B-147014, NOV. 2, 1961

B-147014: Nov 2, 1961

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TO HUDSON PULP AND PAPER CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 18. " ON WHICH QUOTATIONS ARE SUBMITTED. THESE SAMPLES WILL BE USED TO (1) ESTABLISH WHETHER OR NOT THE WEIGHT. WILL RESULT IN THE REJECTION OF THE BID. THE APPROVAL OF BID SAMPLES WILL NOT DETRACT FROM THE GOVERNMENT'S RIGHT TO TEST MATERIAL DELIVERED OR OFFERED FOR DELIVERY UNDER RESULTING CONTRACTS TO DETERMINE COMPLIANCE WITH THE SPECIFICATION AND THE ACCEPTED BID SAMPLES. NO LABELS OR STICKERS TO BE AFFIXED TO SAMPLE SHEETS. "/B) SULPHATE PAPER USED IN THE MANUFACTURE OF ENVELOPES SHALL BE OF A LIGHT COLOR OR SHADE SUBJECT TO THE APPROVAL OF THE CONTRACTING OFFICER. "/C) SAMPLES ARE TO BE SUBMITTED UNDER SEPARATE COVER TO GENERAL SERVICES ADMINISTRATION.

B-147014, NOV. 2, 1961

TO HUDSON PULP AND PAPER CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 18, 1961, PROTESTING IN BEHALF OF THE COMMERCIAL ENVELOPE MFG. CO., INC., THE AWARDS OF CONTRACTS TO OTHER BIDDERS UNDER INVITATION FOR BIDS ISSUED ON APRIL 25, 1961, BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION FOR FURNISHING ENVELOPES TO VARIOUS GOVERNMENT DEPARTMENTS AND AGENCIES DURING THE PERIOD FROM OCTOBER 1, 1961, THROUGH SEPTEMBER 30, 1962 (FSC GROUP 75, PART V, SECTION 1).

THE INVITATION REQUESTED BIDS FOR FURNISHING ESTIMATED QUANTITIES OF ENVELOPES TO VARIOUS DESTINATIONS AS SET OUT IN THE ACCOMPANYING SCHEDULE AND IN ACCORDANCE WITH CERTAIN SPECIFICATIONS. PARAGRAPH 4, PAGE 3 OF THE SCHEDULE, PROVIDED WITH REGARD TO SAMPLES AS FOLLOWS:

"/A) BIDDERS SHALL SUBMIT, FOR ARRIVAL NOT LATER THAN BID OPENING TIME, THIRTY-FIVE (35) SHEETS OF PAPER, SIZE 8 1/2 BY 11 INCHES. EACH SHEET MUST BE PLAINLY MARKED FOR IDENTIFICATION TO SHOW: BIDDERS'S NAME, COLOR AND FINISH, SUBSTANCE WEIGHT AND BURSTING STRENGTH OF EACH WEIGHT OF (1) SULPHATE, (2) WHITE, (3) OPAQUED, AND (4) COLORED STOCK; AND (5) TRANSPARENCY AND FINISH OF PAPER FOR THE WINDOW OF"WINDOW ENVELOPES," ON WHICH QUOTATIONS ARE SUBMITTED. THESE SAMPLES WILL BE USED TO (1) ESTABLISH WHETHER OR NOT THE WEIGHT, BURSTING STRENGTH, COLOR AND FINISH MEET THE NEEDS OF THE GOVERNMENT, (2) TO DETERMINE COMPLIANCE WITH SPECIFICATION PRIOR TO AWARDING A CONTRACT UNDER THIS PURCHASE ACTION, AND (3) TO ASSURE QUALITY OF ENVELOPES DELIVERED AGAINST SUBSEQUENT AWARDS. NON-ARRIVAL OF SAMPLES AT THE DESIGNATED ADDRESS BY BID OPENING TIME, OR SUBMISSION OF SAMPLES NOT COMPLYING WITH THE SPECIFICATION, WILL RESULT IN THE REJECTION OF THE BID. ENVELOPES DELIVERED UNDER ANY RESULTING CONTRACTS SHALL BE MADE OF PAPER CONFORMING TO SAMPLES SUBMITTED. THE APPROVAL OF BID SAMPLES WILL NOT DETRACT FROM THE GOVERNMENT'S RIGHT TO TEST MATERIAL DELIVERED OR OFFERED FOR DELIVERY UNDER RESULTING CONTRACTS TO DETERMINE COMPLIANCE WITH THE SPECIFICATION AND THE ACCEPTED BID SAMPLES. NO LABELS OR STICKERS TO BE AFFIXED TO SAMPLE SHEETS.

