B-150748, APR. 1, 1963

B-150748, APR. 1, 1963

TO MILLER PRINTING MACHINERY COMPANY:

WE AGAIN REFER TO YOUR LETTER OF DECEMBER 28, 1962, ADDRESSED TO THE BASE PROCUREMENT OFFICE, SHEPPARD AIR FORCE BASE, TEXAS, PROTESTING AGAINST THE AWARD OF A CONTRACT BY THE DEPARTMENT OF THE AIR FORCE TO HARRIS-SEYBOLD COMPANY FOR AN OFFSET PRESS UNDER PURCHASE ORDER NO. (41 612) 63-5288, ISSUED ON DECEMBER 19, 1962, PURSUANT TO REQUIREMENTS CONTRACT GS-00S- 37251, COVERING THE PERIOD JULY 1, 1962, THROUGH JUNE 30, 1963.

THE CONTRACTING AGENCY DETERMINED THAT IT HAD A REQUIREMENT FOR THE TYPE OF OFFSET PRESS DESCRIBED IN YOUR LETTER. TWO PRODUCTS MEETING THE REQUIREMENT WERE LISTED IN FEDERAL SUPPLY SCHEDULE FSC GROUP 36, PART II: THE HARRIS-SEYBOLD MODEL 136 AND YOUR MODEL 23 BY 36. AT THE SAME TIME IT WAS DETERMINED THAT THE AGENCY WOULD TRADE IN THREE OLD PRESSES AND BOTH CONTRACTORS WERE ASKED TO QUOTE ALLOWANCES FOR THE TRADE-INS AGAINST THE PURCHASE PRICE OF THE NEW PRESS. HARRIS SEYBOLD OFFERED A TRADE-IN OF $10,650, WHILE YOUR FIRM INDICATED A WILLINGNESS TO ALLOW $8,000 AGAINST THE PURCHASE PRICE OF THE NEW PRESS. THE CONTRACTING OFFICER EVALUATED COSTS OF PRESS AND OPTIONAL EQUIPMENT LESS TRADE-IN AS FOLLOWS:

TABLE NOMENCLATURE HARRIS-SEYBOLD MILLER 1. PRINTING PRESS (INSTALLED COMPLETE) $32,675.00 $30,250.00

OPTIONAL EQUIPMENT

A. GALVANNEALED DRIP PAN 1 EA 150.00 75.00

B. BALDWIN INK FOUNTAIN AGITATOR 1 EA 390.00 390.00

C. BALDWIN WATER FOUNTAIN LEVEL 1 EA 75.00 75.00

D. BALDWIN PRESS WASHER 1 EA 180.00 IN PRESS

E. ADDITIONAL PILE BOARDS 4 EA 240.00 524.00

F. HEBERT NEUTRALIZER DOUBLE BAR

(HARRIS-SEYBOLD) OR 1 EA 283.00 ---- -

TAKK STATIC ELIMINATOR (MILLER) 1 EA ------ 504.00

G. RUBBER OR VULCANIZED OIL COVERING

FOR EXTRA ROLLERS (HARRIS-SEYBOLD) 172.00 ---- -

OR

EXTRA ROLLER CORES WITH RUBBER

COVERINGS TO COMPLETE SECOND OR

EXTRA SET OF INKING ROLLERS (MILLER) ------ 324.50

TOTAL $34,165.00 $32,142.50

LESS TRADE-INS 10,650.00 8,000.00

DOLLAR TRADE DIFFERENCE $23,515.00 $24,142.50

ON THE BASIS OF THE EVALUATION IT WAS DETERMINED THAT HARRIS-SEYBOLD WAS LOW BY $627.50, AND THE PURCHASE ORDER WAS ISSUED FOR THAT ITEM AS WELL AS SOME OTHERS ON DECEMBER 19, 1962.

FOLLOWING RECEIPT OF YOUR LETTER OF PROTEST, A COPY OF WHICH WAS FURNISHED TO US, THE CONTRACTOR WAS NOTIFIED ON DECEMBER 31, 1962, TO SUSPEND ALL ACTION ON DELIVERY OF THE ITEM UNTIL FURTHER NOTICE. UNDERSTAND THAT THE SUSPENSION NOTICE HAS BEEN ALLOWED TO STAND PENDING OUR RESOLUTION OF THE MATTER.

YOUR PROTEST IS BASED ON THE CONTENTION THAT THE LOWEST COST TO THE GOVERNMENT WOULD BE OBTAINED BY MAKING AWARD TO YOUR FIRM. IT IS FIRST STATED THAT THE PRICE FOR YOUR PRESS, AS STATED IN THE AUTHORIZED FEDERAL SUPPLY SCHEDULE PRICE LIST, INCLUDES DELIVERY AND INSTALLATION WHEREAS THE PRICE LIST FOR THE HARRIS-SEYBOLD PRODUCT STATES AS FOLLOWS:

"PRICES QUOTED ABOVE ARE FOR DELIVERY TO LOADING PLATFORM, BUT NOT UNLOADED, AT POINT OF DELIVERY. ON DELIVERIES, WITHIN THE CONTINENTAL LIMITS OF THE UNITED STATES, PRICES ALSO INCLUDE THE SERVICES OF ONE OF OUR REPRESENTATIVES FOR A MAXIMUM OF FIVE (5) DAYS TO SUPERVISE ERECTION OF THE EQUIPMENT AND TO INSTRUCT GOVERNMENT PERSONNEL IN ITS OPERATION. RIGGING SERVICE CAN BE MADE AVAILABLE THROUGH SUB CONTRACTORS AT AN ADDITIONAL CHARGE IF DESIRED.'

