B-156909, OCT. 15, 1965

B-156909, OCT. 15, 1965

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 10, 1965, AND ENCLOSURES, FROM THE DIRECTOR OF CONTRACTS, BUREAU OF SHIPS, FURNISHING A REPORT IN THE MATTER OF THE PROTEST MADE BY WINSLOW TELE TRONICS, INC., AGAINST AWARD OF A CONTRACT UNDER INVITATION FOR BIDS IFB-600-595-65-S. THE REPORT DISCUSSES THE FACTUAL SITUATION SURROUNDING THE AWARD AND RAISES SEVERAL QUESTIONS REGARDING INTERPRETATION OF THE BID SUBMITTED BY THE PROTESTANT.

THE INVITATION SOLICITED BIDS FOR THE FURNISHING UNDER ITEM 1 OF 205 AN/URM-26) (, RADIO FREQUENCY SIGNAL GENERATORS, VARIOUS ITEMS OF RELATED TECHNICAL DATA AND AN UNPRICED OPTION ITEM FOR ASSOCIATED REPAIR PARTS. IT WAS AN "ALL OR NOTHING" INVITATION RESTRICTED TO SMALL BUSINESS CONCERNS AS A RESULT OF A TOTAL (100 PERCENT) SET-ASIDE AND WAS ISSUED MARCH 31, WITH OPENING SET FOR MAY 5, 1965. THREE BIDS WERE RECEIVED WHICH, SHOWING THE TOTAL BID PRICES, EVALUATED FOR OFFERED DISCOUNTS, WERE AS FOLLOWS:

BIDDER TOTAL PRICE

CRESCENT COMMUNICATION

CORPORATION $ 96,253.65

WINSLOW TELE-TRONICS, INC. 97,375

TRAMPOL INDUSTRIES, LTD. 103,727.74

THE INVITATION INCLUDED A REQUIREMENT (PAGES 12-13) THAT PREPRODUCTION EQUIPMENT, DEFINED AS ONE EQUIPMENT UNDER ITEM 1 (AN/URM 26) ( SIGNAL GENERATOR), CONFORMING IN EVERY RESPECT TO THE SPECIFICATIONS FOR PRODUCTION EQUIPMENT AND MANUFACTURED WITH TOOLS, MATERIALS AND METHODS WHICH ARE THE SAME AS OR REPRESENTATIVE OF THOSE USED IN THE MANUFACTURE OF PRODUCTION EQUIPMENT, BE SUBMITTED BY THE CONTRACTOR FOR TESTING AND APPROVAL BY THE GOVERNMENT. THE APPROVED PREPRODUCTION EQUIPMENT WAS TO BE RETURNED TO THE CONTRACTOR FOR DELIVERY AS PRODUCTION EQUIPMENT PROVIDED THAT MODIFICATIONS REQUIRED BY ANY CONDITIONAL APPROVAL OR TO CORRECT ANY DAMAGE OR DETERIORATION HAS BEEN MADE.

THE INVITATION FURTHER PROVIDED (PAGE 9) FOR AUTOMATIC DELETION OF PREPRODUCTION REQUIREMENTS AND AN ACCELERATED DELIVERY SCHEDULE FOR PREVIOUS SUPPLIERS AS FOLLOWS:

"DELETION OF PREPRODUCTION REQUIREMENTS FOR PREVIOUS SUPPLIERS ONLY: THE CLAUSE OF THIS SCHEDULE ENTITLED "PREPRODUCTION EQUIPMENT" AND ALL OTHER REFERENCES TO PREPRODUCTION EQUIPMENT IN THIS INVITATION FOR BIDS, INCLUDING PROVISIONS FOR DELIVERY AND PREPARATION FOR DELIVERY OF PREPRODUCTION EQUIPMENT, SHALL NOT BE A PART OF ANY CONTRACT AWARDED PURSUANT TO THIS INVITATION FOR BIDS TO A BIDDER WHO HAS MANUFACTURED AND DELIVERED UNDER ANY CONTRACT ISSUED BY THE BUREAU OF SHIPS ONE OR MORE AN/URM-26 ( ( AS PREPRODUCTION AND/OR PRODUCTION EQUIPMENT WHICH, IN THE CASE OF PREPRODUCTION EQUIPMENT, HAS BEEN APPROVED OR CONDITIONALLY APPROVED BY THE GOVERNMENT PRIOR TO THE DATE OF OPENING OF THIS INVITATION FOR BIDS OR, IN THE CASE OF PRODUCTION EQUIPMENT, HAS BEEN ACCEPTED BY THE GOVERNMENT PRIOR TO SAID DATE OF OPENING. IN THE EVENT OF AWARD TO SUCH A BIDDER, BUT ONLY IN THAT EVENT, THE AWARD SHALL STATE IN SUBSTANCE THAT THE "PREPRODUCTION EQUIPMENT" CLAUSE AND ALL OTHER REFERENCES TO PREPRODUCTION EQUIPMENT ARE DELETED. EACH BIDDER WHO HAS MANUFACTURED AND DELIVERED AN/URM-26 ( ( AS ABOVE PROVIDED, BUT ONLY SUCH A BIDDER, SHOULD LIST THE MEMBER/S) OF THE CONTRACT OR CONTRACTS UNDER WHICH HE HAS DONE SO.

