B-156861, JUL. 2, 1965

B-156861: Jul 2, 1965

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO LETTER OF MAY 24. HOLIDAY WAS THE LOW BIDDER UNDER THE INVITATION HAVING BID $19. THE ONLY OTHER BIDDER WAS THE INLAND SEAS BOAT CO. - "* * * BECAUSE CONTINUOUS OPERATION OF THE CRUISER IS OF UTMOST IMPORTANCE. IF IT IS NOT CLEARLY EVIDENT THAT THE MODEL OF CRUISER OFFERED HAS BEEN IN CURRENT STANDARD PRODUCTION FOR AT LEAST TWO YEARS PRIOR TO DATE OF DELIVERY TO THE GOVERNMENT UNDER THIS INVITATION. INCLUDING NAMES AND ADDRESSES OF PURCHASERS. * * *" HOLIDAY WAS UNABLE TO SATISFY THIS REQUIREMENT AND ITS BID WAS THEREFORE REJECTED AS NONRESPONSIVE. HOLIDAY PROTESTED THAT THE SPECIFICATIONS WERE RESTRICTIVE IN THAT THEY WERE WRITTEN AROUND THE PRODUCT OF INLAND SEAS AND.

B-156861, JUL. 2, 1965

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER OF MAY 24, 1965, FROM THE DEPUTY ASSISTANT SECRETARY, REQUESTING A DECISION REGARDING THE PROTEST OF HOLIDAY BOATS AGAINST THE AWARD OF A CONTRACT FOR A PATROL CRUISER TO THE INLAND SEAS BOAT CO. UNDER INVITATION 65-9.

HOLIDAY WAS THE LOW BIDDER UNDER THE INVITATION HAVING BID $19,815 LESS A DISCOUNT OF ONE-HALF OF 1 PERCENT, 30 DAYS. THE ONLY OTHER BIDDER WAS THE INLAND SEAS BOAT CO. WHICH BID $23,963 LESS A 2 PERCENT DISCOUNT, 20 DAYS.

THE INVITATION PROVIDES THAT---

"* * * BECAUSE CONTINUOUS OPERATION OF THE CRUISER IS OF UTMOST IMPORTANCE, IF IT IS NOT CLEARLY EVIDENT THAT THE MODEL OF CRUISER OFFERED HAS BEEN IN CURRENT STANDARD PRODUCTION FOR AT LEAST TWO YEARS PRIOR TO DATE OF DELIVERY TO THE GOVERNMENT UNDER THIS INVITATION, THE BIDDER MAY BE REQUIRED TO FURNISH EVIDENCE OF SATISFACTORY PERFORMANCE IN GOVERNMENT AGENCIES OR BY COMMERCIAL USERS OF THE EQUIPMENT OFFERED, INCLUDING NAMES AND ADDRESSES OF PURCHASERS. * * *"

HOLIDAY WAS UNABLE TO SATISFY THIS REQUIREMENT AND ITS BID WAS THEREFORE REJECTED AS NONRESPONSIVE.

AS A RESULT OF THE REJECTION OF ITS BID, HOLIDAY PROTESTED THAT THE SPECIFICATIONS WERE RESTRICTIVE IN THAT THEY WERE WRITTEN AROUND THE PRODUCT OF INLAND SEAS AND, THEREFORE, INLAND SEAS WAS THE ONLY ONE ABLE TO MEET THE SPECIFICATIONS; FURTHER, THAT THE SPECIFICATIONS CALLED FOR WOOLSEY'S METALAST SYSTEM WITHOUT PROVIDING FOR USE OF A COMPARABLE ALTERNATE. IN ADDITION, HOLIDAY PROTESTED THAT IT WAS NOT ALLOWED TO OFFER AN INBOARD-OUTBOARD POWER UNIT AS AN ALTERNATE AND IT IMPLIES THAT INLAND DID NOT QUOTE A COMPETITIVE PRICE BECAUSE IT KNEW IT DID NOT HAVE ANY COMPETITION.

THE REPORT ACCOMPANYING THE DEPUTY ASSISTANT SECRETARY'S MAY 24 LETTER DOES NOT STATE WHETHER THE INVITATION SPECIFICATIONS WERE WRITTEN AROUND AN INLAND SEAS PRODUCT, BUT IT IS INDICATED THAT THE REQUIREMENTS WERE BASED UPON THE USING ACTIVITY'S NEEDS. IN THAT CONNECTION, OUR OFFICE HAS RULED THAT THE DETERMINATION OF THE ACTUAL NEEDS OF THE GOVERNMENT AND THE DRAFTING OF SPECIFICATIONS TO REFLECT THOSE NEEDS ARE THE PRIMARY RESPONSIBILITY OF THE CONTRACTING AGENCIES. 44 COMP. GEN. 27.

