B-161137, MAR. 14, 1968

B-161137, MAR. 14, 1968

BIDS - SPECIFICATIONS - PROCEDURE PROPRIETY DECISION TO MINNESOTA MINING AND MANUFACTURING CO. SUSTAINING CONCLUSIONS IN DECISION OF SEPTEMBER 12, 1967, THAT COMPETITORS WERE NOT ACCORDED PREFERRED TREATMENT IN PREPARATION OF SPECIFICATIONS FOR SUPPLYING COMMUNICATIONS EQUIPMENT TO GSA.

TO MINNESOTA MINING AND MANUFACTURING CO.:

WE REFER TO YOUR REQUEST OF NOVEMBER 15, 1967, THAT WE RECONSIDER OUR DECISION B-161137, SEPTEMBER 12, 1967, IN WHICH WE DENIED YOUR PROTEST AGAINST PROCEDURES EMPLOYED BY THE GENERAL SERVICES ADMINISTRATION (GSA) IN THE PREPARATION OF SPECIFICATIONS AND SOLICITATION OF BIDS TO SUPPLY COMMUNICATION EQUIPMENT, FSC, GROUP 58, PART III, SUPPLEMENT NO. 1, DATED MARCH 3, 1967. THE SOLICITATION WAS ACCOMPLISHED BY INVITATION FOR BIDS (IFB) NO. FPNHO-R-27480-A-3-24-67.

YOU STATE THAT THERE ARE INCONSISTENCIES BETWEEN CERTAIN STATEMENTS IN OUR DECISION, WHICH WERE BASED ON A REPORT RENDERED TO OUR OFFICE BY GSA, AND THE FACTS AS YOU KNOW THEM. FURTHER, YOU PROTEST THAT GSA MADE AWARDS BEFORE OUR DECISION ON YOUR PROTEST WAS RENDERED AND THAT SUCH ACTION WAS IMPROPER ABSENT APPROVAL OF THE AWARDS BY OUR OFFICE PURSUANT TO A FORMAL REQUEST BY GSA INDICATING AN URGENT NEED FOR THE PROCUREMENT ITEMS. FINALLY, YOU STATE THAT VISUAL INSPECTIONS WHICH YOU HAVE MADE OF UNITS DELIVERED BY ONE PARTICULAR CONTRACTOR VARY SUBSTANTIALLY FROM THE REQUIREMENTS OF THE APPLICABLE SPECIFICATION.

YOU PROTESTED THAT YOU WERE NOT ACCORDED THE SAME COURTESIES AS YOUR COMPETITORS WITH THE RESULT THAT THEY WERE PLACED IN A MORE FAVORED POSITION THAN YOU AND THAT THE METHOD OF PROCUREMENT DID NOT GENERATE THE NECESSARY COMPETITION. IN SUPPORT OF YOUR POSITION, YOU ASSERTED THAT GSA HAD SURVEYED YOUR COMPETITORS BUT NOT YOU; THAT YOU HAD NOT BEEN SUPPLIED WITH A COPY OF THE PROPOSED SPECIFICATIONS FOR COMMENT NOR HAD YOU BEEN FURNISHED ANY BUT THE FIRST SPECIFICATIONS; AND THAT UNDER THE FINAL INTERIM SPECIFICATIONS CITED IN THE IFB, YOU WERE ABLE TO BID, AFTER EXTENSIVE MODIFICATIONS, ON ONLY ONE ITEM, INSTEAD OF TEN ITEMS AS IN THE PAST.

