B-153923, JAN. 13, 1965

B-153923, JAN. 13, 1965

TO THE VALTRONIC CORP.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF OCTOBER 19 AND 28, 1964, IN REGARD TO OUR DECISION OF JULY 14, 1964, IN WHICH WE AGREED WITH YOUR CONTENTION THAT THE BID OF CERTIFIED PRODUCTS, C., UNDER INVITATION FOR BIDS NO. 41-609-64-179, ISSUED BY THE BASE PROCUREMENT OFFICE, BROOKS AIR FORCE BASE, TEXAS, SHOULD NOT HAVE BEEN CONSIDERED FOR AWARD OF CONTRACT NO. AF 41/609/-2423. WE HELD, HOWEVER, THAT IN VIEW OF THE SUBSTANTIAL PERFORMANCE BY THE CONTRACTOR, IT WOULD NOT BE FEASIBLE TO CANCEL THE CONTRACT AND MAKE AN AWARD TO YOU. BY LETTER DATED OCTOBER 20, 1964, TO YOU, WE AFFIRMED OUR DECISION OF JULY 14, 1964.

YOU ALLEGE THAT OUR STATEMENT AS TO SUBSTANTIAL PERFORMANCE OF THE CONTRACT BY CERTIFIED PRODUCTS, INC., IS BASED ON ERRONEOUS INFORMATION FURNISHED BY THE BROOKS AIR FORCE BASE; THAT PERFORMANCE UNDER THE CONTRACT IS STILL NOT COMPLETE; AND THAT IT IS COMMON KNOWLEDGE THAT DEFICIENCIES DID DEFINITELY EXIST IN THE WORKMANSHIP OF MANY OF THE DENTAL CABINETS FORWARDED TO THE LACKLAND AIR FORCE BASE BY CERTIFIED PRODUCTS, INC.

IN REGARD TO THE ABOVE ALLEGATIONS, HEADQUARTERS, BROOKS AIR FORCE BASE, TEXAS, STATES IN ITS REPORT OF NOVEMBER 13, 1964, AS FOLLOWS:

"CONTRACT AF 41/609/-2423 REQUIRES CERTIFIED PRODUCTS TO DELIVER TO THE GOVERNMENT A TOTAL OF FOUR HUNDRED SEVENTY-SEVEN (477) CABINETS. AS OF THIS DATE, THREE HUNDRED NINETY-THREE (393) HAVE BEEN RECEIVED, AND EIGHTY -FOUR (84) REMAIN TO BE SHIPPED. ELEVEN (11) WILL BE SHIPPED ON 16 NOVEMBER 1964. THIS INFORMATION WAS RECEIVED BY TELEPHONE THIS DATE FROM MR. SKOLNIK, CERTIFIED PRODUCTS, INC., AND VERIFIED BY MR. SHAW, COGNIZANT AIR FORCE INSPECTOR.

"MR. SKOLNIK FURTHER STATED THAT THIRTY-SIX (36) SHEETS OF FORMICA REMAIN TO BE DELIVERED BY THE FORMICA CORP. THIS MATERIAL WILL BE SHIPPED ON 13 NOVEMBER AND 16 NOVEMBER AND SHOULD ALL BE RECEIVED BY CERTIFIED PRODUCTS NO LATER THAN 20 NOVEMBER 1964. THIS HAS BEEN VERIFIED BY FABRICATOR SUPPLY CO., NEWARK, NEW JERSEY, SUPPLIER OF FORMICA TO CERTIFIED PRODUCTS. MR. SKOLNIK ALSO STATED THAT THIS WILL ENABLE CERTIFIED PRODUCTS TO SHIP THE REMAINING CABINETS BY 27 NOVEMBER 1964 AND MAKE FINAL DELIVERY AT LACKLAND AFB BY 7 DECEMBER 1964.

"ALL RECEIVING REPORTS SUBMITTED BY MR. SHAW, AIR FORCE INSPECTOR AT THE SOURCE, SHOW ALL CABINETS SHIPPED MEET THE SPECIFICATIONS OF THE CONTRACT. IN TELEPHONE CONVERSATION WITH MR. SHAW, THIS DATE, HE REITERATED THAT BEFORE SHIPMENT EVERY CABINET WAS INSPECTED AND NONE RELEASED THAT DID NOT CONFORM TO THE TERMS OF THE CONTRACT.

