B-172635, DEC 22, 1971

B-172635, DEC 22, 1971

BID PROTEST - FAILURE TO PERFORM AS SUBSTANTIATION OF EARLIER PROTEST AFFIRMING DECISION OF SEPTEMBER 22, 1971, DENYING PROTEST OF UNITED STEVEDORING COMPANY, LTD., AGAINST AWARD OF A CONTRACT TO ETO UNDER SOLICITATION ISSUED BY THE DEPARTMENT OF THE ARMY FOR STEVEDORING SERVICE IN THAILAND. PROTESTANT ADVISES THAT CONTRACT BETWEEN ETO AND THE GOVERNMENT PROVIDED THAT THE GOVERNMENT WOULD FURNISH FORK LIFTS TO THE CONTRACTOR UNTIL JULY 1, 1971, AND THEREAFTER IT WOULD BE THE RESPONSIBILITY OF THE CONTRACTOR TO PROVIDE THEM, WHICH WAS NOT DONE BY ETO. THE RECORD INDICATES THAT ETO DID FAIL TO PROVIDE FORK LIFTS AS REQUIRED BY THE CONTRACT AND THAT THE GOVERNMENT HAS ALLOWED ETO TO CONTINUE USING GOVERNMENT OWNED MODELS. HOWEVER, THIS WAS NECESSITATED BY THE REFUSAL OF THE NATIONAL ECONOMIC AND DEVELOPMENT BUREAU OF THAILAND TO ALLOW ETO TO IMPORT FORK LIFTS. FURTHER, THE CONTRACTOR HAS AGREED TO PAY $800,000 FOR THE USE OF THE FORK LIFTS OVER THE CONTRACT PERIOD FROM JULY 1, 1971. UNDER THESE CIRCUMSTANCES, THE COMP. GEN. CANNOT SAY THAT THE CONTRACTING OFFICER ACTED ARBITRARILY OR CONTRARY TO THE INTEREST OF THE UNITED STATES.

TO UNITED STEVEDORING COMPANY, LTD.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 8, 1971, SEEKING CLARIFICATION OF OUR DECISION DATED SEPTEMBER 22, 1971, DENYING YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO ETO UNDER SOLICITATION NO. DAJB29-71-R-0033.

THE REFERENCED DECISION HELD, THAT WHERE, AS HERE, THERE IS NO SUBSTANTIAL BASIS FOR DISTINGUISHING BETWEEN THE TECHNICAL EXCELLENCE OF TWO PROPOSALS MEETING THE GOVERNMENT'S REQUIREMENTS, PRICE SHOULD GENERALLY BE THE CONTROLLING FACTOR, AND THEREFORE THE AWARD TO ETO AS THE FIRM OFFERING THE LOWER COST WAS PROPER. ALSO, WE OBSERVED THAT YOUR COMPLAINTS CONCERNING ETO'S CONTRACT PERFORMANCE MUST NECESSARILY GO TO THE ADMINISTRATION OF THE CONTRACT, THE CONTROL OF WHICH DOES NOT REST WITH OUR OFFICE.

WHILE YOU VOICE DISAGREEMENT WITH OUR SEPTEMBER 22 DECISION YOU HAVE OFFERED NO NEW EVIDENCE OR LEGAL ARGUMENTS TO PERSUADE US THAT THE DECISION WAS IN ERROR AS A MATTER OF FACT OR LAW. YOU CONTEND, HOWEVER, THAT THE ISSUANCE OF A NEW REQUEST FOR PROPOSALS (RFP) NO. SF 18, ON OCTOBER 7, 1971, FOR SIMILAR SERVICES CALLED FOR UNDER THE CONTESTED PROCUREMENT, IS PROOF OF ETO'S BAD PAST PERFORMANCE WHICH OBVIOUSLY SHOWS A DELIBERATE DEFAULT BY ETO OF THE CONTRACT SPECIFICATIONS.

SPECIFICALLY, YOU ADVISE THAT THE CONTRACT BETWEEN ETO AND THE GOVERNMENT PROVIDED THAT THE GOVERNMENT WOULD FURNISH GOVERNMENT-OWNED ELECTRIC FORK LIFTS TO THE CONTRACTOR UNTIL JULY 1, 1971, AND THEREAFTER IT WOULD BE THE RESPONSIBILITY OF THE CONTRACTOR TO SUPPLY THEM, WHICH WAS NOT DONE BY ETO.

