B-169330, MAY 14, 1970

B-169330: May 14, 1970

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LOW OFFEROR WHOSE PREAWARD SAMPLES FAILED TO MEET DPSC REQUIREMENTS WAS PROPERLY FOUND NONRESPONSIBLE SINCE WHERE PREAWARD TESTS ARE REQUIRED SOLELY FOR DETERMINING OFFEROR'S CAPACITY TO MEET SPECIFICATIONS. MATTER IS ONE OF RESPONSIBILITY. OFFEROR'S ABILITY TO PERFORM IS NECESSARILY FACTUAL MATTER PROPERLY LEFT TO SOUND ADMINISTRATIVE DISCRETION. SINCE PROCURING AGENCY IS IN BEST POSITION TO ASSESS RESPONSIBILITY AND MUST BEAR BRUNT OF ITS ABSENCE. GOVERNMENT IS NOT REQUIRED TO PURCHASE AT LOWER PRICE WITHOUT INTELLIGENT REFERENCE TO ITS NEEDS. INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 16. THE SOLICITATION WAS NEGOTIATED PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304 (A) (7) (MEDICINE OR MEDICAL SUPPLIES) AND CALLED FOR THE FURNISHING OF 5400 PACKAGES OF BLOOD GROUPING SERUM ANTI-B.

B-169330, MAY 14, 1970

CONTRACTS--SPECIFICATIONS--SAMPLES TO QUALIFY PRODUCT UNDER REQUEST FOR PROPOSALS FOR BLOOD GROUPING SERUM, LOW OFFEROR WHOSE PREAWARD SAMPLES FAILED TO MEET DPSC REQUIREMENTS WAS PROPERLY FOUND NONRESPONSIBLE SINCE WHERE PREAWARD TESTS ARE REQUIRED SOLELY FOR DETERMINING OFFEROR'S CAPACITY TO MEET SPECIFICATIONS, AS OPPOSED TO DETERMINING PRODUCT'S CHARACTERISTICS, MATTER IS ONE OF RESPONSIBILITY, AND OFFEROR'S ABILITY TO PERFORM IS NECESSARILY FACTUAL MATTER PROPERLY LEFT TO SOUND ADMINISTRATIVE DISCRETION, SINCE PROCURING AGENCY IS IN BEST POSITION TO ASSESS RESPONSIBILITY AND MUST BEAR BRUNT OF ITS ABSENCE. MOREOVER, GOVERNMENT IS NOT REQUIRED TO PURCHASE AT LOWER PRICE WITHOUT INTELLIGENT REFERENCE TO ITS NEEDS. SEE COMP. GEN. DECS. CITED.

TO METABOLIC RESEARCH FOUNDATION, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 16, 1970, PROTESTING AGAINST THE AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) DSA 120-70-R- 0762, ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC), ON OCTOBER 9, 1969.

THE SOLICITATION WAS NEGOTIATED PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304 (A) (7) (MEDICINE OR MEDICAL SUPPLIES) AND CALLED FOR THE FURNISHING OF 5400 PACKAGES OF BLOOD GROUPING SERUM ANTI-B, FSN 6505 159-8400. OPENING DATE WAS OCTOBER 28, 1969. ELEVEN FIRMS ON THE BIDDERS' LIST, INCLUDING YOUR FIRM, WERE DIRECTLY SOLICITED AND FIVE PROPOSALS WERE RECEIVED IN RESPONSE TO THE SOLICITATION. YOUR FIRM SUBMITTED THE LOW PROPOSAL OF ?97 PER UNIT, THE PROPOSAL OF SCHERING DIAGNOSTICS (SCHERING) WAS SECOND LOW AT $1.10 PER UNIT, AND DADE DIVISION OF AMERICAN HOSPITAL SUPPLY CORPORATION (DADE), WHICH EVENTUALLY RECEIVED THE AWARD, SUBMITTED THE THIRD LOW PROPOSAL OF $1.275 PER UNIT.

