B-128630, DEC. 28, 1956

B-128630, DEC. 28, 1956

TO MR. PETER PLATTEN:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 14, 1956, WITH ENCLOSURE, AND SUBSEQUENT CORRESPONDENCE PROTESTING ON BEHALF OF FISCHER AND PORTER COMPANY OF HATBORO, PENNSYLVANIA, AGAINST THE ACTION OF THE CONTRACTING OFFICIALS AT THE ROBINS AIR FORCE BASE IN AWARDING A CONTRACT TO ANOTHER BIDDER FOR FURNISHING CHLORINATORS AND ACCESSORIES.

THIS CONTRACT IS REPORTED TO HAVE BEEN NEGOTIATED PURSUANT TO SECTION 2 (C) (10) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 21 (10 U.S.C. 2304 (A) (10) ( WHICH AUTHORIZES THE AGENCY HEAD TO NEGOTIATE WITHOUT FORMAL ADVERTISING A PURCHASE OR CONTRACT IF THE PURCHASE OR CONTRACT IS FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO OBTAIN COMPETITION. REQUESTS FOR PROPOSALS WERE ISSUED TO ELEVEN SELECTED SOURCES OF SUPPLY AND THESE REQUESTS SOLICITED PROPOSALS FOR FURNISHING TEN CHLORINATORS, GAS, TYPE MCVC, B6 SERIES, A-419 OR EQUAL, TO BE IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS. AS THESE MACHINES WERE TO REPLACE AN EQUAL NUMBER OF WALLACE AND TIERNAN CHLORINATORS WHICH WERE THEN IN USE AT THE ROBINS AIR FORCE BASE, TWO ALTERNATIVE PROPOSALS WERE REQUESTED, ONE QUOTING A PRICE WITHOUT ANY TRADE-IN VALUE AND THE OTHER QUOTING A PRICE ALLOWING A TRADE-IN VALUE FOR THE OLD MACHINES BEING REPLACED.

PROPOSALS WERE RECEIVED FROM THREE BIDDERS. WALLACE AND TIERNAN, INCORPORATED, ATLANTA, GEORGIA, QUOTED PRICES ON TWO MODELS. THIS CONCERN OFFERED TO FURNISH ITS MODEL A-677 FOR A PRICE OF $712 EACH, ALLOWING FOR A TRADE-IN, AND ITS MODEL A-419 FOR A NET PRICE OF $1,103 EACH ALLOWING FOR A TRADE-IN. FISCHER AND PORTER COMPANY QUOTED A PRICE OF $875 EACH WITH TRADE-IN ALLOWANCE. B.I.F. INDUSTRIES, INCORPORATED, PROVIDENCE, RHODE ISLAND, QUOTED A PRICE OF $1,327.60 EACH, WITHOUT ANY ALLOWANCE FOR TRADE-IN.

THE QUOTATIONS THUS RECEIVED WERE EVALUATED BY THE BASE INSTALLATION ENGINEER RESPONSIBLE FOR THE PROJECT AND BY THE CONTRACTING OFFICER IN ORDER TO DETERMINE WHICH QUOTATION WAS IN THE BEST INTEREST OF THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. ON THE BASIS OF THIS EVALUATION IT WAS DETERMINED THAT THE PROCUREMENT OF ANY MACHINE OTHER THAN THE A-419 MODEL OFFERED BY WALLACE AND TIERNAN WOULD RESULT IN AN ADDITIONAL INSTALLATION COST OF APPROXIMATELY $200 FOR EACH MACHINE AND A COST OF $120 PER MACHINE FOR TRAINING PERSONNEL TO OPERATE AND MAINTAIN THE NEW TYPE MACHINE. ALSO, IT WAS CONCLUDED THAT SPARE PARTS IN THE APPROXIMATE VALUE OF $1,600 THEN ON HAND WHICH COULD BE USED IN THE WALLACE AND TIERNAN A 419 MODEL, COULD NOT BE USED FOR ANY OTHER MODEL AND WOULD BE PRACTICALLY A TOTAL LOSS. ON THIS BASIS, CONTRACT NO. (09-603) 56 9520, DATED JUNE 30, 1956, IS REPORTED TO HAVE BEEN AWARDED TO WALLACE AND TIERNAN, INCORPORATED, FOR TEN WALLACE AND TIERNAN A-419 MODELS. IS REPORTED THAT COMPLETE DELIVERIES HAVE BEEN MADE AND ACCEPTED UNDER THIS CONTRACT.

YOUR PROTEST ON BEHALF OF FISCHER AND PORTER COMPANY IS BASED IN PART UPON THE CONTENTION THAT CONSIDERATION OF THE ADDITIONAL COST TO THE GOVERNMENT FOR THE INSTALLATION OF FISCHER AND PORTER EQUIPMENT FOR TRAINING PERSONNEL TO OPERATE SUCH EQUIPMENT AND THE COST OF PARTS WHICH COULD NOT BE USED IN THE EVENT THAT FISCHER AND PORTER EQUIPMENT WAS PURCHASED, WERE NOT JUSTIFIED AND THAT THE AMOUNTS OF THESE EXTRA COSTS WERE IMPROPERLY ADDED TO ITS QUOTATION WHICH OTHERWISE WOULD HAVE BEEN LOW. IT IS CONTENDED FURTHER THAT THE AMOUNTS OF THESE ADDITIONAL COSTS WERE IMPROPERLY COMPUTED AND ARE EXCESSIVE.

