B-181199, DEC 20, 1974, 54 COMP GEN 499

B-181199: Dec 20, 1974

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CONTRACTS - AWARDS - PROTEST PENDING WHERE AWARD IS MADE BY AGENCY AFTER PROTEST FILED AT GENERAL ACCOUNTING OFFICE BUT BEFORE AGENCY RECEIVED NOTICE OF PROTEST. IT APPEARS THAT PROTESTER MAY HAVE BEEN PREJUDICED BY AWARD. OFF THE SHELF" ITEM AND AGENCY SPECIFICALLY INFORMS ALL OFFERORS THAT SPECIFICATIONS ARE NOT SUFFICIENT TO PERMIT DESIGN AND MANUFACTURE OF ITEM. OFF-THE-SHELF CHARACTERISTIC WAS INVITATION FOR BIDS REQUIREMENT. OFF THE -SHELF ITEM IS SITUATION WHERE OUR OFFICE WILL CONTINUE TO REVIEW AFFIRMATIVE RESPONSIBILITY DETERMINATION. EVEN IN ABSENCE OF ALLEGATION OR DEMONSTRATION OF FRAUD TO DETERMINE IF DETERMINATION WAS FOUNDED ON REASONABLE BASIS. BIDDERS - QUALIFICATIONS - PREAWARD SURVEYS - UNSATISFACTORY IN SITUATION WHERE IT BECOMES EVIDENT IN PREAWARD SURVEY THAT LOW RESPONSIVE BIDDER DOES NOT HAVE INTENTION OR ABILITY TO PROVIDE REQUIRED "COMMERCIAL.

B-181199, DEC 20, 1974, 54 COMP GEN 499

CONTRACTS - AWARDS - PROTEST PENDING WHERE AWARD IS MADE BY AGENCY AFTER PROTEST FILED AT GENERAL ACCOUNTING OFFICE BUT BEFORE AGENCY RECEIVED NOTICE OF PROTEST, AGENCY DID NOT ACT IMPROPERLY EVEN THOUGH, DUE TO DECISION ON MERITS OF PROTEST, IT APPEARS THAT PROTESTER MAY HAVE BEEN PREJUDICED BY AWARD. CONTRACTS - SPECIFICATIONS - CONFORMABILITY OF EQUIPMENT, ETC., OFFERED - COMMERCIAL MODEL REQUIREMENT - "OFF THE SHELF" ITEMS WHERE PURCHASE DESCRIPTION COVERS SALIENT CHARACTERISTICS OF "COMMERCIAL, OFF THE SHELF" ITEM AND AGENCY SPECIFICALLY INFORMS ALL OFFERORS THAT SPECIFICATIONS ARE NOT SUFFICIENT TO PERMIT DESIGN AND MANUFACTURE OF ITEM, COMMERCIAL, OFF-THE-SHELF CHARACTERISTIC WAS INVITATION FOR BIDS REQUIREMENT. GENERAL ACCOUNTING OFFICE - CONTRACTS - CONTRACTOR'S RESPONSIBILITY - CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION ACCEPTED - EXCEPTIONS QUESTION OF RESPONSIVE BIDDER'S MANIFESTATION AFTER BID OPENING OF INABILITY TO COMPLY WITH SPECIFICATION REQUIREMENT FOR COMMERCIAL, OFF THE -SHELF ITEM IS SITUATION WHERE OUR OFFICE WILL CONTINUE TO REVIEW AFFIRMATIVE RESPONSIBILITY DETERMINATION, EVEN IN ABSENCE OF ALLEGATION OR DEMONSTRATION OF FRAUD TO DETERMINE IF DETERMINATION WAS FOUNDED ON REASONABLE BASIS. BIDDERS - QUALIFICATIONS - PREAWARD SURVEYS - UNSATISFACTORY IN SITUATION WHERE IT BECOMES EVIDENT IN PREAWARD SURVEY THAT LOW RESPONSIVE BIDDER DOES NOT HAVE INTENTION OR ABILITY TO PROVIDE REQUIRED "COMMERCIAL, OFF THE SHELF" ITEM BY TIME SET FOR DELIVERY, THERE IS NO REASONABLE BASIS UPON WHICH BIDDER COULD PROPERLY HAVE BEEN FOUND RESPONSIBLE. ACCORDINGLY, AWARD TO SUCH BIDDER WAS IMPROPER AND SHOULD BE TERMINATED, WITH AWARD BEING MADE TO NEXT LOW RESPONSIVE AND RESPONSIBLE BIDDER WILLING TO ACCEPT AWARD AT ITS BID PRICE.

