B-150870, JUN. 17, 1963

B-150870: Jun 17, 1963

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THE ORDER WAS ISSUED UNDER AUTHORITY OF 10 U.S.C. 2304 (A) (3) WHICH PERMITS PURCHASE BY NEGOTIATION WHEN THE AGGREGATE AMOUNT INVOLVED IS NOT MORE THAN $2. THE NAVY REPORTED TO US THAT THE ORDER WAS CANCELLED ELEVEN DAYS AFTER THE SPECIFIED DELIVERY DATE BECAUSE YOU ADVISED THAT IT COULD NOT BE COMPLETED ON TIME. YOU WERE ALLOWED TO EXAMINE THE NAVY REPORT AND IN LETTER OF APRIL 29. YOU DISPUTED THE REASON STATED FOR CANCELLATION AND CONTENDED THAT A NAVY EMPLOYEE TOLD YOU THE ORDER WAS CANCELLED BECAUSE YOUR FIRM WAS ON THE NAVY EXPERIENCE LIST. TO YOUR CONTENTION THE NAVY HAS RESPONDED THAT THE EMPLOYEE TO WHOM YOU REFERRED WAS UNAUTHORIZED TO ADVISE YOU AS HE DID. AGAIN STATES THAT THE ONLY REASON FOR CANCELLATION WAS YOUR FAILURE TO DELIVER ON TIME.

B-150870, JUN. 17, 1963

TO MR. DAVID A. WALSH:

IN LETTER OF FEBRUARY 15, 1963, YOU PROTESTED AGAINST AN AWARD BY THE NAVY TO THE SUCCESSFUL BIDDER FOR 1,000 LIGHT MARKERS COVERED BY IFB600- 321-63, AND YOU REQUESTED THAT THE NAVY BE ASKED TO PURCHASE THOSE LIGHT MARKERS THROUGH REINSTATEMENT OF CANCELLED PURCHASE ORDER ASO-42828 (REQUISITION 383/236948/62) PREVIOUSLY ISSUED TO YOUR FIRM.

THE SUBJECT PURCHASE ORDER, ISSUED MAY 11, 1962, REQUIRED DELIVERY OF 35 LIGHT MARKERS AT $24 A UNIT WITHIN 30 DAYS. THE ORDER WAS ISSUED UNDER AUTHORITY OF 10 U.S.C. 2304 (A) (3) WHICH PERMITS PURCHASE BY NEGOTIATION WHEN THE AGGREGATE AMOUNT INVOLVED IS NOT MORE THAN $2,500. THE NAVY REPORTED TO US THAT THE ORDER WAS CANCELLED ELEVEN DAYS AFTER THE SPECIFIED DELIVERY DATE BECAUSE YOU ADVISED THAT IT COULD NOT BE COMPLETED ON TIME. YOU WERE ALLOWED TO EXAMINE THE NAVY REPORT AND IN LETTER OF APRIL 29, 1963, YOU DISPUTED THE REASON STATED FOR CANCELLATION AND CONTENDED THAT A NAVY EMPLOYEE TOLD YOU THE ORDER WAS CANCELLED BECAUSE YOUR FIRM WAS ON THE NAVY EXPERIENCE LIST. TO YOUR CONTENTION THE NAVY HAS RESPONDED THAT THE EMPLOYEE TO WHOM YOU REFERRED WAS UNAUTHORIZED TO ADVISE YOU AS HE DID, AND AGAIN STATES THAT THE ONLY REASON FOR CANCELLATION WAS YOUR FAILURE TO DELIVER ON TIME.

IT IS SIGNIFICANT TO NOTE TOO THAT THE ISSUANCE OF THIS PURCHASE ORDER TO YOUR FIRM WHILE IT WAS UNDER DEBARMENT, EFFECTIVE APRIL 24, 1962, UNDER THE WALSH-HEALEY ACT WAS IN CONTRAVENTION OF THE STATUTORY PROHIBITION IN SECTION 3 OF THE ACT, 41 U.S.C. 37, AGAINST AWARDING CONTRACTS TO DEBARRED FIRMS. THIS WOULD HAVE BEEN SUFFICIENT REASON IN ITSELF TO CANCEL THE PURCHASE ORDER IF THE PURCHASING ACTIVITY HAD SOUGHT TO RELY UPON IT. SEE PAISNER V. THE UNITED STATES, 138 CT.CL. 420, CERTIORARI DENIED, 355 U.S. 941. ALTHOUGH ON JANUARY 21, 1963, THE SECRETARY OF LABOR DECIDED TO REMOVE THE DEBARMENT AGAINST YOU AND YOUR FIRM, HE DID NOT INDICATE THAT ELIGIBILITY WAS TO BE RESTORED RETROACTIVELY.

