B-161757, AUG. 25, 1967

B-161757, AUG. 25, 1967

BIDS - QUALIFIED PRODUCTS DECISION TO CLARKSON LABORATORIES, INC., PROTESTING AGAINST DEFENSE SUPPLY AGENCY WITHHOLDING A PORTION OF THE PROCUREMENT FOR FURNISHING AIRCRAFT CLEANING COMPOUND ON BASIS THAT PRODUCT MANUFACTURED IN WESTERN PLANT WAS REMOVED FROM QUALIFIED PRODUCTS LIST. BIDDER WHO WAS LOW IN ALL ITEMS FOR A PROCUREMENT OF AIRCRAFT CLEANING COMPOUND BUT WHO WAS NOT AWARDED PORTION TO BE SUPPLIED FROM WESTERN PLANT BECAUSE BIDDER'S PRODUCT HAD BEEN REMOVED FROM QUALIFIED PRODUCTS LIST BECAUSE OF DEFICIENCIES MUST HAVE PROTEST DENIED SINCE ADEQUACY OF SPECIFICATIONS ARE PRIMARILY MATTERS FOR PROCURING AGENCY AND WITHDRAWAL OF PRODUCT FOR DEFICIENCIES WAS A PROPER EXERCISE OF PROCUREMENT RESPONSIBILITY.

TO EDWARD W. HELLER, PRESIDENT:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 9, 1967, AND SUBSEQUENT CORRESPONDENCE PROTESTING AGAINST THE WITHHOLDING OF AN AWARD TO YOUR COMPANY UNDER DEFENSE SUPPLY AGENCY INVITATION FOR BIDS NO. DSA- 400-67-B-6472.

THE INVITATION ISSUED ON MARCH 17, 1967, INVITED BIDS ON 3,930 DRUMS, IN UNITS OF 55 GALLON DRUMS, OF AIRCRAFT CLEANING COMPOUND IN ACCORDANCE WITH SPECIFICATION MIL-C-22543D DATED FEBRUARY 1, 1967. THIS SPECIFICATION REQUIRES THAT THE CLEANING COMPOUND FURNISHED SHALL BE A PRODUCT WHICH HAS BEEN INSPECTED AND HAS PASSED THE SPECIFIED QUALIFICATION TESTS AND HAS BEEN LISTED ON OR APPROVED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST (QPL). PARAGRAPH 6.3 OF THE SPECIFICATION WARNS BIDDERS THAT AWARD WILL BE MADE ONLY FOR PRODUCTS THAT WERE QUALIFIED AT BID OPENING AND IDENTIFIES THE NAVY ACTIVITIES RESPONSIBLE FOR MAINTAINING THE QUALIFIED PRODUCTS LIST AND FURNISHING INFORMATION PERTAINING TO THE QUALIFICATION OF PRODUCTS. PARAGRAPH 6.3.1 FURTHER ADVISES BIDDERS THAT PRODUCTS FURNISHED MUST BE IDENTICAL WITH CLEANING COMPOUND SAMPLES WHICH HAVE BEEN SUBMITTED BY THE MANUFACTURER AND HAVE BEEN INSPECTED AND APPROVED FOR INCLUSION IN THE QUALIFIED PRODUCTS LIST, AND THAT A PRODUCT WILL BE SUBJECT TO IMMEDIATE WITHDRAWAL FROM THE LIST IF THE PRODUCT DEVIATES FROM THE COMPOSITION OF THE APPROVED PRODUCT OR FAILS TO PERFORM SATISFACTORILY IN SERVICE. NO FORMULA FOR THE COMPOUND IS INCLUDED IN THE SPECIFICATION AND ITS COMPOSITION IS SPECIFICALLY LEFT TO THE MANUFACTURER'S OPTION. BIDDERS WERE ADVISED THAT AWARDS WOULD BE MADE ON AN F.O.B. DESTINATION OR F.O.B. ORIGIN BASIS OR BOTH, AND BIDDERS WERE REQUESTED TO SUBMIT BIDS ON EITHER BASIS OR BOTH.

