B-182266, APR 1, 1975

B-182266, APR 1, 1975

1. ALTHOUGH ESTIMATED QUANTITY OF CLEANINGS UPON WHICH BIDDERS BOTH BID AND WERE EVALUATED DIFFERED FROM ACTUAL ANTICIPATED NEEDS OF PROCURING ACTIVITY, AND ESTIMATE WAS NOT CALCULATED ON BEST INFORMATION POSSIBLE AS REQUIRED BY ASPR PROVISIONS, TERMINATION IS NOT WARRANTED AS THERE IS NO EVIDENCE IN RECORD THAT PRICES WOULD HAVE CHANGED OR THAT IF CORRECT MULTIPLIER WERE USED AWARDEE WOULD BE DISPLACED; HOWEVER, PRESENT CONTRACT SHOULD PROCEED NOTWITHSTANDING DEFICIENCY IN IFB ONLY IF AWARDEE AGREES TO WEEKLY CLEANING OF BUILDING ERRONEOUSLY ESTIMATED AT NO INCREASE IN COST, AND IN VIEW OF DEFICIENCY IN IFB OPTION SHOULD NOT BE EXERCISED. 2. POSITION OF PROCURING ACTIVITY THAT EXCESS CLEANINGS CAN BE PERFORMED BY NAVAL PERSONNEL IS INCORRECT, AS REQUIREMENTS CONTRACT CONTAINS IMPLIED CONDITION OF GOOD FAITH THAT ALL NECESSARY WORK WILL BE ORDERED THROUGH CONTRACTOR, AND NAVY'S DEVELOPING OF IN-HOUSE CAPACITY TO PERFORM NEEDED EXCESS WORK WOULD RESULT IN BREACH OF CONTRACT.

KLEEN-RITE CORPORATION:

INVITATION FOR BIDS (IFB) 04-75-4910, ISSUED AUGUST 28, 1974, BY THE NORTHERN DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, REQUESTED BIDS FOR JANITORIAL SERVICES FOR VARIOUS BUILDINGS AT THE NAVAL AIR STATION, LAKEHURST, NEW JERSEY. BIDS WERE OPENED ON SEPTEMBER 10, 1974, AND AWARD WAS MADE TO SCHRAMMS BUILDING MAINTENANCE CORPORATION (SCHRAMMS).

KLEEN-RITE CORPORATION (KLEEN-RITE), AN UNSUCCESSFUL BIDDER, PROTESTED THE AWARD OF THE ABOVE-REFERENCED CONTRACT TO OUR OFFICE BY LETTER DATED SEPTEMBER 17, 1974. THE DEPARTMENT OF THE NAVY, IN ITS REPORT DATED OCTOBER 24, 1974, HAS CONTENDED, IN ADDITION TO OTHER ISSUES, THAT KLEEN- RITE'S PROTEST WAS UNTIMELY FILED UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. SEC. 20.2(A) (1974), AS THE ALLEGED AMBIGUITY WAS READILY APPARENT FROM THE FACE OF THE IFB. WHILE THE PROTEST WAS UNTIMELY FILED, WE BELIEVE THAT THIS PROTEST INVOLVES AN ISSUE SIGNIFICANT TO PROCUREMENT PRACTICES AND, THEREFORE, IT WILL BE CONSIDERED PURSUANT TO 4 C.F.R. SEC. 20.2(B).

