B-160479, APR. 5, 1967

B-160479, APR. 5, 1967

TO DEFENSE ELECTRONICS, INC.:

FURTHER REFERENCE IS MADE TO YOUR REQUEST THAT WE INVESTIGATE YOUR PROTEST AGAINST AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS (IFB) NO. (1) AMC/R/-29-040-66-580, ISSUED BY THE ARMY MATERIEL COMMAND, WHITE SANDS MISSILE RANGE (WSMR), NEW MEXICO.

THE INVITATION WAS ISSUED MARCH 11, 1966, AND REQUESTED BIDS FROM 50 PROSPECTIVE SUPPLIERS FOR FURNISHING 20 TELEMETRY RECEIVERS, TOGETHER WITH 11 ITEMS OF ACCESSORIES, IN ACCORDANCE WITH A DETAILED PURCHASE DESCRIPTION. THE BID OPENING WAS ORIGINALLY SCHEDULED FOR APRIL 11, 1966, BUT AMENDMENT NO. 1 TO THE IFB ISSUED APRIL 5, 1966, EXTENDED THE BID OPENING DATE TO APRIL 26, 1966. OF THE FOUR BIDS RECEIVED, YOURS ON A UNIT PRICE BASIS IN THE AGGREGATE AMOUNT OF $186,985 WAS LOWEST, AND VITRO ELECTRONICS' IN THE LUMP SUM AMOUNT OF $195,000 FOR THE LOT WAS SECOND LOW.

BY LETTERS DATED APRIL 29 AND MAY 4, 1966, TO THE PURCHASING OFFICE, VITRO CONTENDED THAT YOUR BID WAS NONRESPONSIVE FOR FAILURE TO MEET THE REQUIREMENT OF PARAGRAPH 10 (I) OF THE IFB, AS ADDED BY AMENDMENT NO. 1, THAT THERE BE FURNISHED A SWITCH SELECTABLE AFC "WHICH SHALL CORRECT FOR ALL FREQUENCY SHIFTS UP TO PLUS AND MINUS 0.006 PERCENT OF THE RECEIVED RF FREQUENCIES.' VITRO'S CONTENTION WAS BASED ON THE FACT THAT IN YOUR RESTATEMENT OF THE PURCHASE DESCRIPTION, WHICH WAS SUBMITTED AS PART OF YOUR BID, IN ACCORDANCE WITH THE INVITATION REQUIREMENT FOR DESCRIPTIVE LITERATURE TO ESTABLISH THAT THE ARTICLES OFFERED WOULD FULLY MEET ALL REQUIREMENTS, YOU USED THE FIGURE 0.005 PERCENT INSTEAD OF 0.006 PERCENT IN PARAGRAPH 10 (I). IT IS YOUR CONTENTION HOWEVER, THAT THIS WAS A TYPOGRAPHICAL ERROR AND THAT REFERENCE TO PAGE 1, PARAGRAPH 3 (SECOND LO MODES OF OPERATION) OF THE SALIENT SPECIFICATIONS OF YOUR MODEL TR-711 TELEMETRY RECEIVER, ALSO SUBMITTED AS A PART OF YOUR BID, SHOWS THAT YOUR PRODUCT EXCEEDS THE REQUIRED CORRECTION FIGURE. YOU THEREFORE REQUESTED THAT THIS VARIATION BE CORRECTED AS AN APPARENT CLERICAL MISTAKE.

THE INITIAL TECHNICAL EVALUATION OF BIDS WAS MADE ON MAY 9, 1966, BY THE TECHNICAL DIRECTOR, WSMR, WHO DETERMINED THAT THE TWO HIGHER BIDS WERE TECHNICALLY UNACCEPTABLE, BUT THAT YOUR BID AND THAT OF VITRO WERE TECHNICALLY ACCEPTABLE, PROVIDED IT WAS OFFICIALLY AGREED THAT CORRECTION COULD BE PERMITTED OF OBVIOUS ERRORS IN BOTH BIDS. HOWEVER, IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT CORRECTION COULD NOT BE PERMITTED, AND THAT ALL BIDS WERE THEREFORE NONRESPONSIVE. HE THEN ISSUED NOTICE OF REJECTION, AND ON JUNE 3, 1966, A REQUEST FOR PROPOSALS (RFP) WAS ISSUED TO THE FOUR BIDDERS WHO BID ON THE ORIGINAL IFB. AT THE SUGGESTION OF THE LEGAL OFFICE THIS ACTION WAS RESCINDED AND THE RFP WITHDRAWN. YOUR REQUEST FOR CORRECTION WAS THEN FORWARDED TO THE GENERAL COUNSEL, ARMY MATERIEL COMMAND (AMC), FOR CONSIDERATION UNDER SECTION 2- 406 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WHICH PERMITS CORRECTION OF MISTAKES UNDER THE CIRCUMSTANCES STATED THEREIN. IN A MEMORANDUM DATED SEPTEMBER 2, 1966, THE GENERAL COUNSEL, AMC, DETERMINED THAT THE DEVIATION IN YOUR BID AFFECTED THE QUALITY OF THE ITEM BEING FURNISHED AND WAS THEREFORE A MATERIAL DEVIATION WHICH MADE THE BID NONRESPONSIVE. AWARD WAS MADE TO VITRO ON OCTOBER 25, 1966.

