B-174381, NOV 26, 1971

B-174381, NOV 26, 1971

BID PROTEST - BID RESPONSIVENESS - BID ON LESS THAN ALL ITEMS DENIAL OF PROTEST BY GREEN SPRING DAIRY, INC. AGAINST THE AWARD OF A CONTRACT TO ANY OTHER COMPANY UNDER AN IFB ISSUED BY THE SUBSISTENCE REGIONAL HEADQUARTERS, NEW YORK, DEFENSE PERSONNEL SUPPORT CENTER, FOR DELIVERIES OF DAIRY PRODUCTS TO SEVERAL MILITARY BASES IN MARYLAND. THE IFB HEREIN DOES NOT REQUIRE THAT BIDDERS BID ON ALL ITEMS AND THE FACT THAT THE PROCUREMENT OFFICE MAY HAVE PREFERRED THAT THEY DO SO DOES NOT CHANGE THE APPLICABLE RULE IN GOVERNMENT PROCUREMENT THAT, UNDER INVITATIONS WHICH DO NOT REQUIRE BIDS ON ALL ITEMS, A BID ON LESS THAN ALL ITEMS IS TO BE REGARDED AS RESPONSIVE. GAO BELIEVES THERE IS NOTHING IN THIS INVITATION WHICH WOULD PRECLUDE AN AWARD OF LESS THAN ALL 23 ITEMS.

TO GREEN SPRING DAIRY, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 27, 1971, PROTESTING ANY AWARD OF A CONTRACT OTHER THAN TO YOUR COMPANY PURSUANT TO INVITATION FOR BIDS NO. DSA136-72-B-0047, DATED JULY 30, 1971, AS AMENDED. THE INVITATION AND A TELEGRAPHIC AMENDMENT THERETO WERE ISSUED BY THE SUBSISTENCE REGIONAL HEADQUARTERS, NEW YORK, DEFENSE PERSONNEL SUPPORT CENTER, DEFENSE SUPPLY AGENCY, WITH A VIEW TOWARD ENTERING INTO ONE OR MORE REQUIREMENTS-TYPE CONTRACTS WITH SMALL BUSINESS CONCERNS FOR DELIVERIES OF MILK AND MILK PRODUCTS, AS ORDERED DURING A SIX-MONTH PERIOD, OCTOBER 1, 1971, THROUGH MARCH 31, 1972, TO COMMISSARY BUILDINGS AND OTHER LOCATIONS WITHIN THE BOUNDARIES OF FORT MEADE, MARYLAND, A DINING HALL AT GAITHERSBURG, MARYLAND, AND THE UNITED STATES COAST GUARD YARD, BUILDING NO. 33, AT CURTIS BAY, MARYLAND.

THE ORIGINAL SCHEDULE OF THE INVITATION FOR BIDS LISTED ESTIMATED QUANTITIES OF MILK AND MILK PRODUCTS UNDER 22 ITEMS. THE FIRST FOUR ITEMS WERE DESCRIBED AS CONSISTING OF WHOLE, FRESH MILK, TYPE I, HOMOGENIZED, PASTEURIZED, VITAMIN D ADDED, IN ONE-HALF PINT, QUART, ONE HALF GALLON AND ONE-GALLON CONTAINERS. UNDER ITEM NO. 03, THE ESTIMATE WAS 820,000 UNITS OF MILK DELIVERED IN ONE-HALF GALLON FIBER CONTAINERS. UNDER ITEM NO. 04, THE ESTIMATE WAS 36,000 UNITS OF MILK DELIVERED IN ONE-GALLON FIBER/PLASTIC CONTAINERS. CERTAIN OF THE QUANTITY ESTIMATES FOR THE ORIGINAL 22 ITEMS WERE INCREASED BY TELEGRAPHIC AMENDMENT DATED SEPTEMBER 8, 1971, BUT NO CHANGE WAS MADE IN THE ITEM NO. 04 QUANTITY ESTIMATE. THE AMENDMENT ADDED THE UNITED STATES COAST GUARD YARD, BUILDING NO. 33, CURTIS BAY, MARYLAND, AS A PLACE FOR MAKING DELIVERIES UNDER THE PROPOSED CONTRACT OR CONTRACTS. IT ALSO PROVIDED FOR THE ADDITION OF AN ITEM NO. 23, DESCRIBED AS COTTAGE CHEESE, PLAIN, TYPE I, SMALL CURD, IN FIVE-POUND PACKAGES, WITH AN ESTIMATED TOTAL QUANTITY OF 240 PACKAGES.