"/B) SULPHATE PAPER USED IN THE MANUFACTURE OF ENVELOPES SHALL BE OF A LIGHT COLOR OR SHADE SUBJECT TO THE APPROVAL OF THE CONTRACTING OFFICER.

"/C) SAMPLES ARE TO BE SUBMITTED UNDER SEPARATE COVER TO GENERAL SERVICES ADMINISTRATION, BUSINESS SERVICE CENTER, 250 HUDSON STREET, NEW YORK 13, N.Y.'

PARAGRAPH 3 OF SPECIAL PROVISIONS PROVIDED THAT PRELIMINARY TO AWARD ANY BIDDER MIGHT BE REQUIRED TO STATE THE SOURCE OR SOURCES OF HIS PAPER SUPPLY AND TO DEMONSTRATE TO THE SATISFACTION OF THE CONTRACTING OFFICER, WITHIN 10 DAYS AFTER BEING CALLED UPON TO DO SO, THAT HE HAD IN HIS POSSESSION, OR WOULD BE ABLE TO SECURE WITHIN A REASONABLE PERIOD, ALL SUITABLE AND NECESSARY FACILITIES WITH WHICH TO PERFORM THE CONTRACT PROPERLY. THE LOW BID OF COMMERCIAL ENVELOPE MFG. CO., INC., WAS REJECTED BECAUSE THE ENVELOPES WHICH IT PROPOSED TO FURNISH AND WHICH WERE TO BE SUPPLIED BY YOU FAILED TO MEET THE REQUIREMENTS OF THE SPECIFICATION WITH RESPECT TO WEIGHT AND COLOR. THE APPEAL BY COMMERCIAL OF THIS REJECTION WAS DENIED BY THE BOARD OF REVIEW, GENERAL SERVICES ADMINISTRATION (GSA), ON AUGUST 15, 1961.

IT IS YOUR CONTENTION IN YOUR LETTER OF AUGUST 18, 1961, THAT SAMPLES OF THE ENVELOPES SHOULD NOT HAVE BEEN REJECTED AS ENVELOPES MADE OF YOUR PAPER WERE PREVIOUSLY ACCEPTED IN CONSIDERABLE QUANTITIES BY GSA UNDER THE IDENTICAL SPECIFICATION USED IN THE INVITATION CURRENTLY INVOLVED. YOU HAVE NOT FURNISHED ANYTHING TO REBUT THE TESTIMONY SET OUT IN THE DECISION OF THE REVIEW BOARD THAT YOUR PAPER WAS NOT SULPHATE PAPER OF A LIGHT COLOR OR SHADE.

