B-152105, SEP. 27, 1963

B-152105, SEP. 27, 1963

TO CONPAK, INC:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 22, 1963, WITH ENCLOSURES, PROTESTING THE ACTION TAKEN UNDER DEFENSE SUPPLY AGENCY NOTICE OF INTENT TO PURCHASE NO. NY-574-63.

THE NOTICE OF INTENT TO PURCHASE WAS ISSUED ON JUNE 18, 1963, BY HEADQUARTERS, NEW YORK REGION, DEFENSE SUBSISTENCE SUPPLY CENTER, BROOKLYN, NEW YORK, FOR THE PROCUREMENT OF 3 ITEMS OF VARIOUS QUANTITIES OF COCOA BEVERAGE POWDER FOR DELIVERY AT THE SPECIFIED DESTINATIONS AND IN ACCORDANCE WITH THE DELIVERY SCHEDULES SET FORTH IN THE INTENT TO PURCHASE. THE SPECIFICATIONS REQUIRED, AMONG OTHERS, THAT THE POWDER CONFORM IN ALL RESPECTS TO MILITARY SPECIFICATION MIL C-3031C, DATED JUNE 27, 1962, AS AMENDED. THERE WAS ALSO A PROVISION INCLUDED IN THE INTENT TO PURCHASE REQUIRING THE SUBMISSION OF SAMPLES OF THE BEVERAGE POWDER FOR PREAWARD APPROVAL FOR PALATABILITY OF THE POWDER BY PANEL TESTING. APPEARS THAT BID AND SAMPLES WERE RECEIVED BY THE SUPPLY CENTER FROM YOU AND FROM 4 OTHER FIRMS. ON JULY 12, 1963, THE ARMED FORCES FOOD AND CONTAINER INSTITUTE NOTIFIED THE CONTRACTING OFFICER THAT 4 OF THE COCOA BEVERAGE POWDER SAMPLES, INCLUDING THE SAMPLE FURNISHED BY YOU, HAD BEEN REJECTED. THEREFORE, SINCE ALL BID SAMPLES HAD FAILED EXCEPT THOSE SUBMITTED BY THE VITEX FOOD PRODUCTS COMPANY, LOS ANGELES, CALIFORNIA, WHICH HAD NOT SUBMITTED A BID ON ITEM NO. 1 AN ADDENDUM WAS ISSUED TO THE NOTICE OF THE INTENT TO PURCHASE EXTENDING THE CLOSING DATE FOR THE RECEIPT OF FUTURE OFFERS ON ITEM NO. 1. AWARDS OF CONTRACTS WERE MADE, HOWEVER, ON JULY 16, 1963, TO THE VITEX FOOD PRODUCTS COMPANY FOR ITEM NOS. 2 AND 3, ON THE BASIS OF THE LOWEST ACCEPTABLE BIDS RECEIVED FOR THESE ITEMS. THIS AWARD ACTION PROMPTED AN IMMEDIATE PROTEST FROM YOU TO THE CONTRACTING OFFICER AND ULTIMATELY RESULTED IN YOUR LETTER DATED JULY 22, 1963, WITH ENCLOSURES, TO US IN THIS REGARD. IT MIGHT BE ADDED THAT IN RESPONSE TO THE RESOLICITATION OF OFFERS FOR ITEM NO. 1, AS EXTENDED BY THE ADDENDUM, 5 OFFERS WERE RECEIVED. IT IS NOTED FURTHER THAT SAMPLES SUBMITTED BY ALL 5 OF THE OFFERORS PASSED THE TEST OF THE ARMED FORCES FOOD AND CONTAINER INSTITUTE AND THAT AN AWARD OF CONTRACT WAS MADE ON AUGUST 6, 1963, TO YOU BASED ON THE LOW BID WHICH YOU SUBMITTED FOR ITEM NO. 1.

A REVIEW OF YOUR LETTER OF JULY 22, 1963, AND ENCLOSURES, INDICATES THAT YOUR PRIME OBJECTION TO THE PROCEDURES FOLLOWED BY THE DEFENSE SUPPLY AGENCY IN SUCH PROCUREMENTS IS DIRECTED TO 2 POINTS, NAMELY, THE NONAVAILABILITY OF SAMPLES OF THE REFERENCE STANDARD AGAINST WHICH PREAWARD SAMPLES ARE TO BE TASTE-TESTED AND THE AGENCY'S FAILURE TO RESOLICIT, IN THIS CASE, OFFERS ON ITEM NO. 3, WHEN PREAWARD SAMPLES OF ALL OFFERORS OTHER THAN THE HIGH OFFEROR FAILED THE TASTE TEST ON THE GROUND THAT COMBINED QUANTITIES OF ITEM NO. 1--- AS TO WHICH NO SAMPLES PASSED--- AND ITEM NO. 3 WOULD HAVE PRODUCED A LOWER PRICE.

