B-173389, SEP 2, 1971

B-173389, SEP 2, 1971

BID PROTEST - BID RESPONSIVENESS DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER AN IFB ISSUED BY THE NAVAL SUPPLY CENTER, OAKLAND, CALIF., FOR INSTRUCTIONAL SERVICES. BECAUSE PROTESTANT INSERTED AN AMBIGUOUS STATEMENT CONCERNING THE "ASSUMPTION THAT ADVANCE PAYMENTS WILL BE GRANTED," THE NAVY'S REJECTION OF THE BID AS NONRESPONSIVE WAS PROPER.

TO EAST-WEST LANGUAGE CENTER:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 21, 1971, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BID (IFB) NO. N66314-71-B-2044, ISSUED BY THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, ON MARCH 17, 1971, FOR THE PROCUREMENT OF INSTRUCTIONAL SERVICES AT THE MARE ISLAND NAVAL SHIPYARD.

THE BUYING SUPERVISOR FOR THE PROCUREMENT STATES THAT BEFORE BID OPENING SHE RECEIVED A PHONE CALL FROM A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION (SBA) WHO WAS CALLING ON BEHALF OF A PROSPECTIVE BIDDER FOR THE PROCUREMENT. THE BUYER STATES THAT THE SBA REPRESENTATIVE ASKED WHETHER THE CONCERN WOULD BE AFFORDED THE OPPORTUNITY TO OBTAIN ADVANCE PAYMENTS FOR THE PROCUREMENT.

THE BUYER FURTHER STATES THAT SHE READ PERTINENT PORTIONS OF THE ARMED SERVICES PROCUREMENT REGULATIONS (ASPR) E-404 AND E-407 TO THE REPRESENTATIVE AS FOLLOWS:

"E-404 GENERALLY, EXCEPT FOR (1) NONPROFIT CONTRACTS WITH NONPROFIT EDUCATIONAL OR RESEARCH INSTITUTIONS FOR EXPERIMENTAL, RESEARCH AND DEVELOPMENT WORK, AND (2) CONTRACTS SOLELY FOR THE MANAGEMENT AND OPERATION OF GOVERNMENT-OWNED PLANTS, ADVANCE PAYMENTS SHOULD NOT BE AUTHORIZED UNLESS NO OTHER MEANS OF ADEQUATE FINANCING IS AVAILABLE TO THE CONTRACTOR ...

"E-407 ... ADVANCE PAYMENTS MAY BE GRANTED AT OR AFTER AWARDS OF CONTRACTS MADE ON COMPETITIVE BIDS AFTER FORMAL ADVERTISING ... NOTWITHSTANDING THE ABSENCE OF PROVISION FOR OR WITH REGARD TO ADVANCE PAYMENTS IN THE INVITATION FOR BIDS. BIDS WILL BE REJECTED IF THEY ARE CONDITIONAL, QUALIFIED, OR LIMITED IN SUCH WAY THAT BINDING AWARDS CAN BE MADE ONLY WITH PROVISION FOR ADVANCE PAYMENTS. BIDS SHALL NOT BE TREATED AS NONRESPONSIVE BECAUSE THEY CONTAIN, OR ARE ACCOMPANIED BY OR SUPPLEMENTED BY REQUEST FOR ADVANCE PAYMENTS OR OTHER INDICATION THAT ADVANCE PAYMENTS ARE DESIRED OR NEEDED, SO LONG AS THE ADVANCE PAYMENT ASPECT IS NOT A QUALIFICATION OR LIMITATION OF THE BID. ... "

THE BUYER ALSO STATES THAT SHE PARTICULARLY EMPHASIZED THAT PORTION OF ASPR E-407 WHICH REQUIRES A BID TO BE REJECTED IF THE BID MAKES APPROVAL OF ADVANCE PAYMENTS A CONDITION OF ITS ACCEPTANCE.

WHEN BIDS WERE OPENED ON APRIL 9, 1971, IT WAS NOTED THAT YOUR CONCERN HAD SUBMITTED THE LOWEST BID AND THAT YOU HAD INSERTED THE FOLLOWING STATEMENT IN YOUR BID:

"SINCE WE ARE A SMALL BUSINESS, AND EXPENSES ENTAILED BY THIS CONTRACT WILL BE FAIRLY HIGH - SALARIES, INSTRUCTORS' TRANSPORTATION ... WE HAVE BASED OUR QUOTATION ON THE ASSUMPTION THAT ADVANCE PAYMENTS WILL BE GRANTED BY THE NAVAL REGIONAL FINANCE CENTER, AND WE SHOULD APPRECIATE YOUR SPECIFIC ANSWER ON THAT POINT."

BECAUSE OF THIS STATEMENT, AND PURSUANT TO THE ADVICE OF ITS COUNSEL, THE AGENCY REJECTED YOUR BID AS NONRESPONSIVE.

YOU STATE THAT YOUR BID WAS NOT "CONTINGENT UPON ADVANCED PAYMENT WHICH WOULD HAVE MADE IT CONDITIONAL, BUT WAS ON THE ASSUMPTION, THE ASSUMPTION BEING OUR OWN AND, THEREFORE, UNCONDITIONAL."

IN THIS REGARD, THE NAVY HAS FURNISHED US WITH THE FOLLOWING EXPLANATION CONCERNING THE BASIS FOR THE REJECTION OF YOUR BID:

"THE BIDDER'S WORDS 'BASED OUR QUOTATION ON' COULD WELL MEAN IT WAS PRICED OUT WITHOUT REFLECTING THE INTEREST COSTS OF COMMERCIAL BORROWING AND, THEREFORE, CONDITIONED ON ADVANCE PAYMENTS. THE WORDS 'YOUR SPECIFIC ANSWER ON THAT POINT' COULD BE REASONABLY INTERPRETED TO REQUIRE THAT THE AWARD DOCUMENT MUST EXPRESSLY STATE THAT ADVANCE PAYMENTS ARE GRANTED. THE MOST FAVORABLE VIEW THAT CAN BE TAKEN OF THE LANGUAGE IS THAT IT IS UNCLEAR AS TO WHETHER THE BIDDER WOULD ACCEPT AS BINDING AN AWARD THAT FAILED TO CONTAIN APPROVAL OF ADVANCE PAYMENTS."

WE AGREE WITH THIS ANALYSIS. IN VIEW THEREOF, AND INASMUCH AS IT IS WELL ESTABLISHED THAT WHERE TWO POSSIBLE MEANINGS CAN BE REACHED FROM THE TERMS OF A BID THE BID MUST BE CONSIDERED AMBIGUOUS, AND NOT ELIGIBLE FOR AWARD, WE BELIEVE THE NAVY'S REJECTION OF YOUR BID WAS PROPER. SEE 45 COMP. GEN. 809 (1966).

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.