B-165715-1, FEBRUARY 27, 1969, 48 COMP. GEN. 555

B-165715-1, FEBRUARY 27, 1969, 48 COMP. GEN. 555

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - ADDENDA ACKNOWLEDGMENT - WAIVER WHEN FAILURE TO ACKNOWLEDGE AN AMENDMENT TO AN INVITATION PRIOR TO THE OPENING OF BIDS DOES NOT AFFECT PRICE, QUANTITY, OR QUALITY, THE RULE FOR APPLICATION IS THAT IF IT CAN BE SHOWN THAT THE BIDDER, UPON ACCEPTANCE OF THE BID, COULD BE REQUIRED TO PERFORM AT THE BID PRICE IN ACCORDANCE WITH ALL THE TERMS AND CONDITIONS OF THE AMENDED INVITATION, BID REJECTION IS NOT REQUIRED. THEREFORE, THE FAILURE OF THE LOW BIDDER TO ACKNOWLEDGE TWO AMENDMENTS UNDER AN INVITATION FOR AN INDEFINITE QUANTITY OF FLOODLIGHT SETS, ONE MERELY REPEATING THE PACKING REQUIREMENTS OF NAVY SPECIFICATIONS INCORPORATED IN THE INVITATION, THE OTHER RELAXING DELIVERY FROM 90 TO 120 DAYS--- EVEN THOUGH AS A RESULT THE GOVERNMENT COULD REQUIRE DELIVERY OF MORE UNITS- - NOT AFFECTING PRICE, QUALITY, OR QUANTITY, THE FAILURE MAY BE WAIVED AS A BID INFORMALITY. CONTRACTS - AMOUNTS - INDEFINITE - PROPRIETY OF EVALUATION UNDER AN INVITATION FOR A MAXIMUM OF 3,000 FLOODLIGHT SETS, OBLIGATING THE GOVERNMENT TO PURCHASE A MINIMUM QUANTITY OF 963 UNITS AND PROVIDING FOR BIDS TO BE EVALUATED ON THE BASIS OF PRICES OFFERED FOR THE MINIMUM QUANTITY PLUS 50 PERCENT OF THE QUANTITY OF THE DIFFERENCE BETWEEN THE MINIMUM AND MAXIMUM QUANTITIES--- A TOTAL OF 1981.5 UNITS THE GOVERNMENT MAY REQUIRE A PROSPECTIVE CONTRACTOR TO FURNISH--- AND PRESCRIBING A TENTATIVE DELIVERY DESTINATION, THE BID PRICES OFFERED BEARING A REASONABLE RELATIONSHIP TO THE ACTUAL ANTICIPATED NEEDS OF THE GOVERNMENT, THE EVALUATION FORMULA ESTABLISHED AN ACCURATE MEANS OF EVALUATING BIDS AND NOT AN UNBALANCED BIDDING SITUATION.

TO SELLERS, CONNER AND CUNEO, FEBRUARY 27, 1969:

REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 17, 1968, AND JANUARY 9 AND 31, 1969, PROTESTING, ON BEHALF OF CAL-WEST ELECTRIC, INC., THE AWARD OF A CONTRACT TO A.G. SCHOONMAKER COMPANY, INC., UNDER INVITATION FOR BIDS DSA- 400-69-B-2420, ISSUED BY THE DEFENSE SUPPLY AGENCY, DEFENSE GENERAL SUPPLY CENTER.

THE INVITATION, ISSUED OCTOBER 22, 1968, SOLICITED BIDS FOR THE PURCHASE OF AN INDEFINITE QUANTITY OF PORTABLE, SELF-CONTAINED NF-2 FLOODLIGHT SETS, FSN 6230-877-9172, TO BE MANUFACTURED IN ACCORDANCE WITH AIR FORCE DRAWING 67E35402-1 AND NAVY SPECIFICATION XMA-124A. THE ITEM DESCRIPTION SPECIFICALLY ADVISED PROSPECTIVE BIDDERS THAT THE FOUR DEVIATIONS TO NAVY SPECIFICATION XMA-124A, LISTED IMMEDIATELY THEREUNDER, WERE THE ONLY PERMISSIBLE EXCEPTIONS TO THE PROVISION OF THAT SPECIFICATION. BIDDERS WERE ALSO ADVISED THAT UNDER THE TERMS AND CONDITIONS OF THE PROPOSED CONTRACT THE GOVERNMENT WOULD BE OBLIGATED TO PURCHASE A MINIMUM QUANTITY OF 963 UNITS AND THAT THE CONTRACTOR MIGHT BE REQUIRED TO SUPPLY A MAXIMUM OF 3,000 UNITS OVER THE CONTRACT PERIOD.

