B-159566, NOV. 7, 1966

B-159566, NOV. 7, 1966

TO RANDALL MANUFACTURING COMPANY, INC.:

WE REFER TO YOUR PROTEST DATED JUNE 28, 1966, AGAINST AN AWARD TO LOGEL AND HOUCHIN, OAKLAND, CALIFORNIA, UNDER INVITATION FOR BIDS NO. AMC/A/-18- 035-66-833, ISSUED BY THE ARMY MATERIEL COMMAND, EDGEWOOD ARSENAL, MARYLAND.

THE ABOVE-REFERENCED INVITATION SOLICITED BIDS FOR 134 DECONTAMINATING MACHINES ON AN F.O.B. ORIGIN BASIS. THE MARINE CORPS ORDERED 94 MACHINES, THE NAVY REQUESTING THE REMAINING 40. THE IFB NOTED AN ISSUE PRIORITY DESIGNATOR OF 02 AND FURTHER NOTED THAT THIS PROCUREMENT WOULD BE IN SUPPORT OF TROOPS IN SOUTHEAST ASIA. THE BIDS WERE OPENED ON JUNE 6, 1966, FOUR FIRMS HAVING SUBMITTED BIDS IN RESPONSE TO THE INVITATION. THE BIDS, AFTER FREIGHT EVALUATION, WERE AS OLLOWS:

(40) (94)

CONTRACTOR ITEM NO. 1 ITEM NO. 2

LOGEL AND HOUCHIN $136,901.61 $341,024.53

DAVEY COMPRESSOR CO. 139,631.83 354,306.14

GRAY COMPANY 140,180.56 352,043.91

RANDALL MFG. CO., INC. 141,121.23 356,562.14

ON THE SAME DAY THE BIDS WERE OPENED RANDALL MANUFACTURING COMPANY PROTESTED BY LETTER TO THE CONTRACTING OFFICER AGAINST AN AWARD TO LOGEL AND HOUCHIN. BY RETURN LETTER DATED JUNE 28, 1966, THE CONTRACTING OFFICER, AFTER CONSULTATION WITH REPRESENTATIVES FROM RANDALL AND FROM THE CONTRACT SPECIALIST, DENIED RANDALL'S PROTEST, AND THE CONTRACT WAS AWARDED TO LOGEL AND HOUCHIN ON JUNE 28, 1966. THEREAFTER, ON THE SAME DAY, RANDALL SUBMITTED ITS PROTEST TO THE GENERAL ACCOUNTING OFFICE BASED ON THREE MAIN CONTENTIONS; THESE WILL BE CONSIDERED SEPARATELY.

FIRST, RANDALL MANUFACTURING COMPANY CLAIMS THAT IT WAS UNFAIR AND IMPROPER TO CONSIDER TRANSPORTATION COSTS AS ONE OF THE EVALUATION FACTORS SINCE THE DESTINATION FOR 94 OF THE 134 UNITS WAS BARSTOW, CALIFORNIA, WHICH PLACED IT AS WELL AS TWO OTHER BIDDERS AT A DISTINCT DISADVANTAGE IN HAVING TO PAY TRANSPORTATION COSTS ACROSS COUNTRY WHEREAS LOGEL AND HOUCHIN, LOCATED IN CALIFORNIA, DOES NOT HAVE THIS EXPENSE. IN THIS REGARD, THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), SEC. 1-1302.2 REQUIRES THAT, ABSENT VALID REASONS TO THE CONTRARY, PURCHASES OF SUPPLIES ORIGINATING WITHIN THE UNITED STATES FOR ULTIMATE DELIVERY OUTSIDE OF THE UNITED STATES SHALL BE MADE ON THE BASIS OF DELIVERY F.O.B. ORIGIN AND, WHEN THIS IS THE CASE, ASPR SEC. 2-407.5 (A) REQUIRES THAT TRANSPORTATION COSTS TO THE DESIGNATED POINT OF DESTINATION MUST BE CONSIDERED IN DETERMINING THE LOWEST COST TO THE GOVERNMENT.