WITH RESPECT TO HOLIDAY'S CONTENTION THAT ONLY INLAND SEAS COULD MEET THE SPECIFICATIONS, IT IS REPORTED THAT THERE ARE ANY NUMBER OF MANUFACTURERS WHO COULD MEET THE SPECIFICATIONS. WITH RESPECT TO HOLIDAY'S CONTENTION THAT THE DESIGNATION IN THE SPECIFICATIONS OF WOOLSEY'S METALAST SYSTEM WAS RESTRICTIVE, THE REPORT POINTS OUT THAT THE ALLEGATION IS WITHOUT MERIT IN THAT THE INVITATION PROVIDES THAT BIDS ON COMPARABLE ITEMS WILL BE CONSIDERED WHERE BRAND NAMES ARE SPECIFIED. MOREOVER, THE REPORT INDICATES THAT THE PRICE QUOTED BY INLAND SEAS FOR THE 36-FOOT BOAT WITH TWIN 300-HORSEPOWER ENGINES IS REASONABLE INASMUCH AS A PRICE QUOTATION ON A 33-FOOT CRUISER WITH TWIN 210-HORSEPOWER ENGINES HAS BEEN $20,165 AND A QUOTATION ON A 37 FOOT CRUISER WITH TWIN 275-HORSEPOWER ENGINES HAS BEEN $25,555.

HOWEVER, ASIDE FROM THE FOREGOING, OUR OFFICE IS OF THE OPINION THAT THE REJECTION OF THE HOLIDAY BID AS NONRESPONSIVE WAS IMPROPER. WHILE THE COMPANY MAY NOT HAVE BEEN ABLE TO MEET THE EXPERIENCE REQUIREMENT, THERE IS NO DETERMINATION THAT IT WAS NOT RESPONSIBLE SO FAR AS CONCERNS PERFORMANCE OF THIS CONTRACT. IN B-147091, SEPTEMBER 22, 1961, THERE WAS CONSIDERED A SITUATION WHERE THE INVITATION FOR BIDS REQUIRED THE OFFERED EQUIPMENT TO BE MANUFACTURED AND SOLD IN COMMERCIAL QUANTITIES. THE DECISION STATED:

"* * * THE PROPRIETY OF INCLUSION IN AN INVITATION OF SPECIALIZED EXPERIENCE REQUIREMENTS IS FOR DETERMINATION IN THE FIRST INSTANCE BY THE PROCURING AGENCY, AND IN THE ABSENCE OF CONVINCING EVIDENCE THAT SUCH REQUIREMENTS ARE CLEARLY UNNECESSARY TO MEET THE NEEDS OF THE GOVERNMENT, OR ARE SO RESTRICTIVE AS TO UNDULY LIMIT COMPETITION, OUR OFFICE IS NOT INCLINED TO SUBSTITUTE ITS JUDGMENT FOR THAT OF THE PROCURING AGENCY. THE ISSUE, NEVERTHELESS, REMAINS ONE OF RESPONSIBILITY RATHER THAN OF RESPONSIVENESS, AND THE ULTIMATE QUESTION TO BE DECIDED IS NOT WHETHER THE SPECIALIZED EXPERIENCE REQUIREMENT HAS OR HAS NOT BEEN MET, BUT WHETHER, HAVING IN MIND ALL OF THE FACTORS WHICH ENTER INTO SUCH A DETERMINATION, A PARTICULAR BIDDER MAY BE REGARDED AS RESPONSIBLE. * * *"

THE DECISION INDICATED THAT, ALTHOUGH A BIDDER MAY HAVE PRODUCED SATISFACTORY ARTICLES IN THE PAST, THE QUESTION OF WHETHER IT CAN CONTINUE TO DO SO INVOLVES COMPETENCE AND RESPONSIBILITY RATHER THAN CONFORMABILITY OF THE ARTICLES TO THE SPECIFICATION. THE DECISION CONCLUDED THAT NO BID COULD BE REJECTED SOLELY FOR FAILURE TO MEET THE EXPERIENCE REQUIREMENT. SEE ALSO B-149250, SEPTEMBER 11, 1962, WHEREIN IT WAS HELD THAT A BIDDER SHOULD NOT HAVE BEEN DECLARED NONRESPONSIVE SOLELY FOR FAILURE TO OFFER STANDARD PRODUCTION EQUIPMENT AS REQUIRED IN AN EXPERIENCE REQUIREMENT.

