B-165770, MAY 5, 1969

B-165770: May 5, 1969

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM DATED DECEMBER 11. THIS IN NO WAY IS TO BE CONSTRUED AS WAIVING A RIGHT OF THE GOVERNMENT TO SELECT EQUIPMENT PROVEN RELIABLE FOR A PERIOD OF LESS THAN 2 YEARS.'. PROPOSALS WERE RECEIVED FROM YOUR FIRM. ALL OFFERORS WERE NOTIFIED BY TELEPHONE CONCERNING THE PROPOSED AWARD SO THAT THE UNSUCCESSFUL OFFERORS COULD RELEASE COMMITMENTS MADE WITH SUPPLIERS AND YOU COULD COMPLETE ARRANGEMENTS NECESSARY FOR PERFORMANCE. YOU WERE DETERMINED TO BE "NONRESPONSIBLE.'. NEGOTIATIONS WERE REOPENED AND RAYGO WAS PERMITTED TO SUBMIT A DOWNWARD REVISION OF ITS PROPOSAL. AWARD OF THE CONTRACT WAS MADE TO RAYGO ON DECEMBER 10. THAT NO CONSIDERATION WAS GIVEN OR INTENDED TO BE GIVEN TO AN ENGINEERING DETERMINATION.

B-165770, MAY 5, 1969

TO TAMPO MANUFACTURING COMPANY, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM DATED DECEMBER 11, 1968, AND THE BRIEF FILED ON YOUR BEHALF BY YOUR ATTORNEYS PROTESTING THE AWARD OF A CONTRACT TO RAYGO, INCORPORATED, UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAK01-69-R- 3143/A4) DATED OCTOBER 25, 1968, ISSUED BY THE ARMY MOBILITY EQUIPMENT COMMAND, ST. LOUIS, MISSOURI.

THE SUBJECT RFP SOLICITED PROPOSALS FOR FURNISHING 17 SELF-PROPELLED VIBRATORY ROLLERS PURSUANT TO THE MCA/RVN HIGHWAY RESTORATION PROGRAM. ARTICLE 42 OF THE PROPOSAL PROVIDED AS FOLLOWS: ,ARTICLE 42. SELECTION CRITERIA "THE GOVERNMENT RESERVES THE RIGHT TO DETERMINE AND SELECT FOR AWARD EQUIPMENT THAT HAS DEMONSTRATED AND PROVEN SATISFACTORY RELIABILITY THROUGH USAGE. AS A GAGE, EQUIPMENT THAT HAS BEEN IN USE AT LEAST 2 YEARS. THIS IN NO WAY IS TO BE CONSTRUED AS WAIVING A RIGHT OF THE GOVERNMENT TO SELECT EQUIPMENT PROVEN RELIABLE FOR A PERIOD OF LESS THAN 2 YEARS.'

PROPOSALS WERE RECEIVED FROM YOUR FIRM, AMERICAN HOIST AND DERRICK COMPANY AND RAYGO, INCORPORATED. AFTER COMPLETION OF NEGOTIATIONS, THE CONTRACTING OFFICER SELECTED YOUR COMPANY FOR AWARD BASED ON YOUR CONFORMANCE TO THE DELIVERY SCHEDULE AND LOW PRICE. ON DECEMBER 6, 1968, ALL OFFERORS WERE NOTIFIED BY TELEPHONE CONCERNING THE PROPOSED AWARD SO THAT THE UNSUCCESSFUL OFFERORS COULD RELEASE COMMITMENTS MADE WITH SUPPLIERS AND YOU COULD COMPLETE ARRANGEMENTS NECESSARY FOR PERFORMANCE. THE CONTRACTING OFFICER ON THE SAME DATE ADVISED YOU NOT TO PROCEED ANY FURTHER AND BEGAN REEVALUATING YOUR ABILITY TO PRODUCE AN ITEM OFFERING THE NECESSARY QUALITY. ON DECEMBER 10, 1968, THE CONTRACTING OFFICER DETERMINED THAT THE EQUIPMENT OFFERED BY YOU HAD NOT BEEN PROVEN RELIABLE THROUGH USAGE AS REQUIRED BY ARTICLE 42 QUOTED ABOVE. ACCORDINGLY, YOU WERE DETERMINED TO BE "NONRESPONSIBLE.' OF THE OTHER TWO OFFERORS ONLY RAYGO COULD MEET THE REQUIRED DELIVERY SCHEDULE. CONSEQUENTLY, ON DECEMBER 10, 1968, NEGOTIATIONS WERE REOPENED AND RAYGO WAS PERMITTED TO SUBMIT A DOWNWARD REVISION OF ITS PROPOSAL. AWARD OF THE CONTRACT WAS MADE TO RAYGO ON DECEMBER 10, 1968, IN THE AMOUNT OF $350,582.79.

