B-142979, JUL. 25, 1960

B-142979: Jul 25, 1960

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WAS AUTHORIZED UNDER THE PROVISIONS OF 10 U.S.C. 2304 (A) (10) TO INVITE COMPETITIVE PROPOSALS FROM QUALIFIED MANUFACTURERS AND TO NEGOTIATE A CONTRACT FOR THE REHABILITATION OF 24 CUMMINS ENGINES. PROPOSALS WERE FORWARDED TO FOUR MANUFACTURERS. IT IS REPORTED THAT TIMELY DELIVERY OF THE ENGINE-GENERATOR UNITS AND ASSOCIATED SWITCHGEAR REQUESTED UNDER THE PROPOSAL WAS OF VITAL IMPORTANCE TO THE SUCCESSFUL COMPLETION OF CONSTRUCTION OF CRITICAL DEFENSE FACILITIES TO MEET ESTABLISHED OPERATIONAL DATES. TIMELY DELIVERY WAS CONSIDERED TO BE A MAJOR FACTOR AND ONE OF THE PRIME REASONS FOR NEGOTIATION. BIDDERS WERE TOLD IN THE PROPOSAL THAT THE EQUIPMENT TO BE FURNISHED WAS FOR AN ESSENTIAL PRIORITY PROJECT.

B-142979, JUL. 25, 1960

TO EUCLID EQUIPMENT, INC.:

WE REFER TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT UNDER INVITATION NO. (NEG/ENG-95-507-60-57, ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, ALASKA, ON APRIL 23, 1960.

THE RECORD SHOWS THAT THE U.S. ARMY ENGINEER DISTRICT, ALASKA, WAS AUTHORIZED UNDER THE PROVISIONS OF 10 U.S.C. 2304 (A) (10) TO INVITE COMPETITIVE PROPOSALS FROM QUALIFIED MANUFACTURERS AND TO NEGOTIATE A CONTRACT FOR THE REHABILITATION OF 24 CUMMINS ENGINES, PURCHASE OF 24 ALTERNATORS AND EXCITERS, 4 SETS OF SWITCHGEAR AND STARTING AIR SYSTEMS, AND 4 SETS OF SPECIAL TOOLS, ALL DESCRIBED IN THE DETAILED SPECIFICATIONS. PROPOSALS WERE FORWARDED TO FOUR MANUFACTURERS, SELECTED DUE TO THEIR EXPRESSED INTEREST IN A SIMILAR PROCUREMENT, WITH INSTRUCTIONS TO RETURN BY MAY 6, 1960. OF THOSE SELECTED, ONLY CUMMINS ENGINE COMPANY, INC., SUBMITTED A PROPOSAL AND, IN ADDITION, EUCLID EQUIPMENT, INC., ALTHOUGH NOT ON THE SELECTED LIST, SUBMITTED A PROPOSAL. THESE TWO COMPANIES SUBMITTED THE ONLY RESPONSES RECEIVED.

IT IS REPORTED THAT TIMELY DELIVERY OF THE ENGINE-GENERATOR UNITS AND ASSOCIATED SWITCHGEAR REQUESTED UNDER THE PROPOSAL WAS OF VITAL IMPORTANCE TO THE SUCCESSFUL COMPLETION OF CONSTRUCTION OF CRITICAL DEFENSE FACILITIES TO MEET ESTABLISHED OPERATIONAL DATES. TIMELY DELIVERY WAS CONSIDERED TO BE A MAJOR FACTOR AND ONE OF THE PRIME REASONS FOR NEGOTIATION. BIDDERS WERE TOLD IN THE PROPOSAL THAT THE EQUIPMENT TO BE FURNISHED WAS FOR AN ESSENTIAL PRIORITY PROJECT, NECESSARY TO THE DEFENSE OF THE COUNTRY, AND THAT IT WAS IMPERATIVE THAT DELIVERY DATES BE RIGIDLY ADHERED TO. THE INVITATION SPECIFIED THAT ALL EQUIPMENT WAS TO BE DELIVERED F.O.B. SEATTLE, WASHINGTON, NO LATER THAN AUGUST 15, 1960.

EUCLID EQUIPMENT, INC., SUBMITTED A PROPOSAL IN THE AMOUNT OF$673,498.24, WHILE CUMMINS ENGINE COMPANY, INC., SUBMITTED A PROPOSAL IN THE AMOUNT OF $836,388. BOTH PROPOSALS WERE CONSIDERED NONRESPONSIVE BY VIRTUE OF NOT MEETING THE REQUIRED SCHEDULE OF DELIVERY. THE FIRST NEGOTIATION WAS WITH EUCLID BY TELEPHONE ON MAY 9, 1960, AT WHICH TIME EUCLID WAS REQUESTED TO QUOTE ADDITIONAL COSTS ON CERTAIN CONTINGENT ITEMS IN ITS PROPOSAL AND TO ADVISE ITS BEST POSSIBLE DELIVERY CAPABILITY. A REPLY WAS MADE BY TELEPHONE ON MAY 10, 1960, CONFIRMED BY TELETYPE ON MAY 11, 1960, IN WHICH THE ADDITIONAL COST FIGURES WERE SUPPLIED, AND EUCLID ADVISED THAT ALTHOUGH AN EFFORT WOULD BE MADE TO IMPROVE ON THEIR PROMISED DELIVERY OF AUGUST 22, 1960, THROUGH OCTOBER 31, 1960, F.O.B., SEATTLE, WASHINGTON, THEY COULD NOT PROMISE ANY EARLIER DATES.

