B-126456, JUL. 13, 1956

B-126456, JUL. 13, 1956

TO MAGIC CHEF, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 4, 1956, REQUESTING FURTHER CONSIDERATION OF OFFICE DECISION OF FEBRUARY 29, 1956, TO YOU, WHEREIN IT WAS HELD, FOR THE REASONS STATED, THAT YOUR PROTEST AGAINST THE AWARD OF A CONTRACT BY THE UNITED STATES MARINE CORPS TO ANOTHER BIDDER FOR HEAVY-DUTY RANGES PURSUANT TO INVITATION TO BID NO. 117 DID NOT CONTAIN SUFFICIENT GROUNDS FOR OUR OFFICE TO OBJECT AS A MATTER OF LAW TO THE ADMINISTRATIVE ACTION TAKEN IN MAKING THE AWARD.

YOU REQUEST INFORMATION RELATIVE TO YOUR CONTENTION THAT 3 OF THE 4 BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE FOR FURNISHING EQUIPMENT MANUFACTURED BY ONE MANUFACTURER. ALSO, YOU STATED THAT YOU BELIEVED "THAT A REVIEW OF THE AWARDS ON THIS TYPE OF EQUIPMENT OVER A PERIOD OF RECENT YEARS MIGHT DISCLOSE THAT AWARDS ON A PARTICULAR MANUFACTURER'S EQUIPMENT PREDOMINATES.'

IN RESPONSE TO OUR REQUEST THE DEPARTMENT OF THE NAVY CONSIDERED YOUR PROTEST FURTHER AND HAS NOW FURNISHED A SUPPLEMENTAL REPORT TAKING INTO CONSIDERATION THE STATEMENTS IN YOUR LETTER OF APRIL 4, 1956. THE DEPARTMENT ADMITS THAT THREE OF THE BIDDERS WHO SUBMITTED BIDS IN RESPONSE TO THE INVITATION OFFERED VULCAN-HART RANGES. THE DEPARTMENT STATES, HOWEVER, THAT IT IS AN ESTABLISHED PRACTICE THAT ALTHOUGH MANUFACTURERS ARE SOLICITED THEY SELDOM BID ON THESE HEAVY DUTY RANGES. IT IS STATED FURTHER THAT YOU ARE AN EXCEPTION TO THIS RULE, ALTHOUGH DEALERS IN RANGES ALSO BID ON MAGIC CHEF IN COMPETITION WITH YOUR CONCERN.

WITH REFERENCE TO YOUR STATEMENT THAT A REVIEW OF AWARDS ON THIS TYPE OF EQUIPMENT OVER A PERIOD OF YEARS MIGHT DISCLOSE THAT AWARDS ON A PARTICULAR MANUFACTURER'S EQUIPMENT PREDOMINATES, THE DEPARTMENT OF THE NAVY REPORTS GENERALLY AS FOLLOWS:

"A REVIEW HAS BEEN MADE OF ALL AWARDS ON RANGES MADE BY THE MARINE CORPS DURING THE PAST FIVE YEARS. THIS FIVE YEAR PERIOD WAS USED FOR THE REASON THAT MAGIC CHEF PROTESTED THE SUBJECT AWARD ON THE BASIS THAT PARAGRAPH 3.2.1 AND 3.3 OF PURCHASE DESCRIPTION DATED 10 NOVEMBER 1955 (COPY ENCLOSED) USED IN INVITATION FOR BID NUMBER 117-56 WERE UNDULY RESTRICTIVE. THESE REQUIREMENTS FIRST APPEARED IN THE PURCHASE RESTRICTIVE. THESE REQUIREMENTS FIRST APPEARED IN THE PURCHASE ON 15 MAY 1951 AND HAVE APPEARED IN PURCHASE DESCRIPTIONS USED IN EVERY MARINE CORPS PROCUREMENT FOR RANGES SINCE THAT DATE.

