B-165999, FEB. 27, 1969

B-165999, FEB. 27, 1969

TO MR. ENDICOTT PEABODY:

WE REFER TO YOUR TELEGRAM OF FEBRUARY 6, 1969, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AN AWARD TO OTHER THAN DISTRICT MOVING AND STORAGE, INCORPORATED (DISTRICT), UNDER SCHEDULE III OF ADVERTISED SOLICITATION NO. DABG03-69-B-0011, ISSUED OCTOBER 21, 1968, BY THE UNITED STATES ARMY, HEADQUARTERS, MILITARY DISTRICT OF WASHINGTON, FOR THE PREPARATION AND LOCAL CARTAGE OF UNACCOMPANIED BAGGAGE ON THE BASIS THAT ALL OTHER, LOWER BIDS WERE RESTRICTED TO AWARD OF PRIME CONTRACT AND WERE THEREFORE NONRESPONSIVE.

THE CONTRACTING OFFICER REPORTS THAT THIS SOLICITATION WAS DISTRIBUTED TO 50 PROSPECTIVE CONTRACTORS, 12 OF WHOM RESPONDED BY THE AMENDED BID OPENING DATE, DECEMBER 5, 1968. OF THESE, 5 SUBMITTED BIDS WHICH WERE CONSIDERED RESPONSIVE TO SCHEDULE III OF THE SOLICITATION, WHICH PROVIDES FOR THE INVENTORYING, WEIGHING, STRAPPING, MARKING, PACKING AND LOCAL TRANSPORTATION OF OUTBOUND UNACCOMPANIED BAGGAGE AND FOR THE LOCAL TRANSPORTATION AND UNPACKING OF INBOUND UNACCOMPANIED BAGGAGE. THE BIDS WERE AS FOLLOWS:

ACME MOVING AND STORAGE CO. $ 538,106.36

COLUMBIA VAN LINES MOVING AND STORAGE CO. 629,899.68

MERCHANTS STORAGE CO. OF VIRGINIA 709,156.25

DISTRICT MOVING AND STORAGE, INC. 811,031.46

DELTA VAN AND STORAGE, INC. 1,069,557.50

THE THREE LOW BIDDERS ENCLOSED LETTERS WITH THEIR BIDS STATING THAT THEY WOULD NOT ACCEPT AWARD OF A STANDBY CONTRACT UNDER THE SCHEDULE. THE CONTRACTING OFFICER DETERMINED THAT THE TWO LOW BIDDERS, ACME MOVING AND STORAGE CO. AND COLUMBIA VAN LINES MOVING AND STORAGE CO., WERE NOT RESPONSIBLE FOR REASONS NOT RELATED TO CAPACITY OR CREDIT AND REJECTED THEM ACCORDINGLY. COLUMBIA'S PROTEST AGAINST REJECTION OF ITS BID IS STILL PENDING BEFORE US, AND WILL BE DECIDED AS PROMPTLY AS POSSIBLE. THE PRESENT LETTER ADDRESSES ITSELF SOLELY TO THE QUESTION OF THE VALIDITY OR NON-VALIDITY OF DISTRICT'S PROTEST.

YOU CONTEND THAT MERCHANTS' LIMITATION OF ITS OFFER TO AWARD OF THE PRIMARY CONTRACT FOR THE SCHEDULE III SERVICES RENDERS THE BID NONRESPONSIVE TO THE CONDITIONS CONTAINED IN THE CLAUSE ENTITLED "AWARD (ASPR 22-603.7)" ON PAGE 4 OF THE SOLICITATION. THIS CLAUSE PROVIDES:

"AWARD (ASPR 22-603.7)

AWARD SHALL BE MADE TO THE LOW BIDDER UNDER EACH SCHEDULE FOR EACH ZONE LISTED. THE GOVERNMENT RESERVES THE RIGHT TO AWARD ADDITIONAL CONTRACTS, AS A RESULT OF THIS SOLICITATION, TO THE EXTENT NECESSARY TO MEET ITS ESTIMATED MAXIMUM REQUIREMENTS. TO BE ELIGIBLE FOR AN AWARD, A BIDDER MUST OFFER UNIT PRICES FOR ALL ITEMS UNDER ANY SCHEDULE BID ON. FAILURE TO DO SO SHALL BE CAUSE FOR REJECTION OF THE BID FOR THAT SCHEDULE. ALSO, BIDDERS FAILING TO GUARANTEE DAILY CAPABILITIES IN THE SPACE PROVIDED IN THIS INVITATION FOR BIDS SHALL BE CONSIDERED NOT RESPONSIVE AND INELIGIBLE FOR AWARD. ANY BID WHICH STIPULATES MINIMUM CHARGES OR GRADUATED PRICES FOR ANY OR ALL ITEMS SHALL BE REJECTED FOR THAT SCHEDULE.'

