B-175965, NOV 16, 1972

B-175965, NOV 16, 1972

BID PROTEST - CHANGE IN BID OPENING DATE - BUYING IN - DELIVERY REQUIREMENTS DECISION DENYING THE PROTEST OF GRANITE STATE MACHINERY COMPANY, INC., AGAINST THE PROPOSED AWARD OF A CONTRACT TO AINSLIE CORPORATION UNDER AN IFB ISSUED BY THE NAVAL SHIP SYSTEMS COMMAND FOR RADAR FIELD CHANGE KITS WITH ASSOCIATED DATA AND OPTIONAL MAINTENANCE REPAIR PARTS. THE RECORD DOES NOT INDICATE THAT GRANITE WAS DENIED THE OPPORTUNITY TO RESUBMIT A BID AFTER THE ORIGINAL BID OPENING DATE NOR THAT THE CHANGE IN THE OPENING DATE WAS IN VIOLATION OF ASPR 2-208(A) NOR THAT AINSLIE WAS "BUYING IN" BY VIRTUE OF ITS LOW BID UNDER ASPR 1-311, NOR THAT GRANITE WAS THE ONLY FIRM WHICH COULD MEET THE SOLICITATION'S DELIVERY REQUIREMENTS.

TO GRANITE STATE MACHINERY COMPANY, INCORPORATED:

REFERENCE IS MADE TO THE TELEGRAM OF MAY 15, 1972, AND LETTERS OF MAY 23 AND JULY 25, 1972, PROTESTING AGAINST THE PROPOSED AWARD OF A CONTRACT TO ANOTHER CONCERN UNDER INVITATION FOR BIDS NO. N00024-72-B 3391, ISSUED ON MARCH 29, 1972, BY THE NAVAL SHIP SYSTEMS COMMAND, FOR A QUANTITY OF RADAR FIELD CHANGE KITS WITH ASSOCIATED DATA AND OPTIONAL MAINTENANCE REPAIR PARTS.

THE IFB STATED ON PAGE 13 THAT CERTAIN MICROFILMS, BULLETINS AND ONE UNMODIFIED VERSION OF THE SPECIFIED ANTENNA WILL BE AVAILABLE FOR EXAMINATION AT CERTAIN DESIGNATED LOCATIONS UPON PRESENTATION OF A COPY OF THE SOLICITATION DURING THE PERIOD ALLOWED FOR THE SUBMISSION OF OFFERS. SINCE GRANITE STATE WAS THE PREVIOUS SUPPLIER OF THE KITS THE IFB PROVIDED THAT THE GOVERNMENT WILL WAIVE FIRST ARTICLE AND DATA REQUIREMENTS FOR GRANITE STATE BUT NOT FOR ANY OTHER OFFEROR.

THIS WAS A MULTI-YEAR PROCUREMENT. ALTERNATE A WAS FOR THE SINGLE YEAR REQUIREMENT OF 50 UNITS FOR FISCAL YEAR 1972 AND ALTERNATE B WAS FOR THE MULTI-YEAR REQUIREMENT OF 50 UNITS IN FISCAL YEAR 1972 AND 50 UNITS IN FISCAL YEAR 1973. THE IFB STATED THAT BIDS COULD BE SUBMITTED UNDER ALTERNATE A ALONE OR UNDER BOTH ALTERNATES A AND B.

THE IFB AS AMENDED ESTABLISHED THE BID OPENING AT 2:00 P.M., MAY 5, 1972. NAVY REPORTS THAT ON THE MORNING OF MAY 5, 1972, A REPRESENTATIVE OF OKAW INDUSTRIES, INCORPORATED, A PROSPECTIVE CONTRACTOR, PROTESTED THAT THE EQUIPMENT MODEL AND THE MICROFILM REELS REFERENCE IN THE SOLICITATION WHICH IT HAD REQUESTED TO EXAMINE HAD NOT BEEN MADE AVAILABLE TO IT AS SPECIFIED. NAVY'S REPORT ELABORATES ON THIS TO STATE THAT THE REASON THE MODEL EQUIPMENT AND MICROFILM HAD NOT BEEN MADE AVAILABLE AT THE PLACE DESIGNATED IN THE IFB WAS THAT THE MODEL AND MICROFILM HAD THROUGH ERROR BEEN RETURNED TO THE CUSTODIAN. THE NAVY CONTRACT NEGOTIATOR TELEPHONED GRANITE STATE AND ALL OTHER CONCERNS EXPECTED TO SUBMIT BIDS PRIOR TO 2:00 P.M. ON MAY 5, TO ADVISE THAT THE BID OPENING WAS BEING EXTENDED TO MAY 12, 1972. A TELEGRAM CONFIRMING THE EXTENDED BID OPENING DATE WAS SENT TO ALL OF THE 108 CONCERNS SOLICITED AT ABOUT 4:00 P.M. ON MAY 5. TWO BIDS, ONE FROM AINSLIE CORPORATION AND ONE FROM GRANITE STATE WERE RECEIVED PRIOR TO 2:00 P.M. ON MAY 5 AND WERE PLACED IN A LOCKED BID BOX PROVIDED BY THE GOVERNMENT. THESE BIDS WERE LEFT IN THIS BOX UNTIL MAY 12.

