B-159169, JULY 12, 1966, 46 COMP. GEN. 22

B-159169, JULY 12, 1966, 46 COMP. GEN. 22

CONTRACTS - NEGOTIATION - PUBLIC EXIGENCY - DELIVERY SCHEDULE V. PRICE. WHERE THE RECORD SHOWS A REASONABLE BASIS FOR THE CONCLUSION OF THE CONTRACTING OFFICER TO AWARD A CONTRACT TO THE SECOND LOW BIDDER PROPOSING A MORE FAVORABLE OVERALL DELIVERY SCHEDULE ON THE PROCUREMENT OF HELMETS FOR WHICH A PUBLIC EXIGENCY EXISTED AND WHICH WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304/A) (2), THE AWARD MADE WILL NOT BE DISTURBED SIMPLY BECAUSE A DIFFERENT METHOD OF EVALUATION--- "HELMET-DAYS"---MAY HAVE RESULTED IN A DIFFERENT CONCLUSION, THE AUTHORITY GRANTED BY SECTION 2304/A) (2) TO NEGOTIATE A PROCUREMENT BECAUSE OF THE CRITICAL IMPORTANCE OF EARLY DELIVERY CONTEMPLATING THE POSSIBILITY OF AWARD TO THE BIDDER OFFERING THE BEST DELIVERY SCHEDULE, EVEN IF NOT THE BEST PRICE; HOWEVER, THE ADMINISTRATIVE AGENCY IN FUTURE PROCUREMENTS SHOULD TAKE STEPS TO ASSURE THE USE OF THE MOST MEANINGFUL AND APPROPRIATE METHOD FOR THE EVALUATION OF COMPLETING DELIVERY SCHEDULES.

TO GENTEX CORPORATION, JULY 12, 1966:

YOUR LETTER OF MAY 6, 1966, IN WHICH YOU PROTEST THE AWARD OF CONTRACT DSA-100-3767 FOR FLYING (CRASH) HELMETS BY DEFENSE SUPPLY AGENCY (DSA) TO SIERRA ENGINEERING COMPANY, HAS BEEN FORWARDED TO THIS OFFICE BY CONGRESSMAN JOSEPH M. MCDADE FOR DECISION. WE HAVE SINCE RECEIVED A REPORT ON THIS MATTER FROM DSA, WHICH ESTABLISHES THE RECORD OF PERTINENT FACTS SET FORTH BELOW.

THE PROCUREMENT WAS NEGOTIATED, RATHER THAN ADVERTISED, BECAUSE THE ITEMS BEING PROCURED WERE ONES FOR WHICH A PUBLIC EXIGENCY EXISTED. SEE 10 U.S.C. 2304/A) (2). DUE TO THE URGENCY INVOLVED, QUOTATIONS WERE SOLICITED ORALLY FROM THE THREE FIRMS ON A QUALIFIED PRODUCTS LIST. THE QUOTATIONS WERE TO BE IN ACCORDANCE WITH THE TERMS OF A PREVIOUS REQUEST FOR PROPOSALS (RFP), BUT ON THE BASIS OF THE BEST DELIVERY POSSIBLE RATHER THAN ON THE BASIS OF A PREFERRED OR MINIMUM DELIVERY SCHEDULE. YOU SUBMITTED A UNIT PRICE OF $8520, COMPARED TO SIERRA'S PRICE OF $85.83.

THE RESPECTIVE PROPOSED DELIVERY SCHEDULES WERE AS FOLLOWS:

GENTEX SIERRA MAY 23---500 JUNE 6---500 (1000) JUNE 20---500 (1500) JUNE 30---500 (2000) JULY 10---500 (2500) 75 DAYS AFTER AWARD (JULY 4/---1200 AUG. 1---600 (3100) AUG. 9---600 (3700) 105 DAYS AFTER AWARD (AUG. 3/--- 2860 (4060) AUG. 15---600 (4300)AUG. 22---600 (4900) AUG. 29---650 (5550) SEPT. 5---650 (6200) 135 DAYS AFTER AWARD (SEPT. 2/---3090 (7150) SEPT. 12 ---700 (6900) SEPT. 19---700 (7600) SEPT. 26---700 (8300) OCT. 3---700 (9000) 165 DAYS AFTER AWARD (OCT. 3/---2504 (9654) OCT. 10---654 (9654)

