B-181136, SEP 25, 1974, 54 COMP GEN 236

B-181136, SEP 25, 1974, 54 COMP GEN 236

BIDS - QUALIFIED - PRICES - NOT FIRM-FIXED - BID NONRESPONSIVE WHERE TWO BIDDERS INSERTED CLAUSES IN THEIR BIDS PROVIDING FOR CHANGES IN PRICE OF EQUIPMENT TO BE FURNISHED IF CERTAIN CIRCUMSTANCES OCCUR, BIDDERS HAVE NOT OFFERED FIRM-FIXED PRICES AND BIDS MUST BE REJECTED AS NONRESPONSIVE. BIDS - QUALIFIED - AGREEMENT TO COMPLY WITH GUARANTY - INVITATION REQUIREMENT BID, AGREEING TO COMPLY WITH GUARANTY REQUESTED BY GOVERNMENT ON CONDITION EQUIPMENT IS INSTALLED AND OPERATED IN ACCORDANCE WITH LATER INSTRUCTIONS OF BIDDER, IS NOT A QUALIFIED BID IN VIEW OF INVITATION FOR BIDS REQUIREMENT THAT SUCCESSFUL BIDDER FURNISH CONTRACTOR REPRESENTATIVE TO INSTRUCT AGENCY AS TO USE OF EQUIPMENT AND IS, THEREFORE, RESPONSIVE. CONTRACTS - SPECIFICATIONS - CONFORMABILITY OF EQUIPMENT, ETC., OFFERED - LITERAL READING OF SPECIFICATIONS BID IS NOT NONRESPONSIVE WHERE VARIABLE RATES FOR CONTRACTOR'S REPRESENTATIVE ARE INCLUDED, SOLICITATION HAVING REQUESTED "PER DIEM RATES AND FULL TERMS" TO BE SUBMITTED WITH BID, IN VIEW OF OTHER SOLICITATION INSTRUCTION THAT ALL COSTS FOR REPRESENTATIVE ARE TO BE INCLUDED IN BID PRICE AND INASMUCH AS SOLICITATION DID NOT ENVISION OTHER THAN A SINGLE BID PRICE TO COVER ALL SPECIFICATION REQUIREMENTS INCLUDING CONTRACTOR'S REPRESENTATIVE. BIDS - DISCARDING ALL BIDS - COMPELLING REASONS ONLY CANCELLATION OF INVITATION FOR BIDS AFTER OPENING IS IMPROPER WHERE AWARD UNDER SOLICITATION MAY BE MADE, PROVIDED AGENCY IS ABLE TO DETERMINE FROM EVALUATION OF LOW BID, AS SUPPLEMENTED BY DATA, THAT TENDERED EQUIPMENT WOULD SATISFY ACTUAL NEEDS OF AGENCY.

IN THE MATTER OF THE JOY MANUFACTURING COMPANY, SEPTEMBER 25, 1974:

THE JOY MANUFACTURING COMPANY (JOY) PROTESTS THE CANCELLATION AND PROPOSED READVERTISEMENT OF SOLICITATION NO. BEP 74-191(A), ISSUED BY THE DEPARTMENT OF THE TREASURY, BUREAU OF ENGRAVING AND PRINTING, FOR THE PROCUREMENT OF A HEAVY DUTY CENTRIFUGAL AIR COMPRESSOR. THE SUBMISSION OF DESCRIPTIVE LITERATURE WAS REQUIRED TO ESTABLISH THE DETAILS OF THE PRODUCT PROPOSED TO BE FURNISHED IN ACCORDANCE WITH PARAGRAPH 1.3 OF THE SPECIFICATION.

