DECISION SUSTAINING THE WITHHOLDING OF $82 FOR FEDERAL INCOME TAX
PURPOSES FROM THE RELOCATION ALLOWANCES PAID ALFRED J. CARTER INCIDENT
TO A PROPOSED CHANGE OF OFFICIAL STATION AS AN EMPLOYEE OF THE
DEPARTMENT OF THE NAVY.
WHEN RELOCATION ALLOWANCES ARE PAID TO AN EMPLOYEE TO REIMBURSE HIM
FOR THE FORFEITURE OF A PURCHASE DEPOSIT ON A RESIDENCE AT A PROPOSED
NEW OFFICIAL STATION AND FOR LEGAL FEES INCIDENT TO THIS FORFEITURE, THE
AMOUNT REIMBURSED IS A REMUNERATION FOR WHICH NO CORRESPONDING FEDERAL
INCOME TAX DEDUCTION IS ALLOWABLE UNDER 26 U.S.C. 217 BECAUSE THE
EMPLOYEE DID NOT IN FACT MOVE TO THE NEW OFFICIAL STATION OR WORK THERE
FOR AT LEAST 39 WEEKS. THEREFORE, AN AMOUNT REPRESENTING THE TAX ON
THIS REMUNERATION MUST BE WITHHELD AND PAID TO THE INTERNAL REVENUE
SERVICE, 26 U.S.C. 3401(A)(15).
TO MR. ALFRED J. CARTER:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 15, 1972, WHEREIN YOU
APPEAL FROM THE ACTION TAKEN BY OUR TRANSPORTATION AND CLAIMS DIVISION
IN WITHHOLDING $82 FOR FEDERAL INCOME TAX PURPOSES FROM THE RELOCATION
ALLOWANCES WHICH YOU WERE FOUND TO BE ENTITLED TO INCIDENT TO A PROPOSED
CHANGE OF OFFICIAL STATION AS AN EMPLOYEE OF THE DEPARTMENT OF THE NAVY.
YOU STATE THAT THE REIMBURSEMENT FOR THE REAL ESTATE EXPENSES IS A
REFUND OF MONEY EXPENDED BY YOU AND SHOULD NOT BE CONSIDERED AS INCOME.
THEREFORE, YOU QUESTION THE PROPRIETY OF WITHHOLDING $82 FOR FEDERAL
INCOME TAX PURPOSES.
IN THAT CONNECTION WE POINT OUT THAT SECTION 217, TITLE 26, UNITED
STATES CODE, AS AMENDED BY THE TAX REFORM ACT OF 1969, APPROVED DECEMBER
30, 1969, PUBLIC LAW 91-172, 83 STAT. 487, 577, SETS FORTH THE MANNER IN
WHICH MOVING EXPENSES MAY BE DEDUCTED FROM INCOME SO AS NOT TO BE
SUBJECT TO THE WITHHOLDING TAX. SECTION 217 PROVIDES IN PERTINENT PART
AS FOLLOWS:
"(A) DEDUCTION ALLOWED. - THERE SHALL BE ALLOWED AS A DEDUCTION
MOVING EXPENSES PAID OR INCURRED DURING THE TAXABLE YEAR IN CONNECTION
WITH THE COMMENCEMENT OF WORK BY THE TAXPAYER AS AN EMPLOYEE OR AS A
SELF-EMPLOYED INDIVIDUAL AT A NEW PRINCIPAL PLACE OF WORK.
"(C) CONDITIONS FOR ALLOWANCE. - NO DEDUCTION SHALL BE ALLOWED UNDER
THIS SECTION UNLESS -
"(1) THE TAXPAYER'S NEW PRINCIPAL PLACE OF WORK -
"(A) IS AT LEAST 50 MILES FARTHER FROM HIS FORMER RESIDENCE THAN WAS
HIS FORMER PRINCIPAL PLACE OF WORK OR
"(2) EITHER -
"(A) DURING THE 12-MONTH PERIOD IMMEDIATELY FOLLOWING HIS ARRIVAL IN
THE GENERAL LOCATION OF HIS NEW PRINCIPAL PLACE OF WORK, THE TAXPAYER IS
A FULL-TIME EMPLOYEE, IN SUCH GENERAL LOCATION, DURING AT LEAST 39
WEEKS, OR"
SECTION 3401 OF TITLE 26 CONCERNING THE WITHHOLDING OF INCOME TAXES
PROVIDES IN PERTINENT PART THAT:
"(A) WAGES.
"FOR PURPOSES OF THIS CHAPTER, THE TERM 'WAGES' MEANS ALL
REMUNERATION (OTHER THAN FEES PAID TO A PUBLIC OFFICIAL) FOR SERVICES
PERFORMED BY AN EMPLOYEE FOR HIS EMPLOYER, INCLUDING THE CASH VALUE OF
ALL REMUNERATION PAID IN ANY MEDIUM OTHER THAN CASH; EXCEPT THAT SUCH
TERM SHALL NOT INCLUDE REMUNERATION PAID -
"(15) TO OR ON BEHALF OF AN EMPLOYEE IF (AND TO THE EXTENT THAT) AT
THE TIME OF THE PAYMENT OF SUCH REMUNERATION IT IS REASONABLE TO BELIEVE
THAT A CORRESPONDING DEDUCTION IS ALLOWABLE UNDER SECTION 217 ***"
SINCE THE REIMBURSEMENT WHICH YOU RECEIVED AS A RESULT OF THE
SETTLEMENT OF YOUR CLAIM ON SEPTEMBER 20, 1972, WAS FOR THE FORFEITURE
OF THE $400 DEPOSIT ON THE PURCHASE OF A RESIDENCE AT YOUR NEW OFFICIAL
STATION AND FOR $10 LEGAL FEE AND SINCE YOU DID NOT IN FACT MOVE TO YOUR
NEW OFFICIAL STATION OR WORK THERE FOR AT LEAST 39 WEEKS AS REQUIRED BY
SECTION 217(C), THE AMOUNT WHICH YOU WERE REIMBURSED WOULD APPEAR TO BE
A REMUNERATION FOR WHICH A CORRESPONDING DEDUCTION IS NOT ALLOWABLE
UNDER SECTION 217.
ACCORDINGLY, THE ACTION OF OUR TRANSPORTATION AND CLAIMS DIVISION IN
WITHHOLDING THE AMOUNT IN QUESTION MUST BE SUSTAINED.
WE SUGGEST IF YOU HAVE ANY FURTHER QUESTION IN REGARD TO THE MATTER
THAT IT BE TAKEN UP WITH THE INTERNAL REVENUE SERVICE AT THE TIME YOU
FILE YOUR INCOME TAX RETURN FOR 1972. A COPY OF AN INTERNAL REVENUE
SERVICE INSTRUCTION IS ENCLOSED FOR YOUR INFORMATION.
B-176896, JAN 19, 1973
BID PROTEST - STANDARD PRODUCT CLAUSE - RESPONSIBILITY
DECISION DENYING THE PROTEST OF CATERPILLAR TRACTOR COMPANY AGAINST
AWARD OF A CONTRACT TO INTERNATIONAL HARVESTER CO. UNDER AN IFB ISSUED
BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO, FOR
SCRAPER-TRACTORS.
WHERE A BIDDER TAKES NO EXCEPTION TO THE STANDARD PRODUCTS CLAUSE OF
AN IFB, IT IS A QUESTION OF BIDDER RESPONSIBILITY AS TO WHETHER THAT
BIDDER CAN SUPPLY THE PRODUCT IN ACCORDANCE WITH THE IFB, SEE 49 COMP.
GEN. 553, 556 (1970), AND THIS QUESTION CAN BE PROPERLY RESOLVED ON THE
BASIS OF INFORMATION DEVELOPED AFTER BID OPENING. SEE 43 COMP. GEN. 77,
81 (1963).
TO CATERPILLAR TRACTOR COMPANY:
FURTHER REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 29 AND OCTOBER
25, 1972, PROTESTING AGAINST AWARD OF A CONTRACT TO INTERNATIONAL
HARVESTER COMPANY (INTERNATIONAL), UNDER INVITATION FOR BIDS (IFB) NO.
DSA-700-72-B-2668, ISSUED JUNE 5, 1972, BY THE DEFENSE CONSTRUCTION
SUPPLY CENTER (DCSC), COLUMBUS, OHIO.
THE IFB AS AMENDED CALLED FOR A TOTAL QUANTITY OF 15 SCRAPER-TRACTORS
(ITEMS 1 AND 2), PLUS RELATED DATA, AND FIRST ARTICLE TESTING (ITEMS
3-6). THE INVITATION ON PAGE 33 (GENERAL REQUIREMENTS) INCLUDED THE
FOLLOWING CLAUSE:
"STANDARD PRODUCT. THE EQUIPMENT COVERED BY THIS SPECIFICATION,
EXCEPT AS MODIFIED HEREIN, SHALL BE THE MANUFACTURER'S STANDARD
COMMERCIAL PRODUCT INCLUDING ALL STANDARD FEATURES, COMPONENTS AND
ACCESSORIES AS CURRENTLY APPLIED ON THE MANUFACTURER'S STANDARD CURRENT
PRODUCTION UNIT OF TYPE AND SIZE SPECIFIED. THE EQUIPMENT, ALL
COMPONENTS AND ACCESSORIES SHALL CONFORM TO CURRENT ENGINEERING AND
MANUFACTURING PRACTICES RELATIVE TO DESIGN, STRENGTH, QUALITY OF
MATERIALS AND WORKMANSHIP."
FOUR BIDS WERE OPENED ON JULY 21, 1972, AND IT WAS FOUND THAT
INTERNATIONAL WAS THE LOWEST BIDDER ON ALL ITEMS AND THAT THE
CATERPILLAR TRACTOR COMPANY (CATERPILLAR) WAS THE SECOND LOWEST BIDDER.
BY TELEGRAM OF JULY 21, 1972, TO THE CONTRACTING OFFICER YOU CONTENDED
THAT CATERPILLAR WAS THE LOWEST RESPONSIVE BIDDER BECAUSE INTERNATIONAL
DID NOT MEET THE REQUIREMENTS OF THE ABOVE-QUOTED PROVISION. HOWEVER, A
PRE-AWARD SURVEY OF INTERNATIONAL, DATED AUGUST 9, 1972, AS SUPPLEMENTED
ON AUGUST 17, 1972, RECOMMENDED COMPLETE AWARD TO THAT FIRM AND
EXPRESSLY CONCLUDED THAT ITS MODEL 433, WHICH THE SURVEY TEAM DETERMINED
THAT THE BIDDER PROPOSED TO FURNISH, MET THE REQUIREMENTS FOR A
"STANDARD PRODUCT" AS SET FORTH IN THE IFB. ON AUGUST 22, 1972, YOU
WERE INFORMED THAT INTERNATIONAL WAS EVALUATED AS THE LOWEST RESPONSIVE
BIDDER. IN YOUR PROTEST OF AUGUST 29, 1972, TO OUR OFFICE YOU CONTEND
THAT INTERNATIONAL'S BID WAS NOT RESPONSIVE BECAUSE THAT COMPANY DOES
NOT CURRENTLY PRODUCE A COMMERCIAL ITEM WHICH COMPLIES WITH THE
"STANDARD PRODUCT" PROVISION. YOU MAINTAIN THAT MODEL 433 OFFERED BY
INTERNATIONAL IS NOT CURRENTLY IN PRODUCTION AND DIFFERS RADICALLY FROM
ANYTHING CURRENTLY AVAILABLE FROM INTERNATIONAL ON A COMMERCIAL BASIS AS
IT IS INTERNATIONAL'S FIRST ATTEMPT TO MARKET A TANDEM-POWERED, WHEEL
TRACTOR-SCRAPER AND INCORPORATES MAJOR DESIGN CHANGES INCLUDING A NEW
TRANSMISSION, ENGINE, HITCH ARRANGEMENT, AND SCRAPER FRAME. THEREFORE,
YOU CONTEND THAT INTERNATIONAL DID NOT COMPLY WITH THE STANDARD PRODUCTS
CLAUSE WHICH MUST BE PROPERLY INTERPRETED AS REQUIRING THAT THE ITEM BID
UPON MUST BE A COMMERCIAL PRODUCT OF THE TYPE AND SIZE SPECIFIED IN
ACTUAL PRODUCTION AT THE TIME OF BIDDING.
SINCE INTERNATIONAL TOOK NO EXCEPTION TO, OR OTHERWISE MANIFESTED AN
INTENTION IN THE BID NOT TO BE BOUND BY, ANY PROVISION OF THE
SOLICITATION, INCLUDING THE STANDARD PRODUCTS CLAUSE, IT IS OUR VIEW
THAT THE ISSUE IN THE PRESENT CASE IS ONE OF RESPONSIBILITY, THAT IS,
INTERNATIONAL'S CAPABILITY TO PRODUCE AND DELIVER A PRODUCT IN
ACCORDANCE WITH THESE SPECIFICATIONS. SEE 49 COMP. GEN. 553, 556
(1970). THEREFORE, SINCE THE ISSUE IN THE INSTANT CASE INVOLVES THE
MATTER OF A BIDDER'S RESPONSIBILITY, IT MAY PROPERLY BE RESOLVED ON THE
BASIS OF INFORMATION DEVELOPED AFTER BID OPENING. SEE 43 COMP. GEN. 77,
81 (1963). ALSO, WE HAVE HELD THAT WHERE THE QUESTION INVOLVES THE
CAPABILITY OF A PROSPECTIVE CONTRACTOR TO PERFORM IN ACCORDANCE WITH THE
SPECIFICATIONS, THE CRITICAL TIME FOR THE DETERMINATION OF SUCH
CAPABILITY MAY BE AS LATE AS THE TIME SCHEDULED FOR PERFORMANCE OR, IN
THE PRESENT CASE, DELIVERY OF THE EQUIPMENT. 42 COMP. GEN. 532 (1963).
IN REGARD TO THE MATTER OF INTERNATIONAL'S RESPONSIBILITY, DSA POINTS
OUT THAT THE INFORMATION OBTAINED IN BOTH THE ORIGINAL AND SUBSEQUENT
PRE-AWARD SURVEYS CONFIRMS THAT INTERNATIONAL IS CAPABLE OF COMPLYING
WITH THE SPECIFICATIONS, INCLUDING THE STANDARD COMMERCIAL PRODUCT
REQUIREMENT. IN THIS CONNECTION, THE REQUEST TO THE COGNIZANT OFFICE
FOR A PRE-AWARD SURVEY INCLUDED THE SPECIFIC INSTRUCTION TO ASCERTAIN
WHETHER THE EQUIPMENT PROPOSED COMPLIED WITH THE STANDARD PRODUCT
CLAUSE. THE INFORMATION DEVELOPED AND CONFIRMED REVEALED THAT
INTERNATIONAL INTENDED TO FURNISH ITS MODEL 433; THAT THE PROPOSED
EQUIPMENT IS AN UPDATED VERSION OF ITS MODEL 270, WHICH HAD PREVIOUSLY
BEEN SOLD BOTH COMMERCIALLY AND TO THE GOVERNMENT; THAT A PREPRODUCTION
MODEL OF THE 433 WAS MANUFACTURED MORE THAN THREE YEARS PREVIOUSLY;
THAT THE PREPRODUCTION MODEL HAD UNDERGONE THOUSANDS OF HOURS OF
OPERATION AT INTERNATIONAL'S PROVING GROUNDS AND AT A PRIVATE
CONTRACTOR'S JOB SITE; THAT THE DECISION TO RELEASE THE EQUIPMENT
COMMERCIALLY IN NOVEMBER 1972 WAS MADE IN AUGUST 1972; THAT ENGINEERING
DRAWINGS HAVE BEEN RELEASED, ASSEMBLY AREAS PREPARED, PRODUCTION TOOLING
INSTALLED WITH COMPONENTS BEING MANUFACTURED THEREFROM; THAT PRODUCTION
SCHEDULES HAVE BEEN PLANNED, COMMERCIAL MANUALS AND LITERATURE ARE BEING
PREPARED, AND MATERIALS AND COMPONENTS FROM OUTSIDE SOURCES HAVE BEEN
ORDERED, WITH SOME HAVING BEEN DELIVERED AND INVENTORIED; THAT THE
EQUIPMENT WILL BE IN COMMERCIAL USE SEVERAL MONTHS BEFORE THE FIRST
ARTICLE IS DUE 210 DAYS AFTER DATE OF AWARD; AND THAT THE MODEL 433
MEETS OR EXCEEDS THE SPECIFICATIONS IN THE SUBJECT INVITATION.
IN SUPPORT OF YOUR ARGUMENT THAT THE INTERNATIONAL BID MUST BE
REJECTED AS NONRESPONSIVE, YOU HAVE CITED OUR DECISION, B-164885,
JANUARY 15, 1969. ALTHOUGH WE CONCLUDED IN THE CITED CASE THAT A
PROVISION OF THE INVITATION SIMILAR TO THE ONE INVOLVED HERE SHOULD HAVE
REQUIRED REJECTION OF A BID AS NONRESPONSIVE, WE BELIEVE THE CASES ARE
DISTINGUISHABLE. IN THE CITED CASE THE BID IN QUESTION INCLUDED
INFORMATION INDICATING THAT THE BIDDER PROPOSED EXTENSIVE MODIFICATIONS
TO ITS STANDARD MODEL IN ORDER TO CONFORM ITS EQUIPMENT TO THE
SPECIFICATION DESIGN REQUIREMENTS. IN VIEW OF THE MODIFICATIONS
PROPOSED, WE CONCLUDED THAT THE EQUIPMENT DID NOT MEET THE SPECIFICATION
REQUIREMENT FOR A "CURRENT COMMERCIAL MODEL." IN THE INSTANT CASE THERE
WAS NOTHING IN THE BID INDICATING ANY EXCEPTION TO THE REQUIREMENT TO
FURNISH A "STANDARD COMMERCIAL PRODUCT."
IN THESE CIRCUMSTANCES, THERE IS NO LEGAL BASIS FOR OUR OFFICE TO
OBJECT TO THE PROPOSED AWARD.
B-177097, JAN 19, 1973
CIVILIAN PERSONNEL - CHANGE OF OVERSEAS STATIONS HOME LEAVE - DEPENDENT
TRAVEL - TRAVEL EXPENSES - MERITORIOUS CLAIM
CONCERNING THE LEGALITY OF PAYMENT OF CERTAIN TRAVEL EXPENSES TO JOHN
B. CLAYTON, AN EMPLOYEE OF THE DEPARTMENT OF THE ARMY, FT. RICHARDSON,
AK.
IN ORDER FOR AN EMPLOYEE TO BE ELIGIBLE TO RECEIVE AUTHORIZED TRAVEL
EXPENSES IN CONNECTION WITH HOME LEAVE BETWEEN TOURS OF DUTY OUTSIDE THE
CONTINENTAL UNITED STATES, HE MUST HAVE COMPLETED HIS AGREED PERIOD OF
SERVICE OR A MINIMUM OF 12 MONTHS AND ENTERED INTO A NEW WRITTEN
AGREEMENT FOR ANOTHER PERIOD OF SERVICE. OMB CIRCULAR NO. A-56, SEC.
7.1. MOREOVER, TRANSPORTATION EXPENSES ARE NOT AUTHORIZED THE
EMPLOYEE'S IMMEDIATE FAMILY FOR SUCH TRAVEL IF THE EMPLOYEE DOES NOT
RETURN TO THE UNITED STATES WITH THEM TO TAKE SUCH LEAVE. SEE 35 COMP.
GEN. 101 (1955). HOWEVER, SINCE MR. CLAYTON IS NOT AT FAULT AND THE
DEPENDENT'S TRAVEL EXPENSES WERE INCURRED UNDER ORDERS IN EFFECT AT THE
TIME TRAVEL WAS PERFORMED, GAO BELIEVES THIS PART OF THE CLAIM CONTAINS
SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE
CONSIDERATION OF CONGRESS, AND HAS ACCORDINGLY REPORTED IT TO CONGRESS
WITH RECOMMENDATION FOR FAVORABLE CONSIDERATION. 31 U.S.C. 236.
VOLUME 2, PARA. C4005-3H, JTR, REQUIRES A NEW EMPLOYMENT AGREEMENT
WHEN AN EMPLOYEE IS REASSIGNED TO A DIFFERENT OVERSEAS GEOGRAPHICAL
LOCALITY PRIOR TO COMPLETION OF HIS TOUR OF DUTY. THE NEW TOUR OF DUTY
IS TO BE 12 MONTHS OR THE DIFFERENCE BETWEEN THE TOUR OF DUTY AT THE NEW
DUTY STATION, IN THIS CASE, ALASKA, AND THE PERIOD OF SERVICE AT THE OLD
DUTY STATION, WHICH EVER IS GREATER. AT THE END OF SUCH TIME, THE
EMPLOYEE IS ELIGIBLE FOR TRAVEL UNDER OMB CIRCULAR NO. A-56, SEC. 7.1.
TO LT. COL. JOHN F. KENT:
THIS REFERS TO YOUR LETTER OF MARCH 31, 1972, REFERENCE ARAFA,
FORWARDED HERE BY THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE
COMMITTEE ON SEPTEMBER 21, 1972, PDTATAC CONTROL NO. 72-46, REQUESTING A
DECISION ON CERTAIN QUESTIONS PRESENTED PERTAINING TO THE TRAVELING
EXPENSES OF MR. JOHN B. CLAYTON, AN EMPLOYEE OF THE DEPARTMENT OF THE
ARMY, FORT RICHARDSON, ANCHORAGE, ALASKA.
THE INFORMATION OF RECORD SHOWS THAT MR. CLAYTON, AN EMPLOYEE OF THE
DEPARTMENT OF THE ARMY, WAS TRANSFERRED FROM ALASKA TO OKINAWA ARRIVING
AT HIS NEW DUTY STATION AUGUST 23, 1969. AS A RESULT OF THIS MOVE HE
WAS REQUIRED, CONSISTENT WITH PARAGRAPH C 4005-3B OF THE JOINT TRAVEL
REGULATIONS, VOLUME 2, TO NEGOTIATE A TRANSPORTATION AGREEMENT FOR A
24-MONTH PERIOD BEGINNING WITH THE DAY OF HIS ARRIVAL. AFTER SERVING 12
MONTHS LESS 5 DAYS IN OKINAWA MR. CLAYTON WAS TRANSFERRED BY REASON OF
A REDUCTION IN FORCE FROM OKINAWA TO FORT RICHARDSON. THE TRANSFER WAS
PURSUANT TO LETTER ORDERS NUMBER P-579, DATED JULY 9, 1970, WHICH
AUTHORIZED A PERMANENT CHANGE OF STATION IN CONJUNCTION WITH RENEWAL
AGREEMENT TRAVEL. BY THOSE ORDERS THE EMPLOYEE WAS AUTHORIZED,
EFFECTIVE ON OR ABOUT AUGUST 15, 1970, TO VISIT MERIDIAN, MISSISSIPPI,
FOR 30 CALENDAR DAYS INCLUDING TRAVEL TIME ALLOWANCE FOR HOME LEAVE IN
LIEU OF DENTON, TEXAS, WHICH HAD BEEN DESIGNATED AS HIS PLACE OF ACTUAL
RESIDENCE AT THE TIME OF HIS APPOINTMENT WITH THE DEPARTMENT OF THE ARMY
IN 1966, AND UPON COMPLETION OF LEAVE TO PROCEED TO FORT RICHARDSON.
HIS DEPENDENTS WERE AUTHORIZED, EFFECTIVE ON OR ABOUT AUGUST 1, 1970, TO
TRAVEL UNACCOMPANIED AT GOVERNMENT EXPENSE.
TRAVEL WAS PERFORMED BY THE EMPLOYEE DIRECT TO FORT RICHARDSON. MR.
CLAYTON'S DEPENDENTS DID NOT TRAVEL DIRECT TO FORT RICHARDSON BUT, IN
ACCORDANCE WITH THE TRAVEL ORDERS, DEPARTED FROM OKINAWA AUGUST 6, 1970,
AND TRAVELED VIA SAN FRANCISCO, CALIFORNIA, DALLAS, TEXAS, AND MERIDIAN,
MISSISSIPPI, THEN TO FORT RICHARDSON ARRIVING THERE SEPTEMBER 21, 1970.
ON THAT DATE LETTER ORDERS NUMBER P-579 WAS AMENDED BY LETTER ORDERS
NUMBER P-780, DELETING THE AUTHORIZATION FOR HOME LEAVE TRAVEL FOR MR.
CLAYTON AND AUTHORIZED DIRECT TRAVEL TO FORT RICHARDSON INCIDENT TO THE
PERMANENT CHANGE OF STATION. MR. CLAYTON WAS REIMBURSED $1,066.09
INCIDENT TO THE TRAVEL OF HIS DEPENDENTS, PLUS $200 AS A MISCELLANEOUS
EXPENSE ALLOWANCE.
IT IS MR. CLAYTON'S CONTENTION, AS SET FORTH IN HIS STATEMENT DATED
NOVEMBER 1, 1971, THAT THE CIVILIAN PERSONNEL OFFICE (CPO) IN OKINAWA
REFUSED TO ISSUE TRAVEL ORDERS FOR THE DIRECT, CONCURRENT TRAVEL OF HIM
AND HIS DEPENDENTS FROM OKINAWA TO ANCHORAGE, ALASKA, DESPITE HIS
CONSISTENT APPEALS AND INSISTENCES THAT THEY DO SO. HE STATES THAT THE
CPO REPRESENTATIVE ERRONEOUSLY MAINTAINED THAT THERE WAS NO PROVISION
FOR DIRECT TRAVEL TO ALASKA, THAT THE DEPENDENTS MUST GO TO THE
CONTINENTAL UNITED STATES, TAKE LEAVE AND AWAIT TRAVEL ORDERS. HE
FURTHER STATES THAT THE ORIGINAL TRAVEL ORDER, LETTER ORDERS NUMBER 579,
WAS FURNISHED HIM ON JULY 20, 1970, AND ON THAT DATE HE DISCUSSED IT
WITH HIS SUPERIOR, MR. JOSHUA KRAMER, DIRECTOR, COMPTROLLER DEPARTMENT,
USCAR. AT MR. KRAMER'S SUGGESTION A MEMORANDUM WAS PREPARED JULY 22,
1970, EXPLAINING THE DESIRED AMENDMENTS TO THE TRAVEL ORDER. A COPY OF
THIS MEMORANDUM IS IN THE RECORD. THIS WAS ENDORSED BY MR. KRAMER AND
PRESENTED TO THE CPO ON THAT DATE FOR ISSUANCE OF AMENDED ORDERS. THE
ORDERS, IF AMENDED AS REQUESTED, WOULD HAVE PROVIDED FOR DIRECT TRAVEL
OF MR. CLAYTON AND HIS DEPENDENTS TO ANCHORAGE, ALASKA, AND AMONG OTHER
THINGS HAVE DELETED ALL REFERENCE TO RENEWAL AGREEMENT TRAVEL. MR.
CLAYTON WAS NOT ENTITLED UNDER THE APPLICABLE REGULATIONS TO RENEWAL
AGREEMENT TRAVEL AND AN AMENDMENT OF THE ORDERS, AS REQUESTED, WOULD
HAVE CORRECTED THE ERROR MADE ON THE ORIGINAL ORDERS. MR. CLAYTON
STATES THAT CPO REFUSED TO ISSUE AMENDED ORDERS AND AS A RESULT THEREOF
HIS "DEPENDENTS WERE, THROUGH ADMINISTRATIVE ERROR FORCED TO GO TO
DALLAS, TEXAS." MR. CLAYTON, ON THE OTHER HAND AND CONTRARY TO THE
ORIGINAL TRAVEL ORDER WAS PROVIDED COMMERCIAL TRANSPORTATION DIRECTLY TO
ANCHORAGE AND HE STATES, IN THIS RESPECT, THAT HE HAD NO CONTROL OVER
THE ROUTING. AS HEREINABOVE STATED, SUBSEQUENT TO THE ARRIVAL OF MR.
CLAYTON'S DEPENDENTS IN ALASKA THE ORIGINAL TRAVEL ORDERS WERE AMENDED
TO PROVIDE FOR DIRECT TRAVEL FROM OKINAWA TO ALASKA. BECAUSE OF THIS
YOU HAVE RAISED A QUESTION CONCERNING THE PROPRIETY OF THE REIMBURSEMENT
MADE TO MR. CLAYTON, IN THE AMOUNT OF $1,066.09 FOR THE TRAVEL VIA
CONTINENTAL UNITED STATES OF HIS DEPENDENTS.
ADDITIONALLY, YOU HAVE RAISED QUESTIONS RELATING TO TRAVEL PERFORMED
IN 1971. MR. CLAYTON AND HIS DEPENDENTS WERE AUTHORIZED TO PERFORM
RENEWAL AGREEMENT TRAVEL BY TRAVEL ORDER NO. 58-71, DATED APRIL 22,
1971, FROM ALASKA, TO HIS PLACE OF ACTUAL RESIDENCE, DENTON, TEXAS, AND
DEPARTED ALASKA JULY 30, 1971, AND RETURNED AUGUST 14, 1971.
THE SPECIFIC QUESTIONS SUBMITTED ARE AS FOLLOWS:
"A. IS THE PAYMENT OF $1066.09 MADE TO MR. CLAYTON FOR HIS
DEPENDENTS' TRAVEL FROM NAHA, OKINAWA, VIA SAN FRANCISCO, CA; DALLAS,
TX; AND MERIDIAN, MS TO ANCHORAGE, AK BASED ON AMENDATORY ORDERS
AUTHORIZED?
"B. SINCE MR. CLAYTON SERVED 1 YEAR IN OKINAWA AND WAS RETURNED TO
ALASKA (HIS OLD STATION) BECAUSE OF A RIF, IF THE ANSWER TO QUESTION A
IS AFFIRMATIVE, SHOULD HIS RENEWAL AGREEMENT DATE BE CHANGED AND MUST HE
SERVE 2 YEARS IN ALASKA BEFORE ENJOYING A TURNAROUND TRIP?
"C. IF YOUR ANSWER TO QUESTION B IS POSITIVE AND MR. CLAYTON SHOULD
BE REQUIRED TO SERVE 2 YEARS, WHAT IS THE PROPRIETY OF PAYMENTS MADE IN
GOOD FAITH UNDER TRAVEL ORDER 58-71, DATED 22 APR 71, ON VOUCHER NUMBER
401736 AND ANY SUBSEQUENT PAYMENTS INCLUDING GOVERNMENT TRANSPORTATION
REQUESTS ISSUED AFTER THIS DATE?"
IT IS NOTED IN REGARD TO QUESTION "A" THAT ALTHOUGH THE ORDERS ARE
DESCRIBED AS "AMENDATORY," SUCH ORDERS WERE IN FACT THE ORIGINAL ORDERS,
TRAVEL WAS CONSISTENT THEREWITH, AND SUCH ORDERS WERE AMENDED SUBSEQUENT
TO PERFORMANCE OF THE TRAVEL.
5 U.S.C. 5728(A) AUTHORIZES THE EXPENSES OF ROUND-TRIP TRAVEL OF AN
EMPLOYEE AND TRANSPORTATION OF HIS IMMEDIATE FAMILY FROM HIS POST OF
DUTY OUTSIDE THE CONTINENTAL UNITED STATES TO THE PLACE OF HIS ACTUAL
RESIDENCE AT THE TIME OF HIS APPOINTMENT OR TRANSFER TO THE POST OF DUTY
AFTER HE HAS SATISFACTORILY COMPLETED AN AGREED PERIOD OF SERVICE
OUTSIDE THE CONTINENTAL UNITED STATES AND IS RETURNING TO HIS ACTUAL
PLACE OF RESIDENCE TO TAKE LEAVE BEFORE SERVING AT THE SAME OR ANOTHER
POST OF DUTY OUTSIDE THE CONTINENTAL UNITED STATES UNDER A WRITTEN
AGREEMENT MADE BEFORE DEPARTING FROM THE POST OF DUTY.
APPLICABLE REGULATIONS IN SECTION 7.1 OF OFFICE OF MANAGEMENT AND
BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, PROVIDE THAT IN
ORDER TO BE ELIGIBLE TO RECEIVE THE AUTHORIZED TRAVEL AND TRANSPORTATION
EXPENSES IN CONNECTION WITH LEAVE FOR RETURNING TO PLACE OF RESIDENCE
BETWEEN TOURS OF DUTY OUTSIDE THE CONTINENTAL UNITED STATES, THE
EMPLOYEE MUST HAVE (1) COMPLETED THE AGREED PERIOD OF SERVICE AS
PROVIDED IN SECTION 1.3C OF THE CIRCULAR AND (2) ENTERED INTO A NEW
WRITTEN AGREEMENT FOR ANOTHER PERIOD OF SERVICE. SECTION 1.3C OF THE
CIRCULAR REQUIRES AN EMPLOYEE TO REMAIN IN THE SERVICE OF THE GOVERNMENT
FOR A MINIMUM OF 12 MONTHS AT HIS OVERSEAS POST OF DUTY FOLLOWING THE
EFFECTIVE DATE OF HIS TRANSFER OR APPOINTMENT BEFORE HE IS ENTITLED TO
ROUND-TRIP TRAVEL AT GOVERNMENT EXPENSE FOR THE PURPOSE OF TAKING LEAVE
BETWEEN TOURS OF DUTY OUTSIDE THE CONTINENTAL UNITED STATES.
IN SOME CASES WE HAVE NOT OBJECTED TO THE GOVERNMENT TERMINATING
EMPLOYMENT AGREEMENTS WHICH PROVIDE FOR A 2-YEAR TOUR OF DUTY PRIOR TO
THE EXPIRATION DATE WHERE IT IS CONSIDERED FOR THE GOVERNMENT'S BENEFIT
TO DO SO AND AUTHORIZE TRAVEL AT GOVERNMENT EXPENSE FOR HOME LEAVE
PROVIDED THE EMPLOYEE HAS SERVED AT HIS OVERSEAS POST A MINIMUM OF 12
MONTHS PRIOR TO THE TERMINATION. SEE 37 COMP. GEN. 62 (1957). HOWEVER,
THE ABOVE STATUTORY PROVISION DOES NOT AUTHORIZE PAYMENT OF THE
TRANSPORTATION EXPENSES OF THE EMPLOYEE'S IMMEDIATE FAMILY FROM THE
OVERSEAS POST OF DUTY TO ACTUAL PLACE OF RESIDENCE IN THE UNITED STATES
UNLESS THE EMPLOYEE HIMSELF RETURNS TO THE UNITED STATES FOR THE PURPOSE
OF TAKING LEAVE. SEE 35 COMP. GEN. 101 (1955). MR. CLAYTON DID NOT
TRAVEL TO THE UNITED STATES WITH HIS IMMEDIATE FAMILY IN AUGUST 1970 FOR
THE PURPOSE OF TAKING LEAVE AND THEREFORE REIMBURSEMENT TO HIM FOR THE
TRAVEL AND TRANSPORTATION EXPENSES INCURRED BY HIS IMMEDIATE FAMILY WAS
IMPROPER. THE PAYMENT OF A MISCELLANEOUS EXPENSE ALLOWANCE OF $200 WAS
PROPER SINCE A TRANSFER WAS INVOLVED.
YOUR FIRST QUESTION IS ACCORDINGLY ANSWERED IN THE NEGATIVE.
HOWEVER, 31 U.S.C. 236 PROVIDES:
"SEC 236. MERITORIOUS CLAIMS AGAINST UNITED STATES NOT SUBJECT TO
LAWFUL ADJUSTMENT; SUBMISSION TO CONGRESS BY COMPTROLLER GENERAL.
"WHEN THERE IS FILED IN THE GENERAL ACCOUNTING OFFICE A CLAIM OR
DEMAND AGAINST THE UNITED STATES THAT MAY NOT LAWFULLY BE ADJUSTED BY
THE USE OF AN APPROPRIATION THERETOFORE MADE, BUT WHICH CLAIM OR DEMAND
IN THE JUDGMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES CONTAINS
SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE
CONSIDERATION OF THE CONGRESS, HE SHALL SUBMIT THE SAME TO THE CONGRESS
BY A SPECIAL REPORT CONTAINING THE MATERIAL FACTS AND HIS RECOMMENDATION
THEREON."
SINCE IT APPEARS THAT MR. CLAYTON WAS IN NO WAY AT FAULT AND THAT THE
TRAVEL AND TRANSPORTATION EXPENSES OF HIS DEPENDENTS WERE INCURRED UNDER
ORDERS THAT WERE IN EFFECT AT THE TIME THE TRAVEL WAS PERFORMED, WE
CONSIDER THIS PART OF HIS CLAIM TO CONTAIN SUCH ELEMENTS OF LEGAL
LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF CONGRESS
AND HAVE ACCORDINGLY REPORTED THAT PORTION OF HIS CLAIM TO CONGRESS WITH
OUR RECOMMENDATION FOR ITS FAVORABLE CONSIDERATION.
CONCERNING QUESTIONS "B" AND "C" OF YOUR SUBMISSION, PARAGRAPH C
4005-3H, JOINT TRAVEL REGULATIONS, VOLUME 2, REQUIRES A NEW EMPLOYMENT
AGREEMENT WHEN AN EMPLOYEE IS REASSIGNED TO A DIFFERENT OVERSEAS
GEOGRAPHICAL LOCALITY PRIOR TO COMPLETION OF HIS TOUR OF DUTY. THE NEW
TOUR OF DUTY IS TO BE 12 MONTHS OR THE DIFFERENCE BETWEEN THE TOUR OF
DUTY AT THE NEW DUTY STATION AND THE PERIOD OF SERVICE COMPLETED AT THE
OLD DUTY STATION, WHICHEVER IS GREATER. PARAGRAPH C 4005-3 REQUIRES
TOURS OF DUTY IN ALASKA, EXCEPT IN CERTAIN LOCATIONS NOT HERE PERTINENT,
TO BE FOR A PERIOD OF 36 MONTHS UNDER ORIGINAL AND 24 MONTHS UNDER
RENEWAL AGREEMENTS. IN VIEW OF THE CIRCUMSTANCES UNDER WHICH THE
EMPLOYEE RETURNED TO ALASKA FOR DUTY IT IS OUR VIEW THAT THE 24-MONTH
PERIOD APPLICABLE TO RENEWAL AGREEMENTS SHOULD APPLY. THEREFORE, SINCE
MR. CLAYTON HAD SERVED 12 MONTHS (LESS 5 DAYS) UNDER AN EMPLOYMENT
AGREEMENT IN OKINAWA THE PERIOD OF SERVICE SPECIFIED IN HIS RENEWAL
AGREEMENT UPON RETURN TO ALASKA SHOULD HAVE BEEN FOR 12 MONTHS AND 5
DAYS. THUS HE WAS ENTITLE TO ROUND-TRIP TRAVEL AT GOVERNMENT EXPENSE
FOR THE PURPOSE OF TAKING LEAVE BETWEEN TOURS OF DUTY OUTSIDE THE
CONTINENTAL UNITED STATES IN AUGUST 1971.
IT FOLLOWS THAT QUESTION "B" IS FOR ANSWERING IN THE NEGATIVE. AS TO
QUESTION "C" WE NOTE THAT THE TRAVEL UNDER THE ORDERS OF APRIL 22, 1971,
WAS NOT COMMENCED UNTIL JULY 30, 1971. THEREFORE, THE EXPENSES OF HOME
LEAVE TRAVEL AT THAT TIME MAY BE REGARDED AS PROPERLY AUTHORIZED.
B-177471, JAN 19, 1973
MILITARY PERSONNEL - SURVIVOR BENEFIT PLAN - MEMBER'S ELECTION OF CHILD
AS BENEFICIARY
CONCERNING THE QUESTION AS TO WHETHER, UNDER THE SURVIVOR BENEFIT
PLAN ESTABLISHED BY PUB. L. 92-425, 10 U.S.C. 1447-1455, A MILITARY
MEMBER WITH A SPOUSE AND A DEPENDENT CHILD OR CHILDREN IS AUTHORIZED TO
ELECT TO PROVIDE AN ANNUITY FOR THE CHILD OR CHILDREN ONLY.
IN LIGHT OF THE LEGISLATIVE HISTORY OF PUB. L. 92-425 AND THE
LANGUAGE OF THAT ACT, GAO IS UNABLE TO CONCUR WITH THE VIEW THAT A
MEMBER MAY ELECT AN ANNUITY SOLELY FOR HIS CHILDREN IF HE HAS AN
ELIGIBLE SPOUSE.
TO MR. SECRETARY:
THIS REFERS TO LETTER DATED NOVEMBER 14, 1972, OF THE GENERAL COUNSEL
OF THE DEPARTMENT OF DEFENSE PRESENTING HIS VIEWS ON A QUESTION PENDING
IN THIS OFFICE AS TO WHETHER, UNDER THE SURVIVOR BENEFIT PLAN
ESTABLISHED BY THE ACT OF SEPTEMBER 21, 1972, PUBLIC LAW 92-425, 86
STAT. 706, 10 U.S.C. 1447-1455, A MILITARY MEMBER WITH A SPOUSE AND A
DEPENDENT CHILD OR CHILDREN IS AUTHORIZED TO ELECT TO PROVIDE AN ANNUITY
FOR THE CHILD OR CHILDREN ONLY.
BY YOUR MEMORANDUM DATED SEPTEMBER 25, 1972, YOU ISSUED AN INTERIM
DEPARTMENT OF DEFENSE DIRECTIVE IMPLEMENTING THE SURVIVOR BENEFIT PLAN
WHICH YOU STATED "WILL CLEARLY PERMIT A MEMBER WHO HAS A SPOUSE AND
DEPENDENT CHILDREN THE OPTIONS OF PROVIDING COVERAGE FOR A SPOUSE ONLY,
THE SPOUSE AND CHILDREN, OR THE CHILDREN ONLY." SINCE THERE IS NO
EXPRESS LANGUAGE IN THE ACT PERMITTING A MEMBER THE OPTION OF PROVIDING
AN ANNUITY FOR THE CHILDREN ONLY WHERE THERE IS AN ELIGIBLE SPOUSE AND
THE LEGISLATIVE HISTORY DISCLOSES NO CONGRESSIONAL INTENTION IN THAT
REGARD, THE GENERAL COUNSEL'S LETTER IS IN THE FORM OF A BRIEF IN WHICH
HE PRESENTS COMMENTS AND ARGUMENTS WHICH IN HIS OPINION SUPPORT THE
ELECTION OF CHILDREN ONLY WITHOUT REGARD TO THE SPOUSE.
YOUR GENERAL COUNSEL STATES THAT THOSE IN THE DEPARTMENT OF DEFENSE
WHO WERE INTIMATELY INVOLVED IN JUSTIFYING THE PROPOSAL TO THE CONGRESS
HAVE NO DOUBT THAT THE INTENT WAS TO PERMIT A MEMBER THE OPTION OF
PROVIDING COVERAGE FOR A CHILD OR CHILDREN ONLY, EVEN IF HE HAD A WIFE.
IT IS FURTHER STATED THAT THE CONGRESSIONAL COMMITTEE STAFFS WHO ALSO
WERE INTIMATELY INVOLVED WITH THE PROPOSAL HAVE INDICATED THAT THEY ARE
IN COMPLETE ACCORD ON THIS POINT WITH THE VIEWS OF DEPARTMENT OF DEFENSE
REPRESENTATIVES.
THE SURVIVOR BENEFIT PLAN APPLIES TO A PERSON WHO IS MARRIED OR HAS A
DEPENDENT CHILD WHEN HE BECOMES ENTITLED TO RETIRED OR RETAINER PAY
UNLESS HE ELECTS NOT TO PARTICIPATE IN THE PLAN BEFORE THE FIRST DAY FOR
WHICH HE IS ELIGIBLE FOR THAT PAY. ALSO, ALTHOUGH NOT GERMANE TO THE
QUESTION, A PERSON WHO IS NOT MARRIED AND DOES NOT HAVE A DEPENDENT
CHILD WHEN HE BECOMES ENTITLED TO RETIRED OR RETAINER PAY MAY ELECT TO
PROVIDE AN ANNUITY TO A NATURAL PERSON WITH AN INSURABLE INTEREST IN
THAT PERSON. 10 U.S.C. 1448(B).
SECTION 1450, TITLE 10, U.S. CODE, PROVIDES IN PERTINENT PART AS
FOLLOWS:
"(A) EFFECTIVE AS OF THE FIRST DAY AFTER THE DEATH OF A PERSON TO
WHOM SECTION 1448 OF THIS TITLE APPLIES, A MONTHLY ANNUITY UNDER SECTION
1451 OF THIS TITLE SHALL BE PAID TO -
"(1) THE ELIGIBLE WIDOW OR WIDOWER;
"(2) THE SURVIVING DEPENDENT CHILDREN IN EQUAL SHARES, IF THE
ELIGIBLE WIDOW OR WIDOWER IS DEAD, DIES, OR OTHERWISE BECOMES INELIGIBLE
UNDER THIS SECTION; OR ***"
SUBSECTION 1451(A) PROVIDES THAT THE MONTHLY ANNUITY PAYABLE TO THE
WIDOW, WIDOWER OR DEPENDENT CHILDREN SHALL BE EQUAL TO 55 PERCENT OF THE
BASE AMOUNT. IT IS PROVIDED IN SUBSECTION 1452(A) THAT THE REDUCTION IN
RETIRED OR RETAINER PAY TO PROVIDE AN ANNUITY TO A SPOUSE SHALL BE AN
AMOUNT EQUAL TO 2 1/2 PERCENT OF THE FIRST $300 OF THE BASE AMOUNT, PLUS
10 PERCENT OF THE REMAINDER OF THE BASE AMOUNT. IT IS FURTHER PROVIDED
THAT AS LONG AS THERE IS AN ELIGIBLE SPOUSE AND A DEPENDENT CHILD, THAT
AMOUNT SHALL BE INCREASED BY AN AMOUNT PRESCRIBED UNDER REGULATIONS OF
THE SECRETARY OF DEFENSE. SUBSECTION 1452(B) PROVIDES THAT THE RETIRED
OR RETAINER PAY OF A PERSON WHO HAS A DEPENDENT CHILD BUT DOES NOT HAVE
AN ELIGIBLE SPOUSE SHALL, AS LONG AS HE HAS AN ELIGIBLE DEPENDENT CHILD,
BE REDUCED BY AN AMOUNT PRESCRIBED UNDER REGULATIONS OF THE SECRETARY OF
DEFENSE.
THE LETTER OF YOUR GENERAL COUNSEL POINTS OUT THAT THE INTENT OF
CONGRESS IN ESTABLISHING A NEW SYSTEM OF SURVIVOR BENEFITS WAS TO
PROVIDE CAREER MEMBERS OF THE ARMED FORCES AN OPPORTUNITY TO LEAVE A
PORTION OF THEIR RETIRED PAY TO THEIR SURVIVORS AT A REASONABLE COST;
THAT THE PREDECESSOR PLAN - THE RETIRED SERVICEMAN'S FAMILY PROTECTION
PLAN (RSFPP), 10 U.S.C. 1431-1446 - HAD PROVED TOO EXPENSIVE AND
COMPLEX, AND THAT THE MOST ATTRACTIVE FEATURE OF RSFPP WAS THE BROAD
FLEXIBILITY IN THE SELECTION OF BENEFICIARIES. UNDER THAT PLAN A MEMBER
WITH A SPOUSE AND CHILDREN COULD BY THE CLEAR TERMS OF THE STATUTE (10
U.S.C. 1434) ELECT TO PROVIDE AN ANNUITY FOR THE SPOUSE ONLY, THE SPOUSE
AND CHILDREN, OR THE CHILDREN ONLY. HENCE, IT IS ARGUED THAT TO NOW
CONTEND THAT THE NEW PLAN ELIMINATED THE MOST ATTRACTIVE FEATURE OF THE
PRIOR PLAN BY NOT PERMITTING A MEMBER TO TAILOR HIS SURVIVORSHIP
BENEFITS TO FIT THE NEEDS OF HIS ESTATE PROGRAM WOULD BE ABSOLUTELY
CONTRARY TO THE INTENT OF CONGRESS AS WELL AS THAT OF THE DEPARTMENT OF
DEFENSE.
WHILE THE ACT OF SEPTEMBER 21, 1972, DID NOT ABOLISH THE RSFPP, THE
NEW PLAN SUPERSEDES THE RSFPP AS TO PERSONS WHO INITIALLY BECOME
ENTITLED TO RETIRED OR RETAINER PAY AFTER THE EFFECTIVE DATE OF THE ACT
AND PROVIDES THAT RETIREES PRESENTLY COVERED UNDER RSFPP HAVE THE
OPTIONS TO CONTINUE RSFPP AND NOT JOIN THE NEW PROGRAM, TO DROP RSFPP
AND JOIN THE NEW PROGRAM, OR TO CONTINUE RSFPP AND JOIN THE NEW PROGRAM
UP TO A TOTAL SURVIVOR ANNUITY OF 100 PERCENT OF THE MEMBER'S RETIRED
PAY AT THE TIME OF ELECTION INTO THE NEW PROGRAM. THE SURVIVOR BENEFIT
PLAN IS AN ENTIRELY NEW APPROACH TO THE PROBLEM OF PROVIDING PROTECTION
TO SURVIVING DEPENDENTS OF PRESENT AND FUTURE MILITARY RETIREES AND
ACTIVE DUTY MEMBERS WHO ARE RETIREMENT ELIGIBLE. HENCE, EXCEPT AS TO
SPECIFIC PROVISIONS RELATING TO THOSE MEMBERS ALREADY COVERED UNDER THE
RSFPP, THE SURVIVOR BENEFIT PLAN DOES NOT INCORPORATE BY REFERENCE OR
OTHERWISE ANY OF THE FEATURES OF THE RSFPP AS TO THOSE MEMBERS WHO ELECT
COVERAGE UNDER THE SURVIVOR BENEFIT PLAN.
THE LETTER OF NOVEMBER 14, 1972, GOES ON TO SAY THAT ONE OF THE
STATED OBJECTIVES OF REVISING THE RSFPP WAS TO PROVIDE A PLAN FOR
MILITARY RETIREES COMPARABLE TO THE PLAN PROVIDED FOR CIVIL SERVICE
ANNUITANTS AND THAT UNDER THE CIVIL SERVICE RETIREMENT SYSTEM EVEN
THOUGH AN EMPLOYEE ELECTS NOT TO ACCEPT A REDUCED ANNUITY WITH SURVIVOR
BENEFIT TO HIS SPOUSE IF AT HIS DEATH HE HAS DEPENDENT CHILDREN, AN
ANNUITY IS PAID TO THE CHILDREN DESPITE THE FACT THAT NO DEDUCTION WAS
MADE FROM THE ANNUITANT'S RETIRED PAY TO COVER THE CHILDREN. IN THIS
CONNECTION, HOWEVER, AN ANNUITY FOR DEPENDENT CHILDREN OF CIVIL SERVICE
RETIREES IS SPECIFICALLY PROVIDED BY LAW (5 U.S.C. 8341(E)). THERE IS
NO OPTION, HOWEVER, UNDER THE CIVIL SERVICE RETIREMENT SYSTEM FOR THE
EMPLOYEE TO ELECT A REDUCED ANNUITY WITH A 55 PERCENT SURVIVOR ANNUITY
TO HIS CHILDREN IN LIEU OF A REDUCED ANNUITY WITH A 55 PERCENT SURVIVOR
ANNUITY TO HIS WIDOW. FURTHERMORE, EXCEPT FOR CERTAIN GENERAL CONCEPTS
THE SURVIVOR BENEFIT PLAN IS NOT COMPARABLE TO THE CIVIL SERVICE
RETIREMENT SYSTEM. THE PLANS ARE NOT FINANCED IN THE SAME MANNER, THE
AVERAGE AGES OF MILITARY AND CIVILIAN RETIREES ARE NOT COMPARABLE AND
THE ADDITIONAL BENEFITS OF RETIRED MILITARY RETIREES AND THEIR
DEPENDENTS ARE NOT AVAILABLE TO CIVIL SERVICE ANNUITANTS.
THE GENERAL COUNSEL COMMENTS THAT TO CONCLUDE THAT COVERAGE FOR THE
SPOUSE IS AN ABSOLUTE CONDITION PRECEDENT TO PROVIDING COVERAGE FOR
CHILDREN WILL, IN MANY CASES RESULT IN NO COVERAGE FOR CHILDREN - A
RESULT NOT INTENDED BY THE CONGRESS OR THE DEPARTMENT OF DEFENSE. HE
FURTHER STATES THAT THERE ARE SITUATIONS IN WHICH A MEMBER WOULD WANT TO
PROVIDE FOR A CHILD ONLY WHEN THERE IS A SPOUSE AND SETS FORTH SEVERAL
EXAMPLES. HOWEVER, SUCH AN ELECTION, NO MATTER HOW VALID A REASON MAY
SEEM IN A GIVEN CASE, MAY NOT BE PERMITTED UNLESS AUTHORIZED BY LAW.
IT IS FURTHER STATED THAT THE USE OF THE QUALIFYING WORD "ELIGIBLE"
BEFORE "SPOUSE" UNDER THE EXPRESS LANGUAGE OF THE STATUTE PERTAINS TO
THE CRITERIA DEFINING A WIDOW AND WIDOWER (SECTION 1447(3) AND (4)) AND
TO THE TERMINATION OF AN ANNUITY BY REMARRIAGE BEFORE REACHING AGE 60
(SECTION 1450). THE VIEW IS EXPRESSED THAT THE WORD "ELIGIBLE" WIDOW
ALSO CONNOTES THE FACT THAT THE MEMBER HAS ELECTED HER OUT OF THE PLAN,
AN OPTION WHICH EVERYONE CONCEDES HE HAS A RIGHT TO DO. IF HE ELECTS
HER OUT OF THE PLAN, IT IS STATED THAT SHE OBVIOUSLY IS NOT AN
"ELIGIBLE" WIDOW, THOUGH NOT EXPRESSLY SO STATED IN THE LAW. HENCE,
WHILE THE GENERAL COUNSEL ADMITS THAT NEITHER THE EXPRESS LANGUAGE OF
THE LAW NOR ITS LEGISLATIVE HISTORY IS ENTIRELY CLEAR ON THIS POINT, HE
EXPRESSES THE VIEW THAT SUCH LANGUAGE SUPPORTS THE ELECTION OF "CHILDREN
ONLY" WITHOUT REGARD TO THE SPOUSE.
A REVIEW OF THE LEGISLATIVE HISTORY OF THE ACT OF SEPTEMBER 21, 1972,
DISCLOSES THAT THE ACT WAS THE CULMINATION OF A LONG RECOGNIZED NEED FOR
THE PROTECTION OF MILITARY WIDOWS. AT THE OUTSET THE DEPARTMENT OF
DEFENSE PROPOSED THAT THE PLAN MAKE NO SPECIFIC PROVISION FOR CHILDREN,
IT BEING ANTICIPATED THAT THOSE PARENTS WHO DESIRED TO PROVIDE BENEFITS
FOR CHILDREN IN ADDITION TO THOSE AVAILABLE UNDER SOCIAL SECURITY COULD
DO SO UNDER THE INSURABLE INTEREST PROVISION. HOWEVER, DURING THE
CONSIDERATION OF THE MATTER IN THE HOUSE OF REPRESENTATIVES A CHILDREN'S
BENEFIT WAS ADDED. THE DEPARTMENT OF DEFENSE HAD NO OBJECTION TO THE
ADDITION OF A CHILDREN'S BENEFIT BUT MADE CERTAIN RECOMMENDATIONS AS TO
THE COSTS OF COVERAGE FOR A SPOUSE AND DEPENDENT CHILDREN AND FOR
DEPENDENT CHILDREN ALONE, WHICH COSTS WOULD BE SPECIFIED IN REGULATIONS
ISSUED BY THE DEPARTMENT OF DEFENSE.
SENATE REPORT NO. 92-1089 TO ACCOMPANY S. 3905, 92ND CONGRESS, 2D
SESSION, WHICH PROVISIONS WERE INCORPORATED IN THE TEXT OF H.R. 10670
WHICH BECAME THE ACT OF SEPTEMBER 21, 1972, PUBLIC LAW 92-425, 86 STAT.
706, EXPLAINED THE INCLUSION OF ACTUARIAL COVERAGE FOR DEPENDENT
CHILDREN AS FOLLOWS:
"COVERAGE IS PROVIDED FOR DEPENDENT CHILDREN UNDER S. 3905 IN THE
SAME MANNER AS FOR THE SPOUSE - AT THE SAME MONTHLY COST FOR THE SAME
BENEFIT LEVEL. HOWEVER, WHEN THE CHILDREN REACH AGE 18 (OR 22 IN
SCHOOL), THEIR ELIGIBILITY TERMINATES. ON THE OTHER HAND, JUST AS WITH
THE MEMBER WHO COVERS A SPOUSE, THE MEMBER WHO COVERS CHILDREN UNDER S.
3905 MUST CONTRIBUTE TO THE PLAN FOR LIFE, EVEN THOUGH IN THE CASE OF
CHILDREN, THE ELIGIBILITY FOR BENEFITS IS LIMITED, AT MOST, UNTIL THEY
REACH AGE 22. THIS PROVISION MAKES THE APPLICATION OF THE PLAN TO
CHILDREN PROHIBITIVELY COSTLY; MEMBERS INSURING ONLY DEPENDENT CHILDREN
WOULD, IN MANY INSTANCES, BE PAYING OVER 3 TIMES THE VALUE OF THE
BENEFITS.
"WHILE THE COMMITTEE AGREES THAT THE LEGISLATION SHOULD PROVIDE A
BENEFIT TO DEPENDENT CHILDREN, IT ALSO BELIEVES THAT IT SHOULD BE
ACCOMPLISHED ON THE BASIS OF A SELF-FINANCING PLAN. SPECIFICALLY, THE
COMMITTEE RECOMMENDS THAT THE BASIC PLAN IN THE BILL APPLY TO THE
SPOUSE. FOR A SLIGHT ADDITIONAL CHARGE (ABOVE THE CHARGE FOR SPOUSE
COVERAGE), THE MEMBER COULD COVER THE SPOUSE AND DEPENDENT CHILDREN. IF
THE SPOUSE WERE TO BECOME INELIGIBLE, BENEFITS WOULD THEN FLOW TO THE
CHILDREN. IF THERE WERE NO SPOUSE, THE MEMBER COULD COVER DEPENDENT
CHILDREN. THE COST OF DEPENDENT CHILDREN'S COVERAGE, IN BOTH CASES,
WOULD BE BASED ON THE ACTUARIAL COST OF PROVIDING BENEFITS AND WOULD
TERMINATE WHEN THE CHILDREN NO LONGER ARE ELIGIBLE FOR BENEFITS.
"THE PROVISION RECOMMENDED BY THE COMMITTEE WILL RESULT IN NO COST TO
THE GOVERNMENT (EXCEPT FOR THE COST OF ADMINISTERING THE PROVISION) AND
WILL NOT BE PROHIBITIVE IN TERMS OF INDIVIDUAL MEMBER COST.
"THE COMMITTEE ALSO INTENDS THAT THE COST OF THE PROGRAM FOR
DEPENDENT CHILDREN WOULD BE DETERMINED BY THE ACTUARIALLY EQUIVALENT
METHOD, THAT IS, BY A SELF-FINANCING METHOD IN REGULATIONS PRESCRIBED BY
THE SECRETARY OF DEFENSE."
IN FURTHER SUPPORT OF OUR VIEW THAT CONGRESS HAD NO INTENTION OF
PERMITTING THE MEMBER TO ELECT TO PROVIDE AN ANNUITY FOR THE CHILDREN
ONLY WHERE THERE IS AN "ELIGIBLE" SPOUSE, THERE IS FOR NOTING THE
OPENING REMARKS ON THE SENATE FLOOR BY SENATOR BENSTEN WHO CHAIRED THE
SPECIAL SUBCOMMITTEE ON SURVIVOR BENEFITS, WHICH CONSIDERED S. 3905 THAT
"MR. PRESIDENT, THE BILL S. 3905 MIGHT BE TERMED THE 'WIDOW'S EQUITY
BILL.'" SEE CONGRESSIONAL RECORD - SENATE (PAGE S14334) DATED SEPTEMBER
8, 1972. ALSO, IN COMMENTING ON THE SEVERAL CHANGES MADE BY THE SENATE
IN THE HOUSE BILL, MR. PIKE, WHO CHAIRED THE SPECIAL SUBCOMMITTEE ON
SURVIVOR BENEFITS IN THE HOUSE OF REPRESENTATIVES WHICH CONSIDERED H.R.
10670, STATED, AMONG OTHER THINGS, THAT "IN THE ABSENCE OF A WIDOW OR
WIDOWER, THE BENEFITS WOULD GO TO THE SURVIVING DEPENDENT CHILDREN IN
EQUAL SHARES AND THE ANNUITY WOULD BE PAID AS LONG AS THERE ARE ELIGIBLE
CHILDREN." SEE CONGRESSIONAL RECORD - HOUSE (PAGE H8254) DATED SEPTEMBER
12, 1972.
THE ABOVE EXCERPTS FROM THE LEGISLATIVE HISTORY COUPLED WITH THE
PROVISIONS OF SECTION 1448(A) THAT "IF A PERSON WHO IS MARRIED ELECTS
NOT TO PARTICIPATE IN THE PLAN TO THE MAXIMUM LEVEL, THAT PERSON'S
SPOUSE SHALL BE NOTIFIED OF THE DECISION," AND THE UNAMBIGUOUS ORDER OF
PRECEDENCE EXPRESSED IN SUBSECTION 1450(A) INDICATE AN INTENTION TO
PROVIDE PROTECTION FIRST TO THE ELIGIBLE WIDOW AND IF NONE TO THE
SURVIVING DEPENDENT CHILDREN. UNDER THE PLAIN TERMS OF THE LAW, WE FIND
NO BASIS TO CONCLUDE THAT A MEMBER MAY ELECT AN ANNUITY FOR HIS CHILDREN
ONLY IF HE HAS AN ELIGIBLE SPOUSE. MOREOVER, WE ARE UNABLE TO CONCUR IN
THE VIEW THAT AN ELIGIBLE WIDOW BECOMES AN INELIGIBLE WIDOW SOLELY BY
THE MEMBER ELECTING HER OUT OF THE PLAN. THEREFORE, IT IS OUR VIEW THAT
THAT PART OF THE ABOVE-MENTIONED REGULATION WHICH WOULD AUTHORIZE SUCH
AN ELECTION MUST BE CONSIDERED AS BEING CONTRARY TO THE LAW.
HOWEVER, MILITARY RETIREES AND ACTIVE DUTY PERSONNEL APPARENTLY ARE
CURRENTLY BEING OFFERED THE ELECTION TO PROVIDE AN ANNUITY FOR CHILDREN
ONLY, EVEN THOUGH THERE IS AN ELIGIBLE SPOUSE. SINCE THE ELECTIONS OF
RETIRED AND RETIREMENT ELIGIBLE MEMBERS TO WHOM THE SURVIVOR BENEFIT
PLAN APPLIES MUST BE PROCESSED IN AN EXPEDITIOUS MANNER, WE WILL DELAY
QUESTIONING SUCH ELECTIONS UNTIL YOUR DEPARTMENT HAS AN OPPORTUNITY TO
PRESENT THE MATTER IN THE EARLY PART OF THE 93RD CONGRESS WITH A
RECOMMENDATION FOR AN AMENDMENT SPECIFICALLY AUTHORIZING THE ELECTION OF
AN ANNUITY FOR DEPENDENT CHILDREN ONLY WHERE THERE IS AN ELIGIBLE
SPOUSE.
B-176754, JAN 18, 1973
BID PROTEST - RESPONSIBILITY
DECISION DENYING THE PROTEST OF YU I1 INDUSTRIAL COMPANY, LTD.,
AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN RFP ISSUED BY
THE U.S. ARMY KOREA PROCUREMENT AGENCY, FOR HEAT MAINTENANCE SERVICES.
UNDER ASPR 1-902, A PROSPECTIVE CONTRACTOR MUST AFFIRMATIVELY
DEMONSTRATE ITS RESPONSIBILITY, AND THE DETERMINATION OF BIDDER
RESPONSIBILITY IS A MATTER PRIMARILY FOR DECISION BY THE CONTRACTING
OFFICER. THIS DETERMINATION WILL ONLY BE QUESTIONED BY GAO IF CLEARLY
SHOWN TO BE ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE. 43 COMP. GEN. 257, 262 (1963).
TO YU I1 INDUSTRIAL COMPANY, LTD.:
REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 12, 1972, AND SUBSEQUENT
CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO ANY OTHER FIRM
UNDER REQUEST FOR PROPOSAL (RFP) NO. DAJB03-72-R-3090, ISSUED BY THE
UNITED STATES ARMY KOREA PROCUREMENT AGENCY (USAKPA), FOR HEAT
MAINTENANCE SERVICES.
THE RECORD REVEALS THAT THE RFP WAS ISSUED ON JUNE 20, 1972, AND THAT
FOUR PROPOSALS WERE RECEIVED BY THE CLOSING DATE OF JUNE 23, 1972. IN
RESPONSE TO YOUR INQUIRY OF AUGUST 15, 1972, AS TO THE STATUS OF THE
PROCUREMENT, THE COMMANDING OFFICER OF USAKPA INFORMED YOU THAT YU I1
WAS NOT CONSIDERED TO BE A RESPONSIBLE PROSPECTIVE CONTRACTOR DUE TO
LACK OF INTEGRITY AND MANAGERIAL CAPABILITY. A DETERMINATION OF
NONRESPONSIBILITY FOR YOUR FIRM HAD BEEN MADE BY THE CONTRACTING OFFICER
ON AUGUST 10, 1972, IN ACCORDANCE WITH THE PROVISIONS OF ARMED SERVICES
PROCUREMENT REGULATION (ASPR) 1-904.1, CITING THE FAILURE BY YU I1 TO
APPLY THE NECESSARY TENACITY AND PERSEVERANCE TO SAFEGUARD GOVERNMENT
PROPERTY, IN ADDITION TO LACK OF INTEGRITY AND MANAGERIAL CAPABILITY, IN
THE PERFORMANCE OF PRIOR CONTRACTS FOR THE SERVICES.
IN YOUR LETTER OF AUGUST 22, 1972, YOU STATE THAT YOUR FIRM HAS
MAINTAINED AN EXCELLENT BUSINESS RECORD AND REPUTATION IN PROVIDING
VARIOUS SERVICES TO UNITED STATES GOVERNMENT ORGANIZATIONS IN KOREA
SINCE 1961. YOU BELIEVE THAT YU I1 IS THE BEST QUALIFIED OF THE
OFFERORS AND THAT THERE SHOULD BE NO REASON WHATSOEVER WHY YOU SHOULD
NOT BE AWARDED THE CONTRACT IN VIEW OF THE FACT THAT YOUR PRICES ARE THE
LOWEST PROPOSED. YOU MENTION THAT YOU HAVE CONTACTED USAKPA PERSONNEL
CONCERNING THE CONTRACT AWARD, BUT THAT YOU HAVE BEEN VERBALLY ADVISED
THAT YU I1 IS CONSIDERED "NOT RESPONSIVE" AND, THUS, YOUR FIRM IS NOT
UNDER CONSIDERATION FOR THE AWARD. ON AUGUST 19, 1972, YOU ALSO FILED A
PROTEST WITH USAKPA IN WHICH YOU SAY THAT YU I1 WAS DETERMINED TO BE
"NONRESPONSIVE."
ALTHOUGH YOU PROTEST ON THE BASIS THAT YU I1 WAS CONSIDERED TO BE
NONRESPONSIVE, IT IS CLEAR THAT THE RESPONSIVENESS OF YOUR PROPOSAL IS
NOT IN ISSUE, AND THAT YOUR PROTEST IS FOUNDED ON THE CONTRACTING
OFFICER'S DETERMINATION OF AUGUST 10 THAT YU I1 IS NOT A RESPONSIBLE
PROSPECTIVE CONTRACTOR, WITHIN THE MEANING OF ASPR 1-902, FOR THE
PROCUREMENT CONTEMPLATED UNDER THE SUBJECT RFP. THIS IS THE REASON FOR
THE ELIMINATION OF YOUR FIRM FROM CONSIDERATION FOR THE AWARD, AND WE
NOTE THAT IN YOUR OBJECTION TO THE DETERMINATION YOU SPEAK OF YOUR
QUALIFICATIONS, BUSINESS RECORD AND REPUTATION. UNDER ASPR 1-902 A
PROSPECTIVE CONTRACTOR MUST DEMONSTRATE AFFIRMATIVELY ITS
RESPONSIBILITY, AND THE CONTRACTING OFFICER IS REQUIRED TO MAKE A
DETERMINATION OF NONRESPONSIBILITY IF THE INFORMATION OBTAINED DOES NOT
INDICATE CLEARLY THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE.
WE HAVE BEEN FURNISHED A COMPLETE DOCUMENTED REPORT BY THE DEPARTMENT
OF THE ARMY CONCERNING YOUR PROTEST. WE HAVE ALSO BEEN ADVISED THAT YOU
HAVE BEEN FURNISHED A COPY OF PORTIONS OF THAT REPORT SHOWING THE
FACTUAL BASIS FOR THE CONTRACTING OFFICER'S DETERMINATION OF
NON-RESPONSIBILITY FOR YOUR FIRM. THE FACTORS INVOLVED, WHICH CONCERN
YU I1'S INTEGRITY, MANAGERIAL CAPABILITY AND EFFECTIVENESS IN
SAFEGUARDING GOVERNMENT PROPERTY UNDER PRIOR CONTRACTS, THEREFORE WILL
NOT BE REPEATED HERE. WE HAVE, HOWEVER, CAREFULLY REVIEWED YOUR
STATEMENTS AS TO YOUR BUSINESS QUALIFICATIONS, AS WELL AS THE
INFORMATION ON WHICH THE DETERMINATION OF NONRESPONSIBILITY WAS BASED.
IT IS OUR VIEW THAT THE RECORD PROVIDES AMPLE SUPPORT FOR THE AGENCY'S
POSITION THAT THE EVIDENCE OBTAINED FAILS TO CLEARLY ESTABLISH THAT YU
I1 IS A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE PROCUREMENT INVOLVED,
AS CONTEMPLATED BY ASPR 1-902 FOR THE AWARDING OF CONTRACTS.
WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION OF A PROSPECTIVE
CONTRACTOR'S RESPONSIBILITY OR NONRESPONSIBILITY IS PRIMARILY A MATTER
FOR DECISION BY THE CONTRACTING OFFICER, AND SUCH DETERMINATIONS MAY BE
QUESTIONED BY OUR OFFICE ONLY IF CLEARLY SHOWN TO BE ARBITRARY,
CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. 43 COMP. GEN. 257,
262 (1963); 46 COMP. GEN. 371, 372 (1966). SINCE NONE OF THESE
CONDITIONS ARE INDICATED IN CONNECTION WITH THE DETERMINATION REGARDING
YU I1, THE RECORD PROVIDES NO GROUNDS, IN SUCH RESPECT, FOR OUR
INTERVENTION IN THIS MATTER.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176907, JAN 18, 1973
MILITARY PERSONNEL - REENLISTMENT BONUS - AGGREGATE LIMITATION
DECISION SUSTAINING THE DENIAL OF THE CLAIM OF SGT. MAJ. LEE O. ROY,
U.S. ARMY, FOR REIMBURSEMENT OF AN AMOUNT REFUNDED TO THE GOVERNMENT FOR
OVERPAYMENT OF REENLISTMENT BONUS.
ANNIVERSARY PAYMENTS PAID AFTER OCTOBER 1, 1949, FOR REENLISTMENTS
WHICH WERE ENTERED INTO PRIOR TO THAT DATE UNDER SECTION 10 OF THE PAY
READJUSTMENT ACT OF 1942, AS AMENDED BY SECTION 4 OF THE ACT OF JUNE 28,
1947, ARE TO BE REGARDED AS REENLISTMENT BONUS PAYMENTS WITHIN THE
CONTEMPLATION OF THE $2,000 AGGREGATE LIMITATION OF 37 U.S.C. 308(C).
SEE 34 COMP. GEN. 463 (1955).
TO SGT. MAJ. LEE O. ROY:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 23, 1972, IN EFFECT
REQUESTING RECONSIDERATION OF THE SETTLEMENT OF OUR OFFICE DATED APRIL
15, 1970, WHICH DISALLOWED YOUR CLAIM FOR REIMBURSEMENT OF $360 REFUNDED
TO THE GOVERNMENT FOR OVERPAYMENT OF REENLISTMENT BONUS. WE ALSO HAVE
YOUR LETTER OF NOVEMBER 7, 1972.
THE RECORD SHOWS THAT YOU REENLISTED ON JUNE 19, 1949, FOR AN
UNSPECIFIED PERIOD OF TIME AND RECEIVED A $50 ENLISTMENT ALLOWANCE.
THEREAFTER YOU RECEIVED ANNIVERSARY PAYMENTS TOTALING $355 OVER A PERIOD
OF SIX YEARS INCIDENT TO THAT ENLISTMENT. ON JULY 20, 1955, YOU
REENLISTED FOR FOUR YEARS AND RECEIVED A REENLISTMENT BONUS OF $936.
WHEN YOU REENLISTED AGAIN ON JULY 20, 1959, YOU RECEIVED A REENLISTMENT
BONUS OF $1,100 MAKING A TOTAL OF $2,391 YOU RECEIVED INCIDENT TO THE
1955 AND 1959 ENLISTMENTS AND THE ANNIVERSARY PAYMENTS INCIDENT TO THE
1949 ENLISTMENT.
THE PAYMENT OF REENLISTMENT BONUSES INCIDENT TO REENLISTMENTS ENTERED
INTO ON OR AFTER OCTOBER 1, 1949 WAS AUTHORIZED BY SECTION 207 OF THE
CAREER COMPENSATION ACT OF 1949, 63 STAT. 811, WHICH PROVIDED THAT THE
TOTAL AMOUNT OF SUCH PAYMENTS SHOULD NOT EXCEED $1,440. THE 1949 ACT
WAS AMENDED BY THE ACT OF JULY 16, 1954, 68 STAT. 488, WHICH ADDED
SECTION 208, NOW CODIFIED AS SECTION 308, TITLE 37, U.S. CODE, AND WHICH
NOW GOVERNS THE PAYMENT OF REENLISTMENT BONUSES. THAT SECTION PROVIDES
FOR PAYMENT OF REENLISTMENT BONUSES COMPUTED ON A DIFFERENT BASIS AND
GENERALLY IN A GREATER AMOUNT THAN IS PROVIDED IN SECTION 207.
THE TOTAL AMOUNT OF REENLISTMENT BONUS THAT MAY BE PAID TO A MEMBER
WAS LIMITED BY SUBSECTION 208(C), READING AS FOLLOWS:
"THE CUMULATIVE AMOUNT WHICH MAY BE PAID TO A MEMBER UNDER THIS
SECTION, OR UNDER THIS SECTION AND ANY OTHER PROVISION OF LAW
AUTHORIZING REENLISTMENT BONUSES, MAY NOT EXCEED $2,000."
IN VIEW OF SUCH LIMITATION THE EXCESS OF $391 WAS COLLECTED FROM YOU
AND YOUR CLAIM FOR REFUND OF THE AMOUNT OF THE ANNIVERSARY PAYMENTS WAS
DISALLOWED.
THE BASIS FOR YOUR REQUEST FOR RECONSIDERATION OF THE DISALLOWANCE OF
YOUR CLAIM IS THAT PARAGRAPH 10906C(5) OF THE DEPARTMENT OF DEFENSE
MILITARY PAY AND ALLOWANCES ENTITLEMENTS MANUAL PROVIDES AS FOLLOWS:
"(5) AMOUNTS PAID AS ENLISTMENT ALLOWANCES AFTER 1 OCT 1949 ARE NOT
INCLUDED IN THE $2000 CUMULATIVE AMOUNT LIMITATION."
YOU CONTEND THAT THE AMOUNT YOU RECEIVED AFTER OCTOBER 1, 1949, AS
ANNIVERSARY PAYMENTS FOR YOUR REENLISTMENT ON JUNE 19, 1949, CONSTITUTED
ENLISTMENT ALLOWANCE PAYMENTS WHICH SHOULD NOT BE INCLUDED IN THE $2,000
AGGREGATE LIMITATION.
AT THE TIME OF YOUR REENLISTMENT ON JUNE 19, 1949, SECTION 10 OF THE
PAY READJUSTMENT ACT OF 1942, AS AMENDED BY SECTION 4 OF THE ACT OF JUNE
28, 1947, 61 STAT. 192, PROVIDED THAT, IN ADDITION TO THE ENLISTMENT
ALLOWANCE OTHERWISE AUTHORIZED, ANY PERSON ENLISTING FOR AN UNSPECIFIED
PERIOD OF TIME SHOULD BE PAID THE SUM OF $50 UPON COMPLETION OF EACH
YEAR OF SERVICE UNDER SUCH ENLISTMENT. THAT SECTION OF THE 1942 ACT WAS
REPEALED, HOWEVER, EFFECTIVE OCTOBER 1, 1949, BY THE CAREER COMPENSATION
ACT OF 1949, 63 STAT. 802, LEAVING NO PROVISION OF LAW IN EFFECT FOR
PAYMENT OF SUCH ADDITIONAL ENLISTMENT ALLOWANCE TO MEMBERS WHO
REENLISTED FOR AN INDEFINITE PERIOD PRIOR TO THE EFFECTIVE DATE OF THE
1949 ACT. TO CORRECT THAT SITUATION, SECTION 207 OF THE 1949 ACT WAS
AMENDED BY THE ACT OF OCTOBER 26, 1951, 65 STAT. 653, TO READ, IN PART,
AS FOLLOWS, THE UNDERSCORED PROVISO HAVING BEEN ADDED BY THE 1951 ACT:
"SEC. 207. (A) MEMBERS OF THE UNIFORMED SERVICES WHO ENLIST UNDER
THE CONDITIONS SET FORTH IN SUBSECTION (B) OF THIS SECTION WITHIN THREE
MONTHS FROM THE DATE OF THEIR DISCHARGE OR SEPARATION, OR WITHIN SUCH
LESSER PERIOD OF TIME AS THE SECRETARY CONCERNED MAY DETERMINE FROM TIME
TO TIME, SHALL BE PAID A LUMP-SUM REENLISTMENT BONUS OF $40, $90, $160,
$250, OR $360 UPON ENLISTMENT FOR A PERIOD OF TWO, THREE, FOUR, FIVE, OR
SIX YEARS, RESPECTIVELY; AND, UPON ENLISTMENT FOR AN UNSPECIFIED PERIOD
OF TIME AMOUNTING TO MORE THAN SIX YEARS A LUMP SUM REENLISTMENT BONUS
OF $360 SHALL BE PAID, AND, UPON THE COMPLETION OF SIX YEARS' ENLISTED
SERVICE IN SUCH ENLISTMENT, FOR EACH YEAR THEREAFTER A LUMP SUM PAYMENT
OF $60 SHALL BE MADE IN ADVANCE, SUBJECT TO THE LIMITATION THAT THE
TOTAL AMOUNT PAID SHALL NOT EXCEED $1,440:
PROVIDED, THAT PERSONS IN AN ENLISTMENT FOR AN UNSPECIFIED PERIOD OF
TIME, ENTERED INTO PRIOR TO OCTOBER 1, 1949, SHALL BE PAID $110 UPON THE
FIRST ANNIVERSARY DATE OF SUCH ENLISTMENT SUBSEQUENT TO SEPTEMBER 30,
1949, AND $60 UPON EACH ANNIVERSARY DATE THEREAFTER, SUBJECT TO THE
LIMITATIONS THAT THE TOTAL AMOUNT PAID AFTER OCTOBER 1, 1949, SHALL NOT
EXCEED $1,440: ***"
IT WILL BE NOTED THAT SECTION 10 OF THE 1942 ACT PROVIDED, PRIOR TO
ITS REPEAL EFFECTIVE OCTOBER 1, 1949, FOR PAYMENT OF REENLISTMENT
ALLOWANCES INCIDENT TO REENLISTMENTS ENTERED INTO UNDER THE
CIRCUMSTANCES THERE SPECIFIED, WHEREAS SECTIONS 207 AND 208 OF THE 1949
ACT, AS AMENDED, PROVIDES FOR REENLISTMENT BONUSES COMPUTED ON A
DIFFERENT BASIS AND IN DIFFERENT AMOUNTS INCIDENT TO REENLISTMENTS
ENTERED INTO ON OR AFTER OCTOBER 1, 1949, THE EFFECTIVE DATE OF THAT
ACT.
SINCE THE ANNIVERSARY PAYMENTS PROVIDED FOR BY THE 1951 AMENDMENT TO
SECTION 207 OF THE 1949 ACT WERE PROVIDED AS A PART OF THE PAYMENTS
AUTHORIZED BY SECTION 207(A) RELATING TO REENLISTMENT BONUS PAYMENTS,
SUCH ANNIVERSARY PAYMENTS ALSO ARE REGARDED AS REENLISTMENT BONUS
PAYMENTS WITHIN THE CONTEMPLATION OF THE $2,000 AGGREGATE LIMITATION.
SEE 34 COMP. GEN. 463 (1955), COPY ENCLOSED.
CONSEQUENTLY, THE ANNIVERSARY PAYMENTS YOU RECEIVED WERE PROPERLY
INCLUDED IN COMPUTING THE TOTAL PAYMENTS TO YOU SUBJECT TO THE $2,000
CUMULATIVE LIMITATION AND THE SETTLEMENT DENYING YOUR CLAIM IS
SUSTAINED.
IT MAY BE STATED THAT SECTION 207(D) OF THE 1949 ACT PROVIDES THAT A
MEMBER WHO REENLISTS WITHIN THREE MONTHS AFTER BEING DISCHARGED FROM AN
ENLISTMENT ENTERED INTO PRIOR TO THE DATE OF ENACTMENT OF THAT ACT SHALL
BE ENTITLED TO RECEIVE EITHER (1) ENLISTMENT ALLOWANCE IN THE AMOUNT
(NOT EXCEEDING $300) AND UNDER THE PROVISIONS OF LAW IN EFFECT
IMMEDIATELY PRIOR TO ENACTMENT OF THE 1949 ACT, OR (2) REENLISTMENT
BONUS UNDER THE PROVISIONS OF THAT SECTION, WHICHEVER IS THE GREATER
AMOUNT. THE PROVISION IN THE PAY MANUAL WHICH YOU CITE WOULD BE
APPLICABLE TO ENLISTMENT ALLOWANCES PAID UNDER THAT SAVINGS PROVISION
INCIDENT TO REENLISTMENTS ENTERED INTO AFTER ENACTMENT OF THE 1949 ACT.
34 COMP. GEN. 715 (1955).
B-177125, JAN 18, 1973
BID PROTEST - MISTAKE IN BID - CORRECTION PRIOR TO AWARD
DECISION DENYING THE PROTEST OF TWIN TOOL & DIE COMPANY AGAINST THE
AWARD OF A CONTRACT TO MKB MANUFACTURING COMPANY UNDER AN IFB ISSUED BY
THE ARMY WEAPONS COMMAND, ROCK ISLAND, ILL., FOR RECOIL ADAPTER
ASSEMBLIES.
WHERE THERE IS CLEAR AND CONVINCING EVIDENCE ESTABLISHING BOTH THE
EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, CORRECTION OF THE
BID IS AUTHORIZED UNDER ASPR 2-406.3(A)(3). SEE 41 COMP. GEN. 160
(1961).
TO TWIN TOOL & DIE COMPANY:
FURTHER REFERENCE IS MADE TO YOUR TELEFAX MESSAGE OF SEPTEMBER 27,
1972, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A
CONTRACT UNDER IFB DAAF03-72-B-1504 (IFB -1504), ISSUED BY THE ARMY
WEAPONS COMMAND, ROCK ISLAND, ILLINOIS.
THE LOW BIDDER UNDER IFB -1504 WAS PERMITTED TO CORRECT A MISTAKE IN
BID ALLEGED AFTER BID OPENING BUT BEFORE AWARD. YOU CONTEND THAT THE
SUBSEQUENT AWARD TO THAT BIDDER WAS MADE IN A "QUESTIONABLE MANNER" AND
UNDER CIRCUMSTANCES WHICH INDICATED "FAVORITISM."
IFB -1504, FOR THE SUPPLY OF 654 RECOIL ADAPTER ASSEMBLIES,
ESTABLISHED JUNE 1, 1972, AS THE BID OPENING DATE. OF THE ELEVEN BIDS
RECEIVED, THE FIVE LOWEST WERE RECORDED AS FOLLOWS AT THE BID OPENING:
BIDDER UNIT PRICE
MKB MFG. CORP. $22.77
TWIN TOOL & DIE 36.86
IMCO PRECISION PROD., INC. 38.40
SNOW PRECISION IND., INC. 39.88
MILO COMPONENTS, INC. 44.00
SINCE MKB'S UNIT PRICE WAS SUBSTANTIALLY BELOW THE OTHER BIDS
RECEIVED AS WELL AS THE PREVIOUS CONTRACT PRICE ($48.84), IT WAS
REQUESTED TO VERIFY ITS BID. BY LETTER OF JUNE 26, 1972, MKB ALLEGED IT
HAD MADE AN ARITHMETICAL ERROR IN ITS BID AND REQUESTED CORRECTION.
MKB'S ORIGINAL WORKSHEETS WERE SUBMITTED IN SUPPORT OF ITS ALLEGATION.
SHEET 7 OF MKB'S WORKSHEETS, WHICH CONTAINS THAT BIDDER'S FINAL
CALCULATIONS, SHOWS THE FOLLOWING:
"65D9765 $ 6.50
9766 5.00
9767 1.25
10025 12.00
10031 1.00
91075 1.55
91074 .75
ASS HARDWARE .50
PACK & SHIP 1.22
19.77
G&A 3.00
$22.77"
OF COURSE, THE CORRECT TOTAL OF THIS COLUMN IS $32.77, NOT $22.77.
IT WAS ALSO ESTABLISHED BY THE WORKSHEETS THAT THE SECOND ITEM IN THE
ABOVE COLUMN SHOULD HAVE BEEN $4.95 RATHER THAN $5.00. THE CORRECTION
OF THESE TWO ERRORS WOULD RESULT IN A UNIT PRICE OF $32.72.
THE CONTRACTING OFFICER HAS FURTHER STATED:
"(2) CONTAINED ON SHEET 6 IS THE ENTRY 'PURCHASE #65C10025 12.00.'
SPECULATIVELY, SUCH FIGURE COULD ORIGINALLY HAVE BEEN $2.00, ALTERED TO
$12.00 AFTER MKB'S BID WAS QUESTIONED, THEREBY NEGATING THE EXISTENCE OF
A DIFFERENT INTENDED BID PRICE AND PRECLUDING THE REQUESTED CORRECTION.
THEREFORE, MKB WAS VERBALLY REQUESTED TO FURNISH DOCUMENTATION IN
SUPPORT OF THE $12.00 FIGURE. SUCH DOCUMENTATION, CONSISTING OF A
VENDOR'S QUOTE DATED '6/13/72,' REFERENCES AN INQUIRY OF '6/9/72' AND
CONTAINS THE HANDWRITTEN ENTRY 'CONFIRMING.' IN VIEW OF THE LATTER
REFERENCED DATE, MKB WAS REQUESTED BY LETTER, DATED 18 JULY 1972, TO
FURNISH THE DOCUMENTATION UPON WHICH ITS ORIGINAL BID WAS PREDICATED.
BY LETTER DATED 24 JULY 1972, MKB STATED 'THAT THE QUOTE WE USED WAS
GIVEN TO US BY PHONE PRIOR TO OUR QUOTING' AND INDICATED THAT WRITTEN
CONFIRMATION WAS REQUESTED AND RECEIVED ONLY AFTER MKB'S BID WAS
QUESTIONED.
"(3) ALTHOUGH THE FOREGOING DOES NOT CONCLUSIVELY NEGATE THE ABOVE
REFERENCED ALTERATION POSSIBILITY, IT DOES EXPLAIN THE APPARENT CONFLICT
OF DATES. MOREOVER, IT IS NOT UNCOMMON FOR A BIDDER TO RELY ON A VERBAL
QUOTE FOR BID PREPARATION. FURTHERMORE, THE ORIGINAL WORK SHEETS
CONCLUSIVELY ESTABLISH THE EXISTENCE OF AN ERROR AND, BUT FOR THE
UNSUBSTANTIABLE SPECULATION, A DIFFERENT INTENDED BID PRICE WHICH WOULD
NOT AFFECT THE RELATIVE STANDING OF THE BIDDERS."
THE CONTRACTING OFFICER THEREFORE RECOMMENDED THAT MKB BE PERMITTED
TO CORRECT ITS BID TO A UNIT PRICE OF $32.72. THIS RECOMMENDATION WAS
ACCEPTED BY THE GENERAL COUNSEL, ARMY MATERIEL COMMAND, IN WHOM ARMED
SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3(B)(1) VESTS THE AUTHORITY
TO MAKE DETERMINATIONS REGARDING ALLEGED MISTAKES IN BIDS.
ASPR 2-406.3(A)(3) PROVIDES THAT WHERE, AS IN THIS CASE, THERE IS
CLEAR AND CONVINCING EVIDENCE ESTABLISHING BOTH THE EXISTENCE OF A
MISTAKE AND THE BID ACTUALLY INTENDED, CORRECTION OF THE BID IS
AUTHORIZED. THIS PROCEDURE HAS BEEN SANCTIONED BY OUR OFFICE AND THE
COURT OF CLAIMS. 41 COMP. GEN. 160 (1961); CHRIS BERG, INC. V. UNITED
STATES, 192 CT. CL. 176 (1970). BASED UPON THE FOREGOING, IT IS OUR
OPINION THAT MKB'S BID WAS PROPERLY CORRECTED IN ACCORDANCE WITH THE
ESTABLISHED PROCEDURE.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-177138, JAN 18, 1973
CIVILIAN EMPLOYEE - CONSTRUCTIVE TRAVEL - PER DIEM
DECISION REGARDING THE CLAIM OF JOSEPH S. MALESKY, AN EMPLOYEE OF THE
BUREAU OF MINES, ARISING OUT OF TRAVEL FROM NORTON, VA., TO WASHINGTON,
D.C., AND RETURN.
UNDER THE CIRCUMSTANCES, THE ADMINISTRATIVE DETERMINATION THAT
CLAIMANT'S DEPARTURE FROM WASHINGTON, D.C., COULD HAVE BEEN AFFECTED
DURING THE LATE AFTERNOON-EARLY EVENING HOURS OF JUNE 15, 1972, DOES NOT
APPEAR UNREASONABLE OR ARBITRARY. MOREOVER, UNDER SECTION 4.3D OF OMB
CIRCULAR NO. A-7, THE CONSTRUCTIVE DEPARTURE TIME OF 5:05 P.M. DOES
NOT RAISE THE PROBLEM OF HAVING THE EMPLOYEE TRAVEL AT UNREASONABLE
TIMES.
TO MR. JOSEPH A. PAGLIASOTTI:
WE REFER TO YOUR LETTER DATED SEPTEMBER 21, 1972, WITH ENCLOSURES,
WHICH REQUESTS OUR DECISION ON THE APPLICABILITY OF SECTION 4.3D OF
OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-7, REVISED AUGUST
17, 1971, TO A VOUCHER SUBMITTED BY MR. JOSEPH S. MALESKY, AN EMPLOYEE
OF THE UNITED STATES DEPARTMENT OF THE INTERIOR, BUREAU OF MINES.
THE RECORD INDICATES THAT UNDER TRAVEL AUTHORIZATION NO. T5002152,
ISSUED JUNE 2, 1972, MR. MALESKY TRAVELED FROM NORTON, VIRGINIA, TO
WASHINGTON, D.C., FOR THE PURPOSE OF ATTENDING THE DEPARTMENTAL HONOR
AWARDS CONVOCATION. THE SUBJECT TRAVEL WAS TO BE PERFORMED DURING THE
PERIOD JUNE 14-16, 1972. HE TRAVELED BY PRIVATELY OWNED AUTOMOBILE FOR
HIS OWN CONVENIENCE.
THE VOUCHER SUBMITTED BY MR. MALESKY SHOWS THAT HE DEPARTED FROM
NORTON, VIRGINIA, BY AUTO AT 8 A.M. ON JUNE 14, 1972, AND ARRIVED IN
WASHINGTON, D.C., AT 5 P.M. THE SAME DAY. THE VOUCHER FURTHER INDICATES
THAT HE RETURNED TO NORTON AT 5 P.M. ON JUNE 16, 1972, HAVING LEFT
WASHINGTON, D.C., AT 8 A.M. THAT DAY. IT IS NOTED THAT THE COLLOQUIUM
WHICH MR. MALESKY ATTENDED ENDED BETWEEN 3:30 AND 3:45 P.M. ON JUNE 15,
1972.
IN PROCESSING MR. MALESKY'S VOUCHER, THE VOUCHER EXAMINERS
RECONSTRUCTED HIS TRAVEL AS THOUGH HE HAD MADE THE TRIP TO AND FROM
WASHINGTON, D.C., VIA COMMON AIR CARRIER. BY SO DOING IT WAS DETERMINED
THAT HE COULD HAVE DEPARTED TRI-CITIES AIRPORT AT 4:12 P.M. ON JUNE 14
AND ARRIVED IN WASHINGTON 6:18 P.M. ACCORDINGLY, THERE WAS SUSPENDED
FROM MR. MALESKY'S VOUCHER A PER DIEM ALLOWANCE OF 1/4 DAY
(REPRESENTING THE DIFFERENT DEPARTURE TIME).
IN ADDITION TO THE ABOVE IT WAS CONSTRUCTIVELY DETERMINED THAT MR.
MALESKY COULD HAVE RETURNED FROM WASHINGTON ON JUNE 15, 1972, ON A
FLIGHT WHICH DEPARTED 5:05 P.M. THEREFROM. PURSUANT TO SUCH
DETERMINATION THERE WAS ALSO DISALLOWED MR. MALESKY'S CLAIM FOR 3/4 DAY
PER DIEM ON JUNE 16, 1972, THE DAY HE DROVE BACK TO NORTON, VIRGINIA.
MR. MALESKY HAS OBJECTED ONLY TO THIS LATTER SUSPENSION.
IT IS APPARENTLY YOUR POSITION THAT CONSTRUCTIVELY SCHEDULING MR.
MALESKY'S DEPARTURE FROM WASHINGTON, D.C., AT 5:05 ON JUNE 15, 1972, WAS
NOT UNREASONABLE UNDER THE CONTROLLING REGULATIONS.
WITH REGARD THERETO YOU HAVE STATED THAT -
"OUR JUDGEMENT THAT THE 5:05 P.M. DEPARTURE WAS NOT UNREASONABLE WAS
BASED ON THE ACTUAL DEPARTURE OF THE WIDOW OF A DECEASED EMPLOYEE WHO
ATTENDED THE SAME CONVOCATION. THIS LADY LEFT ON A FLIGHT THAT DEPARTED
WASHINGTON, D.C. AT 5:00 P.M. ON JUNE 15, 1972."
CONCERNING THE TIME OF DEPARTURE ON JUNE 15, 1972, THE RECORD
INDICATES THAT MR. MALESKY MENTIONED HIS PREFERENCE TO VISIT WITH SOME
FORMER EMPLOYEES RATHER THAN TO RUSH TO THE AIRPORT WHICH ALLEGEDLY
WOULD HAVE BEEN NECESSARY HAD HE TRAVELED BY AIRPLANE.
SECTIONS 4.3C AND 4.3D OF OMB CIRCULAR NO. A-7 (STANDARDIZED
GOVERNMENT TRAVEL REGULATIONS) PROVIDE AS FOLLOWS:
"C. PER DIEM ALLOWANCE. THE CONSTRUCTIVE PER DIEM WILL BE THE
AMOUNT WHICH WOULD HAVE BEEN ALLOWABLE IF THE TRAVELER HAD USED THE
CARRIER UPON WHICH THE CONSTRUCTIVE TRANSPORTATION COSTS ARE DETERMINED.
"D. USE OF ACTUAL AND REASONABLE SCHEDULES. IN MAKING THE FOREGOING
CONSTRUCTIVE COST COMPARISONS OF TRANSPORTATION, SCHEDULED DEPARTURES
AND ARRIVALS OF PLANES, TRAINS, AND BUSES AT UNREASONABLE HOURS WILL BE
DISREGARDED. (FOR THIS PURPOSE, 'UNREASONABLE HOURS' MEANS THOSE WHICH
WOULD UNDULY INCONVENIENCE THE TRAVELER OR ADVERSELY AFFECT HIS SAFETY,
OR WHICH WOULD RESULT IN UNDULY INCREASING THE CONSTRUCTIVE PER DIEM)."
UNDER THE CIRCUMSTANCES THE ADMINISTRATIVE DETERMINATION THAT MR.
MALESKY'S DEPARTURE FROM WASHINGTON, D.C., COULD HAVE BEEN EFFECTED
DURING THE LATE AFTERNOON-EARLY-EVENING HOURS OF JUNE 15, 1972, DOES NOT
APPEAR UNREASONABLE OR ARBITRARY. FURTHER, WE FEEL IT CONSISTENT WITH
THE RULE THAT THE TRAVELER SHOULD EXERCISE THE SAME CARE IN INCURRING
EXPENSES THAT A PRUDENT PERSON WOULD EXERCISE IF TRAVELING ON PERSONAL
BUSINESS. OMB CIRCULAR NO. A-7, REVISED AUGUST 17, 1971, SECTION 1.2.
MOREOVER, UNDER SECTION 4.3D SUPRA WE DO NOT FEEL THAT THE
CONSTRUCTIVE DEPARTURE TIME OF 5:05 P.M. PRESENTS THE PROBLEM OF HAVING
THE EMPLOYEE TRAVEL AT UNREASONABLE HOURS. NOT ONLY DOES IT APPEAR THAT
HAD MR. MALESKY DEPARTED, AS CONSTRUCTIVELY SHOWN ON THE 5:05 P.M.
FLIGHT THAT HE WOULD HAVE BEEN HOME AT A REASONABLE HOUR ON JUNE 15,
1972, BUT HIS REASON FOR NOT HAVING DONE SO SEEMS TO BE BASED UPON THE
DESIRE TO MEET WITH FORMER COLLEAGUES. THE RECORD IS DEVOID OF ANY
INDICATION THAT FOR MR. MALESKY TO HAVE MADE THE 5:05 P.M. FLIGHT THAT
HE WOULD HAVE BEEN "UNDULY INCONVENIENCED."
ACCORDINGLY, IT IS OUR VIEW THAT THE DISALLOWANCE OF PER DIEM ON JUNE
16, 1972, WAS PROPER.
THE VOUCHER, WITH ACCOMPANYING PAPERS, IS RETURNED HEREWITH.
B-177218, JAN 18, 1973
BID PROTEST - IFB CANCELLATION - NEW WAGE DETERMINATION
DECISION DENYING THE PROTEST OF LEO JOURNAGAN CONSTRUCTION CO., INC.,
AGAINST THE REJECTION OF ALL BIDS UNDER AN IFB ISSUED BY THE U.S. ARMY
CORPS OF ENGINEERS.
IF AN EXTENSION TO A DAVIS-BACON ACT WAGE DETERMINATION IS NOT
REQUESTED AND A NEW WAGE DETERMINATION, CHANGING THE WAGE RATES IS MADE,
THE IFB TO WHICH THE WAGE DETERMINATION IS APPLICABLE MUST BE CANCELLED.
ASPR 18-704.2(A)(5).
TO LEO JOURNAGAN CONSTRUCTION CO., INC.:
WE REFER TO YOUR LETTER OF NOVEMBER 17, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING AGAINST THE REJECTION OF ALL BIDS UNDER
INVITATION FOR BIDS (IFB) DACW27-72-B-0100, ISSUED BY THE CORPS OF
ENGINEERS.
YOU CONTEND THAT NO BASIS EXISTS FOR THE PROCUREMENT ACTIVITY'S
DETERMINATION THAT THE JOURNAGAN BID WAS UNREASONABLE AS TO PRICE SINCE
THE BID PRICE ONLY SLIGHTLY EXCEEDED THE GOVERNMENT ESTIMATE (DETERMINED
WITHOUT PROFIT) AND WAS WELL WITHIN THE 25-PERCENT LIMITATION OF 33
U.S.C. 624. WHATEVER MERIT THERE MIGHT BE IN THIS POSITION, WE NEED
NOT ADDRESS OURSELVES TO IT SINCE THE MATTER IS RENDERED ACADEMIC BY THE
EXPIRATION OF THE APPLICABLE DAVIS-BACON ACT WAGE DETERMINATION.
ARMED SERVICES PROCUREMENT REGULATION (ASPR) 18-704.2(A)(5) PROVIDES
THAT EXTENSIONS TO WAGE DETERMINATIONS MAY BE REQUESTED WHEN THE
PROCUREMENT ACTIVITY DECIDES THAT IT IS IN THE PUBLIC INTEREST TO DO SO
FOR SEVERAL ENUMERATED REASONS. THE REGULATION FURTHER PROVIDES:
"*** IF AN EXTENSION IS NOT REQUESTED, OR IF IT IS REQUESTED AND
DENIED, A NEW DETERMINATION SHALL BE REQUESTED. IF THE NEW
DETERMINATION CHANGES THE WAGE RATES, THE IFB SHALL BE CANCELLED AND THE
PROCUREMENT READVERTISED USING THE NEW WAGE RATES."
APPARENTLY BECAUSE OF THE CANCELLATION OF THE INSTANT IFB, NO
EXTENSION WAS REQUESTED. MOREOVER, THE ADMINISTRATIVE REPORT, A COPY OF
WHICH WAS PREVIOUSLY PROVIDED TO YOU, STATES THAT THE PROCUREMENT
ACTIVITY WAS UNABLE TO MAKE THE FINDING NECESSARY FOR AN EXTENSION
REQUEST AND, FURTHER, THAT A NEW WAGE DETERMINATION APPLICABLE TO THE
WORK INVOLVED CONTAINS RATE CHANGES.
IN VIEW OF THE RECORD BEFORE US, THERE IS NO BASIS TO QUESTION THE
DECISION OF THE PROCUREMENT ACTIVITY NOT TO REQUEST AN EXTENSION TO THE
THEN APPLICABLE WAGE DETERMINATION. ALSO, SINCE THE RATE CHANGES
CONTAINED IN THE NEW WAGE DETERMINATION PROVIDE A SUFFICIENT BASIS FOR
CANCELING THE IFB IN ACCORDANCE WITH THE CITED ASPR PROVISION, WE CANNOT
OBJECT TO THE CANCELLATION OF THE IFB.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-177308, JAN 18, 1973
CONTRACT - PRICE ADJUSTMENT - MISTAKE IN BID
DECISION DENYING AN ADJUSTMENT IN THE PRICE OF A CONTRACT AWARDED TO
MEEKINS, INC., PURSUANT TO AN IFB ISSUED BY THE BUREAU OF INDIAN
AFFAIRS, WASHINGTON, D.C., FOR ROCK.
A BIDDER WHO MAKES A MISTAKE IN BID WILL BE HELD TO THAT BID PRICE IF
HE VERIFIED ITS CORRECTNESS AFTER HAVING BEEN NOTIFIED OF THE
POSSIBILITY OF MISTAKE BY THE CONTRACTING OFFICER EVEN IF THERE WAS SOME
DISCREPANCY BETWEEN THE BIDDER'S PRICE AND THE NEXT LOW BID PRICE WHERE
SUCH DISCREPANCY WAS REASONABLE UNDER THE CIRCUMSTANCES.
TO MEEKINS, INC.:
BY REPORT DATED OCTOBER 20, 1972, THE ACTING DIRECTOR OF SURVEY AND
REVIEW FORWARDED FOR OUR CONSIDERATION YOUR REQUEST FOR AN UPWARD
CONTRACT ADJUSTMENT AS A RESULT OF AN ALLEGED MISTAKE IN BID ON ITEMS 1
AND 2 UNDER INVITATION FOR BIDS BIA-K51-590, ISSUED BY THE BUREAU OF
INDIAN AFFAIRS, WASHINGTON, D.C.
ALL OR NONE BIDS WERE SOLICITED F.O.B. DESTINATION FOR ITEMS 1 AND 2,
"ROCK COARSE AGGREGATE GRADE NO. 11 AND NO. 15," 1,800 AND 1,500 TONS,
RESPECTIVELY. OF THE TWO BIDS RECEIVED AND OPENED FEBRUARY 23, 1972,
MEEKINS BID $2.15/TON FOR ITEM 1 AND $2.50/TON FOR ITEM 2. THE OTHER
BID WAS $4.58/TON FOR BOTH ITEMS. ON FEBRUARY 25, 1972, THE CONTRACTING
OFFICER TELEGRAPHED MEEKINS REQUESTING IT TO VERIFY ITS BID IN VIEW OF
THE SIGNIFICANT PRICE DIFFERENCE COMPARED WITH THE NEXT LOW BID. ON
FEBRUARY 29, 1972, THE CONTRACTING OFFICER CALLED MEEKINS' VICE
PRESIDENT TO CONFIRM RECEIPT OF THE TELEGRAM AND AT THAT TIME RECEIVED
VERIFICATION OF THE BID AS SUBMITTED. BASED UPON THIS VERIFICATION, A
CONTRACT WAS AWARDED MEEKINS FOR ITEMS 1 AND 2 ON MARCH 1, 1972.
ON MARCH 9, 1972, MEEKINS WROTE THE CONTRACTING OFFICER ALLEGING THAT
ITS PRICE WAS ERRONEOUSLY COMPUTED ON THE BASIS OF THE WRONG
DESTINATION, WHICH RESULTED IN A TRANSPORTATION CHARGE OF $0.65/TON.
CORRECTION WAS REQUESTED TO $1.75/TON. ON APRIL 28, 1972, MEEKINS AGAIN
WROTE THE CONTRACTING OFFICER APPRISING HIM THAT AN ALTERNATE TRUCKER
WAS USED TO MAKE THE DELIVERIES AT $1.50/TON, WHICH WOULD RESULT IN A
$0.25/TON CREDIT IN THE EVENT THE REQUESTED CORRECTION WAS ACCOMPLISHED.
THE GENERAL RULE WITH RESPECT TO MISTAKES DISCOVERED AFTER AWARD OF A
CONTRACT WAS STATED IN B-172205, MARCH 30, 1971, QUOTING FROM B-168788,
MAY 18, 1970:
"WE HAVE CONSISTENTLY HELD THAT THE RESPONSIBILITY FOR PREPARATION OF
A BID RESTS WITH THE BIDDER.
THEREFORE, A BIDDER WHO MAKES A MISTAKE IN A BID WHICH HAS BEEN
ACCEPTED IN GOOD FAITH BY THE GOVERNMENT MUST BEAR THE CONSEQUENCES
UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER HAD EITHER
ACTUAL OR CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD."
IN THIS CASE, THE CONTRACTING OFFICER ADVISED MEEKINS OF THE
DISCREPANCY BETWEEN ITS BID AND THE NEXT LOW BID AND REQUESTED AND
RECEIVED VERIFICATION FROM MEEKINS THAT THE BID WAS CORRECT AS
SUBMITTED. MOREOVER, THE CONTRACTING OFFICER STATES THAT HE WAS NOT ON
CONSTRUCTIVE NOTICE OF ERROR FOLLOWING MEEKINS' VERIFICATION SINCE THIS
PROCUREMENT WAS NOT RESTRICTED TO SMALL BUSINESS PARTICIPATION, AS HAD
BEEN PRIOR PROCUREMENTS, ASSUMING APPARENTLY THAT THE LOWER MEEKINS
PRICE WAS BROUGHT ABOUT BY THE POSSIBILITY OF INCREASED COMPETITION.
THEREFORE, WE CONCLUDE THAT ANY ERROR COMMITTED BY MEEKINS IN ITS BID
WAS UNILATERAL AND NO LEGAL BASIS EXISTS FOR ITS CORRECTION.
B-177505, JAN 18, 1973
CIVILIAN PERSONNEL - UNPAID WAGES - QUESTIONS OF FACT
DECISION SUSTAINING PRIOR DENIAL OF THE CLAIM OF MANUEL F.
MANGALINDAN FOR UNPAID WAGES WHILE WORKING AS A FOOD HANDLER WITH THE
U.S. MEDICAL DEPARTMENT, FT. STOTSENBURG, PAMPANGA, PHILIPPINES, FROM
1941 TO 1945.
IN CASES INVOLVING A DISPUTE OVER QUESTIONS OF FACT BETWEEN A
CLAIMANT AND THE ADMINISTRATIVE OFFICE, GAO WILL ACCEPT THE
ADMINISTRATIVE DETERMINATION IN THE ABSENCE OF CLEAR EVIDENCE TO THE
CONTRARY.
TO MR. MANUEL F. MANGALINDAN:
WE REFER FURTHER TO YOUR LETTER OF APRIL 5, 1972, AND PRIOR
CORRESPONDENCE REQUESTING REVIEW AND RECONSIDERATION OF A SETTLEMENT BY
OUR CLAIMS DIVISION DATED APRIL 11, 1950, THAT PARTIALLY DISALLOWED YOUR
CLAIM.
THE RECORD INDICATES YOU FILED A CLAIM FOR UNPAID WAGES ON AUGUST 15,
1949, WITH THE UNITED STATES ARMY PHILIPPINES COMMAND IN THE AMOUNT OF
$337.80 FOR 1,126 DAYS WORKED AS A FOOD HANDLER WITH THE U.S. MEDICAL
DEPARTMENT, FORT STOTSENBURG, PAMPANGA, PHILIPPINES, DURING THE PERIOD
DECEMBER 1, 1941, TO JANUARY 1945. YOUR CLAIM WAS CONSIDERED BY THE
UNITED STATES ARMY PHILIPPINES COMMAND CONTRACT CLAIMS COMMISSION NO.
81, IN SEPTEMBER 1949, WHICH MADE THE FOLLOWING DETERMINATION OF FACT:
"ON 1 SEPTEMBER 1941 AT FORT STOTSENBURG, PHILIPPINES, CLAIMANT BEGAN
WORKING FOR THE U.S. ARMY STATION HOSPITAL AS FOOD HANDLER AT THE RATE
OF .60 PESO(S) (PER DAY). HIS SERVICES WERE TERMINATED ON 24 DECEMBER
1941 AND HE WAS UNPAID FROM 1 DECEMBER 1941 TO 24 DECEMBER 1941 OR A
TOTAL SUM OF 14.40 PESO(S) ($7.20)."
BASED ON THIS DETERMINATION OUR CLAIMS DIVISION ISSUED A CERTIFICATE
OF SETTLEMENT, DATED APRIL 11, 1950, FOR $7.20 IN COMPENSATION FOR
SERVICES RENDERED BY YOU FROM DECEMBER 1, 1941, TO DECEMBER 24, 1941.
WITHOUT PRESENTING ANY NEW EVIDENCE YOU MAINTAIN YOU ARE STILL
ENTITLED TO WAGES FOR THE PERIOD DECEMBER 24, 1941, UNTIL JANUARY 1945
IN WHICH YOU STATE YOU:
"*** CONTINUED AS A CIVILIAN FOOD HELPER OF THE U.S. ARMY FOR MAJOR
NORTH (MC), OF THE SAID HOSPITAL TOGETHER WITH LT. FLORENCE MCDONALD,
THE (HEAD NURSE) ***."
OUR OFFICE EXAMINES AND SETTLES CLAIMS ON THE BASIS OF THE WRITTEN
RECORD BEFORE IT. IN CASES INVOLVING A DISPUTE OVER QUESTIONS OF FACT
BETWEEN A CLAIMANT AND THE ADMINISTRATIVE OFFICE IT IS THE RULE OF THIS
OFFICE TO ACCEPT THE ADMINISTRATIVE RECORD AND THE STATEMENT OF FACTS
FURNISHED BY THE ADMINISTRATIVE OFFICE IN THE ABSENCE OF CLEAR EVIDENCE
TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. IN THE INSTANT
CASE THE DEPARTMENT OF THE ARMY DETERMINED THAT YOUR SERVICES WERE
TERMINATED ON DECEMBER 24, 1941, AND YOU HAVE PRESENTED NO EVIDENCE TO
OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. ACCORDINGLY, THE
DENIAL OF YOUR CLAIM FOR WAGES AFTER DECEMBER 24, 1941, BY OUR CLAIMS
DIVISION WAS PROPER AND IS HEREBY SUSTAINED.
B-108846, JAN 17, 1973
CIVILIAN EMPLOYEE - RECLASSIFICATION OF POSITION - COMPENSATION
DECISION REGARDING THE CLAIM OF MILTON H. FRIEDENBERG, AN EMPLOYEE OF
THE DEPARTMENT OF THE AIR FORCE, FOR COMPENSATION AT A GRADE LEVEL
HIGHER THAN THAT TO WHICH WAS APPOINTED FOR THE PERIOD FEBRUARY 21,
1966, THROUGH APRIL 4, 1970.
SINCE NEITHER THE DEPARTMENT OF THE AIR FORCE NOR THE CIVIL SERVICE
COMMISSION HAS DETERMINED THAT CLAIMANT WAS ENTITLED TO BE RESTORED TO A
GRADE GS-13 POSITION AS OF AUGUST 25, 1968, OR ANY OTHER DATE, GAO IS
WITHOUT AUTHORITY TO ALLOW BACK PAY ON THIS CLAIM. FURTHERMORE, THE
RECORD DOES NOT INDICATE THE PRESENCE OF DISCRIMINATION BASED ON RACE OR
SEX IN VIOLATION OF 5 U.S.C. 7154, OR THE INTENTIONAL MISCLASSIFICATION
OF THE POSITION TO A LOWER GRADE LEVEL.
TO MR. MILTON H. FRIEDENBERG:
WE REFER TO YOUR LETTER OF AUGUST 31, 1972, REQUESTING
RECONSIDERATION OF THE SETTLEMENT OF OUR CLAIMS DIVISION, Z-628432,
SEPTEMBER 13, 1971, BY WHICH YOUR CLAIM FOR COMPENSATION AT A GRADE
LEVEL HIGHER THAN THAT TO WHICH YOU WERE APPOINTED FOR THE PERIOD
FEBRUARY 21, 1966, THROUGH APRIL 4, 1970, WAS DISALLOWED. APPARENTLY
THE SETTLEMENT CERTIFICATE ISSUED SEPTEMBER 13 DID NOT REACH YOU
ALTHOUGH A COPY THEREOF WAS SENT WITH THE CLAIMS DIVISION LETTER OF JUNE
20, 1972. IT IS UNFORTUNATE THAT YOU WERE NOT ADVISED OF THE ACTION
TAKEN BY THE CLAIMS DIVISION IN A TIMELY BASIS; HOWEVER, SINCE THE
ORIGINAL SETTLEMENT CERTIFICATE WAS NOT RETURNED TO OUR OFFICE WE CANNOT
EXPLAIN WHY YOU DID NOT RECEIVE THAT CERTIFICATE SHORTLY AFTER THE DATE
ON WHICH IT WAS ISSUED.
THE INFORMATION WHICH YOU HAVE FURNISHED SO FAR AS PERTINENT TO OUR
CONSIDERATION OF YOUR REQUEST FOR REVIEW INDICATES THAT YOU WERE
APPOINTED TO A GRADE GS-12 POSITION IN THE DEPARTMENT OF THE AIR FORCE
ON FEBRUARY 21, 1966. IT APPEARS THAT THE POSITION TO WHICH YOU WERE
APPOINTED HAD BEEN DOWNGRADED FROM GRADE GS-13 TO GRADE GS-12 BEFORE YOU
WERE APPOINTED. ALTHOUGH THE POSITION IN QUESTION WAS AGAIN CLASSIFIED
TO GRADE GS-13 IN 1968, IT WAS FILLED UNDER THE PROVISIONS OF THE MERIT
PROMOTION PLAN BY THE APPOINTMENT OF ANOTHER EMPLOYEE EFFECTIVE
SEPTEMBER 8, 1968. THE RECORD SHOWS THAT YOU WERE REASSIGNED EFFECTIVE
AUGUST 25, 1968, TO A DIFFERENT GRADE GS-12 POSITION. AS A RESULT OF A
GRIEVANCE YOU FILED IT WAS DETERMINED ON MARCH 13, 1970, THAT YOUR
REASSIGNMENT SHOULD HAVE BEEN TREATED AS AN ADVERSE ACTION BECAUSE IT
INVOLVED A REDUCTION IN RANK. SINCE YOU WERE NOT GIVEN THE PROCEDURAL
PROTECTIONS REQUIRED IN ADVERSE ACTION CASES THE REASSIGNMENT WAS
DETERMINED TO BE INEFFECTIVE. THE ACTION TAKEN IN ACCORDANCE WITH THE
FINDINGS IN YOUR GRIEVANCE APPEAL RESULTED IN THE CORRECTION OF RECORDS
TO SHOW THAT YOU HAD REMAINED IN THE GRADE GS-12 POSITION WHICH YOU HAD
OCCUPIED PRIOR TO THE REASSIGNMENT. YOUR PROMOTION TO GRADE GS-13 WAS
EFFECTED ON APRIL 5, 1970, SHORTLY AFTER YOUR GRIEVANCE WAS DECIDED.
YOUR CLAIM FOR PAY AT THE GS-13 LEVEL FOR THE PERIOD INVOLVED IS
PREDICATED ON YOUR CONTENTION THAT THE POSITION TO WHICH YOU WERE
APPOINTED WAS MISCLASSIFIED AT THE TIME AND THAT YOU HAVE PERFORMED
DUTIES EQUIVALENT TO GRADE GS-13 SINCE THE DATE OF YOUR REEMPLOYMENT.
WE POINT OUT THAT NEITHER YOUR AGENCY NOR THE CIVIL SERVICE
COMMISSION HAS DETERMINED THAT YOU WERE ENTITLED TO BE RESTORED TO A
GRADE GS-13 POSITION AS OF AUGUST 25, 1968, OR ANY OTHER DATE. IN VIEW
THEREOF, WE ARE WITHOUT AUTHORITY TO ALLOW YOU BACK PAY ON THAT BASIS.
THE RECENT DECISION 50 COMP. GEN. 581 (1971), COPY ENCLOSED, TO WHICH
YOU REFER IN YOUR CORRESPONDENCE, INVOLVED FACTS SOMEWHAT SIMILAR TO
THOSE IN YOUR CASE, BUT THERE IT WAS ESTABLISHED THAT THE EMPLOYEE
CONCERNED HAD BEEN APPOINTED TO A POSITION WHICH HAD BEEN INTENTIONALLY
MISCLASSIFIED IN A GRADE LOWER THAN THE ONE IN WHICH IT SHOULD HAVE BEEN
PLACED DUE TO DISCRIMINATION ON ACCOUNT OF RACE OR SEX. IT WAS HELD
THAT THE INTENTIONAL MISCLASSIFICATION AND APPOINTMENT VIOLATED THE
PROVISIONS OF 5 U.S.C. 7154 AND THE REGULATIONS ISSUED THEREUNDER, WHICH
PROHIBIT DISCRIMINATION BECAUSE OF RACE, COLOR, CREED, SEX, OR MARITAL
STATUS IN THE ADMINISTRATION OF PERSONAL LAWS. ACCORDINGLY, THE
APPOINTMENT ACTION WAS HELD ILLEGAL AND A RETROACTIVE ADJUSTMENT OF THE
EMPLOYEE'S COMPENSATION WAS AUTHORIZED. SINCE THE INFORMATION YOU
FURNISHED DID NOT CONTAIN ANY ALLEGATION THAT SUCH PROHIBITED
DISCRIMINATION WAS INVOLVED, NOR DOES IT SHOW AN INTENTIONAL
MISCLASSIFICATION OF A POSITION TO A LOWER GRADE, ANY MISCLASSIFICATION
OF THE GS-12 POSITION TO WHICH YOU WERE APPOINTED CANNOT SERVE AS A
BASIS FOR THE RETROACTIVE ADJUSTMENT OF YOUR COMPENSATION UNDER THE
RULES ESTABLISHED.
ACCORDINGLY, THE SETTLEMENT OF THE CLAIMS DIVISION WHICH DISALLOWED
YOUR CLAIM MUST BE SUSTAINED.
B-176570, JAN 17, 1973
BID PROTEST - AGENCY'S NEEDS REFLECTED IN SPECIFICATIONS -
ADMINISTRATIVE DISCRETION
DECISION DENYING A PROTEST ON BEHALF OF BOSTON PNEUMATICS, INC.,
AGAINST THE OPENING OF BIDS UNDER THREE IFBS ISSUED BY THE GENERAL
SERVICES ADMINISTRATION.
WHILE TWO IFBS HAVE ALREADY BEEN CANCELLED BY GSA ON THE GROUNDS OF
RESTRICTING COMPETITION, THE THIRD IFB IS, NEVERTHELESS, PROPER SINCE
THERE WAS NO SHOWING OF ABUSE OF ADMINISTRATIVE DISCRETION IN THE
GOVERNMENT'S DETERMINATION OF ITS NEEDS AS REFLECTED IN THE DRAFTING OF
THE SPECIFICATIONS. ACCORDINGLY, THE COMP. GEN. IS UNABLE TO SET-ASIDE
THE THIRD IFB AND THE PROTEST IS, THEREFORE, DENIED.
TO STASSEN, KOSTOS AND MASON:
WE REFER TO YOUR LETTERS OF JULY 18 AND 20, 1972, ON BEHALF OF BOSTON
PNEUMATICS, INC. (BP), PROTESTING AGAINST THE OPENING OF BIDS UNDER
INVITATIONS FOR BIDS FPNTP-B-5-46692-A-7-20-72, -B6-46583-A-7-21-72, AND
-B6-39610-RA-7-27-72, ALL ISSUED BY THE GENERAL SERVICES ADMINISTRATION
(GSA).
THE PROTEST WITH RESPECT TO INVITATION -46692 HAS BEEN WITHDRAWN, AND
GSA CANCELED INVITATION -46583 ON THE BASIS THAT A TECHNICAL REVIEW
SHOWED THE PURCHASE DESCRIPTION FOR THE ITEM INVOLVED TO BE INADEQUATE
AND RESTRICTIVE FOR COMPETITIVE BIDDING. THERE REMAINS FOR
CONSIDERATION, THEN, ONLY THE PROTEST CONCERNING INVITATION -39610.
INVITATION -39610 ANTICIPATED THE AWARD OF A DEFINITE QUANTITY
CONTRACT FOR PULL TESTER KITS, SWAGED CABLE TERMINAL, ON A BRAND NAME OR
EQUAL BASIS. BIDS WERE TO BE OPENED ON JULY 27, 1972, AND THAT EVENT
TOOK PLACE AS SCHEDULED NOTWITHSTANDING BP'S PROTEST. BP, IN ITS LETTER
OF JULY 17, 1972, TO GSA, CONTENDS THAT THE INVITATION IS "IN EXCESS OF
THE NEEDS OF THE AGENCY IN THAT THE PURCHASE DESCRIPTION AS WRITTEN IS
SO VAGUE, INCOMPLETE AND CONTRADICTORY THAT IT RESTRICTS COMPETITION TO
THE BRAND NAME REFERENCED ONLY." IN SUPPORT OF THIS PROPOSITION, THE
LETTER OUTLINES SOME 18 AREAS ALLEGED TO BE DEFICIENT IN SOME REGARD.
THE ALLEGED DEFICIENCIES WERE REVIEWED BY THE SAME GSA TECHNICAL
ACTIVITY WHICH CONCURRED WITH BP'S VIEWS REGARDING INVITATION -46583.
THE TECHNICAL REPORT OF THAT ACTIVITY, A COPY OF WHICH WAS FURNISHED TO
YOU BY OUR OFFICE, WAS AN ITEM BY ITEM REBUTTAL OF BP'S POSITION AND WAS
THE BASIS FOR THE CONTRACTING OFFICER'S CONCLUSION THAT BP'S ALLEGATIONS
WERE WITHOUT MERIT, AND THAT THE PURCHASE DESCRIPTION WAS SUFFICIENT FOR
COMPETITIVE BIDDING. FROM OUR REVIEW OF THE REPORT - AS TO WHICH YOU
OFFERED NO COMMENTS - WE CANNOT SAY THAT FINDINGS REACHED THEREIN DID
NOT CONSTITUTE A SATISFACTORY REPLY TO YOUR ALLEGATIONS.
THE DETERMINATION OF THE GOVERNMENT'S NEEDS AND THE DRAFTING OF
SPECIFICATIONS TO MEET THOSE NEEDS ARE RESPONSIBILITIES VESTED IN THE
PROCUREMENT ACTIVITY AND NOT OUR OFFICE. CONSEQUENTLY, WE WILL NOT
QUESTION THE ACTIONS OF THE PROCUREMENT ACTIVITY IN THESE AREAS UNLESS
IT IS CLEARLY SHOWN THAT THE ADMINISTRATIVE DISCRETION WAS ABUSED. SEE
B-175153, APRIL 20, 1972. NO SUCH SHOWING HAS BEEN PRESENTED HERE AND,
THUS, WE CANNOT CONCLUDE THAT THE SPECIFICATIONS COMPLAINED OF DO NOT
REPRESENT THE LEGITIMATE NEEDS OF THE GOVERNMENT.
SINCE WE CANNOT CONCLUDE THAT THE BP POSITION HAS MERIT OR THAT THE
CONTRACTING OFFICER WAS REMISS IN RELYING ON THE ADVICE OF THE TECHNICAL
ACTIVITY (SEE B-175153, SUPRA), THE PROTEST IS DENIED.
B-176678, JAN 17, 1973
BID PROTEST - PATENT INFRINGEMENT CLAUSE - SAFETY REQUIREMENTS
DENIAL OF PROTEST BY PAK-MOR MANUFACTURING CO. AGAINST THE IMPENDING
AWARD OF A CONTRACT FOR REFUSE COLLECTION VEHICLES TO DEMPSTER BROTHERS,
INC., UNDER AN IFB ISSUED BY THE U.S. ARMY TANK-AUTOMOTIVE COMMAND.
SINCE THE PATENT INDEMNITY CLAUSE IS REQUIRED BY ASPR 9-103 AND
9-103.1, AND SINCE THE EXCEPTION TAKEN TO THAT CLAUSE BY PAK-MOR
OBVIOUSLY HAS AN IMPACT ON PRICE AND ATTEMPTED TO LIMIT THE GOVERNMENT'S
RIGHTS UNDER THE CLAUSE, A VALID BASIS EXISTED FOR FINDING ITS BID
NON-RESPONSIVE IN ACCORDANCE WITH THE REQUIREMENTS OF ASPR 2-402.2.
ALSO, SINCE THE EQUIPMENT WAS INTENDED TO ELIMINATE THE POSSIBILITY OF
INJURY, THE COMP. GEN. BELIEVES THE REQUIREMENT IS JUSTIFIED WITHOUT
HAVING TO PROVE THAT INJURIES HAVE RESULTED FROM PRESENT EQUIPMENT.
TO PAK-MOR MANUFACTURING COMPANY:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 9, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING AGAINST THE PENDING AWARD OF A CONTRACT FOR
REFUSE COLLECTION VEHICLES TO DEMPSTER BROTHERS, INC., UNDER INVITATION
FOR BIDS (IFB) DAAE07-72-B-0122, ISSUED BY THE U.S. ARMY TANK-AUTOMOTIVE
COMMAND.
ALTHOUGH PAK-MOR'S BID PRICES WERE SLIGHTLY LOWER THAN DEMPSTER'S FOR
THE ITEMS BEING PROCURED, ITS BID WAS ULTIMATELY REJECTED FOR BEING
NONRESPONSIVE BECAUSE AN ACCOMPANYING LETTER TOOK EXCEPTION TO THE
PATENT INDEMNITY CLAUSE OF THE IFB. THE BASIS FOR THIS EXCEPTION, AS
WELL AS THE CONTENTION THAT THE IFB CONTAINED A RESTRICTIVE
SPECIFICATION, IS THE LANGUAGE OF SPECIFICATION 3.7.1 WHICH PAK-MOR
CONTENDS SPELLS OUT A DEVICE COVERED BY A DEMPSTER PATENT. IT IS OUR
CONCLUSION THAT THE REJECTION OF PAK-MOR'S BID WAS JUSTIFIED IN THIS
INSTANCE.
SPECIFICATION 3.7.1 STATES:
"*** THE COMPACTION AND EJECTION PLATE SHALL BE PROVIDED WITH A MEANS
OF RELEASING, WHEN MATERIALS WEDGE BETWEEN THE TOP OF THE PACKER PLATE
AND THE ROOF OF THE BODY. THE RELEASE SHALL BE OBTAINED ON THE
WITHDRAWAL STROKE AND SHALL NOT PERMIT WASTE TO FALL INTO THE REVERSE
SIDE OF THE COMPACTION AND EJECTOR PLATE."
IN THE ORIGINAL ADMINISTRATIVE REPORT, IT IS STATED THAT THE USING
ACTIVITY CONTENDS THAT THE SPECIFICATION REFLECTS A PERFORMANCE RATHER
THAN A DESIGN REQUIREMENT. MOREOVER, THE REQUIREMENT IS JUSTIFIED ON
THE GROUNDS OF SAFETY AND THE MINIMIZATION OF DOWNTIME. SPECIFICALLY,
IT IS NOTED THAT PERSONNEL ENTERING THE CONTAINER BODY OF THE VEHICLE TO
MANUALLY DISLODGE WEDGED MATERIAL COULD SUSTAIN SERIOUS OR FATAL INJURY
THROUGH THE INADVERTENT ACTUATION OF THE COMPACTION PLATE. IT ALSO
STATES THAT DOWNTIME MAY BECOME PROHIBITIVE WHEN THE COMPACTION PLATE IS
DAMAGED BY WEDGED MATERIAL.
IN ITS RESPONSE, PAK-MOR TAKES ISSUE WITH THE USING ACTIVITY'S
POSITION AND CONTENDS THAT NO SPECIFIC INSTANCE OF JAMMING, INJURY, OR
DOWNTIME DUE TO WEDGING OF MATERIAL HAS BEEN REPORTED TO IT. PAK-MOR
ALSO NOTES THAT PERSONNEL WITHIN THE COMPACTION UNIT CAN BE PROTECTED BY
TURNING OFF THE POWER SOURCE TO THE UNIT.
AS A RESULT OF THIS REPLY, OUR OFFICE REQUESTED FURTHER ADVICE
CONCERNING THE SAFETY ASPECTS OF THE USING ACTIVITY'S POSITION. THE
GIST OF THAT REPLY (COPY ENCLOSED) IS THAT WHILE NO ACTUAL INJURIES HAVE
BEEN REPORTED THERE IS ALWAYS THE POSSIBILITY THAT THE POWER SOURCE TO
THE COMPACTION UNIT WILL BE INADVERTENTLY ACTIVATED WHILE CLEANING IS IN
PROGRESS.
ON THE BASIS OF THE PRESENT RECORD, WE CANNOT CONCLUDE THAT THERE IS
NOT A REASONABLE BASIS FOR THE SPECIFICATION REQUIREMENT. ALTHOUGH NO
INJURIES HAVE RESULTED FROM AN INADVERTENT ACTIVATION OF THE COMPACTION
UNIT, IT APPEARS THAT THE POSSIBILITY OF SUCH AN OCCURRENCE STILL
REMAINS EVEN THOUGH OPERATING PROCEDURES MAY REQUIRE THE INTERRUPTION OF
POWER TO THE COMPACTOR. SINCE EQUIPMENT OF THE TYPE REQUIRED UNIT OF
THE VEHICLE IN THE FIRST INSTANCE AND, THUS, ELIMINATE THE POSSIBILITY
OF INJURY, WE BELIEVE THE REQUIREMENT IS JUSTIFIED WITHOUT THE NECESSITY
OF HAVING TO PROVE THAT INJURIES HAVE RESULTED FROM PRESENT EQUIPMENT.
CONSEQUENTLY, WE DO NOT CONSIDER THE SPECIFICATION REQUIREMENT TO BE AN
UNDUE RESTRICTION ON COMPETITION.
WITH RESPECT TO THE QUESTION OF POSSIBLE PATENT INFRINGEMENT, OUR
OFFICE HAS TAKEN THE POSITION THAT SECTION 1498 OF TITLE 28, UNITED
STATES CODE, AUTHORIZES THE GOVERNMENT TO UTILIZE OR PERMIT THE USE OF
PATENTED INVENTIONS UNDER A GOVERNMENT CONTRACT WITHOUT A LICENSE,
SUBJECT TO PAYMENT OF REASONABLE COMPENSATION FOR SUCH USE. SEE
B-166072(1), MARCH 28, 1969; B-157485, NOVEMBER 26, 1965.
MOREOVER, WE HAVE HELD ON FACTS SIMILAR TO THOSE OF THE INSTANT CASE
THAT THE EXISTENCE OF SECTION 1498, SUPRA, OBVIATES ANY BASIS FOR
RELAXING A SPECIFICATION EVEN IF IT ACTUALLY INFRINGES ON AN EXISTING
PATENT. B-166788, JULY 31, 1969. INFRINGEMENT OF A PATENT, THEREFORE,
DOES NOT PROVIDE A BASIS FOR FINDING A SPECIFICATION RESTRICTIVE.
SINCE THE PATENT INDEMNITY CLAUSE IS REQUIRED BY ARMED SERVICES
PROCUREMENT REGULATION (ASPR) 9-103 AND 9-103.1, AND SINCE THE EXCEPTION
TAKEN TO THAT CLAUSE BY PAK-MOR OBVIOUSLY HAD AN IMPACT ON PRICE AND
ATTEMPTED TO LIMIT THE GOVERNMENT'S RIGHTS UNDER THE CLAUSE, A VALID
BASIS EXISTED FOR FINDING ITS BID NONRESPONSIVE IN ACCORDANCE WITH THE
REQUIREMENTS OF ASPR 2-402.2.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176081, JAN 16, 1973
BID PROTEST - SOLICITATION REQUIREMENTS - APPROVED NEW DRUG APPLICATION
DECISION DENYING THE PROTEST OF CLINICAL SUPPLY CORPORATION AGAINST
REJECTION OF OFFERS UNDER THREE SOLICITATIONS ISSUED BY THE DEFENSE
PERSONNEL SUPPORT CENTER (DPSC), PHILADELPHIA, PA., FOR BRAIDED SURGICAL
SILK SUTURES.
THE DEFENSE MEDICAL MATERIEL BOARD (DMMB) DETERMINES THE MINIMUM
NEEDS OF THE DEPARTMENT OF DEFENSE WITH REGARD TO ANY ASPECT OF
PROFESSIONAL MEDICAL END ITEMS. B-173683, NOVEMBER 29, 1971. SUCH
DETERMINATION CONSTITUTES A TECHNICAL DECISION WHICH WILL NOT BE
QUESTIONED BY GAO UNLESS UNREASONABLE OR ARBITRARY, EVEN THOUGH IT
REPRESENTS A REQUIREMENT NOT INCLUDED IN PAST PROCUREMENTS. SEE 49
COMP. GEN. 857, 862 (1970). MOREOVER, DMMB'S DETERMINATION IN THIS CASE
BINDS DPSC TO INCLUDE ONLY THE REQUIREMENT FOR POSSESSION OF A "NEW DRUG
APPLICATION" APPROVED BY THE FOOD AND DRUG ADMINISTRATION (FDA) FOR
THOSE ITEMS LISTED BY THE FDA AS "NEW DRUGS." ACCORDINGLY, SINCE THE
PROCURING ACTIVITY ACTED IN GOOD FAITH AND IS REASONABLE IN ITS
INCLUSION OF THIS REQUIREMENT IN THE SOLICITATION, THE PROTEST MUST BE
DENIED.
TO MR. JOHN NOVIC:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING AGAINST REJECTION OF YOUR OFFERS UNDER THREE
SOLICITATIONS, DSA120-72-R-1828, -1987 AND -2245, ISSUED BY THE DEFENSE
PERSONNEL SUPPORT CENTER (DPSC), PHILADELPHIA, PENNSYLVANIA, FOR BRAIDED
SURGICAL SILK SUTURES. IN EACH INSTANCE YOUR OFFER WAS REJECTED AS
NONRESPONSIVE BY VIRTUE OF NONCOMPLIANCE WITH A MATERIAL REQUIREMENT OF
THE SOLICITATION THAT THE OFFEROR SUBMIT WITH HIS BID EVIDENCE THAT HE
IS IN POSSESSION OF A "NEW DRUG APPLICATION" (NDA) APPROVED BY THE FOOD
AND DRUG ADMINISTRATION (FDA) FOR THE MANUFACTURE OF THIS TYPE SUTURE.
YOU CONTEND THAT THE SOLICITATION REQUIREMENT THAT OFFERORS POSSESS
AN APPROVED NDA FOR THE SUTURES TO BE PROCURED WAS UNREASONABLE BECAUSE
IT ADDED NOTHING TO THE QUALITY OF THE PRODUCT AS EVIDENCED BY THE FACT
THAT YOU ARE CURRENTLY PRODUCING THE IDENTICAL SUTURES CALLED FOR BY THE
PROTESTED SOLICITATIONS UNDER EXISTING DPSC CONTRACTS. YOU ALSO
MAINTAIN THAT IN ANY CASE YOU SATISFIED FDA REQUIREMENTS TO PERMIT
CONTINUED COMMERCIAL MARKETING OF YOUR SUTURES BECAUSE YOU ARE THE
HOLDER OF A "DEEMED APPROVED" NEW DRUG APPLICATION IN ACCORDANCE WITH
APPLICABLE FDA REGULATIONS AND THAT HENCE YOUR OFFER SHOULD NOT HAVE
BEEN DECLARED NONRESPONSIVE. IN THIS REGARD, YOU POINT OUT THAT YOU
SUBMITTED AN ABBREVIATED NDA TO FDA ON MARCH 14, 1972, WHICH YOU
MAINTAIN IS ALL THAT IS REQUIRED BY FDA TO PERMIT CONTINUED MARKETING OF
YOUR SUTURES.
YOU FURTHER ALLEGE THAT THE REQUIREMENT FOR AN APPROVED NDA UNDER THE
INSTANT SOLICITATIONS WAS INSERTED SPECIFICALLY TO FAVOR ETHICON, INC.,
THE ONLY CURRENT HOLDER OF AN APPROVED NDA FOR THE SUBJECT SUTURES, AND
THAT THE REQUIREMENT WAS INSERTED "ONLY AFTER" ETHICON OBTAINED THE
REQUIRED APPROVAL. IN FURTHERANCE OF THIS ALLEGATION YOU POINT TO A
RECENT OPEN MARKET PURCHASE FROM ETHICON OF THE SUBJECT SUTURES AT A
PRICE IN EXCESS OF THAT FOR WHICH THE IDENTICAL SUTURES COULD HAVE BEEN
OBTAINED UNDER THE OPTION PROVISIONS OF AN EXISTING CLINICAL CONTRACT.
ALSO YOU POINT TO TWO OTHER RECENT DPSC SOLICITATIONS FOR DIFFERENT
TYPES OF SUTURES, CONTENDING IN ESSENCE THAT THOSE SOLICITATIONS EITHER
DID OR DID NOT REQUIRE APPROVED NDA'S ACCORDING TO WHETHER OR NOT
ETHICON HAD PREVIOUSLY SECURED APPROVAL WITH RESPECT TO THOSE SPECIFIC
SUTURES AND WITHOUT REGARD FOR FDA NDA REQUIREMENTS.
FINALLY, YOU CONTEND THAT DPSC TECHNICAL PERSONNEL LACK THE
COMPETENCE AND THE EQUIPMENT TO TEST THE ACCEPTABILITY OF
CONTRACT-SUPPLIED SUTURES AND IN ANY EVENT THAT THE NDA REQUIREMENT
CANNOT BE VIEWED AS AN ACCEPTABLE SUBSTITUTE FOR ACCEPTANCE TESTING.
YOU CITE IN THIS REGARD A RECENT DECISION OF THE ARMED SERVICES BOARD OF
CONTRACT APPEALS (ASBCA) IN CLINICAL'S FAVOR WHICH YOU CONTEND HOLDS
THAT SUCH TECHNICAL COMPETENCE IS LACKING IN DPSC PERSONNEL. YOU ALSO
MAKE GENERAL, UNDOCUMENTED ALLEGATIONS CONCERNING WHAT YOU CONSIDER TO
BE CONFLICTS OF INTEREST AND GENERALLY UNETHICAL CONDUCT ON THE PART OF
SPECIFIC DPSC PERSONNEL.
THE DEFENSE SUPPLY AGENCY ADMINISTRATIVE REPORT, INCLUDING THE
STATEMENT OF THE DPSC CONTRACTING OFFICER, SUMMARIZES THE HISTORY
LEADING UP TO THE REQUIREMENT BY FDA THAT MANUFACTURERS OF CERTAIN
ENUMERATED DRUGS AND MEDICAL PRODUCTS (SUCH AS THE SUTURES HERE
INVOLVED) CLASSIFIED AS "NEW DRUGS" SECURE APPROVAL OF THEIR PRODUCTS
FROM THE DUAL STANDPOINTS OF SAFETY AND EFFECTIVENESS BY MEANS OF FDA
APPROVAL OF PROPERLY DOCUMENTED NDA'S. WITH RESPECT TO "DEEMED
APPROVED" MANUFACTURERS, IT IS REPORTED THAT MANUFACTURERS OF MEDICAL
PRODUCTS COVERED BY THE NDA REQUIREMENT WHO HAD SECURED FDA APPROVAL
PRIOR TO 1962, WHEN THE EFFECTIVENESS CRITERION WAS ADDED TO THE
PREEXISTING SAFETY CRITERION, ARE CONSIDERED TO BE "DEEMED APPROVED"
WITHOUT THE NECESSITY OF SUBMISSION OF A NEW NDA ONCE EFFECTIVENESS DATA
ON THE PRE-1962 APPROVAL PRODUCT HAS BEEN EVALUATED AND FOUND
SUFFICIENT. IT IS ALSO REPORTED THAT FDA HAS NOT INTERFERED WITH THE
COMMERCIAL MARKETING OF PRODUCTS CLASSIFIED AS "NEW DRUGS" BY FDA BUT
WHICH ARE NOT ENTITLED TO "DEEMED APPROVED" STATUS AND FOR WHICH NO NEW
NDA HAS BEEN FILED OR APPROVED, PENDING NDA SUBMISSION.
WITH RESPECT TO THE REQUIREMENT IN THE COMPLAINED OF DPSC
SOLICITATIONS THAT AN APPROVED NDA BE SUBMITTED WITH THE BID,
NOTWITHSTANDING THAT PRIOR CONTRACTS (SOME OF WHICH ARE STILL
OUTSTANDING) CONTAINED NO SUCH REQUIREMENT AND THAT THE REQUIREMENT
REPRESENTS A MORE STRINGENT APPLICATION OF FDA'S RULES THAN FDA ITSELF
IMPOSES, THE REPORT POINTS OUT THAT THE DEFENSE MEDICAL MATERIEL BOARD
(DMMB), CHARGED WITH THE RESPONSIBILITY WITHIN THE DEPARTMENT OF DEFENSE
(DOD) OF SETTING PROCUREMENT POLICY WITH RESPECT TO ITEMS RELATED TO
MEDICAL CARE, DETERMINED IN FEBRUARY 1971 THAT:
"*** THEREAFTER AN APPROVED NEW DRUG APPLICATION WOULD BE A
REQUIREMENT IN A DPSC DRUG PROCUREMENT ONCE FDA ANNOUNCED THAT THAT DRUG
ITEM WAS CONSIDERED BY IT TO BE A 'NEW DRUG' AND THAT ITS MANUFACTURE
AND MARKETING REQUIRED AN FDA APPROVED NEW DRUG APPLICATION."
IT IS STATED THAT THIS DETERMINATION WAS MADE FOLLOWING CONSULTATION
WITH FDA WHEREIN FDA ADVISED DMMB MEMBERS, AMONG OTHER THINGS, THAT THE
FACT THAT FDA DID NOT INTERFERE WITH COMMERCIAL MARKETING OF A "NEW
DRUG" NOT PROPERLY APPROVED "SHOULD NOT BE CONSTRUED AS AN ENDORSEMENT
FOR THE MEDICAL PROFESSION TO USE THE DRUG OF THAT MANUFACTURER" AND
THAT THE DETERMINATION WHETHER DOD SHOULD AUTHORIZE USE OF SUCH DRUGS
RESTED WITH DOD.
ON THE QUESTION OF THE APPLICATION OF THIS GENERAL POLICY TO THE
PROCUREMENTS OF SILK BRAIDED SUTURES OF WHICH YOU COMPLAIN, THE REPORT
STATES THAT ON NOVEMBER 11, 1971, FDA PUBLISHED IN 36 FEDERAL REGISTER
21612 DRUG EFFICACY STUDY IMPLEMENTATION (DESI 4725) WHICH DESIGNATED
FIVE TYPES OF SURGICAL SUTURES, INCLUDING NONABSORBABLE BRAIDED SILK, AS
"NEW DRUGS" AND FURTHER LISTED THE NAMES AND NDA NUMBERS OF THE APPROVED
MANUFACTURERS OF THOSE SUTURES AS HAVING BEEN EVALUATED AS "EFFECTIVE"
IN ACCORDANCE WITH FDA PROCEDURE. ON THE STRENGTH OF THIS FDA
DETERMINATION, THE DMMB ADVISED DPSC IN EARLY DECEMBER 1971 THAT ALL
SUTURES COVERED BY THE NOVEMBER 11 FEDERAL REGISTER PUBLICATION WOULD BE
PROCURED SUBJECT TO THE NDA REQUIREMENT.
THE REPORT STATES FURTHER THAT ETHICON FIRST SECURED NDA APPROVAL FOR
BRAIDED SILK SUTURES IN MARCH 1958 AND FLATLY DISPUTES YOUR CONTENTION
THAT CLINICAL IS A "DEEMED APPROVED" BRAIDED SILK SUTURE MANUFACTURER ON
THE STRENGTH OF ADVICE FROM FDA THAT CLINICAL HAS NOT FILED ANY NDA'S
SAVE ITS APPLICATION IN MARCH 1972, CITED BY YOU, WHICH AS OF THE DATE
OF THE REPORT HAD NOT BEEN APPROVED.
WITH RESPECT TO YOUR ALLEGATIONS CONCERNING THE COMPETENCE AND ETHICS
OF DPSC PERSONNEL, THE REPORT DENIES THAT THE CITED ASBCA DECISION MADE
ANY COMMENT WITH RESPECT TO THE COMPETENCE OF DPSC PERSONNEL AND
DISMISSES YOUR OTHER COMMENTS AS "INSINUATIONS." CONCERNING THE RECENT
PURCHASE OF SILK SUTURES FROM ETHICON, NOTWITHSTANDING A LESS EXPENSIVE
OPTION RIGHT UNDER AN EXISTING CLINICAL CONTRACT, THE REPORT POINTS OUT
THAT THIS PROCUREMENT WAS MADE FOLLOWING THE FDA "NEW DRUG"
DETERMINATION WITH RESPECT TO SILK BRAIDED SUTURES AND THAT, THEREFORE,
POSSESSION OF AN APPROVED NDA ON THE PART OF THE SUCCESSFUL OFFEROR WAS
REQUIRED IN ACCORDANCE WITH THE DMMB DETERMINATION. IN JUSTIFICATION OF
SOLICITING ONLY ETHICON FOR THIS REQUIREMENT, THE REPORT STATES THAT THE
PROCUREMENT WAS MADE ON AN URGENCY BASIS, THEREBY IMPLYING THAT TIME DID
NOT PERMIT SEEKING OF NDA APPROVAL BY OTHER FIRMS.
FOR REASONS SET OUT BELOW, WE CONCLUDE THAT THE APPROVED NDA
REQUIREMENT FOR THE SILK SUTURES HERE INVOLVED IS NOT SUBJECT TO
QUESTION.
AS INDICATED ABOVE, THE DMMB IS RESPONSIBLE FOR SETTING DOD
PROCUREMENT POLICY WITH RESPECT TO MEDICAL ITEMS. THIS RESPONSIBILITY
IS DERIVED FROM DOD DIRECTIVE 5154.18, MAY 26, 1965, WHICH STATES ONE OF
THE ESSENTIAL FUNCTIONS OF THE BOARD TO BE TO -
"PREPARE ESSENTIAL CHARACTERISTICS *** FOR EACH ITEM OF MEDICAL
MATERIEL ENTERING THE DEPARTMENT OF DEFENSE SUPPLY SYSTEM;"
WE HAVE PREVIOUSLY HELD THAT "A DETERMINATION BY THE DMMB CONCERNING
ANY ASPECT OF PROFESSIONAL MEDICAL END ITEMS CONSTITUTES A TECHNICAL OR
SCIENTIFIC DECISION AS TO THE MINIMUM NEEDS OF THE GOVERNMENT" AND THAT
"DPSC HAS NO OPTION OTHER THAN TO ADHERE TO THE DETERMINATIONS OF THE
DMMB." B-173683, NOVEMBER 29, 1971. THE CITED DECISION CONCLUDED THAT
THE DMMB IMPOSED SPECIFICATION RESTRICTIONS IN THAT CASE REPRESENTED "A
VALID AND REASONABLE RESTRICTION ON COMPETITION" - A CONCLUSION WHICH WE
ALSO CONCLUDE THE INSTANT CASE WARRANTS. SEE, ALSO, 50 COMP. GEN. 209,
212 (1970) AND B-150387, JULY 9, 1963. INASMUCH AS THE GENERAL RULE OF
OUR OFFICE IS THAT SPECIFICATION AND BIDDER QUALIFICATION DETERMINATIONS
ARE PRIMARILY THE RESPONSIBILITY OF THE PROCURING AGENCY SUBJECT TO
QUESTION BY US ONLY WHERE UNREASONABLE OR ARBITRARY, WE FIND NO BASIS
FOR QUESTIONING THE ADMINISTRATIVE ACTION IN THIS CASE, EVEN THOUGH IT
REPRESENTS A REQUIREMENT NOT INCLUDED IN PAST PROCUREMENTS. SEE 49
COMP. GEN. 857, 862 (1970); 45 ID. 365 (1965). ALSO, IN THE ABSENCE OF
CONTRARY EVIDENCE IN THE RECORD BEFORE US, WE MUST ACCEPT DPSC'S
STATEMENT ON THE QUESTION OF CLINICAL'S LACK OF "DEEMED APPROVED" NDA
STATUS.
WITH RESPECT TO YOUR CONTENTION THAT NDA APPROVALS ARE USED BY DPSC
TO FAVOR ETHICON, WE THINK THAT THE FACT THAT THE DMMB DETERMINATION TO
APPLY AN ACROSS-THE-BOARD APPROVED NDA REQUIREMENT WAS MADE SOME 9
MONTHS BEFORE FDA PUBLISHED NOTICE THAT BRAIDED SILK SUTURES WERE
SUBJECT TO THE REQUIREMENT IS SUFFICIENT INDICATION OF THE GOOD FAITH OF
BOTH THE DMMB AND THE DPSC. SIMILARLY, THE ADMINISTRATIVE REPORT
INDICATES THAT APPROVED NDA'S ARE REQUIRED BY DPSC ONLY FOR THE FIVE
SUTURES LISTED IN THE NOVEMBER 11, 1971, FEDERAL REGISTER PUBLICATION
(I.E., MERSILENE NONABSORBABLE, POLYESTER FIBER SUTURES; CHROMIC BEEF
SEROSA COLLAGEN ABSORBABLE GUT SUTURES; PLAIN ABSORBABLE GUT SUTURES;
AND BRAIDED NYLON NONABSORBABLE SUTURES, IN ADDITION TO BRAIDED SILK
SUTURES) WHICH IS CONSISTENT WITH THE DMMB DETERMINATION THAT ONLY ITEMS
LISTED BY FDA AS "NEW DRUGS" NEED BE SUBJECTED TO THE NDA REQUIREMENT.
ON THE QUESTION OF THE COMPETENCE OF DPSC EQUIPMENT AND PERSONNEL AND
THE BEARING THE RECENT ASBCA DECISION IN CLINICAL'S FAVOR HAS ON THIS
QUESTION, OUR READING OF THE DECISION INDICATES THAT IT WAS RENDERED IN
CLINICAL'S FAVOR ON THE BASIS OF THE GOVERNMENT'S FAILURE TO SUSTAIN ITS
BURDEN OF PROVING THAT THE SUTURES SUPPLIED UNDER THE CONTRACT THERE IN
DISPUTE DID NOT MEET CONTRACT REQUIREMENTS. AS SUCH, THE DECISION
EXPRESSED NO BINDING OPINION ON THE ADEQUACY OF DPSC PERSONNEL,
EQUIPMENT, OR PROCEDURES BUT MERELY CONCLUDED THAT THE EVIDENCE
PRESENTED AT THE HEARING FAVORED CLINICAL. THEREFORE, THE DECISION IS
NOT ENTITLED TO ANY CONSIDERATION IN DETERMINING DPSC COMPETENCE IN THE
AREA OF ACCEPTANCE TESTING. YOUR OTHER ALLEGATIONS ABOUT DPSC PERSONNEL
ARE UNSUBSTANTIATED AND THEREFORE MUST BE DISMISSED WITHOUT FURTHER
COMMENT.
IN ACCORDANCE WITH THE ABOVE CONSIDERATIONS, YOUR PROTEST MUST BE
DENIED.
B-177104, JAN 16, 1973
SURPLUS SALES CONTRACT - MISTAKE IN BID
DECISION DENYING THE CLAIM OF TARASHINSKY MERCHANDISE COMPANY FOR
RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID
UPON WHICH A DSA SURPLUS SALES CONTRACT WAS BASED.
A MISTAKE IN BID ALLEGED AFTER CONTRACT AWARD MAY NOT BE CORRECTED
UNLESS IT CAN BE SHOWN THAT THE CONTRACTING OFFICER WAS, OR SHOULD HAVE
BEEN, ON NOTICE OF THE MISTAKE BEFORE AWARD. MOREOVER, A MERE
DIFFERENCE IN PRICES IN SURPLUS SALES SOLICITATIONS IS NOT SUFFICIENT
NOTICE DUE TO THE WIDE RANGE OF PRICES ORDINARILY RECEIVED UNDER SUCH
SOLICITATIONS. SEE WENDER PRESSES, INC. V. UNITED STATES, 343 F.2ND 961
(1965).
TO TARASHINSKY MERCHANDISE COMPANY:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 19, 1972,
REQUESTING RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE
IN YOUR BID UPON WHICH DEFENSE SUPPLY AGENCY SALES CONTRACT NO.
11-2224-006 WAS BASED.
THE DEFENSE SURPLUS SALES OFFICE, PHILADELPHIA, PENNSYLVANIA, BY
SALES INVITATION NO. 11-2224 REQUESTED BIDS FOR THE PURCHASE OF VARIOUS
ITEMS, INCLUDING ITEM 12 DESCRIBED AS 11,060 POUNDS OF COTTON
MATTRESSES, MIXED, SCRAP. THE CURRENT MARKET APPRAISAL ESTABLISHED FOR
ITEM 12 WAS $0.02 PER POUND. IN RESPONSE, YOUR FIRM SUBMITTED A BID
DATED JUNE 7, 1972, OFFERING TO PURCHASE THE MATTRESSES UNDER ITEM 12 AT
A PRICE OF $0.0169 PER POUND. YOUR BID WAS ACCEPTED ON JUNE 30, 1972.
IT IS REPORTED THAT ON JULY 5, 1972, YOUR FIRM ADVISED THE SALES
CONTRACTING OFFICE BY TELEPHONE THAT A MISTAKE HAD BEEN MADE IN YOUR BID
IN THAT YOU HAD INTENDED TO BID ON THE SCRAP RUBBERIZED NYLON UNDER ITEM
13 RATHER THAN ITEM 12. IN A LETTER OF THE SAME DATE YOU CONFIRMED YOUR
ORAL ALLEGATION OF ERROR AND REQUESTED THAT THE CONTRACT BE CANCELED.
IN SUPPORT OF YOUR ALLEGATION OF ERROR, YOU SUBMITTED A COPY OF PAGE 2
OF THE SALES INVITATION WHICH SHOWS A PRICE OF "0169" FOR ITEM 13. NO
PRICE IS SHOWN ON PAGE 2 FOR ITEM 12.
YOUR REQUEST FOR RELIEF WAS DENIED BY THE SALES CONTRACTING OFFICER,
AND YOU APPEALED HIS DECISION TO THE ARMED SERVICES BOARD OF CONTRACT
APPEALS. THE BOARD DISMISSED YOUR APPEAL ON THE GROUND IT LACKED
JURISDICTION IN THE MATTER.
IN YOUR LETTER OF SEPTEMBER 19, 1972, TO OUR OFFICE, YOU STATE THAT
ITEM 70 OF SCRAP SALE NO. 11-2197 WAS GROSSLY MISDESCRIBED TO THE
DETRIMENT OF THE GOVERNMENT, AND THAT YOU BROUGHT THIS FACT TO THE
ATTENTION OF THE SALES CONTRACTING OFFICER WHICH RESULTED IN HIGHER
RETURN IN A SUBSEQUENT SALE OF THE SAME TYPE OF PROPERTY. APPARENTLY,
YOU FEEL THAT SINCE YOU DID THE GOVERNMENT A FAVOR BY BRINGING THE
MISDESCRIPTION TO ITS ATTENTION, THE GOVERNMENT SHOULD RECIPROCATE BY
GRANTING YOUR FIRM RELIEF UNDER THE SUBJECT SALE. WHILE YOUR ACTION IN
BRINGING THE MISDESCRIPTION TO THE ATTENTION OF THE SALES CONTRACTING
OFFICER IS COMMENDABLE, IT MAY NOT BE ACCEPTED AS A LEGAL BASIS FOR
GRANTING THE REQUESTED RELIEF.
A MISTAKE IN BID ALLEGED AFTER CONTRACT AWARD MAY NOT BE CORRECTED
UNLESS IT CAN BE SHOWN THAT THE CONTRACTING OFFICER WAS, OR SHOULD HAVE
BEEN, ON NOTICE OF THE MISTAKE BEFORE AWARD. IN THIS CASE, THERE WAS
NOTHING ON THE FACE OF YOUR BID TO INDICATE THAT THE PRICE QUOTED
THEREIN FOR ITEM 12 WAS NOT AS INTENDED. IT IS REPORTED THAT THE TWO
OTHER BIDS ON ITEM 12 WERE IN AMOUNTS OF $0.0151 AND $0.0138 PER POUND.
THUS, IT DOES NOT APPEAR THAT THE DIFFERENCE IN PRICES WAS SUCH AS TO
PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN
YOUR BID ON ITEM 12. IN ANY EVENT, IN VIEW OF THE WIDE RANGE OF BID
PRICES ORDINARILY RECEIVED FOR SURPLUS PROPERTY, A MERE DIFFERENCE IN
THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON
NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF
PROPERTY, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW
EQUIPMENT. SEE WENDER PRESSES, INC. V. UNITED STATES, 343 F.2D 961
(1965); AND UNITED STATES V. SABIN METAL CORPORATION, 151 F. SUPP. 683
(1957), AFFIRMED 253 F.2D 956 (1958). SEE, ALSO, B-173818, OCTOBER 19,
1971.
IN VIEW OF THE FOREGOING, AND AS NO ERROR WAS ALLEGED UNTIL AFTER
AWARD, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID WAS MADE IN
GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE
RIGHTS AND LIABILITIES OF THE PARTIES TO THE CONTRACT.
ACCORDINGLY, WE FIND NO LEGAL BASIS FOR GRANTING ANY RELIEF IN THE
MATTER.
B-167790, JAN 15, 1973
REIMBURSEMENT - RELIEF AGREEMENT AS CONTRACT - DISPARITY BETWEEN
PERFORMANCE AND ELIGIBLE PERFORMANCE - SUBSEQUENT CONGRESSIONAL ACTION
CONCERNING THE CLAIMS OF WILLACY AND CAMERON COUNTIES, TEX., AS
BENEFICIARIES UNDER A CONTRACT BETWEEN TEXAS AND THE FEDERAL GOVERNMENT
RELATING TO PROVIDING FEDERAL FUNDS FOR DISASTER RELIEF EFFORTS INCIDENT
TO HURRICANE BEULAH IN SEPTEMBER AND OCTOBER 1967.
A DISASTER ASSISTANCE AGREEMENT ENTERED INTO BETWEEN THE OFFICE OF
EMERGENCY PREPAREDNESS (OEP) AND THE STATE OF TEXAS FOR RELIEF FUNDS TO
BE DISTRIBUTED TO THE STATE'S AFFECTED COUNTIES CREATES A CONTRACT WHICH
IMPOSES RIGHTS AND RESPONSIBILITIES BETWEEN THE GRANTOR (THE UNITED
STATES) AND THE GRANTEE (TEXAS). SEE 41 COMP. GEN. 134 (1961). THUS, A
CLAIM BROUGHT BY THE STATE FOR REIMBURSEMENT FOR ACTUAL EXPENSES
INCURRED IN DEBRIS REMOVAL IS PAYABLE AGAINST THE GOVERNMENT ONLY IF THE
ACTUAL EXPENSES FOR WORK PERFORMED CONFORM WITH OEP'S ADMINISTRATIVE
DETERMINATIONS OF ELIGIBLE WORK PRESCRIBED IN OEP CIRCULAR 400.5A.
ACCORDINGLY, IN VIEW OF OEP'S EXHAUSTIVE CONSIDERATION OF TEXAS'S
CLAIMS, THE FINDINGS OF AN INDEPENDENT EVALUATION CONDUCTED BY BOVAY
ENGINEERS, INC., AND OEP'S PRIOR ALLOCATION OF A CONSIDERABLE SUM TO
TEXAS, THE COMP. GEN., IN THE ABSENCE OF ARBITRARINESS OR CAPRICE, FINDS
NO LEGAL BASIS TO ALLOW THESE CLAIMS.
ALSO, SINCE NO ELEMENTS OF LEGAL LIABILITY OR EQUITY REMAIN TO BE
RESOLVED, THE COMP. GEN. BELIEVES IT INAPPROPRIATE TO SUBMIT THIS
MATTER TO CONGRESS UNDER THE MERITORIOUS CLAIMS ACT, 31 U.S.C. 236.
TO GOVERNOR PRESTON SMITH:
REFERENCE IS MADE TO YOUR LETTER OF MAY 4, 1971, REQUESTING THAT THIS
OFFICE REVIEW THE CLAIMS OF THE COUNTIES OF WILLACY AND CAMERON AS
BENEFICIARIES UNDER A CONTRACT BETWEEN YOUR STATE AND THE FEDERAL
GOVERNMENT RELATING TO PROVIDING FEDERAL FUNDS FOR DISASTER RELIEF
EFFORTS CARRIED OUT IN THE AFTERMATH OF HURRICANE BEULAH IN SEPTEMBER
AND OCTOBER 1967.
ON MAY 21, 1971, WE WROTE THE OFFICE OF EMERGENCY PREPAREDNESS (OEP)
FOR A REPORT AND AN EXPRESSION OF VIEWS ON THE MERIT OF THE CLAIMS,
WHICH REPORT WAS RECEIVED BY US ON AUGUST 10, 1971. ON AUGUST 12, 1971,
WE WERE ADVISED THAT THE STATE WOULD LIKE TO SUBMIT ADDITIONAL
INFORMATION TO US IN REBUTTAL OF THE OEP REPORT. WE RECEIVED THE
STATE'S REPORT ON OCTOBER 5, 1971, AT A CONFERENCE WITH MR. J. EDWARD
WELCH AND MR. J. GORDON ARBUCKLE, ATTORNEYS FOR THE CLAIMANTS, AND MR.
LEE GEORGE OF GEORGE CONSOLIDATED, INC., THE PRINCIPAL CONTRACTOR
INVOLVED. EARLY IN JANUARY 1972, WE MET AGAIN WITH THE CONTRACTOR AND
HIS ATTORNEYS. THEN, ON JANUARY 20, 1972, WE MET WITH OFFICIALS OF OEP.
ON MARCH 8, 1972, THE CLAIMANTS SUBMITTED A FURTHER REPORT CONCERNING
THE DETAILS OF THEIR CLAIM. THIS REPORT WAS SENT TO OEP FOR COMMENT AND
THAT AGENCY'S REPORT WAS SUBMITTED TO US ON JUNE 30, 1972. A COPY OF
THAT REPORT WAS GIVEN TO THE CLAIMANTS, AT THEIR REQUEST, WHO RESPONDED
IN A LETTER DATED AUGUST 17, 1972. EARLY IN OCTOBER WE SUBMITTED A COPY
OF THE CLAIMANTS' AUGUST LETTER TO OEP FOR FURTHER REVIEW AND THE AGENCY
RESPONDED IN A LETTER DATED NOVEMBER 22, 1972, WHICH WAS PRESENTED TO US
AT A MEETING WITH THAT AGENCY'S OFFICIALS. ON NOVEMBER 24, 1972, WE
SUPPLIED A COPY OF OEP'S MOST RECENT REPORT TO THE ATTORNEYS FOR THE
CLAIMANTS, WHO, AT A MEETING ON DECEMBER 13, 1972, FILED A FINAL
STATEMENT OF THEIR CASE.
THE CLAIMS FILED BY THE STATE OF TEXAS HAVE BEEN CONSIDERED BY THIS
OFFICE UNDER THE PROVISIONS OF 31 U.S.C. 71, WHICH PROVIDE:
"ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED
STATES OR AGAINST IT, AND ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT
OF THE UNITED STATES IS CONCERNED, EITHER AS DEBTOR OR CREDITOR, SHALL
BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE."
A QUESTION HAS BEEN RAISED BY OEP AS TO WHETHER THE PROVISIONS OF
THIS SECTION ARE APPLICABLE SINCE THE MATTER IN QUESTION RELATES TO A
GRANT-IN-AID RATHER THAN A CONTRACT. AS WE STATED IN 42 COMP. GEN.
289, 294 (1962):
"IT IS OUR VIEW THAT THESE GRANTS-IN-AID ARE NOT STATUTORY
UNCONDITIONAL GRANTS OR GIFTS AND MAY NOT BE SO MADE BY ADMINISTRATIVE
ACTION. THE OFFEREE IS FREE TO ACCEPT OR REJECT THE GRANT. THE
ACCEPTANCE OF THE GRANT CREATES A CONTRACT BETWEEN THE UNITED STATES AND
THE GRANTEE UNDER WHICH THE MONIES PAID OVER TO THE GRANTEE, WHILE
ASSETS IN THE HANDS OF THE GRANTEE, ARE CHARGED WITH THE OBLIGATION TO
BE USED FOR THE PURPOSES AND SUBJECT TO THE CONDITIONS OF THE GRANT.
***"
SEE ALSO 41 COMP. GEN. 134 (1961) AND CONWAY, "THE FEDERAL GRANT: AN
ADMINISTRATIVE VIEW," 30 FED. B.J. 119 (1970). IT IS CLEAR THAT ONCE A
GRANT IS ACCEPTED AND A FEDERAL DISASTER ASSISTANCE AGREEMENT EXECUTED,
A TYPE OF CONTRACT IS FORMED WHICH IMPOSES RIGHTS AND RESPONSIBILITIES
ON BOTH THE GRANTOR (I.E., THE UNITED STATES) AND THE GRANTEE.
ACCORDINGLY, INSOFAR AS THE JURISDICTION OF THIS OFFICE UNDER 31 U.S.C.
71 IS CONCERNED, WHERE THE FAILURE OF THE UNITED STATES TO FULFILL ITS
CONTRACTUAL OBLIGATIONS IS ALLEGED, WE SEE NO DIFFERENCE BETWEEN A CLAIM
UNDER A CONTRACT AND A CLAIM UNDER A GRANT-IN-AID AGREEMENT.
THE CONTROVERSY IN THE PRESENT CASE ARISES WITH REGARD TO THE AMOUNTS
TO WHICH THE COUNTIES OF WILLACY AND CAMERON ARE ENTITLED TO BE
REIMBURSED FOR EXPENSES INCURRED BY THEIR CONTRACTOR FOR DISASTER RELIEF
WORK IN THE AFTERMATH OF HURRICANE BEULAH UNDER SECTION 3 OF PUBLIC LAW
81-875, 64 STAT. 1109, 1110, AS AMENDED, 42 U.S.C. 1855B WHICH PROVIDES,
IN PERTINENT PART, AS FOLLOWS:
"IN ANY MAJOR DISASTER, FEDERAL AGENCIES ARE HEREBY AUTHORIZED WHEN
DIRECTED BY THE PRESIDENT TO PROVIDE ASSISTANCE *** (D) BY PERFORMING ON
PUBLIC OR PRIVATE LANDS PROTECTIVE AND OTHER WORK ESSENTIAL FOR THE
PRESERVATION OF LIFE AND PROPERTY, CLEARING DEBRIS AND WRECKAGE, MAKING
EMERGENCY REPAIRS TO AND TEMPORARY REPLACEMENTS OF PUBLIC FACILITIES OF
STATES AND LOCAL GOVERNMENTS DAMAGED OR DESTROYED IN SUCH MAJOR
DISASTER, PROVIDING TEMPORARY HOUSING OR OTHER EMERGENCY SHELTER FOR
FAMILIES WHO, AS A RESULT OF SUCH MAJOR DISASTER, REQUIRE TEMPORARY
HOUSING OR OTHER EMERGENCY SHELTER, AND MAKING CONTRIBUTIONS TO STATES
AND LOCAL GOVERNMENTS FOR PURPOSES STATED IN THIS SUBDIVISION ***."
FACTUAL BACKGROUND
HURRICANE BEULAH STRUCK 29 TEXAS COUNTIES, INCLUDING CAMERON AND
WILLACY, ON SEPTEMBER 20, 1967. IMMEDIATELY AFTER THE DISASTER OEP
FIELD OFFICES WERE ESTABLISHED IN THE DISASTER AREA. ON SEPTEMBER 23,
1967, BEFORE THE PRESIDENT'S DISASTER DECLARATION, THE THEN GOVERNOR OF
TEXAS, JOHN CONNALLY, ARRANGED MEETINGS WHICH WERE ATTENDED BY OFFICIALS
FROM CAMERON AND WILLACY COUNTIES AND BY REPRESENTATIVES OF THE OFFICE
OF EMERGENCY PREPAREDNESS, INCLUDING ITS REGIONAL DIRECTOR. AT THE
MEETING, REGIONAL OEP AND CORPS OF ENGINEERS PERSONNEL ADVISED LOCAL
OFFICIALS OF THE PROBABILITY THAT THEIR COUNTIES WOULD BE DECLARED A
MAJOR NATURAL DISASTER AREA THEREBY MAKING FEDERAL FUNDS AVAILABLE TO
DEFRAY THE COSTS NECESSARY FOR THE DISASTER RELIEF EFFORTS. LOCAL
OFFICIALS WERE ALSO TOLD THAT THEY COULD COMMENCE THE PERFORMANCE OF
NECESSARY EMERGENCY WORK PENDING THE DISASTER DECLARATION AND THAT SUCH
WORK COULD BE PERFORMED BY CONTRACTING WITH QUALIFIED PRIVATE
CONTRACTORS.
AS EXPECTED, SUCH DECLARATION WAS MADE ON SEPTEMBER 28, 1967, BY
PRESIDENT JOHNSON, PURSUANT TO PUBLIC LAW 81-875.
CAMERON COUNTY AND WILLACY COUNTY ENTERED INTO CONTRACTS ON SEPTEMBER
27, 1967, AND OCTOBER 9, 1967, RESPECTIVELY, WITH GEORGE CONSOLIDATED,
INC., A HOUSTON, TEXAS, FIRM, FOR THE PURPOSE OF PERFORMING CERTAIN
DEBRIS CLEARANCE AND OTHER WORK IN THE COUNTIES RESULTING FROM THE
HURRICANE. SINCE THE COUNTIES FELT THAT LOCAL RESOURCES WERE
INSUFFICIENT TO SUPPORT A PROGRAM OF THE REQUIRED MAGNITUDE, PAYMENT
UNDER THE CONTRACTS WAS MADE CONTINGENT ON THE AVAILABILITY OF FEDERAL
FUNDS. OEP HAS INFORMALLY ADVISED US THAT IT NEITHER REQUIRES NOR
ENCOURAGES THE USE OF SUCH CONTINGENCY CLAUSES. IN ITS REPORT TO US,
THE AGENCY STATES THAT "IT IS CLEAR THAT THIS STIPULATION (THE
CONTINGENCY CLAUSE) PUTS THE CONTRACTOR ON NOTICE THAT HE HAD NO
ASSURANCE OF PAYMENT IF THE WORK HE PERFORMED DID NOT COMPLY WITH
FEDERAL REQUIREMENTS FOR REIMBURSEMENT." ON OCTOBER 5, 1967, A DISASTER
ASSISTANCE AGREEMENT WAS EXECUTED BETWEEN THE FEDERAL GOVERNMENT AND THE
STATE OF TEXAS WHICH TOGETHER WITH SUPPLEMENTS THERETO ALLOCATED $10
MILLION IN FEDERAL FUNDS TO THESE DISASTER RELIEF EFFORTS IN CERTAIN
COUNTIES WITHIN THE STATE.
