B-158197, APR. 5, 1966

B-158197, APR. 5, 1966

TO THE PIONEER PARACHUTE COMPANY, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX DATED DECEMBER 16, 1965, AND TO YOUR MEMORANDUM PROTESTING THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. 41-608-66-279 ISSUED ON OCTOBER 12, 1965, BY THE SAN ANTONIO AIR MATERIEL AREA,KELLY AIR FORCE BASE, TEXAS.

THE INVITATION SOLICITED BIDS ON INCREMENTAL QUANTITIES, RANGING FROM 1,000 TO 5,999, OF PARACHUTE SYSTEMS, CARGO, TYPE A/B28H-6, 16 FOOT DIAMETER, AIR FORCE PART NUMBER 58D6362-1 IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-P-25716C (USAF) AND AMENDMENT NO. 2 THERETO DATED APRIL 9, 1964. PARAGRAPH 3.1 OF SAID SPECIFICATION PROVIDES:

"QUALIFICATION.--- THE PARACHUTE SYSTEM FURNISHED UNDER THIS SPECIFICATION SHALL BE A PRODUCT WHICH HAS BEEN TESTED, AND HAS PASSED THE QUALIFICATION TESTS SPECIFIED HEREIN, AND HAS BEEN LISTED ON OR APPROVED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST.'

AT THE TIME THE INVITATION WAS ISSUED THREE KNOWN SOURCES WERE QUALIFIED; NAMELY, PIONEER PARACHUTE COMPANY, INCORPORATED, SWITLIK PARACHUTE COMPANY, INCORPORATED, AND STEINTHAL AND COMPANY, INCORPORATED. SINCE A QUALIFIED SOURCE WAS REQUIRED AND IN ORDER TO PLACE ALL BIDDERS ON NOTICE THAT PRIOR QUALIFICATION WAS AN ESSENTIAL REQUIREMENT OF THE SPECIFICATIONS THERE WAS INCLUDED ON PAGE 1 OF SECTION I OF THE INVITATION SCHEDULE THE REQUIRED ASPR 1-1107.2 (A) PROVISION ENTITLED "NOTICE - QUALIFIED END PRODUCTS (JAN 1965)" WHICH READS AS FOLLOWS:

"AWARDS FOR ANY END ITEMS WHICH ARE REQUIRED TO BE QUALIFIED PRODUCTS WILL BE MADE ONLY WHEN SUCH ITEMS HAVE BEEN TESTED AND HAVE QUALIFIED FOR INCLUSION IN A QUALIFIED PRODUCTS LIST IDENTIFIED BELOW (WHETHER OR NOT ACTUALLY INCLUDED IN THE LIST) BEFORE THE TIME SET FOR OPENING OF BIDS, OR THE TIME OF AWARD IN THE CASE OF NEGOTIATED CONTRACTS. OFFERORS SHOULD CONTACT THE OFFICE DESIGNATED BELOW TO ARRANGE TO HAVE THE PRODUCTS WHICH THEY INTEND TO OFFER TESTED FOR QUALIFICATION.

"THE OFFEROR SHALL INSERT THE ITEM NAME AND THE TEST NUMBER (IF KNOWN) OF EACH QUALIFIED PRODUCT IN THE BLANK SPACES BELOW. ITEM NAME ------------- ----------- TEST NO. -------------------- --------------- ----------------

"OFFERORS OFFERING PRODUCTS WHICH HAVE BEEN TESTED AND QUALIFIED, BUT WHICH ARE NOT YET LISTED, ARE REQUESTED TO SUBMIT EVIDENCE OF SUCH QUALIFICATION WITH THEIR BIDS OR PROPOSALS, SO THAT THEY MAY BE GIVEN CONSIDERATION. IF THIS IS A FORMALLY ADVERTISED PROCUREMENT, ANY BID WHICH DOES NOT IDENTIFY THE QUALIFIED PRODUCT BEING OFFERED, EITHER ABOVE OR ELSEWHERE IN THE BID, WILL BE REJECTED.

"QUALIFIED PRODUCTS LIST NR. 25716-7 DATED 27 AUGUST 1962 IS INVOLVED AS CONTEMPLATED BY SPECIFICATION MIL-P-25716C (USAF)

AND AMEND 2 DTD

9 APR 64.'

THE PROCUREMENT WAS SYNOPSIZED AND COPIES OF THE INVITATION FOR BIDS WERE SENT TO 15 SOURCES. FOUR BIDS WERE RECEIVED AND PUBLICLY OPENED ON NOVEMBER 23, 1965, AS SCHEDULED.

