B-165187, NOVEMBER 1, 1968, 48 COMP. GEN. 267

B-165187, NOVEMBER 1, 1968, 48 COMP. GEN. 267

BIDS - EVALUATION - AGGREGATE V SEPARABLE ITEMS, PRICES, ETC. - SUBITEMS UNDER AN INVITATION PERMITTING A BID TO BE SUBMITTED FOR ANY QUANTITY LESS THAN SPECIFIED, AN OFFER ON A PORTION OF ONE OF THE ITEMS SOLICITED, PROVIDING FOR DELIVERY ON ONLY SEVERAL OF THE DATES SPECIFIED, IS CONSIDERED RESPONSIVE TO THE INVITATION ON THE BASIS THE PARTIAL QUANTITY SPECIFIED FOR DELIVERY ON EACH OF THE SEVERAL STATED DATES IS A SEPARATE SUBITEM FOR AWARD TO THE LOWEST BIDDER. THEREFORE, THE LOW BID ON SIX OUT OF TEN ITEMS WHICH CONTAINED ONLY A PARTIAL BID ON ONE ITEM FOR DELIVERY ON EIGHT OUT OF TEN SPECIFIED DATES, AND A "NO BID" ON THE FIRST TWO REQUIRED DELIVERY DATES--- WHETHER THE DELIVERIES WERE OFFERED AT THE BEGINNING, THE MIDDLE, OR THE END OF A DELIVERY SCHEDULE IS IMMATERIAL--- IS A BID THAT IS NOT IN VARIANCE WITH THE GOVERNMENT'S REQUIREMENTS AND THE LOW BID IS ELIGIBLE FOR AWARD. CONTRACTS - AMOUNTS - AWARD FOR LESSER AMOUNT THAN SOLICITED THE RIGHT HAVING BEEN RESERVED IN AN INVITATION TO MAKE AN AWARD ON ANY OF THE TEN ITEMS BEING SOLICITED FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICE OFFERED, UNLESS THE OFFEROR SPECIFIED OTHERWISE, A QUANTITY CUTBACK PRIOR TO THE AWARD OF A CONTRACT TO THE ONLY BIDDER ON THE FIRST FOUR OF THE TEN ITEMS SOLICITED WAS PROPER WHERE THE PROCUREMENT AGENCY RESPONSIBLE FOR DETERMINING THE NEEDS OF THE GOVERNMENT MADE THE AWARD IN GOOD FAITH AND IN ACCORDANCE WITH ESTABLISHED PROCUREMENT PROCEDURE.

TO THE PAULIS SILK COMPANY, NOVEMBER 1, 1968:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 30, 1968, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A PORTION OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. DSA-120-68B-3343.

THE SUBJECT INVITATION WAS ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER, DEFENSE SUPPLY AGENCY, PHILADELPHIA, PENNSYLVANIA, ON MAY 27, 1968, CALLING FOR 135,792 PACKAGES OF BANDAGES, COTTON, ELASTIC, 2 INCHES (FSN6510-200-2185), AND 233,748 PACKAGES OF BANDAGES, COTTON, ELASTIC, 4 INCHES (FSN6510-200-2400). ITEMS 1 THROUGH 4 WERE FOR 2 INCH BANDAGES GOING TO FOUR DESTINATIONS. ITEMS 5 THROUGH 10 WERE FOR 4-INCH BANDAGES GOING TO SIX DESTINATIONS. BIDS WERE REQUESTED ON A FOB ORIGIN OR FOB ORIGIN FREIGHT PREPAID BASIS.

