B-163050, MAR. 27, 1968

B-163050, MAR. 27, 1968

TO NATIONAL COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 15, 1967, WITH ENCLOSURES, AND MARCH 11, 1968, PROTESTING AGAINST THE AWARD OF A CONTRACT TO THE GENERAL INSTRUMENT CORPORATION, RADIO RECEPTOR DIVISION, UNDER INVITATION FOR BIDS NO. N00039-68-B-0067, ISSUED BY THE NAVAL ELECTRONIC SYSTEMS COMMAND (NAVELEX).

THE INVITATION WAS THE SECOND STEP OF A TWO-STEP ADVERTISED PROCUREMENT FOR A QUANTITY OF LF/VLF RADIO RECEIVERS, TOGETHER WITH TECHNICAL DOCUMENTATION AND SPARE PARTS. A TECHNICAL EVALUATION OF STEP I OF THE TWO-STEP PROCUREMENT RESULTED IN THE QUALIFICATION OF TWO OFFERORS, GENERAL INSTRUMENT AND YOUR COMPANY. THE SECOND-STEP INVITATION WAS ISSUED ON OCTOBER 25, 1967, TO YOUR COMPANY AND GENERAL INSTRUMENT WITH BID OPENING SET FOR NOVEMBER 21, 1967.

SECTION A OF THE INVITATION PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"SECTION A - SUPPLIES AND/OR SERVICES AND PRICES

"AWARD WILL BE MADE ONLY TO ONE OFFEROR * * * FOR THAT QUANTITY OF ITEM 1 TO BE AWARDED. OFFERS, THEREFORE, MUST BE ON THE BASIS OF FURNISHING * * * AND (III) AT LEAST THE LOWEST QUANTITY OF ITEM 1 SET FORTH BELOW. OFFERORS SHOULD QUOTE UNIT PRICES FOR EACH OF THE QUANTITIES LISTED UNDER ITEM 1 AND ARE ADVISED THAT IF AWARD IS MADE FOR A QUANTITY OF ITEM 1 FOR WHICH AN OFFEROR HAS NOT QUOTED PRICES, AWARD CANNOT BE MADE TO THAT OFFEROR. THE GOVERNMENT MAY MAKE AWARD FOR EITHER A LISTED QUANTITY OR A QUANTITY INTERMEDIATE BETWEEN TWO LISTED QUANTITIES UNDER ITEM 1. IF SUCH INTERMEDIATE QUANTITY IS AWARDED THE UNIT PRICE SHALL, UNLESS THE OFFEROR SPECIFIES A DIFFERENT PRICE OR FORMULA, BE DETERMINED BY THE FOLLOWING FORMULA:

"SUPPLIES AND SERVICES

"1. LF/VLF RADIO RECEIVER EACH COMPLETE WITH TWO (2) EACH TECHNICAL MANUALS, ONE (1) EACH MAINTENANCE STANDARD BOOKS, AND ONE (1) EACH OVERHAUL AND REPAIR INSTRUCTION MANUAL.

"QUANTITY UNIT UNIT PRICE AMOUNT

71 EACH

78 EACH"

YOUR COMPANY WAS THE LOWEST BIDDER FOR 71 UNITS, AND GENERAL INSTRUMENT WAS LOWEST BIDDER FOR THE QUANTITY OF 78 UNITS, THE BIDS DISCLOSED AT BID OPENING BEING AS FOLLOWS:

NATIONAL COMPANY

QUANTITY UNIT UNIT PRICE AMOUNT

71 EACH $13,880 $ 985,480

78EACH $13,352 $1,041,456

GENERAL INSTRUMENT

QUANTITY UNIT UNIT PRICE AMOUNT

71 EACH $13,933 $ 989,243

78 EACH $13,227 $1,031,706

AWARD WAS MADE ON JANUARY 4, 1968, TO GENERAL INSTRUMENT FOR 78 UNITS AS THE LOWEST BIDDER UNDER THE INVITATION. WE FIND NO BASIS TO QUESTION THE PROPRIETY OF THIS AWARD.

