B-154899, APR. 26, 1965, 44 COMP. GEN. 644

B-154899: Apr 26, 1965

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IS A MATERIAL FACTOR THAT AFFECTS THE EVALUATED BID PRICE. WHEN PROPOSALS WERE SOLICITED FROM 116 SOURCES. WERE DETERMINED TO BE ACCEPTABLE. AN IFB WAS ISSUED ON JUNE 22. DISCLOSURE WAS MADE THAT AFTER THE IFB HAD BEEN ISSUED AND THE BIDS HAD BEEN OPENED. WHICH WAS DATED FEBRUARY 3. UNDER WHICH ITTFL WAS AGAIN THE LOW BIDDER WITH A PRICE OF $6. PROVIDED THAT THE USE OF THE SPECIAL TOOLING NOTED ABOVE WILL HAVE NO IMPACT ON DELIVERY OR COSTS OF CONTRACT DA 36-039 AMC-04880 AND DA 36-039 SC-88783. AUTHORIZATION IS GRANTED ITT FEDERAL LABORATORIES TO UTILIZE SPECIAL TOOLING FOR THE USE CONTAINED IN 16 FEBRUARY 1965 LETTER ETA- 1546. DA-36-039-SC-88783 IS REPORTED TO BE A COST-PLUS INCENTIVE FEE SUPPLY CONTRACT UNDER WHICH THE TOOLING WAS ORIGINALLY ACQUIRED BY ITTFL AT GOVERNMENT COST.

B-154899, APR. 26, 1965, 44 COMP. GEN. 644

BIDS - GOVERNMENT PROPERTY - EVALUATION - USE AUTHORIZATION UNDER A PROCUREMENT READVERTISED WHEN SUFFICIENT FUNDS BECAME AVAILABLE FOR THE TOTAL PROCUREMENT ON A SINGLE-YEAR FIXED-PRICE BASIS, THE OFFER OF THE LOW BIDDER, CONSIDERED NONRESPONSIVE UNDER THE CANCELED TWO-STEP MULTI -YEAR PROCUREMENT ARRANGEMENT, TO USE THE SPECIAL TOOLING UTILIZED UNDER OTHER GOVERNMENT CONTRACTS AND MADE AVAILABLE TO IT FOR THE PROPOSED CONTRACT BY LETTER APPROVAL DOES NOT MEET THE "EXISTING CONTRACT OR AGREEMENT" REQUIREMENT FOR THE USE OF SPECIAL TOOLING CONTEMPLATED BY THE READVERTISED INVITATION, THE LETTER PROVIDING FOR THE USE OF THE GOVERNMENT FACILITIES CONSTITUTING NOTHING MORE THAN THE "CONCURRENCE" REQUIRED BY PARAGRAPH 13-402 (A) (II) (C) OF THE ARMED SERVICES PROCUREMENT REGULATION, AND IN ADDITION THE FAILURE OF THE BIDDER TO FURNISH THE ACQUISITION COSTS FOR THE SPECIAL TOOLING REQUIRED BY THE INVITATION RENDERS THE LOW BID NONRESPONSIVE, AS THE DATA, NECESSARY FOR THE ELIMINATION OF THE COMPETITIVE ADVANTAGE RESULTING FROM THE FREE USE OF GOVERNMENT PROPERTY, IS A MATERIAL FACTOR THAT AFFECTS THE EVALUATED BID PRICE.

TO THE SECRETARY OF THE ARMY, APRIL 26, 1965:

BY LETTER DATED MARCH 18, 1965, THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (INSTALLATION AND LOGISTICS) SUBMITTED FOR OUR DECISION A PROTEST FILED BY ITT-FEDERAL LABORATORIES (ITTFL) AGAINST AWARD OF A CONTRACT TO BENDIX CORPORATION UNDER INVITATION FOR BIDS NO. ANC/E/-36 039-64-598-U (STEP II) (REISSUE), ISSUED FEBRUARY 3, 1965, BY THE PHILADELPHIA PROCUREMENT DIVISION, PROCUREMENT AND PRODUCTION DIRECTORATE, UNITED STATES ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA, FOR THE PURCHASE OF RADIO SETS.

THE PROCUREMENT IN QUESTION ORIGINATED AS A TWO-STEP FORMALLY ADVERTISED MULTI-YEAR PROCUREMENT ON MARCH 27, 1964, WHEN PROPOSALS WERE SOLICITED FROM 116 SOURCES. OF THE SIX TECHNICAL PROPOSALS RECEIVED BY THE PROCURING AGENCY, ONLY TWO, THE PROPOSALS OF ITTFL AND BENDIX, WERE DETERMINED TO BE ACCEPTABLE. ACCORDINGLY, AN IFB WAS ISSUED ON JUNE 22, 1964, TO ITTFL AND BENDIX REQUESTING BIDS ON A SINGLE-YEAR PROGRAM QUANTITY AS WELL AS A TWO-YEAR PROGRAM QUANTITY.

