B-143877, NOV. 23, 1960

B-143877: Nov 23, 1960

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ESQUIRE: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 6. IT IS YOUR CONTENTION. THAT THE RFP THEREFORE IS UNDULY RESTRICTIVE. YOU CONTEND THAT ANY CONTEMPLATED NEGOTIATION OF A CONTRACT FOR THE SUPPLIES IS CONTRARY TO THE EXPRESSED POLICY OF THE CONGRESS. A FUNDAMENTAL OBJECTION WHICH YOU RAISE CONCERNS THE CONDITION IN PART XXII (D) OF THE REQUEST TO THE EFFECT THAT NO PROPOSAL WILL BE CONSIDERED UNLESS ACCOMPANIED BY A CERTIFICATE OF SANITARY COMPLIANCE APPROVED BY APPROPRIATE OFFICERS OF THE 16TH AIR FORCE. SUCH CONDITION PRECEDENT WAS MADE A PART OF THE INVITATION IN ACCORDANCE WITH ADMINISTRATIVE REGULATIONS. WE HAVE BEEN FURTHER ADVISED THAT AS A CONSEQUENCE OF SUCH DETERMINATION REQUEST FOR PROPOSALS NO. 61-325-R-60 86 WILL BE CANCELLED AND UPON RESOLICITATION SUCH REQUIREMENT WILL BE ELIMINATED.

B-143877, NOV. 23, 1960

TO DONALD S. DAWSON, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 6, 1960, WITH ENCLOSURES, AND TO SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE POSSIBLE REJECTION OF THE BID OF YOUR CLIENT, DERIVADOS LACTEOS, S.A., MADRID, SPAIN, SUBMITTED IN RESPONSE TO REQUEST FOR PROPOSALS NO. 61 325-R-60-86, COVERING THE FURNISHING OF RECONSTITUTED MILK AND MILK PRODUCTS TO THE UNITED STATES AIR FORCE. IT IS YOUR CONTENTION, IN SUBSTANCE, THAT THE TERMS OF THE REQUEST IMPOSE CERTAIN CONDITIONS AND REQUIREMENTS UPON POTENTIAL SUPPLIERS WHICH DISQUALIFY YOUR CLIENT AS AN ELIGIBLE BIDDER, AND THAT THE RFP THEREFORE IS UNDULY RESTRICTIVE. ALSO, YOU CONTEND THAT ANY CONTEMPLATED NEGOTIATION OF A CONTRACT FOR THE SUPPLIES IS CONTRARY TO THE EXPRESSED POLICY OF THE CONGRESS.

A FUNDAMENTAL OBJECTION WHICH YOU RAISE CONCERNS THE CONDITION IN PART XXII (D) OF THE REQUEST TO THE EFFECT THAT NO PROPOSAL WILL BE CONSIDERED UNLESS ACCOMPANIED BY A CERTIFICATE OF SANITARY COMPLIANCE APPROVED BY APPROPRIATE OFFICERS OF THE 16TH AIR FORCE. SUCH CONDITION PRECEDENT WAS MADE A PART OF THE INVITATION IN ACCORDANCE WITH ADMINISTRATIVE REGULATIONS, HOWEVER, UPON RECONSIDERATION OF THE INSTANT PROCUREMENT, AND HAVING REGARD FOR THE UNIQUE SITUATION HERE INVOLVED, AS DISTINGUISHED FROM SIMILAR DOMESTIC CONTRACTS, THE DEPARTMENT OF THE AIR FORCE HAS CONCLUDED THAT SUCH PREQUALIFICATION REQUIREMENT SHOULD BE WAIVED FOR THE PURPOSES OF THIS PROCUREMENT, AND SHOULD BE IMPOSED UPON THE SUCCESSFUL BIDDER AFTER AWARD AS A CONDITION PRECEDENT TO PERFORMANCE. WE HAVE BEEN FURTHER ADVISED THAT AS A CONSEQUENCE OF SUCH DETERMINATION REQUEST FOR PROPOSALS NO. 61-325-R-60 86 WILL BE CANCELLED AND UPON RESOLICITATION SUCH REQUIREMENT WILL BE ELIMINATED. WE CONCUR WITH THE CONCLUSIONS OF THE ADMINISTRATIVE OFFICE. SEE 38 COMP. GEN. 423.

IN VIEW OF THE FACT THAT THE SAID REQUEST FOR PROPOSALS, AGAINST WHICH YOU HAVE INTERPOSED CERTAIN OBJECTIONS, IS TO BE CANCELLED, THE QUESTIONS RAISED BY YOUR PROTEST BECOME ACADEMIC, AND NORMALLY WOULD REQUIRE NO FURTHER COMMENT BY THIS OFFICE. HOWEVER, SINCE THE NEW PROCUREMENT MAY RAISE SIMILAR QUESTIONS WE FEEL THAT AN EXPRESSION OF OUR VIEWS WITH RESPECT THERETO WOULD BE PROPER.

A FURTHER SUBJECT OF PROTEST CONCERNS THE AWARDING OF A CONTRACT BASED UPON THE USE OF CERTAIN GOVERNMENT-OWNED EQUIPMENT, FACILITIES, AND SERVICES. SINCE SUCH FACILITIES AND EQUIPMENT ARE PRESENTLY IN USE, AND PRESUMABLY WILL BE AVAILABLE FOR FUTURE OPERATIONS, IT WOULD SEEM UNREALISTIC TO US IF SUBSEQUENT SOLICITATIONS DID NOT INCLUDE A REQUEST FOR ALTERNATE PROPOSALS ON SUCH A BASIS, IF FOR NO OTHER REASON THAN TO AFFORD A FINANCIAL BASIS FOR DETERMINING WHETHER THE SAID EQUIPMENT AND FACILITIES SHOULD BE RETAINED FOR THOSE PURPOSES. WHILE THAT ARRANGEMENT MAY NOT BE EQUALLY ADVANTAGEOUS FOR ALL POTENTIAL SUPPLIERS, THE RIGHT TO SUBMIT SUCH ALTERNATE PROPOSALS IS OPEN TO COMPETITION. FURTHERMORE, IF A REASONABLE CHARGE IS MADE FOR THE USE OF ALL OF THE EQUIPMENT AND FACILITIES, AND SUCH AMOUNT IS TAKEN INTO CONSIDERATION IN THE EVALUATION OF THE BIDS, AS WE HAVE BEEN INFORMED WILL BE DONE, WE SEE NO LEGAL JUSTIFICATION FOR QUESTIONING A REQUEST FOR PROPOSALS ISSUED ON THAT BASIS.

IN REGARD TO YOUR CONTENTION THAT THE SUPPLIES SHOULD BE OBTAINED PURSUANT TO THE USUAL COMPETITIVE BIDDING PROCEDURES, SUCH QUESTIONS ARE FOR CONSIDERATION BY THE PROCUREMENT OFFICIALS INVOLVED. UNDER THE SPECIFIC AUTHORITY CONTAINED IN 10 U.S.C. 2304 (A) (6), COVERING FOREIGN PURCHASES, SUCH PROCEDURES MAY BE WAIVED IF IN THIS, OR ANY SIMILAR CASE, IT BE ADMINISTRATIVELY DETERMINED TO BE IN THE BEST INTERESTS OF THE UNITED STATES TO NEGOTIATE A CONTRACT. UNDER THOSE CIRCUMSTANCES WE COULD NOT OBJECT TO THAT METHOD OF PROCUREMENT.

WITH RESPECT TO THE QUESTION OF CONTRACT CONSIDERATION, PART XXIII OF THE REQUEST FOR PROPOSALS RESERVES IN THE GOVERNMENT THE RIGHT TO MAKE PAYMENT IN UNITED STATES DOLLARS OR SPANISH PESETAS, OR ANY COMBINATION THEREOF, TO BE DETERMINED BY THE CATEGORY OF THE CONTRACTOR'S COSTS IN EACH CURRENCY. WE AGREE WITH YOUR CONTENTION THAT SPANISH PESETAS SHOULD BE UTILIZED TO THE EXTENT POSSIBLE UNDER THE CONTRACT, FOR THE OBVIOUS BENEFIT OF THE GOVERNMENT, AND THE DEPARTMENT OF THE AIR FORCE HAS STATED THAT APPROPRIATE INSTRUCTIONS IN THAT REGARD WILL BE ISSUED. SINCE THE ABOVE STIPULATION DOES NOT APPEAR TO BE PREJUDICIAL, IN AND OF ITSELF, WE DO NOT FEEL JUSTIFIED IN RAISING ANY OBJECTION THERETO.

IN REGARD TO THE REMAINING POINTS INCLUDED IN YOUR PROTEST, WHICH MAY BE REGARDED AS OF MINOR IMPORT, THE RECORD DISCLOSES THAT THE QUESTION OF CONTRACTING ON A ONE-YEAR OR A THREE-YEAR BASIS WAS CORRECTED BY AMENDMENT NO. 2 TO THE REQUEST FOR PROPOSALS, WHICH PROVIDES FOR RENEWAL OF THE CONTRACT ON A YEARLY BASIS DEPENDENT UPON FUTURE CIRCUMSTANCES. AUTHORITY THEREFORE IS CONTAINED IN THE PREVIOUSLY MENTIONED PROVISION OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 10 U.S.C. 2304 (A) (6).

IN CONNECTION WITH THE QUESTION REPORTED TO HAVE BEEN RAISED WITH YOUR CLIENT BY ADMINISTRATIVE OFFICE PERSONNEL AS TO THE USE OF APPROVED INGREDIENTS, IT HAS BEEN REPORTED THAT SUCH MATTERS WILL BE HANDLED IN THE SAME MANNER AS THE SANITATION CERTIFICATE PREVIOUSLY REFERRED TO, THAT IS AS A POST-AWARD CONDITION, AND THEREFORE, IT IS ASSUMED THAT SUCH ACTION WILL OVERCOME YOUR OBJECTION THERETO. IT HAS ALSO BEEN REPORTED THAT THE READVERTISEMENT WILL ELIMINATE THE PERMISSIVE LANGUAGE OF THE REQUEST AS TO WHETHER THE SUCCESSFUL CONTRACTOR WILL BE REQUIRED TO FURNISH A PERFORMANCE BOND.

