B-161063, JUN. 8, 1967

B-161063, JUN. 8, 1967

TO SURREY, KARASIK, GOULD AND GREENE:

REFERENCE IS MADE TO YOUR LETTERS DATED MARCH 17, MARCH 29, APRIL 20 AND MAY 12, 1967, ON BEHALF OF ELECTROSPACE CORPORATION, PROTESTING AGAINST ANY AWARD TO THE OTIS ELEVATOR COMPANY, REFLECTONE DIVISION, UNDER INVITATION FOR BIDS (IFB) NO. N00600-67-B-0441-S, ISSUED ON JANUARY 23, 1967, BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON, D.C. THE CHESAPEAKE INSTRUMENT CORPORATION BY A TELEGRAM DATED MARCH 13, 1967, AND BY LETTERS DATED APRIL 4 AND MAY 17, 1967, HAS PROTESTED AGAINST AWARD TO ANY BIDDER OTHER THAN ITSELF. ADDITIONALLY, REPRESENTATIVES OF THE OTIS ELEVATOR COMPANY SUBMITTED A LETTER WITH ENCLOSURES DATED APRIL 26, 1967, IN SUPPORT OF ITS BID.

THE SUBJECT INVITATION SOLICITED BIDS FOR 88 DEAD RECKONING ANALYZER INDICATORS (DRAX) AND SUPPORTING SUPPLIES AND SERVICES. THE SUPPLIES AND SERVICES REQUESTED IN THE UNAMENDED INVITATION, AND THE REQUIREMENTS FOR QUOTING PRICES THEREON, ARE CONTAINED IN SECTION "A," PAGE 2 OF THE SCHEDULE, AS FOLLOWS:

"1. DEAD RECKONING ANALYZER INDICATOR,

MK 9 FSN TO BE ASSIGNED 88 EACH

"2. ONBOARD REPAIR PARTS FOR ITEM 1 88 SET (SEE NOTE A)

"3. (PRICE OF ITEMS 3 THRU

THRU SEE ATTACHED DD FORM 1423 AND (14 TO BE INCLUDED IN

14. NOTE B BELOW (PRICE OF ITEM 1.

"15. DEAD RECKONING ANALYZER INDICATOR, (PRICE OF ITEM 15

MK 9 (PREPRODUCTION EQUIPMENT) (TO BE INCLUDED IN

TID-S6605-T6-/REMAINDER OF NUMBER (PRICE OF ITEM 1

TO BE ASSIGNED) 1 EACH

"16. STOCK REPAIR PARTS FOR ITEM 1 1 LOT (SEE NOTE A)

"17. MONTHLY PRODUCTION PROGRESS MONTHLY IN (PRICE OF ITEM

REPORT, DD FORM 375 QUINTUPLICATE (17 TO BE

(INCLUDED IN

(PRICE OF ITEM 1.

"18. REPORT ON DD FORM 633.2 AS (PRICE OF ITEM

SPECIFIED HEREIN (18 TO BE

(INCLUDED IN

(PRICE OF ITEM 1.

TOTAL (EXCLUSIVE OF ITEMS

2 AND 16) ...........................'

"NOTE A" ON PAGE 2 OF THE INVITATION ADVISED BIDDERS THAT PRICES SHOULD NOT BE QUOTED FOR ITEMS 2 AND 16 SINCE THEY ARE OPTION ITEMS TO WHICH THE CLAUSE ENTITLED "OPTION FOR REPAIR PARTS (E AND M)" IS APPLICABLE. WITH RESPECT TO DATA ITEMS 3 THROUGH 14,"NOTE B" ON PAGES 3 AND 4 OF THE INVITATION PROVIDES IN RELEVANT PART AS FOLLOWS:

"CONTRACT DATA REQUIREMENTS LIST: THE CONTRACTOR SHALL DELIVER THE TECHNICAL DATA AND REPORTS LISTED ON THE CONTRACT DATA REQUIREMENTS LIST, DD FORM 1423, APPROVED 14 OCTOBER 1966, ATTACHED HERETO AND FORMING A PART OF THIS SCHEDULE.

