B-164109, DEC. 6, 1968

B-164109, DEC. 6, 1968

TO MR. ALEXANDER BOSKOFF:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 23, 1968, AND TO SUBSEQUENT LETTERS AND CONFERENCES, CONCERNING THE PROTEST SUBMITTED ON BEHALF OF SHAYNE BROTHERS, INCORPORATED, WASHINGTON, D.C., AGAINST THE POSSIBLE AWARD OF A CONTRACT TO JOHNSON AND SPEAKE, INCORPORATED, GLEN BURNIE, MARYLAND, AS THE LOWEST AGGREGATE BIDDER ON THE MAJOR ITEMS OF INVITATION FOR BIDS NO. F 49642-68-B-1135, ISSUED MARCH 8, 1968, BY THE BASE PROCUREMENT OFFICE, ANDREWS AIR FORCE BASE, WASHINGTON, D.C. UNDER THE INVITATION PRICES FOR EACH YEAR OF A THREE YEAR PERIOD WERE REQUESTED FOR THE COLLECTION AND DISPOSAL OF REFUSE GENERATED AT THE ANDREWS AIR FORCE BASE AND AT FIVE OFF-BASE SITES.

IT WAS CONTEMPLATED BY THE AWARD PROVISIONS OF THE INVITATION FOR BIDS THAT ONE OR MORE CONTRACTS WOULD BE ENTERED INTO ON THE BASIS OF PRICES QUOTED FOR THE FIRST YEAR PERIOD BEGINNING ON JULY 1, 1968, AND THAT THE CONTRACT OR CONTRACTS WOULD BE SUBJECT TO RENEWAL FOR THE SUCCEEDING TWO YEARS ON THE BASIS OF PRICES QUOTED FOR THOSE YEARS BY THE SUCCESSFUL BIDDERS. ONE CONTRACT WAS TO BE AWARDED FOR MOST OF THE REQUIRED SERVICES BUT THE GOVERNMENT RESERVED THE RIGHT TO MAKE SEPARATE AWARDS FOR ADDITIVE ITEMS A, B, C, AND D UNDER BASE BID NO. 1, WHICH WAS TO REPRESENT A LUMP- SUM PRICE FOR COLLECTION OF REFUSE AT SPECIFIED LOCATIONS IN ACCORDANCE WITH THE COLLECTION SCHEDULE. THE REQUIREMENTS TO BE MET IN CONSIDERATION OF THE LUMP-SUM PRICE QUOTED AS BASE BID NO. 1 INCLUDED A REQUIREMENT FOR THE FURNISHING AND SERVICING OF TWENTY-TWO 8 CUBIC-YARD REFUSE CONTAINERS.

UNDER ITEM II OF THE BIDDING SCHEDULE, PRICES PER TON WERE TO BE QUOTED FOR THE DISPOSAL OF APPROXIMATELY 125 TONS OF REFUSE A WEEK IN A SANITARY FILL TO BE PROVIDED BY THE SUCCESSFUL BIDDER OR CONTRACTOR FOR THE MAJOR ITEMS OF THE INVITATION FOR BIDS. UNDER ITEM III, UNIT PRICES WERE TO BE QUOTED FOR THE STATED PURPOSE OF EITHER ADDING TO OR SUBTRACTING FROM THE LUMP-SUM PRICE OF BASE BID NO. 1 EITHER BEFORE OR AFTER THE CONTRACT AWARD. UNDER ITEM IV, PRICES WERE REQUESTED FOR THE FURNISHING, INSTALLATION AND SERVICING OF REFUSE COMPACTOR UNITS AT FOUR BUILDINGS FOR THE STATED PURPOSE OF ADDING TO BASE BID NO. 1 EITHER BEFORE OR AFTER THE CONTRACT AWARD AT THE GOVERNMENT'S OPTION. IT WAS INDICATED IN THE DESCRIPTION OF ITEM IV THAT THE FURNISHING, INSTALLATION AND SERVICING OF THE REFUSE COMPACTOR UNITS WOULD BE "IN LIEU OF" THE FURNISHING AND SERVICING AT VARIOUS TIMES OF SEVEN 8 CUBIC-YARD REFUSE CONTAINERS AT THE FOUR BUILDINGS. SUCH EQUIPMENT AND SERVICES OTHERWISE WOULD HAVE BEEN REQUIRED AS A PART OF THE SUCCESSFUL BIDDER'S UNDERTAKING WITH RESPECT TO BASE BID NO. 1.

THE AWARD PROVISIONS OF THE INVITATION FOR BIDS INCLUDED THE STATEMENTS THAT THE BASE BID MIGHT BE DECREASED OR INCREASED BY THE "UNIT PRICE ITEM (1) THRU (6) PARAGRAPH III ABOVE AS PREVIOUSLY INDICATED"; AND THAT "PARAGRAPH IV WILL BE IMPLEMENTED AT THE OPTION OF THE GOVERNMENT AS PREVIOUSLY NOTED". THE SIXTH ITEM AND SUBITEM OF ITEM III REQUIRED THE INSERTION OF UNIT PRICES CONCERNING THE FURNISHING AND SERVICING OF 8 CUBIC-YARD REFUSE CONTAINERS DURING THE FIRST, SECOND AND THIRD YEARS, AND FOR ONE ADDITIONAL PICK-UP PER WEEK.