THE OBVIOUS QUESTION THEN IS, WERE THERE VALID REASONS FOR SOLICITING BIDS ON OTHER THAN AN F.O.B. ORIGIN BASIS? WE DO NOT THINK SO. THE MARINE CORPS DESIGNATED BARSTOW AS THE POINT OF DESTINATION FOR ITS 94 UNITS BECAUSE IT IS ITS MAIN SUPPLY DEPOT. WE HAVE BEEN INFORMED BY THE MARINE CORPS THAT IT WAS NOT POSSIBLE AT THE TIME OF THE ISSUANCE OF ITS PURCHASE REQUEST TO THE BE CERTAIN WHETHER THESE MACHINES WOULD GO DIRECTLY TO SOUTHEAST ASIA OR BE STORED TEMPORARILY AT BARSTOW BEFORE BEING SHIPPED TO THEIR POINTS OF ULTIMATE DESTINATION. IN VIEW OF THIS UNCERTAIN STATE OF AFFAIRS, THE MARINE CORPS DETERMINED IT WOULD BE BEST TO HAVE THE MACHINES SHIPPED TO BARSTOW WITH THE CONDITION THAT IF THEY WERE DESPERATELY NEEDED PRIOR TO SHIPMENT THERE, THE DESTINATION WOULD BE CHANGED AND THEY WOULD BE SHIPPED DIRECTLY FROM THE MANUFACTURER'S PLANT TO THEIR ULTIMATE DESTINATION. THE ARMY MATERIEL COMMAND AT EDGEWOOD ARSENAL CONSIDERED THE MARINE CORPS TRANSPORTATION REQUIREMENTS AND, FINDING NO REASONS TO DISAGREE WITH THEM, DESIGNATED BARSTOW, CALIFORNIA, AS THE POINT OF DESTINATION WITHIN THE UNITED STATES. IN REGARD TO THE OTHER 40 UNITS ORDERED BY THE NAVY, SINCE THE GREAT MAJORITY WERE DESTINED FOR THE PACIFIC AREA, AMC FELT IT WOULD BE WISE TO CONSOLIDATE THE PROCUREMENT AND HAVE ALL 134 UNITS TRANSPORTED TO BARSTOW. IN VIEW OF THESE FACTORS WE CANNOT SAY IT WAS IMPROPER TO REQUIRE SHIPMENT TO BARSTOW.

RANDALL'S SECOND CONTENTION IS THAT IT WAS PREJUDICED IN THE BIDDING IN THAT THE TECHNICAL DATA PACKAGE WAS INCOMPLETE. SPECIFICALLY, RANDALL CLAIMS THAT IT ALONE HAD SPECIAL KNOWLEDGE (BECAUSE OF ITS CURRENT CONTRACT) OF SEVERAL ENGINEERING CHANGES (EO-S) NOT YET ISSUED BUT WHICH VITALLY AFFECTED THE WORKABILITY OF THE PRODUCT AND, AS A CONSCIENTIOUS BIDDER, INCLUDED THESE IN ITS BID, WHEREAS THE OTHER BIDDERS, HAVING NO SUCH SPECIAL KNOWLEDGE, DID NOT AND COULD NOT INCLUDE THEM IN THEIR BIDS. IT SHOULD BE NOTED HERE THAT ALL EO'S THROUGH NO. 586-128 WERE INCLUDED IN THE IFB AND RANDALL, THEREFORE, CANNOT CLAIM TO HAVE BEEN PREJUDICED IN REGARD TO THESE BECAUSE OF ANY SPECIAL KNOWLEDGE ON ITS PART.

