B-133769, SEP. 20, 1957

B-133769, SEP. 20, 1957

TO CAPTAIN R. A. WILLIAMS, UNITED STATES NAVY, ASSISTANT CHIEF FOR PURCHASING:

YOUR LETTER OF SEPTEMBER 10, 1957, YOUR REFERENCE R11.2 L4-1 L4/NT4 29, REQUESTS OUR DECISION AS TO WHETHER THE BID OF THE GENERAL DEVELOPMENT CORPORATIONS SUBMITTED PURSUANT TO INVITATION FOR BIDS NO. 383-2070-57, MAY PROPERLY BE CONSIDERED FOR AWARD AS RECOMMENDED BY THE CONTRACTING OFFICER UNDER THE CIRCUMSTANCES SET OUT BELOW.

THE INVITATION, ISSUED MAY 24, 1957, REQUESTED BIDS ON 134 TEST BENCH HARNESSES UNDER ITEM NO. 1. IN ADDITION, ITEM NO. 3 REQUESTED BIDS ON ONE REPRODUCIBLE COPY AND ONE SET OF OFF-SET NEGATIVES OF A HANDBOOK AND ITEM NO. 3-1 CALLED FOR PRICES ON 1,000 PRINTED COPIES OF THE HANDBOOK.

THE GENERAL DEVELOPMENT CORPORATION BID WAS LOW AT $63,761.22, LESS PROMPT PAYMENT DISCOUNT. HOWEVER, NO PRICE WAS SHOWN ON THE BID OPPOSITE ITEM NO. 3, AND OPPOSITE ITEM NO. 3-1 APPEARED A STATEMENT INDICATING THAT THE PRICE FOR THE LATTER WAS INCLUDED IN THE PRICE OF ITEM NO. 1. RESPONSE TO A REQUEST FOR CLARIFICATION FROM THE CONTRACTING OFFICER, GENERAL DEVELOPMENT CORPORATION INDICATED THAT THE STATEMENT REGARDING THE INCLUSION OF THE PRICE IN ITEM NO. 1 WAS INTENDED TO APPLY BOTH TO ITEM NOS. 3 AND 3-1, APPARENTLY ON THE BASIS THAT ITEM NOS. 3 AND 3-1 WERE PARTS OF THE SAME ITEM AND THAT IT WAS UNNECESSARY TO FURNISH THE STATED INFORMATION FOR EACH PORTION OF THE ITEM.

THE SECOND LOW BIDDER, JOWIL ELECTRONICS INCORPORATED, PROTESTED CONSIDERATION OF THE GENERAL DEVELOPMENT CORPORATION BID ON THE BASIS THAT THE STATEMENT CONCERNING INCLUSION OF PRICE IN THE COST OF ITEM NO. 1 APPLIED ONLY TO ITEM NO. 3-1 AND, IN EFFECT, THAT GENERAL DEVELOPMENT CORPORATION HAD THEREFORE FAILED TO BID ON ITEM NO. 3. ASSUMING THIS PREMISE (THAT GENERAL DEVELOPMENT CORPORATION HAD NOT BID ON ITEM NO. 3), THE JOWIL ELECTRONICS CORPORATION BID WOULD BECOME LOW AS TO THE OVERALL PROCUREMENT AND AS TO ITEM NO 1.

THE BID SUBMITTED BY GENERAL DEVELOPMENT CORPORATION IS AMBIGUOUS TO THE EXTENT THAT IT CANNOT BE DETERMINED FROM THE FACE OF THE BID WHETHER THE PROVISION AS TO INCLUSION OF COST IN ITEM NO. 1 WAS INTENDED TO APPLY TO ALL OF ITEM NO. 3 INCLUDING ITEM NO. 3-1 OR WHETHER THE PROVISION WAS INTENDED TO APPLY TO ITEM NO. 3-1 ONLY. HOWEVER, THE CONTRACTING OFFICER'S STATEMENT OF FACTS DATED AUGUST 20, 1957, STATES AT PARAGRAPH 7 THAT IN ORDER TO PRINT THE COPIES OF THE HANDBOOK SPECIFIED UNDER ITEM NO. 3-1, IT WOULD FIRST BE NECESSARY TO MAKE THE REPRODUCIBLE COPY AND OFF-SET NEGATIVES REQUIRED UNDER ITEM NO. 3. SINCE A BIDDER WHO OFFERED ITEM NO. 3-1 COULD ALSO OFFER ITEM NO. 3 AT LITTLE OR NO ADDITIONAL COST TO ITSELF, IT WOULD BE ILLOGICAL TO ASSUME THAT GENERAL DEVELOPMENT CORPORATION HAD NOT INTENDED TO BID ON ITEM NO. 3. THEREFORE, WE PERCEIVE NO BASIS FOR OBJECTING TO CONSIDERING GENERAL DEVELOPMENT CORPORATION'S BID AS INCLUDING BOTH ITEM NOS. 3 AND 3-1 IN THE PRICE OF ITEM NO. 1 PARTICULARLY SINCE AN AMBIGUOUS PROVISION OF A BID MAY BE GIVEN THAT INTERPRETATION MOST FAVORABLE TO THE GOVERNMENT. SEE 16 COMP. GEN. 569.

