B-155432, DEC. 1, 1964

B-155432, DEC. 1, 1964

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 10, 1964, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, FORWARDING A REPORT ON THE PROTEST OF THE M. T. DAVIDSON COMPANY OF SUPERIOR, WISCONSIN, AGAINST AWARD TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. 600-884- 64, ISSUED APRIL 20, 1964, BY THE UNITED STACES NAVY PURCHASING OFFICE.

THE INVITATION SOLICITED BIDS TO FURNISH PUMPS OF VARIOUS SIZES AND MODELS IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-P-18472C (SHIPS) CLASS D-1. THE GOVERNMENT ESTIMATE OF THE PROCUREMENT COST WAS $97,250. THREE BIDS WERE RECEIVED AND OPENED ON MAY 21, 1964, AS SCHEDULED. DAVISON'S BID OF $85,539 WAS LOW. THE OTHER BIDS WERE FOR $107,590 AND $124,949.

IN VIEW OF THE WIDE DISPARITY BETWEEN THE LOW BID AND EACH OF THE OTHER BIDS AS WELL AS THE GOVERNMENT ESTIMATE, THE CONTRACTING OFFICER SUSPECTED AN ERROR IN THE LOW BID. ACCORDINGLY, DAVIDSON WAS REQUESTED TO VERIFY ITS BID AND ATTENTION WAS CALLED TO THE INCREASED STRINGENCY OF THE MILITARY SPECIFICATION OVER AND ABOVE PREVIOUS REQUIREMENTS, SPECIFICALLY THE REQUIREMENT FOR NEW AND MORE SEVERE SHOCK TESTS FOR EACH OF THE 13 DIFFERENT PUMP UNITS, A 100-HOUR PERFORMANCE TEST FOR EACH UNIT, AND MAINTENANCE OF A QUALITY CONTROL SYSTEM.

THE CONTRACTING OFFICER REPORTS THAT DAVIDSON REPLIED THAT ITS ESTIMATING DEPARTMENT HAD RECOGNIZED THE MORE STRINGENT REQUIREMENTS OF THE SPECIFICATIONS, BUT HAD INADVERTENTLY FAILED TO INCLUDE IN ITS ESTIMATE THE 100-HOUR PERFORMANCE TEST COSTS. AN AGGREGATE INCREASE OF $3,590 FOR SUCH COSTS WAS REQUESTED ON NINE OF THE ITEMS ONLY, IT BEING STATED THAT DAVIDSON WOULD ABSORB THE COSTS ON THE REMAINDER OF THE ITEMS BECAUSE OF EITHER THE QUANTITY INVOLVED OR DUPLICATION OF THE PUMPS ON OTHER ITEMS. DAVIDSON SUBMITTED NO WORKSHEETS TO SUPPORT ITS FIGURES, STATING THAT THE OMISSION OF THE TESTS COSTS IS NOT REFLECTED ON ITS WORKSHEETS.

ON THE BASIS THAT DAVISON HAD NOT CLEARLY ESTABLISHED THAT IT HAD SUBMITTED AN ERRONEOUS BID, THE CONTRACTING OFFICER RECOMMENDED, IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION 2-406.3 (A) (4), THAT THE BID BE CONSIDERED FOR AWARD IN THE ORIGINAL AMOUNT, FOR WHICH DAVIDSON IS WILLING TO PERFORM. THE BUREAU OF SUPPLIES AND ACCOUNTS, HOWEVER, ISSUED A DETERMINATION ON OCTOBER 16 THAT THE LOW BID SHOULD BE DISREGARDED ON THE BASIS THAT THE EVIDENCE, ALTHOUGH NOT CLEAR AS TO THE INTENDED BID, WAS CLEAR AND CONVINCING AS TO THE EXISTENCE OF A MISTAKE IN BID.

