B-155770, MAR. 25, 1965

B-155770, MAR. 25, 1965

TO MR. E. K. GUBIN:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 14, 1964, AND SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF WILKINSON MANUFACTURING COMPANY OF FORT CALHOUN, NEBRASKA, AGAINST AWARD OF A CONTRACT TO GRAND MACHINING COMPANY OF DETROIT, MICHIGAN, UNDER INVITATION FOR BIDS NO. AMC/A/-11-173- 65-25.

THE IFB, WHICH WAS ISSUED ON OCTOBER 8, 1964, BY THE UNITED STATES ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS, SOLICITED BIDS, ON A TOTAL SMALL BUSINESS SET-ASIDE BASIS, TO FURNISH 483,000 M149 FIN ASSEMBLIES TO THE MILAN ARMY AMMUNITION PLANT, MILAN, TENNESSEE, TO BE DELIVERED IN STATED QUANTITIES MONTHLY DURING THE 11 MONTH PERIOD MAY 1965 THROUGH MARCH 1966. DELIVERY REQUIREMENTS WERE BASED ON THE ASSUMPTION THAT AWARD WOULD BE MADE BY NOVEMBER 30, 1964.

THE IFB PROVISIONS REGARDING USE OF GOVERNMENT-OWNED PROPERTY IN A BIDDER'S POSSESSION READ, IN PERTINENT PART, AS FOLLOWS:

"1. PROPERTY IN BIDDER'S POSSESSION.

IF IN PERFORMING THE WORK BID UPON, THE BIDDER PLANS TO USE ANY ITEMS OF GOVERNMENT PROPERTY (INCLUDING ANY ITEMS OF SPECIAL TOOLING COVERED BY THE SPECIAL TOOLING CLAUSE IN ASPR 13-504) IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT WITH THE GOVERNMENT INDEPENDENT OF THIS IFB, THE BIDDER SHALL SO INDICATE BY CHECKING THE BOX BELOW AND BY IDENTIFYING SUCH FACILITIES CONTRACT AND/OR OTHER AGREEMENT AUTHORIZING SUCH USE. (*) IN ORDER TO BE RESPONSIVE, THE BIDDER MUST, PRIOR TO THE TIME OF BID OPENING, BE IN FACT AUTHORIZED IN WRITING TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON. EVIDENCE OF SUCH AUTHORIZATION SHALL BE SUBMITTED UPON REQUEST FROM THE CONTRACTING OFFICER UNDER THIS IFB.

(*) WARNING: POSSESSION OF GOVERNMENT-OWNED PROPERTY UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT DOES NOT NECESSARILY MEAN THE BIDDER IS ACTUALLY AUTHORIZED TO USE SUCH GOVERNMENT-OWNED PROPERTY IN THE PERFORMANCE OF ANY CONTRACT AS A RESULT OF THIS IFB.'

IN ADDITION, THE IFB REQUIRED BIDDERS TO IDENTIFY EACH SUCH ITEM OF GOVERNMENT PROPERTY, TO LIST ITS ACQUISITION COST, AND TO INCLUDE AN EVALUATION FACTOR BASED ON THE FOLLOWING FORMULA:

"4. EVALUATION

A. FOR PURPOSES OF EQUALIZATION OF COMPETITIVE ADVANTAGE, THE USE OF SUCH GOVERNMENT PROPERTY, INCLUDING SPECIAL TOOLING, SHALL BE EVALUATED BY ADDING TO THE PROPOSED PRICE OF THE ITEMS BID UPON, THE FOLLOWING RATES FOR EACH MONTH OF THE PROPOSED PRODUCTION PERIOD. BIDDER SHALL NOT INCLUDE IN THEIR BID PRICES ANY PROVISION FOR PAYMENT OF A USE CHARGE FOR SUCH PROPERTY. NOT WITHSTANDING ANY OTHER CONTRACTUAL ARRANGEMENTS, THE PROVISIONS OF THIS PARAGRAPH WILL APPLY; THEREFORE, BIDDERS ARE ADVISED TO ARRANGE WITH THE CONTRACTING OFFICER HAVING JURISDICTION OVER THE PROPERTY FOR RENT-FREE USE OF SUCH PROPERTY OR FOR A WAIVER OR RENTAL PAYMENT DUE UNDER ANY OTHER ARRANGEMENT, PRIOR TO SUBMISSION OF A BID.

EQUIPMENT--- 1 PERCENT PER MONTH OF THE ACQUISITION COST.

SPECIAL TOOLING--- 1 2/3 PERCENT PER MONTH OF THE ACQUISITION COST.

REAL PROPERTY--- 5 PERCENT PER YEAR OF LAND ACQUISITION COST AND 8 PERCENT PER YEAR OF ACQUISITION COSTS OF IMPROVEMENTS THEREON COMPUTED FOR THE PROPOSED PRODUCTION PERIOD.'

