BEFORE THE ALASKA DEPARTMENT OF ADMINISTRATION

 

In the Matter of:                                             )

                                                                        )

IMAGISTICS INTERNATIONAL, INC.    )

                                                                        )

Appellant.                                                       )   DGS ITB No. 2003-9900-3683

____________________________________)   Dept. of Administration No. 03.18

 

 

RECOMMENDED DECISION

 

            This is a protest appeal.  Imagistics International, Inc. [Imagistics] filed the appeal on June 2, 2003.  The Division of General Services [DGS] filed its protest report on June 17.  By letter dated July 24, the matter was assigned to a hearing officer.

A prehearing teleconference was conducted on August 25. Ted Fosket participated on behalf of DGS.  Counsel for Imagistics was unable to attend but subsequently advised the hearing officer that Imagistics believes that an evidentiary hearing is necessary regarding the collating specifications for Lots 2 and 3. 

This recommended decision is based on the protest appeal document and supplemental materials from the agency file, consisting of: (1) copies of all three notices of intent; (2) copies of all bids submitted in response to the ITB; (3) copies of the protests and appeal documents in the other pending protest appeals arising from this ITB; (4) the original bid documents; and (5) the tape recorded prebid conference.

Issue for Decision

Did DGS abuse its discretion in determining that the Imagistics bid on Lots 2 and 3 was not responsive?

Applicable Law

The protestor bears the burden of proof as to all factual matters.  The commissioner determines facts de novo following a hearing and exercises independent judgment on questions of law.

The commissioner will afford due deference to a purchasing agencyÕs determinations of responsiveness and responsibility.  Where the protest decision adequately establishes the basis for such a determination, it is reviewed for abuse of discretion.  See generally, Appeal of Waste Management of Alaska, Inc., No. 01.08, at 9-13 (Dept. of Admin., April 25, 2002).

Factual Findings

ITB No. 2003-9900-3683 is a statewide solicitation for copiers to be delivered, installed and serviced by the selected vendors.  The ITB contains 5 lots, each calling for a different category of copier, with distinct specifications for each lot.

The ITB bid format requires bidders to identify in their Bid Schedule the specific brand and model of copier being offered and to identify any additional accessories or options included in the bid price. The ITB does not require bidders to list specific brand names or model numbers for accessories or options.  However, the ITB does strongly urge bidders to include with their bids annotated product literature to establish that the offered copiers and any included accessories and options will meet the ITB copier specifications.  If a bid was definite, firm, unqualified and unconditional, DGS reserved the right to request supplemental information to determine the responsiveness of the products offered in the bid.  The ITB specifically provided that the failure to provide such information within the time set by the state was cause for a finding of non-responsiveness.  Similarly, the ITB specifically provided that the failure to clearly identify the accessories included in the bid price within the time set by the state was grounds for a finding of non-responsiveness.  

A pre-bid conference was conducted on December 3, 2002.  Representatives of Imagistics attended.  At the teleconference, there was a detailed discussion of the collating specification. [Tape 3, Side 5-Tape 3, Side 6] DGS indicated that it required collating ability for all three sizes of paper, with an offset or other physical separation of copies rather than uniform stacking (with or without dividers), and for unstapled as well as stapled output.  DGS subsequently issued Amendments 3 and 4, which are define the term ÒcollatingÓ in a manner consistent with the discussion at the pre-bid conference.

Bids were due on February 4, 2003.  Imagistics submitted a bid and completed all portions of the bid schedule.  For Lots 2 and 3, Imagistics offered as a base model the im3520 and im4510 copiers, respectively.  In the portion of the bid schedule set aside for accessories included in the bid price, Imagistics identified several items, including a ÒFinisher w/3-Position StaplingÓ.  The Imagistics bid included product literature.   The Imagistics product literature was not highlighted or otherwise annotated.  For Lots 2 and 3, the product literature described two optional finishers, a ÒSaddle Stitch FinisherÓ and a ÒSimple FinisherÓ.  Both were described as 3-position staplers.

At 9:18 a.m. on Wednesday, March 26, the purchasing officer, Ted Fosket, sent an email to Ron Diltz, ImagisticsÕ Alaska representative, asking that he provide the model number of the finisher identified in the bid by return fax or email no later than noon on March 27.  Within the hour, Mr. Diltz sent an email in reply, stating that the finisher model number was 9942, [sic] and that an Imagistics employee would deliver a pricing booklet that same day.

The pricing booklet provided by Imagistics on March 26 was specific to this ITB.  It described the Imagistics im3510 copier as Òequipped withÉ2-bin finisher with a three position stapling (item 9242)Ó [bold in original], at the bid price.  The booklet depicted the Òim3510 w/simple 2-bin finisherÓ, and identified the Simple Finisher as Item 9242.    As a ÒPeripheral OptionÓ, the booklet stated: ÒSubstitute Saddle Stitch for Simple 2-Bin FinisherÓ, indicating that this option, Item 9244, could be selected for an additional price over the bid price.  Similarly, for Lot 3 the booklet showed the offered copier as including the Simple Finisher (Item 9242) at the bid price, and offered the option of the Saddle Stitch Finisher (Item 9244) at a price higher than the bid price.