FOUR BIDS WERE RECEIVED AND OPENED, AS SCHEDULED, ON APRIL 8, 1968. ONE BID WAS CONSIDERED TO BE NONRESPONSIVE AND THE BASE PROCUREMENT OFFICE PROPOSED TO MAKE AN AWARD TO TIGER TRASH, INCORPORATED, FOR REFUSE COLLECTIONS AS REQUIRED UNDER BASE BID NO. 1 ADDITIVE ITEMS B, C AND D. THE REMAINING TWO BIDS COVERING THE OTHER ITEMS WERE SUBMITTED BY SHAYNE BROTHERS, INCORPORATED, AND JOHNSON AND SPEAKE, INCORPORATED. THE BASE PROCUREMENT OFFICE PROPOSED, AFTER CONSIDERATION OF THE PROTEST OF SHAYNE BROTHERS, INCORPORATED, TO MAKE AN AWARD TO JOHNSON AND SPEAKE, INCORPORATED, AS THE LOWEST AGGREGATE BIDDER UNDER BASE BID NO. 1, ADDITIVE ITEM A, ITEM II AND ITEM IV. ON THE BASIS THAT THE ITEM IV OPTION WOULD BE EXERCISED, THE TWO BIDS COVERING THESE PARTICULAR SERVICES WERE EVALUATED AS FOLLOWS:

JOHNSON AND SPEAKE, INC. SHAYNE BROS., INC.

BASE BID NO. 1 $ 66,000.00 $101,904.00

ADDITIVE ITEM A 997.00 468.00

ITEM II 39,650.00 16,250.00

ITEM IV13,332.00 13,572.00

GROSS BID PRICE $119,979.00 $132,194.00

ITEM III CREDIT 15,360.00 18,042.00

NET BID PRICE $104,619.00 $114,152.00

THE ITEM III CREDITS WERE ARRIVED AT ON THE BASIS OF THE ELIMINATION FROM THE REQUIREMENTS OF BASE BID NO. 1 OF THE FURNISHING AND SERVICING OF SEVEN 8 CUBIC-YARD REFUSE CONTAINERS AT THE FOUR BUILDINGS LISTED IN ITEM IV, AND DETERMINING THE VALUE OF THE ELIMINATED SERVICES IN ACCORDANCE WITH THE UNIT PRICES SET FORTH UNDER THE SIXTH ITEM AND SUBITEM OF ITEM III.

IN A LETTER DATED APRIL 12, 1968, TO THE BASE PROCUREMENT OFFICE, SHAYNE BROTHERS, INCORPORATED, STATED THAT IT HAD READ ITEM IV IN CONJUNCTION WITH ITEM III AND THAT ITS BID WAS THEREFORE COMPUTED ON THE BASIS THAT AN ITEM III CREDIT WOULD BE AVAILABLE TO THE GOVERNMENT FOR SERVICES ELIMINATED THROUGH THE EXERCISE OF THE ITEM IV OPTION. HOWEVER, THE BASE PROCUREMENT OFFICE WAS ADVISED BY SHAYNE BROTHERS, INCORPORATED, THAT IT WAS ITS UNDERSTANDING THAT JOHNSON AND SPEAKE, INCORPORATED, HAD SUBMITTED A BID ON ITEM IV AS REPRESENTING "ADDITIONAL AMOUNTS TO BE PAID BY THE GOVERNMENT WITHOUT CREDITS OF ANY KIND FOR THE SERVICES ELIMINATED FROM THE BASIC BID PROVISIONS".

YOU REQUESTED THAT WE CONSIDER THE LETTER OF APRIL 12, 1968, AS A PROTEST AGAINST THE MAKING OF A CONTRACT AWARD TO JOHNSON AND SPEAKE, INCORPORATED. A DOCUMENTED ADMINISTRATIVE REPORT ON THE PROTEST WAS SUBMITTED BY THE DEPARTMENT OF THE AIR FORCE BY LETTER DATED MAY 14, 1968, AND YOU WERE FURNISHED COPIES OF THE LETTER AND CERTAIN OF ITS ENCLOSURES, IN ACCORDANCE WITH YOUR REQUEST. THE DEPARTMENT RECOMMENDED THAT THE PROTEST BE DENIED AND WE WERE ADVISED THAT IT WAS FOUND TO BE IN THE BEST INTEREST OF THE GOVERNMENT AND FAIRNESS TO THE OTHER BIDDERS TO PROCEED WITH THE AWARDS OF CONTRACTS TO JOHNSON AND SPEAKE, INCORPORATED, AND TIGER TRASH, INCORPORATED, BEFORE A DECISION ON THE PROTEST OF SHAYNE BROTHERS, INCORPORATED, WAS RENDERED BY OUR OFFICE.