SECTION "C" , THE PRESERVATION, PACKAGING AND PACKING CLAUSE OF THE INVITATION, PROVIDED AS FOLLOWS: QUANTITIES DESIGNATED LEVEL C ITEM/S) SHALL BE PRESERVED AND PACKED LEVEL C/C IN ACCORDANCE WITH THE SPECIFICATION CITED IN THE ITEM DESCRIPTION. SHIP UNCRATED. QUANTITIES DESIGNATED LEVEL A ITEMS SHALL BE PRESERVED, PACKAGED AND PACKED LEVEL A/A IN ACCORDANCE WITH MIL-C-104, CRATED, TYPE II, CLASS 2, STYLE A. THE FOLLOWING PORTIONS OF THE PROVISIONS OF SECTION ,D" OF THE INVITATION ARE PERTINENT TO THE PROTEST: CONTRACT PERIOD--- THE CONTRACT PERIOD WILL BEGIN ON 1968 DECEMBER 1 OR DATE OF AWARD, WHICHEVER IS LATER (AND WILL CONTINUE IN EFFECT FOR ORDERING PURPOSES FOR 365 DAYS. INDEFINITE QUANTITY

(C) ORDERS, TO INCLUDE BASIC AWARD, ISSUED DURING THE EFFECTIVE PERIOD OF THIS CONTRACT AND NOT COMPLETED WITHIN THAT TIME SHALL BE COMPLETED BY THE CONTRACTOR WITHIN THE TIME SPECIFIED IN THE ORDER, AND THE RIGHTS AND OBLIGATIONS OF THE CONTRACTOR AND THE GOVERNMENT RESPECTING THOSE ORDERS SHALL BE GOVERNED BY THE TERMS OF THE CONTRACT TO THE SAME EXTENT AS IF COMPLETED DURING THE EFFECTIVE PERIOD OF THIS CONTRACT, PROVIDED THAT THE CONTRACTOR SHALL NOT BE REQUIRED TO MAKE ANY DELIVERIES UNDER THIS CONTRACT AFTER 1970 MAY 31.

* * * * * * * DELIVERY ORDER LIMITATIONS

(A) MINIMUM QUANTITY PER ORDER--- 100 EACH.

(B) MAXIMUM ORDER--- THE CONTRACTOR SHALL NOT BE OBLIGATED TO HONOR:

(I) ANY ORDER FOR A QUANTITY IN EXCESS OF 1000 EACH.

(II) ANY ORDER THAT CALLS FOR DELIVERY OF A QUANTITY WHICH, WHEN ADDED TO PREVIOUS QUANTITIES ORDERED, RESULTS IN A TOTAL IN EXCESS OF 3000 EACH.

(C) NOTWITHSTANDING THE MINIMUM AND MAXIMUM ORDER LIMITATIONS, THE GOVERNMENT MAY ORDER AND THE CONTRACTOR AGREES TO PERFORM ANY DELIVERY ORDER GREATER OR LESS THAN THE AMOUNT SHOWN IN SUCH LIMITATIONS UNLESS SUCH DELIVERY ORDER IS RETURNED TO THE CONTRACTING OFFICER WITHIN TEN DAYS AFTER ITS RECEIPT WITH WRITTEN NOTICE OF REFUSAL TO ACCEPT. TIME OF DELIVERY

BASIC AWARD: 200 EACH 90 DAYS AFTER FIRST ARTICLE APPROVAL OR, IN THE CASE OF WAIVER OF THE FIRST ARTICLE APPROVAL REQUIREMENT, 90 DAYS AFTER AWARD, AND 200 EACH PER MONTH THEREAFTER.

SUBSEQUENT DELIVERY ORDERS: DELIVERY SHALL BE REQUIRED AT A RATE OF 200 EACH PER MONTH FOLLOWING COMPLETION OF EARLIER DELIVERY REQUIREMENTS, UNLESS A DELIVERY ORDER IS ISSUED AFTER A BREAK IN PRODUCTION CAUSED BY COMPLETION OF PRIOR DELIVERIES. IN SUCH EVENT DELIVERY AT A RATE OF 200 EACH PER MONTH STARTING 90 DAYS AFTER ISSUANCE OF SUCH DELIVERY ORDER WILL BE REQUIRED.

ACCELERATION OF DELIVERIES IS AUTHORIZED AT NO ADDITIONAL COST TO THE GOVERNMENT PROVIDED THAT SCHEDULED DELIVERIES TO ALL DESTINATIONS ARE CURRENT AT THE TIME ACCELERATION IS ACCOMPLISHED. MAXIMUM ACCELERATED DELIVERY IS DESIRED. * * *

AMENDMENT 0001, ISSUED NOVEMBER 1, 1968, DELETED THE INFORMATION UNDER THE PRESERVATION, PACKAGING AND PACKING CLAUSE,"QUANTITIES DESIGNATED LEVEL A," SUPRA, AND INSERTED IN LIEU THEREOF THE FOLLOWING:

ITEMS SHALL BE PRESERVED, PACKAGED AND PACKED LEVEL A/A IN ACCORDANCE WITH SPECIFICATION XMA-124A, CRATED IN ACCORDANCE WITH MIL C-104, TYPE II, CLASS 2, STYLE A.