SECURITY PARACHUTE COMPANY, WHO OFFERED A UNIT PRICE OF $574.20 NET ON ALL INCREMENTS WAS THE APPARENT LOW BIDDER. THIS BIDDER, HOWEVER, WAS NOT LISTED ON THE QUALIFIED PRODUCTS LIST FOR THE ITEM AND IT WAS ASCERTAINED THAT THE BIDDER HAD NOT RECEIVED QUALIFICATION APPROVAL PRIOR TO BID OPENING. THE BID INDICATED THAT THE PLACE OF MANUFACTURE WOULD BE AT THE COMPANY'S PLANT IN SAN LEANDRO, CALIFORNIA, AND THAT NO SUBCONTRACTING WAS CONTEMPLATED. THEREFORE IT WAS DETERMINED THAT THE BID COULD NOT BE CONSIDERED FOR AWARD SINCE THE BIDDER COULD NOT COMPLY WITH PARAGRAPH 3.1 OF THE SPECIFICATIONS AND THE FIRST PARAGRAPH OF THE PROVISION ENTITLED "NOTICE-QUALIFIED END PRODUCTS.'

THE NEXT TWO APPARENT LOW BIDDERS WERE SWITLIK PARACHUTE COMPANY AND M. STEINTHAL AND COMPANY, WHO OFFERED UNIT PRICES OF $625 LESS A DISCOUNT OF 1 PERCENT-10 DAYS, AND $648.37 NET, ON ALL INCREMENTS, RESPECTIVELY. BOTH OF THESE BIDDERS ARE LISTED ON THE CURRENT QUALIFIED PRODUCTS LIST FOR THE PARTICULAR PARACHUTE SYSTEM COVERED BY THE SPECIFICATIONS INVOLVED. HOWEVER, BOTH BIDDERS FAILED TO FILL IN THE BLANKS PROVIDED IN THE "QUALIFIED END PRODUCTS" CLAUSE QUOTED ABOVE. THE BID OF SWITLIK PARACHUTE COMPANY DID STATE, NEVERTHELESS, THAT THE ITEM WOULD BE PRODUCED AT THE COMPANY'S PLANT AT 1325 EAST STATE STREET, TRENTON, NEW JERSEY, AND THAT IT WAS PREDICATED UPON 0 PERCENT SUBCONTRACTING.

THE FOURTH AND HIGH BID WAS SUBMITTED BY YOUR COMPANY AND OFFERED A UNIT PRICE OF $718.50 NET ON ALL INCREMENTS. YOUR COMPANY FILLED OUT THE BLANKS OF THE "QUALIFIED END PRODUCTS" CLAUSE AND IS LISTED ON THE QUALIFIED PRODUCTS LIST FOR THE ITEM COVERED BY THE SPECIFICATIONS.

THE CONTRACTING OFFICER DETERMINED THAT SINCE SWITLIK'S BID TOOK NO EXCEPTIONS THE BID WAS AN UNQUALIFIED OFFER TO FURNISH A PARACHUTE SYSTEM "WHICH HAS BEEN TESTED, AND HAS PASSED THE QUALIFICATION TEST SPECIFIED HEREIN, AND HAS BEEN LISTED ON OR APPROVED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST" IN ACCORDANCE WITH PARAGRAPH 3.1 OF THE SPECIFICATIONS. IN VIEW THEREOF AND SINCE SWITLIK WAS LISTED ON THE APPLICABLE QUALIFIED PRODUCTS LIST FOR THE PARACHUTE SYSTEM REQUIRED IT WAS ALSO DETERMINED THAT THE FAILURE TO LIST THE ITEM NAMED AND THE TEST NUMBER WAS A MINOR INFORMALITY WHICH COULD BE WAIVED AND THAT THEREFORE SWITLIK'S BID WAS RESPONSIVE AND ELIGIBLE FOR AWARD.

