B-158456, APR. 14, 1966

B-158456: Apr 14, 1966

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INC.: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 25. BID PRICES WERE REQUIRED TO BE SHOWN ON A PER UNIT. THE SUPPLIES WERE REQUIRED TO CONFORM TO THE PARTICULAR FEDERAL SPECIFICATIONS SHOWN FOR EACH ITEM. AT PAGE NINE OF THE INVITATION IT WAS PROVIDED. " THAT (A) BIDDERS WERE TO INDICATE IN THE SPACES PROVIDED IN THE SCHEDULE THE BRAND AND MODEL NUMBER FOR EACH ITEM QUOTED UPON AND. IT WOULD BE UNDERSTOOD THAT SUCH BRAND ITEM QUOTED WAS IN ACCORDANCE WITH THE APPROPRIATE SPECIFICATIONS. (B) THAT THE RIGHT WAS RESERVED TO THE GOVERNMENT TO REQUIRE PRIOR TO AWARD TWO SAMPLES OF EACH SUCH BRAND NAME ITEM FOR THE PURPOSE OF DETERMINING WHETHER THE ITEM OFFERED COMPLIED WITH THE SPECIFICATIONS.

B-158456, APR. 14, 1966

TO ELECTRONIC IDEAS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 25, 1966, WITH ATTACHMENTS, FORWARDED HERE BY SENATOR JOSEPH S. CLARK, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ELDON INDUSTRIES, INC. (UNGAR ELECTRIC TOOLS DIVISION), FOR ITEM 5 UNDER INVITATION NO. FPNTT-C4 55708-A-9-30- 65, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE.

THE INVITATION SOLICITED BIDS, ON AN INDIVIDUAL ITEM BASIS, FOR 11 ITEMS OF SOLDERING IRONS, TIPS AND GUNS TO GOVERNMENT AGENCIES WITHIN THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA, AS NEEDED AND ORDERED DURING THE PERIOD FEBRUARY 1, 1966, OR DATE OF AWARD, WHICHEVER SHOULD BE LATER, THROUGH JANUARY 31, 1967, TO THE LIMIT OF THE ESTIMATED QUANTITIES OF SUPPLIES SPECIFIED IN THE CASE OF EACH ITEM. BID PRICES WERE REQUIRED TO BE SHOWN ON A PER UNIT, AS WELL AS TOTAL QUANTITY, BASIS FOR THE ESTIMATED QUANTITIES OF SUPPLIES COMPRISING EACH ITEM.

IN THE CASE OF EACH OF THE 11 ITEMS INVOLVED, THE SUPPLIES WERE REQUIRED TO CONFORM TO THE PARTICULAR FEDERAL SPECIFICATIONS SHOWN FOR EACH ITEM, AND THE "BIDDING INSTRUCTIONS, TERMS, AND CONDITIONS" (STANDARD FORM 33-A, DEC. 1964 EDITION) INCORPORATED IN THE INVITATION PROVIDED IN PARAGRAPH 1/D), IN MATERIAL PART, THAT BIDS WHICH OFFERED SUPPLIES OR SERVICES OTHER THAN THOSE SPECIFIED WOULD NOT BE CONSIDERED.

AT PAGE NINE OF THE INVITATION IT WAS PROVIDED, UNDER THE HEADING "SAMPLES AND BRAND NAME," THAT (A) BIDDERS WERE TO INDICATE IN THE SPACES PROVIDED IN THE SCHEDULE THE BRAND AND MODEL NUMBER FOR EACH ITEM QUOTED UPON AND, UNLESS OTHERWISE STATED BY THE BIDDER, IT WOULD BE UNDERSTOOD THAT SUCH BRAND ITEM QUOTED WAS IN ACCORDANCE WITH THE APPROPRIATE SPECIFICATIONS, AND (B) THAT THE RIGHT WAS RESERVED TO THE GOVERNMENT TO REQUIRE PRIOR TO AWARD TWO SAMPLES OF EACH SUCH BRAND NAME ITEM FOR THE PURPOSE OF DETERMINING WHETHER THE ITEM OFFERED COMPLIED WITH THE SPECIFICATIONS.

