B-170812, FEB 5, 1971

B-170812: Feb 5, 1971

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SINCE THE CONTRACT DID NOT CONTAIN A GUARANTEED MINIMUM CLAUSE AND ALL QUANTITIES LISTED WERE ESTIMATES NOT TO BE CONSTRUED TO REPRESENT ANY AMOUNT THE GOVERNMENT WOULD BE OBLIGATED TO PURCHASE. THE FAILURE OF ACTUAL REQUIREMENTS TO CORRESPOND TO ESTIMATED NEEDS PROVIDES NO BASIS FOR RECOVERY ABSENT A SHOWING THAT THE ESTIMATES WERE NOT BASED ON THE BEST AVAILABLE INFORMATION OR MADE IN BAD FAITH. TO FRANKEL MANUFACTURING COMPANY: REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 11 AND DECEMBER 7. INVITATION FOR BIDS (IFB) FPNSO-E7-0623-A WAS ISSUED NOVEMBER 17. THE ESTIMATED QUANTITIES SPECIFIED IN THE IFB WERE AS FOLLOWS: ESTIMATED PEAK ESTIMATED QUANTITY DESTINATION MONTHLY REQUIREMENTS CONTRACT PERIOD ZONE 1 700 5.

B-170812, FEB 5, 1971

CONTRACTS - REQUIREMENTS CONTRACTS - ESTIMATED NEEDS DENIAL OF CLAIM FOR ADDITIONAL ORDERS SUFFICIENT TO FULFILL ITS ESTIMATED QUANTITIES UNDER A REQUIREMENTS CONTRACT FOR PROTECTOR, DUPLICATING STENCIL FILM, ISSUED BY THE GENERAL SERVICES ADMINISTRATION TO FRANKEL MANUFACTURING COMPANY. SINCE THE CONTRACT DID NOT CONTAIN A GUARANTEED MINIMUM CLAUSE AND ALL QUANTITIES LISTED WERE ESTIMATES NOT TO BE CONSTRUED TO REPRESENT ANY AMOUNT THE GOVERNMENT WOULD BE OBLIGATED TO PURCHASE, THE FAILURE OF ACTUAL REQUIREMENTS TO CORRESPOND TO ESTIMATED NEEDS PROVIDES NO BASIS FOR RECOVERY ABSENT A SHOWING THAT THE ESTIMATES WERE NOT BASED ON THE BEST AVAILABLE INFORMATION OR MADE IN BAD FAITH.

TO FRANKEL MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 11 AND DECEMBER 7, 1970, PROTESTING THE GOVERNMENT'S FAILURE TO ISSUE ORDERS SUFFICIENT TO FULFILL ITS ESTIMATED QUANTITIES UNDER CONTRACT GS-00S-90679 AWARDED TO YOU BY THE GENERAL SERVICES ADMINISTRATION (GSA), NEW YORK, NEW YORK.

INVITATION FOR BIDS (IFB) FPNSO-E7-0623-A WAS ISSUED NOVEMBER 17, 1969, BY THE FEDERAL SUPPLY SERVICE, GSA, NEW YORK, NEW YORK, FOR PROTECTOR, DUPLICATING STENCIL FILM, ON A REQUIREMENTS BASIS FOR GSA ZONES (SUPPLY DEPOTS) 1, 2, 3, AND 4. THE ESTIMATED QUANTITIES SPECIFIED IN THE IFB WERE AS FOLLOWS:

ESTIMATED PEAK ESTIMATED QUANTITY

DESTINATION MONTHLY REQUIREMENTS CONTRACT PERIOD

ZONE 1 700 5,000

ZONE 2 300 2,200

ZONE 3 500 3,900

ZONE 4 200 1,600

"SCOPE OF CONTRACT," ARTICLE 1, PAGE 6 OF THE CONTRACT, PROVIDES AS FOLLOWS:

" *** THE GENERAL SERVICES ADMINISTRATION IS OBLIGATED, EXCEPT IN EXIGENCIES OR AS MAY BE OTHERWISE PROVIDED HEREIN, TO PURCHASE HEREUNDER SUCH QUANTITIES AS MAY BE NEEDED FROM TIME TO TIME TO FILL ANY SUCH SUPPLY DEPOT REQUIREMENT DETERMINED IN ACCORDANCE WITH THE CURRENTLY APPLICABLE PROCUREMENT AND SUPPLY PROCEDURES. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE CONTRACTOR IS OBLIGATED TO DELIVER HEREUNDER ALL SUCH QUANTITIES AS MAY BE SO ORDERED FROM TIME TO TIME. THE QUANTITIES SHOWN REPRESENT THE ESTIMATED REQUIREMENTS FOR EACH ITEM DURING THE CONTRACT PERIOD, ARE FURNISHED ONLY FOR THE INFORMATION OF OFFERORS, BUT SHALL NOT BE CONSTRUED TO REPRESENT ANY AMOUNT WHICH THE GOVERNMENT SHALL BE OBLIGATED TO PURCHASE UNDER THE CONTRACT NOR RELIEVE THE CONTRACTOR OF HIS OBLIGATION TO FILL ALL ORDERS WHICH MAY BE PLACED WITHIN CONTRACT TERMS."

