B-149480, SEP. 26, 1962

B-149480: Sep 26, 1962

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THE TABULATING CARD COMPANY DIVISION: FURTHER REFERENCE IS MADE TO YOUR PROTEST CONCERNING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 2 ISSUED BY THE POST OFFICE DEPARTMENT. ENTITLED "BID SAMPLES" PROVIDES THAT BIDDERS ARE REQUIRED TO SUBMIT WITH THEIR BIDS "A CARTON OF 2. IT IS FURTHER PROVIDED THAT BID SAMPLES IN THE QUALITIES. THAT THE SAMPLES WILL BE EVALUATED TO DETERMINE COMPLIANCES WITH THE SPECIFICATIONS AND THAT THE FAILURE OF THE SAMPLES TO CONFORM TO THE REQUIREMENTS OF THE SPECIFICATION WILL REQUIRE REJECTION OF THE BID. THE TWO BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED AT THE APPOINTED TIME ON JUNE 20. THIS ITEM IS NOT INVOLVED IN YOUR PROTEST AND WILL NOT BE DISCUSSED FURTHER.

B-149480, SEP. 26, 1962

TO BUSINESS SUPPLIES CORPORATION OF AMERICA, THE TABULATING CARD COMPANY DIVISION:

FURTHER REFERENCE IS MADE TO YOUR PROTEST CONCERNING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 2 ISSUED BY THE POST OFFICE DEPARTMENT.

THE INVITATION REQUESTED BIDS FOR FURNISHING POSTAL MONEY ORDER FORMS FOR THE 1963 FISCAL YEAR IN ACCORDANCE WITH POST OFFICE DEPARTMENT SPECIFICATIONS POD-F-172 (RE) DATED MAY 18, 1962, FEDERAL SPECIFICATION G- C-116A AND UU-P-31B. PARAGRAPH 1.1 OF THE SPECIFICATION PROVIDES THAT THE FORMS SHALL BE MANUFACTURED BY SUCH PROCESS AND OF SUCH MATERIAL AS TO MAKE THEM SUITABLE FOR USE IN HIGH SPEED ELECTRICAL CONTACT PUNCHED CARD EQUIPMENT.

PAGE 5, PARAGRAPH 2, OF THE BID SCHEDULE, ENTITLED "BID SAMPLES" PROVIDES THAT BIDDERS ARE REQUIRED TO SUBMIT WITH THEIR BIDS "A CARTON OF 2,000 FORMS PROPOSED TO BE FURNISHED FOR SIZE, STYLE, CONSTRUCTION, AND QUALITY AND REGISTRATION OF PRINTING ONLY. THEY MAY BE FURNISHED WITH A NON- SECURITY BACKGROUND TINT ON THE FACE, PRINTED IN BLACK ONLY ON BOTH SIDES, IN ACCORDANCE WITH THE ACCOMPANYING SPECIMEN COPIES.' IT IS FURTHER PROVIDED THAT BID SAMPLES IN THE QUALITIES, SIZES, ETC., MUST BE FURNISHED AS A PART OF THE BID, THAT THE SAMPLES WILL BE EVALUATED TO DETERMINE COMPLIANCES WITH THE SPECIFICATIONS AND THAT THE FAILURE OF THE SAMPLES TO CONFORM TO THE REQUIREMENTS OF THE SPECIFICATION WILL REQUIRE REJECTION OF THE BID.

THE TWO BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED AT THE APPOINTED TIME ON JUNE 20, 1962. YOU SUBMITTED A BID OF $1.689 PER THOUSAND FOR BOTH THE YELLOW TINT AND BLUE TINT DOMESTIC FORMS BUT DID NOT BID ON THE INTERNATIONAL MONEY ORDER FORMS. THE OTHER BIDDER, INTERNATIONAL BUSINESS MACHINE CORPORATION (IBM), QUOTED A PRICE OF $2.05 PER THOUSAND FOR THE YELLOW TINT DOMESTIC FORMS AND $1.96 PER THOUSAND FOR THE BLUE TINT DOMESTIC FORMS. THIS BIDDER ALSO OFFERED TO FURNISH THE INTERNATIONAL MONEY ORDERS FORMS, HOWEVER, THIS ITEM IS NOT INVOLVED IN YOUR PROTEST AND WILL NOT BE DISCUSSED FURTHER.

