B-179212(1), MAR 6, 1974

B-179212(1): Mar 6, 1974

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600 HOT CUPS WAS CANCELLED AND CONTRACT SUBSEQUENTLY AWARDED TO BIDDER SUBMITTING MOST DESIRABLE DELIVERY SCHEDULE UNDER RFP ISSUED UNDER PUBLIC EXIGENCY EXCEPTION. CONTRACTING OFFICER DID NOT ACT ARBITRARILY IN AWARDING WHOLE CONTRACT TO BIDDER WITH MOST DESIRABLE DELIVERY SCHEDULE EVEN THOUGH PARTIAL AWARD COULD HAVE BEEN MADE SINCE RFP CLAUSE PROVIDED THAT IN CASE OF PARTIAL AWARD. INVITATION FOR BIDS (IFB) DSA 400-73-B-9698 WAS ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER. THE SOLICITATION WAS FOR 2. IT MIGHT BE NOTED AT THIS POINT THAT THIS SOLICITATION FOR HOT CUPS BY DSA IS ONE OF SEVERAL OVER THE PAST SEVERAL YEARS IN WHICH ALTON AND STAR HAVE BEEN INVOLVED. ALTON WAS AWARDED A CONTRACT ON SEPTEMBER 29.

B-179212(1), MAR 6, 1974

1. WHERE IFB ISSUED BY DEFENSE SUPPLY AGENCY (DSA) FOR 2,600 HOT CUPS WAS CANCELLED AND CONTRACT SUBSEQUENTLY AWARDED TO BIDDER SUBMITTING MOST DESIRABLE DELIVERY SCHEDULE UNDER RFP ISSUED UNDER PUBLIC EXIGENCY EXCEPTION, ACTION NOT QUESTIONED SINCE GOVERNMENT FACED IMMINENT OUT-OF- STOCK POSITION. 2. CONTRACTING OFFICER DID NOT ACT ARBITRARILY IN AWARDING WHOLE CONTRACT TO BIDDER WITH MOST DESIRABLE DELIVERY SCHEDULE EVEN THOUGH PARTIAL AWARD COULD HAVE BEEN MADE SINCE RFP CLAUSE PROVIDED THAT IN CASE OF PARTIAL AWARD, PRO-RATA DELIVERY SCHEDULE WOULD BE REQUIRED AND SUCH PRO-RATA SCHEDULE WOULD FAIL TO MEET GOVERNMENT URGENCY; HOWEVER, FURTHER PROCUREMENT OF ITEM SHOULD BE ACCOMPLISHED BY FORMAL ADVERTISING RATHER THAN UNDER "OPTION FOR INCREASED QUANTITY" CLAUSE.

TO ALTON IRON WORKS, INC.:

ON MAY 17, 1973, INVITATION FOR BIDS (IFB) DSA 400-73-B-9698 WAS ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA. THE SOLICITATION WAS FOR 2,600 UNITS OF "HOT CUPS, ELECTRIC, AIRCRAFT" AND CALLED FOR DELIVERY OF 1,600 UNITS BY DECEMBER 24, 1973, AND THE REMAINING 1,000 BY JANUARY 15, 1974. THREE BIDDERS RESPONDED TO THE IFB, INCLUDING ALTON IRON WORKS, INC. (ALTON), AND STAR MANUFACTURING COMPANY (STAR).

IT MIGHT BE NOTED AT THIS POINT THAT THIS SOLICITATION FOR HOT CUPS BY DSA IS ONE OF SEVERAL OVER THE PAST SEVERAL YEARS IN WHICH ALTON AND STAR HAVE BEEN INVOLVED. ALTON WAS AWARDED A CONTRACT ON SEPTEMBER 29, 1971, UNDER AN ADVERTISED PROCUREMENT FOR HOT CUPS. IN APRIL OF 1972 ANOTHER IFB WAS ISSUED FOR THE SAME ITEM, BUT AFTER BID OPENING IT WAS DETERMINED THAT THE CUPS ALTON HAD FURNISHED UNDER THE PREVIOUS CONTRACT WERE UNSATISFACTORY DUE TO INADEQUATE SPECIFICATIONS. THE IFB WAS CANCELLED AND A REQUEST FOR PROPOSALS (RFP) WAS ISSUED IN AUGUST OF 1972, IT BEING DETERMINED THAT PROCUREMENT BY COMPETITION WAS NOT FEASIBLE SINCE THERE WAS NO DEFINITIVE SPECIFICATION. THIS CONTRACT WAS AWARDED TO STAR AFTER NEGOTIATION. THIS AWARD WAS UPHELD BY THIS OFFICE IN OUR DECISION B- 177653, JULY 10, 1973. THE SPECIFICATIONS WERE REVISED ON FEBRUARY 8, 1973, AND THEN AGAIN ON APRIL 20, 1973, BEFORE BEING DETERMINED ADEQUATE FOR COMPETITION. THE PRESENT SOLICITATION UTILIZES THESE REVISED SPECIFICATIONS.

