B-159725, DEC. 23, 1966

B-159725, DEC. 23, 1966

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED JULY 19, 1966, FROM EGANDG, INCORPORATED OF BEDFORD, MASSACHUSETTS, PROTESTING AWARD OF A CONTRACT TO PRODUCE A NIGHT ILLUMINATION SYSTEM (PLASMA ARC) TO GIANNINI SCIENTIFIC CORPORATION UNDER INVITATION FOR BIDS NO. 33-657-66-395 ISSUED JUNE 13, 1966, BY THE AIR FORCE AERONAUTICAL SYSTEMS DIVISION (AFSC), WRIGHT- PATTERSON AIR FORCE BASE, OHIO, BECAUSE GIANNINI'S BID CONTAINED AN INSERTED PROVISION CONDITIONING ITS BID UPON THE GOVERNMENT'S FURNISHING THE TRANSPORTATION OF THE CONTRACTOR'S ENGINEERING AND SCIENTIFIC PERSONNEL TO FIELD INSTALLATIONS.

THIS IMPROVED ILLUMINATION SYSTEM WAS NEEDED BECAUSE OF THE NAVIGATION DIFFICULTIES EXPERIENCED AT NIGHT, WHERE A SLIGHT INACCURACY COULD CAUSE THE FAILURE OF HAZARDOUS NIGHT PHOTOGRAPHIC MISSIONS WHEN UTILIZING THE EARLIER, LESS POWERFUL NIGHT ILLUMINATION SYSTEM. AS THE PROPOSED SYSTEM REPRESENTED AN ADVANCEMENT IN THE STATE OF THE ART OF AIRCRAFT-BORNE ILLUMINATION, IT WAS DECIDED TO PROCURE "ONE IMPROVED NIGHT ILLUMINATION (PLASMA ARC) SUBSYSTEM; ENGINEERING SERVICES, SPARE PARTS AND MATERIALS TO MAINTAIN EQUIPMENT FOR ONE (1) YEAR; PRESENTATION MATERIALS AND DATA" THROUGH THE TWO STEP ADVERTISED BID PROCEDURE IN ACCORDANCE WITH PART 5 OF THE ARMED SERVICES PROCUREMENT REGULATION. OF THE SEVEN FIRMS INVITED TO SUBMIT TECHNICAL PROPOSALS BY LETTER REQUEST FOR TECHNICAL PROPOSALS SEQS 3249 OF MAY 5, 1966, ONLY TWO PROPOSALS, THOSE OF EGANDG AND GIANNINI, WERE FOUND TO BE TECHNICALLY ACCEPTABLE. THESE TWO FIRMS WERE ISSUED INVITATIONS TO BID ON JUNE 13, 1966, AND WHEN THE BIDS WERE OPENED, ON JUNE 23, 1966, GIANNINI'S BID WAS LOW AT $262,000, WHILE EGANDG'S BID WAS $524,880. EGANDG PROTESTED AWARD TO GIANNINI ADMINISTRATIVELY IN ITS LETTER OF JUNE 27, 1966, CONTENDING GIANNINI'S BID WAS NONRESPONSIVE BECAUSE IT CONTAINED THE CONDITION "EXCEPT TRANSPORTATION FOR FIELD REPRESENTATIVES TO LOCATIONS OTHER THAN WRIGHT PATTERSON AIR FORCE BASE, OHIO, TO BE AT GOVERNMENT EXPENSE.' THE CONTRACTING OFFICER, IN HIS LETTER TO EGANDG DATED JUNE 30, 1966, DENIED THE PROTEST BECAUSE "THE SUCCESSFUL BIDDER TOOK NO EXCEPTION TO PARAGRAPH "E. F.O.B. POINT: SUPPLIES ETC., THE POINT OF CONTENTION IN YOUR (E.G.ANDG) LETTER.'" IT IS THE OPINION OF THIS OFFICE, AND BY IMPLICATION THE VIEW OF YOUR DEPARTMENT, THAT THE CONTRACTING OFFICER'S DECISION WAS NOT RESPONSIVE TO GIANNINI'S CONTENTIONS, FOR GIANNINI'S PROTEST QUESTIONED THE GOVERNMENT'S ASSUMPTION OF THE CONTRACTOR'S COST OF TRANSPORTING TECHNICAL PERSONNEL, WHILE PARAGRAPH E OF THE INVITATION CONCERNS ONLY THE COST OF TRANSPORTING SUPPLIES. NEVERTHELESS, THE CONTRACTING OFFICER AWARDED GIANNINI CONTRACT AF 33/657/-16904 ON JUNE 30, 1966, AND GIANNINI COMMENCED PRELIMINARY WORK ON THE CONTRACT DURING AUGUST 1966.

