B-172959(1), DEC 10, 1971

B-172959(1): Dec 10, 1971

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THE SOLICITATION LISTED THE SALIENT CHARACTERISTICS OF THE "BIG CHIEF" THAT WERE REQUIRED. AMONG WHICH WAS RAM TRAVEL SPEED OF 3-120 IPM. THE MODEL OFFERED BY READ HAD A RAM TRAVEL SPEED OF 0-90 IPM AND ACCEPTANCE OF THAT MODEL WAS A CLEAR DEVIATION FROM STATED REQUIREMENTS. REJECTION OF CARBIDE'S ACTION IS NOT NOW POSSIBLE. CARBIDE'S REIMBURSEMENT WILL BE LIMITED IF. IT IS SHOWN THAT THE "CHIEFTAIN. " WHICH WAS ALSO OFFERED BY PROTESTANT. COULD HAVE BEEN USED AT A SAVING. GAO IS SUGGESTING THAT UPON RECEIPT OF BID PROTESTS. INC.: THIS IS IN REPLY TO YOUR LETTER OF MAY 12. THE AWARD WAS PRECEDED BY A SOLICITATION SPECIFYING CAYUGA'S "BIG CHIEF" MANIPULATOR. FIVE OFFERS WERE RECEIVED AND YOUR OFFER OF $16.

B-172959(1), DEC 10, 1971

BID PROTEST - "BRAND NAME OR EQUAL" - DEVIATION FROM SALIENT CHARACTERISTICS DECISION CONCERNING PROTEST OF CAYUGA MACHINE AND FABRICATING COMPANY, INC., AGAINST AWARD OF CONTRACT TO THE READ CORPORATION, UNDER A SOLICITATION ISSUED BY UNION CARBIDE, ACTING AS PURCHASING AGENT FOR THE ATOMIC ENERGY COMMISSION, FOR WELDING MANIPULATOR, SPECIFYING CAYUGA'S "BIG CHIEF" MANIPULATOR OR EQUAL AS DESIRED MODEL. THE SOLICITATION LISTED THE SALIENT CHARACTERISTICS OF THE "BIG CHIEF" THAT WERE REQUIRED, AMONG WHICH WAS RAM TRAVEL SPEED OF 3-120 IPM. THE MODEL OFFERED BY READ HAD A RAM TRAVEL SPEED OF 0-90 IPM AND ACCEPTANCE OF THAT MODEL WAS A CLEAR DEVIATION FROM STATED REQUIREMENTS. HOWEVER, AS DELIVERY HAS BEEN MADE, REJECTION OF CARBIDE'S ACTION IS NOT NOW POSSIBLE. CARBIDE'S REIMBURSEMENT WILL BE LIMITED IF, AFTER A STUDY OF PROTESTANT'S "CHIEFTAIN" MODEL, IT IS SHOWN THAT THE "CHIEFTAIN," WHICH WAS ALSO OFFERED BY PROTESTANT, COULD HAVE BEEN USED AT A SAVING. IN ADDITION, AS REGARDS FUTURE PROTESTS, GAO IS SUGGESTING THAT UPON RECEIPT OF BID PROTESTS, AEC PRIME CONTRACTORS BE REQUIRED IMMEDIATELY TO SUBMIT SUCH PROTESTS TO THE AEC FOR TIMELY RESOLUTION.

TO CAYUGA MACHINE AND FABRICATING COMPANY, INC.:

THIS IS IN REPLY TO YOUR LETTER OF MAY 12, 1971, PROTESTING THE AWARD OF A CONTRACT TO THE READ CORPORATION (READ), UNDER A SOLICITATION (INQUIRY 7 -87220), ISSUED BY THE UNION CARBIDE CORPORATION (CARBIDE) WHILE ACTING UNDER PRIME CONTRACT NO. W-7405-ENG-26, WITH THE U.S. ATOMIC ENERGY COMMISSION (AEC).

THE RECORD SHOWS THAT CARBIDE AWARDED A CONTRACT TO READ, THE LOWEST OFFEROR, ON FEBRUARY 4, 1971, FOR THE DELIVERY OF A WELDING MANIPULATOR AT A TOTAL FIXED PRICE OF $11,827.38. THE AWARD WAS PRECEDED BY A SOLICITATION SPECIFYING CAYUGA'S "BIG CHIEF" MANIPULATOR, OR EQUAL, AND SETTING OUT CERTAIN SALIENT CHARACTERISTICS OF THIS MODEL. THE SOLICITATION RESERVED THE RIGHT TO NEGOTIATE WITH ANY OR ALL BIDDERS BEFORE MAKING THE AWARD, AS WELL AS THE RIGHT TO MAKE AN AWARD WITHOUT NEGOTIATION ON THE BASIS OF AN ACCEPTABLE PROPOSAL. FIVE OFFERS WERE RECEIVED AND YOUR OFFER OF $16,175 WAS THE FOURTH LOWEST RECEIVED.

