B-126327, I-19337, JUL. 31, 1956

B-126327, I-19337, JUL. 31, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF JUNE 29, 1956, WITH ENCLOSURES, FROM MR. F. H. HIGGINS, ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), WITH FURTHER REFERENCE TO THE PROTEST OF ATLANTIC SEABOARD INDUSTRIES, INC., AGAINST THE ACTION OF THE SIGNAL CORPS SUPPLY AGENCY AT PHILADELPHIA, PENNSYLVANIA, IN REFUSING TO AWARD A CONTRACT TO THAT CONCERN PURSUANT TO INVITATION NO. SC-36-039-56-374-55, WHICH WAS THE SUBJECT OF OUR DECISION OF JUNE 12, 1956, B-126327, I-19337, TO YOU.

IT IS STATED IN THE LETTER OF JUNE 29, 1956, THAT FOLLOWING RECEIPT OF OUR DECISION STAFF REPRESENTATIVES OF THE DEPARTMENT OF THE ARMY VISITED THE ARMY SIGNAL SUPPLY AGENCY IN PHILADELPHIA AT WHICH TIME A MEETING WAS HELD WITH PROCUREMENT PERSONNEL OF THE AGENCY AND RECORDS PERTAINING TO THIS MATTER WERE EXAMINED TO DETERMINE WHETHER ANY CORRECTIVE ACTION WAS REQUIRED AND WHETHER ALL FACTS PROPERLY FOR CONSIDERATION HAD BEEN BROUGHT TO OUR ATTENTION. AMONG THE ENCLOSURE FORWARDED WITH THE LETTER OF JUNE 29, IS A MEMORANDUM UNDER THE SAME DATE, WITH SUBSTANTIATING DATA, PREPARED IN THE OFFICE OF THE JUDGE ADVOCATE GENERAL DEPARTMENT OF THE ARMY, WHICH SETS FORTH CERTAIN INFORMATION OBTAINED DURING THE VISIT, AND THE COMMENTS AND CONCLUSIONS OF THE OFFICE OF THE JUDGE ADVOCATE GENERAL. A RECONSIDERATION OF THE DECISION IS REQUESTED IN THE LIGHT OF THE INFORMATION THUS FURNISHED.

IT IS NOW STATED THAT THE ARMY SIGNAL SUPPLY AGENCY HAS FURNISHED INFORMATION TO THE EFFECT THAT, ALTHOUGH AMENDMENT NO. 1 TO THE INVITATION IS NOT CONSIDERED MATERIAL TO THE POINT OF AFFECTING THE COST OF PERFORMANCE UNDER THE CONTRACT, IT IS THE POSITION OF THAT AGENCY THAT AMENDMENTS 2 AND 3 ARE MATERIAL. IN ARRIVING AT THIS DETERMINATION THE CONTRACTING OFFICER IS REPORTED TO HAVE BEEN GUIDED TO A LARGE EXTENT BY THE EXPERT OPINION OF AGENCY ENGINEERS AND THE FACTS AS ASCERTAINED FROM AN ANALYSIS OF THE BIDS AS SHOWN BY THE ABSTRACT OF BIDS. IT IS POINTED OUT THAT AMENDMENT NO. 2 NOT ONLY COVERS ENGINEERING CHANGES BUT ADDED AN ADDITIONAL RANGE OF BIDS FOR ITEMS 5 AND 5 OF THE INVITATION AND THAT AMENDMENT NO. 3 "COVERED ADDITIONAL ENGINEERING CHANGES.' IN AN EFFORT TO ESTABLISH THE EXTENT OF THE MATERIALITY OF THE AMENDMENTS THE AGENCY REPORTS THAT FOLLOWING RECEIPT OF OUR DECISION TWO ENGINEERS, ONE A PROCUREMENT ENGINEER AND THE OTHER A STAFF ENGINEER, WERE REQUESTED TO PRICE OUT IN DETAIL THEIR ESTIMATE OF COST OF THE ENGINEERING CHANGES COVERED BY THE TWO AMENDMENTS AND THAT THOSE ENGINEERS AGREED THAT THE CHANGES INVOLVED A TOTAL ESTIMATED INCREASE IN COST OF $6,468.10. IT IS POINTED OUT THAT AN EXAMINATION OF THE BIDS DISCLOSES ALSO THAT INSOFAR AS AMENDMENT NO. 2 IS CONCERNED PRICE CHANGES WERE MADE BY THE BIDDERS, IT BEING STATED THAT NINE BIDDERS,SEVEN OF WHICH ARE LOCATED IN A NEW YORK AREA, QUOTED A HIGHER PRICE IN THE ADDED LOWER RANGE FOR ITEMS 5 AND 6.

