B-164868, NOVEMBER 22, 1968, 48 COMP. GEN. 357

B-164868, NOVEMBER 22, 1968, 48 COMP. GEN. 357

CONTRACTS - SPECIFICATIONS - DEVIATIONS - DELIVERY PROVISIONS - TWO-STEP PROCUREMENT THE FAILURE OF THE LOW BIDDER TO FURNISH GUARANTEED MAXIMUM WEIGHT AND MAXIMUM DIMENSIONS FOR SHIPPING CONTAINERS REQUIRED UNDER THE SECOND-STEP OF A TWO-STEP MULTI-YEAR PROCUREMENT FOR TRANSCEIVERS TO BE DELIVERED F.O.B. ORIGIN IS A DEVIATION THAT IS DISTINGUISHABLE FROM THE TYPE OF BID IRREGULARITY COVERED BY THE "TRIVIALITY" OR "DE MINIMUM" RULE, AND THE OMISSION DID NOT RENDER THE BID NON-RESPONSIVE WHERE THE MAXIMUM SHIPPING COST WAS ASCERTAINABLE FROM OTHER INFORMATION CONTAINED IN THE INVITATION- -- THE SIZE AND WEIGHT OF THE TRANSCEIVER-- THERE IS NO QUESTION AS TO THE BIDDER'S UNDERTAKING TO MEET ALL THE REQUIREMENTS OF THE SPECIFICATIONS, INCLUDING DELIVERY, AND THAT ON THE BASIS OF POSSIBLE TRANSPORTATION COSTS, THE LOW BIDDER HAD OFFERED THE MOST ADVANTAGEOUS BID TO THE GOVERNMENT.

TO THE NATIONAL RADIO COMPANY, INC., NOVEMBER 22, 1968:

REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 16, 1968, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT ON JULY 12, 1968, FOR 850 TRANSCEIVERS VHF (FM) TO COSMOS INDUSTRIES, INC., UNDER INVITATION FOR BIDS (IFB) NO. N00039-68-B-1003 (S), ISSUED BY THE NAVAL ELECTRONIC SYSTEMS COMMAND. THE SUBJECT PROCUREMENT SOLICITED BIDS ON A TWO-STEP MULTI-YEAR BASIS PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 2-501. NAME ACCEPTABLE PROPOSALS WERE RECEIVED UNDER STEP 1. STEP 2 SOLICITED BIDS ON THE BASIS OF DELIVERY F.O.B. ORIGIN FROM THE FIRMS WHO HAD SUBMITTED ACCEPTABLE PROPOSALS.

THE FOLLOWING BIDS WERE RECEIVED AND OPENED ON MAY 22, 1968:

(SINGLE YEAR) (MULTI-YEAR)

TOTAL ALTERNATE TOTAL ALTERNATE

BIDDER "A" "B"

------ --------------- --------------- COSMOS INDUSTRIES, INC.

$592,010.00$1,547,990.00 NATIONAL RADIO CO., INC. 830,643.00 2,067,275.00 GENERAL DYNAMICS CORP. 853,895.00 2,139,423.50 R.F. COMMUNICATIONS, INC. 1,091,933.00 2,849,033.00 FAIRCHILD CAMERA AND INSTRUMENT

CORP. 1,156,414.00 AVION ELECTRONICS, INC. 1,619,666.00

4,451,556.00 DEFENSE ELECTRONICS, INC. 1,672,767.99 3,728,691.59

WITH REGARD TO EVALUATION OF BIDS, THE INVITATION CONTAINED THE FOLLOWING PROVISION CONCERNING SHIPPING INFORMATION: GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE). EACH OFFER WILL BE EVALUATED TO THE DESTINATION SPECIFIED BY ADDING TO THE F.O.B. ORIGIN PRICE ALL TRANSPORTATION COSTS TO SAID DESTINATION. THE GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) ARE REQUIRED FOR DETERMINATION OF TRANSPORTATION COSTS. OFFEROR MUST STATE THE WEIGHTS (AND DIMENSIONS IF APPLICABLE) IN HIS OFFER OR IT WILL BE REJECTED. IF DELIVERED ITEMS EXCEED THE GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE), THE OFFEROR AGREES THAT THE CONTRACT PRICE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE TRANSPORTATION COSTS COMPUTED FOR EVALUATION PURPOSES BASED ON OFFEROR'S GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) AND THE TRANSPORTATION COSTS THAT SHOULD HAVE BEEN USED FOR OFFER EVALUATION PURPOSES BASED ON CORRECT SHIPPING DATA. (THE GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) WHICH ARE REQUIRED BY THE FOREGOING PROVISION SHALL BE STATED BY THE OFFEROR IN THE SPACE PROVIDED ON THE TRANSPORTATION DATA SHEET WHICH IS ATTACHED HERETO.) FOR THE PURPOSE OF EVALUATING OFFERS AND FOR NO OTHER PURPOSE, THE FINAL DESTINATION FOR THE SUPPLIES WILL BE CONSIDERED TO BE AS FOLLOWS: ---- -------- ---------- ITEM QUANTITY DESTINATION 1 (IF OPTION IS EXERCISED) 60 NSC, OAKLAND, CALIFORNIA

