B-180237, MAR 29, 1974

B-180237, MAR 29, 1974

BID ON LINE ITEM PROVIDING CREDIT FOR VALUE OF SILVER RECOVERED FROM REFINING PROCESS WHICH IS QUALIFIED BY CONDITION THAT AMOUNT CREDITED WILL BE LESS UNSPECIFIED REFINING COSTS IS UNCERTAIN AND INDEFINITE AND THEREFORE NOT FOR CONSIDERATION IN EVALUATING BIDS TO DETERMINE LOW AGGREGATE BIDDER.

TO H. R. SIMON AND CO., INC.:

INVITATION FOR BIDS (IFB) NO. 6516-0-4-009-BM WAS ISSUED ON OCTOBER 4, 1973, BY THE DISTRICT OF COLUMBIA GOVERNMENT (D.C. GOVERNMENT), FOR SOLUTION SERVICE, MAINTENANCE AND REPAIR OF X-RAY FILM PROCESSORS. BIDS WERE RECEIVED FROM TWO FIRMS, H. R. SIMON AND CO., INC. (SIMON), AND S&W X -RAY CHEMICAL SERVICE, INC. (S&W).

ITEM 10 OF THE IFB PROVIDES:

"PERCENT OF MARKET PRICE PER TROY OUNCE OF SILVER RECOVERED FROM USED X- RAY FILM PROCESSOR SOLUTION TO BE DEDUCTED FROM COST OF ITEMS 1 THRU 9 ABOVE, AS SPECIFIED HEREIN

"ESTIMATED ANNUAL VALUE: $6,000.00"

AS AN EXPLANATION OF ITEM 10, THE SPECIFICATIONS PROVIDE:

"THIS ITEM COVERS THE AMOUNT TO BE CREDITED TO THE DISTRICT FOR SILVER RECOVERED FROM THE SOLUTIONS IN THE VARIOUS X-RAY PROCESSORS OWNED BY THE DISTRICT. THE PERCENT PER TROY OUNCE SHALL BE THE PERCENTAGE OF THE HIGH MARKET PRICE OF SILVER QUOTED IN WALL STREET JOURNAL ON THE SECOND WEDNESDAY OF EACH MONTH (DATE PREVIOUS IF WEDNESDAY IS A HOLIDAY). THE CONTRACTOR'S METHOD OF RECOVERY WILL PERMIT AN ASSAY OF NOT LESS THAN 90% OF SILVER RECOVERY FROM THE EQUIPMENT OWNED AND USED. THE CONTRACTOR WILL BE RESPONSIBLE FOR THE SECURITY OF ANY SUCH RECOVERY EQUIPMENT THAT IS UTILIZED ON THE PREMISES UNDER JURISDICTION OF THE DISTRICT. ALLOWANCE GIVEN MUST BE MADE ON ACTUAL SILVER CONTENT OF THE SOLUTIONS USED DURING TERM OF CONTRACT, ESTIMATED TO BE APPROXIMATELY 15,370 GALLONS ANNUALLY OF FIXERS OR REPLENISHERS CALCULATED ON ASSAY MADE BY EXPERIENCE. THE CONTRACTOR WILL BE RESPONSIBLE FOR PROVIDING SUFFICIENT CONTAINERS, DELIVERY CONTAINERS, ETC., FOR THE COLLECTION AND DELIVERY OF ALL OPERATIONS TO MEET THE REQUIREMENTS OF THIS BID AND THE TERMS OF CONTRACT. CONTRACTORS SHALL GIVE CERTIFICATION ON EACH MONTH'S INVOICES, THE EXACT NUMBER OF TROY OUNCES OF SILVER RECOVERED IN THE PRIOR MONTH."

SIMON INITIALLY WAS DETERMINED TO BE THE AGGREGATE LOW BIDDER ON ITEMS 1 THROUGH 10 WITH AN EVALUATED NET PRICE OF $42,985.13. S&W OFFERED AN EVALUATED NET PRICE OF $48,340.21. THE CONTRACTING OFFICER DETERMINED THAT SIMON WAS NONRESPONSIVE. THIS DETERMINATION WAS PREDICATED IN PART UPON SIMON'S RESPONSE OF 100-PERCENT NET TO ITEM 10 OF THE SOLICITATION.

ON NOVEMBER 30, 1973, SIMON WAS ORALLY INFORMED BY A REPRESENTATIVE OF THE D.C. GOVERNMENT THAT ITS BID WAS CONSIDERED TO BE NONRESPONSIVE. LETTER DATED DECEMBER 3, 1973, SIMON PROTESTED THE REJECTION OF ITS BID AS NONRESPONSIVE TO THE D.C. GOVERNMENT. AWARD WAS MADE TO S&W ON DECEMBER 4, 1973, PRIOR TO RECEIPT BY THE D.C. GOVERNMENT OF SIMON'S PROTEST.

BY LETTER DATED DECEMBER 6, 1973, AND SUBSEQUENT CORRESPONDENCE, SIMON PROTESTED TO OUR OFFICE THE AWARD OF THE CONTRACT UNDER THE ABOVE REFERENCED IFB TO S&W. SIMON CONTENDS THAT ITS RESPONSE TO ITEM 10 OF THE IFB - 100-PERCENT NET - IS RESPONSIVE. IN ADDITION, SIMON QUESTIONED WHETHER S&W WAS IN COMPLIANCE WITH THE "PROPOSED REQUIREMENTS AS TO AN APPROVED EMPLOYEE PENSION PLAN;" AND WHETHER S&W SUBMITTED A FEDERAL EMPLOYER INFORMATION REPORT (EEO-1) IN ACCORDANCE WITH THE REQUIREMENTS OF THE IFB.

