B-162631, DEC. 28, 1967

B-162631, DEC. 28, 1967

BIDS - NONRESPONSIVE - ACCEPTANCE DECISION TO V.A. RE PROPRIETY OF CANCELING PURCHASE ORDER TO ANDERSON SURGICAL SUPPLY COMPANY ON BASIS OF NONRESPONSIVENESS. IN DECISION OCT. 30, 1967, IT WAS HELD THAT THERE WAS NO LEGAL BASIS FOR CANCELING ORDER FOR MISTAKE. WHERE ADMINISTRATIVE REPORT IN CONNECTION WITH CLAIM FOR MISTAKE DID NOT SHOW THAT THE BIDDER HAD TAKEN EXCEPTION TO THE TERMS OF THE INVITATION, THE MATTER WILL BE RECONSIDERED ON BASIS OF WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED. SINCE A BIDDER WHO AS SUPPLIER INDICATED IT WOULD SUPPLY THE BRAND NAME EQUIPMENT AND SINCE THE BRAND-NAME MANUFACTURER STATED IN ITS BID THAT IT WOULD FURNISH EQUIPMENT THAT DID NOT MEET PARTICULAR TEST STANDARDS SPECIFIED NEITHER THE BID OF THE MANUFACTURER OR THE SUPPLIER MAY BE CONSIDERED RESPONSIVE. THEREFORE, SINCE DELIVERY HAS NOT BEEN MADE, PURCHASE ORDER MAY BE CANCELED WITHOUT LIABILITY.

TO MR. DRIVER:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 11, 1967, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, SUBMITTED IN RESPONSE TO OUR LETTER OF NOVEMBER 29, 1967, REQUESTING A REPORT ON THE REQUEST OF THE ANDERSON SURGICAL SUPPLY COMPANY, TAMPA, FLORIDA, FOR RECONSIDERATION OF OUR DECISION OF OCTOBER 30, 1967, B 162631, TO YOU. WE HELD IN THAT DECISION THAT THERE WAS NO LEGAL BASIS FOR CANCELING PURCHASE ORDER NO. 1200 AWARDED TO ANDERSON EVEN THOUGH THE FIRM MADE AN ERROR IN ITS BID UPON WHICH THE PURCHASE ORDER IS BASED.

ANDERSON HAS ADVISED THAT IT IS UNABLE TO FURNISH THE EQUIPMENT COVERED BY THE PURCHASE ORDER BECAUSE OF ADVICE RECEIVED FROM ITS SUPPLIER, J.H. EMERSON COMPANY. IN A LETTER DATED NOVEMBER 17, 1967, EMERSON, A MANUFACTURER, ADVISED ANDERSON IT WAS UNABLE TO FURNISH VENTILATORS FOR DELIVERY UNDER THE PURCHASE ORDER WHICH WOULD COMPLY WITH THE SPECIFICATIONS FOR THAT ITEM AND THAT SUCH FACT WAS MADE KNOWN IN ITS BID TO THE HOSPITAL.

THE DECISION OF OCTOBER 30, 1967, WAS BASED ON THE FACTS THEN PRESENTED TO OUR OFFICE WHICH INDICATED THAT THE ACCEPTED BID OF ANDERSON WAS RESPONSIVE TO THE INVITATION FOR BIDS. HOWEVER, IT IS NOW REPORTED THAT THE BID OF ANDERSON WAS NONRESPONSIVE TO THE INVITATION AND SHOULD NOT HAVE BEEN ACCEPTED.

THE VETERANS ADMINISTRATION HOSPITAL AT GAINESVILLE, FLORIDA, BY SOLICITATION NO. 67-26, REQUESTED BIDS UNDER ITEM 19 COVERING FOUR VENTILATORS, MODEL 3-PV, POST OPERATIVE, WITH ACCESSORIES AND DEEPBREATHING ATTACHMENT, MODEL 3-V-DA,"AS MANUFACTURED BY J.H. EMERSON CO., " OR EQUAL. IN RESPONSE TO ITEM 19, ANDERSON OFFERED TO FURNISH A MODEL 3-PV POST OPERATIVE VENTILATOR WITH ACCESSORIES AND DEEPBREATHING ATTACHMENT, MODEL 3-V-DA, AS MANUFACTURED BY J.H. EMERSON COMPANY, CAMBRIDGE, MASSACHUSETTS, AT A UNIT PRICE OF $1,700. NO EXCEPTION TO THE SPECIFICATIONS WERE TAKEN BY ANDERSON IN ITS BID. THE LOW BID OF ANDERSON WAS ACCEPTED ON JUNE 15, 1967.

