B-172899, NOV 12, 1971

B-172899, NOV 12, 1971

BID PROTEST - PREFERENTIAL TREATMENT - MISTAKE IN BID AFFIRMING PRIOR DECISION WHICH DENIED PROTEST BY PROGRESS EQUIPMENT CORPORATION AGAINST AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER AN IFB ISSUED BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS. AS HELD PREVIOUSLY, THE ALLEGED ERROR IN THE GUARANTEED MAXIMUM SHIPPING UNIT WEIGHT SUBMITTED IN PROTESTANT'S BID WAS NOT PROPER FOR CORRECTION - THE DISPARITY BETWEEN PRICES BEING INSUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF AN OBVIOUS ERROR AND BECAUSE NEITHER THE MISTAKE NOR INTENDED BID WAS ASCERTAINABLE FROM THE IFB AND THE BID ITSELF - A PREREQUISITE WHERE THE CORRECTED BID WILL DISPLACE A LOWER BID. SEE ASPR 2-406.3(A)(3). FURTHER, THE CORRECTION BY Z. D. PRODUCTS OF AN ERROR IN THE GOVERNMENT FURNISHED EQUIPMENT FACTOR APPLICABLE TO ITS BID WAS PROPERLY ALLOWED WHERE ALL THE INFORMATION NECESSARY TO COMPUTE THE EVALUATION FACTOR WAS CONTAINED IN ITS BID. ACCORDINGLY, THE PROTEST IS DENIED.

TO PROGRESS EQUIPMENT CORPORATION:

REFERENCE IS MADE TO YOUR TELEFAX OF SEPTEMBER 1 AND YOUR LETTERS OF SEPTEMBER 14 AND 16, 1971, REQUESTING RECONSIDERATION OF OUR DECISION OF AUGUST 23, 1971, DENYING THE PROTEST OF YOUR FIRM AGAINST THE AWARDING OF ANY CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS (IFB) DAAA09-71-B- 0171 (IFB-0171), ISSUED BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY (APSA), JOLIET, ILLINOIS.

OUR DECISION OF AUGUST 23, 1971, HELD THAT AN ALLEGED ERROR IN THE GUARANTEED MAXIMUM SHIPPING UNIT WEIGHT SUBMITTED IN YOUR BID WAS NOT PROPER FOR CORRECTION. WE EXPRESSED THE OPINION THAT THE DISPARITY BETWEEN THE UNIT WEIGHT OF YOUR BID AND THOSE OF TWO OTHER BIDDERS WAS NOT SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF AN OBVIOUS ERROR. FURTHERMORE, EVEN IF THE CONTRACTING OFFICER SHOULD HAVE BEEN PUT ON NOTICE OF ERROR IN YOUR BID, WE STATED THAT THE ERROR COULD NOT PROPERLY BE CORRECTED, SINCE THE CORRECTED BID WOULD DISPLACE A LOWER BIDDER AND NEITHER THE MISTAKE NOR THE INTENDED BID PRICE WAS ASCERTAINABLE FROM THE IFB AND THE BID ITSELF. ASPR 2-406.3(A)(3).

IN THIS REGARD, YOUR LETTER OF SEPTEMBER 14, 1971, CONTENDS THAT YOUR FIRM WAS UNFAIRLY TREATED AND DISCRIMINATED AGAINST IN THAT PREFERENTIAL TREATMENT WAS ACCORDED ANOTHER BIDDER, Z. D. PRODUCTS. YOU STATE THAT Z. D. PRODUCTS WAS PERMITTED TO CORRECT AN ERROR IN THE GOVERNMENT-FURNISHED EQUIPMENT (GFE) FACTOR APPLICABLE TO ITS BID, AFTER BID OPENING, EVEN THOUGH THE REQUIREMENTS OF ASPR 2-406.3(A)(3) WERE NOT MET. IT IS YOUR POSITION THAT IF "EQUAL PREFERENTIAL TREATMENT" WERE GIVEN YOUR FIRM, CORRECTION OF YOUR BID ALSO SHOULD BE ALLOWED.