BIDS WERE OPENED ON MAY 12. AFTER MAKING THE COMPARISON OF ALTERNATE A AND ALTERNATE B CONTRACT PRICES, AS PROVIDED ON PAGE 17 OF THE SOLICITATION, IT WAS DETERMINED THAT THE AWARD SHOULD BE MADE ON THE BASIS OF ALTERNATE B, THE MULTI-YEAR BUY. THE FIVE MULTI-YEAR BIDS RECEIVED ARE AS FOLLOWS:

MULTI-YEAR PRICES

BIDDER OFFER A OFFER B DISCOUNT

(WITHOUT (WITH

FIRST ARTICLE) FIRST ARTICLE)

AINSLIE $3,497 1/8 % 20 DAYS

CHU ASSOCIATES, INC.

(CHU) $4,952

GRANITE STATE $4,200

OKAW $5,2231/2 % 10 DAYS

1/4 % 20 DAYS

SIGMA-THREE SYSTEMS, INC.

(SIGMA-THREE) $9,220

THE PROCURING ACTIVITY PROPOSES TO MAKE AWARD TO AINSLIE AS THE LOW BIDDER AND YOU HAVE PROTESTED AGAINST THIS PROPOSED AWARD.

YOU HAVE MADE SEVERAL CONTENTIONS WITH RESPECT TO EXTENDING THE BID OPENING. FIRST, YOU CONTEND THAT THE BID OPENING WAS EXTENDED FOR THE SOLE PURPOSE OF PERMITTING ANOTHER BIDDER TIME TO SUBMIT A BID. SECOND, THAT IT WAS IMPOSSIBLE TO NOTIFY ALL OF THE 108 CONCERNS SOLICITED OF THE EXTENSION PRIOR TO THE 2:00 P.M. SCHEDULED OPENING ON MAY 5 AND THAT, THEREFORE, THERE WAS A VIOLATION OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-208(A) WHICH REQUIRES THAT AN AMENDMENT BE ISSUED BEFORE THE SCHEDULED BID OPENING. THIRD, THAT AFTER GRANITE STATE WAS INFORMED OF THE EXTENDED BID OPENING IT ATTEMPTED TO RETRIEVE ITS BID BUT THIS OPPORTUNITY WAS DENIED BY THE PROCURING ACTIVITY. FOR THESE REASONS YOU URGE THAT THE SOLICITATION SHOULD BE CANCELLED.

THE BID OPENING WAS EXTENDED TO GIVE OKAW THE OPPORTUNITY TO EXAMINE THE MODEL EQUIPMENT AND MICROFILM. EVEN IF IT IS CONCEDED THAT THERE MIGHT HAVE BEEN A BASIS FOR CONCLUDING THAT OKAW ACTED IN AN UNTIMELY MANNER IN WAITING UNTIL THE MORNING OF MAY 5 TO NOTIFY THE CONTRACT NEGOTIATOR THAT THE MODEL WAS NOT AVAILABLE FOR EXAMINATION, THERE IS STILL NO BASIS TO ESTABLISH THAT FAVORITISM INFLUENCED THE PROCURING ACTIVITY'S DECISION TO EXTEND THE BID OPENING.

