DECISION DENYING PROTEST BY MRC CORPORATION LOW BIDDER, AGAINST
ADMINISTRATIVE DETERMINATION THAT ITS BID TO FURNISH HAMPER DUMPERS TO
THE POST OFFICE DEPARTMENT WAS NONRESPONSIVE.
AN AMENDMENT TO THE SOLICITATION WHICH ALLOWS THE GOVERNMENT TO
PURCHASE ADDITIONAL QUANTITIES THAT IT MIGHT REQUIRE AND RELIEVING
ITSELF OF THE OBLIGATION TO DO SO AS THE ORIGINAL LIMITATION PROVIDED,
SO MATERIALLY CHANGES THE ADVERTISED REQUIREMENTS OF THE IFB THAT THE
AMENDMENT MUST BE ACKNOWLEDGED BY ALL BIDDERS, AND PROTESTANT'S FAILURE
TO DO SO MUST RENDER ITS BID NONRESPONSIVE.
TO MRC CORPORATION:
REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1971, AND PRIOR
CORRESPONDENCE, PROTESTING AWARD OF ITEM III OF INVITATION FOR BIDS
(IFB) NO. 3050 BY THE POST OFFICE DEPARTMENT (POD), BUREAU OF
FACILITIES, OFFICE OF PROCUREMENT, SUPPLY DIVISION, WASHINGTON, D.C., TO
A BIDDER OTHER THAN THE MRC CORPORATION.
THE IFB, ISSUED OCTOBER 8, 1970, SOLICITED BIDS ON FOUR ITEMS OF
HAMPER DUMPERS. ITEM III SOLICITED F.O.B. DESTINATION BIDS ON 25 HAMPER
DUMPERS PER POD SPECIFICATION POD-H-418(RE). ITEM IV SOLICITED BIDS ON
AN ADDITIONAL SIX UNITS IN ACCORDANCE WITH THE SAME SPECIFICATION. THE
INVITATION STATED THAT THE QUANTITY IN ITEM IV WAS ESTIMATED ONLY AND
THAT POD RESERVED THE RIGHT TO ORDER MORE OR LESS, AS REQUIRED, DURING
THE PERIOD BEGINNING WITH THE DATE THE PREPRODUCTION SAMPLE WAS
APPROVED, AND ENDING DECEMBER 31, 1971. THE INVITATION FURTHER PROVIDED
THAT AWARD WOULD BE MADE FOR ITEMS I AND II COMBINED AND FOR ITEMS III
AND IV COMBINED, OR FOR ALL FOUR ITEMS COMBINED, WHICHEVER WAS MOST
ADVANTAGEOUS TO THE GOVERNMENT.
AMENDMENT 1 TO THE IFB, ISSUED OCTOBER 21, 1970, ADVISED WHERE A
PROTOTYPE OF ITEM III COULD BE EXAMINED BY BIDDERS; DELETED ITEMS II
AND IV FROM THE INVITATION; EXTENDED DELIVERY TIME FROM 60 TO 120 DAYS
AFTER ACCEPTANCE OF THE PREPRODUCTION MODEL; REVISED THE METHOD OF
AWARD TO REFLECT THE DELETION OF ITEMS II AND IV; PROVIDED THAT
BIDDERS, IF THEY DESIRED, COULD OFFER A 20-PERCENT ADDITIONAL QUANTITY
OPTION FOR ITEMS I AND III AT THEIR QUOTED BID PRICES; AND INCREASED
THE QUANTITY OF ITEM III FROM 25 TO 26 UNITS.
SIX BIDS WERE OPENED NOVEMBER 9, 1970, AND THE UNIT PRICES BID ON
ITEM III WERE AS FOLLOWS:
BIDDER UNIT PRICE
MRC CORPORATION $2,630.00
CUSTOM CONTROLS COMPANY $2,864.36
ENGINEERED PRODUCTS COMPANY $2,994.00
STEWART-GLAPAT CORPORATION $4,527.55
MELLO CONSULTANTS $5,200.00
UHRDEN, INC. $5,338.94 THE CONTRACTING OFFICER DECIDE
NONRESPONSIVE DUE TO ITS FAILURE TO ACKNOWLEDGE RECEIPT OF AMENDMENT 1.
YOU CONTEND THAT THE FAILURE TO ACKNOWLEDGE THE AMENDMENT SHOULD HAVE
BEEN WAIVED PURSUANT TO SECTION 10(B) OF STANDARD FORM 33A WHICH
PROVIDES THAT "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL
OFFERS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN OFFERS
RECEIVED." FURTHER, YOU REFER TO SECTION 1-2.405 OF THE FEDERAL
PROCUREMENT REGULATIONS:
"A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER
OF FORM AND NOT OF SUBSTANCE OR PERTAINS TO SOME IMMATERIAL OR
INCONSEQUENTIAL DEFECT OR VARIATION OF A BID FROM THE EXACT REQUIREMENT
OF THE INVITATION FOR BIDS, THE CORRECTION OR WAIVER OF WHICH WOULD NOT
BE PREJUDICIAL TO OTHER BIDDERS. THE DEFECT OR VARIATION IN THE BID IS
IMMATERIAL AND INCONSEQUENTIAL WHEN ITS SIGNIFICANCE AS TO PRICE,
QUANTITY, QUALITY, OR DELIVERY IS TRIVIAL OR NEGLIGIBLE WHEN CONTRASTED
WITH THE TOTAL COST OR SCOPE OF THE SUPPLIES OR SERVICES BEING PROCURED.
THE CONTRACTING OFFICER SHALL EITHER GIVE THE BIDDER AN OPPORTUNITY TO
CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY
IN A BID OR WAIVE SUCH DEFICIENCY, WHICHEVER IS TO THE ADVANTAGE OF THE
GOVERNMENT. EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:
"(D) FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN
INVITATION FOR BIDS, BUT ONLY IF:
"(2) THE AMENDMENT INVOLVES ONLY A MATTER OF FORM OR IS ONE WHICH HAS
EITHER NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE,
QUANTITY, QUALITY, OR DELIVERY OF THE ITEM BID UPON."
ALTHOUGH A MATERIAL DEVIATION IN BID ORDINARILY IS CONSIDERED TO BE
AN IRREGULARITY HAVING MORE THAN A TRIVIAL OR NEGLIGIBLE EFFECT ON
PRICE, QUANTITY, QUALITY, OR DELIVERY, AN IRREGULARITY IN A BID
RESULTING IN BENEFITS TO A BIDDER NOT EXTENDED TO ALL BIDDERS IS A
VARIANCE RENDERING THE BID NONRESPONSIVE. 39 COMP. GEN. 259 (1959); 37
ID. 110 (1957); AND 36 ID. 535 (1957).
FURTHER EXPLANATION FOR THE RULE REQUIRING REJECTION OF BIDS THAT
FAIL TO ACKNOWLEDGE AMENDMENTS CREATING SUBSTANTIVE CHANGES IN THE IFB
IS FOUND IN B-150563, FEBRUARY 28, 1963, AS FOLLOWS:
" *** THE REASON FOR THE RULE IS THAT A BID SUBMITTED IN RESPONSE TO
AN INVITATION ISSUED BY AN AGENCY OF THE GOVERNMENT CONSTITUTES AN
OFFER; THE AWARD IS AN ACCEPTANCE WHICH EFFECTS A BINDING AGREEMENT
BETWEEN THE TWO PARTIES. IT IS WELL RECOGNIZED THAT AN OFFER IS TO BE
INTERPRETED IN ACCORDANCE WITH ITS CLEAR LANGUAGE. THE ACCEPTANCE OF A
BID WHICH OFFERS TO PERFORM ON A BASIS OTHER THAN THE TERMS OF THE
INVITATION INCLUDING ANY AMENDMENTS WOULD BE CONTRARY TO THE STATUTES
GOVERNING ADVERTISED PROCUREMENTS. UNITED STATES V ELLICOTT, 223 U.S.
524 (1911). *** "
IN LIGHT OF THE FOREGOING, IT IS OUR VIEW THAT THE AMENDMENT
MATERIALLY CHANGED THE ADVERTISED REQUIREMENTS OF THE IFB AND THAT THE
FAILURE OF MRC TO ACKNOWLEDGE THE AMENDMENT RENDERED ITS BID
NONRESPONSIVE. THIS CONCLUSION IS BASED ON THE FACT THAT A CONTRACT
RESULTING FROM THE ORIGINAL INVITATION WOULD HAVE REQUIRED THE
GOVERNMENT TO PROCURE FROM THE SUCCESSFUL CONTRACTOR THROUGH DECEMBER
31, 1971, ALL OF ITS NEEDS FOR HAMPER DUMPERS PER POD SPECIFICATION
POD-H-418(RE) IN EXCESS OF 25 UNITS, WHICH NEEDS WERE ESTIMATED AT SIX
UNITS IN ITEM IV, WHEREAS, UNDER A CONTRACT AWARDED IN ACCORDANCE WITH
THE AMENDED INVITATION, THE GOVERNMENT WOULD HAVE THE SOLE RIGHT TO
DETERMINE WHETHER IT WOULD PURCHASE AN ADDITIONAL 20 PERCENT OF ITEM III
AT THE BID PRICE FOR THAT ITEM AND THEN ONLY IF THE CONTRACTOR PROVIDED
FOR SUCH AN OPTION IN ITS BID. IT IS APPARENT FROM THE AMENDMENT THAT
ALTHOUGH POD WAS ATTEMPTING TO OBTAIN AN OPTION TO PURCHASE ADDITIONAL
QUANTITIES THAT IT MIGHT REQUIRE OVER AND ABOVE ITEM III, IT WAS BY NO
MEANS OBLIGATING ITSELF TO DO SO AS THE ORIGINAL INVITATION PROVIDED.
THEREFORE, WE VIEW THE BID WITHOUT THE AMENDMENT AS A BID IMPOSING UPON
POD A LIABILITY THAT THE DEPARTMENT OBVIOUSLY DID NOT INTEND TO ASSUME.
BECAUSE OF THIS CONCLUSION, IT IS NOT NECESSARY TO CONSIDER WHETHER THE
OTHER CHANGES INCLUDED IN THE AMENDMENT WERE LIKEWISE MATERIAL.
YOU FURTHER CONTEND THAT PARAGRAPH 10(C) OF STANDARD FORM 33A WOULD
HAVE PERMITTED AN AWARD TO YOU FOR A QUANTITY LESS THAN THAT SPECIFIED
IN THE IFB. IN THAT CONNECTION, YOU REFER TO THE STATEMENT IN PARAGRAPH
10(C) WHICH PROVIDES THAT "UNLESS OTHERWISE PROVIDED IN THE SCHEDULE,
OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED;
AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A
QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED
UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER." YOU STATE FURTHER
THAT POD NOTICE 70, DATED MARCH 1970, AWARD OF CONTRACT, CHANGES THE
PHRASE "UNLESS OTHERWISE PROVIDED IN THE SCHEDULE" IN ARTICLE 10(C)
ABOVE TO "WHEN SPECIFIED IN THE SOLICITATION," AND YOU INQUIRE AS TO THE
MEANING OF THE CHANGE AND WHETHER IT WAS DULY APPROVED.
POD HAS ADVISED THAT BEFORE MAKING THE CHANGE IN PARAGRAPH 10(C) A
PART OF ITS STANDARD FORM, IT REPORTED THE CHANGE TO THE GENERAL
SERVICES ADMINISTRATION WHICH ADVISED THAT SINCE THERE DID NOT APPEAR TO
BE ANY SUBSTANTIVE CHANGE ACHIEVED BY THE PROPOSED REVISION IT SEEMED
PREFERABLE TO DELETE THE REVISION. HOWEVER, THE DEPARTMENT HAS ADVISED
FURTHER THAT SINCE NO SUBSTANTIVE CHANGE WAS DEEMED TO BE ACHIEVED BY
THE REVISION, BECAUSE IT MERELY CONSTITUTED THE EXERCISE OF THE RIGHT
PROVIDED BY THE LANGUAGE OF PARAGRAPH 10(C) TO PROVIDE THAT OFFERS MUST
NOT BE SUBMITTED FOR QUANTITIES LESS THAN THE SPECIFIED QUANTITY, IT
ADOPTED THE METHOD OF SPECIFYING THAT REQUIREMENT BY REVISING STANDARD
FORM 33A THROUGH POD STANDARD NOTICE 70 INSTEAD OF TYPING A STATEMENT IN
EACH SOLICITATION THAT OFFERS MUST NOT BE SUBMITTED FOR QUANTITIES LESS
THAN THE SPECIFIED QUANTITY. SINCE UNDER PARAGRAPH 10(C) OF STANDARD
FORM 33A, AS UNAMENDED, POD COULD PROVIDE IN EACH SOLICITATION FOR
OFFERS BEING SUBMITTED ONLY ON THE QUANTITIES STATED IN THE
SOLICITATION, IT IS OF NO SIGNIFICANCE THAT THE DEPARTMENT CHOSE TO
IMPOSE SUCH A LIMITATION ON AN ACROSS-THE-BOARD BASIS THROUGH THE USE OF
A DEPARTMENTAL STANDARD NOTICE.
SINCE THE LANGUAGE OF PARAGRAPH 10(C) OF STANDARD FORM 33A, AS
AMENDED BY POD NOTICE 70, PROVIDES THAT "WHEN SPECIFIED IN THE
SOLICITATION, OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE
SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON
ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT
PRICES OFFERED," IT FOLLOWS AS A COROLLARY THAT WHEN NOT SPECIFIED IN
THE SOLICITATION, OFFERS MAY NOT BE SUBMITTED FOR ANY QUANTITIES LESS
THAN THOSE SPECIFIED AND THE GOVERNMENT DOES NOT HAVE THE RIGHT TO MAKE
AN AWARD FOR QUANTITIES LESS THAN THOSE SPECIFIED. IN LIGHT OF THE
FOREGOING, IT IS OUR VIEW THAT THE BID FROM MRC PROPERLY WAS DETERMINED
TO BE NONRESPONSIVE.
ACCORDINGLY, THE PROTEST IS DENIED.
B-171830, MAR 1, 1971
REAL ESTATE EXPENSES - REIMBURSABLE ITEMS
DECISION CONCERNING AMOUNTS TO BE COLLECTED FROM CHRIS L. PEDERSON
REPRESENTING OVERPAYMENTS FOR REAL ESTATE EXPENSES INCIDENT TO A CHANGE
OF OFFICIAL DUTY STATION.
SECTION 4.2D OF BOB CIR. NO. A-56 CLEARLY PROVIDES THAT MORTGAGE
DISCOUNTS ("POINTS") ARE NOT REIMBURSABLE AND $864 MUST THEREFORE BE
REFUNDED. A REASONABLE SERVICE CHARGE FOR PROCESSING THE LOAN MAY BE
ALLOWED, AND IF CLAIMANT CAN SUBMIT ACCEPTABLE EVIDENCE TO SHOW THAT
ATTORNEY FEES WERE FOR SERVICES OTHER THAN ADVISORY AND THUS WITHIN THE
PURVIEW OF SECTION 4.2C OF CIRCULAR NO. A-56, THESE AMOUNTS MAY BE
ALLOWED.
TO MR. VLADIMIR OLEYNIK:
THIS REFERS TO YOUR LETTER OF DECEMBER 4, 1970, REQUESTING OUR
DECISION AS TO WHETHER OR NOT MR. CHRIS L. PEDERSON MAY BE RELIEVED OF
ALL OR ANY PART OF $1,505.55. THIS AMOUNT REPRESENTS AN OVERPAYMENT FOR
SEVERAL ITEMS OF REAL ESTATE EXPENSES INCURRED INCIDENT TO A CHANGE OF
OFFICIAL DUTY STATION FROM MINNEAPOLIS, MINNESOTA, TO TAMPA, FLORIDA.
WITH RESPECT TO FIRST ITEM OF $864, "COST OF SECURING MORTGAGE, SALE
OF HOME," SECTION 4.2D OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO.
A-56 CLEARLY PROVIDES THAT MORTGAGE DISCOUNTS ("POINTS") ARE NOT
REIMBURSABLE. THEREFORE, IN VIEW OF THE SPECIFIC PROHIBITION AGAINST
SUCH COSTS, IT IS IMMATERIAL THAT SUCH EXPENSES ARE CUSTOMARILY PAID BY
THE SELLER OR THAT THE LOCAL FEDERAL HOUSING ADMINISTRATION OFFICE SAYS
THAT THEY ARE REIMBURSABLE. THE ITEM SHOULD BE REFUNDED. SEE B-167469,
JULY 29, 1969.
IN REGARD TO THE "SERVICE CHARGE" IN THE AMOUNT OF $334.50, WE HAVE
BEEN INFORMALLY ADVISED BY THE FEDERAL HOME LOAN BANK BOARD THAT THIS IS
TO PAY FOR THE WORK OF PROCESSING THE LOAN AND THAT 1-1/2 PERCENT IS A
REASONABLE CHARGE, THEREFORE, MR. PEDERSON IS ENTITLED TO RETAIN THE
$334.50.
SINCE THE EMPLOYEE HAS AUTHORIZED PAYROLL DEDUCTIONS FOR THE AMOUNT
OF $131.50 (MORTGAGE GUARANTY INS. CORP. - FIRST YEAR PREMIUM AND REVIEW
FEE), WE HAVE NO COMMENTS TO MAKE THERETO.
WE NOTE THAT THE EMPLOYEE IS ATTEMPTING TO FURNISH FURTHER
INFORMATION ABOUT THE AMOUNTS OF $93.20 AND $35 LISTED AS ATTORNEY FEES
FOR SALE AND PURCHASE OF HOMES. OF COURSE, IF HE SHOULD FAIL TO SUBMIT
ACCEPTABLE EVIDENCE TO SHOW THAT SUCH FEES WERE FOR SERVICES OTHER THAN
ADVISORY AND THUS WITHIN THE PURVIEW OF SECTION 4.2C OF CIRCULAR NO.
A-56, THE COLLECTION OF THE TWO FEES WOULD BE REQUIRED.
IN CONNECTION WITH THE $44.60 (INTANGIBLE TAX), OUR DECISION OF
FEBRUARY 5, 1968, B-160040, EXPRESSLY STATES THAT SUCH TAX IS NOT
LAWFULLY REIMBURSABLE, HENCE, THE EMPLOYEE WAS NOT ENTITLED TO THAT SUM
PAID HIM AND COLLECTION THEREOF IS REQUIRED.
MR. PEDERSON WAS ONLY ENTITLED TO BE REIMBURSED FOR RECORDING FEES AT
ONLY ONE LOCATION, THUS, $2.75 MUST BE RETURNED BY HIM. SEE B-164117,
MAY 16, 1968.
B-170872, FEB 26, 1971
BID PROTEST - ADDED CHARGES
DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO FURNISH
FLIGHT, GROUND, AND CLASSROOM INSTRUCTION FOR 50 NAVY OFFICERS TO
CHANTILLY AVIATION, INC.
SINCE THE PROCURING ACTIVITY REQUESTED A UNIT PRICE FOR PREFLIGHT AND
POST FLIGHT DISCUSSION PER STUDENT, AND PROTESTANT DID NOT INDICATE IN
ITS OFFER THAT THE CHARGE WAS INCLUDED IN ANY OF THE OTHER ITEMS, IT WAS
NOT ARBITRARY FOR THE PROCURING ACTIVITY TO CONSIDER SUCH COSTS IN
ESTIMATING THE TOTAL PRICE OF THE OFFER. ACCORDINGLY, THE PROTEST IS
DENIED.
TO GREENWOOD'S FLYING SERVICE:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 1, 1970, AND TELEGRAM OF
SEPTEMBER 23, 1970, PROTESTING THE AWARD OF CONTRACT NO.
N00022-71-C-0018 BY THE BUREAU OF NAVAL PERSONNEL, DEPARTMENT OF THE
NAVY, TO CHANTILLY AVIATION, INC.
BY REQUEST FOR QUOTATIONS NO. N00022-71-Q-0062, DATED AUGUST 5, 1970,
THE BUREAU OF NAVAL PERSONNEL SOLICITED FIXED PRICE OFFERS FOR
FURNISHING FLIGHT, GROUND, AND CLASSROOM INSTRUCTION FOR 50 NAVY
OFFICERS IN THE WASHINGTON, D. C., AREA UNDER THE NAVY'S AVIATION
INDOCTRINATION PROGRAM DURING THE PERIOD OF SEPTEMBER 1, 1970, THROUGH
JUNE 30, 1971. THE OFFERS WERE SOLICITED ON A UNIT PRICE BASIS FOR EACH
CATEGORY OF INSTRUCTION.
OFFERS WERE RECEIVED FROM CHANTILLY AVIATION, INC., SUBURBAN
AIRSERVICE, INC., AND YOUR FIRM. THE UNIT PRICES SUBMITTED BY CHANTILLY
AND YOUR FIRM WERE AS FOLLOWS:
TYPE OF INSTRUCTION CHANTILLY AVIATION, INC. GREENWOOD'S FLYING
SERVICE
SOLO $19.00/HR. (100-150 HP $15.00/HR. (C-150)
AIRCRAFT) 21.00/HR. (C-172)
DUAL 21.00/HR. (PIPER CUB 21.00/HR. (C-150)
PA-11)
26.00/HR. (OTHER PIPER 28.00/HR. (C-172)
& CESSNA
AIRCRAFT)
POST-FLIGHT 7.00/HR. 8.00/HR.
GROUND 1.25/HR. PER STUDENT 76.50 PER STUDENT
PLUS $7.00 PER STUDENT
FOR TEXTBOOKS
OFFERS WERE EVALUATED AS FOLLOWS:
TYPE OF INSTRUCTION CHANTILLY AVIATION, INC. GREENWOOD'S FLYING
SERVICE
SOLO 4 HOURS X $19.00 $ 76.00 4 HOURS X $21.00 $ 84.00
DUAL 13 HOURS X $26.00 13 HOURS X $28.00
2 HOURS X $21.00 2 HOURS X $21.00
380.00 406.00
GROUND 10 HOURS X $ 1.25
BOOKS $7.00
19.50 76.50
PREFLIGHT & 6 1/3 HOURS X 6 1/3 HOURS X
POSTFLIGHT $7.00 44.10 $8.00 50.4
TOTAL PER STUDENT $519.60 $616.9
INDICATED IN ITS OFFER AN INTENT TO PERFORM THE SERVICES AS EVALUATED
FOR $507 PER STUDENT. ACCORDINGLY, CONTRACT NO. N00022-71-C-0018 IN THE
TOTAL ESTIMATED AMOUNT OF $25,350 WAS AWARDED TO THAT FIRM ON THAT BASIS
ON AUGUST 27, 1970.
BY TELEGRAM DATED SEPTEMBER 23, 1970, YOU PROTESTED THE CONTRACT
AWARD TO CHANTILLY ON THE BASIS THAT YOUR QUOTATION WAS LOWER THAN THE
TOTAL ESTIMATED PRICE OF $25,000 FOR FLIGHT AND GROUND INSTRUCTION OF 50
STUDENTS. IN A LETTER OF OCTOBER 1, 1970, YOU STATED THAT YOU QUOTED
$22,575 FOR THE SERVICES SPECIFIED IN THE REQUEST FOR QUOTATIONS; THAT
YOU WERE ADVISED BY THE PROCURING ACTIVITY THAT CHANTILLY'S OFFER WAS
APPROXIMATELY $23,900 AND THAT CHANTILLY WOULD REFUND ANY UNUSED PORTION
OF THE AWARD; AND THAT YOUR PRICE OF $22,575 COVERED GROUND SCHOOL FOR
50 STUDENTS ($3,825), 15 HOURS DUAL FLIGHT FOR 50 STUDENTS ($15,750),
AND 4 HOURS SOLO FLIGHT FOR 50 STUDENTS ($3,000). YOU ALSO STATED THAT
THE NAVY ARBITRARILY ADDED $2,520 TO YOUR OFFER FOR 315 HOURS OF
PREFLIGHT AND POSTFLIGHT DISCUSSION AND THAT THIS CHARGE WAS NOT
INCLUDED IN YOUR OFFER AND IS NOT CHARGED WHEN DUAL INSTRUCTION IS GIVEN
BY YOUR FIRM. YOU CONTEND THAT YOUR FIRM WOULD HAVE PROVIDED ALL OF THE
SERVICES REQUESTED IN THE REQUEST FOR QUOTATIONS AT A TOTAL PRICE LOWER
THAN THE AMOUNT OF THE CONTRACT AWARD.
AN EXAMINATION OF YOUR OFFER DOES NOT REVEAL THAT YOU QUOTED A TOTAL
PRICE OR THAT THE TOTAL PRICE WOULD BE $22,575 FOR THE REQUIRED
SERVICES. RATHER, EXAMINATION OF THE OFFER SHOWS THAT YOU QUOTED
SEPARATE UNIT PRICES FOR SOLO FLIGHT INSTRUCTION, DUAL FLIGHT
INSTRUCTION, PREFLIGHT AND POST-FLIGHT DISCUSSION, AND CLASSROOM
INSTRUCTION. THE CHARGE FOR PREFLIGHT AND POSTFLIGHT DISCUSSION WAS $8
PER HOUR. BASED ON AN ESTIMATE OF 6-1/3 HOURS OF PREFLIGHT AND
POSTFLIGHT DISCUSSION PER STUDENT, IT WAS ESTIMATED THAT THE TOTAL PRICE
FOR SUCH INSTRUCTION FOR 50 STUDENTS WOULD BE $2,520 AND THAT AMOUNT WAS
INCLUDED IN THE EVALUATION OF YOUR TOTAL OFFER. SINCE THE PROCURING
ACTIVITY REQUESTED A UNIT PRICE FOR PREFLIGHT AND POSTFLIGHT DISCUSSION
AND YOU QUOTED A UNIT PRICE FOR SUCH DISCUSSION AND YOU DID NOT INDICATE
IN THE OFFER THAT THE CHARGE WAS INCLUDED IN ANY OF THE OTHER ITEMS, IT
WAS NOT ARBITRARY FOR THE PROCURING ACTIVITY TO CONSIDER IT IN
ESTIMATING THE TOTAL PRICE OF THE OFFER.
BASED ON THE EVALUATION EMPLOYED ABOVE, YOUR TOTAL PRICE WAS
ESTIMATED AT $30,845 WHEREAS CHANTILLY'S WAS ESTIMATED AT $25,350.
HOWEVER, EVEN IF THE LOWEST UNIT PRICES YOU QUOTED FOR SOLO AND DUAL
INSTRUCTION, RESPECTIVELY, WERE SUBSTITUTED FOR THE UNIT PRICES UTILIZED
FOR SUCH INSTRUCTION IN THE EVALUATION OF YOUR OFFER AND THE LOWEST
RESPECTIVE UNIT PRICES CHANTILLY OFFERED FOR THE SAME INSTRUCTION WERE
SUBSTITUTED FOR THE UNIT PRICES UTILIZED IN THE EVALUATION OF ITS OFFER,
CHANTILLY WOULD REMAIN THE LOWEST EVALUATED OFFEROR SINCE ON THAT BASIS
ITS TOTAL ESTIMATED PRICE WOULD BE $22,730 WHEREAS YOURS WOULD BE
$25,095.
ACCORDINGLY, IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.
B-171391(2), FEB 26, 1971
BID PROTEST - NEGOTIATIONS - SUCCESSOR EMPLOYER
DENIAL OF PROTEST OF PAN AMERICAN WORLD AIRWAYS, INC., AGAINST THE
AWARD OF A NEGOTIATED COST-PLUS-AWARD-FEE TYPE CONTRACT ISSUED BY NASA
FOR THE PERFORMANCE OF INSTALLATION SUPPORT SERVICES AT KENNEDY SPACE
CENTER TO BOEING COMPANY.
THE GAO WILL NOT CONTRADICT THE OPINION OF NASA LABOR RELATIONS
CONSULTANTS THAT A SEVERE LABOR IMPACT AND SERIOUS DISRUPTION OF THE
HARMONIOUS LABOR RELATIONS AT KENNEDY WOULD RESULT FROM THE PAN AMERICAN
APPROACH TO ASSUMING ITS PREDECESSOR'S (TWA'S) COLLECTIVE BARGAINING
AGREEMENT AT VARIANCE WITH THE SUCCESSOR EMPLOYER DOCTRINE. THAT AN
ATTEMPTED CHANGE OF UNIONS FOR INCUMBENT EMPLOYEES MIGHT BE RESISTED BY
LITIGATION WITH UNCERTAIN OUTCOME, STRIKES, AND PICKETING IS SUFFICIENT
JUSTIFICATION FOR AWARD TO BOEING.
TO PAN AMERICAN WORLD AIRWAYS, INCORPORATED, AEROSPACE SERVICES
DIVISION:
WE REFER TO YOUR PROTEST BY TELEGRAM DATED DECEMBER 11, 1970, AS
SUPPLEMENTED BY LETTERS DATED DECEMBER 14, 1970, AND JANUARY 26, 1971,
AGAINST THE SELECTION BY THE NATIONAL AERONAUTICS AND SPACE
ADMINISTRATION (NASA) OF THE BOEING COMPANY (BOEING) FOR NEGOTIATION OF
A COST-PLUS-AWARD-FEE TYPE CONTRACT FOR THE PERFORMANCE OF INSTALLATION
SUPPORT SERVICES AT KENNEDY SPACE CENTER (KSC). THE PROCUREMENT
SOLICITATION IS REQUEST FOR PROPOSALS (RFP) 2-370-0, DATED JUNE 30,
1970, AND THE CLOSING DATE FOR SUBMISSION OF PROPOSALS WAS AUGUST 19,
1970.
THE RFP CALLED FOR PERFORMANCE OF THE SPECIFIED SERVICES FOR AN
INITIAL PERIOD OF ONE YEAR COMMENCING FEBRUARY 1, 1971, WITH FOUR
EXTENSIONS OF ONE YEAR EACH TO BE AVAILABLE AT THE GOVERNMENT'S
DISCRETION UNDER CONTRACT OPTIONS, THE FIRST OF WHICH WAS REQUIRED TO BE
FIRM PRICED. BASIC PROPOSALS WERE REQUIRED TO BE BASED UPON FIXED
STAFFING SPECIFIED IN THE RFP, BUT ALTERNATE PROPOSALS WERE SOLICITED
BASED UPON ORGANIZATION AND STAFFING OTHER THAN AS INDICATED IN THE RFP.
ARTICLE VI OF APPENDIX III OF THE PROPOSED CONTRACT STATED A
REQUIREMENT FOR CONTINUITY OF SERVICES NECESSITATING PHASE-IN TRAINING
OF THE SUCCESSOR CONTRACTOR DURING THE LAST 60 DAYS OF THE EXISTING
CONTRACT TERM AND COOPERATION OF BOTH CONTRACTORS RESPECTING, AMONG
OTHER FACTORS, RELEASE OF EMPLOYEES TO THE NEW CONTRACTOR. ARTICLE
XXXII, WHICH GOVERNED THE PHASE-IN OF THE FUNCTIONS TO BE ASSUMED UNDER
THE PROPOSED CONTRACT FROM THREE INCUMBENT CONTRACTORS, REQUIRED THAT
ALLOWANCE FOR PHASE-IN BE MADE IN THE COST AND FEE NEGOTIATED UNDER THE
PROPOSED CONTRACT SUBJECT TO ADJUSTMENT IN THE EVENT THE FUNCTIONS IN
QUESTION ARE NOT FULLY OPERATIONAL AND COMPLETELY STAFFED, AS AGREED
DURING NEGOTIATIONS, BY THE DATES SCHEDULED IN ARTICLE XXXII.
ARTICLE XXIV OF APPENDIX III, ENTITLED "SERVICE CONTRACT ACT OF
1965," INFORMED OFFERORS OF THE ISSUANCE BY THE DEPARTMENT OF LABOR OF A
WAGE DETERMINATION ESTABLISHING A MINIMUM HOURLY WAGE OF $2.45 PER HOUR,
INCLUDING FRINGE BENEFITS, FOR JANITORS, PORTERS, AND CLEANERS.
PARAGRAPH 2.C., SECTION 1, PART B, APPENDIX II, AS AMENDED, RELATING
TO MANAGEMENT STRUCTURE, READS AS FOLLOWS:
"EXPLAIN YOUR UNDERSTANDING OF THE IMPACT, IF ANY, THAT THE
COLLECTIVE BARGAINING AGREEMENTS COVERING INCUMBENT EMPLOYEES WILL HAVE
ON YOUR ASSUMING THE CONTRACT RESPONSIBILITIES. DISCUSS WHICH OF YOUR
EMPLOYEES, IF ANY, WILL BE COVERED BY COLLECTIVE BARGAINING AGREEMENTS
AND INDICATE WHICH, IF ANY, SUPERVISORY PERSONNEL ARE INCLUDED.
"PROSPECTIVE OFFERORS ARE ADVISED THAT MOST EMPLOYEES OF THE
INCUMBENT CONTRACTORS ARE REPRESENTED BY IAM AND THAT THE LABOR
AGREEMENTS IN FORCE ARE AS FOLLOWS:
CURRENT CONTRACT
AREA UNION DISTRICT NO. LOCAL NO. EXPIRATION DATE
MAJORITY IAM 142 773 12/31/71
JANITORIAL IAM 166 1306 12/31/71
GUARD UPGWA 128 1/31/72
FIRE SERVICE TWU 525 7/9/712
TRAINING IAM 166 690 3/1/71"
IAM STANDS FOR THE INTERNATIONAL ASSOCIATION OF MACHINISTS; UPGWA
FOR THE UNITED PLANT GUARD WORKERS OF AMERICA; AND TWU FOR TRANSPORT
WORKERS UNION OF AMERICA. IBT, AS YOU HAVE INDICATED IN YOUR PROTEST,
STANDS FOR THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS,
WAREHOUSEMEN AND HELPERS OF AMERICA.
PARAGRAPH 11, APPENDIX I, PART B, RELATING TO EVALUATION OF
PROPOSALS, INFORMED PROSPECTIVE OFFERORS THAT FAILURE OF A PROPOSAL TO
BE ACCEPTED FOR AWARD WOULD NOT NECESSARILY REFLECT ANY DEFICIENCIES BUT
WOULD MEAN ONLY THAT ANOTHER PROPOSAL WAS CONSIDERED TO BE MORE
ADVANTAGEOUS TO THE GOVERNMENT. THE MAJOR FACTORS TO BE CONSIDERED IN
THE PROPOSAL EVALUATION AND THEIR RELATIVE ORDER OF IMPORTANCE WERE (A.)
TECHNICAL WORK PLANS; (B.) REASONABLENESS OF COST AND FEE; (C.)
EXPERIENCE AND PAST PERFORMANCE; (D.) KEY PERSONNEL; AND (E.)
MANAGEMENT STRUCTURE. OFFERORS WERE ADVISED THAT FACTOR A. WOULD HAVE
SLIGHTLY MORE WEIGHT THAN FACTOR B.; THAT FACTORS C., D., AND E. WOULD
BE CONSIDERED TO HAVE APPROXIMATELY EQUAL IMPORTANCE; AND THAT THE
AGGREGATE OF FACTORS C., D., AND E. WOULD BE APPROXIMATELY THE WEIGHT OF
FACTOR B.
ON JULY 21 AND 22, 1970, PROSPECTIVE OFFERORS WERE PROVIDED A TOUR OF
THE KSC FACILITIES WHICH WOULD BE INVOLVED IN THE PERFORMANCE OF THE
REQUIRED SERVICES, AND A PREPROPOSAL CONFERENCE WAS HELD, DURING WHICH
VARIOUS QUESTIONS RELATING TO THE CONTRACT WERE RAISED BY PARTICIPANTS
IN THE CONFERENCE AND WERE ANSWERED BY NASA. SUBSEQUENTLY, NASA
DISTRIBUTED TO INTERESTED PARTIES A LIST OF THE QUESTIONS AND ANSWERS
WITH A LETTER DATED JULY 31. QUESTION 56 AND NASA'S ANSWER READ AS
FOLLOWS:
"QUESTION 56: 1. IS IT NASA'S OPINION THAT SUCCESSFUL BIDDERS WILL
BE REQUIRED TO ASSUME EMPLOYEE REPRESENTATION BY INCUMBENT UNIONS?
2. (A) IF THE ANSWER TO QUESTION 1 IS 'YES,' IS THE BASIS FOR THIS
OPINION 'NO SIGNIFICANT CHANGE IN WORK SCOPE'?
(B) IF THE ANSWER TO QUESTION 1 IS 'NO,' IS THE BASIS FOR THIS
OPINION 'A SIGNIFICANT CHANGE IN WORK SCOPE'?
3. IF THE ANSWER TO QUESTION 1 IS 'YES,' DOES NASA KSC PLAN TO
PROVIDE CONTENTS OF THE CURRENT UNION AGREEMENT AS WELL AS SPECIFIC
EMPLOYEE RATES AND BENEFITS COSTS TO ENABLE BIDDERS TO SUBMIT
COMPETITIVE BIDS?
"ANSWER: 1. THE NLRB HAS HELD THAT WHEN AN EMPLOYER ASSUMES THE
OPERATIONS OF ANOTHER EMPLOYER WITHOUT CHANGE IN EMPLOYEES, JOBS OR
METHODS, THE SUCCESSOR-EMPLOYER IS OBLIGATED TO BARGAIN WITH THE UNION
BEFORE CHANGING WAGES AND OTHER CONDITIONS OF EMPLOYMENT. UNDER A
RECENT SERIES OF CASES, THE NLRB HAS HELD THAT THE SUCCESSOR-EMPLOYER
MUST ASSUME THE PREDECESSOR'S COLLECTIVE BARGAINING AGREEMENT. IT IS
NASA'S POSITION THAT THE OFFERORS MAKE THEMSELVES FAMILIAR WITH THE NLRB
CASES COVERING THIS ISSUE, NAMELY, THE WILLIAM J. BURNS INTERNATIONAL
DETECTIVE AGENCY, INC., 74 LRRM 1098; CHEMROCK CORP., 58 LRRM 1582;
JOHN WILEY & SONS VS. LIVINGSTON, U.S. SUP. CT. 55 LRRM 2769.
2. THE OFFEROR WILL HAVE TO APPLY THE NLRB'S REASONING IN THE
PREVIOUSLY MENTIONED CASES TO THE SCOPE OF THE RFP IN RELATION TO METHOD
IN WHICH THE WORK HAS BEEN PERFORMED AND TO ITS OWN INTENDED MODE OF
OPERATION.
3. IT IS NOT OUR POLICY TO SUPPLY ANY OFFERORS WITH ANY COPIES OF
LABOR AGREEMENTS COVERING UNITS OF EMPLOYEES COMING WITHIN THE SCOPE OF
THE RFP."
BY AUGUST 19, NASA HAD RECEIVED BASIC PROPOSALS FROM SEVEN COMPANIES,
INCLUDING YOUR COMPANY AND BOEING. BOEING ALSO SUBMITTED AN ALTERNATE
PROPOSAL COVERING A LESSER NUMBER OF EMPLOYEES THAN SPECIFIED BY NASA AS
REQUIRED STAFFING. ONLY THE BASIC BOEING PROPOSAL IS INVOLVED IN YOUR
PROTEST.
FOUR OF THE SEVEN OFFERORS, INCLUDING INCUMBENT CONTRACTOR TRANS
WORLD AIRLINES, INC. (TWA), WHO PERFORMS MOST OF THE SERVICES COVERED BY
THE RFP, PROPOSED TO ABIDE BY THE TERMS OF ALL OF TWA'S EXISTING
BARGAINING AGREEMENTS WITH ITS UNION EMPLOYEES IN ACCORDANCE WITH THE
"SUCCESSOR EMPLOYER" DOCTRINE. YOUR COMPANY, BOEING, AND ONE OTHER
OFFEROR DID NOT PROPOSE TO PAY THE SAME WAGE RATES TO ALL EMPLOYEES AS
TWA CURRENTLY PAYS.
YOU CONTEND THAT NASA DID NOT DEAL IN GOOD FAITH WITH YOU CONCERNING
THE SELECTION FOR NEGOTIATION, DID NOT SELECT THE PROPOSAL MOST
ADVANTAGEOUS TO THE GOVERNMENT, AND HAS ACTED ARBITRARILY IN SELECTING
BOEING OVER YOU. IN THIS REGARD, YOU MAINTAIN THAT YOUR PROPOSAL WAS
SUPERIOR TO BOEING'S PROPOSAL AND WAS MOST ADVANTAGEOUS TO THE
GOVERNMENT FOR THE REASONS (1) THAT YOU FULLY UNDERSTAND THE WORK,
HAVING PERFORMED IDENTICAL WORK OVER THE PAST 17 YEARS AT THE NEARBY AIR
FORCE EASTERN TEST RANGE, PATRICK AIR FORCE BASE; (2) THAT YOUR
ESTIMATED COST AND FEE OF $19,275,252 IS SIGNIFICANTLY LOWER THAN THE
APPROXIMATE AMOUNT OF $20,000,000 ANNOUNCED BY NASA AS THE COSTS
PROPOSED BY BOEING; (3) THAT YOU BELIEVE BOEING DOES NOT HAVE
CREDENTIALS COMPARABLE TO YOURS INSOFAR AS THE FACTOR OF EXPERIENCE AND
PAST PERFORMANCE IS CONCERNED; (4) THAT YOUR KEY PERSONNEL ARE SEASONED
PROFESSIONALS WHO MEET OR EXCEED THE EDUCATION AND EXPERIENCE
REQUIREMENTS SPECIFIED IN THE RFP; AND (5) AND THAT YOU PROPOSED A
STRAIGHT-FORWARD MANAGEMENT STRUCTURE PROVIDING CLEAR LINES OF
RESPONSIBILITY AND AUTHORITY, GROUPED LIKE FUNCTIONS FOR EFFICIENCY AND
GOOD MANAGEMENT CONTROL, AND WERE RESPONSIVE TO ALL OTHER ASPECTS OF
THIS PORTION OF THE RFP.
YOU ALSO CONTEND THAT THERE WOULD BE GREATER DISPARITY BETWEEN THE
TWA AND BOEING UNION AGREEMENTS THAN BETWEEN TWA AND YOUR UNION
AGREEMENTS, SINCE BOEING'S AGREEMENTS GO MUCH FURTHER THAN EITHER YOURS
OR TWA'S IN ESTABLISHING SKILL LEVELS WITHIN PARTICULAR CATEGORIES OF
WORK. IN ADDITION, YOU URGE THAT YOUR UNION AGREEMENTS ARE MORE LIKELY
TO PREVAIL THAN BOEING'S INASMUCH AS YOU HAVE BENEFIT PROGRAMS, SUCH AS
AIRLINE TRAVEL DISCOUNT PRIVILEGES AT NO COST TO THE GOVERNMENT, WHICH
YOU MAY OFFER TO EMPLOYEES AND WHICH ARE NOT AVAILABLE TO BOEING.
ACCORDINGLY, YOU URGE, THE PHASE-OVER WITHIN THE AIRLINE INDUSTRY (I.E.,
FROM TWA TO YOU) WITH SIMILAR BENEFITS AND SYSTEMS-WIDE AGREEMENTS UNDER
THE RAILWAY LABOR ACT WOULD BE MORE PALATABLE TO THE INCUMBENT EMPLOYEES
THAN THE MORE DRASTIC CHANGE, EVEN WITHIN THE SAME UNION, FROM TWA TO
BOEING.
IN ADDITION, YOU STATE THAT YOU HAVE ALREADY FOLLOWED SIMILAR PLANS
SUCCESSFULLY IN CONNECTION WITH ASSUMPTION BY YOU OF ENGINEERING SUPPORT
SERVICES WORK AND MEDICAL SERVICES AT KSC FOR NASA.
BOEING, SUBJECT TO THE NATIONAL LABOR RELATIONS ACT, HAS A
COMPANY-WIDE LABOR AGREEMENT WITH IAM COVERING EMPLOYEES AT BOEING'S
MAIN AIRCRAFT AND AEROSPACE MANUFACTURING OPERATION, AS WELL AS
EMPLOYEES IN THE KSC AREA UNDER BOEING'S APOLLO V STAGE CONTRACT. SINCE
THE WAGE RATES IN THIS UNION AGREEMENT ARE CONSIDERABLY LOWER THAN THE
RATES PAID BY TWA FOR COMPARABLE WORK UNDER ITS EXISTING AGREEMENTS WITH
IAM, BOEING PROPOSED TO BRING TWA'S INCUMBENT IAM EMPLOYEES UNDER ITS
OWN AGREEMENT WITH LODGE 2061 OF IAM, WITH WHICH BOEING HAS HAD A VERY
GOOD RELATIONSHIP, BUT DID NOT PROPOSE TO ASSUME THE EXISTING TWA
AGREEMENTS. BOEING SIGNIFIED ITS ACCEPTANCE OF THE "SUCCESSOR EMPLOYER"
DOCTRINE WITH RESPECT TO THE SECURITY EMPLOYEES CURRENTLY REPRESENTED BY
THE UPGWA AND THE FIRE PROTECTION EMPLOYEES REPRESENTED BY THE TWU, BUT
PROPOSED TO SUBCONTRACT THE JANITORIAL FUNCTION.
NASA'S INDUSTRIAL RELATIONS OFFICER REVIEWED BOEING'S BASIC PROPOSAL
AND EXPRESSED THE OPINION THAT NO MAJOR LABOR PROBLEMS WOULD APPEAR TO
BE ASSOCIATED THEREWITH. AS TO THE WAGE RATES PROPOSED BY BOEING, NASA
STATES THAT SUCH RATES ARE COMPARABLE TO OTHER AEROSPACE COMPANIES BOTH
LOCALLY AND NATIONALLY AND ARE THEREFORE NOT CONSIDERED SUBSTANDARD WHEN
COMPARED TO THE LOCAL ECONOMY OR NATIONAL AEROSPACE STANDARDS.
YOUR COMPANY, LIKE TWA, IS SUBJECT TO THE RAILWAY LABOR ACT (RLA), 44
STAT. 577, AS AMENDED, PURSUANT TO WHICH YOU HAVE OPERATED AS A
CONTRACTOR FOR THE DEPARTMENT OF THE AIR FORCE AT THE AIR FORCE EASTERN
TEST RANGE AT NEARBY PATRICK AIR FORCE BASE. UNDER YOUR PROPOSAL NO
CHANGE WOULD BE MADE INSOFAR AS EXISTING UNION REPRESENTATION FOR
INCUMBENT FIREMEN AND GUARDS IS CONCERNED, BUT YOU PROPOSE TO TRANSFER
TWA'S INCUMBENT EMPLOYEES, WHO ARE NOW REPRESENTED BY IAM, TO YOUR
BARGAINING UNITS WITH THE TWU AND IBT, WHICH YOU STATE HAVE ALL BEEN
APPROVED BY THE NATIONAL MEDIATION BOARD ESTABLISHED UNDER THE RLA. THE
WAGE RATES WHICH YOU PROPOSE TO PAY WOULD NOT ONLY BE LOWER THAN THE
CURRENT WAGE RATES BEING PAID BY TWA BUT WOULD ALSO BE LOWER THAN THE
RATES WHICH YOU NOW PAY AT THE AIR FORCE EASTERN TEST RANGE.
NASA'S EVALUATION TEAM, HAVING IN MIND PAST EXPERIENCE THAT THE
RELATIONSHIPS BETWEEN CERTAIN OF THE INTERNATIONAL UNIONS WHICH WOULD BE
INVOLVED IN A TRANSITION OF OPERATIONS FROM TWA TO YOU HAVE BEEN
STRAINED AND INHARMONIOUS, WAS OF THE OPINION THAT THE ATTEMPTED CHANGE
OF UNIONS FOR INCUMBENT EMPLOYEES WOULD PROBABLY BE RESISTED BY
LITIGATION WITH UNCERTAIN OUTCOME, STRIKES, AND PICKETING. IN SUCH
CIRCUMSTANCES, YOUR PLAN MIGHT FAIL WITH THE RESULT THAT YOUR COSTS
WOULD APPROXIMATE TWA'S ESTIMATED COSTS, WHICH WERE SUBSTANTIALLY
GREATER THAN THE COSTS ESTIMATED BY YOU. IN THIS CONNECTION, NASA
STATES IT VERIFIED THAT THERE IS NO WAY TO DETERMINE THROUGH CONTRACT
NEGOTIATIONS WHETHER YOUR PLAN WOULD SUCCEED, SINCE LITIGATION OR
EMPLOYEE ELECTIONS WOULD BE POSSIBLE ONLY AFTER AWARD, AT WHICH TIME IT
WOULD BE TOO LATE FOR NASA TO SELECT A DIFFERENT CONTRACTOR.
WHILE YOUR COSTS WERE SOMEWHAT BELOW BOEING'S COSTS FOR THE INITIAL
ONE-YEAR PERIOD, NASA DID NOT CONSIDER THE DIFFERENTIAL SIGNIFICANT.
FURTHER, NASA STATES THAT CONSIDERING THE FIRM OPTION FOR THE SECOND
YEAR TOGETHER WITH THE FIRST YEAR, BOEING WAS LOWER IN PRICE FOR THE
TWO-YEAR PERIOD. MORE SIGNIFICANT, NASA STATES, WAS THE OPINION OF ITS
LABOR RELATIONS CONSULTANTS AND ITS EVALUATION BOARD THAT A SEVERE LABOR
IMPACT AND A SERIOUS DISRUPTION OF THE HARMONIOUS LABOR RELATIONS AT KSC
COULD BE FORESEEN IN YOUR PROPOSED APPROACH.
THE RECORD BEFORE OUR OFFICE SHOWS THAT FOLLOWING THE INITIAL
EVALUATION OF THE PROPOSALS, YOU WERE AMONG THE FIVE OFFERORS WHO WERE
INVITED TO PARTICIPATE IN ORAL DISCUSSIONS OF THEIR PROPOSALS, WITH
ATTENTION TO BE FOCUSED ON 25 GENERAL QUESTIONS AND VARIOUS SPECIFIC
QUESTIONS RELATING TO PARTICULAR PROPOSALS. DISCUSSIONS WERE CONDUCTED
WITH THE VARIOUS OFFERORS FROM SEPTEMBER 28 TO OCTOBER 1, INCLUSIVE, AND
EACH OFFEROR WAS AFFORDED AN ADDITIONAL WEEK TO FURTHER REVISE OR
CLARIFY ITS PROPOSALS IN LIGHT OF THE DISCUSSIONS. THE CUT-OFF DATE FOR
ALL OFFERORS WAS OCTOBER 19, 1970, AS SPECIFIED IN TELEGRAPHIC AMENDMENT
NO. 3 TO THE RFP, AND NO FURTHER REVISIONS WERE RECEIVED AFTER THAT
DATE. NASA ALSO REPORTS THAT NO CHANGES WERE MADE BY ANY OFFEROR IN ITS
PROPOSED UNION STRUCTURE IN RESPONSE TO THE QUESTIONS WHICH HAD BEEN
RAISED BY THE GOVERNMENT.
AFTER CAREFUL RECONSIDERATION OF ALL OF THE ABOVE PROPOSALS, NASA
CONCLUDED THAT THE TECHNICAL SUPERIORITY OF THE TWA PROPOSAL DID NOT
JUSTIFY ITS ACCEPTANCE IF THE LOW COST ARRANGEMENT PROPOSED BY BOEING
COULD BE ACHIEVED, BOEING'S TECHNICAL PROPOSAL BEING ENTIRELY ACCEPTABLE
TO NASA. AS TO YOUR PROPOSAL, WHICH WAS RATED TECHNICALLY ALMOST EQUAL
TO TWA'S PROPOSAL, NASA DECIDED NOT TO RISK THE LABOR UNREST LIKELY TO
BE ATTENDANT UPON ITS ACCEPTANCE. NASA ACCORDINGLY CONCLUDED THAT
SELECTION OF BOEING'S BASIC PROPOSAL WOULD GIVE THE GOVERNMENT THE BEST
PROMISE OF GOOD TECHNICAL PERFORMANCE AND REASONABLE COST, AND THE
ACTING ADMINISTRATOR OF NASA DIRECTED THAT NEGOTIATIONS BE CONDUCTED
WITH BOEING ON THE BASIS OF THE LABOR PLAN REFLECTED IN BOEING'S
PROPOSAL, WITH THE CONDITION THAT PRIOR TO AWARD AND APPROVAL OF THE
CONTRACT BOEING SHOW FIRM AGREEMENTS WITH THE APPROPRIATE UNIONS
PROVIDING COVERAGE FOR THE WORK TO BE PERFORMED UNDER THE PROCUREMENT.
PENDING OUR DECISION ON YOUR PROTEST AND ALSO ON A SEPARATE PROTEST BY
TWA, AWARD OF THE CONTRACT IS BEING WITHHELD BY NASA.
OUR OFFICE HAS NOTED THAT THE AWARD OF COST-REIMBURSEMENT CONTRACTS
REQUIRES PROCUREMENT PERSONNEL TO EXERCISE INFORMED JUDGMENTS AS TO
WHETHER SUBMITTED PROPOSALS ARE REALISTIC INSOFAR AS THE PROPOSED COSTS
AND TECHNICAL APPROACH ARE CONCERNED. B-152039, JANUARY 20, 1964. WE
BELIEVE THAT SUCH JUDGMENT MUST PROPERLY BE LEFT TO THE ADMINISTRATIVE
DISCRETION OF THE CONTRACTING AGENCIES CONCERNED, SINCE THEY ARE IN THE
BEST POSITION TO ASSESS "REALISM" OF COSTS AND TECHNICAL APPROACHES, AND
MUST BEAR THE MAJOR CRITICISM FOR ANY DIFFICULTIES OR EXPENSES
EXPERIENCED BY REASON OF A DEFECTIVE COST ANALYSIS. B-171076, DECEMBER
16, 1970, 50 COMP. GEN.___.
NASA PR 3.805-2, RELATING TO COST-REIMBURSEMENT TYPE CONTRACTS, READS
AS FOLLOWS:
"3.805-2 COST-REIMBURSEMENT TYPE CONTRACTS. 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 (1) THE LOWEST PROPOSED COST, (2) THE LOWEST PROPOSED
FEE, OR (3) 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 APPROPRIATE TO THE WORK TO BE PERFORMED. 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."
ON THE BASIS OF THE INFORMATION FURNISHED BY NASA AS TO PAST LABOR
PROBLEMS INVOLVING CERTAIN OF THE INTERNATIONAL UNIONS WHICH WOULD BE
CONCERNED IN ANY TRANSITION OF INCUMBENT IAM EMPLOYEES FROM TWA TO YOU,
WE CONCLUDE THAT THE FACTOR OF POSSIBLE LABOR STRIFE WAS PROPERLY
CONSIDERED BY NASA IN MAKING ITS SELECTION OF THE OFFEROR WITH WHOM
NEGOTIATIONS WOULD BE CONDUCTED, PARTICULARLY IN VIEW OF THE NEED FOR
CONTINUITY OF SERVICES AS STATED IN ARTICLE VI OF THE PROPOSED CONTRACT
SCHEDULE. NOR CAN WE SAY THAT IN CONNECTION WITH SUCH POSSIBLE LABOR
STRIFE, NASA COULD NOT PROPERLY CONSIDER THE EFFECT ON YOUR COSTS OF
WORK STOPPAGES, WORK SLOWDOWNS, PICKETING, AND OTHER PROBLEMS WHICH ARE
COSTLY IN AND OF THEMSELVES.
IN THE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT NASA'S SELECTION
OF BOEING FOR NEGOTIATION OF A CONTRACT FOR THIS PROCUREMENT UNDER THE
CONDITIONS STIPULATED BY THE ACTING ADMINISTRATOR, I.E., THAT BOEING
SHOW FIRM AGREEMENTS WITH THE APPROPRIATE UNIONS PROVIDING COVERAGE FOR
THE WORK TO BE PERFORMED, WAS OTHER THAN A VALID EXERCISE OF THE
DISCRETION GRANTED TO NASA, AS THE CONTRACTING AGENCY, TO MAKE THE AWARD
WHICH WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT AS CONTEMPLATED BY THE
PROVISIONS OF NASA PR 3.805-2. YOUR PROTEST IS THEREFORE DENIED.
B-171391(3), FEB 26, 1971
CONTRACTS - DEBARRED BIDDER
ADVISING THAT SANCTIONS WILL NOT BE IMPOSED UPON DYNAMIC ENTERPRISES,
INC., FOR VIOLATIONS OF THE SERVICE CONTRACT ACT OF 1965, 41 U.S.C. 35,
ET SEQ., AND IT WILL THEREFORE BE ELIGIBLE TO PERFORM JANITORIAL
SERVICES AT KENNEDY SPACE CENTER AS A SUBCONTRACTOR OF BOEING COMPANY.
TO AIRCRAFT SERVICE INTERNATIONAL, INC.:
WE REFER TO YOUR LETTER OF JANUARY 15, 1971, RELATIVE TO A PROPOSED
PROCUREMENT BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA)
OF INSTALLATION SUPPORT SERVICES AT KENNEDY SPACE CENTER (KSC) UNDER
REQUEST FOR PROPOSALS (RFP) NO. 2-370-0. NASA HAS ANNOUNCED ITS
INTENTION TO NEGOTIATE A CONTRACT WITH THE BOEING COMPANY (BOEING), BUT
AWARD IS BEING WITHHELD PENDING DECISION BY OUR OFFICE ON TWO PROTESTS
IN THE MATTER.
YOUR INTEREST IN THE PROCUREMENT IS AS A POSSIBLE SUBCONTRACTOR TO
BOEING FOR THE PERFORMANCE OF THE JANITORIAL SERVICES AT KSC, WHICH YOU
ARE CURRENTLY PERFORMING UNDER A SUBCONTRACT WITH TRANS WORLD AIRLINES,
INCORPORATED, WHOSE PRIME CONTRACT EXPIRES ON MARCH 31, 1971. IN THIS
CONNECTION, YOU STATE THAT DYNAMIC ENTERPRISES, INC. (DYNAMIC), WHO
PERFORMS JANITORIAL SERVICES AS SUBCONTRACTOR TO BOEING, HAS BEEN
CHARGED BY THE UNITED STATES DEPARTMENT OF LABOR WITH SEVERAL VIOLATIONS
OF THE SERVICE CONTRACT ACT OF 1965, 41 U.S.C. 351, ET SEQ., AND YOU ARE
THEREFORE CONCERNED WITH THE EFFECT OF THE ACTION WHICH MAY BE TAKEN
AGAINST DYNAMIC PURSUANT TO SECTION 5(A) OF THE ACT; I.E., POSSIBLE
LISTING OF DYNAMIC BY THE COMPTROLLER GENERAL AS A FIRM TO WHOM NO
GOVERNMENT CONTRACTS MAY BE AWARDED FOR A PERIOD OF THREE YEARS.
ACCORDINGLY, YOU REQUEST THAT OUR OFFICE INVESTIGATE THE MATTER AND TAKE
WHATEVER ACTION IS WARRANTED.
IN A DECISION ISSUED JANUARY 25, 1971, THE ADMINISTRATOR, WAGE AND
HOUR AND PUBLIC CONTRACTS DIVISIONS, DEPARTMENT OF LABOR, ACTING
PURSUANT TO AN APPEAL BY DYNAMIC FROM AN ADVERSE DECISION OF THE
DEPARTMENT'S HEARING EXAMINER (SEE 29 C.F.R. 6.11), RECOMMENDED THAT THE
SECRETARY OF LABOR TAKE AFFIRMATIVE ACTION TO RELIEVE DYNAMIC FROM THE
INELIGIBLE LIST PROVISIONS OF SECTION 5(A) OF THE ACT. IN LIGHT OF SUCH
ACTION, IT WOULD NOT APPEAR THAT THE DEBARMENT SANCTIONS PROVIDED BY THE
ACT WILL BE IMPOSED AGAINST DYNAMIC.
B-171592, FEB 26, 1971
TRAVEL EXPENSES - MANPOWER SHORTAGE DETERMINATION
DECISION DENYING REIMBURSEMENT OF TRAVEL EXPENSES TO FLORE LEKANOF, A
NEW EMPLOYEE, INCIDENT TO TRAVEL FROM ANCHORAGE, ALASKA, TO WASHINGTON,
D.C.
PAYMENT OF TRAVEL AND TRANSPORTATION EXPENSES TO NEW APPOINTEES IS
GOVERNED BY 5 U.S.C. 5723 AND ALLOWS REIMBURSEMENT WHEN THE APPOINTMENT
IS TO A POSITION IN THE U.S. FOR WHICH THE CIVIL SERVICE COMMISSION
DETERMINES THERE IS A MANPOWER SHORTAGE. WHERE THE COMMISSION HAS MADE
NO SUCH DETERMINATION CLAIMANT IS NOT TO BE REGARDED AS QUALIFYING FOR
TRAVEL AND TRANSPORTATION EXPENSES UNDER THE ABOVE STATUTE,
NOTWITHSTANDING THE FACT ADMINISTRATIVE PERSONNEL INFORMED HIM THAT HE
WAS ELIGIBLE.
TO MR. BERT J. PAPPAN:
WE HAVE RECEIVED YOUR LETTER OF DECEMBER 22, 1970, IN WHICH YOU
REQUEST A DECISION ON THE CLAIM OF MR. FLORE LEKANOF FOR REIMBURSEMENT
OF EXPENSES INCURRED IN APRIL OF 1970 IN TRAVELING FROM ANCHORAGE,
ALASKA, TO WASHINGTON, D.C., WHERE HE ACCEPTED AN APPOINTMENT IN THE
BUREAU OF INDIAN AFFAIRS.
MR. LEKANOF WAS A NEW APPOINTEE BUT WAS TOLD BY ADMINISTRATIVE
PERSONNEL THAT HE WAS ELIGIBLE FOR REIMBURSEMENT FOR THE EXPENSES IN
QUESTION. THIS IS SUPPORTED BY THE FACT THAT HIS TRAVEL ORDERS
AUTHORIZED SUCH EXPENSES AS WELL AS THE FACT THAT HE WAS REQUIRED TO
SIGN AN EMPLOYMENT AGREEMENT ON APRIL 15, 1970. MR. LEKANOF CLAIMS THE
REIMBURSEMENT UNDER THE PROVISIONS OF 5 U.S.C. 5723 WHICH AUTHORIZES
TRAVEL AND TRANSPORTATION EXPENSES OF NEW APPOINTEES UNDER CERTAIN
CIRCUMSTANCES. HE STATES THAT HE REASONABLY RELIED ON INFORMATION
PROVIDED BY GOVERNMENT OFFICIALS.
PAYMENT OF TRAVEL AND TRANSPORTATION EXPENSES TO NEW APPOINTEES IS
GOVERNED BY 5 U.S.C. 5723, IN PART, AS FOLLOWS:
"(A) *** AN AGENCY MAY PAY ***
"(1) TRAVEL EXPENSES OF A NEW APPOINTEE *** TO A POSITION IN THE
UNITED STATES FOR WHICH THE CIVIL SERVICE COMMISSION DETERMINES THERE IS
A MANPOWER SHORTAGE; AND
"(2) TRANSPORTATION EXPENSES OF HIS IMMEDIATE FAMILY AND HIS
HOUSEHOLD GOODS AND PERSONAL EFFECTS TO THE EXTENT AUTHORIZED BY SECTION
5724 OF THIS TITLE; FROM HIS PLACE OF RESIDENCE AT THE TIME OF
SELECTION OR ASSIGNMENT TO HIS DUTY STATION. ***
"(B) *** ONLY AFTER THE INDIVIDUAL SELECTED OR ASSIGNED AGREES IN
WRITING TO REMAIN IN THE GOVERNMENT SERVICE FOR 12 MONTHS AFTER HIS
APPOINTMENT OR ASSIGNMENT ***
"(D) THE COMMISSION MAY NOT DELEGATE ITS AUTHORITY TO DETERMINE
POSITIONS FOR WHICH THERE IS A MANPOWER SHORTAGE FOR THE PURPOSE OF THIS
SECTION."
THE EMPLOYEE ALLEGES THAT HIS NEW POSITION WAS IN THE MANPOWER
SHORTAGE CATEGORY. THE ONLY EVIDENCE SUPPORTING THIS CONTENTION IS IN A
TRAVEL AUTHORIZATION DATED DECEMBER 9, 1970, SEVEN MONTHS AFTER THE
TRANSFER, WHICH REFERS TO A MANPOWER SHORTAGE CATEGORY. BUT OUR
UNDERSTANDING IS THAT THE CIVIL SERVICE COMMISSION HAS MADE NO
DETERMINATION OF A MANPOWER SHORTAGE FOR THE POSITION TO WHICH MR.
LEKANOF WAS APPOINTED. IN VIEW THEREOF, HE IS NOT TO BE REGARDED AS
QUALIFYING FOR TRAVEL AND TRANSPORTATION EXPENSES UNDER THE ABOVE
STATUTE.
IT IS WELL ESTABLISHED THAT THE UNITED STATES IS NOT BOUND BY THE
UNAUTHORIZED ACTS OF ITS OFFICERS AND EMPLOYEES. FEDERAL CROP INSURANCE
CORPORATION V MERRILL, ET AL., 332 U.S. 380, 385 (1947); IN RE HOOPER'S
ESTATE, 359 F. 2D 569, 577 (1966). THEREFORE, THE FACT THAT MR. LEKANOF
WAS INFORMED THAT HIS EXPENSES WOULD BE PAID DOES NOT CONSTITUTE ANY
BASIS FOR ALLOWANCE OF HIS CLAIM.
WE NOTE YOUR REFERENCE TO THE BILL S. 4051 INTRODUCED IN THE 91ST
CONGRESS, 2D SESSION, WHICH PROPOSED TO AUTHORIZE PAYMENT OF THE
EXPENSES HERE INVOLVED. HOWEVER THE BILL WAS NEVER ENACTED INTO LAW.
THE VOUCHER, WITH ATTACHMENTS, IS RETURNED HEREWITH AND MAY NOT BE
CERTIFIED FOR PAYMENT.
B-171907, FEB 26, 1971
MUSTERING-OUT PAY
DECISION DENYING CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF $3,600
DUE TO 10-YEAR PERIOD PRESCRIBED BY ACT OF OCTOBER 9, 1940.
ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THE PROVISIONS OF THE
MUSTERING-OUT PAYMENT ACT OF 1944 ARE SUBJECT TO THE 10-YEAR LIMITATION
PERIOD PRESCRIBED BY THE ACT OF OCTOBER 9, 1940, BECAUSE THIS CLAIM WAS
RECEIVED AFTER THE 10-YEAR PERIOD, IT MUST BE DISALLOWED.
TO MR. EMILIANO P. PIELAGO:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 12, 1970,
ADDRESSED TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS,
INDIANA, CONCERNING YOUR CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE
INCIDENT TO YOUR DISCHARGE FROM MILITARY SERVICE IN 1949. YOUR LETTER
WAS FORWARDED TO OUR OFFICE FOR REPLY.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
SEPTEMBER 3, 1965, AND SEPTEMBER 26, 1967. IN THOSE LETTERS YOU WERE
ADVISED OF THE PROVISIONS OF THE ACT OF OCTOBER 9, 1940, CH. 788, 54
STAT. 1061, 31 U.S.C. 71A, WHICH BAR CONSIDERATION OF YOUR CLAIM BY THIS
OFFICE DUE TO THE FACT THAT SUCH CLAIM WAS NOT RECEIVED IN OUR OFFICE
WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOU ARE ENTITLED TO
MUSTERING-OUT PAY OF $3,600 "UNDER THE PROVISION OF ACT NO. 263 OF THE
88TH U.S. CONGRESS DATED JANUARY 9, 1963, AND APPROVED SEPTEMBER 3,
1968," YOU ARE ADVISED THAT NEITHER PUBLIC LAW 88-263 (WHICH WAS
APPROVED JANUARY 31, 1964, AND HAD NOTHING TO DO WITH MUSTERING-OUT
PAY), NOR ANY OTHER LAW OF WHICH WE ARE AWARE, AUTHORIZES THE PAYMENT OF
YOUR CLAIM. ANY RIGHT YOU MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED
UNDER THE MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS
AMENDED, 38 U.S.C. 691 ET SEQ. (1946 ED.) AND IMPLEMENTING REGULATIONS
CONTAINED IN PARAGRAPHS 313-322 OF T.M. 14-502. HOWEVER, ALL CLAIMS
FOR MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW AND REGULATIONS ARE
SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION PERIOD FIXED BY THE
1940 ACT.
IN VIEW OF THE FACT THAT YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE
ON AUGUST 25, 1965, NEARLY 17 YEARS AFTER THE DATE OF YOUR DISCHARGE ON
FEBRUARY 29, 1949, THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY
TAKE ON YOUR CLAIM.
B-163502, FEB 25, 1971
MILITARY - MUSTERING OUT PAY
DECISION THAT CLAIM FOR MUSTERING-OUT PAY FOR SERVICE IN WORLD WAR II
IS PRECLUDED BY BARRED CLAIMS ACT.
TO MR. VICENTE C. JITO:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 5, 1970,
ADDRESSED TO THE FINANCE CENTER, UNITED STATES ARMY, INDIANAPOLIS,
INDIANA, WHICH WAS FORWARDED TO THIS OFFICE FOR REPLY, CONCERNING YOUR
CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF 3,600 PESOS, BELIEVED DUE
INCIDENT TO SERVICE IN THE USAFFE DURING WORLD WAR II.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
JULY 10, 1967, AND OCTOBER 12, 1967, AND OF OUR DECISION B-163502, OF
APRIL 19, 1968, IN WHICH YOU WERE ADVISED THAT CONSIDERATION OF YOUR
CLAIM FOR MUSTERING-OUT PAY WAS BARRED BY THE ACT OF OCTOBER 9, 1940,
CH. 788, 54 STAT. 1061, 31 U.S.C. 71A, SINCE IT WAS NOT RECEIVED IN OUR
OFFICE WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOU ARE ENTITLED TO
MUSTERING-OUT PAY "UNDER THE PROVISIONS OF ACT. NO. 263, 88TH US
CONGRESS, DATED 9 JANUARY, 1963, AS APPROVED SEPTEMBER 30, 1965," YOU
ARE ADVISED THAT NEITHER PUBLIC LAW 88-263 (WHICH WAS APPROVED ON
JANUARY 31, 1964, AND HAD NOTHING TO DO WITH MUSTERING-OUT PAY), NOR ANY
OTHER LAW OF WHICH WE ARE AWARE, AUTHORIZES THE PAYMENT OF YOUR CLAIM.
ANY RIGHT YOU MAY HAVE HAD TO MUSTERING-OUT PAY AS A MEMBER OF THE
USAFFE ACCRUED UNDER THE MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58
STAT. 8, AS AMENDED, 38 U.S.C. 691, ET SEQ. (1946 ED.), AND IMPLEMENTING
REGULATIONS CONTAINED IN PARAGRAPHS 313-322 OF T.M. 14-502. HOWEVER,
ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW AND
REGULATIONS ARE SUBJECT TO THE BAR IMPOSED BY THE 1940 ACT.
WHILE YOU HAVE MENTIONED THE USAFFE IN PAST CORRESPONDENCE, IT
APPEARS THAT YOUR SERVICE MAY HAVE BEEN AS A MEMBER OF THE PHILIPPINE
ARMY. BY AGREEMENT BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE
UNITED STATES, CLAIMS FOR PAY AND ALLOWANCES FOR MEMBERS OF THE
ORGANIZED MILITARY FORCES OF THE COMMONWEALTH OF THE PHILIPPINES SERVING
IN WORLD WAR II ARE FOR PAYMENT BY THE PHILIPPINE GOVERNMENT. SHOULD
YOU HAVE A VALID CLAIM UNDER THAT AGREEMENT IT SHOULD BE SUBMITTED TO
THE PHILIPPINE GOVERNMENT.
INSOFAR AS YOUR CLAIM AGAINST THE UNITED STATES IS CONCERNED, AS IT
WAS FIRST RECEIVED IN OUR OFFICE ON JULY 5, 1967, MORE THAN 10 YEARS
AFTER THE TERMINATION OF YOUR WORLD WAR II SERVICE, THERE IS NO FURTHER
ACTION THIS OFFICE MAY LEGALLY TAKE ON YOUR CLAIM.
B-170235, FEB 25, 1971
BID PROTEST - IMPROPER AWARD
WITH RESPECT TO DECISION OF NOVEMBER 18, 1970, HOLDING THAT ALTHOUGH
AWARD TO NUCLEAR INSTRUMENT CORP., WAS IMPROPER GAO WAS PRECLUDED FORM
TAKING EFFECTIVE ACTION BECAUSE CONTRACT WAS COMPLETED, INFORMAL ADVICE
INDICATES STEPS ARE BEING TAKEN TO PREVENT REPETITION OF IMPROPRIETY.
TO TROXLER ELECTRONIC LABORATORIES, INC.:
IN A LETTER OF DECEMBER 10, 1970, YOU ACKNOWLEDGED RECEIVING A COPY
OF OUR DECISION B-170235 OF NOVEMBER 18, 1970, TO THE SECRETARY OF
AGRICULTURE, HOLDING THAT THE AWARD MADE TO NUCLEAR INSTRUMENTS CORP.
UNDER FOREST SERVICE SOLICITATION R9-70-537 WAS IMPROPER, BUT THAT OUR
OFFICE WAS PRECLUDED FROM TAKING CORRECTIVE ACTION BECAUSE THE CONTRACT
WAS COMPLETED AND THE CONTRACTOR PAID.
YOU INQUIRE WHAT STEPS ARE BEING TAKEN BY OUR OFFICE TO ASSURE THAT
IMPROPER AWARDS WILL NOT BE MADE IN THE FUTURE.
OUR OFFICE CANNOT PROVIDE ASSURANCE THAT IMPROPER AWARDS WILL NOT BE
MADE IN THE FUTURE. HOWEVER, WHEN WE FIND AN IMPROPRIETY AND DO NOT
TAKE CORRECTIVE ACTION BECAUSE OF THE ADVANCED STATE OF THE CONTRACT, WE
DO BRING THE IMPROPRIETY TO THE ATTENTION OF THE HEAD OF THE CONTRACTING
AGENCY. WE TRUST THAT, IN FOCUSING UPON THE IMPROPER ACTION IN THIS
FASHION, RECURRENCES MAY BE AVOIDED IN THE FUTURE.
IN THE PRESENT CASE, AS THE DECISION OF NOVEMBER 18, 1970, WILL
TESTIFY, WE BROUGHT OUR CRITICISM OF THE IMPROPER ACTION TO THE
ATTENTION OF THE SECRETARY OF AGRICULTURE. WE HAVE BEEN ADVISED
INFORMALLY THAT, AS A RESULT OF OUR DECISION, ACTION IS BEING TAKEN WITH
A VIEW TOWARD PREVENTING REPETITION OF THE ERRORS NOTED IN THE DECISION.
WE RECOGNIZE THAT THIS MAY NOT PROVIDE YOU WITH TOTAL SATISFACTION,
SINCE YOU HAVE REALIZED NO MATERIAL BENEFIT FROM YOUR SUCCESSFUL PROTEST
AGAINST THE AWARD MADE TO NUCLEAR INSTRUMENTS CORP. HOWEVER, WHILE THE
BID PROTEST PROCEDURES MAY NOT HAVE AFFORDED YOU AN ADEQUATE REMEDY IN
THIS CASE, WE TRUST THAT THE AVAILABILITY OF THE PROCEDURES WILL
CONTINUE TO SERVE A SALUTARY PURPOSE IN HELPING TO MAINTAIN PROPER
CONTRACTING PROCEDURES ON A GOVERNMENT-WIDE BASIS.
B-169285, FEB 24, 1971
TRANSPORTATION CHARGES - DAMAGE IN TRANSIT - RELEASED VALUE
DECISION HOLDING THAT NELSON FREIGHTWAYS, INC., IS LIABLE FOR THE
FULL EXTENT OF DAMAGES TO A JET ENGINE SHIPPED AT RELEASED VALUE FROM
LORING AIR FORCE BASE, MAINE, TO PLATTSBURGH AIR FORCE BASE, NEW YORK.
RECOVERY FOR DAMAGES WHEN GOODS ARE SHIPPED AT RELEASED VALUE IS
LIMITED TO THE AGREED VALUE AND NO RECOVERY OF THE EXCESS MAY BE HAD.
THEREFORE, SINCE THE RELEASED VALUE OF THE JET ENGINE WAS $11,460, THE
DAMAGES OF $1,265.40 ARE RECOVERABLE IN FULL AND NOT LIMITED, AS THE
CARRIER CONTENDS, TO A PROPORTIONATE SHARE BASED ON THE RATIO OF THE
RELEASED VALUE TO THE ACTUAL VALUE.
TO NELSON FREIGHTWAYS, INC.:
SUBJECT: REPAIRS TO DAMAGED ENGINE - $1,267.40. YOUR CLAIM FILE
C-6-452-480 P. D. COAKLEY C/O P. S. DUBREY F/B 03-784832 (DUBREY) F/B
C-788696 (COAKLEY)
WE HAVE CONSIDERED YOUR LETTER OF JANUARY 6, 1971, AND EARLIER
CORRESPONDENCE, IN WHICH YOU PROTESTED COLLECTION OF THE GOVERNMENT'S
CLAIM FOR REPAIRS TO A JET ENGINE SHIPPED AT A RELEASED VALUE AND
DAMAGED IN TRANSIT. YOUR OBJECTION IS NOT TO THE ASSUMPTION OF
LIABILITY NOR TO THE COST OF REPAIRS, BUT RATHER TO BEING CHARGED WITH
LIABILITY FOR THE FULL AMOUNT OF THE DAMAGES. YOU URGE THAT THE EXTENT
OF YOUR LIABILITY RUNS ONLY TO THAT PROPORTION OF THE REPAIR COSTS
DETERMINED BY THE RATIO BETWEEN THE RELEASED VALUE AND THE ACTUAL VALUE.
IN THE CIRCUMSTANCES OF THIS CASE, WE DISAGREE.
BILL OF LADING C-6452480 WAS ISSUED AUGUST 11, 1966, TO COVER A
SHIPMENT DESCRIBED AS "1 RT ENGINE INTERNAL COMBUSTION NOI (JET
PROPULSION TYPE J57/43WB) RELEASED TO VALUE NOT EXC $2.50 PER POUND.
ACFT TYPE J57/43WB SER NR P 627098," WEIGHING 4,584 POUNDS, FROM LORING
AIR FORCE BASE, MAINE TO PLATTSBURGH AIR FORCE BASE, NEW YORK, VIA P. D.
COAKLEY MOTOR TRANSPORTATION, INC., AND NECESSARY CONNECTIONS. THE
ENGINE WAS DELIVERED IN A DAMAGED CONDITION AT DESTINATION ON AUGUST 17,
1966, BY P. S. DUBREY TRUCKING COMPANY, WHICH HAD NOTED ITS FREIGHT
BILL, PRO NO. 03-784832, TO SHOW THAT THE ENGINE WAS DAMAGED WHEN
RECEIVED FROM P. D. COAKLEY. THE DELIVERING CARRIER BILLED AND
COLLECTED FREIGHT CHARGES OF $205.82 BASED UPON THE LESS TRUCKLOAD CLASS
85 RATING NAMED IN ITEM 120820, SUB 1, NATIONAL MOTOR FREIGHT
CLASSIFICATION A-8, MF-I.C.C. 7.
THE DAMAGED ENGINE WAS REPAIRED AT A COST OF $1,267.40; EFFORTS WERE
MADE TO COLLECT THAT AMOUNT FROM THE CARRIERS. YOU ASSUMED THE INITIAL
CARRIER'S LIABILITY AND, AFTER AN EXCHANGE OF CORRESPONDENCE WITH YOU,
OUR TRANSPORTATION DIVISION COLLECTED THE DAMAGES BY DEDUCTION. YOUR
PROTEST, GROUNDED UPON YOUR CONTENTION THAT THE RELEASED VALUE MAKES YOU
LIABLE ONLY FOR A PROPORTIONATE SHARE OF THE DAMAGES, FOLLOWED THAT
ACTION. YOU WOULD LIMIT THE GOVERNMENT'S RECOVERY TO $50.70, 4 PERCENT
OF THE REPAIR COSTS, WHICH IS ALMOST THE FACTOR DERIVED FROM DIVIDING
THE RELEASED VALUE ($11,460) BY THE ACTUAL VALUE ($228,511). BUT SUCH
AN ADJUSTMENT IS NOT AUTHORIZED BY THE TRANSPORTATION CONTRACT.
TO SET THIS QUESTION IN ITS PROPER CONTEXT, WE MUST RESORT TO THE
FACTS OF THE SHIPMENT AND TO THE TRANSPORTATION CONTRACT, AS REPRESENTED
BY THE GOVERNMENT BILL OF LADING, TOGETHER WITH THE GOVERNING
CLASSIFICATION. THE TERMS AND CONDITIONS OF THE CONTRACT AND THE
CLASSIFICATION DETERMINE THE EXTENT OF LIABILITY FOR LOSS AND DAMAGE IN
TRANSIT TO GOODS SHIPPED AT A RELEASED VALUATION. HERE, ONE JET
ENGINE-WEIGHING 4,584 POUNDS MOVED ON A GOVERNMENT BILL OF LADING "AT
THE RESTRICTED OR LIMITED VALUATION SPECIFIED IN THE TARIFF OR
CLASSIFICATION AT OR UNDER WHICH THE LOWEST RATE IS AVAILABLE, UNLESS
OTHERWISE INDICATED ON THE FACE HEREOF." (CONDITION 5 ON THE REVERSE OF
THE GOVERNMENT BILL OF LADING.) ON THE FACE OF THE BILL OF LADING, THE
ENGINE WAS STATED TO BE RELEASED TO A VALUE NOT EXCEEDING $2.50 PER
POUND.
THE GOVERNING CLASSIFICATION, NATIONAL MOTOR FREIGHT CLASSIFICATION
A-8, PROVIDED RELEASED AND UNRELEASED RATINGS ON "ENGINES, INTERNAL
COMBUSTION, NOI." ITEM 120820, SUB 1, PROVIDED A LESS TRUCKLOAD CLASS 85
RATING FOR SUCH ENGINES WHEN RELEASED TO A VALUE NOT EXCEEDING $2.50 PER
POUND, SUBJECT TO THE NOTE IN ITEM 120822. THAT NOTE PROVIDED FOR ENTRY
ON THE BILL OF LADING OF THE "RELEASED VALUATION, WHICH SHALL BE DEEMED
TO RELATE TO EACH ARTICLE SEPARATELY, AND NOT TO THE SHIPMENT AS A
WHOLE." THERE IS NOTHING IN THIS PROVISION OR IN THE TRANSPORTATION
CONTRACT WHICH WOULD AUTHORIZE DETERMINATION OF LIABILITY AT A RATIO
ESTABLISHED BY THE RELATIONSHIP BETWEEN THE ACTUAL VALUE AND THE
RELEASED VALUE.
THIS IS INDEED THE "TRUE LIMITATION" TYPE OF VALUATION CLAUSE
DESCRIBED BY THE SUPREME COURT IN THE ANSALDO SAN GIORGIO I V RHEINSTROM
BROS. CO., 294 U.S. 494, 497 (1935), IN WHICH THE AGREED OR RELEASED
VALUE OF THE GOODS OR OF EACH UNIT IS STATED IN THE BILL OF LADING, THE
RATE IS TIED TO THE RELEASED VALUE, AND THE CARRIER'S LIABILITY IS
LIMITED THERETO IN CONSIDERATION OF THE RATE. AS THE COURT EXPLAINED,
THE "DAMAGES ARE COMPUTED IN THE USUAL WAY WITHOUT REFERENCE TO THE
STIPULATION, BUT IF WHEN SO COMPUTED THEY EXCEED THE AGREED LIMIT OF
VALUE, NO RECOVERY OF THE EXCESS MAY BE HAD."
THE SHIPMENT AT ISSUE CONSISTED OF ONE ARTICLE - ONE JET ENGINE
WEIGHING 4,584 POUNDS - AND IN TERMS OF THE TARIFF PROVISION THE
RELEASED VALUE NECESSARILY RELATED TO THAT ONE ENGINE. THE LIMITATION
ON THE CARRIER'S LIABILITY WAS, THEREFORE, $11,460 (4,584 POUNDS AT
$2.50 PER POUND). THE DAMAGES - THE COST OF REPAIRS - WERE $1,267.40,
LESS THAN THE STIPULATION (THE AGREED LIMIT OF VALUE), SO THE DAMAGES
ARE RECOVERABLE IN FULL.
OUR CONCLUSION IS NOT INCONSISTENT WITH WESTERN TRANSIT CO. V A. C.
LESLIE & CO., LTD., 242 U.S. 448 (1917), WHICH YOU CITED. THERE, 25
TONS OF COPPER INGOTS WERE SHIPPED AT A RELEASED VALUE OF $100 PER TON;
WHILE IN STORAGE UNDER THE TRANSPORTATION CONTRACT, ABOUT ONE TON WORTH
$271.38 WAS STOLEN. THE LOWER COURTS HAD GIVEN JUDGMENT FOR THE FULL
VALUE ON THE THEORY THAT THE MAXIMUM LIMITATION OF LIABILITY WAS $2,500,
THE RELEASED VALUE OF THE ENTIRE SHIPMENT. THE SUPREME COURT REVERSED
AND REMANDED FOR FURTHER PROCEEDINGS, HOLDING THAT UNDER THE TERMS OF
THE BILL OF LADING CONTRACT AND THE APPLICABLE TARIFF, THE SHIPPER COULD
RECOVER NO MORE THAN $100 PER TON FOR EACH TON DAMAGED OR LOST.
YOU ALSO CITED IN SUPPORT OF YOUR POSITION ARONSTEIN V NEW YORK
CENTRAL R. CO., 243 N.Y.S. 221, CERT. DEN. 282 U.S. 850 (1930). IN THAT
CASE, A NEW YORK STATE COURT, WITHOUT OPINION, MODIFIED THE ORDER FOR
THE PAYMENT OF DAMAGES WHICH HAD BEEN ENTERED BY THE TRIAL COURT. NO
EXPLANATION WAS GIVEN FOR THE MODIFICATION; HOWEVER, THE TRIAL COURT
HAD WRITTEN AN OPINION (230 N.Y.S. 298) EXPLAINING THE PRINCIPLES
UNDERLYING ITS CONCLUSION AND THESE WERE NOT DISTURBED. WE DO NOT THINK
THE ARONSTEIN CASE CAN BE CONSIDERED A BINDING PRECEDENT.
WE CONCLUDE THAT THE TERMS OF THE BILL OF LADING, REPRESENTING THE
TRANSPORTATION CONTRACT, AND THE GOVERNING CLASSIFICATION AUTHORIZED THE
RECOVERY OF DAMAGES ON THE JET ENGINE TRANSPORTED WITHIN THE LIMITATION
OF ITS RELEASED VALUE, $11,460. THE ACTION OF OUR TRANSPORTATION
DIVISION IN COLLECTING THE FULL AMOUNT OF THE DAMAGES, $1,267.40, WAS
THEREFORE PROPER AND IT IS SUSTAINED.
B-170114, FEB 24, 1971
BID PROTEST - SMALL BUSINESS SET-ASIDE
DENIAL OF PROTEST OF U.S. ASTRO NAUTICS SYSTEMS, INC., SECOND LOW
BIDDER, AGAINST THE AWARD OF AN ADVERTISED CONTRACT ISSUED BY THE NAVAL
AIR ENGINEERING CENTER, PHILADELPHIA, PENN., AS A TOTAL SMALL BUSINESS
SET-ASIDE, FOR 332 MUNITION HANDLING WEAPONS TRAILERS TO BOND LUMBER AND
MILLING CORP.
SINCE ASTRO NAUTICS DID NOT INTEND TO MAKE A SIGNIFICANT CONTRIBUTION
TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT "END ITEM" WHICH IT WAS
TO SUPPLY, THE FAILURE TO INDICATE THAT THOSE ITEMS TO BE FURNISHED WERE
END ITEMS MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS RENDERS
PROTESTANT'S BID NONRESPONSIVE.
TO U.S. ASTRO NAUTICS SYSTEMS, INC.:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 25, 1970, AND PRIOR
CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO BOND LUMBER AND
MILLING CORPORATION UNDER INVITATION FOR BIDS (IFB) NO.
N00156-70-B-0374, ISSUED BY THE NAVAL AIR ENGINEERING CENTER,
PHILADELPHIA, PENNSYLVANIA.
THE SUBJECT INVITATION, A TOTAL SET-ASIDE FOR SMALL BUSINESS, WAS
ISSUED APRIL 2, 1970, TO COVER A REQUIREMENT FOR 332 MUNITION HANDLING
WEAPONS TRAILERS, TYPE AERO 51B. THIRTEEN BIDS WERE OPENED ON MAY 18,
1970. THE LOW BIDDER, SMITH AND COMPANY, WAS DETERMINED TO BE
NONRESPONSIBLE AND ITS BID WAS REJECTED. YOUR FIRM SUBMITTED THE SECOND
LOW BID. BY LETTER DATED JULY 31, 1970, THE CONTRACTING OFFICER ADVISED
YOUR FIRM THAT ITS BID WAS REJECTED BECAUSE IT WAS NONRESPONSIVE TO THE
SMALL BUSINESS SET-ASIDE CLAUSE AND SIZE STANDARD SHOWN ON PAGE 21 OF
THE INVITATION IN THAT THE SUBCONTRACTOR (MANUFACTURER) SPECIFIED IN THE
BID IS A LARGE BUSINESS CONCERN. THEREAFTER, THE CONTRACTING OFFICER
DETERMINED THAT THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER WAS THE BOND
LUMBER AND MILLING CORPORATION AND AN AWARD WAS MADE TO THAT FIRM.
IN A LETTER OF SEPTEMBER 9, 1970, YOU STATE THAT YOUR FIRM KNOWS OF
NO RULE OR REGULATION THAT PREVENTS SUBCONTRACTING WITH A LARGE BUSINESS
CONCERN UNDER A SMALL BUSINESS SET-ASIDE. FURTHER, YOU STATE THAT YOU
KNOW OF NO RULE OR REGULATION THAT DETERMINES WHAT PERCENTAGE OF
SUBCONTRACTING TO A LARGE BUSINESS CONCERN IS PERMISSIBLE. YOU REQUEST
THAT THE CONTRACT AWARD BE SET ASIDE AND AWARD BE MADE TO YOUR FIRM AS
THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER.
SINCE THE PROCUREMENT WAS WHOLLY SET ASIDE FOR SMALL BUSINESS, THE
REPRESENTATIONS AND CERTIFICATIONS REQUIRED TO BE MADE BY BIDDERS WERE
OF SPECIAL SIGNIFICANCE. PAGE 2 OF YOUR BID (STANDARD FORM 33) ENTITLED
"REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGMENTS," WAS COMPLETED AS
FOLLOWS:
"1. SMALL BUSINESS (SEE PAR. 14 ON SF 33A)
HE X IS, IS NOT, A SMALL BUSINESS CONCERN. IF OFFEROR IS A SMALL
BUSINESS CONCERN AND IS NOT THE MANUFACTURER OF THE SUPPLIES OFFERED, HE
ALSO REPRESENTS THAT ALL SUPPLIES TO BE FURNISHED HEREUNDER WILL, WILL
NOT, BE MANUFACTURED OR PRODUCED BY A SMALL BUSINESS CONCERN IN THE
UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO.
"2. REGULAR DEALER-MANUFACTURER (APPLICABLE ONLY TO SUPPLY CONTRACTS
EXCEEDING $10,000).
HE IS A REGULAR DEALER IN, X MANUFACTURER OF, THE SUPPLIES OFFERED."
IN VIEW OF THE FACT THAT YOUR BID REPRESENTED THAT YOU WERE A
MANUFACTURER SUBMITTING A BID IN YOUR OWN NAME, YOU WERE REQUIRED UNDER
THE PROVISIONS OF THE "NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE" TO
FURNISH CONTRACT END ITEMS MANUFACTURED OR PRODUCED IN THE UNITED
STATES, ITS POSSESSIONS, OR PUERTO RICO, BY SMALL BUSINESS CONCERNS.
YOUR FIRM REPRESENTED AND CERTIFIED THAT IT "IS A SMALL BUSINESS
CONCERN." PAGE 21 OF THE IFB CONTAINED THE CLAUSE, ENTITLED "NOTICE OF
TOTAL SMALL BUSINESS SET-ASIDE," WHICH PROVIDED IN PERTINENT PART:
"(B) DEFINITION. A 'SMALL BUSINESS CONCERN' IS A CONCERN, INCLUDING
ITS AFFILIATES, WHICH IS INDEPENDENTLY OWNED AND OPERATED, IS NOT
DOMINANT IN THE FIELD OF OPERATION IN WHICH IT IS BIDDING ON GOVERNMENT
CONTRACTS, AND CAN FURTHER QUALIFY UNDER THE CRITERIA SET FORTH IN
REGULATIONS OF THE SMALL BUSINESS ADMINISTRATION (CODE OF FEDERAL
REGULATIONS, TITLE 13, SECTION 121.3-8). IN ADDITION TO MEETING THESE
CRITERIA, A MANUFACTURER OR A REGULAR DEALER SUBMITTING BIDS OR
PROPOSALS IN HIS OWN NAME MUST AGREE TO FURNISH IN THE PERFORMANCE OF
THE CONTRACT END ITEMS MANUFACTURED OR PRODUCED IN THE UNITED STATES,
ITS POSSESSIONS, OR PUERTO RICO, BY SMALL BUSINESS CONCERNS: *** "
THE SCHEDULE OF THE IFB SPECIFIES THAT THE SMALL BUSINESS EMPLOYMENT
SIZE STANDARD FOR PRODUCT CLASSIFICATION CC3715 IS 500 PEOPLE. AN
EXAMINATION OF YOUR BID BY THE CONTRACTING OFFICER FAILED TO INDICATE
THAT YOU INTENDED TO FURNISH PRODUCTS MANUFACTURED BY SMALL BUSINESS
CONCERNS AND THEREFORE YOUR BID WAS REJECTED AS NONRESPONSIVE. THE
BASIS FOR THE CONTRACTING OFFICER'S DECISION IS SET FORTH BELOW.
ON PAGE 13 OF YOUR BID, UNDER THE "INSPECTION AND ACCEPTANCE" CLAUSE,
YOUR FIRM LISTED THE NAME OF BROWN-MINNEAPOLIS TANK AND FABRICATION CO.,
ST. PAUL, MINNESOTA, AS THE PRINCIPAL MANUFACTURER OF THE SUPPLIES.
SECONDLY, THE ADDRESS OF THIS SUBCONTRACTOR WAS LISTED BY YOUR FIRM AS
THE LOCATION WHERE THE SUPPLIES WOULD BE INSPECTED AND THIS SAME ADDRESS
WAS LISTED ON PAGE 11 OF YOUR BID AS THE F.O.B. POINT OF ORIGIN.
THIRDLY, YOUR FIRM DESIGNATED BROWN-MINNEAPOLIS TANK AND FABRICATION CO.
TO BE THE RECIPIENT OF THE GOVERNMENT FURNISHED-PROPERTY. FINALLY, YOUR
FIRM WAS GIVEN NOTICE THAT BIDS WOULD ALSO BE EVALUATED UPON
TRANSPORTATION COSTS FROM THE PLACE OF MANUFACTURE (AGAIN
BROWN-MINNEAPOLIS OF ST. PAUL, MINNESOTA) BASED UPON RATES EXISTING AT
THE TIME OF BID OPENING.
THE CONTRACTING OFFICER MADE A FORMAL REQUEST ON JUNE 26, 1970, TO
THE SMALL BUSINESS ADMINISTRATION (SBA) IN MINNEAPOLIS, MINNESOTA,
REQUESTING A SIZE DETERMINATION OF YOUR LISTED SUBCONTRACTOR. THE SBA
REPLIED BY LETTER DATED JULY 8, 1970, ADVISING THAT THE LISTED
SUBCONTRACTOR WAS A LARGE BUSINESS. THE SBA ALSO ATTACHED A LETTER
DATED JULY 6, 1970, FROM BROWN-MINNEAPOLIS STATING THAT THIS FIRM NEVER
PROPOSED TO SUPPLY ITEMS TO U.S. ASTRO NAUTICS. FURTHER,
BROWN-MINNEAPOLIS, BY LETTER DATED JULY 7, 1970, ADVISED THE CONTRACTING
OFFICER THAT IT HAD MADE NO PROPOSAL TO YOUR FIRM AND THE USE OF THE
BROWN-MINNEAPOLIS NAME WAS UNAUTHORIZED. THE RECORD ALSO INDICATES THAT
THE COGNIZANT DEFENSE CONTRACT ADMINISTRATION SERVICES REGION ADVISED
THAT YOUR FIRM IS NOT A QUALIFIED MANUFACTURER FOR THE TYPE OF ITEM
BEING PROCURED.
SINCE YOUR BID FAILED TO INDICATE AN INTENTION TO FURNISH PRODUCTS
MANUFACTURED BY SMALL BUSINESS CONCERNS, IT WAS REJECTED AS
NONRESPONSIVE.
AS INDICATED ABOVE, THE INVITATION WAS SET ASIDE FOR SMALL BUSINESS
CONCERNS AND REQUIRED THAT THE END PRODUCT BE MANUFACTURED BY A SMALL
BUSINESS CONCERN. HOWEVER, YOU DID NOT INDICATE IN YOUR BID THAT THE
ARTICLES BEING PROCURED WOULD BE MANUFACTURED BY A SMALL BUSINESS
CONCERN AND THE NAMED PRINCIPAL MANUFACTURER WAS A LARGE BUSINESS FIRM
WHICH, IN ANY EVENT, HAS DENIED THAT IT WOULD PERFORM FOR YOU.
THEREFORE, YOUR BID DID NOT REPRESENT THAT THE ARTICLES WOULD BE
MANUFACTURED BY A SMALL BUSINESS CONCERN. IN B-152294, AUGUST 27, 1963,
OUR OFFICE HELD THAT THE OMISSION OF SUCH INFORMATION FROM A BID WAS A
MATERIAL DEVIATION RENDERING THE BID NONRESPONSIVE. FURTHER, OUR OFFICE
HAS CONSISTENTLY HELD THAT BIDS WHICH ARE NONRESPONSIVE IN A MATERIAL
RESPECT CANNOT BE MADE RESPONSIVE AFTER BID OPENING. SEE 40 COMP. GEN.
432 (1961); 38 ID. 819 (1959); AND 17 ID. 554 (1938).
WITH REGARD TO YOUR STATEMENT THAT YOUR FIRM KNOWS OF NO RULE OR
REGULATION THAT PREVENTS SUBCONTRACTING WITH A LARGE BUSINESS CONCERN
UNDER A SMALL BUSINESS SET-ASIDE, OUR OFFICE STATED IN B-166727, JULY
15, 1969:
" *** 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 39 COMP. GEN.
435; B-148155, SUPRA; B-154207, NOVEMBER 20, 1964." WE ARE ADVISED BY
A REPRESENTATIVE OF THE NAVY THAT ASTRO NAUTICS DID NOT INTEND TO MAKE A
SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE
CONTRACT "END ITEM" AND AN EXAMINATION OF YOUR BID FAILED TO INDICATE
ANY INTENTION TO FURNISH CONTRACT END ITEMS MANUFACTURED OR PRODUCED BY
SMALL BUSINESS CONCERNS.
IN LIGHT OF THE FOREGOING, IT IS OUR VIEW THAT YOUR BID PROPERLY WAS
DETERMINED TO BE NONRESPONSIVE. ACCORDINGLY, THE PROTEST IS DENIED.
B-171266, FEB 24, 1971
CIVILIAN EMPLOYEES - PER DIEM - NONWORK DAYS
ALLOWING CLAIM FOR PER DIEM FOR JULY 3, 4, AND 5 INCURRED IN
CONNECTION WITH TRAVEL PERFORMED BY MR. ILMERS BERGMANIS AN EMPLOYEE OF
THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
CONSISTENT WITH STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, PARAGRAPH
6.3, SINCE CLAIMANT DID NOT RETURN TO HIS PLACE OF ABODE OR OFFICIAL
STATION NOR WERE THE NONWORK DAYS IMMEDIATELY PRECEDED AND FOLLOWED BY A
LEAVE OF ABSENCE, PAYMENT OF PER DIEM FOR JULY 3, 4, AND 5 IS PROPER
BECAUSE A TRAVELER, UNDER THE ABOVE CIRCUMSTANCES, WILL BE CONSIDERED TO
BE IN SUBSISTENCE STATUS ON NONWORK DAYS.
TO MRS. LUELLA S. HOWARD:
WE REFER TO YOUR LETTER DATED NOVEMBER 9, 1970, WITH ENCLOSURES,
REQUESTING OUR DECISION AS TO WHETHER A TRAVEL VOUCHER IN FAVOR OF MR.
ILMARS BERGMANIS COULD BE PROPERLY CERTIFIED FOR PAYMENT. BY LETTER
DATED DECEMBER 18, 1970, WE ADVISED YOU THAT A DECISION COULD NOT BE
RENDERED IN THE ABSENCE OF A FURTHER EXPLANATION OF THE RECLAIM VOUCHER.
IN A MEMORANDUM DATED JANUARY 7, 1971, MR. BERGMANIS WHOSE OFFICIAL
STATION IS CHICAGO, ILLINOIS, FURNISHED US WITH ADDITIONAL INFORMATION.
WE WERE INFORMALLY ADVISED BY YOUR OFFICE THAT MR. BERGMANIS WAS
ALLOWED PER DIEM FOR 11-1/2 DAYS ON THE ORIGINAL VOUCHER IN WHICH HE
CLAIMED 14-3/4 DAYS. HIS RECLAIM IS FOR THE DIFFERENCE OF 3-1/4 DAYS.
HE INDICATED IN HIS LETTER TO OUR OFFICE THAT THE DAYS IN QUESTION ARE
JULY 2, 3, 4, AND 5. THE LAST TWO OF THOSE DAYS (SATURDAY AND SUNDAY)
WERE NONWORKDAYS, AND WE PRESUME JULY 3 WAS ALSO A NONWORKDAY (HOLIDAY)
FOR EMPLOYEES WHOSE BASIC WORKWEEK IS MONDAY THROUGH FRIDAY. 5 U.S.C.
6103(B)(1). MR. BERGMANIS STATED THAT HE DID NOT RETURN TO HIS OFFICIAL
STATION DURING THE NONWORKDAYS BUT WENT ON A TRIP AT PERSONAL EXPENSE TO
TORONTO, CANADA.
THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, PARAGRAPH 6.3,
PROVIDE IN PART AS FOLLOWS:
"A TRAVELER WILL BE CONSIDERED TO BE IN SUBSISTENCE STATUS ON NONWORK
DAYS UNLESS HE RETURNS TO HIS OFFICIAL STATION OR PLACE OF ABODE FROM
WHICH HE COMMUTES DAILY TO HIS OFFICIAL STATION, OR UNLESS SUCH NONWORK
DAY IS IMMEDIATELY PRECEDED AND FOLLOWED BY LEAVE OF ABSENCE: PROVIDED,
THAT PER DIEM IN LIEU OF SUBSISTENCE MAY NOT BE PAID FOR MORE THAN 2
NONWORK DAYS WHERE THE LEAVE OF ABSENCE IS IMMEDIATELY PRECEDED AND
FOLLOWED BY NONWORK DAYS."
THIS LANGUAGE REQUIRES THE TERMINATION OF SUBSISTENCE STATUS ONLY
WHEN THE ABOVE CONDITIONS EXIST. HERE THE CLAIMANT DID NOT RETURN TO
HIS PLACE OF ABODE OR OFFICIAL STATION NOR WERE THE NONWORKDAYS
IMMEDIATELY PRECEDED AND FOLLOWED BY A LEAVE OF ABSENCE. THUS, AND
SINCE THERE IS NO SHOWING THAT THE CLAIMANT WAS REQUIRED TO RETURN TO
HIS OFFICIAL STATION ON NONWORKDAYS, PAYMENT OF PER DIEM FOR JULY 3, 4,
AND 5 APPEAR PROPER.
MR. BERGMANIS STATES THAT HE "HAD A FULL DAY OFF ON JULY 3RD BECAUSE
OF THE OVERTIME EARNED SOME OTHER TIME." HOWEVER, SINCE JULY 3 WAS A
NONWORKDAY IT IS POSSIBLE THAT HE IS REFERRING TO JULY 2 (THURSDAY)
WHICH WAS A REGULARLY SCHEDULED WORKDAY. FURTHER INFORMATION IS
THEREFORE NEEDED TO DETERMINE HIS ENTITLEMENT, IF ANY, TO PER DIEM FOR
JULY 2. IN THIS CONNECTION WE CALL YOUR ATTENTION TO THAT PART OF
SECTION 6.3 OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS WHICH
CONTROLS THE QUESTION OF PER DIEM ALLOWANCES WHEN LEAVES OF ABSENCE
OCCUR WHOLLY WITHIN A SINGLE DAY. THE PERTINENT LANGUAGE IS AS FOLLOWS:
"FRACTIONAL LEAVE OF ABSENCE WHOLLY WITHIN A DAY, WHERE FOR HALF OF
THE PRESCRIBED WORKING HOURS OR LESS, WILL BE DISREGARDED FOR
SUBSISTENCE PURPOSES; WHERE IT EXCEEDS HALF OF THE PRESCRIBED WORKING
HOURS NO SUBSISTENCE WILL BE ALLOWED FOR THE DAY."
ON THE BASIS OF THE PRESENT RECORD THE ENCLOSED RECLAIM VOUCHER MAY
BE CERTIFIED FOR PAYMENT IN THE AMOUNT OF $60. AN ADDITIONAL AMOUNT MAY
POSSIBLY BE DUE UPON YOUR OBTAINING ADDITIONAL INFORMATION FROM MR.
BERGMANIS CONCERNING JULY 2.
B-171372, FEB 24, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
DISCHARGE FROM THE PHILIPPINE SCOUTS ON BASIS THAT CLAIM NOT ASSERTED
WITHIN 10-YEARS FROM DATE IT ACCRUED IS BARRED BY THE ACT OF OCTOBER 9,
1940, 31 U.S.C. 71A.
TO MR. JUAN PIDO:
REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 1, 1971, CONCERNING YOUR
CLAIM FOR DIFFERENTIAL PAY AND MUSTERING-OUT PAY BELIEVED DUE INCIDENT
TO YOUR DISCHARGE FROM MILITARY SERVICE IN 1949.
AS YOU WERE ADVISED IN OUR DECISION OF JANUARY 4, 1971, B-171372, THE
ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT. 1061, AS AMENDED, 31 U.S.C.
71A, BARS OUR OFFICE FROM CONSIDERING YOUR CLAIM. THAT ACT READS 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 *** ."
YOUR CLAIM COULD NOT BE CONSIDERED BY THIS OFFICE DUE TO THE FACT
THAT OUR RECORDS SHOW THAT SUCH CLAIM WAS FIRST RECEIVED HERE ON MARCH
13, 1967, MORE THAN 17 YEARS AFTER YOU WERE DISCHARGED IN 1949. YOU NOW
STATE THAT YOU SUBMITTED YOUR CLAIM TO THE "DIRECTOR OF FINANCE CENTER
IN INDIANAPOLIS, INDIANA," ON FEBRUARY 28, 1958, WHICH YOU PRESUMED WAS
A BRANCH OF THIS OFFICE.
CONTRARY TO YOUR PRESUMPTION THE FINANCE CENTER IS PART OF THE UNITED
STATES ARMY AND IS NOT A BRANCH OF THIS OFFICE. SINCE THE 1940 BARRING
ACT REQUIRES THAT THE CLAIM BE RECEIVED IN OUR OFFICE WITHIN THE 10-YEAR
LIMITATION PERIOD FOR IT TO RECEIVE CONSIDERATION AND YOURS WAS NOT SO
RECEIVED, WE ARE WITHOUT AUTHORITY TO CONSIDER YOUR CLAIM.
B-171403, FEB 24, 1971
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
LIEUTENANT COLONEL D. R. BYE, USAF:
THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 24, 1970, REFERENCE ACF,
REQUESTING A DECISION AS TO THE ALLOWABILITY OF A VOUCHER FOR $215.35
REPRESENTING TRAVEL EXPENSES AND ALLOWANCES CLAIMED BY MR. JOSEPH L.
BROOKS, AN EMPLOYEE OF YOUR AGENCY, INCIDENT TO HIS RETURN TO TINKER AIR
FORCE BASE, HIS OFFICIAL DUTY STATION, FROM WHEELUS AIR BASE, LIBYA.
THE RECORD INDICATES THAT BY ORDERS DATED JANUARY 13, 1970, MR.
BROOKS AND FOUR OTHER EMPLOYEES WERE ASSIGNED TO TEMPORARY DUTY AT
WHEELUS AIR BASE, LIBYA. THE ASSIGNMENT WAS TO COVER A PERIOD OF 179
DAYS AND COMMENCED ON JANUARY 15, 1970. ROUND-TRIP TRANSPORTATION WAS
FURNISHED AT GOVERNMENT EXPENSE. ON MARCH 2, 1970, AFTER COMPLETING
ONLY 46 DAYS OF THE TEMPORARY DUTY ASSIGNMENT, MR. BROOKS AND ONE OTHER
EMPLOYEE WERE ORDERED BY THE COMMANDER, WHEELUS AIR BASE, TO TERMINATE
THEIR TEMPORARY DUTY AND RETURN TO THEIR OFFICIAL DUTY STATION. THIS
ACTION WAS TAKEN AS A RESULT OF ALLEGED MISCONDUCT INVOLVING BLACK
MARKET ACTIVITIES. THERE IS NO RECORD OF ANY OTHER ALLEGED MISCONDUCT.
THE EMPLOYEE'S PER DIEM WAS TERMINATED AS OF 1800 HOURS, MARCH 2, 1970,
AND HE WAS REQUIRED TO REFUND TO THE GOVERNMENT THE COST OF HIS RETURN
TRANSPORTATION.
MR. BROOKS SEEKS REIMBURSEMENT OF RETURN TRAVEL EXPENSES INCLUDING
PER DIEM FOR ACTUAL TRAVEL TIME EN ROUTE TO HIS PERMANENT DUTY STATION.
HIS CLAIM IS BASED ON THE CONTENTION THAT HE DID NOT ABANDON HIS
TEMPORARY DUTY ASSIGNMENT OR DELIBERATELY FAIL TO ACCOMPLISH SUCH
ASSIGNMENT, BUT WAS ORDERED TO CURTAIL SUCH ASSIGNMENT BY COMPETENT
AUTHORITY.
PARAGRAPH C3014, JOINT TRAVEL REGULATIONS, VOLUME 2, PROVIDES AS
FOLLOWS:
"C3014 TEMPORARY DUTY ASSIGNMENT ABANDONED OR NOT COMPLETED
EXCEPT AS PROVIDED IN PAR. C3013, IF AN EMPLOYEE ABANDONS HIS TRAVEL
PRIOR TO REPORTING TO A PLACE OF TEMPORARY DUTY ASSIGNMENT OR PRIOR TO
COMPLETION OF DUTIES IN CONNECTION WITH A TEMPORARY DUTY ASSIGNMENT FOR
PERSONAL REASONS WHICH ARE ACCEPTABLE TO THE DEPARTMENT OR AGENCY
CONCERNED, SUCH AS ILLNESS IN HIS FAMILY OR SIMILAR CIRCUMSTANCES, ONLY
THE EXPENSE OF TRAVEL TO THE POINT OF ABANDONMENT IS ALLOWABLE. THE
COST RELATING TO RETURN OF THE EMPLOYEE TO HIS PERMANENT DUTY STATION
WILL NOT BE AT GOVERNMENT EXPENSE UNLESS IT IS DETERMINED
ADMINISTRATIVELY THAT THE EMPLOYEE SUBSTANTIALLY COMPLETED THE MISSION
REQUIREMENTS OF THE TEMPORARY DUTY ASSIGNMENT OR THAT SUCH COMPLETION
WAS AT NO ADDITIONAL COST TO THE GOVERNMENT (SEE PAR. C11001)."
PARAGRAPH C11001, CITED ABOVE, PROVIDES AS FOLLOWS:
"C11001 DELIBERATE FAILURE TO ACCOMPLISH PURPOSE OF TRAVEL
AN EMPLOYEE WHO DOES NOT REPORT TO THE DESIGNATED TEMPORARY OR
PERMANENT DUTY STATION OR, WHO, UPON ARRIVAL THERE, REFUSES TO PERFORM
HIS MISSION OR RESIGNS, WILL BE REQUIRED TO REIMBURSE THE GOVERNMENT FOR
THE REASONABLE VALUE OF TRAVEL EXPENSES, INCLUDING PER DIEM IF PAID.
THIS REQUIREMENT WILL NOT BE INVOKED WHEN AN EMPLOYEE IS PRECLUDED FROM
PERFORMING TEMPORARY DUTY BECAUSE OF ILLNESS NOT INDUCED BY HIS OWN
MISCONDUCT (SEE PAR. C10101-1)."
THE RECORD CONTAINS A STATEMENT BY THE TRAVEL ORDER APPROVING
OFFICIAL (COLONEL DALE J. PERKINS, USAF, DIRECTOR OF DISTRIBUTION) THAT
PRIOR TO THEIR DEPARTURE MR. BROOKS AND THE OTHER EMPLOYEES WERE GIVEN
A GENERAL BRIEFING WHICH SPECIFICALLY COVERED BLACK MARKET OPERATIONS,
THAT MR. BROOKS AND ONE OTHER EMPLOYEE WERE CONSIDERED TO BE PERSONA NON
GRATA BY THE COMMANDER, WHEELUS AIR BASE, AS A RESULT OF ALLEGED BLACK
MARKET ACTIVITY, AND SENT HOME. THE STATEMENT ALSO INDICATES THAT NO
EMPLOYEES REPLACED THE TWO SENT HOME AND THE REMAINING THREE EMPLOYEES
COMPLETED THE ASSIGNMENT AFTER 135 DAYS IN LIBYA.
MR. BROOKS STATES THAT HE WAS NOT ADVISED AT THE BRIEFING THAT THE
ALLEGED ACTIVITY FOR WHICH HE WAS SENT HOME WAS IMPROPER (TRADING
ARTICLES FOR SERVICES) AND HE HAD REQUESTED TO STAY IN LIBYA TO PROVE
HIS INNOCENCE. HE ALSO STATES THAT HE WAS INFORMED THAT THE LIBYAN WITH
WHOM HE DEALT CONTINUED HIS EMPLOYMENT AT WHEELUS AIR BASE.
THE RECORD INDICATES THAT MR. BROOKS DID NOT VOLUNTARILY RETURN TO
HIS OFFICIAL STATION PRIOR TO THE COMPLETION OF HIS DUTIES AND NO
ADDITIONAL EXPENSES WERE INCURRED BY THE GOVERNMENT TO ACCOMPLISH THE
ASSIGNMENT. THERE IS NO SHOWING, HOWEVER, OF AN ADMINISTRATIVE
DETERMINATION BY AN APPROPRIATE OFFICIAL AS TO WHETHER MR. BROOKS FAILED
TO COMPLETE HIS MISSION BECAUSE OF HIS OWN MISCONDUCT, NAMELY, ENGAGING
IN BLACK MARKET OPERATIONS. ACCORDINGLY, THE MATTER SHOULD BE REFERRED
TO THE OFFICIAL WHO ORDERED MR. BROOKS TO PERFORM THE TEMPORARY DUTY, OR
AN INDIVIDUAL HAVING KNOWLEDGE OF THE FACTS AND AUTHORIZED TO ACT FOR
HIM, FOR A POSITIVE DETERMINATION ON THIS POINT. SHOULD AN AFFIRMATIVE
DETERMINATION OF MISCONDUCT BE MADE THE VOUCHER MAY NOT BE PAID.
HOWEVER, IF A DETERMINATION BE MADE TO THE CONTRARY THE VOUCHER MAY BE
PAID.
THE VOUCHER RETURNED HEREWITH SHOULD BE PROCESSED IN ACCORDANCE WITH
THE ABOVE.
B-171448, FEB 24, 1971
BID PROTEST - MISTAKEN AWARD - TERMINATION OF CONTRACT
DENIAL OF PROTEST OF TROMPETER ELECTRONICS, INC., AGAINST THE AWARD
OF AN ADVERTISED CONTRACT ISSUED BY THE NAVAL REGIONAL PROCUREMENT
OFFICE, LOS ANGELES, CALIF., FOR A NUMBER OF MINIATURE AND STANDARD
PATCH PANELS TO WHISLER ELECTRONICS, INC.
WHEN A MISTAKE IN THE ANALYSIS OF THE PROTESTANT'S BID WAS NOT
DISCOVERED UNTIL THE CONTRACT WAS OVER 85% COMPLETED, THE AWARD DOES NOT
HAVE TO BE CANCELLED AND THE PROCUREMENT READVERTISED. CONSIDERATION OF
THE EXTENT OF THE CONTRACTOR'S PERFORMANCE IN DECIDING WHETHER THE
CONTRACTOR SHOULD BE PRECLUDED FROM FURTHER PERFORMANCE, HAS BEEN
CONSISTENTLY TAKEN INTO ACCOUNT WHEN AWARDS HAVE BEEN MADE CONTRARY TO
THE ADVERTISING STATUTES.
TO TROMPETER ELECTRONICS, INC.:
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 3, 1970,
PROTESTING THE AWARD OF A CONTRACT TO WHISTLER ELECTRONICS, INC., UNDER
INVITATION FOR BIDS (IFB) NO. N00123-71-B-0299, ISSUED BY THE NAVAL
REGIONAL PROCUREMENT OFFICE, LOS ANGELES, CALIFORNIA. RECEIPT IS ALSO
ACKNOWLEDGED OF YOUR LETTERS OF DECEMBER 3, 1970, AND JANUARY 13, 1971.
BY THE CITED INVITATION, BIDS WERE REQUESTED FOR FURNISHING A NUMBER
OF MINIATURE AND STANDARD PATCH PANELS, ITEMS 1, 2, AND 3. ITEM 4
CALLED FOR FURNISHING 10 MARKING STRIPS FOR PATCH PANELS. BIDS WERE
RECEIVED FROM YOUR FIRM AND WHISTLER ELECTRONICS.
IT IS REPORTED THAT DURING AN ANALYSIS OF THE TWO BIDS RECEIVED, AN
ERROR WAS MADE BY PERSONNEL OF THE CONTRACTING OFFICE IN THAT ITEM 4 OF
YOUR BID, WHICH HAD A TOTAL EXTENSION OF $24.10, WAS ENTERED AS $2,410.
THE ERROR WAS NOT DISCOVERED AND AWARD WAS CONSEQUENTLY MADE,
ERRONEOUSLY, TO WHISTLER ELECTRONICS ON NOVEMBER 3, 1970, ALTHOUGH ITS
TOTAL BID WAS $496.66 HIGHER THAN THAT OF YOUR FIRM. THE CONTRACT
AWARDED TO WHISTLER REQUIRED DELIVERY OF THE SUPPLIES WITHIN 30 DAYS
AFTER EFFECTIVE DATE OF THE CONTRACT OR BY DECEMBER 2, 1970.
THE RECORD INDICATES THAT ON NOVEMBER 18, 1970, A REPRESENTATIVE OF
YOUR FIRM CONTACTED THE CONTRACTING OFFICE TO INQUIRE ABOUT THE CONTRACT
AWARD AND THAT IT WAS AT THIS TIME THAT THE CONTRACTING OFFICE FIRST
DISCOVERED THAT IT HAD ERRONEOUSLY AWARDED THE CONTRACT TO WHISTLER. IN
VIEW OF THE ERROR, THE CONTRACTING OFFICE ADVISED WHISTLER THAT PENDING
A DETERMINATION OF THE VALIDITY OF THE CONTRACT AWARDED TO IT, ALL WORK
UNDER THE CONTRACT SHOULD BE SUSPENDED.
IN HIS REPORT THE CONTRACTING OFFICER STATES THAT IN VIEW OF OUR
DECISION B-147411 OF NOVEMBER 24, 1961, HIS OFFICE SOUGHT, THROUGH THE
OFFICE OF COUNSEL, NAVAL SUPPLY SYSTEMS COMMAND, INSTRUCTION FROM THE
COMPTROLLER GENERAL OF THE UNITED STATES CONCERNING WHAT ACTION SHOULD
BE TAKEN IN THE INSTANT CASE; THAT HE ALSO REQUESTED THE DEFENSE
CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), VAN NUYS, CALIFORNIA,
TO PERFORM A SPOT CHECK OF THE COMPLETION OF THE WORK UNDER THE CONTRACT
SINCE WHISTLER HAD REPRESENTED THAT THE WORK WAS VIRTUALLY COMPLETED,
AND DELIVERY WAS DUE BEFORE DECEMBER 3, 1970; THAT DCASD INSPECTION OF
THE WORK TO DATE SHOWED THE CONTRACT TO BE 86.15 PERCENT COMPLETED; AND
THAT THE FOREGOING INFORMATION WAS GIVEN TO COUNSEL FOR THE NAVAL SUPPLY
SYSTEMS COMMAND. THE CONTRACTING OFFICER ALSO STATES THAT ON DECEMBER
1, 1970, HIS OFFICE WAS ADVISED BY THE COUNSEL FOR THE NAVAL SUPPLY
SYSTEMS COMMAND THAT THE GENERAL ACCOUNTING OFFICE HAD INDICATED THAT
CONSIDERING THE IMMINENCE OF DELIVERY IT WOULD NOT QUESTION THE AWARD IN
THE EVENT OF A PROTEST. ON THE BASIS OF THE ADVICE RECEIVED FROM OUR
OFFICE, THE CONTRACTING OFFICE INSTRUCTED WHISTLER TO COMPLETE
PRODUCTION OF THE PATCH PANELS. IT IS REPORTED THAT THE PATCH PANELS
HAVE BEEN DELIVERED BY WHISTLER AND ACCEPTED BY THE USING ACTIVITY.
UNDER 10 U.S.C. 2305(C), THE ADVERTISING STATUTE APPLICABLE TO THE
PROCUREMENT IN QUESTION, AWARD IS REQUIRED TO BE MADE TO THE RESPONSIBLE
BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST
ADVANTAGEOUS TO THE UNITED STATES, "PRICE AND OTHER FACTORS CONSIDERED."
PARAGRAPH 2-407.1 OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH
YOU STATE WAS NOT FOLLOWED BY THE PROCUREMENT ACTIVITY IN MAKING AN
AWARD UNDER IFB -0299, IS TO THE SAME EFFECT. WE HAVE HELD THE QUOTED
PHRASE REQUIRES THAT, WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE,
AWARD, IF ANY, BE MADE TO THE LOW BIDDER. 28 COMP. GEN. 662, 664
(1949).
HOWEVER, WHEN AWARDS MADE CONTRARY TO THE ADVERTISING STATUTES HAVE
BEEN RULED UPON BY US, WE CONSISTENTLY HAVE TAKEN INTO CONSIDERATION THE
EXTENT OF THE CONTRACTOR'S PERFORMANCE IN DECIDING WHETHER THE
CONTRACTOR SHOULD BE PRECLUDED FROM FURTHER PERFORMANCE. AT THE TIME
COUNSEL FOR THE NAVAL SUPPLY SYSTEMS COMMAND HAD REQUESTED OUR ADVICE AS
TO WHETHER THE CONTRACT AWARDED TO WHISTLER SHOULD BE CANCELED, THAT
CORPORATION HAD COMPLETED 86.15 PERCENT OF THE CONTRACT WORK. HAD NO
PERFORMANCE COMMENCED UNDER THE CONTRACT, WE WOULD HAVE RECOMMENDED
TERMINATION, BUT IN VIEW OF THE ADVANCED STAGE OF PERFORMANCE OF THE
CONTRACT BY WHISTLER, WE FELT THAT IT WOULD BE IN THE BEST INTERESTS OF
THE GOVERNMENT TO PERMIT THE CORPORATION TO CONTINUE PERFORMANCE OF THE
CONTRACT.
WE SEE NO REASON AT THIS TIME TO DEPART FROM THAT VIEW.
IT IS UNFORTUNATE THAT YOU DID NOT RECEIVE THE CONTRACT AWARD BUT
UNDER THE CIRCUMSTANCES WE ARE UNABLE TO COMPLY WITH YOUR REQUEST FOR
CANCELLATION OF THE AWARD AND FOR AN AWARD TO YOUR FIRM.
B-171715, FEB 24, 1971
CIVILIAN EMPLOYEE - TRANSFERS - TEMPORARY QUARTERS
AUTHORIZING PAYMENT OF CLAIM OF FRANCIS E. FEDERSPIEL, FOR TEMPORARY
LODGING AND SUBSISTENCE FOR HIM AND HIS WIFE AND FOR HIS WIFE ONLY
INCURRED INCIDENT TO CHANGE OF STATION FROM BARLESVILLE, OKLAHOMA, TO
SPOKANE, WASHINGTON.
WHERE OFFICIAL TRAVEL PERFORMED IN CONNECTION WITH TEMPORARY DUTY
OCCURS AFTER THE EMPLOYEE BEGINS TO OCCUPY TEMPORARY QUARTERS, TIME
SPENT IN SUCH TRAVEL WHILE NEITHER THE EMPLOYEE NOR A MEMBER OF HIS
FAMILY IS CLAIMING OR OCCUPYING TEMPORARY QUARTERS SHOULD NOT BE COUNTED
IN DETERMINING WHEN THE MAXIMUM PERIOD FOR REIMBURSEMENT UNDER SECTION
2.5 OF CIRCULAR NO. A-56 EXPIRES. THEREFORE, REIMBURSEMENT FOR
TEMPORARY QUARTERS FOR THE NONCONSECUTIVE PERIODS OF JULY 5 - 12, AND
SEPTEMBER 11 - 20, FOR SELF AND SPOUSE AND SEPTEMBER 21 - 30, FOR SPOUSE
ONLY IS ALLOWED.
TO MR. ROYAL D. HUGHEY:
REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 12, 1971, WITH
ENCLOSURES, IN WHICH YOU REQUEST AN ADVANCE DECISION AS TO WHETHER
TEMPORARY LODGING AND SUBSISTENCE IN THE AMOUNT OF $425.45, CONSTITUTING
A PORTION OF A VOUCHER IN THE AMOUNT OF $1,454.61, MAY BE PAID TO MR.
FRANCIS E. FEDERSPIEL.
IT APPEARS THAT MR. FEDERSPIEL WAS ISSUED TRAVEL AUTHORIZATION NO.
T9800080 DATED JUNE 16, 1970, WHICH AUTHORIZED THE SHIPMENT AND
TEMPORARY STORAGE OF HOUSEHOLD GOODS AND FOR TEMPORARY QUARTERS NOT TO
EXCEED 30 DAYS IN CONNECTION WITH A CHANGE OF STATION FROM BARTLESVILLE,
OKLAHOMA, TO SPOKANE, WASHINGTON. YOUR LETTER STATES THAT HE HAS BEEN
REIMBURSED FOR MILEAGE AND PER DIEM TO COVER THIS TRANSFER FOR THE
PERIOD JUNE 29 TO JULY 4, 1970.
MR. FEDERSPIEL IS CLAIMING REIMBURSEMENT FOR TEMPORARY QUARTERS FOR
THE PERIODS JULY 5-12, 1970, AND SEPTEMBER 11-20, 1970, FOR SELF AND
SPOUSE AND SEPTEMBER 21-30, 1970, FOR SPOUSE ONLY.
YOU STATE THAT MR. FEDERSPIEL WAS AWAY FROM HIS OFFICIAL STATION ON
PROPERLY AUTHORIZED TEMPORARY DUTY ASSIGNMENTS DURING THE PERIODS JULY
13 TO SEPTEMBER 11 AND SEPTEMBER 21 TO OCTOBER 13, 1970.
YOU STATE PARAGRAPH 2.5B(1) OF OFFICE OF MANAGEMENT AND BUDGET
CIRCULAR NO. A-56 PROVIDES THAT 30 CONSECUTIVE DAYS SUBSISTENCE EXPENSE
OF THE EMPLOYEE MAY BE INTERRUPTED BECAUSE OF AN INTERVENING TEMPORARY
DUTY ASSIGNMENT. YOU ASK FOR AN ADVANCE DECISION AS TO THE PROPRIETY OF
PAYMENT OF THIS CLAIM FOR TEMPORARY QUARTERS AS PRESENTED DUE TO THE
FACT THAT DOUBTS EXIST AS TO WHETHER THE INTERRUPTION OF 30 CONSECUTIVE
DAYS TEMPORARY QUARTERS PROVIDED FOR IN PARAGRAPH 2.5B(1) APPLIES TO THE
SPOUSE AS WELL AS THE EMPLOYEE.
SECTION 2.5B(1) OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56
PROVIDES AS FOLLOWS:
"(1) SUBSISTENCE EXPENSES OF THE EMPLOYEE, FOR WHOM A PERMANENT
CHANGE OF STATION IS AUTHORIZED OR APPROVED, AND EACH MEMBER OF HIS
IMMEDIATE FAMILY (DEFINED IN 1.2D), FOR A PERIOD OF NOT MORE THAN 30
CONSECUTIVE DAYS WHILE NECESSARILY OCCUPYING TEMPORARY QUARTERS WILL BE
ALLOWED WHEN THE NEW OFFICIAL STATION IS LOCATED IN THE 50 STATES, THE
DISTRICT OF COLUMBIA, UNITED STATES TERRITORIES AND POSSESSIONS, THE
COMMONWEALTH OF PUERTO RICO AND THE CANAL ZONE, PROVIDED A WRITTEN
AGREEMENT AS REQUIRED IN 1.3C IS SIGNED IN CONNECTION WITH SUCH
TRANSFER. THE PERIOD OF CONSECUTIVE DAYS MAY BE INTERRUPTED TO TAKE
ACCOUNT OF THE TIME THAT IS ALLOWED FOR TRAVEL BETWEEN THE OLD AND NEW
OFFICIAL STATIONS OR WHICH IS DUE TO CIRCUMSTANCES ATTRIBUTABLE TO
OFFICIAL NECESSITY, AS FOR EXAMPLE, AN INTERVENING TEMPORARY DUTY
ASSIGNMENT."
SECTION 2.5B(6) PROVIDES AS FOLLOWS:
"(6) IN COMPUTING THE LENGTH OF TIME ALLOWED FOR TEMPORARY QUARTERS
AT GOVERNMENT EXPENSE UNDER THE 30 OR 60-DAY LIMITATIONS SPECIFIED
HEREIN, SUCH TIME WILL BEGIN TO RUN FOR THE EMPLOYEE AND ALL MEMBERS OF
HIS IMMEDIATE FAMILY WHEN EITHER THE EMPLOYEE OR ANY MEMBER OF THE
IMMEDIATE FAMILY BEGINS THE PERIOD OF USE OF SUCH QUARTERS FOR WHICH A
CLAIM FOR REIMBURSEMENT IS MADE AND THE TIME SHALL RUN CONCURRENTLY. THE
EMPLOYEE MAY OCCUPY TEMPORARY QUARTERS AT ONE LOCATION WHILE MEMBERS OF
THE IMMEDIATE FAMILY OCCUPY QUARTERS AT ANOTHER LOCATION. THE PERIOD OF
ELIGIBILITY WILL TERMINATE WHEN THE EMPLOYEE OR ANY MEMBER OF HIS
IMMEDIATE FAMILY OCCUPIES PERMANENT TYPE RESIDENCE QUARTERS, OR THE
ALLOWABLE TIME LIMIT EXPIRES, WHICHEVER OCCURS FIRST."
THESE PROVISIONS WERE FORMERLY CONTAINED IN SECTION 2.5B(5) OF
CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966. AS INDICATED IN 47 COMP.
GEN. 322 (1967), WE DID NOT CONSIDER THAT THE PROVISIONS OF THIS SECTION
PRECLUDED THE INTERRUPTION OF THE 30-DAY PERIOD WHEN THE EMPLOYEE AND
HIS FAMILY WERE NOT OCCUPYING TEMPORARY QUARTERS AT THE OLD OR NEW
STATION BY REASON OF THE PERFORMANCE OF OFFICIAL TRAVEL. THEREFORE,
WHEN OFFICIAL TRAVEL INVOLVED RESULTS FROM TEMPORARY DUTY AFTER THE
EMPLOYEE BEGINS TO OCCUPY TEMPORARY QUARTERS, TIME SPENT IN SUCH TRAVEL
WHILE NEITHER THE EMPLOYEE NOR A MEMBER OF HIS FAMILY IS CLAIMING OR
OCCUPYING TEMPORARY QUARTERS SHOULD NOT BE COUNTED IN DETERMINING WHEN
THE MAXIMUM PERIOD FOR REIMBURSEMENT UNDER SECTION 2.5 OF CIRCULAR NO.
A-56 EXPIRES.
HENCE, THE TEMPORARY QUARTERS EXPENSES FOR THE PERIODS JULY 5-12,
1970, AND SEPTEMBER 11-20, 1970, FOR MR. FEDERSPIEL AND HIS WIFE AND THE
PERIOD SEPTEMBER 21-30, 1970, FOR HIS WIFE ONLY MAY BE CERTIFIED FOR
PAYMENT IF OTHERWISE CORRECT.
THE VOUCHER WITH RELATED PAPERS IS RETURNED HEREWITH.
B-171832, FEB 24, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
DISCHARGE FROM THE PHILIPPINE SCOUTS ON BASIS THAT CLAIM NOT ASSERTED
WITHIN 10-YEARS FROM THE DATE IT ACCRUED IS BARRED BY THE ACT OF OCTOBER
9, 1940, 31 U.S.C. 71A.
TO MR. EMANUEL R. AYCARDO:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 13, 1970,
ADDRESSED TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS,
INDIANA, WHICH WAS FORWARDED TO OUR OFFICE FOR REPLY, CONCERNING YOUR
CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF $3,600 BELIEVED DUE
INCIDENT TO YOUR DISCHARGE FROM THE PHILIPPINE SCOUTS IN MARCH 1949.
OUR FILE SHOWS THAT THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR
CLAIMS DIVISION DATED NOVEMBER 26, 1962, AND JANUARY 8, 1963, IN WHICH
YOU WERE ADVISED THAT CONSIDERATION OF YOUR CLAIM FOR SUCH PAY WAS
BARRED BY 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 SUPPORT OF YOUR CLAIM FOR MUSTERING-OUT PAY YOU CONTEND THAT SUCH
PAY IS AUTHORIZED BY ACT NO. 263, 88TH U.S. CONGRESS, DATED 9 JANUARY
1963, AND "DULY APPROVED 30 SEPTEMBER 1965M." YOU ALSO REFER TO THE
PROVISIONS OF "PARAGRAPH 311-322 OF TM 502."
WE ARE UNABLE TO IDENTIFY THE LAW TO WHICH YOU REFER. NEITHER PUBLIC
LAW 88-263 (WHICH WAS APPROVED JANUARY 31, 1964), NOR ANY LAW ENACTED ON
SEPTEMBER 30, 1965, IN ANY WAY RELATES TO MUSTERING-OUT PAY. NO LAW WAS
ENACTED OR APPROVED ON JANUARY 9, 1963.
THE PROVISIONS OF LAW GOVERNING MUSTERING-OUT PAY AT THE TIME YOU
WERE DISCHARGED FROM THE PHILIPPINE SCOUTS WERE CONTAINED IN THE
MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS AMENDED, 38
U.S.C. 691, ET SEQ. (1946 ED.). APPLICABLE REGULATIONS ISSUED BY THE
DEPARTMENT OF THE ARMY UNDER AUTHORITY OF THAT ACT ARE CONTAINED IN
PARAGRAPHS 313-322, T.M. 14-502. CLAIMS FOR MUSTERING-OUT PAY UNDER
THOSE PROVISIONS ARE SUBJECT TO 10-YEAR LIMITATION IMPOSED BY THE ACT OF
OCTOBER 9, 1940, WHICH PRECLUDES US FROM TAKING ANY ACTION ON YOUR
CLAIM.
SECTION 2(A)(1) OF THE 1944 ACT PROVIDED FOR THE MAXIMUM PAYMENT OF
$300 TO PERSONS WHO SERVED 60 DAYS OR MORE AND SERVED OUTSIDE THE
CONTINENTAL LIMITS OF THE UNITED STATES OR IN ALASKA. IN CONNECTION
WITH THIS ACT, TITLE II OF THE ACT OF MAY 27, 1946, CH. 271, 60 STAT.
223, PROVIDED THAT THE MUSTERING-OUT PAYMENT ACT OF 1944 SHOULD BE
DEEMED APPLICABLE TO PERSONS WHO PERFORMED SERVICES IN THE PHILIPPINE
SCOUTS UNDER SECTION 14 OF THE ACT OF OCTOBER 6, 1945, CH. 393, 59 STAT.
543, BUT PAYMENT WAS TO BE MADE AT THE RATE OF ONE PHILIPPINE PESO FOR
EACH DOLLAR AUTHORIZED BY THE 1944 ACT. IN OTHER WORDS, UNDER THE
PROVISIONS OF THOSE LAWS, THE MAXIMUM AMOUNT THAT COULD BE PAID AS
MUSTERING-OUT PAY TO A PHILIPPINE SCOUT UPON DISCHARGE, EVEN THOUGH HE
MAY HAVE SERVED MORE THAN 60 DAYS, INCLUDING SERVICE OUTSIDE THE
PHILIPPINES ON OR AFTER OCTOBER 6, 1945, WAS 300 PESOS.
IT APPEARS THAT THE RATE OF EXCHANGE ON THE CONVERSION FROM DOLLARS
TO PESOS AT THE TIME OF YOUR DISCHARGE WAS TWO PESOS FOR EACH DOLLAR.
SINCE YOU WERE ENTITLED TO 300 PESOS, YOU WERE TO RECEIVE THAT AMOUNT,
OR ITS EQUIVALENT IN DOLLARS ($150). IN YOUR LETTER TO THE U.S. ARMY
FINANCE CENTER, DATED OCTOBER 16, 1962, YOU SAY YOU RECEIVED $150 AT THE
TIME OF YOUR DISCHARGE AS MUSTERING-OUT PAY.
ACCORDINGLY, ASIDE FROM THE APPLICABILITY OF THE BARRING ACT TO YOUR
SITUATION, SINCE YOU INDICATE HAVING RECEIVED THE MAXIMUM AMOUNT OF
MUSTERING-OUT PAY PERMITTED BY LAW UPON YOUR DISCHARGE FROM THE
PHILIPPINE SCOUTS IN 1949, THERE WOULD BE NO AUTHORITY FOR THE PAYMENT
OF YOUR CLAIM IN ANY EVENT.
B-171906, FEB 24, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
DISCHARGE FROM THE PHILIPPINE SCOUTS ON BASIS THAT CLAIM NOT ASSERTED
WITHIN 10-YEARS FROM DATE IT ACCRUED IS BARRED BY THE ACT OF OCTOBER 9,
1940, 31, U.S.C. 71A.
TO MR. POTENCIANO B. IZON:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 15, 1969, ADDRESSED
TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS, INDIANA,
CONCERNING YOUR CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
DISCHARGE FROM MILITARY SERVICE IN 1947. YOUR LETTER WAS FORWARDED TO
OUR OFFICE FOR REPLY.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
APRIL 22, 1969, AND JULY 8, 1969. IN THOSE LETTERS YOU WERE ADVISED OF
THE PROVISIONS OF THE ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT. 1061, 31
U.S.C. 71A, WHICH BAR CONSIDERATION OF YOUR CLAIM BY THIS OFFICE DUE TO
THE FACT THAT SUCH CLAIM WAS NOT RECEIVED IN OUR OFFICE WITHIN THE
10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOU ARE ENTITLED TO
MUSTERING-OUT PAY "UNDER THE PROVISIONS OF ACT NO. 263 OF THE 88TH
CONGRESS, DATED 9 JANUARY 1963, APPROVED SEPTEMBER 30, 1965," YOU ARE
ADVISED THAT NEITHER PUBLIC LAW 88-263 (WHICH WAS APPROVED JANUARY 31,
1964, AND HAD NOTHING TO DO WITH MUSTERING-OUT PAY), NOR ANY OTHER LAW
OF WHICH WE ARE AWARE, AUTHORIZES THE PAYMENT OF YOUR CLAIM. ANY RIGHT
YOU MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER THE MUSTERING-OUT
PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS AMENDED, 38 U.S.C. 691 ET
SEQ. (1946 ED.) AND IMPLEMENTING REGULATIONS CONTAINED IN T.M. 14-502.
HOWEVER, ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW
AND REGULATIONS ARE SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION
PERIOD FIXED BY THE 1940 ACT.
THE MUSTERING-OUT PAYMENT ACT OF 1944 AUTHORIZED THE PAYMENT OF
MUSTERING-OUT PAY TO MEMBERS OF THE ARMED FORCES WHO ENGAGED IN ACTIVE
SERVICE FOR VARIOUS PERIODS OF TIME DURING WORLD WAR II. SECTION 6(A)
OF THAT ACT DEFINED THE TERM "MEMBER OF THE ARMED FORCES" TO MEAN -
" *** ANY MEMBER OF THE ARMY OR NAVY OF THE UNITED STATES, THE UNITED
STATES MARINE CORPS, THE UNITED STATES COAST GUARD OR ANY OF THEIR
RESPECTIVE COMPONENTS *** ."
WHILE YOU MENTION THE PHILIPPINE SCOUTS, THE AUS AND THE USAFFE,
CORRESPONDENCE RECEIVED FROM YOU INDICATES THAT THE SERVICE YOU
PERFORMED MAY NOT HAVE BEEN AS A MEMBER OF ONE OF THE ORGANIZATIONS
MENTIONED ABOVE, BUT RATHER AS A MEMBER OF THE PHILIPPINE ARMY. SHOULD
THAT BE CORRECT IT WOULD APPEAR THAT NO RIGHT TO MUSTERING-OUT PAY WOULD
HAVE ACCRUED TO YOU UNDER ANY OF THE PROVISIONS OF LAW RELATING THERETO.
