PAYMENTS IS NONRESPONSIVE WHEN THE SOLICITATION LIMITS PROGRESS PAYMENTS TO SMALL BUSINESSES. WE FIND NO BASIS FOR CONCLUDING THAT A BID FROM A LARGE BUSINESS COULD BE REGARDED AS NONRESPONSIVE FOR CHECKING THE BOX INDICATING NO DESIRE FOR PROGRESS PAYMENTS OR LEAVING BOTH BOXES BLANK. NOR DO WE FIND ANY HISTORICAL PRECEDENT FOR SUCH CONCLUSIONS.

WITH RESPECT TO YOUR ALLEGATION THAT AMERICAN'S BID CONTAINED AN APPARENT ERROR, YOUR CONTENTION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF SUCH FACT IS WELL TAKEN, FOR AMERICAN'S BID INDICATED BOTH THAT IT WAS A LARGE BUSINESS AND THAT IT REQUESTED PROGRESS PAYMENTS, DESPITE CLEAR LANGUAGE THAT SUCH CIRCUMSTANCES RENDERED A BID NONRESPONSIVE. CONCLUDE OTHERWISE IT IS NECESSARY TO ASSUME THAT AMERICAN DELIBERATELY SUBMITTED A NONRESPONSIVE OFFER KNOWING THAT IT WOULD BE REJECTED, WHICH ASSUMPTION IS PATENTLY UNREASONABLE.

HOWEVER, THE KNOWLEDGE OF THE EXISTENCE OF A PROBABLE ERROR IN BID IS, ALONE, NOT AN ADEQUATE BASIS TO PERMIT THE CORRECTION UNDER CIRCUMSTANCES WHERE THE ERROR RENDERS THE BID NONRESPONSIVE. HERE, THE CONTRACTING OFFICER HAD NO WAY OF KNOWING FROM THE BID DOCUMENTS WHETHER AMERICAN'S OFFICERS WOULD HAVE ACCEPTED A CONTRACT WITHOUT PROGRESS PAYMENTS. AMERICAN, WHEN INFORMED OF THE CONTRADICTION IN ITS OFFER, WHICH INDICATED THE EXISTENCE OF A PROBABLE MISTAKE, MIGHT HAVE CHOSEN TO REFUSE A CONTRACT WITHOUT PROGRESS PAYMENTS. THIS OPPORTUNITY TO ELECT WHETHER TO ACCEPT A CONTRACT AFTER BIDS HAVE BEEN OPENED AND COMPETITORS PRICES EXPOSED IS AGAINST THE PRINCIPLES UNDERLYING THE COMPETITIVE BIDDING SYSTEM. FOR A FURTHER DISCUSSION OF THE GOVERNMENT'S REFUSAL TO PERMIT OFFERORS AN OPPORTUNITY TO OBTAIN "TWO BITES AT THE APPLE" SEE 38 COMP. GEN. 532, 536. FOR THIS REASON, BIDS CONTAINING ERRORS WHICH RENDER THEM NONRESPONSIVE MAY NOT BE CORRECTED. ACCORDINGLY, THE ERROR IN AMERICAN'S BID DID NOT COME WITHIN THE SCOPE OF THOSE RULES GOVERNING THE CORRECTION OF MISTAKES IN BIDS SET OUT IN ASPR 2-406. THE CONTRACTING OFFICER THEREFORE ACTED PROPERLY WHEN HE REJECTED YOUR BID AS NONRESPONSIVE.

FINALLY, YOU REITERATE YOUR CONTENTION THAT THE WORK "DESIRE" USED IN THE REQUEST PORTION OF ARTICLE 33, CREATES THE IMPRESSION THAT OFFERORS WHO RESPOND AFFIRMATIVELY ARE EXPRESSING A MERE WISH OR HOPE, RATHER THAN A CONDITION OF THEIR BID. THIS ARGUMENT IS PREMISED ON SUCH DEFINITIONS OF THE WORD "DESIRE" AS "TO LONG OR HOPE FOR" AND "TO EXPRESS A WISH FOR". SEE WEBSTER'S SEVENTH NEW COLLEGIATE DICTIONARY, G. AND C. MERRIAM COMPANY, 1965 EDITION. IF, AS YOU SUGGEST, THE PRESENCE OF THE WORD "DESIRE" IN ARTICLE 33 MEANS THAT AN OFFEROR'S AFFIRMATIVE RESPONSE DOES NOT CONDITION ITS BID UPON THE RECEIPT OF PROGRESS PAYMENTS, THEN THAT PORTION OF THE ARTICLE HAS NO DISCERNIBLE PURPOSE. THE INTERPRETATION YOU URGE THEREFORE REQUIRES THE CONCLUSION THAT THE GOVERNMENT DRAFTS AND INSERTS PURPOSELESS QUERIES CONCERNING THE BIDDER'S RANDOM DESIRES INTO THE BODY OF ITS PROCUREMENT FORMS. WE FIND THIS ASSUMPTION UNTENABLE. FOR THIS REASON, AND FOR THOSE SET OUT IN OUR ORIGINAL DECISION, WE CONCLUDE THAT THE WORD "DESIRE" MUST BE READ WITHIN THE CONTEXT PRESENTED, AS PART OF A MEANINGFUL PROVISION OF A GOVERNMENT PROCUREMENT FORM TO CONDITION A BID APPROPRIATELY MARKED.

IN VIEW OF THE ABOVE, WE REAFFIRM OUR DECISION, B-164763 OF AUGUST 13, 1968.