B-168858, MAR. 23, 1970

B-168858: Mar 23, 1970

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MAXIMUM ORDER LIMITATION EXCEEDED WHEN TWO PURCHASE ORDERS WERE PLACED FOR ABSOLUTE VOLTAGE STANDARDS TO FOREIGN-OWNED COMPANY IN EXCESS OF $40. NONBIDDER'S PROTEST TO AWARD IS DENIED SINCE PROCURING AGENCY WAS MISLED INTO BELIEVING LIMITATION ON PRODUCT WAS $50. 000 WHEN ACTUALLY IT WAS ONLY $10. PAYMENT IS AUTHORIZED AND NO FURTHER ACTION IS WARRANTED BY GAO. FOREIGN OWNED COMPANIES NONBIDDER'S PROTEST TO MANDATORY FEDERAL SUPPLY SCHEDULE CONTRACT AWARDED FOREIGN-OWNED COMPANY ON BASIS OF BEING EXCLUDED FROM SCHEDULE IS DENIED SINCE PROCUREMENT WAS SYNOPSIZED IN COMMERCE BUSINESS DAILY AND ALL PROSPECTIVE SUPPLIERS WERE GIVEN EQUAL OPPORTUNITY TO BE LISTED. SINCE SCHEDULES ARE OPEN TO BOTH FOREIGN AND DOMESTIC BIDDERS.

B-168858, MAR. 23, 1970

PURCHASES--PURCHASE ORDER--MAXIMUM ORDER LIMITATION EXCEEDED WHEN TWO PURCHASE ORDERS WERE PLACED FOR ABSOLUTE VOLTAGE STANDARDS TO FOREIGN-OWNED COMPANY IN EXCESS OF $40,000 MAXIMUM ORDER LIMITATION FOR PURCHASES UNDER FEDERAL SUPPLY SCHEDULE, NONBIDDER'S PROTEST TO AWARD IS DENIED SINCE PROCURING AGENCY WAS MISLED INTO BELIEVING LIMITATION ON PRODUCT WAS $50,000 WHEN ACTUALLY IT WAS ONLY $10,000. UPON DISCOVERING ADMINISTRATIVE ERROR AS TO MAXIMUM ORDER LIMITATION, AGENCY PROPERLY CANCELED ORDERS FOR UNDELIVERED ITEMS BUT SINCE THREE ITEMS HAD BEEN DELIVERED AND GOVT. BENEFITED FROM THEIR USE, PAYMENT IS AUTHORIZED AND NO FURTHER ACTION IS WARRANTED BY GAO. SEE COMP. GEN. DECS. CITED. CONTRACTS--FEDERAL SUPPLY SCHEDULE--LISTING--FOREIGN OWNED COMPANIES NONBIDDER'S PROTEST TO MANDATORY FEDERAL SUPPLY SCHEDULE CONTRACT AWARDED FOREIGN-OWNED COMPANY ON BASIS OF BEING EXCLUDED FROM SCHEDULE IS DENIED SINCE PROCUREMENT WAS SYNOPSIZED IN COMMERCE BUSINESS DAILY AND ALL PROSPECTIVE SUPPLIERS WERE GIVEN EQUAL OPPORTUNITY TO BE LISTED. SINCE SCHEDULES ARE OPEN TO BOTH FOREIGN AND DOMESTIC BIDDERS, ORDERING AGENCY APPLIES DIFFERENTIALS REQUIRED BY E.O. 10582, IMPLEMENTING BUY AMERICAN ACT, 41 U.S.C. 10A-D, SO THAT DOMESTIC SUPPLIERS MAY BE PREFERRED AS REQUIRED BY STATUTE. IN VIEW OF AGENCY'S ACTION, NO FURTHER ACTION BY GAO IS WARRANTED. SEE COMP. GEN. DECS. CITED.