WITH REFERENCE TO YOUR REQUEST FOR AN EXPLANATION OF THE BASIS FOR THE DISQUALIFICATION AND SUBSEQUENT REINSTATEMENT OF VITRO'S BID, YOU ARE ADVISED THAT THIS BID WAS QUESTIONED INITIALLY ON TWO BASES, (1) THAT A LOT PRICE WAS SUBMITTED, WITHOUT SHOWING UNIT PRICES, AND (2) THAT PARAGRAPH 7.0 (B) OF VITRO'S TRANSMITTAL LETTER OF APRIL 23, 1966, WAS "NOT IN COMPLIANCE WITH THE SPECIFICATIONS AS STATED IN IFB, PAGE 5, PARA. 7.B., LAST SENTENCE AND PAGE 6, PARA. 10.C. SENTENCE BEGINNING WITH THE WORDS," THE SECOND IF AMPLIFIER SHALL OPERATE * * *.'"

PARAGRAPH 1 (C) OF STANDARD FORM 33-A, BIDDING INSTRUCTIONS, TERMS, AND CONDITIONS (SUPPLY CONTRACT), WHICH IS INCORPORATED IN THE IFB, PROVIDES AS FOLLOWS:

"/C) UNIT PRICE FOR EACH UNIT BID ON SHALL BE SHOWN AND SUCH PRICE SHALL INCLUDE PACKING UNLESS OTHERWISE SPECIFIED. A TOTAL SHALL BE ENTERED IN THE AMOUNT COLUMN OF THE SCHEDULE FOR EACH ITEM BID ON. IN CASE OF DISCREPANCY BETWEEN A UNIT PRICE AND EXTENDED PRICE, THE UNIT PRICE WILL BE PRESUMED TO BE CORRECT, SUBJECT, HOWEVER, TO CORRECTION TO THE SAME EXTENT AND IN THE SAME MANNER AS ANY OTHER MISTAKE.' PARAGRAPH 8 (C) OF STANDARD FORM 33-A READS AS FOLLOWS:

"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATIONS. 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.' IT SEEMS CLEAR THAT THE QUOTED PROVISIONS CONTEMPLATE BIDS ON SEPARABLE ITEMS OF SUPPLIES, AS TO WHICH THE GOVERNMENT MIGHT MAKE A MORE FAVORABLE DEAL BY SPLITTING THE AWARD. HOWEVER, PARAGRAPH 8 (C) SPECIFICALLY RECOGNIZES THE RIGHT OF THE BIDDER TO QUALIFY HIS BID BY LIMITING THE GOVERNMENT'S RIGHT TO ACCEPT ANY ITEM OR GROUP OF ITEMS, AND THE EFFECT OF VITRO'S LOT PRICE BID WAS TO PLACE AN "ALL OR NONE" QUALIFICATION ON ITS BID. IN EXPLANATION OF ITS SUBMISSION OF A LOT BID VITRO POINTED OUT THAT THE EQUIPMENT IS SUCH THAT IT COULD NOT BE PROCURED FOR USE SEPARATELY. EVEN IN THE ABSENCE OF SUCH INTERDEPENDENCE, LOT BIDS MAY BE SUBMITTED UNLESS PROHIBITED BY THE IFB. AS STATED IN 37 COMP. GEN. 814, AT PAGE 816," "ALL OR NONE" BIDS INVOLVING DEFINITE QUANTITIES HAVE ALWAYS BEEN CONSIDERED RESPONSIVE BIDS UNLESS SPECIFICALLY PROHIBITED BY THE INVITATION. SEE 35 COMP. GEN. 383.' IN THE ABSENCE OF ANY STATED OR APPARENT JUSTIFICATION THEREFOR, WE DO NOT CONSTRUE THE REQUEST FOR UNIT PRICES AS CONSTITUTING SUCH A PROHIBITION, AND THE VITRO BID APPEARS TO HAVE BEEN FULLY RESPONSIVE IN THIS REGARD.

