B-147815, JANUARY 12, 1962, 41 COMP. GEN. 455

B-147815, JANUARY 12, 1962, 41 COMP. GEN. 455

BIDS - EVALUATION - AGGREGATE V. SEPARABLE ITEMS, PRICES, ETC.--- SINGLE V. MULTIPLE AWARDS UNDER AN INVITATION FOR SEVERAL ITEMS WHICH PROVIDES THAT AWARDS WILL BE BASED ON THE LOWEST BID BY ITEM, THAT QUALIFIED BIDS ARE PERMISSIBLE, AND THAT BIDS MAY BE EVALUATED ON THE BASIS OF ADVANTAGE OR DISADVANTAGE TO THE GOVERNMENT IN MAKING MULTIPLE AWARDS, SEPARATE AWARDS FOR EACH ITEM ARE NOT REQUIRED, THE MULTIPLE AWARD EVALUATION PROVISION HAVING THE EFFECT OF RESERVING TO THE GOVERNMENT THE RIGHT NOT TO MAKE MULTIPLE AWARDS WHEN THAT BASIS WOULD BE MORE COSTLY; THEREFORE, WHEN ONLY ONE CONTRACT IS TO BE AWARDED, THE BIDDER WHO OFFERED THE LOWEST TOTAL AGGREGATE BID ON AN ALL OR NONE BASIS, EVEN THOUGH THE PRICE OF A PARTICULAR ITEM MAY BE HIGHER THAN SOME OTHER BIDDER'S PRICE FOR THAT ITEM, IS ENTITLED TO THE AWARD.

TO THE SECRETARY OF THE AIR FORCE, JANUARY 12, 1962:

REFERENCE IS MADE TO LETTER DATED JANUARY 4, 1962, FROM THE DEPUTY FOR PROCUREMENT MANAGEMENT, DEPARTMENT OF THE AIR FORCE, REQUESTING OUR VIEWS CONCERNING A PROTEST AGAINST AN AWARD UNDER INVITATION FOR BIDS NO. 22-600 -62-25, ISSUED BY THE BASE PROCUREMENT OFFICE, KEESLER AIR FORCE BASE, MISSISSIPPI.

AS POINTED OUT IN THE ABOVE-MENTIONED LETTER, THE INVITATION, ISSUED ON NOVEMBER 8, 1961, REQUESTED BIDS FOR FURNISHING CERTAIN ESTIMATED QUANTITIES OF FRESH MILK AND COTTAGE CHEESE IN ACCORDANCE WITH FEDERAL SPECIFICATIONS FOR TROOP ISSUE AT THE KEESLER AIR FORCE BASE DURING THE PERIOD JANUARY 1 THROUGH DECEMBER 24, 1962. PARAGRAPH 8 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, ENTITLED AWARD OF CONTRACT, READS, IN PERTINENT PART, AS FOLLOWS:

(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) * * *

(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATIONS.

(D) * * * ( ITALICS SUPPLIED.)

ITEM 11 ON PAGE 5 OF THE CONTINUATION SHEET, ALSO ENTITLED AWARD OF CONTRACT, READS AS FOLLOWS:

A. AWARD OF CONTRACT WILL BE BASED ON THE LOWEST BID, BY ITEM, RECEIVED ON BID A, ITEMS 1 THRU 3; OR BID B ( ALTERNATE), ITEM 1 THRU 3. BIDS MAY BE EVALUATED ON THE BASIS OF ADVANTAGES OR DISADVANTAGES TO THE GOVERNMENT THAT MIGHT RESULT FROM MAKING MULTIPLE AWARDS. FOR THIS PURPOSE, THE COST OF ISSUING AN ADVERTISED CONTRACT IS ESTIMATED TO BE $50. ACCORDINGLY, WHERE SEVERAL ITEMS ARE INCLUDED IN AN INVITATION FOR BID AND, AFTER OPENING BIDS, IT IS ASCERTAINED THAT NO ONE RESPONSIBLE BIDDER SUBMITTED THE LOWEST PRICE ON EACH OF THE ITEMS, THE $50 FACTOR OF WHETHER IT WILL BE TO THE BEST OF THE GOVERNMENT TO MAKE MULTIPLE AWARDS WILL BE CONSIDERED, OTHER FACTORS BEING EQUAL. ( ITALICS SUPPLIED.)

