B-238877.3, Nov 7, 1990, 90-2 CPD ***
B-238877.3: Nov 7, 1990
It is not legally objectionable for a firm. A contracting officer may accept such a bid so long as the firm is responsible and capable of performing the contract at the price it bid. The proper forum for consideration of possible monopolistic practices is the Department of Justice. After it was notified of award and after filing initial protest. Second protest subsequently filed is therefore untimely. In which it argues that the agency improperly awarded the contract to Textron which was ineligible because Textron's designated subcontractor for all of the manufacturing effort. Was unqualified and unapproved under the material qualification requirements of the solicitation. Was issued on January 11.
B-238877.3, Nov 7, 1990, 90-2 CPD ***
PROCUREMENT - Sealed Bidding - Below-cost bids - Acceptance DIGEST: 1. It is not legally objectionable for a firm, in the exercise of its business judgment, to submit a below-cost bid, and a contracting officer may accept such a bid so long as the firm is responsible and capable of performing the contract at the price it bid. PROCUREMENT - Bid Protests - Forum election - Recommendations PROCUREMENT - Bid Protests - Antitrust matters - GAO review 2. A single instance of alleged below-cost bidding does not evidence an intent by a firm to undercut the prices submitted by its competitors in order to monopolize contract awards for the particular item. Further, the proper forum for consideration of possible monopolistic practices is the Department of Justice, not the General Accounting Office. PROCUREMENT - Bid Protests - GAO procedures - Protest timeliness - 10-day rule 3. Protester who waits more than 5 weeks, after it was notified of award and after filing initial protest, to submit Freedom of Information Act request for information concerning possible additional grounds of protest, has failed to diligently pursue such information, and second protest subsequently filed is therefore untimely.
Diemaster Tool, Inc.:
Diemaster Tool, Inc. requests that we reconsider our decision in Diemaster Tool, Inc., B-238877, Apr. 5, 1990, 90-1 CPD Para. 375, in which we dismissed Diemaster's protest challenging the award of a contract to Textron Lycoming under invitation for bids (IFB) No. DAAJ09 90-B-0050, an approved source solicitation issued by the Department of the Army for 1,020 turbine shafts, a critical flight safety part for the T-53 helicopter engine. Diemaster also filed a supplemental protest on July 5, 1990, in which it argues that the agency improperly awarded the contract to Textron which was ineligible because Textron's designated subcontractor for all of the manufacturing effort, KHD, was unqualified and unapproved under the material qualification requirements of the solicitation.
We deny the request for reconsideration and dismiss the supplemental protest.
The solicitation, which contemplated the award of a firm, fixed price supply contract, was issued on January 11, 1990, and restricted the competition to approved sources, specifically Diemaster and Textron, the original equipment manufacturer. Clause I-2 of the solicitation, referencing Federal Acquisition Regulation (FAR) Sec. 52.209-1 (FAC 84-39), generally described the government's qualification requirements for testing or other quality assurance demonstration to be completed before award. In its bid, Textron completed clause I-2(c) concerning its previous compliance with the standards specified for qualification by listing itself and KHD as the manufacturers of the turbine shaft which had been supplied under a 1986 contract.
Bid opening was held on February 13. Textron was the apparent low bidder at a unit price of $2,404 (with first article) and Diemaster was the second low bidder at a unit price of $2,932 (with or without first article). The agency determined that Textron was a responsible contractor and, on February 27, the agency awarded the contract to Textron.
REQUEST FOR RECONSIDERATION
In its initial protest, Diemaster stated that in 1986 Textron was awarded a contract for this item at a unit price of $6,080. Diemaster argued that this price was substantially higher than the unit price Textron bid under the current solicitation and that either Textron overpriced its bid in 1986 or Textron's current bid was below-cost and represented a "buy-in."
We held that Diemaster's allegation that Textron submitted a below cost or "buy-in" bid did not provide a basis of protest because a bidder, for various reasons, in its business judgment may decide to submit a below- cost bid, and such a bid is not invalid. Select Investigative Servs., Inc.-- Recon., B-235768.3, Aug. 1, 1989, 89-2 CPD Para. 94. Whether an awardee can perform the contract at the price offered is a matter of responsibility. Trak Eng'g, Inc., B-231791, Oct. 28, 1988, 88-2 CPD Para. 402. Our Office will not review the contracting officer's affirmative determination of responsibility absent a showing of possible fraud or bad faith or that definitive responsibility criteria have not been met. Id.; Bid Protest Regulations, 4 C.F.R. Sec. 21.3(m)(5) (1990). Diemaster made no such allegation concerning the contracting officer's affirmative determination of responsibility. We further stated in our decision that an unreasonably low bid may not be rejected under FAR Sec. 14.404 2(f) (FAC 84-58) (providing for rejection of a bid where it is unreasonable as to price) solely because of its low price where the bidder is found to be responsible by the contracting officer. See generally North American Laboratories of Ohio, Inc., 58 Comp.Gen. 724 (1979), 79-2 CPD Para. 106.
Diemaster, a Canadian firm, also alleged that it was denied a fair opportunity to compete for this contract under Department of Defense Federal Acquisition Regulation Supplement (DFARS) Sec. 225.7101(a) (1988 ed.) which provides that "it is Department of Defense policy to ... assure Canada a fair opportunity to share in the production of military equipment and material involving programs of mutual interest to Canada and the United States." This provision states that Canadian products are generally exempted from the restrictions of the Balance of Payment Program and the Buy American Act. Diemaster did not allege, nor was there reason to believe, that Diemaster's status as a Canadian firm contributed in any way to its failure to receive the award. We therefore dismissed the protest.
