B-175979, JUL 26, 1972

B-175979, JUL 26, 1972

BID PROTEST - BID PRICE - MINIMUM AMOUNT DENYING PROTEST OF PENN ELECTRIC MOTOR COMPANY, INC., AGAINST THE AWARD OF A CONTRACT TO ANY FIRM OFFERING A BID OF LESS THAN $19.80 PER UNIT UNDER AN RFP ISSUED BY THE DEFENSE SUPPLY AGENCY CENTER, RICHMOND, VA., FOR THE PROCUREMENT OF ELECTRIC MOTORS. AS FOUR OF THE FIVE OFFERS RECEIVED QUOTED PRICES BELOW $19.80 PER MOTOR, AND A PRIOR PROCUREMENT WAS COMPLETED AT A LOWER PRICE, THE COMP. GEN. IS UNABLE TO CONCLUDE THAT THE PRICE QUOTED BY THE LOW OFFEROR IS INSUFFICIENT TO PERMIT PERFORMANCE OF THE CONTRACT. FURTHER, THE FACT THAT AN OFFEROR MIGHT INCUR A LOSS IN PERFORMING A CONTRACT DOES NOT JUSTIFY REJECTION OF AN OTHERWISE ACCEPTABLE OFFER.

TO PENN ELECTRIC MOTOR COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 15, 1972, PROTESTING AGAINST AWARD OF CONTRACT TO ANY FIRM OFFERING A BID OF LESS THAN $19.80 PER MOTOR, UNDER REQUEST FOR PROPOSALS (RFP) NO. DSA400-72-R 5993, ISSUED MARCH 14, 1972, BY THE DEFENSE SUPPLY AGENCY CENTER, RICHMOND, VIRGINIA, FOR THE PROCUREMENT OF 82 MOTORS.

THE RFP WAS ISSUED PURSUANT TO 10 U.S.C. 2304(A)(10) WHICH AUTHORIZES NEGOTIATED PROCUREMENTS WHEN IT IS IMPRACTICAL TO OBTAIN COMPETITION BY FORMAL ADVERTISING. DUE TO THE INABILITY OF THE PROCURING AGENCY TO DESCRIBE THE MOTOR BY EXISTING FEDERAL OR MILITARY SPECIFICATIONS THE FOLLOWING DESCRIPTION WAS USED:

"MOTOR, AC:

SQUIRREL CAGE INDUCTION TYPE, SPLIT-PHASE STARTING, 115 V, 60 CYCLES, SINGLE PHASE, 1/3 HP SINGLE TAKEOFF, CW OR CCW, DRIPPROOF, FLATTED SHAFT, 1/2 IN. DIA, FIXED BASE MTG GENERAL ELECTRIC CO. LOW VOLTAGE SWITCHGEAR DEPT FSCM 03497 P/N 5XBHOOC."

FIVE OFFERS WERE RECEIVED AND EACH OFFEROR AGREED TO SUPPLY THE GENERAL ELECTRIC COMPANY MOTOR AS SOLICITED. ON APRIL 26, 1972, A CONTRACT WAS AWARDED TO GENERAL ELECTRIC SUPPLY COMPANY (GES) AT A TOTAL PRICE OF $1,262.80, OR $15.40 PER UNIT. YOUR PROTEST TO THIS OFFICE FOLLOWED.

YOU CONTEND THAT THE MINIMUM BID PER MOTOR MUST BE $19.80 AND YOU QUESTION WHETHER THE PACKAGING AND PACKING REQUIREMENTS WILL BE MET BY AN OFFEROR WHOSE PRICE IS BELOW $19.80 PER MOTOR.

THE RFP REQUIRES "LEVEL A" PRESERVATION AND PACKAGING FOR ITEM 0001, CONSISTING OF 20 MOTORS AND "LEVEL C" PRESERVATION AND PACKAGING FOR ITEMS 0002, 0003 AND 0004, WHICH INCLUDE THE REMAINING 62 MOTORS. UPON RECEIPT OF YOUR PROTEST THE CONTRACTING OFFICER REQUESTED A VERIFICATION FROM GES ON THEIR PROPOSED PRESERVATION AND PACKAGING FOR ITEM 0001. GES VERIFIED THE PROPOSED USE OF "LEVEL A" PRESERVATION AND PACKAGING FOR ITEM 0001 AS REQUIRED BY THE RFP.

CONCERNING THE AWARD OF CONTRACT AT A PRICE BELOW $19.80 PER MOTOR, THE PROCURING AGENCY REPORTS THAT FOUR OF THE FIVE OFFERS RECEIVED QUOTED A PRICE BELOW $19.80 PER MOTOR AND THAT THERE HAS BEEN A PRIOR PROCUREMENT OF THIS ITEM WITH "LEVEL A" PRESERVATION AND PACKAGING AT A PRICE BELOW $19.80 PER MOTOR. BASED ON THESE FACTS WE ARE UNABLE TO CONCLUDE THAT THE GES OFFER IS INSUFFICIENT TO PERMIT PERFORMANCE OF THE CONTRACT. FURTHERMORE, WE HAVE HELD THAT THE FACT THAT THE LOW BIDDER OR OFFEROR MIGHT INCUR A LOSS IN PERFORMING THE CONTRACT AT THE PRICE SHOWN IN ITS BID OR OFFER DOES NOT JUSTIFY REJECTION OF AN OTHERWISE ACCEPTABLE BID OR OFFER. 49 COMP. GEN. 311 (1969), B-173436, OCTOBER 12, 1971.

UNDER THESE CIRCUMSTANCES WE SEE NO REASON TO QUESTION THE AWARD AND THEREFORE YOUR PROTEST MUST BE DENIED.

WE ARE ENCLOSING A COPY OF THE RULES AND REGULATIONS ON BID PROTESTS. PLEASE NOTE THAT UNDER 20.2(A), A PROTEST MUST BE FILED WITHIN 5 WORKING DAYS OF THE TIME THAT THE BASIS FOR THE PROTEST WAS KNOWN OR SHOULD HAVE BEEN KNOWN.