B-154188, JUN. 26, 1964

B-154188: Jun 26, 1964

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TO KELLY MACHINE COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 13. A CLAUSE PERTAINING TO THE USE OF GOVERNMENT-OWNED PROPERTY WAS SET FORTH IN THE INVITATION ON PAGES 24 TO 27. AS FOLLOWS: "USE OF GOVERNMENT-OWNED PROPERTY: (USE AS-IS-WHERE-IS WITHOUT CHARGE) "1. (X) BID IS BASED ON USE OF GOVERNMENT PROPERTY IN BIDDER'S POSSESSION.'. AN EQUATION WAS PRESCRIBED UNDER PARAGRAPH 4 OF THE CLAUSE FOR USE BY THE BIDDER IN COMPUTING THE AMOUNT TO BE ADDED TO HIS UNIT BID PRICE FOR EVALUATION PURPOSES. THE BIDS WERE OPENED AS SCHEDULED ON MARCH 2. WHILE THE LOW RESPONSIVE BID WAS SUBMITTED BY A LARGE BUSINESS CONCERN. YOUR BID WAS LOWEST OF THE BIDS SUBMITTED BY SMALL BUSINESS CONCERNS.

B-154188, JUN. 26, 1964

TO KELLY MACHINE COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 13, 1964, AND TO YOUR SUPPLEMENTAL LETTER OF THAT DATE PROTESTING AS A SMALL BUSINESS CONCERN AGAINST THE AWARD OF A CONTRACT TO ANYONE OTHER THAN YOUR FIRM FOR THE PORTION SET ASIDE FOR SMALL BUSINESS UNDER INVITATION FOR BIDS NO. AMC/1/- 11-173-64-83, ISSUED JANUARY 30, 1964, BY THE UNITED STATES ARMY, AMMUNITION PROCUREMENT AND SUPPLY DEPOT, JOLIET, ILLINOIS.

THE INVITATION, AS AMENDED, SOLICITED BIDS FOR FURNISHING 3,459,000 PROJECTILES WITH AN ADDITIONAL LIKE QUANTITY BEING SET ASIDE FOR AWARD ONLY TO A SMALL BUSINESS CONCERN. A CLAUSE PERTAINING TO THE USE OF GOVERNMENT-OWNED PROPERTY WAS SET FORTH IN THE INVITATION ON PAGES 24 TO 27, INCLUSIVE, AND PARAGRAPH 1 THEREOF PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"USE OF GOVERNMENT-OWNED PROPERTY: (USE AS-IS-WHERE-IS WITHOUT CHARGE)

"1. PROPERTY IN BIDDER'S POSSESSION

IF, IN PERFORMING THE WORK BID UPON, THE BIDDER PLANS TO USE ANY ITEMS OF GOVERNMENT PROPERTY (INCLUDING ANY ITEMS OF SPECIAL TOOLING) IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT WITH THE GOVERNMENT INDEPENDENT OF THE IFB, THE BIDDER SHALL SO INDICATE BY CHECKING THE BOX BELOW AND BY IDENTIFYING SUCH FACILITIES CONTRACT AND/OR OTHER AGREEMENT AUTHORIZING SUCH USE. IN ORDER TO BE RESPONSIVE, THE BIDDER MUST AT THE TIME OF BID OPENING, BE IN FACT AUTHORIZED TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON. EVIDENCE OF SUCH AUTHORIZATION SHALL BE SUBMITTED UPON REQUEST FROM THE CONTRACTING OFFICER.

(X) BID IS BASED ON USE OF GOVERNMENT PROPERTY IN BIDDER'S POSSESSION.'

TO EQUALIZE THE COMPETITIVE ADVANTAGE ARISING FROM THE USE OF SUCH GOVERNMENT PROPERTY, INCLUDING SPECIAL TOOLING, AN EQUATION WAS PRESCRIBED UNDER PARAGRAPH 4 OF THE CLAUSE FOR USE BY THE BIDDER IN COMPUTING THE AMOUNT TO BE ADDED TO HIS UNIT BID PRICE FOR EVALUATION PURPOSES.

