B-148449, MAY 15, 1962

B-148449, MAY 15, 1962

TO THE YALE AND TOWNE MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 16 AND APRIL 13, 1962, PROTESTING AWARD TO ANOTHER CONCERN BY THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA, UNDER A NEGOTIATED PROCUREMENT, REFERENCE MIPR-00023-2 -001123.

BIDS, TO BE OPENED FEBRUARY 27, 1962, WERE ORIGINALLY REQUESTED BY INVITATION NO. DSA-4-678-62, FOR DELIVERY OF ONE FORK-LIFT TRUCK TO THE CHARLESTON NAVAL SHIPYARD ON OR BEFORE APRIL 6, 1962, WITH NOTICE TO BIDDERS THAT TIME OF DELIVERY WAS AN IMPORTANT FACTOR AND WOULD BE CONSIDERED IN MAKING AWARD. BIDS WERE RECEIVED ONLY FROM YOUR COMPANY AND FROM AUTOMATIC TRANSPORTATION COMPANY, A DIVISION OF YOUR COMPANY. SINCE NEITHER BID WAS RESPONSIVE AS TO TIME OF DELIVERY, THE CONTRACTING OFFICER CANCELED THE INVITATION AND NEGOTIATED THE PROCUREMENT PURSUANT TO PARAGRAPH 3-210.2 (III) OF THE ARMED SERVICES PROCUREMENT REGULATION AND 10 U.S.C. 2304 (A) (10).

NEGOTIATION WAS CONDUCTED WITH THE TWO BIDDERS AND WITH CLARK EQUIPMENT COMPANY, WHOSE MODEL UTILITRUC-100 HAD BEEN INCLUDED IN THE "BRAND NAME OR EQUAL" DESCRIPTION OF THE ORIGINAL INVITATION, TOGETHER THE RECORD SHOWS THAT ON MARCH 5, 1962, MR. JOHN V. O-REILLY, PROCUREMENT AGENT, DEFENSE SUPPLY AGENCY, CONTACTED YOU AND EACH OF THE OTHER PROSPECTIVE SUPPLIERS BY TELEPHONE AND ADVISED THAT NO AWARD WOULD BE MADE UNDER INVITATION NO. DSA-4-678-62, AS THE BIDS WERE NONRESPONSIVE, THAT THE PROCUREMENT WAS BEING NEGOTIATED, AND THAT EACH BIDDER SHOULD FURNISH ITS BEST POSSIBLE PRICE AND DELIVERY, BUT NOT LATER THAN JUNE 15, 1962, SINCE IT HAD BEEN DETERMINED BY CONTACTING THE BUREAU OF SUPPLIES AND ACCOUNTS THAT DELIVERY ON OR BEFORE JUNE 15 WOULD BE ACCEPTABLE. YOU WERE REQUESTED TO FURNISH THIS INFORMATION AS SOON AS POSSIBLE BY TELEPHONE AND TO CONFIRM IT BY LETTER OR TELEGRAM.

YOUR TELEGRAM DATED MARCH 6, 1962, CONFIRMED YOUR ORIGINAL OFFER OF $10,646 F.O.B. ORIGIN, PHILADELPHIA, PENNSYLVANIA, AND $11,000 F.O.B. DESTINATION, CHARLESTON, SOUTH CAROLINA, SHIPMENT TO BE MADE THE WEEK OF MAY 21, 1962. AUTOMATIC QUOTED $10.533 F.O.B. ORIGIN,CHICAGO, ILLINOIS, AND $10,877 F.O.B. DESTINATION, COMPARED TO ITS ORIGINAL PRICES OF $12,038 AND $12,448, SHIPMENT TO BE MADE ON OR BEFORE JUNE 30, 1962, IF ORDERED BY MARCH 16, 1962. CLARK EQUIPMENT COMPANY QUOTED $10,411 F.O.B. ORIGIN, BATTLE CREEK, MICHIGAN, AND $10,656 F.O.B. DESTINATION, AND RECEIVED THE AWARD AS THE LOW BIDDER F.O.B. DESTINATION, WITH DELIVERY TO BE EFFECTED ON OR BEFORE JUNE 13, 1962.

