B-169510, JUN. 15, 1970

B-169510: Jun 15, 1970

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TESTS WAIVED REJECTION OF BID STATING ONLY ONE PRICE AND FAILING TO INDICATE WHETHER PRICE WAS BASED ON COMPLIANCE WITH FIRST ARTICLE APPROVAL REQUIREMENTS IN INVITATION OR WAIVER THEREOF IS SUSTAINED. BECAUSE BID FAILS TO INDICATE THAT PRICE GIVEN WAS BASED ON WAIVER OF TESTING REQUIREMENT. INVITATION WARNED THAT WHERE BIDDER SUBMITTED ONLY ONE PRICE WITHOUT INDICATING WHETHER IT WAS BASED ON COMPLIANCE WITH TESTING REQUIREMENTS OR ON WAIVER THEREOF. WAS PROPERLY EVALUATED BY ADDING $5. TO THE ARO CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 2. WITH THE RIGHT RESERVED TO THE GOVERNMENT TO WAIVE THE FIRST ARTICLE APPROVAL REQUIREMENT FOR BIDDERS HAVING PREVIOUSLY FURNISHED ARTICLES ACCEPTED BY THE GOVERNMENT THAT WERE IDENTICAL OR SIMILAR TO THOSE BEING PROCURED.

B-169510, JUN. 15, 1970

CONTRACTS--SPECIFICATIONS--CONFORMABILITY OF EQUIPMENT, ETC; OFFERED- TESTS--PRIOR PROCUREMENTS--TESTS WAIVED REJECTION OF BID STATING ONLY ONE PRICE AND FAILING TO INDICATE WHETHER PRICE WAS BASED ON COMPLIANCE WITH FIRST ARTICLE APPROVAL REQUIREMENTS IN INVITATION OR WAIVER THEREOF IS SUSTAINED, BECAUSE BID FAILS TO INDICATE THAT PRICE GIVEN WAS BASED ON WAIVER OF TESTING REQUIREMENT, AS BIDDER ASSERTS, AND INVITATION WARNED THAT WHERE BIDDER SUBMITTED ONLY ONE PRICE WITHOUT INDICATING WHETHER IT WAS BASED ON COMPLIANCE WITH TESTING REQUIREMENTS OR ON WAIVER THEREOF, IT WOULD BE CONSIDERED BASED ON COMPLIANCE. BID, THEREFORE, WAS PROPERLY EVALUATED BY ADDING $5,000 FOR GOVERNMENT TESTING, AS PROVIDED IN INVITATION.

TO THE ARO CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 2, 1970, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ESSEX CRYOGENICS, INCORPORATED, BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA, UNDER INVITATION FOR BIDS NO. N00383-70-B-0420.

THE SUBJECT INVITATION, ISSUED ON NOVEMBER 3, 1969, SOLICITED BIDS ON "STEPLADDER" QUANTITIES OF A LIQUID OXYGEN CONVERTER IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-C-19803D, DATED JANUARY 18, 1968, AND APPLICABLE QUALIFIED PRODUCTS LIST (QPL) THEREUNDER.

IN ADDITION, THE INVITATION INCLUDED A REQUIREMENT FOR FIRST ARTICLE APPROVAL TESTS, WITH THE RIGHT RESERVED TO THE GOVERNMENT TO WAIVE THE FIRST ARTICLE APPROVAL REQUIREMENT FOR BIDDERS HAVING PREVIOUSLY FURNISHED ARTICLES ACCEPTED BY THE GOVERNMENT THAT WERE IDENTICAL OR SIMILAR TO THOSE BEING PROCURED. THE INVITATION CAUTIONED BIDDERS FOR WHOM WAIVER MIGHT BE GRANTED TO SUBMIT EVIDENCE WITH THEIR BIDS TO ESTABLISH THEIR ELIGIBILITY, AND FURTHER CAUTIONED SUCH BIDDERS TO SUBMIT TWO BID PRICES, ONE BASED ON COMPLIANCE WITH THE FIRST ARTICLE APPROVAL REQUIREMENTS AND ONE BASED ON A WAIVER OF SUCH REQUIREMENTS. THE LATTER CLAUSE ALSO PROVIDED THAT WHERE A BIDDER SUBMITTED ONLY ONE PRICE AND FAILED TO INDICATE IT WAS BASED ON COMPLIANCE WITH THE FIRST ARTICLE APPROVAL REQUIREMENTS OR ON THE WAIVER THEREOF, IT WOULD BE DEEMED TO BE BASED ON COMPLIANCE WITH THE FIRST ARTICLE APPROVAL REQUIREMENTS. FURTHER, THE INVITATION PROVIDED THAT THE GOVERNMENT ESTIMATED TESTING COSTS AT $5,000 AND, FOR BID EVALUATION PURPOSES, THIS FIGURE WOULD BE ADDED TO THE BID PRICE WHERE FIRST ARTICLE TESTING WOULD BE REQUIRED.

