B-174875, APR 21, 1972

B-174875, APR 21, 1972

BID PROTEST - ALLEGED CONDITIONAL OFFER - IMPROPER EVALUATION DECISION DENYING THE PROTEST OF SERVOTRONICS, INC., AGAINST THE PROPOSED AWARD OF A CONTRACT TO HERRAMIENTAS COLLINS S.A. (COLLINS) UNDER AN IFB ISSUED BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION, FOR A QUANTITY OF MACHETES. THE COMP. GEN. CANNOT AGREE THAT THE COLLINS BID WAS CONDITIONAL SINCE IT MERELY OFFERED AN ALTERNATE BID IF DUTY WAS FOUND TO BE INAPPLICABLE. FURTHER, IT APPEARS THAT THE ADJUSTMENT OF THE BID PRICE WAS CORRECT PURSUANT TO THE EVALUATION FORMULA CONTAINED IN GSA PROCUREMENT REGULATION 5A-6.104(D). FOR THE FOREGOING REASONS, THE PROTEST IS DENIED.

TO SERVOTRONICS, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 4, 1972, CONTAINING YOUR PROTEST AGAINST THE PROPOSED AWARD OF A CONTRACT TO HERRAMIENTAS COLLINS S.A. (COLLINS) UNDER INVITATION FOR BIDS (IFB) FPNTP-A9-39953-A 11-30-71, DATED OCTOBER 28, 1971, ISSUED BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION, FOR A DEFINITE QUANTITY OF MACHETES.

THE SOLICITATION CALLED FOR A TOTAL QUANTITY OF 58,608 MACHETES (ITEMS 1(A) THROUGH 1(C)) AND THE BID OPENING WAS SCHEDULED FOR DECEMBER 17, 1972. PRIOR TO BID OPENING ON DECEMBER 17, A TELEGRAM WAS RECEIVED FROM COLLINS STATING AS FOLLOWS:

"WE HEREBY MODIFY QUOTATION *** MACHETES UNIT PRICE 1.20 (ONE DOLLAR TWENTY CENTS) *** . THIS PRICE INCLUDES TWENTY CENTS PER UNIT OF DUTY *** . IF NO DUTIES APPLICABLE ORIGINAL QUOTATION WILL HOLD."

THE COLLINS BID AS SUBMITTED QUOTED A UNIT PRICE OF $1. THE GENERAL SERVICES ADMINISTRATION (GSA) DETERMINED THAT THERE WAS NO DUTY ON THE ITEM AND EVALUATED THE BID IN ACCORDANCE WITH SECTION 406, PUBLIC LAW 92- 49, JULY 9, 1971, THE "INDEPENDENT AGENCIES APPROPRIATION ACT, 1972," WHICH STATES IN PART:

"NO PART OF ANY APPROPRIATIONS CONTAINED IN THIS ACT SHALL BE AVAILABLE FOR THE PROCUREMENT OF OR FOR THE PAYMENT OF THE SALARY OF ANY PERSON ENGAGED IN THE PROCUREMENT OF ANY HAND OR MEASURING TOOLS) NOT PRODUCED IN THE UNITED STATES OR ITS POSSESSIONS EXCEPT TO THE EXTENT THAT THE ADMINISTRATOR OF GENERAL SERVICES OR HIS DESIGNEE SHALL DETERMINE THAT A SATISFACTORY QUALITY AND SUFFICIENT QUANTITY OF HAND OR MEASURING TOOLS PRODUCED IN THE UNITED STATES OR ITS POSSESSIONS CANNOT BE PROCURED AS AND WHEN NEEDED FROM SOURCES IN THE UNITED STATES AND ITS POSSESSIONS OR EXCEPT IN ACCORDANCE WITH PROCEDURES PRESCRIBED BY SECTION 6-104.4(B) OF ARMED SERVICES PROCUREMENT REGULATION DATED JANUARY 1, 1969, AS SUCH REGULATION EXISTED ON JUNE 15, 1970. THIS SECTION SHALL BE APPLICABLE TO ALL SOLICITATIONS FOR BIDS OPENED AFTER ITS ENACTMENT."

