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RECONSIDERATION WAS REQUESTED OF OUR DECISION DATED MAY 19. THE BASES FOR YOUR REQUEST FOR RECONSIDERATION ARE SET OUT IN A "PAPER BOOK" DATED JUNE 6. ARE CONSIDERED BELOW IN THE ORDER PRESENTED. 1. "THE INTEGRITY OF THE BIDDING SYSTEM WAS VIOLATED TO PERMIT WESTCLOX SPECIAL PRICE ADVANTAGE.'. YOU STATE THAT WESTCLOX DID NOT INCLUDE IN ITS BID ANY ITEM OF TOOLING COSTS FOR WHICH THE GOVERNMENT WAS TO PAY. THAT NO TOOLING COSTS WERE INCLUDED IN THE RESULTING CONTRACT. THAT SHORTLY AFTER AWARD WESTCLOX WAS AUTHORIZED TO USE GOVERNMENT-OWNED TOOLING AT A REDUCTION IN THE CONTRACT PRICE. A CAREFUL READING OF THE INVITATION PROVISIONS RESPECTING TOOLING ESTABLISHES THAT THE INTENT OF THE PROVISIONS WAS TO REQUIRE TOOLING INFORMATION ONLY AS TO THOSE BIDDERS WHO DESIRED TO SELL THEIR TOOLING TO THE GOVERNMENT AS PART OF THE CONTRACT CONSIDERATION.

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B-145487, OCT. 20, 1961

TO ACTION MANUFACTURING COMPANY:

BY LETTER DATED JUNE 7, 1961, AND SUBSEQUENT CORRESPONDENCE, RECONSIDERATION WAS REQUESTED OF OUR DECISION DATED MAY 19, 1961, DENYING YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO THE WESTCLOX DIVISION OF THE GENERAL TIME CORPORATION UNDER INVITATION FOR BIDS NO. 164-63-61, ISSUED BY THE NAVAL AMMUNITION DEPOT, CRANE, INDIANA, ON JANUARY 23, 1961. THE BASES FOR YOUR REQUEST FOR RECONSIDERATION ARE SET OUT IN A "PAPER BOOK" DATED JUNE 6, 1961, AS SUPPLEMENTED ON SEPTEMBER 8, 1961, AND ARE CONSIDERED BELOW IN THE ORDER PRESENTED.

1. "THE INTEGRITY OF THE BIDDING SYSTEM WAS VIOLATED TO PERMIT WESTCLOX SPECIAL PRICE ADVANTAGE.'

YOU STATE THAT WESTCLOX DID NOT INCLUDE IN ITS BID ANY ITEM OF TOOLING COSTS FOR WHICH THE GOVERNMENT WAS TO PAY; THAT NO TOOLING COSTS WERE INCLUDED IN THE RESULTING CONTRACT; AND THAT SHORTLY AFTER AWARD WESTCLOX WAS AUTHORIZED TO USE GOVERNMENT-OWNED TOOLING AT A REDUCTION IN THE CONTRACT PRICE. A CAREFUL READING OF THE INVITATION PROVISIONS RESPECTING TOOLING ESTABLISHES THAT THE INTENT OF THE PROVISIONS WAS TO REQUIRE TOOLING INFORMATION ONLY AS TO THOSE BIDDERS WHO DESIRED TO SELL THEIR TOOLING TO THE GOVERNMENT AS PART OF THE CONTRACT CONSIDERATION. SEE, IN PARTICULAR, THE FOLLOWING LANGUAGE ON PAGE 3 OF THE INVITATION.

"A LIST OF ALL TOOLING FOR WHICH THE GOVERNMENT

IS TO PAY WILL BE SUBMITTED WITH THE BID.'

IT ALSO SHOULD BE NOTED THAT THE "SPECIAL TOOLING" CLAUSE MADE A PART OF THE INVITATION AND ANY RESULTING CONTRACT THEREUNDER HAS REFERENCE ONLY TO SPECIAL TOOLING FURNISHED A CONTRACTOR WHEN THE COST IS LESS THAN THE COST OF THE CONTRACTOR ACQUIRING OR FURNISHING NEW SPECIAL TOOLING. HENCE, THE INVITATION PROVISIONS AND THE REGULATIONS CONTAINED IN PART 13, SUBPART C, ASPR, WERE NOT FOR CONSIDERATION IN THE EVALUATION OF BIDS UNDER THE INVITATION, BUT INSTEAD, WERE FOR CONSIDERATION IN THE EVENT IT WAS DETERMINED TO BE IN THE GOVERNMENT'S INTEREST TO FURNISH SPECIAL TOOLING TO A CONTRACTOR SUBJECT TO AN EQUITABLE PRICE ADJUSTMENT. SEE SECTION 13- 301, ASPR.

AS YOU STATE, PAGE 10 OF THE INVITATION CONTAINED A PROVISION ENTITLED "GOVERNMENT OWNED PROPERTY IN BIDDER'S POSSESSION," TO THE FOLLOWING EFFECT:

"/B) IF THE BIDDER PLANS TO USE, IN PERFORMING THE WORK BID UPON, ANY ITEMS OF GOVERNMENT PROPERTY IN THE BIDDER'S POSSESSION UNDER A FACILITIES CONTRACT OR OTHER AGREEMENT INDEPENDENT OF THE INVITATION FOR BIDS, THE BIDDER SHALL SO STATE IN THE BID, AND UPON REQUEST OF THE CONTRACTING OFFICER, SUBMIT EVIDENCE THAT A FACILITIES CONTRACT OR OTHER SEPARATE AGREEMENT AUTHORIZES THE BIDDER TO USE EACH ITEM OF SUCH GOVERNMENT PROPERTY FOR PERFORMING THE WORK BID UPON.'