CAMERON COUNTY SUBMITTED ITS PROJECT APPLICATION ON NOVEMBER 13,
1967, REQUESTING FEDERAL ASSISTANCE IN THE AMOUNT OF $1,462,040.62.
WHEN PROJECT APPLICATIONS ARE SUBMITTED FOR APPROVAL, THEY ARE FIRST
REVIEWED BY THE STATE, WHICH THEN FORWARDS THEM TO THE OEP REGIONAL
OFFICE. ON NOVEMBER 30, 1967, THE STATE APPROVED CAMERON COUNTY'S
PROJECT APPLICATION IN THE AMOUNT OF $621,788, AND THIS APPROVAL WAS
CONCURRED IN BY OEP. ON DECEMBER 6, 1967, THE STATE AND OEP APPROVED
THE WILLACY COUNTY PROJECT APPLICATION IN THE AMOUNT OF $258,248. THE
AMOUNTS APPROVED BY THE STATE AND AWARDED BY OEP WERE IN BOTH CASES THE
AMOUNTS SET FORTH IN THE DAMAGE SURVEYS PREPARED BY FEDERAL PERSONNEL AT
THE TIME.
OEP ALSO STATES THAT "IT SHOULD BE NOTED THAT THE STATE OF TEXAS WAS
IN FULL AGREEMENT WITH ELIGIBILITY DETERMINATIONS MADE BY OEP AT THAT
TIME" AND THAT IT WAS NOT UNTIL APPROXIMATELY 16 MONTHS FOLLOWING
APPROVAL OF THE INITIAL PROJECT APPLICATIONS WITH SOME SUPPLEMENTS THAT
YOU REVERSED GOVERNOR CONNALLY'S APPROVALS AND FILED APPEALS WITH THE
OEP REGIONAL DIRECTOR. OEP STATES THAT THE PROJECT APPLICATIONS OF
THESE TWO COUNTIES WERE THE ONLY APPLICATIONS OF THE 158 FILED -
INCIDENT TO HURRICANE BEULAH - FROM WHICH APPEALS WERE TAKEN, AND THE
RECORD INDICATES THAT BOTH APPEALS RELATE TO WORK DONE BY THE SAME
CONTRACTOR. IN THE STATE'S REBUTTAL IT IS STATED THAT "IT SHOULD BE
NOTED THAT GOVERNOR CONNALLY, AS IS CUSTOMARY, RELIED HEAVILY ON THE
ADVICE OF OEP AND CERTAIN STATE EMPLOYEES CLOSELY ASSOCIATED WITH OEP IN
DETERMINING THE AMOUNT OF THE ORIGINAL STATE APPROVAL." NONETHELESS, OEP
POINTS OUT THAT THE LENGTHY INTERVAL BEFORE AN APPEAL WAS TAKEN - RATHER
THAN THE CONTEMPORANEOUS APPEALS OEP GENERALLY RECEIVES IN SUCH
SITUATIONS - MADE IT EVEN MORE DIFFICULT FOR OEP TO REVIEW THE CLAIM.
IN ORDER TO JUSTIFY INCREASES OVER THE INITIAL APPROVAL, AN EXTENSIVE
REVIEW WAS UNDERTAKEN BY THE STATE TO DEMONSTRATE THAT OEP'S
RECOMMENDATIONS, ON WHICH THE ORIGINAL STATE APPROVAL WAS BASED, WERE
ERRONEOUS. THE ATTORNEYS REPRESENTING THE CLAIMANTS STATE THAT THIS
REVIEW WAS INSTITUTED IN GOVERNOR CONNALLY'S TERM OF OFFICE BUT NOT
COMPLETED UNTIL AFTER YOUR INAUGURATION. BASED ON WHAT THE REBUTTAL
TERMS "GLARING INADEQUACIES IN THE DAMAGE SURVEY REPORTS," ADDITIONAL
AMOUNTS OF $840,252 FOR CAMERON COUNTY AND $200,532 FOR WILLACY COUNTY
WERE REQUESTED BY THE STATE. ON JUNE 23, 1969, THE OEP REGIONAL
DIRECTOR APPROVED AN ADDITIONAL $32,573 FOR CAMERON AND $14,197 FOR
WILLACY. THE REBUTTAL FURTHER STATES THAT SUBSEQUENTLY "OEP, AT LEAST
IMPLICITLY, HAS ACKNOWLEDGED THE DEFICIENCIES IN THE ORIGINAL DAMAGE
SURVEY REPORTS." IT WOULD APPEAR TO BE OEP'S POSITION THAT IF THERE WERE
ANY DEFICIENCIES IN THE REPORTS, THEY HAVE BEEN CORRECTED THROUGH LATER
REVIEWS. ON JULY 21, 1969, YOU INDICATED YOUR DISSATISFACTION WITH THE
APPROVALS BY THE OEP REGIONAL DIRECTOR AND APPEALED TO THE OEP DIRECTOR
FOR FULL APPROVAL OF THE COUNTIES' CLAIMS.
AS A RESULT OF YOUR APPEAL, IN JANUARY 1970, BOVAY ENGINEERS, INC., A
FIRM OF CONSULTING ENGINEERS, WAS EMPLOYED BY OEP TO ASSIST AND ADVISE
ITS STAFF IN THE REVIEW AND EVALUATION OF THESE CLAIMS. BOVAY SUBMITTED
A REPORT TO OEP IN MARCH 1970. WHEN THE ESTIMATES WERE DISCUSSED WITH
STATE AND COUNTY REPRESENTATIVES, THEY INDICATED THAT THERE WAS STILL
CONSIDERABLE INFORMATION, WHICH THEY HAD ALREADY SUBMITTED TO OEP AND
WHICH THE STATE CONTENDS THE AGENCY HAD FAILED TO FURNISH TO BOVAY FOR
REVIEW AND CONSIDERATION. IN REGARD TO THE LARGE "VOLUMES" OF
ADDITIONAL INFORMATION SUBMITTED BY THE STATE TO BOVAY, OEP REPORTS
THAT:
"*** AN EXAMPLE OF THE 'NEW' INFORMATION WAS A MAP MARKED UP TO SHOW
ALL ROADS IN CAMERON COUNTY WHICH ALLEGEDLY WERE CLEARED OF DEBRIS AND
INCLUDED AN ADDITIONAL 600 MILES OF ROADS AND OVER 1,000 ACRES OF PUBLIC
PROPERTY WHICH WERE SUPPOSEDLY CLEARED OF DEBRIS BUT WHICH HAD NOT BEEN
INCLUDED ON A SIMILAR MAP PREVIOUSLY FURNISHED TO BOVAY BY THE COUNTY.
OEP REVIEW REVEALED THAT SOME OF THESE ROADS HAD BEEN CLEARED BY THE
TEXAS STATE HIGHWAY DEPARTMENT AND STILL OTHERS COULD NOT BE LOCATED."
YOUR LETTER STATES THAT BOVAY ISSUED A REPORT IN WHICH IT DETERMINED
THE TOTAL "COST" FOR THE WORK PERFORMED TO BE $1,074,265. OEP REVIEWED
AND ADJUSTED THE BOVAY RECOMMENDATIONS TO REFLECT THE WORK THAT IT FELT
HAD ACTUALLY BEEN PERFORMED BY THE COUNTIES. OEP POINTS OUT THAT BASED
ON THE BOVAY REPORT, AS WELL AS A REVISED CORPS OF ENGINEERS'
EVALUATION, AND A REVIEW OF ALL OTHER AVAILABLE INFORMATION, AND AFTER
FURTHER CONSULTATION WITH STATE AND LOCAL REPRESENTATIVES, THE OEP
DIRECTOR APPROVED ADDITIONAL AMOUNTS OF $321,353 AND $127,525 FOR
CAMERON AND WILLACY COUNTIES, RESPECTIVELY.
THE STATE AGREES THAT OEP'S FINAL ALLOWANCE IN THIS MATTER EXCEEDS
ITS ORIGINAL APPROVALS BY APPROXIMATELY $500,000 BUT IT STATES THAT SUCH
FINAL ALLOWANCES ARE STILL CONSIDERABLY BELOW THE TOTAL EXPENSES
ACTUALLY INCURRED IN THE CLEANUP.
ACCORDING TO YOUR LETTER OF MAY 4, 1971, THE AMOUNT IN CONTROVERSY IS
$421,560, WHILE THE STATE'S REBUTTAL STATEMENT INDICATES THAT THE FINAL
OEP ALLOWANCES FALL $656,350 SHORT OF THE TOTAL STATE CLAIM FOR WILLACY
AND CAMERON COUNTIES. ACCORDING TO THE REBUTTAL, $221,449 OF THE AMOUNT
STILL DUE AND OWING IS FOR WORK PERFORMED BY COUNTY FORCES. OEP,
HOWEVER, INFORMALLY ADVISES THAT IT BELIEVES ITS FINAL APPROVALS COVER
THE COUNTIES' TOTAL EXPENSES, AND THAT ONLY CLAIMS ON BEHALF OF GEORGE
CONSOLIDATED, INC., ARE NOT FULLY COVERED. HENCE, OEP FEELS ANY
ADDITIONAL AMOUNTS APPROVED BY THIS OFFICE WILL EVENTUALLY BE PAID TO
THE CONTRACTOR AND THAT DUE TO THE CONTINGENCY CONTRACTS INVOLVED HERE,
THE COUNTIES APPARENTLY WOULD NOT BE LIABLE TO THE CONTRACTOR FOR FUNDS
IN EXCESS OF AMOUNTS RECEIVED BY THEM FROM THE UNITED STATES.
THE STATE'S POSITION
THE STATE'S VIEW IS THAT UNDER THE DISASTER ASSISTANCE AGREEMENT OEP
HAS A CONTRACTUAL OBLIGATION TO REIMBURSE THE STATE FOR EXPENSES
ACTUALLY INCURRED, ALTHOUGH THE AGREEMENT DOES NOT SPECIFICALLY SO
PROVIDE. IN THIS REGARD, THE STATE CONTENDS THAT SINCE:
"*** THE LOCAL OEP REPRESENTATIVES EXPRESSLY AND REPEATEDLY WAIVED
ANY REQUIREMENT FOR THE FILING OF PROJECT APPLICATIONS PRIOR TO THE
COMMENCEMENT OF DISASTER RELIEF EFFORTS, SINCE THE COUNTIES WERE
REPEATEDLY ENCOURAGED TO PROCEED WITH WORK PRIOR TO COMPLETION OF DAMAGE
SURVEY REPORTS AND SUBMISSION OF PROJECT APPLICATIONS AND SINCE THE
COUNTIES INCURRED SUBSTANTIAL EXPENSES IN RELIANCE ON OEP'S COMMITMENT
OF FUNDS UNDER THE FEDERAL-STATE DISASTER ASSISTANCE AGREEMENT, IT SEEMS
CLEAR THAT THE FEDERAL GOVERNMENT HAS A CONTRACTUAL OBLIGATION TO PERMIT
THE STATE OF TEXAS TO UTILIZE THE FUNDS ALLOCATED UNDER THE
FEDERAL-STATE DISASTER AGREEMENT TO REIMBURSE THE COUNTIES FOR EXPENSES
ACTUALLY INCURRED IN THE PERFORMANCE OF ELIGIBLE DISASTER REHABILITATION
EFFORTS UNDER THE DISASTER ACT, AS AMENDED. ***"
THE STATE QUESTIONS THE USE BY OEP OF ITS (OEP'S) DAMAGE SURVEY
REPORTS, STATING THAT WHILE THE CONTRACTOR BEGAN WORK SHORTLY AFTER THE
DISASTER OCCURRED, THE FIRST GOVERNMENTAL INSPECTION TEAMS DID NOT
ARRIVE UNTIL LATE OCTOBER 1967 - AFTER COMPLETION OF SUBSTANTIALLY ALL
DEBRIS REMOVAL AND ROAD WORK BY THE CONTRACTOR - TO MAKE THE "DAMAGE
SURVEY REPORTS" WHICH ARE TECHNICALLY REQUIRED BY OEP REGULATIONS AS THE
BASIS FOR APPLICATIONS FOR FEDERAL ASSISTANCE. THE STATE DOUBTS:
"*** THE PROPRIETY OF UTILIZING AFTER THE FACT DAMAGE SURVEY
ESTIMATES TO LIMIT THE AMOUNT OF REIMBURSEMENT FOR WORK PERFORMED AT THE
EXPRESS INSTRUCTION OF REGIONAL OEP OFFICIALS *** (AND STATES THAT) EVEN
ASSUMING THE PROPRIETY OF USING DAMAGE SURVEY ESTIMATES TO PERFORM WHAT
IS ESSENTIALLY AN AUDITION FUNCTION, THE DAMAGE SURVEY ESTIMATES IN THIS
INSTANCE WERE INCOMPLETE IN MANY RESPECTS, WERE OFTEN INCONSISTENT AS TO
THE BASIS OF ESTIMATES."
HOWEVER, THE STATE'S BASIC CONTENTION IS THAT THE ENTIRE AMOUNT
CLAIMED BY IT ON BEHALF OF THESE COUNTIES SHOULD BE PAID BY OEP, SINCE
IT (OEP) HAS FAILED TO SHOW THAT ANY OF THE WORK CLAIMED BY THE COUNTIES
- AND FULLY DOCUMENTED BY DETAILED RECORDS MAINTAINED BY THE COUNTIES
AND THEIR CONTRACTORS - WAS INELIGIBLE OR NOT ACTUALLY PERFORMED -
"*** DESPITE REPEATED URGINGS OF THE STATE, THE COUNTIES AND THE
CONTRACTOR THAT OEP PRESENT ANY EVIDENCE AS TO THE PERFORMANCE OF
INELIGIBLE WORK, THE RECORD IN THIS CASE HAS REMAINED TOTALLY DEVOID OF
ANY COMPETENT EVIDENCE TENDING TO SHOW THAT INELIGIBLE WORK WAS
PERFORMED. *** THE OEP'S FACTUAL PRESENTATION AS TO INELIGIBILITY OF
WORK HAS BEEN CONFINED TO VAGUE GENERAL ASSERTIONS THAT SOME 'INELIGIBLE
DEBRIS CLEARANCE' OR 'QUESTIONABLE' ROAD WORK MAY HAVE BEEN PERFORMED.
DESPITE THESE VAGUE ASSERTIONS, THE DIRECTOR HAS NOT ACTED TO DISALLOW A
SINGLE LINE ITEM OF THE COUNTIES' CLAIMS ON THE BASIS OF INELIGIBILITY
OF WORK. MOREOVER, ANY SUCH ACTION, IF TAKEN, WOULD BE UNSUPPORTED BY
ANY COMPETENT EVIDENCE IN THE RECORD AND WOULD THUS BE INVALID AS
ARBITRARY AND CAPRICIOUS, UNSUPPORTED BY EVIDENCE AND NOT IN ACCORD WITH
FORMALITIES REQUIRED BY LAW."
THE STATE CONCLUDES THAT AFTER EXTENSIVE DELIBERATIONS OEP
"APPARENTLY RECEDED FROM ALL ASSERTIONS THAT ANY SIGNIFICANT PORTION OF
THE WORK PERFORMED WAS NOT ELIGIBLE FOR REIMBURSEMENT," AND THAT THE
ISSUE IS NOT WHETHER THE WORK PERFORMED WAS ELIGIBLE, BUT WHAT IS THE
TOTAL AMOUNT REIMBURSABLE TO THE COUNTIES BY REASON OF THE PERFORMANCE
OF THE DISASTER RELIEF WORK.
AS TO THE STATUTES INVOLVED, THE STATE CONTENDS THAT OEP'S
REGULATIONS ARE NOT IN ACCORDANCE WITH THE DISASTER RELIEF STATUTES
WHICH REQUIRE OEP TO REIMBURSE APPLICANTS FOR EXPENSES ACTUALLY
INCURRED.
IN SUPPORT OF THEIR POSITION, THE STATE EXPRESSES THE VIEW THAT
SECTION 303 OF THE DISASTER RELIEF ACT OF 1970, PUB. L. 91-606, 84 STAT.
1744, DISPELS ANY DOUBT WITH RESPECT TO THE LEGAL RIGHT OF THE COUNTIES
TO BE REIMBURSED FOR EXPENSES ACTUALLY INCURRED IN PERFORMING THE
DISASTER RELIEF WORK IN QUESTION. SECTION 303 PROVIDES THAT:
"FUNDS ALLOCATED BEFORE THE DATE OF ENACTMENT OF THIS ACT UNDER A
FEDERAL-STATE DISASTER AGREEMENT FOR THE RELIEF OF A MAJOR DISASTER AS
DEFINED IN THE ACT OF SEPTEMBER 30, 1950 (PUBLIC LAW 875, 81ST
CONGRESS), AND NOT EXPENDED ON THE DATE OF ENACTMENT OF THIS ACT MAY BE
USED BY THE STATE TO MAKE PAYMENTS TO ANY PERSON FOR REIMBURSEMENT OF
EXPENSES ACTUALLY INCURRED BY SUCH PERSON IN THE REMOVAL OF DEBRIS FROM
COMMUNITY AREAS, BUT NOT TO EXCEED THE AMOUNT THAT SUCH DEBRIS EXPENSES
EXCEED THE SALVAGE VALUE OF SUCH DEBRIS, OR IN OTHERWISE CARRYING OUT
THE PURPOSES OF SUCH ACT OF SEPTEMBER 30, 1950, OR THIS ACT."
THE STATE'S POSITION IS THAT SECTION 303, WHICH WAS ADDED TO THE BILL
BY THE HOUSE-SENATE CONFERENCE COMMITTEE, WAS ENACTED TO CLARIFY THE
INTENT OF CONGRESS THAT IN CARRYING OUT THE DISASTER ASSISTANCE PROGRAM,
OEP IS TO REIMBURSE STATES AND THEIR COUNTIES ON THE BASIS OF "EXPENSES
ACTUALLY INCURRED," AND NOT ON THE BASIS OF A LATER DETERMINATION OF THE
ELIGIBILITY OF THE WORK DONE.
IN FURTHER SUPPORT OF YOUR POSITION CONCERNING SECTION 303, YOU REFER
TO A LETTER TO YOU DATED DECEMBER 23, 1970, FROM THE CHIEF COUNSEL OF
THE HOUSE PUBLIC WORKS COMMITTEE, A LETTER DATED DECEMBER 4, 1970, FROM
CONGRESSMAN JIM WRIGHT TO CONGRESSMAN ROBERT E. JONES, AND TO LETTERS
DATED MAY 7, 1971, AND JUNE 2, 1971, RESPECTIVELY, TO THIS OFFICE FROM
CONGRESSMAN JIM WRIGHT, WHO INTRODUCED SECTION 303 IN THE CONFERENCE
COMMITTEE, AND SENATOR BIRCH BAYH, WHO ALSO SERVED ON THE CONFERENCE
COMMITTEE. THESE LETTERS INDICATE THAT THE AUTHORS THEREOF FEEL THAT
THE PROVISIONS OF SECTION 303 WERE INTENDED TO MAKE IT CLEAR THAT ACTUAL
EXPENSES INCURRED IN RELIANCE ON THE FEDERAL-STATE DISASTER ASSISTANCE
AGREEMENT, AND NOT SUBSEQUENT ESTIMATES, WOULD BE DETERMINATIVE OF THE
AMOUNT OF REIMBURSEMENT TO WHICH THE CLAIMANT IS ENTITLED. CONGRESSMAN
WRIGHT STATES THAT "THE SPECIFIC CONTROVERSY WITH WHICH I WAS MOST
CONCERNED, IN ATTEMPTING TO MAKE THIS CLARIFICATION, WAS THAT INVOLVING
CAMERON AND WILLACY COUNTIES IN THE STATE OF TEXAS."
IN REBUTTAL OEP REFERS TO THE ONLY PERTINENT STATEMENT IN THE
CONFERENCE REPORT (HOUSE REPORT NO. 91-1752, DATED DECEMBER 15, 1970)
WITH RESPECT TO SECTION 303, WHICH READS, IN PERTINENT PART, AS FOLLOWS:
"THE INCLUSION OF THIS PROVISION IS FOR EMPHASIS ONLY. IT IS NOT IN
ANY WAY TO BE CONSTRUED AS INDICATING THAT FUNDS HERETOFORE AUTHORIZED
FOR EXPENDITURE OR THAT AGREEMENTS, CONTRACTS, CLAIMS, OR OTHER
OBLIGATIONS OF ANY KIND PRESENTLY IN BEING ARE IN ANY WAY TO BE AFFECTED
BY THE ENACTMENT OF THIS ACT."
OEP STATES THAT ITS AGREEMENT WITH THE STATE PROVIDES THAT THE ONLY
FUNDS ALLOCATED WITH RESPECT TO THESE COUNTIES WERE FOR ELIGIBLE COSTS
INCURRED AND, AS STATED ON PAGE 2 OF OEP CIRCULAR 4000.5A, REFERRED TO
IN THE PROJECT APPLICATION, "FEDERAL FINANCIAL ASSISTANCE WILL BE
LIMITED TO THAT PORTION OF THE COST DETERMINED BY OEP AS MEETING OEP
CRITERIA." ACCORDINGLY, AND AS INDICATED BY THE CONFERENCE REPORT, OEP
FEELS THE GOVERNMENT'S RIGHTS AND LIABILITIES UNDER THE AGREEMENT WITH
THE STATE OF TEXAS ARE NOT AFFECTED BY THE ADOPTION OF SECTION 303.
IN FURTHER SUPPORT OF ITS POSITION, OEP STATES THAT IT DOES NOT
BELIEVE THAT CONGRESS INTENDED TO AUTHORIZE THESE CLAIMS BY THE
ENACTMENT OF SECTION 303, ESPECIALLY SINCE THE MATTER WAS BROUGHT BEFORE
AND APPARENTLY REJECTED BY THE SENATE, THROUGH THE INTRODUCTION BY
SENATOR RALPH YARBOROUGH OF AN AMENDMENT TO THE BILL WHICH WAS LATER
ENACTED INTO THE DISASTER RELIEF ACT OF 1970. OEP STATES THAT "THE
DISCUSSION IN THE CONGRESSIONAL RECORD OF SEPTEMBER 9, 1970, REVEALS
THAT THERE WAS STRONG OPPOSITION TO ANY FURTHER PAYMENTS WITH REGARD TO
THIS CLAIM." OEP SINGLES OUT IN PARTICULAR STATEMENTS MADE BY SENATOR
DOLE IN OPPOSITION TO SENATOR YARBOROUGH'S AMENDMENT, WHICH AMENDMENT,
HE STATED, "WOULD ELIMINATE ALL CONTROL BY THE FEDERAL GOVERNMENT IN THE
ADMINISTRATION OF THE DISASTER ACT SINCE IT WOULD NULLIFY ALL CRITERIA,
RULES AND REGULATIONS AND AUTHORIZE PAYMENT OF ALL OBLIGATIONS INCURRED
AT THE PLEASURE OF THE STATES AND LOCAL GOVERNMENTS." SENATOR DOLE ALSO
POINTED OUT THAT THIS WOULD ALLOW OTHER APPLICANTS, WHO HAVE HAD THEIR
CERTIFIED COSTS REDUCED BY OEP AUDIT, TO REASSERT THEIR CLAIMS FOR FULL
PAYMENT. IN THE FACE OF OPPOSITION TO HIS AMENDMENT, SENATOR YARBOROUGH
FIRST MODIFIED HIS BROADLY STATED AMENDMENT SO THAT IT WOULD APPLY, IN
EFFECT, ONLY TO THE SUBJECT CLAIMS, THEN WITHDREW THE AMENDMENT
COMPLETELY. HE SUBSEQUENTLY REOFFERED THE AMENDMENT, WHICH WAS THEN
APPARENTLY REJECTED BY A VOICE VOTE. SEE 116 CONG. REC. 31052 - 31063.
WE HAVE CAREFULLY REVIEWED THE LANGUAGE AND LEGISLATIVE HISTORY OF
SECTION 303. ON THE ONE HAND, AND IN SUPPORT OF THE STATE'S POSITION,
WE NOTE THAT THE LANGUAGE AS ENACTED IS NOT TOTALLY DISSIMILAR TO THE
AMENDMENT OFFERED BY SENATOR YARBOROUGH WITH REGARD TO THESE CLAIMS.
MOREOVER, THE LANGUAGE OF THE SECTION TENDS TO INDICATE THAT CONGRESS
WISHED TO HAVE OEP MAKE PAYMENTS ON THE BASIS OF THE EXPENSES ACTUALLY
INCURRED. ALSO, AS NOTED ABOVE, CONGRESSMAN WRIGHT AND SENATOR BAYH
HAVE WRITTEN TO INDICATE THAT IT WAS THEIR UNDERSTANDING THAT SECTION
303 WAS INTENDED TO MAKE CLEAR THAT REIMBURSEMENT UNDER THE DISASTER
RELIEF ACT OF 1970, AT LEAST WITH REGARD TO THESE AND SIMILARLY SITUATED
CLAIMS, WAS TO BE MADE ON THE BASIS OF ACTUAL EXPENSES INCURRED AND NOT
ON THE BASIS OF SUBSEQUENT ESTIMATES. HOWEVER, WITH REGARD TO THESE
LETTERS, THE STATEMENTS OF INDIVIDUAL LEGISLATORS, MADE IN LETTERS
WRITTEN BEFORE OR AFTER PASSAGE OF A STATUTE ARE GENERALLY NOT
CONSIDERED SUFFICIENTLY REPRESENTATIVE TO INDICATE THE COLLECTIVE INTENT
OF THE ENACTING BODY AND, AS A GENERAL RULE, WOULD NOT NECESSARILY BE
CONTROLLING IN CONSTRUING A STATUTE. CF. STATE WHOLESALE GROCERS V.
GREAT ATLANTIC & PACIFIC TEA CO., 154 F. SUPP. 471 (1957).
ON THE OTHER HAND, AND IN SUPPORT OF OEP'S POSITION, WE NOTE THAT THE
STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE INCLUDED IN THE
CONFERENCE REPORT, WHICH IS WIDELY RECOGNIZED AS EVIDENCE OF LEGISLATIVE
INTENT UNLESS CONTROVERTED DURING CONGRESSIONAL CONSIDERATION OF SUCH
REPORT, STATES CLEARLY THAT SECTION 303 IS INTENDED FOR EMPHASIS ONLY
AND THAT CONTRACTS AND AGREEMENTS ALREADY ENTERED INTO ARE NOT IN ANY
WAY TO BE AFFECTED, NOR ARE EXISTING CLAIMS. AS PREVIOUSLY NOTED, OEP
STATES THAT ITS AGREEMENT WITH THE STATE OF TEXAS PROVIDES FOR
REIMBURSING THOSE COSTS DETERMINED ELIGIBLE IN ACCORDANCE WITH OEP
REGULATIONS AND GUIDELINES AND NOT THROUGH THE PAYMENT OF EXPENSES
ACTUALLY INCURRED. THERE IS NOTHING IN THE 1970 ACT OR ITS LEGISLATIVE
HISTORY TO INDICATE THAT THE CONGRESS INTENDED TO REQUIRE OEP TO CHANGE
ITS EXISTING REGULATIONS, PROCEDURES, AND ELIGIBILITY CRITERIA.
MOREOVER, IN THE LIGHT OF THE LONGSTANDING OEP REGULATIONS, GIVING THE
STATUTE THE INTERPRETATION URGED BY THE STATE WOULD APPEAR TO REQUIRE
OEP TO ADOPT A STANDARD FOR REIMBURSEMENT WITH REGARD TO THOSE CASES
COVERED BY SECTION 303 - WHERE THERE WERE FUNDS ALLOCATED, BUT NOT
EXPENDED, BY DECEMBER 31, 1970, UNDER A FEDERAL-STATE DISASTER
ASSISTANCE AGREEMENT - DIFFERENT THAN THE STANDARD NORMALLY APPLIED BY
OEP. AGAIN, THERE IS NOTHING IN THE LEGISLATIVE HISTORY TO INDICATE
THAT THIS WAS THE INTENT OF SECTION 303.
IN VIEW OF THE EXPLANATION OF SECTION 303 IN THE CONFERENCE REPORT,
WHICH CONSTITUTES THE MOST PERTINENT IF NOT THE ONLY PREENACTMENT
LEGISLATIVE HISTORY EXISTING ON THE SUBJECT SECTION, AND IN VIEW OF THE
FAR-REACHING EFFECT WHICH CONSTRUING THIS SECTION IN THE MANNER URGED BY
THE STATE WOULD HAVE (I.E., NULLIFICATION OF EXISTING OEP REGULATIONS,
PROCEDURES AND CRITERIA), IT WOULD NOT BE UNREASONABLE TO CONCLUDE, AS
DID OEP, THAT THE SECTION WAS MEANT FOR EMPHASIS ONLY AND WAS NOT
INTENDED TO REQUIRE REIMBURSEMENT OF COSTS ON A BASIS OTHER THAN THAT
PREVIOUSLY, AND CONSISTENTLY, USED BY THE AGENCY.
IN ANY EVENT, IT IS CLEAR THAT UNDER SECTION 303 ONLY THOSE FUNDS
ALLOCATED - BEFORE THE ENACTMENT OF PUB. LAW 91-606 - UNDER THE
PARTICULAR FEDERAL-STATE DISASTER AGREEMENT INVOLVED AND NOT EXPENDED
PRIOR TO SUCH ENACTMENT DATE MAY BE USED TO MAKE ANY REIMBURSEMENTS
THEREUNDER AND OEP STATES THAT NO SUCH FUNDS ARE AVAILABLE. IN THIS
REGARD, OEP STATES THAT AS OF THE DATE OF ENACTMENT (DECEMBER 31, 1970),
$10 MILLION HAD BEEN ALLOCATED BY OEP UNDER THE SUBJECT AGREEMENT, AND
ITS SUPPLEMENTS, COVERING HURRICAN BEULAH. OF THAT SUM ONLY ABOUT
$300,000 HAD NOT BEEN OBLIGATED AS OF DECEMBER 31, 1970, AND SINCE THAT
DATE, OEP HAS OBLIGATED THE REMAINDER OF THE SUM ALLOCATED.
ACCORDINGLY, OEP CONCLUDES THAT EVEN IF THIS OFFICE WERE TO DETERMINE
THAT SECTION 303 REQUIRED THE PAYMENT OF THE ACTUALLY INCURRED EXPENSES
OF THE COUNTIES, SINCE SECTION 303 EXPRESSLY APPLIES ONLY TO FUNDS
ALLOCATED UNDER "A FEDERAL-STATE DISASTER AGREEMENT" BY THE DATE OF THE
ENACTMENT OF THE DISASTER RELIEF ACT OF 1970 AND SINCE ALL THOSE FUNDS
HAVE ALREADY BEEN OBLIGATED, NO FUNDS REMAIN AVAILABLE FOR USE UNDER
SECTION 303.
IN REBUTTAL, THE STATE TAKES THE POSITION THAT "THE LANGUAGE OF
SECTION 303 WOULD APPLY TO ALL FUNDS ALLOCATED PRIOR TO DECEMBER 31,
1970, UNDER ANY FEDERAL-STATE DISASTER AGREEMENT TO WHICH THE STATE OF
TEXAS WAS A PARTY." HOWEVER, IN OUR VIEW THE LANGUAGE OF SECTION 303
CLEARLY APPLIES ONLY TO FUNDS ALLOCATED UNDER A PARTICULAR DISASTER
AGREEMENT AND THE REALLOCATION OF FUNDS AMONG OTHER FEDERAL-STATE
DISASTER AGREEMENTS TO WHICH A STATE MAY HAVE BEEN A PARTY TO WAS NOT
CONTEMPLATED IN THE ENACTMENT OF THE SUBJECT SECTION.
THE STATE FURTHER STATES THAT SECTION 303 "DOES NOT PRECLUDE THE USE
OF OTHER DISASTER RELIEF FUNDS, SHOULD FUNDS AVAILABLE BEFORE DECEMBER
31, 1970, BECOME EXHAUSTED. WHETHER OR NOT SUCH FUNDS HAVE BEEN
EXHAUSTED WE SEE NO LEGAL OBJECTION TO THE USE OF FUNDS APPROPRIATED TO
CARRY OUT DISASTER RELIEF PURPOSES UNDER THIS OR OTHER ACTS." HOWEVER,
WE MUST POINT OUT THAT SECTION 303'S APPLICATION IS EXPLICITLY LIMITED
TO THOSE FUNDS ALLOCATED BUT NOT EXPENDED PRIOR TO DECEMBER 31, 1970,
UNDER A FEDERAL-STATE DISASTER AGREEMENT AND THAT NO OTHER FUNDS ARE
AFFECTED BY THIS SECTION.
ACCORDINGLY, BASED ON OEP'S STATEMENT THAT ALL FUNDS ALLOCATED TO THE
SUBJECT FEDERAL-STATE DISASTER AGREEMENT PRIOR TO DECEMBER 31, 1970,
HAVE BEEN OBLIGATED, THERE WOULD BE NO FUNDS AVAILABLE FOR USE UNDER
SECTION 303 TO SETTLE THE INSTANT CLAIMS.
OEP'S POSITION
OEP DISAGREES WITH THE STATE'S VIEW THAT IT IS REQUIRED BY THE
APPLICABLE DISASTER RELIEF STATUTES AND ITS CONTRACT WITH THE STATE TO
REIMBURSE THE APPLICANTS ON THE BASIS OF ACTUAL COSTS INCURRED. OEP
FEELS THAT THE USE OF ITS OWN DAMAGE SURVEY REPORTS, THE BOVAY REPORT,
AND THE REPORTS AND RECORDS OF THE OTHER FEDERAL AND STATE AGENCIES
INVOLVED IN THE DISASTER RELIEF EFFORTS, AS THE PRIMARY INDICES OF THE
WORK FOR WHICH THE COUNTIES COULD BE REIMBURSED, COUPLED IN THIS CASE
WITH A REVIEW OF THE CONTRACTOR'S RECORDS, IS IN ACCORDANCE WITH THE
APPLICABLE OEP REGULATIONS AND PROCEDURES. OEP INFORMALLY ADVISES THAT
ITS PRACTICE, PURSUANT TO ITS REGULATIONS, IN ALL DISASTERS OCCURRING
SINCE THE ENACTMENT OF PUBLIC LAW 81-875 IN 1950 HAS BEEN TO ADVISE
STATE AND LOCAL GOVERNMENTS TO PERFORM EMERGENCY WORK THAT THEY FELT WAS
URGENT AND FILE PROJECT APPLICATIONS AS SOON AS THEY COULD. SUCH WORK
IS THEN INSPECTED AND SURVEYED AS SOON AS POSSIBLE BY THE FEDERAL
GOVERNMENT AND ELIGIBLE WORK IS APPROVED FOR REIMBURSEMENT. OEP
EMPHASIZES THAT IN SUCH SITUATIONS THE COUNTIES ARE PRIMARILY
RESPONSIBLE FOR SUPERVISING THEIR CONTRACTORS. OEP FURTHER ADVISES THAT
THIS PROCEDURE IS NOT ONLY PRACTICAL BUT ALSO WELL RECEIVED BY
APPLICANTS, WITH THE MAJOR PROBLEMS OCCURRING IN CASES INVOLVING
CONTRACTORS UNDER CONTINGENCY CONTRACTS.
OEP NOTES THAT IT IS A WELL-ESTABLISHED RULE THAT TO SUSTAIN
ADMINISTRATIVE REGULATIONS AND PRACTICES IT IS NOT NECESSARY FOR THE
REVIEWING BODY TO FIND THE AGENCY CONSTRUCTION OF A STATUTE TO BE THE
ONLY REASONABLE ONE OR EVEN THAT IT IS THE CONSTRUCTION WHICH THE
REVIEWING BODY WOULD HAVE GIVEN THE STATUTE IF IT HAD INTERPRETED IT IN
THE FIRST INSTANCE, BUT THAT THE REVIEWING BODY NEED ONLY FIND A
RATIONAL BASIS FOR THE ADMINISTRATIVE REGULATION. SEE, FOR EXAMPLE,
PORT AUTHORITY OF THE CITY OF SAINT PAUL V. UNITED STATES, 432 F.2D 455
(1970). OEP CONTENDS THAT ITS REGULATIONS WHICH PROVIDE FOR PAYMENT OF
EXPENSES CONTAINED IN APPROVED PROJECT APPLICATIONS, AS DETERMINED
THROUGH ITS OWN DAMAGE SURVEY REPORTS, HAVE A RATIONAL BASIS AND SHOULD
BE UPHELD. THE BASIS FOR OEP'S REGULATIONS APPARENTLY LIES IN ITS
DESIRE TO DETERMINE - INDEPENDENTLY FROM THE COST FIGURES PRESENTED BY
APPLICANTS - THE AMOUNT OF REIMBURSABLE WORK PERFORMED. OEP FEELS THAT
REIMBURSEMENT OF APPLICANTS ON THE BASIS OF THE COSTS THEY CERTIFY AS
ACTUALLY HAVING BEEN INCURRED WOULD ELIMINATE ALL CONTROL BY THE FEDERAL
GOVERNMENT IN THE ADMINISTRATION OF THE DISASTER RELIEF ACT, SINCE THAT
PRACTICE COULD NULLIFY ALL CRITERIA, RULES AND REGULATIONS, AND
AUTHORIZE PAYMENT OF ALL OBLIGATIONS INCURRED AT THE PLEASURE OF THE
STATE AND LOCAL GOVERNMENTS WHERE OEP COULD NOT MEET THE BURDEN OF
OVERCOMING THE PRESUMPTION OF CORRECTNESS OF THE AMOUNTS CLAIMED AND
THUS COULD NOT ESTABLISH ABSOLUTELY THAT THE COSTS WERE INELIGIBLE.
MOREOVER, OEP DISAGREES WITH YOUR CONTENTION THAT SINCE, UNDER THE
EMERGENCY CONDITIONS, THE REQUIREMENTS FOR PREPERFORMANCE COST ESTIMATES
(I.E., DAMAGE SURVEY REPORTS) AND PRIOR OEP APPROVAL OF PROJECT
APPLICATIONS WERE WAIVED AND SINCE THE COUNTIES WERE ADVISED THAT THEY
COULD COMMENCE EMERGENCY WORK, OEP INCURRED A CONTRACTUAL OBLIGATION TO
PAY THOSE EXPENSES ACTUALLY INCURRED IN THE PERFORMANCE OF ELIGIBLE
WORK. AS NOTED PREVIOUSLY, OEP ADVISES THAT IT HAS BEEN ITS PRACTICE
SINCE THE ENACTMENT OF PUBLIC LAW 81-875 IN 1950 TO ADVISE STATE AND
LOCAL GOVERNMENTS TO PERFORM URGENT EMERGENCY WORK AND TO FILE PROJECT
APPLICATIONS AS SOON AS POSSIBLE AND THAT OEP, AS IT DID IN THE INSTANT
SITUATION, RESERVES THE RIGHT TO INSPECT AND SURVEY THE WORK PERFORMED
AND TO DETERMINE WHICH WORK IS ELIGIBLE FOR REIMBURSEMENT FROM THE
DISASTER RELIEF FUNDS ALLOCATED.
IN RESPONSE TO THE STATE'S CONTENTION THAT THE PROPRIETY OF USING
AFTER-THE-FACT DAMAGE SURVEY ESTIMATES IS QUESTIONABLE, SINCE THE FIRST
GOVERNMENTAL INSPECTION TEAMS DID NOT ARRIVE ON THE SCENE UNTIL LATE
OCTOBER 1967, OEP INFORMALLY ADVISES US THAT THERE WERE SOME FEDERAL
PERSONNEL MAKING PRELIMINARY SURVEYS IN THE DISASTER AREA IMMEDIATELY
AFTER THE DISASTER AND THAT THE PERSONNEL WHO BEGAN THE ACTUAL DETAILED
DAMAGE SURVEYS ON OCTOBER 10, 1967, WERE FAMILIAR WITH CONDITIONS AS
THEY THEN EXISTED (I.E., AS THEY EXISTED IMMEDIATELY FOLLOWING THE
DISASTER). OEP ALSO ADVISES THAT THE FEDERAL ESTIMATORS CONSULTED WITH
STATE AND LOCAL OFFICIALS IN PREPARING THEIR ESTIMATES AND THAT WHILE
THE ESTIMATORS DO NOT NORMALLY REVIEW THE APPLICANT'S COST RECORDS, IN
THIS CASE OEP DID CONSIDER THE CONTRACTOR'S RECORDS, MADE AVAILABLE TO
THE OEP REGIONAL DIRECTOR, IN REVIEWING THE DAMAGE SURVEY REPORTS. OEP
FURTHER STATES THAT IN ITS VIEW THE APPROPRIATE USE OF THE DAMAGE SURVEY
REPORTS IS TO PROVIDE AN ESTIMATE OF THE NATURE AND EXTENT OF THE WORK
ELIGIBLE FOR FEDERAL DISASTER ASSISTANCE. THE REPORTS ARE NOT USED TO
PERFORM AUDITING FUNCTIONS, AS CONTENDED BY THE STATE, BUT RATHER ARE
USED TO REVIEW THE AMOUNTS THAT COULD BE JUSTIFIED FOR THE PURPOSE OF
OBLIGATING FEDERAL FUNDS.
IN RESPONSE TO THE STATE'S CONTENTION THAT NO SUBSTANTIAL INELIGIBLE
WORK WAS PERFORMED, OEP AGREES THAT THERE WAS NEVER A QUESTION THAT SOME
WORK ELIGIBLE FOR FEDERAL DISASTER ASSISTANCE WAS PERFORMED. HOWEVER,
IT STATES THAT THE EXTENT AND EXACT NATURE OF THIS WORK HAS BEEN THE
SUBJECT OF CONSIDERABLE DISCUSSION AND INVESTIGATION IN PROCESSING THE
STATE'S CLAIMS. OEP STATES THAT ON NUMEROUS OCCASIONS COUNTY OFFICIALS
WERE ADVISED OF INELIGIBLE WORK BEING PERFORMED AND THAT THE SUPERVISION
BY THE LOCAL OFFICIALS OF THE WORK BEING PERFORMED BY THEIR CONTRACTORS
WAS QUESTIONED. OEP FURTHER DISAGREES WITH YOUR POSITION THAT IT MADE
ONLY VAGUE ASSERTIONS OF INELIGIBLE WORK AND THAT IT FAILED TO CITE
SPECIFIC INSTANCES. THE AGENCY SUPPORTS ITS POSITION BY THE INCLUSION
IN ITS REPORT OF MEMORANDA FROM BOTH ITS OWN AND STATE EMPLOYEES NOT
ONLY SHOWING THAT INELIGIBLE WORK WAS BEING PERFORMED, AND THAT COUNTY
OFFICIALS, AS WELL AS THE CONTRACTOR, WERE ADVISED ABOUT INELIGIBLE
WORK, BUT ALSO TENDING TO SHOW THAT THE COUNTIES WERE UNCOOPERATIVE AND
FAILED TO HEED ADVICE GIVEN BY FEDERAL AND STATE OFFICIALS. FOR
EXAMPLE, A MEMORANDUM DATED NOVEMBER 18, 1967, TO THE THEN GOVERNOR OF
TEXAS, FROM A STATE EMPLOYEE, STATES, IN PART:
"A SURVEY OF THE COUNTY ON OCTOBER 27TH CONDUCTED BY (OEP AND STATE
OFFICIALS) INDICATED THAT NUMEROUS INELIGIBLE COUNTY ROADS WERE NOT ONLY
BEING COVERED WITH CALICHE BUT ROADS WERE ACTUALLY BEING CONSTRUCTED OF
THIS MATERIAL BY GEORGE CONSOLIDATED.
"*** IT WAS AGREED THAT THE STATE WOULD BE NOTIFIED THAT ALL WORK
UNDER CATEGORIES A, B, AND C BE IMMEDIATELY STOPPED UNTIL ELIGIBLE WORK
COULD BE CLEARLY IDENTIFIED AND AUTHORIZED IN ORDER TO AVOID FURTHER
EXPENDITURES FOR WHICH THE COUNTY COULD NOT BE REIMBURSED BY THE OFFICE
OF EMERGENCY PLANNING. ***
"ON OCTOBER 28, 1967 GOVERNOR CONNALLY RELAYED THIS MESSAGE BY
TELEGRAM TO JUDGE DANCY.
"MAY WE POINT OUT TO THE GOVERNOR THAT MORE TIME AND EFFORT HAS BEEN
EXPENDED WITH THE COMMISSIONERS OF THIS COUNTY THAN WITH ALL THE OTHER
TWENTY-EIGHT COUNTIES COMBINED. THE COMMISSIONERS FOR CAMERON COUNTY
HAVE REFUSED, FROM THE VERY BEGINNING, TO ACCEPT ADVICE FROM STATE AND
FEDERAL PERSONNEL WORKING IN THE PROGRAM. THEY HAVE CONTINUOUSLY
EMPLOYED THE EVASIVE DELAYING TECHNIQUE WITH A SMOKE SCREEN AROUND EVERY
CATEGORY OF WORK ELIGIBLE UNDER THIS LAW. THEY HAVE PUBLICLY ACCUSED
EVERYONE FROM THE FEDERAL OFFICE OF EMERGENCY PLANNING AND THE GOVERNOR
OF TEXAS TO THE ENGINEERS FROM THE AGENCIES OF MISLEADING THEM AND
GIVING ERRONEOUS INFORMATION."
AFTER MUCH DISCUSSION WITH THE AGENCY, IT HAS BECOME APPARENT TO US
THAT THE STATE AND THE AGENCY HAVE APPLIED DIFFERENT MEANINGS TO THE
WORD "INELIGIBLE." THE STATE HAS GENERALLY CONSIDERED OEP TO BE USING
THAT WORD FOR TYPES OF WORK WHICH COULD NOT BE REIMBURSED UNDER ANY
CIRCUMSTANCES, SUCH AS THE REPAIR OF PRIVATE PROPERTY. OEP, ON THE
OTHER HAND, HAS BEEN USING THE TERM "INELIGIBLE" FOR THOSE TYPES OF
COSTS INCURRED WHICH IT, FOR A VARIETY OF REASONS, DID NOT FEEL COULD BE
REIMBURSED. THUS, IN THE AGENCY'S VIEW, INELIGIBLE WORK CONSISTS, AMONG
OTHER THINGS, OF WORK WHICH IS OUTSIDE THE SCOPE OF THE KIND OF WORK
WHICH CAN BE REIMBURSED; WORK WHICH IS CHARGED AT UNREASONABLE
EQUIPMENT OR LABOR RATES; AND WORK WHICH THE AGENCY FEELS SHOULD HAVE
BEEN PERFORMED ON A HIGHER EFFICIENCY LEVEL.
IT IS OUR UNDERSTANDING THAT IT IS THIS LATTER FACTOR (I.E., THE
EFFICIENCY OF THE CONTRACTOR'S WORK) WHICH ACCOUNTS FOR THE MAJOR
DIFFERENCES BETWEEN THE AMOUNTS CLAIMED AND THE AMOUNTS ALLOWED BY THE
AGENCY. FOR EXAMPLE, OEP STATES THAT THE GREATEST DIFFERENCE ($279,234)
EXISTS WITH REGARD TO DEBRIS REMOVAL CARRIED OUT IN CAMERON COUNTY. OEP
STATES:
"*** SOME REASONS FOR THIS DIFFERENCE ARE THE EXCESSIVE NUMBER OF
HOURS CLAIMED FOR LABOR, SUPERVISION, AND TRUCKS. WITH PROPER
SUPERVISION BY THE COUNTY WE BELIEVE THAT THE ELIGIBLE DEBRIS REMOVAL
COULD HAVE BEEN ACCOMPLISHED IN A NUMBER OF HOURS ESTIMATED BY BOVAY
ENGINEERS, INC., A TEXAS CONSULTING FIRM WHICH WAS HIRED BY OEP TO
PROVIDE OUTSIDE ASSISTANCE IN DETERMINING A FAIR AND REASONABLE COST FOR
THE ELIGIBLE WORK ACCOMPLISHED. THESE ESTIMATES ARE IN REASONABLE
AGREEMENT WITH CORPS OF ENGINEER ESTIMATES BASED ON THE ORIGINAL DAMAGE
SURVEYS AND SUBSEQUENTLY REVIEWED BY THE GALVESTON DISTRICT. ***"
OEP FURTHER STATES THAT WITH REGARD TO THE DIFFERENCES BETWEEN LABOR,
TRUCKS, EQUIPMENT AND SUPERVISION BY NUMBER OF HOURS AND RATE CLAIMED BY
THE STATE AND AS ALLOWED BY OEP, "NO JUSTIFICATION HAS EVER BEEN
PROVIDED BY THE LOCAL APPLICANTS OR THE CONTRACTOR FOR THESE
DISCREPANCIES EXCEPT THAT ADDITIONAL DEBRIS MUST HAVE BEEN REMOVED."
OEP FURTHER STATES THAT USING THE QUANTITY OF DEBRIS ESTIMATED BY IT
TO HAVE BEEN REMOVED FROM CAMERON COUNTY DURING OCTOBER 1967, THE AMOUNT
APPROVED BY OEP FOR SUCH WORK BY GEORGE CONSOLIDATED BREAKS DOWN TO
APPROXIMATELY $3.65 PER CUBIC YARD AND THAT THE AMOUNTS CLAIMED BY
CAMERON COUNTY BREAKS DOWN TO APPROXIMATELY $7.00 PER CUBIC YARD. OEP
POINTS OUT THAT DEBRIS REMOVAL FOLLOWING HURRICANE CELIA IN 1970 WAS
ACCOMPLISHED AT AN AVERAGE COST OF $2.56 PER CUBIC YARD AND THAT AS A
RESULT OF THE MAY 1972 FLOODING NEAR NEW BRAUNFELS, TEXAS, THE CORPS OF
ENGINEERS HAS AWARDED A CONTRACT FOR ELIGIBLE DEBRIS REMOVAL AT $1.75
PER CUBIC YARD. OEP STATES:
"THESE LOWER COSTS OF DEBRIS REMOVAL HAVE OCCURRED DESPITE THE FACT
THAT LABOR AND EQUIPMENT COSTS HAVE GONE UP SUBSTANTIALLY SINCE
HURRICANE BEULAH IN 1967."
THE STATE REBUTS THESE ARGUMENTS ON TWO GROUNDS: FIRST, THAT IT IS
DIFFICULT, IF NOT IMPOSSIBLE, TO ESTIMATE ACCURATELY THE AMOUNT OF
DEBRIS REMOVED IN ORDER TO DETERMINE COST PER CUBIC YARD AND, SECOND,
THAT THE COST OF DEBRIS REMOVAL BETWEEN VARIOUS DISASTERS, AND BETWEEN
VARIOUS PLACES WITHIN ANY GIVEN DISASTER, MAY BE QUITE DIFFERENT. OEP
FURTHER STATES THAT MOST OF THE REMAINING DIFFERENCES IN CAMERON COUNTY
CAN BE FOUND IN ROAD WORK ON PADRE ISLAND WHERE OEP FEELS THE CONTRACTOR
MADE INEFFICIENT USE OF THE TRUCKS AT HIS DISPOSAL. THE CONTRACTOR
DENIES THIS ALLEGATION.
OEP CONCLUDES THAT THE CLAIMS OF CAMERON AND WILLACY COUNTIES HAVE
BEEN GIVEN MORE ATTENTION THAN ANY OTHER CLAIMS IN THE HISTORY OF THE
FEDERAL DISASTER ASSISTANCE PROGRAM AND THAT IT BELIEVES THAT THE
COUNTIES THROUGH THE STATE HAVE RECEIVED FULL REIMBURSEMENT FOR ALL WORK
PERFORMED BY OR FOR THEM WHICH COULD HAVE BEEN FOUND ELIGIBLE UNDER THE
INSTANT CIRCUMSTANCES.
THE BOVAY REPORT
AS NOTED HERETOFORE, BOTH THE STATE AND OEP CITE THE BOVAY REPORT TO
SUPPORT THEIR CONTENTIONS THAT THEIR VIEW IS REASONABLE AND CORRECT.
THE STATE CONTENDS THAT IF THE RAW COST FIGURES PROVIDED BY BOVAY ARE
ADJUSTED BY INCLUSION OF A REASONABLE CONTINGENCY FACTOR TO TAKE INTO
ACCOUNT THE EMERGENCY CONDITIONS UNDER WHICH THE WORK WAS PERFORMED, BY
ADOPTION OF A REALISTIC ALLOWANCE AS TO THE QUANTITY OF ROAD SURFACING
MATERIAL USED, AND BY ADDING A REASONABLE FACTOR TO COVER OVERHEAD AND
PROFIT, THE ADJUSTED BOVAY COST FIGURES WILL EQUAL OR EXCEED THE COSTS
ACTUALLY INCURRED BY THE COUNTIES, THUS DOCUMENTING THE REASONABLENESS
AND APPROPRIATENESS OF THE AMOUNTS CLAIMED BY THE COUNTIES. THE STATE
CONTENDS THAT SUCH ADJUSTMENTS ARE NECESSARY BECAUSE "WHEN IT APPEARED
LIKELY THAT THE 'BOVAY REPORT' WOULD DOCUMENT THE REASONABLENESS OF THE
COUNTIES' CLAIMS," OEP IMPOSED "ARBITRARY RESTRICTIONS ON BOVAY'S
DISCRETION IN DETERMINING THE SCOPE OF WORK PERFORMED BY THE COUNTIES."
THE REBUTTAL CONTAINS A DISCUSSION OF FOUR PROVISIONS IN OEP'S
INSTRUCTIONS TO BOVAY WHICH IT IS CONTENDED REPRESENT ARBITRARY ACTION
ON THE PART OF THE AGENCY.
FOR EXAMPLE, REFERENCE IS MADE TO SECTION 2(B) OF OEP'S INSTRUCTIONS
TO BOVAY WHICH, WITHOUT DISCLOSING THE BASIS FOR ITS ACTION,
"ARBITRARILY DIRECTED BOVAY" FOR THE PURPOSES OF ITS ESTIMATES TO REDUCE
THE MILES CLAIMED TO HAVE BEEN CLEARED. THAT INSTRUCTION READS IN
PERTINENT PART:
"(B) YOU SHOULD MAKE ALLOWANCE FOR ALL ADDITIONAL COUNTY ROADS AND
CANAL ROADS INDICATED AS CLEARED ***. HOWEVER, YOU SHOULD CONSIDER
DEDUCTING AN APPROPRIATE PERCENTAGE OF AREAS OR ROADS, SCHOOLGROUNDS,
AND OTHER AREAS WHICH YOU ESTIMATE WERE NOT COVERED BY DEBRIS. THE
CORPS OF ENGINEERS AND OUR STAFF HAVE ESTIMATED THAT ABOUT 20 PERCENT OF
THE ROAD MILEAGE TABULATED HEREIN WAS NOT COVERED BY ANY DEBRIS. IF YOU
DIFFER SIGNIFICANTLY WITH THIS PERCENTAGE, PLEASE DISCUSS THIS MATTER
FURTHER WITH US."
ANOTHER EXAMPLE CITED IS SECTION 2(A) OF OEP'S INSTRUCTIONS WHICH
PROVIDES:
"(A) THE TEXAS STATE HIGHWAY DEPARTMENT INITIALLY CLEARED ALL STATE
HIGHWAYS AND OTHER ROADS ON THE FEDERAL AID SYSTEM. THEREFORE, IT IS
FELT THAT WHILE ALL STATE HIGHWAYS AND FARM ROADS INDICATED AS CLEARED
SHOULD BE CONSIDERED, AN APPROPRIATE REDUCTION IN THE NUMBER OF
LOADS/MILE (PERHAPS 50 PERCENT) SHOULD BE MADE FOR THE WORK WHICH WAS
DONE BY THE HIGHWAY DEPARTMENT."
THE REBUTTAL REPORT CONTENDS THAT THE LATTER INSTRUCTION WAS
ARBITRARY IN THAT THERE IS NO EXPLANATION FOR THE 50 PERCENT REDUCTION.
ALSO, THE REBUTTAL REPORT STATES THAT ANY STATE WORK PERFORMED "WAS
LIMITED TO 'SECOND-PASS CLEANUP' OF DEBRIS" AND THAT OTHERWISE THE
COUNTIES' CONTRACTOR CLEARED THE ROADS CLAIMED "WITHOUT SUBSTANTIAL
ASSISTANCE FROM STATE FORCES."
OEP REPORTS THAT BOVAY WAS HIRED TO ASSIST OEP'S STAFF PERSONNEL IN
EVALUATING THE STATE'S APPEAL TO THE OEP DIRECTOR AND THAT OEP NEVER
INTENDED TO RELY EXCLUSIVELY UPON, OR BE BOUND BY, THE BOVAY
RECOMMENDATIONS. OEP HAS ALSO INFORMALLY STATED THAT IN ITS VIEW THE
CONTINGENCY FACTOR OF 25 PERCENT ADDED TO THE ESTIMATE FOR REMOVAL OF
DEBRIS AND THE 10 PERCENT INCREASE FACTOR FOR ALL OTHER COST DUE TO THE
EMERGENCY CONDITIONS, BOTH OF WHICH BOVAY INCLUDED IN ITS REPORT, WAS
SUFFICIENT TO TAKE INTO ACCOUNT THE EMERGENCY CONDITIONS UNDER WHICH THE
WORK WAS PERFORMED. OEP ALSO REPORTS THAT BOVAY MADE CERTAIN ERRORS IN
ITS REPORT FOR WHICH OEP HAD TO ADJUST. FOR EXAMPLE, OEP STATES THAT IT
FOUND:
"BOVAY HAD CREDITED GEORGE CONSOLIDATED, INC., WITH SOME WORK THAT
ACTUALLY HAD BEEN PERFORMED BY THE COUNTIES, AND BECAUSE THE MANNER IN
WHICH ADDITIONAL INFORMATION HAS BEEN PROVIDED BY THE COUNTIES, SOME
WORK INCLUDED IN THEIR SUPPLEMENTAL REPORT HAD ALREADY BEEN COVERED IN
THE ORIGINAL REPORT."
AS A RESULT, THE AMOUNTS ESTIMATED BY BOVAY WERE ADJUSTED DOWNWARD BY
OEP. OEP POINTS OUT THAT IT ADDED A 25 PERCENT FACTOR FOR OVERHEAD AND
PROFIT TO THE ADJUSTED AMOUNT. IT STATES THAT BASED ON THE BOVAY
REPORT, AS WELL AS A COMPLETE REVIEW OF ALL OTHER INFORMATION AVAILABLE
TO OEP, THE OEP DIRECTOR APPROVED ADDITIONAL AMOUNTS OF $321,353 AND
$127,525 FOR CAMERON AND WILLACY COUNTIES, RESPECTIVELY.
WE ARE NOT IN A POSITION TO DISPUTE THE ACCURACY OF THE FACTUAL
FINDINGS AND SPECIFIC REDUCTIONS MADE BY OEP IN ITS DISALLOWANCE OF SOME
OF THE AMOUNTS RECOMMENDED BY BOVAY, NOR CAN WE SAY THAT OEP ACTED
IMPROPERLY IN REFUSING TO RELY EXCLUSIVELY ON, OR BE BOUND BY, THE BOVAY
REPORT. ALSO, IN REGARD TO THE ALLEGEDLY ARBITRARY DIRECTIONS GIVEN BY
OEP TO BOVAY, SINCE BOVAY WAS HIRED TO ASSIST OEP'S STAFF, AND NOT TO
ARBITRATE THE DISPUTE, WE CANNOT SAY THAT OEP'S INFORMING BOVAY OF ITS
TENTATIVE CONCLUSIONS WAS IMPROPER, ESPECIALLY SINCE IT APPEARS FROM THE
OEP INSTRUCTIONS THAT BOVAY WAS GIVEN SUFFICIENT LEEWAY TO REACH
DIFFERING CONCLUSIONS.
CONCLUSIONS
AS NOTED ABOVE, THE STATE'S BASIC CONTENTION IS, IN ESSENCE, THAT OEP
IS REQUIRED BY THE APPLICABLE STATUTES, INCLUDING SECTION 303 OF PUB. L.
91-606, TO REIMBURSE IT - AND THROUGH IT THE COUNTIES AND THEIR
CONTRACTORS - FOR THE ACTUAL EXPENSES INCURRED IN ELIGIBLE DEBRIS
REMOVAL EXCEPT TO THE EXTENT THAT OEP REBUTS THE PRIMA FACIE EVIDENCE OF
ELIGIBLE WORK PERFORMED AS RECORDED IN THE DAILY WORK REPORTS OF THE
COUNTIES AND THEIR CONTRACTORS.
ON THE OTHER HAND, OEP'S BASIC POSITION IS, IN ESSENCE, THAT THE USE
OF ITS OWN DAMAGE SURVEY REPORTS AND THE REPORTS AND RECORDS OF THE
OTHER FEDERAL AND STATE AGENCIES INVOLVED IN THE DISASTER RELIEF EFFORTS
AS THE PRIMARY INDICES OF THE WORK FOR WHICH THE COUNTIES COULD BE
REIMBURSED, COUPLED IN THIS CASE WITH THE BOVAY REPORT AND THE REVIEW OF
THE CONTRACTOR'S RECORDS, IS IN ACCORDANCE WITH THE APPLICABLE STATUTES
AND AGENCY REGULATIONS AND PROCEDURES. OEP STATES THAT ITS REGULATIONS
ENABLE IT TO PERFORM INDEPENDENT REVIEWS OF WORK PERFORMED AND TO
DETERMINE, ON THE BASIS OF THE BEST INDEPENDENT EVIDENCE AVAILABLE, THE
AMOUNT AND COST OF ELIGIBLE WORK PERFORMED. OEP FEELS THAT SUCH AN
INDEPENDENT REVIEW IS THE BEST MEANS BY WHICH THE OEP DIRECTOR CAN BE
ASSURED THAT FUNDS UNDER HIS CONTROL ARE EXPENDED IN A LAWFUL MANNER.
IN RESPONSE TO THE STATE'S CONTENTION THAT THE DAILY WORK RECORDS
REPRESENT THE BEST EVIDENCE OF THE TYPE AND AMOUNT OF WORK PERFORMED,
OEP, IN ITS REPORT OF JUNE 30, 1972, STATES:
"IN ORDER TO ACCEPT THE DAILY WORK REPORTS SUBMITTED BY THE
CONTRACTOR AS THE BEST EVIDENCE OF ELIGIBLE WORK PERFORMED AND TO MAKE
PAYMENT ON THAT BASIS WOULD REQUIRE ACCEPTANCE OF THE FOLLOWING
ASSUMPTIONS:
"1) THE CONTRACTOR PERFORMED NO WORK THAT WAS INELIGIBLE.
"2) THE CONTRACTOR PERFORMED ALL WORK IN AS EFFICIENT AND WORKMANLIKE
MANNER AS WAS POSSIBLE UNDER THE CONDITIONS THAT EXISTED AT THE TIME OF
THE DISASTER.
"3) THE DAILY WORK REPORTS THEMSELVES WERE ACCURATE AND THE
DESCRIPTION OF THE WORK WHICH IS GIVEN IS ADEQUATE TO ENABLE SOMEONE TO
DETERMINE THE LOCATION AND AMOUNTS OF WORK PERFORMED.
"4) THE FEDERAL/STATE ESTIMATES AND THE SUBSEQUENT REVIEW AND COST
ESTIMATES BY BOVAY ENGINEERS WERE NOT RELIABLE AND OEP POLICIES AND
PRACTICES FOR DETERMINING ELIGIBLE WORK WERE NOT APPLICABLE TO THESE TWO
CLAIMS, DESPITE SUCCESSFUL USAGE IN HUNDREDS OF CLAIMS PROCESSED SINCE
1950. OF 157 APPLICANTS IN THE DECLARED MAJOR DISASTER, HURRICANE
BEULAH, ONLY CAMERON AND WILLACY COUNTIES HAD ANY PROBLEMS."
OEP CONCLUDES THAT FOR REASONS PREVIOUSLY DISCUSSED, NONE OF THE
ABOVE ASSUMPTIONS ARE APPLICABLE IN THIS CASE AND THAT, THEREFORE, IT IS
IMPOSSIBLE FOR IT TO ACCEPT THE DAILY WORK RECORDS AS EVIDENCE
SUPPORTING PAYMENT IN LIEU OF REGULAR OEP DETERMINATIONS OF ELIGIBLE
WORK.
IT IS A WELL-ESTABLISHED RULE THAT LONGSTANDING ADMINISTRATIVE
REGULATIONS, PRACTICES AND PROCEDURES - AND OEP ADVISES THAT THESE HAVE
BEEN IN EFFECT SINCE 1950 - WHEN DERIVED FROM A CONSISTENT
INTERPRETATION OF THE STATUTES WHICH THE AGENCY IS RESPONSIBLE FOR
ADMINISTERING, ARE ENTITLED TO GREAT WEIGHT AND SHOULD NOT BE OVERTURNED
IN THE ABSENCE OF A CLEAR SHOWING THAT THEY ARE UNREASONABLE OR WITHOUT
A RATIONAL BASIS. FURTHER, WE HAVE FOUND NOTHING IN THE LEGISLATIVE
HISTORIES OF EITHER THE DISASTER RELIEF ACT OF 1970 OR PREVIOUS DISASTER
RELIEF ACTS TO INDICATE A MANDATE BY THE CONGRESS THAT OEP REIMBURSE
EXPENSES ON THE BASIS ASSERTED BY THE STATE. IN THIS REGARD, AND AS
EXPLAINED FULLY ABOVE, IN VIEW OF THE EXPLANATION IN THE CONFERENCE
REPORT OF SECTION 303 OF THE 1970 DISASTER RELIEF STATUTE, IT WOULD NOT
BE UNREASONABLE TO CONCLUDE, AS DID OEP, THAT THE SECTION WAS MEANT FOR
EMPHASIS ONLY, THAT IT IS NOT TO BE CONSTRUED AS AFFECTING CLAIMS "OF
ANY KIND PRESENTLY IN BEING," AND THAT, HENCE, IT WAS NOT INTENDED TO
REQUIRE REIMBURSEMENT OF COSTS ON A BASIS OTHER THAN THAT PREVIOUSLY,
AND CONSISTENTLY, USED BY OEP. ALSO, AS INDICATED ABOVE, EVEN IF
SECTION 303 BE CONSTRUED AS OTHERWISE AUTHORIZING REIMBURSEMENT, IT
COULD NOT BE USED AS A BASIS FOR PAYMENT IN THE INSTANT CASE, SINCE ALL
THE FUNDS ALLOCATED UNDER THE DISASTER RELIEF AGREEMENT INVOLVED HERE
HAVE BEEN OBLIGATED.
IN CONCLUSION, WE HAVE REVIEWED THE APPLICABLE OEP REGULATIONS,
PRACTICES, AND PROCEDURES WHICH AUTHORIZE THE AGENCY TO USE THE BEST
INDEPENDENT ESTIMATE TO DETERMINE THE REASONABLE COST OF PERFORMING
ELIGIBLE WORK AND TO ADJUST AS NECESSARY, EITHER UPWARD OR DOWNWARD, THE
ESTIMATED AMOUNTS ON THE BASIS OF UPDATED INFORMATION IT RECEIVES FROM
FEDERAL AND STATE SOURCES AS WELL AS ACCEPTABLE INFORMATION FROM THE
APPLICANTS. THIS PROCEDURE IS DESIGNED TO ENABLE THE AGENCY TO
DETERMINE THE REASONABLE COST OF PERFORMING THE NECESSARY WORK AND TO
AVOID REIMBURSING ACTUAL COSTS WHICH WERE INCURRED IN AN UNREASONABLE
AND UNNECESSARY MANNER. EVEN THOUGH THIS LEAVES OEP WITH A GREAT DEAL
OF DISCRETION, WE FEEL THIS IS NOT AN UNREASONABLE APPROACH AND WE
CANNOT SAY THAT OEP'S REGULATIONS, PRACTICES, AND PROCEDURES ARE
IMPROPER OR WITHOUT A RATIONAL BASIS.
AS TO WHETHER THE REGULATIONS WERE OR SHOULD HAVE BEEN WAIVED AND
PAYMENT MADE ON THE BASIS OF THE EXPENSES ACTUALLY INCURRED BECAUSE THE
COUNTIES INVOLVED WERE TOLD THAT THEY COULD COMMENCE EMERGENCY WORK
IMMEDIATELY AND FILE PROJECT APPLICATIONS AS SOON AS POSSIBLE
THEREAFTER, IT APPEARS THAT THE PROCEDURE USED BY OEP IN THIS CASE WAS
NO DIFFERENT FROM THE PROCEDURE IT HAS USED IN ALL SIMILAR SITUATIONS
SINCE 1950. MOREOVER, IT APPEARS FROM OEP'S REPORT TO US THAT OEP
REPEATEDLY EMPHASIZED TO THE COUNTIES THAT ONLY THOSE COSTS DETERMINED
TO BE ELIGIBLE BY OEP IN ACCORDANCE WITH ITS NORMAL ELIGIBILITY CRITERIA
WOULD BE REIMBURSED. THEREFORE, WE CANNOT SAY THAT THE USUAL OEP
PROCEDURES WERE, OR SHOULD HAVE BEEN, WAIVED IN THE INSTANT
CIRCUMSTANCES.
AS TO WHETHER THE STATE HAS ESTABLISHED ANY AMOUNT IN EXCESS OF OEP'S
FINAL ALLOWANCES THAT WE COULD ALLOW, WE MUST POINT OUT THAT THIS OFFICE
IS NOT EQUIPPED TO RESOLVE THE NUMEROUS FACTUAL DISPUTES EXISTING IN
THIS CASE BETWEEN THE STATE AND OEP WITH REGARD TO THE ELIGIBILITY OF
SPECIFIC WORK PERFORMED, THE EFFICIENCY WITH WHICH THE CONTRACTOR DID OR
SHOULD HAVE PERFORMED HIS WORK, OR THE REASONABLENESS OF THE CHARGES FOR
ELIGIBLE WORK PERFORMED. IN THIS REGARD WE ARE IN AGREEMENT WITH OEP
THAT AN AUDIT BY THIS OFFICE OR AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT OF THE CONTRACTOR'S DAILY WORK RECORDS WOULD NOT ESTABLISH
THE REASONABLE REIMBURSABLE COSTS OF THE WORK PERFORMED. ACCORDINGLY,
IN THE ABSENCE OF A CLEAR SHOWING OF ARBITRARINESS OR CAPRICIOUSNESS ON
THE PART OF OEP, WE ARE REQUIRED TO BASE OUR DETERMINATIONS ON THE FACTS
AS REPORTED BY THE AGENCY.
IN THIS REGARD WHILE THE STATE HAS ALLEGED ARBITRARINESS ON THE PART
OF OEP, IN VIEW OF THE FACT THAT OEP REPORTS THAT ITS PERSONNEL, ALONG
WITH EMPLOYEES OF OTHER FEDERAL AGENCIES INCLUDING THE CORPS OF
ENGINEERS AND THE FEDERAL HIGHWAY ADMINISTRATION, OBSERVED INELIGIBLE
WORK BEING PERFORMED; IN VIEW OF CONTEMPORANEOUS STATEMENTS BY STATE
EMPLOYEES THAT INELIGIBLE WORK WAS PERFORMED AND THAT THE COUNTIES WERE
NOT FULLY COOPERATIVE AND THE STATE'S INITIAL ACQUIESCENCE IN THE
FINDINGS CONTAINED IN THE DAMAGE SURVEY REPORTS; IN VIEW OF OEP'S
HIRING OF BOVAY TO ASSIST IT IN REEVALUATING THE CLAIMS; IN VIEW OF
OEP'S REPORTED REVIEW OF THE CONTRACTORS' RECORDS AND A STATEMENT THAT
IT HAS GIVEN MORE CONSIDERATION TO THESE CLAIMS THAN TO ANY OTHER IN THE
HISTORY OF THE FEDERAL DISASTER ASSISTANCE PROGRAM; AND IN VIEW OF ITS
FINAL APPROVAL OF AMOUNTS ALMOST $500,000 MORE THAN IT ORIGINALLY
ALLOWED, IT DOES NOT APPEAR THAT IT CAN BE SAID THAT OEP ACTED
ARBITRARILY IN THE MATTER.
THEREFORE, AND SINCE WE CANNOT OBJECT TO THE METHOD EMPLOYED BY OEP
TO DETERMINE THE AMOUNT OF REIMBURSABLE WORK PERFORMED AND THE
REASONABLE COST THEREOF, WE MUST ACCEPT THE FINAL OEP DETERMINATIONS AS
CORRECT. AS STATED IN LONGWILL V. UNITED STATES, 17 CT. CLS. 288, 291,
IT IS THE DUTY OF THE ACCOUNTING OFFICERS TO REJECT ALL CLAIMS TO WHICH
THEY BELIEVE THERE MAY BE SUBSTANTIAL DEFENSES IN LAW, OR AS TO THE
VALIDITY OF WHICH THEY ARE IN DOUBT. SEE ALSO CHARLES V. UNITED STATES,
19 CT. CLS. 316. ACCORDINGLY, WE FIND NO BASIS ON WHICH WE COULD ALLOW
THE STATE'S CLAIMS.
MERITORIOUS CLAIMS ACT
IF WE DETERMINE THE CLAIMS OF WILLACY AND CAMERON COUNTIES MAY NOT
LAWFULLY BE ADJUSTED UNDER 31 U.S.C. 71, YOU REQUEST THAT WE SUBMIT TO
THE CONGRESS A SPECIAL REPORT AND RECOMMENDATION PURSUANT TO 31 U.S.C.
236. THE STATUTE REFERRED TO, COMMONLY KNOWN AS THE MERITORIOUS CLAIMS
ACT, PROVIDES THAT WHENEVER A CLAIM IS FILED IN THIS OFFICE AGAINST THE
UNITED STATES THAT "MAY NOT LAWFULLY BE ADJUSTED BY THE USE OF AN
APPROPRIATION HERETOFORE MADE, BUT WHICH CLAIM OR DEMAND IN THE JUDGMENT
OF THE COMPTROLLER GENERAL OF THE UNITED STATES CONTAINS SUCH ELEMENTS
OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF
THE CONGRESS, HE SHALL SUBMIT THE SAME TO THE CONGRESS BY SUCH REPORT
CONTAINING THE MATERIAL FACTS AND HIS RECOMMENDATION THEREON."
OEP OPPOSES SUCH A REFERRAL TO CONGRESS ON TWO GROUNDS. FIRST, IT
FEELS THAT THE STATE OF TEXAS HAS NOT PRESENTED A VALID CLAIM. SECOND,
IT FEELS THAT THE MATTER HAS ALREADY BEEN BROUGHT TO THE ATTENTION OF
THE CONGRESS AND THAT FURTHER CONGRESSIONAL REVIEW OF THE MATTER WOULD
NOT BE WARRANTED. THE STATE DISAGREES WITH BOTH GROUNDS.
THE GENERAL ACCOUNTING OFFICE HAS SUBMITTED REPORTS AND
RECOMMENDATIONS TO THE CONGRESS UNDER THE SUBJECT ACT ONLY IN THOSE
CASES WHERE THE FACTS INVOLVED CLEARLY ESTABLISHED SUCH ELEMENTS OF
LEGAL LIABILITY OR EQUITY THAT WE FELT THEY UNDOUBTEDLY DESERVED
CONSIDERATION BY THE CONGRESS. WHEN REVIEWING A CASE TO DETERMINE
WHETHER TO SUBMIT SUCH A REPORT, WE HAVE CONSISTENTLY ACCEPTED THE FACTS
AS REPORTED BY THE ADMINISTRATIVE AGENCY ALTHOUGH THEY ARE NOT NORMALLY
IN DISPUTE IN SUCH CASES.
IN THE INSTANT CASE, WE HAVE FOUND NO LEGAL BASIS TO OBJECT TO THE
METHOD EMPLOYED BY OEP TO DETERMINE THE WORK, AND COSTS THEREOF,
ELIGIBLE FOR REIMBURSEMENT. UNDER THE FACTS AS REPORTED BY THE AGENCY
ALL ELIGIBLE EXPENSES MUST BE CONSIDERED AS HAVING BEEN PAID AND, HENCE,
NOTHING REMAINS TO REPORT TO THE CONGRESS.
FURTHER, IN VIEW OF THE DISPUTE BETWEEN THE COUNTIES AND OEP OVER THE
FACTS INVOLVED - WHICH AS INDICATED ABOVE WE ARE NOT EQUIPPED TO RESOLVE
- WE CANNOT SAY THE CLAIMS PRESENTED TO US CONTAIN SUCH ELEMENTS OF
LEGAL LIABILITY OR EQUITY THAT WE WOULD BE WARRANTED IN SUBMITTING THEM
TO THE CONGRESS FOR ITS CONSIDERATION. IN THIS REGARD, WE NOTE THAT
THESE CLAIMS HAVE, IN EFFECT, ALREADY BEEN BROUGHT TO THE ATTENTION OF
THE CONGRESS THROUGH THE DISCUSSION AND APPARENT REJECTION OF SENATOR
YARBOROUGH'S AMENDMENT TO S. 3619, AND WE DO NOT FEEL IT APPROPRIATE FOR
US TO BRING THESE CLAIMS TO THE ATTENTION OF CONGRESS AGAIN SINCE WE ARE
NOT IN A POSITION TO MAKE A RECOMMENDATION THEREON.
WE REGRET THAT WE COULD NOT REACH A DETERMINATION MORE FAVORABLE TO
THE CLAIMS PRESENTED ON BEHALF OF THE COUNTIES OF WILLACY AND CAMERON.
B-176538(1), JAN 12, 1973
BID PROTEST - R & D CONTRACTS - TECHNICAL EVALUATION - PRICE AS A FACTOR
DENIAL OF PROTEST ON BEHALF OF SPACE RESEARCH CORPORATION (SRC)
AGAINST THE AWARD OF A COST-PLUS-FIXED-FEE CONTRACT TO TERRASPACE, INC.,
UNDER AN RFP ISSUED BY THE FEDERAL RAILROAD ADMINISTRATION, FOR THE
FABRICATION AND TESTING OF A WATER CANNON.
IN THE CONTEXT OF NEGOTIATED COST REIMBURSEMENT TYPE RESEARCH AND
DEVELOPMENT CONTRACTS, PROPOSED COST OR PRICE IS NOT NECESSARILY
CONTROLLING IN DETERMINING WHICH PROPOSAL IS MOST ADVANTAGEOUS TO THE
GOVERNMENT. B-170374, MARCH 3, 1971. THE PRIMARY CONSIDERATION IN SUCH
CONTRACTS IS WHICH CONTRACTOR CAN PERFORM IN A MANNER MOST ADVANTAGEOUS
TO THE GOVERNMENT, FPR 1-3.805-2. FURTHER, DETERMINATIONS RELATING TO
THE TECHNICAL EVALUATION OF PROPOSALS ARE WITHIN THE DISCRETIONARY
AUTHORITY OF THE ADMINISTRATIVE AGENCY, AND GAO WILL NOT INTERPOSE A
LEGAL OBJECTION IN THE ABSENCE OF A CLEAR SHOWING OF AN ARBITRARY ABUSE
OF DISCRETION. 48 COMP. GEN. 314, 318 (1968). BASED ON THIS RECORD,
THE COMP. GEN. IS NOT IN A POSITION TO CONCLUDE THAT THE AGENCY'S
DECISION TO EMPHASIZE TERRASPACE'S EXPERTISE IN THE SPECIFIC AREA OF
HYDRODYNAMICS WAS UNREASONABLE. ACCORDINGLY, THE PROTEST IS DENIED.
TO MR. STERLING COLE:
WE REFER TO YOUR MEMORANDUM OF OCTOBER 26, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING ON BEHALF OF THE SPACE RESEARCH CORPORATION
(SRC) AGAINST THE AWARD OF A COST-PLUS-FIXED-FEE CONTRACT TO TERRASPACE,
INC., FOR THE FABRICATION AND TESTING OF A WATER CANNON UNDER FEDERAL
RAILROAD ADMINISTRATION, DEPARTMENT OF TRANSPORTATION, REQUEST FOR
PROPOSALS NO. DOT-FR-20042.
IT IS YOUR CONTENTION THAT THE ADMINISTRATOR OF THE FEDERAL RAILROAD
ADMINISTRATION, THE SOURCE SELECTION AUTHORITY FOR THIS PROCUREMENT,
IMPROPERLY DETERMINED THAT THE AWARD OF THE CONTRACT TO TERRASPACE WAS
MOST ADVANTAGEOUS, PRICE AND OTHER FACTORS CONSIDERED. YOU URGE THAT
THE CONTRACT BE CANCELED AND AN AWARD MADE TO SRC. FROM OUR REVIEW OF
THE RECORD BEFORE US AND FOR THE REASONS DISCUSSED BELOW, WE MUST
CONCLUDE THAT THERE IS NO BASIS FOR OUR OFFICE TO INTERPOSE A LEGAL
OBJECTION TO THE AWARD.
THE SUBJECT REQUEST FOR PROPOSALS WAS A RESOLICITATION OF THE
REQUIREMENT. THE INITIAL SOLICITATION, WE ARE ADVISED, WAS CANCELED
BECAUSE OF A NEED TO REVISE AND UPDATE THE SPECIFICATIONS. WE
UNDERSTAND THAT SRC AND TERRASPACE SUBMITTED PROPOSALS IN RESPONSE TO
THE INITIAL SOLICITATION, AND BOTH WERE DETERMINED TO BE TECHNICALLY
ACCEPTABLE.
BOTH FIRMS SUBMITTED TIMELY TECHNICAL AND PRICE PROPOSALS IN RESPONSE
TO THE INSTANT SOLICITATION AND WERE AGAIN DETERMINED TO BE TECHNICALLY
ACCEPTABLE. THE PROPOSALS OF TWO OTHER RESPONDING FIRMS WERE DETERMINED
TO BE UNACCEPTABLE AND NOT SUSCEPTIBLE OF BEING MADE ACCEPTABLE WITHOUT
SUBSTANTIAL REVISIONS, AND ULTIMATELY THEIR PROPOSALS WERE REJECTED.
IN ACCORDANCE WITH DOT NOTICE 4200.6, SOURCE SELECTION, THE TECHNICAL
PROPOSALS WERE INITIALLY REFERRED TO A TECHNICAL EVALUATION TEAM FOR
REVIEW IN LIGHT OF THE EVALUATION CRITERIA AND WEIGHTS SET FORTH IN THE
REQUEST FOR PROPOSALS. ON MAY 5, 1972, THE TECHNICAL EVALUATION TEAM
TRANSMITTED ITS FINDINGS TO THE SOURCE EVALUATION BOARD (SEB) FOR ITS
CONSIDERATION. OUT OF A POSSIBLE 100 POINTS, THE TEAM REPORTED A SCORE
OF 90 FOR TERRASPACE AND A SCORE OF 81 FOR SRC. ITS REPORT CONTAINED
THE FOLLOWING NARRATIVE, IDENTIFYING THE STRENGTHS AND UNCERTAINTIES OF
THE PROPOSALS:
"SPACE RESEARCH CORPORATION (SRC) PROPOSAL AS SUBMITTED MORE THAN
ADEQUATELY CONSIDERS THE TECHNICAL ASPECTS OF THIS PROGRAM. SRC IS A
LARGE RESEARCH ORGANIZATION AND HAS EXTENSIVE FACILITIES FOR
MANUFACTURING AND MODIFYING, AS REQUIRED, THE WATER CANNON. PROPOSAL
RECOGNIZES SOME OF THE UNCERTAINTIES OR POSSIBLE PROBLEM AREAS IN THE
WATER CANNON DESIGN AND RECOMMENDS POSSIBLE SOLUTIONS. THE IMPORTANCE
OF QUALITY CONTROL AND THOROUGH WATER CANNON EXAMINATION DURING THE TEST
PHASE WAS DESCRIBED. ADEQUATE CONSULTANTS WILL BE UTILIZED TO REVIEW
THE TERRAPAK UNIT DESIGN MODIFICATIONS AND FIELD TEST PROGRAM. WHILE IT
IS NOTED THAT SRC HAS NO EXPERIENCE WITH CONTINUOUS WATER JETS OR PULSED
WATER CANNONS, IT DOES HAVE RELATABLE EXPERIENCE WITH LIGHT GAS GUNS AND
LARGE CALIBER WEAPONS. BASED ON THE PROPOSAL, IT APPEARS THAT SRC IS
NOT FAMILIAR WITH ALL THE TERMINOLOGY COMMONLY USED IN WATER CANNON
TECHNOLOGY. *** THE TECHNICAL EVALUATION PANEL QUESTIONED WHETHER SRC
HAD THE EXPERIENCE IN DRILLING EXPONENTIAL HOLES OR IN DESIGNING THE
ROTARY BROACHES AND OTHER TOOLS REQUIRED FOR FABRICATION OR THE WATER
CANNON NOZZLE. SRC PROPOSED FIELD TESTING LOCALLY IN VERMONT, BUT DID
NOT ADDRESS THE COLD WEATHER WINTER OPERATION AND ASSOCIATED FREEZE-UP
PROBLEMS. ***
"TERRASPACE, INC. THE TECHNICAL EVALUATION TEAM FOUND THE TERRASPACE
PROPOSAL TO BE THE BEST QUALIFIED OF ALL THE PROPOSALS SUBMITTED.
TERRASPACE, BEING THE ORIGINAL DESIGNERS OF THE WATER CANNON, HAS A
DISTINCT ADVANTAGE IN FABRICATION, OPERATION, TESTING, AS WELL AS IN
MAKING ANY DESIGN CHANGES WHICH MAY BE NECESSARY. THE TERRASPACE
TECHNICAL TEAM IS WELL QUALIFIED TO PERFORM THIS PROGRAM. DR. W. C.
COOLEY, THE PROPOSED PROJECT MANAGER, IS THE MOST KNOWLEDGEABLE
HYDRODYNAMICIST IN THE U.S. ON WATER CANNON DESIGN AND DEVELOPMENT.
FURTHERMORE, TERRASPACE HAS ESTABLISHED CLOSE COLLABORATION WITH THE
SOVIET SCIENTISTS WHO HAVE DEVELOPED WATER CANNONS AND THE BASIC DESIGN
CRITERIA AND CALCULATIONS FOR THE NOZZLE. TERRASPACE ALSO HAS THE
ADVANTAGE OF FABRICATING AND TESTING A PULSED WATER CANNON FOR THE U.S.
BUREAU OF MINES. *** THE PROPOSAL HAS IDENTIFIED MANY AREAS WHERE THE
DESIGN AND TEST INSTRUMENTATION CAN AND MUST BE MODIFIED TO IMPROVE
PERFORMANCE AND COST. *** ALL MACHINE WORK ON THE WATER CANNON DESIGN
FABRICATION IS TO BE SUBCONTRACTED BY TERRASPACE AND COMPETITIVE BIDS
WILL BE SOLICITED WHEREVER POSSIBLE. THIS APPROACH SHOULD PERMIT
DIFFICULT COMPONENTS (I.E. NOZZLE) TO BE FABRICATED BY THE BEST
QUALIFIED SUPPLIER. HOWEVER, OUTSIDE PROCUREMENT MIGHT PRESENT SCHEDULE
AND QUALITY CONTROL PROBLEMS. IN ADDITION, MINOR MODIFICATIONS TO THE
DESIGN WILL REQUIRE OUTSIDE ASSISTANCE FROM LOCAL MACHINE SHOP
FACILITIES. THE LACK OF IN-HOUSE MACHINE SHOP FACILITIES AT TERRASPACE
MIGHT LIKEWISE CAUSE SOME PROGRAM DELAYS. TERRASPACE WILL UTILIZE
CONSULTING SERVICES FOR THE MODIFICATIONS TO THE TERRAPAK UNIT."
IN ADDITION TO THE TECHNICAL EVALUATION REPORT, THE SEB CONSIDERED
THE FOLLOWING COST-PLUS-FIXED-FEE PROPOSALS: TERRASPACE - $174,148;
SRC - $155,668.
THE INTERIM REPORT OF THE SEB TO THE SOURCE SELECTION OFFICIAL (SSO)
WAS ISSUED ON MAY 11, 1972. IT WAS CONCLUDED THEREIN THAT, AFTER
CONSIDERING A PRICE ANALYSIS AND THE TECHNICAL EVALUATION OF EACH
PROPOSAL, ONLY THE PROPOSALS OF TERRASPACE AND SRC WERE WITHIN THE
COMPETITIVE RANGE. WITH RESPECT TO TERRASPACE AND SRC PROPOSALS THE
BOARD MADE THE FOLLOWING COMMENTS:
"1. DR. WILLIAM COOLEY OF TERRASPACE IS THE ONLY KNOWN TECHNICAL
PERSON IN THE U.S. WITH EXPERIENCE IN HIGH PRESSURE WATER CANNONS. HE
HAS GOTTEN THIS EXPERIENCE THROUGH A CONTRACT WITH THE BUREAU OF MINES
FOR A LABORATORY MODEL, THROUGH EXCHANGE OF INFORMATION WITH RUSSIAN
SCIENTISTS WHO HAVE BUILT THE ONLY FULL SIZE WATER CANNON KNOWN, AND
THROUGH WORK OF HIS OWN WITH EXOTECH, INC.
HIS EXPERIENCE IS FAR ABOVE THE TOTAL EXPERIENCE OF SPACE RESEARCH
CORP., AND ITS CONSULTANTS.
"2. THE SPACE RESEARCH QUARRY TEST PROGRAM RAISES SOME QUESTIONS
BECAUSE THE SCHEDULE CALLS FOR TESTING IN THE WINTER, AND FOR THIS TO BE
ACCOMPLISHED IN VERMONT MAY BE A SERIOUS PROBLEM.
BUT SPACE RESEARCH ALSO HAS AN UNCERTAINTY IN THAT THEY STATED IF
TECHNICAL PROBLEMS ARE ENCOUNTERED, THE COST WILL HAVE TO BE
RENEGOTIATED. THIS MEANS NO PROVISION HAS BEEN MADE FOR NORMAL
DEVELOPMENT DIFFICULTIES.
"3. SPACE RESEARCH HAS A GOOD RECORD OF PERFORMANCE WITH OTHER
GOVERNMENT AGENCIES AND APPEARS TO HAVE EXCELLENT FACILITIES.
"4. THE TERRASPACE PROPOSAL TO SUBCONTRACT THE MACHINING AND
FABRICATION INTRODUCES SOME UNCERTAINTY SINCE THE QUALITY OF THE
SUBCONTRACTORS WILL BE ALL IMPORTANT IN THE QUALITY OF THE FINAL
PRODUCT."
THE BOARD, THEREFORE, RECOMMENDED DISCUSSIONS WITH BOTH OFFERORS TO
CLEAR UP THESE UNCERTAINTIES. THE SSO CONCURRED IN THIS RECOMMENDATION.
DISCUSSIONS WERE HELD WITH SRC AT ITS PLANT. BASED UPON ITS REVIEW OF
THE DEPARTMENT OF TRANSPORTATION WATER CANNON REPORT AND RUSSIAN DATA,
SRC DID NOT FORESEE ANY MAJOR PROBLEMS IN MANUFACTURING AND TESTING OF
THE CANNON. THE REPORT ON THESE DISCUSSIONS NOTED THAT THE SRC PROGRAM
ALLOCATED RESOURCES ONLY FOR THE BASIC TASK AND FOR THE SPECIFIC
PROBLEMS IDENTIFIED IN THE PROPOSAL. IF MAJOR PROBLEMS WERE
ENCOUNTERED, SRC WOULD NEED ADDITIONAL FUNDS AND TIME TO COMPLETE THE
PRODUCTION. SRC EXPLAINED HOW IT PLANNED TO FABRICATE AN EXPONENTIAL
NOZZLE AND INDICATED THAT A DEPARTMENT OF DEFENSE QUALITY CONTROL
APPROVED INSPECTOR WAS AT ITS PLANT AND COULD BE USED FOR THE
PROCUREMENT. THE LOCATIONS AND METHODS TO BE EMPLOYED FOR TESTING
DURING THE WINTER WERE ALSO OUTLINED BY SRC. FINALLY, THE REPORT NOTED
THAT THE PROPOSED PROJECT MANAGER WAS LOCATED IN CANADA AND WOULD VISIT
THE SRC PLANT ONE OR TWO DAYS A WEEK TO DIRECT THE PROGRAM. A REVIEW OF
TERRASPACE'S FINANCIAL CAPABILITIES WAS MADE AND THESE WERE FOUND
ACCEPTABLE.
WITH THIS ADDITIONAL INFORMATION BEFORE IT, THE SEB SUBMITTED ITS
SOURCE SELECTION REPORT ON JUNE 12, 1972. THE FOLLOWING PORTIONS OF THE
SEB'S REPORT ARE PERTINENT TO OUR CONSIDERATION:
"WE HAVE NO QUESTION *** THAT (1) THE TWO OFFERORS HAVE A COMPLETE
UNDERSTANDING OF THE REQUIREMENTS, AND (2) THAT EACH FULLY RECOGNIZES
THE COMPETITIVE PRESSURES AND HAS SUBMITTED A COMPETITIVE PRICE.
CONSEQUENTLY, NO USEFUL PURPOSE WOULD BE SERVED BY NEGOTIATIONS.
"THE SEB HAS COME TO THE FOLLOWING CONCLUSIONS CONCERNING THE TWO
OFFERORS:
"-TERRASPACE IS PROPOSING TO UTILIZE PERSONNEL WITH GREATER PERTINENT
TECHNICAL BACKGROUND THAN SPACE RESEARCH PERSONNEL. IT IS NOTED THAT
THE PROGRAM MANAGER OF SPACE RESEARCH WORKS OUT OF THE MONTREAL
TECHNICAL OFFICE AND PLANS TO VISIT THE NORTH TROY AEROBALLISTIC
LABORATORY ONE OR TWO DAYS A WEEK WHERE THE WATER CANNON WILL BE
FABRICATED AND TESTED. A FULL TIME ENGINEERING AID OR TECHNICIAN AT THE
LABORATORY WILL BE UTILIZED BY SPACE RESEARCH TO COMMUNICATE DAILY
STATUS REPORTS TO THE PROGRAM MANAGER. THE TERRASPACE PROGRAM MANAGER
AND ENGINEERS WILL WORK DIRECTLY AT THEIR DEVELOPMENT LABORATORY.
"-TERRASPACE HAS EXPERIENCE IN THE DESIGN, FABRICATION AND TESTING OF
WATER CANNONS THROUGH (1) THE DIRECT EXPERIENCE OF ITS PRESIDENT, DR.
COOLEY, THE ONLY KNOWN HIGH PRESSURE WATER CANNON TECHNICAL PERSON IN
THE U.S., (2) THROUGH CONTRACTS FOR DESIGNING, FABRICATING AND TESTING A
SIMILAR LABORATORY MODEL FOR THE BUREAU OF MINES, AND (3) THROUGH THE
EXPERIENCE GAINED IN THE PREPARATION OF THE DESIGN DRAWINGS AND
SPECIFICATIONS FOR THIS PROPOSED WORK, FURNISHED TO FRA BY TERRASPACE
UNDER CONTRACT DOT-FR-00017. SPACE RESEARCH DOES NOT HAVE COMPARABLE
BACKGROUND OR EXPERIENCE. THE CLOSEST RELATED WORK BY SPACE RESEARCH IS
WITH LIGHT GAS GUNS AND LARGE CALIBER WEAPONS.
"-THE FINAL TECHNICAL RATING OF TERRASPACE WAS HIGHER THAN THAT OF
SPACE RESEARCH. TERRASPACE'S TECHNICAL UNDERSTANDING OF WATER CANNON
PROGRAMS IS SUPERIOR TO SPACE RESEARCH'S. BOTH FIRMS, NONETHELESS, WERE
CONSIDERED TO BE CAPABLE OF PERFORMING THE WORK.
"-SPACE RESEARCH HAS COMPLETE MANUFACTURING FACILITIES WITH MINOR
EXCEPTIONS, WHERE TERRASPACE DOES NOT. IT WILL BE NECESSARY FOR
TERRASPACE TO SUBCONTRACT ALL OF THE COMPONENTS FOR THIS R&D WATER
CANNON PROGRAM.
"-TERRASPACE IS IN A VERY MARGINAL FINANCIAL POSITION, AND WHILE IT
IS THE OPINION OF THE AUDIT MEMBER OF THE SEB THAT THEY CAN SURVIVE
THROUGH THE PERIOD OF THE PROPOSED CONTRACT, THEY MUST BE VIEWED AS A
SERIOUS RISK IN THIS AREA. SPACE RESEARCH HAS NO FINANCIAL
DIFFICULTIES.
"-SPACE RESEARCH HAS SUBMITTED A CPFF PROPOSAL OF $155,668, WHILE
TERRASPACE HAS SUBMITTED A CPFF PROPOSAL OF $174,148. SPACE RESEARCH'S
PROGRAM IS SUCCESS ORIENTED AND ESTIMATED COSTS DO NOT INCLUDE ANY
SIGNIFICANT CONTINGENCY FUNDS TO RESOLVE ANY DESIGN OR TEST PROBLEMS
THAT MAY BE ENCOUNTERED. IT IS THE SEB OPINION THAT THE PROBABILITIES
OF COST OVERRUNS AND DELAYS WOULD BE GREATER FOR SPACE RESEARCH, WHICH
DOES NOT HAVE DIRECT WATER CANNON EXPERIENCE AND HAS PROVIDED NO
CONTINGENCY, THAN IT WOULD BE FOR TERRASPACE.
"-THE SEB IS OF THE OPINION THAT, EXCEPT FOR THE QUESTION OF
FINANCIAL SOLVENCY, THE PROBABILITY OF OBTAINING A SUCCESSFUL WATER
CANNON PROGRAM IS GREATER FROM TERRASPACE THAN FROM SPACE RESEARCH."
THE SEB MADE NO RECOMMENDATION TO THE ADMINISTRATOR AS TO WHICH FIRM
SHOULD RECEIVE THE AWARD. IT DID NOTE THAT IT CONSIDERED THE DIFFERENCE
IN THE COST PROPOSALS TO BE INSIGNIFICANT AND EXPRESSED THE VIEW THAT
FROM THIS STANDPOINT THE ADMINISTRATOR COULD PROPERLY SELECT EITHER
SOURCE. FURTHER, IN THE SEB'S OPINION THE CHOICE FACING THE
ADMINISTRATOR WAS BETWEEN "A MARGINALLY FINANCED COMPANY WHICH HAS THE
GREATER EXPERIENCE, TECHNICAL EXPERTISE, AND PROBABILITY OF SUCCESS, AND
A SOLVENT COMPANY WITH COMPLETE FACILITIES BUT WITHOUT COMPARABLE
BACKGROUND IN THE WATER CANNON PROGRAM WHICH WE ARE PURCHASING."
IN ULTIMATELY DECIDING TO AWARD THE CONTRACT TO TERRASPACE, THE
ADMINISTRATOR IN HIS REPORT TO OUR OFFICE ADVISES THAT:
"AS THE SOURCE SELECTION OFFICIAL, I CHOSE TERRASPACE OVER SRC
BECAUSE I FELT THAT THEIR PRIOR EXPERIENCE AND SUPERIOR TECHNICAL RATING
OUTWEIGHED THE PRICE DIFFERENTIAL OF THE TWO ESTIMATED COST PROPOSALS.
IN MY OPINION, THE PROBABILITY OF OBTAINING A SUCCESSFUL WATER CANNON IS
GREATER FROM TERRASPACE THAN FROM SPACE RESEARCH."
INITIALLY, IT IS SRC'S CONTENTION THAT THE SSO FAILED TO ACCORD
CONTROLLING SIGNIFICANCE TO THE FACT THAT THE "PRICE OF SRC WAS 10% LESS
THAN TERRASPACE." HOWEVER, AS THE ADMINISTRATOR POINTS OUT, WE HAVE
RECOGNIZED THAT IN THE CONTEXT OF NEGOTIATED COST-REIMBURSEMENT-TYPE
RESEARCH AND DEVELOPMENT CONTRACTS, PROPOSED COST OR PRICE IS NOT
NECESSARILY CONTROLLING IN DETERMINING WHICH PROPOSAL IS MOST
ADVANTAGEOUS TO THE GOVERNMENT. 50 COMP. GEN. 739,744 (1971), CITING
B-170374, MARCH 3, 1971; B-165471, JANUARY 24, 1969. SEE, ALSO,
SECTION 1-3.805-2 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), WHICH
PROVIDES IN PERTINENT PART THAT:
"THE AWARD OF COST REIMBURSEMENT TYPE CONTRACTS PRIMARILY ON THE
BASIS OF ESTIMATED COSTS MAY ENCOURAGE THE SUBMISSION OF UNREALISTICALLY
LOW ESTIMATES AND INCREASE THE LIKELIHOOD OF COST OVERRUNS. THE COST
ESTIMATE IS IMPORTANT TO DETERMINE THE PROSPECTIVE CONTRACTOR'S
UNDERSTANDING OF THE PROJECT AND ABILITY TO ORGANIZE AND PERFORM THE
CONTRACT. *** BEYOND THIS, HOWEVER, THE PRIMARY CONSIDERATION IN
DETERMINING TO WHOM THE AWARD SHALL BE MADE IS: WHICH CONTRACTOR CAN
PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT."
FROM THE RECORD AND AS INDICATED IN THE VARIOUS EVALUATION REPORTS,
IT IS CLEAR THAT BOTH COST PROPOSALS WERE CONSIDERED TO BE IN THE SAME
RANGE AND THE APPROXIMATELY $19,500 DIFFERENCE IN THE ESTIMATED PRICES
OF TERRASPACE AND SRC COST PROPOSALS WAS CONSIDERED INSIGNIFICANT. IN
THIS CONNECTION, WE DO NOT UNDERSTAND THE OBSERVATION THAT THERE WAS
GREATER LIKELIHOOD OF AN OVERRUN UNDER THE SRC PROPOSAL TO MEAN THAT
THERE WOULD BE NO POSSIBILITY OF AN OVERRUN IF THE TERRASPACE PROPOSAL
WERE ACCEPTED. IN OUR VIEW, THE OBSERVATION ESSENTIALLY REFLECTS AN
EXPRESSION OF THE GREATER CREDIBILITY PLACED ON THE TERRASPACE COST
PROPOSAL. THIS EXPRESSION WAS BASED ON THE JUDGMENT THAT POTENTIAL
DEVELOPMENT RISKS IN TERMS OF COST IMPACT WERE NOT AS WELL ACCOUNTED FOR
IN THE SRC PROPOSAL AS THEY WERE IN THE TERRASPACE PROPOSAL. WHILE THIS
JUDGMENT IS DISPUTED, THE RECORD BEFORE US DOES NOT AFFORD A BASIS FOR
TAKING EXCEPTION TO THE CONTRACTING AGENCY'S ASSESSMENT OF WHAT THE
ULTIMATE ACTUAL COST TO THE GOVERNMENT MIGHT BE. IN ANY EVENT, EVEN IF
WE WERE TO ASSUME THAT THE CONTRACTING AGENCY SHOULD HAVE PLACED GREATER
CREDIBILITY ON SRC'S ESTIMATE OF THE ULTIMATE COST OF THE CONTRACT, THIS
FACT WOULD NOT BE DECISIVE. FOR, AS WE HAVE INDICATED, IN A PROCUREMENT
OF THIS NATURE, THE CONTRACTING AGENCY MAY PROPERLY SELECT A TECHNICALLY
SUPERIOR AND HIGHER PRICED PROPOSAL OVER A LOWER RATED AND LOWER PRICED
PROPOSAL. AND, FROM THE RECORD, IT IS CLEAR THAT THE TECHNICAL
EXCELLENCE OF TERRASPACE'S PROPOSAL VIS-A-VIS SRC'S PROPOSAL WAS THE
BASIS FOR AWARD.
AT THIS POINT, WE MUST EMPHASIZE THAT DETERMINATIONS RELATIVE TO THE
TECHNICAL EVALUATION OF PROPOSALS ARE WITHIN THE DISCRETIONARY AUTHORITY
OF THE CONTRACTING AGENCY AND IN THE ABSENCE OF A CLEAR SHOWING OF AN
ARBITRARY ABUSE OF DISCRETION, OUR OFFICE WILL NOT INTERPOSE A LEGAL
OBJECTION. 48 COMP. GEN. 314, 318 (1968); B-174799, JUNE 30, 1972;
B-173367, SEPTEMBER 28, 1971.
REVIEW OF THE TECHNICAL EVALUATION TEAM'S REPORT INDICATES THAT THE
DIFFERENCE BETWEEN THE SRC AND TERRASPACE TECHNICAL SCORES IS FOUNDED
PRIMARILY ON THE TEAM'S ASSESSMENT OF THE PROPOSALS IN LIGHT OF THE
FOURTH EVALUATION CRITERION, "TYPES OF SCIENTIFIC, TECHNICAL OR
ENGINEERING TALENT AND LEVELS OF EFFORT PROPOSED TO DEVOTE TO THE WORK,"
AND THE SIXTH EVALUATION CRITERION, "PAST EXPERIENCE IN SIMILAR
TECHNICAL AREAS OR WITH COMPARABLE PROJECTS." TOGETHER THESE CRITERIA
ACCOUNTED FOR 55 OF THE 100 TECHNICAL POINTS POSSIBLE. THE DIFFERENCES
PERCEIVED IN THESE TWO AREAS ULTIMATELY FURNISHED THE BASIS FOR THE
AWARD TO TERRASPACE.
YOU HAVE QUESTIONED THE CORRECTNESS OF THE DIFFERENCES DISCERNED AND
RELIED UPON UNDER EACH CRITERION. WITH RESPECT TO THE FOURTH CRITERION,
YOU CONTEND THAT THE CLAIMS MADE FOR TERRASPACE'S PERSONNEL AT THE
EXPENSE OF SRC ARE CLEARLY ILL-FOUNDED AND UNFAIR. YOU MAINTAIN THAT
SRC HAS WELL-RECOGNIZED EXPERTS IN THE FIELD OF FLUID MECHANICS OF WHICH
HYDRODYNAMICS IS BUT A MINOR BRANCH. AS WE VIEW THE RECORD, THE
CONTRACTING AGENCY DID NOT, AS YOU SUGGEST, DISCOUNT THE EXPERTISE OF
SRC'S TEAM. INDEED, THE SCORING OF THE TECHNICAL EVALUATION PRECLUDES
AN INFERENCE OF THIS NATURE. MOREOVER, WE ARE NOT IN A POSITION, ON THE
RECORD, TO CONCLUDE THAT THE CONTRACTING AGENCY'S DECISION TO EMPHASIZE
TERRASPACE'S EXPERTISE IN THE SPECIFIC AREA OF HYDRODYNAMICS IS
UNREASONABLE. SIMILARLY, AND CONTRARY TO YOUR CONTENTION, THE
CONTRACTING AGENCY COULD PROPERLY ACCORD GREATER WEIGHT IN ASSESSING
PRIOR EXPERIENCE UNDER THE FOURTH EVALUATION CRITERION TO THE MORE
DIRECTLY PERTINENT EXPERIENCE OF TERRASPACE IN THE DEVELOPMENT OF WATER
CANNON. SEE, E.G., B-174799, JUNE 30, 1972, B-173427, MARCH 14, 1972.
FINALLY, YOU QUESTION TERRASPACE'S RESPONSIBILITY. SPECIFICALLY, YOU
MAINTAIN IN YOUR LETTER OF AUGUST 31, 1972, THAT IT IS BEYOND
COMPREHENSION THAT TERRASPACE "WITH ONLY A FEW TECHNICIANS, NO ASSETS,
NO CAPITAL, LITTLE OR NO EXPERIENCE, NO LABORATORIES AND NO EQUIPMENT IS
SUPERIOR TO SRC WITH AMPLE CAPITAL, LABORATORIES AND EQUIPMENT, SCORES
OF TECHNICIANS, A DECADE OF EXPERIENCE AND OTHER VALUABLE FACTORS." THE
CONTRACTING AGENCY DID EXAMINE THE FINANCIAL CAPABILITY OF TERRASPACE
AND FOUND THAT SATISFACTORY FINANCIAL ARRANGEMENTS HAD BEEN MADE. IT
ALSO FOUND THAT TERRASPACE'S PROPOSED SUBCONTRACTING ARRANGEMENTS WERE
SUFFICIENT TO INSURE TIMELY PERFORMANCE AND THAT ITS OWN FACILITIES WERE
ADEQUATE. WE NOTE THAT THIS LATTER REVIEW WAS BASED SUBSTANTIALLY ON
THE PRIOR ANALYSIS CONDUCTED UNDER THE ORIGINAL SOLICITATION. WHILE
FROM THE RECORD WE HAVE SOME RESERVATION ABOUT THE THOROUGHNESS OF THE
INVESTIGATION UNDERTAKEN BY THE FEDERAL RAILROAD ADMINISTRATION WE DO
NOT BELIEVE THERE IS A SUFFICIENT BASIS TO WARRANT LEGAL OBJECTION TO
THE CONTRACTING AGENCY'S DETERMINATION OF THE RESPONSIBILITY OF THE
CONTRACTOR. WE ARE, HOWEVER, BY LETTER OF TODAY BRINGING THIS MATTER TO
THE ATTENTION OF THE SECRETARY OF TRANSPORTATION.
B-176538(2), JAN 12, 1973
PROCUREMENT PRACTICES - DETERMINATION OF BIDDER RESPONSIBILITY
LETTER REGARDING THE PROTEST OF THE SPACE RESEARCH CORPORATION (SRC)
AGAINST THE AWARD OF A CONTRACT TO TERRASPACE, INC., BY THE FEDERAL
RAILROAD ADMINISTRATION.
ALTHOUGH THE PROTEST HAS BEEN DENIED, GAO IS CONCERNED WITH THE
ADEQUACY OF THE INVESTIGATION OF TERRASPACE'S ABILITY TO PERFORM THE
CONTRACT. FROM A REVIEW OF THE RECORD, IT IS DOUBTED THAT THE
INVESTIGATION WAS AS THOROUGH AS IT SHOULD HAVE BEEN IN THE AREA OF
FACILITIES AND ABILITY TO MEET THE DELIVERY SCHEDULE. THE COMP. GEN.
WOULD APPRECIATE YOUR REVIEW OF THIS MATTER WITH A VIEW TOWARD POSSIBLE
FUTURE CORRECTIVE ACTION.
TO MR. SECRETARY:
REFERENCE IS MADE TO THE LETTER OF OCTOBER 4, 1972, FROM THE
ADMINISTRATOR, FEDERAL RAILROAD ADMINISTRATION, REPORTING ON THE PROTEST
OF THE SPACE RESEARCH CORPORATION (SRC) AGAINST THE AWARD OF CONTRACT
NO. DOT-FR-20042 TO TERRASPACE, INC., BY THE FEDERAL RAILROAD
ADMINISTRATION (FRA).
ALTHOUGH WE HAVE BY DECISION OF TODAY (COPY ENCLOSED) DENIED THE
PROTEST, WE ARE CONCERNED WITH THE ADEQUACY OF THE INVESTIGATION OF
TERRASPACE'S ABILITY TO PERFORM THE CONTRACT. AS INDICATED IN THE
DECISION, WE DO NOT OBJECT TO THE APPROACH TAKEN BY FRA IN ISOLATING THE
QUESTIONS OF THE ADEQUACY OF TERRASPACE'S FACILITIES, CREDIT AND ABILITY
TO MEET THE DELIVERY SCHEDULE. HOWEVER, FROM OUR REVIEW OF THE RECORD,
WE DOUBT THAT THE INVESTIGATION WAS AS THOROUGH AS IT SHOULD HAVE BEEN
IN THE AREA OF FACILITIES AND ABILITY TO MEET THE DELIVERY SCHEDULE.
SPECIFICALLY, IT APPEARS THAT LITTLE EFFORT WAS MADE TO DETERMINE
WHETHER TERRASPACE'S PROPOSED SUBCONTRACTORS WERE TECHNICALLY CAPABLE OF
PERFORMING. INSTEAD, SUBSTANTIAL RELIANCE WAS PLACED ON THE ANALYSIS
CONDUCTED UNDER THE ORIGINAL SOLICITATION AND ON TERRASPACE'S SUCCESSFUL
PERFORMANCE OF A SIMILAR CONTRACT WITH THE BUREAU OF MINES. FOR
EXAMPLE, CONCERN WAS INITIALLY EXPRESSED ABOUT SRC'S ABILITY TO
SUCCESSFULLY MANUFACTURE THE NOZZLE OF THE CANNON, AND YET IT DOES NOT
APPEAR FROM OUR RECORD THAT TERRASPACE'S APPROACH TO THIS PROBLEM WAS
THE SUBJECT OF A CURRENT INVESTIGATION.
WE WOULD APPRECIATE YOUR REVIEW OF THIS MATTER WITH A VIEW TOWARD
POSSIBLE FUTURE CORRECTIVE ACTION. PLEASE ADVISE US OF WHATEVER ACTION
YOU TAKE ON OUR RECOMMENDATION.
B-176399, JAN 9, 1973
BID PROTEST - WAGE DETERMINATION - FAILURE TO ACKNOWLEDGE AMENDMENT
DECISION DENYING THE PROTEST OF SERVICE RENTAL FOR INDUSTRY AGAINST
REJECTION OF ITS LOW BID UNDER AN IFB ISSUED BY GSA FOR THE RENTAL OF
CLEANING CLOTHS AND MOPS.
A PROVISION CONTAINING THE DEPARTMENT OF LABOR WAGE DETERMINATIONS
FOR LAUNDRY AND DRY CLEANING SERVICES UNDER THE SERVICE CONTRACT ACT IS
A MATERIAL REQUIREMENT OF THE IFB. THEREFORE, A BIDDER WHO FAILED TO
ACKNOWLEDGE THE IFB AMENDMENT CONTAINING SUCH A PROVISION,
NOTWITHSTANDING THE FACT THAT HE MIGHT ALREADY BE PAYING HIS EMPLOYEES
WAGES HIGHER THAN THOSE IN THE WAGE DETERMINATION, HAS MATERIALLY
DEVIATED FROM THE IFB REQUIREMENTS AND HIS BID SHOULD BE REJECTED AS
NONRESPONSIVE. B-157832, NOVEMBER 9, 1965.
TO COHEN, SHAPIRO, POLISHER, SHIEKMAN AND COHEN:
REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 5, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING THE REJECTION OF THE LOW BID OF SERVICE
RENTAL FOR INDUSTRY (SERVICE) FOR THE RENTAL OF CLEANING CLOTHS AND MOPS
UNDER GENERAL SERVICES ADMINISTRATION (GSA) INVITATION FOR BIDS (IFB)
NO. FSS-1G-721.5-2-73 FOR THE PERIOD JULY 1, 1972, TO JUNE 30, 1973.
THE BID WAS REJECTED BECAUSE IT FAILED TO ACKNOWLEDGE AN AMENDMENT TO
THE IFB WHICH INCLUDED THE DEPARTMENT OF LABOR WAGE DETERMINATIONS FOR
LAUNDRY AND DRY CLEANING SERVICES UNDER THE SERVICE CONTRACT ACT NOT
THERETOFORE INCLUDED.
YOU HAVE INDICATED THAT SERVICE DID NOT ACKNOWLEDGE THE AMENDMENT
WITH THE BID BECAUSE IT DID NOT RECEIVE THE AMENDMENT PRIOR TO BID
OPENING. HOWEVER, OUR OFFICE HAS HELD THAT THE FAILURE TO FURNISH AN
AMENDMENT DOES NOT WARRANT THE ACCEPTANCE OF THE BID OR A MODIFICATION
THEREOF AFTER THE TIME FIXED FOR OPENING OF BIDS. 40 COMP. GEN. 126
(1960).
FURTHER, YOU HAVE CONTENDED THAT SERVICE IS LARGELY AN AUTOMATED
OPERATION AND ONLY ONE CATEGORY IN THE WAGE DETERMINATION WOULD APPLY TO
IT; THAT IT IS A UNION CONTRACTOR PAYING IN EXCESS OF THE RATE
PRESCRIBED IN THE AMENDMENT; AND THAT AT THE TIME IT BID IT WAS
PERFORMING THE PRIOR ANNUAL CONTRACT WHICH CONTAINED PRESCRIBED WAGE
RATES. IN YOUR ESTIMATION, CONSIDERING THE AMOUNT OF TIME THAT WOULD BE
UTILIZED BY THE EMPLOYEE ENGAGED IN THE JOB CATEGORY INVOLVED DURING THE
ONE-YEAR PERIOD OF THE CONTRACT, TOTAL WAGES OF NO MORE THAN $56 ON A
$40,000 CONTRACT ARE AT ISSUE. HOWEVER, IN A MEETING WITH
REPRESENTATIVES OF OUR OFFICE, YOU DID ACKNOWLEDGE THAT OTHER JOB
CATEGORIES NOT SPECIFICALLY NAMED IN THE WAGE DETERMINATION ARE INVOLVED
IN THE WORK. IN THAT CONNECTION, WE NOTE THAT THE SERVICE CONTRACT ACT
PROVISION IN THE IFB PROVIDES THAT "ANY CLASS OF SERVICE EMPLOYEE WHICH
IS NOT LISTED THEREIN (IN THE WAGE DETERMINATION), BUT WHICH IS TO BE
EMPLOYED UNDER THIS CONTRACT, SHALL BE CLASSIFIED BY THE CONTRACTOR SO
AS TO PROVIDE A REASONABLE RELATIONSHIP BETWEEN SUCH CLASSIFICATIONS AND
THOSE LISTED IN THE ATTACHMENT (THE WAGE DETERMINATION) ***." THEREFORE,
THE EFFECT OF THE WAGE DETERMINATION GOES BEYOND THE INDIVIDUAL JOB
CATEGORY THAT YOU CONTEND IS THE ONLY ONE THAT SPECIFICALLY APPLIES.
MOREOVER, IN B-174647, FEBRUARY 10, 1972, 51 COMP. GEN. ___, A
SITUATION SIMILAR TO THE IMMEDIATE ONE, EXCEPT THAT IT PERTAINED TO
DAVIS-BACON ACT WAGE RATES, OUR OFFICE QUOTED WITH APPROVAL FROM
B-157832, NOVEMBER 9, 1965, AS FOLLOWS:
"'SINCE THE WAGE RATES PAYABLE UNDER A CONTRACT DIRECTLY AFFECT THE
CONTRACT PRICE, THERE CAN BE NO QUESTION THAT THE IFB PROVISION
REQUIRING THE PAYMENT OF MINIMUM WAGES TO BE PRESCRIBED BY THE SECRETARY
OF LABOR WAS A MATERIAL REQUIREMENT OF THE IFB AS AMENDED. AS STATED
PREVIOUSLY, THE REQUIREMENTS OF THE DAVIS-BACON ACT WERE MET WHEN THE
AMENDMENT FURNISHING THE MINIMUM WAGE SCHEDULE WAS ISSUED, THE PURPOSE
OF THE ACT BEING TO MAKE DEFINITE AND CERTAIN AT THE TIME OF THE
CONTRACT AWARD THE CONTRACT PRICE AND THE MINIMUM WAGES TO BE PAID
THEREUNDER. 17 COMP. GEN. 471, 473. IN SUCH CIRCUMSTANCES, IT IS OUR
VIEW THAT A BIDDER WHO FAILED TO INDICATE BY ACKNOWLEDGMENT OF THE
AMENDMENT OR OTHERWISE THAT HE HAD CONSIDERED THE WAGE SCHEDULE COULD
NOT, WITHOUT HIS CONSENT, BE REQUIRED TO PAY WAGE RATES WHICH WERE
PRESCRIBED THEREIN BUT WHICH WERE NOT SPECIFIED IN THE ORIGINAL IFB,
NOTWITHSTANDING THAT HE MIGHT ALREADY BE PAYING THE SAME OR HIGHER WAGE
RATES TO HIS EMPLOYEES UNDER AGREEMENTS WITH LABOR UNIONS OR OTHER
ARRANGEMENTS. ACCORDINGLY, IN OUR OPINION, THE DEVIATION WAS MATERIAL
AND NOT SUBJECT TO WAIVER UNDER THE PROCUREMENT REGULATION. B-138242,
JANUARY 2, 1959. FURTHERMORE, TO AFFORD YOU AN OPPORTUNITY AFTER BID
OPENING TO BECOME ELIGIBLE FOR AWARD BY AGREEING TO ABIDE BY THE WAGE
SCHEDULE WOULD BE UNFAIR TO THE OTHER BIDDERS WHOSE BIDS CONFORMED TO
THE REQUIREMENTS OF THE AMENDED IFB AND WOULD BE CONTRARY TO THE PURPOSE
OF THE PUBLIC PROCUREMENT STATUTES. B-149315, AUGUST 28, 1962;
B-146354, NOVEMBER 27, 1961.'"
SEE ALSO B-175752, JUNE 7, 1972.
YOU HAVE ALSO QUESTIONED THAT THERE WAS A PROPER COMPETITION BECAUSE
THE MINIMUM WAGE RATES PROVIDED BY THE DEPARTMENT OF LABOR WERE
DIFFERENT FOR NEW YORK THAN THEY WERE FOR PENNSYLVANIA. HOWEVER, IN
THAT REGARD WE OBSERVE THAT THE SERVICE CONTRACT ACT PROVIDES FOR A WAGE
RATE DETERMINATION BASED UPON "PREVAILING RATES *** IN THE LOCALITY." 41
U.S.C. 351(A)(1).
INASMUCH AS OUR OFFICE IS OF THE VIEW THAT THE BID OF SERVICE
PROPERLY WAS FOR REJECTION AS NONRESPONSIVE, THE FAILURE TO PROVIDE IT
TIMELY NOTICE OF THE REJECTION DOES NOT APPEAR TO HAVE ACTED TO THE
PREJUDICE OF THE BIDDER AND THE COMPLAINT IN THAT REGARD IS NOT
MATERIAL.
ACCORDINGLY, IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.
B-176614, JAN 9, 1973
MILITARY PERSONNEL - OVERSEAS ASSIGNMENT - DEPENDENT TRAVEL -
DISLOCATION ALLOWANCE - FIRST PERMANENT STATION
DECISION SUSTAINING THE DISALLOWANCE OF THE CLAIM OF DAVID H.
DRACHLER FOR REIMBURSEMENT OF THE COST OF TRANSPORTATION FOR HIS WIFE
FROM MCGUIRE AFB, N.J., TO RHEIN MAIN AIR BASE, GERMANY, AND FOR A
DISLOCATION ALLOWANCE.
WHERE THE TRAVEL OF A DEPENDENT TO AN OVERSEAS DUTY STATION IS NOT
AUTHORIZED, THE EXPENSES FOR SUCH TRAVEL MAY NOT BE REIMBURSED. ALSO, A
STATION TO WHICH A MEMBER IS ASSIGNED FOR THE PURPOSE OF FURTHER
ASSIGNMENT TO AN OVERSEAS STATION IS NOT A PERMANENT DUTY STATION.
ACCORDINGLY, NO DISLOCATION ALLOWANCE MAY BE PAID ON THE TRANSFER FROM
THIS STATION TO THE OVERSEAS STATION SINCE THE LATTER IS THE MEMBER'S
FIRST PERMANENT DUTY STATION. 37 U.S.C. 407(C).
TO MR. DAVID H. DRACHLER:
THIS IS IN REFERENCE TO YOUR REQUEST, DATED JUNE 19, 1972, FOR A
REVIEW OF OUR TRANSPORTATION AND CLAIMS DIVISION SETTLEMENT OF MARCH 16,
1972, WHICH DISALLOWED YOUR CLAIM FOR REIMBURSEMENT OF THE COST OF
TRANSPORTATION FOR YOUR WIFE FROM MCGUIRE AIR FORCE BASE, NEW JERSEY TO
RHEIN MAIN AIR BASE, GERMANY, IN SEPTEMBER 1970. ALSO, WE HAVE RECEIVED
YOUR LETTER OF OCTOBER 31, 1972.
BY LETTER ORDERS NO. A-05-790, DATED MAY 18, 1970, YOU WERE ORDERED
TO ACTIVE DUTY FROM ANN ARBOR, MICHIGAN, FOR A PERIOD OF TWO YEARS,
EFFECTIVE JULY 20, 1970. YOU WERE ASSIGNED TO USARV TRANSIENT
DETACHMENT (P5-WOBRAA), APO SAN FRANCISCO 96384, FOR FURTHER ASSIGNMENT,
WITH TEMPORARY DUTY OF APPROXIMATELY FIVE WEEKS EN ROUTE AT BROOKE ARMY
MEDICAL CENTER, FORT SAM HOUSTON, TEXAS. HOWEVER, ON AUGUST 24, 1970,
YOUR NAME WAS PLACED ON A LIST OF THOSE WHO WERE TO MOVE WITH 3D
BATTALION, 61ST ARTILLERY, LOCATED AT FORT BLISS, TO USAREUR. A
PERMANENT CHANGE OF STATION FROM FORT BLISS TO USAREUR HAD BEEN DIRECTED
FOR THE 3D BATTALION BY LETTER ORDERS NO. 6-10, DATED JUNE 8, 1970.
BY LETTER ORDERS NO. 316, DATED AUGUST 25, 1970, YOUR ORDERS OF MAY
18 WERE AMENDED TO ASSIGN YOU TO THE 3D BATTALION, 61ST ARTILLERY, AND A
FIRST INDORSEMENT ON THIS AMENDING ORDER, DATED OCTOBER 28, 1970,
PROVIDED THAT CONCURRENT TRAVEL OF YOUR DEPENDENTS WAS NOT AUTHORIZED
OVERSEAS, BUT THAT FAMILY SEPARATION ALLOWANCE, SHIPMENT OF HOUSEHOLD
GOODS, AND MOVEMENT OF YOUR DEPENDENTS TO A DESIGNATED PLACE WERE
AUTHORIZED.
IN THE SETTLEMENT OF MARCH 16, 1972, IT WAS SAID THAT IN ORDER TO
ESTABLISH ENTITLEMENT TO THE TRANSPORTATION OF YOUR DEPENDENT WIFE AT
GOVERNMENT EXPENSE, USAREUR HAD TO BE CONSIDERED YOUR FIRST PERMANENT
DUTY STATION AND SINCE HER TRANSPORTATION TO THE OVERSEAS STATION WAS
NOT AUTHORIZED, YOU WERE ENTITLED TO HER TRANSPORTATION AT GOVERNMENT
EXPENSE FROM ANN ARBOR, MICHIGAN, THE PLACE WHERE SHE WAS LOCATED WHEN
YOU RECEIVED THE ORDER ASSIGNING YOU TO USAREUR, TO KENNEDY AIRPORT, NEW
YORK, HER ACTUAL POINT OF DEPARTURE FOR GERMANY.
SINCE THE ENTITLEMENT FOR THE COST OF TRAVELING THIS DISTANCE WAS
$67.32 LESS THAN THE AMOUNT YOU HAD ALREADY RECEIVED, THIS DIFFERENCE
WAS REPORTED AS AN OVERPAYMENT TO THE FINANCE CENTER, UNITED STATES
ARMY, INDIANAPOLIS, INDIANA. THE CENTER WAS ADVISED TO TAKE APPROPRIATE
STEPS TO RECOVER SUCH OVERPAYMENT FROM YOU AND WAS ALSO ADVISED THAT ANY
PAYMENT THAT MAY HAVE BEEN MADE TO YOU FOR THE TRAVEL OF YOUR DEPENDENT
WIFE FROM ANN ARBOR TO SAN ANTONIO APPEARED TO HAVE BEEN ERRONEOUS AND
SHOULD LIKEWISE BE COLLECTED.
CONSEQUENTLY, BY A PAY ADJUSTMENT AUTHORIZATION, DATED JUNE 12, 1972,
TWO ADJUSTMENTS REGARDING YOUR MILITARY PAY WERE MADE, THE FIRST FOR
$67.32 ON ACCOUNT OF ERRONEOUS OVERPAYMENT OF DEPENDENT MILEAGE AND THE
SECOND FOR $104.04 REPRESENTING ERRONEOUS PAYMENT OF A DISLOCATION
ALLOWANCE FOR YOUR FIRST PERMANENT CHANGE OF STATION.
YOUR CLAIM FOR THE COST THE GOVERNMENT WOULD HAVE INCURRED TO FURNISH
TRANSPORTATION FOR YOUR WIFE FROM MCGUIRE AIR FORCE BASE, NEW JERSEY, TO
RHEIN MAIN AIR FORCE BASE, GERMANY, WAS DISALLOWED BY THE SETTLEMENT FOR
THE REASON THAT YOUR ORDERS SPECIFICALLY PROVIDED THAT CONCURRENT TRAVEL
OF DEPENDENTS TO YOUR OVERSEAS STATION WAS NOT AUTHORIZED. IT WAS
FURTHER STATED THAT IN SUCH CIRCUMSTANCES YOUR WIFE'S TRAVEL WAS LIMITED
TO CERTAIN PLACES INCLUDING THE POINT OF ACTUAL DEPARTURE OF DEPENDENTS
FROM THE UNITED STATES IN CONJUNCTION WITH TRAVEL TO A PLACE OUTSIDE THE
UNITED STATES DESIGNATED BY THE MEMBER. THAT IS THE BASIS ON WHICH
REIMBURSEMENT FOR YOUR WIFE'S TRAVEL WAS AUTHORIZED FROM ANN ARBOR TO
NEW YORK.
YOUR WIFE'S FURTHER TRAVEL TO YOUR OVERSEAS STATION WAS NOT
AUTHORIZED AT GOVERNMENT EXPENSE IN THE ABSENCE OF APPROVAL BY THE
OVERSEAS COMMANDER. IT APPEARS FROM YOUR CLAIM STATEMENT OF JUNE 2,
1971, THAT SUCH APPROVAL WAS NOT GIVEN, THAT A PORT CALL FOR YOUR WIFE'S
TRAVEL WAS NOT ISSUED AND THAT YOU DECIDED TO BRING YOUR WIFE TO GERMANY
AT YOUR OWN EXPENSE. IN SUCH CIRCUMSTANCES, THE DISALLOWANCE OF YOUR
CLAIM WAS PROPER.
IN YOUR LETTER OF JUNE 19, 1972, YOU STATE THAT THE SETTLEMENT OF
MARCH 16 ASSUMED THAT USAREUR WAS YOUR FIRST DUTY STATION. YOU CONTEND
THAT ACCORDING TO LETTER ORDER NUMBER 316, DATED 25 AUGUST 1970, FORT
BLISS, EL PASO, TEXAS, WAS YOUR FIRST DUTY STATION. YOU SAY THAT YOU
REPORTED TO EL PASO, TEXAS ON AUGUST 27, 1970, AND WORKED IN YOUR MOS
WITH YOUR UNIT, 3D BATTALION, 61ST ARTILLERY, UNTIL THE UNIT MOVE WHICH
BROUGHT YOU TO USAREUR ON SEPTEMBER 2, 1970. YOU MAINTAIN THEREFORE,
THAT USAREUR WAS YOUR SECOND PCS AND THAT YOU ARE ENTITLED TO A
DISLOCATION ALLOWANCE AND CONTEND THAT THE ACTION TAKEN BY YOUR LOCAL
FINANCE OFFICER TO COLLECT THE OVERPAYMENT OF THE DISLOCATION ALLOWANCE
IS ERRONEOUS AND THAT YOU SHOULD BE REFUNDED THAT AMOUNT.
THE BASIC STATUTORY PROVISION AUTHORIZING THE DISLOCATION ALLOWANCE
APPEARS AT 37 U.S.C. 407 WHICH PROVIDES IN ITS PERTINENT PART AS
FOLLOWS:
"(A) EXCEPT AS PROVIDED BY SUBSECTIONS (B) AND (C) OF THIS SECTION,
UNDER REGULATIONS PRESCRIBED BY THE SECRETARY CONCERNED, A MEMBER OF A
UNIFORMED SERVICE -
"(1) WHOSE DEPENDENTS MAKE AN AUTHORIZED MOVE IN CONNECTION WITH HIS
CHANGE OF PERMANENT STATION;
*** IS ENTITLED TO A DISLOCATION ALLOWANCE
"(C) A MEMBER IS NOT ENTITLED TO PAYMENT OF A DISLOCATION ALLOWANCE
WHEN ORDERED FROM HIS HOME TO HIS FIRST DUTY STATION OR FROM HIS LAST
DUTY STATION TO HIS HOME."
THIS PROVISION HAS BEEN IMPLEMENTED BY CHAPTER 9, JOINT TRAVEL
REGULATIONS. PARAGRAPH M9003-1, JTR, PROVIDES THAT THE DISLOCATION
ALLOWANCE IS PAYABLE TO A MEMBER WITH DEPENDENTS WHENEVER DEPENDENTS
RELOCATE THEIR HOUSEHOLD IN CONNECTION WITH A PERMANENT CHANGE OF
STATION. HOWEVER, PARAGRAPH 9004-1, JTR, PROVIDES THAT THE DISLOCATION
ALLOWANCE "WILL NOT BE PAYABLE IN CONNECTION WITH PERMANENT
CHANGE-OF-STATION TRAVEL PERFORMED:
1. FROM HOME OR FROM PLACE FROM WHICH ORDERED TO ACTIVE DUTY TO
FIRST PERMANENT DUTY STATION UPON
*** CALL TO ACTIVE DUTY ***."
SEE DECISION B-169507, MAY 27, 1970, COPY ENCLOSED.
THE TERM "PERMANENT STATION" IS DEFINED IN PARAGRAPH M1150-10A, JTR,
TO MEAN "THE POST OF DUTY OR OFFICIAL STATION *** TO WHICH A MEMBER IS
ASSIGNED OR ATTACHED FOR DUTY OTHER THAN 'TEMPORARY DUTY' ***." THE TERM
"TEMPORARY DUTY" IS DEFINED IN PARAGRAPH M3003-2A, TO MEAN "DUTY AT ONE
OR MORE LOCATIONS, OTHER THAN THE PERMANENT STATION, AT WHICH A MEMBER
PERFORMS TEMPORARY DUTY UNDER ORDERS WHICH PROVIDE FOR FURTHER
ASSIGNMENT, OR PENDING FURTHER ASSIGNMENT, TO A NEW PERMANENT STATION
***."
IN DETERMINING YOUR FIRST PERMANENT DUTY STATION, THE FOLLOWING
LANGUAGE FROM 36 COMP. GEN. 757, 758 (1957) WILL ALSO PROVE HELPFUL:
"WHETHER AN ASSIGNMENT TO A PARTICULAR DUTY STATION IS TEMPORARY OR
PERMANENT IS A QUESTION OF FACT AND IS FOR DETERMINATION FROM A
CONSIDERATION OF THE ORDERS UNDER WHICH THE ASSIGNMENT IS MADE AND OF
THE CHARACTER OF THE ASSIGNMENT ITSELF, PARTICULARLY WITH REFERENCE TO
SUCH ITEMS AS ITS DURATION AND THE NATURE OF THE DUTY. BY DEFINITION,
THE WORD 'TEMPORARY' IS A TERM OF LIMITATION WHICH INDICATES A PERIOD OF
SHORT DURATION AND TRANSITORY NATURE."
LETTER ORDERS NO. 6-10, DATED JUNE 8, 1970, DIRECTED A PERMANENT
CHANGE OF STATION FOR THE 3D BATTALION, 61ST ARTILLERY. HOWEVER, AT
THIS TIME YOU WERE PERFORMING TEMPORARY DUTY UNDER LETTER ORDERS NO.
A-05-790, DATED MAY 18, 1970, WHICH ASSIGNED YOU TO THE USARV TRANSIENT
DETACHMENT, APO SAN FRANCISCO 96384 FOR FURTHER ASSIGNMENT, AFTER YOUR
COMPLETION OF TEMPORARY DUTY AT FORT SAM HOUSTON, TEXAS. YOU WERE NOT
AFFECTED BY THE ORDERS DIRECTING THE UNIT MOVE UNTIL AUGUST 25, 1970,
WHEN LETTER ORDERS NO. 316 ASSIGNED YOU TO THE 3D BATTALION, 61ST
ARTILLERY, FORT BLISS, TEXAS.
THOSE ORDERS SPECIFICALLY PROVIDED THAT PARAGRAPH 10-3M OF ARMY
REGULATION 614-30 WOULD APPLY. THAT PARAGRAPH, IN EFFECT AT THE TIME
HERE INVOLVED, PROVIDED THAT ORDERS ASSIGNING PERSONNEL TO UNITS THAT
ARE SCHEDULED FOR DEPLOYMENT TO LONG TOUR OVERSEAS AREAS WITHIN 90 DAYS
OF THE MEMBER'S REPORTING DATE AT THE NEW STATION WOULD CONTAIN A
RESTRICTIVE STATEMENT THAT THE MEMBER IS ASSIGNED TO THE NEW UNIT OR
STATION "FOR FURTHER MOVEMENT TO AN AREA OVERSEAS." THUS, BY REFERENCE
THAT PROVISION BECAME A PART OF YOUR ORDERS OF AUGUST 25, 1970, AND WAS
IN EFFECT WHEN YOU REPORTED AT FORT BLISS. CONSEQUENTLY, YOUR TRANSFER
TO FORT BLISS WAS NOT FOR PERMANENT DUTY BUT WAS FOR FURTHER TRANSFER
OVERSEAS. SUBSEQUENTLY, THE ORDERS OF AUGUST 25, 1970, WERE AMENDED BY
A FIRST INDORSEMENT, DATED OCTOBER 28, 1970, ASSIGNING YOU TO 3D
BATTALION, 61ST ARTILLERY FOR FURTHER MOVEMENT TO USAREUR AS INTENDED BY
THE BASIC ORDERS.
IT IS EVIDENT, THEREFORE, THAT FORT BLISS, TEXAS WAS NOT YOUR FIRST
PERMANENT DUTY STATION, SINCE YOU WERE ASSIGNED TO 3D BATTALION, 61ST
ARTILLERY THERE FOR THE PURPOSE OF FURTHER MOVEMENT TO USAREUR. THE
DUTY YOU PERFORMED AT FORT BLISS WAS OF SHORT DURATION AND WAS PERFORMED
UNDER ORDERS WHICH PROVIDED FOR FURTHER ASSIGNMENT. THIS CLEARLY COMES
WITHIN THE DEFINITION OF "TEMPORARY DUTY."
YOUR FIRST PERMANENT DUTY STATION UPON YOUR CALL TO ACTIVE DUTY WAS
USAREUR. THIS BEING THE CASE, YOU ARE NOT ENTITLED TO A DISLOCATION
ALLOWANCE BECAUSE OF THE PROHIBITORY LANGUAGE IN 37 U.S.C. SEC 407(C)
AND IN PARAGRAPH M9004-1-1, JTR. CONSEQUENTLY, THE SETTLEMENT OF OUR
TRANSPORTATION AND CLAIMS DIVISION IS SUSTAINED.
B-177081(1), JAN 9, 1973
BID PROTEST - AFFIRMATIVE ACTION PROGRAM - RESPONSIBILITY OR
RESPONSIVENESS - PROTEST TIMING - AWARD NOTIFICATION
DECISION DENYING THE PROTEST OF JESS HOWARD ELECTRIC COMPANY AGAINST
REJECTION OF ITS BID UNDER AN IFB ISSUED BY THE ARMY CORPS OF ENGINEERS,
BALTIMORE, MD., FOR THE INSTALLATION OF EMERGENCY GENERATORS AT GENTILE
AFB, OHIO.
INFORMATION CONCERNING A BIDDER'S PREVIOUS "EQUAL OPPORTUNITY" AND
"AFFIRMATIVE ACTION PROGRAM" EFFORTS REQUIRED BY ASPR 12-806(B)(1)(B)
AND (2) RELATES TO THE BIDDER'S RESPONSIBILITY AND MAY BE FURNISHED UP
TO THE TIME OF AWARD. SEE B-174307, APRIL 10, 1970. HOWEVER,
INFORMATION CONCERNING THE BIDDER'S AGREEMENT TO PURSUE MINORITY HIRING
GOALS DURING CONTRACT PERFORMANCE RELATES TO THE BID'S RESPONSIVENESS
AND FAILURE TO SUPPLY SUCH INFORMATION MAY NOT BE WAIVED UNDER ASPR
2-405(VI). SEE B-176171, AUGUST 29, 1972. MOREOVER, PROTESTS AGAINST
ALLEGED IMPROPRIETIES IN THE SPECIFICATIONS WHICH ARE APPARENT PRIOR TO
BID OPENING MUST BE FILED PRIOR TO THAT TIME TO BE CONSIDERED BY GAO. 4
CFR 20.2. ALSO, A BIDDER NEED NOT BE ADVISED PRIOR TO SIGNING OF THE
CONTRACT THAT ITS BID HAS BEEN REJECTED.
TO JESS HOWARD ELECTRIC COMPANY:
WE REFER TO YOUR LETTER OF SEPTEMBER 18, 1972, AND SUBSEQUENT
CORRESPONDENCE, CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS (IFB)
NO. DACA31-72-B-0102, ISSUED BY THE ARMY CORPS OF ENGINEERS, BALTIMORE,
MARYLAND, ON MAY 25, 1972, FOR THE INSTALLATION OF TWO EMERGENCY
GENERATORS AT GENTILE AIR FORCE BASE IN MONTGOMERY COUNTY, NEAR DAYTON,
OHIO.
PARAGRAPH 25, DAYTON PLAN, OF THE SUPPLEMENTAL INSTRUCTIONS TO
BIDDERS OF THE IFB PROVIDED THAT THE REQUIREMENTS OF THE DAYTON PLAN (AN
AFFIRMATIVE ACTION PLAN FOR MINORITY MANPOWER UTILIZATION IN THE
CONSTRUCTION INDUSTRY IN GREENE, MIAMI, MONTGOMERY AND PREBLE COUNTIES,
OHIO) APPLIED TO THE PROJECT; THAT THE BIDDER SHOULD THEREFORE SUBMIT
WITH HIS BID, HIS PLAN TO COMPLY WITH THOSE REQUIREMENTS; AND THAT
FAILURE TO SUBMIT A PLAN WOULD RENDER HIS BID NONRESPONSIVE.
THE FIRST PART OF PARAGRAPH 26 OF THE SUPPLEMENTAL INSTRUCTIONS ALSO
REQUIRED BIDDERS TO SUBMIT, WITHIN 5 DAYS AFTER A REQUEST THEREFOR BY
THE CONTRACTING OFFICER, (A) ADDITIONAL INFORMATION ABOUT THE
CONSTRUCTION TRADES THE BIDDER INTENDED TO USE ON THE PROJECT; (B) A
LIST OF THE LABOR ORGANIZATIONS WITH WHICH THE BIDDER HAS COLLECTIVE
BARGAINING AGREEMENTS AND WHICH ARE SIGNATORIES TO THE PLAN WITH RESPECT
TO TRADES FOR WHICH SPECIFIC COMMITMENTS TO GOALS OF MINORITY MANPOWER
UTILIZATION ARE SET FORTH IN THE PLAN; (C) A LIST OF LABOR
ORGANIZATIONS WITH WHICH HE HAS COLLECTIVE BARGAINING AGREEMENTS AND
WHICH ARE NOT SIGNATORIES TO THE PLAN OR WHICH ARE SIGNATORIES THERETO
BUT WITH RESPECT TO TRADES FOR WHICH NO SPECIFIC COMMITMENTS TO GOALS OF
MINORITY MANPOWER UTILIZATION ARE SET FORTH IN THE PLAN; AND (D) A LIST
OF ALL CURRENT CONSTRUCTION WORK OR CONTRACTS TO WHICH THE BIDDER IS A
PARTY IN THE COVERED AREA. PARAGRAPH 26 THEN PROVIDED THAT A BIDDER
SHOULD EVIDENCE HIS INTENTION TO COMPLY WITH THE REQUIREMENTS FOR
MINORITY HIRING IN HIS BID EITHER BY CERTIFYING THAT HE WAS A SIGNATORY
TO THE PLAN, OR BY SUBMITTING PERCENTAGE GOALS FOR MINORITY MANPOWER
UTILIZATION WITHIN THE FOLLOWING PRESCRIBED RANGES:
"ALL TRADES
UNTIL 12/31/72 - 5.8%-7%
FROM 1/1/73 UNTIL 12/31/73 - 7 %-8.2%
FROM 1/1/74 UNTIL 12/31/74 - 8.2%-9.4%"
TO THIS END, THE IFB CONTAINED AN "AFFIRMATIVE ACTION PLAN" FORM.
THE FORM IS HEADED WITH THE FOLLOWING INSTRUCTIONS:
"THE BIDDER MUST SUBMIT THIS FORM WITH HIS BID, AND INDICATE HEREON
THAT EITHER (A) OR (B) BELOW IS APPLICABLE, THE BIDDER MUST ALSO INSERT
HIS MINORITY MANPOWER UTILIZATION GOALS."
BY CHECKING BLOCK (A), THE BIDDER COULD CERTIFY THAT HE WAS SIGNATORY
TO THE DAYTON PLAN AND THAT HE WOULD COMPLY WITH THE REQUIREMENTS OF THE
CONTRACT CLAUSE ENTITLED "LOCAL AFFIRMATIVE ACTION PLAN" DURING
PERFORMANCE OF THE CONTRACT. BY CHECKING BLOCK (B), A BIDDER COULD
CHOOSE TO SUBMIT HIS OWN MINORITY MANPOWER UTILIZATION GOALS, IN WHICH
CASE HE WAS REQUIRED TO INSERT THE PERCENTAGES OF HIS INTENDED MINORITY
MANPOWER UTILIZATION IN THE SPACES PROVIDED ON THE FORM. THE IFB
FURTHER PROVIDED THAT IF THE BIDDER'S PERCENTAGE GOALS WERE BELOW THE
PRESCRIBED RANGES OF MINORITY MANPOWER UTILIZATION, THE BID WOULD BE
CONSIDERED NONRESPONSIVE AND WOULD BE REJECTED.
WHEN BIDS WERE OPENED ON JUNE 22, 1972, IT WAS NOTED THAT YOU HAD
SUBMITTED THE LOWEST OFFER FOR THE REQUIREMENT, AND THAT ABCO
CONSTRUCTION CORPORATION HAD SUBMITTED THE SECOND LOWEST BID. YOU
CHECKED BLOCK (B) ON THE AFFIRMATIVE ACTION PLAN FORM OF YOUR BID AND
ATTACHED A POLICY STATEMENT DATED MAY 24, 1972, CONCERNING YOUR MINORITY
HIRING PRACTICES. YOU DID NOT, HOWEVER, SET FORTH YOUR MANPOWER
UTILIZATION GOALS FOR THE PROJECT. IN VIEW THEREOF, THE CONTRACTING
OFFICER REPORTS THAT HE CONSIDERED YOUR BID NONRESPONSIVE TO THE
REQUIREMENT FOR A STATEMENT OF PERCENTAGES FOR MINORITY UTILIZATION
GOALS FROM BIDDERS WHO CHECKED BLOCK (B) AND THAT HE MADE AN AWARD ON
JUNE 30, 1972, TO ABCO, WHO CERTIFIED, UNDER BLOCK (A) OF THE
AFFIRMATIVE ACTION PLAN FORM OF ITS BID, THAT IT WAS SIGNATORY TO THE
DAYTON PLAN.
ON JULY 5, 1972, YOU PROTESTED THE AWARD TO ABCO AND SENT ADDITIONAL
INFORMATION TO THE CONTRACTING OFFICER CONCERNING THE MINORITY HIRING
PRACTICES OF YOUR CONCERN, INCLUDING A CHART WHICH GAVE A BREAKDOWN OF
THE NUMBER OF MINORITY EMPLOYEES OF YOUR FIRM. THE RECORD SHOWS THAT
THE SUBMISSION OF THIS DATA DID NOT CHANGE THE DEPARTMENT'S INITIAL
DETERMINATION THAT YOUR BID WAS NONRESPONSIVE, AND THAT ON SEPTEMBER 6,
1972, THE GENERAL COUNSEL, CORPS OF ENGINEERS, DENIED YOUR PROTEST.
YOU MAINTAIN THAT THE FAILURE OF YOUR CONCERN TO SUBMIT MINORITY
HIRING GOALS WITH YOUR BID SHOULD HAVE BEEN WAIVED AS A MINOR
IRREGULARITY UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR)
2-405(VI), 12-806(B)(1)(B) AND 12-806(B)(2), WHICH ARE QUOTED AS
FOLLOWS:
"2.405 MINOR INFORMALITIES OR IRREGULARITIES IN BIDS.
A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER
OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF
THE INVITATION FOR BIDS, HAVING NO EFFECT OR MERELY A TRIVIAL OR
NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, OR DELIVERY OF THE
SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED, AND THE
CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF,
OR BE OTHERWISE PREJUDICIAL TO, BIDDERS. THE CONTRACTING OFFICER SHALL
EITHER GIVE TO THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY
RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID, OR, WAIVE
ANY SUCH DEFICIENCY WHERE IT IS TO THE ADVANTAGE OF THE GOVERNMENT.
EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:
"(VI) FAILURE TO EXECUTE THE CERTIFICATIONS WITH RESPECT TO EQUAL
OPPORTUNITY AND AFFIRMATIVE ACTION PROGRAM, AS SET FORTH IN
12-806(B)(1)(B) AND (2).
"12-806(B)(1)(B) EQUAL OPPORTUNITY (1971 APR)
HE ( ) HAS, ( ) HAS NOT, PARTICIPATED IN A PREVIOUS CONTRACT OR
SUBCONTRACT SUBJECT EITHER TO THE EQUAL OPPORTUNITY CLAUSE HEREIN OR THE
CLAUSE ORIGINALLY CONTAINED IN SECTION 301 OF EXECUTIVE ORDER NO. 10925,
OR THE CLAUSE CONTAINED IN SECTION 201 OF EXECUTIVE ORDER NO. 11114;
THAT HE ( ) HAS, ( ) HAS NOT, FILED ALL REQUIRED COMPLIANCE REPORTS;
AND THAT REPRESENTATIONS INDICATING SUBMISSION OF REQUIRED COMPLIANCE
REPORTS, SIGNED BY PROPOSED SUBCONTRACTORS, WILL BE OBTAINED PRIOR TO
SUBCONTRACT AWARDS. ***
"12-806(B)(2)
WHEN THE CONTRACT IS FOR OTHER THAN CONSTRUCTION AND IS NOT EXEMPT
FROM THE EQUAL OPPORTUNITY CLAUSE, THE FOLLOWING:
AFFIRMATIVE ACTION PROGRAM (1970 AUG)
*** THE OFFEROR CERTIFIES THAT HE ( ) HAS, ( ) HAS NOT, DEVELOPED AND
MAINTAINED AT EACH OF HIS ESTABLISHMENTS EQUAL OPPORTUNITY AFFIRMATIVE
ACTION PROGRAMS, PURSUANT TO 41 CFR 60.2."
IN THIS REGARD, WE HAVE HELD THAT THE INFORMATION WHICH IS REQUIRED
IN THE CERTIFICATIONS SET FORTH IN ASPR 12-806(B)(1)(B) AND (2),
CONCERNING A PROSPECTIVE BIDDER'S PREVIOUS "EQUAL OPPORTUNITY" AND
"AFFIRMATIVE ACTION PROGRAM" EFFORTS, RELATES TO THE BIDDER'S
QUALIFICATIONS AS A RESPONSIBLE PROSPECTIVE CONTRACTOR AND MAY THEREFORE
BE FURNISHED UP TO THE TIME OF AWARD. SEE B-174307, APRIL 10, 1972;
B-174932, MARCH 3, 1972. THIS HOLDING IS CLEARLY CONSISTENT WITH THE
STATEMENT IN ASPR 2-405(VI) THAT THE FAILURE TO EXECUTE THE
CERTIFICATIONS SHOULD BE REGARDED AS A MINOR INFORMALITY.
BY CONTRAST, THE INFORMATION REQUIRED OF A BIDDER WHO HAS CHECKED
BLOCK (B) IN THE AFFIRMATIVE ACTION PLAN FORM OF THE SUBJECT IFB RELATES
TO THE BIDDER'S AGREEMENT TO PURSUE MINORITY HIRING GOALS DURING
CONTRACT PERFORMANCE. IT IS THEREFORE OUR OPINION THAT SUCH AGREEMENT
WOULD BECOME A MATERIAL REQUIREMENT OF THE CONTRACT AGAINST WHICH THE
CONTRACTOR'S PERFORMANCE WOULD BE JUDGED. IN VIEW THEREOF, WE BELIEVE
THAT THE SUBMISSION OF MINORITY HIRING GOALS CONFORMING TO THE
PRESCRIBED PERCENTAGES BY SUCH A BIDDER MUST BE CONSIDERED A MATTER OF
BID RESPONSIVENESS WHICH IS DETERMINED AT BID OPENING AND, THEREFORE,
THE BIDDER'S FAILURE TO SUBMIT ACCEPTABLE MINORITY HIRING GOALS WITH HIS
BID CANNOT BE REGARDED AS A MINOR IRREGULARITY UNDER ASPR 2-405(VI), AS
YOU CONTEND. SEE B-176171, AUGUST 29, 1972; B-174307, FEBRUARY 8,
1972.
IN THIS CONNECTION, YOU ALSO MAINTAIN THAT THE FIRST PART OF
PARAGRAPH 26 OF THE IFB, OUTLINED ABOVE, CONCERNING THE RIGHT OF THE
CONTRACTING OFFICER TO REQUEST ADDITIONAL INFORMATION OF THE BIDDER,
SHOULD ALLOW YOU TO SUBMIT YOUR MINORITY HIRING GOALS FOR THE PROJECT
AFTER BID OPENING. WITH RESPECT TO YOUR ARGUMENT, WE NOTE THAT THE FOUR
CATEGORIES OF INFORMATION LISTED IN THE CITED PROVISION DO NOT INCLUDE
MINORITY HIRING GOALS AS INFORMATION WHICH COULD BE SUBSEQUENTLY
REQUESTED BY THE CONTRACTING OFFICER. WE THINK THE OMISSION (OF
MINORITY HIRING GOALS FROM SUCH CATEGORIES) WAS CLEARLY IN LINE WITH THE
INSTRUCTIONS ON THE AFFIRMATIVE ACTION PLAN FORM THAT A BIDDER MUST
SUBMIT THE FORM WITH HIS BID AND SHOW THEREON (WHEN BLOCK (B) IS
CHECKED) HIS MINORITY HIRING GOALS. IN ADDITION, BLOCK (B) SPECIFICALLY
STATES THAT THE BIDDER "HEREBY SUBMITS THE AMOUNTS SET FORTH BELOW" AS
HIS MINORITY MANPOWER UTILIZATION GOALS. IN VIEW THEREOF, WE CANNOT
CONCLUDE THAT PARAGRAPH 26 CAN BE REASONABLY CONSTRUED AS GRANTING SUCH
A BIDDER THE RIGHT TO SUBMIT MINORITY HIRING GOALS AFTER BID OPENING.
YOU ALSO ALLEGE THAT THE IFB WAS DEFECTIVE BECAUSE IT DID NOT SET
FORTH THE PROVISIONS OF THE "LOCAL AFFIRMATIVE ACTION PLAN" CLAUSE, NOR
INDICATE WHERE A COPY OF THE DAYTON PLAN COULD BE OBTAINED. THE RECORD
DOES NOT INDICATE THAT YOU MADE ANY INQUIRY OF THE ISSUING OFFICE IN
THIS RESPECT PRIOR TO SUBMITTING YOUR BID. IN ANY EVENT, SECTION 20.2
OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, AS SET FORTH IN
TITLE 4 OF THE CODE OF FEDERAL REGULATIONS, REQUIRES THAT PROTESTS
AGAINST ALLEGED IMPROPRIETIES IN AN INVITATION FOR BIDS WHICH ARE
APPARENT PRIOR TO BID OPENING MUST BE FILED PRIOR TO BID OPENING FOR
CONSIDERATION BY THIS OFFICE. SINCE THESE ALLEGED DEFECTS WERE APPARENT
AT THE TIME OF ISSUANCE OF THE IFB AND YOU DID NOT FILE YOUR PROTEST
UNTIL AFTER BID OPENING, THIS ASPECT OF YOUR PROTEST IS UNTIMELY AND MAY
NOT BE CONSIDERED.
YOU ALSO ARGUE THAT YOUR PRESENT EMPLOYMENT PRACTICES CONFORM TO THE
IFB'S REQUIREMENTS REGARDING MINORITY HIRING GOALS, AND THAT SUCH
CONFORMITY SHOULD ALSO EXCUSE YOUR FAILURE TO SUBMIT GOALS WITH YOUR
BID. AT THE OUTSET, WE NOTE THAT YOUR BID, WHILE CONTAINING A POLICY
STATEMENT ON YOUR EQUAL EMPLOYMENT PRACTICES, DOES NOT CONTAIN A
SPECIFIC COMMITMENT TO GOALS OF MINORITY HIRING WHICH COULD BE ENFORCED
AS A MATTER OF CONTRACTUAL OBLIGATION FOR THE SUBJECT PROJECT. IN VIEW
THEREOF, EVEN IF WE ASSUME THAT YOUR PRESENT EMPLOYMENT PRACTICES
CONFORM TO THE MINORITY HIRING REQUIREMENTS OF THE IFB, WE CANNOT
CONCLUDE THAT SUCH PRACTICES OBVIATED THE NEED FOR YOU TO SUBMIT
MINORITY HIRING GOALS AS A PART OF YOUR BID.
YOU ALSO MAINTAIN THAT YOU SHOULD HAVE BEEN ADVISED IN WRITING OF THE
CONTRACTING OFFICER'S DETERMINATION TO REJECT YOUR BID AT THE SAME TIME
THE LETTER OF AWARD WAS SENT TO ABCO, SO THAT YOU COULD HAVE PROTESTED
THE DETERMINATION PRIOR TO THE FORMAL SIGNING OF THE CONTRACT. WE DO
NOT FIND ANY MERIT IN THIS OBJECTION SINCE THE APPLICATION OF THE
PROTEST PROCEDURES PERTAINING TO THE PROTESTS FILED PRIOR TO AWARD, AS
DISTINGUISHED FROM THE PROCEDURES PERTAINING TO PROTESTS FILED AFTER
AWARD, IS NOT DEPENDENT UPON THE FORMAL SIGNING OF THE CONTRACT.
STANDARD FORM 21, ON WHICH THE BIDS WERE SUBMITTED, PROVIDES THAT UPON
WRITTEN ACCEPTANCE OF THE BID, "MAILED" OR OTHERWISE FURNISHED, THE
SUCCESSFUL BIDDER WILL EXECUTE THE CONTRACT FORMS. UNDER SUCH
CIRCUMSTANCES THE AWARD TO ABCO BECAME EFFECTIVE AT THE TIME THE AWARD
NOTICE WAS DEPOSITED IN THE MAIL (45 COMP. GEN. 700 (1966); 49 COMP.
GEN. 43 (1970)), AND THE POSTAWARD PROTEST PROCEDURES WERE APPLICABLE TO
ANY PROTESTS FILED AFTER THAT TIME.
FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST MUST BE DENIED.
B-177081(2), JAN 9, 1973
BID PROTEST - LOCAL AFFIRMATIVE ACTION PLAN - INFORMATION CONTAINED IN
THE IFB
CONCERNING THE PROTEST OF JESS HOWARD ELECTRIC COMPANY AGAINST
REJECTION OF ITS BID UNDER AN IFB ISSUED BY THE ARMY CORPS OF ENGINEERS,
BALTIMORE, MD.
ALTHOUGH THE PROTEST HAS BEEN DENIED, THE IFB DID NOT CONTAIN THE
"LOCAL AFFIRMATIVE ACTION PLAN" CLAUSE TO WHICH THE ATTENTION OF THE
BIDDERS WAS CALLED IN THE IFB AND DID NOT INDICATE WHERE A COPY OF THE
"DAYTON PLAN" FOR MINORITY HIRING COULD BE OBTAINED AS REQUIRED BY ASPR
1-1203.1. ACCORDINGLY, GAO RECOMMENDS SUCH INFORMATION BE CONTAINED IN
FUTURE PROCUREMENTS.
TO MR. SECRETARY:
ENCLOSED IS A COPY OF OUR DECISION OF TODAY, DENYING THE PROTEST OF
JESS HOWARD ELECTRIC COMPANY UNDER IFB NO. DACA31-72-B-0102, ISSUED BY
THE CORPS OF ENGINEERS, BALTIMORE, MARYLAND.
WHILE WE DENIED THE PROTEST, IT SHOULD BE NOTED THAT THE IFB DID NOT
CONTAIN THE "LOCAL AFFIRMATIVE ACTION PLAN" CLAUSE TO WHICH THE
ATTENTION OF BIDDERS WAS CALLED IN THE INVITATION. ALSO, THE IFB DID
NOT INDICATE WHERE A COPY OF THE "DAYTON PLAN" FOR MINORITY HIRING COULD
BE OBTAINED, AS SEEMS TO BE REQUIRED BY ASPR 1-1203.1. ALTHOUGH WE
CONCLUDED THAT THE PROTEST AGAINST THE OMISSION OF THIS INFORMATION WAS
UNTIMELY, WE RECOMMEND THAT ACTION BE TAKEN TO MAKE SURE THAT
INFORMATION OF THIS NATURE IS CONTAINED IN FUTURE PROCUREMENTS.
THE PROTEST WAS THE SUBJECT OF A REPORT (DAEN-GCN) DATED OCTOBER 30,
1972, FROM THE GENERAL COUNSEL, CORPS OF ENGINEERS. THE FILE FORWARDED
WITH THAT REPORT IS RETURNED.
B-177293, JAN 9, 1973
MILITARY PERSONNEL - MARINE CORPS - DISLOCATION AND TRAVEL ALLOWANCES -
HOSPITALIZATION
DECISION ALLOWING IN PART THE CLAIM OF PETE F. JIMENEZ FOR
DISLOCATION AND TRAVEL ALLOWANCES FOR HIMSELF AND HIS DEPENDENTS
INCIDENT TO HIS HOSPITALIZATION AT THE U.S. NAVAL HOSPITAL, SAN DIEGO,
CALIF., AND HIS SUBSEQUENT RELEASE FROM ACTIVE DUTY IN THE MARINE CORPS.
WHERE A MEMBER OF THE MARINE CORPS IS TRANSFERRED BY SERVICE RECORDS
TO AN APPROPRIATE MARINE CORPS ACTIVITY NEAR THE HOSPITAL TO WHICH HE
WAS ADMITTED PURSUANT TO MARINE CORPS PERSONNEL MANUAL, PARAGRAPH 4020,
THERE IS SUBSTANTIAL COMPLIANCE WITH PARAGRAPHS M7004-1 AND 2, AND
M9003-3, JTR, EVEN THOUGH THERE IS NO WRITTEN STATEMENT BY THE
COMMANDING OFFICER OF THE HOSPITAL THAT TREATMENT WOULD BE PROLONGED,
SINCE PARAGRAPH 4020 ONLY APPLIES WHERE HOSPITALIZATION IS TO BE LONGER
THAN 60 DAYS.
PARAGRAPHS M7004-1 AND 2 AND M9003-3, JTR, AUTHORIZE PAYMENT OF
TRANSPORTATION AND DISLOCATION ALLOWANCES INCIDENT TO THE TRANSFER
BECAUSE IT IS TREATED AS A PERMANENT CHANGE OF STATION. MOREOVER, ORAL
NOTICE BY THE COMMANDING OFFICER THAT THE MEMBER WOULD BE TRANSFERRED
PERMANENTLY TO THE HOSPITAL SUBSTANTIALLY COMPLIES WITH JTR, PARAGRAPH
M7000-8 SO THE ALLOWANCES ARE AUTHORIZED EVEN IF THE WRITTEN ORDERS WERE
ISSUED SUBSEQUENT TO THE DEPENDENTS' TRAVEL. HOWEVER, THE TRAVEL
ALLOWANCE AUTHORIZED MAY NOT EXCEED THE AMOUNT OF SUCH ALLOWANCE
APPLICABLE TO THE DISTANCE FROM THE OLD PERMANENT STATION TO THE NEW
PERMANENT STATION OF RECORD. SEE JTR, PARAGRAPH M7004-4. NO ALLOWANCE
MAY BE PAID FOR TRAVEL ON PERSONAL BUSINESS; NOR WHILE IN A "TRAVEL
STATUS" ON OFFICIAL BUSINESS UNDER COMPETENT TRAVEL ORDERS. SEE JTR,
PARAGRAPH M3050-1.
TO SGT. PETE F. JIMENEZ:
FURTHER REFERENCE IS MADE TO YOUR UNDATED LETTER RECEIVED IN THIS
OFFICE ON OCTOBER 2, 1972, IN EFFECT REQUESTING RECONSIDERATION OF THE
SETTLEMENT OF THIS OFFICE DATED JULY 20, 1972, WHICH PARTIALLY
DISALLOWED YOUR CLAIM FOR DISLOCATION ALLOWANCE AND TRAVEL ALLOWANCES
FOR YOU AND YOUR DEPENDENTS INCIDENT TO YOUR HOSPITALIZATION AT THE
UNITED STATES NAVAL HOSPITAL, SAN DIEGO, CALIFORNIA, AND YOUR SUBSEQUENT
RELEASE FROM ACTIVE DUTY IN THE UNITED STATES MARINE CORPS ON DECEMBER
31, 1971.
BY HEADQUARTERS 8TH MARINE CORPS DISTRICT LETTER ORDER DATED AUGUST
11, 1971, AS MODIFIED BY ORDERS DATED AUGUST 20, 1971, YOU WERE DIRECTED
TO PROCEED ON OR ABOUT AUGUST 30, 1971, FOR TEMPORARY ADDITIONAL DUTY TO
SAN DIEGO, CALIFORNIA, FOR A PERIOD OF ABOUT TWO DAYS IN CONNECTION WITH
PHYSICAL EVALUATION AND APPEARANCE BEFORE A MEDICAL BOARD. THOSE ORDERS
DIRECTED THAT UPON COMPLETION OF THAT DUTY YOU WERE TO RETURN TO YOUR
UNIT AND RESUME YOUR REGULAR DUTIES. TRAVEL VIA COMMERCIAL AIR WAS
DIRECTED AND YOU WERE FURNISHED A GOVERNMENT TRANSPORTATION REQUEST
COVERING AIR TRANSPORTATION FROM YOUR PERMANENT DUTY STATION TO SAN
DIEGO WITH AN ITINERARY WHICH INCLUDED AN OPEN RETURN.
AT THE TIME YOU RECEIVED THOSE ORDERS YOU WERE SERVING AS A MARINE
RECRUITER AT THE EL PASO, TEXAS, RECRUITING SUBSTATION OF THE
ALBUQUERQUE, NEW MEXICO, MARINE RECRUITING STATION. EL PASO, TEXAS WAS
YOUR PERMANENT DUTY STATION AND APPARENTLY YOU AND YOUR DEPENDENTS WERE
OCCUPYING GOVERNMENT QUARTERS AT FORT BLISS (EL PASO), TEXAS.
PURSUANT TO THOSE ORDERS IT APPEARS YOU TRAVELED TO SAN DIEGO,
CALIFORNIA, WHERE THE RECORD INDICATES YOU WERE ADMITTED TO THE UNITED
STATES NAVAL HOSPITAL ON AUGUST 30, 1971. APPARENTLY, IT WAS DECIDED TO
RETAIN YOU AT THE HOSPITAL BEYOND THE TWO-DAY PERIOD SPECIFIED IN YOUR
ORDERS SINCE THE RECORD INDICATES YOU WERE NOT RELEASED TO DUTY FROM THE
HOSPITAL UNTIL NOVEMBER 5, 1971.
THE RECORD ALSO INDICATES THAT DURING YOUR HOSPITALIZATION YOU WERE
GRANTED EMERGENCY LEAVE FOR THE PERIOD SEPTEMBER 8 - 14, 1971, DURING
WHICH YOU RETURNED TO EL PASO USING THE RETURN PORTION OF THE AIR
TRANSPORTATION PROCURED WITH THE GOVERNMENT TRANSPORTATION REQUEST WHICH
HAD BEEN ISSUED PURSUANT TO YOUR ORDERS OF AUGUST 11 AND 20, 1971.
APPARENTLY DURING THAT LEAVE PERIOD, YOU MOVED YOUR FAMILY FROM EL PASO
TO FREMONT, CALIFORNIA. AT THE EXPIRATION OF YOUR LEAVE YOU APPARENTLY
RETURNED TO THE UNITED STATES NAVAL HOSPITAL AT SAN DIEGO WHERE YOU
REMAINED UNTIL NOVEMBER 5, 1971.
BY HEADQUARTERS 8TH MARINE CORPS DISTRICT SPECIAL ORDER NUMBER 85-71
DATED SEPTEMBER 28, 1971, EFFECTIVE OCTOBER 1, 1971, YOU WERE
TRANSFERRED "BY SERVICE RECORDS" FROM THE EL PASO RECRUITING SUBSTATION
TO THE MARINE CORPS RECRUIT DEPOT, SAN DIEGO, FOR "ADMINISTRATIVE
PURPOSES WHILE SICK" AT THE UNITED STATES NAVAL HOSPITAL, SAN DIEGO.
BY ORDER OF THE UNITED STATES NAVAL HOSPITAL, SAN DIEGO, DATED AND
EFFECTIVE NOVEMBER 5, 1971, YOU WERE TRANSFERRED TO THE UNITED STATES
MARINE CORPS RECRUIT DEPOT, SAN DIEGO, FOR RESUMPTION OF DUTY UNDER
AUTHORITY OF PARAGRAPH 4020 OF THE MARINE CORPS PERSONNEL MANUAL.
APPARENTLY YOU PERFORMED DUTY AT THE RECRUIT DEPOT UNTIL BY ORDERS DATED
NOVEMBER 29, 1971, OF THE COMMANDING GENERAL OF THE RECRUIT DEPOT AND
FIRST ENDORSEMENT OF THE COMMANDING OFFICER, CASUAL COMPANY,
HEADQUARTERS AND SERVICE BATTALION, YOU WERE DIRECTED TO PROCEED HOME ON
NOVEMBER 30, 1971, PENDING FINAL DISPOSITION OF PHYSICAL EVALUATION
BOARD FINDINGS. PURSUANT TO THOSE ORDERS YOU APPARENTLY ELECTED TO
PROCEED TO ALBUQUERQUE, NEW MEXICO, FOR WHICH YOU WERE PAID A $48
MILEAGE ALLOWANCE.
ON DECEMBER 31, 1971, YOU WERE RELEASED FROM ALL ACTIVE DUTY IN THE
MARINE CORPS AND PLACED ON THE TEMPORARY DISABILITY RETIRED LIST
EFFECTIVE JANUARY 1, 1972, BY ORDERS OF THE COMMANDING GENERAL, MARINE
CORPS RECRUIT DEPOT, SAN DIEGO, DATED DECEMBER 20, 1971. THE RECORD
SHOWS THAT YOU SELECTED SANTA FE, NEW MEXICO, AS YOUR HOME INCIDENT TO
THE ORDERS PLACING YOU ON THE TEMPORARY DISABILITY RETIRED LIST.
THE MARINE CORPS FINANCE CENTER FORWARDED THE VOUCHERS AND SUPPORTING
DOCUMENTATION COVERING YOUR CLAIMS FOR TRAVEL ALLOWANCES FOR YOU AND
YOUR DEPENDENTS AND DISLOCATION ALLOWANCE TO OUR TRANSPORTATION AND
CLAIMS DIVISION FOR SETTLEMENT.
BY SETTLEMENT DATED JULY 20, 1972, PURSUANT TO PARAGRAPH M4205-5 OF
THE JOINT TRAVEL REGULATIONS, YOU WERE ALLOWED 3/4 DAY PER DIEM AT THE
RATE OF $11.80 PER DAY ($8.85) LESS TWO MEALS FURNISHED AT GOVERNMENT
EXPENSE AT $2.35 EACH ($4.70) FOR A TOTAL OF $4.15 PER DIEM FOR AUGUST
30, 1971, THE DAY OF YOUR INITIAL TRAVEL UNDER ORDERS FROM EL PASO TO
THE HOSPITAL IN SAN DIEGO. PURSUANT TO PARAGRAPH M4150-1 AND M4158-6 OF
THE REGULATIONS, YOU WERE ALSO ALLOWED A MILEAGE ALLOWANCE AT 6 CENTS
PER MILE FOR 860 MILES FOR A TOTAL OF $51.60 FOR YOUR TRAVEL FROM YOUR
LAST PERMANENT DUTY STATION (SAN DIEGO) TO ALBUQUERQUE AND THEN TO SANTA
FE INCIDENT TO YOUR PLACEMENT ON THE TEMPORARY DISABILITY RETIRED LIST.
ALSO, INCIDENT TO YOUR PLACEMENT ON THAT LIST, AND PURSUANT TO
PARAGRAPHS M7000 AND M7003-2 OF THE REGULATIONS, YOU WERE ALLOWED A
MILEAGE ALLOWANCE OF $103.20 FOR YOUR DEPENDENTS COMPUTED AT 12 CENTS
PER MILE FOR 860 MILES, THE DISTANCE FROM SAN DIEGO (YOUR LAST PERMANENT
DUTY STATION) TO SANTA FE, NEW MEXICO.
