B-165809, JAN. 24, 1969

B-165809: Jan 24, 1969

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TO INET POWER: REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 14. THE SUBJECT INVITATION WAS ISSUED ON SEPTEMBER 27. ELEVEN BIDS WERE RECEIVED AND OPENED ON OCTOBER 18. WHITE WAS THE LOWEST BIDDER WITH A UNIT PRICE OF $73 EACH BASED ON WAIVER OF FIRST ARTICLE TESTING. WAS THE NEXT LOWEST BIDDER WITH A UNIT PRICE OF $70 EACH PLUS FIRST ARTICLE TESTING COSTS OF $1. WHICH STATED IN PART: "IN ACCORDANCE WITH CLAUSE 32 (PAGE 7) WE OFFER THE FOLLOWING STATEMENT: "BIDDER PROPOSES TO SUPPLY ON ANY RESULTANT CONTRACT ITEMS WHICH ARE CONSIDERED TO BE FORMER GOVERNMENT SURPLUS PROPERTY. ALL ITEMS ARE NEW AND UNUSED AND WERE NOT ACQUIRED BY BIDDER FROM ANY GOVERNMENT AGENCY.'. THAT: "UNDER THE TERMS AND CONDITIONS OF NOTE 2 (PAGE 12) ON REFERENCED BID WE HEREBY REQUEST WAIVER OF PREPRODUCTION (FIRST ARTICLE) TESTING SINCE WE ARE OFFERING A PRODUCT WHICH HAS HAD PRIOR APPROVAL AS SHOWN ON LOCKHEED SPECIFICATION CONTROL DRAWING 695224.'.

B-165809, JAN. 24, 1969

TO INET POWER:

REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 14, 1968, PROTESTING AGAINST THE AWARD OF A CONTRACT TO R.E. WHITE AND ASSOCIATES, INC. (WHITE), UNDER INVITATION FOR BIDS NO. DSA-900-69-B-1251, ISSUED BY THE DEFENSE ELECTRONICS SUPPLY CENTER (DESC), DAYTON, OHIO.

THE SUBJECT INVITATION WAS ISSUED ON SEPTEMBER 27, 1968, AND SOLICITED BIDS FOR FIVE INCREMENTAL QUANTITIES (COVERING QUANTITIES OF 25 THROUGH 999 EACH) OF A RELAY, FREQUENCY SENSITIVE, FSN 5945-628 6484, PART NUMBER 695224-1, TO BE MANUFACTURED IN ACCORDANCE WITH LOCKHEED AIRCRAFT DRAWING 695224, REVISION "H," AND CERTAIN OTHER CITED DRAWINGS AND SPECIFICATIONS. ELEVEN BIDS WERE RECEIVED AND OPENED ON OCTOBER 18, 1968. IN THE QUANTITY INCREMENT OF 100 THROUGH 249 EACH (WHICH COVERED THE QUANTITY OF 130 EACH ULTIMATELY AWARDED TO WHITE), WHITE WAS THE LOWEST BIDDER WITH A UNIT PRICE OF $73 EACH BASED ON WAIVER OF FIRST ARTICLE TESTING. YOUR FIRM, INET, WAS THE NEXT LOWEST BIDDER WITH A UNIT PRICE OF $70 EACH PLUS FIRST ARTICLE TESTING COSTS OF $1,000 TO BE PRORATED OVER THE UNITS.

WHITE INDICATED IN ITS BID THAT IT INTENDED TO FURNISH HARTMAN ELECTRICAL MFG. CO. PART NO. A846-6 AND INCLUDED AS PART OF ITS BID A LETTER DATED OCTOBER 15, 1968, WHICH STATED IN PART:

"IN ACCORDANCE WITH CLAUSE 32 (PAGE 7) WE OFFER THE FOLLOWING STATEMENT:

"BIDDER PROPOSES TO SUPPLY ON ANY RESULTANT CONTRACT ITEMS WHICH ARE CONSIDERED TO BE FORMER GOVERNMENT SURPLUS PROPERTY. ALL ITEMS ARE NEW AND UNUSED AND WERE NOT ACQUIRED BY BIDDER FROM ANY GOVERNMENT AGENCY.'

WHITE ALSO STATED IN THE LETTER OF OCTOBER 15, WITH REGARD TO FIRST ARTICLE TESTING, THAT:

"UNDER THE TERMS AND CONDITIONS OF NOTE 2 (PAGE 12) ON REFERENCED BID WE HEREBY REQUEST WAIVER OF PREPRODUCTION (FIRST ARTICLE) TESTING SINCE WE ARE OFFERING A PRODUCT WHICH HAS HAD PRIOR APPROVAL AS SHOWN ON LOCKHEED SPECIFICATION CONTROL DRAWING 695224.'

WHITE WAS ELIGIBLE FOR THE WAIVER OF FIRST ARTICLE TESTING FOR THE REASON THAT ITS OFFERED HARTMAN PART NO. A846-6 IS SHOWN ON LOCKHEED DRAWING NO. 695224, REVISION "H," AS AN APPROVED SOURCE AND THE INVITATION STATES IN NOTE 2 ON PAGE 12 THAT:

"PREPRODUCTION (FIRST ARTICLE) TESTING IS WAIVED FOR HARTMAN ELECTRICAL MFG. CO. AND TO THOSE BIDDERS OFFERING A PRODUCT WHICH HAS PREVIOUSLY MET THE PREPRODUCTION TESTING REQUIREMENTS, BEEN ACCEPTED BY THE GOVERNMENT AND HAS NOT BEEN FOUND TO BE UNSATISFACTORY.'