THE SAMPLES SUBMITTED WITH YOUR BID WERE NOT PUNCHED IN ACCORDANCE WITH THE SPECIMEN COPY (GLOSSY, PHOTOGRAPHIC PRINT) ATTACHED TO THE INVITATION AND ON JUNE 21, 1962, THE DAY AFTER THE OPENING OF THE BIDS, YOU WERE REQUESTED BY TELEPHONE TO SUBMIT SAMPLES PUNCHED IN ACCORDANCE WITH THE ILLUSTRATION. YOU COMPLIED WITH THIS REQUEST AND SUBMITTED THE PUNCHED SAMPLES ON JUNE 22, 1962. THE SAMPLES SUBMITTED BY THE OTHER BIDDER WERE PUNCHED. THE POST OFFICE DEPARTMENT REPORTS THAT THE PUNCHING WAS REQUIRED BY THE SPECIMEN COPY AND BY SECTION 3.2 OF THE SPECIFICATION.

UNDER THE COMPETITIVE BIDDING PROCEDURES YOU SHOULD NOT HAVE BEEN PERMITTED TO FURNISH NEW SAMPLES AFTER THE BID OPENING IF SUCH PUNCHING WAS REQUIRED AND IS A MATERIAL ELEMENT. IF SUCH BE THE CASE YOUR BID SHOULD HAVE BEEN DECLARED NONRESPONSIVE TO THE REQUIREMENTS OF THE INVITATION AND SHOULD HAVE BEEN REJECTED FOR THIS REASON ALONE. HOWEVER, YOUR BID WAS NOT REJECTED FOR THIS REASON AND YOU WERE PERMITTED TO, AND DID, SUBMIT AFTER THE BID OPENING NEW SAMPLES WHICH WERE PUNCHED AND, ON THE BASIS OF THE FACTS INVOLVED, WE ARE NOT REQUIRED TO QUESTION SUCH ACTION.

THE SAMPLE CARDS SUBMITTED BY EACH BIDDER WERE SENT TO THE NATIONAL BUREAU OF STANDARDS TO BE TESTED TO ASCERTAIN COMPLIANCE WITH PORTIONS OF THE SPECIFICATIONS. IN REPORT DATED JUNE 28, 1962, THE NATIONAL BUREAU OF STANDARDS ADVISED THAT YOUR SAMPLE CARDS FAILED TO MEET THE BASIC WEIGHT REQUIREMENTS. IBM SAMPLE CARDS WERE REPORTED TO HAVE MET THIS REQUIREMENT. THE REPORT ALSO SHOWED THAT THE SAMPLE CARDS SUBMITTED BY BOTH BIDDERS FAILED TO MEET THE POROSITY TEST. IT WAS DETERMINED THAT THE TEST WHICH WAS SPECIFIED FOR POROSITY WAS NOT RELEVANT TO THE FORMS INVOLVED. IN RESPONSE TO AN INQUIRY BOTH YOU AND IBM ADVISED THAT YOUR BIDS WOULD NOT HAVE BEEN ANY DIFFERENT IF THIS PARTICULAR REQUIREMENT HAD BEEN OMITTED FROM THE INVITATION. A TELEGRAM WAS ALSO SENT TO EACH OF THE OTHER FIRMS ON THE BIDDERS LIST TO ASCERTAIN IF THIS REQUIREMENT HAD PRECLUDED THEM FROM BIDDING. NO REPLIES TO THIS INQUIRY WERE RECEIVED. IN SUCH CIRCUMSTANCES THE POROSITY TEST REQUIREMENT WAS WAIVED. SINCE THE INAPPLICABLE TEST REQUIREMENT DID NOT AFFECT THE TWO BIDS RECEIVED AND APPARENTLY DID NOT PRECLUDE OTHER FIRMS FROM BIDDING, WE PERCEIVE NO BASIS TO QUESTION THE WAIVER OF THE TEST. HOWEVER, THE WAIVER OF THIS INAPPLICABLE TEST, THE INADVERTENT INCLUSION OF WHICH WAS NOT PREJUDICIAL TO ANY BIDDER, WOULD NOT WARRANT OR PERMIT THE WAIVER OF OTHER REQUIREMENTS WHICH WERE APPLICABLE AND MATERIAL.

