B-164712, AUG. 8, 1968

B-164712, AUG. 8, 1968

TO PELLEGRINI REFRIGERATION AND RESTAURANT EQUIPMENT COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 25, 1968, IN WHICH YOU PROTEST AN AWARD MADE TO NELSON-KENT, INCORPORATED, UNDER INVITATION FOR BIDS (IFB) NO. 68-90, WHICH WAS ISSUED BY THE SUPPLY DIVISION, VETERANS ADMINISTRATION HOSPITAL, SAN FRANCISCO, CALIFORNIA, ON MAY 29, 1968, FOR INSTALLATION OF REFRIGERATED COLD ROOMS AND WALK IN REFRIGERATOR.

PARAGRAPH 9 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDED AS FOLLOWS WITH RESPECT TO PROMPT PAYMENT DISCOUNTS OFFERED BY BIDDERS: "9. DISCOUNTS. (A) NOTWITHSTANDING THE FACT THAT A BLANK IS PROVIDED FOR A TEN (10) DAY DISCOUNT, PROMPT PAYMENT DISCOUNTS OFFERED FOR PAYMENT WITHIN LESS THAN TWENTY (20) CALENDAR DAYS WILL NOT BE CONSIDERED IN EVALUATING OFFERS FOR AWARD, UNLESS OTHERWISE SPECIFIED IN THE SPECIFICATION. HOWEVER, OFFERED DISCOUNTS OF LESS THAN 20 DAYS WILL BE TAKEN IF PAYMENT IS MADE WITHIN THE DISCOUNT PERIOD, EVEN THOUGH NOT CONSIDERED IN THE EVALUATION OF OFFERS.'

NOTWITHSTANDING THIS WARNING, YOU INSERTED "2" IN THE BLANK SPACE OF ITEM 16 ON THE FACE SHEET OF THE BID, WHICH PROVIDED FOR A 10-DAY DISCOUNT.

YOU CONTEND THAT PARAGRAPH 10 OF THE INSTRUCTIONS ALLOWING THE GOVERNMENT TO WAIVE MINOR INFORMALITIES AND MINOR IRREGULARITIES SHOULD PREVAIL INASMUCH AS ONE OF YOUR EMPLOYEES TYPED THE 2 PERCENT UNDER THE 10-DAY SPACE IN APPARENT ERROR AND THAT IF THE GOVERNMENT DID NOT INTEND TO ALLOW DISCOUNTS UNDER THE 10-DAY PROMPT PAYMENT PROVISION, THE SPACE SHOULD HAVE BEEN BLANKED OUT TO AVOID ERROR.

PARAGRAPHS 9 AND 10 OF THE SOLICITATION INSTRUCTIONS ARE IN ACCORD WITH THE FEDERAL PROCUREMENT REGULATIONS (FPR). FPR 1-2.407-3 (C) PROHIBITS EVALUATION OF PROMPT PAYMENT DISCOUNTS FOR TIME PERIODS LESS THAN THAT SPECIFIED IN THE INVITATION FOR BIDS. THIS PROVISION IS IN ACCORD WITH THE LONG-STANDING RULE OF COMPETITIVE BIDDING THAT BIDS MUST BE EVALUATED ON THE BASIS PRESCRIBED IN THE INVITATION. FPR 1 2.405 STATES THAT A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM AND NOT OF SUBSTANCE OR WHICH PERTAINS TO SOME IMMATERIAL OR INCONSEQUENTIAL DEFECT OR VARIATION OF A BID FROM THE EXACT REQUIREMENT OF THE INVITATION FOR BIDS, THE CORRECTION OR WAIVER OF WHICH WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. SINCE THE CONSIDERATION OF PAYMENT DISCOUNTS OF LESS THAN 20 DAYS WAS NOT OTHERWISE SPECIFIED IN THE INVITATION, ALL BIDDERS WERE ENTITLED TO RELY UPON PARAGRAPH 9 AND THE 10- DAY DISCOUNT YOU OFFERED COULD NOT BE CONSIDERED WITHOUT PREJUDICE TO THE OTHER BIDDERS; OTHERWISE, BIDDERS COULD NOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW SINCE THEY WOULD NOT KNOW THE PRECISE BASIS ON WHICH BIDS WOULD BE EVALUATED. 40 COMP. GEN. 160, AND B-162451, DECEMBER 19, 1967. CONSEQUENTLY, UNDER THE TERMS OF THE INVITATION FOR BIDS WE MUST CONCLUDE THAT THE BID OF NELSON-KENT INCORPORATED WAS PROPERLY DETERMINED THE LOWEST BID.

CONCERNING YOUR CONTENTION THAT THE PROVISION FOR THE 10-DAY DISCOUNT SHOULD HAVE BEEN BLANKED OUT TO AVOID ERROR, WE SEE NO REASON TO PRECLUDE BIDDERS FROM OFFERING A GREATER DISCOUNT FOR PAYMENT IN 10 DAYS THAN IN 20 OR 30 DAYS IF THEY CARE TO DO SO IN THE HOPE OF PAYMENT WITHIN 10 DAYS, EVEN THOUGH THIS CANNOT BE CONSIDERED IN BID EVALUATION. THE GOVERNMENT EXERCISES ALL RIGHTS TO DISCOUNT WHERE PAYMENT CAN BE MADE WITHIN THE PERIOD. HOWEVER, WE DO AGREE THAT IT WOULD BE PREFERABLE TO CALL BIDDERS' ATTENTION SPECIFICALLY TO PARAGRAPH 9 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS BY A FOOTNOTE TO THE 10-DAY DISCOUNT BLANK, AND WE HAVE SUGGESTED THIS TO THE VETERANS ADMINISTRATION.