B-163753, MAY 28, 1968, 47 COMP. GEN. 682

B-163753, MAY 28, 1968, 47 COMP. GEN. 682

BIDS - EVALUATION - ALL OR NONE - LOW ON EACH ITEM REQUIREMENT UNDER AN INVITATION FOR BIDS (IFB) CONTEMPLATING A REQUIREMENTS TYPE CONTRACT WHICH EXPRESSLY MADE ARTICLE 27 OF GENERAL SERVICES ADMINISTRATION FORM INAPPLICABLE AND INADVERTENTLY OMITTED THE SUBSTITUTE SPECIAL "ALL OR NONE" CLAUSE REQUIRED BY PARAGRAPH 5A-2.201 73 OF GENERAL SERVICES ADMINISTRATION PROCUREMENT REGULATIONS, TO THE EFFECT EACH ITEM OF AN "ALL OR NONE" BID MUST BE LOW IN PRICE, AN "ALL OR NONE" BID LOW AS TO AGGREGATE BID PRICE BUT NOT LOW ON EACH ITEM WAS IMPROPERLY REJECTED ON THE BASIS THE OMITTED PROVISION WAS INCORPORATED INTO THE IFB BY OPERATION OF LAW UNDER THE CHRISTIAN DOCTRINE. THE LOW BIDDER ON NOTICE OF THE EXCLUSION OF ARTICLE 27 AND UNDER NO OBLIGATION TO AFFIRM THE EXCLUSION, PROPERLY ASSUMED ITS "ALL OR NONE" BID WAS NOT REQUIRED TO BE LOW ON ALL ITEMS. HOWEVER, NOTWITHSTANDING THE DEFECTIVE SOLICITATION, CANCELLATION OF CONTRACTS AWARDED WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, MAY 28, 1968:

REFERENCE IS MADE TO A LETTER DATED APRIL 23, 1968, WITH ENCLOSURES, FROM YOUR GENERAL COUNSEL, FURNISHING THE REPORT REQUESTED IN OUR LETTER OF MARCH 12, 1968, ON THE PROTESTS OF EUGENE DREXLER, ATTORNEY AT LAW, NEW YORK, NEW YORK, ON BEHALF OF BRISTOL DYNAMICS, INC. (BRISTOL), AGAINST THE REJECTION OF THE CORPORATION'S "ALL OR NONE" BID SUBMITTED IN RESPONSE TO SOLICITATION NO. FPNTN-E2-56503-A-11-28-67, ISSUED BY THE FEDERAL SUPPLY SERVICE, WASHINGTON, D.C.

THE SOLICITATION, ISSUED ON OCTOBER 24, 1967, REQUESTED BIDS FOR STEEL PUNCHES DURING THE PERIOD MARCH 1, 1968, OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH FEBRUARY 28, 1969. THE SOLICITATION, WHICH CONTEMPLATED A REQUIREMENTS-TYPE CONTRACT, CONTAINED A GUARANTEED MINIMUM QUANTITY CLAUSE AND A MAXIMUM ORDER LIMITATION. PROSPECTIVE BIDDERS WERE ADVISED IN THE SOLICITATION THAT AWARDS WOULD BE MADE ITEM-BY-ITEM ON THE BASIS OF THE GOVERNMENT'S ESTIMATED PEAK MONTHLY REQUIREMENTS TO THE LOW RESPONSIVE BIDDERS UP TO THEIR STATED MONTHLY SUPPLY POTENTIALS.

EIGHTEEN BIDS WERE RECEIVED AND OPENED ON NOVEMBER 28, 1967. AMONG THE GROUP BIDS SUBMITTED BY BRISTOL WERE BIDS ON AN "ALL OR NONE" BASIS FOR ITEMS 6 THROUGH 11, 14 THROUGH 22, AND 32 THROUGH 36. IT IS REPORTED THAT BRISTOL'S GROUP BIDS WERE NOT LOW WITH RESPECT TO EACH OF THE ITEMS INVOLVED AND, FOR THAT REASON, COULD NOT BE ACCEPTED. THE RECORD INDICATES THAT ON FEBRUARY 14, 1968, THE ITEMS ON WHICH BRISTOL SUBMITTED "ALL OR NONE" BIDS WERE AWARDED TO OTHER BIDDERS.