ITTFL SUBMITTED THE LOW MULTI-YEAR BID BUT FAILED TO QUOTE A PRICE FOR THE SINGLE-YEAR REQUIREMENT. ACCORDINGLY, BENDIX PROTESTED AGAINST AWARD TO ITTFL. IN OUR DECISION B-154899 OF DECEMBER 22, 1964, 44 COMP. GEN. 347, WE HELD THAT ITTFL'S FAILURE TO BID ON THE SINGLE-YEAR QUANTITY, AS REQUIRED BY THE IFB AND BY ARMED SERVICES PROCUREMENT REGULATION 1- 322.2/II) GOVERNING MULTI-YEAR PROCUREMENTS, RENDERED THE ITTFL BID NONRESPONSIVE AND, THEREFORE, NECESSITATED ITS REJECTION.

IN AN ADMINISTRATIVE REPORT DATED JANUARY 11, 1965, ON A SUBSEQUENT PROTEST BY BENDIX AGAINST THE REFUSAL OF THE CONTRACTING OFFICER TO ACCEPT A REDUCED BID FROM BENDIX, DISCLOSURE WAS MADE THAT AFTER THE IFB HAD BEEN ISSUED AND THE BIDS HAD BEEN OPENED, SUFFICIENT FUNDS HAD BECOME AVAILABLE TO PERMIT PURCHASE OF THE TOTAL PROCUREMENT NEEDS UNDER A SINGLE-YEAR FIXED-PRICE CONTRACT RATHER THAN UNDER A MULTI YEAR ARRANGEMENT. ACCORDINGLY, BY DECISION B-154899, DATED JANUARY 25, 1965, AND WITHOUT PASSING ON THE PROPRIETY OF CONSIDERATION OF A REDUCED BID FROM BENDIX, WE CONCURRED WITH THE ADMINISTRATIVE RECOMMENDATION THAT THE IFB BE CANCELED AND THE PROCUREMENT READVERTISED.

THE PRESENT PROTEST ARISES UNDER THE READVERTISED IFB, WHICH WAS DATED FEBRUARY 3, 1965, AND UNDER WHICH ITTFL WAS AGAIN THE LOW BIDDER WITH A PRICE OF $6,495,000. BENDIX BID $6,644,891. IN ITS BID ITTFL LISTED SPECIAL TOOLING "EXISTING UNDER CONTRACT DA-36-039- AMC/E/ 04880," WHICH IT PROPOSED TO USE IN THE PERFORMANCE OF THE PROPOSED CONTRACT, CITING PARAGRAPH 3.A./1) OF PROVISION W OF THE BID SCHEDULE. IN ADDITION, ITTFL FURNISHED A LETTER DATED FEBRUARY 17 (ONE DAY PRIOR TO THE SCHEDULED DATE OF BID OPENING) FROM THE CONTRACTING OFFICER ADMINISTERING CONTRACT NO. DA -04880, A NEGOTIATED FIXED-PRICE SUPPLY CONTRACT, READING AS FOLLOWS:

REFERENCE YOUR LETTER DATED 16 FEBRUARY 1965, ETA-1546, REQUESTING AUTHORIZATION TO UTILIZE ON A NON-INTERFERENCE BASIS SPECIAL TOOLING FURNISHED BY THE GOVERNMENT IN CONNECTION WITH PERFORMANCE UNDER CONTRACT DA 36-039 AMC-04880 WITH RESPECT TO IFB AMC/E/-36-039-64-598 U.

PROVIDED THAT THE USE OF THE SPECIAL TOOLING NOTED ABOVE WILL HAVE NO IMPACT ON DELIVERY OR COSTS OF CONTRACT DA 36-039 AMC-04880 AND DA 36-039 SC-88783, AUTHORIZATION IS GRANTED ITT FEDERAL LABORATORIES TO UTILIZE SPECIAL TOOLING FOR THE USE CONTAINED IN 16 FEBRUARY 1965 LETTER ETA- 1546.

CONTRACT NO. DA-04880 AUTHORIZES ITTFL, IN CONSIDERATION OF A REDUCED CONTRACT PRICE, TO UTILIZE THE TOOLING RENT-FREE "IN THE PERFORMANCE OF HIS CONTRACT," WHEREAS CONTRACT NO. DA-36-039-SC-88783 IS REPORTED TO BE A COST-PLUS INCENTIVE FEE SUPPLY CONTRACT UNDER WHICH THE TOOLING WAS ORIGINALLY ACQUIRED BY ITTFL AT GOVERNMENT COST.