SIERRA WAS AWARDED THE CONTRACT ON APRIL 20, 1966, BECAUSE THE CONTRACTING OFFICER CONCLUDED THAT IT HAD OFFERED A MORE FAVORABLE DELIVERY SCHEDULE OVERALL. THE ADMINISTRATIVE AGENCY SUPPORTS THIS CONCLUSION WITH THE FOLLOWING COMPARISON OF THE AVAILABILITY OF HELMETS DSA WOULD ENJOY UNDER THE PROPOSED DELIVERY SCHEDULES:

PLUS OR MINUS

SIERRA GENTEX SIERRA OVER

DATE (CUM) (CUM) GENTEX

4 JULY 1966 1200 2000 MINUS 800

3 AUGUST 1966 4060 3100 PLUS960

2 SEPTEMBER 1966 7150 5550 PLUS1600

2 OCTOBER 1966 9654 8300 PLUS1354

3 OCTOBER 1966 9000 PLUS654 10 OCTOBER 1966

9654 0

IN RESPONSE, YOU INDICATE THAT SIERRA'S APPARENT ADVANTAGE IS ILLUSORY, SINCE IT DEPENDS ON LIMITING THE COMPARISON TO THOSE DAYS WHEN SIERRA HAS COMPLETED EACH OF, OR IS SCHEDULED TO MAKE ONE OF, ITS FOUR DELIVERIES. YOU POINT OUT THAT YOUR DELIVERY SCHEDULE CAN BE MADE TO APPEAR EQUALLY ATTRACTIVE BY LIMITING THE COMPARISON TO THOSE DAYS JUST PRECEDING SIERRA'S SCHEDULED DELIVERY DATES. IN ADDITION, YOU ALSO MAINTAIN THAT IF ONE MAKES A COMPARATIVE ANALYSIS OF THE ,AVAILABILITY OF HELMETS" UNDER THE TWO SCHEDULES, AND BASES THAT ANALYSIS ON THE DIFFERENCE BETWEEN THE NUMBER OF HELMETS DSA WOULD POSSESS UNDER THE PROPOSED DELIVERY SCHEDULES ON EACH DAY DURING THE PERIOD OF DELIVERY, ONE DISCOVERS THAT GENTEX OFFERS 142,480 "HELMET DAYS" COMPARED TO SIERRA'S 23,048 "HELMET-DAYS;, (HOWEVER, OUR REVIEW OF YOUR ANALYSIS INDICATES THAT CERTAIN CORRECTIONS SHOULD BE MADE, AND THAT SUCH CORRECTIONS WOULD REDUCE THE APPARENT MAGNITUDE OF YOUR 6 TO 1 "HELMET-DAY" ADVANTAGE TO AN ORDER OF 3 TO 1.)

YOUR ARGUMENT CONCERNING THE DEFICIENCY OF THE MEANS BY WHICH THE CONTRACTING OFFICER EVALUATED THE DELIVERY SCHEDULES IS PERSUASIVE, AND WE ARE INCLINED TO THE VIEW THAT THE "HELMET-DAY" METHOD MAY HAVE BEEN A MORE APPROPRIATE AND ACCURATE METHOD OF DETERMINING THE RELATIVE ADVANTAGES OF THE DELIVERY SCHEDULES OFFERED IN THE INSTANT PROCUREMENT. HOWEVER, IT IS APPARENT THAT THE DELIVERY SCHEDULE TENDERED BY SIERRA OFFERED CERTAIN DISTINCT ADVANTAGES OVER YOURS, SUCH AS GREATER CUMULATIVE DELIVERIES NOT ONLY ON MOST OF THE DATES SET OUT IN SIERRA'S SCHEDULE, BUT ALSO FOR CERTAIN PERIODS OF TIME AFTER THOSE DATES. THE CONTRACTING OFFICER CLEARLY APPEARS TO HAVE RELIED ON THESE ADVANTAGES IN HIS WRITTEN JUSTIFICATION FOR RECOMMENDING AWARD OF THE CONTRACT TO SIERRA, THE HIGHER OFFEROR, ON THE BASIS THAT THAT FIRM'S DELIVERY SCHEDULE WAS MORE FAVORABLE OVERALL. FOR EXAMPLE, HE HAS SPECIFICALLY NOTED THAT SIERRA OFFERED THE COMPLETION OF DELIVERIES 1 WEEK IN ADVANCE OF YOUR SCHEDULE. FURTHERMORE, WHILE SIERRA SUBMITTED ITS OFFER ON THE BASIS OF MONTHLY INSTEAD OF WEEKLY DELIVERY SCHEDULE, ITS CUSTOM HAD BEEN TO DELIVER FLYING (CRASH) HELMETS IN LOTS FROM 100 TO 600 UNITS, WHICH INDICATED, IN THE CONTRACTING OFFICER'S OPINION, THAT ACTUAL DELIVERIES FROM SIERRA MIGHT BE EXPECTED TO OCCUR EARLIER THAN PROMISED.

