B-144816, FEB. 24, 1961

B-144816: Feb 24, 1961

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WHICH MATTER IS THE SUBJECT OF A REPORT OF FEBRUARY 8. THE INVITATION WAS ISSUED ON NOVEMBER 28. ADJUSTED TO REFLECT TRANSPORTATION AND OTHER COST FACTORS WHICH WERE CONSIDERED IN EVALUATING BIDS ON THE NON-SET-ASIDE PORTION. DESTINATION POINTS FOR THE TOTAL REQUIREMENT WERE SPECIFIED AS SAN DIEGO. DESTINATION) "4 BIDS ON ALL ITEMS ARE INVITED ON THE BASIS OF "BID A" AND "BID B" EXCEPT ITEMS 1 (A) AND 1 (B) WHICH ARE INVITED ON "BID A" BASIS ONLY. BID OPENING WAS HELD ON JANUARY 4. 4 BIDS WERE RECEIVED AND TABULATED AS FOLLOWS: TABLE BID A/FOB ORIGIN) (BID B/FOB DESTINATION) 20. DESTINATION BASIS (THE INVITATION SCHEDULE WAS SO PREPARED). THE CONTRACTING OFFICER STATES THAT THE RESTRICTION WAS INITIALLY DETECTED WHEN IT WAS OBSERVED THAT THE BID OF GEORGE SENN.

B-144816, FEB. 24, 1961

TO SECRETARY OF THE NAVY:

WE REFER TO THE TELEGRAM OF JANUARY 13, 1961, FROM HARLEY SOAP COMPANY, PROTESTING AGAINST THE REJECTION OF ITS BID FOR PURPOSES OF NEGOTIATION UNDER THE SET-ASIDE PORTION OF INVITATION FOR BIDS NO. 155 (4-6) 1582-61, WHICH MATTER IS THE SUBJECT OF A REPORT OF FEBRUARY 8, 1961 (REF. R11.1) FORWARDED TO THIS OFFICE FROM YOUR DEPARTMENT.

THE INVITATION WAS ISSUED ON NOVEMBER 28, 1960, BY THE MILITARY INDUSTRIAL SUPPLY AGENCY, PHILADELPHIA, PENNSYLVANIA, AND CALLED FOR THE PROCUREMENT OF 40,000 GALLONS OF PAINT REMOVER. IT ADDITIONALLY PROVIDED THAT A QUANTITY OF 55,000 GALLONS HAD BEEN SET ASIDE FOR AWARD TO ONE OR MORE SMALL BUSINESS FIRMS. WITH REGARD TO THE SET ASIDE PORTION, THE INVITATION PROVIDED, IN ACCORDANCE WITH AUTHORITY CONTAINED IN 10 U.S.C. 2304 (A) (17) AND 15 U.S.C. 644, THAT NEGOTIATIONS FOR THE SET-ASIDE AWARD WOULD BE CONDUCTED ONLY WITH SMALL BUSINESS CONCERNS SUBMITTING RESPONSIVE BIDS ON THE NON-SET ASIDE PORTION AT A UNIT PRICE WITHIN 120 PERCENT OF THE HIGHEST AWARD MADE ON THE NON-SET-ASIDE PORTION; AND THAT THE SET- ASIDE PORTION WOULD BE AWARDED AT THE HIGHEST UNIT PRICE AWARDED FOR THE NON-SET ASIDE PORTION, ADJUSTED TO REFLECT TRANSPORTATION AND OTHER COST FACTORS WHICH WERE CONSIDERED IN EVALUATING BIDS ON THE NON-SET-ASIDE PORTION.

ON BOTH THE SET-ASIDE AND NON-SET-ASIDE PORTION, DESTINATION POINTS FOR THE TOTAL REQUIREMENT WERE SPECIFIED AS SAN DIEGO, CALIFORNIA AND OAKLAND, CALIFORNIA, RESPECTIVELY IDENTIFIED IN THE INVITATION AS ITEM NO. 1 (A) AND ITEM NO. 1 (B). PARAGRAPH 104-4 (PAGE NO. 9 OF THE INVITATION) FURTHER PROVIDED IN PART AS FOLLOWS:

"104- BID A (F.O.B. ORIGIN) AND BID B (F.O.B. DESTINATION)

"4

BIDS ON ALL ITEMS ARE INVITED ON THE BASIS OF "BID A" AND "BID B" EXCEPT ITEMS 1 (A) AND 1 (B) WHICH ARE INVITED ON "BID A" BASIS ONLY. THE GOVERNMENT RESERVES THE RIGHT TO AWARD ON SUCH BASIS AS THE CONTRACTING OFFICER DETERMINES TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT.'

BID OPENING WAS HELD ON JANUARY 4, 1961, AND 4 BIDS WERE RECEIVED AND TABULATED AS FOLLOWS:

TABLE

BID A/FOB ORIGIN) (BID B/FOB DESTINATION)

20,000 GALLONS 20,000 GALLONS

ITEM ITEM

1/A) 1/B) 1/A) 1/B)

BIDDER ADDRESS

------ ------- ---------------------------------------- -- HARLEY SOAP CO. PHILA; PA. 1.34 1.31 THE CLARKSON

LAB., INC. CAMDEN, N.J. 1.66 1.66 1.71 1.69

(1.283/*/1.288/* TURCO PRODUCTS, WILMINGTON,

INC. CALIF. 1.25 1.25

(1.483/*/1.473/* GEORGE SENN, INC. PHILA.,PA. 1.23 1.23

* COST OF TRANSPORTATION CONSIDERED.