ON PAGE 14 OF THE INSTANT IFB A PROVISION APPEARED ENTITLED "USE OF GOVERNMENT PRODUCTION AND RESEARCH PROPERTY IN OFFEROR'S POSSESSION," WHICH REQUIRED BIDDERS TO DESCRIBE ALL GOVERNMENT PRODUCTION AND RESEARCH PROPERTY INTENDED TO BE USED ON A RENT-FREE BASIS IN THE PERFORMANCE OF THE CONTRACT UNDER IFB-0171. THIS PROVISION STATED IN PART:

"TO ELIMINATE THE COMPETITIVE ADVANTAGE THAT MIGHT OTHERWISE ARISE FROM THE USE OF EXISTING GOVERNMENT PRODUCTION AND RESEARCH PROPERTY, AN EVALUATION FACTOR SHALL BE ADDED TO EACH OFFER PREDICATED ON THE USE OF EXISTING GOVERNMENT PRODUCTION AND RESEARCH PROPERTY. THE EVALUATION FACTOR WILL BE COMPUTED IN ACCORDANCE WITH THE PROCEDURE SET FORTH IN SECTION D OF THIS SOLICITATION."

THE EVALUATION PROCEDURE WAS SET FORTH ON PAGES 20 THROUGH 22 OF THE IFB UNDER THE CAPTION "EVALUATION PROCEDURE TO ELIMINATE COMPETITIVE ADVANTAGE FROM RENT-FREE USE OF GOVERNMENT PRODUCTION AND RESEARCH PROPERTY." INSOFAR AS IT IS RELEVANT TO THE BID OF Z. D. PRODUCTS, PARAGRAPH A.(1) OF THIS PROVISION STATED THAT FOR CERTAIN MACHINE TOOLS AND SECONDARY METAL FORMING MACHINERY OVER 10 YEARS OF AGE, A MONTHLY RENTAL RATE OF THREE- QUARTERS OF ONE PERCENT (.0075) WOULD BE APPLICABLE. THE PROVISION CONTINUED:

"B. FOR PURPOSES OF EVALUATION ONLY, THE PROPOSED PRODUCTION PERIOD SHALL BE CONSIDERED TO BE SIX (6) MONTHS, COMMENCING WITH THE MONTH OF SEPTEMBER 1971 AND ENDING WITH THE MONTH OF FEBRUARY 1972.

"C. THE OFFEROR SHALL SUBMIT THE USE EVALUATION FACTOR PER UNIT PROCURED, COMPUTED AS FOLLOWS:

TXRXPXS OVER Q C

T TOTAL ACQUISITION COST (INCLUDING COST OF TRANSPORTATION AND INSTALLATION PAID BY THE GOVERNMENT) OF FACILITIES.

R RENTAL RATE

P PRODUCTION PERIOD (MONTHS).

Q QUANTITY OF ITEMS TO BE PRODUCED.

S PRO RATA SHARE, IF APPLICABLE.

C EVALUATION FACTOR TO BE ADDED TO UNIT PRICE. $ "

IN ACCORDANCE WITH THE IFB, Z. D. PRODUCTS IDENTIFIED 10 ITEMS OF GOVERNMENT EQUIPMENT, ALL OVER 10 YEARS OLD AND WITH A TOTAL ACQUISITION COST OF $80,170, WHICH IT PROPOSED TO USE FOR PERFORMANCE OF IFB-0171. FACTOR S (PRO RATA SHARE) WAS INAPPLICABLE TO Z. D. PRODUCTS. THE INVITATION AND THE INFORMATION SUBMITTED BY Z. D. PRODUCTS ESTABLISHED THE FOLLOWING VALUES FOR THE ABOVE FORMULA:

T $80,170

R .0075

P 6

Q 2,277,135

WHICH WHEN INSERTED IN THE FORMULA PRODUCE THE FOLLOWING RESULT:

80,170 X .0075 X 6 OVER 2,277,135 .00158

Z. D. PRODUCTS FAILED TO INSERT ".00158" IN THE BLANK PROVIDED. THE FOLLOWING OCCURRED, AS RELATED IN OUR DECISION OF AUGUST 23, 1971:

"SUBSEQUENTLY, IT WAS DISCOVERED THAT THE GOVERNMENT FURNISHED EQUIPMENT (GFE) EVALUATION FACTOR USED FOR THE EVALUATION OF Z. D. PRODUCTS WAS INCORRECTLY APPLIED. THE CORRECT GFE EVALUATION FACTOR, AS COMPUTED FROM THE CONTRACTOR'S BID, IS $.00158 A UNIT INSTEAD OF $.01580 WHICH WAS ACCIDENTLY USED IN THE ORIGINAL ANALYSIS. AS A RESULT OF THIS MISTAKE, Z. D. PRODUCTS WAS ERRONEOUSLY EVALUATED AS THE FOURTH LOW BIDDER UNDER THE ORIGINAL ANALYSIS. HOWEVER, WHEN Z. D. PRODUCTS' CORRECT GFE FACTOR WAS USED, THAT FIRM'S EVALUATED BID PRICE WAS COMPUTED AS $.419869 A UNIT MAKING Z. D. PRODUCTS THE APPARENT LOW BIDDER. THE AWARD TO ETOWAH WAS CANCELLED ON MAY 14, 1971."

"T" WAS THE ONLY ELEMENT OF THE GFE EVALUATION FACTOR FORMULA WHOSE VALUE WAS DERIVED FROM INFORMATION SUBMITTED BY Z. D. PRODUCTS. THE VALUES OF ALL OTHER ELEMENTS OF THE FORMULA WERE FIXED BY THE TERMS OF THE INVITATION. AT NO TIME HAS Z. D. PRODUCTS ALLEGED ERROR IN THE NUMBER, DESCRIPTION, OR TOTAL ACQUISITION COST OF THE GOVERNMENT EQUIPMENT IT INTENDED TO USE, NOR HAS IT SOUGHT A CHANGE IN ITS BID IN THIS REGARD. THEREFORE, THERE HAS BEEN NO "ERROR" IN THE BID OF Z. D. PRODUCTS WHICH HAS BEEN "CORRECTED."

ALTHOUGH Z. D. PRODUCTS FAILED TO INSERT THE VALUE OF "C" IN THE BLANK PROVIDED, ALL THE INFORMATION NECESSARY TO COMPUTE "C" WAS CONTAINED IN ITS BID. IN A DECISION INVOLVING A SITUATION ANALOGOUS TO THE INSTANT CASE, WE STATED:

" *** A BID COULD HARDLY BE REJECTED FOR THE BIDDER'S FAILURE TO PROVIDE A TOTAL FIGURE IN HIS DESCRIPTIVE LITERATURE, EVEN THOUGH REQUIRED BY THE TERMS OF THE INVITATION, IF SUCH TOTAL CLEARLY REPRESENTED NOTHING MORE THAN THE SUM OF THE SEVERAL ITEMS LISTED. THE REASON FOR THIS IS THAT THE TOTAL FIGURE IS NOT SUBJECT TO VARIANCE AFTER BID SUBMISSION AT THE OPTION OF THE BIDDER BUT IS FIXED BY THE OTHER INFORMATION SUBMITTED AND THE APPLICATION OF A RECOGNIZED MATHEMATICAL PRINCIPLE. REJECTION OF A BID IN THAT INSTANCE, NOTWITHSTANDING THE LANGUAGE OF THE DESCRIPTIVE LITERATURE REQUIREMENT, WOULD BE UNJUSTIFIABLE." 39 COMP. GEN. 595, 598 (1960).

IN VIEW OF THE ABOVE, WE DO NOT BELIEVE THE OMISSION BY Z. D. PRODUCTS REQUIRED REJECTION OF ITS BID.

YOU NEXT CONTEND THAT THE ABOVE-QUOTED PARAGRAPH FROM OUR DECISION OF AUGUST 23, 1971, MAKES IT:

" *** APPEAR THAT THE ONLY CORRECTION TO THE ZD BID WAS ARITHMETICAL. THIS DESCRIPTION IS MISLEADING AND ONLY PARTIALLY CORRECT.

"IT WOULD APPEAR THE IRREGULARITIES CONCERNING THE ZD BID WERE KNOWN BECAUSE REFERENCE TO THEM APPEARED IN THE SUPPLEMENTARY ADMINISTRATIVE REPORT DATED JUNE 30, 1971.

