B-153565, MAY 11, 1964

B-153565: May 11, 1964

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INC.: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18. TWENTY-SEVEN POTENTIAL SOURCES WERE SOLICITED. YOUR FIRM WAS NOT SOLICITED SINCE YOU HAD NOT SUBMITTED AN APPLICATION FOR PLACEMENT ON A SOURCE LIST FOR THIS TYPE OF EQUIPMENT NOR WAS IT OTHERWISE KNOWN THAT YOU WERE A POTENTIAL SOURCE. THE REQUIREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. A COPY OF THE INVITATION WAS FURNISHED TO ONE ADDITIONAL FIRM UPON ITS REQUEST THEREFOR. ONLY TWO BIDS WERE RECEIVED. BOTH BIDS WERE REJECTED AS NONRESPONSIVE ON JULY 3. CC-316-3 WERE REVIEWED BY THE REQUIRING OFFICE FOR THE PURPOSE OF PRODUCING REVISED SPECIFICATIONS WHICH WOULD MEET THE GOVERNMENT'S MINIMUM NEEDS AND YET PROVIDE COMPETITION ON THE REQUIREMENT.

B-153565, MAY 11, 1964

TO EARLDEL, INC.:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18, 1964, PROTESTING THE AWARD OF A CONTRACT TO THE PICHER X-RAY CORPORATION UNDER INVITATION FOR BIDS NO. CC-54-4 ISSUED BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA).

ON JUNE 6, 1963, THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, LAUNCH OPERATIONS CENTER, COCOA BEACH, FLORIDA, ISSUED INVITATION FOR BIDS NO. CC-316-3, SOLICITING BIDS FOR FURNISHING ONE X-RAY GENERATOR AND IMAGE INTENSIFIER SYSTEM. TWENTY-SEVEN POTENTIAL SOURCES WERE SOLICITED. YOUR FIRM WAS NOT SOLICITED SINCE YOU HAD NOT SUBMITTED AN APPLICATION FOR PLACEMENT ON A SOURCE LIST FOR THIS TYPE OF EQUIPMENT NOR WAS IT OTHERWISE KNOWN THAT YOU WERE A POTENTIAL SOURCE. THE REQUIREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY, PUBLISHED BY THE UNITED STATES DEPARTMENT OF COMMERCE, AND A COPY OF THE INVITATION WAS FURNISHED TO ONE ADDITIONAL FIRM UPON ITS REQUEST THEREFOR. UPON THE OPENING OF BIDS ON JUNE 21, 1963, ONLY TWO BIDS WERE RECEIVED. BOTH BIDS WERE REJECTED AS NONRESPONSIVE ON JULY 3, 1963, BASED ON A TECHNICAL EVALUATION.

THEREAFTER THE SPECIFICATIONS USED IN INVITATION NO. CC-316-3 WERE REVIEWED BY THE REQUIRING OFFICE FOR THE PURPOSE OF PRODUCING REVISED SPECIFICATIONS WHICH WOULD MEET THE GOVERNMENT'S MINIMUM NEEDS AND YET PROVIDE COMPETITION ON THE REQUIREMENT. A REVISION OF THE SPECIFICATIONS WAS ACCOMPLISHED WHICH WAS DEEMED TO MEET THE PURPOSE OF THE REVIEW AND ON AUGUST 20, 1963, THERE WAS ISSUED A NEW INVITATION FOR BIDS (NO. CC-54-4), WITH BID OPENING DATE OF SEPTEMBER 16, 1963, AND WITH THE NEWLY REVISED SPECIFICATIONS. THE INVITATION WAS DISTRIBUTED TO 32 POTENTIAL SOURCES, AND ALSO PUBLICIZED BY SYNOPSIS IN THE COMMERCE BUSINESS DAILY. INVITATIONS WERE ISSUED THEREAFTER TO SEVEN ADDITIONAL SOURCES, INCLUDING YOUR FIRM. THE BID OPENING DATE WAS EXTENDED TO SEPTEMBER 23, 1963. SEPTEMBER 13, 1963, YOUR FIRM ALLEGED THAT THE SPECIFICATIONS WERE RESTRICTIVE. THE SPECIFICATIONS WERE THEREAFTER REVIEWED AND DETERMINED TO BE NONRESTRICTIVE. THE BIDS WERE OPENED ON SEPTEMBER 23, 1963, AND ONLY FOUR BIDS WERE RECEIVED. THIS LIST INCLUDED THE PICKER X-RAY CORPORATION LOW BID OF $97,990. THESE BIDS WERE SENT TO THE REQUIRING OFFICE FOR TECHNICAL EVALUATION AND AS A RESULT, ONLY ONE BID, THAT OF PICKER X-RAY, WAS FOUND TO BE RESPONSIVE TO THE TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS. HOWEVER, THE REQUIRING OFFICE NOTED THAT THE PICKER BID EXCEEDED THE AMOUNT OF THE FUNDS ALLOCATED FOR THIS PROCUREMENT AND SUGGESTED NEGOTIATIONS WITH PICKER TO DELETE CERTAIN OF THE ACCESSORIAL EQUIPMENT WITH THE VIEW OF REDUCING THE PRICE TO AN AMOUNT WITHIN THE ALLOCATION OF FUNDS. THE REQUIRING OFFICE ADVISED THAT THE EQUIPMENT WHICH IT PROPOSED TO DELETE FROM THE SPECIFICATIONS WAS NOT IN THE AREA OF NONCONFORMANCE OF THE UNSUCCESSFUL BIDDERS. THE INVITATION (NO. CC-54-4) WAS THEN CANCELED ON THE BASIS THAT THE NEEDS OF THE GOVERNMENT COULD BE SATISFIED BY A LESS EXPENSIVE ARTICLE DIFFERING FROM THAT ON WHICH BIDS WERE INVITED.

