B-163459, APR. 19, 1968

B-163459: Apr 19, 1968

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FURTHER REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 1 AND MARCH 8. WERE SOLICITED FROM 29 PROSPECTIVE BIDDERS. EIGHT BIDS WERE RECEIVED. 300 WAS SECOND LOW. THIS PROTEST WAS DENIED BY LETTER OF JANUARY 30. AWARD WAS MADE TO SECURITY INDUSTRIES. WHICH PERMITS THE MAKING OF AN AWARD PRIOR TO RESOLUTION OF THE PROTEST IF IT IS DETERMINED BY THE CONTRACTING OFFICER THAT . DELIVERY OR PERFORMANCE WILL BE UNDULY DELAYED BY FAILURE TO MAKE AWARD PROMPTLY.'. THE POST OFFICE DEPARTMENT STATES THAT SUCH A DETERMINATION WAS MADE. ON THE BASIS THAT THE ALARM SYSTEM IS A PIECE OF EQUIPMENT WHICH IS ONLY PART OF A SELF-SERVICE POSTAL UNIT. THAT CONTRACTS HAVE BEEN AWARDED FOR THE OTHER EQUIPMENT.

B-163459, APR. 19, 1968

TO SECURITY, INC.;

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 1 AND MARCH 8, 1968, CONCERNING YOUR PROTEST AGAINST AWARD TO ANOTHER BIDDER UNDER SOLICITATION AND OFFER NO. 1081, ISSUED BY THE BUREAU OF FACILITIES, POST OFFICE DEPARTMENT.

BY INVITATION DATED OCTOBER 6, 1967, BIDS TO BE OPENED OCTOBER 27, 1967, WERE SOLICITED FROM 29 PROSPECTIVE BIDDERS, FOR FURNISHING 630 ELECTRIC BURGLAR ALARM SYSTEMS, F.O.B. POINT OF ORIGIN TO BE IN ACCORDANCE WITH SPECIFICATION POD-B-235A (RE), DATED AUGUST 15, 1967. EIGHT BIDS WERE RECEIVED, THE LOW BID BEING SUBMITTED BY SECURITY INDUSTRIES, INC., IN THE AMOUNT OF $61,740, AND YOUR BID IN THE AMOUNT OF $69,300 WAS SECOND LOW. YOUR INITIAL PROTEST TO THE POST OFFICE DEPARTMENT BY LETTER OF NOVEMBER 15, 1967, QUESTIONED THE RESPONSIVENESS AND RESPONSIBILITY OF THE LOW BIDDER. THIS PROTEST WAS DENIED BY LETTER OF JANUARY 30, 1968, TO YOU FROM THE CHIEF, SUPPLY BRANCH, PROCUREMENT DIVISION, POST OFFICE DEPARTMENT.

ON MARCH 6, 1968, AWARD WAS MADE TO SECURITY INDUSTRIES, INC., IN ACCORDANCE WITH SECTION 1-2.407-8 (B) (3) (II) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), WHICH PERMITS THE MAKING OF AN AWARD PRIOR TO RESOLUTION OF THE PROTEST IF IT IS DETERMINED BY THE CONTRACTING OFFICER THAT ,DELIVERY OR PERFORMANCE WILL BE UNDULY DELAYED BY FAILURE TO MAKE AWARD PROMPTLY.' IN THIS CONNECTION, THE POST OFFICE DEPARTMENT STATES THAT SUCH A DETERMINATION WAS MADE, ON THE BASIS THAT THE ALARM SYSTEM IS A PIECE OF EQUIPMENT WHICH IS ONLY PART OF A SELF-SERVICE POSTAL UNIT, THAT CONTRACTS HAVE BEEN AWARDED FOR THE OTHER EQUIPMENT, TO BE DELIVERED IN THE NEAR FUTURE, AND THAT IT IS ESSENTIAL TO HAVE ALL ITEMS OF EQUIPMENT AVAILABLE FOR SIMULTANEOUS INSTALLATION, TO PRECLUDE DELAY OF THE SELF-SERVICE POSTAL UNIT PROGRAM.

