B-165580, MAR. 21, 1969

B-165580: Mar 21, 1969

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WILLIS: THIS IS IN REFERENCE TO YOUR PROTEST AGAINST THE FAILURE OF THE DEPARTMENT OF THE AIR FORCE TO SOLICIT A BID FROM YOUR FIRM PRIOR TO THE AWARD OF A CONTRACT FOR SIX PORTABLE DRINKING WATER TREATMENT PLANTS FOR USE IN THAILAND. THE MATTER WAS REPORTED TO OUR OFFICE FOR INVESTIGATION. YOUR BID WAS RETURNED UNOPENED. ADVISED THAT "* * * WHEN BIDS ARE LET. YOUR COMPANY WILL BE NOTIFIED. WE ARE NOT PRESENTLY PLANNING FOR A BID OPENING FOR PORTABLE WATER TREATMENT PLANTS IN THAILAND.'. YOUR COMPLAINT IS THAT "WE WERE NOT GIVEN THE OPPORTUNITY TO REBID AS PROMISED AND THAT APPARENTLY THE CONTRACT WAS NEGOTIATED IN COMPLETE DEFIANCE OF LAW.'. HE WAS INSTRUCTED THAT TWO OF THE UNITS WERE TO BE SHIPPED BY AIR AS SOON AS POSSIBLE.

B-165580, MAR. 21, 1969

TO MR. R. M. WILLIS:

THIS IS IN REFERENCE TO YOUR PROTEST AGAINST THE FAILURE OF THE DEPARTMENT OF THE AIR FORCE TO SOLICIT A BID FROM YOUR FIRM PRIOR TO THE AWARD OF A CONTRACT FOR SIX PORTABLE DRINKING WATER TREATMENT PLANTS FOR USE IN THAILAND. THE MATTER WAS REPORTED TO OUR OFFICE FOR INVESTIGATION.

THE RECORD SHOWS THAT YOUR FIRM RESPONDED IN JANUARY 1968, TO AN INVITATION ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, SAN BRUNO, CALIFORNIA, FOR WATER TREATMENT PLANTS FOR USE IN THAILAND. IT APPEARS YOU BID $86,055 FOR SIX UNITS. HOWEVER, YOUR BID WAS RETURNED UNOPENED, WITH THE NOTICE THAT NEW REQUIREMENTS HAD ARISEN REQUIRING CHANGES IN THE SPECIFICATION.

YOU SUBSEQUENTLY LEARNED THAT THE SUBJECT REQUIREMENT HAD BEEN TRANSFERRED TO THE DEPARTMENT OF THE AIR FORCE, HEADQUARTERS, 13TH AIR FORCE, CLARK FIELD, PHILIPPINE ISLANDS. ON MARCH 25, 1968, IN RESPONSE TO YOUR LETTER, THE DIRECTOR OF ENGINEERING AND CONSTRUCTION (DE-AND C), HEADQUARTERS, 13TH AIR FORCE, ADVISED THAT "* * * WHEN BIDS ARE LET, YOUR COMPANY WILL BE NOTIFIED, WITH THE OTHERS, AS PROSPECTIVE SUPPLIERS OF THIS EQUIPMENT.' ON MAY 9, 1968, YOU WROTE AGAIN TO HEADQUARTERS, 13TH AIR FORCE, SETTING FORTH CERTAIN DETAILS OF YOUR UNIT AND OFFERING RECOMMENDATIONS AS TO DESIGN. ON MAY 22, 1968, THE DE-AND-C REPLIED ADVISING THAT "A CHANGE OF PLANS HAS BEEN MADE, AND WE ARE NOT PRESENTLY PLANNING FOR A BID OPENING FOR PORTABLE WATER TREATMENT PLANTS IN THAILAND.' FINALLY, IN OCTOBER 1968, YOU BECAME AWARE THAT THE SIX UNITS HAD BEEN PURCHASED FROM NEPTUNE MICRO-FLOC, INCORPORATED, AT A PRICE CONSIDERABLY ABOVE YOUR PRIOR BID PRICE. YOUR COMPLAINT IS THAT "WE WERE NOT GIVEN THE OPPORTUNITY TO REBID AS PROMISED AND THAT APPARENTLY THE CONTRACT WAS NEGOTIATED IN COMPLETE DEFIANCE OF LAW.'

THE AIR FORCE EXPLAINS THAT IN EARLY APRIL 1968, THE PROCUREMENT OFFICE AT CLARK AIR BASE RECEIVED A REQUEST FROM THE DE-AND-C AT CLARK TO PURCHASE SIX WATER TREATMENT PLANTS FOR SHIPMENT TO THAILAND. HE WAS INSTRUCTED THAT TWO OF THE UNITS WERE TO BE SHIPPED BY AIR AS SOON AS POSSIBLE, WITH THE REMAINING FOUR TO FOLLOW BY WATER. THE SPECIFICATION REQUIRED THAT THE EQUIPMENT WAS TO BE A STANDARD PROVEN PRODUCT AND "THE MAXIMUM DIMENSION OF ANY SINGLE UNIT SHALL BE NOT GREATER THAN 7 FT X 7 FT X 15 FT" TO PERMIT READY PORTABILITY BY AIR. THE DE-AND-C FURNISHED THE CONTRACTING OFFICER WITH DOCUMENTATION OF THE URGENCY TOGETHER WITH A JUSTIFICATION STATEMENT FOR MAKING THE PURCHASE ON A SOLE-SOURCE BASIS FROM NEPTUNE. ON APRIL 24TH, THE CONTRACTING OFFICER ISSUED A REQUEST FOR PROPOSALS TO NEPTUNE, BASED ON A DETERMINATION THAT NEPTUNE WAS A SOLE SOURCE FOR THE EQUIPMENT. THE CONTRACTING OFFICER REPORTS THAT HE WAS NOT AWARE OF THE CORRESPONDENCE RECEIVED FROM YOUR FIRM.