FIVE BIDS WERE RECEIVED AND WERE OPENED ON APRIL 26, 1967. YOUR COMPANY OFFERED TO FURNISH 2,110 DRUMS FROM YOUR CAMDEN, NEW JERSEY, PLANT AT $41.25 PER DRUM, F.O.B. ORIGIN, AND FROM $44.00 TO $45.30 PER DRUM F.O.B. DESTINATION. YOU ALSO OFFERED TO FURNISH 1,820 DRUMS FROM YOUR SAN FRANCISCO, CALIFORNIA, PLANT AT $44.55 PER DRUM, F.O.B. ORIGIN, AND $48.40 TO $49.50 PER DRUM, F.O.B. DESTINATION. OTHER BIDS RECEIVED RANGED FROM $43.56 TO $69.12 PER DRUM, F.O.B. ORIGIN, AND FROM $45.65 TO $78.65 PER DRUM, F.O.B. DESTINATION. ALTHOUGH YOU DID NOT FURNISH GUARANTEED SHIPPING DATA TO BE USED IN EVALUATING YOUR F.O.B. ORIGIN BIDS, YOU WERE THE LOW BIDDER ON AN F.O.B. DESTINATION BASIS FOR ALL SUBITEMS. IN THE SPACE PROVIDED IN THE INVITATION, YOU IDENTIFIED THE QUALIFIED PRODUCT YOU WERE OFFERING AS YOUR CLARCO AQS, TEST NO. NAEC AML 2453. SINCE YOU WERE THE LOW RESPONSIVE BIDDER FOR THE PRODUCT THAT WOULD BE PRODUCED IN YOUR CAMDEN, NEW JERSEY, PLANT ON AN F.O.B. DESTINATION BASIS AND SINCE THAT PRODUCT IS LISTED ON THE QUALIFIED PRODUCTS LIST AND CONTAINS NO KNOWN DEFICIENCIES, AWARD WAS MADE TO YOU FOR 2,110 DRUMS TO BE PRODUCED IN CAMDEN, NEW JERSEY, FOR DELIVERY TO ATLANTA, GEORGIA; COLUMBUS, OHIO; MEMPHIS, TENNESSEE; AND RICHMOND, VIRGINIA. ALTHOUGH YOUR COMPANY IS ALSO THE LOW F.O.B. DESTINATION BIDDER ON THE REMAINING 1,820 DRUMS FOR DELIVERY TO WESTERN DESTINATIONS WHICH WOULD BE PRODUCED IN YOUR SAN FRANCISCO PLANT, NO AWARD THEREFOR HAS BEEN MADE BECAUSE CLEANING COMPOUNDS PRODUCED AT THAT PLANT HAVE BEEN REMOVED FROM THE QUALIFIED PRODUCTS LIST. HOWEVER, YOUR CONTRACT RESERVES TO THE GOVERNMENT THE RIGHT TO MAKE FURTHER AWARDS UNDER THE INVITATION DURING THE BID ACCEPTANCE TIME. WE UNDERSTAND THAT YOUR COMPANY REQUESTED THAT NO AWARD OF THIS RESERVED PORTION BE MADE UNTIL YOUR PROTEST AGAINST THE REMOVAL OF YOUR SAN FRANCISCO PRODUCT FROM THE QUALIFIED PRODUCTS LIST IS RESOLVED. THIS REMOVAL ACTION WAS TAKEN AFTER THE DEPARTMENT OF THE NAVY DISCOVERED DEFICIENCIES IN THE PRODUCT FROM THE SAN FRANCISCO PLANT DELIVERED UNDER TWO PRIOR CONTRACTS WHEREUNDER A LARGE NUMBER OF EXCESSIVELY BULGED CONTAINERS WERE RECEIVED. FOR EXAMPLE, THE U.S. NAVAL AIR STATION, NORTH ISLAND, SAN DIEGO, CALIFORNIA, REPORTED THAT 285 FIFTY-FIVE GALLONDRUMS HAD HEAD-BULGED TO NEAR RUPTURE. ONE 5 GALLON PAIL OF COMPOUND TAKEN FROM THE SAN FRANCISCO PLANT WAS TESTED AND SHOWED A 30 PERCENT HYDROGEN IN THE GAS PHASE.