AMENDMENT 0002, ISSUED NOVEMBER 5, 1968, DELETED THE FIRST TWO PARAGRAPHS OF THE "TIME OF DELIVERY" CLAUSE, SUPRA, AND INSERTED THE FOLLOWING:

BASIC AWARD.--- CHANGE TO READ: "200 EACH 120 DAYS AFTER FIRST ARTICLE APPROVAL OR, IN THE CASE OF WAIVER OF FIRST ARTICLE APPROVAL REQUIREMENT, 120 DAYS AFTER AWARD, AND 200 EACH PER MONTH THEREAFTER.'

SUBSEQUENT DELIVERY ORDERS.--- CHANGE TO READ: "DELIVERY SHALL BE REQUIRED AT A RATE OF 200 EACH PER MONTH FOLLOWING COMPLETION OF EARLIER DELIVERY REQUIREMENTS, UNLESS A DELIVERY ORDER IS ISSUED AFTER A BREAK IN PRODUCTION CAUSED BY COMPLETION OF PRIOR DELIVERIES. IN SUCH EVENT DELIVERY SHALL BE REQUIRED OF 200 EACH, 120 DAYS AFTER ISSUANCE OF SUCH DELIVERY ORDER, AND 200 EACH PER MONTH THEREAFTER.'

BOTH AMENDMENTS ADMONISHED BIDDERS TO ACKNOWLEDGE RECEIPT THEREOF PRIOR TO THE SPECIFIED BID OPENING "/A) BY SIGNING AND RETURNING 2 COPIES OF THIS AMENDMENT; (B) BY ACKNOWLEDGING RECEIPT OF THIS AMENDMENT ON EACH COPY OF THE OFFER SUBMITTED; OR (C) BY SEPARATE LETTER OR TELEGRAM WHICH INCLUDES A REFERENCE TO THE SOLICITATION AND AMENDMENT NUMBERS.' BIDDERS WERE FURTHER WARNED THAT "FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE ISSUING OFFICE PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER.'

BIDDERS WERE REQUIRED TO OFFER SEPARATE PRICES FOR THE MINIMUM QUANTITY OF 963 UNITS FOR LEVEL C PACK AND LEVEL A PACK, PLUS SEPARATE PRICES FOR LEVEL C AND LEVEL A PACK FOR 2,037 UNITS REPRESENTING THE MAXIMUM QUANTITY (3,000 UNITS) LESS THE MINIMUM QUANTITY WHICH THE SUCCESSFUL BIDDER WOULD BE OBLIGATED TO FURNISH IN EXCESS OF 963 UNITS WHEN ORDERED DURING THE CONTRACT PERIOD. BIDDERS WERE FURTHER ADVISED THAT: EVALUATION FOR PURPOSE OF AWARD WILL BE BASED ON THE MINIMUM QUALITY PLUS ONE HALF THE MAXIMUM LESS MINIMUM QUANTITY FURTHER BASED ON THE ASSUMPTION THAT 50 PERCENT OF ALL UNITS WILL BE LEVEL C PACK AND 50 PERCENT OF ALL UNITS WILL BE LEVEL A PACK

BIDS WERE OPENED ON NOVEMBER 22, 1968, AND SCHOONMAKER'S BID UNDER THE REFERENCED EVALUATION FORMULA WAS LOWEST. HOWEVER, IT WAS NOTED THAT SCHOONMAKER FAILED TO RETURN THE TWO AMENDMENTS OR TO ACKNOWLEDGE RECEIPT THEREOF IN ANY OF THE SPECIFIED WAYS. YOUR PROTEST ON BEHALF OF CAL-WEST, THE SECOND LOW BIDDER, IS PREDICATED UPON THE ARGUMENT THAT SCHOONMAKER'S BID IS NONRESPONSIVE TO THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, AS AMENDED. IN THE ALTERNATIVE, YOU STATE THAT THE INVITATION FOR BIDS SHOULD BE CANCELED AND THE ENTIRE PROCUREMENT READVERTISED BECAUSE THE SPECIFIED BID EVALUATION FORMULA PERMITTED UNBALANCED BIDDING IN DEROGATION OF THE REQUIREMENT FOR FULL AND FREE COMPETITION ENVISAGED BY THE RULES AND REGULATIONS GOVERNING PROCUREMENT BY FORMAL ADVERTISING. HAVE BEEN INFORMALLY ADVISED BY THE PROCURING ACTIVITY THAT NO AWARD WILL BE MADE PENDING OUR DECISION IN THE MATTER.

