B-142598, MAY 27, 1960

B-142598, MAY 27, 1960

TO H. BERNSTEIN AND CO.:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 12, 1960, PROTESTING THE AWARD OF A CONTRACT TO OLIVE HILL MANUFACTURING COMPANY, INC., UNDER INVITATION FOR BIDS NO. QH/CTH/-36-243/60-B49.

THE INVOLVED INVITATION REQUESTED BIDS FOR THE MANUFACTURE AND DELIVERY, F.O.B. DESTINATION, OF 22,380 WOOL JACKET LINERS. IN VIEW OF THE FACT THAT SECTION 623 OF THE CURRENT DEPARTMENT OF DEFENSE APPROPRIATION, 73 STAT. 382, REQUIRED THAT PREFERENCE BE GIVEN TO WOOL OF DOMESTIC ORIGIN, THE INVITATION REQUIRED BIDDERS TO INDICATE THE ORIGIN OF THE WOOL THEY WOULD USE. IN THIS REGARD THE INVITATION PROVIDED AS FOLLOWS:

"BIDDER MUST INDICATE THE ORIGIN OF THE WOOL BEING USED IN THIS INVITATION (PROPOSAL) IN THE APPROPRIATE SPACES HEREIN AT THE TIME OF ADMISSION OF THE BID. (THE FOLLOWING PROVISION APPLIES TO INVITATION AND BIDS ONLY: IF BIDDER FAILS TO SO INDICATE, THE BID WILL BE EVALUATED ON THE BASIS OF 100 PERCENT FOREIGN WOOL.)

"/2) IF, ON THE DATE OF OPENING OF BIDS OR EVALUATION OF PROPOSALS, THE AVERAGE MARKET PRICE OF DOMESTIC WOOL OF USABLE GRADES (AS REPORTED BY GRADE AND TYPE IN THE FOUR ISSUES OF THE DEPARTMENT OF AGRICULTURE "MARKET NEWS" IMMEDIATELY PRECEDING THE DATE OF BID OPENING OR EVALUATION OF PROPOSALS) IS NOT MORE THAN 10 PERCENT ABOVE THE AVERAGE OF THE PRICES (FOR USABLE GRADES AND TYPES) WHICH REFLECT THE CURRENT INCENTIVE PRICE ESTABLISHED BY THE SECRETARY OF AGRICULTURE, AWARD WILL BE MADE ONLY ON BIDS OR PROPOSALS OFFERING DOMESTICALLY PRODUCED ARTICLES OF WHICH THE WOOL COMPONENT IS 100 PERCENT DOMESTIC WOOL, PROVIDED THAT SUCH BIDS OR PROPOSALS ARE CONSIDERED REASONABLE AND OTHERWISE ACCEPTABLE.

"/3) IF, ON THE DATE OF OPENING OF BIDS OR EVALUATION OF PROPOSALS, THE AVERAGE MARKET PRICE OF DOMESTIC WOOL OF USABLE GRADES (AS REPORTED BY GRADE AND TYPE IN THE FOUR ISSUES OF THE DEPARTMENT OF AGRICULTURE "MARKET NEWS" IMMEDIATELY PRECEDING THE DATE OF BID OPENING OR EVALUATION OF PROPOSALS) IS MORE THAN 10 PERCENT ABOVE THE AVERAGE OF THE PRICES (FOR USABLE GRADES AND TYPES) WHICH REFLECT THE CURRENT INCENTIVE PRICE, OR TO THE EXTENT THAT THE GOVERNMENT'S REQUIREMENT CANNOT BE FILLED BY AWARDS BASED ON PARAGRAPH (2) HEREOF, THERE WILL BE ADDED TO EACH BID OR PROPOSAL OFFERING ARTICLES OF WHICH THE WOOL COMPONENT IS 100 PERCENT FOREIGN WOOL AN EVALUATION FACTOR OF ?3853 EACH AND THERE WILL BE ADDED TO EACH BID OR PROPOSAL OFFERING ARTICLES OF WHICH THE WOOL COMPONENT IS A BLEND OF DOMESTIC AND FOREIGN WOOL THAT PART OF THE EVALUATION FACTOR WHICH IS IN DIRECT PROPORTION TO THE PERCENTAGE OF FOREIGN WOOL TO BE USED, AND AWARD WILL BE MADE TO THE LOW ACCEPTABLE BIDDER.'