BY THAT SETTLEMENT YOU WERE THUS ALLOWED A TOTAL OF $158.95 ($4.15
PER DIEM PLUS $51.60 YOUR MILEAGE ALLOWANCE PLUS $103.20 DEPENDENTS'
MILEAGE ALLOWANCE) FROM WHICH WAS DEDUCTED THE $48 MILEAGE ALLOWANCE YOU
WERE PREVIOUSLY PAID FOR THE PORTION OF YOUR TRAVEL FROM SAN DIEGO TO
ALBUQUERQUE. ALSO DEDUCTED WAS THE $54 COST OF THE GOVERNMENT
TRANSPORTATION REQUEST YOU USED FOR YOUR PERSONAL TRAVEL FROM SAN DIEGO
TO EL PASO WHILE YOU WERE IN A LEAVE STATUS. THUS THE TOTAL AMOUNT DUE
AND PAYABLE TO YOU UNDER THAT SETTLEMENT WAS $56.95.
YOUR CLAIM FOR TRAVEL ALLOWANCE INCIDENT TO YOUR TRAVEL FROM SAN
DIEGO TO EL PASO DURING THE PERIOD OF SEPTEMBER 8 - 12, 1971, WAS
DISALLOWED SINCE SUCH TRAVEL WAS PERFORMED BY YOU FOR PERSONAL REASONS
WHILE IN A LEAVE STATUS AND NOT IN A "TRAVEL STATUS" ON PUBLIC BUSINESS
PURSUANT TO COMPETENT TRAVEL ORDERS AS REQUIRED BY PARAGRAPH M3050-1 BY
THE JOINT TRAVEL REGULATIONS. FOR THE SAME REASON YOU ARE NOT ENTITLED
TO TRAVEL ALLOWANCES FOR YOUR TRAVEL DURING THAT PERIOD FROM EL PASO TO
FREMONT, CALIFORNIA, AND RETURN TO SAN DIEGO.
BY SETTLEMENT OF JULY 20, 1972, YOU WERE ALSO DENIED TRAVEL
ALLOWANCES FOR THE TRAVEL OF YOUR DEPENDENTS FROM EL PASO TO FREMONT FOR
THE REASON THAT PARAGRAPH M7004-1 OF THE JOINT TRAVEL REGULATIONS
PROVIDES THAT TRANSPORTATION OF DEPENDENTS INCIDENT TO A MEMBER'S
HOSPITALIZATION SHALL BE CONTINGENT UPON A STATEMENT BY THE COMMANDING
OFFICER OF THE RECEIVING HOSPITAL THAT HE HAS EVALUATED THE CASE AND
BELIEVES THAT THE PERIOD OF TREATMENT OF THE MEMBER IN THAT HOSPITAL CAN
BE EXPECTED TO BE PROLONGED.
SUCH A STATEMENT WAS NOT PRESENTED WITH YOUR CLAIM. ALSO IN THAT
SETTLEMENT YOU WERE ADVISED THAT PARAGRAPH M7000-8 OF THE REGULATIONS
PROVIDES THAT TRANSPORTATION OF DEPENDENTS IS AUTHORIZED UPON A
PERMANENT CHANGE OF STATION, EXCEPT FOR ANY TRAVEL FOR DEPENDENTS
PERFORMED AT PERSONAL EXPENSE PRIOR TO ISSUANCE OF ORDERS DIRECTING A
PERMANENT CHANGE OF STATION OR PRIOR TO RECEIPT OF OFFICIAL NOTICE THAT
SUCH ORDERS WOULD BE ISSUED.
SIMILARLY YOU WERE DENIED ENTITLEMENT TO DISLOCATION ALLOWANCE
INCIDENT TO YOUR DEPENDENTS' TRAVEL TO FREMONT, CALIFORNIA, ON THE BASIS
THAT PARAGRAPH M9003-3B OF THE JOINT TRAVEL REGULATIONS PROVIDES THAT
SUCH ALLOWANCE IS PAYABLE, AS FOR A PERMANENT CHANGE OF STATION, TO A
MEMBER WITH DEPENDENTS WHO IS TRANSFERRED FROM INSIDE THE UNITED STATES
TO A HOSPITAL IN THE UNITED STATES FOR OBSERVATION AND TREATMENT AND WHO
RELOCATES HIS HOUSEHOLD INCIDENT TO SUCH TRANSFER PROVIDED A STATEMENT
OF PROLONGED HOSPITALIZATION HAS BEEN ISSUED BY THE COMMANDING OFFICER
OF THE RECEIVING HOSPITAL. AS IS NOTED ABOVE, NO SUCH CERTIFICATE WAS
RECEIVED WITH YOUR CLAIM.
BY LETTER OF JULY 25, 1972, THE HONORABLE JOSEPH M. MONTOYA, UNITED
STATES SENATE, WHO HAD EXPRESSED INTEREST IN YOUR CASE, WAS ADVISED OF
THE JULY 20, 1972, SETTLEMENT OF YOUR CLAIM. IN YOUR RECENT LETTER YOU
INDICATE THAT SENATOR MONTOYA'S OFFICE HAS ADVISED YOU TO WRITE US AND
EXPLAIN WHY YOU BELIEVE YOUR CLAIM SHOULD BE ALLOWED IN FULL.
IN YOUR RECENT LETTER YOU INDICATE THAT IN SEPTEMBER 1971 THE OFFICER
IN CHARGE OF THE ALBUQUERQUE RECRUITING SUBSTATION, WHO WAS THEN YOUR
OFFICER IN CHARGE, TELEPHONED YOU IN THE HOSPITAL IN SAN DIEGO AND TOLD
YOU THAT BECAUSE OF THE EXPECTED LONG DURATION OF YOUR STAY IN THE
HOSPITAL YOU WERE BEING TRANSFERRED TO THE MARINE CORPS RECRUIT DEPOT IN
SAN DIEGO. YOU ALSO STATE THAT HE ADVISED YOU THAT YOU COULD GO TO EL
PASO AND BRING YOUR FAMILY TO CALIFORNIA.
YOU INDICATE THAT IT WAS PURSUANT TO THAT ADVICE FROM YOUR OFFICER IN
CHARGE THAT YOU TOOK EMERGENCY LEAVE FROM THE HOSPITAL IN SAN DIEGO
DURING SEPTEMBER 8 - 14, 1971, RETURNED TO EL PASO, ARRANGED TO HAVE
YOUR FURNITURE PLACED IN STORAGE AND MOVED YOUR FAMILY TO FREMONT,
CALIFORNIA, WHERE YOU STATE THEY REMAINED UNTIL YOU WERE SENT TO NEW
MEXICO TO AWAIT RELEASE FROM ACTIVE DUTY. YOU ALSO STATE THAT YOU HAD
BEEN TOLD TO EXPECT TO RECEIVE YOUR TRANSFER ORDERS IN EL PASO AND YOU
ACTUALLY DID RECEIVE THEM THERE WHILE YOU WERE ON LEAVE.
IT APPEARS TO BE YOUR VIEW THAT THE RELOCATION OF YOUR DEPENDENTS TO
FREMONT, CALIFORNIA, WAS PERFORMED UNDER ORDERS AND THAT, THEREFORE, YOU
ARE ENTITLED TO TRANSPORTATION AND DISLOCATION ALLOWANCES INCIDENT TO
SUCH RELOCATION.
UNDER THE STATUTORY AUTHORITY OF 37 U.S.C. 406 AND 407 THE JOINT
TRAVEL REGULATIONS (PARAGRAPHS M7000 AND M9003) PROVIDE FOR THE PAYMENT
OF DEPENDENTS TRANSPORTATION ALLOWANCE AND DISLOCATION ALLOWANCE UNDER
CERTAIN CONDITIONS INCIDENT TO A MEMBER'S PERMANENT CHANGE OF STATION.
IT HAS LONG BEEN HELD THAT AN ORDER TO PROCEED TO A HOSPITAL FOR
OBSERVATION AND TREATMENT FROM A DUTY STATION WITHIN THE UNITED STATES
IS NOT A PERMANENT CHANGE OF THE MEMBER'S DUTY STATION SINCE HE IS NOT
ASSIGNED TO THE HOSPITAL FOR DUTY. 4 COMP. GEN. 653 (1925), 17 COMP.
GEN. 133 (1937), 43 COMP. GEN. 596, 603 (1964) AND 48 COMP. GEN. 603
(1969). AND, IT HAS BEEN HELD THAT THERE IS NO BASIS TO CONCLUDE THAT
ORDERS DIRECTING A "TRANSFER BY SERVICE RECORDS" MAY BE CONSIDERED AS
PERMANENT CHANGE-OF-STATION ORDERS PRIOR TO THE TIME THE MEMBER IS
RELEASED FROM THE HOSPITAL TO DUTY. B-144900, MARCH 27, 1961.
HOWEVER, AS IS INDICATED IN THE SETTLEMENT OF JULY 20, 1972,
PARAGRAPHS M7004-1 AND 2 AND M9003-3 OF THE JOINT TRAVEL REGULATIONS
AUTHORIZE DEPENDENTS' TRANSPORTATION ALLOWANCE AND DISLOCATION ALLOWANCE
AS FOR A PERMANENT CHANGE OF STATION WHEN THE MEMBER IS TRANSFERRED FROM
A DUTY STATION INSIDE THE UNITED STATES TO A HOSPITAL FOR OBSERVATION
AND TREATMENT, PROVIDED, THERE IS A STATEMENT BY THE COMMANDING OFFICER
OF THE RECEIVING HOSPITAL THAT HE HAS EVALUATED THE CASE AND BELIEVES
THAT THE PERIOD OF TREATMENT OF THE MEMBER IN THAT HOSPITAL CAN BE
EXPECTED TO BE PROLONGED.
WHILE NO SUCH STATEMENT WAS INCLUDED WITH YOUR CLAIM AND THIS OFFICE
AND THE MARINE CORPS FINANCE CENTER HAVE BEEN UNSUCCESSFUL IN ATTEMPTING
TO LOCATE SUCH A STATEMENT, WE NOTE THAT THE UNITED STATES NAVAL
HOSPITAL, SAN DIEGO, ORDERS OF NOVEMBER 5, 1971, TRANSFERRING YOU TO THE
MARINE CORPS RECRUIT DEPOT FOR RESUMPTION OF DUTY, INDICATE THAT SUCH
ACTION WAS TAKEN UNDER THE AUTHORITY OF PARAGRAPH 4020 OF THE MARINE
CORPS PERSONNEL MANUAL. THAT PARAGRAPH PROVIDES GENERALLY IN PART THAT
WHEN MARINE CORPS PERSONNEL ATTACHED TO ACTIVITIES WITHIN THE
CONTINENTAL UNITED STATES ARE ADMITTED TO A SERVICE OR VETERANS
ADMINISTRATION HOSPITAL WHICH IS NOT LOCATED IN THE VICINITY OF THE
ORGANIZATION TO WHICH THE PATIENT IS PERMANENTLY ASSIGNED, HE MAY BE
TRANSFERRED BY SERVICE RECORDS TO THE APPROPRIATE MARINE CORPS ACTIVITY
NEAR THE HOSPITAL.
IN THIS REGARD SUBPARAGRAPH 4020-2 PROVIDES IN PART:
"TO DETERMINE IF AN INDIVIDUAL IS TO BE TRANSFERRED, COMMANDERS SHALL
CONSIDER THE PROBABLE PERIOD OF HOSPITALIZATION AND WHETHER OR NOT
DEPENDENTS RESIDE IN GOVERNMENT QUARTERS. GENERALLY, WHERE THE PERIOD
OF HOSPITALIZATION WILL BE LESS THAN 60 DAYS AND THE ADMINISTRATION OF
THE PATIENT CAN BE EFFECTIVELY ACCOMPLISHED BY THE PARENT ORGANIZATION,
TRANSFER OF THE HOSPITALIZED MARINE WILL NOT BE EFFECTED."
YOU ENTERED THE HOSPITAL AUGUST 30, 1971, AND WERE RELEASED NOVEMBER
5, 1971, A PERIOD IN EXCESS OF 60 DAYS. SINCE YOU WERE TRANSFERRED BY
SERVICE RECORD TO THE HOSPITAL AFTER YOUR ARRIVAL THERE, IT SEEMS
REASONABLY CLEAR THAT THE DETERMINATION WAS MADE BY PERSONNEL AT THE
HOSPITAL THAT YOUR HOSPITALIZATION WAS EXPECTED TO BE 60 DAYS OR MORE AS
PROVIDED BY THE ABOVE PROVISIONS OF PARAGRAPH 4020 OF THE MARINE CORPS
PERSONNEL MANUAL. THEREFORE, WHILE A WRITTEN STATEMENT TO THAT EFFECT
HAS NOT BEEN FURNISHED, WE NOW CONCLUDE THAT THERE WAS SUBSTANTIAL
COMPLIANCE WITH PARAGRAPHS M7004-1 AND 2 AND M9003-3 OF THE JOINT TRAVEL
REGULATIONS IN REGARD TO THE STATEMENTS REQUIRED TO ESTABLISH
ENTITLEMENT TO DEPENDENTS' TRAVEL ALLOWANCE AND DISLOCATION ALLOWANCE.
B-145240, MARCH 31, 1961.
ALSO, AS INDICATED IN THE SETTLEMENT OF JULY 20, 1972, PARAGRAPH
M7000-8 OF THE JOINT TRAVEL REGULATIONS PROVIDES THAT TRANSPORTATION AT
GOVERNMENT EXPENSE IS NOT AUTHORIZED FOR ANY TRAVEL OF DEPENDENTS
PERFORMED AT PERSONAL EXPENSE PRIOR TO THE ISSUANCE OF ORDERS OR PRIOR
TO RECEIPT OF OFFICIAL NOTICE THAT SUCH ORDERS WOULD BE ISSUED. IN THIS
CASE YOU APPARENTLY MOVED YOUR DEPENDENTS TO FREMONT, CALIFORNIA,
BETWEEN SEPTEMBER 8 AND 14, 1971, PRIOR TO SEPTEMBER 28, 1971, THE DATE
OF THE ORDERS TRANSFERRING YOU BY SERVICE RECORD TO SAN DIEGO. HOWEVER,
SINCE YOU STATE THAT YOU WERE ADVISED BY TELEPHONE IN SEPTEMBER 1971 BY
YOUR OFFICER IN CHARGE THAT SUCH ORDERS WOULD BE ISSUED AND YOU STATE
YOU ACTUALLY HAD RECEIVED THE ORDERS AT THE TIME YOU MOVED YOUR
DEPENDENTS, IT APPEARS REASONABLY CLEAR THAT YOU HAD OFFICIAL NOTICE OF
SUCH ORDERS PRIOR TO THE TIME YOUR DEPENDENTS TRAVELED. THIS VIEW IS
SUPPORTED BY THE FACT THAT SUCH TRAVEL WAS PERFORMED ONLY A SHORT TIME
PRIOR TO THE DATE OF THE ORDERS. THEREFORE, WE CONCLUDE THAT THERE WAS
SUBSTANTIAL COMPLIANCE WITH PARAGRAPH M7000-8 OF THE JOINT TRAVEL
REGULATIONS.
ACCORDINGLY, YOU ARE ENTITLED TO TRAVEL ALLOWANCE FOR YOUR
DEPENDENTS' TRAVEL FROM FORT BLISS (EL PASO), TEXAS, TO FREMONT,
CALIFORNIA, NOT TO EXCEED THE AMOUNT OF SUCH ALLOWANCE APPLICABLE TO THE
DISTANCE FROM FORT BLISS TO SAN DIEGO, CALIFORNIA, WHERE YOU WERE
HOSPITALIZED. SEE PARAGRAPHS M7004-4 AND M7057 OF THE JOINT TRAVEL
REGULATIONS. YOU ARE ALSO ENTITLED TO DISLOCATION ALLOWANCE INCIDENT TO
THE MOVE OF YOUR DEPENDENTS. WE ARE TODAY ISSUING INSTRUCTIONS TO OUR
TRANSPORTATION AND CLAIMS DIVISION FOR THE ALLOWANCE OF THAT PORTION OF
YOUR CLAIM AND YOU SHOULD RECEIVE A CHECK IN DUE COURSE FROM THE MARINE
CORPS.
BY THE SETTLEMENT OF JULY 20, 1972, YOU WERE ALLOWED A TRAVEL
ALLOWANCE FOR YOUR DEPENDENTS' TRAVEL FROM FREMONT, CALIFORNIA, TO SANTA
FE, NEW MEXICO, NOT TO EXCEED THE AMOUNT APPLICABLE TO THE DISTANCE FROM
YOUR LAST PERMANENT DUTY STATION (SAN DIEGO, CALIFORNIA) TO YOUR HOME OF
SELECTION (SANTA FE, NEW MEXICO) INCIDENT TO YOUR PLACEMENT ON THE
TEMPORARY DISABILITY RETIRED LIST. PER PARAGRAPHS M7010-1 AND M7058 OF
THE JOINT TRAVEL REGULATIONS, THAT IS THE MAXIMUM TO WHICH YOU ARE
ENTITLED FOR SUCH TRAVEL.
ALSO, AS WAS INDICATED IN THE SETTLEMENT, YOU ARE NOT ENTITLED TO
TRANSPORTATION AT GOVERNMENT EXPENSE OR MILEAGE ALLOWANCES FOR YOUR
PERSONAL TRAVEL DURING THE PERIOD SEPTEMBER 8 - 14, 1971, FROM SAN DIEGO
TO EL PASO TO FREMONT AND RETURN TO SAN DIEGO WHILE YOU WERE IN A LEAVE
STATUS SINCE SUCH TRAVEL WAS PERFORMED FOR PERSONAL REASONS AND NOT
WHILE YOU WERE IN A "TRAVEL STATUS" ON OFFICIAL BUSINESS PURSUANT TO
COMPETENT TRAVEL ORDERS. SEE PARAGRAPH M3050-1 OF THE JOINT TRAVEL
REGULATIONS ISSUED PURSUANT TO 37 U.S.C. 404. 30 COMP. GEN. 226 (1950)
AND 49 COMP. GEN. 663 (1970).
WE ARE ADVISING SENATOR MONTOYA BY LETTER OF TODAY'S DATE OF THE
ACTION TAKEN IN YOUR CASE.
B-176704, JAN 8, 1973
BID PROTEST - EVALUATION OF BIDS - TRANSPORTATION RATES - "BUY IN" -
DETERMINATION OF SET ASIDE
DENIAL OF PROTEST BY SOUTHWEST MANUFACTURING CO. AGAINST THE AWARD OF
A SINGLE YEAR CONTRACT TO TELEDYNE BROWN ENGINEERING UNDER A MULTIYEAR
IFB ISSUED BY THE U.S. ARMY MISSILE COMMAND (MICOM) FOR MINIMUM/MAXIMUM
QUANTITIES OF BALLISTIC AERIAL TARGETS (BATS) FOR FISCAL YEAR 73 THROUGH
FY-76, AS WELL AS FOR FY 73 ALONE.
WHILE THE TRANSPORTATION RATE USED BY MICOM WAS TOO LOW FOR BROWN AND
TOO HIGH FOR SOUTHWEST, THE COMPETITIVE STANDING OF THE TWO BIDDERS
WOULD BE UNAFFECTED. ALSO, NEITHER OF THE RATES SOUTHWEST CONTENDS
APPLIES TO ITS BID WOULD CHANGE THE STANDING OF THE BIDDERS. THE
SPECIFIC ACTIONS TO BE TAKEN BY A CONTRACTING OFFICER IN THE EVENT HE
THINKS A "BUYING-IN" HAS OCCURRED, OR IS OCCURRING, ARE CONTAINED IN
ASPR 1-311, BUT THIS DOES NOT AFFORD A BASIS FOR REJECTING A BID.
B-174184, MAY 24, 1972.
THE DECISION TO SET ASIDE A PROCUREMENT FOR SMALL BUSINESS FIRMS IS A
MATTER FOR SOUND ADMINISTRATIVE DISCRETION, AND SINCE THIS RECORD DOES
NOT INDICATE ANY ABUSE OF THAT DISCRETION, GAO WILL NOT OBJECT TO THE
DECISION NOT TO SET ASIDE THE PROCUREMENT.
TO SOUTHWEST MANUFACTURING CO.:
BY TELEGRAM DATED AUGUST 7, 1972, AND SUBSEQUENT CORRESPONDENCE, YOU
PROTESTED THE AWARD OF A SINGLE YEAR CONTRACT TO TELEDYNE BROWN
ENGINEERING (BROWN) UNDER MULTI-YEAR INVITATION FOR BIDS (IFB)
DAAH01-72-B-0782, ON THE GROUND THAT THE U.S. ARMY MISSILE COMMAND
(MICOM) DID NOT EMPLOY THE LOWEST AVAILABLE TRANSPORTATION RATE IN ITS
EVALUATION OF YOUR BID. IT IS YOUR CONTENTION THAT COMPUTATION OF THE
TRANSPORTATION CHARGES UTILIZING THE RATES OFFERED BY SOUTHWEST WOULD
DEMONSTRATE ITS BID ON THE MULTI-YEAR BASIS WAS LOW. SOUTHWEST ALSO
PROTESTS THE ISSUANCE OF THE IFB WITHOUT CONSIDERATION OF SMALL
BUSINESSES OR MINORITY OWNED FIRMS. SOUTHWEST FURTHER ALLEGES THAT
BROWN'S BID WAS A "BUY-IN" IN CONTRAVENTION OF THE ARMED SERVICES
PROCUREMENT REGULATION AND THAT BROWN CONSPIRED TO RESTRICT COMPETITION
BY REQUESTING CERTAIN SUBCONTRACTORS NOT TO QUOTE RATES TO ANY OTHER
FIRM.
FOR REASONS TO BE STATED, WE CONCLUDE THAT THE CONTRACT AWARDED BROWN
WAS NOT LEGALLY OBJECTIONABLE AND, CONSEQUENTLY, THE PROTEST IS DENIED.
THE IFB REQUIRED BIDS FOR MINIMUM/MAXIMUM QUANTITIES OF BALLISTIC
AERIAL TARGETS (BATS) FOR THE MULTI-YEAR REQUIREMENTS FOR FISCAL YEAR
(FY) 73 THROUGH FY-76, AS WELL AS FOR THE FIRST PROGRAM YEAR (FY 73)
ALONE. PRICES WERE ALSO REQUIRED FOR VARIOUS ANCILLARY HARDWARE ITEMS,
WHICH COMPRISED A MINOR PORTION OF THE OVERALL PRICE AND WEIGHT OF THE
BATS. THE IFB APPRISED BIDDERS THAT BIDS WOULD BE EVALUATED TO
DETERMINE THE LOWEST OVERALL COST TO THE GOVERNMENT FOR BOTH THE FIRST
PROGRAM YEAR REQUIREMENT ALONE AND THE MULTI-YEAR REQUIREMENT, TAKING
INTO ACCOUNT THE TRANSPORTATION COSTS TO THE GOVERNMENT FROM POINT OF
ORIGIN TO PUEBLO ARMY DEPOT, COLORADO, FOR THE MINIMUM QUANTITIES STATED
EXCLUSIVE OF OPTION QUANTITIES.
BIDDERS WERE REQUIRED TO STATE THE GUARANTEED MAXIMUM SHIPPING WEIGHT
AND DIMENSION AND AGREE TO A CONTRACT PRICE REDUCTION IN THE EVENT THE
ACTUAL SHIPPING WEIGHT EXCEEDED THE WEIGHT LISTED IN THE BID. BIDDERS
WERE ALSO REQUIRED TO SHOW THEIR F.O.B. POINT OF ORIGIN. ALL SHIPMENTS
WERE TO BE TRANSPORTED UNDER A GOVERNMENT BILL OF LADING, SHIPPING
INSTRUCTIONS TO BE ISSUED AFTER AWARD.
SOUTHWEST AND BROWN WERE THE ONLY BIDDERS. BROWN BID $200 PER BAT
FOR THE FIRST PROGRAM YEAR ALONE AND $218 PER BAT FOR THE MULTI-YEAR
REQUIREMENT. SOUTHWEST BID $231 PER BAT FOR THE SINGLE YEAR REQUIREMENT
AND $214 ON THE BASIS OF THE MULTI-YEAR REQUIREMENT. THE MILITARY
TRAFFIC MANAGEMENT AND TERMINAL SERVICE, IN ACCORDANCE WITH ASPR
19-301.2(A), UPON REQUEST, EVALUATED THE TRANSPORTATION CHARGES AS
$13.03/UNIT FOR BROWN AND $9.26/UNIT FOR SOUTHWEST. THE EVALUATED UNIT
PRICES WERE:
SOUTHWEST BROWN
SINGLE YEAR $240.26 $213.03
MULTI-YEAR 223.26 231.03
INCLUDING THE OTHER ITEMS REQUIRED BY THE IFB, THE TOTAL EVALUATED
PRICES WERE:
SOUTHWEST BROWN
SINGLE YEAR $1,012,280 $ 887,010
MULTI-YEAR 4,631,060 4,727,840
THE EVALUATION FOLLOWED THE METHOD PRESCRIBED BY ASPR 1-322.3(H) TO
COMPARE THE SINGLE YEAR PRICE WITH THE MULTI-YEAR PRICE TO DETERMINE THE
LOWEST OVERALL PER UNIT COST TO THE GOVERNMENT AS FOLLOWS:
"TO DETERMINE THE LOWEST EVALUATED UNIT PRICE, COMPARE THE LOWEST
EVALUATED BID OR OFFER IN THE FIRST PROGRAM YEAR ALTERNATIVE AGAINST THE
LOWEST EVALUATED BID OR OFFER ON THE MULTI-YEAR ALTERNATIVE AS FOLLOWS:
(I) MULTIPLY THE EVALUATED UNIT PRICE FOR EACH ITEM OF THE LOWEST
EVALUATED BID OR OFFER ON THE FIRST PROGRAM YEAR ALTERNATIVE TIMES THE
TOTAL NUMBER OF UNITS OF THAT ITEM REQUIRED BY THE MULTI-YEAR
ALTERNATIVE, AND THEN
(II) TAKE THE SUM OF THESE PRODUCTS FOR ALL THE ITEMS, PLUS THE
DOLLAR AMOUNT OF ANY ADMINISTRATIVE COSTS OF THE GOVERNMENT WHICH ARE TO
BE USED IN THE EVALUATION, AND FINALLY
(III) COMPARE THIS RESULT AGAINST THE TOTAL EVALUATED PRICE OF THE
LOWEST BID OR OFFER ON THE MULTI-YEAR ALTERNATIVE."
ON THE FOREGOING BASIS, SOUTHWEST'S MULTI-YEAR BID OF $4,631,060 WAS
COMPARED TO BROWN'S PROJECTED SINGLE YEAR BID OF $4,358,210, A TOTAL
DIFFERENCE OF $272,850.
SOUTHWEST HAS CONTENDED THAT THE TRANSPORTATION RATES OF $5.39 AND
$6.00 A UNIT QUOTED TO IT BY THE ATCHISON, TOPEKA AND SANTA FE RAILWAY
COMPANY AND ICX, RESPECTIVELY, SHOULD HAVE BEEN UTILIZED BY MICOM IN THE
EVALUATION OF THE SOUTHWEST BID INSTEAD OF THE $9.26 RATE USED. OUR
TRANSPORTATION AND CLAIMS DIVISION MADE AN EVALUATION OF TRANSPORTATION
RATES AND DEEMS THE FOLLOWING RATES TO BE APPLICABLE TO THE PROCUREMENT:
FROM RAIL MOTOR
HUNTSVILLE, ALABAMA $13.314/UNIT $24.375/UNIT
EL PASO, TEXAS 9.167/UNIT 15.45/UNIT
FOR THE MINIMUM 20,000 UNITS FOR THE MULTI-YEAR REQUIREMENT, THE
TOTAL EVALUATED RAIL TRANSPORTATION CHARGES FOR BROWN WOULD BE $266,280
AND $183,340 FOR SOUTHWEST, OR $82,940 LESS FOR SOUTHWEST. HOWEVER,
EXCLUSIVE OF TRANSPORTATION COSTS, BROWN'S EVALUATED SINGLE YEAR BID WAS
$280,000 LESS THAN THE SOUTHWEST BID FOR THE TOTAL MULTI-YEAR UNIT
REQUIREMENT. THEREFORE, WHILE OUR ANALYSIS HAS INDICATED THAT THE
TRANSPORTATION RATE USED BY MICOM WAS $.284 TOO LOW FOR BROWN AND $.093
TOO HIGH FOR SOUTHWEST, THE COMPETITIVE STANDING OF THE TWO BIDDERS WAS
UNAFFECTED. FURTHER, WE NOTE THAT NEITHER OF THE RATES SOUTHWEST
CONTENDS APPLIES TO ITS BID WOULD CHANGE THE STANDING OF THE BIDDERS.
YOU HAVE ALLEGED THAT BROWN'S BID IS A "BUY IN." IN THAT REGARD, OUR
OFFICE HAS HELD THAT ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-311
WHICH SETS OUT SPECIFIC ACTIONS TO BE TAKEN BY THE CONTRACTING OFFICER
IN THE EVENT "BUYING IN" IS THOUGHT TO BE OCCURRING OR HAS OCCURRED DOES
NOT AFFORD A BASIS FOR REJECTION OF A BID. B-174184, MAY 24, 1972.
YOU HAVE QUESTIONED WHY THE IFB WAS NOT SET ASIDE FOR SMALL BUSINESS
NOR CONSIDERATION GIVEN TO THE FACT THAT SOUTHWEST WAS A MINORITY OWNED
ENTERPRISE. ASPR 1-706.5(A)(1) PROVIDES FOR A SMALL BUSINESS SET-ASIDE
-
"*** IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE
EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT
NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE
MADE AT REASONABLE PRICES. TOTAL SET-ASIDES SHALL NOT BE MADE UNLESS
SUCH A REASONABLE EXPECTATION EXISTS. ***"
IN THIS CASE, THE CONTRACTING OFFICER HAS INDICATED THAT SMALL
BUSINESS FIRMS HAD NEVER PRODUCED THE BATS AND ON THE PREVIOUS
UNRESTRICTED PROCUREMENT ALL BIDDERS WERE LARGE BUSINESS FIRMS SO THAT
IT WAS NOT ANTICIPATED THAT A SUFFICIENT NUMBER OF SMALL BUSINESS FIRMS
WOULD BID TO ASSURE SUFFICIENT COMPETITION. SINCE THERE WERE ONLY TWO
BIDDERS ON THE IMMEDIATE IFB AND YOU WERE THE ONLY ONE REPRESENTED TO BE
A SMALL BUSINESS, THE LACK OF COMPETITION AMONG SMALL BUSINESS SOURCES
WAS AS ANTICIPATED. FURTHER, THE DETERMINATION OF WHETHER A PROCUREMENT
SHOULD BE SET ASIDE IS A MATTER WITHIN THE AMBIT OF SOUND ADMINISTRATIVE
DISCRETION AND SINCE THERE IS NO CLEAR SHOWING OF ABUSE OF THAT
DISCRETION HERE, OUR OFFICE CANNOT OBJECT TO THE FAILURE OF A
PROCUREMENT TO BE SET ASIDE. 50 COMP. GEN. 383 (1970); 45 COMP. GEN.
228 (1965).
MOREOVER, THE SOLICITATION WAS UNRESTRICTED AND YOU WERE NOT ENTITLED
TO ANY SPECIAL CONSIDERATION BY VIRTUE OF THE FACT THAT YOU ARE A
MINORITY OWNED FIRM OR THAT YOU EMPLOY MINORITY GROUP MEMBERS.
FINALLY, YOU HAVE CONTENDED THAT BROWN CONSPIRED TO RESTRICT
COMPETITION FOR THE SOLICITATION. IN THAT REGARD, ONE OF THE
CERTIFICATIONS EACH BIDDER MAKES ON STANDARD FORM 33 IS THAT "NO ATTEMPT
HAS BEEN MADE OR WILL BE MADE BY THE OFFEROR TO INDUCE ANY PERSON OR
FIRM TO SUBMIT OR NOT TO SUBMIT AN OFFER FOR THE PURPOSE OF RESTRICTING
COMPETITION." ASPR 1-115(F) PROVIDES THAT WHEN A CERTIFICATION IS
SUSPECTED OF BEING FALSE OR THERE IS AN INDICATION OF COLLUSION, THE
MATTER SHALL BE PROCESSED IN ACCORDANCE WITH ASPR 1-111. THE LATTER
SECTION PROVIDES FOR THE SECRETARY CONCERNED OR HIS REPRESENTATIVE TO
REFER TO THE ATTORNEY GENERAL ANY EVIDENCE OF A NONCOMPETITIVE PRACTICE.
THUS, IF YOU HAVE EVIDENCE TO SUPPORT YOUR ALLEGATION, IT SHOULD BE
FURNISHED TO THE DEPARTMENT OF THE ARMY FOR POSSIBLE COORDINATION WITH
THE DEPARTMENT OF JUSTICE.
B-177462, JAN 8, 1973
CIVILIAN EMPLOYEE - SEPARATION - USE OF SICK LEAVE - TIME BARRED CLAIM
DENIAL OF CLAIM BY FRANK J. DODICK FOR SICK LEAVE DENIED HIM AT THE
TIME OF HIS SEPARATION FROM A POSITION AT PUEBLO ORDNANCE DEPOT, PUEBLO,
COLO., IN 1945.
THE DECISION NOT TO GRANT TERMINAL SICK LEAVE AT THE TIME OF
SEPARATION IS A MATTER WITHIN THE DISCRETION OF THE ADMINISTRATIVE
AGENCY, AND IN THIS CASE THERE IS NO ERROR WHICH WOULD JUSTIFY
RESTORATION OF CLAIMANT TO THE ROLLS FOR THE PURPOSE OF TAKING SUCH
LEAVE. FURTHER, GAO DOES NOT HAVE JURISDICTION TO DECIDE THIS QUESTION
SINCE THE CLAIM IS BARRED UNDER THE 10 YEAR LIMITATION PERIOD OF THE ACT
OF OCTOBER 9, 1940.
TO MR. FRANK J. DODICK:
THIS REFERS TO YOUR LETTER ADDRESSED TO OUR CLAIMS DIVISION, WHICH
WAS RECEIVED IN THIS OFFICE NOVEMBER 1, 1972, CONCERNING YOUR CLAIM FOR
SICK LEAVE YOU WERE DENIED AT THE TIME YOU WERE SEPARATED FROM YOUR
POSITION AT PUEBLO ORDNANCE DEPOT, PUEBLO, COLORADO, IN 1945.
IN AN EFFORT TO DETERMINE THE MERITS OF YOUR CLAIM WE REQUESTED A
REPORT ON THE MATTER FROM THE DEPARTMENT OF THE ARMY. FROM THAT REPORT
IT IS CLEAR THAT THE DENIAL OF YOUR APPLICATION FOR TERMINAL SICK LEAVE
WAS BASED ON AN ADMINISTRATIVE DETERMINATION THAT YOUR PHYSICAL
CONDITION AT THE TIME DID NOT WARRANT ITS APPROVAL. SUCH A
DETERMINATION WAS ENTIRELY IN ACCORDANCE WITH THE ESTABLISHED PRINCIPLE
THAT THE APPROVAL OR DISAPPROVAL OF AN APPLICATION FOR SICK LEAVE IS
WITHIN THE DISCRETION OF AN ADMINISTRATIVE AGENCY. ACCORDINGLY, WE FIND
NO ERROR IN THE ACTION TAKEN WITH RESPECT TO YOUR SICK LEAVE IN 1945
WHICH WOULD JUSTIFY THE ADMINISTRATIVE OFFICE TO RESTORE YOU TO THE
ROLLS FOR THE PURPOSE OF PAYMENT OF SICK LEAVE.
INSOFAR AS THE JURISDICTION OF OUR OFFICE TO CONSIDER YOUR CLAIM IS
CONCERNED, THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061, BARS OUR
CONSIDERATION OF THOSE CLAIMS NOT RECEIVED IN OUR OFFICE WITHIN 10 FULL
YEARS AFTER ACCRUAL. YOUR CLAIM ACCRUED IN 1945. A COPY OF THE ACT IS
ENCLOSED.
B-175951, JAN 4, 1973
BID PROTEST - IFB CANCELLATION - PERFORMANCE SPECIFICATION
DECISION DENYING THE PROTEST OF FLORIDA GENERAL ELECTRONICS, INC.,
AGAINST CANCELLATION OF AN IFB ISSUED BY THE EDGEWOOD ARSENAL, MD., FOR
RUBBER BODY ASSEMBLIES FOR GRENADES.
A CONTRACTING OFFICER HAS BROAD DISCRETION IN DETERMINING WHETHER THE
GOVERNMENT'S INTERESTS REQUIRE CANCELLATION OF AN IFB, AND GAO WILL NOT
QUESTION SUCH A DETERMINATION UNLESS THE DISCRETION EXERCISED
CONSTITUTES AN ABUSE OF AUTHORITY. B-177123, NOVEMBER 27, 1972.
MOREOVER, A PERFORMANCE TYPE SPECIFICATION UNDER WHICH THE MANNER OF
PERFORMING IS LEFT TO THE JUDGMENT OF THE CONTRACTOR NEED NOT BE
INCLUDED IN AN IFB WHERE SUCH INFORMATION IS OBTAINABLE WITHIN THE
INDUSTRY.
TO MR. V. KEITH YOUNG:
REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 23, 1972, AND PRIOR
CORRESPONDENCE, ON BEHALF OF FLORIDA GENERAL ELECTRONICS INC.,
PROTESTING AGAINST THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO.
DAAA15-72-B-0255, ISSUED BY THE EDGEWOOD ARSENAL, MARYLAND.
THE IFB WAS ISSUED ON MARCH 3, 1972, FOR VIRGIN BUTYL RUBBER BODY
ASSEMBLIES, 73,752 FOR THE XM47 GRENADE AND 14,048 FOR THE XM48 GRENADE,
AND ONE SET OF MOLDS NECESSARY TO PRODUCE THESE BODY ASSEMBLIES AT A
RATE OF 10,000 PER MONTH (8-HOUR DAY, 5-DAY WEEK, 20-DAY MONTH). BIDS
WERE OPENED ON APRIL 7, 1972. OF THE 15 BIDS RECEIVED, THE LOW BID WAS
SUBMITTED BY FLORIDA GENERAL ELECTRONICS. THE PREAWARD SURVEY REPORT
RECOMMENDED AGAINST AN AWARD TO THE LOW BIDDER. THEREAFTER, THE
CONTRACTING OFFICER DETERMINED THAT IT WAS NOT A RESPONSIBLE PROSPECTIVE
CONTRACTOR.
THE BIDDER APPLIED FOR A CERTIFICATE OF COMPETENCY, HOWEVER, THE IFB
WAS CANCELED BEFORE THAT MATTER WAS RESOLVED.
PARAGRAPH 6.3 OF THE IFB SPECIFICATION PROVIDED:
"FORMULA FOR RUBBER BODY COMPOUND. THE FOLLOWING FORMULA HAS BEEN
FOUND TO PRODUCE SATISFACTORY BODIES:
PARTS BY WEIGHT
BUTYL 268 100.0
ZINC OXIDE 5.0
STEARIC ACID 1.0
HI SIL 215 40.0
ONCAR 23-A 10.0
DECHLORENE S 20.0
SULFUR 1.0
TUEX 2.0
MBT 0.5
179.5
ADDITION OF TITANIUM DIOXIDE AND CARBON BLACK HAS BEEN FOUND
SATISFACTORY TO PROVIDE COMPOUND COLORING (GRAY) SPECIFIED IN
FED-STD-595, COLOR NO. 36231. USE OF THIS FORMULA DOES NOT RELIEVE THE
CONTRACTOR FROM MEETING THE REQUIREMENTS OF THIS SPECIFICATION."
ON MAY 3, 1972, THE CONTRACTING OFFICER REQUESTED A LEGAL OPINION
FROM THE CHIEF, LEGAL OFFICE, EDGEWOOD ARSENAL, REGARDING CERTAIN
DEFECTS IN PARAGRAPH 6.3 OF THE SPECIFICATION. ON MAY 17, 1972, THE
CONTRACTING OFFICER WAS ADVISED BY THE LEGAL OFFICE THAT THERE WAS
SUFFICIENT JUSTIFICATION FOR CANCELLATION OF THE INVITATION BECAUSE OF
INADEQUATE SPECIFICATIONS. THE LEGAL OFFICE, AFTER COORDINATION WITH
THE CONTRACT SPECIALIST AND THE ENGINEER, DETERMINED THAT:
"A. DECHLORENE S IS MISSPELLED.
"B. THE CHEMICAL DECHLORANE S WAS INTENDED.
"C. DECHLORENE S IS NOT A CHEMICAL.
"D. DECHLORANE S IS A TRADE NAME FOR A PATENTED CHEMICAL MADE BY
HOOKER CHEMICAL COMPANY.
"E. DECHLORANE S IS AN OBSOLETE CHEMICAL NOT CURRENTLY MANUFACTURED
AND NOT COMMERCIALLY AVAILABLE.
"F. THE GOVERNMENT HAD SUPERIOR KNOWLEDGE, NOT COMMUNICATED TO THE
BIDDER, THAT DECHLOANE S WAS NOT COMMERCIALLY AVAILABLE AS THE RESULT OF
A PREVIOUS PROCUREMENT.
"G. IFB DAAA15-72-B-0255 IS THE FIRST SOLICITATION FOR A LARGE
VOLUME PRODUCTION QUANTITY (87,800 EACH) OF THE XM47 AND XM48 GRENADE.
THE OTHER THREE SOLICITATIONS BEING FOR QUANTITIES OF 2500 EA, 50 EACH
AND 4000 EA.
"H. UNDER THE CIRCUMSTANCES PRESENTED, THE SUCCESSFUL LOW BIDDER
WOULD BE ENTITLED TO RELY ON THE FORMULA 6.3 OF THE SPECIFICATION AND
THE COMMERCIAL AVAILABILITY OF DECHLORANE S (SEE AERODEX, INC. V.
UNITED STATES 417 F.2D 1361 (1969) AND CASES CITED THEREIN."
THE LEGAL OFFICE ADVISED THAT THE CITED DEFECTS IN THE SPECIFICATIONS
WOULD BE GROUNDS UPON WHICH A CONTRACTOR COULD FILE DELAY AND OTHER
CLAIMS AGAINST THE GOVERNMENT. TWO PREVIOUS PRODUCERS HAVE FILED CLAIMS
FOR DELAY AND OTHER COSTS INCURRED AS A RESULT OF RELIANCE ON PARAGRAPH
6.3 OF THE SPECIFICATION. ONE OF THE CLAIMS HAD BEEN SETTLED BY THE
CONTRACTING OFFICER IN 1970 AND THE OTHER WAS PENDING WHEN REPORTS ON
THE IMMEDIATE PROTEST WERE FILED WITH OUR OFFICE.
BASED ON ABOVE LEGAL ADVICE, THE CONTRACTING OFFICER DETERMINED ON
MAY 17, 1972, THAT THE IFB SPECIFICATION WAS DEFECTIVE, THAT THE
CANCELLATION OF IFB WAS IN THE BEST INTERESTS OF THE GOVERNMENT AND THAT
THE REQUIREMENT WOULD BE READVERTISED UNDER A REVISED SPECIFICATION.
THE IFB SUBSEQUENTLY WAS READVERTISED ON JUNE 7, 1972. NINE BIDS
WERE OPENED ON JUNE 28, 1972, AND IT APPEARED THAT THE SECOND LOW BIDDER
WAS FLORIDA GENERAL. REVISED PARAGRAPH 6.3 AS CONTAINED IN THE NEW IFB
PROVIDED:
"ADVISORY NOTE. THE FOLLOWING CHEMICAL INGREDIENTS HAVE BEEN FOUND
TO PRODUCE SATISFACTORY BODIES ON A LIMITED QUANTITY RUN OF 2500 UNITS
USING A 4-CAVITY MOLD AND COMPRESSION MOLDING TECHNIQUES:
INGREDIENT APPROXIMATE PARTS BY WEIGHT
BUTYL 268 100.0
ZINC OXIDE 5.0
STEARIC ACID 1.0
HI SIL 215 40.0
ONCAR 23-A 10.0
DECHLORANE S 20.0
DECHLORANE S IS A REGISTERED TRADE NAME OF A HOOKER CHEMICAL COMPANY
PRODUCT NO LONGER PRODUCED BY HOOKER CHEMICAL COMPANY. DECHLORANE S WAS
USED AS A FIRE RETARDER.
SULFUR 1.0
TUEX 2.0
MBT 0.5
179.5
THE ADDITION OF TITANIUM DIOXIDE AND CARBON BLACK WERE USED TO
PROVIDE COMPOUND COLOR (GRAY) AS SPECIFIED IN FED-STD-595, COLOR NO.
36231. THIS ADVISORY NOTE IS FURNISHED FOR INFORMATION PURPOSES ONLY
AND IS NOT A REQUIREMENT OF THE CONTRACT. IT IS FURNISHED WITH THE
UNDERSTANDING THAT THE CONTRACTOR IS NOT REQUIRED TO FOLLOW THE NOTE,
THAT THE CONTRACTUAL REQUIREMENTS MUST BE MET REGARDLESS OF WHETHER OR
NOT THE CONTRACTOR USES THE NOTE, THAT THE GOVERNMENT MAKES NO WARRANTY
OR REPRESENTATIONS THAT USE OF THE NOTE WILL RESULT IN SUPPLIES
CONFORMING TO CONTRACTUAL REQUIREMENTS AND THE GOVERNMENT DOES NOT
WARRANT THE COMMERCIAL AVAILABILITY OF THE ABOVE LISTED INGREDIENTS, NOR
THAT THEY ARE APPLICABLE FOR OTHER MOLDING PROCESSES, AND THE GOVERNMENT
ASSUMES NO LIABILITY OF ANY KIND TO THE CONTRACTOR OR TO OTHERS
RESULTING FROM USE OF THIS NOTE."
FROM OUR REVIEW OF THE RECORD WE ARE UNABLE TO CONCLUDE THAT THE
DECISION TO CANCEL THE IFB WAS AN ABUSE OF ADMINISTRATIVE DISCRETION.
THE CONTRACTING OFFICER MADE THE DETERMINATION TO CANCEL THE ORIGINAL
INVITATION ONLY AFTER A CAREFUL CONSIDERATION OF ALL THE INFORMATION
AVAILABLE TO HIM, INCLUDING THE VIEWS EXPRESSED BY THE LEGAL OFFICE AND
ENGINEERING PERSONNEL, WHICH INDICATED THAT THE ORIGINAL INVITATION
CONTAINED INADEQUATE SPECIFICATIONS. RECENTLY, IN B-177123, NOVEMBER
27, 1972, WE HAD OCCASION TO STATE:
"OUR OFFICE HAS RECOGNIZED THAT CONTRACTING OFFICERS ARE VESTED WITH
A SUBSTANTIAL DEGREE OF DISCRETION IN DETERMINING WHETHER THE
GOVERNMENT'S INTERESTS REQUIRE THAT AN INVITATION BE CANCELED.
SEE 50 COMP. GEN. 464, 469-470 (1970). AND, WE WILL NOT QUESTION AN
AGENCY DETERMINATION TO CANCEL AN INVITATION UNLESS THE DISCRETION
EXERCISED CONSTITUTES AN ABUSE OF AUTHORITY. SEE 51 COMP. GEN. 426,
428-429 (1972). SINCE WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER'S
DETERMINATION WAS PATENTLY UNREASONABLE, NO BASIS EXISTS TO QUESTION THE
READVERTISEMENT OF THE PROCUREMENT."
THE FOREGOING QUOTATION HAS EQUAL APPLICATION TO THE IMMEDIATE
SITUATION. WE THEREFORE WILL NOT DISTURB THE CANCELLATION ACTION
ADMINISTRATIVELY TAKEN.
YOU HAVE CONTENDED FURTHER THAT IF THE FIRST SPECIFICATION WAS
DEFECTIVE THEN THE SECOND IS EQUALLY DEFECTIVE AND ALSO SHOULD BE
REVISED AND READVERTISED. THE BASIS FOR THIS CONTENTION IS THAT
GOVERNMENT PERSONNEL KNEW OF THE CURE CYCLE NECESSARY TO PRODUCE THE
GRENADE BODY ASSEMBLIES AND OF THE NUMBER OF CAVITIES THAT THE MOLDS
SHOULD CONTAIN. HOWEVER, THIS DATA WAS NOT INCLUDED IN THE
SPECIFICATION. YOU BASE THIS ON THE FACT THAT DURING THE COURSE OF THE
PRE-AWARD SURVEY MADE UNDER THE ORIGINAL IFB, FLORIDA GENERAL WAS
ADVISED THAT THE CURE TIME AND NUMBER OF CAVITIES IT PLANNED TO USE WERE
UNSATISFACTORY. HOWEVER, THE SPECIFICATION IS OF THE PERFORMANCE TYPE
UNDER WHICH THE MANNER OF PERFORMING IS LEFT TO THE JUDGMENT OF THE
CONTRACTOR. FURTHER BECAUSE THE IFB REQUIRED THAT THE MOLDS BE CAPABLE
OF PRODUCING 10,000 BODIES A MONTH, THE CURE TIME FOR THE INGREDIENTS
PLACED IN THE MOLD WOULD BE CRITICAL IN DECIDING THE NUMBER OF CAVITIES
IN THE MOLD. INFORMATION AS TO THE CURE TIME APPARENTLY CAN BE OBTAINED
WITHIN THE INDUSTRY, AND WE NOTE THAT FLORIDA GENERAL OBTAINED
INFORMATION IN THAT REGARD FROM A RUBBER COMPANY. TECHNICAL PERSONNEL
OF THE PROCUREMENT ACTIVITY HAD REASON TO CONCLUDE FROM DATA OBTAINED
FROM PRIOR PRODUCERS, ONE OF WHICH WAS A RUBBER COMPANY, THAT THE CURE
TIME IS LONGER THAN THAT REPRESENTED TO FLORIDA GENERAL BY THE RUBBER
COMPANY. MOREOVER, NO CONCRETE EVIDENCE HAS BEEN FURNISHED BY FLORIDA
GENERAL OR ITS RUBBER SUPPLIER TO ESTABLISH THAT ITS PROPOSED CURE CYCLE
WAS VALID. THEREFORE, THERE DOES NOT APPEAR TO BE INVOLVED A SITUATION
WHERE THE GOVERNMENT ALONE HAS THE TECHNICAL KNOWLEDGE OR WHERE THE
GOVERNMENT IS COMMITTED TO A SINGLE CURE CYCLE. IN THE CIRCUMSTANCES,
WE CANNOT CONCLUDE THAT THE SPECIFICATION WAS DEFICIENT FOR FAILING TO
INCLUDE DATA AS TO THE CURE TIME AND NUMBER OF CAVITIES.
ACCORDINGLY, THE PROTEST IS DENIED.
B-176420, JAN 4, 1973
BID PROTEST - PREPARATION OF SPECIFICATIONS - TIMELINESS OF PROTEST
DECISION DENYING THE PROTEST OF CRYOGENIC SERVICE CORPORATION AGAINST
ANY AWARD UNDER AN IFB ISSUED BY THE DIRECTORATE OF PROCUREMENT AND
PRODUCTION, SAN ANTONIO AIR MATERIEL AREA, KELLY AFB, TEX., FOR LIQUID
NEON PROPELLANT.
THE PREPARATION AND ESTABLISHMENT OF SPECIFICATIONS WHICH REFLECT THE
NEEDS OF THE GOVERNMENT ARE MATTERS PRIMARILY WITHIN THE JURISDICTION OF
THE PROCURING AGENCY AND WILL BE QUESTIONED BY GAO ONLY WHEN NOT
SUPPORTED BY SUBSTANTIAL EVIDENCE. 38 COMP. GEN. 190 (1958). MOREOVER,
QUESTIONS RELATING TO SPECIFICATIONS SHOULD BE RAISED BEFORE, NOT AFTER,
BID OPENING. 50 COMP. GEN. 193 (1970).
TO MR. R. CRAIG MCMANIGAL:
THIS IS IN REFERENCE TO THE PROTEST OF CRYOGENIC SERVICE CORPORATION
(CSC) AGAINST ANY AWARD IN CONNECTION WITH BIDS SUBMITTED AND OPENED ON
JUNE 30, 1972, IN RESPONSE TO SOLICITATION NO. F41608-72-B-1105 ISSUED
BY THE DEPARTMENT OF THE AIR FORCE, DIRECTORATE OF PROCUREMENT AND
PRODUCTION, SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS.
THE INVITATION FOR BIDS (IFB) FOR A BEST ESTIMATED QUANTITY (REQ) OF
1,920 LITERS OF PROPELLANT, LIQUID NEON, FSN 9135-800-1815, ON A
REQUIREMENTS BASIS, WAS ISSUED ON JUNE 2, 1972. SOLICITATION AMENDMENT
0001 WAS ISSUED ON JUNE 15, 1972, TO INCREASE THE BEQ TO A REVISED TOTAL
OF 3,600 LITERS. THE PROCUREMENT REQUIRED F.O.B. DESTINATION DELIVERIES
IN CONTRACTOR-FURNISHED DEWARS, DELIVERIES TO BE MADE WITHIN 15 WORKDAYS
AFTER RECEIPT OF A DELIVERY SCHEDULE UNLESS A LONGER PERIOD WAS
SPECIFIED. IN ADDITION, THE PROCUREMENT WAS STRUCTURED ON A SUBLINE
BASIS WHICH CONTEMPLATED MULTIPLE AWARDS.
RESPONSIVE BIDS WERE SUBMITTED BY FOUR BIDDERS AND WERE OPENED ON
JUNE 30, 1972. THE LOW BIDDER BY A SUBSTANTIAL AMOUNT ON EACH SUBLINE
ITEM WAS UNION CARBIDE CORPORATION, LINDE DIVISION, NEW YORK, NEW YORK.
CSC SUBMITTED THE HIGHEST BID PRICE ON EACH SUBLINE ITEM, EXCEPT ONE.
ALTHOUGH YOUR PROTEST WAS FILED BEFORE AWARD OF A CONTRACT, AWARD OF ALL
SUBLINE ITEMS WAS MADE TO UNION CARBIDE ON AUGUST 30, 1972, PURSUANT TO
ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.8(B)(3), FOLLOWING
NOTICE TO OUR OFFICE OF THE INTENTION TO MAKE AN IMMEDIATE AWARD
NOTWITHSTANDING THE PROTEST.
YOUR PROTEST IS TO THE EFFECT THAT AWARD OF A CONTRACT TO THE LOW
BIDDER WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT BECAUSE THE
LOW BIDDER PLANS TO SHIP THE LIQUID NEON PROPELLANT BY COMMON CARRIER -
A SHIPMENT METHOD WHICH YOU CONTEND HAS RESULTED IN COSTLY EVAPORATION
LOSS OF PROPELLANT WHEN DELIVERY IS DELAYED. IN THIS REGARD, WE
UNDERSTAND THAT LIQUID NEON PROPELLANT HAS A HIGH EVAPORATION RATE WITH
THE RESULT THAT IT WILL "BOIL OFF" AS THE SHIPPING CONTAINER ABSORBS
HEAT. IF DELIVERY IS NOT TIMELY ACCOMPLISHED, THEREFORE, THE QUANTITY
RECEIVED WILL BE LESS THAN THAT SHIPPED WITH THE POSSIBILITY THAT THE
CONTRACTOR-FURNISHED DEWAR MIGHT BE DELIVERED EMPTY. IT IS YOUR
POSITION THAT THIS PROBLEM HAS BEEN PARTICULARLY ACUTE AT THE NEW MEXICO
CONTRACT LOCATIONS WHERE YOU MAINTAIN THAT TIMELY DELIVERIES CAN ONLY BE
MAINTAINED BY THE USE OF COMPANY OWNED TRUCKS, A SERVICE OFFERED ONLY BY
CSC. THEREFORE, YOU CONCLUDE THAT AWARD TO CSC AT ITS HIGHER PRICE
WOULD BENEFIT THE GOVERNMENT IN VIEW OF ITS ASSURANCE OF TIMELY
DELIVERY.
FURTHER, BY LETTER DATED OCTOBER 2, 1972, MR. E. DEL SMITH, CSC'S
WASHINGTON REPRESENTATIVE, STATED THAT IT WOULD BE IN THE BEST INTEREST
OF THE GOVERNMENT TO CONDUCT A THOROUGH AUDIT AT THE END OF THE PRESENT
CONTRACT PERIOD AND THAT THE AIR FORCE'S NEXT FISCAL YEAR PROPELLANT
CONTRACT SHOULD BE ON A SMALL-BUSINESS SET-ASIDE BASIS.
THE AIR FORCE ADMINISTRATIVE REPORT, ON THE OTHER HAND, STATES THAT
THE SOLICITATION REQUIREMENT FOR DELIVERY "WITHIN 15 WORKDAYS AFTER
CONTRACTOR RECEIPT OF A DELIVERY SCHEDULE" IS ADEQUATE FOR THE
GOVERNMENT'S NEEDS AND CAN BE MET BY MEANS OF COMMON CARRIER SHIPMENT,
ALSO CONTEMPLATED BY THE SOLICITATION TERMS. THEREFORE, IT IS CONCLUDED
THAT PAYMENT OF A HIGHER PRICE TO CSC FOR ITS QUICKER DELIVERY
CAPABILITY IS NOT WARRANTED. THE REPORT FURTHER STATES THAT THERE HAS
BEEN NO INFORMATION RELATIVE TO INADEQUATE PERFORMANCE OR DELINQUENT
DELIVERIES BY THE PREVIOUS CONTRACTOR EXCEPT FOR ONE INSTANCE WHERE A
USING ACTIVITY (HOLLOMAN AIR FORCE BASE, NEW MEXICO) INDICATED SOME
DISSATISFACTION WITH PREVIOUS SUPPLY ACTIONS, BUT NO MONETARY LOSS TO
THE GOVERNMENT COULD BE ESTABLISHED. IN THIS REGARD, IT IS REPORTED
THAT A SMALL QUANTITY OF 25 LITERS WAS PROCURED ON AN EMERGENCY BASIS AT
INCREASED COST FROM CSC AT THAT TIME. IT IS CONCLUDED, HOWEVER, THAT
THIS EMERGENCY PROCUREMENT REPRESENTED AN EXCEPTION TO USUAL PROCUREMENT
PROCEDURES. IT IS FURTHER STATED THAT UNION CARBIDE, THE SUCCESSFUL
BIDDER, IS THE LEADING CRYOGENICS SUPPLIER TO THE GOVERNMENT AND HAS
PERFORMED ADEQUATELY ON A PRIOR NEON CONTRACT, AND THAT UNION CARBIDE
VERIFIED ITS BID PRICES BEFORE AWARD OF THE SUBJECT CONTRACT.
AS INDICATED ABOVE, YOUR PROTEST CHALLENGES THE VALIDITY OF THE
SOLICITATION SPECIFICATIONS WITH RESPECT TO DELIVERY REQUIREMENTS, WHILE
THE PROCUREMENT OFFICIALS HAVE DETERMINED THAT THE MANNER OF DELIVERY
SPECIFIED IN THE SOLICITATION IS SUFFICIENT TO MEET THE GOVERNMENT'S
MINIMUM NEEDS. IN THIS REGARD, OUR OFFICE HAS CONSISTENTLY TAKEN THE
POSITION THAT THE PREPARATION AND ESTABLISHMENT OF SPECIFICATIONS TO
REFLECT THE NEEDS OF THE GOVERNMENT ARE MATTERS PRIMARILY WITHIN THE
JURISDICTION OF THE PROCUREMENT AGENCY, TO BE QUESTIONED BY OUR OFFICE
ONLY WHEN NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. 38 COMP. GEN. 190
(1958); 37 ID. 757 (1958); 17 ID. 554 (1938). WE RECOGNIZE THAT
GOVERNMENT PROCUREMENT OFFICIALS, WHO ARE FAMILIAR WITH THE CONDITIONS
UNDER WHICH SUPPLIES OR EQUIPMENT WILL BE USED AND WITH PAST RESULTS
OBTAINED IN THE USE OF SIMILAR EQUIPMENT, ARE GENERALLY IN THE BEST
POSITION TO KNOW THE GOVERNMENT'S NEEDS AND BEST ABLE TO DRAFT
APPROPRIATE SPECIFICATIONS. THUS, WE HAVE HELD THAT THE GOVERNMENT
CANNOT BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE
SPECIFICATIONS WHICH WOULD HAVE THE EFFECT OF REQUIRING ACCEPTANCE OF
GOODS NOT MEETING THE CONSIDERED NEEDS OF THE PROCUREMENT AGENCY.
FURTHERMORE, QUESTIONS RELATING TO SPECIFICATIONS SHOULD BE RAISED
BEFORE, NOT AFTER, THE OPENING OF BIDS. 50 COMP. GEN. 193 (1970); 36
COMP. GEN. 251 (1956); 16 ID. 38 (1936). ACCORDINGLY, WE CONCLUDE THAT
THE ACTIONS OF THE PROCUREMENT OFFICIALS IN THIS INSTANCE ARE NOT
SUBJECT TO QUESTION BY OUR OFFICE.
WITH RESPECT TO CSC'S REQUEST FOR A THOROUGH AUDIT AT THE END OF THE
PRESENT CONTRACT PERIOD, THIS OFFICE DOES NOT CONSIDER IT APPROPRIATE TO
CONDUCT AN AUDIT AT THIS TIME ON THE BASIS OF CSC'S BARE ALLEGATION THAT
THE CONTRACT CANNOT BE SUCCESSFULLY PERFORMED AT THE CONTRACT PRICE
ACCEPTED BY THE GOVERNMENT, ESPECIALLY IN VIEW OF THE FINDING BY THE
CONTRACTING OFFICER, UNREFUTED BY CSC, THAT NO SIGNIFICANT LOSSES TO THE
GOVERNMENT HAVE OCCURRED BECAUSE OF PAST CONTRACTOR PERFORMANCE.
FURTHER, THE CONTRACT PROVIDES CONTRACTOR SANCTIONS FOR FAILURE TO
PERFORM IN ACCORDANCE WITH THE CONTRACT TERMS WHICH WOULD SEEM TO
ADEQUATELY PROTECT THE GOVERNMENT'S INTERESTS IN THE EVENT OF LATE OR
INSUFFICIENT DELIVERIES.
IN CONNECTION WITH CSC'S RECOMMENDATION THAT A SMALL-BUSINESS
SET-ASIDE SHOULD BE ADVERTISED FOR THE NEXT CONTRACT PERIOD, REFERENCE
IS MADE TO ARMED SERVICES PROCUREMENT REGULATION 1-706.1(A) WHICH
PROVIDES THAT THE DETERMINATION TO MAKE A SET-ASIDE IS TO BE MADE BY THE
CONTRACTING OFFICER NORMALLY UPON INITIATION BY THE SMALL-BUSINESS
SPECIALIST. THEREFORE, CSC SHOULD ADDRESS ITS RECOMMENDATION FOR A
SET-ASIDE ACCORDINGLY.
ACCORDINGLY, THE PROTESTS OF CRYOGENIC SERVICE CORPORATION ARE
DENIED.
B-176771, JAN 4, 1973
BID PROTEST - NONRESPONSIVENESS - AFFIRMATIVE ACTION REQUIREMENTS
DECISION DENYING THE PROTEST OF NEVADA PAVING, INC., AGAINST
REJECTION OF ITS BID UNDER AN IFB ISSUED BY THE BUREAU OF RECLAMATION,
SACRAMENTO, CALIF., FOR THE PAVING OF THE STAMPEDE DAM ACCESS ROAD,
WASHOE PROJECT.
AFFIRMATIVE ACTION REQUIREMENTS ARE MATERIAL, AND THEIR LANGUAGE
REQUIRES A BIDDER TO COMMIT ITSELF TO THEM PRIOR TO BID OPENING IN THE
MANNER SPECIFIED IN THE IFB. A BIDDER'S FAILURE TO MAKE SUCH A
COMMITMENT MAY NOT BE WAIVED, NOR MAY SUCH A DEFICIENCY BE CORRECTED
AFTER BID OPENING. 50 COMP. GEN. 844 (1971).
TO NEVADA PAVING, INCORPORATED:
REFERENCE IS MADE TO YOUR TELEGRAM DATED AUGUST 16, 1972, AND A
LETTER OF THE SAME DATE FROM THE ASSOCIATED GENERAL CONTRACTORS OF
AMERICA, PROTESTING AGAINST REJECTION OF YOUR BID UNDER SPECIFICATION
NO. 200C-856, FOR THE PAVING OF THE STAMPEDE DAM ACCESS ROAD, WASHOE
PROJECT, NEVADA-CALIFORNIA, ISSUED BY THE BUREAU OF RECLAMATION,
DEPARTMENT OF INTERIOR, SACRAMENTO, CALIFORNIA.
UNDER THE INSTANT INVITATION FOR BIDS (IFB), THREE CONTRACTORS
SUBMITTED BIDS WITH NEVADA PAVING COMPANY (NEVADA) BEING THE APPARENT
LOW BIDDER. HOWEVER, THE BIDS OF NEVADA AND THE TWO OTHER BIDDERS WERE
ALL REJECTED FOR BEING NONRESPONSIVE IN FAILING TO COMPLY WITH THE EQUAL
EMPLOYMENT OPPORTUNITY AND AFFIRMATIVE ACTION REQUIREMENTS OF THE IFB.
THE CONTRACT WAS TO BE PERFORMED IN THE GEOGRAPHIC AREA SUBJECT TO
THE GREATER SACRAMENTO AREA PLAN. THE IFB CONTAINED THE EQUAL
EMPLOYMENT OPPORTUNITY AFFIRMATIVE ACTION REQUIREMENTS BID CONDITIONS
WHICH CONSISTED OF PARTS I AND II. PART I APPLIED TO THOSE BIDDERS WHO
WERE SIGNATORIES TO THE GREATER SACRAMENTO PLAN, AND PART II APPLIED TO
BIDDERS WHO WERE NOT SIGNATORIES TO THE PLAN.
NONE OF THESE BIDDERS WERE SIGNATORIES TO THE GREATER SACRAMENTO ARE
PLAN AND THEREFORE, ALL WERE SUBJECT TO PART II OF THE BID CONDITIONS.
PART II REQUIRED THAT A BIDDER SUBMIT WITH HIS BID AN AFFIRMATIVE
ACTION PLAN. THE PLAN MUST SET FORTH GOALS AND TIMETABLES OF MINORITY
MANPOWER UTILIZATION WITHIN RANGES LISTED IN THE BID CONDITIONS.
THE OTHER TWO BIDDERS DID NOT SUBMIT ANY AFFIRMATIVE ACTION PLAN WITH
THEIR BIDS. NEVADA SUBMITTED WITH ITS BID A COPY OF A MULTI-EMPLOYER
AFFIRMATIVE ACTION PROGRAM DESIGNATED AS "THE NORTHERN NEVADA
CONSTRUCTION OPPORTUNITY PROGRAM." ALTHOUGH THIS PROGRAM WAS DESIGNED TO
INCREASE MINORITY PERSONNEL PARTICIPATION IN THE CONSTRUCTION INDUSTRY,
IT WAS DETERMINED THAT THE PLAN DID NOT MEET THE REQUIREMENTS OF PART II
OF THE BID CONDITIONS.
THE PURPOSE OF THE MULTI-EMPLOYERS AFFIRMATIVE ACTION AS STATED IN
THE AGREEMENT WAS TO INCREASE MINORITY GROUP PERSONNEL IN THE
CONSTRUCTION INDUSTRY "WITHIN THE GEOGRAPHICAL BOUNDARIES OF THE
NORTHERN NEVADA BUILDING TRADES COUNCIL."
THE SPECIFIC PORTION OF THE MULTI-EMPLOYERS AFFIRMATIVE ACTION
PROGRAM WHICH DEALT WITH GOALS READS AS FOLLOWS:
"GOALS
"THIS AGREEMENT IS TO INCREASE MINORITY EMPLOYMENT IN THE
CONSTRUCTION INDUSTRY, THE A.G.C. THIRTEEN (13) MEMBER COMPANIES, AND
THE BUILDING TRADES COUNCIL NINE (9) UNIONS HAVE PLEDGED 30 IMMEDIATE
SLOTS. OUR GOALS ARE TO START WITH TEN (10) MINORITIES EACH MONTH WITH
INTENTIONS TO DEVELOP OUR PRESENT PROGRAM TO INCLUDE NOT ONLY
PREAPPRENTICESHIP BUT QUALIFIED APPRENTICE WHEN RECRUITED, ALSO,
ON-THE-JOB TRAINING AND UP-GRADING.
"PROJECTION
"IS TO INDENTURE APPROXIMATELY 30 MINORITY GROUP PERSONS IN THE
CONSTRUCTION INDUSTRY A YEAR."
PART II OF THE BID CONDITIONS SET FORTH THE ACCEPTABLE RANGES FOR ALL
TRADES TO BE UTILIZED ON THE PROJECT TO BE:
UNTIL 12/31/72 2.5% - 5%
FROM 1/1/73 UNTIL 12/31/73 5.0% 7.5%
FROM 1/1/74 UNTIL 12/31/74 7.5% 10%
FROM 1/1/75 UNTIL 12/31/75 10.0% 12.5%
FROM 1/1/76 UNTIL 12/31/76 12.5% 15%
IT APPEARS DOUBTFUL IF THE GOALS SET BY THE 13 MEMBER COMPANIES WOULD
FULFILL THE RANGES CALLED FOR UNDER THE SOLICITATION. ALSO THE PLAN
ONLY REQUIRED SUBCONTRACTORS WITH SUBCONTRACTS OF OVER $500,000 TO
SUBMIT AN EQUAL EMPLOYMENT OPPORTUNITY AFFIRMATIVE ACTION PROGRAM, WHILE
THE BID CONDITIONS REQUIRED ALL SUBCONTRACTORS TO DO SO.
IN 50 COMP. GEN. 844 (1971) AND B-174932, MARCH 3, 1972, THIS OFFICE
CONSIDERED SOLICITATIONS WHICH INCLUDED AFFIRMATIVE ACTION REQUIREMENTS
SIMILAR TO THOSE IN THE INSTANT IFB. IN THE AFOREMENTIONED DECISIONS,
WE HELD THAT SUCH REQUIREMENTS ARE MATERIAL AND THE LANGUAGE REQUIRED A
BIDDER TO COMMIT ITSELF, PRIOR TO BID OPENING, TO THE AFFIRMATIVE ACTION
REQUIREMENTS, IN THE MANNER SPECIFIED IN THE SOLICITATION. WE ALSO HELD
THAT A BIDDER WHO FAILS TO MAKE SUCH A COMMITMENT IN ITS BID MAY NOT
HAVE THE DEVIATION WAIVED, NOR MAY THE BIDDER BE ALLOWED TO CORRECT THE
DEFICIENCY AFTER BID OPENING IN AN EFFORT TO RENDER THE BID ELIGIBLE FOR
AWARD. B-175099, APRIL 13, 1972.
NEVADA NEITHER COMMITTED ITSELF TO THE AFFIRMATIVE ACTION
REQUIREMENTS AS SPECIFIED IN THE BID CONDITIONS NOR DID THE SEPARATE
PLAN WHICH WAS SUBMITTED WITH THE BID MEET THE AFFIRMATIVE ACTION
REQUIREMENTS SET FORTH IN THE SOLICITATION.
FOR THE REASONS STATED, WE MUST CONCLUDE THAT THE BID OF NEVADA WAS
PROPERLY REJECTED AND, THEREFORE, THE PROTEST IS DENIED.
B-177132, JAN 4, 1973
CIVILIAN PERSONNEL - OVERPAYMENTS - EMPLOYEE FAULT
DECISION SUSTAINING THE DENIAL OF THE REQUEST OF KENNETH R. FRITH FOR
WAIVER OF AN OVERPAYMENT OF POST DIFFERENTIAL ALLOWANCE CAUSED BY
ADMINISTRATIVE ERROR.
AN EMPLOYEE WHO HAS A SIGNIFICANT INCREASE IN HIS PAY WHICH WOULD
REQUIRE A REASONABLE MAN TO MAKE INQUIRY CONCERNING THE CORRECTNESS OF
HIS PAY, BUT WHO DOES NOT MAKE SUCH INQUIRY, CANNOT BE SAID TO BE
WITHOUT FAULT IN THE MATTER, AND NO WAIVER OF OVERPAYMENTS UNDER SUCH
CIRCUMSTANCES CAN BE GRANTED. 4 CFR 91.5.
TO MR. KENNETH R. FRITH:
THIS IS IN REFERENCE TO YOUR LETTER OF JULY 31, 1972, FORWARDED HERE
BY LETTER DATED AUGUST 18, 1972, FROM MR. RAYMOND J. LEFFLER, ASSISTANT
CHIEF, CENTRAL ACCOUNTING DIVISION, OFFICE OF FINANCIAL MANAGEMENT,
AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, D.C., IN WHICH YOU
REQUEST REVIEW OF THE DENIAL OF YOUR CLAIM FOR WAIVER OF OVERPAYMENT OF
PAY IN THE GROSS AMOUNT OF $2,398.08 BY OUR TRANSPORTATION AND CLAIMS
DIVISION SETTLEMENT OF MAY 11, 1972.
THE INDEBTEDNESS RESULTED FROM OVERPAYMENT OF POST DIFFERENTIAL
ALLOWANCE DUE TO ADMINISTRATIVE ERROR. THE RECORD REFLECTS THAT YOU
DEPARTED YOUR OLD DUTY STATION AT SAIGON, SOUTH VIETNAM, PURSUANT TO
TRANSFER ORDERS ON MARCH 3, 1969, FOR YOUR HOME LEAVE ADDRESS IN THE
UNITED STATES. AT THE CONCLUSION OF HOME LEAVE, YOU WERE DETAILED TO
SANTO DOMINGO, DOMINICAN REPUBLIC, FOR A PERIOD NOT TO EXCEED 90 DAYS
AND ARRIVED THERE ON MAY 9, 1969. UPON COMPLETION OF THE DETAIL ON
AUGUST 6, 1969, YOU DEPARTED THE DOMINICAN REPUBLIC AND ARRIVED AT YOUR
NEW DUTY STATION IN LIMA, PERU, ON AUGUST 27, 1969. YOUR POSITION WAS
THAT OF BUDGET AND ACCOUNTING OFFICER.
WHILE IN SOUTH VIETNAM YOU RECEIVED A POST DIFFERENTIAL ALLOWANCE AT
THE RATE OF 25 PERCENT OF YOUR BASE PAY, WHICH DIFFERENTIAL SHOULD HAVE
BEEN TERMINATED ON THE DATE OF DEPARTURE. ALTHOUGH YOU WERE ENTITLED TO
A POST DIFFERENTIAL ALLOWANCE AT THE RATE OF 10 PERCENT OF YOUR BASE PAY
WHILE ON DETAIL IN SANTO DOMINGO, IT WAS NOT TO COMMENCE UNTIL JUNE 20,
1969, THE FORTY-THIRD DAY OF YOUR DUTY AT THAT POST. HOWEVER, THROUGH
ERROR A 25 PERCENT POST DIFFERENTIAL ALLOWANCE, AS WAS PAID IN SOUTH
VIETNAM, WAS RECOMMENCED FROM THE BEGINNING OF THE JUNE 15, 1969 PAY
PERIOD, AND A RETROACTIVE ADJUSTMENT MADE TO ALLOW POST DIFFERENTIAL AT
THE 25 PERCENT RATE FOR TWO PRIOR PAY PERIODS, AND SIX DAYS. THE ERROR
RESULTED FROM A MEMORANDUM DATED JUNE 17, 1969, TO THE CENTRAL PAYROLL
PROCESSING SECTION SIGNED BY YOUR IMMEDIATE SUPERVISOR. THE RECORD
INDICATES THAT THIS MEMORANDUM WAS THE IMMEDIATE RESULT OF AN INQUIRY
MADE BY YOU CONCERNING POST DIFFERENTIAL. THE MEMORANDUM READ AS
FOLLOWS:
"SUBJECT: MR. KENNETH R. FRITH - EMPL. #156128
"BE ADVISED THAT SUBJECT EMPLOYEE ARRIVED AT POST ON MAY 9, 1969 AND
THAT HE HAS NOT BEEN PAID FOR POST DIFFERENTIAL SINCE HIS ARRIVAL.
PLEASE CORRECT SAME ON NEXT PAY PERIOD."
ONCE STARTED THESE OVERPAYMENTS CONTINUED UNTIL DECEMBER 27, 1969,
WHEN THE EMBASSY IN LIMA REQUESTED THAT THE POST DIFFERENTIAL PAYMENTS
BE TERMINATED. THIS REQUEST, IT APPEARS, RESULTED FROM YOUR REPORTING
THE INCORRECT PAYMENT OF POST DIFFERENTIAL AFTER RECEIPT AND EXAMINATION
OF YOUR EARNINGS STATEMENT. YOU SAY THAT EARNINGS STATEMENTS WERE NOT
RECEIVED BY YOU UNTIL LATE NOVEMBER OR EARLY DECEMBER 1969. AN AUDIT
REVEALED AN OVERPAYMENT OF $2,398.08, AND COLLECTION ACTION WAS
INITIATED. YOU REQUESTED WAIVER OF COLLECTION OF THE ERRONEOUS PAYMENT
UNDER THE PROVISIONS OF 5 U.S.C. SEC 5584. OUR TRANSPORTATION AND
CLAIMS DIVISION DENIED THE WAIVER REQUEST ON THE BASIS OF EMPLOYEE FAULT
AND CONCLUDED THAT THE BANK STATEMENT REFLECTING THE $838.41 PAYMENT WAS
SUFFICIENT NOTICE OF A PAY IRREGULARITY TO HAVE CAUSED INQUIRY BY YOU
INTO THE CORRECTNESS OF YOUR PAY.
IN SUPPORT OF YOUR APPEAL YOU DENY YOU HAD ANY KNOWLEDGE OF THE
STATUS OF YOUR PAY, WHICH WAS BEING FORWARDED DIRECTLY TO A MICHIGAN
BANK, UNTIL THE BANK STATEMENTS WERE BROUGHT TO YOU BY YOUR WIFE DURING
HER VISIT TO THE DOMINICAN REPUBLIC IN MID-JULY 1969. THE RECORD
INDICATES SHE ARRIVED THERE JULY 12, 1969. WHILE POSTING RECEIPTS IN
YOUR CHECK REGISTER, YOU RECALL NOTICING THAT FOUR CHECKS FOR PAY
PERIODS EIGHT THROUGH ELEVEN WERE IN THE AMOUNT OF $439.92 AND ONE CHECK
FOR PAY PERIOD TWELVE WAS FOR $838.41. YOU FURTHER STATE THAT THE CHECK
FOR PAY PERIOD THIRTEEN OF $55,.79, IDENTICAL IN AMOUNT TO THE LAST TWO
CHECKS YOU RECEIVED IN VIETNAM AT THE 25 PERCENT POST DIFFERENTIAL
ALLOWANCE RATE, WAS POSTED IN YOUR CHECK REGISTER BY YOUR WIFE AND WAS
NOT SEEN BY YOU.
THIS, YOU MAINTAIN, REFUTES OUR TRANSPORTATION AND CLAIMS DIVISION
CONCLUSION THAT RECEIPT OF A CHECK IN THE SAME AMOUNT AS CHECKS RECEIVED
IN VIETNAM, WHERE THE POST DIFFERENTIAL ALLOWANCE WAS HIGHER, SHOULD
HAVE PLACED YOU ON NOTICE THAT AN ERROR HAD BEEN MADE.
FINALLY, YOU CLAIM THAT PAY ADJUSTMENTS RESULTING FROM YOUR
REASSIGNMENTS AND THE FEDERAL SALARY INCREASE OF JULY 1969, DURING THE
PERIOD WHEN THE OVERPAYMENTS BEGAN, CAUSED YOU TO BE UNAWARE THAT YOUR
PAY WAS INCORRECT. FOR THESE REASONS YOU BELIEVE THE GOVERNMENT SHOULD
WAIVE ITS CLAIM TO THE OVERPAYMENT.
WAIVER OF INDEBTEDNESS CAUSED BY ERRONEOUS PAYMENTS IS GOVERNED BY 5
U.S.C. SEC 5584(B)(1) WHICH PROVIDES IN PERTINENT PART:
"(B) THE COMPTROLLER GENERAL *** MAY NOT EXERCISE HIS AUTHORITY UNDER
THIS SECTION TO WAIVE ANY CLAIM -
"(1) IF, IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM,
AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH
ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN
OBTAINING A WAIVER OF THE CLAIM ***"
IMPLEMENTING REGULATIONS FOR THIS STATUTE ARE SET FORTH IN 4 CFR PART
91. SECTION 91.5 PROVIDES IN PERTINENT PART:
"*** ANY SIGNIFICANT UNEXPLAINED INCREASE IN AN EMPLOYEE'S PAY WHICH
WOULD REQUIRE A REASONABLE MAN TO MAKE INQUIRY CONCERNING THE
CORRECTNESS OF HIS PAY ORDINARILY WOULD PRECLUDE A WAIVER WHEN THE
EMPLOYEE FAILS TO BRING THE MATTER TO THE ATTENTION OF APPROPRIATE
OFFICIALS. ***"
PURSUANT TO THE ABOVE THE STANDARD AGAINST WHICH AN EMPLOYEE'S
CONDUCT MUST BE MEASURED IS THAT OF THE "REASONABLE MAN." THE ISSUE
RAISED IS WHETHER IN VIEW OF THE CIRCUMSTANCES YOU SHOULD REASONABLY
HAVE MADE INQUIRY CONCERNING YOUR PAY AS REFLECTED BY YOUR BANK
STATEMENTS.
IT IS OUR VIEW, CONSIDERING THE FACTS HEREINAFTER RELATED, THAT YOU
SHOULD HAVE MADE IMMEDIATE INQUIRY UPON EXAMINATION OF YOUR BANK
STATEMENT IN MID-JULY, WHICH TIME YOU SAY WAS THE FIRST OPPORTUNITY YOU
HAD AND DID REVIEW SUCH STATEMENTS. THE BANK STATEMENTS INDICATED THAT
YOU HAD RECEIVED FOUR PAYROLL CHECKS OF $439.92 EACH FOR PAY PERIODS
EIGHT THROUGH ELEVEN, AND A FIFTH CHECK IN THE AMOUNT OF $838.41 FOR PAY
PERIOD TWELVE. THIS FIFTH CHECK, MUCH GREATER IN AMOUNT THAN PREVIOUS
CHECKS, REPRESENTS A SIGNIFICANT UNEXPLAINED INCREASE IN PAY, WHICH
WOULD REQUIRE A REASONABLE MAN TO MAKE INQUIRY CONCERNING THE
CORRECTNESS OF SUCH PAYMENT AND THEREFORE CONSTITUTES SUFFICIENT BASIS
TO PRECLUDE WAIVER WHERE SUCH INQUIRY WAS NOT MADE. ALTHOUGH PAYMENTS
COVERING LATER PAY PERIODS WERE ALSO ERRONEOUS AND SHOULD HAVE WARRANTED
YOUR INQUIRY, THE PAYMENT FOR PAY PERIOD TWELVE WAS SUFFICIENT TO ALERT
YOU THAT AN ERROR HAD BEEN MADE.
UNDER THE CIRCUMSTANCES IT CANNOT BE SAID THAT YOU WERE WITHOUT FAULT
IN THE MATTER AND ACCORDINGLY, THE ACTION BY OUR TRANSPORTATION AND
CLAIMS DIVISION IN DENYING YOUR REQUEST FOR WAIVER OF THE ERRONEOUS
OVERPAYMENT WAS PROPER AND IS HEREBY SUSTAINED.
B-175138, JAN 3, 1973
BID PROTEST - CANCELLATION OF RFP - PERISHABLE SUBSISTENCE ITEMS - U.S.
END PRODUCTS - PRICE DIFFERENTIAL - OFFER PREPARATION EXPENSES
DENIAL OF PROTEST BY OLD DOMINION DAIRY PRODUCTS, INC., AGAINST THE
CANCELLATION OF AN RFP ISSUED BY THE DEPARTMENT OF THE AIR FORCE FOR
FILLED MILK AT TORREJON AFB AND ZARAGOZA AFB, SPAIN, AND DENYING THE
CLAIM FOR DAMAGES INCURRED BY REASON OF THE INVESTMENT OF TIME AND MONEY
IN PREPARING AN OFFER UNDER THIS RFP.
A RFP MAY BE CANCELLED WHEN IT IS DETERMINED THAT THE SUPPLIES OR
SERVICES ARE NO LONGER REQUIRED, B-169492, JULY 27, 1970. THIS
DETERMINATION IS PRIMARILY WITHIN THE PROCURING AGENCY'S DISCRETION, AND
WILL NOT BE DISTURBED IN THE ABSENCE OF CLEAR PROOF OF ABUSE OF
DISCRETION. 50 COMP. GEN. 464 (1970). ALSO, WHOLE MILK IS A PERISHABLE
SUBSISTENCE ITEM WITHIN THE MEANING OF ASPR 6-805.2(A)(IV) SO THAT ITS
PROCUREMENT FOR USE OUTSIDE THE UNITED STATES IS NOT RESTRICTED TO U.S.
END PRODUCTS. MOREOVER, SINCE THE PRICE DIFFERENTIAL BETWEEN FILLED AND
WHOLE MILK IS RECOVERED THROUGH COMMISSARY RESALE, THE DIFFERENTIAL DOES
NOT AFFECT THE AGENCY'S RIGHT TO PURCHASE THAT MILK WHICH IT HAS
DETERMINED WOULD BEST FILL ITS NEEDS.
EXPENSES FOR PREPARATION OF AN OFFER CAN BE RECOVERED ONLY WHEN IT IS
CONVINCINGLY SHOWN THAT THERE WAS A FRAUDULENT INDUCEMENT FOR BIDS OR
OFFERS, WITH THE INTENTION TO DISREGARD ALL OFFERS EXCEPT THE ONE TO
WHOM IT WAS INTENDED TO AWARD THE CONTRACT, WHETHER IT WAS THE LOWEST
RESPONSIVE OFFEROR OR NOT. HEYER PRODUCTS COMPANY, INC. V. UNITED
STATES, 135 CT. CL. 63.
TO OLD DOMINION DAIRY PRODUCTS, INC.:
FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE CANCELLATION OF
REQUEST FOR PROPOSALS (RFP) NO. F61308-72-R-0001, ISSUED BY THE
DEPARTMENT OF THE AIR FORCE FOR THE PROCUREMENT OF FILLED MILK AT THE
TORREJON AND ZARAGOZA AIR FORCE BASES IN SPAIN, AND AGAINST THE MANNER
IN WHICH PROCUREMENTS OF A SIMILAR NATURE HAVE BEEN HANDLED IN THE PAST.
YOU ALSO REQUEST THAT YOUR FIRM BE ALLOWED RELIEF FOR THE DAMAGES YOU
HAVE INCURRED BY REASON OF THE INVESTMENT OF TIME AND MONEY IN
CONNECTION WITH THE PREPARATION OF YOUR OFFER UNDER THE SUBJECT RFP.
WHILE YOU HAVE GIVEN SEVERAL REASONS TO SUPPORT YOUR PROTEST, THEY
CAN BE SUMMARIZED AS FOLLOWS: (1) THERE WAS NO LACK OF A REQUIREMENT
FOR THE PRODUCT SO AS TO JUSTIFY CANCELLATION PURSUANT TO THE AUTHORITY
OF PARAGRAPH 2-209 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR);
(2) THE PROCUREMENT OF FRESH MILK FROM A FOREIGN SOURCE IS IN SPECIFIC
VIOLATION OF ASPR 6-805.1 WHICH RESTRICTS PROCUREMENT OF THIS ITEM TO
UNITED STATES END PRODUCTS; AND, (3) THE PRICES AT WHICH OLD DOMINION
HAD PROPOSED TO SUPPLY FILLED MILK PRODUCTS ARE SUBSTANTIALLY LOWER THAN
THOSE PRICES CURRENTLY PAID FOR FRESH MILK.
FROM THE RECORD, INCLUDING OUR INDEPENDENT INVESTIGATION OF THIS
MATTER, THE FOLLOWING FACTS WERE DISCLOSED CONCERNING PROCUREMENTS FOR
FILLED MILK GENERALLY, THE CIRCUMSTANCES WHICH GAVE RISE TO THE DECISION
TO CHANGE FROM FILLED TO FRESH MILK, AND THE RESULTANT CANCELLATION OF
THE SUBJECT RFP.
THE 16TH AIR FORCE HAS THREE COMPONENT BASES IN SPAIN: TORREJON,
ZARAGOZA, AND MORON. PRIOR TO APRIL 1, 1972, U.S. CONTRACTORS SUPPLIED
EACH BASE WITH MILK PRODUCTS THAT WERE RECOMBINED IN SPAIN FROM U.S. RAW
MATERIALS. UNITED DAIRY EQUIPMENT COMPANY (UDECO) SUPPLIED TORREJON AND
ZARAGOZA AIR BASES (AB) FROM ITS PLANT AT TORREJON. OLD DOMINION
SUPPLIED MORON AB FROM A PLANT AT ROTA, SPAIN. UDECO OWNED AND OPERATED
THE PLANT AT TORREJON. THE U.S. GOVERNMENT PROVIDED OCEAN
TRANSPORTATION OF THE RAW MATERIALS PROCURED BY UDECO, IN ADDITION TO
PROVIDING A BUILDING FOR THE EQUIPMENT AND PAYING FOR THE REQUIRED
UTILITIES.
WITH RESPECT TO THE MANNER IN WHICH PRIOR PROCUREMENTS WERE HANDLED,
THE CANCELLATION OF RFP NO. F61208-69-R-0001 IN 1968 WAS OCCASIONED BY
WORSENING DIPLOMATIC RELATIONS BETWEEN OUR GOVERNMENT AND THAT OF SPAIN.
AT THE TIME OF ITS CANCELLATION OLD DOMINION, WHICH HAD NOT SUBMITTED
THE LOWEST PROPOSAL, STATED: "WE APPRECIATE FULLY THE EMERGENCY
SITUATION PRESENT AND WE DO NOT INTEND TO CRITICIZE IN ANY MANNER THE
WAY THE BIDDING WAS HELD AS IT WAS A UNIQUE SITUATION."
SUBSEQUENTLY, AIR FORCE PERSONNEL AND THEIR DEPENDENTS AT TORREJON
AND ZARAGOZA BASES MADE NUMEROUS COMPLAINTS ABOUT THE TASTE OF THE MILK.
THE COMPLAINTS WERE IN THE FORM OF STATEMENTS TO THE INSPECTOR GENERAL,
CONGRESSMEN, AND THE SECRETARY OF DEFENSE, AS WELL AS CRITICAL LETTERS
TO NEWS MEDIA. COMMISSARY CUSTOMERS AT TORREJON AB EXPRESSED ALMOST
UNANIMOUS DISSATISFACTION WITH FILLED MILK WHEN SURVEYED IN NOVEMBER
1970.
IN NOVEMBER 1971, A TECHNICAL EXPERT FROM THE U.S. ARMY NATICK
LABORATORIES, NATICK, MASSACHUSETTS, ALSO COMMENTED ON THE BAD TASTE OF
THE MILK AND IDENTIFIED SEVERAL POSSIBLE CAUSES. HE SAID THAT THE
PROBLEM OF A POOR FLAVOR IN THE FILLED MILK PRODUCED AT TORREJON AB WAS
WELL DOCUMENTED AND LONG STANDING. HE BASED THE CONTRIBUTING CAUSES OF
POOR TASTE LARGELY TO:
(1) POOR WATER SUPPLY.
(2) OLD EQUIPMENT IN USE (ABOUT 13 YEARS).
(3) WAXED PAPER CONTAINERS IN USE.
(4) NONUSE OF COCONUT BASE OIL.
AS EARLY AS SEPTEMBER 1970, THE 16TH AIR FORCE WAS CONSIDERING THE
OPTIONS AVAILABLE TO IMPROVE THE ACCEPTABILITY OF MILK PRODUCTS FOR THE
TORREJON AND ZARAGOZA BASES. THE CONTRACT FOR PRODUCTION OF FILLED MILK
WITH UDECO WAS DUE TO EXPIRE ON DECEMBER 31, 1971, BUT COULD BE RENEWED
FOR ONE 3-MONTH PERIOD AND THEN MONTHLY THROUGH JUNE 30, 1972.
SPANISH SOURCES COULD NOT PROVIDE THE BASES WITH U.S.
VETERINARY-APPROVED MILK. IN NOVEMBER 1970, AFTER A COMPLAINT TO THE
SECRETARY OF DEFENSE, A DANISH DAIRY MADE A DELIVERY OF FRESH MILK TO
TORREJON AB ON A TEST BASIS. (MILK PRODUCERS LOCATED CLOSER TO THE AB
WERE NOT INTERESTED IN PROVIDING MILK FOR THE TEST.) THE TEST WAS NOT
SUCCESSFUL. BECAUSE OF LONG DELIVERY TIME AND A DELAY AT THE SPANISH
BORDER, THE MILK WAS EIGHT DAYS OLD WHEN IT ARRIVED AT TORREJON AND
THEREFORE HAD TO BE SOLD QUICKLY. THE SHELF LIFE OF FRESH MILK IS TEN
DAYS.
IN MARCH 1971, THE 16TH AIR FORCE ASKED THE U.S. NAVY AT ROTA ABOUT
SUPPLYING FILLED MILK UNTIL THE FILLED MILK PLANT AT TORREJON AB COULD
BE IMPROVED. IN SEPTEMBER THE 16TH AIR FORCE ASKED NAVY PERSONNEL AT
ROTA ABOUT BUYING FILLED MILK FROM OLD DOMINION ON A PERMANENT BASIS AND
WEIGHED THE ADVANTAGES AND DISADVANTAGES. ON THE PLUS SIDE, THE MILK
FROM ROTA HAD AN ACCEPTABLE TASTE; THE PRICE WAS COMPARABLE TO THE
UDECO PRICE; AND CONTRACT ADMINISTRATION AT TORREJON AB WOULD BE
ELIMINATED. ON THE NEGATIVE SIDE, ONLY ONE SUPPLIER WOULD REMAIN IN
SPAIN; PROTESTS COULD BE EXPECTED FROM U.S. FIRMS NOT GIVEN AN
OPPORTUNITY TO BID; THE TORREJON AND ZARAGOZA BASES WOULD BE SECOND
PRIORITY TO THE SIXTH FLEET REQUIREMENTS; TRANSPORTATION COSTS WOULD BE
HIGH AS DAILY SHIPMENTS WOULD BE REQUIRED; A NEW CONTRACT WOULD HAVE TO
BE NEGOTIATED WITH OLD DOMINION TO HANDLE THE ADDITIONAL REQUIREMENTS;
AND STORAGE SPACE WAS LIMITED AT BOTH BASES AND ROTA. AFTER CONSIDERING
THESE FACTORS, ALONG WITH THE FACT THAT THE OFF-TASTE OF THE MILK HAD
BEEN ATTRIBUTED IN PART TO THE AGED EQUIPMENT, THE 16TH AIR FORCE
DECIDED TO CONTRACT FOR A NEW MILK PLANT AT TORREJON.
ON OCTOBER 1, 1971, THE PROCUREMENT CENTER ISSUED THE INSTANT RFP FOR
A NEW MILK PLANT AND FILLED MILK PRODUCTS. PROSPECTIVE CONTRACTORS
VISITED TORREJON AND RAISED SEVERAL QUESTIONS ABOUT THE CLARITY AND
INTENT OF THE SPECIFICATION. TWO PROSPECTIVE CONTRACTORS, SERVRITE
INTERNATIONAL LTD. AND UDECO, SUBMITTED FORMAL PROTESTS TO THE AIR
FORCE ABOUT ONE PROVISION OF THE RFP. THE PROVISION REQUIRED THAT THE
EQUIPMENT INVOLVED NOT BE MORE THAN TWO YEARS OLD AT THE TIME OF
INSTALLATION. THIS WAS TO ASSURE THAT THE U.S. GOVERNMENT WOULD RECEIVE
RELATIVELY NEW EQUIPMENT UNDER THE CONTRACT.
AS A RESULT OF THE QUESTIONS AND THE PROTESTS, THE 16TH AIR FORCE
ASKED HEADQUARTERS, U.S. AIR FORCES, EUROPE (USAFE), FOR TECHNICAL
ASSISTANCE IN PREPARING BETTER SPECIFICATIONS. A NATICK LABORATORIES
REPRESENTATIVE VISITED TORREJON AB FROM NOVEMBER 4 TO 11, 1971, TO HELP
PREPARE NEW SPECIFICATIONS. ON DECEMBER 17, THE CENTER NOTIFIED THOSE
FIRMS WHO HAD RECEIVED AN RFP TO CEASE WORKING ON THEIR PROPOSALS UNTIL
NEW SPECIFICATIONS WERE COMPLETED. ON DECEMBER 28, THE 16TH AIR FORCE
RECEIVED NEW SPECIFICATIONS FROM THE NATICK LABORATORIES. NEXT, THE
CENTER ISSUED A NEW RFP WITH MODIFIED SPECIFICATIONS AND EXTENDED THE
BID OPENING DATE TO MARCH 3, 1972.
MEANWHILE, IN DECEMBER 1971 STEROVITA IN HOLLAND ADVISED THE
COMMISSARY OFFICER AT TORREJON AB THAT IT COULD SUPPLY FRESH MILK TO THE
BASES. THE COMMISSARY OFFICER ASKED USAFE TO INVESTIGATE THIS
POSSIBILITY. IN REPLY, ON JANUARY 18, 1972, USAFE HEADQUARTERS NOTIFIED
THE 16TH AIR FORCE THAT STEROVITA COULD PROVIDE FRESH MILK AT A PRICE
COMPARABLE TO THAT PAID FOR FRESH MILK PRODUCTS ELSEWHERE IN EUROPE.
USAFE HEADQUARTERS ADVISED THAT NORMAL DELIVERY TIME TO TORREJON WOULD
BE THREE DAYS AND THE PRODUCTS WOULD THEREFORE HAVE A REMAINING SHELF
LIFE OF SEVEN DAYS AFTER DELIVERY. EIGHT DAYS LATER THE 16TH AIR FORCE
INFORMED USAFE HEADQUARTERS THAT IT WOULD ACCEPT FRESH MILK AND CANCEL
THE OUTSTANDING RFP FOR FILLED MILK. FRESH MILK WAS SUPPLIED BEGINNING
APRIL 3, 1972, AFTER A CONTRACT WAS EXECUTED ON MARCH 7, 1972, BETWEEN
STEROVITA AND THE U.S. ARMY MATERIEL COMMAND, THE PROCURING ACTIVITY FOR
FRESH MILK IN EUROPE.
AT USAFE HEADQUARTERS, THE DECISION TO SWITCH TO FRESH MILK WAS
EXPLAINED TO US AS FOLLOWS. FILLED MILK MEETS A REQUIREMENT WHERE FRESH
MILK CANNOT BE PROVIDED. WHEN FRESH MILK CAN BE PROVIDED, OUR FORCES
OVERSEAS SHOULD HAVE THE ADVANTAGE OF THIS PREFERRED PRODUCT. WE WERE
TOLD THAT THE MAIN REASON FOR THE CHANGE WAS THE STRONG AND PERSISTENT
CUSTOMER DISSATISFACTION WITH THE FILLED MILK PRODUCT AT TORREJON.
WITHIN SEVEN DAYS AFTER THE 16TH AIR FORCE DECIDED TO CHANGE TO FRESH
MILK, A MESSAGE WAS SENT TO EACH FIRM INVOLVED TO CANCEL THE RFP.
THE CHIEF OF THE PROCUREMENT CENTER IN SPAIN SAID THAT IN GOOD FAITH
THE AIR FORCE HAD TO CANCEL THE RFP AS SOON AS POSSIBLE AFTER THE
DECISION. THIS WAS CONSIDERED NECESSARY TO MINIMIZE THE SOLICITED
FIRMS' COSTS OF PREPARING OFFERS AFTER THE DECISION TO BUY FRESH MILK.
HE WAS NOT AWARE OF ANY BASIS ANY OF THE FIRMS WOULD HAVE FOR A LEGAL
CLAIM AGAINST THE GOVERNMENT BECAUSE OF THE RFP CANCELLATION.
THE 16TH AIR FORCE HAS INFORMED THE U.S. ARMY MATERIEL COMMAND THAT
IT HAS NO INTENTION OF EXPLORING ANY OTHER SOURCE OF MILK PRODUCT FOR
TORREJON AND ZARAGOZA AIR BASES. FURTHER, THERE ARE NO PLANS TO CHANGE
TO FRESH MILK AT MORON AB. WE WERE TOLD THE TASTE OF THE FILLED MILK
THERE IS SATISFACTORY.
WE EVALUATED THE RELATIVE ACCEPTANCE OF FRESH AND FILLED MILK AT THE
TORREJON AND ZARAGOZA BASES BASED ON ONE MONTH'S CONSUMPTION OF EACH
TYPE. CONSUMPTION AT THE TWO BASES JUMPED BY ABOUT 260 PERCENT DURING
THE FIRST MONTH FRESH MILK WAS AVAILABLE. AVERAGE MONTHLY CONSUMPTION
OF ONE-HALF GALLONS OF FILLED MILK WAS ABOUT 11,000, WHEREAS 28,675
ONE-HALF GALLONS OF FRESH MILK WERE CONSUMED DURING ITS FIRST MONTH OF
AVAILABILITY. DEMAND IS EXPECTED TO LEVEL OFF, HOWEVER, AS CONSUMERS
REALIZE THAT FRESH MILK WILL BE AVAILABLE REGULARLY.
A COST SAVINGS OF ABOUT $91,000 ANNUALLY WAS COMPUTED BY THE 16TH AIR
FORCE BY CHANGING FROM FILLED TO FRESH MILK. THIS REPRESENTS THE
GOVERNMENT'S COST TO TRANSPORT FILLED MILK INGREDIENTS AND SUPPLIES FROM
THE STATES AND TO MAINTAIN A BUILDING, HOUSING THE MILK PROCESSING
EQUIPMENT. THE COST COMPARISON, HOWEVER, DID NOT INCLUDE THE ADDED COST
OF THE MILK ITSELF.
ACTUAL COST DATA WERE NOT AVAILABLE FOR COMPARING THE COST OF FILLED
AND FRESH MILK, BUT AVAILABLE DATA INDICATE THE FRESH MILK IS MORE
EXPENSIVE. FOR EXAMPLE, THE GOVERNMENT'S COST FOR A ONE-HALF GALLON OF
FRESH WHITE MILK DELIVERED TO TORREJON OR ZARAGOZA IS 45[. WHILE THE
PRICE OF FILLED MILK WAS EXPECTED TO INCREASE UNDER THE NEW CONTRACT,
THE PRICE UNDER THE OLD CONTRACT FOR ONE-HALF GALLON WAS ONLY 29[. AT
ROTA, SPAIN, WHERE A NEW PLANT WAS ESTABLISHED IN EARLY 1972, THE PRICE
PER ONE-HALF GALLON IS 38[.
AIR FORCE PERSONNEL POINTED OUT, HOWEVER, THAT THE GOVERNMENT'S COSTS
FOR MILK ARE LARGELY RECOVERED THROUGH COMMISSARY RESALE. ACCORDING TO
THESE OFFICIALS, ONLY 12 PERCENT OF THE AIR FORCE MILK-REQUIREMENTS AT
TORREJON AB AND ZARAGOZA AB IS FOR TROOP ISSUE. THEY SAID THE IMPACT ON
THE U.S. BALANCE OF PAYMENTS POSITION OF THE CHANGE TO FRESH MILK HAD
BEEN CONSIDERED BUT OTHER FACTORS, SUCH AS CUSTOMER DISSATISFACTION AND
AVAILABILITY OF FRESH MILK, WERE OVERRIDING. FRESH MILK REQUIRED AT THE
TWO BASES COST ABOUT $712,000 ANNUALLY, ACCOUNTING FOR ONLY ABOUT 5
PERCENT OF ARMY AND AIR FORCE MILK REQUIREMENTS IN EUROPE. IN THIS
REGARD, IT IS REPORTED BY THE DEPARTMENT OF THE ARMY THAT THE PURCHASES
FROM STEROVITA WILL BE OFFSET BY BARTER ARRANGEMENTS.
OUR REVIEW OF DOCUMENTS AND DISCUSSIONS WITH OFFICIALS FULLY SUPPORTS
THE POOR QUALITY OF THE FILLED MILK THAT WAS PRODUCED AT TORREJON AB.
WHILE IT WOULD APPEAR THE TRANSITION TO FRESH MILK COULD HAVE BEEN MORE
ORDERLY, THE EVIDENCE WE ACCUMULATED SHOWS THAT THE AIR FORCE WAS
UNAWARE FRESH MILK COULD BE PROVIDED UNTIL IT WAS WELL INTO THE NEW
PROCUREMENT OF FILLED MILK.
PARAGRAPH 10(F) OF SECTION C OF RFP NO. F61308-72-R-0001 RESERVED TO
THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL OFFERS. WITH RESPECT TO
FORMALLY ADVERTISED PROCUREMENTS, ASPR 2-209 AND 2-404.1(B)(III) PERMIT
CANCELLATION OF AN INVITATION FOR BIDS WHEN IT IS DETERMINED THAT THE
SUPPLIES OR SERVICES BEING PROCURED ARE NO LONGER REQUIRED. THIS RIGHT
IS EQUALLY APPLICABLE TO CANCELLATION OF A SOLICITATION UNDER A
NEGOTIATED PROCUREMENT. B-169492, JULY 27, 1970; B-167364, SEPTEMBER
29, 1969.
IN CONSTRUING SUCH PROVISIONS, WE HAVE HELD THAT THE DETERMINATION
WHETHER A COGENT REASON EXISTS FOR CANCELLATION IS A MATTER PRIMARILY
WITHIN THE DISCRETION OF THE ADMINISTRATIVE AGENCY AND WILL NOT BE
DISTURBED IN THE ABSENCE OF CLEAR PROOF OF ABUSE OF DISCRETION. 50
COMP. GEN. 464 (1970); 51 COMP. GEN. 426 (1972). WHILE IT MAY BE
ARGUED THAT THE DECISION TO CHANGE FROM FILLED TO WHOLE MILK WOULD NOT
BE AN ALTERATION OF SUCH MAGNITUDE AS TO JUSTIFY A CANCELLATION BASED ON
THE LACK OF A REQUIREMENT FOR THE PRODUCT (MILK), TO INSIST THAT AN
AGENCY GO THROUGH WITH THE PROCUREMENT OF AN ITEM FOUND NOT TO BE
ACCEPTABLE TO ITS NEEDS WOULD BE CONTRARY TO THE BEST INTEREST OF THE
GOVERNMENT. ALTHOUGH IT IS REGRETTABLE THAT THE DECISION TO CHANGE TO
WHOLE MILK WAS NOT MADE SOONER, IT DOES NOT APPEAR THAT THE AIR FORCE
WAS AWARE FRESH MILK WAS AVAILABLE UNDER THE ARMY CONTRACT UNTIL IT WAS
WELL INTO THE PROCUREMENT PROCESS.
ASPR 6-805.1 STATES THAT, EXCEPT AS PRESCRIBED IN ASPR 6-805.2,
PROPOSED PROCUREMENTS OF SUPPLIES FOR USE OUTSIDE THE UNITED STATES
SHALL BE RESTRICTED TO UNITED STATES END PRODUCTS. OF PERTINENCE TO
YOUR PROTEST IS THAT PORTION OF ASPR 6-805.2(A) WHICH READS AS FOLLOWS:
"6-805.2 PROCUREMENT LIMITATIONS
(A) EXCEPT AS PROVIDED IN (C) BELOW, PROCUREMENTS OF FOREIGN END
PRODUCTS (INCLUDING CONSTRUCTION MATERIALS) AND SERVICES FOR USE OUTSIDE
THE U.S. MAY BE MADE ONLY IN THE FOLLOWING CASES:
(IV) PERISHABLE SUBSISTENCE - PROCUREMENTS OF PERISHABLE SUBSISTENCE
ITEMS WHERE IT IS DETERMINED THAT DELIVERY FROM THE UNITED STATES WOULD
DESTROY OR SIGNIFICANTLY IMPAIR THEIR QUALITY AT THE POINT OF
CONSUMPTION. SUCH DETERMINATION SHALL BE MADE PRIOR TO PROCUREMENT BY
THE INDIVIDUALS DESIGNATED IN (B)(1) BELOW OR THEIR IMMEDIATE DEPUTIES,
EXCEPT THAT THIS AUTHORITY MAY BE REDELEGATED FOR PROCUREMENTS ESTIMATED
NOT TO EXCEED $100,000 IN FOREIGN COST."
SINCE THE REFERENCED PARAGRAPH 6-805.2(C) RELATES TO PROCUREMENT OF
SCIENTIFIC AND TECHNICAL KNOWLEDGE RESULTING IN EXPENDITURES OUTSIDE THE
UNITED STATES AND CANADA, WHOLE MILK WOULD CLEARLY FALL UNDER THE STATED
EXCEPTION FOR THE USE OF ONLY UNITED STATES END PRODUCTS. WHILE WE
BELIEVE COGENT ARGUMENTS COULD BE MADE TO SUPPORT YOUR VIEW THAT FILLED
MILK IS AS ACCEPTABLE AS WHOLE MILK, IT IS NOT WITHIN THE PROVINCE OF
EITHER OUR OFFICE OR THAT OF A POTENTIAL CONTRACTOR TO DICTATE WHICH
ITEMS THE GOVERNMENT IS TO PURCHASE.
WHILE THE RECORD IS NOT ENTIRELY CLEAR AS TO THE EXACT DIFFERENCE IN
PRICE BETWEEN FILLED AND WHOLE MILK, IN VIEW OF THE RECOVERY OF COSTS
THROUGH COMMISSARY RESALE WE DO NOT BELIEVE THAT A PRICE DIFFERENTIAL
WOULD AFFECT THE RIGHT OF THE AIR FORCE TO PURCHASE THAT PRODUCT WHICH
IT HAD DETERMINED WOULD BEST FILL ITS NEEDS.
CONCERNING YOUR CLAIM FOR REIMBURSEMENT OF THE EXPENSES INCURRED BY
YOU IN THE PREPARATION OF YOUR OFFER, RECOVERY OF SUCH EXPENSES CAN BE
HAD ONLY IN THOSE CASES WHERE IT CAN BE CONVINCINGLY SHOWN THAT THERE
HAD BEEN A FRAUDULENT INDUCEMENT FOR BIDS OR OFFERS, WITH THE INTENTION,
BEFORE THE OFFERS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL
EXCEPT THE ONE TO WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER IT
WAS THE LOWEST RESPONSIVE OFFEROR OR NOT. HEYER PRODUCTS COMPANY, INC.
V. UNITED STATES, 135 CT. CL. 63. THERE IS NO EVIDENCE IN THIS CASE
INDICATING SUCH A FRAUDULENT INDUCEMENT.
UNDER THE CIRCUMSTANCES, WE MUST CONCLUDE THAT CANCELLATION OF THE
PROCUREMENT IN QUESTION WAS IN THE BEST INTEREST OF THE GOVERNMENT, AND
FULLY CONSISTENT WITH THE PURPOSE AND INTENT OF THE PROCUREMENT STATUTES
AND IMPLEMENTING REGULATIONS. ACCORDINGLY, WE SEE NO LEGALLY
JUSTIFIABLE BASIS ON WHICH TO QUESTION THE ACTION TAKEN BY THE AIR
FORCE, AND YOUR PROTEST MUST BE DENIED.
B-175337, JAN 3, 1973
BID PROTEST - SMALL BUSINESS SET-ASIDE - SUB-CONTRACT TO LARGE BUSINESS
DECISION DENYING THE PROTEST OF CLAUDE MICHAEL, A DIVISION OF
MARSHALL INDUSTRIES AGAINST AWARD OF A CONTRACT TO H. N. BAILEY AND
ASSOCIATES UNDER AN IFB ISSUED BY THE U.S. ARMY WEAPONS COMMAND, ROCK
ISLAND, ILL., AS A TOTAL SMALL BUSINESS SET-ASIDE, FOR SOLDERING IRONS.
AS LONG AS A SMALL BUSINESS CONCERN, WHICH HAS SUBCONTRACTED A MAJOR
PORTION OF THE WORK TO LARGE BUSINESS, MAKES SOME SIGNIFICANT
CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT END ITEM,
IT HAS MET THE REQUIREMENT THAT THE END ITEM BE PRODUCED BY SMALL
BUSINESS CONCERNS. SEE 49 COMP. GEN. 41, 43 (1969). ALSO, EVEN THOUGH
A SMALL BUSINESS CONCERN DOES NOT MANUFACTURE THE CONTRACT END ITEM, IT
QUALIFIES AS A "SMALL BUSINESS MANUFACTURER" UNDER SBA REGULATIONS IF IT
IS FURNISHING THE PRODUCT OF A SMALL BUSINESS CONCERN. SEE 44 COMP.
GEN. 271 (1964).
TO MR. CLAUDE MICHAEL:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 29, 1972, AND
SUBSEQUENT CORRESPONDENCE, CONCERNING THE AWARD OF A CONTRACT DATED
DECEMBER 23, 1971, TO H. N. BAILEY AND ASSOCIATES, UNDER INVITATION FOR
BIDS DAAF01-72-B-0504, ISSUED BY THE UNITED STATES ARMY WEAPONS COMMAND,
ROCK ISLAND, ILLINOIS, AS A TOTAL SMALL BUSINESS SET-ASIDE, FOR THE
PROCUREMENT OF SOLDERING IRONS.
THREE BIDS WERE RECEIVED AND OPENED ON NOVEMBER 3, 1971. THE LOW
BID, FROM HEXACON ELECTRIC COMPANY, WAS FOUND NONRESPONSIVE. YOUR BID,
WHICH WAS NEXT LOW, REPRESENTED THAT THE SOLDERING IRON WOULD BE
MANUFACTURED BY UNGAR, A LARGE BUSINESS. SINCE THE PROCUREMENT WAS A
SMALL BUSINESS SET-ASIDE, REQUIRING THE ITEMS TO BE MANUFACTURED BY A
SMALL BUSINESS CONCERN, YOUR BID WAS REJECTED AS NONRESPONSIVE. SINCE
THE NEXT LOW BID, FROM H. N. BAILEY AND ASSOCIATES, INCLUDED THE
REQUIRED SMALL BUSINESS SELF CERTIFICATION, IT WAS CONSIDERED ELIGIBLE
AND AWARD WAS MADE TO BAILEY ON DECEMBER 23, 1971. YOU WERE NOTIFIED BY
THE CONTRACTING OFFICER OF THIS AWARD BY LETTER DATED JANUARY 5, 1972.
BY LETTER DATED FEBRUARY 29, 1972, YOU ADVISE THE CONTRACTING OFFICER
THAT:
"TO THE BEST OF MY KNOWLEDGE, H. N. BAILEY & ASSOCIATES IS ALSO
SUPPLYING PRODUCTS MANUFACTURED BY UNGAR IN FILLING THIS CONTRACT.
"AGAIN, TO THE BEST OF MY KNOWLEDGE, H. N. BAILEY & ASSOCIATES,
HOWEVER, DOES NOT DISCLOSE THAT HE IS MAKING THIS PURCHASE DIRECTLY FROM
UNGAR, BUT FROM ANOTHER SMALL BUSINESS CONCERN CALLED KIT PACK COMPANY
LOCATED AT THE SAME ADDRESS AS H. N. BAILEY & ASSOCIATES, SANTA ANA,
CALIFORNIA. FURTHER, I UNDERSTAND THAT THE KIT PACK COMPANY IS
PURCHASING THESE PARTS FROM UNGAR ON A KIT PACK PURCHASE ORDER AND H. N.
BAILEY & ASSOCIATES, IN TURN, IS REPURCHASING THEM FROM THE KIT PACK
COMPANY; THUS IMPLYING THAT THE PARTS IN QUESTION ARE NOT BEING
PURCHASED FROM UNGAR, A LARGE BUSINESS CONCERN, BUT FROM KIT PACK
COMPANY, A SMALL BUSINESS CONCERN.
"ADDITIONALLY, BOTH COMPANIES TO THE BEST OF OUR KNOWLEDGE, ARE OWNED
AND CONTROLLED BY HARRY N. BAILEY, WHO ACCORDING TO DUNN & BRADSTREET
IS LISTED AS PRESIDENT OF BOTH COMPANIES.
"IF THE FOREGOING INFORMATION IS CORRECT, H. N. BAILEY & ASSOCIATES
WAS AWARDED THE ROCK ISLAND CONTRACT THROUGH A TECHNICALITY THAT WE DID
NOT EMPLOY, AT A PRICE HIGHER THAN OUR QUOTATION; CONSEQUENTLY, WE
TOGETHER WITH THE GOVERNMENT AND PUBLIC ARE PENALIZED BY FORTHRIGHTLY
DISCLOSING THAT WE WERE PURCHASING THE SPECIFIED PARTS DIRECTLY FROM
UNGAR, A LARGE BUSINESS CONCERN."
THE SAME INFORMATION WAS INCLUDED IN YOUR LETTER TO OUR OFFICE.
THE RECORD SHOWS, BASED UPON AN INVESTIGATION BY THE DEFENSE CONTRACT
ADMINISTRATION SERVICES DISTRICT, ANAHEIM, CALIFORNIA, THAT THE H. N.
BAILEY AND ASSOCIATES COMPANY IS A SMALL BUSINESS MANUFACTURER, BUT IS
IN FACT PURCHASING THE UNITS UNDER A SUBCONTRACT FROM THE KIT PACK
COMPANY, A SMALL BUSINESS CONCERN SEPARATELY OWNED BY THE SAME PEOPLE
WHO OWN H. N. BAILEY, AND LOCATED AT THE SAME ADDRESS. DCASD FURTHER
ADVISES THAT KIT PACK COMPANY IS BUYING PATENTED COMPONENT PARTS FROM
ELDON INDUSTRIES, THE PARENT COMPANY OF UNGAR, A LARGE BUSINESS, AND
MANUFACTURING THE SOLDERING TIPS AND TOTALLY ASSEMBLING AND PACKAGING
THE COMPLETE UNITS.
OUR OFFICE HAS HELD THAT, SO LONG AS THE SMALL BUSINESS FIRM, WHICH
HAS SUBCONTRACTED A MAJOR PORTION OF THE WORK TO LARGE BUSINESS, MAKES
SOME SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE
CONTRACT END ITEM, THE CONTRACTUAL REQUIREMENT THAT THE END ITEM BE
MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS HAS BEEN MET. SEE
49 COMP. GEN. 41, 43 (1969), AND 39 COMP. GEN. 435 (1959).
SINCE THE KIT PACK COMPANY, A SMALL BUSINESS CONCERN, IS PERFORMING
WORK WHICH SIGNIFICANTLY CONTRIBUTES TO THE MANUFACTURE OF THE END
ITEMS, IT IS CONCLUDED THAT THE END ITEM IS, IN SIGNIFICANT PART,
PRODUCED BY SMALL BUSINESS. ALTHOUGH IT APPEARS THAT H. N. BAILEY IS
NOT THE MANUFACTURER OF THE ITEM TO BE SUPPLIED UNDER THE SUBJECT
PROCUREMENT, IT WAS NEVERTHELESS QUALIFIED FOR AWARD AS A "SMALL
BUSINESS NONMANUFACTURER" UNDER APPLICABLE SBA REGULATIONS BECAUSE IT IS
FURNISHING THE PRODUCT OF A SMALL BUSINESS CONCERN. SEE SECTION
121.3-8(B) OF THE SBA REGULATIONS AND 44 COMP. GEN. 271 (1964). IN
CONTRAST, YOUR BID WAS REJECTED SINCE YOU INDICATED THAT THE ENTIRE END
ITEM WOULD BE MANUFACTURED BY A LARGE BUSINESS.
FURTHERMORE, UNDER APPLICABLE REGULATIONS, THE CONTRACTING OFFICER
WAS REQUIRED TO ACCEPT H. N. BAILEY'S SELF-CERTIFICATION OF BEING A
SMALL BUSINESS AND THE MANUFACTURER OF THE ITEMS TO BE FURNISHED, UNLESS
HE POSSESSED INFORMATION TO THE CONTRARY, WHICH IS NOT INDICATED HERE.
ARMED SERVICES PROCUREMENT REGULATION 1-703(A)(2). ALSO, THE
REGULATIONS PROVIDE THAT A SIZE PROTEST WILL BE CONSIDERED TIMELY ONLY
IF IT IS SUBMITTED TO THE CONTRACTING OFFICER WITHIN FIVE WORKING DAYS
AFTER BID OPENING. WHERE SUCH PROTEST IS NOT TIMELY OR IS RECEIVED
AFTER AWARD, SBA IS TO BE ADVISED FOR THE PURPOSE OF CONSIDERATION IN
ANY FUTURE PROCUREMENTS.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176342, JAN 3, 1973
BID PROTEST - RESPONSIBILITY - REFERRAL TO SBA
DECISION DENYING THE PROTEST OF R. R. ALLEN, INC., AGAINST THE AWARD
OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY THE SUPERVISOR OF
SHIPBUILDING, CONVERSION AND REPAIR, 6TH NAVAL DISTRICT, CHARLESTON, S.
C., FOR THE OVERHAUL OF A HARBOR TUG.
A REFERRAL OF NONRESPONSIBILITY OF A SMALL BUSINESS FIRM NEED NOT BE
MADE TO THE SBA IF THE CONTRACTING OFFICER CERTIFIES IN WRITING, AND HIS
CERTIFICATE IS APPROVED BY THE CHIEF OF THE PURCHASING OFFICE, THAT THE
AWARD MUST BE MADE WITHOUT DELAY, INCLUDES SUCH CERTIFICATE AND
SUPPORTING DOCUMENTATION IN THE CONTRACT FILE, AND PROMPTLY FURNISHES A
COPY TO THE SBA. ASPR 1-705.4(C)(IV).
MOREOVER, THE DETERMINATION OF A BIDDER'S RESPONSIBILITY IS A
QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING OFFICER AND
NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION.
WHERE THE INFORMATION RELIED UPON BY THE CONTRACTING OFFICER IN
MAKING A DETERMINATION OF NONRESPONSIBILITY REASONABLY SUPPORTS THAT
DETERMINATION, THERE IS NO BASIS FOR GAO TO SUBSTITUTE ITS JUDGMENT FOR
THAT OF THE CONTRACTING OFFICER. 45 COMP. GEN. 4 (1965).
TO R. R. ALLEN, INCORPORATED:
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 26, 1972, AND
SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO
ANY OTHER FIRM UNDER INVITATION FOR BIDS NO. N62673-72-B-77, ISSUED BY
THE SUPERVISOR OF SHIPBUILDING, CONVERSION AND REPAIR, SIXTH NAVAL
DISTRICT, CHARLESTON, SOUTH CAROLINA.
THE INVITATION WAS ISSUED ON MAY 16, 1972, FOR THE REGULAR OVERHAUL
OF A MEDIUM HARBOR TUG. THREE BIDS WERE RECEIVED AND OPENED ON MAY 26,
1972, AND YOUR FIRM SUBMITTED THE LOW BID. YOUR BID OF $99,999.99 WAS
REJECTED BECAUSE YOUR FIRM WAS DETERMINED TO BE NONRESPONSIBLE BASED
UPON A PREAWARD SURVEY CONCLUDING THAT THE FACILITIES LEASED BY YOU AND
DESIGNATED AS THE FACILITIES WHERE THE WORK WOULD BE PERFORMED (1)
LACKED THE NECESSARY ELECTRICAL CURRENT REQUIRED TO FURNISH 400 AMPS AND
SHORE POWER 24 HOURS OF EVERY DAY THE HARBOR TUG WAS IN YOUR POSSESSION,
AS REQUIRED IN THE SPECIFICATIONS, (2) CONTAINED A PIER CONSIDERED
UNSAFE IN THAT IT HAD NO SAFETY RAILS, LACKED ADEQUATE LIGHTING AND WAS
IN A DETERIORATED CONDITION, AND (3) HAD UNSATISFACTORY GARBAGE AND
SEWAGE DISPOSAL, AS EVIDENCED BY THE EJECTION OF RAW SEWAGE INTO THE
WANDO RIVER. THEREFORE, AWARD WAS MADE TO THE NEXT LOW BIDDER ON JUNE
22, 1972, AT A PRICE OF $119,000.
YOU CONTEND THAT THE PREAWARD SURVEY WAS HIGHLY IRREGULAR AS IT WAS
CONDUCTED UNANNOUNCED AND UNATTENDED BY ANY OFFICIALS OF YOUR FIRM AND
BECAUSE YOU WERE NOT ADVISED OF THE RESULTS THEREOF UNTIL AFTER AWARD OF
THE CONTRACT. YOU ALSO STATE THAT YOU ARE UNAWARE OF THE REASONS THE
FACILITIES AT THE WANDO, SOUTH CAROLINA, PLANT WERE CONSIDERED
UNACCEPTABLE AND, ASSUMING THAT THEY WERE DEFICIENT, UPON ADEQUATE
NOTICE THE DEFICIENCIES COULD HAVE BEEN CORRECTED. IN ADDITION, YOU
CONTEND THAT YOUR FIRM HAS THE NECESSARY ORGANIZATION, EXPERIENCE AND
TECHNICAL SKILLS, AND THAT YOUR BID LISTED SEVERAL REPUTABLE
SUBCONTRACTORS WHO ARE AVAILABLE TO ACCOMPLISH ANY REPAIRS NOT WITHIN
YOUR IN-HOUSE CAPABILITY.
FURTHERMORE, YOU POINT OUT THAT DURING THE PAST TEN YEARS YOUR FIRM
HAS SATISFACTORILY ACCOMPLISHED REPAIRS ON EVERY TUG OF SIMILAR
CHARACTERISTICS OPERATING IN THE FIFTH NAVAL DISTRICT.
THE ADMINISTRATIVE REPORT STATES THAT THE CONTRACTING OFFICER'S
DETERMINATION THAT YOU WERE A NONRESPONSIBLE BIDDER ON THIS PROCUREMENT
WAS MADE PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR)
1-904.1, WHICH REQUIRES THAT WHENEVER THE CONTRACTING OFFICER IS UNABLE
TO MAKE AN AFFIRMATIVE DETERMINATION THAT A PROSPECTIVE CONTRACTOR IS
RESPONSIBLE WITHIN THE MEANING OF ASPR 1-902, "A DETERMINATION OF
NONRESPONSIBILITY SHALL BE MADE, SIGNED, AND PLACED IN THE FILES."
THE DETERMINATION OF NONRESPONSIBILITY SHOWS THAT A PREAWARD SURVEY
MADE ON YOUR LEASED FACILITIES IN CONNECTION WITH A PRIOR CONTRACT,
COMPLETED IN MAY OF 1972, NOTED CERTAIN DEFICIENCIES. SINCE THAT
CONTRACT INVOLVED THE FIRST OVERHAUL OF A TUG AT THOSE FACILITIES AND
YOU AGREED TO CORRECT THE DEFICIENCIES, YOU RECEIVED THE AWARD.
HOWEVER, IT IS REPORTED THAT THE DEFICIENCIES WHICH YOU HAD AGREED TO
CURE DURING THE COURSE OF PERFORMANCE UNDER THAT CONTRACT WERE NOT
CORRECTED. FOR EXAMPLE, IT IS REPORTED THAT YOU REPRESENTED THAT YOU
WOULD MANUFACTURE A RECTIFIER WHICH WOULD CONVERT ALTERNATING CURRENT TO
DIRECT CURRENT AND PROVIDE THE REQUIRED ELECTRICAL POWER OF 400 AMPS,
BUT THAT THIS WAS NOT ACCOMPLISHED AT ANY TIME DURING THAT OVERHAUL
CONTRACT. ALSO, IT IS REPORTED THAT YOU HAD STATED THAT YOU WOULD HOOK
UP A CEMENT SEPTIC TANK AND STOP THE PRACTICE OF DUMPING RAW SEWAGE INTO
THE WANDO RIVER, BUT AT THE TIME OF THIS PREAWARD SURVEY NO SUCH
CORRECTIVE ACTION HAD BEEN TAKEN. FURTHER, WHILE ATTEMPTS HAD BEEN MADE
TO REINFORCE THE PIER DURING THE PREVIOUS OVERHAUL CONTRACT BY PLACING
PLYWOOD SHEATHING DOWN THE CENTER, SUCH ACTION WAS NOT CONSIDERED
SUFFICIENT TO MAKE THE PIER SAFE. IN VIEW OF THE CONTINUED EXISTENCE OF
THESE DEFICIENCIES, THE PREAWARD SURVEY UNDER THE SUBJECT PROCUREMENT
WAS NEGATIVE AND THE NONRESPONSIBILITY DETERMINATION WAS MADE.
BECAUSE ASPR 1-705.4(C) REQUIRES REFERRAL TO THE SMALL BUSINESS
ADMINISTRATION (SBA) WHERE A BID FROM A SMALL BUSINESS CONCERN IS TO BE
REJECTED BECAUSE OF A CONTRACTING OFFICER'S DETERMINATION OF
NONRESPONSIBILITY AS TO CAPACITY, THE MATTER WAS DISCUSSED WITH THE
APPROPRIATE SBA OFFICE. THE SBA ADVISED THAT IT WOULD NOT BE ABLE TO
MAKE A DETERMINATION PRIOR TO JUNE 30, 1972, SINCE IT NEEDED A FULL 15
WORKING DAYS TO MAKE ITS DETERMINATION. DUE TO THE URGENCY OF THE
PROCUREMENT (THE TUG WAS COMPLETELY INOPERATIVE AND WAS NEEDED TO HANDLE
POLARIS SUBMARINES), THE CONTRACTING OFFICER DETERMINED THAT IT WAS
NECESSARY TO MAKE AN AWARD WITHOUT DELAY.
IN THIS REGARD, ASPR 1-705.4(C)(IV) PROVIDES AS FOLLOWS:
"A REFERRAL NEED NOT BE MADE TO THE SBA IF THE CONTRACTING OFFICER
CERTIFIES IN WRITING, AND HIS CERTIFICATE IS APPROVED BY THE CHIEF OF
THE PURCHASING OFFICE, THAT THE AWARD MUST BE MADE WITHOUT DELAY,
INCLUDES SUCH CERTIFICATE AND SUPPORTING DOCUMENTATION IN THE CONTRACT
FILE, AND PROMPTLY FURNISHES A COPY TO THE SBA ***."
SINCE THE CONTRACTING OFFICER COMPLIED WITH THE ABOVE-CITED
SUBSECTION, WE FIND NO BASIS TO QUESTION THE NONREFERRAL TO SBA. SEE
B-163967, SEPTEMBER 26, 1968.
THE DETERMINATION OF A BIDDER'S RESPONSIBILITY IS A QUESTION OF FACT
TO BE DETERMINED BY THE CONTRACTING OFFICER AND NECESSARILY INVOLVES THE
EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION. WHERE THE INFORMATION
RELIED UPON BY THE CONTRACTING OFFICER IN MAKING A DETERMINATION OF
NONRESPONSIBILITY REASONABLY SUPPORTS THAT DETERMINATION, THERE IS NO
BASIS FOR OUR OFFICE TO SUBSTITUTE ITS JUDGMENT FOR THAT OF THE
CONTRACTING OFFICER. 45 COMP. GEN. 4 (1965). IT IS OUR VIEW THAT THE
RECORD IN THE INSTANT CASE REASONABLY SUPPORTS THE CONTRACTING OFFICER'S
DETERMINATION.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176383, JAN 3, 1973
BID PROTEST - NONRESPONSIVENESS - LABOR SURPLUS SET ASIDE - IFB
IMPROPRIETIES
DECISION DENYING THE PROTEST OF ACME INDUSTRIES, INC., REQUESTING
THAT A CONTRACT AWARDED TO KECO INDUSTRIES, INC., UNDER AN IFB ISSUED BY
THE DEFENSE GENERAL SUPPLY CENTER FOR MOBILE AIR CONDITIONERS BE EITHER
CANCELLED OR TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT ON THE
GROUNDS THAT KECO'S BID WAS NONRESPONSIVE.
IN A LABOR SURPLUS SET-ASIDE PROCUREMENT, A BIDDER CAN ACHIEVE
ELIGIBILITY FOR NEGOTIATION OF THE SET-ASIDE PORTION BY SUBMITTING, AT A
MINIMUM, A RESPONSIVE BID ON THE NON-SET-ASIDE PORTION. ASPR
1-804.2(B)(1). THEREFORE, DATA IN A BID REGARDING ADMINISTRATION AND
PERFORMANCE OF THE CONTRACT IN THE EVENT OF AWARD OF EITHER THE
SET-ASIDE PORTION OR OF BOTH PORTIONS, DOES NOT RESERVE THE RIGHT TO THE
BIDDER TO REFUSE AWARD OF THE NON-SET-ASIDE PORTION ALONE. ALSO, A
PROTEST BASED ON ALLEGED IMPROPRIETIES IN AN IFB WHICH ARE APPARENT
PRIOR TO BID OPENING MUST BE FILED BEFORE BID OPENING. 4 CFR 20.2(A).
TO FRIED, FRANK, HARRIS, SHRIVER & KAMPELMAN:
BY CORRESPONDENCE DATED AUGUST 31, 1972, YOU REQUESTED AS COUNSEL FOR
ACME INDUSTRIES, INC., THAT OUR OFFICE RECOMMEND THAT THE CONTRACT
AWARDED TO KECO INDUSTRIES, INC. (KECO), FOR 150 MOBILE AIR CONDITIONERS
UNDER DEFENSE GENERAL SUPPLY CENTER INVITATION FOR BIDS (IFB)
DSA400-72-B-6211, EITHER BE CANCELLED OR TERMINATED FOR THE CONVENIENCE
OF THE GOVERNMENT ON THE BASIS THAT KECO'S BID WAS NONRESPONSIVE BECAUSE
IT QUALIFIED THE GOVERNMENT'S AWARD OPTIONS.
THE FOCAL POINT OF THE PROTEST IS THE SECOND SENTENCE OF THE LETTER
SUBMITTED WITH KECO'S BID, WHICH READS IN TOTO AS FOLLOWS:
"THIS LETTER IS INTENDED AS A PART OF OUR BID-RESPONSE TO SUBJECT
SOLICITATION.
"THE BID OF KECO INDUSTRIES, INC. IS FOR THE SET-ASIDE PORTION, OR
BOTH THE SET-ASIDE AND NON-SET-ASIDE PORTIONS OF THIS PROCUREMENT.
"1. SET-ASIDE PORTION THE BID FOR THIS PORTION IS FOR KECO'S PLANT
AT
17335 DAIMLER STREET
SANTA ANA, ORANGE COUNTY, CALIFORNIA
AND THE COMPANY'S CERTIFICATE OF ELIGIBILITY FOR THIS FACILITY IS
ATTACHED TO THIS LETTER.
"2. SET-ASIDE, PERFORMANCE/ADMINISTRATION IN THE EVENT KECO IS
AWARDED THE SET-ASIDE PORTION ONLY, CONTRACT ADMINISTRATION AS WELL AS
PERFORMANCE WOULD BE AT THE SANTA ANA, CALIFORNIA FACILITY.
"3. SET-ASIDE AND NON-SET-ASIDE PORTIONS SHOULD KECO BE AWARDED BOTH
PORTIONS OF THIS PROCUREMENT, THE SET-ASIDE PORTION WILL BE PERFORMED AT
SANTA ANA, CALIFORNIA, THE NON-SET-ASIDE PORTION WILL BE PERFORMED AT
CINCINNATI, OHIO AND THE ENTIRE CONTRACT WILL BE ADMINISTERED AT
CINCINNATI."
IT IS YOUR CONTENTION THAT THE FOREGOING EFFECTIVELY RESERVED TO KECO
THE OPTION TO REFUSE AWARD FOR THE NON-SET-ASIDE PORTION ALONE, THEREBY
RENDERING THE BID NONRESPONSIVE. YOU URGE THAT IRRESPECTIVE OF THE FACT
THAT THE GOVERNMENT CANCELLED THE SET-ASIDE PORTION AND AWARDED THE
ENTIRE 150 UNITS TO KECO UNDER THE NON-SET-ASIDE PORTION IN ORDER TO
REALIZE THE SIGNIFICANT SAVINGS OVER THE CONTEMPLATED SPLIT AWARDS, THE
INITIAL NONRESPONSIVENESS OF KECO'S BID PRECLUDED ITS ACCEPTANCE FROM
RIPENING INTO A VALID CONTRACT.
IN OUR DETERMINATION WHETHER A BID IS RESPONSIVE TO THE MATERIAL
REQUIREMENTS OF THE GOVERNMENT'S ADVERTISED NEEDS, WE DO NOT FEEL
CONSTRAINED TO CONSIDER ALL BID STATEMENTS IN A VACUUM, BUT RATHER, WE
VIEW THE BID AS AN INTEGRATED RESPONSE TO THE REQUIREMENTS AND FORMAT OF
THE PARTICULAR INVITATION. IN THIS INSTANCE, KECO INDICATED THAT IT WAS
BIDDING, IN PART, ON THE SET-ASIDE PORTION. HOWEVER, WITHIN THE
CONFINES OF A PROCUREMENT CONTAINING A LABOR SURPLUS SET-ASIDE, IT IS
NOT POSSIBLE TO BID ON THE SET-ASIDE PORTION PER SE. A BIDDER ACHIEVES
ELIGIBILITY FOR NEGOTIATION OF THE SET-ASIDE PORTION BY VIRTUE OF HAVING
SUBMITTED, AT A MINIMUM, A RESPONSIVE BID ON THE NON-SET-ASIDE PORTION.
SEE INVITATION PARAGRAPH C-35, QUOTING FROM ARMED SERVICES PROCUREMENT
REGULATION (ASPR) 1-804.2(B)(1). SINCE KECO SUBMITTED PRICES IN THE BID
SCHEDULE AS CALLED FOR, AS WELL AS THE NECESSARY ANCILLIARY INFORMATION
FOR CONSIDERATION OF THE BID ON THE BASIS REQUIRED BY THE IFB, I.E., ON
THE NON-SET-ASIDE, IT IS ONLY REASONABLE TO CONCLUDE THAT KECO SUBMITTED
ITS BID ON THE NON-SET-ASIDE PORTION IN ACCORDANCE WITH THE REQUIREMENTS
OF THE INVITATION. ANY OTHER RESULT IGNORES THE REALITY OF THE
SITUATION BY URGING THE ANOMALOUS CONCLUSION THAT KECO BID ON EVERY
POSSIBLE AWARD ALTERNATIVE, EXCEPT THAT NECESSARY FOR CONSIDERATION OF
ITS BID.
MOREOVER, IN VIEW OF THE FACT THAT KECO REPRESENTED ITSELF AS A SMALL
BUSINESS CONCERN AND SUBMITTED A CERTIFICATE OF ELIGIBILITY ENTITLING IT
TO FIRST PRIORITY IN THE NEGOTIATION OF THE SET-ASIDE PORTION, WE VIEW
THE WHOLE LETTER AS ANTICIPATORY OF THE CONSEQUENCES FLOWING FROM ITS
PRIORITY STATUS. IN THIS VEIN, THE "BID FOR THE SET-ASIDE" RECOGNIZES
THE POSSIBILITY OF AWARD ON THAT BASIS EVEN IF IT WERE NOT LOW ON THE
NON-SET-ASIDE PORTION. IF IT WERE LOW ON THE NON-SET-ASIDE PORTION,
KECO REALIZED THAT IT WOULD AUTOMATICALLY BE FIRST IN LINE FOR
NEGOTIATION OF THE SET-ASIDE PORTION. WE BELIEVE IT SIGNIFICANT THAT
KECO DID NOT SPECIFICALLY PRECLUDE AWARD ON THE NON-SET-ASIDE PORTION
ONLY, WHILE AT THE SAME TIME PROVIDING A SHIPPING POINT FOR THE
NON-SET-ASIDE IN THE PRODUCTION FACILITIES AND TRANSPORTATION SHEET
WITHOUT QUALIFICATIONS.
IN ESSENCE, YOU ARGUE THAT THE EXCLUSION OF A STATEMENT IN THE LETTER
THAT KECO WAS BIDDING ON THE NON-SET-ASIDE ALONE, PROMPTS THE CONCLUSION
THAT IT WAS EXCLUDING AWARD ON THAT BASIS. HOWEVER, WE BELIEVE THAT IN
THE CONTEXT OF THE BID AS A WHOLE, IT IS UNREASONABLE TO VIEW THE
TRANSMITTAL LETTER IN ANY OTHER LIGHT THAN THAT IT WAS PREDICATED ON THE
ASSUMPTION THAT KECO BID ON THAT NON-SET-ASIDE BASIS AS REQUIRED BY BID
DOCUMENTS THEMSELVES, AND THAT THE LETTER WAS WRITTEN AS A SUPPLEMENT
THERETO TO PROVIDE INFORMATION EMPHASIS AS TO ITS ELIGIBILITY FOR AWARD.
CONCERNING YOUR CONTENTION THAT THE INVITATION IS DEFECTIVE IN THAT
IT IS IMPOSSIBLE FOR ANY BIDDER TO MANUFACTURE A UNIT WEIGHING LESS THAN
4,500 POUNDS AS REQUIRED, SECTION 20.2(A) OF THE INTERIM BID PROTEST
PROCEDURES AND STANDARDS OF OUR OFFICE PUBLISHED IN TITLE 4, CODE OF
FEDERAL REGULATIONS, REQUIRES THAT A PROTEST BASED ON ALLEGED
IMPROPRIETIES IN AN IFB WHICH ARE APPARENT PRIOR TO BID OPENING BE FILED
PRIOR TO BID OPENING. SINCE ACME FAILED TO PROTEST THE ALLEGED
IMPROPRIETY IN THE INVITATION PRIOR TO BID OPENING, THIS ASPECT OF THE
PROTEST IS UNTIMELY AND WILL NOT BE CONSIDERED HERE. SEE B-175698,
AUGUST 7, 1972.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176387, JAN 3, 1973
SALES CONTRACT - TERMINATION FOR DEFAULT - WEIGHING PROPERTY -
UNREASONABLY DESCRIBED PROPERTY
CONCERNING THE PROTEST OF SURPLUS TIRE SALES AGAINST THE TERMINATION
FOR DEFAULT OF A PORTION OF A SALES CONTRACT, AND THE REFUSAL OF THE
CONTRACTING AGENCY TO WEIGH THE PROPERTY CONTAINED IN THE REMAINING
PORTION OF THE CONTRACT LET BY THE DEFENSE LOGISTICS SERVICES CENTER.
TERMINATION FOR DEFAULT IS A MATTER FOR RESOLUTION UNDER CONTRACT
DISPUTE PROCEDURES AND MAY NOT BE CONSIDERED BY GAO. ALSO, THERE IS NO
OBLIGATION ON THE PART OF THE GOVERNMENT TO WEIGH PROPERTY SOLD ON A LOT
BASIS WITHOUT ANY GUARANTY AS TO THE WEIGHT. HOWEVER, WHERE THE
INFORMATION THE HOLDING ACTIVITY HAS IS CONTRADICTORY OR INCONSISTENT,
IT HAS THE DUTY TO SELECT THE DESCRIPTIVE INFORMATION TO BE USED ON SOME
REASONABLE BASIS, 50 COMP. GEN. 28, 30 (1970). THEREFORE, SURPLUS TIRE
SALES MAY BE RELIEVED FROM PERFORMANCE ON THAT ITEM WHICH WAS NOT
DESCRIBED IN A REASONABLE MANNER.
TO LT. GEN. WALLACE H. ROBINSON JR.:
REFERENCE IS MADE TO LETTER DSAH-G DATED AUGUST 15, 1972, FROM THE
ASSISTANT COUNSEL, HEADQUARTERS, CAMERON STATION, FURNISHING A REPORT ON
THE PROTEST OF SURPLUS TIRE SALES WITH RESPECT TO SALES CONTRACT NO.
44-2174-136 WHICH IT WAS AWARDED.
THE INVITATION FOR BIDS (IFB) UNDER WHICH THE AUCTION SALE WAS
CONSUMMATED INCORPORATED BY REFERENCE THE "GENERAL SALE TERMS AND
CONDITIONS" OF THE DEFENSE LOGISTICS SERVICES CENTER PAMPHLET "SALE BY
REFERENCE, FEBRUARY 1971," INCLUDING PARAGRAPH 2, "CONDITION AND
LOCATION OF PROPERTY," AND PARAGRAPH 30, "GUARANTEED DESCRIPTIONS." THE
FORMER PROVISION SPECIFIES THAT PROPERTY LISTED IN THE IFB IS OFFERED
"AS IS" AND "WHERE IS"; THAT THE DESCRIPTION OF THE PROPERTY IS BASED
ON THE BEST INFORMATION AVAILABLE TO THE SALES OFFICE; AND THAT THE
GOVERNMENT MAKES NO WARRANTY OF THE QUANTITY, KIND, CHARACTER, QUALITY,
WEIGHT, SIZE, DESCRIPTION, OR FITNESS FOR ANY PURPOSE OF ANY OF THE
PROPERTY. THE LATTER PROVISION WARRANTS THAT PROPERTY SOLD WILL BE "AS
DESCRIBED" IN THE IFB, BUT SPECIFICALLY DENIES WARRANTY OF ESTIMATES AS
TO THE WEIGHT OF PROPERTY SOLD BY THE UNIT OR BY THE LOT. THE CONTRACT
AWARDED TO SURPLUS TIRE UNDER THE IFB WAS FOR 22 ITEMS, INCLUDING ITEMS
200 AND 201. EACH OF THE LATTER TWO ITEMS WAS DESCRIBED IN THE IFB AS
CONTAINING ONE LOT OF IRREGULAR SHAPED CORROSION RESISTANT STEEL PLATES.
THE ESTIMATED TOTAL WEIGHT INCLUDED IN THE DESCRIPTION WAS 5,420 POUNDS
FOR ITEM 200 AND 1,800 POUNDS FOR ITEM 201.
AFTER THE AWARD OF THE CONTRACT, MR. FRED SCHWARTZ OF SURPLUS TIRE
EXAMINED ITEMS 200 AND 201. HE CONCLUDED THAT THE LOTS CONTAINED
SUBSTANTIALLY LESS MATERIAL THAN ESTIMATED IN THE IFB AND HE REQUESTED
THAT THE PROPERTY BE WEIGHED. THE REQUEST WAS DENIED ON THE BASIS THAT
THERE WAS NO OBLIGATION TO WEIGH THE PROPERTY SINCE IT WAS OFFERED FOR
SALE BY LOT. MR. SCHWARTZ THEN OFFERED TO PAY FOR AND REMOVE ALL ITEMS,
EXCEPT 200 AND 201, PENDING RESOLUTION OF THE DISPUTE OVER THE ESTIMATED
WEIGHT OF THE LATTER TWO ITEMS. HE WAS ADVISED THAT NONE OF THE
PROPERTY WOULD BE RELEASED TO HIM UNLESS HE PAID FOR ALL THE ITEMS HE
DESIRED TO REMOVE AND PROVIDED A 20-PERCENT DEPOSIT FOR ITEMS 200 AND
201. MR. SCHWARTZ DID NOT BELIEVE THAT HE SHOULD HAVE TO PROVIDE A
DEPOSIT ON ITEMS 200 AND 201 AS A CONDITION TO RECEIVING THE OTHER
PROPERTY AND HE REFUSED TO PERFORM ON THAT BASIS. WHEN THE CONDITIONS
SET BY THE SALES OFFICE WERE NOT MET, A NOTICE OF DEFAULT WAS ISSUED ON
ALL ITEMS IN THE CONTRACT EXCEPT ITEMS 200 AND 201. SURPLUS TIRE
THEREAFTER PROTESTED TO OUR OFFICE THE DEFAULT AND THE REFUSAL OF THE
SALES OFFICE TO WEIGH THE PROPERTY.
THE TERMINATION FOR DEFAULT IS A MATTER FOR RESOLUTION UNDER CONTRACT
DISPUTE PROCEDURES AND IS NOT FOR CONSIDERATION BY OUR OFFICE.
IN THE MATTER OF THE WEIGHTS OF ITEMS 200 AND 201, IT HAS BEEN
REPORTED TO OUR OFFICE THAT AS A RESULT OF THE PROTEST THE PROPERTY WAS
WEIGHED AND FOUND TO BE 3,600 AND 2,000 POUNDS, RESPECTIVELY.
MR. SCHWARTZ DISPUTES THE ACCURACY OF THOSE WEIGHTS AND HAS REQUESTE
THAT THE MATERIAL BE WEIGHED IN HIS PRESENCE. HOWEVER, SINCE THE
PROPERTY WAS SOLD ON A LOT BASIS WITHOUT ANY GUARANTY AS TO THE WEIGHT,
THERE IS NO OBLIGATION ON THE PART OF THE GOVERNMENT TO WEIGH THE
MATERIAL AND OUR OFFICE WILL NOT REQUIRE THE MATERIAL TO BE REWEIGHED IN
THE PRESENCE OF THE CONTRACTOR.
IT APPEARS FROM THE RECORD THAT THE IFB DESCRIPTIONS FOR ITEMS 200
AND 201 WERE BASED UPON INFORMATION IN TURN-IN DOCUMENTS FROM WHICH IT
WAS DETERMINED THAT THE ESTIMATED WEIGHTS FOR THE ITEMS WERE 5,420 AND
1,800 POUNDS, RESPECTIVELY. THERE IS NOTHING IN THE TURN-IN DOCUMENT ON
ITEM 201 WHICH INDICATES THAT THE ESTIMATED WEIGHT MAY BE ANYTHING OTHER
THAN 1,800 POUNDS. SINCE THE MATERIAL WAS SOLD ON A LOT BASIS WITHOUT
ANY GUARANTY AS TO THE WEIGHT, THERE IS NO BASIS FOR ANY RELIEF FOR THE
CONTRACTOR ON THAT ITEM.
A QUESTION IS PRESENTED IN THE ADMINISTRATIVE REPORT AS TO WHETHER
THE CONTRACTOR MAY BE RELIEVED FROM PERFORMING ON ITEM 200. IN THAT
CONNECTION, THE THREE SEPARATE TURN-IN DOCUMENTS FROM WHICH THE TOTAL
ESTIMATED WEIGHT ON THAT ITEM WAS COMPUTED LISTED WEIGHTS OF 1,500, 910
AND 1,011 POUNDS. THESE INDIVIDUAL WEIGHTS WERE REWRITTEN IN COLUMN
FORM AS 910, 1,011 AND 1,500 ON ONE OF THE TURN-IN DOCUMENTS. THE SUM
OF THE WEIGHTS WAS WRITTEN BELOW THE COLUMN IN SUCH A MANNER THAT THE
FIRST DIGIT BLENDS WITH THE LINE SEPARATING THE SUM FROM THE INDIVIDUAL
WEIGHTS WITH THE RESULT THAT THE FIRST DIGIT COULD BE READ AS A 5
INSTEAD OF A 3. THE INDIVIDUAL WHO PREPARED THE ITEM DESCRIPTION WHICH
WAS ULTIMATELY SUBMITTED TO THE SALES OFFICE FOR INCLUSION IN THE IFB
APPARENTLY READ THE SUM OF THE THREE WEIGHTS AS 5,420 INSTEAD OF 3,420
POUNDS.
NOTWITHSTANDING THE FOREGOING ERRONEOUS TOTAL USED TO DESCRIBE ITEM
200, COUNSEL FOR THE DEFENSE LOGISTICS SERVICES CENTER RECOMMENDS THAT
NO RELIEF BE ACCORDED SURPLUS TIRE ON THAT ITEM ON THE BASIS THAT THE
ERROR DID NOT RESULT FROM A LACK OF GOOD FAITH ON THE PART OF THE
GOVERNMENT SINCE THE SUM OF THE WEIGHTS APPEARING ON THE TURN-IN
DOCUMENT CAN REASONABLY BE READ AS 5,420 POUNDS.
IN OUR VIEW, THE GOOD FAITH IN READING THE SUM AS 5,420 INSTEAD OF
3,420 IS NOT IN ISSUE. THAT SUM DID NOT APPEAR BY ITSELF. THE
INDIVIDUAL WEIGHTS UPON WHICH THE SUM WAS BASED WERE INCLUDED IN THE
INDIVIDUAL TURN-IN DOCUMENTS AND WERE REWRITTEN ON THE DOCUMENT UPON
WHICH THE SUM IS CONTAINED.
ANYONE LOOKING AT THE INDIVIDUAL WEIGHTS SHOULD REALIZE READILY THAT
THE SUM OF 5,420 IS GROSSLY INCONSISTENT WITH THE INDIVIDUAL WEIGHTS.
IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE DESCRIPTION WRITER COULD NOT
HAVE REASONABLY RELIED UPON THE SUM AS BEING 5,420. IN THAT REGARD, IN
50 COMP. GEN. 28, 30 (1970), OUR OFFICE STATED THAT WHERE THE
INFORMATION THE HOLDING ACTIVITY HAS IS CONTRADICTORY OR INCONSISTENT IT
HAS A DUTY TO SELECT THE DESCRIPTIVE INFORMATION TO BE USED ON SOME
REASONABLE BASIS.
ACCORDINGLY, SURPLUS TIRE SHOULD BE RELIEVED FROM PERFORMANCE ON ITEM
200.
THE TURN-IN DOCUMENTS ARE RETURNED AS REQUESTED.
B-176673, JAN 3, 1973
BID PROTEST - CORRECTION OF BID - MISTAKE IN BID
DECISION DENYING THE PROTEST OF MATERIALS RESEARCH CORPORATION
AGAINST THE ADDITION OF AN AMOUNT TO THE LOW BID SUBMITTED BY COOKE
VACUUM PRODUCTS, INC. UNDER AN IFB ISSUED BY THE NATIONAL AERONAUTICS
AND SPACE ADMINISTRATION, AND THE AWARD ON THAT BASIS TO THE LOW BIDDER.
WHERE THERE IS CLEAR AND CONVINCING EVIDENCE ESTABLISHING THE
EXISTENCE OF AN ERROR IN A BID AND THE BID ACTUALLY INTENDED, CORRECTION
IS AUTHORIZED, PROVIDED SUCH CORRECTION WILL NOT RESULT IN DISPLACING
ONE OR MORE LOWER ACCEPTABLE BIDS. NASA PROCUREMENT REGULATION, SECTION
2.406.3(A)(2).
TO CURTIS, MALLET - PREVOST, COLT & MOSLE:
REFERENCE IS MADE TO YOUR LETTER OF JULY 28, 1972, WITH ENCLOSURES,
PROTESTING ON BEHALF OF MATERIALS RESEARCH CORPORATION, THE ACTION OF
THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) IN ADDING
$7,674 TO THE LOW BID SUBMITTED BY COOKE VACUUM PRODUCTS, INC., UNDER
INVITATION FOR BIDS NO. 1-51-2709, AND IN MAKING AN AWARD ON THAT BASIS
TO THE LOW BIDDER.
THE COPY OF THE ADMINISTRATIVE REPORT SENT TO YOU BY NASA ADVISED
THAT THE ADDITION WAS MADE TO CORRECT AN ERROR IN BID AND EXPLAINED THE
BASIS FOR THE CORRECTION. THE REPORT INDICATES THAT COOKE FAILED TO
INCLUDE IN ITS LUMP-SUM BID PRICE THE COST OF THE REQUIRED VACUUM PUMP
STATION WHICH IT HAD ESTIMATED AS BEING $7,723. IN SUPPORT OF ITS
ALLEGATION OF ERROR AND ITS INTENDED BID PRICE, COOKE SUBMITTED THE
SPECIFICATIONS AND THE ORIGINAL WORKSHEETS USED IN COMPUTING ITS BID
PRICE. THE WORKSHEETS CONSIST OF A TWO-PAGE LISTING OF MATERIAL AND
LABOR AND OTHER COST ELEMENTS TOTALING $35,195, WITH THE AMOUNT OF
$34,974 ENTERED DIRECTLY BENEATH THE COMPUTATION AND MARKED "BID." A
.628 PERCENT REDUCTION IN PRICE WAS MADE BY THE CORPORATION FOR
COMPETITIVE REASONS. AT THE TOP LEFT-HAND CORNER OF PAGE 1 OF THE
WORKSHEETS IS THE ENTRY "PUMP STA 7723." THE WORKSHEET SHOWS THAT THE
FIGURE "7723" WAS NOT EXTENDED INTO THE AMOUNT COLUMN WITH THE RESULT
SUCH FIGURE WAS OMITTED FROM THE AGGREGATE TOTAL BID PRICE. THE
CORPORATION ALSO SUBMITTED A COST ESTIMATE ON A "STANDARD 6 PUMPING
SYSTEM" WHICH SHOWS A TOTAL PRICE OF $7,723 - THE AMOUNT SHOWN ON ITS
WORKSHEET. IN CORRECTING THE COOKE BID, NASA INCREASED THE AMOUNT
THEREOF BY $7,674 RATHER THAN $7,723 - A DIFFERENCE OF $49 OR .628
PERCENT OF $7,723. WE ARE ADVISED THAT THE AMOUNT OF THE REQUESTED
INCREASE WAS DECREASED BY $49 OR .628 PERCENT BECAUSE COOKE'S WORKSHEETS
SHOW THAT IT REDUCED ITS TOTAL PRICE BY THAT PERCENTAGE FOR BIDDING
PURPOSES. ON THE BASIS OF THE FOREGOING, THE COOKE BID WAS CORRECTED
WITHOUT AFFECTING ITS STATUS AS LOW BIDDER.
YOU CONTEND THAT A PUMP STATION OF THE KIND NECESSARY TO COMPLY WITH
NASA SPECIFICATIONS COULD NOT POSSIBLY, IN ACCORDANCE WITH SOUND
BUSINESS PRACTICE, BE SOLD TO THE GOVERNMENT AS A COMPONENT OF A SPUTTER
ETCH SYSTEM AT A PRICE OF $7,723, THE AMOUNT DETERMINED TO HAVE BEEN
ERRONEOUSLY OMITTED FROM THE BID PRICE. YOU MAINTAIN THAT COOKE MUST
HAVE INTENDED TO ADD A PRICE INCREMENT TO THE PUMP STATION PRICE TO
COVER THE COST OF INCORPORATING IT INTO THE SPUTTER ETCH SYSTEM, AND
THAT THE ABSENCE OF AN AMOUNT FOR THE PUMP STATION AMONG THE OTHER
ENTRIES IN THE RIGHT-HAND COLUMN OF COOKE'S WORKSHEETS INDICATES THAT A
MARK-UP ON THE $7,723 PRICE WAS INTENDED TO HAVE BEEN INCLUDED ON THE
WORKSHEET.
ONE OF THE ITEMS OF COST SHOWN ON COOKE'S WORKSHEET IS "ASSEMBLY &
TEST OF SPEC ITEMS 2000." WE HAVE BEEN INFORMALLY ADVISED BY COOKE THAT
THE FOREGOING SUM OF $2,000 INCLUDES AN AMOUNT TO COVER THE COST OF
INCORPORATING THE PUMP STATION INTO THE SPUTTER ETCH SYSTEM. COOKE'S
WORKSHEETS ARE CONSISTENT WITH THIS EXPLANATION. THEREFORE, WE FIND NO
BASIS FOR DISAGREEING WITH THE ADMINISTRATIVE CONCLUSION THAT THERE IS
NO EVIDENCE THAT ANY MARK-UP ON THE PUMP STATION PRICE, OTHER THAN THE
MARK-UPS ALREADY INCLUDED IN THE $7,723 AMOUNT, WAS INTENDED.
SECTION 2.406-3(A)(2) OF THE NASA PROCUREMENT REGULATION PROVIDES
THAT WHERE, AS IN THIS CASE, THERE IS CLEAR AND CONVINCING EVIDENCE
ESTABLISHING THE EXISTENCE OF AN ERROR IN BID AND THE BID ACTUALLY
INTENDED, CORRECTION OF THE BID IS AUTHORIZED, PROVIDED SUCH CORRECTION
WILL NOT RESULT IN DISPLACING ONE OR MORE LOWER ACCEPTABLE BIDS. SUCH
PROCEDURE HAS BEEN SANCTIONED BY OUR OFFICE AND THE COURT OF CLAIMS. 41
COMP. GEN. 160 (1961); B-172578, JULY 22, 1971; AND CHRIS BERG V.
UNITED STATES, 192 CT. CL. 176 (1970). THE COOKE BID WAS PROPERLY
CORRECTED IN ACCORDANCE WITH ESTABLISHED PROCEDURES.
WHILE YOU CONTEND THAT THE CHRIS BERG CASE, SUPRA, RELIED UPON BY THE
DIRECTOR OF PROCUREMENT IN HIS DETERMINATION OF MISTAKE, IS
DISTINGUISHABLE, THE PRINCIPLES OF LAW ANNOUNCED THEREIN ARE EQUALLY
APPLICABLE HERE SO FAR AS THEY RELATE TO THE CORRECTION OF THE PROVEN
ERROR.
ACCORDINGLY, THE PROTEST IS DENIED.
B-176980, JAN 3, 1973
MILITARY PERSONNEL - RESERVIST - PER DIEM - COMMUTING FROM HOME TO
PERMANENT DUTY STATION
DECISION AFFIRMING THE DENIAL OF A CLAIM BY CWO JOHN C. BEAM FOR PER
DIEM FOR THE PERIOD HE WAS ON ACTIVE DUTY FOR TRAINING AS A RESERVE
OFFICER AT OVERLAND, MO.
NO PER DIEM MAY BE PAID IN CASES WHERE A MEMBER OF A RESERVE
COMPONENT COMMUTES DAILY BETWEEN HIS HOME OR THE PLACE FROM WHICH HE WAS
CALLED TO ACTIVE DUTY AND THE PERMANENT DUTY STATION, JTR, PARA.
M6001-1A(2). MOREOVER, A MEMBER WHO RECEIVES A FAMILY SEPARATION
ALLOWANCE UNDER 37 U.S.C. 427(B)(1) IS NOT NECESSARILY ALSO ENTITLED TO
PER DIEM FOR THE SAME PERIOD. SEE 43 COMP. GEN. 650 (1964).
TO CHIEF WARRANT OFFICER JOHN C. BEAM:
WE AGAIN REFER TO YOUR LETTER OF AUGUST 14, 1972, REQUESTING REVIEW
OF OFFICE SETTLEMENT DATED AUGUST 8, 1972, WHICH DISALLOWED YOUR CLAIM
FOR PER DIEM FOR THE PERIOD JUNE 1, 1970, TO JUNE 23, 1971, WHILE ON
ACTIVE DUTY FOR TRAINING AS A CHIEF WARRANT OFFICER 3, UNITED STATES
ARMY RESERVE, AT OVERLAND (ST. LOUIS), MISSOURI.
BY LETTER ORDERS NO. T-05-951677, DATED MAY 4, 1970, OFFICE OF THE
ADJUTANT GENERAL, U.S. ARMY ADMINISTRATION CENTER, ST. LOUIS, MISSOURI,
YOU WERE ORDERED WITH YOUR CONSENT TO ACTIVE DUTY FOR TRAINING FOR A
PERIOD OF 120 DAYS AND DIRECTED TO REPORT NOT LATER THAN JUNE 1, 1970,
TO THAT CENTER. THOSE ORDERS SHOWED YOUR ADDRESS AS FERGUSON, MISSOURI.
ON SEPTEMBER 23, 1970, THAT CENTER ISSUED SIMILAR ORDERS DIRECTING
ADDITIONAL ACTIVE DUTY FOR TRAINING FOR 89 DAYS WITH THE FIRST DAY OF
TRAINING AS SEPTEMBER 29, 1970. THE LATTER ORDERS WERE AMENDED ON
DECEMBER 30, 1970, CHANGING THE PERIOD OF DUTY FROM 89 TO 119 DAYS. ON
JANUARY 28, 1971, THE SEPTEMBER 23, 1970, ORDERS WERE AGAIN AMENDED TO
FURTHER EXTEND THE PERIOD UNDER THE LATTER ORDERS TO 179 DAYS, AND ON
APRIL 20, 1971, AN ADDITIONAL AMENDMENT EXTENDED THAT PERIOD TO 268
DAYS.
COPIES OF PAID VOUCHERS ON FILE SHOW THAT YOU WERE PAID A MILEAGE
ALLOWANCE OF $0.36 FOR THE OFFICIAL DISTANCE BETWEEN FERGUSON AND
OVERLAND, MISSOURI, FOR TRAVEL PERFORMED FROM NEWTON, ILLINOIS, TO
OVERLAND, MAY 31 TO JUNE 1, 1970, BUT NO PER DIEM DURING THE ENTIRE
PERIOD YOU WERE ON ACTIVE DUTY FOR TRAINING AT THE U.S. ARMY
ADMINISTRATION CENTER. IN THIS CONNECTION, THE MONTHLY PAY VOUCHERS
COVERING THE PERIOD SEPTEMBER 1, 1970, TO JUNE 23, 1971, BEAR THE
STATEMENT "ON CONTINUOUS ADT UNDER MORE THAN ONE SET OF ORDERS."
IN A LETTER DATED JULY 30, 1970 (1971), YOU SAY THAT WHEN YOU WENT ON
ACTIVE DUTY FOR TRAINING YOUR HOME OF RECORD WAS ROUTE NO. 4, NEWTON,
ILLINOIS, AND THAT SINCE ONE OF THE REQUIREMENTS FOR SUCH DUTY WAS THAT
YOU MUST LIVE IN THE ST. LOUIS AREA, YOU WERE TOLD THAT YOU COULD USE
YOUR TEMPORARY ADDRESS IN THAT AREA (FERGUSON). YOU ALSO ADVISED THAT
YOU RENTED AN APARTMENT AND USED THE TEMPORARY ADDRESS. WHEN YOU
ASCERTAINED THAT RESERVE PERSONNEL ON DUTY AT STATIONS SIMILAR TO THE
ONE YOU WERE ATTACHED WERE RECEIVING PER DIEM YOU PRESENTED CLAIM
THEREFOR.
THE FINANCE CENTER, U.S. ARMY, INDIANAPOLIS, INDIANA, TRANSMITTED
YOUR CLAIM TO OUR CLAIMS DIVISION (NOW TRANSPORTATION AND CLAIMS
DIVISION) AND BY SETTLEMENT DATED AUGUST 8, 1972, IT WAS DISALLOWED FOR
THE REASON THAT YOU HAD COMMUTED DAILY BETWEEN YOUR DUTY STATION AND
RESIDENCE IN THE AREA AND, THEREFORE, PAYMENT OF PER DIEM IS PRECLUDED
BY PARAGRAPH M6001-1A, ITEM 2, OF THE JOINT TRAVEL REGULATIONS WHICH
PROVIDES THAT PER DIEM IS NOT PAYABLE TO A MEMBER OF A RESERVE COMPONENT
WHEN HE COMMUTES DAILY BETWEEN HIS HOME OR PLACE FROM WHICH HE WAS
CALLED (OR ORDERED) TO ACTIVE DUTY AND HIS PERMANENT DUTY STATION.
IN YOUR LETTER OF AUGUST 14, 1972, YOU SAY THAT FERGUSON WAS ONLY A
MAILING ADDRESS AND THAT THE U.S. ARMY ADMINISTRATION CENTER, IN ORDER
TO AVOID PAYMENT OF PER DIEM, WOULD NOT "CUT ORDERS" FOR AN INDIVIDUAL
NOT HAVING A ST. LOUIS MAILING ADDRESS. YOU ALSO SAY THAT PERSONNEL ON
ACTIVE DUTY ASSIGNED TO THE CENTER WERE PAID PER DIEM AND THAT ONE
RESERVIST RECEIVED PER DIEM FOR OVER A YEAR AND A HALF. IN CONTENDING
THAT YOU ARE ENTITLED TO PER DIEM YOU POINT OUT THAT YOU WERE PAID
FAMILY SEPARATION ALLOWANCE BECAUSE THE AUTHORITIES KNEW THAT YOUR HOME
WAS IN NEWTON.
SECTION 3 OF THE ACT OF DECEMBER 1, 1967, PUBLIC LAW 90-168, 81 STAT.
521, AMENDED SECTION 404(A) OF TITLE 37, UNITED STATES CODE, BY ADDING
CLAUSE (4) THERETO TO PROVIDE FOR PAYMENT, UNDER REGULATIONS PRESCRIBED
BY THE SECRETARIES CONCERNED, OF ALLOWANCES TO A MEMBER OF A UNIFORMED
SERVICE "WHEN AWAY FROM HOME TO PERFORM DUTY, INCLUDING DUTY BY A MEMBER
OF THE ARMY NATIONAL GUARD OF THE UNITED STATES OR THE AIR NATIONAL
GUARD OF THE UNITED STATES, AS THE CASE MAY BE, IN HIS STATUS AS A
MEMBER OF THE NATIONAL GUARD." THE PURPOSE OF SECTION 3 OF PUBLIC LAW
90-168 IS TO PERMIT THE PAYMENT OF PER DIEM TO RESERVISTS ORDERED FROM
THEIR HOMES FOR SHORT PERIODS (LESS THAN 20 WEEKS) OF ACTIVE DUTY
TRAINING AT TRAINING DUTY STATIONS OTHER THAN AT MILITARY INSTALLATIONS
WHERE GOVERNMENT QUARTERS AND MESS ARE AVAILABLE AND WE HAVE HELD THAT
THE PROVISIONS OF 37 U.S.C. 404(A)(4) SIMPLY PROVIDE AUTHORITY FOR THE
PAYMENT OF PER DIEM ON THAT BASIS EVEN THOUGH SUCH TRAINING DUTY
STATIONS IN FACT ARE THE MEMBERS' BASIC POSTS OF DUTY (PERMANENT DUTY
STATIONS). 48 COMP. GEN. 655 (1969).
IMPLEMENTING REGULATIONS ARE CONTAINED IN THE JOINT TRAVEL
REGULATIONS. PARAGRAPH M6001-1A(2) (CHANGE 209, DATED JUNE 1, 1970)
PROVIDES, THAT NO PER DIEM ALLOWANCES ARE PAYABLE IN CASES WHERE A
MEMBER OF A RESERVE COMPONENT COMMUTES DAILY BETWEEN HOME "OR PLACE FROM
WHICH CALLED (OR ORDERED) TO ACTIVE DUTY" AND THE PERMANENT DUTY
STATION.
AS INDICATED ABOVE, THE RECORD SHOWS THAT YOU WERE ORDERED TO ACTIVE
DUTY FROM FERGUSON, A PLACE LOCATED ABOUT 6 MILES FROM YOUR DUTY
STATION. YOU STATED THAT YOU RENTED AN APARTMENT THERE AND IT WAS
BELIEVED YOU COMMUTED DAILY BETWEEN THAT PLACE AND YOUR DUTY STATION.
YOU NOW CONTEND, HOWEVER, THAT FERGUSON WAS ONLY A MAILING ADDRESS AND
THAT YOUR HOME WAS NEWTON.
NO PER DIEM COULD HAVE BEEN PAID TO YOU BECAUSE OF THE RESTRICTION IN
THE ABOVE REGULATION NOTWITHSTANDING THAT YOUR HOME WAS IN NEWTON.
THEREFORE, WHETHER YOU COMMUTED FROM FERGUSON OR FROM SOME OTHER PLACE
LOCATED NEAR FERGUSON AND WITHIN THE VICINITY OF YOUR DUTY STATION WOULD
NOT SERVE TO ENTITLE YOU TO THE ALLOWANCE CONTRARY TO THE GOVERNING
REGULATION.
YOUR CONTENTION THAT YOU ARE ENTITLED TO THE PER DIEM ALLOWANCE
BECAUSE YOU RECEIVED A FAMILY SEPARATION ALLOWANCE DURING YOUR PERIOD OF
ACTIVE DUTY FOR TRAINING IS WITHOUT MERIT. IN OUR DECISION OF APRIL 2,
1964, 43 COMP. GEN. 650 COPY ENCLOSED, WE SAID, IN ANSWER TO QUESTION 4,
ON PAGE 656, THAT IT IS OUR VIEW THAT A RESERVIST OF AN ELIGIBLE GRADE
AND WITH DEPENDENTS WHO IS ORDERED TO ACTIVE DUTY FOR TRAINING FOR LESS
THAN 1 YEAR OR TO ACTIVE DUTY FOR OTHER THAN TRAINING DUTY FOR LESS THAN
6 MONTHS, BUT FOR A PERIOD OF MORE THAN 30 DAYS, IS ENTITLED TO A FAMILY
SEPARATION ALLOWANCE UNDER 37 U.S.C. 427(B)(1) IF HIS DEPENDENTS DO NOT
RESIDE AT OR NEAR HIS STATION, SINCE THE MOVEMENT OF HIS DEPENDENTS TO
HIS PERMANENT DUTY STATION IS NOT AUTHORIZED AT GOVERNMENT EXPENSE.
