[Protests of DOD SDB Set-Aside Solicitation]

B-165835, MAR. 5, 1969

TO DIESEL INJECTION CONTROL:

WE REFER TO YOUR TELEGRAM DATED FEBRUARY 13, 1969, CONCERNING OUR DECISION B-165835, JANUARY 31, 1969, 48 COMP. GEN. ------, TO THE DIRECTOR, DEFENSE SUPPLY AGENCY (DSA), REGARDING CONTRACT DSA-700-69-C 4631, WHICH THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC) AWARDED TO YOU ON NOVEMBER 1, 1968, ON THE BASIS OF AN EVALUATED BID OF $16,020.43, FOR THE FURNISHING OF PLUNGER AND BUSHING ASSEMBLIES FOR USE IN DIESEL FUEL INJECTORS.

OUR DECISION WAS OCCASIONED BY YOUR PROTEST AGAINST THE CANCELLATION OF THE AWARD BY DCSC ON DECEMBER 17, 1968, FOLLOWING A COMPLAINT BY ONE OF THE COMPETING BIDDERS, KORODY-COLYER CORPORATION, THAT YOUR BID WAS ERRONEOUSLY EVALUATED AS OFFERING A DOMESTIC END ITEM. AS OUR DECISION STATES, UPON PROPER EVALUATION OF YOUR BID AS OFFERING A FOREIGN END ITEM (MORE THAN 50 PERCENT OF THE COMPONENTS WERE OF FOREIGN ORIGIN), YOU WERE THIRD LOW BIDDER WITH AN EVALUATED TOTAL PRICE OF $23,309.73, AND KORODY- COLYER, WHO ALSO OFFERED A FOREIGN END ITEM, WAS THE LOWEST BIDDER AT AN EVALUATED TOTAL PRICE OF $16,511.04 (UNIT PRICE OF $8.74). WE THEREFORE CONCLUDED, IN THE LIGHT OF THE PROVISIONS OF THE BUY AMERICAN ACT, 41 U.S.C. 10A, AS IMPLEMENTED BY EXECUTIVE ORDER 10582, AS AMENDED, AND THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), OF THE LANGUAGE OF THE BUY AMERICAN ACT CLAUSE PRESCRIBED BY ASPR 6-104.5 AND INCORPORATED IN THE INVITATION FOR BIDS, AND OF THE REQUIREMENT IN 10 U.S.C. 2305 (C) FOR THE AWARD OF ADVERTISED PROCUREMENTS TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, THAT THE CANCELLATION WAS A PROPER ACTION ON THE PART OF THE PROCURING ACTIVITY.

IN ADDITION TO THE FOREGOING, HOWEVER, OUR DECISION TOOK NOTE OF THE FACT THAT, SUBSEQUENT TO THE ISSUANCE OF THE CANCELLATION NOTICE TO YOU, DCSC'S STOCK OF THE PROCUREMENT ITEMS HAD BEEN EXHAUSTED AND AN URGENT NEED HAD ARISEN WHICH YOU WERE IN A POSITION TO SATISFY WITHOUT DELAY FROM THE ITEMS WHICH YOU HAD MANUFACTURED, BUT NOT DELIVERED, AFTER NOVEMBER 1, 1968. ACCORDINGLY, WE ADVISED THE DIRECTOR, DSA, THAT THE NOTICE OF CANCELLATION COULD BE RESCINDED AND THE PROCUREMENT QUANTITY ACCEPTED FROM YOU PROVIDED YOU WERE WILLING TO REDUCE YOUR PRICE TO THE LEVEL OF THE KORODY-COLYER BID. WE FURTHER STATED THAT IN THE EVENT OF YOUR REFUSAL TO FURNISH THE ITEMS AT THE REDUCED PRICE, WE CONCURRED WITH THE RECOMMENDATION OF THE CONTRACTING OFFICER THAT AWARD BE MADE TO KORODY- COLYER AT THE PRICE STATED IN ITS BID, THE ACCEPTANCE PERIOD OF WHICH HAD BEEN EXTENDED TO FEBRUARY 16.