"THE PERTINENT PORTIONS OF THESE PARAGRAPHS ARE QUOTED FOR YOUR CONVENIENCE:

" "3.2.1 RANGE BODIES"

" "* * * TO PROTECT GAS COCKS FROM DUST, GREASE AND BREAKAGE, THE MANIFOLD SHALL BE FITTED WITH HEAVY FERROUS ALLOY CASTING.'

" "3.3 RANGE OVENS"

" "* * * EACH OVEN SHALL BE PROVIDED WITH ONE REMOVABLE SOLID RACK SUPPORTED BY CHANNEL STEEL RAILS.'

"AN ANALYSIS OF THE FOLLOWING PROCUREMENTS MADE DURING THIS FIVE YEAR PERIOD REVEALS THE FOLLOWING:

"IFB NO. 1604-51 OPENED ON 15 MAY 1951

"OF THE EIGHT BIDS RECEIVED FIVE DIFFERENT MANUFACTURERS' RANGES WERE OFFERED. TWO REGULAR DEALERS BID ON MAGIC CHEF, TAKING NO EXCEPTIONS TO THE REQUIREMENTS OF PARAGRAPHS 3.2.1 AND 3.3. AWARD WAS MADE TO COOPER EQUIPMENT COMPANY, OFFERING VULCAN-HART RANGES, THE LOWEST RESPONSIVE BIDDER.

"IFB NO. 2060-51 OPENED ON 29 JUNE 1951

"OF THE FIVE BIDS RECEIVED FIVE DIFFERENT MANUFACTURERS' RANGES WERE OFFERED. MAGIC CHEF, INC. (AMERICAN STOVE COMPANY) SUBMITTED A BID TAKING NO EXCEPTIONS TO PARAGRAPHS 3.2.1 AND 3.3. NO OTHER BIDDERS TOOK EXCEPTIONS TO PARAGRAPHS 3.2.1 AND 3.3. AWARD WAS MADE TO COOPER EQUIPMENT COMPANY OFFERING VULCAN-HART, THE LOWEST RESPONSIVE BIDDER.

"IFB NO. 280-52 OPENED ON 2 NOVEMBER 1951

"OF THE SEVEN BIDS RECEIVED FIVE DIFFERENT MANUFACTURERS' RANGES WERE OFFERED. MAGIC CHEF, INC. (AMERICAN STOVE COMPANY) TOOK NO EXCEPTIONS TO THE ESSENTIAL REQUIREMENTS OF THE PURCHASE DESCRIPTION (INCLUDING PARAGRAPHS 3.2.1 AND 3.3). AWARD WAS MADE TO MAGIC CHEF, INC. NO BIDDERS TOOK EXCEPTIONS TO PARAGRAPHS 3.2.1 AND 3.3. NO DEVIATIONS WERE GRANTED MAGIC CHEF, INC. UNDER THE CONTRACT AND SINCE SOURCE INSPECTION WAS PERFORMED BY THE INSPECTOR OF NAVAL MATERIAL, CLEVELAND, OHIO, IT IS ASSUMED THE RANGES WERE DELIVERED IN STRICT CONFORMANCE WITH THE CONTRACT.

"IFB NO. 1112 OPENED ON 23 MAY 1952

"OF THE FOUR BIDS RECEIVED, THREE DIFFERENT MANUFACTURERS' RANGES WERE OFFERED. MAGIC CHEF, INC. DID NOT SUBMIT A BID NOR DID ANY DEALER OFFER MAGIC CHEF RANGES. WHILE THE USUAL EXCEPTIONS WERE TAKEN BY OTHER BIDDERS AS TO BODY FINISH, BTU RATING, ETC., NO COMPLAINTS WERE MADE REGARDING PARAGRAPHS 3.2.1 AND 3.3. AWARD WAS MADE TO COOPER EQUIPMENT COMPANY OFFERING VULCAN-HART RANGES, THE LOWEST RESPONSIVE BID.