SINCE QUESTION 4 RELATED TO A RESERVIST ORDERED TO ACTIVE DUTY FOR
TRAINING FOR A PERIOD OF 45 DAYS AWAY FROM THE RESERVE UNIT TO WHICH HE
WAS ATTACHED FOR DRILL PURPOSES AND HE HAD NO ACTIVE DUTY STATION OTHER
THAN THE STATION TO WHICH HE WAS ORDERED FOR TRAINING DUTY, WE CONCLUDED
THAT SINCE THE ASSIGNMENT WAS IN EXCESS OF 30 DAYS, THE TRAINING DUTY
STATION SHOULD BE REGARDED AS THE MEMBER'S PERMANENT STATION FOR FAMILY
SEPARATION ALLOWANCE PURPOSES AND THAT HE WAS ENTITLED TO THE ALLOWANCE
UNDER CLAUSE (1) RATHER THAN CLAUSE (3) OF 37 U.S.C. 427(B) IF HE
OTHERWISE QUALIFIED.
UNDER THE AUTHORITY OF 43 COMP. GEN. 650 YOU WERE PAID THE FAMILY
SEPARATION ALLOWANCE FOR THE PERIOD YOU WERE ON ACTIVE DUTY FOR
TRAINING. THAT DECISION, HOWEVER, DOES NOT SERVE AS AUTHORITY FOR THE
PAYMENT OF THE PER DIEM TO YOU INCIDENT TO THAT TOUR OF DUTY. AS
INDICATED ABOVE, THE GOVERNING LAW AND REGULATIONS EXPRESSLY PRECLUDE
THE PAYMENT OF THE PER DIEM ALLOWANCE TO YOU SINCE YOU WERE ORDERED TO
DUTY FROM A PLACE WITHIN COMMUTING DISTANCE OF YOUR DUTY STATION.
CONCERNING YOUR STATEMENT THAT A RESERVIST AT YOUR STATION WAS PAID
PER DIEM FOR OVER ONE AND ONE-HALF YEARS, IF THE FACTS AND CIRCUMSTANCES
IN HIS CASE ARE IDENTICAL TO THOSE IN YOUR CASE, THEN THE PAYMENTS WERE
IMPROPER AND WILL BE FOR CONSIDERATION IN THE AUDIT OF THE DISBURSING
OFFICERS' ACCOUNTS. CLEARLY, SUCH ERRONEOUS PAYMENTS DO NOT AFFORD A
BASIS FOR A LIKE PAYMENT TO YOU.
ACCORDINGLY, THE SETTLEMENT OF AUGUST 8, 1972, IS SUSTAINED.
B-177246, JAN 3, 1973
CIVILIAN PERSONNEL - PER DIEM - ACADEMIC TRAINING COURSES
DECISION AFFIRMING THE DENIAL OF THE CLAIM OF ELI J. DWORKIN FOR
ADDITIONAL PER DIEM IN LIEU OF SUBSISTENCE FOR PART OF THE PERIOD HE
PARTICIPATED IN FULL TIME TRAINING AT THE UNIVERSITY OF INDIANA AS A
RECEPIENT OF A CAREER EDUCATION AWARD WHILE EMPLOYED BY THE DEPARTMENT
OF THE ARMY, FT. MONMOUTH, N.J.
THE EMPLOYEE'S PER DIEM RATE OF $14 WHILE ATTENDING ACADEMIC YEAR
TRAINING COURSES AT ANY COLLEGE OR UNIVERSITY WAS EFFECTIVE FEBRUARY 1,
1971, EVEN IF THE ORDERS AUTHORIZING TRAVEL FOR THE ENTIRE ACADEMIC YEAR
WERE ISSUED BEFORE THAT DATE, CF. B-160985, MARCH 17, 1967 AND EVEN IF
THE EMPLOYEE WAS NOT NOTIFIED OF THE RATE CHANGE. SEE B-163891, MAY 29,
1968.
TO MR. ELI J. DWORKIN:
WE REFER TO YOUR LETTER OF SEPTEMBER 15, 1972, BY WHICH YOU REQUEST
OUR REVIEW OF THE CLAIMS SETTLEMENT ISSUED SEPTEMBER 12, 1972,
DISALLOWING YOUR CLAIM FOR ADDITIONAL PER DIEM IN LIEU OF SUBSISTENCE
FOR PART OF THE PERIOD YOU WERE PARTICIPATING IN FULL-TIME TRAINING AT
THE UNIVERSITY OF INDIANA AS A RECIPIENT OF A CAREER EDUCATION AWARD
WHILE EMPLOYED BY THE DEPARTMENT OF THE ARMY, FORT MONMOUTH, NEW JERSEY.
IN CONNECTION WITH YOUR TRAINING ASSIGNMENT YOU WERE ISSUED A SERIES
OF TRAVEL ORDERS RATHER THAN A SINGLE ORDER AS A MEANS OF AUTHORIZING
YOUR RETURN TO YOUR OFFICIAL STATION DURING BREAKS IN TRAINING DUE TO
SCHOOL HOLIDAYS. EACH OF THE ORDERS UNDER WHICH YOU TRAVELED WAS ISSUED
ON MAY 26, 1970, AND, IN ACCORDANCE WITH REGULATIONS IN FORCE AT THAT
TIME, THE ORDERS PROVIDED FOR PER DIEM AT THE MAXIMUM RATE FOR THE FIRST
30 DAYS OF TRAINING AND AT A RATE OF $20 FOR THE REMAINDER OF THE
ACADEMIC YEAR. HOWEVER, PER DIEM ALLOWED YOU FOR THE LATTER PART OF
YOUR TRAINING DUTY WAS REDUCED TO $14 UNDER PARAGRAPH C8101 OF THE JOINT
TRAVEL REGULATIONS AS AMENDED EFFECTIVE FEBRUARY 1, 1971.
THE AMENDED PARAGRAPH PROVIDES AS FOLLOWS:
"(EFFECTIVE 1 FEBRUARY 1971)
"M. PER DIEM RATES FOR ACADEMIC YEAR TRAINING COURSES.
A PER DIEM RATE OF $14 IS PRESCRIBED WHILE ATTENDING ACADEMIC YEAR
TRAINING COURSES AT ANY COLLEGE OR UNIVERSITY WITHIN THE CONTINENTAL
UNITED STATES, EXCEPT AS OTHERWISE SPECIFIED IN APPENDIX C, PART III."
WHILE YOU WERE NOT ADVISED OF THE CHANGE IN THE PER DIEM RATE
AUTHORIZED FOR ACADEMIC YEAR TRAINING THE AMENDMENT OF THE JOINT TRAVEL
REGULATIONS BY WHICH THAT CHANGE WAS MADE BECAME EFFECTIVE FEBRUARY 1,
1971, AND NO PROVISION WAS MADE FOR A DELAY IN THAT EFFECTIVE DATE BASED
ON PREVIOUSLY ISSUED TRAVEL ORDERS WHICH AUTHORIZED SOME OTHER RATE OF
PER DIEM. THE AMENDED REGULATION HAD THE FORCE AND EFFECT OF LAW AND
WAS APPLICABLE FROM THE STATED EFFECTIVE DATE REGARDLESS OF WHETHER
INDIVIDUAL EMPLOYEES INVOLVED RECEIVED TIMELY NOTICE OF THE CHANGE.
THEREFORE, THE FACT THAT YOU WERE NOT NOTIFIED OF THE CHANGE IN THE
ALLOWABLE PER DIEM RATE UNTIL SOME TIME AFTER THE CHANGE WAS MADE,
ALTHOUGH REGRETTABLE, MAY NOT BE USED AS A BASIS FOR ALLOWING YOU PER
DIEM AT A RATE IN EXCESS OF THAT PRESCRIBED BY REGULATION. SEE
B-163891, MAY 29, 1968, COPY ENCLOSED.
CONCERNING YOUR CONTENTION THAT THE QUOTED REGULATION IS NOT
APPLICABLE IN YOUR CASE BECAUSE YOU WERE PROVIDED A SERIES OF TRAVEL
ORDERS NONE OF WHICH AUTHORIZED TRAVEL FOR A FULL ACADEMIC YEAR, IT WAS
RECOGNIZED WHEN THE TRAVEL ORDERS WERE ISSUED THAT YOU WERE TO
PARTICIPATE IN TRAINING FOR A FULL ACADEMIC YEAR. THE QUOTED REGULATION
IS APPLICABLE TO EMPLOYEES ATTENDING SUCH ACADEMIC YEAR TRAINING
COURSES. NO SPECIAL REQUIREMENTS WERE PRESCRIBED LIMITING THE
APPLICABILITY OF SUCH RATE BASED ON THE ISSUANCE OF A SINGLE OR MULTIPLE
TRAVEL ORDER OR ON THE BASIS OF THE EMPLOYEE'S RETURN TO HIS OFFICIAL
STATION DURING SCHOOL VACATION PERIODS. SINCE YOU WERE ASSIGNED TO AN
ACADEMIC YEAR TRAINING COURSE THE REGULATION IS CONSIDERED APPLICABLE TO
YOUR TRAVEL EVEN THOUGH THE FULL PERIOD OF YOUR TRAINING DUTY WAS NOT
COVERED BY A SINGLE TRAVEL ORDER. CF. B-160985, MARCH 17, 1967, COPY
ENCLOSED.
SINCE NO SPECIAL RATE OF PER DIEM WAS AUTHORIZED FOR TRAINING AT THE
UNIVERSITY OF INDIANA THE RATE PRESCRIBED IN THE QUOTED REGULATION OF
$14 WAS THE ONLY RATE PROPERLY PAYABLE TO YOU FOR TRAINING DUTY
PERFORMED AFTER THE EFFECTIVE DATE OF THAT REGULATION.
FOR THE REASONS STATED THE SETTLEMENT OF THE TRANSPORTATION AND
CLAIMS DIVISION IS SUSTAINED.
B-177255, JAN 3, 1973
MILITARY PERSONNEL - UNVERIFIED STALE CLAIM
DECISION AFFIRMING DENIAL OF THE CLAIM OF SSG GEORGE L. BISTANY FOR
TRAVEL ALLOWANCES INCIDENT TO TEMPORARY DUTY PERFORMED IN TAINAN,
TAIWAN, IN 1957 AS A MEMBER OF THE U.S. AIR FORCE.
A CLAIM BASED UPON MERE DENIAL OF RECEIPT OF AMOUNTS DUE MADE LONG
AFTER THE CLAIM ACCRUED, WHICH CANNOT BE VERIFIED BY GOVERNMENT RECORDS
SINCE THEY WERE DESTROYED IN ACCORDANCE WITH LAW, MAY NOT BE ALLOWED. 4
COMP. GEN. 805 (1925).
TO SSGT. GEORGE L. BISTANY:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 25, 1972, IN
EFFECT REQUESTING REVIEW OF THE ACTION OF OUR TRANSPORTATION AND CLAIMS
DIVISION BY LETTER DATED SEPTEMBER 19, 1972, IN WHICH YOU WERE ADVISED
THAT IN THE ABSENCE OF CLEAR AND SATISFACTORY EVIDENCE OF VALIDITY AND
NONPAYMENT OF TRAVEL ALLOWANCES INCIDENT TO TEMPORARY DUTY PERFORMED AT
TAINAN, TAIWAN, DURING THE PERIOD FROM OCTOBER 5 TO DECEMBER 23, 1957,
WHILE A MEMBER OF THE UNITED STATES AIR FORCE YOUR CLAIM MAY NOT BE
CONSIDERED.
OUR RECORDS SHOW THAT BY LETTER DATED APRIL 12, 1971, YOU MADE CLAIM
TO THE AIR FORCE ACCOUNTING AND FINANCE CENTER, DENVER, COLORADO, FOR
TRAVEL ALLOWANCES IN CONNECTION WITH TEMPORARY DUTY PERFORMED UNDER
SPECIAL ORDERS NO. 864, DATED OCTOBER 3, 1958, WHICH DIRECTED YOU TO
PROCEED ON OR ABOUT OCTOBER 3, 1958, TO TACHIKAWA AIR BASE JAPAN AND
TAINAN, TAIWAN, ON TEMPORARY DUTY FOR APPROXIMATELY 30 DAYS AND RETURN
TO YOUR STATION. TRAVEL WAS AUTHORIZED BY MILITARY AIRCRAFT, GOVERNMENT
VEHICLE AND/OR COMMERCIAL FACILITIES AND YOU WERE DIRECTED TO HAVE IN
YOUR POSSESSION FIELD EQUIPMENT AND/OR SLEEPING BAG. YOU FURNISHED A
STATEMENT CERTIFYING THAT TO THE BEST OF YOUR KNOWLEDGE YOU HAVE NEVER
BEEN REIMBURSED FOR YOUR TEMPORARY DUTY TRIP TO TAINAN, TAIWAN, IN
OCTOBER 1958.
YOUR CLAIM WAS FIRST RECEIVED IN THE GENERAL ACCOUNTING OFFICE ON
JUNE 16, 1972. A REPORT WAS REQUESTED FROM THE AIR FORCE WHICH
DISCLOSED THAT TRAVEL VOUCHERS FOR THE PERIOD OF YOUR TRAVEL HAVE BEEN
DESTROYED AND ARE NOT AVAILABLE FOR REVIEW. IT IS FURTHER REPORTED THAT
PAY RECORDS ARE DESTROYED AFTER 10 YEARS AND ARE NO LONGER AVAILABLE TO
VERIFY WHETHER THE TRAVEL PAYMENT WAS POSTED TO THE RECORD OF TRAVEL
PAYMENTS.
IN YOUR LETTER OF SEPTEMBER 25, 1972, YOU CONTEND THAT CLEAR AND
SATISFACTORY EVIDENCE ESTABLISHING YOUR CLAIM HAS BEEN FURNISHED.
HOWEVER, NO RECORD IS NOW AVAILABLE TO ESTABLISH THAT YOU WERE NOT
CURRENTLY PAID ALL THE TRAVEL ALLOWANCES TO WHICH YOU WERE ENTITLED.
YOU FURNISHED NO NEW EVIDENCE AND A CLAIM BASED ON THE MERE DENIAL OF
RECEIPT OF AMOUNTS DUE MADE LONG AFTER THE CLAIM ACCRUED AND PAYMENT IS
PRESUMED TO HAVE BEEN RECEIVED IS OF TOO DOUBTFUL LEGALITY TO SUPPORT
THE PAYMENT FROM PUBLIC FUNDS OF THE AMOUNTS CLAIMED.
THE ACCOUNTING OFFICERS OF THE GOVERNMENT HAVE CONSISTENTLY REFUSED
TO ALLOW A STALE CLAIM WHETHER OR NOT THE CLAIMANT WAS AWARE OF HIS
ENTITLEMENT FROM THE DATE OF ITS ACCRUAL WHEN SUCH CLAIM WAS BASED
SOLELY ON STATEMENTS BY THE CLAIMANT WHICH CANNOT BE VERIFIED OR
CORROBORATED BY GOVERNMENT RECORDS WHICH HAVE BEEN DESTROYED IN
ACCORDANCE WITH LAW. 4 COMP. GEN. 805 (1925). WHERE A CLAIMANT HAS
SLEPT ON HIS RIGHTS FOR A LONG PERIOD OF TIME THE PRESUMPTION ARISES
THAT HIS CLAIM NEVER WAS VALID OR THAT IT HAS ALREADY BEEN PAID. THE
BURDEN DOES NOT REST UPON THIS OFFICE TO REFUTE CLAIMS FOR SETTLEMENT,
BUT RATHER IT IS ON CLAIMANTS TO FURNISH EVIDENCE CLEARLY AND
SATISFACTORILY PROVING THE VALIDITY AND NONPAYMENT OF A CLAIM. 18 COMP.
GEN. 980 (1939), 31 COMP. GEN. 340 (1952).
FURTHERMORE, IT HAS LONG BEEN THE RULE THAT THE GOVERNMENT ACCOUNTING
AND ADMINISTRATIVE OFFICERS SHOULD REJECT OR DISALLOW ALL CLAIMS AS TO
WHICH THEY BELIEVE THERE MAY BE A SUBSTANTIAL DEFENSE IN LAW OR AS TO
THE VALIDITY OF WHICH THEY ARE IN DOUBT AND LEAVE THE CLAIMANTS TO
PURSUE THEIR REMEDY IN THE COURTS. SEE LENGWILL V. UNITED STATES, 17
CT. CL. 288, 291 (1881) AND CHARLES V. UNITED STATES, 19 CT. CL. 316,
319 (1884). HOWEVER, YOUR ATTENTION IS INVITED TO 28 U.S.C. 2501 WHICH
PROVIDES THAT EVERY CLAIM OF WHICH THE COURT OF CLAIMS HAS JURISDICTION
SHALL BE BARRED UNLESS THE PETITION THEREON IS FILED WITHIN 6 YEARS
AFTER SUCH CLAIM FIRST ACCRUED.
IN VIEW OF THE FOREGOING, THE ACTION TAKEN BY OUR TRANSPORTATION AND
CLAIMS DIVISION IS SUSTAINED.
B-177267, JAN 3, 1973
CIVILIAN PERSONNEL - PER DIEM - PREMATURE TRAVEL
DECISION DENYING THE CLAIM OF GERALD A. HOLMES, AN EMPLOYEE OF THE
DEPARTMENT OF THE AIR FORCE, FOR ADDITIONAL PER DIEM IN LIEU OF
SUBSISTENCE.
AN ADMINISTRATIVE OFFICIAL MAY COMPUTE PER DIEM ON A CONSTRUCTIVE
BASIS WHERE AN EMPLOYEE PREMATURELY DEPARTS FOR A TEMPORARY DUTY
STATION. SEE JTR, VOL. 2, PARA. C6000. ALSO, AN EMPLOYEE IS NOT
ENTITLED TO PER DIEM FOR A DAY OF TRAVEL FOR WHICH THERE WAS NO OFFICAL
NECESSITY, EVEN IF HE WAS MISINFORMED BY A TRANSPORTATION OFFICER AS TO
WHEN HE WOULD HAVE TO TRAVEL IN ORDER TO COMPLY WITH HIS ORDERS. SEE
B-147614, DECEMBER 28, 1961.
TO CPT. GERALD A. REASOR:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 5, 1972,
REFERENCE 1840 ACF (CAPT REASOR/3107), REQUESTING A DECISION CONCERNING
THE PROPRIETY OF PAYING A SUPPLEMENTAL TRAVEL VOUCHER FOR ADDITIONAL PER
DIEM IN LIEU OF SUBSISTENCE IN FAVOR OF MR. GERALD A. HOLMES, AN
EMPLOYEE OF YOUR AGENCY.
BY TRAVEL AUTHORIZATION DATED APRIL 25, 1972, MR. HOLMES WAS ORDERED
TO PROCEED ON OR ABOUT MAY 15, 1972, FROM RICHARDS-GEBAUR AIR FORCE
BASE, MISSOURI, TO KEESLER AIR FORCE BASE, MISSISSIPPI, IN ORDER TO
ATTEND A COURSE STARTING ON MAY 17, 1972. THE ORDERS REQUIRED MR.
HOLMES TO REPORT BETWEEN 0800 AND 1600 HOURS ON MAY 16, 1972. TRAVEL
WAS PERFORMED BY GOVERNMENT TRANSPORTATION REQUEST. MR. HOLMES LEFT HIS
RESIDENCE AT 0815 HOURS ON MAY 15, 1972, AND ARRIVED AT KEESLER AIR
FORCE BASE AT 1445 HOURS THAT AFTERNOON. HIS TRAVEL VOUCHER WAS PAID ON
THE BASIS OF CONSTRUCTIVE TRAVEL COMMENCING APPROXIMATELY AT THE SAME
HOUR ON MAY 16, 1972. MR. HOLMES RECLAIMS 1 DAY PER DIEM ON THE GROUNDS
THAT (1) THE FINANCE OFFICER HAS NO AUTHORITY TO UTILIZE A CONSTRUCTIVE
TRAVEL SCHEDULE WHEN AN EMPLOYEE TRAVELS VIA A GOVERNMENT TRANSPORTATION
REQUEST AND (2) HE ATTEMPTED TO OBTAIN TRANSPORTATION ON MAY 16, 1972,
BUT WAS INFORMED BY THE TRANSPORTATION OFFICER THAT HE WOULD HAVE TO
DEPART ON MAY 15, 1972, IN ORDER TO ARRIVE AT HIS TEMPORARY DUTY POINT
BY 1600 HOURS ON MAY 16, 1972. YOU REQUEST OUR DECISION AS TO WHETHER
PARAGRAPH C6000, VOLUME 2, JOINT TRAVEL REGULATIONS (JTR), AUTHORIZES A
FINANCE OFFICER TO MAKE A CONSTRUCTIVE AIR TRAVEL SCHEDULE FOR CIVILIAN
EMPLOYEES TRAVELING VIA GOVERNMENT TRANSPORTATION REQUEST FOR USE IN
COMPUTING PER DIEM AND CHARGING THE EMPLOYEE WITH THE APPROPRIATE TYPE
OF LEAVE FOR EXCESS TRAVEL TIME. YOU ALSO ASK, IF OUR ANSWER TO YOUR
FIRST QUESTION IS IN THE AFFIRMATIVE, WHETHER AN UNSUBSTANTIATED
STATEMENT FROM AN EMPLOYEE, AS TO THE NONAVAILABILITY OF COMMERCIAL
TRANSPORTATION, MAY BE USED AS THE BASIS FOR PAYING PER DIEM IN AN
AMOUNT GREATER THAN A STRAIGHT CONSTRUCTIVE TIME WOULD PROVIDE.
PARAGRAPH C6000, VOLUME 2, JTR, PROVIDES AS FOLLOWS:
"C6000 ROUTING
"TRAVEL PERFORMED OTHER THAN BY THE USUALLY TRAVELED ROUTE MUST BE
JUSTIFIED AS OFFICIALLY NECESSARY. WHEN, FOR HIS OWN CONVENIENCE, A
PERSON TRAVELS BY AN INDIRECT ROUTE OR INTERRUPTS TRAVEL BY A DIRECT
ROUTE, THE EXTRA EXPENSE WILL BE BORNE BY HIM, WITH REIMBURSEMENT BASED
ONLY ON SUCH CHARGES AS WOULD HAVE BEEN INCURRED BY A USUALLY TRAVELED
ROUTE (SEE CHAPTER 10). WHEN USED, TRANSPORTATION REQUESTS WILL BE
ISSUED ONLY FOR THAT PORTION OF THE TRIP PROPERLY CHARGEABLE TO THE
GOVERNMENT, WITH ANY ADDITIONAL PERSONAL EXPENSE BEING PAID BY THE
EMPLOYEE TO THE CARRIER IN CASH, INCLUDING THE FEDERAL TRANSPORTATION
TAX. ANY EXCESS TRAVEL TIME NOT JUSTIFIED AS OFFICIALLY NECESSARY WILL
BE CHARGED TO THE APPROPRIATE TYPE OF LEAVE."
IN PERFORMING OFFICIAL TRAVEL A GOVERNMENT EMPLOYEE IS REQUIRED TO
PROCEED AS EXPEDITIOUSLY AS HE WOULD IF TRAVELING ON HIS PERSONAL
BUSINESS. SEE SECTION 1.2 OF THE STANDARDIZED GOVERNMENT TRAVEL
REGULATIONS, 5 U.S.C. 5733, AND B-171146, FEBRUARY 18, 1971.
ACCORDINGLY, WE ARE OF THE OPINION THAT, WHILE PARAGRAPH C6000, VOLUME
2, JTR, DOES NOT SPECIFICALLY REFER TO PREMATURE DEPARTURE, IT PROVIDES
AUTHORITY IN SUCH A CASE FOR ADMINISTRATIVE OFFICIALS TO COMPUTE PER
DIEM ON A CONSTRUCTIVE BASIS AND TO CHARGE EXCESS TRAVEL TIME NOT
JUSTIFIED AS OFFICIALLY NECESSARY TO THE APPROPRIATE TYPE OF LEAVE.
REGARDING YOUR SECOND QUESTION, IT IS OUR VIEW THAT AN EMPLOYEE'S
UNSUBSTANTIATED STATEMENT AS TO THE NONAVAILABILITY OF COMMERCIAL
TRANSPORTATION SHOULD NOT ORDINARILY BE USED AS THE BASIS FOR PAYING PER
DIEM IN AN AMOUNT GREATER THAN A STRAIGHT CONSTRUCTIVE TIME WOULD
PROVIDE. THE EMPLOYEE'S STATEMENT SHOULD BE VERIFIED BY A
TRANSPORTATION OFFICER OR, IN A CASE INVOLVING A DISPUTE BETWEEN HIM AND
AN EMPLOYEE, BY THE CARRIER.
IN THE INSTANT CASE THE RECORD INDICATES THAT MR. HOLMES MAY HAVE
BEEN MISINFORMED BY THE TRANSPORTATION OFFICER AS TO WHEN HE WOULD HAVE
TO TRAVEL TO COMPLY WITH HIS ORDERS. HOWEVER, WHILE THE TRAVEL ON MAY
15, 1972, APPEARS TO HAVE RESULTED FROM AN ADMINISTRATIVE ERROR, THIS
WOULD NOT ENTITLE MR. HOLMES TO AN ADDITIONAL DAY OF PER DIEM SINCE
THERE WAS NO OFFICIAL NECESSITY FOR TRAVEL ON THAT DAY. SEE B-147614,
DECEMBER 28, 1961; B-171146, FEBRUARY 18, 1971, COPIES ENCLOSED. IN
VIEW OF THE ABOVE THE SUPPLEMENTAL VOUCHER IS FOR DISALLOWANCE AND IS
RETAINED HERE.
B-177410, JAN 3, 1973
CONTRACTS - ADDITIONAL PAYMENT - MISTAKE IN BID - QUANTUM VALEBANT
DECISION ALLOWING PAYMENT OF AN ADDITIONAL AMOUNT TO PALMER-SHILE
COMPANY UNDER A CONTRACT AWARDED TO IT BY THE GENERAL SERVICES
ADMINISTRATION FOR CANTILEVER RACKS WITH ARMS.
A CONTRACTOR IS ENTITLED TO PAYMENT ON A QUANTUM VALEBANT BASIS FOR
PERFORMANCE OF A CONTRACT WHERE IT MADE AN ERROR IN ITS BID IF THE
CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE
ERROR, AND THE CONTRACT WAS PERFORMED NOTWITHSTANDING THE PENDENCY OF
THE CLAIM FOR RELIEF DUE TO THE PROCUREMENT'S URGENCY.
TO MR. ARTHUR F. SAMPSON:
BY LETTER DATED NOVEMBER 7, 1972, WITH ENCLOSURES, THE GENERAL
COUNSEL RECOMMENDED THAT, IN ADDITION TO THE $10,829.30 PAID UNDER
NEGOTIATED CONTRACT NO. GS-08S-29863, WITH THE PALMER-SHILE COMPANY FOR
A QUANTITY OF CANTILEVER RACKS WITH ARMS, THERE BE AUTHORIZED AN
ADDITIONAL PAYMENT OF $11,803.20.
AFTER THE CONTRACT WAS AWARDED, THE PALMER-SHILE COMPANY INQUIRED
WHETHER THE RACKS WERE TO BE WITHOUT ARMS. UPON ADVICE THAT ARMS WERE
REQUIRED ON THE RACKS AS PROVIDED IN THE PURCHASE DESCRIPTION THAT WAS
ATTACHED TO THE SOLICITATION, PALMER-SHILE ADVISED THAT IT HAD NOT
INCLUDED THE PRICE OF ARMS IN ITS OFFER. THE OMISSION WAS OCCASIONED BY
A MODIFICATION OF PAST PROCUREMENT PRACTICES ON THE PART OF THE GENERAL
SERVICES ADMINISTRATION. PALMER-SHILE WAS ACCUSTOMED TO HAVING THE
QUANTITY OF ARMS REQUIRED FOR THE RACKS SET FORTH SEPARATELY IN THE
SOLICITATION DOCUMENT.
THE PALMER-SHILE OFFER WAS THE ONLY ONE RECEIVED ON THE RACKS. THE
CONTRACTING OFFICER COMPOUNDED THE PALMER-SHILE ERROR BY COMPARING THE
PRICES IN THE OFFER WITH PRICES OR A PREVIOUS PROCUREMENT OF RACKS
WITHOUT ARMS. IF THE PRICES IN THE OFFER HAD BEEN COMPARED WITH PRICES
PREVIOUSLY PAID FOR RACKS WITH ARMS, THE CONTRACTING OFFICER MORE THAN
LIKELY WOULD HAVE REQUESTED VERIFICATION OF THE OFFER DUE TO THE
SUBSTANTIAL DIFFERENCE BETWEEN THE TWO. IN THIS CONTEXT, IT IS
REASONABLE TO ASSUME THAT UPON VERIFICATION, PALMER-SHILE WOULD HAVE
DISCOVERED THE MISTAKE, AND WOULD HAVE ASSERTED ITS CLAIM FOR RELIEF.
B-174627, DECEMBER 29, 1971.
BECAUSE OF THE URGENCY OF THE PROCUREMENT, THE CONTRACTOR WAS
DIRECTED TO AND DID PERFORM THE CONTRACT NOTWITHSTANDING THE PENDENCY OF
THE CLAIM FOR RELIEF. IN THE CIRCUMSTANCES, PALMER-SHILE IS ENTITLED TO
PAYMENT ON A QUANTUM VALEBANT BASIS FOR THE EQUIPMENT DELIVERED.
B-176899, NOVEMBER 24, 1972. INASMUCH AS THE CONTRACTING OFFICER HAS
DETERMINED ON THE BASIS OF PREVIOUS PURCHASES THAT THE ADDITIONAL COST
AS REQUESTED BY PALMER-SHILE IS $11,803.20, AN ADDITIONAL PAYMENT IN
THAT AMOUNT MAY BE MADE.
B-177574, JAN 3, 1973
CONTRACTS - PRICE REFORMATION - MISTAKE IN BID
DECISION ALLOWING CORRECTION IN THE PRICE OF A CONTRACT AWARDED TO
DISPOSOWASTE, INC., BY THE CENTER FOR DISEASE CONTROL, ATLANTA, GA., FOR
PICK UP AND DISPOSAL OF WASTE.
A CONTRACT CAN BE REFORMED ONLY ON THE BASIS OF CLEAR AND CONVINCING
EVIDENCE THAT A MISTAKE IN BID WAS MADE AND THE MISTAKE WAS SO APPARENT
AS TO HAVE CHARGED THE CONTRACTING OFFICER WITH NOTICE OF THE
PROBABILITY OF THE MISTAKE. SEE B-152435, NOVEMBER 8, 1963.
TO MR. JOHN M. DONOVAN JR.:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 30, 1972, WITH WHICH YOU
ENCLOSED A REPORT OF A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT
NO. HSM-21-72-21 TO DISPOSOWASTE, INCORPORATED (DISPOSOWASTE) BY THE
CENTER FOR DISEASE CONTROL (CDC), ATLANTA, GEORGIA. THIS MATTER WAS
FORWARDED TO OUR OFFICE FOR A DETERMINATION, IN ACCORDANCE WITH FEDERAL
PROCUREMENT REGULATIONS (FPR) 1-2.406-4(I), AS TO WHETHER THE CONTRACT
MAY BE REFORMED.
THE REPORT STATES THAT SOLICITATION NO. 103-71 WAS ISSUED ON JUNE 9,
1971, FOR THE FURNISHING OF SUPPLIES, EQUIPMENT, AND LABOR TO PICK UP
AND DISPOSE OF WASTE FROM THE PREMISES OF CDC IN ATLANTA AND CHAMBLEE,
GEORGIA, FROM THE TIME OF CONTRACT AWARD THROUGH JUNE 30, 1972. BIDS
WERE OPENED ON JUNE 30, 1971.
THE CONTRACT REQUIRED USE OF SPECIFIC TYPES OF EQUIPMENT, AND THE BID
FORMS PROVIDED SPACES FOR BIDDERS TO INSERT THEIR RENTAL RATES PER MONTH
FOR THIS EQUIPMENT, AS WELL AS THEIR PICKUP RATE PER MONTH.
DISPOSOWASTE'S BID UNDER ITEM 1A CONTAINED A MONTHLY RENTAL OF $199 AND
A MONTHLY PICKUP RATE OF $49 FOR 40-CUBIC YARD CONTAINERS. IN
CONSIDERING THE BID, THE CONTRACTING OFFICER WAS NOT ALERTED TO ANY
DISCREPANCY IN THE ITEM BID PRICES. SINCE DISPOSOWASTE WAS THE ONLY
BIDDER, IT WAS AWARDED THE CONTRACT ON JULY 2, 1971.
PERFORMANCE UNDER THE CONTRACT HAS NOW BEEN SATISFACTORILY COMPLETED.
HOWEVER, DURING THE LAST MONTH OF THE CONTRACT PERIOD, CONTRACTING
PERSONNEL WERE NOTIFIED THAT THE CONTRACTOR HAD INVOICED, AND PAYMENT
HAD BEEN MADE, THROUGHOUT THE CONTRACT PERIOD AT A RATE OF $49 PER
PICKUP (WITH APPROXIMATELY 4-1/3 PICKUPS PER MONTH), RATHER THAN AT THE
CONTRACT-STIPULATED RATE OF $49 PER MONTH. ON JULY 13, 1972, CDC
NOTIFIED DISPOSOWASTE THAT AN ADJUSTMENT WOULD BE MADE IN THE PAYMENT
FOR ITS JUNE INVOICE FOR THE OVERPAYMENTS MADE ON THE PREVIOUS INVOICES.
UPON RECEIPT OF THIS NOTIFICATION, DISPOSOWASTE SUBMITTED A LETTER
DATED JULY 18, 1972, ALLEGING THAT IT HAD MADE A MISTAKE IN BID, AND
CLAIMING IT HAD FIRST NOTICED THE MISTAKE UPON RECEIPT OF CDC'S JULY 13
LETTER. IN ITS JULY 18 LETTER DISPOSOWASTE POINTED OUT THAT IN
TELEPHONE CONVERSATIONS WITH THE PROCURING AUTHORITY REGARDING THE
SOLICITATION ON THE PRIOR YEAR'S SERVICES, THE DIFFICULTY OF PRICING ON
A FLAT MONTHLY BASIS WAS DISCUSSED AND AGREEMENT WAS REACHED TO PRICE
THE PICKUPS OF 40-CUBIC YARD CONTAINERS ON A PER LOAD BASIS, AND THAT IT
FOLLOWED A SIMILAR PROCEDURE ON THE PRESENT PROCUREMENT.
ATTACHED TO THIS LETTER WERE A COPY OF THE CONTRACTOR'S ORIGINATING
INVOICE FOR THE INSTANT CONTRACT AND A COPY OF THE WORKING PAPERS USED
BY THE CONTRACTOR IN CALCULATION OF ITS BID.
YOUR REPORT POINTS OUT THAT ON PAGE 6 OF DISPOSOWASTE'S BID $49 WAS
STIPULATED AS THE COST FOR EACH ADDITIONAL PICKUP OF 40-CUBIC YARD
CONTAINERS THAT MIGHT BE REQUIRED. YOU ALSO INDICATE THE CONTRACTING
OFFICER HAS STATED THAT THE CONTRACT FOR THE SAME SERVICE WITH
DISPOSOWASTE FOR FISCAL YEAR 1971 PROVIDED FOR A RATE OF $40 PER PICKUP,
RATHER THAN $40 PER MONTH, AND THAT IN VIEW OF THIS HE SHOULD HAVE BEEN
CHARGED WITH NOTICE OF THE PROBABILITY OF A MISTAKE.
IT IS RECOMMENDED BY BOTH YOURSELF AND THE CONTRACTING OFFICER THAT
REFORMATION OF THE CONTRACT BE PERMITTED, SO AS TO ALLOW A PICKUP RATE
OF $49 PER PICKUP UNDER ITEM 1A, RATHER THAN $49 PER MONTH. IN THIS
REGARD THE CONTRACTING OFFICER STATES THAT SUCH ACTION WOULD NOT BE
PREJUDICIAL TO ANY OTHER BIDDER, AND THAT THE CORRECTED PRICE IS DEEMED
TO BE FAIR AND REASONABLE FOR THE SERVICES PERFORMED.
FPR 1-2.406-4(C) PROVIDES THAT A DETERMINATION TO REFORM A CONTRACT
"MAY BE MADE ONLY ON THE BASIS OF CLEAR AND CONVINCING EVIDENCE THAT A
MISTAKE IN BID WAS MADE, AND EITHER THAT THE MISTAKE WAS MUTUAL OR THAT
A UNILATERAL MISTAKE MADE BY THE CONTRACTOR WAS SO APPARENT AS TO HAVE
CHARGED THE CONTRACTING OFFICER WITH NOTICE OF THE PROBABILITY OF THE
MISTAKE." SEE ALSO B-152435, NOVEMBER 8, 1963.
THE RECORD SHOWS THAT A MISTAKE IN BID HAD BEEN MADE BY DISPOSOWASTE.
THE WORKSHEETS ATTACHED TO ITS LETTER OF JULY 18, 1972, EVIDENCE THE
FACT THAT THE CONTRACTOR INTENDED TO CHARGE $49 PER PICKUP. WE ALSO
FIND EVIDENCE OF A MISTAKE FROM THE FACT THAT ON PAGE 6 OF
DISPOSOWASTE'S BID, $49 WAS STIPULATED AS "THE COST OF ADDITIONAL
PICKUPS," AND THAT THE CONTRACT FOR THE SAME SERVICE WITH DISPOSOWASTE
FOR FISCAL YEAR 1971 PROVIDED FOR A RATE OF $40 PER PICKUP.
THE CONTRACTING OFFICER HAS STATED THAT HE SHOULD HAVE RECOGNIZED THE
POSSIBILITY OF AN ERROR IN DISPOSOWASTE'S BID, INASMUCH AS THE EXTRA
PICKUP CHARGE FOR THIS EQUIPMENT, AS SHOWN ON PAGE 6 OF DISPOSOWASTE'S
BID, WAS STATED TO BE $49. FURTHERMORE, AS STATED, THE CONTRACT WITH
DISPOSOWASTE FOR THE PREVIOUS FISCAL YEAR STIPULATED THE PRICE RATE AS
$40 PER PICKUP. WE BELIEVE THE COMBINATION OF THESE FACTS WAS
SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE OF A PROBABLE ERROR
IN THE BID. SEE B-161964, JULY 17, 1967.
ACCORDINGLY, THE CONTRACT MAY BE CORRECTED TO REFLECT A RATE OF $49
PER PICKUP OF THE 40-CUBIC YARD CONTAINERS BY DISPOSOWASTE.
THE FILE FORWARDED WITH YOUR LETTER OF NOVEMBER 30 IS RETURNED.
B-174937, JAN 2, 1973
MILITARY PERSONNEL - DEPENDENT'S TRAVEL - DISLOCATION ALLOWANCE - BONA
FIDE RESIDENCE
DECISION ALLOWING THE CLAIM OF CSL CLEOTHER DISHMAN FOR DEPENDENT'S
TRAVEL AND DISLOCATION ALLOWANCE FROM FRANKLIN, VA., TO CHARLESTON,
S.C., AND RETURN TO FRANKLIN.
A MEMBER IS ENTITLED TO BE REIMBURSED FOR TRAVEL OF HIS DEPENDENTS
UNDER 37 U.S.C. 406 AND IS ENTITLED TO A DISLOCATION ALLOWANCE UNDER 37
U.S.C. 407(A) IF SUCH TRAVEL WAS ACCOMPLISHED WITH THE INTENT OF
ESTABLISHING THE DESTINATION AS HIS DEPENDENT'S RESIDENCE. MERE
PRESENCE AT THAT PLACE WITH NO INTENTION OF REMAINING THERE FOR OTHER
THAN A SHORT VISIT DOES NOT ESTABLISH IT AS A RESIDENCE, BUT NO MINIMUM
TIME AT THAT LOCATION IS REQUIRED IN ORDER TO ESTABLISH A BONA FIDE
RESIDENCE.
TO MR. M. W. MINNIS:
REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 7, 1972 (FILE
REFERENCE FM80:MO:LWG), WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION
CONCERNING THE LEGALITY OF MAKING PAYMENT FOR DEPENDENTS' TRAVEL AND
DISLOCATION ALLOWANCE TO CSL CLEOTHER DISHMAN, 999-99-78/000-00-1297, IN
THE CIRCUMSTANCES DESCRIBED THEREIN. YOUR LETTER WAS FORWARDED TO THIS
OFFICE BY ENDORSEMENT OF THE CHIEF OF NAVAL PERSONNEL DATED JULY 21,
1972 (FILE REFERENCE PERS-A243-NK 5304). THE REQUEST HAS BEEN ASSIGNED
PDTATAC CONTROL NO. 72-53 BY THE PER DIEM, TRAVEL AND TRANSPORTATION
ALLOWANCE COMMITTEE.
THE FILE SHOWS THAT THE MEMBER, FOLLOWING A TOUR OF DUTY IN VIETNAM
AND IN NEWPORT, RHODE ISLAND, RECEIVED TRANSFER ORDER NO. 880-70, DATED
SEPTEMBER 23, 1970, TRANSFERRING HIM ON A PERMANENT CHANGE OF STATION
FROM THE NAVAL SCHOOLS COMMAND, NEWPORT, RHODE ISLAND, TO THE USS
DIRECT, AT ITS HOMEPORT, CHARLESTON, SOUTH CAROLINA, WITH A REPORTING
DATE OF OCTOBER 24, 1970.
ON JUNE 10, 1971, PURSUANT TO TRANSFER ORDER NO. 880-70, THE MEMBER'S
DEPENDENTS TRAVELED FROM THEIR RESIDENCE IN FRANKLIN, VIRGINIA, TO
CHARLESTON, SOUTH CAROLINA, AND MOVED INTO A FURNISHED APARTMENT WHICH
THE MEMBER LEASED ON JUNE 1, 1971.
ON JUNE 21, 1971, MESSAGE R212015Z JUNE 1971, ISSUED BY THE CHIEF OF
NAVAL OPERATIONS WAS RECEIVED ON BOARD THE USS DIRECT, CHANGING THE
VESSEL'S HOMEPORT FROM CHARLESTON, SOUTH CAROLINA, TO PERTH AMBOY, NEW
JERSEY, EFFECTIVE SEPTEMBER 1, 1971. ON AUGUST 10, 1971, THE MEMBER'S
DEPENDENTS MOVED FROM THEIR FURNISHED APARTMENT IN CHARLESTON, SOUTH
CAROLINA, AND RETURNED TO FRANKLIN, VIRGINIA. IT WAS NOTED THAT THE
TRANSPORTATION OF HOUSEHOLD GOODS WAS NOT ASSOCIATED WITH THE TRAVEL OF
THE MEMBER'S DEPENDENTS IN EITHER DIRECTION.
YOU SAY THAT INASMUCH AS THE MEMBER PROVIDED NO COGENT SUBSTANTIATING
EVIDENCE TO SHOW THAT THE MOVEMENT OF HIS DEPENDENTS FROM FRANKLIN,
VIRGINIA, TO CHARLESTON, SOUTH CAROLINA, WAS FOR THE PURPOSE OF
ESTABLISHING A BONA FIDE RESIDENCE THERE, REIMBURSEMENT OF HIS CLAIMED
ALLOWANCES WAS DISALLOWED.
BY LETTER DATED MAY 23, 1972, THE MEMBER CONTENDS THAT BY LEASING THE
APARTMENT IN CHARLESTON AND HAVING HIS FAMILY MOVE THERE, HE ESTABLISHED
A RESIDENCE AT THAT LOCATION WITH THE INTENTION OF REMAINING THERE AND
MAINTAINING IT AS HIS RESIDENCE. HE SAYS THAT THE REASON HE DID NOT
MOVE HIS HOUSEHOLD GOODS FROM FRANKLIN WAS DUE TO THE FACT THAT THE
APARTMENT IN CHARLESTON WAS FURNISHED. FURTHER, THAT AT THE TIME HE
LEASED THE APARTMENT HE HAD NO KNOWLEDGE OF THE ORDERED CHANGE OF
HOMEPORT OF THE USS DIRECT AND STATED THAT IT WAS ONLY BECAUSE HE DID
NOT WANT TO MOVE HIS FAMILY TO NEW JERSEY THAT HE DECIDED TO MOVE THEM
BACK TO FRANKLIN IN AUGUST 1971, SHORTLY BEFORE THE HOMEPORT CHANGE TO
PERTH AMBOY BECAME EFFECTIVE.
BY FIRST ENDORSEMENT BY THE COMMANDING OFFICER, USS DIRECT, DATED MAY
23, 1972, THE MEMBER'S STATEMENT CONCERNING THE VESSEL'S MOVEMENT WAS
CONFIRMED, STATING, "HE COULD HAVE HAD NO KNOWLEDGE OF THE HOMEPORT
CHANGE ON JUNE 10, 1972, WHEN HE ESTABLISHED HIS CHARLESTON HEIGHTS
RESIDENCE. AFTER THE CNO MESSAGE ON 21 JUNE 1972, HE DECIDED TO MOVE
HIS FAMILY TO VIRGINIA VICE NEW JERSEY, AS AUTHORIZED."
SECTION 406 OF TITLE 37, UNITED STATES CODE, PROVIDES THAT A MEMBER
OF A UNIFORMED SERVICE WHO IS ORDERED TO MAKE A PERMANENT CHANGE OF
STATION IS ENTITLED TO TRANSPORTATION IN KIND FOR HIS DEPENDENTS, TO
REIMBURSEMENT THEREFOR, OR TO A MONETARY ALLOWANCE, UNDER SUCH
LIMITATIONS AS THE SECRETARIES MAY PRESCRIBE. PARAGRAPH M7000-12 OF THE
JOINT TRAVEL REGULATIONS SPECIFIES THAT A MEMBER IS ENTITLED TO
TRANSPORTATION OF DEPENDENTS AT GOVERNMENT EXPENSE UPON A PERMANENT
CHANGE OF STATION FOR TRAVEL PERFORMED FROM THE OLD STATION TO THE NEW
STATION OR BETWEEN POINTS OTHERWISE AUTHORIZED EXCEPT FOR ANY TRAVEL OF
DEPENDENTS BETWEEN POINTS OTHERWISE AUTHORIZED TO A PLACE AT WHICH THEY
DO NOT INTEND TO ESTABLISH A RESIDENCE AND THAT TRAVEL EXPENSES OF
DEPENDENTS FOR THEIR TRAVEL FOR PURPOSES OTHER THAN WITH THE INTENT TO
CHANGE THEIR RESIDENCE MAY NOT BE CONSIDERED AN OBLIGATION OF THE
GOVERNMENT.
THUS, A RIGHT TO TRANSPORTATION OF DEPENDENTS AT THE EXPENSE OF THE
GOVERNMENT IS NOT AN ALLOWANCE PAYABLE IN ALL EVENTS ON THE BASIS THAT
SOME TRAVEL WAS PERFORMED. NO RIGHT TO REIMBURSEMENT BY THE GOVERNMENT
ARISES UNLESS THE TRAVEL MAY BE CONSIDERED AS INCIDENT TO A CHANGE OF
RESIDENCE AS THE RESULT OF AN ORDERED PERMANENT CHANGE OF STATION FOR
THE MEMBER IN THE SERVICE. WE HAVE CONSISTENTLY HELD THAT THE EXPENSE
OF TRAVEL OF DEPENDENTS MERELY FOR THE PURPOSE OF VISITING THE MEMBER,
FOR PLEASURE TRIPS, OR FOR OTHER PURPOSES NOT CONTEMPLATING A CHANGE OF
THE DEPENDENTS' PRIMARY RESIDENCE IN CONNECTION WITH A CHANGE OF THE
MEMBER'S PERMANENT STATION IS NOT AN OBLIGATION OF THE GOVERNMENT. SEE
33 COMP. GEN. 431 (1954) AND CASES THERE CITED.
SECTION 407(A) OF TITLE 37, UNITED STATES CODE, PROVIDES THAT UNDER
REGULATIONS PROVIDED BY THE SECRETARY CONCERNED, A MEMBER OF A UNIFORMED
SERVICE WHOSE DEPENDENTS MAKE AN AUTHORIZED MOVE IN CONNECTION WITH HIS
PERMANENT CHANGE OF STATION, IS ENTITLED TO A DISLOCATION ALLOWANCE
EQUAL TO HIS BASIC ALLOWANCE FOR QUARTERS FOR ONE MONTH. PARAGRAPH
M9000 OF THE JOINT TRAVEL REGULATIONS PROVIDES THAT THE PURPOSE OF THE
DISLOCATION ALLOWANCE IS TO PARTIALLY REIMBURSE A MEMBER WITH DEPENDENTS
FOR THE EXPENSES INCURRED IN RELOCATING HIS HOUSEHOLD UPON A PERMANENT
CHANGE OF STATION.
PARAGRAPH M9003-1 OF THOSE REGULATIONS PROVIDES THAT THE ALLOWANCE I
PAYABLE TO A MEMBER WHENEVER DEPENDENTS RELOCATE THEIR HOUSEHOLD IN
CONNECTION WITH A PERMANENT CHANGE OF STATION. PARAGRAPH M9004-2 OF THE
REGULATIONS PROVIDES THAT A DISLOCATION ALLOWANCE WILL NOT BE PAYABLE
UNDER CERTAIN CONDITIONS, INCLUDING THOSE OUTLINED IN PARAGRAPH M7000-12
OF THE REGULATIONS.
THE ONLY QUESTION IS WHETHER THE MEMBER ESTABLISHED A BONA FIDE
RESIDENCE IN CHARLESTON, SOUTH CAROLINA, PURSUANT TO PERMANENT
CHANGE-OF-STATION ORDERS. IN THIS REGARD THE WORD RESIDENCE IS
GENERALLY USED TO INDICATE THE PLACE WHERE A PERSON MAKES HIS HOME OR
LIVES AS DISTINGUISHED FROM A PLACE OF TEMPORARY SOJOURN. WHILE MERE
PRESENCE AT A LOCATION WITH NO INTENTION OF REMAINING THERE FOR OTHER
THAN A SHORT VISIT WOULD NOT, IN OUR OPINION, ESTABLISH A PLACE OF
RESIDENCE WITHIN THE CONTEMPLATION OF THE LAW AND REGULATIONS, IT IS
RECOGNIZED THAT NO MINIMUM TIME AT A PARTICULAR LOCATION IS REQUIRED IN
ORDER TO ESTABLISH A BONA FIDE RESIDENCE AT THAT LOCATION.
CONSEQUENTLY, IN THE CIRCUMSTANCES PRESENTED AND IN THE ABSENCE OF
SUBSTANTIAL EVIDENCE TO THE CONTRARY WE WILL CONSIDER THAT AT THE TIME
THE MEMBER LEASED THE APARTMENT AND MOVED HIS DEPENDENTS TO THAT
LOCATION IN CHARLESTON HE INTENDED TO AND DID ESTABLISH IT AS THEIR
RESIDENCE AND THAT PURSUANT TO HIS SUBSEQUENT TRANSFER HE REESTABLISHED
THEIR RESIDENCE IN FRANKLIN. COMPARE B-176348, OCTOBER 30, 1972 (52
COMP. GEN. ___).
ACCORDINGLY, THE MEMBER MAY BE REIMBURSED FOR HIS DEPENDENTS' TRAVEL
FROM FRANKLIN, VIRGINIA, TO CHARLESTON, SOUTH CAROLINA, AND RETURN TO
FRANKLIN AND PAID A DISLOCATION ALLOWANCE FOR BOTH MOVES, IF OTHERWISE
CORRECT. THE VOUCHERS ARE RETURNED HEREWITH.
B-176784, JAN 2, 1973
BID PROTEST - LOW BIDS - CONTRACTOR RESPONSIBILITY
DECISION DENYING THE PROTEST OF FOOD TECHNOLOGY CORPORATION AGAINST
THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED AT
PICATINNY ARSENAL, DOVER, N.J., FOR AN OPTICAL SCREENING SYSTEM FOR
CLOTH DEFECT INSPECTION.
THE EVIDENCE IN THE RECORD DOES NOT SUPPORT PROTESTANT'S POSITION
THAT OTHER BIDS SUBMITTED WERE SO LOW THAT THEY INDICATE A LACK OF
UNDERSTANDING OF THE COMPLEXITY OF THE PROCUREMENT. ALSO, THE
CONTRACTING OFFICER'S DETERMINATION OF THE PROPOSED CONTRACTOR'S
FINANCIAL AND TECHNICAL RESPONSIBILITY WILL NOT BE QUESTIONED BY GAO
UNLESS IT IS SHOWN TO BE ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY
SUBSTANTIAL EVIDENCE. SEE 45 COMP. GEN. 4 (1965).
TO FRIED, FRANK, HARRIS, SHRIVER & KAMPLEMAN:
WE REFER TO YOUR LETTER DATED AUGUST 17, 1972, AND SUBSEQUENT
CORRESPONDENCE, PROTESTING ON BEHALF OF FOOD TECHNOLOGY CORPORATION
(FTC) AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION
FOR BIDS NO. DAAA21-73-B-0007, ISSUED AT PICATINNY ARSENAL, DOVER, NEW
JERSEY.
THE INVITATION WAS ISSUED ON JULY 13, 1972, FOR AN OPTICAL SCREENING
SYSTEM FOR CLOTH DEFECT INSPECTION. ON AUGUST 9, 1972, THE FOLLOWING
BIDS WERE RECEIVED AND OPENED:
ZIA ASSOCIATES, INC. $ 17,775.
LASER SERVICES, INC. 18,424.
WILLIAMSON CORPORATION 19,700.
FOOD TECHNOLOGY CORPORATION 62,300.
GENERAL SCANNING, INC. 169,000.
THE AGENCY PROPOSES TO AWARD THE CONTRACT TO ZIA AS THE LOW BIDDER.
HOWEVER, THE AWARD HAS BEEN WITHHELD PENDING OUR RESOLUTION OF THIS
PROTEST.
YOU CONTEND THAT THE EQUIPMENT REQUIRED BY THE PERFORMANCE
SPECIFICATIONS SET FORTH IN THE INVITATION REPRESENTS A SIGNIFICANT
ADVANCE IN "THE STATE OF THE ART" FAR BEYOND THE CAPABILITY OF THE THREE
LOW BIDDERS. IT IS YOUR POSITION THAT THE PRICES OF THESE BIDDERS
INDICATE THEIR MISUNDERSTANDING OF THE COMPLEXITY OF THE PROCUREMENT.
IN THIS REGARD YOU CONTEND THAT THE HIGH-SPEED UNWINDING AND REWINDING
EQUIPMENT REPRESENTS AN EQUIPMENT EXPENSE FOR THE CONTRACT OF AT LEAST
$10,000. IN SUPPORT OF THIS CONTENTION YOU HAVE SUBMITTED A COPY OF A
QUOTE FOR THIS EQUIPMENT WHICH FTC RECEIVED IN THE AMOUNT OF $16,500,
DESCRIBED BY THE SUPPLIER AS "A BUDGET PRICE." FURTHER, YOU STATE THAT
THE OPTICS PORTION OF THE SPECIFICATIONS WILL REQUIRE AN EXPENDITURE OF
AT LEAST $18,000 TO $20,000, TO ACCOMPLISH. YOU ALSO ASSERT THAT NONE
OF THESE BIDDERS HAS THE REQUISITE FINANCIAL RESOURCES TO SUSTAIN THE
LOSS YOU ALLEGE IS INHERENT IN EACH OF THESE BID PRICES.
ON THE OTHER HAND, THE AGENCY STATES THAT THE ACCESSORIES NECESSARY
FOR THE SYSTEM ARE AVAILABLE AS "OFF THE SHELF" COMPONENTS WHICH REQUIRE
ONLY MINOR MODIFICATIONS TO FULFILL THE REQUIREMENTS OF THE
SPECIFICATIONS. IT IS THE AGENCY'S POSITION THAT ANY COMPANY IN THE
FIELD OF ELECTRO-OPTICS CAN PROVIDE THE REQUIRED SYSTEM. IT INSISTS
THAT FTC HAS MISINTERPRETED THE REQUIREMENTS OF THE SOLICITATION. THE
AGENCY REPORTS THAT A TYPICAL REWINDING MACHINE WITH ACCESSORIES WILL
COST $3,000 AND THAT THE SCANNING PORTIONS OF THE EQUIPMENT ARE
TYPICALLY PRICED AT LESS THAN THE $18,000 TO $20,000 RANGE OUTLINED IN
YOUR PROTEST. IN SUPPORT OF ITS POSITION THE AGENCY HAS SUBMITTED A
"SAMPLE" QUOTE FOR A REWINDING MACHINE WITH ACCESSORIES IN THE $3,000
RANGE AND A QUOTE FOR SCANNING EQUIPMENT IN THE $6,000 RANGE. WE CANNOT
CONCLUDE FROM THE EVIDENCE CONTAINED IN THE RECORD THAT THE AGENCY'S
POSITION IN THIS MATTER IS ERRONEOUS.
IN REGARD TO ZIA'S PRICE OF $17,775 WE NOTE THAT IT IS NOT OUT OF
LINE WITH THE GOVERNMENT'S ESTIMATE OF BETWEEN $19,000 - $20,000. IN
ADDITION WE NOTE THAT A PRIOR INVITATION FOR THE ITEM WAS CANCELLED
BECAUSE THE LOW RESPONSIVE BIDDER'S PRICE OF $24,860 WAS CONSIDERED
EXCESSIVE.
THE CONTRACTING OFFICER HAS DETERMINED ON THE BASIS OF A PREAWARD
SURVEY THAT ZIA POSSESSES THE REQUISITE FINANCIAL AND TECHNICAL
QUALIFICATIONS TO PERFORM THE SUBJECT CONTRACT. OUR OFFICE WILL NOT
QUESTION SUCH A DETERMINATION UNLESS IT IS SHOWN TO BE ARBITRARY,
CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. SEE 45 COMP. GEN.
4 (1965).
IN THIS CASE WE FIND THAT THE CONTRACTING AGENCY'S DETERMINATION THAT
ZIA HAS THE NECESSARY TECHNICAL AND FINANCIAL QUALIFICATIONS TO
SUCCESSFULLY PERFORM THE CONTRACT IS BASED ON SUBSTANTIAL EVIDENCE AND
THEREFORE DOES NOT CONSTITUTE AN ABUSE OF ADMINISTRATIVE DISCRETION.
ACCORDINGLY, YOUR PROTEST MUST BE DENIED.
B-176849, JAN 2, 1973
BID PROTEST - BID BOND - INDIVIDUAL SURETY - RESPONSIBILITY - AWARD WITH
PROTEST PENDING
DECISION DENYING THE PROTEST OF ADVANCE BUILDING MAINTENANCE COMPANY
AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY
THE NAVAL FACILITIES ENGINEERING COMMAND, WASHINGTON, D.C., FOR
JANITORIAL SERVICES AT THE NAVAL SHIP RESEARCH AND DEVELOPMENT CENTER.
BID BOND DEFICIENCIES WHICH RENDER A BID NONRESPONSIVE CANNOT BE
CURED AFTER BID OPENING. 38 COMP. GEN. 532 (1959). HOWEVER, THE MATTER
OF THE NET WORTH OF AN INDIVIDUAL SURETY ON A BID BOND DOES NOT AFFECT
THE RESPONSIVENESS OF THE BID, BUT CONCERNS THE RESPONSIBILITY OF THE
SURETY, A MATTER IN WHICH EVIDENCE SUBMITTED AFTER BID OPENING MAY BE
CONSIDERED. 52 COMP. GEN. ___ (B-176392, OCTOBER 10, 1972). MOREOVER,
CASHIER'S CHECKS IN THE TOTAL PENAL AMOUNT OF THE BOND CONSTITUTE
SUFFICIENT EVIDENCE FOR FINDING THE SURETY RESPONSIBLE.
ALTHOUGH THE PROCURING AGENCY VIOLATED THE EXPRESS TERMS OF ASPR
2-407.8(B)(2) SINCE IT DID NOT NOTIFY THE COMP. GEN. OF ITS INTENT TO
MAKE AWARD PRIOR TO FINAL DISPOSITION OF THIS PROTEST, SUCH ACTION
SHOULD BE REGARDED AS A PROCEDURAL DEFECT NOT AFFECTING THE LEGALITY OF
THE CONTRACT.
TO ADVANCE BUILDING MAINTENANCE CO:
REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 24, 1972, AND
SUPPLEMENTAL LETTERS DATED AUGUST 25 AND OCTOBER 2, 1972, PROTESTING
AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION FOR
BIDS (IFB) N62477-72-C-0586, ISSUED BY THE NAVAL FACILITIES ENGINEERING
COMMAND, WASHINGTON, D. C.
THE ABOVE SOLICITATION, ISSUED ON JULY 19, 1972, COVERED JANITORIAL
SERVICES FOR VARIOUS BUILDINGS AT THE NAVAL SHIP RESEARCH AND
DEVELOPMENT CENTER. BID OPENING WAS ORIGINALLY SCHEDULED FOR AUGUST 16,
1972, BUT WAS LATER EXTENDED TO AUGUST 22, 1972. NATIONWIDE BUILDING
MAINTENANCE, INC. (NATIONWIDE), WAS THE LOW BIDDER AT $149,739.94, AND
YOUR FIRM WAS SECOND LOW WITH A BID PRICE OF $164,005. THE CONTRACT WAS
AWARDED TO NATIONWIDE ON AUGUST 31, 1972.
THE INVITATION CALLED FOR A 20 PERCENT BID GUARANTY, OR $29,947.98 ON
NATIONWIDE'S BID. NATIONWIDE SUBMITTED A BID BOND EXECUTED BY TWO
INDIVIDUAL SURETIES, RATHER THAN A SINGLE CORPORATE SURETY. INSTRUCTION
NO. 4(B) ON THE REVERSE OF THE BID BOND FORM (STANDARD FORM 24) REQUIRES
EACH INDIVIDUAL SURETY TO EXECUTE AN AFFIDAVIT OF INDIVIDUAL SURETY
(STANDARD FORM 28). THE AFFIDAVIT FORM PROVIDES FOR A LISTING OF THE
INDIVIDUAL SURETY'S ASSETS, INCLUDING SOLELY OWNED REAL ESTATE AND OTHER
PROPERTY, TOGETHER WITH THE VALUES OF SUCH PROPERTY, AND A LISTING OF
ALL OTHER BONDS ON WHICH HE IS A SURETY. IT FURTHER PROVIDES THAT
PROPERTY EXEMPT FROM EXECUTION AND SALE FOR ANY REASON SHOULD NOT BE
SHOWN. THE SURETY'S INTEREST IN COMMUNITY PROPERTY MAY BE INCLUDED IF
NOT SO EXEMPT. THE AFFIDAVIT FORM IS DESIGNED IN THE SINGULAR, AND
CLEARLY INDICATES THAT IT SHOULD BE EXECUTED AND SIGNED BY ONE PERSON.
IT IS YOUR CONTENTION THAT CERTAIN PROPERTY, WHICH IS LOCATED IN
VIRGINIA AND LISTED BY ONE OF THE INDIVIDUAL SURETIES, CANNOT BE COUNTED
AS PART OF THE NET WORTH OF THE SURETY FOR THE PURPOSES OF THE BID BOND.
YOU SAY THAT IT IS APPARENT FROM THE FACE OF THE AFFIDAVIT (WHICH IS
SIGNED BY THE PRESIDENT OF NATIONWIDE AND ANOTHER PARTY, PRESUMABLY HIS
WIFE) THAT THE PROPERTY IS JOINTLY OWNED BY THE HUSBAND AND WIFE. YOU
POINT OUT THAT IF THE PROPERTY IS JOINTLY OWNED BY THE COUPLE WITH RIGHT
OF SURVIVORSHIP, THE COURTS OF VIRGINIA CONSTRUE SUCH OWNERSHIP AS A
TENANCY BY THE ENTIRETY AND THE PROPERTY WOULD BE EXEMPT FROM EXECUTION
AND CANNOT BE PARTITIONED EXCEPT BY CONSENT OF BOTH SPOUSES. YOU ALSO
POINT OUT THAT VIRGINIA HOMESTEAD LAWS EXEMPT CERTAIN PROPERTY FROM
EXECUTION TO SATISFY CREDITORS, AND THAT THE PORTION OF THE LISTED
ASSETS TO WHICH THE HOMESTEAD LAW APPLIES CANNOT BE COUNTED AS PART OF
THE SURETY'S NET WORTH FOR BID BOND PURPOSES. ADDITIONALLY, YOU ALLEGE
THAT BOTH OF NATIONWIDE'S SURETIES ARE PRESENTLY SURETIES ON OTHER BONDS
NOT DISCLOSED, BUT WHICH SHOULD HAVE BEEN LISTED, IN BLOCK 10 OF THEIR
AFFIDAVITS.
FINALLY, YOU CONTEND THAT THE TWO CASHIER'S CHECKS, EACH IN THE
AMOUNT OF $14,974, FURNISHED BY THE SURETIES DO NOT AFFECT THE VALIDITY
OF YOUR PROTEST BECAUSE THE CHECKS WERE SUBMITTED AFTER BID OPENING AND
AFTER THE AWARD OF THE CONTRACT, AND NAVY AFFORDED NATIONWIDE A "SECOND
BITE AT THE APPLE" BY ACCEPTING THOSE CHECKS AS A CURE FOR THE
DEFICIENCIES IN THE BID BOND AFFIDAVITS.
IN THE EVALUATION OF BONDS, PARAGRAPH 10-201.2(D) OF THE ARMED
SERVICES PROCUREMENT REGULATION (ASPR) REQUIRES THAT THE CONTRACTING
OFFICER MUST FIRST ASCERTAIN THAT THE AFFIDAVITS OF INDIVIDUAL SURETIES
(STANDARD FORM 28) HAVE BEEN COMPLETELY FILLED OUT AND ARE PROPERLY
EXECUTED. HE MUST NEXT ASCERTAIN THAT EACH INDIVIDUAL SURETY JUSTIFIES
HIS NET WORTH "IN A SUM NOT LESS THAN THE PENALTY OF THE BOND"
(INSTRUCTION NO. 4 OF STANDARD FORM 28). THE CONTRACTING OFFICER IS
ALSO REQUIRED TO SCRUTINIZE CLOSELY THE INFORMATION ENTERED IN BLOCK 10
ON STANDARD FORM 28, AS THE AMOUNT OF OUTSTANDING BOND OBLIGATIONS OF AN
INDIVIDUAL SURETY MAY HAVE A SUBSTANTIAL BEARING ON THE FINANCIAL
POSITION OF SUCH INDIVIDUAL SURETY, AND TO SCRUTINIZE CLOSELY THE
AFFIDAVITS IN ANY CASE WHERE AN INDIVIDUAL IS UNDERWRITING A BOND FOR A
PRINCIPAL FOR WHOM THAT SURETY HAS UNDERWRITTEN OTHER OUTSTANDING BONDS.
ASPR 10-201.2(D) FURTHER PROVIDES THAT, AS A GENERAL RULE, THE
CONTRACTING OFFICER SHOULD NOT REQUIRE EXTRINSIC EVIDENCE OF AN
INDIVIDUAL SURETY'S NET WORTH (OTHER THAN STANDARD FORM 28) UNLESS
STANDARD FORM 28 IS NOT FILLED OUT COMPLETELY OR PROPERLY, OR UNLESS THE
CONTRACTING OFFICER HAS REASON TO BELIEVE THAT THE INDIVIDUAL SURETY'S
STATEMENTS ON STANDARD FORM 28 DO NOT REFLECT HIS TRUE WORTH.
WE HAVE BEEN ADVISED BY THE PROCURING ACTIVITY THAT, AS A MATTER OF
PRACTICE, THE BID BOND AND AFFIDAVITS OF THE INDIVIDUAL SURETY ARE
EXAMINED TO DETERMINE WHETHER, ON THEIR FACES, THEY MEET THE
REQUIREMENTS OF THE INVITATION, AND THAT JOINTLY OWNED PROPERTY IS TAKEN
AT HALF THE STATED VALUE TO DETERMINE WHETHER THE AMOUNT OF NET WORTH IS
SUFFICIENT TO COVER THE BOND. IT IS FURTHER REPORTED THAT IN THE
PRESENT CASE THE BID BOND AND SUPPORTING AFFIDAVITS ON THEIR FACES
SHOWED THAT THE REQUIREMENTS OF THE IFB WERE MET AND THAT THE ASSETS
LISTED BY THE INDIVIDUAL SURETIES WERE SUFFICIENT TO COVER THE BID BOND.
HOWEVER, ONE DISCREPANCY WAS NOTED AND THAT WAS THE FAILURE OF EITHER
SURETY TO LIST, IN BLOCK 10, THE OTHER OUTSTANDING BONDS ON WHICH THE
INDIVIDUALS WERE SURETIES, INDICATING THAT ADDITIONAL INVESTIGATION WAS
REQUIRED BY THE CONTRACTING OFFICER. SUBSEQUENT TO THE BID OPENING THE
SURETIES PRESENTED ADDITIONAL EVIDENCE TO THE CONTRACTING OFFICER OF
THEIR FINANCIAL RESPONSIBILITY IN THE FORM OF THE TWO CASHIER'S CHECKS
IN THE AMOUNT OF $14,974, EACH. IT WAS CONSIDERED THAT THE EVIDENCE
THUS PRESENTED BY THE SURETIES WAS SUFFICIENT TO MEET THE REQUIREMENTS
AND INTENT OF ASPR 10-201.2(D) IN ESTABLISHING THE FINANCIAL ABILITY OF
THE SURETIES TO HONOR THE BOND. THE RECORD INDICATES THAT BOTH OF
NATIONWIDE'S INDIVIDUAL SURETIES FOR THE PRESENT PROCUREMENT HAD
OUTSTANDING BOND OBLIGATIONS ON OTHER NATIONWIDE CONTRACTS WHEN THE
INSTANT AFFIDAVITS WERE EXECUTED.
WE CONCUR WITH YOUR CONTENTION THAT THE PROPERTY VALUES SHOWN ON THE
AFFIDAVIT (STANDARD FORM 28) SIGNED BY THE PRESIDENT OF NATIONWIDE AND,
PRESUMABLY, HIS WIFE, COULD NOT BE PROPERLY ACCEPTED AS ESTABLISHING THE
INDIVIDUAL SURETY'S NET WORTH. AS STATED ABOVE, THE AFFIDAVIT OF
INDIVIDUAL SURETY IS DESIGNED FOR COMPLETION AND SIGNATURE BY ONE
PERSON, I.E., THE INDIVIDUAL SURETY SPECIFIED THEREIN. THE SIGNING OF
THE FORM BY A SECOND INDIVIDUAL IS NOT ONLY CONTRARY TO THE SINGULAR
EXPRESSIONS OF THE FORM BUT CLEARLY INDICATES AN INTEREST OF THAT SECOND
PARTY IN THE PROPERTY DESCRIBED THEREON. THUS, THE DUAL SIGNATURES ON
THE AFFIDAVIT SUBMITTED BY THE PRESIDENT OF NATIONWIDE RAISE A QUESTION
AS TO THE NATURE AND EXTENT OF HIS INTEREST IN THE PROPERTY, WHICH
DEFEATS THE PRINCIPAL PURPOSE OF THE AFFIDAVIT, THAT IS, TO PROVIDE THE
CONTRACTING OFFICER WITH A SWORN STATEMENT BY THE INDIVIDUAL SURETY
CONCERNED OF THE FAIR VALUE OF HIS PROPERTY, AND INTERESTS IN PROPERTY,
WHICH ARE NOT EXEMPT FROM EXECUTION AND SALE FOR ANY REASON.
SINCE THE AFFIDAVIT BY THE PRESIDENT OF NATIONWIDE WAS NOT PROPERLY
FILLED OUT OR EXECUTED, AND THE AFFIDAVIT OF THE OTHER SURETY WAS ALSO
DEFECTIVE IN THAT HER OUTSTANDING BOND OBLIGATIONS WERE NOT SHOWN IN
BLOCK 10, THE TWO INDIVIDUAL SURETY AFFIDAVITS DID NOT CONFORM TO THE
PROVISIONS OF THE FORM OR THE PROVISIONS OF ASPR 10-201. 2(D). UNDER
THESE CIRCUMSTANCES THE CITED REGULATION CONTEMPLATES THAT THE
CONTRACTING OFFICER WILL OBTAIN ADDITIONAL INFORMATION OR EVIDENCE OF
FINANCIAL WORTH FROM THE INDIVIDUAL SURETIES. THE RECORD INDICATES THAT
ADDITIONAL EVIDENCE OF FINANCIAL RESPONSIBILITY WAS SUBSEQUENTLY
SUBMITTED BY THE SURETIES IN THE FORM OF THE ABOVE-MENTIONED CASHIER'S
CHECKS. ALTHOUGH YOU ALLEGE THAT THE CHECKS WERE RECEIVED BY THE
PROCURING ACTIVITY AFTER THE CONTRACT WAS AWARDED ON AUGUST 31, 1972, WE
HAVE BEEN INFORMALLY ADVISED BY NAVY THAT THE CHECKS, WHICH WERE DATED
AUGUST 28, 1972, WERE, IN FACT, DELIVERED TO THE PROCURING ACTIVITY
PRIOR TO THE AWARD, IN RESPONSE TO THE CONTRACTING OFFICER'S FURTHER
INQUIRY INTO THE FINANCIAL WORTH OF THE SURETIES.
IN REGARD TO THE CONTRACTING OFFICER'S ACCEPTANCE OF THE TWO
CASHIER'S CHECKS AFTER BID OPENING AS EVIDENCE OF THE FINANCIAL
RESPONSIBILITY OF THE SURETIES, THIS OFFICE HAS HELD IN SEVERAL
DECISIONS THAT BID BOND DEFICIENCIES, WHICH RENDER A BID NONRESPONSIVE,
CANNOT BE CURED AFTER THE OPENING OF BIDS. 38 COMP. GEN. 532 (1959);
B-175679, MAY 17, 1972; B-148309, MARCH 19, 1962; B-159554, SEPTEMBER
2, 1966. HOWEVER, WE HAVE ALSO HELD THAT THE MATTER OF THE NET WORTH OF
AN INDIVIDUAL SURETY ON A BID BOND DOES NOT AFFECT THE RESPONSIVENESS OF
THE BID BUT CONCERNS THE RESPONSIBILITY OF THE SURETY, A MATTER WHICH
CAN BE DETERMINED PURSUANT TO EVIDENCE AND INFORMATION SUBMITTED AFTER
BID OPENING. 52 COMP. GEN. ___ (B-176392, OCTOBER 10, 1972). THUS, WE
CANNOT CONCLUDE THAT THE CONTRACTING OFFICER ACTED IMPROPERLY IN
ACCEPTING THE TWO CASHIER'S CHECKS AS EVIDENCE OF THE SURETIES'
FINANCIAL SITUATIONS IN MAKING HIS DETERMINATION THAT THE SURETIES WERE
FINANCIALLY RESPONSIBLE. IT IS ALSO OUR VIEW THAT THE CHECKS
CONSTITUTED SUFFICIENT EVIDENCE FOR SUCH DETERMINATION SINCE THEY
PROVIDED READILY AVAILABLE CASH IN THE TOTAL PENAL AMOUNT OF THE BOND.
IN YOUR LETTER OF OCTOBER 2, YOU POINT OUT THAT THE PROCURING
ACTIVITY VIOLATED THE EXPRESS TERMS OF ASPR 2-407.8(B)(2) WHEN IT MADE
THE AWARD TO NATIONWIDE. ASPR 2-407.8(B)(2) REQUIRES THAT NOTICE BE
GIVEN TO THE COMPTROLLER GENERAL OF INTENT TO MAKE AN AWARD PRIOR TO THE
FINAL DISPOSITION OF A PROTEST BY THIS OFFICE. WE HAVE NO RECORD OF
SUCH NOTICE HAVING BEEN GIVEN IN THE PRESENT CASE. WHILE THE PROCURING
ACTIVITY'S FAILURE TO NOTIFY THIS OFFICE OF THE PROPOSED AWARD WAS A
VIOLATION OF THE CITED REGULATION, WE ARE OF THE VIEW THAT IN THE
PRESENT INSTANCE IT SHOULD BE REGARDED AS A PROCEDURAL DEFECT NOT
AFFECTING THE LEGALITY OF THE CONTRACT. HOWEVER, WE ARE BRINGING THIS
MATTER TO THE ATTENTION OF THE SECRETARY OF THE NAVY TO ASSURE FUTURE
COMPLIANCE BY THE PROCURING ACTIVITY WITH ASPR 2-407.8(B)(2).
FOR THE ABOVE REASONS, YOUR PROTEST IS DENIED.
B-176854, JAN 2, 1973
BID PROTEST - CANCELLATION OF IFB
DECISION DENYING THE PROTEST OF FEDERAL MANUFACTURING AND SUPPLY
CORPORATION AGAINST CANCELLATION OF AN IFB ISSUED BY THE DEFENSE GENERAL
SUPPLY CENTER, RICHMOND, VA., FOR POWER TRANSFORMERS.
AN IFB MAY BE CANCELLED IF ITS SPECIFICATIONS HAVE BEEN REVISED, AND
THERE IS A COMPELLING REASON TO DO SO. ASPR 2.404-1. MOREOVER, THE
ADMINISTRATIVE AUTHORITY TO REJECT ALL BIDS AND READVERTISE IS EXTREMELY
BROAD. 49 COMP. GEN. 211, 215 (1969).
TO FEDERAL MANUFACTURING AND SUPPLY CORP:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 22, 1972, AND SUBSEQUENT
CORRESPONDENCE, PROTESTING THE CANCELLATION OF INVITATION FOR BIDS
DSA-400-72-B-4914, ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER,
RICHMOND, VIRGINIA.
THE SOLICITATION WAS FOR 10 POWER TRANSFORMERS, TO BE MANUFACTURED IN
ACCORDANCE WITH AVCO/ELECTRONICS DIVISION DRAWING 742748, DATED MARCH
29, 1962, AS MODIFIED. AT BID OPENING ON FEBRUARY 17, 1972, YOUR BID
WAS FOUND TO BE THE LOWER OF THE TWO RECEIVED. HOWEVER, ON MARCH 30,
1972, YOUR BID WAS REJECTED BECAUSE YOU WERE FOUND NOT TO QUALIFY AS A
REGULAR DEALER UNDER THE WALSH-HEALY ACT. YOU PROTESTED THIS ACTION TO
THE CONTRACTING OFFICER, POINTING OUT THAT YOU SUBMITTED A BID AS A
MANUFACTURER, NOT A DEALER. ON JUNE 8, 1972, YOUR BID WAS AGAIN
REJECTED, THIS TIME FOR FAILURE OF YOUR FIRM TO QUALIFY AS "A
MANUFACTURER OR REGULAR DEALER OF THE SUPPLIES INVOLVED." YOU PROTESTED
THAT DECISION TO THE CONTRACTING OFFICER ALSO, BUT BEFORE THE MATTER WAS
REFERRED TO THE DEPARTMENT OF LABOR FOR RESOLUTION, THE SOLICITATION WAS
CANCELLED DUE TO A CHANGE IN THE SPECIFICATIONS, AND NOTICE OF THE
CANCELLATION WAS SENT TO THE BIDDERS BY LETTERS OF AUGUST 24, 1972. YOU
CHALLENGE THE CANCELLATION, CLAIMING THAT ONLY "MINOR VARIATIONS" WERE
MADE IN THE SPECIFICATIONS AND THAT THE CHANGES WOULD NOT RESULT IN ANY
PRACTICAL DIFFERENCES IN PERFORMANCE SINCE YOU UNDERSTOOD WHAT WAS
INTENDED BY THE ORIGINAL SPECIFICATIONS.
NOTE 13 OF THE AVCO DRAWING SPECIFIED THAT THE TRANSFORMERS MUST "BE
CAPABLE OF OPERATING CONTINUOUSLY FOR A PERIOD OF 10,000 HOURS AFTER AN
INITIAL STORAGE PERIOD OF 2 YEARS." THE QUALITY ASSURANCE SECTION OF THE
INVITATION FOR BIDS STATED THAT WHEN APPLICABLE "THE COMPLETELY
FABRICATED END ITEM SHALL BE TESTED TO DETERMINE COMPLIANCE WITH
SPECIFIED REQUIREMENTS." ON MAY 10, 1972, IN CONNECTION WITH ANOTHER
CONTRACT AWARDED TO YOU IN 1970 THAT CONTAINED THE SAME PROVISIONS, YOU
QUESTIONED WHETHER ACTUAL TESTING FOR THE NOTE 13 REQUIREMENT WAS
DESIRED, AND POINTED OUT THAT SUCH TESTING WOULD TAKE MORE THAN THREE
YEARS. THE RECORD REFLECTS THAT THE AIR FORCE ENGINEERING SUPPORT
ACTIVITY WAS CONSULTED, AND IT REFUSED TO ELIMINATE THE TESTING
REQUIREMENT. IT RECOMMENDED THAT "TRANSFORMERS BE PROCURED FROM
QUALIFIED SOURCES PER AVCO DWG. NO. 742748" BUT THAT IF QUALIFIED
SOURCES WERE NOT AVAILABLE, "THEN IN ORDER TO EXPEDITE THE PROCUREMENT
AND ON A ONE TIME BASIS *** THE MANUFACTURER BE REQUIRED TO CERTIFY THAT
THEIR TRANSFORMERS WILL MEET THE REQUIREMENT OF NOTE 13."
ON THE BASIS OF THE AIR FORCE RECOMMENDATION AND BECAUSE OF THE
DIFFICULTIES OF CONTRACT INTERPRETATION ENCOUNTERED UNDER THE EXISTING
CONTRACT (AWARDED IN A COMPETITIVE PROCUREMENT) WITH YOUR FIRM, A NEW
PROCUREMENT ITEM DESCRIPTION (PID), CITING TWO QUALIFIED SOURCES OF
SUPPLY, WAS PREPARED. THE INVITATION WAS THEN CANCELLED BECAUSE OF THIS
REVISION TO THE PID.
SUBSEQUENTLY, THE CONTRACTING OFFICER DETERMINED THAT IT WAS NOT
FEASIBLE TO DRAFT ADEQUATE SPECIFICATIONS TO PERMIT PROCUREMENT OF THE
TRANSFORMERS BY COMPETITIVE ADVERTISING. HE ALSO DETERMINED THAT NINE
TRANSFORMERS WERE NEEDED IMMEDIATELY TO ALLEVIATE A CRITICAL STOCK LEVEL
OF THE ITEM. ACCORDINGLY, AN RFP WAS ISSUED ON AUGUST 28, 1972, CALLING
FOR PROCUREMENT OF THE ORIGINAL TEN TRANSFORMERS PLUS THE ADDITIONAL
NINE REQUIRED ON A PUBLIC EXIGENCY BASIS. THE RFP IDENTIFIED THE
TRANSFORMER AS AVCO PART NUMBER 742748 OR MOLONEY ELECTRIC COMPANY PART
NUMBER CSY 742748-TF4TX01YY. MOLONEY SUBMITTED THE SOLE OFFER IN
RESPONSE TO THE RFP.
UPON RECEIPT OF YOUR PROTEST OF THE IFB CANCELLATION, THE CONTRACTING
OFFICER AGAIN CONSULTED WITH THE AIR FORCE, WHICH ADVISED THAT THE NOTE
13 TESTING REQUIREMENT COULD BE SATISFIED IN FUTURE PROCUREMENTS ALSO BY
A CERTIFICATE FROM ANY QUALIFIED CONTRACTOR. A NEW PID WAS THEN
DEVELOPED WHICH ELIMINATED THE REQUIREMENT TO PROCURE FROM SPECIFIED
SOURCES. AS A RESULT THE AIR FORCE REPORTS THAT IT ANTICIPATES THAT
AWARD UNDER THE RFP WILL BE MADE ONLY FOR THE NINE UNITS REQUIRED ON THE
URGENCY BASIS, AND THAT OTHER REQUIREMENTS WILL BE READVERTISED ON THE
BASIS OF THE NEW PID.
WE BELIEVE THAT CANCELLATION OF THE INVITATION FOR BIDS UNDER THE
CIRCUMSTANCES DESCRIBED HEREIN WAS AN APPROPRIATE EXERCISE OF
ADMINISTRATIVE DISCRETION. ASPR 2.404-1 PERMITS CANCELLATION OF AN
INVITATION AFTER BID OPENING WHEN SPECIFICATIONS HAVE BEEN REVISED AND
THERE IS A COMPELLING REASON TO DO SO, AND WE HAVE RECOGNIZED THAT
"ADMINISTRATIVE AUTHORITY TO REJECT ALL BIDS AND READVERTISE IS
EXTREMELY BROAD." 49 COMP. GEN. 211, 215 (1969). IT SEEMS CLEAR THAT,
IN VIEW OF THE AIR FORCE'S INITIAL REFUSAL TO ELIMINATE THE LENGTHY TEST
REQUIREMENT, PROCUREMENT OF THE TRANSFORMERS WITHIN A REASONABLE TIME ON
A COMPETITIVE BASIS SO AS TO SATISFY THE NEEDS OF THE GOVERNMENT WAS NOT
PRACTICABLE UNDER THE IFB SPECIFICATIONS. ACCORDINGLY, AT THE TIME THE
IFB WAS CANCELLED, IT APPEARS THAT THERE EXISTED A SUFFICIENTLY
COMPELLING REASON TO WARRANT SUCH ACTION. THE FACT THAT YOU BELIEVED
THE TESTING WAS NOT REQUIRED OR THAT THE TEST REQUIREMENT WAS
SUBSEQUENTLY WAIVED FOR FUTURE PROCUREMENTS DOES NOT AFFECT THE VALIDITY
OF THE IFB CANCELLATION.
FOR THE FOREGOING REASONS, YOUR PROTEST MUST BE DENIED.
B-176961, JAN 2, 1973
BID PROTEST - EXPERIENCE REQUIREMENTS - RESPONSIBILITY - RESPONSIVENESS
DECISION DENYING THE PROTEST OF INDUSTRIAL MAINTENANCE SERVICES,
INC., AGAINST AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED
AT FORT BELVOIR, VA., FOR CUSTODIAL SERVICES AT DEWITT ARMY HOSPITAL.
EXPERIENCE REQUIREMENTS ON PROCUREMENTS FOR SERVICES ARE A MATTER OF
RESPONSIBILITY OF A BIDDER, SEE B-175254, AUGUST 16, 1972, 52 COMP.
GEN. ___, AND RESPONSIBLE BIDDERS MAY NOT BE REJECTED MERELY FOR FAILURE
TO MEET THE LITERAL REQUIREMENTS OF SUCH PROVISIONS IF A SPECIFIC
DETERMINATION OF RESPONSIBILITY IS MADE BASED UPON CONSIDERATION OF THE
QUALIFICATIONS OF THE PARTICULAR BIDDER. 40 COMP. GEN. 106 (1960).
ALSO, THIS EXPERIENCE REQUIREMENT IS NOT SO UNDULY RESTRICTIVE AS TO
IMPAIR COMPETITIVE BIDDING SINCE SUCH REQUIREMENTS DO NOT HAVE THE
EFFECT OF TRANSFORMING THE PURELY FACTUAL QUESTION OF RESPONSIBILITY
INTO A LEGAL QUESTION OF RESPONSIVENESS. THE GOVERNMENT CONTRACTOR
BRIEFING PAPERS, NO. 72-4, AUGUST 1972.
TO INDUSTRIAL MAINTENANCE SERVICES, INC:
REFERENCE IS MADE TO YOUR LETTERS DATED SEPTEMBER 8 AND NOVEMBER 9,
1972, WITH ENCLOSURES, PROTESTING AGAINST AWARD OF A CONTRACT TO ANY
OTHER FIRM UNDER INVITATION FOR BIDS NO. DABB19-73-B-0002, ISSUED AT
FORT BELVOIR, VIRGINIA.
THE SOLICITATION, COVERING CUSTODIAL SERVICES AT DEWITT ARMY
HOSPITAL, FORT BELVOIR, VIRGINIA, WAS ISSUED AUGUST 1, 1972. BIDS WERE
OPENED ON AUGUST 31, 1972, AND EIGHT BIDS WERE RECEIVED. EVALUATION OF
BIDS RESULTED IN THE DETERMINATION THAT OLD ATLANTIC SERVICES,
INCORPORATED (OLD ATLANTIC), WAS THE LOW BIDDER AT $265,019, ADVANCE
BUILDING MAINTENANCE COMPANY (ADVANCE), WAS SECOND LOW AT $284,416.74,
AND YOUR FIRM WAS NEXT LOW AT $294,429.84. HOWEVER, OLD ATLANTIC
CLAIMED IT HAD MADE A MISTAKE AND WAS PERMITTED TO WITHDRAW ITS BID.
THEREFORE, THE CONTRACTING OFFICER REQUESTED A PREAWARD SURVEY TO
DETERMINE ADVANCE'S RESPONSIBILITY AS A PROSPECTIVE CONTRACTOR. IN A
REPORT DATED SEPTEMBER 22, 1972, THE CHAIRMAN OF THE PRE-AWARD SURVEY
BOARD RECOMMENDED AWARD. BASED UPON THIS RECOMMENDATION, THE
CONTRACTING OFFICER HAS FOUND ADVANCE RESPONSIBLE.
YOU CONTEND THAT THIS BID IS NONRESPONSIVE TO THE SOLICITATION
BECAUSE OF THE BIDDER'S FAILURE TO QUALIFY UNDER THE REQUIREMENT OF
PARAGRAPH C-8 OF THE SOLICITATION, WHICH PROVIDES AS FOLLOWS:
"C.8 QUALIFICATIONS: BIDDERS SHALL ATTACH A STATEMENT OF THEIR
QUALIFICATIONS, NUMBER OF YEARS IN THIS TYPE OF BUSINESS, LOCATION OF
THEIR OFFICE AND PLANT, NAME AND LOCATION OF BANK WHERE ACCOUNT IS
MAINTAINED, REFERENCES AS TO FIRMS FOR WHOM CUSTODIAL SERVICES HAVE BEEN
SATISFACTORILY PERFORMED, PARTICULARLY FEDERAL GOVERNMENT REFERENCES, IF
ANY. BIDDERS SHOULD FURNISH EVIDENCE THAT WITHIN THE LAST TWO YEARS
IMMEDIATELY PRECEDING THE ADVERTISING OF THIS CONTRACT, THEY HAVE
SATISFACTORILY PERFORMED CLEANING OPERATIONS IN GENERAL HOSPITALS (250
BEDS OR MORE) SIMILAR IN SCOPE AND TYPE TO THAT REQUIRED IN THIS BIDDING
DOCUMENT."
YOU WERE FURNISHED A COPY OF THE CONTRACTING OFFICER'S STATEMENT AND
A COPY OF THE ADMINISTRATIVE OFFICE'S LEGAL OPINION. IN A LETTER DATED
NOVEMBER 9, 1972, YOU REPLIED TO THE ADMINISTRATIVE POSITION THAT THE
EXPERIENCE REQUIREMENT RELATES TO THE MATTER OF RESPONSIBILITY AND,
THEREFORE, LITERAL COMPLIANCE THEREWITH IS NOT REQUIRED. YOU ARGUE THAT
SINCE THE REQUIREMENT IS EXPLICIT IN MAKING THE STATED EXPERIENCE A
PREREQUISITE TO AWARD, A NONCOMPLYING BIDDER CANNOT QUALIFY ALTHOUGH HE
IS CONSIDERED OTHERWISE RESPONSIBLE. IN THE ALTERNATIVE, YOU ARGUE THAT
IF THE REQUIREMENT IS CONSIDERED A MATTER OF RESPONSIBILITY, IT IS
RESTRICTIVE OF COMPETITION AND THE INVITATION SHOULD BE CANCELLED AND
THE PROCUREMENT READVERTISED. IN THIS CONNECTION, YOU CITE B-140481,
SEPTEMBER 8, 1959 (PUBLISHED AT 39 COMP. GEN. 173) AND AN ARTICLE ON
RESPONSIBILITY OF BIDDERS, THE GOVERNMENT CONTRACTOR BRIEFING PAPERS,
NO. 72-4, AUGUST 1972.
WE HAVE RECOGNIZED THAT EXPERIENCE REQUIREMENTS DIRECTED PRIMARILY TO
THE EXPERIENCE OF A BIDDER PROPERLY ARE A MATTER OF RESPONSIBILITY. SEE
B-175254, AUGUST 16, 1972, 52 COMP. GEN. ___. SINCE THE SUBJECT
PROCUREMENT IS FOR SERVICES, IT IS CLEAR THAT THE EXPERIENCE REQUIREMENT
RELATES TO THE RESPONSIBILITY OF THE BIDDER. FURTHERMORE, IT IS THE
POSITION OF OUR OFFICE THAT WHERE SUCH REQUIREMENTS ARE PROPERLY
INCLUDED IN A SOLICITATION, RESPONSIBLE BIDDERS MAY NOT BE REJECTED
MERELY FOR FAILURE TO MEET THE LITERAL REQUIREMENTS OF SUCH PROVISIONS,
BUT THAT THERE MUST BE A SPECIFIC DETERMINATION OF RESPONSIBILITY BASED
UPON CONSIDERATION OF THE QUALIFICATIONS OF THE PARTICULAR BIDDER. 40
COMP. GEN. 106 (1960). AS NOTED ABOVE, AN AFFIRMATIVE DETERMINATION HAS
BEEN MADE WITH RESPECT TO ADVANCE. THEREFORE, IT WOULD NOT BE PROPER TO
REJECT ADVANCE'S BID EVEN THOUGH ADVANCE MAY NOT BE IN LITERAL
COMPLIANCE WITH THE REQUIREMENT.
HOWEVER, YOU CONTEND THAT IF THE EXPERIENCE REQUIREMENT IS RELATED TO
RESPONSIBILITY, IT WAS UNDULY RESTRICTIVE AND THE INVITATION SHOULD BE
CANCELLED, CITING 39 COMP. GEN. 173 AND THE BRIEFING PAPER ARTICLE. IN
THAT CASE, WHICH IS ALSO THE SUBJECT OF THE QUOTE FROM THE ARTICLE
REFERRED TO BY YOU, WE CONCLUDED THAT THE PARTICULAR REQUIREMENT COULD
BE CONSIDERED UNDULY RESTRICTIVE BECAUSE ONLY FOUR FIRMS IN THE UNITED
STATES COULD QUALIFY AS HAVING INSTALLED THE COMPARATIVELY NEW AND
INTRICATE SYSTEM. HOWEVER, WE ALSO STATED (P. 178):
"RECOGNIZING THE DESIRABILITY, BOTH FROM THE STANDPOINT OF
ADMINISTRATIVE CONVENIENCE AND FROM THAT OF PROSPECTIVE BIDDERS WHO MAY
BE SAVED USELESS EXPENSE AND EFFORT, OF INCLUDING IN INVITATIONS FOR
BIDS SOME NOTICE TO BIDDERS OF MINIMUM STANDARDS TO BE APPLIED IN
DETERMINING THE QUALIFICATIONS OF BIDDERS, WE FEEL NEVERTHELESS THAT THE
STATEMENT OF SUCH QUALIFICATIONS SHOULD NOT BE CONSIDERED AS HAVING THE
EFFECT OF TRANSFORMING THE PURELY FACTUAL QUESTION OF RESPONSIBILITY
INTO A LEGAL QUESTION OF CONFORMITY OF THE INVITATION."
WHILE WE ARE NOT CONVINCED AS TO THE NECESSITY FOR THE INCLUSION OF
PARAGRAPH C-8 IN THE SUBJECT INVITATION, WE ARE UNABLE TO CONCLUDE THAT
ITS INCLUSION WAS CLEARLY UNNECESSARY OR SO RESTRICTIVE AS TO IMPAIR
COMPETITIVE BIDDING SINCE 8 BIDS WERE RECEIVED.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-177060, JAN 2, 1973
MILITARY PERSONNEL - VARIABLE REENLISTMENT BONUS - EFFECTIVE DATE OF
REENLISTMENT
DECISION DENYING THE ENTITLEMENT OF ROBERT M. BABCOCK TO A VARIABLE
REENLISTMENT BONUS (VRB) FOR HIS EXTENSION OF SERVICE IN THE U.S. COAST
GUARD.
TWO OR MORE VOLUNTARY EXTENSIONS, EFFECTIVE AFTER JANUARY 2, 1968,
ARE TO BE TREATED AS A SINGLE EXTENSION AND, IF THEY TOTAL TWO OR MORE
YEARS, THEY CONSTITUTE A REENLISTMENT FOR REENLISTMENT BONUS PURPOSES.
48 COMP. GEN. 127 (1968). THE EFFECTIVE DATE OF SUCH A REENLISTMENT IS
THE EFFECTIVE DATE OF THE EXTENSION CREATING THE REENLISTMENT, I.E. THE
DATE AFTER THE EXPIRATION OF THE ENLISTMENT CURRENT WHEN THE EXTENSION
AGREEMENT WAS FILED, AND NOT ON THE FILING DATE OF THE AGREEMENT ITSELF.
35 COMP. GEN. 663 (1956). A VRB MAY ONLY BE PAID A MEMBER IF HIS
RATING WAS AUTHORIZED A VRB BECAUSE IT CONSTITUTED A CRITICAL MILITARY
SKILL AND IF IT WAS HIS FIRST REENLISTMENT. 37 U.S.C. 308(G).
TO MR. E. J. ROWE:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 18, 1972,
REQUESTING A DECISION AS TO THE LEGALITY OF PAYING ROBERT M. BABCOCK,
000 00 1850, AD2, A VARIABLE REENLISTMENT BONUS (VRB) IN THE
CIRCUMSTANCES INVOLVED IN HIS CASE.
THE RECORD DISCLOSES THAT PETTY OFFICER BABCOCK ENLISTED FOR A PERIOD
OF 4 YEARS ON JULY 12, 1965.
HE EXECUTED AN EXTENSION AGREEMENT ON OCTOBER 12, 1967, FOR 1 YEAR
AND 4 MONTHS, EFFECTIVE JULY 12, 1969. ON SEPTEMBER 10, 1970, HE
EXECUTED A SECOND EXTENSION AGREEMENT OF 1 YEAR, EFFECTIVE NOVEMBER 12,
1970. HE REENLISTED FOR A PERIOD OF 6 YEARS ON AUGUST 31, 1971. THE
MEMBER WAS PAID A REENLISTMENT BONUS IN THE AMOUNT OF $567 FOR HIS FIRST
AND SECOND EXTENSIONS. HE WAS PAID A SECOND REENLISTMENT BONUS IN THE
AMOUNT OF $1,433 FOR HIS 6-YEAR REENLISTMENT.
PETTY OFFICER BABCOCK CLAIMS HE IS ENTITLED TO VRB FOR THE REASON
THAT BECAUSE HIS FIRST EXTENSION WAS ENTERED INTO PRIOR TO JANUARY 2,
1968, IT SHOULD NOT HAVE BEEN COMBINED WITH HIS SECOND EXTENSION TO
BECOME HIS FIRST REENLISTMENT AND, THEREFORE, HIS FIRST REENLISTMENT
SHOULD HAVE BEEN ON AUGUST 31, 1971, AND A VRB WAS AUTHORIZED FOR AN AD
RATING AT THAT TIME. A VRB WAS AUTHORIZED FOR AD RATINGS EFFECTIVE
MARCH 19, 1971. HIS AUTHORIZED CERTIFYING OFFICER HAS EXPRESSED THE
VIEW, WITH WHICH YOU CONCUR, THAT IT IS THE EFFECTIVE DATE OF AN
EXTENSION RATHER THAN THE DATE AN AGREEMENT TO EXTEND ENLISTMENT IS
ENTERED INTO THAT DETERMINES A MEMBER'S ENTITLEMENT TO BENEFITS
AUTHORIZED FOR A REENLISTMENT.
HOWEVER, IN VIEW OF THE OPINION TO THE CONTRARY EXPRESSED BY THE
CHIEF COUNSEL YOU REQUESTED A DECISION AS TO WHETHER YOUR CONCLUSIONS
HAVE BEEN IN ERROR AND, IF SO, WHETHER IT IS PERMISSIBLE TO REVISE YOUR
REGULATIONS TO PROVIDE THAT THE DATE OF AGREEMENT TO EXTEND ENLISTMENT
IS THE CONTROLLING DATE AND TO SETTLE PROSPECTIVE CLAIMS ON THE BASIS OF
SUCH REVISED REGULATIONS.
SECTION 509, TITLE 10, U.S. CODE, PROVIDES IN PERTINENT PART AS
FOLLOWS:
"(A) UNDER SUCH REGULATIONS AS THE SECRETARY CONCERNED MAY PRESCRIBE,
THE TERM OF ENLISTMENT OF A MEMBER OF AN ARMED FORCE MAY BE EXTENDED OR
REEXTENDED WITH HIS WRITTEN CONSENT FOR ANY PERIOD. HOWEVER, THE TOTAL
OF ALL SUCH EXTENSIONS OF AN ENLISTMENT MAY NOT EXCEED FOUR YEARS."
SECTION 906, TITLE 37, U.S. CODE, PROVIDES THAT:
"A MEMBER OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD,
AS THE CASE MAY BE, WHO EXTENDS HIS ENLISTMENT UNDER SECTION 509 OF
TITLE 10 IS ENTITLED TO THE SAME PAY AND ALLOWANCES AS THOUGH HE HAD
REENLISTED. FOR THE PURPOSES OF DETERMINING ENTITLEMENT TO REENLISTMENT
BONUS OR TO TRAVEL AND TRANSPORTATION ALLOWANCES UPON DISCHARGE, ALL
SUCH EXTENSIONS OF AN ENLISTMENT ARE CONSIDERED ONE CONTINUOUS
EXTENSION."
PARAGRAPH 2B01065D, COMPTROLLER MANUAL CG-264, STATES AS FOLLOWS:
"UNDER THE PROVISIONS OF 10 USC 509 AND 37 USC 906, TWO OR MORE
EXTENSIONS ENTERED INTO ON OR AFTER 2 JANUARY 1968 ARE TREATED AS A
SINGLE EXTENSION. IF THE EXTENSIONS TOTAL TWO YEARS OR MORE, THEY
CONSTITUTE A REENLISTMENT FOR REENLISTMENT BONUS PURPOSES. AN EXTENSION
ENTERED INTO ON OR AFTER 2 JANUARY 1968 MAY NOT BE COMBINED WITH ONE
ENTERED INTO BEFORE 2 JANUARY 1968 FOR THIS PURPOSE."
PARAGRAPH 2B01065D WAS BASED ON THE DECISION 48 COMP. GEN. 127 (1968)
IN WHICH WE HELD, QUOTING FROM THE FIRST SYLLABUS, THAT:
"IN DETERMINING ENTITLEMENT TO A REENLISTMENT BONUS FOR ARMY AND AIR
FORCE PERSONNEL UNDER THE ACT OF JANUARY 2, 1968, WHICH AUTHORIZES THE
EXTENSION OF ENLISTMENTS NOT TO EXCEED 4 YEARS, NOT ONLY FOR NAVY AND
MARINE CORPS MEMBERS BUT FOR THE FIRST TIME FOR ARMY AND AIR FORCE
MEMBERS WHO PRIOR TO THE ACT WERE LIMITED UNDER 10 U.S.C. 3263 AND 8263
TO AN ENLISTMENT EXTENSION 'FOR A PERIOD OF LESS THAN ONE YEAR,' THE ACT
DOES NOT OPERATE TO REQUIRE THE COMBINATION OF ENLISTMENT EXTENSIONS
ENTERED INTO BEFORE AND ON OR AFTER JANUARY 2, 1968, DUE TO THE FACT
THAT ARMY AND AIR FORCE MEMBERS COULD NOT PRIOR TO JANUARY 2, 1968
QUALIFY FOR THE REENLISTMENT BONUS AUTHORIZED BY 37 U.S.C. 308 FOR
REENLISTMENTS OR VOLUNTARY EXTENSIONS OF ENLISTMENTS FOR 'AT LEAST 2
YEARS.'"
WHILE THAT DECISION REFERRED TO ARMY AND NAVY PERSONNEL IT APPLIED
EQUALLY TO MEMBERS OF THE COAST GUARD IN VIEW OF THE FACT THAT THAT PART
OF 14 U.S.C. 461 ASSIMILATING COAST GUARD PERSONNEL WITH PERSONNEL OF
THE NAVY WAS REPEALED BY SECTION 14D OF THE ACT OF SEPTEMBER 7, 1962,
PUBLIC LAW 87-649, 76 STAT. 451, AS ADDED BY THE ACT OF NOVEMBER 2,
1966, PUBLIC LAW 89-718, 80 STAT. 1115, 1124, AS CORRECTED BY THE ACT OF
SEPTEMBER 11, 1967, PUBLIC LAW 90-83, 81 STAT. 195, 220.
ARTICLE 1-G-84, PERSONNEL MANUAL, U.S. COAST GUARD, PROVIDES AS
FOLLOWS:
"UNLESS CANCELED FOR ONE OF THE REASONS SET FORTH IN ARTICLE 1-G-85,
AN AGREEMENT TO EXTEND ENLISTMENT BECOMES EFFECTIVE ON THE DATE NEXT
FOLLOWING THE NORMAL DATE OF EXPIRATION OF ENLISTMENT OR THE DATE OF
EXPIRATION OF ENLISTMENT AS VOLUNTARILY EXTENDED OR AS EXTENDED FOR THE
PURPOSE OF MAKING UP TIME NOT SERVED (SEE ARTICLE 12-B-5), AS
APPROPRIATE."
ARTICLE 1-G-85 PROVIDES IN PERTINENT PART THAT:
"(A) COMMANDING OFFICERS ARE AUTHORIZED TO CANCEL AGREEMENTS TO
EXTEND ENLISTMENTS:
"(1) AT ANY TIME PRIOR TO THE TIME THE EXTENSION BEGINS TO RUN, BUT
NOT THEREAFTER EITHER FOR THE CONVENIENCE OF THE GOVERNMENT OR THE
PERSON CONCERNED. ***"
IN DECISION 35 COMP. GEN. 663 (1956) WE SAID THAT A VOLUNTARY
EXTENSION OF AN ENLISTMENT FOR 2 OR MORE YEARS IS TO BE CONSIDERED A
"REENLISTMENT" AND REGARDLESS OF THE DATE ON WHICH THE EXTENSION
AGREEMENT MAY BE FILED BY THE MEMBER, IT SEEMS PLAIN THAT SERVICE UNDER
SUCH AGREEMENT WOULD NOT BEGIN AND THAT, THEREFORE, "REENLISTMENT" WOULD
NOT BECOME EFFECTIVE UNTIL AFTER THE NORMAL DATE OF EXPIRATION OF THE
ENLISTMENT CURRENT WHEN THE AGREEMENT WAS SIGNED. THUS, THE
REENLISTMENT BONUS AUTHORIZED FOR A VOLUNTARY EXTENSION OF ENLISTMENT
FOR 2 OR MORE YEARS WAS HELD TO BE PAYABLE ONLY AFTER THE EXPIRATION OF
THE CURRENT TERM FOR WHICH THE MEMBER IS OBLIGATED TO SERVE.
THE SAME RULE IS APPLICABLE TO COMBINED EXTENSIONS UNDER 10 U.S.C.
509 AND 37 U.S.C. 907 WHICH CONSTITUTE A REENLISTMENT. HENCE AN
ENLISTMENT OR REENLISTMENT IS NOT ENTERED INTO BY AN AGREEMENT TO EXTEND
AN EXISTING ENLISTMENT UNTIL THE MEMBER COMMENCES TO SERVE UNDER THE
EXTENSION AGREEMENT. THIS IS TRUE BECAUSE UNTIL SUCH TIME AS THE
AGREEMENT TO EXTEND BECOMES EFFECTIVE IT IS SUBJECT TO CANCELLATION FOR
VARIOUS REASONS, INCLUDING REENLISTMENT ON THAT DATE FOR ANY PERIOD OF
ENLISTMENT OF NOT LESS THAN THE TERM OF THE EXTENSION AGREEMENT WHICH
WOULD AUTOMATICALLY CANCEL THE AGREEMENT TO EXTEND.
PETTY OFFICER BABCOCK'S FIRST EXTENSION OF ENLISTMENT BECAME
EFFECTIVE JULY 12, 1969, WHICH WAS SUBSEQUENT TO THE EFFECTIVE DATE OF
10 U.S.C. 509 AND 37 U.S.C. 907 AND WHEN HIS SECOND EXTENSION BECAME
EFFECTIVE ON NOVEMBER 12, 1970, HE WAS ENTITLED TO AND SHOULD HAVE BEEN
PAID A FIRST REENLISTMENT BONUS. WHILE HIS REENLISTMENT ON AUGUST 31,
1971, HAD THE EFFECT OF CANCELLING THE REMAINING SERVICE OBLIGATION
UNDER HIS SECOND EXTENSION AGREEMENT, IT HAD NO BEARING ON HIS
ENTITLEMENT TO A FIRST REENLISTMENT BONUS SINCE HE HAD ALREADY SERVED IN
EXCESS OF 2 YEARS UNDER HIS FIRST AND SECOND EXTENSIONS. CONSEQUENTLY,
HE WAS CORRECTLY PAID A SECOND REENLISTMENT BONUS FOR HIS AUGUST 31,
1971, REENLISTMENT.
UNDER 37 U.S.C. 308(G) A MEMBER WHO IS DESIGNATED AS HAVING A
CRITICAL MILITARY SKILL WHO IS ENTITLED TO A REENLISTMENT BONUS UPON HIS
FIRST REENLISTMENT MAY BE PAID AN ADDITIONAL AMOUNT NOT MORE THAN 4
TIMES THE AMOUNT OF THAT BONUS. AT THE TIME PETTY OFFICER BABCOCK'S
FIRST REENLISTMENT WAS EFFECTIVE ON NOVEMBER 12, 1970, A MEMBER WITH HIS
RATING WAS NOT AUTHORIZED VRB. WHILE A VRB WAS AUTHORIZED FOR AD
RATINGS EFFECTIVE MARCH 19, 1971, HE WAS NOT ENTITLED TO A VRB UPON HIS
REENLISTMENT ON AUGUST 31, 1971, BECAUSE THIS WAS HIS SECOND
REENLISTMENT.
ACCORDINGLY, YOU ARE ADVISED THAT YOUR CONCLUSIONS CONCERNING THIS
CASE ARE CORRECT AND THERE IS NO AUTHORITY FOR REVISION OF THE
REGULATIONS TO PROVIDE THAT THE DATE AN AGREEMENT TO EXTEND ENLISTMENT
IS THE CONTROLLING DATE FOR ENTITLEMENT TO REENLISTMENT BONUS.
B-177306, JAN 2, 1973
CIVILIAN PERSONNEL - PURCHASE OF RESIDENCE - REIMBURSEMENT OF FEES
CONCERNING THE CLAIM OF DONALD F. BROWN, AN EMPLOYEE OF THE
DEPARTMENT OF TRANSPORTATION, FOR CERTAIN FEES INCIDENT TO THE PURCHASE
OF A RESIDENCE INCIDENT TO A CHANGE OF STATION FROM WASHINGTON, D.C., TO
SEATTLE, WASH.
A LOAN ORIGINATION FEE WHICH A LENDING INSTITUTION IS ALLOWED TO
CHARGE FOR PROCESSING A LOAN UNDER REGULATIONS OF THE VETERANS
ADMINISTRATION IS A "LOAN FEE" WITHIN THE MEANING OF SECTION 106(A)(3)
OF THE TRUTH IN LENDING ACT. THEREFORE, REIMBURSEMENT OF THIS ITEM IS
PRECLUDED UNDER OMB CIRCULAR NO. A-56, SECTION 4.2D. SEE B-171056,
NOVEMBER 27, 1970
A CHARGE FOR TAX SERVICE PAID BY THE EMPLOYEE PURCHASER TO AN ESCROW
HOLDER INCIDENT TO PRORATION OF THE TAX OBLIGATIONS OF THE RESIDENCE'S
SELLER AND THE EMPLOYEE IS NOT REIMBURSABLE. 49 COMP. GEN. 483, 486
(1970). HOWEVER, A CHARGE BY THE STATE FOR RECORDATION IS REIMBURSABLE
UNDER OMB CIRCULAR NO. A-56, SECTION 4.2C.
TO MRS. LUELLA S. HOWARD:
WE REFER TO YOUR LETTER DATED OCTOBER 17, 1972, WITH ENCLOSURES,
REQUESTING OUR DECISION AS TO WHETHER A RECLAIM VOUCHER IN THE AMOUNT OF
$392.50 IN FAVOR OF MR. DONALD F. BROWN, AN EMPLOYEE OF THE DEPARTMENT
OF TRANSPORTATION, MAY BE CERTIFIED FOR PAYMENT IN VIEW OF THE
CIRCUMSTANCES HEREINAFTER DESCRIBED.
THE RECORD INDICATES THAT UNDER TRAVEL AUTHORIZATION NO. TS 20312,
DATED SEPTEMBER 23, 1971, MR. BROWN WAS AUTHORIZED A CHANGE OF OFFICIAL
DUTY STATION FROM WASHINGTON, D.C., TO SEATTLE, WASHINGTON.
UPON COMPLETION OF THE SUBJECT TRANSFER, MR. BROWN SUBMITTED VOUCHERS
FOR THE REIMBURSEMENT OF THOSE COSTS INCURRED INCIDENT TO HIS MOVE TO
SEATTLE, WASHINGTON. IN THE ADMINISTRATIVE PROCESSING OF THE VOUCHERS
THERE WAS SUSPENDED THEREFROM, INTER ALIA, THE AMOUNT OF $392.50. SUCH
AMOUNT IS NOW BEING CLAIMED BY MR. BROWN IN THE PRESENT RECLAIM VOUCHER.
THE $392.50 NOW BEING SOUGHT FOR REIMBURSEMENT APPEARS TO CONSTITUTE
A LOAN ORIGINATION FEE WHICH A LENDING INSTITUTION IS ALLOWED TO CHARGE
FOR PROCESSING A LOAN UNDER REGULATIONS OF THE VETERANS ADMINISTRATION
(ALSO REFERRED TO AS A VA FUNDING FEE) AND $10 FOR A TAX REGISTRATION
CHARGE. WITH REGARD TO THE FORMER, WE NOTE THAT THE $382.50 FEE WAS
DESCRIBED AS A "BANK LOAN FEE" ON THE SETTLEMENT SHEET DATED JANUARY 24,
1972, WHICH WAS ISSUED BY THE WASHINGTON MUTUAL SAVINGS BANK (THE
LENDER) AT THE TIME OF SETTLEMENT ON A NEW RESIDENCE IN BELLEVUE,
WASHINGTON. FURTHERMORE, IT IS NOTED THAT THE $382.50 FEE CHARGED BY
THE BANK WAS EXACTLY 1 PERCENT OF THE LOAN AMOUNT INVOLVED.
ANALYSIS OF CORRESPONDENCE ATTACHED TO THE RECLAIM VOUCHER REVEALS
THAT MR. BROWN APPARENTLY FEELS THAT REIMBURSEMENT OF A LOAN ORIGINATION
FEE (VA FUNDING FEE) IS NOT PROHIBITED BY THE CONTROLLING REGULATIONS,
THAT IS, OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56,
REVISED AUGUST 17, 1971.
SERVICE FEES SUCH AS LOAN ORIGINATION OR VA FUNDING FEE FOR THE
PROCESSING OF MORTGAGE PAYMENTS WERE AT ONE TIME PROPER FOR
REIMBURSEMENT. SEE B-169740, MAY 28, 1971, COPY HEREWITH, WHICH
CONCERNED A TRANSACTION THAT OCCURRED PRIOR TO THE JUNE 29, 1969,
REVISION OF OMB CIRCULAR NO. A-56.
THE REVISION REMOVED LOAN ORIGINATION FEES FROM THE LISTING OF
REIMBURSABLE EXPENSES BUT IN GENERAL PROHIBITED REIMBURSEMENT FOR
EXPENSES WHICH ARE DETERMINED TO BE A PART OF THE FINANCE CHARGE UNDER
THE TRUTH IN LENDING ACT.
SECTION 4.2D OF OMB CIRCULAR NO. A-56, REVISED AUGUST 17, 1971,
STATES IN PERTINENT PART:
"*** NOTWITHSTANDING THE ABOVE, NO FEE, COST, CHARGE, OR EXPENSE IS
REIMBURSABLE WHICH IS DETERMINED TO BE A PART OF THE FINANCE CHARGE
UNDER THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW 90-321, AND
REGULATION Z ISSUED PURSUANT THERETO BY THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM. ***"
UNDER SUCH PROVISION WHENEVER AN ITEM OF EXPENSE INCIDENT TO A REAL
ESTATE TRANSACTION CONSTITUTES A FINANCE CHARGE WITHIN THE CONTEMPLATION
OF REGULATION Z REIMBURSEMENT THEREFOR IS PRECLUDED. SECTION 106 OF THE
TRUTH IN LENDING ACT IS IN PART AS FOLLOWS:
"(A) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE AMOUNT OF THE
FINANCE CHARGE IN CONNECTION WITH ANY CONSUMER CREDIT TRANSACTION SHALL
BE DETERMINED AS THE SUM OF ALL CHARGES, PAYABLE DIRECTLY OR INDIRECTLY
BY THE PERSON TO WHOM THE CREDIT IS EXTENDED, AND IMPOSED DIRECTLY OR
INDIRECTLY BY THE CREDITOR AS AN INCIDENT TO THE EXTENSION OF CREDIT,
INCLUDING ANY OF THE FOLLOWING TYPES OF CHARGES WHICH ARE APPLICABLE:
"(1) INTEREST, TIME PRICE DIFFERENTIAL, AND ANY AMOUNT PAYABLE UNDER
A POINT, DISCOUNT, OR OTHER SYSTEM OF ADDITIONAL CHARGES.
"(2) SERVICE OR CARRYING CHARGE.
"(3) LOAN FEE, FINDER'S FEE, OR SIMILAR CHARGE.
"(4) FEE FOR AN INVESTIGATION OR CREDIT REPORT.
"(5) PREMIUM OR OTHER CHARGE FOR ANY GUARANTEE OR INSURANCE
PROTECTING THE CREDITOR AGAINST THE OBLIGOR'S DEFAULT OR OTHER CREDIT
LOSS.
"(E) THE FOLLOWING ITEMS, WHEN CHARGED IN CONNECTION WITH ANY
EXTENSION OF CREDIT SECURED BY AN INTEREST IN REAL PROPERTY, SHALL NOT
BE INCLUDED IN THE COMPUTATION OF THE FINANCE CHARGE WITH RESPECT TO
THAT TRANSACTION:
"(1) FEES OR PREMIUMS FOR TITLE EXAMINATION, TITLE INSURANCE, OR
SIMILAR PURPOSES.
"(2) FEES FOR PREPARATION OF A DEED, SETTLEMENT STATEMENT, OR OTHER
DOCUMENTS.
"(3) ESCROWS FOR FUTURE PAYMENTS OF TAXES AND INSURANCE.
"(4) FEES FOR NOTARIZING DEEDS AND OTHER DOCUMENTS.
"(5) APPRAISAL FEES.
"(6) CREDIT REPORTS."
REGULATION Z (12 CFR, PART 226) WAS PROMULGATED BY THE BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM PURSUANT TO THE TRUTH IN LENDING
ACT, AND SETS FORTH THE FOREGOING IN SUBSTANTIALLY THE SAME FORM.
THE ITEM HERE INVOLVED RELATES TO THE APPLICATION, PROCESSING AND
SERVICING OF MR. BROWN'S LOAN AND IS CLEARLY A "LOAN FEE" WITHIN THE
MEANING OF SECTION 106(A)(3) OF THE TRUTH IN LENDING ACT. IT SHOULD BE
NOTED THAT SUCH A FEE DOES NOT COME WITHIN THE ITEMS EXCLUDED UNDER
SECTION 106(E) OF THE ACT. ACCORDINGLY, REIMBURSEMENT OF THE $382.50
ITEM IS PRECLUDED. SEE B-171056, NOVEMBER 27, 1970; B-173814, OCTOBER
21, 1971; AND B-175889, JUNE 19, 1972, COPIES ENCLOSED.
AS TO THE TAX REGISTRATION CHARGE OF $10, THE RECORD DOES NOT
INDICATE WHETHER SUCH CHARGE IS FOR TAX SERVICE PAID BY THE EMPLOYEE
PURCHASER TO THE ESCROW HOLDER INCIDENT TO PRORATION OF THE TAX
OBLIGATIONS OF THE PARTIES INVOLVED (BUYER AND SELLER) OR IF IT IS A
CHARGE LEVIED BY THE STATE OF WASHINGTON FOR RECORDATION. IF THE $10
ITEM HAS TO DO WITH PRORATION OF TAXES, IT WOULD NOT BE REIMBURSABLE.
49 COMP. GEN. 483, 486 (1970). ON THE OTHER HAND IF IT IS IN THE NATURE
OF A RECORDING FEE, IT WOULD APPEAR TO BE REIMBURSABLE UNDER SECTION
4.2C OF OMB CIRCULAR NO. A-56, INSOFAR AS IT WOULD REPRESENT A COST
CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE IN THE STATE OF
WASHINGTON.
THE VOUCHERS WITH ACCOMPANYING PAPERS ARE RETURNED HEREWITH FOR
HANDLING IN ACCORDANCE WITH THE FOREGOING.
B-177323, JAN 2, 1973
CIVILIAN PERSONNEL - LEGAL FEES - PURCHASE OF RESIDENCE
DECISION ALLOWING CERTIFICATION FOR PAYMENT OF A VOUCHER IN FAVOR OF
DONALD L. BRODSKY, AN EMPLOYEE OF THE FEDERAL MEDIATION AND CONCILIATION
SERVICE, REPRESENTING LEGAL FEES ASSOCIATED WITH THE PURCHASE OF A NEW
RESIDENCE INCIDENT TO A PERMANENT CHANGE OF STATION.
LEGAL FEES FOR THE PREPARATION OF ABSTRACT OF TITLE, THE RENDERING OF
A TITLE OPINION, PREPARATION OF DEED AND MORTGAGE PAPERS, CONDUCTING
SETTLEMENT, AND A TITLE EXAMINATION WHERE IT IS CUSTOMARILY PAID BY THE
PURCHASER IN THE AREA INVOLVED ARE ALL REIMBURSABLE UNDER OMB CIRCULAR
NO. A-56, SECTION 4.2C.
TO MISS ROSE M. SPERLING:
REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 25, 1972, WITH
ENCLOSURES, WHICH REQUESTS OUR DECISION AS TO WHETHER THE ENCLOSED
RECLAIM VOUCHER IN THE AMOUNT OF $425, IN FAVOR OF MR. DONALD L.
BRODSKY, AN EMPLOYEE OF THE FEDERAL MEDIATION AND CONCILIATION SERVICE,
MAY BE CERTIFIED FOR PAYMENT UNDER THE CIRCUMSTANCES HEREINAFTER
DESCRIBED.
THE RECORD INDICATES THAT UNDER TRAVEL AUTHORIZATION NO. 0-71-35,
DATED JULY 29, 1970, MR. BRODSKY EFFECTED A CHANGE OF HIS OFFICIAL DUTY
STATION TO BALTIMORE, MARYLAND. IN CONNECTION WITH SUCH TRANSFER HE
PURCHASED A RESIDENCE AT THE NEW OFFICIAL DUTY STATION AND SUBMITTED A
VOUCHER FOR THE REIMBURSEMENT OF COSTS INCURRED INCIDENT THERETO. THE
AMOUNT OF $425, REPRESENTING COSTS INCURRED BY MR. BRODSKY FOR LEGAL
FEES ASSOCIATED WITH THE PURCHASE OF HIS RESIDENCE AT THE NEW DUTY
STATION, WAS SUSPENDED SINCE THE LEGAL SERVICES WERE NOT ITEMIZED. MR.
BRODSKY HAS NOW SUBMITTED A RECLAIM VOUCHER FOR THE $425 LEGAL SERVICES.
IN SUPPORT THEREOF HE HAS ENCLOSED STATEMENTS FROM THE LENDER'S
ATTORNEY WHO PERFORMED THE SERVICES, STATING THAT THE FEE COVERED A
TITLE EXAMINATION, PREPARATION OF ABSTRACT OF TITLE, THE RENDERING OF A
TITLE OPINION, CONDUCTING THE SETTLEMENT, AND PREPARATION OF THE DEED
AND MORTGAGE PAPERS.
SECTION 4.2C OF THE CONTROLLING REGULATIONS, OFFICE OF MANAGEMENT AND
BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969, STATES AS FOLLOWS:
"C. LEGAL AND RELATED COSTS. TO THE EXTENT SUCH COSTS HAVE NOT BEEN
INCLUDED IN BROKERS' OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS
CLAIMED UNDER OTHER CATEGORIES, THE FOLLOWING EXPENSES ARE REIMBURSABLE
WITH RESPECT TO THE SALE AND PURCHASE OF RESIDENCES IF THEY ARE
CUSTOMARILY PAID BY THE SELLER OF A RESIDENCE AT THE OLD OFFICIAL
STATION OR IF CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE
NEW OFFICIAL STATION, TO THE EXTENT THEY DO NOT EXCEED AMOUNTS
CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENCE; COSTS OF (1)
SEARCHING TITLE, PREPARING ABSTRACT, AND LEGAL FEES FOR A TITLE OPINION,
OR (2) WHERE CUSTOMARILY FURNISHED BY THE SELLER, THE COST OF A TITLE
INSURANCE POLICY; COSTS OF PREPARING CONVEYANCES, OTHER INSTRUMENTS,
AND CONTRACTS; RELATED NOTARY FEES AND RECORDING FEES; COSTS OF MAKING
SURVEYS, PREPARING DRAWINGS OR PLATS WHEN REQUIRED FOR LEGAL OR
FINANCING PURPOSES; AND SIMILAR EXPENSES. COSTS OF LITIGATION ARE NOT
REIMBURSABLE."
ALL OF THE SERVICES HERE INVOLVED, WITH THE EXCEPTION OF THOSE ITEMS
PERTAINING TO THE TITLE EXAMINATION AND CONDUCTING THE SETTLEMENT, ARE
EXPRESSLY STATED TO BE REIMBURSABLE SERVICES UNDER SECTION 4.2C, SUPRA.
AS TO THE ITEM RELATING TO TITLE EXAMINATION, WE HELD IN B-171323,
FEBRUARY 5, 1971, COPY HEREWITH, THAT THE EXPENSES INCURRED FOR SUCH A
SERVICE ARE REIMBURSABLE WHEN CUSTOMARILY PAID BY THE PURCHASER IN THE
AREA INVOLVED. INASMUCH AS THAT IS THE CASE IN THE BALTIMORE, MARYLAND
AREA, THE COST OF TITLE EXAMINATION IS REIMBURSABLE. REGARDING THE
CONDUCTING OF THE SETTLEMENT BY THE ATTORNEY, WE ARE OF THE VIEW THAT,
INASMUCH AS THIS IS NOT A PERSONAL SERVICE TO THE EMPLOYEE OF AN
ADVISORY OR REPRESENTATIONAL NATURE, THAT A FEE FOR SUCH LEGAL SERVICE
IS ALSO REIMBURSABLE.
WE HAVE PREVIOUSLY INDICATED THE NECESSITY TO STATE SEPARATELY THE
COSTS INCURRED BY AN EMPLOYEE FOR EACH LEGAL SERVICE OBTAINED INCIDENT
TO THE PURCHASE OR SALE OF A RESIDENCE. HOWEVER, WE DO NOT BELIEVE THAT
ADHERENCE TO THE REQUIREMENT OF COST ITEMIZATION IS REQUIRED IN THOSE
SITUATIONS WHERE ALL THE LEGAL SERVICES RECEIVED BY THE EMPLOYEE ARE
REIMBURSABLE. IN SUCH CASES IT IS OUR VIEW THAT PAYMENT OF THE SUM OF
THE COSTS FOR ALL REIMBURSABLE SERVICES (THE FLAT FEE) HAS THE SAME
PROPRIETY AS THE PAYMENT OF EACH FEE ON AN INDIVIDUAL BASIS.
IN VIEW OF THE ABOVE THE VOUCHER, WITH ACCOMPANYING PAPERS, IS
RETURNED HEREWITH AND MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE PROPER.
B-177330, JAN 2, 1973
CONTRACTS - CANCELLATION - MISTAKE IN BID - BID CORRECTION
DECISION ALLOWING CANCELLATION OF A CONTRACT AWARDED TO THE TURNER
COMPANY BY GSA FOR LIQUID FUEL FIRE POTS, BUT NOT PERMITTING A
CORRECTION IN TURNER'S BID.
A BIDDER WHO HAS MADE A MISTAKE IN BID MAY NOT RECALCULATE AND CHANGE
ITS BID TO INCLUDE FACTORS NOT CONSIDERED WHEN THE BID WAS SUBMITTED.
17 COMP. GEN. 575. HOWEVER, IF A MISTAKE IN BID IS ESTABLISHED AND NO
DELIVERY HAS BEEN MADE, THE CONTRACT MAY BE CANCELLED WITHOUT LIABILITY
TO THE CONTRACTOR.
TO MR. ARTHUR F. SAMPSON:
REFERENCE IS MADE TO LETTER DATED OCTOBER 25, 1972, WITH ENCLOSURES,
FROM THE GENERAL COUNSEL, REQUESTING A DECISION AS TO THE ACTION TO BE
TAKEN CONCERNING AN ERROR ALLEGED BY THE TURNER COMPANY TO HAVE BEEN
MADE IN ITS BID UPON WHICH CONTRACT NO. GS-06S-7007 WAS BASED.
THE PROCUREMENT DIVISION, FEDERAL SUPPLY SERVICE, GENERAL SERVICES
ADMINISTRATION (GSA), KANSAS CITY, MISSOURI, BY INVITATION FOR BIDS NO.
6PR-W-04081-CK-F REQUESTED BIDS FOR FURNISHING 132 LIQUID FUEL FIRE
POTS. THE TURNER COMPANY SUBMITTED THE ONLY BID IN THE AMOUNT OF $28.44
PER UNIT. THE BID OF THE COMPANY WAS ACCEPTED ON MARCH 23, 1972.
IT IS REPORTED THAT ON JUNE 19, 1972, TURNER'S REPRESENTATIVE
TELEPHONED THE CONTRACTING OFFICER ALLEGING THAT THE COMPANY HAD MADE A
MISTAKE IN ITS BID ON THE FIRE POTS AND STATED THAT HE WAS FIRST AWARE
OF THE MISTAKE AT THE TIME ANOTHER GSA CONTRACTING OFFICER CALLED HIM
AND QUESTIONED THE COMPANY'S BID OF $43.83 FOR THE SAME ITEM.
IN A LETTER DATED JUNE 21, 1972, TURNER STATED THAT IT HAD
ERRONEOUSLY BASED ITS BID PRICE ON FURNISHING ITS MODEL T-20 GASOLINE
FIRE POT RATHER THAN ON FURNISHING THE PROPANE FIRE POT REQUIRED BY THE
SPECIFICATIONS AND THAT THE REQUIRED FIRE POT CONSISTS OF FIVE
COMPONENTS, THE TOTAL COST OF WHICH IS $43.83. IN SUPPORT OF ITS
ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS PRINTED PRICE LIST WHICH
SHOWS THE COST OF EACH OF THE FIVE COMPONENTS NEEDED FOR THE ASSEMBLY OF
THE REQUIRED FIRE POT. TURNER ALSO SUBMITTED COPIES OF TWO INVOICES
WHICH IT HAD SENT TO GSA FOR FIRE POTS SIMILAR TO THOSE REQUIRED BY THE
SUBJECT SOLICITATION. THE INVOICES SHOW UNIT PRICES OF $40 AND $42.05,
RESPECTIVELY.
ON THE BASIS OF THE RECORD IT APPEARS THAT TURNER MADE A MISTAKE IN
ITS BID. HOWEVER, IN REQUESTING CORRECTION OF THE MISTAKE, TURNER DOES
NOT SEEK TO HAVE THE BID CORRECTED SO AS TO HAVE INCLUDED THEREIN A
PREVIOUSLY CALCULATED ITEM WHICH WAS INADVERTENTLY OMITTED FROM THE
AMOUNT OF THE ORIGINAL BID. RATHER, TURNER PROPOSES TO FURNISH A
DIFFERENT MODEL FIRE POT THAN THE ONE IT BASED ITS BID UPON AND TO
INCREASE THE BID BY AN AMOUNT REPRESENTING THE DIFFERENCE IN PRICE
BETWEEN THE TWO MODELS.
IN 17 COMP. GEN. 575, 577 (1938), IT WAS STATED:
"*** THE BASIC RULE IS, OF COURSE, THAT BIDS MAY NOT BE CHANGED AFTER
THEY ARE OPENED, AND THE EXCEPTION PERMITTING A BID TO BE CORRECTED UPON
SUFFICIENT FACTS ESTABLISHING THAT A BIDDER ACTUALLY INTENDED TO BID AN
AMOUNT OTHER THAN SET DOWN ON THE BID FORM, WHERE THE CONTRACTING
OFFICER IS ON NOTICE OF THE ERROR PRIOR TO ACCEPTANCE, DOES NOT EXTEND
TO PERMITTING A BIDDER TO RECALCULATE AND CHANGE HIS BID TO INCLUDE
FACTORS WHICH HE DID NOT HAVE IN MIND WHEN HIS BID WAS SUBMITTED, OR AS
TO WHICH HE HAS SINCE CHANGED HIS MIND. TO PERMIT THIS WOULD REDUCE TO
A MOCKERY THE PROCEDURE OF COMPETITIVE BIDDING REQUIRED BY LAW IN THE
LETTING OF PUBLIC CONTRACTS. ***"
THE FOREGOING IS EQUALLY APPLICABLE HERE. TO ALLOW CORRECTION OF THE
TURNER BID WOULD BE, IN EFFECT, PERMITTING IT TO RECALCULATE AND CHANGE
THE BID TO INCLUDE FACTORS IT DID NOT HAVE IN MIND WHEN IT SUBMITTED THE
BID. SEE B-174620, FEBRUARY 2, 1972.
IN VIEW OF THE FOREGOING, AND SINCE NO DELIVERY HAS BEEN MADE,
CONTRACT NO. GS-06S-7007 MAY BE CANCELLED WITHOUT LIABILITY TO TURNER.
B-176291(1), DEC 29, 1972
BID PROTEST - PROPOSAL EVALUATION - EVALUATOR SELECTION
DECISION DENYING THE PROTEST OF THE MEDICAL UNIVERSITY OF SOUTH
CAROLINA AGAINST AWARD OF CONTRACTS UNDER AN RFP ISSUED BY THE HEALTH
SERVICES AND MENTAL HEALTH ADMINISTRATION, FOR DEVELOPMENT OF EMERGENCY
HEALTH SERVICES SYSTEMS.
PROPOSAL EVALUATION IS PRIMARILY A FUNCTION OF THE PROCUREMENT
AGENCY, SUBJECT TO QUESTION BY GAO ONLY WHEN CLEARLY UNREASONABLE OR IN
VIOLATION OF PROCUREMENT REGULATIONS. SEE B-174797, JUNE 30, 1972. IT
FOLLOWS THEN THAT THE SELECTION OF EVALUATORS IS ALSO AN AGENCY
RESPONSIBILITY, AND SINCE THERE IS NO SHOWING THAT THE EVALUATORS IN
QUESTION HERE LACKED EXPERTISE, THIS PROTEST IS DENIED.
TO MEDICAL UNIVERSITY OF SOUTH CAROLINA:
REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 13, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING THE AWARD OF CONTRACTS UNDER REQUEST FOR
PROPOSALS (RFP) NO. HSM 110-0A-57(2), ISSUED BY THE HEALTH SERVICES AND
MENTAL HEALTH ADMINISTRATION (HSMHA), DEPARTMENT OF HEALTH, EDUCATION,
AND WELFARE (HEW).
THE RFP WAS FOR THE DEVELOPMENT OF FIVE TOTAL EMERGENCY HEALTH
SERVICES SYSTEMS IN GEOGRAPHICALLY DISPERSED AREAS OF DIFFERING
POPULATION DENSITIES. THE RFP WAS ISSUED ON MARCH 24, 1972, AND
PROPOSALS WERE RECEIVED FROM 51 OFFERORS BY THE AMENDED CLOSING DATE FOR
THE RECEIPT OF PROPOSALS OF APRIL 21, 1972. TWELVE OFFERORS, INCLUDING
THE MEDICAL UNIVERSITY OF SOUTH CAROLINA, WERE SELECTED FOR SITE VISITS
BY HSMHA PERSONNEL FOR THE PURPOSE, APPARENTLY, OF PROPOSAL
CLARIFICATION AND EVALUATION. FOLLOWING THESE SITE VISITS, EVALUATION
REPORTS WERE PREPARED BY COGNIZANT HSMHA PERSONNEL AND FIVE OFFERORS
WERE SELECTED FOR CONTRACT AWARDS MADE ON JUNE 28, 1972, NOTWITHSTANDING
THE FACT THAT YOUR PROTEST HAD BEEN FILED PRIOR TO THAT TIME.
YOU PROTEST THAT THE SITE VISIT TEAM WHICH VISITED THE MEDICAL
UNIVERSITY OF SOUTH CAROLINA WAS LACKING IN THE EXPERTISE REQUIRED TO
PROPERLY EVALUATE A PROPOSAL FOR AN EMERGENCY MEDICAL SERVICE
DEMONSTRATION PROJECT, AND THAT SUCH REQUIRED EXPERTISE WAS POSSESSED BY
OTHER SITE VISIT TEAMS ASSIGNED TO THE EVALUATION OF AT LEAST SOME OF
THE OTHER PROPOSALS. IN THIS REGARD, YOU CONTEND THAT ONLY ONE
"NON-FEDERAL" CONSULTANT WAS INCLUDED IN THE TEAM ASSIGNED TO EVALUATE
THE MEDICAL UNIVERSITY PROPOSAL AND THAT THE TEAM LACKED EXPERTISE IN
COMMUNICATIONS, AMBULANCE SERVICE DELIVERY AND EMERGENCY MEDICAL SERVICE
DELIVERY. YOU FURTHER COMPLAIN THAT INSUFFICIENT NOTICE WAS PROVIDED BY
HSMHA OF THE INTENDED SITE VISIT IN THAT NOTICE OF ONLY 7 WORK DAYS WAS
PROVIDED. FINALLY, YOU PROTEST "THE MANNER IN WHICH THE ORIGINAL RFP
WAS RELEASED," APPARENTLY HAVING REFERENCE TO THE FACT THAT THE MEDICAL
UNIVERSITY WAS NOT FURNISHED A COPY OF THE RFP WHEN IT WAS INITIALLY
RELEASED ON MARCH 24, 1972.
THE REPORT FURNISHED OUR OFFICE BY HEW STATES THAT THE 7-MAN SITE
VISIT TEAM WHICH VISITED THE MEDICAL UNIVERSITY OF SOUTH CAROLINA
CONSISTED OF FIVE MEDICAL DOCTORS, INCLUDING THE ASSISTANT ADMINISTRATOR
FOR PUBLIC HEALTH AFFAIRS; THE DEPUTY ASSOCIATE ADMINISTRATOR FOR
DEVELOPMENT; THE DIRECTOR, EMERGENCY HEALTH SERVICES; THE DIRECTOR,
REGIONAL MEDICAL PROGRAMS; AND THE DIRECTOR, NATIONAL CENTER FOR HEALTH
STATISTICS RESEARCH AND DEVELOPMENT. THE TWO NONMEDICAL EVALUATION TEAM
MEMBERS ARE STATED TO POSSESS APPROPRIATE ADMINISTRATIVE EXPERIENCE IN
THE FIELD OF COMMUNITY HEALTH SERVICES AND EMERGENCY MEDICAL SERVICES.
THE REPORT THEREFORE CONCLUDES THAT THIS TEAM POSSESSED THE REQUISITE
EXPERTISE TO EVALUATE THE PROPOSAL OF THE MEDICAL UNIVERSITY. THE TEAM,
HOWEVER, CONCLUDED THAT THE MEDICAL UNIVERSITY PROPOSAL WAS NOT AS
DESIRABLE AS THE PROPOSALS SUBMITTED BY OTHER OFFERORS, PRIMARILY
BECAUSE IT WAS "TOO TRAUMA ORIENTED WITH LITTLE ATTENTION BEING GIVEN TO
THE NONAMBULANCE EMERGENTS ENTERING THE SYSTEM" AND BECAUSE "THE
RESEARCH ORIENTATION OF THE PROPOSAL WAS FOUND TO BE OVERPOWERING" EVEN
THOUGH THE RFP DID NOT CALL FOR RESEARCH AS SUCH BUT RATHER FOR AN
EXISTING EMERGENCY MEDICAL SERVICES SYSTEM.
WITH RESPECT TO YOUR COMPLAINT THAT THE SITE VISIT TEAMS WHICH
EVALUATED THE PROPOSALS OF OTHER OFFERORS POSSESSED EXPERTISE LACKING IN
THE TEAM WHICH EVALUATED THE MEDICAL UNIVERSITY PROPOSAL, AND THAT ONLY
ONE "NON-FEDERAL" CONSULTANT WAS INCLUDED IN THE MEDICAL UNIVERSITY SITE
VISIT TEAM, THE REPORT CONCEDES THAT THE SAME TEAM MEMBERS DID NOT
PARTICIPATE IN EACH SITE VISIT AND THAT CERTAIN "NON-FEDERAL" PHYSICIANS
ORIGINALLY SCHEDULED TO PARTICIPATE IN THE MEDICAL UNIVERSITY SITE VISIT
WERE UNABLE TO ATTEND BECAUSE OF SCHEDULING PROBLEMS. HOWEVER, THE
REPORT EMPHATICALLY STATES THAT:
"THE COMPOSITION OF THE TEAM PROVIDED AMPLE EXPERIENCE AND EXPERTISE
IN THE THREE AREAS OF CONCERN TO SATISFACTORILY ASCERTAIN THAT THE
PROPOSED APPROACH FOR COMMUNICATIONS, AMBULANCE SERVICE DELIVERY AND EMS
TRAINING WAS SUFFICIENT TO PERFORM THE REQUIRED LEVEL OF SERVICE. ***"
WITH RESPECT TO YOUR COMPLAINT ABOUT THE SUFFICIENCY OF THE SITE
VISIT NOTICE, THE REPORT POINTS OUT THAT THE APPROXIMATELY 10 DAYS'
NOTICE PROVIDED THE MEDICAL UNIVERSITY WAS ABOUT THE SAME AS THAT
PROVIDED OTHER OFFERORS. FINALLY, ON THE QUESTION OF THE FAILURE
INITIALLY TO FURNISH THE MEDICAL UNIVERSITY WITH AN RFP, THE REPORT
DETAILS THE STEPS TAKEN TO ASSURE ADEQUATE COMPETITION, INCLUDING
ADVERTISEMENT IN THE COMMERCE BUSINESS DAILY, DISSEMINATION OF THE RFP
TO APPROPRIATE OFFICES WITHIN HEW, THE ALLOWANCE OF A 4-WEEK PROPOSAL
RESPONSE TIME (INCLUDING A 1-WEEK EXTENSION), AND POINTS OUT THAT,
NOTWITHSTANDING THE COMPLAINT THAT A COPY OF THE RFP WAS NOT FURNISHED
THE MEDICAL UNIVERSITY WHEN ISSUED, THE MEDICAL UNIVERSITY PROPOSAL WAS
DATED APRIL 11, 1972, SOME 10 DAYS BEFORE THE APRIL 21 CLOSING DATE FOR
PROPOSAL SUBMISSION.
THE ADMINISTRATIVE REPORT CONCLUDES BY RECOMMENDING THAT THE PROTEST
BE DENIED AND FOR REASONS SET OUT BELOW WE CONCUR IN THE RECOMMENDATION.
PROPOSAL EVALUATION IS PRIMARILY A FUNCTION OF THE PROCUREMENT AGENCY
SUBJECT TO QUESTION BY OUR OFFICE ONLY WHEN CLEARLY UNREASONABLE OR IN
VIOLATION OF PROCUREMENT REGULATIONS. SEE B-174799, JUNE 30, 1972. AN
OBVIOUS COROLLARY OF THIS FUNCTION IS THE SELECTION OF QUALIFIED
INDIVIDUALS TO PERFORM THE REQUIRED EVALUATION. IN THIS INSTANCE, FIVE
OF THE EVALUATORS WERE MEDICAL DOCTORS HOLDING RESPONSIBLE POSITIONS IN
HSMHA AND ALL SEVEN OF THE EVALUATORS ARE STATED TO BE SUFFICIENTLY
EXPERT IN THE FIELD OF EMERGENCY MEDICAL SERVICES TO PROPERLY EVALUATE A
PROPOSAL FOR AN EMERGENCY MEDICAL SERVICES SYSTEM. THERE IS NOTHING IN
THE RECORD BEFORE US TO SUBSTANTIATE YOUR CONTENTION THAT THE SITE VISIT
EVALUATION TEAM DID NOT POSSESS THE REQUIRED EXPERTISE. NOR IS THERE
ANY REQUIREMENT THAT OUTSIDE CONSULTANTS BE UTILIZED IN AN EVALUATION
SUCH AS THAT HERE INVOLVED. THE FACT THAT SUCH OUTSIDE CONSULTANTS
MIGHT HAVE BEEN USED IN THE EVALUATION OF OTHER PROPOSALS IS NOT
CONSIDERED RELEVANT SO LONG AS THE INDIVIDUALS CHOSEN TO CONDUCT THE
EVALUATION OF THE MEDICAL UNIVERSITY PROPOSAL POSSESSED THE REQUISITE
QUALIFICATIONS. THE RECOMMENDATIONS OF ANY OUTSIDE CONSULTANTS COULD
ONLY BE ADVISORY IN ANY EVENT WITH THE RESPONSIBILITY FOR ANY BINDING
DETERMINATION AS TO PROPOSAL ACCEPTABILITY RESTING WITH THE HSMHA
OFFICIALS WHO PARTICIPATED IN THE MEDICAL UNIVERSITY EVALUATION.
ALTHOUGH IT IS UNFORTUNATE THAT THE MEDICAL UNIVERSITY DID NOT
RECEIVE AN RFP INITIALLY, THE FACT REMAINS THAT YOU DID FORWARD A
PROPOSAL IN ADVANCE OF THE ORIGINAL CLOSING DATE FOR THE SUBMISSION OF
OFFERS AND YOU HAVE INDICATED IN THE LETTER OF SEPTEMBER 13, 1972, THAT
EVEN WITH ADDITIONAL TIME FOR THE SUBMISSION, WHICH YOU LEARNED OF AFTER
SUBMISSION OF THE PROPOSAL, "THIS WOULD NOT HAVE ALTERED OUR APPROACH TO
ANY SIGNIFICANT DEGREE." THEREFORE, THE FACT THAT YOUR PROPOSAL WAS NOT
FAVORABLY CONSIDERED BY THE CONTRACTING AGENCY CANNOT BE ATTRIBUTED TO
THE FAILURE TO ISSUE YOU AN RFP PROMPTLY. IN ANY EVENT, FROM THE
STANDPOINT OF THE GOVERNMENT, THE NUMBER OF PROPOSALS RECEIVED INDICATES
THAT THERE WAS ADEQUATE COMPETITION FOR THE PRESENT PROCUREMENT.
SIMILARLY, INASMUCH AS THE SITE VISIT APPARENTLY WAS IN THE NATURE
MERELY OF A CLARIFICATION AND DISCUSSION OF THE ORIGINALLY SUBMITTED
PROPOSAL, WE CONCLUDE THAT THE NOTICE GIVEN OF THE SITE VISIT WAS
ADEQUATE.
ACCORDINGLY, THE PROPOSAL EVALUATION IS NOT SUBJECT TO QUESTION BY
OUR OFFICE.
IN OUR REVIEW OF THE RECORD OF THIS CASE, HOWEVER, WE OBSERVED THAT
ALTHOUGH YOUR PROTEST WAS FILED ON JUNE 20, 1972, BEFORE AWARDS WERE
MADE UNDER THE INSTANT RFP, AND HEW WAS INFORMALLY ADVISED OF THE
PROTEST ON JUNE 22, 1972, ALSO BEFORE ANY AWARDS WERE MADE, THERE IS NO
INDICATION IN THE FILE THAT APPROVAL BY HIGHER AUTHORITY OF THE
DETERMINATION TO MAKE AWARD NOTWITHSTANDING THE PROTEST WAS SECURED, AS
REQUIRED BY SECTION 1-2.407-8(B)(3) OF THE FEDERAL PROCUREMENT
REGULATIONS (FPR), NOR WAS OUR OFFICE NOTIFIED OF THE DETERMINATION,
ALSO REQUIRED BY THAT FPR SECTION. WHILE THIS PROCEDURAL IRREGULARITY
IS NOT SUFFICIENT TO INVALIDATE THE AWARDS MADE, WE ARE BRINGING IT TO
THE ATTENTION OF THE SECRETARY OF HEW BY LETTER OF TODAY FOR THE PURPOSE
OF PRECLUDING ITS REPETITION IN FUTURE PROCUREMENTS.
B-176291(2), DEC 29, 1972
BID PROTEST - NOTIFICATION OF INTENT TO MAKE AWARD
CONCERNING THE PROTEST OF THE MEDICAL UNIVERSITY OF SOUTH CAROLINA
UNDER A RFP ISSUED BY THE HEALTH SERVICES AND MENTAL HEALTH
ADMINISTRATION.
ALTHOUGH THIS PROTEST WAS DENIED, THERE IS NO INDICATION THAT HIGHER
AUTHORITIES APPROVED THE DETERMINATION TO MAKE AWARD NOTWITHSTANDING THE
PROTEST, NOR WAS GAO NOTIFIED OF SUCH DETERMINATION. BOTH ARE REQUIRED
BY FPR 1-2.407-8(B)(3).
TO MR. SECRETARY:
BY LETTER DATED AUGUST 2, 1972, THE DIRECTOR OF PROCUREMENT AND
MATERIEL MANAGEMENT, OASAM, FURNISHED A REPORT ON THE PROTEST OF THE
MEDICAL UNIVERSITY OF SOUTH CAROLINA UNDER REQUEST FOR PROPOSALS HSM
110-0A-57(2), ISSUED BY THE HEALTH SERVICES AND MENTAL HEALTH
ADMINISTRATION.
ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE PROTESTOR DENYING
THE PROTEST.
YOUR ATTENTION IS INVITED TO THE LAST PARAGRAPH OF OUR DECISION
WHEREIN WE POINT OUT THAT, NOTWITHSTANDING THE FACT THAT NOTICE OF THE
PROTEST WAS FURNISHED TO YOUR DEPARTMENT BEFORE AWARDS WERE MADE UNDER
THE REQUEST FOR PROPOSALS, THERE IS NO INDICATION IN THE FILE BEFORE US
THAT APPROVAL BY HIGHER AUTHORITY OF THE DETERMINATION TO MAKE AWARD
NOTWITHSTANDING THE PROTEST WAS OBTAINED AS REQUIRED BY SECTION
1-2.407-8(B)(3) OF THE FEDERAL PROCUREMENT REGULATIONS, NOR WAS OUR
OFFICE NOTIFIED OF THAT DETERMINATION, ALSO REQUIRED BY THE CITED FPR
SECTION. THIS PROCEDURAL IRREGULARITY IS BROUGHT TO YOUR ATTENTION FOR
THE PURPOSE OF PRECLUDING ITS REPETITION IN FUTURE PROCUREMENTS.
B-176327, DEC 29, 1972
BID PROTEST - BRAND NAME OR EQUAL - SUBSEQUENT EQUIPMENT FAILURE
DECISION DENYING THE PROTEST OF ECONOMICS LABORATORY, INC., AGAINST
AWARD OF A CONTRACT TO DUBOIS CHEMICALS UNDER AN IFB ISSUED AT EGLIN
AFB, FLA.
WHEN A PRODUCT OFFERED IN A BID AS AN EQUAL MEETS THE SALIENT
FEATURES LISTED IN THE IFB, EVEN IF IT DIFFERS IN SOME OTHER RESPECTS
FROM THE BRANDS NAMED IN THE SOLICITATION, IT WOULD BE IMPROPER TO
REJECT SUCH A BID AS NONRESPONSIVE. SEE B-157857, JANUARY 26, 1966.
MOREOVER, ANY FAILURE OF THE EQUIPMENT FURNISHED UNDER THE CONTRACT
DOES NOT AFFECT THE VALIDITY OF THE AWARD.
TO ECONOMICS LABORATORY, INC.:
REFERENCE IS MADE TO YOUR TELEFAX OF JUNE 25, 1972, AND SUBSEQUENT
CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO DUBOIS CHEMICALS
UNDER IFB F08651-72-B-0251, ISSUED AT EGLIN AIR FORCE BASE, FLORIDA.
THE IFB SOLICITED BIDS ON A REQUIREMENTS BASIS FOR QUANTITIES OF
DETERGENT AND RINSE AGENTS DURING THE PERIOD OF JULY 1, 1972, THROUGH
JUNE 30, 1973. THE DETERGENTS AND RINSE AGENTS WERE DESCRIBED ON A
"BRAND NAME OR EQUAL" BASIS WITH THE SALIENT CHARACTERISTICS OF THE
MATERIALS IDENTIFIED. THE IFB REQUIRED THE CONTRACTOR TO FURNISH,
INSTALL, AND MAINTAIN AT NO ADDITIONAL EXPENSE TO THE GOVERNMENT
AUTOMATIC DETERGENT DISPENSERS AND RINSE AGENT INJECTORS FOR RELEASING
THE MATERIALS INTO DISHWASHING MACHINES.
YOU HAVE PROTESTED AGAINST THE AWARD MADE TO DUBOIS CHEMICALS ON THE
GROUNDS THAT IT WAS NOT THE LOW BIDDER, THAT THE RINSE AGENT IT OFFERED
IS NOT EQUAL TO ANY OF THE BRANDS NAMED IN THE PURCHASE DESCRIPTION, AND
THAT THE DUBOIS RINSE AGENT INJECTOR IS PRESSURE OPERATED CONTRARY TO
THE IFB SPECIFICATIONS.
YOUR UNIT PRICES ON THE DETERGENT AND RINSE ADDITIVES WERE THE LOWEST
RECEIVED PER POUND AND GALLON RESPECTIVELY. HOWEVER, THE IFB PROVIDED
FOR AWARD ON THE BASIS OF THE AMOUNT OF MATERIAL THE MANUFACTURER
RECOMMENDED FOR USE WITH EACH 10 GALLONS OF WATER. ON THAT BASIS,
DUBOIS WAS THE LOW BIDDER AND YOU WERE THE NEXT LOW BIDDER.
FURTHER, WHEN A PRODUCT OFFERED IN A BID AS AN EQUAL MEETS THE
SALIENT FEATURES LISTED IN THE IFB, IT WOULD NOT BE PROPER TO REJECT THE
BID AS NONRESPONSIVE BECAUSE IT MAY DIFFER IN SOME RESPECTS FROM THE
BRANDS NAMED IN THE PURCHASE DESCRIPTION, SINCE THE ONLY FEATURES THAT
CAN BE CONSIDERED ESSENTIAL ARE THOSE LISTED AS SALIENT CHARACTERISTICS.
SEE B-157857, JANUARY 26, 1966, AND B-154616, SEPTEMBER 17, 1964.
FINALLY, YOU HAVE CONTENDED THAT THE DUBOIS BID WAS NONRESPONSIVE
BECAUSE THE RINSE AGENT INJECTOR DOES NOT COMPLY WITH THE IFB
SPECIFICATIONS. HOWEVER, DUBOIS DID NOT TAKE ANY EXCEPTION TO THE
SPECIFICATIONS IN THE BID. THEREFORE, THE RESULTING CONTRACT BASED UPON
SUCH BID IS VALID. ANY FAILURE OF THE EQUIPMENT FURNISHED UNDER THE
CONTRACT TO COMPLY WITH THE SPECIFICATIONS DOES NOT AFFECT THE VALIDITY
OF THE CONTRACT. SUCH MATTER IS FOR CONSIDERATION AND APPROPRIATE
ACTION BY THE CONTRACTING OFFICER UNDER THE TERMS OF THE CONTRACT.
IN THE CIRCUMSTANCES, THERE IS NO BASIS FOR LEGAL OBJECTION TO THE
AWARD MADE. ACCORDINGLY, THE PROTEST IS DENIED.
B-176629, DEC 29, 1972
GOVERNMENT'S CLAIM - ERRONEOUS INCLUSION OF FUEL EXPENSE COSTS - SET OFF
CONCERNING THE VALIDITY OF THE GOVERNMENT'S CLAIM FOR REIMBURSEMENT
OF AN AMOUNT REPRESENTING AN ALLEGED OVERCHARGE BY THE POTOMAC ELECTRIC
POWER COMPANY (PEPCO) AS A RESULT OF AN APPARENT MISCOMPUTATION OF
ADJUSTMENTS FOR FUEL COSTS DURING THE FISCAL YEARS 1969 AND 1970.
SINCE PEPCO WAS ERRONEOUSLY INCLUDING THE COSTS OF FUELS OTHER THAN
COAL IN DETERMINING ADJUSTMENTS IN ITS FUEL EXPENSE ACCOUNT NO. 501, GAO
CONCURS WITH THE RECOMMENDATION OF THE DEPARTMENT OF JUSTICE THAT THIS
CLAIM SHOULD BE SET OFF AGAINST AMOUNTS OTHERWISE DUE PEPCO FROM THE
GOVERNMENT.
TO MR. ARTHUR F. SAMPSON:
REFERENCE IS MADE TO YOUR LETTER OF JULY 21, 1972, WITH ENCLOSURES,
REQUESTING OUR OPINION AS TO THE VALIDITY OF THE GOVERNMENT'S CLAIM FOR
REIMBURSEMENT OF $645,305, REPRESENTING AN ALLEGED OVERCHARGE BY THE
POTOMAC ELECTRIC POWER COMPANY (PEPCO) AS A RESULT OF AN APPARENT
MISCOMPUTATION OF ADJUSTMENTS FOR FUEL COSTS DURING FISCAL YEARS 1969
AND 1970.
ARTICLE 5 OF CONTRACT NO. GS-00T-1595(TP), DATED JUNE 21, 1965,
BETWEEN THE GENERAL SERVICES ADMINISTRATION (GSA) AND PEPCO PROVIDES
THAT THE CHARGE FOR ELECTRICAL SERVICE "*** SHALL BE AS SET FORTH IN THE
APPLICABLE RATES OF THE CONTRACTOR FROM TIME TO TIME LAWFULLY IN FORCE
AND EFFECT"; AND ARTICLE 6 OF THE CONTRACT PROVIDES THAT "SERVICE
FURNISHED UNDER THIS AGREEMENT SHALL BE SUBJECT TO RATES, REGULATIONS
AND PRACTICES PRESCRIBED BY ANY FEDERAL, STATE OR LOCAL REGULATORY
COMMISSION HAVING JURISDICTION ***." FURTHER, IT IS REPORTED THAT THE
APPLICABLE RATE SCHEDULE APPROVED BY THE PUBLIC SERVICE COMMISSION OF
MARYLAND AND IN EFFECT DURING THE PERIOD IN QUESTION INCLUDES THE
FOLLOWING PROVISION:
"ADJUSTMENT FOR CHANGES IN THE COST OF FUEL - THE ENERGY CHARGE WILL
BE INCREASED OR DECREASED .0010 CENT PER KILOWATT-HOUR FOR EACH
ONE-TENTH CENT INCREASE OR DECREASE ABOVE OR BELOW 29.5 CENTS PER
MILLION BTU IN AVERAGE COST OF FUEL AS BURNED IN THE COMPANY'S POWER
PLANTS AND CHARGED TO ITS FUEL EXPENSE ACCOUNT NO. 501. THIS ADJUSTMENT
WILL BE BASED UPON THE AVERAGE COST OF FUEL DURING THE SECOND MONTH
PRECEDING THE BILLING MONTH."
THE APPARENT OVERCHARGE CAME TO LIGHT DURING A HEARING BEFORE THE
PUBLIC SERVICE COMMISSION OF MARYLAND IN JUNE 1970 IN CONNECTION WITH
PEPCO'S APPLICATION FOR AN INCREASE IN THE RATES FOR ELECTRICAL SERVICE.
IN THIS CONNECTION, SEE THE TESTIMONY BY FRANK S. WALTERS, A PEPCO
OFFICIAL, PAGES 53-55 OF THE TRANSCRIPT, VOLUME I, PHASE II, IN THE
MATTER OF THE APPLICATION OF POTOMAC ELECTRIC POWER COMPANY FOR AN
INCREASE IN ITS RATES RETAIL ELECTRIC SERVICE, TO THE EFFECT THAT THE
PRESENT EFFECTIVE TARIFF LIMITS ADJUSTMENT FOR THE COST OF FUEL TO THE
COSTS CHARGED TO ACCOUNT NO. 501, WHICH IS BASICALLY THE COST OF COAL;
THAT THE REQUESTED CHANGE WOULD NOT SO LIMIT THE RIGHT TO ADJUSTMENT,
BUT WOULD INCLUDE THE COSTS FOR ALL FUELS; AND THAT SINCE 1969 PEPCO
HAD BEEN INCLUDING THE COSTS FOR OTHER FUELS IN DETERMINING ADJUSTMENTS
"EVEN THOUGH THEY DO NOT LITERALLY FALL WITHIN THE TARIFF PROVISION"
LIMITING ADJUSTMENT TO THE COSTS CHARGED TO ACCOUNT NO. 501.
SUBSEQUENT TO THE HEARING, AND SIMILAR HEARINGS BEFORE THE
APPROPRIATE REGULATORY BODIES IN THE DISTRICT OF COLUMBIA AND VIRGINIA,
THE FUEL ADJUSTMENT CLAUSE APPLICABLE TO THE THREE JURISDICTIONS WAS
REVISED TO INCLUDE ADJUSTMENTS FOR CHARGES TO FUEL EXPENSE AMOUNTS
WITHOUT LIMITATION AS TO THE ACCOUNT OR TYPE OF FUEL.
AFTER UNSUCCESSFUL ATTEMPTS TO GAIN PEPCO'S AGREEMENT TO REFUND THE
AMOUNT OF THE CLAIMED OVERCHARGE, THE CONTRACTING OFFICER ISSUED A FINAL
DECISION ON MAY 24, 1971, PURSUANT TO THE DISPUTES CLAUSE OF THE
CONTRACT, CONCLUDING THAT PEPCO HAD OVERCHARGED THE GOVERNMENT IN THE
AMOUNT OF $645,305, AND WAS LEGALLY OBLIGATED TO REFUND THAT AMOUNT.
PEPCO'S DENIAL OF AN OVERCHARGE IS BASED UPON ITS POSITION THAT THE
ADJUSTMENT CLAUSE WAS INTENDED TO COVER ALL FUELS AND THAT THIS INTENT
SHOULD NOT BE FRUSTRATED BY ITS MINOR PROCEDURAL ERROR IN FAILING TO
AMEND THE RATE SCHEDULE ADJUSTMENT CLAUSES ON FILE WITH THE APPROPRIATE
REGULATORY BODIES TO INCLUDE ACCOUNT NO. 547.
PEPCO TIMELY APPEALED THE DECISION TO THE GSA BOARD OF CONTRACT
APPEALS, WHICH ON APRIL 17, 1972, GRANTED PEPCO'S MOTION TO DISMISS ON
THE GROUND THAT THE BOARD LACKED JURISDICTION AS THE GOVERNMENT'S CLAIM
IS ONE FOR "BREACH OF CONTRACT WHICH IS NOT REDRESSABLE UNDER THE TERMS
OF THIS CONTRACT AND THEREFORE DOES NOT COME WITHIN THE PURVIEW OF THE
DISPUTES CLAUSE."
THIS OFFICE DISCUSSED THE MATTER WITH THE DEPARTMENT OF JUSTICE AND
REFERRED THE FILE TO JUSTICE FOR THEIR REVIEW AND RECOMMENDATION. THE
JUSTICE DEPARTMENT REPLIED BY LETTER DATED NOVEMBER 13, 1972, COPY
ENCLOSED, RECOMMENDING THAT THE CLAIM SHOULD BE SET OFF AGAINST AMOUNTS
OTHERWISE DUE PEPCO BY THE GOVERNMENT. WE AGREE WITH THIS
RECOMMENDATION.
B-177288, DEC 29, 1972
BID PROTEST - OFFEROR'S ABILITY TO PERFORM
DECISION DENYING THE PROTEST OF S.W. ELECTRONICS AND MANUFACTURING
CORPORATION AGAINST A PROPOSED AWARD TO RCA CORPORATION UNDER AN RFP
ISSUED BY THE DEPARTMENT OF THE NAVY, AVIATION SUPPLY OFFICE,
PHILADELPHIA, PA., FOR VARIOUS STEP-LADDER QUANTITIES OF RADIO SET
CONTROLS.
THE DRAFTING OF SPECIFICATIONS TO REFLECT THE GOVERNMENT'S NEEDS AND
THE DETERMINATION OF WHETHER AN OFFEROR CAN MEET THESE NEEDS ARE MATTERS
WITHIN THE COGNIZANCE OF THE ADMINISTRATIVE AGENCY AND WILL NOT BE
QUESTIONED BY GAO UNLESS IT IS CLEARLY SHOWN THAT THESE DETERMINATIONS
ARE UNREASONABLE.
40 COMP. GEN. 553 (1970).
TO S. W. ELECTRONICS AND MANUFACTURING CORPORATION:
REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 15, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING AGAINST A PROPOSED AWARD OF CONTRACT TO RCA
CORPORATION (RCA) UNDER REQUEST FOR PROPOSALS (RFP) N00383-73-R-0007,
ISSUED JULY 14, 1972, BY THE DEPARTMENT OF THE NAVY, AVIATION SUPPLY
OFFICE (ASO), PHILADELPHIA, PENNSYLVANIA.
THE SOLICITATION WAS ISSUED TO RCA AND CALLED FOR VARIOUS STEP-LADDER
QUANTITIES OF RADIO SET CONTROLS, C-4850/ASQ-85(V), RCA PART NO.
8328808-503, PLUS RELATED DATA. THE CONTROL RADIO SETS ARE SCHEDULED
FOR INSTALLATION IN THE F-14 AIRCRAFT. PURSUANT TO 10 U.S.C.
2304(A)(10), AUTHORITY TO NEGOTIATE A SOLE SOURCE CONTRACT WITH RCA HAD
BEEN ISSUED JUNE 15, 1972, BASED UPON THE CONTRACTING OFFICER'S
"DETERMINATION AND FINDINGS" THAT THE GOVERNMENT DID NOT HAVE THE
NECESSARY SPECIFICATIONS OR DRAWINGS TO PERMIT COMPETITIVE PROCUREMENT.
IN THIS REGARD, RCA HAD PREVIOUSLY BEEN AWARDED TWO CONTRACTS FOR THE
SUBJECT ITEM AND HAD SUBMITTED FINAL DRAWINGS UNDER ITS FIRST CONTRACT
ON MAY 18, 1972, FOR GOVERNMENT APPROVAL (CONTRACT NO. N00019-71-C-0190,
AWARDED JUNE 1971). THESE DRAWINGS WERE APPROVED BY THE NAVY ON
NOVEMBER 15, 1972.
MEANWHILE, RCA SUBMITTED ITS PROPOSAL FOR THIS PROCUREMENT ON JULY
28, 1972, AND IN ADDITION, YOUR FIRM SUBMITTED AN UNSOLICITED PROPOSAL
ON THAT DATE, WITH A REQUEST THAT THE PROCURING ACTIVITY FURNISH YOUR
FIRM WITH A SET OF RCA DRAWINGS OR A SAMPLE UNIT. BY LETTER DATED
AUGUST 18, 1972, YOUR FIRM WITHDREW ITS REQUEST FOR THE RCA DRAWINGS OR
SAMPLE UNIT. HOWEVER, BY LETTER DATED OCTOBER 10, 1972, ASO REJECTED
YOUR PROPOSAL ON THE BASIS THAT, "WHILE YOU HAVE OFFERED (THE REQUIRED)
DELIVERY BEGINNING IN 180 DAYS, CERTAIN REQUIREMENTS NOT SPECIFIED IN
THE RFP, E.G. FIRST ARTICLE TESTING, WOULD PREVENT YOU FROM MEETING THAT
COMMITMENT AND WOULD IN FACT DELAY DELIVERY LONG BEYOND THAT POINT." A
PROTEST TO THIS OFFICE FOLLOWED.
YOU ALLEGED THAT YOUR FIRM COULD MEET THE REQUIRED DELIVERY DATE AND
THAT IT WAS IMPROPER TO REQUIRE FIRST ARTICLE TESTING OF YOUR PRODUCT
SINCE THE RFP DID NOT INCLUDE THIS REQUIREMENT. FURTHER, YOU CONTENDED
THAT YOUR PROPOSAL WAS ALSO IMPROPERLY REJECTED BECAUSE OF ALLEGED
DELIVERY DIFFICULTIES ON ANOTHER CONTRACT WITH ASO, WHICH YOU STATED
WERE NOT CAUSED BY ACTIONS OF YOUR FIRM.
YOU ALSO NOTED THAT NO NEGOTIATIONS WERE HELD WITH YOUR FIRM.
THE CONTRACTING OFFICER REPORTS THAT SINCE THE PROCUREMENT WAS ISSUED
SOLELY TO RCA AND CALLED FOR AN RCA PART NUMBER, THE RFP DID NOT SPECIFY
FIRST ARTICLE TESTING. WHEN YOUR UNSOLICITED PROPOSAL WAS RECEIVED, THE
CONTRACTING OFFICER STATES THAT HE REQUESTED THE TECHNICAL
REPRESENTATIVE AT ASO TO ADVISE HIM WHETHER THE PROPOSAL COULD BE
EVALUATED AND CONSIDERED FOR AWARD. SINCE YOUR PROPOSAL HAD INITIALLY
REQUESTED A SET OF RCA DRAWINGS OR A SAMPLE UNIT, THE TECHNICAL
REPRESENTATIVE INVESTIGATED THIS POSSIBILITY AND LEARNED THAT THE RCA
DRAWINGS HAD BEEN DELIVERED UNDER CONTRACT NO. -0190 AND WERE BEING
REVIEWED BY THE NAVY ENGINEERING GROUP RESPONSIBLE FOR THE APPROVAL OF
SUCH DRAWINGS. THAT GROUP REPORTED BACK THAT APPROVAL OF THE RCA
DRAWINGS COULD BE EXPECTED SHORTLY. BASED ON THIS INFORMATION, THE
TECHNICAL REPRESENTATIVE ADVISED THE CONTRACTING OFFICER THAT THE
DRAWINGS WERE AVAILABLE AND THAT A COMPETITIVE PROCUREMENT OF THE ITEM
WAS NOW POSSIBLE. HOWEVER, THE CONTRACTING OFFICER WAS ADVISED THAT
SUCH A COMPETITIVE SOLICITATION WOULD HAVE TO INCLUDE A MILITARY
SPECIFICATION (MILITARY SPECIFICATION MIL-C-23768A), GOVERNMENT
FURNISHED RCA DRAWINGS, APPROPRIATE HANDBOOKS AND A MODEL; THAT THE
SOLICITATION WOULD HAVE TO REQUIRE THAT DELIVERED ARTICLES BE
INTERCHANGEABLE WITH THE DISPLAYED MODEL WHICH WOULD BE FURNISHED TO THE
SUCCESSFUL BIDDER; THAT A FIRST ARTICLE SAMPLE UNIT WOULD BE REQUIRED
OF ANY MANUFACTURER OTHER THAN RCA, AND THAT SUCH FIRST ARTICLE
MANUFACTURING AND APPROVAL TIME WOULD REQUIRE AN ESTIMATED 305 DAYS.
THE CONTRACTING OFFICER FURTHER REPORTS THAT TOTAL MANUFACTURING LEAD
TIME FOR THESE ITEMS, I.E., THE LEAD TIME TO THE FIRST DELIVERY OF
PRODUCTION UNITS, IS ESTIMATED AT 450 DAYS INCLUSIVE OF FIRST ARTICLE
TESTING AND APPROVAL TIME, AND THAT THIS ESTIMATE PRESUMES THAT EACH
MILESTONE IN THE TESTING AND MANUFACTURING SCHEDULE IS RIGIDLY MET. HE
STATES THAT SINCE THESE CONTROLS ARE REQUIRED FOR INSTALLATION IN NEW
PRODUCTION F-14 AIRCRAFT COMMENCING IN JULY 1973 AND ENDING IN JUNE
1974, AND THERE ARE NO EQUIPMENTS AVAILABLE IN THE STOCK SYSTEM TO
SATISFY THIS NEED, AND IN VIEW OF THE ESTIMATED MANUFACTURING LEAD TIME
STATED ABOVE, PLUS THE TIME NEEDED TO ISSUE AND AWARD A NEW
SOLICITATION, HE CONCLUDED THAT IT WOULD BE UNREALISTIC TO EXPECT THESE
ITEMS FROM A NEW SOURCE BEFORE JUNE 1974. THEREFORE, THE CONTRACTING
OFFICER DETERMINED THAT A RESOLICITATION OF THIS PROCUREMENT ON A
COMPETITIVE BASIS COULD NOT BE CONSIDERED. ACCORDINGLY YOU WERE ADVISED
BY LETTER OF OCTOBER 10, 1972, THAT YOUR PROPOSAL COULD NOT BE
CONSIDERED. IN ADDITION, A NEW "DETERMINATION AND FINDINGS" WAS
WRITTEN, DATED NOVEMBER 2, 1972, COVERING NEGOTIATION OF 100 OF THESE
ITEMS UNDER THE AUTHORITY OF 10 U.S.C. 2304(A)(2) (PUBLIC EXIGENCY).