THE DEPARTMENT OF THE AIR FORCE CONSIDERED THAT, ALTHOUGH THE PROVISIONS OF THE INVITATION FOR BIDS COULD HAVE BEEN MORE SPECIFIC AND CLEAR, THE INVITATION EXPRESSED ADEQUATELY THE METHOD OF EVALUATION OF BIDS AND IT WAS NOT MISLEADING OR AMBIGUOUS. THE DEPARTMENT EXPRESSED THE OPINION THAT THE INVITATION CLEARLY INDICATED THAT AN ITEM III CREDIT WOULD BE AVAILABLE TO THE GOVERNMENT IF IT ELECTED TO OBTAIN THE ITEM IV REFUSE HANDLING AND COLLECTION SERVICES IN LIEU OF THE FURNISHING AND SERVICING OF SEVEN 8 CUBIC-YARD REFUSE CONTAINERS AT FOUR OF THE ANDREWS AIR FORCE BASE BUILDINGS. THE DEPARTMENTAL LETTER OF MAY 14, 1968, STATES IN PART THAT THE CONTRACTING OFFICER AGREES THAT SHAYNE BROTHERS, INCORPORATED, CORRECTLY COMPUTED ITS BID; THAT THERE IS, IN THE DEPARTMENT'S VIEW, NO FACTUAL SUPPORT FOR THAT COMPANY'S ALLEGED UNDERSTANDING OF THE BID SUBMITTED BY JOHNSON AND SPEAKE, INCORPORATED; THAT BOTH BIDDERS BID ON THE SAME BASIS WITHOUT QUALIFICATIONS; AND THAT NO BIDDER REQUESTED ANY CLARIFICATION AT ANY TIME.

IT APPEARS THAT THE CONTRACT AWARD NOTICES WERE PREPARED ON MAY 14, 1968, BUT THAT THE NOTICE TO JOHNSON AND SPEAKE, INCORPORATED, WAS GIVEN TO A REPRESENTATIVE OF THAT COMPANY ON MAY 16, 1968, DURING A MEETING AT THE ANDREWS AIR FORCE BASE. IT ALSO APPEARS THAT YOU HAD ATTEMPTED ON THAT DATE, AFTER VISITING OUR OFFICE, TO CONVINCE THE PROCUREMENT OFFICIALS AND THE DEPARTMENT OF THE AIR FORCE THAT NO AWARD SHOULD BE MADE TO JOHNSON AND SPEAKE, INCORPORATED, BEFORE WE HAD RENDERED A DECISION ON THE PROTEST OF YOUR CLIENT.

DURING A CONFERENCE ON MAY 20, 1968, YOU SUBMITTED AN UNDATED LETTER, CONTENDING THAT THE DEPARTMENTAL RECOMMENDATION FOR DENIAL OF THE PROTEST IS NOT SUPPORTED BY THE DEPARTMENT'S OWN BASIC RECORD. AS THE BASIS FOR SUCH CONTENTION, YOU REFERRED TO THE "JUDGE ADVOCATE COMMENT" ON AFPI FORM 59, WHICH FORM WAS USED BY THE BASE PROCUREMENT OFFICE IN REQUESTING THE ACTING STAFF JUDGE ADVOCATE'S REVIEW OF THE PROTEST. THE FORM WAS SIGNED BY CAPTAIN VICTOR H. NEGRON, ACTING STAFF JUDGE ADVOCATE, ON MAY 1, 1968, AND THE JUDGE ADVOCATE COMMENT INCLUDED A STATEMENT TO THE EFFECT THAT, IN CAPTAIN NEGRON'S OPINION, THE PRICES FOR ITEM IV WERE TO REPRESENT NET PRICES NOT SUBJECT TO ANY ITEM III CREDIT FOR REPLACED SERVICES. THE JUDGE ADVOCATE COMMENT ALSO INCLUDED STATEMENT TO THE EFFECT THAT, FROM INFORMATION FURNISHED BY THE BIDDERS THEMSELVES, THERE APPEARED TO BE NO MISUNDERSTANDING ON THE PART OF JOHNSON AND SPEAKE, INCORPORATED, OR ANY BIDDER OTHER THAN SHAYNE BROTHERS, INCORPORATED, THAT THE GOVERNMENT WOULD BE ENTITLED TO AN ITEM III CREDIT IN CONJUNCTION WITH THE EXERCISE OF THE ITEM IV OPTION.