THE QUESTION OF THE RESPONSIVENESS OF A BID SUBMITTED WITHOUT ACKNOWLEDGING THE EXISTENCE OF ONE OR MORE AMENDMENTS TO THE ORIGINAL INVITATION HAS BEEN BEFORE OUR OFFICE ON NUMEROUS OCCASIONS. OUR CONSIDERATION OF THIS QUESTION HAS RESULTED IN THE GENERAL RULE THAT WHERE SUCH AMENDMENT COULD AFFECT PRICE, QUANTITY OR QUALITY, THE FAILURE OF THE BIDDER TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT PRIOR TO THE TIME SET FOR OPENING OF BIDS IS MATERIAL AND RENDERS THE CHALLENGED BID NONRESPONSIVE. 37 COMP. GEN. 785. THE UNDERLYING REASON FOR THIS RULE WAS SUCCINCTLY STATED IN OUR DECISION B-150563, FEBRUARY 28, 1963, AS FOLLOWS:

* * * A BID SUBMITTED IN RESPONSE TO AN INVITATION ISSUED BY AN AGENCY OF THE GOVERNMENT CONSTITUTES AN OFFER; THE AWARD IS AN ACCEPTANCE WHICH EFFECTS A BINDING AGREEMENT BETWEEN THE TWO PARTIES. IT IS WELL RECOGNIZED THAT AN OFFER IS TO BE INTERPRETED IN ACCORDANCE WITH ITS CLEAR LANGUAGE. THE ACCEPTANCE OF A BID WHICH OFFERS TO PERFORM ON A BASIS OTHER THAN THE TERMS OF THE INVITATION INCLUDING ANY AMENDMENTS WOULD BE CONTRARY TO THE STATUTES GOVERNING ADVERTISED PROCUREMENTS. UNITED STATES V ELLICOTT, 223 U.S. 524 (1911). ON THE OTHER HAND, TO PERMIT THE BIDDER TO AMEND HIS BID AFTER OPENING IN ORDER TO CONFORM TO THE ADVERTISED SPECIFICATIONS WOULD ALSO CONTRAVENE THE COMPETITIVE BIDDING STATUTES. C.J.S. MUNICIPAL CORPORATIONS, SEC. 1003; 40 COMP. GEN. 447, 448. SEE, ALSO, 42 COMP. GEN. 490.

HOWEVER, AS ALSO NOTED ON SEVERAL OCCASIONS, THE FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT HAS BEEN HELD NOT TO REQUIRE THE REJECTION OF THE BID IF IT CAN BE SHOWN THAT THE BIDDER, UPON ACCEPTANCE OF THE BID, COULD BE REQUIRED TO PERFORM AT THE BID PRICE IN ACCORDANCE WITH ALL OF THE TERMS AND CONDITIONS OF THE INVITATION, AS AMENDED. SEE B -150563, SUPRA, AND CASES CITED THEREIN; B-165150, SEPTEMBER 16, 1968.

YOU STATE THAT AMENDMENT 0001 IMPOSED PACKING REQUIREMENTS IN EXCESS OF THOSE SPECIFIED IN THE ORIGINAL INVITATION FOR BIDS THEREBY SUBSTANTIALLY INCREASING THE PROSPECTIVE CONTRACTOR'S COSTS FOR LEVEL A PRESERVING, PACKAGING AND PACKING. IN SUPPORT THEREOF, YOU POINT OUT THAT THE PRESERVATION, PACKAGING AND PACKING CLAUSE OF THE ORIGINAL INVITATION MERELY REQUIRED THAT LEVEL A ITEMS WERE TO BE CRATED IN ACCORDANCE WITH SPECIFICATION MIL-C-104, AND THAT AMENDMENT 0001 ADDED THE REQUIREMENT THAT LEVEL A ITEMS CONFORM WITH END-ITEM SPECIFICATION XMA-124A. YOU FURTHER STATE THAT THE PRACTICAL EFFECT OF AMENDMENT 0001 WILL BE TO REQUIRE THE PROSPECTIVE CONTRACTOR TO PACK EACH ITEM IN A COSTLY VAPOR- PROOF FOIL ENCLOSURE BAG, WITH ACTIVATED DESICCANTS, AND THEN CRATE IT AT A UNIT COST OF APPROXIMATELY $110 GREATER THAN SIMPLY PLACING IT IN A CRATE, AS YOU CONTEND, WAS ORIGINALLY SPECIFIED.

IN OUR OPINION, SCHOONMAKER'S FAILURE TO RETURN OR ACKNOWLEDGE RECEIPT OF AMENDMENT 0001 HAD NO EFFECT ON THE RESPONSIVENESS OF ITS BID. AS YOU ARE AWARE, THE CONTRACTING OFFICER HAS ADVISED THAT "THE INVITATION AS IT WAS ORIGINALLY WRITTEN CLEARLY REQUIRED LEVEL A PRESERVATION AND PACKAGING FOR THE QUANTITIES OF FLOODLIGHTS DESIGNATED -LEVEL A.-" UNDER THE LEVEL C PROVISIONS OF THE PRESERVATION, PACKAGING AND PACKING CLAUSE, THE ATTENTION OF BIDDERS WAS SPECIFICALLY DRAWN TO THE "SPECIFICATION CITED IN THE ITEM DESCRIPTION.' THIS SPECIFIC INCLUSION OF NAVY SPECIFICATION XMA- 124A WAS, HOWEVER, NOT CONTAINED IN THE LEVEL A PORTION OF THE PRESERVATION, PACKAGING AND PACKING CLAUSE. THEREFORE, AMENDMENT 0001 WAS ISSUED TO CLARIFY THE LEVEL A PRESERVATION, PACKAGING AND PACKING REQUIREMENTS, THEREBY REMAINDING PROSPECTIVE BIDDERS THAT, EXCEPT FOR THE DEVIATIONS LISTED THEREUNDER, ALL OF THE PROVISIONS OF NAVY SPECIFICATION XMA-124A GOVERNED THE PRESERVATION, PACKAGING AND PACKING OF THESE ITEMS DESIGNATED LEVEL A--- AS WELL AS LEVEL C.

