B-166138, APR. 11, 1969

B-166138, APR. 11, 1969

TO MILITARY SYSTEMS DIVISION:

REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 7 AND LETTER OF FEBRUARY 27, 1969, PROTESTING THE INTENTION OF THE NAVAL AIR SYSTEMS COMMAND (NAVAIR), WASHINGTON, D.C., TO AWARD A CONTRACT TO ELECTROSPACE CORPORATION UNDER INVITATION FOR BIDS (IFB) NO. N00019-69-B-0089 ISSUED ON NOVEMBER 26, 1968, FOR 5,739 AN/ALE-29A CHAFF DISPENSER COMPONENTS, WITH OPTIONS FOR ANOTHER 2,300 COMPONENTS. AMENDMENT NO. 2 DATED DECEMBER 20, 1968, WHICH IS PERTINENT TO THIS PROTEST, DELETED ITEMS NO. 30, W1 ADAPTER CABLE; NO. 31, W2 ADAPTER CABLE; AND OPTION ITEM NO. 111, W1 ADAPTER CABLE FROM SUBJECT IFB.

UPON A DETERMINATION BY NAVAIR THAT IT WOULD NOT EXERCISE THE OPTIONS AT THE TIME OF THE AWARD, THE NINE BIDS OPENED ON FEBRUARY 6, 1969, WERE EVALUATED FOR THE 5739 COMPONENTS, EXCLUSIVE OF OPTION QUANTITIES, WITH THE FOLLOWING RESULTS:

ELECTROSPACE CORP. $1,047,005.65

VARO INC. 1,212,925.00

BABCOCK ELECTRONICS 1,320,259.47

PIQUA ENGINEERING 1,354,972.81

REPUBLIC ELECTRONIC INDUSTRIES 1,453,441.26

TRACOR INC. 1,479,103.01

GOODYEAR AEROSPACE CORP. 1,643,287.77

SELLS ENGINEERING $1,703,869.00

LUNDY ELECTRONICS 1,742,032.10

YOUR PROTEST IS BASED ON THE CONTENTION THAT THE BID OF ELECTROSPACE CORPORATION IS NONRESPONSIVE TO THE SUBJECT IFB. FIRSTLY, YOU ALLEGE THAT ELECTROSPACE INCLUDED A BID FOR ITEMS 30, 31, AND III, NOTWITHSTANDING THE DELETION OF THOSE ITEMS BY AMENDMENT NO. 2, AND THAT THIS AMOUNTS TO "OMITTING TO BID ON ITEMS CALLED FOR BY THE SOLICITATION, NAMELY, THE LOW BIDDER HAS THE OPTION OF ASSERTING, AFTER BID OPENING, THAT HIS BID WAS SUBMITTED IN ERROR AND THEREFORE HE IS NOT OBLIGATED TO ACCEPT AWARD OF THE OTHER ITEMS.'

PARAGRAPH 10 OF THE "SOLICITATION INSTRUCTIONS AND CONDITIONS" OF THE SUBJECT IFB STATES: "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 SPECIFIES OTHERWISE IN HIS OFFER.' SINCE UNDER THIS PARAGRAPH THE GOVERNMENT IS AUTHORIZED TO MAKE AN AWARD ON LESS THAN ALL ITEMS SCHEDULED OR BID ON, OR FOR A SMALLER QUANTITY OF ANY ITEM, AND ELECTROSPACE'S BID WAS NOT ON AN "ALL OR NONE" BASIS, THE CONTRACTING OFFICER WOULD NOT BE JUSTIFIED IN REJECTING THE LOW BID MERELY BECAUSE IT OFFERED MORE COMPONENTS THAN THE AMENDED IFB. SEE B 162574, JANUARY 10, 1968. THEREFORE, ELECTROSPACE WOULD HAVE NO OPTION BUT TO ACCEPT AWARD FOR WHATEVER ITEMS THE GOVERNMENT CHOSE TO BUY. CONCERNING ELECTROSPACE'S FAILURE TO FOLLOW AMENDMENT NO. 2, WE FREQUENTLY HAVE HELD THAT WHERE DEVIATIONS FROM, OR FAILURES TO COMPLY WITH, THE PROVISIONS OF AN INVITATION, WHICH WOULD NOT AFFECT THE BID PRICE OR THE QUANTITY OR QUALITY OF THE WORK OR SUPPLIES REQUIRED, AS IN THIS CASE, A FAILURE TO ENFORCE SUCH PROVISION WILL NOT INFRINGE UPON THE RIGHTS OF OTHER BIDDERS, AND THE FAILURE TO COMPLY WITH IT MAY BE CONSIDERED AS A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE. SEE 40 COMP. GEN. 321, AT 324. FAILURE TO ACKNOWLEDGE AN ADDENDUM TO THE INVITATION IS SUBJECT TO THE SAME RULE.