WHILE IT MAY BE TRUE THAT RANDALL ALONE INCLUDED EO'S 586-130 THROUGH 586 -141 IN ITS BID, THIS ACTION DID NOT WORK TO RANDALL'S DISADVANTAGE TO ANY APPRECIABLE EXTENT. WE HAVE IN OUR FILES COPIES OF SUPPLEMENTAL DATA, EACH ONE OF WHICH REFERS TO AND IS DATED THE SAME AS ITS CORRESPONDING EO; WE HAVE THE FOLLOWING EVIDENCE CONCERNING THE EFFECT OF THE EO'S SUBSEQUENT TO NO. 586-128 ON THE COST OF THE EQUIPMENT. THESE DOCUMENTS, WHICH WERE PREPARED BY GOVERNMENT ENGINEERS, NOTE THE EFFECT ON COST AS FOLLOWS:

EO NO. 130 - PROVIDES FOR AN ALTERNATE MATERIAL AT A LOWER COST.

EO'S NO. 131, 135 - NO EFFECT ON THE IFB IN QUESTION.

EO'S NO. 133, 134, 136, 138, 139, 141 - REPRESENT NO COST INCREASE.

EO NO. 132 - REPRESENTS A TOTAL COST INCREASE OF $14.00.

EO NO. 137 - REPRESENTS A TOTAL COST INCREASE OF $10.00.

EO NO. 140 - REPRESENTS A TOTAL COST INCREASE OF $95.00.

RANDALL MANUFACTURING COMPANY MAY NOT AGREE WITH THIS COST ANALYSIS, BUT IT IS A WELL-ESTABLISHED RULE IN THIS OFFICE, THAT WHEN THERE IS A DISPUTE AS TO A QUESTION OF FACT BETWEEN A BIDDER OR CONTRACTOR AND THE ADMINISTRATIVE OFFICERS CHARGED WITH THE RESPONSIBILITY OF MAKING FACTUAL DETERMINATIONS, WE ARE BOUND TO ACCEPT THE VIEW OF THE LATTER ABSENT A FINDING OF ARBITRARY OR CAPRICIOUS ACTION ON THE GOVERNMENT'S PART OR ABSENT SUFFICIENT CONVINCING EVIDENCE TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS OF THE REPORT. 37 COMP. GEN. 568. RANDALL HAS PRESENTED NO SUCH EVIDENCE IN THIS CASE.

FINALLY, RANDALL ARGUES THAT IT IS THE BEST QUALIFIED CONTRACTOR FOR THIS JOB AND THAT LOGEL AND HOUCHIN, A SMALL FIRM, CANNOT POSSIBLY MEET THE GOVERNMENT'S DELIVERY REQUIREMENTS. LOGEL AND HOUCHIN HAD PREVIOUSLY PRODUCED SIMILAR PROTOTYPES A FEW YEARS AGO. ADMITTEDLY, THIS DOES NOT QUALIFY LOGEL AND HOUCHIN AS A COMPETENT PRODUCER AND AMC MAKES NO SUCH CLAIM. HOWEVER, ON JUNE 10-16, 1966, A PRE-AWARD SURVEY OF THE LOGEL AND HOUCHIN PLANT WAS CONDUCTED BY THE DCASD, OAKLAND, CALIFORNIA, AND, UPON REVIEW OF THEIR FINDINGS, IT WAS RECOMMENDED THAT A COMPLETE AWARD BE MADE TO LOGEL AND HOUCHIN. ONCE AGAIN, THIS OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE ADMINISTRATIVE OFFICERS CHARGED WITH THE RESPONSIBILITY FOR MAKING FACTUAL DETERMINATIONS UNLESS THERE IS CLEAR AND CONVINCING EVIDENCE TO THE CONTRARY. RANDALL HAS MERELY ALLEGED THAT LOGEL AND HOUCHIN ARE NOT QUALIFIED TO PRODUCE THESE MACHINES AND WE DO NOT FEEL THIS IS EITHER CLEAR OR CONVINCING EVIDENCE. WE CAN MAKE NO DETERMINATION AT THIS TIME ON THE EVIDENCE AVAILABLE THAT AMC HAS MADE A MISTAKE IN ITS JUDGMENT OF LOGEL AND HOUCHIN'S ABILITY IN THIS CASE.

IN ACCORDANCE WITH THE ABOVE WE MUST AGREE WITH THE FINDINGS AND RECOMMENDATIONS OF THE AMC AND DENY YOUR PROTEST.