YOUR POSITION IS PRIMARILY PREMISED ON A COMPARISON OF THE PRESENT "AWARD" CLAUSE WITH ITS PREDECESSORS. THE PERTINENT PART OF THIS CLAUSE IN LAST YEAR'S SOLICITATION PROVIDED:

"THE GOVERNMENT RESERVES THE RIGHT TO AWARD SECONDARY CONTRACTS AS STANDBY CONTRACTS AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN ITS BID;,

YOU NOTE THAT THIS YEAR'S "AWARD" CLAUSE DOES NOT CONTAIN THE PHRASE "UNLESS THE BIDDER SPECIFIES OTHERWISE" AND SUGGEST THAT THIS DIFFERENCE REFLECTS A PURPOSEFUL DELETION OF THE PHRASE INTENDED TO WARN BIDDERS THAT BIDS LIMITED TO THE PRIME CONTRACT WOULD BE CONSIDERED NONRESPONSIVE. OTHER WORDS, BIDDERS WOULD NOT BE PERMITTED TO SUBMIT BIDS WHICH "SPECIFY OTHERWISE.'

WE DO NOT ACCEPT THE PREMISE THAT THE PRESENT "AWARD" CLAUSE IS BEST INTERPRETED BY COMPARING IT WITH THE EARLIER CLAUSE AND DEDUCING REASONS FOR THE DIFFERENCES. RATHER, WE BELIEVE THAT THE CLAUSE SHOULD FIRST BE READ ALONE. IF IT IS THEN CAPABLE OF A RATIONAL INTERPRETATION WHICH HARMONIZES WITH THE OTHER PROVISIONS OF THE SOLICITATION, SUCH INTERPRETATION IS TO BE PREFERRED. THE LANGUAGE OF THE PRIOR SOLICITATIONS IS OF COURSE RELEVANT. HOWEVER, CONSIDERATIONS OUTSIDE THE CORNERS OF THE PRESENT SOLICITATION ARE ONLY TO BE USED AS A SECONDARY AID, IN THE EVENT THAT THE PRESENT LANGUAGE IS NOT CAPABLE OF INTELLIGENT INTERPRETATION BY ITSELF.

THE PERTINENT PORTION OF THIS YEAR'S "AWARD" CLAUSE STATES:

"THE GOVERNMENT RESERVES THE RIGHT TO AWARD ADDITIONAL CONTRACTS AS A RESULT OF THIS SOLICITATION TO THE EXTENT NECESSARY TO MEET ITS ESTIMATED MAXIMUM REQUIREMENTS.' THE CONTRACTING OFFICER INTERPRETS THIS TO MEAN THAT THE GOVERNMENT MAY AWARD CONTRACTS TO MORE THAN ONE FIRM WHEN IT IS NECESSARY TO DO SO IN ORDER TO INSURE SUFFICIENT CAPACITY TO MEET ITS CONTEMPLATED NEEDS. THIS WOULD BE DISTINGUISHABLE FROM THE CASE WHERE ONE CONTRACTOR RECEIVES AN EXCLUSIVE RIGHT TO PERFORM ALL OF THE SERVICES CONTEMPLATED. IT DOES NOT NECESSARILY FOLLOW THAT BIDDERS ARE REQUIRED TO ACCEPT POSSIBLE AWARD OF A STANDBY CONTRACT IN ORDER TO REMAIN IN CONTENTION FOR AWARD OF A PRIMARY CONTRACT.