THREE BIDS WERE RECEIVED IN TIME FOR THE BID OPENING DATE. THE BID OF THE INGERSOLL-RAND COMPANY (INGERSOLL) WAS LOW; JOY'S BID WAS SECOND LOW; THE BID OF THE ELLIOTT COMPANY WAS HIGH. A LATE BID WAS RECEIVED FROM, AND RETURNED UNOPENED TO, THE KING-KNIGHT COMPANY. BOTH JOY AND INGERSOLL NOTED IN THEIR BIDS OPTIONAL FEATURES TO THEIR COMPRESSORS WHICH COULD BE INCLUDED WITH THE ADVERTISED ITEM SHOULD THE CONTRACTING ACTIVITY FIND ANY OF THESE DESIROUS. THE ELLIOTT COMPANY NOTED ONLY ONE OPTIONAL FEATURE IN ITS BID.

JOY BELIEVES THAT AWARD SHOULD BE MADE TO IT AS THE LOW, RESPONSIVE BIDDER. IT IS JOY'S CONTENTION THAT THE INGERSOLL BID IS NONRESPONSIVE FOR VARIOUS REASONS. FIRST, IT IS NOTED THAT INGERSOLL INCLUDED ITS OWN CONTRACT PROVISIONS WITH ITS BID IN LIEU OF THE CONTRACTING ACTIVITY'S GENERAL CONDITIONS FOR MECHANICAL AND ELECTRICAL EQUIPMENT (GENERAL CONDITIONS), A COPY OF WHICH INGERSOLL ADVISES WAS NOT FURNISHED IT WITH ITS BID COPY. THE INGERSOLL PROVISIONS, IT IS ALLEGED, CONTAINED A DIFFERENT STANDARD OF LIABILITY FOR DAMAGES, LOSS, AND DELAY IN DELIVERY THAN THAT CONTAINED IN THE GENERAL CONDITIONS. ALSO, AMONGST OTHER THINGS, IT IS ASSERTED THAT THESE PROVISIONS SUBJECTED CERTAIN EQUIPMENT TO BE FURNISHED BY INGERSOLL TO CERTAIN POSSIBLE PRICE CHANGES. SECONDLY, JOY QUESTIONS WHETHER THE ANODIZED ALUMINUM IMPELLERS OFFERED BY INGERSOLL MEET THE REQUIREMENTS OF PARAGRAPH 2.2.2(2) OF THE SPECIFICATION REQUIRING ANY ALUMINUM IMPELLERS TO BE "CORROSION AND EROSION RESISTANT." THIRDLY, IT IS NOTED THAT INGERSOLL FAILED TO STIPULATE, AS REQUIRED BY PARAGRAPH 2.2.2(10) OF THE SPECIFICATION, HOW LONG THE DESIGN AND TYPE OF BALL GEAR AND PINION GEAR BEARINGS FOR THE COMPRESSOR OFFERED HAD BEEN USED IN INDUSTRIAL SERVICE.

IT IS THE POSITION OF THE CONTRACTING ACTIVITY THAT THE CANCELLATION OF THE PROCUREMENT AND THE PROPOSED READVERTISEMENT OF THE REQUIREMENT ARE THE CORRECT MEASURES TO BE ADOPTED. THIS COURSE OF ACTION IS REQUIRED, WE ARE ADVISED, BECAUSE DURING A REVIEW OF THE BIDS TWO ERRORS BECAME APPARENT. FIRST, IT WAS DISCOVERED THAT THE SPECIFICATION ERRONEOUSLY OMITTED PROVISIONS FOR A REQUIRED FILTER WHICH WOULD ENSURE AGAINST FOREIGN MATTER BEING PERMITTED TO ENTER THE SYSTEM AND FOR A DIRECT DIAL READ-OUT INDICATOR TO MONITOR BEARING WEAR AND THUS TO PERMIT FREQUENT MAINTENANCE INSPECTIONS. SECONDLY, IT IS NOTED THAT THE CONTRACTING ACTIVITY APPARENTLY NEGLECTED TO INCLUDE A COPY OF THE GENERAL CONDITIONS IN THE BID COPY SENT TO INGERSOLL. ALSO, THE CONTRACTING ACTIVITY BELIEVES THAT ALL THREE BIDS SUBMITTED UNDER THE SOLICITATION ARE NONRESPONSIVE.

