B-154599, SEP. 16, 1964

B-154599: Sep 16, 1964

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TO TRANSISTOR COMPONENTS PRODUCTS CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 29. BIDDERS WERE ADVISED IN SECTION 2.1 OF THE PURCHASE DESCRIPTION THAT DRAWINGS COULD BE OBTAINED FROM THE PROCURING ACTIVITY. ITEM NUMBER OF NUMBER UNITS REQUIRED 1 THIRTY-SIX (36) EACH "IN THE EVENT THAT SUCH SAMPLES ARE REQUIRED. YOU WERE REQUESTED TO FURNISH PRE-AWARD SAMPLES. YOUR ATTENTION WAS SPECIFICALLY DIRECTED TO THE LANGUAGE IN THE SAMPLE CLAUSE REGARDING THE GOVERNMENT'S RIGHT OF REJECTION OF BIDS OR OFFERS IN THE EVENT SAMPLES WERE NOT TIMELY SUBMITTED OR DID NOT CONFORM TO THE SPECIFICATION REQUIREMENTS. ON MAY 21 A PARTIAL PRE-AWARD SURVEY WAS CONDUCTED OF YOUR PLANT. WITHOUT INDICATING THEY WERE NOT OF YOUR OWN MANUFACTURE.

B-154599, SEP. 16, 1964

TO TRANSISTOR COMPONENTS PRODUCTS CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 29, 1964, AND YOUR LETTER OF JULY 16, 1964, PROTESTING AWARD TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. DSA-2-64-920, ISSUED APRIL 23, 1964, BY THE DEFENSE MEDICAL SUPPLY CENTER (DMSC), DEFENSE SUPPLY AGENCY, BROOKLYN, NEW YORK.

THE INVITATION, WHICH SOLICITED BIDS TO FURNISH 52,992 MOUTH EXAMINING MIRRORS FOR DELIVERY IN STATED QUANTITIES TO FIVE SPECIFIED DESTINATIONS, RESTRICTED THE PROCUREMENT TO SMALL BUSINESS. BIDDERS WERE ADVISED IN SECTION 2.1 OF THE PURCHASE DESCRIPTION THAT DRAWINGS COULD BE OBTAINED FROM THE PROCURING ACTIVITY. CLAUSE 51.1-2A OF THE IFB READS AS FOLLOWS:

TABLE

"51.1-2A

PRE-AWARD SAMPLES

"THE GOVERNMENT MAY REQUIRE THE BIDDER TO SUBMIT SAMPLES, AS

SPECIFIED BELOW, OF THE SUPPLIES PROPOSED TO BE FURNISHED UNDER THIS

INVITATION PRIOR TO THE MAKING OF ANY AWARDS HEREUNDER.

ITEM NUMBER OF

NUMBER UNITS REQUIRED

1 THIRTY-SIX (36) EACH

"IN THE EVENT THAT SUCH SAMPLES ARE REQUIRED, THEY SHALL BE

FURNISHED AT NO COST TO THE GOVERNMENT WITHIN TWELVE (12) DAYS AFTER

RECEIPT BY THE BIDDER GOVERNMENT'S REQUEST FOR SUCH SAMPLES. THE

GOVERNMENT RESERVES THE RIGHT TO REJECT THE BID OF ANY BIDDER WHO

FAILS TO SUBMIT THE REQUESTED NUMBER OF SAMPLES WITHIN THE TIME

SPECIFIED ABOVE, OR WHOSE SAMPLES DO NOT CONFORM TO THE

SPECIFICATIONS CONTAINED HEREIN. APPROVAL OF THE SAMPLES BY THE

GOVERNMENT SHALL NOT RELIEVE THE BIDDER OF THE OBLIGATION TO DELIVER

SUPPLIES WHICH CONFORM TO THE SPECIFICATIONS CONTAINED HEREIN.'