TO OPTIMATION, INC.:

THIS CONCERNS YOUR PROTEST BY LETTER DATED JANUARY 19, 1970, AGAINST THE TWO DELIVERY ORDERS ISSUED BY THE NAVAL SUPPLY CENTER, LONG BEACH, CALIFORNIA, UNDER GENERAL SERVICES ADMINISTRATION (GSA) FEDERAL SUPPLY SCHEDULE CONTRACT NO. GS-00S-82207. THE BASIS FOR YOUR PROTEST AGAINST THE TWO DELIVERY ORDERS, NOS. N00638-70-F-A575 AND -A576, WHICH WERE AWARDED WESTON LEXINGTON, WESTON INSTRUMENTS DIVISION, MONTEREY PARK, CALIFORNIA, ARE THAT THE TWO PURCHASE ORDERS EXCEEDED THE $40,000 MAXIMUM ORDER LIMITATION FOR PURCHASES UNDER THE FEDERAL SUPPLY SCHEDULE AND THAT WESTON, A FOREIGN-OWNED COMPANY, SHOULD NOT HAVE BEEN ACCORDED A MANDATORY FEDERAL SUPPLY SCHEDULE STATUS TO THE EXCLUSION OF DOMESTIC SUPPLIERS. DECEMBER 12, 1969, BY THE NAVAL SUPPLY CENTER TO FULFILL

DELIVERY ORDERS NOS. N00638-70-F-A575 AND -A576 WERE ISSUED TO WESTON REQUIREMENTS FROM THE NAVAL PLANT REPRESENTATIVE, POMONA, CALIFORNIA, FOR FOUR EACH AND SIX EACH OF ABSOLUTE VOLTAGE STANDARDS, WESTON MODEL ACS- 176, CITING GSA CONTRACT GS-00S-82207, ITEM 54-56. THE AMOUNTS OF THE DELIVERY ORDERS WERE $19,008 AND $28,512, RESPECTIVELY. TWO SEPARATE DELIVERY ORDERS WERE PLACED FOR THESE IDENTICAL ITEMS DUE TO THE COMPLEXITY OF THE ACCOUNTING INFORMATION AND THE SHIPPING INSTRUCTIONS. THE NAVAL SUPPLY CENTER DID CONSIDER THE MAXIMUM ORDER LIMITATION FOR A SINGLE ITEM TO BE APPLICABLE SINCE THE IDENTICAL ITEMS WERE BEING SUPPLIED. HOWEVER, THE NAVAL SUPPLY CENTER CONSIDERED ABSOLUTE VOLTAGE STANDARDS TO COME WITHIN THE CATEGORY OF SPECTRUM ANALYZERS, FREQUENCY COUNTERS, RESIDUAL VOLTMETERS AND ELECTRONIC VOLTMETERS FOR WHICH THE GSA FEDERAL SUPPLY SCHEDULE SPECIFIES A MAXIMUM ORDER LIMITATION OF $50,000 FOR A SINGLE ITEM. THE TOTAL OF THE TWO DELIVERY ORDERS WAS $47,520. A RESULT OF YOUR PROTEST, IT NOW HAS BEEN DETERMINED THAT AN ABSOLUTE VOLTAGE STANDARD IS IN REALITY AN ELECTRONIC GENERATOR FOR WHICH THE MAXIMUM ORDER LIMITATION IS $10,000. UPON DISCOVERING THIS ADMINISTRATIVE ERROR AS TO THE MAXIMUM ORDER LIMITATION FOR ABSOLUTE VOLTAGE STANDARDS, THE NAVAL SUPPLY CENTER SECURED AGREEMENT FROM WESTON TO CANCEL THE ORDERS FOR SEVEN ITEMS REMAINING TO BE SHIPPED. HOWEVER, TWO ABSOLUTE VOLTAGE STANDARDS UNDER DELIVERY ORDER NO. N00638-70-F-A575 AND ONE ABSOLUTE VOLTAGE STANDARD UNDER DELIVERY ORDER NO. N00638-70-F-A576 ALREADY HAD BEEN SHIPPED, RECEIVED, AND PLACED IN USE.

