B-180301, MAR 26, 1974

B-180301: Mar 26, 1974

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ALLEGATION THAT INSERTION OF NOTE IN PARAGRAPH OF IFB REGARDING REDUCTION OF CONTRACT PRICE FOR WAIVER OF PREPRODUCTION TESTING RENDERS BID NONRESPONSIVE FOR FAILURE TO SUBMIT FIRM BID IS REJECTED BECAUSE NOTE REFERRED TO ANOTHER PORTION OF IFB WHICH HAD NO BEARING ON PREPRODUCTION TESTING OR PRICE FOR WAIVER THEREOF. 2. DETERMINATION OF RESPONSIBILITY OF PROSPECTIVE CONTRACTOR IS PRIMARILY WITHIN THE PROVINCE OF THE PROCURING ACTIVITY AND WILL NOT BE OBJECTED TO BY GAO ABSENT SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS FOR THE DETERMINATION. AWARD TO LOW BIDDER DETERMINED TO BE RESPONSIBLE IS PROPER NOTWITHSTANDING CONTENTIONS THAT LOW PRICE REVEALS LACK OF UNDERSTANDING OF SPECIFICATIONS AND THAT LOW BIDDER NEVER MADE SIMILAR ITEM. 3.

B-180301, MAR 26, 1974

1. ALLEGATION THAT INSERTION OF NOTE IN PARAGRAPH OF IFB REGARDING REDUCTION OF CONTRACT PRICE FOR WAIVER OF PREPRODUCTION TESTING RENDERS BID NONRESPONSIVE FOR FAILURE TO SUBMIT FIRM BID IS REJECTED BECAUSE NOTE REFERRED TO ANOTHER PORTION OF IFB WHICH HAD NO BEARING ON PREPRODUCTION TESTING OR PRICE FOR WAIVER THEREOF. 2. DETERMINATION OF RESPONSIBILITY OF PROSPECTIVE CONTRACTOR IS PRIMARILY WITHIN THE PROVINCE OF THE PROCURING ACTIVITY AND WILL NOT BE OBJECTED TO BY GAO ABSENT SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS FOR THE DETERMINATION. THUS, AWARD TO LOW BIDDER DETERMINED TO BE RESPONSIBLE IS PROPER NOTWITHSTANDING CONTENTIONS THAT LOW PRICE REVEALS LACK OF UNDERSTANDING OF SPECIFICATIONS AND THAT LOW BIDDER NEVER MADE SIMILAR ITEM. 3. ACCELERATED DELIVERY SCHEDULE WHICH THIRD LOW BIDDER CONTENDS WOULD RESULT IN SAVINGS TO GOVERNMENT THROUGH EARLIER CONTRACT COMPLETION IS NOT FOR CONSIDERATION, SINCE IFB DID NOT REQUIRE SEPARATE PRICES FOR ACCELERATED DELIVERY; CLAIMED SAVINGS ARE CONJECTURAL AND COST FACTORS WHICH ARE NOT DETERMINABLE WITH REASONABLE CERTAINTY ARE NOT TO BE USED IN EVALUATING BIDS.

TO ALLIS-CHALMERS CORPORATION:

THE UNITED STATES ARMY TROOP SUPPORT COMMAND, ST. LOUIS, MISSOURI, ISSUED INVITATION FOR BIDS (IFB) DAAK01-74-B-2440 FOR 24 FORKLIFT TRUCKS IN ACCORDANCE WITH A MILITARY SPECIFICATION AS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT. THE FOLLOWING BIDS WERE SUBMITTED IN RESPONSE TO THE IFB:

