B-157029, DEC. 13, 1965

B-157029, DEC. 13, 1965

TO SELLERS, CONNER AND CUNEO:

WE REFER TO YOUR LETTER OF OCTOBER 5, 1965, AND PRIOR CORRESPONDENCE CONCERNING THE PROTEST OF ADDRESSOGRAPH MULTIGRAPH CORPORATION (ADDRESSOGRAPH) AGAINST THE AWARD MADE TO FARRINGTON BUSINESS MACHINES CORPORATION UNDER INVITATION NO. FPNHO-P-76501-NA-4-30-65, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, WASHINGTON, D.C., ON APRIL 15, 1965.

PRICE QUOTATIONS WERE REQUESTED ON SPECIFIED QUANTITIES OF EMBOSSERS, IMPRINTERS AND ACCESSORY EQUIPMENT (ITEMS 1 THROUGH 5). A "BRAND NAME OR EQUAL" PURCHASE DESCRIPTION WAS USED SPECIFYING FARRINGTON MODELS. THE SPECIFICATION CALLED FOR THE EMBOSSING MACHINE TO ACCOMMODATE BOTH PLASTIC CARDS AND METAL PLATES CONTAINING A 54 CHARACTER CAPACITY. ALTERNATE PROPOSALS WERE PERMITTED ON FURNISHING ONE EMBOSSER FOR PLASTIC CARDS AND ONE FOR METAL PLATES. THE IMPRINTER ("FARRINGTON MFG. CO. NO. 867 "AUTOMATIC" TICKET WRITER, OR EQUAL.'' WAS REQUIRED TO CONTAIN A FIVE DIGIT DATE WHEEL FOR PRINTING ON THE BOTTOM EDGE OF THE FORM. AGGREGATE AWARD WAS SPECIFIED. THE PROCUREMENT WAS ISSUED PURSUANT TO A DEPARTMENT OF THE AIR FORCE REQUIREMENT.

THE FOUR KNOWN SOURCES OF SUPPLY FOR THIS TYPE OF EQUIPMENT, FARRINGTON, ADDRESSOGRAPH, DASHEW BUSINESS MACHINES, INC., AND DEFIANCE MACHINE AND TOOL COMPANY, WERE INVITED TO SUBMIT OFFERS. THESE FOUR FIRMS SUBMITTED PROPOSALS WHICH WERE OPENED ON APRIL 30, 1965. DASHEW OFFERED AN AGGREGATE PRICE FOR THE SPECIFIED EQUIPMENT OF $496,797.25. IT ALSO MADE ALTERNATE OFFERS OF $257,470.55 AND $369,289.75. ADDRESSOGRAPH'S PRICE FOR THE REQUIREMENTS WAS $438,074.15, BUT IT ALSO MADE AN ALTERNATE OFFER OF $309,309.65. FARRINGTON QUOTED $360,496.75 FOR THE REQUIRED EQUIPMENT WHILE DEFIANCE QUOTED A PRICE WELL IN EXCESS OF THAT AMOUNT. IT WAS DETERMINED THAT THE EMBOSSER (ITEM 1) OFFERED BY FARRINGTON WAS A "FOREIGN MADE" ITEM UNDER THE BUY AMERICAN ACT. FARRINGTON'S UNIT PRICE FOR THE ITEM WAS $572.10 OR A TOTAL OF $137,304 FOR THE REQUIRED 240 UNITS. A 12- PERCENT BUY AMERICAN DIFFERENTIAL WAS ADDED TO THIS PRICE (12 PERCENT OF $137,304 LESS FEDERAL EXCISE TAX AND APPLICABLE DISCOUNT OF 1 1/2 PERCENT), FOR A TOTAL EVALUATED PRICE OF $370,744.44. WHILE THE ALTERNATE QUOTES BY DASHEW AND BY ADDRESSOGRAPH WERE LOWER, IT WAS CONCLUDED THAT THE EQUIPMENT MODIFICATIONS OFFERED UNDER THESE PROPOSALS WERE UNACCEPTABLE. ACCORDINGLY, ON JUNE 10, 1965, FARRINGTON RECEIVED THE AWARD.