"BIDDER/OFFEROR SHALL SHOW IN BLOCK 26 HIS ESTIMATED AMOUNT INCLUDED IN THE PRICE OF HIS BID/PROPOSAL FOR EACH ITEM OF DATA LISTED ON DD FORM 1423 USING THE GUIDELINES BELOW FOR THE PRICE GROUP INDICATED IN BLOCK 25 AND RETURN AS PART OF HIS BID/PROPOSAL. NOTWITHSTANDING THE TITLE OF BLOCK 26 "TOTAL PRICE," SUCH ESTIMATED AMOUNTS SHALL NOT CONSTITUTE SEPARATE PRICES FOR THE LISTED DATA ITEMS. THE PRICE FOR EACH SUCH ITEM OF DATA IS INCLUDED IN THE PRICE OF THE EQUIPMENT, AS ABOVE PROVIDED.

"GROUP II - ESTIMATE DIRECTLY AS PART OF THE DATA PRICE THE WORK INCURRED FOR THE EFFORT EXPENDED IN CREATING THE FINAL FORM DOCUMENTS, WHENEVER: (I) THE DATA ITEM IS ESSENTIAL TO THE PERFORMANCE OF THE PRIMARY CONTRACTED EFFORT (END ITEM PRODUCTION, RESEARCH, OR DEVELOPMENT); AND (II) THE CONTRACTOR IS REQUIRED TO CONFORM TO GOVERNMENT SPECIFICATIONS OR OTHER NAVY REQUIREMENTS WITH REGARD TO THE PREPARATION, CONTROL, AND QUALITY OF THE DATA ITEM. * * *

"THE BIDDER/OFFEROR SHALL STATE THAT THE ORDERED DATA HAS ( ( OR HAS NOT ( ( BEEN SUBMITTED PREVIOUSLY BY HIM TO THE GOVERNMENT. IF SUCH DATA HAS BEEN PREVIOUSLY SUBMITTED, BIDDER/OFFEROR SHALL STATE WHEN, AND UNDER WHAT CONTRACT.

THE DATA ITEMS LISTED ON THE DD FORM 1423 AND DESIGNATED IN BLOCK 25 AS PRICE GROUP II ARE AS FOLLOWS: ITEMS 3 THROUGH 7, RESPECTIVELY, COVER ENGINEERING DRAWINGS--- FORM 1, CATEGORIES "A," ,B," "E" AND "G" AND ENGINEERING DRAWINGS (MICROFILM) TYPE I, CLASS 1; ITEM 8 COVERS REPLENISHMENT MATERIAL; ITEM 9 COVERS TEST PROCEDURES PLAN; ITEM 10 COVERS TEST REPORT OF PREPRODUCTION EQUIPMENT; ITEMS 11 AND 12, RESPECTIVELY, COVER PRELIMINARY AND FINAL TECHNICAL MANUALS, TYPE I CATEGORY 2; ITEM 13 COVERS RELIABILITY AND MAINTAINABILITY ASSURANCE PROGRAM PLAN; ITEM 14 COVERS PROVISIONING TECHNICAL DOCUMENTATION, METHOD "B.' ALL OF THE FOREGOING ITEMS ARE TO BE PREPARED AND DELIVERED IN ACCORDANCE WITH REQUIREMENTS CONTAINED IN THE INVITATION.

SIMILARLY, TO BE INCLUDED IN THE PRICE FOR ITEM 1 WAS ITEM 15, WHICH REQUIRES SUBMISSION OF PREPRODUCTION EQUIPMENT FOR FIRST ARTICLE APPROVAL; ITEM 17, MONTHLY PRODUCTION PROGRESS REPORT, DD FORM 375; ITEM 18, WHICH REQUIRED THE CONTRACTOR TO "COMPLETE ONE (1) ORIGINAL AND ONE (1) COPY OF DD FORM 633-2 (COST AND PRICE ANALYSIS--- CONTRACT NEGOTIATION FOR TECHNICAL PUBLICATIONS PREPARATION) FOR THE ORIGINAL PREPARATION OF EACH DIFFERENT PUBLICATION UNDER THIS CONTRACT, AND FOR EACH REVISION, CHANGE, OR AMENDMENT THERETO.'

