B-149890, JUN. 19, 1963

B-149890, JUN. 19, 1963

TO FELSENTHAL INSTRUMENTS COMPANY:

WE REFER AGAIN TO YOUR LETTERS, WITH ENCLOSURES, DATED MARCH 21 AND MAY 10, 1963, CONCERNING THE CHANGES IN SPECIFICATIONS APPROVED FOR CONTRACT NOS. GS-00S-27535 AND GS-00S-27729 AND YOUR UNDERSTANDING THAT THE DELIVERY DATES ON THE TWO CONTRACTS HAD NOT BEEN MET.

CONTRACT NO. GS-00S-27535 WAS AWARDED ON MARCH 3, 1962, BY THE GENERAL SERVICES ADMINISTRATION TO SEMCO SALES AND SERVICE, INCORPORATED, FOR DELIVERY WITHIN 80 DAYS AFTER RECEIPT OF ORDER OF 15,000 MXU--- 161/P PILOT'S CLIPBOARDS AT A PRICE OF $8.19 PER UNIT. YOU PROTESTED THAT AWARD BY TELEGRAM OF SEPTEMBER 12, 1962, AND SUBSEQUENT CORRESPONDENCE ON THE GROUNDS, AMONG OTHERS, THAT SEMCO COULD NOT MEET THE SPECIFIED DELIVERY SCHEDULE. WE HELD, IN OUR DECISION B-149890, NOVEMBER 21, 1962,THAT THE AWARD COULD PROPERLY BE MADE TO SEMCO AS PROPOSED BY THE CONTRACTING AGENCY SINCE THAT FIRM HAD SUBMITTED THE LOW RESPONSIVE BID AND A BONA FIDE DETERMINATION THAT IT WAS RESPONSIBLE HAD BEEN MADE BY THE CONTRACTING AGENCY.

THE SECOND CONTRACT, GS-00S-27729, WAS AWARDED ON DECEMBER 27, 1962, FOR 5,000 UNITS. EXCEPT FOR DATE OF AWARD AND QUANTITY, THE TWO CONTRACTS ARE THE SAME, THE SECOND REPRESENTING A SET-ASIDE PORTION IN THE SAME INVITATION FOR BIDS.

IN ITS ORIGINAL FORM, CONTRACT NO. 27535 HAD A DELIVERY DATE OF MARCH 1, 1963; THE DELIVERY DATE ON NO. 27729 WAS APRIL 4, 1963. ON JANUARY 18, 1963, THE CONTRACTOR SUGGESTED CERTAIN SPECIFICATION CHANGES IN A TELEPHONE CONVERSATION WITH A CONTRACTING AGENCY REPRESENTATIVE. LETTER OF JANUARY 29, 1963, THE AIR FORCE, WHICH HAD INITIATED THE REQUIREMENT RESULTING IN THE CONTRACTS, RECOMMENDED TO THE CONTRACTING AGENCY CHANGES IN THE SPECIFICATIONS WHICH HAD BEEN SUGGESTED BY SEMCO. AMONG THESE WERE CHANGES IN THE LOWER CLIP FOR "INCREASED FLIGHT SAFETY," IN THE UPPER CLIP REDUCING TENSION TO PREVENT THE LIGHT FROM BEING TORN OFF WHEN OPERATING THE CLIP, AND CHANGES IN THE STRAP TO IMPROVE FLIGHT SAFETY BY PERMITTING QUICKER RELEASE. IN THE LETTER IT WAS ALSO RECOMMENDED THAT THE DELIVERY SCHEDULE BE EXTENDED 30 DAYS "TO ALLOW FOR TIME LOST IN OBTAINING AND INCORPORATING THE ABOVE ENGINEERING CHANGES.' GSA APPROVED THE CHANGES AS RECOMMENDED BY THE AIR FORCE INCLUDING THE 30- DAY EXTENSION FOR DELIVERY ON CONTRACT NO. 27535. NO EXTENSION WAS GRANTED ON CONTRACT NO. 27729. THE CHANGES WERE MADE WITHOUT ANY CHANGE IN THE CONTRACT PRICE AND WERE ACCEPTED BY THE CONTRACTOR BY LETTERS OF FEBRUARY 5, 1963. THE NEW DELIVERY DATE ON THE LARGER CONTRACT BECAME APRIL 1, 1963 (MARCH 31 FELL ON SUNDAY.)

