B-170814, JAN 4, 1971

B-170814, JAN 4, 1971

BID PROTEST - SOLICITATION REQUIREMENTS DENIAL OF PROTEST AGAINST SOLICITATION FOR AIR CONDITIONERS ISSUED BY GSA, REGIONAL OFFICE WHICH LACKED A SCHEDULE LIMITING MAXIMUM QUANTITIES DELIVERABLE DURING A SPECIFIC PERIOD OF TIME. WHERE THE PROVISIONS OF SECTION 1-3.409(B), FEDERAL PROCUREMENT REGULATIONS USE PERMISSIVE LANGUAGE IN URGING, WHERE FEASIBLE, THE INCLUSION OF THE MAXIMUM LIMIT OF THE CONTRACTOR'S OBLIGATION TO DELIVER, SUCH LANGUAGE DOES NOT IMPOSE A MANDATORY DIRECTION TO THE PROCUREMENT ACTIVITY AND THE 30 DAY DELIVERY REQUIREMENT HAS LONG BEEN IN EFFECT FOR SUCH A STANDARD COMMERCIAL STOCK ITEM AND THE RECEIPT OF 10 BIDS UNDER THIS SOLICITATION REASONABLY INDICATES THAT SUCH BIDDERS DID NOT CONSIDER THE REQUIREMENTS TO BE UNDULY BURDENSOME. THEREFORE THE PROTEST IS DENIED.

TO CARRIER OVERSEAS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF SEPTEMBER 15 AND 16, 1970, AND LETTER OF SEPTEMBER 22, 1970, PROTESTING AGAINST THE ISSUANCE OF SOLICITATION NO. K-Z-1-5237-M-F BY THE KANSAS CITY, MISSOURI, REGIONAL OFFICE, GENERAL SERVICES ADMINISTRATION, IN THAT THE PROVISIONS OF SECTION 1-3.409(B) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) CONCERNING MAXIMUM AND MINIMUM QUANTITY LIMITATIONS SCHEDULE WERE NOT FOLLOWED AND THAT THE 30-DAY DELIVERY REQUIREMENT WAS UNREALISTIC AND UNFAIR TO BIDDERS.

THE SOLICITATION WAS ISSUED ON AUGUST 25, 1970, FOR A FORMALLY ADVERTISED FEDERAL SUPPLY SCHEDULE REQUIREMENTS CONTRACT FOR FSC GROUP 41, PART I, FSC CLASS 4120 AIR CONDITIONERS, FOR THE PERIOD NOVEMBER 1, 1970, OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH OCTOBER 31, 1971. TEN BIDS WERE RECEIVED BY BID OPENING TIME ON SEPTEMBER 17, 1970. YOUR FIRM DID NOT SUBMIT A BID ON THIS REQUIREMENT.

YOU SUGGEST THAT, IN ACCORDANCE WITH THE REGULATIONS, THE SOLICITATION SHOULD INCLUDE A SCHEDULE LIMITING MAXIMUM QUANTITIES DELIVERABLE DURING A SPECIFIC PERIOD OF TIME - I.E., 90 DAYS - OR ALTERNATELY, THAT A BIDDER BE PERMITTED TO INCORPORATE SUCH A SCHEDULE IN ITS BID. YOU REQUEST THAT THE GOVERNMENT RECONSIDER ITS POSITION REGARDING THE ADEQUACY OF THE SOLICITATION TO RELIEVE AN IMPOSSIBLE BURDEN WHICH IS PLACED ON BIDDERS IN RESPONDING TO THE SOLICITATION.

THE ABOVE-CITED REGULATION PROVIDES AS FOLLOWS:

"(B) REQUIREMENTS CONTRACT - (1) DESCRIPTION. THIS TYPE OF CONTRACT PROVIDES FOR FILLING ALL ACTUAL PURCHASE REQUIREMENTS OF SPECIFIC PROPERTY OR SERVICES OF DESIGNATED ACTIVITIES DURING A SPECIFIED CONTRACT PERIOD WITH DELIVERIES TO BE SCHEDULED BY THE TIMELY PLACEMENT OF ORDERS UPON THE CONTRACTOR BY ACTIVITIES DESIGNATED EITHER SPECIFICALLY OR BY CLASS. DEPENDING ON THE SITUATION, THE CONTRACT MAY PROVIDE FOR (I) FIRM FIXED- PRICES, (II) PRICE ESCALATION, OR (III) PRICE REDETERMINATION. ESTIMATED TOTAL QUANTITY IS STATED FOR THE INFORMATION OF PROSPECTIVE CONTRACTORS, WHICH ESTIMATE SHOULD BE AS REALISTIC AS POSSIBLE. THE ESTIMATE MAY BE OBTAINED FROM THE RECORDS OF PREVIOUS REQUIREMENTS AND CONSUMPTION, OR BY OTHER MEANS. CARE SHOULD BE USED IN WRITING AND ADMINISTERING THIS TYPE OF CONTRACT TO AVOID IMPOSITION OF AN IMPOSSIBLE BURDEN ON THE CONTRACTOR. THEREFORE, THE CONTRACT SHALL STATE, WHERE FEASIBLE, THE MAXIMUM LIMIT OF THE CONTRACTOR'S OBLIGATION TO DELIVER AND, IN SUCH EVENT, SHALL ALSO CONTAIN APPROPRIATE PROVISION LIMITING THE GOVERNMENT'S OBLIGATION TO ORDER. WHEN LARGE INDIVIDUAL ORDERS OR ORDERS FROM MORE THAN ONE ACTIVITY ARE ANTICIPATED, THE CONTRACT MAY SPECIFY THE MAXIMUM QUANTITIES WHICH MAY BE ORDERED UNDER EACH INDIVIDUAL ORDER OR DURING A SPECIFIED PERIOD OF TIME. SIMILARLY, WHEN SMALL ORDERS ARE ANTICIPATED, THE CONTRACT MAY SPECIFY THE MINIMUM QUANTITIES TO BE ORDERED.

