B-157473, NOV. 23, 1956

B-157473: Nov 23, 1956

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LOLA DICKERMAN: FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF ELECTRO VOICE. THE ITEM WAS REQUIRED TO BE INCLUDED. THE TWO BIDS RECEIVED WERE OPENED ON AUGUST 2. THE ITEMS OFFERED BY BOTH BIDDERS WERE LISTED ON THE QUALIFIED PRODUCTS LISTS. SOME OF SUCH MICROPHONES WERE TESTED AND WERE FOUND NOT BE COMPLY WITH REQUIREMENTS. THE COMPANY WAS GIVEN THE OPPORTUNITY TO SUBMIT ADDITIONAL SAMPLES FOR TEST PURPOSES. THESE SAMPLES WERE TESTED AND FAILURES RESULTED. TELEPHONICS WAS NOTIFIED OF THE REMOVAL OF ITS PRODUCT FROM THE QUALIFIED PRODUCTS LIST. IT IS REPORTED THAT THE DEFECTS WERE SUCH AS MAY BE EASILY REMEDIED AND THAT CORRECTIONS. THE CONTRACTING OFFICER DETERMINED THAT THE PRICE OF $17.10 EACH QUOTED BY ELECTRO VOICE WAS UNREASONABLE AND CANCELLED THE INVITATION.

B-157473, NOV. 23, 1956

TO MRS. LOLA DICKERMAN:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF ELECTRO VOICE, INCORPORATED, IN CONNECTION WITH INVITATION FOR BIDS NO. 383-59 66, ISSUED BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

THE INVITATION, ISSUED ON JULY 16, 1965, REQUESTED BIDS FOR FURNISHING 18,038 DYNAMIC MICROPHONES, M-92A/U, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-M-21393A AND AMENDMENTS 1 AND 2. THE ITEM WAS REQUIRED TO BE INCLUDED, OR ELIGIBLE FOR INCLUSION, ON THE APPLICABLE QUALIFIED PRODUCTS LIST PRIOR TO THE TIME SET FOR THE OPENING OF THE BIDS.

THE TWO BIDS RECEIVED WERE OPENED ON AUGUST 2, 1965, AS SCHEDULED. TELEPHONICS, A DIVISION OF INSTRUMENT SYSTEMS CORPORATION, QUOTED A PRICE OF $13.475 EACH, AND ELECTRO-VOICE QUOTED A PRICE OF $17.10 EACH. THE ITEMS OFFERED BY BOTH BIDDERS WERE LISTED ON THE QUALIFIED PRODUCTS LISTS.

APPARENTLY AS A RESULT OF ELECTOR-VOICE'S PROTEST AGAINST AN AWARD TO TELEPHONICS ON THE BASIS THAT MICROPHONES FURNISHED BY TELEPHONICS UNDER A PRIOR CONTRACT DID NOT MEET SPECIFICATION REQUIREMENTS, SOME OF SUCH MICROPHONES WERE TESTED AND WERE FOUND NOT BE COMPLY WITH REQUIREMENTS. HOWEVER, SINCE TELEPHONICS TECHNICALLY COMPLIED WITH THE STATED CONDITIONS OF INVITATION FOR BIDS NO. 383-59-66 THAT THE MICROPHONE BE LISTED ON THE QUALIFIED PRODUCTS LIST, THE COMPANY WAS GIVEN THE OPPORTUNITY TO SUBMIT ADDITIONAL SAMPLES FOR TEST PURPOSES. THESE SAMPLES WERE TESTED AND FAILURES RESULTED. THEREFORE, BY WIRE DATED OCTOBER 19, 1965, TELEPHONICS WAS NOTIFIED OF THE REMOVAL OF ITS PRODUCT FROM THE QUALIFIED PRODUCTS LIST. HOWEVER, IT IS REPORTED THAT THE DEFECTS WERE SUCH AS MAY BE EASILY REMEDIED AND THAT CORRECTIONS, RETEST, AND INCLUSION OF A TELEPHONICS UNIT ON THE QUALIFIED PRODUCTS LIST COULD WELL BE EFFECTED WITHIN THE VERY NEAR FUTURE.

ON OCTOBER 22, 1965, ON THE BASIS OF THE PRICES PREVIOUSLY BID BY ELECTRO -VOICE AND TELEPHONICS FOR THE MICROPHONES, THE CONTRACTING OFFICER DETERMINED THAT THE PRICE OF $17.10 EACH QUOTED BY ELECTRO VOICE WAS UNREASONABLE AND CANCELLED THE INVITATION.

IN THE MEANWHILE, THE NEED FOR THE MICROPHONES INCREASED AND THE NEED FOR SOME BECAME URGENT. ON OCTOBER 26, 1965, INVITATION FOR BIDS NO. 383-654- 66 WAS ISSUED FOR A QUANTITY OF 21,281 MICROPHONES M-92A/U, WITH AN OPENING DATE OF NOVEMBER 29, 1965. IN ADDITION TO THE QUANTITY TO BE PROCURED BY FORMAL ADVERTISING REQUEST FOR PROPOSALS 383/703549/66 FOR 6,353 UNITS WAS ALSO ISSUED ON OCTOBER 26, 1965, WITH A CLOSING DATE OF NOVEMBER 5, 1965, FOR PROCUREMENT BY NEGOTIATION IN ORDER TO MEET THE EMERGENCY REQUIREMENTS.