THE RECORD INDICATES THAT THE PROCURING ACTIVITY MADE EVERY EFFORT TO ORALLY NOTIFY THOSE CONCERNS EXPECTED TO BID OF THE DECISION TO EXTEND THE BID OPENING; THAT THIS ORAL ADVICE WAS GIVEN PRIOR TO THE BID OPENING TIME THAT HAD BEEN SCHEDULED AT 2:00 P.M. ON MAY 5; THAT GRANITE STATE WAS IN FACT SO ADVISED, AND THAT THIS WAS THEN FOLLOWED BY THE WRITTEN TELEGRAPHIC CONFIRMATION SENT TO ALL CONCERNS SOLICITED. IN THIS CONNECTION, NAVY'S REPORT STATES THAT GRANITE STATE DID NOT MAKE ANY REQUEST FOR RETURN OF THE BID IT SUBMITTED ON MAY 5, ALTHOUGH IT HAD BEEN DULY NOTIFIED OF THE CHANGE IN THE BID OPENING DATE. BASED ON THE RECORD, WE CANNOT CONCLUDE THAT GRANITE WAS DENIED THE OPPORTUNITY TO SUBMIT A BID AFTER MAY 5, 1972, OR THAT THE CHANGE IN THE MAY 5 BID OPENING DATE WAS ISSUED AFTER THE 2:00 P.M. SCHEDULED TIME OF BID OPENING IN VIOLATION OF ASPR 2-208(A).

THE NEXT CONTENTION IS THAT THE PRICE IN AINSLIE'S BID INDICATES THAT THIS BIDDER IS "BUYING IN" WHICH IS A DISFAVORED PRACTICE UNDER ASPR 1 311.

"BUYING IN" IS DEFINED IN ASPR 1-311 AS THE PRACTICE OF ATTEMPTING TO OBTAIN A CONTRACT AWARD BY KNOWINGLY OFFERING A PRICE OR COST ESTIMATE LESS THAN THE ANTICIPATED COSTS WITH THE EXPECTATION OF EITHER (I) INCREASING THE CONTRACT PRICE OR ESTIMATED COST DURING THE PERIOD OF PERFORMANCE THROUGH CHANGE ORDERS OR OTHER MEANS OR (II) RECEIVING FUTURE "FOLLOW-ON" CONTRACTS AT PRICES HIGH ENOUGH TO RECOVER ANY LOSSES ON THE ORIGINAL "BUY IN" CONTRACT. THE REGULATION THEN PROVIDES THAT SUCH A PRACTICE IS NOT FAVORED BY THE DEPARTMENT OF DEFENSE AND THAT WHERE THERE IS REASON TO BELIEVE THAT "BUYING IN" HAS OCCURRED, CONTRACTING OFFICERS SHALL ASSURE THAT AMOUNTS EXCLUDED FROM THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE PRICING OF CHANGE ORDERS OR IN FOLLOW-ON PROCUREMENTS SUBJECT TO PRICE ANALYSIS.

BY LETTER OF JUNE 8, 1972, TO NAVY, AINSLIE HAS CONFIRMED THAT ITS BID PRICE, WHILE COMPETITIVE, WAS REASONABLE, AND THAT THERE WAS NO "BUYING IN." NAVY AGREES WITH AINSLIE. ALSO, NAVY ADVISES IT IS COGNIZANT OF THE TECHNIQUES SPECIFIED IN ASPR 1-311 TO AVOID THE POSSIBLE ADVERSE EFFECTS WHERE A "BUY IN" IS BELIEVED TO EXIST. WE DO NOT FIND THAT THE RECORD SUPPORTS YOUR CONTENTION OF A "BUY IN."

FINALLY, YOU CONTEND THAT SINCE GRANITE STATE WOULD BE THE ONLY CONCERN WHICH WOULD QUALIFY FOR WAIVER OF FIRST ARTICLE TESTING AS THE PRIOR PRODUCER, GRANITE STATE SHOULD RECEIVE THE AWARD AS THE PREFERRED QUALIFIED SOURCE WHICH CAN MEET NAVY'S REQUIREMENTS FOR IMMEDIATE DELIVERY OF ANTENNAS.

NAVY'S ADVICE IS THAT THE IFB WHICH PROVIDES FOR FIRST ARTICLE TESTING IS NOT INCONSISTENT WITH NAVY'S ANTICIPATED REQUIREMENTS FOR DELIVERY OF THE ANTENNAS. WE MUST AGREE WITH NAVY'S POSITION THAT IT IS BEST QUALIFIED TO DETERMINE ITS PROJECTED DELIVERY REQUIREMENTS AS REFLECTED IN THE IFB. YOUR BELIEF THAT NAVY MAY NEED THE ANTENNAS SOONER THAN EXPECTED WOULD NOT BE A BASIS FOR REJECTING AINSLIE'S LOW RESPONSIVE BID IN FAVOR OF A SOLE- SOURCE AWARD TO GRANITE STATE.

FOR THESE REASONS YOUR PROTEST IS DENIED.