IT IS YOUR POSITION THAT THE READ MANIPULATOR IS NOT EQUAL TO THE "BIG CHIEF", AND YOU THEREFORE, SHOULD BE PERMITTED TO COMPETE ON THE BASIS OF RELAXED SPECIFICATIONS, OR CARBIDE SHOULD ACCEPT YOUR OFFER TO PROVIDE YOUR SMALLER "CHIEFTAIN" MODEL, WHICH IS EQUAL TO THE READ MANIPULATOR BUT LESS EXPENSIVE.

THE RECORD IN THIS CASE ESTABLISHES THAT CARBIDE WAS ACTING AS A PURCHASING AGENT FOR THE COMMISSION UNDER AUTHORITY OF PROVISIONS IN ITS PRIME CONTRACT. IN THIS RESPECT, THE SOLICITATION INCORPORATED THE TERMS AND CONDITIONS OF FORM UNC-242, WHICH PROVIDED, IN PART, THAT CARBIDE WAS ACTING FOR AND ON BEHALF OF THE GOVERNMENT; THAT TITLE WOULD PASS DIRECTLY FROM THE SELLER TO THE GOVERNMENT, AS PURCHASER, AT THE POINT OF DELIVERY; AND THAT PAYMENT WOULD BE MADE FROM GOVERNMENT FUNDS AND NOT FROM CARBIDE'S OWN ASSETS. ARTICLE XXXVI OF THE PRIME CONTRACT PROVIDES, IN PART, THAT ARRANGEMENTS FOR THE PROCUREMENT OF SUBCONTRACTS SHALL BE IN SUCH FORM AND CONTAIN SUCH PROVISIONS AS ARE REQUIRED BY THE CONTRACT OR AS THE COMMISSION MAY PRESCRIBE. IN THIS REGARD, AEC HAS ESTABLISHED CERTAIN PROCUREMENT POLICIES FOR ITS COST TYPE CONTRACTORS WHICH ARE FOUND IN PARAGRAPH 9-59.003, TITLE 41, CODE OF FEDERAL REGULATIONS. WITH PERTINENCE TO THIS CASE, SUBPARAGRAPH (B)(1)(IV) PROVIDES FOR THE MAKING OF AN AWARD TO THE PROSPECTIVE CONTRACTOR WHOSE BID OR QUOTATION CONFORMS TO THE SOLICITATION AND SUBPARAGRAPH (B)(2) REQUIRES THE APPLICATION OF FEDERAL PROCUREMENT REGULATION (FPR) 1-3.805. THE LATTER REGULATION PROVIDES, IN PART, THAT WHEN THE PROPOSAL MOST ADVANTAGEOUS TO THE GOVERNMENT INVOLVES A MATERIAL DEPARTURE FROM THE STATED REQUIREMENTS, CONSIDERATION MUST BE GIVEN TO OFFERING THE OTHER FIRMS WHICH SUBMITTED PROPOSALS AN OPPORTUNITY TO SUBMIT NEW PROPOSALS ON A TECHNICAL BASIS WHICH IS COMPARABLE TO THAT OF THE MOST ADVANTAGEOUS PROPOSAL.

WITH RESPECT TO THE ACTION TAKEN IN THIS CASE CARBIDE HAS ADVISED THAT ITS ENGINEERING AND PURCHASING PERSONNEL REVIEWED THE PROPOSALS RECEIVED AND DETERMINED THAT THE MANIPULATOR OFFERED BY READ, THE LOW BIDDER, WAS FUNCTIONALLY EQUIVALENT TO CAYUGA'S "BIG CHIEF" MODEL AND THEREFORE AWARDED THE CONTRACT TO READ WITHOUT FURTHER DISCUSSIONS. THE RECORD SHOWS, HOWEVER, THAT READ'S QUOTATION TOOK EXCEPTION TO AND DEVIATED FROM THE SALIENT CHARACTERISTIC LISTED IN THE SOLICITATION THAT THE RAM TRAVEL SPEED BE 3-120 IPM AND OFFERED INSTEAD A SPEED OF 0 90 IPM.