THE CONTRACTING OFFICER ADVISES THAT IT HAD BEEN INTENDED TO INVITE BIDS ON THE SUBJECT INVITATION ON BOTH AN F.O.B. ORIGIN AND F.O.B. DESTINATION BASIS (THE INVITATION SCHEDULE WAS SO PREPARED). HOWEVER, THROUGH AN ADMINISTRATIVE ERROR, INSERTIONS UNDER PARAGRAPH 104.4 RESULTED IN RESTRICTING BIDS TO AN F.O.B. ORIGIN BASIS. THE CONTRACTING OFFICER STATES THAT THE RESTRICTION WAS INITIALLY DETECTED WHEN IT WAS OBSERVED THAT THE BID OF GEORGE SENN, INC., CONTAINED THE FOLLOWING NOTATION IN THE "BID B/FOB DESTINATION) " COLUMN OF ITS BID SCHEDULE; "SEE PAR. 104-4 BIDS ON 1/A) AND 1/B) ARE INVITED ON BID A BASIS ONLY.' THE CONTRACTING OFFICER CONCLUDED THAT TURCO PRODUCTS, INC., A LARGE BUSINESS CONCERN, SUBMITTED THE LOWEST RESPONSIVE, RESPONSIBLE BID, COST OF TRANSPORTATION CONSIDERED, ON THE 40,000 GALLONS CALLED FOR UNDER NON-SET-ASIDE PORTION. HE ALSO CONCLUDED THAT THE AWARD PRICE WAS REASONABLE AND THAT CANCELLATION AND READVERTISEMENT WOULD UNDULY DELAY RECEIPT OF MATERIAL FOR WHICH AN EARLY REQUIREMENT EXISTS. ON THE BASIS OF THE FOREGOING, THE NON-SET ASIDE PORTION OF THE PROCUREMENT WAS AWARDED TO TURCO PRODUCTS, INC.

THE CONTRACTING OFFICER DETERMINED THAT THE HARLEY SOAP CO. BID WAS NON- RESPONSIVE BECAUSE IT OFFERED ONLY A DESTINATION PRICE, WHILE THE INVITATION REQUIRED AN ORIGIN PRICE. ON THAT BASIS HE CONCLUDED THAT GEORGE SENN, INC., WAS THE ONLY RESPONSIVE SMALL BUSINESS FIRM WITHIN 120 PERCENT OF THE AWARD PRICE OF THE ADVERTISED PORTION OF THE PROCUREMENT AND NEGOTIATION OF THE SET-ASIDE PORTION WAS INITIATED WITH THAT FIRM. GEORGE SENN, INC., DECLINED THE SET-ASIDE PORTION.

YOUR DEPARTMENT INFORMS US THAT DISSOLUTION OF THE SMALL BUSINESS SET- ASIDE AND FURTHER PROCUREMENT ACTION IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION, PARAGRAPH 1-706.7 IS BEING WITHHELD PENDING OUR DECISION ON THIS MATTER.

THE AWARD MADE ON THE NON-SET-ASIDE PORTION WAS BASED ON F.O.B. ORIGIN BIDS OF $1.25 PER UNIT FOR ITEM NO. 1 (A) AND $1.25 PER UNIT FOR ITEM NO. 1 (B). HARLEY SOAP CO., BID $1.34 PER UNIT ON ITEM NO. 1 (A) AND $1.31 PER UNIT ON ITEM NO. 1 (B) ON THE BASIS OF F.O.B. DESTINATION. THE HARLEY SOAP CO. BID PRICE IS WITHIN 120 PERCENT OF THE AWARD PRICE FOR THE NON- SET-ASIDE PORTION. WE DO NOT SEE HOW CONSIDERATION OF THE HARLEY SOAP CO. BID FOR PURPOSES OF NEGOTIATION UNDER THE SET-ASIDE COULD PREJUDICE ANY OF THE OTHER BIDDERS SINCE, ON ITS FACE, THE BID IS WITHIN 120 PERCENT OF THE AWARD PRICE AND THE DEVIATION (BID PRICE QUOTED F.O.B. DESTINATION INSTEAD OF F.O.B. ORIGIN) OBVIOUSLY WAS NOT TO ITS ADVANTAGE IN COMPUTING ITS BID PRICE. SEE 38 COMP. GEN. 708. THE HARLEY BID MAY, THEREFORE, PROPERLY BE CONSIDERED A RESPONSIVE BID FOR SET-ASIDE NEGOTIATION PURPOSES.

ACCORDINGLY, WE PERCEIVE NO OBJECTION TO CONSIDERATION OF THE BID SUBMITTED BY HARLEY SOAP CO., IN NEGOTIATING A SET-ASIDE CONTRACT INASMUCH AS THE SET-ASIDE HAS BEEN DECLINED BY GEORGE SENN, INC. ..END :