YOU NOW PROTEST THE CANCELLATION OF THE ORIGINAL INVITATION AND THE ISSUANCE OF THE NEW INVITATION FOR BIDS. IT IS URGED THAT THE REQUEST FOR PROPOSALS COULD BE ALLOWED TO STAND IN ORDER TO MEET THE EMERGENCY REQUIREMENTS, WHICH ARE STATED TO HAVE BEEN BROUGHT ABOUT TO GREAT EXTENT, BY THE OVERLY LIBERAL ACTION TAKEN IN ATTEMPTING TO ALLOW TELEPHONICS TO QUALIFY ITS UNIT, AND THAT THE NORMAL NEEDS COULD BE MET BY REINSTATING THE ORIGINAL INVITATION. IN THIS CONNECTION, IT IS CONTENDED THAT ELECTRO -VOICE LOST MONEY UNDER A PRIOR CONTRACT AT $15 PER UNIT; THAT A COMPARISON OF ELECTRO-VOICE'S PRICES WITH TELEPHONICS' IS NOT PROPER SINCE THE TELEPHONICS UNIT DOES NOT MEET SPECIFICATION REQUIREMENTS AND THAT THE PRICE OF $17.10 QUOTED BY ELECTRO-VOICE IS A FAIR AND REASONABLE PRICE FOR A QUALITY PRODUCT.

IN SUPPORT OF YOUR CONTENTION, YOU REFER TO ASPR 2-404.1 WHICH SAYS "THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION.' ALSO, YOU REFER TO THE QUOTE FROM THE COURT OF CLAIMS CITED IN 39 COMP. GEN. 396, 399, AS FOLLOWS: "TO HAVE A SET OF BIDS DISCARDED AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE IS A SERIOUS MATTER, AND IT SHOULD NOT BE PERMITTED EXCEPT FOR COGENT REASONS.' MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699, AT 719.

IT IS TO BE NOTED THAT IT WAS ALSO STATED IN 39 COMP. GEN. 396, THAT THE AUTHORITY VESTED IN THE CONTRACTING OFFICER TO REJECT ANY OR ALL BIDS AND READVERTISE IS EXTREMELY BROAD AND ORDINARILY SUCH ACTION WILL NOT BE QUESTIONED BY OUR OFFICE. IN THE ABSENCE OF A SHOWING OF ARBITRARY OR CAPRICIOUS ACTION, FAVORITISM, OR A COMPLETE DISREGARD OF FACTS OR LAW, WE WOULD NOT BE WARRANTED IN HOLDING THAT THE EXERCISE OF SUCH AUTHORITY WAS ILLEGAL.

IN THE INSTANT CASE TELEPHONICS OFFERED TO FURNISH A UNIT FULLY IN ACCORDANCE WITH THE REQUIREMENTS OF THE SPECIFICATION, EVEN THOUGH IT WAS SUBSEQUENTLY FOUND THAT THE ITEM IT WAS THEN FURNISHING DID MEET REQUIREMENTS. TELEPHONICS MAY HAVE BEEN GIVEN MORE THAN AN AMPLE OPPORTUNITY TO BRING ITS ITEM UP TO SPECIFICATION REQUIREMENTS. HOWEVER, WE CANNOT SAY THAT SUCH ACTION AMOUNTED TO UNLAWFUL FAVORITISM, PARTICULARLY IN VIEW OF ITS FAVORABLE BID PRICE AND AN APPARENT DESIRE TO HAVE MORE THAN ONE SOURCE FOR THE MICROPHONES. ALSO, WHILE A COMPARISON OF TELEPHONICS' PRICES WITH THOSE OF ELECTRO VOICE'S MAY BE SUSPECT UNDER THE CIRCUMSTANCES, NEVERTHELESS WE CANNOT SAY THAT SUCH COMPARISON WAS WITHOUT FOUNDATION SINCE IT IS REPORTED THAT THE DEFECTS FOUND IN THE TELEPHONICS UNIT COULD BE EASILY REMEDIED. FURTHERMORE, AT THE TIME OF THE REJECTION OF ALL BIDS AND CANCELLATION OF THE INVITATION, THE NEEDS OF THE GOVERNMENT FOR THE MICROPHONES HAD CHANGES TO A SUBSTANTIAL EXTENT.

FOR THE FOREGOING REASONS, WE FIND NO LEGAL BASIS TO OBJECT TO THE REJECTION OF ALL BIDS UNDER INVITATION 383-59-66 AND, THEREFORE, YOUR PROTEST MUST BE DENIED. ELECTRO-VOICE WILL, OF COURSE, HAVE AN OPPORTUNITY TO BID UNDER THE READVERTISEMENT.