A TABULATION OF THE BIDS RECEIVED DISCLOSED THAT COMMERCIAL WAS THE LOW BIDDER ON 18 ITEMS AND THE ATLANTA ENVELOPE COMPANY WAS THE LOW BIDDER ON 3 ITEMS. ALTHOUGH THE CONTRACTING OFFICER DID NOT EXERCISE THE OPTION GIVEN HIM IN PARAGRAPH 3 OF SPECIAL PROVISIONS IT DEVELOPED THAT BOTH COMMERCIAL AND THE ATLANTA ENVELOPE COMPANY INTENDED TO SUPPLY SULPHATE PAPER MANUFACTURED BY YOU. ALSO, PRIOR TO BID OPENING YOUR REPRESENTATIVE INFORMED THE CONTRACTING OFFICER THAT YOUR MILL PRODUCED A GOLD-TAN KRAFT PAPER WHICH HE CONSIDERED TO BE LIGHT COLORED SULPHATE. IN RESPONSE TO YOUR REPRESENTATIVE'S REQUEST TO BE ADVISED AS TO WHETHER THIS PAPER WAS ACCEPTABLE AS TO COLOR, THE CONTRACTING OFFICER ADVISED HIM THAT THE PAPER COULD NOT BE APPROVED OR DISAPPROVED UNTIL SAMPLES WERE SUBMITTED. SUBSEQUENT TO THE OPENING OF BIDS ON MAY 25, 1961, OR ON MAY 27, REPRESENTATIVES OF COMMERCIAL AND ATLANTA PHONED THE CONTRACTING OFFICER AND INQUIRED AS TO WHETHER THE SAMPLES SUBMITTED WITH THEIR BIDS WERE ACCEPTABLE AS TO COLOR. ON MAY 31, 1961, THE CONTRACTING OFFICER ADVISED THEM BY TELEPHONE THAT THE SAMPLES WERE NOT ACCEPTABLE AS TO COLOR. THE QUESTION OF ACCEPTABILITY OF THE PAPER SAMPLES INVOLVED WAS REFERRED TO THE STANDARD PAPER COMPARISON SAMPLE COMMITTEE WHICH IS COMPOSED OF A REPRESENTATIVE OF THE U.S. GOVERNMENT PRINTING OFFICE, A REPRESENTATIVE OF THE QUALITY CONTROL DIVISIONS, FEDERAL SUPPLY SERVICE, AND A REPRESENTATIVE OF THE STANDARDIZATION DIVISION, FEDERAL SUPPLY SERVICE. ON JUNE 2, 1961, THE CHAIRMAN OF THAT COMMITTEE ADVISED THE CHIEF, OFFICE SUPPLIES, EQUIPMENT AND PAPER PRODUCTS BRANCH, NATIONAL BUYING DIVISION, FSS, GSA, THAT THE COMMITTEE HAD EXAMINED THE SAMPLES AND DETERMINED THAT THEY WERE NOT ACCEPTABLE AS "LIGHT-COLORED SULPHATE.' ON THE SAME DAY THE CASE WAS REFERRED TO A REVIEW COMMITTEE OF THE NATIONAL BUYING DIVISION, FSS, GSA, AND THAT COMMITTEE CONCURRED IN THE DETERMINATION OF THE CONTRACTING OFFICER, AS CONFIRMED BY THE STANDARD PAPER COMPARISON SAMPLE COMMITTEE, TO REJECT THE BIDS OF COMMERCIAL AND ATLANTA FOR NOT MEETING SPECIFICATIONS AS TO COLOR. THEREAFTER ON JUNE 8, 1961, THE CONTRACTING OFFICER TRANSMITTED THE PAPER SAMPLES SUBMITTED BY COMMERCIAL AND ATLANTA TO THE FEDERAL SUPPLY SERVICE LABORATORY FOR FURTHER EXAMINATION TO DETERMINE WHETHER THE SAMPLES MET THE REQUIREMENTS OF THE SPECIFICATION AS TO WEIGHT AND BURSTING STRENGTH.

BY LETTER OF JUNE 15, 1961, THE COMMISSIONER, FEDERAL SUPPLY SERVICE, INFORMED YOU THAT THE SAMPLES SUBMITTED BY COMMERCIAL AND ATLANTA HAD FAILED THE TEST ON THE WEIGHT OF THE PAPER AND FOR THIS REASON THE BIDS SUBMITTED BY THESE TWO BIDDERS WERE NOT FOR CONSIDERATION. IN THE SAME LETTER THE COMMISSIONER FURNISHED YOU WITH A COPY OF HIS FINDINGS WITH RESPECT TO THE POINTS RAISED BY YOUR REPRESENTATIVE IN A CONFERENCE WITH HIM ON JUNE 7, 1961, THE COMMISSIONER'S FINDING WITH RESPECT TO YOUR CONTENTION THAT THE WORDING OF THE SPECIFICATION IN USING THE TERM ,SULPHATE" WAS TOO LOOSE IS SET FORTH IN THE DECISION OF THE BOARD OF REVIEW, GSA, AS FOLLOWS:

