B-180053, APR 4, 1974, 53 COMP GEN 742

B-180053: Apr 4, 1974

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REJECTION OF PROPOSAL OFFERING TO FURNISH NEW FORMER GOVERNMENT SURPLUS VALVES WAS PROPER IN VIEW OF THE FACT THAT THE VALVES NEEDED REPLACEMENT OF RUBBER "O" RINGS WHICH CONSTITUTES REFURBISHMENT AND WOULD THEREFORE REQUIRE PERFORMANCE RETESTING THAT NEITHER AGENCY NOR OFFEROR WAS IN A POSITION TO PERFORM. F41608-74-R-R038 WAS ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION. THESE VALVES WERE TO BE USED IN FUEL TRANSFER IN THE NO. 3 FUEL TANK OF THE F- 106. SURPLUS MATERIAL IS OFFERED IN RESPONSE TO THIS SOLICITATION. OFFERS OF SURPLUS MATERIAL WHERE THE PCO WAS NOT NOTIFIED AT LEAST TEN CALENDAR DAYS PRIOR TO OFFER OPENING DATE MAY BE CONSIDERED NONRESPONSIVE AND MAY NOT BE CONSIDERED FOR AWARD.

B-180053, APR 4, 1974, 53 COMP GEN 742

CONTRACTS - SPECIFICATIONS - "NEW MATERIAL" CLAUSE - EXCEPTION - NEW, UNUSED SURPLUS UNDER SOLICITATION THAT CALLED FOR FURNISHING NEW MANUFACTURED AIRCRAFT SOLENOID VALVES BUT CONTAINED PROVISIONS UNDER WHICH SURPLUS DEALERS COULD PARTICIPATE, REJECTION OF PROPOSAL OFFERING TO FURNISH NEW FORMER GOVERNMENT SURPLUS VALVES WAS PROPER IN VIEW OF THE FACT THAT THE VALVES NEEDED REPLACEMENT OF RUBBER "O" RINGS WHICH CONSTITUTES REFURBISHMENT AND WOULD THEREFORE REQUIRE PERFORMANCE RETESTING THAT NEITHER AGENCY NOR OFFEROR WAS IN A POSITION TO PERFORM.

IN THE MATTER OF D. MOODY & COMPANY, INC., APRIL 4, 1974:

ON JULY 17, 1973, REQUEST FOR PROPOSALS (RFP) NO. F41608-74-R-R038 WAS ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS. THE RFP REQUESTED OFFERS FOR FURNISHING 43 AIRCRAFT SOLENOID VALVES, FSN 2915-814-4439, PADWAY AIRCRAFT PRODUCTS, INC., P/N 20651 OR GENERAL DYNAMICS CORP. P/N 8-00964-1. THESE VALVES WERE TO BE USED IN FUEL TRANSFER IN THE NO. 3 FUEL TANK OF THE F- 106. WHILE THE RFP CALLED FOR FURNISHING NEW MANUFACTURED EQUIPMENT, IT CONTAINED PROVISIONS UNDER WHICH SURPLUS DEALERS COULD PARTICIPATE. THE SOLICITATION CONTAINED THE FOLLOWING PERTINENT PROVISIONS:

C-39. NOTICE TO OFFERORS: (SEE PROVISION IN SECTION B ENTITLED "SURPLUS MATERIAL.")