AFTER THE PRESENT IFB WAS ISSUED, THE DIRECTORATE OF SUPPLY OPERATIONS, BY INTER-OFFICE MEMORANDUM DATED MAY 21, 1973, REPORTED THAT ONLY 533 UNITS WERE ON HAND, NONE WERE DUE IN UNDER CONTRACT AND THE AVERAGE MONTHLY DEMAND WAS 375 UNITS. THE DIRECTORATE STATED THAT 2,600 UNITS THEN BEING SOLICITED WOULD BE REQUIRED BY JUNE 1, 1973, IN ORDER TO AVOID AN "OUT OF STOCK POSITION AND TO PROVIDE A MINIMUM PIPELINE UNTIL DELIVERY OF ADDITIONAL QUANTITIES UNDER NORMAL PROCUREMENT LEAD TIME PROCEDURES."

IN ORDER TO MEET THE ABOVE SUPPLY REQUIREMENTS, AMENDMENT 0001 TO THE IFB WAS ISSUED WITH AN EFFECTIVE DATE OF JUNE 1, 1973, WHICH CONVERTED THE SOLICITATION FROM A FORMALLY ADVERTISED SOLICITATION TO A NEGOTIATED PROCUREMENT PURSUANT TO A DETERMINATION AND FINDINGS DATED MAY 24, 1973, WHEREIN IT WAS CONCLUDED THAT THE "*** PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING." AMENDMENT 0001 ALSO INCORPORATED THE CLAUSES REQUIRED FOR A NEGOTIATED PROCUREMENT AND ACCELERATED THE DELIVERY SCHEDULE.

BY A SECOND INTER-OFFICE MEMORANDUM DATED JUNE 11, 1973, THE DIRECTORATE OF SUPPLY OPERATIONS UPDATED THE STOCK POSITION OF THE ITEM INDICATING THAT THERE WERE ONLY 400 UNITS ON HAND AND THAT IN ORDER TO AVOID AN OUT- OF-STOCK POSITION AND MAINTAIN A MINIMUM PIPELINE, DELIVERIES WERE REQUIRED BY JULY 15, 1973. ACCORDINGLY, AMENDMENT 0002 WAS ISSUED ON JUNE 16, 1973, WHICH FURTHER SHORTENED THE DELIVERY SCHEDULE TO REQUIRE DELIVERY OF 350 UNITS WITHIN 30 DAYS; 750 UNITS WITHIN 60 DAYS; 750 UNITS WITHIN 90 DAYS; AND 750 UNITS WITHIN 120 DAYS. AMENDMENT 0002 ALSO INCORPORATED CLAUSE C-44, ENTITLED "WAIVER OF FIRST ARTICLE APPROVAL TESTS." JUNE 19, 1973, WAS SET AS THE DATE FOR SUBMISSION OF BEST AND FINAL OFFERS.

THREE OFFERS WERE RECEIVED. ALTON OFFERED TO SUPPLY ALL UNITS AT $20.90 EACH IN ACCORDANCE WITH THE FOLLOWING DELIVERY SCHEDULE:

350 EACH - 30 DAYS AFTER APPROVAL OF FIRST ARTICLE

750 EACH - 60 DAYS AFTER APPROVAL OF FIRST ARTICLE

750 EACH - 90 DAYS AFTER APPROVAL OF FIRST ARTICLE

750 EACH - 120 DAYS AFTER APPROVAL OF FIRST ARTICLE

A TELEPHONE CONVERSATION OF JUNE 27, 1973, BETWEEN THE CONTRACTING OFFICER AND ALTON, CONFIRMED BY ALTON'S TWX OF THE SAME DATE, INDICATED THAT ALTON DID NOT SEEK WAIVER OF THE FIRST ARTICLE TESTING; INTENDED TO EXPRESS ITS DELIVERY PERIODS IN TERMS OF THE NUMBER OF DAYS AFTER APPROVAL OF THE FIRST ARTICLE; AND INCREASED ITS PER UNIT PRICE BY $0.50. ALTON'S TOTAL PRICE (INCLUDING A $1,200 EVALUATION FACTOR FOR COST OF GOVERNMENT FIRST ARTICLE TESTING) WAS $56,561.80.