At 12:42 p.m., on March 26, Mr. Fosket sent another email to Mr. Diltz, noting that based on the pricing booklet it appeared that finisher offered was the Simple Finisher, #9242, and asking Mr. Diltz to confirm no later than noon on March 27 that the Simple Finisher met the ITB specification for collating.  Mr. Diltz sent an email on the morning of March 27, stating that the #9242 finisher met the collating specification, by producing offsetting copies in three sizes of paper.

            A number of protests were filed.  Two of the protests asserted that the Imagistics bid on Lots 2 and 3 was non-responsive.  In an email sent on April 2, DGS asked Imagistics to provide supplemental information in the form of manufacturerÕs specifications or other evidence to establish that the Simple Finisher #9242 would meet the ITBÕs collating specifications, and in particular the requirement for collating all three sizes of paper.  In a followup email sent on Thursday, April 3, Mr. Foskett stated that if the requested information regarding the Simple Finisher #9242 was not provided by noon on Monday, April 7, the Imagistics bid would be declared non-responsive.

On April 4, Imagistics replied that it would deliver a finisher with a 2 tray, 3-position stapling capable of collating all three sizes of paper, with an offset function in the upper tray and 2/3 hole punch.  The April 3 reply did not include a model number for the finisher.     The product literature included with the bid described the Saddle Stitch Finisher (#9244) as including offset in the upper tray and 2, 3 or 4 hole punch support; the Simple Finisher (#9242) description did not include either of those functions.

Based on the information available to him at the time, as well as in light of all of the evidence in the present record, Mr. Fosket reasonably concluded that although Imagistics had intended to bid the Simple Finisher (#9242), it planned to deliver the Saddle Stitch Finisher (#9244).  On Monday, April 7, before the noon deadline had expired, Mr. Fosket notified Imagistics by email that its bid was non-responsive.  Imagistics responded, again before noon, that it would stand by its original bid, and that any subsequent information to the contrary should be ignored.  Later that afternoon, Imagistics again confirmed its original bid, asserting that it was responsive.

On April 28, Imagistics filed a formal protest, which was denied by Mr. Fosket in a decision dated May 20.  Imagistics has appealed.

Analysis

Imagistics argues that: (1) the specifications were misleading; (2) Mr. DiltzÕs email of March 27 mistakenly referred to Item 9242 (the Simple Finisher), when in fact it had intended to refer to Item 9244 (the Saddle Stitch Finisher); and (3) Imagistics is bound to its bid, which was responsive on its face.

A.        The Collating Specification was Reasonably Clear.

The collating specification required that copiers be able to collate sets of documents of all sizes Òwithout being stacked one set on top of another and using paper inserts to depict the separation.Ó  Imagistics contends the Simple Finisher meets the collating specification and that if it is deemed non-responsive it is because the specification was misleading.

            This specification was the subject of detailed discussion at the pre-bid conference.  At the pre-bid conference, it was made clear that the agencyÕs intent was to require physical separation of collated sets through offsetting, sorting, or some other means, rather than by insertion of paper dividers into a uniform stack, or by stapling (since not all collated sets will be stapled).  Amendment Nos. 3 and 4 were issued to implement the collating requirement.  The amended specification might have been better worded, but any ambiguity in its meaning was apparent on its face and could have been the subject of an inquiry prior to the due date.  Whether the collating requirements were reasonably necessary and sufficiently clear are issues that could have been raised in a protest filed prior to the due date, but are now untimely.  Because Imagistics did not raise this issue prior to the due date, the topic had been addressed at the pre-bid conference, and the specification adequately expressed the agencyÕs intent, the appeal on this issue is denied.

            B.        Imagistics May Withdraw its Bid.

            The ITB required bidders to list in the bid schedule any accessories included in the bid price, but did not require them to specify the item number for those accessories.  It also provided that post-bid supplemental information could be considered in order to determine whether the products offered met the ITB specifications.  Consistently with these provisions, ImagisticsÕ bid offered a ÒFinisher w/ 3-Position StaplingÓ, but did not provide a model number or otherwise identify the specific finisher to be provided.  The product literature provided with the bid described two finishers, only one of which has been shown to be responsive.  The bid, including the product literature, did not clearly establish whether ImagisticsÕ bid price included either one of the finishers (at the purchasing agencyÕs option), or only one of them (and if so, which). 

