B-168278, MARCH 30, 1970 49 COMP. GEN. 639

B-168278: Mar 30, 1970

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ALTHOUGH THE AWARD ON THE BASIS OF URGENCY SHOULD NOT HAVE BEEN ACCOMPLISHED UNDER THE INVITATION AND THE PROPER ACTION WOULD HAVE BEEN TO CANCEL THE INVITATION AND NEGOTIATE THE CONTRACT PURSUANT TO THE PUBLIC EXIGENCY PROCEDURES OF 10 U.S.C. 2304(A)(2). WITHDRAWAL OF APPLICATION BY GOVERNMENT THE WITHDRAWAL OF A CERTIFICATE OF COMPETENCY REFERRAL TO THE SMALL BUSINESS ADMINISTRATION AFTER ADVICE THE CERTIFICATE WOULD ISSUE WAS NOT LEGALLY EFFECTIVE TO REMOVE THE LOW BIDDER FROM CONSIDERATION FOR AWARD. EVEN THOUGH ITS BID WAS SUBMITTED ON A FIRST ARTICLE APPROVAL BASIS ONLY. OVERLOOKED THE RESTRICTION IN ARMED SERVICES PROCUREMENT REGULATION 1- 1903(A) THAT ANY DIFFERENCE IN DELIVERY SCHEDULES RESULTING FROM WAIVER OF FIRST ARTICLE APPROVAL IS NOT AN EVALUATION FACTOR.

B-168278, MARCH 30, 1970 49 COMP. GEN. 639

BIDS -- EVALUATION -- DELIVERY PROVISIONS -- FIRST ARTICLE APPROVAL OR WAIVER UNDER AN INVITATION SOLICITING BIDS ON THE BASIS OF FIRST ARTICLE APPROVAL AND/OR WAIVER, WHEN THE NEED FOR THE PROCUREMENT BECAME URGENT, AN AWARD OF A CONTRACT TO THE SECOND LOW BIDDER WHO HAD SUBMITTED BIDS ON BOTH FIRST ARTICLE APPROVAL AND WAIVER, ON THE BASIS THE FIRST ARTICLE WAIVER BID OFFERED EARLIER DELIVERY, AND THE WITHDRAWAL OF THE REQUEST FOR A CERTIFICATE OF COMPETENCY, WHICH HAD BEEN INFORMALLY APPROVED ON THE LOW RESPONSIVE BIDDER WHO HAD SUBMITTED A BID ON A FIRST ARTICLE APPROVAL BASIS ONLY, OVERLOOKED THE ELIGIBILITY OF THE LOW BIDDER FOR A CONTRACT AWARD. ALTHOUGH THE AWARD ON THE BASIS OF URGENCY SHOULD NOT HAVE BEEN ACCOMPLISHED UNDER THE INVITATION AND THE PROPER ACTION WOULD HAVE BEEN TO CANCEL THE INVITATION AND NEGOTIATE THE CONTRACT PURSUANT TO THE PUBLIC EXIGENCY PROCEDURES OF 10 U.S.C. 2304(A)(2), CORRECTIVE ACTION WOULD NOT BE IN THE GOVERNMENT'S INTEREST; HOWEVER, PROCEDURES SHOULD BE REVIEWED. CONTRACTS -- AWARDS -- SMALL BUSINESS CONCERNS -- CERTIFICATIONS -- WITHDRAWAL OF APPLICATION BY GOVERNMENT THE WITHDRAWAL OF A CERTIFICATE OF COMPETENCY REFERRAL TO THE SMALL BUSINESS ADMINISTRATION AFTER ADVICE THE CERTIFICATE WOULD ISSUE WAS NOT LEGALLY EFFECTIVE TO REMOVE THE LOW BIDDER FROM CONSIDERATION FOR AWARD, EVEN THOUGH ITS BID WAS SUBMITTED ON A FIRST ARTICLE APPROVAL BASIS ONLY, AS THE INVITATION SOLICITED BIDS ON BOTH A FIRST ARTICLE APPROVAL AND/OR WAIVER BASIS. THEREFORE, WHEN AN URGENCY FOR THE PROCUREMENT DEVELOPED, THE CONTRACTING OFFICER IN AWARDING A CONTRACT TO THE SECOND LOW BIDDER ON THE BASIS OF FIRST ARTICLE WAIVER TO OBTAIN A SHORTER DELIVERY SCHEDULE, OVERLOOKED THE RESTRICTION IN ARMED SERVICES PROCUREMENT REGULATION 1- 1903(A) THAT ANY DIFFERENCE IN DELIVERY SCHEDULES RESULTING FROM WAIVER OF FIRST ARTICLE APPROVAL IS NOT AN EVALUATION FACTOR, AND THAT THE ALTERNATIVE TO AN AWARD TO THE LOW BIDDER WOULD HAVE BEEN CANCELLATION OF THE INVITATION AND NEGOTIATION OF A CONTRACT PURSUANT TO THE PUBLIC EXIGENCY PROCEDURES OF 10 U.S.C. 2304(A)(2). BIDS -- ALTERNATIVE -- FAILURE TO BID ON ALTERNATE WHERE BIDDERS UNDER AN INVITATION SOLICITING BIDS ON THE BASIS OF FIRST ARTICLE APPROVAL AND/OR WAIVER OF THE ARTICLE ARE ADVISED TO SUBMIT BIDS ON THE BASIS OF FIRST ARTICLE APPROVAL EVEN IF ENTITLED TO WAIVER OF THE FIRST ARTICLE IN ORDER TO MAKE THEM ELIGIBLE FOR CONSIDERATION SHOULD THE CONTRACTING AGENCY DETERMINE TO MAKE AN AWARD ON THE BASIS OF FIRST ARTICLE APPROVAL, THE FACT THAT THE LOW BIDDER DID NOT SUBMIT A BID ON THE FIRST ARTICLE WAIVER ALTERNATIVE DID NOT EFFECT BID RESPONSIVENESS OR THE BIDDER'S ELIGIBILITY FOR THE AWARD OF A CONTRACT ON THE BASIS OF FIRST ARTICLE APPROVAL, AS THE BIDDER HAVING COMPLIED WITH THE TERMS OF THE INVITATION DID NOT RUN THE RISK THAT ITS BID ON THE BASIS OF FIRST ARTICLE APPROVAL COULD NOT BE CONSIDERED BECAUSE THE GOVERNMENT ELECTED TO ACCEPT THE ALTERNATIVE IT DID NOT BID UPON, THE WAIVER OF FIRST ARTICLE APPROVAL.