FOR THE REASONS THAT FOLLOW, IT IS OUR CONCLUSION THAT THE CORRECT ACTION TO BE TAKEN WOULD BE TO REINSTATE THE ORIGINAL SOLICITATION AND TO MAKE AWARD TO JOY IF ACCEPTANCE OF ITS BID WOULD REQUIRE IT TO DELIVER THE AIR COMPRESSOR EQUIPPED WITH THE REQUIRED FILTER AND THE DIRECT DIAL READ-OUT INDICATOR AT JOY'S PRICE BID.

FIRST, WE BELIEVE THE INGERSOLL BID IS NONRESPONSIVE TO THE SOLICITATION REQUIREMENTS. THE PROVISIONS INCORPORATED BY INGERSOLL IN ITS BID STATED, AMONGST OTHER THINGS, THAT THE

FOLLOWING PURCHASED EQUIPMENT IS SUBJECT TO THE SAME PRICE CHANGE AS MADE EFFECTIVE BY OUR SUPPLIERS PRIOR TO DATE OF SHIPMENT. ELECTRICS.

THIS CLEARLY ENVISIONS A POSSIBLE FUTURE CHANGE IN THE PRICE BID ON THE REQUIREMENT, AND AS THE SOLICITATION NECESSITATED A FIRM-FIXED PRICE THE INGERSOLL BID IS CLEARLY NONRESPONSIVE TO THAT REQUIREMENT. SEE SECTION 1 -2.404-(B)(1) AND -(3) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) REQUIRING BID REJECTION WHERE THE BIDDER ATTEMPTS TO PROTECT HIMSELF AGAINST FUTURE CHANGES IN CONDITIONS SUCH AS INCREASED COSTS IF THE TOTAL PRICE CANNOT BE DETERMINED FOR BID EVALUATION OR WHERE THE BID OFFERS A PRICE IN EFFECT AT DELIVERY. WE SEE, CONSEQUENTLY, NO NEED TO DEAL WITH THE OTHER ALLEGED ASPECTS OF INGERSOLL'S NONRESPONSIVENESS. THAT INGERSOLL CORRECTED THIS SITUATION AFTER BID OPENING IS, OF COURSE, IRRELEVANT TO THE RESPONSIVENESS OF ITS BID. 50 COMP. GEN. 8, 11 (1970).

THAT THE GENERAL CONDITIONS MAY NOT HAVE BEEN INCLUDED IN THE INGERSOLL BID PACKAGE IS ALSO OF NO RELEVANCE. WHILE THE GOVERNMENT SHOULD MAKE EVERY EFFORT TO SEE THAT INTERESTED BIDDERS RECEIVE TIMELY AND COMPLETE COPIES OF INVITATIONS, SPECIFICATIONS, AND AMENDMENTS THERETO, THE FACT THAT THERE MAY HAVE BEEN A FAILURE TO DO SO IN A PARTICULAR CASE DOES NOT WARRANT ACCEPTANCE OF A BID WHICH IS NOT FULLY RESPONSIVE. SEE B-175477, AUGUST 3, 1972. THIS RULE IS ESPECIALLY APPLICABLE WHERE, AS HERE, THE MISSING DOCUMENT IS REFERENCED SEVERAL TIMES IN THE INVITATION AND THE BIDDER IS ADVISED (ATTACHMENT CC) THAT A COPY OF ANY RELEVANT DOCUMENT MAY BE OBTAINED AT THE PROCUREMENT OFFICE.

CONCERNING THE MATTER OF THE RESPONSIVENESS OF THE BID SUBMITTED BY THE ELLIOTT COMPANY, ITS BID STATED THAT THE

PRICES QUOTED ARE FIRM FOR THIRTY (30) DAYS FROM DATE OF THIS PROPOSAL. PRICES QUOTED ARE SUBJECT TO AN ESCALATION CHARGE OF 0.8% PER MONTH FROM DATE OF ORDER TO MONTH OF CONTRACT SHIPMENT. CONTRACT SHIPMENT SHALL BE THAT SCHEDULE ESTABLISHED AFTER RECEIPT OF ALL FINAL SPECIFICATIONS AND WRITTEN NOTICE OF RELEASE FOR MANUFACTURE BY THE PURCHASER.

