B-162900, APR. 24, 1968

B-162900, APR. 24, 1968

TO EVANS AND PETERSON:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 19, 1967, PROTESTING ON BEHALF OF CASTLE CONCRETE COMPANY THAT TOWER CONSTRUCTION COMPANY HAS NOT BEEN PERFORMING IN ACCORDANCE WITH SPECIFICATIONS IN CONTRACT DABE01-67-C- 2866 ISSUED BY FORT CARSON, COLORADO.

THE CONTRACT AWARDED TO TOWER COVERS THE FURNISHING OF THREE ITEMS OF CRUSHED STONE RAW AGGREGATE FOR USE ON ROADS AND TANK TRAILS AT FORT CARSON, COLORADO. YOU ORIGINALLY PROTESTED TO THE CONTRACTING OFFICER THAT TOWER WAS NONRESPONSIVE TO THE INVITATION FOR BIDS UPON WHICH THE CONTRACT IS BASED IN THAT IT DID NOT FURNISH SAMPLES WITH ITS BID. THE GIST OF THE PROTEST TO OUR OFFICE IS THAT THE PROCUREMENT OFFICIALS AT FORT CARSON HAVE ACCEPTED SUBSTANDARD AND SUBSPECIFICATION MATERIALS FROM TOWER IN THE PERFORMANCE OF THE CONTRACT.

WITH REGARD TO THE INITIAL PROTEST, THE DEPARTMENT OF THE ARMY HAS ADVISED AS FOLLOWS: "THE RECORD FAILS TO SUPPORT THE PROTESTOR'S CONTENTION THAT TOWER'S BID WAS NON-RESPONSIVE. THERE IS NO REQUIREMENT IN THE IFB THAT SAMPLES BE FURNISHED WITH THE BID. PARAGRAPH C., PAGE TPI -4 OF THE SPECIFICATIONS REQUIRES: -THE SOURCE FROM WHICH THE AGGREGATE IS TO BE OBTAINED SHALL BE SELECTED IN ADVANCE OF THE TIME WHEN MATERIALS ARE REQUIRED FOR DELIVERY AT THE SITE OF THE WORK. THE CONTRACTOR SHALL FURNISH TO THE GOVERNMENT A ONE-HUNDRED (100) POUND SAMPLE OF EACH AGGREGATE TO BE FURNISHED UNDER THE CONTRACT.- WHEN READ IN CONTEXT IT BECOMES CLEAR THAT THE REQUIREMENT OF A SAMPLE REFERS TO A SAMPLE FROM THE SOURCE, WHICH IS ONLY REQUIRED TO BE SELECTED -IN ADVANCE OF THE TIME WHEN MATERIALS ARE REQUIRED FOR DELIVERY AT THE SITE OF THE WORK.- THUS, THERE IS NO REQUIREMENT THAT SUCH SAMPLE BE FURNISHED WITH THE BID. THIS INTERPRETATION IS SUPPORTED FURTHER BY THE USE OF THE TERM -CONTRACTOR RATHER THAN -BIDDER- IN THE REQUIREMENT OF A SAMPLE, THUS CONTEMPLATING A TIME SUBSEQUENT TO AWARD AND THE EXISTENCE OF A CONTRACT.'

IN VIEW OF THE FOREGOING, WE AGREE THAT THE BID OF TOWER WAS OTHERWISE RESPONSIVE INSOFAR AS THE SAMPLE-FURNISHING REQUIREMENT WAS CONCERNED. WITH REGARD TO THE ALLEGATION THAT THE GOVERNMENT ACCEPTED SUBSTANDARD AND SUBSPECIFICATION MATERIALS UNDER THE CONTRACT, IT IS ADMINISTRATIVELY REPORTED:

"CONFERENCE WITH STAFF JUDGE ADVOCATE AND POST ENGINEER REVEALED THE FACT THAT WHILE TWO ITEMS (NO. 2 AND NO. 3) BEING PRODUCED BY TOWER WERE SUB- SPECIFICATION, THEY WERE NOT SUB-STANDARD AND WERE VERY WELL FULFILLING THE NEEDS OF THE POST. IN ACCORDANCE WITH PROVISIONS OF ASPR CHANGE ORDER WAS ISSUED 22 AUGUST 1967, AUTHORIZING CONTRACTOR TO DELIVER ITEMS 2 AND 3 AS BEING PRODUCED, PRICE OF WHICH WOULD BE REDUCED ACCORDING TO FORMULA PROVIDED BY A COMPETENT, IMPARTIAL PARTY. THE STAFF CONSTRUCTION ENGINEER OF THE COLORADO STATE HIGHWAY DEPARTMENT WAS CONTACTED FOR ASSISTANCE IN DETERMINING FAIR PRICE REDUCTION. SUBSEQUENT NEGOTIATION RESULTED IN A TON PRICE REDUCTION OF .095 FOR THE TOTAL QUANTITIES OF THESE TWO ITEMS DELIVERED.'

THE FOREGOING CONCEDES THAT TOWER WAS FURNISHING SUBSPECIFICATION MATERIAL. HOWEVER, WITH REGARD TO THE USE OF SUCH SUBSPECIFICATION MATERIAL, THE RECORD STATES FURTHER THAT JUSTIFICATION FOR THE DETERMINATION TO PROCEED WITH THE CONTRACT WAS BASED ON CONSULTATION WITH THE POST ENGINEER AND CORPS OF ENGINEERS, OMAHA DISTRICT, WHO FURNISHED INFORMATION THAT THE PRODUCT, WHILE SUBSPECIFICATION, WAS NOT SUBSTANDARD.

IN THIS RESPECT, PARAGRAPH 14-406 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDES FOR THE ACCEPTANCE OF NONCONFORMING OR SUBSPECIFICATION MATERIALS FOR REASONS OF ECONOMY OR URGENCY IF SUCH MATERIALS ARE USABLE FOR THE PURPOSE INTENDED. ASPR 14-406 (B) PROVIDES FOR THE MODIFICATION OF THE CONTRACT IN SUCH CASE BY AN EQUITABLE PRICE REDUCTION OR OTHER CONSIDERATION. THE NECESSITY FOR CONTINUITY OF OPERATION AT FORT CARSON IS CITED BY THE AGENCY AS THE URGENT REASON FOR ACCEPTING THE SUBSPECIFICATION MATERIAL. THE CONTRACTING OFFICER MODIFIED THE CONTRACT TO PROVIDE AN EQUITABLE PRICE REDUCTION AS AUTHORIZED BY ASPR 14-406 (B). THE PRICE REDUCTION WAS ACCOMPLISHED BY A CONTRACT MODIFICATION DATED NOVEMBER 28, 1967. THE REASONABLENESS OF THE REDUCTION IS SUPPORTED BY THE FACT THAT IT WAS BASED ON THE EXPERIENCE OF THE COLORADO STATE HIGHWAY DEPARTMENT, A COMPETENT AND IMPARTIAL PARTY.

IN LIGHT OF THE CIRCUMSTANCES SET FORTH ABOVE, WE CONCLUDE THAT THERE IS NO LEGAL BASIS FOR OUR OFFICE TO OBJECT TO THE ACTIONS TAKEN BY THE CONTRACTING OFFICER.