KLEEN-RITE CONTENDS THAT SINCE THE IFB WAS AMBIGUOUS AS TO THE FREQUENCY OF CLEANING SERVICES FOR BID ITEM 3D, THE AWARD SHOULD BE SET ASIDE AND THE IFB REQUIREMENT READVERTISED. KLEEN-RITE CONTENDS IN THIS RESPECT AS FOLLOWS: ITEM 3D OF THE BID SCHEDULE PROVIDED THAT THE BID PRICE FOR THIS ITEM (TOILET AND BATH AREA CLEANINGS FOR BUILDINGS 33 AND 167) SHALL BE CALCULATED ON THE BASIS OF AN ESTIMATED QUANTITY OF 1,716 CLEANINGS. HOWEVER, PARAGRAPH 2.9.3 OF THE SPECIAL CONDITIONS OF THE IFB PROVIDED FOR THE CLEANING OF BATH AND TOILET AREAS IN BUILDING 33 ON A DAILY BASIS AND BUILDING 167 ON A WEEKLY BASIS AND THE SKETCHES CONTAINED IN THE IFB INDICATE THAT BUILDING 33 CONTAINS 32 BATH AND TOILET AREAS AND BUILDING 167 CONTAINS ONE BATH AND TOILET AREA. KLEEN-RITE CONCLUDES THAT THE CORRECT TOTAL QUANTITY OF ESTIMATED CLEANINGS FOR THESE AREAS IS AS FOLLOWS:

"A BLDG. 33

FREQUENCY 365 DAYS - QUANTITY 32 - 11,680

TOTAL CLEANINGS

"B BLDG. 167

FREQUENCY 52 DAYS - QUANTITY 1 - 52

TOTAL CLEANINGS

TOTAL CLEANINGS FOR YEAR 11,732"

CONSEQUENTLY, KLEEN-RITE CONCLUDES THAT THE ESTIMATED QUANTITY OF CLEANINGS FOR ITEM 3D SHOULD HAVE BEEN 11,732, NOT 1,716.

THE NAVY, WHILE NOT DENYING THAT AN AMBIGUITY EXISTS IN THE IFB, HAS TAKEN THE POSITION THAT THERE IS NO BASIS FOR CONCLUDING THAT KLEEN RITE, OR ANY OTHER BIDDER, WAS PREJUDICED BY THE CONFLICTING PROVISIONS OF THE IFB. THIS POSITION IS PREDICATED UPON THE FACT THAT THE BID ABSTRACT EVIDENCES THAT ALL 12 BIDDERS BID UPON THE ESTIMATED QUANTITY OF 1,716 CLEANINGS. FURTHERMORE, THIS ESTIMATED QUANTITY WAS THE BASIS UPON WHICH ALL BIDS WERE EVALUATED.

IN ADDITION, KLEEN-RITE HAS EXPRESSED CONCERN OVER THE POSSIBILITY THAT THE PROCURING ACTIVITY MAY NEGOTIATE THE QUANTITY OF CLEANINGS ABOVE THE ESTIMATED QUANTITY OF 1,716 WITH THE SUCCESSFUL CONTRACTOR. KLEEN-RITE CONTENDS THAT ALL THE BIDDERS SHOULD BE GIVEN THE OPPORTUNITY TO PUBLICLY CONFIRM THE AMOUNT OF THEIR BIDS FOR THE FULL 11,732 CLEANINGS. IN THIS REGARD, THE NAVY HAS STATED THAT IF IT DETERMINES THAT ANY CLEANING ABOVE THE QUANTITY OF 1,716 IS REQUIRED, IT WILL BE PERFORMED BY GOVERNMENT FORCES.

WE DO NOT AGREE WITH THE NAVY'S POSITION REGARDING THE PROTEST OF KLEEN- RITE.