THE DEPARTMENT OF THE AIR FORCE HAS MADE A COMPLETE INVESTIGATION OF THE PROCUREMENT AND A REPORT HAS BEEN FURNISHED WHICH IS TO THE EFFECT THAT THE INVESTIGATION HAS FAILED TO DISCLOSE ANY EVIDENCE OF IMPROPRIETY ON THE PART OF EITHER GOVERNMENT OR CONTRACTOR PERSONNEL INVOLVED IN THE PROCUREMENT. WITH RESPECT TO THE ADDITIONAL INSTALLATION COSTS, IT WAS DETERMINED BY THE BASE THAT UNLESS WALLACE AND TIERNAN MODEL A-419 WERE INSTALLED IT WOULD BE NECESSARY TO TEAR UP THE EXISTING PIPING FOR THE CHLORINATORS AND RE-INSTALL NEW PIPING, RESULTING IN AN ADDED COST OF APPROXIMATELY $200 PER MACHINE. AS TO THE COST OF TRAINING PERSONNEL, BASE PERSONNEL DETERMINED THAT 60 HOURS PER MAN, AND NOT TWO HOURS AS CLAIMED BY YOU, WOULD BE REQUIRED, FOR THE REASON THAT THE PERSONNEL WOULD HAVE TO BE TRAINED NOT ONLY IN OPERATING THE MACHINES, WHICH WAS THE EXTENT OF TRAINING REFERRED TO BY YOU, BUT WOULD ALSO HAVE TO BE TRAINED IN THE MAINTENANCE AND REPAIR OF THE MACHINES. IN THIS CONNECTION, IT IS POINTED OUT THAT THE QUOTATION OF FISCHER AND PORTER COMPANY ACTUALLY WAS NOT THE LOWEST ONE RECEIVED, BUT THAT THE LOWEST QUOTATION, IN THE AMOUNT OF $712 PER UNIT, WAS RECEIVED FROM WALLACE AND TIERNAN, INCORPORATED, FOR FURNISHING ITS MODEL A-677. THIS MODEL, AS WELL AS ALL OTHER MODELS OFFERED, MET SPECIFICATION REQUIREMENTS. IT WAS DETERMINED, HOWEVER, THAT THE SAME ADDITIONAL COSTS WOULD HAVE BEEN INCURRED IN THE INSTALLATION OF THIS A-677 MODEL AND THEREFORE IT WAS NOT CONSIDERED ADVANTAGEOUS TO THE GOVERNMENT TO PROCURE MACHINES OF THIS MODEL. CONTRARY TO YOUR CONTENTION THE BASE CONTRACTING OFFICIALS HAVE ADVISED THAT NO PART OF THIS ADDED COST WILL BE INCURRED IN INSTALLING THE A-419 MODEL OF WALLACE AND TIERNAN.

WHEN THE AUTHORITY TO NEGOTIATE APPLIES AND IS USED THE TERMS AND CONDITIONS UPON WHICH PROPOSALS ARE REQUESTED AND EVALUATED ARE MATTERS PRIMARILY FOR DETERMINATION BY THE DEPARTMENT OF THE AIR FORCE. UNDER THE AUTHORITY TO NEGOTIATE, THE AUTHORIZED CONTRACTING OFFICIALS LEGALLY MAY TAKE INTO CONSIDERATION NOT ONLY PRICE BUT ALL FACTORS AFFECTING THE NEEDS AND INTERESTS OF THE GOVERNMENT, AND, AS INDICATED, THE RULES AND PROCEDURES APPLICABLE TO PROCUREMENT BY FORMAL ADVERTISING DO NOT APPLY.

IN THIS INSTANCE THE PROCUREMENT HAS BEEN FULLY ACCOMPLISHED BY DELIVERY OF THE ARTICLES AND PAYMENT OF THE AGREED PRICE. WHILE THE BASIS FOR NEGOTIATION OF THE CONTRACT--- THAT IS, THE IMPRACTICABILITY OF OBTAINING COMPETITION--- SEEMS HIGHLY QUESTIONABLE IN VIEW OF THE FACT THAT THREE APPARENTLY RESPONSIVE COMPETITIVE PROPOSALS WERE OBTAINED, THERE APPEARS TO BE NO EFFECTIVE ACTION WHICH WE MAY NOW TAKE TO CORRECT THE ADMINISTRATIVE ACTION EVEN IF IT WAS ERRONEOUS. THE SUPPLIER WOULD IN ANY EVENT BE ENTITLED TO BE PAID AT LEAST THE REASONABLE VALUE TO THE GOVERNMENT OF THE GOODS FURNISHED, AND IN VIEW OF THE FINDINGS OF THE CONTRACTING OFFICER IT WOULD APPEAR TO BE VIRTUALLY USELESS TO ATTEMPT TO ESTABLISH THAT THE CONTRACT PRICE REPRESENTED MORE THAN SUCH REASONABLE VALUE.

WE ARE, HOWEVER, CALLING THE MATTER TO THE ATTENTION OF THE SECRETARY OF THE AIR FORCE FOR SUCH ACTION AS HE MAY DEEM PROPER TO PREVENT FUTURE INSTANCES OF THIS KIND.