B-136505, AUGUST 19, 1958, 38 COMP. GEN. 131

B-136505, AUGUST 19, 1958, 38 COMP. GEN. 131

BIDS - PROGRESS PAYMENTS - SUPPLIES AND SERVICES V. CONSTRUCTION A PROVISION FOR PARTIAL PAYMENTS ON A BI-WEEKLY BASIS FOR MATERIALS, LABOR AND SERVICES, IRRESPECTIVE OF ACCEPTANCE BY THE GOVERNMENT OR THE AMOUNT OF LIMITATIONS SPECIFIED IN THE INVITATION, IS A MATERIAL DEVIATION FROM A VITAL PART OF THE INVITATION WHICH CANNOT BE WAIVED AND WHICH MAKES THE BID NONRESPONSIVE TO THE INVITATION. WHERE THE INSTALLATION AND CONSTRUCTION WORK INCIDENT TO FURNISHING PARTITION ASSEMBLIES FOR A BUILDING CONSTITUTES A SMALL FRACTION OF THE TOTAL WORK, THE PROCUREMENT IS ESSENTIALLY ONE FOR SUPPLIES AS DISTINGUISHED FROM CONSTRUCTION, AND, THEREFORE, THE INCLUSION IN THE INVITATION OF PAYMENTS CLAUSE APPLICABLE TO SUPPLY CONTRACTS EVEN THOUGH NOT IN ACCORD WITH THE CUSTOM OF THE TRADE FOR CONSTRUCTION CONTRACTS WAS PROPER. IN THE ABSENCE OF EVIDENCE THAT THE CONTRACTING OFFICER'S DETERMINATION OF THE SUCCESSFUL BIDDER'S RESPONSIBILITY AND CAPABILITY WAS ARBITRARY OR CAPRICIOUS, IT MUST BE ACCEPTED BY THE ACCOUNTING OFFICERS.

TO JAMES RENFREW, AUGUST 19, 1958:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 18, 1958, WITH ENCLOSURES, RESPECTING THE PROTEST OF ROBERT Z. SNOOK AND ASSOCIATES AGAINST THE AWARD OF A CONTRACT TO THE ARCHITECTURAL METAL CRAFTS CORPORATION UNDER INVITATION FOR BIDS NO. 105-611-58-129 ISSUED BY THE AIR FORCE ACADEMY, DENVER, COLORADO, ON MAY 3, 1958.

THE INVITATION REQUESTED BIDS TO BE OPENED ON MAY 26 1958, FOR FURNISHING 24 ITEMS OF WOOD AND ALUMINUM PARTITION ASSEMBLIES IN STRICT ACCORDANCE WITH SPECIFICATION AFA-83, DATED MARCH 19, 1958, AND INSTALLED OR DELIVERED AS REQUIRED BY PART 5 OF THE SPECIFICATIONS. IN RESPONSE TO THE INVITATION, SIX BIDS WERE RECEIVED, INCLUDING THE LOW NET BID OF SNOOK AND ASSOCIATES IN THE AMOUNT OF $136,922.84 AND THE NEXT LOWEST ACCEPTABLE BID OF ARCHITECTURAL METAL CRAFTS IN THE AMOUNT OF $140,162.25. THE BID OF SNOOK AND ASSOCIATES WAS CONSIDERED AS NONRESPONSIVE BY THE CONTRACTING OFFICER BECAUSE IT INCLUDED A SPECIAL PAYMENT CLAUSE WHICH WAS AT VARIANCE WITH THE STANDARD PAYMENTS CLAUSE OF THE GENERAL PROVISIONS OF THE INVITATION. AWARD OF CONTRACT NO. AF 105/611/-623 TO ARCHITECTURAL METAL CRAFTS AS THE LOWEST RESPONSIBLE BIDDER WAS APPROVED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION ON JUNE 2, 1958.

THE AWARD AS MADE IS PROTESTED BY SNOOK AND ASSOCIATES ON SEVERAL GROUNDS: (1) THAT ITS BIDS WAS FULLY RESPONSIVE TO THE INVITATION, AND AS THE LOWEST RESPONSIBLE BIDDER, IT SHOULD HAVE RECEIVED THE AWARD; (2) THAT THE PROCUREMENT IS ESSENTIALLY ONE OF CONSTRUCTION, AND HENCE, THE ,APPLICABILITY OF PAYMENT TERMS OF A SUPPLY CONTRACT TO A CONSTRUCTION CONTRACT IS NOT IN ACCORD WITH THE CUSTOM OF THE TRADE; " AND (3) THAT THERE IS SOME DOUBT AS TO THE RESPONSIBILITY OF THE ARCHITECTURAL METAL CRAFTS.

ON PAGE 13 OF ITS BID, SNOOK AND ASSOCIATES INSERTED THE FOLLOWING PAYMENT CLAUSE:

PAYMENT

CONTRACTOR SHALL BE PAID BI-WEEKLY UPON SUBMISSION OF INVOICES FOR MATERIAL DELIVERED TO JOB SITE AND LABOR AND SERVICES PERFORMED ON JOB SITE TO DATE OF INVOICE.