IN THE TELEGRAM OF DECEMBER 11, 1968, YOU PROTESTED THE AWARD TO RAYGO ON THE GROUNDS THAT NOTIFICATION OF AN UNSUCCESSFUL OFFEROR OF A PENDING AWARD VIOLATED REGULATIONS; THAT THE GOVERNMENT UNETHICALLY REQUESTED AN OFFEROR TO UNDERCUT THE PRICE ALREADY ACCEPTED FOR AWARD; THAT NO CONSIDERATION WAS GIVEN OR INTENDED TO BE GIVEN TO AN ENGINEERING DETERMINATION; AND THAT, SINCE THE ITEM OFFERED BY RAYGO DID NOT CONFORM TO THE GOVERNMENT'S PURCHASE DESCRIPTION, RAYGO'S OFFER SHOULD HAVE BEEN REJECTED.

THE ATTORNEYS CONTEND ON YOUR BEHALF THAT THE CONTRACT AWARD TO RAYGO SHOULD BE SET ASIDE ON THE GROUNDS THAT THE CONTRACTING OFFICER'S DETERMINATION OF YOUR NONRESPONSIBILITY WAS ARBITRARY AND CONTRARY TO THE ARMED SERVICES PROCUREMENT REGULATION. IT IS POINTED OUT THAT UNDER ASPR 1-902, ET SEQ., THE FACT THAT A PROSPECTIVE CONTRACTOR IS UNABLE TO DEMONSTRATE EXTENSIVE PRIOR USE OF THE PARTICULAR MODEL OFFERED CANNOT IN ITSELF REQUIRE A DETERMINATION OF NONRESPONSIBILITY. SEVERAL DECISIONS OF OUR OFFICE ALSO ARE CITED BY YOUR ATTORNEYS AS PRECLUDING THE REJECTION OF A BID MERELY BECAUSE OF A TECHNICAL FAILURE TO MEET EXPERIENCE REQUIREMENTS. IN ADDITION, YOUR ATTORNEYS RAISE MANY QUESTIONS ON PAGES 32 AND 33 OF THEIR BRIEF. WE WILL NOT REPEAT THOSE QUESTIONS HERE.

AT THE OUTSET, IT MAY BE POINTED OUT THAT WE REQUESTED OUR AUDITORS TO INVESTIGATE THE ALLEGATIONS MADE BY YOUR ATTORNEYS. THEY HAVE REPORTED THAT, ON THE BASIS OF THEIR REVIEW OF THE CONTRACT DOCUMENTS AND AFTER DISCUSSIONS WITH RESPONSIBLE PROCUREMENT OFFICIALS, MOST OF THE FACTS INCLUDED IN YOUR ATTORNEYS' REPLY TO THE ADMINISTRATIVE REPORT OF THE CONTRACTING OFFICER WERE CORROBORATED BUT THAT THEY FOUND NO EVIDENCE OF COLLUSION OR OTHER MALFEASANCE AS INFERRED FROM THE QUESTIONS RAISED ON PAGES 32 AND 33 OF THE REPLY OF YOUR ATTORNEYS.

REGARDING THE NOTIFICATION TO ALL PROPOSERS THAT AWARD WOULD BE MADE TO YOUR FIRM BEFORE THE CONTRACT WAS ACTUALLY EXECUTED AND DISPATCHED, WE AGREE THAT SUCH NOTICE WAS NOT REQUIRED BY THE REGULATION. ASPR 3-508.2 PROVIDES THAT IN CASES WHERE IT APPEARS THAT THE PERIOD OF EVALUATION MAY EXCEED 30 DAYS, THE CONTRACTING OFFICER, UPON DETERMINATION THAT A PROPOSAL IN UNACCEPTABLE, SHALL GIVE PROMPT NOTICE OF THAT FACT. IT IS NOTED THAT THE REGULATION DOES NOT SPECIFICALLY PRECLUDE THE GIVING OF SUCH NOTICES IN OTHER CASES. INASMUCH AS AN EXTENDED PERIOD OF TIME WAS NOT REQUIRED IN THE EVALUATION OF PROPOSALS, WE THINK THAT THE NOTICE WAS PREMATURE. HOWEVER, THAT FACT DOES NOT IN OUR OPINION RENDER THE CONTRACT AWARDED TO RAYGO ILLEGAL. THE ADMINISTRATIVE OFFICE HAS ADVISED US THAT ACTION IS BEING TAKEN TO PRECLUDE RECURRENCE OF SUCH A PRACTICE IN FUTURE SOLICITATIONS.