PERCENT ITEM 4 40 NSC, NORFOLK, VIRGINIA

PERCENT

COSMOS FURNISHED NEITHER MAXIMUM WEIGHT NOR MAXIMUM DIMENSIONS OF THE SHIPPING CONTAINERS ALTHOUGH SUCH DATA WAS SPECIFICALLY REQUESTED TO BE INSERTED ON THE TRANSPORTATION DATA SHEET. INSTEAD THE COMPANY WROTE IN THE LETTERS "UNK" IN THE BLANK REQUESTING MAXIMUM WEIGHT AND "N.A.' (PRESUMABLY MEANING EITHER "NOT APPLICABLE" OR "NOT AVAILABLE") AFTER THE BLANK REQUESTING MAXIMUM DIMENSIONS OF THE SHIPPING CONTAINER. AWARD WAS MADE TO COSMOS, HOWEVER, ON THE BASIS OF A DETERMINATION BY THE PROCURING AGENCY THAT THE HIGHEST POSSIBLE SHIPPING COSTS OF THE SUPPLIES WOULD NOT EXCEED A FIGURE OF $6,363.14.

YOU MAINTAIN THAT THE OMISSION OF THE GUARANTEED SHIPPING DATA FROM COSMOS' BID WAS A WILLFUL DEVIATION FROM THE INVITATION, WHICH COULD NOT BE WAIVED AS A TRIVIAL DEFECT AND THEREFORE RENDERED THE BID NONRESPONSIVE, CITING DECISIONS OF OUR OFFICE IN 38 COMP. GEN. 819; 47 COMP. GEN. 496 AND B-159725, DECEMBER 23, 1966. YOU AVER THAT THE TRIVIALITY TEST STIPULATED IN B-159725 DOES NOT PERMIT CORRECTION OF THIS DEVIATION SINCE THE MONETARY AMOUNT OF THE DEFICIENCY INVOLVED HERE EXCEEDS $1,000. THIS TEST IS QUOTED AS FOLLOWS:

IT IS CLEAR FROM THE ABOVE SUMMARY THAT WE HAVE NEVER APPROVED WAIVER IN SUCH CIRCUMSTANCES AS ARE HERE PRESENT WHERE THE MAXIMUM POSSIBLE AMOUNT OF DEVIATION WAS AS MUCH AS $200.00. EXAMINATION OF THE COURT CASES COLLECTED IN 12 WORDS AND PHRASES UNDER THE HEADINGS "DE MINIMIS" AND "DE MINIMIS NON CURAT LEX" INDICATES THAT WHERE DOLLAR AMOUNTS ARE INVOLVED THE DE MINIMIS DOCTRINE HAS GENERALLY BEEN APPLIED ONLY WITH REFERENCE TO AMOUNTS OF THE SAME ORDER OF MAGNITUDE- - THAT IS, UNDER ONE OR TWO HUNDRED DOLLARS.

