B-180110, FEB 22, 1974

B-180110: Feb 22, 1974

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SPECIFICATION REQUIREMENT THAT BIDDER'S EQUIPMENT HAVE BEEN IN SATISFACTORY CUSTOMER USE FOR AT LEAST ONE YEAR COULD BE SATISFIED BY SATISFACTORY PERFORMANCE PREDATING PERFORMANCE UNDER A CURRENT CONTRACT. PROTESTER'S ALLEGATIONS OF UNSATISFACTORY USE UNDER THE CURRENT CONTRACT WERE NOT SUBSTANTIATED AND WERE DENIED BY THE CONTRACTING AGENCY. 2. TO RESDEL ENGINEERING CORP.: THE PROTESTING CONCERN WAS THE SECOND LOW AGGREGATE BIDDER UNDER INVITATION FOR BIDS NO. SUBCONTRACTORS AND MANUFACTURERS OF THE EQUIPMENT OFFERED IN THE BID MUST HAVE HAD A QUANTITY OF THE TYPE OF EQUIPMENT IN SATISFACTORY CUSTOMER USE FOR AT LEAST ONE YEAR. IT WAS THE EXPRESS INTENTION OF THIS REQUIREMENT TO ESTABLISH THE ACCEPTABILITY AND PROVEN RELIABILITY OF THE SYSTEM OFFERED RATHER THAN THE ACCEPTABILITY OR QUALIFICATIONS OF THE CONTRACTOR.

B-180110, FEB 22, 1974

1. SPECIFICATION REQUIREMENT THAT BIDDER'S EQUIPMENT HAVE BEEN IN SATISFACTORY CUSTOMER USE FOR AT LEAST ONE YEAR COULD BE SATISFIED BY SATISFACTORY PERFORMANCE PREDATING PERFORMANCE UNDER A CURRENT CONTRACT. PROTESTER'S ALLEGATIONS OF UNSATISFACTORY USE UNDER THE CURRENT CONTRACT WERE NOT SUBSTANTIATED AND WERE DENIED BY THE CONTRACTING AGENCY. 2. AN INVITATION REQUEST FOR AN AGGREGATE BID COVERING ALL INDIVIDUAL ITEMS CANNOT REASONABLY BE CONSTRUED AS LIMITING THE AMOUNT OF SUCH BID TO THE SUM TOTAL OF THE PRICES BID ON THE INDIVIDUAL ITEMS AND THEREBY PRECLUDE BIDDING A MORE ADVANTAGEOUS PRICE FOR THE TOTALITY OF ITEMS.

TO RESDEL ENGINEERING CORP.:

THE PROTESTING CONCERN WAS THE SECOND LOW AGGREGATE BIDDER UNDER INVITATION FOR BIDS NO. CO-7-74, ISSUED SEPTEMBER 21, 1973 BY THE UNITED STATES IMMIGRATION AND NATURALIZATION SERVICE, WASHINGTON, D.C. THE SUBJECT IFB SOUGHT BIDS FOR THE SUPPLY, INSTALLATION AND PLACEMENT INTO OPERATION OF INTRUSION ALARM SYSTEMS IN THE EL PASO, MARFA AND MCALLEN, TEXAS BORDER PATROL SECTORS.

THE SPECIFICATIONS REQUIRED THAT, AS A MATTER OF BID RESPONSIVENESS, THE CONTRACTOR, SUBCONTRACTORS AND MANUFACTURERS OF THE EQUIPMENT OFFERED IN THE BID MUST HAVE HAD A QUANTITY OF THE TYPE OF EQUIPMENT IN SATISFACTORY CUSTOMER USE FOR AT LEAST ONE YEAR. IT WAS THE EXPRESS INTENTION OF THIS REQUIREMENT TO ESTABLISH THE ACCEPTABILITY AND PROVEN RELIABILITY OF THE SYSTEM OFFERED RATHER THAN THE ACCEPTABILITY OR QUALIFICATIONS OF THE CONTRACTOR.

