B-154641, OCT. 15, 1964

B-154641, OCT. 15, 1964

TO MOTOROLA COMMUNICATIONS AND ELECTRONICS, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF JULY 2 AND 30, 1964, PROTESTING AGAINST THE SMALL BUSINESS SET-ASIDE UNDER INVITATION FOR BIDS NO. 600-949-64, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON, D.C., AND AGAINST THE CONSIDERATION BY THE PURCHASING ACTIVITY OF THE BIDS RECEIVED IN RESPONSE TO THE INVITATION.

THE INVITATION REQUESTED BIDS--- TO BE OPENED JULY 9, 1964--- FOR FURNISHING PORTABLE FM RADIO SETS IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS. THE PROCUREMENT WAS RESTRICTED TO SMALL BUSINESS CONCERNS. OF THE THREE BIDS THAT WERE RECEIVED IN RESPONSE TO THE INVITATION, TWO WERE FROM SMALL BUSINESS CONCERNS, KEL CORPORATION AND REPCO INCORPORATED, AND THE THIRD BID WAS RECEIVED FROM YOUR FIRM, A LARGE BUSINESS CONCERN. IT IS REPORTED THAT THE BID OF THE KEL CORPORATION WAS REJECTED BECAUSE IT WAS NOT RESPONSIVE TO THE INVITATION AND THAT SINCE THE PROCUREMENT WAS RESTRICTED TO SMALL BUSINESS CONCERNS, YOUR BID WAS NOT CONSIDERED FOR AWARD. ALSO IT IS REPORTED THAT IN ITS BID REPCO INCORPORATED INDICATED AN APPARENT EXCEPTION TO A REQUIREMENT OF THE SPECIFICATIONS BY THE STATEMENT "PARAGRAPH 3.5.1.2 OF SHIPS-R-4721 REQUIRES A MINIMUM SEPARATION BETWEEN THE TWO OPERATING FREQUENCIES OF 600 KC. WE FEEL SURE THAT THIS IS IN ERROR IN THAT A MAXIMUM OF 600 KC IS DESIRABLE. OUR TEK 10 4 UNITS WILL HAVE A MAXIMUM OF 600 KC BETWEEN THE TWO OPERATING FREQUENCIES.'

IN REGARD TO THE SMALL BUSINESS SET-ASIDE, YOU STATE THAT SUCH SET ASIDE SHOULD BE WITHDRAWN SINCE IT IS NOT CLEAR THAT THERE IS ANY REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AN AWARD WILL BE MADE AT A REASONABLE PRICE.

SECTION 15 OF THE SMALL BUSINESS ACT OF 1958, APPROVED JULY 18, 1958, 15 U.S.C. 644, PROVIDES, IN PART, AS FOLLOWS:

"TO EFFECTUATE THE PURPOSES OF THIS CHAPTER, SMALL-BUSINESS CONCERNS WITHIN THE MEANING OF THIS CHAPTER SHALL RECEIVE ANY AWARD OF CONTRACT OR ANY PART THEREOF, AND BE AWARDED ANY CONTRACT FOR THE SALE OF GOVERNMENT PROPERTY, AS TO WHICH IT IS DETERMINED BY THE ADMINISTRATION AND THE CONTRACTING PROCUREMENT OR DISPOSAL AGENCY (1) TO BE IN THE INTEREST OF MAINTAINING OR MOBILIZING THE NATION'S FULL PRODUCTIVE CAPACITY, (2) TO BE IN THE INTEREST OF WAR OR NATIONAL DEFENSE PROGRAMS, (3) TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND SERVICES FOR THE GOVERNMENT ARE PLACED WITH SMALL-BUSINESS CONCERNS, * * *.'

PARAGRAPH 1-706.5 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT A TOTAL SET-ASIDE MAY BE MADE FOR SMALL BUSINESS WHERE THERE IS A REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES AND IT FURTHER PROVIDES THAT ALTHOUGH PAST PROCUREMENT HISTORY OF THE ITEM IS IMPORTANT, IT IS NOT THE ONLY CONTROLLING FACTOR WHICH SHOULD BE CONSIDERED IN DETERMINING WHETHER SUCH A REASONABLE EXPECTATION EXISTS. THE CONTRACTING OFFICE REPORTS THAT THE TOTAL SMALL BUSINESS SET-ASIDE OF THE SUBJECT PROCUREMENT WAS THE RESULT OF A JOINT DETERMINATION BY THE CONTRACTING OFFICER AND A SMALL BUSINESS ADMINISTRATION REPRESENTATIVE. THIS DETERMINATION IS REPORTED TO HAVE BEEN BASED UPON A REASONABLE EXPECTATION THAT A SUFFICIENT NUMBER OF BIDS WOULD BE RECEIVED FROM SMALL BUSINESS CONCERNS SO THAT AN AWARD COULD BE MADE AT A FAIR AND REASONABLE PRICE. IN THIS CONNECTION, IT IS REPORTED THAT PRIOR TO THE BID OPENING DATE, 34 REQUESTS WERE RECEIVED FROM SMALL BUSINESS SOURCES FOR BID SETS ON INVITATION FOR BIDS NO. 600-949-64; THAT YOUR FIRM HAS PREVIOUSLY FURNISHED THIS EQUIPMENT AT A UNIT PRICE OF $384.80; AND THAT IN VIEW OF THIS THE BID OF REPCO INCORPORATED OF $376.24 EACH IS CONSIDERED REASONABLE.

