B-132310, JUN. 28, 1957

B-132310, JUN. 28, 1957

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED JUNE 26, 1957, FROM THE ASSISTANT SECRETARY OF THE AIR FORCE, FORWARDING THE FILE RELATIVE TO THE PROTEST OF CAROL ELECTRONICS CORPORATION AGAINST THE PROPOSED REJECTION OF ITS BID WHICH WAS SUBMITTED TO YOUR DEPARTMENT IN RESPONSE TO INVITATION FOR BIDS NO. 33-604-57-373.

UNDER THE PROVISIONS OF THE ABOVE INVITATION, BIDS WERE SOLICITED ON APRIL 5, 1957, TO BE OPENED ON MAY 6, 1957, FOR THE PRODUCTION AND FURNISHING OF 824 AUDIO OSCILLATORS DESCRIBED AS FOLLOWS:

"7 CAC-604344-5 AUDIO OSCILLATOR TS-382F/U IN ACCORDANCE WITH MIL-A 4291B DTD 2 MAY 1956 AND USAF DWG 50C12862, 50C12863, 54C13269.'

THE INVITATION FURTHER DIVIDED THE TOTAL NUMBER OF SUCH UNITS INTO THREE PARTS, ITEM 1 CALLING FOR BIDS ON 200 UNITS, ITEM 4 CALLING FOR BIDS ON 51 UNITS, AND ITEM 7 CALLING FOR BIDS ON THE BALANCE OF 573 UNITS.

SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, RANGING FROM $208 TO $330 PER UNIT, THE LOW BID BEING SUBMITTED BY JOWIL ELECTRONICS, INC., IN A TOTAL AMOUNT OF $180,392, THE SECOND LOW BID BEING SUBMITTED BY CAROL ELECTRONICS CORPORATION IN THE AMOUNT OF $195,443, AND THE THIRD LOW BID BEING SUBMITTED BY TAFFET RADIO AND TELEVISION COMPANY IN THE AMOUNT OF $213,850.45.

WITH RESPECT TO THE LOW BID, THE LETTER FROM THE ASSISTANT SECRETARY INDICATES THAT YOUR DEPARTMENT HAS CONDUCTED A SURVEY AND DETERMINED THAT THE BIDDER IS NOT FINANCIALLY CAPABLE OF PERFORMING THE CONTRACT, AND THE FILE INDICATES THAT THE BIDDER HAD FAILED TO FILE A REQUEST WITH THE SMALL BUSINESS ADMINISTRATION FOR A CERTIFICATE OF COMPETENCY. ACCORDINGLY, THE LOW BID MAY NOT BE CONSIDERED FOR AWARD.

WITH RESPECT TO THE SECOND LOW BID, WHICH WAS SUBMITTED BY CAROL ELECTRONICS CORPORATION, CLAUSE 1 OF THE SPECIAL PROVISIONS ACCOMPANYING THE INVITATION PROVIDED AS FOLLOWS:

"A. 3 EACH FIEST ARTICLE/S) OF ITEM/S) 1 SHALL BE TESTED TO DETERMINE COMPLIANCE WITH THE APPLICABLE SPECIFICATIONS. ALL TESTING OF THE FIRST ARTICLE/S) SHALL BE PERFORMED AT THE CONTRACTOR'S PLANT OR AT AN APPROVED COMMERCIAL TESTING LABORATORY. AT LEAST THIRTY (30) DAYS PRIOR TO START OF TESTING THE CONTRACTOR SHALL FORWARD A COPY OF THE SCHEDULE OF TESTS TO BE PERFORMED TO:

"TRANSPORTATION OFFICE

WRIGHT-PATTERSON AIR FORCE BASE, OHIO

ATTN: WADC, WCLNQ-2

DEPT. 91"

HOWEVER, CAROL HAS REFERENCED ITS BID PRICE OF $230 PER UNIT ON ITEMS 1, 4 AND 7 TO A TYPEWRITTEN NOTATION APPEARING ON PAGE 2 OF THE BID WHICH READS AS FOLLOWS:

"*NOTE: PRICE QUOTED FOR ITEMS 1, 4 AND 7 BASED UPON ITEM 1 FIRST

ARTICLE CLAUSE IN SPECIAL PROVISIONS BEING MODIFIED TO

INCLUDE THREE (3) EACH OF THE TRANSIT CASE ONLY IN

LIEU OF THE COMPLETE END ITEM EQUIPMENT.'