GSA'S ORIGINAL REPORT STATED THAT ONLY A CROSS-SECTION OF THE INDUSTRY HAD BEEN VISITED BY ONE OF ITS REPRESENTATIVES IN AN EFFORT TO CONTACT MANUFACTURERS OF ALL FOUR TYPES OF EQUIPMENT INVOLVED; THAT SIX OF THE FIRMS WERE LOCATED IN ONE GEOGRAPHIC AREA (CALIFORNIA) AND THE ONLY OTHER FIRM VISITED WAS LOCATED EN ROUTE IN OKLAHOMA; AND THAT YOU WERE NOT ONLY NOT EN ROUTE BUT YOU MANUFACTURED ONLY ONE TYPE OF THE EQUIPMENT. WHILE YOU CONCEDE THAT YOU DO NOT MANUFACTURE MORE THAN ONE TYPE OF THE PARTICULAR EQUIPMENT, YOU CLAIM THAT YOU HAVE PLANTS AT CAMARILLO, CALIFORNIA, AND CHICAGO, ILLINOIS, WHICH WERE IN THE SAME GEOGRAPHICAL AREA AS THE PLANTS WHICH WERE VISITED AND WERE ALSO EN ROUTE. IN THIS CONNECTION, GSA STATES THAT NEITHER ITS REPRESENTATIVE NOR THE PERSONNEL WHO WERE RESPONSIBLE FOR HIS TRIP WERE AWARE OF THE EXISTENCE OF YOUR CAMARILLO PLANT. ACCORDINGLY, THERE APPEARS TO BE NO REASON TO IMPLY BAD FAITH ON THE PART OF GSA IN THIS RESPECT.

REGARDING THE MATTER OF NONRECEIPT BY YOU OF A COPY OF PROPOSED FEDERAL SPECIFICATION, W-R-168, WHICH PRECEDED INTERIM FEDERAL SPECIFICATION W-R- 00168A, GSA'S INITIAL REPORT, AS SUPPORTED BY THE RECORD, INDICATED THAT ON MARCH 29, 1965, A COPY OF W-R-168 WAS SENT TO YOUR REVERE-WOLLENSAK DIVISION (NOW REVERE-MINCOM) AND TO 21 OTHER MANUFACTURERS FOR COMMENT. ALTHOUGH AN ACKNOWLEDGMENT WAS RECEIVED FROM THE REVERE-WOLLENSAK DIVISION CONCERNING PROPOSED FEDERAL SPECIFICATION W-R-170, WHICH HAD BEEN TRANSMITTED TO THE DIVISION AND TO 26 OTHER MANUFACTURERS FOR COMMENT ON FEBRUARY 8, 1965, THERE WAS NO INDICATION IN THE RECORD THAT ANY SIMILAR ACKNOWLEDGMENT WAS MADE BY THE DIVISION CONCERNING THE RECEIPT OF W-R-168, NOR WAS ANY COMMENT THEREON EVER SUBMITTED BY THE DIVISION. GSA HAS NO FURTHER STATEMENT TO MAKE ON THIS MATTER. WHILE IT IS POSSIBLE THAT THE SPECIFICATION IN QUESTION WAS NOT RECEIVED BY YOUR REVERE-WOLLENSAK DIVISION, WE MUST ACCEPT GSA'S REPORT AS TO THE MAILING OF THE ITEM ABSENT EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF ITS CORRECTNESS. BASED ON THE REPORTED FACTS, WE ARE UNABLE TO CONCLUDE THAT GSA DID NOT MAKE A REASONABLE ATTEMPT TO FURNISH YOU WITH A COPY OF THE PROPOSED SPECIFICATION FOR COMMENT.