ON NOVEMBER 9, BIDS WERE OPENED AS SCHEDULED. WILKINSON'S BID, WHICH WAS BASED ON USE OF CERTAIN LATHE CHUCKING MACHINES IN WILKINSON'S POSSESSION UNDER FACILITIES CONTRACT NO. DA-28-ORD 1183/A), MODIFICATION 16 THROUGH 20, DATED NOVEMBER 12, 1963, WITH THE ST. LOUIS PROCUREMENT DISTRICT (SLPD), WAS LOW. ACCORDINGLY, SLPD WAS REQUESTED TO CONDUCT A PREAWARD SURVEY ON WILKINSON AND TO VERIFY THAT WILKINSON HAD EXISTING WRITTEN AUTHORITY TO USE THE GOVERNMENT PROPERTY IN QUESTION IN PERFORMANCE OF THE CONTRACT TO BE AWARDED UNDER THE IFB. PURSUANT TO A REPORT FROM SLPD THAT WILKINSON HAD NEITHER REQUESTED NOR RECEIVED AUTHORIZATION TO USE GOVERNMENT-OWNED EQUIPMENT ON THE IFB, THE PREAWARD SURVEY REQUEST WAS CANCELLED AND THE CONTRACTING AGENCY MADE A DETERMINATION THAT WILKINSON'S BID WAS NONRESPONSIVE. AWARD WAS THEREUPON MADE TO THE SECOND LOW RESPONSIVE, RESPONSIBLE BIDDER, GRAND MACHINING COMPANY.

IT IS YOUR POSITION THAT AT THE TIME OF BID OPENING WILKINSON DID HAVE WRITTEN AUTHORITY TO USE THE GOVERNMENT PROPERTY IN QUESTION. IN THIS RESPECT, YOU CITE THE FOLLOWING:

1. MODIFICATION NO. 15 TO FACILITIES CONTRACT NO. DA-23-072-ORD 1183.

"PARAGRAPH I. THE CONTRACTOR IS AUTHORIZED TO USE, SUBJECT TO THE CONTRACTING OFFICER'S PRIOR APPROVAL AND ON THE TERMS HEREAFTER, CERTAIN GOVERNMENT-OWNED EQUIPMENT DESCRIBED IN THE ATTACHED EXHIBIT A TO THIS MODIFICATION, FOR ANY PRODUCTION CONTRACTS ENTERED INTO WITH THE DEPARTMENT OF DEFENSE.'

2. LETTER DATED MARCH 2, 1962, FROM FACILITIES CONTRACTING OFFICER TO WILKINSON, AUTHORIZING WILKINSON TO USE THE CHUCKERS FOR ONE YEAR SUBSEQUENT TO MARCH 1, 1962, ON A RENTAL BASIS.

3. MODIFICATION NO. 16 TO FACILITIES CONTRACT NO. DA-23-072-ORD 1183, AUTHORIZING USE OF THE SAME EQUIPMENT FOR THE SAME ONE-YEAR PERIOD COMMENCING MARCH 1, 1962, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF MODIFICATION NO. 15. (NOTE: PARAGRAPH VII OF MODIFICATIONS NO. 16 INDICATES THAT IT REPLACES THE LETTER OF MARCH 2, 1962.)

4. MODIFICATION NO. 21/K) TO FACILITIES CONTRACT NO. DA-23-072-ORD 1183/A) (7179), WHICH READS, IN PART, AS FOLLOWS:

"1. WHEREAS, THE PARTIES DESIRE TO PROVIDE FOR AN ADDITIONAL YEAR OF FREE STORAGE AND MAINTENANCE AND USE OF CERTAIN EQUIPMENT.

"NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES, THE PARTIES HERETO MUTUALLY AGREE AS OLLOWS:

"PARAGRAPH I. THE CONTRACTOR SHALL STORE AND MAINTAIN AT NO COST TO THE GOVERNMENT FOR THE ONE (1) YEAR PERIOD BEGINNING 1 MARCH 1964 AND ENDING 28 FEBRUARY 1965 THE GOVERNMENT PROPERTY LISTED IN PARAGRAPH IV OF MODIFICATION NO. 16, SUPPLEMENTAL AGREEMENT TO THE CONTRACT.

"PARAGRAPH II. DURING THE ADDITIONAL ONE (1) YEAR OF FREE MAINTENANCE AND STORAGE PROVIDED IN PARAGRAPH I ABOVE THE CONTRACTOR SHALL HAVE THE RIGHT TO USE THE GOVERNMENT PROPERTY SPECIFIED IN PARAGRAPH IV OF MODIFICATION NO. 16, SUPPLEMENTAL AGREEMENT TO THE CONTRACT, IN ACCORDANCE WITH THE PROVISIONS OF SUCH PARAGRAPH IV OF MODIFICATION NO. 16, SUPPLEMENTAL AGREEMENT TO THE TRACT.'