IN HIS LETTER OF MARCH 5, 1968, TO THE CONTRACTING OFFICER, THE ATTORNEY FOR BRISTOL STATES THAT HIS CLIENT WAS ADVISED BY THE CONTRACTING OFFICER THAT ALTHOUGH ITS "ALL OR NONE" BIDS ON ITEMS 6 THROUGH 11 AND 32 THROUGH 36 WERE LOW ON AN AGGREGATE BID PRICE BASIS, NO AWARD COULD BE MADE TO IT BECAUSE OF PARAGRAPH 5-2.407-50 (B) OF THE GENERAL SERVICES ADMINISTRATION PROCUREMENT REGULATIONS (GSPR) WHICH PROVIDES AS FOLLOWS:

IN THE EVALUATION OF BIDS FOR INDEFINITE QUANTITIES WHEN THE INVITATION FOR BIDS DOES NOT PROVIDE FOR AGGREGATE AWARDS ONLY (SEE SEC. 5-2.201-54), BIDS SUBMITTED ON AN "ALL OR NONE" BASIS SHALL NOT BE CONSIDERED UNLESS THE BID IS LOW ON EACH ITEM TO WHICH THE "ALL OR NONE" OFFER APPLIES.

BRISTOL'S ATTORNEY ADVISED THE CONTRACTING OFFICER THAT HE IS NOT UNMINDFUL OF THE FOREGOING REGULATION BUT THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE SOLICITATION THIS REGULATION WAS NEGATED. SPECIFIC REFERENCE WAS MADE TO THE FACT THAT THE SOLICITATION ON PAGE 5 SPECIFICALLY DELETED THE "ALL OR NONE" PROVISION WHICH INCORPORATED SUCH REGULATION, NAMELY, ARTICLE 27 OF THE SUPPLEMENTAL PROVISIONS GSA FORM 1424, PART II. BRISTOL'S ATTORNEY HAS REQUESTED THAT THE AWARDS OF ITEMS 6 THROUGH 11 AND 32 THROUGH 35 BE SET ASIDE AND THAT SUCH ITEMS BE AWARDED TO BRISTOL.

ON PAGE 5 OF THE SOLICITATION PROSPECTIVE BIDDERS WERE ADVISED AS FOLLOWS:

INCORPORATION OF FORMS: EACH OF THE FOLLOWING FORMS, RECEIPT OF WHICH IS ACKNOWLEDGED BY THE BIDDER, IS HEREBY INCORPORATED BY REFERENCE AND MADE A PART OF THIS INVITATION FOR BIDS. * * *

(B) GSA FORM 1424, SUPPLEMENTAL PROVISIONS, (SUPPLY CONTRACT), SEPTEMBER 1964 EDITION, WITH THE FOLLOWING MODIFICATIONS:

2. ARTICLE 27 OF GSA FORM 1424 IS INAPPLICABLE.

ARTICLE 27 OF GSA FORM 1424,"ALL OR NONE BIDS" (APPLICABLE TO INDEFINITE QUANTITY INVITATIONS ONLY), REFERRED TO ABOVE, PROVIDES THAT "A BID SUBMITTED ON AN -ALL OR NONE- TYPE OF BID BASIS (OR ANY OTHER BASIS ON WHICH AWARD OF ONE ITEM IS PREDICATED UPON AWARD OF ANOTHER) WILL NOT BE CONSIDERED, UNLESS THE BID IS LOW ON EACH ITEM TO WHICH THE -ALL OR NONE- BID IS MADE APPLICABLE.'

THE ABOVE-QUOTED GSPR 5-2.407-50 (B), 41 CFR 5-2.407-50 (B), WAS IMPLEMENTED IN GSPR 5A-2.201-73 WHICH READS IN PERTINENT PART AS FOLLOWS:

(A) THE FOLLOWING CLAUSE SHALL BE INCLUDED (1) IN INVITATIONS FOR BIDS FOR FEDERAL SUPPLY SCHEDULE CONTRACTS AND (2) IN ANY OTHER INVITATIONS UNDER WHICH BIDS WILL BE EVALUATED ON THE BASIS OF ESTIMATED QUANTITIES *

"ALL OR NONE" BIDS

ARTICLE 27 OF GSA FORM 1424 IS INAPPLICABLE AND THE FOLLOWING SUBSTITUTED:

"A BID SUBMITTED ON AN -ALL OR NONE- TYPE OF BID BASIS (OR ANY OTHER BASIS ON WHICH AWARD OF ONE ITEM IS PREDICATED UPON AWARD OF ANOTHER) WILL NOT BE CONSIDERED, UNLESS THE BID IS LOW ON EACH ITEM TO WHICH THE -ALL OR NONE- BID IS MADE APPLICABLE. FOR THE PURPOSE OF THIS PROVISION, IF THIS INVITATION FOR BIDS PROVIDES THAT ONE OR MORE GROUPS OF ITEMS WILL BE AWARDED IN THE AGGREGATE, EACH SUCH GROUP WILL BE CONSIDERED AN ITEM.'