ON OCTOBER 29, 1969, THE QUALITY ASSURANCE BRANCH (QAB), DIVISION OF TECHNICAL OPERATIONS, DPSC, WAS ADVISED THAT YOUR FIRM, SCHERING AND DADE WERE THE THREE LOWEST BIDDERS. QAB RECOMMENDED THAT YOUR FIRM AND SCHERING BE REQUESTED TO FURNISH PREAWARD SAMPLES AND THAT A PREAWARD FACILITIES SURVEY OF YOUR FIRM BE CONDUCTED IN VIEW OF THE NEGATIVE FINDINGS RESULTING FROM A SURVEY OF YOUR FIRM CONDUCTED IN CONNECTION WITH A PREVIOUS PROCUREMENT. DADE, DUE TO ITS SATISFACTORY QUALITY HISTORY, WAS NEITHER REQUIRED TO SUBMIT PREAWARD SAMPLES NOR SUBMIT TO A PREAWARD SURVEY. A REQUEST FOR A PREAWARD SURVEY OF YOUR FIRM WAS INITIATED ON NOVEMBER 3. ON THE FOLLOWING DAY, BOTH YOUR FIRM AND SCHERING WERE REQUESTED IN WRITING TO SUBMIT SAMPLES FOR EVALUATION, WHICH WERE FURNISHED WITHIN TEN DAYS THEREAFTER.

ON DECEMBER 30, QAB ADVISED THE PURCHASING OFFICE THAT YOUR SAMPLES FAILED TO COMPLY WITH THE REQUIREMENTS OF THE PURCHASE DESCRIPTION, RELATING TO SPECIFIC AGGLUTININ TITER, RENDERING THE SAMPLE PRODUCT UNSATISFACTORY AND UNACCEPTABLE. IN VIEW OF THIS DEVELOPMENT, IT WAS RECOMMENDED THAT THE REQUESTED PREAWARD SURVEY OF YOUR FACILITIES NOT BE CONDUCTED. SCHERING'S SAMPLES ALSO FAILED TO MEET THE SPECIFIC AGGLUTININ TITER REQUIREMENTS.

WE ARE ADVISED THAT THE ITEM BEING PROCURED IS A SERUM WHICH WILL AGGLUTINATE HUMAN RED BLOOD CELLS CONTAINING B AGGLUTINOGEN, I.E; BLOOD GROUPS B AND AB (SUBGROUP A1B AND A2B). IT IS USED IN MILITARY BLOOD BANKS AND HEMATOLOGY LABORATORIES TO DETERMINE THE GROUP OF BLOOD BEING ANALYZED. THIS ITEM MUST BE SPECIFIC FOR B GROUPS, AND THE FINISHED PRODUCT MUST MEET CERTAIN TITER REQUIREMENTS WHICH DETERMINE THE STRENGTH OF THE PRODUCT.

BLOOD GROUPING SERUM IS USUALLY DERIVED FROM HIGH TITERED SERUMS OF NORMAL INDIVIDUALS, WITH OR WITHOUT STIMULATION BY THE INJECTION OF GROUP SPECIFIC RED CELLS OR SUBSTANCES. THE BLOOD IS DRAWN FROM THE DONOR UNDER ASEPTIC SURGICAL PROCEDURES TO AVOID UNNECESSARY CONTAMINATION OF THE SERUM. FRESHLY DRAWN SERUMS ARE TREATED IN A WATER BATH, AND DYES AND PRESERVATIVES ARE USUALLY ADDED. THE FINISHED BATCH IS STERILIZED BY FILTRATION. THE FINAL PRODUCT MUST BE SPECIFIC FOR THE LABELED GROUP AND MUST MEET THE MINIMUM REQUIREMENTS FOR AVIDITY, TITER, CLARITY AND STERILITY. IT MUST ALSO BE FREE OF FALSE AGGLUTININS AND NOT CAUSE OTHER FALSE REACTIONS. THE ITEM IS CRITICAL IN NATURE SINCE AN UNSATISFACTORY SERUM CAN PRODUCE FALSE RESULTS WHICH COULD PERMIT THE TRANSFUSION OF BLOOD INCOMPATIBLE WITH THAT OF THE RECIPIENT AND COULD CAUSE THE RECIPIENT'S DEATH. BLOOD GROUPING SERUM MUST NOT ONLY BE SPECIFIC TO CLASSIFY BLOOD; IT MUST ALSO BE OF SUFFICIENT STRENGTH AND AVIDITY TO CLASSIFY WEAK SUBGROUPS.

