B-174097, DEC 29, 1971

B-174097, DEC 29, 1971

BID PROTEST - NONRESPONSIVE BID - ALLEGED PRICE FREEZE VIOLATION DECISION DENYING PROTEST OF THE FOSTER-BELL COMPANY, LOW BIDDER, OF AN AWARD TO J. D. EVANS CO. UNDER A SOLICITATION ISSUED BY THE BUREAU OF INDIAN AFFAIRS. PROTESTANT'S BID WAS DETERMINED NONRESPONSIVE SINCE IT WAS QUALIFIED BY A REFUSAL TO ACCEPT AWARD FOR ITEM 8 ALONE. PROTESTANT ALLEGES THAT THE J. D. EVANS BID IS NONRESPONSIVE AND IN POSSIBLE VIOLATION OF THE PRESIDENT'S WAGE-PRICE FREEZE ORDER. THE PROTEST IS DENIED SINCE THE GOVERNMENT ASSUMES THAT J. D. EVANS AGREES TO DELIVERY ON TIME EVEN IF ROLL-OVER PROTECTION IS DEEMED NECESSARY. HOWEVER, THE AWARD IS WITHHELD PENDING DETERMINATION OF A POSSIBLE VIOLATION OF THE PRESIDENT'S ORDER.

TO WOODS, FULLER, SHULTZ AND SMITH:

REFERENCE IS MADE TO YOUR TELEFAX DATED SEPTEMBER 13, 1971, AND COPY OF LETTER DATED SEPTEMBER 9, 1971, TO THE BUREAU OF INDIAN AFFAIRS, ON BEHALF OF THE FOSTER-BELL COMPANY PROTESTING THE AWARD OF A CONTRACT TO THE J. D. EVANS COMPANY UNDER SOLICITATION NO. A00-3224, ISSUED BY THE BUREAU OF INDIAN AFFAIRS, UNITED STATES DEPARTMENT OF THE INTERIOR.

THE SOLICITATION CALLED FOR BIDS FOR THE RENTAL OF CERTAIN LISTED ROAD CONSTRUCTION EQUIPMENT. THE SOLICITATION ALSO PROVIDED FOR AN OPTION TO PURCHASE THE EQUIPMENT. BY AMENDMENT NO. 1 TO THE SOLICITATION, BID OPENING DATE OF AUGUST 20, 1971, WAS EXTENDED ONE WEEK TO AUGUST 27, 1971, IN ORDER TO GIVE THE BIDDERS AN OPPORTUNITY TO TAKE INTO CONSIDERATION THE EXECUTIVE ORDER 11615, EFFECTIVE AUGUST 15, 1971, RESTRICTING PRICE INCREASES, SALARY INCREASES AND WAGE INCREASES. FOUR BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION. THE FOSTER-BELL BID WAS DETERMINED NONRESPONSIVE, EXCEPT AS TO ONE ITEM. THE J. D. EVANS COMPANY IS THE APPARENT LOW RESPONSIVE BIDDER.

THE PROTEST OF ANY AWARD TO J. D. EVANS IS PREDICATED UPON THE FOLLOWING BASES INDICATED IN YOUR TELEFAX OF SEPTEMBER 13;

1. THE FOSTER-BELL COMPANY TOTAL RENTAL BID IS OVER $60,000 LESS THAN THE BID OF J. D. EVANS COMPANY.

2. THE J. D. EVANS COMPANY BID IS "NONRESPONSIVE IN STATING THAT EQUIPMENT DELIVERY NOT MEETING SPECIFICATIONS, SPECIFICALLY ROPS (ROLL OVER PROTECTION), EXCEPT AT UNSPECIFIED FUTURE DATE."

