B-159849, OCT. 24, 1966

B-159849: Oct 24, 1966

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ESQUIRE: FURTHER REFERENCE IS MADE TO A COPY OF YOUR LETTER DATED JULY 29. THE TYPES OF THE REQUIRED EQUIPMENT WERE DESCRIBED UNDER ITEMS 1. PROPOSALS WERE TO BE SUBMITTED BY 12 NOON. THREE PROPOSALS WERE RECEIVED AND EVALUATED BY NAVY TECHNICAL PERSONNEL. NBY 78626 WAS AWARDED TO LAUNDRY FABRICATORS FOR FURNISHING THE EQUIPMENT COVERED BY PROPOSAL ITEM NO. 2 AT A PRICE OF $772. CHANGE "A" TO THE CONTRACT WAS EXECUTED ON APRIL 25. CHANGE "B" TO THE CONTRACT WAS EXECUTED ON MAY 16. FIVE REASONS ARE GIVEN AS TO WHY YOU BELIEVE THE ACTIONS TAKEN BY THE DEPARTMENT OF THE NAVY IN THIS PROCUREMENT WERE HIGHLY IRREGULAR. THE FIRST REASON GIVEN BY YOU IS THAT INSUFFICIENT TIME WAS ALLOWED OFFERORS TO COMPUTE THEIR PRICE PROPOSALS.

B-159849, OCT. 24, 1966

TO J. DONALD PETTUS, ESQUIRE:

FURTHER REFERENCE IS MADE TO A COPY OF YOUR LETTER DATED JULY 29, 1966, TO THE OFFICER IN CHARGE, BUREAU OF YARDS AND DOCKS (NOW KNOWN AS NAVAL FACILITIES ENGINEERING COMMAND), DEPARTMENT OF THE NAVY, PROTESTING ON BEHALF OF LAUNDRY AND DRY CLEANING EQUIPMENT CO., SAN FRANCISCO, CALIFORNIA, THE AWARD OF CONTRACT NO. NBY 78626 TO LAUNDRY FABRICATORS, SAN MATEO, CALIFORNIA, ON A NEGOTIATED BASIS UNDER REQUEST FOR PROPOSALS (RFP) NO. N6292266R0005, ISSUED BY RESIDENT OFFICER IN CHARGE OF CONSTRUCTION, BUREAU OF YARDS AND DOCKS CONTRACTS, SAN BRUNO, CALIFORNIA.

THIS RFP, ISSUED ON FEBRUARY 20, 1966, REQUESTED PROPOSALS FOR FURNISHING LAUNDRY AND ASSOCIATED EQUIPMENT. THE TYPES OF THE REQUIRED EQUIPMENT WERE DESCRIBED UNDER ITEMS 1, 1A, 2, AND 2A OF THE RFP. PROPOSALS WERE TO BE SUBMITTED BY 12 NOON, FEBRUARY 25, 1966.

THREE PROPOSALS WERE RECEIVED AND EVALUATED BY NAVY TECHNICAL PERSONNEL. ON MARCH 4, 1966, CONTRACT NO. NBY 78626 WAS AWARDED TO LAUNDRY FABRICATORS FOR FURNISHING THE EQUIPMENT COVERED BY PROPOSAL ITEM NO. 2 AT A PRICE OF $772,433.60. CHANGE "A" TO THE CONTRACT WAS EXECUTED ON APRIL 25, 1966, AND IT INCREASED THE CONTRACT PRICE IN THE NET AMOUNT OF $26,325.68 WITH NO EXTENSION OF THE TIME OF DELIVERY. CHANGE "B" TO THE CONTRACT WAS EXECUTED ON MAY 16, 1966, AND IT INCREASED THE CONTRACT PRICE BY THE NET AMOUNT OF $194,482.30 AND EXTENDED THE TIME OF DELIVERY 30 DAYS.

IN YOUR LETTER OF JULY 29, 1966, FIVE REASONS ARE GIVEN AS TO WHY YOU BELIEVE THE ACTIONS TAKEN BY THE DEPARTMENT OF THE NAVY IN THIS PROCUREMENT WERE HIGHLY IRREGULAR.

