B-195963 L/M, SEP 14, 1982

B-195963 L/M, SEP 14, 1982

PRECIS-UNAVAILABLE

JOHN C. STENNIS, UNITED STATES SENATE:

WE REFER TO YOUR LETTER DATED JULY 26, 1982, FORWARDING CORRESPONDENCE FROM UNIVERSAL INDUSTRIES CORPORATION (UNIVERSAL) FOR OUR REVIEW. UNIVERSAL STATES THAT THE NEDLOG COMPANY HAS FILED REPETITIOUS AND HARASSING PROTESTS WITH THE ARMY AND OUR OFFICE AGAINST THE PROPOSED AWARD OF CONTRACTS TO DISTRIBUTORS OF UNIVERSAL'S PRODUCT, A NONCARBONATED FOUNTAIN SYRUP CONTAINING FRUIT JUICES, COMMONLY REFERRED TO AS DONNYBROOK HJC (HIGH JUICE CONCENTRATE). UNIVERSAL ALSO STATES THAT NEDLOG'S PROTESTS HAVE ALL BEEN DENIED AND HAVE FORCED UNIVERSAL AND THE DISTRIBUTORS TO INCUR SUBSTANTIAL EXPENSES. UNIVERSAL HAS PROVIDED DOCUMENTS RELEVANT TO NEDLOG'S PROTESTS FILED SINCE MAY 1978. UNIVERSAL REQUESTS THAT OUR OFFICE INVESTIGATE NEDLOG'S CONTRACTING ACTIVITIES AND TRADE PRACTICES ASSOCIATED WITH PROCUREMENTS BY MILITARY INSTALLATIONS.

YOU REQUEST THAT WE REVIEW THE DOCUMENTS AND RESPOND TO THE PERTINENT ALLEGATIONS RAISED BY UNIVERSAL. YOU ALSO ASK WHETHER OUR POLICIES AND PROCEDURES FOR HANDLING BID PROTESTS ADEQUATELY PROTECT THE GOVERNMENT'S INTERESTS IN A PROMPT AND EFFICIENT PROCUREMENT PROCESS WHERE REPETITIVE AND POTENTIALLY FRIVOLOUS PROTESTS ARE FILED AND DENIED. YOU SUGGEST THAT WHERE SUCH FRIVOLOUS PROTESTS ARE FILED, SOME OF THE BURDEN OF PROVING AFFIRMATIVELY THE FACTS INVOLVED SHOULD BE SHIFTED FROM THE GOVERNMENT. YOU ALSO SUGGEST THAT WHERE PROTESTS ON THE SAME ISSUE ARE CONSISTENTLY DENIED BY DIFFERENT MILITARY INSTALLATIONS, IT WOULD SEEM PRUDENT THAT A MEANS BE AVAILABLE TO INFORM FIELD LOCATIONS OF THE REPETITIVE NATURE OF THE PROTESTS AND THE CONCERNS OF THE SUCCESSFUL BIDDER.

THE DOCUMENTS PROVIDED BY UNIVERSAL SHOW THAT SINCE MAY 1978 NEDLOG HAS FILED FOUR BID PROTESTS AGAINST AWARDS TO DISTRIBUTORS OF UNIVERSAL'S DONNYBROOK HJC PRODUCT. FIRST, IN MAY 1978, IN A PROTEST FILED WITH THE ARMY CONTRACTING OFFICER, NEDLOG OBJECTED TO THE AWARD OF A CONTRACT TO C&L ENTERPRISES (C&L), A DISTRIBUTOR OF UNIVERSAL'S PRODUCT, BY THE ARMY UNDER INVITATION FOR BIDS (IFB) NO. DABT31-78-B 0080 FOR DISPENSING EQUIPMENT AND NONCARBONATED BEVERAGES AT FORT LEONARD WOOD. NEDLOG CONTENDED THAT C&L'S EQUIPMENT WOULD NOT SATISFY THE ARMY'S SPECIFIED NEEDS, THAT C&L COULD NOT PERFORM AT THE BID PRICE, AND THAT UNIVERSAL'S PRODUCT DID NOT MEET THE IFB'S SPECIFICATIONS. IN APRIL 1979, THE ARMY CONTRACTING OFFICER DENIED NEDLOG'S PROTEST, EXPLAINING THAT C&L'S EQUIPMENT AND UNIVERSAL'S PRODUCT MET THE IFB'S SPECIFICATIONS AND THAT C&L WAS PERFORMING SATISFACTORILY.

SECOND, IN A PROTEST TO OUR OFFICE, NEDLOG OBJECTED TO THE AWARD OF A CONTRACT TO C&L UNDER IFB NO. DABT31-79-B-0139 ISSUED BY THE ARMY FOR DISPENSING EQUIPMENT AND BEVERAGES AT FORT LEONARD WOOD. NEDLOG RAISED THE SAME THREE CONTENTIONS THAT IT RAISED IN ITS 1978 PROTEST TO THE ARMY. OUR DECISION IN THE MATTER OF THE NEDLOG COMPANY, B-195963, JANUARY 10, 1980, 80-1 CPD 31, DENIED THE PROTEST IN PART AND DISMISSED IT IN PART. THE DECISION STATED THAT SINCE C&L TOOK NO EXCEPTIONS TO THE IFB'S SPECIFICATIONS, C&L WAS OBLIGATED TO PERFORM AS REQUIRED AT THE CONTRACT PRICE. THE BEVERAGES AND EQUIPMENT AS REQUIRED WAS A MATTER OF CONTRACT ADMINISTRATION, WHICH IS THE RESPONSIBILITY OF THE ARMY.