PURSUANT TO AEC PROCUREMENT REGULATION 9-59.003(D), CARBIDE WAS PERMITTED TO USE BRAND NAME OR EQUAL DESCRIPTIONS PROVIDED THE PHYSICAL, FUNCTIONAL OR OTHER CHARACTERISTICS OF THE BRAND NAME ITEM WHICH WERE DEEMED ESSENTIAL WERE IDENTIFIED AND DESCRIBED. IT IS CLEAR THAT READ'S DEVIATION FROM THE SALIENT CHARACTERISTIC OF THE RAM TRAVEL SPEED LISTED IN THE SOLICITATION WAS A MATERIAL DEPARTURE FROM THE STATED REQUIREMENTS. ACCORDINGLY, WE MUST CONCLUDE THAT CARBIDE FAILED TO COMPLY WITH THE REQUIREMENT IN AECPR 9-59.003(B)(1)(IV) FOR MAKING AN AWARD TO THE PROSPECTIVE CONTRACTOR WHOSE QUOTATION CONFORMED TO THE REQUEST. CARBIDE ALSO FAILED TO OFFER OTHER FIRMS WHICH SUBMITTED PROPOSALS AN OPPORTUNITY TO SUBMIT NEW PROPOSALS ON A TECHNICAL BASIS WHICH WAS COMPARABLE TO THAT OF THE MOST ADVANTAGEOUS PROPOSAL WHICH MATERIALLY DEPARTED FROM THE STATED REQUIREMENTS, AS REQUIRED BY FPR 1 3.805.

WE THEREFORE MUST CONCLUDE THAT THE AWARD TO READ WAS IMPROPER AND UNAUTHORIZED IN THAT NEGOTIATIONS SHOULD HAVE BEEN CONDUCTED TO OBTAIN COMPETITIVE OFFERS FROM OTHER OFFERORS FOR AN ITEM COMPARABLE TO THE READ UNIT. HOWEVER, WE ARE AWARE OF NO LEGAL BASIS TO SUPPORT YOUR POSITION THAT CARBIDE SHOULD AWARD A CONTRACT TO YOUR FIRM ON THE BASIS OF YOUR OFFER TO SUPPLY A "CHIEFTAIN" MODEL AT A LOWER COST THAN THE READ MANIPULATOR, AND SINCE THE GOVERNMENT ACCEPTED DELIVERY OF THE READ MANIPULATOR APPROXIMATELY FOUR MONTHS AGO IT DOES NOT APPEAR THAT IT WOULD BE IN THE GOVERNMENT'S BEST INTERESTS TO RETURN THAT ITEM AND REPROCURE ANOTHER ITEM AT THIS TIME.

IT IS REGRETTABLE THAT THE DECISION AS TO THE IMPROPRIETY OF THE AWARD TO READ COULD NOT BE REACHED AT A TIME WHEN THE SITUATION REASONABLY COULD HAVE BEEN REMEDIED BY DISAVOWING CARBIDE'S ACTIONS AND RESOLICITING OFFERS ON AN EQUAL BASIS FROM ALL INTERESTED OFFERORS. AS A PRACTICAL MATTER, THEREFORE, WE ARE UNABLE TO SUGGEST EFFECTIVE ACTION WHICH WOULD UNDO THE UNFAIR TREATMENT OF COMPETING OFFERORS IN THIS CASE. WITH RESPECT TO THE GOVERNMENT'S RESPONSIBILITY FOR PAYMENT IN THIS MATTER, ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE CHAIRMAN, AEC, WHEREIN WE REQUEST THAT A DETERMINATION BE MADE AS TO WHETHER YOUR "CHIEFTAIN" MODEL WOULD HAVE BEEN ACCEPTABLE, AND, IF SO, TO REIMBURSE CARBIDE IN AN AMOUNT NO GREATER THAN THE COST OF THE "CHIEFTAIN" MODEL, WHICH WE FEEL REPRESENTS THE VALUE OF THE BENEFIT RECEIVED BY THE GOVERNMENT.

IN ADDITION, AS REGARDS FUTURE PROTESTS, WE ARE SUGGESTING THAT UPON RECEIPT OF BID PROTESTS AEC PRIME CONTRACTORS BE REQUIRED IMMEDIATELY TO SUBMIT SUCH PROTESTS TO AEC FOR A TIMELY RESOLUTION OF THE MATTER.