YOU CONTEND THAT THE CONTRACTING OFFICER SHOULD HAVE DETERMINED WHETHER THE 30-DAY DELIVERY SCHEDULE COULD BE MET BEFORE ISSUING AN INVITATION AND THAT YOU WERE NOT GIVEN FULL INFORMATION RELATIVE TO THE NEGOTIATION IN THAT YOU WERE MERELY ASKED TO CONFIRM YOUR ORIGINAL PRICE AND DELIVERY TIME, AND WERE NOT ADVISED OF THE NEW DELIVERY DATE. YOU STATE FURTHER THAT THE CLARK EQUIPMENT COMPANY, WHICH DID NOT BID UNDER THE ORIGINAL INVITATION, HAD ONLY TO LOOK AT THE BID PRICES AND SUBMIT A LOWER BID IN ORDER TO RECEIVE THE AWARD.

THE ONLY WAY TO SECURE FULL COMPETITION AND DETERMINE DEFINITELY, BY A FIRM OFFER, WHETHER THE TRUCK COULD BE DELIVERED WITHIN THE TIME DESIRED, WAS TO ADVERTISE FOR BIDS. WHEN THIS FAILED TO PRODUCE A RESPONSIVE BID, THE CONTRACTING OFFICER REJECTED THE BIDS AND NEGOTIATED WITH THE THREE CONCERNS WHOSE PRODUCTS HAD BEEN DESCRIBED IN THE ORIGINAL INVITATION.

CONTRARY TO YOUR STATEMENT THAT YOU WERE NOT FULLY ADVISED, THE RECORD SHOWS, AS STATED ABOVE, THAT YOU WERE INFORMED OF THE NEW DELIVERY DATE AND WERE REQUESTED TO QUOTE YOUR BEST POSSIBLE PRICE, NOT MERELY TO CONFIRM YOUR PREVIOUS BID. IT IS TO BE NOTED THAT AUTOMATIC UNDERSTOOD THAT THE REQUEST WAS NOT FOR CONFIRMATION OF A PREVIOUS BID, SINCE IT REDUCED ITS ORIGINAL PRICES SUBSTANTIALLY.

WE RECOGNIZE THAT IT IS NOT DESIRABLE TO REJECT BIDS AFTER THEY HAVE BEEN OPENED AND THE PRICES HAVE BEEN DISCLOSED, AND THIS IS AVOIDED BY GOVERNMENT CONTRACTING OFFICERS WHENEVER POSSIBLE. HOWEVER, WHEN SUCH ACTION IS TAKEN--- AND THERE CAN BE NO QUESTION THAT REJECTION OF THE BIDS WAS PROPER IN THIS INSTANCE--- A NORMAL CONSEQUENCE OF READVERTISEMENT OR SUBSEQUENT NEGOTIATION IS SOME REDUCTION IN PRICES. IN SUCH CIRCUMSTANCES EACH BIDDER MUST DETERMINE WHETHER TO MAKE SUCH A REDUCTION AND THE EXTENT THEREOF. WHEN YOU WERE ADVISED THAT THE PROCUREMENT WOULD BE NEGOTIATED, YOU WERE ON NOTICE THAT THE NEGOTIATION MIGHT NOT BE RESTRICTED TO THE ORIGINAL BIDDERS AND THAT LOWER PRICES COULD BE EXPECTED. CLARK EQUIPMENT COMPANY DID NOT HAVE AN UNDUE ADVANTAGE AND DID NOT RECEIVE THE AWARD MERELY BY SUBMITTING A "LOWER" BID, AS STATED BY YOU, BUT BY SUBMITTING A BID THAT WAS LOWER THAN AUTOMATIC'S REDUCED PRICE AND ALSO MET THE DELIVERY REQUIREMENT.

FOR THE REASONS STATED WE CONCLUDE THAT THE CANCELLATION OF THE ORIGINAL INVITATION WAS PROPER AND THAT THERE IS NO LEGAL OBJECTION TO THE CONTRACT WITH CLARK EQUIPMENT COMPANY.