THE IFB PROVISIONS REGARDING USE OF GOVERNMENT PROPERTY READ AS FOLLOWS:

W. FACILITIES AND SPECIAL TOOLING

1. DEFINITIONS. FOR PURPOSES OF THIS CLAUSE, THE FOLLOWING DEFINITIONS APPLY:

A. "SPECIAL TOOLING" MEANS ALL JIGS, DIES, FIXTURES, MOLDS, PATTERNS, SPECIAL TAPS, SPECIAL GAUGES, SPECIAL TEST EQUIPMENT, OTHER SPECIAL EQUIPMENT AND MANUFACTURING AIDS, WHICH ARE OF SUCH A SPECIALIZED NATURE THAT, WITHOUT SUBSTANTIAL MODIFICATION OR ALTERATIONS, THEIR USE IS LIMITED TO THE PRODUCTION OF SUCH SUPPLIES OR PARTS THEREOF, OR THE PERFORMANCE OF SUCH SERVICES, AS ARE PECULIAR TO THE NEEDS OF THE GOVERNMENT. THE TERM DOES NOT INCLUDE: (I) CONSUMABLE SMALL TOOLS, OR (II) GENERAL OR SPECIAL MACHINE TOOLS, OR SIMILAR CAPITAL ITEMS.

B. "FACILITIES" ARE PROPERTY, OTHER THAN MATERIAL OR SPECIAL TOOLING, OF USE FOR THE PERFORMANCE OF A CONTRACT OR SUBCONTRACT. THEY INCLUDE REAL PROPERTY AND RIGHTS THEREIN, SUCH AS BUILDINGS, STRUCTURES, IMPROVEMENTS AND UTILITY SYSTEMS. THEY ALSO INCLUDE PLANT EQUIPMENT SUCH AS MACHINERY, EQUIPMENT, FURNITURE, VEHICLES, MACHINE TOOLS, AND ACCESSORY AND AUXILIARY ITEMS.

2. GENERAL CONDITIONS FOR USE OF GOVERNMENT FACILITIES AND TOOLING.

A. EXISTING GOVERNMENT FACILITIES AND SPECIAL TOOLING MAY BE USED BY BIDDERS AND OFFERORS AND THEIR SUBCONTRACTORS TO PERFORM THIS CONTRACT SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN PARAGRAPHS 3 THROUGH 5 BELOW. THERE ARE THREE METHODS OF ENABLING SUCH USE OF THIS GOVERNMENT PROPERTY:

(1) EXISTING CONTRACTS OR AGREEMENTS MAY ALREADY AUTHORIZE THE USE OF THE GOVERNMENT PROPERTY, USUALLY IN RETURN FOR A RENTAL OR USE CHARGE OR OTHER CONSIDERATION. SEE PARAGRAPH 3.

(2) GOVERNMENT FACILITIES AND TOOLING MAY BE OFFERED FOR USE ON A NO- CHARGE BASIS BY THIS SOLICITATION, AND THE BID OR PROPOSAL MAY SPECIFY THAT ALL OR SOME PART OF THE OFFERED PROPERTY WILL BE USED TO PERFORM THE CONTRACT. SEE PARAGRAPH 4.

(3) BIDDERS OR OFFERORS AND THEIR SUBCONTRACTORS MAY SUBMIT BIDS OR PROPOSALS PREDICATED UPON THE USE ON A NO-CHARGE BASIS OF GOVERNMENT FACILITIES AND TOOLING WHICH ARE NEITHER ALREADY AUTHORIZED FOR USE NOR OFFERED FOR USE BY THE SOLICITATION. SEE PARAGRAPH 5.

D. THE GOVERNMENT RESERVES THE RIGHT OF SUCH FLEXIBILITY IN EVALUATION AS IS NECESSARY TO ASSURE PLACEMENT OF THE CONTRACT IN THE BEST INTEREST OF THE GOVERNMENT, INCLUDING RESERVATION OF THE RIGHT TO OVERRIDE EVALUATION FACTORS IF THE OUT-OF-POCKET COSTS WOULD BE SUBSTANTIALLY HIGHER BY REASON THEREOF WITHOUT COMMENSURATE ADVANTAGE TO THE GOVERNMENT.

3. PROPERTY USE AUTHORIZED BY EXISTING CONTRACTS.

A. WHERE BIDDERS OR OFFERORS AND THEIR SUBCONTRACTORS PROPOSE TO USE, TO PERFORM THIS CONTRACT, EXISTING GOVERNMENT FACILITIES AND SPECIAL TOOLING HELD BY THEM PURSUANT TO A CONTRACT OR AGREEMENT WHICH AUTHORIZES THE PROPERTY'S USE ON AND FOR THE LIFE OF THIS PROPOSED CONTRACT, THE BIDDER OR OFFEROR SHALL:

(1) SPECIFICALLY IDENTIFY THE ITEMS OF FACILITIES AND TOOLING PROPOSED TO BE USED, AND THE CONTRACT NUMBER OR OTHER IDENTIFICATION OF THE GOVERNMENT CONTRACTS OR AGREEMENTS WHICH GRANT AUTHORITY FOR USE; AND

(2) UPON REQUEST, SUBMIT TO THE CONTRACTING OFFICER EVIDENCE THAT, AT THE TIME FOR BID OPENING OR FOR SUBMISSION OF PROPOSALS, AUTHORITY DID EXIST FOR THE FULL PROPOSED USE OF THE GOVERNMENT PROPERTY.

