B-138407, FEBRUARY 13, 1959, 38 COMP. GEN. 550

B-138407, FEBRUARY 13, 1959, 38 COMP. GEN. 550

BIDS - EVALUATION - ALL OR NONE - PARTIAL BID AN INVITATION FOR BIDS WHICH, ON A PAGE OTHER THAN THOSE PROVIDED FOR THE ENTRY OF BIDS, PUT BIDDERS ON NOTICE THAT AWARD OF A CONTRACT FOR THE SUPPLY OF A PARTICULAR GROUP OF ITEMS WOULD, CONTRARY TO PREVIOUS PRACTICE, BE MADE ON AN " ALL OR NONE" BASIS MUST BE READ AND CONSIDERED AS A WHOLE AND ALL BIDDERS MUST BE DEEMED TO BE ON NOTICE OF SUCH REQUIREMENT SO THAT A LOW BID ON ONE GROUP OF ITEMS MUST BE REJECTED AS NONRESPONSIVE TO THE " ALL OR NONE" INVITATION REQUIREMENT, NOTWITHSTANDING THAT THE SUBMISSION OF A PARTIAL BID IS DUE TO THE BIDDER'S FAILURE TO SEE THE INSTRUCTIONS. IN VIEW OF THE RULES OF COMPETITIVE ADVERTISED BIDDING WHICH REQUIRE THAT BIDDERS BE INFORMED OF THE BASIS UPON WHICH THE AWARD OF CONTRACTS WILL BE MADE, BIDS SUBMITTED IN RESPONSE TO AN INVITATION, WHICH ATTEMPTS TO RESERVE TO THE GOVERNMENT THE RIGHT TO MAKE AWARDS "AS THE INTEREST OF THE GOVERNMENT MAY REQUIRE" ON EITHER AN " ALL OR NONE" BASIS OR BY SEPARATE ITEMS, SHOULD BE EVALUATED AND AWARDS MADE ON THE BASIS OF THE LOWEST AGGREGATE COST TO THE GOVERNMENT WHETHER SEPARATELY OR ON AN " ALL OR NONE" BASIS BUT IF BIDS ARE TO BE EVALUATED ON SOME BASIS IN ADDITION TO PRICE, THE METHOD OF EVALUATION MUST BE CLEARLY STATED IN THE INVITATION.

TO THE SECRETARY OF THE ARMY, FEBRUARY 13, 1959:

REFERENCE IS MADE TO A LETTER OF JANUARY 8, 1959, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS), REQUESTING OUR DECISION REGARDING THE PROTEST OF THE H. E. KOONTZ CREAMERY, NC., BALTIMORE, MARYLAND, AGAINST THE AWARD OF ITEM 1 (E) OF CONTRACT NO. DA 18-102-AII 5136, DATED DECEMBER 18, 1958, TO THE SEALTEST WESTERN MARYLAND DIVISION OF NATIONAL DAIRY PRODUCTS CORPORATION FOR VARIOUS DAIRY PRODUCTS REQUIRED AT FT. MEADE, MARYLAND, FOR THE SIX-MONTH PERIOD BEGINNING JANUARY 1, 1959. EXECUTION OF THE CONTRACT HAS BEEN DEFERRED PENDING A FINAL DECISION ON THIS PROTEST.

THE INVITATION CALLED FOR BIDS ON THIRTEEN ITEMS, OF WHICH ITEM 1 WAS AN ISSUE ITEM, ITEMS 2 AND 3 WERE HOSPITAL AND ISSUE ITEMS, ITEMS 7 AND 8 WERE BOTH RESALE AND HOSPITAL OR ISSUE ITEMS, AND THE OTHER E ITEMS FOR COMMISSARY RESALE ONLY. MANY OF THE ITEMS, SUCH AS ITEM 1, WERE SUBDIVIDED INTO ALTERNATES ACCORDING TO THE SIZE AND TYPE OF CONTAINER. SEALTEST SUBMITTED BIDS ON ALL ITEMS, WHEREAS KOONTZ SUBMITTED BIDS ONLY ON ITEMS 1 (E), 2, AND 3, AND DID NOT BID ON ANY RESALE ITEMS. THE AWARD OF ITEM 1 (E) IS THE ONLY ONE IN DISPUTE SINCE THAT IS THE ONLY ITEM ON WHICH KOONTZ SUBMITTED A LOWER BID THAN SEALTEST. ITEM 1 (E) CALLED FOR A QUANTITY OF 250,000 GALLONS OF WHOLE FRESH MILK IN FIVE-GALLON CONTAINERS FOR A SIX-MONTH PERIOD BEGINNING JANUARY 1, 1959. SEALTEST BID A TOTAL OF $147,250, WHILE KOONTZ BID A TOTAL OF $143,500 ON THIS ITEM.