THE SECOND LOW OFFER OF $58,480.00 WAS SUBMITTED BY STAR. BASING ITS BID UPON WAIVER OF FIRST ARTICLE TESTING, IT OFFERED TO DELIVER ACCORDING TO THE FOLLOWING SCHEDULE:

250 EACH - 15 DAYS AFTER RECEIPT OF ORDER

250 EACH - 30 DAYS AFTER RECEIPT OF ORDER

600 EACH - 120 DAYS AFTER RECEIPT OF ORDER

750 EACH - 130 DAYS AFTER RECEIPT OF ORDER

750 EACH - 140 DAYS AFTER RECEIPT OF ORDER

IN THE TELEPHONE CONVERSATION OF JUNE 27, 1973, ALTON WAS ASKED TO STATE A PRICE BASED ON WAIVER OF FIRST ARTICLE TESTING AND WHETHER IT COULD MEET THE FAVORED DELIVERY SCHEDULE PROPOSED BY STAR. THE RECORD INDICATES THAT ALTON FLATLY REJECTED STAR'S DELIVERY SCHEDULE AS UNREALISTIC AND IMPOSSIBLE TO MEET.

IN LIGHT OF THE MINOR PRICE DIFFERENTIAL, $1,918.20, THE CONTRACT WAS AWARDED TO STAR ON THE BASIS OF ITS BETTER DELIVERY SCHEDULE WHICH WOULD ALLEVIATE THE EXISTING SHORTAGE OF THE ITEM, IN SPITE OF THE FACT THAT NEITHER STAR NOR ANY OTHER OFFEROR MET THE REQUIRED DELIVERY SCHEDULE IN TERMS OF THE OVERALL REQUIREMENT.

ALTON CONTENDS THAT AFTER THE SPECIFICATIONS WERE REVISED AND DEEMED DEFINITIVE, PROCUREMENT BY COMPETITION WAS FEASIBLE AND THAT, THEREFORE, IT WAS IMPROPER TO PROCURE BY NEGOTIATION.

PURSUANT TO THE AUTHORITY OF 10 U.S.C. (U.S.C.) 2304(A)(2) PURCHASES AND CONTRACTS MAY BE NEGOTIATED IF "THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING." ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-202.2 STATES:

"IN ORDER FOR THE AUTHORITY OF THIS PARAGRAPH 3-202 (PUBLIC EXIGENCY) TO BE USED, THE NEED MUST BE COMPELLING AND OF UNUSUAL URGENCY, AS WHEN THE GOVERNMENT WOULD BE SERIOUSLY INJURED, FINANCIALLY OR OTHERWISE, IF THE SUPPLIES OR SERVICES WERE NOT FURNISHED BY A CERTAIN DATE, AND WHEN THEY COULD NOT BE PROCURED BY THAT DATE BY MEANS OF FORMAL ADVERTISING ***."

IT IS TRUE THAT AFTER REVISION OF THE SPECIFICATION ON APRIL 20, 1973, PROCUREMENT BY COMPETITION WAS FEASIBLE. IN FACT, DSA ISSUED IFB DSA 400- 73-B-9698 ON MAY 17, 1973. HOWEVER, INFORMATION RECEIVED SUBSEQUENT TO THE ISSUANCE OF THE IFB INDICATED THAT AN OUT-OF-STOCK POSITION WAS IMMINENT. THE DETERMINATION AND FINDINGS DATED MAY 24, 1973, INDICATED THAT WITHOUT FURTHER PROCUREMENT, AN OUT-OF-STOCK POSITION WOULD BE REACHED BY JUNE 1, 1973. OUR OFFICE IS BOUND BY THESE "FINDINGS" (SEE 51 COMP. GEN. 658 (1972)) AND WE FEEL THAT THEY JUSTIFY THE CONCLUSION THAT THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING.

ALTON ALSO CONTENDS THAT PUBLIC EXIGENCY FLEXIBILITY SHOULD NOT BE SUBSTITUTED FOR PROPER PLANNING OF STOCK LEVELS AND THAT THE PROCUREMENTS COVERED BY ITS PREVIOUS PROTEST (SEE B-177653, JULY 10, 1973) SHOULD HAVE BEEN ADEQUATE.

