B-156323, MAY 28, 1965

B-156323, MAY 28, 1965

TO THE HONORABLE SECRETARY OF THE ARMY:

WE HAVE RECEIVED A REPORT DATED MAY 3, 1965, FROM YOUR DIRECTOR OF PROCUREMENT, OFFICE OF THE ASSISTANT SECRETARY, IN CONNECTION WITH THE PROTEST OF FLORENTINE FORGE, INC., MIAMI, FLORIDA, AGAINST THE AWARD OF A CONTRACT FOR CERTAIN ITEMS OF WROUGHT IRON FURNITURE FOR ARMY DAY ROOMS UNDER IFB NO. AII-15-014-65-117 ISSUED FEBRUARY 26, 1965, BY THE ARMY ARMOR CENTER, FORT KNOX, KENTUCKY. THE INVITATION WHICH WAS ISSUED PURSUANT TO REQUISITIONS FROM THE SUPPLY OFFICER, ARMY TRAINING CENTER, ARMOR, SOLICITED BIDS ON (AWARD GROUP ONE) 130 TWO-PASSENGER SETTEES, 20 LOUNGE CHAIRS, 236 COFFEE TABLES AND 17 STEP END TABLES; (AWARD GROUP TWO) 314 FLOOR LAMPS AND 328 TABLE LAMPS; AND (AWARD THREE) 247 GAME TABLES, IN ACCORDANCE WITH STATED SPECIFICATIONS REFERENCING CATALOG NUMBERS OF CERTAIN DESIGNATED MANUFACTURERS. BIDS RECEIVED FROM NINE FIRMS WERE OPENED AS SCHEDULED ON MARCH 29, 1965, AND IT IS REPORTED THAT AWARD ACTION UNDER THE INVITATION IS BEING WITHHELD PENDING RESOLUTION OF THE PROTEST BY THIS OFFICE.

THE RECORD SHOWS THAT THE PROTESTING BIDDER FLORENTINE WAS AWARDED FEDERAL SUPPLY SCHEDULE CONTRACT NO. GS-OOS-54514 BY THE GENERAL SERVICES ADMINISTRATION UNDER THE AUTHORITY OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 377, AS AMENDED (40 U.S.C. 481), TO FURNISH GOVERNMENT'S REQUIREMENTS DURING THE 12 MONTH PERIOD ENDING DECEMBER 14, 1965, FOR THOSE ITEMS OF WROUGHT IRON FURNITURE LISTED IN FEDERAL SUPPLY SCHEDULE, GROUP 71, PART VII, SECTION I. WHILE PART VII OF GROUP 71 IS NOT INCLUDED IN THE LIST OF "MANDATORY NATIONALLY" SCHEDULES PRESENTLY SET FORTH IN PARAGRAPH 5 102.3 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WE HAVE BEEN ADVISED INFORMALLY BY THE ASPR COMMITTEE THAT USE OF PART VII IS NOW MANDATORY NATIONALLY UPON THE DEPARTMENT OF DEFENSE AND WILL BE LISTED AS SUCH IN THE NEXT REVISION OF THAT PARAGRAPH. ALSO, PARAGRAPH 1 (A), SCOPE OF CONTRACT, OF THE FSS CONTRACT'S SPECIAL PROVISIONS STATES:

"THIS SCHEDULE PROVIDES FOR THE NORMAL SUPPLY REQUIREMENTS OF ALL DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS, INCLUDING WHOLLY-OWNED GOVERNMENT CORPORATIONS, IN THE EXECUTIVE BRANCH OF THE FEDERAL GOVERNMENT AND THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, FOR DELIVERY WITHIN THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA, AND CONTRACTS WILL BE USED AS PRIMARY SOURCES FOR THE ARTICLES OR SERVICES LISTED HEREIN.'

PARAGRAPH 101-26.401-3 OF THE FEDERAL PROPERTY MANAGEMENT REGULATIONS PROVIDES THAT THE AGENCIES MENTIONED IN THE ABOVE PROVISIONS ARE REQUIRED TO USE THE SCHEDULE ON A MANDATORY BASIS.