WHILE YOU CONTEND THAT THE ABOVE INFORMATION WAS NOT SUPPLIED BY WESTCLOX ALTHOUGH IT HELD POSSESSION OF GOVERNMENT-OWNED PROPERTY, THE RECORD SHOWS THAT WESTCLOX DID NOT SUBMIT A BID BASED ON THE USE OF GOVERNMENT EQUIPMENT OR PROPERTY, BUT INSTEAD, BID ON THE BASIS THAT TOOLING COST WAS A PART OF ITS COMPOSITE PRICE. THUS, IT IS OBVIOUS THAT THE ABOVE PROVISION WAS INAPPLICABLE TO THE BID OF WESTCLOX. WE, THEREFORE, CANNOT AGREE THAT THE PROVISION WAS A MATERIAL REQUIREMENT WHICH WENT TO THE SUBSTANCE OF WESTCLOX'S BID SO AS TO AFFECT ITS RESPONSIVENESS. THE PURPOSE OF THE INVITATION PROVISIONS RESPECTING SPECIAL TOOLING WAS TO PLACE ALL BIDDERS ON AN EQUAL BASIS IN EVALUATING BIDS; THAT IS, IT AFFORDED A BASIS OF BID COMPARISON BETWEEN BIDDERS WHO DESIRED TO SHOW AS A SEPARATE ITEM OF COST SPECIAL TOOLING WHICH WOULD BECOME THE PROPERTY OF THE GOVERNMENT AND THOSE WHO DESIRED TO BID A COMPOSITE BID PRICE WITH THE INTENT TO RETAIN TITLE AND POSSESSION OF THEIR OWN TOOLING. CF. 38 COMP. GEN. 508. THE RECORD ESTABLISHES THAT WESTCLOX BID ON THE BASIS OF A COMPOSITE PRICE SINCE THE PURPOSE OF THE CONTRACT AMENDMENT REDUCING THE CONTRACT PRICE BY $36,425.27 WAS TO COMPENSATE THE GOVERNMENT FOR THE SAVINGS WHICH WOULD ACCRUE TO WESTCLOX IN USING GOVERNMENT-OWNED TOOLING IN LIEU OF WESTCLOX-OWNED TOOLING WHICH HAD BEEN INCLUDED AS A COST IN ITS COMPOSITE BID PRICE.

2. "WITH FORETHOUGHT AND ASSIDUITY A PSUEDO-URGENCY WAS CREATED TO ELIMINATE COMPETITION TO WESTCLOX, TO CONTRAVENE THE PREAWARD APPEAL PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION, AND TO INCREASE CONTRACT PRICE TO THE GOVERNMENT.'

IT IS STATED THAT THE PROCUREMENT AGENCY WAS DIRECTED TO PROCEED WITH THE PROCUREMENT ACTION IN NOVEMBER 1960; THAT APPROXIMATELY 60 DAYS WERE CONSUMED PRIOR TO RELEASE OF THE INVITATION FOR BIDS; AND THAT A MINIMUM OF 20 DAYS WAS SPECIFIED FOR THE ACCEPTANCE OF BIDS. THIS IS OFFERED TO ILLUSTRATE THAT THE PROCUREMENT AGENCY PURPOSELY DELAYED THE PROCUREMENT ACTION TO ELIMINATE COMPETITION TO WESTCLOX'S BID. FURTHER, IT IS ALLEGED THAT ONLY THROUGH PRIVATE CENSURE WAS THE PROCUREMENT AGENCY FORCED TO REALIZE THAT THE ORIGINAL PREPRODUCTION AND PRODUCTION DELIVERY SCHEDULES RESULTED IN A FLAGRANT ADVANTAGE TO WESTCLOX.

WE AGREE THAT 60 DAYS WERE CONSUMED FROM THE TIME THE PROGRAM DIRECTIVE WAS RECEIVED TO THE DATE THE INVITATION WAS ISSUED. HOWEVER, WE FEEL IT IS NECESSARY TO REVIEW THE ACTIONS TAKEN DURING THIS PERIOD.

ON NOVEMBER 14, 1960, THE TECHNICAL BRANCH (CENTRAL AMMUNITION SUPPLY AND CONTROL ORGANIZATION) RECEIVED THE PROGRAM DIRECTIVE AUTHORIZING THE PROCUREMENT OF THE MARK 188 AND MARK 191 FUZES. THE TECHNICAL BRANCH IS CHARGED WITH THE RESPONSIBILITY OF PREPARING THE PROCUREMENT REQUEST ,TECHNICAL PACKAGE.' TO PREPARE THE "TECHNICAL PACKAGE" REQUIRES NUMEROUS TIME-CONSUMING OPERATIONS INCLUDING THE ORDERING FROM AN OFF-STATION SOURCE LISTS OF DRAWINGS, DRAWINGS, SPECIFICATIONS, AND ORDNANCE CLASSIFICATION OF DEFECTS. APPROXIMATELY TWO WEEKS WERE REQUIRED TO OBTAIN THESE DOCUMENTS DURING WHICH TIME THE TECHNICAL BRANCH WAS PERFORMING ALL OF THE ADMINISTRATIVE ACTIONS IN CONNECTION WITH THE PROCUREMENT REQUEST. UPON RECEIPT OF THE LISTS OF DRAWINGS, DRAWINGS, SPECIFICATIONS, AND ORDNANCE CLASSIFICATION OF DEFECTS, THESE DOCUMENTS WERE ,CHECKED OUT" TO INSURE THAT EACH WAS THE LATEST REVISION OR WAS ACCOMPANIED BY THE LATEST NOTICE OF CHANGE. APPROXIMATELY 200 DOCUMENTS(LISTS OF DRAWINGS, DRAWINGS, AND SPECIFICATIONS) WERE ASSEMBLED IN THE "TECHNICAL PACKAGE" FOR DISTRIBUTION TO EACH PROSPECTIVE BIDDER. THE PROCUREMENT REQUEST WAS THEN DIRECTED TO THE PURCHASE BRANCH VIA THE COMPTROLLER WHO REVIEWED THE COMMITMENT AND APPROVED THE FUNDING.

ON DECEMBER 12, 1960, THE PROCUREMENT BRANCH RECEIVED THE PROCUREMENT REQUEST INVOLVED HERE AND, IN CONSIDERATION OF A RECOMMENDATION BY TECHNICAL PERSONNEL, CONCLUDED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED BY NEGOTIATING THE PURCHASE WITH ONLY THOSE FIRMS KNOWN TO HAVE EXPERIENCE IN SIMILAR TYPES OF FUZES AND HAVING FACILITIES NECESSARY TO MEET THE REQUIRED DELIVERY DATES AS IMPOSED BY THE REQUIREMENTS ACTIVITY (BUREAU OF NAVAL WEAPONS).