YOUR BID WAS LOW BUT YOU FAILED TO STATE THE ORIGIN OF THE WOOL YOU INTENDED TO USE. CONSEQUENTLY, UNDER THE QUOTED PROVISIONS OF THE INVITATION YOUR BID WAS REQUIRED TO BE EVALUATED ON THE BASIS OF 100 PERCENT FOREIGN WOOL. IN REGARD TO THE EVALUATION OF BIDS, IT WAS ASCERTAINED THAT 4 ISSUES OF THE DEPARTMENT OF AGRICULTURE "MARKET NEWS" IMMEDIATELY PRECEDING THE DATE OF BID OPENING REPORTED THAT THE AVERAGE MARKET PRICE OF DOMESTIC WOOL OF USABLE GRADES WAS NOT MORE THAN 10 PERCENT ABOVE THE AVERAGE OF THE PRICES WHICH REFLECT THE CURRENT INCENTIVE PRICE ESTABLISHED BY THE SECRETARY OF AGRICULTURE. HENCE, UNDER THE QUOTED PROVISIONS OF THE INVITATION (PARAGRAPH NUMBERED "2") IT BECAME NECESSARY TO DETERMINE WHETHER ANY BID RECEIVED WHICH OFFERED DOMESTICALLY PRODUCED ARTICLES OF WHICH THE WOOL COMPONENT WAS 100 PERCENT DOMESTIC WOOL WAS REASONABLE AND OTHERWISE ACCEPTABLE. THE CONTRACTING OFFICER DECIDED THAT SINCE THE BID OF OLIVE HILL MANUFACTURING COMPANY, INC., OFFERING TO MANUFACTURE THE LINERS FROM 100 PERCENT DOMESTIC WOOL, WAS ONLY $0.86 PER GARMENT HIGHER THAN YOUR BID ($12.10 EACH AS CONTRASTED WITH YOUR BID OF $11.24 EACH) IT WAS REASONABLE AND THAT IT WAS OTHERWISE ACCEPTABLE. THE AWARD TO OLIVE HILL, THEREFORE, WAS MANDATORY. THE PROVISIONS OF THE ABOVE-QUOTED PARAGRAPH NUMBERED "3" ARE NOT FOR APPLICATION, AS YOU INFER IN YOUR LETTER OF PROTEST, IN VIEW OF THE DETERMINATION MADE AS TO THE AVERAGE MARKET PRICE OF DOMESTIC WOOL.

IN YOUR LETTER OF PROTEST YOU STATE THAT YOUR BID WAS DECLARED NONRESPONSIVE BUT IT DOES NOT APPEAR THAT SUCH WAS THE CASE. IF, IN FACT, NONE OF THE OTHER BIDS OFFERING TO USE DOMESTIC WOOL WOULD HAVE BEEN CONSIDERED REASONABLE OR OTHERWISE ACCEPTABLE, YOUR BID COULD HAVE BEEN CONSIDERED FAVORABLY. ALSO, IN YOUR LETTER YOU CONTEND THAT THE ABOVE- QUOTED PROVISIONS OF THE CONTRACT ARE AMBIGUOUS AND SHOULD BE CLARIFIED. YOU SUGGEST THAT THE INVITATION SHOULD PROVIDE THAT FAILURE TO INDICATE THE ORIGIN OF THE WOOL TO BE USED WOULD RESULT IN SUCH BIDS BEING EVALUATED ON THE BASIS OF DOMESTIC WOOL, RATHER THAN ON THE BASIS OF FOREIGN WOOL AS NOW PROVIDED. YOUR SUGGESTION HAS BEEN CONSIDERED BY THE ADMINISTRATIVE OFFICE AND THEY HAVE CONCLUDED THAT SINCE THE PREFERENCE AFFORDED DOMESTIC WOOL IS REQUIRED BY LAW, IT WOULD BE INADVISABLE TO ASSUME THAT A CONTRACTOR WILL USE DOMESTIC WOOL IF HE FAILS TO INDICATE THE ACTUAL ORIGIN OF THE WOOL TO BE USED. THEY PROPOSE, THEREFORE, TO CONTINUE THE REQUIREMENT THAT A BIDDER MUST MAKE A POSITIVE STATEMENT AS TO THE ORIGIN OF THE WOOL BUT, IN ORDER TO MINIMIZE THE POSSIBILITY OF THE FUTURE REJECTION OF A LOW BID DUE TO THE FAILURE TO IDENTIFY THE ORIGIN OF THE WOOL TO BE USED, WHEN IN FACT A BIDDER INTENDS TO USE DOMESTIC WOOL, FUTURE INVITATIONS WILL CONTAIN A STATEMENT ON BOTH THE CAUTION NOTICE TO BIDDERS FORM AND ON THE PAY ON WHICH THE ACTUAL PRICE QUOTATION IS STATED, CALLING BIDDERS' ATTENTION TO THIS REQUIREMENT.

WITH REGARD TO YOUR SUGGESTION THAT YOUR FAILURE TO INDICATE THE ORIGIN OF THE WOOL THAT YOU INTENDED TO USE SHOULD HAVE BEEN REGARDED AS AN INFORMALITY, THUS ALLOWING YOU TO STATE, AFTER THE OPENING OF BIDS, WHETHER YOU INTENDED TO USE DOMESTIC WOOL OR FOREIGN WOOL, A SIMILAR SITUATION WAS CONSIDERED IN 39 COMP. GEN. 533, AND IT WAS HELD THAT A BIDDER SHOULD NOT BE ALLOWED TO CURE SUCH A DEFECT IN HIS BID AND HAVE HIS BID CONSIDERED FAVORABLY AFTER SUPPLYING THE REQUIRED INFORMATION. TO DO SO WOULD GIVE A BIDDER A DISTINCT ADVANTAGE OVER OTHER BIDDERS IN THAT HE COULD THEN DECIDE THAT HE WOULD USE EITHER DOMESTIC OR FOREIGN WOOL DEPENDING UPON THE RANGE OF BIDS DISCLOSED. HE COULD, THEREFORE, CONTROL HIS STANDING AMONG THE BIDDERS, AND THIS OBVIOUSLY WOULD BE PREJUDICIAL TO THE OPEN AND COMPETITIVE CHARACTER OF THE ADVERTISING PROCEDURES.

ACCORDINGLY, ON THE MATTERS PRESENTED BY YOU, WE FIND NO BASIS FOR CONCLUDING THAT THE AWARD IN THIS CASE WAS IMPROPER.