IN RESPONSE TO THIS CONTENTION, WE NOTE THAT THERE WERE ONLY 400 UNITS IN STOCK AS OF JUNE 11, 1973. DSA'S ADMINISTRATIVE REPORT OF AUGUST 9, 1973, STATES THAT "PROCUREMENTS COVERED BY (ALTON'S) PRIOR PROTEST HAD BEEN CONSUMED." THE DIFFICULTIES ENCOUNTERED IN MAINTAINING STOCK LEVELS ARE UNFORTUNATE, BUT ARE ADEQUATELY EXPLAINED BY THE PERIOD OF TIME REQUIRED TO REVISE THE RELEVANT SPECIFICATIONS. FURTHERMORE, OUR OFFICE HAS HELD THAT THE EXIGENCY EXCEPTION IS AVAILABLE WHENEVER URGENCY REQUIRES AN IMMEDIATE PURCHASE IRRESPECTIVE OF WHETHER THE EMERGENCY COULD OR SHOULD HAVE BEEN FORESEEN. SEE 38 COMP. GEN. 171, 173 (1958).

ALTON FURTHER ALLEGES THAT IT SHOULD HAVE BEEN AWARDED THE CONTRACT BECAUSE IT AGREED TO COMPLY WITH THE REVISED DELIVERY SCHEDULE AS AMENDED IN THE TELEPHONE CONVERSATION OF JUNE 27, 1973. ALTON STATES THAT "*** THE AWARD COULD HAVE BEEN MADE TO OUR COMPANY PROMPTLY SINCE WE WERE THE LOW BIDDER, AND WE WERE IN A POSITION TO MEET THE GOVERNMENT DELIVERY REQUIREMENTS."

WE NOTE IN THIS REGARD THAT THE ADMINISTRATIVE REPORT FROM DSA DATED AUGUST 22, 1973, AND THE TELEPHONE OR VERBAL CONVERSATION RECORD OF JUNE 27, 1973, DO NOT COINCIDE WITH ALTON'S INTERPRETATION OF WHAT TRANSPIRED DURING THE CALL. THE ADMINISTRATIVE REPORT STATES:

"*** SINCE ALTON'S DELIVERY SCHEDULE WAS NOT CLEAR, ALTON WAS REQUESTED TO CLARIFY ITS PROPOSED SCHEDULE - WAS IT SEEKING A WAIVER OF FIRST ARTICLE TESTS - AND WAS GIVEN AN OPPORTUNITY TO MEET THE FAVORED DELIVERY SCHEDULE PROPOSED BY STAR. ALTON REPLIED BY TELEPHONE ON 27 JUNE 1973 STATING THAT IT DID NOT DESIRE WAIVER OF FIRST ARTICLE AND THAT DELIVERY OF 250 UNITS WITHIN 15 DAYS AND 250 UNITS WITHIN 30 DAYS WAS UNREALISTIC."

CLEARLY THERE IS A FACTUAL DISPUTE AS TO WHETHER ALTON AGREED TO THE DELIVERY SCHEDULE PROPOSED IN THE TELEPHONE CONVERSATION. BASED ON THE FOREGOING EVIDENCE OF RECORD, OUR OFFICE CONCLUDES THAT ALTON WAS NOT WILLING OR ABLE TO MEET THE FAVORED DELIVERY SCHEDULE OF STAR WHICH WAS BASED ON WAIVER OF FIRST ARTICLE TESTING.

WE MIGHT POINT OUT HERE THAT WE BELIEVE A WRITTEN AMENDMENT TO THE RFP SHOULD HAVE BEEN ISSUED TO COVER THIS CHANGE IN DELIVERY SCHEDULE. ASPR 3 -505(A) CALLS FOR SUCH A PROCEDURE WHENEVER THE QUANTITIES, SPECIFICATIONS OR DELIVERY SCHEDULES ARE SIGNIFICANTLY CHANGED. ASPR 3 805.4(A) PROVIDES:

"(A) WHEN, EITHER BEFORE OR AFTER RECEIPT OF PROPOSALS, CHANGES OCCUR IN THE GOVERNMENT'S REQUIREMENTS OR A DECISION IS MADE TO RELAX, INCREASE OR OTHERWISE MODIFY THE SCOPE OF THE WORK OR STATEMENT OF REQUIREMENTS, SUCH CHANGE OR MODIFICATION SHALL BE MADE IN WRITING AS AN AMENDMENT TO THE SOLICITATION. WHEN TIME IS OF THE ESSENCE, ORAL ADVICE OF CHANGES MAY BE GIVEN IF (I) THE CHANGES INVOLVED ARE NOT COMPLEX IN NATURE, (II) A RECORD IS MADE OF THE ORAL ADVICE GIVEN, (III) ALL FIRMS TO BE NOTIFIED *** ARE NOTIFIED AS NEAR TO THE SAME TIME AS FEASIBLE, PREFERABLY THE SAME DAY, AND (IV) THE ORAL ADVICE IS PROMPTLY CONFIRMED BY THE WRITTEN AMENDMENT."