COCHRAN WESTERN CORPORATION $4,155,685

ELWELL-PARKER ELECTRIC COMPANY

(DOMESTIC) $4,845,490

(ENGLAND) $4,400,338

ALLIS-CHALMERS CORPORATION

(DOMESTIC) $6,356,402

(ENGLAND) $4,665,199

ALLIS-CHALMERS, THE THIRD LOW BIDDER, CONTENDS THAT THE LOW BID OF COCHRAN WESTERN CORPORATION (COCHRAN-WESTERN) IS NONRESPONSIVE FOR FAILING TO PROVIDE A FIRM PRICE BY MODIFYING A SECTION OF THE IFB DEALING WITH THE TEST REQUIREMENTS OF THE PREPRODUCTION MODEL. AMONG OTHER THINGS, THE SECTION REQUIRED THE CONTRACTOR TO PROVIDE TECHNICAL ASSISTANCE AT THE GOVERNMENT PREPRODUCTION MODEL TESTING SITE. THE SECTION CONTAINED A BLANK FOR INSERTING AN AMOUNT BY WHICH THE CONTRACT PRICE WOULD BE REDUCED IF PREPRODUCTION TESTING WERE WAIVED BY THE GOVERNMENT. COCHRAN-WESTERN INSERTED IN THIS BLANK "SEE NOTE" AND AT THE BOTTOM OF THE PAGE TYPED THE FOLLOWING:

"NOTE: THE CONTRACT PRICE WOULD BE REDUCED BY $158.00 PER MAN DAY FOR EACH MAN DAY OF TECHNICAL ASSISTANCE UNDER THE 60 MAN DAYS NOT REQUESTED BY THE GOVERNMENT (DATA ITEM A004)."

DATA ITEM A004 (A LINE ITEM IN THE BIDDING SCHEDULE) IS THE REQUIREMENT FOR THE FURNISHING OF TECHNICAL ASSISTANCE BY THE CONTRACTOR AFTER THE EQUIPMENT IS DELIVERED INTO THE SYSTEM FOR 30 MAN DAYS IN THE CONTINENTAL UNITED STATES AND 30 MAN DAYS (FOR A TOTAL OF 60 MAN DAYS) OUTSIDE THE UNITED STATES. DATA ITEM A004 BEARS NO RELATION TO THE TECHNICAL ASSISTANCE REQUIRED TO BE GIVEN BY THE CONTRACTOR DURING PREPRODUCTION TESTING, OR, FOR THAT MATTER, TO ANY ASPECT OF THE PREPRODUCTION TESTING PROCESS. THEREFORE, THE NOTE INSERTED BY COCHRAN-WESTERN IS NOT RESPONSIVE TO THE GOVERNMENT'S REQUEST FOR A CONTRACT PRICE REDUCTION INCIDENT TO A POSSIBLE WAIVER OF PREPRODUCTION TESTING. IN THESE CIRCUMSTANCES, THE BID SHOULD BE CONSTRUED AS FAILING TO INSERT A PRICE REDUCTION, AND, ACCORDING TO THE TERMS OF THE IFB, NO REDUCTION IS OFFERED FOR WAIVER. IN VIEW THEREOF, THE INSERTION OF THE NOTE DID NOT DETRACT FROM THE FIRM PRICES OFFERED BY COCHRAN-WESTERN IN THE BIDDING SCHEDULE. IN ANY EVENT, THE ARMY HAS ADVISED THAT PREPRODUCTION TESTING WILL BE REQUIRED OF COCHRAN-WESTERN AND, CONSEQUENTLY, THE EFFECT OF COCHRAN- WESTERN'S RESPONSES TO THE WAIVER PROVISION ARE ACADEMIC.

ALLIS-CHALMERS ALLEGES THAT THE LOW PRICE OF COCHRAN-WESTERN RAISES DOUBT AS TO WHETHER IT UNDERSTOOD THE SIGNIFICANT ASPECTS OF THE SPECIFICATIONS. ALL THREE PROPOSALS WERE EVALUATED UNDER THE FIRST STEP OF THE PROCUREMENT AND FOUND TECHNICALLY ACCEPTABLE. THE TRIP REPORT OF THE TECHNICAL EVALUATORS DATED OCTOBER 16, 1973, SUMMARIZING THE TECHNICAL DISCUSSIONS WITH ALL THREE OFFERORS, STATED THAT "EACH MANUFACTURER HAS A GOOD UNDERSTANDING OF THE PERFORMANCE REQUIREMENTS OF THIS SPECIFICATION AND THEIR TECHNICAL APPROACH IS ADEQUATE."

