B-172959(2), DEC 10, 1971
Highlights
SCHLESINGER: REFERENCE IS MADE TO LETTERS OF JUNE 16. ENCLOSED IS A COPY OF OUR DECISION IN THIS MATTER. THAT THE AWARD TO READ WAS IMPROPER AND UNAUTHORIZED. IN THAT NEGOTIATIONS SHOULD HAVE BEEN CONDUCTED TO OBTAIN COMPETITIVE OFFERS FROM OTHER OFFERORS FOR AN ITEM COMPARABLE TO THE READ UNIT. IMPLIES THAT CAYUGA'S LESS EXPENSIVE "CHIEFTAIN" MODEL WOULD HAVE BEEN ACCEPTABLE. IS REQUESTED. THAT A DETERMINATION BE MADE AS TO WHETHER THIS IS IN FACT THE CASE AND. ONE DAY AFTER THE PURCHASE ORDER WAS ISSUED TO READ. IT WAS NOT UNTIL APPROXIMATELY ONE MONTH AFTER THE AWARD. IT IS RECOMMENDED THAT CONSIDERATION BE GIVEN TO REQUIRING AEC PRIME CONTRACTORS TO REFER SUCH MATTERS TO AEC FOR REVIEW IMMEDIATELY UPON RECEIPT.
B-172959(2), DEC 10, 1971
TO MR. JAMES R. SCHLESINGER:
REFERENCE IS MADE TO LETTERS OF JUNE 16, AUGUST 16, AND SEPTEMBER 24, 1971, FROM THE DIRECTOR, DIVISION OF CONTRACTS, ATOMIC ENERGY COMMISSION (AEC), FURNISHING OUR OFFICE WITH REPORTS ON THE PROTEST BY CAYUGA MACHINE AND FABRICATING COMPANY (CAYUGA) AGAINST THE AWARD OF A CONTRACT TO THE READ CORPORATION (READ) UNDER A SOLICITATION ISSUED BY UNION CARBIDE CORPORATION (CARBIDE) ACTING UNDER PRIME CONTRACT NO. W 7405-ENG-26 WITH THE AEC.
ENCLOSED IS A COPY OF OUR DECISION IN THIS MATTER. PLEASE NOTE THAT WE CONCLUDED, FOR THE REASONS STATED THEREIN, THAT THE AWARD TO READ WAS IMPROPER AND UNAUTHORIZED, IN THAT NEGOTIATIONS SHOULD HAVE BEEN CONDUCTED TO OBTAIN COMPETITIVE OFFERS FROM OTHER OFFERORS FOR AN ITEM COMPARABLE TO THE READ UNIT.
THE RECORD BEFORE THIS OFFICE INDIRECTLY, BUT CLEARLY, IMPLIES THAT CAYUGA'S LESS EXPENSIVE "CHIEFTAIN" MODEL WOULD HAVE BEEN ACCEPTABLE. IS REQUESTED, THEREFORE, THAT A DETERMINATION BE MADE AS TO WHETHER THIS IS IN FACT THE CASE AND, IF SO, THAT THE REIMBURSEMENT TO CARBIDE BY THE GOVERNMENT NOT EXCEED THE COST OF THE "CHIEFTAIN" MODEL, WHICH WE FEEL REPRESENTS THE VALUE OF THE TANGIBLE BENEFIT RECEIVED BY THE GOVERNMENT.
IN ADDITION, WE NOTE THAT THE RECORD IN THIS CASE INDICATES THAT CAYUGA VERBALLY PROTESTED TO CARBIDE ON FEBRUARY 5, 1971, ONE DAY AFTER THE PURCHASE ORDER WAS ISSUED TO READ, AND IT WAS NOT UNTIL APPROXIMATELY ONE MONTH AFTER THE AWARD, ON MARCH 3, 1971, THAT CARBIDE REALIZED ITS ERROR AND PLACED A HOLD ON ITS ORDER WITH READ. BY THAT TIME READ HAD APPARENTLY INCURRED COSTS AMOUNTING TO MORE THAN 50 PERCENT OF THE PURCHASE PRICE. THEREAFTER, CARBIDE CONCLUDED ON MAY 4, 1971, THAT THE COSTS IT WOULD INCUR IN CANCELLING THE READ ORDER WOULD BE TOO GREAT AND REMOVED THE HOLD ORDER. THE RECORD DOES NOT INDICATE ANY DISCUSSION OF THIS MATTER BETWEEN CARBIDE AND AEC AT THE TIME OF THE INITIAL PROTEST AND, APPARENTLY, CARBIDE DID NOT CONSULT WITH AEC IN THIS MATTER UNTIL A PROTEST HAD BEEN LODGED WITH OUR OFFICE. ACCORDINGLY, IN THE INTEREST OF EFFECTING TIMELY RESOLUTION AND EFFECTIVE REMEDIAL ACTION IN SUCH FUTURE PROTESTS, IT IS RECOMMENDED THAT CONSIDERATION BE GIVEN TO REQUIRING AEC PRIME CONTRACTORS TO REFER SUCH MATTERS TO AEC FOR REVIEW IMMEDIATELY UPON RECEIPT.
WE WOULD APPRECIATE BEING ADVISED OF ANY ACTION YOU MAY TAKE IN THIS AREA.