AS LATE AS MARCH 5, 1963, THE CONTRACTING OFFICER WAS IN RECEIPT OF INFORMATION INDICATING THAT THE DELIVERY DATES WOULD BE MET. HOWEVER, A TELETYPE OF MARCH 22, 1963, FROM THE LOS ANGELES FIELD OFFICE OF THE GSA QUALITY CONTROL DIVISION, GAVE THE CONTRACTING OFFICER A FIRST INDICATION THAT THE DELIVERY DATES WOULD BE EXCEEDED BY ABOUT 10 DAYS. DESPITE THE ANTICIPATED DELAY IN DELIVERIES, THE CONTRACTS WERE NOT TERMINATED BECAUSE THE EXPECTED DELAY WAS RELATIVELY SLIGHT AND SUBSTITUTE PROCUREMENT ACTION, THE ONLY ALTERNATIVE, WOULD HAVE REQUIRED ABOUT 4 MONTHS FOR DELIVERY.

OUR REVIEW OF THE MATTER INDICATES THAT DELIVERIES WERE COMPLETED ON APRIL 16, 1963, UNDER THE SMALLER CONTRACT AND THAT 14,064 OF THE 15,000 UNITS UNDER THE LARGER CONTRACT HAD BEEN SHIPPED BY APRIL 22, 1963. THE REMAINING 936 UNITS WERE SCHEDULED FOR SHIPMENT ON APRIL 26, 1963, AND WERE EXPECTED AT DESTINATION ABOUT MAY 4, 1963.

IN REVIEWING THE PROCUREMENT FILES, WE NOTED THAT THE CONTRACTOR EXPERIENCED A 12-DAY DELAY IN DECEMBER 1962 AND JANUARY 1963 AS A RESULT OF THE GOVERNMENT'S FAILURE TO TIMELY FURNISH A REQUIRED ENGINEERING DRAWING.

IN VIEW OF ALL THE CIRCUMSTANCES, WE BELIEVE THAT THE CONTRACTING OFFICER, IN ALLOWING THE CONTRACTOR TO COMPLETE DELIVERIES ACTED REASONABLY AND IN THE BEST INTERESTS OF THE GOVERNMENT. CERTAINLY, THERE APPEARS NO BASIS UPON WHICH TO QUESTION THE LEGALITY OF HIS ACTIONS.

WE HAVE NOTED THAT THE CHANGES IN SPECIFICATIONS WERE EFFECTED WITHOUT ANY CHANGE IN THE CONTRACT PRICE. THE CONTRACTING OFFICER DID NOT PRESS FOR A REDUCTION IN PRICE BECAUSE IT WAS HIS UNDERSTANDING THAT THE CHANGES WOULD NOT REDUCE THE CONTRACTOR'S COSTS. HOWEVER, AS A RESULT OF YOUR LETTER OF MARCH 21, 1963, THE CONTRACTING AND USING AGENCIES HAVE INITIATED A REVIEW OF THE EFFECT OF THE SPECIFICATION CHANGES ON THE CONTRACTOR'S COSTS AND WILL EFFECT A PRICE REDUCTION IF THE REVIEW INDICATES SUCH ACTION WOULD BE APPROPRIATE. FOR THIS PURPOSE, PAYMENT FOR THE LAST 1,000 UNITS DELIVERED UNDER THE CONTRACTS IS BEING WITHHELD PENDING THE OUTCOME OF THE STUDY.