BIDS WERE OPENED ON JUNE 14, 1968, AND ALTHOUGH SEVEN FIRMS HAD BEEN REQUESTED TO SUBMIT BIDS, ONLY YOUR COMPANY AND MEDICAL FABRICS COMPANY RESPONDED. IN FACT, THE PROCUREMENT HISTORY FOR THESE ITEMS REFLECT THAT SINCE 1959 ONLY YOUR FIRM AND MEDICAL FABRICS HAVE SUBMITTED OFFERS. PAULIS HAS RECEIVED 30 OF 42 CONTRACTS AWARDED FOR THE 4-INCH BANDAGE, AND 30 OF 37 CONTRACTS AWARDED FOR 2 INCH BANDAGES. ALL OTHER CONTRACTS HAVE BEEN AWARDED TO MEDICAL FABRICS WITH THE EXCEPTION OF ONE CONTRACT FOR 2 INCH BANDAGES AWARDED TO ARBEKA WEBBING COMPANY IN JUNE 1960.

WHEN THE BIDS WERE OPENED, IT WAS FOUND THAT YOUR COMPANY HAD SUBMITTED FOB ORIGIN BIDS ON ITEMS 1 THROUGH 4 AT $2.55 EACH, AND ON ITEMS 5 THROUGH 10 AT $4.50 EACH. THE MEDICAL FABRICS COMPANY DID NOT BID ON ITEMS 1 THROUGH 4, BUT SUBMITTED BIDS, BOTH FOB ORIGIN AND FOB ORIGIN FREIGHT PREPAID, FOR ITEMS 5 THROUGH 10. ITS UNIT PRICE FOB ORIGIN ON ALL ITEMS WAS $4.2298 EACH. IN BIDDING ON ITEM 6, MEDICAL FABRICS STRUCK OUT THE QUANTITY 149,436 LISTED IN THE INVITATION AND INSERTED THE FIGURE 99,684. ASTERISKS NEXT TO THE CHANGED FIGURE REFERRED TO A FOOTNOTE STATING "ITEM NO. 6,24,876 PACKAGES, FOR AUG. 16, 1968, OR EARLIER DELIVERY--- NO. BID; 24,876 PACKAGES FOR SEPT. 16, 1968, OR EARLIER DELIVERY--- NO BID. HOWEVER, SEE PAGE 7 OF THIS PROPOSAL.' ON PAGE 7 OF ITS OFFER, MEDICAL FABRICS AGAIN DELETED THE "16 AUGUST 68 OR EARLIER" AND THE "15 SEPTEMBER 68 OR EARLIER" QUANTITIES FROM ITEM 6 OF THE DELIVERY SCHEDULE. THE SEVERAL QUANTITIES LISTED FOR DELIVERY ON EIGHT OTHER DATES AGGREGATED 99,684 UNITS. AN ASTERISK NEXT TO EACH DELETION CALLED ATTENTION TO A FOOTNOTE AT THE BOTTOM OF THE PAGE WHICH STATED "NO BID" AND THEN OFFERED AN ALTERNATE DELIVERY SCHEDULE OF THESE QUANTITIES IN VARIOUS INCREMENTS AND FOR VARYING DELIVERY DATES.

THE CONTRACTING OFFICER DETERMINED THAT THE BID OF YOUR COMPANY WAS RESPONSIVE AND THAT THE BID OF MEDICAL FABRICS WAS RESPONSIVE EXCEPT FOR THE ALTERNATE OFFER OF THE QUANTITIES SPECIFIED FOR AUGUST AND SEPTEMBER, 1968, SINCE THE LATTER OFFERED DELIVERY AT VARIANCE WITH THE GOVERNMENT'S STATED DELIVERY REQUIREMENT. ACCORDINGLY, AFTER A REEVALUATION OF REQUIREMENTS WAS MADE, AWARDS WERE MADE TO PAULIS FOR ITEMS 1 THROUGH 4 (39,096 PACKAGES), AND ITEM 6 (PARTIAL--- 49,752 PACKAGES), TOTAL DOLLAR VALUE $323,578.80, AND TO MEDICAL FABRICS FOR ITEM 6 (PARTIAL--- 99,684 PACKAGES), AND ITEMS 5,7,8,9,10 (84,312 PACKAGES), TOTAL DOLLAR VALUE $780,810.06.

