B-129452, NOV. 13, 1956

B-129452, NOV. 13, 1956

TO IMPARATO STEVEDORING CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 8, 1956, CONCERNING THE CANCELLATION OF YOUR CONTRACT NO. DA 31-126 TC-1 FOR STEVEDORING SERVICES AND THE AWARD OF A SUBSEQUENT CONTRACT FOR SIMILAR SERVICES TO THE RYAN STEVEDORING COMPANY, INC., OF MOBILE, ALABAMA.

YOUR LETTER PROTESTS BOTH THE FAILURE OF THE TRANSPORTATION CORPS TO INFORM YOU OF THE REASONS FOR CANCELLATION OF YOUR CONTRACT AND ITS ALLEGED REFUSAL TO AFFORD YOU EQUAL OPPORTUNITY TO NEGOTIATE FOR THE SUBSEQUENT CONTRACT. CLAUSE 11 OF YOUR CONTRACT PROVIDED THAT IT MIGHT BE TERMINATED AT ANY TIME BY EITHER PARTY UPON 30 DAYS WRITTEN NOTICE. FIND NO REQUIREMENT IN THE CONTRACT THAT YOU BE NOTIFIED OF THE REASONS FOR TERMINATION OF THE CONTRACT BY THE GOVERNMENT. HOWEVER, FOR YOUR INFORMATION, IT APPEARS FROM THE RECORD BEFORE US THAT THE PRIMARY REASON FOR THE TERMINATION OF YOUR CONTRACT WAS YOUR FAILURE TO ACHIEVE A SATISFACTORY EFFICIENCY RATE PER GANG HOUR DURING LOADING OPERATIONS. APPEARS THAT THE ORIGINAL CONTRACT RATES WERE NEGOTIATED ON THE BASIS OF A PRODUCTION OF 35 TONS PER GANG HOUR WHILE YOUR ACTUAL PRODUCTION WAS ONLY ABOUT 20 TONS PER GANG HOUR. IT WAS AND IS THE OPINION OF THE TRANSPORTATION CORPS THAT IT IS NOT UNREASONABLE TO EXPECT A PRODUCTION RATE OF 30 TONS PER GANG HOUR. YOUR INABILITY OR FAILURE TO ACHIEVE A RATE OF PRODUCTION CONSIDERED SATISFACTORY BY THE TRANSPORTATION CORPS APPEARS TO HAVE BEEN ONE OF THE MAIN REASONS WHY NO MUTUALLY SATISFACTORY PRICES COULD BE AGREED UPON UNDER CLAUSE 3 OF THE CONTRACT FOR CONTINUED PERFORMANCE BY YOU.

YOUR OTHER GROUND OF PROTEST CONCERNS THE ALLEGED REFUSAL OF THE TRANSPORTATION CORPS TO AFFORD YOU EQUAL OPPORTUNITY WITH OTHER BIDDERS TO NEGOTIATE WITH THE CONTRACTING OFFICER FOR THE CONTRACT SUBSEQUENTLY AWARDED. THE RECORD BEFORE US INDICATES THAT YOU SUBMITTED ONE PROPOSAL, WHICH WAS THE HIGHEST RECEIVED, AND THAT YOU LATER SUBMITTED A REVISED PROPOSAL, WHICH WAS THE THIRD HIGHEST OF THOSE RECEIVED. YOU ALLEGE THAT YOU WERE PROMISED AND SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO NEGOTIATE FURTHER ON THE BASIS OF YOUR SECOND PROPOSAL. YOU ALSO STATE THAT CERTAIN ASPECTS OF THE CONTRACT CONCERNING OPERATIONS IN CONTRAST TO PAST REQUIREMENTS WERE DISCUSSED WITH OTHERS BUT NOT WITH YOU. WE ARE ADVISED THAT THESE DISCUSSIONS INVOLVED DELETION OF CERTAIN MISCELLANEOUS SERVICES TO BE PERFORMED AT MAN-HOUR RATES AND THAT SUCH SERVICES WERE NOT CONSIDERED IN EVALUATING PROPOSALS.

SO FAR AS CONCERNS YOUR CONTENTION THAT YOU SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO NEGOTIATE FURTHER UNDER YOUR SECOND PROPOSAL, THE EVIDENCE BEFORE US IS IN CONFLICT AS TO WHETHER YOU WERE PROMISED OR INDUCED TO BELIEVE THAT YOU WOULD BE GIVEN SUCH AN OPPORTUNITY. THE CONTRACT WAS NEGOTIATED UNDER AUTHORITY OF SECTION 2304 (10), TITLE 10, U.S.C. (PUBLIC LAW 1028, APPROVED AUGUST 10, 1956), FORMERLY SECTION 2 (C) (10) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947. SECTION 2302, TITLE 10, U.S. CODE, DEFINES THE TERM "NEGOTIATE" AS MEANING TO "MAKE WITHOUT FORMAL ADVERTISING.' WE KNOW OF NO STATUTORY REQUIREMENT THAT OPPORTUNITY BE GIVEN OFFERORS ON A NEGOTIATED PROCUREMENT TO SUBMIT SUCCESSIVELY LOWER PROPOSALS IN THE HOPE OF BECOMING THE LOWEST BIDDER. WHILE IT MAY BE THAT THE FAILURE ON THE PART OF THE CONTRACTING OFFICIALS TO FULFILL THEIR PROMISE TO CONDUCT FURTHER NEGOTIATIONS WITH YOU, IF SUCH BE THE FACT, MIGHT WARRANT FURTHER ACTION FROM AN ADMINISTRATIVE STANDPOINT, IT AFFORDS NO BASIS FOR QUESTIONING THE LEGALITY OF THE AWARD MADE ON OCTOBER 8, 1956, TO THE RYAN STEVEDORING COMPANY.