B-171653, MAY 11, 1971

B-171653, MAY 11, 1971

BID PROTEST - SOLE SOURCE PROCUREMENT - PUBLIC EXIGENCY EXCEPTION CONCERNING ALLEGATIONS OF IMPROPRIETY AND ILLEGALITY IN A PROCUREMENT OF VEGETABLE SEEDS FROM THE DESSERT SEED COMPANY, INC., BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT. A CONTRACT NEGOTIATED ORALLY ON A SOLE-SOURCE BASIS TO PROCURE VEGETABLE SEEDS FOR SHIPMENT TO EAST PAKISTAN FOLLOWING A CYCLONE-FLOOD IS NOT SUBJECT TO QUESTION BY THE COMP. GEN. BECAUSE IT WAS NEGOTIATED UNDER THE AUTHORITY OF THE PUBLIC EXIGENCY EXCEPTION IN SECTION 1-3.203 OF THE FPR WHERE THE TIME LIMIT FOR DELIVERY COULD BE MET BY ONLY ONE FIRM.

TO FERRY-MORSE SEED COMPANY, INC.

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 11, 1970, FORWARDED TO OUR OFFICE BY CONGRESSMAN CHARLES S. GUBSER ON JANUARY 5, 1971, CONCERNING ALLEGATIONS OF IMPROPRIETY AND ILLEGALITY IN A PROCUREMENT OF VEGETABLE SEEDS FROM THE DESSERT SEED COMPANY, INC., BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT (AID).

THE PROCUREMENT COVERED DISASTER RELIEF TO THE GOVERNMENT OF EAST PAKISTAN FOLLOWING THE NOVEMBER 12-13, 1970, CYCLONE-FLOOD WHICH CAUSED GREAT DAMAGE TO AGRICULTURAL CROPS. INITIALLY, DONATIONS OF VEGETABLE SEEDS WERE SOUGHT BY EAST PAKISTAN THROUGH THE UNITED NATIONS FOOD AND AGRICULTURE ORGANIZATION (UNFAO), FROM ALL COUNTRIES PROVIDING DISASTER RELIEF, FOR SHIPMENT TO THE AFFECTED AREAS IN LATE DECEMBER 1970 AND PLANTING IN EARLY JANUARY 1971. HOWEVER, WHEN IT BECAME EVIDENT THAT UNFAO WOULD NOT BE ABLE TO SUPPLY THE NEEDED VEGETABLE SEEDS WITHIN THE REQUIRED TIME LIMIT, AID CONTRACTING OFFICIALS, ON DECEMBER 3, 1970, AT THE REQUEST OF THE AID DISASTER RELIEF DIVISION, COMMENCED "EMERGENCY PROCUREMENT ACTION" TO PROCURE SPECIFIC QUANTITIES OF VARIOUS VEGETABLE SEEDS. IN VIEW OF THE IMPENDING DECEMBER DELIVERY DATE, CONCOMITANT WITH THE PROCUREMENT ACTION, ARRANGEMENTS WERE MADE WITH THE MILITARY AIR COMMAND BY THE AID DISASTER RELIEF COORDINATOR FOR THE SEEDS TO BE AIRLIFTED TO EAST PAKISTAN ON OR ABOUT DECEMBER 12, 1970.

ON DECEMBER 3, 1970, THREE AID EMPLOYEES WERE ASSIGNED TO TELEPHONE SEED COMPANIES TO DETERMINE WHETHER THEY WOULD BE ABLE TO FURNISH THE VARIETIES OF SEED WITHIN THE DESIRED QUALITY, QUANTITY, PACKAGING AND DELIVERY REQUIREMENTS. ELEVEN FIRMS, INCLUDING FERRY-MORSE, WERE CONTACTED BY TELEPHONE. NONE OF THE INITIAL CONTACTS INCLUDED PRICE DISCUSSIONS, SINCE ACTUAL PRICE NEGOTIATIONS WERE TO BE CONDUCTED WITH THOSE FIRMS DETERMINED TO HAVE THE ABILITY TO COMPLY WITH AID REQUIREMENTS. IT IS REPORTED THAT:

"BY MID-AFTERNOON ON FRIDAY, DECEMBER 4, THE RESULTS OF THE TELEPHONE CALLS TO THE SEED COMPANIES WERE POOLED AND IT DEVELOPED THAT ONLY ONE COMPANY, DESSERT SEED COMPANY, WAS CAPABLE OF MEETING ALL OF THE REQUIREMENTS. GIVEN THE VERY SHORT TIME IN WHICH THE SUBSTANTIAL QUANTITY OF SEED HAD TO BE SORTED, PACKAGED AND DELIVERED, DECISION WAS MADE TO MAKE AWARD TO DESSERT SEED COMPANY, AND THAT COMPANY WAS SO NOTIFIED IN THE LATE AFTERNOON OF FRIDAY, DECEMBER 4. THE SEED WAS SORTED, PACKAGED AND DELIVERED TO THE MILITARY AIR COMMAND AT NORTON AIR BASE, SAN BERNARDINO, CALIFORNIA, ON DECEMBER 12, 1970. IT ARRIVED IN DACCA, EAST PAKISTAN AT 6 A.M., DECEMBER 15." A FORMAL CONTRACT WAS ISSUED TO DESSERT ON DECEMBER 28, 1970.

