B-171010, APR 16, 1971

B-171010, APR 16, 1971

BID PROTEST - DEVIATIONS DENIAL OF PROTEST OF MARS SALES AGAINST AWARD OF TWO FEDERAL SUPPLY SCHEDULE CONTRACTS FOR AIR CURTAIN FANS ISSUED BY GENERAL SERVICES ADMINISTRATION TO UNIVERSAL JET INDUSTRIES, LOW BIDDER. PROTESTANT CONTENDS THAT LOW BIDDER'S PRODUCTS DO NOT MEET REQUIRED GOVERNMENT SPECIFICATIONS AND THAT, NOTWITHSTANDING SIMILAR BID PROTEST IN 1969, GSA HAS CONTINUED TO PURCHASE THESE PRODUCTS WITHOUT TESTING. THE CONTENTIONS ARE WITHOUT MERIT. FOLLOWING ORIGINAL PROTEST GSA QUALITY CONTROL REPRESENTATIVES CARRIED OUT AN INSPECTION OF THE QUESTIONED PRODUCTS WHICH RESULTED IN A FINDING THAT INTERIM SPECIFICATIONS WERE MET. TESTING OF THE PRODUCTS TOOK PLACE IN JUNE 1970, WHICH RESULTED IN CONTRACT TERMINATION AS TO NON-CONFORMING TYPES OF AIR CURTAIN FANS. MODIFIED TYPE I FAN PROVIDED BY UNIVERSAL WAS APPROVED AND NO COMPLAINT HAS BEEN RECEIVED BY USERS. THE TERMINATION AS TO TYPES II & III AIR CURTAIN FANS IS PRESENTLY BEFORE THE GSA BOARD OF CONTRACT APPEALS.

TO MARS SALES:

REFERENCE IS MADE TO A LETTER ADDRESSED BY YOU TO SENATOR ALAN CRANSTON, UNDER DATE OF OCTOBER 21, 1970, AS SUPPLEMENTED BY SUBSEQUENT CORRESPONDENCE WITH OUR OFFICE, PROTESTING AGAINST AWARD BY THE GENERAL SERVICES ADMINISTRATION (GSA) OF TWO FEDERAL SUPPLY SCHEDULE (FSS) CONTRACTS TO UNIVERSAL JET INDUSTRIES (UNIVERSAL). THE CONTRACTS, GS OOS- 85091 AND GS-OOS-83809, COVER THE FURNISHING OF THREE TYPES OF AIR CURTAIN FANS, FEDERAL SUPPLY SCHEDULE FSC GROUP 41, PART II, REFRIGERATION, AIR CONDITIONING AND AIR CIRCULATING EQUIPMENT, CLASS 4140-FANS, AIR CIRCULATORS AND BLOWER EQUIPMENT. CONTRACT GS-OOS-85091 WAS IN EFFECT FROM MAY 1, 1969, THROUGH APRIL 30, 1970, AND CONTRACT GS OOS-83809, AWARDED JANUARY 2, 1970, COVERS THE PERIOD MAY 1, 1970, THROUGH APRIL 30, 1971.

THE SUBSTANCE OF YOUR PROTEST IS THAT AIR CURTAINS MANUFACTURED BY UNIVERSAL DO NOT MEET THE REQUIREMENTS OF THE APPLICABLE GOVERNMENT SPECIFICATION, INTERIM FEDERAL SPECIFICATION W-F-001350(GSA-FSS), MARCH 15, 1968, AND THAT THE GOVERNMENT SHOULD THEREFORE REMOVE AND REPLACE ALL INSTALLED, NONCOMPLIANT, UNIVERSAL AIR CURTAINS. YOU ALSO COMPLAIN THAT, NOTWITHSTANDING THE FACT THAT YOU FILED A SIMILAR PROTEST WITH GSA IN 1969 (LETTER DATED AUGUST 11 FROM YOUR ATTORNEYS), UNIVERSAL WAS SUBSEQUENTLY AWARDED CONTRACT GS-OOS-83809. IN ADDITION, YOU ASSERT THAT WHILE GSA, AFTER INVESTIGATION OF THAT PROTEST, STATED IN MAY 1970 THAT NO ADDITIONAL AIR CURTAINS WOULD BE ACCEPTED FROM UNIVERSAL WITHOUT TESTING FOR COMPLIANCE WITH THE GOVERNMENT SPECIFICATION, GSA NEVERTHELESS CONTINUED TO PROCURE THE SAME MODEL OF AIR CURTAIN UNDER THE SAME CONTRACT WITHOUT TESTING FOR COMPLIANCE.