WE ARE NOT AWARE OF ANY LAW WHICH ENTITLED MEMBERS OF THE PHILIPPINE
ARMY SERVING WITH THE USAFFE TO RECEIVE MUSTERING-OUT PAY DIRECTLY FROM
THE UNITED STATES GOVERNMENT.
FUNDS FOR PAYMENT OF ITEMS OF PAY AND ALLOWANCES AUTHORIZED FOR
MEMBERS OF THE ORGANIZED FORCES OF THE COMMONWEALTH OF THE PHILIPPINES
SERVING IN WORLD WAR II WERE APPROPRIATED BY THE UNITED STATES
GOVERNMENT, AND TRANSFERRED TO THE PHILIPPINE GOVERNMENT FOR PAYMENT.
IN THIS CONNECTION AN AGREEMENT BY THE UNITED STATES AND THE REPUBLIC OF
THE PHILIPPINES ENTITLED "SETTLEMENT OF VETERANS CLAIMS" BECAME
EFFECTIVE ON JUNE 29, 1967. THAT AGREEMENT PROVIDED FOR THE PAYMENT OF
FUNDS BY THE UNITED STATES TO THE GOVERNMENT OF THE REPUBLIC OF THE
PHILIPPINES IN FULL SETTLEMENT OF VARIOUS CLAIMS FOR BACK PAY AND
ALLOWANCES ARISING FROM MILITARY SERVICE BY MEMBERS OF THE PHILIPPINE
ARMED FORCES AND RECOGNIZED PHILIPPINE GUERRILLAS DURING WORLD WAR II
WHO HAD NOT BEEN PREVIOUSLY PAID AND WHOSE NAMES APPEARED ON THE UNITED
STATES APPROVED REVISED FINAL ROSTER OF MARCH 1948.
IF YOU BELIEVE YOU HAVE A VALID CLAIM FOR PAYMENT OUT OF THE
ABOVE-MENTIONED FUNDS, SUCH CLAIM SHOULD BE SUBMITTED TO THE PHILIPPINE
GOVERNMENT. THERE IS NO ACTION WE LEGALLY MAY TAKE IN THE MATTER.
B-155932, FEB 23, 1971
PER DIEM ALLOWANCE - TEMPORARY V PERMANENT DUTY STATION - DEBT OWED THE
UNITED STATES
DECISION DENYING CLAIM FOR PER DIEM TO CWO ROBERT E. JOHNSON, US
ARMY, RET., INCIDENT TO HIS PERFORMING DUTY AT CAPE CANAVERAL (NOW CAPE
KENNEDY), FLORIDA.
WHEN, IN FACT, CAPE CANAVERAL WAS CLAIMANT'S PERMANENT DUTY STATION
DETERMINED ON THE BASIS OF ALL INFORMATION INCLUDING THE ABSENCE OF
TEMPORARY DUTY ORDERS APPROVED BY THE PROPER AUTHORITY AND THE DURATION
OF THE DUTY AT CAPE CANAVERAL IN EXCESS OF THE 180 DAY LIMITATION FOR
TEMPORARY DUTY, THEN THERE IS NO BASIS FOR PAYMENT OF A CLAIM FOR PER
DIEM FOR THE DUTY INVOLVED.
WITH REGARD TO CLAIMANT'S INDEBTEDNESS TO THE U.S. ARISING FROM A
CLAIM PAID BY THE VETERANS ADMINISTRATION IN THE SUM OF $1,687.49
BECAUSE OF DEFAULT ON A GUARANTEED LOAN, IT SHOULD BE NOTED THAT ALL OF
THE TRANSFEREE INCLUDING CLAIMANT, ALONG WITH THE ORIGINAL OBLIGORS, ARE
JOINTLY AND SEVERALLY LIABLE FOR THE BALANCE DUE ON THE NOTE AND UNDER
THE PROVISIONS OF THE FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C.
952 (SUPP. V) THE AGENCY IS DIRECTED TO LIQUIDATE THE INDEBTEDNESS AS
QUICKLY AS POSSIBLE, NOT WITHHOLDING ACTION AGAINST ONE DEBTOR MERELY
BECAUSE OTHER DEBTORS HAVE NOT PAID THEIR PROPORTIONATE SHARE.
TO MR. ROBERT E. JOHNSON:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 14, 1970, AGAIN
REQUESTING REVIEW OF YOUR CLAIM FOR PER DIEM FOR THE PERIOD DECEMBER 18,
1962, TO JANUARY 15, 1964, WHILE PERFORMING DUTY AT CAPE CANAVERAL (NOW
CAPE KENNEDY), FLORIDA.
YOUR CLAIM WAS THE SUBJECT OF DECISIONS B-155932, DATED MARCH 17,
1965, MAY 11, 1965, AND OCTOBER 13, 1970. IN THOSE DECISIONS WE ADVISED
YOU THAT SINCE THE TEMPORARY DUTY DIRECTED BY THE VARIOUS ORDERS IN YOUR
CASE EXCEEDED 6 MONTHS AND THE ORDERS WERE NOT APPROVED BY PROPER
AUTHORITY, THERE IS NO BASIS FOR THE ALLOWANCE OF YOUR CLAIM FOR PER
DIEM FOR DUTY PERFORMED AT CAPE CANAVERAL.
WE CONCLUDED THAT IN THE CIRCUMSTANCES OF YOUR CASE CAPE CANAVERAL
WAS IN FACT YOUR PERMANENT STATION AND THAT YOU WERE ENTITLED TO PER
DIEM ONLY FOR PERIODS YOU WERE AWAY FROM CAPE CANAVERAL IN A TRAVEL
STATUS UNDER COMPETENT ORDERS. SINCE YOU HAD MOVED YOUR DEPENDENTS TO
CAPE CANAVERAL WE FURTHER CONCLUDED THAT YOU WERE ENTITLED TO A
DISLOCATION ALLOWANCE. THEREFORE, ON MAY 14, 1965, OUR CLAIMS DIVISION
ISSUED A SETTLEMENT IN YOUR FAVOR IN THE AMOUNT OF $286.55 CONSISTING OF
$156.50 FOR PER DIEM AND $130.05 AS DISLOCATION ALLOWANCE.
YOU WERE FURTHER ADVISED THAT YOU COULD SUBMIT A CLAIM FOR
REIMBURSEMENT OF EXPENSES INCURRED BY YOU IN HAULING YOUR HOUSEHOLD
EFFECTS FROM FORT EUSTIS, VIRGINIA, TO CAPE CANAVERAL AT PERSONAL
EXPENSE AND THAT SINCE YOU HAD HAULED THE EFFECTS YOURSELF SUCH CLAIM
SHOULD BE SUPPORTED BY EVIDENCE OF THE EXPENDITURES INCURRED AND THE
WEIGHT OF THE SHIPMENT OR AN INVENTORY FROM WHICH THE CUBIC CONTENT MAY
BE ESTIMATED AS REQUIRED BY CONTROLLING REGULATIONS.
IN YOUR PRESENT LETTER YOU SAY THAT YOU WERE SENT TO CAPE CANAVERAL
UNDER TEMPORARY DUTY ORDERS; THAT DURING THE PERIOD YOU WERE AT CAPE
CANAVERAL YOU WANTED TO BE RELIEVED AND RETURNED TO YOUR PARENT
ORGANIZATION (FORT EUSTIS) BUT WERE UNABLE TO OBTAIN ORDERS, AND THAT
AFTER SIX MONTHS THE PORT COMMANDER AT FORT EUSTIS ORDERED YOU TO VACATE
QUARTERS. YOU SAY THIS IS WHEN YOU RETURNED TO FORT EUSTIS, PURCHASED A
TRUCK AND MOVED YOUR FAMILY AND HOUSEHOLD EFFECTS AT PERSONAL EXPENSE
AFTER ATTEMPTING TO OBTAIN PERMANENT CHANGE-OF-STATION ORDERS. YOU SAY
CAPE CANAVERAL COULD NOT HAVE BEEN A PERMANENT STATION SINCE IT WAS IN A
REMOTE AREA AND WITHOUT THE BARE ESSENTIALS FOR WORK OR LIVING.
WITH RESPECT TO YOUR CLAIM FOR MOVING YOUR HOUSEHOLD EFFECTS, YOU SAY
IT WOULD BE IMPOSSIBLE TO OBTAIN GASOLINE AND OIL RECEIPTS TOGETHER WITH
EVIDENCE OF THE WEIGHT OF THE SHIPMENT AND THAT YOU COULD ONLY GIVE AN
APPROXIMATION OF THE EFFECTS SHIPPED BY CUBIC MEASUREMENT AND HAVE LONG
SINCE SOLD THE TRUCK.
WHILE YOU NOW CONTEND THAT CAPE CANAVERAL COULD NOT HAVE BEEN A
PERMANENT STATION BECAUSE OF ITS LOCATION AND LACK OF FACILITIES, THE
RECORD SHOWS THAT ON MAY 6, 1963, YOUR COMMANDING OFFICER REQUESTED THAT
YOU BE GIVEN A PERMANENT CHANGE OF STATION FROM FORT EUSTIS TO CAPE
CANAVERAL AND THAT SUCH REQUEST WAS NOT APPROVED BECAUSE OF YOUR
INTENTION TO RETIRE THE FOLLOWING JANUARY. WHETHER THE ASSIGNMENT TO A
STATION IS PERMANENT OR TEMPORARY IS NOT ESTABLISHED BY THE GEOGRAPHICAL
LOCATION OF THE STATION OR THE FACILITIES THEREAT BUT MUST BE DETERMINED
ON THE BASIS OF ALL OF THE FACTS INVOLVED INCLUDING THE ORDERS ISSUED TO
THE INDIVIDUAL MEMBER AND THE DURATION OF THAT DUTY.
SINCE THE TEMPORARY DUTY DIRECTED BY THE VARIOUS ORDERS IN YOUR CASE
WAS FOR A PERIOD OF ABOUT 14 MONTHS AND THE ORDERS WERE NOT APPROVED BY
PROPER AUTHORITY AS REQUIRED BY THE APPLICABLE REGULATIONS IN SUCH
CASES, WE ARE REQUIRED TO ADHERE TO THE POSITION THAT CAPE CANAVERAL WAS
IN FACT YOUR PERMANENT STATION.
AS EXPLAINED IN OUR DECISION OF MARCH 17, 1965, THE DUTY AT CAPE
CANAVERAL EXCEEDED THE 180 DAY LIMITATION FOR TEMPORARY DUTY, EXCEPT
UNDER UNFORESEEN CIRCUMSTANCES, AND WAS NOT APPROVED BY PROPER AUTHORITY
AS REQUIRED UNDER THE REGULATIONS THERE SET FORTH. AND, AS POINTED OUT
IN THAT DECISION, EFFECTIVE DECEMBER 17, 1962, YOUR ORDERS PROVIDED THAT
THE DUTY AT CAPE CANAVERAL WOULD BE AT NO COST TO THE GOVERNMENT,
INDICATING AN ADMINISTRATIVE DETERMINATION THAT PER DIEM WAS NOT
AUTHORIZED BECAUSE YOUR ASSIGNMENT WAS TO BE FOR A PERIOD OF UNLIMITED
DURATION RATHER THAN OF A TEMPORARY NATURE.
THEREFORE, EVEN THOUGH THE ADMINISTRATIVE OFFICE, BECAUSE OF YOUR
APPROACHING RETIREMENT, REFUSED TO ISSUE PERMANENT CHANGE-OF-STATION
ORDERS TRANSFERRING YOU TO CAPE CANAVERAL OR AN INSTALLATION NEARBY, WE
ARE OF THE OPINION, AS PREVIOUSLY STATED, THAT YOUR BASIC DUTY
ASSIGNMENT WAS AT CAPE CANAVERAL AND IT MUST BE REGARDED AS YOUR
PERMANENT DUTY STATION DURING THE PERIOD INVOLVED. ACCORDINGLY, THERE
IS NO BASIS FOR PAYMENT OF YOUR CLAIM FOR PER DIEM FOR THE DUTY
INVOLVED. ALSO, SINCE YOU HAVE FURNISHED NO INFORMATION AS TO THE
APPROXIMATE WEIGHT OF THE HOUSEHOLD EFFECTS WHICH YOU TRANSPORTED OR THE
EXPENDITURES INCURRED, THERE IS NO BASIS ON WHICH FURTHER CONSIDERATION
MAY BE GIVEN TO THAT CLAIM. IF, HOWEVER, YOU FURNISH A STATEMENT AS TO
THE APPROXIMATE WEIGHT OF THE GOODS MOVED AND THE COST OF GASOLINE AND
OIL USED IN THE MOVEMENT, SUPPORTED BY RECEIPTS, IF AVAILABLE, WE WILL
GIVE FURTHER CONSIDERATION TO SUCH CLAIM.
YOU ALSO REFER TO YOUR INDEBTEDNESS TO THE UNITED STATES ARISING FROM
A CLAIM PAID BY THE VETERANS ADMINISTRATION IN THE SUM OF $1,687.49
BECAUSE OF DEFAULT ON GUARANTEED LOAN NO. LH 109484 FLA., AND CONTEND
THAT THIS IS AN UNJUST CLAIM AGAINST YOU. WITHOUT REPEATING YOUR
VARIOUS CONTENTIONS AND QUESTIONS RELATING TO THE INDEBTEDNESS WE TRUST
THE FOLLOWING WILL BE HELPFUL TO YOU.
THE LOAN FOR THE PURCHASE OF THE PROPERTY HERE INVOLVED WAS OBTAINED
FROM VANGUARD MORTGAGE COMPANY, MIAMI, FLORIDA, BY PETER B. NEFF AND HIS
WIFE, LENA M. NEFF, A QUALIFIED VETERAN. THE VETERANS ADMINISTRATION
GUARANTEED THE LOAN UPON HER APPLICATION PURSUANT TO SECTION 500, TITLE
III OF THE SERVICEMEN'S READJUSTMENT ACT OF 1944, AS AMENDED, 38 U.S.
CODE 1803.
THE PROPERTY WAS SUBSEQUENTLY TRANSFERRED TO YOU AND YOUR WIFE, AND
IN TURN TO ROY J. AND BETTY G. CROWLEY, JAMES TRIZZINO, AND WILLIAM H.
AND PHILLIS L. BUTTS. THESE TRANSFERS WERE SUBJECT TO THE ORIGINAL
MORTGAGE WITH ASSUMPTION OF LIABILITY FOR AND AGREEMENT BY EACH OF THESE
TRANSFEREES TO PAY THE OUTSTANDING BALANCE DUE ON THE NOTE. THEREFORE,
ALL OF THESE TRANSFEREES, ALONG WITH THE ORIGINAL OBLIGORS, WERE JOINTLY
AND SEVERALLY LIABLE FOR THE BALANCE DUE ON THE NOTE. IF THERE WERE
OTHER TRANSFERS THEY WERE ALSO ACCOMPLISHED SUBJECT TO THE ORIGINAL
MORTGAGE BUT WITHOUT ASSUMPTION OF LIABILITY. WE HAVE NO RECORD OF
NON-LIABLE TRANSFEREES.
UPON DEFAULT, FORECLOSURE PROCEEDINGS WERE INSTITUTED BY THE HOLDER
OF THE NOTE, NOT THE VETERANS ADMINISTRATION. THE FORECLOSURE SALE WAS
CONDUCTED UNDER STATE LAW UNDER THE POWERS CONTAINED IN THE MORTGAGE
EXECUTED BY THE ORIGINAL BORROWERS. THAT INSTRUMENT SPECIFICALLY
PRECLUDED THE NECESSITY OF GIVING PERSONAL NOTICE OF THE SALE TO EITHER
THE ORIGINAL BORROWERS OR TO ANY SUBSEQUENT PURCHASERS WHO ASSUMED
LIABILITY UNDER THE LOAN. NEITHER THE MORTGAGEE NOR THE VETERANS
ADMINISTRATION HAD THE LEGAL RESPONSIBILITY TO REMAIN IN CONTACT WITH
THE OBLIGORS TO KEEP THEM INFORMED OF THE STATUS OF THE LOAN AND THEIR
POTENTIAL LIABILITY IN THE EVENT OF FORECLOSURE.
AT THE TIME OF FORECLOSURE, THE TOTAL INDEBTEDNESS, INCLUDING THE
PRINCIPAL BALANCE, ACCRUED INTEREST AND FORECLOSURE COSTS WAS
$19,237.49. THE VALUE OF THE PROPERTY WAS ESTABLISHED AS $17,550 WHICH
AMOUNT WAS CREDITED TO THE LOAN ACCOUNT AND THE VETERANS ADMINISTRATION
PAID THE HOLDER OF THE NOTE THE BALANCE OF $1,687.49. THE NOTE WAS THEN
ENDORSED TO THE ADMINISTRATOR OF VETERANS AFFAIRS WHO THEREBY ACQUIRED
THE RIGHTS OF THE ORIGINAL HOLDER TO THE EXTENT OF THE PAYMENT.
THEREFORE, THE ORIGINAL OBLIGORS ALONG WITH TRANSFEREES WHO ASSUMED THE
OBLIGATION (YOU AND YOUR WIFE AND THE OTHERS NAMED ABOVE) BECAME JOINTLY
AND SEVERALLY LIABLE FOR THE AMOUNT OF THE LOSS SUSTAINED BY THE
GOVERNMENT OR $1,687.49, PLUS ACCRUED INTEREST.
THERE IS NO AUTHORITY FOR APPORTIONMENT OF A JOINT AND SEVERAL
LIABILITY INDEBTEDNESS. AS A GENERAL RULE ACTION FOR RECOVERY MAY BE
TAKEN AGAINST ANY ONE OF THE LIABLE PARTIES SEVERALLY OR AGAINST THEM
ALL JOINTLY. FURTHER, THE REGULATIONS PRESCRIBED UNDER THE FEDERAL
CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. 952 (SUPP. V), PROVIDE THAT
WHEN TWO OR MORE DEBTORS ARE JOINTLY AND SEVERALLY LIABLE, COLLECTION
ACTION WILL NOT BE WITHHELD AGAINST ONE SUCH DEBTOR UNTIL THE OTHER OR
OTHERS PAY THEIR PROPORTIONATE SHARE, NOR SHOULD THE AGENCY ATTEMPT TO
ALLOCATE THE BURDEN OF PAYING SUCH CLAIMS AS BETWEEN THE DEBTORS, BUT
SHOULD PROCEED TO LIQUIDATE THE INDEBTEDNESS AS QUICKLY AS POSSIBLE.
THEREFORE, ALL PAYMENTS RECEIVED ARE APPLIED TOWARD REDUCTION OF THE
OVER-ALL DEBT WITH CREDIT THEREFOR TO EACH INDIVIDUAL OBLIGOR'S ACCOUNT.
WITH RESPECT TO YOUR STATEMENT THAT YOU CANNOT PAY THIS DEBT, YOU ARE
REQUESTED TO EXECUTE THE ENCLOSED FINANCIAL STATEMENT. IF YOU ARE
SELF-EMPLOYED OR OWN A BUSINESS YOU SHOULD FURNISH A STATEMENT OF ASSETS
AND LIABILITIES. SUCH STATEMENT WITH YOUR PROPOSED ARRANGEMENT FOR
PAYMENT OF THE INDEBTEDNESS PLUS INTEREST AT THE RATE OF 4 PERCENT PER
ANNUM FROM MAY 13, 1966, TOGETHER WITH A CHECK OR MONEY ORDER PAYABLE TO
"U.S. GENERAL ACCOUNTING OFFICE" IN FULL OR PARTIAL PAYMENT OF THE DEBT
SHOULD BE FORWARDED TO THE UNITED STATES GENERAL ACCOUNTING OFFICE, P.O.
BOX 2610, WASHINGTON, D. C. 20013, AT THIS TIME.
B-156092, FEB 23, 1971
LONGEVITY STEP INCREASE
DECISION DISALLOWING CLAIM FOR A LONGEVITY STEP INCREASE IN GRADE
GS-9 RETROACTIVE TO SEPTEMBER 1, 1960, TO JIM C. THAXTON INCIDENT TO HIS
SERVICE IN THE IMMIGRATION AND NATURALIZATION SERVICE.
33 COMP. GEN. 362 (1954), WHICH HELD THAT AN EMPLOYEE WHO IS ASSIGNED
TO ANOTHER POSITION IN A HIGHER GRADE IS ENTITLED TO CREDIT FOR SERVICE
IN HIS FORMER LOWER GRADE POSITION WHICH HAD BEEN REALLOCATED WITHOUT A
CHANGE IN DUTIES TO A SIMILAR HIGHER GRADE TOWARD THE AGGREGATE 10 YEARS
OF SERVICE REQUIRED FOR A LONGEVITY STEP INCREASE BY SECTION 703(B) OF
THE CLASSIFICATION ACT, WAS NEVER INTENDED TO REQUIRE RECONSIDERATION OF
LONGEVITY CREDITS BASED ON EVENTS TRANSPIRING SUBSEQUENT TO THE DATE A
LONGEVITY STEP INCREASE WAS GRANTED. THE CLAIM, THEREFORE, MUST BE
DISALLOWED.
LONGEVITY STEP INCREASE - RETROACTIVE EFFECT
SUSTAINING PRIOR DISALLOWANCE OF CLAIM FOR A LONGEVITY INCREASE IN
GRADE GS-9 TO BE EFFECTIVE ON OR ABOUT SEPTEMBER 1, 1960, INCIDENT TO
CLAIMANT'S POSITION AS A PATROL INSPECTOR.
33 COMP. GEN. 362 (1954) IS NOT HERE APPLICABLE BECAUSE IT WAS NOT
INTENDED TO APPLY TO RECLASSIFICATION ACTIONS OCCURING SUBSEQUENT TO THE
TIME AN EMPLOYEE OTHERWISE WAS GRANTED A LONGEVITY INCREASE. THEREFORE,
NO LEGAL BASIS EXISTS FOR THE ALLOWANCE OF THE CLAIM.
TO MR. JIM C. THAXTON:
YOUR LETTER OF DECEMBER 9, 1970, REQUESTS RECONSIDERATION OF OUR
DECISION B-156092, DATED FEBRUARY 26, 1965, WHICH SUSTAINED THE
DISALLOWANCE OF YOUR CLAIM (SETTLEMENT DATED SEPTEMBER 16, 1964) FOR A
LONGEVITY STEP INCREASE IN GRADE GS-9 TO BE EFFECTIVE ON OR ABOUT
SEPTEMBER 1, 1960.
THE PERTINENT FACTS OF YOUR CASE HAVE BEEN SET FORTH IN PRIOR
CORRESPONDENCE AND SHALL NOT BE REPEATED HERE. IN THE DECISION OF
FEBRUARY 26, 1965, WE HELD THAT THE SERVICE WHICH YOU PERFORMED AS
PATROL INSPECTOR, GRADE GS-7, PRIOR TO JANUARY 26, 1953, COULD NOT BE
COUNTED TOWARD THE 10 YEARS SERVICE REQUIREMENT IMPOSED BY SECTION
703(B) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 5 U.S.C. 1123(B)
(1958 ED.), FOR ENTITLEMENT TO A LONGEVITY STEP INCREASE. WE POINTED
OUT THAT THE ABOVE-CITED LAW REQUIRED 10 YEARS OF SERVICE "IN POSITIONS
OF EQUIVALENT OR HIGHER CLASS OR GRADE" AND THAT YOUR SERVICE AS PATROL
INSPECTOR, GS-7, WAS NOT EQUIVALENT IN CLASS OR GRADE TO YOUR THEN
CURRENT POSITION - IMMIGRANT INSPECTOR, GRADE GS-9.
IN YOUR LETTER OF DECEMBER 9, 1970, YOU ADVISE THAT EFFECTIVE JUNE
28, 1970, THE POSITION OF PATROL INSPECTOR WAS RECLASSIFIED TO GRADE
GS-9. SINCE THAT POSITION HAS BEEN MADE EQUIVALENT IN GRADE TO THAT OF
IMMIGRANT INSPECTOR, YOU BELIEVE THAT IN ACCORDANCE WITH OUR DECISION
PUBLISHED AT 33 COMP. GEN. 362 (1954) YOU NOW ARE ENTITLED TO A
LONGEVITY STEP INCREASE IN GRADE GS-9 RETROACTIVE TO SEPTEMBER 1, 1960.
IN THE CITED DECISION WE HELD THAT AN EMPLOYEE WHO IS ASSIGNED TO
ANOTHER POSITION IN A HIGHER GRADE IS ENTITLED TO CREDIT FOR SERVICE IN
HIS FORMER LOWER GRADE POSITION WHICH HAD BEEN REALLOCATED WITHOUT A
CHANGE IN DUTIES TO A SIMILAR HIGHER GRADE TOWARD THE AGGREGATE 10 YEARS
OF SERVICE REQUIRED BY SECTION 703(B) OF THE CLASSIFICATION ACT. IF THE
RECLASSIFICATION TO WHICH YOU REFER HAD OCCURED PRIOR TO THE TIME YOU
OTHERWISE BECAME ELIGIBLE FOR THE LONGEVITY INCREASE IN QUESTION, IT
MIGHT BE THAT DECISION WOULD HAVE BEEN APPLICABLE. HOWEVER, WE POINT
OUT THAT SUCH DECISION WAS NEVER INTENDED TO REQUIRE RECONSIDERATION OF
LONGEVITY CREDITS BASED ON EVENTS TRANSPIRING SUBSEQUENT TO THE DATE A
LONGEVITY INCREASE WAS GRANTED.
THEREFORE, IN VIEW OF THE ABOVE YOU MAY NOT BE ALLOWED A LONGEVITY
INCREASE RETROACTIVE TO SEPTEMBER 1, 1960.
B-170616, FEB 23, 1971
BID PROTEST
DECISION DENYING PROTEST AGAINST CONTRACTING OFFICER'S DETERMINATION
THAT IT WAS NOT NECESSARY TO HOLD WRITTEN OR ORAL DISCUSSION WITH
PROTESTANT ON A PROPOSAL TO FURNISH A MODEL MULTIPLEXER UNDER RFQ ISSUED
BY U.S. ARMY ELECTRONICS COMMAND, FORT MONMOUTH, N.J.
WHILE 45 COMP. GEN. 417 (1966) HELD THAT THE FAILURE TO NEGOTIATE IS
INCONSISTENT WITH THE STATUTORY AND REGULATORY REQUIREMENTS FOR HOLDING
WRITTEN OR ORAL DISCUSSIONS WITH ALL OFFERORS WITHIN COMPETITIVE RANGE,
A TECHNICAL EVALUATION WHICH DETERMINED THAT PROTESTANT'S PROPOSAL WAS
NOT WITHIN A COMPETITIVE RANGE IS A MATTER WITHIN THE DISCRETION OF THE
ADMINISTRATIVE OFFICE AND IN THE ABSENCE OF AN ABUSE OF THIS DISCRETION,
THAT DETERMINATION WILL BE UPHELD.
TO RADIO ENGINEERING LABORATORIES:
THIS REFERS TO THE TELEGRAM DATED AUGUST 14, 1970, AND SUBSEQUENT
CORRESPONDENCE PROTESTING AGAINST THE CONTRACTING OFFICER'S
DETERMINATION THAT IT WAS NOT NECESSARY TO HOLD WRITTEN OR ORAL
DISCUSSIONS WITH YOUR CONCERN ON A PROPOSAL SUBMITTED UNDER REQUEST FOR
QUOTATIONS (RFQ) NO. DAAB07-70-Q-0255, ISSUED ON MARCH 12, 1970, BY THE
FORT MONMOUTH PROCUREMENT DIVISION, PROCUREMENT & PRODUCTION
DIRECTORATE, UNITED STATES ARMY ELECTRONICS COMMAND, FORT MONMOUTH, NEW
JERSEY.
THE PROCUREMENT IS FOR AN ADVANCED DEVELOPMENT MODEL MULTIPLEXER
TOGETHER WITH INCIDENTAL ANCILLARY ITEMS PLUS AN OPTION FOR TWO ADVANCE
PRODUCTION ENGINEERING MODELS WITH THEIR ASSOCIATED ANCILLARY ITEMS.
THE RFQ WAS ISSUED TO A TOTAL OF 56 FIRMS. TWELVE PROPOSALS WERE
RECEIVED AND OPENED ON MAY 1, 1970, THE DATE ESTABLISHED FOR RECEIPT OF
OFFERS. TECHNICAL EVALUATION WAS COMPLETED ON MAY 28, 1970, AND
EVALUATION OF SUPPLEMENTAL INFORMATION WAS COMPLETED ON JULY 7, 1970.
FOUR PROPOSALS WERE DETERMINED TO BE WITHIN THE COMPETITIVE RANGE.
FIRMS SUBMITTING THE REMAINING PROPOSALS WERE NOTIFIED BY LETTER DATED
JUNE 24, 1970, THAT THEIR PROPOSALS WOULD NOT BE CONSIDERED FURTHER.
NOTE 5, PART III(A), OF THE RFQ, ADVISED OFFERORS THAT THE TECHNICAL
EVALUATION FACTORS WERE CONTAINED IN USAECOM CLAUSE 516 A-1. NOTE 5
ALSO ADVISED OFFERORS OF THE FOLLOWING ORDER OF IMPORTANCE FOR THE
VARIOUS TECHNICAL EVALUATION FACTORS:
PRIMARY IMPORTANCE - PARAGRAPH A.
SECONDARY IMPORTANCE - PARAGRAPHS B., C., D., AND F.
NEXT IN IMPORTANCE IN DESCENDING ORDER - PARAGRAPH E.
PARAGRAPH A. OF CLAUSE 516A-1 IS ENTITLED TECHNICAL PROPOSAL
(ENGINEERING APPROACH) AND LISTS THE FOLLOWING SUBFACTORS:
(1) COMPLETENESS
(2) UNDERSTANDING OF PROBLEM
(3) FEASIBILITY OF APPROACH
(4) DESIGN
(5) TEST
(6) SUPPORT ENGINEERING
PARAGRAPHS B., C., D., AND F., OF THE CLAUSE DEAL WITH PERSONNEL,
COMPANY EXPERIENCE, ENGINEERING MAN-HOURS AND SCHEDULE AND DELIVERY,
RESPECTIVELY. PARAGRAPH E., OF THE CLAUSE RELATES TO MATERIAL CHARGES.
THE CLAUSE ALSO PROVIDED FOR CONSIDERATION OF THE OFFEROR'S FINANCIAL
STATUS AND CAPABILITY, ESTIMATED COSTS AND FEE OR PROFIT.
PURSUANT TO A TECHNICAL EVALUATION, IT WAS DETERMINED THAT YOUR
PROPOSAL WAS NOT WITHIN THE COMPETITIVE RANGE AND THAT FURTHER
DISCUSSIONS WITH YOUR CONCERN WOULD SERVE NO USEFUL PURPOSE. YOU HAVE
ASSERTED THAT THE FAILURE TO NEGOTIATE WITH YOUR CONCERN WAS
INCONSISTENT WITH THE STATUTORY AND REGULATORY REQUIREMENTS FOR HOLDING
WRITTEN OR ORAL DISCUSSIONS WITH ALL OFFERORS WITHIN A COMPETITIVE
RANGE, CITING 45 COMP. GEN. 417 (1966). YOU CONTEND THAT YOUR PROPOSAL
WAS WITHIN THE RANGE OF ACCEPTABILITY FROM A TECHNICAL STANDPOINT. IT
IS URGED THAT THE PROCURING ACTIVITY USED CRITERIA IN THE EVALUATION
WHICH WERE NOT SET FORTH IN THE RFQ. YOU CONTEND THAT THE CONTRACTING
OFFICER'S LETTER OF JUNE 24, 1970, DID NOT MEET THE REQUIREMENTS OF
ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-508.2(A) SINCE THE LETTER
DID NOT ADVISE REL OF THE SPECIFIC REASONS WHY ITS OFFER WAS NOT
ACCEPTABLE AND THAT IT WAS NOT UNTIL REL PROTESTED THIS MATTER TO OUR
OFFICE THAT ARMY ADVISED REL OF THE BASIS FOR ITS ACTION. REL ARGUES
THAT THIS PROCEDURE WAS NOT IN ACCORDANCE WITH 46 COMP. GEN. 606,
611-612 (1967).
BOTH 10 U.S.C. 2304(G) AND ASPR 3-805.1(A) GENERALLY REQUIRE
DISCUSSIONS WITH OFFERORS WHO SUBMIT PROPOSALS WITHIN THE COMPETITIVE
RANGE, PRICE AND OTHER FACTORS CONSIDERED. THE PHRASE "OTHER FACTORS"
HAS BEEN HELD TO INCLUDE THE TECHNICAL ACCEPTABILITY OF PROPOSALS. 46
COMP. GEN. 606 (1967). IN OUR OPINION, A PROPOSAL MUST BE REGARDED AS
WITHIN A COMPETITIVE RANGE UNLESS IT IS SO TECHNICALLY DEFICIENT OR OUT
OF LINE IN PRICE AS TO PRECLUDE FURTHER MEANINGFUL NEGOTIATIONS.
PARTICULARLY WITH RESPECT TO TECHNICAL CONSIDERATIONS, HOWEVER, WE
RECOGNIZE A REASONABLE DEGREE OF ADMINISTRATIVE DISCRETION IN
DETERMINING WHETHER A PROPOSAL IS WITHIN THE COMPETITIVE RANGE.
B-163024, AUGUST 27, 1968, AND B-168092, MAY 5, 1970.
ARMY'S DETERMINATION THAT REL WAS NOT IN A COMPETITIVE RANGE WAS
BASED ON THE FINDING THAT THERE WERE A NUMBER OF MAJOR TECHNICAL
DEFICIENCIES IN YOUR PROPOSAL, INCLUDING THE PROPOSED SCHEMES FOR FRAME
SYNCHRONIZATION AND SIGNALING. THE CONTRACTING AGENCY STATES THAT
NEITHER OF THE TWO PROPOSED ALTERNATE SCHEMES FOR FRAME SYNCHRONIZATION
AND SIGNALING IS ACCEPTABLE. THE CONTRACTING OFFICER'S REPORT DATED
FEBRUARY 3, 1971, GIVES THE FOLLOWING DETAILS WITH RESPECT TO THIS
DEFICIENCY:
" *** PLAN 1 (CYCLIC PERMUTATION OF THE M-LEAD CONDITION OF THE FIRST
THREE CHANNELS) WOULD BE SUBJECT TO FALSE FRAME SYNCHRONIZATION DUE TO
M-LEAD CONDITIONS ON OTHER CHANNELS. THIS IS BECAUSE FRAME-IN IS
DEPENDENT ON SIGNALING CONDITIONS ON CHANNELS 1, 2 AND 3 WHICH COULD BE
DUPLICATED ON OTHER CHANNELS. THE SAMPLING RATE PROVIDED FOR SIGNALING
WAS NOT SUFFICIENT TO MEET THE + OR - 5% DISTORTION REQUIREMENT OF THE
SPECIFICATION ON CHANNELS 1, 2 AND 3 IN PLAN 1 AND ALL CHANNELS IN PLAN
2. THE SAMPLING RATE PROPOSED IN PLAN 1 AND PLAN 2 FOR SIGNALING
RESULTS IN 6.34% DISTORTION, WHICH IS UNACCEPTABLE. THE USE OF A M-LEAD
PULSE DISTORTION CORRECTOR WAS NOT CONSIDERED A COST EFFECTIVE SOLUTION.
A MAJOR CHANGE IN CONCEPT AND SUBSTANTIAL REWRITE OF THE PROPOSAL WOULD
BE REQUIRED TO CORRECT THESE DEFICIENCIES. IN COMPARING BIDDER B'S
DEFICIENCY WITH REL'S RELATIVE TO SIGNALING, BIDDER B'S PROPOSED FRAME
FORMAT AFFECTED SIGNALING DISTORTION ONLY. THEIR PROPOSAL FOR FRAME
SYNCHRONIZATION WAS FULLY COMPLIANT WITH SPECIFICATION REQUIREMENTS, AND
THEIR BASIC APPROACH WAS SOUND IN ALL OTHER RESPECTS. A RELATIVELY MINOR
MODIFICATION TO PROVIDE INCREASED SAMPLING RATE FOR SIGNALING WAS ALL
THAT WAS REQUIRED."
IN ADDITION TO THE DEFICIENCY IN THE SIGNALING AND FRAMING METHOD, WE
HAVE ALSO BEEN ADVISED OF THE FOLLOWING DEFICIENCIES IN YOUR PROPOSAL:
"B. THE RELIABILITY PROGRAM PROPOSED BY REL IN ORDER TO SATISFY THE
REQUIREMENTS OF THE ECOM SPECIFICATION IS DEFICIENT WITH RESPECT TO
ANALYSIS, PREDICTION AND SCHEDULING. THE RELIABILITY ANALYSIS AND
PREDICTION SUBMITTED BY REL IN ITS PROPOSAL WAS DONE INCORRECTLY AS
MANIFESTED BY THE USE OF A PARALLEL RELIABILITY MODEL IN LIEU OF A
SERIES MODEL. THE PARALLEL RELIABILITY MODEL IS OPTIMISTIC IN THAT IT
MAKES THE PREDICTED MEAN TIME BETWEEN FAILURE (MTBF) ABOUT DOUBLE WHAT
IT SHOULD BE. REL DID NOT BREAK THE MODEL DOWN TO THE COMPONENT LEVEL
TO INDICATE WHAT THE MTBF OF THE COMPONENT WOULD BE, AND THEY DO NOT
STATE WHAT INTERNAL TEMPERATURE RISE IS EXPECTED. REL IS OVERLY
OPTIMISTIC ABOUT THE EFFECT BURN-IN HAS ON IMPROVING THE RELIABILITY OF
THE EQUIPMENT. THE RELIABILITY PROGRAM PROPOSED DOES NOT PROVIDE
SUFFICIENT TEST TIME TO REACH THE EXPECTED DECISION POINT. THEIR
PROPOSAL CONTAINS CONFLICTING STATEMENTS ON LENGTH OF RELIABILITY TEST
AND DOES NOT GIVE DELIVERY DATES FOR RELIABILITY SOFTWARE. THE
RELIABILITY PORTION OF THE PROPOSAL WOULD REQUIRE COMPLETE REVISION TO
CORRECT THESE DEFICIENCIES.
"C. REL HAS STATED IN ITS PROPOSAL (PAGE 4B-212) IT HAS VERY LIMITED
EXPERIENCE IN USING DIGITAL CIRCUITS IN TRANSMISSION MULTIPLEX
EQUIPMENT. REL STATES THEIR EXPERIENCE IN THIS AREA WAS ACQUIRED DURING
THE PAST YEAR IN ASSOCIATION WITH NIPPON ELECTRIC COMPANY (NEC).
PROBLEMS MAY BE ENCOUNTERED IN DIFFERENCES IN CHARACTERISTICS BETWEEN
JAPANESE AND U.S. MADE DIGITAL INTEGRATED CIRCUITS.
"REL'S TECHNICAL KNOW HOW IN THE MULTIPLEX FIELD IS STRONGLY
DEPENDENT UPON NEC'S BACKGROUND AND EXPERIENCE. THE RELATIONSHIP
BETWEEN REL AND NEC DURING THE DEVELOPMENT OF THE TD-968 IS NOT CLEARLY
SPECIFIED OTHER THAN NEC PERSONNEL WOULD BE USED FOR CONSULTATION AS
REQUIRED. THE LACK OF REL'S EXPERIENCE IN THE DESIGN, DEVELOPMENT AND
MANUFACTURE OF PCM EQUIPMENT, OR SIMILAR TYPE DIGITAL EQUIPMENT FOR USE
IN TRANSPORTABLE ASSEMBLAGES, PLUS THE UNCERTAIN PART THAT NEC WOULD
PLAY IN THE DEVELOPMENT, DOES NOT INSPIRE CONFIDENCE IN THE CAPABILITY
OF REL TO MEET THE SPECIFICATION REQUIREMENTS IN THE TIME SCHEDULED FOR
THIS PROGRAM.
"D. THE MECHANICAL DESIGN APPROACH SUBMITTED BY REL IS DEFICIENT IN
CERTAIN AREAS. FOR EXAMPLE, THEIR APPROACH IN THE CHASSIS AND CASE
DESIGN IS TO USE 1/8 INCH SOLID ALUMINUM, BUT NO ANALYSIS IS GIVEN AS TO
HOW THE WEIGHT REQUIREMENT OF THE SPECIFICATION WILL BE MET. IT IS
SERIOUSLY QUESTIONED THAT THE USE OF THIS MATERIAL WOULD MEET THE WEIGHT
REQUIREMENT. REL'S PROPOSAL DOES NOT GIVE CONSIDERATION OR ANALYSIS AS
TO MEANS OF COOLING THE EQUIPMENT. THE PAUCITY OF DISCUSSION AND
ANALYSIS OF THE MECHANICAL DESIGN APPROACH PROPOSED BY REL PROVIDES NO
ASSURANCE THAT THE SERVICE CONDITIONS OF THE ECOM SPECIFICATION WILL BE
MET. THE MECHANICAL DESIGN PROPOSAL IS UNCLEAR AS TO WHAT METHOD HE
PROPOSES TO USE TO MAKE AUDIO CONNECTIONS TO THE EQUIPMENT. USE OF A
144 PIN AUDIO CONNECTOR TO A 144 CONNECTION TERMINAL BLOCK OR THE USE OF
SOLDER CONNECTIONS FROM MANY MULTIPAIR AUDIO CABLES TO A 144 CONNECTOR
TERMINAL BLOCK CAN BE INFERRED. NEITHER METHOD IS ACCEPTABLE. A
SUBSTANTIAL REWRITE OF THE MECHANICAL PORTION OF THE PROPOSAL WOULD BE
REQUIRED TO CORRECT THOSE DEFICIENCIES.
"E. THE MAINTAINABILITY PROGRAM PROPOSED BY REL IS DEFICIENT IN A
NUMBER OF AREAS. REL'S PROPOSED USE OF PATCH CORDS FOR ALIGNMENT IS AN
UNACCEPTABLE DESIGN FROM A MAINTAINABILITY STANDPOINT. THE CORDS CAN BE
EASILY MISPLACED OR BROKEN. THE USE OF PATCH CORDS IS CONDUCIVE TO
ERROR, AND EXCESSIVE TIME IS REQUIRED FOR ALIGNMENT, AS COMPARED TO
OTHER METHODS. IT WOULD BE EXTREMELY DIFFICULT TO MEET THE MEAN TIME TO
REPAIR (MTTR) REQUIREMENT OF THE SPECIFICATION BY THIS PROPOSED METHOD.
THERE WAS INSUFFICIENT DESIGN INFORMATION WITH RESPECT TO USE OF THE
INTEGRAL TEST FACILITY AS TO WHETHER OR NOT IT WOULD INTERFERE WITH
NORMAL TRAFFIC FLOW WHILE TESTING PLUG-IN PRINTED CIRCUIT CARDS. THE
SPECIFICATION STATES THAT NORMAL TRAFFIC FLOW SHALL NOT BE INTERFERED
WITH WHEN TESTING. THE POWER SUPPLY AND MONITOR FACILITIES ARE NOT
SEPARATE PLUG-IN UNITS AS REQUIRED BY THE SPECIFICATION. REL'S PROPOSAL
IS NEBULOUS AS TO HOW THE PLUG-IN PRINTED CIRCUIT CARDS ARE TO BE
SECURED OR REMOVED AS THIS INFORMATION IS NECESSARY TO DETERMINE IF THE
MTTR REQUIREMENT CAN BE MET. THE ABOVE DEFICIENCIES, ALSO REFLECT
UNFAVORABLY ON THE HUMAN FACTORS ENGINEERING PROGRAM. A SUBSTANTIAL
REWRITE OF THIS PORTION OF THE PROPOSAL WOULD BE REQUIRED TO CORRECT
THESE DIFFICIENCIES.
"F. THE TEMPEST PROGRAM SUBMITTED BY REL HAS WEAK POINTS IN A NUMBER
OF AREAS. REL PROVIDES NO SPECIFIC DESIGN APPROACH IN ITS PROPOSAL.
ONLY GENERALIZED TECHNIQUES APPLICABLE TO ANY PROGRAM ARE DISCUSSED.
REL INTENDS TO SUBCONTRACT TEMPEST TO NATIONAL SCIENTIFIC LABORATORIES
BUT DOES NOT STATE IF THE SUBCONTRACT WILL COVER DESIGN CONSULTATION OR
TESTING OR BOTH. THE PROPOSAL DID NOT PROVIDE INFORMATION ON REL
TEMPEST PERSONNEL OR COMPANY TEMPEST EXPERIENCE, AND NSL PERSONNEL WERE
NOT FIRMLY COMMITTED. NOTWITHSTANDING THE INCOMPLETENESS OF THIS AREA,
REL WAS SCORED ON THE ASSUMPTION THAT NSL WOULD PROVIDE ALL NECESSARY
PERSONNEL AND FACILITIES.
"G. ALTHOUGH CONSIDERABLE TEST DATA WAS GIVEN FOR THE PERFORMANCE OF
7-BIT, U = 100 AND A 13 SEGMENT A = 87.6 CODERS (COMMERCIAL EQUIPMENT)
DEVELOPED BY NIPPON ELECTRIC COMPANY, NO CLEAR INDICATION WAS GIVEN TO
SHOW THE EXTENT THAT THE DATA FURNISHED IN THE PROPOSAL WOULD BE
APPLICABLE TO THE CODER PROPOSED TO BE EMPLOYED. THE MEASURED
PERFORMANCE ON AN 8 BIT, 15 SEGMENT CODER WAS MADE ON A BREADBOARD WHICH
WAS DESIGNED AND FABRICATED BY NEC PRESUMABLY WITH JAPANESE COMPONENTS.
THE RESULTS OF THESE MEASUREMENTS, AND THE PROPOSAL'S CLAIMS FOR
THEORETICAL PERFORMANCE SIGNIFICANTLY EXCEED WHAT IS CONSIDERED TO BE
ACHIEVABLE BY THE PROPOSED APPROACH, BASED ON CURRENT THEORETICAL
CONSIDERATIONS. THESE RESULTS, CLAIMED TO BE ACHIEVABLE IN THE PROPOSAL,
WERE NOT EXPLAINED OR ADEQUATELY SUPPORTED BY ANALYSIS OR DETAILS OF
TESTING.
"H. THE DETAILS GIVEN WITH REGARD TO THE VIDEO INTERFACE (I.E., PCM
AND TIMING SIGNALS) WERE INADEQUATE TO DETERMINE WHETHER THESE
SPECIFICATION REQUIREMENTS WOULD BE MET. NO DETAIL ON CIRCUITS WAS
PROVIDED. NO INFORMATION ON BALANCED - UNBALANCED OPERATION, OR CONTROL
OF RISE AND FALL TIMES, WAS FURNISHED. REL MERELY REPEATED THE
SPECIFICATION REQUIREMENTS OF THE RFQ AND IN NO WAY INDICATED HOW THEY
WOULD BE MET.
"I. THE ANALYSIS OF THE PHASE LOCK LOOP FOR DEMULTIPLEX TIMING
RECOVERY WAS INADEQUATE TO DEMONSTRATE PROPER OPERATION WOULD BE
ACHIEVED. ONLY A GENERAL DISCUSSION OF THE REQUIREMENT WAS OFFERED. NO
ANALYSIS OF OF PULL-IN TIME AND JITTER WAS FURNISHED. NO ANALYSIS OF
THE IMPACT OF THE PHASE LOCK LOOP UPON THE MULTIPLEXER FRAME - IN TIME
OR REACQUISITION TIME WAS INCLUDED. REL DID NOT RESPOND TO THIS
REQUIREMENT BY FURNISHING NECESSARY CALCULATIONS."
YOU WERE INFORMED OF THE ABOVE DEFICIENCIES IN YOUR PROPOSAL AT THE
DEBRIEFING CONFERENCE HELD ON SEPTEMBER 1, 1970.
IN CONTRAST TO THE ABOVE MAJOR DEFICIENCIES IN REL'S PROPOSAL WE ARE
ADVISED THAT DEFICIENCIES IN THE PROPOSALS FOUND TO BE IN A COMPETITIVE
RANGE WERE MINOR AND EASILY CORRECTED THROUGH DISCUSSION WITH THESE
OFFERORS AND THAT ONE OF THE ACCEPTABLE OFFERS DID NOT HAVE ANY
DEFICIENCIES. SINCE AWARD IS STILL PENDING THE FOUR OFFERORS FOUND TO
BE IN A COMPETITIVE RANGE ARE DESIGNATED BIDDERS (OFFERORS) A, B, C, AND
D. ARMY'S ANALYSIS OF THESE OFFERS FOLLOWS:
"A. BIDDER A WAS DETERMINED TO BE FULLY ACCEPTABLE.
"B. BIDDERS B, C, AND D WERE FOUND TO BE SUSCEPTIBLE OF BEING MADE
ACCEPTABLE THROUGH CLARIFICATION AND RECTIFICATION OF MINOR
DEFICIENCIES.
"C. ALL OTHER BIDDERS INCLUDING REL WERE FOUND TO BE UNACCEPTABLE
DUE TO THE EXTENT AND SUBSTANTIVE NATURE OF THEIR DEFICIENCIES.
"D. BIDDERS B, C, AND D WERE DEFICIENT IN THE APE (ADVANCED
PRODUCTION ENGINEERING) PORTION OF THEIR PROPOSALS. CLARIFICATION AND
ADDITIONAL INFORMATION TO INDICATE IN DETAIL EXACTLY HOW APE WOULD BE
PERFORMED WAS REQUIRED. THIS WAS PROVIDED WITHIN ONE WEEK FOLLOWING
DISCUSSIONS WITH THE BIDDERS. SUBSEQUENTLY THE APE PORTION OF THE
PROPOSALS WAS ELIMINATED FROM THE EVALUATION FACTORS BECAUSE THIS
REQUIREMENT WAS CONTAINED AS AN OPTION ONLY IN THE RFQ.
"E. THE SIGNALING METHOD PROPOSED BY BIDDER B WAS INADEQUATE TO MEET
THE SIGNAL DISTORTION REQUIREMENT OF + OR - 5%. THEIR BASIC APPROACH
WAS SOUND WITH RESPECT TO THE SYNCHRONIZATION SCHEME, HOWEVER, A MINOR
MODIFICATION OF FRAME FORMAT TO PROVIDE ADDITIONAL BITS (BINARY DIGITS)
FOR SIGNALING WAS REQUIRED. AN ACCEPTABLE METHOD, INCREASING THE
SAMPLING RATE OF THE SIGNALING INFORMATION, WAS PROPOSED BY BIDDER B
FOLLOWING DISCUSSION WITH HIM.
"F. BIDDER C HAD NO DEFICIENCY OTHER THAN IN THE APE PORTION, AS
MENTIONED ABOVE.
"G. BIDDER D PROPOSED THE USE OF AN EDGEBOARD CONNECTOR FOR PRINTED
CIRCUIT CARDS WHICH IS NOT APPROVED FOR USE IN ARMY EQUIPMENT. AN
ACCEPTABLE TWO-PART CONNECTOR WAS PROPOSED BY THE BIDDER FOLLOWING
DISCUSSION WITH HIM. THIS TYPE OF CONNECTOR WAS DISCUSSED BY THE BIDDER
IN HIS ORIGINAL PROPOSAL BUT WAS NOT PROPOSED BY HIM AS HIS BASIC
APPROACH."
IN VIEW OF THE ABOVE INFORMATION, WE DO NOT FIND THAT THE
ADMINISTRATIVE OFFICE ABUSED ITS DISCRETION BY FINDING THAT YOUR
PROPOSAL WAS NOT IN A COMPETITIVE RANGE. WHERE THE DETERMINATION IS
BASED ON TECHNICAL CONSIDERATIONS, WE MUST ASSUME THAT THE INDIVIDUALS
IN WHOM THE ADMINISTRATIVE DEPARTMENTS OF THE GOVERNMENT HAVE VESTED THE
AUTHORITY TO MAKE SUCH JUDGMENTS ARE COMPETENT, AND OUR OFFICE DOES NOT
HAVE THE TECHNICAL EXPERTISE IN SUCH FIELDS WHICH WOULD ENABLE US TO
QUESTION THE MERITS OF THEIR TECHNICAL DETERMINATIONS. SEE B-167175(2),
OCTOBER 13, 1969. THE DECISION AT 45 COMP. GEN. 417 (1966), CITED IN
YOUR LETTER, HELD THAT AN AWARD ON THE BASIS OF INITIAL OFFERS MAY NOT
BE USED AS A MEANS FOR CIRCUMVENTING THE REQUIREMENT FOR NEGOTIATING
WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE. WE DO NOT FIND THAT CASE
TO BE APPLICABLE IN THIS SITUATION SINCE IN FACT DISCUSSIONS WERE HELD
WITH THOSE OFFERORS FOUND TO BE IN THE COMPETITIVE RANGE.
WITH RESPECT TO YOUR CONTENTION REGARDING THE EVALUATION CRITERIA, WE
HAVE PREVIOUSLY APPROVED THE USE OF EVALUATION CRITERIA AS SET FORTH IN
THIS RFQ. SEE B-170449(1), NOVEMBER 17, 1970. WE HAVE EXAMINED THE
EVALUATION CRITERIA AND FIND THAT EACH OF THE CRITERIA SET FORTH IN THE
RFQ WAS CONSIDERED IN THE EVALUATION; THEREFORE, THE OBJECTION WE MADE
IN THE LETTER TO THE SECRETARY OF THE ARMY IN B-170449, NOVEMBER 17,
1970, WOULD NOT BE APPLICABLE IN THIS CASE.
ASPR 3-508.2(A) PROVIDES FOR PROMPT PREAWARD NOTICE TO UNACCEPTABLE
OFFERORS. YOUR CONCERN WAS GIVEN A COMPREHENSIVE DEBRIEFING ON
SEPTEMBER 1, 1970, AND YOU WERE ALSO NOTIFIED OF THE REJECTION OF YOUR
PROPOSAL BY THE CONTRACTING OFFICER'S LETTER DATED JUNE 24, 1970. BOTH
THE DEBRIEFING AND THE CONTRACTING OFFICER'S LETTER OCCURRED PRIOR TO
AWARD. WHILE THE DEBRIEFING CONFERENCE WAS NOT HELD UNTIL AFTER YOU
FILLED YOUR PROTEST, WE DO NOT CONSIDER THIS AS A BASIS FOR INVALIDATING
THE NEGOTIATION PROCEDURE.
FOR THESE REASONS YOUR PROTEST IS DENIED.
B-171105, B-171303, FEB 23, 1971
BID PROTEST - INACCURATE EVALUATION OF BIDS
DECISION HOLDING THAT CONTRACTS AWARDED TO C&D BATTERIES, INC., AND
GOULD, INC., TO PROVIDE 1,508 LEAD-ACID INDUSTRIAL STORAGE BATTERIES TO
BE DELIVERED ON A MONTHLY BASIS TO 55 DESTINATIONS, WERE UNAUTHORIZED
AND SHOULD BE TERMINATED.
ON DISCOVERY THAT TRANSPORTATION COSTS WERE ADDED TO THE EVALUATION
OF BIDS AND AWARD MADE TO THREE FIRMS ON A LOT BASIS AND A REVIEW OF THE
ENTIRE EVALUATION PROCEDURE REVEALS THAT WEIGHTS AND RATES USED WERE
INAPPLICABLE IN THE FIGURES SUBMITTED BY THE COMPANIES CONCERNED AND IN
THE NAVY REEVALUATION, A CONCLUSION THAT AWARD WAS NOT MADE TO THE
LOWEST RESPONSIVE AND RESPONSIBLE BIDDER AS REQUIRED BY 10 U.S.C.
2305(B), 37 COMP. GEN. 330 (1957), MUST RESULT IN A TERMINATION OF THE
CONTRACTS BECAUSE THE INTEGRITY OF THE FORMAL ADVERTISING PROCUREMENT
SYSTEM REQUIRES THE MAKING OF AWARDS IN STRICT CONFORMANCE WITH THE
SOLICITATION DOCUMENTS AND THE USE OF ACCURATE FACTUAL DATA IN THE
EVALUATION OF BIDS.
TO MR. SECRETARY:
REFERENCE IS MADE TO LETTER OF NOVEMBER 23, 1970, WITH ATTACHMENTS,
SUP 0232, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS
COMMAND, IN CONNECTION WITH CONTRACT NO. N00600-71-C-0353, AWARDED TO
GOULD, INCORPORATED, AND CONTRACT NO. N-0060-71-C-0354, AWARDED TO C &
BATTERIES, INCORPORATED.
THE PROCUREMENT WAS ADVERTISED UNDER INVITATION FOR BIDS (IFB) NO.
N00600-71-B-0022, ISSUED AUGUST 14, 1970, BY THE UNITED STATES
PURCHASING OFFICE, WASHINGTON NAVY YARD, WASHINGTON, D.C. THE
REQUIREMENT COVERED 1508 LEAD-ACID INDUSTRIAL STORAGE BATTERIES AS
REQUIRED BY BOTH ARMY AND NAVY ACTIVITIES. MONTHLY DELIVERIES WERE
SCHEDULED TO 55 DESTINATIONS OVER A 15-MONTH PERIOD BEGINNING IN OCTOBER
1970. IN ADDITION, 11-FIRST ARTICLE TESTS WERE SCHEDULED IN WHICH 7
GOVERNMENT-FURNISHED FORK-LIFT TRUCKS WERE REQUIRED. THE PROCUREMENT
WAS DIVIDED INTO 11 LOTS WITH EVALUATION AND AWARD TO BE MADE ON A LOT
BASIS. BIDS WERE SOLICITED F.O.B. ORIGIN ONLY WITH EVALUATION OF
TRANSPORTATION COSTS TO BE A FACTOR IN DETERMINING THE LOW BIDDER OR
BIDDERS.
BIDS WERE OPENED ON SEPTEMBER 18, 1970. THE FOUR BIDS RECEIVED WERE
FROM C & D BATTERIES DIVISION, ELTRA CORPORATION; EXIDE POWER SYSTEM
DIVISION, ESB INCORPORATED; GOULD, INCORPORATED; AND K. W. BATTERY
COMPANY.
EVALUATION OF BIDS WAS UNDERTAKEN IN THE FOLLOWING SEQUENCE:
A. UNIT PRICES WERE CONVERTED TO LOT PRICES.
B. THE COST OF FIRST ARTICLE TESTING WAS SUBTRACTED WHERE A WAIVER
WAS GRANTED.
C. PROMPT PAYMENT DISCOUNTS WERE SUBTRACTED AS APPLICABLE.
D. TRANSPORTATION COSTS WERE ADDED. FOLLOWING THE EVALUATION OF
TRANSPORTATION COSTS, AWARD WAS MADE ON A LOT BASIS ON OCTOBER 8, 1970,
TO THE THREE LOW BIDDERS AS FOLLOWS:
GOULD, CONTRACT NO. 71-C-0353: LOTS VI, VII, IX, X, XI $1,028,386
C P D, CONTRACT NO. 71-C-0354: LOTS I, II, V, VIII 570,655
EXIDE, CONTRACT NO. 71-C-0355: LOTS III, IV 96,412
IN ADDITION TO INDIVIDUAL LOT PRICING, EXIDE OFFERED A SERIES OF
VARYING DISCOUNTS ON CERTAIN COMBINATIONS OF LOTS. THE ONE DISCOUNT
RELEVANT HERE IS THE OFFER OF A FIVE-PERCENT ACROSS THE BOARD REDUCTION
IN PRICE IN THE EVENT OF AN AWARD OF ALL 11 LOTS. APPLICATION OF THIS
FIVE-PERCENT DISCOUNT MADE THE OVERALL BID (ALL LOTS) OF EXIDE AS
ORIGINALLY EVALUATED ONLY $1,154 GREATER THAN THE SUM OF THE INDIVIDUAL
LOT AWARDS SET FORTH ABOVE.
EXIDE, CONTENDING THAT IT SHOULD HAVE BEEN EVALUATED LOW, REQUESTED
AND WAS GRANTED AN OPPORTUNITY TO REVIEW THE ENTIRE EVALUATION
PROCEDURE. IN VIEW OF EXIDE'S CONTENTION, THE CONTRACTING OFFICER
THOROUGHLY REVIEWED THE EVALUATION AND DISCOVERED ERRORS IN THE
PROJECTED TRANSPORTATION COSTS. THEREFORE, AND IN VIEW OF THE COMPLEXITY
OF THE TRANSPORTATION EVALUATION AND THE SMALL DIFFERENCE ($1,154) IN
EVALUATED PRICES, THE CONTRACTING OFFICER, ON OCTOBER 20, 1970, NOTIFIED
GOULD AND C & D BATTERIES TO STOP WORK, AND UNDERTOOK A COMPLETELY NEW
TRANSPORTATION EVALUATION USING A TEAM OF THREE NAVY TRANSPORTATION
SPECIALISTS OBTAINED FROM OTHER COMMANDS. THE FINAL RESULT OF THE
REEVALUATION INDICATED THAT THE TOTAL EVALUATED EXIDE BID PRICE ON ALL
LOTS IS $713 LOWER THAN THE EVALUATED PRICE OF AWARD BY LOTS.
IT IS ADMINISTRATIVELY NOTED THAT THE TRANSPORTATION REEVALUATION
DOES NOT NECESSARILY REFLECT THE COSTS INVOLVED WHEN THE VARIOUS LOTS OF
BATTERIES ARE ACTUALLY SHIPPED UNDER THE CONTRACT. THE REPORT POINTS
OUT THAT SOME TRANSPORTATION RATES MAY BE DIFFERENT BY THE TIME OF
ACTUAL SHIPMENT; THAT THOSE PERSONS INVOLVED IN THE ACTUAL SHIPMENT MAY
FIND WAYS TO CONSOLIDATE SHIPMENTS AND OTHERWISE REDUCE COSTS; AND THAT
THE EVALUATIONS INVOLVED 8 PLACES OF ORIGIN, 55 DESTINATIONS AND OVER
2,000 DIFFERENT TRANSPORTATION RATES.
GOULD, INCORPORATED, AND C & D BATTERIES PROTESTED, BY TELEFAX
COMMUNICATIONS TO OUR OFFICE, THE ISSUANCE BY THE CONTRACTING OFFICER OF
THE STOP WORK ORDERS. GOULD MAINTAINS THAT THE STOP WORK ORDER IS
NEITHER EXPRESSLY NOR IMPLIEDLY AUTHORIZED BY THE CONTRACT, AND THAT
COSTS INCURRED UNDER THE CONTRACT EXCEED $45,000. THE HIGH COSTS RESULT
FROM THE NECESSITY TO COMMENCE ALL PHASES OF PRODUCTION BECAUSE OF EARLY
DELIVERIES REQUIRED UNDER THE CONTRACT.
SIMILARLY C & D BATTERIES MAINTAINS THAT IT WILL INCUR CONSIDERABLE
COSTS IF ITS CONTRACT IS CANCELLED. C & D BATTERIES ALSO STATES THAT
UPON ASKING THE NAVY PURCHASING OFFICE IF IT SHOULD ATTEMPT TO USE
PRODUCTION MATERIAL IN FULFILLMENT OF ITS COMMERCIAL CONTRACTS OR HOLD
THE PRODUCTION IN ABEYANCE PENDING DECISION, IT WAS ADVISED TO HOLD THE
PRODUCTION. BOTH COMPANIES REQUESTED PERMISSION TO EXAMINE THE
REEVALUATION OF TRANSPORTATION RATES AND TOTALS. EXIDE ALSO REQUESTED
PERMISSION TO EXAMINE THE REEVALUATED RATES.
EACH OF THE THREE COMPANIES CONCERNED HAS BEEN FURNISHED A COPY OF
THE REEVALUATION OF TRANSPORTATION CHARGES MADE BY THE NAVY
TRANSPORTATION SPECIALISTS. EACH OF THE COMPANIES CONTESTED THE RATES
AND COMPUTATIONS OF THE NAVY SPECIALISTS AND SUBMITTED HERE ITS OWN
COMPUTATIONS FOR COMPARISON WHICH RESULT IN TRANSPORTATION EVALUATION
MOST FAVORABLE TO THE COMPANY SUBMITTING THE COMPUTATIONS. EXIDE HAS
ALLEGED ERRORS IN THE GOULD AND C & D BATTERIES COMPUTATIONS WHICH WOULD
RESULT IN AN EVALUATED BID ENTITLING EXIDE TO AN AWARD ON ALL 11 LOTS.
ON THE OTHER HAND, THE GOULD AND C & D BATTERIES COMPUTATIONS, WITH
RATES REFERENCED TO APPROPRIATE TARIFFS, RESULT IN ENTITLEMENT TO AWARDS
AS ORIGINALLY MADE.
IN ACCORDANCE WITH GOVERNMENT POLICY AND UNDER THE SPECIFIC TERMS OF
THE IFB, PROJECTED TRANSPORTATION COSTS WERE INCLUDED IN THE EVALUATION
OF BIDS. CORRECT TRANSPORTATION RATES FROM THE SEVERAL POINTS OF ORIGIN
TO THE MANY POINTS OF DESTINATION WERE OF PARAMOUNT IMPORTANCE
PARTICULARLY IN VIEW OF THE CLOSE DIFFERENCES IN EVALUATED BIDS.
BECAUSE OF THE DIFFERENCES OF OPINION AS TO THE CORRECT RATES, WE
HAVE HAD OUR TRANSPORTATION RATE ANALYSTS EXAMINE THE DOCUMENTS
SUBMITTED BY THE COMPANIES, AND THE DOCUMENTS OF RECORD HERE IN ORDER TO
VERIFY THE RATES AND CHARGES SHOWN.
FROM OUR OWN INDEPENDENT EXAMINATION, WE HAVE FOUND MANY RATES AND
WEIGHTS USED WHICH WERE INAPPLICABLE TO THE PROJECTED SHIPMENTS, NOT
ONLY IN THE FIGURES SUBMITTED BY THE COMPANIES CONCERNED BUT IN THE NAVY
REEVALUATION FIGURES AS WELL. HOWEVER, THE RESULT OF THE RECOMPUTATION
SHOWS THAT THE EXIDE BID ON ALL LOTS PLUS TRANSPORTATION CHARGES IS LESS
THAN THE TOTAL OF THE DIVIDED LOT BIDS PLUS TRANSPORTATION CHARGES,
ALTHOUGH THE DIFFERENCE IS LESS THAN COMPUTED BY THE NAVY ANALYSTS.
HENCE, WE MUST CONCLUDE THAT AWARD WAS NOT MADE TO THE LOWEST RESPONSIVE
AND RESPONSIBLE BIDDER AS REQUIRED BY 10 U.S.C. 2305(B), 37 COMP. GEN.
330 (1957). THEREFORE, THE AWARDS TO C & D AND GOULD WERE UNAUTHORIZED
AND SHOULD BE TERMINATED. IN THE CIRCUMSTANCES THE TERMINATION FOR
CONVENIENCE PROVISIONS OF THE CONTRACTS MAY PROPERLY BE INVOKED.
B-170230, JANUARY 28, 1971. IN SETTLING ON THE PRECISE TERMS OF THE
TERMINATIONS, THE COST TO THE GOVERNMENT IS A SUBJECT OF LEGITIMATE
CONSIDERATION. IN THIS CONNECTION WE NOTE THAT EXIDE HAS INDICATED IN
ITS LETTER OF DECEMBER 18, 1970, TO US, ITS WILLINGNESS TO CONSIDER WAYS
OF MINIMIZING THE TERMINATION COSTS.
WE ARE NOT UNMINDFUL OF THE POSSIBLE COSTS RESULTING FROM THE
CANCELLATION OF CONTRACTS, BUT THE INTEGRITY OF THE FORMAL ADVERTISING
PROCUREMENT SYSTEM REQUIRES THE MAKING OF AWARDS IN STRICT CONFORMANCE
WITH THE SOLICITATION DOCUMENTS AND THE USE OF ACCURATE FACTUAL DATA IN
THE EVALUATION OF BIDS.
B-171866, FEB 23, 1971
COMPENSATION - U.S. TRANSPORT CORPS
DECISION DENYING ADDITIONAL COMPENSATION TO GONZALO DE LA CRUZ
INCIDENT TO HIS SERVICE AS AN ABLE SEAMAN WITH THE U.S. TRANSPORT CORPS,
DUE TO THE 10-YEAR LIMITATION PERIOD PRESCRIBED BY THE ACT OF OCTOBER 9,
1940.
SINCE CLAIM ACCRUED ON JANUARY 15, 1948, AND WAS NOT FILED WITH GAO
UNTIL DECEMBER 12, 1958, THE CLAIM IS BARRED BY THE 10-YEAR LIMITATION
PERIOD PRESCRIBED BY THE ACT OF OCTOBER 9, 1940.
TO MR. GONZALO DE LA CRUZ:
FURTHER REFERENCE IS MADE TO YOUR UNDATED LETTER ADDRESSED TO THE
ARMY FINANCE CENTER, INDIANAPOLIS, INDIANA, REQUESTING INFORMATION
REGARDING A CLAIM WHICH YOU SAY YOU SENT TO THAT OFFICE ON MARCH 10,
1970. BY LETTER DATED NOVEMBER 30, 1970, THE FINANCE CENTER TRANSMITTED
YOUR LETTER TO OUR OFFICE FOR CONSIDERATION UNDER THE PROVISIONS OF THE
ACT OF OCTOBER 9, 1940, 54 STAT. 1061, AS AMENDED. WE HAVE NO RECORD
OF HAVING RECEIVED THE LETTER OF MARCH 10, 1970.
YOUR CLAIM DATED DECEMBER 12, 1958, FOR ADDITIONAL COMPENSATION
BELIEVED TO BE DUE INCIDENT TO YOUR SERVICE AS AN ABLE SEAMAN WITH THE
U.S. TRANSPORT CORPS FROM DECEMBER 26, 1945, TO JANUARY 15, 1948, WAS
FIRST RECEIVED IN THIS OFFICE ON DECEMBER 19, 1958. THE MATTER WAS THE
SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION, DATED DECEMBER 31, 1958,
AUGUST 11, 1959, AND OCTOBER 11, 1960. IN THOSE LETTERS, YOU WERE
ADVISED THAT UNDER THE PROVISIONS OF THE ACT OF OCTOBER 9, 1940, 54
STAT. 1061, A COPY OF WHICH WAS FORWARDED TO YOU, CONSIDERATION OF YOUR
CLAIM BY OUR OFFICE WAS BARRED SINCE IT WAS RECEIVED HERE MORE THAN 10
YEARS AFTER IT FIRST ACCRUED.
WITH RESPECT TO YOUR STATEMENT THAT IN 1949 YOU AUTHORIZED AN
ATTORNEY TO FILE YOUR CLAIM, YOU WERE ADVISED THAT THERE WAS NO RECORD
OF THE RECEIPT IN OUR OFFICE OF ANY COMMUNICATION CONCERNING YOUR CLAIM
PRIOR TO YOUR LETTER OF DECEMBER 12, 1958. YOU WERE ADVISED FURTHER
THAT ANY CLAIM FILED WITH SOME OTHER DEPARTMENT OR AGENCY OF THE FEDERAL
GOVERNMENT DOES NOT MEET THE STATUTORY REQUIREMENT THAT SUCH CLAIM MUST
BE FILED WITH OUR OFFICE WITHIN THE PRESCRIBED LIMITATION.
UNDER THE PROVISIONS OF 31 U.S.C. 71, THE GENERAL ACCOUNTING OFFICE
IS AUTHORIZED TO SETTLE AND ADJUST ALL CLAIMS AGAINST THE UNITED STATES.
THESE CLAIMS ARE SUBJECT TO THE PROVISIONS OF THE ACT OF OCTOBER 9,
1940, WHICH PRECLUDES OUR OFFICE FROM TAKING ANY ACTION ON CLAIMS WHICH
ARE RECEIVED MORE THAN 10 YEARS FROM THE DATE THEY FIRST ACCRUED.
SINCE YOUR CLAIM IS LEGALLY BARRED THERE IS NO ACTION WE MAY TAKE IN
THE MATTER.
B-161873, FEB 22, 1971
TRAVEL EXPENSES - ILLNESS - OTHER THAN EMPLOYEE
DECISION DENYING PAYMENT OF A RECLAIM VOUCHER FOR $120 IN FAVOR OF
DR. HERBERT W. JACKSON FOR RETURN FARE FROM SAN FRANCISCO, CALIF., TO
CINCINNATI, OHIO.
AN EMPLOYEE WHO UPON ARRIVAL AT HIS TEMPORARY DUTY STATION - A
SCIENTIFIC CONFERENCE - IS TOLD TO ABANDON HIS OFFICIAL TRAVEL DUE TO A
DEATH IN HIS FAMILY AND IS FREE TO PROCEED TO WHERE HE IS NEEDED (NEW
HAMPSHIRE) AT HIS OWN DISCRETION IS NOT ENTITLED TO THE TRAVEL AND
TRANSPORTATION EXPENSES HE WOULD HAVE INCURRED IN RETURNING TO HIS
HEADQUARTERS. THE RULE ANNOUNCED IN B-161873, JULY 18, 1967, 47 COMP.
GEN. 59 IS FOR APPLICATION AND THE VOUCHER MAY NOT BE CERTIFIED.
TO MR. OSCAR K. RODGERS:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 22, 1970, REQUESTING OUR
ADVANCE DECISION AS TO THE PROPRIETY OF PAYING A RECLAIM VOUCHER,
ENCLOSED, FOR $120 IN FAVOR OF DR. HERBERT W. JACKSON FOR RETURN FARE
FROM SAN FRANCISCO, CALIFORNIA, TO CINCINNATI, OHIO.
IT APPEARS THAT ON JANUARY 27, 1970, DR. JACKSON DEPARTED FROM
CINCINNATI FOR SAN FRANCISCO ON OFFICIAL ORDERS TO ATTEND A TRAINING
COURSE ENTITLED "POLLUTION OF COASTAL AND ESTUARINE WATERS" OFFERED BY
THE CONTINUING EDUCATION IN ENGINEERING, UNIVERSITY EXTENSION, AND THE
COLLEGE OF ENGINEERING OF THE UNIVERSITY OF CALIFORNIA TO BE CONDUCTED
AT THE UNIVERSITY EXTENSION CENTER, SAN FRANCISCO, FROM JANUARY 28-30,
1970. THE EMPLOYEE STATES THAT HE WAS TO ATTEND WITH THE DOUBLE
OBJECTIVE OF CAREER DEVELOPMENT AND TO OBTAIN INFORMATION ON THE LATEST
DEVELOPMENTS IN THE FIELD OF NONGOVERNMENTAL SOURCES FOR POSSIBLE USE IN
THE TRAINING PROGRAM.
DR. JACKSON WAS PAGED ON ARRIVAL AT THE SAN FRANCISCO AIRPORT BY HIS
HOME OFFICE IN CINCINNATI AND INFORMED OF HIS FATHER'S DEATH IN NEW
HAMPSHIRE. THE FUNERAL WAS ON THURSDAY, THE 29TH, AND HIS PRESENCE WAS
SERIOUSLY NEEDED BY HIS FAMILY IN THE INTERIM. HE STATES THAT HE WAS
INFORMED BY HIS HOME OFFICE THAT ALL ARRANGEMENTS FOR HIS ATTENDANCE AT
THE COURSE HAD BEEN CANCELLED ON INSTRUCTIONS FROM HIS SUPERVISOR AND
THAT HE WAS FREE TO PROCEED TO NEW HAMPSHIRE AT HIS OWN DISCRETION.
THE EMPLOYEE INDICATES THAT HE PURCHASED A TICKET ON TWA FLIGHT 76
LEAVING SAN FRANCISCO AT 2:30 P.M. LOCAL TIME, FLYING NONSTOP TO BOSTON,
MASSACHUSETTS, WHERE HE ARRIVED AT 10:30 P.M. LOCAL TIME; AND THAT HE
RETURNED THE UNUSED TICKET (PROCURED ON A GOVERNMENT TRANSPORTATION
REQUEST) FROM SAN FRANCISCO TO CINCINNATI TO THE GOVERNMENT, HAVING
PREVIOUSLY CANCELLED THE RETURN RESERVATION FOR SATURDAY, JANUARY 31.
AS INDICATED IN YOUR LETTER WE HAVE HELD THAT AN EMPLOYEE WHO UPON
ARRIVAL AT HIS TEMPORARY DUTY STATION ABANDONS HIS OFFICIAL TRAVEL DUE
TO A DEATH IN HIS FAMILY IS NOT ENTITLED TO THE TRAVEL AND
TRANSPORTATION EXPENSES IN RETURNING TO HIS HEADQUARTERS. 47 COMP.
GEN. 59 (1967), B-158442, FEBRUARY 15, 1966, COPY HEREWITH. WE SEE NO
REASON WHY THAT RULE SHOULD NOT BE APPLICABLE HERE. ACCORDINGLY, THE
EMPLOYEE WAS NOT ENTITLED TO REIMBURSEMENT OF THE COST OF TRAVEL FROM
SAN FRANCISCO TO CINCINNATI.
THE VOUCHER WHICH IS RETURNED HEREWITH MAY NOT BE CERTIFIED FOR
PAYMENT.
B-164515(2), FEB 22, 1971
COORDINATED FEDERAL WAGE SYSTEM SURVEY - PREVAILING RATE - RETROACTIVE
INCREASES
DECISION CONCERNING DEVELOPMENT OF FEDERAL PAY SCHEDULE ON THE BASIS
OF RATES WHICH EMPLOYEES IN THE PRIVATE SECTOR ARE PAID IN LIGHT OF A
CONTRACT WHICH WAS SIGNED AFTER THE FEDERAL SCHEDULE WAS ISSUED.
IT SHOULD BE NOTED THAT "PREVAILING RATE" UNDER THE CFWS IDENTIFIES
EXISTING WAGES AT THE TIME THE AREA WAGE SURVEY IS CONDUCTED AND THERE
IS NO BASIS TO CONSIDER PRIVATE SECTOR INCREASES AGREED UPON SUBSEQUENT
TO THE DATE OF ISSUANCE OF A CFWS SCHEDULE WHICH ARE RETROACTIVELY
EFFECTIVE TO A DATE PRIOR THERETO. ANY PAY ADJUSTMENTS TO GOVERNMENT
EMPLOYEES WOULD BE VIEWED AS "RETROACTIVE PAY INCREASES" CONTROLLED BY 5
U.S.C. 5343 WHICH SHALL BE MADE NOT LATER THAN A SPECIFIED NUMBER OF
DAYS AFTER THE WAGE SURVEY IS ORDERED TO BE MADE.
TO MR. JOHN F. GRINER:
THIS IS IN FURTHER REFERENCE TO YOUR LETTER DATED DECEMBER 28, 1970,
REFERENCE 14/CFWS, WHEREIN YOU RAISE CERTAIN QUESTIONS CONCERNING THE
EFFECTIVE DATE OF A COORDINATED FEDERAL WAGE SYSTEM (CFWS) PAY SCHEDULE
AND WHAT CONSTITUTES A "PREVAILING RATE" THEREUNDER.
YOU STATE THAT IN SOME WAGE AREAS CONTRACT NEGOTIATIONS IN A DOMINANT
INDUSTRY OR INDUSTRIES ARE IN PROGRESS AT THE TIME A CFWS SURVEY IS
CONDUCTED AND THE CONTRACT WHICH IS SIGNED AFTER THE CFWS SCHEDULE IS
ISSUED PROVIDES FOR RETROACTIVE INCREASE BACK TO OR PRIOR TO THE TIME
THE CFWS SURVEY WAS MADE. IN THESE CIRCUMSTANCES YOU SAY THE FEDERAL
PAY SCHEDULE IS DEVELOPED ON THE BASIS OF PAY RATES WHICH ARE LOWER THAN
THE EMPLOYEES IN THE MATCHED PRIVATE SECTOR JOBS WERE ACTUALLY PAID FOR
THE WORK PERFORMED AT THE TIME THE SURVEY WAS CONDUCTED. YOU CONCLUDE,
THEREFORE, THAT THE PAY SCHEDULE DOES NOT REFLECT WHAT IS THE PREVAILING
RATE AT THE TIME THE SURVEY WAS CONDUCTED.
"PREVAILING" MEANS GENERALLY CURRENT OR MOST FREQUENT AND IT IS,
THEREFORE, NECESSARY TO VIEW THE WORD "PREVAILING" AS IDENTIFYING
ACTUAL, EXISTING WAGES AT THE TIME THE AREA WAGE SURVEY IS CONDUCTED.
APPARENTLY, YOU HAVE IN MIND A SITUATION WHERE INCREASES IN PRIVATE
INDUSTRY ARE UNDER NEGOTIATION (WHICH WILL BE MADE RETROACTIVE) BUT NOT
ACTUALLY AGREED UPON UNTIL AFTER THE WAGE SURVEY BY THE GOVERNMENT HAS
BEEN COMPLETED AND WAGE SCHEDULES ISSUED. WE UNDERSTAND THAT
CONSIDERATION IS GIVEN TO WAGE INCREASES IN PRIVATE INDUSTRY IF AGREED
TO BY THE PARTIES PRIOR TO ISSUANCE OF A NEW SCHEDULE BY THE GOVERNMENT.
THE AUTHORITY FOR THE FIXING AND ADJUSTING OF THE RATES (5 U.S.C.
5341(A)) SPECIFIES "IN ACCORDANCE WITH PREVAILING RATES" AND, THEREFORE,
WE FAIL TO SEE ANY BASIS FOR CONSIDERATION OF PRIVATE SECTOR INCREASES
WHICH HAVE BEEN AGREED UPON SUBSEQUENT TO THE DATE OF ISSUANCE OF A CFWS
SCHEDULE BUT WHICH ARE RETROACTIVELY EFFECTIVE TO A DATE PRIOR THERETO.
AS TO THE GOVERNMENT WAGE SCHEDULES BEING ADJUSTED BACK TO THE DATE
AN INCREASE IN PRIVATE INDUSTRY BECAME EFFECTIVE, WE WOULD VIEW SUCH AN
ADJUSTMENT AS A "RETROACTIVE PAY INCREASE" WHICH IS CONTROLLED BY 5
U.S.C. 5343. THOSE STATUTORY PROVISIONS ARE TO THE EFFECT THAT
INCREASES IN RATES OF BASIC PAY FOR GOVERNMENT WAGE BOARD EMPLOYEES
SHALL BE MADE EFFECTIVE NOT LATER THAN A SPECIFIED NUMBER OF DAYS AFTER
THE WAGE SURVEY IS ORDERED TO BE MADE.
B-170181, FEB 22, 1971
BID PROTEST - EVALUATION PROCEDURES - ADEQUACY OF NEGOTIATIONS
DECISION THAT PROCUREMENT OF A CRIME STUDY REQUESTED BY THE BUREAU OF
NARCOTICS AND DANGEROUS DRUGS WHICH RESULTED IN A NEGOTIATED AWARD TO
RESEARCH TRIANGLE INSTITUTE WAS NOT PATENTLY ILLEGAL AS ALLEGED BY
PROTESTANT, TRACOR, INC.
THE CONCLUSION THAT THE RFP WAS DEFICIENT IN APPRISING INTERESTED
OFFERORS OF ALL ASPECTS OF EVALUATION WHICH WOULD AFFECT THE ULTIMATE
CHOICE OF THE CONTRACTING AGENCY DOES NOT REQUIRE GAO TO QUESTION THE
AWARD OF THE CONTRACT. HOWEVER, IT IS ALSO CLEAR THAT PROTESTANT'S
PROPOSAL AS ORIGINALLY SUBMITTED WAS WITHIN A COMPETITIVE RANGE AND
DISCUSSIONS OR NEGOTIATIONS SHOULD NOT HAVE BEEN CONDUCTED SOLELY WITH
RTI THUS VIOLATING REGULATIONS FOR COMPETITIVE NEGOTIATION. WHILE GAO
CANNOT CONCLUDE THAT THE CONSUMMATION OF THE AWARD WAS PATENTLY ILLEGAL
APPROPRIATE ACTION SHOULD BE TAKEN TO INSURE THAT FUTURE PROCUREMENTS
ARE FREE OF THE DEFECTS WHICH APPEAR IN THE PRESENT CASE.
TO THE ATTORNEY GENERAL:
WE REFER TO LETTERS DATED JULY 17 AND SEPTEMBER 3, 1970, FROM THE
DIRECTOR, BUREAU OF NARCOTICS AND DANGEROUS DRUGS (BNDD), AND
DOCUMENTATION SUPPLIED INFORMALLY BY THE CHIEF, CONTRACTING BRANCH,
BNDD, ON DECEMBER 23, 1970, REPORTING ON THE PROTEST OF TRACOR, INC.
(TRACOR), THAT THE AWARD OF A COST-PLUS-A-FIXED-FEE CONTRACT TO RESEARCH
TRIANGLE INSTITUTE (RTI) UNDER REQUEST FOR PROPOSALS (RFP) NO. J-70-35
WAS "ILLEGAL" AND THE RESULTING CONTRACT "INVALID."
THE RFP WAS ISSUED PURSUANT TO A CONTRACTING OFFICER'S DETERMINATION
AND FINDINGS UNDER 41 U.S.C. 252(C)(10), AS IMPLEMENTED BY FEDERAL
PROCUREMENT REGULATIONS (FPR) 1-3.210(A)(13), WHICH AUTHORIZES THE
NEGOTIATION OF CONTRACTS FOR SERVICES FOR WHICH IT IS IMPRACTICABLE TO
OBTAIN COMPETITION. THE CIRCUMSTANCES LEADING UP TO THE AWARD OF A
CONTRACT TO RTI WERE REPORTED AS FOLLOWS:
" *** ON MAY 13, 1970, THE BUREAU'S ADMINISTRATIVE SERVICES DIVISION
ISSUED A REQUEST FOR PROPOSAL (RFP) NO. J-70-35 (ON A
COST-PLUS-A-FIXED-FEE BASIS) TO FIVE PROPOSED OFFERORS *** THE RFP WAS
FOR A STUDY TO DETERMINE THE RATE OF MAJOR CRIMES COMMITTED BY DRUG
ADDICTS VIS-A-VIS THE RATE OF SUCH CRIMES COMMITTED BY NON-ADDICTS.
BECAUSE OF THE UNIQUE NATURE OF THE STUDY CONTEMPLATED IN THE RFP, A
DETAILED COVER LETTER WAS ALSO SENT TO THE PROPOSED OFFERORS *** THE TWO
FIRMS RESPONDING TO THE RFP WERE TRACOR, INC. AND RESEARCH TRIANGLE
INSTITUTE (RTI). A PROPOSER'S CONFERENCE WAS HELD WITH REPRESENTATIVES
OF THE TWO FIRMS ON MAY 20, 1970. NO WRITTEN QUESTIONS WERE SUBMITTED
BY EITHER OFFEROR PRIOR TO THE PROPOSER'S CONFERENCE. AT THE
CONFERENCE, GENERAL QUESTIONS WERE RAISED REGARDING THE PROPOSED
PROCUREMENT. HOWEVER, THE QUESTIONS DID NOT REQUIRE AN AMENDMENT TO THE
RFP.
"PROPOSALS WERE RECEIVED FROM BOTH FIRMS ON MAY 27, 1970. THE
ORIGINAL TOTAL COST AND FIXED FEE PROPOSAL SUBMITTED BY RTI WAS
$269,440; THE PROPOSAL SUBMITTED BY TRACOR WAS FOR $198,125. ON MAY
28, BOTH PROPOSALS WERE FORWARDED TO THE BUREAU'S DRUG SCIENCES DIVISION
FOR TECHNICAL EVALUATION. THE TECHNICAL EVALUATION, USING THE SAME
CRITERIA FOR BOTH PROPOSALS, RESULTED IN A TECHNICAL EVALUATION OF 90.5
FOR THE PROPOSAL SUBMITTED BY RTI AND 71 FOR TRACOR ***
"AS A RESULT OF THE TECHNICAL EVALUATION OF THE PROPOSAL SUBMITTED BY
RTI, NEGOTIATIONS WERE INITIATED WITH THIS FIRM TO ACQUIRE REVISED COST
FIGURES. THE REVISED PROPOSAL SUBMITTED BY RTI (WITH A
COST-PLUS-A-FIXED-FEE OF $257,791) WAS AGAIN EVALUATED FOR TECHNICAL
STANDARDS AND FOUND TO BE SATISFACTORY *** THE SECOND TECHNICAL
EVALUATION WAS PERFORMED BY A DIFFERENT TECHNICAL SPECIALIST THAN THE
ONE WHO HAD DONE THE ORIGINAL TECHNICAL EVALUATION.
"AT THE REQUEST OF TRACOR, A MEETING WAS HELD WITH REPRESENTATIVES OF
THAT FIRM TO DISCUSS THEIR PROPOSAL TO THE RFP *** SUBSEQUENTLY, TRACOR
SUBMITTED A REVISED PROPOSAL (WITH A COST-PLUS-A-FIXED-FEE OF $202,690)
WHICH WAS ALSO GIVEN A TECHNICAL EVALUATION *** AS IN THE CASE OF RTI'S
SECOND PROPOSAL, THE SECOND TECHNICAL EVALUATION OF THE TRACOR PROPOSAL
WAS PERFORMED BY A DIFFERENT TECHNICAL SPECIALIST THAN THE ONE WHO HAD
DONE THE ORIGINAL TECHNICAL EVALUATION.
"THE NET RESULT OF THE SECOND TECHNICAL EVALUATIONS OF THE PROPOSALS
SUBMITTED BY BOTH FIRMS WAS THAT THE RTI PROPOSALS CLEARLY INDICATED A
TECHNICAL SUPERIORITY OVER THOSE SUBMITTED BY TRACOR (RTI - 87, TRACOR -
73). CONSEQUENTLY, RTI WAS AWARDED THE CONTRACT ON JUNE 26, 1970 *** "
TURNING NOW TO THE FIRST OF THE FOUR BASES FOR PROTEST, TRACOR
CONTENDS THAT THE "RFP FAILED TO SPECIFY THE WEIGHTS WHICH WOULD BE USED
IN EVALUATING PROPOSALS."
WE NOTE IN THIS RESPECT THAT ARTICLE VI OF THE RFP, ENTITLED
"STANDARDS FOR EVALUATION OF PROPOSALS," LISTS THE EVALUATION FACTORS
APPLICABLE TO THE SELECTION OF A CONTRACTOR UNDER 2 HEADINGS - NON-PRICE
FACTORS AND PRICE EVALUATION FACTOR. HOWEVER, NO "WEIGHTS" WERE
PRESCRIBED OR STATEMENTS INCLUDED WHICH COULD BE REASONABLY CONSTRUED TO
HAVE ADVISED OFFERORS OF THE RELATIVE IMPORTANCE TO BE ATTACHED TO THE
STIPULATED EVALUATION FACTORS. IN 49 COMP. GEN. 229, 230 (1969), IN
CONSONANCE WITH OUR DECISIONS WHEREIN WE STATED THAT SOUND PROCUREMENT
POLICY DICTATES THAT OFFERORS BE INFORMED NOT ONLY OF ALL EVALUATION
FACTORS BUT ALSO OF THE RELATIVE IMPORTANCE OR WEIGHT OF EACH FACTOR, WE
STATED:
" *** WHILE WE HAVE NEVER HELD, AND DO NOT NOW INTEND TO DO SO, THAT
ANY MATHEMATICAL FORMULA IS REQUIRED TO BE USED IN THE EVALUATION
PROCESS, WE BELIEVE THAT WHEN IT IS INTENDED THAT NUMERICAL RATINGS WILL
BE EMPLOYED OFFERORS SHOULD BE INFORMED OF AT LEAST THE MAJOR FACTORS TO
BE CONSIDERED AND THE BROAD SCHEME OF SCORING TO BE EMPLOYED. WHETHER
OR NOT NUMERICAL RATINGS ARE TO BE USED, WE BELIEVE THAT NOTICE SHOULD
BE GIVEN AS TO ANY MINIMUM STANDARDS WHICH WILL BE REQUIRED AS TO ANY
PARTICULAR ELEMENT OF EVALUATION, AS WELL AS REASONABLY DEFINITE
INFORMATION AS TO THE DEGREE OF IMPORTANCE TO BE ACCORDED TO PARTICULAR
FACTORS IN RELATION TO EACH OTHER. *** "
SEE ALSO, B-169645, JULY 24, 1970, 50 COMP. GEN. ___; B-169429,
AUGUST 21, 1970, 50 COMP. GEN. ___; AND FPR 1-3.802(C). HOWEVER, AS
WILL BE NOTED FROM A READING OF THOSE DECISIONS, THE FAILURE TO INFORM
OFFERORS OF EVALUATION CRITERIA AND THEIR RELATIVE WEIGHTS WOULD NOT
REQUIRE OUR OFFICE TO QUESTION THE AWARD OF THE CONTRACT.
WE NEXT TURN TO TRACOR'S CONTENTION THAT BNDD FAILED TO CONDUCT
MEANINGFUL NEGOTIATIONS WHICH "EFFECTIVELY DEPRIVED TRACOR OF ANY REAL
CHANCE TO COMPETE FOR THIS CONTRACT." WE NOTE FROM THE RECORD THAT BNDD
DID NOT CONDUCT NEGOTIATIONS OR DISCUSSIONS WITH TRACOR SUBSEQUENT TO
THE TECHNICAL EVALUATION OF ITS PROPOSAL, EXCEPT "UPON TRACOR'S
INSISTENCE." THE BASIS FOR DISCUSSIONS ONLY WITH RTI IS REPORTED AS
FOLLOWS:
"THE DIFFERENCE IN TECHNICAL COMPETENCE AND RESOURCES OFFERED FOR
APPLICATION TO THE CONTRACT WORK PROJECT BETWEEN THE TWO OFFERORS WAS SO
GREAT THAT IT WAS DECIDED TO NEGOTIATE INITIALLY WITH RTI *** FOR THE
FOLLOWING REASONS:
"1. RTI HAD SUBMITTED THE PROPOSAL MOST TECHNICALLY ACCEPTABLE AND
THE ONLY ONE WHICH APPEARED TO FULLY SATISFY THE NEEDS OF THE BUREAU.
"2. A CONTRACT UTILIZING THE FUNDS ALLOTTED TO THE PROPOSED WORK
PROJECT WOULD HAVE TO BE AWARDED BY JUNE 30, 1970, AND TIME WAS OF THE
ESSENCE.
"TO ALLOW FOR POSSIBLE REVISION OF PROPOSALS BY OFFERORS, AND
EVALUATION AND NEGOTIATION OF THESE PROPOSALS, IT WAS OF THE UTMOST
IMPORTANCE THAT PROPOSALS BE SUBMITTED INITIALLY ON THE MOST FAVORABLE
TERMS THAT COULD BE OFFERED TO THE GOVERNMENT (AS REQUIRED BY THE SF-33A
AND FORWARDING LETTER OF THE RFP) IN ORDER TO UTILIZE THE TIME REMAINING
FOR FINAL NEGOTIATION OF PROPOSALS IN THE MOST EFFECTIVE MANNER
POSSIBLE. THE INITIAL TRACOR PROPOSAL WAS NOT SUBMITTED ON THE MOST
FAVORABLE TERMS TO THE GOVERNMENT THAT COULD BE OFFERED, AS WAS LATER
ADMITTED BY TRACOR DURING THE MEETING OF JUNE 18, 1970 *** AND WAS
DEMONSTRATED BY SUBMISSION OF A REVISED PROPOSAL WHICH AGAIN WAS NOT
SUBMITTED ON THE BEST POSSIBLE TERMS TO THE GOVERNMENT AS INDICATED BY
THE TECHNICAL EVALUATION OF SAME. ON THE OTHER HAND, THE INITIAL RTI
PROPOSAL WAS EXTREMELY SATISFACTORY IN EVERY RESPECT, AND NEGOTIATIONS
WERE, THEREFORE, CONDUCTED WITH RTI PRINCIPALLY TO EFFECT DESIRED
REDUCTIONS IN THE PROPOSED LEVELS OF EFFORT AND RESULTANT REDUCTIONS IN
THEIR COST PROPOSAL, WHERE FEASIBLE AND PROPER *** "
THE FIRST PARAGRAPH OF ARTICLE VI OF THE RFP STATES, IN PERTINENT
PART, AS FOLLOWS:
"AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS MAY
BE CONDUCTED WITH ALL RESPONSIVE OFFERORS WHO HAVE SUBMITTED PROPOSALS
WHICH ARE TECHNICALLY AND OTHERWISE ADEQUATE AND WITHIN COMPETITIVE
PRICE RANGE. *** " THIS PARAGRAPH IS IN CONSONANCE WITH THE LANGUAGE OF
FPR 1-3.805-1(A) WHICH REPEATS THE COMPETITIVE NEGOTIATION REQUIREMENTS
OF 10 U.S.C. 2304(G) AS IMPLEMENTED BY ARMED SERVICES PROCUREMENT
REGULATION 3-805, AS FOLLOWS:
"(A) AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS
SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMITTED PROPOSALS
WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED, EXCEPT
THAT THIS REQUIREMENT NEED NOT NECESSARILY BE APPLIED TO:
"(5) PROCUREMENTS IN WHICH IT CAN BE CLEARLY DEMONSTRATED FROM THE
EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE WITH
THE PRODUCT OR SERVICE THAT ACCEPTANCE OF THE MOST FAVORABLE INITIAL
PROPOSAL WITHOUT DISCUSSION WOULD RESULT IN A FAIR AND REASONABLE PRICE:
PROVIDED, THAT THE REQUEST FOR PROPOSALS CONTAINS A NOTICE TO ALL
OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF
PROPOSALS RECEIVED AND, HENCE, THAT PROPOSALS SHOULD BE SUBMITTED
INITIALLY ON THE MOST FAVORABLE TERMS, FROM A PRICE AND TECHNICAL
STANDPOINT, WHICH THE OFFEROR CAN SUBMIT TO THE GOVERNMENT *** " THE
DEPUTY CHIEF, DRUG SCIENCES DIVISION, BNDD, IN HER JUNE 22, 1970
EVALUATION OF TRACOR'S REVISED PROPOSAL ADMITS THAT TRACOR'S INITIAL
PROPOSAL WAS TECHNICALLY ACCEPTABLE, AS DOES HER MEMORANDUM OF THE
"NEGOTIATIONS" EVENTUALLY HELD WITH TRACOR. HENCE, IT APPEARS FROM THE
RECORD THAT TRACOR'S PROPOSAL AS INITIALLY SUBMITTED WAS WITHIN A
COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. SUCH BEING THE
CASE, DISCUSSIONS OR NEGOTIATIONS SHOULD NOT HAVE BEEN CONDUCTED SOLELY
WITH RTI ON THE BASIS THAT IT HAD SUBMITTED THE MOST ADVANTAGEOUS
INITIAL PROPOSAL. THE FACT THAT COST MAY NOT HAVE BEEN THE CONTROLLING
FACTOR IN THE AWARD OF THE CONTRACT TO RTI WHICH HAD SUBMITTED THE MOST
ADVANTAGEOUS PROPOSAL DID NOT RELIEVE THE PROCUREMENT AGENCY FROM ITS
OBLIGATION TO CONDUCT NEGOTIATIONS WITH TRACOR WHICH HAD SUBMITTED A
COMPETITIVE PROPOSAL. SEE B-169429, SUPRA; 45 COMP. GEN. 417, 426, 427
(1966); 46 ID. 191, 192 (1966).
THE RFP AND ITS INTRODUCTORY LETTER, PURSUANT TO FPR 1-3.805-1(A)(5),
PERMITTED AWARD TO BE MADE ON AN INITIAL PROPOSAL BASIS WITHOUT
DISCUSSION. HOWEVER, WHERE, AS HERE, ONCE DISCUSSIONS HAVE TAKEN PLACE
WITH ANY OFFEROR WHO HAS MADE A REVISION IN PRICE, AWARD MAY NO LONGER
BE MADE ON THE BASIS OF AN INITIAL PROPOSAL; RATHER, DISCUSSIONS MUST
BE CONDUCTED WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE. SEE
B-169148, OCTOBER 6, 1970, 50 COMP. GEN. ___.
AT TRACOR'S INSISTENCE, A MEETING WAS HELD BETWEEN BNDD AND TRACOR ON
JUNE 18, 1970, RESULTING IN THE SUBMISSION OF A REVISED PROPOSAL.
HOWEVER, TRACOR CLAIMS THAT THE MEETING DID NOT CONSTITUTE MEANINGFUL
NEGOTIATIONS BECAUSE:
"THE 'DISCUSSIONS' WHICH WERE IN FACT HELD FELL FAR SHORT OF
QUALIFYING FOR THE NAME 'NEGOTIATIONS.' ESSENTIALLY THE 'DISCUSSIONS'
CONSISTED OF GOING THROUGH THE MOTIONS OF TALKING TO TRACOR WITHOUT
ENDANGERING THE PREDETERMINED SELECTION OF RTI. VAGUE, GENERALIZED
STATEMENTS WERE MADE TO TRACOR TO THE EFFECT THAT ITS PROPOSAL, THOUGH
TECHNICALLY ACCEPTABLE, WAS INFERIOR TO RTI'S. THE BUREAU REFUSED TO
IDENTIFY SPECIFIC ALLEGED DEFICIENCIES WITH ENOUGH PARTICULARITY TO
PERMIT TRACOR A FAIR CHANCE TO REMEDY THEM. INDEED, THE BUREAU'S OWN
INTERNAL EVALUATION EVEN FAILS TO IDENTIFY SPECIFIC DEFICIENCIES WITH
PARTICULARITY, *** SO IT IS OBVIOUS THAT SPECIFIC DEFICIENCIES COULD NOT
HAVE BEEN STATED TO TRACOR. ***
"FURTHERMORE, THE BUREAU NEVER MADE ANY ATTEMPT TO DETERMINE THROUGH
DISCUSSIONS WHETHER TRACOR'S LOWER COST ESTIMATE WAS REALISTIC. DR.
HARWOOD'S JUNE 22, 1970 MEMORANDUM *** STATES: 'THE TRACOR PROPOSAL IS
SLIGHTLY LOWER, BUT IN THE ABSENCE OF DETAIL REGARDING THE ANALYSIS IT
MAY NOT REALLY BE LOWER THAN THAT OF THE OTHER RESPONDENT.' IN THE FIRST
PLACE, THE DIFFERENCE BETWEEN $269,440 (RTI) AND $198,125 (TRACOR) IS
MORE THAN SLIGHT.* IT ALSO SEEMS TO US HIGHLY IMPROPER FOR THE BUREAU TO
SPECULATE WHETHER TRACOR'S ESTIMATE WAS REALISTIC WHEN A SIMPLE
DISCUSSION WITH TRACOR WOULD READILY HAVE DISCLOSED WHETHER TRACOR HAD
ALREADY ACCOUNTED, IN ITS ESTIMATED COST, FOR ADEQUATE ANALYSIS.
FINALLY, TRACOR DID IN FACT INCLUDE ANALYSIS IN ITS PROPOSAL ***
"*RTI'S ESTIMATED COST WAS $71,315 HIGHER THAN TRACOR'S, I.E., 35.96
PERCENT MORE." BNDD'S ACCOUNT OF THE JUNE 18 MEETING IS AS FOLLOWS:
"MR. RUDMOSE (TRACOR) STATED THAT THE PROPOSAL SUBMITTED WAS NOT
DETAILED DUE TO THE COMPANY POLICY ALLOWING, DUE TO ECONOMY PROGRAMS,
LIMITED AMOUNTS OF TIME AND MONEY IN PREPARATION OF THEIR SUBMISSION.
THIS WAS NOTWITHSTANDING THE FACT THAT THE SF33A (RFP) AND FORWARDING
LETTER FOR SAME ADVISED ALL PROPOSERS THAT THE GOVERNMENT WAS RESERVING
THE RIGHT TO REJECT ANY OR ALL PROPOSALS RECEIVED IF SUCH ACTION WAS
DEEMED TO BE IN THE BEST INTERESTS OF THE GOVERNMENT AND ACCORDINGLY, IT
WAS OF PRIMARY IMPORTANCE THAT PROPOSALS BE SUBMITTED INITIALLY ON THE
MOST FAVORABLE TERMS TO THE GOVERNMENT. IT WAS FURTHER STATED BY MR.
RUDMOSE THAT HE EXPECTED TO ENHANCE TRACOR'S PROPOSAL DURING A
SUBSEQUENT CONFERENCE; HENCE, THIS MEETING.
"IN RESPONSE TO QUESTIONS, BNDD PERSONNEL ADVISED TRACOR THAT, WHILE
THEIR PROPOSAL WAS TECHNICALLY FEASIBLE, IT DID NOT FULLY, FROM A
TECHNICAL STANDPOINT, SATISFY THE NEEDS OF THE BUREAU AND WAS NOT
COMPARABLE TO THE PROPOSAL RECEIVED FROM RTI. SPECIFIC AREAS POINTED
OUT WERE ORIGINALITY, CONCEPTUALIZATION OF THE PROBLEM, METHODOLOGY, AND
TRAINING AND EXPERIENCE OF THE PROFESSIONAL STAFF. IT WAS IMPOSSIBLE TO
EXPLAIN THE DIFFERENCE IN THE TWO PROPOSALS IN GREAT DETAIL WITHOUT
DIVULGING METHODS THAT WERE ORIGINATED BY RTI AND THUS, DISCUSSIONS
REGARDING THE WEAK POINTS OF TRACOR'S PROPOSAL WERE GENERAL IN NATURE.
HOWEVER, MRS. BERG DID DISCUSS THE TECHNICAL EVALUATION RATING FACTORS
USED BY HER RELATIVE TO TRACOR'S AND RTI'S PROPOSALS, AND CITED THE
TECHNICAL POINTS WHICH LED TO DIFFERENTIAL POINT TOTALS ON THE RATING
SCALE, FOR BOTH PROPOSALS.
"GENERAL DISCUSSIONS REGARDING THE MATTER THEN ENSUED UNTIL AGREEMENT
WAS REACHED THAT TRACOR WOULD SUBMIT A REVISED PROPOSAL SUPPLYING A MORE
DETAILED APPROACH ESPECIALLY IN THE AREAS DISCUSSED DURING THE MEETING.
THIS REVISED PROPOSAL WAS REQUIRED TO BE RECEIVED BY BNDD, MR. SINGER,
BY JUNE 22, 1970 BECAUSE TIME WAS OF THE ESSENCE DUE TO THE CLOSE
PROXIMITY OF THE FISCAL YEAR END, AND AWARD OF THE CONTRACT WAS TO BE
MADE AS SOON AS POSSIBLE."
IN ADDITION, THE DEPUTY CHIEF, IN HER JUNE 22 MEMORANDUM DISCUSSED
THE JUNE 18 MEETING:
"IN RESPONSE TO QUESTIONS BNDD TOLD THE TRACOR GROUP THAT THEIR
PROPOSAL WAS RESPONSIVE TO THE RFP AND THAT IT WAS TECHNICALLY WITHIN
THE LIMIT OF BNDD NEEDS. HOWEVER, IN COMPARISON TO THE PROPOSAL
SUBMITTED BY THE OTHER OFFEROR, THE TRACOR PROPOSAL HAD SCORED LESS
POINTS WHEN EVALUATED INDEPENDENTLY BY TWO DIFFERENT MEMBERS OF THE
PROFESSIONAL STAFF OF THE DIVISION OF DRUG SCIENCES. THE SPECIFIC AREAS
WERE POINTED OUT AS: ORIGINALITY, CONCEPTUALIZATION OF THE PROBLEM,
METHODOLOGY, AND TRAINING AND EXPERIENCE OF THE PROFESSIONAL STAFF.
"TRACOR EXPLAINED THAT THE PROPOSAL WHICH THEY SUBMITTED WAS NOT
DETAILED BECAUSE COMPANY POLICY ALLOWS THEM TO SPEND ONLY A CERTAIN
AMOUNT OF TIME PREPARING THE SUBMISSION. THEY EXPECT TO ENHANCE THEIR
PROPOSAL BY A CONFERENCE AND SO THEY REQUESTED THIS MEETING.
"MUCH DISCUSSION CENTERED AROUND THE WEAK POINTS OF THE TRACOR
PROPOSAL. MRS. BERG POINTED OUT THE TECHNICAL POINTS WHICH LED TO
DIFFERENTIAL POINT TOTALS ON THE RATING SCALE FOR THE TWO PROPOSALS.
"THE MEETING ADJOURNED AT ABOUT 4:15 P.M., WITH THE UNDERSTANDING
THAT TRACOR WOULD SUBMIT BY MONDAY, 22 JUNE, 1970, A REVISED PROPOSAL
SUPPLYING MORE DETAIL AND A MORE SOPHISTICATED APPROACH TO THE POINTS
RAISED DURING THE DISCUSSION."
IN B-169429, SUPRA, WE DISCUSSED THE SCOPE AND NTURE OF DISCUSSIONS
AS CONTEMPLATED BY FPR 1-3.805-1:
"FPR 1-3.805-1 REQUIRES THAT DISCUSSIONS BE CONDUCTED WITH ALL
OFFERORS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED.
IT IS A WELL-ESTABLISHED PRINCIPLE IN FEDERAL PROCUREMENTS THAT SUCH
DISCUSSIONS MUST BE MEANINGFUL AND FURNISH INFORMATION TO ALL OFFERORS
WITHIN THE COMPETITIVE RANGE AS TO THE AREAS IN WHICH THEIR PROPOSALS
ARE BELIEVED TO BE DEFICIENT SO THAT COMPETITIVE OFFERORS ARE GIVEN AN
OPPORTUNITY TO FULLY SATISFY THE GOVERNMENT'S REQUIREMENTS. 47 COMP.
GEN. 336 (1967). WHEN NEGOTIATIONS ARE CONDUCTED, THE FACT THAT INITIAL
PROPOSALS MAY BE RATED AS ACCEPTABLE DOES NOT INVALIDATE THE NECESSITY
FOR DISCUSSIONS OF THEIR WEAKNESSES, EXCESSES OR DEFICIENCIES IN ORDER
THAT THE CONTRACTING OFFICER MAY OBTAIN THAT CONTRACT WHICH IS MOST
ADVANTAGEOUS TO THE GOVERNMENT. WE HAVE STATED THAT DISCUSSIONS OF THIS
NATURE SHOULD BE CONDUCTED WHENEVER IT IS ESSENTIAL TO OBTAIN
INFORMATION NECESSARY TO EVALUATE A PROPOSAL OR TO ENABLE THE OFFEROR TO
UPGRADE THE PROPOSAL. THUS, WHERE AN OFFEROR FAILED TO PASS A BENCHMARK
TEST, THAT FACTOR ALONE SHOULD NOT HAVE PRECLUDED DISCUSSIONS TO
DETERMINE WHETHER THE PROPOSAL COULD BE IMPROVED. 47 COMP. GEN. 29
(1967). MOREOVER, WE HAVE HELD THAT MEANINGFUL DISCUSSIONS MUST BE
CONDUCTED WITH CONCERNS IN A COMPETITIVE RANGE EVEN IN THE NEGOTIATION
OF RESEARCH AND DEVELOPMENT CONTRACTS WHERE THE OFFEROR'S TECHNICAL
APPROACH AND EXPERIENCE ARE OF CRITICAL IMPORTANCE, AND CONFORMITY WITH
DETAILED SPECIFICATIONS IS NOT THE STANDARD FOR AWARD. B-168485, MARCH
30, 1970."
WE CONCLUDE FROM OUR REVIEW OF THE RECORD THAT THE JUNE 18 MEETING
WITH TRACOR DID CONSTITUTE NEGOTIATION WITHIN THE PREVIEW OF FPR SEC.
1-3.805-1, ESPECIALLY SINCE TRACOR DID SUBMIT A REVISED PROPOSAL
APPARENTLY DIRECTED TO SEVERAL OF THE MATTERS DISCUSSED AT THE JUNE 18
MEETING. UNFORTUNATELY, IN VIEW OF THE CONFLICTING ACCOUNTS OF THAT
MEETING, AND IN VIEW OF THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING
TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS OF THE DIRECTOR'S REPORT,
WE MUST RESOLVE THESE CONFLICTS IN FAVOR OF BNDD. B-170142, OCTOBER 22,
1970. IN ADDITION, WE HAVE RECOGNIZED THAT THE NEGOTIATION PROCESS IS
OF NECESSITY FLEXIBLE IN THAT CONTRACTING OFFICIALS HAVE WIDE DISCRETION
IN DETERMINING THE NATURE AND SCOPE OF NEGOTIATIONS. SEE 47 COMP. GEN.
279, 284 (1967). WITH THAT IN MIND, WE CANNOT SAY THAT BNDD DID NOT
AFFORD TRACOR AN EQUITABLE OPPORTUNITY TO BETTER ITS PROPOSAL FROM A
TECHNICAL STANDPOINT DURING THE JUNE 18 MEETING.
TRACOR ALSO ARGUES THAT NO COMMON CLOSING DATE WAS ESTABLISHED TO
EFFECTIVELY PRECLUDE FURTHER NEGOTIATIONS. IT CONTENDS THAT:
" *** THERE MAY EVEN HAVE BEEN NEGOTIATIONS WITH RTI AFTER THE
MEETING WITH TRACOR AND AFTER TRACOR'S SUBMISSION OF ITS TECHNICAL
ADDENDUM AND REVISED COST PROPOSAL. BE THAT AS IT MAY HOWEVER, THE
ABSENCE OF A COMMON CLOSING DATE IS ILLEGAL AND PREJUDICIAL, AS HELD BY
NUMEROUS DECISIONS OF YOUR OFFICE, *** "
IT IS OBVIOUS FROM THE RECORD THAT THERE WAS A FAILURE TO ESTABLISH A
COMMON CUTOFF DATE. THE FAILURE TO NEGOTIATE WITH TRACOR, INITIALLY,
OBVIATED THE NECESSITY FOR THE ESTABLISHMENT OF A COMMON CUTOFF DATE.
MOREOVER, THE RECORD INDICATES THAT RTI WAS NOT AFFORDED AN OPPORTUNITY
TO NEGOTIATE WITH BNDD SUBSEQUENT TO THE JUNE 18 NEGOTIATION MEETING
WITH TRACOR BECAUSE THE LAST DISCUSSIONS WITH RTI OCCURRED ON JUNE 12,
1970.
LASTLY, TRACOR CONTENDS THAT THE EVALUATION OF THE PROPOSALS
RESULTING IN THE AWARD OF THE CONTRACT TO RTI WAS DEFICIENT IN THAT (1)
BNDD FAILED TO CONSIDER TRACOR'S LOWER ESTIMATED COST; AND (2) THAT
BNDD'S EVALUATION OF THE TRACOR PROPOSAL AS INFERIOR WAS ARBITRARY AND
CAPRICIOUS. WE DO NOT AGREE THAT BNDD FAILED TO GIVE TRACOR'S ESTIMATED
COST ANY CONSIDERATION IN ITS EVALUATION. THE JUNE 22 EVALUATION BY THE
DEPUTY CHIEF OF TRACOR'S REVISED PROPOSAL CONTAINS THE FOLLOWING
STATEMENT:
" *** TRACOR DOES NOT PRESENT THE MOST ACCEPTABLE TERMS. THE TRACOR
PROPOSAL IS SLIGHTLY LOWER, BUT IN THE ABSENCE OF DETAIL REGARDING THE
ANALYSIS IT MAY NOT REALLY BE LOWER THAN THAT OF (RTI) *** "
WE CAN UNDERSTAND TRACOR'S CONCERN THAT THE ESTIMATED COST
DIFFERENTIAL IS "MORE THAN SLIGHT" AND THAT "IT ALSO SEEMS TO US HIGHLY
IMPROPER FOR (BNDD) *** TO SPECULATE WHETHER TRACOR'S ESTIMATE WAS
REALISTIC WHEN A SIMPLE DISCUSSION WITH TRACOR WOULD READILY HAVE
DISCLOSED WHETHER TRACOR HAD ALREADY ACCOUNTED, IN ITS ESTIMATED COST,
FOR ADEQUATE ANALYSIS." BNDD JUSTIFIES THE FAILURE TO CONTINUE
NEGOTIATIONS BY STATING:
"AS A RESULT OF THE EXTREMELY SHORT TIME PERIOD REMAINING WITHIN
WHICH TO AWARD A CONTRACT, IT WAS DECIDED THAT NO FURTHER NEGOTIATIONS
WOULD BE CONDUCTED WITH TRACOR AND THE CONTRACT WOULD BE AWARDED TO RTI.
*** " WE BELIEVE THAT THE FOREGOING DOES NOT JUSTIFY THE FAILURE TO
EXTEND NEGOTIATION OPPORTUNITY TO TRACOR, SINCE, WE BELIEVE THAT
"DETAIL" RELATING TO ITS COST PROPOSAL COULD HAVE BEEN FURNISHED ON A
TIMELY BASIS HAD MEANINGFUL DISCUSSIONS BEEN CONDUCTED. SEE 47 COMP.
GEN. 336, 342, 343 (1967).
CONCERNING TRACOR'S STRONG DISAGREEMENT WITH THE DETERMINATION THAT
ITS PROPOSAL WAS TECHNICALLY INFERIOR TO RTI, WE HAVE CAREFULLY REVIEWED
THE RECORD OF NEGOTIATIONS AND WE FIND NO SUBSTANTIAL BASIS TO QUESTION
THE EVALUATION OF ITS TECHNICAL PROPOSAL. SEE B-170534, OCTOBER 6,
1970. BUT WE CANNOT CONCLUDE THAT THIS PROCUREMENT, AS CONSUMMATED, MET
ALL THE REQUIREMENTS IMPOSED BY REGULATION FOR "COMPETITIVE"
NEGOTIATION. AS INDICATED ABOVE, WE BELIEVE THAT THE RFP WAS DEFICIENT
IN APPRISING INTERESTED OFFERORS OF ALL ASPECTS OF EVALUATION WHICH
WOULD AFFECT THE ULTIMATE CHOICE OF BNDD. ALSO, THE CONDUCT OF
NEGOTIATIONS DISCLOSED, IN SEVERAL RESPECTS, LESS THAN AN ARTFUL
EXHIBITION OF SOUND NEGOTIATION TECHNIQUES. HOWEVER, AS A MATTER OF
LAW, WE ARE UNABLE TO CONCLUDE THAT THE CONSUMMATION OF THE AWARD TO RTI
WAS PATENTLY ILLEGAL. WE VIEW THE AWARD TO RTI AS REFLECTING A
DETERMINATION THAT THE COST PREMIUM INVOLVED WAS JUSTIFIED TAKING INTO
ACCOUNT THE SIGNIFICANT TECHNICAL SUPERIORITY OF RTI'S PROPOSAL. SEE
B-169148, SUPRA. THEREFORE, WE STRONGLY RECOMMEND THAT APPROPRIATE
ACTION BE TAKEN TO INSURE THAT IN FUTURE PROCUREMENTS THE DEFECTS OF
THIS PROCUREMENT ARE AVOIDED.
B-170246(1), FEB 22, 1971
BID PROTEST - BIDDER RESPONSIBILITY - LACK OF INTEGRITY
DECISION DENYING PROTEST BY SECOND LOW BIDDER, OLD DOMINION DAIRY
PRODUCTS, INC., AGAINST CONTRACT FOR PRODUCTION AND SUPPLY OF
RECONSTITUTED FILLED MILK AND RELATED DAIRY PRODUCTS FOR U.S. ARMED
FORCES IN KOREA ISSUED BY THE U.S. ARMY AND AWARD TO LOW BIDDER,
INTERNATIONAL DAIRY ENGINEERING COMPANY.
PROTEST BASED ON CONTENTION THAT THE CONTRACTING OFFICER COULD NOT
PROPERLY FIND SUCCESSFUL BIDDER TO BE RESPONSIBLE BECAUSE THE MANAGER OF
AN AFFILIATE WROTE AN IMPROPER LETTER TO THE GOVERNMENT OF THE REPUBLIC
OF CHINA WHICH MAY HAVE VIOLATED THE LOGAN ACT, 18 U.S.C. 953, IS
WITHOUT MERIT BECAUSE PRIOR CRIMINAL ACTIVITIES, EVEN IN CONTRACTOR'S
DEALINGS WITH THE GOVERNMENT DO NOT COMPEL A FINDING OF
NONRESPONSIBILITY, AND GAO HAS ADOPTED THE RULE THAT IT WILL NOT
SUBSTITUTE ITS JUDGMENT FOR THAT OF THE AGENCY UNLESS IT IS CLEARLY
SHOWN THAT THE AGENCY'S DETERMINATION WAS ARBITRARY OR NOT BASED ON
SUBSTANTIAL EVIDENCE. THE PROTEST IS THEREFORE DENIED.
TO KANE, SHULMAN & SCHLEI:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 6, 1970, AND
SUBSEQUENT CORRESPONDENCE, RELATIVE TO YOUR PROTEST ON BEHALF OF OLD
DOMINION DAIRY PRODUCTS, INC. (OLD DOMINION), AGAINST THE AWARD OF A
CONTRACT TO INTERNATIONAL DAIRY ENGINEERING COMPANY (INDENCO) OR ANY OF
ITS AFFILIATES, UNDER REQUEST FOR PROPOSAL NO. DAJB17-70-R-0199. THIS
PROCUREMENT IS ALSO THE SUBJECT OF A PROTEST DATED OCTOBER 12, 1970, BY
MEADOW GOLD-KOREA, LIMITED (MEADOW GOLD).
THE SUBJECT SOLICITATION, ISSUED ON APRIL 17, 1970, BY THE
DIRECTORATE OF PROCUREMENT, UNITED STATES ARMY, JAPAN, CALLED FOR OFFERS
ON THE PRODUCTION AND SUPPLY OF RECONSTITUTED FILLED MILK AND RELATED
DAIRY PRODUCTS FOR THE ARMED FORCES OF THE UNITED STATES GOVERNMENT,
THEIR AGENCIES AND INSTRUMENTALITIES IN THE REPUBLIC OF KOREA DURING THE
PERIOD OF JANUARY 1 THROUGH DECEMBER 31, 1971. THE PRODUCTS WERE TO BE
PRODUCED AT THE GOVERNMENT'S MILK PLANT AT CAMP BAKER, YONGO DONG PO,
SEOUL, KOREA, MAINLY FROM INGREDIENTS PRODUCED OR PROCESSED BY UNITED
STATES PLANTS. NEGOTIATIONS WERE CONDUCTED WITH OLD DOMINION, INDENCO
AND MEADOW GOLD DURING JULY 1970 AND THE CLOSING DATE FOR FINAL OFFERS
WAS AUGUST 7, 1970. THE FINAL OFFERS WERE EVALUATED AS FOLLOWS:
INDENCO $3,288,165
OLD DOMINION 3,654,866
MEADOW GOLD 3,786,822
IN ORDER FOR THE CONTRACTOR TO SECURE THE NECESSARY INGREDIENTS FROM
THE UNITED STATES TO START PERFORMANCE ON JANUARY 1, 1971, THE
CONTRACTING OFFICER DETERMINED THAT AWARD SHOULD BE MADE PROMPTLY, AND
AFTER OBTAINING APPROVAL FROM HIGHER AUTHORITY, AWARD WAS MADE TO
INDENCO ON OCTOBER 13, 1970, AS THE LOW, RESPONSIBLE OFFEROR. UNDER
SUCH CIRCUMSTANCES, AWARD IS AUTHORIZED BY PARAGRAPH 2-407.8(B)(3) OF
THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PRIOR TO RESOLUTION OF
PROTESTS AGAINST THE AWARD.
THE BASIS OF YOUR PROTEST IS THAT THE CONTRACTING OFFICER COULD NOT
PROPERLY HAVE MADE AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WITH
RESPECT TO INDENCO BECAUSE THAT FIRM, WHEN CONSIDERED WITH ITS
AFFILIATES, DID NOT POSSESS THE SATISFACTORY RECORD OF INTEGRITY
REQUIRED BY ASPR 1-903.1(IV).
IN SUPPORT OF YOUR ARGUMENT YOU CONTEND THAT SHORTLY AFTER OLD
DOMINION HAD OBTAINED AN AWARD OF A GOVERNMENT CONTRACT TO SUPPLY MILK
PRODUCTS TO THE UNITED STATES FORCES IN TAIWAN, THE GENERAL MANAGER OF
AN AFFILIATE OF INDENCO, FOREMOST DAIRIES (TAIWAN) LTD. (FOREMOST),
WROTE AN IMPROPER LETTER ON MARCH 20, 1970, TO THE GOVERNMENT OF THE
REPUBLIC OF CHINA. IN THAT LETTER FOREMOST URGED THE REPUBLIC OF CHINA
NOT TO GRANT ANY SPECIAL PRIVILEGES UNDER THE STATUS OF FORCES AGREEMENT
(SOFA), EFFECTIVE APRIL 12, 1966, TO THE FIRM WHICH RECEIVED THE
CONTRACT (OLD DOMINION) BECAUSE THE CONTRACT WAS NOT OF A TYPE
ENCOMPASSED BY THE AGREEMENT. THIS ACTION, YOU CONTEND, MAY HAVE BEEN A
VIOLATION OF THE LOGAN ACT, 18 U.S.C. 953 AND THAT, IN ANY EVENT, IT
SUBVERTED THE GOVERNMENT'S CONTRACTING PROCESS, IN WHICH FOREMOST WAS
ENGAGED, AND SUCH A TOTAL DISREGARD OF BUSINESS ETHICS IS A DISREGARD OF
INTEGRITY THAT IS THE ANTITHESIS OF AN AFFIRMATIVE DETERMINATION OF
RESPONSIBILITY.
UNDER ARTICLE XII OF THE REFERENCED SOFA BETWEEN THE UNITED STATES
AND THE REPUBLIC OF CHINA, AN AMERICAN CONTRACTOR WHO IS PERFORMING
SOLELY FOR THE UNITED STATES ARMED FORCES ON TAIWAN IS AFFORDED CERTAIN
PRIVILEGES AND EXEMPTIONS FROM THE LAWS AND REGULATIONS OF THE REPUBLIC
OF CHINA, SUCH AS DUTY FREE IMPORTATION OF EQUIPMENT, MACHINERY AND
MATERIALS.
THE FOREMOST LETTER OF MARCH 20 STATED IN PART:
"IN SUMMARY, WE MAINTAIN THAT THE UNITED STATES TAIWAN DEFENSE
COMMAND IN BEHALF OF THE NEWLY APPOINTED CONTRACTOR HAS NO GROUNDS TO
REQUEST PRIVILEGES AND EXEMPTIONS OTHER THAN THOSE DETAILED IN THE
STATUS OF FORCE AGREEMENT. IT ALSO SEEMS THAT THE GOVERNMENT OF THE
REPUBLIC OF CHINA CAN AND SHOULD DENY ANY AND ALL PRIVILEGES AND
EXEMPTIONS INCLUDING DUTY FREE IMPORTATION OF EQUIPMENT AND MATERIALS
UNTIL IT HAS BEEN DETERMINED THAT THIS CONTRACTOR CAN ESTABLISH AND
OPERATE A FACTORY BY FIRST OBTAINING THE APPROPRIATE APPROVALS AND
LICENSES FROM THE CHINESE GOVERNMENT IN ACCORDANCE WITH EXISTING
PROCEDURES, REGULATIONS AND LAWS."
WE HAVE BEEN ADVISED BY INDENCO THAT IT IS A WHOLLY OWNED SUBSIDIARY
OF FOREMOST-MCKESSON, INC., SAN FRANCISCO, CALIFORNIA, AND THAT
INTERNATIONAL DAIRY ENGINEERING CO. OF ASIA, INC. (INDASIA), IS A WHOLLY
OWNED SUBSIDIARY OF INDENCO. INDENCO HAS FURTHER STATED THAT SINCE
AUGUST 1970 INDASIA HAS OWNED ONLY 49 PERCENT OF THE OUTSTANDING STOCK
OF FOREMOST AND THE OTHER 51 PERCENT OF THE STOCK IS UNDER CHINESE
OWNERSHIP. THUS, THE PRINCIPAL QUESTION RAISED BY YOUR PROTEST IS
WHETHER THE LETTER OF MARCH 20 BY FOREMOST CONSTITUTES AN UNSATISFACTORY
RECORD OF INTEGRITY FOR INDENCO BY REASON OF INDENCO'S RELATIONSHIP TO
FOREMOST. WE THINK, FOR THE REASONS DISCUSSED BELOW, THAT THE QUESTION
MUST BE ANSWERED IN THE NEGATIVE.
THE LOGAN ACT, 18 U.S.C. 953 PROVIDES IN PERTINENT PART:
"ANY CITIZEN OF THE UNITED STATES, WHEREVER HE MAY BE, WHO, WITHOUT
AUTHORITY OF THE UNITED STATES, DIRECTLY OR INDIRECTLY COMMENCES OR
CARRIES ON ANY CORRESPONDENCE OR INTERCOURSE WITH ANY FOREIGN GOVERNMENT
OR ANY OFFICER OR AGENT THEREOF, WITH INTENT TO INFLUENCE THE MEASURES
OR CONDUCT OF ANY FOREIGN GOVERNMENT OR OF ANY OFFICER OR AGENT THEREOF,
IN RELATION TO ANY DISPUTES OR CONTROVERSIES WITH THE UNITED STATES, OR
TO DEFEAT THE MEASURES OF THE UNITED STATES, SHALL BE FINED NOT MORE
THAN $5,000 OR IMPRISONED NOT MORE THAN THREE YEARS, OR BOTH."
THIS PROVISION OF LAW, IN THAT IT CONTAINS FINE AND IMPRISONMENT
TERMS, IS CRIMINAL IN NATURE AND VIOLATIONS THEREOF ARE NOT WITHIN THE
PURVIEW OF OUR OFFICE TO DECIDE. THE RESPONSIBILITY FOR APPLICATION AND
ENFORCEMENT OF THE CITED ACT LIES WITH THE DEPARTMENT OF JUSTICE, AND WE
HAVE NOT BEEN APPRISED OF ANY ACTION BY THAT DEPARTMENT IN CONNECTION
WITH THIS MATTER. IN ANY EVENT, WE HAVE HELD THAT PRIOR CRIMINAL
ACTIVITIES, EVEN IN A CONTRACTOR'S DEALINGS WITH THE GOVERNMENT, DOES
NOT COMPEL A FINDING OF NONRESPONSIBILITY, THE CRITICAL FACTOR FOR
DETERMINATION BEING THE ABILITY AND RELIABILITY OF THE PROSPECTIVE
CONTRACTOR WITH RESPECT TO THE PROPOSED AWARD. B-167108, OCTOBER 27,
1969.
IN REGARD TO AFFILIATED CONCERNS, ASPR 1-904.2 (FORMERLY 1-904.3)
PROVIDES THAT AFFILIATED CONCERNS SHALL BE CONSIDERED AS SEPARATE
ENTITIES IN DETERMINING WHETHER THE CONCERN WHICH IS TO PERFORM THE
CONTRACT MEETS THE APPLICABLE STANDARDS FOR A RESPONSIBLE CONTRACTOR.
THAT PARAGRAPH FURTHER PROVIDES, HOWEVER, THAT THE RECORD OF PERFORMANCE
AND INTEGRITY OF AN AFFILIATED CONCERN WHICH MAY ADVERSELY AFFECT THE
RESPONSIBILITY OF THE PROSPECTIVE CONTRACTOR SHALL BE CONSIDERED BY THE
CONTRACTING OFFICER WHEN MAKING A DETERMINATION OF RESPONSIBILITY. IN
THIS CONNECTION, THE CONTRACTING OFFICER, STATED IN HIS REQUEST FOR
PERMISSION TO MAKE A DETERMINATION OF INDENCO'S RESPONSIBILITY OR
NONRESPONSIBILITY:
"INDENCO AND ITS PREDECESSOR, INTERNATIONAL DAIRY SUPPLY COMPANY
(INDASCO) HAVE BEEN PRODUCING DAIRY PRODUCTS FOR THE ARMED FORCES IN THE
PACIFIC AREA UNDER NUMEROUS CONTRACTS FOR OVER 20 YEARS.
THE COMPANY HAS BEEN OPERATING THE MILK PLANT IN KOREA FOR MANY
YEARS. EXCEPT FOR THE ALLEGATIONS IN THE PROTEST LETTER, I HAVE NO
KNOWLEDGE THAT THE INTEGRITY OF INDENCO OR ANY OF ITS PERSONNEL
CONCERNED WITH THE OPERATIONS HAS EVER BEEN QUESTIONED. THE RECORD OF
PERFORMANCE OF THE COMPANY HAS BEEN UNIFORMLY SATISFACTORY. INFORMAL
INQUIRIES TO AGENCIES SUPPORTED BY THE CONTRACT IN KOREA HAVE RESULTED
IN VERY FAVORABLE COMMENTS REGARDING PRODUCTS AND SERVICES SUPPLIED.
"BASED ON THE INFORMATION AVAILABLE TO ME, I AM UNABLE TO DETERMINE
WHETHER INDENCO AND FOREMOST DAIRIES (TAIWAN) ARE AFFILIATED CONCERNS
BUT FOR THE PURPOSE OF ASPR 1-904.3, THEY WILL BE SO CONSIDERED. IF IT
BECOMES NECESSARY TO MAKE A DETERMINATION OF RESPONSIBILITY WITH RESPECT
TO INDENCO, THE ALLEGATIONS ABOUT FOREMOST DAIRIES (TAIWAN) WILL BE
CONSIDERED ALONG WITH ALL OTHER AVAILABLE INFORMATION CONCERNING THE
RECORD OF PERFORMANCE AND INTEGRITY OF BOTH COMPANIES."
PRIOR TO EFFECTING THE AWARD, THE CONTRACTING OFFICER EXECUTED A
WRITTEN DETERMINATION OF RESPONSIBILITY ON INDENCO AS REQUIRED BY ASPR
1-904.1. IN ARRIVING AT THIS DECISION IT WAS CONCLUDED BY THE
DEPARTMENT OF THE ARMY THAT THE LETTER ITSELF DID NOT CONSTITUTE A CLEAR
AND CONVINCING DEMONSTRATION OF LACK OF INTEGRITY ON THE PART OF
FOREMOST. WE HAVE STRESSED THAT THE REGULATIONS CONTEMPLATE THAT AN
ADMINISTRATIVE DETERMINATION OF LACK OF INTEGRITY OR BUSINESS ETHICS
MUST BE BASED ON CLEAR AND CONVINCING EVIDENCE DEMONSTRATING SUCH
DEFICIENCIES ON THE PART OF THE BIDDER. 39 COMP. GEN. 868 (1960).
WHETHER, IN A PARTICULAR CASE, EVIDENCE OF A BIDDER'S OR OFFEROR'S
INTEGRITY OR LACK OF INTEGRITY IS SUFFICIENT TO WARRANT A FINDING THAT
THE BIDDER IS RESPONSIBLE OR NONRESPONSIBLE IS A MATTER PRIMARILY FOR
EVALUATION BY THE PROCURING AGENCY. BECAUSE REASONABLE MEN MAY WELL
DIFFER IN SUCH EVALUATION, OUR OFFICE HAS ADOPTED THE RULE THAT IT WILL
NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE AGENCY UNLESS IT IS CLEARLY
SHOWN THAT THE AGENCY'S DETERMINATION WAS ARBITRARY OR NOT BASED ON
SUBSTANTIAL EVIDENCE. 36 COMP. GEN. 42 (1956); 37 ID. 798 (1958); 38
ID. 778 (1959). IN VIEW OF THE PAST PERFORMANCE RECORD OF INDENCO, THE
NONRECURRING NATURE OF THE MISCONDUCT CHARGED AGAINST FOREMOST, AND OUR
INABILITY TO CONCLUDE THAT ANY LACK OF INTEGRITY ON FOREMOST'S PART CAN
PROPERLY BE IMPUTED TO INDENCO, WE CANNOT CONCLUDE THAT THE CONTRACTING
OFFICER'S AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WAS NOT BASED
UPON, AND SUPPORTED BY, SUBSTANTIAL EVIDENCE.
UNDER THE CIRCUMSTANCES, WE PERCEIVE NO SUFFICIENT BASIS FOR
QUESTIONING THE ADMINISTRATIVE DETERMINATION THAT INDENCO WAS A
RESPONSIBLE CONTRACTOR FOR THE PROCUREMENT.
ACCORDINGLY, YOUR PROTEST IS DENIED.
A COPY OF OUR DECISION OF TODAY ON THE MEADOW GOLD PROTEST IS
ENCLOSED.
B-170246(2), FEB 22, 1971
BID PROTEST - VIOLATION OF STATUS OF FORCES AGREEMENT
DENYING PROTEST OF MEADOW GOLD-KOREA LTD., THIRD LOW BIDDER, AGAINST
THE AWARD OF A CONTRACT FOR PRODUCTION AND SUPPLY OF RECONSTITUTED
FILLED MILK AND RELATED DAIRY PRODUCTS FOR U.S. ARMED FORCES IN KOREA
ISSUED BY THE U.S. ARMY TO LOW BIDDER, INTERNATIONAL DAIRY ENGINEERING
COMPANY.
ALTHOUGH PROTESTANT, THE ONLY KOREAN COMPANY TO BID, CONTENDS THAT
THE AWARD TO ANY OTHER CONTRAVENES EXISTING AGREEMENTS BETWEEN THE U.S.
AND KOREA, THE GAO FINDS NO BASIS FOR THE PROTEST SINCE THE STATUS OF
FORCES AGREEMENT CONTEMPLATES THAT NON-KOREAN BUSINESS WILL BE PERMITTED
TO COMPETE FOR GOVERNMENT CONTRACTS IN KOREA WHEN, AS IN THIS CASE,
UNAVAILABILITY OF MATERIALS REQUIRED BY U.S. STANDARDS AND THE
QUALIFICATIONS OF LOCAL CONTRACTORS MAKE WIDER COMPETITION NECESSARY.
TO KING AND KING:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 12, 1970, AND
SUBSEQUENT CORRESPONDENCE, RELATIVE TO YOUR PROTEST ON BEHALF OF MEADOW
GOLD-KOREA, LIMITED (MEADOW GOLD), AGAINST THE AWARD OF A CONTRACT TO
INTERNATIONAL DAIRY ENGINEERING COMPANY (INDENCO), OR TO ANY OTHER FIRM,
UNDER REQUEST FOR PROPOSAL NO. DAJB17-70-R-0199. THIS PROCUREMENT IS
ALSO THE SUBJECT OF A PROTEST DATED JULY 6, 1970, BY OLD DOMINION DAIRY
PRODUCTS, INC. (OLD DOMINION).
THE SUBJECT SOLICITATION, ISSUED ON APRIL 17, 1970, BY THE
DIRECTORATE OF PROCUREMENT, UNITED STATES ARMY, JAPAN, CALLED FOR OFFERS
ON THE PRODUCTION AND SUPPLY OF RECONSTITUTED FILLED MILK AND RELATED
DAIRY PRODUCTS FOR THE ARMED FORCES OF THE UNITED STATES GOVERNMENT,
THEIR AGENCIES AND INSTRUMENTALITIES IN THE REPUBLIC OF KOREA DURING THE
PERIOD JANUARY 1 THROUGH DECEMBER 31, 1971. THE PRODUCTS WERE TO BE
PRODUCED AT THE GOVERNMENT'S MILK PLANT AT CAMP BAKER, YONG DONG PO,
SEOUL, KOREA, MAINLY FROM INGREDIENTS PRODUCED OR PROCESSED BY UNITED
STATES PLANTS. NEGOTIATIONS WERE CONDUCTED WITH OLD DOMINION, INDENCO
AND MEADOW GOLD DURING JULY 1970 AND THE CLOSING DATE FOR FINAL OFFERS
WAS ESTABLISHED AS AUGUST 7, 1970. THE FINAL OFFERS WERE EVALUATED AS
FOLLOWS:
INDENCO $3,288,165
OLD DOMINION 3,654,866
MEADOW GOLD 3,786,822
IN ORDER FOR THE CONTRACTOR TO SECURE THE NECESSARY INGREDIENTS FROM
THE UNITED STATES TO START PERFORMANCE ON JANUARY 1, 1971, THE
CONTRACTING OFFICER DETERMINED THAT AWARD SHOULD BE MADE PROMPTLY, AND
AFTER OBTAINING APPROVAL FROM HIGHER AUTHORITY, AWARD WAS MADE TO
INDENCO ON OCTOBER 13, 1970, AS THE LOW, RESPONSIBLE OFFEROR. UNDER
SUCH CIRCUMSTANCES, AWARD IS AUTHORIZED BY PARAGRAPH 2-407.8(B)(3) OF
THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PRIOR TO RESOLUTION OF
PROTESTS AGAINST THE AWARD.
THE BASIS OF YOUR PROTEST IS THAT AN AWARD OF A CONTRACT TO ANYONE
OTHER THAN MEADOW GOLD, THE ONLY KOREAN COMPANY, CONTRAVENES EXISTING
AGREEMENTS BETWEEN THE GOVERNMENTS OF THE UNITED STATES AND THE REPUBLIC
OF KOREA. SPECIFICALLY, YOU URGE THAT THE PROCURING ACTIVITY IGNORED
THE SPIRIT AND LETTER OF THE STATUS OF FORCES AGREEMENT (SOFA) (SECOND
ED., JUNE 1967) BETWEEN THE TWO GOVERNMENTS AS WELL AS HEADQUARTERS,
UNITED STATES FORCES, KOREA, POLICY DIRECTIVE NO. 4-7 (OCTOBER 16,
1969).
YOU STATE THAT NONE OF THE AMERICAN CONTRACTORS SHOULD HAVE BEEN
DESIGNATED AS INVITED CONTRACTORS UNDER ARTICLE XV OF THE SOFA DOCUMENT
WHICH AT PARAGRAPH 2 THEREOF PROVIDES:
"2. THE DESIGNATION REFERRED TO IN PARAGRAPH 1 ABOVE SHALL BE MADE
UPON CONSULTATION WITH THE GOVERNMENT OF THE REPUBLIC OF KOREA AND SHALL
BE RESTRICTED TO CASES WHERE OPEN COMPETITIVE BIDDING IS NOT PRACTICABLE
DUE TO SECURITY CONSIDERATIONS, TO THE TECHNICAL QUALIFICATIONS OF THE
CONTRACTORS INVOLVED, TO THE UNAVAILABILITY OF MATERIALS OR SERVICES
REQUIRED BY THE UNITED STATES STANDARDS, OR TO LIMITATIONS OF UNITED
STATES LAW. *** ."