IT WAS FURTHER EXPLAINED TO US THAT THE ITEM BEING PROCURED IS CONTROLLED BY THE NATIONAL INSTITUTES OF HEALTH (NIH) THROUGH LICENSING AND BATCH RELEASE PROCEDURES. HOWEVER, THE NIH REQUIREMENTS FOR THE ITEM ARE RATHER GENERAL FROM A QUALITATIVE STANDPOINT. APPLICABLE DPSC SPECIFICATIONS REQUIRE NOT ONLY COMPLIANCE WITH THE MINIMUM NIH REQUIREMENTS, BUT, IN ADDITION, IMPOSE A STRICTER TITER REQUIREMENT DEEMED MANDATORY BY THE MILITARY MEDICAL SERVICES TO ASSURE THE REQUIRED SENSITIVITY FOR WEAK SUBGROUPS.

EXAMINATION OF YOUR PREAWARD SAMPLES BY THE U. S. ARMY MEDICAL RESEARCH LABORATORY, FORT KNOX, KENTUCKY, DISCLOSED THAT YOUR SAMPLES FAILED TO COMPLY WITH THE REQUIREMENTS OF THE APPLICABLE PURCHASE DESCRIPTION AS TO TITER AND CLARITY IN THE FOLLOWING RESPECT:

"(1) EXAMINED SERUM WAS SLIGHTLY CLOUDY AND WHITE PARTICLES COULD BE SEEN IN THE BOTTLE AND DROPPER. THE SERUM ALSO EXHIBITED A SLIGHT PRECIPITATE FORMATION ON STANDING. PURCHASE DESCRIPTION PARAGRAPH 3.1.1.5 CLARITY, REQUIRES THAT THE LIQUID BLOOD SERUM SHALL BE CLEAR, FREE FROM PARTICULATE MATTER AND SEDIMENT.

"(2) TESTED SERUM FAILED TITER BECAUSE A ONE PLUS AGGLUTINATION REACTION WAS NOT OBTAINED WITH B CELLS AT 1:512; NOR WITH A1B CELLS 1:256; NOR WITH A2B CELLS AT 1:256. PURCHASE DESCRIPTION PARAGRAPH 3.1.2.1.3 SPECIFIC AGGLUTININ TITER REQUIRES THAT THE SERUM SHALL HAVE A MINIMUM ONE PLUS AGGLUTINATION REACTION WITH B CELLS AT 1:512; A1B CELLS AT 1:256; AND A2B CELLS AT 1:256."

IT WAS ALSO POINTED OUT THAT YOUR FIRM HAD, FOR THE MOST PART, BEEN UNSUCCESSFUL IN QUALIFYING AS AN ACCEPTABLE SUPPLIER OF SERUMS TO DPSC. PREAWARD SAMPLES SUBMITTED FOR EVALUATION BY YOUR FIRM IN CONNECTION WITH AT LEAST FOUR RECENT SOLICITATIONS OF ITEMS CLOSELY RELATED TO THE PRESENT ITEM HAVE PRODUCED UNSATISFACTORY FINDINGS, RESULTING IN THE REJECTION OF YOUR FIRM AS A NONRESPONSIBLE SUPPLIER (DSA 120-69-R-1898; DSA 120-70-B- 3851; DSA 120-70-R-0313; DSA 120-70-R 0810).