WHILE IN SEVERAL OF OUR DECISIONS REFERENCE HAS BEEN MADE TO THE TOTAL OR OVERALL COST OF THE WORK INVOLVED AS A FACTOR TO BE CONSIDERED IN DETERMINING WHETHER THE POSSIBLE COST EFFECT OF AN UNACKNOWLEDGED ADDENDUM WAS SO TRIVIAL AS TO JUSTIFY WAIVER, WE BELIEVE THAT THE PROPER EFFECT OF THAT CRITERION SHOULD BE TO LIMIT RATHER THAN TO ENLARGE THE APPLICATION OF THE DE MINIMIS RULE. IN OTHER WORDS, WHILE AN AMOUNT IN THE VICINITY OF $100.00 MIGHT APPEAR TO BE TRIVIAL IN ITSELF, IF IN FACT IT WAS A FAIRLY SUBSTANTIAL PART OF THE TOTAL COST, OR MORE THAN AN INSIGNIFICANT PART OF THE DIFFERENCE BETWEEN THE DEFECTIVE BID AND THE NEXT AVAILABLE BID, IT COULD NOT PROPERLY BE CONSIDERED AS JUSTIFYING A WAIVER OF THE DEFECT. ON THE OTHER HAND, WE WOULD NOT BE INCLINED IN THE ORDINARY CASE TO CONSIDER A POSSIBLE DEVIATION OF $1,000.00 OR MORE AS TRIVIAL OR INSIGNIFICANT IN THE AREA UNDER CONSIDERATION, NO MATTER HOW SMALL A FRACTION OF THE TOTAL COST OR BID DIFFERENCE IT MIGHT BE.

THE PURPOSE OF REQUIRING BIDDERS TO STATE GUARANTEED SHIPPING WEIGHTS AND DIMENSIONS IS TO FURNISH A BASIS FOR EVALUATION OF BIDS TO DETERMINE THE TOTAL MAXIMUM COST TO THE GOVERNMENT OF A PARTICULAR ITEM WHERE DELIVERY IS TO BE MADE F.O.B. ORIGIN. WE HAVE HELD, IN ONE OF THE CASES CITED BY YOU, 38 COMP. GEN. 819, THAT WHERE A BIDDER FAILED TO PROVIDE REQUESTED SHIPPING DATA HIS BID SHOULD BE REJECTED AS NONRESPONSIVE. IN OTHER CASES, HOWEVER, WE HAVE ALLOWED CONSIDERATION OF BIDS WHICH FAILED TO COMPLY WITH THE PRECISE REQUIREMENTS FOR DATA REQUESTED UNDER THE GUARANTEED SHIPPING DATA CLAUSE, WHERE THE MAXIMUM POSSIBLE SHIPPING COSTS COULD BE ASCERTAINED FROM OTHER INFORMATION CONTAINED IN THE INVITATION. B-160494, MARCH 3, 1967; B-155691, FEBRUARY 26, 1965. THE OTHER DECISIONS CITED BY YOU, 47 COMP. GEN. 496, AND B-159725, DECEMBER 23, 1966, DEALT WITH DELIBERATE AND EXPRESSLY STATED EXCEPTIONS BY BIDDERS TO SPECIFIC PROVISIONS OF THE INVITATIONS.

THE COMMAND HAS ADVISED US THAT IN THE PRESENT CASE IT WAS ABLE TO ESTIMATE THE MAXIMUM SHIPPING COST UNDER AN AWARD TO THE COMPANY TO BE $6,363.14 ON THE BASIS OF MAXIMUM WEIGHT AND DIMENSIONAL LIMITATIONS PLACED ON THE REQUIRED TRANSCEIVERS BY PARAGRAPH 3.1.23 OF PURCHASE DESCRIPTION ELEX 05114C, SERIAL 9 DATED SEPTEMBER 15, 1967, INCORPORATED IN THE SUBJECT IFB AS FOLLOWS: 3.1.23 SIZE AND WEIGHT. THE CABINET OVERALL DIMENSIONS (EXCLUDING MICROPHONE) SHALL NOT EXCEED 8 INCHES IN HEIGHT, 17 INCHES IN WIDTH AND 12 INCHES IN DEPTH. THE TRANSCEIVER, INCLUDING MICROPHONE, SHALL NOT WEIGH MORE THAN 30 POUNDS. BASED ON THESE DIMENSIONS THE COMMAND DETERMINED THAT THE HEAVIEST SHIPPING CONTAINER THAT COULD REASONABLY BE USED TO ACCOMMODATE A TRANSCEIVER OF THIS SIZE WOULD WEIGH 18 POUNDS, AND THAT THE HEAVIEST AMOUNT OF PACKING MATERIAL REASONABLY CONTEMPLATED FOR USE WOULD TOTAL 22 POUNDS. THE ESTIMATED SHIPPING COST CITED ABOVE WAS COMPUTED ON THE BASIS OF THIS DATA. ADDITION, SINCE THE WEIGHT OF THE TRANSCEIVER WAS RESTRICTED TO A MAXIMUM OF 30 POUNDS, IT WAS DETERMINED THAT THE PACKED AND PACKAGED CONTAINER WITHOUT THE EQUIPMENT WOULD HAVE TO WEIGH APPROXIMATELY 7,770 POUNDS TO ELIMINATE THE $500,000 PRICE DIFFERENTIAL BETWEEN COSMOS' BID AND YOURS.