YOUR PROTEST AGAINST THE AWARD IS BASED UPON THE CONTENTION THAT THE ONLY MANDATORY FIRM REQUIREMENT SET FORTH IN THE INVITATION FOR EVALUATION WAS THE QUANTITY OF 71 UNITS. IN THIS REGARD, YOU POINT OUT THAT 71 UNITS WAS THE QUANTITY SPECIFIED IN STEP I AND IN THE SYNOPSIS IN TWO ISSUES OF THE "COMMERCE BUSINESS DAILY.' IN VIEW THEREOF, YOU BELIEVE THAT THE RESPONSIVENESS OF BIDS WAS DETERMINED BY THE RESPONSES TO THE 71 UNITS, AND THAT "BASED ON THE WORDING OF THE IFB, THAT THE PRICES SOUGHT FOR QUANTITY 78 AND THE FORMULA SET FORTH FOR ESTABLISHING PRICES FOR INTERMEDIATE QUANTITIES WAS MERELY TO PERMIT THE NAVY TO PROCURE ADDITIONAL UNITS IF THEIR AVAILABLE FUNDS PERMITTED, FROM THE LOW BIDDER.'

YOUR LETTER OF MARCH 11, 1968, GENERALLY RESTATES THE CONTENTIONS MADE IN YOUR PREVIOUS LETTER AND, IN ADDITION, CRITICIZES THE AWARD MADE TO GENERAL INSTRUMENT ON JANUARY 4, 1968, PURSUANT TO THE REQUIREMENTS OF ASPR 2-407.9 (2) IN VIEW OF THE URGENCY OF THE PROCUREMENT. YOU STATE THAT THE AWARD BASED ON URGENCY BEFORE OUR DETERMINATION OF YOUR PROTEST SEEMS TO BE AN IMPROPER USE OF THE TWO STEP FORMAL ADVERTISING PROCEDURES.

WITH RESPECT TO THE FACT THAT THE AWARD OF THE LOWEST BIDDER WAS MADE WITHOUT AWAITING OUR DECISION ON YOUR PROTEST, SUCH ACTION IS AUTHORIZED AND WAS TAKEN ONLY AFTER APPROVAL AT AN APPROPRIATE LEVEL ABOVE THAT OF THE CONTRACTING OFFICER IN ACCORDANCE WITH DEPARTMENTAL PROCEDURES, PURSUANT TO ASPR 2-407.9 (B) (3). UNDER THE TWO-STEP FORMAL ADVERTISING PROCEDURES PRESCRIBED BY PART 5, SECTION 2, ASPR, AWARD OF A CONTRACT PROPERLY MAY BE MADE NOTWITHSTANDING A PROTEST AGAINST AN AWARD TO THE APPARENT LOW BIDDER, ESPECIALLY WHERE THE URGENCY OF THE PROCUREMENT IS JUSTIFIED AND APPROPRIATE NOTICE OF AWARD ACTION IS GIVEN TO OUR OFFICE. THE RECORD BEFORE US ESTABLISHES THAT PROPER PROCEDURES WERE FOLLOWED IN THIS REGARD.