3. THE SPECIFICATIONS FOR ITEMS 1 AND 2 ARE DISCRIMINATORY. IN A LETTER DATED SEPTEMBER 9, 1971, TO THE CONTRACTING OFFICER, THIS CONTENTION IS EXPANDED UPON, STATING THAT BIDDERS ARE PERMITTED THE OPTION OF BIDDING ONLY THOSE MODELS MOST COMPETITIVE EVEN THOUGH, FOSTER-BELL CONTENDS, THE MINIMUM RATED FLYWHEEL HORSEPOWER SPECIFIED FOR THE EQUIPMENT UNDER THESE TWO ITEMS IS INADEQUATE TO EFFECTIVELY OPERATE THE MACHINERY FOR THE PURPOSE INTENDED.

4. THE J. D. EVANS BID IS IN POSSIBLE VIOLATION OF THE PRESIDENT'S WAGE- PRICE FREEZE ORDER OF AUGUST 15, 1971.

5.THE BID EVALUATION CRITERIA SET FORTH IN THE SOLICITATION SHOULD HAVE INCLUDED A RESALE VALUE OR SELLER BUY-BACK OF THE EQUIPMENT TO ESTABLISH RESIDUAL VALUE.

PARAGRAPH GC-4, DELIVERY, OF THE GENERAL CONDITIONS-EQUIPMENT RENTAL, SPECIFICALLY PROVIDES THAT ALL EQUIPMENT SHALL BE DELIVERED F.O.B. DESTINATION WITHIN FIFTEEN CALENDAR DAYS AFTER RECEIPT OF ORDER, UNLESS OTHERWISE PROVIDED OR INSTRUCTED. THE SOLICITATION CONTAINED NO CONTRARY PROVISION. PARAGRAPH GC-14E CONCERNING THE EVALUATION OF BIDS INCLUDES AS ONE OF THE ELEMENTS "CONTRACTOR'S AGREEMENT TO MEET DELIVERY SCHEDULE AS SPECIFIED." THE FOSTER-BELL BID TOOK EXCEPTION TO THE DELIVERY SCHEDULE FOR ALL ITEMS EXCEPT ITEMS 6 AND 8, WHERE 2 WEEK DELIVERY WAS OFFERED. THE BID WAS FURTHER QUALIFIED BY THE REFUSAL TO ACCEPT AWARD FOR ITEM 8 UNLESS AWARDED ITEMS 2, 3, 4 AND 7. HENCE, THE ONLY ITEM FOR WHICH FOSTER -BELL IS RESPONSIVE AND ELIGIBLE FOR AWARD IS ITEM 6.

IN SUPPORT OF YOUR SECOND CONTENTION YOU CITE THE STATEMENT CONTAINED IN THE J. D. EVANS BID ON ITEM 7 THAT "ROLL-OVER PROTECTION MAY HAVE TO BE ADDED TO UNIT IN FIELD IN ORDER TO MEET DELIVERY." WE VIEW THIS STATEMENT AS AN INDICATION THAT DELIVERY OF THE ITEM WOULD BE MADE ON TIME EVEN IF NECESSARY TO INSTALL THE ROLL-OVER PROTECTION AT POINT OF DELIVERY. SEE NOTHING IN THIS STATEMENT TO RENDER THE BID ON THE ITEM NONRESPONSIVE.

THE THIRD CONTENTION ALLEGES THAT SPECIFICATIONS FOR ITEMS 1 AND 2 ARE DISCRIMINATORY. THE ADMINISTRATIVE OFFICE STATES THAT THE SPECIFICATIONS WERE DRAFTED TO REFLECT WHAT THE BUREAU CONSIDERS TO BE ITS MINIMUM NEEDS, AND FURTHER, THAT EVEN THOUGH FLY-WHEEL HORSEPOWER IN EXCESS OF THAT SPECIFIED WOULD UNDOUBTEDLY BE DESIRABLE, THE HORSEPOWER SPECIFIED IS ADEQUATE FOR THE CONTEMPLATED USE.