"IFB NO. 114 OPENED ON 12 FEBRUARY 1954

"OF THE THREE BIDS RECEIVED, THREE DIFFERENT MANUFACTURERS' RANGES WERE OFFERED. MAGIC CHEF, INC. DID NOT SUBMIT A BID NOR DID A DEALER OFFER MAGIC CHEF RANGES. VULCAN-HART MANUFACTURING COMPANY SUBMITTED THE LOWEST RESPONSIVE BID AND WAS GIVEN THE AWARD.

"IFB NO. 117-56 OPENED ON 13 DECEMBER 1955

"AS POINTED OUT ABOVE, OF THE FOUR BIDS RECEIVED THREE REGULAR DEALERS BID ON VULCAN-HART RANGES TAKING NO EXCEPTIONS TO THE PURCHASE DESCRIPTION. THE MAGIC CHEF, INC. BID WAS REJECTED BECAUSE OF EXCEPTIONS TAKEN TO PARAGRAPHS 3.2.1 AND 3.3 OF THE PURCHASE DESCRIPTION.

"FROM THE FOREGOING IT IS APPARENT THAT MAGIC CHEF, INC. IS CORRECT IN STATING THAT AWARDS ON A PARTICULAR MANUFACTURER'S RANGES HAVE BEEN PREDOMINANT IN RECENT YEARS. OF THE SIX PROCUREMENTS MADE, FIVE WERE AWARDED TO REGULAR DEALERS BIDDING ON VULCAN-HART AND ONE WAS AWARDED TO MAGIC CHEF, INC.

"A DETAILED ANALYSIS OF EACH PROCUREMENT REVEALS A LOGICAL EXPLANATION OF THIS SITUATION. IN THE FIRST PLACE, MAGIC CHEF RANGES WERE OFFERED ON ONLY THREE OUT OF SIX INVITATIONS FOR BID INVOLVED AND OF THE THREE ON WHICH BIDS WERE OFFERED, MAGIC CHEF, INC. RECEIVED ONE AWARD.

"IN EVERY INSTANCE WHERE AWARD WAS MADE FOR VULCAN-HART RANGES AND LOWER BIDS WERE REJECTED, SUCH LOWER BIDS OFFERED RANGES NOT MEETING THE ESSENTIAL REQUIREMENTS OF THE INVITATION. THE PRINCIPAL GROUNDS FOR REJECTION IN EACH CASE INVOLVED ONE OR BOTH OF THE FOLLOWING EXCEPTIONS TAKEN:

"1. ALL OFFERED RANGES WITH EXTERIOR FINISH OF BLACK JAPAN ENAMEL IN LIEU OF BAKED ON PORCELAIN ENAMEL.

"2. RANGES OFFERED WERE OF LOWER BTU CAPACITY THAN THAT SPECIFIED IN THE INVITATION.

"THE MARINE CORPS CONSIDERS THE REQUIREMENT FOR PORCELAIN ENAMEL FINISH AN ABSOLUTE NECESSITY IN ORDER TO OVERCOME THE RAPID REPLACEMENT RATE OF RANGES DUE TO RUSTING OF EXTERIOR PANELS AND SUBSEQUENT DETERIORATION OF INSULATION AND FRAME MEMBERS. JAPAN FINISH WILL NOT WITHSTAND REPETITIVE CLEANING REQUIRED AS A RESULT OF STRICT SANITARY AND HYGIENIC STANDARDS ESTABLISHED BY NAVY MEDICAL AUTHORITIES. STAINLESS STEEL IS THE ONLY ACCEPTABLE SUBSTITUTE FOR PORCELAIN ENAMEL FINISH BUT ITS COST IS PROHIBITIVE.

"THE BTU RATING, SPECIFIED IN THE PURCHASE DESCRIPTIONS USED, IS CONSIDERED THE ABSOLUTE MINIMUM REQUIRED TO INSURE RAPID RECOVERY OF HEAT WHEN CHARGING OVENS, GRILL SURFACES OR COOKING TOPS WITH A COLD PRODUCT AND MAINTAIN SCHEDULED PRODUCTION OF PREPARED FOODS DURING PEAK LOADS.