THE RECORD SHOWS THAT BY LETTER OF MAY 12, 1964, CONFIRMING A TELEPHONE CONVERSATION OF THE SAME DATE WITH YOUR MR. B. MCMAHON, YOU WERE REQUESTED TO FURNISH PRE-AWARD SAMPLES, AND YOUR ATTENTION WAS SPECIFICALLY DIRECTED TO THE LANGUAGE IN THE SAMPLE CLAUSE REGARDING THE GOVERNMENT'S RIGHT OF REJECTION OF BIDS OR OFFERS IN THE EVENT SAMPLES WERE NOT TIMELY SUBMITTED OR DID NOT CONFORM TO THE SPECIFICATION REQUIREMENTS. ON MAY 21 A PARTIAL PRE-AWARD SURVEY WAS CONDUCTED OF YOUR PLANT, AND THE INSPECTOR'S REPORT DATED MAY 27 CONCLUDED THAT YOU COULD DELIVER 36 PRE-AWARD SAMPLES IN 12 DAYS AND THAT YOU HAD ADEQUATE EQUIPMENT, PERSONNEL, KNOW-HOW, AND QUALITY CONTROL TO SATISFACTORILY PERFORM THE CONTRACT. AS INDICATED BY YOUR LETTER OF JULY 16 TO THIS OFFICE, YOU CONSIDERED 12 DAYS INADEQUATE FOR YOU TO MANUFACTURE THE PRE-AWARD SAMPLES, AND YOU THEREFORE PURCHASED 36 SAMPLES FROM Z. F. MANUFACTURING CO., WHICH YOU SUBMITTED ON MAY 22, 1964, WITHOUT INDICATING THEY WERE NOT OF YOUR OWN MANUFACTURE. THESE SAMPLES WERE TESTED BY THE DMSC TECHNICAL DEPARTMENT AND FOUND TO CONTAIN SEVERAL DEVIATIONS FROM THE SPECIFICATION REQUIREMENTS INDICATING LACK OF CAPABILITY ON YOUR PART. ACCORDINGLY, THE CONTRACTING OFFICER REFERRED THE MATTER OF YOUR CAPACITY TO THE SMALL BUSINESS ADMINISTRATION (SBA) ON JUNE 24, 1964, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 1-705.6 (B).

ALTHOUGH SBA ADVISED THE CONTRACTING OFFICER ON JULY 8, 1964, THAT IT HAD CLOSED ITS FILES ON THE MATTER SINCE YOU HAD NOT FILED FOR A CERTIFICATE OF COMPETENCY, NO AWARD HAS BEEN MADE UNDER THE INVITATION IN VIEW OF YOUR PROTEST TO OUR OFFICE.

THE SUBSTANCE OF YOUR PROTEST IS THAT THE REQUIREMENT FOR PRE-AWARD SAMPLES WAS UNREASONABLE. YOU CONTEND THAT 12 DAYS WERE NOT SUFFICIENT TIME TO PRODUCE SAMPLES; THAT DRAWINGS WERE NOT FURNISHED WITH THE IFB; AND THAT PRIOR PRODUCERS WOULD NOT ONLY HAVE SAMPLES AVAILABLE BUT WOULD BE COMPLETELY TOOLED BEFORE BIDDING.

YOU STATE THAT DMSC DECLINED TO GIVE YOU DETAILS REGARDING THE REJECTION OF YOUR SAMPLES AND REFERRED YOU TO SBA; THAT YOU WERE ADVISED IN A TELEPHONE CONVERSATION OF JUNE 28, 1964, WITH A MR. MONROE OF SBA THAT NO CERTIFICATE OF COMPETENCY WOULD BE ISSUED; AND THAT, THEREFORE, YOU DECIDED IT WOULD BE A WASTE OF TIME TO EXECUTE FORMS WHICH SBA FORWARDED TO YOU ON JUNE 30, 1964, FOR RETURN TO SBA BY JULY 7, 1964, FOR CONSIDERATION OF ISSUANCE OF A CERTIFICATE OF COMPETENCY.