AS TO IFB600-321-63, THAT INVITATION WAS ISSUED ON DECEMBER 14, 1962, AND BIDS RECEIVED IN RESPONSE TO IT WERE OPENED ON JANUARY 15, 1963. ON BOTH DATES, YOU AND YOUR FIRM WERE LISTED FOR TYPE A DEBARMENTS IN THE JOINT CONSOLIDATED LIST OF DEBARRED, INELIGIBLE AND SUSPENDED BIDDERS ISSUED BY THE MILITARY, HAVING BEEN INCLUDED IN THE LIST BY THE JUNE 1, 1962, SUPPLEMENT THERETO. ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-603 (A) PROHIBITS THE ISSUANCE OF INVITATIONS FOR BIDS TO, OR THE SOLICITATION OF BIDS FROM, ANY CONCERN WHICH IS LISTED AS TYPE A BECAUSE OF WALSH- HEALEY DEBARMENT. THE NAVY REPORTED TO US THAT YOUR FIRM WAS NOT SOLICITED TO BID UNDER THE SUBJECT INVITATION BECAUSE DURING THE BIDDING PERIOD IT WAS INCLUDED IN THE DEBARRED BIDDERS LIST. IN LETTER OF APRIL 29, 1963, YOU QUESTIONED THAT SUCH WAS THE ACTUAL REASON AS YOU POINT OUT THAT YOU WERE NOT INCLUDED IN THE LIST OF RECOMMENDED SOURCES SENT FORWARD TO THE PURCHASING ACTIVITY. IN THAT CONNECTION, THE NAVY HAS ADVISED THAT THE LIST OF RECOMMENDED SOURCES DOES NOT REPRESENT THE FINAL BIDDERS LIST AND IS SUBJECT TO ADDITIONS AND DELETIONS BY THE PURCHASING ACTIVITY BASED ON INFORMATION AVAILABLE, AND THAT IF YOUR FIRM HAD BEEN INCLUDED ON THE RECOMMENDED LIST THE PURCHASING ACTIVITY WOULD HAVE DELETED IT BECAUSE OF ITS INCLUSION IN THE DEBARRED LIST. SO FAR AS THE NAVY IS CONCERNED, THAT IS THE REASON WHY YOUR FIRM WAS NOT SOLICITED TO BID.

YOU HAVE SUGGESTED THAT SINCE YOU AND YOUR FIRM HAVE BEEN REMOVED FROM THE DEBARRED LIST IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE CONTRACT AWARDED UNDER IFB600-321-63 AT $30 A UNIT AND TO REINSTATE THE EARLIER PURCHASE ORDER ISSUED TO YOUR FIRM AT $24 A UNIT, SINCE THERE WOULD BE A SAVINGS OF $6 A UNIT, AND THE UNITS COULD BE FURNISHED SOONER THAN THE 330 DAYS PROVIDED IN THE INVITATION FOR BIDS AND WOULD BE ITEMS OF PROVEN RELIABILITY. HOWEVER, SINCE THE ORIGINAL PURCHASE ORDER WAS ISSUED AND CALLED FOR PERFORMANCE DURING THE PERIOD OF DEBARMENT, AND INASMUCH AS THE DEBARMENT WAS NOT LIFTED RETROACTIVELY, THE REINSTATEMENT OF THE ORIGINAL PURCHASE ORDER WOULD NOT APPEAR TO BE PROPER. IN ADDITION, AS HAS BEEN OBSERVED AT THE OUTSET, THE PURCHASE ORDER WAS ISSUED UNDER THE AUTHORITY PERMITTING ITS ISSUE IN CASES WHEN THE AGGREGATE PURCHASE IS NOT TO EXCEED $2,500, AND THE PURCHASE OF 1,000 LIGHT MARKERS FROM YOUR FIRM AT $24 A UNIT WOULD COST $24,000, AN AMOUNT WHICH EXCEEDS THE STATUTORY LIMITATION.