THE DEPARTMENT OF THE NAVY HAS ADVISED THE DEFENSE SUPPLY CENTER THAT, BASED ON SUCH INFORMATION AND ITS OWN TESTS, IT HAD DETERMINED THAT THE PRODUCT PRODUCED AT THE SAN FRANCISCO PLANT WAS UNSUITABLE FOR USE BY THE NAVY, AND THAT THIS PLANT WOULD NOT BE CONSIDERED A SUITABLE SOURCE FOR CLARCO AQS, A QUALIFIED PRODUCT, UNTIL CONTRARY ADVICE WAS RECEIVED FROM YOUR COMPANY. THE CONTRACTING AGENCY INDICATES THAT QUALIFICATION OF SUCH COMPOUND FROM THE SAN FRANCISCO PLANT WILL DEPEND ON CORRECTION OF THE DEFICIENCIES IN THE MATERIAL AND EVIDENCE THAT ADEQUATE STEPS HAVE BEEN TAKEN TO CONTROL THE QUALITY OF THE PRODUCT TO BE SUPPLIED FROM THAT SOURCE.

IT IS CONTENDED BY YOU THAT THE FAILURE OF THE SAN FRANCISCO PRODUCT TO REMAIN INERT AND STABLE, WITHIN ALLOWABLE LIMITATIONS, DURING LONG-TERM STORAGE IS CAUSED BY, AND IS A DEFICIENCY IN, THE SPECIFICATION ITSELF. IT IS POINTED OUT THAT THE PLANT'S PRODUCT MEETS THE SPECIFICATION, AND THAT THE SPECIFICATION PERMITS THE FURNISHING OF A COMPOUND PRODUCT THAT WILL NOT HAVE ACTUAL STABILITY IN STORAGE. THEREFORE, YOU BELIEVE THAT YOUR PRODUCT SHOULD NOT BE REMOVED FROM THE QPL REGARDLESS OF THE DIFFICULTIES ENCOUNTERED IN ITS USE UNLESS THE NAVY CAN DEMONSTRATE WHEREIN THE PRODUCT FAILS TO MEET THE SPECIFICATION. THE NAVY'S POSITION IS, ESSENTIALLY, THAT YOUR SAN FRANCISCO PLANT WAS NEVER QUALIFIED ON THE BASIS OF ANY SAMPLES OF THE MATERIAL PRODUCED AT THAT POINT. EXTENSION OF QUALIFICATION TO THE MANUFACTURER'S PLANTS OTHER THAN THAT AT WHICH THE QUALIFIED SAMPLE WAS PRODUCED IS CUSTOMARILY GRANTED PROVIDED THAT THE ALTERNATE PLANT HAS ADEQUATE FACILITIES FOR PRODUCTION. WHILE IT IS YOUR CONTENTION THAT THE MATERIALS PRODUCED AT THE CAMDEN AND AT SAN FRANCISCO PLANTS ARE ESSENTIALLY THE SAME, THE FACT REMAINS THAT THE COMPOUND PRODUCT PRODUCED AT THE SAN FRANCISCO PLANT DOES NOT MEET THE NEEDS OF THE NAVY, WHEREAS THAT PRODUCED AT THE CAMDEN PLANT IS SATISFACTORY. THE USING AGENCY ADVISES THAT THE SPECIFICATION IS A PERFORMANCE-TYPE SPECIFICATION; THAT IS, A SPECIFICATION WHEREIN THE TECHNICAL REQUIREMENTS AND CORRESPONDING METHODS OF TEST ARE BASED UPON THE ULTIMATE USE OF THE COMPOUND FOR ITS INTENDED PURPOSE, AND ITS MANUFACTURE TO MEET THE PERFORMANCE REQUIREMENTS IS A RESPONSIBILITY OF THE CONTRACTOR. THE DISPUTED PH REQUIREMENT AS SET FORTH IN THE SPECIFICATIONS IS EXPRESSED AS A RANGE WITH ESTABLISHED UPPER AND LOWER LIMITS OF VALUES WHICH ARE ESTABLISHED BY MATERIALS WHICH HAVE BEEN FOUND TO BE SATISFACTORY FOR USE. THE FACT THAT YOUR COMPANY CHOSE TO FORMULATE THE COMPOUND PRODUCT AT THE LOWER PH LIMIT WITHOUT ADEQUATE INHIBITION CANNOT BE DEEMED A DEFICIENCY OF THE SPECIFICATION REQUIREMENTS. THE STORAGE STABILITY TEST IS NOT DESIGNED TO PARALLEL ANY ACTION OF THE COMPOUND FLUID ON ITS CONTAINER, BUT TO DETERMINE THE USEFULNESS OF THE PRODUCT AFTER EXPOSURE TO STEEL. IN OTHER WORDS, A PACKAGING PROBLEM MAY BE PRESENTED WHICH MAY WELL BE THE SOLE RESPONSIBILITY OF THE MANUFACTURER UNDER THE CONTRACTS INVOLVED. FURTHER, YOUR REFERENCE TO THE BEHAVIOR OF THE CONTROL FORMULA CONTAINED IN THE SPECIFICATIONS IS NOT PERTINENT SINCE THE SPECIFICATION POINTS OUT THAT THIS FORMULA "SHOULD BE COMPARED TO THE MANUFACTURER'S PRODUCT WHERE SPECIFIED AT THE SPECIFIED DILUTIONS," AND THAT "THE CONTROL FORMULA PRODUCT MAY NOT NECESSARILY MEET THE OTHER REQUIREMENTS OF THIS SPECIFICATION.'

