B-157086, MAY 9, 1966

B-157086: May 9, 1966

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TO AMPEX CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24. A BRIEF RESUME OF THE FACTS GIVING RISE TO YOUR PROTEST AND THE DEPARTMENT'S VIEWS THEREON ARE SET FORTH AS FOLLOWS IN A REPORT DATED SEPTEMBER 23. DEPARTMENT OF THE ARMY: "TWO INVITATIONS FOR BID (IFB-S) ARE INVOLVED. THE PROPOSED PROCUREMENT (UNDER BOTH IFB-S) WAS ESTABLISHED AS A CONSTRUCTION CONTRACT AGAINST OPERATIONS AND MAINTENANCE (O AND MA) FUNDS. AMPEX WAS LOW ON THE FIRST IFB. ITS BID WAS REJECTED AS NONRESPONSIVE BECAUSE THE CONTRACTING OFFICER RULED THAT THE AMPEX REPRESENTATION CONCERNING MATERIALS OF FOREIGN ORIGIN WERE (SIC) NOT IN ACCORDANCE WITH THE PROVISIONS OF THE BUY AMERICAN ACT INCLUDED IN THE IFB.

B-157086, MAY 9, 1966

TO AMPEX CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24, 1965, AND SUPPLEMENTARY LETTERS PROTESTING AGAINST THE REJECTION OF YOUR BID AS NONRESPONSIVE UNDER INVITATION FOR BIDS (IFB) NO. AIV 41-014-65-109, ISSUED ON APRIL 20, 1965, BY THE PURCHASING AND CONTRACTING OFFICE, FORT BLISS, TEXAS, FOR INSTALLATION OF A CLOSED CIRCUIT EDUCATIONAL TELEVISION SYSTEM AT THAT STATION, AND AGAINST THE SUBSEQUENT CANCELLATION OF THAT IFB AND READVERTISEMENT OF THE PROCUREMENT UNDER IFB NO. AIV 41-014-65-151 DATED JUNE 18, 1965.

A BRIEF RESUME OF THE FACTS GIVING RISE TO YOUR PROTEST AND THE DEPARTMENT'S VIEWS THEREON ARE SET FORTH AS FOLLOWS IN A REPORT DATED SEPTEMBER 23, 1965, FROM THE DIRECTOR OF PROCUREMENT, HEADQUARTERS, DEPARTMENT OF THE ARMY:

"TWO INVITATIONS FOR BID (IFB-S) ARE INVOLVED. IFB AIV 41-014-65 109, DATED 20 APRIL 1965, OPENED 9 JUNE 1965 AND IFB AIV 41-014-65 151, DATED 18 JUNE 1965, OPENED 22 JUNE 1965. THE PROPOSED PROCUREMENT (UNDER BOTH IFB-S) WAS ESTABLISHED AS A CONSTRUCTION CONTRACT AGAINST OPERATIONS AND MAINTENANCE (O AND MA) FUNDS. AMPEX WAS LOW ON THE FIRST IFB, BUT ITS BID WAS REJECTED AS NONRESPONSIVE BECAUSE THE CONTRACTING OFFICER RULED THAT THE AMPEX REPRESENTATION CONCERNING MATERIALS OF FOREIGN ORIGIN WERE (SIC) NOT IN ACCORDANCE WITH THE PROVISIONS OF THE BUY AMERICAN ACT INCLUDED IN THE IFB. THE OTHER BIDDER'S PRICE (RCA) WAS HELD TO BE UNREASONABLE AND THE IFB WAS SUBSEQUENTLY CANCELLED. THE SECOND IFB HAD TWO RESPONSIVE BIDS, RCA WAS LOW, AND AMPEX IS PROTESTING ON THE GROUNDS THAT IT SHOULD HAVE RECEIVED THE AWARD UNDER THE FIRST IFB.

"IT IS THE OPINION OF THE ARMY THAT THE AMPEX BID UNDER THE FIRST IFB SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE. THE FOREIGN ITEMS IDENTIFIED BY AMPEX (AMPLIFIERS AND A FILM CAMERA) WERE SUPPLY COMPONENTS AND NOT CONSTRUCTION MATERIAL. SINCE THE PROPOSED CONTRACT WAS FOR THE PURCHASE AND INSTALLATION OF SUPPLIES, RATHER THAN CONSTRUCTION, AMPEX SHOULD NOT HAVE BEEN REQUIRED TO IDENTIFY THE COST OF DOMESTIC ITEMS (UNDER ASPR 6-204.2) BUT SHOULD HAVE BEEN CONSIDERED UNDER THE APPROPRIATE BUY AMERICAN CLAUSE IN ASPR 6-104.5.

