B-174391, APR 5, 1972

B-174391, APR 5, 1972

BID PROTEST - NONRESPONSIVENESS - TERMINATION FOR CONVENIENCE CONCERNING THE PROTEST OF PAUL WERRES AGAINST AWARD OF A CONTRACT TO SCHRECK INDUSTRIES, INC., UNDER AN IFB ISSUED BY THE MDW PROCUREMENT DIVISION, CAMERON STATION, ALEXANDRIA, VA., FOR A PROCUREMENT OF ELECTRIC FORKLIFTS. SINCE THE SOLICITATION INDICATED A SPECIFIC ACCEPTABLE DEGREE OF DEVIATION, SCHRECK'S DESIGN IN EXCESS OF THAT DEGREE MUST BE CONSIDERED A MATERIAL DEVIATION WHICH THE CONTRACTOR'S GENERAL ASSURANCE OF COMPLIANCE WITH THE GOVERNMENT'S SPECIFICATIONS CANNOT OVERCOME. 46 COMP. GEN. 1 (1966). ALTHOUGH THE ADVERTISED SPECIFICATIONS APPEAR TO HAVE BEEN OVERLY STRINGENT, IN THESE CIRCUMSTANCES TO READVERTISE THE PROCUREMENT WOULD BE FAR MORE PREJUDICIAL TO THE COMPETITIVE BIDDING SYSTEM THAN AN AWARD UNDER THE ORIGINAL SPECIFICATION. 49 COMP. GEN. 211 (1969). ACCORDINGLY, IT IS THE RECOMMENDATION OF THE COMP. GEN. THAT THE AWARD UNDER ITEM 1 BE TERMINATED AT THE CONVENIENCE OF THE GOVERNMENT AND A PROPER AWARD BE MADE UNDER THE TERMS OF THE ORIGINAL SPECIFICATION.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 26, 1971, WITH ENCLOSURES, FROM THE ACTING DEPUTY FOR PROCUREMENT, OFFICE OF THE ASSISTANT SECRETARY, REPORTING ON THE PROTEST OF PAUL WERRES AGAINST THE AWARD OF A CONTRACT TO SCHRECK INDUSTRIES, INC., (SCHRECK) UNDER INVITATION FOR BIDS (IFB) NO. DAHC 30-72-B-0017, ISSUED BY THE MDW PROCUREMENT DIVISION, CAMERON STATION, ALEXANDRIA, VIRGINIA.

THE SUBJECT INVITATION WAS ISSUED ON SEPTEMBER 9, 1971, FOR TWO ELECTRIC FORK TRUCKS (ITEM 1) AND FOR TWO OTHER ELECTRIC FORKLIFT TRUCKS (ITEM 2).

SEVEN BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 28, 1971. THE BID OF SCHRECK IN THE AMOUNT OF $16,818.20 WAS DETERMINED TO BE THE LOW RESPONSIVE BID FOR ITEM NO. 1 AND THE BID OF PAUL WERRES IN THE AMOUNT OF $18,732.00 WAS DETERMINED TO BE THE LOW RESPONSIVE BID FOR ITEM NO. 2. AWARD WAS MADE TO BOTH FIRMS ON OCTOBER 19, 1971.

BY LETTER DATED OCTOBER 22, 1971, WERRES PROTESTED THE AWARD TO SCHRECK OF ITEM NO. 1. WERRES CONTENDS THAT THE DESCRIPTIVE LITERATURE SUBMITTED WITH SCHRECK'S BID RENDERED THE BID NONRESPONSIVE IN THAT IT FAILED TO INDICATE COMPLIANCE WITH THE SPECIFICATIONS. THE SPECIFICATIONS FOR ITEM NO. 1 PROVIDED FOR A REQUIRED FORK TILT OF "5 DEGREES PLUS OR MINUS 1 DEGREE FORWARD AND 5 DEGREES PLUS OR MINUS 1 DEGREE REARWARD." SCHRECK'S DESCRIPTIVE LITERATURE INDICATED A TILT OF 7 DEGREES REARWARD AND 3 DEGREES FORWARD.

A STOP-WORK ORDER WAS ISSUED VERBALLY TO SCHRECK ON OCTOBER 27, 1971, AT WHICH TIME SCHRECK CONTENDS THAT IT HAD COMPLETED 10 PERCENT OF THE CONTRACT. THE CONTRACT WORK IS BEING HELD IN ABEYANCE PENDING OUR DECISION.