FINALLY, THE CONTRACTING OFFICER STATES THAT YOUR PERFORMANCE RECORD
UNDER AN EXISTING ASO CONTRACT WAS NOT CONSIDERED AS A FACTOR IN
CONNECTION WITH NAVY'S DETERMINATIONS UNDER THIS PROCUREMENT. THUS THE
CONTRACTING OFFICER PROPOSES TO AWARD THE INSTANT PROCUREMENT TO RCA AND
TO PREPARE A COMPETITIVE SOLICITATION FOR THE NEXT PROCUREMENT.
WE HAVE CONSISTENTLY HELD THAT THE DRAFTING OF SPECIFICATIONS TO
REFLECT THE NEEDS OF THE GOVERNMENT AND THE DETERMINATION OF WHETHER AN
OFFEROR CAN MEET THESE NEEDS ARE MATTERS WITHIN THE COGNIZANCE OF THE
ADMINISTRATIVE AGENCY, AND WE WILL NOT QUESTION ADMINISTRATIVE
DETERMINATIONS ON THESE MATTERS UNLESS IT IS CLEARLY SHOWN THAT SUCH
DETERMINATIONS ARE UNREASONABLE. 49 COMP. GEN. 553 (1970); B-171634,
MARCH 11, 1971. ALTHOUGH YOU INSIST THAT YOUR FIRM IS TECHNICALLY
CAPABLE OF MANUFACTURING THE REQUIRED ITEMS WITHIN THE REQUIRED TIME AND
WITHOUT THE BENEFIT OF A SAMPLE UNIT FROM THE NAVY, WE FIND NO BASIS TO
QUESTION THE NAVY'S DETERMINATION TO THE CONTRARY. UNDER THE
CIRCUMSTANCES, WE DO NOT FIND THAT THE NAVY IMPROPERLY REJECTED YOUR
PROPOSAL ON THE BASIS THAT YOUR FIRM COULD NOT MEET THE REQUIRED
DELIVERY SCHEDULE. ACCORDINGLY, YOUR PROTEST IS DENIED.
B-177317, DEC 29, 1972
BID PROTEST - CHANGE IN WAGE RATES - DEPARTMENT OF LABOR WAGE
DETERMINATION
DECISION DENYING THE PROTEST OF KMS INDUSTRIES, INC., AGAINST AWARD
TO PROGRAMMING METHODS, INC., (PMI), UNDER AN RFP ISSUED BY THE GODDARD
SPACE FLIGHT CENTER, NASA, FOR NONPERSONAL SERVICES NEEDED FOR OPERATION
OF THE NATIONAL SPACE SCIENCE DATA CENTER.
IT IS NORMALLY NOT PROPER TO ARRIVE AT PRICES UNDER NEW WAGE RATES BY
EXTRAPOLATING FROM THE PRICES SUBMITTED UNDER THE OLD RATES. HOWEVER,
IN THIS CASE, THE GENERAL APPROACH CANNOT BE TAKEN BECAUSE OF THE
ENACTMENT OF THE AMENDMENTS TO THE SERVICE CONTRACT ACT, THE
UNANTICIPATED CHANGE IN DEPARTMENT OF LABOR POLICY, AND THE UNACCEPTABLE
DELAY WHICH WOULD RESULT FROM A RESOLICITATION AND COMPLETE REEVALUATION
OF OFFERS. ACCORDINGLY, GAO DOES NOT BELIEVE NASA ABUSED ITS DISCRETION
IN DECLINING TO SOLICIT REVISED PROPOSALS BECAUSE THE RELATIVE COST
POSITION OF KMS AND PMI REMAINED ESSENTIALLY UNCHANGED BY THE
INCORPORATION OF THE DEPARTMENT OF LABOR OF WAGE DETERMINATION 72-118.
TO ARENT, FOX, KINTNER, PLOTKIN AND KAHN:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 25, 1972, AND
SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF KMS INDUSTRIES, INC.
(KMS), AGAINST AWARD TO PROGRAMMING METHODS, INC. (PMI) UNDER RFP
5-76034/715 (RFP-715) ISSUED BY THE GODDARD SPACE FLIGHT CENTER (GSFC),
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA).
THE ABOVE-REFERENCED SOLICITATION WAS FOR NONPERSONAL SERVICES,
UTILIZING PROFESSIONAL AND NONPROFESSIONAL SKILLS ASSOCIATED WITH DATA
PROCESSING, NEEDED FOR OPERATION OF THE NATIONAL SPACE SCIENCE DATA
CENTER (NSSDC). THE RFP CONTEMPLATED AWARD OF A COST-PLUS-AWARD-FEE
CONTRACT FOR A PERIOD OF TWO YEARS, COMMENCING JANUARY 1, 1973, WITH AN
ADDITIONAL ONE-YEAR EXTENSION AVAILABLE TO THE GOVERNMENT.
PMI AND KMS (THE INCUMBENT CONTRACTOR) WERE AMONG EIGHT FIRMS WHICH
SUBMITTED PROPOSALS ON THE CLOSING DATE OF MAY 1, 1972. THE PROPOSALS
WERE THEN EVALUATED BY A SOURCE EVALUATION BOARD (SEB) UNDER CRITERIA
ESTABLISHED PRIOR TO ISSUANCE OF THE RFP. WRITTEN AND ORAL DISCUSSIONS
WERE CONDUCTED WITH THE SIX OFFERORS, INCLUDING PMI AND KMS, CONSIDERED
TO BE WITHIN A COMPETITIVE RANGE.
PROPOSAL REVISIONS SUBMITTED AS A RESULT OF THESE DISCUSSIONS WERE
ALSO EVALUATED BY THE SEB.
IN ITS REPORT OF AUGUST 17, 1972, THE SEB CONCLUDED THAT PMI WAS THE
BEST QUALIFIED TECHNICALLY AND KMS WAS NEXT BEST. THE SCORES OF PMI AND
KMS, WHILE SUBSTANTIALLY HIGHER THAN THE FOUR OTHER OFFERORS IN THE
COMPETITIVE RANGE, WERE SO CLOSE TO EACH OTHER THAT THE TWO FIRMS WERE
CONSIDERED RELATIVELY EQUAL TECHNICALLY. HOWEVER, KMS'S ESTIMATED COSTS
AND CEILING EXCEEDED THOSE OF PMI BY A SIGNIFICANT AMOUNT FOR THE
ANTICIPATED THREE-YEAR LIFE OF THE CONTRACT.
ON AUGUST 22, 1972, THE SEB'S CONCLUSIONS WERE PRESENTED TO THE GSFC
DIRECTOR WHO, ACTING AS SELECTION OFFICIAL, SELECTED PMI FOR AWARD SINCE
ITS PROPOSAL WAS SUPERIOR IN ALL RESPECTS AND ITS OVERALL ESTIMATED
COSTS WERE THE LOWEST. THE SELECTION WAS ANNOUNCED ON AUGUST 24, 1972,
AND UPON ITS REQUEST, KMS WAS DEBRIEFED AT GSFC THE FOLLOWING DAY.
IT IS ADMINISTRATIVELY REPORTED:
"THE GSFC CONTRACTING OFFICER DID NOT SUBMIT A NOTICE OF INTENT TO
MAKE A SERVICE CONTRACT, STANDARD FORM 98, TO THE DEPARTMENT OF LABOR
PRIOR TO INITIATING THIS PROCUREMENT SINCE HIS RECENT EXPERIENCE IN
FILING NOTICES FOR PROCUREMENTS AT GSFC INVOLVING SIMILAR JOB SKILLS LED
HIM TO CONCLUDE THAT NO DETERMINATION WAS APPLICABLE. IN FACT, A
CATEGORY B RESPONSE, INDICATING THAT 'AS OF THIS DATE, NO WAGE
DETERMINATION APPLICABLE TO THE SPECIFIED LOCALITY AND CLASSES OF
SERVICE EMPLOYEES HAS BEEN MADE,' HAD BEEN RETURNED TWO YEARS EARLIER IN
RESPONSE TO THE PRIOR PROCUREMENT OF THE DISPUTED SERVICES NOW BEING
PERFORMED BY KMS. FURTHER, APPROXIMATELY ONE YEAR BEFORE THE PRESENT
SOLICITATION WAS ISSUED, THE DEPARTMENT OF LABOR HAD, BY LETTER DATED
FEBRUARY 1, 1971 ***,
ADVISED GSFC IN CONNECTION WITH ANOTHER PROCUREMENT THAT PROGRAMMERS
WRITERS, CLERKS, AND SECRETARIES '*** ARE NOT SERVICE EMPLOYEES.'"
THEREFORE, THE SOLICITATION AND SUBMISSION OF PROPOSALS, SUBSEQUENT
NEGOTIATIONS, EVALUATION OF PROPOSALS, AND SELECTION OF THE INTENDED
CONTRACTOR UNDER RFP -715 WERE ALL CONDUCTED IN THE ABSENCE OF A WAGE
DETERMINATION BY THE DEPARTMENT OF LABOR UNDER THE SERVICE CONTRACT ACT
OF 1965, 41 U.S.C. 351-57 (1970). HOWEVER, ON AUGUST 25, 1972, THE
DEPARTMENT OF LABOR ISSUED WAGE DETERMINATION NO. 72-118, PRESCRIBING
MINIMUM HOURLY WAGES AND FRINGE BENEFITS FOR CERTAIN CLASSES OF KEYPUNCH
OPERATORS, SECRETARIES, STENOGRAPHERS, TYPISTS AND COMPUTER OPERATORS IN
A GEOGRAPHIC AREA WHICH INCLUDES GSFC.
ON OCTOBER 25, 1972, YOU PROTESTED TO THIS OFFICE IN LIGHT OF YOUR
UNDERSTANDING THAT THE DEPARTMENT OF LABOR WAS TAKING THE POSITION THAT
THE WAGE DETERMINATION MUST BE MADE APPLICABLE TO THE INSTANT
PROCUREMENT. UNDER THESE CIRCUMSTANCES, THE CONTRACT WILL REQUIRE THE
PAYMENT OF WAGES DIFFERENT FROM THOSE UPON WHICH THE EVALUATION OF
PROPOSALS WAS MADE. THEREFORE, YOU ASSERT, NASA SHOULD BE REQUIRED TO
AMEND RFP -715 TO INCORPORATE THE WAGE DETERMINATION, AND THE CONTRACT
SHOULD BE AWARDED ON THE BASIS OF AN EVALUATION OF REVISED PROPOSALS
RECEIVED THEREUNDER.
BY LETTER OF OCTOBER 27, 1972, THE DEPARTMENT OF LABOR ADVISED NASA
THAT IN THE FORMER'S OPINION THE CONTRACT CONTEMPLATED BY RFP -715:
"*** IS ONE WHICH HAS AS ITS PRINCIPAL PURPOSE THE FURNISHING OF
SERVICES THROUGH THE USE OF SERVICE EMPLOYEES, AND AS SUCH IS SUBJECT TO
THE SERVICE CONTRACT ACT. *** WAGE DETERMINATION NO. 72-118 *** WOULD
HAVE APPLICATION TO THIS CONTRACT, AND SHOULD BE INCORPORATED THEREIN."
THE SOLICITOR OF LABOR REITERATED THAT POSITION IN A LETTER TO OUR
OFFICE DATED NOVEMBER 15, 1972, WHICH CONCLUDED:
"THE REQUEST OF KMS INDUSTRIES, INC., THAT NASA ENTERTAIN REVISED
PROPOSALS ON THE BASIS OF AN AMENDED RFP IS A MATTER WITHIN THE
JURISDICTION OF THE CONTRACTING AGENCY AND IT WOULD BE INAPPROPRIATE FOR
THE DEPARTMENT OF LABOR TO OFFER ANY COMMENT RELATIVE TO THAT REQUEST."
IN VIEW OF THE FOREGOING, AND OF CERTAIN AMENDMENTS TO THE SERVICE
CONTRACT ACT WHICH WERE ENACTED SUBSEQUENT TO ISSUANCE OF THE RFP AND
RECEIPT OF PROPOSALS, NASA DECIDED NOT TO CONTEST THE DEPARTMENT OF
LABOR'S ASSERTION THAT A WAGE DETERMINATION COULD BE MADE MANDATORY FOR
APPLICATION SO LATE IN THE PROCUREMENT PROCESS. ACCORDINGLY, NASA
WAIVED THE PROVISIONS OF SECTION 12.1005-3(II) OF ITS PROCUREMENT
REGULATION AND AGREED TO INCORPORATE WAGE DETERMINATION NO. 72-118 IN
THE CONTRACT AWARDED FOR THE INSTANT PROCUREMENT.
HOWEVER, IT IS NASA'S POSITION THAT A RECOMPETITION IS NOT REQUIRED
SINCE THE ORIGINAL SELECTION RATIONALE (THAT PMI OFFERS THE HIGHEST
TECHNICAL QUALIFICATION AT THE LOWEST ESTIMATED COST) REMAINS VALID
AFTER CONSIDERATION OF THE HIGHER WAGE RATES REQUIRED BY WAGE
DETERMINATION NO. 72-118. THIS POSITION IS BASED UPON THE FACT THAT,
AFTER THE PRESENT PROTEST WAS FILED, KMS AND PMI PROVIDED SEPARATE
PROPOSALS TO PROVIDE SERVICES PENDING RESOLUTION OF THE PROTEST.
ADJUSTMENTS WERE MADE IN EACH OF THESE PROPOSALS FOR THE WAGES REQUIRED
TO BE PAID UNDER WAGE DETERMINATION NO. 72-118, BOTH AS TO CLASSIFIED
EMPLOYEES AND OTHER EMPLOYEES WHOSE WAGES HAD TO BE CONFORMED TO THOSE
OF THE CLASSIFIED EMPLOYEES. FROM THE REVISED WAGE SCHEDULES PROPOSED
BY KMS AND PMI, NASA PREPARED COST ESTIMATES SHOWING THE ADJUSTMENTS
NECESSARY TO INCORPORATE THE WAGE DETERMINATION INTO EACH FIRM'S
PROPOSAL.
NASA'S ESTIMATE RELATING TO KMS'S PROPOSAL WAS FURNISHED YOU, AND BY
LETTER OF DECEMBER 19, 1972, YOU CONTENDED THAT THE ESTIMATE WAS IN
ERROR. IN SUPPORT OF THIS CONTENTION, YOU ATTACHED SCHEDULES SHOWING
THE IMPACT OF THE WAGE DETERMINATION UPON BOTH CLASSIFIED EMPLOYEES AND
NON-PROFESSIONAL SERVICE EMPLOYEES WHOSE WAGES WERE CONFORMED TO THOSE
OF THE CLASSIFIED EMPLOYEES. UPON EXAMINATION OF YOUR LETTER OF
DECEMBER 19, 1972, AND ITS ATTACHMENTS, NASA AGREED ITS INITIAL ESTIMATE
WAS IN ERROR AND ACCEPTED YOUR CALCULATIONS. NASA THEN RECALCULATED THE
EFFECT OF THE WAGE DETERMINATION UPON PMI'S PROPOSAL IN PRECISELY THE
SAME MANNER AS SHOWN IN ATTACHMENT A TO YOUR LETTER OF DECEMBER 19,
1972.
NASA'S REVISED COST ESTIMATES SHOW THAT FOR THE THREE-YEAR PERIOD OF
THE CONTRACT, KMS'S TOTAL ESTIMATED COSTS EXCEED THOSE OF PMI BY MORE
THAN $650,000. OVERHEAD AND GENERAL AND ADMINISTRATIVE EXPENSE (G&A)
RATES IN EXISTENCE BEFORE THE ADJUSTMENTS FOR THE WAGE DETERMINATION
WERE USED IN CALCULATING THE COST ESTIMATES. IN THIS CONNECTION, YOU
HAVE STATED (EXCLUSIVE OF PROPRIETARY INFORMATION):
"UNDER KMS'S ACCOUNTING SYSTEM, THE INCREASE IN WAGES REQUIRED BY THE
SERVICE CONTRACT ACT APPLICABILITY HAS THE EFFECT OF INCREASING THE BASE
AGAINST WHICH OVERHEAD COSTS MUST BE SPREAD. THIS AUTOMATICALLY
DECREASES THE OVERHEAD RATE. WE HAVE ENDEAVORED TO CALCULATE THIS
DECREASE BUT WE HAVE FOUND IT IMPOSSIBLE TO DO SO BECAUSE THE RATES IN
QUESTION, BOTH OVERHEAD AND G&A, HAVE CHANGED SINCE THE PROPOSAL WAS
SUBMITTED FOR A VARIETY OF REASONS WHICH HAVE NOTHING TO DO WITH THE
APPLICABILITY OF THE SERVICE CONTRACT ACT. GIVING OUR CURRENT OVERHEAD
AND G&A RATES APPLICABLE TO THIS WORK WOULD BE MISLEADING BECAUSE WE
CANNOT ATTRIBUTE THE FULL DROP TO THE SERVICE CONTRACT ACT.
IT SUFFICES TO SAY THAT IF WE SUBMITTED OUR REVISED PROPOSAL TODAY,
THE OVERHEAD RATE WOULD BE ***
LOWER THAN THE OVERHEAD RATE SET FORTH IN THE PROPOSAL AND THE G&A
RATE WOULD BE *** OF THAT SET FORTH IN THE PROPOSAL."
HOWEVER, EVEN WHEN THE REDUCED OVERHEAD AND G&A RATES YOU SUGGEST ARE
APPLIED, KMS'S ESTIMATED COSTS STILL EXCEED THOSE OF PMI.
FROM OUR REVIEW OF THE RECORD, WE MUST AGREE WITH NASA'S CONCLUSION
THAT "THE RELATIVE COST POSITION OF THE TWO FIRMS REMAINS ESSENTIALLY
UNCHANGED BY THE INCORPORATION OF WAGE DETERMINATION 72-118," AND THAT
THE RATIONALE FOR THE INITIAL SELECTION OF PMI THEREFORE REMAINS VALID.
ACCORDINGLY, WE DO NOT BELIEVE NASA HAS ABUSED THE DISCRETION COMMITTED
TO IT IN DECLINING TO SOLICIT REVISED PROPOSALS, AND YOUR PROTEST MUST
BE DENIED.
IN REACHING THIS DECISION WE ARE ACUTELY AWARE THAT COMPETITION IN
THE SELECTION OF A CONTRACTOR SHOULD BE BASED ON THE CIRCUMSTANCES
EXPECTED TO APPLY IN ACTUAL PERFORMANCE. WE DO NOT GENERALLY FAVOR
DECIDING THE COMPETITION ON ANY OTHER BASIS. IT HAS BEEN OUR POSITION
THAT THE ORDER OF BIDDERS SHOULD BE BASED ON PRICES COMPUTED USING THE
WAGE RATES WHICH WILL ACTUALLY PREVAIL. IT IS NORMALLY NOT PROPER TO
ARRIVE AT PRICES UNDER NEW WAGE RATES BY EXTRAPOLATING FROM THE PRICES
SUBMITTED UNDER THE OLD RATES. HOWEVER, IN THIS CASE, THE GENERAL
APPROACH CANNOT BE TAKEN BECAUSE OF THE ENACTMENT OF THE AMENDMENTS TO
THE SERVICE CONTRACT ACT, THE UNANTICIPATED CHANGE IN DEPARTMENT OF
LABOR POLICY, AND THE UNACCEPTABLE DELAY WHICH WOULD RESULT FROM A
RESOLICITATION AND COMPLETE REEVALUATION OF OFFERS.
B-177377, DEC 29, 1972
MILITARY PERSONNEL - OVERPAYMENTS - WAIVER
DECISION REGARDING THE INDEBTEDNESS OF NELSON R. PRATT, USMC,
RETIRED, RESULTING FROM OVERPAYMENTS MADE TO HIM WHILE ON ACTIVE DUTY
WITH THE MARINE CORPS.
UNDER THE PROVISIONS OF THE ACT OF OCTOBER 2, 1972, PUB. L. 92-453,
GAO HAS WAIVED THE CLAIM SINCE THE OVERPAYMENTS OCCURRED WITHOUT FAULT
ON THE PART OF SERGEANT PRATT.
TO MR. SECRETARY:
WE REFER TO THE INDEBTEDNESS OF MASTER GUNNERY SERGEANT NELSON R.
PRATT, 007148699, UNITED STATES MARINE CORPS (RETIRED), IN THE AMOUNT OF
$443.23, REPRESENTING OVERPAYMENTS PAID TO HIM WHILE ON ACTIVE DUTY IN
THE UNITED STATES MARINE CORPS AS A RESULT OF ERROR BY GOVERNMENT
PERSONNEL RESULTING FROM AN OVERPAYMENT FOR UNUSED LEAVE AT THE TIME OF
HIS RELEASE FROM ACTIVE DUTY AND ADMINISTRATIVE FAILURE TO CHARGE HIM
PAY AND ALLOWANCES FOR TWO PERIODS OF EXCESS LEAVE DURING HIS LAST
PERIOD OF ENLISTMENT. THIS MATTER IS THE SUBJECT OF PRIVATE RELIEF
LEGISLATION, H. R. 17229, 92D CONG. 2D SESSION.
THE OVERPAYMENT WAS INITIALLY DISCOVERED BY MARINE CORPS PERSONNEL AT
THE MARINE CORPS FINANCE CENTER AND CAME TO OUR ATTENTION WHEN WE WERE
REQUESTED TO REPORT ON H. R. 17229 TO THE CHAIRMAN, COMMITTEE ON THE
JUDICIARY, HOUSE OF REPRESENTATIVES. IN THIS CONNECTION, WE HAVE NOTED
THAT THE TOTAL INDEBTEDNESS OF SERGEANT PRATT ACTUALLY IS IN THE GROSS
AMOUNT OF $551.81. THE AMOUNT OF $443.23, STATED IN H. R. 17229, IS THE
NET AMOUNT OF THE INDEBTEDNESS AFTER THE MARINE CORPS HAD DEDUCTED
CHARGES TO COVER FICA ($17.28) AND WITHHOLDING TAX ($91.30).
UNDER THE AUTHORITY CONFERRED BY THE ACT OF OCTOBER 2, 1972, PUBLIC
LAW 92-453, AND IN VIEW OF THE FACTS AND CIRCUMSTANCES INVOLVED IN THE
CASE, INDICATING NO FAULT ON THE PART OF SERGEANT PRATT, WE HEREBY WAIVE
THE CLAIM OF THE UNITED STATES AGAINST HIM IN THE AMOUNT OF $551.81.
THE RECORD INDICATES THAT A REDUCTION OF INDEBTEDNESS AT THE RATE OF
$50 PER MONTH BY DEDUCTION FROM SERGEANT PRATT'S RETIRED PAY WAS
COMMENCED WITH THE MONTH OF OCTOBER 1972. IN THIS RESPECT, THE MARINE
CORPS SHOULD INFORM SERGEANT PRATT OF OUR ACTION, AND HE SHOULD BE
ADVISED THAT UNDER PUBLIC LAW 92-453 HE HAS 2 YEARS FROM THE DATE OF THE
WAIVER IN WHICH TO FILE CLAIM FOR REFUND OF ANY AMOUNT COLLECTED FROM
HIM BECAUSE OF THE OVERPAYMENT.
B-176071, DEC 27, 1972
BID PROTEST - FAILURE TO FURNISH IFB - FIRST ARTICLE TESTING - WAIVER
DECISION DENYING THE PROTEST OF HOPKINS ENGINEERING COMPANY AGAINST
THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY THE
U.S. ARMY ELECTRONICS COMMAND, PHILADELPHIA, PA.
IN THE ABSENCE OF CONSCIOUS AND DELIBERATE INTENTION TO EXCLUDE A
BIDDER FROM COMPETITION, THE FAILURE TO FURNISH A COPY OF AN IFB TO A
PARTICULAR CONTRACTOR DOES NOT CONSTITUTE SUFFICIENT BASIS TO CANCEL THE
IFB OR QUESTION AN OTHERWISE PROPER AWARD. B-171213, DECEMBER 31, 1970.
THE DETERMINATION OF WHETHER TO GRANT A WAIVER OF FIRST ARTICLE
TESTING RESTS SOLELY WITHIN THE DISCRETION OF THE PROCURING AGENCY, AND
GAO WILL NOT QUESTION SUCH DETERMINATION UNLESS IT IS SHOWN TO BE
ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.
B-168557, JANUARY 23, 1970. MOREOVER, THE FAILURE OF THE BID TO STATE A
PRICE OR INDICATE THERE WOULD BE NO CHARGE FOR FIRST ARTICLE TESTING IS
A MATERIAL DEVIATION WHICH MAY NOT BE WAIVED. 50 COMP. GEN. 852 (1971).
THE STATEMENT IN A BID THAT ALL CONDITIONS OF THE SOLICITATION WOULD BE
COMPLIED WITH IS NOT SUFFICIENT TO BIND A BIDDER TO FURNISH BOTH A FIRST
ARTICLE TEST REPORT AND THE OFFERED ITEMS FOR THE PRICE BID ON THE
LATTER WHERE THE FURNISHING OF A REPORT IS NOT A CONDITION, BUT RATHER A
SPECIFIC REQUIREMENT OF THE IFB.
TO HOPKINS ENGINEERING COMPANY:
THIS IS IN REPLY TO YOUR LETTERS OF MAY 16 AND NOVEMBER 30, 1972, AND
YOUR COUNSEL'S LETTERS OF NOVEMBER 2 AND 3, 1972, PROTESTING AGAINST THE
AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION FOR BIDS NO.
DAAB05-72-B-0432, ISSUED BY THE U. S. ARMY ELECTRONICS COMMAND,
PHILADELPHIA, PENNSYLVANIA.
THE SOLICITATION SOUGHT BIDS ON TWO ITEMS. ITEM 0001 COVERED A
REQUIREMENT FOR VARIOUS RANGES OF QUANTITIES OF RADAR INTERFERENCE
FILTERS. A CONTRACTOR-FURNISHED FIRST ARTICLE TEST REPORT FOR THE
FILTERS WAS THE SECOND ITEM REQUIRED. BIDDERS WERE REQUIRED TO STATE
EITHER A PRICE FOR ITEM 0002 OR THAT THERE WOULD BE NO CHARGE. SINCE
YOUR BID, WHICH WAS SUBMITTED IN THE FORM OF A LETTER INSTEAD OF ON THE
BID FORM, FAILED TO DO EITHER, AND SINCE THE ARMY HAS DETERMINED THAT
THE TEST REPORT CANNOT BE WAIVED IN YOUR CASE, IT PROPOSES TO REJECT
YOUR BID AS NONRESPONSIVE.
THE RECORD SHOWS THAT INVITATIONS WERE MAILED TO 43 POTENTIAL
BIDDERS, INCLUDING YOUR FIRM, ON APRIL 21, 1972, AND THAT FIVE BIDS WERE
RECEIVED AND OPENED ON MAY 11, 1972, AT 4:00 P.M. IT WAS ANNOUNCED AT
BID OPENING THAT THE ARMY WOULD PROCURE A NUMBER OF FILTERS COVERED
UNDER RANGE "C", THAT IS, FROM 573 TO 766 OF THE ITEMS. IN THIS RANGE
YOUR BID FOR ITEM 0001 WAS LOW.
YOU STATE THAT YOU RECEIVED YOUR COPY OF THE INVITATION LATE,
APPARENTLY BECAUSE IT WAS SENT TO AN INCORRECT STREET ADDRESS, THAT IS,
TO NO. 2900 RATHER THAN TO 12900 FOOTHILL BOULEVARD. SINCE YOU DID NOT
BELIEVE THERE WAS SUFFICIENT TIME TO SUBMIT YOUR BID BY MAIL, YOU CALLED
AND DISCUSSED THIS PROBLEM WITH THE GOVERNMENT REPRESENTATIVE LISTED ON
THE INVITATION. YOUR LETTER OF MAY 16 STATES THAT YOU "WERE ADVISED
THAT A LETTER WOULD HAVE TO BE HAND-CARRIED TO THE BID ROOM STATING OUR
PRICE AND CONFORMANCE TO THE FORMAT OF THE SOLICITATION OFFER." YOUR
CONTRACT REPRESENTATIVE IN THE PHILADELPHIA AREA THEREAFTER SUBMITTED A
TIMELY LETTER BID ON YOUR BEHALF, QUOTING PRICES ONLY FOR RANGES OF ITEM
0001 AND FURTHER STATING THAT YOU INTENDED TO COMPLY WITH ALL THE
CONDITIONS IN THE SOLICITATION.
IT IS YOUR POSITION THAT YOUR BID PRICE FOR ITEM 0001 INCLUDED THE
COST OF THE FIRST ARTICLE TEST REPORT AND, SINCE YOU RELIED UPON AND
COMPLIED WITH THE ORAL ADVICE OF THE GOVERNMENT'S REPRESENTATIVE, THE
AWARD SHOULD, IN FAIRNESS, BE MADE TO YOUR FIRM. IN THE ALTERNATIVE YOU
ARGUE THAT YOU HAVE MANUFACTURED ALL RANGES OF THE PRODUCTS REQUESTED IN
THIS SOLICITATION AND THAT THE REQUIREMENT FOR THE FIRST ARTICLE TEST
REPORT SHOULD BE WAIVED, PURSUANT TO THE WAIVER PROVISIONS OF THE
SOLICITATION.
IN CONNECTION WITH YOUR OBJECTION TO THE LATE RECEIPT OF THE
INVITATION, WHICH YOU IMPLY JUSTIFIES QUESTIONING THE AWARD TO BE MADE
IN THIS CASE, IT IS SIGNIFICANT THAT THERE IS NO INDICATION IN THE
RECORD, NOR DO YOU CONTEND, THAT THERE HAS BEEN ANY CONSCIOUS OR
DELIBERATE INTENTION TO EXCLUDE YOU FROM THE COMPETITION. IN THE
ABSENCE OF SUCH INTENT OR PURPOSE, AN INADVERTENT FAILURE TO TIMELY
FURNISH A COPY OF AN INVITATION TO A PARTICULAR CONTRACTOR DOES NOT
CONSTITUTE A SUFFICIENT BASIS TO CANCEL THE INVITATION OR TO QUESTION AN
OTHERWISE PROPER AWARD. SEE B-171213, DECEMBER 31, 1970, AND 34 COMP.
GEN. 684 (1955).
WITH REGARD TO THE WAIVER OF FIRST ARTICLE TESTING THE SOLICITATION
PROVIDES, IN PART, AS FOLLOWS:
"B.15 WAIVER OF FIRST ARTICLE TESTING (1970 DEC)
A. THE GOVERNMENT RESERVES THE RIGHT, WITH RESPECT TO
BIDDERS/OFFERORS WHO OFFER PRODUCTS PREVIOUSLY ACCEPTED OR TESTED BY THE
GOVERNMENT, TO WAIVE THE REQUIREMENT FOR FIRST ARTICLE TESTS.
BIDDERS/OFFERORS WHO OFFER SUCH PRODUCTS AND WISH TO RELY ON SUCH
PREVIOUS ACCEPTANCE OR TEST MUST FURNISH, WITH THEIR BIDS/OFFERS,
EVIDENCE THAT PRIOR GOVERNMENT ACCEPTANCE OR APPROVAL IS APPLICABLE TO
THE PRODUCT(S) PROPOSED TO BE FURNISHED HEREUNDER.
"WHERE FIRST ARTICLE IS SET FORTH AS A SEPARATE ITEM, AND IS
SEPARATELY PRICED, AND IF THE GOVERNMENT ELECTS TO EXERCISE ITS RIGHT TO
WAIVE FIRST ARTICLE TESTING, THE APPLICABLE FIRST ARTICLE ITEM IN
SECTION E WILL BE DELETED FROM THE RESULTING CONTRACT AND BIDS/OFFERS
WILL BE EVALUATED ON THE BASIS OF THE FIRST ARTICLE ITEM BEING DELETED.
***"
THE RECORD SHOWS THAT YOU ARE NOT A PRIOR PRODUCER OF THE EXACT
EQUIPMENT CALLED FOR UNDER THIS SOLICITATION AND THAT ON OCTOBER 17,
1972, THE ARMY DECIDED IT WOULD NOT WAIVE THE REQUIREMENT FOR FIRST
ARTICLE TESTING FOR YOUR FIRM. WHILE YOU APPARENTLY SUBMITTED A TEST
REPORT DATED AUGUST 1965 ON EQUIPMENT WHICH YOU CLAIM IS SUFFICIENTLY
SIMILAR TO PERMIT THE ARMY TO WAIVE THE TEST REQUIREMENT IN THIS CASE,
THE ARMY'S TECHNICAL EVALUATORS DO NOT AGREE THAT THE ITEMS ARE
SUFFICIENTLY SIMILAR TO JUSTIFY SUCH WAIVER. SUBSEQUENTLY, YOU
SUBMITTED A SAMPLE FILTER TO THE ARMY'S TESTING FACILITY, BUT YOUR
REQUEST FOR WAIVER WAS AGAIN DENIED SINCE THE FILTER SUBMITTED WAS NOT
THE FILTER EVALUATED IN THE 1965 TEST REPORT. RATHER, THE FILTER
SUBMITTED APPEARED TO HAVE BEEN MANUFACTURED IN ACCORDANCE WITH THE
SPECIFICATIONS OF THE INSTANT SOLICITATION, BUT NO EVIDENCE WAS
SUBMITTED TO INDICATE THAT A FIRST ARTICLE TEST REPORT HAD EVER BEEN
SUBMITTED ON THIS FILTER.
GENERALLY, THE DETERMINATION WHETHER TO GRANT A WAIVER OF FIRST
ARTICLE TESTING RESTS SOLELY WITHIN THE DISCRETION OF THE PROCURING
AGENCY, AND THIS OFFICE WILL NOT QUESTION SUCH DETERMINATION UNLESS IT
IS SHOWN TO BE ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE. B-168557, JANUARY 23, 1970. THE RECORD SHOWS THAT THE ARMY
CONSIDERED YOUR LETTER DATED JULY 26, 1972, WHICH TRANSMITTED THE 1965
TEST REPORT AND INCLUDED A SUMMARY OF DIFFERENCES AND SIMILARITIES
BETWEEN THE FILTER SOLICITED IN THIS CASE AND THE FILTER EVALUATED IN
THE 1965 REPORT. THE ARMY CONCLUDED THAT THE TWO FILTERS WERE NOT
SUFFICIENTLY SIMILAR TO PERMIT WAIVER OF FIRST ARTICLE TESTING. FROM
OUR REVIEW OF YOUR JULY 26 LETTER, WE CANNOT SAY THAT THE ARMY'S
DETERMINATION IS UNREASONABLE, PARTICULARLY IN VIEW OF THE INCREASED
LIFE REQUIREMENT FROM 250 HOURS TO 750 HOURS.
AS TO YOUR SUBMISSION OF A SAMPLE FILTER, WHICH YOU SAY WILL MEET THE
SPECIFICATIONS IN THIS CASE, IT APPEARS THAT TESTING WOULD FIRST HAVE TO
BE PERFORMED ON THE FILTER BEFORE YOUR CONTENTION COULD BE VERIFIED,
SINCE YOU PRESENTED NO EVIDENCE THAT SUCH TESTS HAD ALREADY BEEN
CONDUCTED ON THE ITEM.
TO REQUIRE THE ARMY TO NOW CONDUCT THE TESTING NECESSARY TO PERMIT
WAIVER WOULD SUBJECT THE ARMY TO TESTING EXPENSES WHICH IN FAIRNESS
SHOULD BE CONSIDERED IN EVALUATION OF BIDS. WE ALSO BELIEVE SUCH ACTION
WOULD BE INIMICAL TO THE INTEGRITY OF THE BIDDING SYSTEM, IN THAT IT
WOULD PERMIT YOU AN OPTION AFTER ALL BIDS HAVE BEEN EXPOSED TO EITHER
SUBMIT, OR DECLINE TO SUBMIT, A FILTER FOR FIRST ARTICLE TESTING. FOR
THE FOREGOING REASONS, WE MUST CONCLUDE THAT NEITHER THE INFORMATION
FURNISHED WITH YOUR BID NOR THE SAMPLE FILTER YOU SUBMITTED AFTER BID
OPENING PRESENTS A PROPER BASIS FOR WAVING THE FIRST ARTICLE TESTS
CONTEMPLATED BY THE PROVISIONS OF THE SOLICITATION.
THE QUESTION THEN ARISES AS TO WHETHER YOUR FAILURE TO STATE A PRICE
OR INDICATE THERE WOULD BE NO CHARGE FOR FIRST ARTICLE TESTING REQUIRES
THE REJECTION OF YOUR BID AS NONRESPONSIVE. IN THIS CONNECTION, THE
INVITATION PROVIDES AS FOLLOWS:
PROVISION C.24, EVALUATION OF BIDS/OFFERS (1969 MAR), PAGE 10:
"A BIDDER/OFFEROR MUST QUOTE ON ALL ITEMS IN THIS SOLICITATION TO BE
ELIGIBLE FOR AWARD. ALL ITEMS WILL BE AWARDED ONLY AS A UNIT.
EVALUATION OF BIDS/OFFERS WILL BE BASED, AMONG OTHER FACTORS, UPON THE
TOTAL PRICE QUOTED FOR ALL ITEMS."
NOTE ON IFB, PAGE 17, AT END OF SCHEDULE E:
"ENTER PRICES WHERE SPACE IS PROVIDED ABOVE IN THE UNIT PRICE AMOUNT
COLUMN FOR ALL ITEMS. IF AN ITEM IS OFFERED AT NO CHARGE, ENTER N/C.
DO NOT LEAVE BLANK. FAILURE TO FOLLOW THIS INSTRUCTION WILL RENDER THE
OFFER NONRESPONSIVE."
IN ADDITION, UNDER THE TERMS OF THE SOLICITATION A BIDDER IS
OBLIGATED TO FURNISH ONLY THOSE ITEMS FOR WHICH A PRICE (OR NO CHARGE)
IS INDICATED IN HIS BID. SEE THE "OFFER" PORTION OF STANDARD FORM 33,
SOLICITATION, OFFER AND AWARD.
IN HIS REPORT TO THIS OFFICE THE CONTRACTING OFFICER AGREES THAT THE
REPRESENTATION IN YOUR MAY 16 LETTER OF THE ORAL ADVICE GIVEN TO YOU BY
THE GOVERNMENT REPRESENTATIVE IS ESSENTIALLY CORRECT, THAT IS, THAT A
LETTER BID SIGNED BY AN AUTHORIZED PERSON AND STATING YOUR CONFORMANCE
TO THE TERMS AND CONDITIONS OF THE SOLICITATION WOULD BE ACCEPTABLE.
WHILE WE NEED NOT HERE DECIDE THE VALIDITY OF THIS ADVICE, WE FIND NO
REASON WHY SUCH ADVICE SHOULD HAVE RESULTED IN YOUR FAILURE TO STATE A
PRICE ON A LINE ITEM OF THE SOLICITATION. NOTHING WHICH WAS SAID
APPEARS TO HAVE MISLED YOU INTO BELIEVING THAT A BID ON LINE ITEM 0001
WAS UNNECESSARY, AND WE SEE NO BASIS FOR REACHING A DIFFERENT CONCLUSION
AS TO THE SECOND ITEM LISTED IN THE SOLICITATION. WE HAVE NOTED THAT
YOUR ATTORNEY'S LETTER OF NOVEMBER 3, 1972, STATES THAT THE CONTRACTING
OFFICER DICTATED THE LANGUAGE OF YOUR LETTER BID AND "INDICATED THAT THE
LANGUAGE WOULD BE SUFFICIENT TO COVER ALL CONTRACT TERMS UPON WHICH UNIT
PRICES WERE NOT REQUIRED, INCLUDING TESTING FOR WHICH HOPKINS WAS
IMPOSING NO CHARGE." WHILE IT IS NOT CLEAR FROM THIS STATEMENT WHETHER
IT IS NOT ALLEGED THAT THE CONTRACTING OFFICER REPRESENTED THAT YOU DID
NOT NEED TO EITHER BID A PRICE ON ITEM 0002 OR INDICATE THAT THERE WOULD
BE NO CHARGE, WE THINK IT IS SIGNIFICANT THAT YOU MADE NO SUCH
ALLEGATION IN YOUR ORIGINAL PROTEST. IN ANY EVENT SUCH ORAL
EXPLANATIONS OR INSTRUCTIONS ARE NOT BINDING ON THE CONTRACTING AGENCY.
SEE STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS,
PARAGRAPH 3. SEE ALSO B-167202, MARCH 18, 1968.
ALTHOUGH YOUR LETTER BID STATES THAT YOU WOULD COMPLY WITH ALL
CONDITIONS IN THE SOLICITATION, WE DO NOT BELIEVE SUCH A STATEMENT WOULD
OBLIGATE YOU TO FURNISH BOTH THE FIRST ARTICLE TEST REPORT AND THE
FILTERS FOR THE PRICE BID ON THE FILTER. THE FURNISHING OF THE REPORT
WAS NOT A CONDITION OF THE SOLICITATION, BUT RATHER IT WAS A SPECIFIC
REQUIREMENT SPELLED OUT AS A LINE ITEM IN THE SCHEDULE OF THE
SOLICITATION.
GENERALLY, WE HAVE HELD THAT A FAILURE TO QUOTE A PRICE, WHERE SUCH
PRICE IS NECESSARY FOR BID EVALUATION PURPOSES, CONSTITUTES A MATERIAL
DEVIATION WHICH MAY NOT BE WAIVED UNDER THE AUTHORITY OF PARAGRAPH 2-405
OF THE ARMED SERVICES PROCUREMENT REGULATION. 50 COMP. GEN. 852 (1971);
46 ID. 434 (1964); AND 41 ID. 412 (1961). ALSO SEE 51 ID. ___,
B-174298, MARCH 2, 1972, WHERE WE STATE THAT THE INTEGRITY OF THE
COMPETITIVE BID SYSTEM REQUIRES ADHERENCE TO THIS RULE SINCE BIDDERS
SHOULD NOT BE GIVEN AN OPTION AFTER BID OPENING TO ESTABLISH AN
OBLIGATION BY MEANS WHICH ARE EXTRANEOUS TO THE BID, EVEN IF THE RULE
APPEARS TO REQUIRE A HARSH RESULT IN A GIVEN CASE.
SINCE THE FIRST ARTICLE TEST COULD NOT BE WAIVED FOR YOUR FIRM, YOUR
FAILURE TO QUOTE A PRICE THEREON, OR IN ANY WAY INDICATE THAT THE COST
WAS INCLUDED IN THE ITEM 0001 PRICE, RAISES A SUBSTANTIAL QUESTION AS TO
WHETHER YOU COULD BE REQUIRED TO PERFORM THE TEST AT NO ADDITIONAL
CHARGE AND NECESSITATES THE REJECTION OF YOUR BID.
ACCORDINGLY, YOUR PROTEST MUST BE DENIED.
B-176422, DEC 27, 1972
BID PROTEST - DATA CONTRACT LINE ITEM WAIVER - BID EVALUATION - PRIOR
PRODUCER
DECISION DENYING THE PROTEST OF ENVIRONMENTAL TECTONICS CORPORATION
AGAINST AWARD OF A CONTRACT TO MET-PRO WATER TREATMENT CORPORATION UNDER
AN IFB ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC),
COLUMBUS, OHIO, FOR 45 WATER PURIFICATION SETS AND 15 DATA SEQUENCES.
THERE IS NO INCONSISTENCY IN THE REFUSAL TO WAIVE FIRST-ARTICLE
TESTING AND THE DETERMINATION THAT ITEMS PREVIOUSLY FURNISHED WERE
IDENTICAL IN ALL MATERIAL RESPECTS TO THE ITEMS COVERED IN THIS IFB SO
AS TO MAKE THE EXISTING DATA PACKAGE ADEQUATE, AND THUS JUSTIFY WAIVER
OF VARIOUS DATA CONTRACT LINE ITEMS (CLINS).
ALSO, IN THIS CASE, SINCE THE PERFORMANCE OF THE PRIOR CONTRACTOR
REQUIRED UPDATING ITS DATA PACKAGE, ITS REQUEST FOR WAIVER OF THESE DATA
CLINS WHEN SUBMITTING ITS BID ON THIS IFB WOULD BIND IT TO CONFORM WITH
THE PREVIOUSLY SUBMITTED DATA. MOREOVER, THE RIGHT RESERVED BY DCSC
CONTRACT PROVISION DO5 NOT TO AWARD THE DATA CLINS NECESSARILY IMPLIES
THAT THE BID PRICES OF ANY DATA CLINS DELETED WILL NOT BE CONSIDERED IN
THE EVALUATION OF BIDS, AND NO UNDUE ADVANTAGE IS SECURED BY A PRIOR
PRODUCER BY SUCH DELETION.
TO LT. GEN WALLACE H. ROBINSON JR.:
BY LETTERS DATED JULY 31 AND AUGUST 29, 1972, WITH ENCLOSURES, THE
ASSISTANT COUNSEL FURNISHED OUR OFFICE A REPORT ON THE PROTEST OF
ENVIRONMENTAL TECTONICS CORPORATION (ETC) AGAINST THE AWARD OF A
CONTRACT TO MET-PRO WATER TREATMENT CORPORATION UNDER INVITATION FOR
BIDS DSA700-72-B-2327, ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER
(DCSC), COLUMBUS, OHIO.
THE INVITATION REQUESTED BIDS ON AN ALL OR NONE BASIS FOR FURNISHING
45 WATER PURIFICATION SETS TOGETHER WITH 15 DATA SEQUENCES; IN
ADDITION, AN EQUAL QUANTITY WAS SET ASIDE FOR NEGOTIATIONS WITH LABOR
SURPLUS AREA CONCERNS. OF THE SIX FIRMS RESPONDING BY JUNE 16, 1972,
THE BID OPENING DATE, ETC AND MET-PRO SUBMITTED THE LOWEST BIDS. TAKING
INTO CONSIDERATION THE BID PRICES FOR ALL CONTRACT LINE ITEMS (CLINS),
TRANSPORTATION COSTS AND PROMPT PAYMENT DISCOUNTS, THE CONTRACTING
OFFICER REPORTS EVALUATED PRICES OF $901,964.88 FOR ETC AND $908,747.42
FOR MET-PRO.
ATTACHED TO MET-PRO'S BID WAS A COVER LETTER DATED JUNE 14, 1972,
STATING THAT IT HAD PREVIOUSLY SUPPLIED IDENTICAL ITEMS UNDER PRIOR
CONTRACTS AND REQUESTING WAIVER OF FIRST ARTICLE TESTING, THE
REQUIREMENT FOR A MAINTENANCE CAPABILITY MODEL, AND VARIOUS DATA CLINS.
THE CONTRACTING OFFICER REFERRED THE REQUEST TO THE UNITED STATES ARMY
MOBILITY EQUIPMENT COMMAND, THE REQUISITIONING ACTIVITY, FOR EVALUATION.
THE COMMAND CONCLUDED THAT IN THE EVENT OF AN AWARD TO MET-PRO, THE
REQUIREMENT FOR A MAINTENANCE CAPABILITY MODEL COULD BE WAIVED.
DELETION OF THIS CLIN RESULTED IN A $3,238.50 REDUCTION IN MET-PRO'S BID
PRICE. IT WAS ALSO DETERMINED THAT VARIOUS DATA CLINS COULD BE WAIVED.
OF THE DATA REQUIREMENTS WAIVED, WE ARE CONCERNED PRIMARILY WITH CLINS
0014 THROUGH 0017 SINCE THEY WERE THE ONLY DATA ITEMS FOR WHICH MET-PRO
CHARGED A PRICE. THE DELETION OF THESE DATA CLINS RESULTED IN A FURTHER
REDUCTION OF $18,252 IN MET-PRO'S BID PRICE. THE COMMAND DECLINED TO
WAIVE FIRST ARTICLE TESTING AND INITIAL PRODUCTION TESTING FOR MET-PRO
AND ALSO ADVISED THAT WAIVERS COULD NOT BE GRANTED FOR OTHER BIDDERS
BECAUSE THEY HAD NOT PREVIOUSLY PRODUCED THE ITEMS FOR THE ARMY.
AS A RESULT OF THE WAIVERS, THE CONTRACTING OFFICER ADVISES THAT
MET-PRO'S TOTAL EVALUATED BID PRICE WAS REDUCED TO $887,310.65, A
REDUCTION OF $21,436.77. AS EVALUATED, MET-PRO'S BID WAS $14,654.23
LOWER THAN ETC'S BID. AWARD OF A CONTRACT FOR THE NON-SET-ASIDE AND
SET-ASIDE PORTIONS WAS MADE TO MET-PRO ON JUNE 30, 1972. ETC'S PROTEST
FOLLOWED.
AS STATED IN ITS LETTER OF AUGUST 11, 1972, ETC'S BASIC CONTENTION IS
THAT MET-PRO WAS DETERMINED TO BE THE LOW BIDDER BY VIRTUE OF DCSC'S USE
OF AN IMPROPER AND UNFAIR EVALUATION FACTOR. WITH RESPECT TO THE
PURCHASE OR NONPURCHASE OF THE DATA CLINS, ETC CONTENDS THAT ALL BIDS
SHOULD HAVE BEEN EVALUATED ON THE SAME BASIS. CONTENDING THAT THE END
ITEM IS TO BE MADE IN ACCORDANCE WITH DETAILED GOVERNMENT SPECIFICATIONS
AND MANUFACTURING DRAWINGS, ETC ARGUES THAT THE EXISTING DATA PACKAGE
(PREVIOUSLY FURNISHED BY MET-PRO) SHOULD, WITH PERHAPS MINOR
MODIFICATION, BE SUFFICIENT FOR USE WITH END ITEMS PRODUCED BY ANY
CONTRACTOR. ON THE OTHER HAND AND POINTING TO THE FACT THAT THE INSTANT
INVITATION CITES VERSIONS OF DATA SPECIFICATIONS WHICH WERE NOT IN
EFFECT AT THE TIME MET-PRO'S PRIOR CONTRACTS WERE AWARDED, ETC SUGGESTS
THAT THE EXISTING DATA PACKAGE MIGHT BE INSUFFICIENT. IN THIS
CONNECTION, ETC ALSO ALLEGES THAT THERE HAVE BEEN NUMEROUS CHANGES TO
THE END ITEM SPECIFICATIONS SINCE MET-PRO'S PRIOR PRODUCTION WHICH COULD
ALSO RENDER THE EXISTING DATA PACKAGE INADEQUATE. ETC CONTENDS THAT THE
VALIDITY OF THIS ALLEGATION IS BORNE OUT BY DCSC'S REFUSAL TO WAIVE
FIRST ARTICLE APPROVAL AND INITIAL PRODUCTION TESTING FOR MET-PRO
NOTWITHSTANDING ITS STATUS AS A PRIOR PRODUCER. ALTERNATIVELY, ETC
URGES THAT IF ALL BIDDERS WERE NOT EVALUATED EQUALLY WITH RESPECT TO THE
PURCHASE OF DATA CLINS, THE INVITATION WAS DEFECTIVE BECAUSE IT FAILED
TO ADVISE BIDDERS THAT DATA CLINS COULD BE WAIVED FOR PREVIOUS SUPPLIERS
OF THE EQUIPMENT.
WITH RESPECT TO THE DECISION NOT TO WAIVE FIRST ARTICLE AND INITIAL
PRODUCTION TESTING FOR MET-PRO, THE CONTRACTING OFFICER'S SUPPLEMENTAL
REPORT ADVISES THAT:
"FIRST ARTICLE TESTING AND INITIAL PRODUCTION TESTING, AS FAR AS THE
UNITED STATES MOBILITY EQUIPMENT COMMAND IS CONCERNED, ARE WAIVED ONLY
WHEN THE EQUIPMENT HAS BEEN RECENTLY TESTED AND FOUND TO CONFORM TO
SPECIFICATION REQUIREMENTS. DUE TO THE LAPSE OF TIME SINCE THE TESTING
UNDER CONTRACT NO. DSA 700-67-C-F070, USAMECOM DID NOT WAIVE THESE
REQUIREMENTS FOR MET-PRO. ***"
THE LAPSE OF TIME SINCE PREVIOUS TESTING IS A PROPER BASIS FOR
DETERMINING THAT WAIVER IS INAPPROPRIATE. SEE PARAGRAPH 1-1902(A)(I)(B)
OF THE ARMED SERVICES PROCUREMENT REGULATION; B-169779, AUGUST 6, 1970.
WE SEE NO REAL INCONSISTENCY IN THE REFUSAL TO WAIVE TESTING AND THE
DETERMINATION THAT THE ITEMS PREVIOUSLY FURNISHED WERE IDENTICAL IN ALL
MATERIAL RESPECTS TO THE ITEMS COVERED BY THIS PROCUREMENT SO THAT THE
EXISTING DATA WOULD BE ADEQUATE.
WITH RESPECT TO THE IMPACT OF CHANGES IN THE DATA AND END ITEM
SPECIFICATIONS BY LETTER DATED NOVEMBER 3, 1972, THE UNITED STATES ARMY
MOBILITY EQUIPMENT COMMAND EXPRESSLY CONFIRMED WHAT WAS IMPLICIT IN THE
DECISION TO WAIVE THE DATA CLINS FOR MET-PRO. THE LETTER STATED IN
PERTINENT PART AS FOLLOWS:
"2. NUMEROUS CHANGES WERE MADE IN SPECIFICATIONS FOR THE SETS DURING
THE PERFORMANCE OF PRIOR CONTRACTS BY MET-PRO, NAMELY DSA700-67-C-F070,
68-C-9773, AND 70-C-8795, HOWEVER, THE CONTRACTOR WAS REQUIRED AND DID
UPDATE THE DATA DURING THE PERFORMANCE OF EACH CONTRACT. UPON
COMPLETION OF DSA700-70-C-8795, THE DATA PACKAGE WAS UPDATED TO REFLECT
ALL CHANGES TO THAT POINT.
"3. SINCE THE COMPLETION OF CONTRACT DSA700-70-C-8795, THE
GOVERNMENT HAS MADE SOME CHANGES AND THE DATA PACKAGE WAS UPDATED BY THE
GOVERNMENT PRIOR TO THE INITIATION OF THE CURRENT PROCUREMENT."
IN RESPONSE TO ETC'S CONTENTION THAT THE SPECIFICATIONS ARE SO
DETAILED THAT NO CONTRACTOR CONFORMING TO THOSE SPECIFICATIONS COULD
PRODUCE AN ITEM AS TO WHICH EXISTING DATA COULD BE UTILIZED, THE
CONTRACTING OFFICER'S SUPPLEMENTAL REPORT CONTAINS THE FOLLOWING
PERTINENT REPLY:
"*** ETC'S ALLEGATIONS IN THIS REGARD ARE NOT CORRECT. DRAWING LIST
13208E 4556, WHICH FORMS A PART OF THE SPECIFICATION, INCLUDES
SPECIFICATION CONTROL DRAWINGS. THESE DRAWINGS DEPICT AN EXISTING
COMMERCIAL ITEM OR VENDOR DEVELOPED ITEM ADVERTISED OR CATALOGUED AS
AVAILABLE ON AN UNRESTRICTED BASIS ON ORDER AS AN OFF THE SHELF ITEM OR
AN ITEM, WHICH WHILE NOT COMMERCIALLY AVAILABLE IS PROCURABLE ON ORDER
FROM A SPECIALIZED SEGMENT OF AN INDUSTRY. THESE DRAWINGS, UNDER THE
HEADING 'SUGGESTED SOURCE OF SUPPLY' LIST THE NAME, ADDRESS, CODE
IDENTIFICATION AND ITEM IDENTIFICATION OF ONE OR MORE KNOWN SOURCES.
THE SUGGESTED SOURCES ARE FOR REFERENCE ONLY AND DO NOT REPRESENT THE
ONLY SOURCES FOR THE ITEMS. THE DRAWINGS WOULD ALLOW CONSIDERABLE
VARIANCE IN THE MANUFACTURE OF WATER PURIFICATION SETS. ANOTHER AREA OF
POSSIBLE VARIATION IS WITH RESPECT TO LUBRICATION FITTINGS AND OIL
FILLING AND DRAINING REQUIREMENTS (SEE PARAGRAPHS 3.7.2 - 3.7.4 OF THE
SPECIFICATION). THESE AUTHORIZED VARIATIONS WOULD INVALIDATE THE USE OF
THE DATA SUPPLIED BY A MANUFACTURER FOR A SET MANUFACTURED BY ANOTHER.
"THE DATA SUPPLIED BY MET-PRO UNDER ITS PRIOR CONTRACT,
NOTWITHSTANDING THE VARIATIONS PERMITTED UNDER THE SPECIFICATIONS, CAN
BE UTILIZED UNDER THE CURRENT CONTRACT BECAUSE MET-PRO IS OBLIGATED TO
FURNISH WATER PURIFICATION SETS IDENTICAL TO THOSE PREVIOUSLY FURNISHED
(SEE MET-PRO'S LETTER OF 14 JUNE 1972 WHICH IS PART OF CONTRACT DSA
700-72-C-9230."
ON THE BASIS OF THE RECORD BEFORE US AND IN LIGHT OF THE FOREGOING
EXPLANATION, THERE IS NO BASIS FOR OUR OFFICE TO ADOPT ETC'S VIEW OF THE
LATITUDE AFFORDED BY THE SPECIFICATIONS. INDEED, IT IS EVIDENT THAT THE
ONLY REASON THE DATA CLINS WERE WAIVED FOR MET-PRO WAS BECAUSE ITS COVER
LETTER WAS VIEWED, AS PART OF THE MET-PRO CONTRACT, AS PRECLUDING THE
FIRM, IN THE EVENT OF A WAIVER, FROM MANUFACTURING THE ITEMS IN A WAY
WHICH WOULD RENDER EXISTING DATA INADEQUATE. WE NOTE THAT ETC HAS NOT
QUESTIONED THE CORRECTNESS OF THE CONTRACTING OFFICER'S DETERMINATION IN
THIS REGARD AND WE CANNOT SAY THAT HIS JUDGMENT WAS UNWARRANTED. ETC'S
BID, ON THE OTHER HAND, OFFERED NO ASSURANCE THAT A PARTICULAR MAKE OR
BUY DECISION BY IT MIGHT NOT RENDER EXISTING DATA INADEQUATE.
CONSEQUENTLY, WE ARE UNABLE TO DISAGREE WITH THE CONTRACTING OFFICER'S
DECISION TO WAIVE THE DATA CLINS FOR MET-PRO AND NOT TO WAIVE THEM FOR
ETC.
WITH RESPECT TO THE BASIS FOR AWARD AND EVALUATION OF DATA CLINS, THE
INVITATION INCORPORATED BY REFERENCE DCSC CONTRACT PROVISION D05,
ENTITLED "DATA PRICING, AND AWARD OF DATA (1972 MAR)." PARAGRAPH "B" OF
CLAUSE DO5 PROVIDES IN PERTINENT PART THAT: "SEPARATE AWARDS WILL NOT
BE MADE FOR DATA CLINS, HOWEVER, THE RIGHT IS RESERVED TO MAKE AN AWARD
FOR THE END ITEM CLINS WITHOUT AWARDING THE DATA CLINS." IT IS THE
CONTRACTING OFFICER'S POSITION THAT THE FOREGOING PROVIDES, BY
IMPLICATION, THAT BIDS FOR WHICH ANY DATA ELEMENT MAY NOT BE REQUIRED
WILL BE EVALUATED WITHOUT CONSIDERING THE COST OF DATA CLINS NOT TO BE
AWARDED. ETC'S POSITION IN RESPONSE IS THAT THIS INFERENCE CANNOT BE
DRAWN FROM THE LANGUAGE USED.
ADMITTEDLY, DO5 DOES NOT EXPRESSLY COVER THE SITUATION INVOLVED HERE
BUT, IN OUR VIEW, THIS IS NOT DECISIVE. IT IS AXIOMATIC THAT THE
EVALUATION OF BID PRICES MUST BE BASED ON THE PRICES OF THE ITEMS THAT
WILL BE THE SUBJECT OF THE AWARD. THEREFORE, THE RIGHT RESERVED BY DO5
NOT TO AWARD THE DATA CLINS NECESSARILY IMPLIES THAT THE BID PRICES OF
ANY DATA CLINS DELETED WILL NOT BE CONSIDERED IN THE EVALUATION OF BIDS.
THE RIGHT TO DELETE ALL OF THE DATA CLINS FROM EVALUATION AND AWARD
PERMITS THE DELETION OF ONE OR MORE DATA CLINS. SEE 52 COMP. GEN. ___
(B-176415, OCTOBER 11, 1972).
IT IS ALSO OBVIOUS THAT A CHANGE IN THE DATA REQUIREMENTS OR A
DETERMINATION THAT THE NEED FOR THE ADVERTISED DATA REQUIREMENTS NO
LONGER EXISTS WOULD LEAD TO A DECISION NOT TO AWARD THE DATA CLINS
REFLECTING THE REVISED OR ELIMINATED REQUIREMENT. MOREOVER, GIVEN A
COMPETITIVE ENVIRONMENT, IT IS NOT UNREASONABLE, IN OUR VIEW, TO
RECOGNIZE THAT THE NEED FOR THE REQUIREMENT MAY DEPEND UPON WHO WILL BE
THE SUCCESSFUL CONTRACTOR. AS A MATTER OF POLICY THIS POSSIBILITY
SHOULD BE RECOGNIZED IN THE INVITATION FOR BIDS AND WE UNDERSTAND THAT
DSA IS IN THE PROCESS OF REVISING DO5 TO ACCOMPLISH THIS END.
NEVERTHELESS, WE CANNOT FIND THAT THE LACK OF SPECIFICITY IN DO5 IS A
SOUND BASIS FOR QUESTIONING THE LEGAL SUFFICIENCY OF THE AWARD.
UNDER THE TERMS OF THE INVITATION, ETC HAD AN OPPORTUNITY TO SUBMIT
ITS BEST PRICE FOR EACH CLIN; THE POSSIBILITY THAT A PRIOR PRODUCER
MIGHT SECURE AN ADVANTAGE IN THE EVALUATION IS A CIRCUMSTANCE OF THE
PROCUREMENT THAT ETC CANNOT AVOID.
ACCORDINGLY, THE PROTEST IS DENIED.
B-176438(2), DEC 27, 1972
BID PROTEST - PROCUREMENT PROCEDURES - NEGOTIATIONS - WRITTEN RECORDS -
ADMINISTRATIVE REPORTS TO GAO
CONCERNING THE PROTEST OF COLLINS RADIO COMPANY AGAINST AWARD OF A
CONTRACT TO MICRO-WAVE ENGINEERING, INC., UNDER A RFP ISSUED BY THE
FEDERAL AVIATION AGENCY (FAA).
ALTHOUGH PROTEST WAS DENIED, GAO RECOMMENDS THAT A PROCEDURE
REQUIRING THE PREPARATION OF WRITTEN MINUTES OF NEGOTIATIONS BE
INSTITUTED FOR FUTURE PROCUREMENTS, THAT GREATER CARE BE TAKEN IN
INSURING THE EXACTNESS OF FACTS CONTAINED IN ADMINISTRATIVE REPORTS
FURNISHED GAO, AND THAT SUCH FUTURE ADMINISTRATIVE REPORTS BE FURNISHED
MORE EXPEDITIOUSLY.
TO MR. SECRETARY:
BY LETTERS DATED AUGUST 8 AND OCTOBER 30, 1972, THE ASSOCIATE
ADMINISTRATOR/ADMINISTRATION FURNISHED OUR OFFICE WITH REPORTS ON THE
PROTEST OF COLLINS RADIO COMPANY OF THE AWARD OF A CONTRACT TO MICROWAVE
ENGINEERING, INC., UNDER REQUEST FOR PROPOSALS WA5M-2-7492, ISSUED BY
THE FEDERAL AVIATION ADMINISTRATION.
ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO COUNSEL FOR COLLINS
DENYING THE PROTEST.
ALTHOUGH WE HAVE DENIED THE PROTEST, OUR REVIEW OF THIS CASE HAS
REVEALED DEVIATIONS FROM GOOD PROCUREMENT PRACTICE WHICH WE ARE CALLING
TO YOUR ATTENTION IN ORDER THAT PROCEDURES MAY BE INSTITUTED TO PRECLUDE
THEIR OCCURRENCE IN FUTURE CASES.
FIRST, IN OUR OPINION, THIS PROTEST WOULD HAVE BEEN MORE EASILY
RESOLVABLE HAD A DETAILED SUMMARY OF NEGOTIATIONS WITH ALL OFFERORS BEEN
MADE AS A MATTER OF COURSE IMMEDIATELY FOLLOWING NEGOTIATIONS. WHILE A
NEGOTIATION SUMMARY DATED MAY 24, 1972, WAS PREPARED, THAT SUMMARY USES
BROAD, GENERAL TERMS, STATING ONLY, IN THE CASE OF COLLINS, THAT COLLINS
HAD TAKEN "MANY EXCEPTIONS" ALL OF WHICH WERE NOT ACCEPTABLE, WITHOUT
MAKING MENTION OF THE SPECIFIC AREAS OF THE COLLINS PROPOSAL CONSIDERED
TO BE UNACCEPTABLE OR WITHOUT SPECIFYING THE NATURE OF ANY AGREEMENTS
REACHED WITH COLLINS DURING NEGOTIATIONS.
OUR EXPERIENCE HAS SHOWN THAT SOME PROCURING AGENCIES CONSIDER THE
CONTEMPORANEOUS MEMORIALIZATION OF NEGOTIATION DISCUSSIONS TO BE OF
SUFFICIENT IMPORTANCE TO WARRANT THE PREPARATION OF A VERBATIM
TRANSCRIPT. WHILE EVERY CASE DOES NOT NECESSARILY REQUIRE THE DETAIL
PROVIDED BY A TRANSCRIPT, WE BELIEVE THAT A CONTEMPORANEOUS AND COMPLETE
WRITTEN RECORD OF NEGOTIATIONS SHOULD BE PREPARED IN EVERY INSTANCE, AND
WE THEREFORE RECOMMEND THAT A PROCEDURE REQUIRING THE PREPARATION OF
WRITTEN MINUTES OF NEGOTIATIONS BE INSTITUTED FOR USE IN FUTURE
PROCUREMENTS.
SECONDLY, THE ADMINISTRATIVE REPORT FURNISHED US BY FAA CONTAINED
CERTAIN INCONSISTENCIES AND FACTUAL MISSTATEMENTS. THUS WHILE THE
ORIGINAL REPORT STATED THAT THE CONTRACTING OFFICER WAS AWARE OF
COLLINS' TECHNICAL EXCEPTIONS EXPRESSED DURING NEGOTIATIONS AND AS
CONTAINED IN ITS APRIL 24 PROPOSAL REVISION, THE SUPPLEMENTAL REPORT
ADVANCES AS A REASON FOR NOT IMMEDIATELY SCRUTINIZING THE COLLINS APRIL
24 LETTER THE FACT THAT THE CONTRACTING OFFICER WAS UNDER THE IMPRESSION
THAT COLLINS HAD WITHDRAWN ALL MATERIAL TECHNICAL QUALIFICATIONS DURING
NEGOTIATIONS. ALSO, THE ADMINISTRATIVE REPORT TAKES THE POSITION THAT
COLLINS' SUBSTITUTION OF ITS OWN GUARANTEE CLAUSE IN PLACE OF THE
STANDARD FAA CLAUSE WAS MENTIONED FOR THE FIRST TIME IN THE APRIL 24
LETTER NOTWITHSTANDING THE FACT THAT SUCH SUBSTITUTION WAS ACTUALLY MADE
IN A COVER LETTER TO COLLINS' JANUARY 14, 1972, PROPOSAL. WHILE THESE
INACCURACIES RELATED TO PERIPHERAL ISSUES NOT BEARING MATERIALLY ON OUR
RESOLUTION OF THIS PROTEST, ACCURACY IN ADMINISTRATIVE REPORTS
ORDINARILY IS NECESSARY FOR PROPER RESOLUTION OF BID PROTESTS BEFORE OUR
OFFICE, DECIDED AS THEY ARE ON THE BASIS OF THE WRITTEN RECORD, AND CARE
SHOULD BE TAKEN TO INSURE THE EXACTNESS OF THE REPORTED FACTS.
FINALLY, WE OBSERVE THAT THERE WAS AN INORDINATE DELAY IN THE
SUBMISSION OF THE SUPPLEMENTAL ADMINISTRATIVE REPORTS TO OUR OFFICE. WE
WOULD APPRECIATE IT IF IN THE FUTURE ADMINISTRATIVE REPORTS ARE
FURNISHED MORE EXPEDITIOUSLY.
B-177089, DEC 27, 1972
BID PROTEST - SMALL BUSINESS SET-ASIDE - ADMINISTRATIVE DISCRETION
DECISION DENYING THE PROTEST OF ELECTROCHIMICA CORPORATION THAT AN
IFB ISSUED BY THE NAVAL ORDNANCE STATION, LOUISVILLE, KY., SHOULD HAVE
BEEN PARTIALLY SET ASIDE FOR SMALL BUSINESS PARTICIPATION.
WHETHER A PARTICULAR PROCUREMENT SHOULD BE SET ASIDE FOR SMALL
BUSINESS IS WITHIN THE AMBIT OF THE BROAD ADMINISTRATIVE DISCRETION OF
THE PROCURING AGENCY AND THE SBA, AND WILL NOT BE QUESTIONED BY GAO
UNLESS THERE IS A CLEAR SHOWING OF ABUSE OF DISCRETION. B-170837, MARCH
8, 1971. MOREOVER, ALTHOUGH ASPR 1-706.6(A)(III) REQUIRES A PARTIAL
SET-ASIDE WHERE IT IS EXPECTED THAT AT LEAST ONE SMALL BUSINESS HAS THE
CAPACITY AND COMPETENCE TO PERFORM AT A REASONABLE PRICE, IT PROVIDES
FURTHER THAT IF ONLY ONE LARGE AND ONE SMALL FIRM ARE SO QUALIFIED THEN
SUCH A SET-ASIDE SHOULD NOT BE MADE.
TO ELECTROCHIMICA CORPORATION:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 7, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING THAT INVITATION FOR BIDS (IFB)
N00197-73-B-0041, ISSUED BY THE NAVAL ORDNANCE STATION, LOUISVILLE,
KENTUCKY, SHOULD HAVE BEEN PARTIALLY SET ASIDE FOR SMALL BUSINESS
PARTICIPATION.
THE POSITION OF OUR OFFICE WITH RESPECT TO SIMILAR PROTESTS HAS BEEN
EXPRESSED IN A NUMBER OF OUR DECISIONS OF WHICH THE FOLLOWING QUOTED
PORTION FROM B-170837, MARCH 8, 1971, IS REPRESENTATIVE:
"SECTION 15 OF THE SMALL BUSINESS ACT, 15 U.S.C. 644, PROVIDES THAT
SMALL BUSINESS CONCERNS SHALL RECEIVE ANY AWARD OR CONTRACT OR ANY PART
THEREOF AS TO WHICH IT IS DETERMINED TO BE IN THE INTEREST OF ASSURING
THAT A FAIR PROPORTION OF THE TOTAL PURCHASES AND CONTRACTS FOR PROPERTY
AND SERVICES FOR THE GOVERNMENT ARE PLACED WITH SMALL BUSINESS CONCERNS.
UNDER SECTION 15 OF THE ACT, THE DETERMINATION AS TO WHETHER A
PARTICULAR PROCUREMENT, OR PART THEREOF, SHOULD BE SET ASIDE FOR SMALL
BUSINESS IS WITHIN THE JURISDICTION OF THE PROCURING AGENCY AND THE
SMALL BUSINESS ADMINISTRATION. B-167131, JULY 23, 1969. IT IS OUR
POSITION THAT THE DETERMINATION TO SET ASIDE A PROCUREMENT FOR SMALL
BUSINESS IS WITHIN THE AMBIT OF SOUND ADMINISTRATIVE DISCRETION. THIS
AUTHORITY IS VERY BROAD AND AN ADMINISTRATIVE DETERMINATION MADE
PURSUANT TO SUCH AUTHORITY IS NOT ORDINARILY REVIEWED BY OUR OFFICE.
B-150048, DECEMBER 12, 1962, B-165119, OCTOBER 4, 1968. OUR OFFICE WILL
QUESTION SUCH A DETERMINATION ONLY UPON A CLEAR SHOWING OF ABUSE OF THE
DISCRETION. B-168587, FEBRUARY 17, 1970."
AS INDICATED IN THE ADMINISTRATIVE REPORT UPON WHICH YOU COMMENTED,
THE DETERMINATION NOT TO PARTIALLY SET ASIDE THIS PROCUREMENT WAS BASED
UPON THE FACT THAT THE PROCUREMENT ACTIVITY DID NOT REASONABLY EXPECT A
RESPONSE TO THE IFB FROM MORE THAN ONE LARGE AND ONE SMALL BUSINESS.
ALTHOUGH YOU ARE CORRECT THAT ARMED SERVICES PROCUREMENT REGULATION
(ASPR) 1-706.6(A)(III) REQUIRES A PARTIAL SET-ASIDE WHERE IT IS EXPECTED
THAT AT LEAST ONE SMALL BUSINESS HAS THE CAPACITY AND COMPETENCE TO
PERFORM AT A REASONABLE PRICE, IT PROVIDES FURTHER:
"*** THAT A PARTIAL SET-ASIDE SHALL NOT BE MADE IF THERE IS A
REASONABLE EXPECTATION THAT ONLY TWO CONCERNS (ONE LARGE AND ONE SMALL)
WITH TECHNICAL COMPETENCY AND PRODUCTIVE CAPACITY WILL RESPOND WITH BIDS
OR PROPOSALS. ***"
THE IFB ORIGINALLY WAS SENT TO ONE LARGE AND FOUR SMALL BUSINESSES,
THE LATTER BEING YOUR FIRM AND THREE OTHERS WHICH YOU RECOMMENDED.
SUBSEQUENTLY, ANOTHER LARGE BUSINESS, P.R. MALLORY & CO., INC.,
REQUESTED AN IFB AS A RESULT OF THE PROCUREMENT BEING SYNOPSIZED IN THE
COMMERCE BUSINESS DAILY. MALLORY WAS THE SUCCESSFUL BIDDER UNDER THE
IFB. FROM THE MANNER IN WHICH MALLORY RECEIVED ITS COPY OF THE IFB, IT
DOES NOT APPEAR THAT IT HAD PREVIOUSLY REQUESTED THE PROCUREMENT
ACTIVITY TO PLACE ITS NAME ON THE BIDDER'S LIST FOR THE BATTERIES HERE
INVOLVED OR HAD OTHERWISE MADE KNOWN TO THE PROCUREMENT ACTIVITY ITS
INTEREST IN PROCUREMENTS OF THIS NATURE. IN ADDITION, ON PREVIOUS
PROCUREMENTS FOR THESE BATTERIES, THE ONLY LARGE BUSINESS RESPONDING HAD
BEEN THE RAY-O-VAC DIVISION, ESB, INCORPORATED.
IN THE CIRCUMSTANCES, IT IS NOT APPARENT THAT THE DETERMINATION NOT
TO SET ASIDE A PORTION OF THE PROCUREMENT FOR SMALL BUSINESS WAS AN
ABUSE OF DISCRETION. ACCORDINGLY, THERE IS NO BASIS FOR A LEGAL
OBJECTION BY OUR OFFICE AND THE PROTEST THEREFORE IS DENIED.
B-177477, DEC 27, 1972
CONTRACT - MISTAKE IN BID - CORRECTION IN PRICE
DECISION DENYING ANY INCREASE IN PRICE FOR A CONTRACT AWARDED TO
SACRAMENTO SKY RANCH, INC., UNDER AN IFB ISSUED BY THE IMMIGRATION AND
NATURALIZATION SERVICE.
A CLAIM FOR RELIEF OF A UNILATERAL MISTAKE IN BID ALLEGED AFTER AWARD
CANNOT BE GRANTED WITHOUT SHOWING THAT THE MISTAKE WAS SO APPARENT AS TO
HAVE CHARGED THE CONTRACTING OFFICER WITH NOTICE OF THE PROBABILITY OF
ERROR, B-161964, JULY 17, 1967, THAT A MISTAKE WAS IN FACT MADE, THE
NATURE OF THE MISTAKE, AND WHAT THE BID PRICE WOULD HAVE BEEN BUT FOR
THE MISTAKE. B-65047, SEPTEMBER 5, 1968.
TO MR. ATTORNEY GENERAL:
WE REFER TO A LETTER DATED NOVEMBER 13, 1972, FROM THE ASSISTANT
ATTORNEY GENERAL FOR ADMINISTRATION, REQUESTING A DECISION ON THE
PROPRIETY OF PERMITTING CORRECTION AFTER AWARD OF A MISTAKE IN BID
CLAIMED BY SACRAMENTO SKY RANCH, INC., THE LOW BIDDER UNDER INVITATION
FOR BIDS (IFB) NO. SPD 44-72, ISSUED BY THE IMMIGRATION AND
NATURALIZATION SERVICE.
THE REQUIREMENTS FOR THE SUBJECT IFB WERE SET FORTH ON PAGE 23,
SCHEDULE AND OFFER, OF THE SOLICITATION, IN PERTINENT PART AS FOLLOWS:
"ITEM NO.
1. EXCHANGE PURCHASE OF ENGINE, AIRCRAFT, REMANUFACTURED, 230 H.P.,
CONTINENTAL MODEL 0-470-R SPECIFICATION 13 TO INCLUDE: ***
2. EXCHANGE ALLOWANCE (CREDIT) TO BE APPLIED AGAINST EQUAL NUMBER OF
ITEM 1 FOR RUN OUT AIRCRAFT ENGINE, 230 H.P., CONTINENTAL MODEL 0-470-R.
3. EXCHANGE PURCHASE OF ENGINE, AIRCRAFT, REMANUFACTURED, 230 H.P.,
CONTINENTAL MODEL 0-470-R, SPECIFICATION 13, TO INCLUDE: ***
E. EACH ENGINE SHALL HAVE 100% NEW FACTORY COMPLETE, CYLINDER
ASSEMBLIES IN ALL CYLINDER POSITIONS INSTALLED BY THE FACTORY AT TIME OF
REMANUFACTURE.
4. EXCHANGE ALLOWANCE (CREDIT) TO BE APPLIED TO EQUAL NUMBER OF ITEM
3 FOR RUNOUT AIRCRAFT ENGINE 230 H.P. CONTINENTAL 0470R."
WHEN BIDS WERE OPENED ON MAY 31, 1972, IT WAS NOTED THAT SACRAMENTO
HAD OFFERED A 2 PERCENT, 45 CALENDAR DAYS, PROMPT PAYMENT DISCOUNT FOR
THE REQUIREMENT, AND HAD STIPULATED THAT SUCH DISCOUNT DID NOT APPLY ON
"ENGINE DEPOSIT." THE CONCERN'S PRICES ON THE FOUR ITEMS SET OUT ABOVE
WERE:
"ITEM NO. QUANTITY UNIT PRICE AMOUNT
1 4 $3,267.00 $13,068.00
DEPOSIT 1,300.00 5,200.00
18,268.00
2 4 1,300.00 5,200.00
3 4 5,012.49 20,049.96
4 4 1,300.00 5,200.00"
SINCE SACRAMENTO WAS DETERMINED TO HAVE SUBMITTED THE ONLY RESPONSIVE
BID FOR THE REQUIREMENT, THE CONTRACTING OFFICER REPORTS THAT HE
SUBSEQUENTLY AWARDED CONTRACT NO. SPD-6-73 TO THE CONCERN FOR ITEMS 3,
4, AND 5 (A NO CHARGE ITEM) ON JUNE 24, 1972, AT A DISCOUNTED PRICE OF
$14,553.00.
BY LETTER OF SEPTEMBER 22, 1972, TO THE CONTRACTING OFFICER
SACRAMENTO STATED THAT IT SHOULD HAVE LISTED A DEPOSIT OF $1,300 IN ITEM
3 OF ITS BID IN THE SAME MANNER THAT IT LISTED A SIMILAR DEPOSIT IN ITEM
1; THAT IT INTENDED TO PREVENT THE GOVERNMENT FROM APPLYING THE
CONCERN'S PROMPT PAYMENT DISCOUNT TO SUCH DEPOSITS; THAT SUCH DEPOSIT
IN ITEM 3 WAS ERRONEOUSLY OMITTED; AND THAT ITS CONTRACT PRICE FOR THE
ITEM SHOULD THEREFORE BE AMENDED AND RAISED BY $1,300. IN SUPPORT OF
ITS REQUEST, SACRAMENTO ALSO SUBMITTED SEVERAL WORKSHEETS, INCLUDING
HANDWRITTEN AND TYPEWRITTEN WORK COPIES OF ITS BID, AND A COPY OF A
PARTS PRICE LIST OF TELEDYNE CONTINENTAL MOTORS COMPANY, SACRAMENTO'S
SUPPLIER OF THE REMANUFACTURED ENGINES.
WITH RESPECT TO THIS INFORMATION THE CONTRACTING OFFICER STATES THAT
THE WORKSHEETS SHOW THAT THE CONTRACTOR DID NOT INCLUDE ANY DEPOSIT FOR
THE ITEM, AND THAT THE PRICES IN THE PARTS LIST CONFIRM THE ACCURACY OF
THE PRICES WHICH THE COMPANY USED IN COMPUTING ITS BID FOR ITEM 3. IN
VIEW THEREOF, THE CONTRACTING OFFICER STATES THAT HE BELIEVES THE
CONTRACTOR MADE A BONA FIDE MISTAKE IN ITEM 3 BY FAILING TO LIST THE
DEPOSIT AS AN EXTRA ITEM, AND RECOMMENDS THAT THE CONTRACT PRICE FOR THE
ITEM BE INCREASED BY $1,300.
A CLAIM FOR RELIEF OF A UNILATERAL MISTAKE IN BID ALLEGED AFTER AWARD
CANNOT BE GRANTED WITHOUT SHOWING THAT THE MISTAKE WAS SO APPARENT AS TO
HAVE CHARGED THE CONTRACTING OFFICER WITH NOTICE OF THE PROBABILITY OF
THE ERROR. B-161964, JULY 17, 1967. ASSUMING, FOR THE PURPOSE OF
DISCUSSION, THAT EVIDENCE OF SACRAMENTO'S MISTAKE WAS CLEAR AND
CONVINCING, WE FAIL TO SEE HOW THE CONTRACTING OFFICER COULD BE CHARGED
WITH NOTICE THAT THE CONTRACTOR'S PRICE FOR ITEM 3 WAS ERRONEOUS. IN
THIS REGARD THE RECORD SHOWS THAT SACRAMENTO SUBMITTED THE ONLY
RESPONSIVE BID FOR THE REQUIREMENT; THAT ITS UNIT PRICE FOR ITEM 3 FOR
THE FURNISHING OF NEW CYLINDERS WITH THE ENGINES WAS $400.00 MORE THAN
ITS UNIT PRICE FOR ITEM 1 WITHOUT FURNISHING SUCH CYLINDERS; AND THAT
THE CONTRACTING OFFICER DID NOT HAVE ANY ESTIMATE FOR THE ADDITIONAL
COST, IF ANY, INVOLVED IN OBTAINING NEW CYLINDERS FOR THE
REMANUFACTURING WORK WHICH WAS INVOLVED UNDER ITEM 3.
IN ADDITION, TO ALLOW CORRECTION OF A MISTAKE IN BID CLAIMED AFTER
AWARD, THE EVIDENCE MUST CONCLUSIVELY ESTABLISH THE MISTAKE, THE NATURE
OF THE MISTAKE, AND WHAT THE BID PRICE WOULD HAVE BEEN BUT FOR THE
MISTAKE. B-165047, SEPTEMBER 5, 1968.
WITH RESPECT TO THE SUBJECT CLAIM, WE AGREE WITH THE CONTRACTING
OFFICER'S OBSERVATION THAT THE WORKSHEETS SHOW THAT THE CONTRACTOR DID
NOT INCLUDE ANY DEPOSIT FOR ITEM 3. WE BELIEVE, HOWEVER, THAT SUCH FACT
DOES NOT CONCLUSIVELY ESTABLISH THAT THE CONTRACTOR INTENDED TO LIST A
DEPOSIT ENTRY IN ITEM 3 OF ITS BID. IN THIS REGARD, WE NOTE THAT THE
IFB DID NOT REQUIRE BIDDERS TO SUBMIT A DEPOSIT ENTRY FOR EITHER ITEM 1
OR ITEM 3. IN THIS CIRCUMSTANCE, THE ABSENCE OF SUCH ENTRY IN THE
WORKSHEETS FOR ITEM 3 COULD ALSO INDICATE THAT THE CONTRACTOR DID NOT
INTEND TO PLACE A DEPOSIT ENTRY IN ITS BID FOR THE SUBJECT ITEM. IN
VIEW THEREOF, WE CANNOT CONCLUDE THAT THE EVIDENCE CONCLUSIVELY
ESTABLISHES THAT A MISTAKE HAS BEEN MADE, OR WHAT THE BID PRICE WOULD
HAVE BEEN BUT FOR THE MISTAKE.
ACCORDINGLY, WE FIND NO LEGAL BASIS ON THE PRESENT RECORD FOR PAYMENT
TO SACRAMENTO OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE. THE FILE
FORWARDED WITH THE REPORT OF NOVEMBER 13 IS RETURNED.
B-141529, DEC 26, 1972
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY - CONSTRUCTION FUNDS -
COURT LITIGATION IN PROGRESS
CONCERNING THE QUESTION AS TO WHETHER FEDERAL FUNDS RECEIVED BY THE
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY (WMATA) FOR THE
AUTHORIZED SUBWAY SYSTEM ARE AVAILABLE TO PAY FOR CONSTRUCTION OF
FACILITIES TO ACCOMMODATE THE HANDICAPPED AS REQUIRED BY PUB. L.
91-205.
THE COMP. GEN. REAFFIRMS THE LONG-STANDING POLICY OF GAO TO DECLINE
TO RULE ON ISSUES IN LITIGATION IN THE COURTS.
TO MR. JOSEPH L. FISHER:
REFERENCE IS MADE TO THE LETTER OF JULY 27, 1972, WITH ENCLOSURES,
FROM THE GENERAL MANAGER, WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY
(WMATA), REQUESTING OUR VIEWS AS TO WHETHER FEDERAL FUNDS RECEIVED BY
WMATA FROM THE UNITED STATES UNDER PRESENT APPROPRIATIONS FOR THE
AUTHORIZED SUBWAY SYSTEM (KNOWN AS METRO), AS WELL AS FUNDS FROM THE
LOCAL JURISDICTIONS INVOLVED, ARE AVAILABLE TO PAY FOR CONSTRUCTION OF
FACILITIES TO ACCOMMODATE THE HANDICAPPED AS REQUIRED BY THE ACT OF
AUGUST 12, 1968, PUB. L. 90-480, AS AMENDED BY THE ACT OF MARCH 5, 1970,
PUB. L. 91-205, 42 U.S.C. 4151 ET. SEQ.
THE GENERAL MANAGER STATES THAT THESE FACILITIES ARE ESTIMATED TO
COST $65 MILLION, AND THAT THE QUESTION HE PRESENTS IS CURRENTLY IN
ISSUE BEFORE THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
COLUMBIA IN WASHINGTON URBAN LEAGUE, INC. ET AL., V. WASHINGTON
METROPOLITAN TRANSIT AUTHORITY, C.C.A. NO. 788-72. ON JUNE 29, 1972, IN
AN OPINION BY JUDGE WILLIAM B. JONES, THE DISTRICT COURT DENIED
PLAINTIFFS' REQUEST FOR A PRELIMINARY INJUNCTION REQUIRING WMATA TO STOP
CONSTRUCTION ON METRO PENDING A DETERMINATION OF THE ISSUE ON THE
MERITS. ONE OF THE REASONS FOR THE COURT'S DECISION WAS THAT IT FELT
THE PLAINTIFFS HAD NOT MADE A STRONG SHOWING THAT THEY ARE LIKELY TO
PREVAIL ON THE MERITS.
SHORTLY AFTER RECEIPT OF THE GENERAL MANAGER'S LETTER, WE WERE
INFORMALLY CONTACTED BY ATTORNEYS FOR THE PLAINTIFFS WHO WISHED TO HAVE
THE OPPORTUNITY TO PRESENT THEIR VIEWS ON THE ISSUES INVOLVED BEFORE WE
REACHED OUR DECISION. WE INFORMALLY ADVISED PLAINTIFFS' ATTORNEYS THAT
IT HAS LONG BEEN THE POLICY OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT
TO DECLINE TO RULE ON ISSUES INVOLVED IN CASES WHICH ARE UNDER
LITIGATION IN THE COURTS AND THAT SINCE THE MATTERS RAISED BY THE
GENERAL MANAGER OF WMATA ARE THE SUBJECT OF PENDING LITIGATION, IT WAS
OUR PRELIMINARY DETERMINATION THAT IT WOULD BE INAPPROPRIATE FOR US TO
COMMENT THEREON AT THIS TIME. AT THEIR REQUEST WE REFRAINED FROM SO
RULING PENDING THE RECEIPT OF A WRITTEN STATEMENT FROM THESE ATTORNEYS
AS TO THE REASONS THEY FEEL WE SHOULD REACH A DECISION ON THE MERITS IN
THIS CASE.
A LETTER DATED SEPTEMBER 21, 1972, FROM JAMES A. DOBKIN, ESQ., OF
ARNOLD AND PORTER, SETS FORTH SEVERAL ARGUMENTS IN FAVOR OF OUR REACHING
A DISPOSITION ON THE MERITS. FIRST, IT IS SUGGESTED THAT THIS OFFICE
HAS EXPERTISE IN THE USE OF APPROPRIATED FUNDS AND THAT PURSUANT TO
SECTION 70(B) OF THE INTERSTATE COMPACT THAT CREATED WMATA (PUB. L.
89-774), WE HAVE THE AUTHORITY TO AUDIT WMATA'S EXPENDITURE OF FEDERAL
FUNDS. SECOND, IT IS NOTED THAT ONE OF THIS OFFICE'S PRIMARY FUNCTIONS
IS TO ADVISE CONGRESS AND THAT THERE IS DISTINCT CONGRESSIONAL INTEREST
- EXPRESSED IN HEARINGS HELD ON JUNE 29, 1972, BY REPRESENTATIVE KENNETH
GRAY, CHAIRMAN, SUBCOMMITTEE ON PUBLIC BUILDINGS AND GROUNDS, HOUSE
COMMITTEE ON PUBLIC WORKS - IN OUR REACHING A DETERMINATION. THIRD, IT
IS SUGGESTED THAT SINCE THE LITIGATION IS PRESENTLY "IN A STATE OF
DORMANCY," OUR DECISION - PRESUMABLY, HOWEVER, ONLY IF FAVORABLE TO THE
PLAINTIFFS - COULD FACILITATE THE SPEEDY RESOLUTION OF THE LITIGATION
AND THEREBY DECREASE THE EVENTUAL COST OF INSTALLING FACILITIES FOR THE
HANDICAPPED. FINALLY, IT IS STATED THAT THE MERE FACT THAT THE QUESTION
PRESENTED IS ALSO THE SUBJECT OF LITIGATION SHOULD NOT DETER US FROM
RENDERING A DECISION SINCE "CURRENT JUDICIAL ATTITUDE ENCOURAGES
ADVISORY OPINIONS FROM YOUR OFFICE TO ASSIST THE COURT IN THE
DISPOSITION OF CASES WITHIN YOUR AREAS OF EXPERTISE." CASES CITED BY MR.
DOBKIN INCLUDE THE WHEELABRATOR CORP. V. CHAFEE, 455 F.2D 1306 (1971);
GENERAL ELECTRIC CO. V. SEAMANS, D.C. CIR., NO. 72-1243, JUNE 16, 1972;
SERV-AIR, INC. V. SEAMANS, D.C. CIR., NO. 72-1616, JUNE 30, 1972; AND
MERRIAM V. KUNZIG, E.D. PA., C.A. NO. 71-2262.
IN RESPONSE TO THE AFOREMENTIONED REASONING, WE WOULD LIKE TO POINT
OUT THAT ONCE AN ISSUE IS PLACED BEFORE THE JUDICIARY FOR DETERMINATION,
IT IS FOR THAT COORDINATE BRANCH OF THE GOVERNMENT TO RESOLVE. THIS
OFFICE HAS NO AUTHORITY TO INTERVENE IN SUCH PROCEEDINGS ABSENT THE
CONSENT OF THE COURT. FURTHER, ONCE AN ISSUE IS BEFORE A COURT, NEITHER
THE PRIVATE PARTY (WHICH NEVER IS) NOR THE GOVERNMENT AGENCY INVOLVED
WOULD BE BOUND BY THE DECISION OF THIS OFFICE. THIS IS ESPECIALLY TRUE
IN THIS CASE SINCE WMATA IS NOT A FEDERAL AGENCY AND, HENCE, IS NOT
BOUND BY OUR DECISIONS. (OF COURSE, THIS DOES NOT MEAN THAT IN MORE
APPROPRIATE CIRCUMSTANCES, THIS OFFICE WOULD NOT RENDER OPINIONS TO
WMATA ON MATTERS RELATING TO THE FEDERAL PORTION OF ITS MONIES.)
MOREOVER, EVEN IF WMATA WERE TO AGREE TO BE BOUND BY OUR OPINION, IN THE
ABSENCE OF A SIMILAR AGREEMENT BY THE PLAINTIFFS ONLY A DETERMINATION IN
FAVOR OF THE PLAINTIFFS WOULD EXPEDITE THE INSTALLATION OF THE
FACILITIES FOR THE HANDICAPPED AND WE, OF COURSE, CANNOT SAY WE WOULD
REACH SUCH A RESULT. IN THIS REGARD WE MIGHT POINT OUT THAT AT LEAST AT
FIRST GLANCE AND WITHOUT GOING INTO THE MATTER IN DETAIL, THE REASONING
BY JUDGE JONES IN HIS DECISION DETERMINING THAT THE PLAINTIFFS HAD NOT
MADE A STRONG SHOWING THEY WERE LIKELY TO PREVAIL ON THE MERITS IS
PERSUASIVE. FINALLY, WHILE WE HAVE AT TIMES RENDERED ADVISORY OPINIONS
ON CASES WHERE LITIGATION WAS PENDING - SUCH AS THOSE REFERRED TO BY MR.
DOBKIN AND CITED ABOVE - WE HAVE GENERALLY RESTRICTED THAT PRACTICE TO
CASES IN WHICH THE COURTS HAVE EXPRESSED A DESIRE TO RECEIVE OR AWAIT
OUR OPINION.
AS TO OUR DECISION OF NOVEMBER 17, 1971, B-170989, REFERRED TO IN
ARNOLD AND PORTER'S LETTER, WHILE IN THAT CASE WE RULED ON THE ISSUES
INVOLVED IN LITIGATION WHERE THE DISTRICT COURT HAD DENIED PLAINTIFF'S
MOTION FOR A PRELIMINARY INJUNCTION (KECO V. UNITED STATES, 318 F. SUPP.
1361), THE PLAINTIFF THEREIN HAD REQUESTED THE UNITED STATES ATTORNEY TO
AGREE TO A DISMISSAL OF THE CASE WITHOUT PREJUDICE (WHICH REQUEST WAS
REFUSED) AND ALSO COMMITTED HIMSELF TO BE BOUND BY OUR FINDINGS ON THE
MERITS OF THE ISSUES INVOLVED IN THE BID PROTEST. SUCH CIRCUMSTANCES DO
NOT EXIST IN THE INSTANT CASE.
IN VIEW OF ALL THE ABOVE, WE MUST REAFFIRM THE LONG STANDING POLICY
OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT - A POLICY INVOKED EVEN
WHERE THE OPINION IS REQUESTED BY A COMMITTEE OR MEMBER OF CONGRESS - TO
DECLINE TO RULE ON ISSUES INVOLVED IN CASES SUCH AS THIS ONE, WHICH ARE
IN LITIGATION IN THE COURTS. CONSEQUENTLY, SINCE THE MATTERS RAISED IN
THE GENERAL MANAGER'S LETTER ARE THE SUBJECT OF PENDING LITIGATION, IT
WOULD BE INAPPROPRIATE FOR US TO COMMENT THEREON AT THIS TIME.
COPIES OF THIS LETTER ARE BEING SENT TO THE EXECUTIVE SECRETARY, THE
PRESIDENT'S COMMITTEE ON EMPLOYMENT OF THE HANDICAPPED; THE ACTING
EXECUTIVE DIRECTOR, PARALYZED VETERANS OF AMERICA; AND JAMES A. DOBKIN,
ESQ., ARNOLD AND PORTER, ATTORNEYS AT LAW.
B-176697, DEC 26, 1972
BID PROTEST - SPECIFICATION IMPROPIETIES - UNTIMELY PROTEST - TECHNICAL
JUDGMENTS
DECISION DENYING THE PROTEST OF LITTON BUSINESS SYSTEMS, INC., ON
BEHALF OF THEIR FITCHBURG COATED PRODUCTS DIVISION AGAINST AWARD OF ANY
CONTRACTS UNDER AN IFB ISSUED BY THE GENERAL SERVICES ADMINISTRATION.
PROTESTS CONCERNING ALLEGED IMPROPRIETIES IN THE SPECIFICATIONS,
WHERE SUCH IMPROPRIETIES ARE APPARENT BEFORE BID OPENING, MUST BE FILED
PRIOR TO THAT TIME; OTHERWISE THE PROTESTANT WILL BE DEEMED TO HAVE
ACQUIESCED IN THE TERMS AND CONDITIONS OF THE IFB. 50 COMP. GEN. 193
(1970). ALSO, SINCE IT IS IN THE PROVINCE OF THE PROCURING AGENCY TO
DRAFT SPECIFICATIONS AND TO DETERMINE WHETHER THE ARTICLES OFFERED
CONFORM TO THE SPECIFICATIONS, 17 COMP. GEN. 554, 557 (1938), GAO WILL
ACCEPT THE TECHNICAL JUDGMENTS OF THE AGENCY INVOLVED, UNLESS THEY ARE
SHOWN TO BE CLEARLY IN ERROR. 49 COMP. GEN. 195, 198 (1969).
TO LITTON BUSINESS SYSTEMS, INC.:
FURTHER REFERENCE IS MADE TO YOUR PROTEST OF AUGUST 3, 1972, ON
BEHALF OF YOUR FITCHBURG COATED PRODUCTS DIVISION (FITCHBURG), AGAINST
AWARD OF ANY CONTRACTS UNDER THE GENERAL SERVICES ADMINISTRATION'S (GSA)
INVITATION FOR BIDS (IFB) 7PR-W-69623/3P/7AB. FITCHBURG WAS AN
UNSUCCESSFUL BIDDER UNDER THE SUBJECT SOLICITATION.
THE IFB WAS ISSUED ON APRIL 21, 1972, BY GSA, REGION 7, AT FORT
WORTH, TEXAS, AND COVERED A REQUIREMENTS CONTRACT FOR 18 ITEMS,
CONSISTING OF TAPE AND PAPER, COMPUTING AND RECORDING, FOR THE PERIOD
FROM AUGUST 1, 1972, OR DATE OF AWARD, WHICHEVER WAS LATER, THROUGH JULY
31, 1973. BIDS WERE OPENED ON MAY 24, 1972, AND NASHUA CORPORATION
RECEIVED AWARDS ON ITEMS 10 AND 14 ON JULY 12, 1972, AND JULY 18, 1972,
RESPECTIVELY, SINCE IT WAS THE LOW RESPONSIVE BIDDER ON THOSE TWO ITEMS.
YOUR BID WAS THE HIGHEST ON ITEMS 10 AND 14. ALTHOUGH YOU WERE THE LOW
BIDDER ON ITEMS 7, 8 AND 16, YOUR BID WAS REJECTED AS NONREPONSIVE.
BY LETTER DATED JULY 19, 1972, YOU PROTESTED TO THE PROCURING
ACTIVITY AGAINST AWARD TO OTHER THAN FITCHBURG ON ITEMS 10 AND 14, AND
PROTESTED AGAINST THE DETERMINATION OF NONRESPONSIVENESS OF ITS BID. BY
LETTER DATED JULY 27, 1972, THE CONTRACTING OFFICER, MR. C. R. ROGER,
ANSWERED THE LETTER OF PROTEST, STATING GSA'S POSITION THAT FITCHBURG'S
BID WAS CONSIDERED NONRESPONSIVE BECAUSE THE BID TRANSMITTAL LETTER
CONTAINED AN EXCEPTION TO A MATERIAL PROVISION OF THE SOLICITATION.
THEREAFTER, BY LETTER DATED AUGUST 3, 1972, YOU PROTESTED TO OUR OFFICE.
THE FIRST GROUND OF YOUR PROTEST IS THAT FITCHBURG'S BID SHOULD NOT
HAVE BEEN REJECTED AS NONRESPONSIVE. SINCE YOU WERE NOT THE LOW BIDDER
ON ITEMS 10 AND 14, THE QUESTION OF THE RESPONSIVENESS OF YOUR BID IS
NOT DETERMINATIVE OF YOUR ENTITLEMENT TO AN AWARD FOR THOSE ITEMS.
FURTHERMORE, WE UNDERSTAND THAT SUBSEQUENT TO YOUR PROTEST TO OUR OFFICE
YOU WERE AWARDED A NEGOTIATED CONTRACT FOR THE ITEMS ON WHICH YOU WERE
LOW UNDER THE SUBJECT PROCUREMENT. IN THESE CIRCUMSTANCES WE DO NOT
BELIEVE THAT THIS IS AN ISSUE WHICH WE SHOULD CONSIDER AT THIS POINT.
YOUR SECOND GROUND OF PROTEST IS THAT, WITH RESPECT TO ITEMS 10 AND
14, THE IFB REQUIREMENT THAT THE "IMAGE PRODUCED SHALL BE EQUAL AS TO
CONTRAST AND LEGIBILITY AS TIMEFAX NDA WHEN TESTED ON ZEROX TELECOPIER"
WAS MISLEADING. YOU STATE THAT FITCHBURG IS THE REGISTERED OWNER OF THE
TRADEMARK, "TIMEFAX NDA," AS WELL AS THE DEVELOPER AND MANUFACTURER OF
THAT RECORDING PAPER; THAT TIMEFAX NDA PAPER WAS NOT DEVELOPED FOR USE
WITH THE XEROX TELECOPIER; THAT WHEN SO USED, TIMEFAX NDA PRODUCES AN
IMAGE THAT IS INFERIOR TO TIMEFAX NDK, ANOTHER PRODUCT DEVELOPED AND
MANUFACTURED BY FITCHBURG; AND THAT, THEREFORE, THE REFERENCE TO
TIMEFAX NDA AND ITS USE WITH THE TELECOPIER CREATED AN AMBIGUITY.
FINALLY, YOU CONTEND THAT NASHUA'S PRODUCT, E-422, IS NOT EQUAL AS TO
CONTRAST AND LEGIBILITY TO THE TIMEFAX NDA PAPER.
IN CONNECTION WITH YOUR CLAIM THAT THE SPECIFICATIONS WERE
MISLEADING, IT IS THE POSITION OF OUR OFFICE THAT PROTESTS AGAINST
ALLEGED IMPROPRIETIES IN THE SPECIFICATIONS WHICH ARE APPARENT PRIOR TO
BID OPENING MUST BE FILED PRIOR TO THE OPENING OF THE BIDS. A BIDDER
WHO PARTICIPATES IN A PROCUREMENT WITHOUT OBJECTION THROUGH THE POINT OF
BID OPENING MUST BE DEEMED TO HAVE ACQUIESCED IN THE TERMS AND
CONDITIONS AS SET OUT IN THE INVITATION. 50 COMP. GEN. 193, 200
(1970). THIS RULE IS CLEARLY SET OUT AT 4 CFR 20.2, WHICH IS PART OF
THE GENERAL ACCOUNTING OFFICE INTERIM BID PROTEST PROCEDURES AND
STANDARDS. WE, THEREFORE, CONSIDER YOUR PROTEST AFTER AWARD CONCERNING
THE SPECIFICATIONS TO BE UNTIMELY AND NOT FOR OUR CONSIDERATION.
WITH REGARD TO YOUR CLAIM THAT WHEN USING THE XEROX TELECOPIER, THE
NASHUA E-422 PAPER'S IMAGE IS NOT EQUAL IN CONTRAST AND LEGIBILITY TO
THE TIMEFAX NDA PAPER'S IMAGE, OUR OFFICE HAS LONG HELD THAT IT IS THE
PROVINCE OF THE PROCURING AGENCY TO DRAFT SPECIFICATIONS AND TO
DETERMINE WHETHER THE ARTICLES OFFERED CONFORM TO THE SPECIFICATIONS.
17 COMP. GEN. 554, 557 (1938); 50 COMP. GEN. 193, 199 (1970). IN SUCH
MATTERS INVOLVING A DIFFERENCE OF EXPERT TECHNICAL OPINION, WE WILL
ACCEPT THE JUDGMENT OF THE TECHNICAL PERSONNEL OF THE AGENCY INVOLVED,
UNLESS SUCH JUDGMENT IS SHOWN TO BE CLEARLY IN ERROR. 49 COMP. GEN.
195, 198 (1969). BASED UPON OUR EXAMINATION OF THE RECORD, INCLUDING
THE RESULTS OF LABORATORY TESTS CONDUCTED BY GSA PRIOR TO AWARD
INDICATING THE EQUALITY OF E-422 PAPER FOR BOTH ITEMS 10 AND 14, WE
CANNOT CONCLUDE THAT GSA'S TECHNICAL DETERMINATION IS ERRONEOUS.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176845(1), DEC 26, 1972
BID PROTEST - MISTAKE IN BID - BIDDER'S RESPONSIBILITY - COLLUSION
DECISION DENYING THE PROTEST OF KLEEN-RITE JANITORIAL SERVICE, INC.,
AGAINST AWARD OF A CONTRACT TO EITHER C. G. ASHE ENTERPRISES OR
DYNETERIA, INC., UNDER AN IFB ISSUED AT FT. MONROE, VA., FOR CUSTODIAL
SERVICES.
WHEN A LOW BIDDER CONFIRMS HIS BID PRICE AFTER BEING NOTIFIED OF A
POSSIBLE MISTAKE, AND A PRE-AWARD SURVEY DISCLOSES NO EVIDENCE OF
POSSIBLE MISTAKE AND INDICATES THAT THE LOW BIDDER IS CAPABLE OF MEETING
THE FINANCIAL AND OTHER COMMITMENTS NECESSARY TO COMPLETE A CONTRACT,
GAO CANNOT CONCLUDE THAT THE BID PRICE WAS ERRONEOUS OR THAT THE BIDDER
DID NOT HAVE SUFFICIENT FINANCIAL RESOURCES. SEE B-171794, MAY 21,
1971. MOREOVER, THE MATTER OF OVERALL RESPONSIBILITY OF A SUCCESSFUL
BIDDER IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER AND
WILL NOT BE QUESTIONED UNLESS CLEARLY ARBITRARY OR WITHOUT ANY
REASONABLE SUPPORT. B-170130, SEPTEMBER 8, 1970.
FURTHERMORE, ASPR 1-115 IS NOT VIOLATED SOLELY BY REASON OF A
FRATERNAL RELATIONSHIP BETWEEN THE BIDDERS.
TO FRIED, FRANK, HARRIS, SHRIVER AND KAMPELMAN:
REFERENCE IS MADE TO THE PROTEST OF KLEEN-RITE JANITORIAL SERVICE,
INCORPORATED (KLEEN-RITE), AGAINST AWARD TO EITHER C. G. ASHE
ENTERPRISES (ASHE) OR DYNETERIA, INCORPORATED, UNDER INVITATION FOR BIDS
(IFB) DABB25-73-B-0001, ISSUED AT FORT MONROE, VIRGINIA, ON JULY 21,
1972, BY THE DEPARTMENT OF THE ARMY.
THE IFB WAS ISSUED FOR THE FURNISHING OF ALL PLANT, LABOR, TOOLS,
EQUIPMENT, AND SUPERVISION IN PERFORMANCE OF ALL OPERATIONS TO PROVIDE
COMPLETE CUSTODIAL SERVICES IN ADMINISTRATIVE AREAS AT FORT MONROE FOR
THE PERIOD SEPTEMBER 1972 THROUGH AUGUST 1973. UPON OPENING AND
EVALUATION OF THE BIDS RECEIVED ON AUGUST 22, 1972, ASHE WAS THE
APPARENT LOW BIDDER AT $12,908.79 PER MONTH LESS 3 1/2 PERCENT DISCOUNT,
DYNETERIA WAS THIRD AT $17,706.21 PER MONTH LESS 18 1/2 PERCENT
DISCOUNT, AND KLEEN-RITE WAS FOURTH LOW AT $15,726.83 PER MONTH LESS 8
PERCENT DISCOUNT. THE SECOND LOW BID WAS REJECTED AS NONRESPONSIVE. ON
AUGUST 25 A TELEGRAM WAS RECEIVED BY THE CONTRACTING OFFICER FROM YOUR
FIRM PROTESTING ON BEHALF OF KLEEN-RITE AGAINST AWARD TO ASHE OR
DYNETERIA ON GROUNDS OF RESPONSIVENESS AND RESPONSIBILITY. ON SEPTEMBER
19, 1972, WE WERE ADVISED THAT AWARD WAS BEING MADE TO ASHE BASED UPON A
DETERMINATION PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR)
2-407.8(B)(3)(III) THAT A PROMPT AWARD WILL BE ADVANTAGEOUS TO THE
GOVERNMENT.
IN YOUR LETTER OF AUGUST 24, 1972, TO OUR OFFICE, YOU STATE THAT YOU
HAVE REASON TO BELIEVE THAT ASHE MADE A MISTAKE IN ITS BID, RESULTING IN
AN UNREASONABLY LOW PRICE. YOU ALSO QUESTION THE SUBMISSION OF BIDS BY
ASHE AND BY B. D. ASHE, INCORPORATED (ANOTHER BIDDER), THE PRESIDENT OF
WHICH IS THE BROTHER OF ASHE'S PRESIDENT, C. G. ASHE. IN YOUR LETTER OF
SEPTEMBER 5, 1972, YOU STATE THAT ASHE'S PRICE IS SOME 20 PERCENT LOWER
THAN DYNETERIA'S AND KLEEN-RITE'S. YOU CONTEND THAT ASHE CANNOT PERFORM
AT ITS BID PRICE WITHOUT INCURRING A SUBSTANTIAL LOSS, AND THAT ASHE'S
PRICE INDICATES EITHER THAT ASHE DOES NOT UNDERSTAND THE COMPLEXITY OF
THE WORK TO BE PERFORMED UNDER THE CONTRACT OR THAT ASHE MADE A SERIOUS
MISTAKE IN COMPUTING ITS BID PRICE. IN EITHER EVENT YOU QUESTION
WHETHER ASHE MEETS THE RESPONSIBILITY REQUIREMENTS OF ASPR 1-903.1(I),
RELATING TO ADEQUATE FINANCIAL RESOURCES. A QUESTION IS ALSO RAISED AS
TO ASHE'S RESPONSIBILITY BASED UPON KLEEN-RITE'S INFORMATION THAT ASHE
IS PRIMARILY A "GROUNDS MAINTENANCE CONTRACTOR" AND THAT ASHE'S
EXPERIENCE IN PERFORMING CUSTODIAL SERVICES CONTRACTS OF ANY CONSEQUENCE
IS VIRTUALLY NON-EXISTENT. THEREFORE, YOU BELIEVE THAT ASHE MAY NOT
MEET THE REQUIREMENTS OF ASPR 1-903.1(II) AND ASPR 1-903.2(A), RELATING
TO THE ABILITY TO COMPLY WITH THE PERFORMANCE SCHEDULE AND HAVING THE
NECESSARY ORGANIZATION AND EQUIPMENT, RESPECTIVELY. FINALLY, IN
CONNECTION WITH THE RELATIONSHIP BETWEEN C. G. ASHE AND B. D. ASHE, YOU
STATE THAT THERE IS A POSSIBILITY OF A VIOLATION OF THE NONCOLLUSIVE
BIDDING REQUIREMENTS SET FORTH IN ASPR 1-115, WHICH WOULD PRECLUDE AN
AWARD TO ASHE.
ON SEPTEMBER 21, 1972, THIS OFFICE WAS FURNISHED AN ADMINISTRATIVE
REPORT PREPARED BY THE DEPARTMENT OF THE ARMY. INCLUDED IN THIS REPORT
TO SUPPORT THE DEPARTMENT'S RECOMMENDATION THAT THE PROTEST BE DENIED IS
DOCUMENTATION RESPONSIVE TO EACH OF YOUR CONTENTIONS.
BY LETTERS DATED AUGUST 28, 1972, TO THE CONTRACTING OFFICER, MR. C.
G. ASHE CONFIRMED AND RECONFIRMED THAT HE HAD REVIEWED HIS BID AND THAT
IT WAS CORRECT AND IN ORDER. AS A RESULT OF A PRE-AWARD SURVEY
CONDUCTED ON AUGUST 29, 1972, BY THE PROCUREMENT DIVISION, FORT MONROE,
IT WAS DETERMINED THAT C. G. ASHE HAS THE FINANCIAL ABILITY, INCLUDING
THE BACKING OF VIRGINIA NATIONAL BANK OF HAMPTON, VIRGINIA, TO MEET THE
OBLIGATIONS NECESSARY TO PROPERLY PERFORM THE CONTRACT. FURTHERMORE,
THE CONTRACTING OFFICER FOUND THE UNIT PRICE OF $.03 PER SQUARE FOOT PER
MONTH BID BY ASHE TO BE FAIR AND REASONABLE BASED UPON THE AVERAGE UNIT
PRICE PER SQUARE FOOT PER MONTH OF $.041 OBTAINED FROM THE BIDS, THE
GOVERNMENT'S ESTIMATE OF $.033 AND THE PREVIOUS CONTRACT OF $.0299, WITH
KLEEN-RITE.
WHEN A LOW BIDDER CONFIRMS HIS BID PRICE AFTER BEING NOTIFIED OF A
POSSIBLE MISTAKE AND A PRE-AWARD SURVEY DISCLOSES NO EVIDENCE OF
POSSIBLE MISTAKE AND INDICATES THAT THE LOW BIDDER IS CAPABLE OF MEETING
FINANCIAL AND OTHER COMMITMENTS NECESSARY TO COMPLETE A CONTRACT, THERE
IS NO BASIS FOR OUR OFFICE TO CONCLUDE THAT THE BID PRICE WAS COMPUTED
ERRONEOUSLY OR THAT THE BIDDER LACKS THE NECESSARY FINANCIAL RESOURCES
TO PERFORM THE CONTRACT. SEE B-171794, MAY 21, 1971; B-175979, JULY
26, 1972.
WITH RESPECT TO YOUR CONTENTION THAT ASHE MAY NOT BE RESPONSIBLE
WITHIN ASPR 1-903.1(II) AND ASPR 1-903.2(A), IT WAS DETERMINED AS A
RESULT OF THE PRE-AWARD SURVEY THAT ASHE HAS PERSONNEL WITHIN ITS
ORGANIZATION TO PROVIDE THE NECESSARY SUPERVISION AND EXPERTISE TO
PERFORM IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE
SOLICITATION. IN ADDITION, IT WAS DETERMINED THAT SINCE THE MAJORITY OF
PERSONNEL OTHER THAN SUPERVISORS ARE PART-TIME EMPLOYEES, THE EMPLOYEES
PRESENTLY EMPLOYED BY KLEEN-RITE ARE AVAILABLE TO ASHE; THAT THESE
EMPLOYEES ARE EXPERIENCED, HAVING WORKED FOR KLEEN-RITE FOR AS MUCH AS
THREE YEARS; AND THAT THE COMPANY HAS ADEQUATE EQUIPMENT AND SUPPLIES
ON HAND TO PERFORM AS REQUIRED.
OUR OFFICE HAS CONSISTENTLY HELD THAT THE MATTER OF THE OVERALL
RESPONSIBILITY OF THE SUCCESSFUL BIDDER TO PERFORM THE RESULTING
CONTRACT IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER,
WHOSE DECISION WILL NOT BE QUESTIONED UNLESS CLEARLY ARBITRARY OR
WITHOUT ANY REASONABLE SUPPORT. B-170130, SEPTEMBER 8, 1970. ALTHOUGH
YOU REPORT THAT ASHE'S EXPERIENCE IN PERFORMING CUSTODIAL SERVICE
CONTRACTS IS VIRTUALLY NON-EXISTENT, WE FIND THAT THE RECORD SUPPORTS
THE CONTRACTING OFFICER'S DETERMINATION OF ASHE'S RESPONSIBILITY.
AS TO YOUR CLAIM THAT THERE IS A POSSIBLE VIOLATION OF ASPR 1-115, C.
G. ASHE'S LETTER OF AUGUST 28, 1972, CONTAINS A STATEMENT THAT OTHER
THAN THE FRATERNAL RELATIONSHIP THERE IS NO CONNECTION BETWEEN C. G.
ASHE AND B. D. ASHE; THAT THE BID WAS PREPARED INDEPENDENTLY BY C. G.
ASHE WITHOUT DISCUSSION WITH OR ASSISTANCE, OR ANY OTHER ELEMENT OF
CONSIDERATION, FROM B. D. ASHE; AND THAT THE BID WAS SUBMITTED IN
ACCORDANCE WITH THE TERMS OF THE SOLICITATION. FURTHERMORE, C. G.
ASHE'S SIGNED BID CONTAINED THE CERTIFICATE OF INDEPENDENT PRICE
DETERMINATION PRESCRIBED FOR INCLUSION BY ASPR 1-115. IN THESE
CIRCUMSTANCES, WE FIND NO MERIT TO KLEEN-RITE'S ALLEGATION OF A POSSIBLE
VIOLATION OF THIS REGULATION BASED SOLELY UPON THE FRATERNAL
RELATIONSHIP BETWEEN THESE TWO INDIVIDUALS AND WITHOUT ANY OTHER
SUPPORT.
ACCORDINGLY, THE PROTEST OF KLEEN-RITE AGAINST THE AWARD TO ASHE IS
DENIED. IN VIEW THEREOF, THERE IS NO NEED TO CONSIDER KLEEN-RITE'S
PROTEST AGAINST AWARD TO DYNETERIA. ENCLOSED IS A COPY OF OUR LETTER OF
TODAY TO THE SECRETARY OF THE ARMY CONCERNING ASHE'S PRIOR EXPERIENCE.
B-176845(2), DEC 26, 1972
(NO 2 LINE MATERIAL)
(NO 3 LINE MATERIAL)
TO MR. SECRETARY:
ENCLOSED IS A COPY OF OUR DECISION OF TODAY DENYING THE PROTEST OF
KLEEN-RITE JANITORIAL SERVICE, INCORPORATED, AGAINST AWARD TO C. G. ASHE
ENTERPRISES (ASHE), UNDER INVITATION FOR BIDS NO. DABB25-73-B-0001,
ISSUED BY FORT MONROE, VIRGINIA, ON JULY 21, 1972.
KLEEN-RITE ALLEGED THAT ASHE COULD NOT SUCCESSFULY COMPLY WITH THE
PERFORMANCE SCHEDULE BECAUSE ASHE WAS PRIMARILY A GROUNDS MAINTENANCE
CONTRACTOR AND ITS EXPERIENCE IN PERFORMING CUSTODIAL SERVICES CONTRACTS
OF ANY CONSEQUENCE WAS VIRTUALLY NONEXISTENT. THE CONTRACTING OFFICER
DETERMINED, HOWEVER, THAT ASHE WAS A RESPONSIBLE BIDDER ON THE BASIS
THAT THE EMPLOYEES PRESENTLY EMPLOYED ON THE SITE ARE AVAILABLE TO ASHE;
THAT THESE EMPLOYEES ARE EXPERIENCED; THAT ASHE HAS ADEQUATE EQUIPMENT
AND SUPPLIES ON HAND TO PERFORM AS REQUIRED; AND THAT ASHE HAS
PERFORMED IN A SATISFACTORY MANNER UNDER A SIMILAR CONTRACT AT LANGLEY
AIR BASE. AWARD WAS SUBSEQUENTLY MADE TO ASHE.
IT HAS COME TO OUR ATTENTION THAT WHILE C. G. ASHE ENTERPRISES,
INCORPORATED, MAY HAVE PERFORMED A NUMBER OF GROUND MAINTENANCE
CONTRACTS AT LANGLEY, THE CONTRACTOR HAS PERFORMED ONLY ONE CUSTODIAL
CONTRACT AT THAT INSTALLATION APPROXIMATING LESS THAN ONE MAN-YEAR OF
EFFORT VALUED AT $4,200. WE DO NOT CONSIDER SUCH A CONTRACT TO BE
SIMILAR IN SCOPE TO THE INSTANT CONTRACT. HOWEVER, BECAUSE OF THE OTHER
FACTORS CONSIDERED IN THE DETERMINATION THAT ASHE WAS A RESPONSIBLE
BIDDER FOR THE INSTANT PROCUREMENT, WE COULD NOT CONCLUDE THAT THE
CONTRACTING OFFICER'S DETERMINATION WAS ARBITRARY OR THAT THE AWARD WAS
IMPROPER.
B-177106, DEC 26, 1972
CIVILIAN PERSONNEL - TRAVEL - INTERRUPTED LEAVE - PER DIEM
DECISION ALLOWING IN PART THE CLAIM OF HERMAN W. SHEFFER FOR TRAVEL
PERFORMED AS AN EMPLOYEE OF THE BUREAU OF MINES.
WHEN IT WAS KNOWN PRIOR TO THE GRANTING OF EXTENDED LEAVE THAT IT
WOULD BE NECESSARY TO INTERRUPT SUCH LEAVE PERIOD AND TRAVEL WAS
AUTHORIZED FROM PLACE OF LEAVE TO HEADQUARTERS AND RETURN, REIMBURSEMENT
MAY BE MADE FOR THE TRAVEL EXPENSES INVOLVED. SEE B-168415, DECEMBER 9,
1969. HOWEVER, AN EMPLOYEE IS NOT ENTITLED TO PER DIEM IN LIEU OF
SUBSISTENCE AT HIS HEADQUARTERS. ALSO, IF THE EMPLOYEE'S TRAVEL STATUS
IS LESS THAN 6 HOURS, HE IS NOT ENTITLED TO PER DIEM FOR TRAVEL TIME.
SEE SGTR, PARAGRAPH 6.6D(1).
TO MR. JOSEPH A. PAGLIASOTTI:
WE REFER FURTHER TO YOUR LETTER OF SEPTEMBER 20, 1972, WHICH
TRANSMITTED FOR DECISION A VOUCHER FOR MR. HERMAN W. SHEFFER IN THE
AMOUNT OF $81.11 FOR TRAVEL PERFORMED ON JUNE 21, 1972, AS AN EMPLOYEE
OF YOUR AGENCY.
YOU STATE MR. SHEFFER WAS IN A LEAVE STATUS FROM JUNE 19-30, 1972.
THE COPY OF THE APPLICABLE TRAVEL ORDERS ISSUED JUNE 7, 1972, PRIOR TO
MR. SHEFFER'S VACATION SHOWS THAT WHILE HE WOULD BE ON LEAVE AT PENN
YAN, NEW YORK, IT WOULD BE NECESSARY FOR HIM TO RETURN TO HIS OFFICIAL
DUTY STATION IN PITTSBURGH, PENNSYLVANIA, TO ATTEND AN INTERSTATE MINING
COMPACT COMMISSION MEETING ON JUNE 21, 1972. IT APPEARS IT WAS
DETERMINED THAT NOTWITHSTANDING THE FACT MR. SHEFFER WOULD BE ON
APPROVED LEAVE, IT WOULD BE ADVANTAGEOUS TO THE GOVERNMENT TO HAVE HIM
INTERRUPT HIS LEAVE FOR THE PURPOSE OF ATTENDING THE MEETING AT HIS
HEADQUARTERS. THE ORDERS IN ACCORDANCE WITH SUCH DETERMINATION PROVIDED
FOR TRAVEL TO PITTSBURGH AND RETURN TO PENN YAN. YOU HAVE DISALLOWED
PAYMENT BASED ON THE DECISIONS REPORTED AT 24 COMP. GEN. 443 (1944) AND
39 ID. 611 (1960).
WHERE AS IN THE INSTANT CASE IT WAS KNOWN PRIOR TO THE GRANTING OF
EXTENDED LEAVE THAT IT WOULD BE NECESSARY TO INTERRUPT SUCH LEAVE PERIOD
AND TRAVEL WAS AUTHORIZED FROM PLACE OF LEAVE TO HEADQUARTERS AND
RETURN, WE HAVE HELD THAT REIMBURSEMENT MAY BE MADE FOR THE TRAVEL
EXPENSES INVOLVED. SEE B-168415, DECEMBER 9, 1969, AND B-158681, MARCH
31, 1966, COPIES ENCLOSED.
AN EMPLOYEE IS NOT ENTITLED TO PER DIEM IN LIEU OF SUBSISTENCE AT HIS
HEADQUARTERS. ALSO, SINCE MR. SHEFFER WAS IN A TRAVEL STATUS LESS THAN
6 HOURS, HE IS NOT ENTITLED TO PER DIEM FOR TRAVEL TIME. SEE PARAGRAPH
6.6D(1), STANDARDIZED GOVERNMENT TRAVEL REGULATIONS.
THE VOUCHER WHICH IS RETURNED HEREWITH MAY BE CERTIFIED FOR PAYMENT
WITH EXCEPTION OF THE AMOUNT CLAIMED FOR PER DIEM.
B-177192, DEC 26, 1972
CIVILIAN PERSONNEL - TRAVEL ON FOREIGN-FLAG AIRLINES - PENALTY
PROVISIONS
DECISION DENYING THE VALIDITY OF PENALTY ASSESSMENTS AGAINST JOHN C.
ELY AND CHARLES B. THOMSON, EMPLOYEES OF THE AGENCY FOR INTERNATIONAL
DEVELOPMENT, FOR THE COST OF AIRLINE FARE FOR TRAVEL PERFORMED ON
FOREIGN-FLAG AIRLINES.
SINCE 6 FAM 134.6, WHICH WAS THE SOLE AUTHORITY FOR THE ASSESSMENT OF
SUCH MONETARY PENALTIES AGAINST EMPLOYEES SUBJECT TO THE FOREIGN SERVICE
TRAVEL REGULATIONS, HAS BEEN ELIMINATED BY TRANSMITTAL LETTER GS-152,
APRIL 14, 1971, ANY ASSESSMENT OF PENALTIES FOR TRAVEL PERFORMED
SUBSEQUENT TO APRIL 14, 1971, IS IMPROPER.
TO MR. RICHARD J. QUIRK:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 8, 1972,
REQUESTING OUR DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN BY YOU
WHERE EMPLOYEES OF YOUR AGENCY OR THEIR DEPENDENTS, WHILE IN AUTHORIZED
FOREIGN SERVICE TRAVEL STATUS, TRAVELED ABOARD FOREIGN-FLAG AIR CARRIERS
SUBSEQUENT TO THE AMENDMENT OF THE FOREIGN SERVICE TRAVEL REGULATIONS
CONCERNING THE USE OF AMERICAN-FLAG AIRLINES. THE EMPLOYEES INVOLVED
HAVE BEEN BILLED FOR THE COST OF THE AIRLINE FARE FOR TRAVEL PERFORMED
ON FOREIGN-FLAG AIRLINES, NOTWITHSTANDING THE PENALTY PROVISIONS AS
FORMERLY CONTAINED IN THE REGULATIONS HAVE BEEN DELETED.
YOU REQUEST OUR DECISION IN THE MATTER AND STATE THERE IS AN
ADMINISTRATIVE DIFFERENCE OF OPINION AS TO WHETHER DR. JOHN C. ELY AND
MR. CHARLES B. THOMSON, EMPLOYEES OF YOUR AGENCY, ARE LIABLE FOR THE
AMOUNTS BILLED. THE CASES INVOLVE THE APPLICATION OF SECTION 134 OF THE
UNIFORM STATE/AID/USIA FOREIGN SERVICE TRAVEL REGULATIONS, WHICH APPEAR
IN VOLUME 6, FOREIGN AFFAIRS MANUAL (FAM), AND THE QUESTIONS IN THE
MATTER ARISE IN VIEW OF AN AMENDMENT EFFECTIVE APRIL 14, 1971, WHICH
REMOVED THE PENALTY FOR FAILURE TO USE AMERICAN AIRLINES. THE TRAVEL
HERE INVOLVED OCCURRED SUBSEQUENT TO THE AMENDMENT.
THE FILE SUBMITTED BY YOU INDICATES THAT DR. ELY WAS BILLED $397 FOR
HIS USE OF A FOREIGN-FLAG AIRLINE ON A SEGMENT OF VISITATION TRAVEL IN
MAY 1971. HE WAS ALSO BILLED $605.45 FOR THE USE OF A FOREIGN-FLAG
AIRLINE BY HIS DEPENDENTS INCIDENT TO THEIR TRAVEL TO A SAFEHAVEN
RESIDENCE IN JUNE 1971. MR. THOMSON WAS HELD LIABLE FOR $163.40 FOR USE
OF A FOREIGN-FLAG AIRLINE ON A SEGMENT OF HOME LEAVE TRAVEL IN JUNE
1971. THE AMOUNT OF $144.55 WAS COLLECTED BY VOUCHER DEDUCTION AND MR.
THOMSON WAS BILLED FOR THE BALANCE OF $18.85. THE BILLINGS DO NOT
APPEAR TO INVOLVE EXCESS OR ADDITIONAL CHARGES, SUCH AS WOULD HAVE BEEN
INCURRED HAD INDIRECT TRAVEL BEEN PERFORMED.
IN SUPPORT OF THE VIEW THAT THE EMPLOYEES SHOULD BE HELD PERSONALLY
LIABLE YOU HAVE MADE REFERENCE TO 6 FAM 115, WHICH PROVIDES AS FOLLOWS:
"115 RESPONSIBILITY OF TRAVELER
"EMPLOYEES AND THEIR DEPENDENTS TRAVELING UNDER OFFICIAL TRAVEL
AUTHORIZATIONS ARE EXPECTED TO USE THE MOST DIRECT AND EXPEDITIOUS
ROUTES CONSISTENT WITH ECONOMY AND REASONABLE COMFORT AND SAFETY. BY
THE SAME TOKEN, EMPLOYEES ARE EXPECTED TO EXERCISE GOOD JUDGMENT IN THE
COSTS THEY INCUR FOR ALL OFFICIAL TRANSPORTATION EXPENSES AS IF THEY
WERE PERSONALLY LIABLE FOR PAYMENTS.
"CLAIMS AGAINST THE GOVERNMENT FOR TRAVEL COSTS INCURRED BY AN
EMPLOYEE ARE AUDITED AND APPROVED ACCORDING TO THIS PHILOSOPHY.
"THE TRAVELER IS RESPONSIBLE FOR THE CORRECT PERFORMANCE OF OFFICIAL
TRAVEL AND FOR THE PAYMENT OF ANY CHARGES INCURRED THROUGH FAILURE TO
COMPLY WITH THE GOVERNING REGULATIONS, REGARDLESS OF WHO MAY HAVE
ASSISTED HIM IN MAKING HIS TRAVEL ARRANGEMENTS AND FOR THE VALUE OF
TICKETS IN HIS POSSESSION PURCHASED WITH GOVERNMENT FUNDS OR THROUGH THE
EXCHANGE OF TRANSPORTATION REQUESTS."
WHILE A READING OF THE ABOVE, WITHOUT REFERENCE TO SECTION 134, COULD
REASONABLY LEAD TO THE CONCLUSION THAT AN EMPLOYEE'S FAILURE TO COMPLY
WITH ALL PROVISIONS OF THE REGULATIONS WOULD RESULT IN PERSONAL
FINANCIAL RESPONSIBILITY, IT IS OUR VIEW THAT SECTION 134 SPECIFICALLY
GOVERNING THE USE OF AMERICAN AND FOREIGN AIRLINES IS DETERMINATIVE OF
THE QUESTION RAISED BY YOUR SUBMISSION.
THE REGULATION, 6 FAM 134, PROVIDED PRIOR TO THE AMENDMENT IN
PERTINENT PART AS FOLLOWS:
"134.1 POLICY
"IT IS THE POLICY OF THE UNITED STATES GOVERNMENT, AND THE POLICY SET
FORTH BY CONCURRENT RESOLUTION OF THE SENATE AND HOUSE OF
REPRESENTATIVES (S. CON. RES. 53, 87TH CONG., 76 STAT. 1428), THAT ALL
OFFICIAL AIR TRAVEL BY GOVERNMENT EMPLOYEES AND THEIR DEPENDENTS BE
PERFORMED ON AMERICAN-FLAG CARRIERS EXCEPT WHEN OTHERWISE NECESSITATED
BY THE OFFICIAL BUSINESS CONCERNED OR TO AVOID UNREASONABLE DELAY,
EXPENSE, OR INCONVENIENCE. THE STANDARDS OUTLINED IN THESE REGULATIONS
FOR PERMISSIBLE TRAVEL ON FOREIGN-FLAG AIRLINES ARE PROVIDED, IN
GENERAL, FOR INSTANCES WHEN AMERICAN-FLAG AIRLINES ARE NOT AVAILABLE OR
EFFORTS TO UTILIZE AN AMERICAN-FLAG AIRLINE WOULD RESULT IN EXCESSIVE
DELAY, COST, OR PERSONAL INCONVENIENCE. FULL CONSIDERATION SHOULD BE
GIVEN TO THE INTENT OF THE ABOVE-STATED POLICY BEFORE ARRANGING TRAVEL
ON FOREIGN-FLAG AIRLINES.
"134.6 FAILURE TO COMPLY
"FAILURE TO COMPLY WITH THE PROVISIONS OF SECTIONS 134.2, 134.3, AND
134.4 WILL SUBJECT THE EMPLOYEE TO PERSONAL FINANCIAL RESPONSIBILITY AS
FOLLOWS:
"A. WHEN TRAVELERS USE FOREIGN-FLAG AIRLINES FOR THE COMPLETE
JOURNEY IN CONFLICT WITH THESE REGULATIONS, THEY WILL BE HELD
RESPONSIBLE FOR THE TOTAL DOLLAR VALUE OF THE TICKET INVOLVED.
"B. WHEN TRAVELERS USE FOREIGN-FLAG AIRLINES FOR ONE OR MORE
SEGMENTS OF A JOURNEY IN CONFLICT WITH THESE REGULATIONS, THEY WILL BE
HELD RESPONSIBLE FOR THE DOLLAR VALUE OF THE PUBLISHED AIRLINE FARE
APPLYING TO THE ROUTE SEGMENTS INVOLVED."
SECTION 134.2, 134.3 AND 134.4, CITED ABOVE, SET FORTH THE CONDITIONS
UNDER WHICH USE OF FOREIGN-FLAG AIRLINES WOULD BE PERMITTED.
IN ADDITION TO THE DELETION OF THE PENALTY PROVISIONS, THE FORMER
REQUIREMENT AS CONTAINED IN SECTION 134.5 FOR AN APPROVED WRITTEN
JUSTIFICATION FOR THE USE OF A FOREIGN AIRLINE WAS ALSO DELETED. UNDER
THE AMENDED REGULATION, IF A FOREIGN AIRLINE IS USED, THE EMPLOYEE IS
REQUIRED TO PREPARE A MEMORANDUM, STATING HIS JUSTIFICATION, AND ATTACH
IT TO HIS TRAVEL VOUCHER.
SENATE CONCURRENT RESOLUTION 53, 87TH CONGRESS, 76 STAT. 1428, CITED
AND EXPLAINED IN 6 FAM 134.1, QUOTED ABOVE, DOES NOT IMPOSE A PENALTY
FOR NONUSE OF AMERICAN AIRCRAFT. HOWEVER, THE AUTHORITY OF THE
DEPARTMENT OF STATE TO IMPOSE A PENALTY BY REGULATION HAS BEEN
RECOGNIZED AND APPLIED BY THIS OFFICE. SEE B-173858, OCTOBER 26, 1971,
AND DECEMBER 29, 1971, COPIES ENCLOSED.
ON APRIL 14, 1971, THE REGULATIONS WERE REVISED, AND INCLUDED IN THE
REVISION WAS THE ELIMINATION OF THE PENALTY PROVISIONS SET FORTH IN
SECTION 134.6. REGARDING THE REVISION TRANSMITTAL LETTER GS-152, APRIL
14, 1971, READS IN PERTINENT PART AS FOLLOWS:
"USE OF AMERICAN AND FOREIGN AIRLINES
"TO ALINE THE FOREIGN SERVICE TRAVEL REGULATIONS WITH THOSE OF OTHER
GOVERNMENT AGENCIES, SECTION 134 IS REVISED TO (A) ELIMINATE THE PENALTY
PROVISION AND (B) PERMIT MORE LATITUDE FOR INDIRECT TRAVEL.
"THESE CHANGES IN THE REGULATIONS ARE NOT RETROACTIVE; AND ANY
PENALTIES ASSESSED FOR UNAUTHORIZED USE OF A FOREIGN-FLAG AIRLINE FOR
TRAVEL PERFORMED BEFORE THE EFFECTIVE DATE OF THIS REVISION CANNOT BE
REVOKED ON THE BASIS OF THE CHANGES.
"THE POLICY CONCERNING USE OF FOREIGN-FLAG AIRLINES IS STATED IN
SECTION 134.1. IT IS EXPECTED THAT OFFICIAL TRAVELERS WILL MAKE MAXIMUM
USE OF AMERICAN-FLAG CARRIERS WHEN PLANNING THEIR TRAVEL."
SINCE THE SOLE AUTHORITY FOR THE MONETARY PENALTY FOR USE OF FOREIGN
AIRLINES BY EMPLOYEES SUBJECT TO THE FOREIGN SERVICE TRAVEL REGULATIONS
HAS NOW BEEN REMOVED, IT IS OUR VIEW THAT THE ASSESSMENT OF PENALTIES IS
IMPROPER FOR TRAVEL PERFORMED SUBSEQUENT TO THE APRIL 14, 1971,
AMENDMENTS.
IN VIEW OF THE ABOVE, THE COLLECTION OF AMOUNTS FROM EMPLOYEES OF
YOUR AGENCY WHEN THEY OR THEIR DEPENDENTS, AFTER APRIL 13, 1971,
PERFORMED TRAVEL ON FOREIGN-FLAG AIRLINES WAS UNAUTHORIZED. IT FOLLOWS
THAT THE BILLS OF COLLECTION STATED AGAINST MESSRS. ELY AND THOMSON AND
THOSE STATED AGAINST OTHER EMPLOYEES FOR TRAVEL ON FOREIGN-FLAG AIRLINES
AFTER APRIL 13, 1971, SHOULD BE CANCELED. COLLECTION MADE PURSUANT TO
SUCH CANCELLATIONS SHOULD BE REFUNDED TO THE EMPLOYEES INVOLVED. SINCE
THE REGULATION CHANGES OF APRIL 14, 1971, ARE NOT RETROACTIVE,
COLLECTION ACTION REGARDING UNAUTHORIZED TRAVEL ON FOREIGN-FLAG AIRLINES
PRIOR TO THAT DATE SHOULD NOT BE DISTURBED. SEE B-173858, OCTOBER 26,
1971. YOUR QUESTIONS ARE ANSWERED ACCORDINGLY.
THE ENCLOSURES SUBMITTED WITH YOUR LETTER ARE RETURNED.
B-177252, DEC 26, 1972
MILITARY PERSONNEL - PERMANENT STATION - PER DIEM - BASIC ALLOWANCE FOR
QUARTERS
DECISION DENYING THE CLAIM OF DOUGLAS C. ABRUZZO FOR PER DIEM FOR
DUTY PERFORMED AT MARINE BARRACKS, U.S. NAVAL BASE, PHILADELPHIA, PA.,
BUT DIRECTING PAYMENT TO HIM OF BASIC ALLOWANCE FOR QUARTERS (BAQ) FOR
THAT PERIOD.
PARAGRAPH 4020 OF THE MARINE CORPS PERSONNEL MANUAL PROVIDES THAT
WHEN PERSONNEL ARE HOSPITALIZED IN A U.S. SERVICE HOSPITAL, TRANSFER TO
AN APPROPRIATE MARINE CORPS ACTIVITY NEAR THE HOSPITAL MAY BE EFFECTED
BY SERVICE RECORDS AND DUTY AT THAT NEW STATION IS PERMANENT UNDER THE
MEANING OF JTR, PARAGRAPH M1150-10A. THEREFORE, PER DIEM MAY NOT BE
PAID FOR SUCH DUTY. HOWEVER, IN THIS CASE, SINCE GOVERNMENT QUARTERS
WERE UNAVAILABLE AT THE NEW PERMANENT STATION, BAQ SHOULD BE PAID FOR
THE PERIOD IN QUESTION.
TO MR. DOUGLAS W. ABRUZZO:
FURTHER REFERENCE IS MADE TO LETTER OF SEPTEMBER 26, 1972, FROM MR.
C. VALENTINE BATES FORWARDING YOUR APPEAL TO SETTLEMENT OF OUR
TRANSPORTATION AND CLAIMS DIVISION DATED JANUARY 20, 1972, WHICH
DISALLOWED YOUR CLAIM FOR PER DIEM FOR DUTY PERFORMED AT MARINE
BARRACKS, U. S. NAVAL BASE, PHILADELPHIA, PENNSYLVANIA, DURING THE
PERIOD FROM SEPTEMBER 25, 1970, THROUGH JANUARY 31, 1971.
THE RECORD DISCLOSES THAT WHILE ASSIGNED TO MARINE AIRCRAFT GROUP-31,
MARINE CORPS AIR STATION, BEAUFORT, SOUTH CAROLINA, YOU WERE
HOSPITALIZED AT THE U. S. NAVAL HOSPITAL, CHARLESTON, SOUTH CAROLINA,
REPORTING THERE MAY 29, 1970. BY ORDERS DATED JUNE 11, 1970, YOU WERE
TRANSFERRED TO THE U.S. NAVAL HOSPITAL, PHILADELPHIA, PENNSYLVANIA,
WHERE YOU WERE ADMITTED FOR TREATMENT ON JUNE 15, 1970. BY ORDERS DATED
SEPTEMBER 25, 1970, YOU WERE DISCHARGED FROM TREATMENT AND ORDERED TO
PROCEED IMMEDIATELY TO THE NAVAL BASE, PHILADELPHIA, PENNSYLVANIA, AND
REPORT TO THE COMMANDING OFFICER, MARINE BARRACKS, FOR DUTY AWAITING
APPEARANCE BEFORE A PHYSICAL EVALUATION BOARD. YOU REMAINED AT THE
MARINE BARRACKS, U. S. NAVAL BASE, PHILADELPHIA, UNTIL YOUR RELEASE FROM
ACTIVE DUTY ON FEBRUARY 1, 1971. GOVERNMENT QUARTERS WERE NOT AVAILABLE
WHILE ASSIGNED TO THE MARINE BARRACKS.
THE RECORD FURTHER SHOWS THAT BY ORDERS ISSUED AT MARINE CORPS AIR
STATION, BEAUFORT, SOUTH CAROLINA, ON JUNE 16, 1970, EFFECTIVE JUNE 18,
1970, YOU WERE TRANSFERRED BY SERVICE RECORDS FROM THE MARINE CORPS AIR
STATION, BEAUFORT, SOUTH CAROLINA, TO THE MARINE BARRACKS, U. S. NAVAL
HOSPITAL, CHARLESTON, SOUTH CAROLINA.
YOU CLAIMED PER DIEM FOR THE PERIOD FROM SEPTEMBER 25, 1970, THROUGH
JANUARY 31, 1971, ON THE PREMISE THAT YOUR ORDERS FOR DUTY AT THE MARINE
BARRACKS, U. S. NAVAL BASE, PHILADELPHIA, PENNSYLVANIA, "AWAITING
APPEARANCE BEFORE THE PHYSICAL EVALUATION BOARD" CLEARLY INDICATE DUTY
OF A TEMPORARY NATURE WHICH ENTITLED YOU TO PER DIEM TO COVER YOUR
EXPENSES. IN VIEW OF THE LONG PERIOD YOU WERE AT PHILDELPHIA AND SINCE
YOUR ORDERS DID NOT INDICATE THAT THE ORDERED DUTY WAS INTENDED TO BE A
TEMPORARY DUTY ASSIGNMENT, THE MARINE BARRACKS, U. S. NAVAL BASE,
PHILADELPHIA, WAS CONSIDERED TO BE A PERMANENT DUTY STATION; THERE
BEING NO AUTHORITY FOR PAYMENT OF PER DIEM AT A PERMANENT DUTY STATION,
YOUR CLAIM WAS DISALLOWED BY THIS OFFICE. ADDITIONALLY, THE MARINE
CORPS FINANCE CENTER HAS EXPRESSED THE OPINION THAT YOUR ORDERS
CONSTITUTE A PERMANENT CHANGE OF STATION BY SERVICE RECORDS.
A STATION MAY BE EITHER PERMANENT OR TEMPORARY, THE PERMANENT STATION
OF A MEMBER OF THE UNIFORMED SERVICES BEING REGARDED AS THE PLACE WHERE
HIS BASIC DUTY ASSIGNMENT IS PERFORMED. A PERMANENT STATION IS DEFINED
IN PARAGRAPH M1150-10A, JOINT TRAVEL REGULATIONS, AS THE POST OF DUTY OR
OFFICIAL STATION TO WHICH A MEMBER IS ASSIGNED OR ATTACHED FOR DUTY
OTHER THAN "TEMPORARY DUTY" OR "TEMPORARY ADDITIONAL DUTY." IT IS STATED
IN PARAGRAPH M3003-2A THAT THE TERM "TEMPORARY DUTY" MEANS DUTY AT ONE
OR MORE LOCATIONS OTHER THAN THE PERMANENT STATION AT WHICH A MEMBER
PERFORMS TEMPORARY DUTY UNDER ORDERS WHICH PROVIDE FOR FURTHER
ASSIGNMENT OR PENDING FURTHER ASSIGNMENT TO A NEW PERMANENT STATION OR
HIS RETURN TO THE OLD PERMANENT STATION UPON COMPLETION OF THE TEMPORARY
DUTY. TEMPORARY ADDITIONAL DUTY INVOLVES ONE JOURNEY AWAY FROM THE
MEMBER'S DUTY STATION IN THE PERFORMANCE OF PRESCRIBED DUTIES AT ONE OR
MORE PLACES AND DIRECT RETURN TO THE STARTING POINT UPON COMPLETION OF
SUCH DUTIES. SEE PARAGRAPH M3003-2B.
PARAGRAPH 4020 OF THE MARINE CORPS PERSONNEL MANUAL PROVIDES THAT
WHEN PERSONNEL ARE HOSPITALIZED IN A UNITED STATES SERVICE HOSPITAL,
TRANSFER OF A MARINE MAY BE EFFECTED TO THE APPROPRIATE MARINE CORPS
ACTIVITY NEAR THE HOSPITAL, BY SERVICE RECORDS. IN DECISION B-144900,
MARCH 27, 1961, COPY ENCLOSED, WE REFERRED TO A REPORT FROM THE OFFICE
OF THE COMMANDANT, U. S. MARINE CORPS, WHICH STATED THAT WHEN A MARINE
IS TRANSFERRED AS A PATIENT TO A HOSPITAL LOCATED AT SOME DISTANCE FROM
HIS PERMANENT STATION AND IT IS DETERMINED THAT TREATMENT WILL BE
PROLONGED, IT IS THE POLICY TO DIRECT A TRANSFER BY SERVICE RECORDS TO A
MARINE CORPS INSTALLATION NEAR THE HOSPITAL. WHEN THE MEMBER IS AGAIN
FIT FOR DUTY, HE IS DIRECTED BY THE HOSPITAL TO REPORT TO THIS
INSTALLATION FOR DUTY. ADDITIONALLY, IT WAS STATED THAT THE ACTIVITY TO
WHICH THE MARINE REPORTS FOR DUTY AFTER HOSPITALIZATION HAS ALWAYS BEEN
CONSIDERED TO BE HIS PERMANENT STATION AND TEMPORARY DUTY PER DIEM
ALLOWANCE NEVER HAS BEEN AUTHORIZED. ACCORDINGLY, IN THE ABOVE-CITED
DECISION WE HELD THAT WHEN THE MEMBER REPORTED FOR DUTY AT THE NEARBY
INSTALLATION, A PERMANENT CHANGE OF STATION WAS EFFECTUATED.
SINCE IN ACCORD WITH PARAGRAPH 4020 OF THE MANUAL, TRANSFER BY
SERVICE RECORDS WAS TO BE TO AN ACTIVITY NEAR THE SITE OF
HOSPITALIZATION, IT APPEARS THAT THE ORDER ISSUING AUTHORITY AT
BEAUFORT, SOUTH CAROLINA, WAS UNAWARE THAT YOU WERE HOSPITALIZED IN
PHILADELPHIA AT THAT TIME, OR THE ORDERS ISSUED JUNE 16, 1970, WOULD
HAVE PROVIDED FOR TRANSFER BY SERVICE RECORDS TO MARINE BARRACKS, U. S.
NAVAL STATION, PHILADELPHIA AND NOT TO THE CHARLESTON AREA.
ACCORDINGLY UPON YOUR DISCHARGE FROM TREATMENT ON SEPTEMBER 25, 1970,
YOU WERE ORDERED TO REPORT TO THE COMMANDING OFFICER, MARINE BARRACKS,
U. S. NAVAL BASE, PHILADELPHIA, FOR DUTY AND THAT PLACE BECAME YOUR NEW
PERMANENT STATION SINCE YOU WERE DETACHED FROM AND NEVER RETURNED TO
YOUR OLD PERMANENT STATION, MARINE CORPS AIR STATION, BEAUFORT, SOUTH
CAROLINA. PER DIEM IS NOT PAYABLE TO A MEMBER WHILE HE IS AT HIS
PERMANENT STATION. HENCE, THERE IS NO AUTHORITY FOR PAYMENT OF PER DIEM
DURING THE PERIOD CLAIMED AND THE SETTLEMENT OF JANUARY 20, 1972, IS
SUSTAINED.
AS NOTED ABOVE, GOVERNMENT QUARTERS WERE NOT AVAILABLE TO YOU WHILE
STATIONED AT THE MARINE BARRACKS, U. S. NAVAL BASE, PHILADELPHIA.
EXAMINATION OF YOUR PAY RECORDS DISCLOSES THAT YOU WERE NOT CREDITED
WITH BASIC ALLOWANCE FOR QUARTERS TO WHICH YOU WERE ENTITLED WHILE
RESIDING OFF BASE. ACCORDINGLY, OUR TRANSPORTATION AND CLAIMS DIVISION
IS THIS DAY BEING AUTHORIZED TO ISSUE A SETTLEMENT IN YOUR FAVOR FOR THE
AMOUNT OF BASIC ALLOWANCE FOR QUARTERS DUE FOR THE PERIOD FROM SEPTEMBER
25, 1970, THROUGH JANUARY 31, 1971, IF OTHERWISE CORRECT.
B-177276, DEC 26, 1972
CIVILIAN PERSONNEL - TRANSPORTATION OF HOUSEHOLD GOODS - TEMPORARY
APPOINTMENT
CONCERNING THE CLAIM OF FRANKLIN B. W. WOODBURY FOR REIMBURSEMENT OF
COSTS INCURRED IN TRANSPORTING HOUSEHOLD GOODS FROM ROLLA, MO., TO
MINNEAPOLIS, MINN., INCIDENT TO A TEMPORARY APPOINTMENT WHICH WAS LATER
MADE PERMANENT.
ALTHOUGH 5 U.S.C. 5723 AUTHORIZES PAYMENT OF TRAVEL AND
TRANSPORTATION EXPENSES ONLY IN CONNECTION WITH NEW APPOINTMENTS OR THE
ASSIGNMENT OF STUDENT TRAINEES TO PERMANENT POSITIONS, SEE B-166146,
JULY 11, 1969, THE AUTHORITY TO PAY SUCH EXPENSES IS NOT LIMITED TO
CASES IN WHICH AN OTHERWISE ELIGIBLE EMPLOYEE RECEIVES A PERMANENT
APPOINTMENT. THEREFORE, IF THE AGENCY CONCERNED GIVES ITS APPROVAL,
SUCH EXPENSES MAY BE REIMBURSED UNDER THE COMMUTED RATE SYSTEM, BASED
UPON THE EMPLOYEE'S TEMPORARY APPOINTMENT, OMB CIRCULAR NO. A-56,
SECTION 1.10, IF THE HOUSEHOLD GOODS WERE TRANSPORTED TO HIS OFFICIAL
STATION WITHIN 2 YEARS OF HIS TRANSFER. OMB CIRCULAR NO. A-56, SECTION
1.5B.
TO MR. JOSEPH A. PAGLIASOTTI:
WE REFER TO YOUR LETTER OF OCTOBER 13, 1972, BY WHICH YOU REQUEST OUR
DETERMINATION WHETHER MR. FRANKLIN B. W. WOODBURY MAY BE REIMBURSED FOR
THE COSTS HE INCURRED IN TRANSPORTATION OF HIS HOUSEHOLD GOODS FROM
ROLLA, MISSOURI, TO MINNEAPOLIS, MINNESOTA, IN THE CIRCUMSTANCES
DISCUSSED BELOW.
MR. WOODBURY WAS GIVEN A TEMPORARY APPOINTMENT NOT TO EXCEED ONE YEAR
AS A METALLURGIST AT THE BUREAU OF MINES, TWIN CITIES METALLURGY CENTER,
TWIN CITIES, MINNESOTA, ON OCTOBER 1, 1971. ALTHOUGH THE POSITION TO
WHICH HE WAS APPOINTED WAS DESIGNATED AS A MANPOWER SHORTAGE POSITION BY
THE CIVIL SERVICE COMMISSION UNDER THE AUTHORITY OF 5 U.S.C. 5723, MR.
WOODBURY WAS NOT AUTHORIZED TRAVEL AND TRANSPORTATION EXPENSES UNDER
THAT SECTION BECAUSE HE WAS NOT BEING GIVEN A PERMANENT APPOINTMENT.
HOWEVER, MR. WOODBURY INDICATES THAT HE WAS PROMISED REIMBURSEMENT OF
SUCH EXPENSES WHEN AND IF HE WAS GIVEN A PERMANENT APPOINTMENT. IN THE
CIRCUMSTANCES HE PUT HIS HOUSEHOLD GOODS IN STORAGE IN ROLLA, HIS PLACE
OF RESIDENCE AT THE TIME OF APPOINTMENT, AND HAD THEM SHIPPED TO THE
LOCALITY OF HIS OFFICIAL STATION SHORTLY AFTER HIS APPOINTMENT WAS MADE
PERMANENT ON JUNE 23, 1972.
MR. WOODBURY'S CLAIM FOR REIMBURSEMENT FOR STORAGE AND SHIPMENT OF
2,060 POUNDS OF HOUSEHOLD GOODS FROM ROLLA TO MINNEAPOLIS WAS NOT
ALLOWED INCIDENT TO THE CONVERSION OF HIS APPOINTMENT TO PERMANENT
BECAUSE AT THE TIME OF THE CONVERSION HE WAS ALREADY A RESIDENT IN THE
AREA OF HIS OFFICIAL STATION.
THE PROVISIONS OF 5 U.S.C. 5723 AUTHORIZE PAYMENT OF TRAVEL AND
TRANSPORTATION EXPENSES ONLY IN CONNECTION WITH NEW APPOINTMENTS OR THE
ASSIGNMENT OF STUDENT TRAINEES TO PERMANENT POSITIONS. SINCE MR.
WOODBURY WAS NOT A STUDENT TRAINEE AND SINCE NO CHANGE OF OFFICIAL
STATION WAS REQUIRED INCIDENT TO THE JUNE 23, 1972 CONVERSION,
REIMBURSEMENT OF TRAVEL AND TRANSPORTATION EXPENSES MAY NOT BE
PREDICATED ON THAT PERSONNEL ACTION. SEE B-166146, JULY 11, 1969, COPY
ENCLOSED.
WE NOTE, HOWEVER, THAT THE AUTHORITY TO PAY TRAVEL AND TRANSPORTATION
EXPENSES UNDER 5 U.S.C. 5723 AND SECTION 1.10 OF OFFICE OF MANAGEMENT
AND BUDGET CIRCULAR NO. A-56, REVISED AUGUST 17, 1971, IS NOT LIMITED TO
CASES IN WHICH AN OTHERWISE ELIGIBLE EMPLOYEE RECEIVES A PERMANENT
APPOINTMENT. SEE B-164720, AUGUST 5, 1968, COPY ENCLOSED. THE
ADMINISTRATIVE OFFICE CONCERNED HAS NOT INDICATED WHY TRAVEL AND
TRANSPORTATION REIMBURSEMENT WAS NOT AUTHORIZED UNDER 5 U.S.C. 5723 IN
CONNECTION WITH MR. WOODBURY'S ORIGINAL TEMPORARY APPOINTMENT AND IT IS
NOT CLEAR WHETHER THIS RESULTED FROM A BELIEF THAT SUCH REIMBURSEMENT
WAS NOT AUTHORIZED IN CONNECTION WITH TEMPORARY APPOINTMENTS OR FROM A
DETERMINATION THAT AUTHORIZATION OR APPROVAL OF THESE EXPENSES SHOULD BE
ISSUED ONLY AFTER A PERMANENT APPOINTMENT WAS MADE. IN EITHER CASE,
HOWEVER, SINCE REIMBURSEMENT OF EXPENSES UNDER 5 U.S.C. 5723 MAY BE
APPROVED AFTER THE TRAVEL AND TRANSPORTATION INVOLVED HAS TAKEN PLACE,
YOUR AGENCY MAY NOW APPROVE REIMBURSEMENT OF EXPENSES AS AUTHORIZED IN
CIRCULAR NO. A-56, BASED UPON THE TEMPORARY APPOINTMENT OF OCTOBER 1,
1971. IF SUCH APPROVAL IS ISSUED REIMBURSEMENT TO MR. WOODBURY FOR
TRANSPORTATION AND STORAGE OF HIS HOUSEHOLD GOODS UNDER THE COMMUTED
RATE SYSTEM WOULD BE PROPER SINCE HIS HOUSEHOLD GOODS WERE TRANSPORTED
TO HIS OFFICIAL STATION WITHIN THE 2-YEAR TIME LIMIT PRESCRIBED IN
SECTION 1.5B OF CIRCULAR NO. A-56.
THE CLAIMANT'S LETTER WITH ATTACHMENTS IS RETURNED FOR HANDLING IN
ACCORDANCE WITH THE ABOVE.
B-176857, DEC 22, 1972
CIVILIAN EMPLOYEE - PER DIEM ENTITLEMENT - EFFECTIVE DATE OF TRANSFER
DECISION REGARDING A COLLECTION VOUCHER TO RECOVER CERTAIN TRAVEL PER
DIEM PAID TO DWIGHT L. BANKS, AN EMPLOYEE OF THE INTERNAL REVENUE
SERVICE, FOR THE PERIOD MARCH 24, 1971, THROUGH APRIL 3, 1971.
WHEN AN EMPLOYEE PERFORMS A PERIOD OR PERIODS OF TEMPORARY DUTY AT A
DESIGNATED NEW OFFICIAL STATION BETWEEN THE TIME HE RECEIVES THE
TRANSFER ORDERS AND THEIR EFFECTIVE DATE, THE TRANSFER IS EFFECTIVE ON
THE DATE HE ACTUALLY ARRIVES AT THE NEW STATION, PROVIDING THE TEMPORARY
DUTY IS TERMINATED BY A RETURN TO THE OLD STATION ON OFFICIAL BUSINESS
PRIOR TO THE EFFECTIVE DATE OF THE TRANSFER. SEE B-139223, JUNE 15,
1959. IT APPEARS THAT WHEN MR. BANKS ARRIVED IN REDDING ON MARCH 24, A
LIMITED PERIOD OF TEMPORARY DUTY NOT EXTENDING TO APRIL 4 WAS INTENDED.
ACCORDINGLY, PER DIEM WAS NOT AUTHORIZED FOR ANY PERIOD AFTER THE DATE
ON WHICH IT BECAME APPARENT THAT MR. BANKS' DETAIL WOULD NOT BE
TERMINATED BY APRIL 4, AND COLLECTION OF SUCH PAYMENTS SHOULD BE
EFFECTED. PAYMENTS MADE PRIOR TO THAT DATE NEED NOT BE COLLECTED.
TO MR. F. C. FENTON:
WE REFER TO YOUR LETTER OF AUGUST 14, 1972, YOUR REFERENCE AD:FFV, BY
WHICH YOU REQUEST OUR DECISION AS TO WHETHER YOU MAY PROPERLY PROCESS
THE COLLECTION VOUCHER ENCLOSED TO RECOVER CERTAIN TRAVEL PER DIEM PAID
TO MR. DWIGHT L. BANKS, AN EMPLOYEE OF THE INTERNAL REVENUE SERVICE,
TREASURY DEPARTMENT FOR THE PERIOD MARCH 24, 1971, THROUGH APRIL 3,
1971, UNDER THE FACTS SET FORTH BELOW.
BY TRAVEL AUTHORIZATION DATED MARCH 2, 1971, MR. BANKS WAS ADVISED OF
HIS TRANSFER FROM LOS ANGELES, CALIFORNIA, TO REDDING, CALIFORNIA, TO BE
EFFECTIVE APRIL 4, 1971. HOWEVER, AFTER RECEIVING THOSE ORDERS MR.
BANKS WAS DETAILED TO REDDING BEGINNING MARCH 24, 1971, TO ASSIST THE
OFFICE THERE IN HANDLING A HEAVY WORKLOAD. IT IS INDICATED IN THE
MEMORANDUM OF THE SUPERVISOR INVOLVED, A COPY OF WHICH WAS FURNISHED
WITH YOUR LETTER, THAT THIS DETAIL WAS NOT EXPECTED TO EXTEND TO THE
DATE OF MR. BANKS' TRANSFER - PRESUMABLY HE WOULD HAVE RETURNED TO DUTY
IN LOS ANGELES PRIOR TO THE DATE OF TRANSFER HAD THE ORIGINAL INTENTION
BEEN CARRIED OUT. HOWEVER, THE HEAVY WORKLOAD IN REDDING DID NOT
SUBSIDE AS EXPECTED WITH THE RESULT THAT MR. BANKS CONTINUED ON DETAIL
IN THAT PLACE UNTIL THE EFFECTIVE DATE OF HIS TRANSFER. THERE IS NO
INDICATION IN THE MATERIALS PRESENTED OF THE DATE ON WHICH IT BECAME
APPARENT TO THE PERSONNEL INVOLVED, INCLUDING MR. BANKS, THAT HE WOULD
NOT BE RETURNED TO LOS ANGELES PRIOR TO THE EFFECTIVE DATE OF HIS
TRANSFER TO REDDING.
MR. BANKS SUBMITTED VOUCHERS AND WAS PAID PER DIEM AT THE APPLICABLE
RATE FOR THE PERIOD MARCH 24 THROUGH APRIL 3, 1971. THE COLLECTION
VOUCHER SUBMITTED IS FOR RECOVERY OF $183 REPRESENTING THE TRAVEL PER
DIEM ALLOWED HIM FROM 6 P.M. MARCH 24 THROUGH APRIL 3, 1971.
IT HAS BEEN HELD THAT WHEN A CIVILIAN EMPLOYEE IS TRANSFERRED TO A
PLACE AT WHICH HE IS ALREADY ON DUTY, THE TRANSFER IS EFFECTIVE ON THE
DATE HE RECEIVES NOTICE THEREOF. HOWEVER, IF AN EMPLOYEE IS TRANSFERRED
TO A PLACE WHERE HE IS NOT ON TEMPORARY DUTY, THE TRANSFER IS EFFECTIVE
ON THE DATE HE ACTUALLY ARRIVES AT THE NEW STATION. 23 COMP. GEN. 342
(1943). THE LATTER RULE HAS NOT BEEN APPLIED WHEN AN EMPLOYEE PERFORMS
A PERIOD OR PERIODS OF TEMPORARY DUTY AT HIS DESIGNATED NEW OFFICIAL
STATION BETWEEN THE TIME HE RECEIVES THE TRANSFER ORDERS AND THE STATED
EFFECTIVE DATE OF THOSE ORDERS IF SUCH PERIOD OR PERIODS OF TEMPORARY
DUTY ARE TERMINATED BY A RETURN TO THE OLD STATION ON OFFICIAL BUSINESS
PRIOR TO THE STATED EFFECTIVE DATE OF THE TRANSFER ORDERS. B-139223,
JUNE 15, 1959; B-135690, MAY 8, 1958, COPIES ENCLOSED.
ON THE BASIS OF THE FACTS PROVIDED IT APPEARS THAT WHEN MR. BANKS
ARRIVED IN REDDING ON MARCH 24, A LIMITED PERIOD OF TEMPORARY DUTY NOT
EXTENDING TO APRIL 4 WAS CONTEMPLATED. IN THE CIRCUMSTANCES IT MAY
REASONABLY BE CONSIDERED THAT HIS TRANSFER TO REDDING AND THE RESULTING
LOSS OF HIS RIGHT TO PER DIEM AT THAT PLACE DID NOT BECOME EFFECTIVE
WHEN HE ARRIVED THERE ON MARCH 24. HOWEVER, SINCE MR. BANKS HAD BEEN
ADVISED THAT HE WOULD BE TRANSFERRED TO REDDING IT APPEARS THAT HIS
TRANSFER TO THAT PLACE BECAME EFFECTIVE AND HIS RIGHT TO PER DIEM
TERMINATED WHEN IT BECAME APPARENT TO THE INDIVIDUALS INVOLVED,
INCLUDING MR. BANKS, THAT THE TEMPORARY DETAIL WOULD NOT BE TERMINATED
AND THAT HE WOULD NOT BE RETURNED TO HIS OLD OFFICIAL STATION IN LOS
ANGELES FOR DUTY PRIOR TO THE EFFECTIVE DATE OF HIS TRANSFER AS STATED
IN THE ORDERS OF MARCH 2.
THEREFORE, YOU SHOULD ASCERTAIN, IF POSSIBLE THROUGH CONTACTING THE
INDIVIDUALS INVOLVED, THE DATE ON WHICH IT BECAME APPARENT THAT MR.
BANKS' DETAIL WOULD NOT BE TERMINATED BEFORE APRIL 4. PER DIEM PAID FOR
ANY PERIOD BETWEEN THAT DATE AND APRIL 4, 1972, WHILE THE EMPLOYEE WAS
ON DUTY IN REDDING PROPERLY SHOULD NOT HAVE BEEN ALLOWED AND SHOULD BE
COLLECTED FROM MR. BANKS. PAYMENT OF PER DIEM ON OR PRIOR TO THAT DATE
FOR DUTY IN REDDING NEED NOT BE QUESTIONED.
THE COLLECTION VOUCHER IS RETURNED FOR ACTION IN ACCORDANCE HEREWITH.
B-177018, DEC 22, 1972
MILITARY PERSONNEL - TRAVEL EXPENSES - OVERHAUL OF VESSEL FOR LOAN TO
TURKEY
ADVANCE DECISION AS TO THE LEGALITY OF PAYMENT OF THE CLAIMS OF THREE
FORMER CREW MEMBERS OF THE U.S.S. ENTEMEDOR FOR REIMBURSEMENT INCIDENT
TO ROUND TRIP TRANSPORTATION FROM PLACE OF OVERHAUL TO HOME PORT.
THE LANGUAGE USED IN DECISION B-163798, OCTOBER 26, 1970, 50 COMP.
GEN. 320, WAS FOR THE PURPOSE OF DISTINGUISHING OVERHAULS FROM
INACTIVATIONS, EVEN THOUGH IN THE INACTIVATION PROCESS SOME INCIDENTAL
MAINTENANCE MIGHT BE PERFORMED. WHILE THE PURPOSE OF THIS OVERHAUL WAS
TO RENDER THE VESSEL FIT FOR ACTIVE SERVICE WITH THE TURKISH NAVY,
RATHER THAN FOR CONTINUED ACTIVE SERVICE WITH THE UNITED STATES NAVY, IT
SEEMS CLEAR THAT THE OPERATION WAS NOT TO PREPARE THE VESSEL FOR
"MOTHBALLING" OR RETIREMENT FROM ACTIVE SERVICE. IN THESE CIRCUMSTANCES
THE COMP. GEN. IS OF THE OPINION THAT THE TRAVEL REASONABLY MAY BE
VIEWED AS COMING WITHIN THE CONTEMPLATION OF 37 U.S.C. 406B.
TO MR. S. GAETANO:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4, 1972, WITH ATTACHMENTS,
FILE REFERENCE NFO-4, FORWARDED HERE BY ENDORSEMENT OF SEPTEMBER 11,
1972, FROM THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE
(CONTROL NO. 72-44), REQUESTING AN ADVANCE DECISION AS TO THE LEGALITY
OF PAYMENT OF THE CLAIMS OF THREE FORMER CREW MEMBERS OF THE U.S.S.
ENTEMEDOR (SS-340) FOR REIMBURSEMENT INCIDENT TO ROUND TRIP
TRANSPORTATION FROM PLACE OF OVERHAUL TO HOME PORT.
YOU SAY THAT ON JUNE 4, 1972, THE U.S.S. ENTEMEDOR, HOMEPORTED AT NEW
LONDON, CONNECTICUT, ARRIVED AT THE NAVAL SHIPYARD, PHILADELPHIA,
PENNSYLVANIA, FOR A RESTRICTED AVAILABILITY OVERHAUL. DURING THE PERIOD
OF OVERHAUL THREE CREW MEMBERS WERE GIVEN AUTHORIZATION TO TRAVEL FROM
PHILADELPHIA TO NEW LONDON AND RETURN UNDER THE AUTHORITY OF PARAGRAPH
M6700 OF THE JOINT TRAVEL REGULATIONS.
THE CREW MEMBERS TRAVELED TO NEW LONDON VIA PRIVATELY OWNED VEHICLE
ON JULY 14, 1972, AND RETURNED VIA GOVERNMENT PROCURED AIR; THEY HAVE
CLAIMED MILEAGE ALLOWANCES FOR TRAVEL FROM PHILADELPHIA TO NEW LONDON.
FOLLOWING THEIR RETURN TO PHILADELPHIA THE ENTEMEDOR RETURNED TO NEW
LONDON AND WAS DECOMMISSIONED ON JULY 31, 1972, FOR LOAN TO THE TURKISH
GOVERNMENT.
YOU REFER TO SECRETARY OF THE NAVY INSTRUCTION 7220.67, CHANGE 1, AS
INDICATING THAT A RULING BY THE COMPTROLLER GENERAL OF THE UNITED STATES
LIMITED THE TRANSPORTATION PROVIDED UNDER THE PROVISIONS OF PUBLIC LAW
91-210 TO OVERHAULS INVOLVING THE PERFORMANCE OF MAINTENANCE FOR
CONTINUED ACTIVE SERVICE. THEREFORE, YOU ARE DOUBTFUL REGARDING THE
ALLOWANCES CLAIMED, AS THE U.S.S. ENTEMEDOR DID NOT REMAIN IN AN ACTIVE
SERVICE STATUS IN THE NAVY UPON COMPLETION OF OVERHAUL.
BY ENDORSEMENT TO YOUR LETTER, THE CHIEF OF NAVAL PERSONNEL EXPRESSES
THE OPINION THAT THE MEMBERS ARE ENTITLED TO REIMBURSEMENT FOR THEIR
TRAVEL EXPENSES BECAUSE THE ENTEMEDOR CONTINUED AS AN ACTIVE SHIP IN THE
UNITED STATES NAVY AFTER COMPLETION OF OVERHAUL AND UNTIL SUCH TIME AS
IT WAS DECOMMISSIONED. ADDITIONALLY, HE STATES THAT UNDER THE
PROVISIONS OF PUBLIC LAW 92-270 (50 U.S. CODE APP. 1878ZZ-4 TO -8,
APRIL 6, 1972), TITLE TO THE SHIP REMAINS WITH THE UNITED STATES, AND AT
THE END OF THE LOAN PERIOD, NOT TO EXCEED FIVE YEARS, IT IS TO BE
RETURNED TO THE UNITED STATES NAVY.
IN ANOTHER ENDORSEMENT, THE COMPTROLLER OF THE NAVY CONTENDS THAT
REIMBURSEMENT SHOULD NOT BE AUTHORIZED BECAUSE THE ENTEMEDOR WAS NOT
BEING OVERHAULED FOR THE PURPOSE OF CONTINUED ACTIVE SERVICE WITH THE
UNIFORMED SERVICES OF THE UNITED STATES.
