B-181261, SEP 5, 1974
Highlights
ALTHOUGH CONTRACT FOR 53 UNIT HEATERS SHOULD HAVE BEEN TERMINATED FOR CONVENIENCE OF GOVERNMENT BECAUSE IT WAS ERRONEOUSLY AWARDED TO SECOND LOW BIDDER. GAO DOES NOT RECOMMEND TTERMINATION OF CONTRACT SINCE 20 HEATERS HAVE NOW BEEN DELIVERED. BALANCE WAS TO BE SHIPPED AUGUST 26. EIGHT BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION AND WERE OPENED. T & H WAS THE LOW BIDDER AT $232 A UNIT. THE FACILITIES ENGINEER DETERMINED THAT THE UNIT HEATER WAS UNDERSIZED COMPARED TO WHAT WAS CALLED FOR BY THE SPECIFICATIONS. A CONTRACT WAS AWARDED TO THE SECOND LOW BIDDER. IT WAS DETERMINED THAT THE HEATER ACTUALLY DID MEET THE TECHNICAL REQUIREMENTS OF THE SOLICITATION. STEPS WERE TAKEN WITH THE CONTRACTOR TO ATTEMPT TO TERMINATE THE CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT ON A NO COST SETTLEMENT AGREEMENT BASIS.
B-181261, SEP 5, 1974
ALTHOUGH CONTRACT FOR 53 UNIT HEATERS SHOULD HAVE BEEN TERMINATED FOR CONVENIENCE OF GOVERNMENT BECAUSE IT WAS ERRONEOUSLY AWARDED TO SECOND LOW BIDDER, GAO DOES NOT RECOMMEND TTERMINATION OF CONTRACT SINCE 20 HEATERS HAVE NOW BEEN DELIVERED, BALANCE WAS TO BE SHIPPED AUGUST 26, AND LOW BIDDER'S DELIVERY OFFERED IN BID WOULD NOT PERMIT INSTALLATION BEFORE ONSET OF WINTER IN ALASKA.
THE T & H COMPAN (T & H), THROUGH ITS ATTORNEY, PROTESTED THE AWARD TO ANOTHER FIRM OF A CONTRACT FOR ITEM 1 OF SOLICITATION DAFA03-74-B-0069, ISSUED BY THE PROCUREMENT DIVISION, FORT RICHARDSON, ALASKA.
ITEM 1 OF THE SOLICITATION CALLED FOR THE FURNISHING OF 53 UNIT HEATERS ON A BRAND NAME OR EQUAL BASIS. EIGHT BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION AND WERE OPENED, AS SCHEDULED, ON MARCH 5, 1974. T & H WAS THE LOW BIDDER AT $232 A UNIT. ON MARCH 11, 1974, THE CONTRACTING OFFICER REQUESTED THE FACILITIES ENGINEER TO DETERMINE WHETHER THE UNIT HEATER OFFERED BY T & H MET THE SPECIFICATIONS. THE FACILITIES ENGINEER DETERMINED THAT THE UNIT HEATER WAS UNDERSIZED COMPARED TO WHAT WAS CALLED FOR BY THE SPECIFICATIONS. AS A RESULT, ON APRIL 4, 1974, A CONTRACT WAS AWARDED TO THE SECOND LOW BIDDER, AMFAC SUPPLY, THAT OFFERED THE BRAND NAME UNIT HEATERS AT $238 A UNIT. BY LETTER OF APRIL 10, 1974, TO THE PROCURING ACTIVITY, T & H PROTESTED THE AWARD. AFTER A REEXAMINATION OF THE SPECIFICATIONS OF THE T & H UNIT HEATER, IT WAS DETERMINED THAT THE HEATER ACTUALLY DID MEET THE TECHNICAL REQUIREMENTS OF THE SOLICITATION.
ON APRIL 30, 1974, STEPS WERE TAKEN WITH THE CONTRACTOR TO ATTEMPT TO TERMINATE THE CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT ON A NO COST SETTLEMENT AGREEMENT BASIS.
HOWEVER, THE CONTRACTOR ADVISED THE CONTRACTING OFFICER THAT THERE WOULD BE COSTS SINCE THE HEATER REQUIRED A SPECIAL COIL THAT IT WAS SURE THE MANUFACTURER HAD EITHER ORDERED OR OBTAINED AND THAT THE MANUFACTURER HAD SHIPPED 10 HEATERS ON APRIL 29, 1974. FURTHER, THE CONTRACTING OFFICER DISCUSSED ESTIMATED CANCELLATION COSTS WITH THE SUPPLY OFFICER AND WAS INFORMED THAT THE COST OF THE HEATER COILS WOULD BE ABOUT $150 A UNIT. BASED ON THE COST OF THE COILS, THE $318 DIFFERENCE BETWEEN THE TOTALS OF THE LOW AND NEXT LOW BIDS, AND THE FACT THAT 10 HEATERS HAD BEEN SHIPPED, A DETERMINATION WAS MADE THAT THE CONTRACTOR SHOULD BE ALLOWED TO PROCEED WITH THE CONTRACT. T & H PROTESTED TO OUR OFFICE UPON BEING ADVISED OF THE DETERMINATION.
IN THE ADMINISTRATIVE REPORT, IT IS CONTENDED THAT THE FACTORS CITED ABOVE, INCLUDING THE FACT THAT CONTRACT PERFORAMNCE WAS SUBSTANTIALLY COMPLETED ON APRIL 30, 1974, SUPPORT THE DETERMINATION THAT WAS MADE. FROM OUR REVIEW, THE CONTRACT WAS NOT SUBSTANTIALLY PERFORMED ON APRIL 30, 1974. THE USING AGENCY HAD NOT RECEIVED ANY OF THE HEATERS AT THAT TIME, AND ALTHOUGH THE MANUFACTURER MAY HAVE SENT THE HEATERS TO THE CONTRACTOR ON APRIL 29, 1974, THE FIRST SHIPMENT OF 10 HEATERS WAS NOT RECEIVED BY THE GOVERNMENT UNTIL JUNE 12, 1974. ANOTHER 10 WERE DELIVERED IN JULY AND, ACCORDING TO INFORMAL ADVICE, THE BALANCE WAS TO BE SHIPPED AUGUST 26. BASED ON THESE FACTS, IT MAY HAVE BEEN IN THE GOVERNMENT'S INTERESTS TO HAVE TERMINATED THE CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT. HOWEVER, WE UNDERSTAND THAT THE HEATERS ARE NEEDED FOR WINTERIZATION OF MILITARY VEHICLES IN ALASKA AND MUST BE INSTALLED BEFORE WINTER, AND WHILE WE WOULD ORDINARILY RECOMMEND TERMINATION FOR CONVENIENCE OF THE REMAINING QUANTITY AND AN AWARD TO T & H (CF. 52 COMP. GEN. 215 (1972); B-180293, APRIL 26, 1974), WE CANNOT OVERLOOK THE FACT THAT THE T & H BID PROVIDED FOR AN 8-WEEK DELIVERY TIME WHICH WOULD NOT NOW PERMIT DELIVERY OF THE HEATERS BEFORE THE ONSET OF WINTER IN ALASKA. THEREFORE, WE DO NOT RECOMMEND TERMINATION OF THE AMFAC CONTRACT.