B-166175, APR. 22, 1969

B-166175: Apr 22, 1969

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TO REGIS MILK COMPANY: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO A. THE INVITATION FOR BIDS WAS ISSUED ON JANUARY 13. SIX BIDS WERE RECEIVED AND OPENED ON THE DATE SCHEDULED. BENTON WAS DETERMINED THE LOW RESPONSIVE BIDDER. AWARD WAS MADE ON FEBRUARY 20. AS THE CURRENT CONTRACT WAS DUE TO EXPIRE ON FEBRUARY 25. THE INVITATION WAS ISSUED ON GENERAL SERVICES ADMINISTRATION STANDARD FORM 33. PARAGRAPH 2 PROVIDES SPACE FOR THE BIDDER TO INDICATE WHETHER HE IS A REGULAR DEALER OR MANUFACTURER AND INCLUDES INFORMATION THAT SAID PARAGRAPH IS APPLICABLE ONLY TO SUPPLY CONTRACTS IN EXCESS OF $10. YOUR PROTEST IS BASED ON THE CONTENTIONS THAT (1) BENTON'S BID WAS NONRESPONSIVE BECAUSE PARAGRAPH 2 WAS NOT COMPLETED AND THAT (2) SINCE BENTON IS NEITHER A MANUFACTURER NOR REGULAR DEALER HE IS NONRESPONSIBLE.

B-166175, APR. 22, 1969

TO REGIS MILK COMPANY:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO A. A. BENTON, D/B/A BENTON DAIRY, UNDER SOLICITATION NO. DSA 135-69-B- 0137, ISSUED BY THE DEFENSE SUPPLY AGENCY, FOR THE MILK REQUIREMENTS AT FORT GORDON, GEORGIA, FOR THE PERIOD FEBRUARY 25, 1969, THROUGH AUGUST 31, 1969.

THE INVITATION FOR BIDS WAS ISSUED ON JANUARY 13, 1969, WITH OPENING SCHEDULED ON JANUARY 29, 1969. SIX BIDS WERE RECEIVED AND OPENED ON THE DATE SCHEDULED. BENTON WAS DETERMINED THE LOW RESPONSIVE BIDDER. ALTHOUGH YOU PROTESTED ANY AWARD TO BENTON BY LETTER DATED FEBRUARY 4, 1969, TO THE PROCURING ACTIVITY, AWARD WAS MADE ON FEBRUARY 20, 1969, AS THE CURRENT CONTRACT WAS DUE TO EXPIRE ON FEBRUARY 25, 1969.

THE INVITATION WAS ISSUED ON GENERAL SERVICES ADMINISTRATION STANDARD FORM 33, JULY 1966 EDITION. UNDER REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGMENTS, PAGE 2 OF STANDARD FORM 33, PARAGRAPH 2 PROVIDES SPACE FOR THE BIDDER TO INDICATE WHETHER HE IS A REGULAR DEALER OR MANUFACTURER AND INCLUDES INFORMATION THAT SAID PARAGRAPH IS APPLICABLE ONLY TO SUPPLY CONTRACTS IN EXCESS OF $10,000. BENTON DID NOT CHECK EITHER THE REGULAR DEALER OR MANUFACTURER BOX. HOWEVER, HE CHECKED PARAGRAPH 4 TO REPRESENT THAT HE OPERATES AS AN INDIVIDUAL. HE ALSO LISTED BETTER MAID DAIRY PRODUCTS, ATHENS, GEORGIA, AS THE PLANT TO BE UTILIZED IN PROCESSING THE PRODUCTS.

YOUR PROTEST IS BASED ON THE CONTENTIONS THAT (1) BENTON'S BID WAS NONRESPONSIVE BECAUSE PARAGRAPH 2 WAS NOT COMPLETED AND THAT (2) SINCE BENTON IS NEITHER A MANUFACTURER NOR REGULAR DEALER HE IS NONRESPONSIBLE. AS TO THE FIRST ARGUMENT, YOU CONTEND THAT THE ONLY REQUISITE TO COMPLETION OF PARAGRAPH 2 STATED IN THE INVITATION IS THAT THE CONTRACT EXCEED $10,000, AS IT DOES HERE. IT IS YOUR POSITION THAT EACH BIDDER WAS REQUIRED TO COMPLETE PARAGRAPH 2 AND IN FACT BE EITHER A REGULAR DEALER OR MANUFACTURER EVEN THOUGH THE PROCUREMENT OF DAIRY PRODUCTS IS EXCLUDED FROM THE WALSH-HEALEY ACT. IN SUPPORT OF THIS POSITION, YOU POINT OUT THAT IN THE 19 YEARS YOU HAVE BID ON MILK CONTRACTS THE INVITATION HAS CONTAINED THIS REQUIREMENT; THAT THE INVITATION DID NOT ADVISE BIDDERS THE REGULAR DEALER OR MANUFACTURER REPRESENTATION WAS NOT APPLICABLE; THAT THE AGENCY CAN EXTEND THESE QUALIFICATIONS TO CONTRACTS OTHER THAN THOSE COVERED BY WALSH-HEALEY; AND THAT THE LATTER INTENTION SHOULD BE INFERRED FROM THE INVITATION, THE "BIDDER'S MAILING LIST APPLICATION" AND THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC) PAMPHLET ENTITLED "SELLING FRESH MILK AND FRESH MILK PRODUCTS TO THE ARMED FORCES.' YOU POINT OUT THE DPSC PAMPHLET EMPHASIZES THAT THE PROSPECTIVE BIDDER MUST COMPLETE THE "BIDDER'S MAILING LIST APPLICATION," WHICH INDICATES NO ALTERNATIVE TO THE REPRESENTATION THAT THE BIDDER IS EITHER A REGULAR DEALER OR MANUFACTURER.