"THE MARINE CORPS REALIZES THE NEED FOR BROADER COMPETITION ON FUTURE PURCHASES OF THESE RANGES AND HAS ALREADY UNDERTAKEN DISCUSSIONS WITH MANUFACTURERS REGARDING POSSIBLE REVISIONS TO THE PRESENT PURCHASE DESCRIPTION TO ACCOMPLISH THIS END. HOWEVER, LONG EXPERIENCE DICTATES THAT NO CHANGES SHOULD BE MADE AT THIS TIME WITH REGARD TO THE EXTERIOR FINISH, BTU RATING AND PARTICULARLY PARAGRAPHS 3.2.1 AND 3.3, PRESENTLY OBJECTED TO BY MAGIC CHEF, INC.'

IT IS, OF COURSE, THE DUTY OF ALL OFFICERS CHARGED WITH THE RESPONSIBILITY OF PROCURING SUPPLIES AND SERVICES FOR THE UNITED STATES TO BE GUIDED IN THEIR ACTIONS BY THE BEST INTERESTS OF THE GOVERNMENT. HOWEVER, THE RESPONSIBILITY FOR MAKING THE FACTUAL DETERMINATIONS AS TO WHAT ARTICLES WILL BEST SERVE THE NEEDS OF THE GOVERNMENT IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION, WITH THE EXERCISE OF WHICH WE MAY NOT PROPERLY INTERFERE EXCEPT IN CASE OF CLEARLY ESTABLISHED AND OBVIOUS ABUSE. THE FACT THAT A PROSPECTIVE BIDDER MAY BE UNABLE TO MEET THE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS, WHICH, IN FACT, HAVE BEEN DETERMINED TO REFLECT THE REQUIREMENTS OF THE GOVERNMENT, IS NOT SUFFICIENT TO WARRANT THE CONCLUSION THAT SUCH SPECIFICATIONS ARE UNDULY RESTRICTIVE TO COMPETITION. THE UNITED STATES IS NOT REQUIRED TO PURCHASE EQUIPMENT MERELY BECAUSE IT IS THE CHEAPEST OFFERED, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED; NOR IS THE GOVERNMENT TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF THEIR EQUIPMENT REGARDLESS OF WHETHER IT MEETS THE ESSENTIAL REQUIREMENTS DETERMINED TO BE NECESSARY TO MEET THE NEEDS OF THE GOVERNMENT.

THE RECORD IN THE PRESENT CASE DOES NOT SHOW THAT THE REJECTION OF YOUR BID WAS MOTIVATED BY FAVORITISM OR PERSONAL PREFERENCE, OR THAT THE ADVERTISED SPECIFICATIONS DID NOT REPRESENT A BONA FIDE DETERMINATION OF THE GOVERNMENT'S REQUIREMENTS, ADOPTED AFTER A CAREFUL STUDY OF THE NEED TO BE MET, IN THE LIGHT OF PAST EXPERIENCE.

WE BELIEVE THAT THE GOOD FAITH OF THE ADMINISTRATIVE AGENCY IS EVIDENCED BY THE FACT THAT THE DEPARTMENT OF THE NAVY HAS NOW UNDERTAKEN DISCUSSIONS WITH MANUFACTURERS REGARDING POSSIBLE REVISIONS TO THE PRESENT SPECIFICATIONS, IN ORDER TO ACCOMPLISH BROADER COMPETITION ON FUTURE PURCHASES OF THESE RANGES. TO THE EXTENT THAT IT HAS CONTRIBUTED TO THAT ACTION, YOUR PROTEST HAS SERVED A USEFUL PURPOSE; FOR THE REASONS STATED, HOWEVER, WE DO NOT FEEL THAT WE WOULD BE ..END :