IN HIS JUSTIFICATION, THE CONTRACTING OFFICER NOTED THAT IN ADDITION TO HIS VIEW THAT SIERRA HAD OFFERED THE MORE FAVORABLE DELIVERY SCHEDULE OVERALL, GENTEX HAD BEEN UNABLE TO MEET THE ORIGINAL DELIVERY SCHEDULE IN A PREVIOUS "PUBLIC EXIGENCY" CONTRACT FOR THE SUBJECT ITEMS. SUBSEQUENTLY OBSERVED, IN A REPORT IN RESPONSE TO YOUR PROTEST, THAT YOUR FIRM WAS ALSO DELINQUENT IN VARYING DEGREES ON FOUR OTHER CONTRACTS IT HAD COMPLETED SINCE JULY OF 1965, WHILE OF THE NINE CONTRACTS SIERRA HAD COMPLETED FOR THE PURCHASING ACTIVITY DURING THIS PERIOD, ALL DELIVERIES HAD BEEN RECEIVED ON OR BEFORE THE SCHEDULED DELIVERY DATES.

IN OUR VIEW, THE AUTHORITY GRANTED BY 10 U.S.C. 2304/A) (2), TO NEGOTIATE A PROCUREMENT BECAUSE OF THE CRITICAL IMPORTANCE OF EARLY DELIVERY CONTEMPLATES THE POSSIBILITY OF AWARD TO AN OFFEROR WHO OFFERS THE BEST DELIVERY SCHEDULE, EVEN IF HE HAS NOT OFFERED THE BEST PRICE. WHILE YOUR ARGUMENT CONCERNING THE DEFICIENCY IN THE METHOD BY WHICH THE CONTRACTING OFFICER DETERMINED THE RELATIVE ADVANTAGES OF THE DELIVERY SCHEDULES IS NOT WITHOUT MERIT, WE BELIEVE THE RECORD SHOWS A REASONABLE BASIS FOR THE CONTRACTING OFFICER'S CONCLUSION THAT SIERRA PROPOSED A MORE FAVORABLE DELIVERY SCHEDULE OVERALL THAN GENTEX, AND WE ARE THEREFORE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION WAS SO UNREASONABLE OR SO WITHOUT FOUNDATION AS TO CONSTITUTE ARBITRARY OR CAPRICIOUS ACTION WHICH WOULD RENDER THE AWARDED CONTRACT CLEARLY OR PALPABLY ILLEGAL. SEE B-158126, DATED MARCH 10, 1966. UNDER THESE CIRCUMSTANCES, AND SINCE THERE IS NO INDICATION THAT THE CONTRACTING OFFICER'S DETERMINATION WAS NOT MADE IN GOOD FAITH, THIS OFFICE IS NOT INCLINED TO DIRECT CANCELLATION OF SIERRA'S CONTRACT SIMPLY BECAUSE A DIFFERENT METHOD OF EVALUATION MAY HAVE RESULTED IN A DIFFERENT CONCLUSION. HOWEVER, WE ARE RECOMMENDING THAT THE ADMINISTRATIVE AGENCY TAKE STEPS TO ASSURE THAT THE MOST MEANINGFUL AND APPROPRIATE METHOD FOR THE EVALUATION OF COMPETING DELIVERY SCHEDULES BE USED IN ANY FUTURE PROCUREMENTS OF THIS NATURE.

FOR THE FOREGOING REASONS, WE WOULD NOT BE JUSTIFIED IN UPHOLDING YOUR PROTEST ON THIS MATTER.