YOU SUGGESTED THAT THE JUDGE ADVOCATE COMMENT ON AFPI FORM 59 CLEARLY INDICATED THAT ANDREWS AIR FORCE BASE AND JOHNSON AND SPEAKE, INCORPORATED, CONSIDERED AT ALL TIMES PRIOR TO MAY 1, 1968, THAT THE ITEM IV PRICES WERE TO REPRESENT NET PRICES FOR THE FURNISHING OF THE ITEM IV SERVICES. HOWEVER, CAPTAIN NEGRON'S APPARENT UNDERSTANDING REGARDING ANY SUCH PROPOSITION IS NOT, YOU SAY, SUPPORTED BY THE RECORD WHICH WAS SUBMITTED TO HIM BY THE BASE PROCUREMENT OFFICE. THE RECORD OF THE CASE, AS OF MAY 1, 1968, CLEARLY INDICATED THAT THE PROCUREMENT OFFICIALS OF THE ANDREWS AIR FORCE BASE HAD INTERPRETED THE PROVISIONS OF THE INVITATION FOR BIDS AS MEANING THAT AN ITEM III CREDIT WOULD BE AVAILABLE FOR WORK REPLACED AS THE RESULT OF AN EXERCISE OF THE ITEM IV OPTION, AND IN THE CONTRACTING OFFICER'S STATEMENT OF FACTS AND FINDINGS RELATED TO THE PROTEST IT WAS STATED THAT "THE LOW BIDDER ALSO RECOGNIZES THIS FACT RELATIVE TO ITEM IV AND UNDERSTANDS THAT A CREDIT WILL BE REALIZED".

NEVERTHELESS, A COPY OF YOUR LETTER SUBMITTED ON MAY 20, 1968, WAS TRANSMITTED TO THE DEPARTMENT OF THE AIR FORCE AND A REPORT THEREON WAS FURNISHED BY LETTER DATED JUNE 3, 1968, INDICATING CONCURRENCE WITH THE VIEWS EXPRESSED IN A REPORT DATED MAY 28, 1968, FROM THE BASE PROCUREMENT OFFICER, WHICH WAS ACCOMPANIED BY LETTERS DATED MAY 7 AND MAY 28, 1968, FROM JOHNSON AND SPEAKE, INCORPORATED, AND A MEMORANDUM OF MAY 28, 1968, FROM CAPTAIN NEGRON.

CAPTAIN NEGRON'S MEMORANDUM PURPORTS TO SHOW THAT THE STATEMENTS MADE ON THE AFPI FORM 59, WHICH CONCERNED THE QUESTION WHETHER BIDDERS OTHER THAN SHAYNE BROTHERS, INCORPORATED, AND POSSIBLY THE BASE PROCUREMENT OFFICE, HAD INTERPRETED THE INVITATION FOR BIDS TO MEAN THAT ITEM IV CALLED FOR THE QUOTATION OF NET PRICES, WERE BASED ENTIRELY ON THE INFORMATION CONTAINED IN THE RECORD OF THE CASE. AS ABOVE INDICATED, IT APPEARS THAT CAPTAIN NEGRON WAS MISTAKEN IN ASSUMING THAT THE OTHER BIDDERS HAD INTENDED TO SUBMIT ITEM IV PRICES WHICH WOULD NOT BE SUBJECT TO ITEM III CREDITS FOR SERVICES REPLACED IN THE EVENT THAT THE ITEM IV OPTION WAS EXERCISED. IN THAT CONNECTION, HIS MEMORANDUM SPECIFICALLY REFERS TO THAT PART OF THE CONTRACTING OFFICER'S STATEMENT OF FACTS AND FINDINGS WHICH INDICATED THAT THE LOW BIDDER UNDERSTOOD THAT THE EXERCISE OF THE ITEM IV OPTION WOULD INVOLVE AN ITEM III CREDIT.

THE BASE PROCUREMENT OFFICER'S REPORT INDICATED THAT, IN HIS OPINION, THERE IS NO BASIS FOR ANY CONCLUSION THAT THERE WAS A DISPUTE BETWEEN THE ANDREWS AIR FORCE BASE AND JOHNSON AND SPEAKE, INCORPORATED, OR THAT BOTH PARTIES UNDERSTOOD THAT THE PROVISIONS OF THE INVITATION FOR BIDS DID NOT REQUIRE AN ITEM III CREDIT FOR ELIMINATED SERVICES IF THE ITEM IV OPTION WAS EXERCISED. THE BASE PROCUREMENT OFFICER ALSO FURNISHED AN EXPLANATION AS TO WHY IT WAS FOUND NECESSARY TO MAKE A CONTRACT AWARD TO JOHNSON AND SPEAKE, INCORPORATED, BEFORE A DECISION ON THE PROTEST OF YOUR CLIENT WAS RENDERED BY OUR OFFICE.

THE LETTER OF MAY 7, 1968, FROM JOHNSON AND SPEAKE, INCORPORATED, WAS MARKED FOR THE ATTENTION OF MR. GEORGE U. NICHOLSON, CONTRACT SPECIALIST, AND IT REFERRED TO A CONVERSATION OF THAT DATE. THE LETTER STATES THAT "WE ACCEPT" WHAT WERE DESCRIBED AS PRICES FOR BASE BID NO. 1, ADDITIVE ITEM A, ITEMS II AND IV, LESS AN ITEM III CREDIT OF $15,360, WITH THE NET TOTAL PRICE BEING SHOWN AS $104,619. IN THE COMPANY'S LETTER OF MAY 28, 1968, IT WAS CERTIFIED THAT, AT THE TIME OF SUBMITTING A BID, IT WAS THE COMPANY'S UNDERSTANDING THAT, IF THE OPTION OF ITEM IV WAS EXERCISED, APPROPRIATE CREDITS WOULD HAVE TO BE GIVEN TO THE GOVERNMENT AGAINST THE BID PRICES AS COMPUTED THROUGH THE USE OF THE UNIT PRICES QUOTED IN ITEM III. AFTER YOU HAD EXAMINED THE DEPARTMENTAL LETTER OF JUNE 3, 1968, AND ITS ENCLOSURES, YOU REQUESTED THAT WE OBTAIN A STATEMENT FROM MR. NICHOLSON AS TO WHAT OCCURRED BETWEEN MAY 1, 1968, AND MAY 7, 1968, WHEN JOHNSON AND SPEAKE, INCORPORATED, STATED THAT "WE ACCEPT" THE LISTED PRICES AND THE ITEM III CREDIT OF $15,360.