YOU CONTEND ALSO THAT A BIDDER WHO IS NOT A REGULAR DEALER OR MANUFACTURER SHOULD BE CONSIDERED NONRESPONSIBLE BECAUSE, AS IS THE CASE WITH BENTON, HE DOES NOT HAVE HIS OWN SOURCE OF SUPPLY OR PRODUCTION FACILITIES AND IN THE EVENT OF DEFAULT THE GOVERNMENT, NOT BEING IN PRIVITY WITH THE SUBCONTRACTOR, WOULD BE WITHOUT THE MEANS TO ENFORCE PERFORMANCE. IN THIS CONNECTION, YOU CONTEND THAT AS A MATTER OF POLICY THERE SHOULD BE A REGULAR DEALER OR MANUFACTURER QUALIFICATION WHETHER OR NOT IT IS REQUIRED BY THE WALSH-HEALEY ACT. IN THIS REGARD, YOU CITE OUR DECISION REPORTED AT 10 COMP. GEN. 314.

THE AGENCY CONCEDES THAT PARAGRAPH 2 ON PAGE 2 OF STANDARD FORM 33 IS SOMEWHAT MISLEADING ON ITS FACE SINCE IT APPEARS THAT THE REGULAR DEALER/MANUFACTURER REPRESENTATION IS APPLICABLE TO ALL SUPPLY CONTRACTS IN EXCESS OF $10,000. HOWEVER, DSA STATES THAT IN VIEW OF THE EXCLUSION OF DAIRY PRODUCTS FROM COVERAGE UNDER THE WALSH-HEALEY ACT IT HAS NOT CONSIDERED THE REGULAR DEALER/MANUFACTURER REPRESENTATION APPLICABLE SINCE AT LEAST 1962. DSA ADVISES THAT AT ONE TIME IT WAS THE DEPARTMENT OF DEFENSE POLICY TO APPLY THE REGULAR DEALER/MANUFACTURER QUALIFICATION EVEN THOUGH THE WALSH-HEALEY ACT WAS NOT APPLICABLE TO THE PARTICULAR PROCUREMENT. THIS POLICY WAS BASED ON ASPR 1-201.18 (B) WHICH, UNTIL RESCINDED IN SEPTEMBER 1962, PROVIDED THAT EVEN THOUGH THE ACT WAS APPLICABLE ONLY TO CONTRACTS IN EXCESS OF $10,000, IT WAS THE DOD POLICY TO APPLY THE QUALIFICATIONS TO CONTRACTS OF $10,000 OR LESS. ALTHOUGH NOT EXPRESSLY COVERED IN THE REGULATION, THIS POLICY WAS APPARENTLY EXTENDED TO CONTRACTS IN EXCESS OF $10,000 WHICH WERE OTHERWISE EXEMPTED BY THE ACT. IN THIS CONNECTION, IN 1963 BENTON CONTACTED THE DEFENSE SUBSISTENCE SUPPLY CENTER (NOW DPSC) AND REQUESTED INFORMATION AS TO COMPLETING THE BIDDER'S MAILING LIST APPLICATION BECAUSE HIS TYPE OF BUSINESS DID NOT FIT IN ANY OF THE CATEGORIES LISTED IN PARAGRAPH 12, WHICH ARE LIMITED TO MANUFACTURER OR PROCESSOR, REGULAR DEALER, OR SERVICE ESTABLISHMENT. THE PURCHASING DIVISION, DSSC, ADVISED BENTON THAT HEADQUARTERS HAD CONTACTED THE LEGAL DIVISION AND RECEIVED THE OPINION THAT HE WAS NEVERTHELESS ELIGIBLE TO BE PLACED ON THE MAILING LIST AND COULD LEAVE PARAGRAPH 12 BLANK. THEREAFTER, BENTON CONTINUED TO BID ON MILK CONTRACTS AND RECEIVED AWARDS EVEN THOUGH HE WAS NEITHER A REGULAR DEALER NOR MANUFACTURER.

