B-164859, NOV. 7, 1968

B-164859: Nov 7, 1968

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INC.: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1. YOU QUESTION WHETHER THE LOW BIDDER WILL MEET THE SPECIFICATIONS AND YOU ALSO CONTEND THAT THE STATE DEPARTMENT'S METHOD OF TESTING FOR COMPLIANCE WITH THE SPECIFICATIONS IS NOT RELIABLE. BIDS WERE OPENED ON JUNE 25. RODEL AUDIO SERVICES WAS DETERMINED TO BE THE LOW RESPONSIVE BIDDER AND WAS AWARDED THE CONTRACT ON JULY 9. IC WERE $1.54. YOUR BID WAS DETERMINED TO BE THE THIRD LOWEST BID. YOU STATE THAT THE CONTRACTING OFFICE REFUSED TO RECOGNIZE AND INVESTIGATE THE LARGE DIFFERENCE IN THE BID PRICES AND THAT THE MATERIAL COSTS OF THE PARTICULAR TAPE SPECIFIED FOR USAGE IN THE PERFORMANCE OF THIS CONTRACT IS USUALLY MORE THAN THE LOWEST BIDDER'S PRICE.

B-164859, NOV. 7, 1968

TO AUDIO VIDEO LABORATORIES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1, 1968, WITH ENCLOSURES, AND PRIOR CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO RODEL AUDIO SERVICES UNDER INVITATION FOR BIDS (IFB) NO. ST-68-57, ISSUED BY THE DEPARTMENT OF STATE, SUPPLY AND TRANSPORTATION DIVISION. YOU QUESTION WHETHER THE LOW BIDDER WILL MEET THE SPECIFICATIONS AND YOU ALSO CONTEND THAT THE STATE DEPARTMENT'S METHOD OF TESTING FOR COMPLIANCE WITH THE SPECIFICATIONS IS NOT RELIABLE.

THE SUBJECT INVITATION, ISSUED ON JUNE 11, 1968, CALLED FOR THE FURNISHING OF AUDIO TAPE REPRODUCTIONS FOR RADIO BROADCASTS FOR THE PERIOD JULY 1, 1968, THROUGH JUNE 30, 1969, WITH A MINIMUM GUARANTEED NUMBER OF TAPE REPRODUCTIONS OF 500 PER MONTH. BIDS WERE OPENED ON JUNE 25, 1968, AND OF THE SIX BIDS RECEIVED, RODEL AUDIO SERVICES WAS DETERMINED TO BE THE LOW RESPONSIVE BIDDER AND WAS AWARDED THE CONTRACT ON JULY 9, 1968. THE LOW BIDDER OFFERED TO PERFORM THE SERVICES CALLED FOR IN THE BID SCHEDULE AT THE FOLLOWING PRICES:

UNIT PRICE "I BID SCHEDULE:

"A. MULTIPLE DUPLICATION OF 900 FOOT MASTER TAPE TO

INCLUDE TAPE, 5-INCH REEL, BOX AND PICKUP AND

DELIVERY. $1.10

"B. MULTIPLE DUPLICATION OF 1200 FOOT MASTER TAPE TO

INCLUDE TAPE, 7-INCH REEL, BOX AND PICKUP AND

DELIVERY. 1.40

"C. MULTIPLE DUPLICATION OF 1800 FOOT MASTER TAPE TO

INCLUDE TAPE, 7-INCH REEL, BOX AND PICKUP AND

DELIVERY. 2.00"

THE PRICES OFFERED BY YOUR COMPANY FOR ITEMS NOS. IA, IB, AND IC WERE $1.54, $2.54, AND $2.84, RESPECTIVELY. YOU STATED IN YOUR BID THAT A $5.00 SURCHARGE WOULD APPLY TO EACH TAPE DUPLICATION REQUEST OF LESS THAN 10 DUPLICATES. UPON EVALUATION, YOUR BID WAS DETERMINED TO BE THE THIRD LOWEST BID. YOU STATE THAT THE CONTRACTING OFFICE REFUSED TO RECOGNIZE AND INVESTIGATE THE LARGE DIFFERENCE IN THE BID PRICES AND THAT THE MATERIAL COSTS OF THE PARTICULAR TAPE SPECIFIED FOR USAGE IN THE PERFORMANCE OF THIS CONTRACT IS USUALLY MORE THAN THE LOWEST BIDDER'S PRICE. YOU ALSO CONTEND THAT THE CONTRACTING OFFICE HAS NOT MADE A REASONABLE AND FAIR EFFORT TO ASSURE THAT THE LOW BIDDER WILL COMPLY WITH THE SPECIFICATIONS.

