B-162826, JANUARY 23, 1968, 47 COMP. GEN. 390

B-162826: Jan 23, 1968

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THE REJECTION OF A LOW PROPOSAL OFFERING TO FURNISH "OVERHAULED CERTIFIED" CYLINDERS WAS PROPER. WAS WITHIN THE PURVIEW OF PARAGRAPH 1 1208 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH AUTHORIZES THE PROCUREMENT OF USED AND RECONDITIONED MATERIAL AND FORMER GOVERNMENT SURPLUS MATERIAL. IN VIEW OF THE FACT THAT THE WORD "OVERHAULED" IN INDUSTRY AND IN GOVERNMENT ENGINEERING AND PROCUREMENT AREAS IS ACCEPTED TO INDICATE A CONDITION OTHER THAN NEW AND TO IMPLY A REPAIRED CONDITION. THAT THE LOW CONFIRMED PRICES OFFERED SUPPORT THE CONCLUSION NEW MATERIAL WAS NOT PROPOSED AND WOULD NOT BE USED IN THE PERFORMANCE OF THE CONTRACT. THE CONTRACTING OFFICER IS CONSIDERED NOT TO HAVE HAD THE DUTY TO "FERRET" OUT THE UNIQUE MEANING OF AND COMPANY POLICY ATTACHED TO THE USE OF THE WORDS "OVERHAULED CERTIFIED.'.

B-162826, JANUARY 23, 1968, 47 COMP. GEN. 390

CONTRACTS - SPECIFICATIONS - "NEW MATERIAL" CLAUSE - EXCEPTION UNDER A SOLICITATION THAT PROVIDED NO EXCEPTION TO FURNISHING NEW OUTER CYLINDERS FOR AIRCRAFT, THE REJECTION OF A LOW PROPOSAL OFFERING TO FURNISH "OVERHAULED CERTIFIED" CYLINDERS WAS PROPER, NOTWITHSTANDING DELAYED AWARD INFORMATION, AND WAS WITHIN THE PURVIEW OF PARAGRAPH 1 1208 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH AUTHORIZES THE PROCUREMENT OF USED AND RECONDITIONED MATERIAL AND FORMER GOVERNMENT SURPLUS MATERIAL, AND IN VIEW OF THE FACT THAT THE WORD "OVERHAULED" IN INDUSTRY AND IN GOVERNMENT ENGINEERING AND PROCUREMENT AREAS IS ACCEPTED TO INDICATE A CONDITION OTHER THAN NEW AND TO IMPLY A REPAIRED CONDITION, AND THAT THE LOW CONFIRMED PRICES OFFERED SUPPORT THE CONCLUSION NEW MATERIAL WAS NOT PROPOSED AND WOULD NOT BE USED IN THE PERFORMANCE OF THE CONTRACT, THE CONTRACTING OFFICER IS CONSIDERED NOT TO HAVE HAD THE DUTY TO "FERRET" OUT THE UNIQUE MEANING OF AND COMPANY POLICY ATTACHED TO THE USE OF THE WORDS "OVERHAULED CERTIFIED.' HOWEVER, IN FUTURE PROCUREMENTS, AWARD INFORMATION SHOULD ISSUE PROMPTLY.

TO THE SMITH AND SMITH AIRCRAFT CO., JANUARY 23, 1968:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 23, 1967, SIGNED BY MR. JAY P. COOPER AS YOUR ATTORNEY, PROTESTING AGAINST THE AWARD BY THE DEPARTMENT OF THE AIR FORCE OF A CONTRACT TO AN-AIR AIRCRAFT PARTS (AN AIR) FOR THE FURNISHING OF OUTER CYLINDERS FOR T-33 AIRCRAFT PURSUANT TO SOLICITATION NO. F42600-67-R-8639, ISSUED MAY 8, 1967, BY OGDEN AIR MATERIEL AREA, HILL AIR FORCE BASE, UTAH. THE SUBSTANCE OF YOUR PROTEST IS THAT YOU SUBMITTED THE LOW PROPOSAL, BUT DUE TO MISINTERPRETATION BY THE PROCURING ACTIVITY OF A NOTATION WHICH YOU HAD INCLUDED IN YOUR PROPOSAL, ON THE PAGE SETTING FORTH THE ITEM DESCRIPTION AND LISTING YOUR PRICES, YOU WERE CONSIDERED TO BE NONRESPONSIVE AND THEREFORE INELIGIBLE FOR AWARD.