YOU PROTEST IN BEHALF OF ADDRESSOGRAPH THAT THE AIR FORCE SPECIFICATION USED IN THIS PROCUREMENT WAS UNDULY RESTRICTIVE, RESULTING IN UNNECESSARY COSTS TO THE GOVERNMENT.

THE SPECIFICATIONS CALLED FOR A 54 CHARACTER CAPACITY ON THE EMBOSSER. AS INDICATED ABOVE, FARRINGTON QUOTED $572.10 FOR THIS ITEM. YOU POINT OUT THAT THE FARRINGTON EMBOSSER, BEING MANUFACTURED IN ENGLAND, NORMALLY HAS A 54 CHARACTER CAPACITY TO ACCOMMODATE THE EUROPEAN ALPHABET WHICH INCLUDES CERTAIN ACCENTED VOWELS AND OTHER SPECIAL SYMBOLS NOT USED IN THE UNITED STATES. ADDRESSOGRAPH QUOTED A PRICE OF $535 FOR ITS EMBOSSER WITH A 48 CHARACTER CAPACITY, BUT HAD TO QUOTE A PRICE OF $575.85 FOR A MODIFIED 54 CHARACTER CAPACITY EMBOSSER. THE 48 CHARACTER EMBOSSER WAS NOT FOUND ACCEPTABLE. YOU QUESTION WHY IT WAS NECESSARY TO REQUIRE A 54 CHARACTER CAPACITY WHEN ONLY FARRINGTON NORMALLY MAKES SUCH AN EMBOSSER.

FOR THE IMPRINTER ADDRESSOGRAPH PROPOSED A SHIFTING OF THE INFORMATION CONTAINED ON THE EMBOSSED METAL PLATES AND THAT CONTAINED ON THE PLASTIC CARDS, AND ALSO A SHIFTING OF THE LOCATION OF THE DATA WHEEL. WITH THESE MODIFICATIONS ADDRESSOGRAPH PROPOSED A PRICE OF $26.32 PER IMPRINTER. ITS PRICE FOR THE IMPRINTER AS REQUIRED BY THE SPECIFICATIONS WAS $43.99, WHILE FARRINGTON QUOTED A PRICE OF $32.67. YOU QUESTION WHY THE DATE WAS REQUIRED AT THE BOTTOM OF THE TICKET WHEN THE USUAL PRACTICE IS TO PLACE THE DATE AT THE TOP OF THE TICKET.

YOU STATE THAT BOTH EMBOSSERS AND IMPRINTERS HAVE WIDE GENERAL COMMERCIAL USE AND ARE STANDARD ARTICLES IN THE TRADE, BUT THAT THE AIR FORCE HAS REQUIRED CHARACTERISTICS IN THESE ITEMS WHICH ARE CLOSELY GEARED TO THE FARRINGTON PRODUCTS BUT ARE APPRECIABLY DIFFERENT FROM THE GENERAL USE AND ARE WITHOUT A PERFORMANCE JUSTIFICATION.

