B-156073, JUN. 3, 1965

B-156073: Jun 3, 1965

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TO RED CIRCLE CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 9. 225 PLYWOOD TRUNK LOCKERS WITH TRAY AND PADLOCK WAS ISSUED DECEMBER 21. THE NON-SET-ASIDE PORTION OF THE INVITATION WAS AWARDED FEBRUARY 5. SINCE THE ITEMS TO BE PROCURED WERE URGENTLY REQUIRED. 075 ITEMS WAS ALSO AWARDED TO BENTON. YOU REQUEST THAT THE CONTRACTS WITH BENTON BE CANCELED AND THAT ALL FUTURE PROCUREMENTS OF THIS ITEM BE SUSPENDED UNTIL REVISED SPECIFICATIONS ARE ISSUED. YOU ALLEGE THAT YOU HAVE A CLAIM PENDING WITH THE GOVERNMENT FOR REIMBURSABLE COSTS UNDER CONTRACTS NOS. YOU STATE THAT THE TWO LOWEST BIDDERS HAVE NEVER MADE THIS ITEM BEFORE AND THAT BECAUSE OF YOUR GREATER KNOWLEDGE OF POSSIBLE SPOILAGE OF MATERIALS IN MAKING THIS ITEM YOU WERE PLACED AT A DISADVANTAGE IN INCLUDING SUCH INCREASED COSTS IN YOUR BID.

B-156073, JUN. 3, 1965

TO RED CIRCLE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 9, 1965, PROTESTING ANY AWARD UNDER DEFENSE SUPPLY AGENCY INVITATION FOR BIDS NO. DSA-1-65- 808, ISSUED BY DEFENSE CLOTHING AND TEXTILE SUPPLY CENTER, PHILADELPHIA, PENNSYLVANIA.

INVITATION NO. DSA-1-65-808 FOR 24,225 PLYWOOD TRUNK LOCKERS WITH TRAY AND PADLOCK WAS ISSUED DECEMBER 21, 1964, AND OPENED AT 11 A.M., E.S.T., ON JANUARY 8, 1965, WITH A LABOR SURPLUS SET-ASIDE QUANTITY OF 8,075 TRUNK LOCKERS. THE NON-SET-ASIDE PORTION OF THE INVITATION WAS AWARDED FEBRUARY 5, 1965, CONTRACT NO. DSA-1-8505, TO BENTON CABINET AND SUPPLY COMPANY, SEARCY, ARKANSAS, AND SINCE THE ITEMS TO BE PROCURED WERE URGENTLY REQUIRED, ON MARCH 11, 1965, THE LABOR SURPLUS SET-ASIDE PORTION OF 8,075 ITEMS WAS ALSO AWARDED TO BENTON, IT BEING A SMALL BUSINESS CONCERN IN AN AREA OF PERSISTENT AND SUBSTANTIAL LABOR SURPLUS.

YOU REQUEST THAT THE CONTRACTS WITH BENTON BE CANCELED AND THAT ALL FUTURE PROCUREMENTS OF THIS ITEM BE SUSPENDED UNTIL REVISED SPECIFICATIONS ARE ISSUED. YOU ALLEGE THAT YOU HAVE A CLAIM PENDING WITH THE GOVERNMENT FOR REIMBURSABLE COSTS UNDER CONTRACTS NOS. QM-CTM 11088 AND QM-CTM-11312 FOR INCREASED COSTS RESULTING FROM INADEQUATE SPECIFICATIONS FOR THIS ITEM WITH REGARD TO RIVETS AND PLYWOOD. YOU STATE THAT THE TWO LOWEST BIDDERS HAVE NEVER MADE THIS ITEM BEFORE AND THAT BECAUSE OF YOUR GREATER KNOWLEDGE OF POSSIBLE SPOILAGE OF MATERIALS IN MAKING THIS ITEM YOU WERE PLACED AT A DISADVANTAGE IN INCLUDING SUCH INCREASED COSTS IN YOUR BID.

WHILE BENTON HAD NOT PREVIOUSLY BEEN AWARDED A CONTRACT FOR THIS ITEM THE CONTRACTING OFFICE DETERMINED THAT THIS FIRM WAS A RESPONSIBLE BIDDER IN ACCORDANCE WITH ASPR 1-903.1. A FINANCIAL SURVEY DETERMINED THAT THERE WERE SUFFICIENT FINANCES AVAILABLE FOR PERFORMANCE OF THE CONTRACT, AND AS A RESULT OF A PREAWARD SURVEY OF THE BIDDER'S PLANT IN SEARCY, ARKANSAS, IT WAS RECOMMENDED THAT A COMPLETE AWARD BE MADE TO BENTON. ONE OF THE BASES FOR THIS RECOMMENDATION WAS THE FACT THAT MR. SHIRLEY KUCHERA, THE OWNER OF HARDWOOD SPECIALTIES OF CALIFORNIA, A SUPPLIER OF THIS ITEM UNDER A PREVIOUS CONTRACT, WAS THE PLANT ENGINEER FOR BENTON. MR. KUCHERA HAS HAD 15 YEARS' EXPERIENCE WITH THE PRODUCTION OF THIS END ITEM AND IN ESTABLISHING QUALITY CONTROLS FOR THE ITEM. IT IS THEREFORE APPARENT THAT BENTON, AS A RESULT OF THE CONNECTION OF MR. KUCHERA WITH THE FIRM, HAS THE EXPERIENCE CITED BY YOU AS BEING NECESSARY IN ORDER TO PROPERLY PREPARE A BID AND PRODUCE THE ITEM. B-154691, OCTOBER 21, 1964.

