B-166661, JUL. 9, 1969

B-166661, JUL. 9, 1969

TO JAY BEE CORPORATION:

ON APRIL 8, 1969, YOU PROTESTED THE AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAK01-69-R-5257, ISSUED ON FEBRUARY 24, 1969, BY THE ARMY MOBILITY EQUIPMENT COMMAND TO FULFILL A REQUIREMENT FOR 48,356 MAGNETIC COMPASSES. THE REQUIREMENT WAS ASSIGNED AN 02 PRIORITY UNDER THE UNIFORM MATERIEL MOVEMENT AND ISSUE PRIORITY SYSTEM, AND THE RFP WAS INITIATED PURSUANT TO 10 U.S.C. 2304 (A) (2) AND THE FOLLOWING PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION:

"3-202 PUBLIC EXIGENCY.

"3-202.1 AUTHORITY. PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304 (A) (2) PURCHASES AND CONTRACTS MAY BE NEGOTIATED IF -- -THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING.-

"3-202.2 APPLICATION. IN ORDER FOR THE AUTHORITY OF THIS PARAGRAPH 3-202 TO BE USED, THE NEED MUST BE COMPELLING AND OF UNUSUAL URGENCY, AS WHEN THE GOVERNMENT WOULD BE SERIOUSLY INJURED, FINANCIALLY OR OTHERWISE, IF THE SUPPLIES OR SERVICES WERE NOT FURNISHED BY A CERTAIN DATE, AND WHEN THEY COULD NOT BE PROCURED BY THAT DATE BY MEANS OF FORMAL ADVERTISING. WHEN NEGOTIATING UNDER THIS AUTHORITY, COMPETITION TO THE MAXIMUM EXTENT PRACTICABLE, WITHIN THE TIME ALLOWED, SHALL BE OBTAINED. THE FOLLOWING ARE ILLUSTRATIVE OF CIRCUMSTANCES WITH RESPECT TO WHICH THIS AUTHORITY MAY BE USED:

* * * * * * * "/VI) PURCHASE REQUEST CITING AN ISSUE PRIORITY DESIGNATOR 1 THROUGH 6, INCLUSIVE, UNDER THE UNIFORM MATERIEL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) (NOTE: REQUIREMENTS CITING AN ISSUE PRIORITY DESIGNATOR 7 THROUGH 20 MAY JUSTIFY NEGOTIATION UNDER THIS OR OTHER NEGOTIATION AUTHORITY, BUT IN SUCH CASES THE SPECIFIC CIRCUMSTANCES MUST BE SET FORTH IN THE DETERMINATION AND FINDINGS.); * * *.'

AFTER PROPOSALS WERE RECEIVED FROM YOUR COMPANY AND THE UNION INSTRUMENT CORPORATION ON MARCH 11, THE CLOSING DATE FOR RECEIPT OF PROPOSALS, THE CONTRACTING OFFICER TELEPHONED YOU ON MARCH 12 AND STATED THAT HE HAD RECEIVED A DIRECTIVE INCREASING THE REQUIREMENT BY 25,000 UNITS AND THEREFORE WAS REQUESTING REVISED PROPOSALS FROM ALL OFFERORS ON A TOTAL QUANTITY OF 73,356 ITEMS. YOU INDICATED THAT A FINAL PRICE ON THIS QUANTITY COULD BE FURNISHED BY THE FOLLOWING DAY, AND ON MARCH 13 THE PROCURING ACTIVITY RECEIVED YOUR FINAL OFFER, ALONG WITH ONE TENDERED BY THE UNION INSTRUMENT CORPORATION WHICH WAS THE ONLY OTHER OFFEROR. SINCE UNION INSTRUMENT SUBMITTED THE LOWEST PRICE OFFER FOR THIS QUANTITY AND AS ITS PROPOSAL WAS CONSIDERED SUFFICIENT IN ALL OTHER RESPECTS, AN AWARD WAS CONCLUDED WITH THE COMPANY ON MARCH 28, 1969.