AS KLEEN-RITE CONTENDS, THERE IS A DISCREPANCY IN THE IFB CONCERNING THE ESTIMATED NUMBER OF CLEANINGS FOR BUILDINGS 33 AND 167. IT APPEARS THAT IN THE PREPARATION OF BID ITEM 3D (TOILET AND BATH AREAS) OF THE BIDDING SCHEDULE, THE NAVY CALCULATED THE ESTIMATED QUANTITY OF CLEANINGS FOR BUILDING 33 UPON A WEEKLY BASIS, RATHER THAN DAILY, AS PROVIDED IN PARAGRAPH 2.9.3A(4) OF THE IFB. A FURTHER AMBIGUITY ARISES WHEN PARAGRAPH 4.1 IS EXAMINED, IN THAT TOILETS, URINALS, SINKS, LAVATORIES, BRADLEY- BASINS AND HARDWARE ARE TO BE CLEANED ON A DAILY BASIS, WHEREAS TOILET STALLS, SHOWER STALLS AND SHOWER ROOMS ARE TO BE CLEANED ON A WEEKLY BASIS. NOWHERE IN THE IFB ARE THESE TERMS DEFINED TO ESTABLISH WHICH ARE ENCOMPASSED IN "TOILET AND BATH AREAS," THEREFORE COMING WITHIN THE PURVIEW OF ITEM 3D. HOWEVER, PARAGRAPH 8.1 STATES, IN PERTINENT PART:

"*** IN CASE WHERE FREQUENCY OF CLEANING IS CALLED FOR IN THE SEVERAL SECTIONS OF THIS SPECIFICATION ARE IN CONFLICT, THE PART LISTING THE GREATER AMOUNT WILL BE CONSIDERED TO BE CORRECT."

ACCORDINGLY, IT IS OUR OPINION THAT ITEM 3D SHOULD, IN FACT, HAVE BEEN BASED UPON 11,732 CLEANINGS.

SINCE THE CONTRACT AWARDED UNDER THE ABOVE-REFERENCED IFB IS A REQUIREMENTS CONTRACT, THE NAVY WAS REQUIRED NOT ONLY TO STATE THE ESTIMATED TOTAL QUANTITY FOR THE INFORMATION OF BIDDERS, BUT ALSO TO CALCULATE THIS ESTIMATE ON THE BEST INFORMATION POSSIBLE. SEE ARMED SERVICES PROCUREMENT REGULATION SEC. 3-409.2(A) (1974 ED.); MATTER OF INPUT DATA, B-179809, FEBRUARY 21, 1974; B-173356, SEPTEMBER 27, 1971; AND B-169037, MAY 4, 1970. IT IS OUR POSITION THAT THE ESTIMATED QUANTITY OF CLEANINGS FOR BUILDINGS 33 AND 167 UPON WHICH ALL BIDDERS BID AND WERE EVALUATED (1,716) WAS DIFFERENT FROM THE ACTUAL ANTICIPATED NEEDS OF THE PROCURING ACTIVITY (AN ESTIMATED QUANTITY OF 11,732), AS SET FORTH ELSEWHERE IN THE IFB. THEREFORE, THE ESTIMATE CONTAINED IN ITEM 3D OF THE BID SCHEDULE WAS NOT CALCULATED ON THE BEST INFORMATION POSSIBLE, THEREFORE RENDERING THE IFB DEFECTIVE.

MOREOVER, WE CONSIDER SIGNIFICANT THE APPROACH TAKEN BY THE NAVY SHOULD MORE THAN 1,716 CLEANINGS BE REQUIRED. THE NAVY HAS STATED THAT ANY CLEANINGS REQUIRED OVER 1,716 WOULD BE DONE "IN-HOUSE." HOWEVER, OUR INTERPRETATION OF THE THEORY BEHIND REQUIREMENTS CONTRACTS IS THAT WHERE THE GOVERNMENT'S METHODS OF FULFILLING REQUIREMENTS CHANGE, WHILE THE REQUIREMENTS DO NOT, THE GOVERNMENT DOES NOT HAVE AN ARBITRARY RIGHT TO DEVELOP AND USE POTENTIAL CAPABILITIES AT THE EXPENSE OF THE CONTRACTOR. SEE ALAMO AUTOMATIVE SERVICES, INC., ASBCA NO. 9713, (1964); DEL RIO FLYING SERVICE, ASBCA NO. 15304, ETC. SEE ALSO JOHNSTOWN COAL & COKE CO. V. UNITED STATES, 66 CT. CL. 616 (1929), WHEREIN THE COURT HELD THAT UNDER A REQUIREMENTS CONTRACT, THE DEFENDANT IS OBLIGATED TO TAKE THE ESTIMATED QUANTITY UNLESS THE ACTUAL REQUIREMENTS DEMANDED A LESSER QUANTITY; THE DEFENDANT HAS NO ARBITRARY RIGHT TO REDUCE THE QUANTITY IN ANY DEGREE. THE COURT ALSO STATED:

"DEFENDANT MAY NOT EXCUSE ITSELF FROM ITS OBLIGATION TO TAKE THE ESTIMATED QUANTITY *** EXCEPT UPON A SHOWING THAT THE ACTUAL REQUIREMENTS OF THE SERVICE DEMANDED A LESS QUANTITY. THE BURDEN ON THIS POINT RESTS UPON DEFENDANT, AND IT HAS INTRODUCED NO EVIDENCE WHATEVER."

THE STATEMENTS CONTAINED IN THE RECORD INDICATING THAT CLEANINGS IN EXCESS OF 1,716 WILL BE PERFORMED BY NAVY PERSONNEL SUPPORTS THE INFERENCE THAT THE NAVY WILL DEVELOP, IF NECESSARY, THE POTENTIAL CAPABILITY TO PERFORM THE EXCESS WORK AT THE EXPENSE OF THE CONTRACTOR. HOWEVER, IN EXECUTING THE CONTRACT AT HAND, THE GOVERNMENT HAS OBLIGATED ITSELF TO MAKE A GOOD FAITH EFFORT IN ORDERING ALL NEEDED OR REQUIRED SERVICES FROM THE CONTRACTOR. THE DOING OF THE EXCESS CLEANING, NEEDED AND REQUIRED CLEANING, IN-HOUSE, WOULD RESULT IN A BREACH OF THIS DUTY OF GOOD FAITH. AND SUCH ACTIONS, UNDER HENRY ANGELO & SONS, INC., ASBCA NO. 15082, FEBRUARY 29, 1972, WOULD RESULT IN A BREACH OF THE CONTRACT, ENTITLING THE CONTRACTOR TO MONETARY RELIEF. ACCORDINGLY, ANY EXCESS WORK COULD NOT, IN FACT, BE PERFORMED IN-HOUSE BY NAVY PERSONNEL.

HOWEVER, THE QUESTION NOW FOR RESOLUTION IS WHAT CORRECTIVE ACTION, IF ANY, IS REQUIRED IN THIS MATTER. NONE OF THE PARTIES OF INTEREST HAVE CONTENDED THAT THEIR UNIT PRICES FOR CLEANINGS UNDER ITEM 3D WOULD HAVE BEEN DIFFERENT HAD THE PROPER FIGURE, 11,732, BEEN USED AS THE MULTIPLIER IN PLACE OF THE 1,716 FIGURE. NOR WOULD SCHRAMMS HAVE BEEN DISPLACED IF ALL OF THE UNIT PRICES FOR ITEM 3D WERE MULTIPLIED BY 11,732. THEREFORE, IT IS OUR OPINION THAT TERMINATION OF THE SCHRAMMS CONTRACT AT THIS POINT WOULD BE UNWARRANTED. WE DO, ON THE OTHER HAND, BELIEVE THAT THE PRESENT CONTRACT SHOULD BE PERMITTED TO PROCEED NOTWITHSTANDING THE DEFICIENCY IN THE IFB ONLY IF SCHRAMMS AGREES TO CLEAN BUILDING 33 ON A WEEKLY BASIS AT NO INCREASE IN COST. ADDITIONALLY, IN VIEW OF THE DEFICIENCY IN THE IFB WE RECOMMEND THAT THE OPTION FOR AN ADDITIONAL YEAR OF SERVICE UNDER THE EXISTING CONTRACT NOT BE EXERCISED.