IN THE MATTER OF DATA TEST CORPORATION, DECEMBER 20, 1974:

INVITATION FOR BIDS (IFB) WA5M-4-7215 WAS ISSUED ON APRIL 4, 1974, BY THE FEDERAL AVIATION ADMINISTRATION (FAA), SEEKING BIDS ON 20 AUTOMATIC PRINTED CIRCUIT BOARD TESTERS WITH PERIPHERAL EQUIPMENT, SPARE PARTS AND RELATED MATERIAL. THE TESTERS IN QUESTION WERE REQUIRED TO BE FURNISHED "*** IN ACCORDANCE WITH PURCHASE DESCRIPTION FAA-P-2576 ***." THE IFB STATED THAT THE AWARD WOULD BE MADE ON THE BASIS OF THE LOWEST AGGREGATE BID FOR ALL ITEMS WITH THE EXCEPTION OF ITEMS 7 AND 10. ITEM 7 WAS AN OPTIONAL ITEM REGARDING TEST PROGRAMMING WHILE ITEM 10 PERTAINED TO THE CONTRACTOR'S TRAINING OF FAA PERSONNEL AND THE PRICE FOR WHICH IT WAS TO BE NEGOTIATED WITHIN 30 DAYS OF AWARD.

IN RESPONSE TO THE IFB, FOUR BIDS WERE RECEIVED. THE PERTINENT PORTION OF THE ABSTRACT OF BIDS WAS AS FOLLOWS:

TOTAL PRICE

EXCLUDING ITEMS

7 AND 10

SYSTRON-DONNER CORPORATION $435,785

ATEC, INC 476,585

DATA TEST CORPORATION 789,317

ACCORDINGLY, AWARD WAS MADE TO SYSTRON ON JUNE 28, 1974. DATA TEST PROTESTED TO OUR OFFICE AGAINST ANY AWARD BEING MADE IN A TELEGRAM SENT AT 7:29 P.M. P.D.T. JUNE 27, 1974, AND FILED IN OUR OFFICE AT 9:33 A.M., FRIDAY, JUNE 28, 1974. (HOWEVER, TELEPHONIC NOTIFICATION TO FAA BY OUR OFFICE OF THIS PROTEST DID NOT OCCUR UNTIL MONDAY, JULY 1.) THE FAA STATES THAT THE AWARD TO SYSTRON WAS MADE ON THE MORNING OF JUNE 28, AND THAT IT DID NOT BECOME AWARE OF THE PROTEST UNTIL 1:05 P.M. E.D.T. ON JUNE 28 WHEN IT RECEIVED A TELEPHONE CALL FROM THE PROTESTER. (NOTE: A COPY OF THE TELEGRAM TO GAO ARRIVED AT FAA AT 1:56 P.M. E.D.T. ON JUNE 28.) WHILE THE PROTEST WAS TECHNICALLY FILED PRIOR TO AWARD, SINCE THERE IS NO EVIDENCE THAT THE FAA WAS ON NOTICE OF THE PROTEST AT THE TIME OF AWARD, WE CANNOT FAULT THE AGENCY FOR ITS ACTIONS EVEN THOUGH UNLIKE THE SITUATION DESCRIBED IN MATTER OF SOLAR LABORATORIES, INC., B-179731, FEBRUARY 25, 1974, AS NOTED BELOW DATA TEST MAY HAVE BEEN PREJUDICED BY THE AWARD.

PARENTHETICALLY, WE NOTE THAT OUR PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. SEC. 20.1(B) (1974), REQUIRE THAT A COPY OF ANY PROTEST TO GAO SHOULD BE FILED CONCURRENTLY WITH THE CONTRACTING OFFICER TO PREVENT THE OCCURRENCE OF SUCH SITUATIONS.

