B-141974, APR. 19, 1960

B-141974: Apr 19, 1960

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RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF MARCH 22. FOUR BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION ON ITEM 1. YOUR BID QUOTING A UNIT PRICE OF $8.409 WAS LOW AND IT WAS SPECIFIED THEREIN THAT THE SHACKLES WOULD BE MANUFACTURED BY THE GARDINER MANUFACTURING COMPANY. THIS COMPANY SUBMITTED THE SECOND LOW BID OF $8.90 PER UNIT AND THE COMPANY WAS ALSO THE SOURCE OF SUPPLY FOR THE THIRD BIDDER. WAS NOT AN ACCEPTABLE SOURCE FOR THE MATERIAL. SINCE YOU WERE A DEALER AND MIGHT HAVE AN OPTIONAL ESTABLISHED SOURCE OF SUPPLY. NOTIFIED YOU THAT THE SOURCE OF SUPPLY STATED IN YOUR BID WAS NOT ACCEPTABLE AND GAVE YOU AN OPPORTUNITY TO NAME ANOTHER SOURCE ON OR BEFORE SEPTEMBER 21. THAT YOU DID NOT HAVE AN OPTIONAL ESTABLISHED SOURCE OF SUPPLY FOR THE ITEM.

B-141974, APR. 19, 1960

TO MANHATTAN LIGHTING EQUIPMENT COMPANY, INC.:

THE DEPARTMENT OF THE ARMY FORWARDED FOR OUR CONSIDERATION YOUR PROTEST CONCERNING THE REJECTION OF YOUR BID, UNDER INVITATION NO. TC 23-204-60- 16, AND THE AWARD OF NEGOTIATED CONTRACT NO. O.I. 4953-G-60, DATED OCTOBER 5, 1959, TO ANOTHER FIRM. RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF MARCH 22, 1960, CONCERNING THIS PROCUREMENT.

THE RECORD SHOWS THAT THE U.S. ARMY TRANSPORTATION SUPPLY AND MAINTENANCE COMMAND, ST. LOUIS, MISSOURI, BY INVITATION FOR BIDS NO. TC 23-204-60-16, ISSUED ON AUGUST 10, 1959, REQUESTED BIDS FOR FURNISHING QUANTITIES OF THREE TYPES OF STEEL SHACKLES, ITEMS 1 THROUGH 3. THE INVITATION RESTRICTED AWARDS TO SMALL BUSINESS CONCERNS AND REQUIRED BIDDERS TO SPECIFY THE NAME AND LOCATION OF THE FIRM WHERE THE SUPPLIES WOULD BE MANUFACTURED.

FOUR BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION ON ITEM 1, THE ONLY ITEM HERE INVOLVED. YOUR BID QUOTING A UNIT PRICE OF $8.409 WAS LOW AND IT WAS SPECIFIED THEREIN THAT THE SHACKLES WOULD BE MANUFACTURED BY THE GARDINER MANUFACTURING COMPANY, OAKLAND, CALIFORNIA. THIS COMPANY SUBMITTED THE SECOND LOW BID OF $8.90 PER UNIT AND THE COMPANY WAS ALSO THE SOURCE OF SUPPLY FOR THE THIRD BIDDER.

A PRE-AWARD SURVEY DISCLOSED THAT THE PROPOSED SUPPLIER HAD AN UNSATISFACTORY RECORD OF PAST AND CURRENT PERFORMANCE AND, THEREFORE, WAS NOT AN ACCEPTABLE SOURCE FOR THE MATERIAL. HOWEVER, SINCE YOU WERE A DEALER AND MIGHT HAVE AN OPTIONAL ESTABLISHED SOURCE OF SUPPLY, THE CONTRACTING OFFICER BY TELEGRAM OF SEPTEMBER 15, 1959, NOTIFIED YOU THAT THE SOURCE OF SUPPLY STATED IN YOUR BID WAS NOT ACCEPTABLE AND GAVE YOU AN OPPORTUNITY TO NAME ANOTHER SOURCE ON OR BEFORE SEPTEMBER 21, 1959.

BY LETTER DATED SEPTEMBER 16 YOU ADVISED, IN EFFECT, THAT YOU DID NOT HAVE AN OPTIONAL ESTABLISHED SOURCE OF SUPPLY FOR THE ITEM, BUT THAT YOU WERE NEGOTIATING WITH POSSIBLE SUPPLIERS. BY LETTER OF SEPTEMBER 24, YOU ADVISED THAT YOU WERE TRYING TO OBTAIN A SOURCE AND YOU HAD OBTAINED A PRICE ON A FOREIGN MADE ITEM. YOU APPARENTLY WERE AWARE, HOWEVER, THAT THE PROCUREMENT WAS RESERVED FOR SMALL BUSINESS AND THAT FOREIGN MADE PRODUCTS WOULD NOT BE ACCEPTABLE.

