TITLE:   Valley Forge Flag Company, Inc., B-283130, September 22, 1999
BNUMBER:  B-283130
DATE:  September 22, 1999
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Valley Forge Flag Company, Inc., B-283130, September 22, 1999

Decision

                    Matter of: Valley Forge Flag Company, Inc.

File: B-283130

Date: September 22, 1999

Robert G. Fryling, Esq., and Edward J. Hoffman, Esq., Blank Rome Comisky &
McCauley, for the protester.

James S. DelSordo, Esq., Barbara S. Kinosky, Esq., and James S. Phillips,
Esq., Williams Mullen Clark & Dobbins, for Allied Materials and Equipment
Co., Inc., an intervenor.

Merilee Rosenberg, Esq., Department of Veterans Affairs, for the agency.

Jacqueline Maeder, Esq., and Paul I. Lieberman, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency improperly awarded contract to bidder whose bid was nonresponsive
because it took exception to the delivery schedule required by the
solicitation.

DECISION

Valley Forge Flag Company, Inc. protests the award of a contract to Allied
Materials and Equipment Co., Inc. under invitation for bids (IFB) No.
101-01-99, issued by the Department of Veterans Affairs (VA). Valley Forge
contends that Allied?s bid should have been rejected as nonresponsive
because it took exception to the delivery schedule required by the
solicitation.

We sustain the protest.

The IFB, issued as a small business set-aside on March 31,1999, contemplated
the award of a fixed-price, indefinite-delivery, indefinite-quantity
contract [1] for an estimated 321,000 interment (burial) flags. IFB sect. B.1.
The solicitation specified that the contract term was from October 1, 1999
through September 30, 2000, IFB sect. F.1, and that during that time period "VA
will place orders" for a minimum of 305,000 and a maximum of 385,000 flags.
IFB sect. B.2. The solicitation provided that the "total contract performance
period shall not exceed March 30, 2001, in accordance with FAR Clause
52.216-22 ?Indefinite Quantity,?" [2] which was incorporated by reference in
the IFB. IFB sect. F.1. The IFB advised that the first delivery under the
contract would be required no sooner than 180 days after contract award, IFB
sect.sect. H.3, F.2, and that the agency desired delivery of subsequent orders
within 30 days of receipt of the order. IFB sect. F.2. In the alternative, the
solicitation advised as follows:

          If the offeror is unable to meet the desired delivery schedule, it
          may without prejudicing evaluation of its offer, propose a
          delivery schedule below. However, the offeror?s proposed delivery
          schedule must not extend the delivery period beyond the time for
          delivery in the Government?s required delivery schedule as
          follows:

                         REQUIRED DELIVERY SCHEDULE

          ALL ITEMS WITHIN 45 DAYS AFTER RECEIPT

          (after first delivery) OF ORDER (ARO)

          Offers that propose delivery of a quantity under such terms or
          conditions that delivery will not clearly fall within the
          applicable required delivery period specified above, will be
          considered nonresponsive and rejected. If the offeror proposes no
          other delivery schedule, the desired delivery schedule above will
          apply.

IFB sect. F.2. The IFB incorporated by reference FAR sect. 52.216-19 with respect to
order limitations, providing here, in relevant part, for a minimum order of
10 flags and a maximum single order (or series of orders from the same
ordering office within 15 days) of 305,000 flags. IFB ch. C, part 2, at 1.
The IFB did not contain any other limitations on the placement of orders.

Seven bids, including Allied?s and Valley Forge?s, were received by the
amended May 18 bid opening. Contracting Officer?s Statement at 1. The low
bid was rejected as nonresponsive. Allied?s bid of $23.98 per unit
($7,697,580 for the 321,000 estimated units) was next low and Valley Forge?s
bid of $24.54 per unit ($7,877,340 for the 321,000 estimated units) was
third low. As a delivery schedule, Allied proposed in its bid that it would
deliver 46,782 flags "within 180 days after receipt of contract" and, for
all subsequent orders, it would deliver "4,873 per week until completed."
Agency Report, exh. 3, Allied Bid, sect. F.2.

