B-169370, AUG. 12, 1970

B-169370: Aug 12, 1970

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

A DELIVERY SCHEDULE IN A REQUEST FOR PROPOSALS OF 150 DAYS WHICH COULD ONLY BE MET BY MANUFACTURER OF COMPONENT IS NOT RESTRICTIVE ON BASIS OF REPORT THAT SHOWS THAT REQUIREMENTS WERE CRITICAL AND BASED ON A BONA FIDE NEED. INC.: REFERENCE IS MADE TO YOUR LETTER OF MARCH 18. THE PROCUREMENT WAS NEGOTIATED PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304(A)(10) FOR 2. THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS JANUARY 13. TIME OF DELIVERY: DELIVERY IS REQUIRED BY THE GOVERNMENT IN ACCORDANCE WITH THE FOLLOWING SCHEDULE: "INCREMENT 'A' "ITEM NR 1 - DELIVER 678 EACH 150 DAYS AFTER THE DATE OF RECEIPT BY CONTRACTOR OF A WRITTEN NOTICE OF AWARD AND DELIVER 678 EACH EVERY 30 DAYS THEREAFTER UNTIL TOTAL QUANTITY OF 2.

B-169370, AUG. 12, 1970

BID PROTEST -- RESTRICTIVE DELIVERY SCHEDULE DENIAL OF PROTEST AGAINST NEGOTIATED AWARD TO GOODYEAR TIRE AND RUBBER COMPANY FOR SPARE PART BRAKE KITS FOR C-141 AIRCRAFT AT A HIGHER PRICE THAN PROTESTANT'S ON BASIS OF RESTRICTIVE DELIVERY SCHEDULE. A DELIVERY SCHEDULE IN A REQUEST FOR PROPOSALS OF 150 DAYS WHICH COULD ONLY BE MET BY MANUFACTURER OF COMPONENT IS NOT RESTRICTIVE ON BASIS OF REPORT THAT SHOWS THAT REQUIREMENTS WERE CRITICAL AND BASED ON A BONA FIDE NEED. A FIVE MONTHS DELIVERY PERIOD BY THE MANUFACTURER FOR COMPONENTS WHEN THE REQUEST FOR EQUIPMENT REQUIRE 150 DAY DELIVERY SCHEDULE RESULTS IN RESTRICTIVE COMPETITION. THEREFORE IN FUTURE PROCUREMENTS, OFFEROR SHOULD BE AFFORDED ADEQUATE TIME TO SECURE PARTICULAR PARTS AND MEET THE DELIVERY SCHEDULE.

TO FRANK AND WARREN, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 18, 1970, PROTESTING AGAINST AWARD OF A CONTRACT TO THE GOODYEAR TIRE AND RUBBER COMPANY UNDER REQUEST FOR PROPOSALS NO. F42600-70-R-1636, ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, OGDEN AIR MATERIEL AREA, HILL AIR FORCE BASE, UTAH.

THE PROCUREMENT WAS NEGOTIATED PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304(A)(10) FOR 2,034 SPARE PARTS KITS APPLICABLE TO THE BRAKES OF THE C- 141 AIRCRAFT. THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS JANUARY 13, 1970. SCHEDULE G OF THE SOLICITATION PROVIDED IN PART:

"G. TIME OF DELIVERY: DELIVERY IS REQUIRED BY THE GOVERNMENT IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:

"INCREMENT 'A'

"ITEM NR 1 - DELIVER 678 EACH 150 DAYS AFTER THE DATE OF RECEIPT BY CONTRACTOR OF A WRITTEN NOTICE OF AWARD AND DELIVER 678 EACH EVERY 30 DAYS THEREAFTER UNTIL TOTAL QUANTITY OF 2,034 EACH IS DELIVERED.

"OFFERS OFFERING DELIVERIES OF QUANTITIES WITHIN THE CORRESPONDING DELIVERY PERIOD SPECIFIED ABOVE WILL BE EVALUATED EQUALLY AS REGARDS TIME OF DELIVERY. OFFERS OFFERING DELIVERIES OF QUANTITIES UNDER SUCH TERMS OR CONDITIONS THAT EACH DELIVERY PERIOD WILL NOT CLEARLY FALL WITHIN THE CORRESPONDING DELIVERY PERIOD SPECIFIED ABOVE MAY BE CONSIDERED NONRESPONSIVE AND MAY BE REJECTED. WHERE AN OFFEROR OFFERS AN EARLIER DELIVERY SCHEDULE THAN THAT CALLED FOR ABOVE, THE GOVERNMENT RESERVES THE RIGHT TO AWARD EITHER IN ACCORDANCE WITH THE REQUIRED SCHEDULE OR IN ACCORDANCE WITH THE PROPOSED SCHEDULE OF THE OFFEROR. IF THE OFFEROR OFFERS NO OTHER DELIVERY SCHEDULE, THE GOVERNMENT'S REQUIRED DELIVERY SCHEDULE SHALL APPLY."