ARMED SERVICES PROCUREMENT REGULATION (ASPR) SECTION 6-104.4(B), NOTED ABOVE, READS IN PART AS FOLLOWS:

"EACH FOREIGN BID SHALL BE ADJUSTED FOR PURPOSES OF EVALUATION EITHER BY EXCLUDING ANY DUTY FROM THE FOREIGN BID AND ADDING 50 PERCENT OF THE BID (EXCLUSIVE OF DUTY) TO THE REMAINDER, OR BY ADDING TO THE FOREIGN BID (INCLUSIVE OF DUTY) A FACTOR OF 6 PERCENT OF THAT BID, WHICHEVER RESULTS IN THE GREATER EVALUATED PRICE, EXCEPT THAT A 12 PERCENT FACTOR SHALL BE USED INSTEAD OF THE 6 PERCENT FACTOR IF (I) THE FIRM SUBMITTING THE LOW ACCEPTABLE DOMESTIC BID IS A SMALL BUSINESS CONCERN, OR A LABOR SURPLUS AREA CONCERN, OR BOTH, (II) SMALL PURCHASE PROCEDURES (SEE SECTION III, PART 6) ARE NOT USED, AND (III) ANY CONTRACT AWARD TO A DOMESTIC CONCERN WHICH WOULD RESULT FROM APPLYING THE 12 PERCENT FACTOR, BUT WHICH WOULD NOT RESULT FROM APPLYING THE 6 PERCENT OR 50 PERCENT FACTOR, WOULD NOT EXCEED $100,000."

GSA PROCUREMENT REGULATION 5A-6.104(D) CONTAINS A SIMILAR PROVISION FOR EVALUATION OF BIDS. BASED ON THE APPLICABLE REGULATION GSA EVALUATED THE COLLINS BID AT $1.50 PER UNIT. YOUR BID WAS $1.58 PER UNIT.

YOU CONTEND, FIRST, THAT THE COLLINS BID AS MODIFIED BY THE TELEGRAM, WAS CONDITIONAL AND THEREFORE SHOULD NOT BE ACCEPTED AND THAT EVEN IF IT IS ACCEPTABLE IT SHOULD BE EVALUATED AT $1.20 PER UNIT PLUS 50 PERCENT FOR A TOTAL OF $1.80 PER UNIT. WE DO NOT AGREE THAT THE COLLINS BID IS CONDITIONAL. THE COLLINS TELEGRAM DOES NOT IMPOSE ANY CONDITIONS ON THE ACCEPTANCE OF THE BID, BUT MERELY OFFERS AN ALTERNATE BID IF DUTY IS APPLICABLE. SINCE DUTY WAS NOT APPLICABLE, THE BID WAS CORRECTLY EVALUATED AT $1 PER UNIT PLUS 50 PERCENT, OR $1.50 PER UNIT. EVALUATION ON THE ALTERNATE BASIS WITH DUTY WOULD, OF COURSE, HAVE RESULTED IN A LOWER FIGURE.

YOU ALSO CONTEND THAT THERE IS AN "APPARENT LOOPHOLE IN THE 'BUY AMERICAN' CONCEPT." YOU GIVE AN EXAMPLE OF AN EVALUATION OF A FOREIGN BID OF $2.00, INCLUDING $1.00 DUTY, AND STATE THAT THIS BID WOULD BE EVALUATED AT $1.50, TO THE PREJUDICE OF AMERICAN MANUFACTURERS. ACCORDING TO ASPR 6 -104.4(B) A CORRECT EVALUATION OF THIS BID WOULD RESULT IN AN ADJUSTED FOREIGN BID PRICE OF $2.12, ($2.00 PLUS A 6 PERCENT ADJUSTMENT FACTOR ASSUMING THE 12 PERCENT ADJUSTMENT FACTOR DOES NOT APPLY). THIS COMPUTATION IS BASED UPON THE ASPR FORMULA WHICH PROVIDES FOR THE HIGHER EVALUATION PRICE WHEREAS YOU APPARENTLY USED THE ASPR FORMULA WHICH RESULTS IN THE LOWER EVALUATION PRICE.

BASED ON THE REASONS PRESENTED ABOVE, YOUR PROTEST IS DENIED.