THE BIDS WERE OPENED AS SCHEDULED ON MARCH 2, 1964, AND WHILE THE LOW RESPONSIVE BID WAS SUBMITTED BY A LARGE BUSINESS CONCERN, WHICH RECEIVED AWARD OF THE NON-SET-ASIDE PORTION, YOUR BID WAS LOWEST OF THE BIDS SUBMITTED BY SMALL BUSINESS CONCERNS. IN MAKING YOUR BID YOU INDICATED, BY CHECKING THE APPROPRIATE BOX IN THE USE OF GOVERNMENT OWNED PROPERTY CLAUSE AND BY COMPUTING THE BID EVALUATION FACTOR FOR SUCH USE IN ACCORDANCE WITH THE PROVISIONS OF THAT CLAUSE, THAT THE BID WAS BASED ON USE OF CERTAIN LISTED GOVERNMENT PROPERTY IN YOUR POSSESSION.

DURING THE EVALUATION OF BIDS IT WAS ASCERTAINED THAT THE KELLY MACHINE COMPANY HAD NOT REQUESTED OR RECEIVED AT TIME OF BID OPENING AUTHORIZATION TO USE THE GOVERNMENT PROPERTY UPON WHICH ITS BID WAS PREDICATED, AS REQUIRED BY THE TERMS OF THE ABOVE-QUOTED PROVISION OF THE INVITATION. UPON VERIFICATION OF SUCH FACT BY THE CLEVELAND PROCUREMENT DISTRICT, WHICH WAS RESPONSIBLE FOR THE GOVERNMENT FACILITIES LISTED IN YOUR BID, THE CONTRACTING OFFICER FOUND THAT THE KELLY MACHINE COMPANY BID WAS NON- RESPONSIVE TO THE INVITATION AND AWARD OF A CONTRACT FOR THE SET-ASIDE PORTION WAS MADE ON APRIL 22, 1964, TO ZELLER CORPORATION AS THE LOW RESPONSIVE AND RESPONSIBLE SMALL BUSINESS BIDDER UNDER THE INVITATION.

YOU STATE THAT YOU BASE YOUR PROTEST ON THE FACT THAT YOUR BID WAS RESPONSIVE BECAUSE YOU "DID" HAVE AUTHORIZATION TO USE THE GOVERNMENT OWNED FACILITIES. AS SUPPORT THEREOF, YOU FURTHER STATE THAT IN COMPILING THE INFORMATION SUBMITTED ON YOUR BID MR. HOWARD LENTZ AT THE CLEVELAND ORDNANCE DISTRICT WAS CONTACTED REGARDING USE OF THE GOVERNMENT FACILITIES IN YOUR FIRM'S POSSESSION, AND THAT HE STATED YOU COULD USE THEM AS YOU HAVE A FACILITIES CONTRACT, NO. DA-33-019-ORD 204/3/1 DATED JUNE 16, 1956. IN THIS CONNECTION IT IS NOTED THAT THE SUBJECT FACILITIES CONTRACT EXPRESSLY PROVIDES IN TITLE IV, ARTICLE IV A, USE OF FACILITIES, THAT SUBJECT TO THE WRITTEN APPROVAL OF THE CONTRACTING OFFICER AND UPON SUCH TERMS AS HE MAY PRESCRIBE, THE SPECIFIED FACILITIES MAY BE USED IN CONNECTION WITH WORK FOR WHICH THE GOVERNMENT AND THE CONTRACTOR MAY THEREAFTER CONTRACT.

THE RECORD SHOWS THAT ON APRIL 29, 1964, YOU PROTESTED FOR THE SAME REASONS TO THE UNITED STATES ARMY PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS, AND ON MAY 5 THE FOLLOWING COMMUNICATION WAS ADDRESSED BY THAT AGENCY TO THE CLEVELAND PROCUREMENT DISTRICT:

"1. INCLOSED HEREWITH IS A COPY OF A LETTER DATED 29 APRIL 1964, ADDRESSED TO THIS AGENCY, AND CONSTITUTING A FORMAL PROTEST TO THE AWARD OF A CONTRACT FOR THE SET-ASIDE PORTION OF SUBJECT INVITATION TO THE ZELLER CORPORATION, DEFIANCE, OHIO, RATHER THAN TO SUBJECT CONTRACTOR.

