B-149589, DEC. 31, 1962

B-149589: Dec 31, 1962

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IN JUNE OF 1962 CONTRACTS WERE AWARDED BY THE DIRECTORATE OF PROCUREMENT. A CALL OR PURCHASE ORDER IS ISSUED ON THAT BASIS. STANDARD REGISTER WAS ASKED IF IT HAD AVAILABLE CAPACITY TO ACCEPT THE CALL AND. A CALL OR PURCHASE ORDER WAS ISSUED TO STANDARD REGISTER AT $368. THE PRICE FOR THE EQUIVALENT PRODUCT UNDER THE MCGREGOR AND WERNER CONTRACT WAS DETERMINED TO BE $16.3663 PER THOUSAND. THE USE OF THIS ITEM WAS BASED UPON THE CONTRACTING AGENCY'S UNDERSTANDING OF THE ACTUAL GOVERNMENT REQUIREMENT AT THE TIME THE CALL WAS ISSUED. WE HAVE BEEN ADVISED INFORMALLY THAT AFTER ISSUANCE OF THE CALL. THE CALL WAS AMENDED TO PROVIDE FOR THE USE OF A PERFORATED TAG BACKING FOR REINFORCEMENT IN LIEU OF THE EYELET PATCH.

B-149589, DEC. 31, 1962

TO GARDNER, MORRISON AND ROGERS:

WE AGAIN REFER TO YOUR LETTERS OF JULY 30, OCTOBER 2 AND NOVEMBER 30, 1962, PROTESTING ON BEHALF OF MCGREGOR AND WERNER, INCORPORATED, AGAINST THE AWARD OF A PURCHASE ORDER TO THE STANDARD REGISTER COMPANY UNDER AIR FORCE CONTRACT NO. AF 33/601/-6683 FOR THE PROCUREMENT OF 24,000,000 AFTO 211 FORMS.

IN JUNE OF 1962 CONTRACTS WERE AWARDED BY THE DIRECTORATE OF PROCUREMENT, WRIGHT-PATTERSON AIR FORCE BASE, OHIO, TO MCGREGOR AND WERNER, INCORPORATED, THE STANDARD REGISTER COMPANY AND ONE OTHER FIRM FOR THE PROCUREMENT ON CALL OF SPECIAL PRINTING SUPPLIES AND SERVICES FOR CARBON INTERLEAVED FORMS. EACH CONTRACT SET UNIT PRICES FOR THE ENUMERATED ITEMS OF SUPPLIES AND SERVICES INCLUDED THEREIN. WHEN A NEED FOR ANY OF SUCH ITEMS ARISES THE CONTRACTING AGENCY DETERMINES UNDER WHICH CONTRACT THEY MAY BE PROCURED AT THE LOWEST COST TO THE GOVERNMENT. SUBJECT TO ASSURANCE FROM THE CONTRACTOR OF CAPACITY TO PERFORM WITHIN THE TIME REQUIRED, A CALL OR PURCHASE ORDER IS ISSUED ON THAT BASIS.

IN JULY A REQUIREMENT AROSE FOR THE STATED FORMS AND THE CONTRACTING AGENCY DETERMINED THAT THE BEST PRICE COULD BE OBTAINED UNDER THE STANDARD REGISTER CONTRACT. ON JULY 6, 1962, STANDARD REGISTER WAS ASKED IF IT HAD AVAILABLE CAPACITY TO ACCEPT THE CALL AND, UPON RECEIPT OF AN AFFIRMATIVE ANSWER, A CALL OR PURCHASE ORDER WAS ISSUED TO STANDARD REGISTER AT $368,127.09, OR $15.3386 PER THOUSAND. THE PRICE FOR THE EQUIVALENT PRODUCT UNDER THE MCGREGOR AND WERNER CONTRACT WAS DETERMINED TO BE $16.3663 PER THOUSAND. THE PRICE COMPUTED INCLUDED THE USE OF A REINFORCED EYELET (PATCH) THROUGH TAG STOCK CALLED FOR UNDER ITEM 2.M./1) OF THE CONTRACTS, AND THE PURCHASE ORDER INCLUDED SUCH REINFORCEMENTS. THE USE OF THIS ITEM WAS BASED UPON THE CONTRACTING AGENCY'S UNDERSTANDING OF THE ACTUAL GOVERNMENT REQUIREMENT AT THE TIME THE CALL WAS ISSUED.

WE HAVE BEEN ADVISED INFORMALLY THAT AFTER ISSUANCE OF THE CALL, AND AT THE SUGGESTION OF THE CONTRACTOR, THE CALL WAS AMENDED TO PROVIDE FOR THE USE OF A PERFORATED TAG BACKING FOR REINFORCEMENT IN LIEU OF THE EYELET PATCH, UPON A DETERMINATION THAT EITHER WAS EQUALLY ACCEPTABLE FOR THE GOVERNMENT'S PURPOSES. YOUR PROTEST IS BASED UPON THE CONTENTION THAT SUCH BACKING FOR REINFORCEMENT IS ALSO PROVIDED FOR AT PAGE 22 OF THE CONTRACT PRICING SCHEDULE, AND THAT, BASED UPON THE USE OF THAT ITEM IN LIEU OF THE EYELET, YOUR CONTRACT PRICE WAS LOWER THAN THAT OF STANDARD REGISTER AND YOUR FIRM SHOULD THEREFORE HAVE RECEIVED THE AWARD. SHOULD BE NOTED IN THIS CONNECTION THAT REGARDLESS OF THE CONTRACTOR THE PRICE UNDER THE ITEM AT PAGE 22 IS SIGNIFICANTLY LESS THAN THE PRICE FOR THE EYELET UNDER ITEM 2.M. (1).