"WE CAN SEE NO JUSTIFICATION OR REASON FOR THE OMISSION OF THE FACT THAT THERE WERE OTHER CHANGES ON THE ZD BID AFTER BID OPENING *** NOR JUSTIFICATION FOR THE OMISSION OF ALL THE FACTS SURROUNDING THE ZD BID OTHER THAN THE AVOIDANCE OF SETTING A PRECEDENT, WHICH IF APPLIED EQUALLY TO PROGRESS WOULD HAVE HAD TO RESULT IN APPROVAL OF THE PROGRESS PROTEST BEFORE AWARD."

IT APPEARS THAT COUNSEL FOR YOUR FIRM, IN A LETTER TO OUR OFFICE DATED JUNE 16, 1971, ASSUMED "THAT Z. D. PRODUCTS WAS PASSED OVER FOR THE ORIGINAL NON-SET-ASIDE AWARD BECAUSE OF SOME DEFECT IN ITS BID OTHER THAN PRICE *** ." THE SUPPLEMENTAL ADMINISTRATIVE REPORT OF JUNE 30, 1971, REPLIED:

"THE ASSUMPTION MADE IN THIS CASE IS BASED ON SUPPOSITION AND NOT FACT. Z. D. PRODUCTS WAS PASSED OVER ORIGINALLY DUE TO AN ERROR IN THE USE OF Z. D. PRODUCTS GFE EVALUATION FACTOR. *** ."

OUR REVIEW OF THE ENTIRE RECORD IN THIS CASE, INCLUDING THE BID OF Z. D. PRODUCTS CONFIRMS THE ADMINISTRATIVE POSITION. OTHER THAN THE OMISSION OF THE VALUE OF "C" IN THE GFE EVALUATION FORMULA, DISCUSSED ABOVE, WE FIND NO EVIDENCE OF RECORD OF OTHER OMISSIONS, OR OF ERRORS OR DEFECTS, IN THE BID OF Z. D. PRODUCTS.

IN YOUR LETTER OF SEPTEMBER 16, 1971, SEVERAL OBSERVATIONS ARE MADE CONCERNING OUR DECISION OF AUGUST 23, 1971. THE FIRST IS THAT THE BREAKDOWN OF THE ORIGINAL UNIT PRICE ANALYSIS OF THE FIVE BIDS WITHIN THE ZONE OF CONSIDERATION FOR THE NON-SET-ASIDE PORTION, APPEARING ON THE FIRST PAGE OF OUR DECISION, IS MISLEADING BECAUSE IT INFERS THAT PROGRESS WAS IN FACT THE FIFTH LOWEST BIDDER (WHICH IT WOULD NOT BE HAD ITS ALLEGED ERROR BEEN CORRECTED) AND BECAUSE IT FAILS TO REFLECT THAT "THE EVALUATIONS WERE REVISED BY JOLIET AFTER OUR PROTEST BECAUSE THEY WERE WRONG HAVING BEEN BASED ON INACCURACIES IN TRANSPORTATION RATES, COMPUTATIONS AND INTERPRETATIONS."

THE SUPPLEMENTAL ADMINISTRATIVE REPORT FURNISHED OUR OFFICE BY THE DEPARTMENT OF THE ARMY INCLUDES AN INTRADEPARTMENTAL MEMORANDUM SETTING FORTH THE ORIGINAL PRICE ANALYSIS OF THE BIDS UNDERLYING THE AWARD OF THE NON-SET-ASIDE PORTION OF THE PROCUREMENT TO ETOWAH MANUFACTURING COMPANY. OUR DECISION OF AUGUST 23 REPRODUCED THIS ANALYSIS PRECISELY AS IT WAS SET FORTH IN THE ADMINISTRATIVE REPORT. IN THE "CORRECTED ANALYSIS" WHICH THEN APPEARS IN THE INTRADEPARTMENTAL MEMORANDUM, ALL FIGURES REMAINED UNCHANGED EXCEPT THE GFE FACTOR FOR Z. D. PRODUCTS, WHICH WAS CORRECTED AS WE HAVE DISCUSSED ABOVE. AS A RESULT OF THE CORRECTED ANALYSIS, Z. D. PRODUCTS BECAME THE LOW BIDDER. YOUR FIRM REMAINED THE FIFTH LOWEST BIDDER. IN VIEW OF OUR CONCLUSION THAT THE ALLEGED ERROR IN YOUR BID COULD NOT PROPERLY BE CORRECTED, AND SINCE Z. D. PRODUCTS' BID WAS RESPONSIVE, WE BELIEVE OUR DECISION OF AUGUST 23 PROPERLY REFLECTED THE BIDDERS' STANDING.