IN THE CIRCUMSTANCES OF THIS CASE, WE BELIEVE THERE WAS AMPLE JUSTIFICATION FOR OPENING THE ENTIRE PROCUREMENT TO COMPETITION. IT IS UNFORTUNATE THAT AT THE TIME THE NAVY DID SO YOU WERE NOT ELIGIBLE UNDER THE REGULATIONS TO BID UPON THE PROCUREMENT, BUT THE MATTER WAS OPENED TO COMPETITION UNDER AN APPROPRIATE INVITATION AND THE AWARD MUST STAND OR FALL ON THE BASIS OF THE BIDS RECEIVED IN RESPONSE TO THE INVITATION. WHILE YOU MAY BE ABLE TO PERFORM MORE EXPEDITIOUSLY THAN THE INVITATION REQUIRED AND YOU MAY HAVE ESTABLISHED THE RELIABILITY OF YOUR PRODUCT, APPARENTLY THE NAVY DID NOT CONSIDER AT THE TIME IT ISSUED THE INVITATION FOR BIDS THAT THE SAME URGENCY EXISTED FOR THE ITEM AS EXISTED WHEN IT ISSUED THE PURCHASE ORDER TO YOUR FIRM AND IT IS SATISFIED THAT THE SUCCESSFUL BIDDER IS RESPONSIBLE AND CAPABLE OF MANUFACTURING A SATISFACTORY PRODUCT. THE DETERMINATION OF THE GOVERNMENT'S NEEDS AND THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS ARE PRIMARILY FOR THE ADMINISTRATIVE CONCERN OF THE CONTRACTING AGENCIES OF THE GOVERNMENT AND WE DO NOT ORDINARILY UPSET SUCH DETERMINATIONS MADE BY THEM.

WITH REGARD TO YOUR CONTENTION THAT THE ITEM BEING PROCURED BY THE NAVY IS PROPRIETARY TO YOUR FIRM, THE SPECIFICATIONS ARE PERFORMANCE SPECIFICATIONS AND DO NOT REQUIRE THAT YOUR PRODUCT BE DUPLICATED BY THE CONTRACTOR. IN THAT CONNECTION THE NAVY HAS ADVISED THAT THE SPECIFICATIONS IN THE INVITATION FOR BIDS CAN BE MET BY ITEMS OTHER THAN THOSE WHICH MAY BE PROPRIETARY TO YOUR FIRM. IN RESPONSE TO YOUR CONTENTION THAT THE SUCCESSFUL BIDDER WAS SHOWN YOUR PRODUCT BEFORE IT BID ON THE INVITATION AND THAT YOUR PRODUCT IS TO BE DUPLICATED BY THE SUCCESSFUL BIDDER, THE NAVY REPORTS THAT IT WAS AT AT THE BIDDER'S OWN INITIATIVE THAT IT WAS SHOWN THE SAMPLE AND EMPHASIZES THAT THERE IS NO REQUIREMENT THAT YOUR PRODUCT IS TO BE DUPLICATED INASMUCH AS THE ONLY REQUIREMENT IN THE INVITATION IS THAT THE ITEM BE IN ACCORDANCE WITH THE PERFORMANCE SPECIFICATION CITED THEREIN. ALSO, WHILE, AS YOU ALLEGE, YOU WERE REQUESTED TO FURNISH DRAWINGS OF YOUR PREVIOUSLY FURNISHED PRODUCT, THE NAVY HAS POINTED OUT THAT THEY HAVE NO BEARING ON THE IMMEDIATE PROCUREMENT AS NO DRAWINGS ARE INVOLVED UNDER THE INVITATION.

AS TO YOUR INTIMATION THAT THE SUCCESSFUL BIDDER STANDS TO REAP A WINDFALL BY THE USE OF A LENS MOLD DEVELOPED IN CONNECTION WITH THE PERFORMANCE OF A PREVIOUS CONTRACT THE NAVY HAD WITH YOUR FIRM, THE NAVY HAS ADVISED THAT AN INQUIRY INTO THE MATTER HAS FAILED TO REVEAL THAT SUCH A MOLD IS IN THE POSSESSION OF THE GOVERNMENT AND IN THE EVENT THAT ANY GOVERNMENT-OWNED TOOLING NOT CONTEMPLATED TO BE FURNISHED TO THE CONTRACTOR IS MADE AVAILABLE TO IT, A REDUCTION IN CONTRACT PRICE WILL BE REQUIRED.