THE FIRST REASON GIVEN BY YOU IS THAT INSUFFICIENT TIME WAS ALLOWED OFFERORS TO COMPUTE THEIR PRICE PROPOSALS. THE RECORD INDICATES THAT THE TOTAL TIME BETWEEN THE FIRST PRESENTATION OF THE SCOPE AND THE ACCEPTANCE OF PROPOSALS WAS 14 DAYS. IT IS REPORTED THAT ON FEBRUARY 14, 1966, 6 DAYS PRIOR TO THE DATE ON WHICH THE REQUEST FOR PROPOSALS WAS ISSUED, FOUR INTERESTED MANUFACTURERS, INCLUDING LAUNDRY AND DRY CLEANING EQUIPMENT CO., ATTENDED A PRE-POSAL MEETING; THAT ALTHOUGH 5 DAYS WERE ALLOWED, LAUNDRY AND DRY CLEANING EQUIPMENT CO. SUBMITTED ITS UNPRICED PROPOSAL WITHIN 2 DAYS ON FEBRUARY 16, 1966; AND THAT ALTHOUGH 5 ADDITIONAL DAYS WERE ALLOWED FOR PRICING, LAUNDRY AND DRYCLEANING EQUIPMENT CO. SUBMITTED ITS FINAL PROPOSAL ON FEBRUARY 24, 1966, 1 DAY BEFORE THE TIME SET FOR OPENING OF PROPOSALS. NO REQUEST FOR EXTENDING THE PROPOSAL OPENING WAS RECEIVED FROM ANY PROPOSER PRIOR TO FEBRUARY 25, 1966, THE DATE SPECIFIED FOR OPENING OF FINAL PROPOSALS.

THE RECORD INDICATES THAT THE CONTRACT IN QUESTION WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (2), WHICH PERMITS NEGOTIATION WHEN THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING. SINCE THERE APPEARS TO HAVE BEEN AN URGENT NEED FOR THE EQUIPMENT IT IS APPARENT WHY THE PERIOD FOR SUBMISSION OF PRICED PROPOSALS WAS LIMITED TO ONLY 5 DAYS.

THIS BEING A NEGOTIATED PROCUREMENT, AND CONSIDERING THE URGENT NEED FOR THE EQUIPMENT, WE SEE NO VALID BASIS FOR QUESTIONING THE TIME ALLOTED BY THE PROCUREMENT AGENCY FOR SUBMISSION OF PROPOSALS.

THE SECOND GROUND FOR YOUR PROTEST IS THAT A FUNDAMENTAL AMBIGUITY APPEARS IN THE GENERAL REQUIREMENTS DATA. YOU STATE THAT SECTIONS 1B.1-6, INCLUSIVE, OF THE GENERAL REQUIREMENTS SETS FORTH THE BASES FOR THE PROPOSAL; THAT SECTION 1B.2 IS FOR 40 UNITS WITH ALL EQUIPMENT SIZED COMPATIBLE WITH TWO 50-POUND DRY WEIGHT WASHERS; AND THAT SECTION 1B.4 IS FOR 40 UNITS WITH ALL EQUIPMENT COMPATIBLE WITH TWO 75 POUND DRY WEIGHT WASHERS. YOU ALLEGE THAT NOWHERE IN THE DOCUMENTS MAKING UP THE REQUEST FOR PROPOSALS IS THERE ANY GUIDELINE OR REQUIREMENT CONCERNING THE WASHING CYCLE TIME. YOU CONTEND THAT WITHOUT SOME PRIOR KNOWLEDGE THAT THE CYCLE INTENDED WAS 100 POUNDS PER HOUR, THE PROPOSERS WHO ASSUMED THE CYCLE TO BE MORE THAN 100 POUNDS PER HOUR NATURALLY OFFERED HEAVIER DUTY AND MORE EXPENSIVE EQUIPMENT AND THAT THEY HAD NO HOPE OF COMPETING FOR THE CONTRACT.