BY CONTRACTING OFFICER'S DETERMINATION DATED JANUARY 14, 1970, BOTH YOUR FIRM AND SCHERING WERE DETERMINED TO BE NONRESPONSIBLE. (IN THIS CONNECTION SEE OUR DECISION TO YOU CONCERNING DSA 120-70-R-0313, B 168610, APRIL 7, 1970, WHEREIN WE STATED THAT WHERE PREAWARD TESTS ARE FOR THE BENEFIT OF THE GOVERNMENT AND ARE REQUIRED SOLELY FOR THE PURPOSE OF DETERMINING, PRIOR TO AWARD, THAT THE OFFEROR IS CAPABLE OF PRODUCING ARTICLES MEETING SPECIFICATIONS, AS OPPOSED TO SHOWING THE CHARACTERISTICS OF AN OFFEROR'S PRODUCT, IT IS A MATTER OF RESPONSIBILITY). AWARD WAS MADE TO DADE ON JANUARY 29, 1970. SINCE YOUR FIRM WAS A SMALL BUSINESS CONCERN A DETERMINATION WAS MADE, CONSISTENT WITH ASPR 1-705.4 (C), NOT TO REFER YOUR REJECTION FOR LACK OF CAPACITY TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR A CERTIFICATE OF COMPETENCY BECAUSE THE PROPOSED AWARD DID NOT EXCEED $10,000.

IN YOUR TELEGRAM OF MARCH 16, 1970, PROTESTING AWARD TO DADE, YOU ALLEGE (I) THAT YOUR PRICE FOR THE ITEMS BEING PROCURED REPRESENTED A 22 1/2 PERCENT SAVINGS OVER DADE'S PRICE; (II) THAT ITEMS OFFERED BY DSA IN AREAS WHICH YOUR FIRM COULD SERVICE WERE SOLICITED BY RFP INSTEAD OF IFB TO PREVENT AWARD TO THE LOWEST BIDDER; (III) THAT YOU WERE NOT NOTIFIED OF THE AWARD UNTIL YOU APPLIED FOR INFORMATION THROUGH THE SBA; AND (IV) THAT, AS OF THE PROTEST DATE, YOU HAD NOT BEEN FURNISHED REPORT OF SAMPLE EVALUATION, THUS YOU CONCLUDED THAT THE AWARD HAD BEEN MADE IN AN ARBITRARY MANNER.

CONCERNING YOUR ALLEGATION THAT YOUR PRICE FOR THE ITEMS BEING PROCURED REPRESENTED A 22 1/2 PERCENT SAVINGS OVER DADE'S PRICE, ASPR 1 902 STATES, IN PERTINENT PART, THAT:

"PURCHASES SHALL BE MADE FROM, AND CONTRACTS SHALL BE AWARDED TO, RESPONSIBLE PROSPECTIVE CONTRACTORS ONLY. * * * THE AWARD OF A CONTRACT TO A SUPPLIER BASED ON LOWEST EVALUATED PRICE ALONE CAN BE FALSE ECONOMY IF THERE IS SUBSEQUENT DEFAULT, LATE DELIVERIES, OR OTHER UNSATISFACTORY PERFORMANCE RESULTING IN ADDITIONAL PROCUREMENT OR ADMINISTRATIVE COSTS. WHILE IT IS IMPORTANT THAT GOVERNMENT PURCHASES BE MADE AT THE LOWEST PRICE, THIS DOES NOT REQUIRE AN AWARD TO A SUPPLIER SOLELY BECAUSE HE SUBMITS THE LOWEST BID OR OFFER. A PROSPECTIVE CONTRACTOR MUST DEMONSTRATE AFFIRMATIVELY HIS RESPONSIBILITY, INCLUDING, WHEN NECESSARY, THAT OF HIS PROPOSED SUBCONTRACTORS. * * *" ALSO, WE HAVE HELD THAT THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE MATERIALS MERELY BECAUSE THEY ARE OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED. 36 COMP. GEN. 251, 252 (1956).