THERE SEEMS TO BE NO QUESTION BUT THAT THE PROCURING ACTIVITY INTENDED TO REQUIRE BIDS TO BE MADE ON AN " ALL OR NONE" BASIS ON CERTAIN GROUPS OF ITEMS. ALL OR NONE BIDS WERE REQUIRED UNDER THE PRECEDING INVITATION ISSUED MAY 5, 1958, AND, IT IS UNDERSTOOD, UNDER SEVERAL INVITATIONS BEFORE THAT. HOWEVER, THE PRESENT INVITATION DID MAKE A CHANGE IN THE TYPE OF ITEMS GROUPED TOGETHER. UNDER PRECEDING INVITATIONS IT HAD BEEN THE CUSTOM TO GROUP ISSUE AND HOSPITAL ITEMS IN ONE GROUP AND ITEMS FOR RESALE IN ANOTHER GROUP, REGARDLESS OF THE CHARACTER OF THE ITEMS. THE PRESENT INVITATION MADE GROUPINGS OF ITEMS BY CHARACTER OF ITEM, WHETHER FOR ISSUE OR RESALE. FOR EXAMPLE, ALL WHITE MILK AND SWEET CREAM ITEMS WERE GROUPED TOGETHER. THE TWO SIZES OF COTTAGE CHEESE REQUESTED WERE GROUPED, BUT BUTTERMILK, SOUR CREAM, BUTTER, AND CHOCOLATE MILK WERE NOT INCLUDED IN ANY GROUP. IT IS UNDERSTOOD THE PURPOSE OF THIS WAS TO AFFORD BIDDERS WHO MIGHT NOT BE ELIGIBLE TO BID ON CERTAIN ITEMS A CHANCE TO BID ON OTHER ITEMS FOR WHICH THEY WERE AN APPROVED SOURCE OF SUPPLY.

THE INVITATION DID NOT PUT BIDDERS ON NOTICE, ON THE TWO PAGES THEREOF WHERE BIDS WERE TO BE ENTERED FOR ISSUE AND HOSPITAL ITEMS, THAT BIDS WOULD NOT BE ACCEPTED ON THOSE ITEMS ALONE AS THERETOFORE HAD BEEN THE CUSTOM. THUS, A BIDDER WHO HAD BEEN ACCUSTOMED TO BIDDING ONLY ON THE HOSPITAL AND ISSUE ITEMS (WHICH COMPRISE THE GREATER PART OF THE TOTAL REQUIREMENTS) MIGHT HAVE THOUGHT HE HAD SUBMITTED A RESPONSIVE BID IF HE BID ON ALL THOSE ITEMS EVEN THOUGH HE DID NOT BID ON THE RESALE ITEMS. ARE INFORMED THAT THE BID OF THE KOONTZ CREAMERY WAS MADE WITH THIS UNDERSTANDING.

HOWEVER, PAGE 12 OF THE INVITATION CONTAINED THE FOLLOWING PROVISION:

THE RIGHT IS RESERVED AS THE INTEREST OF THE GOVERNMENT MAY REQUIRED (SIC) TO MAKE AWARDS AS FOLLOWS, FOR EITHER A THREE MONTH OR SIX MONTH PERIOD: ITEMS 6, 11, AND 12, SEPARATELY.

GROUP A

ITEMS 1 (A), OR (B), OR (C), OR (D), AND ITEMS 4, 5, 7 (A) OR (B) AND (C) OR (D), 8 (A) OR (B) AND (C) OR (D), 9 AND 13, ON AN " ALL OR NONE" BASIS.

GROUP B

ITEMS 1 (E) AND 3 (A) AND (B), 4, 5, 7 (A) OR (B) AND (C) OR (D), 8 (A) OR (B) AND (C) OR (D), 9 AND 13, ON AN " ALL OR NONE" BASIS.

GROUP C

ITEMS 2 AND 10 ON AN " ALL OR NONE" BASIS.