A PERTINENT EXCEPTION (NUMBER 5) TO THE ABOVE SPECIAL PROVISION DOES NOT REQUIRE USE OF THE SCHEDULE TO THE EXTENT THAT THE SPECIFIC ARTICLES OR SERVICES WILL NOT MEET A SPECIAL REQUIREMENT. SUCH EXCEPTION TO MANDATORY USE OF SCHEDULES IS ALSO SET FORTH IN ASPR 5 102.2 (B). THE SCHEDULE FURTHER PROVIDES ON PAGE 5 THAT ALL ITEMS ARE SHIPPED KNOCKED-DOWN UNLESS OTHERWISE NOTED.

THE FACTS INVOLVING THE ISSUANCE OF THE INVITATION ARE REPORTED BY THE CONTRACTING OFFICER IN PERTINENT PART AS FOLLOWS:

"4. ON 25 JANUARY 1965 THE CONTRACTING OFFICER RECEIVED FEDERAL SUPPLY SCHEDULE GROUP 71, PART VII, FOR THE PERIOD 12/15/64 - 12/14/65 (TAB H) WHICH CONTAINED INFORMATION THAT AWARDS OF CONTRACTS FOR WROUGHT IRON AND TUBULAR STEEL FURNITURE WERE PENDING.

"5. ON 26 JANUARY 1965 CALL WAS PLACED TO GSA IN WASHINGTON AND INFORMATION OBTAINED THAT CONTRACT AWARD FOR WROUGHT IRON FURNITURE HAD BEEN MADE THE PREVIOUS FRIDAY TO FLORENTINE FORGE, INCORPORATED, BUT PREPRODUCTION SAMPLE HAD NOT BEEN APPROVED. ON THE SAME DATE CALL WAS PLACED TO MR. MARTIN OF FLORENTINE FORGE, WHO CONFIRMED THE FACT THAT THEY WERE THE NEW CONTRACTOR, BUT DESCRIPTIVE LITERATURE WAS NOT YET AVAILABLE. MR. MARTIN WAS INFORMED OF OUR REQUIREMENT WHICH INCLUDED TWO- PLACE SETTEES WITH PADDED ARMS. HE MENTIONED THAT THEIR CONTRACT DID NOT CALL FOR THIS. HE ALSO INDICATED HE WOULD BE ABLE TO BID ON THIS ITEM IF WE DECIDED TO ADVERTISE. MR. MARTIN ALSO AGREED TO SEND DESCRIPTIVE INFORMATION IN A FEW DAYS. WHEN THE CATALOGS WERE NOT RECEIVED PROMPTLY, AND SINCE THE USING ORGANIZATION WAS PRESSING FOR ACTION, TELEPHONE REQUEST WAS AGAIN MADE ON FEBRUARY 4 FOR DESCRIPTIVE DATA AT WHICH TIME MR. MARTIN AGREED TO FORWARD CUTS FROM OLD CATALOGS SHOWING ITEMS ON CONTRACT. HE ALSO MENTIONED THAT THEY HAD NO LAMPS TO OFFER.

"6. ON FEBRUARY 19, MESSAGE DATED 2/4/65 (TAB I) WAS RECEIVED, INCLOSING PHOTOGRAPHS OF FURNITURE AVAILABLE UNDER CONTRACT, WITH APPROXIMATE PRICES, STATING DELAY WAS CAUSED BY GENERAL SERVICES ADMINISTRATION, NOTIFICATION OF AWARD BEING RECEIVED JUST THE PREVIOUS WEEK.

"7. PHOTOGRAPHS WERE SHOWN TO THE SUPPLY OFFICER, WHO CONSIDERED THE TWO- PLACE SETTEE UNSUITABLE WITHOUT PADDED ARMS, FRONT CENTER LEGS, AND REINFORCED REAR LEGS; THE END TABLE UNSUITABLE AS A SUBSTITUTE FOR STEP END TABLE. NO INFORMATION WAS FURNISHED ON THE GAME TABLE NOR FLOOR LAMPS, AND THE COFFEE TABLE WAS ILLUSTRATED WITH GLASS TOP. THE USING AGENCY ALSO OBJECTED TO RECEIVING THE FURNITURE KNOCKED DOWN, FROM THE STANDPOINT OF LABOR REQUIRED TO ASSEMBLE AND MAINTAIN.

