B-172570, JUL 26, 1971, 51 COMP GEN 62

B-172570, JUL 26, 1971, 51 COMP GEN 62

BIDS - GOVERNMENT EQUIPMENT, ETC. - SPECIAL TOOLING - STATUS OF TOOLING THE LOW BID ON FIN ASSEMBLIES THAT INDICATED GOVERNMENT-OWNED SPECIAL TOOLING WOULD BE USED AND INCLUDED PURSUANT TO THE "RESEARCH AND PRODUCTION PROPERTY AND SPECIAL TOOLING" PROVISION OF THE INVITATION FOR BIDS (IFB) A LIST OF TOOLING IDENTIFIED AS TO PART NUMBER, ACQUISITION COST, AND AGE, BUT DID NOT INCLUDE WRITTEN PERMISSION TO USE THE TOOLING, OR INFORMATION AS TO THE ANTICIPATED AMOUNT OF TOOLING TO BE USED AND RENTAL FEE, WAS ERRONEOUSLY EVALUATED AS A NONRESPONSIVE BID AS SPECIAL TOOLING IS NOT DEFINED AS A "FACILITY" IN PARAGRAPH 13 101.8 OF THE ARMED SERVICES PROCUREMENT REGULATION AND THE IFB DID NOT REQUIRE PERMISSION TO USE THE TOOLING, AND SINCE THE OMITTED INFORMATION COULD BE CALCULATED FROM THE BID, THE DEVIATION IS A MINOR ONE THAT MAY BE WAIVED. THEREFORE, IT IS RECOMMENDED THAT THE CONTRACT AWARDED BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THE LOW BID CONSIDERED FOR AWARD.

TO THE SECRETARY OF THE NAVY, JULY 26, 1971:

REFERENCE IS MADE TO LETTER SUP 0232 DATED MAY 6, 1971, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, REPORTING ON THE PROTEST OF METALS ENGINEERING CORPORATION (MECO) UNDER INVITATION FOR BIDS (IFB) NO. N00104-71-B-1449, ISSUED BY THE SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA.

THE SUBJECT IFB WAS ISSUED ON FEBRUARY 17, 1971, TO 120 FIRMS FOR 55,000 EACH FIN ASSEMBLIES, MAU 94/B, FSN 1325-827-4021-F651. THE PURCHASING ACTIVITY REPORTS THAT BIDS WERE OPENED ON MARCH 8, 1971, AND OF THE 15 BIDS RECEIVED, THE LOWEST EVALUATED BID WAS SUBMITTED BY MECO IN THE AMOUNT OF $468,842.99. THE SECOND LOW BID, AS EVALUATED, WAS SUBMITTED BY STRAIGHTLINE MANUFACTURING COMPANY IN THE AMOUNT OF $472,120.55. PAGE 10 OF THE IFB, STANDARD FORM 36, JULY 1966, REQUIRED BIDDERS TO REPRESENT WHETHER OR NOT THEY INTENDED TO USE GOVERNMENT OWNED "RESEARCH AND PRODUCTION PROPERTY AND SPECIAL TOOLING" IN PERFORMING THE WORK BID UPON. THAT PROVISION IS SET OUT BELOW:

EVALUATION FACTOR FOR USE OF GOVERNMENT-OWNED RESEARCH

AND PRODUCTION PROPERTY AND SPECIAL TOOLING

1. IF THE OFFEROR OR ITS ANTICIPATED SUBCONTRACTORS REQUIRE THE USE OF GOVERNMENT-OWNED PRODUCTION AND RESEARCH PROPERTY AND/OR SPECIAL TOOLING, AS DEFINED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) PARAGRAPH 13- 101.9, IN ITS OR ITS SUBCONTRACTORS' POSSESSION, THE OFFEROR SHALL NOT INCLUDE IN ITS OFFER PRICE ANY "RENTAL FEE" OR "USE CHARGE" FOR USE OF SUCH PROPERTY. THE OFFEROR SHALL LIST AND IDENTIFY, IN THE OFFER OR BY SEPARATE ATTACHMENT THERETO, A COMPLETE DESCRIPTION OF EACH SUCH ITEM, IN ACCORDANCE WITH PARAGRAPH 2, BELOW. OFFERS WILL BE EVALUATED BY ADDING TO THE TOTAL AMOUNT OF EACH ITEM REQUIRING USE OF GOVERNMENT PRODUCTION AND RESEARCH PROPERTY, A "RENTAL FEE" AS CALCULATED BY THE CONTRACTING OFFICER IN ACCORDANCE WITH PARAGRAPH 3, BELOW.

