B-161486, OCT. 6, 1967

B-161486, OCT. 6, 1967

BIDS - NEGOTIATION - SMALL PURCHASES FROM QUALIFIED SOURCES DECISION TO CHICAGO TRANSPARENT, INC., CONCERNING DECISION OF JULY 14, 1967, DENYING PROTEST TO AWARD BY PUGET SOUND NAVAL SHIPYARD. CONTRACTING OFFICER WHO, INCIDENT TO THE SMALL PURCHASES NEGOTIATING AUTHORITY IN SECS. 3.603 AND 604.2 ASPR INVITED A REQUEST FOR PROPOSALS FROM A FIRM WHOSE PRODUCT ON BASIS OF SAMPLES FURNISHED UNDER ANOTHER PROCUREMENT WOULD NOT MEET REQUIREMENTS OF PRESENT PROCUREMENT MAY HAVE OVERLOOKED PROVISION REQUIRING SOLICITATION OF QUOTATIONS ONLY FROM "QUALIFIED SOURCES" SINCE THAT TERM IS CONSTRUED TO IMPART A PREDETERMINATION BY THE CONTRACTING OFFICER THAT THE PRODUCT NORMALLY SOLD BY THIS SOURCE MEETS THE GOVERNMENT REQUIREMENTS. HOWEVER IN ABSENCE OF ANY INDICATION OF BAD FAITH, SOLICITATION FROM FIRM NOT CONSIDERED QUALIFIED SOURCES IS NOT BASIS FOR QUESTIONING LEGALITY OF AWARD. NEVERTHELESS MATTER IS CALLED TO THE PROCURING DEPARTMENT TO PREVENT RECURRENCE OF SUCH SOLICITATION. MATTER OF WHETHER PRODUCT MEETS QUALITY STANDARDS IS FOR DETERMINATION AT TIME OF DELIVERY.

TO CHICAGO TRANSPARENT, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF INQUIRY DATED SEPTEMBER 9, 1967, AND TO YOUR LETTER OF JULY 17, 1967, CONCERNING OUR DECISION OF JULY 14, 1967, WHICH DENIED THE PROTEST OF YOUR COMPANY AGAINST AN AWARD OF A CONTRACT IN PART TO ETHYL CORPORATION, FREMONT, CALIFORNIA, AND IN PART TO DAVIDSON PRODUCTS COMPANY, SEATTLE, WASHINGTON, PURSUANT TO REQUEST FOR QUOTATIONS N00251-67-Q-7139, ISSUED BY THE PUGET SOUND NAVAL SHIPYARD, BREMERTON, WASHINGTON, ON FEBRUARY 13, 1967.

THE REQUESTS FOR QUOTATIONS CONCERNED PROCUREMENT OF SPECIFIED QUANTITIES OF "SLEEVES, POLYVINYLCHLORIDE OR POLYETHYLENE, TRANSPARENT, .008 INCH WALL, INDUSTRIAL COLOR NO. 501, GREEN (TO BE SAME AS ETHYL CORP.).'

OF THE THREE QUOTATIONS RECEIVED, YOURS WAS LOW ON ITEMS 1 AND 2. THE CONTRACTING OFFICER RELIED UPON SAMPLES PREVIOUSLY SUBMITTED BY CHICAGO TRANSPARENT, IN CONNECTION WITH ANOTHER PROCUREMENT IN DECIDING WHETHER THE PRODUCT OFFERED BY YOU WOULD MEET THE REQUIREMENTS OF THE INSTANT PROCUREMENT. ALTHOUGH THE RFQ DID NOT REVEAL WHAT WOULD BE PACKAGED IN THE SLEEVES, THE CONTRACTING OFFICER DETERMINED THAT CERTAIN STANDARDS OF COLOR AND TRANSPARENCY WOULD HAVE TO BE MET TO PERMIT READY IDENTIFICATION OF THE ITEMS TO BE PACKAGED IN THE SLEEVES WITHOUT OPENING THEM. YOUR PRIOR SAMPLES SHOWED THAT THE GREEN COLOR HAD A BLUISH-GREEN TINT AND THE YELLOW COLOR WAS A LIGHT RATHER THAN BRIGHT YELLOW, AND BOTH HAD AN OPAQUE QUALITY.