4. PROPERTY USE OFFERED BY SOLICITATION.

WHERE BIDDERS OR OFFERORS AND THEIR SUBCONTRACTORS PROPOSE TO USE, TO PERFORM THIS CONTRACT, ALL OR SOME PORTION OF GOVERNMENT FACILITIES AND SPECIAL TOOLING OFFERED FOR SUCH USE ON A NO-CHARGE BASIS BY THIS SOLICITATION, THE BIDDER OR OFFEROR SHALL IDENTIFY, PURSUANT TO PARAGRAPH 5A/2) BELOW, THE GOVERNMENT PROPERTY PROPOSED TO BE USED, AND SHALL FURNISH AN EVALUATION FACTOR COMPUTATION PREPARED IN ACCORDANCE WITH PARAGRAPH 5A/3).

5. PROPERTY USE PROPOSED BY BIDDER OR OFFEROR.

A. WHERE BIDDERS OR OFFERORS AND THEIR SUBCONTRACTORS PROPOSE TO USE ON A NO-CHARGE BASIS, TO PERFORM THIS CONTRACT, GOVERNMENT FACILITIES AND SPECIAL TOOLING NOT ALREADY AUTHORIZED FOR USE PURSUANT TO EXISTING CONTRACTS OR BY OFFER FOR USE ON THIS SOLICITATION, THE BIDDER OR OFFEROR SHALL FURNISH THE USE AUTHORIZATION, PROPERTY IDENTIFICATION, AND EVALUATION FACTOR COMPUTATION REQUIRED BY SUBPARAGRAPHS (1), (2), AND (3) BELOW AS PART OF THE BID OR PROPOSAL.

(1) USE AUTHORIZATION. THE BIDDER OR OFFEROR WILL OBTAIN FROM EACH CONTRACTING OFFICER OR OTHER OFFICIAL HAVING COGNIZANCE OVER THE THE GOVERNMENT FACILITIES AND SPECIAL TOOLING PROPOSED TO BE USED, AN AUTHORIZATION GRANTING USE OF THE PROPERTY TO PERFORM ANY CONTRACT TO BE AWARDED UNDER THIS SOLICITATION. SUCH AUTHORIZATION MUST IDENTIFY THE ITEMS OF FACILITIES AND TOOLING PROPOSED TO BE USED AND THE CONTRACT NUMBER OR OTHER IDENTIFICATION OF THE GOVERNMENT CONTRACTS OR AGREEMENTS UNDER WHICH THE PROPERTY IS ADMINISTERED. TWO COPIES OF THE USE AUTHORIZATION, SIGNED BY THE COGNIZANT CONTRACTING OFFICER OR OTHER OFFICIAL, WILL BE FORWARDED AS PART OF THE BID OR PROPOSAL.

(2) PROPERTY IDENTIFICATION. THE BIDDER OR OFFEROR WILL SPECIFICALLY IDENTIFY THE ITEMS OF GOVERNMENT FACILITIES AND SPECIAL TOOLING WHICH IT OR ITS SUBCONTRACTORS PROPOSE TO USE AND WHICH IS AUTHORIZED FOR USE IN ACCORDANCE WITH 5A/1) ABOVE. TWO COPIES OF THE PROPERTY IDENTIFICATION, SIGNED BY THE COMPANY OFFICIAL AUTHORIZED TO SIGN BIDS, WILL BE FORWARDED AS PART OF THE BID OR PROPOSAL, FURNISHING THE FOLLOWING INFORMATION:

CHART

IDENTIFICATION OF

APPLICABLE FACILITIES AND TOTAL GOVT ACQUISI-

CONTRACT TOOLING TO BE USED TION COST OF COL (2)

ITEM NO/S) FOR COL (1) ITEM/S) FACILITIES AND TOOLING

(1) (2) (3)

CONTRACT NO/S)

UNDER WHICH FACILITIES

AND TOOLING

ADMINISTERED

(4)

NOTE 1: COLUMN (1) WILL LIST THOSE CONTRACT ITEMS OR GROUPS OF ITEMS WHICH THE SOLICITATION STATES ARE SUSCEPTIBLE TO SEPARATE AWARD. THE COLUMN (3) COSTS WILL INCLUDE ANY INSTALLATION OR TRANSPORTATION COSTS APPLICABLE TO THE FACILITIES AND TOOLING.

(3) EVALUATION FACTOR COMPUTATION. THE BIDDER OR OFFEROR WILL COMPUTE AN EVALUATION FACTOR TO BE USED, DURING THE EVALUATION TO DETERMINE THE LOW BIDDER OR OFFEROR, AS A BASIS FOR ELIMINATING COMPETITIVE ADVANTAGE ARISING FROM THE USE OF THE GOVERNMENT FACILITIES AND TOOLING. TWO COPIES OF THE EVALUATION FACTOR COMPUTATION, SIGNED BY THE COMPANY OFFICIAL AUTHORIZED TO SIGN BIDS, WILL BE FORWARDED AS PART OF THE BID OR PROPOSAL, FURNISHING THE FOLLOWING INFORMATION:

CHART

TOTAL GOVT ACQUISITION

COST OF FACILITIES (F)

APPLICABLE CONTRACT AND TOOLING (T) USED

ITEM NO/S) FOR COL (1) ITEM/S)