BIDS WERE OPENED ON OCTOBER 14, 1965. TEN OF THE ELEVEN ITEMS INVOLVED HAD BEEN SET ASIDE FOR SMALL BUSINESS, BUT ITEM 5, "SOLDERING IRON, ELECTRIC," HAD NOT. FOUR BIDS WERE RECEIVED FOR THAT ITEM. YOU WERE THIRD LOW BIDDER, AND WALL MANUFACTURING COMPANY, WHICH SUBMITTED A UNIT PRICE BID OF $1.39, WITH AN OFFER OF 2 PERCENT DISCOUNT FOR PAYMENT WITHIN 30 DAYS, WAS THE SECOND LOW BIDDER THEREFOR. ELDON INDUSTRIES, INC. (UNGAR ELECTRIC TOOLS DIVISION), HAD INSERTED THE AMOUNT OF $1.42 IN THE REGULAR SPACE PROVIDED IN THE SCHEDULE FOR SHOWING THE UNIT PRICE INTENDED TO BE QUOTED FOR ITEM 5, AND IN THE REGULAR SPACES PROVIDED THEREIN FOR SHOWING THE MANUFACTURER'S NAME AND IDENTIFYING BRAND OF THE ARTICLE OFFERED UNDER THAT ITEM ELDON HAD INDICATED THAT THE ARTICLE OFFERED WAS OF ITS OWN MANUFACTURE AND HAD IDENTIFIED THE BRAND AND NUMBER THEREOF TO BE "UNGAR NO. 7608" , WITH "HANDLE NO. 776A.' HOWEVER, ELDON ALSO SUBMITTED FIVE ADDITIONAL BIDS FOR ITEM 5, WHICH IT REFERRED TO AS "ALTERNATE" BIDS. EACH OF THESE ALTERNATE BIDS SHOWED ELDON TO BE THE MANUFACTURER OF THE ARTICLE OFFERED. THE FIRST ARTICLE THUS OFFERED, IN THE ORDER OF LISTING, WAS IDENTIFIED AS "UNGAR NO. 7616, HANDLE NO. 776B," AND THE UNIT PRICE QUOTED WAS $1.40., THE SECOND AS "UNGAR NO. 7617, HANDLE NO. 776C," WITH A UNIT PRICE QUOTED OF $1.40; THE THIRD AS "UNGAR NO. 7618, HANDLE NO. 776D," WITH A UNIT PRICE QUOTED OF $1.385; THE FOURTH AS "UNGAR NO. 7619, HANDLE NO. 776E," WITH A UNIT PRICE QUOTED OF $1.40; AND THE FIFTH AS ,UNGAR NO. 7621, HANDLE NO. 776F," WITH A UNIT PRICE QUOTED OF $1.385. ELDON'S BID PROVIDED THAT THE PRICES QUOTED FOR EACH OF THE SIX PRODUCTS OFFERED UNDER ITEM 5 WERE SUBJECT TO 2 PERCENT DISCOUNT FOR PAYMENT WITHIN 30 DAYS.

IT APPEARS FROM THE REPORT FURNISHED US BY THE GENERAL SERVICES ADMINISTRATION THAT ON OCTOBER 18, 1965, ELDON WAS REQUESTED TO SUBMIT SAMPLES OF ALL SIX OF ITS PRODUCTS OFFERED UNDER ITEM 5 FOR EXAMINATION; THAT SHIPMENT OF THE REQUESTED SAMPLES WAS RECEIVED ON OCTOBER 26; THAT SAMPLES OF THE ARTICLES IDENTIFIED AS "UNGAR NO. 7619, HANDLE NO. 776D" AND "UNGAR NO. 7621, HANDLE NO. 776F" WERE TESTED FOR THE PURPOSE OF DETERMINING WHETHER THE ARTICLES IN QUESTION COMPLIED WITH THE SPECIFICATIONS. THE ARTICLE IDENTIFIED AS "UNGAR NO. 7621, HANDLE NO. 776D" WAS FOUND NOT TO COMPLY. INASMUCH AS ONE OF THE TWO LOWER-PRICED ARTICLES WAS THUS FOUND TO FULFILL THE REQUIREMENTS, NO TESTS WERE RUN ON THE HIGHER PRICED ARTICLES, AND A CONTRACT FOR FURNISHING THE ARTICLE IDENTIFIED AS "UNGAR NO. 7621, HANDLE NO. 776F" UNDER ITEM 5 OF THE INVITATION (WHICH SPECIFIED AN ESTIMATED QUANTITY OF 65,520 OF THE UNITS) AT THE UNIT PRICE OF $1.385 WAS AWARDED TO ELDON ON JANUARY 5, 1966.