YOU HAVE ALLEGED THAT THERE WAS IMPROPRIETY OR ILLEGALITY IN THE CONDUCT OF THIS PROCUREMENT BECAUSE THE CONTRACT WAS NEGOTIATED ORALLY ON A SOLE- SOURCE BASIS "WITHOUT BOTH A WRITTEN REQUEST FOR AND A WRITTEN BID, AS GOVERNMENT REGULATIONS SPECIFY." HOWEVER, THE CONDUCT OF THIS PROCUREMENT ON AN ORAL AND SOLE-SOURCE BASIS IS NOT SUBJECT TO QUESTION BY OUR OFFICE FOR THE REASONS INDICATED BELOW.

THE CONTRACT WAS NEGOTIATED ORALLY ON A SOLE-SOURCE BASIS UNDER THE AUTHORITY OF SECTION 633 OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, AND EXECUTIVE ORDER NO. 11223, MAY 12, 1965, AS IMPLEMENTED BY THE PROVISIONS OF AID PROCUREMENT REGULATIONS (AIDPR) 7-3.200-50. THAT REGULATION PERMITS AN AID CONTRACT TO BE NEGOTIATED UNDER THE AUTHORITY OF THE PUBLIC EXIGENCY EXCEPTION IN SECTION 1-3.202 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR).

FPR SEC. 1-3.202(A) PRESCRIBES THAT, IN ORDER FOR THE PUBLIC EXIGENCY AUTHORITY TO BE USED, THE NEED MUST BE COMPELLING AND OF UNUSUAL URGENCY. PROPERTY "NEEDED AT ONCE BECAUSE OF A FIRE, FLOOD, EXPLOSION, OR OTHER DISASTER" IS CITED AS AN EXAMPLE OF PUBLIC EXIGENCY. SUBPARAGRAPH (B)(1) OF THE REGULATION REQUIRES THAT EVERY CONTRACT NEGOTIATED UNDER THE AUTHORITY BE SUPPORTED BY A DETERMINATION AND FINDINGS JUSTIFYING USE OF THE AUTHORITY. SUBPARAGRAPH (B)(2) PROVIDES:

"(2) WHEN PURCHASE ACTION UNDER THIS AUTHORITY IS BASED ON TELEPHONE OR OTHER ORAL OFFERS, A WRITTEN CONFIRMATION OF THE ACCEPTED OFFER SHALL BE OBTAINED AND MADE A PART OF THE PURCHASE CASE FILE. IN ADDITION, A RECORD SHALL BE ESTABLISHED IN SUCH CASES WHICH SHALL CONTAIN, AS A MINIMUM, THE FOLLOWING INFORMATION WITH RESPECT TO EACH OFFER: NAME AND ADDRESS OF EACH OFFEROR QUOTING, DESCRIPTION OF ITEM, UNIT PRICE, DELIVERY TIME, AND DISCOUNT TERMS OFFERED. IF QUOTATIONS LOWER THAN THE ACCEPTED QUOTATION ARE RECEIVED, THE REASONS FOR THEIR REJECTION SHALL BE RECORDED AND MADE A PART OF THE PURCHASE FILE." ALSO, FPR SEC. 1-3.802(C) STATES, IN PART, AS FOLLOWS:

" *** GENERALLY, REQUESTS FOR PROPOSALS SHALL BE IN WRITING. HOWEVER, IN APPROPRIATE CASES, SUCH AS THE PROCUREMENT OF PERISHABLE SUBSISTENCE, ORAL REQUESTS FOR QUOTATIONS ARE AUTHORIZED."

FPR SEC. 1-3.202 WAS CITED AS NEGOTIATION AUTHORITY FOR THIS PROCUREMENT IN THE DETERMINATION AND FINDINGS. IN SUPPORT OF NEGOTIATION ON A SOLE- SOURCE BASIS WITH DESSERT, IT WAS STATED:

"TYPE OF PROCUREMENT:

"EMERGENCY NEGOTIATED PROCUREMENT - TELEPHONIC QUOTATIONS TO RESPONSIBLE SEED COMPANIES ON CAPABILITY TO DELIVER, UNDER REQUIRED SPECIFICATIONS, AND EMERGENCY DELIVERY SCHEDULES, VEGETABLE SEEDS.

