B-136292, JUL. 2, 1958

B-136292, JUL. 2, 1958

TO SPECIALTY ENGINEERING AND ELECTRONICS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 28, 1958, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. 30-635-58-417, ISSUED BY THE ROME AIR FORCE DEPOT ON MAY 6, 1958, FOR 23 RADOMES CW-396A/GPS, AND RELATED EQUIPMENT AND DATA. BIDS WERE PUBLICLY OPENED ON MAY 22, 1958.

IN VIEW OF THE FACT THAT TWO OF THE PROSPECTIVE BIDDERS WERE IN POSSESSION OF GOVERNMENT-OWNED SPECIAL TOOLING WHICH MIGHT BE USED IN THE MANUFACTURE OF RADOMES, THE INVITATION REQUESTED BIDS AS FOLLOWS:

"BID A - NON USE OF SPECIAL TOOLING

"BID B - NO CHARGE USE OF SPECIAL TOOLING.'

PARAGRAPH 42 OF THE INVITATION PROVIDED:

"BASIS FOR AWARD OF CONTRACT:

"A. IN THE EVENT THAT A BIDDER HAS IN HIS POSSESSION SPECIAL TOOLING FURNISHED BY THE GOVERNMENT WHICH SPECIAL TOOLING IS USEABLE IN THE PERFORMANCE OF THE CONTRACT CONTEMPLATED BY THIS INVITATION, SUCH BIDDER MUST, IN ORDER TO PREVENT COMPETITIVE ADVANTAGE SUBMIT ALTERNATE BIDS AS FOLLOWS:

"1. A BID BASED UPON NON-USE OF ANY SUCH SPECIAL TOOLING.

"2. AND A BID BASED UPON THE NO-CHARGE USE OF AVAILABLE SPECIAL TOOLING.

"B. FAILURE OF BIDDER TO SUBMIT ALTERNATE BIDS AS REQUIRED BY PARAGRAPH A WILL RESULT IN THE REJECTION OF ANY BID SUBMITTED.

A CONTRACT WILL BE AWARDED ON THE BASIS OF THE BID DESCRIBED IN PARAGRAPH A (2), ONLY IF THAT BIDDER IS THE LOWEST RESPONSIBLE BIDDER ON THE BASIS DESCRIBED IN PARAGRAPH A (1).'

YOU SUBMITTED A BID UNDER "A" IN THE AMOUNT OF $32,000 EACH, AND A BID IN THE AMOUNT OF $28,000 EACH UNDER "B.' HOWEVER, LONG SAULT WOODCRAFT LIMITED OF QUEBEC, CANADA, SUBMITTED A BID UNDER A" ONLY IN THE AMOUNT OF $29,416 FOR EACH RADOME. AWARD IS PROPOSED TO BE MADE LONG SAULT ON THE BASIS THAT IT SUBMITTED THE LOWEST RESPONSIVE BID IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE INVITATION. IT IS THE POSITION OF THE PROCUREMENT AGENCY THAT BIDS UNDER "A" AND "B" WERE REQUIRED ONLY FROM THOSE BIDDERS HAVING THE SPECIAL TOOLING IN THEIR POSSESSION; THAT AS TO ALL OTHER BIDDERS ONLY BIDS SUBMITTED UNDER "A" COULD BE CONSIDERED FOR AWARD, AND THAT AS TO SUCH OTHER BIDDERS QUOTATIONS UNDER "B" WOULD BE DISREGARDED. THE RATIONALE OF THE PROCUREMENT AGENCY'S POSITION IS THAT EVALUATION OF YOUR BID UNDER "B" WOULD CONTRAVENE THE LANGUAGE OF PARAGRAPH 42 (B) BECAUSE YOUR BID UNDER "A" IS HIGHER THAN THE BID "A" OF THE LOWEST RESPONSIBLE BIDDER.

IT IS YOUR CONTENTION THAT THIS RESULTS IN A SUBSTANTIAL AND UNFAIR COMPETITIVE ADVANTAGE FOR THOSE BIDDERS WHO HAVE GOVERNMENT-OWNED SPECIAL TOOLING CONTRARY TO THE PURPOSE AND INTENT OF PARAGRAPH 42. ALSO, AT A CONFERENCE WITH REPRESENTATIVES OF OUR OFFICE ON JUNE 25, 1958, YOU URGED THAT THE GOVERNMENT, UNDER A REASONABLE INTERPRETATION OF THE INVITATION, INTENDED TO MAKE SUCH SPECIAL TOOLING AVAILABLE TO THE SUCCESSFUL BIDDER IN THE EVENT HE IS LOW UNDER EITHER ALTERNATE "A" OR "B.'

WE DO NOT AGREE THAT THE QUOTED PROVISIONS PROVIDE AN UNFAIR ADVANTAGE TO CERTAIN PROSPECTIVE BIDDERS TO THE PREJUDICE OF OTHERS WHO DO NOT HAVE SUCH TOOLING IN THEIR POSSESSION. RATHER, WE REGARD SUCH PROVISIONS AS A REASONABLE EFFORT TO MAINTAIN THE COMPETITIVE CHARACTER OF THE INVITATION BY PERMITTING A WEIGHING OF BIDS BOTH ON A USE OF SPECIAL TOOLING AND ON A NO CHARGE USE THEREFOR. THESE PROVISIONS, THEREFORE, DO NOT IN FACT LIMIT COMPETITION OR RESULT IN FAVORITISM TO A CERTAIN CATEGORY OF PROSPECTIVE BIDDERS. THE RESULTS OF THE BIDDING UNDER THIS INVITATION AMPLY SUPPORT SUCH CONCLUSION.