YOU ORIGINALLY QUESTIONED THE RESPONSIVENESS OF THE LOW BID ON THE GROUND THAT SECURITY INDUSTRIES LISTED MILWAUKEE, WISCONSIN, AS THE "POINT OF ORIGIN" AND ITS PLANT IN MILWAUKEE AS THE POINT FROM WHICH RAIL SHIPMENT WOULD BE MADE, INSTEAD OF LISTING A BURGLAR ALARM SYSTEMS MANUFACTURER SKILLED IN MAKING THE NINE COMPONENTS LISTED IN PARAGRAPH 3.1.1 OF THE SPECIFICATION, AND YOU STATE THAT AN ATTEMPT TO CHANGE THE POINT OF ORIGIN NOW WOULD BE ILLEGAL. WE AGREE THAT THE BID CLEARLY ESTABLISHES THAT THE BIDDER IS OFFERING EQUIPMENT TO BE PRODUCED AT ITS OWN PLANT, AND IT WAS ON THAT BASIS THAT IT WAS CONSIDERED BY THE DEPARTMENT. WE ARE AWARE OF NO DISAGREEMENT ON THAT POINT, NOR IS THERE ANY INDICATION THAT SECURITY INDUSTRIES HAS PROPOSED ANY CHANGE IN THAT RESPECT.

IN QUESTIONING THE RESPONSIVENESS OF THE LOW BID, YOU HAVE APPARENTLY TIED IT IN WITH YOUR CONTENTION THAT SECURITY INDUSTRIES IS NOT RESPONSIBLE. IN SUPPORT OF THIS LATTER CONTENTION YOU ALLEGE THAT A COMPANY WHICH HAS NOT PREVIOUSLY MADE THE BURGLAR ALARMS AND PUT THEM THROUGH THE CAREFULLY DEVELOPED TESTING PROCEDURES FOR UNDERWRITERS' LABORATORIES (UL) STANDARDS CANNOT FURNISH SPECIFICATION MATERIAL. YOU STATE FURTHER THAT FAILURE TO CONDUCT SUCH TESTS IN A NATIONALLY RECOGNIZED TESTING LABORATORY ON A PAR WITH UL IS EVADING THE INTENT OF THE SPECIFICATIONS AND SOLICITATION 1081, AND THAT TO HAVE THE ANTICIPATED DEFECTS SHOW UP AFTER DELIVERY AND INSTALLATION AT 670 (630) DISPERSED LOCATIONS WOULD BE DISASTROUS. IT IS APPARENTLY YOUR POSITION, IN REFERRING TO THE INTENT OF THE SOLICITATION, THAT BIDS SHOULD BE CONSIDERED ONLY ON SYSTEMS WHICH ARE UL LISTED.

PERTINENT PARAGRAPHS OF THE CITED SPECIFICATION ARE AS FOLLOWS:

"1.2 CLASSIFICATION - THE BURGLAR ALARM SYSTEM SHALL BE OF ONE TYPE ONLY AS DESCRIBED HEREIN AND SHALL BE IN ACCORDANCE WITH UNDERWRITER LABORATORIES BULLETIN NOS. 609 AND 610, DATED MAY 1963, FOR MERCANTILE SAFE AND VAULT ALARM SYSTEMS, GRADE A, WITH ALLOWANCE MADE FOR MODIFICATION AS NECESSARY TO MEET POST OFFICE DEPARTMENT REQUIREMENTS.'

