B-149486, SEP. 5, 1962

B-149486, SEP. 5, 1962

TO AMERICAN POTASH AND CHEMICAL CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JULY 19, 1962, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. IFB600-1526-62 ISSUED BY THE U.S. NAVY PURCHASING OFFICE ON JUNE 1, 1962.

THE INVITATION SOLICITED BIDS--- TO BE OPENED ON JULY 12, 1962--- FOR FURNISHING VARIOUS QUANTITIES OF AMMONIUM PERCHLORATE CLASS 1 AND AMMONIUM PERCHLORATE CLASS 2, ITEMS 1 AND 2, RESPECTIVELY. ITEM 1 CALLED FOR FURNISHING 825,000 POUNDS AND ITEM 2 COVERED 3,000,000 POUNDS, F.O.B. ORIGIN OR F.O.B. DESTINATION. ONLY TWO BIDS WERE RECEIVED. YOUR BID WAS $0.32 PER POUND ON ITEM 1, F.O.B. DESTINATION AND $0.31 PER POUND, F.O.B. ORIGIN. AS TO ITEM 2, YOU BID $0.34 PER POUND, F.O.B. DESTINATION AND $0.33 PER POUND, F.O.B. ORIGIN. THE OTHER BIDDER DID NOT BID ON ITEM 2 BUT ITS BID ON ITEM 1 WAS $0.3275 PER POUND, F.O.B. DESTINATION AND $0.315 PER POUND, F.O.B. ORIGIN.

IT IS ADMINISTRATIVELY REPORTED THAT ON PAGE 3 OF THE INVITATION YOU HAD THE FOLLOWING SENTENCE TYPED UNDER THE HEADING TITLED GOVERNMENT PROPERTY IN BIDDER'S POSSESSION: "THE TOTAL COST AND DELIVERY SCHEDULE SET FORTH IN THIS CONTRACT ARE BASED ON THE RENT FREE USE OF GOVERNMENT OWNED FACILITIES (PLATINUM) COVERED BY CONTRACT NORD (F/-1742.'" YOUR BID WAS REGARDED AS CONDITIONAL AND REJECTED AS BEING NONRESPONSIVE. THE CONTRACTING OFFICER STATED THAT PARAGRAPH 13 407 OF THE ARMED SERVICES PROCUREMENT REGULATION PROHIBITS RENT FREE USE OF FACILITIES FOR CONTRACTS OBTAINED UNDER FORMAL ADVERTISING.

IN YOUR LETTER OF JULY 19, 1962, YOU STATE THAT YOUR BID WAS NOT CONDITIONAL AND THAT YOU MERELY STATED WHAT WAS PROVIDED UNDER CONTRACT NO. NORD (F/-1742. ALSO, YOU STATE THAT IN PRIOR NEGOTIATIONS YOU HAD MADE THE SAME ASSERTIONS WITH REGARD TO THE USE OF THE PLATINUM IN YOUR POSSESSION UNDER THAT CONTRACT. YOU SUGGEST THAT THE CONTRACTING OFFICER SHOULD HAVE WAIVED THE STATEMENT AS AN INFORMALITY OR ALLOWED YOU TO DELETE THE STATEMENT SINCE IT DID NOT GO TO THE SUBSTANCE OF THE BID.

PARAGRAPH 13-407 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT WHERE A FACILITIES CONTRACT AUTHORIZES THE USE OF FACILITIES IN THE PERFORMANCE OF CONTRACTS ENTERED INTO BY FORMAL ADVERTISING, THE FACILITIES CONTRACT SHALL SPECIFY A CASH RENTAL TO BE PAID IN SUCH CASES. ARTICLE 3 OF CONTRACT NO. NORD (F/-1742 PROVIDES THAT THE CONTRACTOR SHALL HAVE THE RIGHT TO USE THE PLATINUM ONLY FOR THE PERFORMANCE OF CONTRACTS OR ORDERS FROM THE GOVERNMENT OR SUPPLIERS OF THE GOVERNMENT CALLING FOR THE FURNISHING OF PERCHLORATES OR OF OTHER MATERIALS AS MAY BE AUTHORIZED BY THE CONTRACTING OFFICER. INSOFAR AS THE RECORD SHOWS, THE CONTRACTING OFFICER UNDER THAT CONTRACT, OR HIS SUCCESSOR, DID NOT AUTHORIZE THE USE OF THE PLATINUM FOR THE FURNISHING OF AMMONIUM PERCHLORATE UNDER THE INSTANT INVITATION. IN FACT THE CONTRACTING OFFICER INVOLVED IN THE INSTANT PROCUREMENT WAS CHARGED WITH KNOWLEDGE OF THE PROVISIONS OF ASPR 13 407 AND WAS NOT AUTHORIZED TO ENTER INTO A CONTRACT FOR USE OF THE PLATINUM EXCEPT WHERE THE FACILITIES CONTRACT MADE PROVISION FOR CASH RENTAL FOR ITS USE. SEE IN THIS CONNECTION 38 COMP. GEN. 508.

WITH REGARD TO YOUR CONTENTION THAT THE STATEMENT AS TO YOUR USE OF PLATINUM IN YOUR POSSESSION UNDER CONTRACT NO. NORD (F/-1742 COULD HAVE BEEN ELIMINATED, THIS WOULD IN EFFECT BE CHANGING YOUR BID AFTER BIDS WERE OPENED SINCE YOUR BID PRICE WAS BASED ON ITS USE RENT FREE AND THEREFORE, THE MATTER CANNOT BE TREATED AS AN INFORMALITY. 31 COMP. GEN. 660. WOULD HAVE BEEN PREJUDICIAL TO THE OTHER BIDDER IF YOU HAD BEEN PERMITTED TO CHANGE YOUR STATEMENT AS TO THE USE OF GOVERNMENT-OWNED PLATINUM.

IT HAS BEEN INFORMALLY ASCERTAINED--- AND IT HAS BEEN CONFIRMED BY YOUR REPRESENTATIVE--- THAT THE USE OF THE GOVERNMENT-OWNED PLATINUM IN YOUR POSSESSION UNDER CONTRACT NO. NORD (F/-1742 WAS PERMITTED HERETOFORE IN CONTRACTS NEGOTIATED WITH YOU FOR THE PRODUCTION OF AMMONIUM PERCHLORATE AND AN EVALUATION FACTOR HAD BEEN ESTABLISHED THEREFOR. THIS PROCEDURE IS IN ACCORDANCE WITH THE PROVISIONS OF ASPR 13-407 AND IN FACT THE REGULATIONS IN THIS REGARD PERMIT THIS PROCEDURE ONLY IN THE CASE OF NEGOTIATED CONTRACTS.

IN VIEW OF THE FOREGOING, THE CONTRACTING OFFICER WAS NOT AUTHORIZED TO AWARD A CONTRACT FOR ITEM 1 TO YOU ON THE BASIS OF YOUR BID AND YOUR PROTEST MUST BE DENIED.