"8. FROM DESCRIPTIVE LITERATURE AVAILABLE FROM OTHER FIRMS, THE USING ORGANIZATION SELECTED PRODUCTS OF VULCAN LINE FROM MILITARY SERVICE COMPANY BROCHURE, STAFCO CATALOG NUMBERS AND LLOYD METAL COMPANY PRODUCT AS MEETING THEIR REQUIREMENTS. ITEM DESCRIPTIONS WERE THEN PREPARED, USING THE PRODUCT OF AT LEAST TWO MANUFACTURERS AS A STANDARD, IN ACCORDANCE WITH PARAGRAPH 1-1206, CONARC REGULATION 715-5 AND BIDS WERE INVITED ON 26 FEBRUARY 1965, FOR OPENING 16 MARCH 1965.

"9. AMENDMENT NO. 2 TO FEDERAL SUPPLY SCHEDULE, FSC GROUP 71, PART VII, WAS ISSUED MARCH 22, 1965 AND RECEIVED AT FORT KNOX 24 MARCH 1965 (TAB J). THIS AMENDMENT LISTED FLORENTINE FORGE, INCORPORATED AS THE GSA CONTRACTOR FOR WROUGHT IRON TYPE STEEL FURNITURE FOR THE PERIOD 15 DECEMBER 1964 THRU 14 DECEMBER 1965. INFORMATION RECEIVED INFORMALLY FROM GSA IS TO THE EFFECT THAT AWARD WAS MADE 22 JANUARY 1965 BUT PREPRODUCTION SAMPLES WERE NOT GIVEN FINAL APPROVAL UNTIL 24 MARCH 1965.

"10. ON 12 MARCH 1965 THE CONTRACTING OFFICER RECEIVED TELEPHONE INFORMATION FROM RICHMOND SUPPORT CENTER, REPORTING ORAL COMPLAINT FROM FLORENTINE FORGE INCORPORATED THAT THIS INSTALLATION HAD ADVERTISED FOR ITEM NUMBERS WHICH THEY THOUGHT SHOULD BE PURCHASED UNDER THEIR CONTRACT. IT WAS AGREED AT THIS TIME THE FEDERAL STOCK NUMBER SHOULD NOT HAVE BEEN USED WITH THE NON-STANDARD ITEM DESCRIPTION ON ITEMS 1 AND 2 AND THAT AN AMENDMENT SHOULD BE ISSUED TO DELETE THE STOCK NUMBERS. AMENDMENT NUMBER 1 WAS ISSUED ON 15 MARCH FOR THIS PURPOSE, AS WELL AS TO INCREASE QUANTITIES OF ITEMS 4 AND 5, DUE TO INCREASED REQUIREMENTS. BID OPENING DATE WAS EXTENDED TO 23 MARCH 1965.

"11. ON 19 MARCH, AMENDMENT NUMBER 2 WAS ISSUED TO FURTHER INCREASE QUANTITIES OF ITEMS 4, 5, AND 6 AND TO ADD ITEM NUMBER 1A FOR MATCHING LOUNGE CHAIRS. BID OPENING DATE WAS EXTENDED TO 29 MARCH 1965.'

IN RECOMMENDING THAT APPROVAL BE GRANTED FOR AWARD OF CONTRACTS TO THE LOWEST RESPONSIVE BIDDERS UNDER THE IFB, THE CONTRACTING OFFICER REPORTS THE FOLLOWING FINDINGS:

"A. LOCAL PURCHASE WAS AUTHORIZED BY US ARMY SUPPORT CENTER FOR NON- STANDARD ITEMS TO MEET A SPECIAL REQUIREMENT FOR ITEMS SIMILAR TO THOSE AVAILABLE UNDER GSA CONTRACTS.

"B. PURCHASE ON THE OPEN MARKET IN SUCH CIRCUMSTANCES IS AUTHORIZED BY ASPR 5-102.3 (6) (5-102.2 (B) ( AND SPECIAL PROVISION 1 (A) (5) OF FEDERAL SUPPLY SCHEDULE.