THE FOCAL POINT OF YOUR PROTEST IS THAT THE BID OF MEDICAL FABRICS OFFERED DELIVERY AT VARIANCE WITH THE GOVERNMENT'S REQUIREMENTS AND SHOULD THEREFORE BEEN CONSIDERED NONRESPONSIVE.

THE DETERMINATION THAT THE BID OF MEDICAL FABRICS WAS RESPONSIVE FOR 99,684 PACKAGES OF ITEM 6 WAS BASED ON THE FOLLOWING REASONING BY THE CONTRACTING OFFICER: THE DELIVERY SCHEDULE AS SHOWN IN THE INVITATION FOR BID WAS ARRIVED AT THROUGH COORDINATION BETWEEN SUPPLY OPERATIONS DIVISION AND PROCUREMENT AND PRODUCTION DIVISION. IT WAS AGREED THAT THE QUARTERLY REQUIREMENTS OF FSN 6510-200-2400 WOULD BE SCHEDULED IN 10 MONTHLY INSTALLMENTS BEGINNING IN AUGUST, 1968, AND RUNNING THROUGH MAY, 1969. WAS FELT THAT THE PROPOSED DELIVERIES WERE COMPATIBLE WITH INDUSTRY'S OPEN CAPACITY AND WERE IN LINE WITH ACTUAL MONTHLY SUPPLY DEMANDS. IT WAS FULLY INTENDED BY THE CONTRACTING OFFICER THAT OFFERORS COULD OFFER ALL OR ANY PART OF EACH INSTALLMENT BUT THAT DELIVERY DATES COULD NOT BE CHANGED. THERE WAS NO PROVISION IN THE IFB REQUIRING AN OFFER ON EACH INSTALLMENT. AS A MATTER OF FACT, IT WAS ANTICIPATED THAT, IN VIEW OF THE LARGE QUANTITIES BEING PURCHASED AND WITH ONLY TWO KNOWN SUPPLIERS, EITHER OF THE FIRMS MIGHT BE UNABLE TO OFFER ON SOME OF THE INSTALLMENTS. IT DID NOT OCCUR TO THE CONTRACTING OFFICER TO QUESTION THE RESPONSIVENESS OF THE MEDICAL FABRICS OFFER ON THE ENTIRE ITEM 6 BECAUSE IT WAS INTENDED THAT AN OFFEROR MIGHT ,NO BID" ON ANY QUANTITY SHOWN IN THE DELIVERY SCHEDULE. SUCH AN OFFER WAS ALSO IN ACCORD WITH PROVISION 10 (C) OF STANDARD FORM 33A,"SOLICITATION INSTRUCTIONS AND CONDITIONS," WHICH READS AS FOLLOWS: "THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS 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 OFFERED AT THE UNIT PRICES OFFERED UNLESS THE OFFEROR SPECIFIED OTHERWISE IN HIS OFFER.' THE CONTRACTING OFFICER FELT THAT SINCE THE SOLICITATION DID NOT REQUIRE AN OFFER ON EACH QUANTITY, THE OFFEROR WAS ENTIRELY WITHIN HIS RIGHTS IN SUBMITTING AN OFFER FOR "QUANTITIES LESS THAN THOSE SPECIFIED.' THE OFFEROR DID NOT OFFER DELIVERY "AT VARIANCE" WITH THE DELIVERY SCHEDULE (EXCEPT FOR THE ALTERNATE OFFER WHICH THE CONTRACTING OFFICER HIMSELF HAD REJECTED), BUT MERELY FAILED TO OFFER ON EVERY QUANTITY ON WHICH THE GOVERNMENT HAD REQUESTED OFFERS.

