B-158740, MAY 3, 1966

B-158740, MAY 3, 1966

TO THE SECRETARY OF STATE:

REFERENCE IS MADE TO A REPORT (REF: ST/PO: IS) DATED APRIL 1, 1966, FROM THE ACTING CHIEF, DIVISION OF SUPPLY AND TRANSPORTATION SERVICES WHICH WAS CONCERNED WITH A PROTEST BY PENCO PRODUCTS, INC., AGAINST REJECTION OF ITS LOW BID UNDER INVITATION FOR BIDS (IFB) NO. ST-66-36, ISSUED BY YOUR DEPARTMENT ON FEBRUARY 25, 1966.

THE IFB CALLED FOR A SHELF SECTION CONSISTING OF 7 ITEMS, PLUS AN 8TH ITEM WHICH REQUIRED THEIR ASSEMBLY UNDER GOVERNMENT SUPERVISION. ALL EQUIPMENT FURNISHED WAS TO BE IN ACCORDANCE WITH FEDERAL SPECIFICATION AA- S-271C, AS AMENDED. PARAGRAPH 6.7 OF THE SPECIFICATION STATES THE BELIEF "THAT THIS SPECIFICATION ADEQUATELY DESCRIBES THE CHARACTERISTICS NECESSARY TO SECURE THE DESIRED MATERIAL, ...'

FIVE BIDS WERE RECEIVED AND OPENED AT THE SCHEDULED BID OPENING TIME, 2 P.M. EST, MARCH 11, 1966. THE LOWEST BID RECEIVED, THAT OF PENCO PRODUCTS AT A TOTAL PRICE OF $10,908.20, WAS REJECTED AS NONRESPONSIVE SINCE IT FAILED TO SUBMIT ANY DESCRIPTIVE LITERATURE, WHICH SUBMISSION WAS REQUIRED BY PARAGRAPH V.D. ON PAGE 4 OF THE INVITATION. THIS PARAGRAPH READS AS FOLLOWS:

"SUBMISSION OF DESCRIPTIVE LITERATURE:

"BIDDER SHALL SUBMIT THREE (3) COPIES OF CUTS, BROCHURES AND SPECIFICATIONS AND/OR ANY NECESSARY INFORMATION TO ALLOW DETERMINATIONS OF THE ACCEPTABILITY OF THE ITEMS QUOTED. THE LITERATURE MUST BE FURNISHED AS A PART OF THIS BID AND MUST BE RECEIVED PRIOR TO TIME SET FOR OPENING OF BIDS. THE LITERATURE FURNISHED MUST BE IDENTIFIED TO SHOW THE ITEM IN THE BID TO WHICH IT PERTAINS. THE DESCRIPTIVE LITERATURE IS REQUIRED TO ESTABLISH, FOR THE PURPOSE OF BID EVALUATION AND AWARD, DETAILS OF THE PRODUCTS THE BIDDER PROPOSES TO FURNISH AS TO DESIGN, MATERIALS AND CONSTRUCTION.

"FAILURE TO SUBMIT NECESSARY BROCHURES OR SPECIFICATIONS BY OPENING TIME SPECIFIED OR FAILURE OF SUCH DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT OFFERED CONFORMS TO THE SPECIFICATIONS AND OTHER REQUIREMENTS IN THIS INVITATION FOR BIDS WILL BE CONSIDERED AS NONRESPONSIVE.'

THE REPORT STATES THAT THIS LITERATURE WAS NEEDED TO CLEARLY IDENTIFY THE EXACT STYLE AND MODEL OF SHELVING BEING OFFERED, AND TO INSURE THAT IT WAS A HIGH QUALITY PRODUCT MEETING THE SPECIFICATION REQUIREMENTS. HOWEVER, THE RECORD INDICATES THAT THE SUBMISSION OF A MERE CATALOG BY ALL OTHER RESPONSIVE BIDDERS WAS SUFFICIENT TO SATISFY THE REQUIREMENT, AND MOREOVER, WE HAVE BEEN INFORMALLY ADVISED BY THE CONTRACTING ACTIVITY THAT ITS REQUIREMENTS WILL BE MET BY ANY PRODUCT WHICH COMPLIES WITH THE FEDERAL SPECIFICATION.