"ALTHOUGH THE ARMY BELIEVES THAT THE AMPEX BID SHOULD NOT HAVE BEEN REJECTED, THERE ARE PROBLEMS ATTENDANT TO SUSTAINING THE AMPEX PROTEST. THE FILE REVEALS THAT THE ENTIRE PROPOSED CONTRACT WAS ESTABLISHED AS A CONTRACT FOR CONSTRUCTION, CONTAINING THE VARIOUS REQUIRED FORMS AND CLAUSES (E.G., SFS 19-A, 21, 22, 23, 23 (A) ET AL) AND THAT APPROXIMATELY $233,000 OF O AND MA FUNDS WERE INTENDED TO BE USED. FURTHER, A LARGE PART OF THIS AMOUNT WAS FOR THE PURCHASE OF T.V. SUPPLIES AND EQUIPMENT INCLUDING CAMERAS, CABLE, POWER SUPPLIES AND TERMINALS. SINCE THE MAIN PORTION OF THE PROJECT IS PURCHASE OF SUPPLIES THERE IS A QUESTION AS TO WHETHER THE PROPOSED CONSTRUCTION CONTRACT MEETS THE APPLICABLE REQUIREMENTS OF LAW, ASPR AND ARMY PROCEDURES. IN THE CIRCUMSTANCES, IT APPEARS THAT THE PROPOSED CONSTRUCTION CONTRACT SHOULD HAVE BEEN TREATED AS A SUPPLY CONTRACT WITH INCIDENTAL CONSTRUCTION SERVICES.'

WHILE THE ABOVE REPORT EXPRESSES AGREEMENT WITH YOUR CONTENTION THAT A PROPER APPLICATION OF THE PROVISIONS OF THE BUY AMERICAN ACT (41 U.S.C. 10A-D) AS IMPLEMENTED BY EXECUTIVE ORDER NO. 10582, DECEMBER 17, 1954, AND THE ARMED SERVICES PROCUREMENT REGULATION, DID NOT REQUIRE REJECTION OF YOUR BID, A TECHNICAL EVALUATION BY FORT BLISS PERSONNEL FOUND YOUR BID TO BE TECHNICALLY NONRESPONSIVE TO SEVERAL OF THE IFB SPECIFICATIONS. SUCH EVALUATION WAS SUBSEQUENTLY REVIEWED BY THE TV-INFORMATION DISPLAY DIVISION, PICTORIAL AND AUDIO-VISUAL DIRECTORATE, OFFICE, CHIEF OF COMMUNICATIONS AND ELECTRONICS, DEPARTMENT OF THE ARMY, WHICH CONCURRED IN THE CONCLUSION REACHED BY THE TECHNICAL PERSONNEL AT FORT BLISS THAT YOUR BID WAS TECHNICALLY NONRESPONSIVE IN SEVERAL MATERIAL AREAS.

YOU HAVE CONSISTENTLY MAINTAINED THAT YOUR BID WAS RESPONSIVE TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION, AND ON FEBRUARY 16, 1966, A MEETING BETWEEN ARMY AND AMPEX REPRESENTATIVES WAS HELD IN THE OFFICE OF THE DEPUTY CHIEF OF STAFF, LOGISTICS, HEADQUARTERS FOURTH U.S. ARMY, FORT SAM HOUSTON, TEXAS, TO DISCUSS THE AREAS IN WHICH YOUR BID WAS CONSIDERED TO BE TECHNICALLY DEFICIENT BY ARMY PERSONNEL.