YOUR COMPANY ORIGINALLY SUBMITTED A PROPOSAL DATED JANUARY 12, 1970, WHICH CONTAINED NO INFORMATION UNDER THE HEADING "OFFEROR'S PROPOSED DELIVERY SCHEDULE," ON PAGE 13. UPON INQUIRY BY THE CONTRACTING OFFICER, YOUR COMPANY RESPONDED BY LETTER DATED JANUARY 23, 1970, IN WHICH YOU STATED, "GOODYEAR TIRE AND RUBBER HAS GIVEN US A DELIVERY OF 5 MONTHS. WILL NEED APPROXIMATELY 3 WEEKS TO PACK AND SHIP SO WE BELIEVE THAT DELIVERY CAN BE MADE IN SIX (6) MONTHS FROM THE DATE A CONTRACT IS AWARDED." YOUR LETTER ALSO REVISED YOUR UNIT PRICE QUOTATION FOR THE 2,034 KITS FROM $17.72 TO $22.42.

THE GOODYEAR TIRE AND RUBBER COMPANY SUBMITTED A PROPOSAL DATED JANUARY 9, 1970, WHICH CONFORMED TO THE GOVERNMENT'S REQUIRED DELIVERY SCHEDULE OF 150 DAYS AFTER RECEIPT OF AN AWARD. THE UNIT PRICE IN GOODYEAR'S PROPOSAL WAS $23.155.

YOUR LETTER OF MARCH 18, 1970, TO OUR OFFICE SETS FORTH THE BASIS FOR YOUR PROTEST AS FOLLOWS:

"WE PROTEST AN AWARD TO GOODYEAR AT A SUBSTANTIALLY HIGHER PRICE THAN TO OURSELVES TO OBTAIN A BETTER DELIVERY FROM GOODYEAR THAN WE COULD SUPPLY IS APPARENTLY IN ERROR BECAUSE WE ARE ALSO DEPENDENT ON GOODYEAR WHICH IS THE SOLE SOURCE PROCUREMENT FOR THIS ITEM IN THE KIT."

THE ADMINISTRATIVE REPORT FROM THE DEPARTMENT OF THE AIR FORCE IN THIS MATTER DISCLOSES THAT CERTAIN COMPONENTS OF THE AIRCRAFT BRAKE KITS ARE OBTAINABLE ONLY FROM GOODYEAR, WHICH OFFERS 150 DAY DELIVERY ON THOSE COMPONENTS, WHETHER THEY ARE INCLUDED IN COMPLETE KITS DELIVERED TO THE GOVERNMENT OR SOLD SEPARATELY THROUGH THEIR DISTRIBUTORS TO OTHER SUPPLIERS. THE CONTRACTING OFFICER TRIED TO OBTAIN APPROVAL OF THE REQUIRING ACTIVITY TO EXTEND THE DELIVERY SCHEDULE BY ONE MONTH. HOWEVER, THE POSITION OF THE AIR FORCE IS THAT THE DELIVERY TIME REQUIREMENT WAS CRITICAL AND COULD NOT BE EXTENDED DUE TO THE FACT THAT THE SUPPLY STOCK OF THE BRAKE KITS WAS ZERO AND THE SUPPLY OF ADDITIONAL KITS BEING FURNISHED FROM ANOTHER CONTRACT WOULD BE USED BY JUNE 15, 1970. ADHERENCE TO THE DELIVERY SCHEDULE WAS CONSIDERED ESSENTIAL TO PREVENT THE GROUNDING OF THE C-141 AIRCRAFT.

BY THE TERMS OF THE REQUEST FOR PROPOSALS, OFFERS OF DELIVERIES THAT DO NOT FALL WITHIN THE REQUIRED DELIVERY PERIOD MAY BE CONSIDERED NONRESPONSIVE AND MAY BE REJECTED. ACCORDINGLY, THE CONTRACTING OFFICER FOUND YOUR OFFER TO BE NONRESPONSIVE, AND THEN AWARDED THE CONTRACT TO GOODYEAR AS THE ONLY RESPONSIVE OFFEROR. SINCE THE ACTION WAS TAKEN IN CONFORMITY WITH THE GOVERNMENT'S ESSENTIAL NEEDS, AS WELL AS WITH THE TERMS OF THE REQUEST FOR PROPOSALS, WE FIND NO BASIS ON WHICH WE MAY PROPERLY OBJECT TO THE ACTION TAKEN BY THE CONTRACTING OFFICER.

