B-140559, OCT. 22, 1959

B-140559, OCT. 22, 1959

TO GREAT LAKES RUBBER CORPORATION:

REFERENCE IS MADE TO A TELEGRAM DATED AUGUST 21, 1959, FROM YOUR ATTORNEYS, AND A COPY OF THEIR LETTER OF AUGUST 24, 1959, TO THE DEPARTMENT OF THE ARMY, PROTESTING AGAINST THE POSSIBLE AWARD OF CONTRACT TO HERBERT COOPER COMPANY, INC., UNDER INVITATION FOR BIDS NO. GML-30-070- 60-3 ISSUED JULY 16, 1959, BY THE U.S. ARMY CHEMICAL PROCUREMENT DISTRICT, NEW YORK.

THE INVITATION AS AMENDED REQUESTED BIDS--- TO BE OPENED AUGUST 13, 1959- -- FOR FURNISHING ,REPAIR PARTS, HOSE ASSEMBLIES, FOR FILTER UNIT, GAS PARTICULATE.' PARAGRAPH 7 OF TERMS AND CONDITIONS OF THE INVITATION FOR BIDS IS AS FOLLOWS:

"7. DISCOUNTS. - (A) PROMPT-PAYMENT DISCOUNTS WILL BE INCLUDED IN THE EVALUATION OF BIDS, PROVIDED THE PERIOD OF THE OFFERED DISCOUNT IS SUFFICIENT TO PERMIT PAYMENT WITHIN SUCH PERIOD IN THE REGULAR COURSE OF BUSINESS UNDER THE DELIVERY, INSPECTION, AND PAYMENT PROVISIONS OF THE INVITATION AND BID.

"/B) IN CONNECTION WITH ANY DISCOUNT OFFERED, TIME WILL BE COMPUTED FROM DATE OF DELIVERY OF THE SUPPLIES TO CARRIER WHEN DELIVERY AND ACCEPTANCE ARE AT POINT OF ORIGIN, OR FROM DATE OF DELIVERY AT DESTINATION OR PORT OF EMBARKATION WHEN DELIVERY AND ACCEPTANCE ARE AT EITHER OF THOSE POINTS, OR FROM DATE CORRECT INVOICE OR VOUCHER IS RECEIVED IN THE OFFICE SPECIFIED BY THE GOVERNMENT IF THE LATTER DATE IS LATER THAN THE DATE OF DELIVERY. PAYMENT IS DEEMED TO BE MADE, FOR THE PURPOSE OF EARNING THE DISCOUNT, ON THE DATE OF MAILING OF THE GOVERNMENT CHECK.'

PARAGRAPH 8 PROVIDES IN PART:

"8. AWARD OF CONTRACT. - (A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

"/B) THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED.

"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, BIDS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY BID UPON AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN HIS BID.'

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID OF $2.08 AND $2.10 PER UNIT ON ITEM NO. 1A AND 1B RESPECTIVELY; $12.42 AND $12.50 PER UNIT ON ITEM NO. 2A AND 2B RESPECTIVELY; AND $10.52 AND $10.59 PER UNIT ON ITEM NO. 3A AND 3B RESPECTIVELY. HERBERT COOPER COMPANY, INC., SUBMITTED AN UNCONDITIONAL BID OF $2 AND $1.88 PER UNIT ON ITEM NO. 1A AND 1B RESPECTIVELY; $14.19 AND $13.65 PER UNIT ON ITEM NO. 2A AND 2B RESPECTIVELY; AND $11.87 AND $10.94 PER UNIT ON ITEM NO. 3A AND 3B RESPECTIVELY. COOPER COMPANY ALSO QUOTED UNIT PRICES OF $1.88 ON ITEM NO. 1, $13.65 ON ITEM NO. 2 AND $10.94 ON ITEM NO. 3, CONDITIONED ON AWARD OF BOTH A AND B OF ANY ONE ITEM. IT ALSO QUOTED UNIT PRICES OF $12.86 ON ITEM NO. 2 AND $10.54 ON ITEM NO. 3 CONDITIONED ON AWARD OF BOTH ITEMS NOS. 2 AND 3. YOU OFFERED A DISCOUNT OF 1 PERCENT, 30 DAYS AND COOPER COMPANY OFFERED A DISCOUNT OF 2 PERCENT, 10 DAYS. IT THUS APPEARS THAT THE COOPER COMPANY BID WAS UNQUESTIONABLY LOWEST AS TO ITEM NO. 1 AND THAT IT ALSO IS LOWEST AS TO ITEMS NOS. 2 AND 3 IF ITS COMBINED BID ON THOSE ITEMS AND ITS OFFER OF 2 PERCENT DISCOUNT ARE PROPERLY FOR CONSIDERATION.