AS CORRECTLY INDICATED IN YOUR PROTEST, THE "TIME OF DELIVERY" CLAUSE STATES SPECIFICALLY THAT ,ANY OFFER OFFERING DELIVERY AT VARIANCE WITH THE GOVERNMENT'S DELIVERY REQUIREMENT SET FORTH ABOVE * * * SHALL BE CONSIDERED NONRESPONSIVE TO THE SOLICITATION AND SHALL BE REJECTED.' THE QUESTION THUS PRESENTED IS WHETHER, BY STRIKING OUT THE AUGUST 16 AND SEPTEMBER 15, 1968, QUANTITIES OF ITEM 6 IN THE DELIVERY SCHEDULE AND STATING "NO BID" AND BY AGAIN DELETING THESE QUANTITIES FROM THE ITEM TOTALS AND INSERTING THE BALANCE BID ON, WITH THE NOTATION "NO BID," THE MEDICAL FABRICS COMPANY OFFERED DELIVERY AT VARIANCE WITH THE GOVERNMENT'S REQUIREMENTS.

WHILE WE HAVE HELD THAT A CONTRACTING OFFICER HAS NO AUTHORITY TO MAKE AN AWARD TO A LOWER BIDDER WHO DID NOT AGREE IN HIS BID TO MEET THE DELIVERY REQUIREMENTS SPECIFIED IN THE INVITATION, 36 COMP. GEN. 181, WE HAVE ALSO HAD OCCASION TO STATE THAT WHERE, AS HERE, THE INSTRUCTIONS TO BIDDERS PROVIDES THAT BIDS MAY BE SUBMITTED FOR ANY QUANTITY LESS THAN THOSE SPECIFIED, AN OFFER ON ONLY A PORTION OF A UNIT QUANTITY FOR DELIVERY BY ONE OF THE DAYS SET OUT IN THE INVITATION SCHEDULE WOULD RENDER THE BID RESPONSIVE TO THE INVITATION. B-147943, MARCH 23, 1962. IN OUR DECISION B-156811, JULY 8, 1965, WE HELD THAT EVEN THOUGH A BIDDER HAD A RIGHT UNDER THE TERMS OF THE INVITATION THERE INVOLVED TO BID ON ONLY HALF OF THE TOTAL QUANTITY, HE DID NOT HAVE THE RIGHT TO CHANGE THE RATE OF DELIVERY AND BY SO DOING ALTER THE MAXIMUM DELIVERY SCHEDULE INSOFAR AS TIME WAS CONCERNED.

WE THINK THE FACTS OF THIS CASE ARE MORE CLOSELY SKIN TO OUR EARLIER REFERENCED DECISION (B-147943, MARCH 23, 1962), WHICH WAS NOT REFERRED TO IN THE LATER ONE. HERE THE GOVERNMENT CALLED FOR SEPARATE SPECIFIED QUANTITIES OF EACH ITEM TO BE DELIVERED BY SPECIFIED DATES. MEDICAL FABRICS CHOSE NOT TO BID ON THE FIRST TWO QUANTITIES ON THE SPECIFIED DATES OF AUGUST 16 OR SEPTEMBER 15, 1968, WHICH IT HAD A RIGHT TO DO UNDER THE PROVISIONS OF PARAGRAPH 10 (C) OF THE INVITATION QUOTED ABOVE. ADMITTEDLY, PROVISION 10 (C) DOES NOT INDICATE HOW AN OFFER MAY BE SUBMITTED FOR LESS THAN THOSE QUANTITIES SPECIFIED; HOWEVER, WE SEE NO REASON WHY THE QUANTITY SPECIFIED FOR DELIVERY ON EACH OF SEVERAL STATED DATES MAY NOT BE REGARDED AS A SEPARATE SUBITEM ON WHICH AWARD CAN PROPERLY BE MADE TO THE LOWEST BIDDER FOR THAT PARTICULAR QUANTITY AND DATE.

