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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JANUARY 11. YOU STATE THAT YOUR BIDS WERE SUBMITTED BY YOUR CHICAGO WORKS (DELTA- STAR). THAT THE GREAT BULK OF YOUR BUSINESS AT CHICAGO IS WITH COMMERCIAL ACCOUNTS. IT IS INDICATED THAT YOU DO RELATIVELY LITTLE GOVERNMENT BUSINESS AND YOU ARE. THAT YOU INADVERTENTLY SUBMITTED WITH YOUR BIDS UNDER INVITATIONS DS-6168 AND DS- 6170 A "BOILER-PLATE" SET OF SO CALLED"STANDARD TERMS AND CONDITIONS" WHICH IS ROUTINE PROCEDURE ON ALL COMMERCIAL TENDERS. YOU NEVERTHELESS CONTEND THAT YOUR BIDS WERE RESPONSIVE TO THE INVITATIONS BECAUSE ON EACH OF THE BIDDING SCHEDULES YOU CHECKED THE BLOCK NECESSARY TO SHOW: (1) THAT YOU WERE WARRANTING THE OFFERED EQUIPMENT TO BE IN STRICT ACCORDANCE WITH THE PROVISIONS OF THE INVITATION.

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B-155918, FEB. 23, 1965

TO H. K. PORTER COMPANY, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JANUARY 11, 1965, PROTESTING THE REJECTION OF YOUR BID UNDER BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, INVITATION FOR BIDS NO. DS 6168, AND THE POSSIBLE REJECTION OF YOUR BID UNDER THE BUREAU'S INVITATION NO. DS-6170. THE TWO INVITATIONS COVER PROPOSED PROCUREMENTS OF BUS STRUCTURES AND RELATED EQUIPMENT FOR THE YELLOWTAIL UNIT OF THE MISSOURI RIVER BASIN PROJECT IN MONTANA, AND THE SAN LUIS PUMP GENERATING PLANT OF THE SAN LUIS UNIT, CENTRAL VALLEY PROJECT IN CALIFORNIA.

YOU STATE THAT YOUR BIDS WERE SUBMITTED BY YOUR CHICAGO WORKS (DELTA- STAR), AND THAT THE GREAT BULK OF YOUR BUSINESS AT CHICAGO IS WITH COMMERCIAL ACCOUNTS, PRINCIPALLY ELECTRIC UTILITIES. IT IS INDICATED THAT YOU DO RELATIVELY LITTLE GOVERNMENT BUSINESS AND YOU ARE, THEREFORE, NOT AS KNOWLEDGEABLE ON THE PROCEDURES AS YOU MIGHT BE; AND THAT YOU INADVERTENTLY SUBMITTED WITH YOUR BIDS UNDER INVITATIONS DS-6168 AND DS- 6170 A "BOILER-PLATE" SET OF SO CALLED"STANDARD TERMS AND CONDITIONS" WHICH IS ROUTINE PROCEDURE ON ALL COMMERCIAL TENDERS. YOU NEVERTHELESS CONTEND THAT YOUR BIDS WERE RESPONSIVE TO THE INVITATIONS BECAUSE ON EACH OF THE BIDDING SCHEDULES YOU CHECKED THE BLOCK NECESSARY TO SHOW: (1) THAT YOU WERE WARRANTING THE OFFERED EQUIPMENT TO BE IN STRICT ACCORDANCE WITH THE PROVISIONS OF THE INVITATION, NOTWITHSTANDING ANY VARIANCE BETWEEN DESCRIPTIVE MATERIAL FURNISHED AND THE PROVISIONS OF THE INVITATION; AND (2) THAT YOU WERE FURTHER WARRANTING THAT YOU WERE READY, WILLING AND ABLE TO COMPLY WITH ALL OF THE REQUIREMENTS OF THE INVITATION.

YOU SUGGEST THAT THOSE WARRANTIES TO WHICH YOU SUBSCRIBED SHOW BEYOND ALL REASONABLE DOUBT THAT YOU INTENDED AT THE TIME THE BIDS WERE SUBMITTED TO COMPLY FULLY WITH ALL TERMS AND CONDITIONS SET FORTH IN THE INVITATIONS.