FOUR BIDS WERE RECEIVED AND THE BID OF YOUR COMPANY IN THE TOTAL AMOUNT OF $578,840.45 WAS THE ONLY BID WHICH QUOTED A PRICE ON EACH OF THE 23 ITEMS OF THE AMENDED BID SCHEDULE. THE OTHER THREE BIDS WERE SUBMITTED BY DAIRY MAID DAIRY, INCORPORATED, FREDERICK, MARYLAND; VALLEY OF VIRGINIA MILK PRODUCERS ASSOCIATION, TRADING AS SHENANDOAH'S PRIDE DAIRY, SPRINGFIELD, VIRGINIA; AND IDEAL FARMS DAIRY, INCORPORATED, FREDERICK, MARYLAND. THOSE BIDDERS QUOTED PRICES ON 22 ITEMS OF THE AMENDED BID SCHEDULE WITH THE FIRST BID OMITTING ANY PRICE ON ITEM NO. 04, AND THE OTHER TWO BIDS OMITTING ANY PRICE ON ITEM NO. 23. DAIRY MAID, THE FIRM WHICH FAILED TO SUBMIT A PRICE ON ITEM NO. 04, QUOTED PRICES TOTALING THE AMOUNT OF $540,925.30 FOR THE REMAINING 22 ITEMS. VALLEY OF VIRGINIA, ONE OF THE FIRMS WHICH FAILED TO SUBMIT A PRICE ON ITEM NO. 23, QUOTED PRICES ON THE OTHER 22 ITEMS WHICH TOTALED THE AMOUNT OF $574,168.25. IDEAL FARMS, WHICH ALSO FAILED TO QUOTE A PRICE ON ITEM NO. 23, QUOTED AMOUNTS TOTALING $633,302.40 ON THE OTHER 22 ITEMS. THE FOUR BIDDERS QUOTED ON AN ALL OR NONE BASIS.

PRICES OF $0.855, $0.88 AND $0.89 PER GALLON WERE QUOTED UNDER ITEM NO. 04 OF THE AMENDED BID SCHEDULE BY THREE OF THE FOUR BIDDERS, AND PRICES OF $1.20 AND $1.40 PER FIVE-POUND PACKAGE OF COTTAGE CHEESE, WERE QUOTED UNDER ITEM NO. 23 BY TWO OF THE FOUR BIDDERS. WITH AN ASSUMED VALUE OF APPROXIMATELY $0.86 PER GALLON FOR 36,000 GALLONS OF MILK ESTIMATED FOR DELIVERY UNDER ITEM NO. 04, AND AN ASSUMED VALUE OF APPROXIMATELY $1.25 PER FIVE-POUND PACKAGE OF COTTAGE CHEESE, THE CONTRACTING OFFICER ADDED $31,000 TO THE TOTAL BID OF DAIRY MAID AND $300 TO EACH OF THE TOTAL BIDS SUBMITTED BY VALLEY OF VIRGINIA AND IDEAL FARMS, FOR BID EVALUATION PURPOSES. WITH THOSE ADJUSTMENTS, THE BID OF DAIRY MAID, WITH A TOTAL OF $571,925.30, WAS EVALUATED AS THE LOWEST BID AND THE BID OF VALLEY OF VIRGINIA, WITH A TOTAL OF $574,468.25, WAS EVALUATED AS THE SECOND LOWEST. THE BID OF YOUR COMPANY WAS STILL CONSIDERED AS BEING IN THE TOTAL AMOUNT OF $578,840.45.

