B-159474, NOV. 28, 1966

B-159474, NOV. 28, 1966

TO MICROFILM BUSINESS SYSTEMS COMPANY:

WE REFER TO YOUR LETTER OF JUNE 14, 1966, PROTESTING AGAINST AN AWARD TO THE MICRO RECORDS COMPANY, INCORPORATED, BALTIMORE, MARYLAND, UNDER INVITATION FOR BIDS NO. 04-693-66-22, ISSUED BY THE 6592ND SUPPORT GROUP (AFSC) UNITED STATES AIR FORCE, LOS ANGELES, CALIFORNIA.

IN THE FALL OF 1965, AN IFB WAS ISSUED FOR THE PROCUREMENT OF SERVICES TO MICROFILM, DUPLICATE AND MAIL TEST REPORTS, AND TO ESTABLISH, UPDATE AND MAIL INDEX CARDS IN ACCORDANCE WITH THE SPECIFICATIONS SETOUT IN THE INVITATION. THIS IFB SPECIFIED THE USE OF TERMATREX (JONKER) OR ROYAL MCBEE INDEX CARDS OR THEIR EQUAL. SUBSEQUENTLY, A BIDDERS' BRIEFING CONFERENCE WAS HELD AND IT WAS DETERMINED TO BE DESIRABLE TO PERMIT BIDDING ON APPROACHES OTHER THAN THOSE SPECIFIED IN THE INVITATION. AS A RESULT, THE IFB WAS CANCELLED AND A NEW SPECIFICATION WAS PREPARED ON A TWO-STEP BASIS. THE FIRST STEP, A LETTER REQUEST FOR TECHNICAL PROPOSALS, WAS ISSUED ON FEBRUARY 16, 1966, AND DID NOT REQUIRE ANY PARTICULAR MAKE OF INDEX CARDS, BUT DID STATE THAT THEY WOULD BE SUPPLIED ON A GOVERNMENT FURNISHED EQUIPMENT (GFE) BASIS.

EIGHT PROPOSALS WERE SUBMITTED IN RESPONSE TO THE REQUEST, FIVE OF WHICH WERE DETERMINED TO BE ACCEPTABLE. A TRI-SERVICE EVALUATION COMMITTEE OF ARMY, NAVY, AND AIR FORCE PERSONNEL EVALUATED THE TECHNICAL PROPOSALS AND DETERMINED THAT ONLY THOSE INDEX CARDS SUPPLIED BY THE JONKER CORPORATION SATISFACTORILY MET THE GOVERNMENT'S NEEDS. SINCE MICROFILM AND ANOTHER FIRM HAD PROPOSED THE USE OF CARDS OTHER THAN THE TYPE SUPPLIED BY JONKER, THEY WERE INFORMALLY CONTACTED BY THE EVALUATION COMMITTEE AND ADVISED OF ITS DECISION TO USE JONKER CARDS EXCLUSIVELY. BY LETTER OF APRIL 14, 1966, MICROFILM ACKNOWLEDGED THIS CONTACT AND AGREED TO BID ON THE JONKER CARDS ALTHOUGH THEY DISAGREED WITH THE DETERMINATION. THEREAFTER, ON MAY 3, 1966, IFB NO. 04-693-66 22 WAS ISSUED AND THE FIVE FIRMS WHOSE TECHNICAL PROPOSALS HAD BEEN ACCEPTED SUBMITTED BIDS AS FOLLOWS:

FIRM BID PRICE

----- --------- MICRO RECORDS CO., INC.

$ 74,569 MICROFILM BUSINESS SYSTEMS CO. 136,187 MICRO RECORD SALES CORP. 155,561 DILINE CORP. 159,717 ASCAM 171,117

INASMUCH AS THE DIFFERENCE BETWEEN THE TWO LOW BIDS EXCEEDED $60,000 AND PURSUANT TO THE ARMED SERVICES PROCUREMENT REGULATION, ASPR SEC. 2-406.3 (E), MICRO RECORDS WAS REQUESTED BY LETTER FROM THE CONTRACTING OFFICER DATED MAY 20, 1966, TO VERIFY THE CORRECTNESS OF ITS BID. IN REPLY, MICRO RECORDS CLAIMED TO HAVE DISCOVERED A MISTAKE IN ITEM 10A OF ITS BID AND, ACCORDINGLY, REQUESTED THAT ITS BID PRICE BE INCREASED IN THE AMOUNT OF $44,000. THE STAFF JUDGE ADVOCATE OF THE AIR FORCE LOGISTICS COMMAND (AFLC) REVIEWED THE EVIDENCE ON THIS POINT SUBMITTED BY MICRO RECORDS AND DETERMINED THAT A MISTAKE HAD BEEN MADE. SEE ASPR 2-406.3 (B) 3. MICRO RECORDS WAS THEN AUTHORIZED TO MODIFY ITS BID PRICE IN THE AMOUNT REQUESTED, THEREBY MAKING ITS TOTAL BID $118,569, MORE THAN $17,000 LESS THAN MICROFILM'S BID. AWARD WAS THEN MADE TO MICRO RECORDS AT THE INCREASED BID PRICE, WHICH WAS SUBSEQUENTLY INCREASED BY $25,000 BECAUSE THE GOVERNMENT COULD NOT SUPPLY THE INDEX CARDS ON TIME, THUS SHIFTING THIS TASK TO THE CONTRACTOR.