THE FOUR SPECIFIC REASONS FOR THE REJECTION OF YOUR BID WERE SET FORTH BY THE POST OFFICE DEPARTMENT IN LETTER DATED JULY 13, 1962. IN LETTER DATED JULY 17, 1962, ADDRESSED TO THE POSTMASTER GENERAL AND IN LETTER TO THIS OFFICE OF JULY 18, 1962, YOU CONTEND THAT YOUR BID WAS ENTIRELY RESPONSIVE TO THE REQUIREMENTS OF THE INVITATION AND THAT THE BASIS FOR ITS REJECTION WERE NOT VALID FOR REASONS SET FORTH THEREIN.

THE FIRST REASON FOR THE REJECTION OF YOUR BID WAS THAT YOUR SAMPLE CARDS FAILED TO MEET THE BASIC WEIGHT REQUIREMENT. AS STATED ABOVE, THIS WAS BASED UPON A REPORT RECEIVED FROM THE NATIONAL BUREAU OF STANDARDS. HOWEVER, BY LETTER DATED SEPTEMBER 6, 1962, THE NATIONAL BUREAU OF STANDARDS ADVISED THE POST OFFICE DEPARTMENT THAT REPEAT TESTS ON THE SAME FORM PERFORMED ON SEPTEMBER 4 AND 5, 1962, WERE IN SUBSTANTIAL AGREEMENT AND SHOWED THAT THE SAMPLE CARDS FURNISHED BY YOU DID MEET THE BASIC WEIGHT REQUIREMENTS OF THE SPECIFICATIONS AND THAT IT MUST, THEREFORE, BE CONCLUDED THAT THE RESULTS IN THE PRIOR TEST REPORT WERE IN ERROR. ALSO A TEST PERFORMED BY THE GOVERNMENT PRINTING OFFICE AT THE REQUEST OF OUR AUDITORS SHOWS THAT BOTH SETS OF SAMPLE CARDS DID MEET THE BASIC WEIGHT REQUIREMENTS. NEVERTHELESS AT THE TIME OF THE REJECTION OF YOUR BID INFORMATION FURNISHED TO THE POST OFFICE DEPARTMENT SHOWED THAT YOUR SAMPLE CARDS DID NOT MEET THE BASIC WEIGHT REQUIREMENT AND IN VIEW OF OTHER REASONS FOR THE REJECTION OF YOUR BID, IT IS NOT NECESSARY TO DECIDE THE EFFECT OF THE REJECTION OF YOUR BID FOR THIS ONE REASON WHICH LATER WAS FOUND TO BE ERRONEOUS.

THE REPORT FURNISHED US BY THE POST OFFICE DEPARTMENT SETS FORTH THE REASONS (OMITTING THE FIRST SINCE IT HAS SUBSEQUENTLY BEEN FOUND TO BE ERRONEOUS) FOR THE REJECTION OF YOUR BID, YOUR OBJECTIONS THERETO, THEIR COMMENTS WITH RESPECT TO SUCH OBJECTIONS AND ALSO COMMENTS ON OBJECTIONS OF A MORE GENERAL NATURE SET FORTH IN THE LETTER OF JULY 17, 1962, AS FOLLOWS:

"THE SECOND GROUNDS FOR REJECTING THE BID OF TABCO WAS "CONTAINERS FURNISHED HAVE AN AVERAGE BURSTING STRENGTH OF 84 POUNDS, WHILE PARAGRAPH 5.1 OF THE SPECIFICATION REQUIRES A MINIMUM OF 125.'

