B-155314, DEC. 2, 1964

B-155314: Dec 2, 1964

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TO FELSENTHAL INSTRUMENTS COMPANY: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 2. PREPRODUCTION SAMPLES OF THE CLIPBOARDS WERE REQUIRED TO PASS CERTAIN TESTS. MUST FURNISH EVIDENCE WITH THE BID/OFFER THAT PRIOR GOVERNMENT APPROVAL IS PRESENTLY APPROPRIATE FOR THE PRODUCTS TO BE FURNISHED HEREUNDER. BID/OFFERS WILL BE EVALUATED ON THE BASIS OF THE DECREASED UNIT PRICE SO OFFERED.'. THREE BIDS WERE RECEIVED AND OPENED ON AUGUST 21. YOUR BID WAS SECOND LOW ON THE BASIS OF A UNIT PRICE OF $6.20 BUT LOW ON THE BASIS OF A REDUCED UNIT PRICE OF $5.40 CONDITIONED ON WAIVER OF THE PREPRODUCTION SAMPLE REQUIREMENT ON THE BASIS OF A PRIOR DSA APPROVAL WHICH YOU INDICATED HAD BEEN GRANTED TO YOU UNDER CONTRACT NO.

B-155314, DEC. 2, 1964

TO FELSENTHAL INSTRUMENTS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 2, 1964, PROTESTING THE AWARD OF A CONTRACT TO THE ELBE FILE AND BINDER COMPANY OF FALL RIVER, MASSACHUSETTS, UNDER INVITATION FOR BIDS NO. DSA 4-65-238, ISSUED ON JULY 31, 1964, BY THE DEFENSE GENERAL SUPPLY CENTER, DEFENSE SUPPLY AGENCY, RICHMOND, VIRGINIA.

THE INVITATION SOLICITED BIDS TO FURNISH 1600 PILOT'S CLIPBOARDS IN ACCORDANCE WITH MILITARY SPECIFICATION NO. MIL-C-23157A/WEP), DATED AUGUST 31, 1962, AS AMENDED. UNDER THE QUALITY ASSURANCE PROVISIONS OF THE MILITARY SPECIFICATIONS, PREPRODUCTION SAMPLES OF THE CLIPBOARDS WERE REQUIRED TO PASS CERTAIN TESTS, INCLUDING HUMIDITY AND SALT SPRAY TESTS.

THE INVITATION, WHICH REQUIRED THE SUBMISSION OF PREPRODUCTION SAMPLES, INCLUDED A WAIVER PROVISION READING, IN PART, AS FOLLOWS:

"THE GOVERNMENT RESERVES THE RIGHT TO WAIVE THE REQUIREMENT HEREIN FOR PREPRODUCTION SAMPLES OR TESTS AS TO THOSE BIDDERS/OFFERORS OFFERING A PRODUCT WHICH HAS BEEN PREVIOUSLY PROCURED OR TESTED BY THE GOVERNMENT. BIDDERS/OFFERORS OFFERING A PRODUCT WHICH HAS BEEN PREVIOUSLY PROCURED OR TESTED BY THE GOVERNMENT. BIDDERS/OFFERORS OFFERING SUCH PRODUCTS, WHO WISH TO RELY ON SUCH PRODUCTION OR TEST, MUST FURNISH EVIDENCE WITH THE BID/OFFER THAT PRIOR GOVERNMENT APPROVAL IS PRESENTLY APPROPRIATE FOR THE PRODUCTS TO BE FURNISHED HEREUNDER. BIDDERS/OFFERORS SHALL STATE IN THE SPACES PROVIDED BELOW THE DECREASE IN UNIT PRICES AND THEIR EARLIER DELIVERY SCHEDULE IN THE EVENT OF SUCH WAIVER BY THE GOVERNMENT. WHEN THE GOVERNMENT DECIDES TO EXERCISE ITS RIGHT TO WAIVE PREPRODUCTION SAMPLES, BID/OFFERS WILL BE EVALUATED ON THE BASIS OF THE DECREASED UNIT PRICE SO OFFERED.'