2.OFFEROR SHALL PROVIDE THE FOLLOWING DATA:

(I) DESCRIPTION OF EACH ITEM OF GOVERNMENT PROPERTY AND QUANTITY THEREOF REQUIRED;

(II) ACQUISITION COST TO THE GOVERNMENT OF EACH SUCH ITEM;

(III) THE FACILITIES CONTRACT OR OTHER INSTRUMENT UNDER WHICH THE GOVERNMENT FACILITIES ARE HELD, TOGETHER WITH THE WRITTEN PERMISSION OF THE CONTRACTING OFFICER HAVING COGNIZANCE THEREOF AUTHORIZING ITS USE;

(IV) THE AMOUNT OF USE (IN MONTHS) TO BE MADE OF SUCH GOVERNMENT PROPERTY, AND, IF ANY SUCH PROPERTY WILL BE USED CONCURRENTLY IN THE PERFORMANCE OF TWO OR MORE CONTRACTS, THE AMOUNTS OF THE RESPECTIVE USES IN SUFFICIENT DETAIL FOR PRORATING THE RENT BETWEEN THE PROPOSED CONTRACT AND SUCH OTHER WORK IN ACCORDANCE WITH ASPR 13-502.3(B) AND,

(V) THE AMOUNT OF THE "RENTAL FEE," IF SUCH FEE WERE ASSESSED, FOR THE PERIOD FROM DATE OF CONTRACT TO COMPLETION OF DELIVERIES, COMPUTED IN ACCORDANCE WITH PARAGRAPH 3, HEREOF.

MECO REPRESENTED THAT "SPECIAL TOOLING" WOULD BE REQUIRED AND INCLUDED A LIST OF TOOLING IDENTIFIED AS TO PART NUMBER, ACQUISITION COST, AND AGE. HOWEVER, MECO DID NOT FURNISH WITH ITS BID ANY WRITTEN PERMISSION FOR SUCH USE FROM THE CONTRACTING OFFICER HAVING COGNIZANCE OF THE PROPERTY AS REQUIRED BY SUBPARAGRAPHY (III), QUOTED ABOVE. NOR DID MECO, IN THE OPINION OF THE CONTRACTING OFFICER, FURNISH ANY INFORMATION WITH RESPECT TO THE ANTICIPATED AMOUNT OF USE OF THE GOVERNMENT PROPERTY IN ITS POSSESSION, AS REQUIRED BY SUBPARAGRAPH (IV), OR WITH RESPECT TO THE RENTAL FEE TO BE ASSESSED, AS REQUIRED BY SUBPARAGRAPH (V). THE PURCHASING ACTIVITY REPORTS THAT THE FAILURE OF MECO TO FURNISH WITH ITS BID THE DATA REQUIRED BY THESE THREE SUBPARAGRAPHS RENDERED ITS BID NONRESPONSIVE. THEREFORE, THE CONTRACTING OFFICER DETERMINED THAT THE LOW RESPONSIVE BID WAS SUBMITTED BY STRAIGHTLINE MANUFACTURING COMPANY AND AWARD WAS MADE TO THAT FIRM ON APRIL 2, 1971.

MECO CONTENDS THAT IT IS NOT HOLDING ANY "GOVERNMENT FACILITIES" AS DEFINED BY PARAGRAPH 13-101.8 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND THAT THE PROVISIONS OF SUBPARAGRAPH (III), ABOVE, WHICH SPECIFICALLY REFERENCE "GOVERNMENT FACILITIES" ARE BY THEIR OWN TERMS INAPPLICABLE TO THE "SPECIAL TOOLING" WHICH CONSTITUTED THE ONLY GOVERNMENT PROPERTY HELD BY MECO. THEREFORE, MECO CONTENDS THAT IT WAS NOT REQUIRED TO FURNISH WITH ITS BID THE WRITTEN PERMISSION OF THE CONTRACTING OFFICER TO USE THE "SPECIAL TOOLING." ACCORDINGLY, MECO STATES THAT IT SUBMITTED THE LOW RESPONSIVE BID AND SHOULD BE AWARDED THE CONTRACT.

