B-132518, SEP. 6, 1957

B-132518, SEP. 6, 1957

TO CLAD INTERNATIONAL CORPORATION:

YOUR LETTER OF JULY 10, 1957, WITH ENCLOSURE, PROTESTS THE AWARD OF A CONTRACT BY THE DEPARTMENT OF THE ARMY TO ANOTHER BIDDER PURSUANT TO INVITATION FOR BIDS NO. QM/CTN/-36-243-57-87, ISSUED MAY 8, 1957.

THE INVITATION REQUESTED BIDS ON 460,680 CAPS FOR DELIVERY IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:

TABLE

92,160 EACH BY 30 SEPTEMBER 1957

92,160 EACH BY31 OCTOBER 1957

92,160 EACH BY 30 NOVEMBER 1957

29,160 EACH BY 31 DECEMBER 1957"

THE LOW BID OF $0.49 PER UNIT WAS SUBMITTED BY THE LOVELINE HAT COMPANY; THE SECOND LOW BID OF $0.64 PER UNIT WAS OFFERED BY YOUR FIRM. THE THIRD LOW BID AT A UNIT PRICE OF $0.65 WAS SUBMITTED ON AN "ALL OR NONE BASIS," I.E., THE BIDDER WOULD NOT ACCEPT AN AWARD FOR LESS THAN THE TOTAL AMOUNT OF THE AWARD. THE FOURTH LOW BIDDER SUBMITTED A UNIT PRICE OF $0.70.

THE INVITATION PROVIDES, ON PAGE 9, UNDER THE HEADING,"PLACE OF PERFORMANCE:"

"* * * REGARDLESS OF THE QUANTITY BID UPON, THE AWARD WILL BE MADE ONLY FOR THAT QUANTITY WHICH THE CONTRACTING OFFICER DETERMINES CAN BE PRODUCED IN ACCORDANCE WITH THE CONTRACT AT THE PLANT OR PLANTS SPECIFIED BY THE BIDDER AS THE PLACE OF PERFORMANCE.'

THE REPORT FURNISHED BY THE DEPARTMENT OF THE ARMY INDICATES THAT PURSUANT TO THE PROVISION OF THE INVITATION QUOTED ABOVE, IT WAS DETERMINED THAT THE LOW BIDDER HAD NO CAPACITY IN ITS PLANT TO PRODUCE THE CAPS DURING THE MONTHS IN WHICH DELIVERIES WERE REQUIRED. A SURVEY OF YOUR PLANT INDICATED A CAPACITY TO PRODUCE 55,000 UNITS IN AUGUST AND 75,000 UNITS IN SEPTEMBER. YOUR FIRM WAS RECOMMENDED FOR PARTIAL AWARD WITHIN THE AVAILABLE CAPACITY. A SURVEY OF THE FACILITIES BELONGING TO THE THIRD LOW BIDDER, WHO HAD BID ON AN "ALL OR NONE BASIS" INDICATED HIS CAPACITY TO PROVIDE THE ENTIRE CONTRACT QUANTITY IN ACCORDANCE WITH THE DELIVERY SCHEDULE. IT WAS ALSO DETERMINED THAT THE FOURTH LOW BIDDER HAD THE CAPACITY TO DELIVER THE REMAINING AMOUNT SHOULD PARTIAL AWARD BE MADE TO YOUR COMPANY. HAD AWARD BEEN MADE TO YOUR COMPANY FOR 300,000 UNITS, THE MAXIMUM WHICH IT WAS DETERMINED YOU COULD DELIVER WITHIN THE SCHEDULE, AND THE REMAINDER AWARDED TO THE FOURTH LOW BIDDER THE COST TO THE GOVERNMENT WOULD HAVE BEEN $302,391.24. AWARD OF THE TOTAL CONTRACT TO THE THIRD LOW BIDDER (THE AWARD OF LESS THAN THE TOTAL WOULD NOT HAVE BEEN POSSIBLE IN ACCORDANCE WITH THE "ALL OR NONE" QUALIFICATION IN THE BID) WOULD HAVE RESULTED IN A COST TO THE GOVERNMENT OF $298,695.70. SINCE THIS WAS MORE THAN $3,500 LESS THAN THE COST TO THE GOVERNMENT HAD PARTIAL AWARD BEEN MADE TO YOU, THE BID OF THE THIRD LOW BIDDER WAS ACCEPTED AND AWARD MADE TO THAT COMPANY FOR THE TOTAL QUANTITY ON JUNE 28, 1957.