(1) (2)

ITEM (*) (F) $

(T) $

EVALUATION FACTOR (TO

FORMULA (BY WHICH ADD TO APPLICABLE

TO MULTIPLY EACH COL CONTRACT ITEM PRICES)

(2) ENTRY)

(3) (4)

X .01 X (*) MONTHS $

X .0167 X (*) MONTHS $

TOTAL ITEM EVAL. FACTOR ------------------

*NOTE 1: THE SOLICITATION WILL SUPPLY DATA AS TO THE CONTRACT

ITEM/S) OR GROUPS OF ITEMS TO BE SHOWN SEPARATELY AS BEING SUSCEPTIBLE

TO SEPARATE AWARD, PLUS THE NUMBER OF MONTHS, REPRESENTING EACH ITEM'S

"PRODUCTION PERIOD" TO BE ENTERED IN THE FORMULA UNDER COLUMN (3).

NOTE 2: WHERE THE BIDDER OR OFFEROR CONSIDERS THAT THE FACILITIES

OR TOOLING WILL BE USED CONCURRENTLY ON TWO OR MORE CONTRACTS, BUT IS

UNABLE TO DETERMINE THE EXACT OVERLAP DUE TO UNCERTAINTY AS TO THE DATE

OF CONTRACT AWARD, THE EVALUATION FACTOR COMPUTATION MAY INCLUDE DATA

AS TO THE CONTRACT ITEMS AND ACQUISITION COSTS OF THE FACILITIES AND

TOOLING ON WHICH CONCURRENT USE IS EXPECTED, AS WELL AS AN INDICATION

OF THE PARTICULAR MONTHS OF CONTRACT OVERLAP. THE CONTRACTING OFFICER,

IN SUCH INSTANCES, MAY REDUCE THE EVALUATION FACTOR APPLIED TO THESE

CONTRACT ITEMS TO REFLECT THAT PORTION OF THE USAGE OF THE FACILITIES

AND TOOLING ALLOCABLE TO THIS CONTRACT BASED ON THE DATE OF THE AWARD

DOCUMENT.

B. CONTRACTS ISSUED PURSUANT TO THE AUTHORIZATIONS AND EVALUATIONS

SET FORTH IN THIS PARAGRAPH 5 SHALL STATE THAT THE CONTRACTOR AND

APPLICABLE SUBCONTRACTORS ARE AUTHORIZED TO USE, WITHOUT CHARGE,

SPECIFICALLY IDENTIFIED ITEMS OF GOVERNMENT FACILITIES AND SPECIAL

TOOLING. IT IS THE CONTENTION OF ITTFL THAT THE LETTER OF FEBRUARY 17 FROM THE CONTRACTING OFFICER ADMINISTERING CONTRACT NO. DA-04880 WAS AN "EXISTING CONTRACT OR AGREEMENT" ALREADY AUTHORIZING THE USE OF THE TOOLING IN QUESTION, WITHIN THE MEANING OF PARAGRAPH 2.A./1) OF THE ABOVE- QUOTED PROVISIONS, AND THAT IT WAS THEREFORE NECESSARY FOR ITS BID TO COMPLY ONLY WITH THE REQUIREMENTS OF PARAGRAPH 3./A), WHICH DID NOT CALL FOR THE COMPUTATION OR USE OF ANY EVALUATION FACTOR IN CONNECTION WITH ITS BID.

THE CONTRACTING OFFICER, HOWEVER, CONSIDERED THE FEBRUARY 17 LETTER TO BE MERELY A USE AUTHORIZATION OR CONSENT CONTEMPLATED BY PARAGRAPH 2.A./3), AND THEREFORE REQUESTED ITTFL TO CLARIFY HOW THE TOOLING WAS ACQUIRED AND THE TERMS UNDER WHICH IT WAS HELD.

ITTFL'S REPLY BY LETTER OF FEBRUARY 19 READS, IN PERTINENT PART, AS FOLLOWS:

THE SPECIAL TOOLING LIST ENCLOSED WITH OUR BID DATED FEBRUARY 17, 1965 WAS SUBMITTED IN ACCORDANCE WITH PARAGRAPH 3.A/1) OF PROVISION W PURSUANT TO PARAGRAPH 2.A/1) OF PROVISION W. THE NEGOTIATED FIXED PRICE OF CONTRACT NO. 36-039-AMC/E/-04880 INCLUDED AS PART OF THE CONSIDERATION THE USE OF THE SPECIAL TOOLING REFERRED TO ABOVE.

TRANSMITTED HEREWITH ARE TWO (2) COPIES OF OUR LETTER DATED FEBRUARY 16, 1965 TO LT. COL. D. R. DECAMERA, CONTRACTING OFFICER OF THE AFOREMENTIONED CONTRACT, WHICH REQUESTED THAT SPECIAL TOOLING AUTHORIZED FOR USE ON THAT CONTRACT BE AUTHORIZED FOR USE ON AND FOR THE LIFE OF THE CONTRACT PROPOSED BY THE SUBJECT IFB.