IN ADDITION, THE SPECIFICATIONS INCLUDED GUARANTEE PROVISIONS UNDER WHICH THE CONTRACTOR WAS REQUIRED TO REMEDY DEFECTIVE MATERIAL, WORKMANSHIP AND/OR DESIGN FOR THE PERIOD OF ONE YEAR OF OPERATION OR TWO YEARS FROM DATE OF DELIVERY, WHICHEVER OCCURRED FIRST, AT NO COST TO THE GOVERNMENT. VACUUM TUBES, HOWEVER, WERE GUARANTEED FOR ONLY 90 DAYS. IN ADDITION, IF A PARTICULAR CIRCUIT OR COMPONENT FAILED MORE THAN TEN TIMES IN ANY OR ALL EQUIPMENT, OR MORE THAN THREE TIMES IN A SINGLE PIECE OF EQUIPMENT WHEN OPERATED IN ACCORDANCE WITH THE SUPPLIER'S INSTRUCTIONS, THE FAILURE WAS TO BE ATTRIBUTED TO A DEFECTIVE DESIGN. IN SUCH CIRCUMSTANCES THE CONTRACTOR WAS REQUIRED TO CORRECT THE DEFECTIVE DESIGN AND APPLY THE REMEDY TO ALL EQUIPMENT SUBJECT TO THE SAME FAILURE, AT NO COST TO THE GOVERNMENT. THE CONTRACTOR WOULD BE DEEMED TO BE IN DEFAULT FOR FAILURE TO REMEDY A DEFECTIVE DESIGN AFTER DUE NOTIFICATION.

IT IS RESDEL'S CONTENTION THAT THE EQUIPMENT OFFERED BY TELEDYNE GEOTECH, THE LOW BIDDER, DOES NOT COMPLY WITH THE REFERENCED SPECIFICATION REQUIRING SATISFACTORY CUSTOMER USE FOR AT LEAST ONE YEAR. IT IS ALLEGED THAT THE EQUIPMENT FURNISHED TO THE GOVERNMENT BY THE LOW OFFEROR UNDER A PRIOR SIMILAR CONTRACT (CO-16-72) EXPERIENCED NUMEROUS FAILURES DUE TO DEFECTIVE DESIGN, MATERIAL AND/OR WORKMANSHIP. RESDEL STATES THAT THE GOVERNMENT INVOKED THE REFERENCED GUARANTEE CLAUSE AND REQUIRED THE RETURN OF EVERY SUCH PIECE OF EQUIPMENT FOR REDESIGN.

THE CONTRACTING AGENCY REPORTS THAT THE SIMILAR EQUIPMENT FURNISHED UNDER CONTRACT CO-16-72 HAS YET TO COMPLETE ONE YEAR OF SERVICE, AND THERE HAVE BEEN MINOR PROBLEMS WITH INDIVIDUAL PIECES OF EQUIPMENT. IN ADDITION, THE CONTRACTOR REQUESTED PERMISSION TO CHECK ALL LIKE ITEMS, AT HIS EXPENSE, TO INSURE THAT MAJOR PROBLEMS WOULD NOT ENSUE. THE PROCURING ACTIVITY STATES THAT THE GUARANTEE CLAUSE HAS NOT BEEN INVOKED, AND THAT THE EVALUATION OF THE SYSTEM TO DATE BY AGENCY TECHNICAL PERSONNEL INDICATES THAT IT HAS BEEN SATISFACTORY. IT IS ALSO REPORTED THAT THE PROCURING ACTIVITY DID NOT RELY UPON THE EQUIPMENT FURNISHED UNDER THE ABOVE- REFERENCED PRIOR CONTRACT TO ESTABLISH COMPLIANCE WITH THE SPECIFICATION REQUIRING ONE YEAR OF SATISFACTORY CUSTOMER USE. INSTEAD, IT WAS DETERMINED THAT THE REQUIREMENT WAS FULFILLED BY VIRTUE OF THE FACT THAT THE EQUIPMENT OFFERED BY THE LOW BIDDER HAD MET A SIMILAR SPECIFICATION REQUIREMENT OF SATISFACTORY USE PRIOR TO THE AWARD OF CONTRACT CO-16-72. IT WAS UPON THIS BASIS THAT THE PROCURING ACTIVITY CONSIDERED THE ONE YEAR SATISFACTORY USE REQUIREMENT TO HAVE BEEN FULFILLED WITH REGARD TO THE INSTANT INVITATION.