" "FINDINGS:

" "FOR APPROXIMATELY 28 YEARS BEFORE 1954, THE DESCRIPTION "SULPHATE PAPER USED IN THE MANUFACTURE OF ENVELOPES SHALL BE OF A LIGHT COLOR OR SHADE," WAS EMPLOYED BY THE POST OFFICE DEPARTMENT IN ITS PROCUREMENT OF SIMILAR ENVELOPES. SINCE 1954, THIS DESCRIPTION HAS BEEN USED BY GSA. THE GOVERNMENT PRINTING OFFICE ALSO PURCHASES SIMILAR ENVELOPES, AND FOR SOME 35 YEARS HAS MADE PURCHASES UNDER THE DESCRIPTION "LIGHT-COLORED BROWN (KRAFT SHADE) ENVELOPES.'

" "THE DICTIONARY OF PAPER, PUBLISHED UNDER THE AUSPICES AND DIRECTION OF THE AMERICAN PAPER AND PULP ASSOCIATION, UNDER THE HEADING SULPHATE PAPER, REFERS THE READER TO " "SEE KRAFT PAPER.' UNDER "KRAFT PAPER" IS THIS STATEMENT--- " ITS NATURAL UNBLEACHED COLOR IS BROWN BUT BY THE USE OF SEMI BLEACHED OR FULLY BLEACHED SULPHATE PULPS IT CAN BE PRODUCED IN LIGHTER SHADES OF BROWN, CREAM TINTS, AND WHITE.'

" "WHEN GSA ASKED A PAPER MANUFACTURER WHAT OUR TERMINOLOGY MEANT TO THEM, THEY PROMPTLY REPLIED:---

" " "WE HAVE SUPPLIED VARIOUS ENVELOPE MANUFACTURERS WITH SEMI BLEACHED ENVELOPE KRAFT PAPERS FOR GSA AND GPO ON BIDS REQUIRING "LIGHT COLORED SULPHATE ENVELOPE KRAFT.' WE HAVE UNDERSTOOD THE TERMS "LIGHT COLORED SULPHATE ENVELOPE KRAFT," AND "SEMI BLEACHED ENVELOPE KRAFT" TO BE SYNONYMOUS WITHIN THE INDUSTRY.'

" "IN THE "TRADE" PAPER AS SUBMITTED BY THE HUDSON PULP AND PAPER CORPORATION, THE TERM IS KNOWN AS "UNBLEACHED DARK COLOR.'

" "THIRTY-FIVE YEARS OF EXPERIENCE, INDUSTRY DEFINITIONS, AND CURRENT UNDERSTANDING OF GSA REQUIREMENTS, INDICATE THAT THE DESCRIPTION CONTAINED IN THE INVITATION FOR BIDS IS ADEQUATE.

" "WITH REFERENCE TO THE DARKER SHADE THE POST OFFICE DEPARTMENT HAS INFORMED GSA BY LETTER OF JUNE 9, 1961:---

" " "WE CONSIDER THAT SEVERAL OF THE SAMPLES EXAMINED CAN PROPERLY BE CLASSIFIED AS LIGHT-COLORED SULPHATE, WHEREAS SAMPLES SUBMITTED BY THE ATLANTA ENVELOPE COMPANY AND COMMERCIAL ENVELOPE MFG. COMPANY WOULD NOT MEET THIS DESIGNATION.

" " "THESE TWO SAMPLES WOULD NOT BE SATISFACTORY ON POST OFFICE PROCUREMENT OF KRAFT VELOPES.'

THE CONTRACTING OFFICER ALSO STATED THAT HE HAD CONTACTED THREE OTHER PAPER COMPANIES THAT STATED THAT IN THEIR OPINION THE PAPER MANUFACTURED BY YOU COULD NOT BE CLASSIFIED AS ,LIGHT-COLORED SULPHATE.' YOU HAVE NOT FURNISHED ANY EVIDENCE TO REBUT THE TESTIMONY RELIED UPON IN THE FINDING OF THE REVIEW BOARD AS TO WHAT CONSTITUTES LIGHT-COLORED SULPHATE PAPER.

