B-163160, MAY 29, 1968

B-163160, MAY 29, 1968

CORRESPONDENCE PROTESTING AGAINST AN AWARD BY THE DEPARTMENT OF THE NAVY OF A CONTRACT FOR EMERGENCY OXY-ACETYLENE CUTTING OUTFITS TO ANOTHER BIDDER UNDER INVITATION FOR BIDS (IFB) NO. N00104-68-B-0026, ISSUED AUGUST 24, 1967, BY THE UNITED STATES NAVY SHIPS PARTS CONTROL CENTER (SPCC), MECHANICSBURG, PENNSYLVANIA. YOU STATE THAT YOU WERE THE LOWEST BIDDER; THAT YOU OFFERED AN UPGRADED VERSION OF THE PROCUREMENT ITEM WHICH YOU HAVE SUPPLIED TO NAVAL ACTIVITIES BOTH PRIOR AND SUBSEQUENT TO THE PROCUREMENT IN QUESTION; AND THAT YOU THEREFORE DO NOT UNDERSTAND WHY THE NAVY WOULD REJECT THE SAME ITEMS AND EXPEND OVER $100,000 FOR AN AWARD TO A HIGHER BIDDER.

THE IFB, WHICH RESTRICTED THE PROCUREMENT TO SMALL BUSINESS CONCERNS, REQUESTED BIDS TO FURNISH A BASIC QUANTITY OF 420 UNITS AND AN ADDITIONAL QUANTITY OF 325 UNITS, WHICH THE GOVERNMENT RESERVED THE RIGHT TO ORDER IN QUANTITIES OF NOT LESS THAN 65 UNITS. THE PURCHASE DESCRIPTION INCLUDED THE FOLLOWING LANGUAGE:

"TORCH OUTFIT, CUTTING, IS TO BE DESIGNED AND FURNISHED IN ACCORDANCE WITH THE REQUIREMENTS CONTAINED IN BUREAU OF SHIPS DRAWINGS S9200-606943A, S9200-606944B, S9200-606945B (EXCEPT FEDERAL STOCK NUMBER IN LIEU OF U.S. NAVY STANDARD STOCK NUMBER 41-C-3350) AND S9200 606946B.

"NOTE:

(1) ACETYLENE AND OXYGEN CYLINDERS ARE NOT REQUIRED.

(2) DELETE STATEMENT -THIS DRAWING IS FOR GUIDANCE. DEVIATIONS ARE PERMITTED IF APPEARANCE, FUNCTION AND STRENGTH ARE NOT IMPAIRED.- FROM DRAWINGS S9200-606943A, S9200-606944B, S9200-606945B AND S9200 606946B.'

BIDS WERE OPENED ON SEPTEMBER 14, 1967, AS SCHEDULED. OF THE FOUR BIDS RECEIVED, YOUR BID QUOTING $243,80 PER UNIT FOR THE BASIC QUANTITY AND $255.00 PER UNIT FOR THE MINIMUM REORDER QUANTITY OF 65 UNITS WAS LOWEST. PAGE 3 OF YOUR BID CARRIED THE FOLLOWING PERTINENT NOTATION:

"QUOTING ON NATIONAL TYPE 41C PAK KUT UNIT WITH SPARE CYLINDER CASE WITH SAME DEVIATIONS AS FURNISHED ON CONTRACTS:

N160-29944

N160-31887

N160-29656"

THE SECOND LOW BIDDER LIKEWISE OFFERED YOUR UNIT WITH THE SAME DEVIATIONS AS YOU SPECIFIED. THE THIRD BIDDER, WELDERS SERVICE, INC., TOOK NO EXCEPTION TO THE SPECIFICATIONS AND WAS OTHERWISE FULLY RESPONSIVE TO THE TERMS AND CONDITIONS OF THE IFB. ON THE BASIS THAT THE PORTION OF THE PURCHASE DESCRIPTION QUOTED ABOVE FROM THE IFB PROHIBITED DEVIATIONS FROM THE DRAWINGS CITED THEREIN, BOTH YOUR BID AND THE GASPRO, LIMITED, BID, WERE DETERMINED TO BE NONRESPONSIVE AND WERE REJECTED.