THE RECORD INDICATES THAT YOU HAD AN AGREEMENT WITH WALL MANUFACTURING COMPANY TO SUPPLY IT WITH THE HANDLES REQUIRED AS A COMPONENT FOR ITEM 5 IN THE EVENT WALL WAS THE SUCCESSFUL BIDDER FOR THE ITEM. WALL, AS THE SECOND LOW BIDDER, PRESUMABLY WOULD HAVE RECEIVED THE AWARD FOR THAT ITEM HAD ELDON'S BID BEEN ELIMINATED.

YOU CONTEND THAT THE ABOVE-QUOTED PROVISION OF THE BIDDING INSTRUCTIONS IN EFFECT PROHIBITS THE SUBMISSION OF ALTERNATE BIDS, AND HENCE ELDON'S BID SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE.

IN B-155254, DATED DECEMBER 8, 1964, WE WERE CALLED UPON TO DETERMINE, AMONG OTHER THINGS, WHETHER A BID SUBMITTED BY STONE FILTER COMPANY UNDER MARINE CORPS INVITATION NO. 134-64 WAS REQUIRED TO BE REJECTED SOLELY BECAUSE IT WAS AN ALTERNATE BID, THE INVITATION HAVING INCORPORATED STANDARD FORM 30 (1957 EDITION) WHICH PROVIDES IN PARAGRAPH 1 (D) OF THE TERMS AND CONDITIONS THAT "ALTERNATE BIDS WILL NOT BE CONSIDERED UNLESS AUTHORIZED BY THE INVITATION.' WHILE STONE FILTER'S ATTORNEYS WERE ADVISED IN THE DECISION THAT WE WOULD NOT BE WARRANTED IN CONCLUDING THAT THE AWARD WHICH HAD BEEN MADE TO ANOTHER CONCERN WAS IMPROPER OR CONTRARY TO THE REGULATIONS UNDER THE CIRCUMSTANCES SET OUT IN THE DECISION, THEY WERE FURTHER ADVISED THEREIN AS FOLLOWS:

" * * * APPARENTLY, THE CONTRACTING OFFICER CONCLUDED THAT CONSIDERATION COULD NOT BE GIVEN TO THE OFFER WHICH APPEARED IN THE ADDENDUM IN VIEW OF THE EXPRESS PROHIBITION AGAINST "ALTERNATE BIDS.'

"CONTRARY TO THE CONCLUSION REACHED BY THE CONTRACTING OFFICER, SUBMISSION OF AN ALTERNATE BID DOES NOT REQUIRE REJECTION IF THE BID BE OTHERWISE RESPONSIVE TO THE INVITATION. B-150495, MARCH 6, 1963. THE PROHIBITION AGAINST "ALTERNATE" BIDS ONLY FORBIDS CONSIDERATION OF THOSE BIDS WHICH OFFER SOMETHING OTHER THAN THAT WHICH IS CALLED FOR BY THE SPECIFICATIONS. THUS IF ONE OFFERS TO FURNISH ANY ONE OF SEVERAL ITEMS IN THE ALTERNATIVE AT DIFFERENT PRICES, THOSE PROPOSALS WHICH OFFERED MATERIAL MEETING SPECIFICATIONS WOULD BE RESPONSIVE, THE LOWEST OF WHICH COULD PROPERLY BE ACCEPTED. CONVERSELY, IF ONE OF THE PROPOSALS DID NOT MEET SPECIFICATIONS, THAT PROPOSAL WOULD BE AN "ALTERNATE" PROPOSAL AND NOT PROPER FOR CONSIDERATION. SEE 33 COMP. GEN. 499. IT SHOULD BE NOTED HOWEVER THAT MAKING AN "ALTERNATE" BID DOES NOT IPSO FACTO PRECLUDE CONSIDERATION OF THOSE OTHER PROPOSALS SUBMITTED IN THE SAME BID WHICH CONFORM TO THE SPECIFICATIONS.'

