B-156875, NOV. 30, 1965

B-156875: Nov 30, 1965

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MAY 26 AND TELEGRAM AND CONFIRMING LETTER DATED JUNE 8. THE INVITATION WAS ISSUED APRIL 22. TWELVE BIDS WERE RECEIVED WITH THE LOW BID OF $0.288 PER MEAL. NEXT LOWEST BID WAS THAT OF YOUR COMPANY AT $0.33 PER MEAL OR AT AN ESTIMATED ANNUAL COST OF $274. A FACILITIES CAPABILITY SURVEY WAS INITIATED ON MAY 25. REPLY WAS RECEIVED THAT THE FACILITIES CAPABILITY REPORT (FCR) ON THE LOW BIDDER HAD RESULTED IN AN AFFIRMATIVE FINDING IN ALL AREAS. A RECAPITULATION OF THE LOW BIDDER'S PRICING FIGURES WAS FURNISHED TO THE PROCUREMENT PRICING STAFF. RESULTS OF THIS ANALYSIS WERE FAVORABLE. YOU STATED THAT A CONTRIBUTING FACTOR IN THE LOW BID OF THE IRA GELBER COMPANY IS A LACK OF OVERHEAD DUE TO AN ILLEGAL AND UNETHICAL BUSINESS PRACTICE OF USING THE GOVERNMENT HOT LINE FOR BUSINESS AND PERSONAL CALLS.

B-156875, NOV. 30, 1965

TO ABC FOOD SERVICE, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MAY 26 AND TELEGRAM AND CONFIRMING LETTER DATED JUNE 8, 1965, PROTESTING AWARD OF A CONTRACT TO THE IRA GELBER COMPANY UNDER DEPARTMENT OF THE AIR FROCE INVITATION FOR BIDS NO. 09-603-65-121.

THE INVITATION WAS ISSUED APRIL 22, 1965, SOLICITING 35 FIRMS TO PARTICIPATE IN COMPETITION FOR A FOOD SERVICES CONTRACT AT ROBINS AIR FORCE BASE, GEORGIA, WITH AN OPENING DATE OF MAY 24, 1965. THE INVITATION PROVIDED FOR THE PREPARATION AND SERVING OF AN ESTIMATED 833,000 MEALS TO MILITARY PERSONNEL STATIONED AT THIS BASE. TWELVE BIDS WERE RECEIVED WITH THE LOW BID OF $0.288 PER MEAL, AT AN ESTIMATED TOTAL ANNUAL COST OF $239,904, HAVING BEEN SUBMITTED BY THE IRA GELBER COMPANY. NEXT LOWEST BID WAS THAT OF YOUR COMPANY AT $0.33 PER MEAL OR AT AN ESTIMATED ANNUAL COST OF $274,890. OTHER BIDS RANGED FROM $0.34 PER MEAL FOR AN ANNUAL COST OF $283,220 TO $0.655 PER MEAL AND ANNUAL COST OF $545,615.

A FACILITIES CAPABILITY SURVEY WAS INITIATED ON MAY 25, 1965, IN RESPECT TO GELBER AND ON JUNE 7, 1965, REPLY WAS RECEIVED THAT THE FACILITIES CAPABILITY REPORT (FCR) ON THE LOW BIDDER HAD RESULTED IN AN AFFIRMATIVE FINDING IN ALL AREAS. ADDITIONALLY, ON JUNE 11, 1965, A RECAPITULATION OF THE LOW BIDDER'S PRICING FIGURES WAS FURNISHED TO THE PROCUREMENT PRICING STAFF. RESULTS OF THIS ANALYSIS WERE FAVORABLE, SHOWING A MARGIN OF PROFIT POSSIBLE TO THE CONTRACTOR.