IN ADDITION TO YOUR PRICE ON THE QUANTITY SPECIFIED, YOUR PROPOSAL OFFERED TO FURNISH 96,000 COMPASSES AT A LOWER UNIT PRICE THAN THE AMOUNT QUOTED BY UNION INSTRUMENT FOR 73,356 COMPASSES. SINCE THE GOVERNMENT HAD NEITHER A FIRM REQUIREMENT NOR ALLOTED FUNDS SUFFICIENT TO PROCURE 96,000 COMPASSES, THE DEPARTMENT CONCLUDED THAT AN AWARD COULD NOT BE MADE ON THE BASIS OF YOUR ALTERNATE OFFER.

YOU CONTEND THAT THE GOVERNMENT COULD HAVE ACCEPTED YOUR ALTERNATE PROPOSAL, BASED ON A QUANTITY OF 96,000 COMPASSES, SINCE YOU POINT OUT THAT THE ARMY ISSUED AN INVITATION FOR BIDS (IFB) ON MARCH 13 FOR AN ESTIMATED REQUIREMENT OF 40,000 UNITS OF THE COMPASSES IN ACCORD WITH ASPR 3-409.2 (A), QUOTED IN PERTINENT PART AS FOLLOWS:

"3-409.2 REQUIREMENTS CONTRACTS.

(A) DESCRIPTION. THIS TYPE OF CONTRACT PROVIDES FOR FILLING ALL ACTUAL PURCHASE REQUIREMENTS OF SPECIFIC SUPPLIES OR SERVICES OF DESIGNATED ACTIVITIES DURING A SPECIFIED CONTRACT PERIOD WITH DELIVERIES TO BE SCHEDULED BY THE TIMELY PLACEMENT OF ORDERS UPON THE CONTRACTOR BY ACTIVITIES DESIGNATED EITHER SPECIFICALLY OR BY CLASS. DEPENDING ON THE SITUATION, THE CONTRACT MAY PROVIDE FOR (I) FIRM FIXED PRICES, (II) PRICE ESCALATION, OR (III) PRICE REDETERMINATION. AN ESTIMATED TOTAL QUANTITY IS STATED FOR THE INFORMATION OF PROSPECTIVE CONTRACTORS, WHICH ESTIMATE SHOULD BE AS REALISTIC AS POSSIBLE. THE ESTIMATE MAY BE OBTAINED FROM THE RECORDS OF PREVIOUS REQUIREMENTS AND CONSUMPTION, OR BY OTHER MEANS. CARE SHOULD BE USED IN WRITING AND ADMINISTERING THIS TYPE OF CONTRACT TO AVOID IMPOSITION OF AN IMPOSSIBLE BURDEN ON THE CONTRACTOR. * * *" YOU APPARENTLY ASSUME THAT THE ARMY COULD HAVE AWARDED YOU A CONTRACT FOR 96,000 UNITS UNDER THE SUBJECT RFP BY DEDUCTING 22,644 UNITS FROM THE ESTIMATED QUANTITY LISTED UNDER THE IFB AND ADDING THIS QUANTITY TO THE 73,356 UNITS SET FORTH IN THE RFP. THE DEPARTMENT MAINTAINS THAT IT COULD NOT HAVE ACTED IN THIS MANNER BECAUSE IT DID NOT HAVE A FIRM REQUIREMENT FOR UNITS IN EXCESS OF THE 73,356 COMPASSES, LISTED IN THE RFP, NOR DID IT HAVE SUFFICIENT FUNDS ALLOTTED TO MAKE AN AWARD UNDER YOUR ALTERNATE PROPOSAL, WHICH WOULD HAVE VIOLATED THE STRICTURES SET FORTH IN SECTIONS 3732 AND 3679, REVISED STATUTES, AS AMENDED, CODIFIED IN 41 U.S.C. 11; 31 ID. 665 (A), RESPECTIVELY, IN PERTINENT PART AS FOLLOWS:

"NO CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES SHALL BE MADE, UNLESS THE SAME IS AUTHORIZED BY LAW OR IS UNDER AN APPROPRIATION ADEQUATE TO ITS FULFILLMENT * * *.

"NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL MAKE OR AUTHORIZE AN EXPENDITURE FROM OR CREATE OR AUTHORIZE AN OBLIGATION UNDER ANY APPROPRIATION OR FUND IN EXCESS OF THE AMOUNT AVAILABLE THEREIN; NOR SHALL ANY SUCH OFFICER OR EMPLOYEE INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION, FOR THE PAYMENT OF MONEY FOR ANY PURPOSE, IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE, UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW.'

IN THE LIGHT OF THE REPORT, AND CONSIDERING ALSO THAT AWARD UNDER THE IFB FOR THE REQUIREMENTS CONTRACT WOULD NOT OBLIGATE THE GOVERNMENT TO PURCHASE ANY COMPASSES, WE CANNOT CONCLUDE THAT IT WAS IMPROPER FOR THE DEPARTMENT TO MAKE AN AWARD ON THE BASIS OF 73,356 UNITS, THE QUANTITY ON WHICH BIDS WERE INVITED.

THE OTHER GROUNDS OF YOUR PROTEST MAY BE SUMMARIZED AS FOLLOWS: (1) WHEN THE CONTRACTING OFFICER NOTIFIED YOU OF THE MODIFICATION INCREASING THE REQUIREMENT OF COMPASSES FROM 48,356 TO 73,356 COMPASSES, HE FAILED TO SPECIFY THE DELIVERY DESTINATION FOR THE ADDITIONAL ITEMS, AND THEREFORE MADE IT IMPOSSIBLE FOR YOU TO CALCULATE THE TRANSPORTATION CHARGE TO INCLUDE IN THE END ITEM PRICE FOR THIS INCREMENT, AND THAT A FORMAL AMENDMENT TO THE RFP SHOULD HAVE BEEN ISSUED CONTAINING SUCH INFORMATION; (2) INSUFFICIENT TIME WAS ALLOWED FOR YOU TO MAKE WRITTEN REQUESTS AS TO THE INTERPRETATION OF RFP PROVISIONS; (3) THE RFP REQUIREMENT SHOULD HAVE BEEN DIVIDED TO PERMIT DUPLICATE AWARDS; (4) THE AWARD UNDER THE RFP SHOULD HAVE BEEN MADE TO YOUR COMPANY, EVEN THOUGH IT WAS NOT THE LOWEST BIDDER, BECAUSE YOUR CONCERN IS A PROVEN PRODUCER OF THE SUBJECT ITEMS, UNLIKE UNION INSTRUMENT COMPANY.

WITH RESPECT TO YOUR FIRST CONTENTION THE DEPARTMENT HAS ADVISED US THAT WHEN YOU WERE INFORMED OF THE SUBSTANTIAL INCREASE OF CONTRACT REQUIREMENTS ON MARCH 12, 1969, YOU DID NOT INDICATE THAT YOU WOULD EXPERIENCE ANY DIFFICULTY IN SUBMITTING A REVISED PROPOSAL BY MARCH 13. IN THIS PERSPECTIVE THE FAILURE OF THE PROCURING ACTIVITY TO ISSUE A FORMAL WRITTEN AMENDMENT IN THE MANNER PRESCRIBED BY ASPR 3-805.1 (E), WOULD APPEAR TO BE OF MINOR IMPORTANCE, ESPECIALLY IN VIEW OF THE URGENCY OF THE PROCUREMENT, UNLESS SUCH FAILURE PREJUDICED CONSIDERATION OF YOUR OFFER. B-159787, OCTOBER 11, 1966. WHILE YOU APPARENTLY MAINTAIN THAT THE PROCURING ACTIVITY'S FAILURE TO ISSUE A FORMAL AMENDMENT AND TO STATE THE SHIPMENT DESTINATION OF THE ADDITIONAL 25,000 COMPASSES, CAUSED YOU TO MISCALCULATE THE SHIPPING CHARGE FOR THE ITEMS TO YOUR DISADVANTAGE, WE NOTE THAT YOU PROPOSED TO SHIP ITEM 0001 (24,990 ITEMS -- DESTINATION -- LATHROP, CALIFORNIA) AT THE SAME PRICE YOU PROPOSED FOR ITEM 0002 (23,356 ITEMS -- DESTINATION - SAN ANTONIO, TEXAS) SO THAT IT IS HIGHLY QUESTIONABLE WHETHER YOUR PRICE FOR SHIPPING THE 25,000 ADDITIONAL ITEMS WOULD HAVE VARIED IF YOU HAD BEEN INFORMED OF THE SPECIFIC SHIPPING DESTINATION, SINCE THE RFP RESTRICTED SHIPMENT TO ONE OF THE DEPOTS LISTED ABOVE. WE THEREFORE BELIEVE THE FAILURE TO ISSUE A FORMAL AMENDMENT TO THE RFP IN THE MANNER PRESCRIBED BY REGULATION, AND THE OMISSION OF THE SHIPPING DESTINATION OF THE ADDITIONAL ITEMS, WOULD NOT BE CONSIDERED SO IMPROPER AS TO REQUIRE THIS OFFICE TO HOLD THAT THE SUBJECT CONTRACT WAS AWARDED ILLEGALLY.