WE HAVE RECOGNIZED THAT IN PROCURING HIGHLY SPECIALIZED EQUIPMENT AN ADMINISTRATIVE AGENCY MAY REQUIRE BIDDERS TO SUPPLY SPECIFIC DESCRIPTIVE DATA ON SPECIFIC COMPONENTS OF ITEMS BEING PROCURED TO ENABLE IT TO CONCLUDE PRECISELY WHAT THE BIDDER PROPOSES TO FURNISH,AND WHAT THE GOVERNMENT WOULD BE BINDING ITSELF TO PURCHASE BY MAKING AN AWARD. COMP. GEN. 415. HOWEVER, WE HAVE ALSO HELD THAT A REQUIREMENT THAT BIDDERS FURNISH UNSPECIFIED DATA WHICH IS "SUFFICIENT" OR "ADEQUATE" TO PROVE COMPLIANCE WITH THE SPECIFICATIONS, MAY RENDER AN INVITATION DEFECTIVE FOR FAILURE TO PUT BIDDERS ON NOTICE OF THE EXTENT OF DETAIL THAT THE AGENCY REQUIRED THEIR DESCRIPTIVE DATA TO INCORPORATE. 42 COMP. GEN. 598; ID. 737.

THE FEDERAL PROCUREMENT REGULATIONS (FPR) AT SECTION 1-2.202-5 (B), (C) AND (D) ARE ALSO CONCERNED WITH THE IMPROPER INCLUSION IN INVITATIONS OF DESCRIPTIVE LITERATURE PROVISIONS. THESE SUBSECTIONS OF THE FPR PROVIDE IN RELEVENT PART:

"/B) POLICY. BIDDERS SHALL NOT BE REQUIRED TO FURNISH DESCRIPTIVE LITERATURE AS A PART OF THEIR BIDS UNLESS THE CONTRACTING AGENCY DEEMS THAT SUCH LITERATURE IS NEEDED TO ENABLE IT TO DETERMINE BEFORE AWARD WHETHER THE PRODUCTS OFFERED MEET THE SPECIFICATION REQUIREMENTS OF THE INVITATION FOR BIDS AND TO ESTABLISH EXACTLY WHAT THE BIDDER PROPOSES TO FURNISH. IT MAY BE APPROPRIATE TO REQUIRE DESCRIPTIVE LITERATURE IN THE PROCUREMENT OF HIGHLY TECHNICAL OR SPECIALIZED EQUIPMENT, OR WHERE CONSIDERATIONS SUCH AS DESIGN OR STYLE ARE IMPORTANT IN DETERMINING ACCEPTABILITY OF THE PRODUCT.

"/C) JUSTIFICATION. THE REASONS WHY ACCEPTABLE PRODUCTS CANNOT BE PROCURED WITHOUT THE SUBMISSION OF DESCRIPTIVE LITERATURE SHALL BE SET FORTH AND FILED IN THE CASE FILE, EXCEPT WHERE SUCH SUBMISSION IS REQUIRED BY THE FORMAL SPECIFICATIONS (FEDERAL, MILITARY, DEPARTMENTAL, ETC.) APPLICABLE TO THE PROCUREMENT.

"/D) REQUIREMENTS OF INVITATION FOR BIDS. WHEN DESCRIPTIVE LITERATURE IS REQUIRED, THE INVITATION FOR BIDS SHALL CLEARLY STATE WHAT DESCRIPTIVE LITERATURE IS TO BE FURNISHED, THE PURPOSE FOR WHICH IT IS REQUIRED, THE EXTENT TO WHICH IT WILL BE CONSIDERED IN THE EVALUATION OF BIDS, AND THE RULES WHICH WILL APPLY IF A BIDDER FAILS TO FURNISH IT BEFORE BID OPENING OR IF THE LITERATURE FURNISHED DOES NOT COMPLY WITH THE REQUIREMENTS OF THE INVITATION FOR BIDS....