TO THE SECRETARY OF THE ARMY, MARCH 30, 1970:

REFERENCE IS MADE TO LETTERS DATED DECEMBER 5 AND 23, 1969, AND MARCH 5, 1970, FROM THE DEPUTY DIRECTOR FOR PROCUREMENT, DIRECTORATE OF REQUIREMENTS AND PROCUREMENT, AND THE ASSISTANT GENERAL COUNSEL, HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND, FURNISHING A REPORT ON THE PROTEST OF THE CHAUSSE MANUFACTURING COMPANY, INC., AGAINST THE AWARD OF A CONTRACT TO THE HI-JENNY DIVISION OF HOMESTEAD INDUSTRIES UNDER INVITATION FOR BIDS (IFB) NO. DAAF01-69-B-0767, ISSUED BY THE ROCK ISLAND ARSENAL, ROCK ISLAND, ILLINOIS.

THE IFB WAS ISSUED TO 12 PROSPECTIVE BIDDERS ON MAY 27, 1969, AND SOLICITED BIDS ON A PROPOSED PROCUREMENT OF 192 CLEANERS, STEAM, PRESSURE JET, WHEEL-MOUNTED, IN ACCORDANCE WITH ROCK ISLAND ARSENAL TOOL & EQUIPMENT DIVISION PURCHASE DESCRIPTION T&E PD-22A DATED JULY 21, 1965, AND REFERENCED SPECIFICATIONS. THE IFB REQUESTED BIDS, F.O.B. ORIGIN AND/OR DESTINATION, ON THE BASIS OF FIRST ARTICLE APPROVAL OR WAIVER OF FIRST ARTICLE APPROVAL. SECTION I OF THE INVITATION PROVIDED IN PART:

*** OFFERORS WHO ARE ELIGIBLE TO HAVE FIRST ARTICLE APPROVAL TESTS WAIVED, AND HAVE SO OFFERED, ARE HEREBY REQUESTED TO SUBMIT PRICES ON ALL REQUIREMENTS SET FORTH BELOW SO THAT THEY WILL NOT BE PRECLUDED FROM CONSIDERATION FOR AWARD IN THE EVENT THAT THE GOVERNMENT DETERMINES THAT AN AWARD REQUIRING FIRST ARTICLE APPROVAL IS IN THE BEST INTERESTS OF THE GOVERNMENT. IF SUCH DETERMINATION IS MADE, AWARD WILL BE MADE WITH FIRST ARTICLE APPROVAL, NOTWITHSTANDING THE EXISTENCE OF OFFERS WITHOUT FIRST ARTICLE APPROVAL. AWARD WILL BE MADE AS FOLLOWS: WITH FIRST ARTICLE OR WITHOUT FIRST ARTICLE (NOT BOTH)- (F.O.B. DESTINATION OR F.O.B. ORIGIN)

IN EVALUATION OF OFFERS WITH FIRST ARTICLE APPROVAL, THE COST TO THE GOVERNMENT OF FIRST ARTICLE TESTING WILL BE INCLUDED. THE EVALUATED PRICE OF OFFERS WITH FIRST ARTICLE APPROVAL, WILL BE ARRIVED AT BY SUBTRACTING FROM THE TOTAL OFFER (UNIT PRICE MULTIPLIED BY QUANTITY) THE APPLICABLE DISCOUNT, IF ANY, AND ADDING THERETO THE EVALUATION FACTOR SET OUT IN THE SCHEDULE; PLUS THE TRANSPORTATION COSTS IF APPLICABLE. OFFERS WILL BE EVALUATED ON THE BASIS OF THE LOWEST OVERALL COST TO THE GOVERNMENT.

AWARD WILL BE MADE TO THAT RESPONSIBLE OFFEROR WHOSE OFFER CONFORMING TO THE SOLICITATION, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

AMENDMENT 0001 EXTENDED BID OPENING TIME FROM JUNE 16 TO JUNE 23, 1969. THE INVITATION CONTAINED A NOTICE OF TOTAL SMALL BUSINESS SET ASIDE AND OFFERS WERE SOLICITED FROM SMALL BUSINESS CONCERNS ONLY.

IN RESPONSE TO THE INVITATION, ROCK ISLAND ARSENAL RECEIVED NINE UNIT PRICE BIDS WHICH ARE SUMMARIZED AS FOLLOWS:

WITH

FIRST ARTICLE

CONTRACTOR APPROVAL DEST. ORIGIN CHAUSSE MFG. CO., INC.

X $1,460.00 $1,398.00 SIOUX STEAM CLEANER CORP. X $1,585.00 $1,497.13 HI- JENNY DIV., HOMESTEAD, IND. X $1,649.36 $1,547.00 AEROIL PRODS., CO., INC. X $1,865.00 $1,798.00 LITTLE GIANT PRODS., INC. X $2,613.00 $2,563.00 HENRY SPEN & CO., INC. X NO BID $1,745.00 MALSBARY MFG., CO. X NO BID $1,901.87 L&A PRODUCTS, INC. X

NO BID $1,997.38 DRP PRODS., CO., INC. NO BID NO BID

WITHOUT

FIRST ARTICLE

CONTRACTOR APPROVAL DEST. ORIGIN CHAUSSE MFG. CO., INC.

NO BID NO BID SIOUX STEAM CLEANER CORP. X $1,585.62 $1,497.13 HI-JENNY DIV., HOMESTEAD, IND. X $1,629.36 $1,527.00 AEROIL PRODS., CO., INC. NO BID NO BID LITTLE GIANT PRODS., INC. NO BID

NO BID HENRY SPEN & CO., INC. NO BID NO BID MALSBARY MFG., CO.

X NO BID $1,880.00 L&A PRODUCTS, INC. NO BID NO BID DRP PRODS., CO., INC. X $1,975.00 $1,875.00

IN VIEW OF THE LOW BIDS SUBMITTED BY CHAUSSE ON A FIRST ARTICLE APPROVAL BASIS, THE ARSENAL REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), DETROIT, MICHIGAN, TO CONDUCT A PREAWARD SURVEY OF CHAUSSE. A PREAWARD SURVEY WAS PERFORMED OF CHAUSSE AND DCASR FURNISHED A "NO AWARD" RECOMMENDATION ON AUGUST 8, 1969.