THE PRESENT RECORD INDICATES THAT EMERSON, THE MANUFACTURER OF THE EQUIPMENT WHICH ANDERSON OFFERED TO FURNISH, ALSO SUBMITTED A BID AND THAT EMERSON TOOK EXCEPTION TO CLAUSE 11 OF THE SUPPLEMENTAL TERMS AND CONDITIONS OF THE INVITATION FOR BIDS WHICH PROVIDED AS FOLLOWS:

"EQUIPMENT CERTIFICATION: BIDDER CERTIFIES THAT ALL ELECTRICAL COMPONENTS, AS APPLIED TO THE EQUIPMENT HE IS FURNISHING, COMPLIES WITH THE NATIONAL ELECTRICAL CODE, AND THAT THE EQUIPMENT CONFORMS TO THE PUBLISHED STANDARD, INCLUDING METHOD OF TEST OF THE UNDERWRITERS' LABORATORIES, INC.'

THE RECORD SHOWS THAT EMERSON DREW LINES THROUGH CLAUSE 11 OF THE SUPPLEMENTAL TERMS AND CONDITIONS OF THE INVITATION AND THAT IMMEDIATELY BELOW SUCH CLAUSE, IT INSERTED THE FOLLOWING STATEMENT:

"ELECTRICAL COMPONENTS APPROVED BY THE UNDERWRITERS LABORATORIES, INC. WILL BE USED, BUT THE COMPLETE VENTILATOR HAS NOT BEEN SUBMITTED AND IS NOT APPROVED.'

IT IS NOW REPORTED THAT THE ABSTRACT OF BIDS SUBMITTED WITH THE ORIGINAL CLAIM OF ERROR, WHICH WAS A PART OF THE RECORD UPON WHICH OUR DECISION OF OCTOBER 30, 1967, WAS BASED, DID NOT INDICATE THAT EMERSON HAD TAKEN SPECIFIC EXCEPTION TO CLAUSE 11 OF THE SUPPLEMENTAL TERMS AND CONDITIONS OF THE INVITATION.

THE QUESTION NOW FOR CONSIDERATION IS WHETHER UNDER THE CIRCUMSTANCES NOW REPORTED A VALID AND BINDING CONTRACT WAS CONSUMMATED UPON THE ACCEPTANCE OF ANDERSON'S BID. SINCE ANDERSON, A SUPPLIER, INDICATED IN ITS BID THAT IT WOULD SUPPLY THE BRAND-NAME EQUIPMENT MANUFACTURED BY EMERSON, AND SINCE EMERSON, THE MANUFACTURER, STATED IN ITS BID THAT THE EQUIPMENT IT INTENDED TO FURNISH WOULD NOT MEET THE REQUIREMENTS OF CLAUSE 11 OF THE INVITATION, IT SEEMS CLEAR THAT THE BID OF EMERSON, AS WELL AS THE BID OF ANDERSON, WAS NONRESPONSIVE AND THEREFORE NOT FOR CONSIDERATION IN MAKING AN AWARD.

THE PROCUREMENT IN QUESTION IS GOVERNED BY SECTION 303 (B) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 395, 41 U.S.C. 253 (B), WHICH PROVIDES IN PART THAT ,* * * AWARD SHALL BE MADE * * * TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED * * *.' THE QUOTED LANGUAGE REQUIRES THAT AN AWARD BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. IT IS ELEMENTARY THAT A PURPORTED AWARD OF A CONTRACT TO A NONRESPONSIVE BIDDER DOES NOT CREATE VALID OBLIGATIONS AND LIABILITIES BETWEEN THE PARTIES.

ACCORDINGLY, AND SINCE IT APPEARS THAT NO EQUIPMENT HAS BEEN DELIVERED TO THE GOVERNMENT, PURCHASE ORDER NO. 1200 SHOULD BE CANCELED WITHOUT LIABILITY TO ANDERSON.

THE FILE, WHICH WAS FORWARDED TO OUR OFFICE ON DECEMBER 4, 1967, IS RETURNED AS REQUESTED.