YOU FURTHER CONTEND THAT THE MIRROR IS NOT A HIGHLY TECHNICAL OR HIGHLY SPECIALIZED ITEM BUT INSTEAD IS A COMMERCIAL ITEM AND THAT THIS PROCUREMENT RESULTS IN UNFAIR COMPETITION AMONG SMALL BUSINESS FIRMS BECAUSE OF THE ADVANTAGES ENJOYED BY PRIOR PRODUCERS. YOU IMPLY THAT SOMEONE IN THE GOVERNMENT IS ACQUIRING PERSONAL GAINS AND "SEEING TO IT THAT ONLY CERTAIN FIRMS ARE IN A POSITION TO BID ON THE REFERENCED BID.'

WHILE DMBC CONCEDES THAT A MOUTH MIRROR IS, AS YOU CLAIM, A COMMERCIAL ITEM THAT IS NEITHER HIGHLY TECHNICAL NOR SPECIALIZED, IT MAKES THE FOLLOWING STATEMENTS REGARDING THE ITEM:

"2. A MOUTH EXAMINING MIRROR IS A BASIC INSTRUMENT IN THE FIELD OF DENTISTRY, WITHOUT WHICH A DENTIST CANNOT PROPERLY PRACTICE HIS PROFESSION. A MIRROR SERVES TWO FUNCTIONS:

"A. PRIMARILY, IT IS DESIGNED TO REFLECT AN ACCURATE IMAGE OF THE SURFACES WITHIN THE MOUTH IN ORDER TO DIAGNOSE AND PRESCRIBE TREATMENT. THE REFLECTING SURFACE MUST BE FREE OF ANY IMPERFECTIONS IN ORDER TO AVOID DISTORTIONS IN THE REFLECTION OF THE TEETH AND TISSUES. AN IMPERFECT MIRROR CAN CAUSE INACCURATE JUDGMENT OF THE CONDITION OF TEETH AND MOUTH TISSUES, IMPROPER DIAGNOSIS AND TREATMENT AND POSSIBLE LOSS OF TEETH AND DAMAGE TO THE MOUTH TISSUE.

"B. IN ADDITION TO SERVING AS A REFLECTING INSTRUMENT, THE MIRROR ALSO SERVES AS A RETRACTOR IN THE MOUTH. WHILE FUNCTIONING AS A RETRACTOR, THE MIRROR MUST COME IN CONTACT WITH AND PRESS AGAINST THE GUM AND INNER LIP TISSUES DURING AN OPERATIVE PROCEDURE.

"3.ALTHOUGH THIS ITEM IS SOLD COMMERCIALLY AND THE GOVERNMENT'S SPECIFICATIONS HAVE REMAINED CONSTANT IN THEIR REQUIREMENTS, NEVERTHELESS, THIS CENTER HAS ENCOUNTERED DIFFICULTY IN OBTAINING SATISFACTORY ITEM. TYPICAL EXAMPLES OF THE DEFICIENCIES WHICH HAVE BEEN FOUND AND COMMUNICATED BY THE USING ACTIVITIES TO THIS CENTER IN THE PAST ARE AS FOLLOWS:

"A. "RIM OF METAL ENCASING MIRROR IS UNFINISHED; SHARP; HAZARDOUS TO USE IN THE MOUTH; PRESENTS A WELL FOR DEBRIS AND OTHER EXTRANEOUS MATERIAL ENCOUNTERED WHILE OPERATING IN THE MOUTH; MIRRORS ARE EASILY BREAKABLE AND LOSE REFLECTION ABILITY TOO QUICKLY.'

"B. "SHARP EDGES OF THIS MIRROR PRESENT A HAZARD OF CUTTING OR LACERATING ORAL TISSUES IN THE MOVEMENT OF THE MIRROR BY THE OPERATOR DURING DENTAL TREATMENT.'

"C. "MIRRORS ARE HAZARDOUS TO USE DUE TO THE SHARP EDGES OF METAL SURROUNDING THE MIRROR FACE. IT IS QUITE EASY TO CUT OR SCRATCH THE TISSUE OF THE BUCCAL FOLD, LIPS OR TONGUE WHEN MIRROR COMES IN CONTACT WITH THESE TISSUES.'