IT IS THE CONTRACTING OFFICER'S POSITION THAT HE CANNOT MAKE AN AWARD TO YOUR COMPANY BASED ON ITS BID FOR SUBITEMS 0002 AND 0006 COVERING CLEANING COMPOUND TO BE SHIPPED TO WESTERN DESTINATIONS FROM THE SAN FRANCISCO PLANT. SINCE REQUALIFICATION OF THE SAN FRANCISCO PRODUCT WOULD INVOLVE A 6-MONTHS STORAGE STABILITY TEST SPECIFIED BY PARAGRAPH 3.16.5 OF MIL-C- 22543D, PROCUREMENT OF THESE SUBITEMS WHICH IS URGENT MAY NOT BE SUSPENDED FOR SUCH PERIOD OF REQUALIFICATION.

THIS OFFICE HAS CONSISTENTLY ADHERED TO THE PROPOSITION THAT WHETHER SPECIFICATIONS ARE ADEQUATE TO MEET THE NEEDS OF THE PROCUREMENT AGENCY IS A QUESTION WHICH IS PRIMARILY WITHIN THE JURISDICTION OF THE AGENCY, AND THAT IN ANY GIVEN PROCUREMENT THIS QUESTION MAY WELL BE SUBJECT TO A DIFFERENCE OF EXPERT TECHNICAL OPINION. WHERE SUCH DIFFERENCES OF OPINION EXIST, OUR OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE AGENCY UNLESS THERE IS CLEAR AND CONVINCING EVIDENCE OF ERROR OR THAT A CONTRACT AWARDED ON THE BASIS OF SUCH SPECIFICATION WOULD, BY UNDULY RESTRICTING COMPETITION OR OTHERWISE, BE IN VIOLATION OF LAW. 17 COMP. GEN. 554.

UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE WITHDRAWAL OF QUALIFICATION OF YOUR SAN FRANCISCO PRODUCT BECAUSE OF ITS DEFICIENCIES WAS A PROPER EXERCISE OF PROCUREMENT RESPONSIBILITY VESTED IN THE AGENCY BY ASPR 1-1110. IN VIEW THEREOF, AND ON THE RECORD, WE WOULD NOT OBJECT TO THE REJECTION OF YOUR BID FOR SUBITEMS 0002 AND 0006 AS NONRESPONSIVE TO THE QUALIFICATION PROVISIONS OF THE INVITATION.