B-161384, JUL. 24, 1967

B-161384: Jul 24, 1967

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BIDDERS - RESPONSIBILITY - PERFORMANCE CAPABILITY DECISION TO UNSUCCESSFUL BIDDER DENYING PROTEST THAT AWARD UNDER DEFENSE SUPPLY AGENCY INVITATION FOR THERMAL SHIPPING CONTAINERS WAS MADE TO LOW BIDDER WHO HAD NEVER MANUFACTURERED ITEM AND WHO DID NOT UNDERSTAND SPECIFICATIONS SINCE REPONSIBILITY DETERMINATION IS ADMINISTRATIVE MATTER WHICH SHOULD STAND IN ABSENCE OF CONVINCING EVIDENCE OF FRAUD. ORIGIN IS NOT SHOWN TO HAVE GIVEN SUCCESSFUL BIDDER AN ADVANTAGE. PHILLIPS-FOSCUE CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF JULY 6. THE FOLLOWING BIDS WERE RECEIVED: SIZE 3 SIZE 2 F.O.B. ORIGIN DESTINATION ORIGIN DESTINATION PHILLIPS FOSCUE $20.56 $21.71 $13.92 $14.71 CORROBILT 8.70 8.95 8.00 8.25 CORROBILT VERIFIED THAT ITS BID PRICES WERE CORRECT BEFORE AN AWARD IN THE AMOUNT OF $25.

B-161384, JUL. 24, 1967

BIDDERS - RESPONSIBILITY - PERFORMANCE CAPABILITY DECISION TO UNSUCCESSFUL BIDDER DENYING PROTEST THAT AWARD UNDER DEFENSE SUPPLY AGENCY INVITATION FOR THERMAL SHIPPING CONTAINERS WAS MADE TO LOW BIDDER WHO HAD NEVER MANUFACTURERED ITEM AND WHO DID NOT UNDERSTAND SPECIFICATIONS SINCE REPONSIBILITY DETERMINATION IS ADMINISTRATIVE MATTER WHICH SHOULD STAND IN ABSENCE OF CONVINCING EVIDENCE OF FRAUD, COLLUSION, BAD FAITH, OR LACK OF FACTUAL BASIS. ALSO INCONSISTENCY IN INVITATION CERTIFICATION FOR BIDS F.O.B. DESTINATION AND F.O.B. ORIGIN IS NOT SHOWN TO HAVE GIVEN SUCCESSFUL BIDDER AN ADVANTAGE.

TO MR. E. R. HITCHCOCK, WASHINGTON REPRESENTATIVE, PHILLIPS-FOSCUE CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JULY 6, 1967, AND PRIOR CORRESPONDENCE, PROTESTING THE AWARD AND SUBSEQUENT ADMINISTRATION OF A CONTRACT FOR THERMAL SHIPPING CONTAINERS AWARDED TO CORROBILT WOOD PRODUCTS DIVISION UNDER DEFENSE SUPPLY AGENCY INVITATION FOR BIDS DSA 005- 67-B-0043.

THE INVITATION FOR BIDS SOLICITED PRICES FOR TWO DIFFERENT SIZES OF THERMAL SHIPPING CONTAINERS TO BE MANUFACTURED IN ACCORDANCE WITH INTERIM FEDERAL SPECIFICATION PPP-C-001266. THE FOLLOWING BIDS WERE RECEIVED:

SIZE 3 SIZE 2

F.O.B. F.O.B.

ORIGIN DESTINATION ORIGIN DESTINATION PHILLIPS FOSCUE

$20.56 $21.71 $13.92 $14.71 CORROBILT 8.70 8.95 8.00 8.25

CORROBILT VERIFIED THAT ITS BID PRICES WERE CORRECT BEFORE AN AWARD IN THE AMOUNT OF $25,260 WAS MADE TO IT ON APRIL 21, 1967, FOR 1,800 SIZE 3 AND 1,200 SIZE 2 CONTAINERS ON THE BASIS OF THE F.O.B. ORIGIN PRICES QUOTED FOR THOSE ITEMS.

