B-172681, JUL 21, 1971

B-172681: Jul 21, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE SECRETARY OF THE ARMY IS BEING SO ADVISED. CHRISTOPHER AND PHILLIPS: REFERENCE IS MADE TO YOUR LETTER OF MAY 24. RFP-0112 WAS FOR 11. PROPOSALS WERE REQUESTED FOR FOUR QUANTITIES SINCE IT WAS ANTICIPATED THAT THE AWARDS WOULD BE ON THE BASIS EITHER OF THE FIRST CONTRACTOR SUPPLYING 8. WERE SOLICITED SINCE DELIVERIES WERE TO START IN JULY 1971 AND CONTINUE THROUGH NOVEMBER 1971. ACHIEVEMENT OF THIS DELIVERY SCHEDULE WAS CONSIDERED NECESSARY TO AVOID DEPLETION OF THE SUPPLY OF THESE UNITS WHICH WERE TO BE USED IN DIRECT SUPPORT OF UNITED STATES COMBAT FORCES IN SOUTHEAST ASIA. INFORMATION AT THE PROCURING ACTIVITY REVEALED THAT THERE WAS A CRITICAL NEED FOR THE ITEM AND IT WAS BELIEVED THAT ONLY CURRENT PRODUCERS COULD MEET THE SHORT PRODUCTION LEAD TIME.

B-172681, JUL 21, 1971

BID PROTEST - BIDDER RESPONSIBILITY - CANCELLATION OF SOLICITATION DECISION CONCERNING PROTEST OF J & H SMITH MANUFACTURING COMPANY, SECOND LOW OFFEROR, AGAINST THE REJECTION OF ITS OFFER UNDER RFP ISSUED BY U.S. ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY FOR 11,473 ROCKET LAUNCHERS TO BE SUPPLIED BY TWO CONTRACTORS TO PRESERVE SOURCES OF PROCUREMENT. DETERMINATION OF THE PROPRIETY OF THE REJECTION OF PROTESTANT'S OFFER BECAUSE OF NONRESPONSIBILITY HAS BEEN RENDERED ACADEMIC BY THE CANCELLATION OF THE URGENT SOLICITATION. HOWEVER, THE SCHEDULING OF PROCUREMENTS OF THOSE UNITS FOR MARCH OF 1972 SHOULD ALLOW TIME FOR FIRST ARTICLE TESTING AND DELIVERY BY MANUFACTURERS OTHER THAN CURRENT PRODUCERS; THE SECRETARY OF THE ARMY IS BEING SO ADVISED.

TO HILL, CHRISTOPHER AND PHILLIPS:

REFERENCE IS MADE TO YOUR LETTER OF MAY 24, 1971, SUPPLEMENTING THE PROTEST OF THE J & H SMITH MANUFACTURING COMPANY (J & H SMITH), AGAINST THE PROPOSED REJECTION OF THAT FIRM'S OFFER UNDER REQUEST FOR PROPOSALS (RFP) DAAA09-71-R-0112 (HEREAFTER RFP-0112) ISSUED ON MARCH 1, 1971, BY THE UNITED STATES ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS.

RFP-0112 WAS FOR 11,473 ROCKET LAUNCHERS AND SPECIFIED THAT TWO AWARDS WOULD BE MADE FOR THE TOTAL REQUIREMENT IN ORDER TO AVOID DISCONTINUITY OF SUPPLY AND TO MAINTAIN AND/OR PROTECT PRODUCTION BASES. PROPOSALS WERE REQUESTED FOR FOUR QUANTITIES SINCE IT WAS ANTICIPATED THAT THE AWARDS WOULD BE ON THE BASIS EITHER OF THE FIRST CONTRACTOR SUPPLYING 8,623 UNITS AND THE SECOND CONTRACTOR SUPPLYING 2,850 UNITS OR THE FIRST CONTRACTOR SUPPLYING 7,623 UNITS AND THE SECOND CONTRACTOR SUPPLYING 3,800 UNITS.