5. ON NOVEMBER 3, 1964, A REPRESENTATIVE OF THE FACILITIES CONTRACTING OFFICER ADVISED MR. FRED G. ARKOOSH, WILKINSON'S PRESIDENT, THAT THE CONTRACTING OFFICER DESIRED TO EXTEND THE FACILITIES CONTRACT FOR THE ONE- YEAR PERIOD MARCH 1, 1965, TO MARCH 1, 1966, AND MR. ARKOOSH AGREED TO THE EXTENSION. WRITTEN AUTHORIZATION WAS EXPECTED TO BE ISSUED IN MARCH 1965.

YOU CONTEND THAT SINCE IT IS APPARENT FROM THE FOREGOING THAT WILKINSON ACTUALLY HAD AUTHORITY TO USE THE GOVERNMENT MATERIAL AT THE DATE OF ITS BID, ITS PROTEST SHOULD BE UPHELD AND THE CONTRACT UNDER THE IFB SHOULD BE AWARDED TO WILKINSON. ALSO, YOU STATE UNDER MODIFICATION NO. 15, WILKINSON NEEDED ONLY PRIOR APPROVAL, NOT PRIOR WRITTEN APPROVAL, AS WAS REQUIRED BY THE FACILITIES CONTRACT INVOLVED IN OUR DECISIONS B-154188, JUNE 26, 1964; B-154685, NOVEMBER 4, 1964; AND B-154598, NOVEMBER 16, 1964, WHICH ALSO CONSIDERED SIMILAR IFB PROVISIONS.

BY THE TERMS OF THE SUBJECT IFB, BIDDERS WERE REQUIRED TO POSSESS PRIOR TO BID OPENING A WRITTEN AUTHORIZATION TO USE THE GOVERNMENT PROPERTY LISTED IN THEIR BIDS IN THE PERFORMANCE OF ANY CONTRACT TO BE AWARDED UNDER THE IFB "IN ORDER TO BE RESPONSIVE.' WHILE THE LANGUAGE IN WILKINSON'S FACILITIES CONTRACT MODIFICATIONS, PARTICULARLY NUMBERS 16 AND 21/K), MAY BE INTERPRETED AS WRITTEN AUTHORIZATION TO USE THE GOVERNMENT PROPERTY COVERED THEREBY IN THE PERFORMANCE OF ANY GOVERNMENT CONTRACT, WILKINSON'S WRITTEN AUTHORIZATION AT THE TIME OF BID OPENING HAD AN EXPIRATION DATE OF FEBRUARY 28, 1965. SUCH AUTHORIZATION, WHICH WOULD HAVE PERMITTED ONLY THREE MONTHS' USE OF THE PROPERTY ON A CONTRACT REQUIRING DELIVERIES OVER AN 11-MONTH PERIOD COMMENCING MAY 1965 AND EXTENDING THROUGH MARCH 1966, COULD HARDLY BE DEEMED ADEQUATE FOR THE PERFORMANCE OF THE CONTRACT, AND WE UNDERSTAND THAT YOUR CLIENT CONCEDES THAT USE OF THE PROPERTY IN QUESTION WOULD HAVE BEEN REQUIRED FOR A SUBSTANTIALLY LONGER TIME. CONVERSELY, WHILE THE ALLEGED VERBAL AUTHORIZATION EXTENDING THE PERIOD OF USE OF THE GOVERNMENT PROPERTY FROM MARCH 1, 1965, TO MARCH 1, 1966, MIGHT BE CONSIDERED ADEQUATE FOR THE PURPOSES OF THE PROCUREMENT INVOLVED, IT WAS NOT REDUCED TO WRITING PRIOR TO BID OPENING AND THEREFORE DOES NOT MEET THE IFB REQUIREMENT.

UNDER THE PROVISIONS OF 10 U.S.C. 2305, THE APPLICABLE PROCUREMENT STATUTE, BIDS ARE REQUIRED TO CONFORM TO THE TERMS OF THE ADVERTISED INVITATION TO BE ELIGIBLE FOR CONSIDERATION FOR AWARD. PURSUANT THERETO,ARMED SERVICES PROCUREMENT REGULATION 2-404.2/A) REQUIRES THE REJECTION OF A BID WHICH FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION FOR BIDS. FURTHERMORE, A BIDDER MAY NOT BE PERMITTED TO ADD TO OR MODIFY ITS BID AFTER BID OPENING TO MAKE THE BID COMPLY WITH THE INVITATION REQUIREMENTS, AND IT DOES NOT MATTER WHETHER THE FAILURE TO COMPLY WAS DUE TO INADVERTENCE, MISTAKE, OR OTHERWISE. 38 COMP. GEN. 819; 42 ID. 432.

SINCE WILKINSON DID NOT SUBMIT THE DOCUMENTARY EVIDENCE REQUIRED BY THE IFB, ITS BID WAS NOT RESPONSIVE, AND THE DEVIATION MAY NOT BE REMEDIED BY ACCEPTANCE OF A SUBSEQUENTLY ISSUED WRITTEN AUTHORIZATION. THEREFORE, THE REJECTION OF THE BID WAS PROPER, AND THE PROTEST IS DENIED.