WITH RESPECT TO YOUR CONTENTION THAT INSUFFICIENT TIME WAS ALLOWED FOR YOU TO REQUEST INTERPRETATION OF THE RFP PROVISIONS, WE NOTE THAT YOU HAD CONSIDERABLE PRIOR EXPERIENCE IN FURNISHING THE COMPASSES UNDER OTHER ARMY CONTRACTS. BECAUSE OF THIS BACKGROUND, AND INASMUCH AS THE PROCUREMENT BORE AN 02 PRIORITY, WE PRECEIVE NO VALID BASIS FOR QUESTIONING THE TIME ALLOTTED FOR SUBMISSION OF PROPOSALS. B-159849, OCTOBER 24, 1966. DOES NOT APPEAR THAT YOU RAISED ANY QUESTION UPON RECEIPT OF THE ORIGINAL SOLICITATION, AND THE ADMINISTRATIVE REPORT INDICATES THAT YOU MADE NO OBJECTION TO THE TIME ALLOWED FOR THE SUBMISSION OF A PROPOSAL ON THE INCREASED QUANTITY.

YOU ALSO CONTEND THAT THE RFP SHOULD HAVE PROVIDED FOR MULTIPLE AWARDS, INSTEAD OF STIPULATING A SINGLE AWARD, IN ORDER TO BROADEN THE INDUSTRIAL BASE FOR THIS ITEM BY DEVELOPING ADDITIONAL SUPPLIERS. WHETHER THE GOVERNMENT WOULD HAVE PROFITED FROM HAVING TWO SUPPLIERS OF THIS REQUIREMENT IN THE MANNER YOU SUGGEST WAS PRIMARILY A MATTER FOR THE PROCURING AGENCY TO DETERMINE, AND AS THERE ARE AT LEAST TWO INDUSTRIAL SOURCES OF THE ITEM WE MAY NOT DISPUTE ITS FAILURE TO PROVIDE FOR AWARD ON A DUAL SUPPLIER BASIS. IN ANY EVENT YOUR FAILURE TO LODGE A FORMAL PROTEST IN THIS MATTER BEFORE SUBMITTING YOUR OFFER RAISES SUBSTANTIAL DOUBTS AS TO THE SINCERITY OF THIS ASPECT OF YOUR PROTEST.

WITH REGARD TO YOUR COMPLAINT THAT AN AWARD SHOULD HAVE BEEN CONSUMMATED WITH YOU BECAUSE YOU ARE A PROVEN QUALITY PRODUCER OF THE ITEM, UNLIKE JAY BEE CORPORATION, NOTWITHSTANDING THE FACT THAT YOU FAILED TO SUBMIT THE LOWEST PRICE OFFER, THE DEPARTMENT HAS ADVISED US THAT IT DETERMINED THE JAY BEE CORPORATION TO BE A RESPONSIBLE PRODUCER OF THIS ITEM, ON THE BASIS OF A PRE-AWARD SURVEY OF ITS CAPABILITIES AND FACILITIES. IN THE ABSENCE OF ANY OTHER DATA INDICATING THAT JAY BEE'S OFFER WAS DEFICIENT IN SOME OTHER RESPECT, WE FIND NO LEGAL BASIS FOR OBJECTION TO THE CONTRACTING OFFICER'S DETERMINATION THAT AWARD TO UNION INSTRUMENT COMPANY WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.