B-148185, APR. 12, 1962

B-148185, APR. 12, 1962

TO PANEL CORPORATION OF AMERICA:

YOUR LETTER OF FEBRUARY 13, 1962, WITH ENCLOSURES, PROTESTS THE AWARD OF A CONTRACT FOR TOW TARGETS BY THE OGDEN AIR MATERIEL AREA, HILL AIR FORCE BASE, UTAH, TO UNIVERSAL TARGET COMPANY, HEREINAFTER REFERRED TO AS UNIVERSAL.

PURSUANT TO AND IN CONFORMANCE WITH SECTION 2, PART 5 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), THE AIR FORCE SENT TO 61 PROSPECTIVE SOURCES A LETTER REQUEST FOR TECHNICAL PROPOSAL (LRFTP), NO. 00-2-6920-1280, FOR 3,062 TOW TARGETS. THIS LETTER STATED THAT THE PROCUREMENT WOULD BE CONDUCTED IN TWO PHASES, THE FIRST OF WHICH WOULD BE THE SUBMISSION AND EVALUATION OF THE TECHNICAL PROPOSALS, WITHOUT PRICING OR PRICE INFORMATION.

IN RESPONSE TO THIS LETTER, THE AIR FORCE RECEIVED TECHNICAL PROPOSALS FROM 12 COMPANIES. UNIVERSAL SUBMITTED PROPOSALS ON 5 DIFFERENT STRUCTURAL DESIGN CONCEPTS, U.S. PLYWOOD SUBMITTED PROPOSALS ON 2 CONCEPTS, AND THE OTHER 10 COMPANIES SUBMITTED ONLY ONE PROPOSAL. OF A TOTAL OF 17 PROPOSALS, ONLY TWO, INCLUDING ONE FROM UNIVERSAL, WERE ACCEPTABLE AS SUBMITTED. TWELVE OF THE REMAINING PROPOSALS WERE CONSIDERED MARGINAL, WHILE TWO OF THOSE SUBMITTED BY UNIVERSAL AND ONE OF THOSE SUBMITTED BY U.S. PLYWOOD WERE FOUND TO BE UNACCEPTABLE. NEGOTIATIONS WERE THEN CONDUCTED WITH THE 11 FIRMS, INCLUDING YOUR OWN, WHICH HAD SUBMITTED MARGINAL PROPOSALS, IN ORDER TO QUALIFY THOSE PROPOSALS AS ACCEPTABLE.

PRIOR TO ISSUING INVITATION FOR BIDS (IFB) NO. 42-600-62-321, ON JANUARY 11, 1962, THE SECOND STEP OF THE TWO-STEP PROCUREMENT, THE TWO MARGINAL PROPOSALS SUBMITTED BY UNIVERSAL WERE QUALIFIED AS ACCEPTABLE, AS WERE THE MARGINAL PROPOSALS SUBMITTED BY THE OTHER 10 FIRMS. SINCE UNIVERSAL HAD QUALIFIED THE ACCEPTABILITY OF A TOTAL OF THREE PROPOSED TOW TARGETS, IT RECEIVED THREE PACKETS OF BID SETS, AND SUBSEQUENTLY IT SUBMITTED BID PRICES FOR EACH OF THE ACCEPTABLE TARGETS. ALL OTHER COMPANIES RECEIVED ONLY ONE BID SET AND SUBMITTED ONLY ONE BID PRICE.

ELEVEN OF THE 12 COMPANIES WHICH PARTICIPATED IN THE FIRST STEP OF THE PROCUREMENT ALSO ELECTED TO PARTICIPATE IN THE SECOND STEP. THEY SUBMITTED BIDS WHICH WERE OPENED ON JANUARY 31, 1962. THE THREE LOWEST PRICES RECEIVED WERE AS FOLLOWS:

TABLE

UNIVERSAL TARGET COMPANY - $143.31 EACH

UNIVERSAL TARGET COMPANY - 161.55 EACH

PANEL CORP. OF AMERICA - 166.67 EACH

YOU CONTEND THAT AWARD SHOULD NOT HAVE BEEN MADE TO UNIVERSAL BECAUSE SELECTED SINGULAR WORDS APPEARING IN THE LRFTP MAY BE CONSTRUED TO INFER THAT BIDDERS WOULD SUBMIT ONLY ONE BID, AND BECAUSE THE IFB CONTAINS NO PROVISION WHICH SPECIFICALLY PERMITS THE SUBMISSION OF MORE THAN ONE BID. IT WAS ADMINISTRATIVELY DECIDED THAT UNIVERSAL SHOULD BE ALLOWED TO SUBMIT BIDS ON EACH OF THE TECHNICALLY ACCEPTABLE PROPOSALS FOR THE FOLLOWING REASONS:

1. THE LRFTP NO. 002-6920-1280 CONTAINS NO EXPRESS PROHIBITION AGAINST SUBMITTING MORE THAN ONE TECHNICAL PROPOSAL.

2. ONE OF THE OBJECTIVES IN THE FIRST STEP OF THE PROCUREMENT WAS TO ACQUIRE ALL POSSIBLE CONCEPTS WHICH COULD CONCEIVABLY IMPROVE MARGINAL WING PANELS FOR THE DESIRED TYPE OF TOW TARGET. ANY PROHIBITION AGAINST MULTIPLE TECHNICAL PROPOSALS COULD HAVE RESTRICTED THE INVENTIVENESS OF THE COMPANIES SOLICITED, THEREBY DEPRIVING THE GOVERNMENT OF ADVANCED TECHNICAL DEVELOPMENTS.