THE SOLICITATION WAS ISSUED TO NINE POSSIBLE SOURCES OF SUPPLY. REQUEST WAS MADE FOR PRICES ON A BASIC QUANTITY OF 80 UNITS UNDER ITEM 1 AND THREE DIFFERENT OPTIONAL QUANTITIES OF THE SAME CYLINDER UNDER ITEMS 2, 3 AND 4. FOR EVALUATION PURPOSES, ONLY THE PRICES QUOTED FOR ITEM 1 WERE TO BE CONSIDERED. UNDER THE LIST OF GENERAL PROVISIONS OF THE SOLICITATION, INCLUDED AS ATTACHMENT NO. 1 THERETO, THE CLAUSES ENTITLED "NEW MATERIAL" AND "GOVERNMENT SURPLUS," AS PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1208 (A) AND (D), RESPECTIVELY, WERE INCORPORATED BY REFERENCE. THE CLAUSES READ AS FOLLOWS:

NEW MATERIAL (JANUARY 1965)

EXCEPT AS TO ANY SUPPLIES AND COMPONENTS WHICH THE SPECIFICATION OR SCHEDULE SPECIFICALLY PROVIDES NEED NOT BE NEW, THE CONTRACTOR REPRESENTS THAT THE SUPPLIES AND COMPONENTS INCLUDING ANY FORMER GOVERNMENT PROPERTY INDENTIFIED PURSUANT TO THE "GOVERNMENT SURPLUS" CLAUSE OF THIS CONTRACT TO BE PROVIDED UNDER THIS CONTRACT ARE NEW (NOT USED OR RECONDITIONED, AND NOT OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY). IF AT ANY TIME DURING THE PERFORMANCE OF THIS CONTRACT, THE CONTRACTOR BELIEVES THAT THE FURNISHING OF SUPPLIES OR COMPONENTS WHICH ARE NOT NEW IS NECESSARY OR DESIRABLE, HE SHALL NOTIFY THE CONTRACTING OFFICER IMMEDIATELY, IN WRITING, INCLUDING THE REASONS THEREFOR AND PROPOSING ANY CONSIDERATION WHICH WILL FLOW TO THE GOVERNMENT IF AUTHORIZATION TO USE SUCH SUPPLIES IS GRANTED.

GOVERNMENT SURPLUS (JANUARY 1965)

(A) IN THE EVENT THE BID OR PROPOSAL IS BASED ON FURNISHING ITEMS OR COMPONENTS WHICH ARE FORMER GOVERNMENT SURPLUS PROPERTY OR RESIDUAL INVENTORY RESULTING FROM TERMINATED GOVERNMENT CONTRACTS, A COMPLETE DESCRIPTION OF THE ITEMS OR COMPONENTS, QUANTITY TO BE USED, NAME OF GOVERNMENT AGENCY FROM WHICH ACQUIRED, AND DATE OF ACQUISITION SHALL BE SET FORTH ON A SEPARATE SHEET TO BE ATTACHED TO BID OR PROPOSAL. NOTWITHSTANDING ANY INFORMATION PROVIDED IN ACCORDANCE WITH THIS PROVISION, ITEMS FURNISHED BY THE CONTRACTOR MUST COMPLY IN ALL RESPECTS WITH THE SPECIFICATIONS CONTAINED HEREIN.

(B) EXCEPT AS DISCLOSED BY THE CONTRACTOR IN (A) ABOVE, NO PROPERTY OF THE TYPE DESCRIBED HEREIN SHALL BE FURNISHED UNDER THIS CONTRACT UNLESS APPROVED IN WRITING BY THE CONTRACTING OFFICER. THERE WAS NO PROVISION IN THE SOLICITATION AUTHORIZING THE FURNISHING OF ANYTHING BUT NEW MATERIAL.