"/1) EXCEPT AS PROVIDED IN (D) (2) OF THIS SECTION, IF BIDDERS ARE TO FURNISH DESCRIPTIVE LITERATURE AS A PART OF THEIR BIDS, A PROVISION SUBSTANTIALLY AS FOLLOWS (MODIFIED, IF APPROPRIATE, IN ACCORDANCE WITH (E) (1) OF THIS SECTION) SHALL BE INCLUDED IN THE INVITATION FOR BIDS:

"REQUIREMENT FOR DESCRIPTIVE LITERATURE

"/A)DESCRIPTIVE LITERATURE AS SPECIFIED IN THIS INVITATION FOR BIDS MUST BE FURNISHED AS A PART OF THE BID AND MUST BE RECEIVED BEFORE THE TIME SET FOR OPENING BIDS. THE LITERATURE

FURNISHED MUST BE IDENTIFIED TO SHOW THE ITEM IN THE BID TO WHICH IT PERTAINS. THE DESCRIPTIVE LITERATURE IS REQUIRED TO ESTABLISH, FOR THE PURPOSES OF BID EVALUATION AND AWARD, DETAILS OF THE PRODUCTS THE BIDDER PROPOSES TO FURNISH AS TO. ("CONTRACTING OFFICER SHALL INSERT SIGNIFICANT ELEMENTS SUCH AS DESIGN, MATERIALS, COMPONENTS, OR PERFORMANCE CHARACTERISTICS, OR METHODS OF MANUFACTURE, CONSTRUCTION, ASSEMBLY, OR OPERATION, AS APPROPRIATE)

SINCE THE INSTANT PROCUREMENT APPEARS TO BE FOR A STANDARD COMMERCIAL PRODUCT, AND SINCE IT IS CONCEDED THAT THE FEDERAL SPECIFICATION FOR THIS PRODUCT ADEQUATELY AND FULLY DESCRIBES THE MATERIAL REQUIREMENTS OF THE DIVISION, IT IS QUESTIONABLE WHETHER THE CRITERIA OF FPR 1-2.202-5 (B) FOR THE USE OF DESCRIPTIVE LITERATURE HAVE BEEN MET. SEE B-157012, DATED JUNE 29, 1965, COPY ENCLOSED. IN VIEW OF THE ABOVE, AND SINCE WE FAIL TO FIND IN THE CASE FILE ANY REASON WHY ACCEPTABLE PRODUCTS CANNOT BE PROCURED WITHOUT THE SUBMISSION OF DESCRIPTIVE LITERATURE, AS PROVIDED FOR BY FPR 1 -2.202-5 (C), WE MUST CONCLUDE THAT NO SUCH REASON EXISTS. FURTHERMORE, THE DESCRIPTIVE LITERATURE REQUIREMENT, QUOTED ABOVE, REQUIRES BIDDERS TO SUBMIT COPIES OF CUTS, BROCHURES, SPECIFICATIONS AND ANY NECESSARY INFORMATION TO ESTABLISH "DETAILS ... AS TO DESIGN, MATERIALS AND CONSTRUCTION," AND "TO ALLOW DETERMINATIONS OF THE ACCEPTABILITY OF THE ITEMS TED.' EVEN IF AN ACCEPTABLE PRODUCT COULD NOT BE PROCURED WITHOUT DESCRIPTIVE LITERATURE, A REQUIREMENT FOR SUCH LITERATURE SHOULD ADVISE BIDDERS WITH GREATER PARTICULARITY BOTH AS TO THE EXTENT OF THE DETAIL REQUIRED AND ASTO THE PURPOSE IT IS EXPECTED TO SERVE. 38 COMP. GEN. 59. IN ORDER TO PUT EACH BIDDER ON THE SAME FOOTING IN SUPPLYING DESCRIPTIVE LITERATURE, IT IS ESSENTIAL THAT THE NEED FOR SUCH LITERATURE BE SET FORTH IN THE INVITATION IN THE GREATEST DETAIL PRACTICAL UNDER THE CIRCUMSTANCES. FOR THE FOREGOING REASONS IT IS OUR OPINION THAT THE DESCRIPTIVE LITERATURE REQUIREMENT WAS IMPROPERLY INCLUDED IN THE INVITATION.