"D. "WHEN USING THE MIRROR BRIEFLY AS A CHECK RETRACTOR, THE WEAK AND READILY MALLEABLE SHANK HAS A TENDENCY TO BEND.'

"E. "THE REFLECTING SURFACE IS INADEQUATE FOR VISUALIZING THE OPERATING FIELD.'

"F. "MIRRORS ARE LOOSE IN FRAME. HAVE ROUGH, SHARP EDGES AROUND MIRROR. MIRRORS HAVE HALF-MOON CRACKS, APPARENTLY DUE TO MANUFACTURING PROCESS OF CLAMPING MIRROR IN METAL FRAME.'

"G. "THE MIRROR PORTION SOON TURNS DARK AND PRODUCES A DOUBLE IMAGE.'

"4. FROM THE FOREGOING IT IS APPARENT THAT, NOTWITHSTANDING THE FACT THAT A MOUTH MIRROR IS NEITHER HIGHLY TECHNICAL NOR SPECIALIZED, IT IS A VERY CRITICAL ITEM AND REQUIRES EXACTING ABILITY IN ORDER TO PRODUCE AN ITEM SUITABLE FOR THE USE FOR WHICH IT IS INTENDED.'

IT MUST BE RECOGNIZED THAT THE PARTICULAR NEEDS OF THE GOVERNMENT MAY JUSTIFY A PRE-AWARD SAMPLE REQUIREMENT IN AN INVITATION FOR BIDS. IN THE INSTANT CASE IN THE LIGHT OF THE ADMINISTRATIVE STATEMENT SET OUT ABOVE REGARDING THE NEED FOR A MOUTH MIRROR THAT WILL SUITABLY SERVE ITS INTENDED PURPOSE, WE ARE UNABLE TO CONCLUDE THAT THE INVITATION REQUIREMENT FOR PRE-AWARD SAMPLES IN THIS CASE WAS UNWARRANTED.

IN ANY EVENT, YOU WERE ON NOTICE UNDER THE INVITATION TERMS THAT PRE AWARD SAMPLES MIGHT BE REQUIRED, AND IT DOES NOT APPEAR THAT YOU MADE ANY OBJECTION, WHEN YOU WERE ASKED FOR SAMPLES, EITHER TO THE REQUIREMENT OR TO THE TIME PERMITTED TO FURNISH THEM. ON THE CONTRARY, THE REPORT OF THE INSPECTOR WHO VISITED YOUR PLANT ON MAY 21, THREE DAYS BEFORE THE SAMPLES WERE DUE, DOES NOT INDICATE THAT YOU MADE ANY COMPLAINT AS TO THE TIME LIMITATION AT THAT TIME. IT WAS NOT UNTIL YOU WERE ADVISED THAT YOUR SAMPLES HAD FAILED THAT YOU PROTESTED THAT THE SUBMISSION TIME WAS UNREASONABLE, NOR WAS THE GOVERNMENT AWARE UNTIL THAT TIME THAT YOU HAD PURCHASED THE SAMPLES FROM ANOTHER MANUFACTURER, A SUBSTITUTION NOT CONTEMPLATED BY THE SAMPLE REQUIREMENT.

AS TO THE FAILURE OF THE CONTRACTING OFFICER TO GIVE YOU MORE DETAILED INFORMATION AFTER THE MATTER OF YOUR CAPACITY WAS REFERRED TO SBA, WE HAVE HELD THAT IT WOULD BE IMPROPER TO USE A SAMPLE REQUIREMENT IN AN INVITATION FOR BIDS FOR THE PURPOSE OF DISQUALIFYING SMALL BUSINESS BIDDERS ON THE GROUND OF LACK OF CAPABILITY, WITHOUT FIRST REFERRING THE MATTER TO SBA FOR POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY. ACCORDINGLY, THE REFERRAL OF THE MATTER OF YOUR CAPACITY TO SBA AFTER IT WAS ADMINISTRATIVELY DETERMINED THAT THE FAILURE OF YOUR PRE-AWARD SAMPLES TO MEET GOVERNMENT REQUIREMENTS INDICATED A LACK OF CAPACITY ON YOUR PART WAS NECESSARY AND PROPER. 43 COMP. GEN. - , (B-152027, DECEMBER 4, 1963). IF FOLLOWS THAT, HAVING REFERRED THE MATTER TO SBA, IT WOULD NOT HAVE BEEN PROPER FOR DMSC TO DISCUSS WITH YOU THE SPECIFIC DEFICIENCIES ON WHICH ITS REFERRAL TO SBA WAS BASED. HOWEVER, THE RECORD INDICATES THAT SBA ADVISED YOU BY TELEPHONE OF THE SPECIFIC DEVIATIONS NOTED BETWEEN YOUR SAMPLES AND THE SPECIFICATION REQUIREMENTS.