WE REQUESTED THAT A STATEMENT FROM MR. NICHOLSON BE FURNISHED, TOGETHER WITH INFORMATION AS TO WHETHER THE ANDREWS AIR FORCE BASE INTENDED TO EXERCISE THE ITEM IV OPTION IF SUCH ACTION WOULD HAVE RESULTED IN INCREASED COSTS TO THE GOVERNMENT. WE RECEIVED FROM THE DEPARTMENT OF THE AIR FORCE A STATEMENT FROM MR. NICHOLSON AND A MEMORANDUM OF JUNE 24, 1968, FROM THE ANDREWS AIR FORCE BASE, INDICATING THAT THE DECISION TO EXERCISE THE ITEM IV OPTION AT THE TIME OF AWARD WAS BASED SOLELY ON THE FACT THAT THIS WOULD RESULT IN LOWER COSTS THAN IF AN AWARD WAS MADE WITHOUT EXERCISING THE OPTION.

MR. NICHOLSON'S STATEMENT IN THE MATTER INDICATES THAT ON MAY 3, 1968, HE RECEIVED A TELEPHONE CALL FROM MR. JOHNSON OF JOHNSON AND SPEAKE, INCORPORATED, CONCERNING THE STATUS OF THE CASE. HE STATES MR. JOHNSON WAS ADVISED THAT THERE WAS A PROTEST IN REGARD TO THE ITEM IV OPTION, HAVING REFERENCE TO A CREDIT BEING OFFERED TO THE GOVERNMENT; THAT MR. JOHNSON THEN REMARKED THAT, IF THE OPTION WAS EXERCISED, A CREDIT WOULD HAVE TO BE RECOGNIZED, AS OPTION IV WOULD ELIMINATE A CERTAIN SIZE, QUANTITY AND NUMBER OF PICKUPS, AND THIS CREDIT WOULD BE COMPUTED IN ACCORDANCE WITH ITEM III OF THE BID; THAT MR. JOHNSON OFFERED TO SUBMIT A LETTER SHOWING THE DIFFERENCE IN HIS TOTAL BID PRICE AS THIS WAS OBVIOUS TO HIM AT THE TIME OF SUBMITTING A BID; AND THAT MR. NICHOLSON SUGGESTED TO MR. JOHNSON THAT A LETTER BE FORWARDED TO THE CONTRACTING OFFICER IF MR. JOHNSON DESIRED TO SUBMIT A LETTER RELATIVE TO THE MATTER.

IN VIEW OF MR. NICHOLSON'S STATEMENT, THE USE OF THE WORDS "WE ACCEPT" IN THE BIDDER'S LETTER OF MAY 7, 1968, DOES NOT APPEAR TO US IN ANY MANNER TO INDICATE THAT THERE HAD BEEN A DISPUTE BETWEEN THE ANDREWS AIR FORCE BASE AND THE BIDDER CONCERNING THE QUESTION WHETHER AN ITEM III CREDIT WOULD BE AVAILABLE TO THE GOVERNMENT IF THE ITEM IV OPTION WAS EXERCISED, OR THAT JOHNSON AND SPEAKE HAD ORIGINALLY INTERPRETED THE INVITATION FOR BIDS TO MEAN THAT THE ITEM IV PRICES WERE TO BE NET PRICES WHICH WOULD NOT INVOLVE AN ITEM III CREDIT FOR THE SERVICES REPLACED.

