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B-145588, JUL. 7, 1961

B-145588 Jul 07, 1961
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ESQUIRE: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 11. YOU STATED THAT IN THE CASE OF ANOTHER PROTEST FORMAL ADVERTISED BIDDING WAS UTILIZED AND AWARD MADE TO A HIGH BIDDER WHEN LOWER RESPONSIVE BIDS HAD BEEN RECEIVED. THAT THE PROCURING AGENCY HAS NOW INVOKED "CONCEALED" NEGOTIATION IN A SUBSEQUENT PROCUREMENT FOR THE SAME ITEMS ALTHOUGH DEFINITIVE SPECIFICATIONS EXIST AND THERE IS AN ABUNDANCE OF COMPETITION. THE RECORD SHOWS THAT THE CITED REQUEST FOR PROPOSALS WAS ISSUED TO FOUR SUPPLIERS FOR FURNISHING 40 EACH. THIS PROCUREMENT WAS A REPURCHASE OF SUPPLIES COVERED BY CONTRACT NO. WHICH CONTRACT WAS TERMINATED BY FORMAL NOTICE OF TERMINATION DATED APRIL 21. THIS CHANGE WAS DENIED BY THE DEPARTMENT OF THE ARMY AND WESTERN URN AGREED TO HONOR ITS CONTRACT THROUGH A SUBCONTRACTOR.

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B-145588, JUL. 7, 1961

TO CLIVE H. BRAMSON, ESQUIRE:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 11, 1961, PROTESTING AGAINST THE ISSUANCE OF REQUEST FOR PROPOSALS NO. QM/MGS/-44 193-61-840 BY THE RICHMOND QUARTERMASTER DEPOT, RICHMOND, VIRGINIA, UNDER DATE OF MAY 8, 1961. AS A BASIS FOR YOUR PROTEST, YOU STATED THAT IN THE CASE OF ANOTHER PROTEST FORMAL ADVERTISED BIDDING WAS UTILIZED AND AWARD MADE TO A HIGH BIDDER WHEN LOWER RESPONSIVE BIDS HAD BEEN RECEIVED, AND THAT THE PROCURING AGENCY HAS NOW INVOKED "CONCEALED" NEGOTIATION IN A SUBSEQUENT PROCUREMENT FOR THE SAME ITEMS ALTHOUGH DEFINITIVE SPECIFICATIONS EXIST AND THERE IS AN ABUNDANCE OF COMPETITION. FOR THE REASONS STATED, YOU REQUESTED THAT THE RICHMOND QUARTERMASTER DEPOT BE DIRECTED TO TAKE CORRECTIVE ACTION.

THE RECORD SHOWS THAT THE CITED REQUEST FOR PROPOSALS WAS ISSUED TO FOUR SUPPLIERS FOR FURNISHING 40 EACH, COFFEE URNS, ITEM 1 THROUGH 3, TO CONFORM TO CERTAIN STATED SPECIFICATIONS. THIS PROCUREMENT WAS A REPURCHASE OF SUPPLIES COVERED BY CONTRACT NO. DA-33-031-QM-22420 WITH THE WESTERN URN MANUFACTURING COMPANY, WHICH CONTRACT WAS TERMINATED BY FORMAL NOTICE OF TERMINATION DATED APRIL 21, 1961, FOR FAILURE TO DELIVER ANY ITEMS CONFORMING TO THE SPECIFICATIONS BY THE REQUIRED DELIVERY DATE. AFTER THE AWARD OF THE CONTRACT, THE WESTERN URN MANUFACTURING COMPANY SOUGHT APPROVAL OF A CHANGE IN THE SPECIFICATIONS AUTHORIZING THE DELIVERY OF A SUBSTANTIALLY DIFFERENT URN FROM THAT REQUIRED TO BE FURNISHED. THIS CHANGE WAS DENIED BY THE DEPARTMENT OF THE ARMY AND WESTERN URN AGREED TO HONOR ITS CONTRACT THROUGH A SUBCONTRACTOR. IT WAS REPORTED THAT THE VICTORY COFFEE URN MANUFACTURING COMPANY WAS THE AUTHORIZED SUBCONTRACTOR UNDER THE INDICATED CONTRACT. HOWEVER, NEITHER WESTERN URN NOR VICTORY COFFEE MADE ANY DELIVERIES THEREUNDER.