ASPR 1-902 ALSO PROVIDES THAT THE CONTRACTING OFFICER SHALL MAKE A DETERMINATION OF NONRESPONSIBILITY IF INFORMATION AVAILABLE TO HIM DOES NOT CLEARLY INDICATE THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE. VIEW OF THE FACT THAT YOUR PREAWARD SAMPLES FAILED TO COMPLY WITH REQUIREMENTS OF THE APPLICABLE PURCHASE DESCRIPTION AS TO TITER AND CLARITY (AND SINCE YOUR FIRM HAD FAILED TO SUBMIT SATISFACTORY PRODUCTS ON FOUR PREVIOUS PROCUREMENTS FOR SIMILAR ITEMS) IT WOULD APPEAR THAT YOU DID NOT DEMONSTRATE AFFIRMATIVELY YOUR RESPONSIBILITY NOR DID THE RECORD INDICATE THAT YOU WERE A RESPONSIBLE BIDDER. IT WAS IN OBSERVANCE OF THESE REQUIREMENTS OF ASPR 1-902 THAT THE CONTRACTING OFFICER REJECTED YOUR LOW OFFER.

OUR OFFICE HAS CONSISTENTLY HELD THAT THE DETERMINATION OF A BIDDER'S OVERALL RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE CONTRACTING AGENCY AND NOT OF THE GENERAL ACCOUNTING OFFICE, 38 COMP. GEN. 131 (1958); 33 ID. 549 (1954). WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT, AND ABSENT EVIDENCE THAT THE DETERMINATION OF A BIDDER'S CAPABILITIES WAS BASED ON ERROR, FRAUD, OR FAVORITISM, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY, 46 COMP. GEN. 371, 372 (1966); 46 ID. 124, 126 (1966); 40 ID. 294 (1960). WE HAVE ALSO STATED THAT THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT WHICH, WHILE IT SHOULD BE BASED ON FACT AND ARRIVED AT IN GOOD FAITH, MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED, SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY. THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY, AND THEY MUST MAINTAIN THE DAY TO DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, WE HAVE HELD THAT IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE ON THAT OF THE CONTRACTING OFFICIALS. 39 COMP. GEN. 705, 711 (1960).

IN REGARD TO YOUR SECOND OBJECTION TO THE AWARD YOU DO NOT SPECIFY THE MANNER IN WHICH DPSC IS ALLEGEDLY UTILIZING THE NEGOTIATED PROCUREMENT PROCEDURE TO PREVENT AWARD TO THE LOWEST BIDDER, AND WITHOUT SUCH SPECIFIC INFORMATION WE CAN ONLY SPECULATE AS TO THE BASIS OF YOUR CONTENTION. ACCORDINGLY, OUR FURTHER CONSIDERATION OF THAT OBJECTION IS NOT BELIEVED TO BE WARRANTED. HOWEVER, INSOFAR AS YOUR OBJECTION MIGHT BE DIRECTED TOWARD THE DENIAL OF AWARDS TO THE TWO LOWEST BIDDERS IN THE SUBJECT PROCUREMENT, IT SHOULD BE NOTED THAT THE REQUIREMENT IN ASPR 1-902 FOR AN AFFIRMATIVE DEMONSTRATION OF THE PROSPECTIVE CONTRACTOR'S RESPONSIBILITY, ON WHICH THE DENIALS WERE BASED, HAS EQUAL APPLICATION TO FORMALLY ADVERTISED PROCUREMENTS.

CONCERNING THE REMAINING GROUNDS OF YOUR PROTEST, WE HAVE BEEN ADVISED BY DPSC THAT THE GOVERNMENT'S FAILURE TO PROMPTLY NOTIFY YOU OF ITS UNFAVORABLE EVALUATION OF YOUR PREAWARD SAMPLES AND OF THE AWARD TO DADE ON JANUARY 29, 1970, WAS OCCASIONED BY THE PRESS OF OTHER PROCUREMENT MATTERS AND THE BACKLOG OF WORK WHICH HAD ACCUMULATED OVER THE HOLIDAY SEASON, BUT YOU AND THE OTHER UNSUCCESSFUL OFFERORS WERE IMMEDIATELY NOTIFIED OF THE BASIS FOR THE AWARD TO DADE WHEN THE OVERSIGHT WAS CALLED TO THE ATTENTION OF DPSC BY YOUR PROTEST. WHILE YOU SHOULD HAVE BEEN NOTIFIED OF THESE MATTERS EARLIER, SUCH FACTOR CAN HAVE NO BEARING ON THE VALIDITY OF THE AWARD.