B-162534, NOV. 3, 1967

B-162534: Nov 3, 1967

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A SECOND LOW BIDDER WHO ALLEGES UNFAIRNESS BECAUSE THE MANUFACTURER WHO WAS THE SUCCESSFUL BIDDER REQUIRED A BOND GUARANTEE PAYMENT FOR FURNISHING THE EQUIPMENT MAY NOT HAVE THE ALLEGATION OF UNFAIRNESS SUPPORTED SINCE THE MANUFACTURER OFFERED EQUIPMENT TO THE COMPETING BIDDER AND THE GOVT. THE BOND GUARANTEE PAYMENT ON SALES TO PRIVATE FIRMS IS MATTER OF FISCAL POLICY INTERNAL TO THE MANUFACTURER IN WHICH GAO WOULD NOT BE JUSTIFIED IN INTERFERING. THE IFB WAS ISSUED IN THIS MANNER BECAUSE THE ENTIRE JOB INCLUDING THE SUPPLY OF THE EQUIPMENT. SINGULAR CONTRACTOR RESPONSIBILITY FOR THE TOTAL PROJECT WAS CONSIDERED ESSENTIAL. THE FOREGOING NECESSITATED A BID PROVISION STATING -AWARD WILL BE MADE FOR THE TOTAL LUMP SUM PRICE OF SCHEDULE I AND SCHEDULE II TO THAT RESPONSIBLE BIDDER WHOSE BID CONFORMING TO THE REQUIREMENTS OF THIS INVITATION FOR BIDS WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT.

B-162534, NOV. 3, 1967

BIDS - BONDS - MANUFACTURER'S REQUIREMENT DECISION TO WELLESLEY CORPORATION CONCERNING PROTEST TO AWARD TO FIELD EMISSION CORP. FOR LABORATORY EQUIPMENT FOR DEPT. OF DEFENSE. A SECOND LOW BIDDER WHO ALLEGES UNFAIRNESS BECAUSE THE MANUFACTURER WHO WAS THE SUCCESSFUL BIDDER REQUIRED A BOND GUARANTEE PAYMENT FOR FURNISHING THE EQUIPMENT MAY NOT HAVE THE ALLEGATION OF UNFAIRNESS SUPPORTED SINCE THE MANUFACTURER OFFERED EQUIPMENT TO THE COMPETING BIDDER AND THE GOVT. AT THE IDENTICAL PRICE. THE BOND GUARANTEE PAYMENT ON SALES TO PRIVATE FIRMS IS MATTER OF FISCAL POLICY INTERNAL TO THE MANUFACTURER IN WHICH GAO WOULD NOT BE JUSTIFIED IN INTERFERING.

TO WELLESLEY CORPORATION:

WE REFER TO A TELEGRAM DATED SEPTEMBER 21, 1967, AND CONFIRMING LETTER OF THE SAME DATE, FROM YOUR COUNSEL PROTESTING AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. DAAG17-68-B 0002, COVERING THE CONSTRUCTION OF A PHYSICAL CHEMISTRY LABORATORY AND THE FURNISHING OF LABORATORY EQUIPMENT.

IN A REPORT TO THIS OFFICE THE CONTRACTING OFFICER HAS EXPLAINED THE REQUIREMENTS OF THIS PROCUREMENT AS FOLLOWS:

"THE INVITATION FOR BIDS CONSISTED OF TWO BID SCHEDULES. BID SCHEDULE I CONTAINED REQUIREMENTS FOR LABORATORY CONSTRUCTION WORK AND BID SCHEDULE II CONTAINED REQUIREMENTS FOR EQUIPMENT IN PLACE WHICH INCLUDED THE FURNISHING AND INSTALLATION OF THE PULSED RADIATION SOURCE. THE IFB WAS ISSUED IN THIS MANNER BECAUSE THE ENTIRE JOB INCLUDING THE SUPPLY OF THE EQUIPMENT, THE INSTALLATION OF SAME AND THE CONSTRUCTION WORK CONSTITUTED AN INTEGRATED REQUIREMENT. WORK ON EACH BID SCHEDULE WOULD BE PERFORMED IN THE SAME PHYSICAL AREA; BOTH SEGMENTS OF THE WORK WOULD INVOLVE PERFORMANCE BY THE SAME TRADESMEN; AND SINGULAR CONTRACTOR RESPONSIBILITY FOR THE TOTAL PROJECT WAS CONSIDERED ESSENTIAL. THE FOREGOING NECESSITATED A BID PROVISION STATING -AWARD WILL BE MADE FOR THE TOTAL LUMP SUM PRICE OF SCHEDULE I AND SCHEDULE II TO THAT RESPONSIBLE BIDDER WHOSE BID CONFORMING TO THE REQUIREMENTS OF THIS INVITATION FOR BIDS WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED

YOUR PROTEST IS BASED ESSENTIALLY UPON FIELD EMISSION CORPORATION'S REQUIREMENT, AS A CONDITION OF FURNISHING THE LABORATORY EQUIPMENT TO YOU, OF A BOND GUARANTEEING PAYMENT THEREFOR. INASMUCH AS FIELD EMISSION ALSO SUBMITTED A BID TO THE GOVERNMENT AS PRIME CONTRACTOR FOR THE PROCUREMENT, WHICH WAS THE LOWEST AGGREGATE BID OF ANY RECEIVED, YOU OBJECT TO AN AWARD TO IT SINCE YOUR BID WOULD HAVE BEEN LOW IF FIELD EMISSION HAD NOT ACTED UNFAIRLY BY EFFECTIVELY REQUIRING YOU TO INCREASE THE AMOUNT OF YOUR BID TO COVER THE PREMIUM OF THE PAYMENT BOND.

THIS OFFICE IS UNAWARE OF ANY STATUTE OR REGULATION WHICH WOULD RESTRICT A PRINCIPAL SUPPLIER OF A MAJOR PIECE OF EQUIPMENT FROM BIDDING ON A GOVERNMENT CONTRACT FOR FURNISHING AND INSTALLING SUCH EQUIPMENT. IMPOSE SUCH A RESTRICTION WITHOUT EXPRESS STATUTORY AUTHORITY WOULD CONFLICT DIRECTLY WITH THE FUNDAMENTAL PRINCIPLE OF PROCUREMENT LAW THAT BIDS BE SOLICITED FROM ALL QUALIFIED SOURCES TO ASSURE FULL AND FREE COMPETITION. SEE 10 U.S.C. 2305 (A) AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 2-102.1 (A). IN ADDITION, THE PROVISION IN ASPR SEC. 2-407.1, THAT CONTRACTING OFFICERS AWARD ONLY THE MOST ADVANTAGEOUS CONTRACTS, PRICE AND OTHER FACTORS CONSIDERED, REQUIRES HIM IN THIS CASE TO AWARD THE CONTRACT TO THE LOWEST BIDDER, FIELD EMISSION.

IN OUR OPINION, YOUR ALLEGATION OF UNFAIRNESS IS NOT SUPPORTED BY THE FACTS OF RECORD SINCE FIELD EMISSION OFFERED ITS EQUIPMENT TO YOU AND THE GOVERNMENT AT THE IDENTICAL PRICE OF $63,030. FURTHERMORE, WE BELIEVE THE REQUIREMENT OF A BOND GUARANTEEING PAYMENT ON SALES TO PRIVATE FIRMS IS PRIMARILY A MATTER OF FISCAL POLICY INTERNAL TO FIELD EMISSION IN WHICH WE ARE IN NO WAY JUSTIFIED TO INTERFERE. IT IS NOTED THAT YOUR BID FOR THE LABORATORY EQUIPMENT WAS $67,000, OR $3,970 OVER YOUR COST, AND, ALTHOUGH YOU HAVE NOT STATED THE PAYMENT BOND'S COST, THE CONTRACTING OFFICER HAS ESTIMATED $630 TO BE A REASONABLE PRICE THEREFOR. IN VIEW OF THE FACT THAT FIELD EMISSION'S OVERALL BID WAS ONLY $687 LOWER THAN YOURS, IT DOES NOT APPEAR THAT YOUR CONTENTION THAT THE BOND REQUIREMENT WAS SOLELY RESPONSIBLE FOR YOUR NOT BEING THE LOW BIDDER IS SUPPORTED.

IT ALSO APPEARS THAT BY AMENDMENT NO. 4 TO THE INVITATION THE SPECIFICATIONS WERE BROADENED TO PERMIT THE FURNISHING OF AN EQUAL ARTICLE IN LIEU OF THE FIELD EMISSION CORPORATION'S PULSED RADIATION SOURCE, WHICH WOULD INDICATE THAT YOU WERE NOT RESTRICTED TO THAT FIRM'S PRODUCT.

IN ANY EVENT, WE FIND NO VALID BASIS ON WHICH TO QUESTION THE LEGALITY OF THE ACTION PROPOSED TO BE TAKEN BY THE PROCURING AGENCY TO AWARD THE CONTRACT TO THE LOWEST RESPONSIBLE BIDDER, AND YOUR PROTEST MUST THEREFORE BE DENIED.