IN ADDITION YOU INDICATE THAT THE ABOVE STANDARDS ARE IMPLEMENTED IN
SECTION VI, "AUTHORITY," PARAGRAPHS 11.A AND B OF POLICY DIRECTIVE NO.
4-7, WHICH STATES:
"11.A. THE AUTHORITY OF THE GOVERNMENT OF THE UNITED STATES TO
DESIGNATE CERTAIN PERSONS AS INVITED CONTRACTORS IS CONTAINED IN ARTICLE
XV, SOFA. UNDER THIS AUTHORITY, COMUS KOREA, ACTING FOR THE US
GOVERNMENT, MAY, UPON CONSULTATION WITH THE ROK GOVERNMENT, DESIGNATE AS
INVITED CONTRACTORS THOSE CONTRACTORS WHO ARE ELIGIBLE UNDER THE TERMS
AND CONDITIONS SPECIFIED IN ARTICLE XV, SOFA.
"B. THE DESIGNATION OF AN INVITED CONTRACTOR IS SUBJECT TO THE
FOLLOWING CONDITIONS:
(1) OPEN COMPETITIVE BIDDING AMONG LOCAL CONTRACTORS IS NOT
PRACTICABLE DUE TO SECURITY CONSIDERATIONS.
(2) LOCAL CONTRACTORS DO NOT POSSESS THE REQUIRED TECHNICAL
QUALIFICATIONS.
(3) LOCAL UNAVAILABILITY OF MATERIALS OR SERVICES REQUIRED BY US
STANDARDS.
(4) LIMITATIONS IMPOSED BY US LAW."
FURTHER, YOU CONTEND THAT AS FOR LIMITATIONS IMPOSED BY UNITED STATES
LAW, THE AWARD OF A CONTRACT TO A CONTRACTOR OTHER THAN MEADOW GOLD
WOULD VIOLATE PARAGRAPH 7.A OF SECTION IV OF POLICY DIRECTIVE 4-7, WHICH
READS:
"7.A. IN THE INTERESTS OF THE US AND ROK AND TO FURTHER US POLICY OF
STRENGTHENING THE ECONOMY OF THE ROK, IT IS THE POLICY OF THIS
HEADQUARTERS TO AWARD CONTRACTS FOR SUPPLIES AND SERVICES IN SUPPORT OF
THE COMMAND MISSION TO KOREAN FIRMS WHENEVER POSSIBLE. US FIRMS WILL BE
USED AS INVITED CONTRACTORS ONLY UNDER THE CONDITIONS PRESCRIBED IN
PARAGRAPH 11, BELOW. THE DECISION TO USE US FIRMS FOR CONTRACTS IN THE
ROK MUST BE BASED ON CAREFUL STUDY AND ANALYSIS OF ALL FACTORS TO INSURE
COMPLIANCE WITH THIS POLICY."
INITIALLY, REPRESENTATIVES OF THE UNITED STATES ADVISED THE REPUBLIC
OF KOREA GOVERNMENT (ROKG) THAT THE UNITED STATES FORCES, KOREA,
PROPOSED TO EXTEND INVITED CONTRACTOR STATUS TO A QUALIFIED UNITED
STATES FIRM UNDER PARAGRAPH 2, ARTICLE XV OF SOFA BECAUSE:
"REASONS FOR DESIGNATION OF AN INVITED CONTRACTOR: OPEN COMPETITIVE
BIDDING AMONG LOCAL CONTRACTORS IS NOT PRACTICABLE DUE TO THE FOLLOWING:
"(1) TECHNICAL QUALIFICATIONS OF THE CONTRACTORS INVOLVED.
"(2) UNAVAILABILITY OF MATERIALS OR SERVICES REQUIRED BY THE UNITED
STATES STANDARDS."
AFTER WRITTEN AND PERSONAL CONSULTATION WITH THE ROKG,
REPRESENTATIVES OF THE UNITED STATES ADVISED THE ROKG ON JANUARY 9,
1970, THAT MEADOW GOLD MET THE NECESSARY TECHNICAL QUALIFICATIONS AND
WOULD BE GIVEN AN OPPORTUNITY TO BID ON THE PROCUREMENT. SUCH ADVICE
FURTHER STATED THAT "THE AWARD OF THIS CONTRACT IS SUBJECT TO THE
EVALUATION OF THE BID OFFERS AND THE ACCEPTANCE THEREOF MUST BE IN THE
BEST INTEREST OF THE UNITED STATES GOVERNMENT."
ADDITIONAL CONSULTATIONS WERE HELD BETWEEN THE PARTIES, AND IN A
COMMUNICATION TO THE ROKG ON JUNE 22, 1970, A MUTUAL UNDERSTANDING WAS
SUMMARIZED BY THE U.S. REPRESENTATIVES, AS FOLLOWS:
"IN VIEW OF THE MANY LETTERS ON THIS SUBJECT (SEE REFERENCES) IT IS
DEEMED APPROPRIATE TO SUMMARIZE THE CURRENT SITUATION CONCERNING THE
MILK PROCESSING CONTRACT. THIS LETTER IS PROVIDED TO INSURE OUR MUTUAL
UNDERSTANDING.
"A. THE UNITED STATES PROCURING ACTIVITY RESPONSIBLE FOR THIS
PROCUREMENT HAS SOLICITED SEVERAL FIRMS. MEADOW GOLD-KOREA, LTD., WAS
THE ONLY KOREAN FIRM SOLICITED.
"B. THE FIRMS SOLICITED WILL BE COMPETING ON AN EQUAL BASIS.
PREFERENTIAL TREATMENT WILL NOT BE GIVEN TO ANY FIRM. THIS ACTION IS IN
CONSONANCE WITH U.S. POLICY AND SUBSTANTIATES YOUR PREFERENCE, AS
REQUESTED IN YOUR 14 MAY 1970 LETTER, THAT THERE BE NO DISCRIMINATION.
"C. THE EVALUATION OF THE PROPOSALS RECEIVED FROM THOSE FIRMS
SOLICITED AND THE SUBSEQUENT AWARD WILL BE IN ACCORDANCE WITH U.S. LAWS
AND DIRECTIVES.
"D. CONSULTATION PROCEDURES HAVE BEEN COMPLETED FOR THE USE OF AN
INVITED CONTRACTOR. THE DESIGNATION OF AN INVITED CONTRACTOR WILL BE
GRANTED IF REQUIRED." THE FOLLOWING RECOGNITION OF THE UNDERSTANDING WAS
EXPRESSED AFTER THE AWARD IN AN ROKG COMMUNICATION DATED OCTOBER 19,
1970, TO THE U.S. REPRESENTATIVES: ,"I APPRECIATE VERY MUCH FOR YOUR
ACTION TAKEN TO GIVE AN OPPORTUNITY TO A KOREAN FIRM-MEADOW GOLD-KOREA,
LTD. - TO PARTICIPATE IN THE BIDDING FOR THE SUBJECT CONTRACT BASED ON
PARAGRAPH 2, ARTICLE XV OF SOFA AND SECTION IV OF USFK POLICY DIRECTIVE
4-7 DATED 16 OCTOBER 1969.
"WE UNDERSTAND THAT THE DESIGNATION OF THE INVITED CONTRACTORS IN
THIS INSTANCE IS TO PRACTICE A COMPETITIVE BIDDING TO ALLOW THE US
GOVERNMENT TO OBTAIN FAIR AND REASONABLE PRICES, AND THIS MINISTRY HAS
SO CONCURRED UPON YOUR CONSULTATION."
THE CONTRACTING OFFICER IN HIS STATEMENT CONCERNING THE PROCUREMENT
REPORTS:
"DURING NEGOTIATIONS AT HQ U.S. ARMY KOREA PROCUREMENT AGENCY ON 16
JULY 1970, MR. CANNON, THE CHAIRMAN OF BOARD OF MEADOW GOLD-KOREA, LTD.
(WHO IS ALSO THE CHAIRMAN OF BOARD OF MEADOW GOLD HAWAII, LTD., A
SUBSIDIARY OF BEATRICE FOODS COMPANY), STATED THAT MEADOW GOLD-KOREA,
LTD. WAS A KOREAN CORPORATION. HE INQUIRED AS TO WHETHER THERE WAS ANY
ADVANTAGE OR DISADVANTAGE IN HIS COMPANY BEING A KOREAN CORPORATION. HE
WAS ADVISED THAT THERE WOULD BE NO ADVANTAGE OR DISADVANTAGE FOR THE
SOLICITATION INVOLVED THE OPERATION OF A GOVERNMENT-OWNED, CONTRACTOR
OPERATED MILK PLANT IN KOREA.
"IT IS MY OPINION THAT REPRESENTATIVES OF THE KOREAN GOVERNMENT AND
AMERICAN AND KOREAN REPRESENTATIVES OF BOTH MEADOW GOLD-KOREA, LTD. AND
MEADOW GOLD DAIRIES, HAWAII, WERE SUFFICIENTLY APPRISED IN ADVANCE THAT,
AS TO THIS PARTICULAR PROCUREMENT, THE UNITED STATES INTENDED TO MAKE
ITS AWARD TO THE LOWEST RESPONSIVE RESPONSIBLE OFFEROR, WHETHER IT WAS
AN INVITED CONTRACTOR OR A KOREAN FIRM. ALL WERE CLEARLY ON NOTICE TO
THIS EFFECT AND VOICED NO OBJECTIONS UNTIL IT BECAME APPARENT THAT
MEADOW GOLD-KOREA, LTD. WAS NOT THE LOW OFFEROR. IT IS SUBMITTED THAT
IF MGK FELT THAT ITS CLAIMS WERE MERITORIOUS, IT WOULD HAVE SO ADVISED
THE CONTRACTING OFFICER AND REPRESENTATIVES OF THE U.S. FORCES IN KOREA
IMMEDIATELY AFTER THE ON-SITE ORIENTATIONS OR NO LATER THAN 16 JULY 1970
WHEN NEGOTIATIONS WERE HELD WITH MGK IN KOREA. TO HAVE RESTRICTED AWARD
OF THE CONTRACT, IN THIS INSTANCE TO KOREAN FIRM IN WHICH A U.S. FIRM
HAS A SUBSTANTIAL INTEREST SOLELY ON THE BASIS THAT MGK IS A KOREAN
CORPORATION WOULD BE TANTAMOUNT TO MAKING AWARD TO A SOLE SOURCE OF
SUPPLY WITH ESTIMATED FINANCIAL LOSS TO THE U.S. GOVERNMENT (DOD) IN THE
AMOUNT OF $1,495,971 OVER A PERIOD OF THIRTY (30) MONTHS."
WE THINK THE RECORD CLEARLY SHOWS THAT SINCE MEADOW GOLD WAS THE ONLY
QUALIFIED LOCAL KOREAN CONTRACTOR, COMPETITIVE BIDDING WAS NONEXISTENT
AMONG LOCAL CONTRACTORS. IT IS EQUALLY APPARENT THAT ARTICLE XV OF SOFA
CONTEMPLATES THAT NON-KOREAN BUSINESSES WILL BE PERMITTED TO COMPETE FOR
GOVERNMENT CONTRACTS IN KOREA IF COMPETITIVE BIDDING IS NOT OTHERWISE
PRACTICABLE DUE TO THE QUALIFICATIONS OF LOCAL CONTRACTORS OR DUE TO THE
UNAVAILABILITY OF THE MATERIALS OR SERVICES REQUIRED BY U.S. STANDARDS.
WE THEREFORE AGREE WITH THE CONTRACTING OFFICER THAT TO HAVE PRECLUDED
OUTSIDE COMPETITION WOULD HAVE BEEN TANTAMOUNT TO AWARDING THE CONTRACT
TO MEADOW GOLD ON A SOLE SOURCE BASIS.
ALTHOUGH DEVIATIONS FROM ASPR REQUIREMENTS ARE AUTHORIZED BY ASPR
1-109.4 WHEN REQUIRED TO COMPLY WITH EXECUTIVE AGREEMENTS TO WHICH THE
UNITED STATES IS A PARTY, WE DO NOT FIND THAT SOFA REQUIRES THAT
COMPETITION FOR A PROCUREMENT OF SUPPLIES OR SERVICES IN KOREA BE WAIVED
IN FAVOR OF A SOLE SOURCE PROCUREMENT FROM A KOREAN FIRM. ADDITIONALLY,
WE DO NOT BELIEVE THAT POLICY DIRECTIVE NO. 4-7 WHICH YOU CITE, CLEARLY
SUPPORTS YOUR POSITION THAT THERE SHOULD HAVE BEEN NO DESIGNATION OF
INVITED CONTRACTORS. WHILE YOU POINT OUT THAT UNDER PARAGRAPH 11.B(2) OF
THE DIRECTIVE THE DESIGNATION OF AN INVITED CONTRACTOR IS SUBJECT TO THE
CONDITION THAT "LOCAL CONTRACTORS" DO NOT POSSESS THE REQUIRED TECHNICAL
QUALIFICATIONS AND THAT MEADOW GOLD HAS THE REQUIRED QUALIFICATIONS, IT
SHOULD BE NOTED THAT SUCH CONDITION IS IN THE PLURAL FORM. SINCE LOCAL
"CONTRACTORS" DID NOT POSSESS THE REQUIRED TECHNICAL QUALIFICATIONS AND
THAT MEADOW GOLD HAS THE REQUIRED QUALIFICATIONS, IT SHOULD BE NOTED
THAT SUCH CONDITION IS IN THE PLURAL FORM. SINCE LOCAL "CONTRACTORS"
DID NOT POSSESS THE REQUIRED TECHNICAL QUALIFICATIONS, IT DOES NOT
APPEAR THAT THE DESIGNATION OF INVITED CONTRACTORS WAS IN CONTRAVENTION
OF THAT CONDITION. IT ALSO IS EVIDENT THAT PARAGRAPH 11 OF POLICY
DIRECTIVE NO. 4-7 WAS ISSUED IN IMPLEMENTATION OF PARAGRAPH 2, ARTICLE
XV OF SOFA, AND WE DO NOT BELIEVE THAT SUCH DIRECTIVE SHOULD BE
SUBJECTED TO A STRAINED INTERPRETATION SO AS TO CREATE AN INCONSISTENCY
WITH THE COMPETITIVE BIDDING REQUIREMENTS SET OUT IN SOFA, WHICH
PARAGRAPH 11 OF THE DIRECTIVE IMPLEMENTS.
ACCORDINGLY, SINCE ARTICLE XV OF SOFA AUTHORIZED THE DESIGNATION OF
INVITED CONTRACTORS UPON CONSULTATION WITH THE ROKG WHERE, AS HERE,
COMPETITIVE BIDDING WAS NOT OTHERWISE PRACTICABLE, AND SINCE THE RECORD
SHOWS THAT THE DESIGNATION OF INVITED CONTRACTORS FOR THE SUBJECT
PROCUREMENT WAS PURSUANT TO A MUTUAL AGREEMENT BETWEEN REPRESENTATIVES
OF THE GOVERNMENTS OF THE UNITED STATES AND THE REPUBLIC OF KOREA, WE
CANNOT CONCLUDE THAT THE DESIGNATION OF INVITED CONTRACTORS TO SECURE
COMPETITION FOR THE PROCUREMENT WAS IMPROPER. ALSO, SINCE WE HAVE
CONCLUDED THAT THE ADMINISTRATIVE ACTIONS WHICH CULMINATED IN THE AWARD
TO INDENCO WERE WITHIN THE SCOPE OF SOFA, WE MUST REJECT YOUR FURTHER
CONTENTION THAT THE AWARD TO OTHER THAN A KOREAN FIRM WAS CONTRARY TO
THE PROVISIONS OF ASPR 6-805.2(A)(I) AUTHORIZING THE PURCHASE OF FOREIGN
PRODUCTS AND SERVICES PURSUANT TO A TREATY OR EXECUTIVE AGREEMENT
BETWEEN GOVERNMENTS.
IN VIEW OF THE FOREGOING, YOUR PROTEST MUST BE DENIED.
AS REQUESTED, YOUR COPY OF SOFA, WHICH YOU FORWARDED WITH YOUR LETTER
OF OCTOBER 12, IS ENCLOSED TOGETHER WITH A COPY OF OUR DECISION OF TODAY
ON THE OLD DOMINION PROTEST.
B-170750(1), FEB 22, 1971
BID PROTEST - TECHNICAL DEFICIENCES
DECISIONS DENYING PROTEST AGAINST AWARD OF A CONTRACT FOR PROCUREMENT
AND DATA CONVERSION SERVICES FOR THE NATIONAL DRIVER REGISTRATION
SERVICE ISSUED BY THE FEDERAL HIGHWAY ADMINISTRATION TO SDA CORPORATION.
SINCE AN EVALUATION BOARD DETERMINED THAT PROTESTANT'S PROPOSAL WAS
INDEFINITE AND LACKED THE INFORMATION REQUESTED IN THE RFP, AND SINCE
GAO DOES NOT HAVE THE DEGREE OF TECHNICAL COMPETENCE TO ENABLE IT TO
JUDGE THE VALIDITY OF THE EVALUATION, THE FINDINGS OF THE BOARD MUST BE
UPHELD AND THE PROTEST IS ACCORDINGLY DENIED.
TO COMPUTER AND LOGISTICS TECHNOLOGY CORPORATION:
REFERENCE IS MADE TO YOUR LETTER, WITH ENCLOSURES, DATED SEPTEMBER 2,
1970, PROTESTING AGAINST THE AWARD OF A CONTRACT UNDER REQUEST FOR
PROPOSALS (RFP) NO. 281 TO ANOTHER OFFEROR.
THE RFP WAS ISSUED BY THE FEDERAL HIGHWAY ADMINISTRATION ON BEHALF OF
THE NATIONAL HIGHWAY SAFETY BUREAU ON JUNE 5, 1970, AND COVERED THE
PROCUREMENT OF DATA CONVERSION SERVICES FOR THE NATIONAL DRIVER
REGISTRATION SERVICE. IN RESPONSE TO THE RFP, COMPUTER AND LOGISTICS
TECHNOLOGY CORPORATION (CALTECH) AND FOUR OTHER FIRMS SUBMITTED
PROPOSALS WHICH WERE FORWARDED FOR TECHNICAL REVIEW BY AN EVALUATION
COMMITTEE. AS A RESULT OF THE EVALUATION, IT WAS DETERMINED THAT
CALTECH'S PROPOSAL SHOULD BE REJECTED IN VIEW OF ITS TECHNICAL
DEFICIENCIES. NOTIFICATION OF THE REJECTION WAS GIVEN TO CALTECH ON
SEPTEMBER 2, 1970, AND ITS PROTEST WAS RECEIVED BY OUR OFFICE ON THE
NEXT DAY. AWARD WAS MADE TO SDA CORPORATION ON SEPTEMBER 12, 1970.
AN EXAMINATION OF THE COMPLETED EVALUATION SHEETS REVEALS THAT THE
EVALUATORS WERE GENERALLY OF THE OPINION THAT CALTECH DID NOT RESPOND TO
THE RFP IN A MANNER WHICH WOULD INDICATE THAT IT UNDERSTOOD THE PROBLEMS
AND PROCESSES INVOLVED. IN SHORT, THE CONSENSUS OF OPINION WAS THAT
CALTECH'S PROPOSAL WAS INDEFINITE AND LACKED THE INFORMATION REQUESTED
IN THE RFP.
TO ADEQUATELY JUDGE THE VALIDITY OF THE EVALUATION OF YOUR PROPOSAL
WOULD REQUIRE A DEGREE OF TECHNICAL COMPETENCE AND KNOWLEDGE WHICH OUR
OFFICE DOES NOT POSSESS. WE, THEREFORE, ARE NOT IN A POSITION TO STATE
CATEGORICALLY THAT THE DETERMINATION OF THE EVALUATION BOARD, WITH
RESPECT TO CALTECH'S PROPOSAL, WAS SO ARBITRARY AND CAPRICIOUS AS TO BE
CLEARLY ERRONEOUS. CONSEQUENTLY, WE MAY NOT OBJECT TO THE FINDINGS OF
THE EVALUATION BOARD.
WE ARE COGNIZANT, HOWEVER, OF CERTAIN PROCEDURES USED IN CONNECTION
WITH THE PROCUREMENT WHICH CONSTITUTED SIGNIFICANT DEPARTURES FROM WHAT
WE BELIEVE TO BE SOUND PROCUREMENT PROCEDURES. WHILE WE ARE BRINGING
THESE DEFICIENCIES TO THE ATTENTION OF THE RESPONSIBLE ADMINISTRATIVE
OFFICIAL, WE CANNOT CONCLUDE THAT THE AWARD MADE TO THE SDA CORPORATION
IS SUBJECT TO LEGAL OBJECTION BY OUR OFFICE.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-170750(2), FEB 22, 1971
BID PROTEST - EVALUATION PROCEDURES
DECISION CONCERNING DEFICIENCIES IN PROCUREMENT PROCEDURES INCIDENT
TO THE EVALUATION OF PROPOSALS FOR PROCUREMENT OF DATA CONVERSION
SERVICES FOR THE NATIONAL DRIVER REGISTRATION SERVICE AND AWARD OF A
CONTRACT ISSUED BY THE FEDERAL HIGHWAY ADMINISTRATION TO SDA
CORPORATION.
GAO FINDS THAT WHILE A NUMERICAL SCORING SYSTEM WAS USED IN THE
EVALUATION, OFFERORS WERE NOT INFORMED OF THE MAJOR FACTORS TO BE
CONSIDERED AND THE BROAD SCHEME OF SCORING TO BE EMPLOYED; THE
TECHNICAL EVALUATORS SHOULD NOT HAVE HAD ACCESS TO PRICE PROPOSALS
DURING THEIR REVIEW OF THE TECHNICAL ASPECTS OF THE PROPOSAL. THE
REQUIREMENT TO CONDUCT DISCUSSIONS WITH ALL OFFERORS WITHIN A
COMPETITIVE RANGE, AS PRESCRIBED BY SECTION 1-3.805-1 OF THE FEDERAL
PROCUREMENT REGULATIONS WAS NOT FOLLOWED. APPROPRIATE ACTION SHOULD BE
TAKEN TO PREVENT THE RECURRENCE OF THESE EVENTS IN THE FUTURE.
TO MR. SECRETARY:
HEREWITH IS A COPY OF OUR DECISION OF TODAY TO COMPUTER AND LOGISTICS
TECHNOLOGY CORPORATION (CALTECH) DENYING ITS PROTEST AGAINST THE AWARD
OF A CONTRACT TO SDA CORPORATION UNDER REQUEST FOR PROPOSALS (RFP) NO.
281, ISSUED BY THE FEDERAL HIGHWAY ADMINISTRATION ON BEHALF OF THE
NATIONAL HIGHWAY SAFETY BUREAU. THE PROTEST WAS THE SUBJECT OF A REPORT
(REFERENCE 48-30) DATED OCTOBER 21, 1970, FROM THE CONTRACTING OFFICER.
WE ARE INFORMALLY ADVISED THAT THE CONTRACTING OFFICER WHO SUBMITTED
THE REPORT DID NOT BECOME INVOLVED IN THIS PROCUREMENT UNTIL AFTER THE
EVALUATION OF PROPOSALS HAD BEEN COMPLETED. WHEN HE DID BECOME
INVOLVED, THE CONTRACTING OFFICER, IN HIS CAPACITY AS CHIEF, CONTRACTS
AND PROCUREMENT DIVISION, DIRECTED A MEMORANDUM DATED JULY 2, 1970, TO
THE ACTING ASSOCIATE DIRECTOR FOR RESEARCH AND DEVELOPMENT, IN WHICH HE
SET FORTH SEVERAL AREAS OF CONCERN WITH RESPECT TO THE PROCEDURES USED
IN THE EVALUATION OF PROPOSALS.
SPECIFICALLY, HE NOTED THAT SDA CORPORATION HAD RECEIVED THE HIGHEST
RATING FROM ALL THE EVALUATORS BECAUSE OF ITS PAST AND PRESENT
PERFORMANCE UNDER THE THEN CURRENT CONTRACT FOR THE SAME SERVICES. THE
CONTRACTING OFFICER INTIMATED THAT THIS FACTOR IS NOT APPROPRIATE FOR
CONSIDERATION DURING THE TECHNICAL EVALUATION; RATHER, IT WOULD SEEM TO
RELATE TO A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY WHICH ORDINARILY IS
DETERMINED AFTER TECHNICAL EVALUATION. SECONDLY, HE NOTES THAT NO "ZONE
OF CONSIDERATION" WAS EVER ESTABLISHED AND THAT IF ALL TECHNICAL
EVALUATION SCORES HAD BEEN NORMALIZED AGAINST THE HIGHEST, ALL PROPOSALS
CONCEIVABLY WOULD HAVE BEEN WITHIN A COMPETITIVE RANGE. HE THEN NOTES
THAT EACH OFFEROR'S PRICE PROPOSAL HAD BEEN MADE AVAILABLE TO THE
TECHNICAL EVALUATORS PRIOR TO THE COMPLETION OF THE EVALUATION AND THAT
THIS INFORMATION HAD AN IMPACT ON THEIR EVALUATION, JUDGING FROM THE
COMMENTS APPEARING ON THEIR RESPECTIVE EVALUATION SHEETS. FINALLY, THE
CONTRACTING OFFICER NOTES THAT POSSIBLE STARTUP COSTS HAD BEEN
CONSIDERED TO SOME EXTENT BY AN EVALUATOR EVEN THOUGH THE RFP WAS SILENT
IN THIS RESPECT.
AFTER REVIEWING THE RECORD, WE BELIEVE THE CONTRACTING OFFICER'S
OBSERVATIONS OF THE EVALUATION PROCESS ARE WORTHY OF FURTHER COMMENT.
IT APPEARS THAT, IN EVALUATING THE VARIOUS PROPOSALS, CRITERIA OTHER
THAN THOSE SET FORTH IN THE RFP WEIGHED HEAVILY IN FAVOR OF SDA
CORPORATION. IT ALSO APPEARS THAT A NUMERICAL SCORING SYSTEM WAS USED
IN THE EVALUATION OF PROPOSALS BUT THERE WAS NOTHING IN THE RFP WHICH
INFORMED OFFERORS OF "THE BROAD SCHEME OF SCORING TO BE EMPLOYED" OR
WHICH GAVE "REASONABLY DEFINITE INFORMATION AS TO THE DEGREE OF
IMPORTANCE TO BE ACCORDED TO PARTICULAR FACTORS IN RELATION TO EACH
OTHER." AS A MATTER OF SOUND PROCUREMENT POLICY, WE BELIEVE OFFERORS
SHOULD BE GIVEN THE FOREGOING INFORMATION. 49 COMP. GEN. 229, 230-231
(1969). IN THAT DECISION WE SAID:
" *** AS TO THE EVALUATION PROCESS, WE HAVE SEVERAL TIMES STATED THAT
WHEN A POINT EVALUATION FORMULA IS TO BE USED, SOUND PROCUREMENT POLICY
DICTATES THAT OFFERORS SHOULD BE INFORMED AS TO THE EVALUATION FACTORS
AND THE RELATIVE WEIGHT OR IMPORTANCE TO BE ATTACHED TO EACH FACTOR.
SEE B-166213(2), JULY 18, 1969; B-166052(2), MAY 20, 1969; 44 COMP.
GEN. 493 (1965); 47 ID. 252 (1967); ID. 336 (1967).
" *** WHILE WE HAVE NEVER HELD, AND DO NOT NOW INTEND TO DO SO, THAT
ANY MATHEMATICAL FORMULA IS REQUIRED TO BE USED IN THE EVALUATION
PROCESS, WE BELIEVE THAT WHEN IT IS INTENDED THAT NUMERICAL RATINGS WILL
BE EMPLOYED OFFERORS SHOULD BE INFORMED OF AT LEAST THE MAJOR FACTORS TO
BE CONSIDERED AND THE BROAD SCHEME OF SCORING TO BE EMPLOYED. *** "
MOREOVER, WE DO NOT BELIEVE THAT THE TECHNICAL EVALUATORS SHOULD HAVE
HAD ACCESS TO PRICE PROPOSALS DURING THEIR REVIEW OF THE TECHNICAL
ASPECTS OF THE PROPOSALS. THE POSSIBLE EFFECT IN PROVIDING PRICING
INFORMATION DURING THE TECHNICAL EVALUATION PROCESS WAS COMMENTED UPON
BY THE CONTRACTING OFFICER IN HIS MEMORANDUM AS FOLLOWS: "I BELIEVE
THAT PRICES IN THE HANDS OF THE MOST OBJECTIVE EVALUATORS MAY CREATE
UNJUST BIAS."
SECTION 1-3.805-1 OF THE FEDERAL PROCUREMENT REGULATIONS REQUIRES
DISCUSSIONS WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE UNLESS AWARD IS
MADE ON THE BASIS OF INITIAL PROPOSALS WITHOUT DISCUSSIONS. THERE IS
NOTHING IN THE RECORD BEFORE US, HOWEVER, WHICH INDICATES THAT A
COMPETITIVE RANGE WAS EVER ESTABLISHED. IN THE ABSENCE OF A COMPETITIVE
RANGE DETERMINATION, WE MAY REASONABLY CONCLUDE FROM THE EVALUATION
RECORD THAT MOST, IF NOT ALL, OF THE PROPOSALS WERE TECHNICALLY
ACCEPTABLE AND, AS SUCH, SHOULD HAVE BEEN AFFORDED EQUAL NEGOTIATION
OPPORTUNITY. IN ANY EVENT, IF THE OTHER PROPOSALS MAY, IN RETROSPECT,
BE CONSIDERED AS TECHNICALLY ACCEPTABLE, NO BASIS THEN EXISTED TO
JUSTIFY AN AWARD ON AN INITIAL PROPOSAL BASIS TO SDA CORPORATION WITHOUT
COMPETITIVE NEGOTIATION SINCE IT DID NOT OFFER THE LOWEST PRICED
PROPOSAL.
THESE MATTERS ARE BEING BROUGHT TO YOUR ATTENTION SO THAT APPROPRIATE
ACTION MAY BE TAKEN TO PREVENT THEIR REOCCURRENCE IN THE FUTURE. IN
THIS CONNECTION, WE ARE INFORMALLY ADVISED THAT THE CONTRACTING OFFICER
HAS TAKEN ACTION WITH RESPECT TO SOME OF THE DEFICIENCIES DISCUSSED
ABOVE.
B-170829, FEB 22, 1971
TRANSPORTATION SERVICES - RECOMPUTATION OF CHARGES
DECISION CONCERNING CLAIM BY TODDMAN TRANSPORT COMPANY FOR ADDITIONAL
FREIGHT CHARGES OF $15.21 FOR TRANSPORTATION SERVICES RENDERED ON A
SHIPMENT OF GOVERNMENT PROPERTY.
NOTICE THAT GAO'S TRANSPORTATION DIVISION WILL RECOMPUTE THE CHARGES
ON THE SHIPMENT, GIVING EFFECT TO MAGNOLIA TRANSPORTATION COMPANY, INC.,
TENDER I.C.C. NO. 1, AND CLAIMANT WILL BE NOTIFIED OF ANY ADDITIONAL
AMOUNTS DUE.
TO RAWLINGS, SAYERS & SCURLOCK:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 14, 1970, WITH
ENCLOSURES, IN WHICH YOU REQUEST REVIEW OF OUR SETTLEMENT CERTIFICATE OF
SEPTEMBER 2, 1970 (OUR CLAIM NO. TK 914884). THE SETTLEMENT DISALLOWED
THE CLAIM OF YOUR CLIENT, TODDMAN TRANSPORT COMPANY, FOR ADDITIONAL
FREIGHT CHARGES OF $15.21 FOR TRANSPORTATION SERVICES RENDERED ON A
SHIPMENT OF GOVERNMENT PROPERTY WHICH MOVED FROM RED RIVER ARMY DEPOT,
DEFENSE, TEXAS, TO KELLY AIR FORCE BASE, SAN ANTONIO, TEXAS, UNDER
GOVERNMENT BILL OF LADING NO. F-3821859, DATED JUNE 16, 1969.
YOU INDICATE THAT THERE ARE OTHER SIMILAR CLAIMS AND OVERCHARGES, BUT
THAT FOR CONVENIENCE IN HANDLING, ONLY THIS CLAIM IS PRESENTED FOR
REVIEW.
WE HAVE TODAY INSTRUCTED OUR TRANSPORTATION DIVISION TO RECOMPUTE THE
CHARGES ON THE INVOLVED SHIPMENT, GIVING EFFECT TO MAGNOLIA
TRANSPORTATION COMPANY, INC., TENDER I.C.C. NO. 1, WHICH YOU CONTEND IS
APPLICABLE TO THE SHIPMENT. YOUR CLIENT SHOULD RECEIVE NOTICE OF ANY
ADDITIONAL AMOUNT THAT MAY BE FOUND DUE IN DUE COURSE.
YOU INDICATED THAT YOUR REQUEST FOR REVIEW WOULD GOVERN MANY OTHER
OVERCHARGE DISPUTES WHICH ARE NOW PENDING HERE. IN THOSE SITUATIONS
WHERE WE HAVE ALREADY COLLECTED THE OVERCHARGE, UNDER THE USUAL
PROCEDURES CARRIERS SUBMIT FORMAL CLAIMS FOR SUCH AMOUNTS AS THEY
BELIEVE TO BE DUE. SEE 4 CFR 54. ACCORDINGLY, YOUR CLIENT IN SUCH CASES
SHOULD PRESENT ITS CLAIMS FORMALLY SO THAT OUR TRANSPORTATION DIVISION
CAN IDENTIFY THE TRANSACTION; WHERE AN OVERCHARGE HAS NOT BEEN
COLLECTED, THAT IS, WHERE YOUR CLIENT HAS PROTESTED THE NOTICE OF
OVERCHARGE, AND IF NO OTHER OVERCHARGE BASIS EXISTS, IT WILL BE
WITHDRAWN BY OUR TRANSPORTATION DIVISION.
B-171436, FEB 22, 1971
REIMBURSEMENT FOR MOVING EXPENSES - AMOUNT WITHHELD FOR TAXES
DECISION HOLDING THAT $119.21 WITHHELD FOR TAXES ON THE REIMBURSEMENT
FOR MOVING EXPENSES MADE TO THOMAS E. NEENAN INCIDENT TO HIS CHANGE OF
OFFICIAL STATION MAY BE PAID.
A VOUCHER PROPOSING PAYMENT OF THE TOTAL AMOUNT WITHHELD ($159.21)
LESS THE TAX APPLICABLE TO THE MISCELLANEOUS EXPENSES ALLOWANCE OF $200
MAY BE CERTIFIED FOR PAYMENT. THE FINAL DECISION AS TO WHETHER THE
MOVING EXPENSES WILL BE ALLOWED AS A DEDUCTION ON CLAIMANT'S INCOME TAX
RETURN RESTS WITH THE INTERNAL REVENUE SERVICE, BUT IT SEEMS REASONABLE
THAT SUCH DEDUCTION IS ALLOWABLE.
TO MR. PAUL J. GRAINGER:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 12, 1970,
REQUESTING A DECISION AS TO WHETHER THERE MAY BE CERTIFIED FOR PAYMENT A
VOUCHER FOR $119.21, REPRESENTING AN AMOUNT WITHHELD FOR TAXES ON THE
REIMBURSEMENT FOR MOVING EXPENSES MADE TO MR. THOMAS E. NEENAN INCIDENT
TO HIS TRANSFER FROM SEIAD, CALIFORNIA, TO FORT JONES, CALIFORNIA,
DURING AUGUST 1970.
MR. NEENAN SAYS THAT HE AND HIS FAMILY TRAVELED FROM HIS OLD TO NEW
STATION VIA THE SCOTT RIVER ROAD WHICH IS A DISTANCE OF 48 MILES. DUE
TO THE ROUGH, LOW STANDARD CONDITION OF THAT ROAD, MOVER REFUSED TO USE
THAT ROUTE AND TRAVELED VIA YREKA, A DISTANCE OF 68 MILES.
REIMBURSEMENT FOR MOVEMENT OF HOUSEHOLD GOODS WAS MADE ON THE BASIS OF
THE 68-MILE DISTANCE.
FEDERAL TAX IN THE AMOUNT OF $159.21 WAS WITHHELD ON MR. NEENAN'S
TRAVEL VOUCHER BUT THE AMOUNT WAS RETAINED IN A SUSPENSE ACCOUNT AND WAS
NOT REMITTED TO THE TREASURY DEPARTMENT. THE VOUCHER PROPOSES PAYMENT
OF THE AMOUNT WITHHELD AS TAXES LESS THE TAX APPLICABLE TO THE
MISCELLANEOUS EXPENSE ALLOWANCE OF $200.
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, 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
"(B) IF HE HAD NO FORMER PRINCIPAL PLACE OF WORK, IS AT LEAST 50
MILES FROM HIS FORMER RESIDENCE, AND
FOR PURPOSES OF PARAGRAPH (
BETWEEN TWO POINTS SHALL BE THE SHORTEST OF THE MORE COMMONLY TRAVELED
ROUTES BETWEEN SUCH TWO POINTS." SECTION 3401 OF THAT TITLE 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."
WHILE THE FINAL DECISION AS TO WHETHER THE MOVING EXPENSES IN THIS
CASE WILL BE ALLOWED AS A DEDUCTION ON MR. NEENAN'S INCOME TAX RETURN
UNDER THE 50-MILE REQUIREMENT RESTS WITH THE INTERNAL REVENUE SERVICE,
IT SEEMS REASONABLE TO ASSUME THAT SUCH DEDUCTION IS ALLOWABLE. THIS IS
ON THE BASIS THAT THE ROUTE TAKEN BY THE MOVER (68 MILES) WOULD BE THE
MORE COMMONLY TRAVELED ROUTE.
ACTION ON THE VOUCHER WHICH IS RETURNED MAY BE TAKEN ACCORDINGLY.
B-171685, FEB 22, 1971
TEMPORARY QUARTERS SUBSISTENCE ALLOWANCE - ITEMIZATION
DECISION DENYING CLAIM BY FLOYD L. SHERRELL FOR TEMPORARY QUARTERS
SUBSISTENCE ALLOWANCE AND MISCELLANEOUS EXPENSES ALLOWANCE DUE TO LACK
OF RECEIPTS FOR LODGING, LACK OF ITEMIZATION SHOWING AMOUNTS ACTUALLY
SPENT FOR MEALS AND NO SHOWING THAT ANY MISCELLANEOUS EXPENSES WERE EVER
INCURRED.
UNDER THE PROVISIONS OF SECTION 2.5 BOB CIR. NO. A-56, ENTITLEMENT TO
TEMPORARY QUARTERS ALLOWANCE FOR AN EMPLOYEE AND HIS FAMILY OCCURS ONLY
AFTER "THE EMPLOYEE AND/OR MEMBERS OF HIS FAMILY VACATE THE RESIDENCE
QUARTERS IN WHICH THEY WERE RESIDING AT THE TIME OF THE TRANSFER." THE
RECORD INDICATES THAT WHILE CLAIMANT IS ENTITLED TO SUCH AN ALLOWANCE,
HIS FAMILY IS NOT AND GAO IS UNABLE TO BREAK DOWN EXPENSES TO SHOW JUST
WHAT PART THEREOF WAS INCURRED BY CLAIMANT ALONE. RECEIPTS FOR LODGING
MUST ALSO BE FURNISHED IF THESE ITEMS ARE TO BE ALLOWED.
TO MR. FLOYD L. SHERRELL:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 30, 1970,
CONCERNING YOUR CLAIM FOR TEMPORARY QUARTERS SUBSISTENCE ALLOWANCE FOR
YOU AND YOUR DEPENDENTS AND MISCELLANEOUS EXPENSE ALLOWANCE INCIDENT TO
YOUR PERMANENT CHANGES OF STATION MADE DURING THE PERIOD FROM JULY
THROUGH OCTOBER 1968 AS AN EMPLOYEE OF THE DEFENSE SUPPLY AGENCY.
THIS MATTER WAS THE SUBJECT OF A LETTER FROM OUR CLAIMS DIVISION
DATED SEPTEMBER 24, 1970, IN WHICH YOU WERE ADVISED THAT SINCE YOU DID
NOT FURNISH RECEIPTS FOR LODGINGS, ITEMIZATION SHOWING AMOUNTS ACTUALLY
SPENT FOR MEALS AND EVIDENCE YOU OCCUPIED TEMPORARY QUARTERS, PAYMENT OF
TEMPORARY QUARTERS SUBSISTENCE ALLOWANCE WAS NOT AUTHORIZED.
ADDITIONALLY, YOU WERE INFORMED THAT IN THE ABSENCE OF EVIDENCE THAT YOU
INCURRED SOME EXPENSE IN CONNECTION WITH A CHANGE OF YOUR RESIDENCE
PAYMENT OF A MISCELLANEOUS EXPENSE ALLOWANCE WAS NOT AUTHORIZED.
THE TRANSFER OF OFFICIAL STATION FOR WHICH A TEMPORARY QUARTERS
ALLOWANCE WAS AUTHORIZED AND FOR WHICH YOU ORIGINALLY MADE CLAIM
APPARENTLY OCCURRED ON AUGUST 3, 1968. THE PERIOD OF THE TEMPORARY
QUARTERS ALLOWANCE CLAIMED IS FROM AUGUST 3, 1968, THROUGH AUGUST 21,
1968. IN YOUR CURRENT LETTER YOU INDICATE THAT DURING THIS PERIOD YOU
AND YOUR FAMILY STAYED AT THE HOLIDAY INN AND THE SHEREDON INN, BOTH
LOCATED IN TUPELO, MISSISSIPPI, AND AT THE AMORY MOTEL, AMORY,
MISSISSIPPI. YOU SAY THAT EVIDENCE OF OCCUPATION OF TEMPORARY LODGINGS
WAS SUBMITTED TO YOUR SUPERVISOR IN MEMPHIS. THE DEFENSE SUPPLY AGENCY
REPORTED THAT YOU HAD CLAIMED MOTEL CHARGES OF $606.43 BUT THAT NO
RECEIPTS ACCOMPANIED YOUR CLAIM. WE HAVE THE ORIGINAL PAPERS YOU
SUBMITTED IN THE MATTER WHICH INCLUDES ITEMIZATIONS OF YOUR EXPENDITURES
BUT NO RECEIPTS FOR LODGINGS. WE NOTE THAT ON THE VOUCHER SUBMITTED
AROUND THE FIRST PART OF JANUARY 1969, THE FOLLOWING STATEMENT APPEARS:
"I WAS TOLD THAT THE FAMILY WOULD BE ALLOWED SO MUCH PER DAY
THEREFORE NO RECEIPTS WERE OBTAINED AND NONE ARE AVAILABLE."
UNDER THE PROVISIONS OF SECTION 2.5 OF BUREAU OF THE BUDGET CIRCULAR
NO. A-56, REVISED OCTOBER 12, 1966, THE ENTITLEMENT TO A TEMPORARY
QUARTERS ALLOWANCE FOR AN EMPLOYEE AND HIS FAMILY OCCURS ONLY AFTER "THE
EMPLOYEE AND/OR MEMBERS OF HIS FAMILY VACATE THE RESIDENCE QUARTERS IN
WHICH THEY WERE RESIDING AT THE TIME OF THE TRANSFER." IN CONNECTION
WITH THE TRANSFER FROM SELMA TO AMORY THE RECORD INDICATES THAT THE
MEMBERS OF YOUR FAMILY HAD NOT VACATED THE RESIDENCE QUARTERS IN SELMA
DURING THE PERIOD IN AUGUST 1968 IN WHICH THEIR EXPENSES HAVE BEEN
INCLUDED IN YOUR CLAIM FOR THE TEMPORARY QUARTERS ALLOWANCES.
THEREFORE, NO PART OF THEIR EXPENSES DURING THAT PERIOD MAY BE
CONSIDERED IN DETERMINING YOUR ENTITLEMENT TO A TEMPORARY QUARTERS
ALLOWANCE. ALTHOUGH YOU WOULD BE ENTITLED TO A TEMPORARY QUARTERS
ALLOWANCE RELATED TO THE EXPENSES YOU INCURRED FOR YOURSELF ALONE, WE
POINT OUT THAT THE ITEMIZATIONS PREVIOUSLY FURNISHED ARE FOR EXPENSES
INCURRED BY YOU AND YOUR FAMILY IN A GROUP. WE ARE UNABLE TO BREAK DOWN
SUCH EXPENSES TO SHOW JUST WHAT PART THEREOF WERE INCURRED ON YOUR OWN
ACCOUNT. IF YOU WILL FURNISH A SEPARATE ITEMIZATION WE WILL FURTHER
CONSIDER AN ALLOWANCE ON THAT BASIS. HOWEVER, YOU SHOULD ATTEMPT TO
OBTAIN RECEIPTS FOR THE LODGING. PERHAPS, THE MOTELS WHERE YOU STAYED
WOULD STILL HAVE THEIR RECORDS AND COULD FURNISH YOU A STATEMENT IN THAT
RESPECT.
AS TO THE MISCELLANEOUS EXPENSE ALLOWANCE THE PURPOSE THEREOF IS TO
DEFRAY COSTS ASSOCIATED WITH DISCONTINUING RESIDENCE AT ONE LOCATION AND
ESTABLISHING RESIDENCE AT A NEW LOCATION IN CONNECTION WITH AN
AUTHORIZED OR APPROVED PERMANENT CHANGE OF STATION. THE REGULATIONS,
AMONG OTHER THINGS, AUTHORIZE AN ALLOWANCE OF $100 FOR AN EMPLOYEE
WITHOUT FAMILY AND $200 FOR AN EMPLOYEE WITH FAMILY.
SINCE YOUR FAMILY WAS NEVER MOVED FROM SELMA, ALABAMA, WE CANNOT
ALLOW THE FAMILY RATE. HOWEVER, IT MAY BE THAT YOU WOULD BE ENTITLED TO
THE SINGLE ALLOWANCE OF $100 IF YOU SHOULD INDICATE THAT SOME EXPENSES
WERE INCURRED INDIVIDUALLY SUCH AS THOSE OF OBTAINING AUTOMOBILE
LICENSES OR PERMITS.
REFERRING TO YOUR REQUEST FOR INFORMATION AS TO AN APPEAL FROM OUR
ACTION IN YOUR CASE, YOU ARE ADVISED THAT NO RIGHT OF APPEAL THEREFROM
IS PROVIDED EXCEPT TO PURSUE THE MATTER IN THE APPLICABLE COURTS. IN
THAT CONNECTION, SEE 28 U.S.C. 1346, 1491. ENCLOSED ARE COPIES OF
CORRESPONDENCE AND DOCUMENTS RELATING TO YOUR CLAIM AS REQUESTED.
B-171756, FEB 22, 1971
SURCHARGES - PUBLIC UTILITY BILLS
DECISION HOLDING THAT THE SURCHARGES IMPOSED BY THE PUBLIC UTILITIES
IN PENNSYLVANIA IN ACCORDANCE WITH THE PENNSYLVANIA PUBLIC UTILITY
COMMISSION'S ORDER MAY BE PAID BY U.S. GOVERNMENT AGENCY.
WHERE THE COMMISSION HAS DETERMINED THAT NEW AND INCREASED TAXES
CONSTITUTE A LEGITIMATE COST WHICH THE UTILITIES ARE ENTITLED TO RECOVER
THROUGH INCREASED RATES AND SUSPENDS NORMAL PROCEDURES TO ALLOW PUBLIC
UTILITY COMPANIES TO IMPOSE A TEMPORARY SURCHARGE, IT APPEARS THAT THE
INTERESTS OF THE GOVERNMENT WILL BE ADEQUATELY PROTECTED IN THAT THE
GOVERNMENT IS TO BE TREATED IN THE SAME MANNER AS ALL OTHER PUBLIC
UTILITY CUSTOMERS, AND THE COMMISSION HAS RESERVED THE RIGHT TO REVIEW
EACH COMPANY'S FINANCIAL SITUATION TO DETERMINE IF ANY ADJUSTMENTS ARE
APPROPRIATE. GAO THEREFORE, DOES NOT OBJECT TO THE PAYMENT OF THE
SURCHARGE.
TO MR. NORMAN MOGUL:
REFERENCE IS MADE TO YOUR LETTER (YOUR REFERENCE DPSC-ZA), DATED
JANUARY 6, 1971, WITH ENCLOSURES, IN WHICH YOU REQUEST AN ADVANCE
DECISION AS TO THE PROPRIETY OF THE PAYMENT OF SURCHARGES ON PUBLIC
UTILITY BILLS IN THE STATE OF PENNSYLVANIA. OUR OPINION IS REQUESTED
BASED ON LEGAL MEMORANDA DATED JULY 10 AND JULY 13, 1970, BY THE
ASSISTANT COUNSEL FOR LITIGATION, FRAUD AND SERVICES, OFFICE OF COUNSEL,
DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA, IN WHICH
THE VIEW IS EXPRESSED THAT THE SURCHARGES WERE NOT ESTABLISHED IN
ACCORDANCE WITH APPLICABLE PENNSYLVANIA LAW AND ARE, THEREFORE, INVALID.
THE ASSISTANT COUNSEL ALSO CONTENDS THAT THE SURCHARGES OF ONE OF THE
UTILITIES, THE PHILADELPHIA ELECTRIC COMPANY, ARE INAPPLICABLE SINCE
THEY WERE NOT CHANGED IN ACCORDANCE WITH THE PROVISIONS OF THE UTILITY'S
CONTRACT WITH THE GOVERNMENT. HE CONCLUDES THAT THE GOVERNMENT SHOULD
NOT PAY THE SURCHARGE.
IN LATE 1969 AND EARLY 1970, THE PENNSYLVANIA STATE LEGISLATURE
RETROACTIVELY INCREASED THREE TYPES OF TAXES ON UTILITY COMPANIES - THE
CAPITAL STOCK TAX, THE CORPORATE NET INCOME TAX AND THE GROSS RECEIPTS
TAX - AND IMPOSED A NEW TAX ON REAL PROPERTY OWNED BY PUBLIC UTILITIES.
THE PUBLIC UTILITIES ARE ENTITLED BY STATE LAW AND REGULATION TO RECOVER
IN THEIR RATES THEIR LEGITIMATE COSTS PLUS A FAIR RETURN ON THEIR
CAPITAL.
IN AN ORDER DATED MARCH 10, 1970, THE PENNSYLVANIA PUBLIC UTILITY
COMMISSION (COMMISSION) FOUND THAT THE NEW AND INCREASED TAXES
CONSTITUTE A LEGITIMATE COST WHICH THE UTILITIES ARE ENTITLED TO RECOVER
THROUGH INCREASED RATES. IT ALSO INDICATED THAT EACH OF THE 620
SEPARATE UTILITY COMPANIES MIGHT BE ENTITLED TO RATE INCREASES, THAT THE
COMMISSION WAS BEING DELUGED BY THE UTILITIES WITH REQUESTS FOR RATE
INCREASES, AND THAT " *** TO ATTEMPT TO GIVE NECESSARY AND PROMPT RELIEF
ON AN INDIVIDUAL BASIS WOULD BE AN IMPOSSIBILITY." RATHER THAN HANDLE
THE MATTER ON AN INDIVIDUAL BASIS, THE COMMISSION SUSPENDED THE NORMAL
PROCEDURES AND TOOK WHAT IT CALLED "A MORE SENSIBLE AND PRACTICABLE
APPROACH" BY ALLOWING ALL AFFECTED UTILITY COMPANIES TO IMPOSE A
TEMPORARY SURCHARGE TO RECOVER THE COST OF THE TAXES. THE COMMISSION
WOULD LATER REVIEW EACH UTILITY'S FINANCIAL SITUATION TO DETERMINE IF
ANY ADJUSTMENT IN ITS RATES OR SURCHARGES, OR ANY REFUND OR OTHER
REMEDIES TO ITS CUSTOMERS, WOULD BE APPROPRIATE.
THE MAIN ARGUMENT OF THE ASSISTANT COUNSEL IN ASSERTING THAT THE
SURCHARGES ARE INVALID IS THAT THE COMMISSION, BY ADOPTING SUCH A
PROCEDURE, VIOLATED APPLICABLE STATE LAW. HE NOTES, FOR EXAMPLE, THAT
THE COMMISSION FAILED TO HOLD PUBLIC HEARINGS ON THE PROPOSED RATE
INCREASES. HE ALSO DISPUTES THE TEMPORARY NATURE OF THE INCREASE,
STATING THAT "AS A PRACTICAL MATTER THE COMMISSION *** HAS ESTABLISHED A
RATE INCREASE WHICH IS AS PERMANENT AS THE TAXES *** ."
THE QUESTION RAISED BY THE ASSISTANT COUNSEL GOES TO THE LEGALITY OF
AN ORDER PROMULGATED BY A LAWFULLY CONSTITUTED STATE REGULATORY AGENCY,
THE PENNSYLVANIA PUBLIC UTILITY COMMISSION, WHICH ORDER AFFECTS, OR
COULD AFFECT, VIRTUALLY EVERY PUBLIC UTILITY CUSTOMER IN THE STATE. IT
APPEARS THAT UNDER THE ORDER THE GOVERNMENT WILL BE TREATED IN THE SAME
MANNER AS ALL OTHER PUBLIC UTILITY CUSTOMERS - INCLUDING THE STATE AND
ITS POLITICAL SUBDIVISIONS. MOREOVER, THE COMMISSION HAS RESERVED THE
RIGHT TO REVIEW THE RECORDS OF EACH UTILITY COMPANY AND TO MAKE SUCH
ADJUSTMENTS, INCLUDING REFUNDS TO CUSTOMERS, AS IT DEEMS APPROPRIATE AND
AT THIS TIME WE HAVE NO REASON TO BELIEVE THAT THE GOVERNMENT'S
INTERESTS WILL NOT BE ADEQUATELY PROTECTED. FURTHER, THE PROPER FORUM
GENERALLY FOR A CHALLENGE TO THE ORDER OF A STATE REGULATORY AGENCY IS
IN THE COURTS. SEE 66 PURDON'S PENNA. STATUTES ANNOTATED (P.S.) 1442.
WE NOTE FROM THE ENCLOSURES WITH YOUR LETTER THAT THE MATTER WAS BROUGHT
BEFORE THE COURT OF COMMON PLEAS OF DAUPHIN COUNTY, PENNSYLVANIA, IN THE
CASE OF KLINE, ET AL. V BLOOM, ET AL., EQUITY DOCKET 3023 NO. 92
COMMONWEALTH DOCKET, 1970, AND WE ASSUME FROM THE RECORD BEFORE US THAT
THE COURT RULED IN FAVOR OF THE COMMISSION. IN LIGHT OF THE FOREGOING,
WE WOULD NOT QUESTION THE INSTANT ORDER OF THE COMMISSION NOR SURCHARGES
IMPOSED PURSUANT THERETO.
IN ADDITION THE ASSISTANT COUNSEL TAKES THE POSITION THAT SINCE THE
COMMISSION'S ORDER PROVIDES THAT ANY AMENDED TARIFF FILED BY A UTILITY
"SHALL CARRY AN EFFECTIVE DATE WHICH SHALL BE 10 DAYS AFTER ITS FILING"
AND SINCE THE BELL TELEPHONE COMPANY OF PENNSYLVANIA'S TARIFF APPARENTLY
BECAME EFFECTIVE 12 DAYS AFTER FILING, THE UTILITY FAILED TO COMPLY WITH
THE EXPRESS TERMS OF THE ORDER AND THE SURCHARGE IMPOSED BY IT IS,
THEREFORE INVALID.
ALLEGATIONS OF NONCOMPLIANCE WITH THE COMMISSION'S ORDERS ARE
PROPERLY FOR CONSIDERATION PRIMARILY BY EITHER THE COMMISSION OR THE
COURTS. SEE FOR EXAMPLE 66 P.S. 1391, 1431 AND 1442. FURTHER, THIS
OFFICE IS NOT IN A POSITION TO DETERMINE THE EFFECT OF ANY NONCOMPLIANCE
WITH THE COMMISSION'S ORDER BY THE BELL TELEPHONE COMPANY. MOREOVER,
THE COMMISSION RETAINS A REVIEW AUTHORITY OVER THE IMPOSITION OF THE
SURCHARGE AND WE HAVE NO REASON TO BELIEVE THAT THE GOVERNMENT'S
INTERESTS WILL NOT BE ADEQUATELY PROTECTED. IN FACT, WE FAIL TO SEE HOW
MAKING THE EFFECTIVE DATE OF A RATE INCREASE 12 DAYS AFTER THE FILING OF
THE TARIFF INSTEAD OF 10 DAYS AFTER SUCH FILING MAY BE SAID TO ADVERSELY
EFFECT THE INTEREST OF THE GOVERNMENT. THEREFORE, AND ABSENT A SHOWING
THAT THE GOVERNMENT IS NOT BEING TREATED IN THE SAME MANNER AS ALL OTHER
PUBLIC UTILITY CUSTOMERS, THIS OFFICE WILL NOT OBJECT TO THE PAYMENT OF
THE SURCHARGE IMPOSED BY THE BELL TELEPHONE COMPANY.
WE WILL NOW CONSIDER THE QUESTION AS TO WHETHER THE RATES OF THE
PHILADELPHIA ELECTRIC COMPANY WERE CHANGED IN ACCORDANCE WITH THE
CONTRACT (NO. CA-OOT-1626(TP) BETWEEN THE UTILITY AND THE GENERAL
SERVICES ADMINISTRATION. IN HIS MEMORANDUM OF JULY 13, 1970, THE
ASSISTANT COUNSEL QUOTES FROM THE APPLICABLE PORTIONS OF THE CONTRACT
AND THE COMMISSION'S ORDER. AS QUOTED IN THE MEMORANDUM, THE CONTRACT
PROVIDES, IN PERTINENT PART:
"ARTICLE 6. PUBLIC REGULATION. (A) SERVICE FURNISHED UNDER THIS
AGREEMENT SHALL BE SUBJECT TO RATES PRESCRIBED BY ANY FEDERAL, STATE OR
LOCAL REGULATORY COMMISSION HAVING JURISDICTION OVER THE SUPPLY OF
SERVICE TO THE CONTRACTOR'S CUSTOMERS GENERALLY." THE COMMISSION'S ORDER
OF MARCH 10, 1970, STATES, IN PERTINENT PART:
"THIS ORDER IS INTENTIONALLY COUCHED IN PERMISSIVE RATHER THAN
MANDATORY LANGUAGE, TO PRECLUDE THE POSSIBILITY THAT ANY SURCHARGE
IMPOSED HEREUNDER IS A COMMISSION-MADE RATE." SINCE THE COMMISSION'S
ORDER STATES THE SURCHARGES ARE NOT TO BE CONSIDERED COMMISSION-MADE,
THE ASSISTANT COUNSEL IS OF THE VIEW THAT THE SURCHARGES CANNOT BE
CONSIDERED TO BE RATES PRESCRIBED BY THE COMMISSION. THEREFORE, HE
CONTENDS THAT THE CONTRACT HAS NOT BEEN COMPLIED WITH AND THAT THE
SURCHARGE IS NOT LAWFULLY PAYABLE.
IN OUR VIEW THE FACT THAT THE SURCHARGE IS NOT TO BE CONSIDERED A
COMMISSION-MADE RATE DOES NOT PRECLUDE IT FROM BEING CONSIDERED A RATE
PRESCRIBED BY THE COMMISSION AS REQUIRED BY THE CONTRACT. THE ORDER OF
MARCH 10, 1970, SETS OUT IN DETAIL THE MANNER IN WHICH THE SURCHARGE IS
TO BE COMPUTED AND UNDER WHAT CIRCUMSTANCES IT IS TO BE RECOMPUTED.
WHILE THE COMMISSION DOES NOT SPECIFY THE EXACT AMOUNTS TO BE CHARGED BY
EACH INDIVIDUAL UTILITY, BY PROMULGATING SPECIFIC INSTRUCTIONS FOR THE
CALCULATION OF THE SURCHARGE RATE AND BY PROVIDING FOR COMMISSION REVIEW
OF SUCH CALCULATION, IT IS OUR VIEW THAT THE COMMISSION DOES, FOR THE
PURPOSE OF THIS CONTRACT, PRESCRIBE THE RATE. THAT IS TO SAY WHILE A
UTILITY IS NOT REQUIRED TO INCREASE ITS RATES, ONCE IT FILES A NEW
TARIFF OR SUPPLEMENT TO THE EXISTING TARIFF IN ACCORDANCE WITH OR
PURSUANT TO THE COMMISSION'S ORDER, THE RATES CONTAINED IN THE NEW
TARIFF OR SUPPLEMENT BECOME IN EFFECT THE PRESCRIBED RATES UNLESS SUCH
RATES ARE SUBSEQUENTLY CHANGED BY THE COMMISSION. MOREOVER, THE
CONTRACT IN EFFECT MERELY REQUIRES THAT THE GOVERNMENT BE CHARGED AT THE
SAME RATES AS THE OTHER CUSTOMERS OF THE PHILADELPHIA ELECTRIC COMPANY
AND, OF COURSE, ALL OF THE UTILITY'S CUSTOMERS WILL BE PAYING THE
SURCHARGE. THEREFORE, WE BELIEVE THAT THE AFOREMENTIONED CONTRACT
PROVISION IS BEING COMPLIED WITH AND THAT THE AMOUNT BILLED FOR THE
SURCHARGE, IF OTHERWISE PROPER, MAY BE PAID. ALSO, AS INDICATED ABOVE,
THE SAFEGUARDS OF COMMISSION REVIEW OF THE IMPLEMENTATION OF THE
SURCHARGE AND OF APPEAL OF THE COMMISSION'S FINAL DETERMINATION OF RATES
REMAIN AVAILABLE TO THE GOVERNMENT.
IN LIGHT OF THE FOREGOING, IT IS OUR VIEW THAT THE SURCHARGES IMPOSED
BY THE PUBLIC UTILITIES IN PENNSYLVANIA IN ACCORDANCE WITH THE
COMMISSION'S ORDER MAY BE PAID. ACCORDINGLY, PAYMENTS ON THE
B-171775, FEB 22, 1971
MUSTERING-OUT PAY
DECISION DENYING CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF $3,600
BASED ON 10-YEAR LIMITATION PERIOD IMPOSED BY THE ACT OF OCTOBER 9,
1940.
PUBLIC LAW 88-263, CITED BY CLAIMANT HAS NOTHING TO DO WITH
MUSTERING-OUT PAY AND THERE IS NO OTHER PROVISION OF LAW WHICH WOULD
ALLOW PAYMENT OF SUCH A CLAIM FILED AFTER THE 10-YEAR LIMITATION PERIOD,
NOTWITHSTANDING CLAIMANT'S IGNORANCE OF THE PROVISIONS OF THE ACT OF
OCTOBER 9, 1940.
TO MR. RAMON M. CERENEO:
FURTHER REFERENCE IS MADE TO LETTER DATED OCTOBER 28, 1970, WRITTEN
ON YOUR BEHALF BY MR. FERMIN ALTAMIRA, ASSISTANT MUNICIPAL TREASURER,
MLANG, URGING THAT YOUR CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF
$3,600, INCIDENT TO YOUR DISCHARGE FROM THE MILITARY SERVICE ON FEBRUARY
26, 1946, SHOULD BE CONSIDERED BECAUSE YOU WERE IGNORANT OF THE
PROVISIONS OF THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION,
DATED OCTOBER 31, 1968, JULY 25, 1969, AND JANUARY 29, 1970. IN THOSE
LETTERS YOU WERE ADVISED THAT UNDER THE PROVISIONS OF THE ACT OF OCTOBER
9, 1940, CH 788, 54 STAT. 1061, 31 U.S.C. 71A, A COPY OF WHICH WAS
FORWARDED TO YOU, WITH THE LETTER OF OCTOBER 31, 1968, CONSIDERATION OF
YOUR CLAIM BY OUR OFFICE WAS BARRED BECAUSE IT WAS RECEIVED MORE THAN 10
YEARS FROM FEBRUARY 26, 1946, THE DATE IT ACCRUED. YOU WERE ADVISED
FURTHER THAT THE FACT THAT YOU WERE NOT ACQUAINTED WITH THE ABOVE-CITED
LAW CONSTITUTED NO LEGAL BASIS UPON WHICH OUR OFFICE MAY GIVE
CONSIDERATION TO YOUR CLAIM. IT WAS STATED THAT THE 1940 ACT MAKES NO
EXCEPTIONS WHICH WOULD PERMIT FAVORABLE ACTION ON CLAIMS OF INDIVIDUALS
WHO BELATEDLY LEARN OF THEIR RIGHTS.
PUBLIC LAW 88-263, CITED BY YOU, HAD NOTHING TO DO WITH MUSTERING-OUT
PAY AND WE ARE NOT AWARE OF ANY STATUTORY PROVISION FOR THE PAYMENT OF
$3,600 AS MUSTERING-OUT PAY TO MEMBERS OF THE UNIFORMED SERVICES,
INCLUDING PHILIPPINE SCOUTS. THE PROVISIONS OF PARAGRAPHS 311-322 OF TM
14-502 REFERRED TO BY YOU RELATE TO MUSTERING-OUT PAYMENTS UNDER AN
EARLIER LAW AND ALL CLAIMS UNDER THAT LAW ARE SUBJECT TO THE PROVISIONS
OF THE ACT OF OCTOBER 9, 1940.
SINCE YOUR CLAIM WAS FIRST RECEIVED IN THE GENERAL ACCOUNTING OFFICE
ON SEPTEMBER 5, 1968, WHICH IS MORE THAN 10 FULL YEARS FROM FEBRUARY 26,
1946, THE DATE OF YOUR DISCHARGE, THERE IS NO ACTION WHICH THIS OFFICE
MAY LEGALLY TAKE ON THE MATTER.
B-170377, FEB 19, 1971
BID PROTEST - SOLE-SOURCE PROCUREMENT
DENIAL OF PROTEST OF JAMES G. BIDDLE COMPANY AGAINST THE AWARD OF A
CONTRACT ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, LOS ANGELES,
CALIFORNIA, FOR UNITS TO BE USED IN CALIBRATION ACTIVITIES ON A
SOLE-SOURCE BASIS.
SOLICITATION ON A SOLE-SOURCE BASIS IS JUSTIFIED WHEN MAINTENANCE OF
A LARGE NUMBER OF CALIBRATION FACILITIES IN CONNECTION WITH MODERN
WEAPONS SYSTEMS REQUIRES EXTREMELY ACCURATE AND CONSISTENT STANDARDS AND
WHEN EXPERIENCE HAS SHOWN THAT SUCH CONSISTENCY CAN BE BEST MAINTAINED
BY UNITS PROCURED ON A SOLE-SOURCE BASIS.
TO JAMES G. BIDDLE COMPANY:
REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 9, 1970, WITH
ENCLOSURE, FORWARDED HERE, CONCERNING REQUEST FOR PROPOSALS (RFP) NO.
N00123-71-R-0630, ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, LOS
ANGELES, CALIFORNIA.
THE SOLICITATION, ISSUED NOVEMBER 6, 1970, PROVIDED FOR THE
PROCUREMENT OF THE FOLLOWING ITEMS:
1. AC RATIO ACCESSORY, ELECTRO-SCIENTIFIC MODEL RA 79, QUANTITY - 1
EA.
2. TRANSPORTABLE RESISTANCE STANDARD, MODEL SR-104, QUANTITY - 8 EA.
3. RESISTANCE COMPARISON SYSTEM, MODEL 123, QUANTITY - 2 EA.
4. PORTABLE IMPEDANCE BRIDGE, MODEL 250DE, QUANTITY - 2 EA.
5. VOLTAGE DIVIDER, MODEL RV 722, QUANTITY - 4 EA.
THE RECORD REVEALS THAT THESE UNITS ARE TO BE UTILIZED IN THE
CALIBRATION ACTIVITIES OF THE NAVY.
NAVY REPORTS THAT THIS PROCUREMENT IS NOT IDENTICAL TO OR A FOLLOW-O
OF THAT NEGOTIATED UNDER RFP N00123-70-R-1127, WHICH WAS THE SUBJECT OF
OUR DECISION B-170377, OCTOBER 22, 1970: BUT THAT THIS EQUIPMENT IS
SIMILAR IN NATURE, ALTHOUGH INTENDED FOR DIFFERENT APPLICATIONS. ALSO,
NAVY REPORTS THAT WHERE THE FORMER PROCUREMENT WAS COMPETITIVE, THE
INSTANT CASE IS A SOLE-SOURCE PURCHASE.
FINALLY, WITH REGARD TO THE PRIOR PROCUREMENT (RFP NO.
N00123-70-R-1127) THE RECORD SHOWS THAT THE ORIGINAL REQUIREMENT WAS
ISSUED UNDER FORMAL ADVERTISING PROCEDURES. HOWEVER, JULIE RESEARCH
LABORATORIES, INCORPORATED, ALLEGED TO THE PURCHASING ACTIVITY THAT THE
SPECIFICATIONS CONTAINED IN THE INVITATION FOR BIDS (IFB) WERE
RESTRICTIVE. THE CONTRACTING OFFICER STATES THAT AFTER A REVIEW OF
THESE ALLEGATIONS, IT WAS CONSIDERED THAT THE SPECIFICATIONS MIGHT BE
TOO RESTRICTIVE FOR FORMAL ADVERTISING PROCEDURES. CONSEQUENTLY, THE
IFB WAS CANCELED AND, THE PROPER DETERMINATIONS HAVING BEEN MADE, THE
PROCUREMENT WAS RESOLICITED UNDER A NEGOTIATED PROCUREMENT TO PERMIT A
WIDER AREA FOR REVIEW OF PROPOSALS. IT IS INDICATED THAT THE RESULTANT
REQUEST FOR PROPOSALS WAS ISSUED TO 66 SOURCES WITH A FINAL CLOSING DATE
OF FEBRUARY 11, 1970; THREE RESPONSES TO THE SOLICITATION WERE
RECEIVED. IN VIEW OF THE FOREGOING, WE FIND NO REASON TO CONCLUDE THAT
CANCELLATION OF THE ORIGINAL IFB WAS IN VIOLATION OF PARAGRAPH 2-209 OF
THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) OR WAS OTHERWISE
ERRONEOUS.
YOU PROTEST AGAINST THE SOLICITATION BEING ISSUED ON A SOLE-SOURCE
BASIS, WITHOUT PROVIDING YOUR FIRM AN OPPORTUNITY TO SUBMIT A BID.
THE CONTRACTING OFFICER'S STATEMENT INCLUDED IN THE ADMINISTRATIVE
REPORT STATES IN THIS REGARD AS FOLLOWS:
"3. THE REASON FOR THE SOLE-SOURCE PURCHASE OF THESE ITEMS ARISES
OUT OF THE PECULIAR PROBLEMS OF MAINTAINING A LARGE NUMBER OF
CALIBRATION FACILITIES, AND ENSURING THAT SUCH FACILITIES GIVE
CONSISTENT RESULTS.
"4. *** THE INCREASING COMPLEXITY AND SOPHISTICATION OF MODERN
WEAPONS SYSTEMS MAKES IT IMPERATIVE THAT THE NAVY ESTABLISH AND MAINTAIN
A NETWORK OF EXTREMELY ACCURATE AND CONSISTENT PRIMARY AND SECONDARY
CALIBRATION FACILITIES. EXPERIENCE HAS SHOWN THAT SUCH CONSISTENCY AS
IS REQUIRED TO ENSURE THAT THE SYSTEM BE OPERATIONALLY SATISFACTORY CAN
ONLY BE ASSURED BY PROCURING IDENTICAL EQUIPMENTS FOR EACH OF THE
CALIBRATION LABORATORIES WITHIN THE SYSTEM. CONSEQUENTLY, ONCE THE
REQUIRED UNIT IS ESTABLISHED, BY COMPETITION IF POSSIBLE, FOR USE IN THE
SYSTEM FOR A SPECIFIC TYPE OF CALIBRATION, THAT UNIT IS OF NECESSITY
PROCURED ON A SOLE-SOURCE BASIS FOR ALL OTHER LABORATORIES THAT HAVE
NEED OF THE SAME TYPE OF CALIBRATION CAPABILITY."
THE CONTRACTING OFFICER'S STATEMENT INDICATES, HOWEVER, THAT THERE IS
A LACK OF DOCUMENTED JUSTIFICATION FOR PROCURING ITEMS 3 AND 4 OF THE
REQUIREMENTS (SET FORTH ABOVE) ON A SOLE-SOURCE BASIS; CONSEQUENTLY,
THE REQUIREMENT FOR THESE ITEMS HAS BEEN CANCELED WITH THE INTENTION TO
REPROCURE THEM "AT A LATER DATE UPON RECEIPT OF ADEQUATE DOCUMENTATION."
IT IS REPORTED THAT AWARD OF A CONTRACT ON ITEMS 1, 2 AND 5 IS BEING
WITHHELD PENDING RECEIPT OF OUR DECISION.
PRIOR TO ISSUING THE SOLICITATION, THE CONTRACTING OFFICER, ON
OCTOBER 19, 1970, ISSUED A DETERMINATION AND FINDINGS (D&F), PROVIDING
FOR THE NEGOTIATION OF THE PROCUREMENT UNDER THE AUTHORITY OF 10 U.S.C.
2304(A)(10), AS IMPLEMENTED BY ASPR 3-210.2(I). THE STATUTORY PROVISION
AUTHORIZES PROCUREMENTS WITHOUT FORMAL ADVERTISING WHEN IT IS
IMPRACTICABLE TO OBTAIN COMPETITION. THE ASPR PROVISION AUTHORIZES THE
USE OF THE STATUTORY AUTHORITY WHEN SUPPLIES CAN BE OBTAINED ONLY FROM A
SOLE SOURCE. ASPR 3-102(C) REQUIRES PRIOR REVIEW AT A LEVEL HIGHER THAN
THE CONTRACTING OFFICER WHEN A NONCOMPETITIVE PROCUREMENT IS
CONTEMPLATED. THE HIGHER LEVEL APPROVAL WAS OBTAINED IN THIS CASE.
UPON A CAREFUL EXAMINATION OF THE RECORD WE FIND NO LEGAL OBJECTION
EITHER TO THE DETERMINATION TO AWARD THE CONTRACT ON A SOLE-SOURCE BASIS
TO THE CONTRACTOR ON THE PRIOR PROCUREMENT OR TO THE PROCEDURE FOLLOWED
IN ARRIVING AT AND IMPLEMENTING SUCH DETERMINATION.
FOR THE REASONS STATED, YOUR PROTEST MUST BE DENIED.
B-171293, FEB 19, 1971
BID PROTEST - AMBIGUOUS CONDITIONS
DECISION DENYING PROTEST AGAINST AWARD OF CONTRACT FOR TWO ITEMS OF
METAL WEARING APPAREL RACKS TO EMECO INDUSTRIES, INC.
WHERE BIDS WERE TO BE MADE ON THE BASIS OF DELIVERY TO GSA WAREHOUSES
IN TEN REGIONAL ZONES ON EACH ITEM AND EMECO PLACED ON ITS BID THE
FOLLOWING CONDITION, "WILL NOT ACCEPT AN AWARD FOR LESS THAN SEVEN ZONES
IN BOTH ITEMS (1 AND 2)", THE CONTRACTING OFFICER REASONABLY INTERPRETED
THE CONDITION TO MEAN A TOTAL OF SEVEN ZONES IN THE TWO ITEMS, AND
PROPERLY MADE AWARD TO EMECO FOR THE SEVEN ZONES ON ITEM 2 FOR WHICH IT
WAS LOW BIDDER. THEREFORE, THE PROTEST IS DENIED.
TO GINGHER MANUFACTURING COMPANY:
REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 13, 1970, WITH
ENCLOSURES, PROTESTING THE AWARD OF A CONTRACT TO EMECO INDUSTRIES,
INCORPORATED, UNDER GENERAL SERVICES ADMINISTRATION SOLICITATION NO.
FPNFO-T3-18676-A, ISSUED JUNE 17, 1970.
THE SOLICITATION WAS FOR A REQUIREMENTS CONTRACT FOR TWO ITEMS OF
METAL WEARING APPAREL RACKS FOR THE PERIOD JANUARY 1, 1971, OR DATE OF
AWARD, WHICHEVER WAS LATER, THROUGH JANUARY 31, 1972. BIDS WERE TO BE
MADE ON THE BASIS OF DELIVERY TO GENERAL SERVICES WAREHOUSES IN TEN
REGIONAL ZONES ON EACH ITEM. PROVISION WAS ALSO MADE FOR BIDS F.O.B.
ORIGIN. AT BID OPENING, GINGHER MANUFACTURING COMPANY WAS LOW BIDDER AS
TO ALL OF THE TEN ZONES LISTED ON ITEM 1. ON ITEM 2, EMECO INDUSTRIES,
INCORPORATED, WAS LOW FOR SEVEN OF THE TEN ZONES AND GINGHER WAS LOW FOR
THE REMAINING THREE ZONES.
HOWEVER, EMECO PLACED ON ITS BID, IMMEDIATELY FOLLOWING THE SCHEDULE
OF ITEMS, THE FOLLOWING CONDITION:
"WILL NOT ACCEPT AN AWARD FOR LESS THAN SEVEN (7) ZONES IN BOTH ITEMS
(1 AND 2)" THE CONTRACTING OFFICER INTERPRETED THE CONDITION TO MEAN
THAT EMECO WOULD NOT ACCEPT AN AWARD FOR ITEM 1 UNLESS IT RECEIVED AT
LEAST SEVEN ZONES UNDER ITEM 1, WOULD NOT ACCEPT AN AWARD FOR ITEM 2
UNLESS IT RECEIVED AT LEAST SEVEN ZONES UNDER ITEM 2, AND WOULD NOT
ACCEPT AN AWARD FOR ITEMS 1 AND 2 UNLESS IT RECEIVED AT LEAST SEVEN
ZONES UNDER ITEM 1 AND SEVEN ZONES UNDER ITEM 2. AWARD WAS MADE ON
SEPTEMBER 11, 1970, TO EMECO FOR THE SEVEN ZONES OF ITEM 2 FOR WHICH IT
WAS LOW BIDDER.
YOU CONTEND THAT THE CONDITION WHICH EMECO PLACED ON ITS BID SHOULD
HAVE BEEN INTERPRETED TO MEAN THAT EMECO WOULD NOT ACCEPT AWARD FOR LESS
THAN 14 ZONES, SEVEN IN ITEM 1 AND SEVEN IN ITEM 2, AND CONSEQUENTLY, NO
AWARD SHOULD HAVE BEEN MADE TO EMECO.
WE DO NOT BELIEVE THAT THE CONTRACTING OFFICER'S INTERPRETATION OF
THE EMECO BID IS UNREASONABLE.
THE BID STATED THAT EMECO WOULD "NOT ACCEPT AN AWARD FOR LESS THAN
SEVEN (7) ZONES IN BOTH ITEMS (1 AND 2)". YOU WOULD CONSTRUE THIS
LANGUAGE TO MEAN THAT THE BIDDER WOULD NOT ACCEPT AN AWARD FOR LESS THAN
SEVEN ZONES IN EACH ITEM. THE PHRASE "IN BOTH ITEMS" DOES NOT LEND
ITSELF TO SUCH AN INTERPRETATION. THE SITUATION IS ANALOGOUS TO THAT
CONSIDERED IN DAVIS V CLAUS 100 S W 263 (KY 1907), WHERE THE COURT HELD
THAT THE TERM "A MAJORITY *** OF BOTH BOARDS," MEANT NOT A MAJORITY OF
EACH BOARD BUT A MAJORITY OF THE TOTAL MEMBERSHIP OF THE TWO BOARDS. SO
HERE WE INTERPRET THE BID LANGUAGE TO MEAN A TOTAL OF 7 ZONES IN THE TWO
ITEMS. WE CONCEDE A POSSIBLE AMBIGUITY WITH RESPECT TO WHETHER 7 ZONES
MUST BE INCLUDED IN EACH ITEM AWARDED OR WHETHER THE BIDDER WOULD ACCEPT
AN AWARD WHICH INCLUDED A TOTAL OF 7 ZONES DISTRIBUTED BETWEEN BOTH
ITEMS. HOWEVER, SINCE EMECO WAS LOW ON 7 ZONES IN ITEM 2, THE ISSUE DOES
NOT ARISE.
ACCORDINGLY, WE CONCLUDE THAT THE AWARD AS MADE TO EMECO WAS PROPER
AND YOUR PROTEST MUST BE DENIED.
B-171388, FEB 19, 1971
BID PROTEST - FAILURE TO INCLUDE PROSPECTIVE BIDDER
DENIAL OF PROTEST OF SUNROC CORPORATION ON BEHALF OF FOLGER ADAM
COMPANY AGAINST THE AWARD MADE UNDER A DISTRICT OF COLUMBIA INVITATION
COVERING EQUIPMENT FOR LORTON REFORMATORY TO SOUTHERN STEEL COMPANY AND
STUART IRON WORKS.
THE INADVERTANT FAILURE TO FURNISH FOLGER ADAM WITH AN INVITATION
DOES NOT CONSTITUTE A SUFFICIENT BASIS UPON WHICH TO QUESTION AN AWARD.
TO SUNROC CORPORATION:
REFERENCE IS MADE TO YOUR LETTERS OF NOVEMBER 25 AND DECEMBER 2,
1970, PROTESTING, ON BEHALF OF THE FOLGER ADAM COMPANY, THE AWARD MADE
UNDER DISTRICT OF COLUMBIA INVITATION FOR BIDS 61-519-9-0448-DM/1
COVERING EQUIPMENT FOR LORTON REFORMATORY.
IT APPEARS FROM THE RECORD BEFORE US THAT FOLGER ADAM EARLY IN 1968
HAD DISCUSSIONS WITH DISTRICT OF COLUMBIA OFFICIALS REGARDING THE
PROCUREMENT OF JAIL EQUIPMENT, AND THAT FOLGER ADAM PROTESTED THE
RESTRICTIVE CHARACTER OF INVITATION NO. 61-519-9-0448-DM. THEREAFTER,
THIS INVITATION WAS CANCELED AND THE PROCUREMENT WAS READVERTISED UNDER
INVITATION NO. 61-519-9-0448-DM/1, DATED SEPTEMBER 11, 1970.
NOTWITHSTANDING ITS APPARENT INTEREST IN THE PROCUREMENT, FOLGER ADAM
WAS NOT FURNISHED WITH A COPY OF THE 1970 INVITATION.
OUR OFFICE HAS BEEN ADVISED THAT FOLGER ADAM WAS ONLY ON THE BIDDER'S
MAILING LIST FOR SUPPLIERS OF JAIL EQUIPMENT AND THAT IT WAS NOT
FURNISHED A COPY OF THE INVITATION BECAUSE IT CONTEMPLATED A
CONSTRUCTION CONTRACT AND BECAUSE THE BUREAU OF PROCUREMENT WHICH
RELEASED THE INVITATIONS DID NOT HAVE THE COMPANY LISTED AS A
CONSTRUCTION FIRM. FURTHER, WE HAVE BEEN ADVISED THAT THE INVITATIONS
WERE MAILED TO 261 FIRMS AND THAT THE PROCUREMENT WAS ADVERTISED IN BLUE
REPORTS, DODGE REPORTS, BUILDERS WEEKLY GUIDE, AND THE WASHINGTON DAILY
NEWS ON SEPTEMBER 15 THROUGH SEPTEMBER 19, 1970, AND SEPTEMBER 21, 1970.
BIDS UNDER INVITATION 61-519-9-0448-DM/1 WERE OPENED ON OCTOBER 12,
1970, AND AWARDS WERE SUBSEQUENTLY MADE TO SOUTHERN STEEL COMPANY AND
STUART IRON WORKS.
OUR OFFICE HAS HELD THAT AN INADVERTENT FAILURE TO FURNISH A
PROSPECTIVE BIDDER WITH AN INVITATION FOR BIDS DOES NOT CONSTITUTE A
SUFFICIENT BASIS UPON WHICH TO QUESTION AN OTHERWISE PROPER AWARD UNDER
THE INVITATION. 34 COMP. GEN. 684 (1955); B-135553, MAY 5, 1958; AND
B-138281, FEBRUARY 13, 1959.
ALTHOUGH IT IS REGRETTABLE THAT FOLGER ADAM WAS NOT FURNISHED A COPY
OF INVITATION 61-519-9-0448-DM/1, NO CORRECTIVE ACTION IS POSSIBLE AT
THIS DATE. HOWEVER, WE HAVE BEEN ADVISED THAT FOLGER ADAM IS NOW LISTED
ON BOTH THE CONSTRUCTION AND SUPPLY MAILING LISTS. THEREFORE, IT IS
EXPECTED THAT THERE WILL NOT BE A RECURRENCE OF THE SITUATION WHICH WAS
THE SUBJECT OF YOUR ABOVE-CITED LETTERS.
B-160778, FEB 18, 1971
CONTRACTS - IMPROPER PERFORMANCE - LIABILITY
DENYING CLAIM OF SOUTHWEST ENGINEERING CO., INC., FOR COSTS INCURRED
IN RAISING RUNWAY LIGHTS TO ONE INCH ABOVE THE RUNWAY SURFACE AFTER
INSTALLING THEM BELOW THE SURFACE IN PERFORMANCE OF A CONTRACT ISSUED BY
THE DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS FOR CONSTRUCTION OF AN
APPROACH LIGHTING SYSTEM AT MCCONNELL AIR FORCE BASE, WICHITA, KANSAS.
CONTRACTOR'S CLAIM THAT THE DRAWINGS FURNISHED AT TIME OF BIDDING
WERE DEFECTIVE AND INCOMPLETE BECAUSE THE ADAPTER WAS NOT SHOWN AS PART
OF THE L-837 BASE CANNOT STAND BECAUSE THE ABSENCE OF ANY REFERENCE TO
THE ADAPTER RING IN THE DRAWING DID NOT CAUSE SUCH UNCERTAINTY THAT ONE
MIGHT REASONABLY BELIEVE THAT THE GOVERNMENT DESIRED THE CLEARANCE
MEASUREMENT SHOWN TO BE COMPUTED FROM THE TOP OF THE RING RATHER THAN
THE BASE. THE SHOP DRAWINGS SUBMITTED BY PROTESTANT AS WELL AS THE
WESTINGHOUSE LITERATURE AND DRAWINGS CLEARLY SHOWED AN INSTALLATION IN
SUCH MANNER THAT THE COVER PLATE OF THE LIGHT WAS TO BE ABOVE THE TOP OF
THE SURROUNDING CONCRETE. PROTESTANT WAS, THEREFORE CHARGEABLE WITH
THIS KNOWLEDGE.
TO SOUTHWEST ENGINEERING COMPANY, INC.:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 31, 1969, REQUESTING
OUR OFFICE TO CONSIDER YOUR CLAIMS UNDER CONTRACT NO. DA23-028-ENG-7904
WITH THE DEPARTMENT OF THE ARMY, KANSAS CITY DISTRICT, CORPS OF
ENGINEERS, WHICH WERE THE SUBJECT OF YOUR APPEAL NO. 13278 BEFORE THE
ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA).
THE FACTS, AS SET FORTH IN THE BOARD'S DECISION DENYING YOUR APPEAL,
ARE NOT IN DISPUTE. THE CONTRACT WAS FOR THE CONSTRUCTION OF AN
APPROACH LIGHTING SYSTEM AT MCCONNELL AIR FORCE BASE, WICHITA, KANSAS.
THE RUNWAY LIGHTS INVOLVED IN YOUR CLAIM ARE SEVEN FLUSH TYPE STROBEACON
LIGHTS. THE DRAWINGS FURNISHED AT TIME OF BIDDING SHOWED THESE
STROBEACONS TO BE PLACED IN AN "L-837 LAMP BASE" AND CONTAINED THE
NOTATION "DEPRESS BASE 1-3/8" IN CONCRETE." THAT PORTION OF THE DRAWING
ILLUSTRATING A CROSS SECTION OF THE L-837 BASE ALSO SHOWED A 1-3/8"
DEPRESSION FROM THE SURFACE OF THE CONCRETE RUNWAY TO THE TOP OF THE
L-837 BASE. THE BASE IS SHOWN AS A CYLINDER WITH THE TOP CLEARLY
INDICATED AS A LEVEL HORIZONTAL LIP. THERE IS NO INDICATION IN THIS
DRAWING OF AN ADAPTER PLATE IN ADDITION TO, OR ATTACHED TO, THE BASE.
THE RECORD SHOWS THAT YOU USED WESTINGHOUSE ELECTRIC CORPORATION AS YOUR
SUPPLIER OF THESE ITEMS, AND THAT YOU SUBMITTED, AS REQUIRED BY
CONTRACT, A MATERIALS LIST AND SHOP DRAWINGS DIRECTLY AS THEY CAME FROM
WESTINGHOUSE FOR APPROVAL OF THE CONTRACTING OFFICER. THE WESTINGHOUSE
LITERATURE ON THE STROBEACON ADVISED THAT THE COVER PLATE OF THE BEACON
WAS SLOPED AT 15 DEGREES UPWARD FROM THE RUNWAY LEVEL TO A HEIGHT OF ONE
INCH. THE SHOP DRAWINGS ALSO ILLUSTRATED THE LIGHT EXTENDING ABOVE THE
RUNWAY SURFACE TO A MAXIMUM HEIGHT OF ONE INCH.
THE CONTRACT PROVISIONS INCLUDED THE FOLLOWING:
"6-06 WORKMANSHIP. MATERIALS AND EQUIPMENT SHALL BE INSTALLED IN
ACCORDANCE WITH THE APPROVED RECOMMENDATIONS OF THE MANUFACTURER TO
CONFORM WITH THE CONTRACT DOCUMENTS. THE INSTALLATION SHALL BE
ACCOMPLISHED BY WORKMEN SKILLED IN THIS TYPE OF WORK."
YOU ALSO SUBMITTED AND HAD APPROVED A DRAWING OF THE L-837 BASE AND,
AS A SEPARATE ITEM ON THE SAME TRANSMITTAL, A DRAWING OF A 5725 ADAPTER
PLATE. HOWEVER, WHEN THE L-837 BASES WERE DELIVERED TO YOU BY
WESTINGHOUSE, THEY HAD THE ADAPTER PLATES AND RELATED GASKETS BOLTED TO
THEM. THE ADAPTER PLATE WAS A PRACTICAL NECESSITY IN ORDER TO FIT THE
STROBEACON, WHICH HAD A 12 INCH DIAMETER, TO THE L-837 BASE, WHICH HAD A
LARGER THAN 12 INCH DIAMETER OPENING.
THE CRUX OF THE PRESENT DISPUTE LIES IN THE FACT THAT IN MEASURING
THE 1-3/8 INCH DEPRESSION FROM THE SURFACE OF THE RUNWAY TO THE TOP OF
THE BASE, AS REQUIRED BY THE DRAWINGS WITH THE IFB, YOU MEASURED THE TOP
OF THE BASE AS INCLUDING THE ADAPTER PLATE AND GASKET. THIS HAD THE
EFFECT OF LOWERING THE UNIT AN ADDITIONAL 1-3/8" WITH THE RESULT THAT
WHEN THE STROBEACONS WERE FINALLY INSTALLED THEY WERE LESS THAN ONE INCH
ABOVE THE RUNWAY, AND SOME WERE IN FACT BELOW THE RUNWAY SURFACE. THE
RESULT WAS A DECREASE IN LIGHTING EFFECTIVENESS BECAUSE THE DEPRESSED
LIGHT OPENING WAS LESS VISIBLE AND BECAUSE DUST AND WATER WOULD
ACCUMULATE ON THE SURFACE OF THE BEACON. WHEN GOVERNMENT INSPECTION
REVEALED THIS CONDITION YOU WERE ORDERED TO TAKE CORRECTIVE ACTION "TO
INSTALL THE LIGHTS IN ACCORDANCE WITH CONTRACT PLANS." YOU USED MASONITE
ADAPTERS TO ELEVATE THE BEACONS, WHICH MATERIAL WAS SUBSEQUENTLY
DECLARED UNSUITABLE AND WAS REPLACED WITH METAL FOR PERMANENT USE.
YOUR CLAIM IS FOR $233.71 AS THE COST OF INSTALLING THE TEMPORARY
MATERIAL, PLUS $565.14 FOR THE PERMANENT MATERIAL, FOR A TOTAL OF
$798.65.
THE RECORD DISCLOSES THAT BEFORE ANY CONCRETE WAS POURED FOR SETTING
THE BASE, AND BEFORE YOU RECEIVED THE BASE ASSEMBLIES FROM WESTINGHOUSE
WITH THE ADAPTER PLATES ATTACHED, AN OFFICIAL OF YOUR FIRM TOLD THE
GOVERNMENT ENGINEER IN CHARGE OF CONSTRUCTION THAT IF THE STROBEACONS
WERE RECESSED IN ACCORDANCE WITH THE CONTRACT PLANS THE FIVE SEMI-FLUSH
INCANDESCENT LIGHTS IN A CLUSTER WITH EACH STROBEACON WOULD COLLECT MUD
AND DIRT. THERE WAS NO DISCUSSION OF ANY INCONSISTENCIES IN THE VARIOUS
DRAWINGS AND NO QUESTION RAISED AS TO THE MANNER OF MEASURING THE 1-3/8
INCH DEPRESSION, THAT IS, WHETHER THE ADAPTER PLATE SHOULD BE INCLUDED
OR EXCLUDED AS PART OF THE BASE. THE GOVERNMENT OFFICIAL ADVISED YOUR
REPRESENTATIVE THAT "THE LIGHTS SHOULD BE INSTALLED IN ACCORDANCE WITH
THE CONTRACT PLANS," HOWEVER HE WAS NOT PRESENT AT THE TIME THE LIGHTS
WERE INSTALLED AND NEVER TOOK ANY MEASUREMENTS, ELECTING TO TREAT "THIS
MATTER AS BEING THE RESPONSIBILITY OF THE CONTRACTOR."
IT IS YOUR POSITION THAT THE ADAPTER SHOULD BE CONSIDERED AS PART OF
THE L-837 BASE AND, ALTHOUGH NOT SHOWN ON THE DRAWING INCLUDED WITH THE
IFB, THE DRAWINGS SHOULD BE INTERPRETED AS THOUGH IT WERE THERE SHOWN.
TO THIS EXTENT IT IS YOUR CONTENTION THAT THE DRAWING IS DEFECTIVE AND
INCOMPLETE.
IT IS THE GOVERNMENT'S POSITION, AS STATED BY THE DECISION OF THE
ASBCA, THAT THE DRAWING WAS CLEAR INSOFAR AS IT WAS PRESENTED AND
CONSIDERED IN CONJUNCTION WITH THE SHOP DRAWINGS AND RELATED MATERIALS
SUBMITTED BY YOU AND APPROVED BY THE GOVERNMENT. IT CONCEDES THAT THE
DRAWING WOULD HAVE BEEN IMPROVED IF IT HAD ILLUSTRATED THE ADAPTER PLATE
ON TOP OF THE BASE, AND HAD DEPICTED THE STROBEACON AS IT WAS TO BE
INSTALLED. HOWEVER, THE BOARD FOUND THAT THE ABSENCE OF THIS AMOUNT OF
DETAIL ON THE DRAWING DOES NOT MAKE THE DRAWING AMBIGUOUS OR FAULTY IN
THE SENSE THAT YOU CONTEND, CITING, ADDITIONALLY, THE CONTRACT SPECIAL
PROVISIONS (SP-3) AS CONTAINING THE FOLLOWING:
"B. OMISSIONS FROM THE DRAWINGS OR SPECIFICATIONS OR THE
MISDESCRIPTION OF DETAILS OF WORK WHICH ARE MANIFESTLY NECESSARY TO
CARRY OUT THE INTENT OF THE DRAWINGS AND SPECIFICATIONS, OR WHICH ARE
CUSTOMARILY PERFORMED, SHALL NOT RELIEVE THE CONTRACTOR FROM PERFORMING
SUCH OMITTED OR MISDESCRIBED DETAILS OF THE WORK BUT THEY SHALL BE
PERFORMED AS IF FULLY AND CORRECTLY SET FORTH AND DESCRIBED IN THE
DRAWINGS AND SPECIFICATIONS.
"C. THE CONTRACTOR SHALL CHECK ALL DRAWINGS FURNISHED HIM
IMMEDIATELY UPON THEIR RECEIPT AND SHALL PROMPTLY NOTIFY THE CONTRACTING
OFFICER OF ANY DISCREPANCIES. FIGURES MARKED ON DRAWINGS SHALL IN
GENERAL BE FOLLOWED IN PREFERENCE TO SCALE MEASUREMENTS. LARGE SCALE
DRAWINGS SHALL IN GENERAL GOVERN SMALL SCALE DRAWINGS. THE CONTRACTOR
SHALL COMPARE ALL DRAWINGS AND VERIFY THE FIGURES BEFORE LAYING OUT THE
WORK AND WILL BE RESPONSIBLE FOR ANY ERRORS WHICH MIGHT HAVE BEEN
AVOIDED THEREBY. (ASPR 7-602.45)" THE ASBCA DECISION CONCLUDED THAT YOU
WERE CONTRACTUALLY BOUND TO MEASURE AND INSTALL FROM THE TOP OF THE
BASE, WITHOUT ADAPTER PLATE, 1-3/8 INCHES FROM THE SURFACE OF THE
CONCRETE RUNWAY EXACTLY AS SHOWN ON THE DRAWING, AND HAD YOU DONE SO THE
SUCCEEDING INSTALLATION WOULD HAVE BEEN PROPER. IT FOUND FURTHER THAT IF
YOU INTERPRETED THE DRAWINGS TO PROVIDE A RESULT INCONSISTENT WITH THE
APPROVED INSTALLATION INSTRUCTIONS IT WAS INCUMBENT UPON YOU TO BE MORE
INFORMATIVE THAN YOU WERE IN CONVEYING THIS INTERPRETATION TO THE
GOVERNMENT BEFORE YOU COULD RELY UPON A GENERAL INSTRUCTION TO PROCEED
"IN ACCORDANCE WITH THE CONTRACT PLANS AND SPECIFICATIONS" AS AN
ACQUIESCENCE IN YOUR INTERPRETATION.
IN YOUR LETTER OF JULY 31, 1969, TO THIS OFFICE YOU STATE THAT THE
DRAWING DETAIL AS FURNISHED BY THE GOVERNMENT " *** WAS INCOMPLETE IN
THAT THE DRAWING SPECIFICALLY CALLED FOR THE TOP OF THE CAN TO BE 1-3/8
INCHES BELOW THE SURFACE OF THE CONCRETE SURROUNDING IT *** THE
GOVERNMENT DRAWING WAS DEFICIENT IN FAILING TO SHOW THAT AN ADAPTER RING
MUST BE ADDED TO THE TOP OF THE 16 INCH DIAMETER CAN IN ORDER TO
ACCOMMODATE THE INSTALLING OF A TRANSFORMER AND LIGHT ASSEMBLY WHICH WAS
APPROXIMATELY 9" IN DIAMETER *** SOUTHWEST'S SUPERINTENDENT KNEW BY
COMMON REASONING THAT IF THE BASE WAS INSTALLED AS THE PLANS SHOWED IT
TO BE, USING THE CANS AS THEY WERE SHIPPED TO THE JOB, THE RESULT WOULD
BE ACCUMULATION OF DUST AND WATER OVER THE 1/2 INCH-WIDE HORIZONTAL SLIT
IN THE LIGHT *** ." YOU CITE SEVERAL UNITED STATES COURT OF CLAIMS AND
ASBCA DECISIONS AS SUPPORTING YOUR CONTENTION THAT THE GOVERNMENT IS
RESPONSIBLE FOR THE EXTRA COSTS INCURRED BY YOU IN RAISING THE LEVEL OF
THE LIGHTS AS REQUIRED. SOME OF THESE CASES ARE: SPENCER EXPLOSIVES,
INC., ASBCA 4800 (1960); J. W. HURST & SON AWNINGS, INC., ASBCA 4167
(1959); AVONDALE SHIPYARDS, INC., ASBCA 8375 (1963); SOUTHWEST WELDING
& MANUFACTURING COMPANY V UNITED STATES, 188 CT. CL. 925 (1969); RED
CIRCLE CORPORATION V UNITED STATES, 185 CT. CL. 1 (1968); WRB CORP. ET.
AL., A JOINT VENTURE D/B/A ROBERTSON CONSTRUCTION COMPANY V UNITED
STATES, 183 CT. CL. 409 (1968) AND UNITED STATES V SPEARIN, 248 U.S.
132 (1918).
ALL OF THE CASES CITED ARE DISTINGUISHABLE FROM THE INSTANT SITUATION
IN THAT IN EACH THE FACTS WERE GREATLY DIFFERENT AND IN EACH THERE WERE
LATENT OMISSIONS IN THE SPECIFICATIONS WHICH WERE FOUND DEFECTIVE AND
UNWORKABLE TO A DEGREE WHICH PREVENTED PERFORMANCE OF THE WORK WITHOUT
CHANGES.
FOR THE FOLLOWING REASONS WE THINK YOUR CLAIM LACKS THESE
INGREDIENTS.
THE FIRST MATTER FOR CONSIDERATION IS THE ALLEGED DEFICIENCY IN THE
CONTRACT DRAWINGS. SPECIFICALLY, YOU STATE THAT:
"THIS WHOLE SITUATION AROSE ENTIRELY FROM FAILURE OF THE GOVERNMENT
DRAWING TO BE COMPLETE AND SUBSEQUENTLY THE CONTRACTOR WAS CHARGED WITH
FAILING TO BE 'CLAIRVOYANT' IN SEEING THROUGH THE WHOLE SITUATION BEFORE
IT WAS TOO LATE.
"THE FACTS ARE, THE GOVERNMENT DRAWINGS WERE SO UNCLEAR THAT NEITHER
THE CONTRACTOR NOR THE GOVERNMENT PERSONNEL COULD DETECT THE DEFICIENCY
UNTIL THE WORK HAD ALREADY BEEN INSTALLED." THE QUESTION PRESENTED BY
THESE ASSERTIONS IS WHETHER THE FAILURE OF THE DRAWINGS TO SHOW THE
ADAPTER RING WAS SO MISLEADING OR SO AMBIGUOUS AS TO CAUSE AN
UNACCEPTABLE INSTALLATION OF THE STROBEACONS.
THE FACT THAT TWO PARTIES INTERPRET SPECIFICATIONS DIFFERENTLY DOES
NOT MAKE THE SPECIFICATION AMBIGUOUS. SIMILARLY, A FACTOR IN A WRITTEN
INSTRUCTION MAY BE SOMEWHAT CONFUSING AND PUZZLING TO ONE OR ALL PARTIES
WITHOUT CONSTITUTING AN AMBIGUITY, PROVIDED THAT AN APPLICATION OF
REASON WOULD SERVE TO REMOVE THE DOUBT. IN OTHER WORDS AN AMBIGUITY
EXISTS ONLY IF TWO OR MORE REASONABLE INTERPRETATIONS ARE POSSIBLE.
DITTMORE-FREIMUTH CORP. V UNITED STATES, 182 CT. CL. 507, 390 F. 2D 664
(1968). VAGUENESS, INDEFINITENESS AND UNCERTAINTY ARE MATTERS OF
DEGREE, WITH NO ABSOLUTE STANDARD FOR COMPARISON. CORBIN ON CONTRACTS,
SEC. 95, PAGE 396. THE INQUIRY, THEN, IS WHETHER THE ABSENCE OF ANY
REFERENCE TO THE ADAPTER RING IN THE DRAWING CAUSED SUCH UNCERTAINTY
THAT ONE MIGHT REASONABLY BELIEVE THAT THE GOVERNMENT DESIRED THE
CLEARANCE MEASUREMENT SHOWN TO BE COMPUTED FROM THE TOP OF THE RING
RATHER THAN THE BASE. IT IS AXIOMATIC THAT A CONTRACT IS TO BE
INTERPRETED FROM ALL OF ITS FOUR CORNERS, THAT IS, WITH DUE REGARD TO
ALL ITS PARTS. THE WORK WAS DESIGNATED AS FLUSH MOUNTED LIGHTING, THE
WESTINGHOUSE LITERATURE AND DRAWINGS INSTRUCTED AND ILLUSTRATED THE
LIGHT TO BE INSTALLED ABOVE THE RUNWAY SURFACE TO A HEIGHT OF ONE INCH,
AND YOU SUBMITTED AND HAD APPROVED ONE DRAWING OF THE L-837 BASE AND, AS
A SEPARATE ITEM ON THE SAME TRANSMITTAL REQUEST, ANOTHER DRAWING OF A
5225 ADAPTER PLATE. BOTH YOU AND THE GOVERNMENT ARE, THEREFORE,
CHARGEABLE WITH THE KNOWLEDGE THAT AN ADAPTER WOULD BE USED SINCE YOU
OFFERED IT IN YOUR SHOP DRAWINGS AND SUCH DRAWINGS WERE OFFICIALLY
APPROVED BY THE GOVERNMENT IN ACCORDANCE WITH THE TERMS OF THE CONTRACT
(PARAGRAPHS 6-04, 6-05, AND 6-06 OF THE SPECIFICATIONS).
YOUR SHOP DRAWING SUBMITTED REVEALED THAT THE WESTINGHOUSE BOOKLET
ILLUSTRATING THE LIGHTS IN QUESTION CLEARLY SHOWED AN INSTALLATION IN
SUCH A MANNER THAT THE COVER PLATE OF THE LIGHT WAS TO BE ABOVE THE TOP
OF THE SURROUNDING CONCRETE. HAD YOU CHECKED INTO THIS PART OF YOUR OWN
LITERATURE AS SUBMITTED TO THE GOVERNMENT, IT WOULD HAVE BEEN OBVIOUS
THAT THE BASES AS ACTUALLY INSTALLED (BASE PLUS ADAPTER PLATE AND GASKET
1-3/8 INCHES BELOW THE SURROUNDING CONCRETE) WOULD NOT PRODUCE THIS
RESULT SINCE PARAGRAPH 6-06 OF THE SPECIFICATIONS REQUIRED INSTALLATION
IN ACCORDANCE WITH "THE APPROVED RECOMMENDATIONS OF THE MANUFACTURER."
WE THEREFORE FIND NO AMBIGUITY IN THE CONTRACT PLANS, AS CLARIFIED BY
YOUR SHOP DRAWING SUBMITTALS. HAD THE BASES THEMSELVES BEEN INSTALLED
IN ACCORDANCE WITH THE PLANS - 1-3/8 INCHES BELOW THE TOP OF SURROUNDING
CONCRETE - NO DIFFICULTY WOULD HAVE BEEN EXPERIENCED. THE FACT THAT
WESTINGHOUSE FURNISHED THE ADAPTER RINGS ALONG WITH THE LIGHT ASSEMBLIES
AND THAT YOU RECEIVED THE BASES WITH THE ADAPTER RINGS ALREADY BOLTED ON
DOES NOT ALTER THE FACTUAL SITUATION. THE SHOP DRAWINGS SHOWED 11 PARTS
AS SEPARATE ITEMS. WHILE YOU CONCEDE THAT YOU WERE AWARE OF AND HAD
BROUGHT TO THE PROJECT ENGINEER'S ATTENTION THE FACT THAT THE LIGHTS
WOULD BE TOO LOW IF INSTALLED IN ACCORDANCE WITH THE CONTRACT PLANS, THE
RECORD SHOWS THAT YOUR ENGINEER'S CONCERN WAS NOT DIRECTED TO THE FACT
THAT THE STROBEACON LIGHTS WOULD BE TOO LOW TO BE SEEN, THE REAL
DIFFICULTY WHICH ACTUALLY OCCURRED, BUT WAS INSTEAD DIRECTED TO HIS
CONVICTION THAT DIRT AND WATER MIGHT COVER THE FIVE SEMI-FLUSH
INCANDESCENT LIGHTS IN A CLUSTER WITH EACH STROBEACON. YOU DID NOT MAKE
A POINT OF THE PRESENCE OF THE ADAPTER RINGS OR EVEN ALLEGE THAT THEIR
PRESENCE CREATED A DIFFICULTY.
HAD YOU STATED TO THE GOVERNMENT REPRESENTATIVE THAT YOU PROPOSED TO
INSTALL THE STROBEACON BASES PLUS ADAPTER RINGS 1-3/8 INCHES BELOW THE
RUNWAY SURFACE, YOUR CLAIM MIGHT BE CONSIDERED ON A DIFFERENT BASIS.
HOWEVER, AS INDICATED BY THE RECORD OF THE CLAIM CONFERENCE OF DECEMBER
22, 1967 (TO WHICH YOU REFER AS ESTABLISHING THE GOVERNMENT'S
FOREKNOWLEDGE OF THE ALLEGED DISCREPANCY IN PLANS) YOUR ENGINEER DID NOT
KNOW IN WHAT FORM THE BASES AND ADAPTER RINGS HAD BEEN RECEIVED BY YOU,
AND THE PROJECT ENGINEER ONLY ADVISED HIM TO INSTALL THE LIGHTS IN
ACCORDANCE WITH THE CONTRACT PLANS. THE PROJECT ENGINEER DID NOT
PERSONALLY MEASURE YOUR INSTALLATIONS OR EVEN OBSERVE CONTEMPORANEOUSLY
THE ACTUAL WORK.
IT IS THE CONTRACTING AGENCY'S VIEW, AND ONE IN WHICH WE MUST CONCUR,
THAT IT IS THE CONTRACTOR'S BASIC DUTY TO PERFORM THE WORK CORRECTLY;
NOT THE GOVERNMENT'S DUTY TO PREVENT IMPROPER PERFORMANCE. IT WAS
INCUMBENT UPON YOU TO KNOW THE DETAILS OF THE PLANS, PARTICULARLY YOUR
OWN SHOP DRAWINGS, TO MAKE THE NECESSARY MEASUREMENTS AT THE PROJECT
SITE AND TO MAKE CERTAIN THAT THE PLANS AND SHOP DRAWINGS WERE ADHERED
TO. SEE CLAUSE 23 OF THE CONTRACT GENERAL PROVISIONS.
CLAUSE SP-3 OF THE SPECIAL PROVISIONS, QUOTED ABOVE, HAS BEEN
INTERPRETED SO AS TO HOLD CONTRACTORS RESPONSIBLE FOR THAT WHICH THEY
KNOW, OR REASONABLY SHOULD HAVE KNOWN, TO BE ERRONEOUS OR INCOMPLETE
SPECIFICATIONS. B-164459, AUGUST 21, 1968, 48 COMP. GEN. 90. COMPARE
ASBCA NO. 10276, 65-1 BCA 4761 (1965). SEE, ALSO, ASBCA CASES CITED IN
BOARDS ARGUMENT, PAGE 6 OF THE COPY OF HEARINGS UNDER ASBCA NO. 13278.
IN VIEW OF THE FOREGOING, YOUR CLAIM FOR THE COST OF CHANGES IN THE
PERMANENT INSTALLATION MUST BE DENIED.
WITH RESPECT TO YOUR CLAIM FOR THE COST OF TEMPORARY INSTALLATION,
THE GOVERNMENT ARGUES THAT YOU DID THE SHIMMING INVOLVED THEREIN WITH
MATERIALS OF YOUR OWN CHOICE INITIALLY, AND AT YOUR OWN RISK AS A
TEMPORARY EXPEDIENT. IT IS CLEAR FROM THE RECORD THAT THE GOVERNMENT
NEVER DIRECTED THE USE OF TEMPORARY SHIMMING, OR APPROVED THE USE OF THE
BENELEX 70 MATERIAL YOU CHOSE TO USE. SINCE IT WAS DETERMINED THAT
BENELEX 70 DID NOT HAVE SUFFICIENT WEATHER RESISTANCE FOR THE PERMANENT
INSTALLATION, AND THE RECORD DOES NOT ESTABLISH THAT THE GOVERNMENT WAS
RESPONSIBLE FOR YOUR USE OF SUCH MATERIAL, WE ARE UNABLE TO CONCLUDE
THAT THE GOVERNMENT IS RESPONSIBLE FOR THE EXTRA EXPENSES YOU INCURRED
IN REPLACING THE BENELEX 70 SHIMS WITH METAL SHIMS. ACCORDINGLY, YOUR
CLAIM FOR SUCH EXPENSES IS DENIED.
THE ENCLOSURES SUBMITTED WITH YOUR CLAIMS ARE RETURNED.
B-171146, FEB 18, 1971
CIVILIAN EMPLOYEES - TRAVEL EXPENSES - PER DIEM
ADVISING THAT CLINTON O. BUNN MAY BE REIMBURSED PER DIEM BEGINNING
SEPTEMBER 7 AND NOT SEPTEMBER 4 FOR TRAVEL PERFORMED BETWEEN DENVER,
COLO., AND WASHINGTON, D.C., TO ATTEND TWO SEMINARS SINCE HE WAS NOT
REQUIRED TO BE IN WASHINGTON UNTIL SEPTEMBER 8 EVEN THOUGH HE MISTAKENLY
BELIEVED THAT THE EARLY DEPARTURE WAS NECESSARY TO TAKE ADVANTAGE OF
EXCURSION AIR FARE RATES.
TO MR. ROYAL D. HUGHEY:
THIS REFERS TO YOUR LETTER OF OCTOBER 26, 1970, WITH ENCLOSURES,
REQUESTING OUR DECISION WHETHER YOU MAY CERTIFY FOR PAYMENT THE ENCLOSED
VOUCHER IN FAVOR OF MR. CLINTON O. BUNN FOR $145, REPRESENTING PER DIEM
AND TAXI FARES.
BY TRAVEL ORDER DATED AUGUST 14, 1970, MR. BUNN WAS AUTHORIZED
ROUND-TRIP TRAVEL BETWEEN DENVER, COLORADO, AND WASHINGTON, D. C., FOR
THE PURPOSE OF ATTENDING TWO SEMINARS. SUCH TRAVEL WAS TO COMMENCE ON
SEPTEMBER 8, 1970. HOWEVER, ON SEPTEMBER 1, 1970, MR. BUNN'S ORIGINAL
TRAVEL ORDER WAS AMENDED TO INCLUDE A TRIP TO MORGANTOWN, WEST VIRGINIA,
TO PARTICIPATE IN A MEETING ON SEPTEMBER 8, 1970, WITH BUREAU OF MINES
PERSONNEL.
FOR THE TRAVEL BETWEEN DENVER AND WASHINGTON, MR. BUNN PURCHASED AN
EXCURSION FARE TICKET COSTING $159. HE DEPARTED DENVER AT 11:50 A.M. ON
FRIDAY, SEPTEMBER 4, 1970 (UNITED AIR LINES FLIGHT NO. 282), AND
ARRIVED AT FRIENDSHIP AIRPORT IN BALTIMORE AT 5:44 P.M. THE SAME DAY.
MR. BUNN PERFORMED NO OFFICIAL BUSINESS IN WASHINGTON ON SATURDAY
(SEPTEMBER 5), SUNDAY (SEPTEMBER 6), OR MONDAY (SEPTEMBER 7, LABOR DAY).
ON TUESDAY, SEPTEMBER 8, HE TRAVELED TO MORGANTOWN TO ATTEND THE
MEETING AND RETURNED TO WASHINGTON THAT EVENING. ON HIS RETURN TO
DENVER ON SEPTEMBER 16, 1970, MR. BUNN DEPARTED BALTIMORE AT 6:50 P.M.
AND ARRIVED IN DENVER 8:20 P.M. THAT EVENING.
FOR THE ABOVE TRAVEL MR. BUNN, WHO EVIDENTLY INCURRED NO EXPENSES FOR
LODGING WHILE IN WASHINGTON, HAS CLAIMED PER DIEM OF $10 (IN ACCORDANCE
WITH AGENCY REGULATIONS) FOR 12-3/4 DAYS, A TOTAL OF $127.50. YOU
QUESTION WHETHER THE EMPLOYEE MAY BE ALLOWED PER DIEM FOR SEPTEMBER 4,
5, AND 6, SINCE HE, HAVING PERFORMED NO OFFICIAL BUSINESS UNTIL
SEPTEMBER 8, WAS NOT REQUIRED TO COMMENCE TRAVEL TO WASHINGTON UNTIL
SEPTEMBER 7.
IN SUPPORT OF HIS CLAIM FOR 12-3/4 DAYS PER DIEM MR. BUNN STATES THAT
IT WAS NECESSARY FOR HIM TO DEPART DENVER BY NOON ON FRIDAY, SEPTEMBER
4, IN ORDER TO TAKE ADVANTAGE OF THE EXCURSION FARE. CONTRARY TO HIS
BELIEF, HOWEVER, MR. BUNN COULD HAVE USED HIS EXCURSION TICKET FOR ANY
ONE OF THREE UNITED AIR LINES FLIGHTS WHICH DEPARTED DENVER ON MONDAY,
SEPTEMBER 7, INCLUDING THE SAME UNITED FLIGHT (NO. 282) WHICH HE USED ON
SEPTEMBER 4. ALL OF THE FLIGHTS DEPARTED DENVER DURING THE 2ND PER DIEM
QUARTER OF THAT DAY.
IN PERFORMING OFFICIAL TRAVEL A GOVERNMENT EMPLOYEE IS REQUIRED TO
PROCEED AS EXPEDITIOUSLY AS HE WOULD IF TRAVELING ON HIS PERSONAL
BUSINESS, EVEN THOUGH HE MAY BE REQUIRED TO TRAVEL ON NONWORKDAYS. SEE
SECTION 1.2 OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS. IN VIEW
OF THAT OBLIGATION MR. BUNN'S PER DIEM MUST BE COMPUTED ON THE BASIS OF
TRAVEL TO WASHINGTON ON SEPTEMBER 7 RATHER THAN SEPTEMBER 4. SINCE ON
THE PRESENT RECORD THERE IS NO BASIS TO ASSUME THAT MR. BUNN WOULD HAVE
INCURRED LODGING EXPENSES IN WASHINGTON HAD HE COMMENCED TRAVEL ON
SEPTEMBER 7, HE SHOULD BE ALLOWED PER DIEM AT THE RATE OF $10 FOR 9-3/4
DAYS.
THE VOUCHER IS RETURNED HEREWITH FOR HANDLING IN ACCORDANCE WITH THE
ABOVE.
B-171158, FEB 18, 1971
TRANSFERS - TEMPORARY QUARTERS - PER DIEM - DEPENDENTS
AUTHORIZING REIMBURSEMENT MODIFIED ACCORDING TO APPLICABLE RULES FOR
TEMPORARY QUARTERS SUBSISTENCE EXPENSES INCURRED BY EMPLOYEE OF
DEPARTMENT OF LABOR IN CONNECTION WITH HIS TRANSFER FROM FORT
LAUDERDALE, FLORIDA, TO RALEIGH, N. C.
CLAIM FOR $54 FOR DEPENDENTS' TEMPORARY QUARTERS EXPENSES WAS NOT IN
ACCORD WITH SECTION 2.5 OF BOB CIRCULAR NO. A-56 IN THAT PER DIEM RATE
WAS NOT REDUCED AS REQUIRED. DURING THE SECOND 10-DAY PERIOD
DEPENDENTS' ALLOWANCE SHOULD BE AT THE RATE OF 2/3 AND DURING THE THIRD
10-DAY PERIOD AT THE RATE OF 1/2.
TO MR. VLADIMIR OLEYNIK:
WE REFER FURTHER TO YOUR LETTER OF OCTOBER 27, 1970, WITH ENCLOSURES,
FURNISHING ADDITIONAL INFORMATION CONCERNING THE SUM OF $270.50
ADMINISTRATIVELY ALLOWED MR. RAYMOND G. CORDELLI ON TRAVEL VOUCHER
DATED MARCH 6, 1967, AS REIMBURSEMENT FOR TEMPORARY QUARTERS SUBSISTENCE
EXPENSES INCURRED BY MR. CORDELLI AND HIS 3 DEPENDENTS IN CONNECTION
WITH HIS TRANSFER FROM FT. LAUDERDALE, FLORIDA, TO RALEIGH, NORTH
CAROLINA, UNDER TRAVEL ORDER NO. WH 67-163 DATED NOVEMBER 15, 1966, AS
AMENDED. THE PAYMENT WAS QUESTIONED IN OUR AUDIT BY INFORMAL INQUIRY
NO. 67-T-41 DATED NOVEMBER 7, 1967, FOR THE REASON THAT SUCH ALLOWANCE
WAS NOT ITEMIZED ON THE VOUCHER, OR SUPPORTED BY RECEIPTS.
YOU REQUEST ADVICE AS TO WHETHER THE ADDITIONAL INFORMATION IS
SUFFICIENT TO SUPPORT THE PAYMENT.
WE HAVE REVIEWED THE TEMPORARY QUARTERS MATTER TOGETHER WITH THE PER
DIEM PAID FOR THE DEPENDENTS' TRAVEL AS BOTH TYPES OF ALLOWANCES WOULD
HAVE BEEN PAYABLE FOR SEPARABLE PARTS OF SEVERAL SAME DAYS BASED UPON
THE PROVISIONS OF SECTIONS 2.5B(5) AND 2.5D(2)(A), (B) AND (C) OF OFFICE
OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56 REVISED (1966). IN THAT
CONNECTION, WE HAVE CONSIDERED INFORMATION CONTAINED IN MR. CORDELLI'S
LETTERS DATED MAY 14 AND DECEMBER 18, 1968, TOGETHER WITH EVIDENCE
SUPPLIED BY HIS LETTER OF NOVEMBER 16, 1969, AND OTHER EVIDENCE
(AMERICAN AUTOMOBILE ASSOCIATION (AAA) TOUR BOOK, FALL-WINTER, 1966-67)
REGARDING HOTEL AND MOTEL DAILY RATES PREVAILING AT RALEIGH AND FT.
LAUDERDALE (OTHER THAN BEACH AREA) DURING THE PERIOD NOVEMBER 21 TO
DECEMBER 17, 1966. THE ADDITIONAL INFORMATION IS SUFFICIENT TO JUSTIFY
A CONCLUSION THAT MR. CORDELLI'S CLAIM FOR THE TEMPORARY QUARTERS
ALLOWANCE IN THE AMOUNT OF $216.50 FOR HIMSELF WOULD NOT EXCEED EXPENSES
WHICH MAY REASONABLY HAVE BEEN INCURRED. ACCORDINGLY, NO FURTHER
QUESTION WILL BE RAISED AS TO THAT ITEM.
HOWEVER, HIS CLAIM OF $54 FOR HIS DEPENDENTS' TEMPORARY QUARTERS
EXPENSES WAS NOT IN ACCORDANCE WITH THE APPLICABLE SUBSECTIONS OF
SECTION 2.5 OF CIRCULAR NO. A-56, ABOVE, IN THAT THE PER DIEM RATE WAS
NOT REDUCED AS REQUIRED. DURING THE SECOND 10-DAY PERIOD THE
DEPENDENTS' ALLOWANCE SHOULD BE FOR 3/4 DAY (6 P.M., DECEMBER 12 - NOON,
DECEMBER 13) AT THE RATE OF 2/3 OF $8 ($5.34 X 3/4 X 3), OR $12.02, AND
DURING THE THIRD 10-DAY PERIOD, THE ALLOWANCE SHOULD BE FOR 2 DAYS (6
P.M., DECEMBER 15 - 6 P.M., DECEMBER 17) AT THE RATE OF 1/2 OF $8 ($4 X
2 X 3), OR $24, TOTALING $36.02 IN LIEU OF THE $54 PAID ON THE VOUCHER.
ON THE OTHER HAND, WE NOTE THAT PER DIEM AT THE DAILY RATE OF $12 FOR
MRS. CORDELLI'S TRAVEL PERIOD WAS CLAIMED AND PAID ON THE VOUCHER. YOUR
OFFICE RECENTLY INFORMED US THAT $16 WAS THE AUTHORIZED RATE FOR TRAVEL
TIME INCIDENT TO THE TRANSFER OF STATION WHEN THE SPOUSE DOES NOT
ACCOMPANY THE EMPLOYEE BUT IS AUTHORIZED TO TRAVEL SEPARATELY, AS IN
THIS CASE.
IN LIGHT OF SECTION 2.2B(1)(B) OF THE CIRCULAR IT APPEARS THAT MR.
CORDELLI WAS UNDERPAID FOR HIS WIFE'S TRAVEL PER DIEM. HE SHOULD BE
ALLOWED 2-1/4 DAYS AT $16 (NOON, DECEMBER 13 TO 6 P.M., DECEMBER 15), OR
$36, IN LIEU OF 2-1/2 DAYS AT $12 (6 A.M., DECEMBER 13 TO 6 P.M.,
DECEMBER 15 INDICATED ON THE VOUCHER). THUS AS HE WAS UNDERPAID $6,
THAT AMOUNT SHOULD BE APPLIED AS A CREDIT AGAINST OTHER EXPENSES
OVERPAID; RECAPITULATED AS $270.50 MINUS CREDITS OF $216.50, $36.02 AND
$6 LEAVES $11.98 TO BE REFUNDED BY MR. CORDELLI.
B-171241, FEB 18, 1971
MILITARY PERSONNEL - PER DIEM - TEMPORARY DUTY - ADDITIONAL FIELD
TRAINING
DECISION HOLDING THAT SECOND LIEUTENANT EDUARDO RIVERA IS ENTITLED TO
PAYMENT OF PER DIEM WHILE PARTICIPATING IN SOUTH COVER III EXERCISE AT
HOWARD AIR FORCE BASE, CANAL ZONE INVOLVING ADDITIONAL FIELD TRAINING
AND TEMPORARY DUTY OF OFFICERS AND AIRMEN OF THE PUERTO RICO AIR
NATIONAL GUARD PROVIDED THAT MEMBERS OF A REGULAR COMPONENT WOULD HAVE
BEEN ENTITLED TO PER DIEM FOR PERFORMING TEMPORARY DUTY UNDER THE SAME
CIRCUMSTANCES.
THE LEGISLATIVE HISTORY OF 37 U.S.C. 404(A)4 SHOWS THE INTENTION TO
EXCLUDE PER DIEM AT MILITARY INSTALLATIONS WHERE GOVERNMENT QUARTERS AND
MESS ARE AVAILABLE ONLY FOR ANNUAL TRAINING DUTY PERFORMED UNDER 32
U.S.C. 502(A) WHICH IS THE MINIMUM DUTY ORDINARILY REQUIRED OF A
NATIONAL GUARDSMAN. THEREFORE, ADDITIONAL TRAINING DUTY PERFORMED UNDER
32 U.S.C. 502(F) AND 503(A) IS NOT SO RESTRICTED AND AS DECIDED IN
B-152420, MAY BE AUTHORIZED TO MEMBERS OF RESERVE COMPONENTS ON ACTIVE
DUTY FOR LESS THAN 20 WEEKS WHERE MEMBERS OF REGULAR COMPONENTS
PERFORMING SIMILAR DUTY IN A TEMPORARY STATUS WOULD BE ENTITLED TO PER
DIEM.
TO CAPTAIN W. V. PIERSON:
WE REFER FURTHER TO YOUR LETTER DATED AUGUST 3, 1970, WITH
ATTACHMENTS, FORWARDED HERE BY LETTER OF NOVEMBER 6, 1970, FROM THE
DEPARTMENT OF DEFENSE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE
COMMITTEE (CONTROL NO. 70-52), IN WHICH YOU REQUEST AN ADVANCE DECISION
AS TO THE PROPRIETY OF PAYMENT OF A CLAIM BY SECOND LIEUTENANT EDUARDO
RIVERA, PRANG, FOR PER DIEM WHILE PARTICIPATING IN SOUTH COVER III
EXERCISE AT HOWARD AIR FORCE BASE, CANAL ZONE.
AIR NATIONAL GUARD ORDER T-90, MARCH 26, 1970, HEADQUARTERS, PUERTO
RICO NATIONAL GUARD, ISSUED UNDER THE PROVISIONS OF 32 U.S.C. 503,
ORDERED 45 OFFICERS AND AIRMEN OF THE PUERTO RICO AIR NATIONAL GUARD,
INCLUDING LIEUTENANT RIVERA, TO ACTIVE DUTY FOR TRAINING, WITH THEIR
CONSENT, TO PARTICIPATE IN SOUTH COVER III EXERCISE AT HOWARD AIR FORCE
BASE, CANAL ZONE. THE ORDER DESIGNATED THE ASSIGNMENT AS ADDITIONAL
FIELD TRAINING AND TEMPORARY DUTY WHICH WAS TO COMMENCE EITHER ON MARCH
30 OR 31, 1970. ALL PERSONNEL WERE TO BE RELIEVED FROM ACTIVE DUTY FOR
TRAINING ON APRIL 4, 1970, OR UPON COMPLETION OF THE MISSION, UNLESS
SOONER RELIEVED BY COMPETENT AUTHORITY, AND TO RETURN TO THEIR HOMES OF
RECORD.
WE ARE INFORMED THAT LIEUTENANT RIVERA WAS ON ACTIVE DUTY FOR
TRAINING FROM MARCH 30 THROUGH APRIL 4, 1970; HE HAS SUBMITTED CLAIM
FOR PER DIEM INCLUDING THE PERIOD HE WAS ON DUTY AT HOWARD AIR FORCE
BASE, CANAL ZONE, DURING WHICH TIME GOVERNMENT MEALS AND QUARTERS WERE
AVAILABLE. ADDITIONALLY, YOU REPORT THE RECEIPT OF 19 SIMILAR CLAIMS
FROM OTHER MEMBERS OF THE PUERTO RICO AIR NATIONAL GUARD.
ENCLOSED WITH YOUR SUBMISSION IS LETTER OF APRIL 23, 1970, TO THE
CHIEF, NATIONAL GUARD BUREAU, FROM THE BASE COMMANDER, MUNIZ AIR
NATIONAL GUARD BASE, PUERTO RICO, IN WHICH IT IS INDICATED THAT OFFICERS
AND AIRMEN OF THE 156 TACTICAL FIGHTER GROUP (PRANG) WERE ORDERED TO
ACTIVE DUTY FOR TRAINING IN SUPPORT OF A RADAR INTERCEPT TRAINING
EXERCISE WHICH HAD BEEN REQUESTED BY THE UNITED STATES AIR FORCES
SOUTHERN COMMAND AND THAT FUNDING WAS CONTAINED IN AN ALLOCATION FOR
ADDITIONAL FIELD TRAINING.
IT IS INDICATED THAT PER DIEM CLAIMS WERE DENIED BASED ON THE
RATIONALE THAT THE INDIVIDUALS WERE IN FACT PERFORMING ANNUAL FIELD
TRAINING BY VIRTUE OF THE NATURE OF THE APPROPRIATION INVOLVED. THE
BASE COMMANDER CONTENDED THAT PERSONNEL PARTICIPATING IN THE HOWARD AIR
FORCE BASE EXERCISE WERE NOT ON ANNUAL FIELD TRAINING, AS HE SAID THEY
ALL WOULD BE REQUIRED TO PERFORM ANNUAL FIELD TRAINING FROM MAY 31
THROUGH JUNE 13, 1970, AND THAT THE NATURE OF THE FUNDING DID NOT
INDICATE AN INTENTION TO WITHHOLD PER DIEM. IN REPLY, THE CHIEF,
NATIONAL GUARD BUREAU, EXPRESSED CONCURRENCE WITH THE BASE COMMANDER'S
CONTENTIONS AND INDICATED THAT THE VOUCHERS SHOULD BE PROCESSED FOR
PAYMENT.
YOU INDICATE THAT THE QUESTION AT ISSUE IS WHETHER PER DIEM IS
PROPERLY PAYABLE FOR THE PERIOD INVOLVED WHILE PARTICIPATING IN SOUTH
COVER III EXERCISE AS AN ADDITIONAL ANNUAL FIELD TRAINING. YOU SAY
FURTHER THAT LIEUTENANT RIVERA'S CLAIM FOR PER DIEM WAS DENIED ON THE
BASIS OF PARAGRAPH M6001C (M6001-1(C)1) OF THE JOINT TRAVEL REGULATIONS,
AS BOTH GOVERNMENT QUARTERS AND MESS WERE AVAILABLE FOR THE PERIOD IN
QUESTION. IN ADDITION, YOU REFER TO PARAGRAPH M4250 OF THE REGULATIONS
AS AFFORDING AN ADDITIONAL BASIS FOR DENIAL OF PAYMENT OF PER DIEM IN
THE CIRCUMSTANCES SET FORTH.
SECTION 404(A) OF TITLE 37, UNITED STATES CODE, WAS AMENDED EFFECTIVE
JANUARY 1, 1968, BY SECTION 3 OF THE ACT OF DECEMBER 1, 1967, PUBLIC LAW
90-168, 81 STAT. 525, BY ADDING CLAUSE (4) THERETO, TO PROVIDE FOR
PAYMENT, UNDER REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, OF
TRAVEL AND TRANSPORTATION 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, FOR WHICH HE IS ENTITLED TO, OR HAS WAIVED, PAY
UNDER THIS TITLE."
IN DECISION B-152420, MARCH 30, 1970 (49 COMP. GEN.__), WE EXPRESSED
THE OPINION THAT PAYMENT OF PER DIEM COULD BE AUTHORIZED TO MEMBERS OF
RESERVE COMPONENTS ON ACTIVE DUTY FOR LESS THAN 20 WEEKS WHERE MEMBERS
OF REGULAR COMPONENTS PERFORMING SIMILAR DUTY IN A TEMPORARY DUTY STATUS
WOULD BE ENTITLED TO PER DIEM, WITH THE EXCEPTION OF TWO WEEKS OF ANNUAL
ACTIVE DUTY FOR TRAINING AT A MILITARY INSTALLATION WHERE QUARTERS AND
MESSING ARE AVAILABLE.
IN ADDITION, WE SAID THAT WE WOULD NOT OBJECT TO PER DIEM PAYMENTS
MADE FOR ANY PERIOD ON OR AFTER JANUARY 1, 1968, AND PRIOR TO THE
EFFECTIVE DATE OF NEW REGULATIONS ISSUED TO GIVE EFFECT TO THIS
DECISION, IF SUCH PAYMENTS WERE IN ACCORDANCE WITH PARAGRAPH M6001 OF
THE JOINT TRAVEL REGULATIONS ORIGINALLY ISSUED (APRIL 1, 1968) TO
IMPLEMENT SECTION 3 OF PUBLIC LAW 90-168, AND WERE OTHERWISE CORRECT.
IN ACCORD WITH THIS DECISION, PARAGRAPH M6001-3 OF THE JOINT TRAVEL
REGULATIONS, CHANGE 212, SEPTEMBER 1, 1970, PROVIDES THAT EXCEPT FOR
ANNUAL ACTIVE DUTY FOR TRAINING AT MILITARY INSTALLATIONS WHERE
GOVERNMENT QUARTERS AND GOVERNMENT MESS ARE AVAILABLE, MEMBERS OF THE
RESERVE COMPONENTS ON ACTIVE DUTY WITH PAY ON OR AFTER JANUARY 1, 1968,
UNDER ORDERS CONTEMPLATING AN ASSIGNMENT OF LESS THAN 20 WEEKS ARE
ENTITLED TO PER DIEM ALLOWANCES AS AUTHORIZED BY SUBPARAGRAPH 1(C)1,
NOTWITHSTANDING THE AVAILABILITY OF GOVERNMENT QUARTERS AND GOVERNMENT
MESS AT THE ACTIVE DUTY STATION.
AT THE TIME OF YOUR LETTER OF AUGUST 3, 1970, THERE WAS IN EFFECT
PARAGRAPH M6001-1(C)1, CHANGE 209, OF THE JOINT TRAVEL REGULATIONS WHICH
PROVIDED THAT WHEN THE PERIOD OF ACTIVE DUTY BY A MEMBER OF A RESERVE
COMPONENT IS FOR LESS THAN 20 WEEKS AND BOTH GOVERNMENT QUARTERS AND
GOVERNMENT MESS ARE AVAILABLE AT THE PERMANENT DUTY STATION, NO PER DIEM
WILL BE PAYABLE. THAT PARAGRAPH ALSO WAS AMENDED EFFECTIVE JANUARY 1,
1968, BY CHANGE 212 TO PROVIDE WITH RESPECT TO PER DIEM FOR ACTIVE DUTY
OF LESS THAN 20 WEEKS AT THE PERMANENT DUTY STATION BY A MEMBER OF A
RESERVE COMPONENT THAT, EXCEPT FOR ANNUAL ACTIVE DUTY TRAINING AT A
MILITARY INSTALLATION WHERE GOVERNMENT QUARTERS AND GOVERNMENT MESS ARE
AVAILABLE, PER DIEM ALLOWANCES ARE PAYABLE AT THE SAME RATES AND SUBJECT
TO THE SAME DEDUCTIONS AS ARE PROVIDED FOR TEMPORARY DUTY IN CHAPTER 4,
PARTS E AND F, AS APPLICABLE.
THE EXCLUSION FROM ELIGIBILITY FOR PER DIEM INCIDENT TO ANNUAL ACTIVE
DUTY FOR TRAINING AT MILITARY INSTALLATIONS WHERE GOVERNMENT QUARTERS
AND GOVERNMENT MESS ARE AVAILABLE IS FOUNDED UPON THE STATEMENT AT PAGE
57, HOUSE OF REPRESENTATIVES REPORT NO. 13, 90TH CONGRESS, FIRST
SESSION, DATED FEBRUARY 13, 1967, COMMITTEE ON ARMED SERVICES, ON H.R. 2
WHICH STATES:
"IT IS NOT, HOWEVER, CONSIDERED APPROPRIATE THAT MEMBERS OF THE
NATIONAL GUARD OR OF ANY OTHER RESERVE COMPONENT SHOULD RECEIVE PER DIEM
FOR ATTENDANCE AT WEEKLY DRILLS OR DUTY IN LIEU OF WEEKLY DRILLS OR FOR
PERFORMANCE OF THEIR 2 WEEKS OF ANNUAL ACTIVE DUTY FOR TRAINING AT A
MILITARY INSTALLATION WHERE QUARTERS AND MESSING ARE, IN FACT,
AVAILABLE."
SECTION 502(A) OF TITLE 32, UNITED STATES CODE, PROVIDES THAT UNDER
REGULATIONS TO BE PRESCRIBED BY THE SECRETARY OF THE ARMY OR THE
SECRETARY OF THE AIR FORCE, AS THE CASE MAY BE, EACH COMPANY, BATTERY,
SQUADRON, AND DETACHMENT OF THE NATIONAL GUARD, UNLESS EXCUSED BY THE
SECRETARY CONCERNED, SHALL (1) ASSEMBLE FOR DRILL AND INSTRUCTION,
INCLUDING INDOOR TARGET PRACTICE AT LEAST 48 TIMES EACH YEAR; AND (2)
PARTICIPATE IN TRAINING AT ENCAMPMENTS, MANEUVERS, OUTDOOR TARGET
PRACTICE, OR OTHER EXERCISES, AT LEAST 15 DAYS EACH YEAR. SECTION
502(F) PROVIDES IN PERTINENT PART THAT A MEMBER OF THE NATIONAL GUARD
MAY (1), WITHOUT HIS CONSENT OR (2) WITH HIS CONSENT, BE ORDERED TO
PERFORM TRAINING OR OTHER DUTY IN ADDITION TO THAT PRESCRIBED IN
SUBSECTION (A).
SECTION 503(A) STATES THAT UNDER SUCH REGULATIONS AS THE PRESIDENT
MAY PRESCRIBE, THE SECRETARY OF THE ARMY AND THE SECRETARY OF THE AIR
FORCE, AS THE CASE MAY BE, MAY PROVIDE FOR THE PARTICIPATION OF THE
NATIONAL GUARD IN ENCAMPMENTS, MANEUVERS, OUTDOOR TARGET PRACTICE, OR
OTHER EXERCISES FOR FIELD OR COAST-DEFENSE INSTRUCTION, INDEPENDENTLY OF
OR IN CONJUNCTION WITH THE ARMY OR THE AIR FORCE, OR BOTH.
WE ARE OF THE OPINION THAT THE LEGISLATIVE HISTORY OF 37 U.S.C.
404(A)(4) SHOWS THE INTENTION TO EXCLUDE PER DIEM AT MILITARY
INSTALLATIONS WHERE GOVERNMENT QUARTERS AND MESS ARE AVAILABLE, ONLY FOR
THE ANNUAL TRAINING DUTY PERFORMED UNDER 32 U.S.C. 502(A), WHICH IS THE
MINIMUM DUTY ORDINARILY REQUIRED OF A NATIONAL GUARDSMAN OR MEMBER OF AN
ACTIVE RESERVE COMPONENT. IN OUR VIEW, SUCH RESTRICTION DOES NOT APPLY
TO ADDITIONAL TRAINING DUTY PERFORMED UNDER SECTIONS 502(F) AND 503(A)
OF TITLE 32, UNITED STATES CODE.
AIR NATIONAL GUARD REGULATION NO. 50-03, JULY 1, 1965, INDICATES THAT
TACTICAL FIGHTER UNITS (WINGS, GROUPS AND ASSIGNED SQUADRONS) ARE
REQUIRED TO SERVE THEIR 15 DAYS OF ANNUAL TRAINING UNDER THE "FIFTEEN
DAY FIELD TRAINING" PLAN. "FIFTEEN DAY FIELD TRAINING" IS DEFINED AS
THE CONDUCT OF FIELD TRAINING BY THE ENTIRE UNIT FOR 15 CONSECUTIVE
DAYS.