WHERE, AS HERE, THE ITEM DESCRIPTION OF THE INVITATION REQUIRES THAT THE ADVERTISED UNITS BE MANUFACTURED IN ACCORDANCE WITH NAVY SPECIFICATION XMA -124A--- INCLUDING THE PRESERVATION, PACKAGING AND PACKING PROVISIONS CONTAINED THEREIN--- AND AMENDMENT 0001 MERELY REPEATS THAT REQUIREMENT, SCHOONMAKER'S FAILURE TO ACKNOWLEDGE THE AMENDMENT PRIOR TO THE TIME SET FOR BID OPENING COULD HAVE NO POSSIBLE EFFECT UPON ITS COMPUTATION OF BID PRICES OR PERFORMANCE OBLIGATIONS UNDER ANY RESULTING CONTRACT. THIS BEING THE CASE, SCHOONMAKER'S FAILURE TO RETURN OR ACKNOWLEDGE AMENDMENT 0001 SHOULD BE CONSIDERED A MERE INFORMALITY HAVING NO EFFECT UPON PRICE, QUALITY, OR QUANTITY, AND, AS SUCH, PROPERLY MAY BE WAIVED. SEE 41 COMP. GEN. 550.

YOU ALSO PROTEST THE CONSIDERATION OF SCHOONMAKER'S BID BECAUSE OF THAT BIDDER'S FAILURE TO RETURN OR ACKNOWLEDGE THE RECEIPT OF AMENDMENT 0002 TO THE INVITATION FOR BIDS. AS INDICATED ABOVE, AMENDMENT 0002 RELAXED THE DELIVERY PROVISIONS OF THE INVITATION BY PERMITTING THE PROSPECTIVE CONTRACTOR 120 DAYS INSTEAD OF 90 DAYS AFTER FIRST ARTICLE APPROVAL, OR DATE OF AWARD IF WAIVER OF THE FIRST ARTICLE TESTING REQUIREMENT IS APPROPRIATE, TO DELIVER THE FIRST 200 UNITS OR ANY 200 UNITS ORDERED SUBSEQUENT TO A BREAK IN PRODUCTION.

THE CONTRACTING OFFICER STATES THAT THE RESULTING PRACTICAL EFFECT UPON SCHOONMAKER'S BID IS THAT THAT BIDDER IS OFFERING "TO DO IN 90 DAYS WHAT BIDDERS WHO RETURN THE AMENDMENT MUST DO WITHIN 120 DAYS BUT COULD DO WITHIN 90 DAYS IF THEY SO DESIRED.' YOU POINT OUT, HOWEVER, THAT IN VIEW OF THE MAY 31, 1970, CUTOFF DATE FOR DELIVERIES UNDER THE TERMS OF THE INVITATION AND THE REQUIREMENT IMPOSED THEREUNDER UPON THE CONTRACTOR TO DELIVER A MINIMUM QUANTITY OF 200 UNITS PER MONTH, SCHOONMAKER, IF AWARDED THE CONTRACT, COULD BE OBLIGATED TO DELIVER A TOTAL QUANTITY OF 200 MORE UNITS THAN ANY OTHER BIDDER. "THUS," YOU CONCLUDE ON PAGE 11 OF YOUR LETTER OF DECEMBER 17, 1968: SCHOONMAKER'S FAILURE TO ACKNOWLEDGE THE AMENDMENT NO. 0002, EXTENDING THE TIME OF FIRST DELIVERY FROM 90 DAYS TO 120 DAYS AFTER FIRST ARTICLE APPROVAL, PLACES IT IN A POSITION OF SUBMITTING A BID ON A DIFFERENT REQUIRED QUANTITY OF FLOODLIGHT UNITS THAN THAT OF THOSE OTHER BIDDERS WHO PROPERLY ACKNOWLEDGE THE AMENDMENT PRIOR TO BID OPENING. SCHOONMAKER'S FAILURE TO ACKNOWLEDGE THIS AMENDMENT ALLOWS THE GOVERNMENT TO REQUIRE IT TO DELIVER A MAXIMUM OF 2600 UNITS RATHER THAN THE 2400 UNITS REQUIRED OF OTHER BIDDERS IF FIRST ARTICLE APPROVAL IS MADE INSTANTANEOUSLY. IF SUCH APPROVAL IS MADE IN THE ORDINARY COURSE, SCHOONMAKER CAN BE REQUIRED TO DELIVER 2400 UNITS, WHILE OTHER CONTRACTORS CAN ONLY BE REQUIRED TO DELIVER 2200 UNITS. YOU CONTINUE THAT ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-405 (IV) (B) PERMITS THE WAIVER OF A FAILURE TO ACKNOWLEDGE AN AMENDMENT ONLY IF "THE AMENDMENT CLEARLY WOULD HAVE * * * NO AMENDMENT 0002 HAS AN EFFECT ON BOTH QUANTITY AND DELIVERY AND THAT EFFECT ON * * * QUANTITY, (OR) IVERY.' IS YOUR POSITION THAT ANY AWARD TO SCHOONMAKER WOULD BE BASED ON A DIFFERENT SET OF REQUIREMENTS THAN THOSE BID UPON BY OTHER BIDDERS. SUPPORT THEREOF, YOU CITE PRIOR DECISIONS OF OUR OFFICE HOLDING THAT "UNDER SUCH CIRCUMSTANCES, THE CONTRACTING OFFICER * * * (IS) WITHOUT LEGAL AUTHORITY TO ACCEPT SUCH A BID.' SEE, FOR EXAMPLE, 40 COMP. GEN. 126, 128; 42 ID. 490, 493. HOWEVER, IN THOSE CASES AND IN THE OTHERS CITED IN YOUR DECEMBER 17,1968, LETTER, THERE WERE INVOLVED AMENDMENTS WHICH MATERIALLY AFFECTED PRICE. SUCH IS NOT THE CASE HERE.

