B-170823, OCT. 19, 1970

B-170823: Oct 19, 1970

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THE PROTEST WITH RESPECT TO AWARD OF CONTRACT TO HUGHES IS MOOT. YOU STATE THAT YOU HAVE REASON TO BELIEVE HUGHES WILL RECEIVE SUBSIDIES FROM A FEDERAL AGENCY. EITHER BECAUSE HUGHES IS LOCATED IN A POVERTY AREA OR FOR TRAINING OF MINORITY GROUPS. YOU FURTHER STATE THAT WHILE YOUR BID FOR THE PROCUREMENT WAS $48. HUGHES' BID WAS $34. YOU STATE YOUR BELIEF THAT IT IS NOT IN THE BEST INTERESTS OF THE GOVERNMENT AND THE TAXPAYERS TO MAKE AN AWARD TO A SUBSIDIZED FIRM SINCE THE ULTIMATE COST TO THE GOVERNMENT WILL GREATLY EXCEED THE AMOUNT OF YOUR BID PRICE. BY SUPPLYING EMPLOYMENT FOR ONE GROUP OF PERSONS THE GOVERNMENT IS DENYING EMPLOYMENT TO ANOTHER GROUP. WHICH IS FINANCED BY THE DEPARTMENT OF LABOR.

B-170823, OCT. 19, 1970

BID PROTEST - QUALIFICATION REQUIREMENT - WITHDRAWAL DENIAL OF PROTEST AGAINST THE AWARD BY UNIV. OF CALIF. TO HUGHES DE SANTE FE, LOW BIDDER, FOR CANVAS PROTECTIVE SHOE COVERS FOR USE AT AEC, LOS ALAMOS SCIENTIFIC LABORATORY, NEW MEXICO. DETERMINATION THAT THE AWARD FOR CANVAS PROTECTIVE SHOE COVERS SHOULD BE RESOLICITED WHEN THE PRIME LOW OFFEROR, HUGHES, DID NOT ACCEPT AWARD ON BASIS OF INABILITY TO OBTAIN THE NECESSARY MATERIAL IN SUFFICIENT TIME TO MEET THE FIRST MONTHLY SCHEDULE, NOTWITHSTANDING PROTEST ALLEGATIONS FROM SECOND LOW OFFEROR THAT AWARD TO A GOVERNMENT SUBSIDIZED FIRM WOULD INCREASE COST TO THE GOVERNMENT AND SHOW A PREFERENCE TO ONE GROUP OF PERSONS. IN LIGHT OF THE WITHDRAWAL OF HUGHES FROM COMPETITION, THE PROTEST WITH RESPECT TO AWARD OF CONTRACT TO HUGHES IS MOOT.

TO MINX PRODUCTS, INC.:

WE REFER TO YOUR PROTEST BY LETTER DATED SEPTEMBER 17, 1970, AGAINST THE AWARD BY THE UNIVERSITY OF CALIFORNIA OF A CONTRACT, IDENTIFIED AS PURCHASE ORDER SX1-33459-1, TO HUGHES DE SANTA FE (HUGHES) FOR THE FURNISHING OF CANVAS PROTECTIVE SHOE COVERS FOR USE AT THE ATOMIC ENERGY COMMISSION (AEC) LOS ALAMOS SCIENTIFIC LABORATORY (LASL), LOS ALAMOS, NEW MEXICO.

YOU STATE THAT YOU HAVE REASON TO BELIEVE HUGHES WILL RECEIVE SUBSIDIES FROM A FEDERAL AGENCY, EITHER BECAUSE HUGHES IS LOCATED IN A POVERTY AREA OR FOR TRAINING OF MINORITY GROUPS. YOU FURTHER STATE THAT WHILE YOUR BID FOR THE PROCUREMENT WAS $48,962.40, HUGHES' BID WAS $34,440, AN AMOUNT WHICH YOU CLAIM DOES NOT COVER THE DIRECT COST OF MATERIALS AND LABOR FOR THE REQUIREMENT. ACCORDINGLY, YOU RECOMMEND THAT HUGHES BE REQUESTED TO FURNISH ITS COST BREAKDOWN IN ORDER TO DETERMINE THE VALIDITY OF ITS BID. IN ADDITION, YOU STATE YOUR BELIEF THAT IT IS NOT IN THE BEST INTERESTS OF THE GOVERNMENT AND THE TAXPAYERS TO MAKE AN AWARD TO A SUBSIDIZED FIRM SINCE THE ULTIMATE COST TO THE GOVERNMENT WILL GREATLY EXCEED THE AMOUNT OF YOUR BID PRICE, AND BY SUPPLYING EMPLOYMENT FOR ONE GROUP OF PERSONS THE GOVERNMENT IS DENYING EMPLOYMENT TO ANOTHER GROUP.