WE AGREE WITH MECO THAT THE IFB DID NOT REQUIRE A BIDDER TO FURNISH WITH ITS BID PERMISSION TO USE GOVERNMENT-OWNED "SPECIAL TOOLING." ASPR 13- 101.8 DEFINES "FACILITIES" AS FOLLOWS:

FACILITIES MEANS INDUSTRIAL PROPERTY (OTHER THAN MATERIAL, SPECIAL TOOLING, MILITARY PROPERTY, AND SPECIAL TEST EQUIPMENT) FOR PRODUCTION, MAINTENANCE, RESEARCH, DEVELOPMENT, OR TEST, INCLUDING REAL PROPERTY AND RIGHTS THEREIN, BUILDINGS, STRUCTURES, IMPROVEMENTS, AND PLANT EQUIPMENT.

ALTHOUGH ASPR 13-101.11 INDICATES THAT "FACILITIES CONTRACTS" OCCASIONALLY COVER TOOLING, AND ASPR 13-101.9 DEFINES GOVERNMENT PRODUCTION AND RESEARCH PROPERTY AS INCLUDING GOVERNMENT-OWNED FACILITIES, GOVERNMENT-OWNED SPECIAL TEST EQUIPMENT, AND SPECIAL TOOLING TO WHICH THE GOVERNMENT HAS TITLE OR THE RIGHT TO ACQUIRE TITLE, WE DO NOT AGREE WITH THE NAVY'S POSITION THAT MECO'S INTERPRETATION IS UNREASONABLE AS NEITHER OF THE LATTER SECTIONS SERVES TO OVERCOME THE EXPLICIT EXCLUSION BY ASPR 13-101.8 OF "SPECIAL TOOLING" FROM THE DEFINITION OF "GOVERNMENT FACILITIES." SUBPARAGRAPH (III) ONLY REQUIRES A BIDDER TO FURNISH WITH ITS BID WRITTEN AUTHORIZATION TO USE "GOVERNMENT FACILITIES." THERE IS NO SIMILAR REQUIREMENT FOR GOVERNMENT PROPERTY OTHER THAN "GOVERNMENT FACILITIES" AND PARTICULARLY NO SUCH REQUIREMENT FOR "SPECIAL TOOLING."

THEREFORE, ALTHOUGH THE NAVY MAY HAVE INTENDED THAT BIDDERS OFFERING TO USE GOVERNMENT-OWNED "SPECIAL TOOLING" FURNISH WITH THEIR BID PERMISSION TO USE THE SPECIAL TOOLING, THE IFB DID NOT IN FACT REQUIRE THIS. ACCORDINGLY, THE BID OF MECO SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE FOR FAILURE TO FURNISH WITH ITS BID PERMISSION TO USE THE GOVERNMENT-OWNED "SPECIAL TOOLING."

WITH RESPECT TO SUBPARAGRAPHS (IV) AND (V) OF THE INVITATION SECTION DEALING WITH THE EVALUATION OF GOVERNMENT-OWNED PROPERTY AND SPECIAL TOOLING, MECO MAINTAINS THAT ITS BID CONTAINS SUFFICIENT INFORMATION WITH RESPECT TO THESE SUBPARAGRAPHS TO PERMIT THE CALCULATION OF THE RENTAL FEE IN ACCORDANCE WITH ASPR 13-404 AND THE INVITATION INSTRUCTIONS. IN THIS REGARD, WE HAVE BEEN INFORMALLY ADVISED BY THE NAVY THAT ASSUMING USE OF THE INVOLVED SPECIAL TOOLING FOR THE 10-MONTH LIFE OF THE CONTRACT AND CALCULATING RENTAL FEE IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED IN PARAGRAPH 3 OF THE EVALUATION SECTION, THE EVALUATED BID OF MECO IS $471,301.49, $819.06 LESS THAN THE EVALUATED BID OF STRAIGHTLINE. INASMUCH AS SUFFICIENT INFORMATION WAS PROVIDED IN THE MECO BID TO PERMIT CALCULATION OF THE RENTAL FEE FOR EVALUATION PURPOSES, ANY FAILURE TO FURNISH INFORMATION IN STRICT ACCORDANCE WITH THE REQUIREMENTS OF SUBPARAGRAPHS (IV) OR (V) MAY BE WAIVED AS MINOR DEVIATIONS. SEE B- 170591, SEPTEMBER 28, 1970. WE THEREFORE CONCLUDE THAT THE LOW RESPONSIVE BID WAS SUBMITTED BY MECO AND THAT THE CONTRACT AWARDED TO STRAIGHTLINE, THE SECOND LOW BIDDER WAS ERRONEOUS.