THE DECISION OF JULY 14, 1967, SETS FORTH THAT THE CONTRACT INVOLVED WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (3), AS THE AGGREGATE AMOUNT INVOLVED WAS NOT MORE THAN $2,500. THE DECISION ALSO REFERS TO THE GENERAL RULE THAT IN NEGOTIATED PROCUREMENTS AUTHORIZED BY STATUTE THE RULES OF FORMALLY ADVERTISED COMPETITIVE BIDDING ARE NOT APPLICABLE AND THE NEGOTIATING AUTHORITY MAY LEGALLY TAKE INTO CONSIDERATION ALL FACTORS DEEMED ESSENTIAL TO THE ACCOMPLISHMENT OF THE PARTICULAR PROCUREMENT, AND THAT THE CONTRACTING OFFICER HAS GREAT DISCRETION IN MAKING THE AWARD.

YOU REQUEST ANSWERS TO THE FOLLOWING QUESTIONS:

1. "WHY WERE WE INVITED TO BID, WHEN THERE WAS NO INTENT TO FAVOR US WITH AN AWARD IN THE EVENT OUR PRICE WAS LOWEST?

2. "HOW CAN A -PRE-DETERMINATION- BE MADE THAT WHAT WE INTENDED TO SUPPLY WOULD NOT MEET QUALITY STANDARDS? IS THIS NOT THE RESPONSIBILITY OF THE INSPECTOR, ON OUR PREMISES, IMMEDIATELY PRIOR TO SHIPMENT?

THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), SECTIONS 3.603 AND 604.2, ISSUED IN IMPLEMENTATION OF THE STATUTORY NEGOTIATING AUTHORITY FOR SMALL PURCHASES USED BY THE DEPARTMENT OF NAVY IN THIS PROCUREMENT, REQUIRE A REASONABLE SOLICITATION OF QUOTATIONS FROM QUALIFIED SOURCES TO ASSURE THAT THE PROCUREMENT IS TO THE ADVANTAGE OF THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, INCLUDING THE ADMINISTRATIVE COST OF THE PURCHASE. WE CONSTRUE THE USE OF THE TERM "QUALIFIED SOURCES" TO IMPART A PREDETERMINATION BY THE CONTRACTING OFFICER THAT THE PRODUCT NORMALLY SOLD BY THIS SOURCE MEETS THE GOVERNMENT'S REQUIREMENTS. WE THINK THE CONTRACTING OFFICER MAY HAVE OVERLOOKED THIS PROVISION IN SOLICITING QUOTATIONS. HOWEVER, WE DO NOT FIND ANY INDICATION OF BAD FAITH ON THE PART OF THE CONTRACTING OFFICER OR ANY JUSTIFICATION FOR QUESTIONING THE LEGALITY OF THE AWARDS MADE. WE ARE BRINGING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE NAVY TO PRECLUDE THE RECURRENCE OF SUCH CASES.

SO FAR AS CONCERNS THE "PREDETERMINATION" THAT YOUR PRODUCT WOULD NOT MEET QUALITY STANDARDS (OR THE INABILITY TO AFFIRMATIVELY DETERMINE THAT YOUR PRODUCT WOULD MEET QUALITY STANDARDS), ASPR 14-308 PROVIDES THAT, IN GENERAL, GOVERNMENT PROCUREMENT QUALITY ASSURANCE OF SMALL PURCHASES, SUCH AS HERE, IS MADE AT DELIVERY. HOWEVER, CONSIDERING THE LATITUDE GRANTED THE CONTRACTING OFFICER IN SELECTING SOURCES OF QUOTATIONS UNDER THE SMALL PURCHASE PROCEDURES, WE FIND NO BASIS TO QUESTION THE LEGALITY OF SUCH "PREDETERMINATION.' IF THE "PREDETERMINATION" IS TO BE MADE, HOWEVER, IT SHOULD RESULT IN NOT SOLICITING THE SOURCE.