THE SET-ASIDE OF THIS PROCUREMENT FOR SMALL BUSINESS APPEARS TO HAVE BEEN MADE WITHIN THE FRAMEWORK OF PERTINENT LAWS AND REGULATIONS ON THE BASIS OF A DETERMINATION AUTHORIZED TO BE MADE BY THE CONTRACTING OFFICER AND THE SMALL BUSINESS ADMINISTRATION. WE, THEREFORE, FIND NO LEGAL BASIS ON WHICH TO QUESTION THE DEPARTMENT'S DETERMINATION TO PROCURE THE EQUIPMENT CALLED FOR IN THE INVITATION UNDER A TOTAL SET ASIDE FOR SMALL BUSINESS CONCERNS. THEREFORE, THAT PART OF YOUR PROTEST PERTAINING TO THE SET- ASIDE MUST BE DENIED.

THE RECORD INDICATES THAT THE BID OF KEL CORPORATION WAS REJECTED BY THE CONTRACTING OFFICER BECAUSE IT WAS NONRESPONSIVE TO THE INVITATION; HENCE, A DISCUSSION WITH REGARD TO YOUR CONTENTION AS TO THE RESPONSIVENESS OF THAT BID DOES NOT APPEAR NECESSARY. THEREFORE, THE ONLY OTHER BID FOR CONSIDERATION IS THAT OF REPCO INCORPORATED.

IN YOUR TELEGRAM OF JULY 30, 1964, YOU STATE THAT REPCO INCORPORATED TOOK AN EXCEPTION TO THE TECHNICAL SPECIFICATIONS WITH RESPECT TO FREQUENCY SEPARATION OR THAT IT POINTED OUT AN ERROR IN THE SPECIFICATIONS WHICH CAN BE INTERPRETED TO CHANGE THE INTENT THEREOF COMPLETELY. YOU ALSO STATE THAT THE DESCRIPTIVE LITERATURE SUBMITTED BY REPCO INCORPORATED SHOULD BE DECLARED INADEQUATE AS IT PARTICULARLY DOES NOT ESTABLISH PERFORMANCE CHARACTERISTICS AS REQUIRED IN SUBPARAGRAPH (A) OF THE SCHEDULE SECTION ENTITLED "REQUIREMENT FOR DESCRIPTIVE LITERATURE" APPEARING ON PAGE 5 OF THE INVITATION. ALSO, YOU STATE THAT THE DESCRIPTIVE LITERATURE SUBMITTED BY REPCO INCORPORATED FAILS TO SHOW THAT THE EQUIPMENT OFFERED BY IT CONFORMS TO THE SPECIFICATIONS AS CLEARLY REQUIRED BY SUBPARAGRAPH (B) OF THE SAME SECTION WHICH READS AS FOLLOWS:

"FAILURE OF DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT OFFERED CONFORMS TO THE SPECIFICATIONS AND OTHER REQUIREMENTS OF THIS INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID. FAILURE TO FURNISH THE DESCRIPTIVE LITERATURE BY THE TIME SPECIFIED IN THE INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID, EXCEPT THAT IF THE MATERIAL IS TRANSMITTED BY MAIL AND IS RECEIVED LATE, IT MAY BE CONSIDERED UNDER THE PROVISION FOR CONSIDERING LATE BIDS, AS SET FORTH ELSEWHERE IN THIS INVITATION FOR BIDS. HOWEVER THE REQUIREMENTS FOR FURNISHING DESCRIPTIVE LITERATURE MAY BE WAIVED AS TO A BIDDER IF (I) THE BIDDER STATES IN HIS BID THAT THE PRODUCT HE IS OFFERING TO FURNISH IS THE SAME AS A PRODUCT HE HAS PREVIOUSLY FURNISHED TO THE BUREAU OF SHIPS UNDER A PRIOR CONTRACT AND THE BIDDER IDENTIFIES THE CONTRACT, AND (II) THE CONTRACTING OFFICER DETERMINES THAT SUCH PRODUCT MEETS THE REQUIREMENTS OF THIS INVITATION FOR BIDS.'