IN A LETTER DATED SEPTEMBER 20, 1967, YOU CALLED THE ATTENTION OF THE CONTRACTING OFFICER TO THE FACT THAT IN PREVIOUS PROCUREMENTS OF THE TORCH OUTFIT DEVIATIONS FROM THE DRAWINGS HAD BEEN PERMITTED, AND YOU THEREFORE QUESTIONED THE RESTRICTION IN THE IFB AGAINST SUCH DEVIATIONS, WHICH YOU STATED WERE SLIGHT. THE PROCURING ACTIVITY, IN A REPLY BY TELEPHONE ON SEPTEMBER 28, 1967, INFORMED YOU OF THE BASIS FOR THE REJECTION OF YOUR BID; STATED THAT WHILE SPCC WAS NOT SATISFIED WITH THE EXISTING SPECIFICATION, ANY CHANGES MUST NECESSARILY EMANATE FROM THE OFFICE OF THE SECRETARY OF THE NAVY (NAVSEC); AND EXTENDED TO YOU AN INVITATION, WHICH YOU DECLINED, TO SUBMIT A TORCH OUTFIT TO EITHER SPCC OR NAVSEC FOR A COMPLETE EVALUATION. SUBSEQUENTLY, TWO MEMBERS OF CONGRESS MADE INQUIRY OF THE DEPARTMENT OF THE NAVY CONCERNING THE REJECTION OF YOUR BID, AND AFTER THE DEPARTMENT HAD ADVISED THE CONGRESSMEN BY TELEPHONE OF THE BASIS OF THE REJECTION, AWARD WAS MADE TO WELDERS SERVICE, INC.

YOU CONTEND THAT THE ORIGINAL NAVY SPECIFICATIONS, WHICH ARE MORE THAN 27 YEARS OLD, ARE OBSOLETE AS TO MUCH OF THE MATERIAL AND DESIGN AND THAT ITEMS MANUFACTURED TO SUCH SPECIFICATIONS CANNOT BE PURCHASED FROM COMMERCIAL MANUFACTURERS WHO FORMERLY SUPPLIED THE ORIGINAL ITEM. FINALLY, YOU HAVE FURNISHED LISTS OF PURCHASE ORDERS ISSUED BY VARIOUS NAVAL ACTIVITIES; INCLUDING THE NAVAL SUPPLY CENTER,OAKLAND, CALIFORNIA, THE PHILADELPHIA NAVAL SHIPYARD, PHILADELPHIA, PENNSYLVANIA, AND SPCC, SUBSEQUENT TO THE ADVERTISED PROCUREMENT, ORDERING YOUR TORCH OUTFIT WITH THE SAME DEVIATIONS FROM THE GOVERNMENT DRAWINGS WHICH YOU HAVE MADE FOR SOME YEARS AT UNIT PRICES SOMEWHAT LOWER THAN THE PRICE AT WHICH THE ADVERTISED CONTRACT WAS AWARDED TO WELDERS SERVICE, INC.

