B-147968, MAR. 19, 1962

B-147968: Mar 19, 1962

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TO GENERAL INSTRUMENT CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 17. 680 SETS WAS TO BE MADE F.O.B. 100 SETS WERE TO BE DELIVERED F.O.B. THE DELIVERY SCHEDULE CALLED FOR THE FIRST DELIVERY OF 780 UNITS TO BE MADE WITHIN 90 DAYS AFTER DATE OF CONTRACT AND THE REMAINING UNITS WERE TO BE DELIVERED IN INSTALLMENTS OF 2. THE PREPRODUCTION SAMPLE CLAUSE FURTHER PROVIDED THAT PRODUCTION OF THE ARTICLES WAS NOT TO COMMENCE UNTIL THE SAMPLE HAD BEEN APPROVED BY THE GOVERNMENT. DELIVERY OF THE LATTER QUANTITY WAS TO BE AT THE SAME RATE AS THAT OF THE NON-SET-ASIDE PORTION. FOUR BIDS WERE RECEIVED AND THE LOW BID OF $14.11 EACH FOR 14. WAS SUBMITTED BY YOUR FIRM. YOU INSERTED AN ASTERISK BEFORE EACH UNIT PRICE OF $14.11 UNDER ITEMS 1 (A) AND 1 (B) AND THE NOTATION REFERENCING THE ASTERISK WAS INSERTED BELOW THE BID PRICES AS FOLLOWS: "*THIS PRICE BASED ON CONCURRENT AWARD TO US OF ITEMS 1A AND 1B.

B-147968, MAR. 19, 1962

TO GENERAL INSTRUMENT CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 17, 1962, PROTESTING THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. IFB- 383-629-62 ISSUED BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

THE INVITATION FOR BIDS ISSUED ON DECEMBER 5, 1961, INVITED BIDS FOR FURNISHING 14,780 TYPE AN/AMT-11 RADIOSONDE SETS. DELIVERY OF 5,680 SETS WAS TO BE MADE F.O.B. NORFOLK, VIRGINIA, AND 9,100 SETS WERE TO BE DELIVERED F.O.B. OAKLAND, CALIFORNIA. THE DELIVERY SCHEDULE CALLED FOR THE FIRST DELIVERY OF 780 UNITS TO BE MADE WITHIN 90 DAYS AFTER DATE OF CONTRACT AND THE REMAINING UNITS WERE TO BE DELIVERED IN INSTALLMENTS OF 2,000 EACH CONTINUING AT 30-DAY INTERVALS AND TO BE COMPLETED WITHIN 300 DAYS AFTER DATE OF CONTRACT. THE INVITATION INCLUDED A CLAUSE WHICH REQUIRED SUBMISSION OF A PREPRODUCTION SAMPLE. IT ALSO CONTAINED A BLANK SPACE FOR THE INSERTION BY THE BIDDER OF THE NUMBER OF DAYS AFTER AWARD OF CONTRACT WITHIN WHICH HE WOULD SUBMIT HIS SAMPLE, AND STATED THAT 20 DAYS WOULD BE REQUIRED BY THE GOVERNMENT FOR THE TESTING AND NOTIFICATION OF APPROVAL OF THE SAMPLE. THE PREPRODUCTION SAMPLE CLAUSE FURTHER PROVIDED THAT PRODUCTION OF THE ARTICLES WAS NOT TO COMMENCE UNTIL THE SAMPLE HAD BEEN APPROVED BY THE GOVERNMENT. ALSO, THE INVITATION PROVIDED THAT AN ADDITIONAL QUANTITY OF 14,780 UNITS HAD BEEN SET ASIDE FOR AWARD ONLY TO ONE OR MORE LABOR SURPLUS AREA CONCERNS AND, TO A LIMITED EXTENT, TO SMALL BUSINESS CONCERNS WHICH DO NOT QUALIFY AS LABOR SURPLUS AREA CONCERNS. DELIVERY OF THE LATTER QUANTITY WAS TO BE AT THE SAME RATE AS THAT OF THE NON-SET-ASIDE PORTION. THE INVITATION PROVIDED FURTHER THAT NEGOTIATIONS FOR THE SET-ASIDE PORTION WOULD BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED) WHO HAD SUBMITTED 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 IN THE ORDER OF PRIORITY AND UNDER THE CONDITIONS AS SET OUT ON PAGES 5 TO 7, INCLUSIVE, OF THE SCHEDULE.

FOUR BIDS WERE RECEIVED AND THE LOW BID OF $14.11 EACH FOR 14,780 UNITS, TOTAL $208,545.80, WAS SUBMITTED BY YOUR FIRM. YOU INSERTED AN ASTERISK BEFORE EACH UNIT PRICE OF $14.11 UNDER ITEMS 1 (A) AND 1 (B) AND THE NOTATION REFERENCING THE ASTERISK WAS INSERTED BELOW THE BID PRICES AS FOLLOWS:

"*THIS PRICE BASED ON CONCURRENT AWARD TO US OF ITEMS 1A AND 1B. IF ITEM 1A AND/OR ITEM 1B ARE NOT CONCURRENTLY AWARDED TO US, THE PRICES FOR EITHER ITEM 1A OR 1B WILL BE $15.11 PER UNIT.'

THE SECOND LOW BID OF $14.24 EACH, TOTAL $210,467.20, WAS SUBMITTED BY MOLDED INSULATION COMPANY. THE THIRD LOW BID OF $14.97 EACH, TOTAL $221,256, WAS SUBMITTED BY THE FRIEZ INSTRUMENT DIVISION OF THE BENDIX CORPORATION. THE HIGH BID OF $15.11 EACH, AS PER YOUR EXPLANATION ACCOMPANYING YOUR LOW BID, WAS THE HIGHEST RECEIVED.