THE DEPARTMENT'S REPORT ON THAT MEETING INCLUDES THE FOLLOWING COMMENTS:

"2. IMMEDIATELY FOLLOWING THE MEETING, IT WAS AGREED BETWEEN ARMY AND AMPEX CORPORATION REPRESENTATIVES THAT COPIES OF THE TRANSCRIPT OF NOTES TAKEN AT THE MEETING WOULD BE MAILED TO THE AMPEX CORPORATION IN DALLAS, TEXAS FOR REVIEW AND COMMENT BEFORE FORWARDING IT THROUGH CHANNELS TO THE COMPTROLLER GENERAL OF THE UNITED STATES. FOUR COPIES OF THE TRANSCRIPT WERE AIR-MAILED TO THE AMPEX CORPORATION, DALLAS, TEXAS ADDRESS ON 7 MAR 66. AMPEX CORPORATION WAS INVITED TO REVIEW THE TRANSCRIPT AND TO MAKE MARGINAL NOTATIONS ON ONE COPY INDICATING ANY SUGGESTED REVISIONS WHICH IN THE OPINION OF AMPEX CORPORATION REPRESENTATIVES WOULD CONTRIBUTE TO ACCURACY AND COMPLETENESS (SIC) OF THE PAPER. AMPEX CORPORATION WAS REQUESTED TO RETURN THE TRANSCRIPT WITH THEIR COMMENTS AT THE EARLIEST CONVENIENCE OF AMPEX CORPORATION IN ORDER THAT THE FINAL TRANSCRIPT, APPROVED BY BOTH PARTIES, COULD BE FORWARDED TO THE COMPTROLLER GENERAL OF THE UNITED STATES AS A FACTUAL AID TO THAT OFFICE. INSTEAD OF FOLLOWING THE PLAN AGREED UPON AT THE 25 FEB 66 MEETING, AMPEX CORPORATION SENT A LETTER, DATED 3 MAR 66, TO THE COMPTROLLER GENERAL OF THE UNITED STATES, SETTING OUT ITS VERSION OF THE MEETING, WHICH IS HIGHLY COLORED IN ITS FAVOR AND SAYS NOTHING ADDITIONAL TO OR DIFFERENT FROM ITS PREVIOUS LETTER. FOUR COPIES OF THE 3 MAR 66 LETTER ARE INCLOSED (INCLOSURE 3).

"3. IT IS NOTED THAT THE AMPEX CORPORATION LETTER OF 3 MAR 66 MAKES NO MENTION OF ITEMS CLEARLY REQUIRED BY THE GOVERNMENT SPECIFICATIONS AND LEFT OUT OF THE AMPEX CORPORATION BID. ITEMS OMITTED FROM THE EQUIPMENT LIST AND DESCRIPTIVE DATA SUBMITTED WITH THE AMPEX CORPORATION BID ARE THE GRATING GENERATOR AND THE MASTER MONITOR FOR THE FILM CHAIN. ALSO, NO COMMENT IS MADE CONCERNING THE SINGLE OPTICAL OUTPUT MULTIPLEXER LISTED IN THE AMPEX BID ALTHOUGH TWO OUTPUTS ARE REQUIRED BY THE SPECIFICATIONS. IS CONSIDERED THAT THE BID OF AMPEX CORPORATION WAS NOT INTENDED TO COMPLY WITH THE SPECIFICATIONS OR AN EQUAL, BUT TO FURNISH THE ARMY WHAT AMPEX CORPORATION DETERMINED WAS REQUIRED. AMPEX CORPORATION FAILED TO SATISFACTORILY EXPLAIN WHY ITS BID WAS NOT BASED ON FURNISHING THE EIGHT (8) CHANNEL GATES CONSOLE (WHICH WOULD HAVE MET THE SPECIFICATIONS) IN LIEU OF THE FOUR (4) CHANNEL OR WHY AN AVAILABLE CURRENT MODEL TELEVISION RECEIVER MEETING THE SPECIFICATIONS WAS NOT OFFERED.'