IN YOUR TELEGRM, YOU STATE THAT WITHIN THREE OR FOUR DAYS AFTER OUR DECISION WAS ISSUED DCSC NOTIFIED YOU THAT YOU HAD UNTIL FEBRUARY 12, 1969, TO REDUCE YOUR UNIT PRICE TO $8.75. HOWEVER, YOU STATE THAT YOU ARE NOT WILLING TO ACCEPT THE CANCELLATION FOR THE REASONS THAT THE MISTAKE IN EVALUATING YOUR BID WAS SOLELY THAT OF THE GOVERNMENT AND THAT YOU HAVE ALREADY OBLIGATED YOURSELF TO THE EXTENT OF $11.15 PER UNIT FOR THE COMPLETED ITEMS. ACCORDINGLY, AND ON THE BASIS THAT SIX WEEKS ELAPSED BETWEEN THE DATE OF YOUR PROTEST AND THE ISSUANCE OF OUR DECISION, YOU REQUEST AN EXTENSION (OF TIME, PRESUMABLY, TO RESPOND TO DCSC) IN ORDER TO PERMIT YOU TO FIRST SEEK REINSTATEMENT OF THE CONTRACT AT HIGHER AUTHORITY.

WE HAVE BEEN ADVISED BY DSA HEADQUARTERS THAT SINCE YOU FAILED TO RESPOND TO THE REQUEST OF DCSC BY FEBRUARY 12 FOR A STATEMENT REGARDING REDUCTION OF YOUR BID PRICE IN LINE WITH OUR DECISION, DCSC AWARDED THE PROCUREMENT TO KORODY-COLYER AT ITS LOW BID PRICE. IN THE CIRCUMSTANCES, WE BELIEVE THAT FURTHER DELAY IN THE FILLING OF THE GOVERNMENT'S NEEDS WHILE YOU ATTEMPT TO PURSUE FURTHER REMEDIES, COULD NOT BE JUSTIFIED. HOWEVER, WE FEEL COMPELLED TO REMIND YOU THAT EVEN IF THE MISTAKE IN EVALUATION OF YOUR BID, WHICH LED TO THE ERRONEOUS AWARD, WAS SOLELY THAT OF DCSC AS YOU CLAIM, THE AWARD TO YOU WAS NEVERTHELESS INVALID. IN OUR VIEW, THE PRIMARY CAUSE OF THE ERROR WAS YOUR FAILURE TO INDICATE IN YOUR BID, IN THE BUY AMERICAN CERTIFICATE INCLUDED IN THE BID FORM FOR THAT PURPOSE, THAT THE ARTICLES YOU OFFERED WERE OF FOREIGN ORIGIN UNDER THE PROVISION OF THE BUY AMERICAN ACT AND EXECUTIVE ORDER NO. 10582 WHICH WERE CLEARLY STATED IN THE INVITATION. YOUR BID IN FACT CONTAINED YOUR CERTIFICATION THAT THE ARTICLES WOULD BE DOMESTIC; ALTHOUGH THIS WAS CONTRADICTED BY THE STATEMENT WHICH YOU ATTACHED AT THE END OF YOUR BID, THE AWARD WHICH WAS MADE TO YOU (AND COULD NOT OTHERWISE HAVE BEEN MADE TO YOU) WAS MADE IN THE BELIEF THAT YOU WERE OFFERING A DOMESTIC ARTICLE. OTHERWISE AWARD WOULD HAVE BEEN MADE TO KORODY-COLYER AT ITS UNIT PRICE OF $8.74. THE CONTRACTING OFFICER HAD NO AUTHORITY TO OBLIGATE THE GOVERNMENT TO PAY MORE THAN THE LOWEST CORRECT BID PRICE WHICH SHOULD HAVE BEEN ACCEPTED. (10 U.S.C. 2305 (C) ). SEE B-137717, MARCH 3, 1959; B-161722, JANUARY 11, 1968; B-164826, AUGUST 29, 1968, COPIES ENCLOSED.