B-147302, JAN. 2, 1962

B-147302: Jan 2, 1962

Additional Materials:

Contact:

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

 

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

TO JAXCO JETRONICS CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 4. B. THREE BIDS WERE RECEIVED. ONE BID WAS RECEIVED AFTER OPENING OF BIDS AND WAS DETERMINED TO BE AN UNACCEPTABLE LATE BID. A SECOND BID FROM YOUR COMPANY WAS IN THE AMOUNT OF $996. THE THIRD BID WAS SUBMITTED BY REF DYNAMICS CORPORATION AND WAS IN THE AMOUNT OF $566. IT IS REPORTED THAT YOUR BID STIPULATED AN ACCEPTANCE TIME OF 30 DAYS. ACCORDINGLY YOUR BID WAS REJECTED AS NONRESPONSIVE. "THE CONTRACTOR IS COMPLETELY RESPONSIBLE FOR PERMANENT INSTALLATION OF THE BUFFETS IN THE AIRCRAFT.'. WE INTERPRET THIS TO MEAN THAT THE CONTRACTOR IS RESPONSIBLE FOR SUPPLYING GALLEYS TO THE PROPER DIMENSIONS AS CALLED OUT IN BOEING CO-ORDINATION DRAWING 65-19746 REV.

B-147302, JAN. 2, 1962

TO JAXCO JETRONICS CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 4, 1961, PROTESTING THE AWARD OF A CONTRACT TO REF DYNAMICS CORPORATION UNDER INVITATION FOR BIDS NO. 36 -600-62-27 ISSUED BY OLMSTED AIR FORCE BASE, PENNSYLVANIA, ON AUGUST 3, 1961.

THE INVITATION SOLICITED BIDS--- TO BE OPENED AUGUST 23, 1961--- FOR FURNISHING 30 GALLEY ASSEMBLIES, EACH CONSISTING OF TWO BUFFET UNITS, IN ACCORDANCE WITH C-135 GALLEY PURCHASE DESCRIPTION NO. PD-ASO-1-3 AND IN ACCORDANCE WITH BOEING DRAWING 65-19746, REV. B. THREE BIDS WERE RECEIVED. ONE BID WAS RECEIVED AFTER OPENING OF BIDS AND WAS DETERMINED TO BE AN UNACCEPTABLE LATE BID. A SECOND BID FROM YOUR COMPANY WAS IN THE AMOUNT OF $996,390.90. THE THIRD BID WAS SUBMITTED BY REF DYNAMICS CORPORATION AND WAS IN THE AMOUNT OF $566,292.12. IT IS REPORTED THAT YOUR BID STIPULATED AN ACCEPTANCE TIME OF 30 DAYS, CONTRARY TO A PROVISION ON PAGE 4 OF THE SCHEDULE THAT BIDS OFFERING LESS THAN 60 DAYS FOR ACCEPTANCE BY THE GOVERNMENT FROM DATE SET FOR OPENING OF BIDS WOULD BE CONSIDERED NONRESPONSIVE AND WOULD BE REJECTED. ACCORDINGLY YOUR BID WAS REJECTED AS NONRESPONSIVE. AS TO THE THIRD BID BY REF DYNAMICS, THE LETTER OF AUGUST 22, 1961, SUBMITTING THE BID CONTAINED THE FOLLOWING LANGUAGE:

"PD-ASO-1-3 PARAGRAPH 3.12 SPECIFIES THAT,"THE CONTRACTOR IS COMPLETELY RESPONSIBLE FOR PERMANENT INSTALLATION OF THE BUFFETS IN THE AIRCRAFT.' WE INTERPRET THIS TO MEAN THAT THE CONTRACTOR IS RESPONSIBLE FOR SUPPLYING GALLEYS TO THE PROPER DIMENSIONS AS CALLED OUT IN BOEING CO-ORDINATION DRAWING 65-19746 REV. B TO PERMIT INSTALLATION IN THE AIRCRAFT BY AIR FORCE PERSONNEL. NO ALLOWANCE FOR LABOR TO PHYSICALLY INSTALL THE GALLEY HAS BEEN ALLOWED IN OUR BID.'