ON DECEMBER 22, 1960, THE CONTRACTING OFFICER RELEASED A REQUEST FOR AUTHORITY TO NEGOTIATE TO THE CHIEF OF NAVAL MATERIAL VIA THE BUREAU OF SUPPLIES AND ACCOUNTS REQUESTING AUTHORITY TO PURCHASE THE MARK 188 AND MARK 191 ZUNI FUZES BY NEGOTIATING WITH FIVE FIRMS DETERMINED TO POSSESS THE EXPERIENCE FOR SIMILAR TYPE FUZING AND THE FACILITIES NECESSARY TO MEET THE REQUIRED DELIVERY DATES. HOWEVER, ON JANUARY 9, 1961, THE BUREAU OF SUPPLIES AND ACCOUNTS RETURNED THE REQUEST FOR AUTHORITY TO NEGOTIATE, SUGGESTING THAT THE CONTRACTING OFFICER CONSIDER PURCHASE OF ALL OR PART OF THE MARK 188 AND MARK 191 FUZES BY FORMAL ADVERTISING SINCE A MINIMUM OF FIVE FIRMS WERE POTENTIAL SUPPLIERS. THEREAFTER, THE CONTRACTING OFFICER DETERMINED ON JANUARY 13, 1961, TO PROCURE THE REQUIREMENT BY FORMAL ADVERTISING AND A PROCUREMENT INTENT NOTICE WAS DIRECTED TO THE DEPARTMENT OF COMMERCE FOR INCLUSION IN THE SYNOPSIS OF PROPOSED PROCUREMENTS. THE PURPOSE OF THIS ACTION WAS TO INSURE THAT ALL POTENTIAL SUPPLIERS WERE AFFORDED AN OPPORTUNITY TO BID AND TO PERMIT THE CONTRACTING OFFICER TO VERIFY SECURITY CLEARANCES FOR EACH FIRM REQUESTING THE BID PACKAGE PRIOR TO RELEASE OF THE INVITATION FOR BIDS.

THE 20-DAY "BID ACCEPTANCE PERIOD" PROVIDED IN THE INVITATION WAS THE MINIMUM NUMBER OF DAYS CONSIDERED NECESSARY TO PERFORM ALL OF THE ADMINISTRATIVE ACTIONS REQUIRED PRIOR TO THE AWARD OF A CONTRACT IN VIEW OF THE FACT THAT A COMPLETE PREAWARD SURVEY WOULD BE REQUIRED PRIOR TO AWARD OF A CONTRACT TO A NEW SUPPLIER. ACTION OFFERED A PERIOD OF 30 DAYS WITHIN WHICH TO ACCEPT THEIR BID.

YOU ALLEGE THAT THE ORIGINAL PREPRODUCTION AND DELIVERY SCHEDULE OF THE INVITATION WAS A FLAGRANT DEMONSTRATION OF THE PROCUREMENT AGENCY'S INTENT TO AWARD THE PROCUREMENT TO WESTCLOX, AND ONLY WHEN IT WAS OBSERVED THAT PREPRODUCTION SAMPLE DELIVERY WAS REQUIRED TWO DAYS SUBSEQUENT TO THE EXPIRATION OF THE MINIMUM ACCEPTANCE PERIOD DATE, THE PROCUREMENT AGENCY REVISED THE PREPRODUCTION AND PRODUCTION DELIVERY BY EXTENDING BOTH DATES ONE MONTH. BASED UPON THE ASSUMPTION THAT THE PROCUREMENT WOULD BE NEGOTIATED AND WITH THE PROBABILITY OF RELEASING A REQUEST FOR PROPOSALS ON APPROXIMATELY JANUARY 1, THE ORIGINAL PROCUREMENT REQUEST ESTABLISHED DATES FOR SUBMISSION OF PREPRODUCTION SAMPLES AS MARCH 15 FOR ITEM 1, AND THROUGH AN OVERSIGHT, NO DATE WAS ESTABLISHED FOR SUBMISSION OF PREPRODUCTION SAMPLES FOR ITEM 2. FOR THE SAME REASON, THE PRODUCTION SCHEDULE WAS ESTABLISHED AS JULY 31 AND JUNE 30 FOR ITEMS 1 AND 2, RESPECTIVELY. NO EXCUSE, PUBLIC OR OTHERWISE, WAS GIVEN FOR THE REVISION IN THE DELIVERY SCHEDULES, HOWEVER, THE ERROR WAS AN OVERSIGHT ON THE PART OF THE COMPOSER OF THE INVITATION FOR BIDS AND NOT A TYPOGRAPHICAL ERROR AS ALLEGED.

AT THIS JUNCTURE, WE FIND IT NECESSARY TO REVIEW THE EVENTS SUBSEQUENT TO THE OPENING OF BIDS ON FEBRUARY 21, 1961, ESPECIALLY AS THEY PERTAIN TO ERROR MADE IN THE PREPARATION OF YOUR BID. THE BIDS WERE ABSTRACTED AS FOLLOWS:

TABLE

ITEM 1 ITEM 2

ACTION MFG. CO. (ALL OR NONE) $23.10 $ 7.60

WESTCLOX DIV. 8.49 27.13

REDM CORP. 8.44 27.84

LONGINE WITTNAUER 8.7971 31.8363

ASTROTHERM CORP. 11.23 35.09

THE LIONEL CORP. 12.85 39.90

ELGIN MICROMICS 14.141 37.914

REDM AND ACTION WERE THE ONLY BIDDERS TO SUBMIT SEPARATE BIDS ON SPECIAL TOOLING FOR ITEMS 1 AND 2.

IN VIEW OF THE DISPARITY OF THE ITEM PRICES QUOTED BY YOUR FIRM AS COMPARED WITH THE OTHER BIDS SUBMITTED, VERIFICATION OF YOUR BID PRICES WERE REQUESTED. ON FEBRUARY 27, 1961, YOU ALLEGED ERROR IN BID IN THAT YOUR UNIT PRICES FOR ITEMS 1 AND 2 WERE INVERTED AND REAFFIRMED YOUR "ALL OR NONE" BID. IT IS YOUR POSITION THAT THE DELAY OF 16 DAYS FROM THE DATE OF BID OPENING TO THE DATE OF REQUEST FOR PREAWARD SURVEY (MARCH 9, 1961), IS NOT CHARGEABLE TO ACTION SINCE, UNDER SECTION 2-406.2, ASPR, THE CONTRACTING OFFICER COULD HAVE CORRECTED THE ERROR AS AN "APPARENT CLERICAL MISTAKE.' SINCE THE INVITATION PERMITTED AWARD BY ITEM OR BY LOT --- ITEMS 1 AND 2 TOGETHER--- YOUR BID AS SUBMITTED WAS NOT THE LOWEST RECEIVED ON AN ITEM BY ITEM BASIS.