THE DEPARTMENT OF THE ARMY HAS ADVISED US THAT, FOLLOWING THE AWARD TO ETO ON MARCH 16, 1971, ETO BY LETTER DATED APRIL 27, 1971, ADVISED THE GOVERNMENT THAT IT WAS HAVING DIFFICULTY IN OBTAINING AMERICAN BUILT ELECTRIC FORK LIFTS IN TIME TO MEET THE JULY 1 DEADLINE. ETO THEREFORE REQUESTED THAT IT BE ALLOWED TO CONTINUE UTILIZING GOVERNMENT OWNED FORK LIFTS THROUGH SEPTEMBER 30, 1971. AFTER NEGOTIATIONS BETWEEN THE PARTIES, A MODIFICATION TO THE CONTRACT WAS EXECUTED PERMITTING ETO TO CONTINUE TO USE THE GOVERNMENT FURNISHED EQUIPMENT UNTIL OCTOBER 1, 1971, IN CONSIDERATION OF ETO PAYING TO THE GOVERNMENT THE SUM OF 200,000 BAHT AND MAINTAINING THE EQUIPMENT IN GOOD WORKING ORDER FOR THE PERIOD OF THE MODIFICATION.

FOLLOWING RECEIPT OF A LETTER DATED SEPTEMBER 24, 1971, FROM ETO TO THE EFFECT THAT THE NATIONAL ECONOMIC AND DEVELOPMENT BUREAU OF THAILAND HAD NOT APPROVED THE PROCUREMENT OF FORK LIFTS BY ETO DUE TO THE LARGE INVESTMENT REQUIRED FOR THE SHORT REMAINING PERIOD OF CONTRACT PERFORMANCE, ON SEPTEMBER 30, 1971, THE CONTRACTING OFFICER ISSUED A "CURE" LETTER TO ETO CITING ITS FAILURE TO PROVIDE FORK LIFTS AND ADVISING THAT THE GOVERNMENT MIGHT TERMINATE THE CONTRACT IN WHOLE OR IN PART. THEREAFTER, IN ORDER TO TEST THE MARKET TO DISCOVER WHETHER ANY OTHER AVAILABLE SOURCES WOULD BE INTERESTED IN PERFORMING THE REMAINING STEVEDORING SERVICES REQUIRED BY THE CONTRACT, RFP NO. SF 18 WAS ISSUED ON OCTOBER 7, 1971.

AFTER REVIEW OF THE OFFERS RECEIVED, HIGHER AUTHORITY RECOMMENDED TO THE CONTRACTING OFFICER THAT AN ATTEMPT SHOULD BE MADE TO RESOLVE THE PROBLEM BY MEANS OF A SUPPLEMENTAL AGREEMENT TO ETO'S CONTRACT. SUBSEQUENT NEGOTIATIONS RESULTED IN A MODIFICATION OF THE CONTRACT TO PERMIT ETO TO UTILIZE THE GOVERNMENT-FURNISHED EQUIPMENT UNTIL TERMINATION OF THE CONTRACT IN MARCH 1972, IN CONSIDERATION OF ETO PAYING TO THE GOVERNMENT A FURTHER SUM OF 600,000 BAHT FOR THE BALANCE OF THE CONTRACT PERIOD.

BASED UPON THE FOREGOING WE CANNOT SAY THAT THE CONTRACTING OFFICER, GUIDED BY THE FACTORS TO BE CONSIDERED BEFORE RESORTING TO DEFAULT ACTION (ASPR 8-602.3), ACTED ARBITRARILY OR CONTRARY TO THE BEST INTEREST OF THE GOVERNMENT. WHILE THE FOREGOING RECITATION OF THE FACTS DOES NOT REVEAL THE INTENTIONS OF THE CONTRACTOR AT THE TIME OF CONTRACT AWARD, IT IS FELT THAT ETO'S FAILURE TO SUPPLY ITS OWN FORK LIFTS WILL BE ADEQUATELY OFFSET BY THE FACT THAT ETO WILL BE REQUIRED TO PAY TO THE GOVERNMENT THE SUM OF 800,000 BAHT FOR USE OF THE GOVERNMENT EQUIPMENT. IN ANY EVENT, THERE IS NO EVIDENCE WHATEVER THAT THE GOVERNMENT ACTED OTHER THAN REASONABLY UNDER THE CIRCUMSTANCES. ABSENT SUCH ACTION, MODIFICATION OF ETO'S CONTRACT IS A MATTER OF CONTRACT ADMINISTRATION WHICH IS NOT WITHIN THE PURVIEW OF OUR OFFICE TO QUESTION.

IN VIEW OF THE FOREGOING WE MUST CONCLUDE THAT OUR DECISION OF SEPTEMBER 22, 1971, WAS NOT ERRONEOUS, AND CONSEQUENTLY THAT DECISION IS AFFIRMED.