THIRD, IN A MARCH 1980 PROTEST FILED WITH THE CONTRACTING OFFICER, NEDLOG OBJECTED TO THE PROPOSED AWARD OF A CONTRACT TO DISPENSING SYSTEMS OF GEORGIA (DISPENSING), A DISTRIBUTOR OF UNIVERSAL'S PRODUCT, UNDER IFB NO. DABT10-80-B-0049 ISSUED BY THE ARMY FOR BEVERAGE DISPENSING SUPPLIES AND EQUIPMENT AT FORT BENNING. NEDLOG RAISED THE SAME OBJECTIONS AS RAISED IN THE TWO EARLIER PROTESTS. IN SEPTEMBER 1980, PRIOR TO RESOLUTION OF THE PROTEST, THE ARMY CANCELED THE IFB, EXPLAINING THAT THE PRODUCTS BEING PROCURED WERE NO LONGER NEEDED.

FOURTH, IN AUGUST 1981, NEDLOG FILED A PROTEST WITH THE CONTRACTING OFFICER OBJECTING TO THE PROPOSED AWARD OF A CONTRACT TO DISPENSING UNDER IFB NO. DABT48-81-B-0218 ISSUED BY THE ARMY FOR BEVERAGE DISPENSING SUPPLIES AND EQUIPMENT AT FORT JACKSON. NEDLOG CONTENDED THAT THE UNIVERSAL PRODUCT AND DISPENSING'S EQUIPMENT DID NOT MEET THE IFB'S SPECIFICATIONS. THE ARMY CONTRACTING OFFICER DENIED THE PROTEST.

THE DOCUMENTS PROVIDED BY UNIVERSAL ALSO SHOW THAT THE FEDERAL DRUG ADMINISTRATION (FDA) HAS INVESTIGATED UNIVERSAL IN RESPONSE TO COMPLAINTS CONCERNING UNIVERSAL'S PRODUCTS. UNIVERSAL IS ATTEMPTING TO IDENTIFY THE SOURCE OF THE COMPLAINTS AND UNIVERSAL HAS FILED AN EXTENSIVE AND DETAILED REQUEST WITH THE FDA UNDER THE FREEDOM OF INFORMATION ACT (FOIA) FOR INFORMATION ABOUT NEDLOG. FURTHER, UNIVERSAL HAS FILED A PRELIMINARY COMPLAINT WITH THE FEDERAL TRADE COMMISSION (FTC) ALLEGING UNFAIR TRADE PRACTICES AGAINST NEDLOG. THE FTC DISMISSED THE COMPLAINT ON THE GROUND THAT IT WAS A PRIVATE CONTROVERSY AND IT WOULD NOT BE IN THE PUBLIC INTEREST FOR THE FTC TO INITIATE AN INVESTIGATION. UNIVERSAL HAS REQUESTED THE FTC TO RECONSIDER THE DISMISSAL. IN ADDITION, UNIVERSAL HAS REQUESTED, UNDER FOIA, COPIES OF ALL CONTRACTS AT FORT MCCELLAN AWARDED TO NEDLOG ON A NONCOMPETITIVE BASIS. CONTRACTING ACTIVITIES AND TRADE PRACTICES ASSOCIATED WITH PROCUREMENTS BY MILITARY INSTALLATIONS. UNIVERSAL STATES THAT UNIVERSAL AND ITS DISTRIBUTORS HAVE INCURRED TREMENDOUS AND HAVE SUFFERED LOSSES BECAUSE SOLICITATIONS WERE CANCELED WHEN NEDLOG PROTESTED. UNIVERSAL CONTENDS THAT THE GOVERNMENT SEEMS MORE INTERESTED IN PROTECTING NEDLOG'S RIGHT TO PROTEST THAN IN PROTECTING UNIVERSAL'S AND THE DISTRIBUTORS' RIGHTS TO COMPETE FOR GOVERNMENT CONTRACTS. UNIVERSAL STATES THAT IT WANTS TO PROTECT ITS RIGHT TO COMPETE FOR GOVERNMENT CONTRACTS AND PREVENT FURTHER HARASSMENT BY NEDLOG.