IN THE FIRST INSTANCE WHILE YOUR PROTEST APPEARS TO BE DIRECTED TO THE AWARD OF BOTH ITEM NOS. 2 AND 3 AND WHILE YOU WERE THE LOW BIDDER ON ITEM NO. 3, IT IS NOTED HOWEVER THAT YOU WERE NOT THE LOW BIDDER ON ITEM NO. 2. THEREFORE, EVEN IF THE SAMPLE FURNISHED BY YOU HAD BEEN SATISFACTORY YOU APPARENTLY WERE NOT OTHERWISE ELIGIBLE TO RECEIVE THE AWARD FOR ITEM NO. 2. BE THAT AS IT MAY, THE DEFENSE SUPPLY AGENCY REPORTS THAT PRIOR TO SUBMITTING A NEW OFFER FOR ITEM NO. 1, YOU WERE FURNISHED A SAMPLE OF THE REFERENCE STANDARD. YOUR SAMPLE PASSED THE TASTE-TEST ON THE REOFFER AND YOU WERE AWARDED ITEM NO. 1 AT A LOWER PRICE THAN YOUR INITIAL OFFER. FURTHER, IT APPEARS FROM THE AGENCY REPORTS THAT IT PLANS TO MAKE STANDARD OFFERS ON FUTURE PROCUREMENTS OF THIS KIND. THE ARMED FORCES FOOD AND CONTAINER INSTITUTE HAS AGREED TO INCORPORATE PROVISIONS AS TO THE AVAILABILITY OF SUCH SAMPLES IN A FUTURE REVISION OF THE SPECIFICATIONS AND IN THE INTERIM TO PERMIT INCLUSION OF THIS INFORMATION IN ALL SUCH NOTICES OF INTENT TO PURCHASE. THE AGENCY EXPLAINS FURTHER, HOWEVER, THAT IT IS BELIEVED SUCH REFERENCE STANDARDS SHOULD ONLY BE FURNISHED UPON A SPECIFIC REQUEST THEREFOR. THIS OPINION IS BASED ON THE FACT THAT FLAVOR CHARACTERISTICS CANNOT BE ACCURATELY DEFINED. FOR SEVERAL SPECIFICATIONS, INCLUDING THE COCOA BEVERAGE POWDER SPECIFICATION, WHERE FLAVOR IS THE MOST IMPORTANT FACTOR, COMMERCIALLY PRODUCED PRODUCTS ARE TESTED BY A TASTE PANEL AND THOSE WITH AN ACCEPTABLE AVERAGE RATING ON THE BEDONIC SCALE ARE SELECTED AS THE REFERENCE STANDARDS. IN THAT CONNECTION PARAGRAPH 4.6.3.1 OF MIL-C-3031C SETTING FORTH THE PROCEDURE FOR TASTE- TESTING SHOWS THAT THE MEMBERS OF THE PANEL DO NOT KNOW THE NAME OF THE BIDDER THAT SUBMITTED THE SAMPLE BEING TESTED. THIS WOULD APPEAR TO PRECLUDE ANY FAVORITISM BEING SHOWN BY ANY MEMBER OF THE PANEL. THE SPECIFICATION REQUIRES THAT PREAWARD SAMPLES, WHEN PANEL-TESTED AGAINST THE REFERENCE STANDARDS, HAVE A PREFERENCE RATING COMPARABLE TO THE REFERENCE STANDARDS. THESE PREAWARD SAMPLES NEED NOT HAVE THE SAME FLAVOR CHARACTERISTICS AS ANY OF THE REFERENCE STANDARDS; THEY NEED ONLY HAVE AS HIGH AN ACCEPTABILITY RATING AS DEFINED IN THE SPECIFICATION. FOR THIS REASON, THERE HAVE BEEN VERY FEW REQUESTS FROM POTENTIAL SUPPLIERS FOR REFERENCE STANDARDS. WHILE THEY CAN AND WILL BE FURNISHED WHEN REQUESTED, IT IS NOT CONSIDERED PRACTICAL OR NECESSARY TO DO SO IN EVERY CASE.

WITH RESPECT TO YOUR OBJECTION TO THE DEFENSE SUPPLY AGENCY'S FAILURE TO RESOLICIT OFFERORS FOR ITEM NO. 3 THE AGENCY ADVISES THAT THE PRICE AT WHICH THE AWARD FOR THIS ITEM WAS MADE DOES NOT APPEAR UNREASONABLE WHEN COMPARED TO PAST PROCUREMENT PRICES FOR THE ITEM. THIS BEING THE CASE, AND SINCE THE OFFER OF THE VITEX FOOD PRODUCTS COMPANY PASSED THE TASTE- TEST, RESOLICITATION OF OFFERS WOULD HAVE BEEN UNWARRANTED. MOREOVER, IT IS OBVIOUS THAT THE AGENCY COULD HAVE HAD NO ASSURANCE AT THAT TIME THAT A RESOLICITATION OF THE ITEM WOULD HAVE BROUGHT A LOWER PRICE FOR THE PRODUCT REQUIRED WHICH WOULD PASS THE TEST SINCE THE SAMPLES OF ALL OTHER BIDDERS HAD FAILED. FURTHER, ITEM NO. 1 WAS RESOLICITED ONLY BECAUSE NO SAMPLES WERE RECEIVED FOR THE ITEM THAT WOULD PASS THE TEST. THE DEFENSE SUPPLY AGENCY ALSO POINTS OUT THAT FROM THE RANGE OF PRICES SUBMITTED BY EACH OFFEROR FOR THE QUANTITIES AND DESTINATIONS INVOLVED, IT DOES NOT SEEM THAT THE QUANTITY PROCURED HAD ANY SIGNIFICANT EFFECT ON PRICE, BUT RATHER THAT THE PRICE DIFFERENCES WERE RELATED PRIMARILY TO TRANSPORTATION COSTS.

IN REGARD TO THAT PART OF YOUR PROTEST PERTAINING TO THE LACK OF PROMPT AND COMPLETE REPLIES TO INQUIRIES MADE BY YOU IN CONNECTION WITH SUCH MATTERS, THE NEW YORK REGION, DEFENSE SUBSISTENCE SUPPLY CENTER HAS BEEN REQUESTED TO TAKE CORRECTIVE ACTION IN THIS REGARD IN THE FUTURE.

IN VIEW OF THE FOREGOING, WE FIND NO LEGAL OBJECTION TO THE ACTION TAKEN BY THE DEFENSE SUPPLY AGENCY IN AWARDING CONTRACTS UNDER NOTICE OF INTENT TO PURCHASE NO. NI-574-63.