B-153445, MAY 14, 1964

B-153445, MAY 14, 1964

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO OUR DECISION DATED MARCH 5, 1964, B-153445, TO YOU, CONCERNING ACTION TO BE TAKEN IN THE AWARDS OF CONTRACTS UNDER INVITATION FOR BIDS NO. FPNFO-Z-54699-A-12-5-63, FOR THE PROCUREMENT OF 2-DRAWER AND 5-DRAWER FILE CABINETS. IN OUR DECISION WE HELD THAT THE PROCUREMENT SHOULD BE READVERTISED ON THE BASIS THAT THE INVITATION WAS DEFECTIVE. REQUESTS FOR RECONSIDERATION OF SAID DECISION HAVE BEEN RECEIVED FROM THE HILLSIDE METAL PRODUCTS, INC. (HILLSIDE) FROM COVINGTON AND BURLING, ATTORNEYS REPRESENTING STANDARD PRESSED STEEL COMPANY (STANDARD) AND FROM ART METAL, INC.

THE FACTS AND CIRCUMSTANCES OF THE MATTER ARE SET FORTH IN OUR DECISION OF MARCH 5, 1964, AND WILL NOT BE REPEATED HERE. THE CONTROVERSY CENTERS AROUND STANDARD'S BID LIMITING ITS MONTHLY ALLOCATION OF 2-DRAWER GRAY FILES TO 200 PER MONTH OR A POSSIBLE TOTAL OF 2400 (FOR 12 MONTHS) AS COMPARED WITH THE TOTAL ESTIMATED REQUIREMENT OF 21,784 THEREFOR, AND ALSO THE AMOUNT OF THE BID PRICE FOR THESE FILE CABINETS WHICH IS SUBSTANTIALLY LOWER THAN THE NEXT LOW BID PRICE.

IT IS THE CONTENTION OF HILLSIDE AND ART METAL, INC., THAT THE STANDARD BID IS NONRESPONSIVE TO THE INVITATION, AND SHOULD BE DISQUALIFIED, WITH AWARDS BEING MADE TO THE NEXT LOW BIDDERS. STANDARD, ON THE CONTRARY, INSISTS THAT ITS BID IS IN CONFORMANCE WITH THE INVITATION, THAT ITS BID IS RESPONSIVE, THAT ITS BID PRICE ALLOWS THEM A MARGIN OF PROFIT AND THAT PRODUCTION FACTORS REQUIRED THE LIMITATION TO 200 CABINETS A MONTH OF THE 2-DRAWER TYPE, ALTHOUGH IT LIMITED THE 5-DRAWER TYPE AT 16,800 A MONTH, WELL IN EXCESS OF THE GOVERNMENT'SESTIMATED REQUIREMENTS. THE ARGUMENTS OF THE PROTESTANTS HAVE BEEN GIVEN VERY CAREFUL CONSIDERATION AS WELL AS THE REPORT OF YOUR GENERAL COUNSEL.

ALTHOUGH OUR PRIOR DECISION DISCUSSES THE RESPONSIVENESS OR NONRESPONSIVENESS OF STANDARD'S BID, THE DETERMINATION WAS THAT THE PROCUREMENT SHOULD BE READVERTISED ON THE BASIS THAT THE INVITATION WAS DEFECTIVE. WE ARE STILL OF THE OPINION THAT THE INVITATION IS DEFECTIVE SINCE IT PERMITS THE BIDDER TO ALTER THE EFFECT OF THE WEIGHT FACTORS ASSIGNED TO EACH ITEM BY LIMITING THE NUMBER OF THE ITEM IT WILL SUPPLY AT THE PRICE QUOTED.

WEIGHT FACTORS ARE ASSIGNED TO THE INDIVIDUAL ITEMS REQUIRED ON THE BASIS OF THE TOTAL NUMBER OF THE ITEM REQUIRED. THE GREATER THE NUMBER REQUIRED THE LARGER THE WEIGHT FACTOR. WHERE A QUANTITY LESS THAN THE ESTIMATED REQUIREMENT IS OFFERED AT THE BID PRICE, THE NET EFFECT OF THE RESULT IS EXACTLY THE SAME AS IF THE WEIGHT FACTOR HAD BEEN ALTERED. THE REASONS PROMPTING THE LIMITATION ON QUANTITIES OFFERED WHERE LESS THAN THE ESTIMATED REQUIREMENT, DO NOT APPEAR MATERIAL TO US, SINCE THE USE OF SUCH LIMITATION MAY PLACE THE BIDDER WHO OFFERS TO FURNISH THE ENTIRE REQUIREMENT AT A DISADVANTAGE. IN OTHER WORDS, IN SITUATIONS SUCH AS ARE EXISTING HERE, THE USE OF WEIGHT FACTORS TO EQUALIZE COMPETITION AND OBTAIN FOR THE GOVERNMENT FULFILLMENT OF ITS REQUIREMENTS IS RENDERED MEANINGLESS.

UNDER THESE CIRCUMSTANCES WE PERCEIVE NO BASIS FOR MODIFYING OUR DECISION OF MARCH 5, 1964, AND IT IS THEREFORE SUSTAINED.

WITH REFERENCE TO THE PROTEST OF STANDARD PRESSED STEEL COMPANY AGAINST THE ISSUANCE BY YOUR AGENCY OF INVITATION FOR BIDS NO. FPNFO-P 54699-2-A-5 -5-64, FOR AN EMERGENCY DEFINITE QUANTITY PROCUREMENT OF STEEL FILE CABINETS, THERE IS ENCLOSED A COPY OF OUR DECISION OF TODAY IN THE MATTER.