SECTION 406B OF TITLE 37, U.S. CODE, ADDED AS A NEW SECTION TO
CHAPTER 7 OF THAT TITLE BY SECTION (1) OF PUBLIC LAW 91-210, APPROVED
MARCH 13, 1970, PROVIDES:
"UNDER REGULATIONS PRESCRIBED BY THE SECRETARY CONCERNED, A MEMBER OF
THE UNIFORMED SERVICES WHO IS ON PERMANENT DUTY ABOARD A SHIP WHICH IS
BEING OVERHAULED AWAY FROM ITS HOME PORT AND WHOSE DEPENDENTS ARE
RESIDING AT THE HOME PORT OF THE SHIP IS ENTITLED TO TRANSPORTATION,
TRANSPORTATION IN KIND, REIMBURSEMENT FOR PERSONALLY PROCURED
TRANSPORTATION, OR AN ALLOWANCE FOR TRANSPORTATION AS PROVIDED IN
SECTION 404(D)(3) OF THIS CHAPTER FOR ROUND TRIP TRAVEL FROM THE PORT OF
OVERHAUL TO THE HOME PORT ***."
WE HELD IN DECISION B-163798, OCTOBER 26, 1970 (50 COMP. GEN. 320)
AND AGAIN ON DECEMBER 22, 1970, THAT THIS STATUTE DOES NOT AUTHORIZE
REIMBURSEMENT FOR ROUND TRIP TRAVEL TO VISIT DEPENDENTS AT THE HOME PORT
WHEN A SHIP IS BEING INACTIVATED. WE STATED IN THE LATTER DECISION,
THAT "IT SEEMS CLEAR *** THAT THE LEGISLATION WAS ENACTED TO AUTHORIZE
TRAVEL OF MEMBERS INCIDENT TO THE OVERHAUL OF VESSELS FOR CONTINUED
ACTIVE OPERATION ***."
THE TERM "OVERHAUL" IS EMPLOYED IN 37 U.S. CODE 406B WITHOUT
LIMITATION AS TO TYPE OF OVERHAUL, NOR DOES THE LEGISLATIVE HISTORY
INDICATE THAT THIS PROVISION IS TO BE RESTRICTED TO OVERHAULS PERFORMED
ONLY FOR CERTAIN PURPOSES. OUR USE OF THE PHRASE "CONTINUED ACTIVE
OPERATION" IN CONNECTION WITH OVERHAULS WAS FOR THE PURPOSE OF
DISTINGUISHING OVERHAULS FROM INACTIVATIONS, EVEN THOUGH IN THE
INACTIVATION OR "MOTHBALLING" PROCESS SOME INCIDENTAL MAINTENANCE MIGHT
BE PERFORMED.
WE HAVE BEEN ADVISED, INFORMALLY, THAT PRIOR TO OVERHAUL, IT HAD BEEN
DETERMINED THAT U.S.S. ENTEMEDOR WOULD BE DECOMMISSIONED UPON RETURN TO
NEW LONDON, AND TURNED OVER TO THE TURKISH NAVY, FOR FURTHER SERVICE.
WHILE THE PURPOSE OF THE OVERHAUL WAS TO RENDER THE VESSEL FIT FOR
ACTIVE SERVICE WITH THE TURKISH NAVY, RATHER THAN FOR CONTINUED ACTIVE
SERVICE WITH THE UNITED STATES NAVY, IT SEEMS CLEAR THAT THE OPERATION
WAS NOT TO PREPARE THE VESSEL FOR "MOTHBALLING" OR RETIREMENT FROM
ACTIVE SERVICE. RATHER IT WAS IN FACT AN OVERHAUL FOR CONTINUED ACTIVE
SERVICE EVEN THOUGH THE VESSEL WAS DECOMMISSIONED UPON RETURN TO ITS
HOME PORT. IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT THE TRAVEL
REASONABLY MAY BE VIEWED AS COMING WITHIN THE CONTEMPLATION OF 37 U.S.C.
406B.
THEREFORE, WE CONCLUDE THAT THE TRANSPORTATION ENTITLEMENTS PROVIDED
IN 37 U.S. CODE 406B PROPERLY ARE FOR APPLICATION IN THE PRESENT
CIRCUMSTANCES AND, IF OTHERWISE PROPER, THE MEMBERS MAY BE REIMBURSED
FOR TRAVEL BY PRIVATELY OWNED VEHICLE FROM PHILADELPHIA TO NEW LONDON.
B-177096, DEC 22, 1972
CIVILIAN EMPLOYEE - SALE OF RESIDENCE - EXTENSION OF TIME - ACT OF GOD -
"MERITORIOUS CLAIM"
DECISION REGARDING THE QUESTION AS TO WHETHER JOHN H. HART MAY, FOR
PURPOSES OF REIMBURSEMENT UNDER PROVISIONS OF SUBSECTION 5724A(A)(4) OF
5 U.S.C., BE GRANTED AN ADDITIONAL EXTENSION OF TIME WITHIN WHICH TO
CONSUMATE THE SALE OF HIS FORMER RESIDENCE AT HARRISBURG, PA., HIS
PREVIOUS DUTY STATION.
OMB CIRCULAR NO. A-56, SUBSECTION 4.1E, PROVIDES THAT A MAXIMUM TIME
EXTENSION OF ONE YEAR MAY BE GRANTED IN CONNECTION WITH THE SALE OF A
RESIDENCE. SINCE THIS REGULATION IS STATUTORY IN NATURE, HAVING THE
FORCE AND EFFECT OF LAW, NO FURTHER EXTENSION MAY LEGALLY BE GRANTED
CLAIMANT. HOWEVER, SINCE THE CAUSE FOR THE DELAY IN CONSUMATING THE
SALE WAS AN ACT OF GOD (HURRICAN AGNES), THE COMP. GEN. FEELS THAT
THERE ARE SUFFICIENT EQUITABLE INTERESTS HERE TO WARRANT REFERRAL OF THE
CLAIM TO CONGRESS FOR CONSIDERATION UNDER THE MERITORIOUS CLAIMS ACT, 31
U.S.C. 236, WITH A RECOMMENDATION FOR ENACTMENT OF RELIEF LEGISLATION.
TO MR. SECRETARY:
THIS REFERS TO THE LETTER RECEIVED IN THIS OFFICE SEPTEMBER 25, 1972,
FROM THE ASSOCIATE ASSISTANT SECRETARY FOR FINANCIAL MANAGEMENT
REQUESTING OUR DECISION AS TO WHETHER MR. JOHN H. HART MAY, FOR PURPOSES
OF REIMBURSEMENT UNDER PROVISIONS OF SUBSECTION 5724A(A)(4) OF TITLE 5,
UNITED STATES CODE, BE GRANTED AN ADDITIONAL EXTENSION OF TIME WITHIN
WHICH TO CONSUMMATE THE SALE OF HIS FORMER RESIDENCE AT HIS PREVIOUS
OFFICIAL DUTY STATION.
THE RECORD SHOWS THAT MR. HART TRANSFERRED FROM HARRISBURG,
PENNSYLVANIA, TO PHILADELPHIA, PENNSYLVANIA, EFFECTIVE AUGUST 9, 1970.
ON AUGUST 6, 1971, MR. HART'S AGENT EXECUTED ON HIS BEHALF A CONTRACT
FOR THE SALE OF HIS FORMER RESIDENCE AT HARRISBURG. IN ACCORDANCE WITH
PROVISIONS OF SUBSECTION 4.1E, OF OFFICE OF MANAGEMENT AND BUDGET
CIRCULAR NO. A-56, MR. HART WAS GRANTED, ON AUGUST 11, 1971, AN
EXTENSION OF 6 MONTHS FROM THE ANNIVERSARY DATE OF HIS TRANSFER IN WHICH
TO COMPLETE THE SALE OF HIS PROPERTY. THE CIRCUMSTANCES JUSTIFYING THE
EXTENSION (DIFFICULTIES ENCOUNTERED BY THE EMPLOYEE IN NEGOTIATING THE
SALES CONTRACT) WERE DULY SET FORTH IN A LETTER FROM THE REGIONAL
MANPOWER ADMINISTRATOR. SUBSEQUENT LETTERS FROM THE REGIONAL MANPOWER
ADMINISTRATOR DATED FEBRUARY 9, 1972, AND MARCH 21, 1972, WERE SUPPLIED
TO JUSTIFY AN ADDITIONAL EXTENSION OF TIME THROUGH AUGUST 7, 1972. THE
FURTHER EXTENSION WAS REQUIRED, AS EXPLAINED BY THE REGIONAL
ADMINISTRATOR, DUE TO THE DELAY OF THE FEDERAL HOUSING ADMINISTRATION IN
APPROVING A LOAN TO THE BUYER AND DIFFICULTIES ENCOUNTERED IN OBTAINING
A MORTGAGE.
IN A LETTER DATED JULY 28, 1972, THE REGIONAL ADMINISTRATOR REQUESTED
AUTHORITY TO GRANT MR. HART AN ADDITIONAL 1-YEAR EXTENSION OF TIME,
JUSTIFYING THE REQUEST AS FOLLOWS:
"FEDERAL HOUSING ADMINISTRATION'S DELAY IN APPROVING THE LOAN, AND
DIFFICULTIES IN OBTAINING A MORTGAGE FOR THE SALE, PRECLUDED THE
SCHEDULING OF A SETTLEMENT DATE ON THE CONTRACT BEFORE JUNE 27, 1972.
ALL MATTERS IN ORDER, THIS DATE WAS FINALLY CONFIRMED BY ALL NEGOTIATING
PARTIES.
"ON FRIDAY, JUNE 22 THROUGH SUNDAY, JUNE 24, 1972, THE CITY OF
HARRISBURG SUFFERED EXTENSIVE FLOOD DAMAGES CAUSED BY TROPICAL STORM
AGNES. AS A RESULT, MR. HART'S PROPERTY WAS SEVERELY DAMAGED, ESTIMATED
IN THE AMOUNT OF $5,000. CONSEQUENTLY, THE PROPERTY MUST NOW BE REBUILT
AND REFURNISHED TO A (SALEABLE) CONDITION ACCEPTABLE TO ALL PARTIES
BEFORE SETTLEMENT CAN BE COMPLETED.
"UNDER THE PRESENT CIRCUMSTANCES - THE TIME REQUIRED FOR PROPERTY TO
DRY OUT (FLOOD WATERS WERE 4-1/2 FEET ABOVE THE FIRST FLOOR),
AVAILABILITY OF CONTRACTORS TO SCHEDULE AND PERFORM WORK (MASSIVE
WAITING LISTS DUE TO OTHERS SUFFERING SIMILAR MISHAPS) - MR. HART IS
UNABLE TO DETERMINE THE LENGTH OF TIME INVOLVED IN COMPLETING THE
REPAIRS TO THE PROPERTY AND CONSUMMATING THE SALE. HOWEVER, HE BELIEVES
THAT AN ADDITIONAL ONE-YEAR EXTENSION WOULD BE SUFFICIENT."
SUBSECTION 4.1E, OF CIRCULAR NO. A-56, SUPRA, PROVIDES AS FOLLOWS:
"4.1 CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES ARE PAYABLE.
TO THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT WILL
REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN
CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION;
PURCHASE (INCLUDING CONSTRUCTION) OF ONE DWELLING AT HIS NEW OFFICIAL
STATION; OR THE SETTLEMENT OF AN UNEXPIRED LEASE INVOLVING HIS
RESIDENCE OR A LOT ON WHICH A HOUSE TRAILER USED AS HIS RESIDENCE WAS
LOCATED AT THE OLD OFFICIAL STATION; PROVIDED THAT:
"E. TIME LIMITATION. THE SETTLEMENT DATES FOR THE SALE AND PURCHASE
OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED
ARE NOT LATER THAN ONE (INITIAL) YEAR AFTER THE DATE ON WHICH THE
EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT (1)
AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED OR APPROVED BY THE
HEAD OF THE AGENCY OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY
DELAYED BECAUSE OF LITIGATION, OR (2) AN ADDITIONAL PERIOD OF TIME NOT
IN EXCESS OF ONE YEAR MAY BE AUTHORIZED OR APPROVED BY THE HEAD OF THE
AGENCY OR HIS DESIGNEE WHEN HE DETERMINES THAT CIRCUMSTANCES JUSTIFYING
THE EXCEPTION EXIST WHICH PRECLUDED SETTLEMENT WITHIN THE INITIAL
ONE-YEAR PERIOD OF THE SALE/PURCHASE CONTRACTS OR LEASE TERMINATION
ARRANGEMENT ENTERED INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE
INITIAL ONE-YEAR PERIOD. THE CIRCUMSTANCES WHICH ARE DETERMINED BY THE
HEAD OF THE AGENCY OR HIS DESIGNEE TO JUSTIFY THE EXCEPTION UNDER (2)
ABOVE SHALL BE SET FORTH IN WRITING."
THIS OFFICE HAS CONSISTENTLY HELD THAT THIS REGULATION IS STATUTORY
IN NATURE, HAVING THE FORCE AND EFFECT OF LAW. ACCORDINGLY,
REIMBURSEMENT OF EXPENSES OF REAL ESTATE TRANSACTIONS INCURRED INCIDENT
TO TRANSFERS OF OFFICIAL STATION, OTHERWISE ALLOWABLE, MAY NOT BE
ALLOWED IN THE ABSENCE OF COMPLIANCE WITH THE ABOVE-STATED TIME
LIMITATIONS WITHIN WHICH A RESIDENCE MUST BE BOUGHT OR SOLD. SEE 47
COMP. GEN. 753 (1968); B-166317, MAY 9, 1969; B-172911, JUNE 21, 1971;
B-175348, APRIL 12, 1972, COPIES ENCLOSED.
WE RECOGNIZE THAT MR. HART'S CLAIM IS BASED ON THE OCCURRENCE OF AN
ACT OF GOD WHICH PREVENTED COMPLIANCE WITH THE TIME LIMITATION OF THE
REGULATIONS. HOWEVER, THE REGULATIONS DO NOT PERMIT ANY FURTHER
EXTENSION FOR ANY REASON WHATSOEVER. THEREFORE, SINCE MR. HART HAS
RECEIVED THE MAXIMUM EXTENSION OF TIME PERMITTED BY THE REGULATION
WITHIN WHICH TO SELL HIS FORMER RESIDENCE, NO LEGAL AUTHORITY EXISTS
UNDER WHICH HE MAY BE GRANTED A FURTHER EXTENSION AS REQUESTED.
HOWEVER, IN VIEW OF THE EXTRAORDINARY CIRCUMSTANCES OF THIS CASE WE
BELIEVE IT MERITS A REPORT TO THE CONGRESS UNDER PROVISIONS OF THE
MERITORIOUS CLAIMS ACT OF APRIL 10, 1928, 45 STAT. 413, 31 U.S.C. 236,
WITH A RECOMMENDATION FOR ENACTMENT OF RELIEF LEGISLATION. OUR REPORT
AND RECOMMENDATION WILL BE FORWARDED TO THE CONGRESS IN ACCORDANCE WITH
THIS DETERMINATION.
B-177180, DEC 22, 1972
CIVILIAN EMPLOYEE - PAYMENT AT WRONG GRADE - WAIVER
DECISION REGARDING THE REQUEST OF AMELIA HARTMAN FOR WAIVER, UNDER
THE AUTHORITY OF 5 U.S.C. 5584, AS ADDED BY PUB. L. 90-616, OF AN
ERRONEOUS PAYMENT OF PAY IN THE AMOUNT OF $820 WHILE EMPLOYED BY THE
STRATEGIC AIR COMMAND.
IT IS THE COMP. GEN.'S VIEW THAT THE ERRONEOUS INCREASE PER PAY
PERIOD WAS NOT SO SIGNIFICANT AS TO PUT CLAIMANT ON CONSTRUCTIVE NOTICE
OF THE ERROR. IT IS FURTHER NOTED THAT THE ERROR OCCURRED OUT OF THE
AGENCY'S IMPLEMENTATION OF THE PAY ACT OF 1966. ACCORDINGLY, A WAIVER
OF THE INDEBTEDNESS WOULD BE PROPER.
TO MISS AMELIA HARTMAN:
REFERENCE IS MADE TO YOUR LETTER DATED JULY 24, 1972, WHICH IS VIEWED
AS CONSTITUTING AN APPEAL FROM THE ACTION OF OUR TRANSPORTATION AND
CLAIMS DIVISION IN DENYING YOUR REQUEST FOR WAIVER, UNDER THE AUTHORITY
OF 5 U.S.C. 5584, AS ADDED BY PUBLIC LAW 90-616, APPROVED OCTOBER 21,
1968, OF AN ERRONEOUS PAYMENT OF PAY IN THE AMOUNT OF $820 WHILE
EMPLOYED BY THE DEPARTMENT OF THE AIR FORCE, STRATEGIC AIR COMMAND.
THE RECORD INDICATES THAT AT THE TIME OF THE IMPLEMENTATION OF THE
FEDERAL EMPLOYEES SALARY ACT OF 1966, YOU WERE ERRONEOUSLY PAID AT THE
RATE OF GS-7, STEP 4, RATHER THAN THE PROPER RATE OF A GS-5, STEP 6. AS
A RESULT OF THIS ADMINISTRATIVE ERROR, YOU WERE OVERPAID $33.60 PER PAY
PERIOD FROM JULY 16, 1966, THROUGH AUGUST 12, 1967. AT THE TIME OF
DISCOVERY OF THE ERROR ON AUGUST 24, 1967, YOUR GROSS OVERPAYMENT
AMOUNTED TO $955.92. THIS AMOUNT HAS BEEN COLLECTED BY PAYROLL
DEDUCTIONS.
UPON FURTHER REVIEW OF THE FACTS SURROUNDING YOUR OVERPAYMENT IT IS
OUR VIEW THAT THE ERRONEOUS INCREASE PER PAY PERIOD WAS NOT SO
SIGNIFICANT AS TO NECESSARILY PUT YOU ON NOTICE THAT AN ERROR HAD BEEN
MADE. IN THIS REGARD WE NOTE THAT THE ERROR ACCRUED OUT OF YOUR
AGENCY'S IMPLEMENTATION OF THE PAY ACT OF 1966. ALSO, IT HAS NOT BEEN
SHOWN THAT YOU KNEW EXACTLY THE INCREASED PAY ACCORDED YOU BY THE
OPERATION OF SUCH ACT AND YOU STATE THAT YOU WERE NOT AWARE OF THE
OVERPAYMENTS WHICH HAD BEEN MADE IN YOUR PAYCHECK.
IN ADDITION, WE DEEM IT SIGNIFICANT THAT WHILE YOU WERE FURNISHED
LEAVE AND EARNINGS STATEMENTS DURING THE PERIOD OF THE OVERPAYMENTS,
THERE IS NO EVIDENCE INDICATING THAT YOUR GRADE AND STEP WERE STATED
UPON THE FACE OF SUCH STATEMENTS. HENCE, IT ALSO CANNOT BE SAID THAT
MERE RECEIPT OF THE DOCUMENTS CONSTITUTED CONSTRUCTIVE NOTICE TO YOU
THAT YOU HAD BEEN PLACED IN THE WRONG PAY CATEGORY AND THEREFORE WERE
BEING PAID AT AN IMPROPER RATE.
ACCORDINGLY, ON THE BASIS OF THE FOREGOING, IT IS NOW OUR VIEW THAT
WAIVER OF YOUR INDEBTEDNESS IN THE INSTANT CASE WOULD BE PROPER. A
SETTLEMENT WILL BE ISSUED IN YOUR FAVOR IN DUE COURSE FOR THE SUM FOUND
DUE.
B-177226, DEC 22, 1972
CIVILIAN EMPLOYEE - PER DIEM - CONSTRUCTIVE AIR TRAVEL UNDUE
INCONVENIENCE
DECISION REGARDING THE CLAIM OF EDWIN L. GARDNER, JR., AN EMPLOYEE OF
THE IMMIGRATION AND NATURALIZATION SERVICE FOR $6.25 PER DIEM AND FOR
APPROPRIATE ADJUSTMENT OF HIS LEAVE RECORD.
UNDER THE CIRCUMSTANCES OF THIS CASE, THE COMP. GEN. BELIEVES THAT
CLAIMANT WOULD HAVE BEEN "UNDULY INCOVENIENCED" WITHIN THE MEANING OF
SECTION 3.5(C)(2)(C) OF OMB CIRCULAR NO. A-7, BY REQUIRING THAT HE
DEPART ON THE 6 P.M. FLIGHT. A REVIEW OF EXISTING AIRLINE SCHEDULES
INDICATES THAT THE CONSTRUCTIVE FLIGHT CLAIMED BY MR. GARDNER WOULD HAVE
BEEN REASONABLE. THEREFORE, THE VOUCHER IN FAVOR OF MR. GARDNER MAY BE
CERTIFIED FOR PAYMENT AND HIS LEAVE RECORD ADJUSTED ACCORDINGLY.
TO MR. E. A. LOUGHRAN:
REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 6, 1972, WITH
ENCLOSURES, REFERENCE CO 615-C, WHICH REQUESTS OUR DECISION ON THE CLAIM
OF MR. EDWIN L. GARDNER, JR., AN EMPLOYEE OF THE UNITED STATES
DEPARTMENT OF JUSTICE, IMMIGRATION AND NATURALIZATION SERVICE, FOR $6.25
PER DIEM AND FOR THE ADJUSTMENT OF HIS LEAVE RECORD UNDER THE
CIRCUMSTANCES HEREINAFTER DESCRIBED.
THE RECORD INDICATES THAT UNDER TRAVEL ORDER NO. CO-72-30, ISSUED
JULY 19, 1971, MR. GARDNER WAS AUTHORIZED TRAVEL FROM HIS OFFICIAL DUTY
STATION AT WASHINGTON, D. C., TO EL PASO, TEXAS, FOR THE PURPOSE OF
SUPERVISING THE INSTALLATION OF AN INTRUSION ALARM SYSTEM IN THE EL PASO
SECTOR. THE PERIOD OF TRAVEL INVOLVED WAS FROM AUGUST 17 - SEPTEMBER 3,
1971, AND THE MODE OF TRANSPORTATION AUTHORIZED WAS BY COMMON CARRIER,
GOVERNMENT OWNED AUTOMOBILE OR BY PRIVATELY OWNED AUTOMOBILE AT THE RATE
OF 10 CENTS PER MILE NOT IN EXCESS OF CONSTRUCTIVE COMMON CARRIER
TRANSPORTATION.
AT THE CONCLUSION OF THE SUBJECT TRAVEL, MR. GARDNER SUBMITTED FOR
PAYMENT A VOUCHER IN THE AMOUNT OF $722.50. HOWEVER, IN COMPUTING THE
AMOUNT OF PER DIEM IN LIEU OF SUBSISTENCE CLAIMED BY MR. GARDNER ON A
CONSTRUCTIVE BASIS HE WAS DENIED PER DIEM FOR ONE-FOURTH DAY ($6.25) AS
INDICATED BY THE FOLLOWING:
"MR. GARDNER CLAIMS PER DIEM BASED ON DEPARTURE FROM WASHINGTON, D.C.
VIA AIR AT 12:00 NOON ON AUGUST 16, 1971, AND THIS SERVICE ALLOWED PER
DIEM BASED ON DEPARTURE VIA AIR SAME DATE AT 6 P.M. WITH ARRIVAL AT EL
PASO, TEXAS AT 9:57 P.M. SINCE CLAIMANT WAS NOTIFIED WELL IN ADVANCE OF
THE SCHEDULED TRAVEL SO AS TO PROVIDE SUFFICIENT TIME TO OBTAIN HOTEL
ACCOMMODATIONS ETC., THE CONSTRUCTIVE DEPARTURE TIME AND THE TIME FOR
ARRIVAL AT DESTINATION WAS NOT CONSIDERED TO BE UNREASONABLE AS IS
CONTENDED BY THE CLAIMANT."
MR. GARDNER HAS TAKEN EXCEPTION TO THE ABOVE ADMINISTRATIVE DEDUCTION
AND YOU HAVE REQUESTED OUR DECISION AS TO THE PROPRIETY THEREOF.
THE CONTROLLING REGULATION, SECTION 3.5C(2)(C) OF OFFICE OF
MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-7, AS AMENDED, STATES AS
FOLLOWS:
"*** IN MAKING THE FOREGOING CONSTRUCTIVE COST COMPARISONS OF
TRANSPORTATION, SCHEDULED DEPARTURES AND ARRIVALS OF PLANES, TRAINS, AND
BUSES AT UNREASONABLE HOURS WILL BE DISREGARDED. (FOR THIS PURPOSE,
'UNREASONABLE HOURS' MEANS THOSE WHICH WOULD UNDULY INCONVENIENCE THE
TRAVELER OR ADVERSELY AFFECT HIS SAFETY, OR WHICH WOULD RESULT IN UNDULY
INCREASING THE CONSTRUCTIVE PER DIEM)."
WE NOTE THAT IF MR. GARDNER HAD TAKEN THE 6 P.M. FLIGHT, THE ELAPSED
TIME WOULD HAVE BEEN APPROXIMATELY 6 HOURS. WHILE HE WOULD HAVE ARRIVED
AT THE AIRPORT IN EL PASO AT 9:57 P.M. (MOUNTAIN TIME) HE WOULD HAVE
BEEN REQUIRED TO OBTAIN BAGGAGE, AND TRAVEL TO HIS PLACE OF LODGING.
THIS WOULD PROBABLY HAVE CONSUMED ANOTHER HOUR. MOREOVER, IT APPEARS
THAT THE CONSTRUCTIVE TRAVEL BEGINNING 6 P.M. ON AUGUST 16, 1971, WOULD
HAVE TAKEN PLACE AFTER MR. GARDNER HAD WORKED A FULL DAY OR A
SUBSTANTIAL PART THEREOF.
UNDER THE RELATED CIRCUMSTANCES OUR VIEW IS THAT MR. GARDNER WOULD
HAVE BEEN "UNDULY INCONVENIENCED" BY REQUIRING THAT HE DEPART AT 6 P.M.
ON AUGUST 17.
OUR REVIEW OF EXISTING AIRLINE SCHEDULES IN EFFECT DURING THE PERIOD
OF TRAVEL HERE INVOLVED INDICATES THAT THE CONSTRUCTIVE FLIGHT CLAIMED
BY MR. GARDNER (DEPARTURE FROM WASHINGTON, D. C., AT 12 NOON ON AUGUST
16, 1971) WOULD HAVE BEEN A REASONABLE FLIGHT TO HAVE TAKEN HAD HE
ACTUALLY TRAVELED BY AIR CARRIER.
IN LINE WITH THE ABOVE, THE VOUCHER IN FAVOR OF MR. GARDNER IN THE
AMOUNT OF $6.25 SHOULD BE CERTIFIED FOR PAYMENT AND HIS LEAVE RECORD
ADJUSTED ACCORDINGLY.
B-177254, DEC 22, 1972
MILITARY PERSONNEL - PHILIPPINE SCOUT - MUSTERING OUT PAY - TIME BARRED
CLAIM
DECISION DENYING THE CLAIM OF FELIPE V. FERNANDEZ FOR ADDITIONAL
MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO DISCHARGE FROM THE PHILIPPINE
SCOUTS IN 1949.
CLAIMS FOR MUSTERING-OUT PAY ARE SUBJECT TO THE TIME LIMITATION OF
THE ACT OF OCTOBER 9, 1940, WHICH REQUIRES THAT A CLAIM MUST BE RECEIVED
IN GAO WITHIN 10 FULL YEARS FROM THE DATE THE CLAIM FIRST ACCRUES IN
ORDER FOR SUCH CLAIM TO BE RECOGNIZED AND CONSIDERED ON ITS MERITS.
SINCE THIS CLAIM ACCRUED IN 1949, AND THE FIRST RECORD OF ITS BEING
FILED WITH GAO IS ON JUNE 13, 1970, THE CLAIM MUST BE DENIED.
TO MR. FELIPE V. FERNANDEZ:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 12, 1972,
RELATIVE TO YOUR CLAIM FOR ADDITIONAL MUSTERING-OUT PAY BELIEVED DUE
INCIDENT TO YOUR DISCHARGE FROM THE PHILIPPINE SCOUTS IN 1949.
OUR FILE SHOWS THAT THE MATTER OF YOUR CLAIM WAS THE SUBJECT OF
LETTERS FROM OUR TRANSPORTATION AND CLAIMS DIVISION DATED MARCH 10,
1971, AND MAY 2, 1972. IN OUR LETTER OF MARCH 10 YOU WERE ADVISED THAT
CONSIDERATION OF YOUR CLAIM FOR SUCH PAY BY THIS OFFICE IS BARRED BY THE
PROVISIONS OF THE ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT. 1061, 31
U.S.C. 71A. THAT ACT PROVIDES IN PERTINENT PART:
"(1) EVERY CLAIM OR DEMAND *** AGAINST THE UNITED STATES COGNIZABLE
BY THE GENERAL ACCOUNTING OFFICE *** SHALL BE FOREVER BARRED UNLESS SUCH
CLAIM *** SHALL BE RECEIVED IN SAID OFFICE WITHIN TEN FULL YEARS AFTER
THE DATE SUCH CLAIM FIRST ACCRUED ***."
IN CONNECTION WITH THE ABOVE-QUOTED ACT, SECTION 305 OF THE ACT OF
JUNE 10, 1921, CH. 18, 42 STAT. 24, 31 U.S.C. 71, PROVIDES THAT ALL
CLAIMS AGAINST THE UNITED STATES SHALL BE ADJUSTED AND SETTLED IN THIS
OFFICE (GENERAL ACCOUNTING OFFICE).
IN OUR LETTER OF MAY 2, 1972, YOU WERE ADVISED THAT FURTHER ACTION
COULD NOT BE TAKEN ON YOUR CLAIM BECAUSE THE RECORDS NECESSARY TO
JUSTIFY OR REFUTE YOUR CLAIM HAD EITHER BEEN DESTROYED PURSUANT TO LAW,
OR HAVE BECOME UNAVAILABLE DUE TO THE LAPSE OF TIME. IN RESPONSE, YOU
AGAIN CONTEND THAT YOU HAVE NOT RECEIVED THE FULL AMOUNT OF YOUR
MUSTERING-OUT PAY. YOU INDICATE THAT A PAYMENT OF $50 WAS SENT TO YOUR
HOME APPROXIMATELY 30 DAYS AFTER YOUR DISCHARGE BUT THAT, SINCE YOU DID
NOT RETURN TO YOUR HOME IMMEDIATELY AFTER YOUR DISCHARGE, THE PAYMENT
WAS RETURNED BY YOUR LOCAL POST OFFICE TO THE U. S. ARMY.
THIS OFFICE DOES NOT MAINTAIN MILITARY PAY RECORDS AND WE HAVE NO
INFORMATION CONCERNING MUSTERING-OUT PAY, IF ANY, TO WHICH YOU MAY HAVE
BEEN ENTITLED TO RECEIVE EXCEPT AS SHOWN IN A COPY OF A LETTER DATED
JANUARY 29, 1959, TO YOU FROM THE FINANCE CENTER, U. S. ARMY,
INDIANAPOLIS, INDIANA. EVEN IF THE RECORDS TO EITHER SUPPORT OR REFUTE
YOUR CLAIM WERE AVAILABLE, WE WOULD BE UNABLE TO CONSIDER YOUR CLAIM.
AS WE HAVE PREVIOUSLY POINTED OUT, CLAIMS FOR MUSTERING-OUT PAY ARE
SUBJECT TO THE TIME LIMITATION OF THE ACT OF OCTOBER 9, 1940, WHICH
REQUIRES THAT A CLAIM MUST BE RECEIVED IN THIS OFFICE WITHIN 10 FULL
YEARS FROM THE DATE THE CLAIM FIRST ACCRUES IN ORDER FOR SUCH CLAIM TO
BE RECOGNIZED AND CONSIDERED ON ITS MERITS. IF YOU HAD A CLAIM FOR
MUSTERING-OUT PAY, SUCH CLAIM ACCRUED NO LATER THAN THE DATE OF YOUR
DISCHARGE FROM THE PHILIPPINE SCOUTS IN 1949. OUR FILE SHOWS THAT THE
FIRST NOTICE WE HAD CONCERNING ANY CLAIM WHICH YOU MAY HAVE HAD FOR
MUSTERING-OUT PAY WAS RECEIVED HERE ON JUNE 13, 1970, MORE THAN 20 YEARS
AFTER YOUR DISCHARGE.
ANY CLAIM YOU MIGHT HAVE PRESENTED TO ANOTHER AGENCY OF THE
GOVERNMENT WOULD NOT BE A COMPLIANCE WITH THE BARRING ACT.
ACCORDINGLY, SINCE CONSIDERATION OF YOUR CLAIM IS SPECIFICALLY
PROHIBITED BY THE 1940 BARRING ACT, THE ACTION HERETOFORE TAKEN BY OUR
TRANSPORTATION AND CLAIMS DIVISION WITH RESPECT TO YOUR CLAIM IS
SUSTAINED. IN THE CIRCUMSTANCES DISCLOSED, IT APPEARS THAT FURTHER
CORRESPONDENCE IN THIS MATTER WOULD SERVE NO USEFUL PURPOSE.
B-177335, DEC 22, 1972
CONTRACT - CANCELLATION OR TERMINATION - IMPROPER AWARD
DECISION REGARDING THE CLAIM OF ATLAS FABRICATORS, INC., IN THE
AMOUNT OF $153,480.87 DUE TO THE CANCELLATION OF A CONTRACT LET BY THE
DEPARTMENT OF THE AIR FORCE.
SINCE THERE IS NO EVIDENCE IN THE RECORD THAT ATLAS EITHER
CONTRIBUTED TO THE GOVERNMENT'S ERROR OR KNEW OF THE MISTAKE PRIOR TO
THE AWARD, GAO BELIEVES THAT THE AWARD, WHILE IMPROPER, WAS NOT PLAINLY
OR PALPABLY ILLEGAL AND THAT THE CANCELLATION OF THE CONTRACT SHOULD BE
CHANGED TO A TERMINATION FOR THE CONVENIENCE OF THE GOVERNMENT AND
SETTLEMENT MADE WITH THE CONTRACTOR PURSUANT TO THE TERMINATION FOR
CONVENIENCE CLAUSE IN THE CONTRACT. B-176393, OCTOBER 13, 1972.
TO MR. SECRETARY:
REFERENCE IS MADE TO LETTER ACFF/ANN B. SMITH/6291, DATED SEPTEMBER
29, 1972, FROM THE DEPUTY CHIEF, ACCOUNTING & FINANCE DIVISION,
COMPTROLLER, HEADQUARTERS AIR FORCE ACCOUNTING AND FINANCE CENTER,
DENVER, COLORADO, FURNISHING A REPORT RECOMMENDING DENIAL OF THE CLAIM
OF ATLAS FABRICATORS, INC., IN THE AMOUNT OF $153,480.87 DUE TO THE
CANCELLATION OF CONTRACT F42600-71-C-1718.
THE FOLLOWING FACTS ARE UNDISPUTED. IN THE EVALUATION OF BIDS, THE
GOVERNMENT ERRONEOUSLY COMPUTED THE FREIGHT RATES APPLICABLE TO THE
ATLAS F.O.B. ORIGIN BID AND MADE AWARD TO ATLAS. UNDER PROPERLY
COMPUTED FREIGHT RATES, ATLAS WAS NOT THE LOWEST BIDDER. WHEN THE ERROR
WAS DISCOVERED PRIOR TO DELIVERY OF ANY ITEMS, THE CONTRACT WAS
CANCELLED.
THERE IS NO EVIDENCE IN THE RECORD THAT ATLAS EITHER CONTRIBUTED TO
THE GOVERNMENT'S ERROR OR KNEW OF THE MISTAKE PRIOR TO THE AWARD. IN 52
COMP. GEN. ___, B-176393, OCTOBER 13, 1972, WHICH SPECIFICALLY OVERRULED
37 COMP. GEN. 330 (1957), AND B-164826, AUGUST 29, 1968, OUR OFFICE HELD
IN CIRCUMSTANCES SIMILAR TO THE IMMEDIATE CASE THAT THE AWARD, WHILE
IMPROPER, WAS NOT PLAINLY OR PALPABLY ILLEGAL AND THAT THE CANCELLATION
OF THE CONTRACT SHOULD BE CHANGED TO A TERMINATION FOR THE CONVENIENCE
OF THE GOVERNMENT AND SETTLEMENT MADE WITH THE CONTRACTOR PURSUANT TO
THE TERMINATION FOR CONVENIENCE CLAUSE IN THE CONTRACT.
ACCORDINGLY, THE IMMEDIATE CLAIM IS HEREWITH REFERRED TO YOUR
DEPARTMENT FOR DISPOSITION CONSISTENT WITH THE ABOVE-REFERENCED
DECISION, COPY HEREWITH.
B-115505, DEC 21, 1972
JUDGMENTS - ACCRUED INTEREST ON AWARDED ANNUITIES - INTEREST CHARGEABLE
TO RETIREMENT FUND
AN AFFIRMANCE OF A PRIOR DECISION WHICH HELD THAT INTEREST PAYMENTS
ORDERED BY THE DISTRICT COURT IN HISS V. HAMPTON, 338 F. SUPP. 1141, TO
BE PAID TO ALGER HISS AND RICHARD STRASBURGER SHOULD BE MADE FROM THE
CIVIL SERVICE RETIREMENT AND DISABILITY FUND RATHER THAN FROM THE
PERMANENT INDEFINITE APPROPRIATION FOR JUDGMENTS CONTAINED IN 31 U.S.C.
724A.
SINCE THE CIVIL SERVICE COMMISSION AGREES THAT ANNUITIES AWARDED THE
PLAINTIFFS SHOULD BE PAID FROM THE RETIREMENT FUND UNDER 5 U.S.C.
8331(8)(C), THE COMP. GEN. IS OF THE OPINION THAT THE INTEREST ON THE
ACCRUED ANNUITIES SHOULD ALSO BE PAID FROM THE RETIREMENT FUND BECAUSE
THE INTEREST, AS SPECIFIED IN PLAINTIFF'S JUDGMENT, CONSTITUTES AN
EXPENSE DIRECTLY RELATED TO THE OPERATION OF THE FUND AND THIS SHOULD BE
REFLECTED IN THE BOOKS THEREOF. FURTHER, THE PAYMENT OF INTEREST IS
EQUITABLE SINCE THE RETIREMENT FUND EARNED INTEREST ON THE WITHHELD
ANNUITIES. THUS, THE DECISION OF OCTOBER 4, 1972, CHARGING THE
RETIREMENT FUND WITH PAYMENT OF ANNUITIES OF THE PLAINTIFFS ALSO
INCLUDES THE INTEREST ACCRUED ON THE ANNUITIES.
TO MR. ROBERT E. HAMPTON:
YOUR LETTER OF OCTOBER 13, 1972, REQUESTS RECONSIDERATION OF OUR
DECISION TO YOU OF OCTOBER 4, 1972, B-115505, 52 COMP. GEN. ___, WHICH
HELD THAT INTEREST PAYMENTS ORDERED BY THE UNITED STATES DISTRICT COURT
IN HISS V. HAMPTON, 338 F. SUPP. 1141 (D.D.C. 1972), TO BE PAID TO
MESSRS. ALGER HISS AND RICHARD STRASBURGER SHOULD BE MADE FROM THE CIVIL
SERVICE RETIREMENT AND DISABILITY FUND (RETIREMENT FUND) RATHER THAN
FROM THE PERMANENT INDEFINITE APPROPRIATION FOR JUDGMENTS CONTAINED IN
31 U.S.C. 724A.
THE COURT IN THE ABOVE-CITED CASE HELD THAT THE SO-CALLED HISS ACT,
AS AMENDED, 5 U.S.C. 8311 ET SEQ., WAS AN EX POST FACTO LAW IN THAT IT
PUNISHED THE PLAINTIFFS IN THAT CASE, MESSRS. HISS AND STRASBURGER, FOR
CONDUCT WHICH TOOK PLACE PRIOR TO SEPTEMBER 1, 1954, THE DATE OF
ENACTMENT OF THAT LAW. THE COURT THEREFORE DETERMINED THAT THE HISS ACT
COULD NOT BE USED TO DENY THESE PLAINTIFFS THEIR CIVIL SERVICE ANNUITIES
AND IT ORDERED THE CIVIL SERVICE COMMISSION TO PAY THEM THEIR ANNUITIES
AS COMPUTED FROM THE DATES WHEN HISS AND STRASBURGER BECAME ELIGIBLE
THEREFOR. THE COURT FURTHER ORDERED THE COMMISSION TO PAY INTEREST ON
THOSE PORTIONS OF THE ANNUITIES WHICH WERE THEN PAST DUE.
THE COMMISSION IS OF THE VIEW THAT WHILE THE ACCRUED BUT UNPAID
ANNUITIES PROPERLY SHOULD BE PAID FROM THE RETIREMENT FUND, THERE IS NO
AUTHORITY TO EXPEND MONEY FROM THE RETIREMENT FUND TO PAY INTEREST ON
ANNUITIES. THE COMMISSION FEELS THAT THE RETIREMENT FUND IS
APPROPRIATED SOLELY FOR THE PAYMENT OF BENEFITS PROVIDED BY SUBCHAPTER
III OF CHAPTER 83, TITLE 5, UNITED STATES CODE, BY VIRTUE OF 5 U.S.C.
8348(A)(1)(A). THE BENEFITS PROVIDED BY THAT SUBCHAPTER INCLUDE
ANNUITIES AND LUMP-SUM BENEFITS WHICH MAY INCLUDE INTEREST UNDER CERTAIN
CIRCUMSTANCES LISTED IN 5 U.S.C. 8331(8)(C). THUS, THE COMMISSION
BELIEVES THAT IN THE ABSENCE OF A STATUTE SO PROVIDING, INTEREST IS NOT
A BENEFIT PROVIDED BY SAID SUBCHAPTER AND, HENCE, THE RETIREMENT FUND IS
NOT AVAILABLE FOR THE PAYMENT OF INTEREST ON ANNUITIES.
YOU STATE THAT AS THE COMMISSION VIEWS OUR DECISION DATED OCTOBER 4,
1972, THIS OFFICE DETERMINED THAT PAYMENT OF INTEREST TO THESE
PLAINTIFFS SHOULD BE FROM THE RETIREMENT FUND SINCE:
"(1) THE FUND IS AVAILABLE FOR THE PAYMENT OF JUDICIALLY-IMPOSED
ANNUITIES AND THEREFORE SHOULD BE AVAILABLE TO PAY INTEREST ON SUCH
ANNUITIES WHEN WRONGFULLY WITHHELD BY THE COMMISSION; AND
"(2) THE PAYMENT OF INTEREST FROM THE FUND IS MORE EQUITABLE SINCE
THE FUND HAS ALREADY EARNED INTEREST ON THE ACCRUED BUT UNPAID ANNUITIES
DUE HISS AND STRASBURGER."
YOU STATE THAT WHILE THE COMMISSION AGREES THAT IT MAY BE MORE
EQUITABLE TO PAY THE INTEREST FROM THE FUND IN CASES SUCH AS THIS, THERE
IS NO LEGAL AUTHORITY TO DO SO. YOU POINT OUT IN THIS REGARD THAT IN
THE ABSENCE OF A CONTRACTUAL OR STATUTORY REQUIREMENT, THE UNITED STATES
IS NOT LIABLE FOR THE PAYMENT OF INTEREST AND THAT SINCE THE CIVIL
SERVICE RETIREMENT LAW DOES NOT AUTHORIZE PAYMENT OF INTEREST ON ACCRUED
BUT UNPAID ANNUITIES AND THERE IS NO CONTRACTUAL OBLIGATION TO PAY SUCH
INTEREST, THE RETIREMENT FUND IS NOT LIABLE FOR THE PAYMENT OF SUCH
INTEREST. IT IS SUGGESTED THAT THE PAYMENT OF INTEREST IS MORE PROPERLY
PAYABLE OUT OF THE JUDGMENT FUND OF 31 U.S.C. 724A WHICH IS AVAILABLE TO
PAY JUDGMENTS (INCLUDING INTEREST) WHICH ARE "NOT OTHERWISE PROVIDED
FOR."
IT IS EVIDENT THAT THE RETIREMENT FUND IS INTENDED TO BE, INSOFAR AS
POSSIBLE, A SELF-SUSTAINING FUND WHICH, IN GENERAL, IS CREDITED ON THE
ONE HAND WITH CONTRIBUTIONS MADE BY EMPLOYEES AND THEIR EMPLOYER - THE
GOVERNMENT - AND LIABLE ON THE OTHER HAND FOR THE PAYMENTS OF ANNUITIES
AND ALL EXPENSES RELATED THERETO. SINCE THE INTEREST HERE INVOLVED IS,
IN EFFECT, AN INTEGRAL PART OF THE ANNUITIES AWARDED THE PLAINTIFFS WE
CANNOT AGREE THAT IT PROPERLY MAY NOT BE PAID FROM THE RETIREMENT FUND.
IT IS OUR VIEW THAT SUCH INTEREST, WHEN SPECIFIED IN THE JUDGMENT,
CONSTITUTES AN EXPENSE DIRECTLY RELATED TO THE OPERATION OF THE
RETIREMENT FUND AND PROPERLY SHOULD BE REFLECTED AS A COST ON THE BOOKS
THEREOF. FURTHERMORE, AS POINTED OUT IN OUR EARLIER DECISION AND AGREED
TO BY THE COMMISSION, THIS DISPOSITION REPRESENTS AN EQUITABLE
RESOLUTION OF THE PROBLEM SINCE THE RETIREMENT FUND EVIDENTLY EARNED
INTEREST THROUGH INVESTMENTS UNDER 5 U.S.C. 8348(C) ON THE WITHHELD
ANNUITIES.
MOREOVER, IT MAY BE NOTED THAT THE APPROPRIATION PROVIDED BY 31
U.S.C. 724A IS AVAILABLE FOR THE PAYMENT OF JUDGMENTS NOT OTHERWISE
PROVIDED FOR "TOGETHER WITH SUCH INTEREST *** AS MAY BE SPECIFIED IN
SUCH JUDGMENTS ***." IN VIEW OF THIS LANGUAGE IT SEEMS EVIDENT THAT THE
INTEREST REFERRED TO THEREIN IS THE INTEREST SPECIFIED ONLY IN JUDGMENTS
THAT ARE PROPERLY PAYABLE FROM THAT APPROPRIATION. CONSEQUENTLY, AND
HAVING AGREED THAT THE RETIREMENT FUND PROPERLY WAS CHARGEABLE WITH THE
PAYMENT OF THE ANNUITIES AWARDED TO THE PLAINTIFFS IN THIS CASE, IT MUST
BE HELD THAT THE APPROPRIATION PROVIDED BY 31 U.S.C. 724A IS NOT
AVAILABLE FOR THE PAYMENT OF INTEREST ORDERED BY THE COURT IN THAT THE
PAYMENT OF THE JUDGMENT HERE INVOLVED IS OTHERWISE PROVIDED FOR.
ACCORDINGLY, OUR EARLIER DECISION REGARDING THIS MATTER IS HEREBY
AFFIRMED.
B-171969, DEC 21, 1972
CIVILIAN EMPLOYEE - TRAVEL EXPENSES - EMPLOYMENT AGREEMENT - RESIGNATION
FROM GOVERNMENT SERVICE
DECISION REGARDING THE WAIVER OF INDEBTEDNESS OF RICHARD W.
HUTCHISON TO THE AIR FORCE FOR ADVANCED TRAVEL AND PER DIEM EXPENSES
INCIDENT TO A TRANSFER FROM PITTSBURGH, PA., TO MONTGOMERY, ALA.
SECTION 5724(I) OF TITLE 5, U.S.C. PROVIDES FOR REIMBURSEMENT OF
EMPLOYEE'S TRAVEL EXPENSES, PRIOR TO THE COMPLETION OF THE AGREED UPON
12 MONTHS OF SERVICE, ONLY WHEN THE EMPLOYEE IS SEPARATED FOR REASONS
BEYOND HIS CONTROL THAT ARE ACCEPTABLE TO THE EMPLOYING AGENCY. SINCE
CLAIMANT RESIGNED HIS GOVERNMENT POSITION FOR EMPLOYMENT IN THE PRIVATE
SECTOR, THE AIR FORCE'S DETERMINATION THAT THE RESIGNATION WAS NOT
BEYOND THE EMPLOYEE'S CONTROL WILL NOT BE DISTURBED. ACCORDINGLY, THE
WAIVER OF INDEBTEDNESS IS DISALLOWED.
TO MR. RICHARD W. HUTCHISON:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 25, 1972, WITH ENCLOSURES,
REQUESTING A RULING AS TO WHETHER YOU SHOULD BE REQUIRED TO REPAY TRAVEL
AND PER DIEM ALLOWANCES ADVANCED TO YOU BY THE DEPARTMENT OF THE AIR
FORCE INCIDENT TO YOUR TRANSFER FROM PITTSBURGH, PENNSYLVANIA, TO
MONTGOMERY, ALABAMA.
THE ABOVE QUESTION ARISES AS A CONSEQUENCE OF YOUR RESIGNATION FROM
YOUR ASSIGNED POSITION AS A COMPUTER SPECIALIST, GS-12, AT THE AIR FORCE
DATA SYSTEMS DESIGN CENTER, MAXWELL AIR FORCE BASE, ALABAMA, AFTER
WORKING APPROXIMATELY FIVE AND ONE-HALF MONTHS IN SUCH POSITION AFTER
YOUR TRANSFER. IT IS YOUR CONTENTION THAT THE AIR FORCE FAILED TO
PROVIDE A POSITION EVEN REMOTELY SIMILAR TO THAT OF A COMPUTER
SPECIALIST, GS-12, THAT YOU WERE NEVER UTILIZED IN SUCH CAPACITY NOR
GIVEN AN OPPORTUNITY TO FUNCTION AT SUCH LEVEL, AND THUS THE AIR FORCE
WAS IN DIRECT VIOLATION OF THE BASIC EMPLOYMENT AGREEMENT AND BY
EXTENSION OF THE RELATED TRANSPORTATION AGREEMENT.
THE CONTROLLING STATUTORY PROVISION GOVERNING THE MATTER OF YOUR
INDEBTEDNESS IS FOUND IN 5 U.S.C. 5724(I) WHICH READS, IN PERTINENT
PART, AS FOLLOWS:
"AN AGENCY MAY PAY TRAVEL AND TRANSPORTATION EXPENSES (INCLUDING
STORAGE OF HOUSEHOLD GOODS AND PERSONAL EFFECTS) AND OTHER RELOCATION
ALLOWANCES UNDER THIS SECTION AND SECTIONS 5724A AND 5726(C) OF THIS
TITLE WHEN AN EMPLOYEE IS TRANSFERRED WITHIN THE CONTINENTAL UNITED
STATES ONLY AFTER THE EMPLOYEE AGREES IN WRITING TO REMAIN IN THE
GOVERNMENT SERVICE FOR 12 MONTHS AFTER HIS TRANSFER, UNLESS SEPARATED
FOR REASONS BEYOND HIS CONTROL THAT ARE ACCEPTABLE TO THE AGENCY
CONCERNED. IF THE EMPLOYEE VIOLATES THE AGREEMENT, THE MONEY SPENT BY
THE UNITED STATES FOR THE EXPENSES AND ALLOWANCES IS RECOVERABLE FROM
THE EMPLOYEE AS A DEBT DUE THE UNITED STATES."
AS IT MAY BE OBSERVED FROM THE QUOTED LANGUAGE OF THE STATUTE, THE
BASIS FOR THE ASSUMPTION BY AN AGENCY OF THE UNITED STATES OF THE
EXPENSES OF TRAVEL AND TRANSPORTATION OF AN EMPLOYEE, PRIOR TO THE
COMPLETION OF 12 MONTHS OF SERVICE, IS CONFINED TO THE SITUATION WHERE
THE EMPLOYEE IS "SEPARATED FOR REASONS BEYOND HIS CONTROL THAT ARE
ACCEPTABLE TO THE AGENCY CONCERNED."
THE ACCEPTABILITY OF THE REASONS FOR YOUR PREMATURE RESIGNATION IS
PRIMARILY FOR DETERMINATION BY THE DEPARTMENT OF THE AIR FORCE AND ITS
DETERMINATION IS REVIEWABLE BY THIS OFFICE ONLY IF THE FACTS ESTABLISH
THAT IT IS ARBITRARY OR CAPRICIOUS.
THE RECORD INDICATES, IN PERTINENT PART, THAT THE DEPARTMENT OF THE
AIR FORCE CONCLUDED THAT YOUR SEPARATION WAS NOT CAUSED BY REASONS
BEYOND YOUR CONTROL BUT WAS OCCASIONED PRIMARILY BY YOUR DESIRE TO
"ACCEPT A POSITION WHICH OFFERS AN EXTRAORDINARY OPPORTUNITY FOR
PROFESSIONAL DEVELOPMENT," AS STATED IN YOUR LETTER OF RESIGNATION, AND
HENCE WAS NOT ACCEPTABLE TO THE AGENCY. YOU NOW STATE THAT AT THE TIME
OF YOUR RESIGNATION YOU DID NOT DEEM IT USEFUL OR NECESSARY TO ELABORATE
ON YOUR REASONS FOR RESIGNING AS YOU DID NOT INTEND TO CONTEST THE ISSUE
OF RELOCATION EXPENSES. THE AGENCY ALSO REPORTS THAT DURING THE
RELATIVELY SHORT PERIOD OF YOUR EMPLOYMENT, DUE TO LACK OF KNOWLEDGE OF
GOVERNING AIR FORCE PROCUREMENT DIRECTIVES AND DATA SYSTEM PROCEDURES
AND PARAMETERS, SIGNIFICANT PORTIONS OF SUCH PERIOD WERE SPENT IN FORMAL
AND ON-THE-JOB TRAINING AND SYSTEMS FAMILIARIZATION, WITH WHICH YOU
DISAGREE.
WE DO NOT BELIEVE THAT FAILURE OF AN AGENCY TO ASSIGN AN EMPLOYEE TO
THE EXACT DUTIES SET FORTH IN HIS JOB DESCRIPTION WOULD ORDINARILY BE A
BASIS FOR REGARDING THE EMPLOYEE'S RESIGNATION AS BEING "SEPARATION
BEYOND HIS CONTROL." SINCE THE DETERMINATION OF THE DEPARTMENT OF THE
AIR FORCE WAS NOT ARBITRARY OR CAPRICIOUS YOU MAY NOT BE RELIEVED OF
YOUR INDEBTEDNESS.
B-173078, DEC 21, 1972
BID PROTEST - ELIGIBILITY OF CONTRACTOR - RES JUDICATA
DECISION SUSTAINING A PRIOR PROTEST DENIAL ON BEHALF OF CITY CHEMICAL
CORPORATION AGAINST AWARD OF A CONTRACT TO POLY RESEARCH CORPORATION
UNDER AN IFB ISSUED BY THE NAVY SHIPS PARTS CONTROL CENTER,
MECHANICSBURG, PA.
IN DENYING A MOTION FOR A TEMPORARY INJUNCTION RESTRAINING
PERFORMANCE OF THE CONTRACTS AWARDED TO POLY RESEARCH THE U.S. DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK HELD THAT, IN FACT, POLY
RESEARCH IS A REGULAR DEALER OR A MANUFACTURER AND IS THUS ELIGIBLE FOR
AWARD. SEE CITY CHEMICAL CORP. V. SHREFFLER, 333 F. SUPP. 46 (S.D. N.Y.
1971). SINCE THE ISSUES RAISED IN THIS PROTEST WERE DECIDED BY THE
COURT, THE MATTER IS NOW RES JUDICATA AND THE PROTEST IS ACCORDINGLY
DENIED.
TO EUGENE DREXLER:
REFERENCE IS MADE TO YOUR LETTER OF MAY 24, 1971, WITH ENCLOSURE,
PROTESTING ON BEHALF OF CITY CHEMICAL CORPORATION AGAINST AWARDS TO POLY
RESEARCH CORPORATION UNDER INVITATIONS FOR BIDS NOS. N00104-71-B-1184,
1185, 1187 AND 1189, ISSUED BY NAVY SHIPS PARTS CONTROL CENTER,
MECHANICSBURG, PENNSYLVANIA.
THE BASIS FOR YOUR PROTEST IS THAT POLY RESEARCH ERRONEOUSLY
INDICATED IN EACH OF ITS BIDS THAT IT WAS A "REGULAR DEALER" IN THE
SUPPLIES OFFERED. WHILE THE CONTRACTING OFFICER DETERMINED THAT POLY
RESEARCH WAS "EITHER A MANUFACTURER OR A REGULAR DEALER," YOU MAINTAIN
THAT SUCH A DETERMINATION RESULTS IN AN UNFAIR OPTION TO POLY RESEARCH,
AND THAT AWARDS TO POLY RESEARCH WOULD ONLY BE IN ACCORD WITH THE
WALSH-HEALY ACT, 41 U.S.C. 35-45, IF THE DEPARTMENT OF LABOR SHOULD
ULTIMATELY CONCLUDE THAT COMPANY IS A "REGULAR DEALER."
IN THIS CONNECTION, WE HAVE BEEN ADVISED THAT, SUBSEQUENT TO OUR
RECEIPT OF YOUR PROTEST, THE DEPARTMENT OF LABOR RULED THAT POLY
RESEARCH IS A "MANUFACTURER." ALSO, IT APPEARS THAT CITY CHEMICAL
THEREAFTER BROUGHT SUIT IN THE UNITED STATES DISTRICT COURT, SOUTHERN
DISTRICT OF NEW YORK, FOR A TEMPORARY INJUNCTION RESTRAINING PERFORMANCE
OF THE CONTRACTS AWARDED TO POLY RESEARCH. THE COURT (SEE CITY CHEMICAL
CORPORATION V. SHREFFLER, 333 F.SUPP. 46 (1971)), IN DENYING THE MOTION
FOR A TEMPORARY INJUNCTION, STATED:
"THE CONTENTION THAT BECAUSE POLYRESEARCH FILED ITS ORIGINAL BID AS A
'REGULAR DEALER' IT COULD NOT BE AWARDED THE CONTRACT AS A
'MANUFACTURER' IS UNTENABLE. NEITHER THE STATUTE NOR THE REGULATIONS
PROVIDE FOR SUCH DISTINCT CLASSES. IF A FIRM IS EITHER A REGULAR DEALER
OR A MANUFACTURER, IT IS ELIGIBLE."
THE COURT ALSO UPHELD THE PROCURING ACTIVITY'S DECISION TO AWARD THE
CONTRACT ON THE BASIS OF URGENCY. ON JUNE 26, 1972, THIS SUIT WAS
DISMISSED WITH PREJUDICE.
IN VIEW OF THE FACT THAT THE COURT, IN ITS CONSIDERATION OF THE
MOTION FOR A TEMPORARY INJUNCTION, DID RULE ON THE ISSUES RAISED BY YOUR
PROTEST, AND THE CASE WAS SUBSEQUENTLY DISMISSED WITH PREJUDICE, IT
WOULD APPEAR THAT THE MATTER IS NOW RES JUDICATA, AND WE ARE THEREFORE
CLOSING OUR FILE WITHOUT FURTHER ACTION.
B-174482, DEC 21, 1972
PROCUREMENT PROCEDURES - ESTABLISHMENT OF QPL - COST TO GOVERNMENT
CONCERNING THE RECOMMENDATION THAT THE ARMY MISSILE COMMAND, REDSTONE
ARSENAL, ALA., EXAMINE THE DESIRABILITY OF PLACING BELLOWS ASSEMBLIES ON
A QUALIFIED PRODUCTS LIST INSTEAD OF MAKING PURCHASES OF THE ITEMS FROM
AEROQUIP CORPORATION ON A SOLE-SOURCE BASIS. B-174482, AUGUST 3, 1972.
SINCE ESTABLISHING A QUALIFIED PRODUCTS LIST FOR THIS ITEM WOULD BE
EXCESSIVELY COSTLY TO THE GOVERNMENT, THE COMP. GEN. THEREFORE SEES NO
VALID BASIS FOR OBJECTION TO FUTURE PURCHASES OF THE ITEMS FROM AEROQUIP
ON A SOLE-SOURCE BASIS.
TO MR. SECRETARY:
WE REFER TO A LETTER, DATED OCTOBER 19, 1972, FROM THE ACTING DEPUTY
FOR MATERIEL ACQUISITION IN RESPONSE TO THE RECOMMENDATION CONTAINED IN
OUR LETTER (B-174482, AUGUST 3, 1972) TO YOUR DEPARTMENT THAT THE ARMY
MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA, EXAMINE THE DESIRABILITY OF
PLACING BELLOWS ASSEMBLIES ON A QUALIFIED PRODUCTS LIST INSTEAD OF
MAKING PURCHASES OF THE ITEMS FROM AEROQUIP CORPORATION ON A SOLE-SOURCE
BASIS.
THE ACTING DEPUTY'S LETTER CONCLUDES THAT ESTABLISHING A QUALIFIED
PRODUCTS LIST FOR THIS ITEM WOULD BE EXCESSIVELY COSTLY TO THE
GOVERNMENT AND, THEREFORE, SHOULD NOT BE PURSUED. BASED ON THE
INFORMATION SET OUT IN THE OCTOBER 19 LETTER, WE MUST AGREE WITH THIS
CONCLUSION, AND WE THEREFORE SEE NO VALID BASIS FOR OBJECTION TO FUTURE
PURCHASES OF THE ITEMS FROM AEROQUIP ON A SOLE-SOURCE BASIS.
B-175325, DEC 21, 1972
CONTRACT - RELIEF FROM PERFORMANCE - CANCELLATION - CLAIM FOR EXPENSES
DENIAL OF REQUEST BY M & M PRECISION SYSTEMS, INC., FOR
RECONSIDERATION OF DECISION B-175325, AUGUST 9, 1972, WHICH HELD THAT
CANCELLATION WAS THE ONLY RELIEF AFFORDABLE UNDER A CONTRACT AWARDED BY
THE NAVY AIR ENGINEERING CENTER, PHILADELPHIA, PA., FOR PARACHUTE
DRYERS.
A CLAIM FOR PAYMENT ON A QUANTUM MERUIT OR QUANTUM VALEBAT BASIS CAN
BE RECOGNIZED ONLY IF THE GOVERNMENT HAS RECEIVED A BENEFIT UNDER THE
CONTRACT. 46 COMP. GEN. 348 (1966). THEREFORE, THE CONTRACTOR'S CLAIM
FOR WORK, MODIFICATION CHANGES, ENGINEERING AND MATERIAL COSTS IS AGAIN
DISALLOWED SINCE NO PARACHUTE DRYERS WERE DELIVERED TO THE GOVERNMENT.
TO M & M PRECISION SYSTEMS, INC.:
REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 8, 1972, WITH
ENCLOSURES, REQUESTING RECONSIDERATION OF DECISION B-175325, AUGUST 9,
1972, WHICH HELD THAT NO OTHER RELIEF THAN CANCELLATION OF CONTRACT NO.
N00156-72-C-1115 FOR PARACHUTE DRYERS WAS AUTHORIZED IN THE
CIRCUMSTANCES. WE FOUND THAT THE CONTRACTING OFFICER WAS ON NOTICE OF
THE POSSIBILITY OF ERROR IN YOUR BID AT THE TIME OF AWARD. IN VIEW OF
THAT KNOWLEDGE, HE COULD NOT BIND YOU TO PERFORM IN ACCORDANCE WITH THE
ADVERTISED SPECIFICATIONS WHICH DIFFERED FROM YOUR INTENDED APPROACH.
ON THE OTHER HAND, SINCE IN FORMAL ADVERTISING THE CONTRACT AWARDED MUST
BE THE CONTRACT ADVERTISED, THE CONTRACTING OFFICER HAD NO AUTHORITY TO
AWARD A CONTRACT WHICH VARIED FROM THE ADVERTISED SPECIFICATIONS.
ACCORDINGLY, NO VALID AND BINDING CONTRACT CAME INTO BEING EITHER FOR
PERFORMANCE UNDER YOUR INTENTION OR THE ADVERTISED SPECIFICATIONS.
YOU CONTEND THAT THE CONTRACT SHOULD HAVE BEEN TERMINATED IN OCTOBER
1971 AND THAT SINCE YOU INCURRED COSTS UNDER THE CONTRACT YOU SHOULD BE
REIMBURSED.
WHEN A CONTRACT IS INVALID, PAYMENT MAY BE AUTHORIZED ON A QUANTUM
MERUIT BASIS FOR THE REASONABLE VALUE OF WORK AND LABOR OR ON A QUANTUM
VALEBAT BASIS FOR THE REASONABLE VALUE OF GOODS SOLD AND DELIVERED. 46
COMP. GEN. 348 (1966). HOWEVER, BEFORE A RIGHT TO PAYMENT UNDER EITHER
BASIS MAY BE RECOGNIZED, IT MUST BE SHOWN THAT THE GOVERNMENT RETAINED
THE BENEFIT OF THE LABOR OF ANOTHER WITHOUT RECOMPENSE. ALTHOUGH YOU
CONTEND THAT YOU HAVE INCURRED SOME $24,000 IN WORK, MODIFICATION
CHANGES, ENGINEERING AND MATERIALS COSTS, YOUR FIRM DID NOT DELIVER ANY
PARACHUTE DRYERS AND THE GOVERNMENT THEREFORE HAS RECEIVED NO BENEFIT
WHATSOEVER UNDER THE CONTRACT.
SINCE NO TANGIBLE BENEFITS WERE RECEIVED AND RETAINED BY THE
GOVERNMENT, NO BASIS EXISTS FOR ALLOWING THE CLAIM.
B-176004, DEC 21, 1972
BID PROTEST - AGENCY DISCRETION - DEFICIENCY DISCUSSIONS DURING
NEGOTIATIONS - CONGRESSIONAL POLICY
DENIAL OF PROTEST ON BEHALF OF INTERNATIONAL ENGINEERING CO. AGAINST
THE AWARD OF A CONTRACT TO LITCOM, OF LITTON INDUSTRIES, INC., UNDER AN
RFQ ISSUED BY THE U.S. ARMY ELECTRONICS COMMAND, FORT MONMOUTH, N.J.
THE RESULTS OF THE TECHNICAL EVALUATION OF ALL SUBMITTED OFFERS WILL
NOT BE DISTURBED BY THE COMP. GEN. UNLESS THE ADMINISTRATIVE AGENCY'S
EVALUATION WAS ARBITRARY OR CAPRICIOUS. ALSO, 10 U.S.C. 2304(G) PLACES
WIDE DISCRETION WITH THE PROCURING AGENCY IN DETERMINING THE EXTENT OF
DEFICIENCY DISCUSSION TO BE HELD DURING COMPETITIVE PRE-AWARD
NEGOTIATIONS. 51 COMP. GEN. 431.
FURTHER, THE SELECTION OF LITCOM'S "PAPER PROMISES" OVER IEC'S
WORKING PROTOTYPE DOES NOT VIOLATE CONGRESSIONAL POLICY OF FAVORING
PROVEN HARDWARE SINCE THE PROCUREMENT CALLS FOR THE DEVELOPMENT OF
RATHER LIMITED NUMBER OF ITEMS.
TO VOM BAUR, COBURN, SIMMONS & TURTLE:
REFERENCE IS MADE TO THE MAY 19, 1972, TELEFAX FROM INTERNATIONAL
ENGINEERING COMPANY (IEC) AND TO SUBSEQUENT CORRESPONDENCE FROM YOUR
OFFICE, PROTESTING AGAINST AWARD OF A CONTRACT UNDER RFQ
DAAB07-72-Q-0081, ISSUED BY THE UNITED STATES ARMY ELECTRONICS COMMAND,
FORT MONMOUTH, NEW JERSEY.
THE SOLICITATION WAS FOR THE DEVELOPMENT AND FABRICATION OF 23
ENGINEERING DEVELOPMENT MODELS OF AN AN/PSN-6(V) LORAN POSITION FIXING
NAVIGATION SET, AND ANCILLARY ITEMS, PLUS CERTAIN OPTIONS. BASIC
PROPOSALS WERE SOUGHT FOR A LORAN SYSTEM LIGHT ENOUGH TO BE CARRIED IN A
MAN'S BACKPACK (REFERRED TO AS "MANPACK"). ALTERNATE PROPOSALS WERE
SOUGHT FOR A MANPACK WITH AN OFFSET TARGET CAPABILITY AND FOR A MANPACK
WITH DIFFERENT SIZE AND WEIGHT LIMITATIONS. THE FIVE INITIAL PROPOSALS
RECEIVED WERE TECHNICALLY EVALUATED AND ONLY THOSE SUBMITTED BY IEC AND
THE LITCOM DIVISION OF LITTON SYSTEMS, INCORPORATED (LITCOM), WERE FOUND
TO BE ACCEPTABLE, WITH LITCOM RECEIVING THE HIGHER TECHNICAL RATING.
NEGOTIATIONS WERE CONDUCTED WITH IEC AND LITCOM, AFTER WHICH BEST AND
FINAL OFFERS FOR A BASIC MANPACK WITH OFFSET TARGET CAPABILITY WERE
REQUESTED. AWARD OF A COST-PLUS-INCENTIVE-FEE CONTRACT WAS THEN MADE TO
LITCOM ON THE BASIS OF ITS HIGHER TECHNICAL RATING.
YOU ASSERT THAT THE TECHNICAL EVALUATION RESULTING IN A LOWER SCORE
FOR IEC THAN FOR LITCOM WAS ARBITRARY AND WITHOUT SUBSTANTIAL
FOUNDATION, AND THAT EACH AREA OF IEC'S PROPOSAL THAT THE ARMY
CONSIDERED TO BE DEFICIENT OR IN NEED OF CLARIFICATION WAS TRIVIAL. YOU
CLAIM THAT IN FACT IEC HAS A WORKING MODEL OF THE LORAN SYSTEM WHILE ALL
LITCOM OFFERS ARE "PAPER PROMISES." IN ADDITION, YOU STATE THAT THE ARMY
DID NOT INFORM IEC DURING NEGOTIATIONS THAT ELEMENTS OF ITS PROPOSAL
WERE CONSIDERED DEFICIENT AND DID NOT GIVE IEC AN OPPORTUNITY TO REVISE
ITS PROPOSAL IN ORDER TO MEET THE ARMY'S OBJECTIONS. YOU FURTHER CLAIM
THAT THE ARMY INDICATED TO LITCOM A PREFERENCE FOR A PARTICULAR KIND OF
COMPUTER BUT GAVE THE OPPOSITE INDICATION TO IEC.
THE ARMY, IN ITS ADMINISTRATIVE REPORT, DESCRIBES IEC'S PROPOSAL AS
"GOOD," BUT INDICATES THAT IT CONTAINED CERTAIN WEAKNESSES. AS EXAMPLES
OF THESE WEAKNESSES, THE REPORT CITES IEC'S ANTENNA INPUT DESIGN, THE
USE OF 6 KHZ BANDWIDTH NOTCH FILTERS ON THE LORAN SIGNAL, AND THE
ABSENCE OF AN ERROR ANALYSIS FROM THE SECTION OF THE PROPOSAL DEALING
WITH THE METHOD OF CONVERSION OF TIME DIFFERENCE NUMBERS TO UTM
COORDINATES. THE REPORT STATES THAT ALL SUCH AREAS WERE BROUGHT UP IN
NEGOTIATION SESSIONS AS AREAS REQUIRING CLARIFICATION, BUT THAT THE
"TECHNICAL DISCUSSIONS WITH IEC WERE NOT SATISFACTORY, LEAVING THE
TECHNICAL NEGOTIATORS WITH THE IMPRESSION THAT A NUMBER OF MARGINAL OR
INCOMPLETE DESIGN AREAS REMAINED AND THAT IEC EITHER DID NOT OR WOULD
NOT RECOGNIZE THESE WEAK AREAS." THE REPORT FURTHER STATES THAT IEC WAS
INFORMED THAT ITS RESPONSES WERE NOT SATISFACTORY, BUT THAT IEC MERELY
SUBMITTED WRITTEN CONFIRMATION OF THE SAME UNSATISFACTORY ANSWERS. ON
THE OTHER HAND, YOU CLAIM THAT THESE ALLEGED TECHNICAL DEFICIENCIES
EITHER DO NOT EXIST OR ARE "SO MINOR THAT ANY RELIANCE ON THEM BY THE
ARMY IS ARBITRARY ***" AND THAT IN ANY EVENT THE ARMY WAS LEGALLY
REQUIRED TO POINT OUT THESE AREAS DURING NEGOTIATION AS DEFICIENCIES AND
NOT MERELY AS AREAS REQUIRING CLARIFICATION.
IN SUPPORT OF YOUR CONTENTION THAT THE ARMY'S TECHNICAL EVALUATION
WAS ARBITRARY, YOU HAVE SUBMITTED A DETAILED DISCUSSION OF EACH AREA OF
THE IEC PROPOSAL THAT THE ARMY REGARDED AS WEAK. WHERE THE ARMY STATES
THAT IEC'S "ANTENNA INPUT DESIGN DID NOT RECOGNIZE THE DROP IN INPUT
SIGNAL LEVEL" AND "WOULD HAVE LACKED THE REQUIRED SENSITIVITY," YOU
CLAIM THAT THE DESIGN "DID IN FACT RECOGNIZE THE DROP IN INPUT SIGNAL
LEVEL" AND THAT IT "HAD THE REQUIRED SENSITIVITY." IN REBUTTING THE
ARMY'S STATEMENT THAT IEC FAILED TO SATISFACTORILY SHOW THE EFFECTS OF
USING THE 6 KHZ BANDWIDTH, YOU STATE THAT IEC DID JUST THAT BY
SUBMITTING A SET OF PHOTOGRAPHS OF "UNQUESTIONABLE CLARITY" THAT THE
ARMY HAS NOT EVEN ACKNOWLEDGED. YOU AGREE WITH THE ARMY THAT IEC DID
NOT PROVIDE AN ERROR ANALYSIS WITH ITS DESCRIPTION OF THE CONVERSION
METHOD TO UTM COORDINATES, BUT CLAIM THAT THE ERROR ANALYSIS WOULD NOT
HAVE ASSISTED THE ARMY IN EVALUATING IEC'S PROPOSAL AND THAT IEC DID
SUBMIT ALL THE NECESSARY DATA TO ENABLE THE ARMY TO EVALUATE THE
ACCURACY OF IEC'S EQUIPMENT. THE CONTRACTING OFFICER, RESPONDING TO
YOUR CLAIMS, REITERATES THE ARMY'S POSITION WITH RESPECT TO THE IEC
ANTENNA INPUT DESIGN AND THE 6 KHZ BANDWIDTH, AND STATES THAT THE ERROR
ANALYSIS WAS REQUIRED "TO SUBSTANTIATE THE PROPOSED DESIGN OFFERED BY
IEC."
THE RECORD INDICATES THAT A COMPREHENSIVE TECHNICAL EVALUATION OF THE
BASIC PROPOSALS WAS MADE IN ACCORDANCE WITH THE CRITERIA SET FORTH IN
SECTION D OF THE RFQ. EACH MEMBER OF THE TECHNICAL EVALUATION TEAM
NUMERICALLY RATED EACH PROPOSAL ON MORE THAN 40 ELEMENTS MAKING UP THE
FACTORS AND SUB-FACTORS LISTED IN THE RFQ. WHEN THESE RATINGS WERE
AVERAGED, IEC SCORED HIGHER THAN LITCOM IN SEVERAL AREAS WHILE LITCOM
RECEIVED THE HIGHER SCORE IN OTHER AREAS. IN SOME INSTANCES, THE TWO
OFFERORS RECEIVED IDENTICAL SCORES. THE NARRATIVE REPORT OF THE
EVALUATION TEAM POINTED OUT STRENGTHS AND WEAKNESSES OF EACH PROPOSAL
AND SUGGESTED CERTAIN AREAS FOR DISCUSSION DURING NEGOTIATION. IN THE
CASE OF IEC, NOTE WAS TAKEN OF ITS "SOLID BACKGROUND" AND "EXTENSIVE
EXPERIENCE IN THE LORAN FIELD," ALONG WITH SOME SPECIFIC "SHORTCOMINGS"
THAT WERE RECOMMENDED FOR DISCUSSION. AS FINALLY COMPUTED, BOTH THE
LITCOM AND THE IEC PROPOSALS WERE RATED TECHNICALLY ACCEPTABLE, ALTHOUGH
LITCOM'S PROPOSAL WAS SCORED SEVERAL POINTS HIGHER THAN IEC'S. WE DO
NOT FIND ANYTHING IN THE RECORD WHICH SUGGESTS THAT THIS EVALUATION WAS
IMPROPER, UNFAIR, OR CONDUCTED IN BAD FAITH. ALTHOUGH YOU TAKE
EXCEPTION TO THE ALLEGED WEAKNESSES IN THE IEC PROPOSAL REFERRED TO IN
THE ARMY REPORT, WE CANNOT SAY THAT THE OVERALL EVALUATION, WHICH
INCLUDED MANY ITEMS, WAS ARBITRARY OR CAPRICIOUS. ON THE CONTRARY, THE
SCORING OF EACH PROPOSAL APPEARS TO HAVE BEEN OBJECTIVE AND IS WELL
SUPPORTED BY THE NARRATIVE PORTION OF THE TECHNICAL REPORT.
WHILE IT IS CLEAR THAT THERE IS STRONG DISAGREEMENT BETWEEN IEC AND
THE ARMY AS TO THE VALIDITY OF THE TECHNICAL WEAKNESSES RAISED BY THE
ARMY DURING NEGOTIATION WITH IEC, IT IS GENERALLY NOT THE FUNCTION OF
OUR OFFICE TO RESOLVE DISPUTES OF THIS NATURE. B-167508, DECEMBER 8,
1969. THE RESOLUTION OF SUCH TECHNICAL DISPUTES PROPERLY FALLS WITHIN
THE WIDE RANGE OF DISCRETION RESERVED TO ADMINISTRATIVE AGENCIES. 48
COMP. GEN. 314 (1968). THE OVERALL DETERMINATION OF THE RELATIVE
DESIRABILITY AND TECHNICAL ADEQUACY OF THE IEC AND LITCOM PROPOSALS IS
PROPERLY A FUNCTION OF THE ARMY, AND WE HAVE NOT ATTEMPTED TO MAKE AN
INDEPENDENT EXAMINATION IN THIS RESPECT. SEE B-164552(1), FEBRUARY 24,
1969 AND B-173677, MARCH 31, 1972 (51 COMP. GEN. ___).
WITH RESPECT TO THE CONDUCT OF NEGOTIATIONS, YOU ASSERT THAT THE
ARMY, IN MERELY REQUESTING CLARIFICATIONS FROM IEC, DID NOT PROPERLY
NEGOTIATE WITH IEC BECAUSE NO INDICATION WAS GIVEN THAT THE ARMY
BELIEVED THERE WERE DEFICIENCIES IN ITS PROPOSAL AND THEREFORE IT HAD NO
OPPORTUNITY TO UPGRADE THE PROPOSAL. YOU ALSO STATE THAT WHEN SOME OF
THE AREAS FOR WHICH CLARIFICATION IS REQUESTED "ARE IN FACT PATENTLY
TRIVIAL, ANY REASONABLE OFFEROR MAY JUSTIFIABLY CONCLUDE THAT ALL THE
AREAS RAISED ARE TRIVIAL" AND ARE NOT IN NEED OF UPGRADING.
10 U.S.C. 2304(G) REQUIRES THAT NEGOTIATIONS BE HELD WITH OFFERORS IN
A COMPETITIVE RANGE. SUCH NEGOTIATIONS MUST BE "MEANINGFUL" AND MUST
INFORM OFFERORS "AS TO THE AREAS IN WHICH THEIR PROPOSALS ARE DEFICIENT
SO THAT COMPETITIVE OFFERORS ARE GIVEN A BASIC OPPORTUNITY TO FULLY
SATISFY THE GOVERNMENT'S REQUIREMENTS." 51 COMP. GEN. 431, 433 (1972).
HOWEVER, WE HAVE RECOGNIZED THAT IT IS NOT NECESSARY IN EVERY INSTANCE
TO POINT OUT DEFICIENCIES IN ORDER TO HAVE MEANINGFUL DISCUSSION.
B-173677, SUPRA. IN THAT CASE WE STATED THE FOLLOWING:
"*** WHETHER THE STATUTORY REQUIREMENT FOR DISCUSSIONS MUST INCLUDE
THE POINTING OUT OF DEFICIENCIES, AND THE EXTENT THEREOF, IS A MATTER OF
JUDGMENT PRIMARILY FOR DETERMINATION BY THE PROCURING AGENCY IN LIGHT OF
ALL THE CIRCUMSTANCES OF THE PARTICULAR PROCUREMENT AND THE REQUIREMENT
FOR COMPETITIVE NEGOTIATIONS, AND *** SUCH DETERMINATION IS NOT SUBJECT
TO QUESTION BY OUR OFFICE UNLESS CLEARLY ARBITRARY OR WITHOUT A
REASONABLE BASIS."
THE ARMY, OF COURSE, WAS PRECLUDED FROM POINTING OUT TO IEC EVERY
AREA IN WHICH LITCOM ACHIEVED A HIGHER SCORE OR PROVIDED MORE DETAIL.
B-164552(2), FEBRUARY 24, 1969. HOWEVER, ALTHOUGH NOT PHRASED IN TERMS
OF "DEFICIENCIES," THE ARMY DID CALL TO IEC'S ATTENTION CERTAIN AREAS OF
ITS PROPOSAL THAT WERE CONSIDERED WEAK. THE CONTRACTING OFFICER REPORTS
THAT "IEC WAS ASKED A NUMBER OF QUESTIONS TO CLARIFY THEIR PROPOSAL" AND
THAT THEY "WERE DISCUSSED IN NEGOTIATIONS." WHILE IEC MAY HAVE REGARDED
THE AREAS AS TRIVIAL, THE CONTRACTING OFFICER DENIES THAT THEY WERE
MINOR OR TRIVIAL. UNDER THESE CIRCUMSTANCES, WE SEE NO BASIS FOR
CONCLUDING THAT MEANINGFUL NEGOTIATIONS WERE NOT HELD WITH IEC.
YOU ALSO CLAIM THAT DURING NEGOTIATION THE ARMY INFORMED LITCOM THAT
IT WOULD FAVOR THE USE OF A GENERAL PURPOSE COMPUTER, SUCH AS THE
CONTROL DATA MODEL 469, BUT THAT IEC WAS TOLD JUST THE OPPOSITE. YOU
FURTHER INDICATE THAT THE ARMY WAS INTERESTED IN THE CONTROL DATA MODEL
469 COMPUTER FOR ANOTHER PROGRAM AND THAT THE USE OF THIS COMPUTER FOR
BOTH PROGRAMS "WOULD HAVE LED TO A SIGNIFICANT COST 'BREAK' FOR LITCOM
ON THIS PROGRAM." THE CONTRACTING OFFICER, HOWEVER, STATES THAT HE WAS
UNFAMILIAR WITH THE OTHER PROGRAM AND THAT IT WAS NOT CONSIDERED IN THIS
PROCUREMENT. HE ALSO DENIES THAT LITCOM WAS TOLD THAT THE ARMY FAVORED
USE OF THE MODEL 469 COMPUTER IN THE LORAN MANPACK. THE RECORD
ESTABLISHES THAT LITCOM'S ORIGINAL PROPOSAL WAS BASED ON UTILIZING THE
MODEL 469 COMPUTER, BUT IT DOES NOT INDICATE WHAT, IF ANYTHING, BOTH
LITCOM AND IEC WERE TOLD REGARDING THE USE OF THAT TYPE OF COMPUTER. IN
ANY EVENT, THE RECORD APPEARS TO SUPPORT THE CONTRACTING OFFICER'S
STATEMENT THAT THE AWARD TO LITCOM WAS BASED ON THE OVERALL SUPERIORITY
OF THAT COMPANY'S PROPOSAL AND NOT ON ANY ONE FACTOR.
FINALLY, YOU ASSERT THAT IEC IS THE ONLY FIRM TO HAVE BUILT A WORKING
PROTOTYPE OF A MANPACK LORAN UNIT, WHILE LITCOM HAS PROVIDED NOTHING BUT
PAPER PROMISES. YOU STATE THAT THERE IS AN "ENORMOUS GAP" BETWEEN WHAT
LITCOM HAS PREVIOUSLY PRODUCED AND WHAT IS REQUIRED FOR THE MANPACK IN
TERMS OF WEIGHT LIMITATIONS AND ALLOWABLE POWER SOURCE. YOU CLAIM THAT
AN AWARD TO LITCOM UNDER SUCH CIRCUMSTANCES VIOLATES CONGRESSIONAL
POLICY AGAINST RELIANCE ON PAPER PROMISES OVER PROVEN HARDWARE,
ESPECIALLY IN VIEW OF THE COST-REIMBURSABLE TYPE CONTRACT INVOLVED, AND
THAT "BY ACCEPTING LITCOM'S PAPER PROMISES, THE GOVERNMENT FACES THE
PROSPECT OF PAYING, UNDER A COST CONTRACT FOR AN EXTENSIVE RESEARCH AND
DEVELOPMENT EFFORT WITH NO CERTAINTY OF SUCCESS" WHICH YOU SAY CANNOT BE
JUSTIFIED WHEN "DEMONSTRATED HARDWARE IS IN EXISTENCE."
IN SUPPORT OF YOUR POSITION, YOU CITE OUR REPORT TO THE CONGRESS,
B-163058, NOVEMBER 19, 1970, ENTITLED "ADVERSE EFFECTS OF LARGE-SCALE
PRODUCTION OF MAJOR WEAPONS BEFORE COMPLETION OF DEVELOPMENT AND
TESTING," IN WHICH WE CRITICIZED DECISIONS TO GO INTO PRODUCTION PRIOR
TO COMPLETION OF FULL SCALE TESTING. AS THE TITLE INDICATES, OUR REPORT
CRITICIZED THE PRACTICE OF AUTHORIZING LARGE-SCALE PRODUCTION OF MAJOR
WEAPON SYSTEMS BEFORE THE SYSTEMS WERE PROVEN. IN THE INSTANT CASE WE
ARE CONCERNED WITH THE RELATIVE MERITS OF PROPOSALS TO DEVELOP A RATHER
LIMITED NUMBER OF LORAN MANPACK MODELS. WE FAIL TO SEE THE RELEVANCE OF
OUR PRIOR REPORT TO THE INSTANT SITUATION.
THE RECORD SHOWS THAT THE TECHNICAL EVALUATION OF THE PROPOSALS
INCLUDED THOROUGH CONSIDERATION OF EACH OFFEROR'S KNOWLEDGE OF
STATE-OF-THE-ART IN THE LORAN FIELD, THE PROPOSED USE OF PROVEN
COMPONENTS, AND THE LIKELIHOOD OF THE PROPOSED DESIGN'S MEETING SIZE,
WEIGHT AND POWER LIMITATIONS. THE AWARD TO LITCOM WAS BASED ON ITS
HIGHER TECHNICAL SCORE.
ACCORDINGLY, WE ARE UNABLE TO CONCLUDE THAT THE AWARD TO LITCOM WAS
IMPROPER, AND YOUR PROTEST MUST THEREFORE BE DENIED.
B-176206(2), DEC 21, 1972
PROCUREMENT PRACTICES - WORK OUTLINES - GAO RECOMMENDATIONS
CONCERNING THE PROTEST OF NATIONWIDE BUILDING MAINTENANCE, INC.,
UNDER TWO IFBS ISSUED BY CAMERON STATION.
THE COMP. GEN. RECOMMENDS THAT FUTURE SOLICITATIONS REQUIRING
OUTLINES OF THE BIDDER'S PROPOSED METHODS OF OPERATION CONTAIN A
STATEMENT AS TO THE PURPOSE OF THE REQUIREMENT AND, PARTICULARLY, HOW
THE OUTLINES WILL BE CONSIDERED BOTH IN THE SELECTION OF THE SUCCESSFUL
BIDDER AND IN THE ADMINISTRATION OF THE CONTRACT.
TO MR. SECRETARY:
REFERENCE IS MADE TO A LETTER DATED JULY 20, 1972 (SAOAS(I&L)-MO),
FROM THE ASSISTANT DEPUTY FOR MATERIEL ACQUISITION, FURNISHING OUR
OFFICE REPORTS RESPONSIVE TO THE PROTEST(S) OF NATIONWIDE BUILDING
MAINTENANCE, INC., (NATIONWIDE) UNDER IFB NOS. DAHC-30-72-B-0107, 0109
AND 0138 ISSUED BY CAMERON STATION. AS THE RECORD WILL REFLECT, THE
PROTEST UNDER -0109 WAS PREVIOUSLY WITHDRAWN BECAUSE OF AN AWARD TO THE
PROTESTER.
ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE ATTORNEYS FOR
NATIONWIDE DENYING THE PROTEST. WHILE, FOR THE REASONS STATED THEREIN,
WE COULD FIND NO LEGAL BASIS TO QUESTION THE AWARD AS MADE UNDER IFB
-0107, OR THE AWARD WHICH IS CONTEMPLATED TO BE MADE UNDER IFB -0138,
YOUR ATTENTION IS DIRECTED TO THAT PORTION OF OUR DECISION SUGGESTING
THAT FUTURE SOLICITATIONS REQUIRING OUTLINES OF THE BIDDERS' PROPOSED
METHODS OF OPERATION CONTAIN A STATEMENT AS TO THE PURPOSE OF THE
REQUIREMENT AND, PARTICULARLY, HOW THE OUTLINES WILL BE CONSIDERED BOTH
IN THE SELECTION OF THE SUCCESSFUL BIDDER AND IN THE ADMINISTRATION OF
THE CONTRACT.
THE ENCLOSURES FURNISHED WITH THE LETTER OF JULY 20 ARE RETURNED.
B-176232, DEC 21, 1972
MILITARY PERSONNEL - PER DIEM EXPENSES - TEMPORARY DUTY PRIOR TO
RELOCATION
DECISION ALLOWING THE PAYMENT OF PER DIEM EXPENSES FOR LT. (JG)
MICHAEL E. MAIERLA INCIDENT TO THE RELOCATION OF PATROL SQUADRON 8 FROM
PATUXENT RIVER, MD., TO THE NAVAL AIR STATION, BRUNSWICK, ME.
CLAIMANT'S REPORTING FOR TEMPORARY DUTY AT PATUXENT, PRIOR TO THE
RELOCATION OF HIS SQUADRON AT BRUNSWICK, ME., IS REIMBURSABLE FOR PER
DIEM UNDER JTR M3003-2A WHICH DEFINES "TEMPORARY DUTY" AS A DUTY STATION
OTHER THAN THE PERMANENT STATION. ALSO, JTR M4209 ALLOWS REIMBURSEMENT
WHEN A MEMBER IS DIRECTED TO REPORT TO THE PERMANENT STATION UPON
COMPLETION OF DUTY AT THE TEMPORARY STATION. ACCORDINGLY, PAYMENT OF
PER DIEM IS ALLOWED ONLY FOR CLAIMANT'S EXPENSES INCURRED AT PATUXENT
RIVER, MD., THE TEMPORARY DUTY STATION.
TO MR. R. T. BABBIN:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 29, 1972,
RECEIVED IN THIS OFFICE JUNE 14, 1972, IN WHICH YOU REQUEST A DECISION
AS TO THE LEGALITY OF PAYMENT OF PER DIEM ALLOWANCE IN THE CASE OF
LIEUTENANT (JG) MICHAEL E. MAIERLE, 000 00 1090, USN. YOUR SUBMISSION
HAS BEEN ASSIGNED PDTATAC CONTROL NO. 72-21 BY THE PER DIEM, TRAVEL AND
TRANSPORTATION ALLOWANCE COMMITTEE.
ON FEBRUARY 16, 1971, THE CHIEF OF NAVAL OPERATIONS PROMULGATED A
CHANGE OF PERMANENT DUTY STATION OF PATROL SQUADRON 8 FROM PATUXENT
RIVER, MARYLAND, TO NAVAL AIR STATION, BRUNSWICK, MAINE, EFFECTIVE JULY
1, 1971.
BY BUPERS ORDER 103657 DATED DECEMBER 16, 1970, LIEUTENANT MAIERLE
WAS ORDERED ON COMPLETION OF INSTRUCTION AT NAVAL AIR STATION, CORPUS
CHRISTI, TEXAS, TO REPORT FOR TEMPORARY DUTY AT NORFOLK, VIRGINIA, FOR
ABOUT 9 WEEKS UPON COMPLETION OF WHICH HE WAS TO REPORT TO PATROL
SQUADRON 30, NAS PATUXENT RIVER, MARYLAND, FOR TEMPORARY DUTY FOR ABOUT
8 WEEKS AND ON COMPLETION OF THAT DUTY HE WAS TO PROCEED TO THE PORT IN
WHICH PATROL SQUADRON 8 MAY BE.
WHILE PERFORMING TEMPORARY DUTY AT NORFOLK, VIRGINIA, LIEUTENANT
MAIERLE WAS INFORMED OF THE ABOVE-MENTIONED MESSAGE OF THE CHIEF OF
NAVAL OPERATIONS WHICH CHANGED THE HOME PORT OF PATROL SQUADRON 8 FROM
PATUXENT RIVER, MARYLAND, TO NAS BRUNSWICK, MAINE, EFFECTIVE JULY 1,
1971. HE WAS ALSO INFORMED THAT REIMBURSEMENT FOR DEPENDENT TRAVEL AND
SHIPMENT OF HOUSEHOLD GOODS TO NAS PATUXENT RIVER COMMENCING AFTER
FEBRUARY 16, 1971, PURSUANT TO HIS BUPERS ORDER WOULD NOT BE AUTHORIZED.
THE RECORD INDICATES THAT LIEUTENANT MAIERLE REPORTED FOR DUTY WITH
PATROL SQUADRON 30, NAS PATUXENT RIVER, MARYLAND, APRIL 7, 1971, AND AND
DEPARTED PATROL SQUADRON 30, JUNE 8, 1971, REPORTING TO PATROL SQUADRON
8 PATUXENT RIVER, MARYLAND, JUNE 8, 1971. ORDERS WERE ISSUED JUNE 8,
1971, DIRECTING HIM TO REPORT TO PATROL SQUADRON 8, NAS BRUNSWICK,
MAINE, NOT LATER THAN JUNE 30, 1971. HE DEPARTED NAS PATUXENT RIVER,
MARYLAND, JUNE 9, 1971, AND REPORTED FOR DUTY JUNE 30, 1971, AT NAS
BRUNSWICK, MAINE.
YOU INDICATE THAT LIEUTENANT MAIERLE HAS BEEN PAID A DISLOCATION
ALLOWANCE AND DEPENDENTS' TRAVEL FROM PENSACOLA, FLORIDA, TO BRUNSWICK,
MAINE. YOU REQUEST A DECISION CONCERNING HIS ENTITLEMENT TO PER DIEM
FOR THE PERIOD OF TEMPORARY DUTY AT PATUXENT RIVER.
BY SECOND ENDORSEMENT TO YOUR LETTER THE DIRECTOR, NAVY MILITARY PAY
SYSTEM INDICATES THAT SINCE LIEUTENANT MAIERLE WAS ADVISED THAT PATROL
SQUADRON 8'S PERMANENT DUTY STATION WOULD BE BRUNSWICK, MAINE, AND NOT
PATUXENT IT APPEARS HE MAY BE ENTITLED TO PER DIEM FOR THE ENTIRE PERIOD
OF TIME WHILE AT PATUXENT RIVER.
THE CHIEF OF NAVAL PERSONNEL IN THE THIRD ENDORSEMENT TO YOUR LETTER
INDICATES THAT LIEUTENANT MAIERLE REPORTED FOR DUTY JUNE 8, 1971, TO
PATROL SQUADRON 8, PATUXENT RIVER, MARYLAND, AND WAS ORDERED TO
BRUNSWICK, MAINE, BY ORDERS OF JUNE 8 WHICH ALLOWED 2 DAYS' TRAVEL, 4
DAYS' PROCEED AND UNSPECIFIED DELAY TO COUNT AS LEAVE. HE ALSO STATES
THAT ALTHOUGH LIEUTENANT MAIERLE DEPARTED PATUXENT RIVER JUNE 9, 1971,
AND REPORTED TO BRUNSWICK, MAINE, JUNE 30, 1971, HE WAS NOT REQUIRED TO
COMMENCE TRAVEL IN COMPLIANCE WITH HIS ORDERS UNTIL JUNE 29, 1971.
THEREFORE, IN VIEW OF OUR DECISION B-151257, JULY 22, 1963, 43 COMP.
GEN. 73, JUNE 29, 1971, WAS THE EFFECTIVE DATE OF HIS ORDERS AND THERE
APPEARS TO BE NO ENTITLEMENT TO PER DIEM FOR THE PERIOD OF TEMPORARY
DUTY AT PATUXENT RIVER, MARYLAND.
SECTION 404(A) OF TITLE 37, U.S. CODE, PROVIDES THAT UNDER
REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, A MEMBER OF A
UNIFORMED SERVICE IS ENTITLED TO TRAVEL AND TRANSPORTATION ALLOWANCES
FOR TRAVEL PERFORMED "WHEN AWAY FROM HIS DESIGNATED POST OF DUTY."
CONSEQUENTLY, REGARDLESS OF ANY OTHER CONSIDERATIONS, NO AUTHORITY
EXISTS FOR THE PAYMENT OF THOSE ALLOWANCES INCIDENT TO TEMPORARY DUTY
UNLESS SUCH TEMPORARY DUTY IS PERFORMED AT A POINT REMOVED FROM THE
MEMBER'S DESIGNATED POST OF DUTY OR PERMANENT STATION.
IT IS WELL ESTABLISHED THAT A MEMBER WHO, AFTER DETACHMENT FROM HIS
OLD PERMANENT STATION, PERFORMS TEMPORARY DUTY AT HIS NEW PERMANENT
STATION WHICH IS THEN HIS DESIGNATED POST OF DUTY MAY NOT BE VIEWED AS
BEING AWAY FROM HIS DESIGNATED POST OF DUTY WITHIN THE CONTEMPLATION OF
37 U.S.C. 404, DURING THE PERIOD OF SUCH TEMPORARY DUTY. 37 COMP. GEN.
140 (1957); 38 COMP. GEN. 656 (1959) AND 38 COMP. GEN. 697, 699 (1959).
PARAGRAPH M3003-2A OF THE JOINT TRAVEL REGULATIONS PROVIDES THAT THE
TERM "TEMPORARY DUTY" MEANS DUTY AT A LOCATION OTHER THAN THE PERMANENT
STATION. PARAGRAPH M4209 OF THESE REGULATIONS PROVIDES FURTHER THAT A
MEMBER WILL NOT BE ENTITLED TO PER DIEM FOR TEMPORARY DUTY UNDER ORDERS
WHICH DESIGNATE HIS TEMPORARY DUTY STATION AS HIS PERMANENT STATION,
EFFECTIVE EITHER IMMEDIATELY OR ON A LATER DATE, UNLESS THE
CHANGE-OF-STATION ORDERS SPECIFICALLY DIRECT HIS RETURN TO THE OLD
PERMANENT STATION ON OFFICIAL BUSINESS. 34 COMP. GEN. 427 (1955).
HOWEVER, IN THE CASE BEFORE US LIEUTENANT MAIERLE WAS SPECIFICALLY
INFORMED THAT THE TRANSPORTATION OF HOUSEHOLD GOODS AND DEPENDENT TRAVEL
WERE NOT AUTHORIZED TO PATUXENT RIVER, MARYLAND. HE REPORTED TO PATROL
SQUADRON 8 AT PATUXENT RIVER ON JUNE 8 AND WAS IMMEDIATELY ISSUED ORDERS
AUTHORIZING HIM TO DEPART ON LEAVE AND REPORT AT BRUNSWICK NOT LATER
THAN JULY 1, 1971, THE EFFECTIVE DATE OF THE SQUADRON'S CHANGE OF
PERMANENT STATION. HENCE, IT APPARENTLY WAS NOT INTENDED THAT HE WOULD
ACTUALLY REPORT TO PATROL SQUADRON 8 FOR THE PURPOSE OF PERFORMING HIS
NORMAL DUTIES UNTIL AFTER THE SQUADRON HAD MOVED TO NAS BRUNSWICK,
MAINE. THUS, IT IS OUR VIEW THAT LIEUTENANT MAIERLE MAY BE CONSIDERED
AS CONTINUING IN A TEMPORARY DUTY STATUS WHILE HE REMAINED AT PATUXENT
RIVER, MARYLAND.
ACCORDINGLY, THE VOUCHER IS RETURNED HEREWITH AND PAYMENT OF PER DIEM
ALLOWANCE FOR THE PERIOD OF TEMPORARY DUTY AT PATUXENT RIVER, MARYLAND
IS AUTHORIZED.
B-176325, DEC 21, 1972
BID PROTEST - RENEWAL OPTIONS - RESPONSIBILITY CRITERIA
DECISION DENYING A PROTEST ON BEHALF OF SERVICE DISTRIBUTORS, INC.,
AGAINST THE AWARD OF A CONTRACT TO ANY OTHER CONCERN UNDER AN IFB ISSUED
BY THE ARMY, FORT ORD, CAL., FOR THE FURNISHING, INSTALLATION, AND
MAINTENANCE OF WASHERS AND DRYERS.
A CONTRACT FOR ONE YEAR REQUIREMENTS WITH ANNUAL RENEWAL OPTIONS IS
NOT VIEWED AS A MULTI-YEAR CONTRACT WITHIN THE PURVIEW OF ASPR 1-322.5.
THUS, THE LOW BIDDER FOR THE CURRENT REQUIREMENTS PLUS THE RENEWAL
OPTION WILL BE AWARDED THE CONTRACT OVER THE LOW BIDDER FOR THE CURRENT
REQUIREMENTS ONLY. ALSO, THE SUCCESSFUL BIDDER'S FAILURE TO BE LISTED
WITH DUN & BRADSTREET OR ITS ALLEGED UNFAMILIARITY WITH THE PERFORMANCE
LOCALE, DOES NOT AFFECT THE BIDDER'S RESPONSIBILITY. ACCORDINGLY, THE
PROTEST IS DENIED.
TO WAHL AND WAHL:
REFERENCE IS MADE TO YOUR LETTERS OF JUNE 22, 1972, AND AUGUST 14,
1972, ON BEHALF OF SERVICE DISTRIBUTORS, INCORPORATED, PROTESTING
AGAINST THE AWARD OF A CONTRACT TO ANOTHER CONCERN UNDER INVITATION FOR
BIDS NO. DABF07-72-B-0113, ISSUED ON MAY 4, 1972, BY THE DEPARTMENT OF
THE ARMY, FORT ORD, CALIFORNIA.
THE SOLICITATION IS FOR THE RENTAL AND MAINTENANCE OF WASHERS AND
DRYERS AT FORT ORD. ITEMS 0001 AND 0002 ARE FOR FURNISHING, INSTALLING
AND REMOVING A STATED QUANTITY OF WASHERS AND DRYERS. ITEMS 0003 AND
0004 ARE FOR MAINTENANCE AND RENTAL OF THIS EQUIPMENT FOR A STATED
NUMBER OF SERVICE MONTHS. DIRECTLY BELOW ITEM 0004 APPEARS THE
FOLLOWING STATEMENT:
"THE FOLLOWING ARE APPLICABLE ONLY IF THIS CONTRACT IS EXTENDED
PURSUANT TO J-1."
NEXT FOLLOWS ITEMS 0005 THROUGH 0008 WHICH ARE FOR ESTIMATED
QUANTITIES EXPRESSED IN TERMS OF SERVICE MONTHS FOR MAINTENANCE AND
RENTAL OF WASHERS AND DRYERS FOR FISCAL YEARS 1974 AND 1975. SECTION
J-1 PROVIDES:
"THIS CONTRACT IS RENEWABLE, AT THE OPTION OF THE GOVERNMENT, BY THE
CONTRACTING OFFICER GIVING WRITTEN NOTICE OF RENEWAL TO THE CONTRACTOR
NOT LATER THAN THIRTY (30) CALENDAR DAYS PRIOR TO THE CONTRACT
COMPLETION DATE IN THE SCHEDULE; PROVIDED, THAT THE CONTRACTING OFFICER
SHALL HAVE GIVEN PRELIMINARY NOTICE OF THE GOVERNMENT'S INTENTION TO
RENEW AT LEAST SIXTY (60) DAYS BEFORE THIS CONTRACT IS TO EXPIRE. (SUCH
A PRELIMINARY NOTICE WILL NOT BE DEEMED TO COMMIT THE GOVERNMENT TO
RENEWALS.) IF THE GOVERNMENT EXERCISES THIS OPTION FOR RENEWAL, THE
CONTRACT AS RENEWED SHALL BE DEEMED TO INCLUDE THIS OPTION PROVISION.
HOWEVER, THE TOTAL DURATION OF THIS CONTRACT, INCLUDING THE EXERCISE OF
ANY OPTIONS UNDER THIS CLAUSE, SHALL NOT EXCEED 3 YEARS."
SECTION D STATES THAT BIDS WILL BE EVALUATED ON THE PRICES BID FOR
ALL ITEMS ON THE SCHEDULE INCLUDING THE OPTION ITEMS BUT THAT EVALUATION
OF THE OPTIONS DOES NOT OBLIGATE THE GOVERNMENT TO EXERCISE ANY OPTIONS.
BIDDERS ARE WARNED THAT A BID WHICH IS MATERIALLY UNBALANCED AS TO
PRICES FOR BASIC AND OPTION QUANTITIES MAY BE REJECTED AS NONRESPONSIVE.
BIDS WERE OPENED ON JUNE 2, 1972, AND THE ONLY TWO BIDDERS WERE
SERVICE DISTRIBUTORS, INCORPORATED, AND ALLIANCE PROPERTIES,
INCORPORATED.
A COMPARISON OF THE TWO BIDS FOLLOWS:
BIDDER CURRENT REQUIREMENTS OPTION GRAN
ITEMS 1 THROUGH 4 FISCAL YEAR 1974 TOTAL
(TOTAL BID) AND 1975 REQUIREMENTS
ITEMS 5 THROUGH 8
(TOTAL BID)
SERVICE
DISTRIBUTORS $168,428.08 $302,914.56 $471,342.
ALLIANCE
PROPERTIES 203,996.00 255,740.00 459,740.
THE PROCURING ACTIVITY PURPOSES TO MAKE AN AWARD TO ALLIANCE
PROPERTIES AS THE LOW BIDDER FOR THE CURRENT AND OPTION QUANTITIES. YOU
HAVE PROTESTED AGAINST THIS PROPOSED AWARD.
YOUR FIRST SERIES OF CONTENTIONS ARE BASED UPON THE ASSUMPTION THAT
THIS IS A MULTI-YEAR PROCUREMENT. THE PROVISIONS RELATING TO MULTI-YEAR
PROCUREMENTS IN THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND
TITLE 32, CODE OF FEDERAL REGULATIONS (CFR) ARE IDENTICAL. OUR
REFERENCES WILL BE TO ASPR. YOU URGE THAT THE SOLICITATION DID NOT
PERMIT A SINGLE-YEAR BID AND, THEREFORE, THE AWARD MADE WAS PRECLUDED BY
ASPR 1-322.3(B)(II) WHICH REQUIRES A RESOLICITATION IN A MULTI-YEAR
PROCUREMENT WHERE AWARD IS TO BE ON A SINGLE-YEAR BASIS BUT THE
SOLICITATION DOES NOT PERMIT THE SOLICITATION OF PRICES ON A SINGLE-YEAR
BASIS. YOU THEN ARGUE THAT EVEN ASSUMING A SINGLE-YEAR AWARD COULD BE
MADE THE AWARD SHOULD BE TO SERVICE DISTRIBUTORS AS THE LOW BIDDER ON
THAT BASIS. YOU ALSO ALLEGE THAT THE MULTI-YEAR TYPE OF PROCEDURE IN
THIS CASE VIOLATES ASPR 1-322.6(C)(I), SINCE FISCAL YEAR FUNDS ARE
INVOLVED.
THE ADMINISTRATIVE POSITION, WITH WHICH WE AGREE, IS THAT YOUR
REFERENCE TO THE PROVISIONS RELATIVE TO MULTI-YEAR PROCUREMENTS DOES NOT
APPLY SINCE THIS PROCUREMENT IS FOR A SINGLE YEAR REQUIREMENT WITH
OPTIONS FOR TWO SUCCEEDING YEARS. THE INSTANT SOLICITATION DOES NOT
CONTAIN THE CLAUSES REQUIRED BY ASPR 1-322.5 TO BE INCLUDED IN
MULTI-YEAR SOLICITATIONS. FURTHERMORE, VARIOUS PROVISIONS OF THE
SOLICITATION MADE IT CLEAR THAT ALTHOUGH BIDS WILL BE EVALUATED FOR ALL
ITEMS, INCLUDING THE OPTION QUANTITIES, THE AWARD OBLIGATES THE
GOVERNMENT FOR ONLY FISCAL YEAR 1973.
ASPR 1-1504(D)(II) PROVIDES THAT THE OPTION QUANTITY MAY BE INCLUDED
IN THE EVALUATION IF IT HAS BEEN DETERMINED AT A LEVEL HIGHER THAN THE
CONTRACTING OFFICER THAT REALISTIC COMPETITION OF THE OPTION QUANTITY IS
IMPRACTICABLE ONCE THE INITIAL CONTRACT IS AWARDED AND IT IS IN THE BEST
INTEREST OF THE GOVERNMENT TO EVALUATE THE OPTION IN ORDER TO PREVENT A
"BUY IN." THE REGULATION PROVIDES THAT THIS DETERMINATION SHALL BE BASED
UPON FACTORS, SUCH AS, BUT NOT LIMITED TO, SUBSTANTIAL STARTUP OR
PHASE-IN COSTS, SUPERIOR TECHNICAL ABILITY RESULTING FROM PERFORMANCE OF
THE INITIAL CONTRACT, AND LONG PREPRODUCTION LEAD TIME FOR A NEW
PRODUCER. WE HAVE NO OBJECTION TO EVALUATION OF OPTIONS IN ACCORDANCE
WITH THIS PROVISION. 49 COMP. GEN. 787 (1970).
THE REASON GIVEN FOR INCLUDING THE OPTION QUANTITIES IN THE
EVALUATION IS THAT THE PROCURING ACTIVITY ASSUMED THAT THE TOTAL CAPITAL
EXPENDITURE WOULD BE INCLUDED IN THE FIRST YEAR OF THE CONTRACT SINCE
THERE IS VIRTUALLY NO MARKET FOR USED WASHERS AND DRYERS EVEN THOUGH
WASHERS AND DRYERS IN PUBLIC PLACES HAVE AN EXPECTED USEFUL LIFE OF
THREE YEARS. IT WAS FELT THAT ONCE A BIDDER HAD RECOUPED ITS CAPITAL
EXPENDITURES, IT COULD AFFORD TO BID LOWER THAN ITS COMPETITORS FOR THE
SECOND AND THIRD YEAR CONTRACTS AND STILL BID HIGH ENOUGH TO MAKE A
PROFIT. IN THE CIRCUMSTANCES, THE PROCURING ACTIVITY CONCLUDED THAT THE
CRITERIA FOR INCLUDING THE OPTIONS IN THE EVALUATION HAD BEEN MET. WE
FIND WE MUST AGREE. ALLIANCE PROPERTIES' BID EVALUATED ON THIS BASIS
WOULD, THEREFORE, BE THE LOW BID.
WITH RESPECT TO YOUR CONTENTION ON THE FUNDING ASPECTS, WE ARE
ADVISED THAT THE VERY REASON FOR DECIDING AGAINST USING THE MULTI-YEAR
PROCEDURE WAS TO AVOID VIOLATING ASPR 1-322.6(C)(I) SINCE FISCAL YEAR
FUNDS ARE INVOLVED.
YOU HAVE CITED ASPR 1-322.7(J) AND URGE THAT THE SOLICITATION WAS
DEFECTIVE SINCE THE OPTIONS COVERED A LONGER PERIOD THAN THE BASIC
PERIOD OF THE CONTRACT. THE PROVISION CITED RELATES TO OPTIONS FOR
INCREASING QUANTITIES OR RENEWING THE CONTRACT IN ADDITION TO MULTI-YEAR
REQUIREMENTS, AND THE REGULATION PROVIDES THAT SUCH OPTIONS SHALL NOT
EXCEED A PERIOD EQUAL TO THE BASIC CONTRACT PERIOD OR THREE YEARS,
WHICHEVER IS LESS. SINCE AS INDICATED ABOVE THIS PROCUREMENT IS A
ONE-YEAR CONTRACT WITH OPTIONS, THE CITED PROVISION DOES NOT APPLY.
YOUR NEXT CONTENTION IS THAT THE PROCURING ACTIVITY DID NOT REPLY TO
SERVICE DISTRIBUTORS' REQUEST FOR CERTAIN INTERPRETATIONS FORWARDED TO
THE PROCURING ACTIVITY ON MAY 19, 1972, PRIOR TO BID OPENING. PROCURING
OFFICIALS REPORTEDLY MET WITH YOUR CLIENT ON MAY 18, 1972, AND DISCUSSED
THE QUESTIONS WHICH ARE THE SUBSTANCE OF THAT LETTER. IT WAS BELIEVED
THAT ALL OF THE QUESTIONS EXCEPT POINTS 1 AND 3 HAD BEEN ANSWERED. WITH
REGARD TO QUESTIONS 1 AND 3 THEY WERE COVERED BY AMENDMENT NO. 0001 TO
THE INVITATION. EVEN THOUGH SERVICE DISTRIBUTORS WAS NOT GIVEN A FORMAL
RESPONSE TO ITS LETTER OF MAY 19, IT DOES NOT APPEAR THAT ANY MISLEADING
INFORMATION WAS GIVEN TO IT OR THAT ANY MATERIAL INFORMATION WAS
DELIBERATELY WITHHELD.
YOUR FINAL POINT QUESTIONS WHETHER ALLIANCE PROPERTIES WAS A
RESPONSIBLE BIDDER. YOU ALLEGE THAT THIS BIDDER IS NOT KNOWN TO LAUNDRY
CONCESSIONAIRES IN THE NORTHERN CALIFORNIA AREA; THAT AN INSPECTION OF
ITS FACILITIES DID NOT REVEAL ANY EVIDENCE THAT IT WAS MAINTAINING A
SERVICE DEPARTMENT; THAT ALLIANCE PROPERTIES IS NOT LISTED IN DUN &
BRADSTREET; AND THAT WITHIN MINUTES FOLLOWING THE BID OPENING ALLIANCE
PROPERTIES OFFERED TO SUBCONTRACT ALL OF THE WORK TO YOUR CONCERN. YOU
ADVISE THAT THE SOLICITATION DID NOT REQUIRE EVIDENCE OF ADEQUATE
FINANCIAL RESOURCES OR THE POSTING OF A PERFORMANCE BOND DESPITE THE
FACT THAT PERFORMANCE BONDS ARE COMMONPLACE IN THIS TYPE OF PROCUREMENT.
THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES REGION (DCASR), SAN
FRANCISCO, HAS RECOMMENDED COMPLETE AWARD TO ALLIANCE PROPERTIES.
DCASR'S REPORT GAVE ALLIANCE PROPERTIES A SATISFACTORY RATING IN ALL
CATEGORIES. THE FOLLOWING ARE SOME EXAMPLES:
(1) TECHNICAL CAPABILITY: THE CONTRACTOR WAS FOUND TO HAVE
ADEQUATELY PLANNED HIS PURCHASING AND VERIFIED AVAILABILITY OF PERSONNEL
AND EQUIPMENT;
(2) PRODUCTION CAPABILITY: CONTRACTOR HAS PERSONNEL STANDING BY
WAITING TO PERFORM, LEASE TRUCKS ARE AVAILABLE FOR IMMEDIATE DELIVERY,
TOOLING AND SUPPLIES REQUIRED FOR MAINTENANCE ARE STANDARD OFF-THE-SHELF
ITEMS FROM HARDWARE STORES;
(3) PLANT FACILITIES AND EQUIPMENT: THESE ARE LEASED, RENTED, OR
FURNISHED NEAR THE AREA OF CONTRACTOR'S PERFORMANCE;
(4) LABOR RESOURCES: BIDDER HAS EXPERIENCED MEN READY TO PERFORM;
(5) ABILITY TO MEET DESIRED SCHEDULE: PERFORMANCE ON THIS CONTRACT
WOULD BE A ROUTINE OPERATION.
BIDDER HAS PERFORMED ON OVER 250 BUILDING MAINTENANCE BASE
PROCUREMENT TYPE CONTRACTS IN THE PAST 14 YEARS. DURING THIS PERIOD
BIDDER HAS MAINTAINED OVER 5,000 WASHERS AND DRYERS, HEAT PUMPS, AIR
CONDITIONERS, GAS AND ELECTRIC RANGES, HEATERS AND GARBAGE DISPOSALS.
THE DCASR REPORT INDICATES A DUN AND BRADSTREET REPORT ON ALLIANCE
PROPERTIES IS PRESENTLY IN THE PROCESS OF PREPARATION.
PURSUANT TO OUR REVIEW WE FIND THAT THE RECORD ADEQUATELY DOCUMENTS
AND SUPPORTS THE CONTRACTING OFFICER'S FINDING THAT ALLIANCE PROPERTIES
IS A RESPONSIBLE PROSPECTIVE CONTRACTOR; THEREFORE, THIS DETERMINATION
MAY NOT BE QUESTIONED BY OUR OFFICE. 46 COMP. GEN. 371 (1966).
THE CONTRACTING OFFICER HAS DETERMINED THAT PAYMENT AND PERFORMANCE
BONDS WERE NOT NECESSARY TO ASSURE PERFORMANCE OF THE CONTRACT IN THIS
CASE. WE FIND NO BASIS FOR QUESTIONING THIS DETERMINATION.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176431, DEC 21, 1972
BID PROTEST - BIDDER'S PAST PERFORMANCE - STATUTORY PREFERENCE
DECISION CONCERNING THE DENIAL OF A PROTEST ON BEHALF OF CARRY-ON,
INC., AGAINST THE AWARD OF A CONTRACT BY THE NATIONAL PARK SERVICE
(NPS), TO GOVERNMENT SERVICES, INC. (GSI), FOR OPERATION OF CONCESSIONS
AT VARIOUS LOCATIONS IN THE NATIONAL CAPITAL PARKS, WASHINGTON, D.C.
A "FACT SHEET" PREPARED BY NPS AND DISTRIBUTED TO ALL PROSPECTIVE
BIDDERS REQUESTED CONCESSION SERVICE AT ALL THE NPS SITES IN THE
WASHINGTON AREA. SINCE THE PROPOSAL OF CARRY-ON WAS LIMITED TO ONLY ONE
SITE AND CONTAINED OTHER DEFICIENCIES, THE CONTRACT WAS AWARDED TO GSI
PRIMARILY ON ITS PAST PERFORMANCE RECORD WITH GOVERNMENT CONCESSION
CONTRACTS. THUS, THE AWARD TO GSI WAS PROPER SINCE 16 U.S.C. 20
ENCOURAGES CONTINUITY OF OPERATIONS, FACILITIES, AND SERVICES BY GIVING
PREFERENCE TO CONCESSIONERS WHO HAVE SUCCESSFULLY PERFORMED THEIR
OBLIGATIONS UNDER PRIOR CONTRACTS.
TO H. NEIL GARSON:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 6, 1972, WITH
ENCLOSURES, AND PRIOR CORRESPONDENCE, SETTING FORTH THE PROTEST OF
CARRY-ON, INCORPORATED (CARRY-ON), AGAINST THE AWARD OF A CONTRACT BY
THE NATIONAL PARK SERVICE (NPS), TO GOVERNMENT SERVICES, INCORPORATED
(GSI), FOR OPERATING THE CONCESSIONS AT VARIOUS LOCATIONS IN THE
NATIONAL CAPITAL PARKS, WASHINGTON, D.C.
GSI HAS OPERATED THE CONCESSIONS IN THE NATIONAL CAPITAL PARKS,
WASHINGTON, D.C., PURSUANT TO A LONG-TERM CONTRACT WHICH EXPIRED
DECEMBER 31, 1970. THE CONTRACT WAS EXTENDED BY FORMAL AMENDMENT FOR
ONE YEAR, AND DURING THE FIRST EIGHT MONTHS OF 1972, GSI OPERATED THE
CONCESSIONS WITHOUT A FORMAL EXTENSION OF THE CONTRACT. DURING THE
EXTENDED CONTRACT PERIOD, GSI AND NPS ENGAGED IN DISCUSSIONS CONCERNING
IMPROVEMENTS IN CONCESSION FACILITIES IN THE NATIONAL CAPITAL PARKS AREA
AND THE TERMS OF A NEW CONTRACT COMMENSURATE WITH THOSE DISCUSSIONS. AS
A RESULT, NPS PREPARED A "FACT SHEET" UNDER WHICH A NEW CONTRACT WOULD
BE NEGOTIATED.
THE FACT SHEET NOTED THAT GSI HAD BEEN CONDUCTING CONCESSION
OPERATIONS AT NATIONAL CAPITAL PARKS, WASHINGTON, D.C., IN A MANNER
SATISFACTORY TO THE SECRETARY OF THE INTERIOR AND THAT:
"*** IN CONNECTION WITH THE NEGOTIATION OF A NEW LONG-TERM CONCESSION
CONTRACT FOR THIS OPERATION, ATTENTION IS INVITED TO SECTION 5 OF THE
ACT OF OCTOBER 9, 1965 (79 STAT. 969; 16 U.S.C. 20) WHICH PROVIDES AS
FOLLOWS:
"'SEC. 5. THE SECRETARY SHALL ENCOURAGE CONTINUITY OF OPERATION AND
FACILITIES AND SERVICES BY GIVING PREFERENCE IN THE RENEWAL OF CONTRACTS
OR PERMITS AND IN THE NEGOTIATION OF NEW CONTRACTS OR PERMITS TO THE
CONCESSIONERS WHO HAVE PERFORMED THEIR OBLIGATIONS UNDER PRIOR CONTRACTS
OR PERMITS TO THE SATISFACTION OF THE SECRETARY. TO THIS END, THE
SECRETARY, AT ANY TIME IN HIS DISCRETION, MAY EXTEND OR RENEW A CONTRACT
OR PERMIT, OR MAY GRANT A NEW CONTRACT OR PERMIT TO THE SAME
CONCESSIONER UPON THE TERMINATION OR SURRENDER BEFORE EXPIRATION OF A
PRIOR CONTRACT OR PERMIT. BEFORE DOING SO, HOWEVER, AND BEFORE GRANTING
EXTENSIONS, RENEWALS OR NEW CONTRACTS ***, THE SECRETARY SHALL GIVE
REASONABLE PUBLIC NOTICE OF HIS INTENTION SO TO DO AND SHALL CONSIDER
AND EVALUATE ALL PROPOSALS RECEIVED AS A RESULT THEREOF.'"
AS REQUIRED BY THE ABOVE LAW, NPS PUBLISHED IN THE FEDERAL REGISTER
OF NOVEMBER 5, 1971, A NOTICE OF INTENT TO NEGOTIATE A LONG-TERM
CONCESSION CONTRACT FOR THE NATIONAL CAPITAL PARKS. THE NOTICE ALSO
STATED THAT GSI HAD PERFORMED SATISFACTORILY UNDER THE PRESENT CONTRACT
AND THAT GSI WOULD BE GIVEN A PREFERENCE IN THE NEGOTIATION OF A NEW
CONTRACT IN ACCORDANCE WITH THE ABOVE-QUOTED ACT.
A FACT SHEET WAS SENT TO CARRY-ON AT ITS REQUEST AND IT SUBMITTED A
PROPOSAL. CARRY-ON'S PROPOSAL WAS EVALUATED AND THEN REJECTED BASED ON
A DETERMINATION THAT CARRY-ON DID NOT HAVE ADEQUATE MANAGERIAL AND
FINANCIAL RESOURCES. THE EVALUATION TEAM ALSO NOTED THAT CARRY-ON'S
PROPOSAL WAS ONLY FOR THE COLUMBIA ISLAND MARINA, WHEREAS IT WAS
CONTEMPLATED THAT THE CONTRACT WOULD COVER SOME 20 EXISTING FACILITIES.
A CONTRACT WAS AWARDED TO GSI ON AUGUST 22, 1972, RETROACTIVE TO JANUARY
1, 1972.
YOU CONTEND THAT GSI AND NPS WORKED TOGETHER IN ORDER TO PRODUCE A
FACT SHEET HIGHLY FAVORABLE TO GSI, ELIMINATING ANY POSSIBILITY OF FAIR
AND EQUAL COMPETITIVE BIDDING. YOU ASSERT THAT THE FACT SHEET WAS
DEFICIENT IN 16 RESPECTS SO AS TO PRECLUDE ALL BUT GSI FROM SUBMITTING A
RESPONSIVE PROPOSAL. SOME OF THE DEFICIENCIES CITED ARE FAILURE TO
STATE THAT THE CONCESSION CONTRACT WOULD INCLUDE THE ENTIRE 20
OPERATIONS DISCUSSED THEREIN; LACK OF FINANCIAL DATA ON THE COLUMBIA
ISLAND MARINA (COLUMBIA) OPERATION; FAILURE TO PROVIDE A LISTING OF
GOVERNMENT VERSUS GSI OWNERSHIP OF PROPERTY AT COLUMBIA; FAILURE TO
INDICATE WHETHER THE CONCESSIONER OR GOVERNMENT IS TO PAY FOR THE
CONSTRUCTION AND IMPROVEMENT PROGRAM; NO INFORMATION ON EXPECTED OR
HISTORIC MAINTENANCE AND OPERATING COSTS OF EACH OF THE CONCESSIONS;
AND LACK OF DETAILS FOR THE IMPROVEMENTS CONTEMPLATED AT THE COLUMBIA
MARINA.
YOU ALSO QUESTION THE VALIDITY OF NPS'S CONCLUSION THAT THE PRESENT
CONCESSIONER'S PERFORMANCE WAS SATISFACTORY. IN THIS CONNECTION, YOU
CONTEND THAT GSI'S PERFORMANCE AT THE COLUMBIA MARINA WAS UNSATISFACTORY
BECAUSE OF VIOLATIONS OF FIRE AND SAFETY LAWS AND REGULATIONS;
PERMITTING AND ENCOURAGING RACIAL DISCRIMINATION; POOR MANAGEMENT
THROUGH HAPHAZARD ASSIGNMENT OF SLIPS AND OPERATION AT 50 PERCENT OF
CAPACITY WHEN THERE IS A WAITING LIST FOR SLIPS; FAILURE TO PROVIDE
PROPER PROTECTIVE SERVICE; AND FAILURE TO PROPERLY MAINTAIN THE PIERS.
YOU ALSO ARGUE THAT NPS'S DETERMINATION SHOULD NOT STAND IN THE ABSENCE
OF A HEARING AND AN OPPORTUNITY TO PRESENT EVIDENCE ON THESE CHARGES.
FINALLY, YOU QUESTION NPS'S JUDGMENT IN CONCLUDING THAT CARRY-ON
LACKED THE REQUISITE MANAGERIAL AND FINANCIAL CAPACITY, POINTING OUT
THAT THE BIOGRAPHIES OF ITS OFFICERS INDICATE THAT THEY ARE QUALIFIED
THROUGH EDUCATION AND BUSINESS EXPERIENCE AND IT HAS BOTH BANKING AND
INDIVIDUAL INTEREST IN FINANCING ITS OPERATION UPON RECEIPT OF THE
NECESSARY FINANCIAL DATA FROM NPS.
IT IS NPS'S POSITION THAT UNDER THE ACT IT IS REQUIRED ONLY TO GIVE
REASONABLE PUBLIC NOTICE OF ITS INTENTION TO NEGOTIATE A NEW CONTRACT,
WHICH IT DID BY PUBLICATION IN THE FEDERAL REGISTER, AND THAT THERE IS
NO REQUIREMENT FOR THE ISSUANCE OF A FACT SHEET. HOWEVER, IN
RECOGNITION OF THE CONGRESSIONAL MANDATE FOR CONTINUITY OF OPERATIONS
WITH EXISTING SATISFACTORY CONCESSIONERS, AND TO ASSIST OTHER INTERESTED
PARTIES IN PREPARING OFFERS, NPS'S CONCESSIONS MANAGEMENT GUIDELINES
PROVIDE THAT,
"UPON MAKING A DETERMINATION THAT THE CONCESSION OPERATION SHOULD
CONTINUE AND THE PRESENT CONCESSIONER WISHES TO CONTINUE, A PROPOSED
FACT SHEET SHOULD BE DRAWN UP TAKING INTO CONSIDERATION THE
CONCESSIONER'S PROPOSAL AND THE DESIRES OF THE SERVICE."
IN ADDITION, THE GUIDELINES PROVIDE, IN GENERAL TERMS, SUGGESTED
ITEMS FOR INCLUSION IN THE PROPOSED FACT SHEET, AND FOR THE
CONCESSIONER'S ACCEPTANCE OF THE PROPOSED FACT SHEET PRIOR TO
PUBLICATION IN THE FEDERAL REGISTER. FURTHERMORE, NPS POINTS OUT THAT
ITS REPRESENTATIVES WERE AVAILABLE TO PROVIDE ADDITIONAL INFORMATION
DURING THE 30-DAY PERIOD FOR SUBMISSION OF PROPOSALS, AND THAT CARRY-ON
AVAILED ITSELF OF THIS SERVICE.
BASED UPON ITS EVALUATION OF CARRY-ON'S PROPOSAL SUBMITTED WITHIN THE
30 DAYS, NPS SUMMARIZED ITS CONCLUSION THAT THE PROPOSAL WAS NOT
ACCEPTABLE FROM A MANAGERIAL AND FINANCIAL STANDPOINT, AND BECAUSE IT
RELATED TO ONLY THE COLUMBIA MARINA, IN THE FOLLOWING WORDS.
"1. THE FACT SHEET ANTICIPATED ALL OPERATIONS WOULD BE INCLUDED
UNDER ONE CONTRACT. IT WAS NOT THE INTENT TO AUTHORIZE ANY ONE
SEPARATELY. ANY DECISION TO GO ON INDIVIDUAL OPERATIONS WOULD REQUIRE
THE ISSUANCE OF A NEW FACT SHEET, PERMITTING ALL INTERESTED APPLICANTS
TO SUBMIT OFFERS ON THAT BASIS.
"2. THE FINANCIAL QUALIFICATIONS OF CARRY-ON, INC., ARE INADEQUATE.
THERE IS NO CASH COMMITTED TO THE OPERATION OTHER THAN WHAT IS PROPOSED
TO BE OBTAINED FROM GSI THROUGH THE TRANSFER OF SLIP RENTALS FOR THE
3-MONTH PERIOD JANUARY 1 THROUGH MARCH 31, 1972. FUNDS FOR THE
ACQUISITION OF GSI POSSESSORY INTEREST AND THE CONSTRUCTION AND
IMPROVEMENT PROGRAM ARE TO BE OBTAINED ENTIRELY THROUGH BORROWING.
"3. THE PROPOSAL INCLUDES ALL ITEMS IN THE FACT SHEET OF THE
IMPROVEMENT AND BUILDING PROGRAM. IT ALSO INCLUDES ADDITIONAL ITEMS,
SEVERAL OF WHICH ARE NOT NORMALLY PROVIDED IN A MARINA OPERATION AND NOT
PLANNED FOR THIS OPERATION. IF IT WERE PROPOSED TO GO ON THE EXPANDED
BASIS, IT WOULD BE NECESSARY TO REISSUE THE FACT SHEET, INVITING OFFERS
ON THAT BASIS.
"4. THE PROPOSAL WAS SIGNED BY MR. GARY PELPHREY WHO IS THE ONLY
MEMBER OF THE FIRM IDENTIFIED. WHILE THERE IS NO EXPERIENCE INDICATED
IN THE OPERATION OF A MARINA, OR ANY OTHER BUSINESS, MR. PELPHREY'S
NAVAL EXPERIENCE WOULD UNDOUBTEDLY BE BENEFICIAL. HOWEVER, IN THE
OVERALL, THE MANAGERIAL QUALIFICATIONS ARE QUESTIONABLE."
NPS ACKNOWLEDGES THE NEED FOR IMPROVEMENTS AT THE COLUMBIA MARINA
AND, IN THIS REGARD, POINTS OUT THAT THE FACT SHEET PROVIDES FOR CERTAIN
IMPROVEMENTS. HOWEVER, NPS ALSO POINTS OUT THAT ITS DETERMINATION
CONCERNING GSI'S SATISFACTORY PERFORMANCE IS BASED UPON AN OVERALL VIEW
OF ITS OPERATIONS AT SOME 20 FACILITIES AND NOT JUST AT THE COLUMBIA
MARINA. FURTHERMORE, NPS REPORTS THAT AS A RESULT OF CARRY-ON'S CHARGES
MADE AFTER SUBMISSION OF ITS PROPOSAL AN INSPECTION WAS MADE AND THE
ALLEGATIONS WERE NOT SUBSTANTIATED.
OUR REVIEW OF THE FACT SHEET IN THE INSTANT CASE DISCLOSES THAT IT IS
LACKING IN SOME OF THE DETAILS WHICH YOU HAVE MENTIONED. FOR EXAMPLE,
THE INFORMATION CONCERNING FRANCHISE FEES, BONDS, AND INSURANCE, MAY BE
CONSIDERED INSUFFICIENT. ON THE OTHER HAND, WE BELIEVE THE FACT SHEET
IS CLEAR WITH REGARD TO OTHER DETAILS ABOUT WHICH YOU COMPLAIN. FOR
EXAMPLE, IT IS CLEAR THAT THE CONCESSION CONTRACT TO BE NEGOTIATED WAS
TO INCLUDE NOT ONLY THE COLUMBIA MARINA BUT THE OTHER 19 FACILITIES
LISTED THEREIN, AND THAT THE CONSTRUCTION AND IMPROVEMENT PROGRAM
ESTIMATED TO COST $1,000,000, IS THE OBLIGATION OF THE CONTRACTOR.
FURTHERMORE, WE BELIEVE THAT BOTH THE DETERMINATION AS TO THE
ACCEPTABILITY OF CARRY-ON'S PROPOSAL, AND THE DETERMINATION CONCERNING
GSI'S PAST PERFORMANCE, ARE THE PRIMARY RESPONSIBILITY OF THE NPS AND
NOT SUBJECT TO OBJECTION UNLESS CLEARLY ARBITRARY. WE FIND NO BASIS IN
THE RECORD TO REACH SUCH A CONCLUSION. MOREOVER, THERE IS NOTHING IN
THE ACT GOVERNING THE AWARD OF THIS CONTRACT WHICH REQUIRES THAT THE
CONTRACT BE AWARDED UNDER THE NORMAL COMPETITIVE RULES. AS WE SAID IN
49 COMP. GEN. 88, 95 (1969);
"*** INDEED, SECTION 5 OF THE 1965 ACT WAS NOT INTENDED BY THE
CONGRESS TO SET UP A BIDDING PROCEDURE BUT ONLY TO ASSURE ALL INTERESTED
PARTIES THAT IN NEGOTIATING THE CONTRACT ALL RELEVANT FACTORS WOULD BE
TAKEN INTO ACCOUNT. ONE OF THESE FACTORS, AND A VERY IMPORTANT ONE IN
THE EYES OF THE CONGRESS, WAS THE DESIRABILITY OF MAINTAINING CONTINUITY
OF OPERATIONS AND OPERATORS. SEE H. REPT. NO. 591 TO ACCOMPANY H.R.
2091 (THE BILL WHICH BECAME LAW), 89TH CONG., 1ST SESS., PAGE 5, AND S.
REPT. NO. 765 TO ACCOMPANY H.R. 2091, 89TH CONG., 1ST SESS., PAGES 4 AND
5. BOTH REPORTS CONTAIN THE FOLLOWING IDENTICAL COMMENTS ON SECTION 5
OF H.R. 2091:
"SIXTH, THE BILL PROVIDES THAT ESTABLISHED CONCESSIONERS WHO HAVE
PERFORMED SATISFACTORILY SHALL BE GIVEN PREFERENCE IN THE RENEWAL OF OLD
CONTRACTS AND IN THE NEGOTIATION OF NEW CONTRACTS. THE SECRETARY MAY
ALSO, IF CIRCUMSTANCES SUGGEST THE DESIRABILITY OF SUCH A COURSE OF
ACTION, EXTEND OR RENEW EXISTING CONTRACTS UPON OR BEFORE THEIR
EXPIRATION. EXTENSIONS OR RENEWALS BEFORE EXPIRATION ARE SOMETIMES
NECESSARY TO ENABLE A CONCESSIONER TO RAISE CAPITAL FOR EXPANDED
IMPROVEMENTS OR, IN CASES OF CONTRACTS DUE TO EXPIRE WITHIN A YEAR OR
TWO, TO PERMIT BOTH THE GOVERNMENT AND THE CONCESSIONAIRE TO KNOW WHERE
THEY WILL STAND IN THE FUTURE AND THUS TO ASSURE CONTINUITY OF PARK
OPERATIONS. NEITHER THE PREFERENCE JUST SPOKEN OF NOR THE RIGHT TO
EXTEND OR RENEW IS ABSOLUTE. THE BILL REQUIRES THE SECRETARY TO GIVE
PUBLIC NOTICE OF HIS INTENTIONS TO EXTEND OR RENEW AND TO CONSIDER AND
EVALUATE ALL PROPOSALS RECEIVED AS A RESULT THEREOF. THIS IS NOT, AND
IS NOT INTENDED TO BE, A BIDDING PROCEDURE, WITH THE AWARD AUTOMATICALLY
GOING TO THE HIGH BIDDERS, BUT IT IS INTENDED TO BRING TO THE ATTENTION
OF THE PUBLIC, THE SECRETARY, AND ALL INTERESTED PARTIES THE SITUATION
AND TO ASSURE ALL CONCERNED THAT IN NEGOTIATING THE NEW CONTRACT ALL
RELEVANT FACTORS ARE TAKEN INTO ACCOUNT. ONE OF THESE FACTORS, OF
COURSE, AND A VERY IMPORTANT ONE, IS THE DESIRABILITY OF CONTINUITY OF
OPERATIONS AND OPERATORS."
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176484(2), DEC 21, 1972
BID PROTEST - DESCRIPTIVE LITERATURE
DECISION DENYING A PROTEST BY ECOLOGIC INSTRUMENT CORP. AGAINST THE
AWARD OF A CONTRACT TO SCHNEIDER INSTRUMENT COMPANY, UNDER AN IFB ISSUED
BY THE ARMY CORPS OF ENGINEERS FOR THREE INTEGRATED WATER QUALITY DATA
ACQUISITION SYSTEMS.
A BLANKET OFFER TO COMPLY WITH SPECIFICATIONS CANNOT BE SUBSTITUTED
FOR THE SUBMISSION OF DESCRIPTIVE LITERATURE REQUIRED BY THE IFB. THUS,
THE FAILURE TO SUBMIT THE REQUIRED DATA WITH THE BID REQUIRES THAT THE
BID BE REJECTED. 37 COMP. GEN. 763 (1958). ACCORDINGLY, THE PROTEST IS
DENIED.
TO ECOLOGIC INSTRUMENT CORPORATION:
FURTHER REFERENCE IS MADE TO YOUR REQUEST FOR OUR ADVICE AND
INVESTIGATION OF THE CIRCUMSTANCES LEADING TO AN AWARD OF A CONTRACT TO
SCHNEIDER INSTRUMENT COMPANY (SCHNEIDER) UNDER INVITATION FOR BIDS (IFB)
NO. DACW33-72-B-0032, ISSUED ON APRIL 26, 1972, BY THE NEW ENGLAND
DIVISION OF THE ARMY CORPS OF ENGINEERS.
THE INSTANT IFB REQUESTED BIDS FOR FURNISHING THREE INTEGRATED WATER
QUALITY DATA ACQUISITION SYSTEMS FOR DELIVERY TO THE WATER QUALITY
LABORATORY, BARRE FALLS DAM, HUBBARDSTON, MASSACHUSETTS. WHEN BIDS WERE
OPENED ON MAY 24, 1972, YOUR FIRM HAD SUBMITTED THE LOWEST BID AND
SCHNEIDER'S WAS SECOND LOW. YOUR COVER LETTER OF MAY 11, 1972,
SUBMITTING YOUR BID STATED IN PART "WE HAVE TAKEN NO EXCEPTIONS WHATEVER
TO THE SPECIFICATIONS OR DELIVERY."
THE DEPARTMENT HAS ADVISED THAT, BECAUSE OPERATION AND MAINTENANCE OF
THE EQUIPMENT IN QUESTION WAS CONSIDERED TO BE OF PARAMOUNT IMPORTANCE
TO THE USER, AND BASED ON EXPERIENCE GAINED IN THIS REGARD ON A PREVIOUS
CONTRACT FOR THE SAME ITEM AWARDED TO YOUR FIRM, IT WAS DETERMINED THAT
IN THIS AND ALL FUTURE PROCUREMENTS OF THIS NATURE, THE SPECIFICATIONS
WOULD REQUIRE A DETAILED INSTRUCTION MANUAL, AND BID EVALUATION WOULD BE
BASED UPON THE QUALITY AND DESIGN DETAILS FURNISHED IN THE MANUAL.
CONSEQUENTLY, SECTION B OF THE IFB, ENTITLED "EVALUATION AND AWARD
FACTORS," PROVIDED AT PARAGRAPH (3) THEREOF:
"BIDS WHICH DO NOT INCLUDE A COPY OF THE INSTRUCTION MANUAL AS SET
FORTH IN SECTION J WILL BE REJECTED AS NONRESPONSIVE."
THE REFERENCED SECTION J STATED IN PERTINENT PART:
"BIDDER SHALL SUBMIT ONE (1) COPY OF INSTRUCTION MANUAL WITH HIS BID
SUBMISSION IN ACCORDANCE WITH PARAGRAPH 5.00 AND ADDENDUM OF THE
SPECIFICATIONS. EQUIPMENT AND SYSTEM OFFERED WILL BE EVALUATED FOR
QUALITY AND DESIGN DETAIL FROM MANUAL SUBMITTED."
THUS, WHILE DESIGNATED AS AN "INSTRUCTION" MANUAL, IT WOULD APPEAR
THAT THE MANUAL WAS ALSO INTENDED TO SERVE AS DESCRIPTIVE LITERATURE IN
DETERMINING WHETHER THE ITEM PROPOSED MET THE SPECIFICATIONS.
PARAGRAPH 5.00 OF THE SPECIFICATIONS ENTITLED "INSTRUCTION MANUAL"
LISTED SOME 16 AREAS OF REQUIRED INFORMATION AND MAINTENANCE PROCEDURES
FOR EACH PHASE AND EACH PARAMETRIC SYSTEM TO BE INCLUDED IN THE MANUAL,
WHICH WERE REQUIRED TO CONFORM TO THE OTHER REQUIREMENTS OF THE
TECHNICAL SPECIFICATIONS. WHILE YOUR COMPANY SUBMITTED A MANUAL FOR
YOUR MODEL 400 WATER QUALITY ANALYZER, IT WAS FOUND BY THE COGNIZANT
TECHNICAL PERSONNEL NOT TO BE IN COMPLIANCE WITH THE REQUIREMENTS OF THE
INVITATION IN 35 SIGNIFICANT AREAS. THE MORE CRITICAL OMISSIONS OF YOUR
MANUAL WERE LISTED IN THE CONTRACTING OFFICER'S LETTER OF JUNE 26, 1972,
REJECTING YOUR BID AS NONRESPONSIVE AS FOLLOWS:
"THE FOLLOWING SUBPARAGRAPHS OF PARAGRAPH 5, PAGE F-15 DO NOT MEET
THE REQUIREMENTS:
5.04 (I.E., CONDUCTIVITY)
5.06 (NOT CLEAR)
5.07 (TROUBLESHOOTING)
5.11 (PARTS LIST)
5.12 (SOURCE OF SUPPLY)
"PARAGRAPH 1-01, PAGE F-5, DESCRIBES THE 'SYSTEM" TO BE COMPOSED OF A
FLOW CHAMBER PHASE, AN ANALYSER PHASE AND AN OUTPUT PHASE.
"THE INSTRUCTION MANUAL DID NOT CONTAIN ANY REFERENCE TO THE ABOVE
PHASE AS REQUIRED BY THE INVITATION ABOVE."
WITH THE APPROVAL OF THE NEW ENGLAND BOARD OF AWARDS, THE CONTRACTING
OFFICER REJECTED YOUR BID FOR THE FOREGOING REASONS AS BEING
NONRESPONSIVE, AND ON JUNE 26, 1972, AWARDED THE CONTRACT TO SCHNEIDER,
WHOSE BID HAD BEEN FOUND TO BE RESPONSIVE.
SUBSEQUENT TO THE AWARD, YOUR FIRM BY LETTER DATED JUNE 29, 1972,
REQUESTED A HEARING IN THE OFFICE OF THE PROCURING ACTIVITY, WHICH
HEARING WAS LATER SCHEDULED FOR JULY 14, 1972. HOWEVER, AFTER YOU HAD
BEEN ADVISED OF THE AWARD TO SCHNEIDER, YOUR FIRM DECLINED ON JULY 10,
1972, TO PARTICIPATE IN THE MEETING, STATING "THAT A MEETING AT THIS
TIME WOULD BE A MEANINGLESS EXPENSE TO THE CORPS OF ENGINEERS AND
ECOLOGIC INSTRUMENT CORPORATION." IN THE INTERIM (JULY 7, 1972), YOU
MADE YOUR INQUIRY TO OUR OFFICE.
THE ESSENCE OF YOUR COMPLAINT IS THAT YOUR MANUAL COMPLETELY
CONFORMED TO THE SPECIFICATIONS, AND THAT YOUR BID TOOK NO EXCEPTION TO
THE SPECIFICATIONS.
IT SHOULD FIRST BE OBSERVED THAT A BLANKET OFFER TO COMPLY WITH
SPECIFICATIONS CANNOT BE SUBSTITUTED FOR A DESCRIPTIVE LITERATURE
REQUIREMENT SUCH AS IS PRESENT HERE. 36 COMP. GEN. 415 (1956); 37
COMP. GEN. 763 (1958). IT FOLLOWS THAT THE REQUIREMENT FOR SUBMISSION
OF THE INSTRUCTION MANUAL CARRIES WITH IT THE CONCOMITANT REQUIREMENT OF
SUBMISSION OF A MANUAL ACCEPTABLE TO THE PROCURING ACTIVITY.
THIS OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE
ADMINISTRATIVE AGENCIES HAVE THE PRIMARY RESPONSIBILITY FOR DRAFTING
SPECIFICATIONS WHICH REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT, AS
WELL AS THE RESPONSIBILITY OF DETERMINING WHETHER THE PRODUCT OFFERED
MEETS THESE SPECIFICATIONS. 44 COMP. GEN. 302 (1964); 38 COMP. GEN.
190 (1958). CONSISTENT WITH SUCH AUTHORITY, THE INVITATION MAY PROPERLY
REQUIRE THAT DESCRIPTIVE DATA ACCOMPANY EACH BID FOR THE PURPOSE OF BID
EVALUATION SO AS TO DETERMINE WHETHER THE SPECIFICATIONS WOULD BE
SATISFIED BY THE ITEM OFFERED. 40 COMP. GEN. 132 (1960). IN SUCH
CIRCUMSTANCES, FAILURE TO SUBMIT THE REQUIRED DATA WITH THE BID REQUIRES
THAT THE BID BE REJECTED. 37 COMP. GEN. 763 (1958).
WE ALSO RECOGNIZE THAT GOVERNMENT PROCUREMENT OFFICIALS WHO ARE
FAMILIAR WITH THE CONDITIONS UNDER WHICH EQUIPMENT WILL BE USED, AND
WITH PAST RESULTS IN THE USE OF SIMILAR EQUIPMENT, ARE GENERALLY IN THE
BEST POSITION TO KNOW THE GOVERNMENT'S NEEDS AND BEST ABLE TO DRAFT
APPROPRIATE SPECIFICATIONS. IN THE INSTANT CASE IT IS THE CONSIDERED
OPINION OF TECHNICAL PERSONNEL OF THE CORPS OF ENGINEERS THAT YOUR
INSTRUCTION MANUAL DID NOT MEET THE REQUIREMENTS OF THE SPECIFICATIONS
IN SEVERAL SIGNIFICANT AREAS. IN THIS CONNECTION, THE RECORD INDICATES
THAT YOU WERE FURNISHED A LISTING OF THE AREAS IN WHICH YOUR MANUAL WAS
CONSIDERED DEFICIENT, AND YOU HAVE NOT SUBMITTED A REFUTATION THEREOF.
UNDER THE CIRCUMSTANCES, WE MUST AGREE WITH THE CONCLUSIONS OF THE
CONTRACTING AGENCY, AND WITH ITS ACTION IN REJECTING YOUR BID.
WE THEREFORE BELIEVE THAT ANY FURTHER CONSIDERATION OF YOUR COMPLAINT
CONCERNING DEFICIENCIES IN YOUR MANUAL MUST PROPERLY BE LEFT FOR THE
ADMINISTRATIVE OFFICE CONCERNED, WHICH HAS ALREADY OFFERED TO CAREFULLY
CONSIDER YOUR VIEWS AND HEAR ANY OBJECTIONS TO THE ACTION TAKEN YOU MAY
CARE TO MAKE.
B-176504, DEC 21, 1972
BID PROTEST - TECHNICAL DEFICIENCY - COST-REIMBURSEMENT AWARD
DECISION DENYING A PROTEST BY ALTEK ENGINEERING LTD., AGAINST THE
AWARD OF CONTRACT TO BATTELLE COLUMBUS LABORATORIES UNDER AN RFP ISSUED
BY THE MANPOWER ADMINISTRATION, DEPARTMENT OF LABOR.
WHERE A PROPOSAL IS UNACCEPTABLE UPON INITIAL EVALUATION AND IS NOT
WITHIN A COMPETITIVE RANGE, NEGOTIATIONS OR DISCUSSIONS NEED NOT BE
CONDUCTED WITH THE UNACCEPTABLE BIDDER. SEE 50 COMP. GEN. 565, 578
(1971). ALSO, SINCE THE RFP REQUIRED WORK PERFORMANCE TO BE ON A
COST-REIMBURSEMENT BASIS, CONTRACT EVALUATION IS NOT RESTRICTED SOLELY
TO OFFEROR'S ESTIMATED PRICE QUOTATION. THUS ALTEK'S TECHNICAL
DEFICIENCIES NOTWITHSTANDING ITS LOW BID PRICE, PRECLUDE ANY QUESTIONING
OF THE VALIDITY OF THE AWARD AS MADE.
TO ALTEK ENGINEERING LTD.:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 4, 1972, AND
PRIOR CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO THE BATTELLE
COLUMBUS LABORATORIES UNDER REQUEST FOR PROPOSALS (RFP) ORD-72-3, ISSUED
ON FEBRUARY 28, 1972, BY THE MANPOWER ADMINISTRATION, DEPARTMENT OF
LABOR.
THE RFP SOLICITED DETAILED PROPOSALS FOR CONDUCTING A SURVEY OF
VOCATIONAL TRAINING IN 300 FEDERAL AND STATE CORRECTIONAL INSTITUTIONS.
WE HAVE BEEN INFORMALLY ADVISED THAT PRIOR TO THE CLOSING DATE FOR
RECEIPT OF PROPOSALS, THE MANPOWER ADMINISTRATION ADVISED PROSPECTIVE
OFFERORS BY TELEGRAM THAT THE SOLICITATION SHOULD HAVE SHOWN THE NUMBER
OF INSTITUTIONS TO BE SURVEYED AS 800 INSTEAD OF 300. THE RFP SET OUT
SIX EVALUATION CRITERIA FOR APPLICATION IN DETERMINING THE SUCCESSFUL
OFFEROR. PROSPECTIVE OFFERORS WERE ALSO ADVISED THAT A
COST-REIMBURSEMENT TYPE CONTRACT WAS ANTICIPATED.
FIFTY-SIX OFFERS WERE RECEIVED AND EACH PROPOSAL WAS EVALUATED
AGAINST THE CRITERIA ESTABLISHED IN THE RFP BY A TECHNICAL EVALUATION
COMMITTEE OF THE OFFICE OF RESEARCH AND DEVELOPMENT. THE EVALUATION
COMMITTEE CONCLUDED THAT THE PROPOSAL SUBMITTED BY YOUR FIRM IN THE
ESTIMATED AMOUNT OF $136,826.74 WAS INSUFFICIENT WHEN EVALUATED AGAINST
THE CRITERIA IN THE FOLLOWING SIX RESPECTS:
"I. THE TWO-PARAGRAPH 'STATEMENT OF PURPOSE AND SCOPE' INCLUDED IN
THE TECHNICAL PROPOSAL DID NOT DEMONSTRATE THE NECESSARY UNDERSTANDING
OF THE NEED FOR AND PURPOSE OF THE PROPOSED SURVEY. THE ALTEK PROPOSAL
AFFORDED VIRTUALLY NO BASIS FOR JUDGING THE FIRM'S GRASP OF THE KEY
ISSUES PERTAINING TO VOCATIONAL TRAINING AND PREPARATION IN CORRECTIONAL
INSTITUTIONS WHICH CONSTITUTE THE FOUNDATION FOR THE STUDY.
"II. THE ALTEK PROPOSAL FELL FAR SHORT OF PROVIDING SUFFICIENT
INFORMATION TO ASSESS THE ORGANIZATION'S INTENDED METHODOLOGY. MATTERS
OF SAMPLING, QUESTIONNAIRE CONSTRUCTION, ANALYTIC METHODS AND THE LIKE
WERE SUPERFICIALLY DEALT WITH IN LESS THAN A FULL PAGE OF THE TECHNICAL
PROPOSAL, AGAIN PRECLUDING A JUDGMENT OF RESEARCH CAPABILITY. SITE
VISITATIONS, A CRITICAL ELEMENT OF THE STUDY SPECIFICATIONS, WERE
COMPLETELY OMITTED FROM THE TREATMENT OF RESEARCH METHODOLOGY.
"III. ALTEK FAILED TO PRESENT EVIDENCE OF ORGANIZATIONAL CAPABILITY
TO IMPLEMENT THE TYPES OF METHODOLOGY REQUIRED BY THE SURVEY. NOTABLY
LACKING IN THE PROPOSAL WAS ANY INDICATION OF EXPERIENCE IN DESIGNING
AND ADMINISTERING SURVEY-TYPE PROJECTS (SEE ATTACHMENT B).
"IV. CONTRARY TO THE TECHNICAL PROPOSAL'S ASSERTION (P. 2) THAT
ALTEK'S PERSONNEL ARE 'KNOWLEDGEABLE IN VOCATIONAL TRAINING PROGRAMS,'
THE SUBMISSION FAILS TO DOCUMENT THE REQUISITE KNOWLEDGE AND EXPERIENCE
IN THE PROBLEM AREA ON THE PART OF THE KEY STAFF (SEE ATTACHMENT C).
THE SOLE REFERENCE TO PERTINENT STAFF EXPERIENCE IS TO BE FOUND IN THE
BRIEF RESUME OF A CONSULTANT WHO WOULD HAVE BEEN EMPLOYED BUT 10 DAYS
DURING THE 18-MONTH TERM OF THE PROJECT, A LEVEL OF EXPERIENCE AND A
TIME COMMITMENT FAR LESS THAN THOSE REQUIRED TO CONDUCT THE TYPE OF
STUDY PRESCRIBED BY THE RFP.
"V. ALTEK'S STATEMENT OF FINANCIAL CAPABILITY PORTRAYS THE FIRM'S
FINANCIAL RESOURCES TO BE LESS THAN THOSE REQUIRED TO UNDERTAKE AND
SUSTAIN A PROJECT OF THIS MAGNITUDE.
"VI. THE COST ESTIMATE OF $136,826.74 CANNOT BE CORRELATED WITH THE
LEVEL OF EFFORT PROPOSED BY ALTEK IN VIEW OF THE LIMITED DETAIL
PRESENTED IN THE TECHNICAL PROPOSAL."
SINCE THE PROPOSAL OF THE BATTELLE COLUMBUS LABORATORIES IN THE
ESTIMATED AMOUNT OF $253,960 RECEIVED THE HIGHEST SCORE UNDER THE
EVALUATION CRITERIA SUBMITTED, THE CONTRACT WAS AWARDED TO THAT FIRM.
YOUR PROTEST RELATES TO THE MANNER IN WHICH THE SUCCESSFUL OFFEROR
WAS SELECTED. YOU QUESTION THE FAILURE OF THE ADMINISTRATION TO
NEGOTIATE WITH YOUR FIRM, AND AN AWARD TO BATTELLE AT A PRICE
APPROXIMATELY $100,000 HIGHER THAN THE PRICE OFFERED BY YOUR FIRM. YOU
FURTHER COMPLAIN THAT NO DIRECT NOTIFICATION OF CONTRACT AWARD WAS
PROVIDED ALTEK BY THE DEPARTMENT OF LABOR.
WITH REFERENCE TO YOUR COMPLAINT THAT NO NEGOTIATIONS OR DISCUSSIONS
WERE CONDUCTED WITH YOUR FIRM, FEDERAL PROCUREMENT REGULATIONS
1-3.805.1(A) REQUIRES THAT, AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN
OR ORAL DISCUSSIONS BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS "WHO
SUBMITTED PROPOSALS WITHIN A COMPETITIVE RANGE." SINCE, AS STATED ABOVE,
YOUR PROPOSAL WAS UNACCEPTABLE UPON INITIAL EVALUATION AND, FOR THE
REASONS QUOTED ABOVE, NOT WITHIN A COMPETITIVE RANGE, THERE WAS NO
REQUIREMENT THAT DISCUSSIONS BE HAD WITH YOUR FIRM CONCERNING PROPOSAL
DEFICIENCIES. 50 COMP. GEN. 565, 578 (1971). ALTHOUGH A MARCH 17,
1972, RFP AMENDMENT CHANGING THE NUMBER OF FEDERAL AND STATE
CORRECTIONAL INSTITUTIONS TO BE SURVEYED FROM 300 TO 800 WAS REPORTEDLY
SENT BY TELEGRAM TO ALTEK'S KENSINGTON, MARYLAND, ADDRESS (THE ADDRESS
TO WHICH THE ORIGINAL RFP WAS SENT), ALTEK'S PROPOSAL DOES NOT REFLECT
THIS IMPORTANT CHANGE.
WHILE YOUR FIRM DID SUBMIT THE LOWEST PROPOSAL AS TO PRICE, THE
CONTRACT WHICH WAS SUBSEQUENTLY AWARDED IS A COST-REIMBURSEMENT TYPE
CONTRACT. UNDER SUCH METHOD OF CONTRACTING, THE PRICES SUBMITTED BY
OFFERORS FOR THE COST OF PERFORMING THE REQUIRED SURVEY ARE ONLY
ESTIMATES OF WHAT THE SURVEY MAY ACTUALLY COST. THE CONTRACTOR IN SUCH
SITUATIONS IS REIMBURSED NOT ON THE BASIS OF HIS COST ESTIMATE BUT FOR
THE ACTUAL COSTS INCURRED IN PERFORMING THE WORK. SINCE THE ESTIMATED
PRICE QUOTED BY THE OFFEROR DOES NOT CONTROL THE AMOUNT OF ACTUAL
REIMBURSEMENT, OFFERS TO PERFORM WORK ON A COST-REIMBURSEMENT BASIS ARE
NOT EVALUATED ON A STRICT PRICE BASIS. IN THIS CONNECTION, FEDERAL
PROCUREMENT REGULATIONS 1-3.805-2 STATES:
"IN SELECTING THE CONTRACTOR FOR A COST-REIMBURSEMENT TYPE CONTRACT,
ESTIMATED COSTS OF CONTRACT PERFORMANCE AND PROPOSED FEES SHOULD NOT BE
CONSIDERED AS CONTROLLING, SINCE IN THIS TYPE OF CONTRACT ADVANCE
ESTIMATES OF COST MAY NOT PROVIDE VALID INDICATORS OF FINAL ACTUAL
COSTS. THERE IS NO REQUIREMENT THAT COST-REIMBURSEMENT TYPE CONTRACTS
BE AWARDED ON THE BASIS OF EITHER (A) THE LOWEST PROPOSED COST, (B) THE
LOWEST PROPOSED FEE, OR (C) THE LOWEST TOTAL ESTIMATED COST PLUS
PROPOSED FEE. THE AWARD OF COST-REIMBURSEMENT TYPE CONTRACTS PRIMARILY
ON THE BASIS OF ESTIMATED COSTS MAY ENCOURAGE THE SUBMISSION OF
UNREALISTICALLY LOW ESTIMATES AND INCREASE THE LIKELIHOOD OF COST
OVERRUNS. THE COST ESTIMATE IS IMPORTANT TO DETERMINE THE PROSPECTIVE
CONTRACTOR'S UNDERSTANDING OF THE PROJECT AND ABILITY TO ORGANIZE AND
PERFORM THE CONTRACT. THE AGREED FEE MUST BE WITHIN THE LIMITS
PRESCRIBED BY LAW AND AGENCY PROCEDURES AND APPROPRIATE TO THE WORK TO
BE PERFORMED (SEE SEC 1-3.808). BEYOND THIS, HOWEVER, THE PRIMARY
CONSIDERATION IN DETERMINING TO WHOM THE AWARD SHALL BE MADE IS: WHICH
CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE
GOVERNMENT."
SEE, ALSO, B-174096, NOVEMBER 4, 1971. FURTHERMORE, IN VIEW OF THE
TECHNICAL UNACCEPTABILITY OF THE ALTEK PROPOSAL, SUMMARIZED ABOVE, THE
LOW ALTEK ESTIMATED PRICE WAS NOT FOR CONSIDERATION.
IN REGARD TO YOUR ALLEGATION THAT THE MANPOWER ADMINISTRATION DID NOT
DIRECTLY NOTIFY YOUR FIRM OF THE CONTRACT AWARD TO THE BATTELLE COLUMBUS
LABORATORIES, IT IS REPORTED THAT ON JULY 17, 1972, EACH OFFEROR WAS
SENT A NOTICE OF CONTRACT AWARD. IN ANY EVENT, AN INADVERTENT FAILURE
TO NOTIFY AN UNSUCCESSFUL OFFEROR WOULD NOT PROVIDE ANY BASIS FOR
QUESTIONING THE VALIDITY OF AN AWARD AS MADE.
ACCORDINGLY, THE PROTEST IS DENIED.
B-176537, DEC 21, 1972
CONTRACT - PRICE INCREASE - UNILATERAL ERROR - PAYMENT TO REFLECT
BID-PRICE INTENT
DECISION CONCERNING A REQUEST BY A.C. BALL CO. FOR AN INCREASE IN THE
PRICE OF A CONTRACT BECAUSE OF AN ALLEGED MISTAKE IN THE BID UPON WHICH
THE CONTRACT IS BASED.
SINCE BALL'S UNILATERAL MISTAKE, THE SUBMISSION OF $747.50 AS A UNIT
PRICE INSTEAD OF ITS INTENDED PRICE OF $1,747.50, IS A BONA FIDE ERROR
WHICH IS NOW RECOGNIZED BY THE CONTRACTING AGENCY AS WELL AS BY THE U.S.
ARMY MATERIEL COMMAND, THE CONTRACTING OFFICER SHOULD HAVE BEEN ON
NOTICE OF ERROR IN THE SUBMITTED BID PRICE AND THUS SHOULD HAVE VERIFIED
THE BID. SEE 45 COMP. GEN. 305 (1965). ALSO, SINCE BALL'S BID WAS MORE
THAN 50 PERCENT BELOW THE GOVERNMENT'S ESTIMATE AS WELL AS FAR BELOW THE
OTHER BIDDER'S PRICES, THE BID PRICE WILL BE INCREASED TO AN AMOUNT NOT
TO EXCEED THE DIFFERENCE BETWEEN BALL'S INTENDED BID PRICE AND THE
AMOUNT ALREADY PAID TO BALL FOR ITS PAST PERFORMANCE.
TO MR. SECRETARY:
REFERENCE IS MADE TO A LETTER DATED NOVEMBER 1, 1972, WITH
ENCLOSURES, FROM THE ASSISTANT GENERAL COUNSEL, HEADQUARTERS, UNITED
STATES ARMY MATERIEL COMMAND, FURNISHING OUR OFFICE A REPORT RELATIVE TO
THE REQUEST OF THE A. C. BALL COMPANY (BALL) FOR AN INCREASE IN THE
PRICE OF CONTRACT NO. DAAA15-68-C-0773, DATED JUNE 26, 1968, BASED ON A
MISTAKE IN BID ALLEGED AFTER AWARD.
THE CONTRACT INVOLVED WAS AWARDED ON A BID SUBMITTED BY BALL IN
RESPONSE TO INVITATION FOR BIDS (IFB) NO. DAAA15-68-B-0907, ISSUED BY
THE EDGEWOOD ARSENAL ON JUNE 4, 1968, WHICH INVITED PRICES FOR 10 EACH
MAINTENANCE KITS, CBR EQUIPMENT, M14, FOR DELIVERY AT THREE
DESTINATIONS.
AS THE RECORD DISCLOSES (AND THESE FACTS ARE NOT IN DISPUTE) ON JUNE
19, 1968, THE DATE SET FOR RECEIPT OF BIDS, THREE FIRMS SUBMITTED THE
FOLLOWING PRICES:
SUFFOLK ENVIRONMENTAL MAGNETICS, INC. $2,200.00 EACH
METALCRAFT, INC. 1,770.00 EACH
BALL 747.50 EACH
BALL'S BID ALSO OFFERED A 2 PERCENT DISCOUNT IF AWARDED ALL ITEMS.
THE GOVERNMENT'S INDEPENDENT ESTIMATE OF THE COST FOR THE ITEMS IN
QUESTION WAS $1,500 PER ITEM.
ON JUNE 20, 1968, A NEW CONTRACT SPECIALIST, HEREINAFTER REFERRED TO
AS THE CONTRACTING OFFICER, WAS ASSIGNED THE RESPONSIBILITY FOR
COMPLETION OF THE PROCESSING OF BIDS TO AWARD. ON THE SAME DATE
"MEMORANDUM FOR RECORD" WAS PREPARED BY THE NEW CONTRACTING OFFICER
WHICH STATED:
"20 JUNE 68
CALLED 'A. C. BALL' AND ASKED MR. BALL TO CONFIRM HIS PRICE USING THE
DISCOUNTED PRICE WHICH WOULD BE $732.55 EACH. HE WAS ALSO ASKED TO
STATE THAT HE HAS OPEN CAPACITY. HE WILL SEND THIS INFORMATION THIS
DATE."
THERE IS NO RECORD IN THE CONTRACT FILE OF A WRITTEN CONFIRMATION OF
THE BID PRICE QUOTED BY BALL.
IN FACT, BALL HAS CONSISTENTLY MAINTAINED THAT IT HAS NO RECORD OF
EVER HAVING BEEN ASKED TO CONFIRM ITS BID PRICE, OR ANY RECORD OF BEING
INFORMED BY THE CONTRACTING OFFICER THAT HE SUSPECTED A POSSIBLE MISTAKE
IN BALL'S BID DUE TO THE WIDE VARIANCE IN THE BID PRICES RECEIVED. SOME
FOUR YEARS LATER (JANUARY 26, 1972), THE CONTRACTING OFFICER'S
"MEMORANDUM FOR RECORD" ATTEMPTS TO RECALL THE EARLIER EVENTS IN
QUESTION BY STATING IN PART:
"20 JUNE 68 I CALLED THE CONTRACTOR AND SPOKE TO MR. BALL HIMSELF.
HE WAS ASKED TO VERIFY HIS PRICE DUE TO ITS APPARENT LOWNESS AND HE WAS
ASKED WHETHER OR NOT HE HAD ADEQUATE OPEN CAPACITY. HE VERIFIED HIS
PRICE AND STATED THAT HE WOULD HAVE ADEQUATE CAPACITY. HE WAS TOLD TO
CONFIRM THIS WITH A LETTER."
FOLLOWING A DESK PRE-AWARD SURVEY OF JUNE 21, 1968, AND A
DETERMINATION OF "REASONABLENESS OF PRICE" ON THE SAME DATE, AWARD WAS
MADE TO BALL ON JUNE 26 IN THE SUM OF $7,325.50. FINAL MONETARY PAYMENT
WAS MADE TO BALL ON MAY 27, 1969.
BY LETTER DATED JUNE 3, 1969, BALL MADE ITS FIRST REQUEST FOR AN
INCREASE IN PRICE BASED UPON ITS ALLEGED MISTAKE IN BID. THE MISTAKE
WAS STATED TO HAVE OCCURRED BECAUSE A SECRETARY ENTERED A UNIT PRICE OF
$747.50, RATHER THAN THE UNIT PRICE OF $1,747.50 INTENDED.
ON JUNE 20, 1969, THE CONTRACTING OFFICER ADVISED BALL THAT NO ACTION
COULD BE TAKEN ON ITS CLAIM UNDER SECTION 17 OF THE ARMED SERVICES
PROCUREMENT REGULATION (ASPR), AND IF IT WISHED THE CLAIM COULD BE
SUBMITTED DIRECTLY TO OUR OFFICE. HOWEVER, RATHER THAN INITIALLY
FOLLOWING THAT COURSE OF ACTION, ON DECEMBER 20, 1971, THE CONTRACTOR
SUBMITTED A REQUEST FOR CONTRACT ADJUSTMENT UNDER PUBLIC LAW 85-804,
APPROVED AUGUST 28, 1958, 50 U.S.C. 1431-1435, AS IMPLEMENTED BY ASPR
17-204.3(II), WHICH AUTHORIZES AMENDMENT OR MODIFICATION OF CONTRACTS TO
FACILITATE THE NATIONAL DEFENSE. AFTER AN EXCHANGE OF CORRESPONDENCE
BETWEEN BALL AND HEADQUARTERS, ARMY MUNITIONS COMMAND, BALL ADVISED THAT
IT WAS WITHDRAWING ITS CLAIM AND WOULD FILE A CLAIM WITH THE GENERAL
ACCOUNTING OFFICE. THE MATTER WAS FORMALLY SUBMITTED TO OUR OFFICE BY
BALL ON JULY 12, 1972.
AN AFFIDAVIT OF ALFRED C. BALL, PRESIDENT OF BALL, ATTESTS THAT THE
UNIT PRICE HE BID WAS $1,747.50, AND THAT HE HAD PENCILLED IN THAT
FIGURE ON PAGE 10 OF THE IFB PRIOR TO THE TIME THE BID WAS SUBMITTED,
BUT THAT ONE OF BALL'S OFFICE GIRLS INCORRECTLY COPIED THAT INTENDED
UNIT PRICE AND INCORRECTLY INSERTED IN INK A PRICE OF $747.50. IN HIS
BRIEF BEFORE THE CONTRACT ADJUSTMENT BOARD, HE EXPLAINS THAT THIS
MISTAKE WAS APPARENTLY MADE BECAUSE THE OFFICE GIRL DID NOT SEE THE
FIGURE "1" ON HIS BID BECAUSE IT WAS PARTIALLY HIDDEN BY THE LINE
BETWEEN THE "UNIT" AND "UNIT PRICE" COLUMNS ON THE BIDDING SCHEDULE.
THE COPY RETAINED BY BALL OF ITS BID SCHEDULE DOES REVEAL THAT THE
FIGURE $1,747.50 IS IN PENCIL AND THE FIGURES $747.50 ARE IN INK. WE
ALSO HAVE BEEN FURNISHED A COPY OF BALL'S ORIGINAL WORKSHEET WHICH
DISCLOSES AN INTENDED BID PRICE OF $1,745.50. WHILE THERE IS NO
EXPLANATION OF THE $2 DIFFERENCE BETWEEN THE FIGURES $1,747.50 AND
$1,745.50, WE THINK THIS IS IMMATERIAL IN VIEW OF THE RATIONALE OF THE
HOLDING IN CHRIS BERG, INC. V. UNITED STATES, 192 CT. CL. 176 (1970).
SECTION 17 OF ASPR CITED IN THE CONTRACTING OFFICER'S LETTER OF JUNE
20, 1969, ALLUDES TO ASPR 17-205.1(C)(I), WHICH PRECLUDES CONTRACT
AMENDMENT OR EQUITABLE ADJUSTMENT UNLESS THE REQUEST IS FILED BEFORE
FINAL PAYMENT. WHILE NO SIMILAR RESTRICTION IS IMPOSED UPON THE
JURISDICTION OF OUR OFFICE TO CONSIDER CLAIMS BASED UPON ALLEGED
MISTAKES IN BIDS, OUR CONSIDERATION OF SUCH CASES IS BASED UPON JUDICIAL
PRECEDENT AND, AS A GENERAL RULE, NO RELIEF WILL BE GRANTED IN THE CASE
OF A UNILATERAL MISTAKE AFTER THE BID HAS BEEN ACCEPTED IN GOOD FAITH BY
THE GOVERNMENT UNLESS THE CIRCUMSTANCES ARE SUCH TO DICTATE THAT THE
GOVERNMENT KNEW OR SHOULD HAVE KNOWN OF THE PROBABILITY OF THE MISTAKE,
THUS NECESSITATING VERIFICATION OF THE BID BEFORE IT IS ACCEPTED. 45
COMP. GEN. 305 (1965).