NEPTUNE'S PROPOSAL WAS SUBMITTED BY MAY 9, 1968. THE COMPANY QUOTED A TOTAL PRICE FOR THE REQUESTED SIX UNITS, PLUS PARTS, OF $140,498, AND WE NOTE THAT IT SPECIFIED A UNIT WITH DIMENSIONS OF 7 FT. X 8 FT. X 15 FT. NEPTUNE'S PRICE WAS DETERMINED TO BE REASONABLE, AND ON MAY 28, 1968, IT WAS AWARDED THE CONTRACT. IT IS REPORTED THAT THE FIRST TWO UNITS WERE ACCEPTED ON JUNE 19, 1968, AND THE REMAINING FOUR UNITS ON JULY 1, 1968, AND THAT PAYMENT FOR THESE UNITS WAS COMPLETED ON SEPTEMBER 9, 1968.

THE AIR FORCE DOES NOT ATTEMPT TO JUSTIFY THE DE-AND-C'S LETTER OF MAY 22, 1968, WHEREIN YOU WERE ADVISED THAT THERE WERE NO PRESENT PLANS FOR A BID OPENING FOR WATER TREATMENT PLANTS FOR THAILAND. ALTHOUGH THIS STATEMENT WAS LITERALLY TRUE, THE AIR FORCE ADMITS THAT IT WAS "WOEFULLY MISLEADING AND MOST REGRETTABLE" TO MAKE THIS STATEMENT WHILE THE AWARD WAS PENDING. IN FACT THE AIR FORCE LOGISTICS COMMAND RECOMMENDS THAT THE REQUIRING AGENCY BE ADVISED TO TAKE ACTION TO PRECLUDE SUCH IMPROPRIETIES IN THE FUTURE.

FURTHERMORE, THE AIR FORCE CONCLUDES THAT THE CONTRACTING OFFICER EXERCISED POOR JUDGMENT IN PLACING RELIANCE ON THE SOLE-SOURCE JUSTIFICATION PROVIDED BY THE DE-AND-C. IT REPORTS THERE IS NO INDICATION IN THE PROCUREMENT FILE THAT THE CONTRACTING OFFICER ATTEMPTED TO LOCATE OTHER POTENTIAL SUPPLIERS OR THAT HE COMPLIED WITH THE ASPR 1-1003 REQUIREMENT TO PUBLICIZE RFP'S PROMPTLY IN THE COMMERCE BUSINESS DAILY. IN ADDITION, THE AIR FORCE REPORTS THAT THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC), LISTED IN ASPR, SECTION 5, PART 12, AS HAVING COMMODITY ASSIGNMENT FOR FEDERAL STOCK CLASS 4610, WATER PURIFICATION EQUIPMENT, HAS EQUIPMENT FUNCTIONALLY EQUIVALENT TO THAT PROCURED IN THIS CASE AVAILABLE FROM GOVERNMENT STOCK; BUT THE FILE DOES NOT SHOW WHETHER THE EQUIPMENT WAS ATTEMPTED TO BE REQUISITIONED FROM DCSCPRIOR TO REFERRAL TO THE LOCAL PROCUREMENT ACTIVITY.

THE AIR FORCE MAINTAINS, HOWEVER, THAT YOUR FIRM WOULD NOT HAVE BEEN ELIGIBLE FOR THE AWARD EVEN IF IT HAD BEEN AWARE OF THE PENDING PROCUREMENT. THE DEPARTMENT REPORTS TO US THAT YOUR EQUIPMENT CONSISTS OF ONE LARGE TANK 10 FT. X 8 FT. X 13 FT. 6 IN. PLUS TWO CYLINDRICAL TANKS 8 FT. HIGH BY 5 FT. 6 IN.; AND, THEREFORE, ANY BID WHICH YOU COULD HAVE SUBMITTED IN APRIL OR MAY 1968, WOULD HAVE NECESSARILY BEEN NONRESPONSIVE TO EITHER THE SIZE LIMITATION OR THE DELIVERY REQUIRED (IF YOU ATTEMPTED TO BUILD A REVISED NEW MODEL).

WE ARE NOT IN A POSITION TO DETERMINE WHETHER THE AIR FORCE IS CORRECT IN ITS STATEMENT REGARDING THE EQUIPMENT YOU COULD HAVE OFFERED THE GOVERNMENT BACK IN APRIL OR MAY 1968. WE CERTAINLY AGREE WITH THE AIR FORCE, THAT THE PROCUREMENT WAS POORLY HANDLED. NEVERTHELESS, THE FACT IS THAT THE UNITS HAVE BEEN DELIVERED AND PAYMENT IN FULL HAS BEEN MADE. NOR DOES IT APPEAR THAT THE CONTRACTING OFFICER ACTED IN BAD FAITH IN MAKING THE AWARD TO NEPTUNE. UNDER THE CIRCUMSTANCES, WE DO NOT PERCEIVE ANY OPPORTUNITY FOR REMEDIAL ACTION IN THIS CASE. WE DO EXPECT, HOWEVER, THAT REMEDIAL STEPS WILL BE TAKEN BY THE AIR FORCE IN ORDER TO AVOID A RECURRENCE OF THIS UNFORTUNATE SITUATION IN THE FUTURE.