CLAUSE 10 (C) OF STANDARD FORM 33A, INCLUDED IN THIS SOLICITATION PACKAGE, RESERVES THE RIGHT TO THE GOVERNMENT TO MAKE AWARD OF LESS THAN ALL THE SCHEDULE ITEMS "UNLESS THE OFFEROR QUALIFIES HIS BID BY SPECIFIC LIMITATIONS" AND TO MAKE AWARD OF LESS THAN THE ENTIRE QUANTITY OF AN ITEM ,UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER.' THIS CLAUSE REFLECTS THE FACT THAT IN THE ABSENCE OF AN EXPRESS PROVISION TO THE CONTRARY BIDDERS ARE PERMITTED TO CONDITION THEIR BIDS ON THE RECEIPT OF ANY PARTICULAR PORTION OF THE TOTAL AMOUNT OF THE GOODS OR SERVICES TO BE AWARDED. AS WE INTERPRET THE "AWARD" CLAUSE ON PAGE 4, IT EXPRESSLY PROHIBITS BIDS CONDITIONED ON MINIMUM CHARGES OR GRADUATED PRICES AND REQUIRES OFFERS ON ALL ITEMS IN ANY SCHEDULE BID. THE PROHIBITION YOU URGE IS NOT APPARENT, AND CAN ONLY BE DETECTED BY COMPARISON WITH THE PRIOR YEAR'S SOLICITATION. SUCH A PROHIBITION IS AT BEST IMPLIED, NOT EXPRESSED.

THE CONTRACTING OFFICER ALSO ARGUES THAT MERCHANTS' BID IS ACCEPTABLE UNDER THE WELL-ESTABLISHED HOLDINGS THAT "ALL OR NONE" BIDS ARE FOR CONSIDERATION EXCEPT WHERE PROHIBITED EXPRESSLY. 42 COMP. GEN. 748, 35 COMP. GEN. 383. YOU POINT OUT THAT MERCHANTS' LIMITATION IS DIFFERENT FROM THE USUAL "ALL OR NONE" SITUATION. YOU ARGUE THAT "ALL OR NONE" BIDS ARE GENERALLY RELATED TO PARTICULAR BID ITEMS, RATHER THAN WHETHER THE AWARD IS FOR A PRIMARY CONTRACT OR A SECONDARY CONTRACT.

WE AGREE THAT THE PRESENT CIRCUMSTANCES ARE NOT THE SAME AS THOSE WHICH LED TO OUR DECISIONS PERMITTING THE CONSIDERATION OF "ALL OR NONE" BIDS. HOWEVER, WE ARE AWARE OF NO DISTINCTION WHICH WOULD RENDER THE RATIONALE OF THE "ALL OR NONE" BID CASES INAPPLICABLE TO THE PRESENT FACTS. WE ARE THEREFORE OF THE OPINION THAT IN THE ABSENCE OF LANGUAGE IN THE SOLICITATION TO THE CONTRARY, BIDDERS WERE FREE TO RESTRICT THEIR OFFERS TO THE PRIMARY AWARD.

FURTHERMORE, EVEN IF WE WERE TO ACCEPT FOR THE SAKE OF ARGUMENT THE CONTENTION THAT THE PRESENT "AWARD" CLAUSE SHOULD BE INTERPRETED BY COMPARING IT WITH THE ONE USED THE PRIOR YEAR, WE NOTE THAT THIS YEAR'S CLAUSE IS MORE THAN THE OLD ONE WITH THE PHRASE "UNLESS THE BIDDER SPECIFIES OTHERWISE" DELETED. OTHER CHANGES HAVE BEEN MADE IN REFORMULATING THE CLAUSE WHICH SHOULD HAVE A BEARING ON INTERPRETATION. FOR EXAMPLE, THE PHRASE "AT THE UNIT PRICES QUOTED" IS ALSO ABSENT FROM THIS YEAR'S VERSION, OR DELETED FROM LAST YEAR-S, TO USE YOUR TERMINOLOGY. WE THINK THE SENTENCE USED IN THIS YEAR'S SOLICITATION WOULD CONVEY A DIFFERENT MEANING IF THIS PHRASE HAD NOT BEEN DELETED. THAT IS, IF WE WERE TO ACCEPT THE ARGUMENT THAT THE CHANGES BETWEEN THIS YEAR'S SOLICITATION AND LAST YEAR'S ARE DELETIONS IN THE SENSE THAT YOU SUGGEST, THEN THIS YEAR'S SOLICITATION MUST BE VIEWED AS DELETING THE GOVERNMENT'S RESERVED RIGHT TO AWARD SECONDARY CONTRACTS AT THE UNIT PRICES QUOTED.

WE THEREFORE CANNOT ACCEPT THE CONCLUSION THAT THE PHRASE "UNLESS THE BIDDER SPECIFIES OTHERWISE" WAS DELETED TO RESTRICT OFFERS TO THOSE WILLING TO ACCEPT BOTH TYPES OF CONTRACTS.