IT IS NOTED THAT HOLIDAY HAS INDICATED IN ITS BID THAT IT IS A SMALL BUSINESS CONCERN. THAT FACTOR WAS CONSIDERED IN 40 COMP. GEN. 106. THAT CASE THE AGENCY REJECTED BIDS OF SMALL BUSINESSES AS NONRESPONSIVE TO AN EXPERIENCE CLAUSE WHICH REQUIRED BIDDERS TO HAVE PREVIOUSLY MANUFACTURED ITEMS SIMILAR TO THE ONES BEING PROCURED. THE EXPERIENCE CLAUSE WAS INCLUDED IN THE INVITATION BECAUSE HEALTH AND SAFETY OF TROOPS AND CIVILIANS COULD BE AFFECTED BY A FAULTY PRODUCT. IN THAT CONNECTION, IT IS OBSERVED THAT IT IS REPRESENTED IN THE IMMEDIATE CASE THAT THE EXPERIENCE REQUIREMENT WAS INCLUDED BECAUSE THE PATROL CRUISER IS TO BE USED AT TOP SPEED IN SEARCH AND RESCUE MISSIONS DURING SEVERE STORMS AND HEAVY SEAS WHERE THE SAFETY OF THE BOAT AND OPERATOR IS AT STAKE. IN THE CITED CASE, OUR OFFICE HELD THAT THE VALIDITY OF THE AWARDED CONTRACT WOULD DEPEND UPON A DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION (SBA) AS TO WHETHER THE BIDDERS WHOSE BIDS WERE REJECTED AS NONRESPONSIVE TO THE EXPERIENCE CLAUSE WERE IN FACT NONRESPONSIBLE. IN PASSING UPON THE CASE IT WAS STATED BEGINNING AT THE BOTTOM OF PAGE 110:

"* * * WHILE WE HAVE IN A NUMBER OF CASES REJECTED PROTESTS BY BIDDERS WHO FAILED TO MEET EXPERIENCE QUALIFICATIONS SPECIFICALLY STATED IN INVITATION FOR BIDS, AND HAVE SOMETIMES REFERRED TO THE BIDS OF SUCH BIDDERS AS NOT "RESPONSIVE" TO THE INVITATION, WE HAVE IN ALL SUCH CASES CONSIDERED THE QUALIFICATION REQUIREMENTS ON THE BASIS OF WHETHER THEY WERE REASONABLE TESTS OF RESPONSIBILITY. WHERE IT APPEARED THAT A BIDDER EXCLUDED BY THE PROVISIONS OF SUCH A QUALIFICATION REQUIREMENT COULD NOT OTHERWISE HAVE BEEN FOUND TO BE LACKING IN RESPONSIBILITY, WE HAVE HELD THE QUALIFICATION REQUIREMENT TO BE IMPROPER AS AN UNAUTHORIZED RESTRICTION OF COMPETITION. SEE 39 COMP. GEN. 173. AS STATED THEREIN, WE FEEL THAT "THE STATEMENT OF SUCH QUALIFICATION SHOULD NOT BE CONSIDERED AS HAVING THE EFFECT OF TRANSFORMING THE PURELY FACTUAL QUESTION OF RESPONSIBILITY INTO A LEGAL QUESTION OF CONFORMITY TO THE INVITATION.'

IN VIEW OF THE FOREGOING AND SINCE IT IS REPORTED THAT THE INLAND SEAS BOAT CO. WAS INFORMED OF THE PROTEST WITHIN A FEW DAYS OF AWARD OF A CONTRACT TO IT AND ADVISED NOT TO INCUR WORK OR EXPENSE ON THE CRUISER UNTIL THE MATTER WAS RESOLVED, APPROPRIATE STEPS SHOULD BE TAKEN TO DETERMINE THE RESPONSIBILITY OF HOLIDAY, INCLUDING A REFERRAL OF THE MATTER TO THE SBA, IF NECESSARY, BEFORE THE CONTRACTOR IS ALLOWED TO RESUME PRODUCTION. IF IT IS DETERMINED THAT HOLIDAY IS RESPONSIBLE, OR IF A FINDING OF NONRESPONSIBILITY IS MADE AND IT IS NOT CONCURRED IN BY THE SBA, THE CONTRACT AWARDED TO INLAND SEAS SHOULD BE CANCELED AND AWARD MADE TO HOLIDAY.

THE ENCLOSURES WHICH ACCOMPANIED THE MAY 24 LETTER ARE RETURNED AS REQUESTED.