ALSO, SEE 43 COMP. GEN. 663; 40 ID. 688; 39 ID. 892.

AS INDICATED ABOVE, A SAMPLE OF THE ARTICLE FOR WHICH ELDON RECEIVED THE AWARD UNDER ITEM 5 WAS TESTED PRIOR TO AWARD OF THE CONTRACT, AS PROVIDED FOR IN THE INVITATION, AND FOUND TO COMPLY WITH THE SPECIFICATIONS FOR THAT ITEM. IN VIEW THEREOF, AND SINCE THE BID MAY NOT, FOR THE REASONS INDICATED IN THE DECISIONS REFERRED TO AND QUOTED ABOVE, BE CONSIDERED TO HAVE BEEN NONRESPONSIVE TO THE INVITATION MERELY BECAUSE IT WAS DESIGNATED AS AN "ALTERNATE" BID, YOUR PROTEST ON THIS POINT PRESENTS NO BASIS FOR QUESTIONING THE LEGALITY OF THE CONTRACT AWARDED TO ELDON.

RELATIVE TO THE STATEMENT IN YOUR LETTER OF JANUARY 25, 1966, THAT THE GENERAL SERVICES ADMINISTRATION "HAS WITHHELD AWARD OF ITEMS 1, 2, 4, 6, 7 AND 9" UNDER THE INVITATION IN "A POSSIBLE ATTEMPT TO PREVENT A FORMAL PROTEST BY WALL MANUFACTURING COMPANY" (WHICH WAS LOW BIDDER ON THOSE ITEMS) WITH RESPECT TO THE AWARD OF ITEM 5 TO ELDON, THE AGENCY HAS ADVISED THAT WALL WAS AWARDED ITEMS 1, 2, 4, 6, 7 AND 9 UNDER THE INVITATION ON JANUARY 14.

YOU ALSO ADVISE THAT "SINCE WE ARE SMALL BUSINESS AND THE ONLY OTHER SOURCE CURRENTLY IN PRODUCTION ON ITEM 5 IS LARGE BUSINESS, THE ELIMINATION OF THE SMALL BUSINESS SET-ASIDE (ON OUR ITEM ONLY**) HAS PUT US IN A BAD COMPETITIVE POSITION, ALLOWING OUR MAJOR COMPETITOR TO UNDERBID US BY MINUTE AMOUNTS THROUGH EACH OF THE PAST FOUR YEARS.' UNDER THE PROVISIONS OF SUBPART 1-1.706-5 (A) OF THE FEDERAL PROCUREMENT REGULATIONS, SMALL BUSINESS SET-ASIDES ARE TO BE MADE ONLY "WHERE THERE IS A REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES.'

IN THIS CONNECTION THE GENERAL SERVICES ADMINISTRATION HAS ADVISED AS FOLLOWS:

" * * * IT SHOULD BE NOTED THAT THE PROCUREMENT OF ALL ITEMS OF SOLDERING IRONS WAS REVIEWED FOR POSSIBLE SET-ASIDES PRIOR TO ISSUANCE OF THE INVITATION, AND ALL EXCEPT ONE WERE SET-ASIDE. ITEM 5 WAS NOT SET-ASIDE AS IT WAS BELIEVED ONLY ONE SMALL BUSINESS WAS CAPABLE OF BIDDING ON THE REQUIREMENTS. WE WILL REVIEW ALL ITEMS AGAIN TO DETERMINE WHAT WILL BE SET-ASIDE PRIOR TO ISSUANCE OF THE NEXT INVITATION, AND THE PRESENT BIDDING PATTERN IN WHICH THREE SMALL BUSINESSES BID ON ITEM 5 WILL BE A FACTOR IN THE REVIEW.'

IN VIEW OF THE FOREGOING WE SEE NO VALID BASIS FOR OBJECTION TO THE PROCEDURES FOLLOWED, OR THE CONTRACT AWARDED, UNDER ITEM 5. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.