FIVE PROPOSALS, ONE OF WHICH WAS LATE, WERE RECEIVED. THE LATE PROPOSAL WAS OPENED, AS IS PROVIDED IN ASPR 3-506 (A), AND FOUND TO OFFER NEW MANUFACTURED CYLINDERS. THE PRICES QUOTED THEREIN WERE NOTED, BUT THE PROPOSAL WAS NOT CONSIDERED FOR AWARD. EACH OF THE FOUR TIMELY PROPOSALS INDICATED THAT GOVERNMENT SURPLUS PARTS WERE BEING OFFERED. TWO OFFERORS, AN-AIR AND CALIFORNIA AIRFRAME PARTS CO. (CALIFORNIA AIRFRAME), QUOTED PRICES FOR 50 AND 25 NEW SURPLUS UNITS, RESPECTIVELY, UNDER ITEM 1, AND ALSO OFFERED "OVERHAULED CERTIFIED" UNITS AT SUBSTANTIALLY LOWER PRICES. SOURCES FROM WHICH EACH OFFEROR HAD PURCHASED THE OFFERED QUANTITIES OF ALL FOUR ITEMS WERE STATED IN ACCORDANCE WITH THE PROVISIONS OF THE "GOVERNMENT SURPLUS" CLAUSE. A THIRD OFFEROR QUOTED A UNIT PRICE FOR ALL QUANTITIES OF EACH ITEM, WHICH WAS THE LOWEST PRICE QUOTED IN ALL OF THE PROPOSALS, BUT A NOTATION ENTERED BY THE OFFEROR ON PAGE 7 OF ITS PROPOSAL (THE SAME PAGE OF THE OFFER FORM ON WHICH YOUR NOTATION WAS MADE) SPECIFICALLY STATED THAT THE PARTS OFFERED HAD BEEN PROCURED AT VARIOUS SURPLUS GOVERNMENT SALES FROM 1961 THROUGH 1965 AND WOULD THEREFORE BE "REFURBISHED IN ACCORDANCE WITH FACTORY APPROVED ENGINEERING DATA.' YOUR PROPOSAL OFFERED TO SUPPLY ALL QUANTITIES OF EACH ITEM, AND YOUR UNIT PRICE OF $522 FOR ITEM 1 WAS APPROXIMATELY $100 LOWER THAN THE UNIT PRICE WHICH AN-AIR HAD QUOTED FOR 50 NEW SURPLUS UNITS UNDER THE SAME ITEM. HOWEVER, SINCE YOU HAD INSERTED THE NOTATION "OVERHAULED CERTIFIED" ON THE OFFER FORM, AS STATED ABOVE, THE PROCURING ACTIVITY CONSTRUED YOUR PROPOSAL AS OFFERING TO SUPPLY ITEMS WHICH WERE NOT NEW SURPLUS UNITS.

SHORTLY AFTER THE PROPOSALS WERE OPENED, THE PROCURING ACTIVITY COMMUNICATED WITH YOU AND THE OTHER THREE TIMELY OFFERORS AND INVITED ALL OF YOU TO MAKE ANY DESIRED REVISIONS IN YOUR PROPOSALS. THERE IS NO INDICATION IN THE RECORD THAT THE OFFEROR WHO PROPOSED TO FURNISH ,REFURBISHED" UNITS MADE ANY CHANGE IN ITS ORIGINAL PROPOSAL. THE REMAINING THREE PROPOSALS WERE REVISED AS TO PRICE BEFORE AWARD AS FOLLOWS:

1. IN A TELEGRAM DATED JUNE 20, 1967, YOU OFFERED TO FURNISH ALL QUANTITIES OF ALL FOUR ITEMS AT A REDUCED UNIT PRICE OF $372.50 CONDITIONED ON AN "ALL OR NONE" AWARD, BUT YOU SPECIFICALLY STATED THAT ALL OTHER TERMS AND CONDITIONS OF YOUR PROPOSAL REMAINED UNCHANGED.

2. AN-AIR REDUCED ITS UNIT PRICE FOR OVERHAULED CYLINDERS TO APPROXIMATELY THE SAME AMOUNT AS YOUR "ALL OR NONE" UNIT PRICE BUT SPECIFIED THAT THE ORIGINAL UNIT PRICE QUOTED ON THE "NEW UNUSED SURPLUS CYLINDERS" WAS UNCHANGED.

3. CALIFORNIA AIRFRAME REDUCED TO $750 ITS ORIGINAL UNIT PRICE ON THE 25 NEW SURPLUS CYLINDERS OFFERED UNDER ITEM 1 BUT STIPULATED THAT ALL OTHER CONDITIONS OF ITS ORIGINAL PROPOSAL WERE UNCHANGED. (IN THIS CONNECTION, IT MAY BE NOTED THAT THE UNIT PRICE WHICH CALIFORNIA AIRFRAME HAD QUOTED FOR OVERHAULED CYLINDERS WAS ONLY SLIGHTLY HIGHER THAN YOUR "ALL OR NONE" UNIT PRICE.)