YOU NEXT CONTEND THAT OUR DECISION OF AUGUST 23 ERRONEOUSLY CONCLUDED THAT THE DISPARITY BETWEEN THE GUARANTEED MAXIMUM SHIPPING UNIT WEIGHT OF YOUR BID AND THOSE OF TWO OTHER BIDDERS WAS INSUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF ERROR IN YOUR BID. IN SUPPORT OF YOUR CONTENTION, YOU HAVE FURNISHED CERTAIN CALCULATIONS WHICH YOU STATE DEMONSTRATE THAT THE UNIT WEIGHT SHOULD HAVE BEEN .16760 POUNDS FOR ALL BIDDERS. ADDITIONALLY, YOU CLAIM TO HAVE DISCOVERED AN ERROR IN ETOWAH'S GUARANTEED MAXIMUM SHIPPING DATA WHICH, IF CORRECTED, WOULD MAKE ETOWAH'S DATA THE SAME AS Z. D. PRODUCTS', THUS HEIGHTENING THE DISCREPANCY BETWEEN THE DATA SUBMITTED BY THOSE FIRMS AND THAT SUBMITTED BY YOU.

WE DO NOT BELIEVE THE MATERIAL FURNISHED BY YOU AFFECTS THE VALIDITY OF THE CONCLUSIONS EXPRESSED IN THE FIRST FULL PARAGRAPH OF PAGE 3 OF OUR DECISION OF AUGUST 23. BIDDERS MAY VARY THEIR GUARANTEED MAXIMUM SHIPPING WEIGHTS FOR THE REASONS STATED IN OUR DECISION. OUR OBSERVATION IS NO LESS VALID BECAUSE A PARTICULAR BIDDING PRACTICE HAS NOT BEEN AT ISSUE IN A DECISION OF THIS OFFICE.

THE PRECISE ERROR WHICH YOU ALLEGE EXISTS IN THE ETOWAH BID, AND ITS EXACT EFFECT, DO NOT CLEARLY APPEAR FROM YOUR LETTER. HOWEVER, EVEN IF IT WERE ASSUMED THAT Z. D. PRODUCTS' AND ETOWAH'S GUARANTEED MAXIMUM UNIT SHIPPING WEIGHTS WERE THE SAME, CORRECTION OF YOUR ALLEGED ERROR WOULD NOT BE AUTHORIZED IN VIEW OF THE REQUIREMENTS OF ASPR 2 406.3(A)(3). AS WE OBSERVED IN OUR DECISION OF AUGUST 23, THAT PROVISION PERMITS CORRECTION OF A BID WHICH WOULD DISPLACE ONE OR MORE LOWER BIDDERS ONLY WHERE "THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF." WE REMAIN OF THE OPINION THAT THIS REQUIREMENT HAS NOT BEEN MET IN THE INSTANT CASE. THIS CONNECTION, WE OBSERVE THAT WHILE YOU MAINTAIN THAT ALL BIDDERS SHOULD HAVE SUBMITTED .16760 POUNDS AS THE GUARANTEED MAXIMUM UNIT SHIPPING WEIGHT, YOU ALSO EXPRESS THE BELIEF THAT "DISPARITIES OF REASONABLE DIFFERENCES MAY BE EXPECTED VARYING IN THIS CASE, 2 TO 5% POSSIBLY *** ." IT THUS APPEARS THAT YOU RECOGNIZE THAT BIDDERS MAY DEVIATE TO SOME EXTENT FROM THE UNIT WEIGHT OF .16760 POUNDS. THEREFORE, EVEN SHOULD WE ACCEPT YOUR CONTENTIONS, WE WOULD BE UNABLE TO DETERMINE "SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF" THE UNIT WEIGHT WHICH YOU INTENDED TO BID. IN THE ABSENCE OF SUCH A DETERMINATION, CORRECTION OF YOUR BID WOULD HAVE BEEN IMPROPER.

IN VIEW OF THE FOREGOING, OUR DECISION OF AUGUST 23, 1971, IS AFFIRMED.