WE HAVE RECEIVED AN ADMINISTRATIVE REPORT ON YOUR PROTESTS FROM THE DEPARTMENT OF THE INTERIOR, INDICATING THAT A CONTRACT HAS ALREADY BEEN AWARDED TO ANOTHER COMPANY UNDER INVITATION NO. DS-6168, THAT YOUR LOW BID WAS REJECTED AS NONRESPONSIVE BECAUSE IT INCLUDED TERMS AND CONDITIONS WHICH WERE IN CONFLICT WITH THE REQUIREMENTS OF THE INVITATION AND THAT SIMILAR TERMS AND CONDITIONS WERE MADE A PART OF YOUR BID UNDER INVITATION NO. DS-6170. SINCE THE FACTS OF THE TWO CASES REPORTEDLY ARE IDENTICAL INSOFAR AS THERE IS CONCERNED THE QUESTION OF THE RESPONSIVENESS OF YOUR BIDS, THE ADMINISTRATIVE REPORT INCLUDES DETAILED INFORMATION ONLY WITH RESPECT TO INVITATION NO. DS 6170.

IT IS ALLEGED IN YOUR LETTER OF JANUARY 11, 1965, THAT ON INVITATION NO. 6168 YOU SUBMITTED A BID OF $134,370 WHICH WAS APPROXIMATELY $30,000 UNDER THE NEXT LOW BID. WITH RESPECT TO INVITATION NO. DS 6170, THE RECORD SHOWS THAT YOUR BASIC BID PRICE WAS $370,195 AND THAT THE BASIC PRICES QUOTED BY THE REMAINING THREE BIDDERS RANGED FROM $391,344 TO $504,966. WITH THE ADDITION OF QUOTED AMOUNTS FOR THE FURNISHING OF THE SERVICES OF AN ERECTING ENGINEER IF REQUIRED BY THE GOVERNMENT, THE LOWEST AND THE SECOND LOWEST BIDS WERE EVALUATED AT THE AMOUNTS OF $389,795 AND $410,787.20. THE SECOND LOWEST BID WAS SUBMITTED BY THE WESTINGHOUSE ELECTRIC CORPORATION AND THE DEPARTMENT OF THE INTERIOR HAS INDICATED THAT IN ALL PROBABILITY THE CONTRACT AWARD WILL BE MADE TO THAT COMPANY AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER IF IT SHOULD BE DETERMINED NECESSARY TO REJECT YOUR BID AS NONRESPONSIVE.

INVITATION NO. DS-6170 WAS ISSUED ON OCTOBER 7, 1964, AND THE ORIGINALLY SCHEDULED TIME FOR PUBLIC OPENING OF BIDS WAS CHANGED TO 2 P.M., MOUNTAIN STANDARD TIME, NOVEMBER 24, 1964. A BID DATED NOVEMBER 20, 1964, WAS SUBMITTED BY YOUR OFFICE IN CHICAGO, ILLINOIS, SIGNED BY MR. J. J. HERBES, AND THERE WAS ATTACHED THERETO AS A PART OF THE BID A FIVE-PAGE "QUOTATION NO. SF-0317" OF THE SAME DATE. THAT DOCUMENT SET FORTH TECHNICAL INFORMATION REGARDING THE OFFERED EQUIPMENT, WHICH HAD BEEN REQUESTED IN THE INVITATION. THE LAST PAGE THEREOF, WHICH CONSISTS OF A COPY OF A PRINTED FORM ENTITLED "GENERAL INFORMATION," WAS SIGNED BY MR. HERBES AND MARKED AS PAGE 5 OF QUOTATION NO. SF 0317.

THE "GENERAL INFORMATION" FORM CONTAINS VARIOUS PROVISIONS WHICH, IN THE EVENT OF AN ACCEPTANCE OF YOUR BID, WOULD HAVE THE EFFECT OF LIMITING YOUR OBLIGATIONS IN CERTAIN RESPECTS TO LESS THAN THOSE CONTAINED IN THE GENERAL PROVISIONS AND SPECIAL CONDITIONS TO BE INCORPORATED IN ANY CONTRACT AWARDED PURSUANT TO THE INVITATION; ALSO, UNDER ONE OF THE PROVISIONS OF YOUR FORM, THE CONTRACT PRICE WOULD HAVE BEEN MADE SUBJECT TO INCREASE FOR THE AMOUNT OF ANY FEDERAL, STATE, OR MUNICIPAL TAX APPLICABLE TO THE OFFERED EQUIPMENT, WHEREAS PARAGRAPH A-9 (B) OF THE SPECIAL CONDITIONS OF THE CONTRACT WHICH THE GOVERNMENT PROPOSED TO AWARD UNDER INVITATION NO. DS-6170 PROVIDES:

"EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT, THE CONTRACT PRICE INCLUDES ALL FEDERAL, STATE, AND LOCAL TAXES AND DUTIES IN EFFECT AND APPLICABLE TO THIS CONTRACT ON THE TAX INCLUSIVE DATE, EXCEPT TAXES FROM WHICH THE GOVERNMENT, THE CONTRACTOR, OR THE TRANSACTIONS OR PROPERTY COVERED BY THIS CONTRACT ARE THEN EXEMPT. UNLESS SPECIFICALLY EXCLUDED, DUTIES ARE INCLUDED IN THE CONTRACT PRICE.'