YOU ALSO ARGUE THAT BECAUSE DISTRICT'S BID WAS PREPARED IN THE BELIEF THAT BIDDERS HAD TO ACCEPT THE POSSIBILITY OF A STANDBY CONTRACT IN ORDER TO BE CONSIDERED FOR A PRIMARY CONTRACT, DISTRICT HAD TO SUBMIT A LESS FAVORABLE PRICE THAN THOSE FIRMS WHOSE BIDS WERE LIMITED TO AWARD OF THE PRIMARY CONTRACT. THIS CIRCUMSTANCE YOU SUGGEST VIOLATES THE BASIC PRINCIPLE UNDERLYING ADVERTISED BIDDING THAT ALL BIDDERS MUST BE BIDDING ON THE SAME BASIS.

WE BELIEVE THAT THE CONTRACTING OFFICER'S ACCEPTANCE OF BIDS LIMITED TO AWARD OF THE PRIMARY CONTRACT WILL NOT VIOLATE THIS PRINCIPLE BECAUSE ALL BIDDERS WERE FREE TO LIMIT THEIR BIDS IN THE SAME FASHION. WHILE QUESTIONS OF CONTRACT INTERPRETATION ARE NOT MATTERS TO BE DETERMINED BY DEMOCRATIC MAJORITIES, THE FACT THAT THREE OUT OF FIVE RESPONSIVE BIDDERS ON THIS SCHEDULE SO LIMITED THEIR OFFERS IS STRONG INDICATION THAT BIDDERS COMPETED ON AN EQUAL BASIS. WE THEREFORE MUST VIEWDISTRICT'S FAILURE TO SIMILARLY PROTECT ITSELF BY SUBMITTING A LIMITED OFFER, IF IT SO DESIRED, AS THE RESULT OF ITS OWN INADVERTENCE OR MISINTERPRETATION OF THE SOLICITATION LANGUAGE, WHICH COULD HAVE BEEN CLARIFIED BY INQUIRY BEFORE BID OPENING.

YOU ALSO RAISE CERTAIN OBJECTIONS TO MERCHANTS' OPERATING AUTHORITY, CONTENDING THAT IT IS INADEQUATE FOR THE SERVICES CONTEMPLATED UNDER SCHEDULE III. IN PARTICULAR, YOU SUGGEST THAT BECAUSE MERCHANTS' OPERATING CERTIFICATES ARE PRIMARILY RADIAL GRANTS BETWEEN THE DISTRICT OF COLUMBIA AND POINTS OUTSIDE, BAGGAGE TRANSFERS ENTIRELY WITHIN THE CONTRACT AREA AND TRANSFERS FROM SUBURBAN RESIDENCES TO SUBURBAN TERMINALS MUST BE ROUTED THROUGH THE DISTRICT OF COLUMBIA. FOR EXAMPLE, UNDER MERCHANTS' OPERATING CERTIFICATES, BAGGAGE TRANSFERRED FROM MANASAS, VIRGINIA, TO DULLES AIRPORT, VIRGINIA, MUST MOVE THROUGH THE DISTRICT OF COLUMBIA. THIS MOVEMENT, YOU CONTEND, DOES NOT SATISFY THE SOLICITATION REQUIREMENT FOR TRANSPORTATION OVER THE SHORTEST PRACTICABLE ROUTES.

SCHEDULE III OF THE SOLICITATION REQUIRES TRANSPORTATION OVER SHORT ROUTES ONLY UNDER ITEMS 19.2 AND 19.3 FOR DRAYAGE PERFORMED IN CONJUNCTION WITH CONTRACT SERVICES ORDERED OUTSIDE OF THE CONTRACT AREA AND FOR DRAYAGE SERVICE ONLY WITHIN THE CONTRACT AREA. ALTHOUGH THESE TWO ITEMS ARE PRICED ON A LOADED MILE BASIS, NO OTHER SCHEDULE III ITEM TAKES MILEAGE INTO ACCOUNT. THE PROCURING ACTIVITY REPORTS THAT SHIPMENTS UNDER THE MILEAGE-PRICED ITEMS COMPRISE LESS THAN FIVE PERCENT OF THE TOTAL ANTICIPATED SERVICES UNDER THE SCHEDULE. THE ESTIMATED QUANTITIES CONTAINED IN THE SOLICITATION SUPPORT THIS CONTENTION THAT ITEMS 19.2 AND 19.3 INVOLVE A SMALL FRACTION OF THE TOTAL SCHEDULE III SERVICES.

