B-167152-/1), AUG. 14, 1969

B-167152-/1): Aug 14, 1969

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A "TO WHOM IT MAY CONCERN" LETTER SENT BY THE SUCCESSFUL LOW BIDDER TO THE COMPETING BIDDERS SHORTLY BEFORE OPENING ADVISING THAT ITEM WAS COVERED BY PATENT IS NOT REGARDED AS INHIBITING OTHER BIDDERS OR RESTRICTING COMPETITION. TO AIRTEK CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF JUNE 3. THE SUBJECT INVITATION WAS ISSUED DECEMBER 2. BIDS WERE OPENED ON JANUARY 8. HERMET MANUFACTURING COMPANY (HERMET) WAS FOUND TO BE THE LOW BIDDER AT $43. YOUR FIRM WAS FOURTH LOW AT $55. ALLEGED BY YOU TO HAVE BEEN SENT BY HERMET TO SEVERAL OF THE PROSPECTIVE BIDDERS FOR THIS PROCUREMENT PRIOR TO BID OPENING. IT WAS ADDRESSED "TO WHOM IT MAY CONCERN. DOUBLE WALL STACKS OR BREECHINGS WILL RESULT IN OUR TAKING PROPER ACTION UNDER THE LAW TO PROTECT OUR UNITED STATES' PATENT INTERESTS.'.

B-167152-/1), AUG. 14, 1969

BID PROTEST - COMPETITION RESTRICTION DECISION DENYING PROTEST OF AIRTEK CORP., FOURTH LOW BIDDER, THAT LETTER FROM SUCCESSFUL BIDDER HAD EFFECT OF INHIBITING PROSPECTIVE BIDDERS IN PROCUREMENT OF STEEL STACK FOR BOILER AT BOSTON NAVAL SHIPYARD. A "TO WHOM IT MAY CONCERN" LETTER SENT BY THE SUCCESSFUL LOW BIDDER TO THE COMPETING BIDDERS SHORTLY BEFORE OPENING ADVISING THAT ITEM WAS COVERED BY PATENT IS NOT REGARDED AS INHIBITING OTHER BIDDERS OR RESTRICTING COMPETITION.

TO AIRTEK CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 3, 1969, PROTESTING THE AWARD OF A CONTRACT TO HERMET MANUFACTURING COMPANY UNDER INVITATION FOR BIDS N62464-69-C-0005, ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, BOSTON, MASSACHUSETTS.

THE SUBJECT INVITATION WAS ISSUED DECEMBER 2, 1968, AND CALLED FOR A NEW STEEL STACK FOR A BOILER LOCATED AT THE BOSTON NAVAL SHIPYARD. BIDS WERE OPENED ON JANUARY 8, 1969, AND, OF A TOTAL OF FIVE BIDS RECEIVED, HERMET MANUFACTURING COMPANY (HERMET) WAS FOUND TO BE THE LOW BIDDER AT $43,997.95. YOUR FIRM WAS FOURTH LOW AT $55,900. ON JANUARY 13, 1969, YOU WROTE TO THE CONTRACTING OFFICER COMPLAINING OF A LETTER DATED JANUARY 3, 1969, ALLEGED BY YOU TO HAVE BEEN SENT BY HERMET TO SEVERAL OF THE PROSPECTIVE BIDDERS FOR THIS PROCUREMENT PRIOR TO BID OPENING. YOU ENCLOSED A COPY OF THE LETTER IN QUESTION. IT WAS ADDRESSED "TO WHOM IT MAY CONCERN," AND STATED AS FOLLOWS: "IN CONNECTION WITH ANY CONTEMPLATED BIDS ON AIR-SEALED, DOUBLE SHELL, STEEL STACKS OR BREECHINGS, WE WISH TO POINT OUT THAT ANY ATTEMPT TO INFRINGE ON OUR UNITED STATES PATENTS (NOS. 3,302,599, 3,363,591 AND 3,368,506) COVERING THE DESIGNS OF SAID HERMETICALLY AIR-SEALED, DOUBLE WALL STACKS OR BREECHINGS WILL RESULT IN OUR TAKING PROPER ACTION UNDER THE LAW TO PROTECT OUR UNITED STATES' PATENT INTERESTS.' THE LETTERHEAD AND SIGNATURE BLOCK INDICATED THAT IT WAS SENT BY THE HERMET MANUFACTURING CORPORATION.