WITH REFERENCE TO THE STATEMENT IN THE DECISION THAT IT WOULD APPEAR THAT, IF THE AMENDMENTS WERE MATERIAL, THE LOW BID COULD HAVE BEEN REJECTED AT THE TIME THE BIDS WERE OPENED ON THE BASIS THAT THE AMENDMENTS HAD NOT BEEN RECEIVED, THE MEMORANDUM REPORT IS TO THE EFFECT THAT, AS A GENERAL RULE, IT IS MORE DESIRABLE FROM AN ADMINISTRATIVE STANDPOINT, TO PASS UPON THE RESPONSIVENESS OF A BID PRIOR TO A DETERMINATION OF THE BIDDER'S RESPONSIBILITY BUT THAT THIS PARTICULAR CASE WAS NOT THE USUAL "RUN OF THE MILL" CASE AND THAT THE APPLICATION OF NORMAL STANDARDS WAS DIFFICULT OF ATTAINMENT. IT IS STATED ALSO THAT, SINCE IT WAS NOT KNOWN FOR A FEW DAYS AFTER THE OPENING WHETHER THE LOW BIDDER HAD FORWARDED THE AMENDMENTS WHICH MIGHT HAVE BEEN DELAYED IN THE MAILS AND SINCE THE MATERIALITY OF THE AMENDMENTS HAD NOT BEEN SATISFACTORILY ESTABLISHED, THE AGENCY CONSIDERED IT ADVISABLE TO PROCEED WITH A PRE-AWARD QUALIFICATION SURVEY. IT IS CLAIMED THAT THE FOLLOWING LIST OF ACTIONS EXPLAINS WHY A PRE-AWARD SURVEY WAS MADE PRIOR TO A DETERMINATION THAT THE BID WAS NOT RESPONSIVE:

"A. 19 OCTOBER 1955--- FIRST ENGINEER'S REPORT. THIS REPORT, ON ITS FACE, WAS RECOGNIZED AS A LIMITED EVALUATION AND INADEQUATE.

"B. 19 OCTOBER 1955--- BID OF ATLANTIC SEABOARD INDUSTRIES, INC. FORWARDED TO CONTRACTOR EVALUATION BOARD FOR PRE-AWARD SURVEY.

"C. 15 NOVEMBER 1955--- REPORT OF CONTRACTOR EVALUATION BOARD THAT BIDDER IS NOT QUALIFIED BECAUSE OF LACK OF INTEGRITY.

"D. 25 NOVEMBER 1955--- SECOND ENGINEER'S REPORT. THIS ENGINEER'S REPORT IS NOT DATED, AND THIS DATE HAS BEEN RECONSTRUCTED FROM THE BEST RECOLLECTION OF THE VARIOUS REPRESENTATIVES OF TASSA. IN LIGHT OF THE QUALIFIED AND INADEQUATE INITIAL ENGINEER'S REPORT, THE NEED FOR A SECOND REPORT IS UNDERSTANDABLE.

"E.25 NOVEMBER 1955--- OPINION OF CHIEF, LEGAL OFFICE, TASSA, THAT BIDDER CANNOT BE DISQUALIFIED ON GROUND OF LACK OF INTEGRITY.

"F. 30 NOVEMBER 1955--- THIRD ENGINEER'S EVALUATION REPORT OBTAINED FROM STAFF ENGINEER, WHO HAD NO KNOWLEDGE OF THE VARIOUS BIDDERS INVOLVED.'