PURSUANT TO SECTION 20.9 OF THE GAO INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 CFR PART 20, SIMON REQUESTED A CONFERENCE ON THE PROTEST. FEBRUARY 6, 1974, A CONFERENCE WAS HELD WITH REPRESENTATIVES OF SIMON, THE D.C. GOVERNMENT AND OUR OFFICE. REPRESENTATIVES OF S&W WERE INVITED TO THE CONFERENCE BUT FAILED TO ATTEND. AT THE CONFERENCE, THE REPRESENTATIVES OF SIMON WITHDREW THAT PORTION OF THE PROTEST QUESTIONING THE COMPLIANCE OF S&W NOTED ABOVE.

AS PREVIOUSLY INDICATED, THE SIMON BID ON ITEM 10 STATES 100-PERCENT NET. IN ADDITION, AN ATTACHMENT TO THE BID CONTAINS THE FOLLOWING EXPLANATION OF THIS TERM:

"SILVER RECOVERY PROGRAM

"BIDDER WILL REMOVE ALL OLD FIXER FOR SILVER RECOVERY IN BULK AND PROCESS AT HIS PLANT,

"CREDIT WILL BE BASED ON THE FOLLOWING FORMULA:

"NUMBER OF GALLONS OF OLD FIXER X NET RECOVERABLE SILVER CONTENT LESS REFINING COSTS NET OZS.

"THEN: NET OZ. X SPOT MARKET PRICE CREDIT."

THE BID OF 100-PERCENT NET, AS EXPLAINED BY THE FORMULA ATTACHED TO THE BID, STATES, IN EFFECT, THAT SIMON WILL CREDIT THE D.C. GOVERNMENT WITH THE VALUE OF ALL SILVER RECOVERED LESS REFINING COSTS. THE PROCURING ACTIVITY MAINTAINS THAT IS NOT AN OBLIGATION TO FURNISH THE D.C. GOVERNMENT WITH CREDIT FOR A SPECIFIC PERCENTAGE OF THE SILVER RECOVERED FROM THE FILM PROCESSING SOLUTION AS REQUIRED BY THE TERMS OF ITEM 10 OF THE IFB. THE D.C. GOVERNMENT CONCLUDES THAT THE SIMON BID THEREFORE IS NONRESPONSIVE.

IT SHOULD BE NOTED THAT THE METHOD OF EVALUATION UTILIZED BY THE D.C. GOVERNMENT IN DETERMINATION OF THE LOW BIDDER UNDER THE IFB WAS TO MULTIPLY THE PERCENTAGE BID ON ITEM 10 BY THE ESTIMATED VALUE OF SILVER RECOVERED AND TO SUBTRACT THE PRODUCT FROM THE TOTAL OF ITEMS 1 THROUGH 9. ACCORDINGLY, THE S&W BID OF 90-PERCENT FOR ITEM 10 WAS MULTIPLIED BY $6,000 AND THE PRODUCT OF $5,400 WAS SUBTRACTED FROM THE TOTAL OF ITEMS 1 THROUGH 9 IN ARRIVING AT THE AGGREGATE BID FOR S&W. WHEN THE BID OF SIMON INITIALLY WAS EVALUATED, THE SIMON BID OF 100-PERCENT NET WAS INTERPRETED AS 100 PERCENT. THEREFORE, $6,000 FOR ITEM 10 WAS SUBTRACTED FROM THE TOTAL OF ITEMS 1 THROUGH 9 IN DETERMINING THE AGGREGATE BID FOR SIMON. HOWEVER, THE RESPONSE OF 100-PERCENT NET COULD NOT CORRECTLY BE INTERPRETED AS MEANING THAT SIMON WOULD ISSUE A CREDIT TO THE D.C. GOVERNMENT FOR THE TOTAL VALUE OF THE SILVER RECOVERED. AS THE FORMULA OF SIMON INDICATES, THE COST OF REFINING WOULD BE DEDUCTED FROM THE VALUE OF THE RECOVERED SILVER. HOWEVER, THERE IS NOTHING IN THE SIMON BID WHICH FIXES THE REFINING COST TO ANY SPECIFIC DOLLAR AMOUNT. THEREFORE, THE BID OF SIMON ON ITEM 10 IS UNCERTAIN AND INDEFINITE. IN THAT REGARD, OUR OFFICE HAS HELD THAT BIDS WHICH STATE UNCERTAIN AND INDEFINITE PRICES ARE FOR REJECTION AS NONRESPONSIVE. 48 COMP. GEN. 464, 469 (1969); 37 ID. 780 (1958); AND 36 ID. 124 (1956). ACCORDINGLY, THE SIMON BID IS NOT FOR CONSIDERATION. WHEN THE SIMON BID ON ITEM 10 IS EVALUATED ON THE BASIS OF ITEMS 1 THROUGH 9, IT IS NOT THE LOW BID.

SIMON HAS CONTENDED THAT ITS BID ON THE IMMEDIATE SOLICITATION SHOULD NOT HAVE BEEN REJECTED BECAUSE IT OFFERED A 100-PERCENT NET DEDUCTION FOR SILVER RECOVERY ON A PRIOR SOLICITATION FOR WHICH IT RECEIVED AN AWARD. HOWEVER, THE BID ON THE PRIOR SOLICITATION DID NOT CONTAIN THE QUALIFYING STATEMENT WHICH WAS ATTACHED TO THE IMMEDIATE BID.

IN VIEW OF THE FOREGOING, THE SIMON PROTEST IS DENIED.