BIDDERS WERE FURTHER ADVISED THAT:

"AWARD WILL BE MADE ONLY TO ONE BIDDER FOR ALL UNITS OF ITEMS 1, 3 THRU 15, 17 AND 18 AND FOR ITEMS 2 AND 16 SUBJECT TO EXERCISE OF OPTION FOR REPAIR PARTS (E AND M). BIDS THEREFORE MUST BE ON THE BASIS OF FURNISHING (I) ALL UNITS OF ITEMS 1, 3 THRU 15, 17 AND 18 AND (II) SUBJECT TO EXERCISE OF OPTION FOR REPAIR PARTS (E AND M) ITEMS 2 AND 16.'

BY AMENDMENT NO. 0001, DATED FEBRUARY 13, 1967, THE SCOPE OF THE REQUIRED SERVICES WAS EXPANDED BY THE ADDITION OF ITEMS 19, 19A, 19B, 20, 20A, 20B, 20C AND 21, AND BIDDERS WERE ADVISED THAT BIDS MUST BE ON THE BASIS OF FURNISHING THESE ADDITIONAL ITEMS. FURTHER, THE WORDS "TOTAL (EXCLUSIVE OF ITEMS 2 AND 16)" WERE CHANGED TO "TOTAL (EXCLUSIVE OF ITEMS 2, 16, AND 20).' ITEM 19 WOULD REQUIRE THE CONTRACTOR TO FURNISH CERTAIN ENGINEERING SERVICES INCIDENTAL TO THE REPAIR, TESTING, OR INSTALLATION OF THE DRAI. BIDDERS WERE REQUIRED TO ENTER UNIT PRICES (BASED ON AN 8-HOUR MAN-DAY) FOR THE SERVICES, INCLUDING SUBSISTENCE, FOR AN ESTIMATED QUANTITY OF 220 HOURS FOR "A. DOMESTIC DUTY" AND "B. FOREIGN DUTY," AND THEREAFTER TO ENTER AN EXTENDED PRICE FOR EACH CATEGORY. ITEM 20 INVOLVES SUPPORT FOR ITEM 19 AND "NOTE C" ON PAGE 2 OF THE AMENDMENT ADVISED BIDDERS TO QUOTE UNIT PRICES FOR ITEM 20B, BUT NOT TO QUOTE A TOTAL PRICE FOR ITEM 20 SINCE AN ESTIMATED TOTAL PRICE WOULD BE SET FORTH IN THE RESULTING CONTRACT. ITEM 20A COVERS TRANSPORTATION FOR ITEM 19 TO BE REIMBURSED ON AN ACTUAL COST BASIS IN ACCORDANCE WITH PART 2 OF SECTION XV OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR); ITEM 20B COVERS OVERTIME ON WEEKDAYS, SATURDAYS, SUNDAYS AND HOLIDAYS; AND ITEM 20C COVERS SELECTED REPLACEMENT REPAIR PARTS. ITEM 21 REQUIRES THE PREPARATION OF CERTAIN INCIDENTAL REPORTS, THE COST OF WHICH IS TO BE INCLUDED IN THE PRICE OF ITEM 19.

BIDS WERE OPENED ON FEBRUARY 23, 1967, AND THE FOUR LOWEST BIDDERS ARE AS FOLLOWS:

TABLE

BIDDER TOTAL BID PRICE

OTIS ELEVATOR COMPANY $1,016,532

ELECTROSPACE CORPORATION $1,028,322

GAP INSTRUMENT CORPORATION 1,164,284

CHESAPEAKE INSTRUMENT CORPORATION 1,211,700

THE CORRECTION OR WAIVER OF CERTAIN ERRORS AND DEFICIENCIES IN THE OTIS BID BY THE PROCURING ACTIVITY IS CHALLENGED BY YOU AND BY CHESAPEAKE INSTRUMENT CORPORATION ON THE GROUND THAT THE IRREGULARITIES RENDERED THE BID NONRESPONSIVE. THESE DEFICIENCIES MAY BE STATED AS FOLLOWS: (1) FAILURE TO SHOW IN BLOCK 26 OF DD FORM 1423 (CONTRACT DATA REQUIREMENTS LIST) THE ESTIMATED AMOUNT INCLUDED IN THE PRICE OF ITS BID FOR EACH DATA ITEM LISTED ON THE FORM; (2) STATING THAT IT "HAS" PREVIOUSLY FURNISHED THE REQUESTED DATA, AND THEN FAILING TO INDICATE WHEN AND UNDER WHAT CONTRACT IT WAS SUBMITTED; (3) AN ERROR IN THE COMPUTATION OF THE TOTAL BID PRICE; (4) THE FAILURE TO INITIAL A CHANGE IN ITS TOTAL PRICE; AND (5) THE FAILURE TO PRINT OR TYPE CORPORATE NAME ON THE SCHEDULE AND EACH CONTINUATION SHEET THEREOF.

BY LETTER DATED MARCH 21, 1967, TO THE CONTRACTING OFFICER, REPRESENTATIVES OF OTIS SUBMITTED A "CLARIFICATION" OF THE FIRST THREE DEFICIENCIES. IN THAT LETTER THEY SUBMITTED THE ESTIMATED PRICES FOR THE DATA ITEMS, WHICH THEY INDICATED WERE INADVERTENTLY OMITTED. OTIS ALSO STATED THAT IT HAD NOT RECEIVED A PREVIOUS DRAI CONTRACT UNDER WHICH IT FURNISHED THE REQUIRED DATA ITEMS AND THAT A CLERICAL ERROR ACCOUNTED FOR THE IMPROPER ENTRY IN THE "HAS" BOX. FURTHER, OTIS CONFIRMED ITS UNIT PRICES FOR THE ITEMS BID UPON AND DREW ATTENTION TO THE AMOUNT OF THE ERROR IN THE ADDITION OF ITS TOTAL BID PRICE.

TURNING TO THE FIRST-MENTIONED DEFICIENCY, THE CONTRACTING AGENCY HAS TAKEN THE POSITION THAT THE SUBMISSION OF THE ESTIMATED AMOUNTS INCLUDED IN ITS BID PRICE FOR THE DATA ITEMS IS NOT AN ESSENTIAL REQUIREMENT OF THE INVITATION. IN SUPPORT OF THE DETERMINATION THAT THE OMISSION WAS A MINOR IRREGULARITY CORRECTABLE UNDER ASPR 2-405, WE ARE ADVISED THAT:

"THE COST INFORMATION IN NO WAY AFFECTS THE EVALUATION OF THE BIDS. IS USED ONLY TO ENABLE THE GOVERNMENT TO DETERMINE THE APPROXIMATE COSTS OF VARIOUS CATEGORIES OF TECHNICAL DATA, AND THUS IS USED ONLY IN A GENERAL WAY AND ONLY FOR INFORMATIONAL PURPOSES.' WE ARE FURTHER ADVISED THAT THIS APPROACH IS CONSISTENT WITH ASPR, REVISION NO. 22, DATED APRIL 3, 1967, WHICH, IN RELEVANT PART, ADDED ASPR 2-407.5 (B), PROVIDING THAT "ESTIMATED DATA PRICES SUBMITTED ON DD FORM 1423 * * * SHALL NOT BE CONSIDERED IN EVALUATING BIDS," AND THE CORRESPONDING ADDITION OF ASPR 2- 405 (VI), WHICH PROVIDES THAT "FAILURE TO COMPLETE ITEMS 25 AND 26 ON DD FORM 1423" IS A MINOR INFORMALITY.

IN ASSERTING THAT THE OMISSION AFFECTS THE RESPONSIVENESS OF THE BID--- A CONTENTION CONCURRED IN BY CHESAPEAKE--- YOU DRAW ATTENTION TO THE LANGUAGE IN "NOTE B," STATING THAT THE BIDDER "SHALL SHOW IN BLOCK 26 HIS ESTIMATED AMOUNT * * * FOR EACH ITEM OF DATA * * * AND RETURN AS PART OF HIS BID/PROPOSAL," AND MAINTAIN IN YOUR LETTERS OF MARCH 29 AND MAY 12, 1967, THAT WHEN THE LANGUAGE OF AN INVITATION REASONABLY CONVEYS TO ONE BIDDER THE IMPRESSION THAT THE INFORMATION MUST ACCOMPANY THE BID, FAILURE TO SO COMPLY REQUIRES REJECTION OF THE BID. IN SUPPORT OF THIS CONTENTION, YOU CITE OUR DECISIONS IN 39 COMP. GEN. 595; 40 ID. 132; AND ASPR 1-201.16 WHICH PROVIDES THAT THE TERM "SHALL" AS USED IN ASPR CONNOTES THE IMPERATIVE SENSE.