3. COMPANIES WHICH HAD MADE INQUIRY, INCLUDING YOUR FIRM, WERE ENCOURAGED TO SUBMIT MULTIPLE TECHNICAL PROPOSALS ADHERING TO THE REQUIREMENTS FOR DRAWING SPECIFICATIONS.

4. A SELECTION BY GOVERNMENT OFFICIALS OF THE MOST DESIRABLE OF THE TECHNICALLY ACCEPTABLE PROPOSAL SUBMITTED BY UNIVERSAL TARGET COMPANY, AND A REQUIREMENT THAT A PRICED BID BE MADE ONLY THEREON, COULD HAVE BEEN PREJUDICIAL TO THAT BIDDER AND TO THE INTERESTS OF THE GOVERNMENT.

5. SINCE AN AWARD ON THE IFB ISSUED IN THE SECOND STEP OF THE PROCUREMENT WOULD BE MADE TO THE LOWEST RESPONSIVE BIDDER, THE ISSUE OF PRODUCT ACCEPTABILITY HAVING BEEN RESOLVED IN THE FIRST STEP, UNIVERSAL TARGET COMPANY GAINED NO COMPETITIVE ADVANTAGE BY ESTABLISHING AND SUBMITTING A PRICE FOR EACH OF THE TECHNICALLY ACCEPTABLE PROPOSALS. THE POTENTIAL PROBLEM OF WHICH OF THE THREE PROPOSALS WOULD BE PROCURED WAS RESOLVED BY ELIMINATING FROM CONSIDERATION THE TWO HIGHEST BID PRICES. THE POSSIBILITY THAT UNIVERSAL TARGET COMPANY COULD MANIPULATE THE BIDDING TO ITS ADVANTAGE WAS HIGHLY REMOTE.

WE FIND THESE REASONS PERSUASIVE, AND IN THE ABSENCE OF A PROVISION IN THE IFB WHICH SPECIFICALLY PROHIBITS THE SUBMISSION OF MORE THAN ONE BID ON TECHNICALLY ACCEPTABLE PROPOSALS, WE CAN FIND NO BASIS FOR OBJECTION TO THE PROCEDURE EMPLOYED IN THE INSTANT CASE.

YOU URGE THAT JUST SUCH A PROHIBITORY PROVISION IS FOUND IN PARAGRAPH 1 (D) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, WHICH PROVIDES: "ALTERNATE BIDS WILL NOT BE CONSIDERED UNLESS AUTHORIZED BY THE INVITATION.' YOU SAY THAT UNIVERSAL HAS BEEN PERMITTED AN UNAUTHORIZED USE OF ALTERNATE BIDS IN THAT IT SUBMITTED THREE "ALTERNATE" BID PRICES.

AN ALTERNATE BID AS THAT TERM IS USED IN THE QUOTED PROVISION OF THE IFB IS A BID WHICH OFFERS PERFORMANCE NOT IN ACCORDANCE WITH THE SPECIFICATIONS. SEE 33 COMP. GEN. 499, 500-501, ESTABLISHING THE FOLLOWING PRINCIPLES IN REGARD TO ALTERNATE BIDS:

"AS COMMONLY UNDERSTOOD, THE PROHIBITION AGAINST "ALTERNATE" BIDS IN STANDARD FORM 33 FORBIDS CONSIDERATION OF BIDS WHICH OFFER SOMETHING OTHER THAN THAT WHICH IS CALLED FOR BY THE SPECIFICATIONS. IN THIS SENSE THE WORD "ALTERNATE" MEANS "ALTERNATIVE," THAT IS, OFFERING A CHOICE OF TWO OR MORE THINGS, ONE BEING THE THING ASKED FOR AND THE ALTERNATIVE BEING SOMETHING DIFFERENT. SO CONSIDERED, ANY BID WHICH OFFERS TO MEET THE REQUIREMENTS OF THE SPECIFICATIONS IS NOT AN ALTERNATIVE THERETO. THUS, IF A BIDDER MADE PROPOSALS TO FURNISH ANY ONE OF SEVERAL PROPRIETARY ITEMS IN THE ALTERNATIVE AT DIFFERENT PRICES, THOSE PROPOSALS WHICH OFFERED MATERIAL MEETING SPECIFICATION REQUIREMENTS WOULD ALL BE RESPONSIVE BIDS, THE LOWEST OF WHICH PROPERLY COULD BE ACCEPTED. ON THE OTHER HAND, IF ONE OR MORE OF THE PROPOSALS OFFERED MATERIAL WHICH DID NOT MEET SPECIFICATIONS, SUCH PROPOSALS WOULD BE "ALTERNATE" BIDS WITHIN THE MEANING OF THE PROHIBITION IN STANDARD FORM 33. OF COURSE, THE MAKING OF AN UNACCEPTABLE "ALTERNATE" BID DOES NOT PRECLUDE CONSIDERATION OF OTHER PROPOSALS SUBMITTED IN THE SAME BID WHICH CONFORM TO THE REQUIREMENTS OF THE SPECIFICATIONS, AND IT IS NOT MATERIAL WHETHER THE ACCEPTABLE PROPOSALS ARE DESIGNATED AS "ALTERNATE" BIDS OR NOT.'