"3.2 PILOT MODEL - THE SUCCESSFUL BIDDER SHALL SUBMIT WITHIN 15 CALENDAR DAYS AFTER AWARD OF CONTRACT A PILOT MODEL OF ONE BURGLAR ALARM FOR INSPECTION AND TESTING, DIRECT TO THE INSPECTION AND ACCEPTANCE SECTION, CONTRACT BRANCH, PROCUREMENT DIVISION, POST OFFICE DEPARTMENT, 12TH AND PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C. 20260, FOR APPROVAL BEFORE BEGINNING PRODUCTION IN QUANTITY. THE SUCCESSFUL BIDDER SHALL NOTIFY THE CONTRACTING OFFICER 5 CALENDAR DAYS PRIOR TO AVAILABILITY OF THE PILOT MODEL FOR INSPECTION. WHEN THE PILOT MODEL IS APPROVED IT SHALL BE MADE AVAILABLE FOR USE BY THE GOVERNMENT INSPECTOR UNTIL COMPLETION OF THE CONTRACT. IN THE EVENT THE PILOT MODEL IS NOT APPROVED, THE SUCCESSFUL BIDDER WILL BE PERMITTED TO CORRECT ANY DEFICIENCIES WITHIN 5 CALENDAR DAYS AFTER THE INITIAL REJECTION AND THE CONTRACTING OFFICER SHALL BE NOTIFIED FOR FINAL INSPECTION OF SUCH PILOT MODEL. FAILURE TO CORRECT ANY SUCH DEFICIENCIES WITHIN THE 5 ADDITIONAL DAYS SHALL BE CONSIDERED A BREACH OF CONTRACT AND THE SUCCESSFUL BIDDER MAY BE DECLARED IN DEFAULT IN ACCORDANCE WITH 11 OF THE GENERAL PROVISIONS (STANDARD FORM 32). A PILOT MODEL IS DEFINED AS A PRODUCTION LINE MODEL OF THE PRODUCT THE MANUFACTURER WILL SUBSEQUENTLY PRODUCE IN FULFILLMENT OF THE CONTRACT. APPROVAL OF THE PILOT MODEL DOES NOT RELIEVE THE CONTRACTOR OF HIS OBLIGATION TO SUPPLY EQUIPMENT CONFORMING TO THE SPECIFICATIONS AND DRAWINGS. ANY CHANGES OR DEVIATION FROM THE PILOT MODEL SHALL BE SUBJECT TO THE APPROVAL OF THE CONTRACTING OFFICER. THE APPROVED PILOT MODEL WILL BE ACCEPTED AS THE LAST UNITS FOR DELIVERY UNDER THIS CONTRACT PROVIDED THAT ALL MODIFICATIONS REQUIRED BY ANY CONDITIONAL APPROVAL HAVE BEEN INCORPORATED THEREIN. ALL TRANSPORTATION COSTS WILL BE BORNE BY THE CONTRACTOR.'

PARAGRAPH 1.2 REQUIRES ONLY THAT THE BURGLAR ALARM SYSTEMS BE IN ACCORDANCE WITH THE CITED BULLETINS. NOT ONLY WAS THERE NO INTENT THAT THEY BE UL LISTED, BUT A SPECIFIC REQUIREMENT FOR SUCH LISTING WOULD HAVE BEEN OBJETIONALBE. IN 33 COMP. GEN. 573 WE HELD THAT SPECIFICATIONS ARE UNDULY RESTRICTIVE OF COMPETITION WHEN THEY CONTAIN AN UNCONDITIONAL REQUIREMENT THAT THE EQUIPMENT BEAR ONLY AN UNDERWRITERS' LABORATORIES LABEL, BUT THAT IT MAY BE PROPER IN THE ABSENCE OF STANDARDS OR SPECIFICATIONS PRESCRIBED BY PROPER GOVERNMENTAL AUTHORITY, IF ADMINISTRATIVELY DETERMINED TO BE IN THE INTEREST OF THE GOVERNMENT, TO INCLUDE IN ADVERTISED SPECIFICATIONS FOR ARTICLES OF APPROPRIATE CLASSES A REQUIREMENT THAT SUCH ARTICLES SHALL CONFORM TO STANDARDS ADOPTED BY THE UNDERWRITERS' LABORATORIES, OR SIMILAR ORGANIZATIONS, WHERE SUCH STANDARDS ARE GENERALLY RECOGNIZED AND ACCEPTED IN THE INDUSTRIES INVOLVED AND ARE PERTINENT TO THE GOVERNMENT'S NEEDS. IT WAS FURTHER POINTED OUT IN THE CITED DECISION THAT PRESCRIBING MINIMUM STANDARDS TO WHICH ARTICLES REQUIRED BY THE GOVERNMENT SHALL CONFORM IS THE PROPER FUNCTION OF SPECIFICATIONS, BUT DETERMINING WHETHER ARTICLES OFFERED TO THE GOVERNMENT IN FACT CONFORM TO THESE STANDARDS IS THE DUTY PRIMARILY OF PROCUREMENT OFFICIALS, AND WHILE THE CERTIFICATE, LABEL, OR OTHER TOKEN OF APPROVAL OF A RECOGNIZED INDEPENDENT LABORATORY OR TESTING ORGANIZATION MAY, UNDER PROPER CIRCUMSTANCES, BE ACCEPTABLE AS EVIDENCE OF CONFORMITY, THE ABSENCE OF SUCH APPROVAL SHOULD NOT AUTOMATICALLY EXCLUDE PRODUCTS WHICH MAY BE EQUALLY IN CONFORMITY.