THE DEPARTMENT OF THE ARMY REPORTS THAT CONTRACT NO. DA-33-031-QM 22420 WAS AWARDED AFTER FORMAL ADVERTISING UNDER INVITATION FOR BIDS NO. QM-33- 031-61-5, DATED JULY 8, 1960. THE INVITATION WAS MAILED TO 39 CONCERNS BUT ONLY THREE BIDS WERE RECEIVED, NAMELY, FROM THE WESTERN URN MANUFACTURING COMPANY, THE VICTORY COFFEE URN MANUFACTURING COMPANY, AND S. BLICKMAN, INC.

THE CONTRACTING OFFICER DETERMINED THAT PURSUANT TO THE PROVISIONS OF ARTICLE 11, GENERAL PROVISIONS, OF CONTRACT NO. DA-33-031-QM-22420, AND THE PROVISIONS OF ASPR 8-602.6 AND QMCPI 3-200.51, IT WAS IN THE BEST INTERESTS OF THE GOVERNMENT TO NEGOTIATE THE REPURCHASE OF THE ITEMS COVERED BY THE TERMINATED CONTRACT. ACCORDINGLY, REQUEST FOR PROPOSALS NO. QM/MGD/-44-193-61-840--- ON WHICH YOUR PROTEST WAS FILED -- WAS ISSUED UNDER DATE OF MAY 8, 1961, TO FOUR SUPPLIERS FOR AN IDENTICAL QUANTITY OF THE ITEMS COVERED BY THE TERMINATED CONTRACT. ONLY TWO PROPOSALS WERE RECEIVED, ONE FROM S. BLICKMAN, INC., AND THE OTHER FROM ANGELO COLONNA, INC. ACCEPTANCE OF ONE OF THESE PROPOSALS IS BEING WITHHELD PENDING OUR DISPOSITION OF YOUR PROTEST.

AS A MATTER OF INFORMATION, IT MAY BE POINTED OUT THAT THE ORIGINAL CONTRACT CALLED FOR COFFEE URNS UNDER INTERIM QMC PURCHASE DESCRIPTION S- 10-0, WHICH WAS SUBSEQUENTLY MODIFIED TO SUBSTITUTE INTERIM QMC PURCHASE DESCRIPTION S-215-0 FOR S-10-0. REQUEST FOR PROPOSALS NO. QM/MGS/-44-193- 61-840 SOLICITED PROPOSALS UNDER S-215-0.

ARMED SERVICES PROCUREMENT REGULATION, SECTION 8-602.6, PROVIDES, IN PART, AS FOLLOWS:

"/B) IF THE REPURCHASE IS FOR A QUANTITY NOT IN EXCESS OF THE UNDELIVERED QUANTITY TERMINATED FOR DEFAULT, THE REQUIREMENTS OF 10 U.S.C. 2304 (A), WITH RESPECT TO FORMAL ADVERTISING, ARE INAPPLICABLE. * * * IF THE CONTRACTING OFFICER DECIDES TO NEGOTIATE THE REPURCHASE CONTRACT, HE MAY EITHER (1) USE ANY AUTHORITY LISTED IN 3-201 THROUGH 3-217 (10 U.S.C. 2304 (A) (1/-/17), AS APPROPRIATE, * * *.'

UNDER THE FACTS REPORTED BY THE DEPARTMENT OF THE ARMY IN THIS CASE IT IS OUR VIEW THAT THE USE OF NEGOTIATION FOR THE PROCUREMENT OF THE DEFAULTED ITEMS WAS AUTHORIZED IN THE CITED REGULATIONS AS WELL AS IN ARTICLE 11 OF THE GENERAL PROVISIONS OF THE TERMINATED CONTRACT. IT MUST BE REMEMBERED THAT THE REPLACEMENT PURCHASE WAS NOT A PURCHASE ON BEHALF OF THE UNITED STATES BUT A PURCHASE FOR THE ACCOUNT OF WESTERN URN MANUFACTURING COMPANY, THE DEFAULTING CONTRACTOR. WE FIND NOTHING IN THE RECORD TO SUPPORT THE IMPLICATIONS OF YOUR STATEMENT THAT THE PROCURING AGENCY HAS INVOKED "CONCEALED" NEGOTIATIONS. IN OTHER WORDS, WE FEEL THAT THE ACTION TAKEN IN THIS MATTER WAS PROPERLY AUTHORIZED. ACCORDINGLY, YOUR PROTEST IS DENIED AND WE ARE SO ADVISING THE DEPARTMENT OF THE ARMY.

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