YOU CONTENDED IN A LETTER DATED JULY 1, 1968, THAT MR. NICHOLSON'S STATEMENT REGARDING THE DISCUSSION OF MAY 3, 1968, WITH MR. JOHNSON, DOES NOT APPEAR IN SOME RESPECTS TO BE CONSISTENT WITH THE PREVIOUS RECORD OF THE CASE, INDICATING THAT ON OR BEFORE APRIL 30, 1968, EITHER MR. NICHOLSON OR THE CONTRACTING OFFICER HAD BEEN ADVISED BY A REPRESENTATIVE OF JOHNSON AND SPEAKE, INCORPORATED, WITH RESPECT TO THAT COMPANY'S UNDERSTANDING OF THE INVITATION FOR BIDS. IT SHOULD BE NOTED THAT YOUR INQUIRY WAS LIMITED TO THE PERIOD MAY 1 TO MAY 7, 1968. HOWEVER, ASSUMING THAT SUCH ADVICE WAS FURNISHED TO THE CONTRACTING OFFICER, THERE WOULD BE NO POINT IN CONSIDERING THAT A RESTATEMENT OF THE PROBLEM BY MR. NICHOLSON ON MAY 3 WAS EITHER UNUSUAL OR SUPERFLUOUS, AND, EVEN IF THE MATTER HAD BEEN DISCUSSED PREVIOUSLY BY MR. NICHOLSON WITH MR. JOHNSON, WE WOULD HAVE NO BASIS FOR ASSUMING THAT THE SUBSTANCE OF THE MAY 3, 1968, TELEPHONE CONVERSATION WAS NOT CORRECTLY REPORTED BY MR. NICHOLSON, OR THAT ANY PRIOR CONVERSATIONS WERE NOT TO THE SAME EFFECT. YOU HAVE ALSO REFERRED TO THE FACT THAT MR. NICHOLSON DENIED THAT HE DISCUSSED THE CASE WITH MR. JOHNSON ON MAY 7, 1968, ALTHOUGH THAT IS THE DATE OF THE CONVERSATION REFERRED TO IN THE LETTER FROM JOHNSON AND SPEAKE, INCORPORATED, WHICH WAS SIGNED BY MR. JOHN M. SPEAKE, JR. IN OUR OPINION, EITHER THE APPARENT DISCREPANCY IN THE DATES CONCERNING THE INDICATED TELEPHONE CONVERSATION OR THE POSSIBILITY THAT A REPRESENTATIVE OF THE COMPANY MIGHT HAVE DISCUSSED THE CASE WITH MR. NICHOLSON OR ANY OTHER OFFICIAL AT THE ANDREWS AIR FORCE BASE ON MAY 7, 1968, BEFORE THE LETTER WAS PREPARED, WOULD NOT BE SIGNIFICANT IN DETERMINING THE MERITS OF THE PROTEST OF YOUR CLIENT.

NO EVIDENCE HAS BEEN SUBMITTED BY OR ON BEHALF OF YOUR CLIENT IN SUPPORT OF YOUR CLIENT'S ALLEGED UNDERSTANDING OF THE BID SUBMITTED BY JOHNSON AND SPEAKE, INCORPORATED, AND FROM A REVIEW OF THE ENTIRE RECORD OF THE CASE WE FIND NO BASIS FOR CONCLUDING THAT JOHNSON AND SPEAKE, INCORPORATED, INTENDED ITS ITEM IV PRICES AS REPRESENTING ADDITIONAL AMOUNTS TO BE PAID BY THE GOVERNMENT WITHOUT CREDITS OF ANY KIND FOR THE SERVICES WHICH WOULD BE ELIMINATED FROM THE BASIC BID PROVISIONS IF THE ITEM IV OPTION WAS EXERCISED.

IT IS POSSIBLE THAT THE INVITATION FOR BIDS COULD HAVE BEEN MORE DEFINITE IN SHOWING THAT AN ITEM III CREDIT WOULD BE APPLIED FOR WORK ELIMINATED THROUGH THE EXERCISE OF THE ITEM IV OPTION. HOWEVER, NOTWITHSTANDING THE OPINION EXPRESSED IN THE JUDGE ADVOCATE COMMENT ON AFPI FORM 59, WE BELIEVE THAT THIS WAS FAIRLY EVIDENT FROM THE PROVISIONS OF BASE BID NO. 1 AND ITEM III, AND THE AWARD PROVISIONS OF THE INVITATION FOR BIDS. THOSE PROVISIONS REASONABLY REQUIRE A CONCLUSION THAT, REGARDLESS OF THE CIRCUMSTANCES UNDER WHICH ANY PART OF THE SERVICES CALLED FOR UNDER BASE BID NO. 1 WOULD BE ELIMINATED, THE INTENTION OF THE INVITATION FOR BIDS WAS TO INSURE THAT THE GOVERNMENT WOULD BE ENTITLED TO A CREDIT FOR THE ELIMINATED SERVICES, COMPUTED AT THE PRICES SET FORTH IN ITEM III.

IN ANY EVENT, IT APPEARS THAT YOUR CLIENT INTERPRETED THE PROVISIONS OF THE INVITATION FOR BIDS IN THAT MANNER AND A COMPARISON OF ITS TOTAL ITEM IV BID PRICE OF $13,572 WITH THE TOTAL ITEM IV BID PRICE OF $13,332, SUBMITTED BY JOHNSON AND SPEAKE, INCORPORATED, APPEARS REASONABLY TO SUGGEST THAT THE OTHER BIDDER ALSO INTERPRETED THE INVITATION FOR BIDS AS REQUIRING AN ITEM III CREDIT FOR WORK WHICH WOULD BE ELIMINATED FROM THE REQUIREMENTS OF BASE BID NO. 1 THROUGH THE EXERCISE OF THE ITEM IV OPTION. YOU HAVE ALLEGED, IN EFFECT, THAT YOUR CLIENT WAS IN A BETTER POSITION TO FURNISH THE ITEM IV SERVICES AT REASONABLE COST TO THE GOVERNMENT BUT THIS WOULD HARDLY ACCOUNT FOR ANY CONTENTION THAT JOHNSON AND SPEAKE, INCORPORATED, DID NOT INTEND TO ALLOW AN ITEM III CREDIT OF OVER $15,000 IN THE EVENT THE ITEM IV OPTION WAS EXERCISED BY THE GOVERNMENT.