CONSEQUENTLY, AS THE PRICE THE CONTRACTING ACTIVITY WOULD BE OBLIGATED TO PAY UNDER A CONTRACT WITH THE ELLIOTT COMPANY MIGHT VARY WITH CIRCUMSTANCES, THAT BID WOULD ALSO BE NONRESPONSIVE UNDER FPR 1 2.404- 2(B)(1) AND -(3).

THE POSSIBILITY THAT THE JOY BID MAY NOT BE RESPONSIVE HAS ALSO BEEN RAISED. FIRST, THE GENERAL CONDITIONS OF THE SOLICITATION REQUIRED THE FOLLOWING:

A-21 GUARANTY: THE CONTRACTOR SHALL GUARANTEE THAT AT THE TIME OF DELIVERY AND FOR ONE YEAR AFTER THE DATE OF SETTLEMENT OF THE CONTRACT, OR WITHIN A TIME OTHER THAN ONE YEAR IF SUCH TIME IS DESIGNATED IN THE SPECIFICATIONS, THE EQUIPMENT SUPPLIED TO THE BUREAU UNDER THE CONTRACT WILL BE FREE FROM ANY AND ALL DEFECTS IN MATERIAL OR WORKMANSHIP AND WILL CONFORM TO THE CONTRACT REQUIREMENTS, NOTWITHSTANDING THE FACT THAT THE BUREAU MAY HAVE INSPECTED AND/OR ACCEPTED SUCH EQUIPMENT.

JOY RETURNED THE GENERAL CONDITIONS, INCLUDING THIS GUARANTY, WITH ITS BID AND INCLUDED ALSO ITS OWN STANDARD FORM PERTAINING TO INSTALLATION AND START-UP WHICH PROVIDED IN PERTINENT PART THAT:

ALL GIVEN GUARANTEES AND WARRANTEES ARE CONTINGENT UPON THE PROPERTY BEING INSTALLED AND OPERATED IN ACCORDANCE WITH WRITTEN INSTRUCTIONS BY JOY, AND THE INITIAL OPERATION BEING WITNESSED BY A REPRESENTATIVE OF JOY.

IT IS FELT THAT THIS LANGUAGE PLACES LIMITATIONS ON THE REQUIRED GUARANTY. WE DO NOT BELIEVE THIS TO BE THE CASE.

ANY CONTINGENCIES REFERENCED IN JOY'S BID ARE MORE THAN MET BY THE REQUIREMENTS OF PARAGRAPH A-18 OF THE GENERAL CONDITIONS, WHICH IN PART STATES:

A-18 CONTRACTOR'S REPRESENTATIVE:WHERE REQUIRED BY THE INVITATION, THE CONTRACTOR SHALL FURNISH A QUALIFIED REPRESENTATIVE WHO SHALL (1) SUPERVISE THE INSTALLATION OF THE EQUIPMENT, (2) BE RESPONSIBLE FOR THE INITIAL OPERATION OF THE EQUIPMENT, (3) DEMONSTRATE THAT THE EQUIPMENT MEETS SPECIFICATION REQUIREMENTS, AND (4) INSTRUCT BUREAU PERSONNEL IN OPERATING AND MAINTENANCE PROCEDURES ***

SINCE PARAGRAPH 2.4.1 OF THE SPECIFICATION REQUIRED THE SUCCESSFUL BIDDER TO FURNISH A CONTRACTOR'S REPRESENTATIVE, AND JOY TOOK NO EXCEPTION TO THE REQUIREMENT (IF INDEED IT WOULD HAVE CAUSE TO DO SO HAVING EARLIER REQUESTED THAT ITS REPRESENTATIVE BE PRESENT AT INITIAL OPERATION), THE ABOVE-QUOTED LANGUAGE IN JOY'S BID DOES NOT RENDER ITS BID NONRESPONSIVE.

