B-133884, OCT. 17, 1957

B-133884: Oct 17, 1957

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER DATED SEPTEMBER 24. THE INVITATION FOR BID PROVIDED AS FOLLOWS: "ALL UNITS OF ALL ITEMS WILL BE AWARDED TO ONE BIDDER. "QUALIFIED PRODUCTS REQUIREMENTS: AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE. BEEN TESTED AND APPROVED FOR INCLUSION IN THE QUALIFIED PRODUCTS LIST 17734 WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE.'. REFERRED TO IN THE INVITATION WERE REQUIREMENTS FOR TECHNICAL DRAWINGS. IS STATED TO HAVE SUBMITTED A NON-CONFORMING BID BECAUSE OF CERTAIN EXCEPTIONS TAKEN TO THE SPECIFICATIONS AND BECAUSE THE PRODUCT PROPOSED TO BE FURNISHED HAD NOT BEEN INCLUDED ON THE QUALIFIED PRODUCTS LIST.

B-133884, OCT. 17, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 24, 1957, FROM THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., REQUESTING A DECISION AS TO WHETHER THE BID OF THE WEBSTER ELECTRIC COMPANY UNDER INVITATION FOR BID NO. IFB- 600-73-58-S, OPENED ON SEPTEMBER 17, 1957, FOR THE FURNISHING OF 485 RECORDER-REPRODUCERS RD-173/UN AS ITEM 1, TOGETHER WITH CERTAIN TECHNICAL DATA, MAY BE ACCEPTED AS CONFORMING TO THE INVITATION.

THE INVITATION FOR BID PROVIDED AS FOLLOWS:

"ALL UNITS OF ALL ITEMS WILL BE AWARDED TO ONE BIDDER, EXCEPT AS SPECIFIED HEREINAFTER. BIDS, THEREFORE, MUST BE ON THE BASIS OF FURNISHING ALL UNITS OF ALL ITEMS.

"IN MAKING THE AWARD THE GOVERNMENT RESERVES THE RIGHT TO WAIVE THE REQUIREMENTS FOR ITEMS 4, 5, 6, 7 AND 9. BIDDERS STATE, IN THE SPACE PROVIDED BELOW, THE UNIT PRICE REDUCTION FROM ITEM 1 IN THE EVENT OF THE GOVERNMENT WAIVES THE REQUIREMENT FOR ITEMS 4, 5, 6, 7 AND 9.

"QUALIFIED PRODUCTS REQUIREMENTS: AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE, PRIOR TO THE TIME SET FOR OPENING OF BIDS, BEEN TESTED AND APPROVED FOR INCLUSION IN THE QUALIFIED PRODUCTS LIST 17734 WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE.'

ITEMS 4, 5, 6, 7 AND 9, REFERRED TO IN THE INVITATION WERE REQUIREMENTS FOR TECHNICAL DRAWINGS, MANUALS, AND AN ELECTRON TUBE COMPLEMENT REPORT.

THE LOWEST BIDDER AS TO PRICE, THE RADIO CORPORATION OF AMERICA, IS STATED TO HAVE SUBMITTED A NON-CONFORMING BID BECAUSE OF CERTAIN EXCEPTIONS TAKEN TO THE SPECIFICATIONS AND BECAUSE THE PRODUCT PROPOSED TO BE FURNISHED HAD NOT BEEN INCLUDED ON THE QUALIFIED PRODUCTS LIST, AS REQUIRED BY THE SPECIAL CONDITIONS OF THE INVITATION.

THE NEXT LOWEST BIDDER AS TO PRICE, THE WEBSTER ELECTRIC COMPANY--- REPORTED TO BE THE ONLY BIDDER MEETING THE QUALIFIED PRODUCTS LIST REQUIREMENT--- ATTACHED THE FOLLOWING TYPED STATEMENT TO ITS BID:"PRICE INDICATED BELOW INCLUDES DELETION OF ITEMS 4, 5, 6, 7 AND 9 AS WEBSTER ELECTRIC COMPANY UNIT HAS BEEN ACCEPTED AND CURRENTLY IS BEING PRODUCED ON CONTRACT NOBS-73223.'

THE INVITATION TO BID WAS CLEAR THAT BIDS MUST BE SUBMITTED ON THE BASIS OF FURNISHING ALL UNITS OF ALL THE ITEMS CALLED FOR, AND ALSO THAT A UNIT PRICE REDUCTION FROM ITEM 1 SHOULD BE STATED BY ALL BIDDERS IN THE EVENT THE GOVERNMENT WAIVES THE REQUIREMENTS FOR ITEMS 4, 5, 6, 7 AND 9. HENCE, BOTH THOSE CRITERIA HAD TO BE MET BY ALL BIDDERS IN ORDER TO CONFORM TO THE INVITATION TO BID. TO PERMIT ONE BIDDER TO DEVIATE FROM WRITTEN SPECIFICATIONS TO THE EXCLUSION OF ANOTHER WOULD REDUCE TO A FARCE THE COMPETITIVE BID PROCEDURES PROVIDED BY STATUTE UNDER WHICH ALL INTERESTED BIDDERS HAVE EQUAL RIGHTS TO COMPETE FOR AWARD. THE AWARD OF THIS PROCUREMENT TO WEBSTER ELECTRIC COMPANY UNDER SUCH CIRCUMSTANCES WOULD BE AN INVITATION TO POSSIBLE CHARGES OF FAVORITISM OR ARBITRARY OR CAPRICIOUS ACTION.

MOREOVER, THERE IS FOR CONSIDERATION THE FACT THAT THE UNIT PRICE QUOTED BY THE WEBSTER ELECTRIC COMPANY IS NEARLY THREE TIMES THAT OF THE RADIO CORPORATION OF AMERICA ON AN ITEM WHICH IT CLAIMS TO BE "COMPARABLE IN ALL IMPORTANT ASPECTS.' IN THE ABSENCE OF INFORMATION AS TO THE BASIS FOR INCLUSION OF THE ITEM ON THE QUALIFIED PRODUCTS LIST, AND AS TO THE OPPORTUNITY AFFORDED TO THE MANUFACTURERS IN THE FIELD TO QUALIFY THEIR PRODUCTS, OUR OFFICE IS NOT IN A POSITION TO OBJECT TO THE METHOD OF PROCUREMENT ADOPTED. HOWEVER, AS WE CONCLUDE THAT NO AWARD SHOULD BE MADE UNDER THE SUBJECT INVITATION, IT IS SUGGESTED THAT BEFORE THE ISSUANCE OF NEW INVITATIONS OR REQUESTS FOR PROPOSALS THE BASIS OF THE PROPOSED PROCUREMENT BE REVIEWED IN THE LIGHT OF THE RECOMMENDATIONS CONTAINED IN SENATE REPORT 1111, 85TH CONGRESS, 1ST SESSION, OF THE SELECT COMMITTEE ON SMALL BUSINESS, CHAPTER II, PAGES 13 THROUGH 20. IN THIS CONNECTION, IT APPEARS FROM THE INVITATION TO BID THAT THERE IS A CURRENT MILITARY SPECIFICATION (MIL-R-17734A (SHIPS), DATED JUNE 13, 1955), FOR RECORDER- REPRODUCERS, AND THAT SUCH ARTICLES ARE IN GENERAL COMMERCIAL PRODUCTION.

THE ORIGINAL BIDS TRANSMITTED WITH THE LETTER OF SEPTEMBER 24 ARE RETURNED HEREWITH.