OUR OFFICE HAS LIMITED THE CLASS OF CASES WHEREIN A CONTRACTING OFFICER MAY PERMIT BID CORRECTION IF ALLEGED OR CONFIRMED PRIOR TO AWARD AND THE ERROR INVOLVED IS APPARENT ON THE FACE OF THE BID. THOSE CASES ARE:

1. DECIMAL POINT ERRORS (17 COMP. GEN. 339).

2. OBVIOUS DISCOUNT ERRORS (17 COMP. GEN. 493).

3. OBVIOUS REVERSAL OF PRICE F.O.B. DESTINATION AND PRICE F.O.B.

FACTORY (16 COMP. GEN. 999).

4. OBVIOUS ERROR IN DESIGNATION OF UNIT (17 COMP. GEN. 841).

5. EXTENTION OF UNIT PRICES (18 COMP. GEN. 1003).

THE GENERAL RULE IS THAT A CONTRACTING OFFICER HAS NO AUTHORITY TO CORRECT A MISTAKE IN AN ALL OR NONE BID WHEN TO DO SO WOULD DISPLACE OTHERWISE LOW BIDDERS ON AN ITEM BY ITEM BASIS. THIS IS SPECIFICALLY RECOGNIZED IN SECTION 2-406.3 (A) (3), ASPR, WHICH REQUIRES THAT A MISTAKE OF THAT TYPE BE REFERRED TO THE DEPARTMENT FOR DETERMINATION, AS IN THE CASE HERE, BY THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS (SECTION 2-406.3 (B) (2) ASPR). CONSIDERING THAT THE INVITATION CONTEMPLATED EITHER AN ALL OR NONE AWARD OR SEPARATE ITEM AWARDS, IT WAS INCUMBENT ON THE CONTRACTING OFFICER TO SUBMIT YOUR ALLEGATION OF ERROR TO THE DEPARTMENT FOR DETERMINATION. HENCE, WE FIND NO BASIS TO RECEDE FROM OUR PREVIOUS POSITION IN THE MATTER OF BID ERROR. IN THIS CONNECTION, WE ARE ADVISED THAT THE PROCUREMENT AGENCY HAS NO KNOWLEDGE THAT WESTCLOX PROTESTED AGAINST ANY AWARD TO ACTION.

IT IS PERTINENT TO POINT OUT HERE, IN VIEW OF YOUR DETAILED ALLEGATIONS OF DELAYS ON THE PART OF THE PROCUREMENT AGENCY TO DETERMINE THE LOWEST RESPONSIBLE BIDDER UNDER THE INVITATION, THAT THE MILITARY PROCUREMENT STATUTE CODIFIED AT 10 U.S.C. 2305 WAS NOT INTENDED TO VEST IN AN OTHERWISE LOW BIDDER AN UNQUALIFIED, VESTED RIGHT TO AWARD OF THE CONTRACT. AS THE COURTS HAVE STATED MANY TIMES, THE LAWS GOVERNING THE ADVERTISING AND AWARD OF PUBLIC CONTRACTS WERE ENACTED FOR THE BENEFIT AND PROTECTION OF THE GOVERNMENT AND NO BIDDER ACQUIRES ENFORCEABLE RIGHTS UNTIL THE VALID ACCEPTANCE OF HIS OFFER BY A PROPERLY AUTHORIZED REPRESENTATIVE OF THE GOVERNMENT. PERKINS V. LUKENS STEEL CO., 310 U.S. 113; FRIEND V. LEE, 221 F.2D 96; O-BRIEN V. CARNEY, 6 F.SUPP. 761. HENCE, WHILE THE LAPSE OF TIME INVOLVED IN EFFECTING AN AWARD UNDER THE INVITATION OPERATED TO YOUR DISADVANTAGE IN THAT THE DELIVERY REQUIREMENTS BECAME URGENT, THE FACT THAT THE PROCUREMENT AGENCY FOUND IT NECESSARY, IN THEIR CONSIDERED JUDGMENT, TO PURSUE THE MATTER OF YOUR RESPONSIBILITY FURTHER TO THE END THAT IT WAS FINALLY DETERMINED THAT YOU WERE NOT RESPONSIBLE, CASTS NO DOUBTS, IN OUR OPINION, ON THE LEGALITY OF THE AWARD AS MADE. THE REQUIREMENTS OF THE PROCUREMENT STATUTE (10 U.S.C. 2305 (C) ( THAT "AWARDS SHALL BE MADE * * * TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED" ARE MANDATORY AS A MATTER OF LAW.

CONCERNING THE "RESPONSIBILITY" OF PROSPECTIVE CONTRACTORS, THE AUTHORITIES ARE IN AGREEMENT THAT THE OFFICERS IN WHOM THE POWER IS VESTED TO DETERMINE "RESPONSIBILITY" MUST DETERMINE THE FACT AND SUCH DETERMINATION CANNOT BE SET ASIDE UNLESS THE ACTION WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT. THE DETERMINATION OF WHO IS THE LOWEST RESPONSIBLE BIDDER IS THAT OF THE AUTHORIZED OFFICIAL OF THE CONTRACTING AGENCY WHO IS REQUIRED TO ACT FAIRLY UPON REASONABLE INFORMATION WHICH SUPPORTS THE DETERMINATION MADE. AND WHEN SUCH OFFICIAL DETERMINES THE RESPONSIBILITY OF A BIDDER, SUCH DETERMINATION CANNOT BE OVERTHROWN BY THE COURTS OR OUR OFFICE UNLESS IT CAN BE HELD THAT THE DETERMINATION WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT. SEE MCQUILLIN, MUNICIPAL CORPORATIONS, 3RD EDITION, VOLUME 10, SECTION 29.73 AND THE CASES THERE CITED; 38 COMP. GEN. 131; 33 ID. 549; BROWN V. PHOENIX, 272 P.2D 358; MCNICHOLS V. DENVER, 274 P.2D 317. THUS, THE ONLY QUESTION FOR CONSIDERATION IS WHETHER THE DETERMINATION ADMINISTRATIVELY MADE OF YOUR NONRESPONSIBILITY MET THE CRITERIA DISCUSSED ABOVE.