IN YOUR LETTER OF JUNE 8, 1965, YOU STATED THAT A CONTRIBUTING FACTOR IN THE LOW BID OF THE IRA GELBER COMPANY IS A LACK OF OVERHEAD DUE TO AN ILLEGAL AND UNETHICAL BUSINESS PRACTICE OF USING THE GOVERNMENT HOT LINE FOR BUSINESS AND PERSONAL CALLS. YOU ALSO REQUESTED THAT THE APPROPRIATE GOVERNMENT AGENCY CHECK INTO THE MANNER IN WHICH THE MEAL COUNT USED FOR PAYMENT TO THE IRA GELBER COMPANY AT REDSTONE ARSENAL, ALABAMA, IS ASCERTAINED, SINCE IT APPEARED THAT THE GELBER MANAGEMENT IN CONJUNCTION WITH THE MESS SERGEANTS WERE PADDING THE HEAD COUNT EACH DAY TO INCLUDE A LARGE NUMBER OF MEALS NOT SERVED, RESULTING IN THE GELEBER COMPANY BEING PAID MONIES FOR SERVICES NOT RENDERED. YOU STATE THAT ONCE AGAIN USING THESE ILLEGAL AND UNETHICAL BUSINESS PRACTICES THIS COMPANY IS ABLE TO BID LOWER THAN ITS COMPETITORS WHO OPERATE WITH INTEGRITY AND THAT TO OPERATE WITH THIS LOW BID AT WARNER ROBINS AIR MATERIEL AREA (WRAMA), THIS COMPANY MUST PLAN ON USING THESE QUESTIONABLE PRACTICES.

THE DEPARTMENT OF THE AIR FORCE INVESTIGATION REGARDING YOUR ALLEGATION THAT IMPROPER USE OF GOVERNMENT TELEPHONES BY IRA GELBER COMPANY EMPLOYEES MADE POSSIBLE THAT COMPANY'S LOW BID ON THIS INVITATION HAS REVEALED THAT GELBER COMPANY EMPLOYEES HAVE USED THE AUTOVON FACILITIES AT JAMES CONNALLY AIR FORCE BASE, TEXAS, DURING THE TERM OF THE GELBER CONTRACT THERE. HOWEVER, DUE TO THE CONFLICTING STATEMENTS RECEIVED FROM THE TELEPHONE OPERATORS INTERVIEWED, TOGETHER WITH THE FACT THAT NO RECORDS ARE KEPT ON THE CALLS MADE, THE FREQUENCY AND VALUE OF SUCH USAGE CANNOT BE ASCERTAINED. THIS UNAUTHORIZED USE OF THE AUTOVON HAS BEEN BROUGHT TO THE ATTENTION OF THE GELBER COMPANY. WRAMA HAS BEEN INSTRUCTED TO CLOSELY MONITOR THE AUTOVON SYSTEM TO INSURE THAT NO CONTRACTOR EMPLOYEES OR OTHER UNAUTHORIZED PERSONNEL USE THE SYTEM. THE SAME INSTRUCTION HAS BEEN ISSUED TO CONNALLY AIR FORCE BASE. YOUR INFORMATION LEADING TO THE IMPROVEMENT OF THIS SITUATION IS APPRECIATED.

REGARDING PRACTICES IN THE ADMINISTRATION OF AN ARMY CONTRACT AT REDSTONE ARSENAL, THAT CONTRACT PROVIDED FOR MESS ATTENDANT SERVICES FOR ENLISTED PERSONNEL MESSES ON A REQUIREMENTS BASIS. THE CONTRACTOR, IRA GELBER, WAS PAID FIXED AMOUNTS FOR EACH MEAL SERVED IN THE MESS HALLS COVERED BY THE CONTRACT.

THE NUMBER OF MEALS FOR WHICH PAYMENTS WERE MADE WAS DETERMINED BY ACTUAL PHYSICAL COUNT OF THE NUMBER OF PERSONNEL WHO WERE SERVED A MEAL. INDEPENDENT COUNTS WERE MADE BY CONTRACTOR PERSONNEL AND BY ARMY PERSONNEL DURING THE ACTUAL SERVING OF EACH MEAL. IMMEDIATELY AFTER THE COUNTS WERE MADE, CONTRACTOR AND ARMY COUNTS WERE RECONCILED, EVEN IF RECOUNTING WAS NECESSARY.

