B-160004, OCT. 17, 1966

B-160004, OCT. 17, 1966

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

WE REFER TO A LETTER OF SEPTEMBER 2, 1966, DSAH-G, FROM THE ASSISTANT COUNSEL, DEFENSE SUPPLY AGENCY, SUBMITTING FOR OUR CONSIDERATION THE PROTEST OF F. W. FORD COMPANY, PHILADELPHIA, PENNSYLVANIA, AGAINST THE REJECTION OF ITS OFFER ON REQUEST FOR QUOTATIONS DSA 100-NEG-2908.

THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC), PHILADELPHIA, PENNSYLVANIA, ISSUED THE SUBJECT REQUEST FOR QUOTATIONS (DATED JUNE 3, 1966) FOR THE EXTERIOR PAINTING OF CERTAIN BUILDINGS AT THE INSTALLATION. A CONTRACT FOR THIS WORK WAS NEGOTIATED PURSUANT TO 10 U.S.C. 230 (A) (2) WHICH PROVIDES THAT A CONTRACT MAY BE NEGOTIATED WHEN THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING. A PURCHASE REQUEST AND COMMITMENT DATED MAY 27, 1966, WAS ISSUED FOR THE PAINTING WORK. APPARENTLY AN ADVERTISED PROCUREMENT WAS CONTEMPLATED, FOR ON THIS PURCHASE REQUEST FORM WAS TYPED THE NUMBER OF DAYS (10 CALENDAR DAYS) NECESSARY FOR ADVERTISING. THIS WAS SUBSEQUENTLY CROSSED OUT AND THE PHRASE "PRIORITY - 06" WAS HANDWRITTEN ON THE FORM. THE CONTRACTING OFFICER ISSUED A DETERMINATION AND FINDINGS DATED MAY 31, 1966. IT WAS STATED THEREIN THAT THE PURCHASE REQUEST CITED AN ISSUE PRIORITY DESIGNATOR OF 06, HOWEVER, THE SPECIFIC CIRCUMSTANCES TO JUSTIFY NEGOTIATION WERE NOT SET FORTH. THIS, ON ITS FACE, IS IN ACCORDANCE WITH ASPR 3-202.3 WHICH PROVIDES THAT THE SPECIFIC CIRCUMSTANCES TO JUSTIFY NEGOTIATING A CONTRACT NEED NOT BE SET FORTH IN THE DETERMINATION AND FINDINGS WHEN A PURCHASE REQUEST CITES AN ISSUE PRIORITY DESIGNATOR 1 THROUGH 6.

THE DPSC ENGINEER ISSUED A DSA DISPOSITION FORM DATED JUNE 1, 1966, ADDRESSED TO THE CONTRACTING OFFICER IN THIS CASE, STATING: (1) THAT THE PAINTING MUST BE ACCOMPLISHED AS EXPEDITIOUSLY AS POSSIBLE IN ORDER TO PREVENT FURTHER DETERIORATION OF SURFACES, AND (2) THAT RELOCATION OF SEVERAL ACTIVITIES PENDING IN THE FUTURE REQUIRE THAT PAINTING BE ACCOMPLISHED IN ORDER TO PREVENT INTERFERENCE WITH THESE ACTIVITIES IN THEIR NEW LOCATIONS. WE NOTE THAT THIS JUSTIFICATION FOR "PUBLIC EXIGENCY" WAS MADE AFTER THE CONTRACTING OFFICER ISSUED HIS DETERMINATION AND FINDINGS MENTIONED ABOVE.

A REVISED REQUEST FOR QUOTATIONS SPECIFIED JUNE 14, 1966, AS THE CLOSING DATE FOR RECEIPT OF ALL OFFERS. FOUR OFFERS WERE RECEIVED WITH THE PROTESTANT F. W. FORD COMPANY SUBMITTING THE LOWEST QUOTATION OF $22,496. ON THE REQUEST FOR QUOTATIONS, STANDARD FORM 18, THE PROTESTANT REPRESENTED THAT HE WAS AN "INDIVIDUAL," AND SIGNED THE FORM AS "FRANK W. FORD OWNER.' THIS WAS ACCOMPANIED BY LETTER ON THE LETTERHEAD OF "F. W. FORD CO.' AND SIGNED BY "FRANK W. FORD" UNDER ,F. W. FORD COMPANY.' BID BOND WAS RECEIVED WITH THE FORD QUOTATION SHOWING AS PRINCIPAL "FRANK W. FORD CO., INC.' AND INDICATING THE TYPE OF ORGANIZATION AS A "CORPORATION" INCORPORATED IN THE STATE OF PENNSYLVANIA. THE BOND WAS SIGNED BY "FRANK W. FORD" AS PRINCIPAL WITH TITLE SHOWN AS ,PRESIDENT.' THE DPSC OFFICE OF COUNSEL AND THE CONTRACTING OFFICER RESPECTIVELY DETERMINED THAT THE BOND WAS UNACCEPTABLE BECAUSE THE PRINCIPAL ON THE BOND WAS DIFFERENT FROM THE NAME OF THE OFFEROR, AND THEREFORE THE OFFER COULD NOT BE CONSIDERED FOR AWARD.

AWARD WAS MADE JUNE 30, 1966, TO THE SECOND LOW OFFEROR, NURATORE COMPANY, INCORPORATED, PHILADELPHIA, PENNSYLVANIA, AT A PRICE OF $23,817. "NOTICE TO PROCEED" WAS ISSUED JULY 19, 1966, AND THE WORK COMMENCED JULY 20, 1966. WE HAVE BEEN INFORMALLY ADVISED BY THE ASSISTANT COUNSEL'S OFFICE THAT THE WORK AT THE INSTALLATION HAS BEEN COMPLETED.