IN CONNECTION WITH A STATEMENT BY GSA THAT ITS MR. DANIERO DISCUSSED INTERIM FEDERAL SPECIFICATION W-R-00168 WITH YOUR ENGINEERS IN SEPTEMBER 1965 AT THE AUDIO VISUAL TRADE SHOW IN WASHINGTON, D.C., YOU STATE THAT YOU HAD NO ENGINEERS AT THAT SHOW. GSA REPORTS THAT MR. DANIERO WAS UNDER THE IMPRESSION THAT YOUR MR. DAVID UBEL, TO WHOM MR. DANIERO HANDED A COPY OF THE INTERIM SPECIFICATION, WAS AN ENGINEER. IN ANY EVENT, GSA STATES, MR. UBEL DISCUSSED THE INTERIM SPECIFICATION WITH MR. DANIERO AND ULTIMATELY SUBMITTED TO GSA IN A LETTER DATED JANUARY 11, 1966, DETAILED COMMENTS AND RECOMMENDATIONS OF YOUR REVERE-MINCOM ELECTRICAL ENGINEERS ON THE SPECIFICATION WITH THE RESULT THAT SEVERAL CHANGES WERE MADE IN THE PROPOSED SPECIFICATION W-R-168 PRIOR TO ITS ISSUANCE AS INTERIM FEDERAL SPECIFICATION W-R 00168A. ALTHOUGH SUCH FACTS EVIDENCE THAT YOUR ENGINEERS WERE NOT APPROACHED DIRECTLY BY GSA, NEVERTHELESS THE COMMENTS OF YOUR ENGINEERS WERE OBTAINED BY GSA, AND THEIR RECOMMENDATIONS WERE ADOPTED TO SOME EXTENT IN THE INTERIM SPECIFICATION WHICH WAS CITED IN THE IFB. IT THUS APPEARS THAT THE NET RESULT WAS THE SAME AS IF YOUR ENGINEERS HAD RECEIVED THE COPY OF PROPOSED SPECIFICATION W-R-168 WHICH GSA MAILED TO YOUR REVERE-WOLLENSAK DIVISION ON MARCH 29, 1965, SIX MONTHS PRIOR TO MR. UBEL'S VISIT TO WASHINGTON.

CONCERNING YOUR STATEMENT THAT YOU DID NOT RECEIVE A COPY OF THE INTERIM AMENDMENT OF DECEMBER 16, 1966, TO W-R-00168A, GSA REPORTS THAT WHILE AN AMENDMENT WAS ISSUED ON THAT DATE TO PROPOSED SPECIFICATION W-R-170A, ON WHICH YOUR REVERE-WOLLENSAK DIVISION DECLINED TO COMMENT IN 1965, NO AMENDMENT WAS SO ISSUED TO W-R-00168A. IN THE LIGHT OF SUCH INFORMATION, THE STATEMENT ON PAGE 3 OF OUR DECISION OF SEPTEMBER 12, 1967, TO THE EFFECT THAT THE COMMENTS AND RECOMMENDATIONS OF YOUR REVERE-MINCOM ELECTRICAL ENGINEERS SUBMITTED BY MR. UBEL ON JANUARY 11, 1966, HAD COVERED AMENDMENT 1 TO W-R-00168 WAS ERRONEOUS, AND WE REGRET THAT YOU MIGHT HAVE BEEN THEREBY LED TO BELIEVE THAT SUCH AN AMENDMENT HAD BEEN ISSUED.

WITH RESPECT TO THE ONE ITEM ON WHICH YOU BID AND ON WHICH THE ONLY OTHER BID WAS LOWER, GSA CONFIRMS YOUR STATEMENT THAT THE BIDDER TOOK SEVERAL EXCEPTIONS TO THE SPECIFICATIONS AND REPORTS THAT THE BID WAS THEREFORE REJECTED AS NONRESPONSIVE. HOWEVER, GSA FURTHER REPORTS THAT YOUR BID ON THE SAME ITEM ALSO WAS REJECTED, AS IS AUTHORIZED IN FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.404-2 (C), PURSUANT TO A DETERMINATION BY THE CONTRACTING OFFICER THAT IT WAS EXCESSIVE.