CONTRACT NUMBER/S)

WINSLOW FILLED IN THE BLANKS IN THE FOREGOING PROVISION WITH NUMBERS N600 (24) 60562 AND N600 (24-126) 63064, THE TWO CONTRACTS UNDER WHICH IT HAD PREVIOUSLY FURNISHED AN/URM-26 ( ( PRODUCTION EQUIPMENT WHICH HAD BEEN ACCEPTED. THE OTHER TWO BIDDERS, NOT BEING PREVIOUS SUPPLIERS, LEFT THESE SPACES BLANK.

THE PRICE OF ITEMS 3 THROUGH 8 OF THE INVITATION, CONSISTING OF TECHNICAL DATA AND REPORTS, IS INCLUDED IN THE PRICE OF THE EQUIPMENT UNDER ITEM 1. THE ESTIMATED AMOUNT FOR EACH OF THESE ITEMS IS SET FORTH BY THE BIDDERS AS PROVIDED FOR ON PAGES 10 AND 11 OF THE INVITATION AND DD FORM 1423 ATTACHED THERETO. SIMILARLY, THE INVITATION CALLED FOR THE AMOUNT INCLUDED IN THE PRICE OF ITEM 1 ON ACCOUNT OF (1) PACKAGING AND PACKING OF THE EQUIPMENT AND (2) THE PREPRODUCTION EQUIPMENT. AGAIN, ALL BIDDERS SUPPLIED THE INFORMATION. MORE SPECIFICALLY, CONCERNING PREPRODUCTION EQUIPMENT THE INVITATION PROVIDED:

"BIDDERS SHALL SUBMIT FOR INFORMATION PURPOSES ONLY, THE PRICE OF THE FOLLOWING ITEM INCLUDED IN THE PRICE OF ITEM 1:

"PREPRODUCTION EQUIPMENT $ --------------- "

WINSLOW INSERTED THE FIGURE OF $2,000 IN THIS BLANK SPACE.

THE ADMINISTRATIVE REPORT STATES THAT IT IS IMPOSSIBLE TO RECONCILE THE INCONSISTENCY BETWEEN WINSLOW'S BID ON THE BASIS, UNDER ITS CLEAR TERMS, OF DELETION OF PREPRODUCTION REQUIREMENTS AND ACCELERATION OF DELIVERIES FOR THE QUOTED PRICE OF $97,375 ON THE ONE HAND, AND THE AMOUNT OF $2,000 SHOWN AS BEING INCLUDED IN THE QUOTED PRICE ON ACCOUNT OF PREPRODUCTION EQUIPMENT ON THE OTHER HAND. THE REPORT ASKS WHETHER THE INTENDED BID IS TO BE INTERPRETED AS BEING IN THE AMOUNT OF $97,375 OR $95,375 AND WHETHER IT SHOULD BE CONSTRUED AS OFFERING DELIVERY BEGINNING 6 MONTHS OR 17 MONTHS AFTER AWARD.

IT IS THE STATED VIEW OF THE BUREAU OF SHIPS THAT, SINCE THE INVITATION PROVIDED FOR AUTOMATIC DELETION OF PREPRODUCTION REQUIREMENTS AND AN ACCELERATED DELIVERY SCHEDULE FOR PREVIOUS SUPPLIERS, THE BID OF WINSLOW, TO WHICH THE CLAUSE IS APPLICABLE, NECESSARILY EXCLUDED ANY AMOUNT ON ACCOUNT OF PREPRODUCTION REQUIREMENTS.

WE CANNOT AGREE. IN OUR VIEW THE SENSE OF THE ABOVE CLAUSE IS MERELY THAT ANY CONTRACT AWARDED A PREVIOUS SUPPLIER NECESSARILY WILL BE ON THE BASIS THAT PREPRODUCTION REQUIREMENTS ARE AUTOMATICALLY DELETED. THE BID ITSELF MUST BE CONSIDERED IN THE LIGHT IN WHICH IT CLEARLY WAS SUBMITTED. WE BELIEVE A PROPER INTERPRETATION OF THE WINSLOW BID IS THAT IT IS IN THE NET AMOUNT OF $95,375 AND IS FOR DELIVERY BEGINNING 6 MONTHS AFTER AWARD. CONSIDERING THAT ALL BIDDERS, INCLUDING PREVIOUS SUPPLIERS, WERE REQUESTED TO SHOW THE AMOUNT INCLUDED IN ITEM 1 FOR PREPRODUCTION EQUIPMENT, THIS INTERPRETATION SEEMS REASONABLE. IN VIEW OF THE GENERAL REQUIREMENT IN THE INVITATION WE CONSIDER IT WAS LOGICAL FOR WINSLOW TO HAVE INCLUDED PRICING INFORMATION WHICH SEEMINGLY WAS NECESSARY TO MAKE ITS BID RESPONSIVE. THUS INTERPRETED WINSLOW'S BID IS THE LOW BID AND THERE IS NO INJUSTICE TO OTHER BIDDERS.

ACCORDINGLY, THE SUM OF $2,000 SHOULD BE DEDUCTED FROM THE BID OF WINSLOW TELE-TRONICS, INC., IN EVALUATING ITS BID. THE PROTESTANT WILL BE ADVISED OF OUR CONCLUSION IN REPLY TO ITS PROTEST LETTER. THE ENCLOSURES SUBMITTED WITH THE REPORT OF SEPTEMBER 10, 1965, ARE RETURNED HEREWITH.