IT IS REPORTED THAT WHILE YOUR COMPANY HAS A CLAIM PENDING FOR REIMBURSABLE COSTS ON CONTRACTS NOS. QM (CTM-11088-E-62 AND QM (CTM/ 11312 -E-62 PRESENTLY BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA NO. 10570), THE PREVIOUS CONTRACTS FOR THE SAME ITEM WITH HARDWOOD SPECIALTIES OF CALIFORNIA AND BERN-KANE PRODUCTS, KANE, PENNSYLVANIA, HAVE PRODUCED NO CLAIMS AGAINST THE GOVERNMENT BECAUSE OF RIVETS OR PLYWOOD. FURTHER, THE AGENCY POINTS OUT THAT THERE APPEARS TO BE A DISCREPANCY IN THE COST PRESENTED BY YOU IN ADDING TO YOUR BID THE SUM OF $1.0109 PER UNIT TO COVER THE EXTRA WASTAGE EXPERIENCED ON PREVIOUS CONTRACTS, WHEREAS IN YOUR PENDING CLAIM $ .3406 PER UNIT WAS REPRESENTED AS THE EXCESS COST.

THE U.S. ARMY LABORATORIES, NATICK, MASSACHUSETTS, THE SPECIFICATIONS PREPARING ACTIVITY, HAS CONSISTENTLY DETERMINED THAT THERE IS NO INADEQUACY IN THE SPECIFICATION WITH REGARD TO RIVETS AND PLYWOOD. FURTHER, IT HAS BEEN DETERMINED THAT THE SUBSTITUTION OF A BETTER GRADE INNER PLY IN THE PLYWOOD, AS SUGGESTED BY YOU, WILL INCREASE THE PRICE OF THE END ITEM AND WOULD NOT BE CONSIDERED ECONOMICALLY FEASIBLE; ALSO, THAT THE DIFFICULTY WITH THE RIVET WAS NOT THE RESULT OF AN IMPROPERLY SPECIFIED RIVET OR PLYWOOD BUT WAS THE RESULT OF OTHER FACTORS, SUCH AS IMPROPER DRIVING OF RIVETS, IMPROPER DRIVING EQUIPMENT AND INADEQUATE TRAINING OF PERSONNEL. IT IS NOTED THAT IN THE PRESENT INVITATION THE RIVETS ARE REQUIRED TO BE MACHINE DRIVEN AND SET.

UNDER THE CIRCUMSTANCES, IT IS NOT APPARENT TO US WHEREIN YOU WERE AT A COMPETITIVE DISADVANTAGE OR WERE REQUIRED TO DO ANYTHING MORE THAN ANY OTHER BIDDER RESPONDING TO THE INVITATION. BENTON'S BID PRESUMABLY WAS BASED ON CONSIDERATIONS WHICH PERMITTED IT TO SUBMIT THE LOWEST BID. IS BENTON'S OBLIGATION THEREUNDER TO PROVIDE AN END ITEM MEETING THE GOVERNMENT'S SPECIFICATIONS IN ALL RESPECTS AT THE PRICE BID, AND IF IT FAILS TO DO SO IT IS ASSUMED THAT THE GOVERNMENT WILL EXERCISE THE RIGHTS RESERVED TO IT UNDER THE CONTRACT TERMS. HOWEVER, IT IS REPORTED THAT THE REQUIRED PREPRODUCTION SAMPLE HAS BEEN RECEIVED BY THE CONTRACTING OFFICE AND HAS BEEN EVALUATED AS ACCEPTABLE.

SINCE THE SPECIFICATIONS OF THE PRESENT INVITATION WERE FOUND TO BE SUFFICIENT WITH RESPECT TO THE FACTORS CITED BY YOUR PROTEST, WE SEE NO LEGAL OBJECTION TO THE AWARD AND YOUR PROTEST IS DENIED.