WHILE IT IS STATED THAT THREE BIDS WERE RECEIVED AND OPENED ON DECEMBER 4, 1961, THE SUBMISSION IS LIMITED TO CONSIDERATION OF THE FOLLOWING TWO BIDS, SINCE THE THIRD BID RECEIVED WAS HIGHER ON ITEMS 1 AND 2, AND NO BID WAS MADE ON ITEM 3.

BUSH DAIRY, INC., LAUREL, MISSISSIPPI, BID AS FOLLOWS:

ITEM NET UNIT PRICE NET TOTAL PRICE

1 .566262 $611,562.96

2.049878 29,926.80

3 .210270 8,410.80

$649,900.56

COUNTRY GIRL DAIRY PRODUCTS, PICAYUNE, MISSISSIPPI, SUBMITTED THE FOLLOWING BID:

CHART

1 .56484351 $610,030.99

2 .05249475 31,496.85

3 .219978 8,799.12

$650,326.96

IT IS REPORTED THAT ON THE BASIS OF THE STATEMENT IN THE ABOVE MENTIONED SPECIAL PROVISION IDENTIFIED AS ITEM 11 ON PAGE 5 OF THE CONTINUATION SHEET THAT "AWARD OF CONTRACT WILL BE BASED ON THE LOWEST BID, BY ITEM, * * *" THE CONTRACTING OFFICER PROPOSES TO AWARD ITEM 1 TO COUNTRY GIRL DAIRY PRODUCTS WHICH SUBMITTED THE LOW BID FOR THAT ITEM. HE ALSO PROPOSES TO AWARD ITEMS 2 AND 3 TO COUNTRY GIRL DAIRY PRODUCTS FOR THE REASON THAT, ALTHOUGH BUSH DAIRY, INC., SUBMITTED THE LOWER PRICES WITH RESPECT TO THESE TWO ITEMS, A CONDITION IN ITS BID PREVENTS A SEPARATE AWARD OF THESE ITEMS BEING MADE TO THE LOWER BIDDER. THE CONDITION UNDER WHICH BUSH DAIRY MADE ITS BID IS AS FOLLOWS: " BIDDER WILL ACCEPT EITHER ITEM 1, OR ITEMS 1 AND 2, OR ITEMS 1, 2 AND 3.' IT IS FURTHER STATED THAT THE CONTRACTING OFFICER IS OF THE OPINION THAT UNDER THE TERMS OF THE SPECIAL PROVISION CITED ABOVE HE IS REQUIRED TO MAKE SEPARATE AWARDS FOR EACH ITEM AND IS NOT PERMITTED TO MAKE AN AGGREGATE AWARD FOR THE THREE ITEMS. ACCORDINGLY, HE PROPOSES TO AWARD A CONTRACT FOR ALL THREE ITEMS TO COUNTRY GIRL DAIRY PRODUCTS, DESPITE THE FACT THAT THE AGGREGATE BID OF BUSH DAIRY, INC., FOR THE THREE ITEMS IS LOWER. BUSH DAIRY, INC., CONTENDS THAT SINCE ONE CONTRACT WILL BE AWARDED FOR ALL THREE ITEMS THE AWARD SHOULD BE MADE TO THE BIDDER OFFERING THE LOWEST AGGREGATE PRICE FOR THE THREE ITEMS.

YOUR DEPUTY FOR PROCUREMENT MANAGEMENT ADVISES THAT IN THE OPINION OF HIS OFFICE THE SPECIAL PROVISION IN THE INVITATION SETTING FORTH THE BASIS FOR AWARD DOES NOT SUPPORT THE CONCLUSION THAT SEPARATE AWARDS MUST BE MADE FOR EACH OF THE THREE ITEMS, AND THAT ONE AGGREGATE AWARD FOR THE THREE ITEMS CANNOT BE MADE. INSTEAD, HIS OFFICE IS OF THE OPINION THAT IF MULTIPLE AWARDS ARE NOT IN THE BEST INTEREST OF THE GOVERNMENT AND ONLY ONE CONTRACT WILL BE AWARDED, SUCH CONTRACT SHOULD BE AWARDED TO THE BIDDER OFFERING THE LOWEST TOTAL OR AGGREGATE CONTRACT PRICE.