THREE BIDS WERE RECEIVED AND OPENED ON AUGUST 21, AS SCHEDULE. YOUR BID WAS SECOND LOW ON THE BASIS OF A UNIT PRICE OF $6.20 BUT LOW ON THE BASIS OF A REDUCED UNIT PRICE OF $5.40 CONDITIONED ON WAIVER OF THE PREPRODUCTION SAMPLE REQUIREMENT ON THE BASIS OF A PRIOR DSA APPROVAL WHICH YOU INDICATED HAD BEEN GRANTED TO YOU UNDER CONTRACT NO. DSA-4- 018493-SF604. TO DETERMINE THE FEASIBILITY OF WAIVER OF THE PREPRODUCTION SAMPLE REQUIREMENT, DSA REVIEWED THE CITED CONTRACT. THE REVIEW DISCLOSED THE FOLLOWING INFORMATION:

"CONTRACT DSA-4-018493-SF604 CALLING FOR DELIVERY OF 7,330 PILOT CLIPBOARDS AND SUBMISSION OF TWO (2) PREPRODUCTION SAMPLES WAS AWARDED TO FELSENTHAL INSTRUMENTS COMPANY ON 3 JANUARY 1964. THE CONTRACTOR SUBMITTED FOUR (4) SAMPLES TO THE WEBCON TESTING LABORATORIES, INC., AN INDEPENDENT LABORATORY, FOR PERFORMANCE OF THE HUMIDITY AND SALT SPRAY TESTS REQUIRED BY PARAGRAPH 3.2.1 OF SPECIFICATION MIL-C 23157A/WEP). TEST REPORT OF 11 MARCH 1964 (ENCL 5), WEBCON TESTING LABORATORIES, INC. REPORTED THAT THREE (3) OF THE SAMPLES FAILED THE HUMIDITY AND SALT SPRAY TESTS. BY LETTER OF 8 APRIL 1964, THE CONTRACTING OFFICER ADVISED FELSENTHAL OF THE FAILURES AND REQUESTED THAT TWO (2) NEW SAMPLES BE SUBMITTED FOR TESTING. BY REPORT OF 13 MAY 1964 (ENCL 6), THE TESTING LABORATORY REPORTED THAT THE NEW SAMPLES FAILED TO PASS THE REQUIRED TESTING. AS A RESULT OF THE TEST FAILURE" TECHNICAL PERSONNEL AT THIS CENTER RECOMMENDED REJECTION OF THE SAMPLES. IN VIEW OF THE CRITICAL SHORTAGE OF CLIPBOARDS IN STOCK AND IN ORDER TO OBTAIN AN EARLY DELIVERY, THE CONTRACTING OFFICER NEGOTIATED A PRICE DECREASE OF ?05 PER UNIT AS CONSIDERATION OF THE GOVERNMENT'S WAIVER OF THE HUMIDITY AND SALT SPRAY TESTS. THE CONTRACT WAS CORRESPONDINGLY MODIFIED BY SUPPLEMENTAL AGREEMENT ON 5 JUNE 1964 (ENCL 7).'

ON SEPTEMBER 2, THE CONTRACTING AGENCY CONFERRED WITH THE BUREAU OF NAVAL WEAPONS, THE AGENCY WHICH PREPARED THE MILITARY SPECIFICATION FOR THE CLIPBOARD, REGARDING WAIVER OF THE HUMIDITY AND SALT SPRAY TESTS. THE BUREAU REPORTED THAT COMPLAINTS AND TESTS IN THE BUREAU LABORATORY HAD RESULTED IN INCREASED REQUIREMENTS FOR THE SALT SPRAY TEST; THAT UNDER A PROPOSED REVISION OF THE MILITARY SPECIFICATION THE SALT SPRAY TEST WILL BE INCREASED FROM 48 TO 160 HOURS; AND THAT THE NAVY COULD NOT AGREE TO WAIVER OF THE CURRENTLY REQUIRED HUMIDITY AND SALT SPRAY TESTS. ACCORDINGLY, AND ON THE RECOMMENDATION OF TECHNICAL PERSONNEL AT BOTH THE CONTRACTING AGENCY AND THE BUREAU LABORATORY, THE CONTRACTING OFFICER DETERMINED THAT WAIVER OF THE PREPRODUCTION SAMPLE REQUIREMENT WAS NOT IN THE BEST INTEREST OF THE GOVERNMENT. THEREFORE, YOUR BID WAS EVALUATED WITHOUT THE REDUCTION OFFERED FOR THE WAIVER, AND ON SEPTEMBER 25, 1964, AWARD WAS MADE TO THE ELBE FILE AND BINDER COMPANY, AT ITS UNIT PRICE OF $5.98, AS THE LOW RESPONSIVE BIDDER.

IT IS NOW YOUR CONTENTION THAT WAIVER OF THE PREPRODUCTION SAMPLE REQUIREMENT SHOULD HAVE BEEN GRANTED BECAUSE PREVIOUS APPROVAL OF YOUR CLIPBOARD HAD BEEN GRANTED ON NAVY CONTRACT N383-80303A AWARDED TO YOU FOR 19,541 UNITS AND SUCH APPROVAL HAD BEEN ACCEPTED AS A BASIS FOR AWARD TO YOU OF ANOTHER CONTRACT FOR APPROXIMATELY 16,000 UNITS, ALL OF WHICH CLIPBOARDS, YOU CONTEND, ARE CURRENTLY IN USE AND ARE SATISFACTORY. ADDITION, YOU STATE THAT THE ITEM OFFERED BY THE SUCCESSFUL BIDDER IS INFERIOR.