THEREAFTER, BY LETTER DATED AUGUST 21, 1969, HEADQUARTERS, UNITED STATES ARMY WEAPONS COMMAND, AUTHORIZED THE ARSENAL TO FORWARD THE CHAUSSE BID TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION UNDER THE CERTIFICATE OF COMPETENCY (COC) PROCEDURES. ON SEPTEMBER 8, SBA REQUESTED AN EXTENSION UNTIL SEPTEMBER 24, 1969, IN WHICH "TO PROCESS" A COC PERTAINING TO CHAUSSE. A SECOND REQUEST FROM SBA FOR FURTHER EXTENSION UNTIL SEPTEMBER 30, 1969, TO PROCESS THE COC WAS GRANTED BY THE ARSENAL. SUBSEQUENTLY, BY TELEPHONE CALL ON SEPTEMBER 30, 1969, THE ARMY WEAPONS COMMAND SMALL BUSINESS OFFICE WAS NOTIFIED THAT "SBA HAD NOTIFIED DOD OF THEIR INTENTION TO ISSUE A COC ON SUBJECT REFERRAL." WE ARE ADVISED THAT NO WRITTEN NOTIFICATION OF THIS INTENTION WAS FURNISHED TO THE ARSENAL.

THE PROPOSED PROCUREMENT OF STEAM CLEANERS ORIGINALLY WAS NOT CONSIDERED AN URGENT PROCUREMENT; IN FACT, IT CARRIED ONLY AN ISSUE PRIORITY DESIGNATOR 10. HOWEVER, BY LETTER DATED OCTOBER 10, 1969, FROM HEADQUARTERS, UNITED STATES ARMY WEAPONS COMMAND, THE ARSENAL WAS NOTIFIED THAT:

*** EXPEDITED PROCUREMENT ACTION BE TAKEN ON ESN 4940-865-4738, STEAM CLEANER, PORTABLE.

2. THE NICP OF THE S&M DIRECTORATE HAS BEEN EXPERIENCING PROCUREMENT PROBLEMS ON THIS CLEANER, AND IT IS IN A CRITICAL SUPPLY POSITION. THE HISTORY OF OPEN PROCUREMENTS IS KNOWN TO YOUR OFFICE AND AS A RESULT OF A MEETING HELD BY MR. SCHEIBLER, SWERI-PR, ON 8 OCT 69, IT WAS DETERMINED TO EXPEDITE A QUANTITY WHICH WOULD COVER THE KNOWN REQUIREMENTS, ISSUE PRIORITY 06.

3. THERE ARE 178 CLEANERS WHICH ARE IN THE ABOVE POSITION. ATTACHED IS A LIST OF OPEN REQUISITIONS COVERING 159 CLEANERS. LISTED BELOW ARE AN ADDITIONAL 18 CLEANERS REQUIRED FOR MODERNIZATION OF RVN WHICH ALSO FALL INTO THIS CATEGORY. ALSO, THERE IS A TOOL SET REQUISITION REQUIRING A CLEANER WHICH CARRIES AN 05 PRIORITY. THESE REQUIREMENTS TOTAL 178 EACH. IT IS RECOMMENDED THAT A QUANTITY OF 180 EACH BE EXPEDITED WITH DELIVERY NOT TO EXCEED 60 DAYS. BASED ON THE FOREGOING, THE CONTRACTING OFFICER ISSUED THE FOLLOWING DETERMINATION REGARDING "WAIVER OF FIRST ARTICLE" ON OCTOBER 10, 1969:

1. IFB DAAF01-69-B-0767 FOR 192 STEAM CLEANERS, FSN: 4940-865-4738 OPENED ON 16 JUN 69.

2. THIS IFB PROVIDED FOR BIDS ON THE BASIS OF A FIRST ARTICLE ITEM AND FOR BIDS ON THE BASIS OF WAIVING THE FIRST ARTICLE ITEM TO BIDDERS WHO COULD QUALIFY.

3. THE APPARENT LOW BIDDER WITH FIRST ARTICLE TESTING IS THE CHAUSSE MFG. CO., INC. THIS BIDDER, BASED ON A PRE-AWARD SURVEY, WAS REJECTED AS A RESPONSIBLE BIDDER. THIS MATTER HAS BEEN PROCESSED THROUGH TO SMALL BUSINESS ADMINISTRATION FOR COC CONSIDERATION.

