[Protest of Navy Solicitation for Landing Craft Propellers]

B-164161, AUG. 29, 1968

TO STANDARD WINDING COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 26, 1968, AND SUPPLEMENTARY LETTERS DATED MAY 2 AND 31, 1968, PROTESTING AGAINST AWARD OF A CONTRACT TO EITHER ELECTROSPACE CORPORATION (ELECTROSPACE) OR LA POINTE INDUSTRIES, INC., (LA POINTE) UNDER INVITATION FOR BIDS (IFB) NO. DAAB05-68-B-0218, ISSUED BY THE U.S. ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA.

THE SUBJECT SOLICITATION WAS A MULTI-YEAR PROCUREMENT OF RADIO SET AN/PRC -77 AND RECEIVER-TRANSMITTER RT-841. BIDDERS WERE ASKED TO SUBMIT OFFERS ON A SINGLE YEAR QUANTITY ONLY (ALTERNATE A OF THE IFB CONSISTING OF ITEMS 0001 THROUGH 0034) OR, IF THEY WISHED, FOR A COMBINED TOTAL REPRESENTING THE REQUIREMENTS OF THE SINGLE YEAR PLUS THREE SUCCEEDING PROGRAM YEARS (ALTERNATE "B" OF THE IFB CONSISTING OF ITEMS 0035 THROUGH 0080). QUANTITIES FOR THE SINGLE YEAR (ALTERNATE "A") WERE 4408 OF THE AN/PRC-77 AND 140 OF THE RT-841 AND FOR THE MULTI-YEAR (ALTERNATE "B") 36,237 OF THE AN/PRC-77 AND 3286 OF THE RT 841. OF THE 161 FIRMS SOLICITED, 21SUBMITTED BIDS. BIDS WERE EVALUATED IN ACCORDANCE WITH THE MULTI-YEAR PROVISION SET FORTH ON PAGE 7 OF INVITATION, WHICH STATES:

"IN COMPARING PRICES FOR THE SINGLE YEAR REQUIREMENTS AGAINST PRICES FOR MULTI-YEAR REQUIREMENTS, THE EVALUATED UNIT PRICE FOR EACH ITEM OF THE LOWEST EVALUATED OFFER RECEIVED ON THE SINGLE PROGRAM YEAR ALTERNATIVE SHALL BE MULTIPLIED BY THE TOTAL NUMBER OF UNITS OF THAT ITEM REQUIRED BY THE MULTI-YEAR ALTERNATIVE. THE SUM OF THESE PRODUCTS SHALL BE COMPARED AGAINST THE TOTAL EVALUATED PRICE OF THE LOWEST OFFER RECEIVED FOR ALL ITEMS UNDER THE MULTI-YEAR ALTERNATIVE. IF THE MULTI-YEAR PRICE IS LOW, AWARD SHALL BE MADE ON THAT BASIS; OTHERWISE, AWARD SHALL BE MADE ON THE BASIS OF THE SINGLE PROGRAM YEAR ALTERNATIVE.'

UPON THIS EVALUATION IT WAS DETERMINED THAT ALTERNATE "B" WOULD BE USED SINCE THE UNIT PRICE OF THE LOWEST EVALUATED BID ON ALTERNATE "A" TIMES THE FOUR YEAR QUANTITY (MULTI-YEAR QUANTITY) WOULD NOT BE LOWER THAN THE ALTERNATE "B.' THE THREE LOWEST BIDS FOR THE MULTI-YEAR PROCUREMENT WERE AS FOLLOWS: A. ELECTROSPACE CORPORATION BID $19,252,210.08

GLEN COVE, NEW YORK TRANSPORTATION COST 80,761.77

(ATTACHMENT NO. 3) EVALUATION BASIS $19,332,971.85 B. LAPOINTE INDUSTRIES, INC. BID $19,407,153.27

ROCKVILLE, CONNECTICUT TRANSPORTATION COST 40,321.10

(ATTACHMENT NO. 4) EVALUATION BASIS$19,447,474.37 C. OVITRON CORPORATION

BID $19,597,030.25

STANDARD WINDING CO. TRANSPORTATION COST 38,447.03

NEWBURGH, NEW YORK --------------

(ATTACHMENT NO. 5) EVALUATION BASIS $19,635,477.28

IT IS YOUR CONTENTION THAT ELECTROSPACE DOES NOT MEET THE REQUIREMENTS FOR A RESPONSIBLE PROSPECTIVE CONTRACTOR AS DEFINED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR), SECTION 1, PART 9. IT IS YOUR VIEW THAT SINCE ELECTROSPACE HAS NEVER MANUFACTURED THIS TYPE OF EQUIPMENT, IT DOES NOT POSSESS THE REQUIRED EXPERIENCE OR PERSONNEL TO SUCCESSFULLY PRODUCE THE ITEMS INVOLVED IN THIS PROCUREMENT ON SCHEDULE. YOU STATE, AS A BASIS FOR YOUR BELIEF THAT ELECTROSPACE IS NOT A RESPONSIBLE BIDDER, THAT ELECTROSPACE'S PERFORMANCE ON TWO CURRENT CONTRACTS IS UNSATISFACTORY DUE TO DELINQUENCIES IN THE PRODUCTION SCHEDULES. YOU FURTHER STATE THAT ELECTROSPACE INDICATES IN ITS BID THAT WORK REPRESENTING OVER 50 PERCENT OF THE CONTRACT PRICE WILL BE PERFORMED IN PUERTO RICO WHICH WILL CAUSE INCREASED PROBLEMS OF COORDINATION WITH ELECTROSPACE'S MANAGEMENT, ENGINEERING STAFF AND VENDORS AND WITH THE GOVERNMENT. MOREOVER, YOU CONTEND THAT SINCE THE RADIO SETS WILL BE MANUFACTURED IN PUERTO RICO, ELECTROSPACE'S BID SHOULD BE CONSIDERED AS FOB PUERTO RICO AND THAT THE COST OF SHIPPING THE RADIO SETS FROM PUERTO RICO TO THE TOBYHANNA AND SACRAMENTO DEPOTS SHOULD BE INCLUDED IN THE EVALUATION OF THE TOTAL ELECTROSPACE BID.