THE BASE PROCUREMENT OFFICER PREVIOUSLY REPORTED THAT THE REFUSE COMPACTION SERVICE AS DESCRIBED IN ITEM IV "WAS HIGHLY DESIRABLE". HOWEVER, IT IS APPARENT FROM THE MEMORANDUM OF JUNE 24, 1968, THAT THE ANDREWS AIR FORCE BASE DID NOT DETERMINE THAT AN EXERCISE OF THE ITEM IV OPTION WAS ESSENTIAL TO MEET THE GOVERNMENT'S ACTUAL REQUIREMENTS. THUS, IT APPEARS THAT, EVEN IF IT COULD HAVE BEEN ESTABLISHED THAT JOHNSON AND SPEAKE, INCORPORATED, INTENDED TO QUOTE NET PRICES UNDER THE OPTIONAL ITEM IV WHICH WOULD REFLECT ANY DIFFERENCE IN COST BETWEEN THE REFUSE COMPACTION SERVICE AND THE HANDLING OF 8 CUBIC-YARD REFUSE CONTAINERS AT THE FOUR BUILDINGS LISTED UNDER THE OPTIONAL ITEM IV, THE ANDREWS AIR FORCE BASE WOULD NOT HAVE BEEN JUSTIFIED IN REJECTING THE BID OF THAT COMPANY. ITS PRICES UNDER BASE BID NO. 1, ADDITIVE ITEM A, AND ITEM II TOTAL THE SUM OF $106,647, WHICH TOTAL PRICE IS LOWER THAN ANY COMBINATION OF THE PRICES SUBMITTED BY SHAYNE BROTHERS, INCORPORATED, FOR THE SAME WORK, ASSUMING IN CONNECTION WITH THE PRICES QUOTED UNDER ITEM IV THAT SHAYNE BROTHERS, INCORPORATED, INTENDED, AS HAS BEEN ALLEGED, TO ALLOW AN ITEM III CREDIT IN CONJUNCTION WITH ITS ITEM IV PRICES.

A DECISION ON THIS CASE HAS BEEN WITHHELD FROM TIME TO TIME AS THE RESULT OF SEVERAL CONFERENCES WITH YOU AND THE CONCLUSION AS ABOVE SET FORTH WERE INCORPORATED IN A DRAFT OF DECISION PRIOR TO THE RECEIPT OF YOUR LETTER DATED OCTOBER 10, 1968, WHEREIN YOU DISCUSS THE THREE FACTS WHICH YOU BELIEVE TO BE THE "MOST OBVIOUS" FOR CONSIDERATION IN DETERMINING THE MERITS OF THE PROTEST SUBMITTED ON BEHALF OF SHAYNE BROTHERS, INCORPORATED. YOU STATED: (1) THAT THE PROVISIONS OF THE INVITATION CONTAINED A MATERIAL AMBIGUITY WHICH CLEARLY AFFECTED PRICES TO BE BID BY COMPETING BIDDERS; (20 THAT THE PROCUREMENT PROCEDURES FOLLOWED SUBSEQUENT TO THE OPENING OF BIDS WERE ARBITRARY AND HAPHAZARD; AND (3) THAT THE SERVICE REQUIREMENTS OF THE SPECIFICATIONS WERE SO POORLY DRAWN THAT THE ANDREWS AIR FORCE BASE PERMITTED SUBSTITUTIONS OF EQUIPMENT AT A CONSIDERABLE SAVING IN COST TO THE CONTRACTOR AND AT AN INCREASED PRICE TO THE GOVERNMENT.

WE DO NOT AGREE THAT THE INVITATION CONTAINED A MATERIAL AMBIGUITY. OUR OPINION, THE INVITATION, WHEN CONSIDERED AS A WHOLE, CLEARLY EVIDENCED A PURPOSE OF REQUIRING AN ITEM III CREDIT IN CONNECTION WITH THE REPLACEMENT OF ANY OF THE REQUIRED SERVICES TO BE PERFORMED FOR THE LUMP- SUM PRICE QUOTED AS BASE BID NO. 1, INCLUDING THE REPLACEMENTS WHICH WOULD BE INVOLVED IF THE GOVERNMENT EXERCISED THE ITEM IV OPTION. WITH RESPECT TO YOUR CONTENTION THAT BIDDERS WERE NOT AFFORDED AN OPPORTUNITY TO COMPETE ON A COMMON OR EQUAL BASIS, THE AVAILABLE EVIDENCE IN THE CASE STRONGLY SUGGESTS THAT YOUR CLIENT AND JOHNSON AND SPEAKE, INCORPORATED, INTERPRETED THE PROVISIONS OF THE INVITATION IN THE SAME MANNER AND WE ARE ADVISED THAT TIGER TRASH, INCORPORATED, THE ONLY OTHER RESPONSIVE BIDDER, SIMILARLY INTERPRETED THE INVITATION AS REQUIRING AN ITEM III CREDIT FOR SERVICES REPLACED AS THE RESULT OF AN EXERCISE OF THE ITEM IV OPTION. THERE DOES NOT APPEAR TO BE ANY SUBSTANTIAL BASIS FOR CONSIDERING THAT THE INVITATION DID NOT PROVIDE THE NECESSARY ELEMENTS TO INSURE THAT ALL INTERESTED CONCERNS WOULD HAVE AN OPPORTUNITY TO COMPETE ON A COMMON OR EQUAL BASIS.

