B-143567, SEP. 8, 1960

B-143567: Sep 8, 1960

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO PHIPPS PRODUCTS CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF JULY 22. YOUR BID IT WAS STATED THAT THE PLACE OF ORIGIN OF THE SUPPLIES OFFERED WAS PHILADELPHIA. IT WAS STATED ALSO THAT THE SUPPLIES WOULD NOT BE FURNISHED FROM STOCK. THAT THE PRINCIPAL MANUFACTURER WAS "PHIPPS PRODUCTS CORP. THAT THE LOCATION OF ARTICLES TO BE INSPECTED WAS 7TH AND FISHERS AVENUE. THE FILE SHOWS THAT IN ACCORDANCE WITH THE USUAL PRACTICE IN SIMILAR CASES A PREAWARD SURVEY OF YOUR CORPORATION WAS REQUESTED BY THE CONTRACTING OFFICER FROM THE INSPECTOR OF NAVAL MATERIAL. IN THE INSPECTOR'S REPORT IT WAS STATED THAT YOUR CORPORATION HAD NO DETERGENT IN STOCK AND WAS NOT A MANUFACTURER AND THAT THE FACILITIES AVAILABLE TO YOU WERE ON A .

B-143567, SEP. 8, 1960

TO PHIPPS PRODUCTS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF JULY 22, 1960, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION NO. IFB-155-/4-5/-2159-60 ISSUED BY THE U.S. NAVY GENERAL STORES SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

THE INVITATION REQUESTED BIDS--- TO BE OPENED FEBRUARY 15, 1960--- FOR FURNISHING 16,620 GALLONS OF GENERAL PURPOSE DETERGENT CONFORMING TO SPECIFICATION MIL-D-16791C. YOU SUBMITTED THE LOW BID ON THREE ITEMS. YOUR BID IT WAS STATED THAT THE PLACE OF ORIGIN OF THE SUPPLIES OFFERED WAS PHILADELPHIA, PENNSYLVANIA. IT WAS STATED ALSO THAT THE SUPPLIES WOULD NOT BE FURNISHED FROM STOCK; THAT THE PRINCIPAL MANUFACTURER WAS "PHIPPS PRODUCTS CORP. C/O GLOBE SOLVENTS CO, 7TH AND FISHERS AVE., PHILA, PA.' AND THAT THE LOCATION OF ARTICLES TO BE INSPECTED WAS 7TH AND FISHERS AVENUE, PHILADELPHIA, PENNSYLVANIA.

THE FILE SHOWS THAT IN ACCORDANCE WITH THE USUAL PRACTICE IN SIMILAR CASES A PREAWARD SURVEY OF YOUR CORPORATION WAS REQUESTED BY THE CONTRACTING OFFICER FROM THE INSPECTOR OF NAVAL MATERIAL, BOSTON, MASSACHUSETTS. IN THE INSPECTOR'S REPORT IT WAS STATED THAT YOUR CORPORATION HAD NO DETERGENT IN STOCK AND WAS NOT A MANUFACTURER AND THAT THE FACILITIES AVAILABLE TO YOU WERE ON A ,RENT, LEASED OR AS ARRANGED BASIS.' IT WAS STATED, ALSO, THAT SINCE YOU DECLINED TO FURNISH INFORMATION AS TO YOUR SOURCES FOR RAW MATERIALS NO COMMENT COULD BE MADE AS TO THE EXISTENCE OF ,REASONABLE FIRM MATERIAL COMMITMENTS.' IN THE REPORT IT WAS STATED FURTHER THAT THE REPORTING OFFICE HAD NO RECORD OF YOUR PERFORMANCE FOR THE PAST TWO YEARS BUT THAT IN THE PAST YOU HAD BEEN DELINQUENT ON SEVERAL CONTRACTS, DUE PRIMARILY TO "SHOPPING" FOR LOWER SUPPLIER COSTS AFTER RECEIPT OF THE CONTRACTS.

THE CONTRACTING OFFICER INQUIRED OF THE DEPARTMENT OF LABOR AS TO WHETHER YOUR CORPORATION QUALIFIED FOR AWARDS UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT. ON JUNE 3, 1960, A TELEPHONE CALL TO THE DEPARTMENT OF LABOR ELICITED THE INFORMATION THAT THE DEPARTMENT NO LONGER MADE PREAWARD DETERMINATIONS AS TO THE ELIGIBILITY OF FIRMS AND THAT THE INITIAL DETERMINATION MUST BE MADE BY THE CONTRACTING OFFICER. IN THE MEANTIME, IN YOUR LETTER OF APRIL 18, 1960, YOU STATED THAT A REPRESENTATIVE OF THE DEPARTMENT OF LABOR HAD ADVISED YOU THAT YOU WERE REGARDED AS A DEALER AND NOT A MANUFACTURER.