"2. REFERENCE IS MADE TO TELEPHONE CONVERSATION OF 4 MAY 1964, RELATIVE TO THIS PROTEST, BETWEEN MESSRS LENTZ AND REEVES OF YOUR DISTRICT AND MESSRS BUKER AND KRAMER OF THIS AGENCY, IN WHICH YOUR PERSONNEL REPRESENTED THAT NO AUTHORITY, ORAL OR IN WRITING, FOR THE USE OF GOVERNMENT-OWNED FACILITIES HAD BEEN REQUESTED BY OR ISSUED TO THE CONTRACTOR, AND NOTHING HAD BEEN SAID TO MISLEAD HIM INTO THE POSITIVE ASSERTION CONTAINED IN THE THIRD PARAGRAPH OF HIS PROTEST LETTER (I.E.'HE STATED WE COULD USE THEM . . .''.

"3. IN CONFIRMATION OF REFERENCED TELEPHONE CONVERSATION AND TO ASSIST THIS AGENCY IN RESOLUTION OF THIS PROTEST, IT IS REQUESTED THAT A LETTER SETTING FORTH YOUR ANSWER TO THE CONTRACTOR'S ASSERTION BE PREPARED AND FORWARDED TO THIS AGENCY, ATTN: SMUAP-APIB, AS SOON AS POSSIBLE. ANSWER ON OR BEFORE 15 MAY 1964 WILL BE APPRECIATED.

"4. SPECIFIC QUESTIONS TO BE ANSWERED, PERTAINING TO THE CONTRACTOR'S AUTHORITY TO USE ANY GOVERNMENT-OWNED FACILITIES IN THE PERFORMANCE OF ANY CONTRACT AWARDED UNDER SUBJECT IEB, ARE AS FOLLOWS:

"A. WAS SUCH AUTHORITY REQUESTED EITHER ORALLY OR IN WRITING PRIOR TO BID OPENING, 2 MARCH 1964?

"B. WAS SUCH AUTHORITY ISSUED EITHER ORALLY OR IN WRITING PRIOR TO BID OPENING, 2 MARCH 1964?

"C. DID ANY CONVERSATION TAKE PLACE BETWEEN THE CONTRACTOR AND ANY PERSONNEL OF YOUR DISTRICT, PRIOR TO 2 MARCH 1964, WHICH MIGHT BE CONSTRUED AS HAVING PERTAINED TO SUCH AUTHORITY EITHER DIRECTLY OR INDIRECTLY?

"D. IF SUCH A CONVERSATION TOOK PLACE WAS ANYTHING SAID WHICH MIGHT HAVE MISLED THE CONTRACTOR, ACTING IN GOOD FAITH, TO BELIEVE THAT AUTHORITY DID IN FACT EXIST, AND IF SO WHAT WAS THE EXTENT OF THE CONVERSATION?

"E. WHAT OTHER INFORMATION OR OPINIONS CAN YOUR DISTRICT OFFER RELATIVE TO THIS SITUATION WHICH MIGHT ASSIST IN THE RESOLUTION OF THIS PROTEST?

BY COMMUNICATION DATED MAY 14, 1964, THE PRESENTED QUESTIONS WERE ANSWERED BY THE CLEVELAND PROCUREMENT DISTRICT AS FOLLOWS:

"1. ANSWERS TO SPECIFIC QUESTIONS IN PARAGRAPH 4 OF YOUR LETTER OF 5 MAY 1964 ARE AS FOLLOWS:

"A. AUTHORITY TO USE GOVERNMENT FACILITIES ON THIS IFB WAS NOT REQUESTED BY KELLY ORALLY OR IN WRITING.

"B. ABOVE AUTHORITY WAS NOT ISSUED EITHER ORALLY OR IN WRITING.

"C. NO CONVERSATION TOOK PLACE BETWEEN CONTRACTOR AND PERSONNEL OF THIS DISTRICT PRIOR TO 2 MARCH 1964 WHICH MIGHT BE CONSTRUED AS PERTAINING TO SUCH AUTHORITY.

"D. ANSWERED IN C ABOVE.