ALTHOUGH THE FOREGOING CLAUSE WAS REQUIRED TO BE INCLUDED IN THE SOLICITATION, THE GENERAL COUNSEL ADVISES THAT IT WAS INADVERTENTLY OMITTED THROUGH CLERICAL OVERSIGHT. THE OPINION IS EXPRESSED, HOWEVER, THAT THE OMISSION OF THE "ALL OF NONE" CLAUSE FROM THE SOLICITATION CANNOT BE HELD TO INVALIDATE ITS EFFECT; THAT THE INCLUSION OF THE CLAUSE WAS REQUIRED BY GSPR 5A-2.201-73 WHICH WAS PUBLISHED IN THE FEDERAL REGISTER AND, THEREFORE, HAS THE FORCE AND EFFECT OF LAW. IT IS URGED THAT FOR THE FOREGOING REASON THE SOLICITATION SHOULD BE READ AS THOUGH THE CLAUSE HAD, IN FACT, BEEN INCLUDED, CITING G.L. CHRISTIAN AND ASSOCIATES V UNITED STATES, 160 CT. CL. 1, 312 F.2D 418.

RESPECTING THE STATEMENT OF THE ATTORNEY FOR BRISTOL THAT THE FAILURE TO INCLUDE THE REQUIRED CLAUSE MADE THE PROVISIONS OF SECTION GSPR 5-2.407-50 (B) INAPPLICABLE TO THE SOLICITATION, THE GENERAL COUNSEL ADVISES THAT ANY DEVIATION FROM A MANDATORY PROVISION OF THE REGULATIONS MUST BE AUTHORIZED IN ACCORDANCE WITH THE TERMS OF GSPR 5 1.108 AND THAT, IN THE ABSENCE OF ANY PROOF THAT A DEVIATION HAD BEEN SO AUTHORIZED, THE ABOVE STATEMENT IS WITHOUT MERIT, CITING THE CHRISTIAN CASE AT 320 F.2D 345, 353.

IN THE CHRISTIAN CASE, THE COURT OF CLAIMS DETERMINED THAT WHERE THE ARMED SERVICES PROCUREMENT REGULATION REQUIRES THAT A CONTRACT CONTAIN A TERMINATION FOR CONVENIENCE CLAUSE, THE CONTRACT WILL BE READ AS IF IT CONTAINED THAT CLAUSE EVEN THOUGH IT MAY NOT ACTUALLY BE INCLUDED THEREIN.

DESPITE THE STATEMENT IN THE CHRISTIAN CASE AT 320 F.2D 345, 351, THAT "IN THE PROCUREMENT FIELD AS IN OTHERS, AN AUTHORIZED REGULATION CAN IMPOSE SUCH PEREMPTORY REQUIREMENTS ON FEDERAL OFFICIALS AND THOSE WHO SEEK TO ENTER INTO TRANSACTIONS WITH THE GOVERNMENT," WE BELIEVE THAT THE COURT'S DECISION MUST OF NECESSITY BE LIMITED TO SITUATIONS WHEREIN MANDATORY CONTRACT PROVISIONS IMPOSED BY STATUTORY PROCUREMENT REGULATIONS ARE INCORPORATED BY OPERATION OF LAW IN OTHERWISE PROPERLY AWARDED GOVERNMENT CONTRACTS AS TO WHICH SUCH REGULATIONS CLEARLY APPLY. THE WRITTEN EXCLUSION OF A MANDATORY SOLICITATION PROVISION--- EVEN THOUGH INADVERTENT--- WAS ACTUAL NOTICE TO PROSPECTIVE CONTRACTORS THAT AN OTHERWISE APPLICABLE REGULATORY PROVISION WOULD BE EXCLUDED FROM THE EVALUATION OF BIDS. WE THEREFORE CAN AGREE THAT IT WAS REASONABLE FOR BRISTOL TO REGARD THE SPECIFIC DELETION OF THE "ALL OR NONE" RESTRICTIVE CLAUSE AS A CONSCIOUS DETERMINATION BY THE CONTRACTING OFFICER NOT TO IMPOSE "ALL OR NONE" RESTRICTIONS.