DATA TEST ARGUES THAT THE AWARD TO SYSTRON WAS IMPROPER SINCE -

1. SYSTRON'S BID WAS NONRESPONSIVE FOR FAILURE TO COMPLY WITH THE PURCHASE DESCRIPTION;

2. SYSTRON WAS NOT A RESPONSIBLE BIDDER AS THE PREAWARD SURVEY INDICATES;

3. THE CONTRACT BETWEEN THE GOVERNMENT AND SYSTRON IS VOID AB INITIO BECAUSE THE CONTRACTING OFFICER ESSENTIALLY DID NOT TAKE ALL STEPS NECESSARY TO PRECLUDE SYSTRON FROM SUBSEQUENTLY ALLEGING AND PREVAILING ON A THEORY OF MISTAKE IN ITS SEEMINGLY LOW BID; AND

4. SYSTRON HAS, IN EFFECT, BOUGHT-IN AND, THEREFORE, SHOULD NOT BE PERMITTED TO NEGOTIATE CHANGES IN THE DELIVERY SCHEDULE OR PRICE.

WITH REGARD TO THE ISSUE OF SYSTRON'S ALLEGED FAILURE TO COMPLY WITH PURCHASE DESCRIPTION FAA-P-2576, THE PURCHASE DESCRIPTION IN OUTLINING ITS SCOPE STATES THAT:

THIS PURCHASE DESCRIPTION COVERS THE SALIENT CHARACTERISTICS OF A COMMERCIAL, OFF THE SHELF, DIGITAL, NONCOMPUTER OPERATED, PRINTED CIRCUIT BOARD (PCB) TESTER. ***

DATA TEST ARGUES THAT SINCE SYSTRON DOES NOT HAVE SUCH A "COMMERCIAL, OFF THE SHELF" ITEM, ITS BID SHOULD HAVE BEEN DECLARED NONRESPONSIVE. (NOTE: SYSTRON DOES NOT CONTRADICT THE STATEMENT AS TO ITS NOT HAVING AN OFF-THE- SHELF ITEM.) THE AGENCY, ON THE OTHER HAND, ARGUES THAT EVEN THOUGH THE PURCHASE DESCRIPTION WAS INDEED WRITTEN TO DESCRIBE SUCH AN OFF-THE-SHELF ITEM, "*** THE DOCUMENT IS CERTAINLY DEFINITIVE ENOUGH TO PERMIT DESIGN AND FABRICATION BY COMPETENT COMPANIES ***." HOWEVER, IT SHOULD BE NOTED THAT IN A PREAWARD MEMO FROM THE CHIEF OF THE FAA RADAR AND NAVAIDS SECTION SENT TO ALL PROSPECTIVE BIDDERS THE FOLLOWING RELEVANT EXCHANGE OCCURRED:

QUESTION: IS THE SPECIFICATION DEFINITIVE ENOUGH TO PERMIT THE CONSTRUCTION OF PRINTED CIRCUIT BOARDS?

ANSWER: FAA-P-2576 WAS NOT WRITTEN AS A SPECIFICATION. IT IS A PURCHASE DESCRIPTION FOR THE TYPE OF TESTER THE FAA HAS DETERMINED BY EVALUATION THAT WILL SATISFY THE AGENCY'S NEEDS. IT DESCRIBES AN OFF THE-SHELF ITEM AND WAS NOT INTENDED TO BE A SPECIFICATION THAT A CONTRACTOR COULD MANUFACTURE AND DESIGN A PRINTED CIRCUIT BOARD TESTER FROM.

FROM A READING OF THIS MATERIAL AND THE PURCHASE DESCRIPTION, IT IS CLEAR TO US THAT THE FAA CONVEYED TO ALL OFFERORS THE FACT THAT AN OFF THE- SHELF, COMMERCIALLY AVAILABLE ITEM WAS BEING SOUGHT. THE ARGUMENT THAT THE ANSWER IN THE ABOVE-NOTED MEMO DOES NOT PRECLUDE THE SUPPLY OF A NEWLY DESIGNED TESTER, WE FEEL, IS NOT PERSUASIVE IN VIEW OF THE FAA CHARACTERIZATION OF THE PURCHASE DESCRIPTION. THUS, WE ARE OF THE VIEW THAT THE COMMERCIAL, OFF-THE-SHELF CHARACTERISTIC WAS A REQUIREMENT OF THE IFB.

THE PROTESTER ARGUES THAT SINCE SYSTRON DOES NOT HAVE SUCH AN OFF-THE SHELF ITEM, IT MUST BE DECLARED NONRESPONSIVE. HOWEVER, IN A SIMILAR SITUATION, WHERE THE IFB SOUGHT A "MANUFACTURER'S STANDARD COMMERCIAL PRODUCT," OUR OFFICE STATED THAT:

SINCE *** (THE AWARDEE WHO ALLEGEDLY DID NOT HAVE SUCH AN ITEM) TOOK NO EXCEPTION TO, OR OTHERWISE MANIFESTED AN INTENTION IN THE BID NOT TO BE BOUND BY, ANY PROVISION OF THE SOLICITATION, INCLUDING THE STANDARD PRODUCT CLAUSE, IT IS OUR VIEW THAT THE ISSUE IN THE PRESENT CASE IS ONE OF RESPONSIBILITY *** B-176896, JANUARY 19, 1973.

