B-174723, FEB 18, 1972

B-174723, FEB 18, 1972

CONTRACTS - CLAIM FOR DAMAGES - IMPROPER PROCUREMENT PROCEDURES - ORAL SOLICITATION DECISION DENYING CLAIM OF S. STERLING COMPANY, DIVISION OF COMTEL, FOR THE EQUIVALENT OF THE CONTRACT PRICE PAID BY THE NAVY TO TIME/DATA CORPORATION INCIDENT TO ALLEGED IMPROPER PROCUREMENT PROCEDURES IN CONNECTION WITH AN AWARD FOR CERTAIN COMPUTER EQUIPMENT. AN AWARD MADE PURSUANT TO AN ORAL SOLICITATION CAN ONLY BE QUESTIONED IF THE OFFERORS WERE NOT GIVEN AN EQUAL OPPORTUNITY TO COMPETE OR IF THE AWARD WAS NOT MADE IN THE BEST INTERESTS OF THE GOVERNMENT. B 173597, DECEMBER 1, 1971. IN THE INSTANT CASE, THE AWARD WAS MADE AT A REASONABLE PRICE AND IN THE BEST INTERESTS OF THE GOVERNMENT. FURTHER, THE EVIDENCE FAILS TO INDICATE THAT CLAIMANT WAS MISLED AS TO THE NATURE OF THE PROCUREMENT. ACCORDINGLY, THE CLAIM MUST BE DENIED.

TO COMTEL CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 22, 1971, WHICH HAS BEEN FORWARDED TO OUR OFFICE CONCERNING YOUR CLAIM AGAINST THE GOVERNMENT ARISING OUT OF THE PROCEDURES USED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, OAKLAND, CALIFORNIA, IN AWARDING CONTRACT NO. N66314-71-C-0189 TO ANOTHER CONCERN FOR CERTAIN COMPUTER EQUIPMENT.

THE FOLLOWING BACKGROUND INFORMATION HAS BEEN FURNISHED BY THE CONTRACTING OFFICER:

"1. UNDER REQUISITION NUMBER *** AS AMENDED BY SPEED-LETTER *** OF 9 JUNE 1970 *** THE NAVY UNDERWATER SOUND LABORATORY (NUSL), NEW LONDON, CONNECTICUT, REQUESTED THE PURCHASE OF ONE TIME/DATA ANALYSIS SYSTEM MODIFIED TO INCLUDE A DOUBLE PRECISION OUTPUT IN THE AUTO AND CROSS SPECTRAL MODES, AND A TIME/DATA MODEL PC 102 COUPLER AND CONVERTER. THE REQUISITION DISCLOSED THAT AN ANALYSIS SYSTEM WAS LOCATED AT THE LABORATORY UNDER RENTAL CONTRACT N00140-70-C-0052 AND REQUESTED SOLE SOURCE PROCUREMENT FROM S. STERLING COMPANY, DIVISION OF COMTEL CORPORATION *** .

"2. THE PROCUREMENT WAS NEGOTIATED PURSUANT TO ASPR 3-211.2(III) *** . NEGOTIATION BY TELEPHONE WAS AUTHORIZED *** . A COPY OF CONTRACT N00140-70 -C-0052 AWARDED BY NAVAL REGIONAL PROCUREMENT OFFICE, BROOKLYN *** RECEIVED FROM THE REQUISITIONING ACTIVITY, DISCLOSED THAT THE LEASE AGREEMENT DID NOT CONTAIN AN OPTION TO PURCHASE.

"3. TELEPHONE NEGOTIATIONS WERE COMMENCED ON 5 AUGUST 1970 WITH S. STERLING COMPANY, DIVISION OF COMTEL, AND TIME/DATA CORPORATION, THE MANUFACTURER OF THE EQUIPMENT *** WITH A CLOSING DATE OF 10 AUGUST 1970 AT 2:00 PM. *** USED EQUIPMENT WAS SOLICITED FROM BOTH OFFERORS. UPON CLOSING, S. STERLING COMPANY DIVISION'S OFFER WAS IN THE AMOUNT OF $44,287.00, AND TIME/DATA CORPORATION OFFER WAS $34,800.00. S. STERLING COMPANY DIVISION CONFIRMED ITS OFFER BY LETTER DATE 6 AUGUST 1970 *** .

"4. FURTHER NEGOTIATIONS WERE CONDUCTED, WITH A NEW CLOSING DATE SET AT 14 AUGUST 1970 AT 2:00 PM *** . S. STERLING COMPANY DIVISION REDUCED ITS PRICE TO $42,114.00. THIS OFFER WAS CONFIRMED BY LETTER DATED 14 AUGUST 1970 *** . TIME/DATA CORPORATION DID NOT REDUCE ITS PRICE. AWARD WAS MADE TO TIME/DATA CORPORATION, LOW OFFEROR, AT $34,800.00 ON 1 SEPTEMBER 1970 *** . S. STERLING COMPANY DIVISION WAS SO INFORMED BY LETTER DATED 1 SEPTEMBER 1970 *** ."

THE NEGOTIATING AUTHORITY FOR THIS PROCUREMENT WAS 10 U.S.C. 2304(A)(11) WHICH PROVIDES FOR AN EXCEPTION TO THE ADVERTISING REQUIREMENTS WHERE THE CONTRACT IS FOR EXPERIMENTAL, DEVELOPMENTAL AND RESEARCH WORK.