THIS LETTER WILL ALSO CONFIRM THE DELIVERY TO YOUR OFFICE ON FEBRUARY 18, 1965 OF LT. COL. DECAMARA'S ORIGINAL LETTER DATED FEBRUARY 17, 1965 AUTHORIZING SUCH USE.

UPON CONSIDERATION OF THE FOREGOING, THE CONTRACTING OFFICER CONCLUDED THAT ITTFL'S BID FELL WITHIN THE PURVIEW OF PARAGRAPH 2.A. (3) OF PROVISION W, AND THAT ITTFL SHOULD HAVE FURNISHED THE EVALUATION FACTORS PROVIDED FOR IN PARAGRAPH 5. SINCE THE INFORMATION WAS NOT FURNISHED WITH THE BID, THE CONTRACTING OFFICER FURTHER CONCLUDED THAT THERE WAS NO WAY ITTFL'S BID COULD PROPERLY BE EVALUATED FOR COMPARISON WITH THE BENDIX BID. FOR THIS REASON, THE BID OF ITTFL WAS REJECTED AS NONRESPONSIVE AND AWARD WAS MADE TO BENDIX ON MARCH 2, 1965, IN THE TOTAL AMOUNT OF $6,644,891.

IN SUPPORT OF ITS CONTENTION THAT THE FEBRUARY 17 LETTER CONSTITUTES AN "EXISTING CONTRACT OR AGREEMENT" WITHIN THE MEANING OF PARAGRAPH 2.A./1) OF PROVISION W, ITTFL ARGUES THAT IT IS SUPPORTED BY A CONSIDERATION MOVING TO THE GOVERNMENT, CONSISTING OF THE REDUCTION IN PRICE WHICH ITTFL GRANTED UNDER CONTRACT NO. DA-04880 IN RETURN FOR AUTHORIZATION TO USE THE TOOLING IN PERFORMANCE OF THAT CONTRACT. IT IS FURTHER CONTENDED THAT EVEN IF ITTFL'S BID COMES UNDER PARAGRAPH 2.A./3), THE ACQUISITION COSTS OF THE TOOLING REQUIRED BY THE EVALUATION PROVISIONS OF PARAGRAPH 5 ARE AVAILABLE TO THE GOVERNMENT FROM ITS OWN RECORDS IN THE PHILADELPHIA PROCUREMENT DIVISION. IN ANY EVENT, IT IS CONTENDED THAT, SINCE THE USE OF THE EVALUATION FACTOR WOULD ONLY HAVE INCREASED ITTFL'S BID BY A MAXIMUM OF $62,896.80, BASED UPON AN ACQUISITION COST OF $94,156.74, ITTFL WOULD STILL HAVE BEEN THE LOW BIDDER BY $86,994.20 AND, THEREFORE, SHOULD BE AWARDED THE CONTRACT UNDER THE OUT-OF-POCKET PROVISIONS IN PARAGRAPH 2.D. OF PROVISION W.

COMPARING THE LANGUAGE OF PARAGRAPHS 2.A./1) AND 2.A./3), IT APPEARS THAT THERE MIGHT BE SOME JUSTIFICATION FOR CONCLUDING THAT 2.A./1) IS APPLICABLE TO ANY CASE IN WHICH AUTHORITY TO USE GOVERNMENT PROPERTY EXISTS AT THE TIME OF BID OPENING, AND THAT 2.A./3) APPLIES ONLY WHEN THE AUTHORITY TO USE HAS NOT BEEN GRANTED AT THAT TIME. HOWEVER, WHEN REFERENCE IS MADE TO PARAGRAPH 5.A, WHICH IS REFERRED TO BY, AND MUST BE READ IN CONNECTION WITH, 2.A./3) IT BECOMES OBVIOUS THAT 2.A./3) CANNOT BE INTERPRETED AS SUGGESTED ABOVE, SINCE 5.A SPECIFICALLY REQUIRES THAT "USE AUTHORIZATION" FOR THE PROPERTY OFFERED BY THE BIDDER UNDER 2.A./3) MUST BE FURNISHED "AS PART OF THE BID OR PROPOSAL.' IN OTHER WORDS, SUCH AUTHORIZATION MUST HAVE BEEN GRANTED OR CREATED SO AS TO BE IN EFFECT AT THE TIME OF BID OPENING.

IF, THEN, THE TIME OF AUTHORIZATION IS NOT THE FACTOR FOR DISTINGUISHING BETWEEN THE APPLICABILITY OF 2.A./1) AND 2.A./3), WHAT OTHER DIFFERENTIATING FEATURE CAN BE FOUND? AS URGED BY ITTFL, THE PRESENCE OR ABSENCE OF A RENTAL OR USE CHARGE CANNOT BE CONSIDERED AS FURNISHING THE TEST, SINCE 2.A./1), BY USE OF THE WORD "USUALLY" IN REFERRING TO A RENTAL OR USE CHARGE, SEEMS CLEARLY TO RECOGNIZE THAT SUCH A CHARGE IS NOT ESSENTIAL TO A CONTRACT OR AGREEMENT CONTEMPLATED BY THAT PARAGRAPH.