THE RECORD MADE AVAILABLE TO OUR OFFICE BY THE DEPARTMENT OF THE NAVY INDICATES THAT PRIOR TO 1964 THE NAVY YARDS AND DOCKS SUPPLY OFFICE, PORT HUENEME, CALIFORNIA, PURCHASED EMERGENCY OXY-ACETYLENE CUTTING OUTFITS IN ACCORDANCE WITH BUREAU OF SHIPS DRAWING NO. S9200 606943A (AND DRAWINGS REFERENCED THEREIN), WHICH CONTAINED THE NOTATION,"THIS DRAWING IS FOR GUIDANCE. DEVIATIONS ARE PERMITTED IF APPEARANCE, FUNCTION, AND STRENGTH ARE NOT IMPAIRED.' SINCE 1965, SPCC HAS MADE SEVERAL STOCK PROCUREMENTS OF THE ITEM UNDER THE SAME DRAWING, WITH THE NOTATION PERMITTING DEVIATIONS DELETED, AND WE ARE ADVISED THAT YOUR BIDS ON TWO OF THOSE PROCUREMENTS WERE REJECTED ON THE SAME BASIS AS IN THE INSTANT CASE. SEVERAL INSTANCES, HOWEVER,"SPOT BUYS" UNDER SMALL PURCHASE PROCEDURES TO MEET CERTAIN LOCAL REQUIREMENTS HAVE BEEN FILLED BY PROCUREMENT OF THE ITEM WITH DEVIATIONS AS PERMITTED PRIOR TO 1964.

WITH REGARD TO THE IFB REQUIREMENTS IN THIS PROCUREMENT AND THE RESPONSIVENESS OF YOUR BID, SPCC MAKES THE FOLLOWING PERTINENT STATEMENTS:

"3. WITH RESPECT TO THE SIX POINTS RAISED IN THE LETTER OF 21 DECEMBER 1967 BY NATIONAL WELDING, THE FOLLOWING INFORMATION IS SUPPLIED:

"A. THE CURRENT SPECIFICATIONS ARE CONSIDERED TO BE CURRENT AND VALID AND REPRESENT AN ITEM REQUIRED TO SATISFY THE NAVY'S REQUIREMENTS. IF THE NEED OCCURS TO REVISE THE SPECIFICATIONS, THIS IS A RESPONSIBILITY OF THE NAVAL SHIPS SYSTEMS COMMAND AND NOT THE SHIPS PARTS CONTROL CENTER.

FURTHER, BASED ON DATA AVAILABLE TO THE SHIPS PARTS CONTROL CENTER, (ENCLOSURE (4) (, THE EQUIPMENT OFFERED BY NATIONAL WELDING DOES NOT CONFORM TO THE CURRENT PROCUREMENT SPECIFICATIONS IN THE FOLLOWING AREAS:

"PROCUREMENT SPECIFICATION NATIONAL WELDING PRODUCT

(-*- INDICATES SAFETY HAZARD)

CRADLE BACK PLATE - STEEL NONE

STITCHING THREAD - COTTON NYLON *

TOOL KIT - ATTACHED NONE

STORAGE CASE - STEEL, LIGHTWEIGHT METAL, SQUARE

ROUNDED CORNERS CORNERS *

SPARE TIP POCKET - ATTACHED NONE

SHOULDER STRAPS - PADDED NOT PADDED

ACETYLENE REGULATION - PRESET PRESET TO 10 PSI

TO 5 PSI

ENCLOSURE - FRONT, SIDES AND NONE *

REAR, CANVAS

CYLINDER SUPPORT - METAL BASE PLATE

BACK PLATE AND CANVAS

POCKET

ITEMS NOT POSSIBLE TO DETERMINE CONFORMANCE FROM DATA SUBMITTED:

MANIFOLD - BRASS FORGING

OXYGEN HOSE - MIL-H-1142

ACETYLENE HOSE - MIL-H-1142

GLOVES - TO KK-G-486, TYPE II

GOGGLES - TO GGG-G-513, TYPE II, CLASS B

GOGGLE FILTER LENSES - TO GGG-G-513, TYPE II, SHADE 3

GOGGLE COVER LENSES - TO GGG-G-513, TYPE III

OXYGEN CYLINDERS - TO MIL-C-16638, TYPE I, SIZE C,

WITH VALVE TO MIL-V-2 AND MIL-V-2/39

ACETYLENE CYLINDERS - TO MIL-C-3701, WITH VALVE TO

MIL-V2 AND MIL-V-2/3

INSTRUCTION MANUALS - 2 REQUIRED W/RAPID TYPE INSTRUCTION CHART

PRODUCED IN NONDESTRUCTIVE TYPE PLASTIC

OXYGEN REGULATOR - TO MIL-R-19180, TYPE II, CLASS OPZ

ACETYLENE REGULATOR - TO MIL-R-19180, TYPE I, CLASS API

SNAP FASTENERS, BRONZE (EXPOSED TO SALT WATER CONDITIONS)

