B-154594, DEC. 18, 1964

B-154594, DEC. 18, 1964

TO INTERNATIONAL FERMONT:

WE REFER TO YOUR LETTERS OF SEPTEMBER 29 AND NOVEMBER 2, 1964, REQUESTING RECONSIDERATION OF OUR DECISION OF SEPTEMBER 22, 1964, WHEREIN OUR OFFICE UPHELD THE CONTRACTING OFFICER'S REFUSAL TO CONSIDER A DISCOUNT OFFERED BY YOUR COMPANY IN THE EVALUATION OF YOUR OFFER UNDER REQUEST FOR PROPOSAL NO. 64-45018.

IT IS YOUR POSITION THAT, SINCE THE REQUEST FOR PROPOSAL INDICATED THAT EVALUATION WAS TO BE BASED UPON THE MAXIMUM QUANTITY OF ITEMS SPECIFIED, CONSIDERATION SHOULD HAVE BEEN GIVEN TO YOUR OFFER TO ALLOW A 27 PERCENT DISCOUNT ON THE PRICES QUOTED IN YOUR ORIGINAL PROPOSAL. APPARENTLY, YOU FEEL THAT IT WAS INCUMBENT UPON THE PROCURING ACTIVITY TO CONSIDER YOUR OFFER OF DISCOUNT NOTWITHSTANDING THE FACT THAT THE GOVERNMENT COULD ANTICIPATE RECEIVING ANY BENEFIT THEREFROM ONLY IN THE UNLIKELY EVENT THAT IT PURCHASED THE MAXIMUM QUANTITY OF 2,140 GENERATOR SETS, AND THEN ONLY IF THE GENERATORS WERE ORDERED WHEEL OR TRAILER MOUNTED. WITH THIS WE CANNOT AGREE. TO SUGGEST THAT CONSIDERATION SHOULD BE GIVEN TO A DISCOUNT WHEN IT APPEARS HIGHLY IMPROBABLE THAT THE GOVERNMENT WILL BE IN A POSITION TO OBTAIN ANY BENEFIT THEREFROM IS, IN OUR OPINION, CONTRARY TO SOUND BUSINESS JUDGMENT.

YOUR CONCLUSION THAT THE SOLICITATION REQUIRED EVALUATION WITHOUT REGARD TO THE GOVERNMENT'S ACTUAL REQUIREMENTS ALSO LACKS MERIT. AS STATED ON PAGES 18 AND 20 OF THE REQUEST FOR PROPOSALS THE LOW OFFER WAS TO BE DETERMINED BY MULTIPLYING THE VARIOUS QUANTITY INCREMENTS OF EACH TYPE OF GENERATOR SET BY THE UNIT PRICES FOR EACH INCREMENT AND TOTALING THE RESULT. THE REASON FOR ADDING INDIVIDUAL TOTAL PRICES WAS TO INSURE THAT EQUAL WEIGHT WOULD BE GIVEN TO ALL QUANTITY RANGES. TO CONCLUDE THAT THE STATED EVALUATION REQUIRED CONSIDERATION OF A DISCOUNT APPLICABLE ONLY UPON PROCUREMENT OF THE MAXIMUM QUANTITY IS, UNDER THE CIRCUMSTANCES, UNFOUNDED AND COUNTER TO THE GENERAL INTENT OF THE SOLICITATION.

WHILE IT WOULD HAVE BEEN ADVISABLE FOR THE CONTRACTING OFFICER TO HAVE CLARIFIED HIS POSITION REGARDING CONSIDERATION OF YOUR DISCOUNT, IT COULD NOT REASONABLY HAVE BEEN EXPECTED THAT THE GOVERNMENT WOULD ACCEPT THE PROPOSITION OFFERED. ASPR 3-506.2 (B) REQUIRES THAT THE SOLICITATION BE AMENDED AND ALL OFFERORS ADVISED OF CHANGES TO CLARIFY AMBIGUITIES OR CORRECT MISTAKES OR OMISSIONS. THE ONLY CRITICISM OF OF THE SOLICITATION IN THE PRESENT CASE IS THAT IT FAILED TO PROVIDE FOR THE SITUATION WHERE AN OFFEROR SUBMITTED A CONDITIONED DISCOUNT. UNDER THE CIRCUMSTANCES WE DO NOT VIEW THIS DEFECT AS FATAL.