4.BY LETTER DATED 10 OCTOBER 1969, THE NICP INFORMED THE CONTRACTING OFFICER THAT THERE EXISTED URGENT REQUIREMENTS FOR 178 OF THESE STEAM CLEANERS. THE REQUIREMENT FOR THESE STEAM CLEANERS CARRY IPD'S OF FROM 1 THROUGH 6 UNDER U M M P S. DELIVERY IS REQUIRED AS SOON AS POSSIBLE AND THE STEAM CLEANERS WILL BE ISSUED ON A FIRST-IN-FIRST-OUT BASIS AGAINST THESE URGENT REQUIREMENTS.

5. THE DELAY INVOLVED IN FIRST ARTICLE TESTING CANNOT BE PERMITTED AS THESE URGENT REQUIREMENTS ARE TO BE MET.

6. THE LOW, RESPONSIVE, RESPONSIBLE BIDDER ON THE BASIS OF WAIVING FIRST ARTICLE TESTING IS HI-JENNY DIVISION, HOMESTEAD INDUSTRIES, CORAOPOLIS, PENNSYLVANIA. THE SIOUX STEAM CLEANER CORPORATION HAS SUBMITTED A LOWER BID ON THE BASIS OF WAIVING FIRST ARTICLE REQUIREMENTS BUT CANNOT RECEIVE A WAIVER BECAUSE AT THIS TIME IT DOES NOT HAVE ANY CONTRACT ON WHICH IT HAS EVER HAD A FIRST ARTICLE ACCEPTED BY THE GOVERNMENT FOR THIS OR A SIMILAR ITEM.

7. ALTHOUGH THE URGENT REQUIREMENT IS FOR 178 STEAM CLEANERS THE BALANCE OF THE 192 STEAM CLEANERS OR 14 IS CONSIDERED SO SMALL A PRODUCTION RUN THAT IT IS NOT FEASIBLE TO ACQUIRE THEM ON A SEPARATE CONTRACT BECAUSE OF PRICE CONSIDERATION.

8. BASED ON THE ABOVE, I HEREBY DETERMINE THAT IT IS IN THE BEST INTEREST OF THE GOVERNMENT TO WAIVE THE REQUIREMENTS FOR FIRST ARTICLE TESTING AND HAVE PRODUCTION FOR THESE URGENTLY REQUIRED STEAM CLEANERS COMMENCE WITHOUT DELAY. IT IS SIGNIFICANT TO OBSERVE THAT NO MENTION WAS MADE IN THE DETERMINATION THAT SBA WAS PROCESSING A COC TO CHAUSSE ON SEPTEMBER 8. IN THIS CONTEXT, WE FEEL THAT THE ARSENAL WAS ON NOTICE THAT A COC WOULD BE FORTHCOMING WHICH WOULD CONCLUSIVELY ESTABLISH CHAUSSE'S CAPACITY AND CREDIT. ARMED SERVICES PROCUREMENT REGULATION (ASPR)1-705.4(A).

IT IS REPORTED THAT IN PREPARING AND ISSUING THE ABOVE-QUOTED DETERMINATION PARTICULAR ATTENTION WAS GIVEN TO THE FIRST ARTICLE APPROVAL CLAUSE AND THE DELIVERY SCHEDULE CONTAINED IN THE INVITATION. IF FIRST ARTICLE APPROVAL WAS REQUIRED, DELIVERIES COULD EXTEND FOR A PERIOD OF 315 DAYS (90 DAYS FOR FIRST ARTICLE SUBMISSION PLUS 75-DAY APPROVAL TIME PLUS 150-DAY DELIVERY REQUIREMENT), WHEREAS FINAL SHIPMENT WOULD BE EFFECTED WITHIN 150 DAYS IF THE CONTRACT DID NOT REQUIRE FIRST ARTICLE APPROVAL.

WITH THE DETERMINATION OF URGENCY NOW IN EFFECT, A TECHNICAL EVALUATION WAS REQUESTED FROM THE ARSENAL'S TOOL & EQUIPMENT DIVISION RELATIVE TO A WAIVER OF FIRST ARTICLE APPROVAL FOR HI-JENNY DIVISION OF HOMESTEAD INDUSTRIES AND SUCH WAIVER WAS APPROVED. ADDITIONALLY, A FAVORABLE PERFORMANCE RECORD ON THE PROSPECTIVE CONTRACTOR WAS REPORTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), PITTSBURGH, PENNSYLVANIA.