WE STILL FEEL, HOWEVER, THAT THERE WAS AN UNNECESSARY DELAY IN DETERMINING WHETHER THE AMENDMENTS TO THE INVITATION WERE MATERIAL SO AS TO JUSTIFY A REJECTION OF THE LOW BID FOR FAILURE TO RETURN THEM. THE CONTRACTING OFFICER REPORTED IN THE SUMMARY OF FACTS FORWARDED WITH LETTER OF JANUARY 13, 1956, FROM THE ASSISTANT SECRETARY OF THE ARMY, THAT ON OCTOBER 13, 1955, HE NOTED AND ANNOUNCED PUBLICLY THAT THE LOW BID HAD BEEN RECEIVED WITHOUT THE 3 AMENDMENTS AND THAT A NOTATION TO THAT EFFECT WAS MADE ON THE ABSTRACT OF BIDS. THE REQUIREMENTS OF THE 3 AMENDMENTS WERE OF RECORD IN THE CONTRACTING OFFICE AND NO REASON IS APPARENT WHY THEIR MATERIALITY COULD NOT HAVE BEEN DETERMINED WITHIN A MUCH SHORTER TIME OR WHY THE LOW BIDDER'S QUALIFICATIONS COULD NOT HAVE BEEN DETERMINED WHEN FIRST CONSIDERED RATHER THAN HAVING THEM CONSIDERED AT VARIOUS TIMES OVER THE EXTENDED PERIOD.

THE MEMORANDUM CONTINUES WITH AN EXTENSIVE EXPLANATION REGARDING THE VARIOUS MATTERS DISCUSSED IN OUR DECISION OF JUNE 12 FOR THE PURPOSE OF SHOWING THAT REPRESENTATIVES OF THE CONTRACTING OFFICE ACTED IN GOOD FAITH IN HANDLING THIS PROCUREMENT.

IN REPORTING UPON A BID PROTEST IN RESPONSE TO A REQUEST OF OUR OFFICE IT IS, OF COURSE, INOPERATIVE THAT WE BE FURNISHED THE FULL AND CORRECT FACTS IN ORDER THAT PROPER CONSIDERATION MAY BE GIVEN THE PROTEST AND THAT A DETERMINATION MAY BE MADE AS TO WHETHER THE ADMINISTRATIVE ACTION WAS LEGALLY PROPER. IN THE PRESENT CASE IT NOT ONLY IS SHOWN THAT CERTAIN INFORMATION PREVIOUSLY FURNISHED OUR OFFICE IN THIS MATTER WAS ERRONEOUS BUT THAT MANY FACTS HAVING A BEARING UPON THE MERITS OF THE PROTEST WERE NOT REPORTED. WHILE IT MAY NOT BE POSSIBLE TO ESTABLISH DEFINITELY THAT MR. MILLER OR ANY OTHER REPRESENTATIVE OF ATLANTIC SEABOARD INDUSTRIES, INC., WAS GIVEN A COPY OF THE INVITATION FOR BIDS-- AND THERE APPEARS TO BE SOME DOUBT WHETHER THIS BIDDER WAS ENTITLED TO A COPY WITHIN THE MEANING OF THE APPLICABLE PROVISION OF THE ASPR--- IT IS ADMITTED THAT THIS BIDDER DID SUBMIT A BID ON THE PRESCRIBED FORM AND THAT SUCH BID WAS CONSIDERED ALONG WITH THE OTHER BIDS RECEIVED IN RESPONSE TO THE INVITATION. IN THE LETTER OF FEBRUARY 9, 1956, IT WAS STATED THAT THE BID WAS SUBMITTED TO THE AGENCY'S ENGINEER ON OCTOBER 13, 1955, AND A STATEMENT THAT THE BID WAS ACCEPTABLE, PROVIDED THE AMENDMENTS WERE RECEIVED, WAS ISSUED BY HIM ON OCTOBER 19, 1955, ONLY 6 DAYS AFTER THE OPENING DATE. PURSUANT TO A REQUEST DATED NOVEMBER 1, 1955, THAT THE EFFECT OF THE AMENDMENTS BE EVALUATED, THE ENGINEER REPORTED THAT AMENDMENTS 2 AND 3 MATERIALLY AFFECTED THE REQUIREMENTS. THE DATE THE ENGINEER MADE THE REPORT IS NOT STATED IN THE LETTER OF FEBRUARY 9, 1956, AND IT IS NOT POSSIBLE TO VERIFY THE DATE FROM THE INFORMATION FURNISHED IN THE MEMORANDUM. IT IS APPARENT HOWEVER, THAT IT SHOULD HAVE BEEN POSSIBLE TO ASCERTAIN WHETHER THE AMENDMENTS WERE FURNISHED AND WERE MATERIAL LONG BEFORE DECEMBER 1, 1955.