SINCE NO ACCEPTABLE BIDS HAD BEEN RECEIVED ON ITEM 1, AND IN VIEW OF THE RELATIVELY SMALL AMOUNT INVOLVED, THE CONTRACTING OFFICER AUTHORIZED THE PROCUREMENT OF THE ITEM BY NEGOTIATION. PURSUANT THERETO, THE CONTRACTING OFFICER INSTRUCTED A PURCHASING AGENT TO OBTAIN THE ITEM BY PURCHASE ORDER METHOD FROM COMPETITIVE SOURCES AND TO INCLUDE YOUR FIRM IN THE SOLICITATION WITH A FULL EXPLANATION THAT IT WAS A CONTINUANCE OF THE FORMAL ADVERTISED REQUIREMENT, WHICH HAD BEEN CLOSED OUT. ON SEPTEMBER 29 THE PURCHASING AGENT CALLED YOUR FIRM AND ADVISED YOU ACCORDINGLY, AND YOU AGAIN QUOTED THE SAME PRICE OF $8.409 WHICH YOU QUOTED IN YOUR FORMAL BID OF AUGUST 25, 1959, BUT APPARENTLY YOU STILL DID NOT HAVE AN ACCEPTABLE SOURCE FOR THE ITEM. ALSO, ON SEPTEMBER 29, THE PURCHASING AGENT OBTAINED A QUOTATION FROM THE BALDT ANCHOR, CHAIN AND FORGE DIVISION OF THE BOSTON METALS COMPANY, CHESTER, PENNSYLVANIA, OF $5.45 EACH FOR THE 145 UNITS TO BE DELIVERED TO THE NEW CUMBERLAND GENERAL DEPOT, NEW CUMBERLAND, PENNSYLVANIA, AND $6.45 EACH FOR THE 50 UNITS TO BE DELIVERED TO SHARPE GENERAL DEPOT, LATHROP, CALIFORNIA, OR FOR A TOTAL COST OF $1,112.75. THIS FIRM WAS AN ACCEPTABLE SOURCE AND, THEREFORE, YOU WERE ADVISED BY LETTER DATED SEPTEMBER 30 THAT YOU WERE UNSUCCESSFUL IN YOUR BID.

BY TELEGRAM OF OCTOBER 2, AND LETTERS OF OCTOBER 2 AND 9, 1959, YOU ADVISED THAT YOU HAD OBTAINED "A VERY REPUTABLE SUPPLIER, BALDT ANCHOR, CHAIN AND FORGE, CHESTER, PENNSYLVANIA. WE WILL APPRECIATE THE AWARD.' BY LETTER DATED OCTOBER 16, 1959, THE CONTRACTING OFFICER FULLY EXPLAINED THE SITUATION TO YOU AND ADVISED THAT SINCE THE GOVERNMENT, IN THE NEGOTIATION, HAD OBTAINED LOWER PRICES FROM BALDT ANCHOR, A PURCHASE ORDER HAD BEEN ISSUED TO THAT FIRM FOR THE ITEM.

YOUR PROTEST IN CONNECTION WITH THIS PROCUREMENT, AS SET FORTH IN YOUR SEVERAL LETTERS, IS NOT FULLY UNDERSTOOD. IN YOUR LETTER OF DECEMBER 19, 1959, ADDRESSED TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS, IT IS STATED IN PART AS FOLLOWS:

"WE ARE NOT MAKING THIS ALLEGATION, BUT IT IS POSSIBLE THAT, AFTER WE FURNISHED THIS AGENCY OUR NEW SOURCE OF SUPPLY, THAT IT SOLICITED PRICES DIRECT? WAS IT ETHICAL? HAS THE ACTIVITY THAT LEGAL AND MORAL RIGHT?

"IT SEEMS TO US THAT THE MAIN ISSUE HERE IS THAT THE ACTIVITY DID NOT HAVE THE RIGHT TO REJECT OUR BID FOR THE REASON CONTAINED IN ITS LETTER OF OCTOBER 2, 1959, NAMELY, THAT IT DID NOT CONSIDER OUR SUPPLIER A REPUTABLE CONCERN. * * *"

THE RECORD SHOWS THAT THE BALDT ANCHOR, CHAIN AND FORGE DIVISION OF THE BOSTON METALS COMPANY, CHESTER, PENNSYLVANIA, WAS ON THE BIDDERS LIST AND WAS SENT A COPY OF THE ORIGINAL INVITATION FOR BIDS OF AUGUST 10, 1959. THIS FIRM ADVISED AT THAT TIME THAT, WHILE THEY WERE NOT THEN IN A POSITION TO SUBMIT A QUOTATION ON THE INVITATION, THEY DESIRED THAT THEIR NAME BE RETAINED ON THE BIDDERS LIST. THE RECORD FURTHER SHOWS THAT, AFTER THE CANCELLATION OF THE INVITATION AS TO ITEM 1, THE GOVERNMENT OBTAINED A PRICE FROM THIS FIRM ON SEPTEMBER 29, 1959, OR PRIOR TO ANY NOTIFICATION FROM YOU THAT YOU PROPOSED THIS FIRM AS A SUPPLIER.

WITH RESPECT TO YOUR CONTENTION THAT THE CONTRACTING OFFICER DID NOT HAVE A RIGHT TO REJECT YOUR BID FOR THE REASON THAT YOUR SUPPLIER WAS DETERMINED TO BE NOT RESPONSIBLE, SECTION 1-906, ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT, TO THE EXTENT THAT A PROSPECTIVE CONTRACTOR PROPOSES TO PERFORM THE CONTRACT BY SUBCONTRACTING, DETERMINATIONS OF THE PROSPECTIVE SUBCONTRACTOR'S RESPONSIBILITY MAY BE NECESSARY IN ORDER TO DETERMINE THE RESPONSIBILITY OF THE PROSPECTIVE PRIME CONTRACTOR.

THERE IS NOTHING OF RECORD WHICH WOULD AFFORD ANY BASIS TO QUESTION THE AWARD MADE IN THIS CASE AND, THEREFORE, YOUR PROTEST IS DENIED.