HOWEVER, BECAUSE ALTON WAS GIVEN ORAL NOTICE OF THE CHANGE IN DELIVERY REQUIREMENTS AND GIVEN AN OPPORTUNITY TO RESPOND TO THIS CHANGE, OUR OFFICE DOES NOT FEEL THAT THE GOVERNMENT ACTIONS JUSTIFY A LEGAL OBJECTION TO THE AWARD OF THE CONTRACT TO STAR. SEE 49 COMP. GEN. 156 (1969). DO THINK THAT THE ABOVE-NOTED PROCEDURAL DEFICIENCY IS A SERIOUS ONE WHICH SHOULD BE CORRECTED IN THE FUTURE.

ALTON FURTHER CONTENDS THAT BECAUSE OF THE POTENTIAL SAVINGS TO THE GOVERNMENT, ONLY THE PART OF THE CONTRACT NECESSARY TO SERVICE THE URGENT NEED SHOULD HAVE BEEN AWARDED TO STAR, WITH THE BALANCE OF THE CONTRACT GOING TO ALTON IN ORDER TO TAKE ADVANTAGE OF ALTON'S LOWER PRICE.

THIS MANNER OF AWARDING THE CONTRACT COULD HAVE BEEN UTILIZED SINCE THE RFP CONTAINED NO "ALL OR NONE" CLAUSE. HOWEVER, WE NOTE THAT CLAUSE H2 OF THE RFP ENTITLED "TIME OF DELIVERY" PROVIDES THAT:

"(C) IF AWARD IS MADE FOR LESS THAN THE TOTAL QUANTITY OF ANY ITEM OR SUB -ITEM, PRO RATA DELIVERY BASED ON THE APPLICABLE DELIVERY SCHEDULE WILL BE REQUIRED EXCEPT WHEN A SINGLE DELIVERY IS CALLED FOR."

BASED ON THE ABOVE CLAUSE, WE DO NOT FEEL THAT THE CONTRACTING OFFICER ACTED ARBITRARILY IN AWARDING THE ENTIRE CONTRACT TO STAR BASED ON ITS FAVORABLE DELIVERY SCHEDULE, SINCE A PARTIAL AWARD TO STAR WOULD HAVE ENTAILED A PRO-RATA REDUCTION OF ITS DELIVERY SCHEDULE. SUCH A REDUCED DELIVERY SCHEDULE WOULD NOT HAVE SATISFIED THE GOVERNMENT'S URGENT NEED FOR THE ITEM.

A CONTRACTING OFFICER HAS CONSIDERABLE DISCRETION TO DETERMINE THE EXTENT OF NEGOTIATIONS CONSISTENT WITH THE EXIGENCY OF THE SITUATION. 46 COMP. GEN. 600 (1967). FURTHERMORE, OUR OFFICE BELIEVES THAT THE AUTHORITY GRANTED BY 10 U.S.C. 2304(A)(2) TO NEGOTIATE A PROCUREMENT BECAUSE OF THE URGENT IMPORTANCE OF EARLY DELIVERY CONTEMPLATES THE POSSIBILITY OF AWARD TO AN OFFEROR WHO OFFERS THE BEST DELIVERY SCHEDULE EVEN IF HE HAS NOT OFFERED THE BEST PRICE. SEE 46 COMP. GEN. 22 (1966). THEREFORE, WE MUST UPHOLD THE CONTRACTING OFFICER'S DECISION TO AWARD THE ENTIRE CONTRACT TO STAR RATHER THAN MAKING MULTIPLE AWARDS.

ALTON ALSO PROTESTS THE INCLUSION OF AN "OPTION FOR INCREASED QUANTITY" CLAUSE IN THE CONTRACT WHICH ALLOWS THE GOVERNMENT TO INCREASE BY 100 PERCENT ITS PURCHASES OF HOT CUPS FROM STAR. ALTON CONTENDS THAT THIS "ALLOWS THE GOVERNMENT TO ORDER MORE HOT CUPS AT AN EXCESSIVE PRICE BASED ON THE EXIGENCY AWARD WHEN PROPER PLANNING AT THIS TIME CAN ALLOW COMPETITIVE PROCUREMENT."