SIZE OF STRAPS, TENSION SLIDES, BUCKLES AND CLIPS

WEBBING - TO MIL-W-530, TYPE I AND III

STORAGE CABINET, METAL THICKNESS

"* * * THE BID SUBMITTED BY NATIONAL WELDING IN RESPONSE TO IFB N00104-68 -B-0026 SPECIFICALLY STATES THAT THEY ARE BIDDING ON AN ITEM NOT IN CONFORMANCE WITH THE PROCUREMENT SPECIFICATIONS AND -WITH SAME DEVIATIONS AS FURNISHED ON CONTRACTS N160-29944, N160-31887 AND N16029656.- IN VIEW OF THE FOREGOING, IT IS THE CONTRACTING OFFICER'S DECISION THAT THE BID OF NATIONAL WELDING IS NONRESPONSIVE AND MUST BE REJECTED.'

CONCERNING THE PURCHASE ORDERS WHICH SPCC ISSUED TO YOU SUBSEQUENT TO THE IFB AND UNDER WHICH YOU STATE YOU SUPPLIED YOUR TORCH OUTFIT WITH THE CUSTOMARY DEVIATIONS, SPCC REPORTS THAT THE QUOTATIONS WERE OBTAINED FROM YOU BY TELEPHONE IN ALL BUT ONE INSTANCE; THAT YOU STATED YOU WERE OFFERING YOUR ITEM 41CG, WHICH WOULD CONFORM IN ALL RESPECTS TO THE SPECIFICATIONS AND THE REFERENCED DRAWINGS; AND THAT THE ONLY DEVIATION WHICH WAS REQUESTED BY YOU AND APPROVED BY SPCC WAS THE FURNISHING OF SPARE CYLINDERS IN ADDITION TO THE BASIC ITEM. FURTHER, THE RECORD INDICATES THAT NO PRESHIPMENT INSPECTION WAS MADE BY THE GOVERNMENT OF THE ITEMS SO REQUISITIONED SINCE THE ORDERS WERE OF THE "FAST-PAY" TYPE. ADDITION, THE DEPARTMENT HAS STRESSED IN A LETTER DATED NOVEMBER 20, 1967, ADDRESSED TO A MEMBER OF CONGRESS, THAT NO STOCK PURCHASES OF THE TORCH OUTFIT HAVE BEEN MADE FROM YOU SINCE DEVIATIONS HAVE NOT BEEN PERMITTED.

AS TO PURCHASES WHICH WERE MADE BY THE SAN FRANCISCO BAY NAVAL SHIPYARD AND THE NAVAL SUPPLY CENTER, LONG BEACH, CALIFORNIA, IT IS REPORTED THAT THE PURCHASE ORDERS SPECIFIED YOUR MODEL 41-C PAK-KUT AND DID NOT CITE THE BUREAU OF SHIPS DRAWINGS. SIMILARLY, THE PURCHASE ORDER ISSUED BY THE OAKLAND NAVAL SUPPLY CENTER ON NOVEMBER 2, 1967, IN RESPONSE TO AN IMMEDIATE REQUIREMENT FOR A MILITARY SEA TRANSPORTATION SERVICE (MSTS) VESSEL, CITED ONLY YOUR MODEL 41C PAK KUT UNITS, THEREBY INDICATING THAT THE SPECIFICATIONS FOR THE STOCK ITEM WERE NOT CONSIDERED NECESSARY FOR THIS PARTICULAR REQUIREMENT.