VOLUNTARY PARTICIPATION OF ONLY SOME OF THE 156 TACTICAL FIGHTER
GROUP'S MEMBERS IN AN EXERCISE LASTING SUBSTANTIALLY LESS THAN 15
CONSECUTIVE DAYS, AND ORDERED UNDER SECTION 503, CLEARLY WAS NOT
INTENDED AS A PART OF THE "FIFTEEN DAY FIELD TRAINING" AS DEFINED IN AIR
NATIONAL GUARD REGULATION NO. 50-03, AND WHICH IS OBLIGATORY FOR THE
UNIT TO SATISFY THE YEARLY FIELD TRAINING REQUIREMENT OF 32 U.S.C.
502(A). THE RECORD BEFORE US INDICATES THAT THE GROUP WOULD BE REQUIRED
TO UNDERGO ANNUAL FIELD TRAINING FOR THE PERIOD FROM MAY 31 THROUGH JUNE
13, 1970, AT AIR NATIONAL GUARD PERMANENT TRAINING SITE, SAVANNAH,
GEORGIA.
WE ARE IN ACCORD WITH THE VIEW OF THE NATIONAL GUARD BUREAU THAT
UTILIZATION OF AN APPROPRIATION NORMALLY USED FOR ANNUAL FIELD TRAINING,
IN THIS INSTANCE, HAD NO RELATIONSHIP TO THE NATURE OF THE DUTY
PERFORMED. IN LIGHT OF THE CIRCUMSTANCES, PARTICIPATION IN SOUTH COVER
III EXERCISE IS NOT CONSIDERED AS ANNUAL FIELD TRAINING FOR WHICH THE
PAYMENT OF PER DIEM IS BARRED BY PARAGRAPH M6001-3 OF THE JOINT TRAVEL
REGULATIONS.
PARAGRAPH M4250 OF THE JOINT TRAVEL REGULATIONS PROVIDES THAT A
MEMBER OF THE UNIFORMED SERVICES IS ENTITLED TO TRAVEL PER DIEM
ALLOWANCES FOR PERIODS OF TRAVEL AND/OR TEMPORARY DUTY PERFORMED UNDER
COMPETENT ORDERS OUTSIDE CONTINENTAL UNITED STATES EXCEPT:
"3. WHILE PARTICIPATING IN MANEUVERS, FIELD EXERCISES, SIMULATED WAR
GAMES, TRAINING ENCAMPMENTS FOR THE RESERVE COMPONENTS OR RESERVE
OFFICERS TRAINING CORPS STUDENTS, AND OTHER SIMILAR ACTIVITIES
(INCLUDING DUTY AS OBSERVER OR UMPIRE) WHERE BOTH RATIONS IN KIND
(INCLUDING FIELD RATIONS) AND QUARTERS ARE AVAILABLE OR FURNISHED
WHETHER OR NOT SUCH FACILITIES ARE UTILIZED. *** THIS LIMITATION DOES
NOT APPLY (1) WHEN PARTICIPATION IN THE TYPES OF DUTY SPECIFIED HEREIN
INVOLVES TEMPORARY DUTY ON AN INSTALLATION OF THE UNIFORMED SERVICES AND
PER DIEM IS AUTHORIZED IN ACCORDANCE WITH REGULATIONS BY THE SECRETARY
OF THE UNIFORMED SERVICE CONCERNED *** ."
PARAGRAPH 20431 OF AIR FORCE MANUAL 177-103, IN EFFECT DURING THE
PERIOD IN QUESTION, PROVIDES IN PERTINENT PART THAT THE SECRETARY OF THE
AIR FORCE HAS DETERMINED THAT AIR FORCE MEMBERS ENGAGED IN TYPES OF DUTY
DESCRIBED IN PARAGRAPH M4250-3 OF THE JOINT TRAVEL REGULATIONS, ARE
ENTITLED TO PER DIEM WHEN DUTY IS PERFORMED ON A MILITARY INSTALLATION,
AND SLEEPING ACCOMMODATIONS AND SUBSISTENCE ARE NOT PROVIDED UNDER FIELD
CONDITIONS. PARAGRAPH 20433 INDICATES THAT SLEEPING ACCOMMODATIONS UNDER
FIELD CONDITIONS CONSIST OF TENTAGE, DUGOUTS, LEAN-TOS, OR STRUCTURES
NOT SUITABLE FOR REGULAR OCCUPANCY, AND SUBSISTENCE UNDER FIELD
CONDITIONS CONSISTS OF RATIONS PREPARED IN A FIELD KITCHEN OR MESS, OR
COLD PREPARED RATIONS COMMON TO THE OPERATION, AND MADE AVAILABLE TO
PARTICIPANTS.
THE RECORD BEFORE US DOES NOT DISCLOSE THE CONDITIONS UNDER WHICH THE
DUTY INVOLVED WAS PERFORMED AT HOWARD AIR FORCE BASE. THE LEGISLATIVE
INTENT, HOWEVER, IN ADDING SECTION 404(A)(4) OF TITLE 37, U.S. CODE, WAS
TO PROVIDE THE SAME ENTITLEMENT TO ALL MILITARY PERSONNEL IN THE MATTER
OF PER DIEM ELIGIBILITY WHEN THE CIRCUMSTANCES ARE ESSENTIALLY THE SAME.
THEREFORE, IF MEMBERS OF A REGULAR COMPONENT WOULD HAVE BEEN ENTITLED
TO PER DIEM FOR PERFORMING TEMPORARY DUTY UNDER THE SAME CIRCUMSTANCES,
WE ARE OF THE OPINION THAT PARAGRAPH M4250-3 WOULD NOT BAR THE PAYMENT
OF PER DIEM TO LIEUTENANT RIVERA. ACCORDINGLY, THE CLAIM OF LIEUTENANT
RIVERA IS RETURNED AND PAYMENT IS AUTHORIZED IF IT BE DETERMINED THAT HE
IS ENTITLED TO PER DIEM ON THE BASIS SET FORTH ABOVE. ALSO, SIMILAR
ACTION MAY BE TAKEN ON THE VOUCHERS PRESENTED BY THE OTHER MEMBERS WHO
HAVE SUBMITTED SIMILAR CLAIMS.
B-171708, FEB 18, 1971
CIVILIAN EMPLOYEES - TRAVEL EXPENSES - INDIRECT ROUTE
AUTHORIZING PAYMENT OF A TRAVEL VOUCHER SUBMITTED BY AN EMPLOYEE OF
THE BUREAU OF RECLAMATION FOR TRAVEL FROM HIS STATION AT BILLINGS,
MONTANA, TO PORTLAND, OREGON, TO PARTICIPATE IN A MIDDLE MANAGEMENT
INSTITUTE AND RETURN TO BILLINGS BY INDIRECT ROUTE THROUGH DENVER,
COLORADO.
SINCE RETURN BY DIRECT ROUTE WAS DELAYED BY A STRIKE AGAINST
NORTHWEST ORIENT AIRLINES, TRAVEL BY INDIRECT ROUTE USING ANOTHER
AIRLINE WAS JUSTIFIED AND IS WITHIN THE PROVISIONS OF SECTION 3.2 OF THE
STANDARDIZED GOVERNMENT TRAVEL REGULATIONS.
TO MR. C. H. LUCAS:
YOUR LETTER OF DECEMBER 31, 1970, REF. NO. 375, REQUESTS A DECISION
AS TO WHETHER A TRAVEL VOUCHER FOR $102.75, SUBMITTED BY MR. RICHARD D.
DOHERTY, AN EMPLOYEE OF THE BUREAU OF RECLAMATION, MAY BE CERTIFIED FOR
PAYMENT IN THE CIRCUMSTANCES PRESENTED.
BY TRAVEL AUTHORIZATION 71-140, DATED OCTOBER 28, 1970, MR. DOHERTY
WAS AUTHORIZED TO TRAVEL ON OR ABOUT NOVEMBER 16, 1970, FROM HIS STATION
AT BILLINGS, MONTANA, TO PORTLAND, OREGON. HE WAS TO PARTICIPATE IN A
MIDDLE MANAGEMENT INSTITUTE AND UPON COMPLETION ON OR ABOUT NOVEMBER 20,
1970, WAS TO RETURN TO HIS DUTY STATION. A ROUND TRIP AIR FLIGHT TICKET
VIA NORTHWEST ORIENT AIRLINES WAS ISSUED FOR HIS TRAVEL.
THE TRAVEL DIARY BY MR. DOHERTY SHOWS THAT HE TRAVELED BY NORTHWEST
ORIENT AIRLINES, ARRIVING IN PORTLAND, OREGON, AT 8:30 P.M., ON NOVEMBER
16, 1970. THE INSTITUTE ENDED AT 12 NOON ON FRIDAY, NOVEMBER 20 AND HE
DEPARTED PORTLAND BY UNITED AIRLINES AT 2:30 P.M., THAT DAY, TRAVELING
BY INDIRECT ROUTE THROUGH DENVER, COLORADO, ARRIVING AT HIS OFFICIAL
DUTY STATION AT 7:30 P.M. THE EMPLOYEE IS CLAIMING PER DIEM FOR 4-1/2
DAYS AT $22 ($99) PLUS MISCELLANEOUS EXPENSES OF $3.75, FOR A TOTAL OF
$102.75, OFFSET BY A TRAVEL ADVANCE OF $100.
YOU SAY THAT ON FRIDAY, NOVEMBER 20, WHEN THE EMPLOYEE COMPLETED HIS
TEMPORARY DUTY ASSIGNMENT, HE WAS UNABLE TO USE HIS RETURN TICKET DUE TO
A STRIKE AFFECTING THE NORTHWEST ORIENT AIRLINES AT THAT TIME. HE
THEREUPON ISSUED A TRANSPORTATION REQUEST FOR RETURN TO HIS OFFICIAL
DUTY STATION BY UNITED AIRLINES THROUGH DENVER, COLORADO, TO BILLINGS,
MONTANA, AN INDIRECT ROUTE AT A COST OF $111. INASMUCH AS THE CANCELLED
RETURN TRIP TICKET COST $71, AN ADDITIONAL COST OF $40 WAS INCURRED.
HOWEVER, YOU SAY THAT HIS RETURN BY DIRECT ROUTE THE NEXT DAY WOULD HAVE
INVOLVED AN ADDITIONAL PER DIEM OF $16.50, THEREBY REDUCING THE EXCESS
COST TO $23.50.
YOU SAY FURTHER THAT THE REGULATIONS REQUIRE AN EMPLOYEE TRAVELING BY
AN INDIRECT ROUTE FOR PERSONAL REASONS TO BEAR THE EXTRA EXPENSES
INCURRED THEREBY. HOWEVER, MR. DOHERTY CONTENDS THAT HIS ACTION IN
RETURNING TO HIS STATION ON FRIDAY, NOVEMBER 20, WAS JUSTIFIED, SINCE
HIS RETURN BY THE MOST DIRECT ROUTE WOULD HAVE REQUIRED HIM TO REMAIN
OVERNIGHT AT HIS TEMPORARY DUTY STATION AND TO TRAVEL ON SATURDAY, WHICH
IS A NONWORKDAY. YOU SAY THAT THIS VIEW IS SUPPORTED BY REGULATIONS
GOVERNING PAY FOR TIME IN A TRAVEL STATUS PROMULGATED FEBRUARY 2, 1969,
BY THE CIVIL SERVICE COMMISSION IN IMPLEMENTING THE PROVISIONS OF PUB.
L. 90-206, DECEMBER 16, 1967, 81 STAT. 613, ET SEQ. HOWEVER, YOU
EXPRESS DOUBT AS TO WHETHER THE VOUCHER MAY PROPERLY BE CERTIFIED IN
VIEW OF THE INDIRECT ROUTE USED IN THE TRAVEL PERFORMED. YOU SAY
FURTHER THAT THE EMPLOYEE'S SUPERVISOR HAS APPROVED THE VOUCHER, SUBJECT
TO FURTHER CONSIDERATION OF THE INDIRECT TRAVEL.
SECTION 1.2, STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, PROMULGATED
PURSUANT TO THE TRAVEL EXPENSE ACT OF 1949, AS AMENDED, 5 U.S.C.
5701-5708, PROVIDES IN PERTINENT PART THAT AN EMPLOYEE TRAVELING ON
OFFICIAL BUSINESS IS EXPECTED TO USE THE SAME CARE IN INCURRING EXPENSES
THAT A PRUDENT PERSON WOULD EXERCISE IF TRAVELING ON PERSONAL BUSINESS.
SECTION 3.2 OF THE REGULATIONS PROVIDES THAT ALL TRAVEL WILL BE BY A
USUALLY TRAVELED ROUTE AND THAT TRAVEL BY OTHER ROUTES MAY BE ALLOWED
WHEN THE OFFICIAL NECESSITY THEREFOR IS SATISFACTORILY ESTABLISHED.
SECTION 2.1 PROVIDES THAT ALL TRAVEL WILL EITHER BE AUTHORIZED OR
APPROVED BY THE HEAD OF THE AGENCY OR BY AN OFFICER TO WHOM SUCH
AUTHORITY HAS BEEN DELEGATED.
IT HAS BEEN INFORMALLY ASCERTAINED THAT PASSENGER SERVICE BY
NORTHWEST ORIENT AIRLINES WAS SUBSTANTIALLY REDUCED DUE TO A STRIKE AT
THE TIME UNDER CONSIDERATION AND THAT IT CONTINUED FOR A CONSIDERABLE
PERIOD THEREAFTER. WE UNDERSTAND THAT THE SERVICE PROVIDED BY THAT
AIRLINE DURING THE STRIKE WAS LIMITED, THAT FLIGHT SCHEDULES WERE
UNCERTAIN AND THAT NOT ALL DESTINATIONS WERE SERVICED. FOR THAT REASON,
THE MATTER OF TRAVELING ON SATURDAY IS NOT MATERIAL SINCE MR. DOHERTY
MAY NOT (EVEN ON SATURDAY) HAVE BEEN ABLE TO RETURN TO HIS OFFICIAL
STATION IN BILLINGS, MONTANA, BY USING NORTHWEST ORIENT AIRLINES, WHICH
WAS THE ONLY DIRECT ROUTE AVAILABLE. THEREFORE, UNDER THE CIRCUMSTANCES
DISCLOSED, IT MAY REASONABLY BE CONCLUDED THAT THE NECESSITY FOR
OFFICIAL TRAVEL BY AN INDIRECT ROUTE USING ANOTHER AIRLINE WAS
ESTABLISHED WITHIN THE MEANING OF SECTION 3.2 OF THE REGULATIONS.
ALTHOUGH A LOWER COST FLIGHT BY UNITED AIRLINES THROUGH SALT LAKE
CITY, UTAH, WAS SCHEDULED FOR DEPARTURE ON FRIDAY, NOVEMBER 20, 1970,
FROM PORTLAND, OREGON, AT 1:15 P.M., AND ARRIVAL AT BILLINGS, MONTANA,
AT 11:02 P.M., THAT DAY, IT MAY HAVE BEEN IMPRACTICAL FOR MR. DOHERTY TO
USE SUCH FLIGHT AFTER COMPLETION OF HIS TEMPORARY DUTY AT THE INSTITUTE
AT 12 NOON. IN VIEW THEREOF, IT MAY BE CONSIDERED THAT HE EXERCISED THE
JUDGMENT REQUIRED OF HIM WITHIN THE MEANING OF SECTION 1.2 OF THE
REGULATIONS. COMPARE B-157040, DATED SEPTEMBER 7, 1965, AND B-166451,
APRIL 15, 1969, COPIES ENCLOSED.
ACCORDINGLY, THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY BE
CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.
B-171835, FEB 18, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
MILITARY SERVICE OF CLAIMANT'S LATE FATHER PERFECTO DOMEN IN WORLD WAR
II ON BASIS THAT CLAIM WAS NOT RECEIVED WITHIN 10 YEARS FROM THE DATE IT
ACCRUED AS REQUIRED BY THE ACT OF OCTOBER 9, 1940, 31 U.S.C. 71A.
TO MR. ALBERTO DOMEN:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 30, 1970, ADDRESSED
TO SETTLEMENT OPERATION CENTER, U.S. ARMY, INDIANAPOLIS, INDIANA, AND
FORWARDED TO THIS OFFICE FOR REPLY, CONCERNING YOUR CLAIM FOR
MUSTERING-OUT PAY BELIEVED DUE IN THE CASE OF YOUR LATE FATHER, PERFECTO
DOMEN, INCIDENT TO HIS MILITARY SERVICE IN WORLD WAR II.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
OCTOBER 15, 1968, AND JULY 9, 1969, IN WHICH YOU WERE ADVISED THAT YOUR
CLAIM FOR SUCH PAY WAS BARRED BY THE ACT OF OCTOBER 9, 1940, 54 STAT.
1061, SINCE IT WAS NOT RECEIVED IN OUR OFFICE WITHIN THE 10-YEAR PERIOD
PRESCRIBED IN THAT ACT.
CONCERNING YOUR PRESENT BELIEF THAT YOUR FATHER WAS ENTITLED TO
$3,000 MUSTERING-OUT PAY UNDER THE PROVISIONS OF ACT NO. 263 OF THE 88TH
CONGRESS, WHICH YOU SAY WAS APPROVED ON SEPTEMBER 30, 1965, YOU ARE
ADVISED THAT NEITHER PUBLIC LAW 88-273 (WHICH WAS APPROVED JANUARY 31,
1964, AND HAD NOTHING TO DO WITH MUSTERING-OUT PAY) NOR ANY OTHER LAW OF
WHICH WE ARE AWARE, AUTHORIZES A MUSTERING-OUT PAYMENT OF $3,000 TO
ANYONE.
ANY RIGHT YOUR FATHER MAY HAVE HAD TO MUSTERING-OUT PAY FROM THE
UNITED STATES ACCRUED UNDER THE MUSTERING-OUT PAYMENT ACT OF 1944, CH.
9, 58 STAT. 8, AS AMENDED, 38 U.S.C. 691 ET SEQ. (1946 ED.), AND
IMPLEMENTING REGULATIONS CONTAINED IN PARAGRAPHS 313-322 OF TECHNICAL
MANUAL 14-502. HOWEVER, ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THOSE
PROVISIONS AND REGULATIONS ARE SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR
LIMITATION PRESCRIBED BY THE 1940 ACT.
YOUR FATHER DID NOT FILE A CLAIM WITH THIS OFFICE FOR MUSTERING-OUT
PAY AND IN VIEW OF THE FACT THAT YOUR CLAIM WAS FIRST RECEIVED IN OUR
OFFICE ON SEPTEMBER 3, 1968, MORE THAN 10 YEARS AFTER HIS DISCHARGE ON
MAY 31, 1946, THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY TAKE ON
SUCH CLAIM.
B-168360(1), FEB 17, 1971
CONTRACTS - DEFAULT - SURETY
ADVISING THAT CONTRACT FUNDS REMAINING UNDER CERTAIN NAVY CONTRACTS
WITH MIKE BRADFORD & CO., INC., WHICH IS INVOLVED IN A BANKRUPTCY
PROCEEDING ARE SUBJECT TO CONTINENTAL CASUALTY COMPANY'S RIGHT TO
REIMBURSEMENT FOR EXPENSES UNDER THE PERFORMANCE BONDS OF THE CONTRACTS
ON WHICH IT WAS SURETY, SUBJECT ONLY TO THE RIGHT OF THE GOVERNMENT TO
RECOUP ITS OWN CONTRACT COMPLETION COSTS. HOWEVER, ANY OTHER CLAIMS OF
CONTINENTAL AGAINST THE CONTRACTOR, INCLUDING THOSE ARISING IN
CONNECTION WITH THE DISCHARGE OF ITS OBLIGATION UNDER CONTRACT PAYMENT
BONDS, WOULD BE INFERIOR TO THE GOVERNMENT'S RIGHT OF SET-OFF FOR THE
CONTRACTOR'S DEBTS TO THE UNITED STATES.
TO MR. SECRETARY:
REFERENCE IS MADE TO LETTER DATED DECEMBER 8, 1970,
FAC-0211E/RSL:RME, FROM THE NAVAL FACILITIES ENGINEERING COMMAND,
CONCERNING THE QUESTION OF ENTITLEMENT TO CONTRACT FUNDS REMAINING UNDER
CERTAIN NAVY CONTRACTS WITH MIKE BRADFORD & COMPANY, INCORPORATED,
MIAMI, FLORIDA, WHICH IS INVOLVED IN A BANKRUPTCY PROCEEDING (UNITED
STATES DISTRICT COURT, SOUTHERN DISTRICT OF FLORIDA, MIAMI, FLORIDA, IN
BANKRUPTCY NO. 68-483, BK-TC).
IT IS REPORTED THAT MIKE BRADFORD & COMPANY, INCORPORATED, WAS
PERFORMING SIX CONSTRUCTION CONTRACTS FOR THE DEPARTMENT OF THE NAVY
BEFORE BEING PLACED IN DEFAULT DURING THE MONTH OF MARCH 1968. THE
CONTINENTAL CASUALTY COMPANY, CHICAGO, ILLINOIS, IS THE SURETY ON THE
PERFORMANCE AND PAYMENT BONDS UNDER FIVE OF THE SIX CONTRACTS. THE
PARTIES HAVE AGREED THAT ANY CLAIMS OF CONTINENTAL CONCERNING ONE OF THE
FIVE CONTRACTS WILL BE CONSIDERED SEPARATELY. THE OTHER FOUR CONTRACTS
CONSIDERED IN THE LETTER OF DECEMBER 8, 1970, ARE NOS. NBY-67651,
NBY-71005, NBY-75934 AND NBY-81568.
THE CONTRACTOR REPORTEDLY DID NOT DEFAULT UNDER CONTRACT NO.
NBY-71005, AND THERE IS AN AVAILABLE CONTRACT BALANCE OF $30,981.24.
CONTINENTAL HAS INDICATED THAT IT SUFFERED NO LOSSES UNDER THE BONDS FOR
THAT CONTRACT, AND IT IS PROPOSED TO APPLY THE CONTRACT BALANCE TOWARD
SATISFACTION OF A CLAIM OF THE DEPARTMENT OF THE AIR FORCE AGAINST THE
CONTRACTOR FOR $189,318.84, COVERING CONTRACTOR SUPPORT SERVICES AND
MILITARY AIRLIFT COMMAND SERVICES PROVIDED UNDER CONTRACT NO.
NBY-71005.
THE CONTRACTOR DEFAULTED UNDER THE OTHER THREE CONTRACTS.
CONTINENTAL REPORTEDLY AGREED TO AN ASSESSMENT OF $42,593.52 AGAINST IT
FOR EXCESS COSTS OCCASIONED THE GOVERNMENT IN CONNECTION WITH THE
COMPLETION OF CONTRACT NO. NBY-81568. UNDER CONTRACT NO. NBY-75934,
THERE WAS AN AVAILABLE CONTRACT BALANCE OF $38,917.98 WHEN THE
CONTRACTOR DEFAULTED. BOTH THE GOVERNMENT AND CONTINENTAL INCURRED COSTS
FOR COMPLETION OF THE CONTRACT WORK. THE GOVERNMENT EXPENDED THE AMOUNT
OF $4,183 AND CONTINENTAL EXPENDED APPROXIMATELY $52,600. IT IS
PROPOSED TO WITHHOLD THE SUM OF $4,183 SO THAT THE GOVERNMENT WOULD
RECOVER ITS CONTRACT COMPLETION COSTS, AND TO PAY CONTINENTAL THE
DIFFERENCE BETWEEN THAT AMOUNT AND $38,917.98, OR $34,734.98.
UNDER CONTRACT NO. NBY-67651, FUNDS IN THE AMOUNT OF $747,945.44
REMAINED AVAILABLE FOR COMPLETION AT TIME OF DEFAULT. CONTINENTAL WAS
AWARDED A COMPLETION CONTRACT IN AN AMOUNT NOT TO EXCEED $400,000,
ALTHOUGH IT WAS RECOGNIZED THAT COMPLETION OF THE WORK PROBABLY WOULD
REQUIRE A GREATER EXPENDITURE. AT CONTINENTAL'S REQUEST, THE COMPLETION
CONTRACT INCLUDED A PROVISION TO THE EFFECT THAT EXECUTION OF THE
CONTRACT WOULD NOT PREJUDICE THE RIGHTS OF CONTINENTAL, AS SURETY UNDER
THE ORIGINAL CONTRACT, TO ANY UNPAID OR RETAINED AMOUNTS UNDER THE
ORIGINAL CONTRACT. IT HAS BEEN ADMINISTRATIVELY DETERMINED THAT
CONTINENTAL EXPENDED A MINIMUM OF $387,000, OVER AND ABOVE THE $400,000
MAXIMUM COMPLETION CONTRACT AMOUNT, IN DISCHARGING ITS OBLIGATIONS UNDER
THE CONTRACT PERFORMANCE BOND, AND IT IS PROPOSED TO PAY CONTINENTAL THE
ENTIRE AVAILABLE CONTRACT BALANCE OF $347,945.44.
THERE IS NO QUESTION AS TO CONTINENTAL'S RIGHT TO REIMBURSEMENT FOR
EXPENSES UNDER THE PERFORMANCE BONDS OF CONTRACTS NOS. NBY-75934 AND
NBY-67651 OUT OF MONEYS AVAILABLE FOR PAYMENT UNDER THE CONTRACTS, AND
SUBJECT ONLY TO THE RIGHT OF THE GOVERNMENT TO RECOUP ITS OWN CONTRACT
COMPLETION COSTS IN THE CASE OF CONTRACT NO. NBY-75934. SEE SECURITY
INSURANCE COMPANY OF HARTFORD V UNITED STATES, 428 F. 2D 838 (CT. CL.
1970). HOWEVER, ANY OTHER CLAIMS OF CONTINENTAL AGAINST THE CONTRACTOR,
INCLUDING THOSE ARISING IN CONNECTION WITH THE DISCHARGE OF
CONTINENTAL'S OBLIGATION UNDER CONTRACT PAYMENT BONDS, WOULD BE INFERIOR
TO THE GOVERNMENT'S RIGHT OF SET-OFF FOR THE CONTRACTOR'S DEBTS TO THE
UNITED STATES. WE THEREFORE AGREE WITH THE RECOMMENDATIONS FOR
ALLOWANCE OF THE AMOUNTS OF $34,734.98 AND $347,945.44 SUBJECT TO THE
GOVERNMENT'S CLAIM OF $42,593.52 AGAINST CONTINENTAL UNDER THE
PERFORMANCE BOND FOR CONTRACT NO. NBY-81568 TO WHICH CONTINENTAL
REPORTEDLY AGREES. WE ALSO AGREE WITH THE RECOMMENDATION THAT THE
$30,981.24 BALANCE DUE UNDER CONTRACT NO. NBY-71005 BE WITHHELD IN
PARTIAL LIQUIDATION OF THE CLAIM OF THE DEPARTMENT OF THE AIR FORCE FOR
SERVICES RENDERED IN CONNECTION WITH THE PERFORMANCE OF THAT CONTRACT.
OUR RECORDS SHOW THAT THE AIR FORCE CLAIM WAS THE SUBJECT OF A PROOF OF
CLAIM FILED IN THE BANKRUPTCY PROCEEDING.
A COPY OF THIS DECISION IS BEING FORWARDED TO THE SECRETARY OF THE
AIR FORCE.
B-168360(2), FEB 17, 1971
CONTRACTS - DEFAULT - SURETY
ADVISING THAT CONTRACT FUNDS HELD BY THE AIR FORCE REMAINING UNDER
CONTRACTS OF THE DEPARTMENT OF DEFENSE WITH MIKE BRADFORD & CO., INC.,
WHICH IS INVOLVED IN A BANKRUPTCY PROCEEDING SHOULD BE MADE AVAILABLE
FOR PAYMENT TO UNITED STATES FIDELITY & GUARANTY COMPANY AS SURETY ON
THE CONTRACT PERFORMANCE BOND SINCE THE SURETY'S RIGHT TO REIMBURSEMENT
FOR EXPENDITURES INCURRED IN DISCHARGING ITS OBLIGATIONS UNDER THE BOND
IS SUPERIOR TO THE GOVERNMENT'S RIGHT TO SET-OFF FOR CONTRACTOR DEBTS TO
THE UNITED STATES ARISING UNDER OTHER CONTRACTS.
TO MR. SECRETARY:
REFERENCE IS MADE TO LETTER DATED DECEMBER 23, 1970, AF/ACC, FROM
HEADQUARTERS, UNITED STATES AIR FORCE, CONCERNING THE ENTITLEMENT TO
CONTRACT FUNDS REMAINING UNDER CERTAIN CONTRACTS OF THE DEPARTMENT OF
DEFENSE WITH MIKE BRADFORD & COMPANY, INCORPORATED, MIAMI, FLORIDA,
WHICH IS INVOLVED IN A BANKRUPTCY PROCEEDING (UNITED STATES DISTRICT
COURT, SOUTHERN DISTRICT OF FLORIDA, MIAMI, FLORIDA, IN BANKRUPTCY NO.
68-483, BK-TC).
IT IS REPORTED THAT THE AIR FORCE IS INVOLVED TO THE EXTENT THAT IT
HAS A CLAIM AGAINST THE CONTRACTOR IN THE AMOUNT OF $189,318.84 FOR
AIRLIFT AND SUPPORT SERVICES FURNISHED BY THE AIR FORCE IN CONNECTION
WITH THE PERFORMANCE OF NAVY CONTRACT NO. NBY-71005; THAT THE AIR FORCE
IS HOLDING $44,513.32 WHICH WAS WITHHELD UNDER AN ARMY CONTRACT WITH
MIKE BRADFORD & COMPANY, INCORPORATED, AT AIR FORCE REQUEST; AND THAT
THE AIR FORCE HAS NOT APPLIED THE $44,513.32 BALANCE AGAINST THE
$189,318.84 CLAIM OF THE AIR FORCE, INASMUCH AS THE SURETY FOR THE ARMY
CONTRACT, UNITED STATES FIDELITY AND GUARANTY COMPANY, HAS CLAIMED
ENTITLEMENT TO THAT AMOUNT.
THE RECORD SHOWS THAT THE SURETY ENTERED INTO A TAKE-OVER AGREEMENT
WITH THE DEPARTMENT OF THE ARMY AFTER THE CONTRACTOR DEFAULTED AND THAT
THE SURETY'S COMPLETION COSTS WERE CONSIDERABLY IN EXCESS OF THE
$44,513.32 AVAILABLE UNDER THE ARMY CONTRACT AT THE TIME THE CONTRACTOR
DEFAULTED. THE AIR FORCE JUDGE ADVOCATE GENERAL'S OFFICE CONCURRED WITH
THE SURETY'S POSITION THAT THE SUM OF $44,513.32 IS PROPERLY OWING TO
THE SURETY.
IN ACCORDANCE WITH THE CONCLUSIONS REACHED BY THE COURT OF CLAIMS IN
THE CITED CASE OF SECURITY INSURANCE COMPANY OF HARTFORD V UNITED
STATES, 428 F. 2D 838 (CT. CL. 1970), THE SURETY'S RIGHT TO
REIMBURSEMENT FOR EXPENDITURES INCURRED IN DISCHARGING ITS OBLIGATIONS
UNDER THE CONTRACT PERFORMANCE BOND SHOULD BE CONSIDERED SUPERIOR TO THE
GOVERNMENT'S RIGHT OF SET-OFF FOR CONTRACTOR DEBTS TO THE UNITED STATES
ARISING UNDER OTHER CONTRACTS.
ACCORDINGLY, WE ARE OF THE OPINION THAT THE SUM OF $44,513.32, HELD
IN A SUSPENSE ACCOUNT, SHOULD BE RETURNED TO THE DEPARTMENT OF THE ARMY
FOR DISBURSEMENT TO THE UNITED STATES FIDELITY AND GUARANTY COMPANY AS
SURETY ON THE ARMY CONTRACT PERFORMANCE BOND.
THE LETTER OF DECEMBER 23, 1970, ALSO REFERS TO CERTAIN NAVY
CONTRACTS WITH MIKE BRADFORD & COMPANY, INCORPORATED. IN OUR DECISION
OF TODAY TO THE SECRETARY OF THE NAVY, COPY HEREWITH, WE CONCUR WITH THE
ADMINISTRATIVE RECOMMENDATIONS REGARDING THE QUESTION OF ENTITLEMENT TO
BALANCES REMAINING DUE FROM THE GOVERNMENT UNDER THREE NAVY CONTRACTS.
THERE WAS INCLUDED A RECOMMENDATION FOR SET-OFF OF THE SUM OF $30,981.24
REMAINING DUE UNDER NAVY CONTRACT NO. NBY-71005 AGAINST THE AIR FORCE
CLAIM IN THE AMOUNT OF $189,318.84. SINCE THE AIR FORCE CLAIM WAS THE
SUBJECT OF A PROOF OF CLAIM FILED IN THE BANKRUPTCY PROCEEDING, THE
DEPARTMENT OF JUSTICE SHOULD BE ADVISED OF ANY SET-OFF ACTION PROPOSED
TO BE TAKEN BY YOUR DEPARTMENT IN THE MATTER.
B-170636, FEB 17, 1971
BID PROTEST
AFFIRMING PRIOR DECISION DENYING PROTEST BY CCA ELECTRONICS CORP.,
AGAINST REJECTION OF ITS BID UNDER AN INVITATION FOR THE PROCUREMENT OF
A TRANSMITTER ISSUED BY THE FEDERAL COMMUNICATIONS COMMISSION.
GAO DOES NOT HAVE THE FACILITIES OR AUTHORITY TO CONDUCT ADVERSARY
PROCEEDINGS IN RENDERING DECISIONS IN THE BID PROTEST AREA AND MUST
INSTEAD BE BASED UPON THE WRITTEN RECORD PRESENTED BY THE INTERESTED
PARTIES. A DETERMINATION OF WHETHER OR NOT A PRODUCT MEETS THE REQUIRED
SPECIFICATIONS IS PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE
AGENCY AND BECAUSE PROTESTANT HAS NOT PRESENTED ANY NEW FACTS OR
EVIDENCE WHICH WOULD WARRANT REVERSAL OF THE CONCLUSION THAT ITS BID WAS
PROPERLY REJECTED, THAT DECISION IS AFFIRMED.
TO CCA ELECTRONICS CORPORATION:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 7, 1970, CONCERNING OUR
DECISION, B-170636, NOVEMBER 10, 1970, IN WHICH WE DENIED YOUR PROTEST
AGAINST REJECTION OF YOUR BID UNDER INVITATION FOR BIDS NO. 70-15,
ISSUED BY THE FEDERAL COMMUNICATIONS COMMISSION, FOR THE PROCUREMENT OF
A TRANSMITTER IN ACCORDANCE WITH DESIGNATED SPECIFICATIONS.
YOU MAINTAIN THAT CONTRARY TO FCC'S REPORT TO OUR OFFICE, YOUR OFFER
WAS NOT EVALUATED ON ITS MERITS; THAT YOU HAVE THE CAPABILITY OF
SUPPLYING A PRODUCT THAT MEETS OR EXCEEDS THE FCC REQUIREMENTS; AND
THAT THE ARBITRARY DECISION OF FCC SERIOUSLY JEOPARDIZES YOUR
OPPORTUNITIES FOR GOVERNMENT BUSINESS. IN ADDITION, YOU REQUEST THE
ASSISTANCE OF OUR OFFICE IN ARRANGING A MEETING BETWEEN YOUR FIRM, FCC,
AND AN IMPARTIAL ARBITRATOR TO RESOLVE THESE DISPUTED POINTS.
SINCE OUR OFFICE DOES NOT HAVE THE FACILITIES OR AUTHORITY TO CONDUCT
ADVERSARY PROCEEDINGS IN RENDERING DECISIONS IN THE BID PROTEST AREA,
OUR DECISIONS ARE OF NECESSITY BASED UPON THE WRITTEN RECORD PRESENTED
BY THE INTERESTED PARTIES. AS POINTED OUT IN OUR EARLIER DECISION, THE
DETERMINATION WHETHER PRODUCTS OFFERED MEET THE SPECIFICATIONS IS
PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE AGENCY CONCERNED, TO
BE QUESTIONED BY OUR OFFICE ONLY WHEN NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE. SINCE YOU HAVE NOT PRESENTED ANY FACTS OR EVIDENCE WHICH
WOULD WARRANT REVERSAL OF OUR CONCLUSION THAT YOUR BID WAS PROPERLY
REJECTED, AND SINCE OUR REVIEW OF THE RECORD DISCLOSES NO SUCH BASIS,
OUR DECISION IS AFFIRMED.
WITH REGARD TO YOUR REQUEST CONCERNING ARBITRATION, WE ARE NOT AWARE
OF ANY ARBITRATION PROCEDURE AVAILABLE FOR RESOLUTION OF THE DISPUTED
MATTERS. WITH RESPECT TO YOUR CONCERN ABOUT THE EFFECT OF FCC'S
DETERMINATION ON YOUR OPPORTUNITIES FOR GOVERNMENT BUSINESS,
DETERMINATIONS RELATING TO THE ACCEPTABILITY OF YOUR PRODUCTS AND
CAPABILITY OF YOUR FIRM IN FUTURE PROCUREMENTS MUST BE MADE ON A CURRENT
BASIS IN CONNECTION WITH THE PARTICULAR PROCUREMENT AND IN ACCORDANCE
WITH APPLICABLE REGULATIONS.
B-170768(1), FEB 17, 1971
BID PROTEST - RESTRICTIVE SPECIFICATION - AMBIGUITY
DECISION DENYING PROTEST BY HEWLETT-PACKARD COMPANY, THIRD LOW
BIDDER, AGAINST CONTRACT FOR ELECTRONIC COUNTERS IN ACCORDANCE WITH FAA
SPECIFICATIONS, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, AND
PROPOSED AWARD TO LOW BIDDER, SYSTRON DONNER CORP.
WHERE A PORTION OF THE SPECIFICATION CALLS FOR A BASIC ELECTRONIC
COUNTER CAPABLE OF PRODUCING A RESOLUTION IN 1 SECOND AND FURTHER THAT
"THE CONVERTER UNIT SHALL RETAIN THE ACCURACY AND RESOLUTION OF BASIC
COUNTER", THE SYSTEM PROPOSED BY SUCCESSFUL BIDDER WHICH CAN PRODUCE THE
REQUIRED RESOLUTION IN 20 SECONDS IS RESPONSIVE IN THAT A REASONABLE
BIDDER CONVERSANT WITH THE SUBJECT MATTER SHOULD HAVE INTERPRETED THE
RESOLUTION REQUIREMENT AS PERMITTING EITHER THE EQUIPMENT PROPOSED BY
PROTESTANT OR SUCCESSFUL LOW BIDDER. FURTHER, AN AMBIGUOUS OR INCORRECT
SPECIFICATION DOES NOT REQUIRE CANCELLATION WHERE, AS HERE, THERE WAS NO
RESTRICTIVE EFFECT ON COMPETITION.
TO WALD, HARKRADER, NICHOLSON & ROSS:
THIS REFERS TO YOUR LETTER OF DECEMBER 8, 1970, AND OTHER
CORRESPONDENCE RECEIVED IN CONNECTION WITH THE PROTEST BY
HEWLETT-PACKARD COMPANY (HPC) AGAINST THE PROPOSED AWARD OF A CONTRACT
TO SYSTRON DONNER CORPORATION UNDER INVITATION NO. FPNGG-Z-16638A,
ISSUED BY THE GENERAL SERVICES ADMINISTRATION.
THE INVITATION WAS ISSUED SEPTEMBER 18, 1969, AND CALLED FOR
ELECTRONIC COUNTERS IN ACCORDANCE WITH FEDERAL AVIATION ADMINISTRATION
SPECIFICATION FAA-E-2397, DATED APRIL 30, 1969, AS AMENDED BY THE
INVITATION. SOON AFTER THE INVITATION WAS ISSUED A NUMBER OF FIRMS
OBJECTED TO THE SPECIFICATION CONTENDING THAT IT WAS TOO RESTRICTIVE.
ON OCTOBER 13, 1969, GSA ISSUED AMENDMENT NO. 2 TO THE INVITATION TO
BROADEN THE SPECIFICATION, BUT CERTAIN FEATURES OF THIS AMENDMENT WERE
ALSO CRITICIZED AS RESTRICTIVE. AS A RESULT, GSA ISSUED AMENDMENT NO.
3 ON OCTOBER 29, 1969, TO POSTPONE THE BID OPENING "PENDING REVIEW AND
CLARIFICATION OF SPECIFICATION REQUIREMENTS." FINALLY, ON MARCH 12,
1970, AMENDMENT NO. 4 WAS ISSUED. THIS AMENDMENT INCLUDED SUBSTANTIAL
SPECIFICATION CHANGES AND SET BID OPENING FOR APRIL 16, 1970.
THE FOLLOWING BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION:
UNIT BID PRICE
SYSTRON DONNER $1,745
DANA LABORATORIES 1,990
HPC 2,084
MONSANTO COMPANY 2,243
BECKMAN INSTRUMENTS 2,250
ELDORADO ELECTRODATA CORP. 2,431
COMPUTER MEASUREMENTS 2,535.71
JEFFREY YOUNG & COMPANY 3,300 GSA PROPOSES TO M
AS THE LOW BIDDER. HOWEVER, HPC AND A NUMBER OF THE OTHER BIDDERS
INCLUDING DANA LABORATORIES PROTEST SUCH AN AWARD ON THE BASIS THAT
SYSTRON DONNER IS PROPOSING TO FURNISH EQUIPMENT WHICH DOES NOT MEET THE
SPECIFICATION.
THE SPECIFICATION CALLS FOR A BASIC ELECTRONIC COUNTER WITH A
FREQUENCY RANGE OF 0 TO A MINIMUM OF 150 MHZ. THE SPECIFICATION ALSO
CALLS FOR A FREQUENCY CONVERTER FUNCTION TO EXTEND THE RANGE CAPABILITY
OF THE COUNTER FROM 150 MHZ TO 3,000 MHZ. THE EXTENDED RANGE CAPABILITY
CAN BE ACHIEVED, APPARENTLY, EITHER BY USING A HETERODYNE UNIT OR A
TRANSFER OSCILLATOR. WITH RESPECT TO THE BASIC COUNTER, THE
SPECIFICATION REQUIRES A 1HZ RESOLUTION TO 150 MHZ IN A 1 SECOND
MEASUREMENT OR GATE TIME. FOR THE EXTENDED RANGES THE SPECIFICATION
(PARAGRAPH 3.17.2) REQUIRES THAT "THE CONVERTER UNIT SHALL RETAIN THE
ACCURACY AND RESOLUTION OF BASIC COUNTER." YOU READ PARAGRAPH 3.17.2 AS
MEANING THAT AT 3,000 MHZ THE CONVERTER MUST PROVIDE A 1HZ RESOLUTION IN
1 SECOND. YOU REPORT THAT ONLY A HETERODYNE UNIT IS CAPABLE OF
PROVIDING 1 HZ RESOLUTION IN 1 SECOND AT 3,000 MHZ, WHEREAS A TRANSFER
OSCILLATOR BECAUSE OF ITS MODE OF OPERATION WILL PROVIDE A 20 HZ
RESOLUTION AT 3,000 MHZ IN 1 SECOND OR A 1 HZ RESOLUTION IN 20 SECONDS.
ALTHOUGH THE INVITATION ITSELF DID NOT REQUIRE BIDDERS TO SPECIFY
MODEL NUMBERS, IT HAS BEEN DETERMINED THAT THE LOW BIDDER IS PROPOSING
TO FURNISH A COUNTER EMPLOYING THE TRANSFER OSCILLATOR TECHNIQUE. YOU
CONTEND THAT THIS WILL NOT MEET THE REQUIREMENTS OF PARAGRAPH 3.17.2.
IT SHOULD BE NOTED THAT HPC ALONE OF ALL THE BIDDERS DID SPECIFY A MODEL
NUMBER IN ITS BID AND THIS MODEL DOES INCLUDE A HETERODYNE UNIT.
GSA STATES THAT 3.17.2 WAS INTENDED MERELY TO REQUIRE THAT THE SAME
PERCENTAGE OF ACCURACY AND RESOLUTION OF THE BASIC COUNTER BE RETAINED
IN THE HIGHER FREQUENCIES; I.E., 1 HZ RESOLUTION AT 150 MHZ IN 1
SECOND, 10 HZ AT 1,500 MHZ IN 1 SECOND, AND 20 HZ AT 3,000 MHZ IN 1
SECOND. IN THIS CONNECTION, GSA REPORTS THAT THE INVITATION AMENDMENTS
WERE DESIGNED TO MAKE IT CLEAR TO BIDDERS THAT EQUIPMENT UTILIZING
EITHER A HETERODYNE UNIT OR THE TRANSFER OSCILLATOR PRINCIPLE WOULD BE
ACCEPTABLE UNDER THE SPECIFICATION. IT CITES THE FOLLOWING AMENDMENT
CHANGES:
(A) THE TITLE OF THE SPECIFICATION WAS CHANGED FROM "ELECTRONIC
COUNTER, DC TO 150 MHZ WITH PLUG-IN CAPABILITY" TO "ELECTRONIC COUNTER",
INDICATING A DIFFERENCE IN PRODUCT SINCE THE PLUG-IN CAPABILITY IS
ASSOCIATED WITH THE HETERODYNE FREQUENCY APPROACH. IN ADDITION, VARIOUS
SPECIFICATION PARAGRAPHS WERE REVISED TO SHOW THAT AN INSTRUMENT WHICH
DID NOT USE A PLUG-IN UNIT WOULD BE ACCEPTABLE.
(B) AMENDMENT NO. 4 ADDED THE LANGUAGE "IF A TUNING INDICATOR IS USED
IT SHALL BE CALIBRATED IN 50 MHZ OR 100 MHZ INCREMENTS" AND "WHEN
REQUIRED" IN CONNECTION WITH THE VOLTAGE LEVEL INDICATOR. GSA ADVISES
THAT CALIBRATION AND TUNING INDICATORS AND A VOLTAGE LEVEL INDICATOR ARE
CHARACTERISTICS OF THE HETERODYNE UNIT AND THAT THE INCLUSION OF THE
WORDS "IF" AND "WHEN REQUIRED" IN THE SPECIFICATION INDICATED THAT THE
HETERODYNE UNIT WAS NOT THE ONLY METHOD OF EXTENDING THE FREQUENCY RANGE
OF THE BASIC COUNTER CONTEMPLATED BY THE SPECIFICATION. ALTHOUGH
PARAGRAPH 3.17.2 WAS NOT CHANGED BY ANY OF THE AMENDMENTS, GSA BELIEVES
THAT IN THE CONTEXT OF THE SPECIFICATION AS REVISED, A REASONABLE BIDDER
CONVERSANT WITH THE SUBJECT MATTER SHOULD HAVE INTERPRETED THE
RESOLUTION REQUIREMENT IN THE MANNER INTENDED BY THE DRAFTERS.
YOU INSIST, HOWEVER, THAT PARAGRAPH 3.17.2 SPEAKS FOR ITSELF AND THAT
AS A RESULT OF THIS PARAGRAPH BIDDERS SUCH AS HPC, AND OTHERS, OFFERED
MORE EXPENSIVE EQUIPMENT THAN WAS NECESSARY UNDER THE ADMINISTRATIVE
INTERPRETATION. IN SUPPORT OF YOUR POSITION, YOU POINT TO THE FACT THAT
A MAJORITY OF THE BIDDERS ARE MAKING THE SAME COMPLAINT AS HPC. IT IS
YOUR CONTENTION THAT A MAJORITY OF THE BIDDERS WERE MISLED BY THE
SPECIFICATION WITH THE RESULT THAT FULL COMPETITION WAS NOT OBTAINED.
YOU CONCLUDE THAT THE GOVERNMENT SHOULD CANCEL THE INVITATION AND
READVERTISE THE PROCUREMENT UNDER A CLEAR SPECIFICATION.
AS YOU RECOGNIZE, INVITATIONS SHOULD NOT BE LIGHTLY CANCELED ONCE
BIDS ARE EXPOSED. IN THIS CASE WE ARE NOT PERSUADED THAT CANCELATION IS
JUSTIFIED. WE AGREE THAT GSA'S INTENT WITH RESPECT TO RESOLUTION COULD
HAVE BEEN EXPRESSED WITH GREATER CLARITY. HOWEVER, IT APPEARS THAT A
REASONABLE READING OF THE ENTIRE SPECIFICATION INDICATES THAT EITHER THE
TYPE OF EQUIPMENT PROPOSED BY SYSTRON DONNER OR THAT OFFERED BY HPC
WOULD BE ACCEPTABLE. ALTHOUGH YOU ALLEGE THAT HPC WAS MISLED BY THE
SPECIFICATION, WE HAVE NOT BEEN FURNISHED ANY EVIDENCE THAT HPC WAS IN
FACT PREJUDICED BECAUSE OF ITS INTERPRETATION OF PARAGRAPH 3.17.2. AN
AMBIGUOUS OR INCORRECT SPECIFICATION DOES NOT REQUIRE CANCELATION OF THE
PROCUREMENT IF THERE WAS NO RESTRICTIVE EFFECT ON COMPETITION.
AS FOR THE OTHER PROTESTING BIDDERS, THE EVIDENCE OF RECORD INDICATES
THAT ONLY ONE OF THESE BIDDERS RAISED ANY QUESTION WITH GSA BEFORE BID
OPENING CONCERNING THE MEANING OF PARAGRAPH 3.17.2, AND THIS BIDDER
(DANA LABORATORIES) INDICATED AT THE TIME THAT IT WAS ADOPTING THE
PROPORTIONAL OR PERCENTAGE RESOLUTION INTERPRETATION OF THE
SPECIFICATION PARAGRAPH. (ENCLOSED IS A COPY OF OUR LETTER OF TODAY TO
DANA LABORATORIES.)
UNDER THE CIRCUMSTANCES, WE DO NOT BELIEVE THAT A CANCELATION OF THE
INVITATION WOULD BE JUSTIFIED. YOUR PROTEST AGAINST THE PROPOSED AWARD
TO THE LOW BIDDER IS ACCORDINGLY DENIED.
B-170768(2), FEB 17, 1971
BID PROTEST - AMBIGUITY
DENIAL OF PROTEST BY DANA LABORATORIES, INC., AGAINST PROPOSED AWARD
TO LOW BIDDER, SYSTRON DONNER CORPORATION OF CONTRACT FOR ELECTRONIC
COUNTERS, ISSUED BY GSA.
ENCLOSING GAO'S DECISION ON THIS MATTER TO HEWLETT-PACKARD COMPANY,
ALSO PROTESTING THIS AWARD, CONCERNING THE ALLEGED AMBIGUITY IN CERTAIN
SPECIFICATIONS; IT IS FURTHER POINTED OUT THAT THE RECORD INDICATES
DANA ADOPTED THE INTERPRETATION OF THE SPECIFICATION INTENDED BY GSA
PRIOR TO BID OPENING AND IT WAS THEREFORE UNNECESSARY FOR GSA TO RESPOND
DIRECTLY TO PROTESTANT (DANA).
TO DANA LABORATORIES, INCORPORATED:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 8, 1970, AND THE PRIOR
CORRESPONDENCE PROTESTING AGAINST THE PROPOSED AWARD OF A CONTRACT TO
SYSTRON DONNER CORPORATION UNDER INVITATION NO. FPNGG-Z-16638A ISSUED
BY THE GENERAL SERVICES ADMINISTRATION.
THE INVITATION WAS ISSUED SEPTEMBER 18, 1969, AND CALLED FOR
ELECTRONIC COUNTERS IN ACCORDANCE WITH FEDERAL AVIATION ADMINISTRATION
SPECIFICATION FAA-E-2397, DATED APRIL 30, 1969, AS AMENDED BY THE
INVITATION. SOON AFTER THE INVITATION WAS ISSUED A NUMBER OF FIRMS
OBJECTED TO THE SPECIFICATION CONTENDING THAT IT WAS TOO RESTRICTIVE.
ON OCTOBER 13, 1969, GSA ISSUED AMENDMENT NO. 2 TO THE INVITATION TO
BROADEN THE SPECIFICATION, BUT CERTAIN FEATURES OF THIS AMENDMENT WERE
ALSO CRITICIZED AS BEING RESTRICTIVE. AS A RESULT GSA ISSUED AMENDMENT
NO. 3 ON OCTOBER 29, 1969, TO POSTPONE THE BID OPENING "PENDING REVIEW
AND CLARIFICATION OF SPECIFICATION REQUIREMENTS."
BY LETTER DATED DECEMBER 29, 1969, YOU WROTE TO GSA EXPRESSING
INTEREST IN BIDDING ON THIS PROCUREMENT AND LISTING A NUMBER OF
QUESTIONS CONCERNING THE SPECIFICATION. ONE QUESTION REFERRED TO
SPECIFICATION PARAGRAPH 3.17.2 WHICH PROVIDED THAT 'THE CONVERTER UNIT
SHALL RETAIN THE ACCURACY AND RESOLUTION OF BASIC COUNTER." YOU ASKED
WHETHER IT WAS ACCEPTABLE IF RESOLUTION WAS INTERPRETED TO MEAN A
CONSTANT PERCENTAGE OF READING. IN A LETTER DATED JANUARY 23, 1970, YOU
EXPANDED ON THIS POINT, STATING THAT:
" *** OUR INTERPRETATION OF 3.17.2 IS THAT A RESOLUTION ERROR EQUAL
TO OR LESS THAN THE RESOLUTION ERROR IN THE DIRECT COUNT MADE AS A
PERCENTAGE OF READING IS REQUIRED AT ALL FREQUENCIES, BUT THAT THE
MEASUREMENT PERIOD NEED NOT BE EXACTLY 1 SECOND. IF THIS INTERPRETATION
IS ACCEPTABLE, WE WILL PROCEED WITH OUR PROPOSAL ON THIS BASIS."
GSA APPARENTLY DID NOT DIRECTLY RESPOND TO ANY OF YOUR INQUIRIES BUT
RATHER ON MARCH 17, 1970, ISSUED AMENDMENT NO. 4 TO THE INVITATION.
THIS AMENDMENT INCLUDED SUBSTANTIAL SPECIFICATION CHANGES AND
ESTABLISHED BID OPENING FOR APRIL 16, 1970. PARAGRAPH 3.17.2 OF THE
SPECIFICATION REMAINED UNCHANGED.
ON APRIL 16, 1970, BIDS WERE OPENED AND SYSTRON DONNER WAS FOUND TO
BE THE LOW BIDDER AT A UNIT PRICE OF $1,745. YOUR FIRM WAS SECOND LOW
BIDDER AT $1,990 PER UNIT. SIX OTHER BIDS WERE ALSO RECEIVED INCLUDING
A BID FROM HEWLETT-PACKARD COMPANY.
IN A LETTER DATED APRIL 21, 1970, YOU WROTE TO GSA AS FOLLOWS:
"PARAGRAPHS 3.10.3 AND 3.10.5 DEFINE COUNTER ACCURACY AND RESOLUTION
FOR MEASUREMENTS UP TO 150 MHZ AS NOT EQUAL 1 HZ NOT EQUAL CRYSTAL
STABILITY, WITH A 1 SECOND MEASUREMENT TIME. PARAGRAPH 3.17.2 STATES
THAT THIS SAME ACCURACY AND RESOLUTION SHOULD BE DELIVERED WHEN THE
CONVERTER IS USED FOR THE MEASUREMENT OF FREQUENCIES UP TO 3000 MHZ. WE
INTERPRET THIS TO MEAN THAT ACCURACY SHOULD BE NOT EQUAL 10 HZ NOT EQUAL
CRYSTAL STABILITY AT 1500 MHZ WITH A 1 SECOND MEASUREMENT TIME.
ACCURACY SHOULD BE NOT EQUAL 20 HZ NOT EQUAL CRYSTAL STABILITY AT 3000
MHZ WITH A 1 SECOND MEASUREMENT TIME, ETC.
"IF THE ABOVE INTERPRETATION IS CORRECT, IT IS POSSIBLE THAT THE
COUNTER PROPOSED BY SYSTRON-DONNER COMPANY, THE LOW BIDDER, MAY NOT MEET
THE PERFORMANCE OF 3.17.2. THE MODEL 6053 MANUFACTURED BY
SYSTRON-DONNER REQUIRES SUBSTANTIALLY LONGER MEASUREMENT TIMES WHEN THE
CONVERTER IS EMPLOYED. WE UNDERSTAND THAT THE COUNTER PROPOSED BY
SYSTRON-DONNER IS A MODIFIED 6053.
"IN FAIRNESS TO THE OTHER BIDDERS, WE FEEL THAT IT IS IMPORTANT TO
CLARIFY THIS PARTICULAR ASPECT OF COUNTER PERFORMANCE BEFORE AWARDING
THE CONTRACT."
GSA PROPOSES TO MAKE AWARD TO THE LOW BIDDER AND IN SUBSEQUENT
CORRESPONDENCE TO OUR OFFICE YOU HAVE IN EFFECT JOINED WITH A NUMBER OF
THE OTHER BIDDERS ON THIS PROCUREMENT TO PROTEST THAT PARAGRAPH 3.17.2
OF THE SPECIFICATION WAS AMBIGUOUS. WE ENCLOSE A COPY OF OUR LETTER OF
TODAY TO HEWLETT-PACKARD COMPANY CONCERNING THIS CONTENTION. WE MUST
ADD WITH REFERENCE TO YOUR PROTEST THAT IT APPEARS FROM THE RECORD THAT
YOUR FIRM DID ADOPT THE GSA INTENDED INTERPRETATION OF SPECIFICATION
PARAGRAPH 3.17.2 PRIOR TO THE TIME OF BID OPENING. THIS MAY BE THE
REASON GSA DID NOT FEEL COMPELLED TO RESPOND DIRECTLY TO YOUR FIRM PRIOR
TO BID OPENING REGARDING PARAGRAPH 3.17.2.
IN ANY EVENT, BASED ON THE RECORD BEFORE US WE MUST DENY YOUR PROTEST
AGAINST THE PROPOSED AWARD TO THE LOW BIDDER.
B-170784, FEB 17, 1971
SET-OFF - WAGE UNDERPAYMENTS - LIQUIDATED DAMAGES
DECISION CONCERNING A SET-OFF TO COVER WAGE UNDERPAYMENTS AND
LIQUIDATED DAMAGES REQUESTED BY THE DEPARTMENT OF LABOR ON A FOREST
SERVICE CONTRACT WITH R.E. BORELLO FOR ROAD MAINTENANCE.
WHERE THE LABOR DEPARTMENT HAS REQUESTED A SET-OFF AND THE INTERNAL
REVENUE SERVICE HAS SERVED A LEVY ON FUNDS HELD BY THE FOREST SERVICE
WHICH WERE TO BE PAID A CONTRACTOR, GAO BELIEVES THAT THE WAGE
UNDERPAYMENTS AND LIQUIDATED DAMAGES UNDER THE CONTRACT WORK HOURS
STANDARD ACT WAS AUTHORIZED AND AVAILABLE FUNDS BE APPLIED FIRST TO THE
WAGE UNDERPAYMENTS AS PROVIDED BY 29 C.F.R. 5.14(D)(2), THERE BEING NO
REAL DISTINCTION, AS A CLAIM OF THE GOVERNMENT, BETWEEN LIQUIDATED
DAMAGES TO BE IMPOSED UNDER THE PERTINENT LABOR LAW AND THE TAX LIEN.
TO U.S. DEPARTMENT OF AGRICULTURE, FOREST SERVICE, REGION 6:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 28, 1970, WITH ENCLOSURES,
REQUESTING OUR ADVICE AS TO THE PROPER DISPOSITION OF CERTAIN FUNDS NOW
HELD BY THE FOREST SERVICE. IT IS REPORTED THAT ON OR ABOUT JUNE 20,
1969, A ROAD MAINTENANCE CONTRACT NO. 18-01850, WAS AWARDED TO R. E.
BORELLO. THE WORK WAS PERFORMED AND PARTIAL PAYMENTS WERE MADE UNDER
THE CONTRACT IN A NORMAL MANNER. PERFORMANCE OF THE CONTRACT WORK IS
NOW COMPLETE AND THE AMOUNT OF $8,795.50 REMAINS TO BE DISBURSED.
BECAUSE OF LABOR PROBLEMS ON THIS JOB THE UNITED STATES DEPARTMENT OF
LABOR ON APRIL 20, 1970, REQUESTED A SET-OFF TO COVER WAGE UNDERPAYMENTS
IN THE AMOUNT OF $5,400.96, AND LIQUIDATED DAMAGES IN THE AMOUNT OF
$2,630.00. ATTACHED TO SUCH REQUEST WAS A STANDARD FORM 1081 "VOUCHER
AND SCHEDULE OF WITHDRAWALS AND CREDITS" FOR THE TRANSFER OF FUNDS FROM
DEPARTMENT OF AGRICULTURE-FOREST SERVICE TO DEPARTMENT OF
LABOR-WAGE-HOUR DIVISION, AND A CONSENT SIGNED BY THE CONTRACTOR
AGREEING TO THE APPLICATION OF $5,400.96 TO THE PAYMENT OF BACK WAGES.
THE CONTRACTOR REQUESTED, WITH LABOR'S CONCURRENCE, THAT THE WITHHOLDING
FOR BACK WAGES BE DIVIDED BETWEEN PAYMENTS FOR MAY AND JUNE 1970, RATHER
THAN TAKING THE ENTIRE AMOUNT OF THE MAY PAYMENT. THE SUM OF $1,400.00
WAS THEREFORE WITHHELD FROM THE MAY EARNINGS, BUT WAS NEVER TRANSFERRED
TO THE DEPARTMENT OF LABOR OR THIS OFFICE, AND IS A PART OF THE
$8,795.50 PRESENTLY AVAILABLE FOR PAYMENT.
AN INTERNAL REVENUE SERVICE LEVY OF $6,362.58 WAS SERVED ON THE
FOREST SERVICE BEFORE THE JUNE PAYMENT WAS DUE ON JUNE 30, 1970. YOU
STATE IT IS ASSUMED THAT AT LEAST A PART OF THIS TOTAL COVERS PAYROLL
TAXES UNDER THIS CONTRACT.
YOU RAISE THE FOLLOWING QUESTIONS UPON WHICH YOU REQUEST OUR ADVICE:
"1. DO THESE WAGE CLAIMS HAVE PRIORITY OVER THE IRS LEVY? IF NOT,
DOES THE ACT OF SETTING ASIDE THE $1,400.00 WITHOUT TRANSFER TO LABOR
CHANGE THE STATUS OF THIS MUCH OF THE AMOUNT ON HAND?
"2. IN VIEW OF 41 U.S.C. 352(A) SHOULD FUNDS AVAILABLE FOR PAYMENT
OF WAGE CLAIMS BE TRANSFERRED TO LABOR FOR PAYMENT OR PAID DIRECTLY TO
THE MEN BY THE FOREST SERVICE?
"3. DOES THAT PART OF THE IRS CLAIM (IF ANY) WHICH AROSE OUT OF THIS
CONTRACT HAVE A DIFFERENT PRIORITY FROM THE PART (IF ANY) WHICH IS
UNRELATED TO THIS CONTRACT (E.G. OTHER GOVERNMENT CONTRACTS OR PRIVATE
INDUSTRY JOBS)?
"4. WHAT SHOULD BE DONE ABOUT THE LIQUIDATED DAMAGE PORTION OF
LABOR'S CLAIM AND WHAT PRIORITY DOES IT HAVE?"
THE WAGE CLAIMS ARE SHOWN BY THE RECORD SUBMITTED TO THIS OFFICE TO
HAVE ARISEN OUT OF VIOLATIONS OF THE SERVICE CONTRACT ACT, 41 U.S.C.
351, AND THE CONTRACT WORK HOURS STANDARDS ACT, 40 U.S.C. 328, UNDER
FOREST SERVICE CONTRACTS NOS. 18-01850 AND 002638. HOWEVER, OTHER THAN
A STATEMENT THAT BACK WAGES IN THE TOTAL AMOUNT OF $5,400.96 ARE DUE TO
21 UNIDENTIFIED EMPLOYEES UNDER THE ABOVE TWO STATUTES, AND A
DECLARATION THAT AN AMOUNT OF $2,630.00 FOR LIQUIDATED DAMAGES HAD BEEN
COMPUTED AGAINST THE CONTRACTOR UNDER THE CONTRACT WORK HOURS STANDARDS
ACT, THERE IS NO BREAKDOWN OF RECORD OF THE UNDERPAYMENTS CHARGEABLE
UNDER EACH STATUTE. FURTHER, WHILE THE CONTRACT PAYMENT SUMMARY AND
INVOICE COPIES SUBMITTED TO THIS OFFICE SHOW THAT AMOUNTS PAYABLE WERE
EARNED UNDER CONTRACT NO. 18-01850 DURING VARIOUS PERIODS FROM JULY 9,
1969, THROUGH NOVEMBER 24, 1969, THERE IS NO SHOWING OF THE AMOUNTS OF
EARNINGS UNDER CONTRACT NO. 002638, OR WHETHER ANY AMOUNTS WERE WITHHELD
FROM PAYMENTS DUE UNDER THAT CONTRACT FOR WAGE UNDERPAYMENTS. IN VIEW
THEREOF, WE ARE UNABLE TO GIVE DETAILED INSTRUCTIONS FOR THE DISPOSITION
OF THE PERTINENT FUNDS ON THE BASIS OF THE PRESENT RECORD, AND GENERAL
DIRECTIONS BASED ON THE APPLICABLE PRIORITIES FOR THE DISPOSITION OF
LIKE FUNDS WILL THEREFORE BE OUTLINED IN ANSWERING THE QUESTIONS YOU
HAVE SUBMITTED.
THE SERVICE CONTRACT ACT OF 1965, 41 U.S. CODE 351-357, PROVIDES THAT
EVERY CONTRACT ENTERED INTO BY THE UNITED STATES IN EXCESS OF $2,500,
WITH CERTAIN EXCEPTIONS, THE PRINCIPAL PURPOSE OF WHICH IS TO FURNISH
SERVICES THROUGH THE USE OF SERVICE EMPLOYEES, SHALL CONTAIN CERTAIN
LABOR STANDARDS STIPULATIONS INCLUDING THE PAYMENT OF SPECIFIED MINIMUM
WAGES. SECTION 3 OF THE ACT (41 U.S.C. 352) PROVIDES THAT SO MUCH OF
THE ACCRUED PAYMENT DUE ON THE CONTRACT MAY BE WITHHELD AS IS NECESSARY
TO COMPENSATE UNDERPAID EMPLOYEES, AND THAT ON ORDER OF THE SECRETARY OF
LABOR ANY COMPENSATION FOUND DUE SHALL BE PAID DIRECTLY TO THE EMPLOYEES
FROM THE WITHHELD MONIES.
UNDER THE CONTRACT WORK HOURS STANDARDS ACT, THE COMPTROLLER GENERAL
IS AUTHORIZED AND DIRECTED TO PAY AGGRIEVED EMPLOYEES, FROM ANY AMOUNTS
WITHHELD PURSUANT THERETO, THE AMOUNTS ADMINISTRATIVELY FOUND TO BE DUE
THEM. THE CONTRACTOR RESPONSIBLE FOR VIOLATIONS OF THIS ACT IS LIABLE
TO THE EMPLOYEES FOR UNDERPAYMENT OF WAGES AND TO THE GOVERNMENT FOR
LIQUIDATED DAMAGES, WITH AUTHORITY IN THE PERSON "WHOSE DUTY IT IS TO
APPROVE THE PAYMENT OF MONIES *** IN CONNECTION WITH THE PERFORMANCE OF
THE CONTRACT WORK" TO DIRECT THE WITHHOLDING OF SUCH AMOUNTS AS ARE
DETERMINED TO BE NECESSARY TO SATISFY THE DEBTS TO THE AGGRIEVED
EMPLOYEES AND TO THE GOVERNMENT. IN THIS REGARD, WE STATED IN OUR
DECISION TO THE SECRETARY OF LABOR (B-167000, JUNE 26, 1969) THAT THE
LANGUAGE OF THE ABOVE ACT MAKES IT CLEAR THAT CONGRESS INTENDED THAT THE
FULL AMOUNT WITHHELD SHOULD FIRST BE APPLIED TO UNDERPAYMENTS OWED THE
EMPLOYEES, RATHER THAN TO THE LIQUIDATED DAMAGES ASSESSED UNDER THE ACT.
TO THE SAME EFFECT, SEE 29 C.F.R. 5.14(D)(2). HOWEVER, SINCE YOUR
SUBMISSION FILE HAS CITED TWO SEPARATE CONTRACTS AS BEING INVOLVED IN
THE UNDERPAYMENTS UNDER TWO SEPARATE STATUTES, WE ALSO THINK IT
APPROPRIATE TO RESTATE AT THIS TIME OUR VIEW THAT THE CONTRACT WORK
HOURS STANDARDS ACT DOES NOT AUTHORIZE WITHHOLDING, FOR THE BENEFIT OF
UNDERPAID WORKERS, OF AMOUNTS DUE THE EMPLOYING CONTRACTOR UNDER
CONTRACTS OTHER THAN THOSE IN WHICH THE UNDERPAYMENTS WERE FOUND. SEE
WHITNEY BROTHERS PLUMBING AND HEATING INC. V UNITED STATES, 224 F. SUPP.
860 (1963); 48 COMP. GEN. 387 (1968). HOWEVER, COMPARE 35 COMP. GEN.
144 (1955) WITH RESPECT TO WITHHOLDING FOR LIQUIDATED DAMAGES.
PROCEEDING TO THE TAX LIEN ASPECTS OF THE SITUATION, THE SYSTEM UNDER
WHICH THE FEDERAL TAXING AUTHORITIES ACQUIRE THEIR LIENS AGAINST
PROPERTY OF TAX DEBTORS FOR TAXES DUE IS ESTABLISHED PRIMARILY UNDER
SECTIONS 6321, 6322 AND 6323 OF TITLE 26, UNITED STATES CODE. SECTION
6321 PROVIDES THAT THE FAILURE TO PAY UPON DEMAND ANY TAX DUE CREATES A
LIEN IN FAVOR OF THE UNITED STATES UPON ALL PROPERTY, AND RIGHTS TO
PROPERTY WHETHER REAL OR PERSONAL BELONGING TO THE TAXPAYER. SUCH LIENS
ARISE GENERALLY AT THE TIME OF THE TAX ASSESSMENT (SEE SECTION 6322).
SECTION 6323 REQUIRES THE FILING OF NOTICE AT THE DESIGNATED PLACE
BEFORE THE TAX LIEN IS VALID AND ITS PRIORITY ESTABLISHED AGAINST
CERTAIN PERSONS, SUCH AS PURCHASERS, HOLDERS OF SECURITY INTERESTS,
MECHANIC'S LIENORS AND JUDGMENT LIEN CREDITORS. WHILE THE INTERESTS TO
BE FURTHERED UNDER THE PERTINENT LABOR LAWS ARE NOT THOSE ENUNCIATED IN
26 U.S.C. 6323, WE THINK THAT THE PURPOSE FOR WHICH THE WITHHOLDING WAS
AUTHORIZED AND WAS UNDERTAKEN IN THE PRESENT CASE REQUIRES THAT THE
AVAILABLE FUNDS BE APPLIED FIRST TO THE WAGE UNDERPAYMENTS AS AUTHORIZED
BY 29 CFR 5.14(D)(2), ABOVE, THERE BEING NO REAL DISTINCTION, AS A CLAIM
OF THE GOVERNMENT, BETWEEN LIQUIDATED DAMAGES TO BE IMPOSED UNDER THE
PERTINENT LABOR LAW AND THE TAX LIEN HEREIN OF RECORD. COMPARE 19 COMP.
GEN. 565 (1939).
THE REMAINING ISSUE IS THE EFFECT ON THE CONTRACT BALANCES OF THE
AGENCY ACTIONS TAKEN HEREIN WITH REGARD TO THE FINDINGS AND
DETERMINATIONS OF THE DEPARTMENT OF LABOR. THE STATUTORY PROVISIONS SET
OUT IN 40 U.S.C. 328 ESTABLISH THE LIABILITY OF THE CONTRACTOR, AND ANY
OF HIS SUBCONTRACTORS RESPONSIBLE FOR THE VIOLATION OF THE CONTRACT WORK
HOURS STANDARDS ACT, FOR THE UNPAID WAGES OF THE AFFECTED EMPLOYEE AND
FOR LIQUIDATED DAMAGES. FURTHER, THE GOVERNMENTAL AGENCY FOR WHICH THE
CONTRACT WORK IS DONE MAY WITHHOLD OR CAUSE TO BE WITHHELD, SUBJECT TO
THE PROVISIONS OF 40 U.S.C. 330, FROM ANY MONEYS PAYABLE ON ACCOUNT OF
WORK PERFORMED BY A CONTRACTOR, FUNDS FOR UNPAID WAGES AND LIQUIDATED
DAMAGES AS THEREIN PROVIDED. THAT SECTION ALSO AUTHORIZES AND DIRECTS
THE COMPTROLLER GENERAL TO PAY DIRECTLY TO SUCH LABORERS AND MECHANICS,
FROM THE SUMS WITHHELD ON ACCOUNT OF UNDERPAYMENT OF WAGES, THE
RESPECTIVE AMOUNTS ADMINISTRATIVELY FOUND TO BE DUE.
THE SUBMITTED RECORD SHOWS THAT A DETERMINATION HAD BEEN MADE OF THE
AMOUNTS TO BE WITHHELD UNDER THE PERTINENT LABOR LAWS AND THAT THE
FOREST SERVICE WAS NOTIFIED AND REQUESTED ON APRIL 20, 1970, TO SET OFF
SUCH FUNDS FROM THE CONTRACT MONIES DUE AND PAYABLE TO THE CONTRACTOR.
THE PROCEEDINGS PRESCRIBED FOR ENFORCEMENT OF THE SERVICE CONTRACT ACT
BY 29 CFR, SUBPART A, PART 6, HAD BEEN COMPLETED AND FINAL FINDINGS OF
VIOLATIONS APPARENTLY HAD BEEN MADE BY THE SECRETARY OF LABOR PRIOR TO
THAT DATE.
IN OUR VIEW OF THE CIRCUMSTANCES HEREIN, IT IS MANDATORY UNDER THE
PERTINENT STATUTORY AUTHORITY THAT SO MUCH OF THE WITHHELD FUNDS AS IS
REQUIRED TO COVER THE UNDERPAYMENT OF WAGES AND LIQUIDATED DAMAGES BE
CONSIDERED AS SET ASIDE FOR THE PURPOSES DIRECTED BY THE SECRETARY OF
LABOR. SEE 1962 AND 1965 U.S. CODE CONGRESSIONAL AND ADMINISTRATIVE
NEWS, PAGES 2121 AND 3737, RESPECTIVELY. COMPARE 35 COMP. GEN. 144
(1955); 46 COMP. GEN. 178 (1966), AND B-161460, MAY 25, 1967. THE
LEGISLATIVE HISTORIES OF THESE LABOR STATUTES DISCLOSE A PROGRESSIVE
TENDENCY TO EXTEND A MORE LIBERAL INTERPRETATION AND CONSTRUCTION IN
SUCCESSIVE ENACTMENTS WITH REGARD TO WORKER'S BENEFITS, RECOVERY AND
REPAYMENT OF WAGE UNDERPAYMENTS. FURTHER, AS REMEDIAL LEGISLATION, IT
IS AXIOMATIC THAT THEY ARE TO BE LIBERALLY CONSTRUED.
ACCORDINGLY, THE FIRST PART OF YOUR FIRST QUESTION IS ANSWERED IN THE
AFFIRMATIVE, AND NO ANSWER IS REQUIRED TO THE SECOND PART.
WITH REGARD TO YOUR SECOND QUESTION THE AUTHORITY SET FORTH IN 41
U.S.C. 352(A) PROVIDES THAT THE FEDERAL AGENCY HEAD OR THE SECRETARY OF
LABOR IS AUTHORIZED TO CARRY OUT THIS SECTION, AS DIRECTED BY THE
SECRETARY. SEE 1965 U.S. CODE CONGRESSIONAL AND ADMINISTRATIVE NEWS,
PAGE 3737. THAT PART OF THE FUNDS ATTRIBUTABLE TO THE SERVICE CONTRACT
ACT VIOLATIONS SHOULD, IN THIS INSTANCE, BE TRANSFERRED TO THE SECRETARY
OF LABOR, AS REQUESTED. THOSE FUNDS ATTRIBUTABLE TO CONTRACT WORK HOURS
STANDARDS ACT VIOLATIONS SHOULD, TOGETHER WITH A LIST OF THE NAMES,
ADDRESSES AND AMOUNT DUE EACH UNDERPAID WORKER, BE TRANSFERRED TO THIS
OFFICE FOR DISTRIBUTION.
TITLE 26 U.S.C. 6321 PROVIDES THAT A TAX LIEN SHALL APPLY TO ALL
PROPERTY BELONGING TO THE PERSON LIABLE TO PAY ANY TAX. SECTION 6322
PROVIDES THAT SUCH LIEN CONTINUES UNTIL THE LIABILITY IS SATISFIED OR
EXPIRES. THE PROPERTY SOUGHT TO BE ATTACHED BY THE TAX LIEN HEREIN IS
THE CONTRACTOR'S FUNDS IN THE HANDS OF THE GOVERNMENT, AND THE TAX
LIABILITY NEED NOT HAVE ARISEN OUT OF THE SAME SOURCE AS THE AVAILABLE
FUNDS IN ORDER TO BE CONSIDERED OF EQUAL PRIORITY. YOUR THIRD QUESTION
IS ANSWERED ACCORDINGLY.
WITH REGARD TO YOUR FOURTH QUESTION, ABSENT ADMINISTRATIVE RELIEF FOR
THE LIQUIDATED DAMAGES, SUCH FUNDS HAVING BEEN WITHHELD FOR THE USE AND
BENEFIT OF THE UNITED STATES MAY BE COVERED INTO THE APPROPRIATE
TREASURY FUND BY YOUR AGENCY. COMPARE B-161640, MAY 25, 1967. THIS
DISPOSITION IS MOST EXPEDIENT AND IS IN CONSONANCE WITH THE AUTHORITY
GRANTED BY THE CONTRACT WORK HOURS STANDARDS ACT.
B-171054, FEB 17, 1971
CONTRACTS - PRICE ADJUSTMENT
DECISION GRANTING AN APPROPRIATE ADJUSTMENT IN THE PURCHASE PRICE FOR
3,500 SQUARE NECK BOLTS, A SUBITEM OF A LOT SALE TO S.A. GOLD COMPANY
INCIDENT TO A CONTRACT AWARDED BY THE DEFENSE SURPLUS SALES OFFICE, FORT
WORTH, TEXAS.
ALTHOUGH THE "GUARANTEED DESCRIPTIONS" PROVISION OF THE SALES
INVITATION SPECIFICALLY PROVIDES THAT NO ADJUSTMENT FOR SHORTAGES OF
PROPERTY SOLD BY "LOT" SHALL BE ALLOWED UNLESS THE PURCHASER NOTIFIES
THE GOVERNMENT OF THE SHORTAGE PRIOR TO REMOVAL OF THE PROPERTY FROM THE
INSTALLATION, WHICH WAS NOT DONE IN THE PRESENT CASE, THE PURPOSE OF THE
NOTIFICATION REQUIREMENT WOULD NOT BE DEFEATED SINCE THE GOVERNMENT
ACKNOWLEDGES THAT BOTH THE QUANTITY SHOWN IN THE INVITATION (350,000)
WAS ERRONEOUS AND THAT THE QUANTITY ACTUALLY DELIVERED WAS 3,500.
FURTHER, BECAUSE THE MISDESCRIPTION OF THE ITEM (350,000 BOLTS - WEIGHT
899 POUNDS) SHOULD HAVE BEEN APPARENT TO THE SALES CONTRACTING OFFICER
SINCE 350,000 BOLTS WOULD HAVE WEIGHED IN EXCESS OF 13,000 POUNDS, AN
APPROPRIATE ADJUSTMENT MAY BE MADE.
TO GENERAL HEDLUND:
REFERENCE IS MADE TO A LETTER DATED NOVEMBER 13, 1970, WITH
ENCLOSURES, FROM THE ASSISTANT COUNSEL, DEFENSE SUPPLY AGENCY,
REFERENCE: DSAH-G, REPORTING ON THE CLAIM OF THE S. A. GOLD COMPANY FOR
$530.15 UNDER SALES CONTRACT NO. 37-1024-043 AWARDED BY THE DEFENSE
SURPLUS SALES OFFICE, FORT WORTH, TEXAS, AND RECOMMENDING THAT THE
REQUESTED RELIEF BE GRANTED BY OUR OFFICE.
THE CLAIM, IN THE AMOUNT OF $530.15, CONCERNS ITEM NO. 120 WHICH
CONSISTED OF VARIOUS TYPES AND SIZES OF BOLTS INCLUDING ONE SUBITEM
DESCRIBED IN THE SALES INVITATION AS "3500 HD." OR 350,000 SQUARE NECK
BOLTS. THE ESTIMATED WEIGHT OF THE ENTIRE LOT WAS STATED TO BE 899
POUNDS. S. A. GOLD WAS THE HIGH BIDDER FOR THE PROPERTY AT $589.89 AND
WAS AWARDED A CONTRACT ON SEPTEMBER 1, 1970.
THE SALES CONTRACTING OFFICER REPORTS THAT THE FOLLOWING EVENTS
OCCURRED FOLLOWING THE AWARD MADE TO GOLD. ON SEPTEMBER 14, 1970, MR.
GOLD'S AGENT REMOVED ITEM NO. 120 AND ON SEPTEMBER 18, 1970, MR. GOLD
TELEPHONED THE SALES CONTRACTING OFFICER AND STATED THAT THE PROPERTY
AWARDED AS ITEM NO. 120 HAD BEEN RECEIVED AND A SHORTAGE HAD BEEN FOUND
IN THAT ONLY 3,500 SQUARE NECK BOLTS, FSN 5306-059-1227, HAD BEEN
RECEIVED. THE SALES CONTRACTING OFFICER THEN REQUESTED THE ASSISTANT
PROPERTY DISPOSAL OFFICER, DEFENSE DEPOT, MEMPHIS, TO FURNISH A REPORT.
ON SEPTEMBER 28, 1970, THE DEFENSE SURPLUS SALES OFFICE RECEIVED A
LETTER FROM MR. S. A. GOLD CLAIMING A SHORTAGE OF 346,500 BOLTS WITH A
REQUEST FOR A CONTRACT PRICE ADJUSTMENT OF $1.53 PER THOUSAND FOR A
TOTAL OF $530.15. ON OCTOBER 5, 1970, A REPORT WITH A COPY OF THE
TURN-IN DOCUMENT ATTACHED WAS RECEIVED FROM THE PROPERTY DISPOSAL OFFICE
STATING THAT THE TURN-IN DOCUMENT SHOWED A TURN-IN OF 3,500 AND
"HUNDREDS" AS A UNIT OF ISSUE; ALSO THAT THE PROPERTY WAS RECEIVED IN
TWO CARTONS WITH A TOTAL WEIGHT OF 144 POUNDS.
THE SALES CONTRACTING OFFICER'S REPORT GIVES THE FOLLOWING DETAILS
REGARDING THE MATTER:
"PROPERTY OFFERED IN ITEMS 1 THROUGH 390 IN THIS SALE WAS TURNED IN
TO THE PROPERTY DISPOSAL OFFICER ON DD FORM 1348-1. FROM THESE FORMS
IBM CARDS WERE PUNCHED LOCALLY FOR EACH LINE ITEM. THIS DECK OF CARDS
WAS THEN FORWARDED TO THE DEFENSE LOGISTICS SERVICES CENTER, BATTLE
CREEK, MICHIGAN. UPON RECEIPT OF THESE CARDS AT THE CENTER, THEY WERE
FED INTO A COMPUTER WHICH PRINTED A LISTING REFLECTING A DETAILED
DESCRIPTION BY LINE ITEM, (8). THIS LISTING WAS THEN FURNISHED TO THE
PROPERTY DISPOSAL OFFICER, DEFENSE DEPOT MEMPHIS, WHO USED IT FOR
LOTTING AND REPORTING PROPERTY TO THE FT. WORTH DEFENSE SURPLUS SALES
OFFICE FOR CATALOGING AND SALE. THIS LISTING WAS EDITED BY THE
MERCHANDISING DIVISION OF THE FORT WORTH SALES OFFICE WITHOUT BENEFIT OF
VISUAL INSPECTION OF THE PROPERTY AND ONLY TO A LIMITED DEGREE AND DID
NOT INCLUDE ANY VERIFICATION OF WEIGHT PENNED ON THE LISTING BY THE
HOLDING ACTIVITY IN RELATION TO QUANTITY OFFERED. OTHER THAN THE
ADDITION OF THE MANUFACTURER WHERE KNOWN AND THE DELETION OF SOME
UNNECESSARY DESCRIPTIVE DATA, THE DESCRIPTION WAS ACCEPTED BY THE SALES
OFFICE AS CORRECT AND WAS INCLUDED IN THE CATALOG ITEM DESCRIPTION."
THE RECORD INDICATES THAT THE PROPERTY WAS OFFERED BY LOT AND, IN
THIS REGARD, THE "GUARANTEED DESCRIPTIONS" PROVISION OF THE SALES
INVITATION SPECIFICALLY PROVIDES THAT NO ADJUSTMENT FOR SHORTAGES OF
PROPERTY SOLD BY "LOT" SHALL BE ALLOWED UNLESS THE PURCHASER NOTIFIES
THE GOVERNMENT OF THE SHORTAGE PRIOR TO REMOVAL OF THE PROPERTY FROM THE
INSTALLATION. THE RECORDS SHOW THAT PROPERTY WAS REMOVED BY GOLD'S
AGENT ON SEPTEMBER 14, 1970, AND THAT GOLD FIRST PRESENTED HIS CLAIM OF
SHORTAGE BY TELEPHONE ON SEPTEMBER 18, 1970.
WE ARE ADVISED THAT THE MERCHANDISING DIVISION OF THE SALES OFFICE
DID EDIT THE PROPERTY LISTING BUT DUE TO THE TIME AND EFFORT REQUIRED,
IT WAS NOT FEASIBLE OR PRACTICAL TO RELATE ALL FACTORS IN THE PROPERTY
LIST DESCRIPTION TO DETERMINE THEIR ACCURACY. THE CONTRACTING OFFICER
STATES THAT THIS WOULD HAVE INCLUDED WHAT IS NOW AN OBVIOUS DISCREPANCY
IN THE WEIGHT OF 144 POUNDS REPORTED BY THE PROPERTY DISPOSAL OFFICE FOR
THE BOLTS IN QUESTION AS COMPARED TO THE ACTUAL WEIGHT OF 13,650 POUNDS
BASED ON 3,500 HUNDREDS AT 3.9 POUNDS PER HUNDRED.
ON THE BASIS OF THE ABOVE-STATED FACTS, THE SALES CONTRACTING OFFICER
CONTENDS THAT RELIEF TO S. A. GOLD IS NOT APPROPRIATE IN THAT THE CLAIM
OF SHORTAGE WAS NOT TIMELY PRESENTED AS REQUIRED BY THE "GUARANTEED
DESCRIPTIONS" CLAUSE. FURTHER, THE CONTRACTING OFFICER CONTENDS THAT
RELIEF UNDER CONDITION NO. 2: CONDITION AND LOCATION OF PROPERTY,
GENERAL SALE TERMS AND CONDITIONS OF SALE, IS NOT APPROPRIATE IN THAT
THE PROPERTY WAS DESCRIBED AND CATALOGUED FROM THE BEST INFORMATION
AVAILABLE TO THE SALES OFFICE. ACCORDINGLY, THE SALES CONTRACTING
OFFICER RECOMMENDS THAT GOLD'S REQUEST FOR CONTRACT PRICE ADJUSTMENT BE
DENIED.
WE DO NOT AGREE WITH THE SALES CONTRACTING OFFICER'S RECOMMENDATION
THAT RELIEF BE DENIED. WHILE GOLD FAILED TO NOTIFY THE GOVERNMENT OF
THE SHORTAGE PRIOR TO REMOVAL OF THE PROPERTY FROM THE INSTALLATION AS
REQUIRED BY THE "GUARANTEED DESCRIPTIONS" CLAUSE, THE GOVERNMENT
ACKNOWLEDGES THAT THE QUANTITY SHOWN IN THE SALES INVITATION WAS
ERRONEOUS AND THAT THE QUANTITY OF SQUARE NECK BOLTS ACTUALLY DELIVERED
TO GOLD WAS 3,500 RATHER THAN THE 350,000 ADVERTISED. WE ARE ADVISED
THAT THE NOTIFICATION REQUIREMENT IN THE ABOVE-REFERRED TO CLAUSE IS
NECESSARY TO PROTECT THE GOVERNMENT'S INTEREST SINCE PROPERTY OFFERED
FOR SALE BY "LOT" GENERALLY IS OF SUCH A NATURE THAT AN EXACT
DETERMINATION OF ITS CONTENT BY THE GOVERNMENT PRIOR TO OR AT THE TIME
OF REMOVAL IS NOT JUSTIFIABLE. FURTHER, LOT SHORTAGES DISCOVERED AFTER
REMOVAL MAY BE ATTRIBUTABLE TO CIRCUMSTANCES OVER WHICH THE GOVERNMENT
HAS NO CONTROL. IT IS FOR THESE REASONS THAT SUCH SHORTAGES MUST BE
ALLEGED PRIOR TO REMOVAL.
IN THE PRESENT SITUATION, THE PURPOSE OF THE NOTIFICATION REQUIREMENT
WOULD NOT BE DEFEATED IF AN ADJUSTMENT IN THE CONTRACT PRICE IS ALLOWED
SINCE THE GOVERNMENT ACKNOWLEDGES THAT BOTH THE QUANTITY SHOWN IN THE
INVITATION WAS ERRONEOUS AND THAT THE QUANTITY ACTUALLY DELIVERED TO
GOLD WAS 3,500. WE HAVE RECOGNIZED THAT A BIDDER IS NOT NECESSARILY
CHARGEABLE WITH KNOWLEDGE OF AN ERROR IN A PURCHASE DESCRIPTION MERELY
BECAUSE HE COULD HAVE BECOME AWARE OF THE ERROR IF HE HAD MADE AN
ANALYSIS USING CERTAIN EXTRANEOUS INFORMATION REQUIRING SPECIALIZED
KNOWLEDGE. SEE B-167926, JULY 15, 1970, 50 COMP. GEN.___. USUALLY THE
SELLING ACTIVITY HAS SUPERIOR KNOWLEDGE OF THE DESCRIPTION OF AN ITEM
AND IN DETERMINING IF A BIDDER OTHERWISE ENTITLED TO RELIEF SHOULD BE
BARRED THEREFROM BECAUSE HE HAD CONSTRUCTIVE NOTICE OF THE ERROR IN THE
PURCHASE DESCRIPTION, THERE MUST BE A BALANCING BETWEEN THE DUTY OF THE
PARTY PREPARING THE DESCRIPTION AND THAT OF THE PARTY RELYING ON SUCH
DESCRIPTION. IN CHARGING A BIDDER WITH CONSTRUCTIVE NOTICE OF AN
INACCURATE PURCHASE DESCRIPTION, WE THINK A DISTINCTION MUST BE MADE
BETWEEN A DESCRIPTION WHICH IS OBVIOUSLY ERRONEOUS AND THE SITUATION
WHERE A MIS-DESCRIPTION CAN ONLY BE DISCOVERED BY USING SPECIALIZED
KNOWLEDGE SUCH AS THE REASONABLE WEIGHT OF A QUANTITY OF BOLTS. IN THE
LATTER SITUATION, IT IS OUR VIEW THAT KNOWLEDGE OF THE MISDESCRIPTION
SHOULD NOT BE AUTOMATICALLY CHARGEABLE TO THE BIDDER. THIS CASE FALLS
WITHIN THE SPECIALIZED KNOWLEDGE CATEGORY AND ON THE BASIS OF THE RECORD
PRESENTED, WE FIND THAT RELIEF SHOULD NOT BE PRECLUDED ON A CONSTRUCTIVE
NOTICE THEORY.
WE THINK THAT THE S. A. GOLD CO. MAY BE GRANTED AN ADJUSTMENT IN THE
PURCHASE PRICE FOR ITEM NO. 120, AS ADMINISTRATIVELY RECOMMENDED, ON
THE BASIS THAT THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE
KNOWLEDGE OF THE MISDESCRIPTION. THE TOTAL WEIGHT LISTED IN THE
INVITATION FOR ITEM NO. 120 WAS 899 POUNDS. WE ARE ADVISED THAT THE
MISDESCRIPTION OF ITEM NO. 120 SHOULD HAVE BEEN APPARENT TO THE SALES
CONTRACTING OFFICER SINCE 350,000 CARRIAGE BOLTS WOULD HAVE WEIGHED IN
EXCESS OF 13,000 POUNDS.
FROM A REVIEW OF THE RECORD BEFORE US, WE BELIEVE THAT THE
CONTRACTING OFFICER WAS ON CONSTRUCTIVE, IF NOT ACTUAL, NOTICE OF THE
ERROR IN THE DESCRIPTION OF ITEM NO. 120, I.E., EITHER IN THE QUANTITY
OF THE PROPERTY BEING OFFERED OR IN ITS ESTIMATED TOTAL WEIGHT.
THEREFORE, GOLD MAY BE GRANTED AN APPROPRIATE ADJUSTMENT IN THE
PURCHASE PRICE FOR ITEM NO. 120 AS ADMINISTRATIVELY RECOMMENDED. BY
LETTER OF TODAY, WE ARE TRANSMITTING A COPY OF THIS DECISION TO SENATOR
VANCE HARTKE.
B-171229, FEB 17, 1971
SURPLUS PROPERTY SALE - MISTAKE IN BID
DECISION HOLDING THAT WEAVER ELECTRIC CO., MAY HAVE THE PRICE FOR
THREE VARIDRIVE MOTORS CORRECTED TO READ $601.11 AS A LOT PRICE RATHER
THAN A UNIT PRICE.
A CONTRACT FOR SURPLUS GOODS AWARDED WITHOUT BID VERIFICATION, WHERE
SUCCESSFUL BID WAS MORE THAN FOUR TIMES THE AMOUNT OF THE NEXT HIGHEST
BID PRICE AND SEVEN TIMES THE CURRENT MARKET APPRAISAL, AND SUCH
INFORMATION WAS AVAILABLE TO THE CONTRACTING OFFICER, GAO CONCLUDES THAT
THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND IN THE
ABSENCE OF BID VERIFICATION THE PRICE MAY BE CORRECTED.
TO GENERAL HEDLUND:
REFERENCE IS MADE TO LETTER DATED NOVEMBER 3, 1970, FILE REFERENCE
DSAH-G, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS,
REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR
ALLEGED BY THE WEAVER ELECTRIC CO. TO HAVE BEEN MADE IN ITS BID UPON
WHICH SALES CONTRACT NO. 37-0184-084 IS BASED.
THE DEFENSE SURPLUS SALES OFFICE (DSSO), FORT WORTH, TEXAS, BY
INVITATION NO. 37-0184, REQUESTED BIDS FOR THE PURCHASE OF VARIOUS ITEMS
OF SURPLUS PROPERTY, INCLUDING ITEM 64 DESCRIBED AS THREE VARIDRIVE
MOTORS IN POOR CONDITION, "REPAIR REQUIRED." IN RESPONSE, THE WEAVER
ELECTRIC CO. SUBMITTED A BID DATED JUNE 13, 1970, OFFERING TO PURCHASE
THE THREE MOTORS UNDER ITEM 64 AT A PRICE OF $601.11 EACH. THE BID OF
THE COMPANY WAS ACCEPTED AS TO ITEM 64 ($1,803.33) AND OTHER ITEMS
($422.22) ON JUNE 30, 1970.
IN A LETTER DATED JULY 4, 1970, WEAVER ADVISED THE CONTRACTING
OFFICER THAT IT HAD MADE AN ERROR IN ITS BID IN THAT IT HAD INTENDED THE
PRICE OF $601.11 ON ITEM 64 AS A LOT PRICE RATHER THAN A UNIT PRICE FOR
THE THREE MOTORS COVERED BY THAT ITEM. THE COMPANY REQUESTED THAT ITEM
64 OF THE CONTRACT BE CANCELED WITHOUT LIABILITY TO THE COMPANY OR THAT
ITS BID PRICE OF $601.11 BE CONSIDERED AS A LOT PRICE FOR ITEM 64, OR
$200.37 PER MOTOR.
THE ABSTRACT OF BIDS SHOWS THAT THE SIX OTHER BIDS ON ITEM 64 RANGED
FROM $131 TO $15.10. THE CURRENT MARKET APPRAISAL VALUE, KNOWN TO THE
CONTRACTING OFFICER PRIOR TO BID OPENING, WAS $80 EACH. IN HIS
SUPPLEMENTAL REPORT, IN WHICH HE RECOMMENDED THAT THE BID OF WEAVER BE
CORRECTED TO SHOW A UNIT PRICE OF $200.37 FOR ITEM 64, THE CONTRACTING
OFFICER STATES THAT THE MOTORS COVERED BY ITEM 64 WERE ORIGINALLY IN A
SCRAP PILE AND THAT THEY WERE LATER UPGRADED TO USABLE PROPERTY; THAT
THE ACQUISITION COST OF THE MOTORS WAS ORIGINALLY ESTIMATED AS $100 AND
LATER RAISED TO $1,000 BY THE DSSO PROPERTY SALES SPECIALIST BASED ON
HIS ESTIMATE OF THE ACQUISITION COST OF SIMILAR PROPERTY; AND THAT AT
THE SAME TIME THAT HE ESTIMATED THE ACQUISITION COST OF THE MOTORS, THE
DSSO PROPERTY SALES SPECIALIST ESTABLISHED A CURRENT MARKET APPRAISAL OF
$80 EACH FOR THE MOTORS. THE CONTRACTING OFFICER ALSO STATED THAT AT
THE TIME HE EVALUATED THE BID OF WEAVER HE OVERLOOKED THE FOREGOING
INFORMATION AND THAT HE HAS CONCLUDED THAT HE SHOULD HAVE BEEN ON NOTICE
OF THE POSSIBILITY OF A MISTAKE IN THE BID OF WEAVER PRIOR TO MAKING AN
AWARD.
NORMALLY, A WIDE RANGE OF BID PRICES IN RESPONSE TO A SURPLUS SALE IS
NOT SUFFICIENT TO PLACE A CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF
THE POSSIBILITY OF ERROR BECAUSE THE PRICES OFFERED DEPEND TO A GREAT
EXTENT UPON THE USES TO WHICH THE PROPERTY WILL BE PUT, OR UPON THE RISK
OF RESALE WHICH THE BIDDER MAY BE WILLING TO TAKE. SEE B-151079, MARCH
28, 1963. ALSO, SEE UNITED STATES V SABIN METAL CORPORATION, 151 F.
SUPP. 683 (1957); AFFIRMED 253 F. 2D 956 (1958); AND WENDER PRESSES,
INC. V UNITED STATES, 343 F. 2D 961 (1965). HOWEVER, IN THIS CASE, THE
BID PRICE OF WEAVER ON ITEM 64 WAS MORE THAN FOUR TIMES THE AMOUNT OF
THE NEXT HIGHEST BID PRICE ON THAT ITEM AND SEVEN TIMES THE CURRENT
MARKET APPRAISAL OF $80.
ACCORDINGLY, IT MAY BE CONCLUDED THAT THE CONTRACTING OFFICER WAS ON
CONSTRUCTIVE NOTICE OF ERROR AND THE BID SHOULD HAVE BEEN VERIFIED PRIOR
TO AWARD. WE THEREFORE CONCUR IN THE RECOMMENDATION THAT THE PRICE OF
ITEM 64 SHOULD BE CORRECTED TO READ $200.37 EACH, OR A TOTAL PRICE OF
$601.11 FOR THAT ITEM.
B-171254, FEB 17, 1971
MUSTERING-OUT PAY
DENYING CLAIM FOR MUSTERING-OUT PAY, BASED ON 10-YEAR LIMITATION
PERIOD.
UNDER THE ACT OF OCTOBER 9, 1940, A CLAIM FOR MUSTERING-OUT PAY MUST
BE RECEIVED BY GAO WITHIN 10 FULL YEARS AFTER THE DATE SUCH CLAIM
ACCRUED AND THE FACT THAT THE CLAIM MAY HAVE BEEN FILED WITH THE U.S.
ARMY FINANCE CENTER WITHIN THAT PERIOD, DOES NOT IN ANY WAY AFFECT THE
OPERATION OF THE BARRING ACT. THE PREVIOUS DECISION DENYING THE CLAIM
MUST THEREFORE BE AFFIRMED.
TO MR. HONORATO L. LARUAN:
REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 17, 1971, REQUESTING
FURTHER CONSIDERATION OF YOUR CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE
INCIDENT TO YOUR DISCHARGE FROM THE PHILIPPINE SCOUTS ON MARCH 2, 1949.
YOU WERE ADVISED IN OUR DECISION OF DECEMBER 7, 1970, B-171254, THAT
YOUR CLAIM WAS BARRED UNDER THE PROVISIONS OF THE ACT OF OCTOBER 9,
1940, 54 STAT. 1061, AS AMENDED, 31 U.S.C. 71A.
YOU URGE THAT THE PROVISIONS OF THE BARRING ACT DO NOT APPLY BECAUSE
YOU RECEIVED A NOTIFICATION CARD IN 1957 THAT YOUR CLAIM HAD BEEN
RECEIVED, WHICH CARD YOU ENCLOSED WITH YOUR LETTER TO THIS OFFICE, DATED
JANUARY 28, 1968.
A REVIEW OF OUR FILE SHOWS THAT THE NOTIFICATION CARD TO WHICH YOU
REFER, WAS SENT TO YOU FROM SETTLEMENT OPERATIONS, UNITED STATES ARMY
FINANCE CENTER, INDIANAPOLIS, INDIANA, THEIR REFERENCE NO. FINCT-E-4,
ACKNOWLEDGING THAT A CLAIM MADE BY YOU HAD BEEN RECEIVED BY THAT
ORGANIZATION.
THE FACT THAT YOU MAY HAVE FILED A CLAIM WITH THE U.S. ARMY FINANCE
CENTER, OR FOR THAT MATTER, ANY AGENCY OF THE UNITED STATES GOVERNMENT
OTHER THAN THIS OFFICE DOES NOT IN ANY WAY AFFECT THE OPERATION OF THE
BARRING ACT. THAT ACT REQUIRES THAT IN ORDER FOR A CLAIM TO BE
CONSIDERED ON ITS MERITS, THAT CLAIM MUST BE RECEIVED IN THE U.S.
GENERAL ACCOUNTING OFFICE WITHIN 10 FULL YEARS AFTER THE DATE SUCH CLAIM
FIRST ACCRUED. SINCE YOUR CLAIM FIRST ACCRUED ON YOUR DATE OF
DISCHARGE, MARCH 2, 1949, IT WAS NECESSARY, IN ORDER TO AVOID THE
CONSEQUENCES OF THE BARRING ACT THAT YOUR CLAIM FOR MUSTERING-OUT PAY BE
RECEIVED IN THIS OFFICE ON OR BEFORE MARCH 2, 1959. OUR FILE SHOWS THAT
YOUR CLAIM FOR MUSTERING-OUT PAY WAS FIRST RECEIVED HERE ON DECEMBER 4,
1967, MORE THAN 18 YEARS AFTER YOUR DISCHARGE. AS A RESULT, THE
PROVISIONS OF THE ACT OF OCTOBER 9, 1940, PROHIBIT CONSIDERATION OF YOUR
CLAIM BY OUR OFFICE.
YOUR LETTER OF JANUARY 17, 1971, PRESENTS NO MATTERS NOT PREVIOUSLY
CONSIDERED AND ACCORDINGLY WE ADHERE TO OUR DECISION OF DECEMBER 7,
1970.
B-171286, FEB 17, 1971
BID PROTEST - BIDDER RESPONSIBILITY - SMALL BUSINESS ADMINISTRATION
DENIAL OF PROTEST OF I.C.E.S., INC., AGAINST THE AWARD OF A
NEGOTIATED CONTRACT ISSUED BY THE SACRAMENTO AIR MATERIEL AREA,
MCCLELLAN AIR FORCE BASE, CALIF., FOR RECONDITIONING AND MODIFYING T-28
AIRCRAFT TO T-28D-0 AIRCRAFT CONFIGURATIONS TO FAIRCHILD HILLER
CORPORATION.
SINCE REFERRAL OF A DETERMINATION OF NON-RESPONSIBILITY ON A SMALL
BUSINESS FIRM WOULD DELAY AIRCRAFT OUTPUT BY AT LEAST 26 CALENDAR DAYS
AND AIRCRAFT DELIVERY HAS BEEN PROMISED BY THE U.S. TO OTHER COUNTRIES
WHO URGENTLY NEED THEM FOR COMBAT PURPOSES, FAILURE TO REFER THE FINDING
THAT PROTESTANT WAS NONRESPONSIBLE TO THE SMALL BUSINESS ADMINISTRATION
WAS JUSTIFIED.
TO I.C.E.S., INCORPORATED:
FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST AWARD OF A CONTRACT
TO FAIRCHILD HILLER CORPORATION BY THE SACRAMENTO AIR MATERIEL AREA,
MCCLELLAN AIR FORCE BASE, CALIFORNIA, PURSUANT TO REQUEST FOR PROPOSALS
NO. F04606-71-R-0146.
THE SUBJECT RFP, ISSUED OCTOBER 15, 1970, SOLICITED PROPOSALS ON
RECONDITIONING AND MODIFYING T-28 AIRCRAFT TO T-28D-0 AIRCRAFT
CONFIGURATIONS IN ACCORDANCE WITH DETAILED SPECIFICATIONS. AS PROVIDED
IN THE RFP A BRIEFING FOR PROSPECTIVE OFFERORS WAS CONDUCTED ON OCTOBER
21, 1970, FOR THE PURPOSE OF CLARIFYING ANY QUESTIONS CONCERNING THE
PROCUREMENT. THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS OCTOBER 30,
1970, AT WHICH TIME FIVE OFFERS WERE RECEIVED. NEGOTIATIONS WERE
CONDUCTED BY TELEPHONE FROM OCTOBER 31, 1970, THROUGH NOVEMBER 2, 1970.
YOU SUBMITTED THE LOWEST EVALUATED PROPOSAL, AND FAIRCHILD HILLER'S
PROPOSAL WAS EVALUATED SECOND LOWEST. CONCURRENT PREAWARD SURVEYS OF
YOUR FIRM AND FAIRCHILD HILLER WERE CONDUCTED NOVEMBER 2 THROUGH
NOVEMBER 6, 1970. AS A RESULT THEREOF, THE CONTRACTING OFFICER
DETERMINED YOUR FIRM NON-RESPONSIBLE AND FAIRCHILD HILLER RESPONSIBLE.
AWARD WAS MADE TO THE LATTER ON NOVEMBER 10, 1970.
YOUR PROTEST RELATES PRIMARILY TO THE DETERMINATION OF
NON-RESPONSIBILITY AND TO YOUR CONTENTION THAT AWARD TO YOUR FIRM WOULD
HAVE SAVED THE GOVERNMENT OVER $500,000. WITH REGARD TO THE MATTER OF
RESPONSIBILITY, YOU POINT OUT THAT THE SHORT TIME FROM THE DATE OF
ISSUANCE OF THE RFP ON OCTOBER 15 TO THE CLOSING DATE ON OCTOBER 30
AFFORDED SUCH LITTLE TIME TO PREPARE A PROPOSAL, PREPARE FOR A PREAWARD
SURVEY AND ESTABLISH A LINE OF CREDIT, THAT YOU WERE MUCH LESS PREPARED
THAN USUAL. YOU POINT OUT THAT WHILE THE SURVEY WAS IN PROGRESS YOU
WERE IN THE PROCESS OF OBTAINING THE NECESSARY CREDIT, AND ADVISED A
GOVERNMENT REPRESENTATIVE ON NOVEMBER 6 AND 9 THAT YOU HAD RAISED OVER
$600,000. FURTHERMORE, YOU STATE THAT IN THE PAST YOU SUCCESSFULLY
PERFORMED SEVERAL GOVERNMENT CONTRACTS INVOLVING WORK COMPARABLE TO THAT
CALLED FOR UNDER THE SUBJECT RFP, AND ARE PRESENTLY PERFORMING CONTRACTS
FOR THE SAN ANTONIO AIR MATERIEL AREA AND THE NAVAL AIR SYSTEMS COMMAND.
ALSO, YOU POINT OUT THAT ON OCTOBER 29 YOU ADVISED THE PROCUREMENT
AGENCY THAT IN THE EVENT OF A NEGATIVE SURVEY YOU WANTED THE MATTER
REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR CERTIFICATE OF
COMPETENCY CONSIDERATION, AND YOU CONTEND THAT THE FAILURE TO DO SO WAS
CONTRARY TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.
MOREOVER, YOU ASSERT THAT THE CONTRACT MAY HAVE BEEN AWARDED ON NOVEMBER
7, 1970, WHICH WAS PRIOR TO THE TIME THE SURVEY REPORT WAS COMPLETED AND
PRESENTED TO THE SURVEY BOARD FOR EVALUATION.
WITH RESPECT TO THE PRICE DIFFERENTIAL, IT IS YOUR CONTENTION THAT
YOUR PROPOSAL WAS MORE THAN $377,000 LESS THAN FAIRCHILD HILLER'S.
FURTHERMORE, YOU POINT OUT THAT YOU OFFERED TO REDUCE YOUR PRICE 4.18
PERCENT ($130,000) IF PROGRESS PAYMENTS WERE AUTHORIZED. IN THIS
CONNECTION, YOU CONTEND THAT THE FAILURE OF THE RFP TO INCLUDE A
PROVISION FOR PROGRESS PAYMENTS WAS IN VIOLATION OF ASPR E-502.1.
WITH REGARD TO YOUR COMPLAINT THAT TOO LITTLE TIME WAS ALLOWED FOR
PREPARING YOUR PROPOSAL, PREPARING FOR A SURVEY, AND ARRANGING FOR
FINANCING, THE CONTRACTING OFFICER REPORTS THAT THE PROCUREMENT WAS
URGENT AS EVIDENCED BY THE "CERTIFICATE OF URGENCY" (WHICH IS QUOTED
BELOW) EXECUTED IN CONNECTION WITH NONREFERRAL OF THE MATTER OF
RESPONSIBILITY TO SBA. IN ADDITION, HE REPORTS THAT YOU AND OTHER
PROSPECTIVE BIDDERS WERE INVITED TO AND DID ATTEND A PRESOLICITATION
CONFERENCE ON OCTOBER 1 AND 2, 1970, IN WHICH THE MAGNITUDE AND SCHEDULE
OF THE PROCUREMENT WERE EXPLAINED; THAT CONFERENCE ATTENDEES WERE
FURNISHED DRAFT COPIES OF THE ENGINEERING SPECIFICATIONS AND APPENDIX A,
WORK SPECIFICATION; THAT YOU WERE ADVISED BY TELEPHONE ON OCTOBER 9,
1970, THAT THE RFP AND A DATA PACKAGE WEIGHING ABOUT 150 - 200 POUNDS
WOULD BE READY ON OCTOBER 15, 1970, AND COULD BE PICKED UP AT SMAMA;
THAT YOU REQUESTED IT BE MAILED; AND THAT YOU WERE FURNISHED A COPY OF
THE BID SET WHEN YOU ATTENDED THE CONFERENCE ON OCTOBER 21, 1970, AS YOU
HAD NOT RECEIVED IT IN THE MAIL. ALSO, HE POINTS OUT THAT ALL BIDDERS
WERE OPERATING UNDER THE SAME TIME RESTRAINTS.
UNDER ASPR 1-902 CONTRACTS ARE TO BE AWARDED ONLY TO RESPONSIBLE
PROSPECTIVE CONTRACTORS. A RESPONSIBLE PROSPECTIVE CONTRACTOR IS ONE
WHO MEETS THE STANDARDS SET FORTH IN ASPR 1-903. AMONG THE STANDARDS
SET FORTH THEREIN ARE ADEQUATE FINANCIAL RESOURCES, ABILITY TO COMPLY
WITH THE REQUIRED DELIVERY SCHEDULE, AND THE NECESSARY ORGANIZATION,
EXPERIENCE, TECHNICAL SKILLS, EQUIPMENT AND FACILITIES, OR THE ABILITY
TO OBTAIN THEM. WHEN A BID OR OFFER IS TO BE REJECTED BECAUSE THE
PROSPECTIVE CONTRACTOR IS FOUND NONRESPONSIBLE, THE CONTRACTING OFFICER
IS REQUIRED BY ASPR 1-904 TO EXECUTE A DETERMINATION OF
NONRESPONSIBILITY. WHERE HE DETERMINES A SMALL BUSINESS BIDDER OR
OFFEROR NONRESPONSIBLE AS TO CAPACITY OR CREDIT, HE IS REQUIRED TO REFER
THE MATTER TO THE SMALL BUSINESS ADMINISTRATION UNLESS HE CERTIFIES THAT
THE AWARD MUST BE MADE WITHOUT DELAY PURSUANT TO ASPR 1-705.4(C)(IV).
ON THE MATTER OF RESPONSIBILITY THE CONTRACTING OFFICER EXECUTED THE
FOLLOWING DOCUMENTS PURSUANT TO ASPR 1-904 AND 1-705.4(C)(IV),
RESPECTIVELY:
"DETERMINATION OF NON-RESPONSIBILITY
"1. PURSUANT TO THE PROVISIONS OF ASPR 1-904 AND BASED UPON THE NO
AWARD RECOMMENDATION OF PRE-AWARD SURVEY NO. SM 0-1031-297 I HEREBY
DETERMINE THAT INTERCONTINENTAL ENGINE SERVICE IS NOT A RESPONSIBLE
CONTRACTOR FOR THIS PROCUREMENT WITHIN THE MEANING OF ASPR 1-902 AND
1-903, IN THAT THE CONTRACTOR;
"A. DOES NOT HAVE ADEQUATE FINANCIAL RESOURCES AND HAS NO ACCEPTABLE
PLAN FOR OBTAINING SUCH RESOURCES.
"B. DOES NOT HAVE ADEQUATE INPLANT CAPABILITY OR EXISTING
SUBCONTRACT ARRANGEMENTS TO MEET THE PRODUCTION REQUIREMENTS OF THIS
PROGRAM.
"C. DOES NOT HAVE ADEQUATE TECHNICAL CAPABILITY IN THAT THE
CONTRACTOR HAS AN ENGINEERING STAFF OF ONE (1) ENGINEER WHO IS ALSO
PRODUCTION CONTROL MANAGER. SUBCONTRACT ARRANGEMENTS WITH MR. YEOMAN,
CONSULTING ENGINEER, IS UNSATISFACTORY IN THAT MR. YEOMAN OPERATES AS AN
INDIVIDUAL AND HAS NO STAFF. THE ENGINEERING ORGANIZATION DESCRIBED BY
THE CONTRACTOR IS TOTALLY INADEQUATE TO ACCOMPLISH THE CONTRACT
REQUIREMENTS.
"D. THE CONTRACTOR'S SAFETY PROGRAM IS DEFICIENT AND EVIDENCE
INDICATES THAT THE CONTRACTOR DOES NOT OPERATE TO PRESCRIBED SAFETY
REQUIREMENTS. THERE IS NO AFFIRMATIVE EVIDENCE THAT THE CONTRACTOR CAN
OPERATE IN COMPLIANCE WITH THE APPENDIX C OR RFP F04606-71-R-0146.
"2. I HAVE REVIEWED THE AIR FORCE CONTRACTOR EXPERIENCE LIST AND THE
EL PASO FACILITY OF ICES IS LISTED THEREON. THIS FACILITY IS OPERATED
UNDER THE SAME GENERAL MANAGEMENT AS THE BROWNSVILLE FACILITY."
"CERTIFICATE OF URGENCY
DETERMINATION NOT TO REFER TO S.B.A.
"1. RFP F04606-71-[-0146 IS FOR RECONDITION AND MODIFICATION OF 50
EACH T-28 AIRCRAFT IN SUPPORT OF PROJECT PEACE PROP. THIS PROGRAM HAS
BEEN ASSIGNED FAD II PRECEDENCE 1-11.
"2. THE MILESTONE SCHEDULE FOR CONTRACT AWARD HAS BEEN DEVELOPED BY
HQ AFLC AND COORDINATED WITH CSAF. IT IS IMPERATIVE THAT THESE
MILESTONES BE MET IN ORDER TO ACCOMPLISH OUTPUT OF AIRCRAFT ON SCHEDULE.
THE NEED FOR THESE AIRCRAFT IS CRITICAL. SPECIFICS ARE SET FORTH IN
SECRET DPCHJUSMAG MSG 290630Z AUG 70.*
"3. REFERRAL OF A DETERMINATION OF NON-RESPONSIBILITY ON A SMALL
BUSINESS FIRM REQUIRES 15 WORKING DAYS. AN ADDITIONAL 5 WORKING DAYS
WOULD BE REQUIRED FOR FILE PREPARATION PENDING THE OUTCOME OF THE
REFERRAL. THIS DELAY WOULD DELAY AIRCRAFT OUTPUT BY AT LEAST 26
CALENDAR DAYS. AN EQUIVALENT SLIPPAGE IN AIRCRAFT OUTPUT AS PROVIDED IN
THE RFP WOULD RESULT.
"4. AIRCRAFT DELIVERY HAS BEEN PROMISED BY THE U.S. GOVERNMENT TO
OTHER COUNTRIES. SINCE THESE ARE COMBAT AIRCRAFT AND ARE URGENTLY
REQUIRED BY THE RECIPIENT COUNTRIES, SERIOUS INTERNATIONAL PROBLEMS
COULD RESULT FROM DELAY IN DELIVERY.
"5. BASED UPON THE ABOVE THE UNDERSIGNED HEREBY CERTIFIES THAT THIS
PROCUREMENT IS OF SUCH URGENCY THAT PURSUANT TO ASPR 1-705.4(C)(IV)
REFERRAL OF THE DETERMINATION OF NON-RESPONSIBILITY ON INTERCONTINENTAL
ENGINE SERVICES, BROWNSVILLE, TEXAS TO THE SMALL BUSINESS ADMINISTRATION
NEED NOT BE MADE.
(SIGNED) WILLIAM R. SWARS 9 NOV 1970
WILLIAM R. SWARS
CONTRACTING OFFICER
APPROVED:
(SIGNED) NIVEN T. CRAWFORD
NIVEN T. CRAWFORD, ACTING
DIRECTOR OF PROCUREMENT AND PRODUCTION
*CONTINUED URGENCY OF THE REQUIREMENTS AS OF 7 NOV 70 IS CONFIRMED BY
AFLC CONFIDENTIAL MESSAGE 072010Z NOV 70."
THE CONTRACTING OFFICER HAS FURNISHED OUR OFFICE COPIES OF THE
PRE-AWARD SURVEY REPORT AND THE PRE-AWARD SURVEY REVIEW BOARD FINDINGS,
BOTH DATED NOVEMBER 8, 1970, UPON WHICH HIS DETERMINATION OF
NONRESPONSIBILITY WAS BASED. THE PRE-AWARD SURVEY REPORT IS
COMPREHENSIVE AND THE NEGATIVE FINDINGS IN THE AREAS OF TECHNICAL
CAPABILITY, PRODUCTION CAPABILITY, FINANCIAL CAPABILITY, PLANT SAFETY,
MANAGEMENT CAPABILITY, AND ABILITY TO MEET THE REQUIRED SCHEDULE ARE
WELL DOCUMENTED. THE REPORT IS TOO EXTENSIVE TO QUOTE IN ITS ENTIRETY.
HOWEVER, QUOTED BELOW IS THE MONITOR'S REPORT, WHICH SUMMARIZES THE
CONCLUSIONS OF THE COGNIZANT MEMBERS OF THE SURVEY TEAM IN THEIR
RESPECTIVE AREAS OF RESPONSIBILITY:
"NEGATIVE FACTORS - DD 1524-5, MONITORS REPORT
TECHNICAL CAPABILITY (ENGINEERING)
"1. THE I.C.E.S. ENGINEERING STAFF CONSISTS OF ONE MAN, MR. BAKER,
WHO IS ALSO PRODUCTION CONTROL MANAGER. THE CONTRACTOR PROPOSED TO
SUBCONTRACT THE ENGINEERING EFFORT TO KEN YOEMAN OF SAN ANTONIO WHO IS
AN INDEPENDENT CONSULTING ENGINEER. MR. YOEMAN WOULD HAVE TO EMPLOY
OTHER ENGINEERS AS THE NEED AROSE TO SUPPORT THE PROGRAM. MR. BAKER AND
MR. YOEMAN WERE NOT FAMILIAR WITH THE REQUIREMENTS OF THE SOLICITATION,
DRAWINGS OR OTHER TECHNICAL DATA PROVIDED. THE PROPOSED ENGINEERING AND
TECHNICAL SUPPORT BOTH IN MANPOWER AND PLANNING WAS INADEQUATE TO MEET
THE REQUIREMENTS OF THIS PROGRAM. REFERENCE DETAILED REPORT ON FACTOR
1.
"2. PRODUCTION CAPABILITY.
"THE PROPOSED LAYOUT AND FUNCTIONS OF THE RECONDITION/MODIFICATION
LINE CHANGED CONTINUALLY DURING THE SURVEY. THE LINE LAYOUT INDICATED A
LACK OF UNDERSTANDING OF THE VOLUME OF THE EFFORT AND SPACE REQUIRED
DURING PEAK BUILDUP PERIODS. THE CONTRACTOR'S BACK UP SHOPS WERE
INADEQUATE TO SUPPORT THE LINE IN THE AREAS OF SHEETMETAL MANUFACTURE,
TUBE BENDING, HYDRAULIC, PROPELLER AND GOVERNOR, CASTING AND FORGINGS,
ENGINE BUILDUP, MACHINING AND ARMAMENT SHOPS. THE CONTRACTOR PROPOSED
TO RELY ON APPROXIMATELY 14 SUBCONTRACTORS LOCATED AT VARIOUS DISTANCES
UP TO 850 MILES FROM THE I.C.E.S. PLANT. THE CONTRACTOR PROPOSED FOR
THE CRITICAL SUPPORT IN SHEETMETAL MANUFACTURE AND TUBE BENDING WAS
SURVEYED AND FOUND TO BE INCAPABLE OF EITHER SHEETMETAL OR TUBING
PRODUCTION. LACK OF FIRM COMMITMENTS ON THE PART OF OTHER
SUBCONTRACTORS MAKE THIS CAPABILITY A QUESTIONABLE FACTOR. THE PROPOSED
MANNING FOR THE LINE AND SHOPS, PARTICULARLY IN THE MANAGEMENT AREA IS
CONSIDERED INADEQUATE FOR THE VOLUME OF THIS PROGRAM, DUE TO EXCESSIVE
RELIANCE ON ONE MAN.
REFERENCE DETAILED REPORT ON FACTOR 2.
"4. FINANCIAL CAPABILITY
"I.C.E.S. IS IN A PRECARIOUS FINANCIAL CONDITION WITH ($119,370)
WORKING CAPITAL AND A ($136,420) NET WORTH AS OF 30 SEPTEMBER 1970 AUDIT
REPORT. A SBA LOAN BALANCE OF APPROXIMATELY $106,000 IS AVAILABLE
PROVIDING THE SBA CAN FIND A BANK THAT WILL ACCEPT THE RISK. THE
CONTRACTOR'S ATTEMPT TO RECEIVE APPROVAL TO SELL $450,000 OF DEBENTURE
BONDS HAS BEEN UNSUCCESSFUL. THE COMPANY WAS GIVEN THE OPPORTUNITY
DURING THE SURVEY TO PRESENT NEW FINANCIAL INFORMATION, BUT WAS UNABLE
TO DO SO. THE COMPLETE LACK OF INTERESTED FINANCIAL BACKING AND
DIFFICULTIES EXPECTED IN MEETING THE PAYROLL ETC. AND IN VIEW OF THE
FACT THAT PROGRESS PAYMENTS ARE NOT A PART OF THE SOLICITATION, ADD UP
TO A CRITICAL NEGATIVE RECOMMENDATION ON THIS ESSENTIAL FACTOR.
REFERENCE DETAIL REPORTS ON FACTOR 4.
"9. PLANT SAFETY
"THE AREAS OF INDUSTRIAL SAFETY AND FIRE PROTECTION WERE FOUND
INADEQUATE DUE TO A NON-EXISTENT INDUSTRIAL SAFETY PROGRAM AND DANGEROUS
FIRE CONDITIONS IN THE BUILDINGS, THE CONTRACTOR LEASES FROM THE CITY.
REFERENCE DETAILED INDUSTRIAL SAFETY AND FIRE PROTECTION REPORTS ON
FACTOR 9.
"13. ABILITY TO MEET REQUIRED SCHEDULE
"THE CONTRACTOR DOES NOT HAVE ANY IN-BEING ENGINEERING CAPABILITY OR
UNDERSTANDING OF TECHNICAL REQUIREMENTS TO MEET THE SCHEDULE OF THE
SOLICITATION WHICH IS A CRITICAL NEGATIVE FACTOR IN HIS ABILITY TO MEET
SCHEDULE. THE PROPOSED PRODUCTION PLAN AND CAPABILITY IS INADEQUATE IN
THE AREAS OF RECONDITIONING/MODIFICATION LINE LAYOUT, BACKUP SHOPS,
SUBCONTRACTING, ABILITY TO MANUFACTURE TOOLING AND EQUIPMENT AND
PROPOSED SKILLS AND MANNING. MANAGEMENT CAPABILITY IS ALSO CONSIDERED
INADEQUATE FOR TIMELY IDENTIFICATION AND CORRECTION OF PROBLEMS INHERIT
IN A PROGRAM OF THIS VOLUME AND COMPLEXITY. THE CONTRACTORS CRITICAL
NEGATIVE FINANCIAL CONDITION WOULD FURTHER DETRACT FROM HIS ABILITY TO
CORRECT SERIOUS DEFICIENCIES IN TECHNICAL AND PRODUCTION CAPABILITY.
REFERENCE DETAIL REPORTS ON FACTORS 1, 2 AND 4.
"14. MANAGEMENT
"MANAGEMENT WAS NOT KNOWLEDGEABLE OF THE TERMS OF THE SOLICITATION.
DEPARTMENT HEADS WERE NOT INFORMED OF WHAT OTHER DEPARTMENTS WERE
THINKING OR PLANNING. AT THE BEGINNING OF THE SURVEY NO TECHNICAL,
(ENGINEERING), AND PRODUCTION PLANS WERE AVAILABLE FOR REVIEW AND WERE
SUBSEQUENTLY PREPARED IN INSUFFICIENT DETAIL TO SUPPORT THE IN-DEPTH
EVALUATION REQUIRED. KEY MANAGEMENT PERSONNEL CONTINUALLY CHANGED THEIR
MINDS WHEN QUESTIONED ON HOW THE PLANT WAS TO BE LAYED OUT AND THE WORK
PERFORMED. THEIR PREVIOUS LACK OF EXPERIENCE WITH ENGINEERING
REQUIREMENTS OF THE TYPE REQUIRED FOR THE T-28 PROGRAM WOULD SERIOUSLY
COMPLICATE INADEQUATE CAPABILITY IN PRODUCTION AND FINANCIAL FACTORS.
THE CONTRACTOR DID NOT RECOGNIZE A NEED FOR INCREASED MANAGEMENT DEPTH
WHICH IS PRESENTLY INADEQUATE WITH EXCESSIVELY HEAVY RELIANCE ON TWO KEY
PEOPLE. THE DETERIORATING FINANCIAL CONDITION OF THE CORPORATION WOULD
FURTHER COMPLICATE THEIR ABILITY TO MANAGE THE PROGRAM TO MEET THE
CRITICAL PRODUCTION SCHEDULE. REFERENCE DETAILED REPORTS ON FACTORS 1,
2 AND 4."
ALTHOUGH YOU FURNISHED CERTAIN ADDITIONAL INFORMATION BEARING ON THE
QUESTION OF FINANCIAL CAPABILITY SUBSEQUENT TO THE NEGATIVE
RECOMMENDATION IN THIS AREA, THE CONTRACTING OFFICER REPORTS THAT THIS
INFORMATION DID NOT REQUIRE A CHANGE IN HIS DETERMINATION OF
NONRESPONSIBILITY WHICH WAS BASED PRIMARILY ON THE NEGATIVE
RECOMMENDATIONS IN THE OTHER AREAS OF CAPABILITY. ALSO, AS NOTED ABOVE,
THE CONTRACT WAS NOT AWARDED AS YOU CONTEND PRIOR TO COMPLETION AND
PRESENTATION OF THE SURVEY REPORT.
WITH RESPECT TO YOUR CONTENTION THAT YOU HAVE PERFORMED, AND ARE
PRESENTLY PERFORMING SUCCESSFULLY CONTRACTS OF THE SAME TYPE FOR THE
GOVERNMENT, THE CONTRACTING OFFICER STATES:
"ICES FURTHER ALLEGES THAT THEY HAVE SUCCESSFULLY PERFORMED AND ARE
PRESENTLY PERFORMING ON GOVERNMENT CONTRACTS FOR THE SAME TYPE OF WORK
CALLED FOR IN THIS PROCUREMENT. ICES' CURRENT WORKLOAD OF MAINTENANCE
ON AF T-29/C-131 AND NAVY T-34 AIRCRAFT WAS EVALUATED FOR COMPLEXITY IN
COMPARISON TO THE T-28 MODIFICATION/RECONDITIONING PROGRAM. WORKBOOKS
FOR BOTH AIRCRAFT WERE CHECKED AND THE WORK WAS FOUND TO BE ROUTINE
MAINTENANCE AND COMPONENT REPLACEMENT. THE WORK BEING PERFORMED DID NOT
INCLUDE DESIGN AND DEVELOPMENT ENGINEERING OF MODIFICATIONS,
MODIFICATION INSTALLATIONS, COMPLETE ELECTRICAL SYSTEM REWIRE OR
ARMAMENT SYSTEMS INSTALLATION AND CHECKOUT WHICH ARE ESSENTIAL
REQUIREMENTS OF THE T-28 PROGRAM. THE PRESENT DELIVERY SCHEDULE ON THE
T-29/C-131, T-34 AIRCRAFT OF APPROXIMATELY 7 AIRCRAFT IN WORK AT ONE
TIME IS NOT COMPARABLE TO THE COMPLEXITY OF THE T-38 SCHEDULE WHICH
WOULD REQUIRE 30 TO 35 AIRCRAFT IN WORK AT THE SAME TIME. ICES HAS BEEN
ABLE TO MEET THE DELIVERY SCHEDULE WITH SATISFACTORY QUALITY DUE TO THE
ROUTINE NATURE OF THE WORK PERFORMED AND THE RELAXED DELIVERY
REQUIREMENTS. ICES HAS NOT PERFORMED AIRCRAFT DESIGN AND DEVELOPMENT
ENGINEERING WHICH IS A MOST CRITICAL REQUIREMENT OF THE T-28 PROGRAM."
IT HAS LONG BEEN OUR POSITION THAT IT IS NEITHER THE PROVINCE NOR THE
INTENTION OF OUR OFFICE TO DETERMINE THE RESPONSIBILITY OF PROSPECTIVE
CONTRACTORS, SUCH DETERMINATION BEING A QUESTION OF FACT PRIMARILY FOR
DETERMINATION BY THE CONTRACTING OFFICER CONCERNED. 45 COMP. GEN. 4, 6,
7 (1965), AND CASES CITED. IN THOSE AND OTHER DECISIONS WE HAVE TAKEN
THE POSITION THAT SUCH DETERMINATION NECESSARILY INVOLVES THE EXERCISE
OF A CONSIDERABLE RANGE OF DISCRETION AND JUDGMENT, WHICH SHOULD NOT BE
DISTURBED BY OUR OFFICE IN THE ABSENCE OF CONVINCING EVIDENCE THAT THE
DETERMINATION HAD NO REASONABLE BASIS. UNDER THAT STANDARD WE ARE
REQUIRED TO ACCEPT THE DETERMINATION OF NONRESPONSIBILITY.
WITH REGARD TO THE CONTENTION THAT YOUR PROPOSAL WAS MORE THAN
$377,000 BELOW THAT OF FAIRCHILD HILLER, THE CONTRACTING OFFICER REPORTS
THE FOLLOWING:
" *** IT IS ASSUMED THAT ICES ARRIVED AT THIS AMOUNT BY SUBTRACTING
THEIR OFFER FOR CONTRACT ITEMS 1 THROUGH 9 ($3,133,858.64) FROM THE
TOTAL AWARD AMOUNT ($3,510,311.38). THE $3,510,311.38 WAS ARRIVED AT BY
ADDING THE FAIRCHILD HILLER PROPOSAL OF $3,038,803.88 FOR ITEMS 1
THROUGH 9, ESTIMATED WORK REQUEST COSTS OF $189,007.50. (21,750 HRS X
PROPOSED RATE OF $8.69 PER HOUR) AND ESTIMATED CAP MATERIAL COST OF
$282,500. HAD THE AWARD BEEN MADE TO ICES THE TOTAL AWARD AMOUNT WOULD
HAVE BEEN $3,133,858.64 (PROPOSED FOR ITEMS 1 THROUGH 9) PLUS WORK
REQUEST OF $102,660.00 (21,750 HRS X PROPOSED RATE OF $4.72 PER HOUR)
AND $282,500. ESTIMATED CAP MATERIAL COST FOR A TOTAL OF $3,519,018.64.
THEREFORE, THE ALLEGATION MADE BY ICES THAT THEIR PROPOSAL WAS $377,000
LOWER IN PRICE IS IN ERROR. ICES'S TOTAL PROPOSAL WAS IN FACT EVALUATED
AT $11,364.14 LOWER THAN THAT OF FAIRCHILD HILLER."
THE CONTRACTING OFFICER STATES THAT FURTHER NEGOTIATIONS WOULD HAVE
BEEN HELD ON YOUR OFFER TO REDUCE YOUR PRICE BY 4.18 PERCENT IF PROGRESS
PAYMENTS WERE AUTHORIZED EXCEPT FOR THE NEGATIVE DETERMINATION ON
RESPONSIBILITY. IN VIEW OF THE DETERMINATION OF NONRESPONSIBILITY, WE
DO NOT BELIEVE IT NECESSARY TO CONSIDER WHETHER THE RFP SHOULD HAVE
PROVIDED FOR PROGRESS PAYMENTS.
IN THE CIRCUMSTANCES REPORTED ABOVE, THERE IS NO BASIS FOR OUR OFFICE
TO DISTURB THE AWARD TO FAIRCHILD HILLER.
B-171481, FEB 17, 1971
DECLARATION OF TAKING - TENANT'S CLAIM FOR REIMBURSEMENT
DECISION HOLDING THAT THE CLAIMS FILED BY JOHN MAYNARD REB, AS
REPRESENTATIVE OF HIS DECEASED PARENTS, IN THE AMOUNTS OF $175 AND $100
WERE PROPERLY DISALLOWED.
WHERE THE GOVERNMENT ACQUIRED A TRACT OF LAND BY A DECLARATION OF
TAKING AND CLAIMANT'S PARENTS ENTERED INTO PRIVATE AGREEMENTS WITH THE
ORIGINAL OWNER FOR PURCHASE OF CERTAIN BUILDINGS AND IMPROVEMENTS, WHICH
WERE LATER DESTROYED, AND WITH THE CLEARING CONTRACTOR FOR THE RIGHT TO
REMAIN ON THE PREMISES LONG ENOUGH TO REMOVE THE ABOVE MENTIONED
BUILDINGS, ABSENT A SHOWING THAT CLAIMANT'S PARENTS HAD PRIVITY OF
CONTRACT WITH THE GOVERNMENT, OR A RELATIONSHIP WITH IT AS PARTIES,
BENEFICIARIES, OR INTERESTED PERSONS, NO GOVERNMENT LIABILITY CAN BE
FOUND. FURTHER, THE ONLY RELATION THAT DID EXIST WAS ONE OF LANDLORD
AND TENANT, AND IT WAS PROPER FOR THE GOVERNMENT TO CHARGE SOME RENT FOR
THE PERIOD OF OCCUPANCY. THEREFORE THE CLAIMS ARE PROPERLY DISALLOWED.
TO MR. JOHN MAYNARD REB:
REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER AND OCTOBER 1970,
TAKING ISSUE WITH THE SETTLEMENT CERTIFICATE OF MARCH 3, 1970, ISSUED BY
THE UNITED STATES GENERAL ACCOUNTING OFFICE. YOU APPARENTLY FEEL THAT
THE GOVERNMENT IS MORALLY INDEBTED TO YOU, AS REPRESENTATIVE OF YOUR
DECEASED PARENTS, UNDER THE FOLLOWING CIRCUMSTANCES.
BY DECLARATION OF TAKING FILED APRIL 21, 1959, THE GOVERNMENT
ACQUIRED A TRACT OF LAND UPON WHICH YOU AND YOUR PARENTS RESIDED AS
TENANTS. THE TRACT WAS TO BE CLEARED OF ALL IMPROVEMENTS. BECAUSE OF
THIS SITUATION, YOUR PARENTS FIRST PAID THE SUM OF $175 TO ONE MR.
GURTLER, THE OWNER OF THE TRACT, AS THE PURCHASE PRICE FOR CERTAIN
BUILDINGS AND IMPROVEMENTS LOCATED THEREON, AND THEN PAID THE SUM OF
$100 TO A REPRESENTATIVE OF THE CLEARING CONTRACTOR FOR THE RIGHT TO
REMAIN UPON THE PREMISES LONG ENOUGH TO REMOVE THESE BUILDINGS AND
IMPROVEMENTS. HOWEVER, SUCH REMOVAL WAS NOT COMPLETED IN THE ALLOTTED
TIME, AND THE BUILDINGS WERE DEMOLISHED. SUBSEQUENTLY, THE GOVERNMENT
ASSESSED RENT FOR YOUR PARENTS' TENANCY ON THE LAND IN THE TOTAL AMOUNT
OF $72.92 FOR A PERIOD OF ALMOST SIX MONTHS DURING WHICH THE LAND WAS
OWNED BY THE GOVERNMENT. YOU ASSERT THAT THE GOVERNMENT SHOULD REPAY TO
YOU THE AFORESAID SUMS OF $175 AND $100 BECAUSE YOU DID NOT SUCCESSFULLY
REMOVE THE BUILDINGS FOR WHICH THE SUMS WERE EXPENDED, AND THAT NO RENT
WHATSOEVER SHOULD HAVE BEEN ASSESSED BECAUSE YOU WERE PROMISED BY MR.
GURTLER'S ATTORNEY THAT YOUR FAMILY WOULD BE ALLOWED TO REMAIN UPON THE
PREMISES INDEFINITELY AND FREE OF CHARGE.
NONE OF THE AGREEMENTS MADE WITH MR. GURTLER OR THE CLEARING
CONTRACTOR INVOLVED THE GOVERNMENT IN ANY WAY. THERE IS NO INDICATION
THAT THE GOVERNMENT ITSELF MADE ANY PROMISES WHATSOEVER EITHER TO YOUR
PARENTS OR FOR THEIR BENEFIT. THESE AGREEMENTS WERE, SIMPLY, BETWEEN
THE PARTIES INVOLVED AND, IF ANY SUCH PROMISES WERE BROKEN, ONLY THOSE
WHO MADE THEM CAN BE HELD RESPONSIBLE. ABSENT ANY SHOWING THAT YOUR
PARENTS HAD PRIVITY OF CONTRACT WITH THE GOVERNMENT, OR A RELATIONSHIP
WITH IT AS PARTIES, BENEFICIARIES, OR INTERESTED PERSONS, NO GOVERNMENT
LIABILITY CAN BE FOUND. SEE KELLOGG V UNITED STATES, 7 WALL. 361. WHEN
AN ENFORCEABLE PROMISE IS BROKEN, COMPENSATION MAY ONLY BE SOUGHT FROM
THE PARTY WHO ACTUALLY MADE THE PROMISE, OR SOMEHOW AGREED TO ABIDE BY
IT. SEE CORBIN ON CONTRACTS, VOLUME 1, SECTION 124. SINCE THERE IS NO
INDICATION THAT THE GOVERNMENT EVER WAS A PARTY TO THE SUBJECT
AGREEMENTS, IT CANNOT BE REQUIRED TO COMPENSATE YOU FOR LOSSES RESULTING
THEREFROM.
THE ONLY RELATIONSHIP WHICH DID EXIST BETWEEN YOUR PARENTS AND THE
GOVERNMENT WAS THAT OF LANDLORD AND TENANT. YOU DO NOT QUESTION THE
AMOUNT OF RENT CHARGED, BUT FEEL THAT NO RENT AT ALL SHOULD HAVE BEEN
ASSESSED. THE GOVERNMENT CLEARLY OWNED THE LAND DURING THE PERIOD IN
QUESTION. SINCE YOUR FAMILY LIVED THERE DURING THAT TIME, FAIRNESS
DEMANDS THAT SOME RENT SHOULD HAVE BEEN PAID TO THE OWNER. YOUR
ALLEGATION CONCERNING THE PROMISE OF MR. GURTLER'S ATTORNEY MAY WELL BE
TRUE. HOWEVER, AS EXPLAINED ABOVE, THE GOVERNMENT WAS IN NO WAY RELATED
TO, OR RESPONSIBLE FOR, THE MAKING OF SUCH A PROMISE, AND MAY NOT
THEREBY BE PRECLUDED FROM RECEIVING RENT PAYMENTS RIGHTFULLY DUE AND
OWING.
FOR THE ABOVE REASONS, YOUR CLAIMS WERE PROPERLY DISALLOWED.
B-171618, FEB 17, 1971
CONTRACTS - UNSIGNED BID
DECISION HOLDING THAT AUTOMATED DATATRON, INC. MAY BE PERMITTED TO
SIGN A BID SUBMITTED IN RESPONSE TO AN IFB ISSUED BY THE NAVY PURCHASING
OFFICE COVERING KEY PUNCH AND KEY VERIFYING SERVICES.