THEREAFTER ACTION WAS INITIATED TO PROCURE THE DESIRED EQUIPMENT BY NEGOTIATION. CHAPTER 18, PARAGRAPH 3.210-2 (A) OF THE NASA MANAGEMENT MANUAL (IN EFFECT AT THAT TIME) PROVIDED FOR THE NEGOTIATION, PURSUANT TO 10 U.S.C. 2304 (A) (10), OF CONTRACTS FOR THE PROCUREMENT OF PROPERTY FOR WHICH IT IS IMPOSSIBLE TO OBTAIN COMPETITION. UNDER THE PROVISIONS OF PARAGRAPH 3.210-3 OF THE MANUAL EVERY CONTRACT NEGOTIATED UNDER THE PROVISIONS OF 10 U.S.C. 2304 (A) (10) IS TO BE ACCOMPANIED WITH A DETERMINATION AND FINDING SIGNED BY THE CONTRACTING OFFICER JUSTIFYING ITS USE. SUCH A WRITTEN DETERMINATION AND FINDING WAS MADE BY THE CONTRACTING OFFICER ON OCTOBER 8, 1963, AND THE NEGOTIATIONS WITH PICKER RESULTED IN A CONTRACT (NO. HASIC-1027, DATED OCTOBER 24, 1963) IN THE AMOUNT OF $75,000 TO FURNISH AN X-RAY PRODUCING AND INTENSIFYING SYSTEM WITHOUT INCLUSION OF A VIDICON CAMERA AND CIRCUITRY, DELIVERY TO BE ACCOMPLISHED WITHIN 90 DAYS AFTER THE CONTRACT DATE. SUBSEQUENTLY, IT DEVELOPED THAT CERTAIN DELAYS HAD OCCURRED IN CONSTRUCTION OF THE BUILDING IN WHICH THE X-RAY EQUIPMENT WAS TO BE INSTALLED AND IT BECAME NECESSARY TO INFORM THE CONTRACTOR THAT THE SPECIFIED DELIVERY DATE HAD TO BE EXTENDED TO MARCH 16, 1964. THIS WAS ACCOMPLISHED BY MODIFICATION NO. 1 TO THE CONTRACT. DELIVERY TO CAPE KENNEDY, FLORIDA, WAS ACCOMPLISHED BY THE CONTRACTOR ON MARCH 13, 1964. UNDER THE TERMS OF THE CONTRACT THE GOVERNMENT IS ALLOWED AT LEAST 30 DAYS FOR FINAL INSPECTION AND ACCEPTANCE. THE CONTRACT ALSO PROVIDES THAT THE SUPPLIES WILL NOT BE ACCEPTED PRIOR TO THE SUCCESSFUL COMPLETION OF THE FINAL INSPECTION AND ACCEPTANCE TESTS. FURTHERMORE, THE CONTRACT CONTAINS A WARRANTY CLAUSE TO PROTECT THE GOVERNMENT AGAINST NONCOMPLIANCE WITH THE SPECIFICATIONS.

IN YOUR LETTER OF FEBRUARY 18, 1964, YOU REFER TO A LETTER DATED OCTOBER 30, 1963, YOU ADDRESSED TO THE CONTRACTING OFFICE AND IN WHICH YOU PROTESTED THE AWARD OF THE CONTRACT TO PICKER. THAT OFFICE REPLIED TO YOUR LETTER ON DECEMBER 20, 1963. IN YOUR LETTER OF JANUARY 10, 1964, YOU TOOK ISSUE WITH THE CONTRACTING OFFICE WITH THE ANSWERS GIVEN YOU IN ITS LETTER OF DECEMBER 20. YOU REQUEST AN ANSWER ON THREE QUESTIONS SET OUT ON PAGE 2 OF YOUR LETTER OF FEBRUARY 18.