RECOGNIZING THAT INITIALLY THE PROCUREMENT AGENCY HAD BEFORE IT A FAVORABLE PREAWARD SURVEY OF YOUR CAPABILITIES AND THAT A SECOND PREAWARD SURVEY--- REQUESTED BY THE CONTRACTING OFFICER BECAUSE OF THE INCOMPLETENESS OF THE FIRST--- WAS ADVERSE TO YOUR STATUS AS A RESPONSIBLE PROSPECTIVE CONTRACTOR, WE MUST CONSIDER WHETHER SUCH FACTS AND OTHER RELATED FACTS BEARING UPON THE ULTIMATE DECISION TO MAKE AWARD TO WESTCLOX REASONABLY JUSTIFIED THE ELIMINATION OF ACTION AS A RESPONSIBLE PROSPECTIVE CONTRACTOR AND THE AWARD TO WESTCLOX.

ASPR, 1-902 PROVIDES THAT CONTRACTS SHALL BE AWARDED ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS. A RESPONSIBLE PROSPECTIVE CONTRACTOR MUST (QUOTING FROM ASPR, 1-903.1 (III) ( "BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY OR PERFORMANCE SCHEDULE.' ASPR, 1-904.1 FURTHER PROVIDES THAT NO CONTRACT SHALL BE AWARDED UNLESS IT IS SUPPORTED BY AN AFFIRMATIVE DETERMINATION BY THE CONTRACTING OFFICER THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE WITHIN THE MEANING OF SECTIONS 1-902 AND 1-903. IN MAKING SUCH DETERMINATION, THE CONTRACTING OFFICER IS REQUIRED TO HAVE IN HIS POSSESSION OR OBTAIN INFORMATION SUFFICIENT TO SATISFY HIMSELF THAT A PROSPECTIVE CONTRACTOR CURRENTLY MEETS THE STANDARDS OF SECTION 1 903. HERE, THE CONTRACTING OFFICER REQUESTED A SECOND PREAWARD SURVEY TO ASCERTAIN ACTION'S CAPABILITIES TO PERFORM IN ACCORDANCE WITH THE ADVERTISED DELIVERY SCHEDULES. THAT PREAWARD SURVEY WAS NEGATIVE. WE MAY NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER IN CONCLUDING THAT ACTION WAS NONRESPONSIBLE AND THAT WESTCLOX WAS THE LOWEST RESPONSIBLE BIDDER. NEITHER DO WE FIND THAT THE DETERMINATION WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT OR THAT THERE WAS A LACK OF REASONABLE FACTUAL BASES FOR SUCH DETERMINATION. WE MUST OF NECESSITY CONSIDER THE MATTER OF RESPONSIBILITY AS IT EXISTED DURING THE PERIOD OF BID EVALUATION. THE FACT THAT IN RETROSPECT THE DELIVERY SCHEDULES SHOULD HAVE BEEN ADJUSTED TO REFLECT THE EXTENT OF BIDDERS' ACCEPTANCE PERIODS AND ADMINISTRATIVE DELAYS IN MAKING AN AWARD DOES NOT, IN OUR OPINION, AFFECT THE LEGALITY OF AWARD. TO ATTEMPT TO RECONCILE THE DEFICIENCIES REPORTED BY ACTION IN PROCESSING BID EVALUATIONS WHICH RELATED TO ADMINISTRATIVE, AS DISTINGUISHED FROM SUBSTANTIVE, MATTERS WOULD OPEN THE DOOR TO TIME-CONSUMING REVIEWS OF BID EVALUATION PROCEDURES WHEREIN THERE WERE ALLEGED FAILURES TO CONFORM FOURSQUARE TO PROCEDURAL REQUIREMENTS NOT AFFECTING PER SE THE LEGALITY OF THE AWARD CONSUMMATED.

WE FIND NO FACTUAL BASIS TO QUESTION THE CERTIFICATE OF URGENCY ISSUED UNDER SECTION 1-705.6 (B) (A), ASPR, WHICH HAD THE EFFECT OF EXCEPTING THE PROCUREMENT FROM THE USUAL CERTIFICATE OF COMPETENCY PROCEDURES FOLLOWED WHERE BIDS OF SMALL BUSINESS CONCERNS ARE ADMINISTRATIVELY REJECTED FOR LACK OF COMPETENCY AS TO CAPACITY OR CREDIT AND REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR DETERMINATION AS TO WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED. DURING THE PRESENT NATIONAL EMERGENCY, WE DO NOT BELIEVE THAT IT IS WITHIN THE PROVINCE OF OUR OFFICE TO QUESTION A MILITARY DETERMINATION THAT MILITARY SUPPLIES ARE URGENTLY REQUIRED. VIEW THEREOF, WE REGARD THE CERTIFICATE OF URGENCY AS CONSTITUTING A PROCUREMENT ACTION WHICH WE HAVE NO AUTHORITY TO QUESTION.

IN ORDER THAT YOU MIGHT BE FULLY APPRISED WITH RESPECT TO THIS ACTION, THERE IS QUOTED BELOW THE CERTIFICATION OF THE CONTRACTING OFFICER DATED APRIL 4, 1961:

"I, A. W. TODD, JR., LT.SC.USN, CONTRACTING OFFICER, U.S. NAVAL AMMUNITION DEPOT, CRANE, INDIANA, DO HEREBY IN ACCORDANCE WITH THE PROVISIONS OF ASPR 1-705.6 (B) (A) CERTIFY THAT THE PURCHASE OF THE MARK 191 AND 188 ZUNI FUZES APPLICABLE TO NAD CRANE INVITATION FOR BIDS IFB-164 -63-61 MUST BE MADE WITHOUT DELAY TO INSURE DELIVERY OF THE MARK 191 ZUNI FUZES TO LOADING ACTIVITIES AND THE MARK 188 ZUNI FUZES TO THE FLEET AS SCHEDULED. THE REQUIRED 15 APRIL 1961 DELIVERY DATE FOR PRE-PRODUCTION SAMPLES OF BOTH THE MARK 188 AND MARK 191 FUZES AND THE PRODUCTION DATE OF 31 JULY 1961 HAVE BEEN VERIFIED BY THE REQUIREMENTS ACTIVITIES (CENTRAL AMMUNITION SUPPLY AND CONTROL ORGANIZATION), CNO LETTER OP-50C/JBM SERIAL 08430 P50 OF 21 JUNE 1960 AND BUWEPS REQUEST FOR REAPPORTIONMENT OPM OF 3 OCTOBER 1960. MR. ROBERT ROSS OF THE SMALL BUSINESS ADMINISTRATION OFFICE, INDIANAPOLIS, INDIANA HAS BEEN ADVISED BY THE CONTRACTING OFFICER CONCERNING THIS ACTION.