AS TO THE SECOND OBJECTION, PARAGRAPH 7.0 (B) OF VITRO'S LETTER OF APRIL 23, 1966, READS AS FOLLOWS:

"THE MODEL 1074A-4 RECEIVER PROVIDES AN OUTPUT TO OPERATE A COMMERCIALLY AVAILABLE SPECTRUM DISPLAY UNIT, AND ALSO OUTPUTS PRIOR AND AFTER LIMITING WITH A SOURCE IMPEDANCE OF 50 OHMS (PAGE 10 OF DATA SHEET). THE OUTPUTS ARE AT 30.00 AND 10.00 MC RESPECTIVELY.' THIS WAS FIRST CONSIDERED TO BE IN CONFLICT WITH THE FOLLOWING PROVISIONS OF THE SPECIFICATIONS:

"7.B. IF AMPLIFIER OUTPUTS: AN OUTPUT OF THE FIRST IF AMPLIFIER SHALL BE PROVIDED TO OPERATE INTO AND BE COMPATIBLE WITH A COMMERCIALLY AVAILABLE SPECTRUM DISPLAY UNIT. TWO OUTPUTS SHALL BE PROVIDED FROM THE SECOND IF AMPLIFIER, BOTH BEFORE AND AFTER THE LIMITER CIRCUITRY, FOR PREDETECTION RECORDING EACH WITH A SOURCE IMPEDANCE OF 50 OHMS NOMINAL.

"10.B. FIRST IF AMPLIFIER CHASSIS: THE BASIS RECEIVER SHALL HAVE A 30 MEGACYCLE FIRST IF AMPLIFIER. THE SECOND LOCAL OSCILLATOR SHALL, BY SWITCH SELECTION, BE TUNABLE OVER A RANGE OF PLUS AND MINUS 250KCWITHIN 0.001 PERCENT DEGREE CENTIGRADE AND BE CRYSTAL CONTROLLED TO WITHIN 0.005 PERCENT. THE RECEIVER SHALL INCLUDE AN AUTOMATIC FREQUENCY CONTROL.

"10.C. SECOND IF AMPLIFIER: THE SECOND IF AMPLIFIER SHALL OPERATE ON A CENTER FREQUENCY OF 10MC PLUS AND MINUS 5 PERCENT OF IF BANDWIDTH AND HAVE A 60DB/6DB BANDWIDTH RATIO OF 2.5:1. SECOND IF PLUG-IN BAND SELECTOR WITH 3DB BANDWIDTHS OF 100KC, 300KC, 500KC, 750KC, 1.0 MEGACYCLE, AND 1.5 MEGACYCLE AND 3.2 MC SHALL BE INCLUDED. THE SECOND IF AMPLIFIER SHALL PLUG INTO THE BASIC RECEIVER FROM THE FRONT AND ONCE INSTALLED, THE BANDWIDTH OF THE IF AMPLIFIER IN USE SHALL BE CLEARLY IDENTIFIED FROM THE FRONT OF THE RECEIVER.'

A REEVALUATION OF THE FOREGOING WAS MADE BY MR. JOHN D. PHELPS, ELECTRONIC ENGINEER (INSTRUMENTATION), INSTRUMENTATION DIVISION, LOGISTICS DIRECTORATE, U.S. ARMY TEST AND EVALUATION COMMAND, WHICH APPEARS TO JUSTIFY THE CONCLUSION THAT THERE WAS NO ERROR OR CONFLICT. ON PAGE 10 OF VITRO'S DATA SHEET THE OUTPUTS ARE LISTED AS FOLLOWS:

CHART

"PRE-D RECORDING OUTPUT-LIMITED: 10.0 MC **

PRE-D RECORDING OUTPUT-UNLIMITED: 10.0 MC **

1ST IF/SDU OUTPUT: 30.0 MC **"