IN THE INSTANT CASE EACH OF THE THREE BIDS SUBMITTED BY UNIVERSAL WAS IN ACCORDANCE WITH SPECIFICATIONS WHICH, ALTHOUGH DRAWN BY THE COMPANY, WERE APPROVED AS ACCEPTABLE BY THE AIR FORCE. THE BIDDING NOW UNDER REVIEW MIGHT BE SAID TO BE MORE AKIN TO "MULTIPLE" RATHER THAN ALTERNATE BIDDING. THIS OFFICE HAS HAD OCCASION TO CONSIDER THE QUESTION AS TO THE PROPRIETY OF A BIDDER SUBMITTING MORE THAN ONE BID IN THE ORDINARY ONE- STEP PROCUREMENT PROCEDURE. IN OUR DECISION 39 COMP. GEN. 892, 894, WE NOTED THAT THIS OFFICE HAS NOT ADHERED TO THE PROPOSITION THAT ALL MULTIPLE BIDDING IS PROHIBITIVE OR UNDESIRABLE. HOWEVER, WE OBSERVED THAT A CONTRACTING OFFICER WOULD BE JUSTIFIED IN REJECTING MORE THAN ONE BID SUBMITTED BY A PERSON OR BY TWO OR MORE AFFILIATED COMPANIES, WHERE SUCH BIDDING WAS RESORTED TO FOR THE PURPOSE OF CIRCUMVENTING THE REQUIREMENTS OF A STATUTE, OR WHERE AN UNFAIR ADVANTAGE MIGHT BE GAINED IN CASES OF AN AWARD THROUGH THE DRAWING OF LOTS, OR WHERE MULTIPLE BIDDING MIGHT OTHERWISE BE PREJUDICIAL TO THE UNITED STATES OR TO THE OTHER BIDDERS.

YOU HAVE NEITHER ESTABLISHED PRECISELY IN WHAT WAY YOU HAVE BEEN PREJUDICED OR PROVIDED ANY BASIS UPON WHICH THE CONTRACTING OFFICER COULD HAVE JUSTIFIABLY REJECTED THE BIDS OF UNIVERSAL. YOU IMPLY IN YOUR LETTER OF MARCH 26, 1962, THAT YOU MIGHT HAVE BEEN PREJUDICED IF, "FOR ANY IMAGINABLE REASON," THE AIR FORCE WOULD REVERSE ITS FINDINGS AND EVALUATIONS MADE DURING THE FIRST STEP OF THE PROCUREMENT, AND DECLARE THAT THE SPECIFICATIONS ON WHICH UNIVERSAL HAD SUBMITTED ITS LOWEST BID WERE NOT ACCEPTABLE. YOU SAY THAT IN SUCH A CASE, UNIVERSAL WOULD HAVE TWO CHANCES AT THE AWARD SINCE ONE OF ITS OTHER BIDS WAS THE SECOND LOWEST OF ALL BIDS RECEIVED. THE SIMPLE ANSWER TO THE HYPOTHETICAL CASE YOU PRESENT IS THAT IT IS NOT THE ACTUAL CASE BEFORE US. YOUR ARGUMENT WOULD REQUIRE THAT WE ASSUME THAT THE AIR FORCE DID NOT PROPERLY EVALUATE THE TECHNICAL PROPOSALS DURING THE FIRST STEP OF THE PROCUREMENT. NOTHING IN THE RECORD SUGGESTS THAT THIS HAS OCCURRED OR WILL OCCUR, AND THEREFORE WE CANNOT AGREE WITH YOUR ARGUMENT ON THIS POINT.

IN VIEW OF THE ABSENCE OF ANY EVIDENCE THAT YOU HAVE BEEN PREJUDICED, OR THAT THE BIDDING BY UNIVERSAL WAS RESORTED TO FOR THE PURPOSE OF CIRCUMVENTING THE REQUIREMENTS OF A STATUTE OR GAINING AN UNFAIR ADVANTAGE, WE FIND NO BASIS FOR THE CONCLUSION THAT THE THREE BIDS SUBMITTED BY UNIVERSAL, ALL OF WHICH WERE RESPONSIVE TO APPROVED SPECIFICATIONS, SHOULD HAVE BEEN REJECTED. ACCORDINGLY, YOUR PROTEST IS DENIED.