YOU ALLEGE THAT CORROBILT DID NOT CONFORM TO THE DESIGN OR PERFORMANCE REQUIREMENTS OF THE SPECIFICATIONS REFERENCED IN THE INVITATION AND SHOULD THEREFORE NOT HAVE RECEIVED AN AWARD. HOWEVER, ON THE RECORD BEFORE US, IT DOES NOT APPEAR THAT CORROBILT TOOK ANY EXCEPTION TO THE SPECIFICATIONS IN ITS BID AND THUS WAS RESPONSIVE TO THE ADVERTISED SPECIFICATIONS. YOU STATE FURTHER THAT THE AWARD TO CORROBILT WAS ILLEGAL BECAUSE THE CONTRACTING OFFICER DID NOT MAKE A COMPLETE INVESTIGATION OF THE CAPABILITIES OF CORROBILT DESPITE THE FACT THAT THE COMPANY HAD NEVER MANUFACTURED THERMAL CONTAINERS. HOWEVER, THE CONTRACTING OFFICER HAS ADVISED US THAT HE DID NOT BELIEVE THAT A PREAWARD SURVEY WAS NECESSARY BECAUSE THE COMPANY HAS MANUFACTURED OTHER TYPES OF PACKING CONTAINERS AND HE DID NOT CONSIDER THAT THE THERMAL CONTAINER WAS OF SUCH UNUSUAL COMPLEXITY AS TO REQUIRE A SPECIAL INQUIRY. THE CONTRACTING OFFICER STATED THAT SINCE CORROBILT HAD PERFORMED OTHER CONTRACTS FOR THE AGENCY SATISFACTORILY AND TIMELY, HE WAS SATISFIED THAT THE COMPANY WAS A RESPONSIBLE BIDDER. PERHAPS THE SPECIFICATIONS FOR THERMAL CONTAINERS ARE SO DIFFERENT, IF NOT MORE SOPHISTICATED, FROM THE SPECIFICATIONS OF RELATED ITEMS THAT CORROBILT HAS MANUFACTURED THAT THE CONTRACTING OFFICER SHOULD HAVE REQUIRED A MORE COMPLETE PREAWARD STUDY OF THE COMPANY. NEVERTHELESS, A DETERMINATION OF RESPONSIBILITY IS A MATTER OF JUDGEMENT WHICH MAY VARY FROM PERSON TO PERSON AND IT HAS BEEN THE POSITION OF OUR OFFICE THAT THE RESPONSIBILITY OF A BIDDER IS PRIMARILY A MATTER FOR DETERMINATION BY THE CONTRACTING AGENCY AND THAT SUCH DETERMINATION SHOULD STAND IN THE ABSENCE OF CONVINCING EVIDENCE OF FRAUD, COLLUSION, BAD FAITH OR LACK OF PROPER FACTUAL BASIS. 37 COMP. GEN. 703. WE FIND NO BASIS TO CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION IN THIS CASE WAS IMPROPER OR SUBJECT TO QUESTION BY OUR OFFICE. MOREOVER, OUR OFFICE HAS NO WAY OF KNOWING THAT A MORE COMPLETE INVESTIGATION OF THE BIDDER'S CAPABILITIES BEFORE AWARD WOULD HAVE PRODUCED A DIFFERENT RESULT. WHILE THE CONTRACTOR IS LATE IN DELIVERY UNDER ITS CONTRACT, WE CANNOT SAY THAT THE PROCUREMENT AGENCY SHOULD HAVE FORESEEN SUCH AN EVENTUALITY AND DENIED AN AWARD TO CORROBILT ON THE BASIS THAT IT WAS A NONRESPONSIBLE BIDDER. AS A MATTER OF FACT, THE CONTRACTING OFFICER HAS ADVISED THAT ABOUT A MONTH AFTER THE CONTRACT WAS AWARDED AN INVESTIGATION WAS MADE OF THE CONTRACTOR AND AT THAT TIME IT APPEARED TO THE CONTRACTING OFFICER THAT THE CONTRACTOR UNDERSTOOD THE SPECIFICATIONS AND THAT IT WOULD BE ABLE TO PERFORM ON TIME. THUS, IT IS THOROUGHLY CONJECTURAL THAT IT MIGHT HAVE BEEN DETERMINED BEFORE AWARD THAT CORROBILT DID NOT HAVE A PROPER UNDERSTANDING OF THE SPECIFICATIONS OR THAT IT WOULD NOT BE ABLE TO PERFORM ON TIME.