AS YOU ARE AWARE, THIS EQUIPMENT IS DESIGNED TO IMPLEMENT A SYSTEM RECENTLY DEVELOPED BY THE AIR FORCE FOR REPORTING AVIATION FUEL ISSUES AND SALES AS WELL AS OTHER TRANSACTIONS. FARRINGTON VOLUNTEERED ITS EQUIPMENT AND "KNOW-HOW" IN THE DEVELOPMENT PHASE OF THE PROGRAM WITHOUT CHARGE. ADDRESSOGRAPH OFFERED ITS EQUIPMENT TO THE AIR FORCE DURING THIS PHASE BUT ONLY ON A RENTAL BASIS. THIS OFFER WAS DECLINED BY AIR FORCE BECAUSE IT HAD NO FUNDS AVAILABLE TO PAY FOR SUCH RENTAL. THE AIR FORCE REPORTS THAT THE DEVELOPMENT PHASE OF THE SYSTEM INCLUDED NOT ONLY THE EQUIPMENT TO BE PROCURED, BUT ALSO A MULTI-PURPOSE REPORTING DOCUMENT OR FORM WHICH WOULD BE CAPABLE OF REPORTING EVERY TYPE OF TRANSACTION THAT TAKES PLACE AT A BASE WITH REGARD TO AVIATION FUEL AND OIL, INCLUDING RECEIPTS, STORAGE CAPACITY, INVENTORY, BULK SHIPMENTS, ISSUES AND DEFUELS; THAT AS ORIGINALLY DEVELOPED THE FORM WAS TO CONTAIN TOTALIZER READINGS AT THE BOTTOM OF THE FORM; THAT THIS INFORMATION WAS REMOVED AS UNNECESSARY, LEAVING AN EMPTY SPACE AT THE BOTTOM; AND THAT THE DATE WAS THEN PLACED IN THE EMPTY SPACE. AIR FORCE STATES THAT IT HAD NO INFORMATION INDICATING THAT THERE WOULD BE ANY PROBLEM IN CONFORMING WITH THE DATE PLACEMENT AND THAT IT WAS LATER LEARNED THAT ALL MANUFACTURERS, INCLUDING FARRINGTON, HAD TO MODIFY THEIR STANDARD EQUIPMENT TO COMPLY WITH THIS REQUIREMENT. BY THAT TIME, HOWEVER, IT IS REPORTED THAT THE FORM (AF FORM 1238, AVFUELS TRANSACTION DOCUMENT) HAD BEEN PROCESSED THROUGH THE GOVERNMENT PRINTING OFFICE FOR PRINTING. THE PRINTING WAS ORDERED AT APPROXIMATELY THE SAME TIME THAT THE EQUIPMENT PROCUREMENT WAS ISSUED TO ASSURE THAT THE SYSTEM WOULD BE OPERATIVE BY OCTOBER 1, 1965, AS SCHEDULED.

THE 54 CHARACTER CAPACITY WAS SPECIFIED BY AIR FORCE TO PROVIDE AN EMBOSSER WITH FLEXIBILITY AND CAPACITY, SO THAT FUTURE PROGRAMS COULD MAKE USE OF THE MACHINE WITHOUT COSTLY MODIFICATION OR THE PURCHASE OF NEW EQUIPMENT.

THE PROCUREMENT WAS NEGOTIATED ON THE BASIS THAT THERE WAS NO FEDERAL SPECIFICATION ON THE ITEM BUT MERELY A GENERAL PURCHASE DESCRIPTION INSUFFICIENT TO PERMIT ADVERTISED BIDDING. AIR FORCE KNEW FROM THE DEVELOPMENT PHASE THAT THE FARRINGTON MODELS COULD MEET THE AIR FORCE REQUIREMENTS. THUS IT DEEMED IT ADVISABLE TO SPECIFY THE FARRINGTON BRAND NAME MODELS OR EQUAL TO ASSURE THAT THE REQUIREMENTS WOULD BE MET. EFFECT, BRAND NAME MODELS WERE REFERENCED FOR INFORMATIONAL PURPOSES. AGREE WITH THE GSA THAT THESE SPECIFICATIONS WERE NOT MISLEADING BY REFERENCE TO BRAND NAME MODELS AND WERE NOT UNDULY RESTRICTIVE. RATHER WE FIND THAT THE SPECIFICATIONS SET FORTH THE SALIENT CHARACTERISTICS OF THESE ITEMS AS PROPERLY DETERMINED BY THE USING ACTIVITY.