REPORT AND RECOMMENDATION OF THE CONTRACTING OFFICER

THE FOLLOWING REPORT AND RECOMMENDATION IS FURNISHED IN ACCORDANCE WITH DSPR 2-407.9 IN RESPONSE TO DSAH-G LETTER DATED 20 MAY 1965, SUBJECT: PROTEST BY RED CIRCLE CORPORATION--- IFB DSA-1-65-1120--- B 156606.

1. SUBJECT I/B WAS ISSUED 24 FEBRUARY 1965 AND OPENED 6 APRIL 1965 INVITING BIDS FOR 14,400 EACH TRUNK, LOCKER, PLYWOOD, WITH TRAY AND PADLOCK, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-T-10798D DATED 11 SEPTEMBER 1962 WITH DEVIATION LIST DATED 9 DECEMBER 1964 WITH ADDITIONAL DEVIATIONS AS CITED ON PAGE 5 OF THE INVITATION. AMENDMENT NO. 1 DATED 9 MARCH 1965 ADDED SOUTHERN PINE PLYWOOD. AMENDMENTS 2 AND 3 ADDED OTHER DEVIATIONS FROM THE SPECIFICATION AND EXTENDED THE OPENING. AN ADDITIONAL QUANTITY OF 14,400 EACH WAS SET ASIDE FOR NEGOTIATION WITH FIRMS IN LABOR SURPLUS AREAS. AN AWARD WAS MADE TO TEXAS TRUNK CO., INC., SAN ANTONIO, TEXAS, ON 20 MAY 1965 AT THE TOTAL DOLLAR VALUE OF $130,920, BEING THE LOWEST BID RECEIVED (CONTRACT NO. DSA-1-9136). ON 9 JUNE 1965, THE LABOR SURPLUS SET ASIDE WAS AWARDED TO BENTON CABINET AND SUPPLY COMPANY, SEARCY, ARKANSAS, BEING A SMALL BUSINESS CONCERN IN AN AREA OF SUBSISTENT LABOR SURPLUS (CONTRACT NO DSA-1-9238).

2. IN ITS PROTEST, RED CIRCLE REFERS TO THE REASONS SET FORTH IN ITS PRIOR PROTEST, B-156073, BY LETTER DATED 3 MARCH 1965 (LETTER WAS DATED 9 MARCH 1965) AND REQUESTS THAT THE PRESENT INVITATION BE WITHDRAWN AND NOT READVERTISED UNTIL NECESSARY CLARIFICATION, AMENDMENTS AND MODIFICATIONS TO THE BASIC PERTINENT STANDARDS AND DRAWINGS CAN BE MADE. THE REASONS CITED BY RED CIRCLE IN ITS PROTEST NUMBER B-156073 WERE ANSWERED FULLY BY REPORT AND RECOMMENDATION OF THE CONTRACTING OFFICER DATED 5 APRIL 1965. FURTHER, THE COMPTROLLER GENERAL, IN ITS DECISION MS COMP GEN B-156073 DATED 3 JUNE 1965, DENIED THE PROTEST OF RED CIRCLE. CONSEQUENTLY, THERE APPEARS TO BE NO QUESTION AS TO THE PROPRIETY OF AWARDING THE SET ASIDE PORTION OF THE SUBJECT PROCUREMENT TO BENTON CABINET AND SUPPLY COMPANY.

3. WITH REFERENCE TO AN AWARD TO TEXAS TRUNK, IT IS TO BE NOTED THAT RED CIRCLE INDICATES IN ITS LETTER OF 9 MARCH (PROTEST B-156073) "... PROBABLY BIDDER G MADE THE ITEMS PREVIOUSLY....' RED CIRCLE IS CORRECT IN THIS STATEMENT SINCE TEXAS TRUNK (BIDDER G) COMPLETED THE FOLLOWING CONTRACTS FOR THE TRUNK, LOCKER PLYWOOD WITH TRAY AND PADLOCK:

A. CONTRACT QM (CTM) 8905-E-61 DATED 28 OCTOBER 1960 FOR 12,500 EACH. THE CONTRACT WAS COMPLETED 75 DAYS AHEAD OF SCHEDULE, THE PERFORMANCE AND QUALITY WERE CONSIDERED SATISFACTORY AND THERE WERE NO WAIVERS OR REJECTIONS ON THE CONTRACT.

B. CONTRACT QM (CTM) 8974-E-61 DATED 18 NOVEMBER 1960 FOR 12,500 EACH. THE CONTRACT WAS COMPLETED 69 DAYS AHEAD OF SCHEDULE, THE PERFORMANCE AND QUALITY WERE CONSIDERED SATISFACTORY AND THERE WERE NO WAIVERS OR REJECTIONS ON THE CONTRACT.

IT IS THEREFORE APPARENT THAT TEXAS TRUNK ALSO HAS THE EXPERIENCE IN THE PRODUCTION OF THE END ITEM CITED BY RED CIRCLE IN PROTEST B-156073 AS BEING NECESSARY IN ORDER TO PROPERLY PREPARE A BID.