"THE FUZES IN QUESTION, NAMELY THE MARK 191 BASE FUZE AND THE MARK 188 NOSE FUZE, ARE USED IN THE GENERAL PURPOSE WARHEAD FOR THE 5.0 INCH FOLDING FIN AIRCRAFT ROCKET (ZUNI). THIS ROCKET IS THE ONLY SATISFACTORY AIR-TO-GROUND ROCKET FOR AIR SUPPORT OF GROUND TROOPS COMPATIBLE WITH NAVY HIGH PERFORMANCE JET AIRCRAFT. ALL MARINE CORPS SQUADRONS AND THE GREAT MAJORITY OF NAVY SQUADRONS FOR AIR-GROUND SUPPORT ARE EQUIPPED WITH THIS TYPE AIRCRAFT. CURRENT AND PROJECTED STOCKS OF THE ZUNI ROCKET, INCLUDING THE PROCUREMENT IN QUESTION, PROVIDE ONLY A RELATIVELY SMALL PERCENTAGE OF THE NAVY'S REQUIREMENT TO MEET THE READINESS POSITION NECESSARY. CONSEQUENTLY, ANY DELAY IN DELIVERY OF THESE FUZES WOULD DELAY DELIVERY OF COMPLETE ROCKETS READY FOR ISSUE TO THE FLEET AND CORRESPONDINGLY JEOPARDIZE OUR DEFENSE READINESS POSTURE.

"IT SHOULD BE NOTED THAT EITHER OF THESE FUZES IS ONLY ONE OF SEVERAL MAJOR COMPONENTS REQUIRED TO PRODUCE A ROCKET FOR ISSUE. DELAY IN DELIVERY OF THESE COMPONENTS WOULD HAVE THE FOLLOWING DELETERIOUS EFFECTS:

"A. MAKE MEETING OF DELIVERY DATES OF OTHER COMPONENTS INCONSEQUENTIAL.

"B. DISRUPT AND DELAY EXPLOSIVE LOADING AND ASSEMBLY SCHEDULES AT NAVAL AMMUNITION DEPOTS AND THE CONSEQUENT DISRUPTION OF PLANNED WORK SCHEDULES.

"C. HAVE A SIMILAR EFFECT ON WORK SCHEDULES AT TESTING ACTIVITIES.

"EVERYONE IS AWARE OF THE PAST AND CURRENT UNEASINESS IN THE WORLD INTERNATIONALLY MAKING IT INCUMBENT UPON US TO BE AS READY AS POSSIBLE TO COMBAT ALL SITUATIONS. THE CHIEF OF NAVAL OPERATIONS CONSIDERED IN THE FALL OF 1960 THAT IMPROVING THE STOCK POSITION OF THE ZUNI ROCKET WAS OF SUFFICIENT IMPORTANCE TO REPROGRAM $13.5 MILLION FROM THE AIRCRAFT AND MISSILE APPROPRIATION INTO THE PROPER APPROPRIATION SPECIFICALLY FOR PROCUREMENT OF ZUNI ROCKETS. THIS WAS DONE FULLY BELIEVING THAT THIS WAS A FERTILE AREA WHERE WE COULD MOST ADVANTAGEOUSLY AND EXPEDITIOUSLY IMPROVE OUR READINESS POSTURE.'

WE CANNOT AGREE THAT THE ACTIONS TAKEN BY THE PROCUREMENT AGENCY WERE INCONSISTENT WITH THE URGENCY OF THE PROCUREMENT. THE TIME CONSUMED IN THESE PROCUREMENT STEPS WAS NOT TAKEN, AS YOU IMPLY, TO ELIMINATE YOUR FIRM FROM COMPETITION OR TO ASSURE AWARD TO WESTCLOX. THE VARIOUS ACTIONS TAKEN SUBSEQUENT TO BID OPENING WERE DICTATED BY REGULATION FOR THE PURPOSE OF ASSURING THAT A VALID AWARD WOULD BE MADE PURSUANT TO STATUTE WITHOUT DOING VIOLENCE TO THE INTERESTS OF ALL COMPETING BIDDERS.

WHILE IN RETROSPECT IT APPEARS THAT THE PROCUREMENT AGENCY COULD HAVE POSSIBLY EXPEDITED THE BID EVALUATION PROCESS SO AS TO PERMIT THE SMALL BUSINESS ADMINISTRATION TO DETERMINE YOUR COMPETENCY, WE ARE UNABLE TO CONCLUDE THAT YOU WERE DELIBERATELY AND PURPOSELY EXCLUDED FROM AWARD BY THE PROCUREMENT AGENCY. ALTHOUGH WE DO RECOGNIZE THAT THE INVITATION AS ISSUED AND YOUR BID SUBMITTED IN RESPONSE THERETO OPERATED, BECAUSE OF THE DELAYS INVOLVED IN DETERMINING WHETHER YOUR BID SHOULD BE CORRECTED AND WHETHER THEREAFTER YOU WERE A RESPONSIBLE PROSPECTIVE CONTRACTOR, TO YOUR DETRIMENT, WE CANNOT HOLD THAT THE ACTIONS TAKEN WITH RESPECT TO YOUR BID WERE SUCH AS TO CONSTITUTE THE REJECTION OF YOUR BID AS ILLEGAL. WE NOTE ALSO YOUR COMMENTS ON THE ADVERTISED DELIVERY SCHEDULE; THE FAILURE OF THE INVITATION TO SPECIFY A CONTEMPLATED DATE OF AWARD, AND THE CIRCUMSTANCES OF THE DELAYS INCIDENT TO AWARD, BUT WE ARE UNABLE TO CONCLUDE THAT THE AWARD AS MADE WAS ILLEGAL.

3. "THE PROCUREMENT AGENCY ACCEPTED AS RESPONSIVE THE BID OF WESTCLOX WITH KNOWLEDGE THAT A REPLY HAD NOT BEEN MADE TO A MATERIAL REQUIREMENT OF THE INVITATION.'