NEITHER DO WE AGREE THAT THE PROCEDURES FOLLOWED IN THIS CASE WERE ARBITRARY OR HAPHAZARD, ALTHOUGH WE RECOGNIZE THAT THERE COULD BE A DIFFERENCE OF OPINION WITH RESPECT TO THE MANNER AND TIME IN WHICH THERE WAS OBTAINED FROM JOHNSON AND SPEAKE, INCORPORATED, A WRITTEN CONFIRMATION OF ITS UNDERSTANDING OF THE TERMS AND CONDITIONS OF THE INVITATION SO FAR AS CONCERNS THE QUESTION WHICH WAS RAISED ON BEHALF OF YOUR CLIENT IN PROTESTING THE MAKING OF A CONTRACT AWARD TO JOHNSON AND SPEAKE, INCORPORATED, AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. CONTRARY TO WHAT IS SAID IN YOUR LETTER REGARDING THE SUCCESSFUL BIDDER'S LETTER DATED MAY 7, 1968, IT IS REASONABLY CLEAR THAT THE LETTER DOES NOT DEMONSTRATE RECOGNITION BY ANDREWS AIR FORCE BASE OF AN AMBIGUITY AGAINST WHICH IT SOUGHT PROTECTION. THE LETTER DEMONSTRATES ONLY, WHEN CONSIDERED WITH THE STATEMENT OF MR. NICHOLSON CONCERNING A TELEPHONE CONVERSATION ON MAY 3, 1968, THAT JOHNSON AND SPEAKE, INCORPORATED, WISHED TO CONFIRM ITS UNDERSTANDING OF THE PROVISIONS OF THE INVITATION WHEN IT SUBMITTED A BID.

YOU STATE THAT JOHNSON AND SPEAKE, INCORPORATED, ACHIEVED CAPITAL SAVINGS OF APPROXIMATELY $25,000 BY PERMITTED SUBSTITUTIONS OF SMALLER AND LESS COSTLY EQUIPMENT FOR ITEMS SPECIFIED IN THE INVITATION, AND THAT YOU ARE RELIABLY INFORMED THAT JOHNSON AND SPEAKE, INCORPORATED, WAS GRANTED A CONTRACT PRICE INCREASE BETWEEN $10,000 AND $15,000. WE NEVERTHELESS FIND NOTHING IN THE RECORD BEFORE US TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS OR REQUIREMENTS OF THE INVITATION WERE NOT APPROPRIATE.

IT WOULD APPEAR THAT THE QUESTION WHETHER THERE WERE ANY PERMITTED SUBSTITUTIONS OF EQUIPMENT AND THE QUESTION WHETHER THE CONTRACT PRICE WAS INCREASED SHOULD BE CONSIDERED AS MATTERS INVOLVING THE ADMINISTRATION OF THE CONTRACT, RATHER THAN AS AFFECTING IN ANY MANNER THE QUESTION WHETHER THE ANDREWS AIR FORCE BASE WAS JUSTIFIED IN AWARDING THE CONTRACT TO JOHNSON AND SPEAKE, INCORPORATED, AFTER HAVING OBTAINED FROM THE BALTIMORE, MARYLAND, DISTRICT OFFICE OF DEFENSE CONTRACT ADMINISTRATIVE SERVICES, AN AGENCY OF THE DEPARTMENT OF DEFENSE, A FAVORABLE PREAWARD SURVEY REPORT IN REGARD TO ITS INVESTIGATION OF THAT COMPANY'S ABILITY TO PERFORM THE PROPOSED CONTRACT IN A SATISFACTORY MANNER. HOWEVER, WE ARE LOOKING INTO THE QUESTION WHETHER ANY PERMITTED SUBSTITUTIONS OF EQUIPMENT OR THE GRANTING OF A CONTRACT PRICE INCREASE WERE REASONABLE AND PROPER IN THE PARTICULAR CIRCUMSTANCES.

IN VIEW OF THE FOREGOING, WE FIND NO LEGAL BASIS FOR TAKING EXCEPTION TO THE CONTRACT WHICH WAS AWARDED TO JOHNSON AND SPEAKE, INCORPORATED, AND THE PROTEST MADE ON BEHALF OF YOUR CLIENT IS HEREBY DENIED.