"(2) APPLICATION. A REQUIREMENTS CONTRACT MAY BE USED FOR PROCUREMENTS WHERE IT IS IMPOSSIBLE TO DETERMINE IN ADVANCE THE PRECISE QUANTITIES OF THE PROPERTY OR SERVICES THAT WILL BE NEEDED BY DESIGNATED ACTIVITIES DURING A DEFINITE PERIOD OF TIME. ADVANTAGES OF THIS TYPE OF CONTRACT ARE:

"(I) FLEXIBILITY WITH RESPECT TO BOTH QUANTITIES AND DELIVERY SCHEDULING;

"(II) SUPPLIES OR SERVICES NEED BE ORDERED ONLY AFTER ACTUAL NEEDS HAVE MATERIALIZED;

"(III) WHERE PRODUCTION LEAD TIME IS INVOLVED, DELIVERIES MAY BE MADE MORE PROMPTLY BECAUSE THE CONTRACTOR IS USUALLY WILLING TO MAINTAIN LIMITED STOCKS IN VIEW OF THE GOVERNMENT'S COMMITMENT;

"(IV) PRICE ADVANTAGES OR SAVINGS MAY BE REALIZED THROUGH COMBINING SEVERAL ANTICIPATED REQUIREMENTS INTO ONE QUANTITY PROCUREMENT; AND

"(V) IT PERMITS STOCKS TO BE MAINTAINED AT MINIMUM LEVELS AND ALLOWS DIRECT SHIPMENT TO THE USER. "GENERALLY, THE REQUIREMENTS CONTRACT IS APPROPRIATE FOR USE WHEN THE ITEM OR SERVICE IS COMMERCIAL OR MODIFIED COMMERCIAL IN TYPE AND WHEN A RECURRING NEED IS ANTICIPATED."

ARTICLE 1 OF THE SPECIAL PROVISIONS OF THE SOLICITATION, AS AMENDED, PROVIDES IN PART AS FOLLOWS:

"(A) THIS SOLICITATION PROVIDES FOR THE NORMAL SUPPLY REQUIREMENTS OF ALL DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS, INCLUDING WHOLLY OWNED GOVERNMENT CORPORATIONS, IN THE EXECUTIVE BRANCH OF THE FEDERAL GOVERNMENT INCLUDING DEPARTMENT OF DEFENSE, EXCEPT THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, FOR DELIVERY WITHIN THE 48 CONTIGUOUS STATES AND WASHINGTON, D.C. AND RESULTANT CONTRACTS WILL BE USED AS PRIMARY SOURCES FOR THE ARTICLES OR SERVICES LISTED HEREIN. ARTICLES OR SERVICES WILL BE ORDERED FROM TIME TO TIME IN SUCH QUANTITIES AS MAY BE NEEDED TO FILL ANY REQUIREMENT DETERMINED IN ACCORDANCE WITH CURRENT APPLICABLE PROCUREMENT AND SUPPLY PROCEDURES. AS IT IS IMPOSSIBLE TO DETERMINE THE PRECISE QUANTITIES OF DIFFERENT KINDS OF ARTICLES AND SERVICES DESCRIBED IN THE SOLICITATION THAT WILL BE NEEDED DURING THE CONTRACT TERM, EACH CONTRACTOR WHOSE BID IS ACCEPTED WILL BE OBLIGATED TO DELIVER ALL ARTICLES AND SERVICES OF THE KINDS CONTRACTED FOR THAT MAY BE ORDERED DURING THE CONTRACT TERM, EXCEPT:

"(1) MAXIMUM ORDER LIMITATION: THE TOTAL DOLLAR VALUE OF ANY ORDER PLACED UNDER THIS CONTRACT FOR DELIVERY TO A SINGLE DESTINATION SHALL NOT EXCEED $50,000. THE CONTRACTOR AGREES NOT TO ACCEPT OR FULFILL ANY ORDERS IN VIOLATION OF THIS PROVISION. VIOLATION MAY RESULT IN TERMINATION OF THE CONTRACT PURSUANT TO THE CLAUSE OF THE GENERAL PROVISIONS ENTITLED 'DEFAULT'.