WE THEREFORE AGREE WITH THE REASONING OF THE CONTRACTING OFFICER WHICH HE STATED AS FOLLOWS: IN ORDER TO GIVE FULL MEASURE OF RECOGNITION TO ALL OF THE REQUIREMENTS OF THE INVITATION, THE GOVERNMENT SHOULD MAKE AWARDS IN ACCORDANCE WITH ITS SPECIFIED DELIVERY DATES AND OFFERORS SHOULD BE PERMITTED TO EFFECTIVELY OFFER ON LESS THAN THE FULL QUANTITY OF AN ITEM. THESE GOALS CANNOT BE ACCOMPLISHED HOWEVER, UNLESS, FOLLOWING AN AWARD FOR A PORTION OF AN ITEM, THE REMAINING PORTIONS ARE AWARDED TO THE NEXT LOW RESPONSIVE OFFERORS WITHIN ALL OF THE CORRESPONDING DELIVERY DATES. WHEN THE REMAINDER OF AN ITEM IS AWARDED IN THIS FASHION, IT WOULD SEEM IMMATERIAL WHETHER THE PARTICULAR DELIVERY REQUIREMENTS OFFERED ON BY THE LOW OFFEROR ARE AT THE BEGINNING, THE MIDDLE, OR THE END OF THE SCHEDULE. PURSUANT TO PROVISION 10 (C), AND ASSUMING NO OFFERS ARE QUALIFIED, THE GOVERNMENT WILL MAKE AWARDS WHERE THE LOW OFFERS ARE FOUND. ACCORDINGLY, EVEN THOUGH AFIRM SUBMITS AN OFFER ON ALL QUANTITIES OF A LINE ITEM, IT WILL NOT BE AWARDED THOSE QUANTITIES FOR WHICH IT IS NOT LOW. BUT IF AWARD OF SOME OF THE QUANTITIES MAY BE DENIED DUE TO PRICE, SHOULD IT BE NECESSARY THAT AN OFFER BE SUBMITTED ON SUCH QUANTITIES AT ALL? IF AN OFFEROR CANNOT SUBMIT A "NO BID" ON QUANTITIES, IT DOES NOT, OR CANNOT FURNISH, IT WOULD SEEMINGLY BE FORCED TO OFFER OBVIOUSLY NON-COMPETITIVE PRICES ON SUCH QUANTITIES, MERELY TO AVOID BEING DECLARED NONRESPONSIVE ON THE ENTIRE LINE ITEM. IT WOULD SEEM SOMEWHAT ARBITRARY TO CONSTRUE THE LANGUAGE OF PROVISION 10 (C) SO AS TO REGARD AS RESPONSIVE ONLY THOSE "* * * OFFERS * * * FOR * * QUANTITIES LESS THAN THOSE SPECIFIED" WHICH COVER THE FIRST NAMED DELIVERY REQUIREMENTS OF AN ITEM. IT IS CONSIDERED THAT THE BETTER RESULT WOULD BE TO PERMIT A "NO BID.'

CONSIDERING THE BID OF MEDICAL FABRICS TO BE IN LINE WITH THE APPARENT INTENT OF THE QUOTED TERMINOLOGY OF THE INVITATION AND OUR CONSTRUCTION THEREOF, WE CONCLUDE THAT THE BID WAS PROPERLY CONSIDERED RESPONSIVE AND ELIGIBLE FOR ACCEPTANCE.