THE REFERRED-TO PARAGRAPH 3.12 OF THE PURCHASE DESCRIPTION STATED THAT "THE CONTRACTOR IS COMPLETELY RESPONSIBLE FOR PERMANENT INSTALLATION OF THE BUFFETS IN THE AIRCRAFT.' THEREFORE, THE BID OF REF DYNAMICS WAS REFERRED BY THE CONTRACTING OFFICER TO THE COGNIZANT ENGINEERING PERSONNEL FOR EVALUATION OF THE TECHNICAL ASPECTS OF THE SPECIFICATION WITH RESPECT TO THE CONTRACTOR'S RESPONSIBILITY FOR INSTALLATION OF THE BUFFETS. THE CONTRACTING OFFICER WAS INFORMALLY ADVISED BY TELEPHONE ON AUGUST 28, 1961, THAT THE GALLEYS WERE REQUIRED TO BE INSTALLED IN THE AIRCRAFT BY THE CONTRACTOR. ON THE BASIS OF THIS INFORMAL ADVICE, THE CONTRACTING OFFICER CONCLUDED THAT THE BID OF REF DYNAMICS WAS NON-RESPONSIVE. SINCE YOUR BID WAS NONRESPONSIVE BY REASON OF LIMITING THE ACCEPTANCE PERIOD BY THE GOVERNMENT TO 30 DAYS, IT WAS DECIDED TO CANCEL THE INVITATION FOR BIDS AND NEGOTIATE FOR THE PROCUREMENT UNDER AUTHORITY OF ASPR 3-210.2 (III) WHICH PERMITS NEGOTIATIONS IF NO RESPONSIVE BID HAD BEEN RECEIVED.

HOWEVER, BEFORE ANY NEGOTIATIONS WERE COMMENCED, THE CONTRACTING OFFICER WAS ADVISED BY THE SAME ENGINEERING PERSONNEL WHO HAD PREVIOUSLY ADVISED HIM IN THIS MATTER THAT IT WAS THE INTENT OF THE GOVERNMENT TO UTILIZE AIR FORCE PERSONNEL FOR THE INSTALLATION OF BUFFETS IN THE AIRCRAFT AND THAT THE LANGUAGE IN PARAGRAPH 3.12 OF THE PURCHASE DESCRIPTION WAS DESIGNED TO EXPRESS THAT INTENT. BASED ON THIS INTERPRETATION OF THE SPECIFICATION REQUIREMENT, THE CONTRACTING OFFICER DECIDED THAT THE BID OF REF DYNAMICS COULD BE CONSIDERED RESPONSIBLE AND THEREFORE CANCELED THE PROPOSED NEGOTIATION CONFERENCE.

THEREAFTER, THE STAFF JUDGE ADVOCATE OF THE PROCURING ACTIVITY ADVISED THAT HE CONSIDERED THAT THE SPECIFICATION WAS VAGUE ON THE MATTER OF INSTALLATION. ON THE BASIS OF THIS ADVICE, THE CONTRACTING OFFICER DECIDED TO REJECT BOTH BIDS AND READVERTISE THE PROCUREMENT ON THE BASIS OF A SPECIFICATION WHICH WOULD DESCRIBE MORE CLEARLY THE INTENT OF THE GOVERNMENT. ACCORDINGLY, ON SEPTEMBER 12, 1961, INVITATION FOR BIDS NO. 36-600-62-78 WAS ISSUED. THEREUPON REF DYNAMICS PROTESTED THE CANCELLATION OF THE ORIGINAL INVITATION AND THE READVERTISEMENT OF THE PROCUREMENT. AFTER A THOROUGH REVIEW BY THE HEADQUARTERS, U.S. AIR FORCE, IT WAS DECIDED THAT THE BID OF REF DYNAMICS UNDER THE ORIGINAL INVITATION WAS RESPONSIVE, THAT THE PURCHASE DESCRIPTION WAS NOT SUFFICIENTLY AMBIGUOUS TO REQUIRE CANCELLATION OF THE INVITATION, THAT THE ORIGINAL INVITATION SHOULD BE REINSTATED, AND THAT AN AWARD SHOULD BE MADE TO THE LOW BIDDER. THE AWARD WAS MADE TO REF DYNAMICS WHICH IS PERFORMING UNDER THE CONTRACT ON SCHEDULE.

