B-175908, AUG 2, 1972

B-175908, AUG 2, 1972

BID PROTEST - DETERMINATION OF RESPONSIBILITY - ESTABLISHMENT OF SPECIFICATIONS DENIAL OF PROTEST BY NORTH SHORE INDUSTRIES, INC., AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER AN IFB ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, PHILADELPHIA, PA., FOR THE DESTRUCTION OF PHOTOGRAPHIC FILM AND/OR PAPER AND THE RECOVERY OF THE SILVER BEARING RESIDUE. THE DECISION AS TO A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY PROPERLY RESTS WITH THE PROCURING ACTIVITY, AND THE AGENCY'S DECISION WILL NOT BE QUESTIONED BY GAO UNLESS THERE IS CLEAR EVIDENCE OF BAD FAITH OR A CONVINCING SHOWING THAT NO SUBSTANTIAL GROUNDS EXIST FOR THE ADMINISTRATIVE DETERMINATION, NEITHER OF WHICH ARE PRESENT HERE. 174021, NOVEMBER 24, 1971. FURTHER, THE ADMINISTRATIVE AGENCY HAS THE PRIMARY RESPONSIBILITY FOR DEVELOPING SPECIFICATIONS WHICH MEET THE MINIMUM NEEDS OF THE GOVERNMENT, AND GAO WILL NOT SUBSTITUTE ITS JUDGMENT ABSENT A CLEAR SHOWING OF ERROR.

TO NORTH SHORE INDUSTRIES, INC.

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS (IFB) NO. N00140-72 B-1374, ISSUED ON FEBRUARY 22, 1972, BY THE NAVAL REGIONAL PROCUREMENT OFFICE, PHILADELPHIA, PENNSYLVANIA.

THE SUBJECT INVITATION SOLICITED BIDS FOR SERVICES TO INCINERATE AN ESTIMATED QUANTITY OF 500,000 POUNDS OF GOVERNMENT-FURNISHED PHOTOGRAPHIC FILM AND/OR PAPER, AND TO PREPARE THE SILVER BEARING RESIDUE (ASHES) FOR SHIPMENT IN GOVERNMENT-FURNISHED CONTAINERS TO THE NAVAL AMMUNITION DEPOT, EARLE, NEW JERSEY.

BY LETTER DATED MARCH 17, 1972, YOUR FIRM STATED THAT YOUR BID COMPLIED WITH ALL OF THE REQUIRED SPECIFICATIONS OF THE IFB EXCEPT THAT YOUR METHOD FOR RECLAIMING SILVER FROM PHOTOGRAPHIC FILM WAS A PATENTED CHEMICAL PROCESS AS OPPOSED TO INCINERATION; THAT YOUR BID WAS BASED ON SHIPPING SILVER BEARING RESIDUE DIRECTLY TO THE ASSAY OFFICE IN CONTRACTOR FURNISHED CONTAINERS; AND, YOU REQUESTED THAT YOUR BID BE EVALUATED TO GIVE EFFECT TO THE SAVINGS WHICH WOULD THEREBY ACCRUE TO THE GOVERNMENT.

YOUR LETTER OF MARCH 17 WAS BROUGHT TO THE ATTENTION OF THE COGNIZANT TECHNICAL PERSONNEL AT THE NAVAL ORDNANCE SYSTEMS COMMAND, WHOSE ADVICE WAS REQUESTED AS TO WHETHER IT WOULD BE DESIRABLE TO ISSUE A REVISED SOLICITATION WHICH WOULD HAVE NO RESTRICTION AS TO PROCESSING METHODS. THEY ADVISED THE BUYER THAT WHILE THEY WERE ACTIVELY ENGAGED IN SEEKING TO DEVELOP NEW SOURCES WHICH WOULD UTILIZE MORE EFFICIENT AND ECONOMICAL METHODS OF RECOVERING SILVER BEARING RESIDUE FROM FILM, THEY PRESENTLY WERE UNAWARE OF ANY COMPANY WHICH COULD SUCCESSFULLY PROCESS ALL TYPES OF SENSITIZED PHOTOGRAPHIC MATERIAL BY ANY OTHER METHOD THAN THAT CONTEMPLATED BY THE IFB. THIS CONCLUSION WAS BASED IN PART ON THE FACT THAT IN A JULY 1971 PROCUREMENT, WITH NO RESTRICTIONS AS TO THE PROCESSING METHODS, NOT ONE BID FROM A CHEMICALLY PROCESSING FIRM WAS RECEIVED BY THE COMMAND, AND PRIOR EXPERIENCE WITH NORTH SHORE INDICATED THAT YOU COULD NOT PROCESS SENSITIZED PAPER BY YOUR CHEMICAL METHOD. CONSEQUENTLY, AND SINCE THERE WAS NO PROVISION IN THE IFB FOR BID EVALUATION FACTORS BASED ON USE OF CONTRACTOR FURNISHED CONTAINERS OR SHIPMENT OF SILVER RESIDUE TO A LOCATION OTHER THAN EARLE, NEW JERSEY, IT WAS DETERMINED NOT TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO CANCEL THE INVITATION, AND AWARD WAS MADE TO NORTH AMERICAN METAL AND CHEMICAL COMPANY (NORTH AMERICAN) THE LOW BIDDER. THE COMMAND'S FULL REPORT IN THE MATTER IS AS FOLLOWS:

"WE HAVE BEEN WORKING WITH SEVERAL FIRMS USING CHEMICAL PROCESSING METHODS IN HOPES OF MAKING THE MARKET MORE COMPETITIVE AND ALSO TO MINIMIZE THE LOSS OF NATURAL RESOURCE (PLASTIC BASE). NORTH SHORE INDUSTRIES ARE AMONG THOSE WE HAVE GIVEN SMALL TEST AND EVALUATION PROCUREMENTS.

"IN JULY, 1971, WE WENT OUT WITH IFB'S FROM YOUR OFFICE (N00140-71B 1798) WITH NO RESTRICTIONS AS TO PROCESSING METHODS. THE IFB CONTAINED A MINIMUM GUARANTEE CLAUSE TO PROTECT THE GOVERNMENT'S INTEREST AS REQUIRED BY OUR LEGAL COUNSEL. WE DID NOT RECEIVE ONE BID FROM A CHEMICAL PROCESSING FIRM EVEN THOUGH WE ADVISED THEM OF THE INTENDED PROCUREMENT.

"LATER IN 1971 WE GAVE NORTH SHORE INDUSTRIES A PROCUREMENT FOR 30,000 POUNDS OF FILM TO BE PROCESSED CHEMICALLY FOR TEST AND EVALUATION PURPOSES. ONE OF THE SHIPMENTS THEY RECEIVED CONTAINED ABOUT 3,000 POUNDS OF SENSITIZED PAPER. AFTER SEVERAL PHONE CALLS THEY REQUESTED PERMISSION TO SHIP THE PAPER TO NAD EARLE BECAUSE THEY COULD NOT PROCESS IT BY THEIR PRESENT METHOD.

"WE RECEIVE ALL TYPES OF SENSITIZED PHOTOGRAPHIC MATERIAL INCLUDING FILM ON SPOOLS AND REELS, MATERIAL THAT HAS SET OUT IN THE WEATHER AND SENSITIZED PAPER. THEREFORE, IT IS OBVIOUS BY NORTH SHORE INDUSTRIES OWN ADMITTANCE THEY CANNOT MEET THE NEEDS OF THE DOD SILVER RECLAMATION PROGRAM BY THEIR PROCESSING METHOD IN ITS PRESENT FORMAT.

"NORTH SHORE INDUSTRIES STATED IN RESPONSE TO SECTION E, PAGE 12, THEIR METHOD IS A CONTINUOUS PROCESS AND CANNOT BE BATCH LOADED, LOCKED AND SEALED. WE ARE REQUIRED TO ASSURE THE RETURN OF ALL GOVERNMENT OWNED SILVER EITHER BY LOCKING AND SEALING OR BY MINIMUM GUARANTEE. THERE IS NO POSSIBLE WAY TO OBTAIN A MINIMUM GUARANTEE ON THIS TYPE OF CONTRACT WITH SO MANY VARIABLES AND UNKNOWN INFORMATION INVOLVED.

"NAVORD WILL CONTINUE TO COOPERATE WITH PRIVATE INDUSTRY IN THE RESEARCH OF PROCESSING METHODS THAT ARE MORE ECONOMICAL, POLLUTION FREE, INCREASE SILVER YIELD AND WILL CONSERVE OUR NATURAL RESOURCES.

"AT THE PRESENT TIME WE ARE NOT AWARE OF ANY COMPANY THAT CAN PROVIDE THE NECESSARY SERVICES CHEMICALLY."

YOU STATE THAT YOUR PROTEST IS BASED ON THE FOLLOWING REASONS:

"1. THE BID CALLS FOR EACH BIDDER TO HAVE INCINERATION CAPABILITIES THAT MEET WITH FEDERAL, STATE, AND LOCAL POLLUTION LAWS AND REGULATIONS.

"2. THE BID IS DIRECTED TO ONLY THOSE COMPANIES THAT SALVAGE THE SILVER FROM PHOTOGRAPHIC FILM BY INCINERATION."