AN ADMINISTRATIVE EVALUATION WAS MADE OF THE ADDED COSTS WHICH COULD ACCRUE TO THE GOVERNMENT DUE TO DELAY IN THE CONSTRUCTION OF THE DEFENSE FACILITY SITES CAUSED BY LATE DELIVERY OF THE OPERATING UNITS TO BE FURNISHED UNDER THE PROPOSED CONTRACT. IT WAS ESTIMATED THAT$386,000 IN ADDITIONAL COST MIGHT BE INCURRED BY THE GOVERNMENT IF EUCLID'S PROPOSED DELIVERY SCHEDULE WERE FOLLOWED RATHER THAN THE DELIVERY DATES ANTICIPATED BY THE GOVERNMENT. BASED ON THE FOREGOING, IT WAS DETERMINED THAT THE EUCLID PROPOSAL WAS UNSATISFACTORY AND THAT FURTHER NEGOTIATIONS WERE FRUITLESS UNLESS THE OTHER OFFEROR COULD NOT PROVIDE SATISFACTORY SERVICE. ON MAY 12, 1960, NEGOTIATIONS WERE UNDERTAKEN WITH CUMMINS. CERTAIN UPWARD REVISIONS OF PRICE OVER THE BASIC FIGURE OF ITS PROPOSAL WERE MADE AND IT WAS AGREED THAT COMPLETE DELIVERY COULD BE ACCOMPLISHED, F.O.B. SEATTLE, WASHINGTON, BY AUGUST 21, 1960. AN AWARD WAS MADE TO CUMMINS ENGINE COMPANY, NC., IN THE TOTAL AMOUNT OF $853,060, ON MAY 13, 1960.

EUCLID PROTESTS THE AWARD OF A CONTRACT AT A PREMIUM PRICE ON THE BASIS OF EARLIER DELIVERY, ALLEGING THAT THE DELIVERY PROPOSED IS UNREALISTIC AND THAT IT WAS NOT GIVEN AN OPPORTUNITY TO FURTHER NEGOTIATE IN PERSON.

THE ADMINISTRATIVE OFFICE CONCLUDED THAT EARLY DELIVERY TO THE GOVERNMENT IN ACCORDANCE WITH THE CONTRACT SCHEDULE WAS ESSENTIAL IN THIS CASE AND THAT CUMMINS ENGINE COMPANY, INC., HAS A RECORD OF GOOD PERFORMANCE AND THE CAPABILITY TO PERFORM IN COMPLIANCE WITH THE AGREED DELIVERY SCHEDULE.

IN A NEGOTIATED PROCUREMENT, THE RULES OF FORMALLY ADVERTISED COMPETITIVE BIDDING ARE NOT APPLICABLE AND THE NEGOTIATING AUTHORITY MAY LEGALLY TAKE INTO CONSIDERATION ALL FACTORS DEEMED ESSENTIAL TO THE ACCOMPLISHMENT OF THE PROCUREMENT. FURTHERMORE, BONA FIDE DETERMINATIONS UNDER THE NEGOTIATING AUTHORITY LEGALLY MAY NOT BE QUESTIONED WHEN ANY REASONABLE GROUND FOR SUCH A DETERMINATION EXISTS. ONE OF THE PRIMARY REASONS FOR NEGOTIATING THIS PARTICULAR PROCUREMENT APPEARS TO HAVE BEEN THAT EARLY DELIVERY WAS ESSENTIAL TO THE GOVERNMENT AND COULD NOT BE OBTAINED THROUGH FORMAL ADVERTISEMENT. IT WAS ADMINISTRATIVELY DETERMINED THAT CUMMINS ENGINE COMPANY, C., IS CAPABLE OF PROVIDING A SATISFACTORY SCHEDULE OF DELIVERY. YOUR COMPANY HAD AMPLE NOTICE THAT THE GOVERNMENT CONSIDERED EARLY DELIVERY ESSENTIAL AND YOU WERE AFFORDED A REASONABLE OPPORTUNITY TO BETTER YOUR OFFER. IN THIS INSTANCE ANY FURTHER NEGOTIATIONS WITH YOU APPARENTLY WOULD NOT HAVE RESULTED IN AN OFFER OF DELIVERY ACCEPTABLE TO THE GOVERNMENT.

ACCORDINGLY, WE FIND NO BASIS TO QUESTION THE ACTION OF THE ADMINISTRATIVE OFFICE IN AWARDING THE CONTRACT TO CUMMINS ENGINE COMPANY, INC. ..END :