"WITH REFERENCE TO THIS GROUND TABCO STATES:

"THERE IS NO INDICATION IN THE BID FORM THAT THE CARTON ITSELF WOULD BE TESTED. THE BID FORM MERELY STATES THAT--- "A CARTON OF 2,000 FORMS PROPOSED TO BE FURNISHED"--- THE SAMPLES SUBMITTED BY US IN ACCORDANCE WITH THE BID FORM WERE IN A CARTON WHICH MEETS ALL NECESSARY SPECIFICATIONS, AND, IN FACT, IS THE SAME CARTON WHICH HAS BEEN USED BY US IN DELIVERING POSTAL MONEY ORDERS FOR THE ENTIRE LAST YEAR.

"AT THE REQUEST OF THE POST OFFICE DEPARTMENT, SUBSEQUENT TO THE BID OPENING, WE SUPPLIED AN ADDITIONAL CONTAINER OF SAMPLE CARDS. THESE WERE PUNCHED ALTHOUGH THIS WAS NOT REQUIRED BY THE BID FORM. THEY WERE DELIVERED IN A CONTAINER WHICH DID NOT MEET SPECIFICATIONS, SINCE THE REQUEST WAS FOR THE PURPOSE OF EVALUATING THE HOLE PUNCHING, NOT THE CONTAINER. OBVIOUSLY, WE CAN SUPPLY THE PAPER CONTAINER AS WE HAVE FOR THE PAST YEAR. THE SAMPLES FURNISHED WITH THE BID MET THE SPECIFICATIONS AND WOULD BE CONTROLLING.'

"PAGE 5 OF THE INVITATION STATES THAT THE BIDDER SHALL SUBMIT

"A CARTON OF 2,000 FORMS PROPOSED TO BE FURNISHED FOR SIZE, STYLE, CONSTRUCTION, AND QUALITY AND REGISTRATION OF PRINTING ONLY.'

"PARAGRAPH (B) ON THE SAME PAGE CONTAINS THE FOLLOWING STATEMENT:

"FAILURE OF SAMPLES TO CONFORM TO THE REQUIREMENTS OF THE INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID.'

"IN ADDITION, SECTION 3.2 OF SPECIFICATION POD-F-172 (RE) CONTAINS THE STATEMENT

"THE AMOUNT WILL BE PRINTED AND PUNCHED AT THE MONEY ORDER SALES WINDOW BY A PRINT PUNCH DEVICE WHOSE PERFORMANCE DEPENDS UPON PRECISE CARD DIMENSIONS, ACCURATELY PREPUNCHED HOLES, AND ACCURATELY LOCATED IMPRINTING, I.E. DOLLAR VALUE BLOCK, ETC. FOR THESE REASONS IT IS REQUIRED THAT EACH BIDDER FURNISH WITH HIS BID A CARTON OF 2,000 FORMS TO BE PROCURED CONFORMING IN EVERY RESPECT TO THE REQUIREMENTS HEREIN.'