"INSPECTION UPON RECEIPT AT LACKLAND AFB HAVE INDICATED SOME MINOR DISCREPANCIES WHICH COULD BE ATTRIBUTED TO SHIPMENT; TO BE SPECIFIC, EXAMPLES ARE KICK-PLATES LOOSE OR OFF, LATCHES BENT, OCCASIONAL SCREWS MISSING, AND LOOSE HANDLES. IN THE OPINION OF THIS HEADQUARTERS, THESE DISCREPANCIES CANNOT BE CONSTRUED AS NON-CONFORMANCE WITH CONTRACT SPECIFICATION, BUT RATHER ARE CONSIDERED TO BE MINOR DISCREPANCIES. ORDER NOT TO DELAY INSTALLATION, A CERTIFIED PRODUCTS REPRESENTATIVE MADE A PERSONAL VISIT AND CORRECTED THESE DISCREPANCIES.

"AS TO THE ALLEGATION OF VALTRONICS THAT GAO HAS BEEN FURNISHED ERRONEOUS INFORMATION, AT NO TIME HAS THIS HEADQUARTERS ATTEMPTED TO HIDE ANY FACTS. THE INFORMATION PREVIOUSLY FURNISHED YOUR HEADQUARTERS IS THAT WHICH WAS RECEIVED FROM THE CONTRACTOR AS TO FUTURE SHIPMENTS AND MATERIAL ON-HAND TO COMPLETE THE CONTRACT. IT IS NOW REALIZED THAT SOME MISINFORMATION HAS BEEN RECEIVED FROM THE CONTRACTOR AND TRANSMITTED TO YOU BUT, WITHOUT BEING AT THE SOURCE, VERIFICATION COULD NOT BE MADE, AND BELIEVING IN THE INTEGRITY AND ABILITY OF CERTIFIED PRODUCTS, IT WAS NOT FELT NECESSARY. THE CORRESPONDENCE AND DOCUMENTATION OF OTHER AIR FORCE AGENCIES BEFORE CONTRACT PLACEMENT GAVE NO CAUSE TO QUESTION THE INTEGRITY OF THE CONTRACTOR.

"AT THIS POINT, DEFAULT AND REPROCUREMENT ACTION HAVE BEEN CONSIDERED, BUT UPON COMPLETE INVESTIGATION, IT IS FELT THIS WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT FOR THE FOLLOWING REASONS:

"A. FOR ANOTHER CONTRACTOR TO FURNISH SUITABLE LIKE ITEMS AS TO SIZE AND COLOR WOULD BE MORE EXPENSIVE AND TIME-CONSUMING THAN CONTINUING ON WITH THE PRESENT CONTRACT.

"B. SINCE FINAL SHIPMENT OF THE FORMICA HAS BEEN PROMISED BY THE SUPPLIER, IT IS FELT THAT CERTIFIED PRODUCTS CAN FINISH IN THE TIME THEY SPECIFIED.

"C. TO INITIATE DEFAULT ACTION AND REPROCURE WOULD RESULT IN AN ADDED EXPENSE TO THE GOVERNMENT IN DELAYING THE BUILDING CONTRACTOR FURTHER.

"IN CONCLUSION IT IS THE OPINION OF THIS HEADQUARTERS THAT THE BEST INTEREST OF THE GOVERNMENT WILL BE SERVED BY CONTINUED CONSCIENTIOUS EFFORT TO SATISFACTORILY CONCLUDE THIS CONTRACT WITH THE PRESENT CONTRACTOR.'

IT IS REPORTED THAT ON DECEMBER 1, 1964, CERTIFIED PRODUCTS, INC., SHIPPED THE BALANCE OF THE DENTAL CABINETS UNDER THE CONTRACT AND THAT THE LACKLAND AIR FORCE BASE, TEXAS, WAS DUE TO RECEIVE THE SHIPMENT BY DECEMBER 7, 1964.

THE DEPARTMENT OF THE AIR FORCE ADMITS THAT DELIVERIES UNDER THIS PROCUREMENT HAVE BEEN EXTENSIVELY DELAYED AND THAT UPON OCCASION INACCURATE DELIVERY ESTIMATES FROM CERTIFIED PRODUCTS, INC., HAVE BEEN RELIED UPON BY THE AIR FORCE. THE DEPARTMENT STATES, HOWEVER, THAT IN EACH INSTANCE THAT DEFAULT TERMINATION HAS BEEN CONSIDERED, THE FACTS AND PROJECTIONS AS OF THAT POINT OF TIME INDICATED THAT THE BEST INTERESTS OF THE GOVERNMENT IN TERMS OF ACTUAL DELIVERY WOULD BE BEST SERVED BY ALLOWING THE CONTRACT WITH CERTIFIED PRODUCTS, INC., TO CONTINUE. WE ARE ALSO ADVISED THAT THE CONTRACT PRICE FOR THE CABINETS HAS BEEN REDUCED BY $5,600 TO COMPENSATE FOR THE GRANTING OF ONE OF THE CONTRACT EXTENSIONS.

UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT NO FURTHER ACTION BY OUR OFFICE NEED BE TAKEN IN THE MATTER.