B-153828, SEP. 4, 1964

B-153828: Sep 4, 1964

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THE PROPOSED AMENDMENTS WOULD CONTINUE THE EXISTING POLICY THAT BID SAMPLES MAY ONLY BE REQUIRED WHERE THE SPECIFICATION IS INADEQUATE. PROVIDED THAT THE INVITATION LISTS THE CHARACTERISTICS WHICH WILL BE EXAMINED. THE GENERAL SERVICES ADMINISTRATION EXPLAINS THAT THESE AMENDMENTS ARE DESIGNED TO OVERCOME THE OBJECTIONS RAISED IN OUR DECISION B-152027. WE CONCLUDED THAT THE USE OF BID SAMPLES TO DETERMINE THE BIDDER'S ABILITY TO MANUFACTURE THE REQUIRED ITEMS WAS NEITHER SANCTIONED BY THE FEDERAL PROCUREMENT REGULATIONS NOR CONSISTENT WITH THE STATUTORY AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURE IN THE CASE OF SMALL BUSINESS. IS NOT INCOMPATIBLE WITH ADVERTISED BIDDING.

B-153828, SEP. 4, 1964

TO THE HONORABLE EUGENE P. FOLEY, ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION:

THIS REFERS TO THE LETTER OF MAY 20, 1964, FROM YOUR GENERAL COUNSEL CONCERNING CERTAIN PROPOSED REVISIONS TO SECTIONS 1-2.202-4 (A) THROUGH (E) OF THE FEDERAL PROCUREMENT REGULATIONS (THE BID SAMPLE PROVISIONS) PROPOSED BY THE GENERAL SERVICES ADMINISTRATION.

THE PROPOSED AMENDMENTS WOULD CONTINUE THE EXISTING POLICY THAT BID SAMPLES MAY ONLY BE REQUIRED WHERE THE SPECIFICATION IS INADEQUATE, BUT WOULD PERMIT THE PROCURING AGENCY TO EXAMINE THE SAMPLE FOR ANY CHARACTERISTICS OF THE SPECIFICATION, PROVIDED THAT THE INVITATION LISTS THE CHARACTERISTICS WHICH WILL BE EXAMINED, AND TO REJECT THE BID AS NONRESPONSIVE IF THE SAMPLE FAILS TO CONFORM TO THE SPECIFICATION AS TO ALL OTHER CHARACTERISTICS. THE GENERAL SERVICES ADMINISTRATION EXPLAINS THAT THESE AMENDMENTS ARE DESIGNED TO OVERCOME THE OBJECTIONS RAISED IN OUR DECISION B-152027, DECEMBER 7, 1963.

IN B-152027, SUPRA, WE CONCLUDED THAT THE USE OF BID SAMPLES TO DETERMINE THE BIDDER'S ABILITY TO MANUFACTURE THE REQUIRED ITEMS WAS NEITHER SANCTIONED BY THE FEDERAL PROCUREMENT REGULATIONS NOR CONSISTENT WITH THE STATUTORY AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURE IN THE CASE OF SMALL BUSINESS.

YOUR GENERAL COUNSEL VIEWS THESE PROPOSED AMENDMENTS AS AN ATTEMPT BY REGULATION TO CONVERT THE MATTER OF CAPACITY INTO A QUESTION OF BID RESPONSIVENESS. HE BELIEVES, ALSO, THAT THE AMENDMENTS WOULD PERMIT A CONTRACTING OFFICER TO ACCEPT TO CHALLENGE THE ACCURACY, REASONABLENESS OR PERTINENCY OF THE TESTS. HE CONCLUDES THAT THE AMENDMENTS WOULD BE CONTRARY TO B-152027, SUPRA.