"IT IS POSSIBLE THAT TABCO'S BID SHOULD HAVE BEEN REJECTED FOR FAILURE OF THE SAMPLE MONEY ORDER FORMS SUBMITTED WITH IT TO COMPLY WITH THE QUOTED PORTION OF SECTION 3.2 OF THE SPECIFICATION. NEVERTHELESS, AT THE DEPARTMENT'S REQUEST, TABCO SUBMITTED ADDITIONAL SAMPLE FORMS PUNCHED IN ACCORDANCE WITH SECTION 3.2. TABCO ASSUMES THAT IT WAS ONLY THE CONTAINER SUPPLIED SUBSEQUENT TO THE BID OPENING WHICH DID NOT MEET SPECIFICATIONS. HOWEVER, BOTH THAT CONTAINER AND THE CONTAINER FURNISHED WITH THE BID WERE TESTED; BOTH FAILED. SINCE THE SAMPLE CARTON OF FORMS SUBMITTED AFTER BID OPENING WAS CONSIDERED TO HAVE BEEN IN SUBSTITUTION FOR THE CARTON SUBMITTED WITH THE BID, THE ORIGINAL TEST WAS PERFORMED ON THE CARTON CONTAINING THE PUNCHED FORMS. IT WAS FOUND TO HAVE AN AVERAGE BURSTING STRENGTH OF 83.67 POUNDS, ROUNDED TO 84 POUNDS. ON JULY 19, 1962, AFTER TABCO HAD FILED A PROTEST WITH YOUR OFFICE, THE OTHER CARTON WAS TESTED AND FOUND TO HAVE AN AVERAGE BURSTING STRENGTH OF 70 POUNDS. THE BURSTING STRENGTH EACH AT THE DIFFERENT POINTS IS REFLECTED IN EXHIBIT 9.

"WE MADE A DEMONSTRATION TEST ON THE CARTON FURNISHED WITH THE PUNCHED FORMS ON AUGUST 6, 1962, FOR TWO OF YOUR REPRESENTATIVES. THIS TEST WAS PERFORMED ON THE MULLEN BURSTING STRENGTH TESTER. THE CARTON HAD A BURSTING STRENGTH OF 84 POUNDS AT ONE POINT AND 90 POUNDS AT ANOTHER POINT.

"PARAGRAPH 5.1 OF SPECIFICATION POD-F-172 (RE) REQUIRED A MINIMUM BURSTING STRENGTH OF 125 POUNDS. SINCE THE SAMPLE REQUIRED TO BE FURNISHED IN ACCORDANCE WITH PAGE 5 OF THE INVITATION AND PARAGRAPH 3.2 IS "A CARTON," THERE WAS NO IMPROPRIETY IN TESTING THE CARTON FOR CONFORMITY WITH THE SPECIFICATION.

"THE THIRD GROUND FOR REJECTING TABCO'S BID WAS

"THE SIZE AND TINTING OF THE FORMS WAS SPLOTCHY AND NON-UNIFORM, THE PRINTING DENSITY IS NON-UNIFORM AND OF POOR QUALITY. PARAGRAPH 3.9 OF THE SPECIFICATION IS APPLICABLE.'

"IN RESPONSE TO THE FOREGOING, TABCO STATED:

"WE WOULD LIKE TO BRING TO YOUR ATTENTION THE FACT THAT CARDS SUPPLIED AS SAMPLES (AS WERE ALL CARDS SUPPLIED DURING THE PAST YEAR) WERE SUPPLIED FROM DRAWINGS AND NEGATIVES SUPPLIED BY THE POST OFFICE DEPARTMENT WHICH WE ASSUMED WERE APPROVED BY THE POST OFFICE DEPARTMENT PRIOR TO THEIR BEING RELEASED TO US. THESE WERE SUPPLIED BY IBM EVEN THOUGH WE WERE THE CONTRACTOR DURING THIS PERIOD. SAMPLES WERE SUBMITTED CONFORMING TO THE QUALITY WHICH HAD BEEN APPROVED BY THE POST OFFICE DURING THE PAST CONTRACT. IF A BETTER RESULT IS REQUIRED BY BOTH SUPPLIERS BETTER NEGATIVES SHOULD BE SUPPLIED.'