ALTHOUGH NEW CYLINDERS WERE REQUIRED BY THE TERMS OF THE SOLICITATION, THE PROCURING ACTIVITY TOOK NOTE OF THE FACT THAT THE PRICES AT WHICH OVERHAULED OR REFURBISHED CYLINDERS COULD BE OBTAINED WERE SUBSTANTIALLY LOWER THAN THE PRICES AT WHICH THE TOTAL OF 75 NEW SURPLUS CYLINDERS HAD BEEN OFFERED BY THE COMBINED OFFERS OF AN-AIR AND CALIFORNIA AIRFRAME AND THERFORE REQUESTED THE TECHNICAL PERSONNEL AT THE OGDEN AIR MATERIEL AREA TO MAKE A DETERMINATION AS TO WHICH UNITS WOULD SATISFY THE EXACT AIR FORCE REQUIREMENTS. THE TECHNICAL STAFF VERBALLY ADVISED THE PROCURING ACTIVITY ON AUGUST 11 AND 23 THAT ITS RECOMMENDATION WAS FOR THE PROCUREMENT OF NEW SURPLUS ITEMS ONLY RATHER THAN OVERHAULED ITEMS. IN A MEMORANDUM DATED AUGUST 25, CONFIRMING THE RECOMMENDATION, THE CHIEF, SERVICE ENGINEERING DIVISION, OPERATIONS AND SUPPORT BRANCH, DIRECTORATE, MATERIEL MANAGEMENT, EXPLAINED THAT NORMALLY THE PROCUREMENT OF OVERHAULED OR REFURBISHED ITEMS IS NOT PREFERRED BECAUSE THERE IS NO METHOD OF DETERMINING THE USAGE OR CONDITIONS TO WHICH SUCH ITEMS WERE SUBJECTED PRIOR TO OVERHAUL AND USUALLY THE REMAINING SERVICE LIFE OF OVERHAULED ITEMS IS CONSIDERABLY SHORTER THAN THE SERVICE LIFE OF NEW ITEMS; ACCORDINGLY, IT WAS STATED, THE PROCUREMENT OF THE NEW SURPLUS ITEMS (AVAILABLE IN THIS CASE) WAS PREFERRED TO THE PURCHASE OF THE OVERHAULED SURPLUS ITEMS EVEN THOUGH THE INITIAL PRICE OF THE NEW ITEMS MIGHT BE SLIGHTLY HIGHER THAN THE PRICE OF THE OVERHAULED ITEMS.

IN VIEW OF THE FOREGOING, ALL PROPOSALS FOR OTHER THAN NEW SURPLUS UNITS WERE REJECTED BY THE PROCURING ACTIVITY AS NONRESPONSIVE, AND THERE BEING ONLY 75 NEW UNITS AVAILABLE, THE PROCUREMENT QUANTITY WAS REDUCED ACCORDINGLY. THEREFORE, THE AWARD WHICH WAS MADE TO AN-AIR ON SEPTEMBER 28 OF CONTRACT NO. F42600-68-C-1097 COVERED ONLY 50 NEW SURPLUS CYLINDERS AND THE AWARD ON THE SAME DATE TO CALIFORNIA AIRFRAME OF CONTRACT NO. F42600-68-C-1098 COVERED ONLY 25 NEW SURPLUS CYLINDERS AT THE RESPECTIVE UNIT PRICES OF $623 AND $750.

YOU STATE THAT YOU FIRST LEARNED OF THE AWARD TO AN-AIR UPON READING A NOTICE IN THE COMMERCE BUSINESS DAILY OF OCTOBER 16, 1967. IN ADDITION, YOU STATE THAT YOU WERE NOT ADVISED OF THE BASIS FOR REJECTION OF YOUR LOW PROPOSAL UNTIL YOU COMMUNICATED WITH THE PROCURING ACTIVITY BY TELEPHONE ON OCTOBER 17, AT WHICH TIME YOU WERE INFORMED THAT THE PROCURING ACTIVITY HAD INTERPRETED THE WORDS "OVERHAULED CERTIFIED" IN YOUR PROPOSAL AS INDICATING THAT THE MATERIAL WHICH YOU OFFERED HAD BEEN REWORKED THUS RENDERING THE PROPOSAL NONRESPONSIVE TO THE SOLICITATION.

YOU ASSERT THAT YOUR DEFINITION OF THE TERM "OVERHAULED CERTIFIED" IS THAT "ANY PART WHICH HAS BEEN IN STORAGE FOR ANY LENGTH OF TIME, ALTHOUGH UNUSED AND IN LIKE-NEW CONDITION, IS, PRIOR TO FULFILLING A GOVERNMENT CONTRACT REQUIREMENT, REMOVED FROM THE CONTAINER AND INSPECTED FOR CORROSION, SCRATCHES, REPLACEMENT OF CURE-DATED ITEMS, AND COMPLIANCE TO CURRENT DATA.' YOU STATE THAT IT IS YOUR POLICY TO SUBJECT ALL PARTS WHICH YOU FURNISH TO THE DEPARTMENT OF DEFENSE TO SUCH PROCEDURE AND TO CERTIFY TO THE GOVERNMENT THAT SUCH PROCESSING IS ACCOMPLISHED BY A FEDERAL AVIATION AGENCY APPROVED SHOP. SUCH PRACTICE, YOU CONTEND, IS NOT ONLY IN THE BEST INTEREST OF THE GOVERNMENT BUT, IN FACT, MEETS THE INTENT OF PARAGRAPH A.1.A. ON PAGE 7 OF THE SOLICITATION, WHICH READS AS FOLLOWS: A. INSPECTION REQUIREMENTS FOR MANUFACTURER FURNISHED SURPLUS PARTS: OFFEROR HEREBY CERTIFIES THAT HE ( ( IS, ( ( IS NOT, OFFERING GOVERNMENT SURPLUS PARTS.