WITH RESPECT TO WHETHER THE REQUIREMENT FOR DESCRIPTIVE LITERATURE MAY BE DISREGARDED, WE HAVE HELD THAT WHERE COMPETITION HAS NOT BEEN AFFECTED, WHERE THE AGENCY BY AWARD WOULD ENTER INTO A BINDING CONTRACT FOR WHAT IT WANTED, AND WHERE NO BIDDER OBTAINED AN OPTION OR OTHER UNDUE ADVANTAGE BECAUSE OF THE DEFECT IN THE INVITATION, THE DEFECTIVE PROVISION IN THE INVITATION MAY BE OMITTED AND AN AWARD MADE THEREUNDER. SEE B-157297, DATED SEPTEMBER 17, 1965, AND CASES CITED THEREIN. THEREFORE, IT IS OUR VIEW THAT WHERE, AS HERE, A REQUIREMENT FOR DESCRIPTIVE LITERATURE WAS IMPROPERLY INCLUDED IN AN INVITATION WHICH ALSO INCLUDED SPECIFICATIONS THAT ADEQUATELY AND COMPLETELY DESCRIBE THE AGENCY'S NEEDS, A BIDDER'S FAILURE TO COMPLY WITH THIS REQUIREMENT MAY BE DISREGARDED IF SUCH FAILURE DID NOT GIVE THE BIDDER SUCH AN UNFAIR COMPETITIVE ADVANTAGE AS WOULD MAKE CONSIDERATION OF HIS BID PREJUDICIAL TO OTHER BIDDERS WHO COMPLIED WITH THE REQUIREMENT. IN THE INSTANT PROCUREMENT, WE SEE NO VALID BASIS FOR CONCLUDING THAT CONSIDERATION OF PENCO'S BID WOULD BE PREJUDICIAL TO OTHER BIDDERS, SINCE THE REPORT STATES (AND IT APPEARS REASONABLE TO CONCLUDE) THAT THE REQUIREMENT FOR THE CATALOGS SUBMITTED BY THE RESPONSIVE BIDDERS DID NOT ADD TO THE COST OF THE PROCUREMENT. THEREFORE, ANY CONTENTION THAT THE COST OF DESCRIPTIVE LITERATURE OF THE TYPE SUBMITTED BY THE RESPONSIVE BIDDERS WOULD NECESSARILY BE REFLECTED IN THEIR BID PRICES, AND THAT THE LOW BIDDER GAINED A MATERIAL ADVANTAGE BY IGNORING THE REQUIREMENT IS, AT BEST, DOUBTFUL. IN OUR DECISION OF JANUARY 5, 1965, B- 155077, IN RESPONSE TO A SIMILAR CONTENTION INVOLVING A REQUIREMENT FOR A ONE-LINE DIAGRAM AND OUTLINE SKETCH IF AN ITEM WE STATED:

"* * * IT IS OUR BELIEF THAT BIDDERS IN PREPARING BID PRICES ORDINARILY INCLUDE IN THEIR ESTIMATES THE COST OF DOING THE WORK UNDER THE CONTRACT PLUS A PERCENTAGE FOR PROFIT AND OVERHEAD AND OTHERWISE ABSORB THE SPECIFIC COST OF PREPARING BIDS AS AN EXPENSE OF DOING BUSINESS.'

ACCORDINGLY, WE MUST CONCLUDE THAT PENCO'S FAILURE TO SUBMIT DESCRIPTIVE LITERATURE DID NOT REQUIRE OR JUSTIFY REJECTION OF ITS BID, AND ITS PROTEST AGAINST SUCH REJECTION IS THEREFORE SUSTAINED.