THE DRAFTING OF PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF THE GOVERNMENT AND THE DETERMINATION FACTUALLY WHETHER THE OFFERS MADE BY THE BIDDERS MEET THOSE SPECIFICATIONS ARE PRIMARILY THE RESPONSIBILITY OF THE CONTRACTING AGENCY. 17 COMP. GEN. 554. WHILE YOU HAVE NOT AGREED WITH THE CONTRACTING AGENCY AS TO THE NECESSITY OF CERTAIN PROVISIONS OF THE SPECIFICATIONS, OUR OFFICE MUST GENERALLY ACCEPT THE DETERMINATION OF THE CONTRACTING AGENCY IN THESE MATTERS. WE FIND NOTHING FROM THE FACTS SET OUT HEREINABOVE WHICH SHOWS THAT THE PROCURING OFFICE FAILED TO FOLLOW THE PROPER PROCEDURES IN NEGOTIATING THE INSTANT CONTRACT.

YOUR SECOND QUESTION SUGGESTS THAT THE CONTRACTING OFFICE SHOULD NOT HAVE AWARDED THE CONTRACT ,OVER OUR PROTEST WITHOUT CLEARING" THE MATTER WITH OUR OFFICE. INSOFAR AS IT APPEARS FROM THE RECORD, NO FORMAL PROTEST AGAINST ANY PROPOSED AWARD WAS MADE BY YOU PRIOR TO YOUR LETTER OF OCTOBER 30, 1963, OR AFTER THE AWARD WAS MADE ON OCTOBER 24, 1963. THE RECORDS SHOW THAT YOU CONTACTED THE CONTRACTING OFFICE IN SEPTEMBER 1963 AND EARLY IN OCTOBER 1963, AND OFFERED SUGGESTIONS FOR CHANGES IN THE SPECIFICATIONS. IN ANY EVENT, HOWEVER, UNDER PARAGRAPH 2.407-9 OF THE NASA MANAGEMENT MANUAL THERE IS NO ABSOLUTE REQUIREMENT THAT ALL PROTESTS MUST BE REFERRED BY THE CONTRACTING OFFICE TO NASA HEADQUARTERS FOR CONSIDERATION BY OUR OFFICE BEFORE MAKING AWARD. IN THIS REGARD SUBPARAGRAPH (A) (2) OF THE CITED REFERENCE PROVIDES THAT "EVERY EFFORT WILL BE MADE TO RESOLVE PROTESTS AT THE FIELD INSTALLATION" AND THAT "IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICER TO DECIDE WHETHER A PROTEST HAS A VALID BASIS AND TO TAKE APPROPRIATE ACTION WHEN POSSIBLE WITHOUT REFERRAL TO NASA HEADQUARTERS.'

YOUR THIRD QUESTION ASKS WHAT COURSE OF ACTION EXISTS "IF THE PRESENT CONTRACTOR FAILS TO DELIVER ON TIME AND TO THE SPECIFICATIONS.' IT IS PRESUMED THAT YOU ARE REFERRING TO THE COURSE OF ACTION THE GOVERNMENT MIGHT TAKE. IN SUCH A CASE THE GOVERNMENT IS THE ONLY PARTY THAT MAY BE ADVERSELY AFFECTED AND WHAT THE GOVERNMENT MIGHT PROPERLY DO IN ALL SUCH CASES CANNOT BE DEFINITELY STATED. HOWEVER, THE CONTRACTOR IN THIS CASE HAS DELIVERED WITHIN THE CONTRACT TIME, AS PROPERLY EXTENDED. THE ONLY MATTER TO BE DECIDED IS WHETHER THE SUPPLIES MEET THE FINAL INSPECTION AND ACCEPTANCE TESTS WHICH HAD NOT BEEN COMPLETED WHEN THE ADMINISTRATIVE REPORT WAS FURNISHED OUR OFFICE. IF THE SUPPLIES FAIL TO MEET THESE TESTS IT IS INCUMBENT UPON THE CONTRACTOR TO REMEDY WHATEVER DEFECTS MAY BE DISCLOSED OR BE LIABLE FOR EXCESS COSTS, IF ANY, THAT THE GOVERNMENT MAY INCUR IN REMEDYING SUCH DEFECTS OR IN PURCHASING SUPPLIES MEETING THE SPECIFICATIONS.