B-150197, NOV. 14, 1962

B-150197, NOV. 14, 1962

TO DIVISION LEAD COMPANY:

IN YOUR LETTER OF SEPTEMBER 24, 1962, YOU OBJECT TO THE ACTION OF THE DEPARTMENT OF THE NAVY IN AWARDING TO YOUR COMPANY AS THE LOWEST RESPONSIVE BIDDER CONTRACT NO. N163-10716 (X) FOR 477 LEAD SHEETS, RATHER THAN AWARDING THE 848 SHEETS DESIGNATED IN THE INVITATION FOR BIDS.

THE DEPARTMENT REPORTS THAT AFTER BID OPENING IT DETERMINED THAT GOVERNMENT NEEDS WERE LESS THAN ESTIMATED AT THE TIME THE INVITATION FOR BIDS WAS PREPARED. YOU CONTEND THAT NOTWITHSTANDING THIS DETERMINATION THE DEPARTMENT HAD NO RIGHT TO MAKE THE AWARD FOR A REDUCED QUANTITY WITHOUT YOUR CONSENT AND AN ADJUSTMENT FOR ADDITIONAL COSTS.

THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS CONTAINED ONLY ONE SENTENCE WHICH WAS SET OUT IN BOLD TYPE. THAT SENTENCE, CONTAINED IN CLAUSE 8 (C), PROVIDED:

"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.'

YOU CONTEND THAT NOTWITHSTANDING THIS CLAUSE THE INVITATION WAS MISLEADING BECAUSE A SECTION OF THE GENERAL PROVISIONS OF THE CONTRACT ENTITLED "VARIATION IN QUANTITY" PERMITTED THE CONTRACTOR TO INCREASE THE NUMBER OF UNITS DELIVERED, UNDER CERTAIN CONDITIONS, BUT PROHIBITED HIM FROM DECREASING THE UNITS "CALLED FOR BY THIS CONTRACT.' YOU APPARENTLY ASSUMED THAT IF THE CONTRACTOR COULD NOT DECREASE THE QUANTITY ACTUALLY AWARDED, THE GOVERNMENT COULD NOT DECREASE THE QUANTITY STATED IN THE INVITATION. THERE IS NO BASIS FOR THIS ASSUMPTION, SINCE THE CONTRACT SECTION ON VARIATION IN QUANTITY SURELY CANNOT BE CONSTRUED AS GRANTING PROSPECTIVE CONTRACTORS THE AUTHORITY TO RESTRICT THE OPTION EXPRESSLY AND CLEARLY RESERVED TO THE GOVERNMENT UNDER THE ABOVE-QUOTED SENTENCE OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, WHEREBY THE PROCURING ACTIVITY RETAINED THE UNAMBIGUOUS RIGHT TO AWARD A CONTRACT FOR A QUANTITY LESS THAN THAT BID UPON. THE LANGUAGE OF THAT SAME SENTENCE AFFORDED YOU AMPLE PROTECTION FROM RECEIVING A CONTRACT FOR A REDUCED NUMBER OF UNITS AT A PRICE ALLEGEDLY CALCULATED ON AN AWARD OF ALL UNITS, SINCE IT ALLOWED BIDDERS TO RESTRICT THE SCOPE OF THEIR OFFERS BY SO SPECIFYING ON THE INVITATION.

YOUR COMPANY DID NOT SPECIFY THAT ITS BID PRICE WAS ONLY APPLICABLE TO A MINIMUM QUANTITY. UNDER THESE CIRCUMSTANCES, YOU HAD NO LEGAL WARRANT TO LIMIT YOUR OFFER AFTER IT HAD BEEN ACCEPTED BY THE GOVERNMENT, AND THE GOVERNMENT HAD AN UNQUALIFIED CONTRACTUAL RIGHT TO MAKE AN AWARD OF A CONTRACT TO YOUR COMPANY FOR 477 LEAD SHEETS, AT THE UNIT PRICE YOU OFFERED. THEREFORE, THE DEPARTMENT OF THE NAVY WAS CORRECT IN ADVISING YOU THAT FAILURE TO PERFORM THE CONTRACT AS AWARDED WOULD HAVE BEEN A BREACH OF CONTRACT, AND YOU WOULD HAVE BEEN DECLARED IN DEFAULT.