YOU CONTEND THAT AN AWARD SHOULD BE MADE TO YOUR COMPANY AS THE ONLY BIDDER WHICH QUOTED PRICES ON ALL 23 ITEMS OF THE AMENDED BID SCHEDULE. YOU REFER TO THE RULE THAT A BID MAY NOT BE CHANGED AFTER OPENING AND SUGGEST THAT THE BIDS OF DAIRY MAID AND VALLEY OF VIRGINIA SHOULD BE REGARDED AS NONRESPONSIVE SINCE IN EACH CASE THE BIDDER FAILED TO QUOTE A PRICE ON ONE ITEM. YOU ALSO SUGGEST AS AN ALTERNATIVE COURSE OF ACTION THAT THE REQUIREMENTS OF THE GOVERNMENT BE READVERTISED IN VIEW OF THE CONFUSION WHICH RESULTED FROM FAILURES OF THREE OF THE FOUR BIDDERS TO QUOTE ON ALL 23 ITEMS.

DAIRY MAID PROTESTS THE MAKING OF AN AWARD TO ANY OTHER COMPANY ON THE BASIS THAT IT IS NOW IN A POSITION TO MAKE DELIVERIES OF MILK IN ONE- GALLON FIBER/PLASTIC CONTAINERS, THAT ITS PRICE IS $0.88 PER GALLON AND, WITH THE USE OF SUCH PRICE, ITS EVALUATED BID PRICE WOULD STILL BE LOWER THAN THAT OF VALLEY OF VIRGINIA. IT IS CONTENDED THAT THE COMPANY WAS NOT GIVEN TIMELY ADVICE WITH RESPECT TO A CHANGE IN THE GOVERNMENT'S REQUIREMENTS WHICH RESULTED IN REQUESTING A PRICE ON AN ESTIMATED QUANTITY OF MILK DELIVERED IN ONE-GALLON CONTAINERS. DAIRY MAID SUGGESTS THAT THE GOVERNMENT'S ESTIMATED REQUIREMENT FOR 36,000 GALLONS OF MILK, AS SPECIFIED IN ITEM NO. 04, COULD BE MET BY INCREASING THE QUANTITIES OF MILK ORDERED FOR DELIVERY IN ONE-HALF GALLON CONTAINERS FOR WHICH DAIRY MAID QUOTED A PRICE OF $0.4039 PER ONE-HALF GALLON, REFLECTING A PRICE OF $0.8078 PER GALLON AS COMPARED WITH THE ITEM NO. 04 PRICE OF $0.855 PER GALLON, DELIVERED IN ONE GALLON CONTAINERS, QUOTED IN THE BID OF VALLEY OF VIRGINIA.

AFTER OBTAINING A LEGAL OPINION, DATED SEPTEMBER 23, 1971, FROM THE OFFICE OF COUNSEL AT THE SUBSISTENCE REGIONAL HEADQUARTERS, COPIES OF WHICH WERE FURNISHED TO DAIRY MAID, VALLEY OF VIRGINIA AND YOUR COMPANY, THE CONTRACTING OFFICER DETERMINED THAT AWARD ON ALL ITEMS OF THE INVITATION FOR BIDS WAS NOT REQUIRED, THAT AN AWARD SHOULD NOT BE MADE TO DAIRY MAID BECAUSE A MAJOR ITEM OF THE PROPOSED PROCUREMENT WOULD BE LEFT UNAWARDED IF ITS BID WAS ACCEPTED, AND THAT AN AWARD TO VALLEY OF VIRGINIA WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, SINCE, IF THE BID OF VALLEY OF VIRGINIA WAS ACCEPTED, THE DEFENSE PERSONNEL SUPPORT CENTER WOULD BE LEFT WITHOUT AN AWARD ONLY WITH RESPECT TO A VERY MINOR ITEM OF 240 PACKAGES OF COTTAGE CHEESE.