PAGE 10 OF THE SUBJECT INVITATION CONTAINED A DESCRIPTIVE LITERATURE CLAUSE WHICH STATES THAT "THE DESCRIPTIVE LITERATURE IS REQUIRED TO ESTABLISH FOR THE PURPOSE OF BID EVALUATION AND AWARD, DETAILS OF THE PRODUCTS THE BIDDER PROPOSES TO FURNISH AS TO COMPLIANCE WITH THE SPECIFICATION IN SECTION M." THE CLAUSE FURTHER STATES THAT "FAILURE OF DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT OFFERED CONFORMS TO THE SPECIFICATIONS AND OTHER REQUIREMENTS OF THE INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID."

THE CONTRACTING OFFICER IN RESPONDING TO WERRES' PROTEST STATES THAT ALTHOUGH THE DESCRIPTIVE LITERATURE ATTACHED TO SCHRECK'S BID SPECIFIED FORK TILT CONTRARY TO THAT STATED IN THE SPECIFICATIONS, A LETTER WAS ATTACHED TO THE BID STATING THAT "WE ARE BIDDING IN FULL COMPLIANCE WITH THE SPECIFICATION REQUIREMENTS." THE CONTRACTING OFFICER CONCLUDES THAT SCHRECK'S BID WAS RESPONSIVE SINCE SCHRECK WOULD BE REQUIRED TO FULLY MEET THE SPECIFICATIONS. IN VIEW OF THE ABOVE, WERRES WAS ADVISED BY LETTER DATED OCTOBER 19, 1971, THAT SCHRECK'S BID WAS RESPONSIVE.

SCHRECK SUBMITTED A LETTER DATED OCTOBER 27, 1971, WHICH STATES THAT THE LITERATURE SUBMITTED WITH THE BID DID SHOW A TILT OF 7 DEGREES REARWARD AND 3 DEGREES FORWARD WHICH IS THE COMPANY'S NORMAL COMMERCIAL PRACTICE, BUT THAT IT WAS INTENDED THAT THE REQUIRED 5 DEGREES OR - 1 FORWARD AND 5 DEGREES OR - 1 REARWARD TILT WOULD BE FURNISHED, AS INDICATED IN ITS TECHNICAL WORK SHEET DATED OCTOBER 18, 1971.

IN THE REPORT TO OUR OFFICE, IT IS STATED THAT ALTHOUGH THE BID OF SCHRECK WAS TECHNICALLY NONRESPONSIVE TO THE INVITATION BECAUSE OF THE SUBMISSION OF NONCOMPLYING DESCRIPTURE LITERATURE, CONTRARY TO THE CONTRACTING OFFICER'S CONCLUSION, SUCH SUBMISSION IS CONSIDERED AS A MINOR DEVIATION WHICH SHOULD HAVE BEEN WAIVED BY THE CONTRACTING OFFICER PURSUANT TO PARAGRAPH 2-405 OF THE ARMED SERVICES PROCUREMENT REGULATION. THAT REGULATION PROVIDES THAT A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS "SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS, HAVING NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, OR DELIVERY OR THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED, AND THE CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF OR BE OTHERWISE PREJUDICIAL TO, BIDDERS."

WERRES STATES, HOWEVER, THAT ITS STANDARD COMMERCIAL PRODUCT, SIMILAR TO THAT OF SCHRECK, HAS A TOTAL FORK TILT OF 7 DEGREES "WHICH MAY BE DIVIDED UP AND DOWN TO SUIT OPERATIONAL REQUIREMENTS." HOWEVER, IN VIEW OF THE GOVERNMENT'S SPECIFICATION, WERRES STATES THAT IT WAS COMPELLED TO OFFER SPECIAL TILT CYLINDERS "IN ORDER TO MEET THE MINIMUM TOTAL TILT OF 8 DEGREES WHICH WAS SPECIFIED." WERRES CONTENDS THAT ITS ADDITIONAL COST FOR THIS SPECIAL TILT AND THE ADDITIONAL TIME REQUIRED TO FURNISH IT HAD A MAJOR EFFECT ON ITS BID PRICE.