THE PROCURING ACTIVITY FURTHER ADVISES THAT WHEN REQUIRED BY THE CONTRACT TERMS, MERCHANTS WILL SUBCONTRACT SHIPMENTS IT CANNOT HANDLE UNDER ITS OWN OPERATING CERTIFICATES OVER THE SHORTEST PRACTICABLE ROUTES. AS A PRACTICAL MATTER THIS SOLUTION WOULD APPEAR TO SATISFY THE GOVERNMENT'S DESIRE TO OBTAIN EXPEDITIOUS AND ECONOMICAL SERVICES FOR THIS PORTION OF THE CONTRACT. IN ADDITION, THIS METHOD OF SUBCONTRACTING SERVICES BEYOND THE PRIMARY CONTRACTOR'S AUTHORITY APPEARS TO COMPLY WITH THE RULES AND REGULATIONS GOVERNING MOTOR CARRIERS. SEE KINGPACK, INC. INVESTIGATION OF OPERATIONS, 103 M.C.C. 318.

YOU ALSO QUESTION WHETHER THIS SUBCONTRACTING ARRANGEMENT CONFORMS WITH THE PRINCIPLES OF ADVERTISED BIDDING BECAUSE THE GOVERNMENT WAS NOT AWARE OF IT AT THE TIME BIDS WERE SUBMITTED. WE ARE OF THE OPINION THAT MATTERS OF RESPONSIBILITY CAN BE DEMONSTRATED AT ANY TIME PRIOR TO THE INITIATION OF PERFORMANCE. 46 COMP. GEN. 326. THIS REASONING IS APPLICABLE TO OBTAINING PROPER OPERATING AUTHORITY FOR MOTOR CARRIERS UNDER OUR DECISION, B-163156, APRIL 11, 1968, 47 COMP. GEN. 531. THE PRESENT SOLICITATION DOES NOT REQUIRE THE BIDDER TO POSSESS COMPLETE CERTIFICATION IN HIS OWN RIGHT, AND WE SEE NO REASON TO READ SUCH A REQUIREMENT INTO THE DOCUMENT. THE CLAUSE ON PAGE 17 ENTITLED"SUB-CONTRACTING (ASPR 22- 603.21)" SPECIFICALLY PERMITS SUBCONTRACTING WHEN APPROVED BY THE CONTRACTING OFFICER IN WRITING IN ADVANCE. WE UNDERSTAND THAT MERCHANTS HAS SATISFIED THIS REQUIREMENT. ACCORDINGLY, WE SEE NO LEGAL OBJECTION TO THE CONTEMPLATED SUBCONTRACTING OF THE NECESSARY PORTIONS OF THE SCHEDULE III SERVICES.

FINALLY, WE NOTE YOUR ARGUMENTS COUNTERING THE POSITION ADVANCED BY THE CHIEF, LOGISTICS AND CONTRACTS BRANCH, JUDGE ADVOCATE GENERAL'S CORPS, IN HIS BRIEF DATED FEBRUARY 12, 1969. THIS BRIEF STATES THAT THE SOLICITATION PERMITS CONSIDERATION OF DUAL PRICES, ONE FOR THE PRIMARY CONTRACT AND ONE FOR THE SECONDARY CONTRACT. AS STATED ABOVE, WE HAVE CONCLUDED THAT THIS SOLICITATION DOES PERMIT CONSIDERATION OF BIDS LIMITED TO THE PRIMARY CONTRACT FOR SERVICES UNDER SCHEDULE III OF THE SOLICITATION. BECAUSE THE QUESTION WHETHER THE SOLICITATION ALSO PERMITTED CONSIDERATION OF OFFERS BASED ON SEPARATE UNIT PRICES IS A SEPARABLE PROBLEM NOT NECESSARY TO THIS CONCLUSION, WE DO NOT DECIDE THE ISSUE. HOWEVER, WE ARE RECOMMENDING TO THE DEPARTMENT OF THE ARMY THAT IF DUAL PRICING BE THOUGHT DESIRABLE, FUTURE SOLICITATIONS SHOULD BE AMENDED TO REFLECT THIS INTENT. FOR THE ABOVE REASONS, WE CONSIDER MERCHANTS' BID TO BE RESPONSIVE TO THE SUBJECT SOLICITATION AND YOUR PROTEST MUST THEREFORE BE DENIED.