WITH REGARD TO THE PURCHASES WHICH WERE MADE FROM YOU BY THE PHILADELPHIA NAVAL SHIPYARD, THE PURCHASE ORDER CITES TYPE NO. 41C GOVT. AND THE BUREAU OF SHIPS DRAWINGS WITH NO NOTATION AS TO DEVIATIONS. FURTHER, THE DEPARTMENT REPORTS THAT THE PHILADELPHIA NAVAL SHIPYARD HAS FOUND THAT THE UNITS SUPPLIED BY YOU MEET THEIR REQUIREMENTS AND HAVE NO FEATURES WHICH ARE CONSIDERED BY THAT INSTALLATION TO BE SAFETY HAZARDS.

THE DEPARTMENT FURTHER REPORTS THAT IN VIEW OF THE DIFFERENCE OF OPINION BETWEEN THE PHILADELPHIA NAVAL SHIPYARD AND SPCC AS TO THE ACCEPTABILITY OF YOUR UNIT, THE NAVAL SHIP SYSTEMS COMMAND HAS BEEN REQUESTED TO REVIEW THE REQUIREMENTS OF BUREAU OF SHIPS DRAWINGS NO. S920-606943A (AND DRAWINGS REFERENCED THEREIN) FOR THE PURPOSE OF DETERMINING WHAT DEVIATIONS FROM THAT DRAWING ARE ACCEPTABLE AND WHETHER THE DRAWINGS SHOULD BE REVISED.

THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF THE GOVERNMENT AND FOR DETERMINING FACTUALLY WHETHER ARTICLES OFFERED BY BIDDERS MEET THE SPECIFICATIONS IS PRIMARILY THAT OF THE CONTRACTING AGENCIES. WHILE OUR OFFICE WILL DETERMINE WHETHER SPECIFICATIONS AS WRITTEN ARE UNDULY RESTRICTIVE OF COMPETITION, THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR SUPPLYING THE GOVERNMENT'S NEEDS IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. FURTHER, THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED, NOR IS THE GOVERNMENT TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT, IN THE JUDGMENT OF THE CONTRACTING AGENCY, REASONABLY MEET THE AGENCY'S NEED. 36 COMP. GEN. 251, 252, AND DECISIONS THEREIN CITED.

CONSISTENT WITH SUCH PRINCIPLES, 10 U.S.C. 2305 (C) PROVIDES THAT AWARDS IN ADVERTISED PROCUREMENTS SHALL BE MADE TO THE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED, EXCEPT THAT ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST. FURTHER, ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2 (B) REQUIRES THE REJECTION OF ANY BID WHICH DOES NOT CONFORM TO THE SPECIFICATIONS CONTAINED OR REFERENCED IN THE INVITATION FOR BIDS UNLESS THE INVITATION AUTHORIZES THE SUBMISSION OF ALTERNATE BIDS AND THE SUPPLIES OFFERED AS ALTERNATES MEET THE REQUIREMENTS SPECIFIED IN THE INVITATION. WHILE ASPR 2-405 PERMITS WAIVER OF MINOR INFORMALITIES OR IRREGULARITIES IN BIDS, SUCH DEVIATIONS ARE LIMITED TO MATTERS OF FORM OR IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS HAVING NO EFFECT, OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT, ON PRICE AND NO EFFECT ON QUALITY, QUANTITY, OR DELIVERY OF THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED AND THE CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF, OR BE OTHERWISE PREJUDICIAL TO, BIDDERS.