BASED ON THE ABOVE, YOU CONTEND THAT TO PERMIT A VALID COMPARISON, YOUR PRICE FOR THE ITEM SHOULD BE REDUCED BY $850, REPRESENTING THE COST OF FACTORY PREWIRING AND INSTALLATION EXPENSE. WITH RESPECT TO THIS ITEM IT IS THE POSITION OF THE DEPARTMENT OF THE AIR FORCE THAT HARRIS-SEYBOLD, NOTWITHSTANDING THE PRICE LIST, OFFERED TO PROVIDE INSTALLATION AT THE QUOTED PRICE IN THE COURSE OF NEGOTIATIONS WITH RESPECT TO THE TRADE-IN ALLOWANCES. YOU DO NOT APPEAR TO DISPUTE THE RIGHT OF THE DEPARTMENT TO SOLICIT TRADE-IN ALLOWANCES AND TO EVALUATE THEM IN SELECTING THE SUCCESSFUL CONTRACTOR. WHILE WE AGREE THAT SUCH TRADE-IN ALLOWANCE WOULD NORMALLY BE STATED IN TERMS OF A REDUCTION IN IN THE SALES PRICE OF THE NEW ITEM, WE ARE AWARE OF NO REASON WHY IT COULD NOT IN PART ALSO TAKE THE FORM OF A FREE SERVICE FOR WHICH THERE WOULD OTHERWISE BE A CHARGE. THEREFORE, WE CANNOT AGREE THAT IT WOULD BE PROPER IN EVALUATING YOUR PRICE TO DEDUCT $850.

SECONDLY, YOU CONTEND THAT THE STATIC ELIMINATOR INCLUDED AS AN ITEM OF OPTIONAL EQUIPMENT FOR YOUR PRESS IS NOT THE EQUIVALENT OF THE ITEM INCLUDED FOR THE HARRIS-SEYBOLD PRESS. THE $504 INDICATED AS THE COST OF THE ADDITIONAL ITEM IN YOUR CASE REPRESENTS THE COST OF A TAKK STATIC ELIMINATOR WHICH INCLUDES A DOUBLE BAR AND TWO SINGLE BARS, WHILE THE STATIC ELIMINATOR LISTED FOR THE HARRIS-SEYBOLD PRODUCT INCLUDES ONLY A DOUBLE BAR. YOUR POSITION IS THAT IF THE DOUBLE BAR ALONE IS CONSIDERED SATISFACTORY, THE PRICE FOR THE EQUIPMENT TO BE USED ON YOUR PRESS WOULD BE ONLY $253.30. THEREFORE, YOU CONCLUDE THAT IN EVALUATING YOUR PRICE THERE SHOULD BE A FURTHER REDUCTION OF $250.70. THE CONTRACTING OFFICER HAS ADVISED US THAT THE STATIC ELIMINATION SYSTEMS WERE SPECIFIED BY THE USING ACTIVITY, WHICH IN EACH CASE INDICATED THE ADDITIONAL PARTS REGARDED AS NECESSARY TO SERVE THE GOVERNMENT'S INTENDED PURPOSES. WHAT WOULD BE NECESSARY IN EACH CASE TO SATISFY THE GOVERNMENT'S PURPOSES IS A MATTER FOR DETERMINATION PRIMARILY BY THE USING ACTIVITY WHO, IT MUST BE PRESUMED, WOULD BE IN THE BEST POSITION TO DETERMINE THE GOVERNMENT'S NEEDS. OBVIOUSLY, OUR OFFICE CANNOT POSSIBLY HAVE AVAILABLE THE NECESSARY TECHNICAL EXPERTNESS TO ESTABLISH THE GOVERNMENT'S REQUIREMENTS WITH RESPECT TO THE HUNDREDS OF THOUSANDS OF ITEMS PROCURED ANNUALLY BY VARIOUS AGENCIES. IT HAS THEREFORE BEEN FIRMLY ESTABLISHED AS OUR PRACTICE TO ACCEPT THE CONTRACTING AGENCY'S DETERMINATION OF THE SPECIFICATIONS NECESSARY TO SERVE THE GOVERNMENT'S PURPOSES AND WHETHER A GIVEN PRODUCT CONFORMS THERETO IN THE ABSENCE OF A CLEAR SHOWING TO THE CONTRARY. SEE 17 COMP. GEN. 554.

ACCORDINGLY, WE CONCLUDE THAT WITH RESPECT TO THE COSTS OF INSTALLATION AND WIRING, AND THE STATIC ELIMINATORS, THE EVALUATION EMPLOYED BY THE DEPARTMENT OF THE AIR FORCE WAS PROPER. ON THAT BASIS THE HARRIS-SEYBOLD PRICE WOULD STILL BE LOW EVEN IF WE ACCEPT YOUR POSITION WITH RESPECT TO ALL OF THE ITEMS IN CONTENTION. THEREFORE, NO PURPOSE WOULD BE SERVED BY CONSIDERING THE VALIDITY OF THOSE CONTENTIONS, AND WE MUST CONCLUDE THAT THE AWARD MADE BY THE AIR FORCE WAS NOT INCONSISTENT WITH LAW OR THER TERMS OF THE FEDERAL SUPPLY SERVICE CONTRACT.