YOUR REPORT OF NOVEMBER 15, 1966, IN RESPONSE TO OUR TELEPHONIC REQUEST OF JULY 22, 1966, AND OUR LETTER REQUEST OF JULY 27, 1966, GAVE THE FOLLOWING REASONS FOR TREATING GIANNINI'S BID AS RESPONSIVE:

"6. THE CONTRACTING OFFICER DETERMINED THE GIANNINI EXCEPTION SET FORTH UNDER ITEM 2 OF ITS BID TO BE A MINOR IRREGULARITY IN BID AND TO RESULT IN A NEGLIGIBLE VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS WHEN COMPARED TO THE FIRM'S TOTAL BID PRICE, $262,000. THAT EXCEPTION RELATED ONLY TO SUCH TRANSPORTATION COSTS AS WOULD INVOLVE THE TRAVEL OF CONTRACTOR PERSONNEL FROM UNDESIGNATED ORIGINS TO UNDESIGNATED DESTINATIONS.

"7. ACCORDING TO THE CONTRACTING OFFICER, PRIOR EXPERIENCE WITH SIMILAR CONTRACTS GENERALLY INVOLVED A MAXIMUM OF THREE SUCH CONTRACTOR TRIPS. SOME INSTANCES CONTRACTOR PERSONNEL HAVE UTILIZED AT NO COST GOVERNMENT TEST AIRCRAFT FOR TRANSPORTATION TO THE TEST SITE, AND IN OTHER CASES NO CONTRACTOR PERSONNEL AT ALL HAVE BEEN REQUIRED TO MAKE SUCH TRIPS. AS FOR THE COSTS INVOLVED, IT WAS ESTIMATED THAT AT MOST SUCH TRIPS AS FROM WRIGHT-PATTERSON AIR FORCE BASE, OHIO TO EGLIN AIR FORCE BASE, FLORIDA WOULD COST $102.90 ROUND TRIP, OR FROM SANTA ANA, CALIFORNIA TO EGLIN AIR FORCE BASE, FLORIDA, $277,20 ROUND TRIP. WHEN THE CONTRACTING OFFICER CONSIDERED THE TOTAL PRICE OF THE BID AND THE SUBSTANTIAL DIFFERENCE BETWEEN THAT BID AND THE ONLY OTHER BID SUBMITTED, THAT OF THE PROTESTANT, $524,880, HE DETERMINED THAT THESE FACTS PUT THE SITUATION WITHIN THE CONTEXT OF THE "TRIVIALITY TEST" SET FORTH IN YOUR DECISION B-156607, MAY 27, 1965.'

THE "TRIVIALITY TEST," CITED AS AUTHORITY FOR THE ACTION TAKEN, SAYS, ON PAGE FOUR:

"IT IS CLEAR FROM THE ABOVE SUMMARY THAT WE HAVE NEVER APPROVED WAIVER IN SUCH CIRCUMSTANCES AS ARE HERE PRESENT WHERE THE MAXIMUM POSSIBLE AMOUNT OF DEVIATION WAS AS MUCH AS $200.00. EXAMINATION OF THE COURT CASES COLLECTED IN 12 WORDS AND PHRASES UNDER THE HEADINGS "DE MINIMIS" AND "DE MINIMIS NON CURAT LEX" INDICATES THAT WHERE DOLLAR AMOUNTS ARE INVOLVED THE DE MINIMIS DOCTRINE HAS GENERALLY BEEN APPLIED ONLY WITH REFERENCE TO AMOUNTS OF THE SAME ORDER OF MAGNITUDE--- THAT IS, UNDER ONE OR TWO HUNDRED DOLLARS.

"WHILE IN SEVERAL OF OUR DECISIONS REFERENCE HAS BEEN MADE TO THE TOTAL OR OVERALL COST OF THE WORK INVOLVED AS A FACTOR TO BE CONSIDERED IN DETERMINING WHETHER THE POSSIBLE COST EFFECT OF AN UNACKNOWLEDGED ADDENDUM WAS SO TRIVIAL AS TO JUSTIFY WAIVER, WE BELIEVE THAT THE PROPER EFFECT OF THAT CRITERION SHOULD BE TO LIMIT RATHER THAN TO ENLARGE THE APPLICATION OF THE DE MINIMIS RULE. IN OTHER WORDS, WHILE AN AMOUNT IN THE VICINITY OF $100.00 MIGHT APPEAR TO BE TRIVIAL IN ITSELF, IF IN FACT IT WAS A FAIRLY SUBSTANTIAL PART OF THE TOTAL COST, OR MORE THAN AN INSIGNIFICANT PART OF THE DIFFERENCE BETWEEN THE DEFECTIVE BID AND THE NEXT AVAILABLE BID, IT COULD NOT PROPERLY BE CONSIDERED AS JUSTIFYING A WAIVER OF THE DEFECT. ON THE OTHER HAND, WE WOULD NOT BE INCLINED IN THE ORDINARY CASE TO CONSIDER A POSSIBLE DEVIATION OF $1,000.00 OR MORE AS TRIVIAL OR INSIGNIFICANT IN THE AREA UNDER CONSIDERATION, NO MATTER HOW SMALL A FRACTION OF THE TOTAL COST OR BID DIFFERENCE IT MIGHT BE.'