ALLIS-CHALMERS PROTESTS THE FINDING THAT COCHRAN-WESTERN IS A RESPONSIBLE BIDDER CONTENDING THAT THE RESPONSIBILITY PROVISIONS CONTAINED IN PART 9 OF SECTION 1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WERE NOT FOLLOWED IN REACHING THIS FINDING. A REVIEW OF THE RECORD BEFORE OUR OFFICE SHOWS THAT A PREAWARD SURVEY WAS CONDUCTED ON COCHRAN-WESTERN IN COMPLIANCE WITH THE RELEVANT PORTIONS OF ASPR AND RECOMMENDED COMPLETE AWARD TO THE FIRM. IN THIS REGARD, THE DETERMINATION CONCERNING THE QUALIFICATIONS OR RESPONSIBILITY OF PROSPECTIVE CONTRACTORS IS PRIMARILY FOR RESOLUTION BY THE CONTRACTING AGENCY AND WHERE, AS HERE, THERE IS NO SHOWING THAT THE DETERMINATION RESULTED FROM AN ABUSE OF ADMINISTRATIVE DISCRETION, OUR OFFICE IS NOT JUSTIFIED IN OBJECTING THERETO.

A FURTHER CONTENTION OF ALLIS-CHALMERS IS THAT COCHRAN-WESTERN HAS NEVER MADE THE ITEM BEING PROCURED OR ONE SIMILAR TO IT AND THE EFFECT OF AWARDING THE CONTRACT TO COCHRAN-WESTERN IS TO MAKE IT A RESEARCH AND DEVELOPMENT CONTRACT REQUIRING MORE STRINGENT STANDARDS OF CONTRACTOR RESPONSIBILITY. IN HIS REPORT TO OUR OFFICE ON THE PROTEST, THE CONTRACTING OFFICER ADEQUATELY ANSWERS THIS CONTENTION BY STATING THAT THE BASIC ITEM IS AVAILABLE FROM SEVERAL SOURCES COMMERCIALLY AND THE MODIFICATIONS THAT ARE NECESSARY TO COMPLY WITH THE SPECIFICATIONS ARE OF A DESIGN ENGINEERING NATURE AND DO NOT INVOLVE RESEARCH AND DEVELOPMENT.

THE PROTESTER CONTENDS THAT ITS BID IS LOW IF THE GOVERNMENT TAKES INTO CONSIDERATION THE ACCELERATED DELIVERY SCHEDULE OFFERED BY IT. THIS ACCELERATED SCHEDULE, IT IS ALLEGED, WOULD RESULT IN SAVINGS TO THE GOVERNMENT THROUGH EARLIER IMPROVEMENT IN FIELD EFFICIENCY AND LOWER CONTRACT CONTROL COSTS. THE CONTRACTING OFFICER STATES THAT THE SAVINGS CLAIMED BY ALLIS-CHALMERS ARE CONJECTURAL AND NOT CAPABLE OF CALCULATION WITH CERTAINTY. OUR OFFICE HAS STATED IN THE PAST THAT COST FACTORS WHICH ARE NOT DETERMINABLE WITH REASONABLE CERTAINTY SHOULD NOT BE USED IN THE EVALUATION OF BIDS FOR AWARD. SEE 50 COMP. GEN. 447 (1970) AND 51 COMP. GEN. 645 (1972). MOREOVER, THE IFB DID NOT REQUIRE FOR PURPOSES OF EVALUATION THAT BIDDERS OFFERING ACCELERATED DELIVERY SCHEDULES SUBMIT SEPARATE PRICES TO REFLECT ACCELERATED SCHEDULES. THEREFORE, AS COCHRAN- WESTERN HAS AGREED TO MEET THE REQUIRED DELIVERY SCHEDULE AND ITS BID IS LOW, IT IS ELIGIBLE FOR AWARD AS A RESPONSIBLE, RESPONSIVE CONTRACTOR. SEE 50 COMP. GEN., SUPRA.

ACCORDINGLY, FOR THE FOREGOING REASONS, THE PROTEST IS DENIED.

IN VIEW OF OUR CONCLUSION, IT IS UNNECESSARY TO CONSIDER THE ALLIS CHALMERS PROTEST AGAINST ANY AWARD TO ELWELL-PARKER ELECTRIC COMPANY, THE SECOND LOW BIDDER.