IN 48 COMP. GEN. 291 (1968) WE HELD THAT A SOLICITATION REQUIREMENT RELATING TO THE PAST OPERATING EXPERIENCE OF ITEMS OFFERED IS JUSTIFIED WHERE PROVEN RELIABILITY OF THE ITEM IS CRITICAL. IN SUCH CIRCUMSTANCES, A REQUIREMENT FOR PAST OPERATING EXPERIENCE GOES TO THE RESPONSIVENESS OF THE BID.

IT HAS BEEN THE LONG-STANDING POSITION OF THIS OFFICE THAT THE DRAFTING OF SPECIFICATIONS AND THE FACTUAL DETERMINATION WHETHER THE ITEMS OFFERED MEET THOSE SPECIFICATIONS, IS THE PREROGATIVE OF THE CONTRACTING AGENCY. 17 COMP. GEN. 554, 557 (1938). THE FACTUAL ALLEGATIONS RAISED BY RESDEL REGARDING THE NONSATISFACTORY USE OF THE LOW BIDDER'S EQUIPMENT HAVE NOT BEEN SUBSTANTIATED AND HAVE BEEN CONTRADICTED BY THE ACTIVITY USING THE EQUIPMENT IN QUESTION. IN SUCH CIRCUMSTANCES WE FIND INSUFFICIENT CAUSE TO QUESTION THE POSITION TAKEN BY THE PROCURING ACTIVITY THAT THE LOW BIDDER SATISFIED THE REQUIREMENT FOR PRIOR "SATISFACTORY CUSTOMER USE" BY VIRTUE OF THE COMPANY'S PERFORMANCE RENDERED PRIOR TO ITS PERFORMANCE UNDER CONTRACT CO-16-72.

IN ITS LETTER OF JANUARY 18, 1974, RESDEL CONTENDS FOR THE FIRST TIME THAT IT IS THE LOWEST BIDDER SINCE EACH OF ITS SEPARATE BIDS FOR INDIVIDUAL LOCATIONS WAS LOWER THAN TELEDYNE'S BIDS FOR THE INDIVIDUAL SYSTEMS. THIS INVITATION, HOWEVER, PROVIDED FOR AN AGGREGATE BID AS A SEPARATE ITEM. WHILE TELEDYNE'S AGGREGATE BID WAS THE LOWEST AND MOST ADVANTAGEOUS TO THE GOVERNMENT, RESDEL'S AGGREGATE BID REPRESENTED A MERE REITERATION OF ITS BID PRICES FOR EACH SYSTEM. RESDEL ARGUES THAT TELEDYNE'S LOWER AGGREGATE BID WAS NOT IN STRICT ACCORDANCE WITH THE MEANING OF THE TERM "AGGREGATE" WHICH IT CONSTRUED AS RESTRICTING THE BID TO THE SUM OF THE INDIVIDUAL ITEM.

IN OUR OPINION IT IS OBVIOUS THAT THE PURPOSE FOR PROVIDING IN THE INVITATION FOR AN AGGREGATE BID FOR ALL THE ITEMS TO BE SUPPLIED WAS TO OBTAIN A MORE ADVANTAGEOUS PRICE FOR THE TOTAL QUANTITY. WE DO NOT BELIEVE RESDEL WAS MISLED IN THIS REGARD. IT IS ELEMENTAL THAT AWARDS OF GOVERNMENT CONTRACTS ARE TO BE MADE ON THE BASIS OF THE BID MOST ADVANTAGEOUS TO THE GOVERNMENT. SEE 41 U.S.C. 253(B) AND FEDERAL PROCUREMENT REGULATIONS 1-2.407. AS WITH A SIMILAR FORM OF QUALIFIED BID, THE "ALL-OR-NONE" BID, WE HAVE CONSISTENTLY HELD THAT IN THE ABSENCE OF A PROVISION IN THE INVITATION TO THE CONTRARY, SUCH A BID IS RESPONSIVE AND MUST BE ACCEPTED IF IT OFFERS THE LOWEST AGGREGATE PRICE. 47 COMP. GEN. 658, 661 (1968).

ACCORDINGLY, THE PROTEST IS DENIED.