YOU HAVE POINTED TO AN INCONSISTENCY IN THE INVITATION FOR BIDS IN THAT THE INSPECTION AND ACCEPTANCE PROVISION PERTAINING TO F.O.B. DESTINATION BIDS REQUIRED THE CONTRACTOR TO FURNISH A CERTIFICATE OF COMPLIANCE THAT THE INSULATION MATERIAL UTILIZED IN THE LINING CONFORMS TO URETHANE FOAM TYPE DNP 350DS-1 OR ITS EQUIVALENT AS REFERENCED IN INTERIM FEDERAL SPECIFICATION PPP-C-001266, WHEREAS, THE INSPECTION AND ACCEPTANCE PROVISION PERTAINING TO F.O.B. ORIGIN BIDS DID NOT CONTAIN SUCH A REQUIREMENT. YOU STATE THAT THE OMISSION HAS THE EFFECT OF FAVORING BIDDERS IN THE VICINITY OF CALIFORNIA WHERE THE ARTICLES ARE TO BE DELIVERED AND WHERE CORROBILT IS LOCATED. THE CONTRACTING OFFICER HAS ADVISED THAT THE REQUIREMENT FOR CERTIFICATION WAS INADVERTENTLY INCLUDED IN THE INVITATION AS IT IS USED ONLY IN SITUATIONS WHERE THE ARTICLES PURCHASED ARE TO BE INSPECTED FOR COMPLIANCE AT DESTINATION. IN THIS CASE, THE INVITATION PROVIDED IN THE INSPECTION AND ACCEPTANCE PROCEDURE FOR F.O.B. DESTINATION BIDS FOR INSPECTION AT THE CONTRACTOR'S PLANT OR WAREHOUSE. HOWEVER, THE CERTIFICATION REQUIREMENT IS NOT CONSIDERED BY THE CONTRACTING OFFICER TO HAVE CREATED ANY ADDITIONAL SUBSTANTIVE REQUIREMENT FOR F.O.B. DESTINATION BIDDERS, SINCE THE CITED SPECIFICATION REQUIRES THE CONTRACTOR IN ANY EVENT TO UTILIZE THE SAME LINING MATERIAL AND TO CONDUCT TESTS TO DETERMINE COMPLIANCE WITH THE SPECIFICATION OR, IN LIEU THEREOF, TO FURNISH CERTIFICATES OF QUALITY SUPPLIED BY THE MANUFACTURERS OF THE MATERIALS. THUS, IT IS NOT APPARENT THAT CORROBILT GAINED ANY MATERIAL ADVANTAGE BY THE OMISSION OF THE CERTIFICATION REQUIREMENT FROM THE F.O.B. ORIGIN INSPECTION AND ACCEPTANCE PROCEDURE IN THE INVITATION.