PARTS FURNISHED BY THE SURPLUS DEALER MUST MEET STANDARD AIR FORCE QUALITY REQUIREMENTS FOR MILITARY USE AND CONFORM WITH THE CRITERIA I.E., DIMENSIONS, MATERIAL, FINISH, ETC., SPECIFIED ON THE APPLICABLE ENGINEERING DATA. INSPECTION REQUIREMENTS WILL BE AS SPECIFIED BELOW:

1. THE FOLLOWING INSPECTION REQUIREMENTS APPLY TO ITEM (S) OF THIS CONTRACT, AND WILL BE ACCOMPLISHED BY QAR.

A. ALL ITEMS WILL BE VISUALLY INSPECTED FOR ANY DEFECTS; E.G., CORROSION, PHYSICAL DAMAGE, PACKAGING WEAR, OR INDICATIONS OF REWORK OR PRIOR USE.

IN THE CIRCUMSTANCES, YOU CONTEND THAT THE REJECTION OF YOUR PROPOSAL WAS BASED ON A NEBULOUS TECHNICALITY, THAT IS, THE PROCURING ACTIVITY'S DETERMINATION, WHICH YOU CLAIM IS ARBITRARY, THAT THE LONG ESTABLISHED INSPECTION PROCEDURE EMPLOYED BY YOU IN PERFORMING DEFENSE CONTRACTS, CONSTITUTED REWORK OF THE ITEMS OFFERED. YOU FURTHER CONTEND THAT THE FAILURE OF THE PROCURING ACTIVITY TO DISCUSS YOUR PROPOSAL WITH YOU IN ORDER TO AFFORD YOU AN OPPORTUNITY TO CLARIFY THE MATTER BEFORE AWARD WAS IMPROPER SINCE YOU WERE WELL WITHIN THE COMPETITIVE RANGE, AS CONTEMPLATED BY ASPR 3-805.1, AND THAT SUCH OMISSION, AS WELL AS THE PROCURING ACTIVITY'S FURTHER FAILURE TO FURNISH YOU POST-AWARD INFORMATION SETTING FORTH THE REASONS FOR NOT ACCEPTING YOUR PROPOSAL, AS REQUIRED BY ASPR 3- 508.3, VIOLATED THE BASIC TENET OF GOVERNMENT PROCUREMENT. ACCORDINGLY, YOU REQUEST THAT THE AWARD TO AN-AIR BE CANCELED AND THAT AWARD BE MADE TO YOU.

THE CONTRACTING OFFICER POINTS OUT THAT YOUR PROPOSAL DID NOT DESCRIBE YOUR POLICY REGARDING SURPLUS ITEMS AS OUTLINED IN YOUR PROTEST AND THAT WHEN YOU WERE GIVEN AN OPPORTUNITY TO REVISE YOUR PROPOSAL YOU DID NOT CLARIFY OR EXPLAIN YOUR PROPOSAL. FURTHER, THE CONTRACTING OFFICER STATES THAT SINCE THE "ALL OR NONE" PRICE OF $372.50 PER UNIT, WHICH YOU OFFERED IN YOUR REVISED PROPOSAL, WAS VERY CLOSE TO THE UNIT PRICES FOR WHICH BOTH AN-AIR AND CALIFORNIA AIRFRAME OFFERED "OVERHAULED CERTIFIED" ITEMS AND TO THE LOWEST UNIT PRICE ON ALL FOUR ITEMS FOR WHICH THE ONLY OTHER OFFEROR OFFERED "REFURBISHED" SURPLUS UNITS, IT WAS CONCLUDED THAT ALL OF THE "OVERHAULED CERTIFIED" ITEMS, AS WELL AS THE REFURBISHED" ITEMS, WERE NOT NEW SURPLUS ITEMS. IN ADDITION, THE CONTRACTING OFFICER STATES THAT HE CONCLUDED THAT IF YOU HAD BEEN OFFERING NEW SURPLUS ITEMS, YOUR PRICE (FOR ITEM 1) WOULD HAVE BEEN COMPARABLE TO THE PRICES QUOTED BY AN-AIR AND CALIFORNIA AIRFRAME FOR THE 75 NEW SURPLUS UNITS.