"C. PURCHASE OF THE ITEMS LISTED IN THE INVITATION WILL SAVE THE LABOR OF ASSEMBLY AT DESTINATION; AND WILL RESULT IN MORE STURDILY CONSTRUCTED FURNITURE, BETTER SUITED TO THE NEEDS OF THE GOVERNMENT FOR USE INTENDED.'

AS INDICATED IN PARAGRAPH 5 OF THE CONTRACTING OFFICER'S REPORT, FLORENTINE DOES NOT OFFER ANY LAMPS UNDER THE SCHEDULE CONTRACT. HOWEVER, REGARDING THE COFFEE TABLE AND GAME TABLE MENTIONED IN PARAGRAPH 7 OF THE REPORT, THE SCHEDULE LISTS ON PAGE 12 COFFEE TABLES WITH EITHER LAMINATED PLASTIC OR TEMPERED PLATE GLASS TOPS AND ON PAGE 15 TABLES HAVING THE GENERAL DIMENSION OF THE GAME TABLE SPECIFIED ARE SHOWN.

CONCERNING THE QUESTION OF WHETHER THE STATED NEEDS FOR SETTEES AND CHAIRS HAVING ADDITIONAL REINFORCEMENT AND PADDED ARMS, STEP END TABLES FOR HOLDING LAMPS, AND COMPLETELY ASSEMBLED ITEMS CONSTITUTE "SPECIAL REQUIREMENTS" UNDER EXCEPTION 5 TO THE SCHEDULE AND ASPR 5-102.2 (B), THE CITED ASPR PROVISION DOES NOT SET FORTH THE CONSIDERATIONS TO BE USED IN DETERMINING WHETHER FEDERAL SUPPLY SCHEDULE ITEMS WILL MEET AN ACTIVITY'S REQUIREMENTS. HOWEVER, PARAGRAPH 101-26.401-4 (G) OF THE FEDERAL PROPERTY MANAGEMENT REGULATIONS PROVIDES THAT IN DETERMINING THE APPLICABILITY OF THE "SPECIAL REQUIREMENT" EXCEPTION CONSIDERATION SHOULD BE GIVEN TO PARAGRAPH 1-1.306-1 OF THE FEDERAL PROCUREMENT REGULATIONS WHICH COVERS THE USE OF FEDERAL STANDARDS AND, IN TURN, INCORPORATES THE EXCEPTIONS RELATING TO THE MANDATORY USE OF FEDERAL SPECIFICATIONS.

PROCEDURES FOR THE ESTABLISHMENT OF FEDERAL SUPPLY SCHEDULES WHICH ARE MANDATORY UPON THE DEPARTMENT OF DEFENSE ARE SET FORTH IN ASPR 5 102.4 SUCH PROCEDURES INCLUDE PRIOR CONCURRENCE OF THE OFFICE OF THE SECRETARY OF DEFENSE AND THE DISTRIBUTION OF PROPOSED MANDATORY SCHEDULES TO THE MILITARY DEPARTMENTS FOR CONSIDERATION AND COMMENT OR CONCURRENCE, AND PLACES WITH THE ASSISTANT SECRETARY OF DEFENSE (INSTALLATIONS AND LOGISTICS) THE RESPONSIBILITY FOR RESOLVING DISAGREEMENTS.

