1. Does the fact that the Veterans Administration issued the solicitation as an IFB rather than an RFP have an impact on the outcome of this case? What could the contractor have done prior to submission of bids that would have altered this case? Why would a prospective contractor not take action prior to submission of bids?
2. Of critical importance to the outcome of this case is the conclusion of the courts that “the Government is entitled to obtain precisely what it contracts for as long as it does not mislead the contractor.” American Elec. Contracting Corp. v. United States, 579F.2d 602, 608, 217, Ct.Cl. 338 (1978). What policies support such a conclusion? What responsibility does a contractor have to inform the government that a proposed solution may not be the most desirable or least expensive?
3. Agency requirements shall not be written so as to require a particular brand-name product, or a feature of a product, peculiar to one manufacturer, thereby precluding consideration of a product manufactured by another company, unless:
a. The particular brand-name, product, or feature is essential to the government’s requirements, and market research indicates other companies’ similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the agency’s minimum needs:
b. The authority to contract without providing for full and open competition is supported by the required justifications and approvals
What was the justification for specifying a particular brand in this instance?
1. In case of invitation for bid, price is the only factor for evaluating the offerors (Hall, 2014). According to (Hamilton & Browning, 2012), in an invitation for bid, a contractor who offers to complete the job at the lowest possible price is usually awarded the contract. Once the bid is final there is no scope of negotiating the terms of contract. But in case of request for proposal, price is not the only factor for evaluating the offerors (Block, 2012). Once the process of request to proposal is completed, negotiations can be entered into between the parties for improving the terms of the contract. In this case, if the process of request to proposal would have been adopted by the Veterans Administration, then there would have been scope of negotiation between the parties and it would have surely impacted the outcome of the case. The contractor would have got the right to negotiate the conditions of contract and would have strong points to argue before the Court.
In the instant case, the plan of the Veterans Administration (VA) was to make replacement of the outdated fire alarm system which was operating in the Medical Centre of Veteran’s Administration in Lexington. The design proposed by VA was to integrate the new fire alarm system with the heating ventilation and air conditioning (HVAC) system which had been newly installed in the Medical centre. A JC-80 computer used to operate the HVAC system. The aim of the VA was to expand the existing Johnson Controls Computer so that is able to operate both the HVAC system and the new fire alarm system. For that purpose, VA invited offers from various contractors so as to conduct a bid. The bid was an open bid and J.L. Malone & Associates, Inc. (appellant) who proposed to perform the work at the lowest price was awarded the contract on December 7, 1981. The appellant through its submittal dated May 7, 1982, proposed to replace the existing JC computer systems with Honeywell systems which would serve the purpose of operating both the HVAC system and the new fire alarm system. The submittal was however rejected by contracting officer on the ground that it did not comply with the requirements of the contract. The contractor was not allowed to negotiate the terms of the contract. Had the contract been entered into through RFP, the contractor could have negotiated the terms of the contract and would have been in an advantageous position.
Before submitting the bids, the contractor could have desired an interpretation or explanation of the solicitation in writing from the Veterans Administration. Thus, the contractor would have been confirmed about the fact whether the desired terms and conditions would have satisfied the requirements which Veterans Administration seeded to achieve. Taking such a step would have clearly kept the contractor in an advantageous position in the course of the case.
Contracts are awarded on the basis of evaluation of the price quoted by the prospective bidders. Prospective bidders aim to make profit by grabbing an opportunity to be awarded with a contract (Neu et al., 2015). Taking any action by the prospective bidders would mean withdrawing from the bids and they would suffer a loss thereby. Therefore, a prospective bidder never initiates an action before submitting a bid (Carbonara et al., 2016).
2. Once a contract is entered into between two or more parties, they are bound by the terms of the contract. In an invitation for bid, the Government specifies the requirements which it needs. Accordingly, contractors prepare their tender documents and submit their bids (Adams & Commissioner, 2014). Any ambiguity which arise related to the terms of the bid should be clarified before the contract is awarded to the contractor. Once the contractor submits the bids and the contract is awarded, the contractor will have no option to change the terms of the contract (Allin et al., 2013). But if the Government misleads the contractor and tries to obtain something which was not there in the original terms of the bid, then the contractor has every right to prevent the government (Stein, 2015).But as long as the government does not mislead the contractor, the government has every right to obtain precisely which are specified in the contract. This principle has been supported in the cases of American Elec. Contracting Corp. v. United States (1978) & Tidewater Contractors, Inc. vs. Department of Transportation (2007).
In the instant case, under the term of the contract, the contractor was required to expand the existing JC-80 computer systems. In the invitation for bid, the Veterans Administration made it clear that it was not looking for replacing the existing computer system which could support both the HVAC system and the new fire alarm system. This requirement was clearly specified in the terms of the bid and the contractor was not allowed to deviate from this requirement after the contract was awarded to him. Had the contractor been allowed to deviate from the contract, it would have caused injustice to the other bidders. Thus, the principle prevents from causing injustice or partiality with respect to the other bidders. This principle has been supported by the Court in this case well and the government was justified in rejecting the submittal of the contractor dated May 7, 1982.
The contractor has a responsibility to get the work of the contract done at the lowest cost. While preparing the bid, the contractors come up with such proposals which would cause the least expenditure to the government. This is the whole idea of creating a contract through a bid. After the contract has been awarded to a contractor, then also the contractor may come up with such proposals which would reduce the cost of performance of the contract. Such proposals need to be approved by the government. But if such proposal tends to change the major terms of the contract, the Contractor has every right to reject such proposal. In the instant case, the contractor, through its submittal dated May 7, 1982, wished to make a substantial change in the terms of the contract which could reasonably could not have been allowed.
3. The contractor proposed to replace the Johnsons Control Computer system with a Honeywell computer. But, under the contract the contractor was required to make use of an existing Johnsons Control computer. The Government wanted to make changes to the outdated fire alarm system in a way so that the new fire alarm system integrates with the existing computerized building automation system. The Johnson Controls computer system had been used for one and a half years, it had been debugged and continuing to use it would presumably prove to be cost effective to the Government. The contract designed by the Government mainly focused on the work to be performed and it did not really focus on the product which should be used for performance of the contract. Therefore it cannot be said that the Government’s action was detriment to the competitive forces prevailing in the market. Had the Government desired to replace the JC-80 computer system with a new system, it would have mentioned it clearly in the invitation for bids. The main intention of the Government to get the work done by keeping in place an existing system which would be cost effective to the government. Under these circumstances, the government was justified in rejecting the contractor’s proposal to substitute the existing JC-80 computer system with a new Honeywell system.
References:
Adams, D. K., & Commissioner, J. C. (2014). INVITATION TO BID.
Allin, P. J., Khadir, M., & Turinelli, F. (2013). U.S. Patent Application No. 13/833,249.
Block, R. (2012). Request for Proposal. personnel, 11, 23092409.
carbonara, N., costantino, N., & Pellegrino, R. (2016). A transaction costs-based model to choose PPP procurement procedures. Engineering, Construction and Architectural Management, 23(4).
Hall, J., & Officer II, C. P. (2014). Invitation for Bid. City, 8, 00am.
Hamilton, C., & Browning, L. (2012). INVITATION FOR BID.
Neu, D., Everett, J., & Rahaman, A. S. (2015). Preventing corruption within government procurement: Constructing the disciplined and ethical subject.Critical Perspectives on Accounting, 28, 49-61.
Stein, S. G. (2015). Contractor’s and Construction Manager’s Rights and Duties (Vol. 2). Construction Law.
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