A REPORT FORWARDED TO OUR OFFICE BY AEC STATES THAT THE UNIVERSITY OF CALIFORNIA, WHICH OPERATES LASL UNDER AEC CONTRACT W-7405-ENG-36, ISSUED REQUEST FOR QUOTATIONS (RFQ) SX1-33459 ON JULY 29, 1970, FOR 40,800 PAIRS OF THE CANVAS PROTECTIVE SHOE COVERS, AND HUGHES SUBMITTED THE LOWEST QUOTATION. ON SEPTEMBER 11, LASL MAILED THE ABOVE PURCHASE ORDER TO HUGHES, TO BE BINDING ONLY UPON ACCEPTANCE BY HUGHES. ON SEPTEMBER 22, HOWEVER, HUGHES INFORMED LASL THAT HUGHES WOULD NOT ACCEPT THE ORDER DUE TO INABILITY TO OBTAIN THE NECESSARY CANVAS IN SUFFICIENT TIME TO MEET THE FIRST MONTHLY DELIVERY ON NOVEMBER 1, 1970. HUGHES ALSO INFORMED LASL THAT HUGHES HAS A PROGRAM FOR THE TRAINING OF MINORITIES, WHICH IS FINANCED BY THE DEPARTMENT OF LABOR; HOWEVER, HUGHES STATED THAT THE PROGRAM WOULD NOT AFFECT ITS PRICE FOR THE SHOE COVERS INASMUCH AS HUGHES DID NOT INTEND TO USE THE TRAINEES IN THE PRODUCTION OF THE ITEMS.

THE AEC REPORT FURTHER STATES THAT IN VIEW OF THE FOREGOING, LASL DETERMINED THAT, FROM THE STANDPOINT OF PROVIDING FAIR AND EQUAL TREATMENT TO OFFERORS AND OF SECURING THE LOWEST PRICE POSSIBLE, IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO RESCHEDULE THE PROCUREMENT REQUIREMENTS WITH AN INITIAL DELIVERY DATE OF DECEMBER 1, IN LIEU OF THE ORIGINALLY SPECIFIED NOVEMBER 1 DATE, AND TO REQUEST NEW QUOTATIONS FROM ALL OF THE ORIGINALLY SOLICITED FIRMS. WE ARE INFORMED BY AEC, HOWEVER, THAT HUGHES DID NOT SUBMIT A QUOTATION IN RESPONSE TO THE RESOLICITATION.

IN LIGHT OF HUGHES' WITHDRAWAL FROM COMPETITION FOR THE PROCUREMENT IN QUESTION, IT APPEARS THAT YOUR PROTEST WITH RESPECT TO AWARD OF A CONTRACT TO HUGHES HAS BEEN RENDERED MOOT. FOR YOUR INFORMATION, HOWEVER, WE ARE ENCLOSING A COPY OF OUR DECISION B-167287, SEPTEMBER 4, 1969, RELATING TO A PROCUREMENT IN WHICH WE UPHELD AWARD TO THE LOW BIDDER, WHO WAS IN RECEIPT OF FINANCIAL ASSISTANCE UNDER A CONTRACT WITH THE DEPARTMENT OF LABOR COVERING A TRAINING PROGRAM AUTHORIZED PURSUANT TO THE SPECIAL IMPACT PROGRAMS PROVISIONS OF TITLE I-D OF THE ECONOMIC OPPORTUNITY ACT OF 1964, AS AMENDED, 42 U.S.C. 2763-2771. WHETHER SUCH PROGRAMS SHOULD BE DISCONTINUED OR RESTRICTED TO SOME DEGREE IS, OF COURSE, A MATTER FOR THE CONGRESS TO RESOLVE.