B-154403, JUL. 21, 1964

B-154403, JUL. 21, 1964

TO MAXWELL ELECTRONICS CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 8, 1964, PROTESTING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. SBCS-IFB-383-1010-64 ISSUED BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA, ON APRIL 22, 1964.

THE INVITATION SOLICITED BIDS--- TO BE OPENED JUNE 1, 1964--- FOR FURNISHING QUANTITIES OF AUDIO AMPLIFIERS TO CONFORM TO CERTAIN SPECIFICATIONS. BIDDERS WERE REQUESTED TO SUBMIT A PRICE OF EACH OF FIVE INDIVIDUAL QUANTITIES: (1) 7,237; (2) 8,787; (3) 10,338; (4) 11,889; AND (5) 13,439. AWARD WAS TO BE MADE TO THE LOW OVER-ALL BIDDER. ON THE BASIS OF THE CONTEMPLATED PROCUREMENT OF 13,439 AMPLIFIERS, 13,166 WERE TO BE DELIVERED F.O.B. DESTINATION AND 273 AMPLIFIERS WERE TO BE DELIVERED F.O.B. ORIGIN (PARAGRAPH 104-2.1 OF SCHEDULE AND NOTE ON PAGE 10 OF SCHEDULE). PAGE 10 OF THE SCHEDULE WITH RESPECT TO PROMPT PAYMENT DISCOUNT PROVIDED AS FOLLOWS:

" "/C) IN ACCORDANCE WITH SUBPARAGRAPH (A), IN CONNECTION WITH THIS INVITATION FOR BIDS, PROMPT PAYMENT DISCOUNTS WILL BE CONSIDERED IN THE EVALUATION OF BIDS, PROVIDED THE MINIMUM PERIOD FOR THE OFFERED DISCOUNT IS TEN (10) DAYS IF DELIVERY IS OFFERED F.O.B PLACE OF MANUFACTURE OR THIRTY (30) DAYS IF DELIVERY IS OFFERED F.O.B. DESTINATION. THE OFFERED DISCOUNT OF A SUCCESSFUL BIDDER WILL FORM A PART OF THE AWARD WHETHER OR NOT SUCH DISCOUNT WAS CONSIDERED IN THE EVALUATION OF HIS BID, AND SUCH DISCOUNT WILL BE TAKEN IF PAYMENT IS MADE WITHIN THE DISCOUNT PERIOD.'"

IN RESPONSE TO THE INVITATION, 17 TIMELY BIDS WERE RECEIVED. THE LOWEST RESPONSIVE BIDDER ON THE QUANTITY TO BE AWARDED (13,439) SUBMITTED A BID OF $151,188.75, TERMS NET 30 DAYS. YOUR BID IN THE AMOUNT OF $155,892.40, TERMS 10 PERCENT 10 DAYS, WAS THE SECOND LOW BID.

IN YOUR LETTER OF JUNE 3, 1964, TO THE CONTRACTING OFFICE, YOU SUBMITTED A "CLARIFICATION" OF THE PROMPT PAYMENT DISCOUNT TERMS YOU INCORPORATED IN YOUR BID. YOU ALLEGED THAT IT WAS YOUR INTENT TO BID 10 PERCENT DISCOUNT "FOR THE MINIMUM PERIOD ALLOWED BY THE IFB," NAMELY, 10 PERCENT FOR THE ITEMS REQUIRED F.O.B. ORIGIN OR PLACE OF MANUFACTURE AND 10 PERCENT FOR THE ITEMS REQUIRED F.O.B. DESTINATION. YOU CONTEND THAT SINCE BIDS WERE REQUESTED ON TWO BASES, AND TWO PERIODS OF TIME WERE INVOLVED, THE INSERTION OF A 10 PERCENT DISCOUNT FOR 10 DAYS (F.O.B. ORIGIN QUANTITIES) AND 10 PERCENT DISCOUNT FOR 30 DAYS (F.O.B. DESTINATION) WOULD HAVE BEEN CONFUSING TO THE CONTRACTING OFFICE. ALSO, IN YOUR TELEGRAM OF JUNE 8, 1964, TO THE CONTRACTING OFFICE, YOU STATE THAT IT WAS CONFUSING AS TO WHAT ITEMS WERE TO BE F.O.B. ORIGIN AND F.O.B. DESTINATION. HOWEVER, PAGE 19 OF THE SCHEDULE STATES THAT ITEMS AAX TO CCX ONLY WERE TO BE DELIVERED F.O.B. ORIGIN. BY REFERRING TO PAGE 9 OF THE SCHEDULE, IT WILL BE NOTED THAT ONLY THE THREE LAST ITEMS WERE DESIGNATED AS "AAX," "BBX" AND "CCX" AND THE QUANTITY THEREUNDER WAS TO BE ADJUSTED IN ACCORDANCE WITH THE NOTE APPEARING ON THE BOTTOM OF PAGE 10 OF THE SCHEDULE IF THE TOTAL QUANTITY AWARDED DIFFERED FROM THE TOTAL QUANTITY SET OUT ON PAGE 9.

YOUR BID CANNOT BE CONSIDERED AS ALLOWING 30 DAYS FOR THE 10 PERCENT DISCOUNT IN THE CASE OF THE F.O.B. DESTINATION ITEMS, IN THE ABSENCE OF A SPECIFIC STATEMENT OR OTHER INDICATION OF SUCH AN INTENTION. AS POINTED OUT BY THE CONTRACTING OFFICER IN HIS REPORT, YOU COULD HAVE MANIFESTED THIS INTENT BY A SIMPLE NOTATION IN THE BID OR IN A COVERING LETTER THAT YOU WERE ALLOWING 10 DAYS FOR ACCEPTANCE OF THE DISCOUNT FOR THE F.O.B.ORIGIN ITEMS AND 30 DAYS FOR THE ACCEPTANCE OF THE DISCOUNT FOR THE F.O.B. DESTINATION ITEMS. IF YOUR "CLARIFICATION" OF THE DISCOUNT TERMS WERE NOW ACCEPTED, IT WOULD BE AN ACCEPTANCE OF A CHANGE IN BID PRICE AFTER OPENING OF BIDS AND SUCH A CHANGE IN BID PRICE WOULD RESULT IN YOUR BID BECOMING LOW AND DISPLACING THE OTHERWISE LOW BID.