UPON RECEIPT OF YOUR INQUIRY, ADMINISTRATIVE EXAMINATION AND AUDIT OF THE NUMBER OF MEALS FOR WHICH PAYMENTS TO THE CONTRACTOR HAD BEEN AUTHORIZED WERE MADE. MESS RECORDS, PRESENT-FOR-DUTY RECORDS, AUTHORIZED-TO-EAT RECORDS, CASH-MEALS-SERVED RECORDS AND MEALS-DRAWN RECORDS WERE INCLUDED IN THE EXAMINATION. CAREFUL EVALUATION OF THE INFORMATION DEVELOPED LEADS TO THE CONCLUSION AND TO THE POSITIVE DETERMINATION THAT YOUR ALLEGATIONS IN THIS AREA OF YOUR PROTEST ARE COMPLETELY WITHOUT FOUNDATION. FURTHER, THE ALLEGATIONS OF IMPROPER USE OF GOVERNMENT TELEPHONES AND OF IRREGULARITIES IN MEAL COUNTS ARE MATTERS OF CONTRACT ADMINISTRATION AND HAVE NO RELATIONSHIP TO THE AWARD UNDER THE INSTANT INVITATION.

IN A LETTER DATED AUGUST 27, 1965, TO THE OFFICE OF SPECIAL INVESTIGATIONS, BIGGS AIR FORCE BASE, TEXAS, COPY TO THIS OFFICE, YOU FURTHER ALLEGED THAT THE GELBER COMPANY WAS NOT FURNISHING THE REQUIRED NUMBER OF EMPLOYEES OR, IN SOME CASES, PROPERLY QUALIFIED EMPLOYEES AS REQUIRED BY THE CONTRACT.

ADMINISTRATIVE REPORTS INDICATE THAT GELBER HAS BEEN PERFORMING SATISFACTORILY IN OPERATING THE WRAMA BASE DINING HALLS UNDER THE CURRENT CONTRACT. AT THE INCEPTION OF THE CONTRACT GELBER WAS TEMPORARILY UNABLE TO OBTAIN A SUFFICIENT NUMBER OF EMPLOYEES. AS OF SEPTEMBER 8, 1965, IT WAS DETERMINED THAT THERE WERE SUFFICIENT EMPLOYEES TO MAN THE OPERATION. IT WAS FOUND THAT THE TEMPORARY LACK OF EMPLOYEES IN NO WAY DETRACTED FROM THE QUALITY OF SERVICE RENDERED TO THE BASE. GELBER IS NOT ONLY SATISFYING THE TERMS OF THE CONTRACT BUT, IN WRAMA'S OPINION, IS PROVIDING BETTER SERVICE THAN ANY OTHER COMPANY THAT HAS HAD A CONTRACT THERE IN THE PAST SEVERAL YEARS.

IT IS ALSO NOTED THAT GELBER HAS RECEIVED LETTERS OF COMMENDATION FOR SERVICES RENDERED AT NELLIS AIR FORCE BASE, NEVADA, AND JAMESCONNALLY AIR FORCE BASE, TEXAS.

BASED UPON AN AFFIRMATIVE FCR AND THE FAVORABLE STATEMENT FROM THE PRICING STAFF PLUS THE FACT THAT THE BIDDER HAD CONFIRMED HIS BID PRICE, AN AWARD UNDER INVITATION NO. 09-603-65-121 WAS MADE TO THE IRA GELBER COMPANY, THERE BEING NO APPARENT REASON TO QUESTION THE LOW BIDDER'S ABILITY TO SUCCESSFULLY PERFORM THE CONTRACT. IN THE FACE OF THIS DETERMINATION, THE MARGIN OF PROFIT UPON WHICH A BIDDER FEELS HE CAN SUCCESSFULLY PERFORM A CONTRACT IS A MATTER OF NO CONCERN TO THE CONTRACTING OFFICE.

THE ACTION TAKEN IN THIS PROCUREMENT APPEARS TO HAVE BEEN TAKEN IN THE BEST INTEREST OF THE GOVERNMENT IN ACCORDANCE WITH THE RESPONSIBILITY PLACED UPON PROCUREMENT OFFICIALS TO OBTAIN MAXIMUM COMPETITION WHEREVER POSSIBLE IN CONNECTION WITH THE OBTAINING OF SUPPLIES OR SERVICES FOR THE GOVERNMENT AT THE LOWEST REASONABLE PRICES. BASED UPON THE FOREGOING, IT IS OUR OPINION THAT THE RECORD OF THIS PROCUREMENT AFFORDS NO VALID BASIS TO SUPPORT A CONCLUSION THAT THE CONTRACT WAS IMPROPERLY AWARDED TO THE GELBER COMPANY OR THAT THE CONTRACT DOES NOT CONSTITUTE A VALID AND BINDING OBLIGATION ON THE PART OF THE GOVERNMENT. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.