IN SUPPORT OF YOUR FIRST CONTENTION YOU ASSERT THAT YOU UNDERSTAND THAT NORTH AMERICAN HAD HAD AT LEAST ONE CITATION FOR POLLUTION VIOLATION, AND IT THEREFORE DOES NOT CONFORM TO THE SPECIFICATION REQUIREMENT QUOTED ABOVE. IT IS REPORTED THAT AS OF THE TIME OF THE PREAWARD SAFETY SURVEY OF NORTH AMERICAN'S FACILITIES, IT WAS OPERATING ITS PLANT UNDER A CONSENT JUDGMENT ISSUED BY THE SUPERIOR COURT OF NEW JERSEY FOR VIOLATIONS OF CERTAIN NEW JERSEY AIR POLLUTION LAWS. IT IS ALSO REPORTED THAT THE JUDGMENT ALLOWED THE COMPANY CERTAIN PERIODS OF TIME FORTTESTS AND INSTALLATION OF AIR POLLUTION CONTROL EQUIPMENT WHICH WILL MEET THE REQUIREMENTS OF THE STATE'S CODE. THE NAVY'S SAFETY OFFICER, HAVING BEEN ADVISED BY THE CHIEF OF THE NEW JERSEY DEPARTMENT OF LABOR AND INDUSTRY THAT NORTH AMERICAN WAS CURRENTLY CAPABLE OF COMPLYING WITH ALL REGULATIONS CONCERNING ACCEPTABLE SAFETY STANDARDS AND POLLUTION CONTROLS, DETERMINED THAT NORTH AMERICAN COULD MEET THE REQUIREMENTS OF THE INVITATION AND RECOMMENDED AWARD TO THAT FIRM. WE SEE NO BASIS, IN THIS RESPECT, FOR OBJECTING TO THE AFFIRMATIVE DETERMINATION OF NORTH AMERICAN'S RESPONSIBILITY. WE HAVE CONSISTENTLY HELD THAT THE DECISION AS TO A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY PROPERLY RESTS WITH THE PROCURING ACTIVITY, AND THE AGENCY'S DECISION WILL NOT BE QUESTIONED BY THIS OFFICE UNLESS THERE IS CLEAR EVIDENCE OF BAD FAITH OR A CONVINCING SHOWING THAT NO SUBSTANTIAL GROUNDS EXIST FOR THE ADMINISTRATIVE DETERMINATION, NEITHER OF WHICH ARE PRESENT HERE. B-174021, NOVEMBER 24, 1971, AND CASES CITED THEREIN.

THE ESSENCE OF YOUR SECOND ARGUMENT IS THAT THE METHOD OF SALVAGING SILVER FROM PHOTOGRAPHIC FILM SHOULD NOT BE LIMITED TO THE INCINERATION PROCESS SINCE THE NONPOLLUTANT CHEMICAL PROCESS RECAPTURES 100 PERCENT OF THE SILVER FROM THE FILM, WHEREAS THE INCINERATION PROCESS CAN LOSE UP TO 10 TO 15 PERCENT OF THE SILVER.

OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE ADMINISTRATIVE AGENCIES HAVE THE PRIMARY RESPONSIBILITY FOR DEVELOPING SPECIFICATIONS WHICH REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT. 44 COMP. GEN. 302, 304 (1964); 38 COMP. GEN. 190 (1950). IN THE INSTANT CASE IT IS THE CONSIDERED OPINION OF NAVY TECHNICAL PERSONNEL THAT THE REQUIRED SERVICES COULD NOT BE ACHIEVED BY THE CHEMICAL PROCESSES KNOWN TO BE IN EXISTENCE AT THE TIME OF AWARD. IN SUCH CIRCUMSTANCES, WE WILL NOT ATTEMPT TO SUBSTITUTE OUR OWN JUDGMENT FOR THAT OF THE TECHNICAL PERSONNEL EMPLOYED BY THE GOVERNMENT TO DECIDE SUCH MATTERS, UNLESS THERE IS CLEAR AND CONVINCING EVIDENCE THAT THEIR JUDGMENT IS IN ERROR. 40 COMP. GEN. 294, 297 (1960). SUCH DOES NOT APPEAR TO BE THE CASE HERE.

ON THE PRESENT RECORD, IT IS OUR OPINION THAT, IN THE LIGHT OF THE STATEMENTS BY THE ADMINISTRATIVE AGENCY, THE RESTRICTION OF THE PROCUREMENT TO THE INCINERATION METHOD OF RECLAIMING THE SILVER DOES NOT AFFORD A LEGAL BASIS FOR OUR OFFICE TO REQUIRE CANCELLATION OF NORTH AMERICAN'S CONTRACT. IN THE EVENT YOUR COMPANY HAS SINCE ADVANCED THE STATE OF THE ART OR MADE A BREAKTHROUGH IN THE TECHNIQUE OF RECLAIMING THE SILVER BY CHEMICAL MEANS SO AS TO BE ABLE TO SATISFY THE GOVERNMENT'S ESSENTIAL NEEDS, THE MATTER SHOULD BE PRESENTED TO THE AGENCY FOR ITS CONSIDERATION IN EFFECTING FUTURE PROCUREMENTS.

IN VIEW OF THE FOREGOING, YOUR PROTEST MUST BE DENIED.