YOU PROTEST THE DETERMINATIONS MADE BY THE CONTRACTING OFFICER AND RAISE THE QUESTION WHETHER A BID MAY BE RESPONSIVE AND AN AWARD MADE TO A BIDDER WHO FAILED TO INDICATE WHETHER THE ITEM HE WAS OFFERING WAS A QUALIFIED PRODUCT NOTWITHSTANDING THE GOVERNMENT'S AFFIRMATIVE INSTRUCTIONS TO THAT EFFECT IN THE INVITATION. IT IS CONTENDED THAT SWITLIK, BY NOT INSERTING THE QUALIFIED ITEM, ELECTED, EITHER BY CHOICE OR NEGLECT, TO BID ONLY ON AN UNQUALIFIED ITEM LEAVING ITSELF IN THE FAVORABLE AND ADVANTAGEOUS POSITION OF BEING ABLE TO REJECT OR ACCEPT AWARD FOR THE QUALIFIED TEM; AND THAT A BIDDER OFFERING AN UNQUALIFIED ITEM HAS A COMPETITIVE ADVANTAGE OVER A BIDDER OFFERING A QUALIFIED ITEM IN THAT HE HAS GREATER LEEWAY IN THE SELECTIONS OF VENDORS, ETC. IT IS THEREFORE URGED THAT THE FAILURE TO LIST THE QUALIFIED PRODUCT AFFECTS PRICE AND IS A MATERIAL REQUIREMENT WHICH MAY NOT BE WAIVED.

WE DO NOT AGREE THAT SWITLIK BID ON AN UNQUALIFIED ITEM, NOR DO WE AGREE THAT THE INVITATIONS REQUIRED THE LISTING OF THE ITEM NAME AND TEST NUMBER UNDER THE "QUALIFIED END PRODUCTS" CLAUSE.

THIS CLAUSE, QUOTED ABOVE, STATES THAT BIDDERS "SHALL INSERT THE ITEM NAME AND THE TEST NUMBER (IF KNOWN) OF EACH QUALIFIED PRODUCT.' FROM THE LANGUAGE USED (IF KNOWN), IT IS APPARENT THAT FAILURE TO INSERT THE TEST NUMBER WAS NOT INTENDED TO CONSTITUTE A MATERIAL DEFECT. BIDDERS WERE TOLD TO INSERT THE TEST NUMBER "IF KNOWN," THE OBVIOUS IMPLICATION BEING THAT IF A BIDDER DID NOT HAPPEN TO KNOW HIS TEST NUMBER (WHICH WAS, OF COURSE, KNOWN TO THE GOVERNMENT), HE NEED NOT INSERT IT. THIS MEANING OF THE LANGUAGE IS CORROBORATED BY THE FURTHER PROVISION IN THE CLAUSE THAT BIDS WOULD BE REJECTED, NOT FOR FAILURE TO GIVE THE TEST NUMBER, BUT FOR FAILURE TO ,IDENTIFY" THE QUALIFIED PRODUCT BEING OFFERED. THE CLAUSE APPEARS TO CONTEMPLATE THAT SUCH IDENTIFICATION WILL BE MADE PRIMARILY BY FILLING IN THE BLANK FOLLOWING THE "ITEM NAME.'

HOWEVER, THE CLAUSE CONTAINS AN EXCEPTION TO THE REQUIREMENT FOR FILLING IN THE "ITEM NAME" BLANK. IT PROVIDES FOR REJECTION OF A BID ONLY IF THE BID FAILS TO IDENTIFY THE PRODUCT OFFERED EITHER BY FILLING IN THAT BLANK OR ELSEWHERE IN THE BID. THE PRESENT INVITATION, ON THE VERY NEXT PAGE, IDENTIFIES THE PRODUCT TO BE BID UPON WITH COMPLETE SPECIFICITY. IT IS THERE DESCRIBED AS:

"PARACHUTE SYSTEM, CARGO, TYPE A/B28H-6, 16 FT. DIA. P/N 58D6362-1 (MOD) ASSY OF, IN ACCORDANCE WITH MIL SPEC MIL-P-25716C (USAF) AND AMEND 2 DTD 9 APR 64 * * *.' THE PRODUCT DESCRIPTION, AS FOUND IN QUALIFIED PRODUCTS LIST NO. 25716-7 LISTED IN THE "QUALIFIED END PRODUCTS" CLAUSE, IS AS FOLLOWS:

"PARACHUTE SYSTEM, HEAVY DUTY, GOVERNMENT DESIGNATION A/B28H-6 MANUFACTURER'S DESIGNATION 58D6362-1 UNDER MILITARY SPECIFICATION MIL P- 25716 * * *.'