IT IS REPORTED THAT AFTER A THOROUGH REVIEW OF ALL BIDS, WITH DUE REGARD FOR THE CURRENT URGENT REQUIREMENTS, CONTRACT DAAF01-70-C-0268 WAS AWARDED TO HI-JENNY AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. THE CONTRACT, AWARDED ON THE BASIS OF WAIVER OF FIRST ARTICLE APPROVAL, F.O.B. ORIGIN, WAS EXECUTED ON OCTOBER 22, 1969, AT A UNIT PRICE OF $1,527, OR FOR A TOTAL PRICE OF $293,184, WITH DELIVERY TO BE MADE WITHIN 150 DAYS AFTER DATE OF AWARD. IN VIEW OF THE AWARD TO HI-JENNY, THE COC REFERRAL TO SBA WAS WITHDRAWN ON OCTOBER 23, 1969.

CHAUSSE'S PROTEST IS PRIMARILY DIRECTED TO THE PROPRIETY OF THE PROCUREMENT OFFICE'S WITHDRAWAL OF THE COC REFERRAL, SINCE SBA HAD GIVEN THE ARMY WEAPONS COMMAND SMALL BUSINESS OFFICE NOTICE ON SEPTEMBER 30, 1969, OF SBA'S INTENTION TO ISSUE A COC ON THE CHAUSSE REFERRAL.

UNDER ASPR 1-705.4, A SMALL BUSINESS BIDDER, ADMINISTRATIVELY FOUND TO BE NONRESPONSIBLE, MAY BE DENIED SBA REVIEW OF ITS CAPACITY AND CREDIT WHEN AWARD MUST BE MADE WITHOUT DELAY.

ASPR 1-705.4(C) PROVIDES THAT AWARD SHALL BE WITHHELD PENDING EITHER SBA ACTION CONCERNING ISSUANCE OF A CERTIFICATE OF COMPETENCY OR THE EXPIRATION OF 15 WORKING DAYS AFTER SBA IS SO NOTIFIED, WHICHEVER IS EARLIER. HOWEVER, THIS PROCEDURE IS NOT MANDATORY WHERE THE CONTRACTING OFFICER CERTIFIES IN WRITING THAT AN AWARD MUST BE MADE WITHOUT DELAY. THE CERTIFICATION OF URGENCY ISSUED HERE RELATED NOT TO DELAY IN MAKING AN AWARD OF A CONTRACT UNDER THE INVITATION BUT TO A PERFORMANCE DELAY THAT WOULD RESULT IF AN AWARD WERE MADE ON AN ALTERNATIVE BASIS, THAT IS, ON FIRST ARTICLE APPROVAL BASIS. WE HAVE HELD THAT THE FACT THAT A CONTRACTING OFFICER HAD REFERRED A MATTER OF RESPONSIBILITY TO THE SBA WOULD NOT THEREAFTER PRECLUDE APPLICATION OF THE NONREFERRAL AUTHORITY ON THE BASIS OF COMPETENT ADVICE OF URGENCY. B-157090, SEPTEMBER 30, 1965. WE STATED FURTHER IN THAT DECISION THAT "THE WAIVER OF SBA REFERRAL MAY BE INVOKED AT ANY TIME PRIOR TO THE SBA DETERMINATION WHEN IT APPEARS THAT A BONA FIDE PROCUREMENT URGENCY REQUIRES ACCELERATED CONTRACTUAL ACTION."

THE RECORD SHOWS THAT FROM A PRACTICAL STANDPOINT, YOUR AGENCY HAD BEEN ADVISED OF THE SBA'S DETERMINATION PRIOR TO THE WITHDRAWAL ACTION. THEREFORE BELIEVE THAT THE WITHDRAWAL OF THE REFERRAL TO SBA--AFTER THAT AGENCY HAD ADVISED OF ITS INTENTION TO ISSUE A COC TO CHAUSSE--WAS NOT LEGALLY EFFECTIVE TO REMOVE THAT LOW BIDDER FROM CONSIDERATION FOR AWARD. THE SOLICITATION REQUIRED AWARD TO THE LOWEST EVALUATED BIDDER-- IRRESPECTIVE OF THE DELIVERY DIFFERENCE BETWEEN FIRST ARTICLE WAIVER AND FIRST ARTICLE APPROVAL--WHETHER IT WAS ON THE BASIS OF ORIGIN OR DESTINATION DELIVERY OR FIRST ARTICLE REQUIRED OR FIRST ARTICLE WAIVED.