"DESCRIPTION OF LITERATURE

"WITH REFERENCE TO THE CLAUSE ENTITLED REQUIREMENT FOR DESCRIPTIVE LITERATURE, LITERATURE DESCRIBING THE FOLLOWING IS REQUIRED:

(1) SCHEMATIC OF THE PROPOSED CIRCUITRY.

(2) BILL OF MATERIALS--- PARTS LIST.

(3) DRAWINGS SHOWING THE MECHANICAL LAYOUT CONFIGURATION OF THE TRANSCEIVER.

(4) TECHNICAL DISSERTATION DESCRIBING THEORY OF OPERATION AND DESIGN PARAMETERS.'

IT IS ADMINISTRATIVELY REPORTED THAT PARAGRAPH 3.5.1.2 OF THE SPECIFICATIONS, WHICH WAS REFERRED TO BY REPCO IN THE LETTER ACCOMPANYING ITS BID HAS BEEN REVISED AND THAT SUCH REVISION DOES NOT AFFECT THE QUALITY OR PRICE OF THE REQUIRED EQUIPMENT. IN HIS REPORT THE CONTRACTING OFFICER STATES THAT HE IS OF THE OPINION THAT THE DEVIATION IN REPCO'S BID WAS MINOR AND MAY BE WAIVED PURSUANT TO PARAGRAPH 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION IN VIEW OF THE COMMENTS OF TECHNICAL REPRESENTATIVES FROM THE BUREAU OF SHIPS THAT REPCO'S BID DOES MEET THE INTENT OF THE SPECIFICATION SHIPS-R 4721. THE CONTRACTING OFFICER ALSO STATES THAT WHILE IT IS TRUE THAT THE DESCRIPTIVE LITERATURE REQUIREMENTS OF THE INVITATION WERE NOT MET BY REPCO IN ITS ORIGINAL BID, IT HAS BEEN ESTABLISHED BY TECHNICAL REPRESENTATIVES FROM THE BUREAU OF SHIPS THAT THE BLOCK DIAGRAM SUBMITTED BY REPCO WAS ADEQUATE AND THAT A PARTS LIST WAS NOT NECESSARY BECAUSE OF THE NONREPAIRABLE ASSEMBLY DESIGN CONCEPT OF THE REPCO UNIT.

OUR OFFICE HAS HELD THAT THE PREPARATION OF SPECIFICATIONS STATING THE NEEDS OF THE GOVERNMENT AND THE FACTUAL DETERMINATION AS TO WHETHER THE EQUIPMENT OFFERED BY A BIDDER CONFORMS TO THOSE SPECIFICATIONS IS PRIMARILY WITHIN THE JURISDICTION OF THE ADMINISTRATIVE AGENCY CONCERNED. 38 COMP. GEN. 190; 35 ID. 174. IN DECIDING THE CONFORMITY OF THE EQUIPMENT OFFERED, THE CONTRACTING OFFICER MAY WAIVE MINOR VARIANCES NOT AFFECTING PRICE, QUALITY OR QUANTITY. 30 COMP. GEN. 179. THE VARIANCES FROM THE REQUIREMENTS OF THE INVITATION WHICH MAY BE WAIVED, PROVIDING THAT SUCH WAIVER WOULD NOT WORK AN INJUSTICE ON OTHER BIDDERS, ARE THOSE MINOR INFORMALITIES OR DEFECTS OF FORM WHICH DO NOT GO TO THE SUBSTANCE OF THE BID. 37 COMP. GEN. 763, 765. WE HAVE HELD THAT A BID SHOULD NOT BE REJECTED ON A PURELY TECHNICAL OR OVER-LITERAL READING OF AN INVITATION REQUIREMENT, AND THAT, IF THE PURPOSE OF THE REQUIREMENT IS REASONABLY CLEAR AND IS SUBSTANTIALLY MET BY THE BIDDER, MERE DEFICIENCIES OF FORM DO NOT JUSTIFY REJECTION. 39 COMP. GEN. 595.

THE ADMINISTRATIVE OFFICE EXPRESSED THE OPINION THAT ANY EXCEPTIONS IN THE BID OF REPCO INCORPORATED WERE MINOR AND ACCEPTABLE AND COULD NOT BE USED TO JUSTIFY REJECTION OF THE BID. IN THE LIGHT OF OUR HOLDINGS, AS INDICATED IN THE PRECEDING PARAGRAPH, WE FEEL THAT THE PROPOSED AWARD OF A CONTRACT TO REPCO INCORPORATED PURSUANT TO THIS INVITATION IS JUSTIFIED AND, ACCORDINGLY, YOUR PROTEST MUST BE DENIED.