B-178892, APR 2, 1974

B-178892: Apr 2, 1974

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TESTING OF REPLACEMENT CONTRACTOR'S EQUIPMENT BEFORE DEFAULT OF ORIGINAL CONTRACTOR IS NOT OBJECTIONABLE. WAS NOT STANDARD OFF-SHELF ITEM AND PROCEDURE IS CONTEMPLATED BY FPR. 2. DEFAULTED CONTRACTOR'S PROTEST THAT REPLACEMENT CONTRACTOR'S EQUIPMENT DOES NOT MEET GOVERNMENT SPECIFICATIONS IS FOR CONSIDERATION BY CONTRACTING AGENCY UNDER DISPUTES CLAUSE PROCEDURES IN CONNECTION WITH CHARGES THAT MAY BE MADE BY GOVERNMENT FOR EXCESS COSTS INCURRED IN PURCHASING "SIMILAR SUPPLIES." 3. PROVIDES NO BASIS TO QUESTION AWARD SINCE NOTICE PROVISION IS PROCEDURAL IN NATURE. REQUEST FOR PROPOSALS (RFP) CDPB-73-5 WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) TO PROCURE KEY-TO-DISK-TO TAPE EQUIPMENT FOR USE BY THE SOCIAL SECURITY ADMINISTRATION (SSA).

B-178892, APR 2, 1974

1. TESTING OF REPLACEMENT CONTRACTOR'S EQUIPMENT BEFORE DEFAULT OF ORIGINAL CONTRACTOR IS NOT OBJECTIONABLE, SINCE EQUIPMENT, URGENTLY NEEDED, WAS NOT STANDARD OFF-SHELF ITEM AND PROCEDURE IS CONTEMPLATED BY FPR. 2. DEFAULTED CONTRACTOR'S PROTEST THAT REPLACEMENT CONTRACTOR'S EQUIPMENT DOES NOT MEET GOVERNMENT SPECIFICATIONS IS FOR CONSIDERATION BY CONTRACTING AGENCY UNDER DISPUTES CLAUSE PROCEDURES IN CONNECTION WITH CHARGES THAT MAY BE MADE BY GOVERNMENT FOR EXCESS COSTS INCURRED IN PURCHASING "SIMILAR SUPPLIES." 3. RECEIPT BY GAO OF AGENCY'S WRITTEN FINDING OF URGENCY AFTER AWARD BUT DURING PENDENCY OF PROTEST, THOUGH CONTRARY TO PREAWARD NOTICE PROVISION IN SECTION 20.4, GAO INTERIM BID PROTEST PROCEDURES, PROVIDES NO BASIS TO QUESTION AWARD SINCE NOTICE PROVISION IS PROCEDURAL IN NATURE.

TO INFOREX, INC., AND FOUR-PHASE SYSTEMS, INC.:

ON OCTOBER 6, 1972, REQUEST FOR PROPOSALS (RFP) CDPB-73-5 WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) TO PROCURE KEY-TO-DISK-TO TAPE EQUIPMENT FOR USE BY THE SOCIAL SECURITY ADMINISTRATION (SSA). CONTRACT NO. GS-00C-00059 WAS AWARDED BY GSA UNDER THE ABOVE RFP TO INFOREX, INC. (INFOREX), ON APRIL 18, 1973.

THE CONTRACT PROVIDED FOR A PREDELIVERY DEMONSTRATION BY JUNE 4, 1973. ON THAT DATE, INFOREX FAILED TO SUCCESSFULLY COMPLETE THE DEMONSTRATION AND ITS RIGHT TO PROCEED UNDER THE CONTRACT WAS TERMINATED FOR DEFAULT ON JUNE 11, 1973. ON JUNE 12, 1973, INFOREX FILED A PROTEST WITH OUR OFFICE AGAINST AWARD OF A REPLACEMENT CONTRACT TO FOUR-PHASE SYSTEMS, INC. (FOUR- PHASE).

THEREAFTER, A DETERMINATION OF URGENCY WAS MADE BY GSA AND ON JUNE 18, 1973, CONTRACT GS-00C-00076 WAS AWARDED FOR THE PURCHASE OF THE EQUIPMENT FROM FOUR-PHASE AGAINST THE ACCOUNT OF INFOREX.

THE BASIS OF THE INFOREX PROTEST IS THAT:

1. GSA COMMITTED ITSELF TO REPROCURE THE EQUIPMENT FROM FOUR-PHASE PRIOR TO ANY DEFAULT BY INFOREX AND HAS REFUSED TO PROVIDE DOCUMENTATION TO THAT EFFECT;

2. FOUR-PHASE WAS NOT REQUIRED TO MEET THE SAME STANDARDS OF PERFORMANCE AS INFOREX; AND

3. GSA FAILED TO PROVIDE OUR OFFICE WITH PRIOR WRITTEN NOTICE THAT AWARD WOULD BE MADE TO FOUR-PHASE PRIOR TO RESOLUTION OF THE PROTEST.

CONCERNING THE FIRST CONTENTION, ACCORDING TO INFORMATION FURNISHED BY GSA, INFOREX, ON MAY 29 AND 30, 1973, SENT LETTERS TO GSA REQUESTING AN EXTENSION OF THE DATE OF THE PREDELIVERY DEMONSTRATION TO AUGUST 15, 1973, TO ALLOW TIME FOR INFOREX TO COMPLETE WORK ON PORTIONS OF THE SOFTWARE REQUIREMENTS. THIS REQUEST WAS DENIED. HOWEVER, DUE TO THE DOUBT RAISED BY THE LETTERS THAT INFOREX WOULD BE ABLE TO PASS THE DEMONSTRATION ON JUNE 4, 1973, ARRANGEMENTS WERE MADE BY SSA TO HAVE FOUR-PHASE DEMONSTRATE ITS EQUIPMENT ON JUNE 6-7.