THE ONLY ASPECT OF THIS PROCUREMENT WHICH CAUSED DIFFICULTY, INSOFAR AS YOUR COMPANY WAS CONCERNED, WAS THE REQUIREMENT OF INITIAL DELIVERY IN 150 DAYS. YOUR LETTER OF PROTEST TO THE CONTRACTING OFFICER ON MARCH 16, 1970, A COPY OF WHICH ACCOMPANIED YOUR LETTER TO OUR OFFICE, CONTENDS THAT ALL BIDDERS SHOULD HAVE THE SAME DELIVERY TIME AND THAT IT WOULD BE IMPOSSIBLE FOR GOODYEAR TO OFFER A BETTER DELIVERY TIME UNLESS THEY HAD DISCRIMINATED AGAINST YOUR COMPANY IN QUOTING THEIR BEST DELIVERY TIME TO YOU. IN THIS REGARD, THE RECORD SHOWS THAT ALL FIRMS SOLICITED WERE, IN FACT, ALLOWED THE SAME DELIVERY TIME AND THAT GOODYEAR'S DELIVERY TIME TO YOU WAS THE SAME AS THAT QUOTED TO ANY OTHER PURCHASER. THERE IS NO INDICATION THAT YOU ATTEMPTED TO SECURE AN ACCELERATED DELIVERY OF THE GOODYEAR COMPONENTS. IN ADDITION, IT IS OBVIOUS THAT GOODYEAR WAS IN A FAVORABLE POSITION TO OFFER A BETTER DELIVERY TIME INASMUCH AS THE MAIN OBSTRUCTION TO AN EARLY DELIVERY APPEARS TO HAVE BEEN THE TIME REQUIRED FOR OBTAINING THE GOODYEAR COMPONENTS, AND SUCH FIRM COULD USE TO ADVANTAGE THE TIME INVOLVED IN SHIPPING ITS COMPONENTS TO YOUR FIRM AND THE TIME NEEDED BY YOUR FIRM TO PROCESS THOSE COMPONENTS.

WHILE THE RECORD DOES NOT SUBSTANTIATE THE CONTENTIONS EXPRESSED DIRECTLY IN YOUR PROTEST, THE QUESTION ARISES AS TO WHETHER THE DELIVERY REQUIREMENT OF 150 DAYS IS UNDULY RESTRICTIVE. OUR OFFICE HAS CONSISTENTLY HELD THAT ESTABLISHMENT OF SPECIFICATIONS TO REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT IS PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE AGENCY. IN A CASE INVOLVING AN ADVERTISED PROCUREMENT, 45 COMP. GEN. 365 (1965), IT WAS STATED AS FOLLOWS: "IT IS WELL ESTABLISHED THAT THE GOVERNMENT DOES NOT VIOLATE EITHER THE LETTER OR THE SPIRIT OF THE COMPETITIVE BIDDING STATUTES MERELY BECAUSE ONLY ONE FIRM CAN SUPPLY ITS NEEDS, PROVIDED THE SPECIFICATIONS ARE REASONABLE AND NECESSARY FOR THE PURPOSE INTENDED." IN THE INSTANT CASE, THE ADMINISTRATIVE REPORT SHOWS THAT THE SUPPLY STOCK OF THE AIRCRAFT BRAKE KITS WAS AT A CRITICAL LEVEL, AND THAT THE C-141 AIRCRAFT MIGHT BE GROUNDED IF ADDITIONAL SUPPLIES OF THE KITS WERE NOT OBTAINED AS EXPEDITIOUSLY AS POSSIBLE. SINCE IT APPEARS THAT THE SHORT DELIVERY REQUIREMENTS WERE BASED ON A BONA FIDE DETERMINATION OF THE ACTUAL NEEDS OF THE AIR FORCE IN THE PRESENT CASE, WE CANNOT CONCLUDE THAT THE DELIVERY SCHEDULE WAS UNDULY RESTRICTIVE UNDER THE CIRCUMSTANCES.

ALTHOUGH, FOR THE REASONS STATED, YOUR PROTEST IS DENIED, IT IS CLEAR THAT IN VIEW OF GOODYEAR'S FIVE MONTHS REGULAR DELIVERY PERIOD FOR ITS COMPONENTS, A REQUIREMENT FOR COMMENCING DELIVERY OF THE KITS IN 150 DAYS IS NOT CONDUCIVE TO OBTAINING MAXIMUM COMPETITION. WE ARE THEREFORE CALLING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE AIR FORCE TO ASSURE THAT FUTURE PROCUREMENTS OF THE KIT ARE PROGRAMMED SO AS TO AFFORD OFFERORS ADEQUATE TIME TO SECURE THE GOODYEAR PARTS AND MEET THE DELIVERY SCHEDULE SET OUT IN THE SOLICITATION.