ADDENDUM NO. 1 TO THE INVITATION ADVISED BIDDERS THAT THE GOVERNMENT WOULD ACCEPT ONLY PROFESSIONAL QUALITY TAPE AND THAT THE CONTRACTOR WAS NOT TO SUPPLY "WHITE-BOX" TYPE TAPE. THE LOW BIDDER DID NOT TAKE EXCEPTION TO THIS REQUIREMENT IN ITS BID AND IS THEREFORE BOUND TO FURNISH PROFESSIONAL QUALITY TAPE. HOWEVER, SINCE YOU CONSIDER THE PRICE BID BY THE LOW BIDDER TO BE VERY LOW, YOU QUESTION WHETHER THE TAPE TO BE FURNISHED WILL MEET THE SPECIFICATIONS WHICH CALL FOR "PROFESSIONAL QUALITY TAPE.'

ON AUGUST 23, 1968, WE FURNISHED YOU WITH A COPY OF THE ADMINISTRATIVE REPORT AND YOU INDICATED A DESIRE TO SUBMIT WRITTEN COMMENTS THEREON. OUR LETTER TO YOU OF SEPTEMBER 16, 1968, YOU WERE ADVISED THAT OUR OFFICE WOULD RESOLVE THIS PROTEST ON THE BASIS OF THE PRESENT WRITTEN RECORD UNLESS WE RECEIVED YOUR COMMENTS BY SEPTEMBER 26, 1968. SINCE WE HAVE NOT RECEIVED ANY WRITTEN COMMENTS FROM YOU, WE ARE RESOLVING YOUR PROTEST ON THE BASIS OF THE WRITTEN RECORD.