Under our Bid Protest Regulations, to obtain reconsideration the requesting party must show that our prior decision contains either errors of fact or law or present information not previously considered that warrants reversal or modification of our decision. 4 C.F.R. Sec. 21.12(a). Repetition of arguments made during our consideration of the original protest and mere disagreement with our decision do not meet this standard. R.E. Scherrer, Inc.-- Recon., B-231101.3, Sept. 21, 1988, 88-2 CPD Para. 274.
In its request for reconsideration, Diemaster argues that its protest challenged the acceptability of Textron's "buy-in" bid rather than the responsibility of Textron as a prospective contractor. Specifically, Diemaster argues that a "buy-in" bid serves to "vitiate full and open competition" and has an anticompetitive effect which is motivated by an attempt to remove sources of effective competition from the particular marketplace. In addition, Diemaster again argues that under FAR Sec. 14.404-2(f), a contracting officer should be able to reject a "buy-in" bid for being unreasonably low as to price and that our Office erred in finding that Diemaster had not been denied a fair opportunity to compete as a Canadian firm because of the anticompetitive below-cost domestic bid.
We are not persuaded by Diemaster's arguments. While Textron submitted a bid in 1986 which was approximately 2-1/2 times greater than its bid for the same item under this solicitation, the contracting officer determined that Textron was a responsible prospective contractor capable of performing the contract at the price it bid. In support of its argument that Textron's allegedly below-cost bid was anticompetitive and should have been rejected, Diemaster has alleged only this single instance of alleged below-cost bidding and has not alleged or shown any pattern of below-cost bidding by Textron which would indicate an intent by Textron to undercut the prices submitted by its competitors in order to monopolize contract awards for this item. Even where a firm through the submission of below-cost bids has engaged in monopolistic practices, the proper forum for consideration of such possible violations of the antitrust laws is the Department of Justice, not our Office. See Sun Valley Nuclear, B-213457, Nov. 21, 1983, 83-2 CPD Para. 606; Moloney Coachbuilders, B-212608, Aug. 25, 1983, 83-2 CPD Para. 255.
Additionally, while alleging the existence of a below-cost bid, the protester also alleges that Textron submitted a "grossly overpriced" and "overcharged" bid in 1986. In short, the protester alleges that Textron's current bid is unreasonably low in comparison with its 1986 bid and that the 1986 bid is unreasonably high in comparison with Textron's current bid. The record neither shows that the 1986 bid was unreasonably high nor that Textron's current bid is unreasonably low or below-cost.
With respect to Diemaster's last two arguments in its request for reconsideration-- that under FAR Sec. 14.404-2(f), a contracting officer is not precluded from rejecting an unreasonably low priced bid and that Diemaster, as a Canadian firm, has been denied a fair opportunity to compete with a domestic firm which submitted an alleged below-cost bid-- Diemaster has not met the standard for reconsideration because it reiterates arguments made during our consideration of the original protest and merely expresses disagreement with our prior decision. R.E. Scherrer, Inc.-- Recon., B-231101.3, supra. We therefore deny the request for reconsideration.
As stated above, Diemaster's basis for its supplemental protest is that the agency improperly awarded the contract to Textron which was ineligible because Textron's designated subcontractor for all of the manufacturing effort was unqualified and unapproved under the material qualification requirements of the solicitation. This ground of protest is based on documents released by the agency to Diemaster pursuant to a Freedom of Information Act (FOIA) request.
The record shows that the contract was awarded to Textron on February 27, 1990 and that the protester knew of the award no later than March 9, when it filed its initial protest with our Office. The supplemental protest was filed on July 5 and stated that "to the extent it raises new issues, it contains separate protest grounds timely filed" following receipt of the FOIA documents on June 20, 1990. The protester admits that it did not file its FOIA request until April 18, 1990, more than 5 weeks after having been notified of the award to Textron.
We find that while the initial protest by Diemaster was timely filed, its supplemental protest is untimely. A protester who challenges an award on one ground should diligently pursue information which may reveal additional grounds of protest concerning a competitor's offer. See Robinson Indus., Inc.-- Recon., B-194157.2, Mar. 14, 1980, 80-1 CPD Para. 197. Separate grounds of protest asserted after a protest has been filed must independently satisfy the timeliness requirements of our Bid Protest Regulations. See id. Where a protest is based on information disclosed pursuant to FOIA, the protest will be considered timely if it is filed within 10 working days after the information is received, provided that the protester diligently pursued the release of the information under FOIA. Robbins Gioia, Inc., B-229757, Dec. 28, 1987, 87-2 CPD Para. 632.
Here, the protester waited more than 5 weeks after it was notified of the award to file its FOIA request. Under the circumstances, we view Diemaster as not having pursued within a reasonable time the information upon which its supplemental protest is based. See Finkelstein Assocs., Inc., B-237441, Nov. 22, 1989, 89-2 CPD Para. 497; Heroux, Inc., B-237432.2, June 8, 1990, 90-1 CPD Para. 542.
The request for reconsideration is denied, and the supplemental protest is dismissed.