AS NOTED IN THE ADMINISTRATIVE REPORT, THE PROTEST CONSISTS OF FIVE ALLEGATIONS: (1) THAT THE APPROVAL GIVEN TO MICRO RECORD'S MISTAKE IN BID CLAIM WAS IMPROPER; (2) THAT IT IS MORE ECONOMICAL IN THIS CASE FOR THE GOVERNMENT TO CONTRACT WITH A WEST COAST FIRM RATHER THAN AN EAST COAST IRM; (3) THAT THE MANDATORY USE OF JONKER CARDS WAS TECHNICALLY IMPROPER; (4) THAT THE AWARD SHOULD NOT HAVE BEEN MADE PENDING A DECISION BY THE COMPTROLLER GENERAL, AND; (5) THAT THERE MAY BE A FINANCIAL CONNECTION BETWEEN THE JONKER CORPORATION AND CERTAIN UNNAMED BIDDERS AND/OR THAT JONKER ENJOYED A PRIVILEGED POSITION IN RELATIONSHIP TO THE AIR FORCE. THESE ALLEGATIONS WILL BE CONSIDERED IN ORDER.

IN REGARD TO MICROFILM'S FIRST CONTENTION THAT IT WAS IMPROPER TO ALLOW MICRO RECORD'S MISTAKE IN BID CLAIM, WE NOTE THAT, GENERALLY, REFORMATION OR MODIFICATION OF A CONTRACT IS NOT ALLOWED UNLESS THE CONTRACTOR CAN PROVE BY CLEAR AND CONVINCING EVIDENCE THAT A MISTAKE WAS MADE, THE NATURE OF THE MISTAKE, AND THE BID PRICE ACTUALLY INTENDED. 41 COMP. GEN. 469, 42 COMP. GEN. 723. WE HAVE IN OUR FILE A COPY OF A LETTER DATED MAY 11, 1966, FROM THE JONKER CORPORATION TO MICRO RECORDS STATING THE FORMER'S PRICES FOR THE WORK AND MATERIALS IN QUESTION. ON PAGE TWO, UNDER THE HEADING,"QUOTATION," IS THE FOLLOWING STATEMENT:

"A. OUR PRICE FOR CREATION OF THE INITIAL FILE WILL BE $48,000, OR $ .0011 PER HOLE (ITEM (.'

INASMUCH AS MICRO RECORDS QUOTED A UNIT PRICE OF ?00025 AND A TOTAL PRICE OF $11,000 FOR ITEM 10A, BOTH OF WHICH ARE SUBSTANTIALLY BELOW THE PRICE CHARGED BY JONKER, THERE IS NO DOUBT IN OUR MIND THAT A MISTAKE WAS IN FACT MADE. IN ADDITION, MICRO RECORDS HAS STATED THAT IT INTENDED TO BID A UNIT PRICE OF ?00125 AND A TOTAL PRICE OF $55,000. TO SUBSTANTIATE THIS, MICRO RECORDS HAS PROFFERED ITS WORKSHEET AND NOTED THAT IT ARRIVED AT ITS BID PRICES BY ADDING 25 PERCENT TO ITS COST FOR THE PARTICULAR ITEMS. WE HAVE VERIFIED THIS ARITHMETICALLY AND AGREE IT IS THE METHOD USED BY MICRO RECORDS. ACCORDINGLY, WE FEEL THAT MICRO RECORDS HAS ADEQUATELY MET ITS BURDEN OF PROOF AND THE ACTION OF THE AIR FORCE ALLOWING MODIFICATION OF THE BID PRICE WAS ENTIRELY PROPER.

IN REGARD TO MICROFILM'S NEXT TWO CONTENTIONS, WHICH WILL NOT BE REITERATED AT THIS POINT, WE CALL YOUR ATTENTION TO THE FACT THAT BOTH DISPUTE FACTUAL DETERMINATIONS MADE BY AIR FORCE PERSONNEL, TO WIT: (1) THAT THERE WERE NO REAL COST LIMITATIONS IN THIS PROCUREMENT ON ACCOUNT OF THE GEOGRAPHIC LOCATION OF BIDDERS AND, THEREFORE, NO BASIS FOR REJECTION OF A BIDDER BECAUSE OF ITS GEOGRAPHIC LOCATION AND; (2) THAT THE DECISION TO USE JONKER CARDS ONLY WAS BASED ON DETAILED CONSIDERATIONS OF THE OVERALL SERVICEABILITY OF JONKER CARDS AS OPPOSED TO ROYAL MCBEE CARDS.