"3. DETERMINATIONS/JUSTIFICATION

"A. BY LATE FRIDAY AFTERNOON (12/4) IT WAS CLEAR THAT THERE WAS ONLY ONE RESPONSIBLE SUPPLIER WHO COULD FULLY COMPLY WITH ALL REQUIREMENTS.

"B. THE AIR FORCE WAS READYING THREE C-141'S FOR DEPARTURE TO DACCA TO RETRIEVE AND RETURN TO THE U.S. THE HELICOPTERS SENT FOR EMERGENCY USE IN THE DISASTER AREA, AND WERE SCHEDULED TO DEPART U.S. DECEMBER 11TH AND 12TH. IT WAS IMPORTANT TO TAKE ADVANTAGE OF THESE AIRCRAFT AND SAVINGS TO THE GOVERNMENT OF COMMERCIAL AIR FREIGHT COSTS, AND MEETING DELIVERY WITHIN THE EMERGENCY.

"4. FINDINGS AND FACTS

"A. THIS PROCUREMENT IS FOR EMERGENCY REQUIREMENTS OF VICTIMS OF THE FLOOD DISASTER FOR ARRIVAL DACCA EARLY DECEMBER FOR PLANTING.

"B. DEMAND DELIVERY SCHEDULE FROM SUPPLIER DECEMBER 9 - 10 FOR MILITARY AIRCRAFT PICKUP BY 1 OR MORE C-141'S DESTINED TO DEPART U.S. TO RETRIEVE HELICOPTERS PREVIOUSLY COMMITTED."

IN VIEW OF THE ABOVE-CITED REGULATIONS AND THE DETERMINATION AND FINDINGS, WE FIND NO LEGAL BASIS TO OBJECT TO THE DECISION TO OBTAIN AN ORAL QUOTATION FROM DESSERT. FURTHER, THE ORAL ACCEPTANCE OF THE DESSERT OFFER BY AID ON DECEMBER 4, 1970, CONSUMMATED A VALID AND BINDING CONTRACT. B-164887, DECEMBER 2, 1968.

CONCERNING THE SOLE-SOURCE NATURE OF THE PROCUREMENT, WE NOTE THAT YOUR LETTER INDICATES A MISTAKEN IMPRESSION THAT THE AID REQUIREMENTS FOR THE VEGETABLE SEEDS DICTATED AN EARLY JANUARY DELIVERY DATE. AS STATED, SUPRA, DELIVERY OF THE VEGETABLE SEEDS WAS REQUIRED BY DECEMBER 12 FOR PLANTING, NOT DELIVERY, IN EARLY JANUARY. WHILE YOUR LETTER CONCLUDES THAT THREE SEED COMPANIES, INCLUDING FERRY-MORSE, COULD HAVE MET AID DELIVERY REQUIREMENTS, NOTING THAT FERRY-MORSE WAS PREPARED TO PACKAGE THE ORDER IN 1 DAY AT ITS KENTUCKY PLANT, THE RECORD DOES NOT SUPPORT YOUR CONCLUSION. IN THIS REGARD, AN AID MEMORANDUM BASED ON A TELEPHONIC DISCUSSION WITH FERRY-MORSE STATES:

"FERRY-MORSE CAN SUPPLY SEEDS BUT PACKAGING THE PROBLEM. PACKAGING WOULD BE DONE IN KENTUCKY AND THE SEEDS ARE IN CALIFORNIA. HE DIDN'T KNOW WHAT TYPE OF PACKAGING COULD BE SUPPLIED.

" *** DELIVERY TIME ELEMENT WAS A FACTOR AND THEY COULD NOT DISRUPT DOMESTIC MARKETING FOR A ONE TIME JOB." IN VIEW THEREOF, WE CANNOT CONCLUDE THAT AID IMPROPERLY EXCLUDED FERRY-MORSE FROM FURTHER CONSIDERATION. AS FOR THE OTHER 10 SEED FIRMS CONTACTED, ALL, EXCEPT DESSERT, INDICATED EITHER NONINTEREST IN THE PROCUREMENT OR INABILITY TO COMPLY WITH THE URGENT DELIVERY SCHEDULE.

THE INFORMATION AVAILABLE TO AID ON DECEMBER 4 THAT ONLY DESSERT COULD MEET THE AGENCY NEEDS WITHIN THE REQUIRED TIME LIMIT SUFFICIENTLY SUPPORTS THE CONTRACTING OFFICER'S DECISION TO LIMIT NEGOTIATIONS TO DESSERT. ARE THEREFORE UNABLE TO CONCLUDE, AS YOU CONTEND, THAT THE CONTRACTING OFFICER ACTED ARBITRARILY IN THE CIRCUMSTANCES.