"(2) SMALL REQUIREMENTS: NO ORDERING OFFICE WILL BE OBLIGATED TO ORDER AND NO CONTRACTOR WILL BE OBLIGATED TO MAKE ANY DELIVERY AMOUNTING TO $50 OR LESS, BUT SUCH DELIVERIES MAY BE ORDERED BY THE GOVERNMENT SUBJECT TO ACCEPTANCE BY THE CONTRACTOR. FAILURE ON THE PART OF THE CONTRACTOR TO RETURN THE ORDER BY MAILING OR OTHERWISE FURNISHING IT TO THE ORDERING OFFICE WITHIN THREE (3) DAYS AFTER RECEIPT SHALL CONSTITUTE ACCEPTANCE, WHEREUPON ALL OTHER PROVISIONS OF THE CONTRACT SHALL APPLY TO SUCH ORDER.

"(WITHOUT PREJUDICE TO THE RIGHTS OF EITHER PARTY UNDER THE ABOVE CLAUSE, BIDDER IS REQUESTED TO INDICATE WHETHER IT IS HIS GENERAL PRACTICE TO ACCEPT ORDERS AMOUNTING TO $50 OR LESS, -- YES -- NO. THIS INFORMATION WILL BE PUBLISHED IN RESULTANT SCHEDULES FOR GUIDANCE OF ORDERING OFFICES)."

THE FEDERAL SUPPLY SCHEDULE METHOD OF CONTRACTING IS USED TO SIMPLIFY THE PURCHASE PROCESSES FOR COMMONLY USED ITEMS WHICH ARE READILY AVAILABLE THROUGH THE DISTRIBUTION SYSTEMS OF INDUSTRIES, WITHOUT THE MULTIPLICATION OF ADMINISTRATIVE COSTS WHICH COULD BE NECESSITATED BY FREQUENT DEFINITE QUANTITY INDIVIDUAL PURCHASES OR CONSOLIDATED BUYING, AND WITHOUT THE BURDEN OF OPERATING A GOVERNMENT WAREHOUSING AND DELIVERY SYSTEM FOR ITEMS NOT SO WIDELY USED AND REGULARLY REQUIRED AS WOULD JUSTIFY THE MAINTENANCE OF GOVERNMENT STORE STOCKS.

BECAUSE THE CONTEMPLATED FEDERAL SUPPLY SCHEDULE CONTRACT PROVIDES FOR THE NORMAL REQUIREMENTS OF ALL AGENCIES AS SET FORTH IN ARTICLE 1 ABOVE, IT IS NOT FEASIBLE TO DETERMINE IN ADVANCE AS TO ANY ONE ZONE OR REGION THE EXACT QUANTITIES WHICH WILL BE NEEDED DURING THE CONTRACT PERIOD. FOR THAT REASON, IT IS IMPRACTICABLE TO SPECIFY THE MINIMUM AND MAXIMUM QUANTITIES WHICH MAY BE REQUIRED FROM THE CONTRACTOR.

PARAGRAPH 21 OF THE SOLICITATION SPECIAL PROVISIONS CONTAINS THE ESTIMATED REQUIREMENTS FOR EACH ITEM BASED UPON THE DOLLAR VALUE OF PREVIOUS PURCHASES FOR THE PERIOD JANUARY 12, 1970, THROUGH JULY 31, 1970, AS REPORTED BY THE PREVIOUS CONTRACTORS. NO GUARANTEE IS PROVIDED THEREIN THAT ANY QUANTITIES WILL BE PURCHASED - ONLY THAT DELIVERY ORDERS OF LESS THAN $50 OR MORE THAN $50,000 NEED NOT BE FULFILLED BY THE CONTRACTOR.

THE 30-DAY DELIVERY REQUIREMENT FOR THIS STANDARD COMMERCIAL STOCKED ITEM IS REPORTED TO HAVE BEEN IN EFFECT SINCE 1964 EXCEPT IN ONE INSTANCE WHEN DELIVERY WAS REQUIRED 20 DAYS AFTER ORDER. THERE IS NO REPORTED INSTANCE OF A BIDDER TAKING EXCEPTION TO THE TIME OF DELIVERY REQUIREMENT OR TO THE ABSENCE OF QUANTITY LIMITATIONS. THE RECEIPT OF 10 BIDS UNDER THIS SOLICITATION REASONABLY INDICATES THAT SUCH BIDDERS DID NOT CONSIDER THE REQUIREMENTS TO BE UNDULY BURDENSOME. MOREOVER, IT SHOULD BE NOTED THAT THE UNDERLINED PORTIONS OF FPR SEC 1-3.409(B), ABOVE, ARE STATED IN PERMISSIVE LANGUAGE WHICH DOES NOT IMPOSE A MANDATORY DIRECTION TO THE PROCUREMENT ACTIVITY TO SPECIFY MAXIMUM AND MINIMUM QUANTITY LIMITATIONS WHEN THE IMPOSITION OF SUCH LIMITATIONS IS NOT FEASIBLE.

IN THE CIRCUMSTANCES, WE FIND NO BASIS TO OBJECT TO THE SOLICITATION AS ISSUED AND AMENDED.

YOUR PROTEST IS, THEREFORE, DENIED.