IN YOUR LETTER OF OCTOBER 4, 1961, YOU ALLEGE THAT THE BID OF REF DYNAMICS WAS QUALIFIED AND SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE. ALSO, YOU ALLEGE THAT THE PURCHASE DESCRIPTION WAS AMBIGUOUS WITH RESPECT TO THE REQUIREMENT FOR INSTALLATION AND THE NUMBER OF OVENS TO BE FURNISHED WITH EACH GALLEY.

IT IS REPORTED ON BEHALF OF THE DEPARTMENT OF THE AIR FORCE THAT ITS DECISION TO AWARD A CONTRACT TO REF DYNAMICS UNDER THE ORIGINAL INVITATION WAS BASED ON A FINDING THAT THE INTERPRETATION WHICH THIS BIDDER PLACED ON PARAGRAPH 3.12 OF THE PURCHASE DESCRIPTION WAS THE SAME INTERPRETATION INTENDED BY THE AIR FORCE AND IS THE CORRECT INTERPRETATION OF THE LANGUAGE USED. THE AIR FORCE ALSO STATES THAT ALTHOUGH THE LANGUAGE OF THIS PARAGRAPH TAKEN OUT OF CONTEXT MAY SUPPORT YOUR INTERPRETATION, IT HAS TO BE READ IN CONJUNCTION WITH OTHER PROVISIONS OF THE PURCHASE DESCRIPTION AND INVITATION, AS WELL AS IN THE LIGHT OF THE ATTENDING CIRCUMSTANCES AND THEREFORE THE BIDDERS WERE FULLY AWARE, OR SHOULD HAVE BEEN, THAT IT WAS INTENDED TO IMPOSE ON THE CONTRACTOR ONLY THE RESPONSIBILITY OF ASSURING THAT THE BUFFETS FITTED PROPERLY WHEN PERMANENTLY INSTALLED IN THE AIRCRAFT. HAD THE GOVERNMENT INTENDED OTHERWISE, NAMELY, THAT THE CONTRACTOR WOULD INSTALL THE EQUIPMENT WITH HIS OWN LABOR AND AT HIS EXPENSE, SUCH A REQUIREMENT FOR LABOR WOULD HAVE BEEN PLACED IN THE SCOPE OF THE WORK TO BE PERFORMED RATHER THAN IN THE DESCRIPTION OF THE EQUIPMENT BEING PROCURED.

THE AIR FORCE FURTHER STATES THAT THE INTENT OF THE GOVERNMENT HAS ALWAYS BEEN THAT THE PHYSICAL INSTALLATION OF THE GALLEYS IN THE AIRCRAFT WOULD BE ACCOMPLISHED BY AIR FORCE PERSONNEL UNDER THE TECHNICAL GUIDANCE AND SUPERVISION OF THE CONTRACTOR. THE STATEMENT IN THE LETTER OF AUGUST 22, 1961, FROM REF DYNAMICS MERELY REAFFIRMED THE POSITION THAT THE RESPONSIBILITY FOR THE PERMANENT INSTALLATION IS DISCHARGED WHEN THE CONTRACTOR FURNISHES TECHNICAL PERSONNEL FOR SUPERVISION OF THE JOB OF INSTALLATION. THE ONLY SUBSTANTIAL DIFFERENCE BETWEEN THE WORDING OF THE SECOND INVITATION AND THAT OF THE FIRST INVITATION WAS THE WORDING ON PAGE 1 OF THE SECOND INVITATION TO THE EFFECT THAT "ANY AND ALL REFERENCES IN THE SPECIFICATION, AS AMENDED, TO THE INSTALLATION OF THE BUFFETS IN THE AIRCRAFT, WILL BE ACCOMPLISHED BY AIR FORCE PERSONNEL UNDER THE TECHNICAL GUIDANCE OF THE CONTRACTOR.'