THE REPORT RECEIVED FROM THE DEPARTMENT OF STATE IS DISPOSITIVE OF YOUR PROTEST RESPECTING THE SPECIFICATIONS AND COMPLIANCE THEREWITH. PERTINENT PART, THE REPORT ADVISED: "THE TAPES BEING PROCURED UNDER THE CONTRACT ARE FURNISHED TO RADIO STATIONS FOR BROADCASTING PURPOSES. THE END USE OF THE PRODUCT IS CLEARLY STATED IN THE INVITATION FOR BID WHICH ALSO STIPULATES THE SPEEDS AT WHICH THE TAPE IS TO BE OPERATED, AND THE SOUND REPRODUCTION QUALITIES THAT MUST BE MET. IT WAS THE OPINION OF COGNIZANT TECHNICAL PERSONNEL IN THE DEPARTMENT THAT THE SPECIFICATIONS AS INITIALLY STATED WERE SUFFICIENT TO ASSURE THE DELIVERY OF TAPES OF THE QUALITY REQUIRED. A REVIEW OF MATERIAL SUBMITTED BY AUDIO VIDEO IN ITS PROTEST INDICATES THAT THEIR PRICE COMPARISON WAS MADE ON THE BASIS OF TAPE PRODUCTS MEETING FEDERAL SPECIFICATIONS UNDER GSA SCHEDULES. THE DEPARTMENT DID NOT ASK FOR FEDERAL SPECIFICATION TAPE, BUT INSTEAD SET FORTH IFB SPECIFICATIONS GEARED TO CERTAIN COMMERCIAL GRADE PRODUCTS. WHEN FEDERAL SPECIFICATION TAPES OR PRODUCTS ARE REQUIRED, IT IS OF COURSE COMMON PRACTICE FOR AN IFB TO CITE THE APPROPRIATE SCHEDULE AND SPECIFICATIONS. THE ABSENCE OF SUCH CITATION OR REFERENCE SHOULD HAVE BEEN ADEQUATE NOTICE TO AUDIO VIDEO THAT THERE WAS NO REQUIREMENT TO MEET FEDERAL SPECIFICATIONS. THE IFB IN THIS REGARD WAS FULLY UNDERSTOOD BY THE OTHER BIDDERS, INCLUDING THE SUCCESSFUL BIDDER, AND IT IS OUR VIEW THAT THE IFB WAS NOT SO STATED AS TO REASONABLY CREATE PROBABLE MISUNDERSTANDING ON THE PART OF THE PROTESTING BIDDER. "PRIOR TO AWARD OF THE CONTRACT DEPARTMENTAL REPRESENTATIVES VISITED THE STUDIO OF THE SUCCESSFUL BIDDER IN ACCORDANCE WITH ITS NORMAL PROCEDURES TO INSPECT ITS FACILITIES AND TO VERIFY THE QUALITY OF TAPES BEING PRODUCED. A SAMPLE TAPE WAS OBTAINED FROM THE COMPANY STATED TO BE REPRESENTATIVE OF THE PRODUCT THE COMPANY WOULD FURNISH, AND SUBSEQUENTLY PLAYED BACK ON DEPARTMENTAL EQUIPMENT. THE QUALITY OF THE REPRODUCTION WAS FOUND TO BE SATISFACTORY AND FULLY MET THE SPECIFICATIONS REQUIREMENTS OF THE IFB. THE CONCLUSIONS DRAWN FROM THE VISIT WERE THAT THE STUDIO WAS WELL RUN, AND THAT THE QUALITY OF TAPES TO BE PRODUCED UNDER THE CONTRACT WOULD BE ACCEPTABLE. "THE DEPARTMENT HAS TESTED A SAMPLE OF THE LOT OF TAPES REPRODUCED TO DATE; FOUND THEM TO BE COMPLETELY ACCEPTABLE, AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE CONTRACT. "IN VIEW OF THE FOREGOING, THE DEPARTMENT IS OF THE OPINION THAT TAPES MEETING THE SPECIFICATION REQUIREMENTS OF THE CONTRACT CAN BE, AND ARE, IN FACT, BEING DELIVERED BY THE SUCCESSFUL BIDDER FOR THE PRICE BID. "WITH RESPECT TO PROTESTANT'S EXPRESSED BELIEF THAT TAPES OF REQUISITE QUALITY CANNOT BE PROVIDED AT THE PRICE OFFERED BY THE LOW BIDDER, IT IS BELIEVED SIGNIFICANT THAT ANOTHER FIRM, AUDIO EDUCATIONAL ASSOCIATES, FURNISHED THIS DEPARTMENT WITH BROADCAST QUALITY AUDIO TAPE IN MAY, 1968, FOR A UNIT PRICE OF $1.20 PER 900 FOOT TAPE.'

WHILE YOU MAY DISAGREE WITH THE METHOD USED TO DETERMINE WHETHER THE TAPES OFFERED COMPLY WITH THE SPECIFICATIONS, THAT ISSUE IS NOT PERTINENT TO THE QUESTION RESPECTING THE LEGALITY OF AWARD. RATHER, YOUR DISAGREEMENT RELATES TO THE EXERCISE OF TECHNICAL JUDGMENT IN THE ADMINISTRATION OF A VALID CONTRACT. WE HAVE LONG RECOGNIZED THE PRIMACY OF THE CONTRACTING AGENCY IN DETERMINING WHETHER AS A MATTER OF FACT THE PERFORMANCE OFFERED BY THE CONTRACTOR COMPLIES WITH THE CONTRACT SPECIFICATIONS. 17 COMP. GEN. 554; 45 COMP. GEN. 357, 363. IN THE PRESENT CASE, THE STATE DEPARTMENT HAS DETERMINED THAT THE TAPES BEING FURNISHED UNDER THE CONTRACT FULLY MEET THE SPECIFICATIONS. ABSENT A SHOWING OF FRAUD OR BAD FAITH ON THE PART OF THE ADMINISTRATIVE AGENCY -- AND NEITHER HAS BEEN SHOWN HERE -- WE FIND NO BASIS TO CHALLENGE THE LEGALITY OF THE STATE DEPARTMENT ACTION.