THE WITNESSED DEPOSITING OF THE UNSIGNED BID BY THE FIRM'S PRESIDENT
FIVE MINUTES PRIOR TO THE SCHEDULED BID OPENING TIME COULD BE RELIED
UPON BY THE GOVERNMENT AS EVIDENCING A CLEAR INTENT ON THE PART OF
AUTOMATED DATATRON, INC., TO BE BOUND BY THE TERMS OF THE UNSIGNED BID.
FURTHER, WHERE THE PRESIDENT OF THE FIRM EXPRESSED HIS INTENTION TO BE
BOUND BY THE UNSIGNED BID PRIOR TO HAVING HEARD THE PRICES OF THE OTHER
BIDDERS, IT DOES NOT APPEAR THAT TO HAVE PERMITTED HIM TO SIGN THE BID
AT THAT TIME WOULD HAVE BEEN PREJUDICIAL TO THE RIGHTS OF THE OTHER
BIDDERS. ACCORDINGLY, THE COMPANY MAY BE PERMITTED TO SIGN THE BID AND
IT MAY BE CONSIDERED FOR THE AWARD.
TO MR. SECRETARY:
REFERENCE IS MADE TO LETTERS DATED DECEMBER 24, 1970, AND JANUARY 5,
1971, SUP 0232, FROM THE NAVAL SUPPLY SYSTEMS COMMAND, REQUESTING A
DECISION AS TO WHETHER AUTOMATED DATATRON, INCORPORATED, WASHINGTON,
D.C., MAY BE PERMITTED TO SIGN A BID SUBMITTED IN RESPONSE TO INVITATION
FOR BIDS NO. N00600-71-B-0086, ISSUED OCTOBER 9, 1970, BY THE NAVY
PURCHASING OFFICE, WASHINGTON, D.C., COVERING KEY PUNCH AND KEY
VERIFYING SERVICES FOR THE NAVAL WEAPONS ENGINEERING SUPPORT ACTIVITY.
EIGHT BIDS, INCLUDING AN UNSIGNED BID SUBMITTED BY AUTOMATED
DATATRON, WERE RECEIVED AS OF THE SCHEDULED BID OPENING TIME, 10:30
A.M., EASTERN STANDARD TIME, OCTOBER 30, 1970. ONE OF THE EIGHT BIDS
WAS DETERMINED TO BE NONRESPONSIVE. THE BID OF AUTOMATED DATATRON,
WHICH WAS NOT SIGNED, IS THE LOWEST OF THE SEVEN OTHER BIDS.
IT IS REPORTED THAT THE UNSIGNED AUTOMATED DATATRON BID WAS SUBMITTED
IN A TIMELY MANNER PRIOR TO BID OPENING TIME. MR. CHARLES E. MARKS,
PRESIDENT OF THE COMPANY, WAS SEEN TO HAVE DROPPED THE BID IN THE BID
BOX AT ABOUT 10:25 A.M., EASTERN STANDARD TIME, OCTOBER 30, 1970. AFTER
10:30 A.M., BUT PRIOR TO READING ANY PRICES, ALL BIDS WERE OPENED. THE
AUTOMATED DATATRON BID WAS THE FIRST OPENED BY THE BID OPENING OFFICER.
ONE OF HIS ASSISTANTS, MR. HOWARD MASON, NOTED THAT THE BID, WHICH HAD
BEEN PREPARED FOR MR. MARKS' SIGNATURE, HAD NOT BEEN SIGNED. MR. MASON
HAD SEEN MR. MARKS DEPOSIT THE BID A SHORT TIME EARLIER AND HE NOTIFIED
MR. MARKS THAT THE BID WAS NOT SIGNED. THIS ANNOUNCEMENT CAME PRIOR TO
EXPOSURE OF BIDDERS' NAMES AND PRICES TO THE PUBLIC.
MR. MARKS EXPRESSED CONCERN THAT THE BID WAS NOT SIGNED AND ASKED
WHAT ACTION HE COULD TAKE. HE WAS ADVISED TO SEE THE NEGOTIATOR AND MR.
MARKS CONTACTED THE NEGOTIATOR AT ABOUT 10:45 A.M. MR. MARKS EXPLAINED
THE SITUATION AND REQUESTED THAT HE BE ALLOWED TO SIGN THE BID. HE
STATED THAT HE HAD HEARD NO BID PRICES AND INDICATED THAT HE WANTED TO
GO ON RECORD AS AFFIRMING HIS DESIRE TO SIGN THE BID IN SPITE OF OTHER
BID PRICES. HE DID NOT WANT TO BE PLACED IN THE POSITION OF HAVING THE
OPTION TO SIGN OR NOT TO SIGN THE BID DEPENDING ON THE OTHER PRICES, AND
HE EXPRESSED IN A POSITIVE MANNER HIS INTENTION THAT AUTOMATED DATATRON
WOULD BE BOUND BY THE TERMS OF ITS BID.
IT IS PROVIDED IN PARAGRAPH 2-405(III), ARMED SERVICES PROCUREMENT
REGULATION, THAT THE FAILURE OF A BIDDER TO SIGN HIS BID MAY BE WAIVED
AS A MINOR INFORMALITY ONLY IF -
"(A) THE FIRM SUBMITTING THE BID HAS FORMALLY ADOPTED OR AUTHORIZED
THE EXECUTION OF DOCUMENTS BY TYPEWRITTEN, PRINTED, OR RUBBER STAMPED
SIGNATURE AND SUBMITS EVIDENCE OF SUCH AUTHORIZATION AND THE BID CARRIES
SUCH A SIGNATURE, OR
"(B) THE UNSIGNED BID IS ACCOMPANIED BY OTHER MATERIAL INDICATING THE
BIDDER'S INTENTION TO BE BOUND BY THE UNSIGNED BID DOCUMENT SUCH AS THE
SUBMISSION OF A BID GUARANTEE WITH BID, OR A LETTER SIGNED BY THE BIDDER
WITH THE BID REFERRING TO AND CLEARLY IDENTIFYING THE BID ITSELF;"
THE REGULATION IS IN ACCORD WITH DECISIONS OF OUR OFFICE IN WHICH WE
HAVE STATED THAT UNSIGNED BIDS MAY NOT, AS A GENERAL RULE, BE CONSIDERED
FOR AWARD UNLESS THE BID IS ACCOMPANIED BY DOCUMENTARY OR OTHER EVIDENCE
SHOWING AN INTENTION BY THE BIDDER TO BE BOUND BY THE SUBMITTED BID. 48
COMP. GEN. 648 (1969). HOWEVER, AS WE STATED IN 48 COMP. GEN. 801
(1969), THERE MAY BE CIRCUMSTANCES WHERE THE FAILURE OF A BIDDER TO SIGN
A BID MAY BE WAIVED. IN THAT CASE, ONLY ONE BID WAS RECEIVED AT THE
TIME OF BID OPENING BUT THE BID WAS UNSIGNED. A REPRESENTATIVE OF THE
BIDDER COMPANY PRESENT AT THE BID OPENING PROMPTLY OFFERED TO SIGN THE
BID. WHILE THIS REQUEST WAS BEING CONSIDERED, ANOTHER BID WAS RECEIVED
AND IT WAS DETERMINED THAT THIS LATE BID COULD BE CONSIDERED FOR THE
AWARD. BUT THE UNSIGNED BID WAS LOWER, AND THE CONTRACTING OFFICER
PROPOSED TO ACCEPT THE UNSIGNED LOW BID. WE STATED THAT SINCE THE LOW
BIDDER'S REPRESENTATIVE HAD INDICATED AN INTENT TO SIGN THE BID AT A
TIME WHEN IT WAS THE ONLY BID RECEIVED, THE QUESTION OF PREJUDICE TO
OTHER BIDDERS WAS NOT INVOLVED, AND THE LOW BIDDER SHOULD HAVE BEEN
PERMITTED TO SIGN THE BID AT THAT TIME. WE CONCLUDED THAT THE UNSIGNED
BID SHOULD BE TREATED AS IF PERMISSION TO SIGN HAD BEEN GRANTED AND
THEREFORE, THE BID SHOULD BE CONSIDERED FOR AWARD.
IN THE INSTANT CASE IT IS REPORTED THAT MR. MARKS, PRESIDENT OF
AUTOMATED DATATRON, EXPRESSED HIS INTENTION TO BE BOUND BY THE UNSIGNED
BID PRIOR TO HAVING HEARD THE PRICES OF THE OTHER BIDDERS AT THE BID
OPENING. IN SUCH CIRCUMSTANCES, IT DOES NOT APPEAR THAT TO HAVE
PERMITTED HIM TO SIGN THE BID AT THAT TIME WOULD HAVE BEEN PREJUDICIAL
TO THE RIGHTS OF THE OTHER BIDDERS. SEE IN THIS CONNECTION, 33 COMP.
GEN. 508 (1954), IN WHICH THE BIDDER'S AUTHORIZED REPRESENTATIVE WAS
PERMITTED IN THE BID OPENING ROOM JUST PRIOR TO THE OPENING OF BIDS, TO
ORALLY ACKNOWLEDGE RECEIPT OF MATERIAL AMENDMENTS TO THE IFB.
WE BELIEVE THAT THE WITNESSED DEPOSITING OF THE UNSIGNED BID BY THE
FIRM'S PRESIDENT, FOR WHOSE SIGNATURE THE BID HAD BEEN PREPARED, JUST
FIVE MINUTES PRIOR TO THE SCHEDULED BID OPENING TIME, COULD BE RELIED
UPON BY THE GOVERNMENT AS EVIDENCING A CLEAR INTENT ON THE PART OF
AUTOMATED DATATRON TO BE BOUND BY THE TERMS OF THE UNSIGNED BID. IN
THIS CONNECTION, WE NOTE THAT THE CONTRACT CALLS FOR THE FURNISHING OF
CERTAIN SERVICES TO BE PERFORMED WITHIN A PERIOD OF ONE YEAR. WHILE
ITEM 1 OF THE CONTRACT DOES REQUIRE THE CONTRACTOR TO FURNISH AN
ESTIMATED QUANTITY OF 100,000 EAM CARDS FOR KEY PUNCHING, WE UNDERSTAND
THAT THE TOTAL VALUE OF SUCH CARDS IS WELL BELOW THE $500 AMOUNT
SPECIFIED IN SECTION 2-201 OF THE UNIFORM COMMERCIAL CODE FOR SALES
SUBJECT TO THE STATUTE OF FRAUDS.
ACCORDINGLY, WE CONCLUDE THAT THE COMPANY MAY BE PERMITTED TO SIGN
THE BID AND THAT THE BID AS SIGNED PROPERLY MAY BE CONSIDERED FOR THE
AWARD.
B-171668, FEB 17, 1971
CONTRACTS - MISTAKE IN BID
DECISION DENYING MIL-PAK, INCORPORATED A MODIFICATION OF ITS BID
PRICE ON WHICH A CONTRACT FOR TIE ROD END ASSEMBLIES WAS AWARDED BY THE
DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO.
IN VIEW OF THE INCORPORATION OF ASPR 7-103.10 (A), (WHICH PROVIDES
THAT THE CONTRACT PRICE INCLUDES ALL APPLICABLE FEDERAL, STATE, AND
LOCAL TAXES) INTO THE INITIAL REQUEST FOR PROPOSALS AND SUBSEQUENT
CONTRACT, KNOWLEDGE OF THE POSSIBILITY OF APPLICATION OF THE FEDERAL
EXCISE TAXES MAY BE FAIRLY IMPUTED TO THE CONTRACTOR. THEREFORE THE
REQUEST FOR BID MODIFICATION BASED ON THE IMPOSITION OF THE FEDERAL
EXCISE TAX MUST BE DENIED.
TO MIL-PAK, INCORPORATED:
REFERENCE IS MADE TO YOUR LETTER OF JANUARY 6, 1971, REQUESTING A
$1,326 INCREASE IN THE PRICE OF CONTRACT NO. DSA700-71-C-1721, COVERING
THE PURCHASE OF 7,800 TIE ROD END ASSEMBLIES, WHICH WAS AWARDED TO YOU
ON OCTOBER 6, 1970, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC),
COLUMBUS, OHIO. THE INCREASE REFLECTS THE IMPOSITION OF A $0.17 PER
UNIT FEDERAL EXCISE TAX WHICH YOU CONTEND YOU WERE UNAWARE OF AT THE
TIME YOU SUBMITTED YOUR OFFER AND ALL TIMES THEREAFTER UNTIL YOU
RECEIVED AN ORDER UNDER THE CONTRACT.
PART III, SECTION "L," OF DCSC CONTRACT PROVISIONS BOOKLET (JULY
1970), WHICH FORMED A PART OF THE SOLICITATION AND YOUR CONTRACT AWARDED
THEREUNDER, INCORPORATED BY REFERENCE PARAGRAPH 7-103.10(A) OF THE ARMED
SERVICES PROCUREMENT REGULATION (ASPR), "FEDERAL, STATE, & LOCAL TAXES."
THAT ASPR PROVISION PROVIDES, IN GENERAL, THAT THE CONTRACT PRICE
INCLUDES ALL APPLICABLE FEDERAL, STATE, AND LOCAL TAXES. IN VIEW OF THE
INCORPORATION OF ASPR 7-103.10(A) INTO THE INITIAL REQUEST FOR PROPOSALS
AND SUBSEQUENT CONTRACT, AND THE SPECIFIC MENTION OF "ANY FEDERAL EXCISE
TAX OR DUTY" BY THAT PROVISION, WE BELIEVE THAT KNOWLEDGE OF THE
POSSIBILITY OF APPLICATION OF THE FEDERAL EXCISE TAXES MAY BE FAIRLY
IMPUTED TO YOU. HENCE, IT WAS INCUMBENT UPON THE OFFEROR TO ASCERTAIN
THE APPLICABILITY OF THE VARIOUS TAXES AND TO SUBMIT HIS OFFER
ACCORDINGLY.
IN B-169810, JULY 8, 1970, WE STATED:
"IN CASES INVOLVING MISTAKES IN BIDS OR PROPOSALS ALLEGED AFTER
AWARD, AS IN THIS CASE, RELIEF CAN BE GRANTED ONLY IF THE MISTAKE WAS
MUTUAL OR THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE
OF THE ERROR PRIOR TO AWARD. B-163970, MAY 7, 1968, AND DECISIONS CITED
THEREIN. *** THE ACCEPTANCE OF THE CONTRACTOR'S OFFER BY THE GOVERNMENT
WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR CONSUMMATED A VALID AND
BINDING CONTRACT WHICH FIXED THE RIGHTS OF THE PARTIES. SEE OGDEN AND
DOUGHERTY V UNITED STATES, 102 CT. CL. 249 (1944), AND SALIGMAN ET AL. V
UNITED STATES, 56 F. SUPP. 505 (1944)."
NOTHING ON THE FACE OF YOUR PROPOSAL INDICATES THAT AN ERROR IN PRICE
HAS BEEN MADE. IN ADDITION, WHILE YOUR OFFERED PRICE WAS $2.57 PER
UNIT, THE NEXT THREE LOWEST NET PRICED OFFERS WERE $2.787, $2.795, AND
$2.815, RESPECTIVELY. WE DO NOT BELIEVE THAT THE DIFFERENCE BETWEEN
THESE PRICE OFFERS AND YOURS IS SO GREAT AS TO WARRANT THE CONCLUSION
THAT THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF
ERROR. SEE 49 COMP. GEN. 272 (1969).
ACCORDINGLY, YOUR REQUEST FOR RELIEF IS DENIED.
B-159098, FEB 16, 1971
MUSTERING-OUT PAY
DECISION DENYING CLAIM FOR MUSTERING-OUT PAY BASED ON 10-YEAR LIMIT
PRESCRIBED BY ACT OF OCTOBER 9, 1940.
GAO IS UNABLE TO IDENTIFY THE LAW TO WHICH CLAIMANT REFERS, HOWEVER
ANY RIGHT WHICH CLAIMANT MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER
THE MUSTERING-OUT PAYMENT ACT OF 1944 AND ALL CLAIMS UNDER THOSE
PROVISIONS OF LAW ARE SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR
LIMITATION PERIOD PRESCRIBED IN THE 1944 ACT.
TO MR. JUAN M. SANTIAGO:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 12, 1970, ADDRESSED
TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS, INDIANA,
CONCERNING YOUR CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE YOU INCIDENT TO
YOUR DISCHARGE FROM MILITARY SERVICE IN 1949. YOUR LETTER WAS FORWARDED
TO OUR OFFICE FOR REPLY.
AS YOU WERE ADVISED IN OUR DECISIONS OF MAY 11, 1966, SEPTEMBER 20,
1966, AND DECEMBER 2, 1966, B-159098, THE ACT OF OCTOBER 9, 1940, CH.
788, 54 STAT. 1061, AS AMENDED, 31 U.S.C. 71A, BARS OUR OFFICE FROM
CONSIDERING YOUR CLAIM SINCE IT WAS NOT RECEIVED HERE WITHIN THE 10-YEAR
LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOU ARE ENTITLED TO
MUSTERING-OUT PAY "UNDER THE PROVISIONS ACT #263, OF THE 88TH CONGRESS
DATED JANUARY 9, 1963 APPROVED ON SEPTEMBER 30, 1965," YOU ARE ADVISED
THAT NEITHER PUBLIC LAW 88-263 (WHICH WAS APPROVED JANUARY 31, 1964, AND
HAD NOTHING TO DO WITH MUSTERING-OUT PAY), NOR ANY OTHER LAW OF WHICH WE
ARE AWARE, AUTHORIZES THE PAYMENT OF YOUR CLAIM. ANY RIGHT YOU MAY HAVE
HAD TO MUSTERING-OUT PAY ACCRUED UNDER THE MUSTERING-OUT PAYMENT ACT OF
1944, CH. 9, 58 STAT. 8, AS AMENDED, 38 U.S.C. 691 ET SEQ. (1946 ED.)
AND IMPLEMENTING REGULATIONS CONTAINED IN PARAGRAPHS 313-322 OF T.M.
14-502. HOWEVER, ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THOSE
PROVISIONS OF LAW AND REGULATIONS ARE SUBJECT TO THE BAR IMPOSED BY THE
10-YEAR LIMITATION PERIOD FIXED BY THE 1940 ACT.
SINCE THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY TAKE ON YOUR
CLAIM, IT APPEARS THAT FURTHER CORRESPONDENCE RELATING TO YOUR CLAIM
WILL SERVE NO USEFUL PURPOSE. ACCORDINGLY, LETTERS RECEIVED FROM YOU IN
THE FUTURE RELATING TO THIS MATTER WILL BE FILED WITHOUT REPLY.
B-166943, FEB 16, 1971
EXECUTIVE INTERCHANGE PROGRAM - SELECTEES TRANSPORTATION EXPENSE
REIMBURSEMENT
DECISION AS TO ENTITLEMENT OF EMPLOYEE SELECTED UNDER EXECUTIVE
INTERCHANGE PROGRAM TO WORK IN PRIVATE BUSINESS FOR TWO-YEARS TO
REIMBURSEMENT FOR TRANSPORATION OF DEPENDENTS AND HOUSEHOLD EFFECTS ON
RETURN TO GOVERNMENT EMPLOYMENT.
EMPLOYEE WHO IS SELECTED FOR ASSIGNMENT IN PRIVATE INDUSTRY FOR TWO
YEARS UNDER THE EXECUTIVE INTERCHANGE PROGRAM MAY HAVE THE ASSIGNMENT
REGARDED AS A TRANSFER IN THE INTEREST OF THE GOVERNMENT ON THE BASIS
THAT THE SELECTEE DOES NOT ACTUALLY LEAVE THE GOVERNMENT SERVICE AND THE
ASSIGNMENT AIDS CAREER DEVELOPMENT. THEREFORE, THE TRAVEL AND
TRANSPORTATION EXPENSES ARE PAYABLE AS IN THE CASE OF AN EMPLOYEE
TRANSFER. ALTHOUGH THE RETURN TRANSPORTATION OF EMPLOYEE'S DEPENDENTS
AND EFFECTS MAY BE MADE IN ANTICIPATION OF THE EMPLOYEE'S RETURN TO
GOVERNMENT SERVICE HE MAY NOT BE REIMBURSED THEREFORE UNTIL THE EMPLOYEE
IS TRANSFERRED BACK TO HIS FORMER STATION.
TO MR. MAHONEY:
THIS REFERS TO YOUR LETTER OF JANUARY 13, 1971, REQUESTING A DECISION
FROM OUR OFFICE CONCERNING THE PAYMENT OF TRAVEL OF DEPENDENTS AND
TRANSPORTATION EXPENSES OF HOUSEHOLD EFFECTS OF GOVERNMENT EMPLOYEES WHO
ARE SELECTED TO PARTICIPATE IN THE PRESIDENT'S EXECUTIVE INTERCHANGE
PROGRAM.
YOU SAY THAT ONE OF THE INTERCHANGE EXECUTIVES WHO IS CURRENTLY ON A
LEAVE OF ABSENCE FROM A FEDERAL AGENCY IS WORKING FOR PRIVATE INDUSTRY.
HIS TRANSFER ORDERS NOTE THAT "RETURN PCS MOVE TO BE ACCOMPLISHED BY
JULY 1, 1971." A DEFINITE TIME LIMITATION IS PLACED ON THE PARTICIPANT'S
ASSIGNMENT - THAT IS, IN NO CASE MAY THE INTERCHANGE ASSIGNMENTS LAST
MORE THAN TWO YEARS. FOR PERSONAL REASONS THE INDIVIDUAL'S FAMILY MUST
RETURN TO THE WASHINGTON AREA PRIOR TO THE END OF THE PARTICIPANT'S
ASSIGNMENT. YOU REQUEST INFORMATION WHETHER THE EMPLOYEE WOULD BE
ENTITLED TO REIMBURSEMENT OF THE COST OF TRAVEL OF HIS DEPENDENTS AND
TRANSPORTATION OF HIS HOUSEHOLD EFFECTS AT THE TIME OF HIS TRANSFER TO
THE WASHINGTON AREA.
EXECUTIVE ORDER NO. 11451, DATED JANUARY 19, 1969, ESTABLISHED THE
PRESIDENT'S COMMISSION ON PERSONNEL INTERCHANGE. A FUNCTION OF THE
COMMISSION WAS TO DEVELOP AN EXECUTIVE INTERCHANGE PROGRAM UNDER WHICH
EXECUTIVES OF FEDERAL GOVERNMENT AND THE PRIVATE SECTOR WOULD "BE PLACED
IN POSITIONS" IN THE OTHER SECTOR. THE GOVERNMENT SECTOR SELECTEES DO
NOT ACTUALLY LEAVE THE GOVERNMENT SERVICE AND AS THE TRANSFER IS A PART
OF THEIR GOVERNMENT CAREER AND AIDS THEIR CAREER DEVELOPMENT WE CONSIDER
THESE TRANSFERS TO BE IN THE INTEREST OF THE GOVERNMENT. THUS, THE
TRAVEL AND RELOCATION EXPENSES ARE PAYABLE ON THE SAME BASIS AS IN THE
CASE OF ANY GOVERNMENT EMPLOYEE WHO IS TRANSFERRED IN THE INTEREST OF
THE GOVERNMENT ON A PERMANENT CHANGE OF STATION.
WHEN THE TRAVEL OF THE IMMEDIATE FAMILY AND TRANSPORTATION OF THE
EMPLOYEE'S HOUSEHOLD EFFECTS ARE MADE IN ANTICIPATION OF THE EMPLOYEE'S
TRANSFER AND THE TRAVEL ORDER SUBSEQUENTLY ISSUED TO THE EMPLOYEE
INCLUDES AUTHORIZATION FOR THE TRANSPORTATION OF DEPENDENTS AND
HOUSEHOLD EFFECTS, IT IS NOT MATERIAL THAT SUCH TRAVEL AND
TRANSPORTATION ACTUALLY WAS PERFORMED BEFORE THE TRANSFER OF THE
EMPLOYEE. SEE 29 COMP. GEN. 160; ID. 232; 27 ID. 97; 25 ID. 444.
HOWEVER, AS INDICATED IN YOUR LETTER REIMBURSEMENT FOR THE TRAVEL OF
THE IMMEDIATE FAMILY AND TRANSPORTATION OF THE HOUSEHOLD EFFECTS MAY NOT
BE MADE PRIOR TO THE COMPLETION OF THE EMPLOYEE'S TRANSFER BACK TO HIS
OFFICIAL STATION.
B-167750, FEB 16, 1971
MUSTERING-OUT PAY
DECISION DENYING CLAIM FOR ARREARS OF PAY BASED ON 10-YEAR LIMITATION
PERIOD PRESCRIBED BY THE ACT OF OCT. 9, 1940, AND SINCE CLAIMANT'S MOST
RECENT LETTER REFERS TO NO FACTS OR APPLICABLE PROVISIONS OF LAW NOT
PREVIOUSLY CONSIDERED FURTHER CORRESPONDENCE WILL SERVE NO USEFUL
PURPOSE.
TO MR. MAXIMO G. FERNANDEZ:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 9, 1970, CONCERNING YOUR
CLAIM FOR ARREARS OF PAY BELIEVED TO BE DUE INCIDENT TO YOUR SERVICE IN
THE USAFFE DURING WORLD WAR II.
AS YOU WERE ADVISED IN OUR DECISIONS OF SEPTEMBER 5, 1969, AND
OCTOBER 6, 1970, B-167750, THE ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT.
1061, AS AMENDED, 31 U.S.C. 71A, BARS OUR OFFICE FROM CONSIDERING YOUR
CLAIM SINCE IT WAS NOT RECEIVED HERE WITHIN THE 10-YEAR LIMITATION
PERIOD PRESCRIBED IN THAT ACT.
YOUR CLAIM HAS BEEN CAREFULLY CONSIDERED ON THE BASIS OF THE FACTS
AND INFORMATION CONTAINED IN LETTERS RECEIVED FROM YOU FOR A PERIOD OF
OVER 3 YEARS AND YOU HAVE BEEN FULLY ADVISED OF THE REASONS FOR THE
DISALLOWANCE OF YOUR CLAIM.
SINCE YOUR MOST RECENT LETTER REFERS TO NO FACTS OR APPLICABLE
PROVISIONS OF LAW NOT PREVIOUSLY CONSIDERED BY THIS OFFICE, IT APPEARS
THAT FURTHER CORRESPONDENCE RELATING TO YOUR CLAIM WILL SERVE NO USEFUL
PURPOSE. ACCORDINGLY, ANY LETTERS RECEIVED FROM YOU IN THE FUTURE
RELATING TO THIS MATTER WILL BE FILED WITHOUT REPLY.
B-171063, FEB 16, 1971
CONTRACTS - PAYMENTS - ASSIGNMENTS V ESCROW ARRANGEMENT - SUPPLIER CLAIM
ADVICE THAT SUPPLIER WHO FURNISHED MATERIAL TO TRADERS DISTRIBUTING
CO., LTD., (FAR EAST EXPORT SALES, INC.) IN ACCORDANCE WITH AN ESCROW
ACCOUNT ASSIGNMENT SUBSEQUENTLY HELD NULL AND VOID HAS NO RECOURSE
AGAINST GOVERNMENT FOR CONTRACTOR'S FAILURE TO MAKE PAYMENT.
A SUPPLIER WHO FURNISHED MATERIALS TO A CONTRACTOR WITH THE COAST
GUARD ON THE BASIS OF AN ESCROW ACCOUNT ARRANGEMENT THAT WAS
SUBSEQUENTLY DETERMINED TO BE NULL AND VOID AS NOT AN ASSIGNMENT UNDER
31 U.S.C. 203 BECAUSE THE BANK ACTED AS A MERE AGENT FOR DISBURSEMENT OF
MONIES HAS NO RECOURSE AGAINST THE GOVERNMENT ABSENT PRIVITY OF
CONTRACT. THEREFORE PAYMENT BY GOVERNMENT LESS AMOUNTS SET OFF UNDER
ANOTHER CONTRACT TO THE CONTRACTOR WERE PROPER.
TO DOVER CORPORATION/OPW DIVISION:
REFERENCE IS MADE TO YOUR LETTERS OF OCTOBER 15 AND NOVEMBER 18,
1970, REQUESTING OUR ASSISTANCE IN CONNECTION WITH THE COLLECTION OF
AMOUNTS CLAIMED BY YOUR COMPANY AS A SUPPLIER TO THE CONTRACTOR UNDER
UNITED STATES COAST GUARD CONTRACT NO. DOT-CG35-2135-B, DATED DECEMBER
31, 1969.
YOU STATE THAT THE ABOVE CONTRACT WAS AWARDED TO TRADERS DISTRIBUTING
COMPANY, LIMITED, OF SAN FRANCISCO, CALIFORNIA; THAT YOU REFUSED AN
INITIAL PURCHASE ORDER FROM FAR EAST EXPORT SALES, INCORPORATED, ALSO
KNOWN AS TRADERS DISTRIBUTING COMPANY, FOR LACK OF CREDIT INFORMATION;
THAT IN MARCH 1970, A SMALL ORDER FOR USE AS A PROTOTYPE WAS SHIPPED ON
A C.O.D. BASIS. YOU FURTHER STATE THAT PURSUANT TO AN ESCROW ACCOUNT
ARRANGEMENT WITH THE LIBERTY NATIONAL BANK, SAN FRANCISCO, CALIFORNIA,
YOU SHIPPED MERCHANDISE TO THE CONTRACTOR. UNDER THE ARRANGEMENT, THE
CONTRACTOR WAS TO ASSIGN TO THE BANK PAYMENTS TO BE RECEIVED FROM THE
GOVERNMENT UNDER THE CONTRACT AND THE RANK, IN TURN, WOULD PAY YOU ON
YOUR INVOICES A PERCENTAGE OF THE AMOUNT RECEIVED FROM THE GOVERNMENT;
THAT SEVERAL SHIPMENTS WERE MADE AND PRORATED PAYMENTS RECEIVED FROM THE
BANK. THEREAFTER, FOLLOWING THE FINAL SHIPMENT YOU RECEIVED ADVICE THAT
THE ESCROW ACCOUNT ASSIGNMENT HAD BEEN HELD NULL AND VOID BY THE UNITED
STATES COAST GUARD AND NO FURTHER PAYMENTS WOULD BE MADE TO THE BANK.
YOU RECEIVED NO FURTHER PAYMENTS FROM THE BANK AND HAVE BEEN UNABLE TO
OBTAIN PAYMENT FROM EITHER THE BANK OR THE CONTRACTOR. IN FACT, YOU
HAVE BEEN UNABLE TO CONTACT EITHER COMPANY MENTIONED OR ANY OF ITS
OFFICERS BY WIRE OR BY TELEPHONE. HENCE, YOU SEEK OUR ASSISTANCE.
THE UNITED STATES COAST GUARD ADVISES THAT ON DECEMBER 31, 1969, THE
CONTRACTING OFFICER AWARDED A CONTRACT TO TRADERS DISTRIBUTING COMPANY
TO FURNISH 400 PUMP KITS AT A TOTAL COST OF $91,180. CONTRACT CHANGES
DECREASED THE PRICE TO $91,017.50. CONTRACT MODIFICATION NO. 3, DATED
JUNE 2, 1970, RECORDED THE ASSIGNMENT OF MONIES PAYABLE UNDER THE
CONTRACT TO LIBERTY NATIONAL BANK. MODIFICATION NO. 7, DATED JULY 13,
1970, CANCELLED MODIFICATION NO. 3. THE CONTRACT WAS FULLY PERFORMED ON
AUGUST 7, 1970.
IN MAY 1970, THE UNITED STATES GEOLOGICAL SURVEY (USGS) AND DEFENSE
CONTRACT ADMINISTRATION SERVICES REGION (DCASR), SAN FRANCISCO,
REQUESTED THAT THE CONTRACTING OFFICER SET OFF MONIES PAYABLE UNDER THE
COAST GUARD CONTRACT TO SATISFY THEIR CLAIMS AGAINST FAR EAST EXPORT
SALES, INCORPORATED, THE PARENT COMPANY OF TRADERS DISTRIBUTING COMPANY,
LIMITED. DURING DISCUSSIONS BETWEEN TRADERS AND THE CONTRACTING OFFICER
CONCERNING DISPOSITION OF MONIES PAYABLE UNDER THE CONTRACT, THE
CONTRACTING OFFICER FIRST LEARNED THAT THE ASSIGNMENT OF FUNDS TO THE
BANK STEMMED FROM AN ESCROW AGREEMENT. THE BANK CONFIRMED THAT IT HAD
NOT LENT FINANCIAL ASSISTANCE TO THE CONTRACTOR AS CONTEMPLATED BY THE
ASSIGNMENT OF CLAIMS ACT OF 1940, 31 U.S.C. 203, BUT WAS A MERE AGENT
FOR THE DISBURSEMENT OF MONIES.
THE COAST GUARD, RELYING UPON THE COURT'S DECISION IN CHATTANOOGA
WHEELBARROW CO. V UNITED STATES, CIVIL ACTION NO. 4755, UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF TENNESSEE, SOUTHERN DIVISION, JANUARY
26, 1967, AND OUR DECISION REPORTED AT 49 COMP. GEN. 44 (1969), FOUND
THE ASSIGNMENT TO THE BANK NULL AND VOID. WE BELIEVE THE COAST GUARD
ACTION TO HAVE BEEN CONSISTENT WITH THE CITED DECISIONS.
THE CONTRACTOR, BY LETTERS DATED JULY 9, 1970, AUTHORIZED THE SET-OFF
AGAINST MONIES PAYABLE UNDER THE CONTRACT.
FOLLOWING THE DETERMINATION OF NULLITY OF THE ASSIGNMENT, SUBSEQUENT
PAYMENTS LESS THE AMOUNTS SET OFF WERE MADE DIRECTLY TO THE CONTRACTOR,
INCLUDING FINAL PAYMENT ON AUGUST 11, 1970.
CONCERNING LIABILITY OF THE GOVERNMENT TO YOUR COMPANY, WE MUST FIND
THAT NO PRIVITY OF CONTRACT EXISTED BETWEEN YOUR COMPANY AND THE
GOVERNMENT. IT IS WELL-SETTLED THAT CONTRACTS OR AGREEMENTS TO FURNISH
SUPPLIES TO PRIME CONTRACTORS ENGAGED IN THE PERFORMANCE OF CONTRACTS
WITH THE GOVERNMENT ORDINARILY DO NOT RESULT IN PRIVITY OF CONTRACT
BETWEEN SUBCONTRACTORS AND THE UNITED STATES. IN THE ABSENCE OF SUCH
PRIVITY WE DISCERN NO LIABILITY TO YOUR COMPANY BY THE GOVERNMENT.
ONE OTHER ITEM APPEARING IN THE CONTRACT MAY BE OF ASSISTANCE TO YOU.
THE ADDRESS OF TRADERS DISTRIBUTING COMPANY'S PLANT WAS STATED TO BE AT
1418 WALLACE STREET, SAN FRANCISCO, CALIFORNIA 94124.
WE REGRET OUR INABILITY TO BE OF SUBSTANTIAL ASSISTANCE.
B-171770, FEB 16, 1971
MUSTERING-OUT PAY
DECISION DENYING CLAIM BY DELOREA A. MAPANAO, AS WIDOW, FOR
MUSTERING-OUT PAY IN THE CASE OF SIMPLICIO MAPANAO.
SINCE CLAIM WAS FIRST RECEIVED IN GAO AFTER 10-YEAR LIMITATION PERIOD
PRESCRIBED BY ACT OF OCT. 9, 1940, THE CLAIM IS BARRED, AND THERE ARE
NO OTHER PROVISIONS OF LAW AUTHORIZING THE PAYMENT OF THE CLAIM.
TO MRS. DELORES A. MAPANAO:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 31, 1970,
ADDRESSED TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS,
INDIANA, CONCERNING YOUR CLAIM AS WIDOW FOR MUSTERING-OUT PAY IN THE
CASE OF SIMPLICIO MAPANAO, BELIEVED DUE INCIDENT TO HIS DISCHARGE FROM
MILITARY SERVICE IN 1949. YOUR LETTER WAS FORWARDED TO OUR OFFICE FOR
REPLY.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
OCTOBER 25, 1962, AND FEBRUARY 12, 1963. IN THOSE LETTERS YOU WERE
ADVISED OF THE PROVISIONS OF THE ACT OF OCTOBER 9, 1940, CH. 788, 54
STAT. 1061, 31 U.S.C. 71A, WHICH BAR CONSIDERATION OF YOUR CLAIM BY THIS
OFFICE DUE TO THE FACT THAT SUCH CLAIM WAS NOT RECEIVED IN OUR OFFICE
WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOUR LATE HUSBAND WAS ENTITLED
TO MUSTERING-OUT PAY "UNDER THE PROVISIONS OF ACT NO. 263, 88TH US
CONGRESS, DATED 9 JANUARY 1963, AS APPROVED ON 30 SEPTEMBER 1965," YOU
ARE ADVISED THAT NEITHER PUBLIC LAW 88-263 (WHICH WAS APPROVED JANUARY
31, 1964, AND HAD NOTHING TO DO WITH MUSTERING-OUT PAY), NOR ANY OTHER
LAW OF WHICH WE ARE AWARE, AUTHORIZES THE PAYMENT OF YOUR CLAIM. ANY
RIGHT YOUR HUSBAND MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER THE
MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS AMENDED, 38
U.S.C. 691 ET SEQ. (1946 ED.), AND IMPLEMENTING REGULATIONS CONTAINED IN
PARAGRAPHS 313-322 OF T.M. 14-502. HOWEVER, ALL CLAIMS FOR
MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW AND REGULATIONS ARE
SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION PERIOD FIXED BY THE
1940 ACT.
IN VIEW OF THE FACT THAT YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE
ON OCTOBER 17, 1962, NEARLY 14 YEARS AFTER THE DATE OF YOUR HUSBAND'S
DISCHARGE ON FEBRUARY 10, 1949, THERE IS NO FURTHER ACTION THIS OFFICE
MAY LEGALLY TAKE ON YOUR CLAIM.
B-171772, FEB 16, 1971
MUSTERING-OUT PAY
DECISION DENYING CLAIM FOR MUSTERING-OUT PAY BASED ON 10-YEAR TIME
LIMIT PRESCRIBED BY ACT OF OCTOBER 9, 1940.
GAO IS UNABLE TO IDENTIFY THE LAW TO WHICH CLAIMANT REFERS, HOWEVER
ANY RIGHT WHICH CLAIMANT MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER
THE MUSTERING-OUT PAYMENT ACT OF 1944 AND ALL CLAIMS UNDER THOSE
PROVISIONS OF LAW ARE SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR
LIMITATION PERIOD PRESCRIBED IN THE 1940 ACT.
TO MR. CARLOS DE LA CRUZ:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 10, 1970,
ADDRESSED TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS,
INDIANA, WHICH WAS FORWARDED TO THIS OFFICE FOR REPLY, CONCERNING YOUR
CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF 3,600 PESOS WHICH YOU
BELIEVE DUE INCIDENT TO YOUR MILITARY SERVICE WITH THE PHILIPPINE SCOUTS
FROM WHICH YOU WERE SEPARATED APRIL 25, 1949.
YOUR CLAIM FOR MUSTERING-OUT PAY WAS THE SUBJECT OF LETTERS FROM OUR
CLAIMS DIVISION DATED MARCH 31, 1965, AND FEBRUARY 27, 1967, IN WHICH
YOU WERE INFORMED THAT CONSIDERATION OF YOUR CLAIM FOR SUCH PAY WAS
BARRED BY THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061, SINCE IT WAS NOT
RECEIVED IN OUR OFFICE WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED
IN THAT ACT.
YOU NOW CLAIM MUSTERING-OUT PAY "AS AUTHORIZED UNDER THE PROVISION OF
ACT. NO. 263, 88TH CONGRESS DATED JANUARY 9, 1963 AND APPROVED ON
SEPTEMBER 30, 1965." NEITHER PUBLIC LAW 88-263 (WHICH WAS APPROVED
JANUARY 31, 1964, AND IN NO WAY RELATES TO MUSTERING-OUT PAY), NOR ANY
OTHER LAW OF WHICH WE ARE AWARE, AUTHORIZES THE PAYMENT OF YOUR CLAIM.
ANY RIGHT YOU MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER THE
MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS AMENDED, 38
U.S.C. 691 ET SEQ. (1946 ED.), AND IMPLEMENTING REGULATIONS CONTAINED
IN PARAGRAPHS 313-322 OF WAR DEPARTMENT TECHNICAL MANUAL 14-502.
HOWEVER, ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW
AND REGULATIONS ARE SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION
PERIOD PRESCRIBED IN THE 1940 ACT.
BECAUSE YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE ON MARCH 18,
1965, MORE THAN 10 YEARS AFTER THE DATE OF YOUR DISCHARGE ON APRIL 25,
1949, THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY TAKE ON THE
MATTER.
B-168559, FEB 12, 1971
TO MR. GRAY:
SUBJECT: ARTHUR C. SCHMID, JR., V UNITED STATES, CT. CL. NO. 493-69
YOUR LETTER DATED JANUARY 22, 1971, LPG:AEF:EVF, 154-493-69,
ENCLOSING A COPY OF THE DECISION OF THE COURT OF CLAIMS, DATED JANUARY
22, 1971, IN THE ABOVE-ENTITLED CASE, REQUESTS OUR VIEWS AND
RECOMMENDATION CONCERNING ANY FURTHER ACTION IN THIS CASE.
THE COURT, PURSUANT TO ITS INTERPRETATION OF 10 U.S.C. 687(A), FOUND
THAT THE PLAINTIFF IS ENTITLED TO RECOVER A READJUSTMENT PAYMENT ON
ACCOUNT OF HIS INVOLUNTARY RELEASE FROM ACTIVE DUTY ON JUNE 27, 1969,
AFTER 4 YEARS, 6 MONTHS AND 27 DAYS OF CONTINUOUS ACTIVE DUTY. THE
COURT'S DECISION TURNS UPON THE EFFECT TO BE GIVEN TO EDITING CHANGES
MADE BY THE CODIFIER IN THE CODIFICATION OF A BASIC LAW (ACT OF JULY 9,
1956, CH. 534, 70 STAT. 517). THE DECISION TREATS AS UNIMPORTANT THE
ADMINISTRATIVE CONSTRUCTION OF THE LAW OVER A PERIOD OF MORE THAN 14
YEARS BY ALL OF THE MILITARY DEPARTMENTS CONCERNED.
IT IS OUR VIEW THAT THE COURT'S DECISION IN THIS CASE INCORRECTLY
APPLIED THE LAW SINCE ITS HOLDING IS BASED ON ITS CONCLUSION THAT "THE
SECTION (687(A)) IS CLEAR AND UNAMBIGUOUS ON ITS FACE AND IS
SUSCEPTIBLE, ON ITS FACE, OF ONLY ONE INTERPRETATION."
IN ARRIVING AT ITS CONCLUSION THE COURT CONCEDES THAT SECTION 265(A)
OF THE ACT OF JULY 9, 1956, FROM WHICH SECTION 687(A) WAS DERIVED, "MADE
IT PERFECTLY CLEAR THAT A PART OF A YEAR THAT WAS 6 MONTHS OR MORE WAS
TO BE COUNTED AS A WHOLE YEAR ONLY FOR THE PURPOSE OF COMPUTING
READJUSTMENT PAY." THE "PART OF A YEAR" PROVISION HAD NO APPLICABILITY
TO THE FIVE YEAR QUALIFYING PERIOD. SINCE THAT IS TRUE, IT IS NOT
UNDERSTOOD HOW THE REMOVAL OF THE LANGUAGE LIMITING THAT PROVISION TO
COMPUTATION OF RETIRED PAY, COULD LEAVE THE LAW IN AN EQUALLY CLEAR
CATEGORY, IT BEING OBVIOUS THAT AN UNCERTAINTY THEN CAME INTO EXISTENCE
AS TO WHICH OF TWO DIFFERENT SITUATIONS THE NEW LAW WAS TO APPLY.
TWO TIME FACTORS ARE MENTIONED IN SECTION 687(A), VIZ., FIVE YEARS OF
QUALIFYING ACTIVE DUTY AND YEARS OF ACTIVE SERVICE TO BE USED IN
COMPUTING RETIRED PAY AND IT IS WITH THESE TWO MATTERS WE ARE HERE
CONCERNED. SINCE FEW MEMBERS ARE EVER SEPARATED FROM THE ARMED FORCES
WITH AN EVEN NUMBER OF YEARS OF SERVICE, LANGUAGE SUCH AS THAT CONTAINED
IN SUBSECTION (A)(2) OF SECTION 687 RELATING TO A PART OF A YEAR, HAS
BEEN APPROPRIATELY INCLUDED IN MANY OTHER SIMILAR PROVISIONS OF LAW
RELATING TO THE COMPUTATION OF RETIRED PAY BASED ON YEARS OF SERVICE.
SEE IN THIS CONNECTION 10 U.S.C. 1401, NOTE 3; SECTION 1402, NOTE 1;
SECTION 1405, SECTION 3991, NOTE 4; SECTION 3992, NOTE 2; SECTION
8991, NOTE 4; AND SECTION 8992, NOTE 2.
THE PROBLEM OF FRACTIONAL YEARS, HOWEVER, IS NOT INVOLVED IN ANY WAY
WITH THE MATTER OF A FIXED NUMBER OF YEARS OF QUALIFYING SERVICE. THE
CONGRESS MAY PRESCRIBE ANY PERIOD, FIVE YEARS, FOUR AND ONE-HALF YEARS,
OR ANY OTHER PERIOD OF TIME, AND A RIGHT TO READJUSTMENT PAY ACCRUES
WHEN THE MEMBER INVOLVED MEETS THE REQUIREMENTS OF THE STATUTE.
HOWEVER, AS A MATTER OF RATIONALITY, ONLY ONE PERIOD CAN APPLY. AN
INTENTION TO PRESCRIBE TWO DIFFERENT PERIODS OF QUALIFYING DUTY ONLY ONE
OF WHICH COULD HAVE ANY SIGNIFICANCE, SHOULD NO MORE BE IMPUTED TO THE
CONGRESS THAN AN INTENTION TO PRONOUNCE THE MATHEMATICAL IMPOSSIBILITY
THAT FOUR AND ONE-HALF EQUALS FIVE. IF TWO PERIODS ARE STATED IN A LAW,
THE LONGER PERIOD WOULD BE IRRELEVANT AND WOULD HAVE TO BE IGNORED IN
GIVING EFFECT TO THE LAW.
IT IS PATENTLY INCORRECT TO SAY THAT THE CONGRESS INTENDED THAT ONLY
A FOUR AND ONE-HALF YEAR PERIOD OF ACTIVE DUTY SHOULD BE APPLICABLE IN
QUALIFYING FOR READJUSTMENT PAY. IF, AS CONCLUDED BY THE COURT, A
PERIOD OF FOUR YEARS AND SIX MONTHS OF CONTINUOUS ACTIVE DUTY QUALIFIES
A MEMBER TO RECEIVE READJUSTMENT PAY, NO PURPOSE IS SERVED BY THE
INCLUSION OF THE WORDS "AT LEAST FIVE YEARS OF CONTINUOUS ACTIVE DUTY"
IN SECTION 687(A). EFFECT MUST BE GIVEN TO ALL THE WORDS IN A STATUTE
AND IF ANY MEANING IS TO BE ACCORDED THAT LANGUAGE, THE COURT ERRED IN
CONCLUDING THAT THE STATUTE IS CLEAR AND UNAMBIGUOUS ON ITS FACE.
WE AGREE WITH THE POSITION TAKEN BY JUDGE NICHOLS IN HIS DISSENTING
OPINION THAT WHERE, AS HERE, A STATUTE IS AMBIGUOUS, A READING OF THAT
STATUTE WHICH RESOLVES AN APPARENT CONFLICT BETWEEN TWO PARTS THEREOF,
SHOULD BE ADOPTED IF POSSIBLE. WE FURTHER AGREE WITH HIS OBSERVATION
THAT ENACTMENT OF THE LAW IN ITS PRESENT FORM SHOULD BE ATTRIBUTED TO
SHEER LEGISLATIVE INADVERTENCE. A READY READING OF THE LAW WHICH WILL
AVOID THE ABOVE-MENTIONED CONFLICT IS SUGGESTED BY THE LAW FROM WHICH IT
WAS DERIVED AND THE LEGISLATIVE INTENT EXPRESSED IN S. REPT. NO. 1876,
87TH CONG., 2D SESS., 1962, U.S. CONG. & ADM. NEWS 2456, WHICH
ACCOMPANIED THE BILL (H.R. 10433) WHICH BECAME SECTION 687(A) TO THE
EFFECT THAT -
"SOME CHANGES IN STYLE AND FORM HAVE BEEN MADE TO CONFORM THE
PROVISIONS TO THE STYLE AND FORM OF TITLE 10 AS IT NOW EXISTS, BUT THESE
CHANGES DO NOT AFFECT THE SUBSTANCE OF ANY OF THE LAWS DEALT WITH."
THE COURT INDICATES THAT THE INTERPRETATION OF THE STATUTE BY THE
NAVY DEPARTMENT WHICH IS ADVERSE TO THE PLAINTIFF IS NOT SUFFICIENTLY
PERSUASIVE IN VIEW OF OTHER FACTORS DISCUSSED. AS SHOWN ABOVE, THOSE
FACTORS WERE WRONGLY CONCEIVED BY THE COURT. AS TO THE INTERPRETATION
OF THE LAW BY ALL THE SERVICES, SEE PARAGRAPHS 40411-40417, DEPARTMENT
OF DEFENSE MILITARY PAY AND ALLOWANCES ENTITLEMENTS MANUAL. IF POSSIBLE
AT THIS LATE DATE, THE PRACTICE OF THE OTHER SERVICES IN THIS MATTER
SHOULD BE BROUGHT TO THE ATTENTION OF THE COURT.
IN VIEW OF THE FOREGOING AND THE FACT THAT THE DECISION CONSTITUTES
AN UNDESIRABLE PRECEDENT WHICH COULD LEAD TO SIMILAR INCORRECT
CONCLUSIONS IN THE CONSIDERATION OF FUTURE CASES, WE RECOMMEND FURTHER
ACTION TO BRING THE ABOVE-MENTIONED CONSIDERATIONS TO THE ATTENTION OF
THE COURT AND, IF UNSUCCESSFUL, THAT CONSIDERATION BE GIVEN TO THE
MATTER OF SEEKING A WRIT OF CERTIORARI FROM THE SUPREME COURT OF THE
UNITED STATES TO OBTAIN A REVIEW OF THE DECISION.
B-170141, FEB 12, 1971
BID PROTEST - DEFAULT ON ORIGINAL CONTRACT - REPROCUREMENT
DECISION DENYING PROTEST BY TECHNOLOGY SYSTEMS, INC., FOURTH LOW
BIDDER, AGAINST THE AWARD OF A CONTRACT ISSUED BY POST OFFICE DEPARTMENT
FOR LUMINESCENT INDICIA DETECTOR MODIFICATION KITS TO DEFENSE
ELECTRONICS, SECOND LOW BIDDER.
THE STATEMENT THAT THE SUBJECT SOLICITATION WAS A REPROCUREMENT OF
THAT PORTION OF A FORMER CONTRACT FOR WHICH THE CONTRACTOR WAS DECLARED
IN DEFAULT IS SUFFICIENT NOTICE TO PROSPECTIVE BIDDERS AND IT IS NOT
NECESSARY TO SET OUT THE STATUS OF THE DEFAULTED CONTRACTOR'S EQUIPMENT
AND INVENTORY. FURTHER, IT WOULD NOT BE CONSISTENT WITH THE DUTY OF THE
CONTRACTING OFFICER TO MITIGATE DAMAGES FOR HIM TO HAVE ACCEPTED
PROTESTANT'S HIGHER BIDS IN THE HOPE OF ACHIEVING SAVINGS IN THE AMOUNT
OF PROTESTANT'S ESTIMATE AT THE END OF THE CONTRACT.
TO TECHNOLOGY SYSTEMS, INC.:
WE REFER TO YOUR LETTERS OF JULY 13, 1970, AND NOVEMBER 18, 1970,
RELATING TO YOUR PROTEST UNDER POST OFFICE DEPARTMENT SOLICITATION NO.
2209, ISSUED ON MAY 14, 1970.
YOUR PROTEST POINTED OUT THAT THE SOLICITATION RESULTED WHEN A
PREVIOUS CONTRACT WAS TERMINATED BECAUSE OF THE CONTRACTOR'S FINANCIAL
INABILITY TO CONTINUE AND, AS A RESULT, THE MAJORITY OF THE MATERIAL
SUPPLIERS HAVE NOT BEEN PAID. IN ADDITION, THE SMALL BUSINESS
ADMINISTRATION HAD LIENS AGAINST ALL OF THE RAW INVENTORY AND
WORK-IN-PROCESS AND ALL OF THE MATERIAL WHICH WAS OFFERED IN THE PRESENT
SOLICITATION AS GOVERNMENT FURNISHED EQUIPMENT.
AS A RESULT, YOU CONTEND: (A) THAT IF THE SOLICITATION HAD INDICATED
THESE FACTS, PROSPECTIVE BIDDERS COULD HAVE EXAMINED AND EVALUATED THE
SITUATION AND THE BIDS WOULD PROBABLY HAVE REFLECTED SUBSTANTIAL SAVINGS
TO THE GOVERNMENT AND THE MAXIMUM BENEFIT TO BOTH THE SMALL BUSINESS
ADMINISTRATION AND THE POST OFFICE DEPARTMENT; (B) THAT BASED ON THEIR
EXPERIENCE IN THE DEFAULTED CONTRACT, MANY OF THE UNPAID SUPPLIERS WOULD
BE UNWILLING TO SHIP MATERIAL EXCEPT ON A C.O.D. BASIS, PLACING AN
UNFAIR BURDEN ON THE SMALL BUSINESS FIRM; (C) THAT MOST OF THE DISCRETE
COMPONENTS AND ALL OF THE WORK-IN-PROCESS UNITS ARE PECULIAR TO THE
EQUIPMENT TO BE MANUFACTURED UNDER THIS SOLICITATION, AND THAT THE SBA
COULD RECOVER MORE THAN SCRAP PRICE ONLY THROUGH SALE TO THE
MANUFACTURER UNDER THE SOLICITATION; AND (D) THAT IF THE SOLICITATION
HAD BEEN ISSUED IN THE FORM OF A TWO-STEP PROCUREMENT THE EXISTENCE OF A
LABOR POOL AND IDLE PLANT COULD HAVE BEEN MADE KNOWN TO INTERESTED
PROSPECTIVE BIDDERS, TO THE BENEFIT OF THE POST OFFICE DEPARTMENT, THE
SBA AND THE DISTRESSED LABOR AREA, CUMBERLAND, MARYLAND, WHERE THE
DEFAULTED CONTRACTOR'S PLANT IS LOCATED.
IN SUMMATION OF THE FOREGOING, YOU CONTEND THAT THE SOLICITATION WAS
NEITHER SUFFICIENTLY INFORMATIVE NOR PROPERLY WORDED TO PROVIDE EITHER
TRULY RESPONSIVE BIDS OR THE MOST ECONOMICALLY ADVANTAGEOUS PROCUREMENT.
YOU FURTHER CONTEND THAT AWARD SHOULD NOT BE MADE ON THE BASIS OF BID
PRICE ALONE, AND THAT A PROPER EVALUATION OF YOUR BID WOULD SHOW THAT
YOUR BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.
THE POST OFFICE DEPARTMENT'S REPORT ON YOUR PROTEST STATES THAT
SOLICITATION NO. 2209 REQUESTED BIDS FOR FIVE ITEMS OF TWO TYPES OF
LUMINESCENT INDICIA DETECTOR MODIFICATION KITS AND SPARE PARTS.
ALTERNATIVE BIDS WERE REQUESTED FOR PRODUCTION OF THE FIVE ITEMS WITH
AND WITHOUT GOVERNMENT FURNISHED PARTS. SEVENTEEN BIDS WERE RECEIVED
AND OPENED ON JUNE 15, 1970, WITH THE FOUR LOWEST BIDS AS FOLLOWS:
WITH GOVERNMENT WITHOUT GOVERNMENT
FURNISHED PARTS FURNISHED PARTS
1. M.B.S., INC. $318,793.60 $381,641.45
ROCKVILLE, MD.
2. DEFENSE ELECTRONICS 367,514.60 416,639.40
ROCKVILLE, MD.
3. ROBOTIC SYSTEMS, INC. 385,161.05 448,008.90
PERRY HALL, MD.
4. TECHNOLOGY SYSTEMS, INC. 394,707.05 425,759.40
COCKEYSVILLE, MD. THE REMAINING BIDS RANGED UP TO THE HIGH BID OF
$981,824.00 WITH GOVERNMENT FURNISHED PARTS AND $1,038,788.00 WITHOUT,
WHICH WAS SUBMITTED BY THE BURROUGHS CORPORATION.
AFTER A PREAWARD SURVEY THE CONTRACTING OFFICER DETERMINED THAT THE
LOW BIDDER WAS A NEWLY ORGANIZED CORPORATION WITHOUT MANUFACTURING
FACILITIES. THE CONTRACTING OFFICER THEREFORE REJECTED THE LOW BID AS
NOT BEING FROM A RESPONSIBLE PROSPECTIVE CONTRACTOR.
YOUR PROTEST WAS SUBMITTED UNDER DATE OF JULY 13, 1970, AND ON JULY
29 THE CONTRACTING OFFICER DETERMINED THAT THE LUMINESCENT INDICIA KITS
WERE URGENTLY NEEDED, THAT YOUR PROTEST PRESENTED NO FACTS WHICH WERE
NOT PREVIOUSLY CONSIDERED, AND THAT NO LEGAL BASIS EXISTED FOR REJECTION
OF A LOWER RESPONSIVE BID IN ORDER TO MAKE AWARD TO YOUR COMPANY. YOU
WERE ADVISED OF THE CONTRACTING OFFICER'S ACTIONS AND OF THE AWARD TO
THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER BY LETTER OF JULY 29, 1970,
FROM THE DEPUTY ASSISTANT POSTMASTER GENERAL.
THE AWARD WAS MADE ON THE BASIS OF DEFENSE ELECTRONICS' BID TO
PERFORM THE CONTRACT WITH GOVERNMENT FURNISHED PARTS FOR THE AMOUNT OF
$367,514.40. THE ADMINISTRATIVE REPORT EXPRESSED THE OPINION THAT THIS
PRICE WAS REASONABLE, THAT THE SEVENTEEN BIDS RECEIVED PROVIDED ADEQUATE
COMPETITION, THAT THE SPECIFICATIONS WERE NOT DEFICIENT, AND THAT ALL
FACTORS OF COST TO THE GOVERNMENT WERE COVERED IN THE SOLICITATION. THE
POST OFFICE DEPARTMENT DID NOT AGREE THAT A COMPLETE STATEMENT OF ALL
THE DETAILS YOU SUGGESTED REGARDING THE DEFAULTED CONTRACTOR WAS PROPER
FOR INCLUSION IN THE PRESENT SOLICITATION, AND THE STATEMENT THAT THIS
WAS A REPROCUREMENT OF THAT PORTION OF A FORMER CONTRACT FOR WHICH THE
CONTRACTOR WAS DECLARED IN DEFAULT WAS CONSIDERED SUFFICIENT NOTICE TO
PROSPECTIVE BIDDERS. THE REPORT POINTED OUT THAT YOUR BID WAS SUBMITTED
WITH FULL KNOWLEDGE OF THE DETAILS OF THE DEFAULTED CONTRACT AND YET WAS
NOT LOWEST, WHICH CONTRADICTED YOUR ASSERTION THAT INCLUSION OF THOSE
DETAILS IN THE SOLICITATION WOULD HAVE RESULTED IN SAVINGS TO THE
GOVERNMENT.
THE POST OFFICE DEPARTMENT REGARDED POINTS (A) AND (B) IN YOUR
PROTEST LETTER AS MERE SPECULATION SINCE YOU WERE UNABLE UNDER (A) TO
SUBMIT THE LOWEST BID EVEN WITH THE INFORMATION YOU SAID SHOULD HAVE
BEEN INCLUDED IN THE SOLICITATION AND UNDER (B) THE FOUR LOWEST BIDS
WERE SUBMITTED BY SMALL BUSINESS FIRMS. THE ADMINISTRATIVE REPORT
FURTHER CONCLUDED THAT YOUR POINT (C) WAS NOT RELEVANT SINCE THE
SOLICITATION DID NOT PRECLUDE DISPOSAL OF THE ASSETS OF THE DEFAULTED
CONTRACTOR AS YOU SUGGESTED. WITH REGARD TO POINT (D) THE REPORT STATED
THAT THIS PROCUREMENT WAS NOT APPROPRIATE FOR TWO-STEP ADVERTISING
PROCEDURES UNDER FPR 1-2.502.
YOUR LETTER OF NOVEMBER 18, 1970, DISAGREES WITH THE POST OFFICE
DEPARTMENT'S RESPONSES TO YOUR PROTEST AND REPEATS YOUR PRIMARY
CONTENTION THAT SOLICITATION NO. 2209 WAS DEFECTIVE AND THE AWARD MADE
THEREUNDER WAS IMPROPER. YOU AGAIN ASSERT THAT A PROPER EVALUATION OF
YOUR BID WOULD HAVE SHOWN THAT IT OFFERED A FAIR PRICE FOR THE SUBJECT
PROCUREMENT, AND THAT YOUR BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.
YOU STATE THAT THE POST OFFICE DEPARTMENT PAID APPROXIMATELY $34,000.00
TO A BANK TO OBTAIN RELEASE OF LIENS ON GOVERNMENT FURNISHED PARTS, AND
YOU SUGGEST THAT ADDING THIS COST TO THE CONTRACT PRICE BRINGS THE
ACTUAL COST OF THE CONTRACT TO THE POST OFFICE DEPARTMENT TO OVER
$400,000.00. IN THIS REGARD, YOU ALSO STATED THAT IT WAS INEXPLICABLE
TO YOU THAT THE BIDS WERE EVALUATED ONLY ON THE BASIS OF THE PRICE WITH
GOVERNMENT FURNISHED PARTS.
ALL OF YOUR CONTENTIONS MUST BE CONSIDERED IN CONNECTION WITH THE
STATEMENT THAT APPEARS ON PAGE 5 OF THE SOLICITATION:
"THIS IS A REPROCUREMENT OF THAT PORTION OF CONTRACT 8-1-01622 DATED
JUNE 28, 1968 (SOLICITATION NO. 1315) FOR WHICH THE CONTRACTOR WAS
DECLARED IN DEFAULT." FPR 1-8.602-6(B) PROVIDES THAT IF A REPURCHASE IS
FOR A QUANTITY NOT IN EXCESS OF THE UNDELIVERED QUANTITY TERMINATED FOR
DEFAULT, THE SITUATION WHICH OBTAINED HERE, THE LEGAL REQUIREMENTS FOR
FORMAL ADVERTISING ARE NOT APPLICABLE. SUCH A REPURCHASE IS TAKEN
OUTSIDE THE NORMAL RULES BY THE FACT THAT THE REPURCHASE CONTRACT IS FOR
THE ACCOUNT OF THE DEFAULTED CONTRACTOR AND NOT FOR THE ACCOUNT OF THE
GOVERNMENT. THE EXCESS COSTS INVOLVED IN A REPROCUREMENT, IF ANY, ARE
PART OF THE DAMAGES RESULTING FROM THE DEFAULTED CONTRACT. IN CASES
INVOLVING SUCH REPURCHASES FOR THE ACCOUNTS OF DEFAULTED CONTRACTORS, WE
HAVE HELD THAT CONTRACTING OFFICERS HAVE CONSIDERABLE LATITUDE, SUBJECT
ONLY TO THE RESTRICTION THAT WHATEVER ACTIONS THEY TAKE MUST BE
REASONABLE IN DECIDING THE COURSE THE REPURCHASE PROCUREMENT SHALL TAKE
AND CONSISTENT WITH THEIR DUTY TO MITIGATE DAMAGES. B-168671, MARCH 2,
1970; B-165884, MAY 28, 1969; 42 COMP. GEN. 493 (1963).
IN THE PRESENT CASE, THE SOLICITATION STATED THAT IT WAS A
REPROCUREMENT OF THAT PORTION OF A FORMER CONTRACT FOR WHICH THE
CONTRACTOR WAS DECLARED IN DEFAULT, AND WE CONSIDER THIS TO BE
REASONABLE AND ADEQUATE NOTICE TO PROSPECTIVE BIDDERS. WE ATTACH NO
PARTICULAR SIGNIFICANCE TO THE FACT THAT OTHER BIDDERS DID NOT SHARE
YOUR INTEREST IN THE STATUS OF THE DEFAULTED CONTRACTOR'S EQUIPMENT AND
INVENTORY. IT WAS THE OBLIGATION OF THE POST OFFICE DEPARTMENT TO
OBTAIN AND SUPPLY THE GOVERNMENT FURNISHED PARTS IF AWARD WAS MADE ON
THAT BASIS AND BIDDERS COULD OBTAIN THEIR SUPPLIES FROM SOURCES
DESIGNATED IN THE SOLICITATION IN THE EVENT OF AWARD WITHOUT GOVERNMENT
FURNISHED PARTS. IN NEITHER CASE DID ANY BIDDER HAVE AN OBLIGATION TO
OBTAIN PARTS OR EQUIPMENT FROM THE DEFAULTED CONTRACTOR.
WITH RESPECT TO YOUR ASSERTION THAT PROPER EVALUATION OF YOUR BID
WOULD HAVE SHOWN IT TO BE IN THE BEST INTEREST OF THE GOVERNMENT, YOU
ESTIMATED THAT THERE WOULD BE A SAVING TO THE POST OFFICE DEPARTMENT OF
$11,800.00, AT THE END OF THE CONTRACT, EITHER WITH OR WITHOUT
GOVERNMENT FURNISHED PARTS, IF YOU HAD RECEIVED AN AWARD AND HAD
PURCHASED THE INVENTORY OF THE DEFAULTED CONTRACTOR. HOWEVER, THE
DIFFERENCE BETWEEN YOUR BID AND THE BID OF THE SUCCESSFUL BIDDER WAS
$27,192.45 ON THE BASIS OF GOVERNMENT FURNISHED PARTS AND YOUR BID
WITHOUT GOVERNMENT FURNISHED PARTS WAS $58,344.80 HIGHER THAN THE AWARD
AS MADE. IT WOULD NOT HAVE BEEN CONSISTENT WITH THE DUTY OF THE
CONTRACTING OFFICER TO MITIGATE DAMAGES UNDER THE DEFAULTED CONTRACT FOR
HIM TO HAVE ACCEPTED EITHER OF YOUR HIGHER BIDS IN THE HOPE OF ACHIEVING
SAVINGS IN THE AMOUNT OF YOUR ESTIMATE AT THE END OF THE CONTRACT.
ALTHOUGH YOU ASSERT THAT YOUR OFFER TO PURCHASE THE EQUIPMENT AND
INVENTORY OF THE DEFAULTED CONTRACTOR, IF AWARD WERE MADE TO YOUR FIRM,
WOULD RESULT IN GREATER BENEFITS TO THE SMALL BUSINESS ADMINISTRATION
AND TO EMPLOYEES OF THE DEFAULTED CONTRACTOR, WE AGREE WITH THE POST
OFFICE DEPARTMENT THAT THESE FACTORS ARE SPECULATIVE. IN ANY EVENT, WE
DO NOT CONSIDER THIS TO BE A PROPER MATTER FOR EVALUATION IN CONNECTION
WITH THIS REPURCHASE SINCE THERE IS NO DUTY IMPOSED ON THE CONTRACTING
OFFICER, BY STATUTE OR OTHERWISE, TO CONSIDER SUCH FACTORS. MOREOVER,
IF POST OFFICE DEPARTMENT FUNDS WERE EXPENDED FOR THE BENEFIT OF THE
SMALL BUSINESS ADMINISTRATION, IT WOULD BE ENTIRELY INCONSISTENT WITH
THE PURPOSES OF THE POST OFFICE'S APPROPRIATION AND WOULD CONSTITUTE AN
ILLEGAL AUGMENTATION OF THE SMALL BUSINESS ADMINISTRATION APPROPRIATION.
WITH REGARD TO YOUR QUESTIONING THE EFFECT OF THE POST OFFICE
DEPARTMENT'S PAYMENT OF APPROXIMATELY $34,000.00 TO OBTAIN RELEASE OF A
LIEN ON GOVERNMENT FURNISHED PARTS, SUCH PAYMENT MUST BE REGARDED AS A
PART OF THE DAMAGES RESULTING FROM THE DEFAULT AND, AS SUCH, IS A
PAYMENT FOR THE ACCOUNT OF THE DEFAULTED CONTRACTOR. IT CANNOT BE
CONSIDERED INCONSISTENT WITH THE CONTRACTING OFFICER'S DUTY TO MITIGATE
DAMAGES TO MAKE SUCH A PAYMENT IN VIEW OF THE DIFFERENCE OF $49,124.80
BETWEEN THE ALTERNATIVE BIDS OF THE LOW BIDDER, WHEN MAKING THE PAYMENT
ENABLED HIM TO ACCEPT THE LOWER ALTERNATIVE. WE ARE OF THE OPINION THAT
THE CONTRACTING OFFICER'S ACTIONS WERE ENTIRELY REASONABLE IN THIS
REGARD.
WE ALSO AGREE WITH THE POST OFFICE DEPARTMENT'S CONCLUSION THAT THE
PROCUREMENT IN QUESTION IS NOT APPROPRIATE FOR TWO-STEP ADVERTISING
PROCEDURES. THE TWO-STEP FORMAL ADVERTISING METHOD WAS DESIGNED TO
PROMOTE MAXIMUM COMPETITION WHEN AVAILABLE SPECIFICATIONS ARE NOT
SUFFICIENTLY DEFINITE TO PERMIT FULL AND FREE COMPETITION WITHOUT
ENGINEERING EVALUATION AND DISCUSSION OF TECHNICAL ASPECTS OF THE
REQUIREMENT TO INSURE MUTUAL UNDERSTANDING. SINCE THE TECHNICAL
SPECIFICATIONS WERE COMPLETE BOTH FOR THE ORIGINAL PROCUREMENT AND THE
REPURCHASE AND NO ENGINEERING EVALUATION WAS REQUIRED, THE CONDITIONS
FOR USE OF THE TWO-STEP FORMAL ADVERTISING METHOD WERE NOT PRESENT HERE.
SEE FPR 1-2.502.
IN YOUR RESPONSE TO THE ADMINISTRATIVE REPORT, YOU SUBMITTED
INFORMATION CONCERNING THE SUCCESSFUL BIDDER, DEFENSE ELECTRONICS, AND
EXPRESSED THE VIEW THAT THE COMPANY WAS HAVING FINANCIAL PROBLEMS AND
WOULD HAVE DIFFICULTY PERFORMING THE CONTRACT. HOWEVER, SINCE YOU
STATED IN YOUR LETTER THAT YOU WERE NOT CONCERNED WITH THE EXTENT OF THE
PREAWARD SURVEY CONDUCTED BY THE POST OFFICE DEPARTMENT, WE DO NOT
REGARD YOUR SUBMISSIONS AS QUESTIONING THE REASONABLENESS OF THE
DEPARTMENT'S DETERMINATION PRIOR TO AWARD THAT DEFENSE ELECTRONICS WAS A
RESPONSIBLE CONTRACTOR.
YOUR OBSERVATION THAT MANY OF THE SUPPLIERS, AS A RESULT OF THEIR
EXPERIENCE WITH THE DEFAULTED CONTRACTOR, MAY BE RELUCTANT TO SHIP ANY
MATERIAL EXCEPT ON A C.O.D. BASIS IS WELL FOUNDED. WE HAVE BEEN
ADVISED THAT THE CONTRACTOR DID, IN FACT, EXPERIENCE DIFFICULTY OF THIS
NATURE. HOWEVER, ADEQUATE FINANCIAL ARRANGEMENTS HAVE NOW BEEN EFFECTED,
SUPPLIES HAVE BEEN DELIVERED AND THE CONTRACT IS BEING PERFORMED IN A
MANNER SATISFACTORY TO THE POST OFFICE DEPARTMENT. SINCE IT DOES NOT
APPEAR THAT ANY MODIFICATION OF THE SOLICITATION WOULD HAVE AFFECTED
THIS ATTITUDE ON THE PART OF THE SUPPLIERS, YOUR OBSERVATION, ALTHOUGH
VALID, DOES NOT PROVIDE ANY BASIS ON WHICH TO OBJECT TO THE FORM OF THE
SOLICITATION.
FOR THE REASONS STATED, IT IS OUR OPINION THAT NONE OF THE BASES YOU
ASSERTED FOR YOUR PROTEST AFFORD ANY LEGAL GROUNDS FOR QUESTIONING THE
AWARD IN THIS REPROCUREMENT, AND YOUR PROTEST MUST THEREFORE BE DENIED.
B-170420, FEB 12, 1971
BID PROTEST - CHANGED REQUIREMENTS
AFFIRMING PRIOR DECISION DENYING PROTEST BY KENTRON HAWAII, LTD.,
AGAINST CANCELLATION OF AN IFB ISSUED BY THE U.S. ARMY MISSILE COMMAND.
THE REMOVAL OF GOVERNMENT FURNISHED EQUIPMENT AND THE INCREASE IN
WORKLOAD COULD HAVE HAD A SUBSTANTIAL EFFECT UPON THE BID PRICES
SUBMITTED BY THE VARIOUS BIDDERS AND BECAUSE THE GOVERNMENT WAS
OBLIGATED UNDER THE SUBJECT IFB TO ORDER FROM THE CONTRACTOR ALL
SERVICES SET FORTH IN THE SCHEDULE REQUIRED BY THE U.S. ARMY MISSILE
COMMAND AND ADDITIONAL REQUIREMENTS COULD NOT BE PROCURED BY MEANS OF
ANOTHER INVITATION COVERING THE SAME PERIOD (SEE JOHNSON COAL & COKE CO.
V U.S., 66 CT. CL. 616, 621 (1929), THE CANCELLATION OF THE IFB IS
PROPER AND CANNOT BE AFFECTED BY THE COMPETITIVE RESULTS OF THE
RESOLICITATION.
TO KENTRON HAWAII, LTD.:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 24, 1970, REQUESTING
RECONSIDERATION OF OUR DECISION OF NOVEMBER 16, 1970, DENYING YOUR
PROTEST AGAINST THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO.
DAAN03-70-B-0166, ISSUED BY THE UNITED STATES ARMY MISSILE COMMAND. THE
CIRCUMSTANCES INVOLVED IN THE CANCELLATION OF THE IFB WERE FULLY STATED
IN OUR DECISION AND WILL NOT BE REPEATED HERE EXCEPT AS SET OUT BELOW.
YOU OBSERVE THAT OUR REASON FOR CANCELLATION OF THE IFB WAS AS
FOLLOWS (QUOTING FROM THE NOVEMBER 16 DECISION):
"HOWEVER, ON JULY 6, 1970, IT WAS ASCERTAINED THAT BECAUSE OF THE
TRANSFER OF THE APC WORKLOAD TO REDSTONE ARSENAL THE ACTUAL REQUIREMENTS
WOULD BE CONSIDERABLY MORE THAN THOSE CONTEMPLATED BY THE INVITATION.
FURTHER, IT WAS DETERMINED THAT ONE CONTRACTOR COULD NOT MEET ALL THE
THEN CONTEMPLATED REQUIREMENTS WITHIN REQUIRED TIME-FRAMES. BY
DEPARTMENTAL TELETYPE DATED JULY 13, 1970, 140 ITEMS OF EQUIPMENT
LOCATED AT APC, WHICH HAD BEEN INCLUDED IN THE INVITATION LISTING AS
GOVERNMENT-FURNISHED PROPERTY, WERE WITHDRAWN FROM AVAILABILITY FOR USE
BY PROSPECTIVE BIDDERS."
YOU CONTEND THAT THE ABOVE SITUATION IS COVERED BY PARAGRAPH
2-404.1(A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND BY
GENERAL PROVISION NO. 39, GOVERNMENT PROPERTY (FIXED PRICE), ASPR
13-702(A), AS REVISED BY DEFENSE PROCUREMENT CIRCULARS 63 AND 64.
OUR DECISION OF NOVEMBER 16, 1970, CONSIDERED NOT ONLY THE PROBLEM OF
INCREASE IN REQUIREMENTS DUE TO THE CLOSING OF THE ARMY PICTORIAL CENTER
(APC), BUT ALSO, AND MORE IMPORTANTLY, THE WITHDRAWAL FROM CONTRACTOR
USE OF 140 OF THE 238 ITEMS OF GOVERNMENT-OWNED MOTION PICTURE
PRODUCTION EQUIPMENT WHICH ITEMS, WE ARE INFORMED, ARE VALUED AT MORE
THAN $500,000. THE REMOVAL FROM USE OF THIS EQUIPMENT COULD HAVE HAD A
SUBSTANTIAL EFFECT UPON THE BID PRICES SUBMITTED BY THE VARIOUS BIDDERS
WHO APPARENTLY BASED THEIR PRICES UPON THE AVAILABILITY FOR USE OF ALL
OF THE LISTED GOVERNMENT PROPERTY. AFTER THE REMOVAL OF THE
GOVERNMENT-FURNISHED EQUIPMENT AND THE INCREASE IN WORKLOAD DUE TO THE
TRANSFER OF THE APC WORKLOAD TO REDSTONE ARSENAL, IT WAS CONCLUDED THAT
THE IFB SHOULD BE CANCELED.
ASPR 2-404.1(A) STATES THE GENERAL RULE APPLICABLE TO THE REJECTION
OF ALL BIDS AND CANCELLATION OF AN INVITATION AS FOLLOWS:
"(A) THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM
DICTATES THAT AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT
RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE
IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION.
EVERY EFFORT SHALL BE MADE TO ANTICIPATE CHANGES IN A REQUIREMENT PRIOR
TO THE DATE OF OPENING AND TO NOTIFY ALL PROSPECTIVE BIDDERS OF ANY
RESULTING MODIFICATION OR CANCELLATION, THEREBY PERMITTING BIDDERS TO
CHANGE THEIR BIDS AND PREVENTING THE UNNECESSARY EXPOSURE OF BID PRICES.
AS A GENERAL RULE, AFTER OPENING, AN INVITATION FOR BIDS SHOULD NOT BE
CANCELED AND READVERTISED DUE SOLELY TO INCREASED REQUIREMENTS FOR THE
ITEMS BEING PROCURED; AWARD SHOULD BE MADE ON THE INITIAL INVITATION
FOR BIDS AND THE ADDITIONAL QUANTITY REQUIRED SHOULD BE TREATED AS A NEW
PROCUREMENT."
UNDER THE IFB, THE GOVERNMENT WAS OBLIGATED TO ORDER FROM THE
CONTRACTOR ALL THE SERVICES SET FORTH IN THE SCHEDULE REQUIRED BY THE
UNITED STATES ARMY MISSILE COMMAND THROUGH JUNE 30, 1971. HENCE,
ADDITIONAL REQUIREMENTS FOR THE SAME SERVICES COULD NOT BE PROCURED BY
MEANS OF ANOTHER INVITATION COVERING THE SAME PERIOD. CF. JOHNSON COAL
& COKE CO. V UNITED STATES, 66 CT. CL. 616, 621 (1929).
WITH REFERENCE TO YOUR VIEW THAT THE GOVERNMENT PROPERTY CLAUSE
REFERENCED IN THE IFB COULD HAVE BEEN INVOKED TO REMEDY THE WITHDRAWAL
OF A PORTION OF THE GOVERNMENT PROPERTY LISTED IN THE IFB, IT SHOULD BE
NOTED THAT THIS CLAUSE AND ITS ADJUSTMENT PROVISIONS BECOME OPERATIVE
ONLY AFTER A CONTRACT HAS BEEN AWARDED UNDER THE IFB. SINCE NO AWARD
COULD HAVE BEEN MADE, THE CLAUSE COULD NOT HAVE BEEN USED TO CURE THE
PROPERTY DEFECT IN THE IFB.
WE HAVE CONSIDERED YOUR COMMENT THAT THE RESOLICITATION FOR "HIGHER"
REQUIREMENTS WITH "LESS" GOVERNMENT PROPERTY RESULTED IN SIGNIFICANTLY
LOWER BIDS THAN THOSE RECEIVED UNDER THE CANCELED SOLICITATION. YOU
EMPHASIZE THE FACT THAT THE SUCCESSFUL BIDDER "WAS SOME 20% BELOW THE
ORIGINAL LOW BID AND 26% BELOW HIS OWN BID ON THE FIRST SOLICITATION."
ASSUMING THESE FACTS TO BE CORRECT, THEY DO NOT SERVE TO ESTABLISH ANY
IMPROPRIETY IN CONNECTION WITH THE RESOLICITATION. WHERE, AS SHOWN
ABOVE, THE CANCELLATION OF A SOLICITATION WAS PROPER UNDER THE
CIRCUMSTANCES, THE COMPETITIVE RESULTS OF THE RESOLICITATION CAN HAVE NO
EFFECT TO DISTURB THE PROPRIETY OF THE CANCELLATION ACTION PREVIOUSLY
TAKEN.
ACCORDINGLY, THE DECISION OF NOVEMBER 16, 1970, IS AFFIRMED.
B-171162, FEB 12, 1971
COMPENSATION - PIECE-RATE BASIS
REAFFIRMING PRIOR DECISION DENYING ADDITIONAL COMPENSATION TO
MARGARET M. WAGNER, A CENSUS ENUMERATOR, BASED ON AN HOURLY RATHER THAN
A PIECE-RATE BASIS.
SINCE THE APPOINTMENT FORM INDICATED CLAIMANT WOULD BE PAID ON EITHER
AN HOURLY OR PIECE-RATE BASIS, THE METHOD OF PAYMENT WAS A MATTER OF
ADMINISTRATIVE DISCRETION FOR THE BUREAU OF THE CENSUS. THEREFORE,
THERE IS NO AUTHORITY TO REIMBURSE CLAIMANT FOR THE DIFFERENCE BETWEEN
HOURLY AND PIECEWORK PAY. FURTHER, A CLAIM FOR $10,000 FOR
"HARRASSMENT" IS ALSO DENIED.
TO MRS. MARGARET M. WAGNER:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 20, 1970, REQUESTING
RECONSIDERATION OF YOUR CLAIM FOR COMPENSATION ON AN HOURLY RATHER THAN
A PIECE-RATE BASIS AS A CENSUS ENUMERATOR WITH THE DEPARTMENT OF
COMMERCE AT OROVILLE, CALIFORNIA. THAT CLAIM INCLUDING AN ADDITIONAL
AMOUNT FOR $674.40 REPRESENTING INTEREST, THE COST OF THREE PAIR OF
HOSE, AND A "HARASSMENT" FEE WAS DISALLOWED BY OUR DECISION OF NOVEMBER
18, 1970. ALSO, YOU NOW CLAIM AN ADDITIONAL $10,000 OVER AND ABOVE THE
ORIGINAL AMOUNTS FOR "HARASSMENT."
THE RECORD SHOWS THAT YOU WERE HIRED ON MARCH 30, 1970, AS AN
"ENUMERATOR-CLERK CB-4675." YOUR APPOINTMENT FORM (BC-SA ISSUED FEBRUARY
20, 1969) STATED THAT YOU WOULD BE PAID EITHER ON AN HOURLY RATE OR ON A
PIECE-RATE BASIS. FURTHER BOTH THE BOOKLET ENTITLED "LET'S TALK CENSUS"
AND YOUR APPOINTMENT FORM INDICATED THAT THE METHOD OF PAYMENT WOULD BE
THE SUBJECT OF ADMINISTRATIVE DISCRETION. ALSO, THERE WAS A SPECIFIC
DISCLAIMER OF ANY GUARANTEE AS TO WHAT THE PIECEWORK EARNINGS WOULD BE.
THE RECORD FURTHER SHOWS THAT IT WAS SPECIFICALLY DECIDED
ADMINISTRATIVELY THAT YOU WOULD BE PAID ON A PIECEWORK BASIS.
ACCORDINGLY, WE AGAIN REPEAT THERE IS NO AUTHORITY TO REIMBURSE YOU
FOR THE DIFFERENCE BETWEEN HOURLY AND PIECEWORK PAY DURING THE PERIOD OF
YOUR EMPLOYMENT. NOR IS THERE AUTHORITY TO REIMBURSE YOU IN ANY OTHER
AMOUNT FOR "HARASSMENT" OR OTHERWISE.
B-171784, FEB 12, 1971
MUSTERING-OUT PAY
DECISION DENYING CLAIM FOR MUSTERING-OUT PAY BASED ON 10-YEAR PERIOD
OF LIMITATION IMPOSED BY THE ACT OF OCTOBER 9, 1940.
A CLAIM WHICH ACCRUED ON MARCH 15, 1947, BUT WAS NOT RECEIVED BY GAO
UNTIL SEPTEMBER 9, 1968, IS BARRED BY THE ACT OF OCTOBER 9, 1940, AND
THERE ARE NO OTHER PROVISIONS OF LAW WHICH AUTHORIZES THE PAYMENT OF
MUSTERING-OUT PAY INCIDENT TO CLAIMANT'S SERVICE WITH THE PHILIPPINE
SCOUTS.
TO MR. GERONIMO A. QUINITO:
FURTHER REFERENCE IS MADE TO YOUR UNDATED LETTER ADDRESSED TO THE
UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS, INDIANA, WHICH WAS
FORWARDED HERE FOR REPLY. IN THAT LETTER YOU CLAIM MUSTERING-OUT PAY IN
THE AMOUNT OF $3,600 WHICH YOU BELIEVE IS DUE INCIDENT TO YOUR MILITARY
SERVICE WITH THE PHILIPPINE SCOUTS FROM AUGUST 28, 1941, TO MARCH 15,
1947.
YOUR CLAIM FOR MUSTERING-OUT PAY WAS THE SUBJECT OF LETTERS FROM OUR
CLAIMS DIVISION DATED JANUARY 22 AND APRIL 28, 1969, IN WHICH YOU WERE
ADVISED THAT CONSIDERATION OF YOUR CLAIM WAS BARRED BY THE ACT OF
OCTOBER 9, 1940, 54 STAT. 1061, SINCE IT WAS NOT RECEIVED IN OUR OFFICE
WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
YOU NOW CLAIM MUSTERING-OUT PAY "AUTHORIZED UNDER THE PROVISION OF
ACT NO. 623, 88TH CONGRESS, DATED 9 JANUARY 1963, AS APPROVED 30
SEPTEMBER 1965." NEITHER PUBLIC LAW 88-263 (WHICH WAS APPROVED OCTOBER
3, 1964, AND IN NO WAY RELATES TO MUSTERING-OUT PAY), NOR ANY OTHER LAW
OF WHICH WE ARE AWARE, AUTHORIZES THE PAYMENT OF YOUR CLAIM. ANY RIGHT
YOU MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER THE MUSTERING-OUT
PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS AMENDED, 38 U.S.C. 691 ET
SEQ. (1946 ED.), AND IMPLEMENTING REGULATIONS CONTAINED IN PARAGRAPHS
313-322 OF WAR DEPARTMENT TECHNICAL MANUAL 14-502. HOWEVER, ALL CALIMS
FOR MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW AND REGULATIONS ARE
SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION PERIOD PRESCRIBED
BY THE 1940 ACT.
BECAUSE YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE ON SEPTEMBER 9,
1968, MORE THAN 10 YEARS AFTER THE DATE OF YOUR DISCHARGE ON MARCH 15,
1947, THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY TAKE ON THIS
MATTER.
B-171814, FEB 12, 1971
BID PROTEST - BASE BID AND OPTIONS - FUND LIMITATION
DENIAL OF PROTEST OF DAVID R. WILKINS, LOW BIDDER ON TOTAL BID AND
OPTIONS, AGAINST AWARD TO JOHNSON STRUCTURES, INC., LOW BIDDER ON BASE
BID AND TWO OPTIONS WITHIN FUND LIMITATION FOR CONSTRUCTION OF AN
IRRIGATION AND DRAINAGE SYSTEM AT SIX RIVERS NATIONAL FOREST, EUREKA,
CALIFORNIA.
UNDER AN INVITATION WHICH PERMITTED THE GOVERNMENT TO ACCEPT ANY ITEM
OR COMBINATION OF ITEMS IN NUMERICAL ORDER WITHIN THE LIMITS OF FUNDS
AVAILABLE, AN AWARD TO THE LOW BIDDER WITHIN THE FUND LIMITATION RATHER
THAN TO THE LOW BIDDER ON THE BASIS OF TOTAL BID INCLUDING ALL OPTIONS
WAS PROPER SINCE IT IS THE AMOUNT OF FUNDS AVAILABLE THAT CONTROLS THE
SELECTION AND SUCH SELECTION IS NOT SUBJECT TO OBJECTION AS BEING A
MANIPULATION OF OPTIONS.
TO MR. SECRETARY:
REFERENCE IS MADE TO A LETTER DATED JANUARY 29, 1971, FILE REFERENCE
6320 CONTRACTING, WITH ENCLOSURE, FORWARDING THE PROTEST OF MR. DAVID R.
WILKINS, EUREKA, CALIFORNIA, AGAINST THE PROPOSED AWARD OF A CONTRACT TO
ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. R5-71-134, ISSUED BY THE
U.S. FOREST SERVICE, BRANCH OF ADMINISTRATIVE SERVICES, SAN FRANCISCO,
CALIFORNIA.
THE INVITATION REQUESTED BIDS FOR CONSTRUCTION OF AN IRRIGATION AND
DRAINAGE SYSTEM AT THE HUMBOLDT NURSERY, SIX RIVERS NATIONAL FOREST,
EUREKA, CALIFORNIA. THE WORK TO BE PERFORMED WAS DIVIDED INTO FIVE
GROUPS OF ITEMS. THE FIRST WAS A BASIC GROUP AND THE OTHER FOUR WERE
OPTIONAL ADDITIVE GROUPS. THE BASE GROUP COVERED THE CONSTRUCTION OF A
COMPLETE DRAINAGE SYSTEM FOR THE ENTIRE PROJECT, BLOCKS 1 THROUGH 8.
OPTION 1 COVERED THE IRRIGATION SYSTEM FOR BLOCKS 1 THROUGH 5 AND
OPTIONS 2,3, AND 4 COVERED THE IRRIGATION SYSTEM FOR BLOCKS 6, 7, AND 8,
RESPECTIVELY. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION THAT
"AWARD MADE WILL BE TO ONE BIDDER" AND THAT "AWARD OF OPTIONS WILL BE
MADE IN NUMERICAL ORDER TO THE EXTENT THAT FUNDS ARE AVAILABLE."
FOUR BIDS WERE OPENED ON DECEMBER 18, 1970. THE BIDS RECEIVED WERE
AS FOLLOWS:
DAVID R. JOHNSON HUMBOLDT PIALORSI
WILKINS STRUCTURES CONSTRUCTION CONSTRUCTION
BASE BID $ 71,900.00 $ 68,687.00 $ 69,928.50 $ 79,369.50
OPTION 1 5,546.00 6,214.00 6,461.30 4,786.00
SUBTOTAL 77,446.00 74,901.00 76,089.80 84,155.50
OPTION 2 6,367.00 7,018.56 7,223.28 5,364.50
SUBTOTAL 83,813.00 81,919.56 83,313.08 89,520.00
OPTION 3 9,481.00 10,332.16 10,040.33 7,868.50
SUBTOTAL 93,294.00 92,251.72 93,353.41 97,388.50
OPTION 4 8,952.00 10,057.16 10,093.13 7,553.50
TOTAL BID
INCLUDING
OPTIONS $102,246.00 $102,308.88 $103,446.54 $104,942.00
THE AMOUNT OF FUNDS AVAILABLE FOR THE PROCUREMENT IS $89,000. THE
CONTRACTING OFFICER PROPOSES TO AWARD A CONTRACT ON THE BASIC GROUP PLUS
OPTIONS 1 AND 2 TO JOHNSON STRUCTURES, INC., AS THE LOWEST BIDDER WITHIN
THE FUND LIMITATION.
DAVID R. WILKINS, THROUGH HIS ATTORNEY, HAS PROTESTED AGAINST THE
PROPOSED AWARD ON THE GROUNDS THAT HE IS ENTITLED TO THE AWARD BECAUSE
THE INVITATION CONTEMPLATED THAT THE CONTRACT WOULD BE MADE FOR THE BASE
ITEM PLUS ALL THE OPTIONS AND HIS TOTAL BID IN THE AMOUNT OF $102,246
WAS THE LOWEST RECEIVED ON THAT BASIS. HOWEVER, THAT CONTENTION
OVERLOOKS THE FACT THAT SECTION 10(C) OF THE INSTRUCTIONS TO BIDDERS
(CONSTRUCTION CONTRACT), STANDARD FORM 22, PROVIDED THAT THE GOVERNMENT
MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED
BY THE INVITATION FOR BIDS; THAT THE INVITATION WAS SPECIFIC THAT THE
AWARD WOULD INCLUDE OPTIONS IN NUMERICAL ORDER WITHIN THE LIMITS OF
AVAILABLE FUNDS; AND THAT THERE IS ONLY $89,000 AVAILABLE FOR THE
CONSTRUCTION. THUS, THE BIDDERS WERE SERVED NOTICE IN THE INVITATION
THAT THE AWARD WOULD NOT INCLUDE ALL THE OPTIONS IF SUFFICIENT FUNDS
WERE NOT AVAILABLE FOR THE PROJECT.
FURTHER, THE FOREGOING PROCEDURE HAS BEEN PROTESTED ON BEHALF OF MR.
WILKINS ON THE BASIS THAT IT PERMITS MANIPULATION OF THE AWARD BY
INCLUDING OR DELETING VARIOUS OPTIONS. HOWEVER, THE INVITATION IS
SPECIFIC AS TO THE ORDER OF OPTIONS UP TO THE LIMIT OF AVAILABLE FUNDS.
THEREFORE, IT IS THE AMOUNT OF FUNDS AVAILABLE THAT IS CONTROLLING THE
SELECTION OF THE SUCCESSFUL BIDDER AND NOT THE MANIPULATION OF OPTIONS.
IN ANY EVENT, EVEN IN A SITUATION WHEN AN ORDER OF PRECEDENCE IN THE
SELECTION OF ADDITIVES WAS NOT PROVIDED IN THE INVITATION, OUR OFFICE
STATED:
" *** SUCH AN ELECTION BY THE CONTRACTING AGENCY IS NOT IMPROPER.
REQUIREMENTS THAT CONTRACTS FOR PUBLIC WORK BE LET TO THE LOWEST BIDDER
ARE NOT VIOLATED WHEN SPECIFICATIONS ARE DRAWN FOR DIFFERENT WORK, BIDS
ARE SOUGHT ON DIFFERENT BASES, AND A CHOICE IS NOT MADE BY THE
CONTRACTING OFFICIALS UNTIL AFTER ALL THE BIDS ARE OPENED. 43 AM. JUR.,
PUBLIC WORKS AND CONTRACTS, SEC 37; 10 MCQUILLIN, MUNICIPAL
CORPORATIONS, SEC 29.55 (3RD ED.); COHEN, PUBLIC CONSTRUCTION CONTRACTS
AND THE LAW, SEC 2.14." B-148333, APRIL 9, 1962. SEE ALSO 45 COMP. GEN.
651 (1966); B-157227, AUGUST 18, 1965; AND B-170168, SEPTEMBER 10,
1970.
FURTHER, IN THAT REGARD, IN DECISION B-146343, NOVEMBER 1, 1961, WE
STATED:
"YOUR ATTORNEY CONTENDS THAT IT IS IMPROPER FOR THE GOVERNMENT TO
RESERVE UNTIL AFTER BID OPENING THE RIGHT TO CHOOSE THE PARTICULAR
COMBINATION OF ITEMS ON WHICH BIDS WILL BE EVALUATED, CLAIMING THAT THE
CONTRACTING OFFICER MIGHT THEREBY, THROUGH A CAREFUL SELECTION OF ITEMS,
CHOOSE ANY CONTRACTOR OTHER THAN THE ONE WHO HAD SUBMITTED THE LOWEST
AGGREGATE BID FOR ALL ITEMS. YOU ARE UNDOUBTEDLY AWARE THAT IT IS NOT
AT ALL UNUSUAL TO SOLICIT BIDS FOR CERTAIN MINIMUM WORK, PLUS OPTIONAL
ADDITIONAL WORK. THE PURPOSE OF ADVERTISING ON THIS BASIS ORDINARILY IS
TO ENABLE AWARD TO BE MADE IN ACCORDANCE WITH THE FUNDS AVAILABLE AND
THE BEST BARGAIN OFFERED BY BIDDERS. THE NET RESULT THEREOF IS TO
REQUIRE BIDDERS TO QUOTE PRICES ON VARIOUS COMBINATIONS OF ITEMS,
SUBJECT TO THE GOVERNMENT'S RIGHT TO CHOOSE ANY PARTICULAR COMBINATION
IT WISHES AS THE BASIS OF AWARD.
" *** EACH BIDDER IS COMPETING AGAINST EACH OTHER BIDDER ON EACH
POSSIBLE COMBINATION OF ITEMS, AND THE COMPARATIVE DESIRABILITY OF
DIFFERENT ITEMS MAY WELL DEPEND ON THE PRICES QUOTED THEREFOR. IT IS
OBVIOUS THAT AWARD COULD NOT BE MADE ON ANY COMBINATION OF ITEMS TO A
BIDDER WHOSE AGGREGATE PRICE FOR THOSE ITEMS WAS NOT LOW, MERELY BECAUSE
HE HAPPENED TO HAVE OFFERED AN OFFSETTING LOWER PRICE FOR WORK WHICH IS
NOT TO BE PERFORMED. *** "
THE PROPOSED CONTRACT AWARD TO JOHNSON STRUCTURES IS CONSISTENT WITH
THE PROVISIONS OF THE INVITATION. THEREFORE, OUR OFFICE HAS NO LEGAL
OBJECTION TO THE AWARD AND THE PROTEST IS ACCORDINGLY DENIED.
B-110298, FEB 11, 1971
COMBAT INFANTRYMAN BADGE PAY
THE COMBAT INFANTRYMAN BADGE PAY BELIEVED DUE THE LATE HUSBAND OF
MRS. SOFIA CORPUZ WAS DISALLOWED IN THE DECISION B-110298, DATED MARCH
1, 1954. THERE IS NO LEGAL BASIS FOR PAYMENT IN THIS CASE.
TO MRS. SOFIA DELA CRUZ VDA DE CORPUZ:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 19, 1970,
CONCERNING COMBAT INFANTRYMAN BADGE PAY BELIEVED DUE IN THE CASE OF YOUR
LATE HUSBAND, BERNARDO E. CORPUZ WHO YOU SAY DIED JANUARY 22, 1970.
OUR RECORDS SHOW THAT MR. CORPUZ FILED A CLAIM FOR COMBAT INFANTRYMAN
BADGE PAY WITH THE DEPARTMENT OF THE ARMY IN NOVEMBER 1949. THE CLAIM
WAS TRANSMITTED TO OUR CLAIMS DIVISION FOR DIRECT SETTLEMENT AND BY
OFFICE SETTLEMENT DATED MAY 17, 1951, THE CLAIM WAS DISALLOWED.
OUR RECORDS SHOW FURTHER THAT THE CLAIM WAS SUBSEQUENTLY RESUBMITTED
BY YOUR HUSBAND AND BY DECISION, B-110298, DATED MARCH 1, 1954, COPY
ENCLOSED, WE SUSTAINED THE DISALLOWANCE STATING THAT A REVIEW OF THE
ARMY RECORDS SHOW THAT YOUR HUSBAND WAS NOT ELIGIBLE FOR COMBAT
INFANTRYMAN BADGE PAY.
WE RECEIVED NO FURTHER CORRESPONDENCE FROM YOUR HUSBAND AND FOR THE
REASONS STATED IN THE DECISION OF MARCH 1, 1954, THERE IS NO LEGAL BASIS
FOR THE PAYMENT OF COMBAT INFANTRYMAN BADGE PAY IN HIS CASE.
B-170854(1), FEB 11, 1971
BID PROTEST - BID RESPONSIVENESS - SAMPLES
DENIAL OF PROTEST OF CROWELL CORPORATION, LOW BIDDER, AGAINST THE
AWARD OF AN ADVERTISED CONTRACT ISSUED BY THE GOVERNMENT PRINTING OFFICE
FOR 10,000 ROLLS OF KRAFT GUMMED PAPER TAPE TO GLAS-KRAFT, INC.
FAILURE TO INCLUDE A SAMPLE OF THE MATERIAL PROPOSED TO BE FURNISHED
WHEN REQUESTED RENDERS THE BID NONRESPONSIVE REQUIRING ITS REJECTION
NOTWITHSTANDING PRIOR SATISFACTORY PERFORMANCE ON OTHER CONTRACTS
INVOLVING THE ITEM IN QUESTION.
TO THE CROWELL CORPORATION:
WE REFER TO YOUR TELEGRAM OF SEPTEMBER 18, 1970, AND SUBSEQUENT
CORRESPONDENCE, PROTESTING AGAINST THE REJECTION OF YOUR BID BY THE
GOVERNMENT PRINTING OFFICE FOR FURNISHING 10,000 ROLLS OF KRAFT GUMMED
PAPER-TAPE, TYPE I - REINFORCED UNDER PURCHASE REQUEST NO. 20390.
THE PURCHASE REQUEST WAS ISSUED ON AUGUST 19, 1970, AND INCLUDED,
AMONG OTHER THINGS, THE FOLLOWING PROVISION:
"A TWO (2) YARD SAMPLE OF THE MATERIAL THE BIDDER PROPOSES TO FURNISH
MUST BE SUBMITTED AS PART OF ANY BID MADE AND MUST BE RECEIVED BY THE
TIME SET FOR OPENING BIDS. SAMPLES WILL BE EVALUATED TO DETERMINE
COMPLIANCE WITH SPECIFICATIONS. ALL SAMPLES ARE TO BE SENT TO:
UNITED STATES GOVERNMENT PRINTING OFFICE
RECEIVING CLERK
35 G STREET, N.W.
WASHINGTON, D.C. 20401"
BIDS WERE RECEIVED FROM FIVE SUPPLIERS AND OPENED ON SEPTEMBER 2,
1970. YOUR CORPORATION SUBMITTED THE LOWEST BID ($1.00 PER ROLL) BUT IT
WAS CONSIDERED NONRESPONSIVE BECAUSE IT WAS NOT ACCOMPANIED BY THE
REQUIRED TWO YARD SAMPLE OF THE MATERIAL PROPOSED TO BE FURNISHED. THE
NEXT TWO LOW BIDDERS' PROPOSALS WERE TIED AT $1.01 PER ROLL. HOWEVER,
ONE OF THESE WAS ALSO CONSIDERED NONRESPONSIVE BECAUSE NO SAMPLE WAS
SUBMITTED. AWARD WAS THEN MADE TO GLAS-KRAFT, INCORPORATED, ON
SEPTEMBER 11, 1970, AT $1.01 PER ROLL LESS PROMPT PAYMENT DISCOUNT OF 2
PERCENT - 20 DAYS.
YOU CONTEND THAT YOUR CORPORATION DID, IN FACT, SUBMIT A SAMPLE ALONG
WITH ITS BID AND YOU SURMISE THAT SINCE THE SAMPLE WAS A GUMMED PRODUCT
IT MAY HAVE BECOME STUCK IN THE ENVELOPE DUE TO HUMIDITY OR ANY OTHER
APPLICABLE REASON. MOREOVER, YOU STATE THAT THE ITEM REQUESTED WAS
SPECIFIED AGAINST FEDERAL SPECIFICATION PPP-T-45A AND YOUR FIRM IS ON
QUALITY ASSURANCE AGAINST THIS SPECIFICATION WITH THE GENERAL SERVICES
ADMINISTRATION. IN FACT, YOU STATE, YOUR FIRM HAS SUPPLIED THIS ITEM TO
THE GOVERNMENT PRINTING OFFICE AND OTHER GOVERNMENT AGENCIES ON SEVERAL
OCCASIONS IN PAST YEARS AND HAVE NEVER HAD A QUALITY REJECTION.
IN HIS REPORT TO US ON YOUR PROTEST, THE PUBLIC PRINTER STATES THAT A
THOROUGH SEARCH PRIOR TO AND AFTER BID OPENING FAILED TO LOCATE ANY
EVIDENCE THAT A SAMPLE WAS SUBMITTED. THE CONTRACTING OFFICER
DETERMINED THAT THE FAILURE TO SUBMIT THE REQUIRED SAMPLE OF MATERIAL
COULD NOT BE WAIVED AS AN INFORMALITY OR MINOR IRREGULARITY. IN THIS
CONNECTION, IT IS REPORTED THAT THE INSERTION OF THE SAMPLE REQUIREMENT
IN THE PURCHASE REQUEST WAS CONSIDERED MANDATORY AND FOR THE PROTECTION
OF THE GOVERNMENT'S INTERESTS SINCE THE REQUIREMENT WENT TO THE
SUBSTANCE OF THE BID AS AFFECTING THE QUALITY OF THE PRODUCT REQUIRED OF
THE BIDDER.
WE HAVE RECOGNIZED THE RIGHT OF CONTRACTING AGENCIES TO REQUIRE THAT
BIDS BE ACCOMPANIED BY CERTAIN KINDS OF INFORMATION WHICH WOULD INCLUDE
SAMPLES. 36 COMP. GEN. 376 (1956). WHEN DESIGNATED INFORMATION IS BY
THE TERMS OF THE INVITATION REQUIRED TO BE SUBMITTED WITH THE BID THE
INFERENCE ARISES THAT THE INFORMATION, IF IT GOES TO THE RESPONSIVENESS
OF THE BID, IS REGARDED AS MATERIAL AND FAILURE TO SUBMIT IT REQUIRES
THE REJECTION OF THE BID. 39 COMP. GEN. 247 (1959). IN THE INSTANT
CASE, THE SAMPLE WAS REQUIRED TO DETERMINE COMPLIANCE WITH APPLICABLE
SPECIFICATIONS; THAT IS, TO DETERMINE RESPONSIVENESS OF THE BID.
ACCORDINGLY, A FAILURE TO SUBMIT THE SAMPLE COULD NOT BE WAIVED AS A
MINOR DEVIATION OR INFORMALITY.
THE FACT THAT THE ITEM REQUESTED WAS SPECIFIED AGAINST FEDERAL
SPECIFICATION PPP-T-45A AND THAT YOUR COMPANY MAY BE ON QUALITY
ASSURANCE AGAINST THIS SPECIFICATION WITH THE GENERAL SERVICES
ADMINISTRATION DOES NOT CHANGE THE RESULT. UNDER THE LAW GOVERNING
FORMALLY ADVERTISED PROCUREMENTS AWARDS MUST BE MADE TO THE LOWEST
RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION FOR BIDS. PAST
SATISFACTORY PERFORMANCE ON OTHER CONTRACTS INVOLVING THE ITEM IN
QUESTION OR THE FACT THAT YOUR COMPANY IS ON QUALITY ASSURANCE AGAINST
THE SPECIFICATION CANNOT BE ACCEPTED AS MEETING THE REQUIREMENT FOR
FURNISHING THE SAMPLE WITH THE BID. CF. B-164575, AUGUST 12, 1968. A
CONTRARY RESULT WOULD COMPROMISE THE INTEGRITY OF THE FORMALLY
ADVERTISED BIDDING PROCEDURE.
ALTHOUGH YOU CONTEND THAT A SAMPLE WAS SUBMITTED WITH YOUR BID, THE
GOVERNMENT PRINTING OFFICE REPORTS THAT A THOROUGH SEARCH BOTH PRIOR TO,
AND AFTER, BID OPENING FAILED TO LOCATE ANY EVIDENCE OF A SAMPLE. WE
HAVE CONSISTENTLY HELD IN CASES INVOLVING DISPUTED FACTS THAT IN THE
ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION
OF THE CORRECTNESS OF THE ADMINISTRATIVE REPORT, WE WILL ACCEPT THE
ADMINISTRATIVE REPORT AS ACCURATELY REFLECTING THE DISPUTED FACTS. 42
COMP. GEN. 124, 134 (1962). WE FEEL THAT ON THE RECORD BEFORE US THE
PRESUMPTION IN FAVOR OF THE ADMINISTRATIVE REPORT HAS NOT BEEN OVERCOME.
IN THESE CIRCUMSTANCES, WE SEE NO BASIS UPON WHICH TO OBJECT WITH THE
ADMINISTRATIVE DECISION TO REJECT YOUR BID AND YOUR PROTEST IS DENIED.
B-170854(2), FEB 11, 1971
CONTRACTS - PROCUREMENTS
ADVISING THAT IN FUTURE PROCUREMENTS WHERE THE PURCHASE REQUEST
STATES THAT A SAMPLE MUST BE SUBMITTED AS PART OF ANY BID PRIOR TO
OPENING A STATEMENT AS TO THE CONSEQUENCES OF FAILURE TO SUBMIT THE
SAMPLE SHOULD BE INCLUDED.
TO MR. SPENCE:
ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE CROWELL
CORPORATION DENYING ITS PROTEST AGAINST REJECTION OF ITS BID FOR
FURNISHING 10,000 ROLLS OF KRAFT GUMMED PAPER-TAPE, TYPE I - REINFORCED,
IN ACCORDANCE WITH FEDERAL SPECIFICATION PPP-T-45A, UNDER PURCHASE
REQUEST NO. 20390.
IT SHOULD BE NOTED THAT WHILE THE PURCHASE REQUEST STATED THAT A
SAMPLE MUST BE SUBMITTED AS PART OF ANY BID PRIOR TO BID OPENING, THERE
WAS NO STATEMENT INCLUDED AS TO THE CONSEQUENCES OF THE FAILURE TO
SUBMIT SAMPLES OR OF THE SUBMISSION OF NONCONFORMING SAMPLES. SEE 37
COMP. GEN. 845 (1958). THIS OMISSION IS BROUGHT TO YOUR ATTENTION IN
THE HOPE THAT FUTURE SAMPLE REQUIREMENT CLAUSES WILL CONTAIN THE
APPROPRIATE PROVISIONS SET FORTH IN 37 COMP. GEN. 845.
WHILE WE DO NOT QUESTION THE INCLUSION OF THE SAMPLE REQUIREMENT IN
THIS CASE FOR THE REASONS SET FORTH IN YOUR LETTER OF JANUARY 13, 1971,
CARE SHOULD BE TAKEN TO INSURE THAT SAMPLES ARE REQUIRED TO BE SUBMITTED
WITH BIDS ONLY WHERE NECESSARY FOR THEIR PROPER EVALUATION. SEE 17
COMP. GEN. 940 (1938); 34 ID. 180 (1954) AND 43 ID. 465, 470 (1963).
B-171558, FEB 11, 1971
BID PROTEST - BID RESPONSIVENESS - NEW PLANT SITE
DENIAL OF PROTEST OF H. I. GARMENT COMPANY, LOW BIDDER, AGAINST THE
AWARD OF AN ADVERTISED CONTRACT FOR COVERALL ASSEMBLY, ANTI-G, CUTAWAY,
MARK 2A (NOMEX) ISSUED BY DEFENSE PERSONNEL SUPPORT CENTER,
PHILADELPHIA, PENN., TO ANY OTHER BIDDER.
AN OFFER TO SUPPLY AN END PRODUCT TO BE PRODUCED AT A PLANT OTHER
THAN THE ONE QUALIFIED (PROTESTANT WHOSE ITEMS WERE LISTED ON THE
QUALIFIED END PRODUCTS LIST MOVED HIS PLANT LOCATION) IS AN OFFER TO
SUPPLY AN UNQUALIFIED PRODUCT AND IS NONRESPONSIVE IN A MATERIAL
RESPECT.
TO H. I. GARMENT COMPANY:
REFERENCE IS MADE TO YOUR PROTEST AGAINST AN AWARD UNDER INVITATION
FOR BIDS (IFB) DSA100-71-B-0534, ISSUED BY THE DEFENSE PERSONNEL SUPPORT
CENTER, PHILADELPHIA, PENNSYLVANIA, TO A BIDDER OTHER THAN THE H. I.
GARMENT COMPANY.
THE IFB WAS ISSUED NOVEMBER 13, 1970, FOR A TOTAL QUANTITY OF 2,682
UNITS OF TWO DIFFERENT TYPES OF COVERALL ASSEMBLY, ANTI-G, CUTAWAY, MARK
2A (NOMEX), SPECIFICATION MIL-C-23955A (AS), DATED OCTOBER 31, 1969.
BOTH ITEMS WERE QUALIFIED END PRODUCTS AND THE SOLICITATION WAS
RESTRICTED TO SIX PROSPECTIVE BIDDERS LISTED ON QUALIFIED PRODUCTS LIST
(QPL) NO. 23955-5 DATED JULY 8, 1970. IFB'S WERE MAILED TO THE FIRMS
INCLUDED THEREIN, THAT TO H. I. GARMENT SENT TO THE LISTED ADDRESS OF
6140 COTTAGE GROVE AVENUE, CHICAGO, ILLINOIS 60637, BEING RETURNED
UNOPENED, STAMPED "MOVED - WITH NO FORWARDING ADDRESS."
FROM THE RECORD IT APPEARS THAT SUBSEQUENT THERETO, YOU TELEPHONED
MR. I. H. KUHLEN, PROCUREMENT AGENT, ON NOVEMBER 23, 1970, INFORMING HIM
THAT YOU HAD LEARNED OF THE INSTANT PROCUREMENT, AND CONSIDERING THAT H.
I. GARMENT HAD BEEN INVOLVED PREVIOUSLY IN SIMILAR PROCUREMENTS,
INQUIRED AS TO WHY YOU HAD NOT RECEIVED AN IFB, AND IF YOU COULD STILL
BID ON THE PRODUCT. IT WAS THEN DISCOVERED THAT H. I. GARMENT HAD MOVED
ITS LOCATION TO 7730 SOUTH CHICAGO AVENUE, CHICAGO, ILLINOIS 60619, AND
WOULD BE SENT AN IFB AT THE NEW ADDRESS. IT WAS ALSO DURING THIS SAME
TELEPHONIC COMMUNICATION THAT YOU WERE ADVISED OF THE POSSIBILITY THAT
THE BID WOULD NOT BE CONSIDERED IN VIEW OF THE NEW PLANT SITE AS
DIFFERING FROM THAT IN THE QPL IF A QUALIFICATION EXTENSION WAS NOT
OBTAINED.
BIDS WERE OPENED ON DECEMBER 4, 1970, AND H. I. GARMENT SUBMITTED THE
LOWEST BID OF THE FOUR BIDS RECEIVED:
1. H. I. GARMENT COMPANY - $54/UNIT - REDUCED BY $2 PER TWX DECEMBER
3, 1970 2% DISCOUNT - 20 DAYS
2. SWITLIK PARACHUTE CO., INC. - $55.50/UNIT - REDUCED BY $1 PER TWX
DECEMBER 4, 1970 1% DISCOUNT - 20 DAYS
3. RUBBER FABRICATORS, INC. - $75/UNIT - REDUCED BY $11.73 PER TWX
DECEMBER 3, 1970 1% DISCOUNT - 30 DAYS
4. LITE INDUSTRIES, INC. - $126.41/UNIT 2% DISCOUNT - 20 DAYS
INCLUDED IN THE IFB AT PAGE 11 WAS CLAUSE B10.83 "NOTICE - QUALIFIED
END PRODUCTS (1969 DEC)" INDICATING ITS APPLICABILITY BY AN "X" BEING
INSERTED IN THE CORRESPONDING BOX, AS DICTATED BY PARAGRAPH 1-1107.2 OF
THE ARMED SERVICES PROCUREMENT REGULATION DATED DECEMBER 31, 1969.
CLAUSE B10.83 PROVIDES IN PERTINENT PART:
"AWARDS FOR ANY END ITEMS WHICH ARE REQUIRED TO BE QUALIFIED PRODUCTS
WILL BE MADE ONLY WHEN SUCH ITEMS HAVE BEEN TESTED AND ARE QUALIFIED FOR
INCLUSION IN QUALIFIED PRODUCTS LIST IDENTIFIED BELOW *** AT THE TIME
SET FOR OPENING OF BIDS, OR THE TIME OF AWARD IN THE CASE OF NEGOTIATED
CONTRACTS.
OFFERORS SHOULD CONTACT THE OFFICE DESIGNATED BELOW TO ARRANGE TO
HAVE THE PRODUCTS WHICH THEY INTEND TO OFFER TESTED FOR QUALIFICATION.
"ANY CHANGE IN LOCATION OR OWNERSHIP OF THE PLANT AT WHICH A
PREVIOUSLY APPROVED PRODUCT IS, OR WAS MANUFACTURED REQUIRED
RE-EVALUATION OF THE QUALIFICATION. SUCH RE-EVALUATION MUST BE
ACCOMPLISHED PRIOR TO THE BID OPENING DATE IN THE CASE OF ADVERTISED
PROCUREMENTS AND PRIOR TO THE DATE OF AWARD IN THE CASE OF NEGOTIATED
PROCUREMENTS. FAILURE OF OFFEROR TO ARRANGE FOR SUCH RE-EVALUATION
SHALL PRECLUDE CONSIDERATION OF THEIR OFFERS.
"QUALIFIED PRODUCTS LIST NUMBER - 23955-5 DTD 8 JULY 1970
QUALIFICATION OFFICE - NAVY AIR DEVELOPMENT - JOHNSVILLE,
WARMINISTER, PA. - (ATTN: AEROSPACE CREM EQUIPMENT DEPT."
THE BID FROM H. I. GARMENT INDICATED THAT THE WORK WAS TO BE
PERFORMED AT A DIFFERENT PLANT THAN THAT LISTED IN THE QPL WITHOUT ANY
EXTENSION OF THE QUALIFICATION TO THE NEW PLANT PRIOR TO BID OPENING.
THE CONTRACTING OFFICER THEREFORE DETERMINED THAT THE BID WAS
NONRESPONSIVE FOR FAILING TO COMPLY WITH CLAUSE B10.83.
OUR OFFICE LIKEWISE HAS HELD THAT AN OFFER TO SUPPLY AN END PRODUCT
TO BE PRODUCED AT A PLANT OTHER THAN THE ONE QUALIFIED IS AN OFFER TO
SUPPLY AN UNQUALIFIED PRODUCT AND IS NONRESPONSIVE IN A MATERIAL
RESPECT. B-167304, AUGUST 27, 1969, AND B-138690, APRIL 6, 1959.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-171751, FEB 11, 1971
CIVILIAN EMPLOYEES - TRAVEL EXPENSES - PRIVATE CONTRIBUTIONS
ADVISING THAT TRAVEL EXPENSES INCURRED BY EMPLOYEES OF THE FEDERAL
POWER COMMISSION IN CONNECTION WITH CONFERENCES SPONSORED BY
ORGANIZATIONS WHICH ARE COVERED BY THE PROVISIONS OF 26 U.S.C. 501(C)3
MAY BE PAID BY THOSE ORGANIZATIONS ACCORDING TO THE PROVISIONS OF 5
U.S.C. 4111.
TO MR. NASSIKAS:
WE REFER TO THE LETTER OF JANUARY 21, 1971, FROM THE EXECUTIVE
DIRECTOR OF THE FEDERAL POWER COMMISSION CONCERNING PAYMENT OF TRAVELING
EXPENSES OF EMPLOYEES OF THE COMMISSION BY PARTIES OUTSIDE THE
GOVERNMENT.
THE LETTER SETS FORTH THE INCREASING ACTIVITY OF THE FEDERAL POWER
COMMISSION IN FURNISHING EXPERTS FROM ITS PROFESSIONAL STAFF FOR
ENVIRONMENTAL CONFERENCES, LAND AND WATER USE SEMINARS, ELECTRIC SYSTEMS
INTERCONNECTION PLANNING SESSIONS, RIVER BASIN DEVELOPMENT MEETINGS AND
THE LIKE HELD WITHIN THE ELECTRIC AND GAS UTILITIES INDUSTRIES. IT IS
STATED THAT SUCH ACTIVITIES ARE INTIMATELY RELATED TO THE PROGRAM
RESPONSIBILITIES OF THE COMMISSION AND STAFF PARTICIPATION THEREIN OFTEN
IS IMPERATIVE. THE LETTER STATES, HOWEVER, THAT THE COMMISSION'S TRAVEL
BUDGET IS NOT ADEQUATE TO FUND THE CONSIDERABLE AMOUNT OF TRAVEL
INVOLVED IN ATTENDING THE FREQUENT MEETINGS.
THE QUESTION PRESENTED IS IN WHAT CIRCUMSTANCES CAN THE TRAVEL COSTS
INVOLVED BY PARTICIPATION OF THE COMMISSION STAFF BE PAID BY THE HOST
ORGANIZATION - NONGOVERNMENTAL ACTIVITIES.
TWO SPECIFIC CASES ARE SET FORTH IN THE ABOVE LETTER, THE FIRST OF
WHICH CONCERNS A CONFERENCE SCHEDULED BY THE UNIVERSITY OF WISCONSIN IN
MILWAUKEE FOR OCTOBER 4-8, 1971, PERTAINING TO PUMPED STORAGE
OPERATIONS. MR. JACK SHEPLEY OF THE COMMISSION'S STAFF WHO IS CITED AS
THIS COUNTRY'S FOREMOST EXPERT ON THE DESIGN OF PUMPED STORAGE SYSTEMS
HAS BEEN ASKED TO SERVE ON THE CONFERENCE ORGANIZING COMMITTEE AND TO
DELIVER A PAPER. IN THE SECOND CASE THE NATIONAL ASSOCIATION OF
REGULATORY UTILITY COMMISSIONERS HAS ASKED THAT THE COMMISSION'S CHIEF
ACCOUNTANT, ARTHUR LITKE, TEACH A WEEK-LONG COURSE ON A UNIFORM SYSTEM
OF ACCOUNTS WHICH THE COMMISSION HAS IMPOSED ON ALL REGULATED UTILITIES.
IN EACH CASE THE HOST ORGANIZATION HAS OFFERED TO PAY ALL OF THE TRAVEL
EXPENSES INCIDENT TO PARTICIPATION BY THE COMMISSION'S EMPLOYEES.
THE PROVISIONS OF 5 U.S.C. 4111 ARE AS FOLLOWS:
"(A) TO THE EXTENT AUTHORIZED BY REGULATION OF THE PRESIDENT,
CONTRIBUTIONS AND AWARDS INCIDENT TO TRAINING IN NON-GOVERNMENT
FACILITIES, AND PAYMENT OF TRAVEL, SUBSISTENCE, AND OTHER EXPENSES
INCIDENT TO ATTENDANCE AT MEETINGS, MAY BE MADE TO AND ACCEPTED BY AN
EMPLOYEE, WITHOUT REGARD TO SECTION 209 OF TITLE 18, IF THE
CONTRIBUTIONS, AWARDS, AND PAYMENTS ARE MADE BY AN ORGANIZATION
DETERMINED BY THE SECRETARY OF THE TREASURY TO BE AN ORGANIZATION
DESCRIBED BY SECTION 501(C)(3) OF TITLE 26 WHICH IS EXEMPT FROM TAXATION
UNDER SECTION 501(A) OF TITLE 26.
"(B) WHEN A CONTRIBUTION, AWARD, OR PAYMENT, IN CASH OR IN KIND, IS
MADE TO AN EMPLOYEE FOR TRAVEL, SUBSISTENCE, OR OTHER EXPENSES UNDER
SUBSECTION (A) OF THIS SECTION, AN APPROPRIATE REDUCTION, UNDER
REGULATIONS OF THE DIRECTOR OF THE BUREAU OF THE BUDGET, SHALL BE MADE
FROM PAYMENT BY THE GOVERNMENT TO THE EMPLOYEE FOR TRAVEL, SUBSISTENCE,
OR OTHER EXPENSES INCIDENT TO TRAINING IN A NON-GOVERNMENT FACILITY OR
TO ATTENDANCE AT A MEETING. PUB. L. 89-554, SEPT. 6, 1966, 80 STAT.
437."
WE INFORMALLY ASCERTAINED THAT BOTH THE UNIVERSITY OF WISCONSIN AND
THE NATIONAL ASSOCIATION OF REGULATORY COMMISSIONERS ARE ORGANIZATIONS
DESCRIBED IN 26 U.S.C. 501(C)(3) AND ACCORDINGLY CONTRIBUTIONS MAY BE
ACCEPTED AS PROVIDED IN 5 U.S.C. 4111. SEE 47 COMP. GEN. 319 (1967).
IN 46 COMP. GEN. 689 (1967) WE DISCUSSED THE SITUATION OF ACCEPTING
REIMBURSEMENT FOR OFFICIAL TRAVEL FROM A PRIVATE SOURCE WHICH IS NOT
WITHIN 5 U.S.C. 4111. IN THOSE CASES WHERE THE CONCERNED GOVERNMENT
AGENCY HAS NO STATUTORY AUTHORITY TO ACCEPT GIFTS, REIMBURSEMENT FROM
PRIVATE SOURCES FOR OFFICIAL TRAVEL EXPENSES WOULD BE UNAUTHORIZED. WE
ARE UNAWARE OF ANY STATUTORY AUTHORITY PROVIDING FOR THE ACCEPTANCE OF
GIFTS BY THE COMMISSION. SEE ALSO IN THIS CONNECTION SECTION 735.202 OF
THE CIVIL SERVICE COMMISSION REGULATIONS, TITLE 5, CODE OF FEDERAL
REGULATIONS. SHOULD SUCH AUTHORITY EXIST OR BE OBTAINED, THE PROCEDURE
ON REIMBURSEMENT FOR TRAVEL EXPENSES DESCRIBED IN THE DECISION CITED
ABOVE (46 COMP. GEN. 689) SHOULD BE FOLLOWED.
B-169547, FEB 10, 1971
BID PREPARATION COSTS
DECISION DENYING REIMBURSEMENT FOR BID PREPARATION COSTS INCIDENT TO
AN IFB ISSUED BY THE DEPARTMENT OF THE NAVY AND CONTRACT AWARD TO ADOLPH
J. BUEHLER, INC.
NOTWITHSTANDING THAT GAO SUSTAINED CLAIMANT'S PROTEST AND HELD THAT
THE CONTRACTING OFFICER ACTED ERRONEOUSLY IN REJECTING ITS BID AS
NONRESPONSIVE, IT HAS BEEN CONSISTENTLY HELD THAT PROSPECTIVE
CONTRACTORS HAVE NO ENFORCEABLE RIGHT TO RECOVER BID PREPARATION COSTS
IN THE EVENT THEY ARE NOT AWARDED THE CONTRACT, B-167733, FEBRUARY 9,
1970, AND B-169425, JUNE 12, 1970. THE COURTS HAVE UPHELD THIS POSITION
UNLESS THE AWARD WAS MADE IN AN ARBITRARY OR CAPRICIOUS MANNER, WHICH IS
NOT HERE THE CASE. THEREFORE, THE REQUEST FOR PAYMENT OF THESE COSTS
MUST BE DENIED.
TO LAWSHE INSTRUMENT COMPANY, INC.:
REFERENCE IS MADE TO YOUR LETTERS DATED SEPTEMBER 24 AND NOVEMBER 10,
1970, IN WHICH YOU REQUEST THAT YOU BE PAID THE AMOUNT OF $3,065.00 BY
THE DEPARTMENT OF THE NAVY AS REIMBURSEMENT FOR YOUR BID PREPARATION
COSTS ON INVITATION FOR BIDS NO. N00600-70-B-0262 ISSUED BY THE NAVY
PURCHASING OFFICE, WASHINGTON, D.C.
THE ABOVE IFB WAS ISSUED ON DECEMBER 29, 1969, AND UPON OPENING,
ALTHOUGH YOUR BID WAS DETERMINED TO BE LOW, YOUR COMPANY WAS CONSIDERED
TO BE NONRESPONSIVE AS A RESULT OF YOUR SUBMISSION OF ADDITIONAL
UNSOLICITED MATERIAL WHICH DESCRIBED ITEMS WHICH DID NOT MEET THE
SPECIFICATIONS. AS A RESULT, THE CONTRACTING OFFICER AWARDED THE
CONTRACT TO ADOLPH J. BUEHLER, INCORPORATED, AS THE LOWEST RESPONSIVE
AND RESPONSIBLE BIDDER, AND YOU PROTESTED TO THIS OFFICE.
IN OUR DECISION OF SEPTEMBER 17, 1970, WE STATED, "WE BELIEVE THE
CONTRACTING OFFICER ACTED ERRONEOUSLY IN REJECTING THE BID BY LAWSHE ON
THAT BASIS." WE FURTHER STATED THAT " *** THE BID (REFERRING TO YOUR
BID) SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE." HOWEVER, SINCE THE
MATERIALS UNDER THE CONTRACT HAD ALREADY BEEN DELIVERED BY ADOLPH J.
BUEHLER, INC., WE DID NOT RECOMMEND CANCELLATION OF THE CONTRACT.
CONCERNING YOUR CLAIM THAT YOUR FIRM IS ENTITLED TO RECOVER ITS
EXPENSES FOR THE PREPARATION OF ITS BID, THIS OFFICE HAS CONSISTENTLY
HELD THAT PROSPECTIVE CONTRACTORS HAVE NO ENFORCEABLE RIGHT TO RECOVER
SUCH EXPENSES IN THE EVENT THEY ARE NOT AWARDED THE CONTRACT. SEE
B-167733 DATED FEBRUARY 9, 1970 AND B-169425 DATED JUNE 12, 1970. THE
COURTS HAVE UPHELD OUR POSITION EXCEPT IN CASES WHERE BIDS WERE NOT
INVITED IN GOOD FAITH, OR IN CASES WHERE THE AWARD WAS MADE IN AN
ARBITRARY AND CAPRICIOUS MANNER WITHOUT REGARD TO STATUTE AND
REGULATION. SEE HEYER PRODUCTS COMPANY, INC., V UNITED STATES, 135 CT.
CL. 63 (1956) AND KECO INDUSTRIES, INC., V UNITED STATES, 428 F2D 1233
(1970). IN THE HEYER PRODUCTS CASE, THE COURT STATED AT P. 71 AS
FOLLOWS:
"IT GOES WITHOUT SAYING THAT NOT EVERY UNSUCCESSFUL BIDDER IS
ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. RECOVERY CAN BE HAD
IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF
THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE
INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD
THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO
LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT.
IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD
FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO
SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS, AND WITH
THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE
OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO
THE GOVERNMENT."
THERE IS NO INDICATION IN THE RECORD THAT BIDS WERE NOT INVITED IN
GOOD FAITH IN THE INSTANT PROCUREMENT, OR THAT THERE WAS ANY ACTION ON
THE PART OF THE CONTRACTING OFFICER WHICH COULD REASONABLY BE CONSIDERED
ARBITRARY OR CAPRICIOUS IN REJECTING YOUR BID AS NONRESPONSIVE.
INSTEAD, IT APPEARS THAT THE DECISION TO REJECT YOUR BID WAS REACHED
ONLY AFTER AN EXTENSIVE ANALYSIS OF THE APPLICABLE LAW, REGULATIONS, AND
DECISIONS OF THIS OFFICE. THE FACT THAT THE LEGAL CONCLUSION REACHED BY
THE CONTRACTING OFFICER FOLLOWING SUCH ANALYSIS WAS NOT CONCURRED IN BY
THIS OFFICE IN OUR SUBSEQUENT CONSIDERATION OF YOUR PROTEST, AFFORDS NO
BASIS FOR CONCLUDING THAT THE CONTRACTING OFFICER ACTED IN BAD FAITH OR
THAT YOU ARE OTHERWISE ENTITLED TO RECOVER YOUR BID PREPARATION COSTS.
ACCORDINGLY, YOUR REQUEST FOR PAYMENT OF SUCH COSTS MUST BE DENIED.
B-169924, B-170426, FEB 10, 1971
CONTRACTS - AWARDS - ERRONEOUS
RECONSIDERATION OF A DECISION, IN LIGHT OF SUBSEQUENTLY AVAILABLE
INFORMATION, WHERE IT WAS HELD THAT THE INCLUSION OF THE LOG FTC IN THE
SOLICITATIONS FOR 30 MODIFICATION KITS FOR GROUND CONTROLLED APPROACH
RADAR AND THE REQUIREMENT THAT IT BE PURCHASED FROM ITT, GILFILLAN, ONE
OF THE TWO BIDDERS, MADE THE PROCUREMENT NON-COMPETITIVE, COMPELS THE
ADDITIONAL CONCLUSION THAT THE AIR FORCE DID NOT HAVE A JUSTIFIABLE
LEGAL BASIS FOR INCLUDING A SOLE-SOURCE ITEM IN THE SOLICITATION
INVOLVED.
IN THE PRIOR DECISION IT WAS NOTED THAT THE LOG FTC REPRESENTED LESS
THAN 20% OF THE TOTAL VALUE UNDER ONE SOLICITATION AND A LITTLE OVER 10%
UNDER ANOTHER. SINCE IT WAS KNOWN FROM A PRE-AWARD SURVEY THAT
COMPETITION WAS PRACTICAL AS TO OVER 80% OF THE DOLLAR VALUE OF ITEMS
BEING PROCURED, FAILURE TO SECURE COMPETITION WAS IN CONTRAVENTION OF
STATUTORY REQUIREMENTS.
ADDITIONAL INFORMATION TO THE EFFECT THAT THE BASELINE MODIFICATION
KIT HAD BEEN PREVIOUSLY PURCHASED WITHOUT THE LOG FTC FURTHER BRINGS
INTO QUESTION THE LEGAL PROPRIETY OF THE AIR FORCE REQUIREMENT THAT THE
LOG FTC'S MUST BE FURNISHED AS A PACKAGE DEAL.
THEREFORE, THE AWARD TO GILFILLAN, WHICH WAS ALLOWED BY THE FIRST
DECISION, SHOULD BE CANCELLED, OR ALTERNATIVELY THE CONTRACT FOR 15
OPTIONAL KITS SHOULD BE AWARDED TO THE SECOND BIDDER.
TO MR. SECRETARY:
PROPOSALS WERE SOLICITED BY YOUR DEPARTMENT IN JANUARY AND FEBRUARY
1970, FOR FURNISHING 30 MODIFICATION KITS (RFP F34601-70-R-2269) AND
SPARE COMPONENTS (RFP F34601-70-R-2286) FOR GROUND CONTROLLED APPROACH
(GCA) RADARS. THE PROPOSALS WERE ISSUED ON A SOLE SOURCE BASIS BECAUSE
ITT GILFILLAN, THE ONLY PRIOR PRODUCER, WAS ASSUMED TO BE THE ONLY
AVAILABLE SUPPLIER.
STERLING LABORATORIES CONTESTED THIS ASSUMPTION AND WAS FURNISHED
COPIES OF THE SOLICITATION PACKAGES. BOTH STERLING AND GILFILLAN
SUBMITTED TIMELY OFFERS ON BOTH PROPOSALS ON THREE SEPARATE OCCASIONS,
THE LAST BEING ON JULY 15, 1970. BOTH SOLICITATIONS INCLUDED ONE
COMPONENT WHICH BOTH GILFILLAN AND YOUR DEPARTMENT CHARACTERIZE AS
PROPRIETARY TO GILFILLAN.
STERLING'S OFFER TO FURNISH A COMPONENT OF ITS OWN MANUFACTURE EQUAL
TO THE GILFILLAN PROPRIETARY COMPONENT (THE LOG FTC) WAS REJECTED BY THE
AIR FORCE. STERLING'S OFFER ON BOTH SOLICITATIONS WAS LOWER THAN
GILFILLAN'S, AND THE PRE-AWARD SURVEY FOUND STERLING TO BE RESPONSIBLE
EXCEPT FOR ITS INABILITY TO SECURE TIMELY DELIVERY FROM GILFILLAN OF THE
PROPRIETARY COMPONENT AND SOME QUESTION WHETHER IT COULD OBTAIN EARLIER
THAN 90-DAY DELIVERY OF ANOTHER COMPONENT FROM A SUPPLIER USED BY BOTH
STERLING AND GILFILLAN.
STERLING PROTESTED TO OUR OFFICE AND ON NOVEMBER 24, 1970, WE ISSUED
A DECISION WHICH HELD THAT THE REQUIREMENT FOR FURNISHING A COMPONENT
MANUFACTURED BY ONE OF THE BIDDERS EFFECTIVELY PRECLUDED COMPETITION
UNLESS THAT COMPONENT WAS MADE AVAILABLE, EITHER BY GILFILLAN OR THE AIR
FORCE, IN TIME TO MEET DELIVERY REQUIREMENTS. WE SAID THAT THIS
APPARENTLY WAS NOT POSSIBLE WITHIN THE TIME AVAILABLE FOR DELIVERY OF
URGENTLY NEEDED ITEMS.
IN VIEW OF THESE CIRCUMSTANCES, WE SAID THERE SHOULD BE A
RE-EVALUATION OF THE NEED FOR THE ITEMS, AND A SOLE SOURCE PROCUREMENT
MADE OF THOSE ITEMS OBTAINABLE ONLY FROM GILFILLAN WITHIN THE TIME THEN
REQUIRED. WE STATED THAT COMPETITION SHOULD BE OBTAINED ON THOSE ITEMS
AS TO WHICH TIME PERMITTED.
OUR DECISION WAS IMPLEMENTED BY YOUR DEPARTMENT BY THE AWARD TO
GILFILLAN ON DECEMBER 3, 1970, OF 100% OF ALL ITEMS COVERED BY BOTH
SOLICITATIONS.
RECONSIDERATION OF OUR DECISION OF NOVEMBER 24, 1970, IN THE LIGHT OF
INFORMATION SINCE MADE KNOWN TO US, COMPELS US TO CONCLUDE THAT THE AIR
FORCE DID NOT HAVE A JUSTIFIABLE LEGAL BASIS FOR INCLUDING A SOLE SOURCE
ITEM IN THE SOLICITATIONS INVOLVED. THIS ITEM, THE LOG FTC, REPRESENTED
LESS THAN 20 PERCENT OF THE TOTAL VALUE OF THE GILFILLAN OFFER UNDER
SOLICITATION -2269 AND A LITTLE OVER 10 PERCENT OF THE VALUE OF
SOLICITATION -2286. UNDER THE LAST PRIOR PROCUREMENT, THE LOG FTC WAS
PURCHASED SEPARATELY. AS WE STATED IN OUR DECISION, THE INCLUSION OF
THE LOG FTC IN THE SOLICITATIONS AND THE REQUIREMENT THAT IT BE
PURCHASED FROM GILFILLAN MADE THE PROCUREMENTS NON-COMPETITIVE. IT WAS
KNOWN, AS THE RESULT OF A PRE-AWARD SURVEY CONDUCTED ON STERLING, THAT
COMPETITION WAS PRACTICAL AS TO OVER 80 PERCENT OF THE DOLLAR VALUE OF
THE ITEMS BEING PROCURED. WE BELIEVE THAT THE FAILURE TO SECURE
COMPETITION THUS KNOWN TO BE PRACTICAL WAS IN CONTRAVENTION OF THE
STATUTORY REQUIREMENT (AND ASPR 3-102(C)) TO OBTAIN THE MAXIMUM
COMPETITION FEASIBLE.
OUR DECISION OF NOVEMBER 24, 1970, CLEARLY STATED THAT THIS
PROCUREMENT WAS NOT COMPETITIVE SO LONG AS STERLING WAS REQUIRED TO
PURCHASE LOG FTC'S FROM GILFILLAN. IN THE LIGHT OF THE ADDITIONAL
KNOWLEDGE OF THE SUBJECT NOW BEFORE US, AND UPON RECONSIDERATION, WE
QUESTION THE LEGAL PROPRIETY OF THE AIR FORCE REQUIREMENT THAT THIS BE
DONE, AND THAT THE LOG FTC'S MUST BE FURNISHED AS A "PACKAGE DEAL" ALONG
WITH THE PARAMETRIC AMPLIFIERS AND THE MOVING TARGET INDICATORS. THESE
LATTER TWO ITEMS, WHICH COMPRISE THE BASELINE MODIFICATION KIT, HAD
PREVIOUSLY BEEN PURCHASED WITHOUT THE LOG FTC. STERLING HAD BEEN GIVEN
AN AFFIRMATIVE RATING BY THE PRE-AWARD SURVEY TEAM AS TO ITS ABILITY TO
FURNISH THE BASELINE KITS WITHIN 90 DAYS AFTER RECEIPT OF ORDER. THE
ACTION TAKEN HAS RESULTED IN THE PERPETUATION OF A SOLE SOURCE FOR THE
EQUIPMENTS AT A CONSIDERABLY HIGHER COST AND PRECLUDED COMPETITION WHICH
DEMONSTRABLY COULD HAVE BEEN OBTAINED FOR OVER 80 PERCENT OF THEIR
VALUE. SUCH COMPETITION WAS REQUIRED BOTH BY THE LAW AND IMPLEMENTING
REGULATIONS. WE MUST, THEREFORE, CONCLUDE THAT THE AWARD OF BOTH
SOLICITATIONS TO GILFILLAN WAS LEGALLY INVALID.
THERE IS, HOWEVER, A POSSIBLE ALTERNATIVE TO CANCELLATION OF
SOLICITATION -2269. THE SOLICITATION INCLUDED AN OPTION FOR 15
ADDITIONAL KITS. IF THESE ARE NOW AWARDED TO STERLING, THE LOW BIDDER,
WE THINK THIS WILL OFFSET, IN PART AT LEAST, THE PRIOR IMPROPER ACTION.