IN YOUR ATTORNEYS' LETTER OF AUGUST 24, 1959, IT IS STATED THAT "IN VIEW OF THE TEST REQUIREMENTS AND DIVERSIFICATION OF POINTS OF DELIVERY IT IS IMPOSSIBLE FOR THE GOVERNMENT TO MAKE PAYMENT WITHIN A 10-DAY DISCOUNT PERIOD.' THE CONTRACTING OFFICER STATES, HOWEVER, THAT A 10-DAY DISCOUNT PERIOD IS ADEQUATE. IN THIS CONNECTION HE STATES:

"* * * IT SHOULD BE NOTED THAT THE SPECIFICATION CALLS FOR SAMPLE TESTING FOR MUSTARD RESISTANCE AT ARMY CHEMICAL CENTER, MARYLAND. THE INSPECTION CLAUSE IN THE SCHEDULE PROVIDES THAT THE CONTRACTOR SHALL NOT EFFECT SHIPMENT UNTIL SUCH TIME AS IT HAS RECEIVED FROM THE GOVERNMENT INSPECTION OFFICE OR THE GOVERNMENT INSPECTOR A SIGNED SHIPPING DOCUMENT (MATERIAL INSPECTION AND RECEIVING REPORT, DD FORM 250) RELEASING THE SHIPMENT. ACCORDINGLY, NO SHIPMENT OF THE COMPLETED ITEMS COULD BE SHIPPED TO DESTINATION UNTIL THE INSPECTOR HAD RECEIVED NOTICE FROM THE ARSENAL THAT THE PRODUCTS HAD PASSED THE MUSTARD RESISTANCE TESTS. FURTHER, ACTUAL PRODUCT INSPECTION WILL TAKE PLACE AT ORIGIN WITH ACCEPTANCE AT DESTINATION. ACCORDINGLY, THERE WILL BE NO DELAY OCCASIONED BY THE INSPECTION AND ACCEPTANCE SO AS TO INTERFERE WITH THE TAKING OF THE DISCOUNT.'

THE CONTRACTING OFFICER STATES ALSO THAT DURING JUNE AND JULY 1959 HIS AGENCY WAS ABLE TO TAKE ADVANTAGE OF 96 PERCENT OF ALL INVOICES PRESENTED OFFERING DISCOUNTS FOR PAYMENT WITHIN 10 DAYS.

WE FIND NOTHING IN THE DECISION OF JUNE 23, 1954, B-118449, CITED BY YOUR ATTORNEYS, WHICH IS RELEVANT TO THE INSTANT CASE. ALSO, THE CASE OF FOSTER COMPANY V. UNITED STATES, 128 C.CLS. 288, REFERRED TO BY THEM, IS NOT APPLICABLE HERE. THE ABOVE-QUOTED PARAGRAPH 7 OF THE INVITATION SPECIFICALLY PROVIDES THAT "PAYMENT IS DEEMED TO BE MADE, FOR THE PURPOSE OF EARNING THE DISCOUNT, ON THE DATE OF MAILING OF THE GOVERNMENT CHECK.' NO SIMILAR PROVISION WAS INVOLVED IN THE FOSTER CASE.

IN 34 COMP. GEN. 79, INVOLVING FACTS SIMILAR TO THOSE IN THE INSTANT CASE, IT IS STATED:

"THAT COMPANY'S PROPOSAL THEREFORE APPEARS TO HAVE BEEN THAT THE GOVERNMENT COULD HAVE ANY INDIVIDUAL ITEMS IT DESIRED AT REGULAR PRICES OR ALL THE ITEMS AS A LOT AT SOME EIGHT PERCENT BELOW LIST. THIS IS NOT AN "ALL OR NOTHING" BID, BUT A NOT UNCOMMON METHOD OF QUOTING, WHICH HAS NEVER BEEN CONSIDERED AS IMPROPER IN ITSELF.'

SEE ALSO 35 COMP. GEN. 383 AND 37 ID. 814, HOLDING THAT AN "ALL OR NONE" BID IS NOT OBJECTIONABLE UNLESS PROHIBITED BY THE INVITATION.

IN THE INSTANT MATTER, THERE IS NOTHING IN THE INVITATION PROHIBITING COMBINATION BIDS. AWARD ON THE BASIS OF A COMBINATION BID WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS, SINCE ALL BIDDERS WERE AT LIBERTY TO SUBMIT COMBINATION BIDS, AND AWARD ON SUCH BASIS APPARENTLY WOULD BE IN THE INTEREST OF THE UNITED STATES. THEREFORE, WE SEE NO OBJECTION TO CONSIDERATION OF THE BID AS SUBMITTED BY THE HERBERT COOPER COMPANY, INC.