ALTHOUGH THE EXTRA COST INCURRED BY WERRES AND OTHER BIDDERS IN MEETING THE TILT SPECIFICATION HAS NOT BEEN CONCLUSIVELY DETERMINED, IT IS CONCEDED BY THE ARMY THAT THE SUPPLEMENTAL CYLINDER PROPOSED BY WERRES TO MEET THE SPECIFICATION WOULD COST $160 PER TRUCK, OR $320 FOR THE 2 TRUCKS CALLED FOR UNDER ITEM 1. WERRES CONTENDS THAT THE COST IS ABOUT $600 PER TRUCK, BUT DECLINES TO STATE THE EXACT AMOUNT ON THE GROUND THAT TO DO SO WOULD PLACE IT AT A COMPETITIVE DISADVANTAGE IN FUTURE SIMILAR PROCUREMENTS. MOREOVER, THE SPECIFICATIONS PROVIDE A RANGE OF OR - 1 FOR DEVIATION FROM THE STATED DEGREE OF TILT. SINCE THE SPECIFICATIONS INDICATE THE DEGREE OF DEVIATION THAT WILL BE TOLERATED, ANY OTHER DEGREE OF DEVIATION MUST BE VIEWED AS EXCEEDING THE PERMISSIBLE LIMITS OF TOLERANCE AND AS REPRESENTING A SUBSTANTIVE DEPARTURE FROM THE ADVERTISED SPECIFICATIONS. THEREFORE, THE BID OF SCHRECK MUST BE REGARDED AS NONRESPONSIVE IN A MATERIAL RESPECT. THE FACT THAT THE COVER LETTER ACCOMPANYING THE SCHRECK BID CONTAINS AN OVERALL OFFER TO COMPLY DOES NOT OVERCOME THE QUALIFICATION IN THE BID DATA. 46 COMP. GEN. 1 (1966) AND 40 ID. 132 (1960).

THE ADMINISTRATIVE REPORT HAS ADVISED THAT A FORK TILT OF 7 DEGREES REARWARD AND 3 DEGREES FORWARD WILL NOT ADVERSELY AFFECT UTILIZATION OF THE TRUCK IN COMMISSARY APPLICATIONS AND THAT THE ADVERTISED SPECIFICATIONS WERE THUS OVERLY STRINGENT. THIS RAISES A QUESTION AS TO WHETHER THE PROCUREMENT SHOULD BE READVERTISED. ALTHOUGH THE GOVERNMENT'S NEEDS WOULD BE SATISFIED BY A TRUCK HAVING A 7-3 TILT, IT APPEARS THAT THE ADVERTISED ITEM WILL BE SATISFACTORY FOR THE GOVERNMENT'S NEEDS. FURTHER, IT DOES NOT APPEAR THAT ANY BIDDER WAS PRECLUDED FROM BIDDING ON THE ADVERTISED SPECIFICATIONS. IN THE CIRCUMSTANCES, THE READVERTISEMENT OF THE PROCUREMENT WOULD BE FAR MORE PREJUDICIAL TO THE COMPETITIVE BIDDING SYSTEM THAN AN AWARD UNDER THE ADVERTISED SPECIFICATION. 49 COMP. GEN. 211 (1969). ACCORDINGLY, WE BELIEVE THAT IN THE CIRCUMSTANCES THE CONTRACT AWARDED TO SCHRECK SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND A PROPER AWARD SHOULD BE MADE UNDER THE ORIGINAL SOLICITATION.

AS THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN, IT IS BEING TRANSMITTED BY LETTERS OF TODAY TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91-510. IN VIEW THEREOF, YOUR ATTENTION IS DIRECTED TO SECTION 236 OF THE ACT WHICH REQUIRES THAT YOU SUBMIT WRITTEN STATEMENTS OF THE ACTION TAKEN WITH RESPECT TO THE RECOMMENDATION. THE STATEMENTS ARE TO BE SENT TO THE HOUSE AND SENATE COMMITTEES ON GOVERNMENT OPERATIONS NOT LATER THAN 60 DAYS AFTER THE DATE OF THIS LETTER AND TO THE COMMITTEES ON APPROPRIATIONS IN CONNECTION WITH THE FIRST REQUEST FOR APPROPRIATIONS MADE BY YOUR AGENCY MORE THAN 60 DAYS AFTER THE DATE OF THIS LETTER.

WE WOULD APPRECIATE ADVICE OF WHATEVER ACTION IS TAKEN ON OUR RECOMMENDATION.