SINCE THE URGENCY ALLEGED IN JUSTIFICATION OF THE AWARD OF THE 30 PRIOR
KITS DOES NOT APPLY IN THE CASE OF THESE 15 KITS, ANY PROBLEMS REGARDING
THE PRODUCTION OF THE INCLUDED LOG FTC'S CAN BE RESOLVED THROUGH NORMAL
NEGOTIATION PROCEDURES GIVING CONSIDERATION TO PRICE AND REASONABLE
DELIVERY TIMES AVAILABLE UNDER THE THREE POSSIBLE WAYS IN WHICH THEY
COULD BE SUPPLIED. WE BELIEVE THIS COURSE OF ACTION SHOULD BE TAKEN AND
SO RECOMMEND.
B-170871, FEB 10, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY ON BASIS THAT CLAIMANT WAS NOT
A MEMBER OF ONE OF THE ORGANIZATIONS LISTED IN THE MUSTERING-OUT PAYMENT
ACT OF 1944, BUT RATHER WAS A MEMBER OF THE PHILIPPINE ARMY.
WHILE NO RIGHT TO MUSTERING-OUT PAY ACCRUED TO CLAIMANT UNDER THE ACT
OF 1944 AND THERE IS NO OTHER PROVISION OF LAW WHICH ENTITLES MEMBERS OF
THE PHILIPPINE ARMY SERVING WITH THE USAFFE TO RECEIVE MUSTERING-OUT PAY
DIRECTLY FROM THE U.S. GOVERNMENT AN AGREEMENT BETWEEN THE U.S. AND THE
REPUBLIC OF THE PHILIPPINES ENTITLED "SETTLEMENT OF VETERANS CLAIMS"
BECAME EFFECTIVE JUNE 29, 1967 AND RECOGNIZED PHILIPPINE GUERRILLAS
DURING WORLD WAR II WHO HAD NOT BEEN PREVIOUSLY PAID. THE CLAIM,
THEREFORE, SHOULD BE SUBMITTED TO THE PHILIPPINE GOVERNMENT FOR
CONSIDERATION.
TO MR. PEDRO D. CARONAN:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 13, 1970,
CONCERNING YOUR CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
YOUR DISCHARGE FROM MILITARY SERVICE PERFORMED DURING WORLD WAR II.
THERE ALSO HAS BEEN RECEIVED YOUR LETTER OF NOVEMBER 30, 1970, RELATING
TO THIS SAME MATTER.
YOUR CLAIM WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
JUNE 19, 1969, AND OCTOBER 6, 1969. IN THOSE LETTERS YOU WERE ADVISED
OF THE PROVISIONS OF THE ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT.
1061, 31 U.S.C. 71A, WHICH BAR CONSIDERATION OF YOUR CLAIM BY THIS
OFFICE DUE TO THE FACT THAT SUCH CLAIM WAS NOT RECEIVED IN OUR OFFICE
WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
THE MUSTERING-OUT PAYMENT ACT OF 1944, 58 STAT. 8, AS AMENDED, 38
U.S.C. 691 ET SEQ. (1946 ED.), AUTHORIZED THE PAYMENT OF MUSTERING-OUT
PAY TO MEMBERS OF THE ARMED FORCES WHO ENGAGED IN ACTIVE SERVICE FOR
VARIOUS PERIODS OF TIME DURING WORLD WAR II. SECTION 6(A) OF THAT ACT
DEFINED THE TERM "MEMBER OF THE ARMED FORCES" TO MEAN -
" *** ANY MEMBER OF THE ARMY OR NAVY OF THE UNITED STATES, THE UNITED
STATES MARINE CORPS, THE UNITED STATES COAST GUARD, OR ANY OF THEIR
RESPECTIVE COMPONENTS *** ."
A LETTER TO YOU DATED NOVEMBER 9, 1970, FROM CHIEF, ORGANIZATION &
PHILIPPINE RECORDS BRANCH, REFERENCE SERVICES DIVISION, U.S. ARMY
ADMINISTRATION CENTER, ST. LOUIS, MISSOURI, INDICATES THAT THE SERVICE
YOU PERFORMED WAS NOT AS A MEMBER OF ONE OF THE ORGANIZATIONS MENTIONED
ABOVE, BUT RATHER AS A MEMBER OF THE PHILIPPINE ARMY. SINCE YOU WERE
NOT A "MEMBER OF THE ARMED FORCES" WITHIN THE MEANING OF THAT TERM AS
USED IN THE ABOVE-QUOTED STATUTORY PROVISIONS, NO RIGHT TO MUSTERING-OUT
PAY ACCRUED TO YOU UNDER THE 1944 ACT. WE ARE NOT AWARE OF ANY OTHER
PROVISIONS OF LAW WHICH ENTITLED MEMBERS OF THE PHILIPPINE ARMY SERVING
WITH THE USAFFE TO RECEIVE MUSTERING-OUT PAY DIRECTLY FROM THE UNITED
STATES GOVERNMENT.
FUNDS FOR PAYMENT OF ITEMS OF PAY AND ALLOWANCES AUTHORIZED FOR
MEMBERS OF THE ORGANIZED MILITARY FORCES OF THE COMMONWEALTH OF THE
PHILIPPINES SERVING IN WORLD WAR II WERE APPROPRIATED BY THE UNITED
STATES GOVERNMENT AND TRANSFERRED TO THE PHILIPPINE GOVERNMENT FOR
PAYMENT. IN THIS CONNECTION AN AGREEMENT BY THE UNITED STATES AND THE
REPUBLIC OF THE PHILIPPINES ENTITLED "SETTLEMENT OF VETERANS CLAIMS"
BECAME EFFECTIVE ON JUNE 29, 1967. THAT AGREEMENT PROVIDED FOR THE
PAYMENT OF FUNDS BY THE UNITED STATES TO THE GOVERNMENT OF THE REPUBLIC
OF THE PHILIPPINES IN FULL SETTLEMENT OF VARIOUS CLAIMS FOR BACK PAY AND
ALLOWANCES ARISING FROM MILITARY SERVICE BY MEMBERS OF THE PHILIPPINE
ARMED FORCES AND RECOGNIZED PHILIPPINE GUERRILLAS DURING WORLD WAR II
WHO HAD NOT BEEN PREVIOUSLY PAID AND WHOSE NAMES APPEARED ON THE UNITED
STATES APPROVED REVISED FINAL ROSTER OF MARCH 1948.
IF YOU BELIEVE YOU HAVE A VALID CLAIM FOR PAYMENT OUT OF THE
ABOVE-MENTIONED FUNDS, SUCH CLAIM SHOULD BE SUBMITTED TO THE PHILIPPINE
GOVERNMENT. THERE IS NO ACTION WE LEGALLY MAY TAKE IN THE MATTER.
B-171118, FEB 10, 1971
MUSTERING-OUT PAY
DENYING CLAIM FOR MUSTERING-OUT PAY TO CEFERINO VILLADOLID RECEIVED
IN GAO MORE THAN 10-YEARS AFTER IT FIRST ACCRUED.
PRESENT CLAIM ACCRUED ON JANUARY 8, 1946, DATE OF DISCHARGE, AND WAS
NOT RECEIVED BY GAO WITHIN THE 10-YEAR TIME PERIOD PRESCRIBED BY THE ACT
OF OCTOBER 9, 1940. IT IS THEREFORE BARRED. FURTHER, GAO CANNOT
IDENTIFY ACT NO. 263, 88TH CONGRESS, DATED JANUARY 9, 1963, APPROVED
SEPTEMBER 30, 1965, TO WHICH CLAIMANT REFERS. IN ACCORDANCE WITH THE
STATUTES PERTAINING TO MUSTERING-OUT PAY CLAIMANT RECEIVED THE MAXIMUM
$300 AT THE TIME OF DISCHARGE AND DUE TO THE PROVISIONS OF THE ACT OF
OCTOBER 9, 1940, NO FURTHER ACTION MAY BE TAKEN.
TO MR. CEFERINO VILLADOLID:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 28, 1970, IN
WHICH YOU REQUEST RECONSIDERATION OF OUR LETTER TO YOU, B-171118, DATED
NOVEMBER 12, 1970, RELATIVE TO YOUR CLAIM FOR ADDITIONAL MUSTERING-OUT
PAY IN THE AMOUNT OF $3,600 INCIDENT TO YOUR DISCHARGE FROM THE
PHILIPPINE SCOUTS ON JANUARY 8, 1946.
OUR LETTER STATED IN PERTINENT PART THAT YOUR CLAIM WAS BARRED FROM
CONSIDERATION BECAUSE IT WAS NOT RECEIVED IN THIS OFFICE WITHIN THE
10-YEAR LIMITATION PERIOD PRESCRIBED IN THE ACT OF OCTOBER 9, 1940, 54
STAT. 1061, 31 U.S.C. 71A. WE STATED FURTHER THAT WE FOUND NO STATUTORY
AUTHORITY FOR THE PAYMENT OF $3,600 AS MUSTERING-OUT PAY TO MEMBERS OF
THE ARMED FORCES, INCLUDING PHILIPPINE SCOUTS.
IN YOUR LETTER, YOU REPEAT THAT YOU WERE PAID $300 MUSTERING-OUT PAY
UPON DISCHARGE. HOWEVER, YOU SAY FURTHER THAT YOU BECAME ENTITLED TO AN
ADDITIONAL $3,600, UNDER THE PROVISIONS OF ACT NO. 263, 88TH CONGRESS,
DATED JANUARY 9, 1963, AND APPROVED ON SEPTEMBER 30, 1965. YOU
THEREFORE CONTEND THAT YOUR RIGHT ACCRUED ON JANUARY 9, 1963, AND THE
10-YEAR PERIOD IN WHICH TO FILE A CLAIM UNDER THAT ACT HAS NOT YET
TERMINATED.
WE CANNOT IDENTIFY THE LAW TO WHICH YOU REFER. AS STATED PREVIOUSLY,
WE FIND NO STATUTORY PROVISION FOR THE PAYMENT OF $3,600 AS
MUSTERING-OUT PAY TO ANY MEMBER OF THE UNIFORMED SERVICES, INCLUDING
PHILIPPINE SCOUTS. NO PUBLIC LAW ENACTED BY THE FIRST SESSION OF THE
88TH CONGRESS (WHICH CONVENED IN JANUARY 1963) WAS DATED PRIOR TO MARCH
6, 1963, AND PUBLIC LAW 263 OF THAT CONGRESS WAS APPROVED JANUARY 31,
1964, AND DID NOT PERTAIN TO THAT SUBJECT. ALSO, OF THE THREE ACTS
APPROVED ON SEPTEMBER 30, 1965, DURING THE FIRST SESSION OF THE 89TH
CONGRESS, NONE REFERRED TO MUSTERING-OUT PAY.
IN ACCORDANCE WITH THE STATUTES PERTAINING TO MUSTERING-OUT-PAY, THE
PAYMENT OF $300 WHICH YOU RECEIVED AT THE TIME OF YOUR DISCHARGE, WAS
THE MAXIMUM AMOUNT AUTHORIZED FOR MEMBERS OF THE AMERICAN ARMED FORCES.
HOWEVER THAT MAY BE, SINCE YOUR CLAIM WAS RECEIVED IN THIS OFFICE MORE
THAN 10 YEARS FROM THE TIME IT FIRST ACCRUED, IT IS BARRED FROM
CONSIDERATION BY THE PROVISIONS OF THE ACT OF OCTOBER 9, 1940, AND THERE
IS NO FURTHER ACTION WHICH WE MAY TAKE IN THE MATTER.
B-171338, FEB 10, 1971
CHANGE OF STATION - REAL ESTATE EXPENSES - LEGAL EXPENSES
DECISION HOLDING THAT ADOLPH O. BERGER IS ENTITLED TO RETAIN $663
PREVIOUSLY PAID HIM IN REIMBURSEMENT OF REAL ESTATE EXPENSES INCIDENT TO
HIS CHANGE OF OFFICIAL STATION FROM CHICAGO TO SAN FRANCISCO.
COPIES OF BILLS FURNISHED BY THE CHICAGO TITLE AND TRUST COMPANY SHOW
THAT THE ITEM OF $313 COVERED SEVERAL PURPOSES THAT THE SELLER
CUSTOMARILY FURNISHED IN THE CHICAGO AREA. FURTHER, THE STATEMENT
FURNISHED BY THE ATTORNEY RELATIVE TO LEGAL SERVICES PLUS MR. BERGER'S
FURTHER EXPLANATION WARRANTS THE CONCLUSION THAT THE SERVICES AS
ITEMIZED WERE OF THE TYPE PROPERLY REIMBURSABLE UNDER SECTION 4.2C, BOB
CIR. NO. A-56.
TO MR. VLADIMIR OLEYNIK:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 18, 1970,
REQUESTING A DECISION AS TO WHETHER OR NOT MR. ADOLPH O. BERGER IS
ENTITLED TO RETAIN THE $663 PREVIOUSLY PAID TO HIM IN REIMBURSEMENT OF
CERTAIN REAL ESTATE EXPENSES INCURRED IN THE SALE OF A HOME INCIDENT TO
HIS CHANGE OF OFFICIAL STATION FROM CHICAGO, ILLINOIS, TO SAN FRANCISCO,
CALIFORNIA.
BY INFORMAL INQUIRY NO. 68-5, OCTOBER 16, 1968, OUR CIVIL DIVISION
QUESTIONED TWO ITEMS OF REAL ESTATE EXPENSES ALLOWED ON MR. BERGER'S
TRAVEL REIMBURSEMENT VOUCHER. THE ITEM OF $313 REPRESENTING CHICAGO
TITLE AND TRUST COMPANY CHARGES WAS NOT SUPPORTED BY A STATEMENT
ITEMIZING THE CHARGES. THE ITEM OF $350 REPRESENTING LEGAL EXPENSES IN
CONNECTION WITH THE SALE OF THE HOUSE WAS QUESTIONED BECAUSE THE
STATEMENT FURNISHED DID NOT CLEARLY INDICATE THAT THE EXPENSES WERE
PROPERLY REIMBURSABLE UNDER SUBSECTION 4.2C OF BUREAU OF THE BUDGET
CIRCULAR NO. A-56.
THERE HAVE BEEN FURNISHED COPIES OF BILLS OF THE CHICAGO TITLE AND
TRUST COMPANY SHOWING THAT THE ITEM OF $313 IS THE AGGREGATE OF THE COST
OF REISSUING TITLE INSURANCE AND INCREASING THE INSURANCE TO THE SALE
AMOUNT, $267, RECORDING CHARGE FOR RELEASE DEED, $4, AND ONE-HALF OF THE
TOTAL ESCROW FEE, $42. THE COMPANY INDICATES THAT IT IS CUSTOMARY IN
THE CHICAGO AREA FOR THE SELLER TO FURNISH SUCH EVIDENCE OF TITLE TO THE
PURCHASER. IT ALSO IS STATED THAT THE ESCROW FEE REPRESENTS THE SELLER'S
SHARE OF HANDLING THE DEAL IN THE COMPANY'S ESCROW DEPARTMENT AND IS
AGREED UPON BETWEEN THE PARTIES.
WE HAVE HELD THAT IF IT IS THE CUSTOM OF AN AREA FOR THE SELLER TO
PURCHASE A TITLE INSURANCE POLICY FOR THE BENEFIT OF THE BUYER IN LIEU
OF SHOWING MARKETABLE TITLE BY A TITLE SEARCH, AN ABSTRACT OF TITLE OR A
LEGAL OPINION, THE COST OF SUCH INSURANCE IS REIMBURSABLE. SEE 46 COMP.
GEN. 884 (1967) AND B-161459, OCTOBER 21, 1970, COPIES HEREWITH. WE
HAVE ALSO HELD THAT ONE-HALF OF THE ESCROW FEE IS REIMBURSABLE WHEN IT
IS COMMON PRACTICE IN THE AREA FOR THE BUYER AND THE SELLER EACH TO PAY
ONE-HALF OF THE ESCROW FEE. SEE B-162511, OCTOBER 13, 1967, COPY
HEREWITH.
THE STATEMENT FURNISHED BY THE ATTORNEY RELATIVE TO LEGAL SERVICES
RENDERED IN CONNECTION WITH THE SALE OF THE HOUSE IS ITEMIZED AS TO DAYS
AND TYPE OF SERVICE BUT THE FEE IS CHARGED ON THE AGGREGATE NUMBER OF
HOURS INVOLVED AND THE AMOUNT FOR EACH SERVICE IS NOT ALLOCATED.
HOWEVER, EXCEPT FOR THE SERVICES SHOWN FOR MAY 1967, DESIGNATED AS
"ADVICE AS TO LEGAL ASPECTS OF EXCLUSIVE LISTING WITH REAL ESTATE
AGENTS" THE SERVICES SEEM TO BE OF THE TYPE CONNECTED WITH THE
PREPARATION OF THE TRANSFER PAPERS. MR. BERGER STATES THAT AT THE TIME
HE TALKED WITH HIS ATTORNEY ABOUT THE BROKER, HE HAD ALREADY SELECTED A
BROKER AND IT THUS APPEARS THAT THE CONVERSATIONS WERE FOR THE PURPOSE
OF FAMILIARIZING THE ATTORNEY WITH THE ASPECTS OF THE SALE. MR.
BERGER'S FURTHER EXPLANATION WARRANTS THE CONCLUSION THAT THE ATTORNEY'S
SERVICES AS ITEMIZED WERE OF THE TYPE PROPERLY REIMBURSABLE UNDER
SUBSECTION 4.2C. SEE B-162227, MARCH 31, 1970, COPY HEREWITH, AND
B-160799, OCTOBER 15, 1970, TO YOU.
IN VIEW OF THE FOREGOING NO FURTHER QUESTION WILL BE RAISED WITH
RESPECT TO THESE REAL ESTATE EXPENSES AND MR. BERGER MAY RETAIN THE
AMOUNT INVOLVED.
B-171750, FEB 10, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY BASED ON 10-YEAR TIME
LIMITATION PRESCRIBED BY THE ACT OF OCTOBER 9, 1940.
ANY RIGHT WHICH CLAIMANT MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED
UNDER THE MUSTERING-OUT PAYMENT ACT OF 1944, AS AMENDED 38 U.S.C. 691 ET
SEQ. (1946 ED.) WHICH WAS SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR
LIMITATION PERIOD PRESCRIBED BY THE ACT OF OCTOBER 9, 1940.
THERE IS NO OTHER STATUTORY AUTHORITY AUTHORIZING PAYMENT OF CLAIM
AND NO FURTHER ACTION WHICH GAO MAY LEGALLY TAKE IN THIS MATTER.
TO MR. VICENTE TRILLANES:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 19, 1970,
ADDRESSED TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS,
INDIANA, WHICH WAS FORWARDED TO THIS OFFICE FOR REPLY, CONCERNING YOUR
CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF $3,600 BELIEVED DUE
INCIDENT TO YOUR MILITARY SERVICE WITH THE PHILIPPINE SCOUTS FROM AUGUST
28, 1946, TO MAY 10, 1949.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
MAY 19, 1966, AND JANUARY 30, 1968, IN WHICH YOU WERE ADVISED THAT
CONSIDERATION OF YOUR CLAIM FOR SUCH PAY WAS BARRED BY THE ACT OF
OCTOBER 9, 1940, 54 STAT. 1061, SINCE IT WAS NOT RECEIVED IN OUR OFFICE
WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
YOU NOW CLAIM MUSTERING-OUT PAY "AS AUTHORIZED UNDER THE PROVISIONS
OF ACT NO. 263, 88TH CONGRESS DATED JANUARY 9, 1963 WHICH PASSED AND
APPROVED ON SEPTEMBER 30, 1968." NEITHER PUBLIC LAW 88-263 (WHICH WAS
APPROVED JANUARY 31, 1964, AND IN NO WAY RELATES TO MUSTERING-OUT PAY),
NOR ANY OTHER LAW OF WHICH WE ARE AWARE, AUTHORIZES THE PAYMENT OF YOUR
CLAIM. ANY RIGHT YOU MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER
THE MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS AMENDED, 38
U.S.C. 691 ET SEQ. (1946 ED.), AND IMPLEMENTING REGULATIONS CONTAINED IN
PARAGRAPHS 313-322 OF TECHNICAL MANUAL 14-502. HOWEVER, ALL CLAIMS FOR
MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW AND REGULATIONS ARE
SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION PERIOD PRESCRIBED
BY THE 1940 ACT.
BECAUSE YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE ON MAY 6, 1966,
MORE THAN 10 YEARS AFTER THE DATE OF YOUR DISCHARGE ON MAY 10, 1949,
THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY TAKE ON SUCH MATTER.
B-171773, FEB 10, 1971
MUSTERING-OUT PAY
CLAIM FOR MUSTERING-OUT PAY RECEIVED MORE THAN 16 YEARS AFTER DATE OF
CLAIMANT'S DISCHARGE IS BARRED BY THE ACT OF OCTOBER 9, 1940, AND THERE
IS NO OTHER LAW WHICH AUTHORIZES PAYMENT OF A CLAIM RECEIVED AFTER THE
10-YEAR LIMITATION PERIOD.
TO MR. JULIAN A. DE JOSE:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 16, 1970,
ADDRESSED TO THE UNITED STATES ARMY FINANCE CENTER, INDIANAPOLIS,
INDIANA, WHICH WAS FORWARDED TO OUR OFFICE FOR REPLY, CONCERNING YOUR
CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO YOUR DISCHARGE FROM
THE MILITARY SERVICE ON JANUARY 14, 1949, AS A PHILIPPINE SCOUT.
THE MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
MAY 26 AND JULY 29, 1965, IN WHICH YOU WERE ADVISED THAT CONSIDERATION
OF YOUR CLAIM FOR SUCH PAY WAS BARRED BY THE ACT OF OCTOBER 9, 1940, CH
788, 54 STAT. 1061, 31 U.S.C. 71A, SINCE IT WAS NOT RECEIVED IN OUR
OFFICE WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOU ARE ENTITLED TO
MUSTERING-OUT PAY "UNDER THE PROVISIONS OF ACT NO. 263 OF THE 88TH
CONGRESS, DATED JANUARY 9, 1963, APPROVED SEPTEMBER 30, 1965," YOU ARE
ADVISED THAT NEITHER PUBLIC LAW 88-263 (WHICH WAS APPROVED ON JANUARY
31, 1964, AND HAD NOTHING TO DO WITH MUSTERING-OUT PAY), NOR ANY OTHER
LAW OF WHICH WE ARE AWARE AUTHORIZES THE PAYMENT OF YOUR CLAIM. ANY
RIGHT YOU MAY HAVE HAD TO MUSTERING-OUT PAY ACCRUED UNDER THE
MUSTERING-OUT PAYMENT ACT OF 1944, CH 9, 58 STAT. 8, AS AMENDED, 38
U.S.C. 691 ET SEQ. (1946 ED.), AND IMPLEMENTING REGULATIONS CONTAINED IN
PARAGRAPHS 313-322 OF T.M. 14-502. HOWEVER, ALL CLAIMS FOR MUSTERING-OUT
PAY UNDER THOSE PROVISIONS OF LAW AND REGULATIONS ARE SUBJECT TO THE BAR
IMPOSED BY THE 10-YEAR LIMITATION PERIOD PRESCRIBED BY THE 1940 ACT.
IN VIEW OF THE FACT THAT YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE
ON MAY 21, 1965, MORE THAN 16 YEARS AFTER THE DATE OF YOUR DISCHARGE ON
JANUARY 14, 1949, THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY
TAKE ON YOUR CLAIM.
B-171774, FEB 10, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY RECEIVED MORE THAN 10-YEARS
AFTER THE CLAIMANT'S DISCHARGE DUE TO BAR IMPOSED BY THE ACT OF OCTOBER
9, 1940.
NEITHER PUBLIC LAW 88-263 NOR ANY OTHER LAW OF WHICH GAO IS AWARE
AUTHORIZES THE PAYMENT OF A CLAIM FOR $300 MUSTERING-OUT PAY RECEIVED BY
GAO AFTER THE EXPIRATION OF THE 10-YEAR TIME PERIOD PRESCRIBED BY THE
ACT OF OCTOBER 9, 1940, THEREFORE, THERE IS NO FURTHER ACTION GAO MAY
LEGALLY TAKE IN THIS MATTER.
TO MR. RUBEN C. GATUS:
FURTHER REFERENCE IS MADE TO YOUR LETTERS OF MAY 9 AND DECEMBER 14,
1970, ADDRESSED TO THE OLD PAY CLAIMS DIVISION, DEPARTMENT OF THE ARMY,
GAO, INDIANAPOLIS, INDIANA, CONCERNING YOUR CLAIM FOR MUSTERING-OUT PAY
IN THE AMOUNT OF $300 BELIEVED DUE INCIDENT TO YOUR MILITARY SERVICE IN
WORLD WAR II.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
APRIL 1, 1965, AND JUNE 1, 1965, IN WHICH YOU WERE ADVISED THAT YOUR
CLAIM FOR SUCH PAY WAS BARRED BY THE ACT OF OCTOBER 9, 1940, 54 STAT.
1061, SINCE IT WAS NOT RECEIVED IN OUR OFFICE WITHIN THE 10-YEAR
LIMITATION PRESCRIBED IN THAT ACT.
CONCERNING YOUR BELIEF THAT YOU ARE ENTITLED TO MUSTERING-OUT PAY
UNDER THE PROVISIONS OF ACT NO. 263 OF THE 88TH CONGRESS, WHICH YOU SAY
WAS APPROVED ON SEPTEMBER 30, 1965, YOU ARE ADVISED THAT NEITHER PUBLIC
LAW 88-263 (WHICH WAS APPROVED JANUARY 31, 1964, AND HAD NOTHING TO DO
WITH MUSTERING-OUT PAY) NOR ANY OTHER LAW OF WHICH WE ARE AWARE,
AUTHORIZES THE PAYMENT OF YOUR CLAIM.
ANY RIGHT YOU MAY HAVE HAD TO MUSTERING-OUT PAY FROM THE UNITED
STATES ACCRUED UNDER THE MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58
STAT. 8, AS AMENDED, 38 U.S.C. 691 ET SEQ. (1946 ED.), AND IMPLEMENTING
REGULATIONS CONTAINED IN PARAGRAPH 313-322 OF TECHNICAL MANUAL 14-502.
HOWEVER, ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THOSE PROVISIONS AND
REGULATIONS ARE SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION
PERIOD PRESCRIBED BY THE 1940 ACT.
IN VIEW OF THE FACT THAT YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE
ON MARCH 18, 1965, MORE THAN 10 YEARS AFTER YOUR DISCHARGE THERE IS NO
FURTHER ACTION THIS OFFICE MAY LEGALLY TAKE ON SUCH CLAIM.
B-171778, FEB 10, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY ON BASIS THAT CLAIM IS BARRED
BY 10-YEAR LIMITATION PERIOD PRESCRIBED BY THE ACT OF OCTOBER 9, 1940.
NOTWITHSTANDING THAT CLAIMANT WAS UNAWARE OF THE LAW PRESCRIBING A
10-YEAR LIMITATION PERIOD, THERE IS NO AUTHORITY BY WHICH GAO MAY WAIVE
ANY OF THE PROVISIONS OF THE BARRING ACT AND THE CLAIM MUST BE DENIED.
TO MR. ANTONIO H. GIMEDA:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 22, 1970,
ADDRESSED TO THE PRESIDENT OF THE UNITED STATES, WHICH WAS FORWARDED TO
OUR OFFICE FOR REPLY CONCERNING YOUR CLAIM FOR MUSTERING-OUT PAY
BELIEVED DUE INCIDENT TO YOUR DISCHARGE FROM MILITARY SERVICE IN 1946.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
OCTOBER 25, 1968, AND FEBRUARY 19, 1969, IN WHICH YOU WERE ADVISED THAT
CONSIDERATION OF YOUR CLAIM FOR SUCH PAY WAS BARRED BY THE ACT OF
OCTOBER 9, 1940, CH. 788, 54 STAT. 1061, 31 U.S.C. 71A. THAT ACT
PROVIDES IN PERTINENT PART:
"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).
YOU CONTEND THAT YOU WERE UNAWARE OF THE LAW BECAUSE YOU HAVE ALWAYS
LIVED IN A REMOTE BARRIO OF THE PHILIPPINES AND FOR THIS REASON YOU
REQUEST THAT ADDITIONAL CONSIDERATION BE GIVEN YOUR CLAIM.
CONSIDERATION BY THIS OFFICE OF CLAIMS FOR MUSTERING-OUT PAY ARE
GOVERNED BY THE 1940 BARRING ACT. SINCE THERE IS NO AUTHORITY BY WHICH
THIS OFFICE MAY WAIVE ANY OF THE PROVISIONS OF THE BARRING ACT OR MAKE
ANY EXCEPTION TO THE TIME LIMITATION IMPOSED, THE FACT THAT YOU DID NOT
KNOW OF THE PROVISIONS OF THAT ACT DOES NOT PROVIDE A LEGAL BASIS UPON
WHICH THIS OFFICE MAY CONSIDER YOUR CLAIM.
IF YOU HAD A VALID CLAIM FOR MUSTERING-OUT PAY, SUCH CLAIM WOULD HAVE
ACCRUED NO LATER THAN YOUR DATE OF DISCHARGE, WHICH YOU INDICATE TO BE
MARCH 5, 1946. THEREFORE, IN ORDER FOR YOUR CLAIM FOR SUCH PAY TO BE
CONSIDERED ON ITS MERITS IT WAS NECESSARY FOR IT TO HAVE BEEN RECEIVED
HERE ON OR BEFORE MARCH 5, 1956. OUR FILE SHOWS THAT YOUR CLAIM FOR
MUSTERING-OUT PAY WAS FIRST RECEIVED HERE ON SEPTEMBER 20, 1968, MORE
THAN 22 YEARS AFTER THE DATE OF YOUR DISCHARGE.
ACCORDINGLY, SINCE CONSIDERATION OF YOUR CLAIM IS SPECIFICALLY
PROHIBITED BY THE BARRING ACT, THERE IS NO ACTION WE MAY LEGALLY TAKE IN
THE MATTER.
B-170610, FEB 9, 1971
BID PROTEST - TRANSPORTATION COSTS - COMPUTATION
REAFFIRMING PRIOR DECISION DENYING PROTEST OF ASEA, INC., AGAINST THE
AWARD OF A CONTRACT FOR TRANSFORMERS AND RELATED ITEMS TO BE INSTALLED
AT THE GRAND COULEE THIRD POWERPLANT, COULEE DAM, WASHINGTON, TO BROWN
BOVERI CORPORATION.
WHILE ADDING A $50,000 ESTIMATE FOR TRANSPORTATION COSTS TO
PROTESTANTS BID, F.O.B. ODAIR, WASHINGTON, TO INSURE FAIR COMPARISON
WITH BROWN'S BID, F.O.B. JOBSITE, MAY BE QUESTIONED BECAUSE FAILURE TO
REQUEST GUARANTEED TRANSPORTATION DATA DILUTED THE ACCURACY OF LOWEST
ESTIMATED COST, UPON RECOMPUTATION ASEA IS NOT THE LOW BIDDER EVEN UNDER
THE MOST CONSERVATIVE ESTIMATE; THEREFORE, THE SOLICITATION DESPITE ITS
INADEQUACIES NEED NOT BE RESCINDED. FURTHERMORE, ASEA'S INTERPRETATION
OF THE TERM "COMMERCIAL FREIGHT RATES" DENOTING ONLY 16 CENTS PER
100-POUND RATE TO BE CONSIDERED IN THE BID EVALUATION RATHER THAN THE
ESTIMATED FULL TRANSPORTATION COST WOULD BE WHOLLY INCONSISTENT WITH ONE
OF THE MAJOR PURPOSES OF PARAGRAPH B-4(A)3 OF THE SOLICITATION - NAMELY
TO AFFORD A BASIS FOR COMPARISON OF BIDS ON AN F.O.B. ODAIR BASIS WITH
BIDS ON AN F.O.B. JOBSITE BASIS.
TO MR. SECRETARY:
WE REFER TO A LETTER DATED DECEMBER 23, 1970, FROM THE DIRECTOR OF
SURVEY AND REVIEW, RELATIVE TO THE REQUEST BY TELEGRAM OF OCTOBER 28,
1970, AND LETTER, WITH ENCLOSURES, DATED NOVEMBER 4, 1970, FROM HALE,
RUSSELL & STENTZEL, COUNSEL FOR ASEA, INC., FOR RECONSIDERATION OF OUR
DECISION B-170610, OCTOBER 9, 1970. ON THE BASIS OF OUR DECISION, AWARD
OF A CONTRACT WAS MADE TO BROWN BOVERI CORPORATION (BBC). BY LETTER
DATED NOVEMBER 17, 1970, LEIBMAN, WILLIAMS, BENNETT, BAIRD AND MINOW,
COUNSEL FOR BBC, HAS AT OUR REQUEST RESPONDED TO THE CONTENTIONS
ADVANCED BY ASEA'S COUNSEL.
THE FACTS NECESSARY TO OUR CONSIDERATION OF THE REQUEST ARE RESTATED
FROM OUR DECISION OF OCTOBER 9, 1970, AND THE RECORD BEFORE OUR OFFICE
AS FOLLOWS.
OUR INITIAL CONSIDERATION OF THIS PROCUREMENT WAS INITIATED BY LETTER
DATED AUGUST 11, 1970, FROM THE CHIEF ENGINEER (CONTRACTING OFFICER),
BUREAU OF RECLAMATION, DENVER, COLORADO, FORWARDING THE BIDS OF ASEA AND
BBC, WHICH WERE RECEIVED IN RESPONSE TO SOLICITATION NO. DS-6812 FOR
TRANSFORMERS AND RELATED ITEMS TO BE INSTALLED AT THE GRAND COULEE THIRD
POWERPLANT, COULEE DAM, WASHINGTON. SCHEDULE NO. 1 OF SOLICITATION NO.
DS-6812 REQUESTED BIDS FOR FURNISHING 10 POWER TRANSFORMERS AND SPARE
PARTS, EITHER ON DELIVERY F.O.B. RAILROAD CARS AT ODAIR, WASHINGTON, OR
DELIVERY F.O.B. TRUCKS AT THE SITE OF THE THIRD POWERPLANT, GRAND
COULEE DAM, WASHINGTON. ASEA SUBMITTED ITS BID OF $2,550,250, F.O.B.
ODAIR, WASHINGTON; AND BBC BID $2,615,680, F.O.B. JOBSITE. THERE WERE
ADDED TO THE PRICES OF THE TRANSFORMERS CERTAIN DIFFERENTIALS AND LOSS
FACTORS, NAMED IN PARAGRAPH B-4A(4) AND (5) AND PARAGRAPH B-4B.
SCHEDULE NO. 2 OF THE SOLICITATION CALLED FOR FURNISHING 19 LIGHTNING
ARRESTERS, WITH DELIVERY F.O.B. RAILROAD CARS AT ODAIR, WASHINGTON, OR
F.O.B. TRUCKS AT THE POWERPLANT. ASEA DID NOT BID ON THIS SCHEDULE ITEM
AND BBC BID $124,790, F.O.B. TRUCKS AT THE POWERPLANT.
TO EQUALIZE THE BIDS OF ASEA AND BBC ON THE BASIS OF SCHEDULES NOS.
1 AND 2 COMBINED, THE CONTRACTING OFFICER CONSIDERED THE BID OF GENERAL
ELECTRIC COMPANY ON SCHEDULE NO. 2 OF $123,690, F.O.B. JOBSITE, IN
CONJUNCTION WITH ASEA'S BID ON SCHEDULE NO. 1 WHICH WAS BASED ON F.O.B.
ODAIR, WASHINGTON. THE CONTRACTING OFFICER THEN MADE AN EVALUATION OF
THE COMBINED BIDS OF ASEA AND GENERAL ELECTRIC ON SCHEDULES NOS. 1 AND
2, RESPECTIVELY, AGAINST THE BBC COMBINED BIDS ON BOTH SCHEDULES, BUT
WITHOUT REGARD TO TRANSPORTATION COSTS. THE BASIC QUESTION PRESENTED
THEN AND NOW IS WHAT ARE THE PROPER TRANSPORTATION COSTS TO BE USED IN
EVALUATING ASEA'S BID ON SCHEDULE NO. 1.
THE POWER TRANSFORMERS TO BE FURNISHED ARE VERY LARGE AND HEAVY
ARTICLES, AS IS EVIDENCED BY ASEA'S GUARANTEED SHIPPING WEIGHT OF
275,000 POUNDS EACH. EQUIPMENT OF THIS SIZE AND WEIGHT TO BE MOVED OVER
STATE ROADS AND HIGHWAYS REQUIRES THE SERVICES OF HEAVY HAULERS
ESPECIALLY EQUIPPED AND EXPERIENCED TO HANDLE SUCH ARTICLES. THE TOTAL
FREIGHT CHARGES FOR SUCH TRANSPORTATION ASSESSABLE BY THE HEAVY HAULERS
ARE COMPUTED ON THE BASIS OF A SINGLE LINE-HAUL RATE, PLUS VARIOUS
INCIDENTAL AND ACCESSORIAL CHARGES. FOR EXAMPLE, IN THE PRESENT CASE,
WILLAMETTE TARIFF BUREAU, INC., FREIGHT TARIFF NO. 5, MP-I.C.C. NO. 2,
NAMES A LINE-HAUL OR MOTOR CARRIER DISTANCE COMMODITY RATE FOR THE
TRANSPORTATION OF ELECTRICAL EQUIPMENT, INCLUDING TRANSFORMERS, OF 16
CENTS PER 100 POUNDS, TRUCKLOAD MINIMUM WEIGHT 64,000 POUNDS, FOR A
DISTANCE OF 31 MILES (ODAIR, WASHINGTON, TO GRAND COULEE DAM
POWERPLANT). THIS RATE, HOWEVER, IS SUBJECT TO CERTAIN INCREASES. NOTE
2, ITEM 2705 OF THE TARIFF, PROVIDES THAT IF THE EQUIPMENT EXCEEDS 12
FEET, BUT NOT MORE THAN 14 FEET, IN HEIGHT, THE 16-CENT RATE IS
INCREASED BY 10 PERCENT; AND IF THE EQUIPMENT EXCEEDS 14 FEET IN
HEIGHT, THE 16-CENT RATE IS INCREASED BY 25 PERCENT. IN ADDITION, THERE
ARE CHARGES FOR INCIDENTAL AND ACCESSORIAL SERVICES, SUCH AS FOR EMPTY
MILEAGE (THE DISTANCE THE UNLOADED VEHICLE MOVES TO BE PLACED IN
POSITION FOR LOADING, E.G., PORTLAND, OREGON, TO ODAIR, WASHINGTON, AND
RETURN TO PORTLAND), A SPECIAL EQUIPMENT CHARGE OF 5-1/4 CENTS PER 100
POUNDS PER HOUR, EXTRA LABOR, PILOT CARS AND A CHARGE FOR DETENTION OF
VEHICLE FOR PERIODS OF MORE THAN 1 HOUR EACH FOR LOADING AND UNLOADING.
BY LETTER DATED AUGUST 7, 1970, THE CHIEF, TRANSPORTATION MANAGEMENT
DIVISION, TRANSPORTATION AND COMMUNICATIONS SERVICE, DENVER REGIONAL
OFFICE, GENERAL SERVICES ADMINISTRATION (GSA), FORMALLY FURNISHED THE
CONTRACTING OFFICER TWO ESTIMATES OF THE TRANSPORTATION COSTS THAT WOULD
BE INCURRED IN TRANSPORTING THE TRANSFORMERS FROM ODAIR TO GRAND COULEE:
THE FIRST IN AN AMOUNT OF $40,418.95, REPRESENTING THE TOTAL MOVE AT
ASEA'S GUARANTEED WEIGHT; THE SECOND IN AN AMOUNT OF $38,867.29, BASED
ON THE ASSUMPTION THAT THE TRANSFORMER ACCESSORIES WOULD BE TRANSPORTED
ON VEHICLES SEPARATE FROM THOSE USED TO MOVE THE TRANSFORMERS. AS THE
LETTER INDICATED, THIS SECOND ESTIMATE WAS BASED ON THE FURTHER
ASSUMPTION THAT THE ACCESSORIES WOULD WEIGH 45,000 POUNDS PER
TRANSFORMER.
IT SHOULD BE NOTED THAT ON JUNE 17, 1970, GSA INITIALLY SUBMITTED A
TRANSPORTATION EVALUATION OF APPROXIMATELY $4,500 WHICH WAS LIMITED TO A
COMPUTATION OF THE LINE-HAUL RATE TO GRAND COULEE, EXCLUSIVE OF
"INCIDENTAL OR ACCESSORIAL CHARGES." SINCE THIS COMPUTATION DID NOT
REFLECT ALL TRANSPORTATION COSTS, GSA WAS REQUESTED BY THE CONTRACTING
OFFICER TO FURNISH ADDITIONAL TRANSPORTATION INFORMATION. IT RESPONDED
BY LETTER OF JULY 8, WITH ESTIMATES FURNISHED BY THREE TRUCKING FIRMS:
WILHELM TRUCKING CO., WITH AN ESTIMATE OF $50,000; NEIL F. LAMPSON,
INC., WITH AN ESTIMATE OF $55,500; BIGGE DRAYAGE CO., WITH AN ESTIMATE
OF $137,850. THE CONTRACTING OFFICER INITIALLY SELECTED WILHELM'S
$50,000 ESTIMATE FOR EVALUATION AND THIS FIGURE WAS ADDED TO ALL F.O.B.
ODAIR BIDS, AS EVIDENCED BY THE OFFICIAL BID ABSTRACT. THE USE OF THIS
ESTIMATE WAS FORMALLY QUESTIONED BY ASEA IN A LETTER OF JULY 24, 1970.
THIS PROMPTED GSA'S AUGUST 7 CALCULATION OF TRANSPORTATION COSTS AND,
ULTIMATELY, THE CONTRACTING OFFICER'S REQUEST FOR OUR OPINION AS TO THE
PROPER METHOD OF EVALUATING TRANSPORTATION COSTS IN LIGHT OF PARAGRAPH
B-4A(3) OF THE SOLICITATION, WHICH PROVIDES THAT:
"(3) IN THE CASE OF OFFERS STATING DELIVERY AT ODAIR, WASHINGTON, THE
COST OF TRANSPORTATION BETWEEN THIS POINT AND GRAND COULEE THIRD
POWERPLANT, COULEE DAM, WASHINGTON, BASED ON THE GUARANTEED SHIPPING
WEIGHTS STATED BY THE OFFEROR IN HIS OFFER AND USING THE COMMERCIAL
FREIGHT RATES FOR THE EQUIPMENT IN EFFECT AT THE TIME OF OFFER OPENING,
WILL BE ADDED TO THE TOTAL PRICE OFFERED FOR EACH SCHEDULE."
IF THE TERM "COMMERCIAL FREIGHT RATES" DENOTES ONLY THE 16 CENTS PER
100-POUND RATE, THE ONLY TRANSPORTATION COST TO BE CONSIDERED IN THE BID
EVALUATION WOULD BE APPROXIMATELY $4,500 - RATHER THAN THE ESTIMATED
FULL TRANSPORTATION COST OF $38,867.29 (ADVANCED BY THE CONTRACTING
OFFICER AS THE SUGGESTED ALTERNATE). ASEA'S BID WOULD BE LOW BY MORE
THAN $30,000. ON THE OTHER HAND, IF ASEA'S BID ON THE F.O.B. ODAIR BASIS
WAS EVALUATED WITH BBC'S BID ON THE F.O.B. JOBSITE BASIS, ASEA'S BID,
PLUS THE GENERAL ELECTRIC BID FOR THE SCHEDULE NO. 2 ITEMS, PLUS THE
EVALUATION FOR EFFICIENCY, FOREIGN DIFFERENTIAL, AND OTHER COSTS AS
SHOWN ON THE CONTRACTING OFFICER'S ABSTRACT OF OFFERS, PLUS $38,867.29
FOR FREIGHT COSTS, WOULD TOTAL $4,481,654.33. BBC'S BID, PLUS THE OTHER
COSTS SET FORTH IN THE CONTRACTING OFFICER'S ABSTRACT OF BIDS, WOULD
AMOUNT TO $4,478,678.34. THIS WOULD MAKE BBC THE LOW BIDDER BY ABOUT
$2,900.
IN SUPPORT OF A RESTRICTIVE INTERPRETATION OF PARAGRAPH B-4A(3), ASEA
ORIGINALLY URGED THAT THE 16-CENT RATE IS THE ONLY CLEAR AND CONCISE
YARDSTICK AVAILABLE BECAUSE THE COMPUTATION OF ESTIMATED COSTS,
DEPENDENT AS IT IS UPON VARYING UNIT SIZES, LABOR, LOADING AND
UNLOADING, ETC., WOULD BE SPECULATIVE AND WOULD NOT COINCIDE WITH THE
FULL ACTUAL COSTS EVENTUALLY PAYABLE FOR THE DELIVERY OF THE
TRANSFORMERS, AND THAT UNDER THE TERMS OF PARAGRAPH B-11A IT WOULD
ULTIMATELY BE LIABLE FOR THE ACTUAL TRANSPORTATION COST INCURRED. IT
WAS ALSO SAID THAT HAD IT BEEN INTENDED THAT ACTUAL TRANSPORTATION COSTS
WERE TO BE USED IN EVALUATION, THE SOLICITATION WOULD HAVE REQUESTED THE
WEIGHT OF THE LARGEST PIECE AND THE DIMENSIONS OF THE TRANSFORMERS
BECAUSE OF THE HEAVY LOADING COSTS AND DIFFERENTIAL OF 10 OR 25 PERCENT
TO BE ADDED TO THE 16-CENT RATE, DEPENDENT UPON THE HEIGHT OF THE
TRANSFORMER UNITS AS PREPARED FOR SHIPMENT.
BBC ASSERTED IN RESPONSE THAT, WHILE THERE WAS NO WAY OF PRECISELY
DETERMINING THE FULL COST OF TRANSPORTATION, AN ESTIMATE PREDICATED ON
INFORMATION OBTAINABLE FROM THE TARIFF AND OTHER AUTHORITIES CONSTITUTES
THE BEST AVAILABLE MEANS OF DETERMINING THE TOTAL TRANSPORTATION COSTS
THAT WOULD BE INCURRED, AND THAT PARAGRAPH B-4A(3) ADEQUATELY NOTIFIED
BIDDERS THAT THE FULL COST OF TRANSPORTATION WOULD BE CONSIDERED.
IN REJECTING ASEA'S INTERPRETATION OF PARAGRAPH B-4A AS UNREASONABLE,
WE MADE THE FOLLOWING OBSERVATIONS IN THE DECISION OF OCTOBER 9:
"IN ANALYZING THIS SITUATION IT IS NECESSARY TO CONSIDER WHAT
PARAGRAPH B-4A(3) STATES IN ITS ENTIRETY. WE DO NOT BELIEVE THAT THE
WORDS 'COMMERCIAL FREIGHT RATES' MAY BE ISOLATED FROM THE CONTEXT OF THE
ENTIRE PARAGRAPH. THE PARAGRAPH STATES THAT IN CASE OF OFFERS STATING
DELIVERY AT ODAIR, WASHINGTON, THE COST OF TRANSPORTATION BETWEEN THAT
POINT AND THE POWERPLANT BASED ON GUARANTEED SHIPPING WEIGHTS STATED BY
THE OFFEROR IN HIS OFFER AND USING THE COMMERCIAL FREIGHT RATES FOR THE
EQUIPMENT IN EFFECT AT THE TIME OF OFFER OPENING WILL BE ADDED TO THE
TOTAL PRICE OFFERED FOR EACH SCHEDULE.
"IT SEEMS CLEAR THAT WHAT THIS CLAUSE SIGNIFIES IS THAT THE ACTUAL
COST, OR AS CLOSE AS IT CAN BE REASONABLY ASCERTAINED, OF TRANSPORTING
THE 10 TRANSFORMERS IN ACCORDANCE WITH THE DELIVERY SCHEDULE, MUST BE
USED IN ORDER TO MAKE A VALID COMPARISON WITH THE DELIVERED PRICE OF THE
F.O.B. JOBSITE BID. TO SAY THAT ONLY A RELATIVELY SMALL PART OF THE
COST OF TRANSPORTATION IS TO BE CONSIDERED IN EVALUATING BIDS IS TO
IGNORE THE FACT THAT THE 16-CENT RATE PRODUCING THE $4,500 BASIC
LINE-HAUL COST WILL NOT DELIVER THE TRANSFORMERS TO THE JOBSITE.
"PARAGRAPH B-4A(3), THUS APPLIED, IS COMPATIBLE WITH PARAGRAPH B-11A
OF THE SOLICITATION, RELATIVE TO SHIPPING PROVISIONS. THE THIRD
SUBPARAGRAPH OF PARAGRAPH B-11A READS:
"'ON THE BASIS OF THE GUARANTEED SHIPPING WEIGHTS STATED BY THE
CONTRACTOR IN HIS OFFER AND USING THE COMMERCIAL FREIGHT RATES IN EFFECT
ON THE DATE OF THE OPENING, THE GOVERNMENT WILL COMPUTE THE COST OF
TRANSPORTATION BETWEEN ODAIR, WASHINGTON, AND THE GRAND COULEE THIRD
POWERPLANT, COULEE DAM, WASHINGTON. IF THE ACTUAL TOTAL COST OF SUCH
TRANSPORTATION EXCEEDS THE COST OF TRANSPORTATION COMPUTED ON THE BASIS
OF THE GUARANTEED SHIPPING WEIGHTS, THE GOVERNMENT WILL DEDUCT FROM ANY
PAYMENT DUE THE CONTRACTOR SUCH EXCESS TRANSPORTATION COSTS.'
"AGAIN, THE TERM 'COMMERCIAL FREIGHT RATES' HAS TO BE READ AS
EMBRACING THE BASIC LINE-HAUL RATE AND ALL OTHER DETERMINABLE INCIDENTAL
OR ACCESSORIAL FACTORS WHICH, TAKEN TOGETHER, PRODUCE THE TOTAL
TRANSPORTATION COST, REASONABLY COMPUTABLE ON THE BASIS OF EXPERIENCE
AND SOUND JUDGMENT IN SUCH MATTERS. IT IS OBVIOUS IN THE PERTINENT
SUBPARAGRAPH THAT THE BASIC LINE-HAUL RATE, APPLIED TO THE GUARANTEED
SHIPPING WEIGHT, PRODUCES ONLY A PART OF 'THE ACTUAL TOTAL COST OF' THE
NECESSARY TRANSPORTATION.
"IF THE 'COMMERCIAL FREIGHT RATES,' AS USED IN THE THIRD SUBPARAGRAPH
IN PARAGRAPH B-11A, IS TO BE GIVEN THE SAME EFFECT AS ASEA ASSERTS IS
APPLICABLE IN THE CASE OF PARAGRAPH B-4A(3), THE GOVERNMENT WOULD BE
PRECLUDED FROM RECOVERING ANY TRANSPORTATION COSTS THAT MIGHT BE PAID BY
IT IN EXCESS OF THE LINE-HAUL RATE APPLIED TO THE GUARANTEED SHIPPING
WEIGHT. SUCH A RESULT IS CLEARLY NOT INTENDED BY THE ADJUSTMENT
SUBPARAGRAPH OF THE SHIPPING PROVISIONS IN B-11A. IT IS JUST AS CLEARLY
NOT INTENDED BY PARAGRAPH B-4A(3) THAT EVALUATION OF THE BIDS BE
ACCOMPLISHED ON THE NARROW AND UNREALISTIC CONCEPT OF THE TERM
'COMMERCIAL FREIGHT RATES' ADVANCED BY ASEA. IF THE AWARD WERE TO BE
MADE TO ASEA, ITS CONCEPT, CARRIED OVER INTO THE THIRD SUBPARAGRAPH IN
B-11A OF THE SOLICITATION, WOULD REQUIRE THE UNITED STATES TO ABSORB FOR
ITS OWN ACCOUNT TRANSPORTATION COSTS WHICH MAY BE CONSERVATIVELY
ESTIMATED AS $34,318.90 ($38,867.29 LESS $4,548.39).
"FURTHERMORE, WE FIND NO AUTHORITY FOR THE POSITION TAKEN BY ASEA
THAT THE TERM 'COMMERCIAL FREIGHT RATES' HAS A MEANING WHICH RESTRICTS
ITS COVERAGE TO ONLY THE 16-CENT DISTANCE RATE, WITHOUT ATTEMPTING TO
REACH SOME DECISION AS TO THE COMPLETE ACTUAL COST OF TRANSPORTATION FOR
THE TRANSFORMER EQUIPMENT. THERE IS JUDICIAL AUTHORITY, HOWEVER, FOR
THE POSITION TAKEN BY BROWN BOVERI THAT THE TERM 'FREIGHT RATES' MEANS
PRACTICALLY EVERYTHING THAT A SHIPPER HAS TO PAY TO A CARRIER TO MOVE
THE GOODS INVOLVED FROM A POINT OF ORIGIN TO A POINT OF DESTINATION."
WE ALSO REJECTED THE POSSIBLE OBJECTION THAT PARAGRAPH B-4A(3) OF THE
SOLICITATION WAS NOT SUFFICIENTLY DEFINITE TO APPRISE BIDDERS OF THE
BASIS FOR EVALUATION OF TRANSPORTATION COSTS, CITING THE STANDARD
ARTICULATED IN 36 COMP. GEN. 380, 385 (1956):
"THE 'BASIS' OF EVALUATION WHICH MUST BE MADE KNOWN IN ADVANCE SHOULD
BE CLEAR, PRECISE AND EXACT AS POSSIBLE. IDEALLY, IT SHOULD BE CAPABLE
OF BEING STATED AS A MATHEMATICAL EQUATION. IN MANY CASES, HOWEVER,
THAT IS NOT POSSIBLE. AT THE MINIMUM, THE 'BASIS' MUST BE STATED WITH
SUFFICIENT CLARITY AND EXACTNESS TO INFORM EACH BIDDER PRIOR TO BID
OPENING, NO MATTER HOW VARIED THE ACCEPTABLE RESPONSES, OF OBJECTIVELY
DETERMINABLE FACTORS FROM WHICH THE BIDDER MAY ESTIMATE WITHIN
REASONABLE LIMITS THE EFFECT OF THE APPLICATION OF SUCH EVALUATION
FACTOR ON HIS BID IN RELATION TO OTHER POSSIBLE BIDS. BY THE TERM
'OBJECTIVELY DETERMINABLE FACTORS' WE MEAN FACTORS WHICH ARE MADE KNOWN
TO OR WHICH CAN BE ASCERTAINED BY THE BIDDER AT THE TIME HIS BID IS
BEING PREPARED. *** "
WE THEN STATED IN THE OCTOBER 9 DECISION THE CONCLUSION THAT THE
WILHELM TRUCKING CO.'S $50,000 ESTIMATE WAS AN ADEQUATE COMMON
DENOMINATOR TO MAKE THE EVALUATION OF TRANSPORTATION COSTS UNDER
PARAGRAPH B-4A(3). APPLYING THIS ESTIMATE TO ASEA'S BID, BBC WAS
CLEARLY THE LOW BIDDER.
ON RECONSIDERATION, ASEA HAS QUESTIONED THE VALIDITY OF APPLYING THE
$50,000 ESTIMATE TO ITS BID.
IT HAS ALSO QUESTIONED THE ACCURACY OF BOTH GSA'S INDEPENDENT
ESTIMATES OF TRANSPORTATION COSTS AND URGES THAT A CORRECT COMPUTATION
OF TRANSPORTATION COSTS RESULTS IN ITS BID BEING LOW. ALTERNATIVELY, IT
NOW MAINTAINS THAT IF WE REJECT ITS CURRENT COMPUTATION OF
TRANSPORTATION COST, WE MUST CONCLUDE THAT THE SOLICITATION WAS
DEFECTIVE BY REASON OF ITS FAILURE TO ELICIT INFORMATION NECESSARY TO A
PROPER CALCULATION OF TRANSPORTATION COSTS.
AT THE OUTSET, IT MUST BE EMPHASIZED THAT NO ONE HAS SUGGESTED THAT
ACCESSORIAL AND INCIDENTAL COSTS ARE NOT FOR CONSIDERATION IF THE TOTAL
COST OF TRANSPORTATION OF THE TRANSFORMERS FROM ODAIR TO THE POWERPLANT
IS TO BE DETERMINED. ASEA'S ARGUMENT DURING INITIAL CONSIDERATION WAS
SIMPLY THAT THE SOLICITATION DID NOT PROVIDE FOR EVALUATION OF THESE
COSTS AND PROPERLY DID NOT BECAUSE OF THEIR ALLEGEDLY SPECULATIVE
NATURE. HOWEVER, IT FURTHER CONTENDED THAT IT WOULD ULTIMATELY BE
LIABLE FOR THESE COSTS UNDER PARAGRAPH B-11 OF THE SOLICITATION. THUS,
EVEN UNDER ITS INTERPRETATION, IT NOTED IN ITS LETTER OF OCTOBER 1,
1970, TO OUR OFFICE THAT:
" *** AN ESTIMATE OF THE ACTUAL COST OF TRANS-SHIPMENT HAD TO BE
PREPARED BY EACH OFFEROR IN ORDER TO SUBMIT A PRUDENT BID. THIS
ESTIMATE PERFORCE HAD IN EACH CASE TO TAKE INTO CONSIDERATION THE EFFECT
ON SUCH COST THE FACTORS OF SIZE AND WEIGHT OF THE EQUIPMENT IN
ACCORDANCE WITH ITS PARTICULAR DESIGN, THE NUMBER OF UNITS TO BE
INCLUDED IN A GIVEN SHIPMENT, AS WELL AS CRANES, STANDBY LABOR, SAFETY
PRECAUTIONS AND THE LIKE REQUIRED TO TRANSFER THE OFFEROR'S EQUIPMENT IN
THE MANNER THE OFFEROR DESIRED. *** " CONSISTENT WITH THIS OBSERVATION,
WE NOTE THAT ASEA SOLICITED AND RECEIVED FROM WILHELM TRUCKING CO. THE
SAME $50,000 ESTIMATE THAT WAS GIVEN TO BBC AND TENTATIVELY USED BY THE
CONTRACTING OFFICER. HOWEVER, WE RECOGNIZE THAT THE BIDDERS'
RECOGNITION OF THE NATURE AND MAGNITUDE OF THE TRANSPORTATION COSTS
INVOLVED DOES NOT RESOLVE THE INTERPRETATIVE QUESTION WHETHER PARAGRAPH
B-4A(3) REQUIRES A DETERMINATION OF THE ESTIMATED TOTAL COST OF
TRANSPORTATION FOR THE PURPOSE OF COMPARING F.O.B. ODAIR BIDS WITH
F.O.B. JOBSITE BIDS OR THE ADEQUACY OF THE SOLICITATION FROM THE
STANDPOINT OF APPRISING OFFERORS OF THE BASIS OF EVALUATION.
THESE WERE, OF COURSE, THE BASIC QUESTIONS RESOLVED IN OUR DECISION
OF OCTOBER 9 AND ASEA INDIRECTLY RAISES THESE ISSUES AGAIN.
WE HAVE REVIEWED OUR INTERPRETATION OF PARAGRAPH B-4A(3) IN LIGHT OF
ASEA'S OBJECTIONS TO THE SOLICITATION AND WE MUST AGAIN REJECT ITS
INTERPRETATION OF THE TERM "COMMERCIAL FREIGHT RATES" AS USED IN THAT
PARAGRAPH FOR THE REASONS SET FORTH IN OUR DECISION OF OCTOBER 9 AND
QUOTED ABOVE. TO ACCEPT ASEA'S INTERPRETATION, WE MIGHT ADD, WOULD BE
WHOLLY INCONSISTENT WITH ONE OF THE MAJOR PURPOSES OF PARAGRAPH B-4 -
NAMELY, TO AFFORD A BASIS FOR COMPARISON OF BIDS ON AN F.O.B. ODAIR
BASIS WITH BIDS ON AN F.O.B. JOBSITE BASIS. IF ASEA'S INTERPRETATION
HAD MERIT, IT SHOULD HAVE PROMPTED INQUIRIES FROM THE BIDDERS BUT, AS
THE DIRECTOR OF SURVEY AND REVIEW STATES IN HIS LETTER OF DECEMBER 23,
1970, "OF THE 12 FIRMS OFFERING BIDS ON THE TRANSFORMERS, NOT ONE
SUGGESTED, PRIOR TO BIDDING, ANY NEED FOR CLARIFICATION OR REMOVAL OF
AMBIGUITY IN ANY RESPECT."
ASEA ASSERTS THAT IF, AS WE MUST CONCLUDE, PARAGRAPH B-4A(3) WAS
INTENDED TO REQUIRE CALCULATION OF ACTUAL SHIPPING COSTS, THEN THE
SOLICITATION WAS NECESSARILY DEFICIENT FOR FAILURE TO ELICIT INFORMATION
NECESSARY TO CALCULATE PROPER TRANSPORTATION COSTS, CITING, INTER ALIA,
43 COMP. GEN. 537 (1964). SPECIFICALLY, ASEA MAINTAINS THAT IT IS NOT
POSSIBLE TO EVALUATE TRANSPORTATION COSTS SOLELY ON THE BASIS OF THE
TOTAL GUARANTEED SHIPPING WEIGHT - THE ONLY INFORMATION CALLED FOR IN
THE SOLICITATION. IN THIS REGARD, IT NOTES THAT THE SOLICITATION'S
REQUEST FOR A TOTAL GUARANTEED SHIPPING WEIGHT IS BASED ON AN ASSUMPTION
THAT THE ENTIRE TRANSFORMER, INCLUDING ACCESSORIES, WOULD HAVE TO BE
SHIPPED ON ONE VEHICLE BUT THAT IF THE ACCESSORIES WERE SHIPPED
SEPARATELY A LOWER TRANSPORTATION COST WOULD RESULT. THIS IS EVIDENCED
BY CONTRASTING GSA'S $40,418.95 ESTIMATE WITH THE $38,867.29 ESTIMATE,
THE LATTER OF WHICH IS BASED ON SEPARATE TRANSPORT FOR THE ACCESSORIES.
IT ALSO POINTS OUT THAT THE DIMENSIONS OF THE TRANSFORMERS BEAR ON THE
ACTUAL TRANSPORATION COSTS, AND THAT BIDDERS WERE NOT REQUIRED TO SUBMIT
GUARANTEED DIMENSIONS.
IN THE CONTEXT OF THIS CASE, WE MUST AGREE WITH ASEA'S CONTENTION
THAT FAILURE TO REQUEST GUARANTEED TRANSPORTATION DATA IN THE AREAS
NOTED DILUTES THE ACCURACY OF THE DETERMINATION OF THE LOWEST ESTIMATED
TOTAL COST TO THE GOVERNMENT OF TRANSPORTING THE TRANSFORMERS FROM ODAIR
TO THE JOBSITE.
WITH RESPECT TO A REQUEST FOR SEPARATE GUARANTEED WEIGHTS FOR
TRANSFORMERS AND ACCESSORIES, THE DIRECTOR OF SURVEY AND REVIEW'S LETTER
OF DECEMBER 23, 1970, SEEMS TO SUGGEST THAT THIS METHOD IS UNDESIRABLE,
AND PERHAPS NOT INTENDED, BY QUESTIONING ASEA'S ADVANCEMENT OF AN
ALLEGEDLY "UNUSUAL DISASSEMBLY MODE" FOR PURPOSES OF SHIPMENT, WHICH
WOULD LEAD TO UNANTICIPATED REASSEMBLY COSTS. ALTHOUGH WE ARE NOT
PREPARED TO SAY THAT BECAUSE OF THIS POTENTIAL PROBLEM THE SOLICITATION
COULD NOT HAVE RESTRICTED THE MODE OF SHIPMENT, THE REQUEST FOR A TOTAL
GUARANTEED SHIPPING WEIGHT (COVERING BOTH THE TRANSFORMERS AND
ACCESSORIES) IS NOT SUFFICIENT TO CONVEY AN INTENT TO RESTRICT THE MODE
OF SHIPMENT. INDEED, A READING OF THE ENTIRE SOLICITATION MAKES IT
CLEAR THAT IN VIEW OF THE NATURE OF THE ITEMS BEING PROCURED, TRANSPORT
OF ACCESSORIES APART FROM THE TRANSFORMERS WAS PERMISSIBLE. MOREOVER,
RECOGNITION OF THIS MODE OF TRANSPORT IS CONSISTENT WITH DETERMINING THE
LOWEST COST TO THE GOVERNMENT OF TRANSPORTATION, AS REQUIRED BY FEDERAL
PROCUREMENT REGULATIONS (FPR) SEC. 1-19.203-3.
SIMILARLY, THE SOLICITATION SHOULD HAVE REQUESTED GUARANTEED
DIMENSIONS. AS PREVIOUSLY INDICATED, THE DIMENSIONS ARE IMPORTANT FOR
ACCURATELY DETERMINING THE INCREASES TO THE 16-CENT PER 100 POUNDS
LINE-HAUL RATE. UNDER THE WILLAMETTE TARIFF, IF THE EQUIPMENT EXCEEDS 12
FEET, BUT NOT MORE THAN 14 FEET, IN HEIGHT, THE RATE IS INCREASED BY 10
PERCENT. IN THIS CASE, THIS IS THE ONLY AREA IN WHICH DIMENSIONS PLAY A
ROLE IN DETERMINING TRANSPORTATION COST. WE NOTE THAT ASEA HAS
MAINTAINED THAT ITS EQUIPMENT WOULD BE SUBJECT TO THE 10-PERCENT
DIFFERENTIAL, AND THAT ALL COMPUTATIONS OF THE ESTIMATED COSTS OF
TRANSPORTATION HAVE BEEN BASED ON THIS ASSUMPTION.
WHILE WE RECOGNIZE THE INADEQUACIES IN THE SOLICITATION ADVANCED BY
ASEA, THE QUESTION REMAINS AS TO WHETHER THESE DEFECTS IN LIGHT OF THE
CIRCUMSTANCES OF THIS CASE REQUIRE THAT THE AWARD OF THE CONTRACT TO BBC
MUST BE RESCINDED, THE SOLICITATION CANCELED AND THE PROCUREMENT
READVERTISED. NUMEROUS DECISIONS OF OUR OFFICE RECOGNIZE THE PRINCIPLE,
EXPRESSED IN 43 COMP. GEN. 537 (1964), THAT CANCELLATION OF A
SOLICITATION IS TO BE AVOIDED, WHERE POSSIBLE, BECAUSE OF THE OBVIOUS
PREJUDICIAL EFFECT OF THE DISCLOSURE OF ALL BIDS. APPLICATION OF THIS
PRINCIPLE TO CASES OF THIS NATURE HAS PROPERLY LED TO AN EXAMINATION OF
THE PURPOSE WHICH WOULD BE ACHIEVED BY CANCELLATION. WHERE, AS WAS THE
CASE IN 43 COMP. GEN., SUPRA, THE ONLY APPARENT REASON FOR READVERTISING
WOULD BE TO OBTAIN TRANSPORTATION DATA, WHICH SHOULD HAVE BEEN SUPPLIED
WITH THE BID, BUT WAS NOT, THE INQUIRY NARROWS TO A CONSIDERATION OF THE
IMPACT THE UNREQUESTED DATA WOULD HAVE ON THE COMPUTATION OF THE COST OF
TRANSPORTATION. IF THE "LIKELIHOOD IS VIRTUALLY NIL THAT IF SUCH
INFORMATION WAS ORIGINALLY IN THE BIDS A DIFFERENT BIDDER MIGHT HAVE
BEEN EVALUATED AS THE LOW BIDDER," THERE IS NO COGENT OR COMPELLING
REASON TO CANCEL. 43 COMP. GEN., SUPRA, AT 539. THIS INQUIRY HAS, OF
COURSE, BEEN FORMULATED IN VARIOUS WAYS DEPENDING ON THE CIRCUMSTANCES
INVOLVED. HERE, WE BELIEVE THE QUESTION SHOULD BE WHETHER, UNDER THE
MOST CONSERVATIVE COMPUTATION OF THE TOTAL TRANSPORTATION COSTS, ASEA
WOULD DISPLACE BBC'S BID.
TURNING NOW TO THE EVALUATION OF THE COST OF TRANSPORTATION, ASEA
MAINTAINS THAT THE APPLICATION OF THE WILHELM TRUCKING CO.'S $50,000
ESTIMATE TO ITS BID IS IMPROPER. UPON RECONSIDERATION, WE MUST AGREE.
WE MUST MAKE IT CLEAR, HOWEVER, THAT BECAUSE OF THE NATURE OF THE ITEMS
INVOLVED, WE FIND NOTHING PER SE ILLEGAL, AS ASEA SUGGESTS, IN
CONSIDERING ESTIMATES FURNISHED BY AN INDEPENDENT TRUCKING COMPANY
EXPERIENCED IN HANDLING EQUIPMENT OF THIS NATURE. FURTHER, CONTRARY TO
ASEA'S CONTENTION, THE COPY OF WILHELM'S LETTER OF JULY 1, 1970,
SUBMITTED TO THE CONTRACTING OFFICER WITH THE LETTER OF JULY 8, 1970,
FROM THE CHIEF OF GSA'S DENVER TRANSPORTATION MANAGEMENT DIVISION,
INDICATES THAT WILHELM'S ESTIMATE WAS BASED ON THE CURRENT CHARGES FOR
TRANSPORTATION OF THE TRANSFORMERS AND ACCESSORIES. IN THIS REGARD, WE
NOTE THAT WILHELM IS A PARTY TO WILLAMETTE TARIFF NO. 5.
WILHELM'S ESTIMATE WAS, HOWEVER, PREDICATED ON THE TRANSFORMERS
WEIGHING 230,000 POUNDS EACH, RATHER THAN THE ACTUAL WEIGHTS OF ASEA'S
TRANSFORMERS AND ACCESSORIES. WE NEED NOT EXPLORE THE RAMIFICATIONS OF
THE WEIGHT DIFFERENCE AND HOW IT WOULD HAVE AFFECTED WILHELM'S ESTIMATE.
WE MUST, NEVERTHELESS, OBSERVE THAT SIGNIFICANT TRANSPORTATION CHARGES,
SUCH AS EXTRA LABOR, VEHICLE DETENTION AND PILOT CARS DO NOT DEPEND ON
WEIGHTS, BUT REQUIRE AN ESTIMATE OF TIME AND LABOR - AN AREA WHERE
EXPERIENCED JUDGMENT IS NOT WITHOUT SIGNIFICANCE.
WITH ITS REQUEST FOR RECONSIDERATION, ASEA HAS SUBMITTED TWO
RECALCULATIONS OF THE ESTIMATED ACTUAL TRANSPORTATION COSTS INVOLVED.
THE FIRST, IN AN AMOUNT OF $34,381.10, IS BASED ON THE METHOD OF
COMPUTATION USED BY GSA IN ARRIVING AT ITS $38,867.29 WITH THE EXCEPTION
THAT THE CHARGES PRESCRIBED BY THE WILLAMETTE TARIFF ARE SUBSTITUTED FOR
THE RATES OF THE PACIFIC INLAND TARIFF (USED BY GSA). THE SECOND
COMPUTATION, IN AN AMOUNT OF $32,586.84, IN ADDITION TO APPLYING THE
WILLAMETTE TARIFF, SUBSTITUTES THE ALLEGED ACTUAL WEIGHT (206,500 FOR
THE TRANSFORMER AND 68,500 POUNDS FOR THE ACCESSORIES). UNDER ASEA'S
FIRST COMPUTATION, COMPARISON OF ITS BID WITH BBC'S BID WOULD RESULT IN
ASEA BEING THE LOW BIDDER BY $1,510.20, WHILE UNDER THE SECOND
COMPUTATION ASEA WOULD BE LOW BY $3,304.46. WE WILL CONFINE OUR
DISCUSSION TO ASEA'S SECOND COMPUTATION SINCE IT IS BASED ON THE ALLEGED
ACTUAL WEIGHTS OF ASEA'S TRANSFORMERS AND ACCESSORIES AND, THUS,
PRESENTS ALL OF THE DATA THAT WOULD BE OBTAINED BY READVERTISEMENT.
COPIES OF ASEA'S SECOND COMPUTATION, AS WELL AS BBC'S REPLY THERETO,
HAVE BEEN MADE AVAILABLE TO ALL PARTIES. ALL, APPARENTLY, AGREE THAT
THE WILLAMETTE TARIFF, AND NOT THE PACIFIC INLAND TARIFF, IS FOR
APPLICATION, SINCE IT PROVIDES THE LOWEST FREIGHT RATES AVAILABLE. SEE
FPR SEC. 1-19.203-3.
IN ADOPTING THE RATES SET FORTH IN THE WILLAMETTE TARIFF, IT IS
IMPORTANT TO COMMENT ON THE REASONABLENESS OF GSA'S ESTIMATE OF THE
TIME, ESPECIALLY THE NUMBER OF MAN-HOURS, IT WILL TAKE TO LOAD, MOVE AND
UNLOAD THE TRANSFORMERS. IN OUR DECISION OF OCTOBER 9, WE REFERRED TO
GSA'S COMPUTATION ON THE BASIS OF THESE JUDGMENTS AS THE "LOWEST
AVAILABLE TOTAL TRANSPORTATION COST ESTIMATE" AND INDICATED THAT IT WAS
"CONSERVATIVELY ESTIMATED." WE WISH TO STRESS, AT THIS POINT, OUR
OPINION, BASED ON OUR REVIEW OF THE MATTER, THAT THE GSA JUDGMENTS ARE
INDEED CONSERVATIVE AND PERHAPS UNDERSTATED. HERE, IT SHOULD BE
RECALLED THAT WILHELM'S ESTIMATE WAS BASED ON ESSENTIALLY THE SAME
ASSUMED WEIGHT DISTRIBUTION USED BY GSA IN MAKING ITS SECOND
COMPUTATION.
COUNSEL FOR BBC HAS DRAWN ATTENTION TO THE FOLLOWING INACCURACIES IN
GSA'S SECOND COMPUTATION WHICH WE BELIEVE MUST BE CORRECTED. IN THIS
REGARD, COUNSEL FOR BBC URGES IN ITS LETTER OF NOVEMBER 17, 1970, THAT:
"PROPER APPLICATION OF THE WILLAMETTE TARIFF TO GSA'S ASSUMED
TRANSPORTATION FACTORS NECESSITATES CORRECTING SOME ASPECTS OF GSA'S
EARLIER APPLICATION OF A TARIFF TO THESE SAME ASSUMPTIONS. *** THE
ADJUSTMENTS MADE IN PROPERLY APPLYING THE TARIFF INVOLVE THE EXTRA LABOR
AND PILOT CAR COST CATEGORIES. TO REACH ITS ORIGINAL EXTRA LABOR COST
FIGURE, GSA ESTIMATED THAT TRANSPORTATION OF THE TRANSFORMERS CALLED FOR
BY THE SOLICITATION WOULD REQUIRE FIVE MEN WORKING 16 HOURS FOR EACH
TRANSFORMER AND THEN APPLIED TO THE TOTAL MAN HOURS A SINGLE TARIFF
LABOR RATE. THIS WAS INCORRECT, HOWEVER, FOR THE APPLICABLE WILLAMETTE
TARIFF INDICATES THAT ONE LABOR CHARGE WILL APPLY FOR THE FIRST EIGHT
HOURS WHICH THE FIVE MEN WORK, BUT A HIGHER CHARGE MUST BE APPLIED TO
THE NEXT EIGHT HOURS. WHILE IT IS TRUE THAT THE 16 HOURS OF REQUIRED
LABOR NEED NOT BE PERFORMED CONSECUTIVELY, PERHAPS THEREBY AVOIDING THE
HIGHER NIGHT-TIME LABOR CHARGES, AN OVERNIGHT BREAK IN THE CONSECUTIVE
WORK HOURS WOULD APPROXIMATELY DOUBLE THE VEHICLE DETENTION COSTS
CALCULATED BY GSA. THEREFORE, A RECALCULATION OF THE GSA ESTIMATE MUST
INCLUDE EITHER A CHARGE BASED UPON MANY HOURS OF PREMIUM LABOR OR A
VASTLY INCREASED VEHICLE DETENTION COST. THIS SAME PRINCIPLE IS TRUE IN
THE CALCULATION OF THE COST OF PILOT CARS, WHICH IN GSA'S APPLICATION OF
TARIFF PROVISIONS TO ITS ASSUMPTIONS WAS UNDERESTIMATED BECAUSE OF THE
FAILURE TO ALLOW FOR HIGHER LABOR CHARGES WHEN PILOT CAR DRIVERS WORK
MORE THAN A NORMAL, EIGHT-HOUR DAY. ***
"IN ADDITION TO THE FOREGOING CORRECTIONS IN THE APPLICATION OF A
TARIFF TO GSA ASSUMPTIONS, IT APPEARS NECESSARY TO CORRECT THE MILEAGE
FIGURES USED IN GSA'S CALCULATION OF EMPTY EQUIPMENT CHARGES. WHILE GSA
USED KENNEWICK, WASHINGTON, AS THE BASE POINT FOR FIGURING TOTAL EMPTY
VEHICLE MILEAGE, THE NEAREST CARRIER IN THE AREA ABLE TO PERFORM THE
REQUIRED TRANSPORTATION IS LOCATED IN PORTLAND, OREGON. *** WE HAVE
CORRECTLY USED PORTLAND-ODAIR MILEAGE AS THE BASIS FOR EMPTY EQUIPMENT
CHARGES." WITH RESPECT TO THE EXTRA LABOR CHARGES, ASEA OFFERS THE
FOLLOWING COMPUTATION:
"EXTRA LABOR
FIVE MEN X 16 HOURS PER UNIT X $7.47 PER HOUR X 10 = $5,976.00" WE
AGREE, HOWEVER, WITH BBC'S RECAPITULATION OF THE EXTRA LABOR CHARGES,
WHICH TAKES INTO CONSIDERATION OVERTIME CHARGES PRESCRIBED BY ITEM 636
OF THE TARIFF:
"EXTRA LABOR
FIVE MEN FOR 16 HOURS:
-FOR 8 HRS. (BETW. 8 AM - 5 PM) @ $7.47 X 10 = $2,988.00
-FOR 8 HRS. (BETW. 5 PM - 8 AM) @$11.20 X 10 = 4,480.00 $7,468.00"
THUS, IT IS CLEAR THAT A FAIR ESTIMATE OF LABOR CHARGES WOULD BE AT
LEAST $1,492 GREATER THAN ASEA'S FIGURE; AND, AS ITEM 636 OF THE
WILLAMETTE TARIFF SHOWS, THIS FIGURE DOES NOT INCLUDE FOREMEN OR
SUPERVISORS NEEDED FOR PERFORMANCE OF THIS HAUL.
MOREOVER, IF WE ASSUME THAT NO OVERTIME IS PERFORMED, THERE WOULD
NECESSARILY BE SUBSTANTIAL INCREASES IN VEHICLE DETENTION AND SPECIAL
EQUIPMENT CHARGES, FOR THE REASON THAT ON A STRAIGHT-TIME BASIS, ALL
OPERATIONS WOULD CEASE AT 5 P.M., WITH THE RESULT THAT ALL EQUIPMENT
WOULD BE HELD ON A DETENTION AND WAITING TIME BASIS UNTIL 8 A.M. THE
NEXT MORNING. THESE EXTRA CHARGES WOULD GREATLY EXCEED THE OVERTIME
CHARGES REFLECTED IN BBC'S COMPUTATION. ITEM 2705 OF THE WILLAMETTE
TARIFF SHOWS THAT WAITING TIME, AFTER ALLOWING 1 HOUR TO LOAD AND 1 HOUR
TO UNLOAD, IS $19.06 AN HOUR; AND ITEM 638 PROVIDES FOR AN ADDITIONAL
WAITING TIME RATE ON THE HEAVY VEHICLE OF 5-1/2 CENTS PER 100 POUNDS PER
HOUR.
CONSISTENT WITH THE FOREGOING TREATMENT OF OVERTIME, BBC OFFERS, AND
WE AGREE WITH, THE FOLLOWING COMPUTATION OF CHARGES FOR PILOT CARS IN
RESPONSE TO THE $1,357.08 TOTAL COST FOR THIS ITEM USED BY ASEA:
"PILOT CARS
10 TRIPS AT 62 MILES (ODAIR TO JOBSITE AND RETURN) X 2 CARS = 1240
MILES
1240 MILES @ $ .14 = $ 173.60
2 MEN FOR 8 HOURS @ $7.47 X 10 = 1,195.20
2 MEN FOR 8 HOURS @$11.20 X 10 = 1,792.00
$ 3,160.80"
AGAIN, WE BELIEVE THE MORE ACCURATE ESTIMATION OF PILOT CAR COST IS
THAT SHOWN BY BBC, WHICH IS $1,803.72 GREATER THAN ASEA'S FIGURE.
INSOFAR AS THE EMPTY EQUIPMENT CHARGE IS CONCERNED, ASEA COMPUTED
THIS ITEM ON THE BASIS OF GSA'S ESTIMATE OF $1,111.50, PLUS $147 FOR A
POSSIBLE ADDITIONAL TRIP TO TRANSPORT ACCESSORIES. THE COMPUTATION USED
BY GSA AND ASEA DOES NOT TAKE INTO CONSIDERATION THE FACT THAT ON THE
BASIS OF ASEA'S BREAKDOWN OF THE GUARANTEED SHIPPING WEIGHTS THERE WOULD
BE APPROXIMATELY 68,000 POUNDS OF EQUIPMENT FOR EACH TRANSFORMER. THIS
EQUIPMENT WOULD REQUIRE THE PLACEMENT OF AN ADDITIONAL VEHICLE OR
VEHICLES AT ODAIR AND THE COMPUTATIONS FOR EMPTY EQUIPMENT WOULD BE AS
INDICATED BY BBC AS FOLLOWS:
"MOVEMENT OF BARE TRANSFORMERS
"A. EMPTY MOVEMENT ON 4/15/73 (4 TRANSFORMERS, 4 TRIPS REQUIRED)
PORTLAND TO ODAIR AND RETURN TO PORTLAND 608 MILES
DAMSITE TO ODAIR (31 MILES X 3) 93
DAMSITE TO ODAIR (31 MILES X 4) 124
732
"B. EMPTY MOVEMENT ON 10/15/73 (3 TRANSFORMERS, 3 TRIPS)
PORTLAND TO ODAIR AND RETURN TO PORTLAND 608
701
"C. EMPTY MOVEMENT ON 4/15/74 (3 TRANSFORMERS, 3 TRIPS)
PORTLAND TO ODAIR AND RETURN TO PORTLAND 608
DAMSITE TO ODAIR (31 MILES X 3) 93
701
TOTAL EMPTY MILES (TRANSFORMER VEHICLE) 2,134 MILES
TARIFF RATE X $.60
COST (TRANSFORMER VEHICLE) $1280.40
"MOVEMENT OF ACCESSORIES
"A. EMPTY MOVEMENT ON 4/15/73 (180,000 LBS., 3 TRIPS REQUIRED)
PORTLAND TO ODAIR AND RETURN TO PORTLAND 608 MILES
DAMSITE TO ODAIR (31 MILES X 3) 93
701
"B. EMPTY MOVEMENT ON 10/15/73 (135,000 LBS., 3 TRIPS) 701
"C. EMPTY MOVEMENT ON 4/15/74 (135,000 LBS., 3 TRIPS) 701
TOTAL EMPTY MILES (ADDITIONAL VEHICLE) 2,103 MILES
TARIFF RATE X $.49
COST (ADDITIONAL VEHICLE) $1,030.47" THE FOREGOING RESUL
EQUIPMENT CHARGE OF $2,310.87. THIS CHARGE IS ALSO A MORE ACCURATE
ESTIMATE OF THE CHARGE FOR EMPTY EQUIPMENT; AND IT IS $1,052.37 GREATER
THAN ASEA'S ESTIMATE.
IN ADDITION, THE BROAD COMPUTATIONS ADVANCED BY THE PARTIES HAVE
FAILED TO TAKE INTO CONSIDERATION THE FACT THAT UNDER THE DELIVERY
SCHEDULE, THREE SEPARATE DELIVERIES ARE REQUIRED. THIS REQUIREMENT
WOULD MEAN THAT THE FACTORS OF EMPTY MILEAGE, DETENTION LABOR CHARGES
AND PILOT CAR CHARGES ARE ACTUALLY SUBJECT TO THREE SEPARATE
COMPUTATIONS, WHICH WOULD INCREASE THE CHARGES OVER THOSE COMPUTED BY
ONE COMPUTATION TO COVER 10 TRANSFORMERS AS ONE TRANSACTION. HOWEVER,
ON THE BASIS OF THESE ADJUSTMENTS TO ASEA'S FIGURES NOTED ABOVE, IT IS
CLEAR TO US THAT ASEA IS NOT THE LOW BIDDER, EVEN UNDER THE MOST
CONSERVATIVE ESTIMATE OF THE TOTAL COST OF TRANSPORTATION. THE THREE
ITEMS DISCUSSED ABOVE RESULT IN AN INCREASE TO ASEA'S FIGURES OF
$4,358.09, WHICH WOULD RAISE ASEA'S COMPUTATION FROM $32,586.84 TO
$36,844.93.
ACCORDINGLY, WE FIND NO BASIS FOR TAKING FURTHER ACTION IN THIS
MATTER AND ASEA'S REQUEST IS THEREFORE DENIED. WE DO, HOWEVER, RENEW
OUR RECOMMENDATION THAT IN FUTURE PROCUREMENTS OF THIS NATURE,
CONSIDERATION BE GIVEN TO OBTAINING BIDS ON AN F.O.B. JOBSITE BASIS
ONLY, THEREBY ELIMINATING THE NEED TO DETERMINE TRANSPORTATION COSTS ON
AN ESTIMATED BASIS.
B-171025, FEB 9, 1971
BID PROTEST - SOLE-SOURCE AWARD
DENIAL OF PROTEST BY JET POWER, INC. AGAINST THE AWARD OF A CONTRACT
FOR REPAIR AND OVERHAUL OF ENGINES, ISSUED BY AIR MATERIEL AREA, KELLY
AIR FORCE BASE, TEXAS, TO TELEDYNE INDUSTRIES, INC., THE PRIME ENGINE
MANUFACTURER, ON A SOLE-SOURCE BASIS.
SINCE THE AIR FORCE CONSIDERS THE SITUATION TO BE SO CRITICAL THAT IT
MUST REQUIRE THE IMMEDIATE WORK TO BE ACCOMPLISHED BY THE ENGINE
MANUFACTURER TO INSURE THE RELIABILITY OF THE ENGINES, THE GAO WILL NOT
DISTURB THE AWARD AND CONSIDERS IT THE RESPONSIBILITY OF THE CONTRACTING
AGENCY TO DETERMINE WHEN THE NEEDS OF THE GOVERNMENT REQUIRE A
SOLE-SOURCE PROCUREMENT.
TO JET POWER, INC.:
REFERENCE IS MADE TO YOUR LETTER OF JANUARY 18, 1971, AND PRIOR
CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT ON A SOLE-SOURCE
BASIS TO TELEDYNE CAE DIVISION OF TELEDYNE INDUSTRIES, INC., UNDER
REQUEST FOR QUOTATIONS (RFQ) NO. F41608-71-Q-7025, ISSUED BY
HEADQUARTERS SAN ANTONIO AIR MATERIEL AREA (AFLC), KELLY AIR FORCE BASE,
TEXAS.
THE SUBJECT RFQ WAS ISSUED ON JULY 30, 1970, SOLICITING QUOTATIONS
FOR THE GOVERNMENT'S ESTIMATED REQUIREMENTS FOR REPAIR AND OVERHAUL OF
THE J69-T25/T29/T41A ENGINES AND RELATED COMPONENT PARTS FOR THE PERIOD
FEBRUARY 25, 1971, THROUGH FEBRUARY 24, 1972. THE RFQ WAS INITIATED
PURSUANT TO A PURCHASE REQUEST DATED JUNE 2, 1970, REQUESTING THAT THE
CONTRACT BE AWARDED ON A SOLE-SOURCE BASIS TO TELEDYNE, THE PRIME ENGINE
MANUFACTURER. WHILE TELEDYNE WAS THE ONLY SOURCE SOLICITED FOR THIS
REQUIREMENT, JET POWER SUBMITTED AN UNSOLICITED PROPOSAL BY TELEGRAM ON
SEPTEMBER 22, 1970.
BY LETTER DATED NOVEMBER 13, 1970, THE PROCURING ACTIVITY FURNISHED
JET POWER WITH A COPY OF RFQ -7025 AND ALSO OUTLINED THE REASONS FOR
LIMITING THIS PROCUREMENT TO TELEDYNE.
YOUR FIRM PROTESTED AGAINST THE NEGOTIATION OF THIS PROCUREMENT WITH
TELEDYNE TO THE EXCLUSION OF JET POWER. IN THIS REGARD, YOU CONTEND
THAT JET POWER IS OVERHAULING A SIMILAR ENGINE (141-B) TO THE J69 AND
THAT YOUR FIRM COULD PERFORM SIMILAR SERVICES ON THE J69 IF GIVEN THE
OPPORTUNITY.
IN YOUR LETTER OF DECEMBER 17, YOU STATE THAT JET POWER WAS LED TO
BELIEVE THAT ITS UNSOLICITED PROPOSAL WAS UNDER CONSIDERATION.
APPARENTLY, THIS BELIEF WAS BASED ON A LETTER DATED OCTOBER 21, 1970,
FROM THE PROCURING ACTIVITY ACKNOWLEDGING RECEIPT OF YOUR UNSOLICITED
PROPOSAL. WHILE THIS LETTER DID STATE THAT "EVALUATION OF SUBJECT
PROPOSAL HAS BEEN INITIATED," IT IS REPORTED THAT THE PURPOSE OF SUCH
LETTER WAS TO TRANSMIT TO YOU A COPY OF AFLC FORM 908, WHICH IS A POLICY
AGREEMENT FOR EVALUATION, BUT NOT NEGOTIATION, OF UNSOLICITED
SUBMISSIONS.
THE RECORD SUBMITTED HERE BY THE DEPARTMENT OF THE AIR FORCE SHOWS
THAT THIS PROCUREMENT IS BEING NEGOTIATED PURSUANT TO THE AUTHORITY OF
10 U.S.C. 2304(A)(10) WHICH, AS IMPLEMENTED BY PARAGRAPH 3-210 OF THE
ARMED SERVICES PROCUREMENT REGULATION (ASPR), PROVIDES THAT PURCHASES
AND CONTRACTS MAY BE NEGOTIATED IF "FOR PROPERTY OR SERVICES FOR WHICH
IT IS IMPRACTICABLE TO OBTAIN COMPETITION." AS ILLUSTRATIVE OF
CIRCUMSTANCES PERMITTING NEGOTIATION PURSUANT TO THIS AUTHORITY, ASPR
3-210.2(I) AND (IX) CITE AS EXAMPLES THE SITUATIONS, RESPECTIVELY, WHEN
THE SUPPLIES OR SERVICE CAN BE OBTAINED FROM ONLY ONE PERSON OR FIRM
(SOLE SOURCE OF SUPPLY), AND WHEN THE PROCUREMENT INVOLVES CONSTRUCTION,
MAINTENANCE, REPAIRS, ALTERATIONS OR INSPECTION, IN CONNECTION WITH ANY
ONE OF WHICH THE EXACT NATURE OR AMOUNT OF THE WORK TO BE DONE IS NOT
KNOWN.
WHILE THE CONTRACTING OFFICER INITIALLY ISSUED A DETERMINATION AND
FINDINGS (D&F) UNDER ASPR 3-210.2(IX) AUTHORIZING NEGOTIATION UNDER 10
U.S.C. 2304(A)(10), HE SUBSEQUENTLY REISSUED THE D&F IN CONFORMANCE WITH
ASPR 3-210.2(I) JUSTIFYING NEGOTIATION WITH TELEDYNE AS FOLLOWS:
"I HEREBY FIND THAT THE USE OF FORMAL ADVERTISING WOULD BE
IMPRACTICABLE FOR THE FOLLOWING REASONS:
"(A) TO ASSURE ADEQUATE TIME TO COMPLETELY RECYCLE THE TOTAL ATC
J69-T25 ENGINE INVENTORY AT LEAST ONCE THROUGH THE PRIME ENGINE
MANUFACTURER FOR OVERHAUL. THE ATC INVENTORY CONSISTS OF 1,438 ENGINES,
SOME OF WHICH HAVE NOT BEEN OVERHAULED SINCE THEIR CONVERSION FROM THE
J69-T9 SERIES TO THE J69-T25 SERIES DURING A CONVERSION PROGRAM
COMPLETED IN JUL 1961. UNTIL THE OVERHAUL PROGRAM WAS INSTIGATED,
APPROXIMATELY FIVE YEARS AGO TO PROVIDE IMPROVED ENGINE RELIABILITY,
THESE J69-T25 ENGINES WERE MAINTAINED AT BASE LEVEL BY THE JET ENGINE
BASE MAINTENANCE (JEBM) CONCEPT. THE ENTIRE ATC ENGINE INVENTORY WILL BE
COMPLETELY RECYCLED DURING THE LIFE OF THE PROPOSED CONTRACT COVERED BY
THIS ACTION.
"(B) TO ASSURE ESSENTIAL MISSION PERFORMANCE OF THE J69-T29 AND
J69-T41A ENGINES WHICH ARE USED IN DRONE MISSILES TO SUPPORT CLASSIFIED
PROJECT 146. THE PROPULSION SYSTEM IS SO CRITICAL FOR MISSION
PERFORMANCE THAT TELEDYNE CAE'S AND THEIR VENDOR'S ENGINEERING STAFF ARE
STILL REQUIRED TO PROVIDE TECHNICAL GUIDANCE DURING THE OVERHAUL OF
THESE ENGINES. THE DESIGN OF THE J69-T41A ENGINE HAS NOT PROVEN TO BE
STABLE ENOUGH TO REMOVE FROM THE PRIME MANUFACTURER.
"DETERMINATION"
"THE PROPOSED CONTRACT IS FOR PROPERTY OR SERVICES FOR WHICH IT IS
IMPRACTICABLE TO OBTAIN COMPETITION BY FORMAL ADVERTISING."
IN AMPLIFICATION OF THE FOREGOING D&F, THE AIR FORCE HAS SUMMARIZED
THE PROCUREMENT BACKGROUND OF THE J69 SERIES AIRCRAFT ENGINE MAINTENANCE
AND OVERHAUL PROGRAM AS FOLLOWS:
"(1) TELEDYNE CAE DIV OF TELEDYNE INDUSTRIES, INC, FORMERLY
CONTINENTAL AVIATION AND ENGINEERING CORP, IS THE PRIME ENGINE
MANUFACTURER OF THE J69 MODEL TURBOJET ENGINE. THE J69 MODEL ENGINE HAS
SEVERAL SERIES: (A) THE J69-T25 ENGINE USED ON T-37 TRAINER AIRCRAFT
WITH THE AIR TRAINING COMMAND (ATC) BEING THE PRINCIPAL USER, (B) THE
J69-T29 ENGINE USED ON THE BQM-34A RYAN DRONE, AND (C) THE J69-T41A
ENGINE ALSO USED AS A DRONE ENGINE WITH BOTH OF THE LATTER SERIES
SUPPORTING CLASSIFIED 'PROJECT 146.' THE T25 CONFIGURATION OF THE ENGINE
CONSTITUTES THE BULK OF OUR REQUIREMENT. SINCE IT IS USED TO POWER THE
BASIC JET TRAINER AIRCRAFT FOR THE ATC UNDERGRADUATE PILOT TRAINING
PROGRAM, MAXIMUM RELIABILITY OF THE OVERHAULED ENGINE IS ESSENTIAL SINCE
INEXPERIENCED STUDENT PILOTS UTILIZE THE AIRCRAFT. ACCORDINGLY, SAFETY
OF PERSONNEL AND EQUIPMENT IS OF PARTICULAR SIGNIFICANCE. FAILURE OF AN
OVERHAUL CONTRACTOR TO PERFORM SATISFACTORILY IN EITHER THE AREAS OF
QUALITY OR TIMELINESS WOULD SERIOUSLY IMPACT UNDERGRADUATE PILOT
TRAINING.
"(2) THE J69-T9 SERIES ENGINES WERE CONVERTED TO THE J69-T25
CONFIGURATION DURING A CONVERSION PROGRAM STARTING IN 1959 AND COMPLETED
IN 1961. AT THIS TIME DEPOT LEVEL MAINTENANCE WAS NOT ANTICIPATED. THE
MAINTENANCE OF THESE ENGINES WAS LIMITED TO JET ENGINE BASE MAINTENANCE
IN THE FIELD. IN 1966 A DECISION WAS MADE TO RETURN ALL OF THESE
ENGINES TO THE PRIME MANUFACTURER FOR A ONE-TIME RECYCLING TO UPGRADE
THE QUALITY AND RELIABILITY OF THE ENGINE. THIS DECISION WAS MADE
BECAUSE OF UNFORESEEN MAINTENANCE DIFFICULTIES AND ENGINE FATIGUE.
THESE ENGINES HAD BEEN MAINTAINED AT FIELD LEVEL FOR 5 TO 8 YEARS AND
THE QUALITY HAD DETERIORATED TO A DEGREE WHERE THE RELIABILITY OF THE
ENGINE TO PERFORM ITS ASSIGNED MISSION WAS QUESTIONABLE.
"(3) A FEW EXAMPLES OF SPECIFIC PARTS WHERE DIFFICULTIES AND FATIGUE
WERE BEING EXPERIENCED ARE:
(A) THE CONSTANT WELD REPAIR OF THE REAR FLANGE OF THE TURBINE
HOUSING RESULTED IN THE INABILITY TO HOLD THE CENTER LINE OF THE ENGINE
WHICH IN TURN DIRECTLY AFFECTED THE CRITICAL ALIGNMENT OF THE TURBINE
SHAFT, (B) CRACKS APPEARING AT THE 7 AND 11 O'CLOCK POSITIONS IN THE
COMPRESSOR HOUSINGS, AND (C) NUMEROUS CRACKS FOUND IN THE TURBINE
NOZZLES, EXHAUST DIFFUSERS, AND THE OUTER COMBUSTOR SHELLS.
"(4) THE J69 IS A FRENCH-DESIGNED ENGINE PRODUCED UNDER LICENSE BY
TELEDYNE CAE. IT HAS NO COMMERCIAL APPLICATION. WHILE THEY MAY BE
DEVELOPED IN TIME, REQUIRED CONTRACTOR SKILLS, KNOW-HOW, SPECIALIZED
TOOLING AND TEST EQUIPMENT ARE NOT IMMEDIATELY AVAILABLE ON THE OPEN
MARKET. IF AWARD TO A NEW SOURCE IS MADE, THE PRIME CONTRACTOR WOULD
DISCONTINUE HIS OVERHAUL LINE AND IF THE COMPETITIVE SOURCE SHOULD FAIL,
BACK-UP CAPABILITY IS NOT READILY AVAILABLE.
"(5) IT IS ESSENTIAL ALL ENGINES BE RECYCLED THROUGH THE PRIME
CONTRACTOR FOR FIRST OVERHAUL TO PROVIDE A HIGH QUALITY ENGINE WITH
MAXIMUM RELIABILITY. THE CONDITION OF ENGINES INPUT FOR OVERHAUL WILL
BE EXTREMELY VARIED. SOME MAY REQUIRE EXTENSIVE REPAIR AND/OR
REPLACEMENT OF SUBSTANTIAL NUMBERS OF COMPONENTS AND PARTS WHILE OTHERS
MAY REQUIRE ONLY NORMAL REPAIRS. IN ADDITION, TOLERANCES AT TIME OF
OVERHAUL ARE MUCH MORE CRITICAL THAN THOSE INVOLVED IN JET ENGINE BASE
MAINTENANCE. WEAR FACTORS VARY FROM ENGINE TO ENGINE. THE ENGINEERING
DESIGN BACKGROUND AND EXPERTISE OF THE PRIME CONTRACTOR IS IMPERATIVE TO
ACHIEVE A UNIFORMLY HIGH DEGREE OF QUALITY AND RELIABILITY AT FIRST
OVERHAUL. THE REMAINING ENGINES PROPOSED TO BE RECYCLED URGENTLY
REQUIRE OVERHAUL BY THE PRIME CONTRACTOR SINCE THEY HAVE ACCUMULATED
HIGH OPERATING HOURS INCREASING PROBABILITY OF FAILURE. THIS PROPOSED
CONTRACT WITH TELEDYNE CAE CONSTITUTES THE FINAL RECYCLING EFFORT FOR
THESE ENGINES."
IN YOUR LETTER OF JANUARY 18, 1971, YOU DISAGREE WITH THE
JUSTIFICATION ADVANCED BY THE AIR FORCE FOR SOLE-SOURCE NEGOTIATION WITH
TELEDYNE. YOU STATE THAT JET POWER CAN OFFER THE GOVERNMENT A
SUBSTANTIAL REDUCTION IN THE PRICE OF THE OVERHAUL; THAT JET POWER IS A
SECOND SOURCE OF SUPPLY IN THE EVENT UNFORESEEN CIRCUMSTANCES CAUSE THE
INTERRUPTION OF TELEDYNE PRODUCTION; AND THAT FRESH IDEAS EMANATING
FROM JET POWER FOR THE ENGINE OVERHAUL PROGRAM MAY POSSIBLY IMPROVE THE
RELIABILITY OF THE ENGINE. HOWEVER, AS INDICATED ABOVE, THE AIR FORCE
CONSIDERS THE SITUATION TO BE SO CRITICAL THAT IT MUST REQUIRE THE
IMMEDIATE WORK TO BE ACCOMPLISHED BY THE ENGINE MANUFACTURER TO INSURE
THE RELIABILITY OF THE ENGINES. IN THAT REGARD, OUR OFFICE HAS HELD
THAT IT IS THE RESPONSIBILITY OF THE CONTRACTING AGENCIES OF THE
GOVERNMENT TO DETERMINE, AS HERE, WHEN THE NEEDS OF THE GOVERNMENT
REQUIRE A SOLE-SOURCE PROCUREMENT UNDER 10 U.S.C. 2304(A)(10).
B-170855, DECEMBER 21, 1970, AND B-156448, JULY 9, 1965. FURTHER, UNDER
10 U.S.C. 2310(B), THE FINDINGS ISSUED BY THE CONTRACTING OFFICER AS A
BASIS FOR DETERMINING THAT THE PROCUREMENT SHOULD BE NEGOTIATED WITH
TELEDYNE PURSUANT TO 10 U.S.C. 2304(A)(10) ARE FINAL.
YOU HAVE ALSO QUESTIONED THE SOLE-SOURCE PROCUREMENT BECAUSE YOU
STATE THAT THE SMALL BUSINESS ADMINISTRATION (SBA) IS PREPARED TO ISSUE
A CERTIFICATE OF COMPETENCY TO JET POWER. BY ENACTMENT OF SECTION
8(B)(7) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637(B)(7), THE CONGRESS HAS
LIMITED THE AUTHORITY OF ADMINISTRATIVE OFFICERS TO MAKE FINAL
DETERMINATIONS OF RESPONSIBILITY OF SMALL BUSINESS BIDDERS BY PROVIDING
THAT WHERE A SMALL BUSINESS CONCERN IS CERTIFIED BY SBA TO BE A
COMPETENT GOVERNMENT CONTRACTOR WITH RESPECT TO CAPACITY AND CREDIT, THE
PROCURING OFFICERS OF THE GOVERNMENT MUST ACCEPT SUCH CERTIFICATION AS
CONCLUSIVE. HOWEVER, THIS LIMITATION OF THE ADMINISTRATIVE AUTHORITY
RELATES ONLY TO DETERMINATIONS OF "CAPACITY AND CREDIT." IN THIS
CONNECTION, IT SHOULD BE NOTED THAT ASPR 1-705.4(C), IN RECOGNITION OF
THE SBA AUTHORITY, PROVIDES THAT IF A BID OR PROPOSAL OF A SMALL
BUSINESS CONCERN IS TO BE REJECTED "SOLELY" BECAUSE THE CONTRACTING
OFFICER HAS DETERMINED THE CONCERN TO BE NONRESPONSIBLE AS TO CAPACITY
OR CREDIT, THE MATTER SHALL BE REFERRED TO SBA. THE REGULATION
OBVIOUSLY CONTEMPLATES REFERRAL TO SBA WHEN LACK OF CAPACITY OR CREDIT
OF THE OFFEROR IS THE SOLE BASIS FOR REJECTION OF THE OFFER. THAT IS
NOT THE SITUATION IN THE INSTANT CASE. HERE, THE CONTRACTING AGENCY HAS
DETERMINED THAT THE PROCUREMENT REQUIRES THE SERVICES OF THE
MANUFACTURER OF THE ENGINES TO THE EXCLUSION OF ALL OTHERS AND SHOULD BE
RESTRICTED TO THAT FIRM IN ACCORDANCE WITH ASPR 3-210.2(I). ON THAT
BASIS, THE PROCUREMENT HAS BEEN SET ASIDE FOR TELEDYNE ALONE.
THEREFORE, THE CERTIFICATE OF COMPETENCY PROCEDURES ARE INAPPLICABLE TO
THIS PROCUREMENT.
IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS TO OBJECT TO THE
SOLE-SOURCE PROCUREMENT FROM TELEDYNE AND YOUR PROTEST IS ACCORDINGLY
DENIED.
HOWEVER, IT IS OUR UNDERSTANDING THAT THE IMMEDIATE PROCUREMENT WILL
COMPLETE THE RECYCLING OF THE J69 ENGINE INVENTORY AND THAT FUTURE AIR
FORCE CONTRACTS FOR MAINTENANCE OF THE J69 ENGINE WILL BE MADE ON A
COMPETITIVE BASIS. THE SOLICITATION FOR A COMPETITIVE PROCUREMENT UNDER
THE AFLC 5-YEAR POLICY IS TARGETED FOR ISSUANCE IN FEBRUARY 1971, WITH
AWARD OF A CONTRACT CONTEMPLATED IN AUGUST 1971.
B-171122, FEB 9, 1971
BID PROTEST - CURRENT LITIGATION
BECAUSE IT IS CONTRARY TO GAO POLICY TO RENDER A DECISION ON A BID
PROTEST WHERE THE MATERIAL ISSUES ARE ALSO INVOLVED IN LITIGATION, AND
PROTESTANT HAS FILED AN ACTION IN THE U.S. DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS SEEKING AN INJUNCTION TO COMPEL THE
SECRETARY OF TRANSPORTATION AND THE FAA TO CANCEL THE AWARD TO GENERAL
ELECTRICAL CONTRACTORS, INC., GAO IS CLOSING THE FILE ON THE PROTEST
WITHOUT FURTHER ACTION.
TO PREMIER ELECTRICAL CONSTRUCTION CO.:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 23, 1970, AND
SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST OF THE AWARD OF A
CONTRACT TO GENERAL ELECTRICAL CONTRACTORS, INC. (GENERAL), UNDER
SOLICITATION NO. CEOO-1-17, ISSUED BY THE FEDERAL AVIATION
ADMINISTRATION.
IT HAS COME TO OUR ATTENTION THAT YOUR COMPANY FILED AN ACTION IN THE
U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN
DIVISION, ON DECEMBER 9, 1970 REQUESTING, INTER ALIA, AN INJUNCTION TO
COMPEL THE SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND THE
ADMINISTRATOR OF THE FEDERAL AVIATION ADMINISTRATION TO CANCEL THE AWARD
TO GENERAL AND GRANT THE CONTRACT TO YOUR CONCERN.
SINCE IT IS CONTRARY TO THE POLICY OF THIS OFFICE TO RENDER A
DECISION ON A BID PROTEST WHERE THE MATERIAL ISSUES ARE ALSO INVOLVED IN
LITIGATION IN A COURT OF COMPETENT JURISDICTION, AS IN THE SUBJECT CASE,
PLEASE BE ADVISED THAT WE ARE CLOSING OUR FILE ON YOUR PROTEST WITHOUT
FURTHER ACTION.
B-171411, FEB 9, 1971
REIMBURSEMENT OF EXPENSES - APPLICABLE TIME LIMIT
DECISION DENYING REIMBURSEMENT TO PAUL T. WIENER, AN EMPLOYEE OF THE
FOOD AND DRUG ADMINISTRATION, HEW, FOR TRAVEL AND TRANSPORTATION
EXPENSES AND REAL ESTATE EXPENSES INCIDENT TO A CHANGE OF OFFICIAL
STATION.
NOTWITHSTANDING CLAIMANT'S GOOD-FAITH EFFORT TO REDUCE HIS MOVING
EXPENSES, THE EXPENSES, INCURRED IN SEPTEMBER AND OCTOBER 1970 INCIDENT
TO A CHANGE OF OFFICIAL STATION EFFECTIVE JUNE 4, 1967, DO NOT FALL
WITHIN THE APPLICABLE 2-YEAR LIMIT FOR TRAVEL AND TRANSPORTATION AND THE
1-YEAR LIMIT (PLUS 1-YEAR EXTENSION) FOR REAL ESTATE EXPENSES AS
SPECIFIED IN BOB CIR. NO. A-56, WHICH CONTAINS STATUTORY REGULATIONS
HAVING THE FORCE AND EFFECT OF LAW WHICH CANNOT BE WAIVED. THE
EXPENSES, THEREFORE MAY NOT BE REIMBURSED.
TO MR. HAROLD R. HEISER:
WE REFER TO YOUR LETTER OF OCTOBER 21, 1970, AND ENCLOSURES,
REQUESTING OUR DECISION AS TO WHETHER CERTAIN ITEMS ON A VOUCHER IN
FAVOR OF MR. PAUL T. WIENER, AN EMPLOYEE OF THE FOOD AND DRUG
ADMINISTRATION (FDA), DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
(HEW), MAY BE CERTIFIED FOR PAYMENT. THE ITEMS IN QUESTION REPRESENT
TRAVEL AND TRANSPORTATION EXPENSES AND REAL ESTATE EXPENSES INCURRED BY
MR. WIENER IN CONNECTION WITH HIS CHANGE OF OFFICIAL STATION FROM
BROOKLYN, NEW YORK, TO NEWARK, NEW JERSEY, EFFECTIVE JUNE 4, 1967.
THE FILE DISCLOSES THAT THE CLAIMED EXPENSES OF MR. WIENER WERE
INCURRED IN SEPTEMBER AND OCTOBER 1970 IN EXCESS OF THE APPLICABLE
2-YEAR TIME LIMIT FOR TRAVEL AND TRANSPORTATION AND THE 1-YEAR (PLUS
1-YEAR EXTENSION) TIME LIMIT FOR REIMBURSEMENT OF REAL ESTATE EXPENSES
AS SPECIFIED IN BUREAU OF THE BUDGET CIRCULAR NO. A-56. THE CIRCULAR
CONTAINS STATUTORY REGULATIONS WHICH HAVE THE FORCE AND EFFECT OF LAW
AND, THEREFORE, THE TIME LIMITATIONS SET FORTH THEREIN MAY NOT BE
WAIVED, MODIFIED, OR EXTENDED BY THIS OFFICE. SEE OUR DECISIONS
B-167385, PUBLISHED AT 49 COMP. GEN. 145 (1969); B-166608, APRIL 22,
1969; B-168914, JULY 31, 1970; B-168901, FEBRUARY 27, 1970; AND
B-164201, MAY 27, 1968, COPIES ENCLOSED. THIS IS SO REGARDLESS OF THE
FACT THAT MR. WIENER ACTED IN GOOD FAITH IN HIS EFFORTS TO REDUCE HIS
MOVING EXPENSES.
THE VOUCHER IS RETURNED HEREWITH AND MAY NOT BE CERTIFIED FOR
PAYMENT.
B-171479, FEB 9, 1971
BID PROTEST - ISSUANCE OF WORK ORDERS
DECISION CONCERNING PROTESTANT'S ALLEGATION THAT THE PROCUREMENT
DIVISION AT FORT HUACHUCA HAS IMPROPERLY FAILED TO ISSUE WORK ORDERS
COVERING GROUND MAINTENANCE SERVICES CONTRARY TO THE REQUIREMENTS OF THE
CONTRACT.
IT IS POINTED OUT THAT THE RESOLUTION OF ANY FACTUAL DISPUTES ARISING
UNDER THE CONTRACT IS A MATTER FOR THE CONTRACTING OFFICER UNDER THE
"DISPUTES" CLAUSE, AND PROCEDURES THEREIN MUST BE EXHAUSTED BEFORE
RECOURSE TO EITHER GAO OR THE COURTS.
TO CALTEX ENGINEERING CO.:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 2, 1970, WITH
ENCLOSURES, WHICH ALLEGES THAT THE PROCUREMENT DIVISION AT FORT HUACHUCA
HAS IMPROPERLY FAILED TO ISSUE WORK ORDERS COVERING GROUND MAINTENANCE
SERVICES AT THE ABOVE INSTALLATION CONTRARY TO THE TERMS OF YOUR
REQUIREMENTS CONTRACT NO. DAEA18-70-D-0282.
ENCLOSED IS A COPY OF THAT PART OF THE ADMINISTRATIVE REPORT TO OUR
OFFICE WHICH EXPLAINS WHY THE SERVICES IN QUESTION WERE NOT ORDERED
UNDER YOUR CONTRACT. ANY COMMENTS WE WOULD MAKE WITH RESPECT TO THE
GOVERNMENT'S ACTIONS UNDER THE CONTRACT WOULD NECESSARILY BE PREMISED ON
THOSE ADMINISTRATIVE COMMENTS. SINCE, FROM THE CONTENTS OF YOUR LETTER,
IT DOES NOT APPEAR THAT YOU WOULD BE IN AGREEMENT WITH THE GOVERNMENT'S
FACTUAL PRESENTATION, WE MAY CONCLUDE THAT THERE EXISTS THE POSSIBILITY
OF FACTUAL DISPUTES.
IN VIEW THEREOF, YOU ARE ADVISED THAT THE RESOLUTION OF ANY FACTUAL
DISPUTES ARISING UNDER YOUR CONTRACT IS A MATTER FOR THE CONTRACTING
OFFICER TO CONSIDER AND DETERMINE UNDER THE "DISPUTES" CLAUSE OF YOUR
CONTRACT (GENERAL PROVISION 12). MOREOVER, WHERE, AS HERE, THE
"DISPUTES" CLAUSE IS APPLICABLE, THE PROCEDURES THEREIN MUST BE
EXHAUSTED BEFORE RECOURSE MAY BE MADE TO EITHER OUR OFFICE OR THE
COURTS. SEE 37 COMP. GEN. 568 (1958); B-164856, AUGUST 21, 1968.
B-171609, FEB 9, 1971
CONTRACTS - DELETED INFORMATION
DECISION THAT CONDUCTRON CORPORATION IS NOT ENTITLED TO INFORMATION
RELATING TO PROPOSED PRICES OF PROTESTANT, LINK DIVISION OF
SINGER-GENERAL PRECISION, INC.
ALTHOUGH ASPR 2-407.8 IS CONCERNED WITH THE RIGHT OF OTHER BIDDERS TO
SUBMIT THEIR VIEWS AND OTHER RELATED INFORMATION, THE PROCEDURES OF GAO
AS SET OUT IN 4 CFR 81.6(A)(4) GENERALLY EXEMPT FROM DISCLOSURE
INFORMATION WHICH WOULD NOT CUSTOMARILY BE MADE PUBLIC BY THE PERSON
FROM WHOM IT IS OBTAINED, AND INFORMATION SUBMITTED IN CONFIDENCE.
SINCE BOTH OF THESE FACTORS APPLY TO THE INFORMATION SOUGHT AND BECAUSE
LINK SPECIFICALLY ASKED THAT THE SUBJECT MATTER NOT BE MADE PUBLIC, THE
REQUEST FOR THE MATERIAL DELETED FROM LINK'S PROTEST LETTER IS DENIED.
TO CONDUCTRON CORPORATION:
THIS IS IN REPLY TO YOUR TELEGRAM OF JANUARY 21, 1971, REQUESTING THE
RELEASE OF AN UNEDITED COPY OF THE PREAWARD PROTEST FILED HERE ON
JANUARY 14, 1971, BY THE LINK DIVISION OF SINGER-GENERAL PRECISION,
INC., AGAINST AN AWARD TO ANY OTHER OFFEROR UNDER REQUEST FOR PROPOSALS
NO. 3357-70-R-0731, ISSUED BY THE AERONAUTICAL SYSTEMS DIVISION, AIR
FORCE SYSTEMS COMMAND, DAYTON, OHIO.
ON JANUARY 15, 1971, YOUR FIRM WAS FURNISHED A COPY OF THE PROTEST
LETTER FROM WHICH, AT THE REQUEST OF LINK, THERE HAD BEEN DELETED ALL
INFORMATION RELATING TO THE PROTESTOR'S PROPOSED PRICE.
YOU NOW REQUEST THAT YOU BE PROVIDED THE DELETED PORTIONS ON THE
BASIS THAT THE RIGHT OF OTHER BIDDERS TO SUBMIT THEIR VIEWS AND OTHER
RELATED INFORMATION IS GRANTED UNDER ARMED SERVICES PROCUREMENT
REGULATION (ASPR) 2-407.8, AND THAT THE DELETION OF A PORTION OF THE
DATA FURNISHED IN THE PROTEST COULD AFFECT SUCH RIGHT.
IN SUPPORT OF YOUR REQUEST YOU CITE THE PROCEDURES OF THIS OFFICE
CONCERNING THE AVAILABILITY OF OUR RECORDS TO THE PUBLIC, AS SET OUT IN
4 CFR 81.6(A)(4). HOWEVER, THE CITED REGULATION CONCERNS RECORDS THAT
ARE GENERALLY EXEMPT FROM DISCLOSURE, AND INCLUDES THEREUNDER
INFORMATION WHICH WOULD NOT CUSTOMARILY BE MADE PUBLIC BY THE PERSON
FROM WHOM IT WAS OBTAINED, AND INFORMATION SUBMITTED IN CONFIDENCE.
SINCE BOTH OF THOSE FACTORS APPLY TO THE DATA YOU HAVE REQUESTED, WE
MUST CONCLUDE THAT THE REGULATION DOES NOT SUPPORT YOUR POSITION.
ADDITIONALLY, YOUR ATTENTION IS INVITED TO ASPR 3-507.2(A) WHICH
EXPRESSLY PROHIBITS THE RELEASE OF INFORMATION CONTAINED IN PROPOSALS
PRIOR TO AWARD, AND TO OUR DECISION TO THE SECRETARY OF THE AIR FORCE,
B-168485(2), MARCH 30, 1970, COPY ENCLOSED, WHEREIN WE CRITICIZED THE
DISCLOSURE OF AN OFFEROR'S PRICE PRIOR TO AWARD OF A NEGOTIATED CONTRACT
AND REQUESTED THAT SUCH DISCLOSURES BE AVOIDED IN THE FUTURE.
IN VIEW OF THE FOREGOING, AND SINCE LINK SPECIFICALLY ASKED IN THE
SUBMISSION OF ITS PROTEST THAT THE SUBJECT MATERIAL NOT BE DISCLOSED
OUTSIDE THE GOVERNMENT AGENCIES CONCERNED, AND SUCH REQUEST IS
CONSIDERED REASONABLE, WE DO NOT REGARD THE MATERIAL AS BEING AVAILABLE
FOR PUBLIC DISCLOSURE.
ACCORDINGLY, YOUR REQUEST FOR THE MATERIAL DELETED FROM LINK'S
PROTEST LETTER OF JANUARY 14 IS DENIED.
B-171619, FEB 9, 1971
TRANSFERS - INCIDENTAL EXPENSES
DENIAL OF CLAIM OF NICHOLAS S. KMECZA FOR $315 PAID AS A SERVICE
CHARGE IN SECURING A LOAN FOR THE BUYER OF HIS HOME AT HIS OLD DUTY
STATION ATLANTA, GEORGIA, INCIDENT TO HIS TRANSFER TO ASHEVILLE, N.C.
THE INCLUSION, UNDER THE HEADING "SPECIAL STIPULATIONS", OF THE
HANDWRITTEN STATEMENT "SELLER TO PAY CLOSING COST" SUPPORTS THE VIEW
THAT THE CHARGE FOR WHICH REIMBURSEMENT IS SOUGHT IS CUSTOMARILY PAID BY
THE BUYER AND THEREFORE NOT REIMBURSABLE UNDER THE OPERATIVE PROVISIONS
OF BOB CIRCULAR NO. A-56.
TO MR. R. W. ACCARDI:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15, 1970, TRANSMITTING A
COPY OF A VOUCHER IN FAVOR OF MR. NICHOLAS S. KMECZA WHEREIN HE MAKES
RECLAIM OF CERTAIN REAL ESTATE (SELLING) EXPENSES IN CONNECTION WITH A
TRANSFER OF OFFICIAL STATION.
MR. KMECZA WAS TRANSFERRED FOR PERMANENT DUTY FROM ATLANTA, GEORGIA,
TO ASHEVILLE, NORTH CAROLINA, TO REPORT FOR DUTY ON APRIL 20, 1970. AS
AN INCIDENT TO SUCH TRANSFER HE SOLD HIS RESIDENCE IN ATLANTA, THEREBY
INCURRING VARIOUS EXPENSES INCIDENT THERETO FOR WHICH HE SOUGHT
REIMBURSEMENT. AMONG THESE WAS A CHARGE OF $512 WHICH HE PAID AS AN
"INITIAL SERVICE CHARGE" FOR THE SECURING OF A LOAN BY THE BUYER OF THE
RESIDENCE. THIS SUM WAS DEDUCTED FROM THE PAYMENT OF MR. KMECZA'S
ORIGINAL CLAIM. THE "INITIAL SERVICE CHARGE" IS DESCRIBED BY THE LENDER
AS CONSISTING OF:
" *** THE COST OF PUTTING THE LOAN ON OUR BOOKS, INVOLVING APPRAISAL
FEES, CREDIT REPORT, PREPARATION FOR THE CLOSING AND SERVICING OF THE
LOAN. *** " MR. KMECZA NOW RECLAIMS THE SUM OF $315, REPRESENTING A
PORTION OF THE $512 SO DEDUCTED.
SECTION 4.2(D) OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, AS REVISED
JUNE 26, 1969, PROVIDES THAT, IN THE CASE OF A SALE OF RESIDENCE,
CHARGES OF THE NATURE HEREIN INVOLVED ARE REIMBURSABLE ONLY TO THE
EXTENT THAT THEY ARE CUSTOMARILY PAID BY THE SELLER IN THE AREA OF THE
OLD OFFICIAL STATION. WHEN THE COSTS IN QUESTION ARE NORMALLY
ASSOCIATED WITH THE BUYER, CLAIMANT BEARS THE BURDEN OF SHOWING THAT, IN
THE AREA WHERE THE RESIDENCE IS LOCATED, PAYMENT IS CUSTOMARILY MADE BY
THE SELLER. SEE B-164181, JULY 22, 1968; B-167924, OCTOBER 14, 1969.
IT APPEARS FROM THE RECORD THAT THE CHARGES FOR WHICH REIMBURSEMENT IS
PRESENTLY SOUGHT ARE CUSTOMARILY PAID BY THE BUYER IN THE ATLANTA AREA.
THIS CONCLUSION IS SUPPORTED NOT ONLY BY YOUR LETTER OF DECEMBER 15,
1970, BUT ALSO BY THE HANDWRITTEN INCLUSION OF THE STATEMENT "SELLER TO
PAY CLOSING COST" IN THE SALES AGREEMENT, UNDER THE HEADING "SPECIAL
STIPULATIONS," INDICATING THAT THESE COSTS ARE CUSTOMARILY THOSE OF THE
BUYER. SEE B-164181 ABOVE. FURTHERMORE, EVEN IF REIMBURSEMENT WERE NOT
OTHERWISE PRECLUDED THERE WOULD BE NO AUTHORITY FOR ALLOWANCE OF
PORTIONS OF THE SUBJECT ITEM WHICH ARE CLASSIFIED AS FINANCE CHARGES
UNDER SECTION 106 OF THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW
90-321. SEE 169475, MAY 14, 1970.
ACCORDINGLY, THE CLAIM MAY NOT BE ALLOWED.
B-171646, FEB 9, 1971
BID PROTEST - BIDDER RESPONSIBILITY
ADVISING THAT WHEN AN OFFICIAL DETERMINES THE RESPONSIBILITY OF A
BIDDER, SUCH A DETERMINATION CANNOT BE OVERTHROWN UNLESS IT CAN BE HELD
THAT THE DETERMINATION WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT.
THEREFORE, CONTRACTING OFFICER'S DETERMINATION THAT WIBES MANUFACTURING
COMPANY WAS ABLE AND QUALIFIED TO PERFORM A CONTRACT FOR FURNISHING
OUTDOOR ORNAMENTAL LANTERN ASSEMBLIES FOR THE LIBRARY OF CONGRESS IS
SUFFICIENT TO OVERCOME THE PROTEST.
TO MR. CAMPIOLI:
REFERENCE IS MADE TO YOUR LETTER OF JANUARY 5, 1971, REGARDING A
PROPOSED AWARD TO THE LOW BIDDER UNDER AN INVITATION FOR BIDS COVERING
JOB NO. 7088.
THE SUBJECT INVITATION WAS ISSUED ON NOVEMBER 24, 1970, SOLICITING
BIDS FOR FURNISHING 20 OUTDOOR ORNAMENTAL LANTERN AND LIGHT STANDARD
ASSEMBLIES FOR THE GROUNDS OF THE LIBRARY OF CONGRESS. SIX BIDS WERE
RECEIVED AND OPENED ON DECEMBER 15, 1970. THE LOWEST BID IN THE AMOUNT
OF $59,380 WAS SUBMITTED BY THE WIBES MANUFACTURING COMPANY. THE OTHER
FIVE BIDS RANGED FROM $82,000 TO $153,700.
YOU STATE THAT BECAUSE THE WIBES BID WAS CONSIDERABLY BELOW THE
SECOND LOW BID OF SPRING CITY FOUNDRY CO. IN THE AMOUNT OF $82,000,
WIBES WAS REQUESTED BY TELEPHONE TO VERIFY THE BID PRICE AND CONFIRMED
THAT IT WAS CORRECT.
BY LETTERS OF DECEMBER 18 AND 29, 1970, SPRING CITY FOUNDRY CO.
PROTESTED AGAINST AWARD TO WIBES ON THE GROUND THAT THE COMPANY WAS NOT
QUALIFIED TO PERFORM THE REQUIRED WORK BECAUSE OF INADEQUATE FINANCIAL
ABILITY AND PERSONNEL.
YOU STATE THAT MR. STEINMETZ, AN OFFICER OF THE WIBES MANUFACTURING
COMPANY, IS KNOWN TO YOUR OFFICE TO HAVE ENGAGED IN THE CASTING OF
ORNAMENTAL BRONZE FIXTURES FOR A NUMBER OF DECADES AS STEINMETZ
MANUFACTURING COMPANY; THAT MR. STEINMETZ SOLD HIS BUSINESS IN 1964 TO
PRESCOLITE CORPORATION WITH THE UNDERSTANDING THAT HE WOULD CONTINUE TO
HANDLE THE ORNAMENTAL BRONZE CASTING WORK FOR PRESCOLITE; AND THAT WHEN
PRESCOLITE DISCONTINUED ORNAMENTAL BRONZE CASTING WORK, MR. STEINMETZ
LEFT PRESCOLITE AND FORMED A FAMILY CORPORATION UNDER THE NAME OF WIBES
MANUFACTURING COMPANY TO CONTINUE THE TYPE OF BRONZE CASTING WORK HE HAS
ALWAYS ENGAGED IN. YOU ALSO STATE THAT WIBES IN THE PAST HAS COMPLETED
SEVERAL CONTRACTS WITH YOUR OFFICE FOR ORNAMENTAL CAST BRONZE FIXTURES
IN A VERY SATISFACTORY MANNER; THAT YOUR OFFICE IS SATISFIED THAT WIBES
IS WELL QUALIFIED FOR THE WORK; AND THAT YOUR OFFICE HAS BEEN ASSURED
THAT WIBES WILL FURNISH THE REQUIRED PERFORMANCE BOND FOR COMPLETION OF
THE CONTRACT.
YOU INDICATE THAT BASED UPON THE FOREGOING YOUR OFFICE IS PREPARED TO
MAKE AN AWARD TO WIBES. HOWEVER, BECAUSE OF THE PROTEST AGAINST SUCH AN
AWARD, YOU HAVE SUBMITTED THE MATTER TO OUR OFFICE.
WITH REGARD TO THE DETERMINATION OF THE RESPONSIBILITY OF A
PROSPECTIVE CONTRACTOR, THE AUTHORITIES ARE IN AGREEMENT THAT THE
OFFICERS IN WHOM THE POWER IS VESTED TO DETERMINE RESPONSIBILITY MUST
DETERMINE THE FACTS AND SUCH DETERMINATION CANNOT BE SET ASIDE UNLESS
THE ACTION WAS ARBITRARY, CAPRICIOUS, OR FRAUDULENT. DETERMINATION OF
THE LOWEST RESPONSIBLE BIDDER IS TO BE MADE BY THE AUTHORIZED OFFICIAL
OF THE CONTRACTING AGENCY, WHO IS REQUIRED TO ACT FAIRLY UPON REASONABLE
INFORMATION WHICH SUPPORTS THE DETERMINATION MADE. WHEN SUCH OFFICIAL
DETERMINES THE RESPONSIBILITY OF A BIDDER, SUCH DETERMINATION CANNOT BE
OVERTHROWN BY THE COURTS OR OUR OFFICE UNLESS IT CAN BE HELD THAT THE
DETERMINATION WAS ARBITRARY, CAPRICIOUS, OR FRAUDULENT. SEE MCQUILLIN,
MUNICIPAL CORPORATIONS, 3RD ED., VOL. 10, SEC. 29.73, AND THE CASES
THEREIN CITED; 47 COMP. GEN. 373, 376 (1968); 38 ID. 131 (1958); 33
ID. 549 (1954); BROWN V CITY OF PHOENIX, 272 P. 2D 358 (1954);
MCNICHOLS V CITY AND COUNTY OF DENVER, 274 P. 2D 317 (1954).
THE DETERMINATION TO AWARD THE CONTRACT TO THE WIBES MANUFACTURING
COMPANY IS NOT WITHOUT FOUNDATION. THEREFORE, OUR OFFICE HAS NO LEGAL
OBJECTION TO THE PROPOSED AWARD.
B-171694, FEB 9, 1971
CIVILIAN EMPLOYEE - LIVING QUARTERS ALLOWANCE
ADVISING THAT SINCE CORDELL W. MCLEOD MOVED TO GERMANY TO FIND
EMPLOYMENT, AND THEREAFTER, WAS EMPLOYED BY THE ARMY, BUT DID NOT APPLY
FOR REEMPLOYMENT UNTIL AFTER HIS ARRIVAL THERE AND WAS NOT EMPLOYED BY
THE GOVERNMENT AT THE TIME OF HIS MOVE, HE IS NOT ENTITLED TO A LIVING
QUARTERS ALLOWANCE UNDER REGULATIONS PROMULGATED BY SECRETARY OF STATE
PURSUANT TO 5 U.S.C. 5923.
TO MR. BENNY L. KASS:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 13, 1971, WHEREIN
AMONG OTHER THINGS YOU REQUEST A REVIEW OF THE ACTION OF OUR CLAIMS
DIVISION IN DENYING THE CLAIM OF MR. CORDELL W. MCLEOD FOR LIVING
QUARTERS ALLOWANCE DURING THE PERIOD MARCH 28, 1963, TO OCTOBER 1968 AS
AN EMPLOYEE OF THE DEPARTMENT OF THE ARMY.
IN HIS ORIGINAL CLAIM DATED JANUARY 15, 1969, MR. MCLEOD DESCRIBED
THE CIRCUMSTANCES UNDER WHICH HE BECAME AN EMPLOYEE OF THE DEPARTMENT OF
THE ARMY IN GERMANY AS FOLLOWS:
"MY FAMILY AND I WENT TO GERMANY ON OCTOBER 29, 1962 AND I TOOK MY
CIVIL SERVICE RATINGS WITH ME.
I APPLIED FOR FILE CLERK WORK WITH THE CIVILIAN PERSONNEL OFFICE
(CPO), U.S. ARMY, IN STUTTGART, GERMANY *** IN NOV. 1962."
MR. MCLEOD FURTHER EXPLAINED THAT HE DID NOT IMMEDIATELY OBTAIN THE
TYPE OF EMPLOYMENT HE SOUGHT AND TOOK A POSITION WITH THE EUROPEAN
EXCHANGE SYSTEM, A NONAPPROPRIATED FUND AGENCY. ON MARCH 29, 1963, HE
WAS APPOINTED TO A TEMPORARY POSITION AT THE QUARTERMASTER LAUNDRY, AND
IN SEPTEMBER 1963 HE APPARENTLY WAS TRANSFERRED TO A POSITION WITH
PERMANENT STATUS WHICH HE HELD UNTIL HIS RESIGNATION IN OCTOBER 1968.
ALTHOUGH MR. MCLEOD STATES THAT HE WAS ADVISED AT THE TIME OF THE
MARCH 1963 APPOINTMENT AND REPEATEDLY THEREAFTER THAT HE WAS NOT
ENTITLED TO LIVING QUARTERS ALLOWANCE, HE NOW CLAIMS THAT ALLOWANCE FOR
THE PERIOD MARCH 29, 1963, TO OCTOBER 1968.
SECTION 5923 OF TITLE 5, UNITED STATES CODE, WHICH PROVIDES THE
AUTHORITY UNDER WHICH LIVING QUARTERS ALLOWANCE MAY BE PAID EMPLOYEES OF
THE GOVERNMENT IN FOREIGN AREAS, WAS ENACTED AS SECTION 211 OF PUBLIC
LAW 86-707, OVERSEAS DIFFERENTIALS AND ALLOWANCES ACT. SECTION 203 OF
THAT ACT PROVIDED THAT THE ALLOWANCES AUTHORIZED THEREIN " *** SHALL BE
PAID IN ACCORDANCE WITH REGULATIONS PRESCRIBED BY THE PRESIDENT *** ."
SUBSEQUENTLY, BY EXECUTIVE ORDER NO. 10903, JANUARY 11, 1961, 26 F.R.
217 AS AMENDED, THE REGULATORY AUTHORITY OF THE PRESIDENT WAS DELEGATED
TO THE SECRETARY OF STATE.
UNDER THAT DELEGATION OF AUTHORITY, THE SECRETARY OF STATE HAS
PROMULGATED STANDARDIZED REGULATIONS (GOVERNMENT CIVILIANS, FOREIGN
AREAS) WHICH, BEING STATUTORY IN NATURE, GOVERN THE PAYMENT OF SUCH
ALLOWANCES AS THE LIVING QUARTERS ALLOWANCE MR. MCLEOD CLAIMS. THE
PERTINENT PORTION OF THE STANDARDIZED REGULATIONS IN EFFECT THROUGHOUT
THE PERIOD HERE IN QUESTION PROVIDES AS FOLLOWS:
"031 UNITED STATES CITIZEN EMPLOYEES
"031.1 QUARTERS ALLOWANCES
"031.11 EMPLOYEES RECRUITED IN THE UNITED STATES
"QUARTERS ALLOWANCES PRESCRIBED IN CHAPTER 100 MAY BE GRANTED TO
EMPLOYEES WHO WERE RECRUITED BY THE EMPLOYING GOVERNMENT AGENCY IN THE
UNITED STATES, THE COMMONWEALTH OF PUERTO RICO, THE CANAL ZONE, AND THE
POSSESSIONS OF THE UNITED STATES. ***
"031.12 EMPLOYEES RECRUITED OUTSIDE THE UNITED STATES
"QUARTERS ALLOWANCES PRESCRIBED IN CHAPTER 100 MAY BE GRANTED TO
EMPLOYEES *** RECRUITED OUTSIDE THE UNITED STATES, PROVIDED THAT
"A. THE EMPLOYEE'S ACTUAL PLACE OF RESIDENCE IN THE PLACE TO WHICH
THE QUARTERS ALLOWANCE APPLIES AT THE TIME OF RECEIPT THEREOF SHALL BE
FAIRLY ATTRIBUTABLE TO HIS EMPLOYMENT BY THE UNITED STATES GOVERNMENT;
AND
"C. PRIOR TO APPOINTMENT, THE EMPLOYEE WAS RECRUITED IN THE UNITED
STATES, THE COMMONWEALTH OF PUERTO RICO, THE CANAL ZONE, OR A POSSESSION
OF THE UNITED STATES, BY
"(1) THE UNITED STATES GOVERNMENT, INCLUDING ITS ARMED FORCES;
"(2) A UNITED STATES FIRM, ORGANIZATION, OR INTEREST;
"(3) AN INTERNATIONAL ORGANIZATION IN WHICH THE UNITED STATES
GOVERNMENT PARTICIPATES; OR
"(4) A FOREIGN GOVERNMENT;
AND HAD BEEN IN SUBSTANTIALLY CONTINUOUS EMPLOYMENT BY SUCH EMPLOYER
UNDER CONDITIONS WHICH PROVIDED FOR HIS RETURN TRANSPORTATION TO THE
UNITED STATES, THE COMMONWEALTH OF PUERTO RICO, THE CANAL ZONE, OR A
POSSESSION OF THE UNITED STATES; OR
"D. THE EMPLOYEE WAS TEMPORARILY IN THE FOREIGN AREA FOR TRAVEL OR
FORMAL STUDY AND IMMEDIATELY PRIOR TO SUCH TRAVEL OR STUDY HAD RESIDED
IN THE UNITED STATES, THE COMMONWEALTH OF PUERTO RICO, THE CANAL ZONE,
OR A POSSESSION OF THE UNITED STATES *** "
SINCE MR. MCLEOD WAS NOT EMPLOYED BY THE GOVERNMENT AT THE TIME HE
TRAVELED TO GERMANY WITH HIS FAMILY IN OCTOBER 1962 AND DID NOT APPLY
FOR SUCH EMPLOYMENT UNTIL AFTER HIS ARRIVAL IN THAT COUNTRY, HE CANNOT
BE SAID TO HAVE BEEN RECRUITED IN THE UNITED STATES, AS REQUIRED FOR
ELIGIBILITY UNDER SUBSECTION 031.11. AS FOR ENTITLEMENT UNDER
SUBSECTION 031.12, WE DO NOT FIND THAT MR. MCLEOD'S RESIDENCE IN
GERMANY WAS THE RESULT OF OR ATTRIBUTABLE TO HIS EMPLOYMENT BY THE
GOVERNMENT. IN FACT, IT APPEARS THAT THE REASON FOR HIS TRAVEL TO
GERMANY WAS TO SEEK EMPLOYMENT AND NOT BECAUSE HIS EMPLOYMENT STATUS
REQUIRED IT. FURTHER, WE AGREE WITH THE FINDING OF OUR CLAIMS DIVISION
THAT NOTHING IN THE RECORD SUGGESTS THAT PRIOR TO HIS APPOINTMENT MR.
MCLEOD HAD BEEN RECRUITED BY THE UNITED STATES GOVERNMENT, A UNITED
STATES FIRM, ORGANIZATION OR A FOREIGN GOVERNMENT FOR EMPLOYMENT ABROAD
UNDER CONDITIONS PROVIDING FOR HIS RETURN TO THE UNITED STATES. NEITHER
DOES IT APPEAR THAT MR. MCLEOD WAS IN GERMANY FOR PURPOSES OF TRAVEL OR
FORMAL STUDY.
SINCE MR. MCLEOD FAILED TO MEET THE REQUIREMENTS OF THE STANDARDIZED
REGULATIONS FOR ELIGIBILITY FOR A LIVING QUARTERS ALLOWANCE, NO
AUTHORITY EXISTED UNDER WHICH HE MIGHT HAVE BEEN PAID SUCH AN ALLOWANCE.
ACCORDINGLY, THE SETTLEMENT OF OUR CLAIMS DIVISION OF MARCH 19, 1970,
DENYING MR. MCLEOD'S CLAIM MUST BE AFFIRMED.
IN FURTHER RESPONSE TO YOUR INQUIRY CONCERNING PROCEDURES FOR
APPEALING DECISIONS OF THIS OFFICE, WE WOULD ADVISE THAT OUR DECISION ON
A CLAIM IS BINDING ON THE EXECUTIVE BRANCH OF THE GOVERNMENT AND THERE
IS, AS SUCH, NO APPEAL. HOWEVER, YOUR ATTENTION IS CALLED TO JUDICIAL
REMEDIES PROVIDED AT 28 U.S.C. 1346 AND 28 U.S.C. 1491 IN THE EVENT YOU
SHOULD DECIDE TO PURSUE THE MATTER FURTHER.
B-171753, FEB 9, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
DISCHARGE FROM THE PHILIPPINE SCOUTS ON BASIS THAT CLAIM WAS NOT
ASSERTED WITHIN 10 YEARS FROM THE DATE IT ACCRUED AS REQUIRED BY THE ACT
OF OCTOBER 9, 1940, 31 U.S.C. 71A.
TO MR. ZOSIMO VILLADAREZ:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 29, 1970,
ADDRESSED TO THE FINANCE CENTER, UNITED STATES ARMY, INDIANAPOLIS,
INDIANA, WHICH WAS FORWARDED TO THIS OFFICE FOR REPLY, CONCERNING YOUR
CLAIM FOR MUSTERING-OUT PAY IN THE AMOUNT OF $3,600, BELIEVED DUE
INCIDENT TO YOUR DISCHARGE FROM THE PHILIPPINE SCOUTS ON FEBRUARY 22,
1949.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
MARCH 18 AND MAY 19, 1966, IN WHICH YOU WERE ADVISED THAT CONSIDERATION
OF YOUR CLAIM FOR SUCH PAY WAS BARRED BY THE ACT OF OCTOBER 9, 1940, CH.