SINCE THE BID OF SECURITY INDUSTRIES WAS AN UNEQUIVOCAL AND UNQUALIFIED OFFER TO FURNISH EQUIPMENT IN COMPLETE CONFORMITY WITH THE SPECIFICATIONS, THERE CAN BE NO QUESTION AS TO ITS RESPONSIVENESS.

THE REQUIREMENT OF PARAGRAPH 3.2 OF THE SPECIFICATION THAT A PILOT MODEL BE SUBMITTED TO THE POST OFFICE DEPARTMENT FOR INSPECTION, TESTING, AND APPROVAL BEFORE BEGINNING PRODUCTION IN QUANTITY SHOULD INSURE, TO THE EXTENT POSSIBLE, THAT SPECIFICATION ARTICLES WILL BE FURNISHED AND SHOULD ELIMINATE ANY REASONABLE DOUBT AS TO WHETHER THE SYSTEMS MIGHT PROVE TO BE DEFECTIVE AFTER DELIVERY AND INSTALLATION. PARAGRAPH 3.2 FURTHER PROVIDES THAT IN THE EVENT THE PILOT MODEL IS NOT APPROVED, THE SUCCESSFUL BIDDER WILL BE PERMITTED TO CORRECT ANY DEFICIENCIES WITHIN 5 CALENDAR DAYS AFTER THE INITIAL REJECTION, AND THAT FAILURE TO CORRECT ANY SUCH DEFICIENCIES WITHIN THE 5 ADDITIONAL DAYS SHALL BE CONSIDERED A BREACH OF CONTRACT AND THE SUCCESSFUL BIDDER MAY BE DECLARED IN DEFAULT, THEREBY MAKING HIM LIABLE FOR ANY EXCESS COST RESULTING FROM PURCHASE AGAINST HIS ACCOUNT. THE GOVERNMENT THEREFORE APPEARS TO BE AMPLY PROTECTED. FPR 1-1.310-6 PROVIDES THAT NO CONTRACT SHALL BE AWARDED TO ANY PERSON OR FIRM UNLESS THE CONTRACTING OFFICER HAS FIRST DETERMINED THAT SUCH PERSON OR FIRM IS RESPONSIBLE WITHIN THE MEANING OF SECTIONS 1-1.310-4 AND 5. IN ORDER TO QUALIFY AS RESPONSIBLE UNDER THE LAST CITED SECTIONS, A PROSPECTIVE CONTRACTOR MUST, GENERALLY, IN THE OPINION OF THE CONTRACTING OFFICER, HAVE ADEQUATE FINANCIAL RESOURCES, EXPERIENCE, ORGANIZATION, TECHNICAL QUALIFICATIONS, SKILLS, AND FACILITIES, OR THE ABILITY TO OBTAIN THEM. PREAWARD SURVEY WAS THEREFORE CONDUCTED FROM WHICH IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT SECURITY INDUSTRIES MEETS THE ABOVE STANDARDS OF A RESPONSIBLE PROSPECTIVE CONTRACTOR. AS STATED IN 46 COMP. GEN. 371 "WE HAVE CONSISTENLY HELD THAT WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT AND, IN THE ABSENCE OF EVIDENCE THAT A DETERMINATION OF A BIDDER'S CAPABILITY WAS BASED UPON ERROR, FRAUD OR FAVORITISM, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY.' SINCE WE FIND NO EVIDENCE OF ERROR, FRAUD OR FAVORITISM, WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF RESPONSIBILITY.

FOR THE REASONS STATED WE CONCLUDE THAT THE AWARD TO SECURITY INDUSTRIES, INC., IS NOT LEGALLY OBJECTIONABLE. YOUR PROTEST IS THEREFORE DENIED.