IN ANSWER TO YOUR COMPLAINT CONCERNING THE DECREASE IN THE NUMBER OF ITEMS SOUGHT UNDER ITEMS 1 THROUGH 4 AND THE FACT THAT YOU WERE NOT SOONER NOTIFIED OF SAME, IT IS ADMINISTRATIVELY REPORTED:

THE FACTS CONCERNING THE CUT-BACK FROM 135,792 PACKAGES TO 39,096 PACKAGES ON ITEMS 1-4, ARE AS FOLLOWS. AT THE TIME PROCUREMENT WAS INITIATED ON 4 APRIL 1968, ANNUAL REQUIREMENTS WERE BASED UPON A MONTHLY DEMAND FORECAST OF 11,299 PACKAGES. AFTER PREPARATION OF THE PROCUREMENT, A DOWNWARD TREND IN MONTHLY DEMANDS OCCURRED AND, ON 15 AUGUST 1968, A REEVALUATION OF REQUIREMENTS WAS MADE, BASED ON A REVISED DEMAND FORECAST OF 6,495 UNITS PER MONTH. IT WAS ALSO ANTICIPATED AT THIS TIME THAT THE DOWNWARD TREND IN MONTHLY DEMANDS WOULD CONTINUE FORCING A GREATER ADJUSTMENT THAN THAT SHOWN BY THE 15 AUGUST FORECAST. UNDER THESE CIRCUMSTANCES, A REDUCTION WAS REQUIRED IN ORDER TO PREVENT A LONG SUPPLY POSITION AND TO PREVENT INVESTMENT OF DOLLARS IN MATERIAL NOT REQUIRED AS SHOWN BY THE DOWNWARD TREND. SINCE AWARDS HAD NOT AS YET BEEN MADE, AND IN VIEW OF THE RADICAL REDUCTION IN REQUIREMENTS WHICH HAD OCCURRED, IT WAS CONSIDERED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO ADJUST THE OUTSTANDING PROCUREMENT. THIS ADJUSTMENT WAS ACCOMPLISHED UNDER THE AUTHORITY OF PROVISION 10 (C) OF STANDARD FORM 33A, WHEREIN THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED, UNLESS THE OFFEROR SPECIFIES OTHERWISE. AWARD WAS MADE TO PAULIS SILK ON 20 AUGUST 1968 AND TO MEDICAL FABRICS ON 21 AUGUST 1968. FINANCIAL AND FACILITIES SURVEYS OF MEDICAL FABRICSCO., REQUESTED 27 AND 28 JUNE RESPECTIVELY, ACCOUNTED FOR THE BULK OF THE PERIOD BETWEEN BID OPENING AND THE AWARDS. THE PRE-AWARD SURVEY REPORTS, WHICH WERE FAVORABLE, WERE RECEIVED BY THE CONTRACTING OFFICER ON 5 AUGUST 1968. THE FILE WAS BEING PREPARED FOR REVIEW BY DSA HEADQUARTERS (AWARD TO SOLE BIDDER, PAULIS, IN EXCESS OF $100,000 ON ITEMS 1-4) WHEN THE REQUISITION MODIFICATION WAS RECEIVED FROM THE SUPPLY BRANCH ON 15 AUGUST 1968. THE REQUISITION MODIFICATION REDUCED THE AWARD TO THE SOLE BIDDER BELOW $100,000. SINCE REFERRAL TO HEADQUARTERS WAS THEN NO LONGER REQUIRED, THE CONTRACTS WERE AWARDED AS STATED ABOVE.

WE HAVE FREQUENTLY HELD THAT THE ESTABLISHMENT OF THE NEEDS OF THE GOVERNMENT RESTS PRIMARILY WITH THE PROCURING AGENCY AND THIS OFFICE WILL NOT OBJECT THERETO IN THE ABSENCE OF A SHOWING OF BAD FAITH. ALSO, IN VIEW OF THE FACT THAT THE GOVERNMENT RESERVED ITS RIGHT UNDER THE AUTHORITY OF PARAGRAPH 10 (C) OF STANDARD FORM 33A TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED, AND YOUR BID DID NOT SPECIFY OTHERWISE, AND SINCE IT WOULD APPEAR THAT THE AWARDS WERE MADE IN GOOD FAITH AND IN ACCORDANCE WITH ESTABLISHED PROCUREMENT PROCEDURES, WE FIND NO LEGAL BASIS TO OBJECT TO THE AWARDS AS MADE.