THE QUALIFIED PRODUCT LIST (NO. 25716-7) LISTS STEINTHAL, SWITLIK, AND PIONEER AS MANUFACTURERS OF THIS PRODUCT AND EACH MANUFACTURER'S PRODUCT CARRIES IDENTICALLY NUMBERED GOVERNMENT DESIGNATION (A/B28H-6) AND MANUFACTURER'S DESIGNATION (58D6362-1). IN OTHER WORDS, IDENTIFICATION OF THE PRODUCT IN THE "ITEM NAME" BLANK OF THE CLAUSE BY SWITLIK OR STEINTHAL WOULD HAVE MEANT MERE REPETITION OF THE DESCRIPTION ON THE NEXT PAGE OF THE INVITATION (AS YOU DID IN YOUR BID), AND THE NUMBERS ON ALL THREE BIDS WOULD HAVE BEEN IDENTICAL.

IN THE LIGHT OF WHAT HAS BEEN SAID ABOVE, FAILURE TO FILL IN THE BLANKS IN THE "QUALIFIED END PRODUCTS" CLAUSE CANNOT BE CONSIDERED ANY BASIS FOR REJECTION OF A BID UNDER THE INSTANT INVITATION.

YOU HAVE RAISED THE ADDITIONAL QUESTION AS TO THE PROPRIETY OF REJECTING THE BID SUBMITTED BY SECURITY. WE AGREE WITH THE POSITION TAKEN IN THE BRIEF SUBMITTED BY YOUR ATTORNEY ON MARCH 29, 1966, THAT THE ONLY REAL DIFFERENCE BETWEEN THE SITUATION OF SECURITY AND SWITLIK IS THAT SWITLIK IS LISTED ON THE QUALIFIED PRODUCTS LIST FOR THE PARACHUTE BEING PROCURED, WHEREAS SECURITY, ALTHOUGH LISTED FOR TWO OTHER TYPES, IS NOT LISTED FOR THE A/B28H-6 PARACHUTE. YOU ARGUE THAT IF THE REQUIREMENTS OF THE "QUALIFIED END PRODUCTS" CLAUSE ARE TO BE WAIVED, THEN SECURITY'S BID WAS THE LOWEST RESPONSIVE BID AND SHOULD BE ACCEPTED. SECURITY, YOU SAY, COULD THEN MEET ITS CONTRACTUAL OBLIGATION BY FURNISHING A QUALIFIED PRODUCT MANUFACTURED BY SWITLIK, STEINTHAL, OR PIONEER. THE SHORT ANSWER TO THESE ARGUMENTS MIGHT WELL BE THAT SECURITY ITSELF HAS NOT CHOSEN TO DISPUTE THE REJECTION OF ITS BID, AND FOR ALL WE KNOW THERE MAY BE VALID REASONS TO JUSTIFY THAT REJECTION OTHER THAN THE FACT SECURITY IS NOT LISTED ON THE QUALIFIED PRODUCTS LIST. HOWEVER, WE BELIEVE IT PERTINENT TO NOTE THAT SECURITY STATED IN ITS BID THAT NO SUBCONTRACTING WAS CONTEMPLATED AND THAT THE PRODUCTS IT WAS OFFERING WOULD BE MANUFACTURED AT ITS OWN PLANT IN SAN LEANDRO, CALIFORNIA. IN VIEW OF THIS, IT IS OUR OPINION THAT SECURITY WOULD NOT BE LEGALLY OBLIGATED, IF ITS BID WERE ACCEPTED, TO FURNISH PRODUCTS MANUFACTURED BY COMPETITORS WHO WERE BIDDING AGAINST IT AT HIGHER PRICES FOR THOSE VERY PRODUCTS. FURTHERMORE, WE HAVE SERIOUS DOUBT THAT THE QUALIFIED PRODUCTS LIST PROCEDURE SHOULD BE CONSTRUED TO PERMIT BIDS TO BE CONSIDERED FROM COMPANIES WHO ARE NOT THEMSELVES ON THE LIST ON THE BASIS THAT SUCH NON-LISTED COMPANIES CAN SUBCONTRACT WITH LISTED COMPANIES TO PERFORM THE CONTRACT WORK.

YOUR PROTEST AGAINST THE PROPOSED AWARD TO SWITLIK IS THEREFORE DENIED.