REGARDING YOUR CONTENTION THAT THE GOVERNMENT UNETHICALLY REQUESTED AN OFFEROR TO UNDERCUT YOUR PRICE ALREADY ACCEPTED FOR AWARD, THE CONTRACTING OFFICER DENIES SUCH FACT AND STATES THAT AT THE TIME RAYGO WAS REQUESTED TO SUBMIT ITS FINAL OFFER THAT COMPANY WAS THE ONLY RESPONSIBLE OFFEROR MEETING THE GOVERNMENT'S DELIVERY SCHEDULE SINCE YOU HAD BEEN DECLARED NONRESPONSIBLE. IN THOSE CIRCUMSTANCES, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER IMPROPERLY CONDUCTED FURTHER NEGOTIATIONS WITH RAYGO.

REGARDING YOUR CONTENTION THAT THE CONTRACTING OFFICER DID NOT OBTAIN ENGINEERING DETERMINATIONS FROM THE GOVERNMENT ENGINEERS AT FORT BELVOIR, VIRGINIA, BEFORE DETERMINING YOUR FIRM WAS NONRESPONSIBLE, THE CONTRACTING OFFICER ADMITS THAT THIS IS TRUE. IT IS HIS POSITION, HOWEVER, THAT SUCH INFORMATION WAS UNNECESSARY BECAUSE HE HAD OBTAINED INFORMATION FROM THE SAN ANTONIO DEFENSE CONTRACT ADMINISTRATION SERVICES (DCAS) THAT YOUR ITEM WAS NOT A STANDARD PRODUCTION ITEM WHICH HAD BEEN PROVEN BY USAGE. OUR OFFICE CONSISTENTLY HAS TAKEN THE POSITION THAT THE TECHNICAL ACCEPTABILITY OF A PROPOSAL IS FOR DETERMINATION BY THE PROCUREMENT ACTIVITY AND THAT WE WILL DEFER TO THE TECHNICAL DISCRETION AND JUDGMENT OF THE ADMINISTRATIVE AGENCY. B-150658, MAY 6, 1963, AND B-150898, JUNE 11, 1963.

CONCERNING YOUR ALLEGATION THAT THE ITEM OFFERED BY RAYGO DID NOT CONFORM TO THE GOVERNMENT'S PURCHASE DESCRIPTION, IT IS REPORTED BY THE CONTRACTING OFFICER THAT IT WAS DETERMINED THAT RAYGO HAD SOLD OVER 100 OF THE MACHINES CALLED FOR BY THE SOLICITATION EXTENDING BACK TO EARLY 1966. ON THE BASIS OF THE NUMBER OF UNITS MADE AND THE LENGTH OF TIME THEY HAD BEEN USED THE CONTRACTING OFFICER DETERMINED THAT THE MACHINES MET THE TERMS OF THE SOLICITATION AND THE NEEDS OF THE GOVERNMENT. AS INDICATED ABOVE, WE MUST OF NECESSITY ACCEPT THE ADMINISTRATIVE DETERMINATION IN THAT REGARD.

WE AGREE WITH THE CONTENTION OF YOUR ATTORNEYS THAT THE DETERMINATION THAT YOU WERE NONRESPONSIBLE MAY NOT HAVE BEEN IN STRICT ACCORDANCE WITH THE PROVISIONS OF THE ASPR AND OUR DECISIONS. IN THE INSTANT CASE, HOWEVER, THE LANGUAGE CONTAINED IN ARTICLE 42, QUOTED ABOVE, IS DIRECTED ENTIRELY TO THE PAST OPERATING EXPERIENCE OF THE EQUIPMENT BEING OFFERED. ARTICLE 42 WAS INCLUDED IN THE SOLICITATION TO ASSURE THAT ONLY EQUIPMENT WHICH HAD BEEN PROVEN BY SATISFACTORY USE WOULD BE PROCURED. INASMUCH AS THE CONTRACTING OFFICER DETERMINED THAT YOU WERE UNABLE TO PROVE RELIABILITY OF YOUR EQUIPMENT BY PRIOR USE AND SINCE THIS IS A NEGOTIATED PROCUREMENT AS DISTINGUISHED FROM A FORMALLY ADVERTISED PROCUREMENT, WE SEE NO LEGAL OBJECTION TO HIS HAVING REJECTED YOUR PROPOSAL.

WHILE YOUR ATTORNEYS HAVE INDICATED IN THEIR BRIEF THAT THE CONTRACTING OFFICER REJECTED YOUR PROPOSAL FOR REASONS TOTALLY UNRELATED TO THE QUALITY OF YOUR PRODUCT, OTHER THAN RAISING CERTAIN QUESTIONS AS TO WHY THE CONTRACTING OFFICER DID NOT CHECK CERTAIN INFORMATION IN MAKING HIS DETERMINATION, NO EVIDENCE HAS BEEN FURNISHED TO SHOW THAT THE CONTRACTING OFFICER ACTED IN OTHER THAN GOOD FAITH.