B-141265, JAN. 4, 1960

B-141265: Jan 4, 1960

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INC.: FURTHER REFERENCE IS MADE TO YOUR PROTEST OF NOVEMBER 12. IT IS YOUR CONTENTION GENERALLY THAT THE AWARDS APPEAR TO BE NEITHER FAIR NOR IN THE BEST INTERESTS OF THE GOVERNMENT. 000 UNITS WERE SET ASIDE FOR POSSIBLE PLACEMENT IN LABOR SURPLUS AREAS. NINE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND WERE OPENED ON AUGUST 3. AWARDS WERE MADE AS FOLLOWS ON SEPTEMBER 18. 000 WAS INSUFFICIENT TO COVER THE MAXIMUM QUANTITY BID UPON AS REQUIRED BY PARAGRAPH F OF THE INVITATION. CONSIDERATION OF YOUR BID WAS LIMITED TO THAT QUANTITY (INCLUDING DISCOUNT) COVERED BY THE PENAL SUM OF YOUR BID BOND OR 55. WE CANNOT AGREE THAT THE AWARDS MADE AT THE PRICES SET FORTH ABOVE WERE UNREASONABLE OR NOT IN THE INTERESTS OF THE GOVERNMENT.

B-141265, JAN. 4, 1960

TO PIONEER CANVAS PRODUCTS COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR PROTEST OF NOVEMBER 12, 1959, AGAINST THE AWARDS MADE UNDER THE UNRESTRICTED PORTION OF INVITATION FOR BIDS NO. QM/CTM/-36-243-59-894, DATED JUNE 24, 1959, AND THOSE MADE UNDER THE INVITATION SET-ASIDE PORTION FOR PLACEMENT IN LABOR SURPLUS AREAS. IT IS YOUR CONTENTION GENERALLY THAT THE AWARDS APPEAR TO BE NEITHER FAIR NOR IN THE BEST INTERESTS OF THE GOVERNMENT.

THE INVITATION, AS AMENDED, REQUESTED BIDS FOR THE MANUFACTURER AND DELIVERY OF 470,240 COMBAT FIELD PACKS, M-1956, F.O.B. ORIGIN AND/OR F.O.B. DESTINATION (235,280 FOR NEW CUMBERLAND GENERAL DEPOT AND 234,960 FOR UTAH GENERAL DEPOT). AN ADDITIONAL 118,000 UNITS WERE SET ASIDE FOR POSSIBLE PLACEMENT IN LABOR SURPLUS AREAS. NINE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND WERE OPENED ON AUGUST 3, 1959. THE F.O.B. ORIGIN PRICES ON THE UNRESTRICTED PORTION OF THE INVITATION RANGED FROM $1,907 TO $4.81 EACH, AND AWARDS WERE MADE AS FOLLOWS ON SEPTEMBER 18, 959:

TABLE

B. F. REIF CO., INC. 100,000 UNITS AT $1.907

THE BYER MFG. CO. 48,000 UNITS AT 2.10

THE WAGNER AWNING AND MFG. CO. 125,000 UNITS AT 2.14

PIONEER CANVAS PRODUCTS CO., INC. 55,600 UNITS AT2.18

EASTERN CANVAS PRODUCTS, INC. 31,680 UNITS AT 2.30

18,320 UNITS AT 2.30

50,000 UNITS AT 2.47

41,640 UNITS AT 2.65

IT APPEARS THAT YOU SUBMITTED A BID FOR A TOTAL QUANTITY OF 470,240 UNITS AT $2.18 PER UNIT OR A TOTAL BID PRICE OF $1,025,123.20. YOU ALSO STATED IN YOUR BID THAT 50,000 WOULD BE THE MINIMUM ACCEPTANCE QUANTITY. HOWEVER, SINCE THE BID BOND FURNISHED WITH YOUR BID IN THE PENAL SUM OF $60,000 WAS INSUFFICIENT TO COVER THE MAXIMUM QUANTITY BID UPON AS REQUIRED BY PARAGRAPH F OF THE INVITATION, CONSIDERATION OF YOUR BID WAS LIMITED TO THAT QUANTITY (INCLUDING DISCOUNT) COVERED BY THE PENAL SUM OF YOUR BID BOND OR 55,600 UNITS.