SINCE THE ORDERS FOR THE UNDELIVERED ITEMS HAVE BEEN CANCELED AND, IF THE NEED FOR THOSE ITEMS STILL EXISTS, NAVY HAS ADVISED THE ITEMS WILL BE PROCURED UNDER COMPETITIVE CONDITIONS, WE DO NOT BELIEVE ANY FURTHER ACTION RESPECTING THIS MATTER IS WARRANTED ON THE PART OF OUR OFFICE. INSOFAR AS THE DELIVERED ITEMS ARE CONCERNED WE BELIEVE THE NAVAL SUPPLY CENTER ACTED PROPERLY SINCE THE GOVERNMENT ALREADY HAD RECEIVED A BENEFIT FROM THOSE ITEMS FOR WHICH IT MUST REIMBURSE WESTON IN ANY EVENT. SEE 38 COMP. GEN. 368 (1958). IN ADDITION, THE GENERAL SERVICES ADMINISTRATION IS REVIEWING THE MAXIMUM ORDERING LIMITATION FOR THE PURPOSE OF CLARIFYING THE SAME.

THE SECOND BASIS FOR YOUR PROTEST IS THAT WESTON SHOULD NOT HAVE BEEN ACCORDED A MANDATORY FEDERAL SUPPLY SCHEDULE SINCE WESTON IS A FOREIGN- OWNED COMPANY AND SINCE DOMESTIC COMPANIES WERE EXCLUDED FROM THE SCHEDULE. THIS OFFICE HAS APPROVED THE USE OF MANDATORY FEDERAL SUPPLY SCHEDULES IN APPROPRIATE CIRCUMSTANCES. SEE B-156323, MAY 28, 1965. HOWEVER, THE FEDERAL SUPPLY SCHEDULE HERE INVOLVED IS NOT MANDATORY FOR USE BY THE DEPARTMENT OF DEFENSE. SEE PARAGRAPH 1 (A) (I), PAGE 2 OF THE SCHEDULE. WHILE SUCH SCHEDULES NORMALLY ARE USED BY THE DEPARTMENT OF DEFENSE, SEE ARMED SERVICES PROCUREMENT REGULATION 5-103, THIS PARTICULAR FEDERAL SUPPLY SCHEDULE ALSO WAS AN OPEN SCHEDULE TO WHICH SUPPLIERS COULD BE ADDED AT ANY TIME. AT THE TIME CONTRACT NO. GS-00S-82207 WAS BEING LET, THE GENERAL SERVICES ADMINISTRATION REQUESTED ON JULY 24, 1968, THAT IT BE SYNOPSIZED IN THE COMMERCE BUSINESS DAILY TO GIVE PROSPECTIVE SUPPLIERS AN OPPORTUNITY TO BE LISTED ON THE FEDERAL SUPPLY SCHEDULE CONTRACT. THIS CONTRACT WAS SO SYNOPSIZED AND ALL PROSPECTIVE SUPPLIERS WERE GIVEN AN EQUAL OPPORTUNITY TO BE LISTED ON THE SCHEDULES. FURTHER, GSA ADVISED THAT OPTIMATION WOULD HAVE BEEN FURNISHED THE SOLICITATION IF GSA HAD KNOWN OF THE COMPANY'S INTEREST. IN ANY EVENT, GSA HAS ADVISED THAT BY A LETTER DATED FEBRUARY 6, 1970, OPTIMATION WAS INVITED TO SUBMIT AN OFFER COVERING ELECTRONIC EQUIPMENT AND ACCESSORIES FOR INCLUSION ON THE SCHEDULE. INSOFAR AS CONCERNS YOUR OBJECTION TO THE LISTING OF FOREIGN-OWNED COMPANIES ON FEDERAL SUPPLY SCHEDULES, THE SCHEDULES ARE OPEN TO BOTH FOREIGN AND DOMESTIC BIDDERS. HOWEVER, WHERE BOTH ARE LISTED ON A SCHEDULE THE ORDERING AGENCY APPLIES THE DIFFERENTIALS REQUIRED BY EXECUTIVE ORDER NO. 10582, IMPLEMENTING THE BUY AMERICAN ACT, 41 U.S.C. 10A-D, IN ORDER THAT PREFERENCE BE GIVEN TO DOMESTIC SUPPLIERS AS REQUIRED BY THAT STATUTE.

IN VIEW OF THE ABOVE ACTIONS TAKEN BY THE AGENCIES INVOLVED, WE DO NOT BELIEVE ANY FURTHER ACTION IS WARRANTED BY THIS OFFICE. ACCORDINGLY, YOUR PROTEST IS DENIED.