THE SUBJECT INVITATION MAY BE SOMEWHAT AMBIGUOUS IN THAT IT IS NOT ENTIRELY CLEAR AS TO THE BASIS UPON WHICH THOSE BIDDERS NOT HAVING THE SPECIAL TOOLING COULD SUBMIT RESPONSIVE BIDS. WE NOTE IN THAT CONNECTION THAT THE LANGUAGE OF PARAGRAPH 42 (B) WOULD SEEM TO INDICATE THAT ONLY THOSE BIDDERS HAVING THE SPECIAL TOOLING COULD BE AWARDED A CONTRACT ON THE BASIS OF ALTERNATE "B" ONLY IF "THAT BIDDER IS THE LOWEST RESPONSIBLE BIDDER ON THE BASIS DESCRIBED IN PARAGRAPH A (1) (BID "A").' THUS, BIDDERS OTHER THAN THOSE REFERRED TO IN PARAGRAPH 42 (B) THEORETICALLY COULD BID IN THE ALTERNATIVE OR ON BOTH BASES, ESPECIALLY SINCE THE INVITATION DOES NOT EXPRESSLY LIMIT OR PRESCRIBE SUCH BIDDERS FROM RESPONDING TO THE INVITATION ON THE ALTERNATE BASIS.

HOWEVER, WHILE IT WOULD APPEAR THAT YOU WERE ENTITLED TO BID IN THE ALTERNATE UNDER "A" OR "B," YOUR BID UNDER "B" COULD ONLY BE REGARDED AS RESPONSIVE IF, IN FACT, GOVERNMENT SPECIAL TOOLING WAS TO BE MADE AVAILABLE TO YOU FOR PURPOSES OF PRODUCING THE RADOMES. IN THAT CONNECTION, SECTION 13-301 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT: "WHERE A CONTRACT IS TO BE ENTERED INTO AS A RESULT OF FORMAL ADVERTISING, SPECIAL TOOLING TO BE FURNISHED BY THE GOVERNMENT SHALL BE STATED IN THE INVITATION FOR BIDS.' THE INSTANT INVITATION WAS SILENT IN THAT RESPECT. WE HAVE ASCERTAINED THAT NEITHER THE CONTRACTING OFFICER NOR THE ROME AIR FORCE BASE HAD ANY INTENTION THAT SPECIAL TOOLING WOULD BE PROVIDED ANY PROSPECTIVE BIDDER, OTHER THAN THOSE ALREADY HAVING SUCH TOOLING. ONLY TWO SOURCES WERE KNOWN TO HAVE SPECIAL TOOLING, AND THE TOOLING OF ONE OF THESE WAS CONSIDERED INADEQUATE FOR RADOME PRODUCTION. THE OTHER SOURCE IS CURRENTLY USING THE SPECIAL TOOLING IN ITS POSSESSION TO PERFORM ANOTHER CONTRACT FOR RADOMES. HENCE, YOUR BID UNDER "B" HAVING BEEN PREDICATED ON THE BASIS THAT SPECIAL TOOLING WOULD BE FURNISHED, AND SINCE BID "B" HAS REFERENCE TO "NO CHARGE USE OF AVAILABLE SPECIAL TOOLING," NO EVALUATION BASIS EXISTED FOR CONSIDERATION OF YOUR BID "B.' SINCE YOUR BID UNDER "B" MUST BE CONSIDERED AS HAVING BEEN CONDITIONED UPON THE FURNISHING OF SPECIAL TOOLING--- WHICH WAS NEVER INTENDED TO BE MADE AVAILABLE TO YOU OR OTHER BIDDERS IN THE SAME CATEGORY --- WE FIND NO SUBSTANTIAL BASIS FOR QUESTIONING THE PROPOSED AWARD TO LONG SAULT.

WITH RESPECT TO THE ELIGIBILITY OF THE PARSON CORPORATION TO PARTICIPATE IN THE SET-ASIDE PORTION OF THE PROCUREMENT, IT IS OUR UNDERSTANDING THAT THE SMALL BUSINESS ADMINISTRATION HAS CERTIFIED PARSONS AS A SMALL BUSINESS FIRM, EFFECTIVE MAY 28, 1958, FOR THE PRODUCTION OF RADOMES. UNDER 15 U.S.C. 642 (B), THE PROCUREMENT AGENCY MUST ACCEPT AS CONCLUSIVE THE DETERMINATION OF THE SMALL BUSINESS ADMINISTRATION THAT A PARTICULAR FIRM IS SMALL BUSINESS. IN VIEW THEREOF, OUR OFFICE WOULD NOT BE JUSTIFIED IN CONSIDERING THE QUESTION AS TO THE SMALL BUSINESS STATUS OF PARSONS. SEE B-134574, APRIL 15, 1958, 37 COMP. GEN. 679.