PARAGRAPH 10 OF THE INSTRUCTIONS AND CONDITIONS MADE APPLICABLE TO THE INVITATION FOR BIDS (STANDARD FORM 33A), PROVIDES IN PART AS FOLLOWS:

"10. AWARD OF CONTRACT. (A) THE CONTRACT WILL BE AWARDED TO THE RESPONSIBLE OFFEROR WHOSE OFFER CONFORMING TO THE SOLICITATION WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. *** "

SECTION H OF THE BID SCHEDULE PROVIDES IN PART THAT IT IS THE PURPOSE AND INTENT OF THE GOVERNMENT TO OBTAIN ALL OF THE GOVERNMENT'S REQUIREMENTS IN THE MOST EFFICIENT AND EXPEDITIOUS MANNER. SECTION H ALSO PROVIDES THAT, IN ADDITION TO THE FACTORS SET FORTH IN PARAGRAPH 25 OF OPSC CONDITIONS 50A, LOW BIDS ON INDIVIDUAL ITEMS FROM BIDDERS WHO FAIL TO BID ON ALL ITEMS MAY BE FOREGONE BY THE GOVERNMENT IF ACCEPTANCE THEREOF WOULD PREVENT THE GOVERNMENT FROM OBTAINING ALL OF ITS NEEDS FOR ALL ITEMS, AND WOULD FORCE THE GOVERNMENT INTO A SECOND PROCUREMENT FOR THE ITEMS LEFT UNAWARDED. PARAGRAPH 25 OF OPSC CONDITIONS 50A, PROVIDES IN SUBPARAGRAPH (D) THEREOF THAT "UNLESS OTHERWISE SPECIFIED IN THE SCHEDULE, SINGLE LINE ITEMS OR GROUPS OF ITEMS MAY BE AWARDED IN THE BEST INTEREST OF THE GOVERNMENT, UNLESS OFFERS ARE SPECIFICALLY QUALIFIED."

AS INDICATED IN THE LEGAL MEMORANDUM OF SEPTEMBER 23, 1971, THE INVITATION FOR BIDS DOES NOT REQUIRE THAT BIDDERS BID ON ALL ITEMS, AND THE FACT THAT THE PROCUREMENT OFFICE MIGHT HAVE PREFERRED EACH BIDDER TO BID ON ALL ITEMS DOES NOT CHANGE THE APPLICABLE RULE IN GOVERNMENT PROCUREMENT THAT, UNDER INVITATIONS WHICH DO NOT REQUIRE BIDDERS TO BID ON ALL ITEMS, A BID ON LESS THAN ALL ITEMS IS TO BE REGARDED AS RESPONSIVE. 41 COMP. GEN. 721 (1962).

IN OUR OPINION, THERE IS NOTHING IN THE INVITATION FOR BIDS WHICH WOULD PRECLUDE AN AWARD OF LESS THAN ALL OF THE 23 ITEMS TO EITHER DAIRY MAID OR TO VALLEY OF VIRGINIA. AN AWARD COULD BE MADE TO DAIRY MAID, OMITTING THE ITEM NO. 04 REQUIREMENT FOR AN ESTIMATED QUANTITY OF 36,000 GALLONS OF MILK DELIVERED IN ONE-GALLON FIBER/PLASTIC CONTAINERS, OR TO VALLEY OF VIRGINIA, OMITTING THE ITEM NO. 23 REQUIREMENT FOR AN ESTIMATED QUANTITY OF 240 PACKAGES OF COTTAGE CHEESE IN FIVE-POUND PACKAGES. AN AWARD COULD ALSO BE MADE TO YOUR COMPANY AS THE ONLY COMPANY WHICH SUBMITTED A BID ON ALL ITEMS IF DETERMINED THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO MAKE AN AWARD COVERING ALL ITEMS OF THE INVITATION FOR BIDS. INASMUCH AS ALL BIDDERS WERE QUOTING ON AN ALL OR NONE BASIS, THE GOVERNMENT IS PRECLUDED FROM MAKING A SEPARATE AWARD TO ANY OF THE BIDDERS EITHER ON ITEM NO. 04 OR ON ITEM NO. 23.

