B-163886, AUG. 12, 1968

B-163886, AUG. 12, 1968

TO JOY MANUFACTURING COMPANY:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF MARCH 27, 1968, AND SUPPLEMENTAL CORRESPONDENCE DATED MAY 29, 1968, PROTESTING AWARDS MADE TO J.R.S. INDUSTRIES, INC., UNDER DEFENSE SUPPLY AGENCY (DSA) REQUESTS FOR PROPOSALS NOS. DSA-700-68-R-3556, -4075, AND -4287. YOU PROTEST AN AWARD TO PIONEER PRODUCTS, INC., UNDER REQUEST FOR PROPOSALS DSA 700-68-R-6111, AND AN AWARD TO ANY COMPANY OTHER THAN JOY MANUFACTURING COMPANY, RESULTING FROM REQUEST FOR PROPOSALS DSA-700-68 R-7871. YOU ALSO PROTEST THAT YOU WERE REQUESTED TO QUOTE PRICES FOR JOY PARTS ON TWO DIFFERENT OCCASIONS AND AFTER RESPONDING THERETO, A SOLICITATION WAS ISSUED FOR THE SAME PROCUREMENT.

WITH THE EXCEPTION OF THE LATTER POINT OF PROTEST, YOU ALLEGE THAT THE PROCUREMENT OF JOY PARTS FROM OTHER FIRMS WILL RESULT IN "CHAOS AND DAMAGE TO THE JOY MANUFACTURING COMPANY REPUTATION WHEN MALFUNCTION OR DAMAGE OCCURS.' YOU OBSERVE THAT THE REQUESTS FOR PROPOSALS INCLUDED CONTRACT CLAUSE NO. 2-104,"NONAVAILABILITY OF SPECIFICATIONS, PLANS OR DRAWINGS," AND THEREFORE THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC) HAD "NO CRITERIA FOR ESTABLISHING THAT THE QUALITY, CONFIGURATION, MATERIAL, TOLERANCES OR CLEARANCES NECESSARY FOR THE PROPER OPERATION OF THIS PRECISION DEVICE CAN BE MET BY J.R.S. INDUSTRIES OR PIONEER PRODUCTS.' EFFECT, YOUR PROTESTS ARE ON THE BASIS THAT THE PROCUREMENTS SHOULD HAVE BEEN AWARDED TO YOUR FIRM WHICH ALONE HAS THE CAPABILITIES TO FURNISH PARTS WHICH DCSC IDENTIFIED BY YOUR PART NUMBERS.

THE PROCUREMENT UNDER REQUEST NO. -4075 DATED JANUARY 29, 1968, WAS NEGOTIATED UNDER THE PROVISIONS OF 10 U.S.C. 2304 (A) (10) AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-210.2 (XIII) ON THE BASIS THAT IT IS IMPOSSIBLE TO DRAFT ADEQUATE SPECIFICATIONS OR ANY OTHER ADEQUATELY DETAILED DESCRIPTION OF THE REQUIRED SUPPLIES. THE REQUEST INVITED PROPOSALS FOR 115 PRESSURE REGULATING VALVES IDENTIFIED BY JOY DRAWING NO. A211562, DATED FEBRUARY 23, 1954. WE ARE ADVISED BY DSA THAT THIS DRAWING IS AN ASSEMBLY DRAWING AND NOT SUFFICIENTLY DETAILED FOR FORMAL ADVERTISING PURPOSES. THE REQUEST WAS CLOSED ON FEBRUARY 28, 1968, AND FOUR OFFERS WERE RECEIVED AS FOLLOWS:

PAMECO-AIRE $215.00 EACH

JOY MANUFACTURING COMPANY $178.45 EACH

J.R.S. INDUSTRIES, INC. $126.50 EACH

PIONEER PRODUCTS, INC.$119.00 EACH

NEGOTIATIONS WERE CONDUCTED WITH PIONEER PRODUCTS, INC., AND J.R.S. INDUSTRIES, INC., TO BETTER THE DELIVERY SCHEDULE INASMUCH AS THE DCSC WAS IN AN OUT-OF-STOCK POSITION. HOWEVER, PIONEER PRODUCTS COULD NOT IMPROVE ITS OFFERED DELIVERY SCHEDULE OF 150 DAYS. DUE TO THE URGENT NEED FOR THE ITEM, IT WAS ADMINISTRATIVELY DETERMINED THAT AN AWARD TO J.R.S. AT ITS UNIT PRICE OF $126.50 WITH 60-DAY DELIVERY, SUBJECT TO LIQUIDATED DAMAGES FOR LATE DELIVERY, WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT. WHILE PAGE 2 OF THE REQUEST WHEREIN REFERENCE WAS MADE TO JOY DRAWING NO. A211562 CONTAINED (IN ERROR) THE FOLLOWING: "TO BE COMPLETED BY ALL OFFERORS, OFFERS BASED ON MANUFACTURER'S NAME-- PART NUMBER---," J.R.S. TOOK NO EXCEPTION TO THE PURCHASE DESCRIPTION AND STATED THAT THE ITEM WOULD BE MANUFACTURED AT ITS PLANT AT KANSAS CITY, MISSOURI. TECHNICAL APPROVAL OF THE J.R.S. OFFER WAS CONDITIONED ON THE FIRM SUPPLYING PART NO. A211562-1. THIS APPROVAL, THOUGH CONDITIONAL, WAS VIEWED BY THE CONTRACTING OFFICER AS AN APPROVAL OF THE OFFER SINCE THE ITEM HAD BEEN PROCURED BY DCSC ON THREE DIFFERENT OCCASIONS FROM J.R.S. IN 1967 WITHOUT ANY ADVERSE REPORT OF DEFICIENCIES. THEREFORE, CONTRACT NO. DSA-700-68-C- 6237 WAS AWARDED TO J.R.S. ON MARCH 18, 1968, AS THE LOWEST, RESPONSIVE OFFEROR. THE VALVES COVERED BY THE CONTRACT WERE INSPECTED AND ACCEPTED BY THE GOVERNMENT ON OR ABOUT MAY 18, 1968, AND WE ARE NOT ADVISED OF ANY DISSATISFACTION CONCERNING THE USE OF THE VALVES.

THE CIRCUMSTANCES INVOLVED IN THE AWARD MADE TO J.R.S. UNDER REQUEST FOR PROPOSALS NO. -3556 ARE SUBSTANTIALLY SIMILAR TO THOSE DISCUSSED WITH RESPECT TO REQUEST FOR PROPOSALS NO. -4075 (BOTH REQUESTS INVOLVING THE SAME ITEM, NOMENCLATURE DESCRIPTION, AND CLAUSES). WHAT WAS SAID ABOVE AS TO NO. -4075 APPLIES EQUALLY TO NO. 3556 OTHER THAN TO ADVISE THAT DELIVERY OF ACCEPTABLE VALVES WAS COMPLETED BY J.R.S. ON MARCH 11, 1968.

REQUEST NO. -4287 WAS ISSUED ON FEBRUARY 2, 1968, FOR 288 CRANKCASES IDENTIFIED BY JOY PART NO. 211500 PURSUANT TO THE "PUBLIC EXIGENCY" NEGOTIATION AUTHORITY OF 10 U.S.C. 2304 (A) (2). PROPOSALS WERE RECEIVED FROM J.R.S. AND YOUR FIRM. J.R.S. OFFERED A UNIT PRICE OF $94.50, LESS 1 PERCENT - 20 DAYS, FOR DELIVERY WITHIN 120-180 DAYS AFTER DATE OF AWARD, AND JOY OFFERED A UNIT PRICE OF $101.90 FOR DELIVERY WITHIN 360 DAYS AFTER AWARD DATE. J.R.S. REPRESENTED ITSELF AS THE MANUFACTURER, AND INDICATED THAT THE PLACE OF MANUFACTURE WOULD BE AT ITS PLANT IN KANSAS CITY, MISSOURI. J.R.S. ALSO STATED THAT ITS OFFER WAS BASED ON FURNISHING JOY PART NO. 211500, AND STATED THAT "WE HAVE COMPLETE MFG. PRINTS AND DATA.' SINCE J.R.S. WAS OTHERWISE RESPONSIVE AND THE LOW OFFEROR, AWARD WAS MADE TO IT ON MARCH 15, 1968. SUBSEQUENT TO RECEIPT OF YOUR PROTEST, IT WAS DETERMINED THAT THE TECHNICAL ACCEPTABILITY OF THE J.R.S. PART COULD NOT BE DETERMINED UNTIL OPERATIONAL TESTS WERE PERFORMED. J.R.S. HAS AGREED TO A NO COST MODIFICATION WHICH WOULD ADD A FIRST-ARTICLE APPROVAL- CONTRACTOR TESTING CLAUSE AND REQUIRE IT TO FURNISH TWO SAMPLES TOGETHER WITH DRAWINGS FOR A 50-HOUR OPERATIONAL TEST. HENCE, ALTHOUGH NO TECHNICAL EVALUATION WAS MADE OF THE J.R.S. OFFER, CORRECTIVE ACTION HAS BEEN TAKEN TO ASSURE THE RECEIPT OF ACCEPTABLE PARTS AND TO PROVIDE A BASIS FOR DEFAULT TERMINATION IF J.R.S. IS UNABLE TO FURNISH ACCEPTABLE PARTS.