PRE-AWARD TESTING, AS SUCH, IS NOT INCOMPATIBLE WITH ADVERTISED BIDDING, AND HAS LONG BEEN USED. SEE 17 COMP. GEN. 554; B-150582, JULY 24, 1963. THIS OFFICE HAS EXPRESSLY SANCTIONED THE EXTENSIVE USE OF PRE-AWARD TESTING UNDER THE QUALIFIED PRODUCTS PROCEDURE AND THE TWO STEP BID PROCEDURE. 36 COMP. GEN. 809, 815-816; 40 COMP. GEN. 35; ID. 40. THE GENERAL SERVICES ADMINISTRATION STATES THAT THE PROPOSED AMENDMENTS DO NOT PERMIT TESTS WHICH ARE NOT SET FORTH IN THE SPECIFICATION. WE DO NOT FIND THAT THESE AMENDMENTS PROPOSE A TESTING PROGRAM WHICH WOULD PERMIT THE CONTRACTING OFFICER UNREASONABLY OR ARBITRARILY TO REJECT BIDS. SEE B- 151070, SEPTEMBER 27, 1963.

IN B-152037, SUPRA, WE REAFFIRMED THE RULE THAT BID SAMPLES SHOULD NOT BE USED AS A SUBSTITUTE FOR SPECIFICATIONS EXCEPT WHERE THE SPECIFICATION IS INADEQUATE AND A SAMPLE IS NEEDED TO SHOW EXACTLY WHAT THE BIDDER PROPOSES TO FURNISH. SEE 17 COMP. GEN. 940, 944. UNDER THE PROPOSED AMENDMENTS, BID SAMPLES WOULD BE REQUIRED ONLY WHERE THE SPECIFICATION IS INADEQUATE. THE AMENDMENTS, HOWEVER, WOULD ALLOW THE AGENCY TO EXAMINE A SAMPLE FOR ANY CHARACTERISTIC OF A SPECIFICATION (AS LISTED IN THE INVITATION) AND TO REJECT A BID IF THE SAMPLE FAILS TO MEET THE EXAMINED CHARACTERISTICS. YOUR OFFICE POINTS TO INSTANCES WHERE WE HAVE HELD THAT THE PROCURING AGENCIES MAY NOT REJECT BIDS THROUGH SUCH MEANS AS SPECIFIC EXPERIENCE QUALIFICATIONS (SEE 40 COMP. GEN. 106, 111), OR DESCRIPTIVE DATA REQUIREMENTS (B-150704, APRIL 24, 1963) WITHOUT PRIOR REFERRAL TO SBA UNDER THE COC PROCEDURE. IN THE FORMER CASE WE FOUND THAT THE INVITATION REQUIREMENT IN QUESTION RELATED SOLELY TO THE MATTER OF BIDDERS' RESPONSIBILITY, AND IN THE LATTER THAT THE REQUIREMENT FOR DESCRIPTIVE DATA WAS IMPROPER. ADMITTEDLY, A BID SAMPLE MIGHT FAIL TO CONFORM TO THE SPECIFICATION SIMPLY BECAUSE THE BIDDER LACKS THE ABILITY TO PRODUCE A CONFORMING ITEM. ON THE OTHER HAND, THE NONCONFORMING SAMPLE MIGHT REPRESENT WHAT THE BIDDER INTENDS TO OFFER UNDER A RESULTING CONTRACT IN ANY EVENT, THE SAMPLE WOULD BE USED BY THE AGENCY TO DETERMINED WHETHER THE BIDDER IS OFFERING A PRODUCE CONFORMING TO THE SPECIFICATION. WE DO NOT BELIEVE THAT THE COC PROCEDURE WAS DESIGNED TO DEPRIVE THE PROCURING AGENCIES FROM USING BID SAMPLES IN THE MANNER CONTEMPLATED IN THE PROPOSED REVISIONS.

ACCORDINGLY, WE ARE ADVISING THE GENERAL SERVICES ADMINISTRATION THAT WE HAVE NO OBJECTION TO THE ISSUANCE OF THE PROPOSED AMENDMENTS.

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