Imagistics argues that the time allowed for Imagistics to provide supplemental information was insufficient, and that because of the short time frame Mr. Diltz had mistakenly identified the Simple Finisher (#9242) rather than the Saddle Stitch Finisher (#9244) as its intended product.  However, Mr. FosketÕs finding that Imagistics intended to bid the Simple Finisher (#9242) is supported by clear and convincing evidence.  The model number initially provided by Mr. Diltz on March 26 was Ò9942Ó, rather than the model number of either the Simple Finisher or the Saddle Stitch Finisher (#9244).  However, on that same day his associate provided a price booklet stating that the Simple Finisher (#9242) was to be provided at the bid price, while the Saddle Stitch Finisher (#9244) could be purchased as an option, for a higher price than the bid price.  It is apparent on the face of the price booklet that it was prepared specifically for this ITB, and it is highly unlikely that an additional cost for the Saddle Stitch Finisher would have been shown on the price booklet unless that was ImagisticsÕ intent in the bid.  And the next day, Mr. Diltz specifically identified the offered finisher as item 9242.  That he would have twice been mistaken in listing the item number is unlikey, given the importance of the question.  In short, there is clear and convincing evidence that it was the Imagistics bid that was mistaken, not the supplemental information provided after bids were submitted. 

Under 2 AAC 12.170, when a bid is shown by clear and convincing evidence to be erroneous, the bidder may not correct the bid, but it has the option of confirming or withdrawing the bid.  Imagistics in this case has chosen not to withdraw its bid, but to confirm its original bid as submitted.

            C.        The Purchasing Officer Did Not Abuse His Discretion.

One presumes that Imagistics would not intentionally submit a non-responsive bid, and it therefore is logical to infer that Imagistics overlooked the collating requirements when it prepared its bid, simply entered the wrong price on the bid schedule, or otherwise erred in its bid.  That it misunderstood the collating specification is also possible, in view of the fact that Imagistics later protested the specification as misleading.  But that protest having been denied, Imagistics is bound to the bid as submitted.

But the bid as submitted did not identify the Simple Stitch finisher as the item to be offered.  Imagistics argues that because it did not identify the Simple Stitch finisher in the bid, the supplemental information pointing to that finisher may be ignored.  The bid, it argues, was an implied promise to supply a finisher meeting the specifications, and therefore the bid was responsive on its face. 

As Imagistics suggests, a bid that on its face is a definite, firm, unqualified and unconditional offer to provide a product meeting all the material terms of an ITB is on its face responsive.  Whether the products offered in the bid actually will meet the specifications, however, is another question.  When an ITB provides that supplemental information may be requested and reviewed after bids are submitted in order to determine whether the products offered actually meet the specifications, the determination of responsiveness is made not solely on the face of the bid, but on the basis of the bid and the supplemental information.  The supplemental information, however, is not a part of the bid.  The purchasing agency may rely on the supplemental information to confirm that the product offered in the bid will meet the specifications, but it may not rely on supplemental information to make definite and clear a bid that on its face is indefinite or unclear.

In this case, the ITB specifically provided for supplemental information to be considered in determining whether the products offered in the bid would meet the specifications.  The product literature submitted with the bid was a part of the bid, unlike the supplemental information provided after bids were submitted.  The underlying question raised in this appeal is whether, the bid (including the product literature) was sufficiently definite to be considered responsive, while at the same sufficiently inspecific that the purchasing officer had discretion to accept the Saddle Stitch Finisher at the bid price.

The purchasing officerÕs discretion to accept the Saddle Stitch Finisher was limited by his determination of responsiveness.  If he had determined that the bid was responsive, the purchasing officer would have had discretion to accept either finisher, so long as it met the specifications.  But the purchasing officer could not find the bid non-responsive and then permit Imagistics to correct it, even at the same bid price.  Indeed, that is not what Imagistics asks: it contends that the original bid should have been deemed responsive on its face.

With respect to responsiveness, the fundamental issue is whether the original bid was sufficiently clear and definite.  The degree of specificity that is required in a bid regarding the product being offered is a matter within the discretion of the purchasing agency.  In this solicitation, it was particularly important to DGS to avoid disputes over the specific equipment offered, because copiers come in a wide variety of configurations, with many available options, and this had caused problems in the administration of the prior copier contract.

The Imagistics bid on its face does not clearly establish which finisher of the two alternatives described in the product literature was being offered.  For this reason, the bid could reasonably be deemed indefinite or unclear.  And, notwithstanding ImagisticsÕ subsequent confirmation that it will provide a finisher at the bid price that will meet the ITB specifications, the bid did not contain an express, affirmative commitment to provide a finisher at the bid price that meets the ITB specifications.  Rather, it contains an express commitment to provide a finisher, with the implication that the finisher will be one (or either) of the two described.  Finally, the specific finisher subsequently identified by Imagistics in its supplemental information as the intended product was not (and still has not been) shown to be compliant.  Under these circumstances, the purchasing agency had discretion to find the original bid non-responsive. 

Conclusion

I conclude that the purchasing officer did not abuse its discretion in finding the  Imagistics bid on Lots 2 and 3 non-responsive.  I therefore recommend that this appeal be denied.

 

DATED September 17, 2003.

 

                                    ______________________________

                                                            Andrew M. Hemenway

Hearing Officer