THE ONLY REMAINING BASIS FOR DISTINGUISHING BETWEEN THE USE OF 2.A./1) AND 2.A./3) MUST THEREFORE BE THE KIND OR CHARACTER OF THE AUTHORIZATION. PARAGRAPH 2.A./1) SPECIFICALLY LIMITS ITS APPLICABILITY TO CASES IN WHICH "EXISTING CONTRACTS OR AGREEMENTS" AUTHORIZE THE USE OF THE GOVERNMENT PROPERTY INVOLVED. SINCE 2.A./3) APPLIES TO USE (ON A NO-CHARGE BASIS) OF PROPERTY NOT ALREADY AUTHORIZED FOR USE, BUT IS COUPLED WITH THE REQUIREMENT OF PARAGRAPH 5 THAT THE "USE AUTHORIZATION" MUST BE FURNISHED AS PART OF THE BID OR PROPOSAL, THE ONLY POSSIBLE CONCLUSION IS THAT THE TERM "USE AUTHORIZATION" IN 5 IS AN AUTHORIZATION FOUND IN SOMETHING OTHER THAN AN EXISTING CONTRACT OR AGREEMENT CONTEMPLATED BY 2.A./1).

LOOKING AT THE LETTER OF FEBRUARY 17 RELIED UPON BY ITTFL AS ITS AUTHORITY TO USE GOVERNMENT PROPERTY, IT APPEARS TO FALL SHORT OF BEING A CONTRACT OR AGREEMENT IN THE STRICT LEGAL SENSE, IN THAT IT DOES NOT ON ITS FACE PURPORT TO IMPOSE ON THE BIDDER ANY OBLIGATION CORRELATIVE TO THE RIGHT GRANTED, NOR DOES REFERENCE TO THE CONTRACT UNDER WHICH THE PROPERTY WAS FURNISHED TO THE BIDDER (DA 36-039-AMC- 04880) DISCLOSE ANY BASIS BY WAY OF OBLIGATION OR OTHER CONSIDERATION TO SUPPORT THE PURPORTED GRANT OF THE RIGHT OF USE AS A BINDING OBLIGATION OF THE GOVERNMENT. IT WOULD THEREFORE APPEAR THAT THE LETTER CREATED NO MORE THAN A BARE REVOCABLE LICENSE OR OFFER OF A RIGHT, WHICH WOULD BECOME BINDING ONLY UPON ACCEPTANCE BY THE GOVERNMENT OF THE ITTFL BID CONDITIONED UPON THE USE OF THE PROPERTY. CONSIDERING THE PROVISIONS OF PART 4 OF SECTION XIII OF THE ARMED SERVICES PROCUREMENT REGULATION (NOVEMBER 1964) WHICH DECLARES THE POLICY AND PRESCRIBES THE PROCEDURES GOVERNING THE USE BY CONTRACTORS OF GOVERNMENT "PRODUCTION AND RESEARCH" PROPERTY (AS DISTINGUISHED FROM GOVERNMENT-OWNED FACILITIES) FOR THE PERFORMANCE OF GOVERNMENT CONTRACTS, WE BELIEVE THAT THE FEBRUARY 17 LETTER CONSTITUTES NOTHING MORE THAN THE "CONCURRENCE" IN THE USE OF THE PROPERTY FOR THE PROPOSED CONTRACT WHICH IS REQUIRED BY ASPR 13-402/A) (II) (C).

WE CANNOT ACCEPT THE ARGUMENT ADVANCED BY ITTFL THAT THE USE AUTHORIZATION CONTAINED IN THE FEBRUARY 17 LETTER IS SUPPORTED BY THE CONSIDERATION OF THE LOWER PRICE QUOTED BY ITTFL FOR THE PERFORMANCE OF CONTRACT NO. DA-04880. FOR THAT CONSIDERATION THE CONTRACTOR WAS GIVEN THE RIGHT TO USE THE PROPERTY IN THE PERFORMANCE OF THAT CONTRACT, AND NO FURTHER OBLIGATION WAS THEREBY IMPOSED UPON THE GOVERNMENT WITH RESPECT TO THE PROPERTY. SO FAR AS WE ARE ADVISED THE GOVERNMENT HAD COMPLETE CONTROL OVER ANY OTHER USE OF THE PROPERTY, AND COULD WITHOUT QUESTION HAVE PROHIBITED ANY OTHER USE OF THE PROPERTY BY THE CONTRACTOR AND COULD HAVE TAKEN FULL POSSESSION AND CONTROL OVER IT UPON COMPLETION OF THAT CONTRACT. THE ONLY CONSIDERATION FOR THE RIGHT TO USE THE SAME PROPERTY IN PERFORMANCE OF THE CONTRACT UPON WHICH THE BID HERE IN QUESTION WAS TENDERED WOULD BE A REDUCED PRICE QUOTED BY ITTFL IN ITS PRESENT BID. A CONDITION TO THE ACCEPTANCE OF THAT BID THE REFERENCED PROVISIONS OF ASPR REQUIRED THAT THE COMPETITIVE ADVANTAGE RESULTING FROM FREE USE OF THE GOVERNMENT PROPERTY BE ELIMINATED BY THE ADDITION TO THE BID PRICE OF THE EVALUATION FACTOR PRESCRIBED BY THE REGULATION AND BY THE ABOVE QUOTED PARAGRAPH 5 OF THE INVITATION HERE INVOLVED.