SEE 49 COMP. GEN. 553, 556-557 (1970).

SIMILARLY, AS IN THE INSTANT CASE, THE REVELATION SUBSEQUENT TO BID OPENING OF THE BIDDER'S INTENTION NOT TO COMPLY WITH THE SPECIFICATIONS WOULD SEEM TO SUPPORT A DETERMINATION TO REJECT THE BID ON THE BASIS OF THE BIDDER'S NONRESPONSIBILITY. B-178112, JULY 24, 1973, CITING B 176896, SUPRA, AND 49 COMP. GEN., SUPRA.

OUR OFFICE HAS RECENTLY INDICATED THAT IT WOULD NOT REVIEW SITUATIONS INVOLVING CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY ABSENT ALLEGATIONS OR DEMONSTRATIONS OF FRAUD SINCE SUCH DETERMINATIONS ARE BASED IN LARGE MEASURE ON SUBJECTIVE JUDGMENTS WHICH ARE NOT READILY SUSCEPTIBLE TO REASONED REVIEW. MATTER OF CENTRAL METALS PRODUCTS, INCORPORATED, 54 COMP. GEN. 66 (1974). SEE KECO INDUSTRIES V. UNITED STATES, 428 F.2D 1233, 1240 (192 CT. CL. 773). HOWEVER, WHERE, AS HERE, THERE IS A QUESTION CONCERNING WHETHER THE BIDDER MEETS DEFINITIVE GUIDELINES OR REQUIREMENTS, SUCH AS IN THIS CASE WHETHER THE PRODUCT TO BE DELIVERED MEETS THE SPECIFICATION REQUIREMENT FOR A COMMERCIAL, OFF-THE- SHELF ITEM, WE WILL CONTINUE TO REVIEW THE AFFIRMATIVE DETERMINATION OF RESPONSIBILITY TO DETERMINE IF IT WAS FOUND ON A REASONABLE BASIS.

THE PREAWARD SURVEY PERFORMED ON SYSTRON STATES THAT "THE ITEM BEING PROCURED IN THE PROPOSED CONTRACT IS NOT A STANDARD PRODUCT FOR THE PROPOSED CONTRACTOR" AND THAT IT "*** IS NOT A STOCK ITEM WITH THE PROSPECTIVE CONTRACTOR." THE SURVEY ALSO STATES THAT:

*** THE BIDDER'S ENGINEERING STAFF IS CONSIDERED COMPETENT, BUT WERE NOT WELL VERSED IN THE SPECIFIC REQUIREMENTS OF THE PURCHASE DESCRIPTION. IS ALSO CONCLUDED THAT THE BIDDER HAS UNDER-ESTIMATED THE REQUIRED TASK AND THE PROPOSED ENGINEERING STAFF IS NOT ADEQUATE TO PERFORM THE PROPOSED CONTRACT WITHIN THE REQUIRED SCHEDULE.

WE VIEW THE ABOVE-QUOTED PORTIONS OF THE PREAWARD SURVEY AS CLEAR EVIDENCE OF SYSTRON'S INTENTION NOT TO, OR MORE PRECISELY ITS INABILITY TO, PROVIDE A "COMMERCIAL, OFF THE SHELF" ITEM WHICH WE HAVE FOUND TO BE AN IFB REQUIREMENT.