THE DEPARTMENT HAS CONCLUDED IN THIS CASE THAT WHATEVER AMBIGUITY EXISTED IT WAS NOT SUFFICIENT TO WARRANT THE CANCELLATION OF THE FIRST INVITATION AND THE READVERTISING OF THE PROCUREMENT. THE INSTALLATION OF THE EQUIPMENT IS REGARDED AS A VERY SIMPLE OPERATION AND CONSISTS MAINLY OF PHYSICALLY CARRYING THE EQUIPMENT INTO THE AIRCRAFT, BOLTING OR FASTENING IT, MAKING ALL CONNECTIONS TO THE FUSELAGE STRUCTURE AND PLUGGING IT IN THE ELECTRICAL OUTLETS. THE COST OF LABOR FOR THE INSTALLATION IS ESTIMATED TO BE APPROXIMATELY $200 PER AIRCRAFT OR A TOTAL OF $6,000 FOR THE ENTIRE PROCUREMENT. WE AGREE WITH YOU THAT A BIDDER PROPERLY COULD CONCLUDE THAT THE PROVISIONS OF PARAGRAPH 3.12 OF THE PURCHASE DESCRIPTION WOULD REQUIRE THE SUCCESSFUL BIDDER TO INSTALL THE BUFFETS. CONSIDERING, HOWEVER, THE FACT THAT THE DIFFERENCE BETWEEN YOUR BID AND THE BID OF REF DYNAMICS WAS IN EXCESS OF $400,000, THE ITEM OF $6,000 IS RELATIVELY INSIGNIFICANT AND EVEN IF YOU HAD CONSTRUED THE SPECIFICATION TO REQUIRE THE GOVERNMENT TO FURNISH THE LABOR FOR INSTALLATION, IT COULD HARDLY BE SAID THAT YOUR BID WOULD HAVE BEEN THE LOW BID RECEIVED AND AS SUCH CONSIDERED FOR ACCEPTANCE. ACCORDINGLY, WE FIND NO BASIS FOR QUESTIONING THE AWARD IN REGARD TO THE MATTER OF AMBIGUITY AS TO WHETHER THE CONTRACTOR WAS TO FURNISH THE LABOR FOR INSTALLING THE EQUIPMENT. SEE 36 COMP. GEN. 259.

WITH REGARD TO YOUR ALLEGATION THAT THE SPECIFICATION IS AMBIGUOUS AS TO THE NUMBER OF OVENS REQUIRED, IT MAY BE POINTED OUT THAT PARAGRAPHS 3.5.2 AND 6.3 OF THE PURCHASE DESCRIPTION SHOW DEFINITELY THAT TWO OVENS ARE REQUIRED FOR EACH BUFFET, THAT TWO BUFFETS ARE REQUIRED FOR EACH GALLEY AND THAT THEREFORE FOUR OVENS ARE REQUIRED FOR EACH GALLEY. PARAGRAPH 3.9.14 DESCRIBES THE CHARACTERISTICS OF THE OVEN, AS ONE OF THE COMPONENTS TO BE USED IN THE GALLEY. SINCE TWO OVENS ARE MENTIONED IN THIS PARAGRAPH, THE WORD "BUFFET" SHOULD HAVE BEEN USED. HOWEVER, IT IS BELIEVED THAT NEITHER REF DYNAMICS NOR YOU WERE MISLED BY THE PROVISIONS OF PARAGRAPH 3.9.14. ITEM 1B OF THE INVITATION REQUIRED EACH BIDDER TO SUBMIT A LIST OF ALL COMPONENTS THAT WOULD MAKE ONE COMPLETE BUFFET. THE BID OF REF DYNAMICS SHOWS THAT WITH ITS LETTER OF AUGUST 22, 1961, IT SUBMITTED A LIST OF ALL COMPONENTS INDICATING THAT FOUR OVENS WERE REQUIRED FOR EACH GALLEY. IN THE REPORT OF THE ADMINISTRATIVE OFFICE IT IS STATED THAT YOUR BID SHOWED THAT YOU WOULD FURNISH TWO OVENS FOR EACH OF THE TWO BUFFETS AND THAT YOUR DRAWINGS SHOWED TWO OVENS FOR EACH OF THE TWO BUFFETS. THERE WAS THEREFORE NO MISUNDERSTANDING AS TO THE NUMBER OF OVENS REQUIRED.

IN VIEW OF THE FOREGOING WE FIND NO BASIS FOR QUESTIONING THE PROPRIETY OF THE AWARD IN THIS CASE.