IN VIEW OF THE FACT THAT BOTH THE MAXIMUM WEIGHT AND THE MAXIMUM DIMENSIONS OF THE TRANSCEIVERS WERE PRESCRIBED IN THE INVITATION, AND SINCE THIS EFFECTIVELY LIMITED THE SIZE AND WEIGHT OF THE SHIPPING CONTAINERS, WE BELIEVE COSMOS' FAILURE TO COMPLETE THE BLANKS LISTED ON THE TRANSPORTATION DATA SHEET MAY BE VIEWED AS A DEFECT DISTINGUISHABLE FROM THE TYPE OF BID IRREGULARITY COVERED BY THE "TRIVIALITY RULE" QUOTED ABOVE. AN EXAMINATION OF THE CASE APPLYING THIS GUIDELINE CITED BY YOU, B -159725, INDICATES THAT IT CONCERNED A PRICING DEFECT WHOSE COST IMPACT WAS NOT LIMITED BY ANY DATUM CONTAINED IN THE IFB, AND THE POSSIBLE EXTENT OF WHICH COULD NOT BE ESTIMATED WITH ANY CERTAINTY.

THE CASES CITED BY YOU INVOLVING DELIBERATE EXCEPTIONS TAKEN TO IFB REQUIREMENTS DEAL WITH UNILATERAL CONDITIONS SOUGHT TO BE IMPOSED BY BIDDERS ON THE GOVERNMENT'S ACCEPTANCE OF THEIR IDS; HOWEVER, IN THE INSTANT CASE COSMOS HAS NOT SOUGHT TO IMPOSE ANY EXTRANEOUS CONDITION UPON THE GOVERNMENT'S ACCEPTANCE OF ITS BID OR TO QUALIFY ANY OBLIGATION TO COMPLY WITH THE TERMS STATED IN THE SOLICITATION. SO FAR AS ITS OBLIGATIONS UNDER THE CONTRACT AWARD ARE CONCERNED, THE ONLY EFFECT OF ITS FAILURE TO FURNISH THE GUARANTEED SHIPPING WEIGHT AND DIMENSIONS IS TO ELIMINATE ANY OBLIGATION TO BEAR EXCESS TRANSPORTATION CHARGES WHICH MIGHT RESULT IF THE ITEMS DELIVERED FOR SHIPMENT EXCEEDED SUCH WEIGHT AND DIMENSIONS. SINCE COSMOS, AS WELL AS ANY OTHER BIDDER, COULD OBTAIN THE SAME PRACTICAL RESULT BY FURNISHING FIGURES SUFFICIENTLY IN EXCESS OF ANY POSSIBLE REALISTIC FIGURE (ASSUMING THE RISK OF THE EXCESSIVE EVALUATION WHICH WOULD RESULT) AND SINCE THE PROCURING AGENCY'S METHOD OF EVALUATION HAD THE SAME EFFECT, WE DO NOT REGARD THIS FACTOR AS SUFFICIENTLY MATERIAL TO REQUIRE REJECTION OF THE BID.