IN VIEW THEREOF, CAROL WAS NOTIFIED ORALLY ON JUNE 7 THAT SUCH NOTATION WAS CONSIDERED AS QUALIFYING ITS BID AND FOR THAT REASON THE BID COULD NOT BE ACCEPTED. BY LETTER DATED JUNE 10, 1957, THE BIDDER ADVISED THAT THE QUALIFYING NOTATION WAS INSERTED IN THE ERRONEOUS BELIEF THAT, DUE TO THE BIDDER'S PAST PRODUCTION EXPERIENCE IN THE ITEM BEING PROCURED, IT WAS FELT THAT WAIVER OF FIRST ARTICLE TESTS WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT BY PERMITTING MORE EXPEDITIOUS DELIVERY; THAT A CLAUSE PERMITTING SUCH WAIVER OF TESTS FROM A PAST SUPPLIER FREQUENTLY APPEARS IN INVITATIONS FOR BIDS; AND THAT THE BIDDER'S INABILITY TO OBTAIN A BID SET UNTIL A FEW DAYS BEFORE OPENING DATE PRECLUDED A SUFFICIENTLY CLOSE SCRUTINY TO ASCERTAIN THAT SUCH CLAUSE DID NOT EXIST IN THE PRESENT INVITATION. ACCORDINGLY, THE BIDDER REQUESTED THAT THE QUALIFYING NOTATION BE DELETED FROM ITS BID WITHOUT CHANGE IN BID PRICE OR OTHER TERMS OR CONDITIONS.

THE LETTER FROM THE ASSISTANT SECRETARY STATES THAT THE ARTICLES PREVIOUSLY PROCURED FROM THE BIDDER CONSISTED OF A PRIOR MODEL WHICH PROVED UNSATISFACTORY FOR GOVERNMENT REQUIREMENTS, AND THAT THE MODEL BEING PROCURED UNDER THE PRESENT INVITATION DIFFERS IN VARIOUS RESPECTS. IT WAS THEREFORE DETERMINED THAT FIRST ARTICLE TESTING AND APPROVAL IS NECESSARY IN THE PRESENT PROCUREMENT AND THAT THE NOTATION ON THE SECOND LOW BID SUFFICIENTLY QUALIFIES THE BID TO REQUIRE ITS REJECTION.

THE LETTER FROM THE ASSISTANT SECRETARY REQUESTS OUR CONCURRENCE IN SUCH REJECTION AND OUR APPROVAL OF A PROPOSAL TO AWARD A CONTRACT TO TAFFET RADIO AND TELEVISION COMPANY, THE THIRD LOW BIDDER UNDER THE INVITATION.

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

THE RULE IS WELL ESTABLISHED THAT BID DEVIATIONS FROM THE ADVERTISED SPECIFICATIONS WHICH AFFECT THE PRICES OF THE ARTICLES OFFERED OR VARY THE OBLIGATIONS OF THE BIDDER AS DESCRIBED BY THE INVITATION MAY NOT BE WAIVED. 34 COMP. GEN. 24; 30 ID. 179; 17 ID. 554.

UNDER THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE QUALIFICATIONS IN THE BID SUBMITTED BY CAROL RENDERED THE BID NONRESPONSIVE TO THE INVITATION AND THAT THE DELETION OF SUCH QUALIFICATION AFTER BID OPENING WOULD AMOUNT TO A MATERIAL CHANGE IN THE BID AND WOULD BE PREJUDICIAL TO THE OTHER BIDDERS WHO RESPONDED TO THE INVITATION.

ACCORDINGLY, WE CONCUR IN YOUR CONCLUSION THAT THE BID OF CAROL ELECTRONICS CORPORATION MAY NOT BE ACCEPTED.

WITH RESPECT TO YOUR PROPOSAL TO MAKE AN AWARD TO TAFFET RADIO AND TELEVISION COMPANY, WE SEE NO OBJECTION TO SUCH AWARD.

THE BIDS TRANSMITTED WITH THE LETTER FROM THE ASSISTANT SECRETARY ARE ENCLOSED.