OUR REVIEW OF THE DOCUMENTS PROVIDED BY UNIVERSAL AND THE DOCUMENTS SUBMITTED BY THE PARTIES IN CONNECTION WITH OUR JANUARY 10, 1980, DECISION REFLECTS THAT NEDLOG RAISED SIMILAR MATTERS IN EACH PROTEST, NAMELY: (1) UNIVERSAL'S DONNYBROOK HJC DOES NOT MEET THE ARMY'S NEEDS; (2) THE DISTRIBUTOR'S DISPENSING EQUIPMENT DOES NOT MEET THE ARMY'S NEEDS; AND (3) THE DISTRIBUTOR CANNOT PERFORM AT THE BID PRICE. CONCERNING THE FIRST TWO POINTS, WHEN A BIDDER OFFERS TO PERFORM THE EXACT THING CALLED FOR IN THE IFB, THE BID IS RESPONSIVE AND, UPON THE GOVERNMENT'S ACCEPTANCE OF THE BID, THE BIDDER IS LEGALLY OBLIGATED TO PERFORM AS SPECIFIED. COMP.GEN. 553 (1970). WHETHER THE PRODUCT OR EQUIPMENT DELIVERED BY THE CONTRACTOR MEETS THE CONTRACT REQUIREMENTS IS A MATTER OF CONTRACT ADMINISTRATION. SEE MRCA, INC., B-194275, AUGUST 8, 1979, 79-2 CPD 96. CONCERNING THE THIRD POINT, THE CONTRACTING OFFICER'S DETERMINATION THAT THE APPARENT LOW BIDDER CAN PERFORM AT THE BID PRICE IS A MATTER WHICH WE DO NOT REVIEW. YARDNEY ELECTRIC CORPORATION, 54 COMP.GEN. 509 (1974), 74-2 CPD 376. ACCORDINGLY, WHEN THESE BASES OF PROTEST ARE FILED BY A PROTESTER WITH OUR OFFICE, THE PROTEST CAN BE RESOLVED EXPEDITIOUSLY. YOU NOTE, HOWEVER, EVERY POTENTIAL CONTRACTOR MUST BE AFFORDED DUE PROCESS DURING THE SOLICITATION AND AWARD PROCESS. THUS, OUR VIEWS ARE PRESENTED WITH REGARD TO THE RECORD OF NEDLOG'S PROTESTS AS SET FORTH IN THE DOCUMENTS PROVIDED BY UNIVERSAL AND ANY FUTURE PROTEST FILED BY NEDLOG OR ANY OTHER BIDDER MUST BE JUDGED ON ITS MERITS.

REGARDING UNIVERSAL'S REQUEST THAT OUR OFFICE INVESTIGATE NEDLOG'S TRADE PRACTICES, WE NOTE THAT UNIVERSAL FILED A SIMILAR REQUEST WITH THE FTC. THE FTC DECLINED TO DO SO ON THE BASIS THAT THE PUBLIC INTEREST WOULD NOT BE SERVED BY SUCH AN INVESTIGATION. WHILE UNIVERSAL HAS ASKED FTC TO RECONSIDER ITS POSITION, WE SHARE FTC'S VIEW THAT THE COMPLAINT INVOLVES A PRIVATE MATTER AND THAT AN INVESTIGATION BY OUR OFFICE WOULD NOT BE IN THE PUBLIC INTEREST.

REGARDING YOUR SECOND QUESTION, WE WILL DENY OR DISMISS A PROTEST ON ITS FACE IF IT IS CLEAR FROM THE PROTESTER'S SUBMISSION THAT THE PROTEST IS WITHOUT MERIT OR SHOULD BE DISMISSED. SPECIFICALLY, IN THE CASE OF A REPETITIOUS PROTEST, WE WILL TRY TO AVOID DUPLICATIVE CASE DEVELOPMENT. FOR EXAMPLE, WE DECIDED THAT ONE FIRM'S PROTESTS - BASED ON ALLEGATIONS WHICH WERE SUBSTANTIALLY THE SAME AS THOSE WHICH HAD BEEN EITHER PREVIOUSLY CONSIDERED AND DENIED OR INVESTIGATED AND FOUND TO BE WITHOUT MERIT - WOULD NO LONGER BE CONSIDERED. WE ADVISED THAT FIRM AND THE PROCURING AGENCY THAT OUR OFFICE WOULD NOT ADVISE THE PROCURING AGENCY OF A PROTEST BY THAT FIRM AND WE WOULD NOT REQUEST A REPORT FROM THE PROCURING AGENCY UNLESS THE PROTESTER'S INITIAL SUBMISSION SHOWS IN SPECIFIC DETAIL THAT THE PROTEST CONCERNS A CONTENTION WHICH WE HAVE NOT PREVIOUSLY CONSIDERED AND DENIED. WE WOULD HAVE NO OBJECTION IF PROCURING AGENCIES (AND THEIR FIELD LOCATIONS) HANDLED REPETITIOUS PROTESTS IN A SIMILAR MANNER.

IN OUR VIEW, THIS MANNER OF HANDLING WHAT APPEAR TO BE REPETITIOUS PROTESTS MINIMIZES DISRUPTION IN THE PROCUREMENT PROCESS AND PROTECTS THE INTERESTS OF POTENTIAL CONTRACTORS IN OBTAINING A FAIR HEARING OF THEIR LEGITIMATE PROTESTS. OF COURSE, AS NOTED ABOVE, THERE HAVE BEEN ONLY FOUR PROTESTS IN 4 YEARS BY NEDLOG CONCERNING UNIVERSAL AND ONLY ONE OF THOSE WAS TO OUR OFFICE.