WE CANNOT AGREE THAT THE CITED CASES REQUIRE THE CONCLUSION SUGGESTED IN YOUR LETTER OF MAY 12, 1967, THAT: "SINCE THERE WAS NOTHING IN THE INVITATIONS TO REBUT THE PRESUMPTION THAT THE REQUESTED DATA WAS NEEDED FOR SOME PURPOSES RELEVANT TO THE PROPER EVALUATION OF THE BIDS, THE OMISSION OF THE DATA BY OTIS MADE ITS BID NON-RESPONSIVE.' INITIALLY, IT SHOULD BE NOTED THAT THE CASES CITED INVOLVE SITUATIONS WHERE THE DATA REQUESTED WERE NECESSARY TO DETERMINE WHETHER THE SUPPLIES AND SERVICES OFFERED WERE IN ACCORDANCE WITH THE SPECIFICATIONS. IN THIS REGARD, IT HAS BEEN THE POSITION OF OUR OFFICE THAT THE INVITATION SHOULD CLEARLY APPRISE BIDDERS OF THE INTENT AND EFFECT OF SUCH A DATA REQUIREMENTS PROVISION. 36 COMP. GEN. 376, 378; 37 ID. 143, 146; 37 ID. 763. FURTHER, IN EACH CASE CITED BY YOU THE TERMS OF THE INVITATIONS, IN ADDITION TO STATING THAT THE INFORMATION "SHALL" BE FURNISHED, CLEARLY ADVISED BIDDERS THAT IT WOULD BE USED IN EVALUATION OF BIDS TO DETERMINE COMPLIANCE WITH THE SPECIFICATIONS AND THAT THE FAILURE TO FURNISH WOULD BE CAUSE FOR REJECTION. WE MAY, HOWEVER, ACKNOWLEDGE THAT IN AN APPROPRIATE CASE THE FAILURE TO LIST DATA ITEM PRICES WOULD BE MATERIAL AND REQUIRE REJECTION OF THE BID AS NONRESPONSIVE. IN 41 COMP. GEN. 412, THE PROTESTING BIDDER HAD FAILED TO QUOTE A SEPARATE PRICE FOR CERTAIN ENGINEERING DATA ITEMS. UNDER THE TERMS OF THE INVITATION INVOLVED THERE, BIDDERS WERE REQUESTED TO ENTER A ,TOTAL OF ALL ITEMS BID ON" AND WOULD BY SIGNING THE BID BECOME OBLIGATED TO FURNISH "ANY OR ALL OF THE ITEMS UPON WHICH PRICES ARE QUOTED.' ON THIS BASIS, WE WERE REQUIRED TO CONCLUDE IN THAT CASE THAT ACCEPTANCE OF THE BID WOULD CREATE NO OBLIGATION TO FURNISH THE DATA ITEMS FOR WHICH NO PRICE HAD BEEN QUOTED. SEE, ALSO, B-147949, FEBRUARY 2, 1962. HERE, THE CONTRACTING AGENCY HAS EXPRESSLY DISAVOWED THE USE OF THE INFORMATION- - ESTIMATED COSTS AS OPPOSED TO ACTUAL LINE ITEM PRICES--- "FOR SOME PURPOSE RELEVANT TO THE PROPER EVALUATION OF THE BIDS" (39 COMP. GEN. 595, 597). IN OUR OPINION, THE TERMS OF THE SUBJECT INVITATION SUPPORT THIS CONCLUSION, AND WE MIGHT NOTE ADEQUATELY SUSTAIN THE RESULT INTENDED IN THE RECENT REVISION TO ASPR. IN CONTRAST TO 41 COMP. GEN. 412, DISCUSSED ABOVE, SEPARATE PRICES FOR THE DATA ITEMS (3 THROUGH 14) ARE NOT REQUESTED, AND THE INVITATION EXPLICITLY ADVISED BIDDERS THAT THE "PRICE OF ITEMS 3 THRU 14 TO BE INCLUDED IN PRICE OF ITEM 1.' ALTHOUGH THE DATA REQUIREMENTS ARE NOT LISTED ON PAGE 2 OF THE SCHEDULE, THE INTENT TO INCORPORATE DD FORM 1423 IS CLEARLY STATED IN THE LANGUAGE OF "NOTE B" THAT THE CONTRACTOR "SHALL DELIVER THE TECHNICAL DATA AND REPORTS LISTED ON THE CONTRACT DATA REQUIREMENTS LIST, DD FORM 1423.' MOREOVER, THE INTENT THAT THE DATA COST ESTIMATES DO NOT CONDITION THE OBLIGATION TO FURNISH THE DATA AS A PART OF THE COST OF ITEM 1 IS FURTHER EMPHASIZED IN "NOTE B" THAT "SUCH ESTIMATED AMOUNTS SHALL NOT CONSTITUTE SEPARATE PRICES.' THUS, BY SIGNING THE BID THE BIDDER WOULD BECOME OBLIGATED TO FURNISH THE DATA ITEMS AS A PART OF ITS PRICE BID FOR ITEM 1. IN B- 151146, JUNE 3, 1963, THE INVITATION SIMILARLY PROVIDED FOR THE INCLUSION OF THE PRICE OF THE DATA ITEM REQUIREMENTS IN THE PRICE OF OTHER ITEMS. WE CONCURRED IN THE AWARD TO THE LOW BIDDER SINCE THE RELATIVE STANDING OF THE BID THERE, AS HERE, WAS "SUSCEPTIBLE OF EXACT DETERMINATION.' SEE, ALSO, 40 COMP. GEN. 321; 42 ID. 717.