BASED ON ALL INFORMATION AVAILABLE (INCLUDING THE PREAWARD SURVEY MADE IN CONNECTION WITH A PREVIOUSLY CANCELED INVITATION FOR BIDS NO. DSA-900-69-B -0238 COVERING THE SAME ITEMS HERE INVOLVED), THE CONTRACTING OFFICER DETERMINED THAT WHITE WAS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER AND CONTRACT NO. DSA-900-69-C-5103 WAS AWARDED TO WHITE ON DECEMBER 10, 1968, FOR A QUANTITY OF 130 RELAYS AT A UNIT PRICE OF $73 EACH AND A TOTAL PRICE OF $9,490, WITH FIRST ARTICLE TESTING WAIVED.

THE BASIS FOR YOUR PROTEST, AS SET FORTH IN YOUR TELEGRAM OF DECEMBER 14, 1968, TO OUR OFFICE IS THAT:

"* * * INET POWER SPECIFICALLY PROTESTS THE AWARD TO RE WHITE AND ASSOCIATES, INC. BECAUSE THEY ARE NOT A MANUFACTURER OF THE ITEMS BID BUT ARE A DEALER IN SURPLUS GOVERNMENT MATERIAL. IN ACCORDANCE WITH CLAUSE NO. 32, -GOVERNMENT SURPLUS' (JANUARY 1965) FOUND ON PAGE 7 OF THE IFB, FORMER GOVERNMENT SURPLUS PROPERTY IS NOT TO BE SUPPLIED. * * *"

WITH RESPECT TO YOUR CONTENTION THAT CLAUSE 32 OF THE INVITATION WOULD BAR WHITE'S USE OF FORMER GOVERNMENT SURPLUS PROPERTY, THE CLAUSE ENTITLED "GOVERNMENT SURPLUS," SET FORTH IN PARAGRAPH 1-1208 (D) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WAS INCORPORATED IN FULL IN THIS INVITATION AS CLAUSE 32 ON PAGE 7 (DESC-P 71-479) AND PROVIDED AS FOLLOWS:

"32. GOVERNMENT SURPLUS (JAN 1965) (BIDDER COMPLETE)

"/A) IN THE EVENT THE BID OR PROPOSAL IS BASED ON FURNISHING ITEMS OR COMPONENTS WHICH ARE FORMER GOVERNMENT SURPLUS PROPERTY OR RESIDUAL INVENTORY RESULTING FROM TERMINATED GOVERNMENT CONTRACTS, A COMPLETE DESCRIPTION OF THE ITEMS OR COMPONENTS, QUANTITY TO BE USED, NAME OF GOVERNMENT AGENCY FROM WHICH ACQUIRED AND DATE OF ACQUISITION SHALL BE SET FORTH BELOW: ------------------------------------------------------ ------

"NOTWITHSTANDING ANY INFORMATION PROVIDED IN ACCORDANCE WITH THIS PROVISION, ITEMS FURNISHED BY THE CONTRACTOR MUST COMPLY IN ALL RESPECTS WITH THE SPECIFICATIONS CONTAINED HEREIN.

"/B) EXCEPT AS DISCLOSED BY THE CONTRACTOR IN (A) ABOVE, NO PROPERTY OF THE TYPE DESCRIBED HEREIN SHALL BE FURNISHED UNDER THIS CONTRACT UNLESS APPROVED IN WRITING BY THE CONTRACTING OFFICER.'

WHITE INSERTED IN THE ABOVE BLANK SPACE: "SEE LETTER ATTACHMENT.'

CONTRARY TO YOUR CONTENTION, WHITE DID NOT REPRESENT ITSELF AS BEING A MANUFACTURER OF THE SUPPLIES OFFERED, BUT REPRESENTED IN ITS BID THAT IT WAS A DEALER. WHITE COMPLIED WITH THE REQUIREMENTS OF CLAUSE 32 BY STATING IN ITS LETTER OF OCTOBER 15, 1968, ACCOMPANYING ITS BID, THAT ALL OF THE ITEMS TO BE FURNISHED WERE CONSIDERED TO BE FORMER GOVERNMENT SURPLUS, WERE NEW AND UNUSED, BUT WERE NOT ACQUIRED FROM ANY GOVERNMENT AGENCY. SUCH REPRESENTATION WAS IN ACCORD WITH ASPR 1 1208 AND CLAUSE 32 OF THE INVITATION.

THE RECORD BEFORE US SHOWS THAT THE BID SUBMITTED BY WHITE CONFORMED TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION AND WAS THE LOWEST BID RECEIVED. THE CONTRACTING OFFICER MADE AN ADMINISTRATIVE DETERMINATION THAT WHITE WAS A RESPONSIBLE BIDDER, WHICH DETERMINATION WAS MADE IN GOOD FAITH AND BASED UPON SUBSTANTIAL EVIDENCE. MOREOVER, THE CONTRACT AWARDED TO WHITE CONTAINS PROVISIONS THAT REQUIRE THE ITEMS FURNISHED BY WHITE TO FULLY COMPLY IN ALL RESPECTS WITH THE SPECIFICATIONS AND PROVIDES ADEQUATE REMEDIES IF IT SHOULD FAIL TO DO SO. SEE B-162931, FEBRUARY 21, 1968, AND B-155524, JANUARY 14, 1965.