IT WAS YOUR CONTENTION THAT THIS LETTER "ARRIVING JUST TWO OR THREE DAYS BEFORE DUE DATE OF THE BID OPENING" HAD THE EFFECT OF INHIBITING PROSPECTIVE BIDDERS FROM BIDDING DUE TO THE IMPLIED THREAT OF LEGAL ACTION IN THE EVENT OF AN AWARD. IN THIS CONNECTION, YOU ADVISED THAT 13 PROSPECTIVE BIDDERS WERE SOLICITED FOR THIS PROCUREMENT BUT ONLY FIVE FIRMS BID, INCLUDING HERMET, WHO SENT THE LETTER, YOUR FIRM, WHO DID NOT RECEIVE THE LETTER, AND A THIRD BIDDER WHO HAD PREVIOUSLY DONE WORK FOR HERMET. IT WAS YOUR OPINION, BASED ON THE ADVICE OF YOUR ATTORNEYS, THAT THE HERMET PATENTS IN FACT WERE NOT APPLICABLE TO THE REQUIRED NAVY DESIGN. YOU ASKED THE CONTRACTING OFFICERS TO DETERMINE BEFORE MAKING AWARD WHETHER THE STATED FACTS CONSTITUTED A RESTRICTION OF COMPETITION OR A VIOLATION OF THE CERTIFICATE OF INDEPENDENT PRICE DETERMINATION WHICH IS INCLUDED IN GSA STANDARD FORM 19-B.

THE RECORD DOES NOT INDICATE THAT THE NAVY FURNISHED A REPLY TO YOUR LETTER. AWARD WAS MADE TO HERMET ON FEBRUARY 7, 1969.

THE NAVY AGREES WITH YOU THAT ITS SPECIFICATIONS DID NOT SPECIFY ANY PROPRIETARY DESIGNS FOR THE WORK REQUIRED. BUT THE DEPARTMENT BELIEVES THAT THERE WAS ADEQUATE COMPETITION FOR THIS PROCUREMENT AND THAT THE AWARD TO HERMET "WAS PROPER IN EVERY RESPECT.' HERMET ADVISES US THAT ITS "TO WHOM IT MAY CONCERN" LETTER IS A GENERAL FORM LETTER WHICH IT USES FROM TIME TO TIME, AND WAS NOT INTENDED TO HAVE SPECIFIC REFERENCE TO THE STACK JOB AT THE BOSTON NAVY YARD.

ON THE BASIS OF THIS RECORD WE ARE NOT PREPARED TO CONCLUDE THAT THE CERTIFICATE OF INDEPENDENT PRICE DETERMINATION WAS VIOLATED BY THE LOW BIDDER OR THAT THE AWARD TO THE LOW BIDDER WAS IMPROPER FOR ANY OTHER REASON. A CERTIFICATE OF INDEPENDENT PRICE DETERMINATION IS REQUIRED GENERALLY FROM ALL BIDDERS ON GOVERNMENT CONTRACTS IN ORDER TO PREVENT COLLUSIVE BIDDING PRACTICES. THE BIDDER IS REQUIRED TO CERTIFY, IN PART, THAT NO ATTEMPT HAS BEEN MADE OR WILL BE MADE BY HIM TO INDUCE ANY OTHER PERSON OR FIRM TO SUBMIT OR NOT TO SUBMIT A BID FOR THE PURPOSE OF RESTRICTING COMPETITION. WHEN A CERTIFICATE IS SUSPECTED BY THE CONTRACTING AGENCY OF BEING FALSE OR THERE IS INDICATION OF COLLUSION, THE MATTER SHOULD BE REPORTED IN ACCORDANCE WITH DEPARTMENTAL REGULATIONS. ASPR 1-115 (F). FURTHER, ASPR 1-111.2 STATES THAT IF THE SECRETARY OF THE DEPARTMENT CONCERNED OR HIS REPRESENTATIVE CONSIDERS THAT ANY BID RECEIVED AFTER FORMAL ADVERTISING EVIDENCES A VIOLATION OF THE ANTITRUST LAWS, HE IS REQUIRED TO REFER SUCH BIDS TO THE ATTORNEY GENERAL FOR APPROPRIATE ACTION. WE ARE ENCLOSING A COPY OF OUR LETTER OF TODAY TO THE SECRETARY OF THE NAVY. B-167152

THE DEPARTMENT OF THE NAVY APPARENTLY DOES NOT FEEL THAT THE FACTS IN THIS CASE WARRANT ANY ACTION IN ACCORDANCE WITH THOSE REGULATIONS, AND WE HAVE NO BASIS TO REACH A CONTRARY CONCLUSION. FURTHERMORE, THERE IS NO EVIDENCE TO SHOW THAT YOU OR ANYONE ELSE WAS DETERRED FROM BIDDING BECAUSE OF THE LETTER IN QUESTION. ACCORDINGLY, WE MUST DENY YOUR PROTEST AGAINST THE AWARD TO HERMET.