THIS INDICATES THAT THE SPECTRUM DISPLAY UNIT OUTPUT IS 30.00 MC WHILE THE OUTPUTS PRIOR TO (UNLIMITED) AND AFTER LIMITING (LIMITED) ARE AT 10.0 MC. TO THE SAME EFFECT, AS POINTED OUT IN THE REEVALUATION, WITH REFERENCE TO PARAGRAPH 7.0 (B) OF VITRO'S LETTER OF APRIL 23, 1966,"IN THE SECOND SENTENCE, 30.00 REFERS TO THE OUTPUT OF THE SPECTRUM DISPLAY UNIT (NOTE LOCATION OF COMMA IN SENTENCE) WHILE 10.00 MC REFERS TO THE "OUTPUTS PRIOR (TO) AND AFTER LIMITING.'" WE AGREE WITH THE FINAL CONCLUSION THAT WHILE THE SENTENCE IN QUESTION MIGHT POSSIBLY BE CONFUSING, IT IS A GRAMMATICALLY CORRECT STATEMENT OF THE INTENDED MEANING AS SO INTERPRETED, AND IS THEREFORE TECHNICALLY IN ACCORD WITH THE SPECIFICATIONS, AS FURTHER BORNE OUT BY THE ABOVE QUOTED OUTPUTS FROM PAGE 10 OF VITRO'S DATA SHEET.

WITH RESPECT TO YOUR BID, PERTINENT SECTIONS OF ASPR ARE AS FOLLOWS:

"2-301 RESPONSIVENESS OF BIDS.

"/A) TO BE CONSIDERED FOR AWARD, A BID MUST COMPLY IN ALL MATERIAL RESPECTS WITH THE INVITATION FOR BIDS SO THAT, BOTH AS TO THE METHOD AND TIMELINESS OF SUBMISSION AND AS TO THE SUBSTANCE OF ANY RESULTING CONTRACT, ALL BIDDERS MAY STAND ON AN EQUAL FOOTING AND THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM MAY BE MAINTAINED.

"2-404.2 REJECTION OF INDIVIDUAL BIDS.

"/A) ANY BID WHICH FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION FOR BIDS SHALL BE REJECTED.

"/B) ANY BID WHICH DOES NOT CONFORM TO THE SPECIFICATIONS CONTAINED OR REFERENCED IN THE INVITATION FOR BIDS SHALL BE REJECTED UNLESS THE INVITATION AUTHORIZED THE SUBMISSION OF ALTERNATE BIDS AND THE SUPPLIES OFFERED AS ALTERNATES MEET THE REQUIREMENTS SPECIFIED IN THE INVITATION.

"2-405 MINOR INFORMALITIES OR IRREGULARITIES IN BIDS. A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS, HAVING NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, AND NO EFFECT ON QUALITY, QUANTITY, OR DELIVERY OF THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED, AND THE CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF, OR BE OTHERWISE PREJUDICIAL TO, BIDDERS. * * *"

"2-406.2 APPARENT CLERICAL MISTAKES. ANY CLERICAL MISTAKE APPARENT ON THE FACE OF A BID MAY BE CORRECTED BY THE CONTRACTING OFFICER PRIOR TO AWARD, IF THE CONTRACTING OFFICER HAS FIRST OBTAINED FROM THE BIDDER WRITTEN OR TELEGRAPHIC VERIFICATION OF THE BID ACTUALLY INTENDED. EXAMPLES OF SUCH APPARENT MISTAKES ARE: OBVIOUS ERROR IN PLACING DECIMAL POINT; OBVIOUS DISCOUNT ERRORS (FOR EXAMPLE--- 1 PERCENT 10 DAYS, 2 PERCENT 20 DAYS, 5 PERCENT 30 DAYS); OBVIOUS REVERSAL OF THE PRICE F.O.B. DESTINATION AND THE PRICE F.O.B. FACTORY; OBVIOUS ERROR IN DESIGNATION OF UNIT. CORRECTION OF THE BID WILL BE EFFECTED BY ATTACHING THE VERIFICATION TO THE ORIGINAL BID AND A COPY OF THE VERIFICATION TO THE DUPLICATE BID. CORRECTION WILL NOT BE MADE ON THE FACE OF THE BID; HOWEVER, IT SHALL BE REFLECTED IN THE AWARD DOCUMENT.'

AS INDICATED BY THE NATURE OF THE ABOVE EXAMPLES OF "APPARENT" CLERICAL MISTAKES, SUCH MISTAKES SHOULD BE OBVIOUS ON THE FACE OF THE BID WITHOUT REFERENCE TO ANY EXTRANEOUS SOURCE. THERE IS A CONFLICT BETWEEN YOUR OFFER, TO FURNISH A SWITCH SELECTABLE AFC WHICH WILL CORRECT FOR ALL FREQUENCY SHIFTS UP TO PLUS AND MINUS 0.005 PERCENT, AND THE SPECIFICATIONS FOR YOUR MODEL TR-711 TELEMETRY RECEIVER, WHICH ARMY TECHNICAL PERSONNEL HAVE FOUND TO EXCEED THE REQUIREMENT OF THE IFB FOR CORRECTION OF FREQUENCY SHIFTS WITHIN PLUS OR MINUS 0.006 PERCENT.