"E. ON 16 MARCH 1964 KELLY REQUESTED AUTHORITY TO USE THE GOVERNMENT EQUIPMENT FOR IFB AMC/A/-11-173-64-89. CONTRACTING OFFICER'S LETTER WAS EXECUTED 17 MARCH 1964 SO AUTHORIZING. KELLY WAS ADVISED HE COULD PICK THIS LETTER UP, BUT HE NEVER DID SO.'

UPON DISPUTED QUESTIONS OF FACT BETWEEN THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT AND A CLAIMANT OR OTHER PERSON DEALING WITH THE GOVERNMENT, IT IS THE LONG-ESTABLISHED RULE OF THE ACCOUNTING OFFICERS TO ACCEPT THE FACTS AS SHOWN BY THE ADMINISTRATIVE RECORDS, IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. COMP. GEN. 51; 16 ID. 325. SINCE THE OFFICE IN CHARGE OF THE ADMINISTRATION OF THE FACILITIES CONTRACT ON WHICH YOU RELY HAS CONSISTENTLY MAINTAINED, CONTRARY TO YOUR CONTENTIONS, THAT NO AUTHORIZATION WAS ISSUED TO YOUR FIRM PRIOR TO BID OPENING PERMITTING USE OF GOVERNMENT FACILITIES ON THE INVITATION HERE CONCERNED, AND AS YOU HAVE SUBMITTED NO EVIDENCE TENDING TO SHOW THAT SUCH AUTHORITY WAS GRANTED, THE PRESENT RECORD AFFORDS US NO BASIS FOR NOT ACCEPTING THE ADMINISTRATIVE STATEMENTS IN THE MATTER.

UNDER THE PROVISIONS OF 10 U.S.C. 2305, WHICH IS A BASIC AUTHORITY FOR AGENTS OF THE GOVERNMENT TO ENTER INTO CONTRACTS, BIDS ARE REQUIRED TO CONFORM TO THE TERMS AND ESSENTIAL REQUIREMENTS OF THE ADVERTISED INVITATION TO BE ELIGIBLE FOR AWARD. WHILE THE INVITATION PROVIDED FOR THE SUBMISSION OF BIDS BASED ON USE OF GOVERNMENT PROPERTY IN THE BIDDERS' POSSESSION UNDER SEPARATE FACILITIES CONTRACTS, IN RECOGNITION OF THE USUAL PROVISIONS OF SUCH CONTRACTS VESTING IN THE CONTRACTING OFFICER THE AUTHORITY TO APPROVE OR DISAPPROVE THEIR USE ON OTHER CONTRACTS AND TO PRESCRIBE THE TERMS OF SUCH USE, THE INVITATION PROPERLY REQUIRED THE APPROVALS TO HAVE BEEN IN FACT GRANTED AT TIME OF BID OPENING IN ORDER FOR SUCH BIDS TO BE CONSIDERED RESPONSIVE. THE GOVERNMENT FACILITIES WHICH YOU PLANNED TO USE AS LISTED IN YOUR BID WERE A MATERIAL FACTOR IN DETERMINING YOUR BID PRICE FOR EVALUATION PURPOSES, HENCE, THE NECESSARY PRIOR AUTHORIZATION FOR USE OF THE FACILITIES, WHICH WAS A MATTER OF ADMINISTRATIVE DISCRETION WITH THE FACILITIES CONTRACTING OFFICER, CONSTITUTED AN ESSENTIAL REQUIREMENT OF THE INVITATION NECESSARY FOR THE EVALUATION OF A BID THEREON, AND MAY NOT REASONABLY BE VIEWED AS A MERE INFORMALITY WHICH MAY BE WAIVED.

ACCORDINGLY, SINCE THE PRESENT RECORD DOES NOT ESTABLISH THAT YOU HAD BEEN AUTHORIZED AT TIME OF BID OPENING TO USE THE GOVERNMENT FACILITIES LISTED IN YOUR BID IN PERFORMING THE WORK BID UPON, WE MUST CONCUR WITH THE ACTION TAKEN BY THE DEPARTMENT OF THE ARMY IN REJECTING YOUR BID AS BEING NONRESPONSIVE TO THE INVITATION.

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