WITH RESPECT TO THE MEANING OF THE WORD "OVERHAULED," THE CONTRACTING OFFICER REPORTS THAT THE COMMONLY USED AND ACCEPTED DEFINITION OF THE WORD IN INDUSTRY AND IN GOVERNMENT ENGINEERING AND PROCUREMENT IS INDICATION OF A CONDITION OTHER THAN NEW AND IMPLICATION OF A REPAIRED CONDITION. FURTHER, THE CONTRACTING OFFICER URGES THAT IT IS OBVIOUS THAT BOTH AN-AIR AND CALIFORNIA AIRFRAME RECOGNIZED THIS FACT AND THEREFORE OFFERED ALTERNATE PRICES FOR NEW SURPLUS ITEMS AND OVERHAULED ITEMS. THE STAFF JUDGE ADVOCATE AT THE PROCURING ACTIVITY CONCURS WITH THE CONTRACTING OFFICER'S CONCLUSIONS AND CALLS ATTENTION TO THE FOLLOWING DEFINITION OF THE WORD "OVERHAUL" IN THE UNITED STATES AIR FORCE DICTIONARY (1956 AIR UNIVERSITY PRESS): THE REBUILDING, OR THE EXTENSIVE REPAIRING AND RECONDITIONING, OF A PIECE OF EQUIPMENT AS AN AIRCRAFT, TRUCK OR THE LIKE OR OF A COMPONENT PART THEREOF WHICH HAS DETERIORATED ESPECIALLY THROUGH FAIR WEAR AND TEAR. CONCERNING THE ISSUANCE OF POST-AWARD NOTIFICATIONS TO THE UNSUCCESSFUL OFFERORS, THE CONTRACTING OFFICER REPORTS THAT THE FAILURE TO TAKE SUCH ACTION WITH THE PROMPTNESS CONTEMPLATED BY THE PROCUREMENT REGULATION WAS UNINTENTIONAL AND WAS OCCASIONED BY THE PROCURING ACTIVITY'S HEAVY WORKLOAD AT THE TIME OF THE AWARDS AND THE FACT THAT THE CONTRACT NEGOTIATOR FOR THIS PROCUREMENT HAD TERMINATED HIS EMPLOYMENT ON SEPTEMBER 8. IT IS FURTHER STATED, HOWEVER, THAT AFTER THE NOTICE OF THE AWARDS WAS PUBLISHED IN THE COMMERCE BUSINESS DAILY, EACH UNSUCCESSFUL OFFEROR WAS NOTIFIED OF THE AWARDS BY LETTER.

WITH REFERENCE TO THE SIGNIFICANCE OF PARAGRAPH A 1.A ON PAGE 7 OF THE SOLICATION, THE CONTRACTING OFFICER STATES THAT SUCH PROVISION WAS INCLUDED SPECIFICALLY TO EMPHASIZE THAT THE ITEMS TO BE FURNISHED WOULD BE INSPECTED FOR THE PURPOSE OF COMPLIANCE WITH THE REQUIREMENTS OF THE "NEW MATERIAL" CLAUSE AND THAT SUCH PROVISION DOES NOT, AND WAS NOT INTENDED TO, CHANGE THE REQUIREMENTS OF THE CLAUSE.

IN VIEW OF THE FOREGOING, HEADQUARTERS UNITED STATES AIR FORCE STATES THAT THE CONTRACTING OFFICER HAD NO DUTY TO "FERRET" OUT YOUR UNIQUE MEANING AND COMPANY POLICY APPLICABLE TO THE WORDS "OVERHAUL CERTIFIED"; THAT YOUR "ALL OR NONE" UNIT PRICE OF $372.50, WHICH IT IS OBSERVED, WAS LOWER BY 50 AND 60 PERCENT, RESPECTIVELY, THAN THE PRICES QUOTED BY AN-AIR AND BY CALIFORNIA AIRFRAME FOR CYLINDERS MADE OF NEW MATERIALS, WHICH THE GOVERNMENT CONSIDERS REASONABLE, SUPPORTS THE CONCLUSION THAT YOU DID NOT PROPOSE TO FURNISH THE NEW MATERIALS REQUIRED BY THE SOLICITATION; AND THAT SINCE NEW MATERIAL WAS DETERMINED TO BE NECESSARY TO MEET THE GOVERNMENT'S REQUIREMENT, THE REJECTION OF YOUR OFFER AS NONRESPONSIVE TO SUCH REQUIREMENT IN THE SOLICITATION WAS PROPER. ACCORDINGLY, HEADQUARTERS USAF CONCURS WITH THE CONTRACTING OFFICER'S RECOMMENDATION THAT YOUR PROTEST BE DENIED.