THE DEFENSE SUPPLY AGENCY HAS ADVISED THAT ALTHOUGH THE CONTRACTOR IS DELIVERING THE CONTAINERS LATE, IT IS CONSIDERED TO BE IN THE GOVERNMENT'S INTEREST TO PERMIT THE CONTRACTOR TO CONTINUE TO PERFORM RATHER THAN TERMINATING IT FOR DEFAULT. FURTHER, IT HAS ADVISED THAT A CONTAINER HAS BEEN TESTED BY DEFENSE DEPOT TRACY BY APPLYING THE ICING STANDARDS SET FORTH IN DSAR 4145.21 (PREPARATION FOR SHIPMENT AND SHIPPING PROCEDURES FOR MEDICAL MATERIAL REQUIRING FREEZING OR REFRIGERATION), AND IT HAS BEEN FOUND CAPABLE OF KEEPING THE CONTENTS FROZEN, BUT THE TESTS ARE NOT REGARDED AS CONCLUSIVE BECAUSE THE RECORDING INSTRUMENT WAS NOT ABLE TO RECORD TEMPERATURES BELOW 30 DEGREES. IT IS STATED THAT ADDITIONAL CONTAINERS WILL THEREFORE BE FORWARDED TO DEFENSE PERSONNEL SUPPORT CENTER FOR TESTING AND IF THE CONTAINERS FAIL TO MAINTAIN THE CONTENTS AT A TEMPERATURE BELOW 25 DEGREES SOME ADJUSTMENT WILL BE MADE BY DEFENSE DEPOT TRACY IN THE ICING INSTRUCTIONS WHICH IT WILL USE FOR THE CONTAINERS.

YOU CONTEND THAT CORROBILT SHOULD BE TERMINATED FOR DEFAULT FOR LATE DELIVERY AND FAILURE TO COMPLY WITH THE STANDARDS OF DSAR 4145.21. ADDITIONALLY, YOU QUESTION THE MODIFICATION OF ICING INSTRUCTIONS WITHOUT APPROVAL FROM THE DEFENSE PERSONNEL SUPPORT CENTER.

THE DETERMINATION AS TO WHETHER THE PUBLIC INTEREST REQUIRES TERMINATION OF A CONTRACT IS A MATTER FOR ADMINISTRATIVE DECISION AND DOES NOT REST WITH THIS OFFICE. 18 COMP. GEN. 826. INSOFAR AS ANY FAILURE OF THE CONTAINERS TO MEET THE DSAR 4145.21 STANDARDS MAY BECOME INVOLVED, IT IS PERTINENT THAT NEITHER THE INVITATION NOR THE SPECIFICATIONS CITED IN THE INVITATION REQUIRED THE CONTRACTOR TO BUILD A CONTAINER TO MEET THE DSAR STANDARDS. THEREFORE, IT WAS UNDER NO CONTRACTUAL OBLIGATION TO DO SO AND ANY FAILURE IN THIS RESPECT WOULD NOT BE A PROPER LEGAL GROUNDS FOR DEFAULT TERMINATION. HOWEVER, THE DEFENSE SUPPLY AGENCY HAS ADVISED THAT DEFENSE PERSONNEL SUPPORT CENTER, THE SPECIFICATION PREPARING ACTIVITY, IS CONSIDERING REVISING THE SPECIFICATION TO INCLUDE THERMAL AND PERFORMANCE REQUIREMENTS AND TESTS FOR FUTURE USE. THUS, ANY DEFICIENCY IN THERMAL REQUIREMENTS FOR THERMAL CONTAINERS MAY BE CURED IN FUTURE PROCUREMENTS BY APPROPRIATE SPECIFICATION REVISIONS. ALSO, UPON FURTHER INQUIRY TO THE DEFENSE SUPPLY AGENCY, OUR OFFICE HAS BEEN ADVISED INFORMALLY THAT DEFENSE DEPOT TRACY HAS REQUESTED DEFENSE PERSONNEL SUPPORT CENTER TO FURNISH REICING INSTRUCTIONS TO BE USED WITH RESPECT TO THE CORROBILT CONTAINERS IN THE EVENT THE CONTAINERS DO NOT COMPLY WITH THE DSAR STANDARDS.