BY TELEGRAM DATED OCTOBER 20, DAVIDSON HAS PROTESTED THE BUREAU'S ACTION, STATING THAT, WHILE IT INDICATED TO THE CONTRACTING AGENCY, WHEN REQUESTED TO RECHECK ITS BID, THAT IT WOULD ACCEPT AN ADDITIONAL $3,600 FOR TESTS COSTS SHOULD THE NAVY DESIRE TO INCLUDE SUCH AMOUNT, IN NO CASE DID IT EVER INTEND TO AMEND, CHANGE, OR WITHDRAW ITS BID SINCE IT FELT THAT ITS BASIC COSTS WERE ADEQUATELY COVERED IN ITS ORIGINAL BID.

THE CONTRACTING OFFICER HAS SUBMITTED ADDITIONAL INFORMATION WITH A REQUEST DATED OCTOBER 27 FOR RECONSIDERATION OF THE BUREAU'S DETERMINATION THAT THE BID SHOULD BE DISREGARDED. THE ADDITIONAL INFORMATION INCLUDES AN INDEPENDENT ESTIMATE BY A TECHNICAL REPRESENTATIVE OF THE BUREAU OF SHIPS THAT THE TEST COST FOR EACH PUMP WOULD BE $200, OR A TOTAL OF $3,200 FOR THE 16 PUMP TYPES INVOLVED IN THE PROCUREMENT, WHICH COMPARES FAVORABLY WITH THE LOW BIDDER'S TEST COST ESTIMATE OF $3,590. ALSO, THERE HAS BEEN FURNISHED A TABULATION OF PRIOR SIMILAR PROCUREMENTS IN WHICH THE TEST COST ESTIMATES OF THE BUREAU OF SHIPS GREATLY EXCEEDED THE COSTS SET BY BOTH DAVIDSON AND THE SECOND LOW BIDDER. ACCORDINGLY, THE CONTRACTING OFFICER RECOMMENDS ACCEPTANCE OF THE LOW BID IN THE AMOUNT ORIGINALLY QUOTED, PURSUANT TO ASPR 2-406.3 (E) (2), AND IN ACCORDANCE WITH OUR RULING IN 42 COMP. GEN. 723. IN THAT DECISION WE HELD THAT, ALTHOUGH CORRECTION OF A LOW BID COULD NOT BE PERMITTED BECAUSE THE AMOUNT OF THE INTENDED BID WAS NOT ESTABLISHED WITH THE CERTAINTY REQUIRED BY THE RULES APPLICABLE TO CORRECTION OF MISTAKES IN BIDS, THE ACCEPTANCE OF SUCH A LOW BID WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS IF THE EVIDENCE CLEARLY INDICATED THAT THE BID WOULD HAVE BEEN LOWEST EVEN IF CORRECTED.

ASPR 2-406.3 (E) (2) PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS. * * *"

ON THE BASIS OF THE ADDITIONAL INFORMATION FURNISHED BY THE CONTRACTING OFFICER, AND PURSUANT TO THE AFOREMENTIONED RULING IN 42 COMP. GEN. 723, WE BELIEVE IT IS OBVIOUS THAT EVEN WITH THE ADDITION OF LIBERAL TESTING COSTS, THE DAVIDSON BID WOULD STILL BE LOWEST. THEREFORE, THE ACCEPTANCE OF THE LOW BID WOULD NOT BE PREJUDICIAL TO THE OTHER BIDDERS. SINCE THE BIDDER HAS NOT REQUESTED WITHDRAWAL OF ITS BID, HAS SUGGESTED CORRECTION THEREOF ONLY IN RESPONSE TO THE CONTRACTING OFFICER'S QUESTION, AND HAS SUBMITTED NO EVIDENCE IN SUPPORT OF ITS STATEMENT OF ERROR, WE CONCUR WITH THE RECOMMENDATION OF THE CONTRACTING OFFICER THAT THE BID AS SUBMITTED BE CONSIDERED FOR AWARD.

THE FILE FORWARDED BY THE BUREAU OF SUPPLIES AND ACCOUNTS IS RETURNED.