788, 54 STAT. 1061, 31 U.S.C. 71A, SINCE IT WAS NOT RECEIVED IN OUR
OFFICE WITHIN THE 10-YEAR LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOU ARE ENTITLED TO
MUSTERING-OUT PAY "UNDER THE PROVISIONS OF ACT NO. 263, OF THE 88TH
CONGRESS OF THE UNITED STATES DATED JANUARY 9, 1964 AND APPROVED
SEPTEMBER 30, 1965," YOU ARE ADVISED THAT NEITHER PUBLIC LAW 88-263
(WHICH WAS APPROVED ON JANUARY 31, 1964, AND HAD NOTHING TO DO WITH
MUSTERING-OUT PAY), NOR ANY OTHER LAW OF WHICH WE ARE AWARE, AUTHORIZES
THE PAYMENT OF YOUR CLAIM. ANY RIGHT YOU MAY HAVE HAD TO MUSTERING-OUT
PAY ACCRUED UNDER THE MUSTERING-OUT PAYMENT ACT OF 1944, CH. 9, 58 STAT.
8, AS AMENDED, 38 U.S.C. 691, ET SEQ. (1946 ED.), AND IMPLEMENTING
REGULATIONS CONTAINED IN PARAGRAPHS 313-322 OF T.M. 14-502. HOWEVER,
ALL CLAIMS FOR MUSTERING-OUT PAY UNDER THOSE PROVISIONS OF LAW AND
REGULATIONS ARE SUBJECT TO THE BAR IMPOSED BY THE 10-YEAR LIMITATION
PERIOD PRESCRIBED BY THE 1940 ACT.
IN VIEW OF THE FACT THAT YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE
ON FEBRUARY 17, 1966, ALMOST 17 YEARS AFTER THE DATE OF YOUR DISCHARGE
ON FEBRUARY 22, 1949, THERE IS NO FURTHER ACTION THIS OFFICE MAY LEGALLY
TAKE ON YOUR CLAIM.
B-171779, FEB 9, 1971
MUSTERING-OUT PAY
DENIAL OF CLAIM FOR MUSTERING-OUT PAY BELIEVED DUE INCIDENT TO
DISCHARGE FROM THE PHILIPPINE SCOUTS ON BASIS THAT CLAIM WAS NOT
ASSERTED WITHIN 10 YEARS FROM THE DATE IT ACCRUED AS REQUIRED BY THE ACT
OF OCTOBER 9, 1940, 31 U.S.C. 71A.
TO MR. CIPRIANO GARCIA:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 28, 1970,
ADDRESSED TO THE CHIEF, BENEFIT OFFICE, WASHINGTON, D.C., COPIES OF
WHICH WERE MAILED TO THIS OFFICE AND RECEIVED HERE FROM THE FINANCE
CENTER, UNITED STATES ARMY, CONCERNING YOUR CLAIM FOR MUSTERING-OUT PAY
IN THE AMOUNT OF $3,900 BELIEVED DUE INCIDENT TO YOUR DISCHARGE FROM THE
PHILIPPINE SCOUTS ON MARCH 24, 1949.
THIS MATTER WAS THE SUBJECT OF LETTERS FROM OUR CLAIMS DIVISION DATED
SEPTEMBER 28, 1960, APRIL 14, 1965, AND APRIL 28, 1970, IN WHICH YOU
WERE ADVISED THAT CONSIDERATION OF YOUR CLAIM FOR MUSTERING-OUT PAY WAS
BARRED BY THE ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT. 1061, 31 U.S.C.
71A, SINCE IT WAS NOT RECEIVED IN OUR OFFICE WITHIN THE 10-YEAR
LIMITATION PERIOD PRESCRIBED IN THAT ACT.
CONCERNING YOUR APPARENT BELIEF THAT YOU ARE ENTITLED TO
MUSTERING-OUT PAY "UNDER ACTION 311-324" APPROVED SEPTEMBER 30, 1965,
YOU ARE ADVISED THAT NO LAW OR REGULATION OF WHICH WE ARE AWARE,
AUTHORIZES PAYMENT OF YOUR CLAIM. ANY RIGHT YOU MAY HAVE HAD TO
MUSTERING-OUT PAY FROM THE UNITED STATES ACCRUED UNDER THE MUSTERING-OUT
PAYMENT ACT OF 1944, CH. 9, 58 STAT. 8, AS AMENDED, 38 U.S.C. 691, ET
SEQ. (1946 ED.), AND IMPLEMENTING REGULATIONS CONTAINED IN PARAGRAPHS
313-322 OF T.M. 14-502. HOWEVER, ALL CLAIMS FOR MUSTERING-OUT PAY UNDER
THOSE PROVISIONS OF LAW AND REGULATIONS ARE SUBJECT TO THE BAR IMPOSED
BY THE 10-YEAR LIMITATION PERIOD PRESCRIBED BY THE 1940 ACT.
IN VIEW OF THE FACT THAT YOUR CLAIM WAS FIRST RECEIVED IN OUR OFFICE
ON SEPTEMBER 23, 1960, MORE THAN 10 YEARS AFTER THE DATE OF YOUR
DISCHARGE ON MARCH 24, 1949, THERE IS NO FURTHER ACTION THIS OFFICE MAY
LEGALLY TAKE ON YOUR CLAIM.
THE MATTER OF YOUR ELIGIBILITY FOR COMPENSATION OR PENSION BASED UPON
YOUR SERVICE IN THE PHILIPPINE SCOUTS IS FOR DETERMINATION BY THE
VETERANS ADMINISTRATION, AND NOT BY THIS OFFICE.
B-170654, FEB 8, 1971
BID PROTEST - COLLUSIVE BIDDING
DECISION REGARDING THE "NON-COMPETITIVE" ASPECT OF AN AWARD UNDER
SOLICITATION ISSUED BY THE DEFENSE ELECTRONICS SUPPLY CENTER.
SINCE THE THREE BIDS TO WHICH THE INQUIRY IS DIRECTED WERE $15.15,
$15.25, AND $16.97, GAO SEES NO BASIS FOR CONCLUDING THAT SUCH BIDS ARE,
IN THEMSELVES, INDICATIVE OF COLLUSIVE BIDDING NOR DOES THE FACT THAT
THE "MANUFACTURER" OF THE ITEM BID A HIGHER PRICE THAN EITHER OF ITS
"DEALERS" REQUIRE SUBMISSION OF THE BIDS TO THE ATTORNEY GENERAL UNDER
ASPR 1-111.2 OR 10 U.S.C. 2305(D). BECAUSE PROTESTANT HAS INDICATED
THAT IT IS DROPPING ITS PROTEST, NO FURTHER ACTION IS CONTEMPLATED IN
THIS MATTER.
TO TYCO, INCORPORATED:
WE REFER TO YOUR LETTER OF JANUARY 11, 1971, REQUESTING AN OPINION ON
THE "NON-COMPETITIVE" ASPECT OF THE AWARD UNDER SOLICITATION NO.
D0943150, ISSUED BY THE DEFENSE ELECTRONICS SUPPLY CENTER, DAYTON, OHIO,
WHICH WAS DISCUSSED AT LENGTH IN OUR DECISION OF JANUARY 6, 1971, WHICH
DENIED YOUR PROTEST UNDER THE SAME SOLICITATION.
REGARDING YOUR INQUIRY ABOUT THE APPLICABILITY OF ASPR 1-111.2, WHICH
DEALS WITH NONCOMPETITIVE PRACTICES, YOUR ATTENTION IS INVITED TO THAT
SECTION WHICH STATES: "IF THE SECRETARY CONCERNED OR HIS REPRESENTATIVE
CONSIDERS THAT ANY BID RECEIVED AFTER FORMAL ADVERTISING EVIDENCES A
VIOLATION OF THE ANTITRUST LAWS, HE IS REQUIRED BY 10 U.S.C. 2305(D) TO
REFER SUCH BIDS TO THE ATTORNEY GENERAL FOR APPROPRIATE ACTION.
SIMILARLY, EVIDENCE OF SUCH VIOLATIONS IN NEGOTIATED PROCUREMENTS SHOULD
BE REFERRED TO THE ATTORNEY GENERAL. PRACTICES WHICH ARE DESIGNED TO
ELIMINATE COMPETITION OR RESTRAIN TRADE AND WHICH MAY EVIDENCE POSSIBLE
VIOLATION OF SUCH LAWS INCLUDE COLLUSIVE BIDDING, FOLLOW THE LEADER
PRICING, ROTATED LOW BIDS, UNIFORM ESTIMATING SYSTEMS, SHARING OF THE
BUSINESS, IDENTICAL BIDS, ETC." SINCE THE THREE BID PRICES TO WHICH YOUR
INQUIRY IS DIRECTED WERE $15.15, $15.25 AND $16.97, WE SEE NO BASIS FOR
CONCLUDING THAT SUCH BID PRICES ARE, IN THEMSELVES, INDICATIVE OF
COLLUSIVE BIDDING. NEITHER DO WE CONSIDER THE FACT THAT THE
"MANUFACTURER" OF THE ITEM BID A HIGHER PRICE THAN EITHER OF ITS
"DEALERS" AS REQUIRING SUBMISSION OF THE BIDS TO THE ATTORNEY GENERAL
UNDER ASPR 1-111.2 OR 10 U.S.C. 2305(D).
IN VIEW OF THE FOREGOING, AND THE STATEMENT IN YOUR LETTER THAT YOU
ARE DROPPING YOUR PROTEST, NO FURTHER ACTION IS CONTEMPLATED IN THIS
MATTER.
B-170981, FEB 8, 1971
BID PROTEST - NEW SPECIFICATIONS
DENIAL OF PROTEST BY THE PYRODYNE, DIVISION OF WILLIAM WAHL CORP.,
AGAINST SOLICITATION BY THE U.S. ARMY AMMUNITION PROCUREMENT AND SUPPLY
AGENCY FOR A QUANTITY OF INTERVALOMETERS AND AWARD TO LOW PROPOSER,
LEDEX.
THAT PROTESTANT WAS IN PRODUCTION OF THE EXACT ITEM REQUIRED WHILE
SUCCESSFUL PROPOSER WAS NOT, IS NOT SUPPORTED BY THE RECORD WHICH RATHER
SHOWS THAT BOTH FIRMS WERE IN PRODUCTION OF INTERVALOMETERS WHICH MET
THE REQUIREMENTS OF THE OLD SPECIFICATIONS BUT NOT THE CURRENT
PROCUREMENT WHICH WAS THE FIRST UNDER NEW, MORE STRINGENT
SPECIFICATIONS. BECAUSE BOTH FIRMS LACKED PRIOR PRODUCTION EXPERIENCE
UNDER THE NEW SPECIFICATIONS IT DOES NOT APPEAR THAT PROTESTANT WAS IN
ANY BETTER POSITION TO MEET THE PRODUCTION REQUIREMENT, NOTWITHSTANDING
THAT IT MAY HAVE HAD
TO PYRODYNE, DIVISION OF WILLIAM WAHL CORPORATION:
WE REFER TO YOUR LETTERS OF OCTOBER 2, 1970, AND NOVEMBER 17 AND 30,
1970, REGARDING YOUR PROTEST AGAINST AWARD TO ANOTHER FIRM UNDER REQUEST
FOR PROPOSALS NO. DAAA09-71-R-0037 ISSUED BY THE U.S. ARMY AMMUNITION
PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS.
THE SOLICITATION WAS ISSUED ON JULY 27, 1970. ITEM 1 REQUESTED
PROPOSALS FOR 13,757 INTERVALOMETERS, F/LAU-3/A, FSN 1340-760-42260, TO
MEET REQUIREMENTS OF SPECIFICATION OONEC-PD-1340-1, AND ITEM 3 CALLED
FOR PROPOSALS FOR 1000 INTERVALOMETERS, F/LAU-68A/A. THE NEGOTIATION
WAS UNDERTAKEN PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304(A)(2), AS
IMPLEMENTED BY ASPR 3-202.2(VI), AFTER A DETERMINATION AND FINDING BY
THE CONTRACTING OFFICER THAT THE PRIORITY DESIGNATION ASSIGNED TO THIS
PROCUREMENT ESTABLISHED A PUBLIC EXIGENCY WHICH WOULD NOT PERMIT THE
DELAY INCIDENT TO ADVERTISING. FIVE FIRMS WERE SOLICITED AND THREE
PROPOSALS WERE RECEIVED AS A RESULT OF THE SOLICITATION. THE LOW
PROPOSAL WAS FOR A UNIT PRICE OF $21.43 FOR ITEM 1, BUT A PREAWARD
SURVEY DETERMINED THE OFFEROR COULD NOT MEET THE DELIVERY TIME OF 15
DAYS FOR SUBMISSION OF FIRST ARTICLE SAMPLES AND IT WAS ELIMINATED FROM
FURTHER CONSIDERATION. THE REMAINING TWO PROPOSALS FOR ITEM 1 WERE AS
FOLLOWS:
INTERVALOMETER F/LAU-3/A
QUANTITY UNIT PRICE TOTAL PRICE
PYRODYNE 13,757 $30.82 EACH $423,990.74
LEDEX 13,757 $26.79 EACH $368,550.03
DIFFERENCE $55,440.71 PREAWARD SURVEYS OF LEDEX AND PYRODYNE
SHOWED THAT BOTH COULD MEET THE DELIVERY REQUIREMENT AND THAT BOTH WERE
RESPONSIBLE PROSPECTIVE CONTRACTORS. AWARD WAS MADE TO LEDEX FOR ITEM 1
ON SEPTEMBER 17, 1970. YOU WERE ADVISED OF THIS ACTION BY LETTER OF SAME
DATE AND THE LETTER ALSO STATED THAT ITEM 3 WAS CANCELLED AND WOULD BE
RESOLICITED IN THE NEAR FUTURE.
YOUR LETTER OF PROTEST OF OCTOBER 2, 1970, CONTAINED FOUR BASES FOR
YOUR PROTEST AGAINST AWARD TO LEDEX, SUMMARIZED AS FOLLOWS:
1. YOU STATED THAT PYRODYNE DEVELOPED AND QUALIFIED AN
INTERVALOMETER TO MEET THE REQUIREMENTS OF OONEC-PD-1340-1 WHILE LEDEX
HAD NOT QUALIFIED A UNIT TO THESE REQUIREMENTS.
2. YOU ALLEGED THAT THE REQUIREMENT FOR SUBMISSION OF FIRST ARTICLE
SAMPLES WITHIN 15 DAYS AFTER AWARD IS IMPRACTICAL UNLESS THE FIRM IS IN
PRODUCTION OF THE ITEM. YOU STATED THAT PYRODYNE WAS IN PRODUCTION OF
THE ITEM WHILE LEDEX WAS NOT.
3. YOU SUBMITTED THAT 15 DAYS WAS INSUFFICIENT TIME FOR TESTING THE
FIRST ARTICLES AND SUGGESTED THAT FOUR WEEKS SHOULD BE CONSIDERED THE
MINIMUM TIME FOR THE TESTS. YOU EXPRESSED YOUR BELIEF THAT THIS WOULD
LEAD TO EXTENSION OF TIME FOR TESTING AND WAS UNFAIR TO PYRODYNE WHICH
HAD TESTS CONDUCTED BY THE SPECIFIED LABORATORY AT ITS OWN EXPENSE PRIOR
TO THE SOLICITATION.
4. YOU SUBMITTED THAT IT WOULD BE IMPOSSIBLE FOR LEDEX TO MEET THE
DELIVERY SCHEDULE BUT THAT PYRODYNE COULD DO SO SINCE IT WAS ALREADY IN
PRODUCTION OF THE ITEM.
YOU FURTHER SUBMITTED THAT THE GOVERNMENT HAD AN OBLIGATION TO YOU,
AS A SMALL BUSINESS CONCERN WHICH HAS INVESTED IN THE DEVELOPMENT OF AN
ADVANCED PRODUCT FOR THE BENEFIT OF THE GOVERNMENT, TO SET-ASIDE A
PORTION OF THIS PROCUREMENT FOR YOU UNDER ANY CIRCUMSTANCE. YOU ALSO
SUGGESTED THAT, TO BE FAIR, HALF OF THE PROCUREMENT SHOULD HAVE BEEN
SET-ASIDE FOR SMALL BUSINESS CONCERNS.
WITH REGARD TO YOUR ASSERTION THAT YOU WERE IN PRODUCTION OF THE
F/LAU-3/A INTERVALOMETERS WHILE LEDEX WAS NOT, THE ADMINISTRATIVE REPORT
DISCLOSES THAT BOTH YOUR FIRM AND LEDEX WERE PRODUCING THE ITEM TO MEET
THE SPECIFICATIONS OF A FORMER, LESS STRINGENT SPECIFICATION, 68
WRNEBL-1055-1, WHILE THE PRESENT SOLICITATION REQUIRES THE ITEM TO MEET
NEWER, MORE STRINGENT STANDARDS DESIGNATED AS OONEC-PD-1340-1. THIS
PROCUREMENT IS THE FIRST BUY OF THE F/LAU-3/A INTERVALOMETER USING THE
NEW SPECIFICATION, AND THEREFORE NO MANUFACTURER WAS EXEMPT FROM
SUBMITTING FIRST ARTICLE SAMPLES. IN VIEW THEREOF THE FACT THAT YOU HAD
PAID FOR INDEPENDENT TESTING OF YOUR INTERVALOMETER PRIOR TO THIS
PROCUREMENT HAD NO BEARING ON THIS REQUIREMENT.
THE ADMINISTRATIVE REPORT FURTHER SHOWS THAT LEDEX SUBMITTED ITS
FIRST ARTICLE SAMPLE IN TIMELY FASHION TO THE DESIGNATED TESTING
LABORATORY. THE TWENTY UNITS WERE FROM ITS PRODUCTION LOT AND WERE NOT
PROTOTYPE UNITS. TESTS WERE CONDUCTED, WITHIN FIFTEEN DAYS OF RECEIPT
OF THE SAMPLE, WHICH SHOWED CERTAIN FAILURES AND THE SAMPLE WAS
DISAPPROVED. SUBMISSION OF AN ADDITIONAL TWENTY UNITS WAS REQUIRED AND
FINAL FIRST ARTICLE APPROVAL WAS GIVEN ON NOVEMBER 13, 1970. THE REPORT
AGREED WITH YOUR ASSERTION THAT FOUR WEEKS MAY BE THE TIME REQUIRED FOR
TESTING UNDER ROUTINE CONDITIONS, BUT THIS CASE WAS NOT ROUTINE AND THE
TESTS WERE CONDUCTED WITHIN THE SPECIFIED FIFTEEN DAY PERIOD.
WITH REGARD TO YOUR SUGGESTION CONCERNING A SMALL BUSINESS SET-ASIDE,
IT IS THE POSITION OF THE CONTRACTING OFFICER THAT THE SMALL QUANTITY
AND SHORT DELIVERY SCHEDULE MADE IT IMPOSSIBLE TO SEVER THE REQUIREMENT
INTO TWO OR MORE ECONOMIC PRODUCTION RUNS, AND IT WAS THEREFORE NOT
FEASIBLE TO SET A PORTION OF THIS PROCUREMENT ASIDE FOR SMALL BUSINESS
CONCERNS.
THE BASES FOR YOUR PROTEST, WHICH YOU NUMBERED 1, 2, 3 AND 4, ARE ALL
PREDICATED ON YOUR ASSERTION THAT YOUR FIRM WAS IN PRODUCTION OF THE
EXACT ITEM REQUIRED, WHILE LEDEX WAS NOT. THE RECORD DOES NOT SUPPORT
YOUR ASSERTION, SINCE IT SHOWS THAT BOTH PYRODYNE AND LEDEX WERE IN
PRODUCTION OF F/LAU-3/A INTERVALOMETERS TO MEET THE REQUIREMENTS OF THE
OLD SPECIFICATION, WHEREAS THE CURRENT PROCUREMENT WAS THE FIRST TO USE
THE NEW SPECIFICATION. SINCE BOTH FIRMS LACKED PRIOR PRODUCTION
EXPERIENCE UNDER THE NEW SPECIFICATION, IT DOES NOT APPEAR THAT YOUR
FIRM WAS IN ANY BETTER POSITION TO MEET THE PRODUCTION REQUIREMENTS OF
THIS PROCUREMENT, EVEN THOUGH YOU MAY HAVE HAD A PROTOTYPE UNIT OR UNITS
TESTED AT YOUR OWN EXPENSE TO MEET THE NEW SPECIFICATION. YOUR
CONTENTION NUMBER 3, THAT 15 DAYS WAS INSUFFICIENT FOR TESTING THE FIRST
ARTICLE SAMPLE, IS ALSO NEGATED BY THE FACTS OF RECORD WHICH SHOW THAT
THE TESTING WAS ACCOMPLISHED WITHIN THE SPECIFIED PERIOD.
WE HAVE REVIEWED THE RESULTS OF THE PREAWARD SURVEY CONDUCTED AT
LEDEX WAS A RESPONSIBLE CONTRACTOR. SUCH A DETERMINATION IS THE DUTY OF
THE CONTRACTING OFFICER UNDER PROVISION OF ASPR 1-900, ET. SEQ., AND OUR
OFFICE HAS HELD THAT IT WILL OFFER NO LEGAL OBJECTION TO A DETERMINATION
OF RESPONSIBILITY IN THE ABSENCE OF BAD FAITH OR UNLESS THERE IS NO
REASONABLE BASIS FOR THE DETERMINATION. 38 COMP. GEN. 131 (1958); 45
ID. 4 (1965). WE DO NOT REGARD THE SUBSEQUENT FACT THAT THE ORIGINAL
FIRST ARTICLE SAMPLE WAS UNACCEPTABLE AS HAVING ANY BEARING ON THE GOOD
FAITH OF THE CONTRACTING OFFICER IN MAKING HIS DETERMINATION. SUCH
FAILURES ARE NOT UNUSUAL IN THE FIRST PRODUCTION RUN UNDER A NEW
SPECIFICATION AND ARE, IN FACT, THE REASON FOR INCLUDING THE FIRST
ARTICLE SAMPLE REQUIREMENT IN CONTRACTS OF THIS NATURE.
THE ONLY REMAINING PERTINENT EVALUATION FACTOR IN THIS PROCUREMENT
WAS PRICE. THE DECISION OF THE CONTRACTING OFFICER TO MAKE AWARD TO THE
LOWEST RESPONSIVE, RESPONSIBLE BIDDER FOR ITEM 1, AT A PRICE $55,440.71
BELOW THE PRICE IN YOUR PROPOSAL, AFFORDS NO BASIS FOR ANY LEGAL
OBJECTION TO THE AWARD.
THE CANCELLATION ON SEPTEMBER 17, 1970, OF THE REQUIREMENT FOR THE
F/LAU-68A/A INTERVALOMETERS CALLED FOR IN ITEM 3 AND THE SUBSEQUENT
RESOLICITATION FOR THE ITEM ON SEPTEMBER 25, 1970, DOES NOT APPEAR TO
HAVE PREJUDICED YOUR FIRM IN ANY MANNER SINCE YOU WERE ABLE TO SUBMIT A
PROPOSAL UNDER THE RESOLICITATION. ALTHOUGH THERE WAS OBVIOUSLY SOME
CONFUSION OF THE TWO TYPES OF INTERVALOMETERS IN THE LETTER OF NOVEMBER
10, 1970, FROM THE CONTRACTING OFFICER TO YOUR FIRM, AS YOU POINTED OUT
IN YOUR LETTER OF NOVEMBER 17, 1970, TO OUR OFFICE, THERE WAS NO SUCH
CONFUSION IN THE FORMAL PROCUREMENT DOCUMENTS OR IN THE ADMINISTRATIVE
REPORT.
WITH REGARD TO YOUR CONTENTION THAT THE GOVERNMENT HAD AN OBLIGATION
TO SET HALF OF THE PROCUREMENT ASIDE FOR SMALL BUSINESS CONCERNS, WE
HAVE HAD OCCASION TO CONSIDER, IN OUR DECISION B-164555, SEPTEMBER 10,
1968, A SIMILAR CONTENTION FROM A SMALL BUSINESS WHICH DEVELOPED AT ITS
OWN EXPENSE CERTAIN REFINEMENTS OF AN ITEM WHICH WERE ADOPTED FOR USE BY
THE GOVERNMENT. IN THAT CASE WE STATED:
"OUR OFFICE HAS CONSISTENTLY RECOGNIZED THE ESTABLISHED POLICY THAT A
FAIR PROPORTION OF PURCHASES OF SUPPLIES AND SERVICES BE PLACED WITH
SMALL BUSINESS CONCERNS, WHICH IS IN KEEPING WITH THE NATIONAL POLICY
AND THE SMALL BUSINESS ACT (15 U.S.C. 631 ET SEQ.) AS IMPLEMENTED BY FPR
1-1.706. THE DECISION, HOWEVER, AS TO WHETHER A CERTAIN PROCUREMENT
SHOULD BE SET ASIDE IN WHOLE OR IN PART FOR SMALL BUSINESS CONCERNS IS
WITHIN THE PROVINCE OF THE ADMINISTRATIVE AGENCY. NEITHER THE
PROVISIONS CONTAINED IN THE FPR NOR THE PROVISIONS OF THE SMALL BUSINESS
ACT MAKE IT MANDATORY THAT THERE BE SET ASIDE FOR SMALL BUSINESS ANY
PARTICULAR PROCUREMENT. 43 COMP. GEN. 657, 45 ID. 228, 41 ID. 351."
IN THE PRESENT CASE, THE IMPLEMENTING REGULATION IS FOUND IN ASPR
1-706.6, BUT THE SAME REASONING APPLIES. THE CONTRACTING OFFICER
EXERCISED HIS DISCRETION IN DETERMINING THAT THE QUANTITY REQUIRED HERE
WAS NOT SEVERABLE INTO TWO OR MORE ECONOMIC PRODUCTION RUNS, AND WE FIND
NO BASIS FOR DISAGREEING WITH HIS DETERMINATION.
ACCORDINGLY, FOR THE REASONS STATED, YOUR PROTEST MUST BE DENIED.
B-171082, FEB 8, 1971
TRANSFERS - REIMBURSEMENT - SHIPMENT OF PRIVATELY OWNED VEHICLE
DECISION DISALLOWING REIMBURSEMENT TO ROBERT J. GODFREY FOR EXPENSES
INCURRED IN SHIPPING PRIVATELY OWNED VEHICLE FROM NEW YORK TO
BREMERHAVEN, GERMANY, INCIDENT TO AN AUTHORIZED CHANGE OF PERMANENT DUTY
STATION FROM OKINAWA TO RAMSTEIN, GERMANY.
IN THE ABSENCE OF JUSTIFICATION OF NON-USE OF A UNITED STATES FLAG
VESSEL IN SHIPPING CLAIMANT'S PRIVATELY OWNED VEHICLE, FOR WHICH HE
PERSONALLY ARRANGED IN VIOLATION OF PARAGRAPH 16-26, DEPARTMENT OF THE
ARMY REGULATION 55-71, GAO MAY NOT ALLOW CREDIT, OR REIMBURSEMENT, FOR
THE COST OF TRANSPORTATION OF AN EMPLOYEE'S PERSONAL PROPERTY BY A
FOREIGN FLAG VESSEL DUE TO PROHIBITION IMPOSED BY SECTION 901 OF THE
MERCHANT MARINE ACT OF 1936, AS AMENDED, 46 U.S.C. 1241.
TO MR. ROBERT J. GODFREY:
YOUR LETTER OF SEPTEMBER 9, 1970, REQUESTS THAT WE RECONSIDER YOUR
CLAIM FOR REIMBURSEMENT OF THE EXPENSES YOU PAID FOR THE SHIPMENT OF
YOUR PRIVATELY OWNED VEHICLE FROM NEW YORK, NEW YORK, TO BREMERHAVEN,
GERMANY, INCIDENT TO THE AUTHORIZED CHANGE OF YOUR PERMANENT DUTY
STATION FROM OKINAWA TO RAMSTEIN, GERMANY, AS AN EMPLOYEE OF THE
DEPARTMENT OF DEFENSE, OVERSEAS DEPENDENTS SCHOOLS.
YOUR CLAIM WAS DISALLOWED BY OFFICE SETTLEMENT DATED AUGUST 21, 1970.
IN THAT RESPECT YOU SAY YOU UNDERSTAND THE PROVISIONS OF SECTION 10.4 OF
BUREAU OF THE BUDGET CIRCULAR NO. A-56 REVISED, WHICH WAS DISCUSSED IN
THE SETTLEMENT.
THE SETTLEMENT LETTER ALSO DISCUSSED THE CIRCUMSTANCES OF WHY YOU
SHIPPED THE VEHICLE PRIOR TO THE ISSUANCE OF SPECIAL ORDER NO. AB-684
WHICH AMENDED YOUR TRAVEL AUTHORIZATION, SPECIAL ORDER NO. AB-480.
BOTH OF THOSE ORDERS REFER TO THE DEPARTMENT OF DEFENSE JOINT TRAVEL
REGULATIONS (JTR), VOLUME 2. APPENDIX B OF JTR REFERS TO DEPARTMENT OF
THE ARMY REGULATION AR 55-71. PARAGRAPH 16-26 OF AR 55-71 PROVIDES THAT
A SPONSOR (MILITARY OR CIVILIAN) IS NOT AUTHORIZED REIMBURSEMENT FOR THE
COST OF SHIPMENT OF PRIVATELY OWNED VEHICLES BY COMMERCIAL MEANS WHEN HE
PERSONALLY ARRANGES FOR SUCH COMMERCIAL SERVICE. YOU SUGGEST THAT
PARAGRAPH 16-26 IS NOT APPLICABLE TO YOUR SITUATION. EVEN THOUGH YOUR
TRAVEL ORDER WAS AMENDED AFTER YOU HAD DISCUSSED YOUR SITUATION WITH THE
SEVERAL OFFICES MENTIONED IN YOUR LETTERS OF OCTOBER 15, 1968, AND
SEPTEMBER 9, 1970, OTHER PROVISIONS IN CHAPTER 16 OF AR 55-71 ARE FOR
CONSIDERATION IN YOUR CASE.
PROVISIONS SUCH AS IN PARAGRAPH 16-3B OF AR 55-71, AS WELL AS IN JTR
PARAGRAPH C 6205-3 AND SECTION 6.6G OF CIRCULAR NO. A-56 REVISED, ARE
BASED UPON SECTION 901 OF THE MERCHANT MARINE ACT OF 1936, AS AMENDED,
46 U.S.C. 1241, WHICH IN PART IS AS FOLLOWS:
"(A) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES TRAVELING ON
OFFICIAL BUSINESS OVERSEAS OR TO OR FROM ANY OF THE POSSESSIONS OF THE
UNITED STATES SHALL TRAVEL AND TRANSPORT HIS PERSONAL EFFECTS ON SHIPS
REGISTERED UNDER THE LAWS OF THE UNITED STATES WHERE SUCH SHIPS ARE
AVAILABLE UNLESS THE NECESSITY OF HIS MISSION REQUIRES THE USE OF A SHIP
UNDER A FOREIGN FLAG: PROVIDED, THAT THE COMPTROLLER GENERAL OF THE
UNITED STATES SHALL NOT CREDIT ANY ALLOWANCE FOR TRAVEL OR SHIPPING
EXPENSES INCURRED ON A FOREIGN SHIP IN THE ABSENCE OF SATISFACTORY PROOF
OF THE NECESSITY THEREFOR." ALSO WE INVITE YOUR ATTENTION TO THE
PROVISIONS UNDER PARAGRAPH 16-7 OF AR 55-71 AND IN PARAGRAPHS C 7152 AND
C 7156 OF JTR.
IN THE ABSENCE OF JUSTIFICATION OF NONUSE OF UNITED STATES FLAG
VESSELS THIS OFFICE UNDER SECTION 901 MAY NOT ALLOW CREDIT, OR
REIMBURSEMENT, FOR THE COST OF TRANSPORTATION OF AN EMPLOYEE'S PERSONAL
PROPERTY OR VEHICLE BY A FOREIGN FLAG VESSEL.
THE RECORD SHOWS THAT PANOCEAN SHIP A CAR SYSTEM, ENGAGED BY YOU TO
SHIP YOUR 1965 PEUGOT STATION WAGON FROM NEW YORK TO BREMERHAVEN,
PROCURED SHIPMENT THEREOF FOR YOU ABOARD THE M/S ATLANTIC SONG, A
SWEDISH VESSEL OWNED BY THE ATLANTIC CONTAINER LINES. WE UNDERSTAND THE
ATLANTIC SONG WAS NOT A UNITED STATES FLAG VESSEL. HENCE, WE HAVE NO
ALTERNATIVE BUT TO DISALLOW REIMBURSEMENT OF THE EXPENSES CLAIMED BY
YOU.
B-171298, FEB 8, 1971
BID PROTEST - LABOR SURPLUS AREA
DENIAL OF PROTEST BY AINSBROOKE, DIVISION OF GENESCO, INC., AGAINST
AWARD OF A CONTRACT FOR 4,468,524 PAIRS OF MEN'S COTTON DRAWERS TO FREE
FASHIONS, AS A LABOR SURPLUS AREA SET-ASIDE.
THE INVITATION PROVIDED THAT WHERE ELIGIBILITY FOR PREFERENCE WAS
BASED UPON THE STATUS OF THE BIDDER AS A "CERTIFIED-ELIGIBLE CONCERN"
THE BIDDER MUST FURNISH WITH ITS BID EVIDENCE OF ITS CERTIFICATION BY
THE SECRETARY OF LABOR. PROTESTANT WAS PLACED LAST IN ORDER OF
PREFERENCE DUE TO ITS FAILURE TO SUBMIT A COPY OF ITS LABOR SURPLUS
CERTIFICATION; SUCH A FAILURE CAN NOT BE WAIVED BECAUSE THERE IS NO
REQUIREMENT THAT A BIDDER MUST CLAIM THE HIGHEST LABOR SURPLUS PRIORITY
WHICH HE POSSESSES. FURTHER, IN ORDER TO BE PLACED IN GROUP I, AS WAS
SUCCESSFUL LOW BIDDER, PROTESTANT WOULD HAVE HAD TO QUALIFY AS BOTH A
CERTIFIED-ELIGIBLE CONCERN WITH A FIRST PREFERENCE AND A SMALL BUSINESS
CONCERN, AND BECAUSE PROTESTANT WAS NOT A SMALL BUSINESS CONCERN IT
COULD NOT HAVE QUALIFIED FOR GROUP I PRIORITY.
TO AINSBROOKE, DIVISION OF GENESCO, INCORPORATED:
FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A
CONTRACT TO ANOTHER FIRM UNDER SOLICITATION NO. DSA 100-71-B-0080,
ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER, DEFENSE SUPPLY AGENCY,
PHILADELPHIA, PENNSYLVANIA.
THE INVITATION FOR BIDS, WHICH INCLUDED A LABOR SURPLUS AREA
SET-ASIDE, WAS ISSUED ON JULY 29, 1970, AND OPENED ON AUGUST 18, 1970.
THE NON-SET-ASIDE PORTION OF THE PROCUREMENT IS FOR 4,468,524 PAIRS OF
MEN'S COTTON DRAWERS, AND THE QUANTITY SET ASIDE FOR LABOR SURPLUS AREA
CONCERNS IS 1,974,396 PAIRS. WITH REGARD TO AWARD OF THE SET-ASIDE
PORTION OF THE PROCUREMENT, THE INVITATION PROVIDED IN ACCORDANCE WITH
ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-804.2 THAT EACH LABOR
SURPLUS AREA OR SMALL BUSINESS CONCERN SUBMITTING A RESPONSIVE BID ON
THE NON-SET-ASIDE PORTION AT A UNIT PRICE WITHIN 130 PERCENT OF THE
HIGHEST UNIT PRICE AWARDED UNDER THE NON-SET-ASIDE PORTION SHALL BE
ELIGIBLE FOR NEGOTIATION OF THE SET-ASIDE PORTION IN THE FOLLOWING ORDER
OF PRIORITY:
"GROUP 1 - CERTIFIED-ELIGIBLE CONCERNS WITH A FIRST PREFERENCE WHICH
ARE ALSO SMALL BUSINESS CONCERNS. WITHIN THIS GROUP, A CONCERN WHICH
HAS RECEIVED AN AWARD FOR A PERCENTAGE OF THE NON-SET-ASIDE PORTION OF
AN ITEM SHALL FIRST BE OFFERED THE OPPORTUNITY TO OBTAIN THE SAME
PERCENTAGE OF THE TOTAL QUANTITY OF THAT ITEM WHICH HAS BEEN SET ASIDE.
IF A QUANTITY OF AN ITEM STILL REMAINS TO BE AWARDED, A DRAWING BY LOT
SHALL THEN BE HAD OF ALL THE OFFERS IN THIS GROUP TO DETERMINE THE
PRIORITY FOR NEGOTIATIONS FOR THE BALANCE OF THE ITEM.
"GROUP 2 - OTHER CERTIFIED-ELIGIBLE CONCERNS WITH A FIRST PREFERENCE.
IF A QUANTITY OF AN ITEM STILL REMAINS TO BE AWARDED AFTER NEGOTIATIONS
HAVE BEEN COMPLETED WITH THE OFFERORS IN GROUP 1, THE SAME PROCEDURE
SHALL THEN BE FOLLOWED AS STATED FOR THE GROUP 1.
"GROUP 3 - CERTIFIED-ELIGIBLE CONCERNS WITH A SECOND PREFERENCE WHICH
ARE ALSO SMALL BUSINESS CONCERNS. IF A QUANTITY OF AN ITEM STILL
REMAINS TO BE AWARDED AFTER NEGOTIATIONS HAVE BEEN COMPLETED WITH THE
OFFERORS IN GROUP 2, THE SAME PROCEDURE SHALL THEN BE FOLLOWED AS STATED
FOR THE GROUP 1.
"GROUP 4 - OTHER CERTIFIED-ELIGIBLE CONCERNS WITH A SECOND
PREFERENCE. IF A QUANTITY OF AN ITEM STILL REMAINS TO BE AWARDED AFTER
NEGOTIATIONS HAVE BEEN COMPLETED WITH THE OFFERORS IN GROUP 3 THE SAME
PROCEDURE SHALL THEN BE FOLLOWED AS STATED FOR THE GROUP 1.
"GROUP 5 - PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREA CONCERNS
WHICH ARE ALSO SMALL BUSINESS CONCERNS. IF A QUANTITY OF AN ITEM STILL
REMAINS TO BE AWARDED AFTER NEGOTIATIONS HAVE BEEN COMPLETED WITH THE
OFFERORS IN GROUP 4, THE SAME PROCEDURE SHALL THEN BE FOLLOWED AS STATED
FOR THE GROUP 1.
"GROUP 6 - OTHER PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREA
CONCERNS. IF A QUANTITY OF AN ITEM STILL REMAINS TO BE AWARDED AFTER
NEGOTIATIONS HAVE BEEN COMPLETED WITH THE OFFERORS IN GROUP 5, THE SAME
PROCEDURE SHALL THEN BE FOLLOWED AS STATED FOR THE GROUP 1.
"GROUP 7 - SMALL BUSINESS CONCERNS WHICH ARE NOT LABOR SURPLUS AREA
CONCERNS. IF A QUANTITY OF AN ITEM STILL REMAINS TO BE AWARDED AFTER
NEGOTIATIONS HAVE BEEN COMPLETED WITH THE OFFERORS IN GROUP 6, THE SAME
PROCEDURE SHALL THEN BE FOLLOWED AS STATED FOR THE GROUP 1."
IN ACCORDANCE WITH THE REGULATION, THE INVITATION ALSO PROVIDED THAT
WHERE ELIGIBILITY FOR PREFERENCE WAS BASED UPON THE STATUS OF THE BIDDER
AS A "CERTIFIED-ELIGIBLE CONCERN" THE BIDDER MUST FURNISH WITH ITS BID
EVIDENCE OF ITS CERTIFICATION BY THE SECRETARY OF LABOR.
FIVE BIDS WERE RECEIVED AND OPENED ON AUGUST 18, 1970. AWARDS FOR
THE NON-SET-ASIDE PORTION WERE MADE ON OCTOBER 23 AND NOVEMBER 27, 1970,
TO THE TWO LOWEST RESPONSIVE AND RESPONSIBLE BIDDERS. FREE FASHIONS, A
SMALL BUSINESS AND LABOR SURPLUS AREA CONCERN, SUBMITTED A BID WITHIN
130 PERCENT OF THE HIGHEST AWARD UNDER THE NON-SET-ASIDE PORTION. SINCE
FREE FASHIONS ALSO SUBMITTED A CERTIFICATE OF ELIGIBILITY FOR FIRST
PREFERENCE, IT WAS DETERMINED ELIGIBLE FOR FIRST PRIORITY CONSIDERATION
IN GROUP 1 ABOVE. THE SMALL BUSINESS ADMINISTRATION ISSUED FREE
FASHIONS A CERTIFICATE OF COMPETENCY ON NOVEMBER 25, 1970, FOR THE
ENTIRE QUANTITY OF THE SET-ASIDE, AND AWARD WAS MADE ON NOVEMBER 27,
1970, AFTER NOTICE TO OUR OFFICE IN ACCORDANCE WITH ASPR 2-407.8(B)(3).
YOU HAVE PROTESTED TO OUR OFFICE BECAUSE YOU WERE ADVISED THAT YOU
WERE LAST IN ORDER OF PREFERENCE ON THE SET-ASIDE BECAUSE OF FAILURE TO
SUBMIT WITH YOUR BID A COPY OF YOUR LABOR SURPLUS AREA CERTIFICATION.
YOU CONTEND THAT THIS ACTION IS IMPROPER SINCE YOU HAD SUBMITTED A COPY
OF THE CERTIFICATE WITH AN EARLIER SOLICITATION, AND WERE ADVISED BY
SOMEONE AT DSA THAT IT WOULD NOT BE NECESSARY TO SUBMIT A COPY WITH THE
SUBJECT BID AS YOUR MANUFACTURING FACILITY WAS LISTED IN THE DEPARTMENT
OF LABOR "AREA TRENDS IN EMPLOYMENT AND UNEMPLOYMENT."
THE CONTRACTING OFFICER DENIES THAT HE OR ANY OF HIS REPRESENTATIVES
EVER ADVISED YOUR FIRM THAT IT WAS NOT NECESSARY TO SUBMIT A CERTIFICATE
OF ELIGIBILITY WITH ITS BID. FURTHER, THE CONTRACTING OFFICER STATES
THAT HE IS UNAWARE OF ANY PERSON IN THE DEFENSE SUPPLY AGENCY WHO MAY
HAVE MADE SUCH A STATEMENT.
WHETHER YOUR FIRM WAS PROPERLY CLASSIFIED AS TO PRIORITY IS ACADEMIC
SINCE IN ANY EVENT ITS PRIORITY WOULD HAVE BEEN BELOW THAT OF FREE
FASHIONS. IN ORDER TO BE PLACED IN GROUP 1, AS WAS FREE FASHIONS, IN
ORDER TO BE PLACED IN GROUP 1, AS WAS FREE FASHIONS, YOU WOULD HAVE HAD
TO QUALIFY AS BOTH A CERTIFIED-ELIGIBLE CONCERN WITH A FIRST PREFERENCE
AND A SMALL BUSINESS CONCERN. IN YOUR BID YOU REPRESENTED THAT YOU WERE
NOT A SMALL BUSINESS CONCERN. THEREFORE, YOU COULD NOT HAVE QUALIFIED
FOR GROUP 1 PRIORITY.
HOWEVER, WITH RESPECT TO FUTURE PROCUREMENTS, WE HAVE HELD THAT WHERE
THE IFB WARNS THAT ELIGIBILITY FOR CONSIDERATION AS A CERTIFIED-ELIGIBLE
CONCERN IS PREDICATED UPON THE SUBMISSION OF A PROPER CERTIFICATION WITH
THE BID, A BIDDER WHO DOES NOT SUBMIT THE CERTIFICATION WITH HIS BID IS
NOT QUALIFIED AS A "CERTIFIED-ELIGIBLE" CONCERN. B-164115, AUGUST 30,
1968; B-169260, MAY 19, 1970. IT IS ALSO SETTLED THAT WHERE SUCH
MATERIAL INFORMATION IS OMITTED FROM A BID IT MAY NOT BE SUPPLIED AFTER
BID OPENING. B-150676, FEBRUARY 7, 1963. IN THIS CONNECTION, WE HAVE
ALSO HELD THAT THE FAILURE TO SUBMIT THE CERTIFICATE WITH THE BID MAY
NOT BE WAIVED EVEN WHERE THE CONTRACTING OFFICER HAS KNOWLEDGE THAT THE
BIDDER POSSESSES A CERTIFICATE SINCE THERE IS NO REQUIREMENT THAT A
BIDDER MUST PRODUCE UNDER OR CLAIM THE HIGHEST LABOR SURPLUS PRIORITY
WHICH HE POSSESSES. B-169260, SUPRA.
ACCORDINGLY, YOUR PROTEST IS DENIED. WITH RESPECT TO FUTURE
PROCUREMENTS, PLEASE NOTE THAT THE REPRESENTATIVE OF THE CONTRACTING
ACTIVITY TO BE CALLED FOR INFORMATION IS SPECIFICALLY IDENTIFIED ON THE
FACE OF STANDARD FORM 33, "SOLICITATION, OFFER AND AWARD" AND THAT
ARTICLE 3 OF STANDARD FORM 33A, "SOLICITATION INSTRUCTIONS AND
CONDITIONS" STATES, "ORAL EXPLANATIONS OR INSTRUCTIONS GIVEN BEFORE THE
AWARD OF THE CONTRACT WILL NOT BE BINDING."
B-171462, FEB 8, 1971
BID PROTEST - SUPERIOR PRODUCT
DENIAL OF PROTEST BY COBER ELECTRONICS, INC., AGAINST CONTRACT FOR
SUPPLY OF TWO HIGH POWER PULSE GENERATORS UNDER SOLICITATION BY U.S.
NAVAL ORDNANCE LABORATORY AND AWARD TO VELONEX COMPANY.
THE PUBLIC ADVERTISING STATUTES DO NOT AUTHORIZE AN AGENCY TO PAY A
HIGHER PRICE FOR AN ARTICLE WHICH MAY BE SUPERIOR TO ONE THAT ADEQUATELY
MEETS ITS NEEDS; THEREFORE, WHERE THE LOW BID MEETS THE MINIMUM
REQUIREMENTS PRESCRIBED IN THE IFB, THE FACT THAT THE PRODUCT OFFERED BY
PROTESTANT MAY BE SUPERIOR TO THAT OFFERED BY LOW BIDDER DOES NOT
PRECLUDE CONSIDERATION OF THE LOW BID, AND THE PROTEST MUST BE DENIED.
TO COBER ELECTRONICS, INC.:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 10, 1970, PROTESTING THE
PROPOSED AWARD BY THE U.S. NAVAL ORDNANCE LABORATORY, SILVER SPRING,
MARYLAND, OF A CONTRACT TO VELONEX COMPANY FOR THE SUPPLY OF TWO HIGH
POWER PULSE GENERATORS PURSUANT TO IFB N60921-71-B-0063.
THE SOLICITATION DELINEATED THE TWO GENERATORS REQUESTED AS "COBER
MODEL 605P OR EQUAL" AND "COBER MODEL 605P OR EQUAL WITH OUTPUT
TRANSFORMER FOR 200 VOLTS, 100 AMPERES."
SECTION C.23 OF THE SOLICITATION ADDRESSED ITSELF TO THE REQUIREMENTS
IMPOSED UPON BIDDERS UNDER THE "BRAND NAME OR EQUAL CLAUSE" SET OUT IN
ARMED SERVICES PROCUREMENT REGULATION 1-1206.5. PARAGRAPH (B) (1) OF
SECTION C.23 ADMONISHED BIDDERS THAT:
" *** THE EVALUATION OF PROPOSALS AND THE DETERMINATION AS TO THE
EQUALITY OF THE PRODUCT OFFERED SHALL BE THE RESPONSIBILITY OF THE
GOVERNMENT AND WILL BE BASED ON INFORMATION FURNISHED BY THE OFFEROR OR
IDENTIFIED IN HIS PROPOSAL, AS WELL AS OTHER INFORMATION REASONABLY
AVAILABLE TO THE PURCHASING ACTIVITY *** TO INSURE THAT SUFFICIENT
INFORMATION IS AVAILABLE, THE OFFEROR MUST FURNISH AS A PART OF HIS
PROPOSAL ALL DESCRIPTIVE MATERIAL *** NECESSARY FOR THE PURCHASING
ACTIVITY TO (I) DETERMINE WHETHER THE PRODUCT OFFERED MEETS THE
REQUIREMENTS OF THE REQUEST FOR PROPOSALS AND (II) ESTABLISH EXACTLY
WHAT THE OFFEROR PROPOSES TO FURNISH *** ."
UPON OPENING OF SUBJECT IFB ON NOVEMBER 23, 1970, TWO BIDS WERE
ANNOUNCED. VELONEX WAS LOW BIDDER WITH A PRICE OF $3,840 FOR THE FIRST
ITEM AND $4,110 FOR THE SECOND, AND AN AGGREGATE BID OF $7,950. YOUR
BID WAS $3,990 AND $4,315 FOR THE TWO RESPECTIVE ITEMS, TOTALLING
$8,305.
YOU CONTEND THAT THE DESCRIPTIVE LITERATURE WHICH VELONEX SUBMITTED
PURSUANT TO SECTION C.23 (ABOVE) RESTRICTED ITS BID AND RENDERED IT
PATENTLY NONRESPONSIVE, AND THAT AN AWARD SHOULD THEREFORE BE MADE TO
YOU AS THE LOWEST RESPONSIVE BIDDER.
YOU OBJECT SPECIFICALLY TO THE INCLUSION IN VELONEX'S DESCRIPTIVE
LITERATURE OF THE NOTATION "ALL SPECIFICATIONS ARE GIVEN WHEN OPERATING
INTO A 200 OHM RESISTIVE LOAD," SINCE THE REQUIREMENTS OF THE
SOLICITATION DO NOT RESTRICT PERFORMANCE SOLELY TO A 200 OHM RESISTIVE
LOAD. YOU STATE THAT SINCE THE COBER MODEL 605P MAKES NO SUCH
RESTRICTION, IT IS A SUPERIOR PRODUCT WITH A GREATER OPERATING RANGE,
AND YOU CONTEND THAT IF YOUR BID COULD HAVE INCLUDED THE SAME
RESTRICTIVE FEATURE AS COBER'S IT WOULD HAVE ENTAILED A REDUCED PRICE.
PARAGRAPHS F.1.2 AND F.2.1 OF THE SOLICITATION SPECIFY MAXIMUM OUTPUT
VOLTAGES OF 2000 VOLTS, AND PARAGRAPHS F.1.3 AND F.2.2 CALL FOR MAXIMUM
OUTPUT CURRENTS OF 10 AMPERES. THE NAVAL ORDNANCE LABORATORY TECHNICAL
PERSONNEL POINT OUT THAT BY UTILIZING COMMON ENGINEERING KNOWLEDGE AND
PRACTICES, A LOAD IMPEDANCE OF 200 OHMS IS EASILY DERIVED BY DIVIDING
THE 2000 VOLT MAXIMUM SPECIFIED BY THE SOLICITATION BY THE 10 AMPERES
MAXIMUM SPECIFIED BY THE SOLICITATION. IT IS THEREFORE THEIR OPINION
THAT THE STIPULATION IN VELONEX'S LITERATURE DID NOT CONSTITUTE A
RESTRICTIVE DEFINITION OF THE SPECIFICATIONS BUT MERELY ONE OF
REDUNDANCE OR SUPERFLUITY, AND THEY FURTHER ADVISED THAT VELONEX'S BID
WAS TECHNICALLY ACCEPTABLE IN ALL OTHER RESPECTS.
IT HAS LONG BEEN RECOGNIZED THAT THE FACTUAL DETERMINATION AS TO
WHETHER THAT WHICH IS OFFERED BY THE BIDDER CONFORMS TO THE
SPECIFICATIONS IS WITHIN THE PROVINCE OF THE CONTRACTING AGENCY. 17
COMP. GEN. 554, 557 (1938). MORE RECENTLY WE HAVE MAINTAINED THAT A
"CONFLICT OF TECHNICAL OPINIONS CANNOT BE RESOLVED BY OUR OFFICE. TO DO
SO WOULD INVOLVE OUR OFFICE AS AN ARBITER OF TECHNICAL DISPUTES AS TO
WHICH WE DO NOT HAVE THE NECESSARY EXPERTISE. WE THEREFORE ARE REQUIRED
TO RELY UPON THE JUDGMENT OF ENGINEERING PERSONNEL OF THE PROCURING
AND/OR REQUESTING ACTIVITY." B-169007, JULY 27, 1970.
RENDERING FURTHER SUPPORT TO THE CONCLUSION OF THE NAVAL ORDNANCE
LABORATORY PERSONNEL IS THE FACT THAT YOUR OWN INSTRUCTION MANUAL FOR
THE MODEL 605 HIGH POWER PULSE GENERATOR STIPULATES THAT A 200 OHM LOAD
SHOULD BE USED WHEN PERFORMING TESTS ON YOUR GENERATOR (SEE PP. 4, 22
AND 25 OF THE MANUAL).
YOUR ALLEGATION THAT THE COBER MODEL 650P HAS A GREATER OPERATING
TOLERANCE IS IMMATERIAL, SINCE THE TECHNICAL PERSONNEL HAVE DETERMINED
THAT VELONEX'S MODEL IS RESPONSIVE TO EVERY SPECIFICATION SET FORTH IN
THE SOLICITATION. WHERE, AS IN THIS CASE, THE LOW BID MEETS THE MINIMUM
REQUIREMENTS PRESCRIBED IN AN INVITATION FOR BIDS, THE FACT THAT THE
PRODUCT OFFERED BY ANOTHER BIDDER MAY BE SUPERIOR TO THAT OFFERED BY THE
LOW BIDDER DOES NOT PRECLUDE CONSIDERATION OF THE LOW BID. THE
PROCUREMENT AGENCIES ARE ONLY REQUIRED TO PREPARE SPECIFICATIONS
DESCRIBING THEIR ACTUAL NEEDS, RATHER THAN THE MAXIMUM QUALITY
OBTAINABLE, SINCE THE PUBLIC ADVERTISING STATUTES DO NOT AUTHORIZE AN
AGENCY TO PAY A HIGHER PRICE FOR AN ARTICLE WHICH MAY BE SUPERIOR TO ONE
THAT ADEQUATELY MEETS ITS NEEDS. 48 COMP. GEN. 403 (1968).
ACCORDINGLY, YOUR PROTEST MUST BE DENIED.
B-160778, FEB 5, 1971
CONTRACTS - DAVIS-BACON ACT - WITHHELD FUNDS
REAFFIRMING PRIOR DECISION DIRECTING THE SUM OF $410.47, WITHHELD TO
COVER ALLEGED VIOLATIONS OF THE DAVIS-BACON ACT, BE DISTRIBUTED BY THE
DEPARTMENT OF THE ARMY TO UNPAID WORKERS.
DECISIONS OF THE GAO ARE REVIEWED BY SEVERAL STAFF MEMBERS; THERE IS
NO BASIS FOR THE CHARGE THAT BIAS AND LACK OF GOOD FAITH CONTRIBUTED TO
THE RESULT IN THIS CASE.
TO SOUTHWEST ENGINEERING COMPANY, INC.:
REFERENCE IS MADE TO YOUR LETTER OF JANUARY 12, 1971, REQUESTING
REVIEW OF YOUR CLAIM FOR THE SUM OF $410.47, WITHHELD TO COVER ALLEGED
VIOLATIONS OF THE DAVIS-BACON ACT UNDER CONTRACT NO.
DA-23-028-ENG-7904. THE SUM, REPRESENTING UNPAID WAGES DUE TO 13
WORKERS, WAS FORWARDED TO OUR OFFICE BY THE DEPARTMENT OF THE ARMY AND
WAS AUTHORIZED TO BE DISTRIBUTED IN ACCORDANCE WITH THE DAVIS-BACON ACT
BY OUR DECISION B-160778, DATED AUGUST 19, 1970.
YOU NOW ALLEGE THAT THE ATTORNEY TO WHOM YOUR CLAIM WAS ASSIGNED
RENDERED A DECISION WHICH WAS ARBITRARY, NOT BASED UPON THE FACTS, AND
NOT RENDERED IN GOOD FAITH. YOU THEREFORE REQUEST THAT THE ENTIRE
MATTER BE REVIEWED BY AN IMPARTIAL, UNBIASED PERSON WHO IS NOT ENTIRELY
SYMPATHETIC TO THE UNION LABOR MOVEMENT AND WHO WILL RENDER A DECISION
BASED ON THE FACTS AS THEY EXIST.
THE ATTORNEY MENTIONED IN YOUR LETTER OF JANUARY 12, 1971, WAS
RESPONSIBLE FOR THE DECISION ONLY TO THE EXTENT OF SUBMITTING A
SUGGESTED COURSE OF ACTION IN THE CASE. OUR DECISION OF AUGUST 19,
1970, REPRESENTED THE VIEWS OF THE OFFICE AND YOU MAY BE ASSURED THAT
THOROUGH AND CAREFUL CONSIDERATION WAS GIVEN TO THE FACTS OF RECORD BY
SEVERAL MEMBERS OF MY STAFF BEFORE REJECTION OF YOUR CLAIM.
WHILE DECISIONS OF THIS OFFICE ARE ALWAYS SUBJECT TO RECONSIDERATION
IF ERROR OF FACT OR LAW IS ALLEGED, IT IS INCUMBENT UPON THE REQUESTER
TO IDENTIFY THE SPECIFIC ERRORS ON WHICH THE REQUEST IS BASED. WE SEE
NO BASIS FOR DEPARTING FROM THAT PROCEDURE IN THE INSTANT CASE, AND
SINCE YOU HAVE FAILED TO IDENTIFY ANY ERRORS OF EITHER FACT OR LAW IN
OUR DECISION AS RENDERED, WE MUST DENY YOUR REQUEST FOR RECONSIDERATION
ON THE PRESENT RECORD.
B-168987, FEB 5, 1971
CONTRACTS
ADVISING THAT UPON RECONSIDERATION, THE GAO WILL PAY AMETEK, INC.,
$1,840 CLAIMED FOR SERVICES PERFORMED FOR THE SUPPLY AND INSTALLATION OF
FIVE SETS OF LOADING HOPPERS FOR THE VETERANS ADMINISTRATION HOSPITAL,
HUSTON, TEXAS.
TO MR. ALPHONSE KENISON:
REFERENCE IS MADE TO YOUR LETTER OF JANUARY 21, 1971, INQUIRING AS TO
THE STATUS OF OUR RECONSIDERATION OF OUR DECISION OF APRIL 3, 1970, IN
WHICH WE DISALLOWED A CLAIM FOR $1,840 BY AMETEK, INC., DUE FOR SERVICES
PERFORMED UNDER CONTRACT NO. V580P-1471, FOR THE SUPPLY AND
INSTALLATION OF FIVE SETS OF LOADING HOPPERS FOR THE VETERANS
ADMINISTRATION HOSPITAL, HOUSTON, TEXAS.
UPON RECONSIDERATION OF THIS MATTER, INCLUDING THE ADDITIONAL
INFORMATION SUBMITTED, WE HAVE DIRECTED OUR CLAIMS DIVISION TO PAY
AMETEK'S CLAIM.
B-170135, FEB 5, 1971
BID PROTEST - BID RESPONSIVENESS - DEVIATIONS - TWO STEP PROCUREMENT
DENIAL OF PROTEST OF VIRGINIA ELECTRONICS COMPANY, INC., AGAINST THE
REJECTION OF ITS PROPOSAL BY THE NAVAL ELECTRONIC SYSTEMS COMMAND IN
CONNECTION WITH A CONTRACT FOR THREE TYPES OF HIGH FREQUENCY BROAD BAND
ANTENNA COUPLER GROUPS ISSUED UNDER A TWO-STEP PROCUREMENT AND AWARD TO
AIKEN INDUSTRIES, LOW BIDDER.
THAT MATCHED PAIRS OF TRANSISTORS WAS AN UNDESIRABLE FEATURE MAKING
PROTESTANT'S BID UNACCEPTABLE, AND NOT CAPABLE OF BEING MADE ACCEPTABLE,
IS A MATTER OF JUDGMENT IN CONNECTION WITH WHICH THE GAO WILL NOT
SUBSTITUTE ITS OWN VIEWS IN PLACE OF PROCURING AGENCY'S.
PROCEEDING TO THE SECOND STEP OF THE PROCUREMENT WITHOUT NOTIFYING
PROTESTANT THAT ITS PROPOSAL WAS UNACCEPTABLE WAS CLEARLY IMPROPER UNDER
ASPR 2-503.1(F) BUT SUCH AN OMISSION HAS CONSISTENTLY BEEN HELD TO BE A
PROCEDURAL MATTER WHICH DOES NOT GO TO THE ESSENCE OF THE PROCUREMENT.
THE USE OF A TWO-STEP PROCUREMENT WAS JUSTIFIED BECAUSE THE ITEMS
BEING PROCURED INVOLVED RADICAL DEPARTURES FROM ANY EXISTING
OFF-THE-SHELF ITEMS.
TO STRASSER, SPIEGELBERG, FRIED, FRANK & KAMPELMAN:
WE REFER TO YOUR LETTERS OF JUNE 23, 1970, AUGUST 11, 1970, AND
SEPTEMBER 23, 1970, RELATING TO YOUR PROTEST ON BEHALF OF VIRGINIA
ELECTRONICS COMPANY, INC., HEREINAFTER REFERRED TO AS VELCO, UNDER A
TWO-STEP PROCUREMENT RFP NO. N00039-70-R-0025(Q) AND IFB NO.
N00039-70-B-0025.
STEP ONE OF THE PROCUREMENT, RFP NO. N00039-70-R-0025(Q) WAS ISSUED
ON APRIL 8, 1970, BY THE NAVAL ELECTRONIC SYSTEMS COMMAND CALLING FOR
TECHNICAL PROPOSALS FOR THREE TYPES OF HIGH FREQUENCY BROAD BAND ANTENNA
COUPLER GROUPS TO BE RECEIVED BY MAY 7, 1970, AND FOURTEEN PROPOSALS
WERE TIMELY RECEIVED. THE CONTRACTING OFFICER DETERMINED THAT NINE OF
THE PROPOSALS, INCLUDING THAT OF VELCO, WERE UNACCEPTABLE AND WERE NOT
SUSCEPTIBLE OF BEING MADE ACCEPTABLE. THE CONTRACTING OFFICER FURTHER
DETERMINED THAT THERE WERE SUFFICIENT ACCEPTABLE PROPOSALS TO PROVIDE
ADEQUATE PRICE COMPETITION IN THE SECOND STEP OF THE PROCUREMENT.
WITHOUT NOTIFYING THE UNSUCCESSFUL PROPOSERS AS PROVIDED IN ASPR
2-503.1(F), THE CONTRACTING OFFICER PROCEEDED TO STEP TWO OF THE
PROCUREMENT AND ISSUED IFB NO. N00039-70-B-0025 ON JUNE 16, 1970, TO THE
FIVE ACCEPTABLE PROPOSERS: AIKEN INDUSTRIES; NATIONAL RADIO CO., INC.;
PICKARD & BURNS DIVISION OF LTV; LITTON SYSTEMS, INC.; AND WESTINGHOUSE
CORPORATION.
BIDS WERE RECEIVED FROM FOUR OF THE FIVE COMPANIES WHICH RECEIVED THE
SECOND STEP INVITATION FOR BIDS AND WERE OPENED ON JUNE 26, 1970. THE
LOW BID WAS FROM AIKEN INDUSTRIES ON ALL THREE ITEMS.
IN YOUR PROTEST OF JUNE 23, 1970, ON BEHALF OF VELCO, YOU CONTENDED
THAT THE MULTICOUPLERS CALLED FOR IN THE SUBJECT PROCUREMENT ARE SIMILAR
IN DESIGN AND CONSTRUCTION TO MULTICOUPLERS THEN BEING PRODUCED BY VELCO
UNDER ANOTHER CONTRACT WITH THE NAVAL ELECTRONIC SYSTEMS COMMAND. YOU
STATED THAT IN ADDITION TO DESCRIPTIVE MATERIAL, VELCO SUBMITTED TEST
RESULTS SHOWING ITS MODIFIED MULTICOUPLERS COULD MEET OR EXCEED ALL
REQUIREMENTS FOR ALL THREE TYPES AND THEREFORE SHOULD HAVE BEEN
CONSIDERED FULLY RESPONSIVE AND ACCEPTABLE. IN THE ALTERNATIVE, YOU
SUBMITTED THAT EVEN IF VELCO'S PROPOSAL WERE UNACCEPTABLE, BUT
REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE, VELCO WAS ENTITLED AS A
MATTER OF LAW TO AN OPPORTUNITY TO PROVIDE ADDITIONAL INFORMATION. AS A
FURTHER ALTERNATIVE, YOU SUBMITTED THAT TWO-STEP PROCUREMENT WAS
IMPROPER SINCE THE ITEMS REQUIRED WERE SIMILAR TO ITEMS IN PRODUCTION
AND THE ITEMS CURRENTLY REQUIRED WERE CAPABLE OF BEING PROPERLY
DESCRIBED FOR FORMAL ADVERTISING. UNDER YOUR FIRST TWO ARGUMENTS, YOU
REQUESTED CANCELLATION OF STEP TWO OF THE PROCUREMENT, AND UNDER THE
THIRD ARGUMENT YOU REQUESTED CANCELLATION OF THE ENTIRE SOLICITATION.
YOU ALSO SUBMITTED A COMPARISON BETWEEN THE MULTICOUPLER BEING PRODUCED
BY VELCO UNDER ANOTHER CONTRACT AND THE THREE TYPES SET FORTH IN THE
CURRENT PROCUREMENT WHICH SHOWED COMPLIANCE WITH A NUMBER OF
REQUIREMENTS BUT NOT WITH RESPECT TO INTERMODULATION, VOLTAGE RANGE, AND
MEAN TIME BETWEEN FAILURES.
THE ADMINISTRATIVE REPORT OF JULY 16, 1970, A COPY OF WHICH WAS
FURNISHED TO YOU, STATED THAT THE DIRECTOR OF CONTRACTS DETERMINED, IN
ACCORDANCE WITH ASPR 2-407.8, THAT THE MULTICOUPLERS WERE URGENTLY
REQUIRED AND THAT PERFORMANCE WOULD BE UNDULY DELAYED BY FAILURE TO MAKE
AWARD PROMPTLY. ACCORDINGLY, AWARD WAS MADE ON JUNE 30, 1970, TO AIKEN
INDUSTRIES AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. ON THE SAME
DATE, THE CONTRACTING OFFICER SENT A LETTER TO VELCO OUTLINING TEN
REASONS WHY ITS PROPOSAL WAS CATEGORIZED AS UNACCEPTABLE AS FOLLOWS:
"A. THE PROPOSAL WAS VAGUE IN THE AREAS OF OVERALL ENGINEERING
APPROACH TO THE PROBLEM AND HOW SPECIFIC PERFORMANCE PARAMETERS WOULD BE
MET.
B. MATCHED PAIRS OF TRANSISTORS ARE PROPOSED FOR THE RF AMPLIFIER
WHICH IS IN VIOLATION OF PARA. 3.2.8 OF MIL-A-28729(EC). IN ADDITION
THE PROPOSAL DOES NOT SPECIFICALLY STATE THAT PLASTIC INCAPSULATED
TRANSISTORS WILL NOT BE USED.
C. THE PROPOSAL DOES NOT STATE THAT MATING CONNECTORS WILL BE
SUPPLIED FOR THE INPUT AND OUTPUT CONNECTORS AS REQUIRED IN PARA. 3.2.15
OF MIL-A-28729(EC).
D. THE REQUIREMENT FOR TEST POINTS IN PARA. 3.2.6 OF MIL-A-28729 WAS
NOT ADDRESSED.
E. MATERIAL AND FINISH REQUIREMENTS OF PARA. 3.2.4 AND 3.2.14 OF
MIL-A-28729(EC) WERE NOT ADDRESSED.
F. PARAGRAPHS 3.2.23 THRU 3.2.29 OF MIL-A-28729(EC) CONCERNING
CIRCUIT CONSTRUCTION WERE NOT ADDRESSED.
G. ENVIRONMENTAL REQUIREMENTS OF PARAGRAPHS 3.4.1 THRU 3.4.4 OF
MIL-A-28729 WERE NOT ADDRESSED.
H. IT IS ONLY VAGUELY IMPLIED THAT THE EXTERNAL CONSTRUCTION
REQUIREMENTS OF PARAGRAPHS 3.2.17, 3.2.17.1, 3.2.17.4 AND 3.2.18 OF
MIL-A-28729(EC) WILL BE MET.
I. COMPLIANCE WITH REQUIREMENTS FOR THE PRIMARY POWER CONNECTOR OF
PARA. 3.2.19 OF MIL-A-28729(EC) IS ONLY IMPLIED.
J. NO DEFINITE AND EXPLICIT COMPLIANCE WITH INTERMODULATION AND PHASE
CORRELATION AS REQUIRED IN PARAGRAPHS 3.5.16 AND 3.5.18 OF
MIL-A-28729(EC) IS STATED."
IN ADDITION TO THESE TEN REASONS FOR REJECTING VELCO'S PROPOSAL, THE
ADMINISTRATIVE REPORT POINTED OUT THAT THE SIDE BY SIDE COMPARISON OF
THE SPECIFICATIONS OF THE CU-1382D MULTICOUPLER BEING PRODUCED BY VELCO
UNDER ANOTHER CONTRACT WITH THE REQUIREMENTS OF THE THREE TYPES OF
MULTICOUPLERS IN THIS PROCUREMENT, WHICH YOU SUBMITTED AS SHOWING
COMPLIANCE, ACTUALLY SHOWED A LACK OF COMPLIANCE AND SHOWED THAT THE
REQUIREMENTS OF THE PRESENT PROCUREMENT ARE CONSIDERABLY MORE RIGID AND
ADVANCED. IN THE OPINION OF THE NAVAL ELECTRONIC SYSTEMS COMMAND, THE
UPGRADING IN REQUIREMENTS CREATED A NEED FOR AN ENGINEERING APPROACH
AMOUNTING TO A RADICAL REDESIGN WHICH IS DIFFICULT OF ACHIEVEMENT IN
COMPARISON TO THE REQUIREMENTS OF THE PRODUCTION MODEL ON WHICH VELCO'S
PROPOSAL WAS BASED. ALTHOUGH VELCO PRESENTED WITH ITS PROPOSAL CERTAIN
TESTS RESULTS, WHICH IT STATED WERE OBTAINED FROM AN ENGINEERING MODEL
BASED ON ITS CU-1382D MULTICOUPLER MODIFIED TO MEET THE REQUIREMENTS OF
THE PRESENT PROCUREMENT, THE ADMINISTRATIVE REPORT STATED THAT DESPITE
THE REQUIREMENTS AND CRITERIA FOR TECHNICAL DISSERTATION, WHICH REQUIRED
STIPULATION OF COMPLETE PRELIMINARY DESIGN AND ENGINEERING APPROACHES,
THE VELCO PROPOSAL WAS DEVOID OF CIRCUITRY WHICH WOULD ENABLE GOVERNMENT
EVALUATORS TO DETERMINE THE BASES ON WHICH THE TEST RESULTS WERE
OBTAINED. THE LACK OF CIRCUITRY ALSO PREVENTED THE EVALUATORS FROM
DETERMINING WHETHER THE VELCO ENGINEERING APPROACH WOULD MEET THE
REQUIREMENTS STATED IN THE APPLICABLE MILITARY SPECIFICATION.
YOUR RESPONSE TO THE ADMINISTRATIVE REPORT OF JULY 16, 1970, WHICH
WAS SUBMITTED ON AUGUST 11, 1970, REPEATED THE THREE BASES OF PROTEST
CONTAINED IN YOUR EARLIER LETTER AND IN ADDITION, CONTENDED THAT THE
AWARD WAS IMPROPER IN THAT AIKEN DID NOT SUBMIT AN ACCEPTABLE TECHNICAL
PROPOSAL, THAT AWARD TO AIKEN SHOULD NOT HAVE BEEN MADE BECAUSE NOTICE
OF REJECTION OF VELCO'S PROPOSAL WAS NOT MADE PROMPTLY, AND WRITTEN
NOTICE OF INTENTION TO PROCEED WITH AWARD PRIOR TO RESOLUTION OF YOUR
PROTEST WAS NOT GIVEN. YOUR RESPONSE ALSO DISPUTED, POINT BY POINT, THE
TEN REASONS GIVEN BY THE NAVY FOR REJECTION OF VELCO'S TECHNICAL
PROPOSAL, STATING THAT SEVEN OF THE TEN POINTS RAISED NO REAL TECHNICAL
ISSUES AND THERE WAS NO REASON TO BELIEVE THAT VELCO COULD NOT OR WOULD
NOT COMPLY WITH THE SPECIFICATIONS.
THE SUPPLEMENTAL ADMINISTRATIVE REPORT OF AUGUST 26, 1970, DESCRIBED
THE AIKEN PROPOSAL AS CONTAINING A LISTING AND DETAILED DESCRIPTION OF
ALL COMPONENTS USED IN THE AMPLIFIER AND OUTPUT ISOLATOR CIRCUITS
TOGETHER WITH SCHEMATICS FULLY OUTLINING THE BASIC PROPOSAL AND WAS, IN
ALL RESPECTS, FULLY RESPONSIVE. THE NONSTANDARD PARTS AIKEN PROPOSED TO
USE IN THE RF TRANSFORMERS WERE PERMITTED BY THE APPLICABLE
SPECIFICATIONS AND WERE NOT CONSTRUED TO BE THE UNACCEPTABLE TYPE OF
MATCHED PAIRS OF TRANSISTORS USED IN THE VELCO PROPOSAL.
YOUR RESPONSE TO THE SUPPLEMENTAL ADMINISTRATIVE REPORT, SUBMITTED ON
SEPTEMBER 23, 1970, CONTENDED THAT THE TRANSISTORS PROPOSED BY VELCO
SHOULD NOT HAVE BEEN CONSIDERED TO BE THE UNACCEPTABLE TYPE OF MATCHED
PAIRS TRANSISTORS BUT SHOULD INSTEAD BE CONSIDERED AS AN ALLOWABLE TYPE
OF NONSTANDARD TRANSISTORS. YOU FURTHER CONTEND THAT IF VELCO'S
PROPOSED TRANSISTORS WERE DETERMINED TO BE MATCHED, THE SAME DEFINITION
SHOULD APPLY TO AIKEN'S NONSTANDARD TRANSISTORS AND ITS PROPOSAL SHOULD
ALSO BE CONSIDERED AS UNACCEPTABLE. YOU ALSO CONTENDED THAT THE THREE
MULTICOUPLERS SHOULD NOT HAVE BEEN COMBINED IN THE SAME PROCUREMENT AND
THAT THE TWO-STEP METHOD OF PROCUREMENT WAS INAPPROPRIATE.
IN CONNECTION WITH YOUR FIRST CONTENTION THAT VELCO'S TECHNICAL
PROPOSAL WAS FULLY RESPONSIVE AND ACCEPTABLE, WE HAVE EXAMINED THE
REQUEST FOR UNPRICED TECHNICAL PROPOSALS AS WELL AS THE APPLICABLE
MILITARY STANDARDS. ALTHOUGH THERE IS NO SPECIFIC PROHIBITION AGAINST
THE USE OF MATCHED PAIRS OF TRANSISTORS, PARAGRAPH 3.2.8 OF
MIL-A-28729(EC) STATES THAT SEMICONDUCTOR DEVICES, I.E., TRANSISTORS,
SHALL BE SELECTED FROM APPROVED TYPES IN ACCORDANCE WITH MIL-E-16400,
WHICH MAKES NO PROVISION FOR USE OF MATCHED PAIRS. THEREFORE, MATCHED
PAIRS OF TRANSISTORS ARE NONSTANDARD DEVICES FOR WHICH WRITTEN APPROVAL
MUST BE REQUESTED AND RECEIVED FROM THE AGENCY CONCERNED, UNDER
PARAGRAPH 3.4.31.2 OF MIL-E-16400. SINCE THE NAVY HAS DETERMINED THAT
THE USE OF MATCHED PAIRS OF TRANSISTORS IS UNDESIRABLE IN THIS CASE, THE
WRITTEN APPROVAL WOULD NOT BE FORTHCOMING AND VELCO'S PROPOSED
MULTICOUPLERS COULD NOT MEET THE PERFORMANCE STANDARDS SET FORTH IN THE
REQUEST WITHOUT RADICAL REDESIGN OF THEIR CIRCUITRY TO ELIMINATE USE OF
MATCHED PAIRS OF TRANSISTORS.
WE DO NOT PROPOSE TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE
PROCURING AGENCY, IN THIS INSTANCE, ON THE UNDESIRABILITY OF USING
MATCHED PAIRS OF TRANSISTORS AND THEREFORE WE FIND NO BASIS ON WHICH TO
OBJECT TO THE NAVY'S DETERMINATION THAT VELCO'S PROPOSAL WAS NOT
ACCEPTABLE AND WAS NOT SUSCEPTIBLE OF BEING MADE ACCEPTABLE. MOREOVER,
SINCE VELCO'S PROPOSAL WAS UNACCEPTABLE IN THIS ONE SIGNIFICANT ELEMENT,
WE DO NOT CONSIDER IT TO BE MATERIAL TO THE ISSUE OF ACCEPTABILITY
WHETHER VELCO COULD, OR WOULD, CURE THE REMAINING DEFECTS IN ITS
PROPOSAL, PARTICULARLY IN VIEW OF THE FACT THAT THE REQUEST ADVISED
OFFERORS, IN ACCORDANCE WITH ASPR 2-503.1(VII), TO SUBMIT PROPOSALS
WHICH WERE FULLY AND CLEARLY ACCEPTABLE WITHOUT ADDITIONAL EXPLANATION
OR INFORMATION. BY THE TERMS OF THE REQUEST AND THE ABOVE SECTION OF
ASPR, THE GOVERNMENT WAS ENTITLED TO MAKE A FINAL DETERMINATION WHETHER
A PROPOSAL WAS ACCEPTABLE OR UNACCEPTABLE SOLELY ON THE BASIS OF THE
PROPOSAL AS SUBMITTED AND TO PROCEED DIRECTLY WITH THE SECOND STEP OF
THIS PROCUREMENT WITHOUT REQUESTING OR PERMITTING THE SUBMISSION OF
FURTHER INFORMATION FROM ANY OFFEROR.
ALTHOUGH YOU HAVE CONTENDED IN THE ALTERNATIVE THAT EVEN IF VELCO'S
PROPOSAL WERE UNACCEPTABLE, BUT REASONABLY SUSCEPTIBLE OF BEING MADE
ACCEPTABLE, VELCO WAS ENTITLED AS A MATTER OF LAW TO AN OPPORTUNITY TO
BE ALLOWED TO PROVIDE SUCH ADDITIONAL INFORMATION, THE FINDING THAT
VELCO'S PROPOSAL WAS UNACCEPTABLE AND NOT REASONABLY SUSCEPTIBLE OF
BEING MADE ACCEPTABLE WAS A FACTUAL DETERMINATION WITHIN THE
ADMINISTRATIVE DISCRETION OF THE CONTRACTING AGENCY, AND SUCH A
DETERMINATION PRECLUDED FURTHER PARTICIPATION BY VELCO IN THIS
PROCUREMENT. IN ANY EVENT, THE FACT THAT VELCO HAD PREVIOUSLY PRODUCED
SIMILAR EQUIPMENT TO LESS STRINGENT SPECIFICATIONS COULD NOT GIVE RISE
TO A VESTED RIGHT TO PARTICIPATE IN BOTH STEPS OF THIS PROCUREMENT WHEN
NO ACCEPTABLE PROPOSAL WAS SUBMITTED BY VELCO IN THE FIRST STEP, SINCE
EACH PROCUREMENT MUST BE CONSIDERED SEPARATELY ON THE BASIS OF THE
SPECIFICATIONS SET FORTH IN EACH INSTANCE.
IN THIS CONNECTION, THE NAVY'S DETERMINATION THAT THERE WERE
SUFFICIENT ACCEPTABLE PROPOSALS RECEIVED IN THE FIRST STEP TO PROVIDE
ADEQUATE PRICE COMPETITION IN THE SECOND STEP IS A JUDGMENT DECISION
WHICH IS ADEQUATELY SUPPORTED BY THE RECORD IN THIS CASE, AND WE ARE
THEREFORE UNABLE TO AGREE WITH YOUR POSITION ON THIS POINT.
YOUR CONTENTION THAT THE NAVY ACTED IMPROPERLY IN PROCEEDING TO THE
SECOND STEP OF THE PROCUREMENT WITHOUT NOTIFYING VELCO THAT ITS PROPOSAL
WAS UNACCEPTABLE IS WELL-FOUNDED. ASPR 2-503.1(F) INCLUDES PROMPT
NOTIFICATION TO AN OFFEROR THAT A TECHNICAL PROPOSAL IS UNACCEPTABLE AS
PART OF STEP ONE, AND ASPR 2-503.2 PROVIDES FOR CONDUCTING A FORMALLY
ADVERTISED PROCUREMENT FROM THE ACCEPTABLE PROPOSERS UPON COMPLETION OF
STEP ONE. HOWEVER, IN THE DECISIONS OF OUR OFFICE ON THIS POINT WHICH
YOU CITED (B-164774, AUGUST 12, 1968; B-149055, JULY 18, 1962; AND
B-165457, MARCH 18, 1969) WE HAVE TREATED THE FAILURE OF A CONTRACTING
OFFICER TO GIVE PROMPT NOTIFICATION OF AN UNACCEPTABLE PROPOSAL UNDER
PART ONE OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT AS A PROCEDURAL
MATTER WHICH DOES NOT GO TO THE ESSENCE OF THE PROCUREMENT. THE FAILURE
TO GIVE PROMPT NOTICE CANNOT RENDER AN UNACCEPTABLE PROPOSAL ACCEPTABLE
NOR CAN IT VITIATE THE ACCEPTABILITY OF THOSE PROPOSALS WHICH ARE IN
ACCORDANCE WITH THE SPECIFICATIONS.
WHILE WE AGREE THAT THE NAVY'S NOTIFICATION OF VELCO'S REJECTION WAS
LESS THAN PROMPT, WE ARE NOT PERSUADED THAT VELCO SUFFERED ANY PREJUDICE
AS A RESULT OF THE DELAY, SINCE IT WAS ULTIMATELY ADVISED OF THE
REJECTION AND THE REASONS FOR THE ACTION AND HAD SUBMITTED ITS PROTEST
PRIOR TO RECEIPT OF SUCH NOTICE OR AWARD OF A CONTRACT. IN THE RELATED
MATTER OF THE NAVY'S FAILURE TO GIVE VELCO WRITTEN NOTICE OF ITS
INTENTION TO PROCEED WITH AN AWARD WHILE THE PROTEST WAS PENDING, WE DO
NOT REGARD SUCH FAILURE AS HAVING ANY EFFECT ON THE VALIDITY OF THE
AWARD SINCE VELCO HAD ACTUAL KNOWLEDGE OF THIS FACT AS A RESULT OF ITS
CONVERSATION WITH THE PROCURING AGENCY ON THE DAY FOLLOWING AWARD. IT
DOES NOT APPEAR THAT VELCO WOULD HAVE BEEN IN ANY DIFFERENT POSITION BY
RECEIVING SUCH WRITTEN NOTICE, EITHER BEFORE OR AFTER AWARD. WE HAVE,
HOWEVER, RECOMMENDED BY SEPARATE LETTER TO THE SECRETARY OF THE NAVY
THAT IMMEDIATE STEPS BE TAKEN TO ELIMINATE THIS RECURRING PROBLEM OF
FAILURE TO GIVE PROMPT NOTICE IN FUTURE TWO-STEP PROCUREMENTS.
YOUR CONTENTION THAT TWO-STEP FORMAL ADVERTISING IS INAPPROPRIATE IN
THIS INSTANCE MUST BE CONSIDERED IN CONNECTION WITH THE ASPR PROVISIONS
REGARDING THIS TYPE OF PROCUREMENT. ASPR 2-501 DESCRIBES TWO-STEP
FORMAL ADVERTISING AS A METHOD OF PROCUREMENT DESIGNED TO EXPAND THE USE
AND OBTAIN THE BENEFITS OF FORMAL ADVERTISING WHERE INADEQUATE
SPECIFICATIONS PRECLUDE THE USE OF CONVENTIONAL ADVERTISING AND STATES
IT IS ESPECIALLY USEFUL IN PROCUREMENTS REQUIRING TECHNICAL PROPOSALS,
ESPECIALLY THOSE FOR COMPLEX ITEMS. ASPR 2-502 SETS FORTH THE
CONDITIONS FOR USE AND REQUIRES THE PRESENCE OF FIVE CONDITIONS AS
FOLLOWS:
"2-502 CONDITIONS FOR USE.
(A) TWO-STEP FORMAL ADVERTISING SHALL BE USED IN PREFERENCE TO
NEGOTIATION WHEN ALL OF THE FOLLOWING CONDITIONS ARE PRESENT, UNLESS
OTHER FACTORS REQUIRE THE USE OF NEGOTIATION, E.G., 3-213;
(I) AVAILABLE SPECIFICATIONS OR PURCHASE DESCRIPTIONS ARE NOT
SUFFICIENTLY DEFINITE OR COMPLETE OR MAY BE TOO RESTRICTIVE, AND THE
LISTING OF THE SALIENT CHARACTERISTICS IN A 'BRAND NAME OR EQUAL'
DESCRIPTION WOULD LIKEWISE BE TOO RESTRICTIVE, TO PERMIT FULL AND FREE
COMPETITION WITHOUT TECHNICAL EVALUATION, AND ANY NECESSARY DISCUSSION,
OF THE TECHNICAL ASPECTS OF THE REQUIREMENT TO INSURE MUTUAL
UNDERSTANDING BETWEEN EACH SOURCE AND THE GOVERNMENT;
(II) DEFINITE CRITERIA EXIST FOR EVALUATING TECHNICAL PROPOSALS, SUCH
AS DESIGN, MANUFACTURING, TESTING, AND PERFORMANCE REQUIREMENTS, AND
SPECIAL REQUIREMENTS FOR OPERATIONAL SUITABILITY AND EASE OF
MAINTENANCE;
(III) MORE THAN ONE TECHNICALLY QUALIFIED SOURCE IS EXPECTED TO BE
AVAILABLE;
(IV) SUFFICIENT TIME WILL BE AVAILABLE FOR USE OF THE TWO-STEP
METHOD; AND
(V) A FIRM FIXED-PRICE CONTRACT OR A FIXED-PRICE CONTRACT WITH
ESCALATION WILL BE USED.
IN VIEW OF NAVY'S ADVICE THAT THE ITEMS BEING PROCURED INVOLVE
RADICAL DEPARTURES FROM ANY EXISTING OFF-THE-SHELF ITEMS, WE BELIEVE ALL
OF THE REQUIRED CONDITIONS SET OUT ABOVE ARE PRESENT IN THIS CASE. WE
THEREFORE SEE NO BASIS ON WHICH TO OBJECT TO THE ADMINISTRATIVE DECISION
TO USE TWO-STEP FORMAL ADVERTISING.
WITH RESPECT TO YOUR OBJECTION TO THE NAVY'S DETERMINATION TO
PURCHASE ALL THREE TYPES OF MULTICOUPLERS COVERED BY THIS CONTRACT FROM
ONE MANUFACTURER WHEN VELCO WAS ALREADY PRODUCING MULTICOUPLERS SIMILAR
TO TYPES I AND II, IT MUST BE NOTED THAT VELCO'S MULTICOUPLERS, ALTHOUGH
SIMILAR IN FUNCTION AND PERFORMANCE, INVOLVE THE USE OF MATCHED PAIRS OF
TRANSISTORS, WHICH USAGE WAS DETERMINED TO BE UNACCEPTABLE FOR THIS
REQUIREMENT. IN VIEW THEREOF, AND SINCE A PROTEST ON THIS BASIS SHOULD
PROPERLY BE FILED PRIOR TO PARTICIPATION IN STEP ONE OF THE PROCUREMENT,
WE SEE NO VALID BASIS TO JUSTIFY CANCELLATION OF THE CONTRACT AWARDED.
YOUR REMAINING CONTENTION IS THAT, IF USE OF MATCHED PAIRS OF
TRANSISTORS RENDERED VELCO'S PROPOSAL UNACCEPTABLE, AIKEN'S PROPOSAL
SHOULD ALSO HAVE BEEN CONSIDERED UNACCEPTABLE SINCE AIKEN ALSO PROPOSED
TO USE NONSTANDARD PARTS. WE HAVE EXAMINED THE DOCUMENTS SUBMITTED WITH
THE ADMINISTRATIVE REPORTS AS WELL AS THE APPLICABLE MILITARY
SPECIFICATIONS AND APPENDIX A OF AIKEN'S PROPOSAL WHICH LISTS THE PARTS
TO BE USED AND WE FIND NO SUPPORT FOR YOUR CONTENTION. WHILE IT IS
TRUE, AS YOU CONTEND, THAT MATCHED PAIRS OF TRANSISTORS ARE NONSTANDARD
PARTS, IT DOES NOT LOGICALLY FOLLOW THAT ALL NONSTANDARD PARTS MUST BE
MATCHED PAIRS OF TRANSISTORS. IN THESE CIRCUMSTANCES, WE ARE NOT
DISPOSED TO OBJECT TO THE NAVY'S DECISION THAT VELCO'S NONSTANDARD PARTS
ARE UNACCEPTABLE WHILE AIKEN'S ARE ACCEPTABLE.
ACCORDINGLY, FOR THE REASONS STATED, YOUR PROTEST AGAINST REJECTION
OF VELCO'S TECHNICAL
B-170812, FEB 5, 1971
CONTRACTS - REQUIREMENTS CONTRACTS - ESTIMATED NEEDS
DENIAL OF CLAIM FOR ADDITIONAL ORDERS SUFFICIENT TO FULFILL ITS
ESTIMATED QUANTITIES UNDER A REQUIREMENTS CONTRACT FOR PROTECTOR,
DUPLICATING STENCIL FILM, ISSUED BY THE GENERAL SERVICES ADMINISTRATION
TO FRANKEL MANUFACTURING COMPANY.
SINCE THE CONTRACT DID NOT CONTAIN A GUARANTEED MINIMUM CLAUSE AND
ALL QUANTITIES LISTED WERE ESTIMATES NOT TO BE CONSTRUED TO REPRESENT
ANY AMOUNT THE GOVERNMENT WOULD BE OBLIGATED TO PURCHASE, THE FAILURE OF
ACTUAL REQUIREMENTS TO CORRESPOND TO ESTIMATED NEEDS PROVIDES NO BASIS
FOR RECOVERY ABSENT A SHOWING THAT THE ESTIMATES WERE NOT BASED ON THE
BEST AVAILABLE INFORMATION OR MADE IN BAD FAITH.
TO FRANKEL MANUFACTURING COMPANY:
REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 11 AND DECEMBER 7,
1970, PROTESTING THE GOVERNMENT'S FAILURE TO ISSUE ORDERS SUFFICIENT TO
FULFILL ITS ESTIMATED QUANTITIES UNDER CONTRACT GS-00S-90679 AWARDED TO
YOU BY THE GENERAL SERVICES ADMINISTRATION (GSA), NEW YORK, NEW YORK.
INVITATION FOR BIDS (IFB) FPNSO-E7-0623-A WAS ISSUED NOVEMBER 17,
1969, BY THE FEDERAL SUPPLY SERVICE, GSA, NEW YORK, NEW YORK, FOR
PROTECTOR, DUPLICATING STENCIL FILM, ON A REQUIREMENTS BASIS FOR GSA
ZONES (SUPPLY DEPOTS) 1, 2, 3, AND 4. THE ESTIMATED QUANTITIES
SPECIFIED IN THE IFB WERE AS FOLLOWS:
ESTIMATED PEAK ESTIMATED QUANTITY
DESTINATION MONTHLY REQUIREMENTS CONTRACT PERIOD
ZONE 1 700 5,000
ZONE 2 300 2,200
ZONE 3 500 3,900
ZONE 4 200 1,600
"SCOPE OF CONTRACT," ARTICLE 1, PAGE 6 OF THE CONTRACT, PROVIDES AS
FOLLOWS:
" *** THE GENERAL SERVICES ADMINISTRATION IS OBLIGATED, EXCEPT IN
EXIGENCIES OR AS MAY BE OTHERWISE PROVIDED HEREIN, TO PURCHASE HEREUNDER
SUCH QUANTITIES AS MAY BE NEEDED FROM TIME TO TIME TO FILL ANY SUCH
SUPPLY DEPOT REQUIREMENT DETERMINED IN ACCORDANCE WITH THE CURRENTLY
APPLICABLE PROCUREMENT AND SUPPLY PROCEDURES. EXCEPT AS OTHERWISE
PROVIDED HEREIN, THE CONTRACTOR IS OBLIGATED TO DELIVER HEREUNDER ALL
SUCH QUANTITIES AS MAY BE SO ORDERED FROM TIME TO TIME. THE QUANTITIES
SHOWN REPRESENT THE ESTIMATED REQUIREMENTS FOR EACH ITEM DURING THE
CONTRACT PERIOD, ARE FURNISHED ONLY FOR THE INFORMATION OF OFFERORS, BUT
SHALL NOT BE CONSTRUED TO REPRESENT ANY AMOUNT WHICH THE GOVERNMENT
SHALL BE OBLIGATED TO PURCHASE UNDER THE CONTRACT NOR RELIEVE THE
CONTRACTOR OF HIS OBLIGATION TO FILL ALL ORDERS WHICH MAY BE PLACED
WITHIN CONTRACT TERMS."
ALSO, "MONTHLY SUPPLY POTENTIAL," ARTICLE 4, PAGE 7, PARAGRAPH 3,
FURTHER STATES:
"THE GOVERNMENT'S ESTIMATED PEAK MONTHLY AND ESTIMATED REQUIREMENTS
FOR THE PERIOD OF THIS CONTRACT ARE FURNISHED FOR THE INFORMATION OF
OFFERORS, BUT SHALL NOT BE CONSTRUED TO REPRESENT ANY AMOUNT WHICH THE
GOVERNMENT SHALL BE OBLIGATED TO PURCHASE UNDER THE CONTRACT (EXCEPT AS
MAY BE PROVIDED IN A GUARANTEED MINIMUM CLAUSE)."
YOUR FIRM WAS AWARDED THE CITED CONTRACT ON FEBRUARY 10, 1970, FOR
ZONES 2, 3, AND 4 AT A UNIT PRICE OF $1.60 PER BOX FOR THE PERIOD APRIL
1, 1970, THROUGH MARCH 31, 1971. THE CONTRACT DID NOT CONTAIN A
GUARANTEED MINIMUM CLAUSE.
YOU CONTEND THAT SINCE THE SPECIFICATIONS CALLED FOR PLIOFILM, WHICH
IS MANUFACTURED BY GOODYEAR TIRE AND RUBBER COMPANY, AND SINCE DELIVERY
WAS REQUIRED TO BE MADE WITHIN 30 (45) DAYS AFTER RECEIPT OF ORDER,
THESE CIRCUMSTANCES DICTATED ORDERING SUBSTANTIAL QUANTITIES OF PLIOFILM
BEFORE-HAND. YOU POINT OUT THAT IT TAKES GOODYEAR ABOUT 60 DAYS TO
PROCESS ANY ORDER FOR PLIOFILM.
BUT DUE TO A SUBSTANTIAL DECLINE IN DEMAND FOR THE PRODUCT, ORDERS
FOR THE FIRST 5 MONTHS OF THE CONTRACT WERE WELL BELOW ESTIMATED OR
EXPECTED QUANTITIES, AND HAVE NOT RISEN SIGNIFICANTLY SINCE. THEREFORE,
BY LETTER OF AUGUST 25, 1970, TO THE CONTRACTING OFFICER, YOU REQUESTED
THE GOVERNMENT TO GUARANTEE PURCHASE OF THE REMAINDER OF YOUR STOCK OF
5,840 BOXES. THIS REQUEST WAS DENIED BY THE CONTRACTING OFFICER BY
LETTER DATED SEPTEMBER 8, 1970.
YOU ALLEGE THAT THE INFORMATION RELATIVE TO THE ESTIMATED QUANTITIES
IN THE IFB WAS NOT ONLY CARELESS, BUT FALSE; THAT IN SPITE OF THE IFB
WARNINGS THAT THE QUANTITIES LISTED WERE MERELY ESTIMATES, "THE CONTRACT
COULD NOT BE ACCEPTED UNDER ANY BASIS OTHER THAN THE FACT THAT THE
GOVERNMENT WOULD USE A CERTAIN QUANTITY OF THIS (PLIOFILM) OR ELSE THE
CONTRACT WOULD NOT BE LET." YOU, THEREFORE, REQUEST THAT THE CONTRACT BE
EXTENDED UNTIL THE 5,840 BOXES ARE ORDERED.
WITH REGARD TO YOUR ALLEGATION THAT THE INFORMATION SUPPLIED BY GSA,
UPON WHICH YOU PREDICATED YOUR PURCHASE OF PLIOFILM, WAS NOT ONLY
CARELESS BUT FALSE, GSA ASSERTS THAT THE ESTIMATES WERE PREPARED IN AS
CAREFUL A MANNER AS POSSIBLE AND UPON THE BEST AVAILABLE INFORMATION.
BY LETTER DATED DECEMBER 14, 1970, FROM GSA TO YOU, COMPLETE ADVICE AS
TO METHOD USED IN PREPARING THE IFB ESTIMATE WAS FURNISHED, AND WE
CANNOT SAY THAT THE ESTIMATE, IN VIEW OF GSA'S EXPLANATION, IS SUBJECT
TO OBJECTION BY OUR OFFICE.
OUR OFFICE HAS HELD THERE IS NO BASIS FOR RELIEF WHEN, DURING THE
TERM OF A REQUIREMENTS CONTRACT, THE BUYER'S ACTUAL REQUIREMENT DOES NOT
CORRESPOND WITH THE ESTIMATED NEEDS, UNLESS IT CAN BE SHOWN THAT THE
ESTIMATES WERE NOT BASED ON THE BEST INFORMATION AVAILABLE, OR BAD
FAITH, FRAUD, OR MISREPRESENTATION WAS EXERCISED IN ESTIMATING THE
REQUIREMENTS. B-168766, AUGUST 5, 1970; B-169037, MAY 4, 1970. NO SUCH
SHOWING OF BAD FAITH, ETC., MAY BE INFERRED FROM THE RECORD BEFORE US.
IN THE CASE OF TRAVIS T. WOMACK, JR. V UNITED STATES, 389 F. 2D 793,
801; 182 CT. CL. 399 (1968), IT WAS STATED:
"AN ESTIMATE AS TO A MATERIAL MATTER IN A BIDDING INVITATION IS AN
EXPEDIENT. ORDINARILY IT IS ONLY USED WHERE THERE IS A RECOGNIZED NEED
FOR GUIDANCE TO BIDDERS ON A PARTICULAR POINT BUT SPECIFIC INFORMATION
IS NOT REASONABLY AVAILABLE. H. L. YOH CO. V. UNITED STATES, 288 F. 2D
493, 494, 153 CT. CL. 104, 105 (1961). INTRINSICALLY, THE ESTIMATE THAT
IS MADE IN SUCH CIRCUMSTANCES MUST BE THE PRODUCT OF SUCH RELEVANT
UNDERLYING INFORMATION AS IS AVAILABLE TO THE AUTHOR OF THE INVITATION.
*** IN SHORT, IN PROMULGATING AN ESTIMATE FOR BIDDING-INVITATION
PURPOSES, THE GOVERNMENT IS NOT REQUIRED TO BE CLAIRVOYANT BUT IT IS
OBLIGED TO BASE THAT ESTIMATE ON ALL RELEVANT INFORMATION THAT IS
REASONABLY AVAILABLE TO IT."
WE BELIEVE THAT THE FOREGOING STATEMENT IS PERTINENT TO YOUR CLAIM
FOR RELIEF.
WHEN DURING THE TERM OF A REQUIREMENTS CONTRACT, THE BUYER'S ACTUAL
NEEDS TAPER OFF, DIMINISH, OR ALTOGETHER CEASE, NO CONTINUED PURCHASES
ARE PROMISED AND NO BREACH OF CONTRACT RESULTS SINCE THE BUYER AGREED TO
NO SPECIFIC QUANTITY, ONLY THAT ALL ITS REQUIREMENTS WOULD BE PURCHASED
FROM THE SELLER. BRAWLEY V UNITED STATES, 96 U.S. 163 (1877); 37 COMP.
GEN. 688 (1958); 47 COMP. GEN. 365 (1966); B-165642, FEBRUARY 19,
1969. HENCE, NO RELIEF MAY BE GRANTED ON ACCOUNT OF THE LOSSES INCURRED
AS A RESULT OF THE FAILURE OF THE ACTUAL REQUIREMENTS TO APPROACH THE
ESTIMATED QUANTITIES STATED IN YOUR CONTRACT.
IN YOUR LETTER OF DECEMBER 7, 1970, YOU ALSO PROTEST A NEW GSA IFB,
FPNSO-E3-0934-A, FOR THE SAME PRODUCT, CITING A TREMENDOUS OVER-QUANTITY
ESTIMATE AS THE REASON YOU REFUSED TO BID ON THIS IFB. IN RESPONSE TO
YOUR ALLEGATION THAT THE ESTIMATES STATED IN THE CITED IFB WERE
CARELESSLY PREPARED WITHOUT REGARD FOR ACTUAL ANNUAL USAGE, GSA ADVISED
YOU IN A LETTER DATED DECEMBER 14, 1970, THAT:
" *** DURING THE PAST YEAR, FOR INSTANCE, A SUDDEN UNPREDICTABLE DROP
IN DEMAND OCCURRED. DURING THE PAST FOUR MONTHS DEMANDS HAVE HAD A
SLOW, PARTIAL RECOVERY. BECAUSE NO KNOWN REASON EXISTS FOR FUTURE
DEMANDS TO AGAIN DROP DRASTICALLY WE CONCLUDE THAT OUR PRESENT DEMAND
FORECAST IS CORRECT AND THAT THE REQUIREMENT PROJECTION IS REASONABLE."
WE NOTE THAT THE ESTIMATED QUANTITIES STATED IN THE NEW IFB FOR ZONES
2, 3, AND 4 HAVE BEEN REDUCED FROM 7,700 BOXES TO 5,582 BOXES AND THAT A
50 PERCENT GUARANTEED MINIMUM CLAUSE WAS INSERTED. IT APPEARS FROM THE
RECORD THAT GSA HAS ACCOUNTED FOR PAST PROCUREMENT HISTORY, AS WELL AS
CURRENT TREND, IN REDUCING ITS ESTIMATES FOR STENCIL FILM. IN VIEW OF
THESE CHANGES, WHICH SEEM TO REFLECT A REAPPRAISAL BY GSA OF ITS
ESTIMATED NEEDS, WE SEE NO BASIS TO QUESTION THE ADEQUACY OF THE NEW
IFB.
ACCORDINGLY, YOUR CLAIM FOR RELIEF IS DENIED.
B-171323, FEB 5, 1971
TRANSFERS - INCIDENTAL EXPENSES
ALLOWING REIMBURSEMENT FOR EXPENSES INCURRED FOR THE TITLE
EXAMINATION INCIDENT TO THE ASSUMPTION OF A LOAN ON A HOUSE PURCHASED
INCIDENT TO THE TRANSFER OF AN EMPLOYEE OF THE CIVIL SERVICE COMMISSION
TO ALEXANDRIA, VA.
SINCE THE CLAIM FOR REIMBURSEMENT IN THIS CASE IS NOT BASED ON A
LENDER REQUIREMENT BUT ON THE CUSTOM IN THE VIRGINIA AREA IT IS ALLOWED
AND THE DECISION OF MARCH 16, 1970, B-168952 IS NO LONGER FOR
APPLICATION.
TO MR. HAMPTON:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17, 1970,
REQUESTING OUR DECISION REGARDING THE PROPRIETY OF REIMBURSING MR. JAMES
E. GORMAN, AN EMPLOYEE OF YOUR AGENCY, FOR EXPENSES INCURRED FOR TITLE
EXAMINATION AND RELATED INSTRUMENTS OF CERTIFICATION OF CLEAR TITLE
INCIDENT TO THE ASSUMPTION OF A LOAN ON A HOUSE PURCHASED IN CONNECTION
WITH A TRANSFER OF STATION.
THE RECORD INDICATES THAT ON JULY 15, 1970, MR. GORMAN PURCHASED A
HOME IN ALEXANDRIA, VIRGINIA, FOR $46,500 AND ASSUMED A FIRST TRUST IN
THE AMOUNT OF $30,447.63. MR. GORMAN CLAIMS REIMBURSEMENT FOR $465,
TITLE EXAMINATION AND PRELIMINARY CERTIFICATION, AND $25, PREPARATION OF
TITLE INSURANCE PAPERS, CONTINUANCE OF TITLE AND FINAL CERTIFICATION.
YOU PROPOSE TO APPROVE REIMBURSEMENT FOR THESE EXPENSES UNDER THE
PROVISIONS OF SECTION 4.2C, BUREAU OF THE BUDGET CIRCULAR NO. A-56,
REVISED BY TRANSMITTAL MEMORANDUM NO. 5, JUNE 26, 1969, WHICH READS 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."
YOU REFER TO DECISION B-168952, MARCH 16, 1970, WHICH DENIED
REIMBURSEMENT FOR CHARGES FOR A TITLE EXAMINATION ON THE GROUND THAT,
WHILE IT IS CUSTOMARY FOR A LENDER TO REQUIRE A TITLE SEARCH WHEN A NEW
LOAN IS MADE, IT IS NOT THE CUSTOM IN VIRGINIA FOR A LENDER TO REQUIRE A
TITLE SEARCH WHEN THE PURCHASER ASSUMES THE LOAN PREVIOUSLY MADE ON THE
PROPERTY. YOU BELIEVE THAT THE CITED DECISION IS NOT FOR APPLICATION IN
THIS CASE SINCE CLAIM FOR REIMBURSEMENT IS NOT BASED ON A LENDER
REQUIREMENT BUT ON THE CUSTOM IN THE AREA FOR LEGAL PURPOSES.
THE REGULATION CITED PROVIDES FOR REIMBURSEMENT OF THE COSTS OF
SEARCHING TITLE, PREPARING ABSTRACT, AND LEGAL FEES IF THEY ARE
CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL
STATION AND DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF
THE RESIDENCE. REIMBURSEMENT IS NOT LIMITED BY ANY LENDER REQUIREMENT.
THE RECORD INDICATES THAT IT IS CUSTOMARY IN VIRGINIA FOR A TITLE
EXAMINATION TO BE MADE IN THE PURCHASE OF A HOME. THIS IS A
PREREQUISITE AND PRIMARY CONDITION BY MOST ATTORNEYS WHEN HANDLING A
REAL ESTATE PURCHASE WHETHER A PRIOR MORTGAGE IS TO BE ASSUMED, NEW
FINANCING OBTAINED, OR NO FINANCING INCURRED. THE LOCAL FEDERAL HOUSING
ADMINISTRATION OFFICE HAS ADVISED THAT THE CHARGES CLAIMED ARE IN
ACCORDANCE WITH THE CUSTOMARY CHARGES IN THE AREA AND ARE USUALLY BORNE
BY THE PURCHASER.
IN VIEW OF THE ABOVE WE AGREE THAT THE AMOUNTS CLAIMED BY MR. GORMAN
MAY BE APPROVED FOR PAYMENT IF OTHERWISE PROPER. THE DECISION OF MARCH
16, 1970, B-168952, IS NO LONGER FOR APPLICATION.
B-170588, FEB 4, 1971
BID PROTEST - CANCELLATION AND READVERTISEMENT
DENYING PROTEST OF GOLDEN ANDERSON VALVE SPECIALTY COMPANY AGAINST
THE CANCELLATION OF AN INVITATION AND READVERTISEMENT OF A CONTRACT FOR
BALL VALVES ISSUED BY THE DEPARTMENT OF THE ARMY AND AWARD TO MCJUNKIN
CORPORATION.
SINCE THE GOVERNMENT'S ESTIMATE FOR THE CONTRACT WAS $102,000, THE
CONTRACTING OFFICER WAS JUSTIFIED IN REJECTING PROTESTANT'S LOWEST
RESPONSIVE BID OF $147,560 AND THE FACT THAT IN THE READVERTISEMENT THIS
SAME BID FELL WITHIN THE MIDDLE RANGE OF ALL BIDS RECEIVED IS NOT IN
ITSELF SUPPORT OF ITS REASONABLENESS ESPECIALLY WHERE THE LOWEST
RESPONSIVE BID, $116,867.92, WAS SUBSTANTIALLY LESS THAN THE ORIGINAL
BID.
TO GOLDEN ANDERSON VALVE SPECIALTY COMPANY:
REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 2 AND 9, 1970, TO A
CONGRESSIONAL SOURCE, PROTESTING THE DECISION B-170588, AUGUST 28, 1970,
REGARDING THE REJECTION OF YOUR COMPANY'S BID UNDER DEPARTMENT OF THE
ARMY INVITATION FOR BIDS DACA87-70-B-0020 AND THE READVERTISEMENT UNDER
INVITATION DACA87-71-B-0012.
YOUR COMPANY AND ANOTHER ONE WERE THE ONLY BIDDERS ON SCHEDULE III
(BALL VALVES) IN THE ORIGINAL INVITATION. THE BID OF THE OTHER COMPANY,
THE LOW BIDDER, IN THE AMOUNT OF $75,074, WAS REJECTED FOR FAILURE TO
COMPLY WITH THE SPECIFICATIONS. YOUR COMPANY'S BID IN THE AMOUNT OF
$147,560 WAS REJECTED AS UNREASONABLE IN PRICE ON THE BASIS OF A
GOVERNMENT ESTIMATE OF $102,000 FOR THE BALL VALVES. IN THE AUGUST 28
DECISION, OUR OFFICE DENIED THE PROTEST OF YOUR COMPANY AGAINST THE
REJECTION OF ITS BID AND THE READVERTISEMENT.
IN YOUR PROTEST AGAINST THE AUGUST 28 DECISION, YOU STATE THAT SINCE
YOUR COMPANY BID THE SAME PRICE ON THE ORIGINAL INVITATION AND THE
READVERTISEMENT, WHICH BID WAS IN THE MIDDLE RANGE OF THE BIDS RECEIVED,
IT DOES NOT APPEAR THAT THE ORIGINAL PRICE WAS UNREASONABLE. FURTHER,
YOU QUESTION THE ACCURACY OF THE GOVERNMENT'S ESTIMATE BECAUSE YOU STATE
THAT NONE OF THE BIDS ON THE READVERTISEMENT "FELL WITHIN THE $102,000
ESTIMATE." ADDITIONALLY, YOU CONTEND THAT THE DISCLOSURE OF YOUR
COMPANY'S ORIGINAL BID WAS TO ITS DETRIMENT IN THE COMPETITION ON THE
READVERTISEMENT.
FIVE BIDDERS BID ON THE READVERTISEMENT. GROVE VALVE AND REGULATOR
COMPANY SUBMITTED TWO BIDS, ONE IN THE AMOUNT OF $98,272 AND ANOTHER IN
THE AMOUNT OF $117,872. THE MCJUNKIN CORPORATION ALSO SUBMITTED TWO
BIDS, ONE FOR $119,254 AND ANOTHER FOR $129,292, BOTH WITH A 2-PERCENT
DISCOUNT, 30 DAYS. THE REMAINING BIDS WERE $147,560 FROM YOUR COMPANY,
$156,080 FROM ROCKWELL MANUFACTURING COMPANY, AND $263,524 FROM
BINGHAM-WILLAMETTE COMPANY. THE LOW BID FROM GROVE VALVE WAS REJECTED
AS NONRESPONSIVE TO THE SPECIFICATIONS. THE $119,254 BID FROM THE
MCJUNKIN CORPORATION WAS EVALUATED AS THE NEXT LOW BID BY REASON OF THE
2-PERCENT DISCOUNT WHICH REDUCED THE $119,254 PRICE TO $116,868.92.
AWARD WAS MADE TO MCJUNKIN.
OF COURSE, THE CONTRACTING OFFICER DID NOT HAVE THE BENEFIT OF THE
BIDS ON THE READVERTISEMENT AT THE TIME YOUR COMPANY'S ORIGINAL BID WAS
REJECTED. HOWEVER, THE FACT THAT A BID FALLS WITHIN A MIDDLE RANGE OF
COMPETITIVE BIDDING DOES NOT NECESSARILY CONSTITUTE THAT BID AS
REASONABLE IN AMOUNT. OUR OFFICE HAS HELD THAT WHEN IT IS
ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS
OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO PROCURE THE
PARTICULAR SUPPLIES, A REJECTION OF ALL BIDS AND A READVERTISEMENT FOR
NEW BIDS IS A PROPER EXERCISE OF DISCRETION. 36 COMP. GEN. 364 (1956).
EVEN IF THE $102,000 ESTIMATE FOR THE VALVES WAS A CONSERVATIVE FIGURE,
THE FACT THAT THE SUCCESSFUL BID ON THE SECOND INVITATION FOR BIDS WAS
SUBSTANTIALLY LOWER THAN THE LOWEST RESPONSIVE BID ON THE ORIGINAL
INVITATION TENDS TO CONFIRM THE REASONABLENESS OF THE ADMINISTRATIVE
POSITION AND ITS BELIEF THAT YOUR COMPANY'S BID WAS MORE THAN THE
GOVERNMENT SHOULD HAVE TO PAY FOR THE BALL VALVES.
ALTHOUGH YOU STATE THAT YOUR COMPANY HAS BEEN PREJUDICED IN THE
READVERTISEMENT BY THE DISCLOSURE OF ITS BID ON THE ORIGINAL INVITATION,
IN 36 COMP. GEN. 364, WE STATED, IN RESPONSE TO A SIMILAR CONTENTION,
THAT OUR OFFICE HAS -
" *** NEVER COUNTENANCED THE REJECTION OF BIDS MERELY FOR THE PURPOSE
OF AFFORDING THE BIDDERS AN OPPORTUNITY TO BETTER THE PRICES OF THEIR
COMPETITORS. WE CANNOT, HOWEVER, CONSIDER THE MATTER OF COMPETITIVE
BIDDING FOR GOVERNMENT CONTRACTS SOLELY AS A GAME, IN WHICH THE CONTRACT
MUST AUTOMATICALLY GO TO THE LOWEST BIDDER WITHOUT REGARD TO THE
REASONABLENESS OF HIS PRICE OR TO OTHER ATTEMPTED BIDS WHICH CANNOT FOR
TECHNICAL REASONS BE ACCEPTED. WHEN IN THE LIGHT OF ALL THE FACTS,
INCLUDING THOSE DISCLOSED BY THE BIDDING, IT IS ADMINISTRATIVELY
DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR
WHICH THE GOVERNMENT SHOULD BE ABLE TO OBTAIN THE SUPPLIES OR SERVICES
SOUGHT, WE BELIEVE THAT REJECTION OF ALL BIDS AND READVERTISING THE
CONTRACT IS A PROPER EXERCISE OF THE ADMINISTRATIVE DISCRETION, IN
CONFORMITY WITH THE DUTY OF THE ADMINISTRATIVE OFFICIALS TO ACT IN THE
BEST INTEREST OF THE GOVERNMENT. *** IT IS NO DOUBT REGRETTABLE THAT
ALL BIDDERS ARE AWARE OF THE AMOUNTS ORIGINALLY QUOTED BY THEIR
COMPETITORS, BUT THEY ALSO ARE BETTER ADVISED AS TO WHAT PRICE RANGE IS
CONSIDERED REASONABLE BY THE GOVERNMENT'S REPRESENTATIVES, AND ALL HAVE
EQUAL OPPORTUNITIES TO SUBMIT SUCH NEW BIDS AS THEY WILL. *** "
IN THE CIRCUMSTANCES, THE CANCELLATION OF THE FIRST INVITATION
APPEARS TO HAVE BEEN A REASONABLE EXERCISE OF ADMINISTRATIVE DISCRETION.
ACCORDINGLY, THE AUGUST 28 DECISION IS SUSTAINED.
B-171125, FEB 4, 1971
CONTRACTS - ASSIGNMENT - VALIDITY
AUTHORIZING PAYMENT OF A VOUCHER IN ACCORDANCE WITH THE COLLECTION
PROVISIONS OF THE SECURITY AGREEMENT OF MAY 27, 1968, BETWEEN NATIONAL
ENGINEERING AND PUBLICATIONS CORPORATION AND THE FORT WORTH NATIONAL
BANK WHICH AGREEMENT IS THE ASSIGNMENT INSTRUMENT OF ALL SUMS DUE UNDER
A CONTRACT BETWEEN NATIONAL ENGINEERING AND THE DEPARTMENT OF THE AIR
FORCE.
AS BETWEEN THE TWO COMPETING ASSIGNMENTS OF FUNDS UNDER THIS CONTRACT
THE ASSIGNMENT TO MONARCH PAPER COMPANY WAS "ABSOLUTELY NULL AND VOID"
UNDER THE ASSIGNMENT OF CLAIMS ACT OF 1940, 31 U.S.C. 203 BECAUSE IT
WAS EXECUTED PRIOR TO THE ISSUANCE OF THE WARRANT FOR PAYMENT OF THE
CLAIM DUE UNDER THE CONTRACT WHILE THE ASSIGNMENT TO THE BANK, ALTHOUGH
ORIGINALLY DEFECTIVE BECAUSE IT DID NOT SPECIFY THE PARTICULAR CONTRACT
INVOLVED WAS SAVED BY A LATER SPECIFYING AMENDMENT.
TO MAJOR CRAIG:
BY LETTER DATED OCTOBER 23, 1970, THE ACTING CHIEF, WORKING CAPITAL,
CONTRACTUAL AND ACCOUNTABILITY SYSTEMS DIVISION, DIRECTORATE OF
ACCOUNTING OPERATIONS, FORWARDED YOUR LETTER OF OCTOBER 14, 1970, WITH
ENCLOSURES, REQUESTING OUR DECISION IN REGARD TO THE PROPER DISPOSITION
OF $8,109.65 DUE UNDER CONTRACT NO. F41606-69-C-0300 AWARDED MAY 19,
1969, BY THE DEPARTMENT OF THE AIR FORCE, PROCUREMENT DIVISION, RANDOLPH
AIR FORCE BASE, TEXAS.
THE SUBJECT CONTRACT, LET FOR THE PRINTING OF 1,000,000 EXAMINATION
COVERS, HAS BEEN PERFORMED AND A VOUCHER FOR PAYMENT THEREUNDER WAS
CERTIFIED ON OCTOBER 13, 1970. PAYMENT HAS BEEN DEFERRED PENDING OUR
DECISION.
ON MARCH 17, 1970, THE RANDOLPH AIR FORCE BASE ACCOUNTING AND FINANCE
OFFICE RECEIVED AN INSTRUMENT OF ASSIGNMENT DATED FEBRUARY 20, 1970,
FROM THE MONARCH PAPER COMPANY OF DALLAS AND FORT WORTH, TEXAS
(MONARCH). THE ASSIGNMENT INSTRUMENT SPECIFICALLY PERTAINS TO SUMS OF
MONEY DUE UNDER THE SUBJECT CONTRACT AND WAS EXECUTED BY THE CONTRACTOR,
NATIONAL ENGINEERING AND PUBLICATIONS CORPORATION (NATIONAL), IN RETURN
FOR ADVANCES OF MATERIALS FROM MONARCH WHICH ENABLED NATIONAL TO PERFORM
THE CONTRACT.
ON OR ABOUT MAY 22, 1970, THE RANDOLPH AIR FORCE BASE PROCUREMENT
OFFICE RECEIVED A LETTER DATED MAY 18, 1970, FROM THE FORT WORTH
NATIONAL BANK (BANK) WHICH INCLUDED COPIES OF AN INSTRUMENT AND A
FINANCING STATEMENT DATED MAY 27, 1968 AND MAY 28, 1968, RESPECTIVELY.
NEITHER INSTRUMENT MAKES REFERENCE TO ANY PARTICULAR CONTRACT BUT THEY
PURPORT TO TRANSFER FROM NATIONAL TO THE BANK "ALL ACCOUNTS AND CONTRACT
RIGHTS WHETHER NOW EXISTING OR HEREAFTER ARISING --- ." THE COVER
LETTER, HOWEVER, DOES REFER TO INVOICE NO. 2367 AND PURCHASE ORDER NO.
ATC-AS-PP-C-41.
BY LETTER DATED AUGUST 5, 1970, W. I. SPITLER, GUARANTOR TO THE BANK,
FORWARDED A LETTER, WITH ENCLOSURES, TO THE CONTRACTING OFFICER. AMONG
THE ENCLOSURES IS A COPY OF INVOICE NO. 2367 DATED DECEMBER 15, 1969.
THE INVOICE WHICH IS ADDRESSED TO THE CONTRACTING OFFICER AT RANDOLPH
AIR FORCE BASE AND WAS ISSUED BY NATIONAL REPRESENTS A CHARGE OF $4,000
FOR THE "PREPARATION OF TRAINING MANUAL COVERS." STAMPED ON THE INVOICE
IS THE LEGEND "MAKE CHECKS PAYABLE TO FORT WORTH NATIONAL BANK AND TO
NATIONAL ENGINEERING AND PUBLICATIONS CORPORATION." THE NUMBER OF THE
SUBJECT CONTRACT HAS BEEN ADDED IN PEN ON THE INVOICE'S UPPER RIGHT-HAND
CORNER. ALSO INCLUDED WITH THE LETTER OF AUGUST 5 ARE FOUR COPIES OF
"SCHEDULE A" ATTACHMENTS, DATED DECEMBER 15, 1969, JANUARY 2, JANUARY
14, AND JANUARY 28, 1970, RESPECTIVELY. EACH IS SIGNED BY NATIONAL'S
PRESIDENT, REFERS TO INVOICE NO. 2367 (AMONG OTHER ASSIGNED ITEMS), AND
PURPORTS TO BE ATTACHED TO AND TO BE AN INTEGRAL PART OF A PRIOR
SECURITY AGREEMENT DATED SEPTEMBER 28, 1968, IN THE CASE OF THE SCHEDULE
DATED DECEMBER 15, AND A SECURITY AGREEMENT OF SEPTEMBER 28, 1969, ON
THE REMAINING SCHEDULES. WE ASSUME THAT IN EACH CASE THE INTENTION WAS
TO IDENTIFY AS THE SECURITY AGREEMENT THE INSTRUMENT DATED MAY 28, 1968.
YOU REQUEST OUR DECISION AS TO THE PROPER PAYEE.
THE ASSIGNMENT OF CLAIMS AGAINST THE UNITED STATES IS GOVERNED BY THE
ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED, 31 U.S.C. 203 WHICH
PROVIDES IN PERTINENT PART AS FOLLOWS:
"ALL TRANSFERS AND ASSIGNMENTS MADE OF ANY CLAIM UPON THE UNITED
STATES, OR OF ANY PART OR SHARE THEREOF, OR INTEREST THEREIN, WHETHER
ABSOLUTE OR CONDITIONAL, AND WHATEVER MAY BE THE CONSIDERATION THEREFOR,
AND ALL POWERS OF ATTORNEY, ORDERS, OR OTHER AUTHORITIES FOR RECEIVING
PAYMENT OF ANY SUCH CLAIM, OR OF ANY PART OR SHARE THEREOF, EXCEPT AS
HEREINAFTER PROVIDED, SHALL BE ABSOLUTELY NULL AND VOID, UNLESS THEY ARE
FREELY MADE AND EXECUTED IN THE PRESENCE OF AT LEAST TWO ATTESTING
WITNESSES, AFTER THE ALLOWANCE OF SUCH A CLAIM, THE ASCERTAINMENT OF THE
AMOUNT DUE, AND THE ISSUING OF A WARRANT FOR THE PAYMENT THEREOF. SUCH
TRANSFERS, ASSIGNMENTS, AND POWERS OF ATTORNEY, MUST RECITE THE WARRANT
FOR PAYMENT, AND MUST BE ACKNOWLEDGED BY THE PERSON MAKING THEM, BEFORE
AN OFFICER HAVING AUTHORITY TO TAKE ACKNOWLEDGMENTS OF DEEDS, AND SHALL
BE CERTIFIED BY THE OFFICER; AND IT MUST APPEAR BY THE CERTIFICATE THAT
THE OFFICER, AT THE TIME OF THE ACKNOWLEDGMENT, READ AND FULLY EXPLAINED
THE TRANSFER, ASSIGNMENT, OR WARRANT OF ATTORNEY TO THE PERSON
ACKNOWLEDGING THE SAME. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY
TO PAYMENTS FOR RENT OF POST-OFFICE QUARTERS MADE BY POSTMASTERS TO DULY
AUTHORIZED AGENTS OF THE LESSORS.
"THE PROVISIONS OF THE PRECEDING PARAGRAPH SHALL NOT APPLY IN ANY
CASE IN WHICH THE MONEYS DUE OR TO BECOME DUE FROM THE UNITED STATES OR
FROM ANY AGENCY OR DEPARTMENT THEREOF, UNDER A CONTRACT PROVIDING FOR
PAYMENTS AGGREGATING $1,000 OR MORE, ARE ASSIGNED TO A BANK, TRUST
COMPANY, OR OTHER FINANCING INSTITUTION, INCLUDING ANY FEDERAL LENDING
AGENCY: *** "
SINCE MONARCH IS CLEARLY NOT A "FINANCING INSTITUTION", THE VALIDITY
OF ITS ASSIGNMENT DEPENDS ON SATISFACTION OF THE CRITERIA PRESCRIBED IN
THE FIRST PARAGRAPH OF 31 U.S.C. 203 WHICH PERTAINS TO ASSIGNEES OTHER
THAN FINANCING INSTITUTIONS. SEE 22 COMP. GEN. 44 (1942). THE
ASSIGNMENT TO MONARCH, HAVING BEEN EXECUTED FEBRUARY 20, 1970, PRIOR TO
THE ISSUANCE OF THE WARRANT FOR PAYMENT OF THE CLAIM DUE UNDER THE
SUBJECT CONTRACT ON OCTOBER 30, 1970, DOES NOT MEET THE STANDARDS OF THE
STATUTE.
THE VALIDITY OF THE ASSIGNMENT TO THE BANK LIKEWISE MUST BE
DETERMINED ACCORDING TO THE PROVISIONS OF THE ASSIGNMENT OF CLAIMS ACT,
SUPRA. TO PERFECT AN ASSIGNMENT UNDER THAT ACT, THE ASSIGNEE BANK MUST
FILE WRITTEN NOTICE OF THE ASSIGNMENT TOGETHER WITH A TRUE COPY OF THE
INSTRUMENT WITH THE PARTIES SPECIFIED IN THE ACT, NAMELY, THE
CONTRACTING OFFICER, THE SURETY, IF ANY, AND THE DISBURSING OFFICER, IF
ANY, DESIGNATED IN THE CONTRACT TO MAKE PAYMENT. THE NOTICE DATED MAY
18, 1970, SENT BY THE BANK CLEARLY SATISFIES THE NOTICE REQUIREMENTS.
THE INSTRUMENT WHICH WAS RECEIVED FROM THE BANK IS ENTITLED "SECURITY
AGREEMENT". THIS TRANSACTION IS GOVERNED BY CHAPTER 9 OF THE TEXAS
UNIFORM COMMERCIAL CODE WHICH BEARS THE TITLE, "SECURED TRANSACTIONS,
SALES OF ACCOUNTS, CONTRACT RIGHTS AND CHATTEL PAPER". SECTION 9.102(B)
OF THE ABOVE-CITED CHAPTER PROVIDES IN PERTINENT PART, "THIS CHAPTER
APPLIES TO SECURITY INTERESTS CREATED BY CONTRACT INCLUDING PLEDGE,
ASSIGNMENT, CHATTEL MORTGAGE, *** ."
THE INSTRUMENT SUBMITTED IS OF A GENERIC TYPE CREATED TO COVER ALL
THE VARIOUS CATEGORIES OF SECURITY INTERESTS WHICH ARE VALID UNDER THE
TEXAS UNIFORM COMMERCIAL CODE, IN THIS CASE AN ASSIGNMENT OF NATIONAL'S
ACCOUNTS RECEIVABLE TO THE BANK. THE COMMENT UNDER SECTION 9.101 OF THE
CODE MAKES CLEAR THAT THE DISTINCTIONS AMONG THE VARIOUS SECURITY
DEVICES ARE NOT RETAINED.
HOWEVER, THE INSTRUMENT WHICH WAS RECEIVED IS BLANKET IN FORM AND
MAKES NO DIRECT REFERENCE TO THE SUBJECT CONTRACT. REFERENCE INSTEAD IS
MADE TO NATIONAL'S INVOICE OF DECEMBER 12, 1969, AND PURCHASE ORDER NO.
ATC-AS-PP-C-41 IN THE LETTER OF MAY 18, 1970, WHICH TRANSMITTED THE
INSTRUMENTS OF ASSIGNMENT TO THE CONTRACTING OFFICER. THE INVOICE IN
TURN REFERS TO THE SUBJECT CONTRACT NUMBER.
WE HAVE HELD THAT UNDER THE LANGUAGE OF THE ASSIGNMENT OF CLAIMS ACT,
SUPRA, ANY ASSIGNMENT OF A CLAIM AGAINST THE GOVERNMENT SHOULD SPECIFY
THE PARTICULAR CONTRACT INVOLVED AND, THEREFORE, THAT A BLANKET
ASSIGNMENT DOES NOT MEET THE REQUIREMENTS OF THE ACT. SEE B-120222,
OCTOBER 27, 1955. IN THE INSTANT CASE, ALTHOUGH THE ASSIGNMENT
INSTRUMENTS ARE BLANKET IN FORM, THERE ARE IN EXISTENCE LATER AMENDMENT
SCHEDULES, SIGNED BY THE ASSIGNOR, WHICH PURPORT TO BE AN INTEGRAL PART
OF THE ORIGINAL ASSIGNMENT INSTRUMENT. THESE SCHEDULES MAKE SPECIFIC
REFERENCE TO NATIONAL'S INVOICE NO. 2367 ISSUED UNDER THE SUBJECT
CONTRACT.
IN VIEW OF THE FACT THAT THE AIR FORCE WAS PUT ON NOTICE OF THE
ASSIGNMENT OF THE SUBJECT CONTRACT BY THE INCLUSION OF THE INVOICE AND
PURCHASE ORDER NUMBER CONTAINED IN THE LETTER OF MAY 18, 1970, FROM THE
BANK AND THE FACT THAT SUPPLEMENTARY SCHEDULES SIGNED BY THE PRESIDENT
OF NATIONAL IDENTIFY THE INVOICE ISSUED UNDER THE SUBJECT CONTRACT, WE
CONCLUDE THE ASSIGNMENT DOES REFER TO THE SUBJECT CONTRACT AND IS,
THEREFORE, VALID.
ACCORDINGLY, THE SUBJECT VOUCHER, IF OTHERWISE CORRECT, MAY PROPERLY
BE PAID IN ACCORDANCE WITH THE COLLECTION PROVISIONS CONTAINED IN
SECTION III, PARAGRAPH 2 OF THE SECURITY AGREEMENT OF MAY 27, 1968,
BETWEEN NATIONAL AND THE BANK. THE VOUCHER AND FILE ARE RETURNED.
B-171410, FEB 3, 1971
EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES REIMBURSEMENT
DECISION DISALLOWING CLAIM FOR REIMBURSEMENT OF REAL ESTATE EXPENSES
INCIDENT TO SALE OF RESIDENCE AT TITUSVILLE, FLA., INCIDENT TO TRANSFER
WHEN EMPLOYEE WAS NOT RESIDING AT HOME.
AN EMPLOYEE WHO, AFTER OFFER OF POSITION IN LOUISVILLE WAS
TRANSFERRED FROM BALTIMORE TO PATRICK AFB WHERE THE WORK WAS BEING
PHASED OUT AND WHERE EMPLOYEE ONLY STAYED FOR A FEW DAYS WHEN HE
ACCEPTED THE LOUISVILLE POSITION AND WAS TRANSFERRED THERE MAY NOT, IN
VIEW OF UNCERTAINTY OF EMPLOYMENT AT PATRICK AFB AND THE SHORT DURATION,
HAVE SUCH ASSIGNMENT REGARDED AS A TRANSFER BUT RATHER AS A TEMPORARY
DUTY ASSIGNMENT. THEREFORE, SINCE THE EMPLOYEE WAS NOT LIVING AT HIS
FORMER RESIDENCE IN FLORIDA BECAUSE IT WAS RENTED AT THE TIME OF
TRANSFER TO LOUISVILLE HE MAY NOT BE REIMBURSED FOR THE REAL ESTATE
EXPENSES INCIDENT TO SALE OF HOME.
TO MR. ROBERT M. JOHNSON:
THIS IS IN REPLY TO YOUR LETTER OF OCTOBER 13, 1970, REFERENCE
ORLDC-F, REQUESTING A DECISION AS TO THE ALLOWABILITY OF AN ITEM OF
$1,045.30 ON A VOUCHER IN FAVOR OF MR. RANDOLPH H. ERHART, AN EMPLOYEE
OF YOUR AGENCY. THE ITEM REPRESENTS REAL ESTATE EXPENSES INCURRED IN THE
SALE OF MR. ERHART'S HOUSE IN TITUSVILLE, FLORIDA, INCIDENT TO HIS
TRANSFER FROM PATRICK AIR FORCE BASE, FLORIDA, TO LOUISVILLE, KENTUCKY.
THE RECORD INDICATES THAT BY TRAVEL ORDER NO. M-184, DATED JANUARY
19, 1967, MR. ERHART WAS TRANSFERRED FROM THE CANAVERAL DISTRICT,
MERRITT ISLAND, FLORIDA, TO BALTIMORE, MARYLAND. MR. ERHART RENTED HIS
HOUSE IN TITUSVILLE INSTEAD OF SELLING IT SINCE THE PROJECT UPON WHICH
HE WAS EMPLOYED WAS SCHEDULED FOR COMPLETION IN NOVEMBER 1967. BY
LETTER OF APRIL 18, 1968, MR. ERHART WAS NOTIFIED BY HIS EMPLOYING
DISTRICT OF A REDUCTION IN FORCE AND OFFERED A POSITION AT KWAJALEIN,
MARSHALL ISLANDS. THIS LETTER ALSO ADVISED MR. ERHART OF HIS
REEMPLOYMENT RIGHTS IN THE CANAVERAL DISTRICT.
MR. ERHART DECLINED THE KWAJALEIN OFFER AND BY LETTER OF MAY 13,
1968, AGREED TO ACCEPT A POSITION AT LOUISVILLE, KENTUCKY. HOWEVER,
BEFORE MAKING A FINAL ACCEPTANCE OF THE LOUISVILLE POSITION, MR. ERHART
INQUIRED AS TO WHETHER THE GOVERNMENT WOULD PAY THE EXPENSES OF SELLING
HIS HOUSE IN TITUSVILLE. AFTER BEING ADVISED THAT HE WOULD NOT BE
REIMBURSED SUCH EXPENSES UPON TRANSFER FROM BALTIMORE TO LOUISVILLE, MR.
ERHART DECLINED THE LOUISVILLE OFFER AND EXERCISED HIS REEMPLOYMENT
RIGHTS IN THE CANAVERAL DISTRICT. BY TRAVEL ORDER DATED JUNE 25, 1968,
MR. ERHART WAS TRANSFERRED FROM BALTIMORE TO PATRICK AIR FORCE BASE.
MR. ERHART LEFT HIS DEPENDENTS IN MARYLAND, TRAVELED ALONE TO PATRICK
AIR FORCE BASE, AND DID NOT LIVE IN HIS HOUSE IN TITUSVILLE DURING HIS
ASSIGNMENT THERE. IT APPEARS THERE WAS A PHASING OUT OF WORK IN THE
CANAVERAL DISTRICT AND MR. ERHART WAS TRANSFERRED TO LOUISVILLE BY
TRAVEL ORDER DATED JULY 3, 1968.
SECTION 4.1C OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED
OCTOBER 12, 1966, PROVIDES FOR REIMBURSEMENT OF THE COSTS OF SELLING ONE
RESIDENCE AT THE OLD OFFICIAL STATION, PROVIDED THAT THE DWELLING AT
SUCH STATION WAS THE EMPLOYEE'S ACTUAL RESIDENCE AT THE TIME HE WAS
FIRST DEFINITELY INFORMED THAT HE IS TO BE TRANSFERRED TO THE NEW
OFFICIAL STATION. IN THE INSTANT CASE MR. ERHART WAS NOT LIVING IN HIS
HOUSE AT THE TIME OF HIS TRANSFER TO LOUISVILLE. WITH RESPECT TO HIS
TRANSFER TO PATRICK AIR FORCE BASE, THE OFFICIALS IN THE CANAVERAL
DISTRICT WERE AWARE THAT MR. ERHART HAD BEEN OFFERED A POSITION AT
LOUISVILLE AND THAT WORK IN THEIR DISTRICT WAS BEING PHASED OUT. THESE
FACTORS MADE THE LENGTH OF MR. ERHART'S EMPLOYMENT AT PATRICK AIR FORCE
BASE RATHER UNCERTAIN. IN VIEW OF THIS UNCERTAINTY WE DO NOT BELIEVE
MR. ERHART'S TRANSFER WAS JUSTIFIED AND WE REGARD HIS ASSIGNMENT THERE
AS A TEMPORARY DUTY ASSIGNMENT. SEE B-166181, APRIL 1, 1969, COPY
ENCLOSED.
ACCORDINGLY, THE ITEM IN QUESTION IS NOT PAYABLE. THE VOUCHER IS
RETURNED FOR PROCESSING OF THE OTHER ITEM THEREON IF OTHERWISE PROPER.
B-171704, FEB 3, 1971
REQUEST FOR RELIEF - MISTAKE IN BID
DECISION HOLDING THAT THE CANCELLATION OF THE CONTRACT BETWEEN HOLLEB
& COMPANY AND THE VETERANS ADMINISTRATION SUPPLY SERVICE, DEPARTMENT OF
MEDICINE AND SURGERY IS THE ONLY RELIEF THAT SHOULD BE GRANTED TO THE
CONTRACTOR.
WHERE CONTRACTOR ALLEGED THAT AN ERROR IN BID HAD BEEN MADE IN THAT
ITS PRICE WAS BASED UPON FOUR CONTAINERS TO THE CASE, RATHER THAN SIX,
AND UPON GLASS JARS INSTEAD OF CANS, AND THIS IS SUBSTANTIATED BY ITS
WORKSHEET AND THE QUOTATION FROM ITS SUPPLIER AND THE RECORD INDICATES
THAT THE BID PRICE OF THE CONTRACTOR-SUPPLIER IS LOWER THAN THE BID
PRICE OF THE MANUFACTURER ON AN ITEM, THE CONTRACTING OFFICER IS ON
NOTICE OF THE PROBABILITY OF AN ERROR IN BID, AND THE CONTRACTOR'S BID
SHOULD NOT HAVE BEEN ACCEPTED WITHOUT POINTING OUT THE DISCREPANCY AND
REQUESTING A VERIFICATION. UNDER THESE CIRCUMSTANCES, THE CONTRACT
SHOULD BE CANCELLED.
TO MR. JOHNSON:
REFERENCE IS MADE TO LETTER 134G OF JANUARY 13, 1971, WITH
ENCLOSURES, FROM THE SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY,
REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT
TO AN ERROR ALLEGED TO HAVE BEEN MADE BY HOLLEB & COMPANY IN ITS BID
UPON WHICH PURCHASE ORDER 71-MC-40413 WAS BASED.
THE INVITATION FOR BIDS SOLICITED ALTERNATE PRICES FOR FURNISHING
GHERKIN PICKLES F.O.B. DESTINATION. ITEM 3 WAS THE ALTERNATE FOR ITEM
1. ITEM 4 WAS THE ALTERNATE FOR ITEM 2. ITEMS 1 AND 3 WERE IDENTICAL IN
THAT EACH PROVIDED FOR DELIVERY OF 270 CASES OF PICKLES, 6 CANS TO A
CASE, TO HINES, ILLINOIS. ITEMS 2 AND 4 WERE IDENTICAL IN THAT EACH
PROVIDED FOR DELIVERY OF 140 CASES OF PICKLES, 6 CANS TO THE CASE, TO
SOMERVILLE, NEW JERSEY. THE ONLY DIFFERENCE IN EACH ALTERNATE IS THE
CAN SIZE. ITEMS 1 AND 2 PROVIDED FOR NO. 12 CANS AND ITEMS 3 AND 4 FOR
NO. 10 CANS.
THREE BIDS WERE RECEIVED UNDER THE INVITATION. GREEN BAY FOOD
COMPANY OF GREEN BAY, WISCONSIN, BID ON ITEM 3 ONLY. THE BID PRICE WAS
$11 A CASE. PERFECT PACKED PRODUCTS CO., INC., OF YONKERS, NEW YORK,
BID ON ITEM 2 ONLY. THE BID PRICE WAS $14.95 A CASE. THE ONLY OTHER
BIDDER WAS HOLLEB & COMPANY OF CHICAGO, ILLINOIS. HOLLEB BID $9.79 A
CASE ON ITEM 1 AND ON ITEM 3 STATED "SAME AS ABOVE ITEM." HOLLEB WAS
QUERIED AS TO THE MEANING OF THE LATTER STATEMENT. A COMPANY
REPRESENTATIVE REPLIED THAT THE COMPANY HAD INTENDED TO BID ON THE NO.
12 SIZE ONLY AND HAD THOUGHT THAT ITEMS 1 AND 3 REQUIRED THAT SIZE. IN
ANY EVENT, HOLLEB'S BID ON THE LARGER NO. 12 CAN SIZE WAS EVALUATED AT
LESS THAN THE BID OF GREEN BAY ON THE SMALLER NO. 10 CAN SIZE AND AWARD
WAS ACCORDINGLY MADE TO HOLLEB FOR ITEM 1.