THE QUESTION PRESENTED IS WHETHER THE QUOTATION OF FRANK W. FORD SHOULD HAVE BEEN DISREGARDED MERELY BECAUSE OF A DEFECT IN THE BID BOND WHICH MIGHT HAVE BEEN CURED DURING THE CONDUCT OF NEGOTIATIONS. SINCE PERFORMANCE UNDER THE CONTRACT HAS ALREADY BEEN COMPLETED THE QUESTION IS NOW ACADEMIC; HOWEVER, IT IS THE OPINION OF THIS OFFICE THAT IN A NEGOTIATED PROCUREMENT THE RULE SHOULD BE THAT WHERE THERE IS A FAILURE TO SUBMIT A PROPER BID BOND DUE TO AN INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT BEARING UPON THE OFFEROR'S ABILITY OR INABILITY TO OBTAIN THE BOND BECAUSE OF FINANCIAL OR RELATED REASONS, AN OPPORTUNITY SHOULD BE GIVEN THE PROPONENT TO CORRECT THE DEFECT IF THE RESULT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT.

UNDER THE PROVISIONS OF 10 U.S.C. 2310 (B) A WRITTEN FINDING IS REQUIRED TO SUPPORT A DECISION TO NEGOTIATE A CONTRACT UNDER 10 U.S.C. 2304 (A) (2). THAT FINDING MUST SET OUT FACTS AND CIRCUMSTANCES THAT "CLEARLY AND CONVINCINGLY ESTABLISH" THAT FORMAL ADVERTISING WOULD NOT HAVE BEEN FEASIBLE AND PRACTICABLE. THE IMPLEMENTING ASPR REGULATIONS STATE (ASPR 3 -202.3) THAT EVERY CONTRACT NEGOTIATED UNDER THE AUTHORITY OF 10 U.S.C. 2304 (A) (2) SHALL BE ACCOMPANIED WITH A DETERMINATION AND FINDINGS JUSTIFYING ITS USE:

"* * * EXCEPT THAT IN THE CASE OF A CONTRACT RESULTING FROM A PURCHASE REQUEST CITING AN ISSUE PRIORITY DESIGNATOR 1 THROUGH 6, THE DETERMINATION AND FINDINGS NEED ONLY CITE THE DESIGNATOR AS JUSTIFICATION. * * *.' THE "FINDINGS" IN THE PRESENT CASE, SO FAR AS MATERIAL TO THE QUESTION BEFORE US, ARE AS FOLLOWS:

"THE PURCHASE REQUEST CITES AN ISSUE PRIORITY DESIGNATOR OF 06.' SECTION 2310 (B) OF TITLE 10, U.S.C. PROVIDES THAT A FINDING SUPPORTING A DECISION TO NEGOTIATE UNDER 10 U.S.C. 2304 (A) (2) IS FINAL.

ADMITTEDLY, THE PURCHASE REQUEST INVOLVED DID CITE AN ISSUE PRIORITY DESIGNATOR OF 06, AND WE DO NOT QUESTION THE FINDING TO THAT EFFECT. NOR DO WE QUESTION THE VIEW OF THE DEPARTMENT OF DEFENSE (AS EXPRESSED IN ASPR 3-202.3) THAT CIRCUMSTANCES WHICH WARRANT THE ISSUANCE OF A PRIORITY DESIGNATOR 1 THROUGH 6 CONSTITUTE A "PUBLIC EXIGENCY" SUFFICIENT TO JUSTIFY THE USE OF NEGOTIATION UNDER 10 U.S.C. 2304 (A) (2).

HOWEVER, THE PRESENT CASE DEMONSTRATES THAT THE MERE CITATION OF A PRIORITY DESIGNATOR 06 IN A PURCHASE REQUEST DOES NOT ESTABLISH THAT THE ACTUAL CIRCUMSTANCES OF THE PROCUREMENT JUSTIFY ITS ISSUANCE. STANDARDS FOR THE ISSUANCE OF PRIORITY DESIGNATORS ARE SET OUT IN THE UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS), DOD DIRECTIVES AND INSTRUCTIONS NO. 4410.6. UNDER THOSE STANDARDS THE PRESENT PROCUREMENT DID NOT QUALIFY FOR A PRIORITY DESIGNATOR OF 1 THROUGH 6, A FACT WHICH WOULD HAVE BEEN APPARENT TO THE CONTRACTING OFFICER UPON A READING OF THE UMMIPS INSTRUCTIONS.

IN THIS SITUATION, WE MUST CONCLUDE THAT THE DETERMINATION AND FINDINGS DID NOT JUSTIFY THE USE OF NEGOTIATION RATHER THAN ADVERTISING. THE RECORD BEFORE US INDICATES THAT THE PRIMARY REASON FOR THE URGENCY IN AWARDING A CONTRACT WAS THE IMMINENT EXPIRATION OF FISCAL YEAR 1966 FUNDS, A REASON WHICH WE DO NOT CONSIDER A PUBLIC EXIGENCY UNDER 10 U.S.C. 2304 (A) (2). WHETHER THERE WERE OTHER CIRCUMSTANCES WHICH WOULD HAVE JUSTIFIED USE OF THE "PUBLIC EXIGENCY" EXCEPTION FOR NEGOTIATION, WE DO NOT KNOW.

SO FAR AS THE PARTICULAR PROCUREMENT IS CONCERNED, SINCE THE WORK HAS BEEN COMPLETED, NO FURTHER ACTION WILL BE TAKEN. WE NOTE THAT CORRECTIVE ACTION IS BEING TAKEN TO PREVENT ERRORS OF THIS NATURE IN THE FUTURE.