WHEN THERE IS A FACTUAL DISPUTE BETWEEN THE GOVERNMENT AND A CONTRACTOR THE GENERAL ACCOUNTING OFFICE WILL ASSUME THE CORRECTNESS OF THE ADMINISTRATIVE REPORT IN THE ABSENCE OF A SHOWING THAT THE ADMINISTRATIVE DECISION WAS ARBITRARY, CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE. SEE 37 COMP. GEN. 568. IN THIS CASE, MICROFILM HAS PRESENTED NO SUCH EVIDENCE NOR ARE WE AWARE OF ANY SUCH EVIDENCE. WE FEEL THE STATEMENT NUMBERED (1) ABOVE IS SELF-EXPLANATORY. AS TO THE MANDATORY USE OF JONKER CARDS, THE TRI-SERVICE COMMITTEE MENTIONED ABOVE VISITED THE MCBEE OFFICES AND DISCUSSED DELIVERY SCHEDULES, COST, INDEXING CAPABILITIES, ETC. THE COMMITTEE DETERMINED THAT THE ROYAL MCBEE INDEX CARDS WERE UNACCEPTABLE FOR A NUMBER OF REASONS, ONE OF WHICH WAS AS FOLLOWS:

"E. FINALLY, MR. BRADFORD STATED THAT DELIVERY OF MCBEE CARDS, IN THE QUANTITIES WE REQUIRED, WOULD TAKE 8-10 WEEKS. FOR SPECIAL-ORDER CARDS (I.E., FOR ADDITIONAL REINFORCEMENT, MORE TABS, ETC.), DELIVERY WOULD TAKE 3-6 MONTHS. THE COST QUOTED FOR SPECIALLY ORDERED CARDS WAS HIGHER THAN THAT FOR JONKERS CARDS; BUT, IN ANY EVENT, THE COMMITTEE CONSIDERED THE DELIVERY DELAY TO BE UNACCEPTABLE.'

EVEN IF THIS HAD BEEN THE ONLY REASON, WE FEEL THE DECISION TO USE JONKER CARDS EXCLUSIVELY COULD NOT BE SAID TO BE ARBITRARY, CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE.

AS TO MICROFILM'S FOURTH ALLEGATION, THAT AWARD SHOULD HAVE BEEN WITHHELD PENDING DETERMINATION OF THE PROTEST BY THE COMPTROLLER GENERAL, THE AIR FORCE HAS STATED THAT THEIR PROCUREMENT PERSONNEL DID NOT RECEIVE THE PROTEST UNTIL AFTER THE AWARD HAD BEEN MADE. AWARD WAS MADE TO MICRO RECORDS ON JUNE 16, 1966, AND THE LETTER OF PROTEST, DATED JUNE 14, 1966, WAS NOT RECEIVED IN THE BASE PROCUREMENT OFFICE UNTIL JUNE 17, 1966. MIGHT NOTE THAT THE LETTER OF PROTEST SENT TO THE COMPTROLLER GENERAL DATED JUNE 14, 1966, WAS NOT RECEIVED AND RECORDED UNTIL JUNE 17, 1966.

FINALLY, MICROFILM'S ALLEGATION THAT THERE MAY BE SOME FINANCIAL CONNECTION BETWEEN THE JONKER CORPORATION AND CERTAIN BIDDERS AND/OR BETWEEN JONKER AND THE AIR FORCE IS NOT SUPPORTED BY THE RECORD. THE ONLY EVIDENCE WHICH MICROFILM PROFFERS IS THE FACT THAT A REPRESENTATIVE OF JONKER WAS PRESENT AT THE BIDDERS' BRIEFING CONFERENCE IN NOVEMBER 1965 AND THAT THIS "* * * IMPLIED OFFICIAL SANCTION OF THEIR UTTERANCES.' FEEL THIS CONCLUSION DOES NOT FOLLOW FROM THE EVIDENCE. ASSUMING ARGUENDO, THAT THERE MAY HAVE BEEN A PREFERENCE FOR JONKER CARDS AT THIS POINT IN THE PROCUREMENT, STILL, BIDDERS WERE PERMITTED TO BID ON ANY TYPE OF INDEX CARD SYSTEM THEY CHOSE, AND IT WAS NOT UNTIL THE TRI-SERVICE EVALUATION COMMITTEE INVESTIGATED THE SITUATION AND MADE THE TECHNICAL FINDINGS NOTED ABOVE THAT BIDDERS WERE RESTRICTED TO THE JONKER SYSTEM. IN VIEW OF THOSE FINDINGS, WE CANNOT SAY THE PROCUREMENT PERSONNEL ACTED IMPROPERLY IN THIS RESPECT.