WE ARE SATISFIED FROM THE FACTS OF RECORD THAT BALL MADE A BONA FIDE
ERROR IN ITS BID, AS ALLEGED, WHICH IT DID NOT DISCOVER UNTIL AFTER
DELIVERY AND PAYMENT. IT IS NOW RECOGNIZED BY HEADQUARTERS, UNITED
STATES ARMY MATERIEL COMMAND, THAT THERE IS MERIT TO BALL'S CLAIM AND
THE ONLY ISSUE IS WHETHER IT WAS FILED IN A TIMELY MANNER. THUS, THE
ONLY REMAINING ISSUE, AS WE VIEW IT, IS WHETHER THE CONTRACTING
OFFICIALS KNEW OR SHOULD HAVE KNOWN OF THE ERROR IN QUESTION AND TOOK
THE NECESSARY STEPS TO VERIFY THE BID PRICES PRIOR TO AWARD.
FROM THE REPORTED FACTS, INCLUDING THE FACT THAT BALL'S BID WAS MORE
THAN 50 PERCENT BELOW THE GOVERNMENT'S ESTIMATE, AND THE CONSIDERABLE
DISPARITY THAT EXISTED BETWEEN ITS BID AND THE TWO OTHER BIDS RECEIVED,
THE CONTRACTING OFFICER WAS PLACED ON NOTICE OF THE PROBABILITY OF A
MISTAKE. IT ALSO APPEARS THAT THE TELEPHONIC REQUEST FOR BID
VERIFICATION, TAKING INTO ACCOUNT EITHER VERSION AS REPORTED FOR THE
RECORD BY THE CONTRACTING OFFICER, WAS INADEQUATE TO PLACE THE BIDDER ON
NOTICE OF THE NATURE AND THE EXTENT OF THE SUSPECTED MISTAKE, AS
REQUIRED BY ASPR 2-406.1. THE AWARD TO BALL THEREFORE DID NOT RESULT IN
AN ENFORCEABLE OBLIGATION TO PERFORM AT ITS ERRONEOUS BID PRICE. SEE 44
COMP. GEN. 383 (1965) AND 48 COMP. GEN. 672 (1969).
ACCORDINGLY, WE APPROVE PAYMENT OF THE AMOUNT OF $9,800.00,
REPRESENTING THE DIFFERENCE BETWEEN THE CORRECT UNIT PRICE OF $1,747.50,
LESS A 2 PERCENT REDUCTION FOR AWARD OF ALL ITEMS AS OFFERED IN THE BID,
AND THE SUM OF $7,325.50 PREVIOUSLY PAID UNDER THE CONTRACT OF JUNE 26,
1968. REFERENCE SHOULD BE MADE TO THIS DECISION ON THE VOUCHER BY WHICH
SUCH PAYMENT IS AUTHORIZED.
THE ENCLOSURES RECEIVED WITH THE LETTER OF NOVEMBER 1 ARE RETURNED.
B-176683(1), DEC 21, 1972
BID PROTEST - NOTIFICATION OF NEGOTIATION AND CLOSING - LATE REVISION
DENIAL OF PROTEST BY UNITED TECHNOLOGY, INC., AGAINST THE AWARD OF A
CONTRACT TO ANY OTHER FIRM UNDER AN RFQ ISSUED BY ABERDEEN PROVING
GROUNDS, MD.
THE RECORD HERE DOES NOT AFFORD A BASIS FOR REJECTING THE AGENCY'S
POSITION THAT PROTESTANT WAS ADVISED THROUGH THE TELEPHONE CONVERSATION
OF JULY 25, 1972, OF THE OPPORTUNITY TO NEGOTIATE AND OF THE DEAD-LINE
FOR SUBMISSION OF BEST AND FINAL OFFERS. ACCORDINGLY, IT MUST BE
CONCLUDED THAT THE CONTRACTING OFFICER CORRECTLY REFUSED TO CONSIDER ANY
FURTHER PRICING REVISIONS SUBMITTED AFTER THE CLOSING DATE.
TO UNITED TECHNOLOGY, INCORPORATED:
THIS IS IN FURTHER REFERENCE TO YOUR TELEGRAM DATED AUGUST 4, 1972,
AND SUBSEQUENT CORRESPONDENCE, IN WHICH YOU PROTEST THE AWARD OF A
CONTRACT TO ANY OTHER FIRM UNDER REQUEST FOR QUOTATIONS NO.
DAAD05-72-Q-1282, ISSUED BY THE DEPARTMENT OF THE ARMY, ABERDEEN PROVING
GROUND, FOR AN ADVANCED DEVELOPMENT PROGRAM ENTITLED "ROUGH TERRAIN
GROUND HANDLING SYSTEM FOR HELICOPTERS."
THE SOLICITATION WAS RELEASED ON APRIL 24, 1972, AND QUOTATIONS WERE
REQUIRED TO BE SUBMITTED ON OR BEFORE THE CLOSE OF BUSINESS MAY 31,
1972.
SEVEN QUOTATIONS WERE RECEIVED BY MAY 31, 1972, FOUR OF WHICH,
INCLUDING A PROPOSAL FROM UNITED TECHNOLOGY, INCORPORATED (UTI), WERE
FOUND BY THE MEMBERS OF THE SOURCE SELECTION COMMITTEE TO BE WITHIN THE
ZONE OF CONSIDERATION (COMPETITIVE RANGE), AND THUS QUALIFIED FOR
NEGOTIATIONS.
IT IS REPORTED THAT THE NEGOTIATIONS WERE CONDUCTED BY TELEPHONE ON
JULY 25, 1972, WITH EACH OF THE FOUR FIRMS BEING ADVISED TO SUBMIT ITS
BEST AND FINAL OFFER NO LATER THAN THE CLOSE OF BUSINESS ON JULY 31,
1972. SUBMISSIONS FROM ALL FOUR FIRMS WERE TIMELY RECEIVED. UTI
RESPONDED TO THE TELEPHONIC CONVERSATION WITH A WRITTEN CONFIRMATION
DATED JULY 28, 1972, OF ITS ORIGINALLY SUBMITTED PRICE.
ON AUGUST 3, 1972, MR. E. KISIELOWSKI, PRESIDENT OF UTI, VISITED THE
PROCUREMENT OFFICE AND SPOKE WITH THE CONTRACT SPECIALIST AND THE CHIEF
OF THE RESEARCH AND DEVELOPMENT DIVISION. THE PURPOSE OF THE VISIT
ACCORDING TO UTI WAS TO "FIND OUT WHY THE CONTRACT SPECIALIST ASKED FOR
CONFIRMATION OF PRICES, AND PARTICULARLY WHEN HE EXPECTED TO HOLD THE
NEGOTIATIONS." IT WAS THE GOVERNMENT'S VIEW THAT THE PURPOSE OF THE
VISIT WAS TO SUBMIT ANOTHER PROPOSAL FOR CONSIDERATION WHICH WAS
CONTAINED IN A LETTER DATED AUGUST 1, 1972, AND HANDCARRIED BY MR.
KISIELOWSKI. UTI MAINTAINS THAT THE REVISED PROPOSAL WAS SUBMITTED ONLY
AFTER THE CONTRACT SPECIALIST INFORMED MR. KISIELOWSKI THAT THE
TELEPHONE CONVERSATION OF JULY 25, 1972, WAS MEANT TO CONSTITUTE THE
NEGOTIATIONS. ACCORDING TO THE CONTRACT SPECIALIST, HE EXPLAINED TO MR.
KISIELOWSKI THAT SINCE NEGOTIATIONS HAD ALREADY BEEN HELD (BY THE
TELEPHONE CONVERSATION OF JULY 25, 1972), AND WERE CLOSED AS OF JULY 31,
1972, ANY SUBSEQUENT SUBMISSION WOULD BE CONSIDERED A LATE MODIFICATION
UNDER ASPR 3-506 AND WOULD BE HANDLED ACCORDINGLY. WHEN ASKED BY MR.
KISIELOWSKI TO EXPLAIN, THE CONTRACT SPECIALIST REPORTS HE STATED THAT
IN THE EVENT UTI WAS BEING CONSIDERED FOR THE AWARD AND THE LATE
SUBMISSION WAS ADVANTAGEOUS TO THE GOVERNMENT IT WOULD BE ACCEPTED. MR.
KISIELOWSKI WAS FURTHER ADVISED THAT IN THE EVENT ANOTHER FIRM WAS BEING
CONSIDERED FOR AWARD, THE LATE SUBMISSION WOULD NOT BE ACCEPTED UNLESS
IT WERE A BREAKTHROUGH IN THE STATE OF ART. THE PROTEST BY UTI FOLLOWED.
YOU CONTEND THAT YOU WERE NOT GIVEN AN OPPORTUNITY TO NEGOTIATE PRICE
OR OTHER FACTORS; THAT YOU WERE NOT INFORMED OF A SPECIFIED DATE FOR
THE CLOSING OF NEGOTIATIONS; AND THAT YOU WERE NOT INFORMED THAT
REVISIONS RECEIVED AFTER SUCH DATE WOULD BE TREATED AS A LATE
MODIFICATION.
YOU MAINTAIN THAT YOU WERE LED TO BELIEVE THAT THE TELEPHONIC
CONVERSATION OF JULY 25, 1972, WAS FOR THE SOLE PURPOSE OF CONFIRMING
THAT YOUR QUOTATION WAS WITHOUT ERROR, AND THAT YOU WERE NOT REQUESTED
TO SUBMIT YOUR "BEST AND FINAL" OFFER. AS A RESULT, YOU CONTEND THAT
YOU WERE NOT AFFORDED AN OPPORTUNITY TO NEGOTIATE OR TO SUBMIT PRICE
REVISIONS RESULTING FROM NEGOTIATIONS. IT IS ALSO YOUR POSITION THAT
SINCE YOU WERE NOT ADVISED IN ACCORDANCE WITH ASPR 3-805.1(B) THAT ANY
RESPONSE RECEIVED AFTER JULY 31, 1972, WOULD BE TREATED AS A LATE OFFER,
YOUR REVISED PROPOSAL DATED AUGUST 1, 1972, CANNOT BE TREATED AS SUCH,
BUT RATHER, MUST BE HANDLED AS "NORMAL REVISIONS OF PROPOSALS BY
SELECTED OFFERORS OCCURRING DURING THE USUAL CONDUCT OF NEGOTIATIONS."
HOWEVER, THE CONTRACT SPECIALIST STATES THAT DURING THE TELEPHONIC
CONVERSATION OF JULY 25, 1972, HE ADVISED YOU THAT NEGOTIATIONS WERE
BEING CONDUCTED WITH ALL FIRMS WITHIN THE ZONE OF CONSIDERATION; THAT
YOU SHOULD REVIEW THE RFQ SCOPE OF WORK AND FULLY ASSURE YOURSELF THAT
YOU UNDERSTOOD THE SCOPE OF WORK; AND THAT YOU SHOULD EITHER REVISE OR
CONFIRM YOUR QUOTATION ACCORDINGLY. FURTHER, THE CONTRACT SPECIALIST
STATES THAT HE INFORMED YOU THAT YOUR BEST AND FINAL OFFER, WHETHER A
REVISION OR A CONFIRMATION OF YOUR ORIGINAL QUOTATION WAS TO BE
SUBMITTED PRIOR TO THE CLOSE OF BUSINESS ON JULY 31, 1972.
THE METHOD OF TERMINATING NEGOTIATIONS IS PRESCRIBED BY ASPR
3-805.1(B) WHICH PROVIDES IN RELEVANT PART:
"*** WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE
SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED
TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) SHALL BE OFFERED AN
EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER
REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL
SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF
DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR
PROPOSALS MUST BE SUBMITTED BY THAT DATE. ALL SUCH OFFERORS SHALL BE
INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS
A LATE PROPOSAL IN ACCORDANCE WITH THE 'LATE PROPOSAL' PROVISIONS OF THE
REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE
SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH A LATE PROPOSAL,
RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM
NEGOTIATIONS HAVE BEEN CONDUCTED.) IN ADDITION, ALL SUCH OFFERORS SHALL
ALSO BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OF
NEGOTIATION NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF
PROPOSAL, IF APPLICABLE (SEE 3-508), WILL BE FURNISHED TO ANY OFFEROR
UNTIL AWARD HAS BEEN MADE."
THE PROVISION REQUIRES THAT OFFERORS BE ADVISED (1) THAT NEGOTIATIONS
ARE BEING CONDUCTED; (2) THAT OFFERORS ARE BEING ASKED FOR THEIR "BEST
AND FINAL" OFFER, NOT MERELY TO CONFIRM OR RECONFIRM PRIOR OFFERS; AND
(3) THAT ANY REVISION OF A PROPOSAL MUST BE SUBMITTED BY THE DATE
SPECIFIED. 48 COMP. GEN. 536, 542 (1969); 50 COMP. GEN. 117, 125
(1970).
AS PREVIOUSLY STATED, THE CONTRACT SPECIALIST MAINTAINS THAT YOU WERE
INFORMED THAT NEGOTIATIONS WERE BEING CONDUCTED AND THAT THE CUT-OFF
DATE FOR YOUR BEST AND FINAL OFFER WAS JULY 31, 1972. IN THIS
CONNECTION, THE ADMINISTRATIVE REPORT POINTS OUT THAT YOUR CONFIRMATION
LETTER OF JULY 28 INDICATED AN EXPECTATION THAT THE CONFIRMATION "WILL
EXPEDITE THE PROCUREMENT PROCEDURES AND WILL RESULT IN A PROMPT AWARD OF
THE PROPOSED CONTRACT," THUS INDICATING, IN THE OPINION OF THE ARMY,
THAT YOU UNDERSTOOD THAT NEGOTIATIONS WERE CLOSED. ALTHOUGH YOU HAVE
ARGUED TO THE CONTRARY, THE RECORD DOES NOT AFFORD US A PROPER BASIS FOR
REJECTING THE GOVERNMENT'S POSITION THAT YOU WERE ADVISED, THROUGH THE
TELEPHONE CONVERSATION OF JULY 25, 1972, OF THE OPPORTUNITY TO
NEGOTIATE, AND THAT YOU WERE APPRISED THAT JULY 31, 1972, WAS THE
DEADLINE FOR SUBMISSION OF YOUR BEST AND FINAL OFFER.
IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE CONTRACTING
OFFICER PROPERLY DECLINED TO CONSIDER ANY FURTHER PRICING REVISIONS
SUBMITTED AFTER THE JULY 31 CLOSING DATE. SEE B-170227, OCTOBER 20,
1970. ACCORDINGLY, YOUR PROTEST MUST BE DENIED AND THE PROCURING AGENCY
MAY PROCEED WITH AWARD OF THE CONTRACT.
ALTHOUGH WE HAVE FOUND NO BASIS FOR INTERFERING WITH THIS
PROCUREMENT, IT IS CLEAR, AS RECOGNIZED BY THE ARMY IN THEIR LEGAL
OPINION ATTACHED TO THE ADMINISTRATIVE REPORT, THAT THE GOVERNMENT
NEGOTIATOR COULD HAVE MORE EFFECTIVELY DOCUMENTED THE NEGOTIATION
PROCESS BY GIVING ALL OFFERORS WRITTEN NOTICE OF THE CUT-OFF DATE FOR
SUBMISSION OF BEST AND FINAL OFFERS.
ALTHOUGH THE REGULATIONS DO NOT SPECIFY THE MANNER BY WHICH OFFERORS
ARE TO BE NOTIFIED OF THE CLOSING TIME OF NEGOTIATIONS, AND DESPITE THE
FACT THAT WE HAVE HELD IN PREVIOUS DECISIONS THAT VERBAL NOTIFICATION TO
SUBMIT A FINAL OFFER BY A CERTAIN TIME CONSTITUTES ADEQUATE NOTICE OF
THE TIME FOR CLOSING OF NEGOTIATIONS AND JUSTIFIES THE REJECTION OF
LATER PRICING REVISIONS (SEE B-167867, JANUARY 20, 1970; B-170227,
SUPRA.), WE ARE RECOMMENDING BY LETTER OF TODAY, TO THE SECRETARY OF
DEFENSE THAT IN ORDER TO AVOID MISUNDERSTANDING AND CONFUSION IN THE
NEGOTIATION PROCESS, CONSIDERATION BE GIVEN TO AMENDING THE ASPR TO
PROVIDE THAT WHENEVER FEASIBLE, REQUESTS FOR BEST AND FINAL OFFERS AND
THE ESTABLISHMENT OF CUT-OFF DATES SHOULD BE CONFIRMED IN WRITING.
B-176683(2), DEC 21, 1972
PROCUREMENT PROCEDURES - NEGOTIATIONS - GAO RECOMMENDATIONS
LETTER CONCERNING THE DECISION OF TODAY, B-176683, DENYING THE
PROTEST OF UNITED TECHNOLOGY, INC.
IN ORDER TO AVOID MISUNDERSTANDING AND CONFUSION IN THE NEGOTIATING
PROCESS, CONSIDERATION SHOULD BE GIVEN TO AMENDING THE ASPR SO AS TO
REQUIRE THAT REQUESTS FOR FINAL OFFERS AND THE ESTABLISHMENT OF CUT-OFF
DATES BE CONFIRMED IN WRITING, WHENEVER FEASIBLE.
TO MR. SECRETARY:
THIS IS TO RECOMMEND THAT CONSIDERATION BE GIVEN TO AMENDING THE
PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION CONCERNING THE
METHOD OF CONDUCTING NEGOTIATIONS.
ENCLOSED IS A COPY OF OUR DECISION OF TODAY, B-176683, DENYING THE
PROTEST OF UNITED TECHNOLOGY, INCORPORATED. IN THIS PROCUREMENT ORAL
NEGOTIATIONS WERE CONDUCTED. HOWEVER, IT WAS ALLEGED BY THE PROTESTER
THAT HIS FIRM HAD NOT BEEN ADVISED THAT NEGOTIATIONS HAD BEEN OPENED OR
THAT A CUT-OFF DATE HAD BEEN ESTABLISHED FOR THE CLOSE OF NEGOTIATIONS.
THE PROTESTER CONTENDED THAT THE CONTRACTING OFFICER MERELY REQUESTED
THAT THE PROTESTER CONFIRM ITS SUBMITTED OFFER. ALTHOUGH THE PROTESTER
MAY HAVE MISUNDERSTOOD THE CONTRACTING OFFICER, THE RECORD DID NOT
SUPPORT A CONCLUSION THAT THE CONTRACTING OFFICER HAD NOT PROPERLY
ADVISED THE PROTESTER OF THE NEGOTIATIONS.
ON OTHER OCCASIONS WHEN ORAL NEGOTIATIONS HAVE BEEN CONDUCTED WE HAVE
OBSERVED THAT SIMILAR MISUNDERSTANDINGS ON THE PART OF OFFERORS APPEAR
TO HAVE RESULTED. SEE, FOR EXAMPLE, B-170227, OCTOBER 30, 1970;
B-168671, MARCH 2, 1970, COPIES ENCLOSED. WE HAVE NOT SUSTAINED
PROTESTS BASED ON THE CONTRACTING OFFICER'S FAILURE TO PROVIDE WRITTEN
CONFIRMATION OF REQUEST FOR BEST AND FINAL OFFERS AND THE ESTABLISHMENT
OF CUT-OFF DATES SINCE THE ASPR DOES NOT SPECIFY THE MANNER BY WHICH
OFFERORS ARE TO BE NOTIFIED OF THE CLOSING OF NEGOTIATIONS AND WE HAVE
CONSIDERED VERBAL NOTIFICATION TO BE SUFFICIENT.
HOWEVER, AS NOTED IN THE INSTANT CASE, WE HAVE COME TO THE CONCLUSION
THAT IN ORDER TO AVOID MISUNDERSTANDING AND CONFUSION IN THE NEGOTIATING
PROCESS, CONSIDERATION SHOULD BE GIVEN TO AMENDING THE ASPR SO AS TO
REQUIRE THAT REQUESTS FOR FINAL OFFERS AND THE ESTABLISHMENT OF CUT-OFF
DATES BE CONFIRMED IN WRITING, WHENEVER FEASIBLE.
OUR OFFICE WOULD APPRECIATE BEING ADVISED AS TO ANY ACTION TAKEN WITH
RESPECT TO THE MATTER.
B-176864, DEC 21, 1972
BID PROTEST - BRAND NAME OR EQUAL - SIMILAR CHARACTERISTICS
DECISION CONCERNING THE DENIAL OF A PROTEST BY OLIVETTI CORPORATION
AGAINST THE AWARD OF A CONTRACT TO PAILLARD, INC., UNDER A SOLICITATION
ISSUED BY THE FEDERAL SUPPLY SERVICE, GSA, FOR 75 ELECTRIC TYPEWRITERS.
THE REQUIREMENT OF A "BRAND NAME OR EQUAL" PURCHASE IS NOT MET IF THE
"EQUAL" PRODUCT DOES NOT HAVE THE SALIENT CHARACTERISTICS OF THE BRAND
NAME PRODUCT DEEMED ESSENTIAL TO THE NEEDS OF THE GOVERNMENT. THUS, IT
WAS NOT NECESSARY FOR THE PAILLARD TYPEWRITER TO HAVE FEATURES OF THE
OLIVETTI MODEL NOT CITED AS SALIENT CHARACTERISTICS IN ORDER FOR IT TO
BE CONSIDERED FOR AWARD. SINCE THE AWARD TO PAILLARD WAS PROPER,
OLIVETTI'S PROTEST IS DENIED.
TO OLIVETTI CORPORATION:
REFERENCE IS MADE TO YOUR LETTERS DATED SEPTEMBER 4, AND AUGUST 30,
1972, PROTESTING AGAINST THE AWARD OF CONTRACT TO PAILLARD, INCORPORATED
(PAILLARD), UNDER SOLICITATION NO. 3FP-B3-N-B30877-8-25-72, ISSUED BY
THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION (GSA), FOR
75 ELECTRIC TYPEWRITERS.
IT IS REPORTED THAT THE SUBJECT REQUIREMENT WAS RECEIVED BY GSA ON
AUGUST 23, 1972, IN THE FORM OF A REQUISITION DATED AUGUST 20, 1972,
FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CALLING FOR 75
ELECTRIC TYPEWRITERS FOR USE IN THE RECENT FLOOD DISASTER AREA OF WILKES
BARRE, PENNSYLVANIA.
DELIVERY OF THESE TYPEWRITERS WAS REQUIRED IN WILKES BARRE NO LATER
THAN AUGUST 29, 1972, IN ORDER NOT TO DELAY THE PROCESSES OF THE
GOVERNMENT EMERGENCY RELIEF OPERATIONS. IN VIEW OF THE CIRCUMSTANCES,
GSA REPORTS THAT THE REQUIREMENTS WERE GIVEN VERBALLY TO PROSPECTIVE
OFFERORS, INCLUDING OLIVETTI, ON AUGUST 25, 1972, AS FOLLOWS:
TYPEWRITER, ELECTRIC, CARBON RIBBON, 13" CARRIAGE, STANDARD ELITE
TYPE, HEAVY DUTY, OLIVETTI EDITOR 4 OR EQUAL.
THREE OFFERS WERE RECEIVED ON THAT DATE. PAILLARD WAS LOW, OFFERING
A HERMES AMBASSADOR AT $255.95 EACH AS AN EQUAL PRODUCT TO THE OLIVETTI
EDITOR 4. YOU OFFERED YOUR EDITOR 4 MODEL AT $325 AND YOUR EDITOR 3
MODEL AT $247 EACH; HOWEVER, THE EDITOR 3 MODEL WAS NOT CONSIDERED
EQUAL TO YOUR EDITOR 4 MODEL. A THIRD OFFER WAS SUBMITTED BY OLYMPIA AT
$319.70 EACH. SINCE THE PAILLARD MODELS (HERMES AMBASSADOR) WERE
MANUFACTURED IN SWITZERLAND, A 12 PERCENT "BUY AMERICAN" BID EVALUATION
FACTOR WAS ADDED TO THE PAILLARD OFFER IN ACCORDANCE WITH FPR 1-6.104-4,
THEREBY INCREASING THE EVALUATED PRICE TO $286.64 EACH, WHICH PRICE WAS
STILL LOWER THAN THE OTHER PRICES RECEIVED. AWARD WAS MADE TO PAILLARD
ON AUGUST 25, 1972, AND DELIVERY WAS MADE ON OR BEFORE AUGUST 29, 1972.
YOU ALLEGE THAT THE HERMES AMBASSADOR OFFERED BY PAILLARD DOES NOT
EQUAL THE OLIVETTI EDITOR 4 AS REQUIRED BY GSA. YOU NOTE THAT THE
HERMES AMBASSADOR LACKS A NUMBER OF FEATURES THAT ARE PROVIDED AS
STANDARD EQUIPMENT ON THE OLIVETTI EDITOR 4. THESE FEATURES INCLUDE A
SPECIAL MEMORY FEATURE, MULTIPLE PLATEN POSITION SETTINGS, EXPRESS
MARGIN KEY, SPECIAL SKIP TABULATION, AUTOMATIC MARGIN BY-PASS KEY,
HORIZONTAL HALF SPACE KEY, AUTOMATIC TITLE CENTERING, A REVERSE
UNDERSCORE FEATURE, SPECIAL PAGE END INDICATOR AND SPECIAL ELECTRICALLY
SET MARGINS. ALSO, YOU ALLEGE THAT THE PROCURING ACTIVITY SHOULD HAVE
ACCEPTED YOUR ALTERNATE OFFER OF $247 EACH FOR THE OLIVETTI EDITOR 3
WHICH YOU BELIEVE IS EQUAL TO THE EDITOR 4. FINALLY, YOU BELIEVE THE
GOVERNMENT HAS EXPRESSED A PREFERENCE FOR UNITED STATES PRODUCTS AND YOU
NOTE THAT THE HERMES AMBASSADOR IS MANUFACTURED IN SWITZERLAND.
AS GSA POINTS OUT, THE FEATURES YOU CITE WERE NOT CITED AS SALIENT
CHARACTERISTICS OF THE BRAND NAME PURCHASE DESCRIPTION. IN THIS REGARD,
FPR 1-1.307-4(B) PROVIDES THAT "BRAND NAME OR EQUAL" PURCHASE
DESCRIPTIONS SHOULD SET FORTH THOSE SALIENT CHARACTERISTICS OF THE BRAND
NAME PRODUCT WHICH ARE DEEMED ESSENTIAL TO THE NEEDS OF THE GOVERNMENT.
AN "EQUAL" PRODUCT WHICH CONFORMS TO THE SALIENT CHARACTERISTICS LISTED
IN THE SOLICITATION IS RESPONSIVE TO THE "BRAND NAME OR EQUAL"
REQUIREMENT. B-169210, APRIL 22, 1970. CONSEQUENTLY, IT WAS NOT
NECESSARY FOR THE HERMES AMBASSADOR MACHINE TO HAVE FEATURES OF YOUR
MACHINE WHICH WERE NOT CITED AS SALIENT CHARACTERISTICS IN ORDER TO BE
CONSIDERED FOR THE AWARD.
YOUR ALTERNATE BID OF $247 EACH FOR THE OLIVETTI EDITOR 3 WAS
REJECTED BECAUSE IT DID NOT MEET THE REQUIREMENT OF BEING A "HEAVY DUTY"
MODEL. WE HAVE BEEN ADVISED THAT THE EDITOR 4 IS OF HEAVIER
CONSTRUCTION, HAVING SUBSTANTIALLY THICKER AND SLIGHTLY LARGER MACHINE
PARTS (THE EDITOR 4 WEIGHS APPROXIMATELY 46.2 LBS., WHILE THE EDITOR 3
WEIGHS APPROXIMATELY 32.4 LBS.). IN THIS REGARD, OUR DECISION TO YOUR
FIRM, B-176385, DECEMBER 11, 1972, ALSO NOTES THAT THE EDITOR 3 IS
CONSIDERED A LIGHT DUTY TYPEWRITER AND THEREFORE IS NOT EQUAL TO YOUR
EDITOR 4 MODEL. CONSEQUENTLY, THIS OFFICE BELIEVES THAT GSA DID NOT ERR
IN DETERMINING THAT THE EDITOR 3 DOES NOT MEET THE SALIENT FEATURE THAT
THE TYPEWRITER BE A "HEAVY DUTY" MODEL.
IN EVALUATING FOREIGN BIDS, FPR 1-6.104-4 REQUIRES THAT EACH FOREIGN
BID BE ADJUSTED FOR EVALUATION PURPOSES BY ADDING A PERCENTAGE FACTOR TO
THE BID. THE 12 PERCENT FACTOR WAS USED IN THE SUBJECT PROCUREMENT IN
ACCORDANCE WITH THE REGULATION. PAILLARD STILL REMAINED LOW BIDDER AND
THIS OFFICE CANNOT FIND ANY LEGAL BASIS TO DISTURB THE AWARD MADE TO
PAILLARD.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-176889, DEC 21, 1972
CIVILIAN EMPLOYEE - WAIVER OF INDEBTEDNESS - EMPLOYEE RESPONSIBILITY
DECISION DENYING WAIVER OF INDEBTEDNESS REPRESENTING A WAGE
OVERPAYMENT OF $820 MADE TO FRED NAKAGAWA, A TEACHER AT THE DRAKE MIDDLE
SCHOOL, APO SAN FRANCISCO.
SINCE THE ERRONEOUS PAYMENT AMOUNTED TO AN INCREASE OF $40 PER PAY
PERIOD, CLAIMANT SHOULD HAVE BEEN AWARE OF THE DIFFERENCE BETWEEN THE
INCREASED PAY AND THE RATE OF PAY NORMALLY DUE HIM. ACCORDINGLY,
CLAIMANT'S FAILURE TO ENSURE THAT THE AMOUNT STATED ON HIS PAYCHECK WAS
CORRECT PRECLUDES A WAIVER OF HIS INDEBTEDNESS.
TO MR. FRED NAKAGAWA:
REFERENCE IS MADE TO YOUR LETTER DATED MAY 15, 1972, WHICH WILL BE
VIEWED AS CONSTITUTING AN APPEAL FROM THE ACTION OF OUR TRANSPORTATION
AND CLAIMS DIVISION IN DENYING YOUR REQUEST FOR WAIVER, UNDER THE
AUTHORITY OF 5 U.S.C. 5584, AS ADDED BY PUBLIC LAW 90-616, APPROVED
OCTOBER 21, 1968, OF AN ERRONEOUS PAYMENT OF PAY IN THE AMOUNT OF $820
WHILE EMPLOYED AS A TEACHER AT DRAKE MIDDLE SCHOOL, APO SAN FRANCISCO
96299.
THE RECORD INDICATES THAT DURING THE 1969-70 SCHOOL YEAR (AUGUST 18,
1969-MAY 30, 1970) YOU WERE TO RECEIVE A SALARY OF $8,415 OR $40.07 PER
DAY. HOWEVER, DUE TO AN ADMINISTRATIVE ERROR YOU WERE PAID AT A DAILY
RATE OF $44.07 (AN OVERPAYMENT OF $4 PER DAY), WHICH RESULTED IN A GROSS
OVERPAYMENT OF $820 FOR THE SUBJECT SCHOOL YEAR.
THE RECORD FURTHER SHOWS THAT IN THE PREVIOUS 2 SCHOOL YEARS YOU
RECEIVED GROSS SALARY INCREASES OF APPROXIMATELY $600 AND $700 A SCHOOL
YEAR WHICH RESULTED IN NET BIWEEKLY PAY INCREASES OF $18.64 AND $14.79,
RESPECTIVELY. HOWEVER, IN SCHOOL YEAR 1969-70, YOUR NET BIWEEKLY PAY
INCREASED BETWEEN $49.28 AND $52.99 (DUE TO CHANGES IN DEDUCTIONS) WHILE
THE GROSS SALARY INCREASE FOR THE SCHOOL YEAR WAS ONLY TO BE $800.
ALTHOUGH YOU ALLEGE THAT YOU WERE UNAWARE OF THIS, THE INCREASE IS IN
EXCESS OF 100 PERCENT OVER THE DIFFERENCE IN NET PAY FOR THE IMMEDIATELY
PRECEDING 2 SCHOOL YEARS.
IT IS APPARENTLY YOUR POSITION THAT YOU WERE TOTALLY UNAWARE THAT AN
ERROR HAD BEEN MADE WITH RESPECT TO YOUR PAY ENTITLEMENTS. FURTHERMORE
YOU HAVE INDICATED A LACK OF FULL UNDERSTANDING OF THE ENTRIES MADE ON
THE LEAVE AND EARNINGS STATEMENTS GIVEN TO YOU WITH EACH PAYCHECK.
FINALLY, IT IS YOUR POSITION THAT AS OF THE TIME THAT YOU MADE INQUIRY
TO THE CHIEF, CIVILIAN PAY UNIT, AS TO THE CORRECTNESS OF YOUR PAY FOR
THE 1970-71 SCHOOL YEAR, SUCH INDIVIDUAL WAS UNAWARE OF THE ERROR WHICH
HAD BEEN MADE.
NOTWITHSTANDING YOUR ASSERTION OF A LACK OF UNDERSTANDING CONCERNING
YOUR LEAVE AND EARNINGS STATEMENTS WE NOTE THAT ON AT LEAST TWO
OCCASIONS YOU HAVE EVINCED A WORKING KNOWLEDGE OF THE IMPORT OF THE
ENTRIES MADE THEREON. FOR EXAMPLE, IN YOUR LETTER TO OUR OFFICE DATED
DECEMBER 5, 1971, YOU STATED THAT:
"*** I HAD TO TAKE A PERSONAL LEAVE LAST WEEK TO TAKE MY EARNING AND
LEAVE STATEMENT CARD TO THE PERSONNEL OFFICE AT TACHIKAWA AIR BASE
BECAUSE I SUDDENLY REALIZED THAT I HAVE BEEN CHARGED 10 1/2 DAYS SICK
LEAVE DURING MY 7 1/2 YEARS IN JAPAN. ***"
IN ADDITION WE NOTE THAT YOU STATED IN YOUR APPEAL LETTER OF MAY 15,
1972, AS FOLLOWS:
"MR. BEVIS, CHIEF, CIVILIAN PAY UNIT, 475TH AIR BASE WING, (PACAF),
APO SF 96328, WAS NOT AWARE OF THIS ERROR HIMSELF UNTIL I CALLED HIS
OFFICE TO INQUIRE WHY MY PAY FOR THE NEW SCHOOL YEAR WAS NOT MUCH
DIFFERENT FROM LAST YEAR'S PAY. ***"
IT IS OUR VIEW THAT UNDER THE PARTICULAR CIRCUMSTANCES HERE INVOLVED
YOU SHOULD HAVE RECOGNIZED THE ERROR IN YOUR OWN RATE OF PAY. AS A
FEDERAL EMPLOYEE WITH AT LEAST 7 1/2 YEARS SERVICE (IN JAPAN ALONE) AS
OF THE TIME OF ERROR YOU COULD REASONABLY HAVE BEEN EXPECTED TO BE AWARE
OF THE GROSS PAY PER PAY PERIOD PROPERLY DUE YOU. THIS IS ESPECIALLY SO
WHERE THE ERROR AMOUNTED TO $40 PER PAY PERIOD, AND CONSIDERING ALSO
THAT THE FOLLOWING YEAR WHEN THE DIFFERENCE WAS ONLY $1.40 PER PAY
PERIOD YOU BROUGHT THIS TO THE ATTENTION OF THE PAYROLL OFFICE.
IN ADDITION, THE BIWEEKLY RATE OF PAY OF 1968-69, THE SCHOOL YEAR
WHICH IMMEDIATELY PRECEDED THE PERIOD IN QUESTION, WHEN COMPARED TO THE
ERRONEOUS PAYMENTS RECEIVED IN THE 1969-70 SCHOOL YEAR OUGHT TO HAVE
ALERTED YOU TO THE ADVISABILITY OF CHECKING TO ENSURE THAT THE AMOUNT
REFLECTED IN YOUR PAYCHECK WAS CORRECT. YOUR FAILURE TO DO SO
CONSTITUTES FAULT ON YOUR PART THEREBY PRECLUDING WAIVER OF THE SUBJECT
INDEBTEDNESS.
ACCORDINGLY, ON THE BASIS OF THE FOREGOING, THE ACTION OF OUR
TRANSPORTATION AND CLAIMS DIVISION IS SUSTAINED.
B-177289, DEC 21, 1972
SURVIVOR'S CLAIM - PRIOR PAYMENT IN FULL - SURVIVOR'S PENSION RIGHTS
DECISION SUSTAINING THE PRIOR DISALLOWANCE OF A CLAIM BY ALBERTEEN J.
SWEENEY FOR THE ADDITIONAL ARREARS OF RETIRED PAY ACCRUED BY HER LATE
HUSBAND, FIRST SGT. ALFRED SWEENEY.
SINCE A U.S. TREASURY CHECK REPRESENTING THE AMOUNT OF RETIRED PAY
DUE THE DECEDENT WAS APPARENTLY RECEIVED, ENDORSED, AND NEGOTIATED
THROUGH BANKING CHANNELS BY THE PAYEE-CLAIMANT, THE CLAIM IS AGAIN
DISALLOWED.
TO MRS. ALBERTEEN J. SWEENEY:
REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 18 AND OCTOBER 21, 1972,
IN EFFECT REQUESTING RECONSIDERATION OF OUR CLAIMS DIVISION LETTER DATED
MARCH 30, 1954, DENYING YOUR CLAIM FOR ADDITIONAL ARREARS OF RETIRED PAY
IN THE CASE OF YOUR LATE HUSBAND, FIRST SERGEANT ALFRED SWEENEY, R 312
979, U.S. ARMY, RETIRED, WHO DIED ON MAY 31, 1953.
THE RECORDS OF OUR OFFICE SHOW THAT THE ENTIRE BALANCE OF RETIRED PAY
DUE YOUR LATE HUSBAND WAS PAID TO YOU BY CHECK NO. 2,619,322, DATED MAY
31, 1953, DRAWN TO THE ORDER OF ALFRED SWEENEY IN THE AMOUNT OF $205.52,
REPRESENTING RETIRED PAY FOR THE MONTH OF MAY, 1953. THE CHECK WAS MADE
PAYABLE TO YOU, ALBERTEEN J. SWEENEY, AS WIDOW OF ALFRED SWEENEY,
DECEASED PAYEE.
IN YOUR CURRENT LETTER OF AUGUST 18, 1972, YOU STATE THAT YOU HAVE
NEVER RECEIVED A PAYMENT FROM OUR OFFICE. YOU ALSO ENCLOSE A COPY OF A
REFERRAL NOTICE DATED APRIL 12, 1954, FROM THE FINANCE CENTER, U.S. ARMY
TO OUR OFFICE, AND SAY THIS IS THE LAST COMMUNICATION ON YOUR CLAIM.
OUR RECORDS SHOW THAT THE CHECK DATED MAY 31, 1953, IN THE AMOUNT OF
$205.52 APPEARS TO HAVE BEEN ENDORSED BY YOU, NEGOTIATED THROUGH REGULAR
BANKING CHANNELS, AND PAID BY THE TREASURER OF THE UNITED STATES ON
SEPTEMBER 14, 1953. TO HELP YOU REMEMBER, WE ARE ENCLOSING A
PHOTOSTATIC COPY OF BOTH SIDES OF THE CHECK.
BY OUR CLAIMS DIVISION LETTER DATED AUGUST 24, 1953, THE SUBJECT
CHECK WAS TRANSMITTED TO YOU. THEREAFTER, BY LETTERS DATED MARCH 30,
1954; AUGUST 10, 1954; AND FEBRUARY 10, 1956, OUR CLAIMS DIVISION
ADVISED YOU THAT NO FURTHER AMOUNTS REMAINED DUE INCIDENT TO YOUR CLAIM.
YOU ALSO VISITED OUR OFFICE ON OCTOBER 1 AND 8, 1970, AND THE MATTER
WAS AGAIN FULLY EXPLAINED TO YOU.
WHILE WE ARE SYMPATHETIC TO YOUR NEED FOR MONEY FOR YOUR SUPPORT, NO
AMOUNT OF RETIRED PAY REMAINS DUE YOUR LATE HUSBAND'S ESTATE WHICH MAY
BE PAID TO YOU. HOWEVER, WE SUGGEST THAT YOU CONTACT THE VETERANS
ADMINISTRATION REGARDING ANY POSSIBLE RIGHTS YOU MIGHT HAVE TO A WIDOW'S
PENSION UNDER LAWS ADMINISTERED BY THAT AGENCY.
ACCORDINGLY, THE ACTION OF OUR CLAIMS DIVISION IN DENYING YOUR CLAIM
IS SUSTAINED.
B-177432, DEC 21, 1972
CONTRACT - RELIEF FROM UNILATERAL MISTAKE - LACK OF NOTICE - RECISSION
IN GOVERNMENT INTEREST
DECISION AS TO WHETHER FLORIDA MACHINE & FOUNDRY CO. MAY BE RELIEVED
OF ITS PERFORMANCE OBLIGATIONS UNDER A CONTRACT FOR TWO ALLOY CAST IRON
PUMP LINERS AWARDED BY THE ARMY ENGINEERING DISTRICT, BUFFALO, N.Y.
THE COMP. GEN. AGREES THAT THE CONTRACTING OFFICER SHOULD NOT HAVE
BEEN ON CONSTRUCTIVE NOTICE OF A PRICING ERROR IN FLORIDA'S BID BECAUSE
OF THE LARGE DIFFERENCES BETWEEN EACH OF THE FOUR BIDS RECEIVED. THUS,
RELIEF WILL NOT BE GRANTED FROM THE UNILATERAL MISTAKE SINCE THERE WAS
NO NEED FOR THE CONTRACTING OFFICER TO VERIFY THE CONTRACTOR'S BID
PRICE. WENDER PRESSES, INC. V. UNITED STATES, 56 F. SUPP. 505. ALSO,
SINCE THE MISTAKE WAS NOT GREAT, THE UNCONSCIONABILITY DOCTRINE DOES NOT
APPLY.
HOWEVER, THE COMP. GEN. DOES NOT OBJECT TO RESCINDING FLORIDA'S
CONTRACT SINCE THE ADDITION OF THE ERRONEOUS PRICE WOULD DISPLACE
FLORIDA AS LOW BIDDER AND RECISSION IS THEREFORE IN THE GOVERNMENT'S
BEST INTEREST.
TO MR. SECRETARY:
THIS IS IN REPLY TO A LETTER DATED NOVEMBER 9, 1972, AND ENCLOSURES,
REFERENCE DAEN-GCN, FROM THE DEPUTY GENERAL COUNSEL, OFFICE OF THE CHIEF
OF ENGINEERS, REQUESTING A DECISION AS TO WHETHER FLORIDA MACHINE &
FOUNDRY COMPANY (FLORIDA) MAY BE RELIEVED OF ITS OBLIGATIONS UNDER
CONTRACT NO. DACW49-73-C-0022, AWARDED PURSUANT TO FORMAL ADVERTISING
PROCEDURES BY THE U.S. ARMY ENGINEER DISTRICT, BUFFALO, NEW YORK.
THE INVITATION REQUESTED BIDS FOR FURNISHING TWO ALLOY CAST IRON PUMP
LINERS, AND WAS SET ASIDE FOR THE EXCLUSIVE PARTICIPATION OF SMALL
BUSINESS CONCERNS. THE FOUR BIDS RECEIVED WERE AS FOLLOWS:
BIDDER QUANTITY UNIT PRICE TOTAL BID
PETTIBONE CORPORATION 2 $1,430.00 $2,860.00
FLORIDA MACHINE & FOUNDRY CO. 2 2,270.00 4,541.40
AMSCO DIVISION, ABEX CORP. 2 2,859.56 5,719.12
THOMAS FOUNDRIES, INC. 2 4,620.00 9,240.00
THE RECORD SHOWS THAT THE LOW AND THIRD-LOW BIDDERS WERE DISQUALIFIED
AS NONRESPONSIVE, SINCE NEITHER WAS A SMALL BUSINESS CONCERN. AWARD WAS
THEREFORE MADE ON SEPTEMBER 12, 1972, TO FLORIDA AS THE LOWEST
RESPONSIVE BIDDER.
BY LETTER OF SEPTEMBER 20, 1972, FLORIDA ACKNOWLEDGED RECEIPT OF THE
CONTRACT BUT ALLEGED A MISTAKE IN ITS BID AND REQUESTED PERMISSION TO
WITHDRAW FROM ITS CONTRACT. PURSUANT TO THE CONTRACTING OFFICER'S
REQUEST, FLORIDA SUBMITTED ITS WORK-PAPERS, AND ASSERTED THAT IT
NEGLECTED TO INCLUDE IN ITS BID THE VALUE OF THE CASTING, FREIGHT AND
CRATING ($1,682.70). THE LETTER FURTHER STATES THAT THE BID PRICE
SHOULD HAVE BEEN $3,953.40 FOR EACH UNIT RATHER THAN THE ERRONEOUS PRICE
BID OF $2,270.70. IT IS NOTED THAT A DETAILED GOVERNMENT ESTIMATE WAS
NOT PREPARED BUT THAT AN INFORMAL ESTIMATE OF $1,550 FOR EACH PUMP LINER
WAS ARRIVED AT BASED ON PREVIOUS PROCUREMENT COSTS OF $1,226 EACH IN
1963 AND 1966. WHILE THE CONTRACTING OFFICER HAS ADVISED THAT IN HIS
OPINION THE COST OF THE CASTING ($1,518.70 EACH) WAS OBVIOUSLY OMITTED
FROM THE BID PRICE, HE DOES NOT BELIEVE THAT THE MISTAKE WAS ONE WHICH
DID OR SHOULD HAVE PLACED HIM ON NOTICE OF THE ERROR PRIOR TO AWARD.
HOWEVER, YOUR DEPUTY GENERAL COUNSEL HAS EXPRESSED THE OPINION THAT IT
WOULD BE UNCONSCIONABLE TO DENY RESCISSION SINCE FLORIDA'S MISTAKE IS
EQUAL TO 74 PERCENT OF ITS BID PRICE.
THE GENERAL RULE IS THAT RELIEF WILL NOT BE GRANTED IN THE CASE OF A
CONTRACTOR'S UNILATERAL MISTAKE AFTER THE BID OR OFFER HAS BEEN ACCEPTED
BY THE GOVERNMENT UNLESS THE CIRCUMSTANCES ARE SUCH THAT THE GOVERNMENT
WAS OR SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF MISTAKE, THUS
NECESSITATING VERIFICATION BEFORE ACCEPTANCE OF THE BID OR OFFER.
WENDER PRESSES, INC. V. UNITED STATES, 170 CT. CL. 483, 343 F.2D 1961
(1965); SALIGMAN ET AL. V. UNITED STATES, 56 F. SUPP. 505 (1944); AND
45 COMP. GEN. 305 (1965). HOWEVER, RELIEF HAS BEEN ALLOWED AFTER AWARD
WHEN A MISTAKE IS SO GREAT THAT IT COULD BE SAID THE GOVERNMENT WAS
OBVIOUSLY GETTING SOMETHING FOR NOTHING. SEE KEMP V. UNITED STATES, 38
F. SUPP. 568 (1941), IN WHICH THE LOW BID WAS LESS THAN ONE THIRD OF
THE NEXT TWO HIGHER BIDS. ALSO, WE HAVE AUTHORIZED RELIEF, AFTER
VERIFICATION, WHERE THE MISTAKE WAS SO GREAT THAT IT WAS CONSIDERED
UNCONSCIONABLE (OR INEQUITABLE) TO HOLD THE FIRM TO ITS CONTRACT.
B-150382, FEBRUARY 20, 1963; B-170691, JANUARY 28, 1971.
IN THE INSTANT CASE WE DO NOT FIND A SUFFICIENT BASIS FOR CONCLUDING
THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF AN ERROR IN
FLORIDA'S BID. IN OUR OPINION, THE LARGE DIFFERENCES BETWEEN EACH OF
THE FOUR BIDS RECEIVED DID NOT INDICATE A POSSIBLE MISTAKE IN FLORIDA'S
BID, PARTICULARLY SINCE FLORIDA'S BID WAS NOT LOW AND SINCE THE
GOVERNMENT'S ESTIMATE WAS IN LINE WITH THE LOWEST BID RECEIVED. WHILE
WE HAVE NOTED THAT THE BIDS OF THE LOW AND THIRD-LOW BIDDERS (LARGE
BUSINESS CONCERNS) WERE NONRESPONSIVE, WE CONSIDER THOSE BIDS TO BE
RELEVANT TO THE DETERMINATION OF WHAT CONSTITUTES A REASONABLE PRICE (AS
WELL AS FOR PLACING THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF
ERROR) SINCE IT IS NOT INDICATED IN THIS CASE THAT THE NONRESPONSIVENESS
OF THE LARGE BUSINESS BIDS AFFECTED THE BID PRICES. SEE B-173015,
AUGUST 18, 1971.
WITH RESPECT TO YOUR COUNSEL'S OPINION THAT IT WOULD BE
UNCONSCIONABLE TO DENY RESCISSION, WE DO NOT BELIEVE THE MISTAKE IS SO
GREAT AS TO REQUIRE APPLICATION OF THAT PRINCIPLE. SEE B-174686, JULY
14, 1972; B-165744, DECEMBER 19, 1968; B-143216, AUGUST 18, 1960; AND
20 COMP. GEN. 286 (1940). IN ADDITION, WE DO NOT FEEL THAT THE
GOVERNMENT WOULD BE "OBVIOUSLY GETTING SOMETHING FOR NOTHING" UNDER
FLORIDA'S CONTRACT, PURSUANT TO THE RATIONALE OF THE KEMP CASE, INASMUCH
AS IT APPEARS THAT THE ITEMS CAN BE PROCURED ON AN UNRESTRICTED BASIS
FOR A SIGNIFICANTLY LOWER PRICE THAN WAS ACTUALLY BID BY FLORIDA.
WHILE WE ARE THEREFORE UNABLE TO CONCLUDE THAT THE CONTRACT SHOULD BE
RESCINDED BECAUSE OF FLORIDA'S UNILATERAL MISTAKE, WE WOULD NOT OBJECT
TO ACCEDING TO FLORIDA'S REQUEST TO RESCIND THE CONTRACT IF THE
GOVERNMENT'S ESTIMATE OF $1,550 A UNIT IS CONSIDERED TO BE CURRENTLY
VALID, AND THE CONTRACTING OFFICER IS ABLE TO OBTAIN SOME ASSURANCE THAT
THE PUMP LINERS CAN BE PROCURED ON AN UNRESTRICTED BASIS AT A
SIGNIFICANTLY LOWER PRICE, AS IS INDICATED BY THE LOW LARGE BUSINESS
BID. IN SUCH CIRCUMSTANCES, RESCISSION WOULD BE CONSIDERED TO BE IN THE
GOVERNMENT'S BEST INTEREST.
THE FILE TRANSMITTED WITH THE LETTER OF NOVEMBER 9 IS RETURNED.
B-175550, DEC 19, 1972
CONTRACTS - COST REIMBURSEMENT - GOVERNMENT OBLIGATIONS TO
SUBCONTRACTORS - LACK OF PRIVITY
DECISION AFFIRMING THE SETTLEMENT OF THE CLAIM OF SPECIFICATION
PACKAGING CORPORATION FOR PROVIDING PACKAGING SERVICES AND MATERIALS AS
A SUBCONTRACTOR UNDER CERTAIN AIR FORCE CONTRACTS AFTER THE PRIMARY
CONTRACTOR CEASED OPERATIONS.
THE FACT THAT THE GOVERNMENT APPROVES A SUBCONTRACT DOES NOT
ESTABLISH ANY PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTOR AND THE
GOVERNMENT. CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST CO. OF CHICAGO
V. UNITED STATES, 112 CT. CL. 563, 566 (1949). MOREOVER, THE FACT THAT
THE PRIME CONTRACT WAS A COST REIMBURSEMENT TYPE DOES NOT ESTABLISH ANY
RIGHT OF PAYMENT BY THE GOVERNMENT TO A SUBCONTRACTOR. ACCORDINGLY,
ONLY THE REASONABLE VALUE OF SERVICES PERFORMED AT THE GOVERNMENT'S
REQUEST AFTER THE PRIME CONTRACTOR CEASED OPERATIONS WILL BE ALLOWED.
ALSO, THERE IS NO AUTHORITY FOR PAYMENT OF INTEREST ON CLAIMS AGAINST
THE GOVERNMENT EXCEPT WHERE A CONTRACT SO STIPULATES OR IT IS PROVIDED
FOR IN THE STATUTE. 45 COMP. GEN. 169 (1965). FINALLY, SUBCONTRACTOR
MAY NOT ASSERT A CLAIM AGAINST THE GOVERNMENT WHEN THE CHECKS OF A PRIME
CONTRACTOR ARE RETURNED UNPAID. AEROVOX CORPORATION V. UNITED STATES,
89 F. SUPP. 873 (1950).
TO SPECIFICATION PACKAGING CORPORATION:
REFERENCE IS MADE TO YOUR LETTERS OF MAY 23, JULY 10 AND 20 AND
SEPTEMBER 9, 1972, REQUESTING REVIEW OF THE SETTLEMENT CERTIFICATE
ISSUED ON MAY 4, 1972, BY THE TRANSPORTATION AND CLAIMS DIVISION IN
CONNECTION WITH YOUR CLAIM FOR PROVIDING PACKAGING SERVICES AND
MATERIALS AS A SUBCONTRACTOR UNDER AIR FORCE CONTRACTS NOS.
F41608-69-D-5687, -8955 AND -2987.
THE RECORD INDICATES THAT THE A. C. TOOL CORPORATION WAS AWARDED THE
ABOVE-MENTIONED COST-REIMBURSABLE CONTRACTS FOR OVERHAULING CERTAIN
EQUIPMENT, AND THAT YOU PROVIDED PACKING AND SHIPPING SERVICES AS A
SUBCONTRACTOR TO A. C. TOOL. IN JANUARY 1970, A. C. TOOL BECAME
INSOLVENT AND CEASED DOING BUSINESS, AND THE THREE CONTRACTS WITH THE
AIR FORCE WERE TERMINATED FOR DEFAULT ON FEBRUARY 18, 1970. YOU THEN
CLAIMED THAT THE GOVERNMENT OWED YOU $11,310.20 FOR LABOR AND MATERIAL
FURNISHED UNDER THE CONTRACTS AND FOR WHICH YOU WERE NEVER PAID BY A.
C. TOOL.
THE SETTLEMENT CERTIFICATE DISALLOWED THE BULK OF YOUR CLAIM BECAUSE
THERE WAS NO PRIVITY OF CONTRACT BETWEEN YOU AND THE GOVERNMENT.
HOWEVER, THE AMOUNT OF $1,252.50 WAS ALLOWED AS A REASONABLE VALUE OF
SERVICES YOU PERFORMED AT THE REQUEST OF THE GOVERNMENT AFTER THE PRIME
CONTRACTOR CEASED OPERATIONS. YOU CLAIM THAT ALL THE SERVICES YOU
RENDERED WERE BASED ON THE REQUESTS OR INSTRUCTIONS OF GOVERNMENT
PERSONNEL. YOU ALSO CLAIM THAT THE GOVERNMENT HAS NOT PAID THE PRIME
CONTRACTOR FOR PACKAGING AND SHIPPING SERVICES AND THAT ITS FAILURE TO
PAY YOU WOULD RESULT IN THE GOVERNMENT IMPROPERLY OBTAINING BENEFITS
WITHOUT PAYING FOR THEM.
OUR FILE CONTAINS MANY DOCUMENTS FROM THE VARIOUS LEVELS WITHIN THE
AIR FORCE THAT WERE CONCERNED WITH THE CONTRACTS INVOLVED IN THIS
MATTER. INCLUDED IN THESE DOCUMENTS ARE STATEMENTS FROM THE INDIVIDUALS
YOU CLAIM AUTHORIZED YOU TO PERFORM SERVICES FOR THE GOVERNMENT.
ALTHOUGH WE DO NOT DOUBT THAT GOVERNMENT OFFICIALS WERE IN CONTACT WITH
YOU PRIOR TO THE TIME A.C. TOOL CEASED OPERATIONS, THE RECORD DOES NOT
ESTABLISH THAT THESE CONTACTS WERE INCONSISTENT WITH YOUR PERFORMANCE AS
A SUBCONTRACTOR UNDER THE PRIME CONTRACTS WITH A.C. TOOL. SEE 32 COMP.
GEN. 174 (1952). FURTHERMORE, THE FACT THAT THE GOVERNMENT APPROVED
YOUR SUBCONTRACT AND YOUR PERFORMANCE UNDER IT DOES NOT ESTABLISH ANY
PRIVITY OF CONTRACT BETWEEN YOU AND THE GOVERNMENT. CONTINENTAL
ILLINOIS NATIONAL BANK AND TRUST CO. OF CHICAGO V. UNITED STATES, 112
CT. CL. 563, 566 (1949); D. A. SULLIVAN AND SONS, INC., ET AL. V.
UNITED STATES, 129 CT. CL. 63 (1954); SEE ALSO TRW, INC., ASBCA NO.
11373, 68-2 BCA 7099 (JUNE 25, 1968).
YOU POINT OUT THAT THIS SITUATION INVOLVED COST-REIMBURSEMENT
CONTRACTS AND YOU ASSERT THAT THE AIR FORCE HAS NOT PAID FOR THE COST OF
YOUR SERVICES BECAUSE THE PRIME CONTRACTOR DID NOT SUBMIT INVOICES FOR
YOUR BILLS. HOWEVER, THE FACT THAT THE PRIME CONTRACTOR HAD COST
REIMBURSEMENT TYPE CONTRACTS WITH THE GOVERNMENT DOES NOT ESTABLISH YOUR
RIGHT TO PAYMENT BY THE GOVERNMENT. THE AIR FORCE HAS ADVISED US THAT
FROM APRIL 4, 1969, TO JANUARY 23, 1970, IT PAID A TOTAL OF $5,438.79
FOR REIMBURSABLE DIRECT MATERIALS USED IN PACKING UNDER CONTRACTS -5687
AND -8955. WHILE YOUR FIGURES SUGGEST THAT THE GOVERNMENT HAS NOT BEEN
BILLED FOR THE ENTIRE COST OF PACKING AND SHIPPING UNDER THE THREE
CONTRACTS, WE ARE NOT AWARE OF ANY LEGAL AUTHORITY THAT WOULD PERMIT
PAYMENT DIRECTLY TO YOU FOR ANY SUCH UNPAID BILLS. AS POINTED OUT
ABOVE, THE GOVERNMENT'S CONTRACTUAL OBLIGATION TO REIMBURSE FOR CERTAIN
COSTS EXTENDS ONLY TO THE PRIME CONTRACTOR AND NOT TO SUBCONTRACTORS.
YOU ALSO REQUEST THAT THE GOVERNMENT PURCHASE FROM YOU AT COST THE
MATERIALS YOU HAVE ON HAND THAT WERE ORIGINALLY ACQUIRED FOR PERFORMANCE
UNDER THE CONTRACTS. IT APPEARS FROM THE RECORD AND FROM YOUR OWN
STATEMENTS THAT THESE MATERIALS WERE ACQUIRED PRIOR TO THE PRIME
CONTRACTOR'S SHUTDOWN, AND THEREFORE WERE OBTAINED UNDER YOUR
CONTRACTUAL ARRANGEMENT WITH A. C. TOOL RATHER THAN IN RESPONSE TO
DIRECT INSTRUCTIONS FROM THE GOVERNMENT. UNDER THESE CIRCUMSTANCES,
THERE IS NO BASIS FOR GRANTING YOUR REQUEST.
YOU CLAIM THAT WE ARE NOT CONSISTENT IN ALLOWING AN AMOUNT FOR
CERTAIN SHIPMENTS BUT NOT OTHERS YOU MADE DURING JANUARY 1970. THE
DOCUMENTATION FURNISHED US BY THE AIR FORCE INDICATES THAT THE PRIME
CONTRACTOR CLOSED ITS PLANT ON JANUARY 23, 1970. THE INVOICES YOU
SUBMITTED SHOW THAT YOU PROVIDED SERVICES WORTH $1,252.50 AFTER THAT
DATE, AND THE RECORD REVEALS THAT SUCH SERVICES WERE PROVIDED AT THE
REQUEST OF THE GOVERNMENT. WHILE YOU DID PROVIDE ADDITIONAL SERVICES
DURING THAT MONTH, THESE SERVICES WERE RENDERED PRIOR TO THE PRIME
CONTRACTOR'S SHUTDOWN DATE AND ACCORDINGLY ARE VIEWED AS COMING UNDER
YOUR CONTRACTUAL RELATIONSHIP WITH THE PRIME CONTRACTOR. THEREFORE,
ALLOWANCE OF YOUR CLAIM ONLY IN THE AMOUNT OF $1,252.50 IS DEEMED
PROPER.
YOUR CLAIM FOR INTEREST ON THE AMOUNT ALLOWED MUST BE DENIED AS THERE
IS NO AUTHORITY FOR PAYMENT OF INTEREST ON CLAIMS AGAINST THE
GOVERNMENT, EXCEPT WHERE A CONTRACT SO STIPULATES OR IT IS PROVIDED FOR
BY STATUTE. 45 COMP. GEN. 169 (1965).
FINALLY, CITING THE BAD CHECKS YOU RECEIVED FROM THE PRIME
CONTRACTOR, YOU ASSERT THAT THERE WAS FRAUD INVOLVED ON THE PART OF A.
C. TOOL AND THAT THIS PROVIDES A BASIS FOR DIRECT REIMBURSEMENT TO YOU
BY THE GOVERNMENT. WHILE IT APPEARS THAT TWO CHECKS MADE OUT TO YOU
FROM A. C. TOOL CORPORATION WERE RETURNED BY THE BANK UNPAID, IT HAS
BEEN HELD THAT A SUBCONTRACTOR MAY NOT ASSERT A CLAIM AGAINST THE
GOVERNMENT WHEN THE CHECKS OF A PRIME CONTRACTOR ARE RETURNED UNPAID.
AEROVOX CORPORATION V. UNITED STATES, 89 F. SUPP. 873 (1950).
ACCORDINGLY, OUR SETTLEMENT CERTIFICATE OF MAY 4, 1972, IS AFFIRMED.
B-175834, DEC 19, 1972
BID PROTEST - BIDDER COMPETITIVE ADVANTAGE - SMALL BUSINESS SET-ASIDE
DECISION DENYING THE PROTEST OF DALTON SERVICE AGENCY, INC., AGAINST
ANY AWARD UNDER AN RFP ISSUED AT KELLY AFB, TEX., FOR MAINTENANCE AND
SERVICING OF AIR CONDITIONERS.
ANY COMPETITIVE ADVANTAGE EXISTING BECAUSE THE SOLICITATION REQUIRES
THE USE OF A PRODUCT MANUFACTURED BY ONE OF THE BIDDERS CANNOT BE
MITIGATED BY TAKING INTO ACCOUNT THOSE PARTICULAR CIRCUMSTANCES IF THIS
ADVANTAGE IS NOT DUE TO A PREFERENCE OR UNFAIR ACTION BY THE GOVERNMENT.
FURTHERMORE, THE DETERMINATION OF WHETHER THERE IS A REASONABLE
EXPECTATION OF RECEIVING A SUFFICIENT NUMBER OF BIDS OR OFFERS UNDER A
TOTAL SMALL BUSINESS SET-ASIDE TO ASSURE REASONABLE PRICES IS WITHIN THE
AMBIT OF SOUND ADMINISTRATIVE DISCRETION AND WILL NOT BE QUESTIONED IN
THE ABSENCE OF IMPROPER ACTION BY THE CONTRACTING OFFICER. 45 COMP.
GEN. 228, 230 (1965).
TO KAMPMANN, CHURCH & BURNS:
THIS IS IN REPLY TO YOUR LETTERS DATED JUNE 6, JULY 14, AUGUST 16 AND
OCTOBER 10, 1972, ON BEHALF OF DALTON SERVICE AGENCY, INC. (DALTON),
PROTESTING ANY AWARD UNDER REQUEST FOR PROPOSALS (RFP)
F-41699-72-R-0248, ISSUED BY THE AIR FORCE AT KELLY AIR FORCE BASE,
TEXAS.
THE RFP CONTEMPLATES A CONTRACT FOR THE MAINTENANCE AND SERVICING OF
SIX CARRIER BRAND AIR CONDITIONERS, IN THE PERFORMANCE OF WHICH THE USE
OF REPLACEMENT AND REPAIR PARTS MANUFACTURED BY THE CARRIER CORPORATION
(CARRIER) IS REQUIRED. OFFERS ARE TO BE EVALUATED ON THE BASIS OF THE
REQUIRED MAINTENANCE SERVICES, AND THE CONTRACTOR IS TO BE SEPARATELY
REIMBURSED FOR PARTS AND MATERIALS WITH A UNIT COST IN EXCESS OF $2
PURSUANT TO NEGOTIATIONS AFTER AWARD OF THE SERVICES CONTRACT.
INITIALLY, YOU PROTESTED TO OUR OFFICE THAT CARRIER HAD REFUSED TO
SELL SPARE PARTS TO DALTON WHICH PRECLUDED DALTON FROM SUBMITTING A
PROPOSAL UNDER THE RFP. IN THIS CONNECTION, WE ADVISED YOU THAT YOUR
PROTEST WAS INAPPROPRIATE FOR CONSIDERATION BY OUR OFFICE AND THAT THE
MATTER WAS REFERRED TO THE SECRETARY OF THE AIR FORCE FOR APPROPRIATE
DISPOSITION PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION
1-111.2(A). TO THE EXTENT THAT YOU AGAIN OBJECT TO THE DIFFICULTIES
BEING ENCOUNTERED BY DALTON BECAUSE OF CARRIER'S ALLEGED REFUSAL TO SELL
YOU ITS REPAIR PARTS, WE MUST AGAIN ADVISE YOU THAT SUCH ASPECT OF YOUR
PROTEST IS INAPPROPRIATE FOR OUR CONSIDERATION.
IN YOUR ABOVE-REFERENCED LETTERS YOU FURTHER PROTEST THAT THE
SOLICITATION IS DEFECTIVE IN THAT THE MANUFACTURER OF THE REQUIRED
REPLACEMENT PARTS IS BEING PERMITTED TO COMPETE ON A BASIS DIFFERENT
FROM ALL OTHER OFFERORS. SPECIFICALLY, YOU ARGUE THAT CARRIER ENJOYS AN
UNFAIR ADVANTAGE SINCE IT WILL MAKE A PROFIT ON THE MAINTENANCE SERVICES
AS WELL AS ON THE REPAIR PARTS, WHILE OTHER OFFERORS WOULD NOT SIMILARLY
PROFIT FROM THE FURNISHING OF CARRIER REPAIR PARTS. YOU NOTE THAT
CARRIER COULD LOWER ITS OFFER FOR THE MAINTENANCE SERVICES AND STILL
PROFIT FROM FURNISHING THE PARTS AND MATERIALS. MOREOVER, YOU BELIEVE
THE SOLICITATION, AS WRITTEN, WOULD ALLOW THE MANUFACTURER TO ESTABLISH
EXCESSIVE PRICES FOR ITS REPAIR PARTS SHOULD A CONTRACTOR OTHER THAN
CARRIER BE AWARDED THE SERVICE CONTRACT. YOU REQUEST THAT THE
SOLICITATION BE AMENDED TO PRECLUDE CARRIER FROM PROFITING FROM THE
MANUFACTURE AND SUPPLYING OF ITS OWN MATERIALS AND PARTS.
INASMUCH AS THE AIR FORCE PROPOSES TO AWARD A CONTRACT TO THE LOW
RESPONSIBLE OFFEROR BASED SUBSTANTIALLY ON LABOR ONLY, AND SINCE THE
PRICE OF PARTS AND MATERIALS WITH A UNIT COST IN EXCESS OF $2 WILL NOT
BE AN ELEMENT FOR INCLUSION IN THE OFFERS OR FOR EVALUATION, WE MUST
CONCLUDE THAT ANY COMPETITIVE ADVANTAGE FAVORING CARRIER BY REASONS OF
THAT FIRM DESIRING A PROFIT FROM ITS PARTS, WOULD NOT BE AS A RESULT OF
PREFERENCE OR UNFAIR ACTION BY THE GOVERNMENT. FOR THE GOVERNMENT TO
REQUIRE THAT CARRIER FORGO ANY PROFIT ON MATERIALS MANUFACTURED BY THAT
COMPANY, AND USED IN THE PERFORMANCE OF THE SERVICE CONTRACT, IN ORDER
FOR CARRIER TO BE ELIGIBLE FOR THE AWARD WOULD, IN OUR VIEW, BE
PREJUDICIAL TO CARRIER. IN THIS CONNECTION, IT IS THE GOVERNMENT'S
ESTABLISHED POLICY IN ITS PROCUREMENTS TO ALLOW MANUFACTURERS A FAIR AND
REASONABLE PROFIT ON THEIR PRODUCTS. SEE PARAGRAPH 3-808 OF THE ARMED
SERVICES PROCUREMENT REGULATION (ASPR). ALSO, WE HAVE HELD THAT THERE
IS NO REQUIREMENT FOR EQUALIZING COMPETITION (EVEN IF IT COULD BE
EFFECTED) BY TAKING INTO CONSIDERATION THOSE TYPES OF COMPETITIVE
ADVANTAGES WHICH MAY ACCRUE TO A GIVEN FIRM BY REASON OF ITS OWN
PARTICULAR CIRCUMSTANCES, AND WHICH ARE NOT DIRECTLY PROVIDED BY THE
GOVERNMENT. B-175496, NOVEMBER 10, 1972.
CONCERNING YOUR SUGGESTION THAT CARRIER COULD ESTABLISH EXCESSIVE
PRICES FOR ANY REPAIR PARTS NEEDED IN PERFORMANCE OF THE CONTRACT BY
ANOTHER FIRM, WE BELIEVE ADEQUATE SAFEGUARDS AGAINST SUCH A POSSIBILITY
ARE PROVIDED BY 15 U.S.C. 13(A) WHICH MAKES IT UNLAWFUL FOR A FIRM TO
DISCRIMINATE IN THE PRICES OF ITS COMMODITIES BETWEEN DIFFERENT
PURCHASERS.
YOU ALSO OBJECT TO THE GOVERNMENT'S FAILURE TO RESTRICT THIS
PROCUREMENT FOR THE EXCLUSIVE PARTICIPATION OF SMALL BUSINESSES AS YOU
ALLEGE, HAS BEEN DONE FOR MAINTENANCE SERVICES ON EQUIPMENT MANUFACTURED
BY OTHER CORPORATIONS.
IN THIS CONNECTION THE CONTRACTING OFFICER REPORTS THAT HE HAD NEVER
BEFORE RECEIVED A RESPONSIBLE OFFER ON THIS REQUIREMENT FROM ANY FIRM
OTHER THAN CARRIER. THUS, IT WAS DECIDED TO CONTINUE ON AN UNRESTRICTED
BASIS UNTIL OFFERS WERE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE
SMALL BUSINESS CONCERNS AT REASONABLE PRICES TO JUSTIFY SETTING THE
PROCUREMENTS ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION.
WHETHER A PARTICULAR PROCUREMENT SHOULD BE SET ASIDE FOR SMALL
BUSINESS CONCERNS IS A MATTER WITHIN THE JURISDICTION OF THE PROCURING
AGENCY AND THE SMALL BUSINESS ADMINISTRATION (SBA). 15 U.S.C. 644.
WITH RESPECT TO TOTAL SET-ASIDES, ASPR 1-706.5(A)(1) PROVIDES AS
FOLLOWS:
"1-706.5 TOTAL SET-ASIDES.
(A)(1) SUBJECT TO THE ORDER OF PROCEDURE ESTABLISHED IN 1-706.1(A),
THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT OR A CLASS OF
PROCUREMENTS, INCLUDING BUT NOT LIMITED TO CONTRACTS FOR MAINTENANCE,
REPAIR, AND CONSTRUCTION, SHALL BE SET ASIDE FOR EXCLUSIVE SMALL
BUSINESS PARTICIPATION (SEE 1-701.1) IF THE CONTRACTING OFFICER
DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT OFFERS WILL BE
OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS
SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. TOTAL SET-ASIDES
SHALL NOT BE MADE UNLESS SUCH A REASONABLE EXPECTATION EXISTS. (BUT SEE
1-706.6 AS TO PARTIAL SET-ASIDES.) ALTHOUGH PAST PROCUREMENT HISTORY OF
THE ITEM OR SIMILAR ITEMS IS ALWAYS IMPORTANT, IT IS NOT THE ONLY FACTOR
WHICH SHOULD BE CONSIDERED IN DETERMINING WHETHER A REASONABLE
EXPECTATION EXISTS."
WE HAVE HELD THAT THE DETERMINATION OF WHETHER THERE IS A REASONABLE
EXPECTATION OF RECEIVING A SUFFICIENT NUMBER OF BIDS OR OFFERS UNDER A
TOTAL SET-ASIDE TO ASSURE REASONABLE PRICES IS WITHIN THE AMBIT OF SOUND
ADMINISTRATIVE DISCRETION AND WILL NOT ORDINARILY BE QUESTIONED BY OUR
OFFICE. 45 COMP. GEN. 228, 230 (1965). IN THE CIRCUMSTANCES, WE ARE
UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER'S ACTION WAS IMPROPER,
NOR ARE WE AWARE OF ANY LEGAL BASIS FOR REQUIRING THE CONTRACTING
OFFICER TO RECONSIDER AFTER RECEIPT OF OFFERS HIS DETERMINATION NOT TO
RESTRICT THE PROCUREMENT TO SMALL BUSINESS CONCERNS.
FOR THE FOREGOING REASONS, YOUR PROTEST IS DENIED.
B-175974, DEC 19, 1972
BID PROTEST - HIGH PRICE - BUYING-IN - BIDDER RESPONSIBILITY -
WITHDRAWAL OF SET ASIDE
DECISION DENYING THE PROTEST OF JOE BELL ENTERPRISES AGAINST AWARD OF
A CONTRACT TO H. L. YOH COMPANY UNDER A RFQ ISSUED BY THE LOS ANGELES
AIR FORCE STATION, CALIF., FOR SECURITY POLICE SERVICES.
ASPR 3-805.1(B) DOES NOT CREATE A MANDATE WHICH WOULD COMPEL A
CONTRACTING OFFICER TO NOTIFY AN OFFEROR THAT HIS BID IS TOO HIGH.
MOREOVER, ASPR 1-311(A) DOES NOT PROVIDE FOR REJECTION OF A BID WHERE
"BUYING IN" IS SUSPECTED, AND THERE IS NO LEGAL BASIS UPON WHICH AN
AWARD MAY BE PRECLUDED OR DISTURBED MERELY BECAUSE THE LOW BIDDER
SUBMITTED AN UNPROFITABLE PRICE. B-169465, JUNE 19, 1970.
SINCE THE RESPONSIBILITY OF AN OFFEROR IS A QUESTION OF FACT
REQUIRING EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION BY THE
CONTRACTING OFFICER, GAO WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF
THE CONTRACTING OFFICER UNLESS THE EXERCISE OF THE DISCRETION
CONSTITUTED AN ABUSE OF AUTHORITY. SEE 45 COMP. GEN. 4, 6 (1965). IF A
CONTRACTOR SUBSEQUENTLY FAILS TO PERFORM ADEQUATELY, THIS CIRCUMSTANCE
DOES NOT VITIATE THE ORIGINAL DETERMINATION OF RESPONSIBILITY.
FURTHERMORE, IF THE CONTRACTING OFFICER CONSIDERS THE PROCUREMENT OF THE
SET-ASIDE FROM SMALL BUSINESS CONCERNS DETRIMENTAL TO THE PUBLIC
INTEREST, HE MAY WITHDRAW HIS SET-ASIDE DETERMINATION.
TO MR. JOE BELL:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1, 1972, AND PRIOR
CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO THE H. L. YOH
COMPANY UNDER REQUEST FOR QUOTATIONS (RFQ) F04693-72-Q-0013, ISSUED BY
THE LOS ANGELES AIR FORCE STATION, CALIFORNIA, FOR SECURITY POLICE
SERVICES.
YOU CONTEND THAT THE RFQ WAS DEFICIENT BECAUSE IT DID NOT INCLUDE A
PROGRESS PAYMENT PROVISION AS REQUIRED BY ARMED SERVICES PROCUREMENT
REGULATION (ASPR) SECTION E-504.1. HOWEVER, ASPR SECTION E-504.1, BY
ITS TERMS, IS APPLICABLE ONLY TO FORMAL ADVERTISING ACCOMPLISHED UNDER
INVITATIONS FOR BIDS. HERE, PROCUREMENT WAS NEGOTIATED UNDER A "REQUEST
FOR QUOTATIONS." IN ANY EVENT, YOU WERE NOT PREJUDICED BY THE ABSENCE OF
A PROGRESS PAYMENT PROVISION IN THE RFQ SINCE YOU ADMIT THAT THE
CONTRACTING OFFICER ADVISED YOU DURING THE APRIL 6, 1972, PREPROPOSAL
CONFERENCE THAT PROGRESS PAYMENTS WERE A NEGOTIABLE ITEM WHICH COULD BE
INCLUDED IN THE FINAL CONTRACT.
NEXT, YOU STATE THE SMALL BUSINESS ADMINISTRATION (SBA) FAILED TO
PROVIDE YOU WITH INFORMATION AND ASSISTANCE REQUIRED BY YOUR FIRM TO
OBTAIN CONTRACT FINANCING. YOU ALLEGE THAT ALTHOUGH YOU FREQUENTLY
VISITED SEVERAL REPRESENTATIVES OF THE SBA TO OBTAIN FINANCING,
BEGINNING IN APRIL 1972, IT WAS NOT UNTIL JUNE 14, 1972, THE DAY BEFORE
THE CONTRACT WAS TO BE AWARDED, THAT YOU LEARNED OF AN SBA PROGRAM THAT
YOU REFER TO AS "A PRE-BID CREDIT LINE FOR A GUARANTEED LOAN TO A
QUALIFIED SMALL BUSINESSMAN TO BID ON U.S. GOVERNMENT CONTRACTS." IT IS
YOUR POSITION THAT HAD YOU KNOWN OF THIS SBA PROGRAM SOONER, YOU COULD
HAVE STRENGTHENED THE FINANCIAL STATUS OF YOUR FIRM TO MAKE IT MORE
COMPETITIVE.
HOWEVER, IT IS NOT APPARENT THAT YOUR FINANCIAL STATUS CONTRIBUTED TO
YOUR FAILURE TO OBTAIN THE AWARD. THE LOWEST OFFER RECEIVED WAS IN THE
AMOUNT OF $2,456,734 AND YOUR BEST AND FINAL QUOTATION IN THE AMOUNT OF
$2,729,813.12 RANKED THIRD IN THE PRICE COMPETITION. FURTHER, YOU HAVE
INDICATED THAT YOU WOULD NOT HAVE BEEN ABLE TO PERFORM THE CONTRACT FOR
THE PRICE QUOTED BY THE LOW OFFEROR. THEREFORE, IT DOES NOT APPEAR THAT
YOU COULD HAVE BEEN THE LOW OFFEROR IN ANY EVENT.
MOREOVER, WE CANNOT FAULT THE CONTRACTING AGENCY FOR PROBLEMS YOU MAY
HAVE ENCOUNTERED IN ATTEMPTING TO OBTAIN FINANCING THROUGH THE AUSPICES
OF THE SBA. HOWEVER, WE ARE FORWARDING A COPY OF YOUR LETTER OF JUNE
15, 1972, TO THE SMALL BUSINESS ADMINISTRATION FOR THEIR INFORMATION AND
APPROPRIATE ACTION.
YOU ALSO STATE THAT DURING THE FINAL NEGOTIATION MEETING, IN WHICH
YOUR LAST AND FINAL OFFER WAS SOLICITED, YOU BELIEVED THAT YOU WERE THE
LOWEST OFFEROR, WHICH FACT CAUSED YOU TO RETAIN YOUR PREVIOUS PRICE.
YOU CONTEND THAT THE CONTRACTING OFFICER SHOULD HAVE INFORMED YOU THAT
YOUR OFFER WAS "TOO HIGH" SO YOU COULD HAVE HAD AN OPPORTUNITY TO REDUCE
YOUR PRICE.
IN THAT REGARD, OUR OFFICE STATED IN B-176223, SEPTEMBER 25, 1972, 52
COMP. GEN. ___.
"WE NOTE THAT ASPR 3-805.1(B) PERMITS ADVISING AN OFFEROR THAT HIS
PRICE IS CONSIDERED TOO HIGH. THERE IS, HOWEVER, NO MANDATE WHICH
COMPELS THE PROCUREMENT ACTIVITY TO OFFER SUCH ADVICE. ***"
YOU ALSO ASSERT THAT THE SUCCESSFUL OFFEROR WAS "BUYING IN." HOWEVER,
THAT DOES NOT PROVIDE A BASIS FOR REJECTION OF THE OFFER. SEE 50 COMP.
GEN. 50 AT PAGE 54 (1970), WHEREIN IT WAS STATED:
"*** ASPR 1-311(A) OFFERS THE FOLLOWING DEFINITION OF 'BUYING IN':
"'"BUYING IN" REFERS TO THE PRACTICE OF ATTEMPTING TO OBTAIN A
CONTRACT AWARD BY KNOWINGLY OFFERING A PRICE OR COST ESTIMATE LESS THAN
ANTICIPATED COSTS WITH THE EXPECTATION OF EITHER (I) INCREASING THE
CONTRACT PRICE OR ESTIMATED COST DURING THE PERIOD OF PERFORMANCE
THROUGH CHANGE ORDERS OR OTHER MEANS, OR (II) RECEIVING FUTURE "FOLLOW
ON" CONTRACTS AT PRICES HIGH ENOUGH TO RECOVER ANY LOSSES ON THE
ORIGINAL "BUY IN" CONTRACT. ***
"AND FURTHER PROVIDES THAT:
"'*** WHERE THERE IS REASON TO BELIEVE THAT "BUYING IN" HAS OCCURRED,
CONTRACTING OFFICERS SHALL ASSURE THAT AMOUNTS THEREBY EXCLUDED IN THE
DEVELOPMENT OF THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE
PRICING OF CHANGE ORDERS OR OF FOLLOW-ON PROCUREMENTS SUBJECT TO COST
ANALYSIS.'
"SINCE THE PERTINENT REGULATION DOES NOT PROVIDE FOR THE REJECTION OF
A BID WHERE 'BUYING IN' IS SUSPECTED, WE HAVE RECOGNIZED IN A NUMBER OF
DECISIONS THAT THERE IS NO LEGAL BASIS UPON WHICH 'AN AWARD MAY BE
PRECLUDED OR DISTURBED MERELY BECAUSE THE LOW BIDDER SUBMITTED AN
UNPROFITABLE PRICE.' B-169465, JUNE 19, 1970, CITING B-150318, MARCH 25,
1963, AND B-149551, AUGUST 16, 1962."
SEE ALSO 50 ID. 788, 790 (1971).
IT IS ALSO YOUR CONTENTION THAT THE SUCCESSFUL OFFEROR WAS
NONRESPONSIBLE AND HAS DEMONSTRATED THIS FACT BY NOT BEING ABLE TO
PERFORM UNTIL SIX DAYS AFTER THE CONTRACT COMMENCEMENT DATE AND THEN
ONLY THROUGH THE USE OF UNCLEARED AND UNQUALIFIED PERSONNEL AND LARGE
NUMBERS OF OFF-DUTY AIRMEN. YOU BELIEVE THAT THE CONTRACTOR SHOULD HAVE
BEEN ADJUDGED NONRESPONSIBLE BY THE CONTRACTING OFFICER PRIOR TO AWARD
AND FAILING THAT SHOULD HAVE BEEN DEFAULTED AFTER AWARD, NEITHER OF
WHICH OCCURRED.
THE CONTRACTING OFFICER'S JUSTIFICATION FOR DETERMINING THE
SUCCESSFUL OFFEROR TO BE RESPONSIBLE PRIOR TO AWARD WAS:
"THE SOURCE SELECTION FILE AND OTHER DATA CLEARLY DEMONSTRATES THAT
THE H. L. YOH COMPANY DID HAVE THE POTENTIAL ABILITY TO PERFORM ON THE
DATE IN WHICH A DETERMINATION WAS MADE TO AWARD THE CONTRACT."
THE CONTRACTING OFFICER FURTHER STATED:
"THE H. L. YOH COMPANY WAS DETERMINED TECHNICALLY QUALIFIED BEFORE
AWARD AND DOES HAVE EXTENSIVE 'GUARD FORCE' EXPERIENCE INCLUDING THE
GREATER LOS ANGELES AREA AND SOUTHERN CALIFORNIA."
WE HAVE HELD CONSISTENTLY THAT RESPONSIBILITY OF AN OFFEROR IS A
QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING OFFICER AND
NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION.
WE HAVE ADOPTED THE RULE IN PRIOR CASES THAT WE WILL NOT SUBSTITUTE OUR
JUDGEMENT FOR THAT OF THE CONTRACTING OFFICER UNLESS THE EVIDENCE IN THE
RECORD SUPPORTS A FINDING THAT THE DISCRETION EXERCISED CONSTITUTED AN
ABUSE OF THAT AUTHORITY. SEE 45 COMP. GEN. 4, 6 (1965), 43 ID. 257
(1963) AND 38 ID. 778, 781 (1959). IN THIS CASE, IT APPEARS THAT THE
CONTRACTING OFFICER HAD A REASONABLE BASIS UPON WHICH TO CONCLUDE THAT
THE H. L. YOH COMPANY WAS A RESPONSIBLE OFFEROR.
FURTHER, WHETHER THE CONTRACTOR SHOULD HAVE BEEN PLACED IN DEFAULT
FOR NOT MEETING THE SCHEDULED COMMENCEMENT DATE OF THE CONTRACT IS A
MATTER FOR CONSIDERATION BY THE CONTRACTING OFFICER IN THE
ADMINISTRATION OF THE CONTRACT. MOREOVER, IF A CONTRACTOR SUBSEQUENTLY
FAILS TO PERFORM DURING THE TERM OF THE CONTRACT, THAT CIRCUMSTANCE
WOULD NOT VITIATE THE ORIGINAL DETERMINATION OF RESPONSIBILITY OR AFFECT
THE VALIDITY OF THE AWARD.
FINALLY, YOU CONTEND THAT IT WAS IMPROPER TO WITHDRAW THE SMALL
BUSINESS SET-ASIDE BECAUSE LARGE WELL-FINANCED COMPANIES PROVIDE UNFAIR
COMPETITION, SINCE THEY CAN BETTER RISK POSSIBLE LOSS ON A LOW OFFER.
WHETHER A PARTICULAR PROCUREMENT SHOULD BE SET ASIDE FOR SMALL BUSINESS
CONCERNS IS A MATTER WITHIN THE JURISDICTION OF THE PROCURING AGENCY AND
SBA. 15 U.S.C. 644. WITH RESPECT TO TOTAL SET-ASIDES, ASPR
1-706.5(A)(1) PROVIDES AS FOLLOWS:
"SUBJECT TO ANY APPLICABLE PREFERENCE FOR LABOR SURPLUS AREA
SET-ASIDES AS PROVIDED IN 1-803(A)(II), THE ENTIRE AMOUNT OF AN
INDIVIDUAL PROCUREMENT OR A CLASS OF PROCUREMENTS, INCLUDING BUT NOT
LIMITED TO CONTRACTS FOR MAINTENANCE, REPAIR, AND CONSTRUCTION, SHALL BE
SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION (SEE 1-701.1) IF
THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION
THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF
RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT
REASONABLE PRICES. ***"
ORIGINALLY, THE RFQ WAS ISSUED AS A 100 PERCENT SET-ASIDE FOR SMALL
BUSINESSES WITH ANNUAL RECEIPTS NOT EXCEEDING $5 MILLION. A SMALL
BUSINESS CONCERN APPEALED THE CONTRACTING OFFICER'S $5 MILLION SIZE
STANDARD TO THE SMALL BUSINESS SIZE APPEALS BOARD WHICH DETERMINED THAT
THE SIZE STANDARD APPLICABLE TO THIS PROCUREMENT SHOULD BE REDUCED TO $1
MILLION IN ANNUAL RECEIPTS. UNDER PROVISIONS OF THE SMALL BUSINESS ACT
OF 1958, 15 U.S.C. 632 AND 637(B)(6), SIZE STANDARDS FIXED BY SBA ARE
CONCLUSIVE AND BINDING ON PROCUREMENT OFFICIALS. 47 COMP. GEN. 462,
467 (1968) AND 46 COMP. GEN. 102, 105 (1966).
THE CONTRACTING OFFICER CONSIDERED THAT THE NEW SIZE STANDARD WOULD
SEVERELY LIMIT THE NUMBER OF FIRMS THAT WOULD BE ABLE TO COMPETE FOR THE
CONTRACT AND DETERMINED IT WOULD BE IN THE BEST INTEREST OF THE
GOVERNMENT FOR COMPETITION TO BE UNRESTRICTED. FOR THIS REASON, THE
CONTRACTING OFFICER WITHDREW THE SET-ASIDE DETERMINATION PURSUANT TO
ASPR 1-706.3(A), WHICH PROVIDES IN PERTINENT PART:
"*** IF, PRIOR TO AWARD OF A CONTRACT INVOLVING AN INDIVIDUAL OR
CLASS SET-ASIDE, THE CONTRACTING OFFICER CONSIDERS THAT PROCUREMENT OF
THE SET-ASIDE FROM A SMALL BUSINESS CONCERN WOULD BE DETRIMENTAL TO THE
PUBLIC INTEREST (E.G., BECAUSE OF UNREASONABLE PRICE), HE MAY WITHDRAW A
SET-ASIDE DETERMINATION."
IN THE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT THE ACTION OF
THE CONTRACTING OFFICER IN WITHDRAWING THE SET-ASIDE WAS IMPROPER.
IN VIEW OF THE FOREGOING, YOUR PROTEST IS DENIED.
B-176046(1), DEC 19, 1972
BID PROTEST - OPTION QUANTITIES - NON-RESPONSIVE BID
DECISION DENYING THE PROTEST OF CONSOLIDATED AIRBORNE SYSTEMS, INC.,
AGAINST AWARD OF A CONTRACT TO THE NEXT LOW BIDDER UNDER AN IFB ISSUED
AT WRIGHT-PATTERSON AFB, OHIO, BY THE DEPARTMENT OF THE AIR FORCE FOR
LIQUID OXYGEN INDICATORS.
ASPR 1-1504(G) MERELY REQUIRES THAT THE OPTION QUANTITY OF SUPPLIES
WHICH MAY BE EXERCISED UNDER A CONTRACT BE STATED IN THE SOLICITATION,
AND DOES NOT REQUIRE A MINIMUM OPTION QUANTITY SHOULD SUCH OPTION BE
EXERCISED. ALSO, AN AGENCY MAY PROVIDE IN A SOLICITATION THAT OPTION
PRICES MAY NOT EXCEED THE BASIC CONTRACT PRICES, AND A BID WHICH DOES
NOT PROVIDE SUCH RIGHT TO THE GOVERNMENT IS NON-RESPONSIVE. B-174575,
FEBRUARY 23, 1972. ALTHOUGH THIS OPTION COULD BE EXERCISED IN A MANNER
THAT IS UNFAIR TO THE CONTRACTOR, THE POSSIBILITY OF THIS OCCURRENCE IS
SO REMOTE THERE IS NO REASON TO RECOMMEND CANCELLATION OF THE IFB.
TO JACOB H. FISHMAN:
WE REFER TO YOUR LETTER DATED AUGUST 21, 1972, AND PRIOR
CORRESPONDENCE, FROM CONSOLIDATED AIRBORNE SYSTEMS, INCORPORATED
(CONSOLIDATED), PROTESTING AGAINST THE OPTION PROVISION CONTAINED IN
INVITATION FOR BIDS F33657-72-B-0895, ISSUED AT WRIGHT-PATTERSON AIR
FORCE BASE, OHIO, BY THE DEPARTMENT OF THE AIR FORCE.
THE INVITATION WAS ISSUED ON MAY 12, 1972, FOR LIQUID OXYGEN
INDICATORS IN THREE PRICE INCREMENTS, RANGING IN QUANTITY FROM A MINIMUM
OF 80 UNITS THROUGH 260 UNITS. AT BID OPENING, ON JUNE 2, 1972,
CONSOLIDATED WAS FOUND TO BE THE APPARENT LOW BIDDER AT A UNIT PRICE OF
$270 FOR INCREMENTS ONE AND TWO AND $265 FOR INCREMENT THREE. HOWEVER,
THE BID WAS CONSIDERED NONRESPONSIVE BECAUSE CONSOLIDATED ENCLOSED A
LETTER WITH ITS BID WHICH READS AS FOLLOWS:
"THE BIDDER SUBMITS ITS BID ON THE UNDERSTANDING THAT IT IS NOT
OFFERING THE GOVERNMENT THE OPTION CLAUSE SET FORTH ON PAGE 23 OF THE
SUBJECT INVITATION. IT IS OUR CONTENTION THAT SINCE THIS IS AN OPTION
WHICH MAY NEVER BE EXERCISED AND WHICH IS NOT TO BE CONSIDERED IN
EVALUATING THE CONTRACTOR'S BID, IT DOES NOT GO TO THE RESPONSIVENESS OF
OUR BID. WE ARE TOTALLY AND COMPLETELY RESPONSIVE TO PARAGRAPH 36 OF
PAGE 19 OF THE IFB."
THE OPTION CLAUSE STATES THAT "THE GOVERNMENT IS HEREBY GRANTED AN
OPTION TO INCREASE THE QUANTITY OF SUPPLIES CALLED FOR HEREIN BY AN
AMOUNT NOT TO EXCEED 100 PERCENT OF THE QUANTITY OF INDICATORS INITIALLY
AWARDED." THE CLAUSE FURTHER STATES THAT "THE UNIT PRICE OR PRICES FOR
THE RESPECTIVE OPTION EXERCISE SHALL BE DETERMINED ON THE BASIS OF THE
COMBINED TOTAL QUANTITY OF THE INITIAL AWARD AND ALL OPTION QUANTITIES
***." FINALLY, THE CLAUSE PROVIDES THAT BIDS ARE TO BE EVALUATED ON THE
BASIS OF THE QUANTITY TO BE INITIALLY AWARDED EXCLUSIVE OF THE OPTION
QUANTITY.
YOU ASSERT THAT THIS OPTION CLAUSE IS CONTRARY TO THE PROVISIONS OF
ASPR 1-1503 AND 1-1504(G) BECAUSE IT IS INDEFINITE AS TO THE NUMBER OF
UNITS WHICH THE GOVERNMENT MAY ORDER AND ITS USE COULD RESULT IN PRICES
UNFAIR TO THE CONTRACTOR.
IN REGARD TO ASPR 1-1504(G), YOU POINT OUT THAT THIS SECTION OF THE
REGULATION STATES THAT OPTION QUANTITIES MUST BE EXPRESSED IN TERMS OF A
(1) PERCENTAGE OF SPECIFIC CONTRACT LINE ITEMS, OR (2) A NUMBER OF
ADDITIONAL UNITS OF SPECIFIC CONTRACT LINE ITEMS OR (3) ADDITIONAL
NUMBERED LINE ITEMS IDENTIFIED AS THE OPTION QUANTITY. YOU CONTEND THAT
THIS OPTION PROVISION FAILS TO SPECIFY ANY DEFINITE QUANTITIES AS
REQUIRED BY SECTION 1504(G).
WE NOTE THAT THE OPTION QUANTITY IN THIS CASE IS EXPRESSED AS A
PERCENTAGE (NOT TO EXCEED 100 PERCENT) OF THE BASIC CONTRACT QUANTITY TO
BE AWARDED. WE DO NOT BELIEVE THIS OPTION PROVISION IS CONTRARY TO ASPR
1-1504(G) MERELY BECAUSE THE GOVERNMENT IS PERMITTED TO EXERCISE THE
OPTION FOR A LESSER QUANTITY. AS AIR FORCE STATES, BY THEIR VERY NATURE
OPTIONS ARE INDEFINITE AS TO BOTH QUANTITY AND CERTAINTY OF USE. ASPR
1-1504(G) MERELY REQUIRES THAT THE OPTION QUANTITY OF SUPPLIES WHICH MAY
BE EXERCISED UNDER A CONTRACT SHALL BE STATED IN THE SOLICITATION
SCHEDULE. THERE IS NO REQUIREMENT IN THE REGULATION TO PROVIDE FOR A
MINIMUM OPTION QUANTITY SHOULD THE GOVERNMENT ELECT TO EXERCISE OPTION
QUANTITIES.
IT IS ALSO YOUR POSITION THAT THE OPTION PRICING SCHEME IS UNFAIR TO
THE CONTRACTOR AND THUS CONTRARY TO ASPR 1-1503(A), WHICH STATES THAT
THE IMPROPER USE OF OPTIONS COULD RESULT IN PRICES WHICH ARE UNFAIR TO
EITHER THE GOVERNMENT OR THE CONTRACTOR. YOU POINT OUT THAT UNDER THIS
SOLICITATION THE GOVERNMENT COULD MAKE AN AWARD FOR 80 UNITS, WITH
DELIVERY OF 40 UNITS WITHIN 150 DAYS AFTER AWARD AND 40 UNITS ONE MONTH
THEREAFTER. IF THE GOVERNMENT THEN CHOSE TO EXERCISE ITS OPTION ON THE
179TH DAY (SINCE IT HAS THE RIGHT TO EXERCISE THE OPTION IN WHOLE OR IN
PART WITHIN 180 DAYS AFTER AWARD), IT COULD ON THAT DAY MERELY ORDER 1
UNIT, FOR FUTURE DELIVERY, WITH THE COST OF THAT UNIT
"DISPROPORTIONATELY IN EXCESS OF THE COST TO SUPPLY ONE UNIT OF THE
ORIGINAL 80 UNITS ***. THIS IS SELF-EVIDENT SINCE ALL OF THE COMPONENTS
AND SUBCOMPONENTS AND MANUFACTURING WOULD HAVE BEEN COMPLETED ON THE
ORIGINAL ORDERED 80 UNITS AND THEREFORE THE ONE OPTIONAL UNIT COULD NOT
BE TAGGED ON TO PRODUCTION OF THE ORIGINAL UNITS."
THE CONTRACTING OFFICER STATES THAT THE CURRENT OPTION PROVISION WAS
DESIGNED TO PROTECT THE GOVERNMENT AGAINST PAYING HIGHER PRICES FOR
OPTION QUANTITIES THAN THOSE PAID ON THE INITIAL AWARD. HE CITES ASPR
1-1503(A), WHICH STATES THAT SUCH A PROVISION MAY BE INSERTED IN AN
OPTION CLAUSE.
WE RECOGNIZED IN B-174575, FEBRUARY 23, 1972, THAT AN AGENCY MAY
ELECT TO PROVIDE IN A SOLICITATION THAT OPTION PRICES MAY NOT EXCEED THE
BASIC CONTRACT PRICES AND THAT A BID WHICH DID NOT PROVIDE SUCH A
REQUIRED OPTION RIGHT TO THE GOVERNMENT WOULD BE NONRESPONSIVE SINCE THE
GOVERNMENT WOULD BE DEPRIVED OF A VALUABLE BENEFIT BY ACCEPTANCE OF THE
BID. ALTHOUGH IT IS REPORTED THAT THE OPTION PROVISION USED IN THE
PRIOR PROCUREMENT OF THIS ITEM PERMITTED SEPARATE PRICING FOR THE OPTION
UNITS, WE BELIEVE THE GOVERNMENT IS JUSTIFIED IN INSISTING FOR THIS
PROCUREMENT THAT THE OPTION PRICES BE LIMITED TO THE SCHEDULE BID
PRICES. THEREFORE, WE MUST REGARD CONSOLIDATE'S BID AS NON-RESPONSIVE
TO THE SOLICITATION.
WE RECOGNIZE THAT THE SITUATION DESCRIBED IN YOUR LETTER COULD OCCUR
UNDER THE CONTRACT. SINCE WE BELIEVE THE POSSIBILITY OF SUCH AN
OCCURRENCE IS REMOTE, WE SEE NO COMPELLING REASON TO RECOMMEND REJECTION
OF ALL BIDS AND CANCELLATION OF THE SOLICITATION. HOWEVER, BY LETTER OF
TODAY, COPY ENCLOSED, WE ARE RECOMMENDING TO THE SECRETARY OF THE AIR
FORCE THAT HE MAY WISH TO CONSIDER AMENDING THE OPTION PROVISION IN
FUTURE PROCUREMENTS OF THIS ITEM TO PERMIT APPROPRIATE RELIEF TO A
CONTRACTOR IN THE EVENT THE SITUATION YOU DESCRIBE SHOULD ARISE.
FOR THE REASONS STATED ABOVE, YOUR PROTEST AGAINST AN AWARD TO THE
NEXT LOW BIDDER IS DENIED.
B-176046(2), DEC 19, 1972
BID PROTEST - OPTION CLAUSE
CONCERNING THE DENIAL OF THE PROTEST OF CONSOLIDATED AIRBORNE
SYSTEMS, INC., UNDER AN IFB ISSUED AT WRIGHT-PATTERSON AFB, OHIO, BY THE
DEPARTMENT OF THE AIR FORCE.
ALTHOUGH THIS PROTEST IS DENIED, CONSIDERATION SHOULD BE GIVEN TO
AMENDING THE OPTION CLAUSE USED IN THIS PROCUREMENT SO AS TO PROTECT A
CONTRACTOR FROM EXERCISE OF THE OPTION FOR A SMALL QUANTITY AFTER THE
ITEMS ORIGINALLY ORDERED HAVE BEEN COMPLETED, THEREBY CAUSING A
DISPROPORTIONATELY HIGH COST TO THE CONTRACTOR.
TO MR. SECRETARY:
WE REFER TO A LETTER DATED JULY 31, 1972, FROM THE CHIEF, CONTRACT
MANAGEMENT DIVISION, HEADQUARTERS, UNITED STATES AIR FORCE, TRANSMITTING
A REPORT IN CONNECTION WITH THE PROTEST OF CONSOLIDATED AIRBORNE
SYSTEMS, INCORPORATED, UNDER INVITATION FOR BIDS F33657-72-B-0895,
ISSUED AT WRIGHT-PATTERSON AIR FORCE BASE, OHIO.
AS INDICATED IN OUR DECISION OF TODAY, COPY ENCLOSED, WE BELIEVE
CONSIDERATION SHOULD BE GIVEN TO AMENDING THE OPTION CLAUSE USED IN THIS
PROCUREMENT SO THAT IN FUTURE PROCUREMENTS OF THIS ITEM THE CONTRACTOR
WILL BE PROTECTED AGAINST THIS TYPE OF SITUATION DESCRIBED IN THE
PROTEST. FOR EXAMPLE, IT MAY BE APPROPRIATE TO PROVIDE THAT AN
EQUITABLE ADJUSTMENT WILL BE MADE WHENEVER A BREAK IN PRODUCTION OCCURS
AS A RESULT OF THE EXERCISE OF THE OPTION BY THE GOVERNMENT.
B-176257, DEC 19, 1972
BID PROTEST - DISCUSSIONS - TECHNICALLY UNACCEPTABLE BID
DECISION DENYING THE PROTEST OF TELETRON DATA CORPORATION AGAINST THE
DETERMINATION THAT ITS PROPOSAL WAS TECHNICALLY UNACCEPTABLE UNDER A RFQ
ISSUED BY THE ROME AIR DEVELOPMENT CENTER.
THE DETERMINATION OF COMPETITIVE RANGE, PARTICULARLY WHERE TECHNICAL
CONSIDERATIONS ARE INVOLVED, WITH REGARD TO THE NECESSITY OF CONDUCTING
DISCUSSIONS WITH AN OFFEROR AS REQUIRED BY ASPR 3-805.1(A) IS PRIMARILY
A MATTER OF ADMINISTRATIVE DISCRETION WHICH WILL NOT BE DISTURBED BY GAO
IN THE ABSENCE OF A CLEAR SHOWING OF ABUSE OF SUCH DISCRETION. SEE 48
COMP. GEN. 314 (1968).
TO MATZKIN & DAY:
WE REFER TO YOUR LETTER OF AUGUST 14, 1972, AND PRIOR CORRESPONDENCE,
ON BEHALF OF TELETRON DATA CORPORATION (TDC), PROTESTING AGAINST THE
DETERMINATION OF THE ROME AIR DEVELOPMENT CENTER (RADC), THAT TDC'S
PROPOSAL, SUBMITTED IN RESPONSE TO REQUEST FOR QUOTATIONS (RFQ) NO.
F30602-72-Q-0344, WAS TECHNICALLY UNACCEPTABLE. YOU CONTEND THAT NO
AWARD SHOULD BE MADE UNDER THE RFQ TO ANOTHER FIRM IN THE ABSENCE OF
NEGOTIATIONS WITH TDC.
THE SUBJECT RFQ WAS ISSUED BY RADC ON MARCH 25, 1972, FOR THE
DEVELOPMENT, TESTING, AND EVALUATION OF AN EXPERIMENTAL MODEL OF A HIGH
GAIN, HF ANTENNA SYSTEM, AND ITS INTEGRATION WITH A TRANSPORTABLE
FACILITY. THE RFQ CALLED FOR THE FABRICATION OF A SCALE MODEL OF THE
ANTENNA, AND THE FABRICATION OF A FULL SCALE HF ANTENNA SYSTEM BASED
UPON THE SCALE MODEL. EVALUATION FACTORS WERE SET FORTH IN SECTION D OF
THE SOLICITATION.
ALTHOUGH FIVE QUOTATIONS WERE RECEIVED BY THE CLOSING DATE OF MAY 12,
1972, ONLY THE PROPOSALS OF TECHNOLOGY FOR COMMUNICATIONS INTERNATIONAL
AND CONTINENTAL ELECTRONICS MANUFACTURING COMPANY WERE DETERMINED TO BE
TECHNICALLY ACCEPTABLE. THE OTHER THREE PROPOSALS, INCLUDING TDC'S,
WERE DETERMINED TO CONTAIN MAJOR DEFICIENCIES AND, CONSEQUENTLY, WERE
NOT CONSIDERED WITHIN THE COMPETITIVE RANGE.
YOU CONTEND THAT TDC'S PROPOSAL WAS THE LOWEST PRICED AND IN FULL
COMPLIANCE WITH THE SPECIFICATIONS. YOU ALSO ASSERT THAT TDC'S PROPOSAL
REPRESENTS "A LOW-COST, HIGH-RELIABILITY ANTENNA APPROACH BASED UPON
DIRECT APPLICATION OF PREVIOUSLY PROVEN ARRAY ANTENNA DESIGNS INTO THE
HF FREQUENCY REGION COUPLED WITH THE USE OF PROVEN HF TRANSMISSION LINE
TECHNIQUES." IN ADDITION, YOU CLAIM THAT RADC WAS PRE-DISPOSED TO A
PARTICULAR TECHNICAL APPROACH, AND THAT THE AIR FORCE SHOULD HAVE
DISCLOSED ITS PREFERENCE.
THE AIR FORCE EVALUATION TEAM FOUND TDC'S PROPOSAL TO BE TECHNICALLY
UNACCEPTABLE. THE TDC PROPOSAL WAS DETERMINED TO INVOLVE HIGH TECHNICAL
RISKS WITH HIGH MAINTENANCE COSTS AND A HIGH PROBABILITY OF COST OVERRUN
DURING THE INITIAL DEVELOPMENT EFFORT. THE HIGH TECHNICAL RISK WAS FELT
TO BE INHERENT IN THE COMPLEX AND COMPLICATED FEED SYSTEM PROPOSED.
THE TECHNICAL EVALUATION REPORT ENUMERATED VARIOUS ASPECTS OF THE TDC
PROPOSAL WHICH LED THE AIR FORCE TO THE ABOVE CONCLUSIONS. YOU HAVE
SUBMITTED A DETAILED DISCUSSION OF EACH AREA OF THE TDC PROPOSAL WHICH
THE AIR FORCE REGARDED AS WEAK. IN REBUTTING THE AIR FORCE'S STATEMENT
THAT TDC'S SERIES FEED SELECTION IS VERY COMPLICATED AND OBVIATES ALL OF
THE ADVANTAGES OF THE SERIES FEED, YOU STATE THAT THE TDC APPROACH
"RETAINS THE INHERENT SIMPLICITY OF SERIES FEEDING BUT OVERCOMES THE
NORMAL FREQUENCY DEPENDENT BEAM POSITION NORMALLY ASSOCIATED WITH SERIES
FEEDS." IT IS THE AIR FORCE'S POSITION THAT TO OPTIMIZE YOUR DESIGN
WOULD INVOLVE TIME CONSUMING EXPERIMENTAL EXERCISES. IN RESPONSE TO THE
AIR FORCE CONTENTION THAT SEVERAL DIFFERENT DIRECTIONAL COUPLERS AND
DELAY EQUALIZERS WILL HAVE TO BE DEVELOPED WHICH REPRESENTS A TECHNICAL
RISK, YOU STATE THAT "THE BACKWARD-WAVE PARALLEL LINE TEM DIRECTIONAL
COUPLER CHOSEN IN THE TDC APPROACH IS A STANDARD, WELL-UNDERSTOOD
COMPONENT. THE DELAY EQUALIZERS REQUIRED ARE NOTHING MORE THAN LENGTHS
OF OPEN WIRE TRANSMISSION LINE WHICH ARE FOLDED TO COMPACT DIMENSIONS.
THERE IS NO DEVELOPMENT RISK INVOLVED IN SUCH A DESIGN, MERELY THE
EXPERIMENTAL DETERMINATION OF THE ELECTRICAL LENGTH-PHYSICAL LENGTH
CORRESPONDENCE, WHICH IS A SIMPLE AND STRAIGHTFORWARD PROCEDURE." THE
AIR FORCE HAS RESPONDED AS FOLLOWS:
"THE BACKWARD-WAVE PARALLEL LINE TEM DIRECTIONAL COUPLER IS WELL
UNDERSTOOD. THE COUPLING IS A FUNCTION OF SPACING OF THE COUPLING LINE
TO THE TRANSMISSION LINE. OBTAINING COUPLINGS OF THREE DB, SIX DBOR TEN
DBWITHIN A TOLERANCE PLUS OR MINUS ONE OR TWO DBCOULD BE ACHIEVED.
OBTAINING COUPLINGS OF 3 DB, 4.8 DB, 6.0 DB, 7.0 DB, 8.5 DB, 9.0 DB, 9.5
DBAND 10.0 DBIS CONSIDERED TO BE AN INVOLVED, HAND-TAILORING MEASUREMENT
PROGRAM. VARYING THE SPACING ON 56 FEET OF OPEN-WIRE LINE FOR THE LOW
BAND ARRAY AND 28 FEET FOR THE HIGH BAND ARRAY TO ACHIEVE THE DEGREE OF
COUPLING PROPOSED IS CONSIDERED A TEDIOUS MEASUREMENT EFFORT WITH A HIGH
TECHNICAL RISK IN SUCCEEDING.
"THE DELAY LINE EQUALIZERS ARE NOTHING MORE THAN LENGTHS OF OPEN WIRE
TRANSMISSION LINE WHICH ARE FOLDED TO COMPACT DIMENSIONS. THIS IS
MERELY A MEASUREMENT EFFORT AS THE PROPOSAL STATES. HOWEVER, THE
COMPACTNESS OF SUCH A LINE WITH 'AVERAGE' LENGTH OF 460 FEET MAY NOT BE
COMPLETELY FREQUENCY INDEPENDENT. FOR EXAMPLE, FREQUENCY INDEPENDENCE
IS A FUNCTION OF THE COMPACTNESS OF MUTUAL COUPLING. THE LONGEST DELAY
LINE IS ON THE ORDER OF 900 FEET LONG. THESE DELAY LINES CAN BE MADE
FREQUENCY INDEPENDENT BUT THE DEGREE OF COMPACTNESS AGAIN IS DETERMINED
BY A TEDIOUS MEASUREMENT EFFORT. THESE TRANSMISSION LINES CANNOT BE
TREATED THE SAME AS COAXIAL LINES OR WAVEGUIDES."
YOU DISAGREE WITH THE AIR FORCE DETERMINATION THAT THE FEED SYSTEM
REQUIRING 48,000 FEET OF FEED LINE ALONG WITH WIRE TYPES OF DIRECTIONAL
COUPLERS AND OTHER COMPONENTS RESULTS IN AN EXTREMELY COMPLEX STRUCTURE.
IN REPLY, THE AIR FORCE EMPHASIZES THAT WHILE THE 48,000 FEET OF LINE
IS NOT PER SE COMPLEX, TOGETHER WITH THE COUPLERS AND DELAY LINES THE
DEGREE OF COMPLEXITY IS GREATER THAN NECESSARY.
FURTHER, THE AIR FORCE STRONGLY DENIES THE CONTENTION THAT RADC WAS
PREDISPOSED TO A PARTICULAR TECHNICAL APPROACH WHICH SHOULD HAVE BEEN
DISCLOSED TO TDC. IN THE ABSENCE OF CONTRARY EVIDENCE, WE MUST CONCLUDE
FROM THE RECORD THAT RADC'S LOW CONFIDENCE IN TDC'S APPROACH RESULTED
NOT FROM ANY PREFERENCE FOR ANOTHER SPECIFIC APPROACH, BUT RATHER FROM
TDC'S FAILURE TO SUBSTANTIATE TO RADC'S SATISFACTION THE EFFECTIVENESS
OF ITS DESIGN.
IN REGARD TO THE STATEMENT IN THE INITIAL ADMINISTRATIVE REPORT
INDICATING THAT NEGOTIATIONS WERE TO BE RESTRICTED TO ONLY ONE OFFEROR,
IT HAS BEEN REPORTED THAT DISCUSSIONS WERE IN FACT HELD WITH BOTH
TECHNOLOGY FOR COMMUNICATIONS (TCI) AND CONTINENTAL ELECTRONICS
MANUFACTURING. AS A RESULT OF THESE DISCUSSIONS, THE CONTRACTING
OFFICER PROPOSES AN AWARD TO TCI.
WITH REGARD TO THE NATURE AND EXTENT OF NEGOTIATIONS, ASPR
3-805.1(A), IN IMPLEMENTATION OF 10 U.S.C. 2304(G), REQUIRES DISCUSSIONS
ONLY WITH OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE,
PRICE AND OTHER FACTORS CONSIDERED. THE TERM "OTHER FACTORS" HAS BEEN
HELD TO INCLUDE THE TECHNICAL ACCEPTABILITY OF PROPOSALS. SEE 46 COMP.
GEN. 606, 610 (1967). WE HAVE RECOGNIZED THAT THE DETERMINATION OF
COMPETITIVE RANGE, PARTICULARLY WITH RESPECT TO TECHNICAL
CONSIDERATIONS, IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION WHICH
WILL NOT BE DISTURBED IN THE ABSENCE OF A CLEAR SHOWING OF ABUSE OF SUCH
DISCRETION. SEE 48 COMP. GEN. 314 (1968).
THE RECORD IN THE INSTANT CASE INDICATES THAT A COMPREHENSIVE
TECHNICAL EVALUATION OF THE BASIC PROPOSALS WAS MADE IN ACCORDANCE WITH
THE CRITERIA SET FORTH IN SECTION D OF THE RFQ. THE TECHNICAL PROPOSALS
WERE EVALUATED BY A TEAM OF NINE EVALUATORS CONSISTING OF SCIENTISTS AND
ENGINEERS. THE FINAL CRITIQUE WRITTEN ON ALL PROPOSALS WAS THE RESULT
OF THE COMBINED JUDGMENT AND EXPERIENCE OF THE FULL EVALUATION TEAM. WE
FIND NOTHING IN THE RECORD WHICH SUGGESTS THAT THIS EVALUATION WAS
IMPROPER, UNFAIR, OR CONDUCTED IN BAD FAITH. ALTHOUGH YOU TAKE
EXCEPTION TO THE DEFICIENCIES IN THE TDC PROPOSAL REFERRED TO IN THE AIR
FORCE REPORT, WE CANNOT SAY THAT THE OVERALL EVALUATION, WHICH INCLUDED
MANY ITEMS, WAS ARBITRARY OR CAPRICIOUS. ON THE CONTRARY, THE SCORING
OF EACH PROPOSAL APPEARS TO HAVE BEEN OBJECTIVE AND IS SUPPORTED BY THE
NARRATIVE PORTION OF THE TECHNICAL REPORT. THEREFORE, WE ARE UNABLE TO
CONCLUDE THAT THE FAILURE TO CONDUCT DISCUSSIONS WITH TDC WAS AN ABUSE
OF DISCRETION.
ACCORDINGLY, THE PROTEST IS DENIED.
B-176323, DEC 19, 1972
BID PROTEST - DESIGN SPECIFICATIONS - DESCRIPTIVE LITERATURE - PRIOR
CONSIDERATION
DECISION REGARDING A PROTEST ON BEHALF OF UNIDYNAMICS/ST. LOUIS,
INC., AGAINST THE AWARD OF A CONTRACT TO ALLIS-CHALMERS CORPORATION
UNDER AN IFB ISSUED BY THE MEMPHIS DISTRICT, U.S. ARMY CORPS OF
ENGINEERS, FOR TWO BOTTOM-HINGED GATES AND OPERATING MACHINERY FOR FLOOD
CONTROL.
THE COMP. GEN. BELIEVES THAT THE AGENCY'S ACTION IN REJECTING
UNIDYNAMICS' BID BECAUSE OF ITS INCLUSION OF A PLATE THICKNESS IS
INCONSISTENT WITH THE ACCEPTANCE OF A BID WHICH INCLUDES AN ESTIMATED
WEIGHT SINCE THE ESTIMATED OVERALL WEIGHT IS DIRECTLY RELATED TO THE
THICKNESS OF THE GATES, AND THEREFORE BOTH SPECIFICATIONS MAY BE SAID TO
REQUIRE DESIGN ACCEPTANCE. IN ADDITION, THE AGENCY CONSIDERED SIMILAR
DESCRIPTIVE LITERATURE IN AN EARLIER INVITATION WITHOUT FINDING IT
OBJECTIONABLE. THEREFORE, THE INVITATION SHOULD BE CANCELLED AND THE
REQUIREMENT RESOLICITED.
TO MR. SECRETARY:
WE REFER TO A LETTER DATED AUGUST 4, 1972, AND SUBSEQUENT
CORRESPONDENCE, FROM THE GENERAL COUNSEL, OFFICE OF THE CHIEF OF
ENGINEERS, TRANSMITTING REPORTS IN CONNECTION WITH THE PROTEST FILED ON
BEHALF OF UNIDYNAMICS/ ST. LOUIS, INCORPORATED (UNIDYNAMICS), AGAINST
THE AWARD OF A CONTRACT TO ALLIS-CHALMERS CORPORATION (ALLIS) UNDER
INVITATION FOR BIDS NO. DACW66-72-B-0128, ISSUED BY THE MEMPHIS
DISTRICT, UNITED STATES ARMY CORPS OF ENGINEERS.
THE INVITATION, ISSUED ON MAY 12, 1972, SOLICITED BIDS FOR DESIGN,
MANUFACTURE AND DELIVERY OF TWO BOTTOM-HINGED GATES AND OPERATING
MACHINERY FOR FLOOD CONTROL. THE INVITATION CONTAINED THE FOLLOWING
REQUIREMENT FOR DESCRIPTIVE LITERATURE:
"4. REQUIREMENT FOR DESCRIPTIVE LITERATURE.
"(A) DESCRIPTIVE LITERATURE AS SPECIFIED IN THIS INVITATION FOR BIDS
MUST BE FURNISHED AS A PART OF THE BID AND MUST BE RECEIVED BEFORE THE
TIME SET FOR OPENING BIDS. THE LITERATURE FURNISHED MUST BE IDENTIFIED
TO SHOW THE ITEM IN THE BID TO WHICH IT PERTAINS. THE DESCRIPTIVE
LITERATURE IS REQUIRED TO ESTABLISH, FOR THE PURPOSES OF BID EVALUATION
AND AWARD, DETAILS OF THE PRODUCTS THE BIDDER PROPOSES TO FURNISH AS
SPECIFIED IN (C) BELOW.
"(B) FAILURE OF DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT
OFFERED CONFORMS TO THE SPECIFICATIONS AND OTHER REQUIREMENTS OF THIS
INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID.
*** BIDS WILL BE EVALUATED STRICTLY ON THE BASIS OF THE INFORMATION
SUBMITTED WITH THE BID. IF BIDDERS SUBMIT STANDARD DRAWINGS AND/OR
STANDARD PUBLISHED DESCRIPTIVE DATA FOR THEIR PRODUCT, ANY MODIFICATION
REQUIRED AND INTENDED BY THEM TO SHOW COMPLIANCE OF THE OFFER WITH THE
REQUIREMENTS OF THE SPECIFICATIONS SHALL BE CLEARLY INDICATED THEREON,
AND ANY INAPPLICABLE DESCRIPTION OR DATA SHALL BE DELETED. ***
"(C) IN ACCORDANCE WITH (A) ABOVE, THE FOLLOWING INFORMATION AND
DESCRIPTIVE DATA SHALL BE FURNISHED:
(1) DRAWINGS AND DESCRIPTIVE DATA, INCLUDING, BUT NOT LIMITED TO A
SECTIONAL VIEW AND AN ELEVATION VIEW.
A. TYPICAL GATE ARRANGEMENT.
B. TYPICAL POWER UNIT AND CONTROL PANEL ARRANGEMENT.
C. GENERAL ARRANGEMENT OF EQUIPMENT IN CONTROL HOUSE THAT IS 10'
WIDE, BY 11' LONG, AND 8' HIGH.
(2) OTHER SPECIFIC DATA. THE FOLLOWING WEIGHTS, DIMENSIONS AND OTHER
DATA SHALL ALSO BE FURNISHED:
A. WEIGHT OF GATES.
B. WEIGHT OF MACHINERY.
C. WEIGHT OF POWER UNIT."
TWO BIDS, ONE FROM UNIDYNAMICS AT $187,394 AND THE OTHER FROM ALLIS
AT $308,269 WERE RECEIVED AND OPENED ON JUNE 17. IN RESPONSE TO THE
ABOVE-CITED REQUIREMENT, UNIDYNAMICS INCLUDED WITH ITS BID TWO DRAWINGS
TOGETHER WITH A COVERING SHEET. THIS SHEET, WHICH IS PREFACED BY AN
OFFER TO COMPLY WITH THE SPECIFICATIONS, INCLUDES THE FOLLOWING
STATEMENTS WHICH PERTAIN TO THIS PROTEST: "THE BASIC GATE STRUCTURE
WILL BE 1/2" PLATE ON THE UPSTREAM FACE AND 3/8" PLATE ON THE DOWNSTREAM
FACE. THE HYDRAULIC CYLINDER WILL BE 15" BASE WITH APPROXIMATELY 15 FT
STROKE" AND "THE HYDRAULIC POWER SUPPLY WILL CONSIST OF TWO 5 HP DESIGN
B MOTORS, DRIVING TWO VARIABLE DISPLACEMENT PRESSURE COMPENSATED PUMPS
DEVELOPING 1,000 PSI WORKING PRESSURE."
THE AGENCY HAS CONCLUDED THAT THESE STATEMENTS, WHICH IT CATEGORIZES
AS UNSOLICITED, QUALIFY THE UNIDYNAMICS' BID. ACCORDINGLY, IT HAS
DETERMINED THAT THIS BID IS NONRESPONSIVE AND INELIGIBLE FOR AWARD.
THIS DETERMINATION IS BASED PRIMARILY ON THE AGENCY'S ARGUMENT THAT
UNIDYNAMICS' SUBMISSION OF A SPECIFIC PLATE THICKNESS WOULD PREMATURELY
BIND THE GOVERNMENT TO ACCEPT THE UNIDYNAMICS' DESIGN.
THE SPECIFICATION WHICH DEALS WITH THE THICKNESS OF THE PLATING TO BE
UTILIZED IN THE GATE STRUCTURE STATES AS FOLLOWS:
"IN NO EVENT SHALL ANY MATERIAL HAVING A THICKNESS LESS THAN 3/8-INCH
BE USED FOR ANY MEMBER CARRYING LOAD OR SUBJECT TO CONTACT WITH WATER.
THE REQUIRED THICKNESS OF MEMBERS SHALL BE DETERMINED FROM THE LOADS
IMPOSED."
THE SPECIFICATIONS FURTHER PROVIDE THAT -
"THE GATES SHALL BE DESIGNED TO SAFELY RESIST ALL LOADS IMPOSED UPON
THEM BY BOTH STATIC AND DYNAMIC FORCES APPLIED IN ANY POSITION BETWEEN
OPENED AND CLOSED. THE POSITION OF THE GATE RESULTING IN THE MAXIMUM
LOADING AND STRESSES SHALL BE DETERMINED AND ANALYZED, AND COMPUTATIONS
FURNISHED IN ACCORDANCE WITH 1-2.3 OF THESE SPECIFICATIONS."
PARAGRAPH 1-2.3 PROVIDES THAT THESE COMPUTATIONS MUST BE SUBMITTED
FOR THE CONTRACTING OFFICER'S APPROVAL WITHIN 90 DAYS AFTER AWARD. WE
AGREE WITH THE AGENCY'S POSITION THAT UNDER THESE PROVISIONS THE MINIMUM
THICKNESS FOR LOAD-BEARING OR WATER CONTACTING GATE PARTS IS SUBJECT TO
THE FURTHER REQUIREMENT THAT THE ACTUAL THICKNESS MUST BE DETERMINED BY
THE LOAD CALCULATIONS TO BE SUBMITTED FOR GOVERNMENT APPROVAL BY THE
CONTRACTOR AFTER AWARD.
PARAGRAPH TWO OF THE DESCRIPTIVE LITERATURE CLAUSE REQUIRES THE
SUBMISSION OF SPECIFIC WEIGHTS FOR THE GATES, MACHINERY AND POWER UNIT.
WE ARE INFORMED THAT ONLY APPROXIMATE WEIGHTS WERE REQUIRED AND THAT THE
WORD "APPROXIMATE" WAS INADVERTENTLY OMITTED FROM THE CLAUSE. THIS IS
SUBSTANTIATED BY THE FACT THAT BOTH BIDDERS SUBMITTED AND THE AGENCY
ACCEPTED APPROXIMATE WEIGHTS. WE ALSO NOTE THAT THE DESCRIPTIVE
LITERATURE CLAUSE IN AN EARLIER INVITATION FOR SUBSTANTIALLY THE SAME
EQUIPMENT CALLED FOR APPROXIMATE WEIGHTS.
IN ANY EVENT, THE BIDS SET FORTH APPROXIMATE WEIGHT FOR THE GATES.
IT SEEMS TO US THAT THE WEIGHT OF THE GATES IS DIRECTLY RELATED TO THE
THICKNESS OF THE PLATES USED IN THEIR CONSTRUCTION. IF THE SUBMISSION
OF THE PLATE THICKNESS CAN BE SAID TO BIND THE GOVERNMENT TO A
PARTICULAR DESIGN, THEN THE SUBMISSION OF ESTIMATED OVERALL WEIGHT,
WHICH IS DEPENDENT ON THE THICKNESS WOULD ALSO DICTATE A DESIGN.
IT APPEARS THAT THE AGENCY'S ACTION IN REJECTING UNIDYNAMICS' BID
BECAUSE OF THE INCLUSION OF THE PLATE THICKNESS IS INCONSISTENT WITH THE
ACCEPTANCE OF A BID WHICH INCLUDES AN ESTIMATED WEIGHT SINCE BOTH MAY BE
SAID TO REQUIRE DESIGN ACCEPTANCE. THE SAME MAY BE SAID ALSO OF THE
AGENCY'S POSITION IN REGARD TO UNIDYNAMICS' INCLUSION OF SPECIFIC MOTOR
AND HYDRAULIC CYLINDER SIZES, SINCE THE BIDDER WAS REQUIRED TO FURNISH
WEIGHTS ON THESE COMPONENTS AS WELL.
IN ADDITION, WE NOTE THAT AN EARLIER INVITATION FOR VIRTUALLY THE
SAME EQUIPMENT AND CONTAINING A SIMILAR DESCRIPTIVE LITERATURE CLAUSE
WAS CANCELLED DUE TO "INADEQUATE SPECIFICATIONS". THIS CANCELLATION
FOLLOWED A PROTEST FILED WITH THE AGENCY BY ALLIS, DIRECTED, IN PART, TO
THE RESPONSIVENESS OF THE UNIDYNAMICS' BID. DURING THE CONSIDERATION OF
THIS PROTEST THE AGENCY DID NOT INDICATE THAT UNIDYNAMICS' DESCRIPTIVE
LITERATURE, WHICH WAS THE SAME AS THAT SUBMITTED UNDER THE SUBJECT
INVITATION WOULD RENDER THE BID NONRESPONSIVE. IT SEEMS TO US THAT THE
AGENCY SHOULD HAVE DETECTED WHAT IT REGARDED AS OBJECTIONABLE IN THE
UNIDYNAMICS' LITERATURE AND EITHER CLARIFIED THE INVITATION OR ADVISED
THE BIDDER OF THE MATTER PRIOR TO THE SECOND BID SUBMISSION.
ACCORDINGLY, WE BELIEVE THAT THE INCLUSION OF THIS DESCRIPTIVE
LITERATURE CLAUSE AND THE PREJUDICIAL EFFECT IT HAD ON THE LOW BIDDER
REQUIRES THAT THE INVITATION BE CANCELLED AND THE REQUIREMENT
RESOLICITED.
B-176333, DEC 19, 1972
BID PROTEST - OUT OF BUSINESS PROTESTANT
DENIAL OF PROTEST ON BEHALF OF IMPERIAL MAINTENANCE SERVICE, AGAINST
THE REJECTION OF THE BID SUBMITTED UNDER AN IFB ISSUED BY THE NAVAL
FACILITIES ENGINEERING COMMAND.
SINCE IMPERIAL APPARENTLY IS NO LONGER IN BUSINESS, AND SINCE A BID
WAS RECEIVED FROM A RESPONSIVE, RESPONSIBLE BIDDER TO WHOM AWARD HAS
BEEN MADE, THE AWARD NEED NOT BE DISTURBED.
TO MR. PASCUAL DE LEON:
REFERENCE IS MADE TO YOUR LETTER OF JUNE 22, 1972, ON BEHALF OF
IMPERIAL MAINTENANCE SERVICE, PROTESTING AGAINST THE REJECTION OF THE
BID YOU SUBMITTED UNDER INVITATION FOR BIDS N62467-72-B-1730, ISSUED BY
THE NAVAL FACILITIES ENGINEERING COMMAND.
INASMUCH AS THE BID WAS NOT ACCOMPANIED BY A PROPER BID BOND AS
REQUIRED BY THE INVITATION, WE ARE SATISFIED THAT THE BID WAS PROPERLY
REJECTED. HOWEVER, AN EXTENSION OF THE BID OPENING DATE WAS REQUESTED
BY YOU PRIOR TO THE OPENING OF BIDS. ALSO, YOU HAVE DEMONSTRATED THAT
ADEQUATE TIME WAS NOT AFFORDED YOU TO OBTAIN A BID BOND WHICH WAS
DIFFICULT BECAUSE OF YOUR STATUS AS A MINORITY SMALL BUSINESS CONTRACTOR
AND THE NECESSITY TO OBTAIN A GUARANTEE ON THE BOND FROM THE SMALL
BUSINESS ADMINISTRATION.
SINCE WE HAVE BEEN ADVISED THAT IMPERIAL MAINTENANCE SERVICE
APPARENTLY IS NO LONGER IN BUSINESS, AND SINCE A BID WAS RECEIVED FROM A
RESPONSIVE, RESPONSIBLE BIDDER TO WHOM AWARD HAS BEEN MADE, WE ARE
ADVISING THE SECRETARY OF THE NAVY THAT THE AWARD NEED NOT BE DISTURBED.
B-176552, DEC 19, 1972
BID PROTEST - MINIMUM COMPLETION REQUIREMENTS - SPECIFIC DESIGNATION IN
BID
DECISION DENYING THE PROTEST OF HUNDREDS CORPORATION AGAINST ANY
AWARD TO ALRAE CONSTRUCTION CORPORATION, INC., UNDER AN IFB ISSUED BY
PUBLIC BUILDING SERVICE, REGION 1, GSA, FOR ALTERATIONS TO THE U.S.
COURTHOUSE, PORTLAND, ME.
WHERE IT IS CLEAR BY THE TERMS OF THE IFB THAT THE SUCCESSFUL BIDDER
WOULD BE OBLIGATED TO FURNISH NOT LESS THAN THE MINIMUM COMPLETION
REQUIREMENTS, AWARD TO A BIDDER WHO MAKES NO SPECIFIC DESIGNATION ON HIS
BID AS TO THESE REQUIREMENTS IS PROPER. B-174347, NOVEMBER 17, 1971.
TO HUNDREDS CORPORATION:
WE REFER TO YOUR LETTER DATED JULY 17, 1972, PROTESTING AGAINST ANY
AWARD TO ALRAE CONSTRUCTION CORPORATION, INCORPORATED, UNDER THE
INVITATION FOR BIDS FOR PROJECT NUMBER 18034, ISSUED BY THE PUBLIC
BUILDING SERVICE, REGION 1, GENERAL SERVICES ADMINISTRATION.
THE IFB WAS ISSUED ON MAY 15, 1972, FOR ALTERATIONS TO THE UNITED
STATES COURTHOUSE IN PORTLAND, MAINE. THE IFB INCLUDED THE FOLLOWING
SPECIAL CONDITIONS:
"7.1 TIME FOR COMPLETION SHALL BE IN ACCORDANCE WITH BID AS ACCEPTED.
"9.1 LUMP SUM BIDS ARE REQUIRED AS FOLLOWS:
"BID NO. 1 FOR COMPLETION OF CONTRACT IN (260) TWO HUNDRED SIXTY
CALENDAR DAYS FROM DATE OF RECEIPT OF NOTICE TO PROCEED.
"BID NO. 2 FOR COMPLETION OF CONTRACT IN (230) TWO HUNDRED AND THIRTY
CALENDAR DAYS FROM DATE OF RECEIPT OF NOTICE TO PROCEED."
NOTWITHSTANDING THE QUOTED PROVISIONS THE BID FORM, SF21, PROVIDED
ONLY A SINGLE BLANK FOR INSERTION BY THE BIDDER OF HIS BID PRICE.
HOWEVER, THE SF21 ALSO INCLUDED THE FOLLOWING PROVISION:
"THE UNDERSIGNED AGREES, IF AWARDED THE CONTRACT, TO COMMENCE THE
WORK AS SOON AS PRACTICABLE AFTER THE DATE OF RECEIPT OF NOTICE TO
PROCEED, AND TO COMPLETE THE WORK WITHIN THE NUMBER OF CALENDAR DAYS
AFTER THE DATE OF RECEIPT OF NOTICE TO PROCEED AS STIPULATED IN THE
SPECIAL CONDITIONS."
SIX BIDS WERE RECEIVED BY THE BID OPENING DATE OF JUNE 14, 1972.
FOUR OF THE SIX BIDDERS SUBMITTED SEPARATE PRICES FOR EACH OF THE TWO
COMPLETION PERIODS. IN ONE CASE, THE BIDDER OFFERED THE SAME PRICE FOR
EITHER COMPLETION PERIOD; IN THE OTHER CASES THE PRICE FOR THE FASTER
PERFORMANCE WAS SLIGHTLY HIGHER. ALRAE AND ONE OTHER BIDDER INSERTED
ONLY A SINGLE PRICE ON THE BID FORM.
ALRAE'S BID WAS LOW AT $679,700. THE NEXT LOW BID, WHICH INCLUDED
PRICES FOR BOTH PERIODS, WAS FROM HUNDREDS CORPORATION WHICH OFFERED
PERFORMANCE WITHIN THE SHORTER PERIOD FOR $724,000 AND WITHIN THE LONGER
PERIOD FOR $720,000.
BY LETTER OF JUNE 19, 1972, TO THE GENERAL SERVICES ADMINISTRATION,
ALRAE EXPLAINED ITS SINGLE BID AS FOLLOWS:
"AS WE STATED ON THE TELEPHONE WE FILLED IN THE ONLY BLANK ON THE BID
FORM WHICH WAS AVAILABLE FOR OUR OPINION IS THAT TO DO OTHERWISE WOULD
DISQUALIFY OUR BID AND/OR OUR BID MIGHT NOT BE CONSIDERED FOR WE ARE
AWARE OF STANDARD FORM 22.
"SINCE THERE IS ONLY ONE BLANK WE TAKE THIS TO MEAN OUR ONE BID IS
THE SAME FOR ALL BASE BIDS AND TIME FOR COMPLETION IS IN ACCORDANCE WITH
WHAT IS TO BE STATED IN NOTICE TO PROCEED AS PROVIDED ON BID FORM AND IN
SPECIAL CONDITIONS.
"RECENTLY WE DID THE JOB IN PROVIDENCE AND THERE WERE TWO BLANKS ON
THAT FORM."
A SECOND LETTER FROM ALRAE, DATED JUNE 23, 1972, REITERATED THE
CORPORATION'S INTENTION TO MAKE ONLY ONE BID WHICH IT FELT WOULD BIND
THE CORPORATION TO COMPLETE THE CONTRACT IN 230 DAYS FROM THE DATE OF
THE NOTICE TO PROCEED.
BY LETTER OF JUNE 29, 1972, YOU ALLEGED THAT ALRAE'S BID WAS
NONRESPONSIVE. A LETTER FROM THE PROCURING ACTIVITY DATED JULY 10,
1972, INFORMED HUNDREDS THAT THE AGENCY INTENDED TO ACCEPT ALRAE'S BID
OF $679,700. ON JULY 17, 1972, HUNDREDS PROTESTED TO OUR OFFICE THE
PROPOSED AWARD TO ALRAE. YOU BASED YOUR PROTEST ON THE FACT THAT THE
"LOW BID FAILED TO COMPLY WITH A WELL DEFINED REQUIREMENT OF THE
SPECIFICATIONS WHEREBY TWO PRICES WERE TO APPEAR IN THE BID SCHEDULE."
WE HAVE SUBSEQUENTLY BEEN ADVISED BY GSA THAT IN ORDER TO AVOID UNDUE
DELAY IN THE AWARDING OF THE CONTRACT AND IN ACCORDANCE WITH FPR
1-2.407-8(B)(4)(II), IT WAS PROCEEDING WITH AN IMMEDIATE AWARD TO ALRAE
IN THE AMOUNT OF $679,700, WITH A COMPLETION TIME OF 260 CALENDAR DAYS.
WE FIND THAT THE AWARD IS PROPER, SINCE WE THINK IT IS CLEAR FROM THE
TERMS OF THE IFB THAT THE SUCCESSFUL BIDDER WOULD BE OBLIGATED TO
FURNISH NOT LESS THAN THE MINIMUM COMPLETION REQUIREMENT WITH OR WITHOUT
A SPECIFIC DESIGNATION IN HIS BID. B-174347, NOVEMBER 17, 1971;
B-175243, JUNE 16, 1972.
ACCORDINGLY, WE FIND NO LEGAL BASIS FOR OBJECTING TO THE PROCURING
ACTIVITY'S AWARD OF A CONTRACT TO ALRAE ON THE BASIS OF COMPLETION
WITHIN 260 DAYS OF NOTICE TO PROCEED. THEREFORE, YOUR PROTEST IS
DENIED.
B-177074, DEC 19, 1972
BID PROTEST - NON-RESPONSIVENESS - MATHEMATICALLY DETERMINABLE UNIT
PRICE
DECISION DENYING THE PROTEST OF INDUSTRIAL MAINTENANCE SERVICES,
INC., AGAINST AWARD OF A CONTRACT TO BAMA JANITORIAL SERVICES UNDER AN
IFB ISSUED AT MAXWELL AFB, ALA., FOR JANITORIAL SERVICES.
EVEN THOUGH THE IFB CALLED FOR SUBMISSION OF A UNIT PRICE PER SQUARE
FOOT, BAMA'S SUBMISSION OF A UNIT PRICE PER MONTH DOES NOT REQUIRE
REJECTION OF ITS BID BECAUSE THE UNIT PRICE PER SQUARE FOOT CAN BE
MATHEMATICALLY DETERMINED FROM ITS BID. SEE B-166784, JUNE 16, 1969.
TO INDUSTRIAL MAINTENANCE SERVICES, INCORPORATED:
WE REFER TO YOUR TELEFAX DATED SEPTEMBER 21, 1972, PROTESTING AGAINST
THE AWARD OF A CONTRACT TO BAMA JANITORIAL SERVICES (BAMA) UNDER IFB
F01600-73-B-0019, ISSUED AT MAXWELL AIR FORCE BASE, ALABAMA.
THE INVITATION, ISSUED ON AUGUST 24, 1972, SOLICITED BIDS FOR
JANITORIAL SERVICES TO BE PERFORMED AT MAXWELL AND GUNTER AIR FORCE
BASES. SEVEN BIDS WERE RECEIVED AND OPENED ON THE SEPTEMBER 15 OPENING
DATE, AND THE AGENCY DETERMINED THAT BAMA SUBMITTED THE LOWEST TOTAL
PRICE AT $275,413. YOUR FIRM'S BID WAS CONSIDERED TO BE SECOND LOW AT
$292,252. YOU PROTESTED THIS DETERMINATION BASED ON THE CONTENTION THAT
BAMA'S BID WAS EITHER IMPROPERLY EVALUATED OR NONRESPONSIVE. ON
SEPTEMBER 29, 1972, THE CONTRACT WAS AWARDED TO BAMA NOTWITHSTANDING THE
PENDING PROTEST.
THE INVITATION AT SECTION D ENTITLED "EVALUATION AND AWARD FACTORS"
PROVIDES AS FOLLOWS:
"D-1 EVALUATION: FOR BID EVALUATION, BID ITEMS 1 THROUGH 13 SHALL BE
COMPUTED AS FOLLOWS:
ESTIMATED MONTHS (WHERE APPLICABLE) X ESTIMATED MONTHLY QUANTITY X
UNIT PRICE = ESTIMATED ANNUAL AMOUNT
BID PRICES ON ITEM NOS. 14 THROUGH 17 SHALL NOT BE CONSIDERED IN THE
EVALUATION FOR DETERMINING THE LOW OFFEROR.
BIDDERS ARE CAUTIONED TO INSURE THAT ALL EXTENSIONS AND TOTALS ARE
CORRECTLY COMPUTED
D-2 AWARD: AWARD SHALL BE MADE IN THE AGGREGATE TO THE RESPONSIVE
RESPONSIBLE OFFEROR THAT OFFERS THE LOWEST BID FOR THE TOTAL ESTIMATED
QUANTITIES OF ITEMS 1 THROUGH 13."
THE BID SCHEDULE PROVIDED FOR THE INSERTION OF A UNIT PRICE AND AN
ESTIMATED ANNUAL AMOUNT FOR EACH OF 13 ITEMS AND FOR A TOTAL PRICE. THE
SCHEDULE WAS ARRANGED IN THE FOLLOWING MANNER.
ESTIMATED SF ESTIMATED
EST. MONTHLY MO ANNUAL
MOS. QUANTITY UNIT UNIT PRICE AMOUNT
THE ESTIMATED NUMBER OF MONTHS AND MONTHLY QUANTITIES WERE SUPPLIED
BY THE AGENCY. THE "SF MO UNIT" NOTATION APPARENTLY REFERS TO SQUARE
FEET PER MONTH.
BAMA INSERTED A MONTHLY UNIT PRICE OF $11,726.99 IN THE "UNIT PRICE"
COLUMN AND A PRICE OF $140,723.88 IN THE "ESTIMATED ANNUAL AMOUNT"
COLUMN FOR THE FIRST ITEM. A SIMILAR PATTERN WAS FOLLOWED BY BAMA ON
ALL THE OTHER ITEMS LISTED IN THE BID SCHEDULE. YOU ASSERT THAT WHEN
THE ABOVE-CITED INVITATION EVALUATION FORMULA IS APPLIED TO THIS UNIT
PRICE BAMA'S TOTAL PRICE FOR THIS ITEM ALONE MUST BE EVALUATED AS
FOLLOWS: 12 MONTHS X 558,428 X $11,726.99. ACCORDINGLY, YOU CONCLUDE
THAT BAMA CANNOT BE THE LOW BIDDER. YOU BASE THIS CONCLUSION ON THE
PREMISE THAT SINCE THE INVITATION CLEARLY REQUIRES THAT THE UNIT PRICE
MUST BE SUBMITTED ON A PER SQUARE FOOT BASIS THEN BAMA'S PRICE OF
$11,726.99 MUST BE CONSIDERED FOR EVALUATION AS A PRICE PER SQUARE FOOT
FOR EACH ITEM.
YOU ALSO ASSERT THAT IF BAMA'S UNIT PRICE IS SUBMITTED ON OTHER THAN
A PER SQUARE FOOT BASIS THEN ITS BID MUST BE CONSIDERED NONRESPONSIVE.
IN SUPPORT OF THIS POSITION YOU CITE PARAGRAPH J-1 OF THE SPECIAL
PROVISIONS WHICH STATES IN PART "*** BIDDERS SHOULD ENSURE THAT THE UNIT
PRICE PER SF/MONTH IS INDEPENDENTLY PRICED FOR EACH CATAGORY OF WORK
***." THIS PROVISION IS INCLUDED TO ENABLE PRORATING OF THE COST IF THE
GOVERNMENT SHOULD ELECT EITHER TO INCREASE OR DECREASE THE WORK
REQUIREMENTS. IT IS YOUR VIEW THAT THE LACK OF A PRICE PER SQUARE FOOT
WOULD PERMIT BAMA TO ALTER ITS PRICE IN THE EVENT OF A CHANGE.
IT IS THE CONTRACTING OFFICER'S OPINION THAT WHEN THE EVALUATION
FORMULA IS READ IN CONJUNCTION WITH THE BIDDING SCHEDULE IT IS CLEAR
THAT BIDDERS ARE GIVEN THE OPTION TO SUBMIT A UNIT PRICE EITHER ON A
SQUARE FOOT OR ON A MONTHLY BASIS. ALTHOUGH WE READ THE INVITATION AS
CALLING FOR THE SUBMISSION OF A UNIT PRICE PER SQUARE FOOT, WE DO NOT
CONCLUDE THAT BAMA'S SUBMISSION OF A UNIT PRICE PER MONTH REQUIRES THE
REJECTION OF ITS BID. THE BID SCHEDULE INCLUDES BAMA'S TOTAL ESTIMATED
PER YEAR PRICE ON EACH ITEM. FOR EXAMPLE, ON THE FIRST ITEM IT IS CLEAR
THAT BAMA'S PRICE OF $11,726.99 REPRESENTS THE MONTHLY PRICE BASED ON AN
ESTIMATED QUANTITY OF 558,428 SQUARE FEET, AND THAT THE PER SQUARE FOOT
PRICE CAN BE SIMPLY OBTAINED BY DIVIDING THE MONTHLY PRICE ($11,726.99)
BY THE ESTIMATED QUANTITY (558,428 SQUARE FEET). IN THIS REGARD, THE
CONTRACTING OFFICER NOTES THAT BAMA'S BID BOND IS IN THE AMOUNT OF 20
PERCENT OF $275,413.85, WHICH IS THE TOTAL PRICE SPECIFIED IN THE BID
FOR ITEMS 1 THROUGH 13. AS YOU KNOW, BIDDERS WERE REQUIRED TO FURNISH A
20 PERCENT BID BOND IN THIS CASE. THUS BAMA'S PER SQUARE FOOT PRICE IS
MATHEMATICALLY OBTAINABLE FOR EACH CATEGORY OF WORK AS REQUIRED.
ACCORDINGLY WE CONCLUDE THAT THE AWARD WAS PROPERLY MADE TO BAMA. SEE
B-166784, JUNE 16, 1969; AFFIRMED JULY 18, 1969.
IN VIEW OF THE FOREGOING YOUR PROTEST MUST BE DENIED.
B-177147, DEC 19, 1972
CIVILIAN PERSONNEL - UNION PENSION PLAN - GOVERNMENT PARTICIPATION
CONCERNING THE APPLICABILITY OF 44 U.S.C. 305 TO THE PARTICIPATION OF
THE GOVERNMENT PRINTING OFFICE (GPO) IN THE INTERNATIONAL TYPOGRAPHICAL
UNION NEGOTIATED PENSION PLAN FOR THE BENEFIT OF CRAFT EMPLOYEES IN THE
COMPOSING DIVISION OF GPO.
CONGRESS IN PRESCRIBING THE COVERAGE OF CIVIL SERVICE RETIREMENT IN 5
U.S.C. 8331 INCLUDED EMPLOYEES OF GPO WHOSE COMPENSATION IS FIXED UNDER
44 U.S.C. 305. THEREFORE, 44 U.S.C. 305 WOULD NOT EXTEND TO PROVIDING A
SIMILAR BENEFIT UNDER THE I.T.U. NEGOTIATED PENSION PLAN SINCE SUCH A
BENEFIT WOULD BE INCONSISTENT WITH THE COVERAGE PROVIDED UNDER THE CIVIL
SERVICE RETIREMENT PROGRAM.
TO MR. H. J. HUMPHREY:
WE REFER TO YOUR LETTER OF SEPTEMBER 28, 1972, CONCERNING
PARTICIPATION BY THE GOVERNMENT PRINTING OFFICE (GPO) IN THE
INTERNATIONAL TYPOGRAPHICAL UNION (I.T.U.) NEGOTIATED PENSION PLAN FOR
THE BENEFIT OF CRAFT EMPLOYEES IN THE COMPOSING DIVISION OF GPO. THE
I.T.U., WHICH IS RECOGNIZED AS THE EXCLUSIVE REPRESENTATIVE OF THE
EMPLOYEES CONCERNED, SPONSORS THE PENSION PLAN IN QUESTION FOR UNION
MEMBERS WHO WORK FOR PARTICIPATING EMPLOYERS.
THE I.T.U. NEGOTIATED PENSION PLAN PROVIDES THAT EMPLOYERS WHO HAVE
AGREED TO PARTICIPATE WILL MAKE CONTRIBUTIONS TO THE PLAN IN AMOUNTS
PROVIDED IN COLLECTIVE BARGAINING AGREEMENTS AND THAT THE PLAN WILL BE
ADMINISTERED BY A GROUP OF TRUSTEES REPRESENTING BOTH THE UNION AND THE
EMPLOYERS.
YOU ASK THE FOLLOWING QUESTIONS WITH RESPECT TO GPO PARTICIPATION IN
THE PENSION PLAN:
"1. COULD SUCH CONTRIBUTIONS TO A NEGOTIATED PLAN PROPERLY BE
CONSIDERED TO BE 'RATES OF WAGES' WITHIN THE MEANING OF 44 U.S.C. 305,
WHICH PROVIDES IN PERTINENT PART, THAT 'THE RATE OF WAGES, INCLUDING
COMPENSATION FOR NIGHT AND OVERTIME WORK FOR MORE THAN 10 EMPLOYEES OF
THE SAME OCCUPATION SHALL BE DETERMINED BY A CONFERENCE BETWEEN THE
PUBLIC PRINTER AND A COMMITTEE SELECTED BY THE TRADES AFFECTED'?
"2. IF THE REPLY TO NO. 1 IS IN THE NEGATIVE, ARE THE PROVISIONS OF
44 U.S.C. 305 BROAD ENOUGH TO INCLUDE PAYMENTS WHICH ARE NOT CLASSIFIED
AS 'RATE OF WAGES' IN THE ABSENCE OF SPECIFIC LEGISLATION SUCH AS THE
RETIREMENT ACT, ETC.?
"3. IF THE REPLY TO NO. 1 OR NO. 2 IS IN THE AFFIRMATIVE COULD THE
CONTRIBUTIONS MADE UNDER THIS PLAN BE EXCLUDED IN DETERMINING BASE PAY
FOR PURPOSES OF OVERTIME, HOLIDAY PAY, SUNDAY RATES, PREMIUM PAY, LUMP
SUM ANNUAL LEAVE PAYMENTS, ETC.?"
WE HAVE RECOGNIZED THE BROAD PROVISIONS OF 44 U.S.C. 305 FOR OTHER
PURPOSES. SEE 36 COMP. GEN. 163 (1956). HOWEVER, WE NOTE THAT THE
CONGRESS IN PRESCRIBING THE COVERAGE OF CIVIL SERVICE RETIREMENT IN 5
U.S.C. 8331 INCLUDED EMPLOYEES OF GPO WHOSE COMPENSATION IS FIXED UNDER
44 U.S.C. 305. BY REASON THEREOF, OUR VIEW IS THAT 44 U.S.C. 305
WOULD NOT EXTEND TO PROVIDING A SIMILAR BENEFIT UNDER THE I.T.U.
NEGOTIATED PENSION PLAN. SUCH A BENEFIT WOULD BE INCONSISTENT WITH THE
RETIREMENT COVERAGE PROVIDED BY CONGRESS UNDER THE CIVIL SERVICE
RETIREMENT PROGRAM.
ACCORDINGLY, YOUR QUESTIONS NUMBERED 1 AND 2 ARE ANSWERED IN THE
NEGATIVE. AN ANSWER TO QUESTION 3 IS NOT REQUIRED.
B-177232, DEC 19, 1972
CONTRACT - MISTAKE IN BID - CONSTRUCTIVE NOTICE
DECISION ALLOWING EXECUTION OF A SUPPLEMENTAL AGREEMENT INCREASING
THE PRICE OF A CONTRACT AWARDED TO JAX FIXTURE AND SUPPLY COMPANY BY THE
VETERANS ADMINISTRATION FOR TWO ITEMS OF KITCHEN EQUIPMENT.
SINCE THERE WAS A SUBSTANTIAL DIFFERENCE BETWEEN JAX'S AGGREGATE BID
AND THE NEXT LOWEST AGGREGATE BID, AND NO SUCH PRICE DISPARITY WAS
PRESENT AS TO OTHER BIDS SUBMITTED, THE CONTRACTING OFFICER WAS ON
CONSTRUCTIVE NOTICE OF A POSSIBLE MISTAKE IN JAX'S BID.
ACCORDINGLY, THE CONTRACT MAY BE ADJUSTED TO JAX'S ESTABLISHED
INTENDED BID PRICE.
TO MR. DONALD E. JOHNSON:
REFERENCE IS MADE TO LETTER 134C DATED OCTOBER 5, 1972, WITH
ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE
AND SURGERY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN
CONCERNING AN ERROR ALLEGED BY THE JAX FIXTURE AND SUPPLY COMPANY TO
HAVE BEEN MADE IN ITS BID UPON WHICH PURCHASE ORDER NO. 2706 WAS BASED.
BY SOLICITATION NO. 622-29-72, BIDS WERE REQUESTED FOR FURNISHING TWO
ITEMS OF KITCHEN EQUIPMENT. AN AWARD IN THE AGGREGATE WAS CONTEMPLATED.
JAX FIXTURE AND SUPPLY COMPANY SUBMITTED A BID DATED JUNE 22, 1972,
OFFERING TO FURNISH THE TWO ITEMS OF KITCHEN EQUIPMENT FOR AN AGGREGATE
TOTAL PRICE OF $8,025.75. THE BID OF THE COMPANY WAS ACCEPTED ON JUNE
28, 1972.
BY LETTER DATED JULY 7, 1972, JAX ADVISED THAT AN ERROR HAD BEEN MADE
IN ITS BID ON ITEM 2 IN THAT IT HAD FAILED TO INCLUDE THE COST OF THE
TABLE WHICH IT STATED WAS $1,310. IN A LATER LETTER THE COMPANY STATED
THAT IT HAD RECEIVED A QUOTATION FROM ITS SUPPLIER WHICH QUOTED A PRICE
FOR THE TABLE AT $1,310. JAX HAS REQUESTED THAT THE CONTRACT PRICE BE
INCREASED BY $1,310 TO COVER THE COST OF THE TABLE. IN SUPPORT OF ITS
ALLEGATION OF ERROR, JAX SUBMITTED COPIES OF ITS SUPPLIER'S QUOTATIONS
AND PRINTED PRICE LISTS.
THE CONTRACTING OFFICER RECOMMENDED THAT THE CONTRACT PRICE BE
INCREASED BY $1,310 TO COVER THE COST OF THE TABLE BECAUSE HE SHOULD
HAVE BEEN ON CONSTRUCTIVE NOTICE OF A POSSIBLE MISTAKE IN JAX'S BID.
THE DIRECTOR, SUPPLY SERVICE, CONCURS IN THIS RECOMMENDATION, AND AGREES
WITH THE CONCLUSION OF THE CONTRACTING OFFICER THAT JAX HAS ESTABLISHED
ITS INTENDED BID PRICE.
THE ABSTRACT OF BIDS SHOWS THAT THE TEN OTHER AGGREGATE BIDS RANGE
FROM $9,372 TO $11,494.60. IN VIEW OF THE SUBSTANTIAL DIFFERENCE
($1,346.25) BETWEEN JAX'S AGGREGATE BID AND THE NEXT LOWEST AGGREGATE
BID AND THE FACT THAT SUCH PRICE DISPARITY WAS NOT PRESENT AS TO THESE
OTHER BIDS, WE AGREE WITH THE CONCLUSIONS OF THE DIRECTOR, SUPPLY
SERVICE, AND THE CONTRACTING OFFICER RESPECTING CONSTRUCTIVE NOTICE AND
THE INTENDED BID PRICE.
ACCORDINGLY, AS ADMINISTRATIVELY RECOMMENDED, WE HAVE NO OBJECTION TO
THE EXECUTION OF A SUPPLEMENTAL AGREEMENT INCREASING THE CONTRACT PRICE
BY $1,310 WHICH WOULD STILL REPRESENT THE LOWEST BID PRICE. A REFERENCE
TO THIS DECISION SHOULD BE MADE ON THE SUPPLEMENTAL AGREEMENT.
B-175748, DEC 15, 1972
CONTRACTS - BID CORRECTION - GOVERNMENT DURESS
DECISION DENYING THE CLAIM OF MOREY MACHINERY CO., INC. FOR
ADDITIONAL PAYMENTS ON A CONTRACT WITH THE DEPARTMENT OF THE ARMY FOR
METAL CUTTING SHAPERS ON THE BASIS THAT IT WAS FORCED TO WITHDRAW A
CORRECTION TO ITS BID BY REASON OF GOVERNMENT DURESS.
IT IS NOT DURESS TO INSTITUTE OR THREATEN TO INSTITUTE CIVIL SUITS
WHERE THE THREAT TO DO SO IS MADE IN THE HONEST BELIEF THAT A GOOD CAUSE
OF ACTION EXISTS. MILLS V. UNITED STATES, 187 CT. CL. 696 (1969).
FROM THE RECORD, IT IS REASONABLY CLEAR THAT THE CONTRACTING OFFICER
HONESTLY BELIEVED THAT A GOOD CAUSE OF ACTION WOULD EXIST AGAINST MOREY
IN THE EVENT IT ATTEMPTED TO RENEGE ON ITS ORIGINAL OFFER.
TO WACHTEL, WIENER & ROSS:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 12, 1972, AND PRIOR
CORRESPONDENCE, REGARDING THE CLAIM OF MOREY MACHINERY CO., INC., WITH
RESPECT TO DEPARTMENT OF THE ARMY CONTRACT NO. DAAG11-70-C-0118.
THE SOLICITATION UPON WHICH THE CONTRACT WAS BASED REQUESTED OFFERS
FOR TWO METAL CUTTING SHAPERS.
BY A SERIES OF AMENDMENTS "THE CLOSING DATE FOR RECEIPT OF BIDS" WAS
EXTENDED FROM 3 P.M., MAY 28, 1969, TO 3 P.M., JUNE 27, 1969. MOREY
SUBMITTED AN OFFER IN THE AMOUNT OF $62,920 PER UNIT. THE ONLY OTHER
OFFER WAS SUBMITTED BY THE CINROCK MACHINERY COMPANY IN THE AMOUNT OF
$41,569 PER UNIT. HOWEVER, THE CINROCK OFFER WAS REJECTED AS
NONRESPONSIVE TO THE SPECIFICATIONS.
AFTER THE EVALUATION OF THE OFFERS AND THE RECEIPT OF A FAVORABLE
PREAWARD SURVEY ON MOREY, THE CONTRACTING OFFICER TELEPHONED THE COMPANY
TO ADVISE THAT IT COULD EXPECT TO RECEIVE AWARD OF THE CONTRACT. AT
THAT TIME, MR. LEONARD MOREY ADVISED THE CONTRACTING OFFICER THAT AN
ERROR HAD BEEN MADE IN THE PREPARATION OF THE OFFER IN THAT THE COST OF
LIVING PROVISIONS IN THE NEW UNION CONTRACT HAD BEEN OVERLOOKED. THE
CONTRACTING OFFICER TOLD MR. MOREY THAT THE PROCUREMENT WAS A FORMALLY
ADVERTISED PROCUREMENT AND THAT THE OFFER COULD NOT BE REVISED IN THE
SAME MANNER AS IN THE CASE OF A NEGOTIATED PROCUREMENT.
HOWEVER, ON JULY 29, 1969, MOREY SENT A TELEGRAM TO THE CONTRACTING
AGENCY REPEATING THE NATURE OF THE ERROR AND REQUESTING AN INCREASE OF
$14,400 IN ITS TOTAL PRICE FOR BOTH UNITS, OR ALTERNATIVELY, A CONTRACT
ESCALATION CLAUSE BASED ON THE UNION CONTRACT. UPON RECEIPT OF THE
TELEGRAM, THE CONTRACTING OFFICER TELEPHONED THE COMPANY AND SPOKE TO
MR. ROBERT MOREY. THE CONTRACTING OFFICER ADVISED HIM THAT ANY
CORRECTION IN THE OFFER WOULD HAVE TO BE MADE IN ACCORDANCE WITH THE
MISTAKE IN BID PROCEDURES OF THE ARMED SERVICES PROCUREMENT REGULATION,
AND THAT, UNLESS THE COMPANY COULD SUBMIT CLEAR AND CONVINCING EVIDENCE
OF A MISTAKE IN BID, THE COMPANY WOULD BE HELD TO ITS ORIGINAL OFFER.
THEREAFTER, THE COMPANY SENT A TELEGRAM TO THE CONTRACTING OFFICER ON
JULY 31, 1969, RESCINDING THE TELEGRAM OF JULY 29, 1969, AND REAFFIRMING
THE ORIGINAL OFFER OF $62,920 PER UNIT. SUBSEQUENTLY, ON AUGUST 5,
1969, MR. ROBERT MOREY MET WITH CONTRACTING AGENCY REPRESENTATIVES TO
DISCUSS THE SPECIFICATION REQUIREMENTS. ON AUGUST 26, 1969, CONTRACT
NO. DAAG11-70-C-0118 WAS AWARDED TO MOREY FOR THE EQUIPMENT.
APPROXIMATELY TWO YEARS AFTER AWARD OF THE CONTRACT, MOREY SUBMITTED
A FINAL INVOICE CLAIMING $134,272.90 IN ADDITION TO THE $125,000
PREVIOUSLY PAID TO IT AS PROGRESS PAYMENTS. IN THE TRANSMITTAL LETTER
ACCOMPANYING THE INVOICE, MOREY STATED THAT THE BILL WAS BEING PRESENTED
FOR PAYMENT ON THE BASIS OF ITS TELEGRAM OF JULY 29, 1969, "WHICH WE
WERE FORCED TO WITHDRAW UNDER DURESS." ALSO, MOREY STATED THAT SINCE THE
OFFER WAS A NEGOTIATED BID, AS EVIDENCED BY THE FACE SHEET OF THE BID
FORM, IT HAD EVERY RIGHT TO WITHDRAW ITS ORIGINAL OFFER, ALTHOUGH IT WAS
NOT PERMITTED TO DO SO BECAUSE OF THREATS MADE BY THE GOVERNMENT
REPRESENTATIVE.
AFTER EXPLORING THE MATTER WITH THE CONTRACTING AGENCY, MOREY DECIDED
TO FILE THE CLAIM WITH OUR OFFICE. BY LETTER DATED MAY 22, 1972, TO OUR
OFFICE, YOU INDICATED THAT MOREY IS NOW CLAIMING $226,239.
AS INDICATED ABOVE, MOREY CONTENDS THAT IT ENTERED INTO THE CONTRACT
UNDER DURESS AND THREATS BY THE CONTRACTING OFFICER. IN THAT
CONNECTION, IT POINTS OUT THAT, ALTHOUGH THE FACE SHEET OF THE
SOLICITATION WAS MARKED "NEGOTIATED" AND PARAGRAPH 7 OF THE SOLICITATION
INSTRUCTIONS AND CONDITIONS PROVIDED THAT IF THE SOLICITATION IS
NEGOTIATED OFFERS MAY BE MODIFIED OR WITHDRAWN AT ANY TIME PRIOR TO
AWARD, IT WAS COERCED INTO WITHDRAWING ITS REQUEST TO CHANGE ITS
ORIGINAL OFFER BY REPRESENTATIONS THAT THE PROCUREMENT WAS AN ADVERTISED
PROCUREMENT AND THAT IT WOULD BE HELD LIABLE TO ITS ORIGINAL OFFER.
SUCH REPRESENTATIONS ARE ALLEGED TO HAVE BEEN MADE AT THE AUGUST 5,
1969, MEETING, AS WELL AS IN THE PRIOR TELEPHONE CALLS WITH THE
CONTRACTING OFFICER.
ANY REPRESENTATIONS THAT WERE MADE IN THIS REGARD APPEAR TO HAVE BEEN
BASED UPON THE FACT THAT THE CONTRACTING AGENCY INTENDED THE PROCUREMENT
TO BE ADVERTISED, NOTWITHSTANDING THAT THE SOLICITATION WAS MARKED
"NEGOTIATED" ON ITS FACE SHEET. IN THAT REGARD, WE NOTE THAT THE
PROCUREMENT WAS LISTED IN THE MAY 1, 1969, ISSUE OF THE COMMERCE
BUSINESS DAILY AS "IFB DAAG11-69-B-4135 - BID OPENING 26 MAY 69." WE
NOTE ALSO THAT THE AMENDMENTS TO THE SOLICITATION EXTENDING THE TIME FOR
THE RECEIPT OF OFFERS REFERRED TO "THE CLOSING DATE FOR RECEIPT OF
BIDS." THE USE OF THE TERMS "IFB," "BID OPENING," AND "RECEIPT OF BIDS"
ARE COMMON TO ADVERTISED, RATHER THAN NEGOTIATED, PROCUREMENTS.
MOREOVER, THE "PRESOLICITATION DATA ON PROPOSED PROCUREMENT ACTIONS"
SHEET, WHICH WAS PREPARED ON APRIL 14, 1969, SHOWS THE PROPOSED METHOD
OF PROCUREMENT AS "FORMAL ADVERTISEMENT." ACCORDINGLY, IT APPEARS, AS
REPRESENTED BY THE CONTRACTING AGENCY, THAT THE DESIGNATION OF THE
PROCUREMENT AS NEGOTIATED, RATHER THAN ADVERTISED, ON THE FACE SHEET OF
THE SOLICITATION WAS INADVERTENT RATHER THAN INTENDED. IN THE
CIRCUMSTANCES, IN VIEW OF THE INADVERTENT NATURE OF THE "NEGOTIATED"
DESIGNATION, THE CONTRACTING OFFICER BELIEVED THE PROCUREMENT TO BE AN
ADVERTISED PROCUREMENT AND, ON THE BASIS OF THAT BELIEF, ADVISED MOREY
THAT IT WOULD BE COMPELLED TO PERFORM ON THE ORIGINAL OFFER.
IT HAS BEEN HELD THAT IT IS NOT DURESS TO INSTITUTE OR THREATEN TO
INSTITUTE CIVIL SUTIS WHERE THE THREAT TO DO SO IS MADE IN THE HONEST
BELIEF THAT A GOOD CAUSE OF ACTION EXISTS. MILLS V. UNITED STATES, 187
CT. CL. 696 (1969); AND BEATTY V. UNITED STATES, 144 CT. CL. 203
(1958). FROM THE RECORD, IT IS REASONABLY CLEAR THAT THE CONTRACTING
OFFICER HONESTLY BELIEVED THAT A GOOD CAUSE OF ACTION WOULD EXIST
AGAINST MOREY IN THE EVENT IT ATTEMPTED TO RENEGE ON ITS ORIGINAL OFFER.
ACCORDINGLY, THE CLAIM OF MOREY IS DENIED.
B-176480, DEC 15, 1972
CLAIM OF THE UNITED STATES - STATE LIABILITY - INTEREST ON SOCIAL
SECURITY FUNDS - COMMINGLING OF FUNDS
DECISION DENYING THE CLAIMS OF THE DEPARTMENT OF HEALTH, EDUCATION,
AND WELFARE (HEW) AGAINST THE NEW YORK STATE DEPARTMENT OF SOCIAL
SERVICES, THE NEW JERSEY REHABILITATION COMMISSION, THE PENNSYLVANIA
BUREAU OF VOCATIONAL REHABILITATION, AND THE PENNSYLVANIA DEPARTMENT OF
PUBLIC WELFARE FOR INTEREST ALLEGEDLY EARNED BUT NOT REPORTED BY THE
RESPECTIVE STATE AGENCIES ON ADVANCE OR ESTIMATED PAYMENTS MADE UNDER
SECTION 221 (E) OF THE SOCIAL SECURITY ACT FOR VARIOUS PERIODS RANGING
FROM JULY 1, 1954 TO JUNE 30, 1965.
THERE IS NO INDICATION OF DERELICTION OR IMPROPRIETY ON THE PART OF A
STATE IN COMMINGLING SECTION 221 (E) PAYMENTS WITH OTHER FUNDS.
THEREFORE, THE FEDERAL GOVERNMENT HAS THE BURDEN OF ESTABLISHING FACTUAL
BASIS FOR ATTRIBUTING INTEREST EARNED ON STATE FUNDS GENERALLY TO
SECTION 221 (E) PAYMENTS EVEN IF THE STATE IS REGARDED AS THE "TRUSTEE"
OF SUCH PAYMENTS. ALTHOUGH THERE IS NO DIRECT EVIDENCE IN THIS REGARD
SINCE THE COMMINGLING HAS CAUSED THE FUNDS TO LOSE THEIR IDENTITY, THE
RESPONSES THAT THE STATES HAVE MADE TO HEW'S CLAIMS INDICATE THE STATES'
POLICIES OF NONINVESTMENT OF SECTION 221 (E) FUNDS IN INTEREST BEARING
ACCOUNTS. ACCORDINGLY, HEW'S CLAIM MUST BE DENIED.
TO MR. SECRETARY:
BY LETTER OF JULY 6, 1972, MISS SARAH H. SPECTOR, CHIEF, LITIGATION
AND CLAIMS BRANCH, DIVISION OF BUSINESS AND ADMINISTRATIVE LAW, OFFICE
OF THE GENERAL COUNSEL, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,
TRANSMITTED FOR APPROPRIATE ACTION UNDER THE FEDERAL CLAIMS COLLECTION
ACT, 31 U.S.C. 951-953, AND IMPLEMENTING REGULATIONS (4 CFR
101.1-105.7) FILES RELATING TO CLAIMS BY THE DEPARTMENT OF HEALTH,
EDUCATION, AND WELFARE (HEW) AGAINST THE NEW YORK STATE DEPARTMENT OF
SOCIAL SERVICES IN THE AMOUNT OF $16,141.97, AND AGAINST THE NEW JERSEY
REHABILITATION COMMISSION IN THE AMOUNT OF $4,970. BY LETTER OF
SEPTEMBER 7, 1972, MISS SPECTOR TRANSMITTED FILES RELATING TO CLAIMS BY
HEW AGAINST THE PENNSYLVANIA BUREAU OF VOCATIONAL REHABILITATION IN THE
AMOUNT OF $36,456, AND AGAINST THE PENNSYLVANIA DEPARTMENT OF PUBLIC
WELFARE IN THE AMOUNT OF $1,363.
SECTION 221 OF THE SOCIAL SECURITY ACT, AS AMENDED, 42 U.S.C. 421,
AUTHORIZES THE SECRETARY OF HEW TO ENTER INTO AGREEMENTS PROVIDING FOR
THE MAKING OF DISABILITY DETERMINATIONS BY THE STATES AS SET FORTH IN
THAT SECTION. SECTION 221 PROVIDES, IN PART, THAT:
"(E) EACH STATE WHICH HAS AN AGREEMENT WITH THE SECRETARY UNDER THIS
SECTION SHALL BE ENTITLED TO RECEIVE FROM THE (FEDERAL OLD-AGE AND
SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE) TRUST FUNDS, IN
ADVANCE OR BY WAY OF REIMBURSEMENT, AS MAY BE MUTUALLY AGREED UPON, THE
COST TO THE STATE OF CARRYING OUT THE AGREEMENT UNDER THIS SECTION. THE
SECRETARY SHALL FROM TIME TO TIME CERTIFY SUCH AMOUNT AS IS NECESSARY
FOR THIS PURPOSE TO THE MANAGING TRUSTEE, REDUCED OR INCREASED, AS THE
CASE MAY BE, BY ANY SUM (FOR WHICH ADJUSTMENT HEREUNDER HAS NOT
PREVIOUSLY BEEN MADE) BY WHICH THE AMOUNT CERTIFIED FOR ANY PRIOR PERIOD
WAS GREATER OR LESS THAN THE AMOUNT WHICH SHOULD HAVE BEEN PAID TO THE
STATE UNDER THIS SUBSECTION FOR SUCH PERIOD; AND THE MANAGING TRUSTEE,
PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, SHALL
MAKE PAYMENT FROM THE TRUST FUNDS AT THE TIME OR TIMES FIXED BY THE
SECRETARY, IN ACCORDANCE WITH SUCH CERTIFICATION. ***
"(F) ALL MONEY PAID TO A STATE UNDER THIS SECTION SHALL BE USED
SOLELY FOR THE PURPOSES FOR WHICH IT IS PAID; AND ANY MONEY SO PAID
WHICH IS NOT USED FOR SUCH PURPOSES SHALL BE RETURNED TO THE TREASURY OF
THE UNITED STATES FOR DEPOSIT IN THE TRUST FUNDS."