WE ARE INCLINED TO THE VIEW THAT THE ESTABLISHMENT OF A FEDERAL SUPPLY SCHEDULE AS MANDATORY UPON THE DEPARTMENT OF DEFENSE IS A DELIBERATE AND CONSIDERED DETERMINATION BY KNOWLEDGEABLE REPRESENTATIVES OF THE DEPARTMENTS CONCERNED THAT THE ARTICLES LISTED THEREIN WILL ADEQUATELY SERVE THE NEEDS OF SUCH DEPARTMENTS. THE FAILURE TO USE AN EXISTING SCHEDULE IN PROCUREMENTS AND IMPOSITION OF NEW OR ADDITIONAL FEATURES AND REQUIREMENTS NOT CONTAINED THEREIN IS ESPECIALLY SUSCEPTIBLE TO QUESTION BY THE FIRM WHICH HAS BEEN AWARDED A CONTRACT TO SUPPLY THE GOVERNMENT'S REQUIREMENTS FOR SUCH ITEMS, AS AN EFFORT TO PROCURE ARTICLES EITHER FOR REASONS OF PERSONAL PREFERENCE OR IN EXCESS OF WHAT RESPONSIBLE OFFICIALS DETERMINED NECESSARY TO MEET THE GOVERNMENT'S MINIMUM NEEDS. WE THEREFORE BELIEVE THAT THE NON USE OF AN APPLICABLE FEDERAL SUPPLY SCHEDULE ON THE BASIS OF A "SPECIAL REQUIREMENT" SHOULD BE AUTHORIZED ONLY UPON A CONVINCING SHOWING THAT THE NEW OR ADDITIONAL FEATURES SPECIFIED ARE ACTUALLY NECESSARY FOR THE USE INTENDED TO BE MADE OF THE ITEMS AND THAT THE ITEMS DESCRIBED IN THE SCHEDULE, LACKING SUCH FEATURES, WILL NOT SUFFICE. SEE IN THIS GENERAL CONNECTION OUR DECISION B-153404, JULY 23, 1964, TO THE SECRETARY OF THE NAVY, COPY ENCLOSED, CONCERNING USE OF FEDERAL AND MILITARY SPECIFICATIONS.

HERE WE DO NOT FEEL THAT THERE IS A REASONABLE SHOWING THAT A TWO PASSENGER WROUGHT IRON SETTEE (WITH UNPADDED ARM RESTS) WHICH HAS BEEN DETERMINED TO BE ADEQUATE FOR "INDOOR-OUTDOOR, HOSPITAL AND QUARTERS, AND RECREATION ROOM USE," WILL NOT GIVE SATISFACTORY SERVICE FOR SEATING TWO PEOPLE IN ARMY DAY ROOMS. LIKEWISE WE FIND THE RECORD LESS THAN CONVINCING THAT ANY SIGNIFICANT BURDEN WILL BE IMPOSED UPON THE PERSONNEL OF THE USING ACTIVITIES IN ASSEMBLING AND MAINTAINING THE ITEMS. WE ARE UNABLE TO CONCLUDE THEREFORE EITHER THAT THE PARTICULAR FEATURES HERE DESIRED BY THE PURCHASING ACTIVITIES REASONABLY CONSTITUTE A "SPECIAL REQUIREMENT," WITHIN THE CONTEMPLATION OF THAT TERM AS CONTAINED IN THE FEDERAL SUPPLY SCHEDULE CONTRACT AND PERTINENT REGULATIONS, OR THAT THE ESSENTIAL AND MINIMUM NEEDS OF THE PURCHASING ACTIVITIES ARE NOT ADEQUATELY COVERED BY THOSE SIMILAR SCHEDULED ITEMS WHICH FLORENTINE IS OBLIGATED TO DELIVER UNDER THE TERMS OF ITS CONTRACT. WE HAVE CONSISTENTLY HELD THAT WHERE SUPPLIES REQUIRED TO BE FURNISHED UNDER A SUPPLY SCHEDULE CONTRACT WILL MEET THE ADMINISTRATIVE REQUIREMENTS IN A PARTICULAR CASE, THE FACT THAT SUPPLIES HAVING PARTICULAR FEATURES OR OF A HIGHER QUALITY ARE CONSIDERED TO BE MORE SATISFACTORY IS NOT ALONE SUFFICIENT TO JUSTIFY THE PROCUREMENT OF THE SUPPLIES IN THE OPEN MARKET. SEE 2 COMP. GEN. 441; 5 ID. 755; 14 ID. 837; B-68245, OCTOBER 8, 1947; AND B 118537, MARCH 26, 1954.

ACCORDINGLY, NO AWARD SHOULD BE MADE UNDER THE INVITATION FOR THOSE SIMILAR ITEMS WHICH ARE LISTED ON THE SCHEDULE.

INASMUCH AS IT IS OUR CONCLUSION FOR THE REASONS STATED THAT AN AWARD SHOULD NOT BE MADE UNDER THE IFB, WE FIND IT UNNECESSARY TO DECIDE A FURTHER POINT REFLECTED IN THE INVITATION, THAT IS, WHETHER THE GROUPING OF ITEMS ONE THROUGH THREE FOR SINGLE AWARD WAS UNDULY RESTRICTIVE OF COMPETITION.