THE DEFENSE PERSONNEL SUPPORT CENTER DOES NOT PROPOSE TO MAKE AN AWARD TO DAIRY MAID PRIMARILY ON THE BASIS THAT IT CONSIDERS THE ITEM NO. 04 REQUIREMENT A SIGNIFICANT PART OF THE TOTAL ESTIMATED REQUIREMENTS AS SET FORTH IN THE INVITATION FOR BIDS, AS AMENDED, AND ITS POSITION APPEARS REASONABLE. THERE IS A CERTAIN AMOUNT OF CONTROVERSY AS TO WHAT IT MIGHT COST THE GOVERNMENT TO PROCURE PERIODIC DELIVERIES OF MILK IN ONE-GALLON FIBER/PLASTIC CONTAINERS, IF IT HAD TO PURCHASE THE MILK FROM A SOURCE OTHER THAN THE COMPANY WHICH WAS AWARDED A CONTRACT PURSUANT TO THE INVITATION. ALTHOUGH DAIRY MAID NOW STATES THAT ITS PRICE IS $0.88 PER GALLON, IT APPEARS THAT IT MEANS THIS TO BE THE PRICE IT WOULD CHARGE IF AWARDED THE OTHER 22 ITEMS AND NOT THAT THE FIRM WOULD OTHERWISE AGREE TO DELIVER MILK IN ONE-GALLON CONTAINERS DURING A SIX-MONTH PERIOD AT A PRICE OF $0.88 PER GALLON.

IN ANY EVENT, TO CONSIDER THE $0.88 PRICE IN CONNECTION WITH AN AWARD TO DAIRY MAID ON 22 ITEMS WOULD BE IMPROPER SINCE THIS WOULD BE TANTAMOUNT TO PERMITTING THE FIRM TO CHANGE ITS BID AFTER OPENING OF BIDS. OTHERWISE, WE DO NOT AGREE THAT THE GOVERNMENT SHOULD BE PLACED IN THE POSITION OF HAVING TO ORDER MORE MILK IN ONE-HALF GALLON CONTAINERS, NOR DO WE AGREE THAT DAIRY MAID WAS NOT PROVIDED A SUFFICIENT NOTICE THAT THE REQUIREMENTS OF THE GOVERNMENT WOULD INCLUDE DELIVERIES OF MILK IN ONE-GALLON CONTAINERS. THE ITEM NO. 04 REQUIREMENT WAS LISTED IN THE ORIGINAL SCHEDULE OF THE INVITATION ISSUED ON JULY 30, 1971, AND THE BIDS RECEIVED BY THE GOVERNMENT WERE NOT OPENED UNTIL SEPTEMBER 14, 1971. IN OUR OPINION, SUFFICIENT TIME WAS ALLOWED FOR DAIRY MAID TO DECIDE BEFORE SUBMITTING A BID WHETHER IT SHOULD MAKE THE ARRANGEMENTS NECESSARY IN ORDER TO SUPPLY MILK IN ONE GALLON FIBER/PLASTIC CONTAINERS.

IN REGARD TO THE VALLEY OF VIRGINIA BID WHICH OMITTED THE SMALL REQUIREMENT FOR COTTAGE CHEESE, IT IS WITHIN THE PROVINCE OF THE DEFENSE PERSONNEL SUPPORT CENTER TO MAKE AN AWARD TO VALLEY OF VIRGINIA WITHOUT PROVIDING FOR THE DELIVERY OF COTTAGE CHEESE UNDER ITEM NO. 23 OF THE AMENDED BID SCHEDULE, IF THE AGENCY DEEMS SUCH ACTION TO BE DESIRABLE. IS ALSO OUR OPINION THAT THE AGENCY IS NOT REQUIRED TO CANCEL THE INVITATION FOR BIDS AND READVERTISE FOR BIDS UNDER THE CIRCUMSTANCES HERE INVOLVED.

ACCORDINGLY, YOUR PROTEST IN THE MATTER IS DENIED.