RELATING THE CRITERIA TO THE FACTS HERE, WE NOTE THAT ALTHOUGH THE PROCURING ACTIVITY'S EXPERIENCE INDICATES SOME CONTRACTS ENTAIL VERY FEW OR EVEN NO FIELD TRIPS ON THE PART OF CONTRACTOR PERSONNEL, THAT SAME EXPERIENCE INDICATES OTHER CONTRACTS HAVE REQUIRED THREE TRIPS, WHICH ON THE BASIS OF JUST ONE TECHNICAL REPRESENTATIVE AND THE COST FIGURES YOU SUPPLIED FOR AIR FARE TO SANTA ANA, CALIFORNIA, WOULD AMOUNT TO $831.80. FURTHERMORE, NOTHING IN THE RECORD GUARANTEES THAT THIS AMOUNT IS AN UPPER LIMIT, FOR THIS EXCEPTION TO THE TERMS OF THE INVITATION WOULD, ACCORDING TO YOUR REPORT, MAKE THE GOVERNMENT LIABLE FOR THE ENTIRE COST OF ALL THE "TRAVEL OF CONTRACTOR PERSONNEL FROM UNDESIGNATED ORIGINS TO UNDESIGNATED DESTINATIONS," AND THIS EXCEPTION COULD THEREFORE POSSIBLY COST THE GOVERNMENT MANY THOUSANDS OF DOLLARS.

SINCE THE TRANSPORTATION HERE COULD AMOUNT TO A THOUSAND DOLLARS VERY EASILY, AND THE STANDARD SET OUT IN B-156607 OF MAY 27, 1965, STATES THAT NO WAIVER TOTALING TWO HUNDRED DOLLARS HAS EVER BEEN APPROVED BY THIS OFFICE, AND THAT "A POSSIBLE DEVIATION OF $1,000.00 OR MORE" SHOULD NOT BE TREATED AS TRIVIAL EVEN THOUGH IT APPEARS INSIGNIFICANT IN RELATION TO THE TOTAL COST OF BID DIFFERENCE, WE DO NOT BELIEVE SAID DECISION WAS PROPER AUTHORITY FOR YOUR ACTION HERE.

FURTHERMORE, CONSIDERATION OF GIANNINI'S BID, WHICH EXPRESSLY TAKES EXCEPTION TO THE TERMS OF THE INVITATION, IS PROHIBITED BY OUR DECISION B- 155827 OF FEBRUARY 25, 1965, WHICH SAID IN PART:

"NO EXCEPTION DELIBERATELY TAKEN TO SPECIFICATIONS, SUCH AS IS INVOLVED IN THE INSTANT CASE, CAN BE CONSIDERED TRIVIAL OR MINIMAL.'

ACCORDINGLY, WE ARE OF THE OPINION THAT THE AWARD OF THIS CONTRACT TO GIANNINI WAS CLEARLY IMPROPER, ESPECIALLY IN VIEW OF THE FACT THAT THE CONTRACTING OFFICER'S REPORT OF AUGUST 22, 1966, DEMONSTRATES AN AWARENESS OF DECISIONS OF THIS OFFICE WHICH WOULD PROHIBIT ACCEPTANCE OF THIS BID AS NONRESPONSIVE TO THE INVITATION.

HOWEVER, DUE TO THE STATE OF PRODUCTION UNDER THE CONTRACT, THE EXPRESSED MILITARY NECESSITY FOR OBTAINING THIS IMPROVED ITEM, AND THE FACT THAT AWARD TO EGANDG WOULD BE UNLIKELY EVEN IF THE PRESENT CONTRACT WERE CANCELLED BECAUSE OF THE GREAT DIFFERENCE IN THE TWO BIDS WE DO NOT THINK IT TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO CANCEL THE CONTRACT.