REGARDING THE MATTER OF FOUR-PHASE PERFORMING THE DEMONSTRATION PRIOR TO THE DEFAULT OF INFOREX ON JUNE 11, IN SUPPORT OF THAT POSITION GSA HAS RELIED UPON SECTIONS 1-8.602-3(C)(3) AND (4) OF THE FEDERAL PROCUREMENT REGULATIONS WHICH PROVIDE:

"(C) THE CONTRACTING OFFICER SHALL CONSIDER THE FOLLOWING FACTORS IN DETERMINING WHETHER TO TERMINATE A CONTRACT FOR DEFAULT:

(3) THE AVAILABILITY OF THE SUPPLIES OR SERVICES FROM OTHER SOURCES;

(4) THE URGENCY OF THE NEED FOR THE SUPPLIES OR SERVICES AND THE PERIOD OF TIME WHICH WOULD BE REQUIRED TO OBTAIN THE SUPPLIES OR SERVICES FROM OTHER SOURCES AS COMPARED WITH THE TIME IN WHICH DELIVERY COULD BE OBTAINED FROM THE DELINQUENT CONTRACTOR; ***."

AS THE ITEM BEING PROCURED WAS NOT A STANDARD "OFF THE SHELF" ITEM AND THERE WAS AN URGENT NEED FOR THE EQUIPMENT, WE CAN APPRECIATE THE NEED FOR THE TESTING OF ANOTHER SOURCE BEFORE INITIATING A DEFAULT ACTION. THEREFORE, IN THE CIRCUMSTANCES, WE PERCEIVE NO BASIS FOR ANY OBJECTION BY OUR OFFICE TO THE PROCEDURE USED BY GSA IN THE INSTANT CASE.

MOREOVER, GSA HAS INDICATED THAT INFOREX HAS BEEN PROVIDED COPIES OF ALL CORRESPONDENCE, MEMORANDA, BILLS OF LADING AND DOCUMENTATION REGARDING OR REFERRING TO COMMUNICATIONS BETWEEN FOUR-PHASE AND THE GOVERNMENT AND THAT THERE IS NO OTHER DOCUMENTATION. THEREFORE, ALTHOUGH INFOREX POINTS OUT THAT THE ADMINISTRATIVE REPORT INDICATES THAT THERE WERE COMMUNICATIONS WITH FOUR-PHASE OTHER THAN THAT FOR WHICH IT WAS PROVIDED DOCUMENTATION, SUCH COMMUNICATIONS WERE NOT IN WRITING. THUS, IT APPEARS THAT GSA HAS PROVIDED INFOREX WITH ALL THE DOCUMENTATION THAT EXISTS ON THE COMMUNICATIONS.

FURTHER, AS TO THE SECOND BASIS OF THE INFOREX PROTEST, INFOREX HAS NOT PROVIDED ANY PROOF THAT THE REPLACEMENT EQUIPMENT FURNISHED BY FOUR PHASE WAS NOT REQUIRED TO MEET THE SAME STANDARDS OF PERFORMANCE AS THE INFOREX EQUIPMENT. IN ANY EVENT, SUCH DETERMINATION IS FOR CONSIDERATION BY CONTRACTING AGENCY UNDER THE INFOREX CONTRACT DISPUTE CLAUSE PROCEDURES IN CONNECTION WITH ANY CHARGES THAT MAY BE MADE BY THE GOVERNMENT FOR EXCESS COSTS INCURRED IN PURCHASING "SIMILAR SUPPLIES."

THE FINAL BASIS OF THE INFOREX PROTEST IS THAT GSA FAILED TO COMPLY WITH SECTION 20.4 OF THE INTERIM BID PROTEST PROCEDURES AND STANDARDS WHICH PROVIDES:

"WHEN NOTICE IS GIVEN THE AGENCY THAT A PROTEST HAS BEEN FILED WITH THE GENERAL ACCOUNTING OFFICE, AWARD SHALL NOT BE MADE PRIOR TO A RULING ON THE PROTEST BY THE COMPTROLLER GENERAL, UNLESS THERE HAS FIRST BEEN FURNISHED TO THE GENERAL ACCOUNTING OFFICE A WRITTEN FINDING BY THE HEAD OF THE AGENCY, HIS DEPUTY, OR AN ASSISTANT SECRETARY (OR EQUIVALENT), SPECIFYING THE FACTORS WHICH WILL NOT PERMIT A DELAY IN THE AWARD UNTIL ISSUANCE OF A RULING BY THE COMPTROLLER GENERAL."

GSA DID NOT FURNISH A WRITTEN FINDING OF URGENCY TO OUR OFFICE PRIOR TO THE AWARD TO FOUR-PHASE. HOWEVER, BEFORE AWARD, A WRITTEN FINDING OF URGENCY PREPARED BY THE CONTRACTING OFFICER WAS APPROVED BY A GSA ASSISTANT GENERAL COUNSEL AND THE ASSISTANT COMMISSIONER, AUTOMATED DATA MANAGEMENT SERVICE. ON JUNE 18, 1973, OUR OFFICE WAS ADVISED OF THE FINDING INFORMALLY. A WRITTEN COPY OF THE FINDINGS WAS RECEIVED ON JUNE 21. ALTHOUGH THE RECEIPT OF THE WRITTEN FINDING AFTER THE AWARD OF THE CONTRACT DID NOT COMPLY LITERALLY WITH SECTION 20.4, SUCH LATE RECEIPT WAS A PROCEDURAL DEFECT WHICH DID NOT CONSTITUTE A BASIS FOR DISTURBING THE AWARD. B-176692, DECEMBER 27, 1973.