OTHER ISSUES WHICH YOU RAISE ARE (1) YOUR PROSPECTS FOR INTRODUCING YOUR FIBERGLASS HEATED AIR CURTAIN TO THE FEDERAL SUPPLY SYSTEM; (2) GSA'S PURPOSE IN COMMENCING A STUDY IN OCTOBER 1970 OF AIR CURTAIN STANDARDS; AND (3) THE POSITION OR RANK HELD BY ANY MEMBERS OF UNIVERSAL'S BOARD OF DIRECTORS WHO WERE EVER EMPLOYED BY GSA OR SERVED IN THE ARMED FORCES.

YOU ALSO REFER TO THE AWARD BY THE DEFENSE SUPPLY AGENCY OF A CONTRACT TO UNIVERSAL FOR THE FURNISHING OF AIR CURTAINS IN CONFORMITY WITH INTERIM FEDERAL SPECIFICATION W-F-001350(GSA-FSS). AS IN THE CASE OF THE GSA CONTRACTS, YOU CONTEND THAT THE ITEMS OFFERED BY UNIVERSAL WILL NOT MEET THE SPECIFICATION REQUIREMENTS. INASMUCH AS WE HAVE ALREADY RENDERED A DECISION (B-171760, APRIL 6, 1971) TO YOU ON YOUR SEPARATE PROTEST DATED JANUARY 18, 1971, CONCERNING THE SAME CONTRACT, THAT PROCUREMENT WILL NOT BE DISCUSSED HEREIN.

REVIEW OF THE RECORD MADE AVAILABLE TO OUR OFFICE BY GSA SHOWS THAT SUBSEQUENT TO YOUR 1969 PROTEST GSA'S QUALITY CONTROL REPRESENTATIVE AT UNIVERSAL'S PLANT INSPECTED A QUANTITY OF AIR CURTAINS PREPARED FOR SHIPMENT TO THE GOVERNMENT AND ISSUED A REPORT DATED OCTOBER 23, 1969, STATING THAT THE ITEMS COMPLIED WITH THE INTERIM FEDERAL SPECIFICATION. IN ADDITION, A PLANT FACILITIES SURVEY OF UNIVERSAL, PERFORMED IN CONNECTION WITH ITS LOW BID ON THE CONTRACT FOR THE PERIOD MAY 1, 1970, THROUGH APRIL 30, 1971, RESULTED IN A FAVORABLE REPORT DATED DECEMBER 9, 1969, WHICH STATED THAT UNIVERSAL HAD ADEQUATE QUALITY CONTROL PROCEDURES, INCLUDING INSPECTION AND TESTING, IN ACCORDANCE WITH THE APPLICABLE SPECIFICATION. IN THE CIRCUMSTANCES, WE BELIEVE THAT THERE WAS ADEQUATE JUSTIFICATION FOR A DETERMINATION BY GSA THAT UNIVERSAL COULD BE EXPECTED TO PROPERLY PERFORM THE CONTRACT COMMENCING MAY 1, 1970, AND WE THEREFORE SEE NO LEGAL BASIS IN THE RECORD FOR QUESTIONING THE VALIDITY OF THE AWARD ON JANUARY 2, 1970, OF CONTRACT GS-OOS-83809 TO UNIVERSAL.

AS TO THE AWARD OF CONTRACT GS-OOS-85091, WHICH PRECEDED YOUR 1969 PROTEST, GSA STATES THAT UNIVERSAL OFFERED AND RECEIVED THE AWARD ON AIR CURTAINS WHICH, AT THE TIME OF AWARD, WERE PRESUMED TO MEET THE REQUIREMENTS OF INTERIM FEDERAL SPECIFICATION W-F-001350 CITED IN THE ADVERTISED SOLICITATION. ABSENT ANY EVIDENCE THAT THE GSA DETERMINATION OF RESPONSIVENESS OF THE UNIVERSAL BID WAS NOT MADE IN GOOD FAITH, WE ARE LIKEWISE UNABLE TO FIND ANY JUSTIFICATION FOR QUESTIONING THE VALIDITY OF THE AWARD OF CONTRACT GS-OOS-85091.