IN 41 COMP. GEN. 550, WE RESTATED THE GENERAL RULE THAT THE FAILURE OF A BIDDER TO ACKNOWLEDGE AN AMENDMENT AFFECTING PRICE, QUALITY, OR QUANTITY CANNOT BE WAIVED, BUT POINTED OUT THAT THE RULE HAS NOT BEEN APPLIED INDISCRIMINATELY BY OUR OFFICE TO PREVENT WAIVER IN ALL CASES INVOLVING FAILURE TO ACKNOWLEDGE ADDENDA. WE CONCLUDED IN THAT CASE AT PAGE 553 THAT,"IF WE ASSUME THAT THE LOW BIDDER'S FAILURE TO ACKNOWLEDGE THE ADDENDUM WAS DUE TO IGNORANCE OF ITS EXISTENCE, THEN HIS BID PRICE WOULD NOT REFLECT THE LESSENED REQUIREMENTS OF THE SPECIFICATIONS AND, THEREFORE, HIS FAILURE TO ACKNOWLEDGE WOULD ONLY BE PREJUDICIAL TO HIS COMPETITIVE POSITION AND EVEN POSSIBLY BENEFICIAL TO THE POSITION OF THE OTHER BIDDERS.' MOREOVER, IN 40 COMP. GEN. 321, 324, WE STATED, IN THIS RESPECT, THAT:

WHETHER CERTAIN PROVISIONS OF AN INVITATION FOR BIDS ARE TO BE CONSIDERED MANDATORY OR DISCRETIONARY DEPENDS UPON THE MATERIALITY OF SUCH PROVISION AND WHETHER THEY WERE INSERTED FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT OR FOR THE PROTECTION OF THE RIGHTS OF BIDDERS. UNDER AN ADVERTISED PROCUREMENT ALL QUALIFIED BIDDERS MUST BE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT BIDS WHICH ARE BASED UPON THE SAME SPECIFICATIONS, AND TO HAVE SUCH BIDS EVALUATED ON THE SAME BASIS. TO THE EXTENT THAT WAIVER OF THE PROVISION OF AN INVITATION FOR BIDS MIGHT RESULT IN FAILURE OF ONE OR MORE BIDDERS TO ATTAIN THE EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS WITH OTHER BIDDERS, SUCH PROVISION MUST BE CONSIDERED MANDATORY. HOWEVER, THE CONCEPT OF FORMALLY ADVERTISED PROCUREMENT, INSOFAR AS IT RELATES TO THE SUBMISSION AND EVALUATION OF BIDS, GOES NO FURTHER THAN TO GUARANTEE EQUAL OPPORTUNITY TO COMPETE AND EQUAL TREATMENT IN THE EVALUATION OF BIDS. IT DOES NOT CONFER UPON BIDDERS ANY RIGHT TO INSIST UPON THE ENFORCEMENT OF PROVISIONS IN AN INVITATION, THE WAIVER OF WHICH WOULD NOT RESULT IN AN UNFAIR COMPETITIVE ADVANTAGE TO OTHER BIDDERS BY PERMITTING A METHOD OF CONTRACT PERFORMANCE DIFFERENT FROM THAT CONTEMPLATED BY THE INVITATION OR BY PERMITTING THE BID PRICE TO BE EVALUATED UPON A BASIS NOT COMMON TO ALL BIDS. SUCH PROVISION MUST THEREFORE BE CONSTRUED TO BE SOLELY FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT AND THEIR ENFORCEMENT OR WAIVER CAN HAVE NO EFFECT UPON THE RIGHTS OF BIDDERS TO WHICH THE RULES AND PRINCIPLES APPLICABLE TO FORMAL ADVERTISING ARE DIRECTED. * * *

IN A CASE ANALOGOUS TO THE PRESENT SITUATION, B-162574, JANUARY 10, 1968, IN A LETTER ADDRESSED TO THE SECRETARY OF THE NAVY, WE STATED THAT "WE WOULD SEE NO LEGAL OBJECTION TO AN AWARD FOR A LARGER NUMBER OF UNITS THAN THOSE SOLICITED IN CIRCUMSTANCES SUCH AS HERE INVOLVED.'