INITIALLY ONLY THE TWO CURRENT PRODUCERS, STANDARD ARMAMENT AND THE BRUNSWICK CORPORATION, WERE SOLICITED SINCE DELIVERIES WERE TO START IN JULY 1971 AND CONTINUE THROUGH NOVEMBER 1971. ACHIEVEMENT OF THIS DELIVERY SCHEDULE WAS CONSIDERED NECESSARY TO AVOID DEPLETION OF THE SUPPLY OF THESE UNITS WHICH WERE TO BE USED IN DIRECT SUPPORT OF UNITED STATES COMBAT FORCES IN SOUTHEAST ASIA. INFORMATION AT THE PROCURING ACTIVITY REVEALED THAT THERE WAS A CRITICAL NEED FOR THE ITEM AND IT WAS BELIEVED THAT ONLY CURRENT PRODUCERS COULD MEET THE SHORT PRODUCTION LEAD TIME. HOWEVER, AS A RESULT OF A SYNOPSIS OF THE PROCUREMENT APPEARING IN THE COMMERCE BUSINESS DAILY, WHICH WAS INSERTED FOR SUBCONTRACTING PURPOSES ONLY, FIVE ADDITIONAL SOLICITATION PACKAGES WERE REQUESTED AND MAILED TO PROSPECTIVE OFFERORS INCLUDING J & H SMITH.

THREE PROPOSALS WERE RECEIVED ON THE DUE DATE, MARCH 17, 1971, AT WHICH TIME IT WAS DETERMINED THAT J & H SMITH WAS THE SECOND LOW OFFEROR ON ALL FOUR QUANTITIES, WHILE STANDARD ARMAMENT WAS THE LOW OFFEROR ON ALL FOUR QUANTITIES. THE LOWEST EVALUATION COMBINATION FOR THE TWO INTENDED AWARDS WAS STANDARD ARMAMENT'S OFFER ON 8,623 UNITS AND J & H SMITH'S OFFER ON 2,850 UNITS.

ON MARCH 24 AND 25, 1971, A PREAWARD SURVEY OF THE J & H SMITH FACILITIES WAS CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), NEW YORK. THE DCASR TEAM WAS ASSISTED BY PERSONNEL FROM THE PROCURING ACTIVITY AND THE PICATINNY ARSENAL. IT WAS DETERMINED THAT J & H SMITH WAS NOT A RESPONSIBLE OFFEROR, PRIMARILY BECAUSE IT WAS FELT THAT J & H SMITH COULD NOT DELIVER THE LAUNCHERS WITHIN THE REQUIRED TIME FRAME. SUBSEQUENTLY, THE NEW YORK OFFICE OF THE SMALL BUSINESS ADMINISTRATION (SBA) REVIEWED THE DETERMINATION AND REFUSED TO ISSUE J & H SMITH A CERTIFICATE OF COMPETENCY.

IT IS YOUR POSITION THAT THE ARMY AND SBA UNFAIRLY EVALUATED J & H SMITH'S CAPACITY ON THE BASIS OF PRODUCING THE 8,623 UNITS (AT THE RATE OF 1,800 UNITS A MONTH) RATHER THAN PRODUCING THE 2,850 UNITS (AT THE RATE OF 600 UNITS A MONTH). ALSO, YOU STATE THAT THE 30 DAY PERIOD FOR FIRST ARTICLE SUBMISSION WAS UNNECESSARILY SHORT AND WAS SPECIFIED SOLELY TO EXCLUDE COMPETITION FROM FIRMS OTHER THAN THE CURRENT PRODUCERS OF THE LAUNCHERS.

AFTER REVERIFICATION OF THE URGENT NEED FOR THE LAUNCHERS, THE CONTRACTING OFFICER SIGNED A DETERMINATION OF URGENCY ON MAY 6, 1971, AND AUTHORITY WAS THEREAFTER REQUESTED TO MAKE AN AWARD FOR THE LARGER QUANTITY OF 8,623 UNITS TO STANDARD ARMAMENT, PRIOR TO COMPLETION OF THE CERTIFICATE OF COMPETENCY REVIEW ON J & H SMITH AND RESOLUTION OF THAT FIRM'S PROTEST. IN VIEW OF THE URGENCY, AND SINCE STANDARD ARMAMENT WAS ENTITLED TO THE AWARD FOR THE LARGER QUANTITY IRRESPECTIVE OF WHETHER J & H SMITH WAS DETERMINED TO BE ENTITLED TO THE SECOND AWARD FOR 2,850 UNITS, AUTHORITY TO MAKE THE AWARD TO STANDARD ARMAMENT WAS GRANTED ON MAY 13, 1971, AND THE AWARD WAS MADE THE FOLLOWING DAY.