IN VIEW OF THE FOREGOING, IT WOULD APPEAR THERE IS A SUBSTANTIAL BASIS FOR THE DEPARTMENT'S CONCLUSION YOUR BID WAS NONRESPONSIVE. HOWEVER, IRRESPECTIVE OF WHETHER YOUR BID WAS RESPONSIVE TO THE MATERIAL REQUIREMENTS OF THE INVITATION, IT IS TO BE NOTED THAT THE PROCUREMENT PERTAINS NOT ONLY TO A PURCHASE OF SUPPLIES BUT ALSO REQUIRES CERTAIN WORK OF A CONSTRUCTION NATURE (ESTIMATED AT $40,000) WHICH IS FUNCTIONALLY AND PERFORMANCE WISE SEPARATE FROM THE MAIN PROCUREMENT. AS STATED IN ARMY'S REPORT OF SEPTEMBER 23, 1965, THE PROPOSED CONTRACT CONTAINED VARIOUS FORMS PERTAINING TO CONSTRUCTION WORK, SUCH AS STANDARD FORM 19-A, LABOR STANDARDS PROVISIONS, WHICH INCORPORATES AND REQUIRES AS AN ATTACHMENT UNDER PARAGRAPH 1 (DAVIS BACON ACT, 40 U.S.C. 276A-A (7) (, THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR CONCERNING THE PREVAILING WAGES TO BE PAID LABORERS AND MECHANICS. SUCH LABOR STANDARD PROVISIONS ARE MADE APPLICABLE TO SUPPLY CONTRACTS BY ASPR 12-402.2 WHEN, AS HERE, THE CONTRACTS INVOLVE SUBSTANTIAL AMOUNTS OF CONSTRUCTION WORK THAT IS CAPABLE OF BEING PERFORMED ON A SEGREGATED BASIS FROM THE OTHER WORK REQUIRED BY THE CONTRACT.

DEPARTMENT OF LABOR DECISION NO. AD 18,709, WHICH WAS INCORPORATED IN IFB NO. AIV 41-014-65-109, AS AMENDED, AND WHICH PRESCRIBED THE MINIMUM RATES OF WAGES FOR BUILDINGS, ROADS AND UTILITIES, ETC., AT FORT BLISS AND BIGGS AIR FORCE BASE, EL PASO COUNTY, TEXAS, WAS DATED MAY 12, 1965, AND EXPIRED ON JULY 8, 1965. SUCH DECISION WAS ALSO MADE A PART OF IFB NO. AIV 41-014 -65-151 DATED JUNE 18, 1965.

THE EFFECT OF THE EXPIRATION OF THE WAGE RATE DETERMINATION INCLUDED IN AN INVITATION ON ANY POSSIBLE SUBSEQUENT AWARD OF A VALID CONTRACT UNDER THAT INVITATION, IS DISCUSSED AND SET FORTH IN OUR DECISION OF DECEMBER 13, 1965, B-157615, 45 COMP. GEN. ------, AS FOLLOWS:

"THE DAVIS-BACON ACT, AS AMENDED, SUPRA, REQUIRES ADVERTISED SPECIFICATIONS FOR CONTRACTS IN EXCESS OF $2,000 FOR CONSTRUCTION, ALTERATION OR REPAIR OF PUBLIC WORKS TO SET OUT MINIMUM WAGES TO BE PAID LABORERS AND MECHANICS BASED UPON WAGES "THAT WILL BE DETERMINED BY THE SECRETARY OF LABOR TO BE PREVAILING" IN THE AREA. WE HAVE HELD THAT, AS A GENERAL RULE, THE MINIMUM WAGE RATES SO REQUIRED CANNOT BE INCORPORATED IN A CONTRACT IN ANY WAY OTHER THAN AS SPECIFIED IN THE ACT--- THAT IS BY INCLUSION IN THE SPECIFICATIONS UPON WHICH BIDS LEADING TO THE CONTRACT WERE INVITED. SEE 40 COMP. GEN. 565; 42 ID. 410.

"IN IMPLEMENTING THE MANDATE OF THE ACT THE SECRETARY OF LABOR HAS PROMULGATED REGULATIONS WITH RESPECT TO SUCH DETERMINATIONS. AMONG OTHER THINGS, SECTION 5.4 (A) OF THE DEPARTMENT OF LABOR REGULATIONS PROVIDES THE FOLLOWING:

"/A) WAGE DETERMINATIONS INITIALLY ISSUED SHALL BE EFFECTIVE FOR 120 CALENDAR DAYS FROM THE DATE OF SUCH DETERMINATIONS. IF SUCH A WAGE DETERMINATION IS NOT USED IN THE PERIOD OF ITS EFFECTIVENESS, IT IS VOID.