WE AGREE WITH THIS CONTENTION. 10 U.S.C. 2304(A) STATES IN PERTINENT PART:

"(A) PURCHASES OF AND CONTRACTS FOR PROPERTY OR SERVICES COVERED BY THIS CHAPTER SHALL BE MADE BY FORMAL ADVERTISING IN ALL CASES IN WHICH THE USE OF SUCH METHOD IS FEASIBLE AND PRACTICABLE UNDER THE EXISTING CONDITIONS AND CIRCUMSTANCES."

THE JUSTIFICATION FOR NEGOTIATING THIS PROCUREMENT PURSUANT TO 10 U.S.C. 2304(A)(2) WAS THE IMMINENT THREAT OF STOCK SHORTAGE FACING THE PROCURING ACTIVITY. THE DETERMINATION WAS MADE THAT THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING. THIS PROCUREMENT FOR 2,600 HOT CUPS WAS NEGOTIATED TO MEET THE CRITICAL STOCK SHORTAGE.

WE BELIEVE THAT CONSISTENT WITH THE POLICY SET FORTH IN 10 U.S.C. 2304(A), FURTHER PROCUREMENT OF THE ITEM SHOULD BE ACCOMPLISHED BY MEANS OF FORMAL ADVERTISING RATHER THAN BY EXERCISE OF THE "OPTION FOR INCREASED QUANTITY." WE URGE DSA TO IMMEDIATELY ASSESS ITS FUTURE NEED FOR HOT CUPS IN LIGHT OF THE PRESENT STOCK POSITION AND ANTICIPATED NEEDS IN ORDER TO DETERMINE WHETHER FORMAL ADVERTISING FOR ADDITIONAL HOT CUPS IS FEASIBLE AT THIS TIME. ALTON ALSO TAKES ISSUE WITH THE STATEMENT MADE BY THE CONTRACTING OFFICER REGARDING THE POSSIBILITY OF THE GOVERNMENT EXERCISING ITS ABOVE-MENTIONED OPTION WHEREIN THE OFFICER STATED:

"THE GOVERNMENT'S NEED TO PROCURE ADDITIONAL UNITS WITHIN THE SUCCEEDING MONTHS WILL DEPEND UPON THE PROMPTNESS WITH WHICH THE PROTESTANT REPLACES THE DEFECTIVE UNITS SUPPLIED UNDER ITS PREVIOUS CONTRACT. IF THE UNITS ARE REPLACED IN ACCORDANCE WITH THE AGREEMENT, IT APPEARS UNLIKELY THAT ANY NEED FOR THE OPTION QUANTITIES WILL ARISE."

ALTON CONTENDS THAT THE HOT CUPS TENDERED PURSUANT TO ITS PREVIOUS CONTRACT DID NOT DEVIATE FROM THE SPECIFICATIONS AND THAT ITS AGREEMENT TO REPLACE THE DEFECTIVE HOT CUPS AT NO COST WAS MADE UNDER DURESS. FOR THESE REASONS ALTON CLAIMS THAT IT SHOULD BE AWARDED THE OPTION QUANTITY UNDER THE PRESENT CONTRACT WITH STAR.

IN VIEW OF OUR EARLIER POSITION THAT FUTURE PROCUREMENTS OF HOT CUPS SHOULD BE ACCOMPLISHED BY MEANS OF FORMAL ADVERTISING RATHER THAN BY THE GOVERNMENT'S EXERCISE OF ITS "OPTION FOR INCREASED QUANTITY," WE REJECT ALTON'S PROPOSED REMEDY. NO EVIDENCE HAS BEEN PRESENTED THAT WOULD REQUIRE OUR OFFICE TO DISAGREE WITH THE ADMINISTRATIVE DETERMINATION THAT THE HOT CUPS FURNISHED BY ALTON UNDER THE PREVIOUS CONTRACT WERE UNSATISFACTORY. FURTHERMORE, ON THE BASIS OF THE RECORD BEFORE US, WE FIND NO EVIDENCE OF DURESS IN THE FORMATION OF ALTON'S AGREEMENT WITH THE GOVERNMENT TO REPAIR THE DEFECTIVE HOT CUPS.

ACCORDINGLY, ALTON'S PROTEST IS DENIED.