"IT APPEARS THAT THE FAULT IN THE SAMPLE CARDS WAS IN THE PRINTING WORKMANSHIP RATHER THAN THE DRAWINGS OR NEGATIVES INASMUCH AS THE DEFECTS MENTIONED VARY FROM CARD TO CARD. THESE STAINS OBVIOUSLY DID NOT RESULT FROM THE QUALITY OF THE NEGATIVES. AT THE BEGINNING OF 1962 FISCAL YEAR, THE DEPARTMENT RECOVERED FROM IBM FILM NEGATIVES WHICH HAD BEEN STORED FOR USE IN THE EVENT OF A NATIONAL EMERGENCY. THESE FILM NEGATIVES WERE TURNED OVER TO TABCO SO THAT COMPANY COULD USE THIS MEDIA TO MAKE PRINTING PLATES AND GET INTO PRODUCTION. AT NO TIME DURING 1962 FISCAL YEAR DID IBM PREPARE PLATES OR NEGATIVES FOR USE BY THE DEPARTMENT IN PRODUCING MONEY ORDER FORMS.

"THE SPECIMEN COPY FURNISHED WITH THE INVITATION TO BID WAS A PHOTOGRAPHIC REPRODUCTION OF A DRAWING PREPARED IN THE DEPARTMENT. IBM FURNISHED NONSECURITY, YELLOW TINTED SAMPLES WITH THIS BID.

"THE FOURTH OBJECTION TO THE SAMPLES SUBMITTED BY TABCO WAS

"FORMS DO NOT TEAR CLEANLY AT PERFORATION AS REQUIRED BY PARAGRAPH 3.7 OF THE SPECIFICATION.'

"WITH RESPECT TO THIS MATTER TABCO STATES:

"SAMPLES WERE MANUFACTURED AND EQUIPMENT MADE FROM IBM BLUEPRINTS BY MEN WITH MANY YEARS OF EXPERIENCE IN THEIR PRODUCTION WHILE IN THE EMPLOY OF IBM. THEY ARE EXACTLY LIKE ALL FORMS SUPPLIED WITH THE APPROVAL OF THE POST OFFICE DEPARTMENT DURING THE PAST YEAR. THE PERFORATIONS ARE OF TOP QUALITY AND DEFINITELY MEET THE NECESSARY REQUIREMENTS.'

"DESPITE THE BIDDER'S ASSERTION WITH RESPECT TO EXPERIENCE OF ITS STAFF AND IDENTITY WITH PRODUCTS SUPPLIED UNDER PRIOR YEAR CONTRACT, THE SAMPLES TESTED DID NOT, IN FACT, TEAR CLEANLY BUT LEFT EDGES WHICH WOULD INTERFERE WITH MACHINE PROCESSING. IN THIS CONNECTION, IT SHOULD BE NOTED THAT HIGHER SPEED MACHINES TO BE USED BY THE TREASURY DEPARTMENT IN RECONCILIATION OF MONEY ORDERS WILL REQUIRE CLOSER TOLERANCES THAN THE MACHINES PREVIOUSLY USED BY THE DEPARTMENT AT THE KANSAS CITY MONEY ORDER CENTER. "THE TABULATING CARD COMPANY WAS AWARDED A CONTRACT FOR FURNISHING MONEY ORDER FORMS TO THIS DEPARTMENT FOR THE 1962 FISCAL YEAR UNDER INVITATION NO. 6, ISSUED MAY 5, 1961. PURCHASE ORDERS IN THE TOTAL AMOUNT OF $430,978.30 WERE PLACED AGAINST THIS CONTRACT. COPIES OF THE BIDDERS LIST, ABSTRACT OF BIDS RECEIVED AND ACCEPTED BID UNDER THIS INVITATION ARE ATTACHED, EXHIBIT 10. THE INTERNATIONAL BUSINESS MACHINES CORPORATION FURNISHED MONEY ORDER FORMS DURING THE 1961 FISCAL YEAR.