RELATIVE TO YOUR CONTENTION THAT THE FIRM QUANTITY OF 71 WAS SPECIFIED IN BOTH STEP I AND IN THE "COMMERCE BUSINESS DAILY," YOU ARE ADVISED THAT THE FIRST STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT IS CONCERNED WITH THE SUBMISSION OF UNPRICED TECHNICAL PROPOSALS TO DETERMINE WHETHER THE BIDDER HAS THE ABILITY AND CAPACITY TO MEET THE GOVERNMENT'S REQUIREMENTS. GENERALLY, BIDDERS ARE ADVISED IN THE FIRST STEP OF THE GOVERNMENT'S QUANTITY AND DELIVERY REQUIREMENTS AS A MATTER OF INFORMATION. SINCE THE FIRST STEP IS CONCERNED WITH TECHNICAL QUALIFICATIONS, SUCH INFORMATION DOES NOT REPRESENT A FIRM ADVERTISEMENT OF THE GOVERNMENT'S NEEDS. THESE NEEDS, UNDER THE ASPR PROVISIONS, ARE LEFT FOR INCORPORATION INTO THE SECOND-STEP ADVERTISEMENT WHEREUNDER THE RESPONSIVENESS AND RELATIVE STANDING OF BIDDERS PRICE-WISE IS DETERMINED AFTER RECEIPT OF SEALED BIDS FROM ELIGIBLE BIDDERS.

THE INVITATION SPECIFICALLY PROVIDED THAT BIDDERS SHOULD QUOTE UNIT PRICES FOR EACH OF THE QUANTITIES LISTED UNDER ITEM 1, THAT IS, 71 UNITS AND 78 UNITS. IT FURTHER PROVIDED THAT AWARD COULD BE MADE FOR EITHER OF THOSE QUANTITIES OR FOR AN INTERMEDIATE QUANTITY AND PRESCRIBED THE BASIS FOR DETERMINING THE INTERMEDIATE UNIT PRICES. FURTHER, THE ONLY MEANING THAT MAY BE ATTRIBUTED TO THE REQUIREMENT THAT OFFERS MUST BE ON THE BASIS OF FURNISHING "/III) AT LEAST THE LOWEST QUANTITY OF ITEM 1 SET FORTH BELOW" WAS THAT 71 UNITS REPRESENTED THE MINIMUM QUANTITY THAT WOULD BE AWARDED, AND IT WOULD HAVE BEEN UNREASONABLE TO INTERPRET THAT PROVISION AS MEANING A BID ON 71 UNITS ONLY WAS REQUIRED SINCE A BID FOR 78 UNITS WAS ALSO EXPRESSLY REQUESTED.

WE ARE ADVISED THAT NAVELEX HAD A FIRM REQUIREMENT AT THE TIME BIDS WERE OPENED FOR 78 UNITS OF ITEM 1 FOR WHICH FUNDS WERE THEN AVAILABLE. IT WAS THUS DETERMINED THAT AWARD SHOULD BE MADE FOR THE 78 LF/VLF RADIO RECEIVERS. PROVISION FOR BIDDING ON ALTERNATE QUANTITIES AND A DETERMINATION BY THE GOVERNMENT AFTER BID OPENING OF WHICH ALTERNATE TO AWARD IS NOT IMPROPER. SEE 45 COMP. GEN. 651, 653. THE RULES OF COMPETITIVE BIDDING REQUIRE THAT ALL BIDDERS BID ON AN EQUAL BASIS. ONE OF THE REQUIREMENTS FOR EQUAL BASIS BIDDING IS THAT BIDDERS KNOW IN ADVANCE THE BASIS ON WHICH THEIR BIDS WILL BE EVALUATED. 36 COMP. GEN. 380, 385; 41 ID. 76, 81. IN THE PRESENT CASE, SECTION A OF THE INVITATION PROVIDED THE BASIS ON WHICH THE AWARD WAS TO BE MADE AND ITEM 1 CLEARLY REQUIRED BID PRICES ON EACH OF THE TWO QUANTITIES, AND CONTEMPLATED AN AWARD ON THAT QUANTITY MEETING THE GOVERNMENT'S NEEDS. WE THEREFORE BELIEVE THAT THE METHOD OF BID EVALUATION AND AWARD WERE IN ACCORDANCE WITH THE TERMS OF THE INVITATION AND THE PROVISIONS OF 10 U.S.C. 2305 (C). WE HAVE CONSIDERED THE OTHER VIEWS ADVANCED BY YOU BUT WE FIND NO LEGAL BASIS TO DISTURB THE AWARD.