IN YOUR BID YOU MADE AN INSERTION IN THE APPROPRIATE BLANK SPACE IN THE PREPRODUCTION SAMPLE CLAUSE THAT YOU WOULD SUBMIT YOUR PREPRODUCTION SAMPLE WITHIN 70 DAYS AFTER DATE OF CONTRACT. WHEN YOUR BID WAS EVALUATED IT WAS DETERMINED THAT IF YOU UTILIZED THE FULL 70 DAYS IN THE PREPARATION AND SUBMISSION OF A SAMPLE, AS YOU WOULD HAVE BEEN PERMITTED TO DO UNDER YOUR BID, AND IF THE GOVERNMENT UTILIZED THE FULL 20 DAYS IN TESTING AND APPROVING THE SAMPLE, AS GRANTED TO THE GOVERNMENT BY THE INVITATION, YOU COULD NOT, AND WERE NOT IN FACT OFFERING TO, COMPLY WITH THE REQUIREMENT THAT DELIVERY OF 780 UNITS BE ACCOMPLISHED WITHIN 90 DAYS AFTER DATE OF CONTRACT. THE CONTRACTING OFFICER FELT THAT THIS DETERMINATION WAS ESPECIALLY SOUND IN VIEW OF THE LANGUAGE IN THE PREPRODUCTION SAMPLE CLAUSE RESTRICTING COMMENCEMENT OF PRODUCTION UNTIL RECEIPT OF APPROVAL OF SAMPLE. REGARD MUST ALSO BE HAD FOR THE FACT THAT THE PROPOSED PLACE OF MANUFACTURE IS BECKLEY, WEST VIRGINIA, AND THAT UNDER THE TERMS OF THE INVITATION DELIVERY WITHIN 90 DAYS WAS REQUIRED TO BE MADE AT DESTINATION WHICH MIGHT BE EITHER NORFOLK, VIRGINIA, OR OAKLAND, CALIFORNIA.

YOU STATE THAT THE DECISION OF THE CONTRACTING OFFICER TO REJECT YOUR BID FOR NONRESPONSIVENESS WAS ARBITRARY AND CAPRICIOUS IN THAT YOU UNCONDITIONALLY PROPOSED TO MEET THE DELIVERY SCHEDULE. WE CANNOT AGREE THAT THE CONTRACTING OFFICER'S DECISION TO REJECT YOUR BID WAS UNWARRANTED WHEN CONSIDERATION IS GIVEN TO THE FACT THAT YOU PROPOSED TO TAKE AS LONG AS 70 DAYS TO DELIVER YOUR PREPRODUCTION SAMPLE AND THE GOVERNMENT WAS ENTITLED TO 20 DAYS FOR APPROVAL OF THE SAMPLE. IN SUCH CIRCUMSTANCES, IT WOULD BE ENTIRELY PROPER TO ASSUME THAT YOU COULD NOT DELIVER WITHIN 90 DAYS TO DESTINATION (NORFOLK, VIRGINIA, OR OAKLAND, CALIFORNIA) WHEN YOUR PLACE OF MANUFACTURE IS BECKLEY, WEST VIRGINIA. AND THIS WOULD BE TRUE, EVEN THOUGH YOU ASSUMED THE RISK OF HAVING TO MAKE CHANGES UPON INSPECTION OF THE PREPRODUCTION SAMPLE, BY MANUFACTURING THE 780 UNITS DUE AT DESTINATION BY THE 90TH DAY AFTER AWARD OF CONTRACT AND PRIOR TO APPROVAL OF THE PREPRODUCTION SAMPLE. IN THIS REGARD THE OTHER BIDDERS PROPOSED TO FURNISH THE PREPRODUCTION SAMPLE WITHIN 30 DAYS AND 45 DAYS, RESPECTIVELY, FROM DATE OF CONTRACT.

IN VIEW OF THE FOREGOING, WE FIND NO SUFFICIENT BASIS FOR DISAGREEING WITH THE CONTRACTING OFFICER IN REJECTING YOUR BID AS NONRESPONSIVE.

WITH REGARD TO THE SET-ASIDE PORTION OF THE PROCUREMENT, YOUR ATTENTION IS INVITED TO PAGE 5 OF THE SCHEDULE MADE A PART OF THE INVITATION (PARAGRAPH 101-6.3) WHICH PROVIDES THAT NEGOTIATIONS FOR AWARD OF THE SET- ASIDE PORTION WILL BE CONDUCTED ONLY WITH CONCERNS "WHO HAVE SUBMITTED RESPONSIVE BIDS OR PROPOSALS ON THE NON-SET-ASIDE PORTION.' THIS PROVISION IS IN LINE WITH THE REQUIREMENTS OF PARAGRAPH 1-804.2 (D) OF THE ARMED SERVICES PROCUREMENT REGULATION. ACCORDINGLY, SINCE YOUR BID ON THE NON-SET-ASIDE PORTION OF THE PROCUREMENT WAS REJECTED FOR NONRESPONSIVENESS, WE AGREE WITH THE OPINION EXPRESSED BY THE ASSISTANT SECRETARY OF THE NAVY (INSTALLATION AND LOGISTICS) IN HIS REPORT OF FEBRUARY 26, 1962, TO OUR OFFICE THAT YOU ARE NOT ELIGIBLE FOR AWARD OF THE REMAINING PORTION OF THE PROCUREMENT UNDER THE SET-ASIDE PROCEDURES.