"MR. CONOLE'S LETTER OF JULY 17, 1962, TO THE POSTMASTER GENERAL,A COPY OF WHICH IS ATTACHED, TOGETHER WITH A COPY OF OUR REPLY, EXHIBIT 11, ALLEGES THAT THE TABULATING CARD COMPANY HAD CONTINUALLY BEEN HARASSED BY THE DEPARTMENT EVER SINCE THEY HAD BEEN LOW BIDDER ON THE CONTRACT EFFECTIVE JULY 1, 1961. DURING THE TIME THAT CONTRACT WAS IN EFFECT, MORE THAN 600 COMPLAINTS WERE RECEIVED FROM POST OFFICES THROUGHOUT THE COUNTRY CONCERNING DISCREPANCIES IN THE MONEY ORDER FORMS. THESE COMPLAINTS INVOLVED OMISSION OF SERIAL NUMBERS, DUPLICATE SERIAL NUMBERS AND DIFFERENT SERIAL NUMBERS ON THE THREE PORTIONS OF THE FORM. THE COMPLAINTS WERE BROUGHT TO THE ATTENTION OF OFFICIALS OF THE BELTSVILLE, MARYLAND, PLANT OF THE TABULATING CARD COMPANY IN AN EFFORT TO ELIMINATE SUCH ERRORS IN FUTURE SHIPMENTS. COPIES OF MANY OF THE COMPLAINTS WERE FURNISHED TO MR. PETER RAGUSA OF THE BELTSVILLE PLANT. THIS ACTION WAS FULLY WARRANTED AND CANNOT PROPERLY BE TERMED AS HARASSMENT.

"THE STATEMENT IN MR. CONOLE'S LETTER THAT "WE ASSUMED A BACKLOG OF SOME 20,000,000 OF THESE FORMS WHICH IBM HAD FAILED TO DELIVER IN THE APPROPRIATE AMOUNT OF TIME" IS INCORRECT. AS OF JULY 1, 1961, 28,000,000 FORMS WERE ON ORDER FROM THE INTERNATIONAL BUSINESS MACHINES CORPORATION. DELIVERY WAS COMPLETED BY IBM ON AUGUST 14, 1961, ACCORDING TO A SCHEDULE ARRANGED TO MEET OUR NEEDS AND CONVENIENCE.

"THE CONTRACT WITH THE TABULATING CARD COMPANY FOR THE 1962 FISCAL YEAR SPECIFIED AN APPROXIMATE QUANTITY OF 300,000,000 FORMS WITH DELIVERY TO BE MADE WITHIN FOUR WEEKS AFTER RECEIPT OF SHIPPING INSTRUCTIONS OR AT SUCH LATER DATE AS MIGHT BE DESIGNATED BY THE CONTRACTING OFFICER. ORDERS FOR A TOTAL OF 240,770,000 FORMS WERE PLACED AGAINST THE CONTRACT. FIVE ORDERS FOR A TOTAL OF 19,970,000 FORMS WERE PLACED DURING MAY, 1962, AND TWO ORDERS FOR A TOTAL OF 10,000,000 WERE PLACED DURING JUNE, 1962. THE FIRST ORDER UNDER THE 1962 FISCAL YEAR CONTRACT WAS PLACED WITH THE TABULATING CARD COMPANY ON JULY 13, 1961, FOR 9,200,000 FORMS. THE FIRST DELIVERY OF 1,000,000 FORMS UNDER THIS ORDER WAS MADE ON AUGUST 7, 1961, AND THE ORDER WAS COMPLETED ON AUGUST 23, 1961.

"THE ALLEGED SERIOUS COMPLAINT WHICH MR. CONOLE STATED HAD BEEN BROUGHT AGAINST THE TABULATING CARD COMPANY, INVOLVED SIX DUPLICATE MONEY ORDER FORMS WHICH WERE LATER ESTABLISHED AS HAVING BEEN FURNISHED BY THE INTERNATIONAL BUSINESS MACHINES CORPORATION UNDER THE PREVIOUS CONTRACT. THIS WAS AN ERROR ON OUR PART. AS MENTIONED EARLIER IN THIS LETTER, MORE THAN 600 INCIDENTS OF ERRORS IN FORMS PRODUCED BY THE TABULATING CARD COMPANY DURING THE 1962 FISCAL YEAR WERE BROUGHT TO THE CONTRACTOR'S ATTENTION. IT SHOULD BE NOTED THAT LESS THAN SIX COMPLAINTS AROSE DURING THE TIME MONEY ORDER FORMS WERE FURNISHED BY THE INTERNATIONAL BUSINESS MACHINES CORPORATION UNDER THE 1961 FISCAL YEAR CONTRACT.'