CONCERNING YOUR CONTENTION THAT ELECTROSPACE DOES NOT MEET THE REQUIREMENTS FOR A RESPONSIBLE PROSPECTIVE CONTRACTOR AS STATED IN SECTION 1, PART 9 OF ASPR, THE RECORD INDICATES THAT SUBSEQUENT TO BID OPENING A PRE-AWARD SURVEY WAS CONDUCTED OF ELECTROSPACE'S FACILITIES AT BOTH GLEN COVE, NEW YORK, AND PUERTO RICO. THE SURVEY WAS COMPLETELY AFFIRMATIVE, AND THE PRE-AWARD SURVEY REVIEW BOARD CONCURRED IN THE RECOMMENDATION THAT AWARD BE MADE TO ELECTROSPACE, AS DID THE CONTRACTOR EVALUATION BOARD, U.S. ARMY ELECTRONICS COMMAND. IN REGARD TO ELECTROSPACE'S PERFORMANCE RECORD, WHICH WAS RATED AS SATISFACTORY, THE SURVEY REPORT STATES: "AT THE PRESENT TIME THE BIDDER HAS 27 ACTIVE CONTRACTS OF WHICH 3 ARE DELINQUENT. ONE OF THE DELINQUENCIES IS ATTRIBUTABLE TO THE GOVERNMENT, ONE TO THE CONTRACTOR AND GOVERNMENT AND ONE CONTRACTOR RESPONSIBILITY. IT SHOULD BE NOTED THAT IN THE PAST CONTRACTOR'S DELIVERY RECORD WAS CONSIDERED UNSATISFACTORY. THERE HAS BEEN A MARKED IMPROVEMENT DURING THE PAST 6 MONTHS IN THE CONTRACTOR'S PERFORMANCE WHICH CAN BE ATTRIBUTED TO THE REPLACEMENT OF AND ADDITION TO SOME KEY PERSONNEL.' WHILE THE CONTRACTING OFFICER IS UNDER NO OBLIGATION TO ACCEPT THE FINDINGS OF THE PRE-AWARD SURVEY REPORT, ASPR 1-905.4 (A) SPECIFICALLY PROVIDES THAT THE CONTRACTING OFFICER MAY UTILIZE SUCH REPORTS IN MAKING RESPONSIBILITY DETERMINATIONS, AND IN THE ABSENCE OF ANY CONTRARY INDICATIONS OF RECORD WE DO NOT BELIEVE THAT HIS ACCEPTANCE OF THE CONCLUSIONS OF SUCH REPORTS CAN BE CONSIDERED IMPROPER. OUR OFFICE HAS CONSISTENTLY HELD THAT THE MATTER OF THE OVERALL RESPONSIBILITY OF THE SUCCESSFUL BIDDER TO PERFORM THE RESULTING CONTRACT IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER, WHOSE DECISION WILL NOT BE QUESTIONED UNLESS CLEARLY ARBITRARY OR WITHOUT ANY REASONABLE SUPPORT. 46 COMP. GEN. 371, 372; B-162888, JANUARY 4, 1968; B-159244 AND B-159318, JULY 27, 1966; B-162400, NOVEMBER 17, 1967; B-162175, AUGUST 22, 1967. IN VIEW THEREOF, AND SINCE THE AFFIRMATIVE FINDING OF THE PRE-AWARD SURVEY WOULD APPEAR TO JUSTIFY THE CONTRACTING OFFICER'S DETERMINATION THAT ELECTROSPACE WAS RESPONSIBLE, WE CANNOT CONSIDER THE DETERMINATION AS ARBITRARY OR CAPRICIOUS.

REGARDING YOUR CONTENTION THAT ELECTROSPACE'S BID SHOULD BE CONSIDERED FOB PUERTO RICO, THE BID SUBMITTED BY ELECTROSPACE IS BASED UPON DELIVERY FOB GLEN COVE, NEW YORK. THE GOVERNMENT'S RESPONSIBILITY FOR TRANSPORTATION COSTS IS THEREFORE LIMITED TO THE COSTS OF SHIPMENT FROM THAT POINT TO DESTINATION.

INASMUCH AS WE HAVE BEEN ADVISED THAT AWARD OF A CONTRACT HAS BEEN MADE TO ELECTROSPACE, CONSIDERATION OF YOUR PROTEST AGAINST THE LA POINTE BID IS NOT REQUIRED.