IN REGARD TO THE SPECIFICATIONS, THE DEPARTMENT OF THE NAVY STATES THAT A REVIEW THEREOF INDICATES NO AMBIGUITY IN THE GENERAL REQUIREMENTS FURNISHED EACH PROPOSER; THAT EQUIPMENT SIZING WAS BASED UPON PUBLISHED DRY WEIGHT WASHER SIZES WHICH ARE STANDARD IN THE LAUNDRY INDUSTRY; AND THAT LAUNDRY AND DRYCLEANING EQUIPMENT CO.'S PROPOSAL DID NOT INVOLVE "HEAVIER-DUTY" OR MORE EXPENSIVE EQUIPMENT THAN THAT OFFERED BY OTHER PROPOSERS AND THAT THE COMPANY'S PROPOSAL WAS CONSIDERED TO BE IN ACCORDANCE WITH THE SPECIFICATIONS. SINCE THE RECORD INDICATES THAT NO BIDDER OFFERED "HEAVIER-DUTY" EQUIPMENT IN ITS PROPOSAL, WE SEE NO BASIS FOR DECLARING THE SPECIFICATIONS DEFECTIVE BECAUSE OF THE OMISSION OF A "GUIDELINE OR REQUIREMENT CONCERNING THE WASHING CYCLE TIME.'

THE THIRD BASIS FOR YOUR PROTEST IS THAT THE AWARD WAS NOT MADE TO THE LOWEST "RESPONSIBLE" PROPOSER. YOU ALLEGE THAT LAUNDRY FABRICATORS IS A PARTNERSHIP WITH NO PRIOR MANUFACTURING EXPERIENCE AND QUESTIONABLE FINANCIAL RESOURCES. YOU STATE THAT THE PROVISIONS OF THE WALSH-HEALEY ACT, 41 U.S.C. 35, ET SEQ., REQUIRE THAT A BIDDER BE A MANUFACTURER OF THE ITEM SUPPLIED OR A ,REGULAR DEALER" IN THE SUPPLIES TO BE MANUFACTURED. YOU CONTEND THAT ONLY ONE PARTNER OF THE PARTNERSHIP HAS ANY KNOWLEDGE OF LAUNDRY MACHINERY AND THAT HIS EXPERIENCE SEEMS TO BE LIMITED TO THE INSTALLATION AND PIPING OF LAUNDRY EQUIPMENT, NOT IN MANUFACTURE OR ASSEMBLY.

OUR OFFICE DOES NOT CONSIDER THAT IT HAS ANY AUTHORITY TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR FIRMS ARE REGULAR DEALERS OR MANUFACTURERS UNDER THE WALSH-HEALEY ACT. B-147620, JANUARY 22, 1962. RATHER, WE HAVE CONSIDERED THAT SUCH DETERMINATIONS REST WITH THE CONTRACTING OFFICER SUBJECT TO THE REVIEW OF THE DEPARTMENT OF LABOR WHICH HAS THE FINAL AUTHORITY. B-148715, JUNE 25, 1962; B 155387, NOVEMBER 25, 1964.

IT IS REPORTED THAT PRIOR TO AWARD OF THE CONTRACT TO LAUNDRY FABRICATORS, THE CONTRACTING OFFICE CONDUCTED A COMPLETE PRE-AWARD SURVEY FOR THE PURPOSE OF ESTABLISHING THE RESPONSIBILITY OF THAT FIRM. IT WAS DETERMINED THAT LAUNDRY FABRICATORS HAD SUFFICIENT FINANCIAL CAPABILITY; THAT THE FIRM WAS A REGULAR DEALER IN ALL EQUIPMENT TO BE SUPPLIED; AND THAT THE COMPANY HAD OVER 30 YEARS ACCUMULATIVE EXPERIENCE IN THE MANUFACTURING OF LAUNDRY EQUIPMENT INCLUDING SPECIFIC EXPERIENCE IN PORTABLE FIELD OPERATED LAUNDRY EQUIPMENT. IT ALSO IS REPORTED THAT TO DATE THE MANUFACTURING, ASSEMBLING AND TESTING OPERATIONS UNDER THE SUBJECT CONTRACT HAVE BEEN IN ACCORDANCE WITH THE CONTRACT REQUIREMENTS AND HAVE CONTINUED WITHOUT INTERRUPTION.