BIDS FROM THE ONLY THREE FIRMS ON THE APPLICABLE QPL WERE RECEIVED ON DECEMBER 3, 1969. IT HAD BEEN DETERMINED PRIOR THERETO THAT AWARD WOULD BE FOR A QUANTITY OF 690 UNITS. YOU SUBMITTED ONLY ONE BID PRICE AND FAILED TO INDICATE WHETHER IT WAS BASED ON COMPLIANCE WITH THE FIRST ARTICLE APPROVAL REQUIREMENTS OR WAIVER THEREOF. THEREFORE, YOUR BID PRICE WAS EVALUATED BY ADDING $5,000 FOR FIRST ARTICLE TESTING, PLUS SHIPPING COSTS, FOR A TOTAL OF $376,370.59. ESSEX SUBMITTED TWO BID PRICES AND, AFTER IT WAS DETERMINED THAT ESSEX WAS ELIGIBLE FOR WAIVER OF THE FIRST ARTICLE APPROVAL REQUIREMENTS, ITS BID WAS EVALUATED AT A TOTAL OF $376,049.07. AFTER RECEIVING A FAVORABLE PREAWARD SURVEY, AWARD WAS MADE TO ESSEX ON MARCH 31, 1970.

YOU CONTEND THAT YOU WERE THE LOW BIDDER WITH OR WITHOUT FIRST ARTICLE TESTING BASED UPON THE FOLLOWING ANALYSES:

ARO ESSEX

FIRST ARTICLE TESTING $375,047 $380,912

WAIVER OF FIRST ARTICLE

TESTING $370,047 $374,752 FURTHER, YOU CONTEND THAT FIRST ARTICLE WAIVER SHOULD NOT HAVE BEEN CONSIDERED A FACTOR AS A WAIVER WOULD BE GRANTED ONLY TO EXPEDITE DELIVERY AND IT TOOK FOUR MONTHS TO MAKE THE AWARD.

WITH REGARD TO THE LATTER CONTENTION, THE NAVY CONCEDES THAT WAIVER OF THE FIRST ARTICLE TESTING DOES EXPEDITE DELIVERY AS YOU CONTEND. HOWEVER, THE NAVY POINTS OUT THAT THE PRIME CONSIDERATION FOR INCLUDING THE REQUIREMENT FOR TESTING IN THE INVITATION WAS TO ASSURE A QUALITY PRODUCT. IN THIS CONNECTION, THE DETERMINATION TO WAIVE THE REQUIREMENT FOR ESSEX WAS BASED ON THE FOLLOWING:

1. ESSEX HAD PREVIOUSLY FURNISHED IDENTICAL ACCEPTABLE ITEMS.

2. ESSEX HAD BEEN IN CONTINUOUS PRODUCTION OF THE ITEM FOR MORE THAN ONE YEAR.

3. NO UNSATISFACTORY REPORTS ON THE ESSEX CONVERTER HAD BEEN RECEIVED DURING THIS TIME. IN THESE CIRCUMSTANCES, WE SEE NO BASIS FOR YOUR CONTENTION THAT WAIVER OF FIRST ARTICLE TESTING SHOULD NOT HAVE BEEN CONSIDERED A FACTOR.

THE VALIDITY OF YOUR FIRST ARGUMENT DEPENDS ON THE ASSUMPTION THAT YOUR BID WAS BASED ON WAIVER OF THE FIRST ARTICLE TESTING REQUIREMENT. EXAMINATION OF YOUR BID FAILS TO INDICATE ANY SUCH INTENT. THE INVITATION CLEARLY WARNED THAT WHERE A "BIDDER SUBMITS ONLY ONE BID PRICE AND FAILS TO INDICATE WHETHER IT IS BASED ON COMPLIANCE WITH THE FIRST ARTICLE APPROVAL REQUIREMENTS OR ON THE WAIVER THEREOF, IT WILL BE DEEMED TO BE BASED ON COMPLIANCE WITH THE FIRST ARTICLE APPROVAL REQUIREMENTS." THEREFORE, YOUR BID WAS PROPERLY EVALUATED BY ADDING $5,000 FOR GOVERNMENT TESTING AS PROVIDED IN THE INVITATION.

ACCORDINGLY, THERE IS NO BASIS FOR OUR OFFICE TO DISTURB THE CONTRACT AS AWARDED.