ASPR 1-1208, WHICH AUTHORIZES PROCUREMENT OF USED AND RECONDITIONED MATERIAL AND FORMER GOVERNMENT SURPLUS PROPERTY IN CERTAIN CIRCUMSTANCES, READS, IN APRT, AS FOLLOWS: (A) GENERALLY, ALL SUPPLIES OR COMPONENTS THEREOF, INCLUDING FORMER GOVERNMENT PROPERTY, PURCHASED BY THE MILITARY DEPARTMENTS SHALL BE NEW (NOT USED OR RECONDITIONED, AND NOT OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY). HOWEVER, THE NEEDS OF THE GOVERNMENT MAY SOMETIMES BE MET, AND ECONOMICS EFFECTED, THROUGH THE PURCHASE OF ITEMS WHICH ARE NOT NEW. SOLICITATIONS AND THE RESULTING CONTRACTS SHALL INCLUDE A CLAUSE, SUBSTANTIALLY AS SET FORTH BELOW, EXCEPT WHEN THE CLAUSE WOULD SERVE NO USEFUL PURPOSE. THIS CLAUSE IS APPROPRIATE FOR USE NOT ONLY IN SUPPLY CONTRACTS, BUT ALSO IN SERVICE CONTRACTS WHICH MAY INVOLVE AN INCIDENTAL FURNISHING OF PARTS, SUCH AS CONTRACTS FOR OVERHAUL, MAINTENANCE OR REPAIR.

(B) IN ALL PROCUREMENTS IN WHICH THE CONTRACTING OFFICER HAS DETERMINED THAT SUPPLIES AND COMPONENTS WHICH ARE USED OR RECONDITIONED BUT WHICH FULLY COMPLY WITH THE SPECIFICATIONS AND OTHER CONTRACT REQUIREMENTS ARE ACCEPTABLE, THE SOLICITATION AND RESULTING CONTRACT SHALL INCLUDE PROVISIONS CLEARLY INDICATING THE SUPPLIES OR COMPONENTS WHICH NEED NOT BE NEW, AND DETAILS CONCERNING THEIR ACCEPTABILITY. IN DETERMINING WHETHER SUCH SUPPLIES AND COMPONENTS MAY BE PURCHASED, THE FOLLOWING CRITERIA SHALL BE CONSIDERED:

(I) SAFETY OF PERSONS OR PROPERTY;

(II) FINAL COST TO THE GOVERNMENT (INCLUDING MAINTENANCE, INSPECTION, TESTING, AND USEFUL LIFE);

(III) PERFORMANCE REQUIREMENTS; AND

(IV)AVAILABILITY AND COST OF NEW SUPPLIES AND COMPONENTS (FOR EXAMPLE, OUT-OF-PRODUCTION ITEMS).

(C) ITEMS PREVIOUSLY SOLD AS GOVERNMENT SURPLUS SHALL NOT BE ACCEPTED UNLESS IT IS DETERMINED THAT THE SURPLUS PROPERTY OFFERED FULLY MEETS THE APPLICABLE SPECIFICATIONS AND OTHER CONTRACT REQUIREMENTS. IN ADDITION, CARE MUST BE EXERCISED TO INSURE THAT THE PRICES PAID FOR SUCH ITEMS ARE REASONABLE GIVING DUE CONSIDERATION TO OVERALL COST SAVINGS TO THE GOVERNMENT WITHOUT AFFECTING QUALITY. WHERE A CONTRACT CALLS FOR MATERIAL TO BE FURNISHED AT COST, THE ALLOWABLE CHARGE FOR ANY GOVERNMENT SURPLUS PROPERTY FURNISHED SHALL BE THE COST AT WHICH THE CONTRACTOR OR HIS AFFILIATE ACQUIRED THE PROPERTY.

UNDER SUCH REGULATIONS, IN THE ABSENCE OF ANY LANGUAGE IN THE SOLICITATION INDICATING THAT THE CYLINDERS IN QUESTION NEED NOT BE NEW, THE FURNISHING OF NEW CYLINDERS, EITHER NEW SURPLUS OR NEW MANUFACTURED, AS REQUIRED BY THE "NEW MATERIAL" CLAUSE INCORPORATED IN THIS SOLICITATION BY REFERENCE, WAS MANDATORY. FURTHER, THE TECHNICAL MEMORANDUM OF AUGUST 25 VERIFIES THAT ONLY NEW CYLINDERS WERE DESIRED BY THE GOVERNMENT. THE BASIC QUESTION FOR DETERMINATION IN RESOLVING YOUR PROTEST, THEREFORE, IS WHETHER THE USE BY YOU OF THE WORDS "OVERHAULED CERTIFIED" IN YOUR PROPOSAL WARRANTED THE REJECTION OF THE PROPOSAL AS AN OFFER OF OTHER THAN NEW CYLINDERS WITHOUT AFFORDING YOU AN OPPORTUNITY TO EXPLAIN THE CONDITION OF THE ITEMS WHICH YOU INTENDED TO FURNISH.