THE DETERMINATION AS TO THE AVAILABLE CAPACITY OF YOUR PLANT TO PRODUCE THE CAPS WAS MADE IN ACCORDANCE WITH THE PROVISION ON PAGE 9 OF THE INVITATION, QUOTED ABOVE. THE QUESTION OF CAPACITY IN THIS INSTANCE IS LARGELY ONE OF FACT AND IT IS THE ESTABLISHED POLICY OF OUR OFFICE TO ACCEPT THE FACTUAL DETERMINATIONS OF THE CONTRACTING AGENCY IN THE ABSENCE OF A CLEAR SHOWING TO THE CONTRARY.

AWARD OF A GOVERNMENT CONTRACT PURSUANT TO FORMAL ADVERTISING IS REQUIRED UNDER 10 U.S.C. 2305/B) TO BE MADE TO THE RESPONSIBLE BIDDER WHOSE BID "WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES PRICE AND OTHER FACTORS CONSIDERED.' PARAGRAPH 8 (A) OF THE TERMS AND CONDITIONS IS TO THE SAME EFFECT. IN CONSTRUING BOTH THE STATUTORY PROVISION AND THE PROVISION OF THE TERMS AND CONDITIONS, WE HAVE HELD THAT WHERE THE ACCEPTANCE OF A BID SUBMITTED ON AN "ALL OR NONE BASIS" WILL RESULT IN A LOWER COST TO THE GOVERNMENT THAN WOULD A COMBINATION OF BIDS WITHOUT SUCH QUALIFICATION, THE "ALL OR NONE" BID SHOULD BE ACCEPTED EVEN THOUGH A PARTIAL AWARD COULD BE MADE AT A LOWER UNIT COST. 35 COMP. GEN. 383; B- 127916, JULY 18, 1956; B-122521, APRIL 21, 1955.

THEREFORE, UNDER THE CIRCUMSTANCES AS STATED ABOVE, WE MUST CONCLUDE THAT THE CONTRACT WAS PROPERLY AWARDED TO THE THIRD LOW BIDDER.

YOU ALSO CONTEND THAT THE SURVEY OF YOUR FACILITIES MADE BY THE CONTRACTING AGENCY CONSTITUTES ,HARASSING AND PERSECUTION.' THE ADMINISTRATIVE REPORT INDICATES THAT THE SURVEY WAS REQUIRED TO BE THOROUGH BECAUSE YOUR PLANT AT MAYAGUES, PUERTO RICO, WAS PREVIOUSLY USED BY TWO COMPANIES, ONE OF WHICH IS DEBARRED FROM BIDDING UPON GOVERNMENT CONTRACTS UNTIL JUNE 1, 1960, AND THE OTHER OF WHICH IS SUSPENDED INDEFINITELY FROM BIDDING ON GOVERNMENT CONTRACTS. PURSUANT TO REGULATION, AN INVESTIGATION WAS REQUIRED TO DETERMINE WHETHER EITHER THE SUSPENDED OR DEBARRED FIRMS HAD ANY INTEREST IN YOUR CORPORATION. THE REPORT STATES THAT IT WAS DETERMINED THAT YOUR FIRM IS ELIGIBLE FOR AWARD OF A GOVERNMENT CONTRACT AND THAT THE INVESTIGATION PLAYED NO PART IN THE ULTIMATE CONCLUSION TO MAKE AN AWARD TO ANOTHER BIDDER UNDER THIS CONTRACT. AN ADDITIONAL SURVEY WAS REQUIRED TO BE MADE OF YOUR FACILITIES IN ORDER TO RESOLVE ANY DOUBT CONCERNING YOUR ABILITY TO FURNISH THE TOTAL REQUIREMENT OF CAPS FOR THE FIRST TWO MONTHS OF THE DELIVERY SCHEDULE. THE FACTS STATED IN THE ADMINISTRATIVE REPORT DO NOT INDICATE ANY "HARASSING AND PERSECUTION" AND IN ANY CASE THE INVESTIGATION OR SURVEY PROCEDURES UTILIZED WOULD NOT AFFECT THE VALIDITY OF THE AWARD MADE.