The contracting officer determined that Allied?s proposed delivery schedule
was responsive on the basis that Allied could deliver the estimated quantity
of flags before March 30, 2001. Specifically, using the estimated quantity
of 321,000 flags and a projected award date of June 23, the contracting
officer calculated the first delivery (46,782 flags) on December 20, 1999
(180 days after the contract award date) and weekly deliveries of 4,873
flags thereafter, beginning on December 27. [3] The contracting officer
determined that Allied could deliver the remaining 274,218 flags at the rate
of 4,873 flags per week within 57 weeks (4,873 times 57 equals 277,761), or
by January 22, 2001.

After finding Allied?s bid responsive, VA requested additional information
regarding Allied?s financial resources and the firm?s ability to produce the
flags. Allied responded by letter dated June 8. In addition to providing
additional information about the firm, Allied indicated that it would draw
on its current labor pool, hire additional production personnel, and obtain
the necessary production equipment "to effectively produce a minimum of
4,873 flags per week in accordance with the requirements of [the] IFB . . .
." Agency Report, exh. 5, Letter from Allied to Contracting Officer 2 (June
8, 1999). In response, by letter dated June 10, the contracting officer
asked Allied:

          What is the maximum [number of flags] that Allied can produce in
          one week? This question is raised in order to determine Allied
          capable of providing the maximum quantity of 385,000 flags should
          they be ordered.

Agency Report, exh. 9, Letter from Contracting Officer to Allied 1 (June 10,
1999). By letter dated June 15, Allied responded that the firm "possesses
the capability to achieve a production of 6000 interment flags per week."
Agency Report, exh. 9, Letter from Allied to Contracting Officer 1 (June 15,
1999).

Based on the information supplied by Allied concerning its capabilities and
financial resources, the contracting officer determined that Allied was able
to perform the contract. Award was made to Allied on June 24. Valley Forge
filed this protest with our Office on July 1. The agency reports that it has
suspended performance of the contract pending our decision.

Valley Forge argues that Allied?s proposed delivery schedule changed the
IFB?s mandatory delivery terms and is nonresponsive. [4] Protest at 4. In
particular, the protester contends that Allied?s proposed delivery terms do
not conform to the IFB requirements because the awardee has offered to
provide only a limited number of flags in 180 days and, again, a limited
number of flags every week thereafter. We agree that Allied?s bid takes
exception to the IFB?s delivery requirements and is therefore nonresponsive.

All bidders must compete for sealed bid contracts on a common basis. In
order to be responsive and considered for award, a bid as submitted must
contain an unequivocal offer to perform, without exception, the exact thing
called for in the IFB, in total conformance with the material terms of the
solicitation. NR Vessel Corp., B-250925, Feb. 11, 1993, 93-1 CPD para. 128 at
2-3. Delivery terms are a material requirement and thus a bid that takes
exception to the stated delivery terms is nonresponsive and must be
rejected. Copley Int?l Trading Partners; Western States Elec., Inc.,
B-248751, B-248751.3, Sept. 10, 1992, 92-2 CPD para. 167 at 3. Further, a bid
which is nonresponsive on its face may not be made into a responsive bid by
post-bid opening clarifications or corrections. Lathan Constr. Corp.,
B-250487, Feb. 5, 1993, 93-1 CPD para. 107 at 3-4.

Here, Allied?s bid is nonresponsive because Allied inserted a delivery
schedule in its bid which clearly takes exception to the IFB?s delivery
requirements. The IFB provided that no delivery would be required sooner
than 180 days after contract award. Since award was made on June 24, this
would mean that no delivery would be required before December 21. With that
one exception, the IFB required delivery of any quantity ordered (up to the
maximum per-order limit of 305,000 flags) within 45 days of receipt of the
order.

Allied?s bid takes exception to these delivery terms by specifying the
quantity that the firm will deliver and the time frame within which that
quantity will be delivered. Thus, while the solicitation would permit the
agency to order, for example, 100,000 flags in its initial order, and to
require delivery 180 days after contract award, Allied proposes to deliver
only 46,782 flags 180 days after contract award. Similarly, under the terms
of the IFB, the agency may order 60,000 flags in a subsequent order, and
delivery of those flags would be required within 45 days of receipt of the
order--yet Allied has agreed to deliver only approximately 30,000 flags
within the 45-day required delivery term (4,873 flags per week for somewhat
more than 6 weeks). For this reason, we agree with the protester that
Allied?s delivery schedule takes exception to the delivery requirements
specified by the IFB and therefore should have been rejected as
nonresponsive.