THE FIRST QUESTION FOR DETERMINATION IS WHETHER AN UNQUALIFIED ACCEPTANCE OF YOUR BID AS SUBMITTED WOULD OBLIGATE YOU TO FURNISH THE ITEMS BEING PROCURED IN STRICT ACCORDANCE WITH THE GOVERNMENT SPECIFICATIONS. IN VIEW OF THE AMBIGUITY CREATED BY THE ABOVE CONFLICT, AS TO WHICH IT CANNOT BE SAID THAT EITHER OF THE CONFLICTING PROVISIONS WAS AN OBVIOUS CLERICAL MISTAKE, THERE WOULD BE AT LEAST A SUBSTANTIAL BASIS FOR CONTENDING THAT YOU WERE NOT BOUND TO FURNISH ARTICLES EXCEEDING THE STATED CORRECTION PERCENTAGE OF .005. SEE 40 COMP. GEN. 393; ID. 432. AS STATED IN 42 COMP. GEN. 502, THE DETERMINING FACTOR IS NOT WHETHER THE BIDDER INTENDS TO BE BOUND, BUT WHETHER THIS INTENTION IS APPARENT FROM THE BID AS SUBMITTED, AND WE HAVE HELD THAT IT IS NOT PROPER TO CONSIDER THE REASON FOR THE NONRESPONSIVENESS OF THE BID, WHETHER DUE TO MISTAKE OR OTHERWISE. SEE B-134931, JANUARY 30, 1958.

IN YOUR LETTER OF JUNE 1, 1966, TO WSMR, YOU SUGGEST THAT THE WAIVER OF THE INVOLVED IRREGULARITY APPEARS TO BE COVERED BY PARAGRAPH 8 (B) OF STANDARD FORM 33-A, UNDER WHICH THE GOVERNMENT RESERVES THE RIGHT TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED. ALSO, IN YOUR TWX MESSAGE OF MAY 17, 1966, TO WSMR, YOU STATE THAT THE MISTAKE HAS NO EFFECT ON BID PRICE, DELIVERY OR PERFORMANCE. HOWEVER, AS PROVIDED IN ASPR 2- 405, QUOTED ABOVE, A DEFICIENCY MAY BE WAIVED OR CORRECTED ONLY IF IT HAS "NO" EFFECT ON QUALITY, AND IT IS CLEAR THAT PERFORMANCE LIMITED TO CORRECTION OF DEVIATIONS UP TO .005 PERCENT IS A MATERIAL DEFECT OF QUALITY WHERE THE REQUIRED CORRECTION IS UP TO .006 PERCENT. THE VARIANCE WAS THEREFORE CONSIDERED TO BE MATERIAL AND TO MAKE THE BID NONRESPONSIVE. 40 COMP. GEN. 432, SUPRA. A NONRESPONSIVE BID WITH CONFLICTING MATERIAL PROVISIONS MAY NOT BE EXPLAINED OR CORRECTED AFTER BID OPENING SO AS TO MAKE IT RESPONSIVE. 40 COMP. GEN. 393; 38 ID. 819.

WITH REFERENCE TO YOUR STATEMENT THAT IF YOU HAD BEEN UNABLE TO MEET THE SPECIFICATIONS YOU WOULD NOT HAVE BID AND THAT YOU WOULD NOT HAVE INTENTIONALLY INCLUDED A NONCONFORMING SPECIFICATION IN THE BELIEF THAT IT WOULD GO UNNOTICED, IT IS WELL RECOGNIZED THAT NONRESPONSIVE BIDS ARE GENERALLY THE RESULT OF INEXACTNESS IN THE PREPARATION OR SUBMISSION OF THE BID DOCUMENTS OR SOME OTHER INADVERTENCE WHICH IS WHOLLY UNINTENTIONAL. WHILE THE RESULTS ARE UNFORTUNATE FOR THE BIDDER AND FREQUENTLY COST THE GOVERNMENT MONEY, AS IN THIS CASE, BIDS MUST BE CONSIDERED AS SUBMITTED, AND THE STRICT MAINTENANCE OF COMPETITIVE BIDDING PROCEDURE, AS REQUIRED BY LAW, IS INFINITELY MORE IN THE PUBLIC INTEREST THAN OBTAINING A PECUNIARY ADVANTAGE IN A PARTICULAR CASE. 17 COMP. GEN. 554, 558.

FOR THE REASONS STATED WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE ACTIONS OF THE CONTRACTING OFFICER AND YOUR PROTEST MUST BE DENIED.