B-147877, MAR. 28, 1962

B-147877, MAR. 28, 1962

TO THE SUNROC CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 2, 1962, PROTESTING THE CANCELLATION OF THE SET-ASIDE PORTION OF INVITATION NO. 104-1110-62 COVERING THE DELIVERY OF 275 DRINKING WATER DISPENSERS (WATER COOLERS).

THE INVITATION FOR BIDS ISSUED ON NOVEMBER 17, 1961, BY THE SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA, CALLED FOR DELIVERY OF A QUANTITY OF 275 WATER COOLERS AND AN ADDITIONAL QUANTITY OF 275 WATER COOLERS FOR DELIVERY BY LABOR SURPLUS AREA CONCERNS. THREE BIDS WERE RECEIVED. IN CONSIDERING THE AWARD OF THE NON-SET-ASIDE PORTION OF THE PROCUREMENT, PROTESTS WERE LODGED AGAINST POSSIBLE AWARD OF A CONTRACT TO THE LOW BIDDER (CORDLEY AND HAYES) BY THE OTHER TWO BIDDERS, F. W. LANG COMPANY AND YOUR CORPORATION. IN OUR DECISION OF JANUARY 31, 1962, B- 147877, OUR OFFICE HELD THAT THE BID OF THE LOW BIDDER SHOULD BE REJECTED BECAUSE IT CONTAINED MATERIAL DEVIATIONS FROM THE TERMS OF THE INVITATION. CONTRACT NO. N104-85113 WAS ACCORDINGLY AWARDED TO YOUR CORPORATION ON FEBRUARY 28, 1962.

DUE TO THE URGENT NEED FOR THE WATER COOLERS, A DETERMINATION WAS MADE THAT THE LABOR SURPLUS SET-ASIDE OF A QUANTITY OF 275 WATER COOLERS UNDER THE ABOVE INVITATION WAS DETRIMENTAL TO THE PUBLIC INTEREST, FOR REASONS AS FOLLOWS:

"1. ON THE BASIS OF THE FOLLOWING FACTS, IT IS CONSIDERED THAT THE LABOR SURPLUS SET-ASIDE QUANTITY OF 275 DRINKING WATER DISPENSERS, AS DESCRIBED IN THE SUBJECT INVITATION FOR BIDS, IS DETRIMENTAL TO THE PUBLIC INTEREST:

"A. THE ITEM CURRENTLY IS IN CRITICAL SUPPLY STATUS IN THE SHIPS PARTS SEGMENT OF THE NAVY SUPPLY SYSTEM.

"B. THE BEST PROGNOSIS, BASED ON DATA PRESENTLY AVAILABLE, IS THAT DELIVERIES WILL NOT BE MADE UNTIL APPROXIMATELY JANUARY, 1963 IF PROCUREMENT IS MADE BY FOLLOWING THE PRESCRIBED SET-ASIDE PROCEDURE, THEREBY RESULTING IN THIS ITEM BEING OUT OF STOCK (NIS) FOR A PERIOD OF 10 MONTHS.

"C. SERIOUS DELAYS AND EXPENSE WILL BE INVOLVED IN CONNECTION WITH SCHEDULED SHIP ALTERATIONS, NEW CONSTRUCTION AND NORMAL REPLACEMENTS INVOLVING THIS ITEM.

"D. THERE CURRENTLY EXISTS AN IMMEDIATE NEED OF 138 DISPENSERS, PLUS AN ADDITIONAL QUANTITY OF 220 TO MEET NORMAL REPLACEMENT REQUIREMENTS DURING THIS PERIOD.

"2. THE ABOVE DESCRIBED ELEMENTS OF URGENCY REPRESENT A SIGNIFICANT CHANGE IN THE CONDITIONS WHICH EXISTED AT THE TIME (NOV 1961) THE DETERMINATION WAS MADE TO UTILIZE THE SET-ASIDE PROCEDURE IN MAKING PROCUREMENT.

"3. IN VIEW OF THE FOREGOING, AND IN ACCORDANCE WITH THE AUTHORITY GRANTED BY REFERENCE (A), IT HAS BEEN DETERMINED THAT THE SET-ASIDE SHALL BE WITHDRAWN AND THE PROCUREMENT COMPLETED BY ADVERTISING, WITH TIME OF DELIVERY BEING STATED AS A FACTOR IN DETERMINING AWARD.'

THE REFERENCE (A) CITED IN THE DETERMINATION IS PARAGRAPH 1-804.3 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH PROVIDES THAT, IF PRIOR TO THE AWARD OF A CONTRACT INVOLVING A LABOR SURPLUS SET-ASIDE, THE CONTRACTING OFFICER CONSIDERS THAT THE SET-ASIDE IS DETRIMENTAL TO THE PUBLIC INTEREST, HE SHALL WITHDRAW THE SET-ASIDE AND COMPLETE THE PROCUREMENT BY ADVERTISING OR NEGOTIATION AS APPROPRIATE IN ACCORDANCE WITH EXISTING REGULATIONS. BIDDERS WERE NOTIFIED OF THIS ACTION BY AMENDMENT NO. 1 TO THE INVITATION DATED FEBRUARY 28, 1962.

THE NEW INVITATION (NO. 104-1721-62) ISSUED IN THIS CASE ON MARCH 16, 1962, STATES THAT TIME OF DELIVERY WILL BE A FACTOR IN MAKING AWARD. THE REQUIRED DELIVERY IS INDICATED AS BEING 20 PERCENT WITHIN 75 DAYS AND 80 PERCENT WITHIN 100 DAYS AFTER DATE OF CONTRACT. PRIOR TO THE ISSUANCE OF THIS NEW INVITATION, A NAVY INSPECTOR CONDUCTED AN INVESTIGATION OF YOUR FIRM TO ASCERTAIN WHETHER YOU COULD MEET THE PROPOSED DELIVERY SCHEDULE, PRESUMABLY WITH AN INTENT TO NEGOTIATE WITH YOU. IN A REPORT DATED MARCH 13, 1962, HE STATED THAT, IN VIEW OF THE FACTS OUTLINED THEREIN, HE WAS OF THE OPINION THAT YOU COULD NOT MEET THE DELIVERY SCHEDULE. ALSO, IT WAS INDICATED THAT UNDER THE BEST CONDITIONS AND EVEN WAIVING THE SHOCK TESTS THE EARLIEST DELIVERIES BY YOU WOULD BE 160 DAYS AFTER THE CONTRACT DATE.

YOUR REFERENCE TO THE FACT THAT YOUR COMPETITOR MAY NOT BE COMPELLED TO SUBMIT ITS PRODUCT TO A SHOCK TEST IS NOT ENTIRELY CLEAR BUT IT PRESUMABLY HAS REFERENCE TO CORDLEY AND HAYES. IN THIS REGARD IT WAS REPORTED IN CONNECTION WITH ANOTHER CONTRACT WITH CORDLEY AND HAYES THAT IT WAS DECIDED TO FORGO THE REQUIRED SHOCK TESTS SINCE THE COMPANY HAD FURNISHED A SATISFACTORY WATER COOLER OF A SIMILAR TYPE WHICH HAD PASSED SHOCK TESTS.

IN VIEW OF THE FOREGOING, WE FIND NO BASIS FOR OBJECTING TO THE ACTION OF THE CONTRACTING OFFICER IN WITHDRAWING THE QUANTITY OF 275 WATER COOLERS AS A SET-ASIDE PROCUREMENT UNDER INVITATION NO. 104-1110 62.