THE CONTRACTING OFFICER INQUIRED OF THE INSPECTOR OF NAVAL MATERIAL, BOSTON, AS TO WHETHER YOUR CORPORATION QUALIFIED AS A REGULAR DEALER WITHIN THE MEANING OF THE WALSH-HEALEY ACT AND WAS ADVISED SUBSEQUENTLY THAT YOU WOULD MORE PROPERLY BE CLASSIFIED AS A JOBBER. IN A LETTER DATED JULY 1, 1954, TO YOU, THE ACTING REGIONAL DIRECTOR, DEPARTMENT OF LABOR, BOSTON, MASSACHUSETTS, STATED THAT YOUR CORPORATION QUALIFIED "AS REGULAR DEALERS IN GENERAL CHEMICAL PRODUCTS, LACQUER AND DOPE THINNERS, AND PETROLEUM PRODUCTS (OTHER THAN GASOLINE).' HOWEVER, THE ADMINISTRATIVE OFFICE DETERMINED THAT THE LAPSE OF TIME PRECLUDED ACCEPTANCE OF THE 1954 DETERMINATION AS CONTROLLING IN THE INSTANT MATTER.

ON JUNE 27, 1960, YOUR TREASURER WAS ADVISED OF THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR CORPORATION DID NOT QUALIFY AS A MANUFACTURER OR DEALER IN DETERGENTS BUT THAT AWARD WOULD BE WITHHELD FOR A REASONABLE PERIOD OF TIME TO PERMIT APPEAL TO THE DEPARTMENT OF LABOR. SUBSEQUENTLY, YOU WERE ADVISED THAT THE NEED FOR THE DETERGENTS WOULD REQUIRE THAT AWARD BE MADE NO LATER THAN JULY 18, 1960. ON JULY 12, 1960, YOU SUBMITTED TO THE DEPARTMENT OF LABOR AN APPEAL IN THE MATTER. ON JULY 19, 1960, WITH THE APPROVAL OF THE CONTRACT REVIEW BOARD, AWARD WAS MADE TO OCTAGON PROCESS, INC. (CONTRACT NO. N155 52868), LEAVING OPEN FOR SUBSEQUENT AWARD TO YOU ANOTHER PENDING PROCUREMENT UNDER INVITATION NO. IFB-155-/4-5/-2681 -60 IF THE DEPARTMENT OF LABOR DETERMINED YOUR CORPORATION TO BE ELIGIBLE.

WE CONSISTENTLY HAVE HELD THAT THE QUESTION OF THE QUALIFICATIONS OF A PROSPECTIVE CONTRACTOR PRIMARILY IS FOR DETERMINATION BY THE ADMINISTRATIVE OFFICERS CONCERNED AND SUCH DETERMINATION WILL NOT BE QUESTIONED BY US IN THE ABSENCE OF A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE FACTUAL BASIS THEREFOR. 39 COMP. GEN. 468; 38 ID. 131; ID. 778; 37 ID. 430; ID. 676; ID. 798; 36 ID. 42. IN THE INSTANT MATTER, THE INFORMATION SHOWN IN THE FILE INDICATES THAT THE ADMINISTRATIVE OFFICERS MADE HONEST AND PERSISTENT EFFORTS TO OBTAIN INFORMATION ON WHICH TO BASE A DETERMINATION AS TO WHETHER YOUR CORPORATION PROPERLY COULD BE REGARDED AS A MANUFACTURER OR REGULAR DEALER IN DETERGENTS AND THAT THE AWARD TO ANOTHER BIDDER WAS MADE ONLY WHEN THE NEED FOR THE DETERGENTS REQUIRED THAT AWARD BE MADE WITHOUT FURTHER DELAY.

IN VIEW OF THE FOREGOING, IT APPEARS THAT THE ACTIONS OF THE ADMINISTRATIVE OFFICERS WERE TAKEN IN GOOD FAITH, AFTER CAREFUL CONSIDERATION, FOR THE PURPOSE OF SERVING THE BEST INTERESTS OF THE GOVERNMENT, AND THAT THERE WAS A REASONABLE BASIS FOR SUCH ACTIONS. ACCORDINGLY, THERE IS NOT PERCEIVED ANY PROPER BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE ADMINISTRATIVE OFFICE ..END :