THE CASE AT HAND IS DISTINGUISHABLE FROM THE SITUATION EXPRESSED IN B 176896, SUPRA. THERE THE SOLICITATION REQUIRED A "MANUFACTURER'S STANDARD COMMERCIAL PRODUCT" AND EVEN THOUGH THE LOW BIDDER DID NOT HAVE SUCH AN ITEM AVAILABLE AT THE TIME OF BIDDING, SINCE THE PREAWARD SURVEY CONFIRMED THAT THE BIDDER WAS CAPABLE OF MEETING ALL THE SPECIFICATIONS INCLUDING THE STANDARD COMMERCIAL PRODUCT REQUIREMENT, BY THE TIME SET FOR DELIVERY, OUR OFFICE BELIEVED THAT THE AFFIRMATIVE PREAWARD DETERMINATION OF THE RESPONSIBLE BIDDER WAS PROPER. MOREOVER, IN THAT CASE (1) THE BIDDER INTENDED TO FURNISH ITS MODEL 433 WHICH WAS AN UPDATED VERSION OF ITS COMMERCIALLY AVAILABLE MODEL 270; (2) A PREPRODUCTION MODEL OF THE 433 HAD BEEN MANUFACTURED MORE THAN 3 YEARS PRIOR TO BID OPENING; (3) THE MODEL 433 HAD UNDERGONE THOUSANDS OF HOURS OF TEST OPERATION; (4) A CORPORATE DECISION WAS MADE AT OR ABOUT THE TIME OF THE PREAWARD SURVEY TO RELEASE THE EQUIPMENT COMMERCIALLY 3 MONTHS THEREAFTER; (5) ENGINEERING DRAWINGS WERE RELEASED, ASSEMBLY AREAS WERE PREPARED, AND PRODUCTION TOOLING INSTALLED; (6) PRODUCTION SCHEDULES HAD BEEN PLANNED; (7) COMMERCIAL MANUALS WERE BEING PREPARED; (8) MATERIALS FROM OUTSIDE SOURCES WERE BOTH ON ORDER AND IN INVENTORY; AND (9) THE MODEL 433 WAS TO HAVE BEEN IN COMMERCIAL USE SEVERAL MONTHS BEFORE THE FIRST ARTICLE WAS DUE UNDER THE CONTRACT.

THE INSTANT CASE IS SPECIFICALLY DISTINGUISHABLE FROM B-176896, SUPRA, FOR THE FOLLOWING REASONS: FIRST, THE PREAWARD SURVEY HERE GIVES NO POSITIVE INDICATION THAT SYSTRON COULD PROVIDE A "COMMERCIAL, OFF THE SHELF ITEM" WITHIN THE REQUISITE 120-DAY PERIOD BETWEEN AWARD AND INITIAL DELIVERY, NOR DOES IT INDICATE THAT SYSTRON HAD MADE DEFINITE PREPARATIONS TO INCLUDE THIS PRODUCT IN ITS COMMERCIAL LINE; AND, SECONDLY, THE INSTANT PREAWARD SURVEY STATES SUBSTANTIAL DOUBT AS TO THE SYSTRON ENGINEERING DEPARTMENT'S KNOWLEDGE OF THE TASK REQUIRED OF IT. MOREOVER, THE CONTRACTING OFFICER NEVER DETERMINED THAT SYSTRON COULD PROVIDE A COMMERCIAL, OFF-THE-SHELF ITEM IN TIMELY FASHION. (NOTE FAA DID NOT CONSIDER THIS TO BE AN IFB REQUIREMENT.)

INDEED, WE DO NOT BELIEVE THAT THERE WAS A REASONABLE BASIS UPON WHICH IT COULD HAVE BEEN PROPERLY CONCLUDED, PRIOR TO AWARD, THAT SYSTRON HAD THE ABILITY TO MEET ALL OF THE IFB REQUIREMENTS. ACCORDINGLY, SYSTRON SHOULD HAVE BEEN DECLARED NONRESPONSIBLE. THEREFORE, WE BELIEVE THAT THE AWARD TO SYSTRON WAS IMPROPER AND RECOMMEND THAT THE CONTRACT IN QUESTION BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT, WITH AWARD MADE TO THE NEXT LOW RESPONSIVE AND RESPONSIBLE BIDDER WILLING TO ACCEPT THE AWARD AT ITS BID PRICE. 51 COMP. GEN. 792 (1972).

WITH REGARD TO DATA TEST'S REMAINING ARGUMENTS, WE FEEL THAT IN VIEW OF THE FINDINGS THAT THE CONTRACTOR SHOULD HAVE BEEN FOUND NONRESPONSIBLE, THESE CONTENTIONS BECOME ACADEMIC. ALSO, IN THE INTEREST OF IMPLEMENTING SOME FORM OF PROMPT CORRECTIVE ACTION, WE WILL DECLINE TO RULE ON THESE POINTS.

SINCE THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN BY THE AGENCY, A COPY IS BEING TRANSMITTED TO EACH OF THE COMMITTEES NAMED IN SECTION 236 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, 31 US CODE 1176.