YOU CONTEND THAT THE INTERIM SPECIFICATION IS NOT IN THE INTEREST OF THE GOVERNMENT SINCE A ,REDESIGN" OF YOUR EQUIPMENT, RATHER THAN THE "MODIFICATION" OF WHICH GSA SPEAKS, WOULD BE NECESSARY IN ORDER TO ENABLE YOU TO BID ON MORE THAN THE ONE ITEM. GSA REPORTS THAT ITS STATEMENT REFLECTED THE OPINION OF ITS TECHNICAL PERSONNEL, AND POINTS OUT THAT, WHILE YOUR CHOICE OF WORDS IS DIFFERENT FROM GSA'S BOTH OF YOU ARE IN AGREEMENT THAT YOU COULD HAVE BID ON MORE THAN ONE ITEM (WHICH YOU DID MODIFY) HAD YOUR EXISTING EQUIPMENT BEEN CHANGED IN SOME FASHION. IN THIS CONNECTION, IT IS OUR UNDERSTANDING THAT THE USE OF INTERIM FEDERAL SPECIFICATIONS IS OPTIONAL WITH ALL FEDERAL AGENCIES, AND THAT GSA WILL THEREFORE WAIVE USE OF INTERIM SPECIFICATION W-R-00168A, SUBJECT TO A SUGGESTION THAT ANY RECORDERS WHICH ARE PURCHASED SHOULD COMPLY SUBSTANTIALLY WITH THE INTERIM SPECIFICATION.

AS TO THE AWARDS WHICH GSA MADE UNDER THE IFB PRIOR TO THE RESOLUTION OF YOUR PRE-AWARD PROTEST, GSA EXPRESSES REGRET THAT IT FAILED TO COMPLY WITH THE NOTICE REQUIREMENTS SET FORTH IN FPR 1-2.407 8 (B) (2). THE BASIS FOR THE AWARDS, HOWEVER, IS STATED TO BE THE NECESSITY FOR PROVIDING THE GOVERNMENT WITH SOURCES OF SUPPLY FOR THE TYPE OF EQUIPMENT INVOLVED. THIS POINT, IT MAY BE STATED THAT WHILE THE CITED REGULATION PROVIDES THAT NOTICE SHALL BE GIVEN TO OUR OFFICE BY A PROCURING AGENCY OF INTENT TO MAKE AWARD WITHOUT AWAITING THE FINAL DISPOSITION OF A PROTEST BEFORE OUR OFFICE, APPROVAL OF THE AWARD IS NOT REQUIRED TO BE OBTAINED FROM OUR OFFICE, BUT ONLY FROM PROPER AUTHORITY WITHIN THE AGENCY. THEREFORE, ASSUMING THAT PROPER APPROVAL WAS OBTAINED FOR THE AWARDS IN QUESTION, THE ABSENCE OF NOTICE TO OUR OFFICE WOULD NOT OF ITSELF AFFECT THE VALIDITY OF THE CONTRACTS, PARTICULARLY SINCE NO AWARD WAS MADE FOR THE ITEM ON WHICH YOU BID.

WITH REGARD TO THE PARTICULAR CONTRACT UNDER WHICH YOU ALLEGE THAT DELIVERY HAS BEEN MADE OF CERTAIN ITEMS WHICH ARE NOT IN COMPLETE ACCORD WITH THE SPECIFICATIONS, GSA ADVISES THAT SEVERAL OF THE NONCOMPLYING UNITS HAVE BEEN RECALLED FOR MODIFICATION; THAT AN ADEQUATE PRICE REDUCTION WILL BE OBTAINED FOR THOSE NONCOMPLYING UNITS WHICH HAVE NOT BEEN RETURNED TO THE CONTRACTOR FOR MODIFICATION; AND THAT OTHER MODELS OFFERED BY THE CONTRACTOR HAVE MET ALL OF THE REQUIREMENTS OF THE APPLICABLE INTERIM SPECIFICATION.

IN VIEW OF THE FOREGOING, WE HAVE NO ALTERNATIVE BUT TO SUSTAIN THE CONCLUSIONS SET FORTH IN OUR EARLIER DECISION, I.E., THAT YOUR COMPETITORS WERE NOT ACCORDED PREFERRED TREATMENT, AND THAT WE CAN FIND NO LEGAL BASIS ON WHICH TO DISAGREE WITH GSA'S VIEW THAT SUITABLE RECORDERS CAN BE OBTAINED UNDER THE INTERIM SPECIFICATION FOR WIDE USAGE BY VARIOUS GOVERNMENT AGENCIES AT LOWER COSTS THAN HERETOFORE.