4. IN THE PRESENT PROTEST, RED CIRCLE HAS ADDED AN ADDITIONAL GROUND, CONTENDING THAT THERE IS NO TEST METHOD FOR SPECIFIC GRAVITY UNDER COMMERCIAL STANDARD CS 259-63 FOR SOUTHERN PINE, WHICH WAS ADDED AS AN ALTERNATE PLYWOOD USED IN THE MANUFACTURE OF THE FOOT LOCKER AND TRAY. RED CIRCLE CONTENDS THAT SINCE THE COMMERCIAL STANDARD REQUIRES AN INSPECTION FOR SPECIFIC GRAVITY BUT DOES NOT INDICATE A TEST METHOD FOR THIS SPECIFIC GRAVITY, THE INVITATION SHOULD BE WITHDRAWN. THIS TECHNICAL QUESTION WAS REFERRED BY THIS CENTER TO THE U.S. ARMY NATICK LABORATORIES, NATICK, MASSACHUSETTS. BY DFS DATED 20 MAY AND 7 JUNE 1965, THE ACTING CHIEF OF THE MECHANICAL ENGINEERING DIVISION, U.S. ARMY NATICK LABORATORIES, NATICK, MASSACHUSETTS, INFORMED THIS CENTER THAT COMMERCIAL STANDARD CS 259-63 FOR SOUTHERN PINE PLYWOOD PROVIDES THAT A PRODUCER MAY INCLUDE WITH EACH SHIPMENT A CERTIFICATE OF INSPECTION AND STATE THAT THE PLYWOOD CONFORMS WITH THE COMMERCIAL STANDARD. THE LABORATORIES DETERMINED THAT THE SOUTHERN PINE PLYWOOD INDUSTRIES AND THE AMERICAN PLYWOOD ASSOCIATION WERE CONDUCTING SPECIFIC GRAVITY TESTS TO DETERMINE COMPLIANCE WITH THE REQUIREMENTS OF THE COMMERCIAL STANDARD. CONSEQUENTLY, A CERTIFICATE OF INSPECTION WOULD ASSURE THE GOVERNMENT AND CONTRACTOR THAT THE SOUTHERN PINE PLYWOOD BEING PURCHASED COMPLIED WITH THE COMMERCIAL STANDARD. (SEE CROWN COAT FRONT CO., INC. V. THE UNITED STATES, 154 CT.CL. 613 FOR AUTHORITY OF THE GOVERNMENT TO TEST FOR A MILDEW-INHIBITOR ELEMENT WHICH WAS REQUIRED BY THE CONTRACT, THOUGH NO TEST METHOD FOR SUCH ELEMENT WAS INDICATED).

5. THE DF OF 7 JUNE 1965 INDICATES THAT AS A RESULT OF A MEETING HELD 20 AND 21 MAY 1965, REVISIONS HAVE BEEN PROPOSED TO CS 259-63. A PRINCIPAL REVISION IS THAT SPECIFIC GRAVITY REQUIREMENTS WILL ONLY APPLY TO STRUCTURAL OR CONSTRUCTION GRADES OF PLYWOOD. IT IS THEREFORE APPARENT THAT THE INDUSTRY DOES NOT CONSIDER THE SPECIFIC GRAVITY TEST TO BE OF THE SAME IMPORT AS INDICATED BY RED CIRCLE IN ITS PROTEST OF 11 MAY 1965. HOWEVER, A CONTRACTOR TO THIS CENTER CAN STILL REQUIRE THAT THE SPECIFIC GRAVITY TEST BE PERFORMED IN ORDER TO COMPLY WITH COMMERCIAL STANDARD CS 259-63 DATED 15 NOVEMBER 1963, THE STANDARD IN BEING AT THE TIME OF THE ISSUANCE OF THE SUBJECT INVITATION.

6. BOTH TEXAS TRUNK AND BENTON, IN THE INFORMATION FURNISHED BY THEM FOR THE PRE-AWARD SURVEY, INDICATED THAT IN THE PERFORMANCE OF CONTRACTS RESULTING FROM THE SUBJECT INVITATION, DOUGLAS FIR PLYWOOD (COMMERCIAL STANDARD CS 45-60) WOULD BE USED.

RECOMMENDATION

IT IS RECOMMENDED THAT THE PROTEST OF RED CIRCLE CORPORATION IN IFB DSA-1 -65-1120 BE DENIED, THAT THE CONTRACTS WITH TEXAS TRUNK CO., INC. AND BENTON CABINET AND SUPPLY COMPANY NOT BE CANCELLED AND THAT NO RESTRICTION BE PLACED UPON FURTHER PROCUREMENTS OF THIS END ITEM.