(A) THIS SOLICITATION HAS BEEN PREPARED TO INCLUDE TERMS AND CONDITIONS WHICH CONTEMPLATE FURNISHING NEW MANUFACTURED ITEMS TO THE GOVERNMENT. THE EVENT NEW, UNUSED, SURPLUS MATERIAL IS OFFERED IN RESPONSE TO THIS SOLICITATION, THE OFFEROR MUST NOTIFY THE PROCURING CONTRACTING OFFICER (PCO), IN WRITING, SEPARATE FROM THE CONTRACTOR'S OFFER, WITHIN A MINIMUM OF TEN CALENDAR DAYS PRIOR TO THE OFFER OPENING DATE SO THE PCO MAY CONSIDER AMENDING THE TERMS AND CONDITIONS OF THE SOLICITATION TO INCLUDE PROVISIONS FOR THE PURCHASE OF SURPLUS MATERIAL. OFFERS OF SURPLUS MATERIAL WHERE THE PCO WAS NOT NOTIFIED AT LEAST TEN CALENDAR DAYS PRIOR TO OFFER OPENING DATE MAY BE CONSIDERED NONRESPONSIVE AND MAY NOT BE CONSIDERED FOR AWARD.

B-29. SURPLUS MATERIAL: (SEE PROVISION IN SECTION C ENTITLED "NOTICE TO OFFERORS.")

CONCURRENT WITH THE NOTIFICATION TO THE PCO THAT SURPLUS MATERIAL IS BEING OFFERED, THE OFFEROR WILL PROVIDE THE FOLLOWING CERTIFICATE (IF THE MATERIAL BEING OFFERED IS FORMER GOVERNMENT SURPLUS, THIS CERTIFICATE MUST BE PROVIDED IN ADDITION TO THE INFORMATION REQUIRED IN ASPR 1-1208, GOVERNMENT SURPLUS):

THE UNDERSIGNED HEREBY CERTIFIES THAT THE MATERIAL TO BE FURNISHED IN RESPONSE TO SOLICITATION (INSERT SOLICITATION NUMBER) WAS MANUFACTURED BY THE ORIGINAL DESIGN MANUFACTURER (AND/OR) HIS APPROVED SOURCE. (INDICATE QUANTITIES OF EACH MANUFACTURER) THIS MATERIAL IS NEW, UNUSED, MEETS APPLICABLE SPECIFICATIONS, AND IS OFFERED WITHOUT REWORK OR REFURBISHMENT OF ANY KIND. THE UNDERSIGNED FURTHER CERTIFIES THAT NO CHANGES HAVE BEEN MADE TO THE MATERIALS BEING OFFERED. ***

THE OPENING DATE FOR THE PROPOSALS WAS AUGUST 16, 1973. THREE OFFERS WERE RECEIVED AT THE FOLLOWING UNIT PRICES:

D. MOODY & CO., INC. $ 89.80

ALAMO AIRCRAFT SUPPLY, INC. (ALAMO) 105.00

PADWAY AIRCRAFT PRODUCTS, INC. (PADWAY) 115.49

IN ITS LETTER OFFER OF AUGUST 10, 1973, MOODY STATED:

THIS BID SUBMITTED IN RESPONSE TO INVITATION FOR BID F41608-74-R R038, OPENING AUGUST 16, 1973, ACKNOWLEDGES AND INCLUDES OUR ACCEPTANCE OF ALL TERMS AND CONDITIONS STATED THEREIN.

OFFER 43 EA. 2915-814-4439 VALVE SOLENOID, P/N 20651 AT $89.80 EA. NEW SURPLUS IN THE ORIGINAL PACK DATED 11/61, CONTRACT NO. AF01(601)38747. OBTAINED FROM AF SURPLUS APPROXIMATELY OCTOBER 1969.

TERMS NET 30 DAYS.

DELIVERY ACCORDING TO "REQUIRED" SCHEDULE.

TERMS AND CONDITIONS CURRENT BOA ACCEPTABLE.

MOODY'S PROPOSAL WAS REJECTED BECAUSE (1) IT DID NOT COMPLY WITH THE SOLICITATION PROVISIONS PERTAINING TO THE 10-DAY WRITTEN NOTIFICATION BY THE OFFEROR WHERE IT WAS OFFERING NEW SURPLUS AND (2) ITS OFFER WAS FOR "NEW SURPLUS IN THE ORIGINAL PACK DATED NOVEMBER 1961" WHICH REQUIRED THE REPLACEMENT OF THE ORIGINAL RUBBER "0" RINGS BECAUSE OF THE AGE OF THE SYNTHETIC RUBBER MATERIALS.