TURNING TO THE QUESTION OF WHETHER THE MB TEEN GENERATOR SETS ARE PROPERLY CLASSIFIED AS ,MODIFIED COMMERCIAL" SETS, THE AIR FORCE IN A LETTER OF DECEMBER 2, 1964, HAS ADVISED US AS FOLLOWS:

"* * * THESE GENERATOR SETS IN FACT, WHILE DESIGNED AND TESTED TO A MILITARY SPECIFICATION AND TO A DESIGNATED AF MILITARY STANDARD, ARE BUILT ALMOST EXCLUSIVELY BY USING PARTS WHICH ARE CATALOGED AND COMMERCIALLY AVAILABLE. THE HERCULES AND CUMMINGS ENGINES ARE CATALOGED ITEMS AND COMMERCIALLY USED IN VARIOUS NONMILITARY APPLICATIONS. THE GENERAL ELECTRIC GENERATORS HAVE BASIC FRAME SIZES AND MODEL NUMBERS WHICH ARE COMMERCIALLY CATALOGED AND ARE ALSO USED IN NONMILITARY APPLICATIONS. THESE COMMERCIAL ITEMS HAVE BEEN SLIGHTLY MODIFIED TO MEET THE AIR FORCE SPECIFICATIONS FOR GENERATOR APPLICATION. THE CONTRACTING OFFICER CONFIRMS HIS ADVICE THAT THE GENERATOR SETS ARE DESIGNED AND BUILT TO AIR FORCE SPECIFICATIONS USING PRIMARILY COMMERCIALLY AVAILABLE COMPONENTS. THESE UNITS THUS QUALIFY UNDER THE ASPR TO BE PURCHASED USING AN INDEFINITE QUANTITY TYPE CONTRACT. * * *"

CONTRARY TO YOUR CONCLUSION, WE THINK THAT OUR DECISION, B-153145, APRIL 27, 1964, IS FULLY COMPATIBLE WITH THE CASE UNDER DISCUSSION. IN THE FORMER CASE THE PROCURING ACTIVITY WAS ATTEMPTING TO REDUCE FROM 190 DOWN TO 5 THE DIFFERENT MAKES AND MODELS OF GENERATOR SETS IN THE 15 KW TO 150 KW SIZES. THE STATED BASIS FOR NEGOTIATION WAS THAT THE ITEMS WERE OF A TECHNICAL NATURE AND THAT STANDARDIZATION AND INTERCHANGEABILITY OF PARTS WERE NECESSARY AND IN THE PUBLIC INTEREST. (SEE 10 U.S.C. 2304 (A) (13) ). EVEN THOUGH THE ITEM WAS CONSIDERED "TECHNICAL," IT COULD VALIDLY BE VIEWED AS A COMMERCIAL OR MODIFIED COMMERCIAL ITEM. IN OTHER WORDS, NEGOTIATION OF A CONTRACT FOR EQUIPMENT UNDER THE AUTHORITY OF ASPR 3- 213.3 (I) IS NOT NECESSARILY INCONSISTENT WITH THE REQUIREMENTS OF ASPR 3- 409 (C) (2). SEE B 150756, MAY 9, 1963. FURTHERMORE, WHILE ASPR 1-201.16 DOES, AS YOU STATE, PROVIDE THAT "SHALL IS IMPERATIVE," AS INDICATED IN OUR DECISION OF SEPTEMBER 22, 1964, IT IS OUR VIEW THAT THE WORD "SHOULD" IS USED IN ASPR 3-409 (C) (2) NOT AS THE PAST TENSE OF "SHALL" OR TO EXPRESS A MANDATORY OBLIGATION BUT RATHER AS A SYNONYM FOR THE WORD "OUGHT" TO EXPRESS EXPEDIENT OR EXPECTED ACTION TO BE TAKEN IN THE FUTURE. SEE THE OXFORD ENGLISH DICTIONARY (1961).