FROM THE FACTS STATED, IT IS CLEAR THAT THE PRIOR APPROVAL WHICH YOU CITED IN YOUR BID AS JUSTIFICATION FOR WAIVER OF THE PREPRODUCTION SAMPLE REQUIREMENT WAS NOT GRANTED ON THE BASIS OF YOUR SAMPLES HAVING MET THE REQUIRED TESTS, BUT SOLELY BECAUSE OF AN URGENT NEED FOR THE ITEM WITH DEVIATIONS FROM THE APPLICABLE MILITARY SPECIFICATIONS COMPENSATED FOR BY A DECREASE IN PRICE. ALSO, THE GOVERNMENT TECHNICAL PERSONNEL WHO PREPARED THE MILITARY SPECIFICATIONS AS WELL AS THE TECHNICAL PERSONNEL IN THE CONTRACTING AGENCY ARE OF THE OPINION THAT THE PREVIOUS DEVIATIONS--- OMISSION OF THE HUMIDITY AND SALT SPRAY, TESTS--- SHOULD NOT NOW BE PERMITTED. ACCORDINGLY, SINCE THE CLIPBOARD WHICH WAS APPROVED IN THE PRIOR DSA PROCUREMENT DID NOT FULLY COMPLY WITH THE MILITARY SPECIFICATIONS, WE MUST CONCLUDE THAT THERE WAS A SUBSTANTIAL BASIS FOR THE REFUSAL OF THE DSA CONTRACTING OFFICER TO WAIVE THE PREPRODUCTION SAMPLE REQUIREMENT.

AS TO YOUR ASSERTION THAT PRIOR APPROVAL OF YOUR CLIPBOARD BY THE NAVY WARRANTED THE WAIVER, YOUR ATTENTION IS DIRECTED TO THE LANGUAGE OF THE INVITATION WAIVER PROVISION QUOTED ABOVE, WHICH REQUIRES BIDDERS TO FURNISH EVIDENCE WITH THEIR BIDS THAT PRIOR GOVERNMENT APPROVAL IS PRESENTLY APPROPRIATE FOR THE PRODUCTS TO BE FURNISHED UNDER THE INVITATION. THE ONLY APPROVAL WHICH YOU CITED IN YOUR BID WAS THE PRIOR DSA APPROVAL, WHICH, FOR THE REASONS INDICATED ABOVE, WAS NOT ACCEPTABLE FOR THE DSA PROCUREMENT NOW IN QUESTION. IF IT WAS YOUR INTENTION TO RELY ON THE PRIOR NAVY APPROVAL, IT WAS YOUR RESPONSIBILITY, UNDER THE TERMS OF THE INVITATION, TO SO STATE AND TO FURNISH EVIDENCE OF SUCH APPROVAL. HAVING FAILED TO DO SO UNTIL AFTER AWARD OF A CONTRACT TO ANOTHER BIDDER, YOU CANNOT PROPERLY OBJECT TO THAT AWARD, AND WE COULD NOT PROPERLY QUESTION ITS VALIDITY, EVEN IF THE NAVY APPROVAL COULD BE CONSIDERED AS OVERCOMING THE LATER FAILURE AND THE PRESENT NAVY INSISTENCE UPON THE PREPRODUCTION SAMPLE REQUIREMENT.

CONCERNING THE QUALITY OF THE CLIPBOARD WHICH THE SUCCESSFUL BIDDER HAS OFFERED TO SUPPLY, THE CONTRACTING OFFICER REPORTS THAT ACCEPTABLE PREPRODUCTION SAMPLES WERE SUBMITTED BY THE CONTRACTOR UNDER ITS PREVIOUS CONTRACT AWARDED ON IFB NO. DSA-4-64-2060, AND THAT DELIVERY THEREUNDER WAS COMPLETED ON SEPTEMBER 24, 1964. WHILE CERTAIN DEFECTS HAVE SINCE BEEN DISCOVERED IN SOME OF THE CLIPBOARDS FURNISHED, APPROPRIATE ACTION WILL BE TAKEN IN THAT RESPECT UNDER THE CONTRACT WARRANTY PROVISION.

IN THE CIRCUMSTANCES, WE MUST CONCLUDE THERE IS NO BASIS TO HOLD THAT THE REFUSAL OF DSA TO GRANT YOU A WAIVER OF THE PREPRODUCTION SAMPLE REQUIREMENT, OR THAT THE AWARD TO THE ELBE FILE AND BINDER COMPANY, WAS IMPROPER. ACCORDINGLY, YOUR PROTEST IS DENIED.