IT IS WELL SETTLED THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION, AND WHERE, AS IN THE INSTANT CASE, SUCH DETERMINATION IS BASED UPON INFORMATION RESULTING FROM A PRE-AWARD SURVEY OUR OFFICE HAS CONSISTENTLY ADHERED TO THE RULE THAT THE ADMINISTRATIVE DETERMINATION WILL NOT BE QUESTIONED UNLESS ARBITRARY, CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE. COMP. GEN. 131, 133. WE FIND NO SUCH GROUND ON WHICH TO QUESTION THE DETERMINATION IN THE INSTANT CASE.

THE FOURTH GROUND OF YOUR PROTEST IS THAT THERE WERE UNAUTHORIZED WAIVERS OF TIME LIMITS AND INSPECTIONS BY THE CONTRACTING AGENCY UNDER THE CONTRACT IN QUESTION. YOU STATE THAT LAUNDRY FABRICATORS HAS ALREADY BEEN GRANTED AN EXTENSION OF TIME TO PERFORM THE CONTRACT AND THAT MORE TIME MAY YET BE NEEDED BY THAT FIRM. YOU ALSO REQUEST AN EXPLANATION AS TO WHY THE REQUIREMENTS OF INSPECTION ON THE BASIS OF ONE OUT OF FIVE APPARENTLY HAVE BEEN WAIVED OR DISREGARDED IN THE CASE OF LAUNDRY FABRICATORS.

THE DEPARTMENT OF THE NAVY STATES THAT DELIVERIES UNDER THE CONTRACT BY LAUNDRY FABRICATORS HAVE BEEN IN ACCORDANCE WITH CONTRACT REQUIREMENTS AND THAT NO EXTENSION IN TIME HAS BEEN REQUESTED OR GRANTED. IT IS REPORTED THAT THE 40TH UNIT UNDER THE BASIC CONTRACT WAS SHIPPED BY LAUNDRY FABRICATORS ON AUGUST 9, 1966, 4 DAYS AFTER THE SCHEDULED COMPLETION DATE OF AUGUST 5, 1966. IN REGARD TO YOUR STATEMENT THAT INSPECTIONS OF THE REQUIRED UNITS HAVE BEEN WAIVED BY THE CONTRACTING AGENCY, THE DEPARTMENT OF THE NAVY STATES THAT NO WAIVERS OF THE INSPECTION REQUIREMENTS HAVE BEEN MADE IN THE CASE OF LAUNDRY FABRICATORS AND THAT THE COMPANY HAS EXCEEDED THE REQUIREMENTS OF PARAGRAPH 2.5.2 OF THE CONTRACT SPECIFICATIONS, WHICH REQUIRES THAT ONE OF THE FIRST FIVE UNITS MANUFACTURED UNDERGO A 4-HOUR PRODUCTION TEST. IT IS REPORTED THAT LAUNDRY FABRICATORS HAS ELECTED TO PRODUCTION TEST EVERY UNIT AND THAT IT HAS BEEN FOUND THAT THIS TESTING HAS GREATLY EXCEEDED THE REQUIREMENTS OF PARAGRAPH 2.5 OF THE SPECIFICATIONS.

THE FIFTH REASON FOR YOUR PROTEST IS THAT ADDITIONAL ORDERS FOR FURNISHING 80 UNITS OF THE REQUIRED LAUNDRY EQUIPMENT HAVE BEEN PLACED BY THE CONTRACTING OFFICER WITH LAUNDRY FABRICATORS WITHOUT REQUESTING OTHER BIDDERS TO SUBMIT BIDS FOR FURNISHING THIS ADDITIONAL AMOUNT. UNDER THE OPTION PROVISIONS OF THE CONTRACT, THE GOVERNMENT RECEIVED THE RIGHT TO PURCHASE UP TO 40 ADDITIONAL UNITS, THE SAME NUMBER AS CALLED FOR BY THE BASIC CONTRACT. IT IS REPORTED THAT ONLY 10 ADDITIONAL UNITS, NOT 80 AS ALLEGED BY YOU, HAVE BEEN PURCHASED FROM LAUNDRY FABRICATORS UNDER THE OPTION CLAUSE OF THE CONTRACT.

UPON REVIEW, WE FIND NO LEGAL BASIS TO OBJECT TO THE AWARD MADE TO LAUNDRY FABRICATORS. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.