The contracting officer?s responsiveness determination looked only to
Allied?s ability to deliver the total 321,000 estimated quantity by March
30, 2001, and simply ignored the solicitation?s delivery terms. While the
March 30, 2001 date and the clause in which it is inserted, FAR sect. 52.216-22,
identify the latest date on which the contractor can be required to make
deliveries, that clause is irrelevant to the 45-day delivery requirement and
it cannot reasonably be interpreted as vitiating the agency?s rights under
the unambiguous delivery terms of the solicitation. Moreover, even under
VA?s mistaken application of the March 30, 2001 date, the agency apparently
was concerned that Allied?s bid schedule could not accommodate the maximum
quantity permitted under the IFB. In response to that concern, Allied
essentially attempted to modify its bid after bid opening (from 4,873 flags
per week to a minimum of that quantity per week). As noted above, post-bid
opening clarifications or corrections cannot serve to make Allied?s
nonresponsive bid responsive. Lathan Constr. Corp., supra, at 3-4.

In fashioning our recommendation for corrective action, we recognize that
the IFB?s delivery terms may not reflect the agency?s actual needs.
Specifically, the agency?s arguments in response to the protest indicate
that the 45-day delivery terms may overstate the agency?s needs; moreover,
as noted above, the record shows that, historically, VA has ordered the
estimated quantity at contract award, with no additional orders being
issued. Accordingly, we recommend that the agency reevaluate its quantity
and delivery requirements. If an indefinite-quantity delivery-order contract
and the 180-day initial and 30/45-day subsequent delivery requirements
reflect the agency?s needs, the agency should terminate Allied?s contract
for the convenience of the government and award the contract to the
protester, if otherwise appropriate. If, however, the agency?s needs are not
accurately stated in the solicitation, the agency should terminate Allied?s
contract for the convenience of the government and resolicit under a
solicitation revised to reflect the agency?s actual requirements. In
addition, we recommend that the protester be reimbursed its costs of filing
and pursuing the protest. 4 C.F.R. sect. 21.8(d)(1) (1998). The protester should
submit its certified claim, detailing the time expended and costs incurred,
directly to the contracting agency within 60 days of receiving this
decision. 4 C.F.R. sect. 21.8(f)(1).

The protest is sustained.

Comptroller General
of the United States

Notes

1. An indefinite-delivery, indefinite-quantity contract provides for an
indefinite quantity, within stated limits, of supplies or services to be
furnished during a fixed period, with deliveries or performance to be
scheduled by placing orders with the contractor. Federal Acquisition
Regulation (FAR) sect. 16.504(a).

2. Paragraph (d) of the clause at FAR sect. 52.216-22 provides as follows:

Any order issued during the effective period of this contract and not
completed within that period shall be completed by the Contractor within the
time specified in the order. The contract shall govern the Contractor?s and
Government?s rights and obligations with respect to that order to the same
extent as if the order were completed during the contract?s effective
period; provided, that the Contractor shall not be required to make any
deliveries under this contract after _____[insert date].

At page 1 of chapter C, part 2, the IFB advised bidders to insert the date
"March 30, 2001" in the blank in the clause.

3. The contracting officer states that she used the estimated quantity in
her calculations rather than the minimum or maximum quantities because the
bid prices were evaluated on the basis of the estimated quantity and
because, historically, the estimated quantity has been ordered at contract
award with no additional orders issued. Contracting Officer?s Statement at
2.

4. Valley Forge also contends that Allied will not comply with the mandatory
Limitation on Subcontracting clause set forth at FAR sect. 52.219-14 and
included by reference in the IFB. In particular, the protester complains
that the contracting officer did not ask the pre-award survey team to
investigate whether Allied could perform 51 percent of the work, as required
by the small business set-aside clause. This matter is not for review by our
Office. Whether Allied can comply with the limitations on subcontracting is
a matter of responsibility. See Corvac, Inc., B-254757, Jan. 11, 1994, 94-1
CPD para. 14 at 4-5. We will not review an affirmative determination of
responsibility absent a showing of possible fraud, bad faith, or
misapplication of definitive responsibility criteria on the part of
contracting officials. 4 C.F.R. sect. 21.5(c). Definitive criteria are not in
issue, and the record provides no basis to conclude that the contracting
officer?s determination in this regard was motivated by bias or bad faith.