FOR THE REASONS STATED, WE FIND NO BASIS FOR OBJECTING TO WAIVING SCHOONMAKER'S FAILURE TO ACKNOWLEDGE AMENDMENTS 0001 AND 0002 AS INFORMALITIES IN ITS BID. ASPR 2-405. IT BECOMES NECESSARY, THEREFORE, TO DISCUSS YOUR ALTERNATE PROTEST; I.E., THAT THE BID EVALUATION FORMULA PROVIDED IN THE INVITATION FOR BIDS ACCORDED BIDDERS AN OPPORTUNITY TO SUBMIT UNBALANCED BIDS AND THAT THE PROCUREMENT SHOULD BE CANCELED AND READVERTISED.

AS NOTED ON PAGE 23 OF YOUR LETTER OF DECEMBER 17, OUR OFFICE HAS ON OCCASIONS UPHELD THE REJECTION OF BIDS WHERE "DUE TO THE EVALUATION FORMULA PROVIDED, IN ORDER TO BE DETERMINED THE LOW BIDDER, A BIDDER COULD BID LOW ON ITEMS KNOWN FROM PAST EXPERIENCE, OR ON SPECULATION, TO BE PURCHASED INFREQUENTLY AND HIGH ON ITEMS FREQUENTLY PURCHASED.' BRIEFLY, IT IS YOUR POSITION THAT BIDDERS COULD BID HIGH FOR THE MINIMUM QUANTITY OF 963 UNITS KNOWING THAT THE GOVERNMENT WAS OBLIGATED BY THE TERMS OF THE INVITATION TO PURCHASE THAT QUANTITY, BUT BID LOW FOR THE REMAINING NUMBER OF UNITS UP TO 3,000, THEREBY REFLECTING A BID PRICE BEARING NO RELATION TO THE ACTUAL COST OF THE PROCUREMENT TO THE GOVERNMENT BECAUSE THE PROSPECTIVE CONTRACTOR CANNOT BE REQUIRED TO DELIVER THE FULL AMOUNT THAT THE GOVERNMENT IS ENTITLED TO ORDER DURING THE EFFECTIVE PERIOD OF THE CONTRACT. WE AGREE THAT IN THE PRESENT CIRCUMSTANCES THE PROSPECTIVE CONTRACTOR CANNOT BE REQUIRED TO DELIVER THE STATED MAXIMUM OF 3,000 UNITS. THE MAXIMUM, HOWEVER, IS NOT THE QUANTITY UPON WHICH BIDS WERE EVALUATED. AS STATED ABOVE, BIDS WERE EVALUATED ON THE BASIS OF PRICES OFFERED FOR THE MINIMUM QUANTITY PLUS 50 PERCENT OF THE QUANTITY OF THE DIFFERENCE BETWEEN THE MINIMUM AND THE MAXIMUM (A TOTAL OF 1981.5 UNITS), AND THE GOVERNMENT MAY REQUIRE THE PROSPECTIVE CONTRACTOR TO FURNISH THAT QUANTITY. THEREFORE, FOR PURPOSES OF BID EVALUATION, THE INVITATION EVALUATION FORMULA ACCURATELY REFLECTS THE ESTIMATED POSSIBLE NEEDS OF THE GOVERNMENT.

FURTHER, IN THIS RESPECT, THE ORIGINAL INVITATION CONTEMPLATED THE AWARD OF A CONTRACT BY DECEMBER 1, 1968, WITH A 90-DAY LEAD-IN PERIOD FROM DATE OF AWARD OR AFTER FIRST ARTICLE APPROVAL FOR THE COMMENCEMENT OF DELIVERIES. MOREOVER, IF WAIVER OF THE FIRST ARTICLE TESTING REQUIREMENT WAS GRANTED, 3,000 UNITS COULD BE PURCHASED UNDER THE CONTRACT. THE AMENDMENT EXTENDING BY 30 DAYS THE TIME OF DELIVERY MERELY DECREASED THE POSSIBLE TOTAL NUMBER OF UNITS, WITHOUT MUTUAL ASSENT, BY 200 UNITS. SINCE BIDDERS, AT THE TIME OF OPENING OF BIDS, COULD NOT UNDER ANY OF THE CIRCUMSTANCES SURROUNDING THE PRESENT CONTROVERSY POSSIBLY KNOW OR ASSUME THAT THE GOVERNMENT INTENDED TO ORDER A QUANTITY OF UNITS APPRECIABLY LESS THAN THE TOTAL QUANTITY AVAILABLE FOR POSSIBLE DELIVERY, ANY UNBALANCED BID WOULD HAVE TO BE PREDICATED ON THE TENUOUS ASSUMPTION THAT AWARD WOULD BE DELAYED APPRECIABLY BEYOND DECEMBER 1, 1968.