THE NOTATION QUOTED ABOVE FROM THE PURCHASE DESCRIPTION IN THE IFB PLACED BIDDERS ON NOTICE THAT DEVIATIONS PREVIOUSLY ALLOWED FROM THE APPLICABLE BUREAU OF SHIPS DRAWINGS WOULD NOT BE PERMITTED IN THIS PARTICULAR PROCUREMENT, AND THE INFORMATION FURNISHED INDICATES THAT YOU HAD PREVIOUSLY BEEN MADE AWARE OF THE CHANGES. ACCORDINGLY, AND SINCE THE ITEM WHICH YOU AND THE SECOND LOW BIDDER OFFERED ADMITTEDLY DEVIATED FROM THE SPECIFICATIONS AND SOME OF THE DEVIATIONS WERE CONSIDERED BY THE SPCC TO CONSTITUTE SAFETY HAZARDS AND THEREFORE WERE NOT SUBJECT TO WAIVER UNDER ASPR 2-405, IT IS APPARENT THAT THE BIDS WERE NOT RESPONSIVE TO THE IFB WITHIN THE MEANING OF THE PROCUREMENT STATUTE AND REGULATIONS. IN THESE CIRCUMSTANCES, NOTWITHSTANDING YOUR BID WAS APPROXIMATELY 50 PERCENT LOWER IN PRICE THAN THE RESPONSIVE BID WHICH SPCC ACCEPTED, WE ARE UNABLE TO CONCLUDE THAT THE REJECTION OF YOUR BID WAS IMPROPER.

CONCERNING THE FACT THAT SPCC MADE SEPARATE PURCHASES OF THE ITEM FROM YOU WITH THE DEVIATIONS IN QUESTION, IN THE LIGHT OF SPCC'S STATEMENT THAT IT WAS NOT AWARE OF THE DEVIATIONS AND OF THE FACT THAT ABSENT PRESHIPMENT INSPECTIONS THERE WAS NO WAY OF DETECTING THE DEVIATIONS UNTIL AFTER DELIVERY, A CONCLUSION THAT SPCC'S PROCUREMENT PRACTICES ARE INCONSISTENT DOES NOT APPEAR TO BE WARRANTED. AS TO THE SIGNIFICANCE OF THE SIMILAR PURCHASES MADE FROM YOU BY OTHER NAVAL ACTIVITIES, IT IS TO BE BORNE IN MIND THAT EACH SUCH ACTIVITY HAD THE RIGHT TO DETERMINE ITS OWN NEEDS FOR THESE SMALL PURCHASES AND THERE IS NO INDICATION THAT ANY OF THE PURCHASE ORDERS PROHIBITED THE DEVIATIONS IN QUESTION OR THAT ANY DETERMINATION WAS MADE THAT THE ITEMS WHICH YOU SUPPLIED DID NOT MEET THE NEEDS OF THE ORDERING ACTIVITIES AS SET FORTH IN THE PURCHASE DOCUMENTS. IN SUCH CIRCUMSTANCES, WE SEE NO BASIS ON WHICH WE CAN CONSIDER SUCH LIMITED PURCHASES AS ESTABLISHING THAT THE ADVERTISED SPCC STOCK PROCUREMENT WHICH SPECIFICALLY PRECLUDED DEVIATIONS FROM THE APPLICABLE GOVERNMENT DRAWINGS WAS UNDULY RESTRICTIVE OR IMPROPER.

FOR THE REASONS STATED, YOUR PROTEST AGAINST THE AWARD WHICH WAS MADE IN THIS PARTICULAR PROCUREMENT IS DENIED. HOWEVER, THE FACT THAT THE DEPARTMENT OF THE NAVY HAS INITIATED A REVIEW OF ITS REQUIREMENTS, IN VIEW OF THE DIVERGENT OPINIONS OF SPCC AND THE PHILADELPHIA NAVAL SHIPYARD REGARDING THE ACCEPTABILITY OF EQUIPMENT, INDICATES THAT YOU COMPLAINTS REGARDING THE ALLEGED UNNECESSARY RESTRICTIVENESS OF THE SPCC REQUIREMENTS HAVE NOT BEEN DISREGARDED.