SINCE THE SOLICITATION WAS AN ADVERTISEMENT FOR THE FURNISHING OF INDEFINITE QUANTITIES, WE AGREE THAT IT SHOULD HAVE CONTAINED THE CLAUSE PROVIDED FOR BY GSPR 5A-2.201-73 (A). HOWEVER, THE SOLICITATION, IN THE CONTEXT OF THE EVALUATION OF "ALL OR NONE" BIDS, IS CLEARLY DISTINGUISHABLE FROM THE TRANSACTION CONSIDERED IN THE CHRISTIAN CASE. ADDITION TO WHAT WE SAID ABOVE, NO WRITTEN REFERENCE WAS MADE IN THE INVITATION FOR BIDS INVOLVED IN THE CHRISTIAN CASE AS TO THE INCLUSION OR EXCLUSION OF A TERMINATION FOR CONVENIENCE CLAUSE. IN OTHER WORDS, BIDDERS WERE COMPLETELY UNINFORMED IN THE INVITATION AS TO THEIR RIGHTS IN THE EVENT OF CONTRACT TERMINATION. IN THE PRESENT CASE, PROSPECTIVE BIDDERS WERE SPECIFICALLY ADVISED ON PAGE 5 OF THE SOLICITATION THAT "ARTICLE 27 OF GSA FORM 1424 IS INAPPLICABLE.'

WE BELIEVE THAT BY SPECIFICALLY EXCLUDING THE "ALL OR NONE" BID EVALUATION CLAUSE, THE CONTRACTING OFFICE COULD HAVE MISLED BRISTOL INTO BELIEVING THAT ITS "ALL OR NONE" BID DID NOT HAVE TO BE LOW ON EACH ITEM TO WHICH THE "ALL OR NONE" BID WAS MADE APPLICABLE.

WE DO NOT AGREE THAT IF BRISTOL WAS RELYING ON THE EXISTENCE OF AN AUTHORIZED DEVIATION, PURSUANT TO GSPR 5-1.108, FROM THE REQUIREMENTS OF EITHER GSPR 5-2.407-50 (B) OR GSPR 5A-2.201-73, THE BURDEN WAS ON BRISTOL, IN THE ABSENCE OF ANY STATEMENT TO THAT EFFECT, TO ASCERTAIN THE EXISTENCE OF ANY SUCH DEVIATION. WE DO NOT BELIEVE THAT BIDDERS HAVE ANY OBLIGATION TO TAKE AFFIRMATIVE ACTION TO DETERMINE THE EXISTENCE OR NONEXISTENCE OF DEVIATIONS IN INVITATION PROVISIONS ESPECIALLY WHERE A DEVIATION IS EXPRESSLY STATED IN THE INVITATION, AS HERE. A READING OF THE DEVIATION PROVISIONS BOTH IN FPR SEC. 1-1.009 AND GSPR 5-1.108 INDICATES CLEARLY THAT DEVIATIONS FROM THE FPR AND GSPR ARE ADMINISTRATIVE FUNCTIONS AND RESPONSIBILITIES WHICH ARE STRICTLY CONTROLLED BY THE PROCUREMENT ACTIVITY.

IN VIEW OF THE FOREGOING, WE CONCLUDE THAT THE SUBJECT SOLICITATION WAS DEFECTIVE SINCE IT DID NOT CONTAIN THE "ALL OR NONE" BID EVALUATION CLAUSE PRESCRIBED BY GSPR 5A-2.201-73. WE THINK THAT THE FAILURE TO COMPLY WITH GSPR CREATED AN AMBIGUITY CASTING SERIOUS DOUBT ON THE VALIDITY OF THE SOLICITATION AND THE RESULTING CONTRACTS. HOWEVER, SINCE THE RECORD INDICATES THAT THE THREE CONTRACTORS, WHICH WERE AWARDED THE ITEMS IN QUESTION, HAVE ALREADY DELIVERED SOME OF THE REQUIRED STEEL PUNCHES AND, IN ANTICIPATION OF THE RECEIPT OF FUTURE ORDERS, HAVE ALREADY MANUFACTURED A SUBSTANTIAL NUMBER OF STEEL PUNCHES, WE DO NOT FEEL THAT CANCELLATION OF THE CONTRACTS INVOLVED AT THIS TIME WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT.