B-172439, AUG 2, 1971

B-172439, AUG 2, 1971

BID PROTEST - CONDITIONAL BID DENIAL OF PROTEST ON BEHALF OF PYROTECHNIC SPECIALTIES, INCORPORATED AGAINST THE AWARD OF A CONTRACT TO SIGNAL SECURITY SIGNALS, INC. PURSUANT TO AN IFB ISSUED BY THE AMMUNITION PROCUREMENT AND SUPPLY AGENCY FOR THE PRODUCTION AND DELIVERY OF IGNITERS. PYROTECHNIC'S BID WAS DISQUALIFIED BECAUSE OF THE INCLUSION OF A REQUEST FOR THE USE OF 4 ADDITIONAL ITEMS OF GOVERNMENT-OWNED SPECIAL TOOLING. ASPR, PARAGRAPH 2-404.2(D) PROVIDES THAT A BID SHOULD BE REJECTED WHEN THE BIDDER ATTEMPTS TO IMPOSE CONDITIONS WHICH WOULD MODIFY REQUIREMENTS OF THE INVITATION OR LIMIT HIS LIABILITY TO THE GOVERNMENT. A WAIVER OF SUCH IRREGULARITY WILL NOT BE APPROVED BY THE COMP. GEN. WHERE THE AMOUNT INVOLVED IS GREATER THAN $200, WHICH IS THE CASE HERE.

TO BYRD, GROOVER & BUFORD:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 2, 1971, AND TO SUBSEQUENT CORRESPONDENCE, RELATIVE TO THE PROTEST SUBMITTED ON BEHALF OF PYROTECHNIC SPECIALTIES, INCORPORATED, BYRON, GEORGIA, AGAINST THE AWARD OF A CONTRACT ON MARCH 26, 1971, TO SIGNAL SECURITY SIGNALS, INCORPORATED, CORDOVA, TENNESSEE, PURSUANT TO INVITATION FOR BIDS NO. DAAA09-71-B-0112, ISSUED JANUARY 21, 1971, BY THE AMMUNITION PROCUREMENT AND SUPPLY AGENCY, DEPARTMENT OF THE ARMY, JOLIET, ILLINOIS, FOR THE PRODUCTION AND DELIVERY OF A SPECIFIED QUANTITY OF IGNITERS.

FOUR BIDS WERE RECEIVED AS OF FEBRUARY 19, 1971, THE SCHEDULED BID OPENING DATE. THE BID OF PYROTECHNIC SPECIALTIES WAS THE LOWEST RECEIVED AND THE BID OF SECURITY SIGNALS WAS THE NEXT LOWEST. THE LOWEST BID QUOTED THE RESPECTIVE TOTAL AMOUNTS OF $718,011.27 AND $718,147.80, BASED UPON DELIVERY, F.O.B. ORIGIN, PREPARED FOR SHIPMENT BY RAIL OR MOTOR TRANSPORTATION. THE NEXT LOWEST BID QUOTED A TOTAL PRICE OF $764,568, BASED UPON DELIVERY, F.O.B. ORIGIN, PREPARED FOR SHIPMENT EITHER BY RAIL OR MOTOR TRANSPORTATION.