WE ARE OF THE OPINION THAT THE PROCURING ACTIVITY ESTABLISHED A FAIR AND ACCURATE MEANS OF EVALUATING BIDS SUBMITTED IN RESPONSE TO THE INVITATION BY USING AN ESTIMATED QUANTITY FOR BID EVALUATION PURPOSES BEARING A REASONABLE RELATIONSHIP TO THE ACTUAL ANTICIPATED MINIMUM NEEDS OF THE GOVERNMENT. MOREOVER, THE RECORD INDICATES A TOTAL LACK OF UNBALANCED BIDDING. IN FACT, FIVE OUT OF THE 11 BIDDERS OFFERED NO DISCOUNT FOR THE ADDITIONAL QUANTITY OVER THE STATED MINIMUM OF 963 UNITS, WHEREAS, SIX BIDDERS OFFERED UNIT PRICE DISCOUNTS FOR MORE THAN THE MINIMUM QUANTITY OF APPROXIMATELY $11, $15, $19, $85, $100, AND $245. CERTAINLY, IT CANNOT BE SAID, THAT THESE DEDUCTIONS WHICH ARE TO BE EXPECTED IN PROCUREMENTS OF THIS NATURE AND MAGNITUDE RENDERED THE REDUCED BID PRICES TO A NOMINAL LEVEL SUCH AS IS USUALLY ENCOUNTERED IN UNBALANCED BIDDING SITUATIONS. THEREFORE, WE FIND NO LEGAL BASIS UPON WHICH TO QUESTION THE METHOD OF EVALUATION OF BIDS IN THE PRESENT CASE.

IN ADDITION TO THE FOREGOING, BY TELEGRAM DATED NOVEMBER 27, 1968, CAL- WEST PROTESTED THE USE OF KELLY AIR FORCE BASE, TEXAS, AS THE TENTATIVE DESTINATION FOR EVALUATION OF BIDS TO DETERMINE THE COST OF TRANSPORTATION TO BE BORNE BY THE GOVERNMENT OVER AND ABOVE THE F.O.B. ORIGIN BID PRICES OF THE RESPONDING BIDDERS. CAL-WEST STATED THAT THE PROCUREMENT OFFICIALS ADMITTED THAT THE SPECIFIED DESTINATION FAVORS PRIOR CONTRACTORS AND THAT IT IS UNLIKELY THAT ANY SHIPMENTS WILL ACTUALLY BE MADE TO THAT DESTINATION.

KELLY AIR FORCE BASE WAS DESIGNATED IN THE INVITATION AS THE TENTATIVE DESTINATION FOR EVALUATION PURPOSES TO PROVIDE A FAIR MEANS OF COMPUTING TRANSPORTATION COSTS BECAUSE THE EXACT DESTINATION/S) TO WHICH THE PROCUREMENT ITEMS ARE TO BE DELIVERED IS UNKNOWN. SEE ASPR 19-208.4 (A). THE USE OF A TENTATIVE DESTINATION FOR EVALUATION PURPOSES APPEARS TO HAVE BEEN CLEARLY PROPER IN VIEW OF THE INFORMATION SUPPLIED BY THE CONTRACTING OFFICER, AS FOLLOWS:

* * * AS SHOWN ON THE ABSTRACT ANNOTATED WITH FREIGHT RATES, NO BIDDER HAS A LOWER FREIGHT COST ADDED TO ITS BID PRICE THAN CAL-WEST ELECTRIC, INC. AND THE FREIGHT FOR THE PREVIOUSLY SUCCESSFUL BIDDER, AMERICAN AIR FILTER COMPANY, INC. IS $10.54 PER UNIT HIGHER. THE MIPR WAS ISSUED BY KELLY AIR FORCE BASE AND FLOODLIGHTS HAVE BEEN DELIVERED TO KELLY AIR FORCE BASE UNDER THE PREVIOUS CONTRACT BOTH FOR DOMESTIC USE AND TRANSHIPMENT OVERSEAS. FURTHERMORE, KELLY AIR FORCE BASE IS A CENTRAL LOCATION SINCE POTENTIAL SUPPLIERS ARE LOCATED ON BOTH THE EAST AND WEST COASTS. * * *

THEREFORE, THE BID OF A.G. SCHOONMAKER COMPANY, INC., MAY BE CONSIDERED FOR AWARD IF OTHERWISE PROPER.

THERE IS ENCLOSED FOR YOUR INFORMATION A COPY OF OUR DECISION OF TODAY TO AMERICAN AIR FILTER COMPANY, INC. ..END :