AS TO DEFICIENCIES WHICH MIGHT EXIST IN AIR CURTAINS ALREADY DELIVERED BY UNIVERSAL TO THE GOVERNMENT, GSA REPORTS THAT NO COMPLAINTS HAVE BEEN RECEIVED BY GSA FROM ANY OF THE USERS OF THE AIR CURTAINS PROCURED UNDER GS-OOS-83809, GSA REPORTS THAT NO ORDERS HAVE EVER BEEN PLACED BY GSA UNDER THAT CONTRACT. HOWEVER, GSA STATES THAT ON JANUARY 25, 1971, IT BECAME AWARE FOR THE FIRST TIME, THROUGH INFORMATION OBTAINED FROM UNIVERSAL, THAT DURING THE PERIOD JUNE 16 TO OCTOBER 5, 1970, OTHER GOVERNMENT AGENCIES HAD PLACED ORDERS DIRECTLY WITH UNIVERSAL UNDER THE CONTRACT FOR A TOTAL OF 68 UNITS, INCLUDING ALL THREE TYPES OF AIR CURTAINS. GSA WAS FURTHER INFORMED THAT NONE OF THE UNITS WAS INSPECTED PRIOR TO SHIPMENT FOR COMPLIANCE WITH THE SPECIFICATION, AS IS REQUIRED UNDER THE TERMS OF THE CONTRACT. IN THE CIRCUMSTANCES, IT WOULD APPEAR THAT THE ABSENCE OF INSPECTION BY THE GSA QUALITY CONTROL INSPECTOR WAS ATTRIBUTABLE NOT TO DISREGARD OF HIS DUTY BUT TO LACK OF NOTICE THAT UNITS WERE BEING SHIPPED TO THE GOVERNMENT. IN ANY EVENT, GSA REPORTS THAT NO COMPLAINTS HAVE BEEN REGISTERED WITH GSA BY ANY OF THE USING AGENCIES REGARDING THE UNITS DELIVERED UNDER THE CONTRACT.

IN JUNE 1970, TESTS WERE UNDERTAKEN BY GSA OF A UNIVERSAL UNIT 22-1/2 INCHES IN WIDTH AND WITH AN EFFECTIVE AIR DISCHARGE NOZZLE ABOUT 22 INCHES IN WIDTH. THESE AND OTHER TESTS OF UNIVERSAL AIR CURTAINS WERE CONDUCTED AT UNIVERSAL'S PLANT, AT GSA'S REGION 5 (CHICAGO, ILLINOIS) LABORATORY, AND AT THE GSA MATERIAL EVALUATION AND DEVELOPMENT LABORATORY, WASHINGTON, D.C. DURING THE TESTING GSA CONFERRED WITH UNIVERSAL REGARDING FAILURE OF THE EQUIPMENT TO PASS THE SPECIFICATION TESTS, AND UNIVERSAL OFFERED A MODIFIED UNIT 45 INCHES IN WIDTH IN LIEU OF THE ORIGINALLY OFFERED UNIT 22 -1/2 INCHES IN WIDTH. TESTS COMPLETED IN NOVEMBER 1970 SHOWED THAT THE MODIFIED UNIT MET THE SPECIFICATION REQUIREMENTS FOR TYPE I AIR CURTAINS BUT NOT AS TO THE OTHER TWO TYPES.

ON NOVEMBER 27, 1970, THE CONTRACTING OFFICER, AFTER COMPLIANCE WITH THE PROVISIONS OF THE CONTRACT DEFAULT CLAUSE, TERMINATED THE CONTRACT AS TO TYPES II AND III AIR CURTAINS. NOTICE OF THIS ACTION WAS INCLUDED IN AN AMENDMENT ISSUED JANUARY 7, 1971, TO THE CONTRACT, WHICH INFORMED ORDERING AGENCIES THAT ANY ORDERS FOR THE CURTAINS SHOULD BE FORWARDED TO GSA.

GSA HAS INFORMED OUR OFFICE THAT UNIVERSAL HAS FILED AN APPEAL FROM THE TERMINATION OF ITS CONTRACT WITH THE GSA BOARD OF CONTRACT APPEALS. SINCE IT IS OUR POLICY NOT TO RENDER ANY DECISION ON A MATTER WHICH IS PENDING BEFORE A CONTRACT APPEALS BOARD, WE SHALL NOT UNDERTAKE TO EXPRESS ANY OPINION AS TO THE RIGHTS AND LIABILITIES OF UNIVERSAL UNDER ITS CONTRACT.

CONCERNING THE MATTER OF YOUR PROSPECTS FOR OBTAINING AWARD OF A FEDERAL SUPPLY SCHEDULE FOR THE AIR CURTAINS WHICH YOU MANUFACTURE, YOU INDICATE IN YOUR LETTER OF MARCH 24, 1971, TO OUR OFFICE THAT THIS ISSUE HAS BEEN RESOLVED. IN THIS CONNECTION, YOU STATE THAT YOU RECENTLY RECEIVED APPROVAL TO NEGOTIATE WITH GSA FOR INCLUSION OF YOUR PRODUCT IN THE NEW ITEM INTRODUCTORY SCHEDULE (NITS).