THE FACTS RELATING TO THE PROCUREMENT OF 270 PRESSURE REGULATING VALVES UNDER REQUEST FOR PROPOSALS NO. -6111 FROM PIONEER PRODUCTS, INC., ARE SUMMARIZED AS FOLLOWS. THE REQUEST WAS ISSUED ON MARCH 20, 1968, AND REFERENCED JOY DRAWING NO. A211562 DATED FEBRUARY 23, 1954. SINCE THE DRAWING WAS INADEQUATE FOR FORMAL ADVERTISING PURPOSES, THE PROCUREMENT WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (10) AND ASPR 3-210.2 (XIII). PIONEER SUBMITTED THE LOWEST OFFER IN THE AMOUNT OF $117.30 EACH WITH 120-DAY DELIVERY SCHEDULE. YOUR FIRM OFFERED A UNIT PRICE OF $169.70 WITH A 210-DAY DELIVERY SCHEDULE. PIONEER OFFERED TO FURNISH ITS PART NO. C-91141-A1. SINCE THE SAME PART NUMBER WAS OFFERED BY PIONEER IN RESPONSE TO REQUEST NO. -4075, THE TECHNICAL EVALUATION MADE UNDER NO. -4075 WAS RELIED UPON BY THE CONTRACTING OFFICER IN MAKING AN AWARD TO PIONEER ON APRIL 12, 1968. THIS TECHNICAL EVALUATION RESULTED IN APPROVAL OF THE PIONEER PART, PROVIDED INSPECTION WOULD BE MADE AT POINT OF MANUFACTURE FOR ABSOLUTE CONFORMANCE WITH THE JOY DRAWING.

HOWEVER, SUBSEQUENT TO THE RECEIPT OF YOUR PROTEST, THE PROCUREMENT FOR THESE VALVES WAS REEXAMINED AND IT WAS FOUND THAT THE TECHNICAL EVALUATION WAS DEFICIENT BECAUSE THE JOY DRAWING IS MERELY AN ASSEMBLY DRAWING WHICH DID NOT DISCLOSE DETAILED DIMENSIONS, TOLERANCE, MATERIALS OR OTHER DATA NEEDED TO MANUFACTURE THE VALVES. TO ASSURE THAT AN ACCEPTABLE PRODUCT WILL BE FURNISHED, NEGOTIATIONS HAVE BEEN CONDUCTED WITH PIONEER AND IT HAS AGREED TO FURNISH TO THE GOVERNMENT, AT NO COST, TWO SAMPLE VALVES FOR OPERATIONAL TESTS. IF THE SAMPLE VALVES DO NOT PERFORM SATISFACTORILY AND CANNOT BE CORRECTED, THE CONTRACT WILL BE SUBJECT TO DEFAULT TERMINATION. IN VIEW THEREOF, WE CANNOT QUESTION THE ACTIONS TAKEN HERE.

REQUEST NO. -7871 WAS ISSUED MAY 7, 1968, FOR 470 PRESSURE REGULATING VALVES TO BE MANUFACTURED IN ACCORDANCE WITH JOY DRAWING A211562 DATED FEBRUARY 23, 1954, AND WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (10) AND ASPR 3-210.2 (XIII) DUE TO THE INADEQUACY OF THE JOY DRAWING FOR FORMAL ADVERTISING PURPOSES. THIS SOLICITATION RESULTED IN THREE OFFERS AS FOLLOWS:

PIONEER PRODUCTS, INC. $122.30 LESS 1/2 PERCENT-20 DAYS

DELIVERY PHASED FROM 120-180 DAYS.

J.R.S. INDUSTRIES, INC. $126.50 LESS 7 PERCENT-20 DAYS

DELIVERY PHASED FROM 60-120 DAYS.

JOY MFG. CO. $152.40 NET, F.O.B. ORIGIN, WITH

180-DAY DELIVERY.

THE J.R.S. OFFER OF A 7 PERCENT TIME DISCOUNT HAS BEEN VERIFIED WITH THE EXPLANATION THAT THE ADDITIONAL DISCOUNT WAS OFFERED DUE TO THE QUANTITY OF THIS PARTICULAR PROCUREMENT. SINCE THE J.R.S. PART IS ACCEPTABLE, BASED ON PRIOR AIR FORCE EXPERIENCE, AND SINCE ITS EVALUATED BID PRICE OF $117.64 IS THE LOWEST OFFER, IT IS PROPOSED TO ACCEPT THE OFFER. ON THE BASIS OF OUR PREVIOUS DISCUSSION CONCERNING THESE VALVE PROCUREMENTS, WE FIND NO BASIS TO OBJECT TO AN AWARD TO J.R.S. UNDER THIS REQUEST FOR PROPOSALS.