"WE BELIEVE THAT, IMPLICIT IN THE STATUTORY REQUIREMENT THAT THE SECRETARY MAKE SUCH DETERMINATIONS, IS THE AUTHORIZATION TO IMPOSE REASONABLE LIMITATIONS ON THE TIME WITHIN WHICH HIS WAGE DETERMINATIONS MAY BECOME EFFECTIVE AS CONTRACT CONDITIONS. AS A GENERAL RULE, IF A WAGE DETERMINATION BECOMES VOID BY VIRTUE OF THE ABOVE REGULATION NO VALID CONTRACT AWARD CAN BE MADE ON BIDS SUBMITTED ON ADVERTISED SPECIFICATIONS CONTAINING THE VOID DETERMINATION. 41 COMP. GEN. 593. THIS IS BECAUSE THE CONTRACT WOULD BE AWARDED ON THE BASIS OF EITHER NO WAGE DETERMINATION, OR A WAGE DETERMINATION OTHER THAN THE ONE ADVERTISED IN THE BID INVITATION, AND IN EITHER CASE, NOT IN ACCORDANCE WITH THE DAVIS- BACON ACT.'

ACCORDINGLY, SINCE THE RECORD DOES NOT INDICATE THAT AN EXTENSION TO THE EXPIRED WAGE DETERMINATION DECISION NO. AD 18,709, HAS BEEN REQUESTED AND GRANTED, WE PERCEIVE NO VALID BASIS UPON WHICH THE PROCUREMENT MAY BE EFFECTED UNDER EITHER IFB NO. AIV 41-014-65-109 OR IFB NO. AIV 41-014-65- 151. IN VIEW OF THE FOREGOING THE QUESTION OF WHETHER YOUR BID WAS IMPROPERLY REJECTED AS NONRESPONSIVE TO THE TECHNICAL REQUIREMENTS OF IFB NO. AIV 41-014-65-109 BECOMES ACADEMIC.

ALTHOUGH FOR THE FOREGOING REASONS WE ARE UNABLE TO SUSTAIN YOUR PROTEST, THE DEPARTMENT OF THE ARMY HAS INDICATED IN A REPORT OF APRIL 6, 1966, THAT IN SUCH EVENT ITS FUTURE ACTIONS IN THIS MATTER WILL BE AS FOLLOWS:

"IN VIEW OF THE FACT THAT THE PREVAILING WAGE RATE DETERMINATION USED IN IFB-151 HAS EXPIRED, AND AS A RESULT OF THE ADVANCES IN TECHNOLOGY THAT HAVE OCCURRED SINCE THE SPECIFICATIONS CONTAINED IN IFB-151 WERE DRAFTED, THE PROCURING ACTIVITY WAS AGAIN REQUESTED TO REVIEW THIS MATTER.

"AS A RESULT OF THIS REVIEW, THE SPECIFICATIONS WERE FOUND TO NOT ADEQUATELY DESCRIBE THE MINIMUM NEEDS OF THE GOVERNMENT TAKING INTO ACCOUNT THE CURRENT STATE OF THE ART. CONSEQUENTLY, HEADQUARTERS, UNITED STATES CONTINENTAL ARMY COMMAND NOW RECOMMENDS THAT IFB 41-014 65-151 BE CANCELLED, THE REQUIREMENT FOR THE CLOSED CIRCUIT TV SYSTEM BE REVIEWED, THE SPECIFICATIONS REVISED TO REFLECT THE CURRENT MINIMUM REQUIREMENTS OF THE ARMY, AND THAT BIDS BE RESOLICITED USING THE PROPER CONTRACT FORMAT.

"IN VIEW OF THE FOREGOING, IT IS RECOMMENDED THAT THE PROTEST BY AMPEX BE DENIED. THE ARMY WILL THEN CANCEL IFB 65-151 AND RESOLICIT BIDS FOR THIS PROCUREMENT UNDER REVISED SPECIFICATIONS WHICH REFLECT THE PRESENT STATE OF THE ART. RESOLICITATION OF THE REVISED REQUIREMENT WILL BE BASED ON THE GUIDANCE IN ASPR 12-402.2.'

BY LETTER OF TODAY WE ARE ADVISING THE DEPARTMENT OF THE ARMY OF THE DENIAL OF YOUR PROTEST, AND WE PRESUME THAT THE PROCUREMENT WILL BE READVERTISED AS STATED IN THAT DEPARTMENT'S REPORT OF APRIL 6.