IN THIS CONNECTION, THE AIR FORCE REPORTS THAT MOODY'S PROPOSED REPLACEMENT OF THE RUBBER "0" RING CONSTITUTES REFURBISHMENT OF THE EQUIPMENT WHICH IS PROHIBITED BY THE PROVISIONS OF PARAGRAPH B-29 OF THE RFP. (THE RECORD INDICATES THAT ALAMO'S PROPOSAL ALSO WAS REJECTED BECAUSE THE EQUIPMENT IT OFFERED WOULD REQUIRE REPLACEMENT OF SIMILAR COMPONENTS.)

ON OCTOBER 11, 1973, CONTRACT NO. F41608-74-C-1051 WAS, THEREFORE, AWARDED TO PADWAY.

ALTHOUGH THE RECORD INDICATES THAT MOODY DID NOT COMPLY WITH THE SOLICITATION PROVISIONS PERTAINING TO THE 10-DAY WRITTEN NOTIFICATION, IT APPEARS THAT THE PRIMARY REASON FOR REJECTION OF ITS OFFER WAS THAT IT OFFERED SURPLUS VALVES WHICH REQUIRED REPLACEMENT OF THE RUBBER "0" RINGS. IN THIS REGARD, WE HAVE BEEN INFORMALLY ADVISED OF THE STEPS NECESSARY TO REPLACE THE RUBBER COMPONENT IN QUESTION. THOUGH IT APPEARS THAT THE VALVE DISASSEMBLY AND "0" RING REPLACEMENT PROCESSES ARE SIMPLE TO ACCOMPLISH, THE REASSEMBLY OF THE VALVE TO A .0025-INCH TOLERANCE REQUIRED BY THE AIR FORCE WOULD SEEM TO BE SIGNIFICANTLY MORE DIFFICULT. BY THE VERY NATURE OF THE ITEM AND BECAUSE OF EXACTING PERFORMANCE REQUIREMENTS, PRECISE TESTS ARE REQUIRED OF EVEN NEW PARTS. IT WOULD APPEAR, THEREFORE, TO BE QUITE REASONABLE TO REQUIRE RETESTING OF ALL SUCH CRITICAL ITEMS WHERE THERE EXISTS THE POSSIBILITY THAT THE PART'S PERFORMANCE LEVEL, WITHIN AN ACCEPTABLE RANGE WHEN MANUFACTURED, MAY HAVE BEEN REDUCED BY THE REPLACEMENT OPERATION. PAST REASSEMBLY PROBLEMS ALONE WOULD SEEM TO WARRANT SUCH PRESENT AND FUTURE SCRUTINY.

SINCE THE AGENCY (1) DOES NOT HAVE THE FACILITIES AVAILABLE TO TEST THE VALVES IN QUESTION AND (2) DOUBTS THAT SURPLUS DEALERS, SUCH AS MOODY, ARE LIKEWISE IN A POSITION TO PERFORM SUCH A FUNCTION, WE CAN SEE NO OBJECTION TO ITS REJECTION OF MOODY'S OFFER OF REFURBISHED MATERIAL.

WE WOULD, HOWEVER, SUGGEST TO THE AIR FORCE THAT IT CONSIDER AMENDING THE PROVISIONS OF CLAUSE B-29 TO ALLOW FOR THE ACCEPTANCE OF OFFERS OF REWORKED AND REFURBISHED MATERIAL IF THAT MATERIAL HAS BEEN CERTIFIED (BY MEANS OF ADEQUATE PERFORMANCE TESTING) TO ESSENTIALLY EQUAL THE PERFORMANCE OF NEWLY MANUFACTURED MATERIAL OF THE SAME EXACT TYPE.