IN SUBSTANTIATION OF THIS ALLEGATION, REFERENCE IS MADE TO THE PROVISION ON PAGE 10 OF THE INVITATION, ENTITLED "GOVERNMENT OWNED PROPERTY IN BIDDER'S POSSESSION," QUOTED ABOVE. THE RECORD ESTABLISHES THAT WESTCLOX DID NOT PLAN TO USE GOVERNMENT-OWNED TOOLING AT THE TIME THEY SUBMITTED THEIR BID. IN A LETTER DATED FEBRUARY 17, 1961, ACCOMPANYING THEIR BID, WESTCLOX ADVISED THE CONTRACTING OFFICER THAT IT HAD MADE A CONSIDERABLE CAPITAL INVESTMENT IN TOOLING OF THE TYPE REQUIRED FOR PRODUCTION. HAVE BEEN ADVISED THAT WESTCLOX HAD ABOUT $126,000 IN TOOLING NECESSARY TO PRODUCE THE ITEMS AND THAT OF SUCH AMOUNT $90,000 WAS THE PROPERTY OF WESTCLOX. THIS IS BORNE OUT BY THE FACT THE CONTRACT WITH WESTCLOX WAS AMENDED TO PROVIDE FOR A $46,431.43 REDUCTION IN PRICE IN CONSIDERATION FOR THE ELIMINATION OF PREPRODUCTION SAMPLES AND THE FURNISHING OF GOVERNMENT-OWNED SPECIAL TOOLING. HENCE, SINCE A RESPONSE TO THE ABOVE- QUOTED PROVISION WAS REQUIRED ONLY IF THE USE OF GOVERNMENT PROPERTY WAS CONTEMPLATED AT THE TIME OF BID SUBMISSION, THE FAILURE OF WESTCLOX TO RESPOND WAS NOT A MATERIAL DEVIATION FROM THE INVITATION REQUIREMENTS. SEE 30 COMP. GEN. 179.

4. "THE PROCUREMENT AGENCY EXTENDED THE TIME FOR PREPRODUCTION PERFORMANCE TO WESTCLOX WITHOUT LEGAL JUSTIFICATION.'

HERE IT IS ALLEGED THAT WESTCLOX HAD ALLOWED 60 DAYS, OR UNTIL APRIL 22, FOR GOVERNMENT ACCEPTANCE AND THAT SINCE THE APRIL 4 TARGET DATE WAS PRIOR THERETO WESTCLOX WAS NOT ENTITLED TO AN EXTENSION OF THE DELIVERY SCHEDULES. AS A RESULT, THE PREPRODUCTION DELIVERY DATE OF APRIL 15, AS SHOWN IN THE INVITATION, SHOULD NOT HAVE BEEN EXTENDED FOR WESTCLOX BY THE SAME PERIOD OF 12 DAYS GIVEN ACTION.

WESTCLOX AT NO TIME WAS AFFORDED AN ADDITIONAL 12 DAYS FOR DELIVERY OF PREPRODUCTION SAMPLES, AS ALLEGED. ALTHOUGH IT WAS COMMON KNOWLEDGE THAT WESTCLOX COULD, WITHOUT DOUBT, MEET THE REQUIRED PREPRODUCTION DELIVERY DATE OF APRIL 15, 1961, THE PROCUREMENT AGENCY OBTAINED FROM THE INSPECTOR OF NAVAL MATERIAL, CHICAGO, ILLINOIS, CONFIRMATION OF THE FACT THAT WESTCLOX COULD MEET THE DELIVERY REQUIREMENTS UTILIZING CONTRACTOR-OWNED SPECIAL TOOLING. THIS PARTICULAR REQUIREMENT ON THE PART OF THE CONTRACTING OFFICER WAS TO INSURE THAT ALL BIDS WOULD BE EVALUATED ON AN EQUAL BASIS; THAT THE AVAILABILITY OF GOVERNMENT-OWNED TOOLING WOULD NOT IN ANY MANNER ENHANCE THE POSITION OF WESTCLOX IN MEETING THE REQUIRED PREPRODUCTION DELIVERY DATE, AND THAT PREPRODUCTION DELIVERIES WOULD BE BASED COMPLETELY UPON THE USE OF CONTRACTOR-OWNED TOOLING.

5. "THE PROCUREMENT AGENCY DISPLAYED EXTRAORDINARY ZEAL TO ASCERTAIN THE PRODUCTIVE CAPABILITY OF ACTION AND TO CONCEAL THE INCAPABILITY OF WESTCLOX TO MEET THE REQUIRED PREPRODUCTION HEDULE.'

HERE IT IS ALLEGED THAT THE PROCUREMENT AGENCY DID NOT GIVE EQUAL TREATMENT TO THE PREAWARD SURVEYS OF ACTION AND WESTCLOX IN THAT THE FAVORABLE PREAWARD SURVEY OF WESTCLOX WAS ACCEPTED AT FACE VALUE WHEREAS THE INITIAL PREAWARD SURVEY FINDING ACTION TO BE A RELIABLE SOURCE WAS CHALLENGED AND A SECOND PREAWARD SURVEY WAS REQUESTED.

UNDER SECTION 1-905.4 (D), NAVY PROCUREMENT DIRECTIVES, THE CONTRACTING OFFICER DEEMED IT ADVISABLE AND NECESSARY TO REAPPRAISE ACTION'S RESPONSIBILITY; NAMELY, THE ABILITY TO DELIVER PREPRODUCTION SAMPLES AND, AS BORNE OUT IN THE SECOND SURVEY, ACTION WAS FOUND NOT ABLE TO SATISFY THIS REQUIREMENT. SUBSEQUENT TO A MARCH 28, 1961, FAVORABLE PREAWARD SURVEY BY THE INSPECTOR OF NAVAL MATERIAL, CHICAGO, THE CONTRACTING OFFICER ON MARCH 28 AND 30, 1961, REQUESTED FURTHER INFORMATION FROM THE INSPECTOR OF NAVAL MATERIAL AS TO WHETHER WESTCLOX COULD MEET THE PREPRODUCTION DELIVERY REQUIREMENTS IMPOSED BY THE INVITATION UTILIZING CONTRACTOR-OWNED SPECIAL TOOLING. ON APRIL 3, 1961, THE INSPECTOR OF NAVAL MATERIAL, CHICAGO, WAS REQUESTED BY THE CONTRACTING OFFICER TO RE- EVALUATE THE POSITION OF WESTCLOX WITH SPECIFIC REFERENCE TO THE DELIVERY OF PREPRODUCTION SAMPLES BY THE REQUIRED DELIVERY DATE USING CONTRACTOR- OWNED TOOLING. INSMAT, CHICAGO, RECONFIRMED WESTCLOX'S ABILITY TO MEET THE PREPRODUCTION DELIVERY UTILIZING CONTRACTOR-OWNED TOOLING.

IT IS FURTHER ALLEGED THAT NO INFORMATION WAS REQUESTED AS TO THE PERIOD REQUIRED TO DELIVER PREPRODUCTION SAMPLES USING THE ALTERNATE ALUMINUM FORGING FOR A COMPONENT OF ITEM 1 AS PROPOSED IN THE BID OF WESTCLOX.