WITH REGARD TO YOUR CONTENTION THAT GSA WAS INCREASING THE COST OF ENVELOPES BY UPGRADING AN INITIAL REQUIREMENT WHICH HAD BEEN SUBSTITUTED TO REDUCE ENVELOPE COSTS, THE COMMISSIONER FOUND THAT THERE WAS NO "UPGRADING" SINCE THE GOVERNMENT HAD ALWAYS SPECIFIED "LIGHT COLOR SULPHATE.' IN THIS CASE FOUR FIRMS APPARENTLY QUOTED PRICES ON SECTION ONE OF THE INVITATION WITH PRICES BASED ON THE BROWN ENVELOPE PAPER. ONE FIRM WAS LOW ON 18 ITEMS. ANOTHER FIRM WAS LOW ON 3 ITEMS AT PRICES LESS THAN ONE CENT TO FIFTY-FIVE CENTS PER THOUSAND ENVELOPES. THE OTHER FIRMS WERE HIGH. HENCE, IT IS CONSIDERED THAT THE SPECIFICATION OF LIGHT COLOR FOR THE ENVELOPE PAPER MADE NO DISCERNIBLE DIFFERENCE IN COST IN THIS INSTANCE. IT IS INDICATED, HOWEVER, SINCE THE DIFFERENCE BETWEEN THE DARK AND LIGHT COLORED PAPER IS THE RESULT OF A BLEACHING PROCESS, THAT THE PRICES QUOTED BY BIDDERS WHO OFFERED BROWN PAPER WOULD BE INCREASED SOMEWHAT BY REASON OF THE ADDITIONAL COSTS OF BLEACHING.

IT IS NOTED THAT YOU CONTENDED THAT ANY EXAMINATION OF PAPER SAMPLES SUBMITTED BY COMMERCIAL AND ATLANTA SHOULD BE RESTRICTED TO COLOR AND NO REGARD GIVEN TO THE OTHER REQUIREMENTS. BUT IF THIS HAD BEEN DONE, THESE TWO BIDDERS WOULD HAVE BEEN GIVEN PREFERENTIAL TREATMENT AS THE SAMPLES SUBMITTED BY OTHER BIDDERS WERE EXAMINED IN THE LIGHT OF ALL THE SPECIFICATION REQUIREMENTS. IT IS ALSO NOTED THAT THE BOARD OF REVIEW FOUND THAT A LARGE QUANTITY OF PAPER FURNISHED BY YOU TO GOVERNMENT CONTRACTORS IN THE PAST WAS IDENTICAL IN COLOR TO THAT OF THE SAMPLES SUBMITTED IN THIS CASE BY COMMERCIAL AND ATLANTA AND THAT THE DELIVERIES WERE NEVER EXAMINED BY THE RECEIVING AGENCIES. THE BOARD, HOWEVER, COULD NOT FIND ANY BASIS FOR CONCLUDING THAT THE SAMPLES OF PAPER SUBMITTED UNDER PRIOR INVITATIONS WERE SIMILAR TO THE SAMPLES HERE SUBMITTED.

THE FACT THAT PAPER MAY HAVE BEEN DELIVERED UNDER PRIOR CONTRACTS WHICH FAILED TO MEET THE SPECIFICATIONS CANNOT FORM ANY BASIS FOR REQUIRING THE GOVERNMENT TO ACCEPT SUCH PAPER IN SUBSEQUENT CONTRACTS. COMPARE 36 COMP. GEN. 535.

IN ANY EVENT IF THE MATTER OF COLOR WERE DISREGARDED, THERE IS SOME DOUBT THAT THE PAPER AS INDICATED BY THE SAMPLE COULD BE ACCEPTED BECAUSE OF ITS REPORTED FAILURE TO MEET THE WEIGHT REQUIREMENT.

UNDER THE CIRCUMSTANCES WE CAN FIND NO BASIS FOR DISAGREEING WITH THE ACTION TAKEN IN AWARDING THE CONTRACTS HERE INVOLVED.