WE BELIEVE THAT THE CONTROLLING CONSIDERATIONS IN THIS CASE ARE FURTHER DISTINGUISHABLE FROM THOSE IN WHICH THE "TRIVALITY" OR "DE MINIMIS" RULE RELIED ON BY YOU HAVE BEEN APPLIED, IN THAT IN THE LATTER CASES THERE HAS BEEN INVOLVED A DEVIATION WHICH IN SOME DEGREE AFFECTS THE CONFORMITY OF WHAT THE BIDDER IS OFFERING TO THE REQUIREMENTS OF THE INVITATION AND THE QUESTION WAS WHETHER THE NONCONFORMITY WAS SO TRIVIAL AS TO BE IGNORED. IN THE PRESENT CASE THERE IS NO QUESTION AS TO THE BIDDER'S UNDERTAKING TO MEET ALL REQUIREMENTS OF THE SPECIFICATIONS, INCLUDING DELIVERY, OR AS TO THE PRICE TO BE PAID TO IT THEREFOR. THE ONLY QUESTION IS AS TO THE DETERMINATION OF WHETHER THE BID "CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED," SO AS TO ENTITLE THE BIDDER TO AWARD UNDER THE PROVISIONS OF 10 U.S.C. 2305 (C). SINCE THE SHIPPING WEIGHT AND DIMENSIONS ARE MATERIAL ONLY TO THE DETERMINATION OF THE GOVERNMENT'S ULTIMATE COSTS, AND THEIR OMISSION THEREFORE ACTUALLY AFFECTS ONLY THE DETERMINATION OF WHETHER THE BID WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, WE DO NOT BELIEVE THAT THE OMISSION SHOULD BE REGARDED AS MAKING THE BID NONCONFORMING WITHIN THE MEANING OF THE STATUTORY LANGUAGE UNLESS IT CLEARLY PRECLUDES THE MAKING OF THAT DETERMINATION WITH CERTAINTY. CF. 40 COMP. GEN. 514; 43 ID. 537. IN THE PRESENT CIRCUMSTANCES AND ON THE BASIS OF THE ADMINISTRATIVE DETERMINATIONS OF THE POSSIBLE COST OF TRANSPORTATION TO BE BORNE BY THE GOVERNMENT THERE CAN BE NO QUESTION BUT THAT THE COSMOS BID IS THE MOST ADVANTAGEOUS TO THE GOVERNMENT, AND SINCE IT IS POSSIBLE TO MAKE THAT DETERMINATION WE DO NOT FEEL THAT WE WOULD BE JUSTIFIED IN OVERRULING THE CONTRACTING OFFICER'S WAIVER OF THE DEFICIENCY, OR THAT A COURT WOULD CONSIDER HIS ACTION SO CLEARLY UNAUTHORIZED OR ERRONEOUS AS TO MAKE THE CONTRACT VOID. SEE ADELHART CONSTRUCTION CO. V UNITED STATES, 123 CT. CL. 456; BROWN AND SON ELECTRICAL CO. V UNITED STATES, 163 CT. CL. 465.

WE HAVE NOT OVERLOOKED YOUR FURTHER CONTENTIONS, STATED AS FOLLOWS: (1) THE PROCURING ACTIVITY CONTACTED COSMOS AFTER BID OPENING TO OBTAIN THE SHIPPING INFORMATION THE COMPANY OMITTED FROM ITS BID, THEREBY IMPROPERLY ALLOWING COSMOS TO CURE THE DEFECT; (2) COSMOS DID NOT INTEND TO CONFORM TO THE SPECIFICATION CONTAINED IN PURCHASE DESCRIPTION ELEX 05114C, QUOTED ABOVE, BECAUSE OF ITS FAILURE TO SUPPLY THE SHIPPING DATA; AND (3) OFFICIALS AT THE PROCURING ACTIVITY PROMISED THAT YOUR COMPANY WOULD BE AFFORDED AN OPPORTUNITY TO LODGE A FORMAL PROTEST BEFORE AWARD BUT THAT AN AWARD WAS CONSUMMATED WITHOUT YOUR KNOWLEDGE.

WITH RESPECT TO THE FIRST, THE ADMINISTRATIVE REPORT STATES THAT NO REQUEST WAS MADE TO COSMOS IN THIS REGARD UNTIL AFTER THE AGENCY HAD MADE ITS DETERMINATION OF THE MAXIMUM TRANSPORTATION COSTS. IN ADDITION, THE REPLY FROM COSMOS DID NOT FURNISH ANY SHIPPING WEIGHT OR WEIGHT OF PACKING AND PACKAGING, AND THEREFORE DID NOT FURNISH THE OMITTED INFORMATION. TO YOUR SECOND CONTENTION, WE CANNOT INTERPRET THE OMISSION OF SHIPPING WEIGHT AND DIMENSIONS AS A QUALIFICATION OR EXCEPTION TO THE SPECIFICATION REQUIREMENTS OF MAXIMUM WEIGHT AND DIMENSIONS OF THE ITEM ITSELF WITHOUT PACKAGING OR PACKING. FINALLY, WHILE IT IS REGRETTABLE THAT YOU WERE NOT NOTIFIED IN TIME TO SUBMIT YOUR PROTEST BEFORE AWARD, REPORTEDLY BY UNINTENTIONAL OVERSIGHT BY THE PROCURING ACTIVITY, WE DO NOT REGARD THAT OMISSION AS A FACTOR WHICH COULD AFFECT THE LEGALITY OF THE CONTRACT AWARDED.