THE BID OF PYROTECHNIC SPECIALTIES WAS REJECTED BECAUSE IT WAS FOUND TO CONTAIN A REQUEST FOR THE USE OF 4 ITEMS FOR A PERIOD OF 10 MONTHS OF GOVERNMENT-OWNED SPECIAL TOOLING FOR THE PERFORMANCE OF THIS CONTRACT, WHICH WAS IN ADDITION TO THE ITEMS LISTED BY THE GOVERNMENT OR OTHERWISE CONTEMPLATED AS BEING AVAILABLE FOR USE BY THE SUCCESSFUL BIDDER ON A RENT -FREE BASIS. YOU CONTEND THAT THE SUBMISSION BY PYROTECHNIC SPECIALTIES OF A PARTIALLY COMPLETED FORM 1045A, LISTING FOUR ITEMS OF USED GOVERNMENT -OWNED SPECIAL TOOLING, LATER DETERMINED AS HAVING AN ESTIMATED COST OF $4,850, MERELY CREATED AN UNCLEAR BID, THAT THE SUBMISSION OF THE PARTIALLY COMPLETED FORM WAS A NULLITY AND THAT IT COULD HAVE BEEN WAIVED AS A MINOR INFORMALITY OR IRREGULARITY ON THE BASIS THAT IT DID NOT AFFECT IN ANY SUBSTANTIAL OR MATERIAL RESPECT EITHER THE PRICE, QUALITY, QUANTITY OR DELIVERY OF THE ITEMS CALLED FOR IN THE INVITATION FOR BIDS. YOU ALSO CONTEND THAT THE DEPARTMENT OF THE ARMY, ACTING THROUGH MRS. V. MILANO, CONTRACT SPECIALIST, ACTED IN SUCH A MANNER AS TO WAIVE THE ALLEGED DEFECT IN THE BID.

PROVISIONS CONCERNING THE USE OF GOVERNMENT-OWNED PRODUCTION AND RESEARCH PROPERTY WERE CONTAINED IN PAGES 13, 14, 15 AND 16 OF THE INVITATION FOR BIDS. AT PAGE 13, PROSPECTIVE BIDDERS WERE ADVISED TO THE EFFECT THAT THE GOVERNMENT WAS OFFERING EQUIPMENT LISTED ON FORMS 131 WHICH COULD BE USED BY THE SUCCESSFUL BIDDER IN PERFORMING THE PROPOSED CONTRACT, ON A RENT- FREE BASIS. AT PAGE 14, PROVISIONS WERE MADE WITH RESPECT TO THE PLANNED USE ON A RENT-FREE BASIS OF GOVERNMENT OWNED EQUIPMENT IN THE POSSESSION OF THE SUCCESSFUL BIDDER OR IN THE POSSESSION OF HIS PROPOSED SUBCONTRACTORS OR VENDORS. AT PAGES 15 AND 16, IT WAS PROVIDED THAT A BIDDER WOULD BE REQUIRED TO SUBMIT WITH HIS BID A LIST OF DESCRIPTION OF ALL GOVERNMENT PRODUCTION AND RESEARCH PROPERTY WHICH THE BIDDER OR HIS ANTICIPATED SUBCONTRACTORS PROPOSED TO USE ON A RENT-FREE BASIS. BIDDERS WERE INSTRUCTED TO FURNISH THE LISTING ON CERTAIN ATTACHED FORMS.

PYROTECHNIC SPECIALTIES CHECKED ITEMS ON THE FORMS 131 BUT IT DID NOT SPECIFY IN THE APPROPRIATE SPACES AT PAGE 14 THAT ITS BID WAS PREDICATED ON THE USE OF GOVERNMENT PROPERTY IN ITS POSSESSION OR IN THE POSSESSION OF ITS PROPOSED SUBCONTRACTORS. SINCE THE SPACES AT PAGE 14 WERE NOT CHECKED, THERE WAS NO NECESSITY FOR PROVIDING ANY LISTING OF THE TYPE REFERRED TO AT PAGE 15. YOU INDICATE THAT THE BIDDER SUBMITTED A PARTIALLY COMPLETED FORM 1045A (ONE OF THE ATTACHED FORMS), BASED UPON AN INTERPRETATION THAT A BIDDER WAS REQUIRED TO LIST ANY ITEMS THAT IT PLANNED TO USE OR EVEN CONTEMPLATED USING IN PRODUCING THE ITEMS OF THE PROPOSED CONTRACT.