ALSO, "MONTHLY SUPPLY POTENTIAL," ARTICLE 4, PAGE 7, PARAGRAPH 3, FURTHER STATES:

"THE GOVERNMENT'S ESTIMATED PEAK MONTHLY AND ESTIMATED REQUIREMENTS FOR THE PERIOD OF THIS CONTRACT ARE FURNISHED FOR THE INFORMATION OF OFFERORS, BUT SHALL NOT BE CONSTRUED TO REPRESENT ANY AMOUNT WHICH THE GOVERNMENT SHALL BE OBLIGATED TO PURCHASE UNDER THE CONTRACT (EXCEPT AS MAY BE PROVIDED IN A GUARANTEED MINIMUM CLAUSE)."

YOUR FIRM WAS AWARDED THE CITED CONTRACT ON FEBRUARY 10, 1970, FOR ZONES 2, 3, AND 4 AT A UNIT PRICE OF $1.60 PER BOX FOR THE PERIOD APRIL 1, 1970, THROUGH MARCH 31, 1971. THE CONTRACT DID NOT CONTAIN A GUARANTEED MINIMUM CLAUSE.

YOU CONTEND THAT SINCE THE SPECIFICATIONS CALLED FOR PLIOFILM, WHICH IS MANUFACTURED BY GOODYEAR TIRE AND RUBBER COMPANY, AND SINCE DELIVERY WAS REQUIRED TO BE MADE WITHIN 30 (45) DAYS AFTER RECEIPT OF ORDER, THESE CIRCUMSTANCES DICTATED ORDERING SUBSTANTIAL QUANTITIES OF PLIOFILM BEFORE- HAND. YOU POINT OUT THAT IT TAKES GOODYEAR ABOUT 60 DAYS TO PROCESS ANY ORDER FOR PLIOFILM. BUT DUE TO A SUBSTANTIAL DECLINE IN DEMAND FOR THE PRODUCT, ORDERS FOR THE FIRST 5 MONTHS OF THE CONTRACT WERE WELL BELOW ESTIMATED OR EXPECTED QUANTITIES, AND HAVE NOT RISEN SIGNIFICANTLY SINCE. THEREFORE, BY LETTER OF AUGUST 25, 1970, TO THE CONTRACTING OFFICER, YOU REQUESTED THE GOVERNMENT TO GUARANTEE PURCHASE OF THE REMAINDER OF YOUR STOCK OF 5,840 BOXES. THIS REQUEST WAS DENIED BY THE CONTRACTING OFFICER BY LETTER DATED SEPTEMBER 8, 1970.

YOU ALLEGE THAT THE INFORMATION RELATIVE TO THE ESTIMATED QUANTITIES IN THE IFB WAS NOT ONLY CARELESS, BUT FALSE; THAT IN SPITE OF THE IFB WARNINGS THAT THE QUANTITIES LISTED WERE MERELY ESTIMATES, "THE CONTRACT COULD NOT BE ACCEPTED UNDER ANY BASIS OTHER THAN THE FACT THAT THE GOVERNMENT WOULD USE A CERTAIN QUANTITY OF THIS (PLIOFILM) OR ELSE THE CONTRACT WOULD NOT BE LET." YOU, THEREFORE, REQUEST THAT THE CONTRACT BE EXTENDED UNTIL THE 5,840 BOXES ARE ORDERED.

WITH REGARD TO YOUR ALLEGATION THAT THE INFORMATION SUPPLIED BY GSA, UPON WHICH YOU PREDICATED YOUR PURCHASE OF PLIOFILM, WAS NOT ONLY CARELESS BUT FALSE, GSA ASSERTS THAT THE ESTIMATES WERE PREPARED IN AS CAREFUL A MANNER AS POSSIBLE AND UPON THE BEST AVAILABLE INFORMATION. BY LETTER DATED DECEMBER 14, 1970, FROM GSA TO YOU, COMPLETE ADVICE AS TO METHOD USED IN PREPARING THE IFB ESTIMATE WAS FURNISHED, AND WE CANNOT SAY THAT THE ESTIMATE, IN VIEW OF GSA'S EXPLANATION, IS SUBJECT TO OBJECTION BY OUR OFFICE.