TURNING NEXT TO THE ERRONEOUS STATEMENT IN THE OTIS BID THAT IT HAD PREVIOUSLY FURNISHED THE DATA ITEMS REQUESTED UNDER A PREVIOUS CONTRACT, IT IS OUR OPINION THAT THIS DEFECT IS A MINOR IRREGULARITY NOT AFFECTING THE PRICE, QUANTITY, OR QUALITY OF THE SUPPLIES OR SERVICES OFFERED. INSOFAR AS AN INFERENCE OF AN INTENT NOT TO FURNISH THE DATA ITEMS IS SUGGESTED BY YOU AND CHESAPEAKE, WE CANNOT AGREE THAT SUCH INTENT IS A RELEVANT INQUIRY. HERE, THE TERMS OF THE INVITATION REQUIRE THE FURNISHING OF DATA ITEMS FROM ALL BIDDERS REGARDLESS OF WHETHER THE ITEMS MAY HAVE BEEN FURNISHED UNDER A PREVIOUS CONTRACT. FOR EVALUATION PURPOSES, ANY ADVANTAGE ACCRUING TO A PREVIOUS SUPPLIER WOULD HAVE TO BE REFLECTED IN A PROPORTIONATELY LOWER PRICE FOR ITEM 1, BUT SUCH FACT WOULD NOT CONDITION THE OBLIGATION TO FURNISH THE DATA. CF. 41 COMP. GEN. 412, ILLUSTRATING THE IMPACT THAT THE CERTIFICATION OF PREVIOUSLY FURNISHED DATA MAY HAVE WHEN VIEWED IN CONNECTION WITH A REQUIREMENT FOR SEPARATE LINE ITEM PRICES.

WE THEREFORE CONCLUDE THAT THE BID OF THE OTIS ELEVATOR COMPANY, REFLECTONE DIVISION, IS RESPONSIVE TO THE INVITATION AND PROPERLY MAY BE CONSIDERED FOR AWARD. ACCORDINGLY, YOUR PROTEST IS DENIED. A COPY OF OUR LETTER OF TODAY TO THE CHESAPEAKE INSTRUMENT CORPORATION IS ENCLOSED.