THE PUBLIC ADVERTISING STATUTES REQUIRE THAT AWARD BE MADE TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. ALSO, THE RULES OF COMPETITIVE ADVERTISED BIDDING REQUIRE THAT BIDS BE EVALUATED ON A COMMON BASIS WHICH IS PRESCRIBED IN THE INVITATION. 40 COMP. GEN. 160, 161 (1960). OTHERWISE, BIDDERS COULD NOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW, SINCE THEY WOULD NOT KNOW IN ADVANCE THE BASIS ON WHICH THEIR BIDS WOULD BE EVALUATED. 36 COMP. GEN. 380, 385 (1956). THEREFORE, THE INVITATION ITSELF MUST BE CONSIDERED AS CONTROLLING THE BASES UPON WHICH BIDS WILL BE EVALUATED. THE DELIVERY TERMS AND CONDITIONS OF THE IFB WERE SUBJECT TO THE PROVISIONS OF ASPR 1-1903(A) WHICH PROVIDE IN PART: (A) *** TO PERMIT PROPER EVALUATION OF BIDS OR OFFERS WHERE ONE OR MORE BIDDERS OR OFFERORS MAY BE ELIGIBLE TO HAVE FIRST ARTICLE APPROVAL TESTS WAIVED, THE SOLICITATION SHALL PERMIT THE SUBMISSION OF ALTERNATIVE BIDS OR OFFERS-- ONE INCLUDING FIRST ARTICLE APPROVAL TESTS AND THE OTHER EXCLUDING SUCH TESTS; SHALL STATE CLEARLY THE RELATIONSHIP OF THE FIRST ARTICLE TO THE CONTRACT QUANTITY *** AND SHALL PROVIDE FOR: (I) DELIVERY SCHEDULES FOR THE PRODUCTION QUANTITY IN ACCORDANCE WITH 1-305; AS APPROPRIATE, THE DELIVERY SCHEDULES--

(B) MAY PROVIDE FOR A SHORTER DELIVERY SCHEDULE WHERE THE FIRST ARTICLE APPROVAL IS WAIVED AND EARLIER DELIVERY IS IN THE INTEREST OF THE GOVERNMENT, PROVIDED THAT IN THE LATTER CASE ANY DIFFERENCE IN DELIVERY SCHEDULES RESULTING FROM A WAIVER OF FIRST ARTICLE APPROVAL SHALL NOT BE A FACTOR IN EVALUATION FOR AWARD. *** THE LEGAL ANALYSIS ACCOMPANYING THE REPORT READS AS FOLLOWS:

THE AWARDING OF CONTRACT DAAF01-70-C-0268 DID NOT IMPAIR THE INTEGRITY OF THE GOVERNMENT BIDDING SYSTEM. THE CONTRACT WAS AWARDED TO THE LOW, RESPONSIVE, RESPONSIBLE BIDDER SUBMITTING BIDS ON THE BASIS OF WITHOUT FIRST ARTICLE APPROVAL. THE PARAMOUNT CONSIDERATION IN AWARDING THE CONTRACT ON THE BASIS OF WITHOUT FIRST ARTICLE APPROVAL WAS THE DETERMINATION THAT THE BEST INTEREST OF THE GOVERNMENT WOULD BE SERVED IN OBTAINING THE STEAM CLEANERS IN AS SHORT A TIME AS POSSIBLE DUE TO SUBSEQUENTLY IMPOSED URGENT REQUIREMENTS. EQUAL CONSIDERATION WAS GIVEN TO THOSE CONTRACTORS SUBMITTING BIDS ON THE BASIS OF WITHOUT FIRST ARTICLE APPROVAL. THOSE BIDDERS, INCLUDING CHAUSSE, WHO DID NOT AND/OR COULD NOT SUBMIT BIDS ON THIS BASIS WERE NONRESPONSIVE TO THAT SPECIFIC BID ITEM. 45 COMP. GEN. 682. THE FOREGOING DISCLOSES THAT PROCUREMENT REGULATIONS WERE ADHERED TO IN AWARDING THE SUBJECT CONTRACT. ***