CONCERNING YOUR ASSERTION THAT THE SAMPLES REQUIREMENT HAS RESULTED IN UNFAIR COMPETITION AMONG SMALL BUSINESS FIRMS, DMSC REPORTS THAT COMPETITION HAS NOT BEEN RESTRICTED BY SUCH REQUIREMENT AS EVIDENCED BY THE FACT THAT FROM 1960 TO 1963 FOURTEEN AWARDS FOR THE ITEM HAVE BEEN MADE TO FOUR CONTRACTORS. IN ADDITION, IT IS REPORTED THAT THE PRICE OF THE ITEM HAS DECLINED FROM $ .31 TO $ .2125 PER UNIT AND THAT IN THIS PROCUREMENT THE SECOND LOW BIDDER HAS OFFERED A UNIT PRICE OF $ .21 LESS 1 PERCENT DISCOUNT.

REGARDING YOUR REASON FOR NOT EXECUTING THE NECESSARY FORMS FOR CONSIDERATION BY SBA OF ISSUANCE OF A CERTIFICATE OF COMPETENCY, SBA DENIES YOUR ALLEGATION THAT MR. MONROE INFORMED YOU THAT A CERTIFICATE OF COMPETENCY WOULD NOT BE ISSUED. IN THE ABSENCE OF EVIDENCE TO THE CONTRARY, WE MUST ACCEPT THE ADMINISTRATIVE STATEMENT OF THE FACTS. MOREOVER, IT IS REPORTED THAT HAD YOU SO REQUESTED, AN EXTENSION OF THE TIME FOR EXECUTING THE FORMS SENT TO YOU BY SBA WOULD HAVE BEEN GRANTED. ACCORDINGLY, WHILE IT IS UNFORTUNATE THAT YOUR FAILURE TO FILE FOR ISSUANCE OF A CERTIFICATE OF COMPETENCY MAY HAVE RESULTED FROM A MISUNDERSTANDING, THE FACT REMAINS THAT NO SUCH CERTIFICATE HAS BEEN ISSUED. WE MUST THEREFORE ACCEPT THE ADMINISTRATIVE DETERMINATION REGARDING YOUR RESPONSIBILITY IN THE ABSENCE OF EVIDENCE THAT SUCH DETERMINATION WAS ARBITRARY OR CAPRICIOUS. THE RECORD BEFORE US DOES NOT SHOW THAT THE DETERMINATION WAS MADE IN OTHER THAN GOOD FAITH, OR THAT IT WAS ARBITRARY OR NOT BASED ON SUBSTANTIAL GROUNDS.

CONCERNING YOUR CHARGES OF PERSONAL GAIN BY GOVERNMENT PERSONNEL AND IRREGULARITIES IN THE CONDUCT OF THE PROCUREMENT, BOTH DMSC AND SBA UNEQUIVOCALLY DENY SUCH CHARGES, AND THERE IS NOTHING OF RECORD TO SUPPORT YOUR STATEMENTS. WE ARE THEREFORE UNABLE TO CONCLUDE THAT THERE WAS BAD FAITH OR MISCONDUCT ON THE PART OF THE GOVERNMENT EMPLOYEES CONCERNED WITH THE PROCUREMENT.