IT IS THE POSITION OF THE DEPARTMENT OF THE AIR FORCE THAT THE REINFORCED BACKING OF THE TYPE ACTUALLY USED ON THE FORMS BEING DELIVERED UNDER THE CURRENT CALL IS NOT PROVIDED FOR AT PAGE 22 OR ANY OTHER PART OF THE PRICING SCHEDULE. IT IS CONCEDED, HOWEVER, THAT THE SUBSTITUTION RESULTS IN AN EQUALLY USABLE FORM AT LOWER COST, AND SHOULD BE PROVIDED FOR. HAVE BEEN ADVISED ALSO THAT THE DEPARTMENT HAS TAKEN UP WITH THE CONTRACTOR THE MATTER OF REDUCING THE CONTRACT PRICE TO REFLECT THE LOWER COST OF THE SUBSTITUTE ITEMS, AS WOULD IN ANY EVENT BE REQUIRED BY OUR DECISION AT 39 COMP. GEN. 726. IN ADDITION, ACTION IS BEING TAKEN TO AMEND THE THREE BASIC CONTRACTS TO PROVIDE SPECIFIC PRICES FOR SUCH REINFORCED BACKING WITH RESPECT TO FUTURE CALLS AND TO INSURE THAT SUCH BACKING IS CALLED FOR WHEN CONSISTENT WITH THE GOVERNMENT'S INTEREST IN LIEU OF THE HIGHER COST REINFORCED EYELET.

THE AIR FORCE POSITION IS THAT AT THE TIME THE CALL WAS ISSUED THE LEGITIMATE REQUIREMENT FOR THE FORMS WAS IN GOOD FAITH CONSIDERED TO INCLUDE THE REINFORCED EYELET PATCH PURSUANT TO ITEM 2.M. (1). IN VIEW THEREOF IT IS OUR JUDGMENT THAT THE CALL WAS PROPERLY ISSUED TO THE CONTRACTOR OFFERING THE LOWEST PRICE AS REQUIRED BY THE TERMS OF THE CONTRACTS AND THE RULES GOVERNING COMPETITIVE PROCUREMENT.

WE RECOGNIZE THAT A SIMILAR CALL WAS ISSUED TO MCGREGOR AND WERNER ON JUNE 20 WHEREIN THE REINFORCED BACKING WAS SPECIFIED AND CONSIDERED TO HAVE BEEN INCLUDED UNDER THE ITEM AT PAGE 22 OF THE PRICING SCHEDULE. THE AIR FORCE CONCEDES THAT THE UTILITY OF THE REINFORCED BACKING IN LIEU OF THE EYELET SHOULD HAVE BEEN RECOGNIZED AT THAT TIME AND PROVIDED FOR WITH RESPECT TO FURTHER PROCUREMENTS. THAT IT WAS NOT RECOGNIZED AT THE TIME INDICATES, POSSIBLY, A LAPSE IN EFFICIENCY WHICH THE AIR FORCE IS NOW TAKING STEPS TO OVERCOME. IT MAY BE SAID IN EXPLANATION OF THE LAPSE THAT THE CALL OF JUNE 20 REPRESENTED A PROCUREMENT REQUIREMENT WHICH HAD APPARENTLY SHORT-CIRCUITED SOME OF THE NORMAL PROCEDURES SO THAT THE AIR FORCE SUBJECT MATTER SPECIALISTS DID NOT HAVE THE SAME VOICE IN ITS ISSUANCE WHICH THEY COULD BE EXPECTED TO HAVE IN PROCUREMENTS OF THIS TYPE. IT MAY ALSO BE THAT SOME DIFFICULTIES REPORTED TO HAVE BEEN EXPERIENCED WITH SOME OF THE FORMS OBTAINED UNDER THE JUNE 20 CALL WERE RESPONSIBLE IN SOME MEASURE FOR THE FAILURE TO RECOGNIZE THE DESIRABILITY OF USING THE REINFORCED BACKING. IN ANY CASE, AS INDICATED ABOVE, NO BASIS HAS BEEN PRESENTED FOR QUESTIONING THE VALIDITY FROM A LEGAL STANDPOINT OF THE PROCUREMENT MADE UNDER THE CALL OF JULY 11 TO STANDARD REGISTER. HOWEVER, YOUR PROTEST HAS RESULTED IN STEPS TO IMPROVE FUTURE PROCUREMENTS OF THIS TYPE AS DESCRIBED ABOVE, WHICH ARE EXPECTED TO PREVENT SIMILAR INCIDENTS IN THE FUTURE.