IN ADDITION, THE GENERAL DEVELOPMENT CORPORATION BID INCLUDED A PROVISION DESIGNATED AS "ANNEX A," WHICH STATES:

"COMMINGLED WITH CONTRACTOR OWNED AND CONTRACTOR LEASED EQUIPMENT ARE CERTAIN ITEMS OF GOVERNMENT OWNED BUAER CONTROLLED EQUIPMENT WHICH, IF REQUIRED, WILL BE USED UNDER THIS PROPOSED CONTRACT. THE ATTACHED PROPOSAL IS SUBMITTED SUBJECT TO AUTHORIZATION BY THE PROCURING AGENCY TO MAKE USE OF THESE FACILITIES ON A RENT FREE BASIS IN COMPLIANCE WITH THE LATEST REVISED REQUIREMENTS OF SECTION 13-407 OF THE ASPR.'

THE FIRST SENTENCE INDICATES THAT GOVERNMENT-OWNED EQUIPMENT WILL BE USED UNDER THE CONTRACT ,IF REQUIRED.' IT IS NOT CLEAR WHETHER THE REQUIREMENT IS TO BE DETERMINED BY THE BIDDER OR BY A REPRESENTATIVE OF THE GOVERNMENT. THE SECOND SENTENCE, HOWEVER, CONDITIONS THE GENERAL DEVELOPMENT CORPORATION BID UPON AUTHORIZATION FOR USE OF THE GOVERNMENT FACILITIES ON A RENT-FREE BASES. THE TWO SENTENCES READ TOGETHER APPEAR TO LEAVE TO THE BIDDER THE DETERMINATION OF WHETHER THE USE OF GOVERNMENT EQUIPMENT WILL BE REQUIRED. AS SUCH, THE ANNEX CONSTITUTES A MATERIAL QUALIFICATION OF THE BID SINCE PRICE WOULD DEFINITELY BE AFFECTED THEREBY. SEE 30 COMP. GEN. 179.

THE CONTRACTING OFFICER'S REPORT INDICATES THAT GENERAL DEVELOPMENT CORPORATION HAS BEEN AWARDED FACILITIES CONTRACT NOAS-1184. THERE IS NO INDICATION AS TO WHETHER GOVERNMENT EQUIPMENT IN THE LANDS OF THE BIDDER PURSUANT TO THE FACILITIES CONTRACT IS USABLE IN CONNECTION WITH THE PROCUREMENT UNDER CONSIDERATION. IF THE FACILITIES CONTRACT INCLUDES EQUIPMENT WHICH COULD BE USED UNDER THE CURRENT PROCUREMENT, ACCEPTANCE OF THE BID WOULD BE CONTRARY TO ASPR 13-407/A) (1) WHICH PROVIDES THAT"FACILITIES CONTRACTS SHALL NOT AUTHORIZE THE USE OF INDUSTRIAL FACILITIES WITHOUT CHARGE TO PERFORM CONTRACTS ENTERED INTO BY FORMAL ADVERTISING.' THUS, TO PERMIT UTILIZATION OF THE GOVERNMENT OWNED EQUIPMENT UNDER THE BIDDER'S CONTROL PURSUANT TO THE FACILITIES CONTRACT ON A "RENT-FREE BASIS" WOULD APPEAR TO INSERT A PROVISION IN THE FACILITIES CONTRACT IN CONTRAVENTION OF THE ASPR PROVISION QUOTED ABOVE.

THE GENERAL DEVELOPMENT CORPORATION IN ITS LETTER OF JULY 1, 1957, WRITTEN SUBSEQUENT TO OPENING STATED THAT NONE OF THE GOVERNMENT-OWNED EQUIPMENT IN THE CONTRACTOR'S POSSESSION UNDER FACILITIES CONTRACT NO AS 1184 WOULD BE REQUIRED OR USED IN CONNECTION WITH THE INSTANT PROCUREMENT. HOWEVER, THE CONDITION STATED IN THE BID IS A MATERIAL QUALIFICATION AND TO PERMIT WITHDRAWAL AFTER OPENING WOULD BE CONTRARY TO COMPETITIVE BID PROCEDURES AND WOULD GIVE GENERAL DEVELOPMENT CORPORATION AN ADVANTAGE NOT ENJOYED BY THE OTHER BIDDERS. 36 COMP. GEN. 251 AND 17 COMP. GEN. 554. THEREFORE, IF GENERAL DEVELOPMENT CORPORATION HAS IN ITS POSSESSION UNDER THE FACILITIES CONTRACT GOVERNMENT-OWNED EQUIPMENT WHICH COULD BE EMPLOYED TO ITS ADVANTAGE IF AWARDED A CONTRACT PURSUANT TO THE INVITATION IN QUESTION, THE QUALIFICATION OF ITS BID CONTAINED IN ANNEX A WOULD RENDER THE BID NON RESPONSIVE. IF, ON THE OTHER HAND, GENERAL DEVELOPMENT CORPORATION COULD NOT EMPLOY TO ITS ADVANTAGE ANY OF THE GOVERNMENT-OWNED EQUIPMENT IN ITS POSSESSION UNDER THE FACILITIES CONTRACT IN CARRYING OUT THE CURRENT PROCUREMENT, THEN ANNEX A CANNOT BE INTERPRETED AS QUALIFYING THE TERMS OF THE INVITATION IN ANY MATERIAL RESPECT NOR CAN ITS INCLUSION UNDER THE CIRCUMSTANCES BY REGARDED AS PREJUDICING IN ANY WAY THE RIGHTS OF THE OTHER BIDDERS. IN THAT CASE, THE INCLUSION OF ANNEX A WOULD NOT RENDER THE GENERAL DEVELOPMENT CORPORATION BID NON RESPONSIVE.

THE GENERAL DEVELOPMENT CORPORATION BID MAY BE CONSIDERED FOR AWARD IN ACCORDANCE WITH THE FOREGOING.