WE CANNOT AGREE THAT THE AWARDS MADE AT THE PRICES SET FORTH ABOVE WERE UNREASONABLE OR NOT IN THE INTERESTS OF THE GOVERNMENT. WHILE AN AWARD WAS MADE AT $2.65 PER UNIT, OTHER RESPONSIVE BIDS RANGED FROM THAT FIGURE TO $4.81 PER UNIT. CONSIDERING THE TRANSPORTATION COSTS INVOLVED FROM ORIGIN TO THE TWO DESTINATIONS NAMED IN THE INVITATION, IT IS CLEAR THAT THE AWARDS MADE TO THE LOWEST RESPONSIBLE RESPONSIVE BIDDERS AT THE LOWEST OVER-ALL COST TO THE GOVERNMENT.

YOU FURTHER CONTEND THAT THE SET-ASIDE PORTION OF THE INVITATION WAS AWARDED TO A BIDDER AT PRICES UP TO 30 PERCENT MORE THAN THAT PAID TO IT ON THE UNRESTRICTED PORTION, AND AT PRICES MUCH HIGHER THAN THOSE UNDER AWARDS TO THE MAJORITY OF BIDDERS UNDER THE UNRESTRICTED PORTION. WITH RESPECT TO THE PORTION SET ASIDE FOR PLACEMENT IN LABOR SURPLUS AREAS, THE INVITATION PROVIDED IN PART, AS FOLLOWS:

"NEGOTIATION FOR AWARD OF THE SET-ASIDE PORTION OF THIS PROCUREMENT WILL BE CONDUCTED ONLY WITH RESPONSIBLE CONCERNS DESCRIBED BELOW WHICH SUBMIT RESPONSIVE BIDS ON THE ADVERTISED PORTION AT A UNIT PRICE WITHIN 120 PERCENT OF THE HIGHEST AWARD MADE. NEGOTIATIONS SHALL PROCEED AMONG CONCERNS DESCRIBED BELOW IN THE ORDER OF PRIORITY LISTED:

"A. SMALL BUSINESS CONCERNS WHICH WILL PERFORM A SUBSTANTIAL PORTION OF THE CONTRACT IN LABOR SURPLUS AREAS, STARTING WITH THE LOWEST SUCH BIDDER OR OFFEROR.

"B. OTHER CONCERNS WHICH WILL PERFORM A SUBSTANTIAL PORTION OF THE CONTRACT IN LABOR SURPLUS AREAS, STATING WITH THE LOWEST SUCH BIDDER OR OFFEROR.

"C. SMALL BUSINESS CONCERNS NOT IN LABOR SURPLUS AREAS, STARTING WITH LOWEST SUCH BIDDER OR OFFEROR (TO BE UTILIZED ONLY IN THE EVENT FULL COVERAGE IS NOT OBTAINED IN LABOR SURPLUS AREAS).

"NOTWITHSTANDING THE ABOVE PROVISIONS, THE GOVERNMENT RESERVES THE RIGHT IN DETERMINING ELIGIBILITY OR PRIORITY FOR SET-ASIDE NEGOTIATIONS NOT TO CONSIDER TOKEN PRICES OR PRICES DESIGNED TO SECURE AN UNFAIR ADVANTAGE OF OTHER BIDDERS OR OFFERORS.'