ASIDE FROM WHATEVER OTHER OBJECTIONS MIGHT HAVE BEEN RAISED TO THE PROVISIONS OF THE "GENERAL INFORMATION" FORM, THE CONTRACTING OFFICER CONSIDERS THAT THE TAX PROVISION OF THE FORM RENDERED THE BID NONRESPONSIVE, PARTICULARLY SINCE THE BID DID NOT OTHERWISE PROVIDE INFORMATION AS TO THE NATURE OR AMOUNT OF ANY APPLICABLE TAXES AND HE DOES NOT HAVE INDEPENDENT INFORMATION SUFFICIENT TO ASCERTAIN THIS. IN SUPPORT OF HIS CONCLUSION THAT THE BID MUST BE REJECTED AS NONRESPONSIVE, THE CONTRACTING OFFICER HAS REFERRED TO OUR DECISION OF NOVEMBER 6, 1961, TO THE CHIEF ENGINEER OF THE BUREAU OF RECLAMATION, 41 COMP. GEN. 289, WHICH STATES IN PERTINENT PART AS FOLLOWS:

"WE MUST THEREFORE CONCLUDE THAT WHERE, AS IN THE INSTANT CASE, THE INVITATION FOR BIDS INCLUDES THE STANDARD FEDERAL, STATE AND LOCAL TAX CLAUSE, AND NO PROVISION IS OTHERWISE MADE IN THE INVITATION FOR THE EVALUATION OF TAX-EXCLUDED PRICES AND THE AWARD OF A CONTRACT ON THAT BASIS, A BID WHICH IS SUBMITTED ON A TAX-EXCLUDED BASIS, WITHOUT SPECIFICALLY IDENTIFYING THE CLASSES AND AMOUNTS OF TAXES WHICH HAVE BEEN EXCLUDED, MUST BE CONSIDERED NONRESPONSIVE TO THE INVITATION. CF. 37 COMP. GEN. 864. NOTWITHSTANDING THE FACT THAT IN THIS CASE THE DIFFERENCE IN BID PRICES MAY BE MORE THAN SUFFICIENT TO COVER ANY TAXES EXCLUDED FROM WORDEN-ALLEN'S BID PRICE, WE MUST THEREFORE CONCLUDE THAT THE BID IS NONRESPONSIVE TO THE INVITATION AND THAT AN AWARD AT THE PRICE BID WOULD BE IMPROPER.'

A SIMILAR RULING WAS MADE IN OUR DECISION OF JULY 13, 1964, B 154254, TO THE ATTORNEY REPRESENTING A COMPANY WHOSE BID WAS REJECTED UNDER AN INVITATION FOR BIDS ISSUED BY THE NAVAL ORDNANCE PLANT, LOUISVILLE, KENTUCKY, BECAUSE THERE WAS INCLUDED IN THE BID A STATEMENT THAT THE SALES PRICE "IS SUBJECT TO APPLICABLE TAXES AND IS A STANDARD PRICE WHICH IS AS LOW AS WOULD BE OFFERED TO OUR MOST FAVORED CUSTOMER AND/OR OTHER GOVERNMENT AGENCIES.' IT WAS ADMINISTRATIVELY INDICATED THAT THE BIDDER'S QUALIFYING STATEMENT WAS INCLUDED BY ACCIDENT OR INADVERTENCE. HOWEVER, WE CONCLUDED THAT THE INCLUSION OF THE QUALIFYING STATEMENT, INADVERTENT THOUGH IT MAY HAVE BEEN, COULD NOT BE WAIVED SINCE IT MATERIALLY AFFECTED THE SUBSTANCE OF THE BID.