YOU STATE THAT, WHEN MRS. MILANO MADE A TELEPHONE CALL TO A REPRESENTATIVE OF PYROTECHNIC SPECIALTIES REGARDING ITS BID, SHE CLARIFIED IN ALL RESPECTS THE PRESENCE OF THE PARTIALLY COMPLETED FORM AND DEMONSTRATED BEYOND ANY QUESTION THAT ITS PRESENCE OR ABSENCE DID NOT AFFECT THE PRICE, QUALITY, QUANTITY OR DELIVERY OF THE ITEMS CALLED FOR AND COULD IN NO WAY PREJUDICE THE RIGHTS OF ANY OTHER BIDDERS. IT IS YOUR FURTHER CONTENTION THAT THIS IS NOT THE CASE OF A "CONDITIONED BID," INASMUCH AS THE COMPANY DID NOT CHECK THE SPACES AT PAGE 14 AND THE ITEMS LISTED ON THE PARTIALLY COMPLETED FORM WERE NOT IN THE POSSESSION OF THE COMPANY OR IN THE POSSESSION OF ITS PROPOSED SUBCONTRACTORS OR VENDORS.

THE FORM CONTAINS THE FOLLOWING HEADING: "USED GOVERNMENT-OWNED SPECIAL TOOLING REQUIRED FOR USE IN THE PERFORMANCE UNDER THIS PROPOSAL." ADDITION TO LISTING ON THIS FORM THE 4 ITEMS OF SPECIAL TOOLING, THE BIDDER ALSO INDICATED A 10-MONTH USE PERIOD FOR THE ITEMS ACQUISITION COST AND CERTAIN OTHER INFORMATION CALLED FOR ON THE FORM WERE NOT PROVIDED BY THE BIDDER. IN OUR OPINION, THE SUBMISSION OF THIS PARTIALLY COMPLETED FORM 1045A WAS PROPERLY CONSIDERED AS A BID QUALIFICATION UNDER WHICH THE BIDDER COULD HAVE REFUSED AN AWARD IF THE GOVERNMENT DID NOT AGREE TO FURNISH THE ITEMS OF SPECIAL TOOLING LISTED ON THE FORM, FOR USE IN PERFORMING THE PROPOSED CONTRACT.

IT DOES NOT APPEAR THAT THE DEPARTMENT OF THE ARMY ACTED IN SUCH A MANNER AS TO WAIVE THE ALLEGED DEFECT IN THE BID, ALTHOUGH YOU INDICATE THAT THE ELEMENT OF PRICE EFFECT WAS DISCUSSED IN A TELEPHONE CONVERSATION BETWEEN MRS. MILANO AND A REPRESENTATIVE OF PYROTECHNIC SPECIALTIES. IT IS APPARENT THAT MRS. MILANO DID NOT HAVE THE AUTHORITY IN HER OWN RIGHT TO WAIVE ANY VARIATION OR DEFECT IN THE BID OF PYROTECHNIC SPECIALTIES.

PARAGRAPH 2-404.2(D) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES IN PART AS FOLLOWS:

"ORDINARILY, A BID SHOULD BE REJECTED WHEN THE BIDDER ATTEMPTS TO IMPOSE CONDITIONS WHICH WOULD MODIFY REQUIREMENTS OF THE INVITATION FOR BIDS OR LIMIT HIS LIABILITY TO THE GOVERNMENT, SINCE TO ALLOW THE BIDDER TO IMPOSE SUCH CONDITIONS WOULD BE PREJUDICIAL TO OTHER BIDDERS.

"A LOW BIDDER MAY BE REQUESTED TO DELETE OBJECTIONABLE CONDITIONS FROM HIS BID PROVIDED THESE CONDITIONS DO NOT GO TO THE SUBSTANCE, AS DISTINGUISHED FROM THE FORM, OF THE BID, OR WORK AN INJUSTICE ON OTHER BIDDERS. A CONDITION GOES TO THE SUBSTANCE OF A BID WHERE IT AFFECTS PRICE, QUANTITY, QUALITY OR DELIVERY OF THE ITEMS OFFERED."