FURTHERMORE, DSA POINTS OUT THAT STANDARD FORM 33 AND THE BIDDER'S MAILING LIST APPLICATION ARE DESIGNED BY THE GENERAL SERVICES ADMINISTRATION FOR THE USE OF ALL AGENCIES IN THE PROCUREMENT OF MULTITUDE OF SUPPLIES AND SERVICES, MOST OF WHICH ARE COVERED BY THE ACT. ADDITION, DSA NOTES THAT STANDARD FORM 32 WAS INCORPORATED BY REFERENCE IN THE SUBJECT INVITATION AND ARTICLE 17 THEREOF PROVIDES THAT ALL REPRESENTATIONS AND STIPULATIONS REQUIRED BY THE ACT ARE INCORPORATED BY REFERENCE IF THE CONTRACT EXCEEDS $10,000 AND "IS OTHERWISE SUBJECT TO THE WALSH-HEALEY PUBLIC CONTRACTS ACT.' IN VIEW OF THE STATUTORY EXCLUSION OF DAIRY PRODUCTS FROM COVERAGE UNDER THE ACT, DSA IS OF THE VIEW THAT IT COULD NOT PROPERLY APPLY THE REGULAR DEALER/MANUFACTURER QUALIFICATIONS TO THE PROCUREMENT OF MILK PRODUCTS.

TO PRECLUDE THE POSSIBILITY THAT PROSPECTIVE BIDDERS WHO ARE NEITHER REGULAR DEALERS NOR MANUFACTURERS MAY INTERPRET PARAGRAPH 2 AS YOU HAVE, AND THEREFORE REFRAIN FROM BIDDING, DSA PROPOSES TO TAKE STEPS TO CLARIFY THE STANDARD FORM 33 BY AN APPROPRIATE CHANGE OR BY PROVIDING AN EXCEPTION IN APPROPRIATE SOLICITATIONS ISSUED BY IT. HOWEVER, IT IS ALSO REPORTED THAT UNTIL THE INSTANT PROTEST DSA WAS NOT AWARE OF ANY CONFUSION AS TO APPLICABILITY OF THE REGULAR DEALER/MANUFACTURER REPRESENTATION.

THE WALSH-HEALEY ACT, 41 U.S.C. 35-45, PROVIDES THAT IN CONTRACTS FOR SUPPLIES AND SERVICES IN AN AMOUNT EXCEEDING $10,000, THERE SHALL BE INCLUDED CERTAIN REPRESENTATIONS AND STIPULATIONS, AMONG WHICH IS THE REGULAR DEALER/MANUFACTURER QUALIFICATION. PARAGRAPH 2 OF STANDARD FORM 33 IS INTENDED TO DETERMINE COMPLIANCE WITH THAT REQUIREMENT OF THE ACT. ARTICLE 17 OF STANDARD FORM 32 MAKES IT CLEAR THAT THE REPRESENTATIONS AND STIPULATIONS OF THE ACT ARE A PART OF THE INVITATION ONLY IF THE CONTRACT "EXCEEDS OR MAY EXCEED $10,000, AND IS OTHERWISE SUBJECT TO THE WALSH- HEALEY PUBLIC CONTRACTS ACT.' SECTION 43 OF THE ACT PROVIDES THAT SECTIONS 35-45 OF TITLE 41 SHALL NOT APPLY TO THE PURCHASES OF SPECIFIED ITEMS, INCLUDING DAIRY PRODUCTS. THEREFORE, UNDER THE TERMS OF THE INVITATION DSA WAS NOT REQUIRED TO APPLY THE REGULAR DEALER/MANUFACTURER TEST TO BENTON AND BENTON'S FAILURE TO COMPLETE PARAGRAPH 2 WAS NOT MATERIAL AND DID NOT AFFECT THE RESPONSIVENESS OF HIS BID.

ALTHOUGH WE APPROVED THE USE OF THE "REGULAR DEALER" QUALIFICATION IN10 COMP. GEN. 314, WE DID SO ON THE BASIS THAT THE CONTRACTING AGENCY IN EFFECT HAD CONCLUDED THAT SUCH QUALIFICATION WAS A CONDITION OF RESPONSIBILITY. WHILE IN THIS CASE NO DETERMINATION AS TO BENTON'S STATUS OF A REGULAR DEALER OR MANUFACTURER WAS MADE, THERE WAS A PRE AWARD SURVEY AS BOTH BENTON AND HIS PRIMARY SUBCONTRACTOR, BETTER MAID DAIRY PRODUCTS. ON FEBRUARY 19, 1969, THE CHAIRMAN OF THE PRE-AWARD SURVEY BOARD RECOMMENDED AWARD TO BENTON. THEREFORE, THE CONTRACTING OFFICER MADE AN AFFIRMATIVE DETERMINATION OF BENTON'S RESPONSIBILITY AS A PROSPECTIVE CONTRACTOR PURSUANT TO ASPR 1-904.1. OUR OFFICE MUST ACCEPT SUCH DETERMINATION IN THE ABSENCE OF EVIDENCE THAT IT WAS ARBITRARY, CAPRICIOUS OR NOT BASED UPON SUBSTANTIAL EVIDENCE. 45 COMP. GEN. 4.

ACCORDINGLY, THERE IS NO BASIS FOR OUR OFFICE TO DISTURB THE AWARD TO BENTON.