PURSUANT TO THE SET-ASIDE PROCEDURES PRESCRIBED BY SECTION 1-804.2 OF THE ARMED SERVICES PROCUREMENT REGULATION, NEGOTIATIONS FOR THE SET ASIDE PORTION WERE REQUIRED TO BE CONDUCTED WITH THE LOWEST RESPONSIVE BIDDER ON THE UNRESTRICTED PORTION OF THE INVITATION ON THE BASIS OF THE HIGHEST UNIT PRICE AWARDED FOR THE UNRESTRICTED PORTION. HENCE, NEGOTIATIONS WERE UNDERTAKEN WITH B. F. REIF COMPANY, INC., THE LOWEST RESPONSIVE BIDDER, BASED UPON THE HIGHEST UNIT PRICE AWARDED TO EASTERN CANVAS PRODUCTS, INC., OF $2.30 PER UNIT FOR ITEMS DESTINED FOR NEW CUMBERLAND GENERAL DEPOT AND $2.65 PER UNIT FOR ITEMS DESTINED FOR UTAH GENERAL DEPOT. AWARDS OF THE SET-ASIDE PORTION WERE MADE TO REIF ON SEPTEMBER 28, 1959, FOR 59,200 UNITS AT $2.28628 AND 58,800 UNITS AT $2.60448, BOTH AWARDS BEING ON AN F.O.B. ORIGIN BASIS. THE DIFFERENCE IN UNIT PRICES REPRESENTS SAVINGS IN TRANSPORTATION COSTS BY REASON OF SHIPMENTS BEING MADE FROM THE CONTRACTOR'S SHIPPING POINT INSTEAD OF THE SHIPPING POINT OF EASTERN CANVAS PRODUCTS, INC. THUS, IT CAN BE SEEN BY REFERENCE TO THE INVITATION ITSELF AND TO THE REGULATION THAT THE SET-ASIDE PORTION WAS AWARDED IN ACCORDANCE WITH ESTABLISHED NEGOTIATION PROCEDURES. SEE, ALSO, THE PROVISIONS OF DEFENSE MANPOWER POLICY NO. 4 CODIFIED AT PAGES 71 ET SEQ. OF 32 A.C.F.R.

WITH FURTHER REGARD TO THE SET-ASIDE AWARD, YOU STATE THAT THE "* * * DAILY NEWS RECORD ON MONDAY 19, OCTOBER 1959 REPORTED A SPOKEMAN OF THE MCTSA AS SAYING THAT A BIDDER WHO IS AWARDED A CONTRACT ON ALL HE BIDS UPON, BUT DOES NOT BID UPON THE ENTIRE UNRESTRICTED PORTION, CANNOT BID UPON THE SET ASIDE.' THAT NEWS EXCERPT HAD REFERENCE TO SMALL BUSINESS SET-ASIDES AND INVOLVED A DISCUSSION RELATING TO SECTION 1-706.6 (D) OF THE ARMED SERVICES PROCUREMENT REGULATION, AS REVISED ON OCTOBER 1, 1959. HOWEVER, THE MATTERS DISCUSSED THEREIN HAVE NO RELEVANCE HERE WHERE THE INSTANT INVITATION DID NOT CONTAIN A NOTICE, SUCH AS IS NOW CONTAINED IN SECTION 1-804.2 (C) OF THE REGULATION, RELATING TO THE REQUIREMENT THAT A BIDDER INTERESTED IN THE SET-ASIDE PORTION MUST BID THE ENTIRE QUANTITY OF THE NON-SET ASIDE PORTION AND INDICATE SUCH ADDITIONAL QUANTITY AS IT DESIRES TO FURNISH. WE FIND NOTHING IN THIS INVITATION WHICH WOULD HAVE PRECLUDED AWARD OF THE SET-ASIDE TO REIF SOLELY BECAUSE IT FAILED TO BID UPON THE ENTIRE UNRESTRICTED PORTION OF THE PROCUREMENT. COMPARE 39 COMP. GEN. 17.

ACCORDINGLY, YOU ARE ADVISED THAT NO LEGAL BASIS EXISTS FOR DISTURBING THE AWARDS MADE UNDER ..END :