YOU ASSERT THAT NAVY ASKED YOU TO QUOTE A PRICE ON YOUR COMPUTER EQUIPMENT WHICH WAS UNDER LEASE TO NUSL AND IN RESPONSE TO THIS REQUEST YOU OFFERED THE EQUIPMENT FOR SOME $42,000. IT WAS NOT UNTIL LATER THAT YOU FOUND OUT THAT NAVY WAS SOLICITING COMPETITIVE OFFERS FOR "USED" COMPUTER EQUIPMENT. YOU ASSERT THAT YOU HAVE "USED" EQUIPMENT IN STOCK WHICH YOU COULD HAVE OFFERED TO NAVY IF YOU HAD BEEN ADVISED AS TO EXACTLY WHAT NAVY WANTED. FOR THESE REASONS YOU CONTEND THAT YOU ARE ENTITLED TO $34,800, THE CONTRACT PRICE PAID BY THE NAVY FOR THE EQUIPMENT PURCHASED FROM TIME/DATA. YOUR LETTER INDICATES YOU WOULD BE WILLING TO SETTLE THE CLAIM IF NAVY AGREED TO PURCHASE THE EQUIPMENT INVOLVED IN THIS MATTER FOR $25,000.

WE WILL CONSIDER THIS MATTER FROM TWO ASPECTS - FIRST, WHETHER THERE IS ANY BASIS TO QUESTION THE VALIDITY OF THE AWARD TO TIME/DATA AND SECOND, WHETHER THE FACTS PRESENTED CONSTITUTE A BASIS FOR PAYING YOUR CLAIM.

AN AWARD MADE PURSUANT TO AN ORAL SOLICITATION CANNOT BE QUESTIONED UNLESS THERE IS EVIDENCE THAT OFFERORS WERE NOT GIVEN AN EQUAL OPPORTUNITY TO COMPETE OR THAT THE AWARD WAS OTHERWISE NOT IN THE BEST INTEREST OF THE GOVERNMENT. SEE 45 COMP. GEN. 374 (1966); B-173597, DECEMBER 1, 1971.

AN AFFIDAVIT FROM THE NAVY PROCUREMENT AGENT STATES THAT BOTH YOU AND THE OTHER PROSPECTIVE OFFEROR WERE GIVEN THE RFP NUMBER; THE CLOSING DATE FOR RECEIPT OF OFFERS AND THE INFORMATION THAT THE GOVERNMENT DESIRED TO PURCHASE USED EQUIPMENT. THE ADMINISTRATIVE RECORD FURTHER INDICATES THAT THE EQUIPMENT OFFERED BY TIME/DATA CORPORATION FOR $34,800 WAS MANUFACTURED APPROXIMATELY ONE YEAR AGO, HAD AN ORIGINAL PRICE OF $72,895 AND HAD BEEN ON LEASE FOR ABOUT EIGHT MONTHS, WITH AN ESTIMATED LIFE OF 10 YEARS. WITH REGARD TO THE LEASE EQUIPMENT WHICH YOU OFFERED TO SELL TO THE NAVY FOR $42,114, WE UNDERSTAND THAT THIS EQUIPMENT LISTED NEW FOR $68,875 AND WAS EQUIVALENT TO THE EQUIPMENT OFFERED BY TIME/DATA IN TERMS OF AGE, LENGTH OF USE AND ESTIMATED LIFE. ALTHOUGH YOU OFFERED A 90-DAY WARRANTY ON PARTS AND LABOR, IT WAS CONSIDERED BY THE NAVY THAT THIS SHOULD BE VALUED AT $600 AND DID NOT OVERCOME THE LOWER PRICE OF $34,800 OFFERED BY TIME/DATA CORPORATION WITHOUT ANY WARRANTY.

BASED ON THE RECORD IT APPEARS TO US THAT THE AWARD WAS MADE AT A REASONABLE PRICE AND IN THE BEST INTERESTS OF THE GOVERNMENT. WHILE YOU INDICATE THAT YOUR FIRM WAS IN A POSITION TO QUOTE A MORE COMPETITIVE PRICE FOR USED EQUIPMENT IN STOCK, THERE IS NO INDICATION THAT SUCH EQUIPMENT WOULD HAVE BEEN IN A SUITABLE CONDITION FOR THE NAVY'S NEEDS. IN ANY CASE, WE ARE UNABLE TO CONCLUDE THAT THE NAVY MISLED YOUR FIRM AS TO THE NATURE OF ITS REQUEST FOR PRICES ON YOUR EQUIPMENT.

WITH REGARD TO YOUR CLAIM FOR NOT BEING AWARDED THE CONTRACT, THE COURT OF CLAIMS HAS HELD THAT A PROSPECTIVE CONTRACTOR IS ENTITLED TO RECOVER HIS BID PREPARATION OR PROPOSAL PREPARATION COSTS WHERE HIS OFFER IS NOT SOLICITED IN GOOD FAITH OR WHERE HIS BID OR PROPOSAL IS NOT HONESTLY AND FAIRLY CONSIDERED. SEE KECO INDUSTRIES, INC. V UNITED STATES, 428 F. 2D 1233 (CT. CL. 1970) AND CONTINENTAL BUSINESS ENTERPRISES, INC. V UNITED STATES, CT. CL. NO. 160-69, DECIDED DECEMBER 10, 1971. WE FIND NO SUCH EVIDENCE IN THIS CASE TO JUSTIFY A CLAIM FOR PREPARATION COSTS. IN ANY EVENT, WE CERTAINLY FIND NO LEGAL BASIS TO SUPPORT YOUR CLAIM FOR $34,800. FURTHERMORE, AT THIS POINT WE SEE NO PURPOSE SERVED BY HAVING THE GOVERNMENT PURCHASE YOUR EQUIPMENT FOR $25,000 IN VIEW OF THE ABSENCE OF ANY REPORTED NEED FOR SUCH ADDITIONAL EQUIPMENT. THEREFORE, YOUR CLAIM MUST BE DENIED.