WE ARE ADVISED THAT FORGED ALUMINUM FOR THE PARTICULAR COMPONENT OF THE MARK 188 FUZES IS NOT AN ALTERNATE BID. THERE WAS NO PROVISION IN THE APPLICABLE DRAWING PROVIDING FOR THE MANNER IN WHICH THE COMPONENT WAS TO BE FABRICATED, THE ONLY REQUIREMENT BEING THAT THE PHYSICAL SPECIFICATIONS FOR THIS PARTICULAR COMPONENT BE MET, AND IT WAS DETERMINED BY THE TECHNICAL BRANCH THAT THE PHYSICAL SPECIFICATIONS COULD MORE ADEQUATELY BE MET BY FORGING OF THIS PARTICULAR ALUMINUM COMPONENT THAN BY MACHINING IT FROM MILL STOCK AS APPARENTLY HAD BEEN THE PRACTICE UNDER PAST CONTRACTS. WHETHER WESTCLOX COULD MEET THE REQUIRED PREPRODUCTION DELIVERY UTILIZING A FORGED ALUMINUM COMPONENT WAS OF NO CONCERN TO THE CONTRACTING OFFICER SINCE WESTCLOX HAD AN AMPLE SUPPLY OF THIS PARTICULAR COMPONENT WITH WHICH TO MEET THE PREPRODUCTION DELIVERIES WHICH WERE MACHINED AND WHICH WOULD MEET THE SPECIFICATION REQUIREMENTS.

6. "THE PROCUREMENT AGENCY CONCEALED THE INABILITY OF WESTCLOX TO MAKE TIMELY DELIVERY OF THE PRE-PRODUCTION SAMPLES, WHICH WAS USED AS THE SOLE EXCUSE TO DISQUALIFY ACTION.'

WE BELIEVE THAT THIS ALLEGATION IS SUFFICIENTLY COVERED BY CHARGE "5" ABOVE.

7. "THE CONTRACT TO WESTCLOX WAS AMENDED BY SUPPLEMENTAL AGREEMENT SO AS TO DIFFER IN SUBSTANCE FROM THE INVITATION FOR BID.'

IT IS FUNDAMENTAL THAT A GOVERNMENT CONTRACT MAY BE AMENDED TO PROVIDE FOR CHANGES DEEMED NECESSARY AND APPROPRIATE AND FOR AN EQUITABLE ADJUSTMENT TO COVER SUCH CHANGES. CERTAINLY, THE ELIMINATION OF A USELESS CONTRACT REQUIREMENT AT A SAVINGS TO THE GOVERNMENT WAS A PROPER EXERCISE OF CONTRACT ADMINISTRATION. THE AMENDMENT COMPLAINED OF RESULTED IN NO MATERIAL BENEFIT TO WESTCLOX, RATHER, IT ACCELERATED PERFORMANCE BY AN EXPERIENCED PRODUCER OF MILITARY SUPPLIES URGENTLY NEEDED AT A CONSIDERABLE SAVING TO THE GOVERNMENT.

IT IS NOT DENIED THAT A WAIVER OF THE PREPRODUCTION REQUIREMENT WOULD BE A MATERIAL ADVANTAGE TO A CONTRACTOR WHO HAS PREVIOUSLY SUCCESSFULLY MANUFACTURED THE ITEM, PROVIDED THAT THE CONTRACTOR HAS KNOWLEDGE PRIOR TO SUBMITTING ITS BID THAT THE PREPRODUCTION SAMPLE REQUIREMENT WILL BE WAIVED. THE INVITATION IN THIS CASE CLEARLY ESTABLISHES THAT PREPRODUCTION SAMPLES WOULD BE REQUIRED OF ANY SUCCESSFUL BIDDER. WESTCLOX'S BID WAS PREDICATED UPON THE WAIVER OF PREPRODUCTION SAMPLES, THIS IS A RISK THAT WAS ASSUMED BY WESTCLOX IN THAT THE PROCUREMENT AGENCY AT NO TIME PRIOR TO AWARD INDICATED IN ANY MANNER THAT THE REQUIREMENT OF PREPRODUCTION SAMPLES WOULD BE WAIVED. WE FEEL THAT THE WAIVER OF PREPRODUCTION SAMPLES SUBSEQUENT TO AWARD IS NOT OPEN TO QUESTION. SINCE IT HAS BEEN ESTABLISHED THAT WESTCLOX COULD MEET THE PREPRODUCTION DELIVERY, A REQUIREMENT TO FURNISH PREPRODUCTION SAMPLES WOULD RESULT IN A NEEDLESS EXPENDITURE OF APPROXIMATELY $35,000, APPROXIMATELY $10,000 OF WHICH WOULD BE EXPENDED IN PREPRODUCTION FUZE SAMPLES ALONE AND AN ADDITIONAL APPROXIMATE $25,000 WOULD BE EXPENDED TO COMPLETE THE BALLISTIC TEST FIRING WHICH NECESSITATES THE FIRING OF A COMPLETE ZUNI ROCKET, I.E., ROCKET, MOTOR, WARHEAD, AND THE FUZING.

8. "THE PROCUREMENT AGENCY DEMONSTRATED A LACK OF GOOD FAITH AND REASONABLE FACTUAL BASIS FOR THE DETERMINATION THAT ACTION WAS INCAPABLE OF MAKING DELIVERY WITHIN THE TIME SET FORTH IN THE INVITATION FOR BID.'

WE FEEL THAT THIS ALLEGATION HAS BEEN ADEQUATELY ANSWERED.

IN CONCLUSION, WE WISH TO ADVISE THAT WESTCLOX WAS TWO MONTHS AHEAD OF CONTRACT SCHEDULE IN JULY 1961 IN THAT THE CONTRACTOR HAD DELIVERED 13,434 MARK 188 FUZES AND 10,090 MARK 191 FUZES. THE INSPECTOR OF NAVAL MATERIAL ALSO HAS ADVISED THAT AN ADDITIONAL 4,416 UNITS OF ITEM 1 AND 5,000 UNITS OF ITEM 2 WERE SCHEDULED FOR SHIPMENT ON AUGUST 10 AND 17, 1961, RESPECTIVELY.

ACCORDINGLY, OUR DECISION OF MAY 19, 1961, DENYING YOUR PROTEST IS AFFIRMED.

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