WITH RESPECT TO THE SECOND REASON FOR THE REJECTION OF YOUR BID, NAMELY, THE FAILURE OF THE CONTAINER TO HAVE A MINIMUM BURSTING STRENGTH OF 125 POUNDS, WE AGREE THAT STRICTLY ONLY THE CONTAINER IN WHICH THE FIRST SAMPLES WERE FURNISHED SHOULD BE CONSIDERED AS THE SAMPLE FOR TEST PURPOSES. BUT FOLLOWING THIS LINE OF REASONING AND ASSUMING THAT THE SAMPLE CARDS WERE REQUIRED TO BE PUNCHED, YOU SHOULD NOT HAVE BEEN ALLOWED TO SUBMIT THE PUNCHED SAMPLES AFTER THE BID OPENING AND YOUR BID SHOULD HAVE BEEN REJECTED FOR FAILURE OF THE SAMPLES TO COMPLY WITH THE SPECIFICATIONS. HOWEVER, THE POST OFFICE DEPARTMENT REPORTS THAT NEITHER THE FIRST NOR THE SECOND CONTAINER FURNISHED BY YOU MET MINIMUM SPECIFICATION REQUIREMENTS.

THE THIRD AND FOURTH REASONS FOR THE REJECTION OF YOUR BID ESSENTIALLY RELATE TO QUALITY OF WORKMANSHIP AND ARE MATTERS PRIMARILY FOR DETERMINATION BY THE ADMINISTRATIVE AGENCY. WE HAVE CONSISTENTLY HELD THAT THEIR DETERMINATIONS IN THIS REGARD ARE FINAL IN THE ABSENCE OF A CLEAR SHOWING THAT SUCH DETERMINATIONS ARE ERRONEOUS. IN THE INSTANT CASE, YOU APPARENTLY WERE AWARE THAT THE MONEY ORDER FORMS WERE TO BE USED BY THE TREASURY DEPARTMENT ON HIGHER SPEED MACHINES THAN WERE PREVIOUSLY USED BY THE POST OFFICE DEPARTMENT AT THE KANSAS CITY MONEY ORDER CENTER AND THAT, THEREFORE, CLOSER TOLERANCES AND A HIGH DEGREE OF WORKMANSHIP WOULD BE REQUIRED. WHILE THE EXPERIENCE OF THE POST OFFICE DEPARTMENT WITH THE MONEY ORDER FORMS FURNISHED BY YOU, UNDER THE 1962 FISCAL YEAR CONTRACT, IS NOT STRICTLY APPLICABLY TO THE SAMPLES FURNISHED BY YOU AS TO WHAT YOU PROPOSED TO FURNISH IF AWARDED THE CONTRACT FOR THE 1963 FISCAL YEAR, IT CANNOT BE IGNORED. HOWEVER, ON THE BASIS OF SAMPLES SUBMITTED BY YOU, IT WAS DETERMINED THAT THE PRINTING WAS NON-UNIFORM AND OF POOR QUALITY AND THAT THE FORMS DID NOT TEAR CLEANLY AT THE PERFORATIONS AS REQUIRED BY PARAGRAPH 3.7 OF THE SPECIFICATIONS. THERE IS NOTHING WHICH WOULD JUSTIFY THIS OFFICE IN QUESTIONING THE ADMINISTRATIVE DETERMINATIONS IN THESE RESPECTS.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, TAKEN AS A WHOLE, WE DO NOT FIND SUFFICIENT BASIS TO JUSTIFY THIS OFFICE IN QUESTIONING THE REJECTION OF YOUR BID UNDER THE INVITATION HERE INVOLVED AS NOT COMPLYING WITH THE REQUIREMENTS OF THE SPECIFICATION AND, THEREFORE, YOUR PROTEST IS DENIED.