SECONDLY, YOU STATE THAT ELECTROSPACE DID NOT SUBMIT A BID ON OPTION ITEM NO. 108, MX-7829/ALE-29A, HOUSING DISPENSER, AND THAT SUCH A FAILURE IS A FATAL OMISSION IN VIEW OF CLAUSE ENTITLED "PRICING OF OFFERS" ON PAGE 12 OF THE SCHEDULE, WHICH PROVIDES THAT OFFERS SUBMITTING PRICES FOR ANY QUANTITIES LESS THAN THOSE CALLED FOR WILL BE REJECTED AS NONRESPONSIVE.

HOWEVER, IN ADDITION TO THAT PROVISION, THE "PRICING OF OFFERS" CLAUSE FURTHER PROVIDES THAT: "OPTION QUANTITY - OFFERORS SHALL ENTER ONLY A UNIT PRICE FOR THE OPTION ITEMS IDENTIFIED ABOVE. A TOTAL PRICE SHALL NOT BE ENTERED FOR OPTION ITEMS. IF THE GOVERNMENT ELECTS TO EXERCISE THE GOVERNMENT OPTION IN THE -OPTION FOR INCREASED QUANTITY- CLAUSE HEREOF AT THE TIME OF AWARD, EACH OFFER WILL BE EVALUATED ON THE BASIS OF THE TOTAL QUANTITY TO BE AWARDED, INCLUDING THE OPTION QUANTITY, BUT IF THE GOVERNMENT DOES NOT SO ELECT, EVALUATION WILL BE ON THE BASIS OF THE QUANTITY TO BE AWARDED EXCLUSIVE OF THE OPTION QUANTITY. SEE THE CLAUSE HEREOF ENTITLED EXERCISE OF OPTION-.'

IN SUPPORT OF YOUR CONTENTION YOU CITE A STATEMENT FROM FEDERAL PUBLICATIONS, CORPORATED,"BRIEFING PAPERS" NO. 66-2, APRIL 1966, THAT OMISSION OF A BID FOR OPTION QUANTITIES WILL CAUSE A BID TO BE REJECTED AS NONRESPONSIVE. THAT STATEMENT CITED TWO DECISIONS OF THIS OFFICE, B- 146233, AUGUST 22, 1961, AND B-149284, JULY 16, 1962. IN THE FIRST-CITED DECISION THE INVITATION FOR BIDS HAD CONTAINED AN EXPRESS PROVISION THAT EACH BIDDER "MUST ALSO SUBMIT A BID COVERING THE OPTION QUANTITY * * * OTHERWISE HIS BID WILL BE CONSIDERED AS NONRESPONSIVE.' IN THE OTHER CASE, THE INVITATION CONTAINED A PROVISION RESERVING TO THE GOVERNMENT THE RIGHT TO EXERCISE AN OPTION TO PURCHASE AN ADDITIONAL QUANTITY, UP TO 25 PERCENT OF THE QUANTITY CONTRACTED FOR, AT THE UNIT PRICE FIXED BY THE CONTRACT, UNLESS A LOWER UNIT PRICE WAS OFFERED IN THE BID FOR THE OPTION. OUR BIDDER ATTEMPTED TO RESTRICT THE GOVERNMENT'S RIGHT BY STIPULATING IN HIS BID THAT ANY OPTION BY THE GOVERNMENT MUST BE EXERCISED AT THE TIME OF THE ORIGINAL CONTRACT AWARD.

THE PRESENT CASE IS, HOWEVER, MORE DIRECTLY CONTROLLED BY OUR DECISION B- 165799, FEBRUARY 27, 1969, WHICH HELD THAT THE FAILURE TO BID ON AN OPTION ITEM DID NOT RENDER THE BID NONRESPONSIVE WHERE THE INVITATION STIPULATED THAT THE OPTION ITEMS SHOULD NOT BE CONSIDERED IN BID EVALUATION AND BIDDERS WERE FREE TO QUOTE ANY PRICES THEY CHOSE FOR THE OPTION ITEMS. THE DECISION STATED:

"SINCE THE OPTION QUANTITIES WERE NOT TO BE EVALUATED AND BIDDERS WERE NOT REQUIRED TO SUBMIT OPTION PRICES -THE SAME- AS THE PRICES BID ON THE LOTS, THEY WERE FREE TO QUOTE UNREALISTICALLY HIGH OPTION PRICES. UNDER THESE CIRCUMSTANCES, WE DO NOT CONSIDER PIQUA'S FAILURE TO SUBMIT OPTION PRICES MATERIAL.' ON THE BASIS OF THAT DECISION WE CONCLUDE THAT THE FAILURE OF ELECTROSPACE TO BID ON OPTION ITEM NO. 108 DID NOT RENDER ITS BID NONRESPONSIVE, AND SINCE THE PROCURING AGENCY DOES NOT PROPOSE TO INCLUDE THE OPTION QUANTITY IN THE CONTRACT AWARD WE FIND NO BASIS FOR OBJECTION ON THAT ACCOUNT TO ACCEPTANCE OF ELECTROSPACE'S BID AS THE LOWEST BID RECEIVED ON THE ITEMS TO BE AWARDED.