B-141782, MAR. 16, 1960

B-141782, MAR. 16, 1960

TO OXYGEN EQUIPMENT AND SERVICE COMPANY:

REFERENCE IS MADE TO LETTER OF JANUARY 21, 1960, FROM SOLOMON DIMOND, ATTORNEY, PROTESTING ON YOUR BEHALF AGAINST THE AWARD OF NEGOTIATED CONTRACT NO. N32-5976, TO U.S. PLASTIC MOLDING CORP., FOR A QUANTITY OF PLASTIC PHARYNGEAL AIRWAYS, ISSUED BY THE MILITARY MEDICAL SUPPLY AGENCY. IT IS CONTENDED, IN SUBSTANCE, THAT THE PROCUREMENT OFFICIALS ERRED IN FAILING TO AWARD YOU THE CONTRACT SINCE YOURS WAS THE LOWEST PROPOSAL SUBMITTED; THAT NO ATTEMPT WAS MADE TO NEGOTIATE WITH YOU FOR A PART OF THE PROCUREMENT; AND, THAT THE DELIVERY REQUIREMENTS STATED IN THE REQUEST FOR PROPOSALS WERE ARBITRARY AND UNREASONABLE.

THE RECORD DISCLOSES THAT REQUEST FOR PROPOSALS NO. 4844 CALLED FOR DELIVERY OF THE ARTICLES DURING FEBRUARY 1960, IN ACCORDANCE WITH A REQUEST FROM THE REQUISITIONING AUTHORITIES. IT FURTHER STIPULATED, HOWEVER, THAT OFFERS WITH A LONGER TIME FOR DELIVERY THAN THAT SPECIFIED WOULD BE CONSIDERED BUT,"SINCE TIME OF DELIVERY IS AN IMPORTANT FACTOR, THE GOVERNMENT RESERVES THE RIGHT TO ACCEPT AN OFFER ON THE BASIS OF DELIVERY.' WHILE THIS LANGUAGE IS SO BROAD THAT IT MIGHT RENDER INVALID A FORMALLY ADVERTISED PROCUREMENT (UNLESS SOME BASIS FOR EVALUATING TIME AND PRICE WERE ADDED) WE ARE AWARE OF NO OBJECTION TO ITS USE IN THIS INSTANCE, HAVING IN MIND THE GREATER DISCRETION ALLOWED CONTRACTING AGENCIES AS TO SUCH MATTERS IN NEGOTIATED PROCUREMENTS.

YOU OFFERED TO COMMENCE DELIVERY IN APRIL AND COMPLETE THE CONTRACT IN JULY 1960, WHEREAS THE SECOND LOW PROPOSER OFFERED TO COMMENCE DELIVERIES IN MARCH AND COMPLETE THE CONTRACT IN MAY 1960. UPON REQUEST FOR VERIFICATION OF THE URGENT DELIVERY REQUIREMENTS THE CONTRACTING OFFICER WAS ADVISED BY THE REQUISITIONING AGENCY THAT THE SUBJECT ARTICLE WAS TO BE COORDINATED WITH SEVERAL OTHER MEDICAL SUPPLY ITEMS FOR PACKAGING IN ASSEMBLIES, AND THAT FAILURE TO CORRELATE DELIVERY OF ALL ARTICLES WOULD RESULT IN ADDITIONAL LABOR COSTS, EXTRA STORAGE EXPENSES, AND RELATED INCONVENIENCES. FOR THAT REASON THE PROPOSAL OFFERING THE BEST PERFORMANCE SCHEDULE WAS ACCEPTED, IT BEING APPARENT THAT THE DELIVERY REQUIREMENTS SET FORTH IN THE REQUEST FOR PROPOSALS WERE DICTATED BY THE GOVERNMENT'S NEEDS RATHER THAN BEING ARBITRARY AND UNREASONABLE AS YOUR ATTORNEY CONTENDS.

WITH RESPECT TO THE ALLEGATION THAT NO ATTEMPT WAS MADE TO NEGOTIATE WITH YOU FOR A PART OF THE REQUIREMENT, SUCH CONTENTION IS NOT SUPPORTED BY THE FACTS OF RECORD. IT APPEARS THAT ON OR ABOUT JANUARY 5, 1960, THE CONTRACTING OFFICE SOUGHT TO OBTAIN FROM YOU A PROMISE OF A MORE SATISFACTORY DELIVERY SCHEDULE. YOU WERE REQUESTED TO REVIEW YOUR PROPOSAL WITH THAT OBJECTIVE, AND TO INDICATE ALSO WHETHER YOU WOULD RELAX THE CONDITION IN YOUR PREVIOUS PROPOSAL LIMITING ACCEPTANCE OF AWARD TO AN ALL OR NONE BASIS. YOU DECLINED SUCH REQUEST AND REAFFIRMED YOUR ORIGINAL DELIVERY OFFER.

IT HAS LONG BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT THE UNITED STATES IS NOT REQUIRED TO PURCHASE EQUIPMENT OR SUPPLIES MERELY BECAUSE THEY ARE OFFERED AT THE LOWEST PRICE WHEN, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, THE ACTUAL NEEDS OF THE GOVERNMENT WOULD NOT BE SERVED THEREBY. AS TO THIS PROCUREMENT, WE FIND NO ADEQUATE BASIS FOR HOLDING THAT THE REQUIREMENTS STATED WERE NOT BASED UPON A BONA FIDE DETERMINATION OF THE NEEDS OF THE GOVERNMENT. THE EXERCISE OF SUCH DISCRETION IS VESTED IN THE PROCUREMENT OFFICIALS OF THE GOVERNMENT AND, IN THE ABSENCE OF BAD FAITH, IS NOT SUBJECT TO JUDICIAL REVIEW. CLEARLY, IN THE ORDERLY CONDUCT OF ITS BUSINESS THE GOVERNMENT MAY NOT BE PLACED IN THE POSITION OF HAVING TO SHARE SUCH AUTHORITY WITH ITS SUPPLIERS.

IN THE CIRCUMSTANCES IT MUST BE CONCLUDED THAT YOUR PROTEST FURNISHES NO PROPER BASIS ON WHICH WE WOULD BE JUSTIFIED IN QUESTIONING THE ACTION TAKEN BY THE MILITARY MEDICAL SUPPLY AGENCY.