AS TO THE STUDY OF AIR CURTAIN STANDARDS WHICH GSA COMMENCED IN OCTOBER 1970, GSA STATES THAT ITS PURPOSE IS NOT TO REVISE THE SPECIFICATION TO FIT THE PRODUCTS OF UNIVERSAL OR ANY OTHER PRODUCER, BUT TO REVIEW THE SPECIFICATION. IN THIS REGARD, WE NOTE THAT GSA ADVISED YOU BY LETTER OF NOVEMBER 30, 1970, THAT PENDING SUCH REVIEW SOLICITATION OF BIDS FOR THE NEXT CONTRACT PERIOD HAS BEEN POSTPONED; THAT ANY REVISION TO THE SPECIFICATION WHICH MAY RESULT FROM THE REVIEW WOULD APPLY ONLY TO FUTURE CONTRACTS; AND THAT GSA IS ALSO CONSIDERING THE ADVISABILITY OF DISCONTINUING THE FEDERAL SUPPLY SCHEDULE CONTRACTS FOR AIR CURTAINS IN THE EVENT IT IS DETERMINED THAT THERE IS INSUFFICIENT USE TO WARRANT SUCH CONTRACTS. SINCE GSA BEARS THE RESPONSIBILITY FOR DETERMINING THE LANGUAGE TO BE EMPLOYED IN FEDERAL SPECIFICATIONS SO AS TO COVER THE GOVERNMENT'S MINIMUM REQUIREMENTS, AS WELL AS THE RESPONSIBILITY FOR DETERMINING THE NEED FOR FEDERAL SUPPLY SCHEDULE CONTRACTS, IT IS OUR VIEW THAT ITS ACTIONS IN THIS CASE CONSTITUTE A PROPER EXERCISE OF THE DISCRETION ACCORDED TO GSA IN CONNECTION WITH THE DISCHARGE OF SUCH RESPONSIBILITIES. SEE 41 CFR 5A 73.101 RELATIVE TO THE ESTABLISHMENT AND DISCONTINUANCE OF FEDERAL SUPPLY SCHEDULES.

FINALLY, WITH RESPECT TO YOUR INQUIRY REGARDING MEMBERS OF UNIVERSAL'S BOARD OF DIRECTORS, GSA STATES THAT IT HAS NO INFORMATION WHETHER ANY FORMER GSA EMPLOYEES ARE AMONG SUCH OFFICIALS. WE NOTE THAT THE BOARD OF DIRECTORS LISTED FOR UNIVERSAL JET INDUSTRIES, INC., HIALEAH, FLORIDA, IN POOR'S REGISTER OF CORPORATIONS, DIRECTORS AND EXECUTIVES, 1970, INCLUDES ONE DIRECTOR WHOSE NAME IS THE SAME AS THE NAME OF A FORMER GSA OFFICIAL. IT WOULD APPEAR, HOWEVER, THAT THE LAPSE OF SEVERAL YEARS SINCE THAT INDIVIDUAL SERVED WITH GSA IS SUFFICIENT TO PRECLUDE ANY CHARGE OF CONFLICT OF INTEREST. IN VIEW THEREOF, AND SINCE WE SEE NOTHING OF RECORD TO INDICATE THAT THE AWARD OF EITHER OF THE TWO GSA CONTRACTS TO UNIVERSAL WAS OTHER THAN IN ACCORD WITH THE COMPETITIVE BIDDING STATUTES AND REGULATIONS, WE ARE UNABLE TO ATTACH ANY UNDUE SIGNIFICANCE TO ANY PAST GSA OR MILITARY STATUS OF THIS PARTICULAR MEMBER OF UNIVERSAL'S BOARD OF DIRECTORS.

THE REPORTED FACTS INDICATE THAT GSA GAVE SERIOUS CONSIDERATION TO YOUR PROTESTS; TESTED THE ITEMS OFFERED BY UNIVERSAL; AND ACTED ON THE BASIS OF SUCH TESTS TO DISCONTINUE PROCUREMENT OF NONCONFORMING ITEMS. WHETHER THE CONTRACTING OFFICER'S ACTIONS WILL BE SUSTAINED BY THE GSA BOARD OF CONTRACT APPEALS, HOWEVER, IS A MATTER FOR THE BOARD TO DECIDE. ACCORDINGLY, AND SINCE GSA'S STATEMENTS ARE RESPONSIVE TO THE ISSUES WHICH YOU HAVE RAISED, WE SEE NO LEGAL BASIS TO QUESTION GSA'S ACTIONS IN THIS MATTER. YOUR PROTEST IS THEREFORE DENIED.