AIR FORCE DID NOT REQUIRE THAT THE CONTRACTOR MAINTAIN NATIONWIDE SERVICE CENTERS. IT PLANS TO STOCK EXTRA IMPRINTERS AT EACH BASE SO THAT IT CAN FOREGO THE NEED FOR IMMEDIATE MAINTENANCE BY THE CONTRACTOR.

FPR 1-6.104-4 CALLS FOR A 6-PERCENT FACTOR TO BE ADDED TO A FOREIGN BID OR PROPOSAL FOR PURPOSE OF EVALUATION, EXCEPT THAT A 12-PERCENT FACTOR IS TO BE USED IF THE FIRM SUBMITTING THE LOW ACCEPTABLE DOMESTIC BID IS A SMALL BUSINESS OR A LABOR SURPLUS AREA CONCERN. THE 12 PERCENT DIFFERENTIAL WAS APPLIED ON THE BASIS THAT DASHEW WAS A SMALL BUSINESS CONCERN. IT DEVELOPED THAT ADDRESSOGRAPH, A LARGE BUSINESS CONCERN, HAD SUBMITTED THE LOWEST ACCEPTABLE DOMESTIC BID RATHER THAN DASHEW. WE HAVE NO INFORMATION REGARDING THE CLASSIFICATION OF THE AREAS OF PERFORMANCE PROPOSED BY ADDRESSOGRAPH. IN ANY EVENT, FARRINGTON'S AWARD PRICE OF $370,744.44 WAS MORE THAN 12 PERCENT BELOW ADDRESSOGRAPH'S ACCEPTABLE PRICE OF $438,074.15.

ACTUALLY, WITH THE BUY AMERICAN DIFFERENTIAL ADDED FARRINGTON WAS NOT LOW ON THE EMBOSSER ALONE. FPR 1-6.104-4 (B) PROVIDES THAT THE APPROPRIATE BUY AMERICAN FACTOR "SHALL BE APPLIED ON AN ITEM-BY-ITEM BASIS, EXCEPT THAT THE FACTOR MAY BE APPLIED TO ANY GROUP OF ITEMS AS TO WHICH THE INVITATION FOR BIDS OR REQUEST FOR PROPOSALS SPECIFICALLY PROVIDES THAT AWARD IS TO BE MADE ON A PARTICULAR GROUP OF ITEMS.' THIS INVITATION CALLED FOR AN AGGREGATE AWARD COVERING ITEMS 1 THROUGH 5. THE AIR FORCE REQUESTED A "PACKAGE" AWARD TO ONE CONTRACTOR IN ORDER TO ASSURE COMPATIBILITY AND STANDARDIZATION OF EQUIPMENT. ACCORDINGLY, THE DIFFERENTIAL WAS PROPERLY APPLIED TO THE AGGREGATE OR TOTAL PRICE.

FARRINGTON HAS COMPLETED DELIVERY ON THIS CONTRACT. YOU QUESTION WHETHER THE CONTRACTOR HAS FURNISHED ITS "NO. 867 "AUTOMATIC" TICKET WRITER" AS REQUIRED. IN THIS CONNECTION, IT IS NOTED THAT FARRINGTON INSERTED ITS MODEL "NO. 867" IN ITS PROPOSAL. WE ARE IN RECEIPT OF A LETTER DATED NOVEMBER 1, 1965, FROM FARRINGTON ADDRESSED TO THE GENERAL SERVICES ADMINISTRATION STATING THAT WHERE MENTION WAS MADE OF ONLY THE "NO. 867" IN THE SUBMISSION, IT WAS CLEARLY UNDERSTOOD THAT IT WAS THE TICKET WRITER SERIES AS SPECIFIED. MR. HUGH W. HAMMOND OF THE DEPARTMENT OF THE AIR FORCE HAS ADVISED US THAT THE DELIVERED FARRINGTON IMPRINTERS DO MEET THE SPECIFICATION REQUIREMENTS.