THE FACTS OF THOSE CASES ARE SIMILAR IN ALL MATERIAL RESPECTS TO THOSE INVOLVED IN THE CONSIDERATION OF YOUR BID UNDER INVITATION NO. DS 6170 EXCEPT FOR THE ABOVE-CITED WARRANTIES MADE IN CONNECTION WITH THAT PART OF THE BIDDING SCHEDULE WHICH REQUIRED THE SUBMISSION OF SUFFICIENT INFORMATION FOR THE GOVERNMENT TO DETERMINE WHETHER A BID WAS RESPONSIVE FROM THE STANDPOINT OF MEETING THE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS, AND WHICH EVIDENTLY WAS ALSO INTENDED TO PLACE BIDDERS ON SPECIFIC NOTICE THAT, WHILE THE GOVERNMENT WOULD NECESSARILY MAKE A DETERMINATION OF A LOW BIDDER'S RESPONSIBILITY AS A PROSPECTIVE CONTRACTOR FOR THE FURNISHING OF THE PARTICULAR EQUIPMENT, THE CONTRACTOR WOULD BE ASSUMING THE RISK OF ANY INABILITY TO PERFORM IN ACCORDANCE WITH THE CONTRACT SPECIFICATIONS.

THE CONTRACTING OFFICER HAS EXPRESSED THE OPINION THAT THE WARRANTIES GIVEN AT PAGE K OF THE BIDDING SCHEDULE OF INVITATION NO. DS-6170, BY CHECKING OF THE BLOCK OPPOSITE THE DESIGNATED ,SCHEDULE NO. 1," PERTAIN ONLY TO THE EQUIPMENT OFFERED AND DO NOT PURPORT TO EXTEND TO ANY OTHER TERMS OR CONDITIONS OF THE INVITATION, OR TO ANY SALE TERMS OR CONDITIONS WHICH A BIDDER INCORPORATED IN HIS BID, SUCH AS A CONDITION THAT THE AMOUNT OF ANY APPLICABLE FEDERAL, STATE, OR MUNICIPAL TAX SHALL BE ADDED TO THE SALE PRICE AND PAID BY THE PURCHASER. WE ALSO BELIEVE THAT THE WARRANTIES WHEN TAKEN IN CONTEXT WITH THE PROVISIONS BEGINNING AT PAGE K OF THE BIDDING SCHEDULE SHOULD NOT BE REGARDED AS TAKING PRECEDENCE OVER ANY SPECIFIC QUALIFICATIONS INCLUDED IN THE BID RESPECTING EITHER THE BID PRICE OR ATTEMPTS BY THE BIDDER TO LIMIT HIS RESPONSIBILITY AND LIABILITY TO LESS THAN THAT PERMITTED UNDER THE GENERAL PROVISIONS AND SPECIAL CONDITIONS OF THE CONTRACT OFFERED TO ALL PROSPECTIVE BIDDERS.

IT IS AN ESTABLISHED RULE WITH RESPECT TO FORMAL COMPETITIVE PROCUREMENT BY GOVERNMENTAL AGENCIES THAT A CONTRACT AWARDED TO A SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS AND, WHERE ONE BIDDER RESERVES RIGHTS AND IMMUNITIES FROM RESPONSIBILITY NOT EXTENDED TO ALL BIDDERS BY THE ADVERTISED CONDITIONS AND SPECIFICATIONS, IT IS CLEAR THAT A CONTRACT AWARDED UPON THE BASIS OF SUCH A BID WOULD NOT BE THE CONTRACT OFFERED TO ALL BIDDERS.

REGARDLESS OF YOUR INTENT, IT IS OUR OPINION THAT TO PERMIT YOU TO WITHDRAW THE CONDITIONS SET FORTH AT PAGE 5 OF YOUR QUOTATION NO. SF 0317, WHICH ACCOMPANIED YOUR SIGNED BID UNDER INVITATION NO. DS-6170, WOULD BE TANTAMOUNT TO PERMITTING A CHANGE IN BID AFTER PUBLIC OPENING AND THEREBY CONSTITUTE A CLEAR VIOLATION OF THE INTENT AND PURPOSES OF THE ADVERTISING STATUTES OF THE UNITED STATES WHICH MUST BE VIEWED AS REQUIRING THAT ALL PROSPECTIVE BIDDERS BE AFFORDED AN OPPORTUNITY TO COMPETE FOR THE BUSINESS OF THE GOVERNMENT ON A COMMON BASIS AND AS PROHIBITING A CHANGE IN BID AFTER PUBLIC OPENING SINCE ANY SUCH PRACTICE WOULD HAVE AN ADVERSE EFFECT UPON THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461, 463; AND CITY OF CHICAGO V. MOHR, 74 N.E. 1056.

ACCORDINGLY, AND SINCE IT APPEARS THAT THE SITUATION IN REGARD TO YOUR BID UNDER INVITATION NO. DS-6168 IS SUBSTANTIALLY THE SAME AS THAT INVOLVED IN THE CASE OF YOUR BID UNDER INVITATION NO. DS-6170, YOUR PROTESTS CONCERNING BOTH INVITATIONS MUST BE, AND ARE, HEREBY DENIED.

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