BASED ON A RENTAL RATE OF 1 PERCENT PER MONTH FOR SPECIAL TOOLING AS CONTAINED IN SECTION D OF THE SOLICITATION, IT APPEARS THAT THE EVALUATION FACTOR FOR THE $4,850 ADDITIONAL TOOLING REQUESTED BY PYROTECHNIC WOULD BE APPROXIMATELY $485 FOR 10 MONTHS USE. IN FACT IT APPEARS THE CONTRACTING OFFICER CONSIDERED THAT THE SPECIAL TOOLING REQUESTED SHOULD BE EVALUATED AT THE TOTAL ESTIMATED COST RATHER THAN 10-MONTH RENTAL VALUE. IN A LEGAL OPINION BY THE JUDGE ADVOCATE UPON WHICH HE BASED HIS DETERMINATION, A COPY OF WHICH WAS SUPPLIED TO YOU BY OUR OFFICE, IT WAS STATED:

"IT IS ESTIMATED THAT THE ADDITIONAL SPECIAL TOOLING REQUESTED BY PYROTECHNIC WOULD COST $4,850.00. IN 44 COMP GEN 753 (1965), IT WAS STATED THAT ONLY THOSE INFORMALITIES WHICH ARE DE-MINIMIS SHOULD EVER BE WAIVED. AFTER A SUMMARIZATION OF PRECEDING DECISIONS INVOLVING THE EFFECT OF INFORMALITIES UPON PRICE, IT WAS OBSERVED THAT WAIVERS OF MINOR INFORMALITIES HAD NEVER BEEN APPROVED WHERE THE AMOUNT OF DEVIATION WAS AS MUCH AS $200.00. THE COMPTROLLER GENERAL, IN APPLYING THE DE-MINIMIS RULE, STATED:

"ON THE OTHER HAND, WE WOULD NOT BE INCLINED IN THE ORDINARY CASE TO CONSIDER A POSSIBLE DEVIATION OF $1,000 OR MORE AS TRIVIAL OR INSIGNIFICANT IN THE AREA UNDER CONSIDERATION, NO MATTER HOW SMALL A FRACTION OF THE TOTAL COST OR BID DIFFERENCE MIGHT BE. ID. AT 756.

"IN THE LIGHT OF THE COMPTROLLER GENERAL'S HOLDING, PYROTECHNIC'S REQUEST FOR ADDITIONAL SPECIAL TOOLING HAS A SUBSTANTIAL EFFECT ON THE PRICE OF THE SUPPLIES BEING PROCURED. ALLOWING PYROTECHNIC, AFTER THE OPENING OF BIDS, TO DELETE ITS REQUEST FOR ADDITIONAL SPECIAL TOOLING WOULD BE TANTAMOUNT TO PERMITTING THE SUBMISSION OF A NEW BID. 46 COMP GEN 418 (1966). TO AWARD THE PROPOSED CONTRACT TO PYROTECHNIC UPON THE BASIS OF ITS BID WOULD VIOLATE THE LONG RECOGNIZED RULE THAT THE CONTRACT AWARDED THE SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. COMP GEN 508 (1959)."

ALTHOUGH THE JUDGE ADVOCATE USED AN INCORRECT STANDARD IN MEASURING THE PRICE EFFECT OF THE IRREGULARITY IN PYROTECHNIC'S BID, HE WAS CORRECT IN OBSERVING THAT WAIVERS HAVE NOT BEEN APPROVED BY OUR OFFICE WHERE THE AMOUNT INVOLVED WAS AS MUCH AS $200. UNDER THE CIRCUMSTANCES, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER ACTED CONTRARY TO THE REGULATION IN REFUSING TO WAIVE THE DEFECT IN PYROTECHNIC'S BID.

IN THE CIRCUMSTANCES, WE WOULD NOT BE WARRANTED IN TAKING EXCEPTION TO THE REJECTION OF THE BID OF PYROTECHNIC SPECIALTIES. ACCORDINGLY, THE PROTEST SUBMITTED ON ITS BEHALF IS HEREBY DENIED.