ALL OF THE INSTANT CLAIMS ARISE ON THE BASIS OF AUDIT EXCEPTIONS
TAKEN FOR INTEREST ALLEGEDLY EARNED BUT NOT REPORTED BY THE RESPECTIVE
STATE AGENCIES ON ADVANCE OR ESTIMATED PAYMENTS MADE UNDER SECTION 221
(E) FOR VARIOUS PERIODS RANGING FROM JULY 1, 1954, TO JUNE 30, 1965.
THE FACTS RELATING TO EACH CLAIM ARE LARGELY THE SAME. IN EACH CASE
PAYMENTS TO THE STATE AGENCY UNDER SECTION 221 WERE COMMINGLED WITH
OTHER FUNDS UNDER STATE CONTROL, DERIVED FROM STATE AND OTHER FEDERAL
SOURCES, I.E., SECTION 221 PAYMENTS BECAME MERGED GENERALLY INTO THE
TOTAL BALANCE OF STATE FUNDS. UNDER EACH STATE'S FISCAL PROCEDURES, A
PORTION OF THE TOTAL STATE FUND BALANCE IS PLACED IN INTEREST BEARING
ACCOUNTS, WHILE THE REMAINDER IS MAINTAINED IN "OPEN" OR "DEMAND"
ACCOUNTS WHICH DO NOT EARN INTEREST. THE STATE PROCEDURES DO NOT
IDENTIFY EITHER PORTION OF SUCH FUNDS IN TERMS OF THEIR SPECIFIC
SOURCES. IN VIEW OF THE FOREGOING, HEW APPARENTLY ARRIVED AT THE AMOUNT
OF EACH CLAIM FOR INTEREST BY APPLYING TO THE TOTAL INTEREST EARNED BY
EACH STATE THE RATIO OF SECTION 221 PAYMENTS TO THE TOTAL STATE FUND
BALANCES IN BOTH INTEREST AND NONINTEREST BEARING ACCOUNTS. THUS EACH
CLAIM REPRESENTS AN ESTIMATED PRO RATA SHARE OF ALL INTEREST EARNED,
BASED UPON A FORMULA TREATING SECTION 221 PAYMENTS AS ATTRIBUTABLE IN
PART TO INTEREST BEARING ACCOUNTS AND IN PART TO OPEN ACCOUNT. SEE,
E.G., MEMORANDUM OF JUNE 3, 1964, FROM THE HEW REGIONAL AUDITOR, NEW
YORK, TO THE CHIEF, FIELD BRANCH, DIVISION OF GRANT-IN-AID AUDITS.
EACH STATE AGENCY APPEALED THE AUDIT EXCEPTION ON THE GROUND THAT
SECTION 221 PAYMENTS SHOULD BE CONSIDERED ATTRIBUTABLE ENTIRELY TO THE
NONINTEREST BEARING ACCOUNTS. THE POSITIONS OF THE THREE STATES ARE SET
FORTH IN THE FILES TRANSMITTED AS FOLLOWS:
1. EXCERPT FROM A LETTER OF JULY 17, 1963, FROM THE COMPTROLLER OF
THE STATE OF NEW YORK AND THE COMMISSIONER OF TAXATION AND FINANCE TO
THE NEW YORK COMMISSIONER OF SOCIAL WELFARE:
"APART FROM ANY LEGAL QUESTIONS WHICH MAY BE INVOLVED, THIS FEDERAL
CLAIM IS BASED UPON THE ERRONEOUS ASSUMPTION THAT THE BALANCES OF SUCH
FEDERAL GRANTS WERE, AND PRESENTLY ARE, A PART OF THOSE STATE FUNDS, AND
FUNDS UNDER STATE CONTROL, DEPOSITED IN INTEREST BEARING TIME DEPOSIT
OPEN ACCOUNTS IN BANKS THROUGHOUT THE STATE. SUCH IS NOT THE FACT.
"ATTACHED IS A TABULATION OF THE MONTHLY BALANCES IN THE FUNDS OF THE
STATE, INCLUDING THOSE RECEIVED FROM VARIOUS FEDERAL GRANTS. AFTER
DEDUCTING THE BALANCES IN THE STATE EMPLOYEES' AND HOSPITAL EMPLOYEES'
RETIREMENT ACCOUNTS AS WELL AS THE BALANCE IN THE UNEMPLOYMENT INSURANCE
BENEFIT ACCOUNT, THE ATTACHED SCHEDULE CONCLUSIVELY SHOWS THAT AT ALL
TIMES THE BALANCES IN THE SUBJECT FEDERAL GRANTS WERE SUBSTANTIALLY LESS
THAN THAT PORTION OF ALL FUNDS ON DEPOSIT ON A DEMAND BASIS AND ON
WHICH, OF COURSE, NO INTEREST IS RECEIVED.
"AS JOINT CUSTODIANS OF THESE FUNDS IT WAS DETERMINED, AS A MATTER OF
POLICY, THAT THE TOTAL AMOUNT IN DEMAND DEPOSITS, BOTH IN CHECKING AND
SO CALLED DORMANT BANK ACCOUNTS, SHOULD AT ALL TIMES EXCEED THE FEDERAL
GRANT BALANCES. THIS WAS DEEMED NECESSARY BECAUSE OF THE PATTERNS OF
CASH FLOW FROM THESE FUNDS OF FEDERAL ORIGIN. THIS LIKEWISE BECAME AN
IMPORTANT FACTOR IN DETERMINING THE MAXIMUM OVERALL AMOUNT THAT COULD BE
PLACED IN INTEREST BEARING TIME DEPOSIT OPEN ACCOUNTS."
2. EXCERPT FROM LETTER OF APRIL 19, 1965, FROM THE STATE TREASURER
OF NEW JERSEY TO THE HEW REGIONAL REPRESENTATIVE:
"NEW JERSEY TAKES THE POSITION THAT IT HAS NOT INVESTED FEDERAL FUNDS
DURING THE PERIOD COVERED BY YOUR AUDIT. WHILE IT IS TRUE THAT NEW
JERSEY COMMINGLES ALL FUNDS IN ONE TREASURY AND HAS FOLLOWED THE
SUGGESTIONS OUTLINED BY THE COMMISSION ON INTERGOVERNMENTAL RELATIONS TO
PUT TO WORK IDLE FUNDS, WE HAVE CONSISTENTLY RETAINED AS DEMAND DEPOSITS
MORE THAN $6 MILLION DAILY. THIS INCLUDES ALL FEDERAL FUNDS ADVANCED
AND UNUSED FOR FEDERAL PROGRAMS.
"IT IS OUR POSITION THAT ANY FUNDS EARNING INTEREST IN NEW JERSEY IN
ITS GENERAL TREASURY REPRESENT STATE FUNDS ONLY. ALL FEDERAL FUNDS ARE
KEPT IN DEMAND BALANCES."
3. EXCERPT FROM LETTER OF MAY 22, 1972, FROM THE GENERAL COUNSEL OF
THE PENNSYLVANIA DEPARTMENT OF LABOR AND INDUSTRY TO THE SOCIAL SECURITY
COMMISSIONER:
"THE PENNSYLVANIA STATE TREASURER HAS INDICATED THAT THE FEDERAL
FUNDS HERETOFORE MENTIONED WERE INCLUDED IN ACTIVE BANK ACCOUNT
BALANCES. ACTIVE BANK DEPOSITS ARE NOT INTEREST BEARING; THEREFORE,
OUR STATE TREASURER ADVISES US THAT THE INVOICE RENDERED BY THE UNITED
STATES DEPARTMENT OF HEALTH, EDUCATION AND WELFARE IS NOT IN ORDER."
WITH RESPECT TO THE NEW YORK POSITION, THE HEW AUDITOR RESPONDED THAT
THE STATE HAD OMITTED CERTAIN PAYMENTS BY FEDERAL AGENCIES OTHER THAN
HEW FROM ITS CALCULATION OF FEDERAL FUND BALANCES; AND THAT INCLUSION
OF THESE PAYMENTS INDICATED THAT TOTAL FEDERAL FUND BALANCES "NOT
INFREQUENTLY" EXCEEDED THE STATE'S TOTAL BALANCE FOR NONINTEREST BEARING
FUNDS. MEMORANDUM OF JUNE 3, 1964, FROM THE HEW REGIONAL AUDITOR, NEW
YORK, SUPRA. WITH THIS EXCEPTION, THE FACTUAL POSITIONS TAKEN BY THE
STATES APPEAR TO BE UNCONTESTED. A MEMORANDUM DATED JULY 31, 1963, FROM
THE HEW REGIONAL ATTORNEY, REGION II, TO THE REGIONAL AUDITOR ADOPTED
THE FOLLOWING LEGAL POSITION IN THE NEW YORK CASE:
"*** (I)T IS NOW WELL ESTABLISHED THAT UPON RECEIPT BY A STATE,
FEDERAL GRANTS-IN-AID BECOME STATE FUNDS IMPRESSED WITH A CONDITION IN
THE NATURE OF A TRUST THAT SUCH FUNDS BE USED FOR THE PURPOSE AND IN
ACCORDANCE WITH THE REQUIREMENTS OF APPLICABLE FEDERAL LAW. IN A LONG
LINE OF DECISIONS BY THE COMPTROLLER GENERAL OF THE UNITED STATES, HE
HAS RULED THAT IF IN CONNECTION WITH ITS HANDLING OF SUCH FUNDS,
INTEREST OR EARNINGS ACCRUE, IRRESPECTIVE OF WHETHER SUCH EARNINGS ARE
DESCRIBED AS INTEREST OR BY ANY OTHER DESIGNATION, ALL SUCH EARNINGS
BECOME IMPRESSED WITH THE SAME CONDITION IN THE NATURE OF A TRUST AS
APPLIED TO THE FEDERALLY GRANTED FUNDS. SUCH RULINGS MAKE CLEAR THAT
UPON RECEIPT BY A STATE, SUCH FEDERALLY GRANTED FUNDS BECOME STATE FUNDS
SUBJECT TO ESTABLISHED STATE PROCEDURES GOVERNING THE HANDLING OF STATE
FUNDS, EXCEPT OF COURSE TO THE EXTENT THAT ANY FEDERAL REQUIREMENT
DIRECTS OTHERWISE. SUCH FEDERALLY GRANTED FUNDS ARE IN THIS RESPECT
THEREFORE COMMINGLED WITH OTHER STATE MONEYS AND ARE NOT EARMARKED AS
FEDERAL MONEYS.
"NO (APPLICABLE) PROVISION OF FEDERAL LAW OR REGULATION *** REQUIRES
THAT FEDERAL FUNDS BE EARMARKED AND NOT COMMINGLED WITH STATE FUNDS FOR
PURPOSES OF THEIR DEPOSIT IN BANKS OR OTHER TYPES OF DEPOSITORIES.
"IN VIEW OF THE FOREGOING, YOU ARE ADVISED THAT NO BASIS EXISTS FOR
TREATING FEDERAL FUNDS AS SOLELY FUNDS DEPOSITED IN DEMAND DEPOSITS
UNDER THE ABOVE-DESCRIBED STATE PROCEDURE. UNDER THE ABOVE RULINGS OF
THE COMPTROLLER GENERAL, THE FEDERAL AGENCIES ADMINISTERING THE GRANTS
INVOLVED ARE OBLIGATED TO ASSURE THAT INTEREST EARNED ON SUCH GRANTS ARE
PROPORTIONATELY PRORATED AND THAT SUCH PRORATED SHARE ACCRUES TO THE
BENEFIT OF THE UNITED STATES GOVERNMENT."
THE FOREGOING POSITION WAS AFFIRMED IN A DECISION BY THE SOCIAL
SECURITY COMMISSIONER DATED FEBRUARY 11, 1965, WHICH IS APPARENTLY
FOLLOWED FOR ALL OF THE CLAIMS HERE INVOLVED. HOWEVER, NO ATTEMPT WAS
MADE TO COLLECT THESE CLAIMS PENDING CONSIDERATION OF LEGISLATION
EVENTUALLY ENACTED AS THE INTERGOVERNMENTAL COOPERATION ACT OF 1968,
APPROVED OCTOBER 16, 1968, PUB. L. 90-577, 82 STAT. 1098, 42 U.S.C.
4201.
SECTION 203 OF THE INTERGOVERNMENTAL COOPERATION ACT, 42 U.S.C.
4213, PROVIDES, IN PART:
"*** STATES SHALL NOT BE HELD ACCOUNTABLE FOR INTEREST EARNED ON
GRANT-IN-AID FUNDS, PENDING THEIR DISBURSEMENT FOR PROGRAM PURPOSES."
SECTION 106 OF THE ACT, 42 U.S.C. 4201(6), DEFINES THE TERM
"GRANT-IN-AID" TO INCLUDE, INTER ALIA, PAYMENTS TO STATES UNDER A FIXED
ANNUAL OR AGGREGATE AUTHORIZATION WHICH EITHER REQUIRES SOME MATCHING ON
THE PART OF THE STATES OR OPERATES ON A FORMULA BASIS. SECTION 106(7)
SPECIFICALLY EXCLUDES FROM THE DEFINITION OF GRANTS-IN-AID "PAYMENTS TO
STATES OR POLITICAL SUBDIVISIONS AS FULL REIMBURSEMENT FOR THE COSTS
INCURRED IN PAYING BENEFITS OR FURNISHING SERVICES TO PERSONS ENTITLED
THERETO UNDER FEDERAL LAWS." IN A LETTER OF JANUARY 24, 1969, TO THE
THEN DEPUTY DIRECTOR OF THE BUREAU OF THE BUDGET, B-146285(6), WE HELD
THAT THE PROVISION OF SECTION 203 OF THE ACT RELIEVING THE STATES OF THE
OBLIGATION TO ACCOUNT FOR INTEREST EARNED ON GRANT-IN-AID FUNDS APPLIED
RETROACTIVELY.
AS A RESULT OF ENACTMENT OF THE INTERGOVERNMENTAL COOPERATION ACT AND
OUR DECISION OF JANUARY 24, 1969, THE ORIGINAL AMOUNTS OF THE INSTANT
CLAIMS WERE REDUCED BY THE ELIMINATION OF INTEREST CLAIMED ON
GRANT-IN-AID PAYMENTS. HOWEVER, IN AN OPINION DATED APRIL 29, 1969, THE
HEW GENERAL COUNSEL'S OFFICE TOOK THE POSITION THAT PAYMENTS TO THE
STATES UNDER SECTION 221 OF THE SOCIAL SECURITY ACT ARE NOT
GRANTS-IN-AID UNDER SECTION 106 OF THE INTERGOVERNMENTAL COOPERATION
ACT, BUT FALL WITHIN THE SPECIFIC EXCEPTION CONTAINED IN SECTION 106(7)
AS TO PAYMENTS IN THE NATURE OF REIMBURSEMENT FOR SERVICES FURNISHED BY
THE STATES. CONSEQUENTLY, THIS OPINION CONCLUDED THAT RECOVERY OF
INTEREST EARNED ON SECTION 221 PAYMENTS IS NOT FORECLOSED BY SECTION 203
OF THE INTERGOVERNMENTAL COOPERATION ACT.
ASSUMING BUT NOT DECIDING THAT THE STATES WOULD BE LIABLE TO REPAY
ANY INTEREST EARNED ON SECTION 221 PAYMENTS AND THAT SUCH LIABILITY
WOULD NOT BE AFFECTED BY SECTION 203 OF THE INTERGOVERNMENTAL
COOPERATION ACT, WE BELIEVE THAT THE FILES TRANSMITTED FAIL TO ESTABLISH
A FACTUAL BASIS SUFFICIENT TO JUSTIFY THE CONCLUSION THAT INTEREST WAS
ACTUALLY EARNED ON THE SECTION 221 PAYMENTS HERE INVOLVED.
AS NOTED PREVIOUSLY, THE RECORD WITH RESPECT TO EACH CLAIM INDICATES
THAT SECTION 221 PAYMENTS WERE COMMINGLED WITH OTHER FUNDS IN THE
CUSTODY OF THE RESPECTIVE STATES, AND THAT EACH HEW CLAIM REPRESENTS A
PRO RATA SHARE OF THE TOTAL INTEREST EARNED ON FUNDS HELD BY EACH STATE.
IN THIS RESPECT, THE INSTANT FACTUAL CONTEXT IS SIMILAR TO THAT
CONSIDERED IN OUR LETTER OF JUNE 2, 1964, B-153085, TO THE COMPTROLLER
OF THE TREASURY OF THE STATE OF TENNESSEE, WHEREIN AN AUDIT BY THE
DEPARTMENT OF AGRICULTURE CHARGED THE STATE A PRO RATA SHARE OF INTEREST
EARNED ON COMMINGLED FEDERAL PAYMENTS MADE UNDER THE NATIONAL SCHOOL
LUNCH PROGRAM AND THE SPECIAL MILK PROGRAM. RESPONDING TO THE TENNESSEE
COMPTROLLER'S REQUEST TO DISCUSS THE MATTER, WE STATED IN PART:
"LIKEWISE, WE HAVE CONSIDERED YOUR CONTENTION THAT NOTWITHSTANDING
THE COMMINGLING OF FEDERAL AND STATE FUNDS IN STATE DEPOSITORY BANK
ACCOUNTS, THE FUNDS WITHDRAWN THEREFROM AND INVESTED AT INTEREST IN
COMPLIANCE WITH STATE LAW REPRESENTED STATE FUNDS ONLY, SINCE THE
BALANCES OF FUNDS ON OPEN ACCOUNTS ARE MANY TIMES THE TOTAL AMOUNTS OF
FEDERAL FUNDS ON DEPOSIT. WE BELIEVE THERE MAY BE REASONABLE BASIS FOR
THIS VIEW. THAT IS, IF IT CAN BE SHOWN AS A MATTER OF FACT THAT THE
STATE'S EXPRESSED INVESTMENT POLICY EXCLUDED FROM INVESTMENT FEDERAL
GRANT FUNDS, THAT THE DAILY BALANCES OF FUNDS ON OPEN ACCOUNTS IN THE
STATE GENERAL FUND ACCOUNTS WERE IN EXCESS OF THE AMOUNTS REQUIRED BY
THE STATE TO MEET ITS COMMITMENTS, INCLUDING THOSE PERTAINING TO ALL
STATE AND FEDERAL GRANT PROGRAMS, AND THAT THE STATE WOULD NOT HAVE BEEN
REQUIRED TO MAINTAIN LARGER DAILY BALANCES OF FUNDS BUT FOR THE FEDERAL
FUNDS ADVANCED AS GRANTS-IN-AID, WE BELIEVE THAT INTEREST RECEIVED BY
THE STATE ON THE FUNDS WITHDRAWN THEREFROM FOR INVESTMENT PROPERLY MAY
BE REGARDED AS INTEREST RECEIVED ON STATE RATHER THAN FEDERAL FUNDS.
***"
WE WENT ON TO POINT OUT THAT THE MERE ALLEGATION THAT BALANCES OF
OPEN ACCOUNTS EXCEEDED THE TOTAL AMOUNT OF FEDERAL FUNDS HELD BY THE
STATE MIGHT NOT OF ITSELF BE SUFFICIENT TO NEGATE A CLAIM FOR INTEREST;
AND THAT RESOLUTION OF THE MATTER SHOULD BE TAKEN UP WITH THE DEPARTMENT
OF AGRICULTURE.
WE BELIEVE THAT THE GENERAL APPROACH INDICATED IN THE PORTION OF OUR
LETTER OF JUNE 2, 1964, QUOTED ABOVE - THAT UNDER CERTAIN CIRCUMSTANCES
INTEREST EARNED ON COMMINGLED FUNDS HELD BY THE STATES IS NOT, AS A
MATTER OF FACT, ATTRIBUTABLE TO THE FEDERAL PORTION OF SUCH FUNDS -
APPLIES TO THE INSTANT CLAIMS. HOWEVER, UNLIKE THE POSTURE OF OUR
LETTER OF JUNE 2, WE ARE REQUIRED BY VIRTUE OF YOUR SUBMISSION TO PASS
UPON THE MERITS OF THESE CLAIMS. THE FACTS PRESENTED WITH RESPECT TO
THE INSTANT CLAIMS ALSO DIFFER FROM THOSE CONSIDERED IN OUR LETTER OF
JUNE 2 SINCE IT APPEARED IN THE LATTER CONTEXT THAT BOTH TENNESSEE LAW
AND FEDERAL REGULATIONS REQUIRED THAT THE FEDERAL FUNDS THERE INVOLVED
BE MAINTAINED IN SEPARATE ACCOUNTS. ON THE OTHER HAND, THERE IS NO
INDICATION IN THE FILES TRANSMITTED HERE OF ANY OBLIGATION ON THE PART
OF THE STATES TO MAINTAIN SEPARATE ACCOUNTS OF SECTION 221 PAYMENTS;
NOR IS THERE ANY INDICATION THAT THE ACTIONS OF THE STATES IN
COMMINGLING SECTION 221 PAYMENTS WITH OTHER FUNDS WAS IMPROPER IN ANY
RESPECT. WHILE WE HAVE HELD THAT FAILURE TO REQUIRE SEGREGATION OF
FEDERAL PAYMENTS DOES NOT CONSTITUTE WAIVER OF A CLAIM FOR INTEREST AS A
MATTER OF LAW, B-152505, JANUARY 30, 1964, THIS FACTOR DOES, OF COURSE,
AFFECT THE FACTUAL BASIS OF SUCH A CLAIM. A-46031, JULY 25, 1941.
TURNING TO THE CIRCUMSTANCES PRESENTED WITH RESPECT TO THE INSTANT
CLAIMS, IT SEEMS CLEAR THAT, IN THE ABSENCE OF ANY INDICATION OF
DERELICTION OR IMPROPRIETY ON THE PART OF THE STATES IN COMMINGLING
SECTION 221 PAYMENTS, THE FEDERAL GOVERNMENT MUST ASSUME THE BURDEN OF
ESTABLISHING A FACTUAL BASIS FOR ATTRIBUTING INTEREST EARNED ON STATE
FUNDS GENERALLY TO SUCH PAYMENTS. THIS IS TRUE EVEN IF THE STATES ARE
TO BE REGARDED AS "TRUSTEES" OF SUCH PAYMENTS. CF., 45 AM. JUR. 2D,
INTEREST AND USURY, SECTION 44, PAGE 47. SINCE THESE COMMINGLED
PAYMENTS HAVE LOST THEIR IDENTITY, THERE IS OBVIOUSLY NO DIRECT EVIDENCE
IN THIS REGARD. ON THE OTHER HAND, WE BELIEVE THAT THE PREVIOUSLY
QUOTED RESPONSES SUBMITTED TO HEW BY EACH OF THE THREE STATES HERE
INVOLVED MAY FAIRLY BE READ TO EXPRESS THE POSITION THAT, AS A MATTER OF
STATE POLICY, SECTION 221 PAYMENTS ARE NOT INVESTED IN INTEREST BEARING
ACCOUNTS. THE ONLY REBUTTAL OFFERED BY HEW IS THAT IN THE CASE OF NEW
YORK, STATE OFFICIALS OMITTED CERTAIN FEDERAL FUNDS FROM CALCULATIONS
SHOWING THAT TOTAL FUNDS HELD IN NONINTEREST BEARING ACCOUNTS ALWAYS
EXCEEDED TOTAL FEDERAL PAYMENTS HELD BY THAT STATE. APART FROM THE FACT
THAT THE SPECIFIC NATURE OF THE OMITTED FEDERAL PAYMENTS IS NOT
DISCLOSED, THIS IS AT MOST A MINOR INCONSISTENCY INSUFFICIENT TO JUSTIFY
THE CONCLUSION THAT THE NEW YORK OFFICIALS' STATEMENT AS TO THE GENERAL
NATURE OF ITS FISCAL POLICIES IS INCORRECT.
IN VIEW OF THE FOREGOING WE CONCLUDE THAT THE FACTS PRESENTED ARE
INSUFFICIENT TO ESTABLISH ANY LIABILITY ON THE PART OF THE THREE STATES
FOR THE REPAYMENT OF INTEREST ALLEGEDLY EARNED ON SECTION 221 PAYMENTS;
AND WE RETURN HEREWITH THE CASE FILES WITHOUT ACTION.
IN CLOSING, WE NOTE THAT THE PROCEDURES WHICH GAVE RISE TO THE
INSTANT MATTER HAVE APPARENTLY BEEN ALTERED SINCE 1965 BY THE
UTILIZATION OF LETTERS-OF-CREDIT IN LIEU OF ACTUAL ADVANCES OF SECTION
221 PAYMENTS, THEREBY MINIMIZING THE LOSS OF INTEREST TO THE FEDERAL
GOVERNMENT. SEE TREASURY DEPARTMENT CIRCULAR NO. 1075; 31 CFR, PART
205. THE ADVANTAGES OF THIS APPROACH WERE RECOGNIZED IN THE SENATE
REPORT ON THE INTERGOVERNMENTAL COOPERATION ACT, S. REPT. NO. 1456,
90TH CONG., 2D SESS., PAGE 15. ACCORDINGLY, IT APPEARS THAT THIS
PROBLEM WILL NOT BE A RECURRENT ONE.
B-176924, DEC 15, 1972
CIVILIAN PERSONNEL - WAGE BOARD OVERTIME COMPENSATION STANDBY DUTY AT
EMPLOYEE'S RESIDENCE
DECISION SUSTAINING THE PRIOR DENIAL OF THE CLAIM OF RALPH E. CONWAY
FOR ADDITIONAL OVERTIME COMPENSATION ALLEGED TO BE DUE FOR STANDBY DUTY
PERFORMED AT HIS RESIDENCE AS A CIVILIAN EMPLOYEE OF THE U.S. CORPS OF
ENGINEERS.
A WAGE BOARD EMPLOYEE IS NOT ENTITLED UNDER 5 U.S.C. 5544(A) TO
OVERTIME COMPENSATION FOR TIME SPENT IN A STANDBY STATUS IN HIS OWN
RESIDENCE, WHERE HE HAS NO DUTIES OTHER THAN TO BE AVAILABLE. CF.
ARMOUR & CO. V. WANTOCK, 323 U.S. 126, 133 (1944).
TO MR. RALPH E. CONWAY:
THIS REFERS TO YOUR LETTER DATED AUGUST 14, 1972, WHICH WILL BE
VIEWED AS CONSTITUTING AN APPEAL FROM THE ACTION OF OUR TRANSPORTATION
AND CLAIMS DIVISION IN DENYING YOUR CLAIM FOR ADDITIONAL OVERTIME
COMPENSATION ALLEGED TO BE DUE FOR STANDBY DUTY AT YOUR RESIDENCE AS A
CIVILIAN EMPLOYEE OF THE UNITED STATES CORPS OF ENGINEERS. YOUR
RESIDENCE WAS PROVIDED BY THE GOVERNMENT PURSUANT TO THE PROVISIONS OF 5
U.S.C. 5911, AND LOCATED 2 OR 3 MINUTES WALKING DISTANCE FROM YOUR PLACE
OF DUTY.
THE RECORD SHOWS THAT YOU ARE A WAGE BOARD EMPLOYEE SERVING IN THE
CAPACITY OF LOCKMASTER AT LOCK NO. 8 ON THE KENTUCKY RIVER, AND THAT YOU
WORK A REGULAR 40-HOUR WEEK. IN ADDITION THERETO, SINCE THE LOCK IS TO
BE OPERATIVE 24 HOURS A DAY, EITHER YOU OR ANOTHER EMPLOYEE MUST BE
AVAILABLE FOR LOCKAGE BEYOND YOUR REGULARLY SCHEDULED TOURS OF DUTY. IN
SUCH LIGHT YOU ARE TO BE AVAILABLE TO OPERATE THE LOCK FOR UP TO 24
HOURS PER DAY ON A ROTATING BASIS WITH THE OTHER EMPLOYEE. PURSUANT TO
THE REQUIREMENT OF YOUR HAVING TO BE AVAILABLE FOR WORK ON UP TO A
24-HOUR BASIS, OCCUPANCY OF GOVERNMENT QUARTERS WITHIN SHORT WALKING
DISTANCE OF THE LOCKS WAS REQUIRED. THE RECORD INDICATES THAT YOU HAVE
BEEN PAID OVERTIME COMPENSATION FOR ANY WORK ACTUALLY PERFORMED IN
EXCESS OF YOUR REGULAR TOUR OF DUTY. YOUR PRESENT CLAIM IS FOR
ADDITIONAL COMPENSATION FOR THE TIME SPENT IN A STANDBY STATUS AT YOUR
RESIDENCE.
AS STATED IN THE SETTLEMENT DATED JULY 10, 1972, DISALLOWING YOUR
CLAIM, AUTHORITY FOR PAYING OVERTIME COMPENSATION TO WAGE BOARD
EMPLOYEES IS FOUND IN 5 U.S.C. 5544(A) WHICH PROVIDES IN PERTINENT PART
THAT -
"(A) AN EMPLOYEE WHOSE BASIC RATE OF PAY IS FIXED AND ADJUSTED FROM
TIME TO TIME IN ACCORDANCE WITH PREVAILING RATES BY A WAGE BOARD OR
SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE IS ENTITLED TO
OVERTIME PAY FOR OVERTIME WORK IN EXCESS OF 8 HOURS A DAY OR 40 HOURS A
WEEK. HOWEVER, AN EMPLOYEE SUBJECT TO THIS SUBSECTION WHO REGULARLY IS
REQUIRED TO REMAIN AT OR WITHIN THE CONFINES OF HIS POST OF DUTY IN
EXCESS OF 8 HOURS A DAY IN A STANDBY OR ON-CALL STATUS IS ENTITLED TO
OVERTIME PAY ONLY FOR HOURS OF DUTY, EXCLUSIVE OF EATING AND SLEEPING
TIME, IN EXCESS OF 40 A WEEK. ***"
THE BASIC REQUIREMENT ESTABLISHED FOR RECEIVING OVERTIME COMPENSATION
IS THE PERFORMANCE OF OVERTIME "WORK." IN ARMOUR & CO. V. WANTOCK, 323
U.S. 126, 133 (1944), THE SUPREME COURT, IN ORDER TO DETERMINE WHAT
CONSTITUTED "WORK," USED THE CRITERION OF WHETHER THE TIME IN QUESTION
WAS SPENT "*** PREDOMINANTLY FOR THE EMPLOYER'S BENEFIT OR FOR THE
EMPLOYEE'S ***" AND STATED THAT THIS WAS "*** DEPENDENT UPON ALL THE
CIRCUMSTANCES OF THE CASE." IN RAPP V. UNITED STATES, 167 CT. CL. 852
(1964), AND MOSS V. UNITED STATES, 173 CT. CL. 1169 (1965), THE COURT OF
CLAIMS CONSIDERED THE OVERTIME CLAIMS OF EMPLOYEES WHO PERFORMED STANDBY
DUTY AT THEIR HOMES, OUTSIDE OF REGULAR BUSINESS HOURS AND IN EXCESS OF
THE REGULAR 40-HOUR WORKWEEK. IN EACH CASE THE EMPLOYEE WAS REQUIRED TO
BE WITHIN HEARING DISTANCE OF HIS HOME TELEPHONE IN ORDER TO RECEIVE
CALLS AND TAKE APPROPRIATE ACTION.
IN EACH OF THOSE CASES THE COURT HELD THAT WHERE AN EMPLOYEE IS
ALLOWED TO STAND BY IN HIS OWN HOME WITH NO DUTIES TO PERFORM FOR HIS
EMPLOYER EXCEPT TO BE AVAILABLE TO ANSWER THE TELEPHONE, THE TIME SPENT
IN SUCH STANDBY CAPACITY DOES NOT AMOUNT TO "HOURS OF WORK" WITHIN THE
MEANING OF 5 U.S.C. 5542, RELATING TO OVERTIME COMPENSATION FOR OTHER
THAN WAGE BOARD EMPLOYEES.
WE NOTE THAT THE ABOVE CASES DID NOT INVOLVE STATUTORY WORDING SUCH
AS CONTAINED IN 5 U.S.C. 5544(A). HOWEVER, WE BELIEVE SUCH WORDING WAS
MERELY ADDED TO EXPRESS THE VARIOUS COURT HOLDINGS TO THE EFFECT THAT
WHILE OVERTIME COMPENSATION WAS PAYABLE FOR STANDBY TIME WITHIN THE
CONFINES OF AN EMPLOYEE'S OFFICIAL STATION, IT WAS NOT PAYABLE FOR
EATING AND SLEEPING TIME OCCURRING DURING THE PERIOD OF SUCH STANDBY
DUTY. IT IS OUR VIEW THAT THE ABOVE COURT HOLDINGS WITH RESPECT TO
STANDBY AT AN EMPLOYEE'S HOME, WITH NO REQUIREMENT FOR THE PERFORMANCE
OF DUTY OTHER THAN TO BE AVAILABLE, ARE FOR APPLICATION TO 5 U.S.C.
5544(A) AND THEREFORE OVERTIME COMPENSATION FOR SUCH STANDBY MAY NOT BE
PAID. THE FACT THAT YOUR HOME WAS LOCATED IN CLOSE PROXIMITY TO YOUR
DUTY STATION DOES NOT FORM A BASIS FOR A DIFFERENT CONCLUSION. CF.
DETLING V. UNITED STATES, 193 CT. CL. 125 (1970), WHEREIN AN EMPLOYEE
WAS CONFINED TO THE DREDGE ON WHICH HE WAS ASSIGNED TO DUTY.
ON THE BASIS OF THE FOREGOING THE ACTION OF OUR TRANSPORTATION AND
CLAIMS DIVISION DENYING YOUR CLAIM IS SUSTAINED.
B-176997, DEC 15, 1972
MILITARY PERSONNEL - QUARTERS ALLOWANCE - WAGE PRICE FREEZE
DECISION AFFIRMING PRIOR DENIAL OF THE CLAIM OF LT. EUGENE R.
FIDELL, USCGR, FOR INCREASED QUARTERS ALLOWANCE UNDER THE PROVISION OF
P.L. 92-129, 85 STAT. 348.
INCREASES IN BOTH MILITARY PAY AND ALLOWANCES AUTHORIZED BY PUBLIC
LAW 92-129 WERE SUBJECT TO THE WAGE-PRICE FREEZE AND NOT PAYABLE FOR ANY
PERIOD PRIOR TO NOVEMBER 14, 1971. B-176083, JULY 7, 1972, 52 COMP.
GEN. ___.
TO LT. EUGENE R. FIDELL:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 9, 1972, IN
WHICH YOU REQUEST REVIEW OF A SETTLEMENT BY OUR TRANSPORTATION AND
CLAIMS DIVISION DATED SEPTEMBER 7, 1972, WHICH DISALLOWED YOUR CLAIM FOR
INCREASED QUARTERS ALLOWANCE UNDER THE PROVISIONS OF THE ACT OF
SEPTEMBER 28, 1971, PUBLIC LAW 92-129, 85 STAT. 348, FOR THE PERIOD
OCTOBER 1, 1971, TO NOVEMBER 14, 1971.
IN BRIEF, YOU SAY THAT EXECUTIVE ORDER 11615, DATED AUGUST 15, 1971,
ISSUED UNDER THE AUTHORITY OF THE ECONOMIC STABILIZATION ACT OF 1970,
PUBLIC LAW 91-379, 84 STAT. 799, AS AMENDED, IMPOSED A 90-DAY
WAGE-PRICE FREEZE AND WHILE YOU ARE APPARENTLY WILLING TO RECOGNIZE THAT
THE PAY INCREASES PROVIDED BY PUBLIC LAW 92-129 ARE SUBJECT TO THE
90-DAY FREEZE, YOU SAY THAT SINCE A BASIC ALLOWANCE FOR QUARTERS IS NOT
A WAGE OR SALARY BUT RATHER IS A REIMBURSEMENT TO A MEMBER FOR MONIES
EXPENDED FOR QUARTERS WHICH HE MUST PROVIDE FOR HIMSELF WHEN THE
GOVERNMENT DOES NOT MAKE QUARTERS AVAILABLE TO HIM, YOU CONTEND THAT THE
ECONOMIC STABILIZATION ACT OF 1970, AS AMENDED, DOES NOT AUTHORIZE
FREEZING ALLOWANCES OR OTHER SIMILAR COMPENSATION.
IN THE ALTERNATIVE, YOU SAY THAT EVEN IF BASIC ALLOWANCES FOR
QUARTERS IS IN FACT A WAGE OR SALARY, SINCE PUBLIC LAW 92-129 WAS
ENACTED BY CONGRESS AFTER THE IMPOSITION OF THE WAGE-PRICE FREEZE BY
EXECUTIVE ORDER 11615, WITH AN EFFECTIVE DATE (OCTOBER 1, 1971) DURING
THE PENDENCY OF THAT FREEZE, AND SINCE NO STATUTORY REFERENCE WAS MADE
TO THE FREEZE IN THAT ACT, IT IN EFFECT OVERRODE THE EARLIER EXERCISE OF
EXECUTIVE AUTHORITY.
THE MATTER INVOLVED IN YOUR CLAIM WAS IN PART THE SUBJECT OF DECISION
B-176083, JULY 7, 1972 (52 COMP. GEN. ____), COPY ENCLOSED. IT WAS
CONCLUDED IN THAT DECISION, FOR REASONS STATED THEREIN, THAT INCREASES
IN BOTH MILITARY PAY AND ALLOWANCES AUTHORIZED BY PUBLIC LAW 92-129 WERE
SUBJECT TO THE WAGE-PRICE FREEZE AND NOT PAYABLE FOR ANY PERIOD PRIOR TO
NOVEMBER 14, 1971.
ACCORDINGLY, THE ACTION TAKEN BY OUR TRANSPORTATION AND CLAIMS
DIVISION ON YOUR CLAIM IS SUSTAINED.
B-177149, DEC 15, 1972
CIVILIAN PERSONNEL - U.S. DISTRICT COURTS - LAW CLERKS - PROMISED
PROMOTION
DECISION AFFIRMING PRIOR DENIAL OF THE CLAIM OF LAWRENCE R. METSCH,
FOR A SUM REPRESENTING THE DIFFERENCE BETWEEN THE SALARIES OF AN
ASSOCIATE LAW CLERK, JSP-11, AND SENIOR LAW CLERK, JSP-12, FOR THE
PERIOD SEPTEMBER 1 TO NOVEMBER 15, 1971.
CSC BULLETIN NO. 531-51 HAS NO APPLICATION TO LAW CLERKS OF FEDERAL
COURTS SINCE THEIR COMPENSATION IS FIXED BY THE DIRECTOR OF THE
ADMINISTRATIVE OFFICE OF THE U.S. COURTS. 28 U.S.C. 604(A)(5).
MOREOVER, A FEDERAL EMPLOYEE IS ONLY ENTITLED TO THE SALARY OF THE
POSITION TO WHICH HE IS OFFICIALLY APPOINTED, SEE E.G. BIELEC V. UNITED
STATES, 456 F.2D 690 (1972). FINALLY, THE DECISION IN 51 COMP. GEN.
525, IS NOT CONTROLLING HERE, SINCE THE PROMOTION OF LAW CLERKS IS A
MATTER WITHIN THE DISCRETION OF THE ADMINISTRATIVE OFFICE OF THE U.S.
COURTS AND IS NOT A STATUTORY RIGHT.
TO LAWRENCE R. METSCH:
THIS REFERS TO YOUR LETTER OF SEPTEMBER 21, 1972, IN WHICH YOU
REQUEST RECONSIDERATION OF THE SETTLEMENT OF OUR TRANSPORTATION AND
CLAIMS DIVISION DATED SEPTEMBER 13, 1972, DENYING YOUR CLAIM FOR A SUM
REPRESENTING THE DIFFERENCE BETWEEN THE SALARIES OF AN ASSOCIATE LAW
CLERK, JSP-11, AND SENIOR LAW CLERK, JSP-12, FOR THE PERIOD SEPTEMBER 1,
1971, TO NOVEMBER 15, 1971.
AS YOUR LETTER STATES AND THE RECORD SHOWS, JUDGE BRYAN SIMPSON, THE
CIRCUIT JUDGE FOR WHOM YOU CLERKED, PLANNED TO PROMOTE YOU FROM
ASSOCIATE LAW CLERK TO SENIOR LAW CLERK WHEN A VACANCY IN THAT POSITION
WAS SCHEDULED TO OCCUR ON SEPTEMBER 1, 1971. THE PROMOTION WAS,
HOWEVER, DELAYED AND THE REASON GIVEN FOR SUCH DELAY WAS THE THEN
CURRENT FREEZE ON THE SALARIES OF FEDERAL EMPLOYEES. THE ADMINISTRATIVE
OFFICE OF THE UNITED STATES COURTS SO ADVISED JUDGE SIMPSON BY LETTER OF
SEPTEMBER 7, 1971.
IT IS YOUR CONTENTION THAT ISSUANCE BY THE CIVIL SERVICE COMMISSION
(CSC) OF BULLETIN NO. 531-51 APPLYING PERTINENT PROVISIONS OF EXECUTIVE
ORDER 11615 TO WAGES AND SALARIES REGULATED BY THE CSC HAD THE EFFECT OF
MAKING YOUR RETROACTIVE PROMOTION MANDATORY. AS STATED IN YOUR CLAIM
DATED JULY 6, 1972, IT IS THE FOLLOWING SUBSECTION 1.C OF THAT BULLETIN
ON WHICH YOU RELY:
"C. PROMOTIONS
"PROMOTIONS TO POSITIONS OF GREATER RESPONSIBILITIES IN HIGHER GRADE
OR LEVEL ARE PERMITTED UNDER THE ORDER; AND PAY ON PROMOTION WILL BE
FIXED IN ACCORDANCE WITH APPLICABLE LAW AND REGULATION, INCLUDING AN
AGENCY'S HIGHEST PREVIOUS RATE REGULATIONS. IN THIS CONNECTION,
AGENCIES SHOULD KEEP IN MIND THE PROVISIONS OF OMB BULLETIN 72-4."
IT WAS POINTED OUT IN THE SETTLEMENT DATED SEPTEMBER 13, 1972, THAT
THIS PROVISION OF THE BULLETIN WAS PERMISSIVE AND, IN ANY EVENT, DID NOT
PROVIDE AUTHORITY FOR A RETROACTIVE PROMOTION.
IN ADDITION WE POINT OUT THAT, PURSUANT TO SUBSECTION 604(A)(5) OF
TITLE 28, UNITED STATES CODE, THE COMPENSATION OF LAW CLERKS OF FEDERAL
COURTS IS FIXED BY THE DIRECTOR OF THE ADMINISTRATIVE OFFICE OF THE
UNITED STATES COURTS SUBJECT TO LIMITATIONS CONTAINED IN THE ANNUAL
JUDICIARY APPROPRIATION ACT. (SEE TITLE IV, PUBLIC LAW 92-77, FOR THE
APPROPRIATION LIMITATION FOR THE 1972 FISCAL YEAR). THE CIVIL SERVICE
COMMISSION BULLETIN TO WHICH YOU REFER HAD NO APPLICATION TO LAW CLERKS
APPOINTED BY CIRCUIT JUDGES WHOSE COMPENSATION IS FIXED AS STATED ABOVE.
WITH RESPECT TO YOUR CONTENTION THAT YOU WERE ENTITLED TO A PROMOTION
BECAUSE A RECOMMENDATION HAD BEEN MADE FOR IT AND YOU WERE QUALIFIED FOR
A HIGHER GRADE, THE RECOMMENDATION MAY NOT BE VIEWED AS AN APPOINTMENT.
IT IS A WELL ESTABLISHED PRINCIPLE OF LAW THAT AN EMPLOYEE OF THE
FEDERAL GOVERNMENT IS ENTITLED ONLY TO THE SALARY OF THE POSITION TO
WHICH HE HAS BEEN OFFICIALLY APPOINTED.
SEE, E.G., BIELEC V. UNITED STATES, 456 F.2D 690, 696 (1972), AND
CASES CITED THEREIN. YOU WERE NOT OFFICIALLY APPOINTED TO THE HIGHER
POSITION UNTIL NOVEMBER 15, 1971.
YOUR REFERENCE TO A DECISION OF THE COMPTROLLER GENERAL "THAT
EXECUTIVE ORDER 11615 COULD NOT VALIDLY OVERRIDE THE PROVISIONS OF TITLE
5, UNITED STATES CODE, SECTION 5335" APPARENTLY REFERS TO OUR DECISION
B-173976, 51 COMP. GEN. 525, FEBRUARY 23, 1972. SECTION 5335, SUPRA,
GOVERNS THE AWARD OF PERIODIC STEP INCREASES TO EMPLOYEES OF THE
EXECUTIVE BRANCH OF THE GOVERNMENT OCCUPYING POSITIONS CLASSIFIED IN THE
GENERAL SCHEDULE. OUR DECISION, 51 COMP. GEN. 525, SUPRA, PROVIDED THE
CIVIL SERVICE COMMISSION WITH OUR INTERPRETATION OF THE APPLICABILITY OF
SUBSECTION 203(C) OF THE ECONOMIC STABILIZATION ACT OF 1970 AS AMENDED
BY THE ECONOMIC STABILIZATION ACT AMENDMENTS OF 1971 (PUBLIC LAW 92-210)
TO, INTER ALIA, WITHIN-GRADE INCREASES FOR GENERAL SCHEDULE EMPLOYEES
DURING THE PERIOD COVERED BY EXECUTIVE ORDER 11615. WE FAIL TO SEE HOW
THAT ASPECT OF THE DECISION COULD BE HELD TO BE "BINDING AUTHORITY IN
SUPPORT OF" YOUR "POSITION IN THIS MATTER" SINCE YOUR PROMOTION WAS A
MATTER WITHIN THE DISCRETION OF THE ADMINISTRATIVE OFFICE OF THE UNITED
STATES COURTS AND NOT A STATUTORY RIGHT.
FOR THESE REASONS WE FIND NO MERIT IN YOUR CONTENTIONS AND HEREBY
AFFIRM THE ACTION OF OUR TRANSPORTATION AND CLAIMS DIVISION.
B-177287, DEC 15, 1972
CONTRACT - MISTAKE IN BID - PRICE REFORMATION
DECISION DENYING THE REQUEST OF FAWCETT PRINTING CORPORATION FOR AN
INCREASE IN THE CONTRACT PRICE BECAUSE OF AN ALLEGED MISTAKE IN BID ON
WHICH A CONTRACT ISSUED BY THE GOVERNMENT PRINTING OFFICE FOR THE
PRODUCTION OF AIR FORCE PAMPHLETS IS BASED.
THERE IS NO BASIS TO INCREASE THE CONTRACT PRICE WHERE THE
CONTRACTING OFFICER HAD NO REASON TO SUSPECT ERROR, BECAUSE THE BID WAS
IN LINE WITH OTHER BIDS RECEIVED AND WITH THE PRICE PREVIOUSLY PAID FOR
THE IDENTICAL ITEMS.
TO MR. HARRY J. HUMPHREY:
REFERENCE IS MADE TO AN UNDATED LETTER FROM THE GENERAL COUNSEL WHICH
WAS RECEIVED BY OUR OFFICE ON OCTOBER 18, 1972, REQUESTING A DECISION AS
TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE FAWCETT
PRINTING CORPORATION TO HAVE BEEN MADE IN ITS BID UPON WHICH PURCHASE
ORDER NO. 67533 IS BASED.
THE GOVERNMENT PRINTING OFFICE (GPO) REQUESTED BIDS UNDER JACKET NO.
463-531 FOR THE PRODUCTION OF 1,000,000 AIR FORCE BOOKLETS. THE FAWCETT
PRINTING CORPORATION SUBMITTED A BID DATED MAY 10, 1972, OFFERING TO
FURNISH THE BOOKLETS AT A PRICE OF $55,773. THE NINE OTHER BIDS ON THE
JOB RANGED FROM $58,863 TO $85,000. THE BID OF FAWCETT WAS ACCEPTED ON
MAY 16, 1972.
BY LETTER DATED SEPTEMBER 15, 1972, FAWCETT ADVISED THAT IT HAD MADE
AN ERROR IN ITS BID IN THAT IT HAD FAILED TO INCLUDE THE COST OF THE
COVER STOCK IN ITS BID PRICE FOR THE BOOKLETS. THE CORPORATION STATED
THAT IT HAD SUFFERED A LOSS OF $9,787.42 IN PERFORMING THE CONTRACT AND
IT REQUESTED THAT IT BE GRANTED RELIEF FROM SUCH LOSS. IN SUPPORT OF
ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS ESTIMATE SHEET
AND CERTAIN INVOICES. HOWEVER, WE FIND NO BASIS TO INCREASE THE
CONTRACT PRICE AS REQUESTED SINCE THE CONTRACTING OFFICER MADE AWARD
WITHOUT NOTICE OF POSSIBLE ERROR. THE CONTRACTING OFFICER HAD NO REASON
TO SUSPECT ERROR SINCE FAWCETT'S BID WAS IN LINE WITH THE OTHER BIDS
RECEIVED AND WITH THE PRICE PREVIOUSLY PAID FOR A SMALLER QUANTITY OF
IDENTICAL BOOKLETS.
ACCORDINGLY, FAWCETT'S REQUEST FOR AN INCREASE IN ITS CONTRACT PRICE
MUST BE DENIED.
B-173976, DEC 14, 1972
WAGE BOARD EMPLOYEES - RETROACTIVE INCREASE
DECISION AS TO WHETHER THE WAGE SCHEDULE MADE EFFECTIVE ON FEBRUARY
27, 1972, BY THE INTERDEPARTMENTAL LITHOGRAPHIC WAGE BOARD, INCREASING
EMPLOYEE SALARIES IN GRADES 26 THROUGH 32, MAY BE RETROACTIVELY
EFFECTIVE UNDER THE PREVAILING RATE EQUALIZATION ADJUSTMENT ACT OF 1972.
SINCE RETROACTIVE IMPLEMENTATION OF THE NEW WAGE RATES WAS NOT
AUTHORIZED AT THE TIME THEY WERE EFFECTED, RESULTING IN A LOSS OF PAY
FOR THE AGGRIEVED EMPLOYEES, THE COMP. GEN. AGREES THAT THE 5.5 PERCENT
INCREASES MAY BE ADDED RETROACTIVELY ACCORDING TO THE PREVAILING RATE
EQUALIZATION ADJUSTMENT ACT OF 1972.
TO MR. ROBERT E. HAMPTON:
WE REFER TO YOUR LETTER OF SEPTEMBER 7, 1972, BY WHICH YOU REQUEST
OUR DECISION WHETHER THE WAGE SCHEDULE MADE EFFECTIVE ON FEBRUARY 27,
1972, BY THE INTERDEPARTMENTAL LITHOGRAPHIC WAGE BOARD (ILWB) WHICH
INCREASED THE RATES PAYABLE TO EMPLOYEES IN WAGE GRADES 26 THROUGH 32 OF
THE ILWB WAGE SCHEDULE MAY BE RETROACTIVELY EFFECTIVE UNDER THE
PROVISIONS OF SECTION 2 OF THE PREVAILING RATE EQUALIZATION ADJUSTMENT
ACT OF 1972, PUBLIC LAW 92-298, 86 STAT. 146.
ON JANUARY 11, 1972, THE PRESIDENT ISSUED A DIRECTIVE REVOKING THE
SUSPENSION OF WAGE SURVEYS LEADING TO WAGE RATE INCREASES FOR GOVERNMENT
BLUE COLLAR EMPLOYEES WHICH HAD BEEN IMPOSED SEPTEMBER 1, 1971, AS PART
OF THE WAGE AND PRICE STABILIZATION POLICIES ANNOUNCED AUGUST 15, 1971.
THAT DIRECTIVE ALSO PROVIDED FOR THE EXPEDITIOUS PERFORMANCE OF WAGE
SURVEYS WHICH HAD BEEN DELAYED UNDER THE SEPTEMBER 1 DIRECTIVE SO THAT
NEW WAGE SCHEDULES COULD BE ISSUED AS SOON AS POSSIBLE. PURSUANT
THERETO THE ILWB ORDERED A WAGE SURVEY ON JANUARY 18, 1972, WHICH
RESULTED IN THE ISSUANCE OF A NEW WAGE SCHEDULE ON FEBRUARY 11, 1972,
EFFECTIVE FEBRUARY 13. THAT NEW WAGE SCHEDULE IMPLEMENTED WAGE
INCREASES WHICH WOULD HAVE BECOME EFFECTIVE IN NOVEMBER 1971, BUT FOR
THE PRESIDENT'S WAGE STABILIZATION POLICIES. WE ASSUME THE INCREASES OF
FEBRUARY 13, 1972, WERE MADE EFFECTIVE AS OF NOVEMBER 1971, UPON
ENACTMENT OF PUBLIC LAW 92-298.
THE INFORMATION PROVIDED SHOWS, HOWEVER, THAT FULL DATA WITH RESPECT
TO THE WAGE RATES FOR THE HIGHER GRADE LEVELS - WAGE GRADES 26 THROUGH
32 - WAS NOT COMPLETE WITH THE RESULT THAT WAGE INCREASES OF 5.5 PERCENT
WERE AUTHORIZED FOR WAGE GRADES 1 THROUGH 25 WHILE LESSER INCREASES OF 2
TO 3 PERCENT WERE AUTHORIZED FOR THE HIGHER GRADES. THE ILWB ISSUED THE
FEBRUARY 13 WAGE SCHEDULE TO PROVIDE FULL INCREASES AS EXPEDITIOUSLY AS
POSSIBLE FOR THE MAJORITY OF THE EMPLOYEES COVERED, WITH THE
UNDERSTANDING THAT ADDITIONAL INCREASES WOULD BE FORTHCOMING FOR THE
HIGHER GRADES AS SOON AS THE WAGE DATA WAS AVAILABLE FROM THE
NEGOTIATIONS THEN UNDER WAY IN THE GOVERNMENT PRINTING OFFICE. IN THAT
CONNECTION WE NOTE THAT RETROACTIVE IMPLEMENTATION OF THE NEW WAGE RATES
WAS NOT AUTHORIZED AT THE TIME THEY WERE EFFECTED, THUS, ANY DELAY BY
THE ILWB WOULD HAVE RESULTED IN A LOSS OF PAY FOR THE EMPLOYEES
CONCERNED BUT FOR THE LATER ENACTMENT OF PUBLIC LAW 92-298 ON MAY 17,
1972.
THE LACK OF DATA WITH RESPECT TO WAGE RATES FOR THE HIGHER GRADES
RESULTED FROM THE FACT THE GOVERNMENT PRINTING OFFICE (GPO) WHICH
EMPLOYS MOST OF THE PERSONNEL IN TRADES COVERED BY GRADES 26 THROUGH 32
WAS STILL NEGOTIATING A FINAL WAGE SETTLEMENT WITH THE UNIONS INVOLVED.
AFTER SETTLEMENT WAS REACHED ON THE GPO CONTRACT ON FEBRUARY 20, 1972,
WHICH PROVIDED AN AVERAGE 5.5 PERCENT INCREASE FOR THE TRADES IN
QUESTION THE ILWB REVISED ITS WAGE SCHEDULE TO REFLECT A SIMILAR
INCREASE FOR GRADES 26 THROUGH 32. THIS NEW SCHEDULE WAS EFFECTIVE
FEBRUARY 27, 1972. WE UNDERSTAND THAT THE GPO RATES ESTABLISHED UNDER
THE FEBRUARY 20 CONTRACT WERE RETROACTIVELY EFFECTIVE TO THE DATES
DURING THE PERIOD SEPTEMBER THROUGH NOVEMBER 1971, ON WHICH THEY WOULD
HAVE BEEN IMPLEMENTED BUT FOR THE PRESIDENT'S WAGE STABILIZATION
POLICIES.
SECTION 2 OF PUBLIC LAW 92-298 PROVIDES IN PERTINENT PART:
"*** (A) WAGE SCHEDULE ADJUSTMENT FOR EMPLOYEES OF THE GOVERNMENT OF
THE UNITED STATES WHOSE PAY IS FIXED AND ADJUSTED FROM TIME TO TIME IN
ACCORDANCE WITH PREVAILING RATES -
"(2) IF BASED ON A WAGE SURVEY WHICH HAD BEEN SCHEDULED TO BE MADE
DURING THE PERIOD BEGINNING ON SEPTEMBER 1, 1971, AND ENDING ON JANUARY
12, 1972, AND WHICH WAS ORDERED TO BE MADE ON OR AFTER JANUARY 13, 1972:
SHALL BE EFFECTIVE ON THE DATE ON WHICH SUCH WAGE SCHEDULE ADJUSTMENT
WOULD HAVE BEEN EFFECTIVE UNDER SECTION 5343 OF TITLE 5, UNITED STATES
CODE, HAD THE FISCAL YEAR 1972 SCHEDULE FOR WAGE SURVEYS FOR SUCH
EMPLOYEES BEEN FOLLOWED."
UNDER THE ABOVE ACT, IT SEEMS CLEAR THAT HAD THE FULL INCREASES FOR
THE HIGHER GRADE EMPLOYEES BEEN DELAYED UNTIL FEBRUARY 27, 1972, SUCH
INCREASES WOULD HAVE BEEN RETROACTIVE IN THE MANNER PROVIDED THEREIN.
THEREFORE, WE SEE NO REASON WHY THE ADDITIONAL INCREASES UP TO THE 5.5
PERCENT MAY NOT LIKEWISE BE REGARDED AS RETROACTIVE TO THE SAME EXTENT.
B-175711, DEC 14, 1972
REIMBURSEMENT - IMPROPER FILING
DECISION SUSTAINING THE PRIOR DISALLOWANCE OF A CLAIM BY JOHN A.
ZIMMERMAN FOR $711.36 AS PORT WATCH PAY.
THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061, WHICH SPECIFIES THE OFFICE
IN WHICH THE CLAIM MUST BE RECEIVED, PRECLUDES THE GAO FROM WAIVING OR
DISREGARDING THE PROVISIONS OF THE STATUTE. ACCORDINGLY, THE CLAIM IS
AGAIN DISALLOWED.
TO MR. JOHN A. ZIMMERMAN:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 22, 1972,
WHEREIN YOU APPEAL THE SETTLEMENT OF SEPTEMBER 11, 1972, OF YOUR CLAIM
Z-2471542 BY OUR TRANSPORTATION AND CLAIMS DIVISION WITH RESPECT TO THE
AMOUNT OF $711.36 WHICH WAS DISALLOWED ON THE GROUND OF BEING BARRED BY
THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061.
YOU NOW CLAIM THAT YOU FILED YOUR CLAIM ON SEPTEMBER 9, 1971,
IMMEDIATELY AFTER THE COURT RULED THAT CERTAIN EMPLOYEES ARE ENTITLED TO
PORT WATCH PAY.
THE RECORD SHOWS THAT YOU FILED YOUR CLAIM ON SEPTEMBER 9, 1971, WITH
THE DEPARTMENT OF THE ARMY, NEW ORLEANS DISTRICT, CORPS OF ENGINEERS,
NEW ORLEANS, LOUISIANA, AND THAT IT WAS FORWARDED THROUGH HQDA
(DAEN-ECF-A), WASHINGTON, D. C., BEING RECEIVED IN THIS OFFICE ON
JANUARY 21, 1972.
IN THAT RESPECT WE POINT OUT THAT THE ACT OF OCTOBER 9, 1940, IS
EXPLICIT AS TO THE OFFICE IN WHICH THE CLAIM MUST BE RECEIVED AND WE
HAVE NO AUTHORITY TO WAIVE OR DISREGARD THE PROVISIONS OF THE STATUTE.
SEE B-175711, OCTOBER 12, 1972, COPY ENCLOSED.
ACCORDINGLY, THE ACTION TAKEN BY THE TRANSPORTATION AND CLAIMS
DIVISION IN DISALLOWING THAT PORTION OF YOUR CLAIM WHICH ACCRUED PRIOR
TO 10 YEARS BEFORE THE CLAIM WAS RECEIVED HERE IS HEREBY SUSTAINED.
B-176276, DEC 14, 1972
CONTRACTS - PRODUCT DEFICIENCIES AT DELIVERY - INADEQUATE PREAWARD
SURVEY
DECISION CONCERNING THE AWARD OF CONTRACTS TO DESERT LABORATORIES,
INC., CENTURY HONE DIVISION, UNDER TWO IFB'S ISSUED BY THE U.S. NAVY
PURCHASING OFFICE, WASHINGTON, D.C., FOR SINGLE SPINDLE, VERTICAL,
AUTOMATIC, HONING MACHINES.
THE DEFENSE CONTRACT ADMINISTRATION SERVICES HAS BEEN MADE AWARE OF
THE PROBLEMS, AND DESERT LABS HAS AGREED TO MAKE THE NECESSARY
CORRECTIONS TO COMPLY WITH THE CONTRACT REQUIREMENTS. SINCE DCAS HAS
BEEN REQUESTED TO APPLY TIGHTER INSPECTION PARAMETERS TO PERFORMANCE
INSPECTIONS, IT IS ANTICIPATED THAT FUTURE PREAWARD SURVEYS OF DESERT
LABS WILL BE MORE RELIABLE.
TO BARNES DRILL COMPANY:
REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 14 AND NOVEMBER 7, 1972,
WITH ENCLOSURES, CONCERNING THE AWARD OF CONTRACTS TO DESERT
LABORATORIES, INCORPORATED, CENTURY HONE DIVISION (DESERT LABS), UNDER
INVITATION FOR BIDS (IFB) NOS. N00600-71-B-0293, ISSUED MARCH 29, 1971,
AND N00600-72-B-0102, ISSUED DECEMBER 14, 1971, BY THE UNITED STATES
NAVY PURCHASING OFFICE, WASHINGTON, D. C.
YOU HAVE CONTENDED THAT DESERT LABS IS NOT CAPABLE OF MANUFACTURING
THE MACHINE REQUIRED AND THAT THE MACHINE INSTALLED AT THE HUNTERS POINT
NAVAL SHIPYARD UNDER THE CONTRACT AWARDED PURSUANT TO THE FIRST
MENTIONED SOLICITATION DID NOT MEET THE SPECIFICATIONS.
BOTH IFBS WERE ISSUED FOR A SINGLE SPINDLE, VERTICAL, AUTOMATIC,
HONING MACHINE. AWARD UNDER THE MARCH 1971 SOLICITATION WAS MADE TO
DESERT LABS ON MAY 4, 1971. BETWEEN NOVEMBER 22 AND 24, 1971,
GOVERNMENT PERSONNEL, INCLUDING THE DEFENSE CONTRACT ADMINISTRATION
SERVICES (DCAS) QUALITY ASSURANCE REPRESENTATIVE, VISITED DESERT LABS IN
ORDER TO MAKE A VISUAL INSPECTION AND WITNESS TESTS OF THE HONING
MACHINE. IT HAS BEEN ADMINISTRATIVELY REPORTED THAT THERE WERE CERTAIN
DISCREPANCIES NOTED AND THE TESTING WAS NOT COMPLETED. SUBSEQUENTLY,
THE DISCREPANCIES WERE CORRECTED, THE TEST COMPLETED, AND THE MACHINE
ACCEPTED IN DECEMBER 1971. UPON DELIVERY OF THE HONING MACHINE, THE
PROCURING ACTIVITY TESTED IT AND COMPILED A LIST OF "26 DISCREPANCIES,"
OF WHICH "10 DISCREPANCIES" WERE CONSIDERED TO BE IN VIOLATION OF THE
CONTRACT SPECIFICATIONS. THE OTHER "16 DISCREPANCIES" WERE NOT
CONSIDERED VIOLATIONS OF THE CONTRACT'S REQUIREMENTS BECAUSE OF THE
GENERAL NATURE OF SPECIFICATION MIL-H-80003A. IT IS REPORTED THAT THE
CONTRACTOR HAS AGREED TO MAKE THE NECESSARY CORRECTIONS TO COMPLY WITH
THE CONTRACT REQUIREMENTS.
AS A RESULT OF THE SITUATION WHICH DEVELOPED HERE, THE NAVY
PURCHASING OFFICE, WASHINGTON, D. C., ORDERED A THOROUGH REVIEW AND
NECESSARY REVISIONS TO THE SPECIFICATION IN ORDER THAT IT WILL MORE
FULLY REFLECT THE MINIMUM NEEDS OF THE NAVY. FURTHER, SIGNIFICANT
CHANGES ARE TO BE REPORTED TO THE DIRECTOR, DEFENSE INDUSTRIAL PLANT
EQUIPMENT CENTER, IN ORDER THAT ALL OF THE SERVICES MAY BENEFIT FROM THE
NPO FINDINGS. ALSO, THE DCAS OFFICE RESPONSIBLE FOR THE INITIAL
INSPECTION AND ACCEPTANCE OF THE MACHINE HAS BEEN ADVISED OF THE
SITUATION AND REQUESTED TO TIGHTEN UP ITS INSPECTION PROCEDURES.
YOU ALSO CONTEND THAT SINCE DESERT LABS IS NOT CAPABLE OF BUILDING
HONING MACHINERY, A SIMILAR SITUATION WILL OCCUR UNDER A RECENTLY
AWARDED CONTRACT TO DESERT LABS, UNDER IFB N006000-72-B-0102, ISSUED
DECEMBER 14, 1971. PRIOR TO THE AWARD, THE CONTRACTING OFFICER
REQUESTED THAT A PREAWARD SURVEY BE CONDUCTED. THE PREAWARD SURVEY WAS
COMPLETED MARCH 10, 1972, AND AWARD TO DESERT LABS WAS RECOMMENDED. THE
CONTRACTING OFFICER REVIEWED THE REPORT AND DETERMINED THAT DESERT LABS
WAS RESPONSIBLE AND ENTITLED TO THE AWARD AS THE LOW RESPONSIVE AND
RESPONSIBLE BIDDER.
THE PREAWARD SURVEY WAS CONDUCTED BY THE SAME DCAS OFFICE WHICH
INITIALLY INSPECTED AND ACCEPTED THE MACHINE UNDER DESERT LABS' EARLIER
CONTRACT AND ITS AFFIRMATIVE RECOMMENDATION WAS MADE PRIOR TO DISCOVERY
OF THE "26 DISCREPANCIES." NOW THAT THE DCAS HAS BEEN APPRISED OF THE
CURRENT SITUATION AND REQUESTED TO APPLY TIGHTER INSPECTION PARAMETERS
TO PERFORMANCE INSPECTIONS, PARTICULARLY WITH RESPECT TO THE SUBJECT
CONTRACT, IT IS ANTICIPATED THAT SUBSEQUENT PREAWARD SURVEYS OF DESERT
LABS, AND OTHER PROSPECTIVE CONTRACTORS, WILL BE MORE RELIABLE.
WE THANK YOU FOR BRINGING THIS MATTER TO THE ATTENTION OF THIS
OFFICE.
B-176956, DEC 14, 1972
CIVILIAN EMPLOYEE - TRAVEL REIMBURSEMENT - PER DIEM IN LIEU OF
SUBSISTENCE
DECISION ALLOWING THE CERTIFICATION FOR PAYMENT OF A VOUCHER IN THE
AMOUNT OF $261.25 TO ROSS A. WRITER FOR PER DIEM IN LIEU OF SUBSISTENCE
INCIDENT TO A CHANGE OF STATION.
A CLAIM FOR ADDITIONAL PER DIEM AFTER REIMBURSEMENT OF THE COMMUTED
RATE FOR TRANSPORTATION OF HOUSEHOLD GOODS, BECAUSE OF DELAYS ENROUTE,
INVOLVING VANDALISM TO THE FAMILY PASSENGER VEHICLE AND PERSONAL INJURY,
IS NOT PROVIDED FOR IN OMB CIRCULAR NO. A-56. HOWEVER, ADDITIONAL PER
DIEM WILL BE ALLOWED UNDER SECTION 6.5B OF THE STANDARDIZED GOVERNMENT
TRAVEL REGULATIONS WHICH PERMITS REIMBURSEMENT FOR LEAVE TAKEN BECAUSE
OF SICKNESS OR INJURY.
TO MR. W. P. HELMER:
REFERENCE IS MADE TO YOUR LETTER OF JULY 12, 1972, WITH ENCLOSURES,
REFERENCE 6540, REQUESTING OUR DECISION WHETHER YOU MAY CERTIFY THE
ENCLOSED VOUCHER IN THE AMOUNT OF $261.25 AS RECLAIMED BY MR. ROSS A.
WRITER REPRESENTING PER DIEM IN LIEU OF SUBSISTENCE INCIDENT TO A CHANGE
OF STATION.
INCIDENT TO A TRANSFER OF STATION FROM WEST CHESTER, PENNSYLVANIA, TO
SAN FRANCISCO, CALIFORNIA, MR. WRITER TRANSPORTED HIS HOUSEHOLD EFFECTS
BY A RENTED TRUCK AND APPARENTLY HIS IMMEDIATE FAMILY FOLLOWED IN A
PRIVATELY OWNED AUTOMOBILE. MR. WRITER HAS BEEN REIMBURSED THE COMMUTED
RATE FOR THE TRANSPORTATION OF HIS HOUSEHOLD GOODS IN ACCORDANCE WITH
SECTION 6.3 OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56. HE IS
NOT QUESTIONING REIMBURSEMENT OF THE COMMUTED RATE FOR THE
TRANSPORTATION OF THE HOUSEHOLD GOODS BUT IS CLAIMING ADDITIONAL PER
DIEM IN LIEU OF SUBSISTENCE FOR HIMSELF AND IMMEDIATE FAMILY BECAUSE OF
CERTAIN DELAYS EN ROUTE, ONE OF WHICH INVOLVED VANDALISM, NAMELY, A
WINDSHIELD BEING KNOCKED OUT OF THE PASSENGER VEHICLE CARRYING HIS
IMMEDIATE FAMILY, AND THE LOSS OF ONE DAY DUE TO AN INJURY. APPARENTLY
THE WIFE DRIVING THE PASSENGER VEHICLE SLOWED HER TRAVEL TO THAT OF THE
TRUCK BEING DRIVEN BY THE HUSBAND WHICH ALSO CONTRIBUTED TO THE DELAY.
TRAVEL AUTHORIZATION DATED AUGUST 5, 1971, AUTHORIZING THE TRAVEL IN
QUESTION CONTAINED THE FOLLOWING STATEMENT:
"TRAVEL TIME WILL BE ALLOWED WITHOUT CHARGE TO LEAVE BASED ON
REASONABLE DRIVING TIME, THAT IS, FROM 300 TO 400 MILES PER DAY, GIVING
CONSIDERATION TO INFLUENCING FACTORS, SUCH AS GEOGRAPHIC TERRAIN,
WEATHER AND SEASON. LEAVE (ANNUAL, OR WITHOUT PAY AS APPROPRIATE) WILL
BE CHARGED FOR EXCESS TRAVEL TIME."
SECTION 2.3D(2) OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO.
A-56, REVISED AUGUST 17, 1971, PROVIDES AS FOLLOWS:
"MAXIMUM ALLOWANCES BASED ON TOTAL DISTANCE. PER DIEM ALLOWANCES
WILL BE PAID ON THE BASIS OF THE ACTUAL TIME USED TO COMPLETE THE TRIP
BUT SUCH ALLOWANCES MAY NOT EXCEED AN AMOUNT COMPUTED ON THE BASIS OF A
MINIMUM DRIVING DISTANCE PER DAY WHICH IS PRESCRIBED AS REASONABLE BY
THE AUTHORIZING OFFICIAL AND IS NOT LESS THAN AN AVERAGE OF 300 MILES
PER CALENDAR DAY."
THE ABOVE REGULATION FAILS TO CONTAIN ANY PROVISION WHICH WOULD
PERMIT PAYMENT OF AN INCREASED ALLOWANCE BECAUSE OF EXTENUATING
CIRCUMSTANCES, SUCH AS PRESENTED IN THIS CASE. HOWEVER, WE NOTE THAT
SECTION 6.5B OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS DOES
PERMIT THE CONTINUATION OF PER DIEM TO A TRAVELER WHO TAKES LEAVE OF
ABSENCE OF ANY KIND BECAUSE OF SICKNESS OR INJURY. WE ASSUME MR. WRITER
WOULD HAVE BEEN ENTITLED TO SICK LEAVE FOR THE ONE DAY HE INDICATES THAT
HE WAS DELAYED BECAUSE OF A CUT ON HIS HAND REQUIRING EMERGENCY
TREATMENT INCLUDING SEVERAL STITCHES. IN VIEW THEREOF, WE WOULD NOT
OBJECT TO THE ALLOWANCE OF ADDITIONAL PER DIEM IN LIEU OF SUBSISTENCE TO
THE EXTENT OF ONE DAY.
ACCORDINGLY, THE VOUCHER IS RETURNED HEREWITH FOR HANDLING IN
ACCORDANCE WITH THE ABOVE.
B-176982, DEC 14, 1972
CIVILIAN EMPLOYEE - REIMBURSEMENT - ERRONEOUS RELIANCE ON UNAUTHORIZED
ACTS OF GOVERNMENT EMPLOYEES
DECISION SUSTAINING THE PRIOR DISALLOWANCE OF A CLAIM FOR TRAVEL
EXPENSES, SHIPMENT OF HOUSEHOLD GOODS AND TEMPORARY QUARTERS SUBSISTENCE
EXPENSES IN CONNECTION WITH CLIMANT'S EMPLOYMENT AT THE NAVAL AIR
STATION, ALAMEDA, CALIF.
THE CLAIM, ORIGINALLY FILED ON THE ERRONEOUS UNDERSTANDING THAT THE
VACANT POSITION WAS IN A MANPOWER SHORTAGE CATEGORY, CANNOT BE SUSTAINED
ON THE GROUNDS OF SELF-DETRIMENT DUE TO RELIANCE UPON ADMINISTRATIVE
ERROR. A LONG SERIES OF CASES, BEGINNING WITH HART V. UNITED STATES, 95
U.S. 316 (1877), HAS HELD THAT THE GOVERNMENT CAN NEITHER BE BOUND NOR
ESTOPPED BY THE UNAUTHORIZED ACTS OF ITS AGENTS. ALSO, THE COMP. GEN.
CONCURS WITH THE NAVY'S DETERMINATION THAT THE NEW EMPLOYMENT MAY NOT BE
REGARDED AS A TRANSFER FOR THE CONVENIENCE OF THE GOVERNMENT SINCE THE
CLAIMANT SOUGHT EMPLOYMENT AT ALAMEDA FOR PERSONAL REASONS.
TO MR. GEORGE M. ANDRICOS:
WE REFER TO YOUR LETTER OF AUGUST 14, 1972, REQUESTING
RECONSIDERATION OF THE DENIAL BY OUR TRANSPORTATION AND CLAIMS
DIVISION'S SETTLEMENT CERTIFICATE DATED AUGUST 10, 1972, OF YOUR CLAIM
FOR TRAVEL EXPENSES, SHIPMENT OF HOUSEHOLD GOODS AND TEMPORARY QUARTERS
SUBSISTENCE EXPENSES IN CONNECTION WITH REPORTING TO DUTY AS A NEW
EMPLOYEE OF THE DEPARTMENT OF THE NAVY, NAVAL AIR STATION, ALAMEDA,
CALIFORNIA.
THE CIRCUMSTANCES WHICH GAVE RISE TO YOUR CLAIM ARE SET FORTH IN THE
SETTLEMENT CERTIFICATE AND WILL NOT BE REPEATED HERE IN DETAIL.
ESSENTIALLY WHAT OCCURRED IS THAT YOU WERE AUTHORIZED THE EXPENSES WHICH
YOU ARE NOW CLAIMING UPON THE ERRONEOUS UNDERSTANDING OF DEPARTMENT OF
THE NAVY PERSONNEL THAT THE POSITION FOR WHICH YOU WERE APPOINTED WAS IN
A MANPOWER SHORTAGE CATEGORY. IN FACT THE POSITION WAS NOT IN A
MANPOWER SHORTAGE CATEGORY AND THERE IS THEREFORE NO AUTHORITY FOR
PAYMENT OF YOUR CLAIM AS A NEW APPOINTEE FOR RELOCATION EXPENSES.
YOU NOW REQUEST, NOTWITHSTANDING THAT LACK OF AUTHORITY, THAT
CONSIDERATION BE GIVEN TO YOUR CLAIM ON THE BASIS THAT YOU RELIED TO
YOUR DETRIMENT UPON THE ADMINISTRATIVE ERROR. WE RECOGNIZE THAT YOU NO
DOUBT DID RELY UPON ADVICE GIVEN IN THE DEPARTMENT OF THE NAVY'S LETTER
OF NOVEMBER 8, 1971, THAT REIMBURSEMENT FOR CERTAIN OF YOUR FAMILY'S
RELOCATION EXPENSES WOULD BE MADE. UNFORTUNATELY, HOWEVER, SUCH
RELIANCE IS NOT A BASIS UPON WHICH PAYMENT OF APPROPRIATED FUNDS MAY BE
DISBURSED IN THE ABSENCE OF PROPER LEGAL AUTHORITY FOR SUCH PAYMENT.
THE WELL ESTABLISHED RULE OF LAW IN THIS REGARD IS THAT ANYONE
ENTERING INTO AN ARRANGEMENT WITH THE GOVERNMENT TAKES THE RISK OF
HAVING ASCERTAINED THAT THE AGENT WITH WHOM HE DEALS AND WHO PURPORTS TO
ACT FOR THE GOVERNMENT STAYS WITHIN THE LIMITS OF HIS AUTHORITY,
INASMUCH AS THE GOVERNMENT CAN BE NEITHER BOUND NOR ESTOPPED BY THE
UNAUTHORIZED ACTS OF ITS AGENTS. HART V. UNITED STATES, 95 U.S. 316
(1877); PINE RIVER LOGGING CO. V. UNITED STATES, 186 U.S. 279 (1902);
UTAH POWER AND LIGHT CO. V. UNITED STATES, 243 U.S. 389 (1917); SUTTON,
TRUSTEE OF ESTATE OF HILLSBORO DREDGING COMPANY, BANKRUPT V. UNITED
STATES, 256 U.S. 575 (1921); WILBER NATIONAL BANK OF ONEONTA,
ADMINISTRATOR V. UNITED STATES, 294 U.S. 120 (1935); FEDERAL CROP
INSURANCE CORPORATION V. MERRILL, 332 U.S. 380 (1947). THIS RULE
PERTAINS AS A MATTER OF PUBLIC POLICY FOR THE PROTECTION OF PUBLIC
FUNDS. WESTERN PENNSYLVANIA HOROLOGICAL INSTITUTE, INC. V. UNITED
STATES, 146 CT. CL. 540 (1959); CALIFORNIA-PACIFIC UTILITIES COMPANY V.
UNITED STATES, 194 CT. CL. 703 (1971); BLAKE CONSTRUCTION COMPANY, INC.
V. UNITED STATES, 296 F.2D 393 (1961). ITS JUSTIFICATION LIES IN PART
IN THE FACT THAT AGENTS OF THE GOVERNMENT HAVE KNOWN AND LIMITED POWERS
EXPLICITLY DEFINED BY PUBLIC INSTRUMENTS SUCH AS STATUTES, EXECUTIVE
ORDERS AND REGULATIONS. UNITED STATES V. MILLSAP 208 F. SUPP. 511
(1962); BRUBAKER V. UNITED STATES, 342 F. SUPP. 655 (1965); BLAKE
CONSTRUCTION COMPANY, INC. V. UNITED STATES, SUPRA.
UNDER APPROPRIATE CIRCUMSTANCES, YOUR REEMPLOYMENT WITHIN THE
DEPARTMENT OF DEFENSE MIGHT POSSIBLY HAVE BEEN REGARDED AS A RESTORATION
PURSUANT TO 50 U.S.C. 459. IN 25 COMP. GEN. 293 (1945), WE HELD THAT AN
EMPLOYEE RETURNING TO CIVILIAN EMPLOYMENT AFTER SEPARATION FROM MILITARY
SERVICE MAY BE REGARDED AS RESTORED AT THE PLACE FROM WHICH FURLOUGHED -
EVEN THOUGH THERE BE NO VACANCY OR POSITION FOR HIM THERE - AND
TRANSFERRED AT GOVERNMENT EXPENSE TO THE PLACE WHERE THE DEPARTMENT DOES
HAVE A SUITABLE VACANCY OR POSITION. SEE ALSO B-170987, DECEMBER 14,
1970, COPY ENCLOSED. THERE IS NO INDICATION THAT YOUR EMPLOYMENT AT
NAVAL AIR STATION, ALAMEDA, CALIFORNIA, WITH THE DEPARTMENT OF THE NAVY
WAS THE RESULT OF THE NONAVAILABILITY OF AN APPROPRIATE VACANCY AT
TINKER AIR FORCE BASE. RATHER IT WOULD APPEAR THAT YOU SOUGHT
EMPLOYMENT THERE FOR PERSONAL REASONS. ACCORDINGLY, WE SEE NO BASIS FOR
OBJECTION TO THE NAVY'S REPORTED DETERMINATION THAT YOU MAY NOT BE
REGARDED AS TRANSFERRED FOR THE CONVENIENCE OF THE GOVERNMENT.
FOR THE ABOVE REASONS THE DENIAL OF YOUR CLAIM BY SETTLEMENT
CERTIFICATE DATED AUGUST 10, 1972, IS HEREBY SUSTAINED.
B-177082, DEC 14, 1972
CIVILIAN EMPLOYEE - SALE OF RESIDENCE - TIME LIMIT
DECISION NOT ALLOWING DANIEL T. MCCARTHY, AN EMPLOYEE OF THE MANPOWER
ADMINISTRATION, AN EXTENSION OF TIME FOR THE SALE OF HIS RESIDENCE AT
HIS OLD OFFICIAL DUTY STATION.
WHILE THE COMP. GEN. RECOGNIZES THE SITUATION WITH WHICH MR.
MCCARTHY HAS BEEN CONFRONTED, NEVERTHELESS, THE LANGUAGE "SALE/PURCHASE
CONTRACTS ENTERED INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE INITIAL
ONE-YEAR PERIOD" APPEARING IN SECTION 4.1E OF OMB CIRCULAR NO. A-56
REFERS ONLY TO CONTRACTS BETWEEN BUYERS AND SELLERS OF RESIDENCES NOT TO
CONTRACTS WITH BROKERS TO FIND BUYERS FOR RESIDENCES, B-172160, JULY 7,
1971. SINCE A CONTRACT WITH A BUYER WAS NOT ENTERED INTO WITHIN THE
TIME-FRAME PRESCRIBED BY OMB CIRCULAR NO. A-56, THE GRANTING OF AN
EXTENSION OF TIME AS REQUESTED WOULD NOT BE PROPER.
TO MR. SECRETARY:
REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 15, 1972, WITH
ENCLOSURES, FROM YOUR ASSOCIATE ASSISTANT SECRETARY FOR FINANCIAL
MANAGEMENT, REQUESTING OUR DECISION AS TO WHETHER MR. DANIEL T.
MCCARTHY, AN EMPLOYEE OF THE MANPOWER ADMINISTRATION, DEPARTMENT OF
LABOR, MAY BE GRANTED AN EXTENSION OF TIME FOR THE SALE OF HIS RESIDENCE
AT HIS OLD OFFICIAL DUTY STATION IN VIEW OF SECTION 4.1E OF OFFICE OF
MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56, REVISED JUNE 26, 1969.
THE RECORD INDICATES THAT UNDER TRAVEL ORDER NO. 610-012, DATED
SEPTEMBER 22, 1971, MR. MCCARTHY WAS AUTHORIZED A CHANGE OF OFFICIAL
DUTY STATION FROM CLEVELAND, OHIO, TO COLUMBUS, OHIO, AND THAT HE
ENTERED ON DUTY AT THE NEW OFFICIAL STATION ON SEPTEMBER 22, 1971.
CONCERNING MR. MCCARTHY'S ENTITLEMENT TO REIMBURSEMENT OF REAL ESTATE
EXPENSES ARISING OUT OF THE PROBABLE SALE OF HIS RESIDENCE AT THE OLD
DUTY STATION, IT IS POINTED OUT THAT TO DATE THE EMPLOYEE HAS BEEN
UNABLE TO SELL HIS FORMER RESIDENCE AT THE OLD DUTY STATION. HOWEVER,
IT APPEARS THAT OVER THE PAST YEAR THE EMPLOYEE HAD CONTRACTED FOR THE
SERVICES OF VARIOUS REALTORS FOR THE PURPOSE OF SELLING HIS FORMER
DWELLING. APPARENTLY MR. MCCARTHY'S SELLING DIFFICULTY ARISES OUT OF A
DEPRESSED REAL ESTATE MARKET IN THE CLEVELAND, OHIO, AREA.
SECTION 4.1E OF OMB CIRCULAR NO. A-56 (1969 REVISION) SETTING FORTH
THE CONDITIONS UNDER WHICH REAL ESTATE EXPENSES MAY BE ALLOWED ARE AS
FOLLOWS:
"E. THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE
TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT
LATER THAN ONE (INITIAL) YEAR AFTER THE DATE ON WHICH THE EMPLOYEE
REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT (1) AN
APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED OR APPROVED BY THE HEAD
OF THE AGENCY OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED
BECAUSE OF LITIGATION OR (2) AN ADDITIONAL PERIOD OF TIME NOT IN EXCESS
OF ONE YEAR MAY BE AUTHORIZED OR APPROVED BY THE HEAD OF THE AGENCY OR
HIS DESIGNEE WHEN HE DETERMINES THAT CIRCUMSTANCES JUSTIFYING THE
EXCEPTION EXIST WHICH PRECLUDED SETTLEMENT WITHIN THE INITIAL ONE-YEAR
PERIOD OF THE SALE/PURCHASE CONTRACTS OR LEASE TERMINATION ARRANGEMENT
ENTERED INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE INITIAL ONE-YEAR
PERIOD. THE CIRCUMSTANCES WHICH ARE DETERMINED BY THE HEAD OF THE
AGENCY OR HIS DESIGNEE TO JUSTIFY THE EXCEPTION UNDER (2) ABOVE SHALL BE
SET FORTH IN WRITING."
WHILE WE RECOGNIZE THE SITUATION WITH WHICH MR. MCCARTHY HAS BEEN
CONFRONTED, NEVERTHELESS, THE LANGUAGE "SALE/PURCHASE CONTRACTS ***
ENTERED INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE INITIAL ONE-YEAR
PERIOD" APPEARING IN THE ABOVE REGULATIONS REFERS ONLY TO CONTRACTS
BETWEEN BUYERS AND SELLERS OF RESIDENCES NOT TO CONTRACTS WITH BROKERS
TO FIND BUYERS FOR RESIDENCES, B-172160, JULY 7, 1971, COPY ENCLOSED.
SINCE A CONTRACT WITH A BUYER WAS NOT ENTERED INTO WITHIN THE
TIME-FRAME PRESCRIBED BY OMB CIRCULAR NO. A-56, THE GRANTING OF AN
EXTENSION OF TIME AS REQUESTED WOULD NOT BE PROPER. SEE B-174315,
NOVEMBER 15, 1971, COPY ENCLOSED.
B-177172, DEC 14, 1972
CIVILIAN EMPLOYEE - SALE OF RESIDENCE - EXTENSION OF TIME LIMIT
DECISION ALLOWING AN EXTENSION OF TIME TO RICHARD H. KIPPEN FOR THE
AUTHORIZATION OF EXPENSES INCURRED INCIDENT TO THE SALE OF HIS OLD
RESIDENCE IN CONNECTION WITH HIS TRANSFER OF DUTY STATION.
SINCE THE SALE OF THE RESIDENCE WAS NOT CONCLUDED WITHIN ONE YEAR
AFTER TRANSFER, MR. KIPPEN'S CLAIM FOR REIMBURSEMENT WAS DISALLOWED
UNDER OMB CIRCULAR NO. A-56. HOWEVER, THE NEGOTIATION OF A SALES
CONTRACT WITHIN THE ONE YEAR PERIOD, EVEN THOUGH THE CONTRACT WAS
SUBSEQUENTLY ABROGATED, IS SUFFICIENT TO SHOW A REASONABLE RELATIONSHIP
BETWEEN THE TRANSACTION AND THE TRANSFER OF STATION TO ALLOW FOR AN
EXTENSION OF TIME WITHIN WHICH TO CONCLUDE A SALE. ACCORDINGLY, THE
REQUEST FOR A TIME EXTENSION MAY BE APPROVED AND THE PAYMENT OF
INCIDENTAL EXPENSES AUTHORIZED.
TO MR. SECRETARY:
THIS WILL REFER TO THE LETTER OF SEPTEMBER 29, 1972, FROM THE
ASSISTANT REGIONAL DIRECTOR FOR ADMINISTRATION, NORTHEAST REGION,
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), SUBMITTING THE
CLAIM OF MR. RICHARD H. KIPPEN FOR REIMBURSEMENT OF EXPENSES INCURRED
INCIDENT TO THE SALE OF HIS OLD RESIDENCE IN CONNECTION WITH HIS
TRANSFER OF OFFICIAL STATION.
THE RECORD SHOWS THAT MR. KIPPEN TRANSFERRED FROM GLOUCESTER,
MASSACHUSETTS, TO WOODS HOLE, MASSACHUSETTS, EFFECTIVE SEPTEMBER 1,
1970. THE SALE OF HIS RESIDENCE AT THE OLD DUTY STATION WAS NOT
CONSUMMATED UNTIL JANUARY 31, 1972, OR FIVE MONTHS AFTER THE ANNIVERSARY
DATE OF HIS TRANSFER. DUE TO THE FACT THE SALE TRANSACTION WAS NOT
CONCLUDED WITHIN ONE YEAR AFTER HIS TRANSFER, MR. KIPPEN'S CLAIM FOR
REIMBURSEMENT OF EXPENSES WAS DISALLOWED IN ACCORDANCE WITH PROVISIONS
OF THE NOAA TRAVEL HANDBOOK WHICH ARE SUBSTANTIALLY THE SAME AS
SUBSECTION 4.1E, OFFICE OF MANAGEMENT AND BUDGET CIRCULAR A-56. HIS
SUBSEQUENT REQUEST FOR AN EXTENSION OF TIME WITHIN WHICH TO CONCLUDE THE
SALE, FOR WHICH PROVISION IS MADE IN SUBSECTION 4.1E(2), SUPRA, WAS
DENIED BY THE ASSISTANT ADMINISTRATOR FOR ADMINISTRATION ON MAY 8, 1972,
AND, ON MR. KIPPEN'S REQUEST FOR RECONSIDERATION, AGAIN DENIED ON JUNE
8, 1972.
THE REQUEST FOR APPROVAL OF AN EXTENSION OF TIME WAS INITIALLY DENIED
BY THE ASSISTANT ADMINISTRATOR FOR THE FOLLOWING REASON, AS EXPRESSED IN
HIS MEMORANDUM OF MAY 8, 1972:
"WE HAVE MADE A THOROUGH REVIEW OF YOUR CASE TO DETERMINE WHETHER WE
HAVE A LEGAL BASIS TO JUSTIFY APPROVAL OF YOUR REQUEST FOR AN EXTENSION.
IT APPEARS THAT YOU REPORTED FOR DUTY AT YOUR NEW STATION ON SEPTEMBER
1, 1970, AND NEGOTIATED A CONTRACT PRIOR TO SEPTEMBER 1, 1971, THE DATE
OF THE EXPIRATION OF THE ONE-YEAR PERIOD ON WHICH YOU WERE ELIGIBLE FOR
AN EXTENSION OF TIME IN WHICH TO MAKE SETTLEMENT FOR YOUR HOME.
HOWEVER, SINCE THAT PARTICULAR SALE WAS NEVER CONSUMMATED, IT CANNOT BE
USED AS A BASIS TO APPROVE AN EXTENSION OF YOUR SETTLEMENT DATE."
IN SUPPORT OF THE DENIAL OF MR. KIPPEN'S REQUEST THE ASSISTANT
ADMINISTRATOR CITED OUR DECISION, B-171882, APRIL 2, 1971. THAT
DECISION HELD THAT AN EXTENSION OF TIME FOR THE PURCHASE OF A NEW
RESIDENCE BEYOND THE ONE-YEAR LIMITATION REQUIRED BY SUBSECTION 4.1E,
SUPRA, COULD NOT BE ALLOWED EVEN THOUGH THE EMPLOYEE HAD ENTERED INTO A
SALE/PURCHASE CONTRACT DURING THE INITIAL YEAR BECAUSE THE PURCHASE WAS
NOT ACTUALLY CONSUMMATED AND THE CONTRACT WAS TERMINATED PRIOR TO THE
END OF THE YEAR.
IN MR. KIPPEN'S CASE THE RECORD SHOWS THAT ON AUGUST 11, 1971, HE
EXECUTED A CONTRACT TO SELL HIS OLD RESIDENCE WHICH IS MARKED "VOID
AUGUST 14, 1971." IN A MEMORANDUM DATED APRIL 20, 1972, MR. KIPPEN
EXPLAINED THAT THE SALE WAS NOT CONSUMMATED "DUE TO THE FINANCIAL
DIFFICULTY OF THE PROSPECTIVE BUYER."
ON DECEMBER 28, 1971, MR. KIPPEN EXECUTED ANOTHER SALES CONTRACT
WHICH WAS SUCCESSFULLY CONSUMMATED BY FINAL SALE OF THE RESIDENCE ON
JANUARY 31, 1972.
WE CALL YOUR ATTENTION TO OUR DECISION B-175781, JULY 24, 1972, 52
COMP. GEN. ____, COPY ENCLOSED, IN WHICH WE SPECIFICALLY MODIFIED OUR
DECISION B-171882, SUPRA, AND HELD THAT AN AGENCY HEAD IS NOT PRECLUDED
FROM GRANTING AN EXTENSION OF TIME FOR CONSUMMATING THE SALE OF A
RESIDENCE IN A CASE WHERE A CONTRACT HAS BEEN ENTERED INTO DURING THE
INITIAL YEAR AFTER TRANSFER BUT HAS BEEN CANCELLED PRIOR TO THE
EXPIRATION OF THAT YEAR. WE NOTED THE APPLICABLE REGULATION IS SILENT
AS TO ANY REQUIREMENT THAT A CONTRACT BE IN EXISTENCE AT THE EXPIRATION
OF THE ONE-YEAR PERIOD. WE FURTHER HELD THAT THE NEGOTIATION OF A
CONTRACT WITHIN ONE YEAR, EVEN THOUGH IT SHOULD BE ABROGATED, IS
SUFFICIENT TO SHOW A REASONABLE RELATIONSHIP BETWEEN SUCH A TRANSACTION
AND THE TRANSFER OF STATION TO PROVIDE JUSTIFICATION FOR AN EXTENSION OF
TIME WITHIN WHICH TO CONCLUDE A SALE.
SINCE THAT DECISION APPEARS APPLICABLE TO THE FACTS OF MR. KIPPEN'S
CASE, YOUR AGENCY IS NOT PRECLUDED FROM APPROVING THE EXTENSION OF TIME
REQUESTED BY MR. KIPPEN AND AUTHORIZING PAYMENT OF EXPENSES INCURRED
INCIDENT TO THE SALE OF HIS RESIDENCE WHICH ARE OTHERWISE ALLOWABLE
UNDER PROVISIONS OF SECTION 4 OF CIRCULAR A-56.
THE VOUCHER AND ATTACHMENT ACCOMPANYING YOUR LETTER ARE RETURNED AND
THE VOUCHER IS FOR HANDLING IN ACCORDANCE WITH THE FOREGOING.
B-177195, DEC 14, 1972
CLAIM FOR BACK SALARY - HIGHEST PREVIOUS RATE RULE - RACIAL
DISCRIMINATION
DECISION SUSTAINING THE PRIOR DENIAL OF A CLAIM FOR BACK SALARY
INCIDENT TO CLAIMANT'S EMPLOYMENT AS A CLERK-STENOGRAPHER, GS-3, AT THE
NAVAL ORDNANCE STATION, LOUISVILLE, KY.
CLAIMANT'S REEMPLOYMENT AS A GS-3, A DEMOTION FROM HER PREVIOUS
EMPLOYMENT AS A GS-5, WAS NOT IN VIOLATION OF THE
"HIGHEST-PREVIOUS-RATE" RULE, 5 CFR 531.203(C), WHICH MAY BE APPLIED IN
THE DISCRETION OF THE EMPLOYING AGENCY. SINCE CLAIMANT WAS NOT AN
EXCEPTION TO THE NAVY'S POLICY NOT TO USE A STEP ABOVE THE MINIMUM STEP
REQUIRED BY LAW, THE CLAIM IS AGAIN DENIED. HOWEVER, THIS DETERMINATION
DOES NOT PRECLUDE AN ACTION IN THE COURT OF CLAIMS UNDER 28 U.S.C. 1491
FOR RELIEF FOR THE ALLEGED RACIAL DISCRIMINATION.
TO MRS. DOROTHY J. DEAN:
WE REFER TO YOUR LETTER DATED SEPTEMBER 25, 1972, WHICH WILL BE
VIEWED AS CONSTITUTING AN APPEAL FROM THE ACTION OF OUR TRANSPORTATION
AND CLAIMS DIVISION IN DENYING YOUR CLAIM FOR BACK SALARY UNDER THE
PROVISIONS OF 5 U.S.C. 5596, IN THE AMOUNT OF $3,508, INCIDENT TO YOUR
EMPLOYMENT WITH THE NAVAL ORDNANCE STATION, LOUISVILLE, KENTUCKY
(NOSLOU).
THE FACTS UNDERLYING YOUR CLAIM WILL NOT BE REPEATED IN DETAIL SINCE
THEY WERE FULLY RELATED IN OUR SETTLEMENT CERTIFICATE, DATED AUGUST 31,
1972. SO FAR AS MATERIAL, HOWEVER, THE RECORD INDICATES THAT YOUR CLAIM
PERTAINS TO THE RATE OF PAY GIVEN YOU UPON YOUR REEMPLOYMENT WITH THE
FEDERAL GOVERNMENT UNDER AN INTERMITTENT APPOINTMENT ON FEBRUARY 11,
1969, AS A CLERK-STENOGRAPHER, GS-3, STEP 1. PRIOR THERETO, YOU WERE A
PROCUREMENT ASSISTANT, GS-5, STEP 8, UNTIL YOU RESIGNED FROM THAT
POSITION ON MARCH 22, 1968.
IT IS APPARENTLY YOUR VIEW THAT, BECAUSE OF RACIAL DISCRIMINATION,
THE RATE OF PAY GIVEN YOU UPON YOUR REEMPLOYMENT WAS LOWER THAN THAT
PERMITTED UNDER THE "HIGHEST-PREVIOUS-RATE" RULE, STATED IN 5 CFR
531.203(C). THIS IS THE UNJUSTIFIED PERSONNEL ACTION WHICH YOU IDENTIFY
AS COMING WITHIN THE PROVISIONS OF 5 U.S.C. 5596.
THE RECORD FURTHER SHOWS THAT THE MATTERS HERE INVOLVED (APPLICATION
OF THE "HIGHEST-PREVIOUS-RATE" RULE AND THE ISSUE OF RACIAL
DISCRIMINATION) WERE THE SUBJECT OF REVIEWS BY BOTH YOUR ADMINISTRATIVE
AGENCY AND THE CIVIL SERVICE COMMISSION, IN WHICH IT WAS FOUND THAT YOUR
AGENCY DID NOT DISCRIMINATE AGAINST YOU BECAUSE OF RACE WITH REGARD TO
THE RATE OF PAY GIVEN YOU UPON REEMPLOYMENT ON FEBRUARY 11, 1969.
YOU STILL MAINTAIN THAT, NOTWITHSTANDING THE ABOVE DETERMINATIONS,
YOU WERE DENIED THE BENEFITS OF THE "HIGHEST-PREVIOUS-RATE" RULE BECAUSE
OF RACIAL DISCRIMINATION.
5 U.S.C. 5596 PROVIDES IN PERTINENT PART AS FOLLOWS:
"(B) AN EMPLOYEE OF AN AGENCY WHO, ON THE BASIS OF AN ADMINISTRATIVE
DETERMINATION OR A TIMELY APPEAL, IS FOUND BY APPROPRIATE AUTHORITY
UNDER APPLICABLE LAW OR REGULATION TO HAVE UNDERGONE AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION THAT HAS RESULTED IN THE WITHDRAWAL OR
REDUCTION OF ALL OR A PART OF THE PAY, ALLOWANCES, OR DIFFERENTIALS OF
THE EMPLOYEE -
"(1) IS ENTITLED, ON CORRECTION OF THE PERSONNEL ACTION, TO RECEIVE
FOR THE PERIOD FOR WHICH THE PERSONNEL ACTION WAS IN EFFECT AN AMOUNT
EQUAL TO ALL OR ANY PART OF THE PAY, ALLOWANCES, OR DIFFERENTIALS, AS
APPLICABLE, THAT THE EMPLOYEE NORMALLY WOULD HAVE EARNED DURING THAT
PERIOD IF THE PERSONNEL ACTION HAD NOT OCCURRED, LESS ANY AMOUNTS EARNED
BY HIM THROUGH OTHER EMPLOYMENT DURING THAT PERIOD; AND
"(2) FOR ALL PURPOSES, IS DEEMED TO HAVE PERFORMED SERVICE FOR THE
AGENCY DURING THAT PERIOD, EXCEPT THAT THE EMPLOYEE MAY NOT BE CREDITED,
UNDER THIS SECTION, LEAVE IN AN AMOUNT THAT WOULD CAUSE THE AMOUNT OF
LEAVE TO HIS CREDIT TO EXCEED THE MAXIMUM AMOUNT OF THE LEAVE AUTHORIZED
FOR THE EMPLOYEE BY LAW OR REGULATION."
THE REGULATIONS OF THE CIVIL SERVICE COMMISSION CONCERNING THE
"HIGHEST-PREVIOUS-RATE" RULE ARE CONTAINED IN 5 CFR 531.203(C) IN
PERTINENT PART AS FOLLOWS:
"(C) POSITION OR APPOINTMENT CHANGES. SUBJECT TO SECS 531.204,
531.515, 539.201 OF THIS CHAPTER, AND SECTION 5334(A) OF TITLE 5, UNITED
STATES CODE, WHEN AN EMPLOYEE IS REEMPLOYED, TRANSFERRED, REASSIGNED,
PROMOTED, OR DEMOTED, THE AGENCY MAY PAY HIM AT ANY RATE OF HIS GRADE
WHICH DOES NOT EXCEED HIS HIGHEST PREVIOUS RATE; HOWEVER, IF HIS
HIGHEST PREVIOUS RATE FALLS BETWEEN TWO RATES OF HIS GRADE, THE AGENCY
MAY PAY HIM AT THE HIGHER RATE. WHEN AN EMPLOYEE'S TYPE OF APPOINTMENT
IS CHANGED IN THE SAME POSITION, THE AGENCY MAY CONTINUE TO PAY HIM AT
HIS EXISTING RATE OR MAY PAY HIM AT ANY HIGHER RATE OF HIS GRADE WHICH
DOES NOT EXCEED HIS HIGHEST PREVIOUS RATE; HOWEVER, IF HIS HIGHEST
PREVIOUS RATE FALLS BETWEEN TWO RATES OF HIS GRADE THE AGENCY MAY PAY
HIM AT THE HIGHER RATE."
AS WILL BE NOTED FROM THE ABOVE REGULATIONS THE APPLICATION OF THE
"HIGHEST-PREVIOUS-RATE" RULE IS A MATTER OF DISCRETION WITH THE
EMPLOYING AGENCY. THE QUOTED RULE PERMITS EACH AGENCY TO FORMULATE ITS
OWN POLICY REGARDING THE APPLICATION OF THE RULE. IN CONNECTION
THEREWITH, WE NOTE THAT NOSLOU INSTRUCTION 12552.1A, ISSUED FEBRUARY 16,
1967, WHICH WAS IN EFFECT AT THE TIME OF YOUR REEMPLOYMENT, PROVIDED IN
PARAGRAPHS 3-5 AS FOLLOWS:
"3. POLICY. IT IS THE POLICY OF THE NAVY NOT TO USE A STEP ABOVE
THE MINIMUM STEP REQUIRED BY LAW OR REGULATION UNLESS IT IS IN THE
INTEREST OF THE GOVERNMENT. WHEREVER A HIGHER RATE IS PERMISSIBLE, THE
RATE SET WILL BE REVIEWED BY MANAGEMENT IN LIGHT OF THE NEEDS OF THE
ACTIVITY, ASSESSMENT OF THE QUALITY OF THE EMPLOYEE, EQUITY AMONG
EMPLOYEES, AND AVAILABILITY OF FUNDS. IN NO CASE WILL THERE BE AN
"AUTOMATIC" PLACEMENT IN THE HIGHEST PERMISSIBLE RATE.
"4. EXCEPTION. THE ONLY EXCEPTION TO THE ABOVE STATED POLICY IS IN
THE CASE OF AN EMPLOYEE OF THE DEPARTMENT OF DEFENSE WHO IS SCHEDULED
FOR SEPARATION BY REDUCTION IN FORCE OR FAILURE TO ACCOMPANY A FUNCTION
AND WHO IS PLACED ELSEWHERE IN THE DEPARTMENT OF DEFENSE BY REASSIGNMENT
OR TRANSFER, OR REEMPLOYMENT WHILE ON A REEMPLOYMENT PRIORITY LIST.
SUCH EMPLOYEE WILL HAVE HIS PAY ESTABLISHED IN THE NEW POSITION AT A
STEP RATE WHICH PRESERVES TO HIM, SO FAR AS POSSIBLE, HIS LAST EARNED
RATE. THIS LATTER REQUIREMENT DOES NOT PRECLUDE THE USE OF HIS HIGHEST
PREVIOUS RATE UNDER THESE CIRCUMSTANCES.
"5. FACTORS IN DETERMINATION OF RATES. CONSIDERATION WILL BE GIVEN
TO SUCH FACTORS AS THE TYPE OF WORK PREVIOUSLY PERFORMED, LENGTH OF
SERVICE IN APPROPRIATE POSITIONS OR RATINGS, THE TIME THAT HAS ELAPSED
SINCE LAST EMPLOYMENT, SALARY RATES OF SUPERVISORS UNDER WHOM THEY WILL
WORK, AND RECRUITING DIFFICULTIES WHICH MAY BE ENCOUNTERED."
IN VIEW OF THE ABOVE AND SINCE THERE APPEARS TO HAVE BEEN NO
ADMINISTRATIVE ERROR OR MANDATORY INSTALLATION POLICY TO ESTABLISH THE
SALARY RATE OF A REEMPLOYED EMPLOYEE AT THE HIGHEST PREVIOUS SALARY
RECEIVED BY HIM, THE SETTING OF RATE OF YOUR PAY UPON REEMPLOYMENT AT A
GS-3, STEP 1, WAS NOT IMPROPER. SEE B-104166, 31 COMP. GEN. 15 (1951),
COPY ENCLOSED.
FURTHERMORE, WE POINT OUT THAT TO QUALIFY FOR BACK PAY UNDER THE
PROVISIONS OF 5 U.S.C. 5596, THERE MUST BE A CORRECTION OF THE ALLEGED
ERRONEOUS PERSONNEL ACTION. NO SUCH CORRECTION WAS DEEMED APPROPRIATE
IN YOUR CASE.
ACCORDINGLY, THE ACTION OF OUR TRANSPORTATION AND CLAIMS DIVISION IN
DENYING YOUR CLAIM MUST BE SUSTAINED.
CONCERNING YOUR QUESTION AS TO WHETHER YOU MAY SEEK RELIEF IN THE
UNITED STATES COURT OF CLAIMS, YOU ARE ADVISED THAT UNDER THE PROVISIONS
OF 28 U.S.C. 1491, IT WOULD APPEAR THAT YOU MAY FILE SUIT IN THAT COURT
IF YOU SO DESIRE.
B-177331, DEC 14, 1972
CIVILIAN EMPLOYEE - VOLUNTARY PAYMENT OF TORT CLAIMS - REIMBURSEMENT -
GOVERNMENT LIABILITY
CONCERNING THE REIMBURSEMENT OF A VETERANS ADMINISTRATION EMPLOYEE
FOR THE AMOUNT PAID BY HIM REPRESENTING PERSONAL INJURY AND PROPERTY
DAMAGES RESULTING FROM AN AUTOMOBILE COLLISION INVOLVING A GOVERNMENT
VEHICLE BEING OPERATED IN THE PHILIPPINES.
WHILE THE V.A. HAS AUTHORITY UNDER THE FEDERAL TORT CLAIMS ACT TO
SETTLE TORT CLAIMS ARISING IN FOREIGN COUNTRIES IN CONNECTION WITH V.A.
OPERATIONS ABROAD, THE ACT DOES NOT AUTHORIZE REIMBURSEMENT OF A
GOVERNMENT EMPLOYEE WHO HAS PAID FROM HIS OWN FUNDS A TORT CLAIM
COGNIZABLE BY THE GOVERNMENT UNDER THE ACT. HOWEVER, WHEN VOLUNTARY
PAYMENT IS MADE IN THE GOVERNMENT'S INTEREST UNDER URGENT AND UNFORSEEN
CIRCUMSTANCES, A CLAIM FOR REIMBURSEMENT WILL BE ALLOWED. 33 COMP. GEN.
20 (1953). WHILE THE COMP. GEN. DOES NOT OBJECT TO REIMBURSEMENT IN
THE INSTANT CASE, PAYMENT OF FUTURE CLAIMS BY THE GOVERNMENT IS STRONGLY
URGED.
TO MR. DONALD E. JOHNSON:
THE LETTER OF OCTOBER 20, 1972, SIGNED BY MR. FRED B. RHODES, DEPUTY
ADMINISTRATOR, REQUESTS OUR OPINION AS TO WHETHER A VETERANS
ADMINISTRATION EMPLOYEE MAY BE REIMBURSED BY YOUR ADMINISTRATION FOR AN
AMOUNT PAID BY HIM REPRESENTING PERSONAL INJURY OR PROPERTY DAMAGE
RESULTING FROM AN AUTOMOBILE COLLISION INVOLVING A GOVERNMENT VEHICLE
BEING OPERATED IN THE PHILIPPINES BY SAID EMPLOYEE ACTING IN THE SCOPE
OF HIS EMPLOYMENT.
THE LETTER STATES THAT YOUR ADMINISTRATION HAS FOR CONSIDERATION TWO
CASES INVOLVING AUTOMOBILE COLLISIONS IN THE PHILIPPINES. IN EACH
INSTANCE A GOVERNMENT VEHICLE WAS BEING DRIVEN BY A VETERANS
ADMINISTRATION ATTORNEY PROCEEDING TO CONDUCT A FIELD INVESTIGATION FOR
THE MANILA REGIONAL OFFICE. FOLLOWING EACH ACCIDENT, THE FIELD ATTORNEY
INVOLVED PAID FROM HIS PERSONAL FUNDS THE DAMAGES INFLICTED UPON THE
OTHER PARTY, PAYING IN ONE INSTANCE APPROXIMATELY $28.26 AND IN THE
OTHER APPROXIMATELY $40.50.
AS INDICATED IN THE LETTER, THE VETERANS ADMINISTRATION, IN COMMON
WITH OTHER GOVERNMENT DEPARTMENTS AND AGENCIES, HAS AUTHORITY UNDER THE
FEDERAL TORT CLAIMS ACT, AS AMENDED, 28 U.S.C. 2672, TO
ADMINISTRATIVELY SETTLE TORT CLAIMS ARISING IN THE UNITED STATES IF THE
INJURED PARTIES FILE CLAIMS UNDER THE PROVISIONS OF THAT ACT.
FURTHERMORE, YOU HAVE AUTHORITY UNDER 38 U.S.C. 236 TO PAY "TORT CLAIMS,
IN THE MANNER AUTHORIZED IN THE FIRST PARAGRAPH OF SECTION 2672 OF TITLE
28, WHEN SUCH CLAIMS ARISE IN FOREIGN COUNTRIES IN CONNECTION WITH
VETERANS' ADMINISTRATION OPERATIONS ABROAD."
NEITHER 28 U.S.C. 2672 NOR 38 U.S.C. 236 SPECIFICALLY AUTHORIZES
REIMBURSEMENT OF A GOVERNMENT EMPLOYEE WHO HAS PAID FROM HIS OWN FUNDS A
TORT CLAIM COGNIZABLE BY THE GOVERNMENT UNDER SAID STATUTES. BOTH
STATUTES OBVIOUSLY CONTEMPLATE PAYMENT DIRECT FROM THE GOVERNMENT TO THE
INJURED PARTY. THE OBLIGATION IN BOTH OF THE PRESENT INSTANCES WAS THAT
OF THE GOVERNMENT UNDER THE CITED STATUTES, AND ANY PAYMENTS MADE BY
YOUR EMPLOYEES WERE VOLUNTARY. IT IS WELL SETTLED THAT PAYMENT OF AN
OBLIGATION BY A MERE VOLUNTEER, WHO IS UNDER NO LEGAL OBLIGATION TO MAKE
THE PAYMENT AND WHO IS NOT REQUIRED TO DO SO FOR THE PRESERVATION OF ANY
RIGHTS OR PROPERTY OF HIS OWN, DOES NOT PLACE SAID VOLUNTEER IN A
POSITION TO DEMAND REIMBURSEMENT FROM ANYONE. NO OFFICER OR EMPLOYEE OF
THE GOVERNMENT CAN CREATE A VALID CLAIM IN HIS FAVOR BY PAYING
OBLIGATIONS OF THE UNITED STATES FROM HIS OWN FUNDS. THE UNITED STATES,
AS REPRESENTED BY YOUR ADMINISTRATION, WAS ENTITLED TO AN OPPORTUNITY TO
DETERMINE FOR ITSELF WHETHER ANY OBLIGATION RESTED UPON IT IN THESE TWO
INSTANCES AND, IF SO, TO HAVE ITS DULY AUTHORIZED OFFICIALS ARRANGE FOR
ITS LIQUIDATION. SEE 33 COMP. GEN. 20 (1953); 18 ID. 424 (1938); AND
CASES CITED THEREIN.
HOWEVER, CONSIDERATION SHOULD BE GIVEN TO THE PURPOSE AND INTENT OF
THE FEDERAL TORT CLAIMS ACT; THAT IS, TO PROTECT OFFICERS AND EMPLOYEES
OF THE GOVERNMENT FROM LIABILITY FOR TORTS COMMITTED BY THEM WHILE
ACTING WITHIN THE SCOPE OF THEIR OFFICE OR EMPLOYMENT. ALSO, EXCEPTIONS
TO THE ABOVE-STATED RULE CONCERNING VOLUNTARY PAYMENTS HAVE BEEN
RECOGNIZED IN CASES INVOLVING THE EXPENDITURE OF PERSONAL FUNDS IN THE
GOVERNMENT'S INTEREST UNDER URGENT AND UNFORESEEN EMERGENCIES. 33 COMP.
GEN. 20 (1953). IN THIS CONNECTION, THE LETTER OF OCTOBER 20, 1972,
STATES THAT IN BOTH OF THE CASES CURRENTLY UNDER CONSIDERATION THE FIELD
ATTORNEY INVOLVED PAID THE AMOUNT IN QUESTION TO AVOID THE REAL
POSSIBILITY OF DETENTION BY THE PHILIPPINE POLICE AND TO OBTAIN THE
RELEASE OF THE GOVERNMENT VEHICLE, WHICH HAD BEEN IMPOUNDED PENDING
COMPLETION OF LOCAL POLICE INVESTIGATION, THUS FACILITATING THE CONDUCT
OF GOVERNMENT BUSINESS.
HENCE, OUR OFFICE WILL NOT OBJECT IN THESE TWO INSTANCES INVOLVING
TORT CLAIMS IN A FOREIGN COUNTRY TO REIMBURSEMENT OF THE EMPLOYEES
INVOLVED, PROVIDED THAT YOUR ADMINISTRATION DETERMINES FROM THE FACTS IN
EACH INSTANCE THAT IT WOULD HAVE PAID THESE CLAIMS - AND IN THE AMOUNTS
INDICATED - IF CLAIMS THEREFOR HAD BEEN PRESENTED TO IT BY OR FOR THE
INJURED PARTIES IN THE PROPER MANNER AS CONTEMPLATED BY THE CITED
STATUTES.
THIS OPINION IS NOT TO BE CONSIDERED AS A PRECEDENT IN ANY SIMILAR
SITUATIONS OCCURRING IN A FOREIGN COUNTRY. ALSO, SUCH ACTIONS ON THE
PART OF EMPLOYEES IN FOREIGN COUNTRIES IN PAYING TORT CLAIMS COGNIZABLE
UNDER 28 U.S.C. 2672 AND 38 U.S.C. 236 FROM THEIR PERSONAL FUNDS IN
EXPECTATION OF REIMBURSEMENT FROM THE GOVERNMENT SHOULD, FOR THE REASONS
INDICATED ABOVE, BE VERY STRONGLY DISCOURAGED, AND SHOULD NEVER, UNDER
ANY CIRCUMSTANCES, BE CONDONED IN THE CASE OF TORT CLAIMS ARISING IN THE
UNITED STATES. THE LAST PARAGRAPH OF 28 U.S.C. 2672 PROVIDES THAT THE
ACCEPTANCE BY THE CLAIMANT OF AN AWARD, COMPROMISE, OR SETTLEMENT FROM
THE GOVERNMENT UNDER SAID SECTION IS FINAL AND CONCLUSIVE ON THE
CLAIMANT AND CONSTITUTES A COMPLETE RELEASE OF ANY CLAIM AGAINST THE
UNITED STATES AND AGAINST THE EMPLOYEE OF THE GOVERNMENT WHOSE ACT OR
OMISSION GAVE RISE TO THE CLAIM. WHILE SUCH STATUTORY RELEASE IS OF
LITTLE OR NO VALUE IN THE INSTANCE OF A TORT CLAIM ARISING IN A FOREIGN
COUNTRY, IT IS BINDING ON CLAIMANTS WHOSE TORT CLAIMS ARISE IN THE
UNITED STATES. OBVIOUSLY, PAYMENT OF THE CLAIM BY THE EMPLOYEE FROM HIS
PERSONAL FUNDS RATHER THAN BY THE GOVERNMENT FROM GOVERNMENT FUNDS WOULD
RENDER THIS RELEASE PROVISION INEFFECTIVE, NOTWITHSTANDING SUBSEQUENT
REIMBURSEMENT OF THE EMPLOYEE BY THE GOVERNMENT, AND SUCH SITUATIONS
MUST BE AVOIDED.
B-177489, DEC 14, 1972
PROCUREMENT PRACTICES - FAILURE TO CONSIDER BID-RECOVERY OF OVERHEAD,
ANTICIPATED PROFITS AND BID PREPARATION COSTS
DECISION DISCOURAGING GUARANTEED SUPPLY CO.'S FILING OF A CLAIM FOR
OVERHEAD AND ANTICIPATED PROFITS RESULTING FROM A CONTRACT AWARDED TO
PETROLEUM TANK SERVICE FOR FUEL TANK MAINTENANCE AT THE MARINE CORPS AIR
STATION, CHERRY POINT, N.C.
THE COURTS HAVE RECOGNIZED THAT BIDDERS ARE ENTITLED TO HAVE THEIR
BIDS CONSIDERED FAIRLY AND HONESTLY FOR AWARD, BUT THE FAILURE OF THE
CONTRACTING AGENCY TO CONSIDER THE BID GIVES RISE TO A CAUSE OF ACTION
TO RECOVER ONLY BID PREPARATION EXPENSES. HOWEVER, A LONG SERIES OF
CASES FROM THE COURT OF CLAIMS HAS DISALLOWED SUCH CLAIMS, AND IN THE
ABSENCE OF JUDICIAL ADVICE AS TO WHAT STANDARDS OR CRITERIA TO APPLY,
GAO MUST DECLINE TO CONSIDER THESE CLAIMS.
TO GUARANTEED SUPPLY COMPANY:
THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 15, 1972, TRANSMITTING
COPIES OF CORRESPONDENCE RELATIVE TO YOUR BID ON CONTRACT NO.
N62470-72-C-0684, FOR THE CLEANING AND REPAIRING OF FUEL TANKS AT THE
MARINE CORPS AIR STATION, CHERRY POINT, NORTH CAROLINA, WHICH WAS
AWARDED TO PETROLEUM TANK SERVICE (PETROLEUM).
YOUR CORRESPONDENCE INDICATES THAT YOU BELIEVE THE CONTRACT AWARD TO
PETROLEUM WAS ERRONEOUS AND THAT YOU DESIRE TO FILE A CLAIM FOR OVERHEAD
AND ANTICIPATED PROFITS IN CONNECTION WITH THIS CONTRACT. YOUR LETTER
OF SEPTEMBER 7, 1972, TO THIS OFFICE REQUESTS ADVICE REGARDING HOW TO
FILE SUCH A CLAIM.
WHILE THE COURTS HAVE RECOGNIZED THAT BIDDERS ARE ENTITLED TO HAVE
THEIR BIDS CONSIDERED FAIRLY AND HONESTLY FOR AWARD, THEY HAVE ALSO HELD
THAT ANY FAILURE OF THE CONTRACTING AGENCY IN THIS REGARD WOULD GIVE
RISE TO A CAUSE OF ACTION BY THE AGGRIEVED BIDDER TO RECOVER ONLY BID
PREPARATION EXPENSES. SEE HEYER PRODUCTS CO., INC. V. UNITED STATES,
140 F. SUPP. 409 (CT. CL. 1956); 177 F. SUPP. 251 (CT. CL. 1959);
KECO INDUSTRIES, INC. V. UNITED STATES, 428 F.2D 1233 (CT. CL. 1970);
AND CONTINENTAL BUSINESS ENTERPRISES, INC. V. UNITED STATES, 452 F.2D
1016 (CT. CL. 1971). THIS OFFICE THEREFORE COULD NOT ALLOW A CLAIM FOR
OVERHEAD AND ANTICIPATED PROFITS, AS INDICATED IN YOUR CORRESPONDENCE.
WITH RESPECT TO A CLAIM FOR BID PREPARATION EXPENSES, IT SHOULD BE
NOTED THAT IN NONE OF THE CASES CITED ABOVE HAS THE COURT ALLOWED THE
BIDDER'S CLAIM, AND THIS OFFICE IS WITHOUT THE BENEFIT OF JUDICIAL
ADVICE AS TO WHAT STANDARDS OR CRITERIA SHOULD BE APPLIED OR ADOPTED IN
ALLOWING SUCH A CLAIM. UNTIL APPROPRIATE CRITERIA AND STANDARDS ARE
JUDICIALLY ESTABLISHED, THIS OFFICE MUST THEREFORE DECLINE TO ATTEMPT
THE SETTLEMENT OF CLAIMS FOR BID PREPARATION COSTS PURSUANT TO THE
DOCTRINE OF THE CASES CITED ABOVE. SEE LONGWILL V. UNITED STATES, 17
CT. CL. 288 (1881); CHARLES V. UNITED STATES, 19 CT. CL. 316 (1884);
B-168917, OCTOBER 6, 1970.
B-94324, DEC 14, 1972
CIVILIAN EMPLOYEE - IMPROPER SEPARATION - REFUND OF LEAVE PAYMENT
DECISION DISALLOWING A REQUEST BY GEORGE A. HARRISON FOR AN
ADJUSTMENT OF ANNUAL LEAVE BALANCE BASED ON CLAIMANT'S OFFER TO REFUND
THE LUMP SUM LEAVE PAYMENT RECEIVED INCIDENT TO A SEPARATION FROM THE
FEDERAL SERVICE BETWEEN JUNE 27 AND SEPTEMBER 14, 1947.
SINCE THE COURT OF CLAIMS AWARDED BACK PAY FOR THE PERIOD OF IMPROPER
SEPARATION IN A STIPULATED JUDGMENT WHICH HAS FIXED THE RIGHTS OF THE
CONCERNED PARTIES, THE COMP. GEN. WILL NOT PERMIT THE SUBSTITUTION OF
LEAVE TIME IN LIEU OF A REFUND OF THE LUMP SUM LEAVE PAYMENT.
TO MR. GEORGE A. HARRISON:
WE REFER TO THE LETTER OF MISS NELL LUNDAHL, PERSONNEL STAFFING
SPECIALIST, DEPARTMENT OF STATE DATED SEPTEMBER 19, 1972, BY WHICH SHE
FORWARDED FOR OUR CONSIDERATION YOUR REQUEST FOR AN ADJUSTMENT OF YOUR
ANNUAL LEAVE BALANCE BASED ON YOUR OFFER TO REFUND THE LUMP-SUM LEAVE
PAYMENT YOU RECEIVED FOR THE PERIOD OF YOUR SEPARATION FROM FEDERAL
SERVICE BETWEEN JUNE 27 AND SEPTEMBER 14, 1947.
THE INFORMATION PRESENTED SHOWS THAT YOU WERE SEPARATED FROM THE
POSITION YOU HELD IN THE DEPARTMENT OF AGRICULTURE BY REDUCTION IN FORCE
ON JUNE 27, 1947. ALTHOUGH THE CIVIL SERVICE COMMISSION DETERMINED THAT
YOUR SEPARATION HAD BEEN IMPROPER BECAUSE NON-STATUS EMPLOYEES HAD BEEN
RETAINED IN POSITIONS FOR WHICH YOU WERE QUALIFIED YOU WERE NOT
REINSTATED BY THE DEPARTMENT OF AGRICULTURE SINCE YOU HAD OBTAINED OTHER
EMPLOYEMNT WITH THE WAR ASSETS ADMINISTRATION. A LUMP-SUM PAYMENT FOR
ANNUAL LEAVE WAS MADE TO YOU AT THE TIME OF YOUR SEPARATION AND AFTER
YOUR REEMPLOYMENT YOU REFUNDED THAT PORTION OF THE LUMP-SUM PAYMENT
WHICH COVERED THE PERIOD AFTER YOUR REEMPLOYMENT. FURTHER, AS A RESULT
OF AN ACTION YOU BROUGHT IN THE COURT OF CLAIMS YOU WERE AWARDED BACK
PAY FOR THE PERIOD OF YOUR IMPROPER SEPARATION UNDER A STIPULATED
JUDGMENT WHICH IS RECORDED AT 117 CT. CL. 814 (1950).
YOU NOW WISH TO REFUND TO THE GOVERNMENT THE LUMP-SUM PAYMENT YOU
RECEIVED AND RETAINED COVERING THE PERIOD OF YOUR IMPROPER SEPARATION
AND HAVE RECREDITED TO YOUR CURRENT ANNUAL LEAVE ACCOUNT THE AMOUNT OF
LEAVE WHICH WAS CHARGED YOU DURING THAT PERIOD. IT IS YOUR POSITION
THAT THE WAR ASSETS ADMINISTRATION SHOULD HAVE TAKEN SUCH ACTION AT THE
TIME YOU WERE REEMPLOYED IN VIEW OF THE CIVIL SERVICE COMMISSION
DETERMINATION THAT YOUR SEPARATION HAD BEEN IMPROPER AND THE LATER COURT
OF CLAIMS JUDGMENT IN YOUR FAVOR.
WE NOTE THAT YOUR CASE WAS SUBJECT TO A COURT JUDGMENT UNDER WHICH
YOU WERE ALLOWED BACK PAY FOR THE PERIOD IN QUESTION WITHOUT REDUCTION
OF THE SUM OTHERWISE DUE TO ACCOUNT FOR THAT PART OF THE LUMP-SUM LEAVE
(WORD ILLEGIBLE) HAD RECEIVED COVERING THE SAME PERIOD. EVEN THOUGH THE
LUMP-SUM LEAVE PAYMENT MAY NOT HAVE BEEN CONSIDERED SPECIFICALLY IN
ARRIVING AT THE STIPULATED JUDGMENT, WE MUST CONSIDER THE COURT OF
CLAIMS JUDGMENT TO HAVE FIXED THE RIGHTS OF THE PARTIES, INCLUDING YOUR
RIGHTS WITH RESPECT TO ANNUAL LEAVE EARNED PRIOR TO THE SEPARATION.
FURTHERMORE, TO NOW PERMIT YOU TO MAKE THE REFUND AS SUGGESTED WOULD
REQUIRE A RECONSTRUCTION OF YOUR LEAVE ACCOUNT FOR EACH YEAR BEGINNING
WITH 1947 AND THE APPLICATION OF MAXIMUM ACCUMULATION LIMITATIONS. SUCH
ACTION MIGHT WELL BE IMPOSSIBLE BECAUSE OF THE DESTRUCTION OF NECESSARY
LEAVE RECORDS.
IN VIEW OF THE ABOVE, WE MUST CONCLUDE THAT A REFUND OF THE BALANCE
OF THE LUMP-SUM PAYMENT YOU RECEIVED INCIDENT TO YOUR SEPARATION ON JUNE
27, 1947, WITH A LIKE CREDIT OF THE ANNUAL LEAVE REPRESENTED THEREBY IS
NOT PERMISSIBLE.
B-175278, DEC 13, 1972
CIVILIAN PERSONNEL - TIME LIMITATION FOR CLAIMS ACCRUAL DATE
DECISION SUSTAINING THE DENIAL OF THE CLAIM OF THOMAS R. HUFF, FOR
OVERTIME COMPENSATION.
THE DATE OF ACCRUAL OF A CLAIM FOR THE PURPOSES OF 31 U.S.C. 71A,
WHICH BARS CLAIMS NOT RECEIVED BY GAO WITHIN 10 FULL YEARS AFTER THE
CLAIM FIRST ACCRUED, IS TO BE REGARDED AS THE DAY SERVICES WERE
RENDERED, AND THE CLAIM ACCRUES ON A DAILY BASIS. 29 COMP. GEN. 517
(1950).
TO MR. THOMAS R. HUFF:
REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 13, 1972, REQUESTING
RECONSIDERATION OF THE ACTION OF OUR TRANSPORTATION AND CLAIMS DIVISION
IN LETTER OF FEBRUARY 9, 1972, IN DISALLOWING YOUR CLAIM FOR OVERTIME
COMPENSATION. THE CLAIM WAS DISALLOWED FOR THE REASON THAT IT WAS
BARRED BY THE ACT OF OCTOBER 9, 1940, 54 STAT 1061, 31 U.S.C. 71A, NOT
HAVING BEEN RECEIVED HERE WITHIN 10 FULL YEARS AFTER THE CLAIM FIRST
ACCRUED.
YOU SEEK RECONSIDERATION APPARENTLY UPON THE BASIS THAT THERE IS NO
INDICATION AS TO WHEN YOUR CLAIM FIRST ACCRUED FOR THE PURPOSE OF 31
U.S.C. 71A. YOUR DOUBT APPARENTLY ARISES IN VIEW OF A DOCUMENT ISSUED
BY THE OFFICE OF EMERGENCY PREPAREDNESS (OEP) DATED FEBRUARY 11, 1959,
STATING THAT "OVERTIME PAY IS NOT AUTHORIZED FOR DUTY OFFICERS," AND
ADVICE YOU HAVE RECEIVED FROM COUNSEL THAT "ACCRUED" DATE COULD NOT BE
EARLIER THAN WHEN LEGAL RIGHTS WERE ESTABLISHED.
WHILE WE DO NOT HAVE ANY SPECIFIC INFORMATION WITH REGARD TO THE OEP
DOCUMENT TO WHICH YOU HAVE REFERRED, WE NOTE THAT YOUR CLAIM FOR
COMPENSATION FOR OVERTIME WORK ALLEGEDLY PERFORMED COVERS THE PERIOD
JULY 2, 1958, THROUGH JUNE 5, 1960. BY VIRTUE OF THE OEP DIRECTIVE IT
WOULD APPEAR THAT PAYMENTS TO DUTY OFFICERS WERE NOT ADMINISTRATIVELY
AUTHORIZED SUBSEQUENT TO FEBRUARY 11, 1959, WHICH PERIOD REPRESENTS A
CONSIDERABLE PORTION OF YOUR CLAIM. IN ANY EVENT IT HAS BEEN HELD THAT
THE DATE OF ACCRUAL OF A CLAIM FOR THE PURPOSE OF THE ACT OF OCTOBER 9,
1940, IS TO BE REGARDED AS THE DAY THE SERVICES WERE RENDERED, AND THAT
THE CLAIM ACCRUES UPON A DAILY BASIS. 29 COMP. GEN. 517 (1950).
SINCE YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE MORE THAN TEN YEARS
AFTER IT ACCRUED THE ACTION OF FEBRUARY 9, 1972, IS SUSTAINED.
B-176516, DEC 13, 1972
MILITARY PERSONNEL - HOUSEHOLD GOODS SHIPMENT - PRORATED EXPENSES -
ALLOWABLE WEIGHT - MILEAGE ALLOWANCE
DECISION ALLOWING IN PART THE CLAIM OF ERVIN D. HARPOLE, FOR THE COST
OF MOVING HIS HOUSEHOLD GOODS INCIDENT TO HIS RETIREMENT FROM THE U.S.
ARMY.
WHERE A SPECIFIED TRANSPORTATION EXPENSE, SUCH AS PACKING, IS USED
EXCLUSIVELY FOR THE ALLOWABLE WEIGHT OF HOUSEHOLD GOODS, THEN JTR,
PARAGRAPH M8007-2 SHOULD NOT BE APPLIED TO PRORATE THIS SPECIFIED
EXPENSE EVEN IF GOODS IN EXCESS OF THIS ALLOWABLE WEIGHT ARE ALSO
SHIPPED. THE REASON FOR THIS IS ONLY THOSE EXPENSES WHICH CANNOT BE
ASSOCIATED WITH EITHER THE ALLOWABLE GOODS OR THE EXCESS GOODS, FOR
EXAMPLE, STATE TAXES, GAS AND TOLLS, SHOULD BE BORNE PROPORTIONATELY BY
ALL OF THE MEMBER'S POSSESSIONS SHIPPED. ALSO, A MEMBER WHO IS RETIRED
FOR PHYSICAL DISABILITY IS AUTHORIZED MILEAGE ALLOWANCE TO HIS SELECTED
HOME, WHICH IS SEPARATE AND DISTINCT FROM THE ALLOWANCE FOR
TRANSPORTATION OF HOUSEHOLD GOODS.
TO MSGT. ERVIN D. HARPOLE:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 12, 1972, FORWARDED
HERE BY MR. GORSETH'S LETTER OF JUNE 20, 1972, WHERE YOU IN EFFECT
REQUEST RECONSIDERATION OF THE DENIAL BY THE TRANSPORTATION AND CLAIMS
DIVISION OF FULL REIMBURSEMENT FOR THE CLAIMED COST OF MOVING YOUR
HOUSEHOLD GOODS INCIDENT TO YOUR RETIREMENT FROM THE U.S. ARMY.
SPECIAL ORDERS NUMBER 190, DEPARTMENT OF THE ARMY, WASHINGTON, D. C.
20315, SEPTEMBER 30, 1970, BY REASON OF PHYSICAL DISABILITY PLACED YOU
ON THE RETIRED LIST EFFECTIVE OCTOBER 15, 1970, IN THE GRADE OF MASTER
SERGEANT (E-8) AND RELIEVED YOU OF YOUR ASSIGNMENT AT FORT BRAGG, NORTH
CAROLINA.
BY LETTER OF JANUARY 28, 1970, TO THE CHIEF, TRANSPORTATION OFFICE,
FORT BENJAMIN HARRISON, INDIANAPOLIS, INDIANA 46216, YOU REQUESTED
PERMISSION TO MOVE YOUR HOUSEHOLD GOODS, INCLUDING GOODS IN EXCESS OF
THE WEIGHT AUTHORIZED FOR YOUR GRADE, AND YOU REQUESTED REIMBURSEMENT AT
THE STANDARD HAULING RATES. IN REPLY, YOU WERE INSTRUCTED TO SUBMIT
YOUR REQUEST TO THE TRANSPORTATION OFFICER HAVING JURISDICTION OVER THE
AREA FROM WHICH THE GOODS WERE TO BE SHIPPED.
YOU HAVE SAID THAT YOU CONTACTED THE TRANSPORTATION OFFICER AT FORT
BRAGG, MR. SWEAT, AND WERE TOLD THAT YOU WOULD NOT BE PAID STANDARD
HAULING RATES, BUT THAT YOU WOULD BE REIMBURSED ALL EXPENSES INCURRED IN
MOVING YOUR HOUSEHOLD GOODS. ALSO YOU SAY THAT YOU WERE INFORMED THAT
THE COST OF COMMERCIAL TRANSPORTATION OF YOUR AUTHORIZED WEIGHT OF
HOUSEHOLD GOODS (9,000 POUNDS) FROM THE FORT BRAGG AREA TO THE STATE OF
WASHINGTON, WAS APPROXIMATELY $1,700. ADDITIONALLY, YOU SAY YOU
TRANSPORTED YOUR HOUSEHOLD GOODS IN YOUR OWN TRUCK, THAT HEAVY WELDING
EQUIPMENT AND TWO QUARTER HORSES WERE CARRIED IN AN 8' X 20' TRAILER,
AND THAT PRIOR TO DEPARTURE YOU TOOK YOUR LOADED TRUCK TO FORT BRAGG FOR
INSPECTION, BUT THAT MR. SWEAT DID NOT WISH TO INSPECT IT.
YOU MADE CLAIM FOR $832.81 ($832.91) FOR MOVING YOUR HOUSEHOLD GOODS
TOTALING 9,000 POUNDS PLUS PACKING, FROM FAYETTEVILLE, NORTH CAROLINA,
TO TROY, IDAHO, WHICH APPARENTLY WAS YOUR HOME OF SELECTION UPON
RETIREMENT. THIS AMOUNT INCLUDED $361.25 FOR PACKING AND LOADING,
$15.25 STATE TAXES, $451.61 FOR GAS AND $4.80 IN TOLLS, FOR WHICH YOU
SUPPLIED RECEIPTS.
OUR TRANSPORTATION AND CLAIMS DIVISION COMPUTED THE GAS COST TO BE
$452.36, AND ALL YOUR EXPENSES TO TOTAL $833.41 (THE CORRECT TOTAL IS
$833.66). THE PRO RATA SHARE OF EXPENSES ATTRIBUTED TO YOUR AUTHORIZED
WEIGHT ALLOWANCE OF 9,000 POUNDS OF THE ENTIRE SHIPMENT WHICH WEIGHED
21,080 POUNDS (9,000/21,080 X $833.41) WAS $355.82, LESS $166.26, THE
MILEAGE ALLOWANCE FOR YOUR PERSONAL TRAVEL WHICH YOU PREVIOUSLY
RECEIVED, AND YOU WERE PAID THE DIFFERENCE, $189.56, BY VOUCHER DATED
JUNE 1, 1972.
IN YOUR LETTER YOU EXPRESS THE OPINION THAT YOU SHOULD BE PAID ALL
CLAIMED EXPENSES, AS THE COST TO THE GOVERNMENT FOR THE SHIPMENT OF YOUR
AUTHORIZED ALLOWANCE OF HOUSEHOLD GOODS WOULD HAVE BEEN APPROXIMATELY
$1,700. YOU SAY THAT YOUR AUTHORIZED ALLOWANCE WAS 9,000 POUNDS PLUS 10
PERCENT PACKING FOR A TOTAL ALLOWANCE OF 9,900 POUNDS, AND THAT SUCH
AMOUNT WAS PACKED IN YOUR TRUCK WHICH REQUIRED ALL OF THE PACKING
INCLUDED IN THE $361.25 CHARGE, AND THAT NO PACKING WAS USED IN
CONNECTION WITH THE TRANSPORTATION OF TOOLS, WELDING RODS, A WELDER, AND
OTHER HEAVY EQUIPMENT, OR FOR TWO HORSES, SUCH POSSESSIONS HAVING BEEN
PLACED IN A LARGE TRAILER AND TOWED BY YOUR TRUCK.
PARAGRAPH M8260-1, OF THE JOINT TRAVEL REGULATIONS PROVIDES IN
PERTINENT PART THAT A MEMBER ON ACTIVE DUTY IS ENTITLED TO SHIPMENT OF
HIS HOUSEHOLD GOODS FROM HIS LAST PERMANENT DUTY STATION TO THE HOME
SELECTED BY THE MEMBER FOR THE PURPOSE OF RECEIVING TRAVEL ALLOWANCES
FOR HIS TRAVEL, WHEN HE IS RETIRED FOR PHYSICAL DISABILITY.
THE REGULATIONS WHICH GOVERN REIMBURSEMENT TO A MEMBER WHO PERSONALLY
ARRANGES FOR THE SHIPMENT OF HIS HOUSEHOLD GOODS ARE CONTAINED IN
PARAGRAPH M8500 OF THE JOINT TRAVEL REGULATIONS, PROMULGATED UNDER THE
AUTHORITY OF 37 U.S.C. 406. THOSE REGULATIONS PROVIDE THAT WHEN SUCH
ARRANGEMENT IS MADE BECAUSE A SHIPPING OR TRANSPORTATION OFFICER IS NOT
AVAILABLE OR BECAUSE THE MEMBER IS INSTRUCTED BY SUCH OFFICER TO MAKE
SHIPMENT AT PERSONAL EXPENSE, HE IS ENTITLED TO REIMBURSEMENT OF THE
ACTUAL COST OF SUCH SHIPMENT. THEY FURTHER PROVIDE THAT IN ALL OTHER
CASES A MEMBER WHO ARRANGES FOR THE SHIPMENT OF HIS HOUSEHOLD GOODS AT
PERSONAL EXPENSE IS ENTITLED TO REIMBURSEMENT OF SUCH COSTS NOT TO
EXCEED THE COST WHICH WOULD HAVE BEEN INCURRED BY THE GOVERNMENT HAD THE
SHIPMENT BEEN MADE BY A SHIPPING OR TRANSPORTATION OFFICER.
PARAGRAPH M8007-2 OF THE REGULATIONS STATES THAT THE MEMBER WILL BEAR
ALL TRANSPORTATION COSTS FOR WEIGHTS IN EXCESS OF THE PRESCRIBED MAXIMUM
ALLOWANCE. IN DETERMINING THE COST ATTRIBUTABLE TO THE EXCESS WEIGHT,
THE TOTAL COST OF TRANSPORTATION, LESS THE COST OF TRANSPORTING
UNAUTHORIZED ARTICLES SHALL BE PRORATED ON THE BASIS THAT THE MEMBER
BEARS THE PORTION THEREOF THAT THE EXCESS NET WEIGHT BEARS TO THE TOTAL
NET WEIGHT TRANSPORTED; E.G., IF A MEMBER WITH A PRESCRIBED WEIGHT
ALLOWANCE OF 7,500 POUNDS TRANSPORTS 8,000 POUNDS OF AUTHORIZED
ARTICLES, EXCESS SHALL BE COMPUTED ON THE BASIS OF 500/8000 OF ALL COSTS
OF TRANSPORTATION OF AUTHORIZED ARTICLES OF HOUSEHOLD GOODS.
PARAGRAPH M8003-1 OF THE REGULATIONS PRESCRIBES THE WEIGHT ALLOWANCES
FOR MEMBERS OF THE UNIFORMED SERVICES. THE PERMANENT CHANGE OF STATION
WEIGHT ALLOWANCE FOR ENLISTED PERSONNEL GRADE E-8, IS 9,000 POUNDS.
PARAGRAPH M8002-1 OF THE REGULATIONS PROVIDES THAT THE ALLOWANCES ARE
INTENDED TO REPRESENT THE ACTUAL NET WEIGHTS OF HOUSEHOLD GOODS
AUTHORIZED TO BE TRANSPORTED AT GOVERNMENT EXPENSE. WHENEVER
PRACTICABLE, THE ACTUAL NET WEIGHT OF HOUSEHOLD GOODS WILL BE
ESTABLISHED AND SUCH ACTUAL NET WEIGHT WILL BE USED IN DETERMINING
WHETHER OR NOT THE MEMBER'S WEIGHT ALLOWANCE HAS BEEN EXCEEDED. WHEN
THE ACTUAL NET WEIGHT OF UNPACKED AND UNCRATED HOUSEHOLD GOODS IS NOT
KNOWN AND SHIPMENT IS MADE IN UNCRATED CONDITION BY MOTOR VAN OR FREIGHT
FORWARDER THE NET WEIGHT OF THE HOUSEHOLD GOODS CHARGEABLE AGAINST THE
MEMBER'S PRESCRIBED WEIGHT ALLOWANCE WILL BE DETERMINED BY SUBTRACTING
10 PERCENT FROM THE GROSS WEIGHT OF SUCH SHIPMENT.
YOU HAVE CERTIFIED THAT THE PACKING AND LOADING EXPENSE OF $361.25
WAS SOLELY FOR THE AUTHORIZED ALLOWANCE OF HOUSEHOLD GOODS, WHICH
TOTALED 9,000 POUNDS PLUS THE WEIGHT OF PACKING MATERIALS. IN THE
ABSENCE OF CONTRARY INDICATION FROM OFFICIAL SOURCES AND IN VIEW OF THE
NATURE OF THE PROPERTY WHICH YOU TRANSPORTED, SUCH CERTIFICATE MAY BE
CONSIDERED AS ESTABLISHING THAT THERE WAS NO PACKING OR LOADING OF
UNAUTHORIZED PROPERTY INCLUDED IN THIS EXPENSE.
IN CIRCUMSTANCES WHERE A SPECIFIED TRANSPORTATION EXPENSE (SUCH AS
PACKING) IS USED EXCLUSIVELY FOR THE ALLOWABLE WEIGHT OF HOUSEHOLD
GOODS, WE DO NOT BELIEVE THAT PARAGRAPH M8007-2 OF THE JOINT TRAVEL
REGULATIONS REQUIRES THAT ANY PART OF SUCH EXPENSE SHOULD BE ATTRIBUTED
TO OTHER PROPERTY OF THE MEMBER WHICH ALSO IS BEING TRANSPORTED. IN OUR
VIEW, ONLY THOSE EXPENSES WHICH CANNOT BE ASSOCIATED WITH EITHER THE
ALLOWABLE AMOUNT OF HOUSEHOLD GOODS OR EXCESS HOUSEHOLD GOODS OR OTHER
ITEMS, SHOULD BE BORNE PROPORTIONATELY BY ALL OF THE MEMBER'S
POSSESSIONS.
CONSEQUENTLY, YOU MAY BE REIMBURSED FULLY FOR THE $361.25 COST OF
PACKING THE ALLOWABLE AMOUNT OF YOUR HOUSEHOLD GOODS, AND THE COST
SHARING FORMULA PRESCRIBED IN PARAGRAPH M8007-2 IS LIMITED IN
APPLICATION TO $472.41, THE TOTAL COST OF STATE TAXES, GAS, AND TOLL
CHARGES. SINCE IN ACCORD WITH PARAGRAPH M8002-1 OF THE REGULATIONS YOU
ARE ENTITLED TO DEDUCT 10 PERCENT FROM THE PACKED WEIGHT OF YOUR
HOUSEHOLD GOODS TO DETERMINE THE NET WEIGHT, AND YOU SAY THE PACKED
WEIGHT WAS 9,900 POUNDS, YOU WERE ENTITLED TO GOVERNMENT TRANSPORTATION
FOR SUCH GOODS. AS THE TOTAL WEIGHT OF YOUR SHIPMENT WAS 21,080 POUNDS,
THE AMOUNT OF EXCESS TRANSPORTATION COST IS DETERMINED ON THE BASIS OF
11,180 (21,080 - 9,900) /21,080 MULTIPLIED BY $472.41 WHICH IS $250.38.
THEREFORE, YOUR ENTITLEMENT TO REIMBURSEMENT FOR THESE EXPENSES IS
LIMITED TO $222.03 ($472.41 - $250.38). SEE DECISION B-154965, APRIL
12, 1965, COPY ENCLOSED.
THE JOINT TRAVEL REGULATIONS PROVIDE (PAR. M4158-1) THAT A MEMBER ON
ACTIVE DUTY WHO IS RETIRED FOR PHYSICAL DISABILITY MAY SELECT HIS HOME
AND BE ENTITLED TO TRAVEL AND TRANSPORTATION ALLOWANCES THERETO. YOU
WERE AUTHORIZED PAYMENT OF A MILEAGE ALLOWANCE OF $166.26 FOR YOUR
PERSONAL TRANSPORTATION. AS THIS ALLOWANCE IS SEPARATE AND DISTINCT
FROM ALLOWANCE FOR THE TRANSPORTATION OF HOUSEHOLD GOODS, IT PROPERLY
MAY NOT BE DEDUCTED FROM HOUSEHOLD GOODS SHIPPING ALLOWANCE, EVEN WHERE
THE GOODS ARE TRANSPORTED IN THE MEMBER'S OWN VEHICLE.
THEREFORE, YOU ARE ENTITLED TO SHIPPING ALLOWANCE OF $583.28, WHICH
INCLUDES $361.25 COST OF PACKING OF HOUSEHOLD GOODS, AND $222.03, THE
PROPORTIONATE SHARE OF OTHER TRANSPORTATION EXPENSES FOR THE ALLOWABLE
AMOUNT OF SUCH GOODS, LESS THE PRIOR PAYMENT OF $189.56. PAYMENT OF THE
AMOUNT DUE, $393.72 FOR MOVING YOUR HOUSEHOLD EFFECTS PLUS $166.26
MILEAGE OR A TOTAL OF $559.98 WILL ISSUE IN DUE COURSE.
WHILE THE TOTAL COST TO THE GOVERNMENT OF THE SHIPMENT OF THE
ALLOWABLE AMOUNT OF YOUR HOUSEHOLD POSSESSIONS APPEARS TO BE LESS THAN
THE COST OF SHIPMENT BY COMMON CARRIER AT GOVERNMENT EXPENSE, YOUR
ENTITLEMENT TO REIMBURSEMENT IS LIMITED TO THAT PROVIDED IN THE JOINT
TRAVEL REGULATIONS, AND MAY NOT INCLUDE REIMBURSEMENT FOR THE
TRANSPORTATION OF OTHER GOODS. ADDITIONALLY, IT SHOULD BE REMEMBERED
THAT YOU CHOSE TO HAUL THE GOODS IN YOUR OWN VEHICLE, BECAUSE IT SERVED
YOUR PERSONAL NEEDS, AND NOT BECAUSE OF GOVERNMENT NECESSITY. SEE
DECISION B-154965, SUPRA.
B-176653, DEC 13, 1972
MILITARY PERSONNEL - TEMPORARY DUTY - PERMANENT CHANGE OF STATION
DECISION DENYING THE CLAIM OF LT. COL. TED K. CASE, USAF FOR TRAVEL
ALLOWANCE INCIDENT TO TEMPORARY DUTY AND PERMANENT CHANGE OF STATION
TRAVEL TO DAVIS-MONTHAN AIR FORCE BASE, ARIZ.
WHERE A MEMBER RECEIVES A TEMPORARY DUTY ORDER AND PERMANENT CHANGE
OF STATION ORDER AT THE SAME TIME, THEN HE IS NOT ENTITLED TO ANY
ALLOWANCES FOR TEMPORARY DUTY OR RETURN TRAVEL, JTR, PARAGRAPH M4209,
BUT RATHER HE IS ONLY ENTITLED TO PERMANENT CHANGE OF STATION
ALLOWANCES.
TO MAJ. A. M. HARRELL:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 27, 1972, ACF,
WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO THE PROPER
ENTITLEMENT OF LIEUTENANT COLONEL TED K. CASE, 527405571, USAF, TO
TRAVEL ALLOWANCES INCIDENT TO TEMPORARY DUTY AND PERMANENT
CHANGE-OF-STATION TRAVEL WHICH WAS PERFORMED UNDER THE DESCRIBED
CIRCUMSTANCES. THE REQUEST HAS BEEN ASSIGNED CONTROL NO. 72-35 BY THE
PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE, AND WAS
FORWARDED HERE ON JULY 26, 1972.
BY SPECIAL ORDERS TA-1227, JULY 23, 1971, COLONEL CASE WAS DIRECTED
TO PERFORM TEMPORARY DUTY AT DAVIS-MONTHAN AIR FORCE BASE, ARIZONA. THE
ORDERS INDICATED THAT THIS TEMPORARY DUTY WAS IN CONJUNCTION WITH A
PERMANENT CHANGE OF STATION TO DAVIS-MONTHAN AIR FORCE BASE. UPON
COMPLETION OF THIS TEMPORARY ASSIGNMENT, COLONEL CASE WAS TO RETURN TO
HIS PERMANENT STATION, MYRTLE BEACH AIR FORCE BASE, SOUTH CAROLINA.
SPECIAL ORDER A-1003, ALSO DATED JULY 23, 1971, DIRECTED COLONEL CASE TO
PROCEED ON A PERMANENT CHANGE OF STATION TO DAVIS-MONTHAN AIR FORCE
BASE.
SPECIAL ORDER A-1003 WAS SUPPOSEDLY REVOKED BY SPECIAL ORDER A-1050,
JULY 28, 1971, WHICH INDICATED THAT NEW PERMANENT CHANGE-OF-STATION
ORDERS WOULD BE PUBLISHED UPON SUCCESSFUL COMPLETION OF TRAINING.
SPECIAL ORDER A-1109, AUGUST 5, 1971, PURPORTED TO REVOKE SPECIAL ORDER
A-1050 AND TO REVALIDATE THE ORIGINAL PERMANENT CHANGE-OF-STATION ORDER,
SPECIAL ORDER A-1003. FINALLY, SPECIAL ORDER TA-1320, AUGUST 10, 1971,
SUPPOSEDLY RESCINDED SPECIAL ORDER TA-1227, THE ORIGINAL TEMPORARY DUTY
ORDER. APPARENTLY, NONE OF THESE LATER ORDERS (A-1050, A-1109, TA-1320)
WERE RECEIVED BY COLONEL CASE UNTIL HIS RETURN TO MYRTLE BEACH AIR FORCE
BASE ON AUGUST 16, 1971. IN ADDITION, A STATEMENT SIGNED BY HIM
INDICATES NO KNOWLEDGE ON HIS PART OF THE EXISTENCE OF THESE ORDERS
UNTIL HE RETURNED FROM DAVIS-MONTHAN AIR FORCE BASE.
ON THE BASIS OF THE ABOVE FACTS, YOU HAVE ASKED FOR OUR DECISION ON
THE FOLLOWING QUESTIONS:
"A. IS LT. COLONEL CASE ENTITLED TO TDY ALLOWANCES PERFORMED UNDER
THE AUTHORITY OF S.O. TA-1227, 23 JULY 1971 AS DAVIS-MONTHAN AFB, AZ WAS
NOT ONLY THE TDY POINT BUT LATER THE CONFIRMED PERMANENT CHANGE OF
STATION POINT? OR,
"B. IS LT. COLONEL CASE ENTITLED ONLY TO REIMBURSEMENT FOR THE
PERMANENT CHANGE OF STATION ALLOWANCES SINCE ORDERS WERE ISSUED AT HIS
OLD STATION PRIOR TO HIS DEPARTURE FOR TDY?
"C. IF THE ANSWER TO B. ABOVE IS AFFIRMATIVE, MUST COLLECTION BE
MADE FOR THE COST OF THE RETURN TRIP PORTION OF T/R R1, 600,955 ISSUED
23 JULY 1971?"
IN A SUBSEQUENT LETTER YOU ASK FOR A DECISION ON THE FOLLOWING ISSUE:
"3. FURTHER THERE IS REASONABLE DOUBT IF VALID PCS ORDERS HAVE BEEN
ISSUED LT. COLONEL CASE, DUE TO THE REVOCATION ACTIONS OF THE ISSUING
AUTHORITY 354TH CSGP (TAC), MYRTLE BEACH AFB, S.C. ***."
SECTION 404 OF TITLE 37, U.S. CODE, AUTHORIZES A MEMBER OF THE
UNIFORMED SERVICE TO RECEIVE TRAVEL AND TRANSPORTATION ALLOWANCES IN
CONJUNCTION WITH TRAVEL PERFORMED OR TO BE PERFORMED UNDER ORDERS.
PARAGRAPH M4200 OF THE JOINT TRAVEL REGULATIONS ENTITLES A MEMBER TO
RECEIVE PER DIEM AND TRANSPORTATION ALLOWANCES FOR TEMPORARY DUTY
PERFORMED AWAY FROM HIS PERMANENT STATIONS. A MEMBER MAY NOT RECEIVE
TEMPORARY DUTY ALLOWANCES AT HIS PERMANENT STATION.
PARAGRAPH M4209 OF THE JOINT TRAVEL REGULATIONS PROVIDES THAT A
MEMBER WHO RECEIVED PERMANENT CHANGE-OF-STATION ORDERS AT A TEMPORARY
DUTY STATION DESIGNATING THE TEMPORARY DUTY STATION AS HIS NEW PERMANENT
STATION SHALL NOT BE ENTITLED TO PER DIEM AT THAT STATION BEGINNING ON
THE DATE OF RECEIPT OF SUCH PERMANENT CHANGE-OF-STATION ORDERS NOR TO
ALLOWANCES FOR TRAVEL TO THE OLD PERMANENT STATION UNLESS THE PERMANENT
CHANGE-OF-STATION ORDERS DIRECT A RETURN THERETO ON OFFICIAL BUSINESS.
THEREFORE, IF A MEMBER RECEIVES PERMANENT CHANGE-OF-STATION ORDERS PRIOR
TO HIS DEPARTURE ON TEMPORARY DUTY, HIS TRAVEL IS PURSUANT TO THE
PERMANENT CHANGE-OF-STATION ORDERS, AND HE IS NOT ENTITLED TO ANY
ALLOWANCES FOR TEMPORARY DUTY OR RETURN TRAVEL.
ON THE BASIS OF THE RECORD PRESENTED, IT IS NOT ENTIRELY CLEAR WHEN
COLONEL CASE RECEIVED SPECIAL ORDER A-1003, THE ORIGINAL PERMANENT
CHANGE-OF-STATION ORDER. HOWEVER, SINCE SPECIAL ORDER A-1003 WAS DATED
JULY 23, 1971, AS WAS SPECIAL ORDER TA-1227, THE TEMPORARY DUTY ORDER,
AND SINCE COLONEL CASE RECEIVED THE LATTER ORDER, IT IS ASSUMED THAT HE
RECEIVED SPECIAL ORDER A-1003 PRIOR TO HIS DEPARTURE FROM MYRTLE BEACH
AIR FORCE BASE ON JULY 25, 1971. THEREFORE, PURSUANT TO PARAGRAPH
M4209, COLONEL CASE IS NOT ENTITLED TO EITHER TEMPORARY DUTY ALLOWANCES
OR RETURN TRAVEL TO HIS OLD PERMANENT STATION SINCE THERE IS NO
INDICATION THAT HE WAS DIRECTED TO RETURN THERE ON OFFICIAL BUSINESS.
IF, HOWEVER, COLONEL CASE DID NOT, IN FACT, RECEIVE SPECIAL ORDER
A-1003 PRIOR TO HIS DEPARTURE FROM MYRTLE BEACH AIR FORCE BASE, UPON
PRESENTATION OF APPROPRIATE EVIDENCE WE WILL RECONSIDER THE MATTER.
WE BELIEVE THAT COLONEL CASE WAS TRANSFERRED PURSUANT TO VALID
PERMANENT CHANGE-OF-STATION ORDERS AND THEREFORE IS ENTITLED TO
PERMANENT CHANGE-OF-STATION ALLOWANCES.
SINCE COLONEL CASE APPARENTLY RETURNED TO HIS OLD STATION PURSUANT TO
THE ERRONEOUS PROVISION IN HIS TEMPORARY DUTY ORDERS, COLLECTION FOR THE
RETURN PORTION OF T/R R1, 600,955 IS NOT REQUIRED.
B-176927, DEC 13, 1972
CIVILIAN PERSONNEL - TEMPORARY QUARTERS SUBSISTENCE EXPENSES
DECISION ALLOWING IN PART THE CLAIM OF CHARLES A. WALKER, FOR
REIMBURSEMENT FOR TEMPORARY QUARTERS SUBSISTENCE EXPENSES FOR THE PERIOD
FEBRUARY 19-24, 1970, INCIDENT TO HIS PERMANENT CHANGE OF STATION AS AN
EMPLOYEE OF THE AIR NATIONAL GUARD.
THE PERIOD FOR WHICH AN EMPLOYEE AND HIS FAMILY MAY BE REIMBURSED
TEMPORARY QUARTERS SUBSISTENCE EXPENSES MUST BEGIN NOT LATER THAN 30
DAYS AFTER THE FAMILY VACATES THE RESIDENCE AT THE OLD OFFICIAL STATION.
OMB CIRCULAR NO. A-56, SECTION 2.5B(5). HOWEVER, THIS ELIGIBILITY
TERMINATES UPON OCCUPYING PERMANENT QUARTERS.
TO MR. CHARLES A. WALKER:
WE REFER FURTHER TO YOUR LETTER OF JULY 13, 1972, WHICH APPEALS THE
DISALLOWANCE AS STATED IN OUR TRANSPORTATION AND CLAIMS DIVISION
SETTLEMENT OF MAY 12, 1972, OF YOUR CLAIM FOR REIMBURSEMENT FOR
TEMPORARY QUARTERS SUBSISTENCE EXPENSES FOR THE PERIOD FEBRUARY 19-24,
1970, INCIDENT TO YOUR PERMANENT CHANGE OF STATION AS AN EMPLOYEE OF THE
AIR NATIONAL GUARD.
THE RECORD SHOWS THAT PURSUANT TO TRAVEL ORDER TO 2-47, DATED
FEBRUARY 14, 1970, YOU WERE AUTHORIZED A PERMANENT CHANGE OF STATION
FROM ST. LOUIS, MISSOURI, TO JEFFERSON CITY, MISSOURI. YOUR REPORTING
DATE AT YOUR NEW DUTY STATION WAS LISTED AS NOVEMBER 3, 1969, AND
TEMPORARY QUARTERS SUBSISTENCE ALLOWANCE WAS AUTHORIZED FOR UP TO 30
DAYS. THE RECORD SHOWS THAT THIS WRITTEN ORDER WAS A CONFIRMATION OF
VERBAL ORDERS WHICH HAD BEEN GIVEN BY YOUR COMMANDER DIRECTING YOU TO
TRAVEL TO YOUR NEW DUTY STATION ON NOVEMBER 3, 1969. YOUR DEPENDENTS
DID NOT PROCEED TO YOUR NEW DUTY STATION UNTIL FEBRUARY 19, 1970. YOU
AND YOUR DEPENDENTS OCCUPIED QUARTERS FROM FEBRUARY 19 TO FEBRUARY 21,
1970. ON FEBRUARY 21 YOU MOVED INTO PERMANENT QUARTERS. YOU ARE
CLAIMING REIMBURSEMENT FOR TEMPORARY QUARTERS SUBSISTENCE EXPENSES FOR
THE PERIOD FEBRUARY 19-20, AND SUBSISTENCE EXPENSES FOR THE PERIOD
FEBRUARY 21-24, 1970. THIS IS THE ONLY PERIOD FOR WHICH CLAIM FOR
TEMPORARY QUARTERS HAS BEEN MADE.
SECTION 2.5B(5) OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO.
A-56, REVISED JUNE 26, 1969, STATES:
"(5) THE USE OF TEMPORARY QUARTERS FOR SUBSISTENCE EXPENSE PURPOSES
UNDER THESE PROVISIONS MAY BEGIN AS SOON AS THE EMPLOYEE'S TRANSFER HAS
BEEN AUTHORIZED AND THE WRITTEN AGREEMENT REQUIRED IN 1.3C HAS BEEN
SIGNED. IN ORDER TO BE ELIGIBLE FOR THE TEMPORARY QUARTERS ALLOWANCE,
THE PERIOD OF USE OF SUCH QUARTERS FOR WHICH A CLAIM FOR REIMBURSEMENT
IS MADE MUST BEGIN NOT LATER THAN 30 DAYS FROM THE DATE THE EMPLOYEE
REPORTED FOR DUTY AT HIS NEW OFFICIAL STATION, OR IF NOT BEGUN DURING
THIS PERIOD, THEN NOT LATER THAN 30 DAYS FROM THE DATE THE FAMILY
VACATES THE RESIDENCE AT THE OLD OFFICIAL STATION BUT NOT BEYOND THE
MAXIMUM TIME FOR BEGINNING ALLOWABLE TRAVEL AND TRANSPORTATION."
THE RECORD SHOWS THAT EVEN THOUGH YOUR DEPENDENTS DID NOT ARRIVE AT
YOUR NEW DUTY STATION UNTIL SEVERAL WEEKS AFTER YOU REPORTED FOR DUTY,
OCCUPANCY OF TEMPORARY QUARTERS COMMENCED WITHIN THE TIME REQUIREMENTS
OF SECTION 5, ABOVE QUOTED, AND THAT TEMPORARY QUARTERS WERE AUTHORIZED
BY THE TRAVEL ORDERS DATED FEBRUARY 14, 1970. IT IS THEREFORE CONCLUDED
THAT YOU ARE ENTITLED TO SUBSISTENCE EXPENSES FOR FEBRUARY 19 AND 20,
1970, WHILE YOU AND YOUR FAMILY WERE OCCUPYING TEMPORARY QUARTERS.
HOWEVER, SINCE YOU MOVED INTO PERMANENT QUARTERS ON FEBRUARY 21, 1970,
YOUR ELIGIBILITY FOR TEMPORARY QUARTERS SUBSISTENCE ALLOWANCE TERMINATED
ON THAT DATE. WE HAVE CONSISTENTLY HELD THAT TEMPORARY QUARTERS
ALLOWANCE MUST BE DENIED FOR ANY PERIOD AFTER AN EMPLOYEE AND HIS FAMILY
BEGIN RESIDENCE IN THE DWELLING THEY WILL OCCUPY PERMANENTLY. YOUR
INABILITY TO HAVE THE GAS CONNECTED BEFORE FEBRUARY 24 DOES NOT OVERCOME
THE PROVISIONS OF THE REGULATION AND DECISIONS THEREON. SEE 46 COMP.
GEN. 709 (1967).
A SETTLEMENT WILL BE ISSUED IN YOUR FAVOR BY OUR TRANSPORTATION AND
CLAIMS DIVISION FOR ALLOWANCE OF THE AMOUNT FOUND DUE FOR FEBRUARY 19
AND 20, TO BE COMPUTED IN ACCORDANCE WITH SECTION 2.5D OF CIRCULAR NO.
A-56.
B-177091, DEC 12, 1972
CIVILIAN PERSONNEL - TRANSFER OF OFFICIAL STATION - REAL ESTATE EXPENSES
- CO-OWNERSHIP WITH NON-FAMILY MEMBER
DECISION ALLOWING THE CLAIM OF BETTY J. RITZ, FOR REIMBURSEMENT OF
REAL ESTATE TRANSACTION EXPENSES INCURRED IN CONNECTION WITH THE SALE OF
A RESIDENCE AND THE PURCHASE OF ANOTHER RESIDENCE INCIDENT TO HER
TRANSFER OF OFFICIAL STATION FROM ATLANTA, GA. TO GAINESVILLE, FLA.
REIMBURSEMENT OF REAL ESTATE EXPENSES MAY BE MADE ON A PRO RATA BASIS
TO AN EMPLOYEE WHO SHARES EQUALLY IN THE OWNERSHIP OF A RESIDENCE WITH A
PERSON WHO IS NOT A MEMBER OF HER IMMEDIATE FAMILY, OMB CIRCULAR NO.
A-56, SECTION 4.1C, 4.1F. THE PRECLUSION CONTAINED IN SECTION 4.1C IS
NOT FOR APPLICATION IN SUCH A CASE.
TO MR. ADOLPHUS PAYTON:
THIS REFERS TO YOUR LETTER OF SEPTEMBER 19, 1972, REQUESTING OUR
DECISION AS TO WHETHER A VOUCHER FOR REIMBURSEMENT OF REAL ESTATE
TRANSACTION EXPENSES CLAIMED IN ACCORDANCE WITH SUBSECTION 5724A(A)(4)
OF TITLE 5, UNITED STATES CODE, BY MISS BETTY J. RITZ MAY BE CERTIFIED
FOR PAYMENT.
THE RECORD SHOWS THAT MISS RITZ AND MISS SANDRA S. CULLEY, NOT A
MEMBER OF MISS RITZ' FAMILY, SHARED EQUALLY IN THE OWNERSHIP OF A
RESIDENCE LOCATED AT ATLANTA, GEORGIA, WHICH THEY SOLD INCIDENT TO MISS
RITZ' TRANSFER OF OFFICIAL STATION TO GAINESVILLE, FLORIDA. AT
GAINESVILLE MISS RITZ AND MISS CULLEY AGAIN SHARED EQUALLY THE COST OF
PURCHASING A NEW RESIDENCE AT THAT LOCATION.
MISS RITZ CLAIMS ONE HALF THE ALLOWABLE COSTS INCURRED IN CONNECTION
WITH THE SALE OF THE RESIDENCE AT ATLANTA AND THE PURCHASE OF THE
RESIDENCE AT GAINESVILLE. YOUR QUESTION AS TO THE PROPRIETY OF
CERTIFYING THE VOUCHER FOR PAYMENT ARISES FROM THE FOLLOWING PROVISIONS
OF SECTION 4 OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56:
"4.1 CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES ARE PAYABLE.
TO THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT WILL
REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN
CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION
*** PROVIDED THAT:
"C. TITLE REQUIREMENTS. THE TITLE TO THE RESIDENCE OR DWELLING AT
THE OLD OR NEW OFFICIAL STATION, OR THE INTEREST IN A COOPERATIVELY
OWNED DWELLING OR IN AN UNEXPIRED LEASE, IS IN THE NAME OF THE EMPLOYEE
ALONE, OR IN THE JOINT NAMES OF THE EMPLOYEE AND ONE OR MORE MEMBERS OF
HIS IMMEDIATE FAMILY, OR SOLELY IN THE NAME OF ONE OR MORE MEMBERS OF
HIS IMMEDIATE FAMILY ***"
SINCE MISS RITZ' OWNERSHIP OF BOTH RESIDENCES HAS BEEN SHARED EQUALLY
WITH A PERSON NOT A MEMBER OF HER IMMEDIATE FAMILY YOU SUGGEST THE
ABOVE-QUOTED PROVISION OF SUBSECTION 4.1C WOULD SEEM TO PRECLUDE THE
EMPLOYEE FROM ENTITLEMENT TO REIMBURSEMENT FOR THE EXPENSES CLAIMED.
AS YOUR LETTER POINTS OUT, SUBSECTION 4.1F OF CIRCULAR NO. A-56,
SUPRA, PROVIDES AS FOLLOWS:
"F. PAYMENT OF EXPENSES BY EMPLOYEE - PRO RATA ENTITLEMENT. THE
EXPENSES FOR WHICH REIMBURSEMENT IS CLAIMED WERE PAID BY THE EMPLOYEE.
IF ANY EXPENSES WERE SHARED BY PERSONS OTHER THAN THE EMPLOYEE,
REIMBURSEMENT IS LIMITED TO THE PORTION ACTUALLY PAID BY THE EMPLOYEE.
IF THE RESIDENCE IS A DUPLEX OR ANOTHER TYPE OF MULTIPLE OCCUPANCY
DWELLING WHICH IS OCCUPIED ONLY PARTIALLY BY THE EMPLOYEE, OR WHENEVER
THE EMPLOYEE SHARES RESPONSIBILITY FOR A LEASED PROPERTY (SUCH AS A
SHARED APARTMENT ARRANGEMENT), EXPENSES WILL BE REIMBURSED ON A PRO RATA
BASIS. ***"
IN VIEW OF THE LANGUAGE OF SUBSECTION 4.1C WHICH INCLUDES "THE
INTEREST IN A COOPERATIVELY OWNED DWELLING" AS A FORM OF OWNERSHIP FOR
WHICH REAL ESTATE TRANSACTION EXPENSES ARE REIMBURSABLE AND THE INTENT
OF SUBSECTION 4.1F TO PERMIT REIMBURSEMENT ON A PRO RATA BASIS WHEN THE
EMPLOYEE'S INTEREST IN A RESIDENCE IS LESS THAN TITLE TO THE ENTIRE
PROPERTY OF WHICH IT IS A PART WE BELIEVE REIMBURSEMENT IS ALLOWABLE
UNDER THE CIRCUMSTANCES OF THIS CASE.
ACCORDINGLY, MISS RITZ MAY BE REIMBURSED HER SHARE OF THE ALLOWABLE
EXPENSES OF SALE AND PURCHASE OF EACH RESIDENCE NOTWITHSTANDING THE FACT
THAT THE COOWNER IN EACH CASE WAS NOT A MEMBER OF HER IMMEDIATE FAMILY.
THE VOUCHER AND ATTACHMENTS TO YOUR LETTER ARE RETURNED HEREWITH.
THE VOUCHER MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE CORRECT.
B-177378, DEC 12, 1972