IT IS UNFORTUNATE THAT, AS WE UNDERSTAND, KOONTZ DID NOT CONSIDER PAGE 12 OF THE INVITATION, AND IN VIEW OF THE METHOD OF GROUPING ITEMS WHICH HAD BEEN USED IN PREVIOUS INVITATIONS IT WOULD HAVE BEEN PREFERABLE TO HAVE INSERTED A NOTE ON THE TWO PAGES COVERING ISSUE AND HOSPITAL ITEMS SPECIFICALLY DIRECTING BIDDERS' ATTENTION TO PAGE 12. NEVERTHELESS, THE INVITATION SHOULD HAVE BEEN READ AS A WHOLE AND MUST BE CONSIDERED AS A WHOLE, AND ALL BIDDERS MUST BE DEEMED TO HAVE BEEN ON NOTICE OF THE REQUIREMENTS STATED ON PAGE 12, WHETHER THEY ACTUALLY CONSIDERED THAT PAGE OR NOT.

THE QUESTION NEXT ARISES WHETHER THE LANGUAGE USED ON PAGE 12 REQUIRES BIDS ON AN " ALL OR NONE" BASIS. CLEARLY THE LANGUAGE RESERVES TO THE GOVERNMENT THE RIGHT TO MAKE AWARDS FOR EITHER A THREE MONTH OR A SIX- MONTH PERIOD FOR ALL GROUPS OR SEPARATE ITEMS. THE ONLY QUESTION IS WHETHER IT ALSO PURPORTS TO RESERVE TO THE GOVERNMENT THE RIGHT TO MAKE AWARDS ON OTHER THAN AN " ALL OR NONE" BASIS FOR ITEMS INCLUDED IN GROUPS A, B, AND C. IT MAY BE NOTED THAT GROUP A AND GROUP B ARE MUTUALLY EXCLUSIVE, SO THAT THE GOVERNMENT NECESSARILY HAS THE RIGHT TO AWARD WHICHEVER OF THESE GROUPS IS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT.

THERE WOULD BE NO DOUBT AS TO THE MEANING IF THE INVITATION HAD STATED:

AWARDS WILL BE MADE AS FOLLOWS, WITH THE RIGHT RESERVED TO THE GOVERNMENT TO MAKE AWARD FOR EITHER A 3-MONTH OR 6-MONTH PERIOD.

FROM A STRICTLY TECHNICAL STANDPOINT IT CAN BE ARGUED THAT THE LANGUAGE ACTUALLY USED DOES NOT SPECIFICALLY STATE THAT AWARDS ON GROUP A OR B AND ON GROUP C WILL BE MADE ON AN " ALL OR NONE" BASIS. HOWEVER, IN VIEW OF THE USUAL PREVIOUS PRACTICE OF MAKING " ALL OR NONE" AWARDS, WITH WHICH ALL BIDDERS WERE FAMILIAR, WE DO NOT BELIEVE THE INTENT OF THE LANGUAGE USED WAS APT TO BE MISUNDERSTOOD BY BIDDERS, AND IT APPEARS THAT IT ACTUALLY WAS NOT MISUNDERSTOOD BY KOONTZ.

IT MAY BE NOTED, ALSO, THAT THE RULES OF COMPETITIVE ADVERTISED BIDDING REQUIRE THAT BIDDERS BE INFORMED OF THE BASIS UPON WHICH AWARD WILL BE MADE. THUS, IF THE LANGUAGE INVOLVED WERE TO BE CONSTRUED AS ATTEMPTING TO RESERVE TO THE GOVERNMENT THE RIGHT TO MAKE AWARDS "AS THE INTEREST OF THE GOVERNMENT MAY REQUIRE" ON EITHER AN " ALL OR NONE" BASIS OR BY SEPARATE ITEMS, THE ONLY PROPER BASIS OF EVALUATION AND AWARD WOULD BE THE LOWEST AGGREGATE COST TO THE GOVERNMENT WHETHER SEPARATELY OR ON AN ALL OR NONE BASIS. IF BIDS ARE TO BE EVALUATED ON SOME BASIS IN ADDITION TO PRICE, THE METHOD OF EVALUATION MUST BE CLEARLY STATED IN THE INVITATION SO THAT BIDDERS MAY KNOW THE WEIGHT WHICH WILL BE GIVEN FACTORS OTHER THAN PRICE.

UNDER ALL THE CIRCUMSTANCES OF THIS PARTICULAR CASE, WE BELIEVE THAT THE AWARD TO SEALTEST WAS PROPER. IT IS ASSUMED THAT APPROPRIATE ACTION WILL BE TAKEN TOWARD CLARIFYING THE LANGUAGE OF FUTURE INVITATIONS.