ALTHOUGH YOU STATE THAT IT IS YOUR PRACTICE TO INSPECT NEW ITEMS BEFORE THEIR DELIVERY TO THE GOVERNMENT AND THAT YOU TERM SUCH PROCEDURE "OVERHAULING," YOU DO NOT ALLEGE THAT THE PROCURING ACTIVITY WAS AWARE OF THE PRACTICE OR OF YOUR PECULIAR TERMINOLOGY THEREFOR. FURTHER, WHILE ONE OF THE MEANINGS LISTED FOR THE WORK "OVERHAUL" IN WEBSTER'S SEVENTH NEW COLLEGIATE DICTIONARY, I. E., "TO EXAMINE THROUGHLY," MIGHT BE CONSTRUED AS SUPPORT FOR YOUR INTERPRETATION OF THE WORD, THE SECOND DEFINITION LISTED IN THE SAME PUBLICATION, I. E., "REPAIR," AND THE DEFINITIONS "TO SUBJECT TO STRICT EXAMINATION WITH A VIEW TO CORRECTION OR REPAIR * * *" AND "TO REPAIR (AS BY REPLACEMENT OF WORN PARTS AND READJUSTMENT) SO AS TO RESTORE TO SATISFACTORY WORKING ORDER * * *," WHICH ARE LISTED IN WEBSTER'S THIRD INTERNATIONAL DICTIONARY, GIVE EVEN STRONGER SUPPORT TO THE MEANINGS WHICH ARE REPORTEDLY ASCRIBED TO THE TERM "OVERHAUL" BY THE GOVERNMENT AND INDUSTRY, .E., INDICATING A CONDITION OTHER THAN NEW AND IMPLYING A REPAIRED CONDITION. IN ADDITION, THE DEFINITION GIVEN IN THE AIR FORCE DICTIONARY IS IN ACCORD WITH THE REPORTED GOVERNMENT AND INDUSTRY USAGE OF THE WORD. ACCORDINGLY, AND SINCE TWO OTHER OFFERORS DREW A DISTINCTION BETWEEN NEW SURPLUS CYLINDERS, WHICH THEY OFFERED AT PRICES SUBSTANTIALLY HIGHER THAN ANY OF YOUR UNIT PRICES, AND "OVERHAULED CERTIFIED" CYLINDERS, WHICH THEY OFFERED AT GREATLY REDUCED PRICES, APPROXIMATING YOUR "ALL OR NONE" PRICE, IT IS OUR VIEW THAT THE PROCURING ACTIVITY'S INTERPRETATION OF YOUR PROPOSAL, CARRYING THE WORDS "OVERHAULED CERTIFIED" ON THE SAME PAGE AS THE PURCHASE DESCRIPTION AND WITHOUT ANY INDICATION THAT THE TERM "OVERHAULED" SHOULD BE ACCORDED ANY SPECIAL MEANING, AS OFFERING CYLINDERS WHICH WERE NOT NEW WAS NOT WITHOUT A REASONABLE BASIS. IN THE CIRCUMSTANCES, WE CONCUR WITH THE VIEW OF HEADQUARTERS USAF THAT THERE WAS NO OBLIGATION ON THE PART OF THE CONTRACTING OFFICER TO RAISE ANY QUESTION REGARDING THE MEANING WHICH YOU ATTACHED TO THE WORDS "OVERHAULED CERTIFIED" AT THE TIME YOU WERE AFFORDED THE SAME OPPORTUNITY AS THE OTHER OFFERORS TO REVISE YOUR PROPOSAL OR AT ANY OTHER TIME BEFORE A DECISION WAS REACHED REGARDING AWARD. IT IS FURTHER NOTED THAT NEITHER THE LETTER OF PROTEST SUBMITTED BY YOUR ATTORNEY NOR THE SUPPORTING AFFIDAVIT OF YOUR REPRESENTATIVE WHO SIGNED YOUR PROPOSAL STATES THAT YOU WERE IN FACT OFFERING NEW SURPLUS CYLINDERS, AND WE FIND NOTHING IN THE ENTIRE RECORD TO JUSTIFY THE CONCLUSION THAT YOU WOULD HAVE BEEN OBLIGATED UPON ACCEPTANCE OF YOUR PROPOSAL TO FURNISH NEW UNITS.

IT IS REGRETTABLE THAT THE PROCURING ACTIVITY WAS LAX IN THE MATTER OF ISSUING AWARD INFORMATION TO YOU AND TO THE OTHER UNSUCCESSFUL OFFEROR, WHOSE PROPOSAL TENDERING "REFURBISHED" ITEMS WAS LIKEWISE REJECTED AS NONRESPONSIVE, AND WE HAVE CALLED THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE AIR FORCE. HOWEVER, ON THE FACTS OF RECORD, WE ARE UNABLE TO CONCLUDE THAT THE AWARDS WERE NOT PROPER, AND YOUR PROTEST MUST THEREFORE BE DENIED.