THE SECOND REASON RAISED FOR QUESTIONING THE RESPONSIVENESS OF THE JOY BID ARISES FROM THE SERVICE REPRESENTATIVE STANDARD CLAUSE INSERTED IN THAT BID PURSUANT TO PARAGRAPH 2.4.1 OF THE SPECIFICATION. THIS PARAGRAPH STATES AS FOLLOWS:

2.4 REQUIREMENTS SUBSEQUENT TO BID

2.4.1 CONTRACTOR'S REPRESENTATIVE. THE SUCCESSFUL BIDDER SHALL FURNISH A FIELD SERVICEMAN, WHICH IS REFERRED TO HEREIN AS CONTRACTOR'S REPRESENTATIVE, IN FULL ACCORDANCE WITH PARAGRAPH A-18 OF THE "BUREAU'S" GENERAL CONDITIONS NOTED IN PARAGRAPH 1.2 HEREIN. PER DIEM RATES AND FULL TERMS FOR SUCH SERVICES OF A CONTRACTOR'S REPRESENTATIVE SHALL BE STIPULATED IN THE BID.

THE CLAUSE INSERTED BY JOY OUTLINED THE WAGE RATE FOR AN 8-HOUR DAY, THE RATE FOR PER DIEM, AND THE FACT THAT TRAVEL EXPENSES WERE CALCULATED BY THE ACTUAL COST. IT THEN CONTAINED FIVE INSTANCES OF WAGE SITUATIONS ARISING OUTSIDE OF THE REGULAR 8-HOUR DAY. VARIOUS HOURLY RATES WERE TYPED IN TO COVER EACH OF THE SITUATIONS. IF SUCH WERE BINDING, THE JOY BID PRICE MIGHT CHANGE DEPENDING ON WHETHER ANY OF THESE SITUATIONS WERE ENCOUNTERED. HOWEVER, PARAGRAPH A-18 OF THE GENERAL CONDITIONS, REFERRED TO IN PARAGRAPH 2.4.1 OF THE SPECIFICATION, AND QUOTED ABOVE, PROVIDED IN PERTINENT PART:

*** ALL COSTS ASSOCIATED WITH THE FURNISHING OF THIS REPRESENTATIVE SHALL BE INCLUDED IN THE BID PRICE.

WHILE IT IS NOT CLEAR WHY THE CONTRACTING ACTIVITY REQUESTED "PER DIEM RATES AND FULL TERMS," WE FEEL THAT IT WAS INTENDED FOR GENERAL INFORMATION ONLY. IT WOULD BE ILLOGICAL TO FIRST INFORM THE BIDDER (BY PARAGRAPH 1.2 OF THE SPECIFICATION) THAT THE GENERAL CONDITIONS WERE TO BE CONSIDERED AS PART OF THE SPECIFICATION, TO THEN INFORM HIM TO FURNISH A REPRESENTATIVE IN FULL ACCORDANCE WITH PARAGRAPH A-18 OF THE GENERAL CONDITIONS, AND TO THEN PUT FORWARD THE IDEA THAT THE "PER DIEM RATES AND FULL TERMS" REQUESTED WOULD THEN BE USED TO EVALUATE WHAT PRICE HE HAS SUBMITTED ON THE PROCUREMENT. PARAGRAPH A-18 INSTRUCTS THAT A SEPARATE BID IS NOT TO BE SUBMITTED FOR THE CONTRACTOR'S REPRESENTATIVE. THE COVER PAGE OF THE SOLICITATION ALSO REQUIRES ONLY ONE PRICE FOR THE COMPRESSOR IN ACCORDANCE WITH THE SPECIFICATION AND THE GENERAL CONDITIONS. FURTHER, THE INVITATION PROVIDED NO FORMULA, BASED ON NUMBER OF DAYS OR AMOUNT OF HOURS WORKED, FOR EVALUATING ANY "PER DIEM RATES AND FULL TERMS" THAT MIGHT BE SUBMITTED. FINALLY, IN TABULATING BID PRICES THE CONTRACTING OFFICER TREATED THE LUMP SUM PRICES SUBMITTED AS TOTAL BID PRICES WITHOUT REGARD TO PER DIEM RATES OR THE LIKE. CONSEQUENTLY, AND SINCE THE JOY BID CONSISTED OF ONE FIRM FIXED-PRICE SUM, THE JOY BID IS NOT NONRESPONSIVE.

THE FINAL QUESTION, ALREADY PREVIOUSLY ANSWERED, IS WHETHER, IN VIEW OF THE NEED TO INCORPORATE ADDITIONAL NEEDS INTO THE SPECIFICATION, THE SOLICITATION MAY BE CANCELED AND THE PROCUREMENT READVERTISED NOTWITHSTANDING THE RESPONSIVENESS OF THE JOY BID. NORMALLY, WHERE THE PROPOSED CHANGES CONSTITUTE A COGENT REASON FOR SUCH ACTION OUR OFFICE WILL INTERJECT NO OPPOSITION TO THE AGENCY'S WISHES. HOWEVER, TWO FACTS PRESENT HERE CREATE A SITUATION ATYPICAL OF THOSE IN WHICH CANCELLATION AND READVERTISEMENT HAVE BEEN PERMITTED. FIRST, ONE OF THE BIDDERS, SPECIFICALLY JOY, HAS ASSERTED THAT IT HAS ACTUALLY OFFERED SOMETHING ABOVE AND BEYOND THE REQUIREMENTS OF THE ORIGINAL SPECIFICATION, AND IF SUCH IS THE CASE, IT IS POSSIBLE THAT THE AGENCY MAY BE ABLE TO SATISFY ITS ADDITIONAL NEEDS BY ACCEPTING SUCH BID. SECONDLY, THIS FACT SITUATION CAN BE CLEARLY DOVETAILED INTO THE FACT THAT NEITHER OF THE OTHER TWO BIDDERS WERE TOTALLY RESPONSIVE TO THE ORIGINAL SPECIFICATION THEREBY CREATING THE POSSIBILITY OF MAKING AN AWARD WITHOUT PREJUDICE TO THE OTHER BIDDERS. INDEED, WHERE ONE BIDDER IS RESPONSIVE AND ITS BID HAS ACTUALLY OFFERED ALL THE NEW OR CHANGED NEEDS OF THE ACTIVITY, IT WOULD BE PREJUDICIAL TO THAT BIDDER TO CANCEL AND READVERTISE THEREBY ALLOWING THE REMAINING NONRESPONSIVE BIDDERS A SECOND CHANCE TO GAIN WHAT THEY COULD NOT HAVE HAD THE FIRST TIME HAD THE SPECIFICATION BEEN CORRECTLY STATED.

OUR OFFICE HAS SANCTIONED THE REINSTATEMENT OF A CANCELED INVITATION IN THE PAST WHEN TO DO SO WOULD WORK NO PREJUDICE ON THE RIGHTS OF OTHERS AND WOULD, IN FACT, PROMOTE THE INTEGRITY OF THE PUBLIC BIDDING SYSTEM. COMP. GEN. 834 (1960). THE CIRCUMSTANCES OF THIS PROCUREMENT APPEAR TO LEND THEMSELVES TO SUCH A REINSTATEMENT. ALSO, IT IS OUR VIEW THAT THE CANCELLATION AFTER BIDS ARE OPENED IS, AS A GENERAL PROPOSITION, INAPPROPRIATE WHEN A PROPER AWARD UNDER A SOLICITATION WOULD SERVE THE ACTUAL NEEDS OF THE GOVERNMENT. 54 COMP. GEN. 145 (1974); 53 ID. 586 (1974); 49 ID. 211 (1969); 48 ID. 731 (1969).

UNDER THE CIRCUMSTANCES, REINSTATEMENT OF SOLICITATION NO. BEP 74 191(A) AND AWARD TO JOY WOULD BE PROPER IF THE BUREAU IS ABLE TO DETERMINE THAT JOY'S ORIGINAL BID, AS SUPPLEMENTED BY ITS DESCRIPTIVE LITERATURE, WILL IN FACT MEET THE ACTUAL NEEDS OF THE BUREAU.