YOUR PROTEST CONCERNING DUAL SOLICITATION UNDER REQUESTS FOR PROPOSALS NOS. -4075 AND -4287 APPEARS TO HAVE MERIT. IT IS REPORTED THAT SUCH DUAL SOLICITATION RESULTED FROM AN ADMINISTRATIVE ERROR. DCSC HAS A BASIC ORDERING AGREEMENT WITH YOUR FIRM AND THE PURCHASE REQUEST WAS INITIALLY ROUTED TO THE BUYER THAT NEGOTIATES PROCUREMENTS UNDER BASIC ORDERING PROCUREMENTS. THE BUYER IN EACH OF THESE CASES BELIEVED THAT THE ITEMS WERE PROPRIETARY TO YOUR FIRM AND THE TELEPHONE REQUEST TO YOUR FIRM WAS FOR THE PURPOSE OF SECURING INFORMATION, THAT IS, PRICING, DELIVERY, TC., SO THAT A DELIVERY ORDER COULD BE ISSUED UNDER THE BASIC AGREEMENT. HOWEVER, SUBSEQUENT TO THE RECEIPT OF YOUR LETTER FURNISHING THE INFORMATION, IT WAS DETERMINED THAT COMPETITION FOR THE ITEM WAS AVAILABLE. HENCE, THE PURCHASE REQUESTS WERE HANDLED UNDER FORMAL PROCEDURES WHEREBY A REQUEST FOR PROPOSALS WAS ISSUED (NO. -4075) AND PROCESSED FOR AWARD AS DESCRIBED ABOVE. THIS ADMINISTRATIVE ERROR, WHILE CONTRIBUTING TO YOUR MISUNDERSTANDING OF THE PROCUREMENT WAS PROPERLY CORRECTED AND IS NOT SUBJECT AT THIS DATE TO QUESTION BY OUR OFFICE.

IT IS APPARENT FROM THE REPORTED CIRCUMSTANCES THAT NEITHER THE USING ACTIVITY, THE AIR FORCE, NOR THE PROCURING ACTIVITY, DCSC, CONSIDERED IT NECESSARY OR PROPER TO LIMIT PROCUREMENT TO YOUR FIRM. ALTHOUGH YOUR PART NUMBER WAS DESIGNATED, YOUR FIRM WAS NOT THE SOLE SOURCE FOR MEETING THE GOVERNMENT REQUIREMENTS. IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICER TO PROTECT THE INTERESTS OF THE GOVERNMENT AS TO PRICE AND OTHER FACTORS AND, IN THIS REGARD, ASPR 1-300.1 PROVIDES THAT ALL PROCUREMENTS, WHETHER BY FORMAL ADVERTISING OR BY NEGOTIATION, SHALL BE MADE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICABLE EXTENT. SEE, ALSO, ASPR 3- 102 (C). PARAGRAPH 3-101 OF ASPR PROVIDES THAT WHENEVER SUPPLIES ARE TO BE PROCURED BY NEGOTIATION, PRICE QUOTATIONS SHALL BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES. FROM OUR REVIEW, IT APPEARS EVIDENT THAT THESE CRITERIA WERE FOLLOWED IN THE SUBJECT PROCUREMENTS.

MOREOVER, ASPR 1-1201 (A) PROVIDES THAT PURCHASE DESCRIPTIONS SHALL STATE ONLY THE MINIMUM ACTUAL NEEDS OF THE GOVERNMENT AND DESCRIBE THE ITEMS IN A MANNER WHICH WILL ENCOURAGE MAXIMUM COMPETITION AND ELIMINATE RESTRICTIVE FEATURES THAT MIGHT LIMIT ACCEPTABLE OFFERS TO ONE SUPPLIER'S PRODUCT. THE PURCHASE DESCRIPTIONS USED IN THE INSTANT PROCUREMENTS GAVE THE DESCRIPTION AND CAPACITY OF THE ITEM TO BE PROCURED, THE ENGINEERING ORDER NUMBER, FEDERAL STOCK NUMBER, AND YOUR PART NUMBER. NO ADDITIONAL DATA, PROPRIETARY OR OTHERWISE, WAS FURNISHED BY THE GOVERNMENT.

FOR THE REASONS STATED, WE FIND NO BASIS FOR QUESTIONING THE AWARDS MADE TO J.R.S. AND PIONEER UNDER PROPER NEGOTIATION PROCEDURES. YOUR PROTESTS ARE THEREFORE DENIED.