IN DECIDING WHETHER A CONTRACT AWARDED ERRONEOUSLY BUT IN GOOD FAITH TO OTHER THAN THE LOW RESPONSIVE RESPONSIBLE BIDDER SHOULD BE CANCELED, WE MUST CONSIDER ALL OF THE RELEVANT AND MATERIAL FACTORS SURROUNDING THE AWARD AND BASE OUR DECISION ON THE BEST INTERESTS OF THE UNITED STATES.

WHEN IT WAS DETERMINED THAT THE PROTEST MIGHT REQUIRE ACTION BY OUR OFFICE WHICH WOULD ADVERSELY AFFECT STRAIGHTLINE'S INTERESTS, IN ACCORDANCE WITH OUR BID PROTEST PROCEDURES (4 C.F.R. 20.2), WE FURNISHED STRAIGHTLINE WITH A COPY OF MECO'S PROTEST AS WELL AS THE ADMINISTRATIVE REPORT AND PROVIDED THE COMPANY WITH AN OPPORTUNITY TO PRESENT ITS VIEWS.

IN A LETTER TO OUR OFFICE DATED JUNE 14, 1971, STRAIGHTLINE DECLINED TO SUBMIT ITS VIEWS ON THE PROTEST. HOWEVER, STRAIGHTLINE STATED THAT DELIVERY WAS SCHEDULED TO COMMENCE IN MAY 1971, AND BE COMPLETED IN JANUARY 1972, AND THAT ACCELERATED DELIVERIES WERE AUTHORIZED. STRAIGHTLINE ADVISED THAT TO PRODUCE THE CONTRACT ECONOMICALLY, IT IS NECESSARY TO COMPLETE WHILE THEIR PRESENT PRODUCTION LINE IS SET UP AND ON AN ACCELERATED BASIS AND THAT "ALL OF THE MATERIALS NECESSARY HAVE BEEN PURCHASED AND SOME HAVE BEEN DELIVERED." WE HAVE BEEN INFORMALLY ADVISED BY A REPRESENTATIVE OF THE NAVY THAT NO DELIVERIES HAVE BEEN MADE TO DATE, AND THAT DELIVERIES ARE NOT NOW SCHEDULED TO COMMENCE UNTIL OCTOBER, 1971.

ACCORDINGLY, WE RECOMMEND THAT THE CONTRACT AWARDED TO STRAIGHTLINE BE TERMINATED FOR CONVENIENCE OF THE GOVERNMENT SINCE THE RECORD ESTABLISHES THAT AWARD WAS MADE TO OTHER THAN THE LOW RESPONSIVE BIDDER. CF. 49 COMP. GEN. 809, 815 (1970). WE FURTHER RECOMMEND THAT AWARD OF THE PROCUREMENT BE MADE TO MECO IF ITS LOW BID IS STILL AVAILABLE FOR ACCEPTANCE AND IT IS OTHERWISE ELIGIBLE FOR AWARD UNDER THE INVITATION. IN THIS RESPECT, MECO HAS FURNISHED OUR OFFICE WITH A LETTER DATED JUNE 4, 1971, FROM THE ADMINISTRATIVE CONTRACTING OFFICER, DEFENSE CONTRACT ADMINISTRATION SERVICES REGION, ATLANTA, GEORGIA, WHICH MECO STATES CONSTITUTES AUTHORIZATION TO USE THE MK 81 GOVERNMENT OWNED TOOLING NOW IN ITS POSSESSION.

THE BID OF MECO IS RETURNED AS REQUESTED.