OUR OFFICE HAS HELD THERE IS NO BASIS FOR RELIEF WHEN, DURING THE TERM OF A REQUIREMENTS CONTRACT, THE BUYER'S ACTUAL REQUIREMENT DOES NOT CORRESPOND WITH THE ESTIMATED NEEDS, UNLESS IT CAN BE SHOWN THAT THE ESTIMATES WERE NOT BASED ON THE BEST INFORMATION AVAILABLE, OR BAD FAITH, FRAUD, OR MISREPRESENTATION WAS EXERCISED IN ESTIMATING THE REQUIREMENTS. B-168766, AUGUST 5, 1970; B-169037, MAY 4, 1970. NO SUCH SHOWING OF BAD FAITH, ETC., MAY BE INFERRED FROM THE RECORD BEFORE US.IN THE CASE OF TRAVIS T. WOMACK, JR. V UNITED STATES, 389 F. 2D 793, 801; 182 CT. CL. 399 (1968), IT WAS STATED:

"AN ESTIMATE AS TO A MATERIAL MATTER IN A BIDDING INVITATION IS AN EXPEDIENT. ORDINARILY IT IS ONLY USED WHERE THERE IS A RECOGNIZED NEED FOR GUIDANCE TO BIDDERS ON A PARTICULAR POINT BUT SPECIFIC INFORMATION IS NOT REASONABLY AVAILABLE. H. L. YOH CO. V. UNITED STATES, 288 F. 2D 493, 494, 153 CT. CL. 104, 105 (1961). INTRINSICALLY, THE ESTIMATE THAT IS MADE IN SUCH CIRCUMSTANCES MUST BE THE PRODUCT OF SUCH RELEVANT UNDERLYING INFORMATION AS IS AVAILABLE TO THE AUTHOR OF THE INVITATION. *** IN SHORT, IN PROMULGATING AN ESTIMATE FOR BIDDING INVITATION PURPOSES, THE GOVERNMENT IS NOT REQUIRED TO BE CLAIRVOYANT BUT IT IS OBLIGED TO BASE THAT ESTIMATE ON ALL RELEVANT INFORMATION THAT IS REASONABLY AVAILABLE TO IT."

WE BELIEVE THAT THE FOREGOING STATEMENT IS PERTINENT TO YOUR CLAIM FOR RELIEF.

WHEN DURING THE TERM OF A REQUIREMENTS CONTRACT, THE BUYER'S ACTUAL NEEDS TAPER OFF, DIMINISH, OR ALTOGETHER CEASE, NO CONTINUED PURCHASES ARE PROMISED AND NO BREACH OF CONTRACT RESULTS SINCE THE BUYER AGREED TO NO SPECIFIC QUANTITY, ONLY THAT ALL ITS REQUIREMENTS WOULD BE PURCHASED FROM THE SELLER. BRAWLEY V UNITED STATES, 96 U.S. 163 (1877); 37 COMP. GEN. 688 (1958); 47 COMP. GEN. 365 (1966); B-165642, FEBRUARY 19, 1969. HENCE, NO RELIEF MAY BE GRANTED ON ACCOUNT OF THE LOSSES INCURRED AS A RESULT OF THE FAILURE OF THE ACTUAL REQUIREMENTS TO APPROACH THE ESTIMATED QUANTITIES STATED IN YOUR CONTRACT.

IN YOUR LETTER OF DECEMBER 7, 1970, YOU ALSO PROTEST A NEW GSA IFB, FPNSO -E3-0934-A, FOR THE SAME PRODUCT, CITING A TREMENDOUS OVER QUANTITY ESTIMATE AS THE REASON YOU REFUSED TO BID ON THIS IFB. IN RESPONSE TO YOUR ALLEGATION THAT THE ESTIMATES STATED IN THE CITED IFB WERE CARELESSLY PREPARED WITHOUT REGARD FOR ACTUAL ANNUAL USAGE, GSA ADVISED YOU IN A LETTER DATED DECEMBER 14, 1970, THAT:

" *** DURING THE PAST YEAR, FOR INSTANCE, A SUDDEN UNPREDICTABLE DROP IN DEMAND OCCURRED. DURING THE PAST FOUR MONTHS DEMANDS HAVE HAD A SLOW, PARTIAL RECOVERY. BECAUSE NO KNOWN REASON EXISTS FOR FUTURE DEMANDS TO AGAIN DROP DRASTICALLY WE CONCLUDE THAT OUR PRESENT DEMAND FORECAST IS CORRECT AND THAT THE REQUIREMENT PROJECTION IS REASONABLE."

WE NOTE THAT THE ESTIMATED QUANTITIES STATED IN THE NEW IFB FOR ZONES 2, 3, AND 4 HAVE BEEN REDUCED FROM 7,700 BOXES TO 5,582 BOXES AND THAT A 50 PERCENT GUARANTEED MINIMUM CLAUSE WAS INSERTED. IT APPEARS FROM THE RECORD THAT GSA HAS ACCOUNTED FOR PAST PROCUREMENT HISTORY, AS WELL AS CURRENT TREND, IN REDUCING ITS ESTIMATES FOR STENCIL FILM. IN VIEW OF THESE CHANGES, WHICH SEEM TO REFLECT A REAPPRAISAL BY GSA OF ITS ESTIMATED NEEDS, WE SEE NO BASIS TO QUESTION THE ADEQUACY OF THE NEW IFB.

ACCORDINGLY, YOUR CLAIM FOR RELIEF IS DENIED.