IN REGARD TO THE SMALLER QUANTITY OF 2,850 UNITS WITH WHICH THIS PROTEST IS CONCERNED, A REVIEW WAS MADE OF THE CONTINUED VALIDITY OF THE REQUIREMENT REPRESENTED BY THIS QUANTITY AND THE CONTRACTING OFFICER REPORTS THE FOLLOWING RESULTS:

"THE INCLOSED AMCPM-RK LETTER (REFERENCE 1.H) TO THIS AGENCY ADVISES THAT THE DECISION TO MAKE TWO AWARDS UNDER THIS SOLICITATION IS CANCELLED, AND THAT THE REMAINING QUANTITY OF 2,850 EACH ITEMS BE COMBINED WITH THE FISCAL YEAR 1972 PROCUREMENT SOLICITATION. FURTHER TELEPHONE INQUIRY WITH THE PROJECT MANAGER'S OFFICE REVEALED THAT DELIVERY OF THE 2,850 EACH ITEMS IS NOT REQUIRED UNTIL MARCH 1972.

"IN VIEW OF THE FOREGOING, AND PURSUANT TO ASPR 2-404.1(B)(VIII) THIS AGENCY PLANS TO PREPARE A CONTRACTING OFFICER'S DETERMINATION TO CANCEL THE SOLICITATION. THIS DETERMINATION WILL BE BASED ON THE FOLLOWING:

A. THE URGENT DELIVERY REQUIREMENT OF THE ITEM BEING PROCURED IS NO LONGER REQUIRED.

B. THE REQUIREMENT TO MAKE TWO AWARDS AS A RESULT OF THE SOLICITATION FOR THE PURPOSE OF MAINTAINING THE DOD PROTECTED BASE HAS BEEN CANCELLED.

C. THE FIRST AWARD UNDER THE SOLICITATION SATISFIES THE NEEDS OF THE CUSTOMERS. DELIVERY OF THE REMAINING 2,850 UNITS UNDER THE SOLICITATION IS NOT REQUIRED AT THIS TIME.

D. THE PROJECT MANAGER HAS ADVISED THAT THE ADDITIONAL COST TO MAINTAIN TWO PRODUCERS IS EXCESSIVE.

E. THE PROJECT MANAGER HAS DIRECTED THAT THE REMAINING 2,850 UNITS BE COMBINED AND AWARDED WITH THE FY72 PROCUREMENT SOLICITATION."

PARAGRAPH 10(B) OF STANDARD FORM 33A INCORPORATED BY REFERENCE IN THE RFP, EXPRESSLY RESERVES TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL OFFERS SUBMITTED UNDER THE RFP AND, IN VIEW OF THE REASONS ADVANCED BY THE CONTRACTING OFFICER FOR CANCELLING THE SECOND INTENDED PROCUREMENT, WE DO NOT BELIEVE THIS OFFICE WOULD BE JUSTIFIED IN OBJECTING TO SUCH ACTION.

WHILE THE CANCELLATION OF THE PROCUREMENT OF THE SMALLER QUANTITY, ON WHICH J & H SMITH WAS THE LOW OFFEROR, IS REGARDED AS RENDERING ITS PROTEST ACADEMIC AND THE MERITS WILL THEREFORE NOT BE CONSIDERED, IT APPEARS THAT THE SCHEDULED PROCUREMENT OF THOSE UNITS FOR MARCH 1972 SHOULD PERMIT THE ALLOWANCE OF ADEQUATE TIME FOR FIRST ARTICLE TESTING AND DELIVERY BY MANUFACTURERS OTHER THAN THE CURRENT PRODUCERS. ACCORDINGLY, WE ARE CALLING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE ARMY TO INSURE THAT THE SOLICITATION IS STRUCTURED IN THE NEXT PROCUREMENT OF THE LAUNCHERS SO AS NOT TO RESTRICT COMPETITION BY PLACING UNDUE TIME REQUIREMENTS ON NEW PROSPECTIVE MANUFACTURERS OF THE ITEM.