THE DRAFTING OF SPECIFICATIONS REFLECTING THE MINIMUM NEEDS OF THE GOVERNMENT AND THE DETERMINATION WHETHER ITEMS OFFERED BY BIDDERS MEET SUCH NEEDS ARE PRIMARILY THE RESPONSIBILITY OF THE CONTRACTING AGENCY. HERE, THE ADEQUACY OF THE SPECIFICATIONS TO ACCOMPLISH THE MINIMUM NEEDS IS A MATTER OF JUDGMENT ON THE PART OF TECHNICAL EXPERTS. OUR REVIEW OF THE FILE INDICATES NO BASIS FOR QUESTIONING THE JUDGMENT OF THE CONTRACTING AGENCY. FURTHERMORE, YOUR OBJECTION TO THE SPECIFICATIONS WOULD HAVE BEEN MORE APPROPRIATE HAD IT BEEN MADE PRIOR TO BID OPENING.

IN SUPPORT OF YOUR ALLEGATION THAT THE J. D. EVANS BID MAY BE IN VIOLATION OF THE WAGE-PRICE FREEZE, EXECUTIVE ORDER 11615 OF AUGUST 15, 1971, YOU REFER TO THE BID PRICES UNDER ITEMS 1 AND 4 OF THE INSTANT SOLICITATION AS COMPARED TO EQUIPMENT REQUIRED UNDER ALTERNATE ITEM 1 AND ITEM 3 OF AN EARLIER SOLICITATION (SOLICITATION A00-3170, ISSUED MAY 6, 1971, BY THE BUREAU OF INDIAN AFFAIRS, ABERDEEN AREA OFFICE, WITH BID OPENING ON MAY 25, 1971). IT IS REPORTED THAT THE EARLIER SOLICITATION (A00-3170) WAS CANCELLED BECAUSE IT WAS DETERMINED TO BE DEFECTIVE.

AN EXAMINATION OF THE EARLIER BID SHOWS THAT THE SELLING PRICE OF BOTH ITEMS WAS QUOTED AT THE SAME SELLING PRICE IN THE INSTANT SOLICITATION. THE MONTHLY RENTAL PRICES, AS YOU HAVE INDICATED, ARE HIGHER, BY MORE THAN 18 PERCENT, IN THE LATER BID. HOWEVER, THE PERCENTAGE OF RENTAL FEE THAT WILL APPLY TO THE PURCHASE PRICE HAS BEEN INCREASED FROM 90 PERCENT IN THE EARLIER SOLICITATION TO 100 PERCENT IN THE INSTANT SOLICITATION. BECAUSE THE APPARENT OVERALL COST TO THE GOVERNMENT INVOLVED IN ITS RIGHT TO PURCHASE THE EQUIPMENT WAS DECREASED UNDER THE INSTANT SOLICITATION, THE CONTRACTING OFFICER FELT THAT THE J. D. EVANS' BID WAS NOT IN VIOLATION OF THE EXECUTIVE ORDER. HOWEVER, AWARD UNDER THE SOLICITATION HAS BEEN WITHHELD PENDING OUR DECISION ON YOUR PROTEST.

THE EXECUTIVE ORDER PROVIDES IN SECTION 1 THAT PRICES, RENTS, WAGES, AND SALARIES SHALL BE STABILIZED FOR A PERIOD OF 90 DAYS FROM THE DATE THEREOF AT LEVELS NOT GREATER THAN THE HIGHEST PERTAINING TO A SUBSTANTIAL VOLUME OF ACTUAL TRANSACTIONS FOR LIKE OR SIMILAR GOODS OR SERVICES. ADDITION, THE ORDER PROVIDES FOR THE ESTABLISHMENT OF A COST OF LIVING COUNCIL TO CARRY OUT ITS PURPOSES. IT WAS NOT UNTIL SEPTEMBER 14, 1971, THAT THE FEDERAL PROCUREMENT REGULATIONS WERE AMENDED TO FACILITATE THE STABILIZATION OF PRICES, RENTS, WAGES AND SALARIES IN CONNECTION WITH FEDERAL PROCUREMENT. FEDERAL REGISTER, VOLUME 36, NO. 178, SEPTEMBER 14, 1971. THIS REGULATION PROVIDES FOR THE CERTIFICATION BY OFFERORS THAT PRICES QUOTED ARE IN ACCORD WITH THE EXECUTIVE ORDER. IT STATES IN PART:

"IN FORMALLY ADVERTISED PROCUREMENTS, WHERE THE INVITATION FOR BIDS DID NOT INCLUDE THE CERTIFICATION REQUIREMENT AND THE REQUIREMENT WAS NOT INCLUDED BY AN AMENDMENT OF THE INVITATION, AWARDS SHALL BE MADE IN ACCORDANCE WITH ESTABLISHED PROCEDURES. PRIOR TO AWARD, HOWEVER, SUCH BIDDERS SHALL BE NOTIFIED IN THE SAME MANNER PROVIDED IN SEC 1-1.321-2 FOR EXISTING CONTRACTS THAT THEY WILL BE SUBJECT TO THE PROCEDURES OF THE APPLICABLE PRICE CERTIFICATION PRESCRIBED IN SEC 1-1.321-2." FPR SEC 1- 1.321-3(D).

THE AMENDMENT TO THE REGULATION ALSO PROVIDES THAT INVOICES ARE NOT TO BE PAID UNLESS PROPERLY CERTIFIED.

IN OUR DECISION OF NOVEMBER 17, 1971, B-173949, WE HELD IN AN ANALOGOUS SITUATION THAT:

" *** AWARD MUST BE BASED UPON EVALUATION OF BIDS AS SUBMITTED WHICH CONSTITUTE THE ONLY OFFERS SUBJECT TO ACCEPTANCE BY THE GOVERNMENT. DEPART FROM AN AWARD BASED UPON THE BIDS SUBMITTED WOULD BE TO ENGAGE IN THE MEREST SPECULATION AS TO WHAT A PARTICULAR OFFEROR WOULD HAVE BID HAD HE BEEN AWARE OF THE LIMITATIONS ESTABLISHED BY THE EXECUTIVE ORDER. IS ONLY AFTER AN AWARD ON THE BASIS OF THE PRESCRIBED PROCEDURES THAT THE EFFECTS OF THE STABILIZATION ORDER BECOME OPERATIVE."

WE FIND NOTHING TO INDICATE THAT ACCEPTANCE OF THE EVANS BID WOULD PER SE VIOLATE THE EXECUTIVE ORDER.

RELATIVE TO THE FIFTH CONTENTION, THE ADMINISTRATIVE OFFICE COMMENTS THAT:

"SINCE THE BUREAU WOULD NOT BE IN ANY POSITION TO KNOW WITH ANY DEGREE OF CERTAINTY AT THE TIME BIDS WERE OPENED HOW LONG THE EQUIPMENT WOULD BE USED OR WHETHER AT THE END OF THIS UNDETERMINABLE USE PERIOD THAT IT COULD REPLACE THE EQUIPMENT, THE ADDITION OF SUCH AN EVALUATION FACTOR WOULD APPEAR TO BE HIGHLY SPECULATIVE AND NOT A PROPER BASIS ON WHICH TO EVALUATE BIDS. BUT MORE IMPORTANT, IF FOSTER-BELL DID NOT BELIEVE THAT IT WAS POSSIBLE TO EVALUATE BIDS AS SET FORTH IN THE SOLICITATION ITS PROTEST SHOULD HAVE BEEN LODGED PRIOR TO THE TIME BIDS WERE OPENED RATHER THAN AFTER THE BID PRICES WERE REVEALED."

WE BELIEVE THESE COMMENTS ARE WELL TAKEN AND ARE DISPOSITIVE OF THIS CONTENTION WITHOUT FURTHER COMMENT ON OUR PART.

ACCORDINGLY, WE MUST DENY YOUR PROTEST.