THE STATEMENT IS MADE IN THE MEMORANDUM THAT THE PURCHASE CLERK WAS DIRECTED TO DELAY REPORTING THE BID OF ATLANTIC SEABOARD INDUSTRIES, INC., TO THE CONTRACTOR EVALUATION BOARD. THIS STATEMENT, HOWEVER, IS CONTRARY TO THE STATEMENT OF THE CONTRACTING OFFICER IN HIS SUMMARY OF FACTS FORWARDED WITH THE LETTER OF JANUARY 13, 1956, FROM THE ASSISTANT SECRETARY, THAT AFTER THE BID OPENING HE PROCEEDED SIMULTANEOUSLY WITH THE EVALUATION OF THE THREE LOW BIDS. IT IS ADMITTED, ALSO, THAT THE CONTRACTING OFFICER'S STATEMENT THAT "THE RECORD SHOWED THAT THE SAID BIDDER DID NOT REQUEST A SOLICITATION" WAS IN ERROR AS WELL AS THE STATEMENT IN THE ASSISTANT SECRETARY'S LETTER OF FEBRUARY 9, 1956, THAT A SPECIFIC CHECK WAS MADE DAILY BY THE AGENCY PURCHASE CLERK DURING THE PERIOD FROM OCTOBER 13, 1955, THE BID OPENING DATE TO DECEMBER 1, 1955, THE DATE OF THE AWARD OF THE CONTRACT, FOR THE SPECIFIC PURPOSE OF ASCERTAINING WHETHER THE AMENDMENTS WERE RECEIVED IN THE AGENCY MAIL ROOM. IT NOW APPEARS THAT, ALTHOUGH A DAILY CHECK WAS MADE OF THE MAIL ROOM, IT WAS ROUTINE AND NOT FOR THE SPECIFIC PURPOSE OF DETERMINING WHETHER THE AMENDMENTS WERE RECEIVED. NEEDLESS TO SAY WE DO NOT UNDERSTAND THE JUSTIFICATION FOR THE STATEMENT AS ORIGINALLY MADE. THE VARIOUS STATEMENTS WHICH ARE NOW ADMITTED TO BE ERRONEOUS OR MISLEADING WERE MATERIAL TO A PROPER CONSIDERATION OF THE PROTEST. MOREOVER THE EXPLANATIONS AND CONJECTURES NOW SET FORTH IN THE MEMORANDUM AS TO HOW MR. MILLER OBTAINED A COPY OF THE INVITATION FOR BIDS MERELY SERVE TO INDICATE THE CONFUSION AND LACK OF COORDINATION AND ADMINISTRATIVE CONTROL IN THE AGENCY.

IT APPEARS, HOWEVER, AS POINTED OUT IN THE MEMORANDUM ABOVE, THAT ATLANTIC SEABOARD INDUSTRIES, INC., ADMITTED, IN EFFECT, THAT IT NEVER OBTAINED A COMPLETE BID SET BUT SECURED AND SUBMITTED TO THE CONTRACTING OFFICER ONE COPY ONLY OF THE INVITATION FOR BIDS. FURTHERMORE, NO RECORD WAS FOUND THAT THE BIDDER EVER OBTAINED A COPY OF AMENDMENT NO. 2 AND AMENDMENT NO. 3 WAS NOT RECEIVED AND SIGNED FOR UNTIL OCTOBER 21, 1955, OR 8 DAYS AFTER THE BID OPENING. ALTHOUGH THIS LETTER INFORMATION IS CONTRARY TO THE STATEMENT OF EMIL PERCELLI, THE BIDDER'S EMPLOYEE, IN A NOTARIZED STATEMENT DATED FEBRUARY 14, 1956, WE HAVE NO ALTERNATIVE BUT TO ACCEPT THE GOVERNMENT'S RECORDS IN THE MATTER.

ON THE SHOWING NOW MADE THAT THE AMENDMENTS IN FACT WERE MATERIAL AND WERE NOT RECEIVED WE WILL NOT FURTHER QUESTION THE ADMINISTRATIVE ACTION TAKEN IN REJECTING THE LOW BID OF ATLANTIC SEABOARD INDUSTRIES, INC. WE STRONGLY FEEL, HOWEVER, THAT THE IRREGULAR PROCUREMENT AND REPORTING PROCEDURES FOLLOWED IN THIS CASE ARE DESERVING OF YOUR CONSIDERATION IN ORDER THAT PROPER ADMINISTRATIVE STEPS MAY BE TAKEN TO AVOID RECURRENCE OF A SIMILAR SITUATION.