WE AGREE WITH YOUR CONTENTION THAT THE LANGUAGE EMPLOYED IN ANY REQUEST OR INVITATION SEEKING PROPOSALS OF BIDS SHOULD BE AS DEFINITE AS POSSIBLE. HOWEVER, THE USE OF THE QUALIFYING PHRASES ,MAY BE," OR "WILL BE SUBSTANTIALLY," IN NOTE 4C OF THE REQUEST FOR PROPOSALS, WAS DESIGNED TO ELIMINATE ANY CONTRACTUAL, OR GUARANTEED OBLIGATION ON THE PART OF THE DEPARTMENT OF THE AIR FORCE TO HAVE AVAILABLE AT ALL TIMES EACH AND EVERY EQUIPMENT ITEM OR FACILITY LISTED THEREIN. HOWEVER, WE ARE INFORMED THAT OFFERS UNDER THE NEW SOLICITATION MAY BE MADE ON THE BASIS THAT THE LISTED EQUIPMENT WILL BE FURNISHED OR AN EQUITABLE ADJUSTMENT MADE. WE DO NOT AGREE, UNDER THOSE CIRCUMSTANCES, THAT THE QUALIFYING TERMS SO USED ARE UNREASONABLE OR PREJUDICIAL.

UNDER THE TERMS OF THE REQUEST THE CONTRACTOR OBLIGATES ITSELF TO COMPLY WITH ALL APPLICABLE LAWS OF THE SPANISH GOVERNMENT, TO OBTAIN ALL NECESSARY REGULATORY LICENSES, AND TO ABIDE BY THE TERMS SET FORTH IN THE AGREEMENT ENTERED INTO BY THE GOVERNMENT OF THE UNITED STATES AND SPAIN. IN THAT CONNECTION, WE ARE INFORMED THAT A COPY OF SUCH AGREEMENT WILL BE MADE AVAILABLE TO ALL BIDDERS WHEN THE AMENDED SOLICITATION IS ISSUED. ONE OF THE TWO REMAINING OBJECTIONS INTERPOSED BY YOU RELATES TO PURCHASING POLICIES WHICH ARE MATTERS PRIMARILY FOR ADMINISTRATIVE DETERMINATION AND WOULD NOT BE CONSIDERED BY US IN THE ABSENCE OF A STATUTORY ENACTMENT. HOWEVER, IT MAY BE STATED THAT THE DEPARTMENT OF THE AIR FORCE POLICY TO FAVOR FOREIGN SOURCES IN OFFSHORE PROCUREMENTS HERETOFORE FOLLOWED, HAS BEEN MODIFIED BY DEPARTMENT OF DEFENSE DIRECTIVE NO. 4105.53, DATED OCTOBER 3, 1960, WHICH STIPULATES THAT PREFERENCE SHALL BE ACCORDED SOURCES OF SUPPLY IN THE UNITED STATES WHENEVER POSSIBLE.

YOUR FINAL CONTENTION AS SET FORTH IN LETTER OF SEPTEMBER 1, 1960, STATES THAT "MILK, CHOCOLATE, STERILIZED" CALLED FOR UNDER ITEMS NO. 4 AND 5 OF THE REQUEST, SHOULD BE FURNISHED IN GLASS OR METAL CONTAINERS IN KEEPING WITH THE BETTER TRADE PRACTICE. WE ARE INFORMED THAT THE DESCRIPTION OF THE ITEMS SHOULD HAVE READ "PASTEURIZED" INSTEAD OF "STERILIZED," WHICH IS PROPER IN THE CASE OF CARDBOARD CONTAINERS, AND WILL BE CORRECTED IN THE FUTURE PROCUREMENT. IN ANY EVENT, THE TYPE OF CONTAINER TO BE SPECIFIED AS BEST SUITING THE NEEDS OF THE AGENCY IS FOR DETERMINATION BY THE PROCUREMENT OFFICIALS RATHER THAN THE GENERAL ACCOUNTING OFFICE.

IT IS ASSUMED THAT CANCELLATION OF REQUEST FOR PROPOSALS NO. 61-325 R-60- 86, AND THE CORRECTIVE MEASURES TO BE TAKEN BY THE DEPARTMENT OF THE AIR FORCE UPON REPROCUREMENT, WILL SATISFACTORILY DISPOSE OF THOSE MATTERS IN YOUR PROTEST WHICH PRECLUDED YOUR CLIENT FROM QUALIFYING AS AN ELIGIBLE BIDDER.

A COPY OF THIS DECISION IS BEING FURNISHED TO THE SECRETARY OF THE AIR FORCE.