ARTICLE 7 OF THE GENERAL PROVISIONS OF THE INVITATION PROVIDED:

PAYMENTS

THE CONTRACTOR SHALL BE PAID, UPON THE SUBMISSION OF PROPER INVOICES OR VOUCHERS, THE PRICES STIPULATED HEREIN FOR SUPPLIES DELIVERED AND ACCEPTED OR SERVICES RENDERED AND ACCEPTED, LESS DEDUCTIONS, IF ANY, AS HEREIN PROVIDED. UNLESS OTHERWISE SPECIFIED, PAYMENT WILL BE MADE ON PARTIAL DELIVERIES ACCEPTED BY THE GOVERNMENT WHEN THE AMOUNT DUE ON SUCH DELIVERIES SO WARRANTS; OR, WHEN REQUESTED BY THE CONTRACTOR, PAYMENT FOR ACCEPTED PARTIAL DELIVERIES SHALL BE MADE WHENEVER SUCH PAYMENT WOULD EQUAL OR EXCEED EITHER $1,000 OR 50 PERCENT OF THE TOTAL AMOUNT OF THIS CONTRACT. ( ITALICS SUPPLIED.)

IT IS ARGUED THAT THE BID OF SNOOK AND ASSOCIATES WAS IN STRICT CONFORMITY WITH THE INVITATION IN VIEW OF THE ITALICIZED PORTION OF ARTICLE 7, SUPRA. HOWEVER, AN EXAMINATION OF THE REMAINING LANGUAGE OF THE CLAUSE CLEARLY SHOWS THAT THE BIDDER COULD ONLY REQUEST PAYMENT FOR ACCEPTED PARTIAL DELIVERIES WHEN THE PAYMENT WOULD EQUAL OR EXCEED EITHER $1,000 OR 50 PERCENT OF THE TOTAL CONTRACT AMOUNT. THE REQUEST BY SNOOK AND ASSOCIATES FOR PARTIAL PAYMENTS ON A BI-WEEKLY BASIS FOR MATERIALS, LABOR AND SERVICES IRRESPECTIVE OF THEIR ACCEPTANCE BY THE GOVERNMENT OR THE AMOUNT INVOLVED IS IN CONFLICT WITH THE "PAYMENT" TERMS OFFERED OTHER BIDDERS. TO PERMIT AWARD TO SNOOK AND ASSOCIATES ON A BID WHICH CLEARLY QUALIFIED THE INVITATION PAYMENTS CLAUSE WOULD CONSTITUTE A CONTRACT WHICH WAS NOT THE SAME AS THE ONE OFFERED TO ALL BIDDERS ON A COMPETITIVE BASIS. THE QUALIFICATION AS TO PARTIAL PAYMENTS MUST BE REGARDED AS A MATERIAL DEVIATION OF A VITAL PART OF THE INVITATION RENDERING THE BID OF SNOOK AND ASSOCIATES AS NONRESPONSIVE; OTHERWISE, CONSIDERATION OF ITS BID WOULD HAVE BEEN PREJUDICIAL TO OTHER BIDDERS AND IN CONTRAVENTION OF ARTICLE 8 (A) OF THE INVITATION REQUIRING THAT AWARD BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID,"CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.' SEE 20 COMP. GEN. 216.

WHILE ARTICLE 8 (B) RESERVED THE RIGHT TO THE GOVERNMENT TO WAIVE MINOR DEVIATIONS FROM THE INVITATION CONDITIONS, WE ARE OF THE VIEW THAT THE QUALIFICATION OF THE INVITATION PAYMENT CLAUSE WAS A MAJOR DEVIATION WHICH COULD NOT BE WAIVED SINCE IT MODIFIED THE LEGAL OBLIGATIONS OF THE PARTIES CONTRARY TO THE EXPRESS TERMS OF THE INVITATION. CF. 34 COMP. GEN. 24.

THE RECORD BEFORE OUR OFFICE ESTABLISHES THAT THE SUBJECT PROCUREMENT WAS ESSENTIALLY ONE FOR SUPPLIES AND THAT INSTALLATION AND/OR CONSTRUCTION WORK NECESSARILY INCIDENT THERETO CONSTITUTED BUT A SMALL FRACTION OF THE TOTAL WORK. HENCE, WE AGREE WITH THE PROCUREMENT AGENCY THAT THE SUPPLY CONTRACT PAYMENT CLAUSE PROPERLY WAS MADE A PART OF THE INVITATION.

CONCERNING THE MATTER OF THE RESPONSIBILITY OF THE SUCCESSFUL BIDDER, OUR OFFICE HAS CONSISTENTLY HELD THAT THE DETERMINATION OF A BIDDER'S OVER-ALL RESPONSIBILITY IS PRIMARILY THAT OF THE CONTRACTING OFFICER AND NOT OF THE GENERAL ACCOUNTING OFFICE. SEE 33 COMP. GEN. 549. THE RECORD ESTABLISHES THAT THE NECESSARY DETERMINATION REQUIRED BY REGULATION AS TO THE RESPONSIBILITY OF ARCHITECTURAL METAL CRAFTS WAS MADE BY THE CONTRACTING OFFICER AND, IN THE ABSENCE OF EVIDENCE OF CAPRICIOUS OR ARBITRARY ACTION TAKEN, WE ARE REQUIRED TO ACCEPT THE ADMINISTRATIVE DETERMINATION THAT THE SUCCESSFUL BIDDER WAS FINANCIALLY ABLE AND TECHNICALLY CAPABLE OF PERFORMING THE CONTRACT.

ACCORDINGLY, YOU ARE ADVISED THAT NO BASIS EXISTS UPON WHICH WE WOULD BE WARRANTED IN QUESTIONING THE AWARD AS MADE.