WE THEREFORE CONCLUDE THAT, WHILE THE EXACT LANGUAGE OF THE INVITATION MAY NOT HAVE STATED THE REQUIREMENTS OF THE GOVERNING REGULATIONS AS PRECISELY AS MIGHT HAVE BEEN DONE, IT WAS SUFFICIENTLY CLEAR TO JUSTIFY THE CONTRACTING OFFICER'S REJECTION OF ITTFL'S BID AS NONRESPONSIVE.

TURNING NOW TO THE EFFECT OF ITTFL'S FAILURE TO FURNISH THE ACQUISITION COSTS FOR THE TOOLING, AS REQUIRED BY SECTION 5 OF PROVISION W, IT IS OUR VIEW THAT SUCH OMISSION RENDERED THE BID NONRESPONSIVE. THE PURPOSE OF THE IFB REQUIREMENT WAS TO ENABLE THE PROCURING AGENCY TO EVALUATE THE BIDS IN ACCORDANCE WITH THE PROVISIONS OF THE APPLICABLE REGULATIONS. WITHOUT THE DATA, WHICH AFFECTED THE EVALUATED BID PRICE AND THEREFORE WAS A MATERIAL FACTOR, THE ITTFL BID WAS NOT CAPABLE OF PROPER EVALUATION.

CONCERNING ITTFL'S STATEMENT THAT THE PROCURING AGENCY COULD HAVE OBTAINED THE TOOLING ACQUISITION COSTS FROM THE CONTRACTING OFFICER HAVING COGNIZANCE OF THE PROPERTY, IT IS THE POSITION OF THE CONTRACTING AGENCY THAT SUPPORTABLE ACQUISITION COSTS HAVE NEVER BEEN FURNISHED TO THE GOVERNMENT. BE THAT AS IT MAY, THE FACT REMAINS THAT THE RESPONSIBILITY FOR THE PREPARATION OF BIDS RESTS UPON THE BIDDERS. 31 COMP. GEN. 323; FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 CT. CL. 120, 123. THEREFORE, EXCEPT WHEN THE ACQUISITION COST DATA IS NOT MADE AVAILABLE TO A BIDDER BEFORE BID OPENING, A BID TO BE RESPONSIVE MUST COMPLY FULLY WITH AN IFB GOVERNMENT PROPERTY COST DATA REQUIREMENT. SEE 43 COMP. GEN. 604. WE MUST THEREFORE CONCLUDE THAT THE FAILURE OF ITTFL TO FURNISH THE DATA WITH ITS BID IS NOT EXCUSABLE, AND THAT REJECTION OF THE BID AS NONRESPONSIVE ON THIS ACCOUNT WAS PROPER. OUR DECISION ON THIS POINT RENDERS UNNECESSARY ANY DETERMINATION REGARDING THE ACCEPTABILITY OF THE AUTHORIZATION BEARING THE SIGNATURE OF THE SUPPLY CONTRACTING OFFICER RATHER THAN THE SIGNATURE OF THE COGNIZANT PROPERTY OFFICER, AS REQUIRED BY PARAGRAPH 5.A./1).

CONCERNING ITTFL'S CONTENTION THAT IN VIEW OF THE $140,891 DIFFERENCE BETWEEN ITS BID AND THE BENDIX BID, AWARD SHOULD BE MADE TO ITTFL UNDER THE PROVISIONS OF SUBSECTION 2.D. OF PROVISION W, THE RIGHT THEREBY RESERVED TO THE GOVERNMENT TO OVERRIDE EVALUATION FACTORS IF OUT-OF-POCKET COSTS ARE SUBSTANTIAL WITHOUT COMMENSURATE ADVANTAGE TO THE GOVERNMENT IS A MATTER FOR DETERMINATION BY THE CONTRACTING OFFICER. SINCE THE CONTRACTING OFFICER WAS NOT OBLIGATED TO DISREGARD THE EVALUATION FACTOR, AND IN VIEW OF OUR SUBSTANTIAL DOUBT THAT SUCH PROVISION COULD PROPERLY BE INVOKED TO JUSTIFY CONSIDERATION OF A BID THAT IS OTHERWISE NONRESPONSIVE, WE SEE NO BASIS UPON WHICH IT MAY PROPERLY BE CONTENDED THAT THE CONTRACTING OFFICER'S FAILURE TO EXERCISE SUCH DISCRETIONARY AUTHORIZATION WOULD RENDER THE CONTRACT AWARDED TO BENDIX ILLEGAL.

IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS FOR OBJECTION TO THE CONTRACT AWARDED TO BENDIX.

Jan 14, 2021

Jan 13, 2021

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