WE AGREE WITH THE CONCLUSION REACHED BY THE DEPUTY FOR PROCUREMENT MANAGEMENT. PARAGRAPH 8 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS EXPRESSLY SANCTIONS THE QUALIFICATION OF BIDS BY BIDDERS TO PRECLUDE ACCEPTANCE BY THE GOVERNMENT ON AN INDIVIDUAL ITEM BASIS. BUSH DAIRY WAS, THEREFORE, ENTITLED TO BID ON THE BASIS IT DID, NAMELY, ITEM 1 OR NONE, AND ITS BID MAY NOT BE CONSIDERED NONRESPONSIVE FOR THIS REASON. PARAGRAPH 8 AND THE PROVISION IN ITEM 11 ON PAGE 5 MUST BE READ TOGETHER, AND WE FIND NOTHING IN THE LATTER WHICH WOULD PRECLUDE THE SUBMISSION OF A SO-CALLED "ALL OR NONE" BID. WHILE THAT PROVISION STATES THAT AWARD WILL BE BASED ON THE LOWEST BID, BY ITEM, IT STATES FURTHER THAT BIDS MAY BE EVALUATED ON THE BASIS OF ADVANTAGE OR DISADVANTAGE TO THE GOVERNMENT THAT MAY RESULT FROM MAKING MULTIPLE AWARDS. IT ALSO PROVIDES, IN EFFECT, THAT MULTIPLE AWARDS WILL NOT BE MADE UNLESS A SAVING OF MORE THAN $50 WILL RESULT, AND FURTHER THAT EVEN SUCH ACTION IS SUBJECT TO "OTHER FACTORS BEING EQUAL.'

IT IS OUR OPINION THAT THE RESERVATION IN ITEM 11 OF THE RIGHT TO EVALUATE BIDS ON THE BASIS OF ADVANTAGE OR DISADVANTAGE TO THE GOVERNMENT IN MAKING MULTIPLE AWARDS MUST BE CONSTRUED AS ALSO RESERVING THE RIGHT NOT TO MAKE MULTIPLE AWARDS WHEN IT WOULD BE MORE COSTLY TO DO SO. THIS IS INDICATED BY THE EXCEPTION TO THE $50 SAVING EXAMPLE GIVEN. EVEN IN SUCH CASE THE FURTHER QUALIFICATION IS MADE THAT A SAVING OF MORE THAN $50 WILL BE CONSIDERED JUSTIFICATION FOR MULTIPLE AWARDS ONLY IF "OTHER FACTORS" ARE EQUAL.

ONE OF THE "OTHER FACTORS" WHICH IT SEEMS TO US MUST BE CONSIDERED IS THE POSSIBILITY THAT A BIDDER MAY SUBMIT AN "ALL OR NONE" BID WHICH IS LOWER IN THE AGGREGATE THAN ANY AGGREGATE OF INDIVIDUAL ITEM BIDS BY OTHER BIDDERS, EVEN THOUGH THE ALL OR NONE BIDDER'S PRICE ON A PARTICULAR ITEM MAY BE MORE THAN $50 HIGHER THAN SOME OTHER BIDDER'S PRICE FOR THAT ITEM. IT WOULD NOT BE REASONABLE, AND MIGHT INDEED BE SUBJECT TO QUESTION, IF THE INVITATION EXPRESSLY PERMITTED ALL OR NONE BIDS AND THE GOVERNMENT THEN REFUSED TO MAKE AWARD TO THE LOWEST AGGREGATE BIDDER BECAUSE HE BID ON THAT BASIS.

FOR THE FOREGOING REASONS, SINCE MULTIPLE AWARDS CANNOT BE MADE, IT IS OUR OPINION THAT THE RESULTANT AWARD TO ONE BIDDER FOR ALL ITEMS MUST BE MADE TO BUSH DAIRY, THE LOWEST AGGREGATE BIDDER ON ALL ITEMS.