B-149670, SEP. 5, 1962

B-149670, SEP. 5, 1962

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER OF AUGUST 8, 1962, WITH ENCLOSURES, FROM THE BUREAU OF INDIAN AFFAIRS, BRANCH OF PROPERTY AND SUPPLY, REQUESTING OUR DECISION WHETHER AWARD OF A CONTRACT MAY BE MADE TO CATERPILLAR TRACTOR COMPANY ON ITS ALTERNATE BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. BIA-0650-234.

THE INVITATION SOUGHT BIDS ON THREE ITEMS OF ROAD EQUIPMENT. ITEM 1 CONSISTED OF THREE MOTOR GRADERS, ITEM 2 OF FOUR SCRAPERS, AND ITEM 3 OF ONE TRACTOR SHOVEL. BIDS WERE TO BE MADE ON ALTERNATE SUB-ITEMS UNDER EACH ITEM FOR DELIVERY F.O.B. ORIGIN AND F.O.B. DESTINATIONS NAMED. THE SPECIAL PROVISIONS MADE A PART OF THE INVITATION PROVIDE IN PERTINENT PART THAT--- "BIDS WILL BE CONSIDERED ON ANY OR ALL OF THE FOLLOWING ITEMS, BUT NO BID WILL BE CONSIDERED FOR ONLY A PART OF AN ITEM. * * * IF BIDDER OFFERS A REDUCTION FOR A COMBINATION OF ITEMS, HE SHALL STATE THE ITEMS TO WHICH REDUCTIONS ARE TO BE MADE * * *. AWARD WILL BE MADE ON AN "ITEM BY ITEM BASIS" FOR EACH ITEM, AS NUMBERED.'

IN RESPONSE TO THE SOLICITATION THE CATERPILLAR TRACTOR COMPANY QUOTED UNIT AND EXTENSION PRICES ON THE SUB-ITEMS UNDER ALL THREE ITEMS AND, IN ACCORDANCE WITH THE ABOVE-QUOTED PROVISIONS, OFFERED TO FURNISH ALL OF THE EQUIPMENT FOR $93,730.79, F.O.B. DESTINATIONS, "IF WE ARE AWARDED ITEMS 1, 2, AND 3 COMPLETE.' THE SAID LUMP-SUM OFFER FOR THE ENTIRE PROCUREMENT REPRESENTS A REDUCTION OF $11,006.45 FROM THE BIDDER'S SEPARATE F.O.B. DESTINATION QUOTATIONS, AND IS APPROXIMATELY $6,000 LESS THAN ANY OTHER COMBINATION OF OFFERS RECEIVED FROM THE REMAINING BIDDERS.

OBJECTIONS HAVE BEEN RAISED BY TWO OF THE REMAINING BIDDERS AGAINST THE ACCEPTANCE OF THE REDUCED OFFER FOR ALL ITEMS ON THE GROUNDS THAT SUCH ACTION IS PRECLUDED BY THE LEGEND "AWARD WILL BE MADE ON AN ITEM BY ITEM BASIS.' WE BELIEVE THAT SUCH POSITION IS UNTENABLE. CLEARLY, THAT LANGUAGE MUST BE READ WITH THE IMMEDIATELY PROCEEDING STIPULATION WHICH INVITED BIDS ON "ANY OR ALL OF THE FOLLOWING ITEMS" AND, IF A COMBINATION OFFER IS SUBMITTED "HE SHALL STATE THE ITEMS TO WHICH REDUCTIONS ARE TO BE MADE.' THE CATERPILLAR BID INDICATED THE ITEMS TO WHICH THE REDUCED AMOUNT APPLIED, NAMELY ITEMS 1 (B), 1 (C), 2 (B), 2 (C), AND 3 (B), SO THAT THE "ALL OR NONE" PRICE COULD BE READILY EVALUATED WITH ALL OTHER OFFERS OR COMBINATION OF OFFERS.

WE FEEL THAT THE LANGUAGE IN QUESTION WAS INTENDED TO PRECLUDE BIDS ON LESS THAN THREE MOTOR GRADERS (ITEM 1) OR FOUR SCRAPERS (ITEM 2). WOULD BE INCONGRUOUS TO CONSTRUE ITS MEANING AS PROHIBITING THE CLEAR AND UNAMBIGUOUS PROVISION AUTHORIZING, IN FACT INVITING, THE SUBMISSION OF COMBINATION OFFERS. ALSO, WE CONCLUDE THAT WHERE A "PACKAGE DISCOUNT," OR A DISCOUNT PRICE IS OFFERED ON AN "ALL OR NONE" BASIS A CONTRACTING OFFICER WOULD BE REMISS IN FAILING TO CONSIDER SUCH BID FOR EVALUATION PURPOSES, UNLESS THE INVITATION CLEARLY PROHIBITED SUCH BIDDING. CF. 39 C.G. 148. THE OBVIOUS PURPOSE OF THE PROVISION IS TO OBTAIN THE PRICE MOST ADVANTAGEOUS TO THE GOVERNMENT.

ACCORDINGLY, THE LUMP-SUM DESTINATION PRICE OFFERED BY THE CATERPILLAR TRACTOR COMPANY MAY BE CONSIDERED FOR AWARD. THE ENCLOSURES FORWARDED WITH THE BUREAU'S LETTER ARE RETURNED HEREWITH, AS ..END :