WE AGREE THAT CHAUSSE WAS TECHNICALLY NONRESPONSIVE TO THE ALTERNATIVE BID ITEM COVERING "FIRST ARTICLE" WAIVER. WHILE THERE IS NO REQUIREMENT THAT A BIDDER RESPOND TO ALL ALTERNATIVE ITEMS OF AN INVITATION TO RENDER HIS BID RESPONSIVE, A BIDDER BY FAILING TO RESPOND TO AN ALTERNATIVE ITEM RUNS THE RISK THAT SHOULD THE GOVERNMENT ELECT TO ACCEPT AN ALTERNATIVE NOT BID UPON, HIS BID COULD NOT BE CONSIDERED FOR THE ALTERNATIVE BID ITEM. THIS IS THE IMPORT OF 45 COMP. GEN. 682 (1966), CITED IN THE LEGAL ANALYSIS, WHERE ALTERNATE BIDS WERE REQUESTED AS TO DIFFERENT TYPES OF PIPES TO GIVE BIDDERS AN OPPORTUNITY TO BID UPON ANY TYPE OF PIPE WHICH WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT. IN THE INSTANT CASE, BIDDERS HAD NO SUCH OPPORTUNITY IF THEY WERE NOT ENTITLED TO FIRST ARTICLE WAIVER. HERE, BIDDERS WERE ADVISED TO SUBMIT BIDS ON THE BASIS OF FIRST ARTICLE APPROVAL EVEN IF THEY WERE ENTITLED TO WAIVER SO THAT BIDS ON THAT BASIS MIGHT BE CONSIDERED IN THE EVENT IT IS DETERMINED TO MAKE AWARD WITH FIRST ARTICLE APPROVAL. HENCE, ASIDE FROM THE MATTER OF "URGENCY," CHAUSSE WAS FULLY RESPONSIVE TO THE SOLICITATION AND WAS ELIGIBLE FOR AWARD WITH FIRST ARTICLE APPROVAL AS THE LOWEST BIDDER UNDER THE SOLICITATION.

THE AWARD AS ACTUALLY MADE TO HI-JENNY WAS BASED ON THE DETERMINATION THAT THAT BIDDER WAS THE LOWEST RESPONSIVE BIDDER ON THE BASIS OF FIRST ARTICLE WAIVER. IT WAS RATIONALIZED THAT BY SUCH AN AWARD DELIVERY COULD BE ACCOMPLISHED 165 DAYS EARLIER AS AGAINST THE 315 DAYS THAT WOULD BE REQUIRED IF AWARD WERE MADE TO A BIDDER NOT ENTITLED TO WAIVER. HOWEVER, IN MAKING THE AWARD, THERE WAS OVERLOOKED THE RESTRICTION IN ASPR 1- 1903(A), SUPRA, THAT ANY DIFFERENCE IN DELIVERY SCHEDULES RESULTING FROM WAIVER OF FIRST ARTICLE APPROVAL SHALL NOT BE A FACTOR IN EVALUATION FOR AWARD. CF. 47 COMP. GEN. 448 (1968).

SINCE THE DETERMINATION OF OCTOBER 10 REASONABLY SUPPORTED THE URGENCY OF THE PROCUREMENT, AND SINCE AN AWARD ON THE BASIS OF "URGENCY" SHOULD NOT HAVE BEEN ACCOMPLISHED UNDER THE SOLICITATION WE FEEL THAT THE ONLY PROPER ALTERNATIVE TO AN AWARD TO CHAUSSE WOULD HAVE BEEN A CANCELLATION OF THE SOLICITATION AND NEGOTIATION OF A CONTRACT PURSUANT TO THE PUBLIC EXIGENCY PROCEDURES OF 10 U.S.C. 2304(A)(2).

CORRECTIVE ACTION AT THIS DATE WOULD BE IMPRACTICABLE AND INCONSISTENT WITH THE GOVERNMENT'S INTERESTS. WE STRONGLY RECOMMEND THAT THE PROCUREMENT PROCEDURES AT THE BUYING ACTIVITY BE ..END :