AFTER THE AWARD, HOLLEB ALLEGED THAT AN ERROR IN BID HAD BEEN MADE IN
THAT ITS PRICE WAS BASED UPON FOUR CONTAINERS TO THE CASE AND UPON GLASS
JARS INSTEAD OF CANS. HOLLEB FURNISHED ITS WORKSHEET AND THE QUOTATION
FROM ITS SUPPLIER UPON WHICH ITS PRICE WAS BASED. BOTH SHOW THAT THE
BID ON ITEM 1 WAS COMPUTED AS ALLEGED. FURTHER, THE WORKSHEET STATES
"NO BID" FOR ITEM 3. HOLLEB REQUESTED TO BE RELIEVED OF THE AWARD OR IN
THE ALTERNATIVE TO BE ALLOWED TO DELIVER NO. 10 CANS AT $10.95 A CASE.
BOTH THE SUPPLY SERVICE AND THE CONTRACTING OFFICER RECOMMEND RELIEF
FOR THE CONTRACTOR. THE FORMER RECOMMENDS THAT THE CONTRACTOR BE
RELIEVED OF ITS OBLIGATION TO PERFORM. THE LATTER RECOMMENDS THAT THE
CONTRACTOR BE PERMITTED TO FURNISH THE NO. 10 CANS AT $10.95 A CASE.
THE SUPPLY SERVICE LETTER OF JANUARY 13 REPORTS THAT THE LAST
PURCHASES OF ITEMS 1 AND 2 WERE IN OCTOBER 1969 AND JANUARY 1970 AT
$11.20 A CASE FROM THE COMPANY THAT NOW HAS BID $14.95 A CASE ON ITEM 2.
THE REPORT IS SILENT AS TO THE QUANTITIES THAT WERE PURCHASED UNDER THE
PRIOR PROCUREMENTS AND WE DO NOT KNOW WHETHER ANY PART OF THE $14.95
PRICE ON ITEM 2 COULD BE ATTRIBUTED TO THE QUANTITY IN THE ITEM.
CHANGING MARKET CONDITIONS COULD HAVE HAD AN EFFECT ON PRICE SINCE
HOLLEB HAS STATED THAT THE MARKET PRICE ON THE PICKLES HAS INCREASED.
HOWEVER THAT MAY BE, WE DEEM IT OF IMPORTANCE THAT, IN RESPONSE TO THE
REQUIREMENT IN THE INVITATION FOR BIDS FOR THE NAME AND ADDRESS OF THE
PLANT WHERE THE PICKLES WOULD BE PROCESSED, HOLLEB INSERTED THE NAME AND
ADDRESS OF THE BIDDER ON ITEM 3 - GREEN BAY - WHO BID A HIGHER PRICE FOR
THE SAME QUANTITY DELIVERED IN SMALLER CANS TO THE SAME DESTINATION.
THUS, HOLLEB, THE SUPPLIER OF THE ITEM, INDICATED BY ITS BID THAT IT
WOULD BE ABLE TO FURNISH LARGER CANS OF PICKLES AT A LOWER PRICE THAN
THE MANUFACTURER WOULD BE ABLE TO DELIVER THE SAME NUMBER OF SMALLER
CANS OF PICKLES TO THE SAME DESTINATION. OUR OFFICE HAS INDICATED THAT
WHERE A BID PRICE IS SUBMITTED ON AN ITEM BY A SUPPLIER WHICH IS LOWER
THAN THE BID PRICE OF THE MANUFACTURER OF THAT ITEM, THE CONTRACTING
OFFICER IS ON NOTICE OF THE PROBABILITY OF ERROR IN BID. B-162770,
NOVEMBER 21, 1967; B-152430, DECEMBER 9, 1963; B-149228, AUGUST 1,
1962; B-145192, MARCH 16, 1961; AND B-143942, SEPTEMBER 20, 1960.
ALTHOUGH THE ITEMS IN THE IMMEDIATE CASE ARE NOT IDENTICAL IN THAT THE
CAN SIZES ARE DIFFERENT, WE ARE OF THE VIEW THAT THE DISPARITY BETWEEN
THE SUPPLIER'S AND MANUFACTURER'S BIDS WAS SUCH THAT THE HOLLEB BID
SHOULD NOT HAVE BEEN ACCEPTED WITHOUT FIRST POINTING OUT THE DISCREPANCY
IN PRICE TO THE BIDDER AND REQUESTING VERIFICATION.
IT IS CLEAR FROM THE HOLLEB WORKSHEET THAT IT DID NOT INTEND TO BID
ON ITEM 3. TO REQUIRE IT TO DELIVER ITEM 3 AT $10.95 A CASE NOW WOULD
BE TO ACCEPT A BID THAT WAS NOT ORIGINALLY INTENDED AND IS UNACCEPTABLE.
31 COMP. GEN. 183 (1951).
ACCORDINGLY, CANCELLATION OF THE CONTRACT IS THE ONLY RELIEF THAT
SHOULD BE GRANTED TO THE CONTRACTOR IN THE CIRCUMSTANCES.
THE ENCLOSURES ACCOMPANYING THE JANUARY 13 LETTER ARE RETURNED AS
REQUESTED.
B-169682(2), FEB 2, 1971
PROMPT PAYMENT DISCOUNT
DECISION CONCERNING THE PROPRIETY OF THE PROMPT PAYMENT DISCOUNT
TAKEN BY INTERNAL REVENUE SERVICE ON A CONTRACT WITH PROFESSIONAL CARPET
SERVICE FOR RUG AND CARPET CLEANING, REPAIRING AND INSTALLATION
SERVICES.
IF THE PURCHASE ORDER REQUIRED THE SUBMISSION OF A "WORK TICKET" FOR
EACH SERVICE CALL MADE, AND THE CONTRACTOR FAILED TO SUPPLY A CORRECT
INVOICE, THAT IS, ONE SUPPORTED BY A "WORK TICKET" AS EVIDENCE OF
ACCEPTANCE BY THE IRS AND THEREBY REQUIRING IRS TO FORWARD INVOICES TO
THE COGNIZANT OFFICE FOR APPROVAL AND ACCEPTANCE, THEN THE DISCOUNT
PERIOD DOES NOT BEGIN TO RUN UNTIL SUCH TIME AS THE INVOICE IS PROPERLY
SUPPORTED BY EVIDENCE OF ACCEPTANCE.
UNDER THESE CIRCUMSTANCES THE TAKING OF THE PROMPT PAYMENT DISCOUNT
WOULD BE PROPER - THE DISCOUNT PERIOD COMMENCED RUNNING FROM THE DATE ON
WHICH INVOICES APPROVED BY THE FACILITIES MANAGEMENT OFFICE WERE
RECEIVED IN THE PROPER OFFICE.
TO MISS RUDDY:
THIS IS IN REPLY TO YOUR LETTER OF APRIL 29, 1970, REFERENCE A:F:AF,
IN WHICH A DECISION IS REQUESTED AS TO WHETHER PROMPT PAYMENT DISCOUNTS
WERE PROPERLY TAKEN BY INTERNAL REVENUE SERVICE (IRS) UNDER GENERAL
SERVICES ADMINISTRATION (GSA) REQUIREMENTS TYPE CONTRACTS FOR RUG AND
CARPET CLEANING, REPAIRING, AND INSTALLATION SERVICES WITH THE
PROFESSIONAL CARPET SERVICE. ENCLOSED WITH YOUR LETTER IS A CHRONOLOGY
OF THE PERTINENT ACTIONS TAKEN BY THE PARTIES IN 13 CASES IN WHICH SUCH
SERVICES WERE ORDERED, PERFORMED, AND PAYMENTS WERE MADE AFTER DEDUCTING
THE DISCOUNTS.
FROM THE RECORD BEFORE US IT APPEARS THAT IRS WAS OPERATING UNDER THE
CONTRACTUAL PROVISION FOR ISSUANCE OF A BLANKET PURCHASE ORDER COVERING
ITS ESTIMATED REQUIREMENTS, AND PLACED ORDERS WITH PROFESSIONAL CARPET
SERVICE FROM TIME TO TIME AS SERVICES WERE REQUIRED. WE NOTE THAT THE
SAMPLE BLANKET PURCHASE ORDER SUBMITTED HERE APPLIES ONLY TO A PORTION
OF THE CASES SUBMITTED FOR OUR CONSIDERATION (FOR SERVICES RENDERED FROM
JULY 1, 1968 THROUGH FEBRUARY 28, 1969). THIS PURCHASE ORDER REQUIRES
THE CONTRACTOR TO FURNISH THE IRS FISCAL MANAGEMENT BRANCH A
"WORKTICKET" FOR EACH SERVICE CALL MADE THEREUNDER. YOUR LETTER OF
AUGUST 25, 1970, STATES THAT THE FUNCTION OF A "WORKTICKET" IS TO
PROVIDE EVIDENCE THAT A SERVICE WAS PERFORMED, AND, APPARENTLY, IT IS A
SIGNED RECEIPT BY A GOVERNMENT REPRESENTATIVE INDICATING ACCEPTANCE OF
THE SERVICES RENDERED.
YOUR LETTER OF DECEMBER 15, 1970, ADVISES THAT THE CONTRACTOR FAILED
TO FOLLOW THE BILLING INSTRUCTIONS FOR SUBMISSION OF "WORKTICKETS" AND
THEREFORE ITS INVOICES COULD NOT BE CERTIFIED FOR PAYMENT AT THE TIME
THEY WERE RECEIVED IN THE FISCAL MANAGEMENT BRANCH WITHOUT
"WORKTICKETS". ACCORDINGLY, IT BECAME NECESSARY FOR YOU TO FORWARD
INVOICES TO THE COGNIZANT OFFICE, THE FACILITIES MANAGEMENT OFFICE, FOR
APPROVAL AND ACCEPTANCE, DURING WHICH PERIOD PAYMENT COULD NOT HAVE BEEN
MADE. IN THESE CIRCUMSTANCES THE DISCOUNT PERIOD WAS DEEMED BY YOU TO
COMMENCE RUNNING FROM THE DATE ON WHICH INVOICES APPROVED BY THE
FACILITIES MANAGEMENT OFFICE WERE RECEIVED IN THE FISCAL MANAGEMENT
BRANCH SINCE AT THAT TIME THE CONTRACTOR'S FAILURE TO FOLLOW THE BILLING
INSTRUCTIONS HAD BEEN CURED AND NO LONGER PREVENTED THE CERTIFICATION
FOR PAYMENT.
IN CONNECTION WITH THE TAKING OF DISCOUNTS, SECTION 9(B) OF THE
SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, JULY 1966,
WHICH WAS INCORPORATED INTO THE CONTRACT REFERENCED IN YOUR SUBMISSION,
PROVIDES IN PERTINENT PART THAT TIME WILL BE COMPUTED FROM THE DATE A
CORRECT INVOICE OR VOUCHER IS RECEIVED IN THE OFFICE SPECIFIED BY THE
GOVERNMENT. SECTION 12 OF THE GSA CONTRACT FURTHER PROVIDES THAT
INVOICES SHALL BE SUBMITTED IN ACCORDANCE WITH BILLING INSTRUCTIONS
FURNISHED ON THE ORDERING AGENCY'S PURCHASE ORDER. SINCE THIS SECTION
DOES NOT DEFINE THE SCOPE OF THE BILLING INSTRUCTIONS WHICH THE ORDERING
AGENCIES MAY FURNISH, THE CONTRACTOR IS OBLIGATED TO COMPLY WITH
WHATEVER BILLING THE VARIOUS ORDERING AGENCIES MAY INCLUDE ON THEIR
PURCHASE ORDER, SO LONG AS SUCH INSTRUCTIONS ARE NOT UNREASONABLE. THE
REQUIREMENT FOR FURNISHING A WORKTICKET, AS SET OUT ON THE IRS PURCHASE
ORDER SUBMITTED HERE, DOES NOT APPEAR TO BE UNREASONABLE, AND THEREFORE
OBLIGATES THE CONTRACTOR TO BILL IRS IN THAT MANNER.
WE HAVE HELD THAT WHERE A CONTRACT SPECIFICALLY REQUIRES THAT A
CORRECT INVOICE MUST BE RECEIVED BY THE DESIGNATED GOVERNMENT ACTIVITY
AND IT ALSO REQUIRES SUBMISSION BY THE CONTRACTOR OF EVIDENCE OF
ACCEPTANCE, PAYMENT IS NOT AUTHORIZED TO BE MADE AND THE DISCOUNT PERIOD
DOES NOT BEGIN TO RUN FOR SUPPLIES DELIVERED UNTIL SUCH TIME AS THE
INVOICE IS PROPERLY SUPPORTED BY EVIDENCE OF ACCEPTANCE. 47 COMP. GEN.
765, 768 (1968). ALSO, THE COURT OF CLAIMS HAS HELD THAT WHERE A
CORRECT BILL IS NOT SUBMITTED THE GOVERNMENT IS ENTITLED TO THE DISCOUNT
AT THE TIME SETTLEMENT IS MADE. THOS. SOMERVILLE COMPANY V THE UNITED
STATES, 99 CT. CL. 329 (1943).
SIMILARLY, IN THE PRESENT CASE THE CONTRACTOR WAS OBLIGED, AND
FAILED, TO FURNISH A CORRECT INVOICE, THAT IS, ONE SUPPORTED BY EVIDENCE
OF ACCEPTANCE, AND IT WOULD APPEAR FROM THE PRESENT RECORD THAT HIS
FAILURE TO DO SO PREVENTED YOUR OFFICE FROM CERTIFYING THE CONTRACTOR'S
INVOICES FOR PAYMENT AT THE TIME THEY WERE ORIGINALLY SUBMITTED.
SINCE YOU HAVE NOT PROVIDED US WITH THE SPECIFIC DISCOUNT TERMS AND
PURCHASE ORDER APPLICABLE TO EACH CASE LISTED IN YOUR SUBMISSION, WE CAN
ONLY ADVISE YOU GENERALLY THAT DISCOUNTS WERE PROPERLY TAKEN IF IN EACH
CASE "WORKTICKETS" WERE REQUIRED AND PAYMENT WAS MADE WITHIN THE
APPLICABLE DISCOUNT PERIOD COMPUTED AS COMMENCING FROM THE DATE AN
INVOICE, SUPPORTED BY A "WORKTICKET" OR EQUIVALENT EVIDENCE OF
ACCEPTANCE, WAS RECEIVED BY THE OFFICE SPECIFIED BY THE GOVERNMENT FOR
SUBMISSION OF INVOICES. IF IN ANY CASE THE PURCHASE ORDER DID NOT
PROVIDE BILLING INSTRUCTIONS WHICH REQUIRED THE SUBMISSION OF A
"WORKTICKET" OR EQUIVALENT EVIDENCE OF DELIVERY AND ACCEPTANCE, THE
DISCOUNT PERIOD SHOULD BE COMPUTED AS RUNNING FROM THE DATE A CORRECT
INVOICE WAS FIRST RECEIVED IN THE OFFICE SPECIFIED, AND IN SUCH
CIRCUMSTANCES THE CONTRACTOR IS NOT RESPONSIBLE FOR THE TIME REQUIRED TO
OBTAIN ANY NECESSARY EVIDENCE OF DELIVERY AND ACCEPTANCE PRIOR TO
CERTIFICATION FOR PAYMENT.
YOU HAVE ALSO REQUESTED US TO ADVISE WHETHER YOU PROPERLY CONSIDERED
THE DATE OF THE GOVERNMENT CHECK AS THE DATE ON WHICH PAYMENT WAS
EFFECTED EVEN THOUGH THE BASIC CONTRACTS PROVIDED THAT PAYMENT WAS
DEEMED TO OCCUR ON THE DATE THE CHECK WAS MAILED. IN THE ABSENCE OF AN
OBJECTION BY THE CONTRACTOR AT THE TIME A PARTICULAR DISCOUNT WAS TAKEN
OR WITHIN A REASONABLE TIME THEREAFTER, AND SINCE THERE APPARENTLY IS NO
OTHER INFORMATION TO ESTABLISH THE ACTUAL DATE PAYMENT WAS MAILED, WE
HAVE NO LEGAL OBJECTION TO YOUR USE OF THE DATES ON THE CHECKS AS THE
MAILING DATES.
SUBSEQUENT TO YOUR REQUEST FOR A DECISION IN THIS MATTER PROFESSIONAL
CARPET SERVICE FILED A CLAIM WITH THIS OFFICE FOR REFUND OF PROMPT
PAYMENT DISCOUNTS TAKEN BY IRS. COPIES OF THE INVOICES WERE TRANSMITTED
TO YOU BY OUR CLAIMS DIVISION WITH A REQUEST FOR ADMINISTRATIVE
EXAMINATION AND REPORT IN THE MATTER. IT IS THEREFORE REQUESTED THAT A
DETERMINATION REGARDING THESE INVOICES BE MADE IN ACCORDANCE WITH THIS
DECISION AND THAT A REPORT IN THE MATTER BE SUBMITTED TO OUR CLAIMS
DIVISION.
B-169682(3), FEB 2, 1971
PROMPT PAYMENT DISCOUNT
DECISION SUSTAINING THE DISALLOWANCE OF CLAIM BY PROFESSIONAL CARPET
SERVICE FOR THE PROMPT PAYMENT DISCOUNT DEDUCTED BY THE NATIONAL
INSTITUTES OF HEALTH FROM AN INVOICE FOR $978.46.
WHERE A PROVISION OF THE CONTRACT WHICH PROVIDES THAT IF THE DATE ON
WHICH A CORRECT INVOICE OR VOUCHER IS RECEIVED IN THE OFFICE SPECIFIED
BY THE GOVERNMENT IS LATER THAN THE DATE OF DELIVERY, THE TIME FOR
TAKING THE DISCOUNT WILL BE COMPUTED FROM THE DATE THE INVOICE IS
RECEIVED, AND CLAIMANT SUBMITS A COPY OF THE INVOICE WITH THE STAMPED
RECEIVING DATE OF NOVEMBER 22, 1968, BUT FAILS TO INDICATE WHERE OR BY
WHOM IT WAS RECEIVED, THE NIH HAVING SUBMITTED A COPY OF THE INVOICE
SIGNED AND DATED DECEMBER 2, 1968, THEN IN THE ABSENCE OF ANY ADDITIONAL
EVIDENCE, GAO WILL ACCEPT THE ADMINISTRATIVE POSITION AND WILL SUSTAIN
THE DISALLOWANCE OF THE CLAIM.
TO PROFESSIONAL CARPET SERVICE:
THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 25, 1970, REQUESTING, IN
EFFECT, RECONSIDERATION OF THE DISALLOWANCE BY OUR CLAIMS DIVISION DATED
NOVEMBER 20, 1970, OF YOUR CLAIM (Z-2363901(6)) UNDER GENERAL SERVICES
ADMINISTRATION CONTRACT NO. GS-035-29827.
YOUR LETTER APPEARS TO QUESTION THE DISALLOWANCE OF YOUR CLAIM FOR
THE PROMPT PAYMENT DISCOUNT DEDUCTED BY THE NATIONAL INSTITUTES OF
HEALTH, DEPARTMENT OF HEALTH, EDUCATION AND WELFARE, (NIH) FROM THE
INVOICE FOR $978.46. YOU ARGUE THAT THE 20 DAY PERIOD FOR TAKING THE
PROMPT PAYMENT DISCOUNT LAPSED PRIOR TO PAYMENT SINCE IT BEGAN TO RUN
FROM THE DATE THE SERVICES WERE DELIVERED, WHICH YOU CLAIM WAS NOVEMBER
22, RATHER THAN FROM DECEMBER 2, THE DATE THE GOVERNMENT CONTENDS THE
SUBJECT INVOICE WAS SIGNED AND DATED AS RECEIVED IN THE OFFICE SPECIFIED
BY THE GOVERNMENT.
IN CONNECTION WITH THE TAKING OF DISCOUNTS, SECTION 9(B) OF THE
SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, JULY 1966,
WHICH WAS INCORPORATED INTO THE CONTRACT INVOLVED HERE, PROVIDES, IN
PERTINENT PART, THAT IF THE DATE ON WHICH A CORRECT INVOICE OR VOUCHER
IS RECEIVED IN THE OFFICE SPECIFIED BY THE GOVERNMENT IS LATER THAN THE
DATE OF DELIVERY, THE TIME FOR TAKING THE DISCOUNT WILL BE COMPUTED FROM
THE DATE THE INVOICE IS RECEIVED. TO THE SAME EFFECT SEE OUR DECISION
TO YOU OF AUGUST 19, 1970, B-169682.
IN THIS CONNECTION WE NOTE THAT THE COPY OF THE INVOICE WHICH YOU
SUBMITTED IN SUPPORT OF YOUR CLAIM SHOWS A STAMPED RECEIVING DATE OF
NOVEMBER 22, 1968, BUT FAILS TO INDICATE WHERE OR BY WHOM IT WAS
RECEIVED ON THAT DATE. ON THE OTHER HAND, NIH HAS SUBMITTED A COPY OF
THE INVOICE IN ITS POSSESSION WHICH WAS SIGNED AND DATED AS RECEIVED ON
DECEMBER 2, 1968, IN THE OFFICE SPECIFIED BY THE GOVERNMENT. AS BETWEEN
THESE TWO INVOICES IT IS OUR OPINION THE ONE PRESENTED BY NIH IS MORE
CONVINCING, AND IN THE ABSENCE OF ANY ADDITIONAL EVIDENCE OR CONVINCING
EXPLANATION AS TO WHY YOUR UNSIGNED INVOICE IS CORRECT AND THE NIH
INVOICE IS INCORRECT WE ARE REQUIRED TO ACCEPT THE ADMINISTRATIVE
POSITION IN THE MATTER.
SINCE THE NIH INVOICE SHOWS THAT IT WAS RECEIVED IN THE OFFICE
SPECIFIED BY THE GOVERNMENT ON DECEMBER 2, 1968, IN ACCORDANCE WITH THE
ABOVE STATED CONTRACT PROVISIONS, AND SINCE PAYMENT WAS MADE WITHIN 20
DAYS THEREAFTER BY CHECK DATED DECEMBER 17, 1968, WE MUST CONCLUDE THAT
THE DISCOUNT WAS EARNED BY THE GOVERNMENT.
ACCORDINGLY, THE ABOVE REFERENCED DISALLOWANCE OF YOUR CLAIM MUST BE
SUSTAINED.
B-170317, FEB 2, 1971
BID PROTEST - NONRESPONSIVE OFFER
DENIAL OF PROTEST BY INFORMATION INTERNATIONAL, INC., AGAINST AWARD
OF A CONTRACT FOR A VIDEO FILM CONVERTER ISSUED BY THE MANNED SPACECRAFT
CENTER, NASA, TO SINGER-GENERAL PRECISION, INC.
WHERE ALL PROPOSALS WERE EVALUATED UNDER THE SAME CRITERIA AGAINST
THE EIGHT TESTED EVALUATION FACTORS IN THE RFP AND THE PURCHASING
ACTIVITY CONCLUDED THAT PROTESTANT FAILED TO OFFER A TECHNICAL APPROACH
WHICH COULD BE CONSIDERED WITHIN THE COMPETITIVE RANGE, A DEBRIEFING
WITH PROTESTANT COMPORTING WITH THE REQUIREMENTS OF NASA PROCUREMENT
REGULATION 3.106-3(D) IS ADEQUATE AND WAS PROPERLY LIMITED TO A
DISCUSSION OF PROTESTANT'S PROPOSAL AND ITS RESPONSIVENESS, OR LACK
THEREOF, TO THE SUBJECT RFP.
TO INFORMATION INTERNATIONAL, INC.:
REFERENCE IS MADE TO YOUR LETTER OF JULY 2, 1970, PROTESTING AGAINST
THE AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) NO.
BG921-38-0-10P TO ANOTHER OFFEROR AT A HIGHER ESTIMATED COST.
THE RFP WAS ISSUED ON AUGUST 14, 1969, BY THE MANNED SPACECRAFT
CENTER, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) AND COVERED
THE PROCUREMENT OF A VIDEO PROCESSING FILM CONVERTER. OFFERORS WERE
ADVISED THAT IT WAS THEIR RESPONSIBILITY TO DEVELOP THEIR OWN STATEMENTS
OF WORK AND THAT THE OBJECT OF THE PROCUREMENT WAS TO PROCURE AN
INSTRUMENT THAT "INCLUDES ALL THE LATEST STATE-OF-THE-ART TECHNOLOGY."
IN RESPONSE TO THE RFP, INFORMATION INTERNATIONAL, INC. (II), SUBMITTED
A PROPOSAL DESCRIBING TWO ALTERNATE APPROACHES TO MEET NASA'S
REQUIREMENTS. AFTER AN EVALUATION OF YOUR PROPOSAL WAS CONDUCTED BY
EACH MEMBER OF A SIX-MAN EVALUATING BOARD, BOTH ALTERNATES WERE FOUND TO
BE TECHNICALLY UNACCEPTABLE AND YOUR PROPOSAL WAS REJECTED.
SINCE YOU ADMIT, IN YOUR LETTER OF PROTEST TO OUR OFFICE, THAT YOUR
FIRST APPROACH DID NOT MEET THE RFP SPECIFICATIONS, IT IS NOT NECESSARY
TO COMMENT ON THIS ALTERNATE. WITH RESPECT TO YOUR SECOND APPROACH, YOU
CONTEND THAT IT MET ALL REQUIREMENTS OF THE RFP AND WAS NOT A RESEARCH
AND DEVELOPMENT PROJECT. YOU FURTHER STATE THAT AT A DEBRIEFING
MEETING, WHICH II REQUESTED SUBSEQUENT TO THE REJECTION OF ITS PROPOSAL,
NO VERBAL OR WRITTEN TECHNICAL REASON WAS GIVEN FOR II'S REJECTION.
THE RECORD INDICATES THAT ALL PROPOSALS WERE EVALUATED UNDER THE SAME
CRITERIA AGAINST THE EIGHT LISTED EVALUATION FACTORS IN THE RFP. THE
EVALUATION PROCESS WAS SUCH THAT, AT ITS CONCLUSION, EACH PROPOSAL WAS
ASSIGNED A NUMERICAL SCORE REPRESENTING ITS RELATIVE TECHNICAL
ACCEPTABILITY. IT'S FIRST AND SECOND APPROACH RECEIVED RATINGS OF 60.21
AND 58.40, RESPECTIVELY. THE NEXT HIGHEST RATING WAS 70.86. THE
REMAINING RATINGS RANGED THROUGH THE 70'S AND 80'S WITH THE HIGHEST
RATING FOR ANY PROPOSAL BEING 84.88. ON THE BASIS OF THESE RATINGS, THE
PURCHASING ACTIVITY CONCLUDED THAT II FAILED TO OFFER A TECHNICAL
APPROACH WHICH COULD BE CONSIDERED WITHIN THE COMPETITIVE RANGE.
THEREAFTER, AWARD WAS MADE TO SINGER-GENERAL PRECISION, INC., LINK
DIVISION, ON MARCH 23, 1970, ON A COST-PLUS-INCENTIVE-FEE BASIS.
IN OUR DECISION B-169671(1), AUGUST 31, 1970, WHICH IS APPLICABLE
HERE, WE SAID:
"BOTH 10 U.S.C. 2304(G) AND PARAGRAPH 3-805.1(A) OF THE ARMED
SERVICES PROCUREMENT REGULATION (ASPR) GENERALLY REQUIRE DISCUSSIONS
WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE
RANGE, PRICE AND OTHER FACTORS CONSIDERED. WE HAVE HELD THAT THE TERM
'OTHER FACTORS' INCLUDES THE TECHNICAL ACCEPTABILITY OF PROPOSALS, 46
COMP. GEN. 606 (1967), AND WE HAVE ALSO HELD THAT A DETERMINATION OF
WHAT CONSTITUTES A 'COMPETITIVE RANGE', PARTICULARLY WITH RESPECT TO THE
EVALUATION OF TECHNICAL PROPOSALS, IS PRIMARILY A MATTER OF
ADMINISTRATIVE DISCRETION WHICH WILL NOT BE DISTURBED BY THIS OFFICE IN
THE ABSENCE OF A CLEAR SHOWING THAT SUCH DETERMINATION WAS AN ARBITRARY
EXERCISE OF DISCRETION. SEE 48 COMP. GEN. 314, 317-318 (1968);
B-164313, JULY 5, 1968."
IN VIEW OF THE POINT RATINGS RECEIVED BY YOUR FIRM AND THE ABSENCE OF
ANY INDICATION THAT II WAS PREJUDICED BY THE MANNER IN WHICH THE
EVALUATION WAS CONDUCTED, WE SEE NO JUSTIFIABLE BASIS FOR DISAGREEING
WITH THE DETERMINATION OF THE PURCHASING ACTIVITY THAT II'S PROPOSAL WAS
SO TECHNICALLY DEFICIENT AS TO MAKE IT TECHNICALLY UNACCEPTABLE. HENCE,
WE ARE UNABLE TO CONCLUDE THAT FURTHER DISCUSSIONS WITH II WERE
REQUIRED. SEE 49 COMP. GEN. 309, 310-311 (1969).
THE CONTRACTING OFFICER EXPRESSLY DENIES THAT II WAS NEVER GIVEN
REASONS AS TO WHY ITS PROPOSALS WERE REJECTED. HE STATES, HOWEVER, THAT
IT WAS DIFFICULT TO GO INTO SPECIFICS AT THE DEBRIEFING MEETING WITH II
BECAUSE OF THE SUBSTANTIAL DEGREE TO WHICH II'S PROPOSAL WAS INADEQUATE.
WHILE YOUR POSITION ON THIS MATTER IS IN DIRECT CONFLICT WITH THE
STATEMENT OF THE CONTRACTING OFFICER TO OUR OFFICE, THE FILE CONTAINS A
MEMORANDUM DATED MAY 12, 1970, OF THE DEBRIEFING WITH YOUR FIRM WHICH
COMPORTS WITH THE REQUIREMENTS OF NASA PROCUREMENT REGULATION
3.106-3(D). IN PART THE MEMORANDUM READS:
"MANY OF THE QUESTIONS ASKED BY THE INFORMATION INTERNATIONAL
REPRESENTATIVES COULD NOT BE ANSWERED AS THEY WERE DIRECTED TOWARD
INFORMATION CONTAINED IN PROPOSALS OF OTHER CONTRACTORS.
"INFORMATION INTERNATIONAL WAS ADVISED THAT THE DEBRIEFING WAS
LIMITED TO A DISCUSSION OF THEIR PROPOSAL AND ITS RESPONSIVENESS, OR
LACK THEREOF, TO THE SUBJECT RFP.
"IT IS THE BELIEF OF THE UNDERSIGNED THAT THE INFORMATION PROVIDED TO
THE INFORMATION INTERNATIONAL INC. REPRESENTATIVES WILL ENABLE THEM TO
BE MORE RESPONSIVE TO FUTURE SOLICITATIONS."
ON THE QUESTION WHETHER YOUR PROPOSAL CALLED FOR A RESEARCH AND
DEVELOPMENT PROJECT, THE CONTRACTING OFFICER POINTS OUT THAT ON PAGE
2-1, VOLUME 1 OF YOUR TECHNICAL PROPOSAL, YOU STATE, "THIS ALTERNATE
APPROACH IS A DEVELOPMENT EFFORT BY INFORMATION INTERNATIONAL TO PROVIDE
A VIDEO PROCESSING FILM CONVERTER." HE ALSO DIRECTS OUR ATTENTION TO
OTHER STATEMENTS IN THE FOREWORD AND AT PAGE 2-9 OF THE SAME VOLUME
WHICH CONVEY THE IMPRESSION THAT A DEVELOPMENT EFFORT WAS REQUIRED.
WHETHER OR NOT THESE STATEMENTS ACCURATELY REFLECT II'S INTENT WITH
RESPECT TO ITS SECOND APPROACH NEED NOT BE RESOLVED HERE SINCE BOTH
TECHNICAL APPROACHES PROPOSED BY YOUR FIRM WERE UNACCEPTABLE AND WOULD
NOT MEET THE TECHNICAL NEEDS OF NASA AS SET FORTH IN THE RFP.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-170400, FEB 2, 1971
CIVILIAN EMPLOYEES - NONAPPROPRIATED FUND ACTIVITIES
REAFFIRMING PRIOR DECISION HOLDING THAT UNPAID COMPENSATION DUE A
FORMER EMPLOYEE OF THE DEFENSE SUPPLY AGENCY MAY NOT BE SET OFF TO
SATISFY AN INDEBTEDNESS OWED A NON-APPROPRIATED FUND ACTIVITY SUCH AS
THE OFFICERS CLUB SINCE FOR THE MOST PART EMPLOYEES OF NON-APPROPRIATED
FUND ACTIVITIES ARE NOT REGARDED AS REGULAR EMPLOYEES OF THE U.S. EVEN
THOUGH NONAPPROPRIATED FUND ACTIVITIES ARE CONSIDERED INSTRUMENTALITIES
OF THE UNITED STATES.
TO MR. A. R. PRAY:
THIS REFERS TO YOUR LETTER OF NOVEMBER 13, 1970, REQUESTING
RECONSIDERATION OF THAT PART OF OUR DECISION OF SEPTEMBER 21, 1970,
WHICH HELD THAT UNPAID COMPENSATION DUE A FORMER EMPLOYEE OF THE DEFENSE
SUPPLY AGENCY MAY NOT BE SET OFF TO SATISFY AN INDEBTEDNESS OWED A
NONAPPROPRIATED FUND ACTIVITY SUCH AS THE OFFICERS CLUB AND THAT NEITHER
COULD THE AMOUNT IN THE CIVIL SERVICE RETIREMENT FUND TO THE CREDIT OF
THE FORMER EMPLOYEE BE APPLIED TOWARD PAYMENT OF A CLAIM BY AN INSURANCE
COMPANY.
YOU SAY THAT OUR DECISION OF SEPTEMBER 21, 1970, APPEARS TO BE IN
CONFLICT WITH THE POSITION OF THE DEPARTMENT OF JUSTICE IN PROSECUTING
THE EMPLOYEE AND THAT WE HAVE OVERLOOKED CURRENT LAW AND REGULATIONS.
YOU ALSO STATE THAT THE COURTS AS WELL AS ARMY REGULATIONS SHOW THAT
NONAPPROPRIATED FUND ACTIVITIES AR INSTRUMENTALITIES OF THE UNITED
STATES.
IN YOUR LETTER YOU STATE THAT THE FORMER EMPLOYEE WAS CONVICTED OF
THE THEFT OF GOVERNMENT PROPERTY IN VIOLATION OF 18 U.S.C. 641 AND 2. 18
U.S.C. 641 PROVIDES IN PART THAT:
"WHOEVER *** STEALS *** MONEY, OR THING OF VALUE OF THE UNITED STATES
OR OF ANY DEPARTMENT OR AGENCY, THEREOF, OR ANY PROPERTY MADE OR BEING
MADE UNDER CONTRACT FOR THE UNITED STATES OR ANY DEPARTMENT OR AGENCY
THEREOF ***
"SHALL BE FINED NOT MORE THAN $10,000 OR IMPRISONED NOT MORE THAN TEN
YEARS, OR BOTH *** ."
UNDER THE ABOVE-QUOTED STATUTE ANY PERSON STEALING MONEY BELONGING TO
AN AGENCY OF THE UNITED STATES WOULD BE GUILTY OF A CRIME. AS STATED BY
YOU, THE COURTS HAVE HELD THAT NONAPPROPRIATED FUND ACTIVITIES ARE
INSTRUMENTALITIES OR AGENCIES OF THE GOVERNMENT. SEE STANDARD OIL CO.
OF CALIFORNIA V JOHNSON, 316 U.S. 481 (1942); BRETHAUER V UNITED
STATES, 333 F. 2D 302 (1964); UNITED STATES V HOWELL, 318 F. 2D 162
(1963); UNITED STATES V HOLCOMBE, 277 F. 2D 143 (1960); UNITED STATES
V FORFARI, 268 F. 2D 29 (1959); AND DANIELS V CHANUTE AIR FORCE BASE
EXCHANGE, 127 F. SUPP. 920 (1955). SEE ALSO 38 COMP. GEN. 470, ANSWER
TO QUESTION 5 AT PAGE 475 WHEREIN WE HELD THAT A SALE TO AN INTEGRAL
PART OF THE NAVY, INCLUDING POST EXCHANGE, SHIPS' STORE OR OTHER
ORGANIZATION OR CLUB WHICH IS OPERATED AS AN INTEGRAL PART OF THE NAVY
WOULD CONSTITUTE A SALE TO AN AGENCY OF THE DEPARTMENT OF DEFENSE.
WE ALSO CONSIDER THE ARMY AND AIR FORCE EXCHANGE SERVICE AS A
GOVERNMENT INSTRUMENTALITY WHICH FUNCTIONS AS AN AGENCY OF THE ARMY AND
AIR FORCE UNDER THE EXECUTIVE CONTROL OF THE OFFICERS OF THE SERVICES
CONCERNED WHO CONTINUE TO RECEIVE PAY AND ALLOWANCES AS OFFICERS.
HOWEVER, EXCEPT FOR FURNISHING SUITABLE FACILITIES FOR THE OPERATIONS,
APPROPRIATED FUNDS ARE NOT AVAILABLE FOR EXCHANGE OPERATIONS. IN THIS
CONNECTION SECTION 4779(C) OF TITLE 10, UNITED STATES CODE, PROVIDES:
"NO MONEY APPROPRIATED FOR THE SUPPORT OF THE ARMY MAY BE SPENT FOR
*** ARMY EXCHANGES. HOWEVER, THIS DOES NOT PREVENT ARMY EXCHANGES FROM
USING PUBLIC BUILDINGS OR PUBLIC TRANSPORTATION THAT, IN THE OPINION OF
THE OFFICE OR OFFICER DESIGNATED BY THE SECRETARY, ARE NOT NEEDED FOR
OTHER PURPOSES."
ALTHOUGH THE PRECEDING INDICATES SUBSTANTIAL ADHERENCE TO THE
PROPOSITION THAT THE EXCHANGE SERVICE IS A GOVERNMENT INSTRUMENTALITY,
IT ALSO SUGGESTS LIMITATIONS AND URGES CAUTION IN ENLARGING THE SCOPE
AND NUMBER OF LEGAL INFERENCES THAT CAN SAFELY BE DRAWN FROM THE
AGENCY'S INSTRUMENTALITY STATUS. SEE B-168451, DATED MARCH 11, 1970, 49
COMP. GEN. ___.
IN STANDARD OIL CO. OF CALIFORNIA, SUPRA, WHILE IT WAS HELD THAT POST
EXCHANGES ARE FEDERAL INSTRUMENTALITIES FOR PURPOSES OF THEIR EXPOSURE
TO CERTAIN STATE TAXES, THE FACT REMAINS THAT THE EXCHANGES ARE
NONAPPROPRIATED FUND ACTIVITIES. IN 1952, AT THE REQUEST OF THE
DEPARTMENT OF DEFENSE, CONGRESS ENACTED PUBLIC LAW 397, NOW CODIFIED IN
5 U.S.C. 2105 WHICH EXPRESSLY PROVIDES THAT EMPLOYEES OF
NONAPPROPRIATED FUND ACTIVITIES SUCH AS HERE INVOLVED WERE NOT DEEMED
EMPLOYEES OF THE UNITED STATES FOR THE PURPOSE OF LAWS ADMINISTERED BY
THE CIVIL SERVICE COMMISSION OR THE PROVISIONS OF SUBCHAPTER I OF
CHAPTER 81 (EMPLOYEES' COMPENSATION FOR INJURIES) IN SECTION 7902
(SAFETY PROGRAMS FOR EMPLOYEES) OF TITLE 5, UNITED STATES CODE. IT ALSO
PROVIDED THAT THE STATUS OF THESE NONAPPROPRIATED FUND ACTIVITIES AS
FEDERAL INSTRUMENTALITIES SHALL NOT BE AFFECTED. THE LEGISLATIVE
HISTORY OF THIS ACT CLEARLY SHOWS THAT THE ACT WAS PASSED TO ALLAY THE
DOUBTS RAISED BY THE STANDARD OIL CASE, SUPRA, AS TO WHETHER OR NOT THE
VARIOUS CIVIL SERVICE LAWS AND REGULATIONS WERE APPLICABLE TO CIVILIAN
EMPLOYEES OF NONAPPROPRIATED FUND ACTIVITIES.
IN BAILEY V UNITED STATES, 201 F. SUPP. 604 (1962), IN AN ACTION
UNDER THE TUCKER ACT AGAINST THE UNITED STATES FOR BREACH OF CONTRACT
BETWEEN THE PLAINTIFF AND AN AIR FORCE POST EXCHANGE IT WAS STATED THAT:
"IT IS SETTLED THAT OBLIGATIONS ARISING OUT OF A CONTRACT WITH A POST
EXCHANGE ARE NOT LIABILITIES OF THE UNITED STATES UPON WHICH SUIT COULD
BE INSTITUTED. BORDEN V UNITED STATES, (COURT OF CLAIMS, 1953), D.C.,
116 F. SUPP. 873; PULASKI CAB COMPANY V UNITED STATES, (COURT OF CLAIMS
1958), D.C. 157 F. SUPP. 955; EDELSTEIN V SOUTH POST OFFICERS CLUB
(D.C. E.D. VA. 1951), 118 F. SUPP. 40. THESE DECISIONS ARE BASED UPON
THE CASE OF STANDARD OIL CO. OF CALIFORNIA V JOHNSON (1942), 316 U.S.
481, 62 S. CT. 1168, 86 L. ED. 1611, IN WHICH THE SUPREME COURT HELD
THAT EXCHANGE CONTRACTS ARE SOLELY THE OBLIGATION OF THE EXCHANGE, THAT
THEY ARE NOT GOVERNMENT CONTRACTS, AND THAT THE GOVERNMENT ASSUMES NONE
OF THE FINANCIAL OBLIGATIONS OF THE EXCHANGE."
PUBLIC LAW 91-350 WAS APPROVED JULY 23, 1970, AMENDING 28 U.S.C.
1346(A)(2) TO PROVIDE COURTS OF THE UNITED STATES WITH JURISDICTION OVER
CONTRACT CLAIMS AGAINST NONAPPROPRIATED FUND ACTIVITIES OF THE UNITED
STATES. SUBSECTION (A) OF THE FIRST SECTION PROVIDES THAT AN EXPRESS OR
IMPLIED CONTRACT WITH THE ARMY AND AIR FORCE EXCHANGE SERVICE, NAVY
EXCHANGES, MARINE CORPS EXCHANGES, COAST GUARD EXCHANGES, OR EXCHANGE
COUNCILS OF THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION SHALL BE
CONSIDERED AN EXPRESS OR IMPLIED CONTRACT WITH THE UNITED STATES.
SUBSECTION (C) OF THE FIRST SECTION REQUIRES THAT THE UNITED STATES BE
REIMBURSED BY THE APPROPRIATE NONAPPROPRIATED FUND ACTIVITY FOR ANY
JUDGMENT OR COMPROMISE SETTLEMENT SO PAID BY THE UNITED STATES. ALSO,
PARAGRAPH 7 OF SECTION 1 OF ARMY REGULATION NO. 60-10, DATED MARCH 25,
1969, PROVIDES THAT CLAIMS, JUDGEMENTS, INCLUDING COMPROMISE SETTLEMENTS
OF COURT ACTIONS, AGAINST THE UNITED STATES ARISING OUT OF EXCHANGE
ACTIVITIES ARE PAYABLE SOLELY OUT OF AAFES FUNDS.
POST RESTAURANTS AND OFFICERS' OPEN MESSES ARE LARGELY FINANCED AND
OPERATED THROUGH THE USE OF NONAPPROPRIATED FUNDS AS DISTINGUISHED FROM
PUBLIC FUNDS. THAT IS TO SAY, THE REVENUES AND RECEIPTS DERIVED FROM
THE OPERATION OF THESE ACTIVITIES DO NOT INURE TO THE BENEFIT OF THE
TREASURY AND ARE NOT ACCOUNTED FOR AS PUBLIC FUNDS, NOR ARE THE
EXPENDITURES CONNECTED THEREWITH RELATED TO THE PAYMENT OF OBLIGATIONS
INCURRED UNDER AUTHORITY OF APPROPRIATED FUNDS.
WE HAVE HELD THAT DEBTS DUE NONAPPROPRIATED FUND ACTIVITIES ARE NOT
DEBTS DUE THE UNITED STATES AND THAT THERE IS NO AUTHORITY TO SET OFF
DEBTS DUE SUCH ACTIVITIES AGAINST THE AMOUNTS OTHERWISE DUE A CIVILIAN
EMPLOYEE. SEE 9 COMP. GEN. 353 (1930); 9 ID. 411 (1930); 11 ID. 161
(1931); 31 ID. 363 (1952) AND 43 ID. 431 (1963). AS POINTED OUT BY
YOU IN YOUR LETTER, THE ARMY REGULATIONS CITED IN 9 COMP. GEN. 411 ARE
NO LONGER APPLICABLE. HOWEVER, IT WAS THE TYPE OF FUNDS INVOLVED AND NOT
THE ARMY REGULATIONS WHICH WAS THE CONTROLLING FACTOR IN THAT CASE. IT
WAS STATED IN THAT DECISION THAT SINCE PUBLIC FUNDS ARE NOT INVOLVED IN
THE ESTABLISHMENT OR OPERATION OF POST RESTAURANTS, AND SINCE THE ONLY
CONNECTION OF SUCH RESTAURANTS WITH THE GOVERNMENT IS THAT THEY ARE
ESTABLISHED AND MAINTAINED WITH THE SANCTION OF THE WAR DEPARTMENT, AN
INDEBTEDNESS TO A POST RESTAURANT CANNOT BE REGARDED AS AN INDEBTEDNESS
TO THE UNITED STATES.
FROM THE FOREGOING IT IS EVIDENT THAT FOR THE MOST PART THE EMPLOYEES
OF NONAPPROPRIATED FUND ACTIVITIES HAVE NOT BEEN REGARDED AS REGULAR
EMPLOYEES OF THE UNITED STATES EVEN THOUGH NONAPPROPRIATED FUND
ACTIVITIES ARE INSTRUMENTALITIES OF THE UNITED STATES. WE AGREE THAT IT
SEEMS INCONSISTENT TO SAY THAT AN EMPLOYEE OF SUCH AN ACTIVITY IS NOT AN
EMPLOYEE OF THE UNITED STATES WHEN HE HAS BEEN CONVICTED FOR STEALING
PROPERTY OF THE UNITED STATES WHICH ACTUALLY BELONGED TO THE
NONAPPROPRIATED FUND ACTIVITY. HOWEVER, WE POINT OUT THAT PART OF THE
PROPERTY INVOLVED IN THE THEFT, NAMELY, A PISTOL, DID BELONG TO THE
UNITED STATES AS DISTINGUISHED FROM THE NONAPPROPRIATED FUND ACTIVITY.
PERHAPS THIS WAS THE REASON THAT NO ARGUMENT WAS MADE THAT NO FUNDS OR
PROPERTY BELONGING TO THE UNITED STATES WAS TAKEN. IN ANY EVENT ON THE
BASIS THAT A DISTINCTION EXISTS BETWEEN THE CRIMINAL ASPECTS OF THE CASE
AND THE CIVIL LIABILITY DERIVING THEREFROM, WE DO NOT FEEL JUSTIFIED IN
HOLDING, CONTRARY TO OUR OTHER DECISIONS IN THIS AREA, THAT THE FORMER
EMPLOYEE IS INDEBTED TO THE UNITED STATES FOR THE TAKING OF PROPERTY OR
FUNDS BELONGING TO THE NONAPPROPRIATED FUND ACTIVITY.
B-170804, FEB 2, 1971
INCENTIVE AWARDS - ELIGIBILITY
ADVISING THAT THE CHIEF CLERK AND HER ASSISTANT IN THE OFFICE OF THE
REFEREE IN BANKRUPTCY IN LOUISVILLE, KY., ARE ELIGIBLE TO RECEIVE
INCENTIVE AWARDS PURSUANT TO THE GOVERNMENT EMPLOYEE'S INCENTIVE AWARDS
ACT, 5 U.S.C. 4501-4506 FOR WORK DONE IN REORGANIZING REFEREE'S OFFICES
ALL OVER THE COUNTRY AND IN PUERTO RICO, DESPITE THE FACT THAT THE ABOVE
CITED ACT DOES NOT APPLY TO MOST OF THE JUDICIAL BRANCH BECAUSE THE WORK
FOR WHICH THEY ARE BEING REWARDED WAS DONE WHILE ON SPECIAL ASSIGNMENT
ON BEHALF OF THE ADMINISTRATIVE OFFICE OF THE U.S. COURTS WHICH OFFICE
WAS SPECIFICALLY INCLUDED WITHIN THE OPERATION OF THE ACT.
TO MR. KIRKS:
THE GENERAL COUNSEL OF THE ADMINISTRATIVE OFFICE OF THE UNITED STATES
COURTS IN A LETTER OF SEPTEMBER 9, 1970, REQUESTED OUR OPINION WHETHER A
CHIEF CLERK AND HER ASSISTANT IN THE OFFICE OF THE REFEREE IN BANKRUPTCY
IN LOUISVILLE, KENTUCKY, MAY BE RECIPIENTS OF AN AWARD UNDER THE
INCENTIVE AWARDS PROGRAM ESTABLISHED PURSUANT TO THE GOVERNMENT
EMPLOYEES' INCENTIVE AWARDS ACT, PUBLIC LAW 763, 83D CONGRESS, SEPTEMBER
1, 1954, NOW CODIFIED IN 5 U.S.C. 4501-4506. IT IS INDICATED THE CHIEF
CLERK AND HER ASSISTANT HAVE DONE AN EXEMPLARY JOB IN REORGANIZING
REFEREES' OFFICES ALL OVER THE COUNTRY AND IN PUERTO RICO.
THE INCENTIVE AWARDS PROGRAM, ALTHOUGH VIEWED AS AN EMPLOYEE FRINGE
BENEFIT (PUBLIC LAW 763, 83D CONGRESS, ESTABLISHING THE CURRENT PROGRAM
WAS ENTITLED "AN ACT TO PROVIDE CERTAIN EMPLOYMENT BENEFITS FOR
EMPLOYEES OF THE FEDERAL GOVERNMENT, AND FOR OTHER PURPOSES"), IS
PRIMARILY A PROGRAM FOR THE IMPROVEMENT OF GOVERNMENTAL FUNCTIONS. "THE
PRIMARY OBJECTIVE OF THE INCENTIVE AWARDS PROGRAM IS THE IMPROVEMENT OF
GOVERNMENT OPERATIONS." HOUSE COMMITTEE ON POST OFFICE AND CIVIL
SERVICE, REPORT COVERING THE EFFECTIVENESS OF IMPLEMENTATION OF THE
GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT, H.REPT. NO. 885, 90TH CONG.,
1ST SESS. 2 (1967). "THE INCENTIVE AWARDS PROGRAM IN THE FEDERAL
GOVERNMENT IS DESIGNED TO PROVIDE EMPLOYEES OR GROUPS OF EMPLOYEES WITH
MONETARY OR HONORARY AWARDS FOR SUGGESTIONS, SPECIAL ACTS OR SERVICES,
OR WORK PERFORMANCES WHICH FURTHER ECONOMIES IN, OR IMPROVE,
GOVERNMENTAL OPERATIONS." SENATE COMMITTEE ON POST OFFICE AND CIVIL
SERVICE, INCENTIVE AWARDS PROGRAM IN THE FEDERAL GOVERNMENT, S. REPT.
NO. 2101, 82D CONG., 2D SESS. 1 (1952).
HISTORICALLY, AND WHILE CURRENTLY BROADENED AS TO SCOPE OF COVERAGE,
THE STATUTORY INCENTIVE AWARD PROGRAM IS ESSENTIALLY A PROGRAM WITHIN
THE EXECUTIVE BRANCH OF THE GOVERNMENT. BUT AS THE TERM "AGENCY" IS
DEFINED IN 5 U.S.C. 4501 FOR THE PURPOSE OF THE STATUTORY PROGRAM TO
INCLUDE THE ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS, ALONG
WITH SEVERAL ENUMERATED LEGISLATIVE BRANCH AGENCIES, THE SUGGESTION IS
MADE THAT THE CONGRESS BY THE INCLUSION OF THE ADMINISTRATIVE OFFICE OF
THE UNITED STATES COURTS, WHICH IS THE DISBURSAL AGENCY FOR THE FEDERAL
JUDICIARY, MEANT TO INCLUDE THE ENTIRE JUDICIAL BRANCH WITHIN THE
PROGRAM.
THE ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS WAS CREATED AS
A DISTINCT ENTITY, WITH ASSIGNED FUNCTIONS, BY AN ACT OF AUGUST 7, 1939,
53 STAT. 1223, 28 U.S.C. 601. WE FIND NO SUBSTANTIVE BASIS IN THE
HISTORY OR THE LANGUAGE OF THE INCENTIVE AWARDS ACT TO WARRANT THE
CONCLUSION THAT THE ENTIRE FEDERAL JUDICIAL BRANCH WAS BROUGHT WITHIN
THE PURVIEW OF THE PROGRAM BY THE INCLUSION OF THE ADMINISTRATIVE OFFICE
OF THE UNITED STATES COURTS. NOR CAN WE CONCLUDE THAT AN INFERENCE TO
THAT EFFECT IS WARRANTED BECAUSE OF THE DISBURSING OR ADMINISTRATIVE
FUNCTIONS OF THE ADMINISTRATIVE OFFICE. ON THE CONTRARY, THE FACT THAT
ITS EMPLOYEES UNLIKE OTHER JUDICIAL BRANCH EMPLOYEES ARE SUBJECT TO THE
CIVIL SERVICE LAWS (28 U.S.C. 602) AND THEIR COMPENSATION IS FIXED IN
ACCORDANCE WITH THE CLASSIFICATION ACT OF 1949 (28 U.S.C. 603), NEGATES
SUCH AN INFERENCE.
OF THE JUDICIAL BRANCH OF GOVERNMENT ONLY THE ADMINISTRATIVE OFFICE
IS WITHIN THE PURVIEW OF THE INCENTIVE AWARDS ACT. BUT THAT FACT IS NOT
OF ITSELF DETERMINATIVE OF THE QUESTION OF THE GRANTING OF INCENTIVE
AWARDS HEREIN. IT APPEARS THE EXEMPLARY JOB PERFORMED BY THE CHIEF
CLERK AND HER ASSISTANT IN REORGANIZING REFEREES' OFFICES ALL OVER THE
COUNTRY AND PUERTO RICO WAS PERFORMED WHILE ON SPECIAL ASSIGNMENTS ON
BEHALF OF THE ADMINISTRATIVE OFFICE. A MEMORANDUM OF THE CHIEF OF THE
BANKRUPTCY DIVISION, ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS,
STATES:
"ON THE AVERAGE OF APPROXIMATELY ONCE A YEAR FOR THE PAST TEN YEARS,
ONE OR BOTH OF THE SUBJECT EMPLOYEES HAVE WILLINGLY ACCEPTED SPECIAL
ASSIGNMENTS OUTSIDE THEIR HEADQUARTERS AT LOUISVILLE, KENTUCKY, AND, IN
EACH INSTANCE, THEY HAVE PERFORMED AN IMPORTANT, SPECIAL AND UNIQUE
SERVICE FOR THE BANKRUPTCY DIVISION WHICH WE ARE NOT EQUIPPED AND DO NOT
HAVE THE TIME TO PERFORM. *** "
AS STATUTORY FUNCTIONS OF THE ADMINISTRATIVE OFFICE WERE INVOLVED IN
THE EMPLOYEES' ACHIEVEMENT (28 U.S.C. 604) AND THEIR TEMPORARY
ASSIGNMENTS TO REFEREES' OFFICES ALL OVER THE COUNTRY AND PUERTO RICO
WERE WITH THE AUTHORIZATION OF THE ADMINISTRATIVE OFFICE WHOSE STATUTORY
FUNCTIONS WERE ADVANCED THEREBY, WE PERCEIVE NO IMPEDIMENT TO
CONSIDERING THE CHIEF CLERK AND HER ASSISTANT WHILE ON THE TEMPORARY
ASSIGNMENTS TO HAVE BEEN EMPLOYEES OF THE ADMINISTRATIVE OFFICE FOR THE
PURPOSES OF THE INCENTIVE AWARDS PROGRAM. CF. 33 COMP. GEN. 577 (1954).
THE AWARD SHOULD, OF COURSE, BE IN CONFORMITY WITH THE PRINCIPLES AND
STANDARDS ESTABLISHED BY THE CIVIL SERVICE COMMISSION; AND THE FUNDS
AVAILABLE FOR THE PURPOSE ARE THOSE APPROPRIATED TO THE ADMINISTRATIVE
OFFICE FOR THE GENERAL ADMINISTRATIVE EXPENSES OF THE BANKRUPTCY SYSTEM
(5 U.S.C. 4502(D)).
A COPY OF THIS DECISION IS BEING FORWARDED TO THE CHAIRMAN OF THE
CIVIL SERVICE COMMISSION.
B-171064, FEB 2, 1971
BACK PAY - GRADE PROMOTION
DECISION DENYING CLAIM BY DARRELL D. DUNN FOR BACK PAY INCIDENT TO
HIS PROMOTION BY THE FEDERAL AVIATION ADMINISTRATION FROM GS-9, STEP 5,
TO GS-11, STEP 1.
ALTHOUGH CLAIMANT "VACATED" HIS GS-9 POSITION ON JUNE 30, 1968, BY
TAKING ON DUTIES OF A GRADE GS-11 BUT WAS NOT PROMOTED TO GS-11 UNTIL
JULY 14, 1968, A PROMOTION MAY NOT BE MADE RETROACTIVELY EFFECTIVE SO AS
TO INCREASE THE RIGHT OF AN EMPLOYEE TO COMPENSATION; AND FEDERAL
GOVERNMENT EMPLOYEES ARE ENTITLED ONLY TO THE SALARIES OF THE POSITIONS
TO WHICH THEY ARE APPOINTED REGARDLESS OF THE DUTIES THEY ACTUALLY
PERFORM.
TO MR. DARRELL D. DUNN:
REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 8, 1970, CONCERNING YOUR
CLAIM FOR BACK PAY BASED ON AN ALLEGED ADMINISTRATIVE ERROR IN REGARD TO
YOUR PROMOTION BY THE FEDERAL AVIATION ADMINISTRATION (FAA) FROM GS-9,
STEP 5, TO GS-11, STEP 1.
IN SUMMARY THE MATERIAL FACTS SET FORTH IN YOUR LETTER SHOW THAT IN
NOVEMBER 1967 ACTION WAS INITIATED BY THE AIRWAY FACILITIES SECTOR CHIEF
TO EFFECT A PROMOTION FOR YOU FROM GS-9TO GS-11 WITH A PROPOSED
EFFECTIVE DATE OF JANUARY 15, 1968. THE POSITION WAS ADVERTISED AND
BECAUSE OF THIS AND OTHER ADMINISTRATIVE CONSIDERATIONS ACTION WAS
DELAYED. YOU SUBSEQUENTLY RECEIVED TRAINING IN PREPARATION FOR THE NEW
DUTIES YOU WERE TO UNDERTAKE, SOME OF WHICH YOU WERE ASSIGNED TO PERFORM
IN MAY 1968. ON JUNE 30, 1968, YOU RECEIVED A QUALITY INCREASE AWARD
FROM GS-9, STEP 4, TO GS-9, STEP 5. ON JULY 14, 1968, YOU RECEIVED A
COPY OF FAA FORM 50 STATING THAT YOU WERE SELECTED TO FILL THE GS-11
POSITION AT PENSACOLA WITH THE EFFECTIVE DATE OF JULY 14, 1968. THIS
WAS ALSO THE EFFECTIVE DATE OF THE ADJUSTMENT OF PAY RATES PURSUANT TO
PUBLIC LAW 90-206, APPROVED DECEMBER 16, 1967, 81 STAT. 613. YOU WERE
PLACED IN GRADE GS-11, STEP 1.
YOUR FIRST CONTENTION IS THAT FAA DELAYED ACTION ON YOUR PROMOTION TO
GS-11 UNTIL JULY 14, 1968, WHEN IT SHOULD HAVE BEEN EFFECTIVE ON JUNE
30, THE DATE ON WHICH YOUR "VACATED" GS-9 POSITION WAS FILLED, AS BOTH
YOU AND THE PERSON WHO BID FOR YOUR FORMER GS-9 POSITION SUBMITTED BID
SHEETS ON THE SAME DATE. YOU CONTEND THAT YOUR FORMER GS-9 POSITION
SHOULD NOT HAVE BEEN FILLED ON JUNE 30, PRIOR TO YOUR VACATING IT ON
JULY 14. YOU FURTHER CONTEND THAT THE DELAY IN PROCESSING YOUR
PROMOTION HAD THE "APPEARANCE AND EFFECT" OF DELAY FOR THE PURPOSE OF
AVOIDING TWO BENEFITS (QUALITY WITHIN GRADE INCREASE AND GRADE
PROMOTION) FROM BECOMING EFFECTIVE ON THE SAME DATE.
ACCORDING TO A LETTER DATED DECEMBER 2, 1970, ADDRESSED TO YOU FROM
THE CHIEF, PERSONNEL AND TRAINING DIVISION OF THE SOUTHERN REGION OF
FAA, THE 2-WEEK DELAY IN EFFECTING YOUR APPOINTMENT WAS DUE TO THE TIME
NECESSARY TO PROCESS SUCH MATTERS THROUGH THE PERSONNEL DIVISION. THE
FACT THAT THE GS-9 POSITION WAS FILLED BEFORE YOU WERE PROMOTED FROM
YOUR FORMER GS-9 TO GS-11 WAS VIEWED AS OF NO SIGNIFICANCE DUE TO THE
SHORTNESS OF THE TIME PERIOD INVOLVED (2 WEEKS) AND THE FACT THAT
TECHNICALLY THE GS-9 POSITION FILLED ON JUNE 30 WAS A DIFFERENT POSITION
FROM THE ONE VACATED BY YOU ON JULY 14.
OUR OFFICE HAS CONSISTENTLY HELD THAT A PERSONNEL ACTION MAY NOT BE
MADE RETROACTIVELY EFFECTIVE SO AS TO INCREASE THE RIGHT OF AN EMPLOYEE
TO COMPENSATION. SEE 40 COMP. GEN. 207 (1960). OUR POSITION IS IN
ACCORD WITH THAT OF THE COURT OF CLAIMS WHICH HAS HELD THAT FEDERAL
GOVERNMENT EMPLOYEES ARE ENTITLED ONLY TO THE SALARIES OF THE POSITIONS
TO WHICH THEY ARE APPOINTED REGARDLESS OF THE DUTIES THEY ACTUALLY
PERFORM. SEE COLEMAN V UNITED STATES, 100 CT. CL. 41 (1943); AMUNDSON
V UNITED STATES, 128 ID. 80 (1954).
IN THE INSTANT CASE YOU WERE SERVING UNDER AN APPOINTMENT TO A GRADE
GS-9 POSITION DURING THE PERIOD IN QUESTION. THE FACT THAT YOU WERE
PERFORMING THE DUTIES OF A GRADE GS-11 POSITION AND THAT YOUR PROMOTION
TO SUCH POSITION WAS DELAYED BECAUSE OF THE CIRCUMSTANCES CITED ABOVE
AFFORDS NO LEGAL BASIS FOR A COMPENSATION ADJUSTMENT.
YOUR SECOND CONTENTION IS THAT AN ADMINISTRATIVE ERROR WAS COMMITTED
IN REGARD TO YOUR ASSIGNMENT TO STEP 1 RATHER THAN STEP 2 WHEN YOU WERE
PROMOTED TO GRADE GS-11. YOU CONTEND THAT SINCE YOUR PROMOTION BECAME
EFFECTIVE ON JULY 14, 1968, THE SAME DATE UPON WHICH THE UPWARD
ADJUSTMENT OF FEDERAL PAY RATES PURSUANT TO PUBLIC LAW 90-206, APPROVED
DECEMBER 16, 1967, 81 STAT. 613, BECAME EFFECTIVE, YOUR PROMOTION SHOULD
HAVE BEEN PROCESSED AS BEING EFFECTIVE BEFORE THE STATUTORY INCREASE,
THEREBY ENTITLING YOU TO A GS-11, STEP 2. THE FAA INSTEAD UTILIZED THE
RULING CONTAINED IN 40 COMP. GEN. 184 (1960) WHICH PROVIDES THAT A
PROMOTION EFFECTIVE ON THE SAME DATE OF THE STATUTORY INCREASE MUST BE
BASED ON THE INCREASED SALARY RATE, THEREBY ENTITLING YOU TO A GS-11,
STEP 1.
THE MATTER OF THE APPLICABILITY OF 40 COMP. GEN. 184 TO THE SALARY
ADJUSTMENT SPECIFIED IN EXECUTIVE ORDER NO. 11413, JUNE 11, 1968,
PROMULGATED PURSUANT TO SECTION 212 OF PUBLIC LAW 90-206, 81 STAT. 634,
HAS BEEN THOROUGHLY TREATED BY THIS OFFICE IN LETTER B-171064, NOVEMBER
9, 1970, AND A LETTER DATED AUGUST 4, 1970, BOTH ADDRESSED TO YOU. AS
YOU HAVE ASSERTED NO NEW FACTUAL MATERIAL PERTAINING TO THIS ISSUE, WE
HAVE NO CHOICE BUT TO REASSERT OUR PREVIOUS POSITION THAT THE RULING
CONTAINED IN 40 COMP. GEN. 184 WAS CORRECTLY APPLIED IN YOUR CASE AND
YOU WERE CORRECTLY ASSIGNED TO GS-11, STEP 1.
FOR THE REASONS STATED WE DO NOT FIND ANY AUTHORITY UNDER WHICH TO
GRANT YOUR CLAIM FOR BACK PAY.
B-171074, FEB 2, 1971
BID PROTEST - DEFECTIVE SPECIFICATIONS
DENIAL OF PROTEST BY CGS/LAWRENCE, LOW BIDDER, AGAINST AWARD OF A
CONTRACT FOR AN ELECTRO-HYDRAULIC PRESSURIZATION SYSTEM, WITH
INSTALLATION AT THE NAVAL SHIP RESEARCH AND DEVELOPMENT LABORATORY, TO
MTS SYSTEMS CORP., SECOND LOW BIDDER.
AS THE PROCUREMENT WAS NEGOTIATED BY MEANS OF A REQUEST FOR
QUOTATION, DESIGNED FOR FLEXIBLE AND INFORMAL PROCEDURES, IT IS NOT
NECESSARY TO CONCLUDE THAT THE NAVY'S SPECIFICATIONS WERE DEFECTIVE DUE
TO THEIR FAILURE TO INCLUDE A FINITE LIMITATION ON OVERALL SIZE OF THE
SYSTEM. FURTHER, THE SOLICITATION DID STATE THAT SIZE WOULD BE AN
EVALUATION FACTOR AND THE WEAKNESS OF PROTESTANT'S PROPOSAL ON THE SIZE
FACTOR WAS COMMUNICATED TO THEM AND PROTESTANT WAS AFFORDED THE
OPPORTUNITY TO SUBMIT A REVISED PROPOSAL OFFERING A SMALLER UNIT; UNDER
SUCH CIRCUMSTANCES PROTESTANT WAS NOT SO PREJUDICED AS TO REQUIRE OR
JUSTIFY A RESOLICITATION AND THE PROTEST IS DENIED.
TO CGS/LAWRENCE:
REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 15, 1970, PROTESTING
THE AWARD OF REQUISITION N62462-70-01403, PURSUANT TO REQUEST FOR
QUOTATIONS (RFQ) N66314-70-Q-5003, TO MTS SYSTEMS CORP., OR ANY BIDDER
OTHER THAN YOUR COMPANY ON THE BASIS THAT REJECTION OF YOUR PUMP UNIT
DUE TO ITS LARGER RELATIVE SIZE WAS UNJUSTIFIED SINCE NO SIZE LIMITATION
HAD BEEN STIPULATED BY THE RFQ.
THE REQUISITION CALLED FOR PROCUREMENT OF AN ELECTRO-HYDRAULIC
PRESSURIZATION SYSTEM, WITH INSTALLATION AT THE NAVAL SHIP RESEARCH AND
DEVELOPMENT LABORATORY, ANNAPOLIS, MARYLAND, BY DECEMBER 30, 1970, AT A
TOTAL ESTIMATED COST OF $27,500. THE RFQ WAS ISSUED JUNE 17, 1970,
RESULTING IN THE SOLICITATION OF 40 FIRMS AND THE RECEIPT OF TWO
QUOTATIONS BY THE CLOSING DATE, AUGUST 3, 1970:
OFFEROR TOTAL DISCOUNT
CGS/LAWRENCE $30,620.00 ____
MTS SYSTEMS CORP. 38,000.00 6% - 10 DAYS
THE RFQ SPECIFICATIONS, SECTION 2.5, STIPULATED AT LINE B THAT
"OVERALL DIMENSIONS OF SUB ASSEMBLIES" WAS TO BE ONE OF THE FACTORS UPON
WHICH AN EVALUATION WOULD BE MADE OF THE MERITS OF THE RESPECTIVE
TECHNICAL PROPOSALS, ALTHOUGH NO MAXIMUM SIZE WAS ACTUALLY SPECIFIED.
ON AUGUST 11, 1970, THE TWO QUOTATIONS WERE TRANSMITTED TO THE
REQUISITIONING ACTIVITY FOR EVALUATION. ON SEPTEMBER 23, 1970, THE
NAVAL SHIP RESEARCH AND DEVELOPMENT LABORATORY AT ANNAPOLIS EXPRESSED
ITS PREFERENCE FOR MTS SYSTEMS' POWER SUPPLY DUE TO ITS SMALLER OVERALL
DIMENSIONS (39-1/2" X 52" X 67-1/2") AS COMPARED WITH CGS/LAWRENCE'S
UNIT (48" X 60" X 78"), SINCE SPACE REQUIREMENTS WERE LIMITED AT THE
LABORATORY SITE.
ON OCTOBER 2, 1970, FURTHER DISCUSSIONS WERE CONDUCTED WITH BOTH
OFFERORS. AT THAT TIME YOUR SALES MANAGER WAS APPRISED THAT A SMALLER
UNIT WAS DESIRABLE IN VIEW OF THE LIMITATIONS ON SPACE AT THE ANNAPOLIS
LABORATORY. HE WAS NOT TOLD THAT YOUR OFFER WAS UNACCEPTABLE IN ITS
ORIGINAL STATE. HE WAS ASKED IF CGS/LAWRENCE COULD SUPPLY A UNIT
APPROXIMATELY 8" SMALLER IN OVERALL DIMENSIONS AND WAS EXTENDED THE
OPPORTUNITY TO SUBMIT A REVISED PROPOSAL. HE RESPONDED THAT WHILE
CGS/LAWRENCE DID NOT MANUFACTURE A UNIT OF SUCH DIMENSIONS, ANOTHER UNIT
WAS SUSCEPTIBLE TO MODIFICATION TO MEET THIS PREFERRED SPECIFICATION BUT
THE COST OF SUCH ADAPTATION WOULD ENTAIL AN INCREASE IN CGS/LAWRENCE'S
PRICE PROPOSAL OF A MINIMUM OF $2,300.00. BY TELEGRAM OF OCTOBER 2 YOU
OFFERED A PRICE REDUCTION OF $1,600.00 FROM YOUR QUOTED PRICE, EFFECTIVE
FOR THAT DAY ONLY.
ON THE BASIS OF THESE NEGOTIATIONS, AWARD WAS MADE TO MTS SYSTEMS IN
THE SUM OF $31,000.00 BUT THE CONTRACTING OFFICER HAS REFRAINED FROM
ENTERING HIS SIGNATURE ON THE CONTRACT PENDING RESOLUTION OF YOUR
PROTEST.
ATTENTION IS DIRECTED TO THE FACT THAT THIS PROCUREMENT WAS
NEGOTIATED BY MEANS OF A REQUEST FOR QUOTATION ISSUED PURSUANT TO ARMED
SERVICES PROCUREMENT REGULATION (ASPR) 3-211. NEGOTIATION PROCEDURES,
UNLIKE THOSE REQUIRED FOR FORMAL ADVERTISING, ARE DESIGNED TO BE
FLEXIBLE AND INFORMAL. THESE PROCEDURES PROPERLY PERMIT THE CONTRACTING
OFFICER TO DO THINGS IN THE AWARDING OF A NEGOTIATED CONTRACT THAT WOULD
NOT BE PERMITTED IF THE PROCUREMENT WAS BEING ACCOMPLISHED BY FORMAL
ADVERTISING. SEE 47 COMP. GEN. 279, 284 (1967).
WHILE YOUR CONTENTION THAT THE SPECIFICATIONS WERE DEFECTIVE DUE TO
NAVY'S FAILURE TO INCLUDE A FINITE LIMITATION ON OVERALL SIZE MIGHT HAVE
MERIT HAD THIS BEEN A PROCUREMENT PURSUANT TO FORMAL ADVERTISING, THE
SAME CONCLUSION DOES NOT NECESSARILY FOLLOW IN A NEGOTIATED PROCUREMENT.
THE VERY ESSENCE OF A NEGOTIATED PROCUREMENT IS THE INHERENT FLEXIBILITY
ACCORDED THE GOVERNMENT TO OBTAIN THAT CONTRACT MOST ADVANTAGEOUS TO IT
ON THE BASIS OF AN OPTIMAL MIX OF SEVERAL OF THE EVALUATION FACTORS
ENUMERATED IN THE SOLICITATION.
IN THE PRESENT CASE, NO SPECIFIC SIZE LIMITATIONS WERE STATED, NOR
COULD ANY BE STATED, SINCE THERE WERE NO SPECIFIC LIMITATIONS ON SIZE.
THE ONLY CRITERION FOR SIZE WAS, AS STATED IN THE SOLICITATION, THAT IT
WOULD BE AN EVALUATION FACTOR.
ASPR 3-805, PROMULGATED PURSUANT TO 10 U.S.C. 2304(G), ESTABLISHES
THE PROCEDURES WITH WHICH THE ARMED SERVICES MUST COMPLY UPON THE
RECEIPT OF INITIAL PROPOSALS UNDER NEGOTIATED PROCUREMENTS:
"3.805.1 GENERAL
"(A) AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS
SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS
WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS (INCLUDING TECHNICAL
QUALITY WHERE TECHNICAL PROPOSALS ARE REQUESTED) CONSIDERED ...
"(B) ... 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 ... "
IT IS A WELL ESTABLISHED PRINCIPLE IN FEDERAL PROCUREMENTS THAT SUCH
DISCUSSIONS MUST BE MEANINGFUL AND FURNISH INFORMATION TO ALL OFFERORS
WITHIN THE COMPETITIVE RANGE AS TO THE AREAS IN WHICH THEIR PROPOSALS
ARE DEFICIENT SO THAT COMPETITIVE OFFERORS ARE GIVEN AN OPPORTUNITY TO
FULLY SATISFY THE GOVERNMENT'S REQUIREMENTS. 47 COMP. GEN. 336 (1967).
WHERE NEGOTIATIONS ARE CONDUCTED THE FACT THAT INITIAL PROPOSALS MAY BE
RATED AS ACCEPTABLE DOES NOT INVALIDATE THE NECESSITY FOR DISCUSSIONS OF
THEIR WEAKNESS, EXCESSES, OR DEFICIENCIES IN ORDER THAT THE CONTRACTING
OFFICER MAY OBTAIN THAT CONTRACT WHICH IS MOST ADVANTAGEOUS TO THE
GOVERNMENT. WE HAVE STATED THAT DISCUSSIONS OF THIS NATURE SHOULD BE
CONDUCTED WHENEVER IT IS ESSENTIAL TO ENABLE AN OFFEROR TO UPGRADE HIS
PROPOSAL. 47 COMP. GEN. 29 (1967).
IN WEIGHING THE ACTIONS OF THE NAVY AGAINST THE STANDARDS SET OUT
ABOVE, THE RECORD INDICATES THAT THE NAVY FULLY COMPLIED WITH THESE
REQUIREMENTS. FOLLOWING RECEIPT OF THE INITIAL PROPOSALS, FURTHER
DISCUSSIONS WERE CONDUCTED WITH EACH OF THE OFFERORS, THE WEAKNESS OF
YOUR PROPOSAL ON THE SIZE FACTOR WAS COMMUNICATED TO YOU, AND YOU WERE
EXTENDED THE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL.
PROCURING ACTIVITIES ARE ENCOURAGED TO STATE THEIR SPECIFICATIONS IN
NEGOTIATED PROCUREMENTS WITH AS MUCH PARTICULARITY AS FEASIBLE UNDER THE
CIRCUMSTANCES. HOWEVER, IN THIS CASE THE REQUISITIONING ACTIVITY HAS
ADVISED THAT IT HAS A NUMBER OF FATIGUE TEST MACHINES OF DIFFERENT TYPES
WHICH ARE USED TO TEST MATERIALS TO THE FAILURE POINT. THESE MACHINES
ARE CROWDED TOGETHER IN A LIMITED SPACE AND ARE LAID OUT IN SUCH A
MANNER THAT THE ELECTRO-HYDRAULIC PRESSURIZATION SYSTEM USED TO POWER
THEM MUST BE OF THE SMALLEST SIZE AVAILABLE. IN VIEW THEREOF, AND,
SINCE YOU WERE EXTENDED THE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL
OFFERING A SMALLER UNIT, AND YOU FAILED TO DO SO, WE ARE UNABLE TO
CONCLUDE THAT YOU WERE SO PREJUDICED BY THE ABSENCE OF A FINITE
LIMITATION ON SIZE IN THE RFQ AS TO REQUIRE OR JUSTIFY A RESOLICITATION.
ACCORDINGLY, YOUR PROTEST MUST BE DENIED.
B-171272, FEB 2, 1971
ARMY PERSONNEL - EMERGENCY MEDICAL SERVICE
DECISION HOLDING THAT CLAIM IN THE AMOUNT OF $300.08 IN FAVOR OF THE
FUJIYOSHIDA POLICE STATION YAMANASHI-PREF, JAPAN FOR RESCUE SERVICES
RENDERED TO TWO U.S. ARMY OFFICERS IS PROPER FOR PAYMENT.
ARMY REGULATION 40-3 SECTION 1, PARAGRAPH 2 PROVIDES THAT "MEDICAL
CARE INCLUDES, BUT IS NOT LIMITED TO, THE FURNISHING OF HOSPITALIZATION,
SUBSISTENCE, TRANSPORTATION ... " PRIOR AUTHORIZATION NOT BEING REQUIRED
IN AN EMERGENCY SITUATION. SINCE THE RESCUE SERVICES WERE INCIDENT TO
GETTING THE INJURED OFFICERS TO CIVILIAN MEDICAL FACILITIES, IT CAN BE
CONSIDERED EMERGENCY MEDICAL CARE AND PAYMENT FOR SUCH SERVICES IS
PROPER.
TO MAJOR R. G. FRIEDMAN:
YOUR LETTER DATED AUGUST 13, 1970, REFERENCE USARJ CO-FA, REQUESTING
AN ADVANCE DECISION AS TO THE PROPRIETY OF PAYMENT OF A VOUCHER IN THE
AMOUNT OF $300.08 IN FAVOR OF THE FUJIYOSHIDA POLICE STATION,
YAMANASHI-PREF, JAPAN, FOR RESCUE SERVICES RENDERED TO TWO UNITED STATES
ARMY OFFICERS INJURED AND STRANDED ON MT. FUJI DURING AN UNSUCCESSFUL
CLIMBING EXPEDITION ON NOVEMBER 16, 1969, WAS FORWARDED HERE FROM THE
FINANCE CENTER, U.S. ARMY, INDIANAPOLIS, INDIANA, BY LETTER DATED
NOVEMBER 5, 1970.
THE VOUCHER WAS APPROVED FOR PAYMENT BY THE UNITED STATES ARMY
MEDICAL COMMAND, JAPAN, AND BY THE OFFICE OF THE SURGEON GENERAL,
DEPARTMENT OF THE ARMY, THE FORMER CONSIDERING THAT AMBULANCE SERVICES
ARE REIMBURSABLE UNDER SECTION VIII OF AR 40-3, AND THE LATTER HOLDING
THE VIEWPOINT THAT TRANSPORTATION IS INCLUDED WITHIN THE MEANING OF
"MEDICAL CARE" COSTS FOR WHICH PAYMENT IS AUTHORIZED UNDER AR 40-3,
PARAGRAPH 2K.
YOU STATE THAT YOU CANNOT CONCUR IN THE DETERMINATIONS OF THESE TWO
OFFICES, SINCE IN YOUR VIEW THE CLAIMANT DOES NOT QUALIFY AS AN
"AMBULANCE COMPANY," WITHIN THE NORMAL DEFINITION AND THAT ALPINE RESCUE
DOES NOT NORMALLY COME WITHIN THE PURVIEW OF AMBULANCE SERVICE.
AR 40-3, SECTION 1, PARAGRAPH 2. DEFINITIONS, PROVIDES IN PERTINENT
PART, AS FOLLOWS:
"K. MEDICAL CARE. MEDICAL CARE INCLUDES, BUT IS NOT LIMITED TO, THE
FURNISHING OF HOSPITALIZATION, *** SUBSISTENCE, TRANSPORTATION *** ."
AR 40-3, SECTION VIII, MEDICAL CARE FROM CIVILIAN SOURCES, PARAGRAPH
88, MANNER IN WHICH CARE IS PROVIDED, PROVIDES, IN PART:
"(2) WITHOUT PRIOR AUTHORIZATION BY DESIGNATED APPROVING AUTHORITY.
INDIVIDUALS MAY OBTAIN CIVILIAN MEDICAL CARE WITHOUT PRIOR AUTHORIZATION
OF THE DESIGNATED APPROVING AUTHORITY WHEN ANY OF THE FOLLOWING
CIRCUMSTANCES EXIST:
"(A) IN EMERGENCIES WHEN THE URGENCY OF THE SITUATION DOES NOT PERMIT
THE OBTAINING OF SUCH PRIOR AUTHORIZATION."
PARAGRAPH 92, PREPARATION AND PAYMENT OF VOUCHERS, PROVIDES, IN PART,
AS FOLLOWS:
"E. CHARGES FOR SERVICES BY CIVILIAN PHYSICIANS, HOSPITALS OR
CLINICS, SPECIAL NURSES, *** AND AMBULANCE COMPANIES *** WILL BE
PRESENTED FOR PAYMENT ON DA FORM 8-9 (PUBLIC VOUCHER FOR MEDICAL
SERVICES) *** . THE ORIGINAL DA FORM 8-9 AND THREE COPIES WILL BE
FORWARDED TO THE APPROVING AUTHORITY. VOUCHERS MARKED 'COPY,'
'DUPLICATE' OR 'CORRECTED COPY' WILL NOT BE ACCEPTABLE. *** "
PARAGRAPH 92 OF AR 40-3 (AS THE TITLE AND CONTENT SUGGEST) PRESCRIBES
THE PROCEDURE TO BE FOLLOWED IN THE PREPARATION AND PAYMENT OF VOUCHERS
FOR CIVILIAN MEDICAL CARE. UNDER THE PROVISIONS OF PARAGRAPH 92E.
(1)(D) 14. ("DESCRIPTION OF OTHER SERVICES RECEIVED WHICH ARE NOT
SPECIFIED HEREIN."), AND 92E. (2) (RELATING TO "ANY UNUSUAL CHARGES OR
ANY CIVILIAN MEDICAL CARE FURNISHED UNDER UNUSUAL CIRCUMSTANCES *** ")
VOUCHERS MAY BE PREPARED SHOWING SERVICES OTHER THAN THOSE EXPRESSLY
LISTED. UNDER THE PROVISIONS OF PARAGRAPH 2 K OF AR 40-3, QUOTED ABOVE,
MEDICAL CARE INCLUDES BUT IS NOT LIMITED TO THE FURNISHING OF
HOSPITALIZATION, TRANSPORTATION TO A MEDICAL FACILITY, AND VARIOUS OTHER
MEDICAL RELATED SERVICES. THE EXPRESS MENTION OF A LACK OF LIMITATION
IN THE DEFINITION OF "MEDICAL CARE" HAS SIGNIFICANCE.
THE RESCUE SERVICES WERE NECESSARILY INCIDENT TO GETTING THE INJURED
OFFICERS TO CIVILIAN MEDICAL FACILITIES IN AN EMERGENCY SITUATION AND
MAY BE CONSIDERED AS EMERGENCY MEDICAL CARE.
ACCORDINGLY, THE VOUCHER AND SUPPORTING PAPERS ARE RETURNED, PAYMENT
THEREON BEING AUTHORIZED, IF OTHERWISE PROPER, ON THE BASIS SET FORTH
ABOVE.
B-171304, FEB 2, 1971
CLAIM FOR DEDUCTION
DECISION HOLDING THAT A CLAIM FOR DEDUCTIONS MADE FROM A CONTRACT
BETWEEN ROYAL SERVICES, INC., AND THE DEPARTMENT OF THE ARMY NOW BEFORE
THE ARMED SERVICES BOARD OF CONTRACT APPEALS, IS NOT PROPERLY FOR ACTION
BY GAO AT THIS TIME.
TO MILLAR & FALLIN:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 12 AND OUR
RESPONSE THERETO DATED DECEMBER 9, 1970, CONCERNING THE CLAIM YOU MADE
ON BEHALF OF ROYAL SERVICES, INC., FOR DEDUCTIONS MADE FROM CONTRACT NO.
DABC09-69-D-C529 YOUR CLIENT HELD WITH THE DEPARTMENT OF THE ARMY FOR
CUSTODIAL SERVICES AT FORT BENNING, GEORGIA.
THE DEPARTMENT OF THE ARMY HAS ADVISED OUR OFFICE THAT BY LETTER
DATED NOVEMBER 16, 1970, THE CONTRACTING OFFICER ISSUED HIS FINAL
DECISION UNDER THE DISPUTES CLAUSE OF THE REFERENCED CONTRACT, AND THAT
YOUR OFFICE ON NOVEMBER 20 APPEALED FROM THE FINAL DECISION OF THE
CONTRACTING OFFICER TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS
(ASBCA). SINCE IT APPEARS THAT THE MATTER IS PRESENTLY BEFORE THE
ASBCA, THIS OFFICE WOULD NOT BE WARRANTED IN EXPRESSING AN OPINION ON
THE MERITS OF THE CLAIM AT THIS TIME.
IN THE CIRCUMSTANCES NO FURTHER ACTION BY OUR OFFICE IS CONTEMPLATED,
AND WE ARE CLOSING OUR FILE IN THE MATTER.
B-171325, FEB 2, 1971
LIABILITY FOR REPAYMENT FOR ANNUAL LEAVE
DECISION HOLDING THAT GAO FINDS NO BASIS FOR WAIVING THE LIABILITY OF
FRANK J. HAUGHEY FOR REPAYMENT OF ANNUAL LEAVE INCIDENT TO REEMPLOYMENT
WITH THE DEPARTMENT OF STATE.
SINCE CLAIMANT RETIRED EFFECTIVE AUGUST 31, 1968, AND RECEIVED A
LUMP-SUM PAYMENT FOR 997 HOURS ACCRUED ANNUAL LEAVE FOR THE PROJECTED
LEAVE PERIOD ENDING MARCH 3, 1969, AND CLAIMANT WAS REEMPLOYED ON
JANUARY 21, 1969, PRIOR TO EXPIRATION OF THE PERIOD COVERED BY THE
ACCRUED ANNUAL LEAVE PAYMENT, LIABILITY IS IMPOSED BY 5 U.S.C. 6306(A)
WHICH DOES NOT PERMIT ANY EXCEPTIONS. FURTHER, THE LUMP-SUM PAYMENT MAY
NOT BE CONSIDERED AS AN ERRONEOUS PAYMENT BECAUSE IT WAS LEGAL WHEN
MADE.
TO MR. FRANK J. HAUGHEY:
WE REFER FURTHER TO YOUR LETTER OF NOVEMBER 5, 1970, WHICH, IN
EFFECT, SEEKS RECONSIDERATION OF OUR CLAIMS DIVISION LETTER OF JUNE 2,
1970, DENYING WAIVER OF YOUR LIABILITY FOR REPAYMENT FOR ANNUAL LEAVE
INCIDENT TO YOUR REEMPLOYMENT WITH THE DEPARTMENT OF STATE ON JANUARY
21, 1969.
AS SET FORTH IN OUR LETTER OF JUNE 2, THE RECORD INDICATES YOU
RETIRED VOLUNTARILY FROM THE FOREIGN SERVICE EFFECTIVE AUGUST 31, 1968,
AT AN ANNUAL SALARY OF $17,289. AT THE TIME OF YOUR RETIREMENT YOU WERE
PAID A LUMP-SUM PAYMENT FOR 997 HOURS ACCRUED ANNUAL LEAVE PLUS SIX
8-HOUR HOLIDAYS WHICH OCCURRED DURING THE PROJECTED LEAVE PERIOD ENDING
AFTER 5 HOURS ON MARCH 3, 1969. ON JANUARY 21, 1969, YOU WERE
REEMPLOYED WITH THE PASSPORT OFFICE, DEPARTMENT OF STATE, UNDER A
TEMPORARY APPOINTMENT (NTE 1 YEAR) AT AN ANNUAL SALARY OF $5,732. DUE
TO YOUR REEMPLOYMENT PRIOR TO EXPIRATION OF THE PERIOD COVERED BY THE
ACCRUED ANNUAL LEAVE PAYMENT, YOU WERE REQUESTED TO REFUND $1,969.47,
REPRESENTING COMPENSATION FOR 237 HOURS OF THE LUMP-SUM PAYMENT FOR THE
PERIOD JANUARY 21 THROUGH 5 HOURS ON MARCH 3, 1969. YOU WERE ADVISED
THAT A RECREDIT OF 229 HOURS ANNUAL LEAVE WILL BE MADE TO YOUR LEAVE
RECORD UPON FULL REPAYMENT. THE RECORD INDICATES THAT NO REPAYMENT HAS
BEEN MADE.
YOUR LIABILITY IN THIS MATTER IS IMPOSED BY STATUTE. 5 U.S.C.
6306(A) PROVIDES:
"WHEN AN INDIVIDUAL WHO RECEIVED A LUMP-SUM PAYMENT FOR LEAVE UNDER
SECTION 5551 OF THIS TITLE IS REEMPLOYED BEFORE THE END OF THE PERIOD
COVERED BY THE LUMP-SUM PAYMENT IN OR UNDER THE GOVERNMENT OF THE UNITED
STATES OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, EXCEPT IN A
POSITION EXCEPTED FROM THIS SUBCHAPTER BY SECTION 6301(2)(II), (III),
(VI), OR (VII) OF THIS TITLE, HE SHALL REFUND TO THE EMPLOYING AGENCY AN
AMOUNT EQUAL TO THE PAY COVERING THE PERIOD BETWEEN THE DATE OF
REEMPLOYMENT AND THE EXPIRATION OF THE LUMP-SUM PERIOD."
WHILE NO DOUBT YOU WOULD NOT HAVE ACCEPTED THE APPOINTMENT IN THE
PASSPORT OFFICE HAD YOU BEEN AWARE OF THE REFUND REQUIREMENT FOR THE
UNEXPIRED PORTION OF YOUR ANNUAL LEAVE, NEVERTHELESS, WE POINT OUT THAT
THE ABOVE STATUTORY PROVISIONS DO NOT PERMIT ANY EXCEPTIONS.
FURTHER, WE POINT OUT THAT THE AMOUNT IN QUESTION MAY NOT BE REGARDED
AS AN ERRONEOUS PAYMENT UNDER 5 U.S.C. 5584 WHICH PROVIDES FOR THE
WAIVER OF ERRONEOUS PAYMENTS OF PAY AND FOR REFUND OF ANY AMOUNT SO
WAIVED. THIS IS SO BECAUSE THE LUMP-SUM PAYMENT FOR LEAVE IN YOUR CASE
WAS LEGAL WHEN MADE AND THEREFORE MAY NOT BE CONSIDERED NOW AS AN
ERRONEOUS PAYMENT WITHIN THE MEANING OF THE STATUTORY PROVISIONS FOR
WAIVER. ACCORDINGLY, WE HAVE NO BASIS FOR WAIVING YOUR LIABILITY FOR
REPAYMENT OF THE INDEBTEDNESS.
B-171328, FEB 2, 1971
TRANSFERS - SHORTEST USUALLY TRAVELED ROUTE
REAFFIRMING PRIOR DECISION DISALLOWING CLAIM OF MEMBER OF THE AIR
FORCE FOR THE DIFFERENCE IN MILEAGE FROM QUONSET POINT, R.I., AND FROM
NORTON AFB, CALIF., TO HILL AFB, UTAH, RELATING TO TRAVEL PERFORMED
PURSUANT TO PERMANENT CHANGE OF STATION FROM DA NANG AIR BASE, RVN, TO
HILL AFB, UTAH.
ACCEPTING THE FACTS AS PRESENTED BY THE ADMINISTRATIVE OFFICE, ABSENT
SUFFICIENTLY CONVINCING CONTRARY EVIDENCE, TRANSPORTATION WOULD HAVE
BEEN FURNISHED TO MEMBER TO NORTON AFB EXCEPT FOR HIS LATE REPORTING.
SINCE MEMBER WAS NEITHER REQUIRED NOR DIRECTED TO TRAVEL BY A CIRCUITOUS
ROUTE AND SINCE HE COULD HAVE LOADED OFF AT SEATTLE UPON ARRIVAL THERE
RATHER THAN CONTINUING ON TO THE EAST COAST, THERE IS NO AUTHORITY TO
ALLOW MILEAGE IN EXCESS OF DISTANCE OF DIRECT ROUTE.
TO CAPTAIN THOMAS S. WEBB:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 6, 1970,
REQUESTING RECONSIDERATION OF THE SETTLEMENT BY OUR CLAIMS DIVISION,
DATED NOVEMBER 3, 1970, WHICH DISALLOWED YOUR CLAIM FOR THE DIFFERENCE
IN MILEAGE FROM QUONSET POINT, RHODE ISLAND, AND FROM NORTON AIR FORCE
BASE, CALIFORNIA, TO HILL AIR FORCE BASE, UTAH.
BY SPECIAL ORDER NO. AC-7593, HEADQUARTERS 366 CSG (PACAF), APO SAN
FRANCISCO, 96337, DATED OCTOBER 27, 1969, YOU WERE ASSIGNED ON PERMANENT
CHANGE OF STATION TO 2791 USAF HOSPITAL (AFSC), HILL AIR FORCE BASE,
UTAH, WITH EFFECTIVE DATE OF TRANSFER SHOWN AS NOVEMBER 10, 1969. YOU
WERE DIRECTED TO REPORT TO YOUR NEW ASSIGNMENT NO LATER THAN 32 DAYS
AFTER ARRIVAL AT AERIAL PORT OF EMBARKATION, WITH TWO DAYS' TRAVEL TIME
AUTHORIZED. NO SPECIAL MODE OF TRANSPORTATION WAS DIRECTED.
YOUR ITINERARY SHOWS THAT YOU SIGNED OUT AT DA NANG AIR BASE,
REPUBLIC OF VIET NAM, ON NOVEMBER 3, 1969, AND DEPARTED THEREFROM ON
NOVEMBER 4, ARRIVING THE NEXT DAY AT QUONSET POINT, RHODE ISLAND.
THEREAFTER, YOU WERE IN A LEAVE STATUS UNTIL YOU REPORTED AT YOUR NEW
DUTY STATION AT HILL AIR FORCE BASE, UTAH, ON DECEMBER 12, 1969.
YOU WERE PAID $141 FOR TRAVEL PERFORMED FROM QUONSET POINT, RHODE
ISLAND, TO HILL AIR FORCE BASE, UTAH. LATER AN ADJUSTMENT WAS MADE TO
ALLOW MILEAGE FOR THE DISTANCE FROM NORTON AIR FORCE BASE, SPECIFIED
AERIAL PORT OF DEBARKATION, TO HILL AIR FORCE BASE, IN THE AMOUNT OF
$41.64.
THE ADMINISTRATIVE REPORT FROM DA NANG AIR BASE TRANSMITTED BY THE
AIR FORCE ACCOUNTING AND FINANCE CENTER, DENVER, COLORADO, STATES THAT
YOU FAILED TO APPEAR FOR YOUR SCHEDULED FLIGHT PRIOR TO THE MANIFEST
CLOSE OUT AT 1530 HOURS. IT IS FURTHER REPORTED THAT WHEN YOU FINALLY
REPORTED FOR YOUR SCHEDULED FLIGHT FROM DA NANG TO NORTON AIR FORCE BASE
ON NOVEMBER 3, 1969, YOU WERE ADVISED THAT NO MORE SEATS WERE AVAILABLE
AND THAT THE NEXT AVAILABLE FLIGHT WAS TO YOKOTA, JAPAN, THE FOLLOWING
DAY ON WHICH FLIGHT YOU WERE SCHEDULED. IT APPEARS THAT AFTER ARRIVAL
AT YOKOTA, YOU OBTAINED A SEABEES FLIGHT SCHEDULED FOR ENTRY INTO THE
UNITED STATES VIA SEATTLE, WASHINGTON, TO PROVIDENCE, RHODE ISLAND.
THE ADMINISTRATIVE REPORT INDICATES FURTHER THAT YOU WERE NOT LISTED
ON THE STANDBY REGISTER AT YOKOTA AIR BASE FOR FLIGHT TO TRAVIS AIR
FORCE BASE, CALIFORNIA, THE DESIGNATED PORT OF ENTRY FOR MEMBERS BEING
TRANSFERRED FROM JAPAN, ALTHOUGH A FLIGHT WAS AVAILABLE TO THOSE ON THAT
REGISTER ON A MISSION THAT DEPARTED ONE HOUR EARLIER THAT DAY THAN THE
ONE WHICH YOU TOOK TO THE EAST COAST. ALSO, ANOTHER FLIGHT TO THAT PORT
WAS SCHEDULED TO DEPART THE NEXT DAY. THERE APPEARS TO BE SOME QUESTION
IN THE REPORT AS TO WHY YOU SELECTED THE EAST COAST MISSION WHEN AIRLIFT
TO TRAVIS AIR FORCE BASE WAS AVAILABLE WITHIN THE SPECIFIED TIME FOR
PERMANENT CHANGE-OF-STATION PASSENGERS. IT APPEARS TO HAVE BEEN THE
ADMINISTRATIVE OPINION THAT YOU MAY HAVE CHOSEN THAT FLIGHT TO ARRIVE
NEARER TO YOUR DELAY ENROUTE ADDRESS IN GEORGIA. IT WAS STATED FURTHER
THAT IF YOU HAD NO DESIRE TO CONTINUE YOUR TRAVEL WHEN THE PLANE REACHED
SEATTLE, WASHINGTON, YOU COULD HAVE OFF LOADED AT THAT TIME.
IN A LETTER PRESENTING YOUR CLAIM FOR REFUND OF THE AMOUNT COLLECTED
AS EXCESS MILEAGE PAID YOU, YOU SAY THAT YOU REPORTED ON TIME AT THE
PORT FACILITIES AT DA NANG, BUT DUE TO A LONG WAIT FOR BOARDING YOU WERE
ADVISED TO RETURN LATER. HOWEVER, WHEN YOU RETURNED, YOU SAY YOU WERE
TOLD THAT NO SPACE WAS AVAILABLE BECAUSE OF HIGHER PRIORITIES OF
PERSONNEL RETURNING ON EMERGENCY LEAVE. YOU RELATE THAT YOU WERE UNABLE
TO BOARD TWO CARGO FLIGHTS LEAVING LATER BECAUSE OF THE SAME CONDITIONS
AND THAT THE FOLLOWING DAY, YOU OBTAINED THE ONLY AVAILABLE
TRANSPORTATION WHICH WAS TO YOKOTA, JAPAN.
UPON ARRIVAL AT YOKOTA, YOU STATE THAT YOU DISCUSSED YOUR SITUATION
WITH THE AERIAL PORT PERSONNEL AND WERE PLACED ON A SEABEES FLIGHT
SCHEDULED FOR QUONSET POINT, RHODE ISLAND. THE PLANE MADE A BRIEF STOP
AT SEATTLE INTERNATIONAL AIRPORT FOR A CUSTOMS CHECK FOR SEVERAL
PASSENGERS BEFORE CONTINUING NONSTOP TO QUONSET POINT. YOU THEREFORE
CONTENDED THAT YOU WERE PLACED ON THE FLIGHTS YOU USED WITHOUT ANY
REQUEST ON YOUR PART AND SHOULD BE PAID MILEAGE FOR THE DISTANCE FROM
QUONSET POINT, INSTEAD OF FROM NORTON AIR FORCE BASE, CALIFORNIA.
BY SETTLEMENT DATED NOVEMBER 3, 1970, YOUR CLAIM WAS DISALLOWED FOR
THE REASONS STATED. IN YOUR LETTER DATED NOVEMBER 6, 1970, YOU REQUEST
RECONSIDERATION OF YOUR CLAIM CONTENDING THAT YOU DID NOT REQUEST
PASSAGE TO QUONSET POINT BUT WERE PLACED ON THAT FLIGHT. YOU STATE THAT
SINCE YOU HAD PURCHASED AIRLINE TICKETS FROM LOS ANGELES, CALIFORNIA, TO
SAVANNAH, GEORGIA, IT CAN HARDLY BE CLAIMED THAT YOU BOARDED THE FLIGHT
TO THE EAST COAST FOR PERSONAL BENEFIT.
PARAGRAPH M4159-1, JOINT TRAVEL REGULATIONS, PROMULGATED PURSUANT TO
THE PROVISIONS OF SECTION 404 OF TITLE 37, UNITED STATES CODE, PROVIDES
IN PERTINENT PART THAT A MEMBER TRAVELING UNDER PERMANENT
CHANGE-OF-STATION ORDERS TO, FROM, OR BETWEEN POINTS OUTSIDE THE UNITED
STATES, WHICH ORDERS DO NOT SPECIFY GROUP TRAVEL OR DIRECT TRAVEL BY A
SPECIFIC MODE OF TRANSPORTATION, WILL BE ENTITLED TO APPLICABLE
ALLOWANCES FOR THE OFFICIAL DISTANCE BETWEEN THE OLD PERMANENT STATION
AND THE APPROPRIATE AERIAL PORT OF EMBARKATION SERVING THE OLD DUTY
STATION; TRANSPORTATION BY GOVERNMENT AIRCRAFT, IF AVAILABLE, FOR THE
TRANSOCEANIC TRAVEL INVOLVED, PLUS PER DIEM IF APPLICABLE, AND THE
APPLICABLE ALLOWANCES FOR THE OFFICIAL DISTANCE BETWEEN THE APPROPRIATE
AERIAL PORT OF DEBARKATION SERVING THE NEW STATION AND THE NEW PERMANENT
STATION.
THE NORMAL ROUTING OF MILITARY PERSONNEL TO AND FROM OVERSEAS IS
CONTAINED IN ATTACHMENT 36 TO AIR FORCE MANUAL 75-4. PARAGRAPH 1B
THEREOF, PROVIDES IN PERTINENT PART, THAT THE ROUTES AND MODES OF TRAVEL
PRESCRIBED THEREIN WILL BE USED BY ALL MILITARY PERSONNEL WHEN TRAVELING
IN CONNECTION WITH A PERMANENT CHANGE OF STATION. ANY DEVIATION FROM
THESE ROUTES, WITH CERTAIN EXCEPTIONS NOT PERTINENT, WILL BE CONSIDERED
AS CIRCUITOUS ROUTING WHICH IS NOT AUTHORIZED AT GOVERNMENT EXPENSE
EXCEPT WHEN AUTHORIZED IN ADVANCE UNDER CONDITIONS OUTLINED IN PARAGRAPH
3308 OF THAT REGULATION (WHICH IS NOT APPLICABLE HERE). THE NORMAL
ROUTING AND MODE OF TRAVEL SHOWN IN ATTACHMENT 36 FOR TRAVEL TO AND FROM
DA NANG, REPUBLIC OF VIET NAM, IS BY MILITARY AIRLIFT COMMAND THROUGH
NORTON AIR FORCE BASE, CALIFORNIA.
UNDER THE PROVISIONS OF 37 U.S.C. 404 AND THE JOINT TRAVEL
REGULATIONS PROMULGATED THEREUNDER, THE GOVERNMENT'S OBLIGATION UPON
PERMANENT CHANGE OF STATION IS LIMITED TO FURNISHING TRANSPORTATION TO A
MILITARY MEMBER FROM HIS OLD TO THE NEW DUTY STATION VIA THE DIRECT OR
SHORTEST USUALLY TRAVELED ROUTE, OR TO REIMBURSEMENT THEREFOR COMPUTED
ON THAT BASIS. WHEN TRAVEL IS PERFORMED BY A ROUTE OTHER THAN THE DIRECT
ROUTE, A MEMBER IS ENTITLED TO SUCH TRAVEL AT GOVERNMENT EXPENSE ONLY TO
THE EXTENT THAT IT DOES NOT EXCEED THE COSTS THAT WOULD HAVE BEEN
NECESSARILY INCURRED FOR TRAVEL BY THE DIRECT ROUTE TO HIS NEW DUTY
STATION. 47 COMP. GEN. 440 (1968); B-166200, DATED MARCH 20, 1969,
COPY ENCLOSED.
IN INSTANCES IN WHICH THERE IS A CONFLICT BETWEEN THE FACTS REPORTED
BY THE ADMINISTRATIVE OFFICE AND THOSE STATED BY A CLAIMANT, IT HAS LONG
BEEN THE ESTABLISHED RULE OF THIS OFFICE TO RELY ON THE REPORT OF THE
FACTS SUBMITTED BY THE ADMINISTRATIVE OFFICE, IN THE ABSENCE OF EVIDENCE
SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS
OF THE REPORT. 16 COMP. GEN. 325 (1936); 19 ID. 88 (1939), AND 38 ID.
527 (1959).
IN THE CIRCUMSTANCES PRESENTED, WE MUST ACCEPT THE FACTS AS PRESENTED
BY THE ADMINISTRATIVE OFFICE TO THE EFFECT THAT TRANSPORTATION WOULD
HAVE BEEN FURNISHED TO NORTON AIR FORCE BASE EXCEPT FOR YOUR LATE
REPORTING AND THAT WHEN YOU REPORTED AT THE YOKOTA AIR BASE, JAPAN,
FLIGHTS WERE READILY AVAILABLE TO TRAVIS AIR FORCE BASE, CALIFORNIA.
FURTHERMORE, SINCE YOU WERE NEITHER REQUIRED NOR OFFICIALLY DIRECTED TO
TRAVEL BY A CIRCUITOUS ROUTE TO YOUR OFFICIAL DESTINATION AND SINCE IT
IS REPORTED THAT YOU COULD HAVE OFF LOADED AT SEATTLE, WASHINGTON, UPON
ARRIVAL THERE RATHER THAN CONTINUING ON THE FLIGHT TO THE EAST COAST,
THERE WOULD BE NO AUTHORITY TO ALLOW YOU MILEAGE IN EXCESS OF THE
DISTANCE FROM SEATTLE TO HILL AIR FORCE BASE EVEN IF IT WERE ESTABLISHED
THAT NO FLIGHTS WERE AVAILABLE FOR YOUR TRAVEL FROM OVERSEAS TO NORTON
AIR FORCE BASE OR TO TRAVIS AIR FORCE BASE.
ACCORDINGLY, ON THE RECORD BEFORE US THE SETTLEMENT DATED NOVEMBER 3,
1970, WAS CORRECT AND IS SUSTAINED.
B-171363, FEB 2, 1971
TRANSFERS - INCIDENTAL EXPENSES - REFUND
ALLOWING PAYMENT OF REAL ESTATE EXPENSES ARISING FROM THE PURCHASE OF
A HOME AT FORT HOOD, TEXAS, INCIDENT TO A CHANGE OF DUTY STATION EVEN
THOUGH A $1300 REFUND ALLOWED THE PURCHASER EXCEEDS THE EXPENSES
CLAIMED.
A DISCOUNT GIVEN AS THE RESULT OF SECURING A CONVENTIONAL LOAN RATHER
THAN AN FHA LOAN RESULTED IN SAVING OF BROKERAGE WHICH THE SELLER PASSED
ON TO THE BUYER DOES NOT REPRESENT A REFUND OF CLOSING EXPENSES, AND,
THEREFORE, THE BUYER MAY BE REIMBURSED.
TO LIEUTENANT COLONEL ROY E. WRATISLAW:
WE REFER FURTHER TO YOUR MEMORANDUM OF AUGUST 10, 1970, REFERENCE
AKPHO-CT-FI-P, REQUESTING A DECISION ON THE REIMBURSABILITY TO MR. JAMES
H. LYLE OF REAL ESTATE EXPENSES ARISING FROM THE PURCHASE OF A RESIDENCE
AT FORT HOOD, TEXAS, HIS NEW DUTY STATION, INCIDENT TO A PERMANENT
CHANGE OF DUTY DURING 1970.
YOU STATE THAT THE APPLICABLE CONTRACT OF SALE PROVIDES FOR A
PURCHASE PRICE OF $22,000 TO BE PAID BY A $15,800 CONVENTIONAL LOAN PLUS
$6,200 CASH. THE CONTRACT STATES,
"SELLER AGREES TO GIVE PURCHASER A DISCOUNT OF $1,300 *** TO BE
CREDITED TO DOWN PAYMENT, OR, IF PURCHASER DESIRES, IN CASH, IF DOWN
PAYMENT AND CLOSING COSTS HAVE BEEN PAID IN FULL."
YOU NOTE THAT NO DISTINCTION IS MADE AS TO SELLER'S AND BUYER'S
EXPENSES AND THAT THE $1,300 WHICH WAS REFUNDED EXCEEDS THE AMOUNT OF
$533.50 EXPENSES CLAIMED BY THE EMPLOYEE BUYER.
SINCE THE ABOVE ARRANGEMENT COULD BE VIEWED AS INCLUDING REPAYMENT BY
THE SELLER OF THE CLOSING EXPENSES YOU HAVE DOUBT WHETHER ANY
REIMBURSABLE EXPENSES HAVE IN FACT BEEN INCURRED BY THE BUYER AS
REQUIRED BY THE APPLICABLE REGULATIONS. YOU CITE OUR DECISION B-161910,
JULY 26, 1967, TO THE EFFECT THAT REIMBURSEMENT IS PRECLUDED WHERE
EXPENSES CLAIMED HAVE NOT BEEN PAID IN FACT.
THE EMPLOYEE SETS FORTH EXPENSES TOTALING $533.50 CONSISTING OF LOAN
ORIGINATION $316, RECORDINGS $9.50, MORTGAGEE'S TITLE POLICY $143,
APPRAISAL FEE $15, AND ATTORNEY FEE (EXAMINATION OF TITLE POLICY AND
PREPARATION NOTE AND DEED) $50.
ONE OF THE DOCUMENTS SUBMITTED - REAL ESTATE AGENT FLOYD D. ALLEN'S
STATEMENT OF JULY 10, 1970 - SHOWS THAT THE $1,300 DISCOUNT WAS GIVEN TO
MR. LYLE BECAUSE HE AGREED TO SECURE A CONVENTIONAL LOAN ON THE PROPERTY
RATHER THAN AN FHA LOAN. MR. ALLEN STATES THAT THE DISCOUNT REPRESENTS
THE SAVING OF BROKERAGE WHICH THE SELLER WOULD HAVE HAD TO PAY ON AN FHA
LOAN AND THE SAVINGS AS SUCH WERE PASSED ON TO MR. LYLE.
IN THE CIRCUMSTANCES WE DO NOT THINK A REFUND OF CLOSING EXPENSES
OCCURRED FROM THE SELLER TO THE BUYER. RATHER, HERE WE HAVE AN
ADJUSTMENT IN SELLING PRICE CONDITIONED TO THE FORM OF FINANCING
EMPLOYED BY THE BUYER AND THE EFFECT THEREOF ON THE SELLER.
WITH RESPECT TO REIMBURSEMENT, HOWEVER, THE ITEM OF $316 FOR LOAN
ORIGINATION FEE IS NO LONGER ALLOWABLE. SEE B-168674, FEBRUARY 10,
1970, COPY ENCLOSED.
THE VOUCHER WHICH IS RETURNED HEREWITH MAY BE PAID IN ACCORDANCE WITH
THE ABOVE IF OTHERWISE CORRECT.
B-171493, FEB 2, 1971
SALE OF RESIDENCE - LAND RELATED TO "RESIDENCE SITE"
DECISION CONCERNING PROPRIETY OF VOUCHERS SUBMITTED BY HALLECK A.
BUTTS FOR REIMBURSEMENT OF COSTS INCIDENT TO THE SALE OF HIS RESIDENCE
CONSISTING OF THREE PARCELS OF LAND AT HIS OLD DUTY STATION.
SECTION 4.1(F) BOB CIR. NO. A-56 STATES THAT "THE EMPLOYEE WILL ALSO
BE LIMITED TO PRO RATA REIMBURSEMENT WHEN HE SELLS OR PURCHASES LAND IN
EXCESS OF THAT WHICH REASONABLY RELATES TO THE RESIDENCE SITE." SINCE
CLAIMANT'S RESIDENCE OCCUPIES LOTS 16 AND 17 - HE IS ENTITLED TO
REIMBURSEMENT FOR EXPENSES INCURRED IN THE SALE OF THIS PARCEL ONLY AND
BECAUSE THE RECEIPTS FURNISHED SHOW THAT THE REMAINING REIMBURSABLE
EXPENSES WERE BASED ON THE SALE OF ALL THREE PARCELS AND CANNOT BE
SEPARATED CLAIMANT IS ENTITLED TO 72.27 PERCENT OF OTHERWISE
REIMBURSABLE EXPENSES INCIDENT TO THE SALE OF HIS THREE PARCELS OF LAND.
TO MR. JOHN C. MACKALL:
THIS REFERS TO YOUR LETTER OF DECEMBER 8, 1970, WITH ENCLOSURES,
REQUESTING AN ADVANCE DECISION WHETHER YOU MAY PROPERLY CERTIFY FOR
PAYMENT THE ENCLOSED VOUCHER OF MR. HALLECK A. BUTTS, DATED OCTOBER 12,
1970, TO REIMBURSE HIM PER DIEM AND TRANSPORTATION EXPENSES AS WELL AS
THE COSTS HE INCURRED IN THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL
STATION IN CONNECTION WITH HIS TRANSFER FROM MIAMI, FLORIDA, TO
CHARLOTTEE, NORTH CAROLINA, AS AN EMPLOYEE OF THE SMALL BUSINESS
ADMINISTRATION. MR. BUTTS, BY LETTER DATED DECEMBER 22, 1970, SUBMITTED
ADDITIONAL INFORMATION IN SUPPORT OF HIS VOUCHER.
YOU SAY YOU DO NOT QUESTION THE PER DIEM AND TRANSPORTATION EXPENSES
BUT YOU DO QUESTION THE PRORATION OF COSTS INVOLVED IN THE SALE OF THE
RESIDENCE. THE REAL PROPERTY SOLD CONSISTED OF FOUR LOTS NOS. 15, 16,
17 AND 18. THE PRINCIPAL RESIDENCE AND A GARAGE APARTMENT WERE LOCATED
ON THE TWO INNER LOTS NOS. 16 AND 17 WHICH SOLD AS ONE PARCEL FOR
$41,700. THE OUTER LOTS, NOS. 15 AND 18, WERE SOLD SEPARATELY FOR
$8,000 EACH. A GARAGE WITH APARTMENT ABOVE WAS LOCATED ON LOT NO. 18.
ALTHOUGH SEPARATE TRANSACTIONS WITH THREE DIFFERENT COUPLES WERE
INVOLVED, MR. BUTTS IS OF THE OPINION THAT THIS IS IMMATERIAL AND THAT
HE IS ENTITLED TO REIMBURSEMENT FOR 91.52 PERCENT OF THE TOTAL COSTS
INCURRED INCIDENT TO THE SALE OF THE PROPERTY. HE CONTENDS THAT HIS
RESIDENCE CONSISTED OF HIS HOUSE AND FOUR LOTS, ALL OF WHICH ARE WITHIN
A HEDGE BOUNDARY, THAT THIS CONSTITUTED ONE COMMON LAWN, AND WAS USED AS
SUCH BY HIS FAMILY. HE STATES "BY ANALOGY, IF AN EMPLOYEE HAPPENED TO
LIVE ON TWENTY ACRES NOT SUBDIVIDED AND NOT USED FOR COMMERCIAL PURPOSES
WOULD NOT THE WHOLE AREA BE CONSIDERED HIS RESIDENCE IF HE TREATED AND
USED IT AS HIS HOME?" ACCORDINGLY, HE BASES HIS CLAIM ON 91.52 PERCENT
OF THE TOTAL COSTS. THIS IS REACHED BY ATTRIBUTING $52,806.72 TO THE
SALE OF THE RESIDENCE AND LOTS AND $4,893.28 TO THE SALE OF THE TWO
GARAGE APARTMENTS.
SECTION 4.1 OF THE BUREAU OF THE BUDGET CIRCULAR NO. A-56, AS REVISED
JUNE 26, 1969, PROVIDES IN PERTINENT PART:
"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:
"F. 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. THE EMPLOYEE WILL ALSO BE LIMITED TO PRO RATA REIMBURSEMENT
WHEN HE SELLS OR PURCHASES LAND IN EXCESS OF THAT WHICH REASONABLY
RELATES TO THE RESIDENCE SITE."
THE UNDERLINED PART OF THE QUOTED REGULATIONS LIMITS REIMBURSEMENT TO
COSTS OF SALE OF LAND WHICH REASONABLY RELATES TO THE RESIDENCE SITE.
WHERE, IN CIRCUMSTANCES SUCH AS HERE INVOLVED, THE EMPLOYEE HAS DIVIDED
HIS PROPERTY INTO SEPARATE PARCELS FOR SALE PURPOSES, IT MUST BE
CONCLUDED THAT PARCELS OTHER THAN THAT UPON WHICH THE HOUSE IS LOCATED
DO NOT RELATE TO THE "RESIDENCE SITE" WITHIN THE GOVERNING REGULATIONS.
IN THIS CASE MR. BUTTS PAID $3,127.50 COMMISSION ON THE SALE OF HIS
RESIDENCE WHICH OCCUPIED LOTS 16 AND 17 FOR WHICH HE IS ENTITLED TO
REIMBURSEMENT. HOWEVER, HE WOULD NOT BE ENTITLED TO REIMBURSEMENT OF
ANY OF THE COMMISSION PAID FOR THE SALE OF LOTS 15 AND 18 SOLD IN
SEPARATE TRANSACTIONS. THE RECEIPTS FURNISHED SHOW THAT THE REMAINING
REIMBURSABLE EXPENSES WERE BASED ON THE SALE OF ALL THREE PARCELS OF
LAND AND CANNOT BE SEPARATED.
THEREFORE, MR. BUTTS WOULD BE ENTITLED TO 72.27 PERCENT
(41,700/57,700) OF OTHERWISE REIMBURSABLE EXPENSES INCIDENT TO THE SALE
OF HIS THREE PARCELS OF LAND.
THE VOUCHER IS RETURNED HEREWITH FOR HANDLING IN ACCORDANCE WITH THE
ABOVE.
B-171567, FEB 2, 1971
TRANSFERS - SHIPMENT OF HOUSEHOLD GOODS
AUTHORIZING PAYMENT OF A VOUCHER IN FAVOR OF AN EMPLOYEE OF THE
DEPARTMENT OF JUSTICE IN CONNECTION WITH MOVING HOUSEHOLD GOODS FROM
AURORA, ILLINOIS TO MONTCLAIR, NEW JERSEY, AT RATES EFFECTIVE MAY 13,
1970.
ALTHOUGH CLAIMANT'S HOUSEHOLD EFFECTS WERE PLACED IN STORAGE ON APRIL
14, 1970, BECAUSE HE COULD NOT FIND QUARTERS IN MONTCLAIR, N.J. UNTIL
JUNE, THE DATE THE SHIPMENT BEGAN IS TO BE CONSIDERED THE DATE THEY WERE
TURNED OVER TO THE CARRIER WITH AN ORDER TO DELIVER THEM TO THE ASSIGNED
DESTINATION. THEREFORE, THE RATES PROMULGATED ON MAY 13, 1970, ARE THE
RATES APPLICABLE TO THE SHIPMENT.
TO MR. L. V. AUTREY:
YOUR LETTER OF DECEMBER 15, 1970, WITH ENCLOSURES, REQUESTS AN
ADVANCE DECISION WHETHER A VOUCHER IN THE AMOUNT OF $156.35 IN FAVOR OF
MR. RICHARD T. KLEIN, AN EMPLOYEE OF YOUR AGENCY, MAY BE CERTIFIED FOR
PAYMENT.
MR. KLEIN, INCIDENT TO A TRANSFER OF STATION, CLAIMED $865.37 FOR
MOVING 6,060 POUNDS OF HOUSEHOLD GOODS FROM AURORA, ILLINOIS, TO
MONTCLAIR, NEW JERSEY, AT THE RATE OF $14.28 PER 100 POUNDS. YOU
ALLOWED $709.02 SINCE THE HOUSEHOLD EFFECTS WERE PLACED IN STORAGE APRIL
24, 1970, AND GENERAL SERVICES ADMINISTRATION BULLETIN FPMR NO. A-2,
SUPPLEMENT 21, OCTOBER 3, 1969, ATTACHMENT A, IN EFFECT AT THAT TIME,
SHOWED $11.70 AS THE COMMUTED RATE PER 100 POUNDS FOR SHIPMENT BETWEEN
THE POINTS INVOLVED.
MR. KLEIN STATES THAT HIS HOUSEHOLD EFFECTS WERE PLACED IN STORAGE ON
APRIL 24, 1970, BECAUSE HE COULD NOT FIND QUARTERS IN MONTCLAIR, NEW
JERSEY, UNTIL JUNE 1970, AT WHICH TIME HIS EFFECTS WERE MOVED. EFFECTIVE
MAY 15, 1970, GENERAL SERVICES ADMINISTRATION BULLETIN FPMR NO. A-2,
SUPPLEMENT 25, MAY 13, 1970, ATTACHMENT A, SHOWED $14.28 PER 100 POUNDS
AS THE APPLICABLE RATE FOR THE MOVEMENT OF HIS EFFECTS. HE RECLAIMS THE
AMOUNT OF $156.35 DISALLOWED BY YOU.
IT APPEARS THAT YOU CONSIDER THE SHIPMENT TO HAVE BEGUN ON APRIL 24,
1970, WHEN MR. KLEIN'S EFFECTS WERE MOVED FROM HIS RESIDENCE IN AURORA,
ILLINOIS, TO A WAREHOUSE FOR STORAGE. THE MERE MOVEMENT OF THE EFFECTS
FROM THE RESIDENCE TO A POINT OF LOCAL STORAGE IN THE SAME CITY MAY NOT
BE REGARDED AS THE BEGINNING OF SHIPMENT. WE HAVE HELD THAT SHIPMENT
BEGINS WHEN THE GOODS ACTUALLY ARE TURNED OVER TO THE CARRIER WITH AN
ORDER TO DELIVER THEM TO A DESIGNATED DESIGNATION. SEE 20 COMP. GEN.
568, 571; 29 COMP. GEN. 100. SINCE IT APPEARS FROM THE INFORMATION OF
RECORD HERE THAT THE ACTUAL TRANSPORTATION DID NOT BEGIN UNTIL JUNE
1970, THE COMMUTED RATE IN EFFECT AT THAT TIME WOULD BE THE PROPER RATE
TO USE TO REIMBURSE MR. KLEIN FOR SHIPMENT OF HIS EFFECTS.
ACCORDINGLY, THE VOUCHER RETURNED HEREWITH MAY BE CERTIFIED FOR
PAYMENT IF OTHERWISE CORRECT.
B-171575, FEB 2, 1971
CIVILIAN EMPLOYEES - TRAVEL EXPENSES - TEMPORARY DUTY ASSIGNMENTS
REAFFIRMING PRIOR DECISION DISALLOWING CLAIM FOR ADDITIONAL $22 FOR
TRAVEL EXPENSES INCIDENT TO A TEMPORARY DUTY ASSIGNMENT OF AN EMPLOYEE
OF THE BUREAU OF THE CENSUS, DEPARTMENT OF COMMERCE.
CLAIMANT WAS AUTHORIZED ROUND TRIP TRAVEL BETWEEN WASHINGTON, D.C.,
AND MADISON, WISCONSIN, NOT TO EXCEED THE COST OF AIRPLANE TRAVEL FROM
NATIONAL AIRPORT, WASHINGTON AND CANNOT CLAIM REIMBURSEMENT ON THE BASIS
OF COST OF FLYING FROM FRIENDSHIP AIRPORT, BALTIMORE; THE LEAST
EXPENSIVE ROUTE OF TRAVEL MUST BE THE BASIS FOR PAYMENT.
TO MR. PAUL A. KATZ:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 12, 1970,
REQUESTING RECONSIDERATION OF OUR SETTLEMENT DISALLOWING YOUR CLAIM FOR
ADDITIONAL REIMBURSEMENT OF $22 FOR TRAVEL EXPENSES INCIDENT TO A
TEMPORARY DUTY ASSIGNMENT DURING THE PERIOD NOVEMBER 11 TO 18, 1969, AS
AN EMPLOYEE OF THE BUREAU OF THE CENSUS, DEPARTMENT OF COMMERCE.
THE RECORD INDICATES THAT YOU WERE AUTHORIZED ROUND-TRIP TRAVEL BY
PRIVATELY OWNED AUTOMOBILE FOR YOUR CONVENIENCE BETWEEN WASHINGTON,
D.C., AND MADISON, WISCONSIN, NOT TO EXCEED COST AND TRAVEL TIME BY
COMMON CARRIER. YOU WERE REIMBURSED ON THE CONSTRUCTIVE COST BASIS OF
TRAVEL BY AIRPLANE FROM NATIONAL AIRPORT, WASHINGTON, D.C., TO MADISON.
YOU CLAIMED AN ADDITIONAL AMOUNT OF $22 ON THE BASIS THAT, IF YOU HAD
TRAVELED BY AIRPLANE, YOU WOULD HAVE TRAVELED FROM FRIENDSHIP AIRPORT,
BALTIMORE, MARYLAND. YOUR CLAIM WAS DISALLOWED BECAUSE YOU WERE PAID BY
THE LEAST EXPENSIVE AIR TRANSPORTATION AVAILABLE AT THE TIME OF YOUR
TRAVEL. YOU REQUEST RECONSIDERATION ON THE BASIS THAT YOU WERE ALLOWED
CONSTRUCTIVE TAXICAB FARES BETWEEN YOUR HOME AND FRIENDSHIP AIRPORT AND,
THEREFORE, SHOULD BE ALLOWED THE HIGHER ROUND-TRIP FARE BETWEEN THAT
AIRPORT AND MADISON IN EFFECT AT THE TIME OF YOUR TRAVEL.
SECTION 3.6E, STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, PROVIDES AS
FOLLOWS:
"E RATES.- WHEN TWO OR MORE COMMON CARRIERS FURNISHING THE SAME MODE
OF TRAVEL CHARGE DIFFERENT RATES BETWEEN THE SAME POINTS FOR THE SAME
TYPE OF ACCOMMODATIONS, THE FACILITIES OF THE CARRIER CHARGING THE LOWER
RATE SHOULD BE USED TO THE MAXIMUM EXTENT POSSIBLE UNLESS SUCH USE -
"(1) WOULD CONFLICT WITH SECTION 901 OF THE MERCHANT MARINE ACT OF
1936 (SEE SECTION 12.11), OR
"(2) WOULD BE INADVISABLE FOR SUCH REASONS AS THESE:
"(A) IT WOULD CAUSE INCREASES IN PER DIEM OR OTHER COSTS, WITH THE
RESULT THAT THE GOVERNMENT WOULD NOT GAIN BY USING THE LOWER-RATE
TRANSPORTATION.
"(B) THE ROUTING OF THE CARRIER CHARGING THE LOWER RATE WOULD NOT
MEET THE TRAVELER'S REQUIREMENTS TO MAKE OFFICIAL STOPS BETWEEN THE
POINTS INVOLVED.
"(C) ONLY THE USE OF THE CARRIER CHARGING THE HIGHER RATE WILL PERMIT
THE TRAVELER TO CARRY OUT HIS ASSIGNED MISSION ADEQUATELY, EFFICIENTLY,
AND WITHOUT UNDUE HARDSHIP OR INCONVENIENCE RESULTING FROM SUCH FACTORS
AS LONGER TOTAL TRAVEL TIME OR ADDITIONAL TRANSFERS BETWEEN TERMINALS,
TRAINS, BOATS, OR PLANES.
"NO FORMAL DETERMINATION OR DOCUMENTATION WITH RESPECT TO INDIVIDUAL
TRIPS WILL BE REQUIRED UNDER THIS SUBSECTION."
DURING THE TIME OF YOUR TRAVEL DIRECT FLIGHTS BETWEEN NATIONAL
AIRPORT AND MADISON WERE AVAILABLE WHEREAS THERE WERE ONLY CONNECTING
FLIGHTS FROM FRIENDSHIP AIRPORT. THE ROUND-TRIP COST OF THE DIRECT
FLIGHTS WAS $100 WHEREAS THE COST OF THE CONNECTING FLIGHTS WAS $120.
THIS HAS BEEN VERIFIED FROM OFFICIAL TARIFFS.
YOUR AGENCY STATES THAT CONSTRUCTIVE TAXICAB FARES FROM YOUR HOME TO
FRIENDSHIP AIRPORT WERE ALLOWED SINCE THEY WERE COMPARABLE TO THOSE FROM
YOUR HOME TO NATIONAL AIRPORT. EXAMINATION OF AIRPLANE SCHEDULES DURING
THE PERIOD IN QUESTION INDICATES THAT DIRECT FLIGHTS BETWEEN NATIONAL
AIRPORT AND MADISON WERE AVAILABLE DURING THE SAME QUARTER DAYS AS THE
CONNECTING FLIGHTS BETWEEN FRIENDSHIP AIRPORT AND MADISON, THAT
TRAVELING BY DIRECT FLIGHTS WOULD NOT HAVE UNDULY INTERFERED WITH YOUR
REST OR CAUSED YOU INCONVENIENCE, AND THAT THE DIRECT FLIGHTS WOULD HAVE
PERMITTED YOU TO CARRY OUT YOUR ASSIGNMENT IN AN EFFICIENT MANNER. IN
VIEW OF THE ABOVE AND SINCE YOUR ORDERS AUTHORIZED TRAVEL FROM AND TO
WASHINGTON, RATHER THAN FROM A SPECIFIED AIRPORT, THE DISALLOWANCE OF
YOUR CLAIM IS SUSTAINED.
WITH RESPECT TO YOUR QUESTION ABOUT FURTHER APPEAL OF YOUR CLAIM WE
POINT OUT THAT DECISIONS OF THIS OFFICE ARE BINDING UPON THE EXECUTIVE
BRANCH OF THE FEDERAL GOVERNMENT. AS TO MATTERS COGNIZABLE BY THE
UNITED STATES DISTRICT COURTS AND THE UNITED STATES COURT OF CLAIMS, SEE
28 U.S.C. 1346 AND 1491.
B-171135(1), FEB 1, 1971
BID PROTEST - BIDDER RESPONSIVENESS - USE OF GOVERNMENT OWNED PROPERTY
DENYING PROTEST OF AFM, INCORPORATED AGAINST THE AWARD OF AN
ADVERTISED CONTRACT FOR 85,905 MK 81 MOD 1 BOMB BODIES ISSUED BY NAVAL
SHIP PARTS CONTROL CENTER, MECHANICSBURG, PA., TO NORRIS INDUSTRIES,
INCORPORATED.
WITH RESPECT TO THE AUTHORIZATION FOR USE OF GOVERNMENT-OWNED
PRODUCTION PROPERTY HELD UNDER A FACILITIES CONTRACT, THE APPLICABLE
PROVISIONS OF THE INVITATION AND THE ASPR REQUIRE NO MORE THAN WRITTEN
PERMISSION FROM THE CONTRACTING OFFICER HAVING COGNIZANCE OF THE
FACILITIES AUTHORIZING ITS USE; THE SUBMISSION OF NORRIS, WITH ITS BID,
OF A LETTER ADDRESSED TO THE DEFENSE CONTRACT ADMINISTRATION REQUESTING
APPROVAL FOR USE OF GOVERNMENT-OWNED PROPERTY WHICH WAS APPROVED BY THE
ADMINISTRATIVE CONTRACTING OFFICER'S SIGNING HIS NAME TO THE SECOND PAGE
OF THE LETTER, SATISFIED THIS REQUIREMENT DEFEATING THE PROTESTANT'S
CONTENTION THAT THERE IS AN ADDITIONAL REQUIREMENT THAT THE CONTRACTING
OFFICER SUBMIT PROOF THAT HE IS THE CONTRACTING OFFICER HAVING
COGNIZANCE OF THE FACILITIES.
TO ROBERT SHERIFFS MOSS:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 10, 1970, AND
SUPPLEMENTAL CORRESPONDENCE, PROTESTING ON BEHALF OF AMF, INCORPORATED,
AGAINST AWARD OF A CONTRACT TO NORRIS INDUSTRIES, INCORPORATED, BY THE
NAVAL SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA, PURSUANT
TO SOLICITATION NO. N00104-71-B-0543.
THE SUBJECT SOLICITATION WAS ISSUED ON SEPTEMBER 22, 1970, FOR THE
PROCUREMENT OF 85,905 MK 81, MOD 1, BOMB BODIES. TEN BIDS WERE RECEIVED
AND OPENED ON OCTOBER 26, 1970. THE LOW EVALUATED BID WAS SUBMITTED BY
NORRIS INDUSTRIES. WE WERE NOTIFIED ON DECEMBER 23, 1970, PURSUANT TO
ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.8(B)(3)(III) THAT
AWARD WAS BEING MADE TO NORRIS INDUSTRIES PRIOR TO RESOLUTION OF THE
PROTEST AS NORRIS HAD REFUSED TO GRANT AN EXTENSION OF ITS BID
ACCEPTANCE PERIOD WHICH EXPIRED ON DECEMBER 23, 1970.
THE INVITATION INCLUDES THE FOLLOWING PROVISION, IN PERTINENT PART,
APPLICABLE TO YOUR PROTEST:
"EVALUATION FACTOR FOR USE OF GOVERNMENT-OWNED RESEARCH AND
PRODUCTION PROPERTY AND SPECIAL TOOLING.
"1. IF THE OFFEROR OR ITS ANTICIPATED SUBCONTRACTORS REQUIRE THE USE
OF GOVERNMENT-OWNED PRODUCTION AND RESEARCH PROPERTY AND/OR SPECIAL
TOOLING, AS DEFINED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR)
PARAGRAPH 13-101.9, IN ITS OR ITS SUBCONTRACTORS' POSSESSION, THE
OFFEROR SHALL NOT INCLUDE IN ITS OFFER PRICE ANY 'RENTAL FEE' OR 'USE
CHARGE' FOR USE OF SUCH PROPERTY. THE OFFEROR SHALL LIST AND IDENTIFY,
IN THE OFFER OR BY SEPARATE ATTACHMENT HERETO, A COMPLETE DESCRIPTION OF
EACH SUCH ITEM, IN ACCORDANCE WITH PARAGRAPH 2 BELOW. OFFERS WILL BE
EVALUATED BY ADDING TO THE TOTAL AMOUNT OF EACH ITEM REQUIRING USE OF
GOVERNMENT PRODUCTION AND RESEARCH PROPERTY, A 'RENTAL FEE' AS
CALCULATED BY THE CONTRACTING OFFICER IN ACCORDANCE WITH PARAGRAPH 3
BELOW.
"2. OFFEROR SHALL PROVIDE THE FOLLOWING DATA:
"(I) DESCRIPTION OF EACH ITEM OF GOVERNMENT PROPERTY AND QUANTITY
THEREOF REQUIRED.
"(II) ACQUISITION COST TO THE GOVERNMENT OF EACH SUCH ITEM;
"(III) THE FACILITIES CONTRACT OR OTHER INSTRUMENT UNDER WHICH THE
GOVERNMENT FACILITIES ARE HELD, TOGETHER WITH THE WRITTEN PERMISSION OF
THE CONTRACTING OFFICER HAVING COGNIZANCE THEREOF AUTHORIZING ITS USE;"
IN RESPONSE TO THIS REQUIREMENT, NORRIS SUBMITTED WITH ITS BID A
LETTER DATED OCTOBER 1, 1970, ADDRESSED TO THE DEFENSE CONTRACT
ADMINISTRATION SERVICES REGION, 11099 SOUTH LA CIENEGA BOULEVARD, LOS
ANGELES, CALIFORNIA 90045, TO THE ATTENTION OF MR. THEODORE E.
LIRINGIS, ACO, REQUESTING APPROVAL FOR USE OF GOVERNMENT-OWNED PROPERTY
HELD UNDER CONTRACTS NOS. DAAG07-70-C-0336 AND DAAG07-70-C-0250. R. B.
PATTERSON, DCAS ADMINISTRATIVE CONTRACTING OFFICER, APPROVED THE REQUEST
ON OCTOBER 2, 1970, BY SIGNING THE SECOND PAGE OF THE LETTER AS THE
"CONTRACTING OFFICER HAVING COGNIZANCE OF THE FACILITIES."
IT IS YOUR CONTENTION THAT THE ABOVE LETTER DID NOT CONSTITUTE
COMPLIANCE WITH THE FOREGOING GOVERNMENT-OWNED PROPERTY CLAUSE AND,
THEREFORE, NORRIS' BID SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE. YOU
CONTEND THAT PATTERSON'S SIGNATURE AS ADMINISTRATIVE CONTRACTING OFFICER
(ACO) WAS NOT SUFFICIENT IN ITSELF TO ESTABLISH THAT HE HAD AUTHORITY AS
THE "CONTRACTING OFFICER HAVING COGNIZANCE OF THE FACILITIES" TO GRANT
PERMISSION FOR USE OF THE FACILITIES. IN THIS CONNECTION, YOU POINT OUT
THAT UNDER ASPR 1-406(C)(XXIV) THE AUTHORITY OF AN ACO WITH RESPECT TO
APPROVING USE OF FACILITIES IS LIMITED TO NON-GOVERNMENT USE. THEREFORE,
YOU CONTEND THAT SINCE PATTERSON IDENTIFIED HIMSELF AS AN ACO THE
CONTRACTING OFFICER COULD NOT PROPERLY ASSUME THAT HE HAD AUTHORITY TO
GIVE PERMISSION FOR USE OF THE FACILITIES.
SUBSEQUENT TO YOUR RAISING THE ISSUE CONCERNING THE ACO'S AUTHORITY,
THE CONTRACTING OFFICER FURNISHED OUR OFFICE A SUPPLEMENTAL REPORT. HE
ADVISES THAT THE FACILITIES CONTRACTS REFERENCED IN NORRIS' LETTER
CONTAIN THE "USE AND CHARGES" CLAUSE PRESCRIBED IN ASPR 7-702.12, UNDER
WHICH THE CONTRACTOR MAY USE THE FACILITIES WITHOUT CHARGE IN THE
PERFORMANCE OF OTHER GOVERNMENT CONTRACTS WHICH AUTHORIZE SUCH USE.
FURTHER, HE ADVISES THAT IN BOTH CASES THE ASSIGNMENTS OF THE SUBJECT
CONTRACTS TO DCAS, LOS ANGELES, SPECIFICALLY INCLUDED AUTHORITY TO
APPROVE USE OF FACILITIES IN ADDITION TO THE NORMALLY ASSIGNED
FUNCTIONS. YOU WERE FURNISHED A COPY OF THIS REPORT.
ALTHOUGH SUCH AUTHORITY HAD BEEN SPECIFICALLY DELEGATED TO DCAS AS
PROVIDED IN ASPR 20-703.3, YOU ARGUE THAT THE EVIDENCE OF SUCH
DELEGATION WAS REQUIRED TO BE SUBMITTED WITH THE BID AND LETTER GRANTING
USE OF THE FACILITIES. OTHERWISE, IT IS YOUR CONTENTION THAT THE BID
WAS NONRESPONSIVE AS SUBMITTED AND SUBSEQUENT SUBMISSION OF SUCH
EVIDENCE MAY NOT PROPERLY BE CONSIDERED.
WITH RESPECT TO AUTHORIZATION FOR USE OF GOVERNMENT-OWNED PRODUCTION
AND RESEARCH PROPERTY HELD UNDER A FACILITIES CONTRACT, THE APPLICABLE
PROVISIONS OF THE INVITATION AND ASPR REQUIRE NO MORE THAN WRITTEN
PERMISSION FROM THE CONTRACTING OFFICER HAVING COGNIZANCE OF THE
FACILITIES AUTHORIZING ITS USE. WE SEE NO BASIS FOR READING INTO THESE
PROVISIONS THE ADDITIONAL REQUIREMENT THAT THE BIDDER OR THE COGNIZANT
CONTRACTING OFFICER SUBMIT PROOF THAT HE IS THE CONTRACTING OFFICER
HAVING COGNIZANCE OF THE FACILITIES. WHETHER THE CONTRACTING OFFICER,
BE HE A PCO OR ACO, HAS THE REQUISITE AUTHORITY IS A MATTER OVER WHICH
THE BIDDER HAS NO CONTROL AND IS AN ASCERTAINABLE FACT CAPABLE OF BEING
VERIFIED WITHIN THE GOVERNMENT.
IN SUPPORT OF YOUR POSITION, YOU HAVE CITED SEVERAL DECISIONS OF OUR
OFFICE WHICH WE BELIEVE ARE READILY DISTINGUISHABLE. IN B-165799,
FEBRUARY 27, 1969, NOT ONLY WAS THE LETTER APPROVING USE OF THE
FACILITIES NOT SUBMITTED WITH THE BID, IT WAS NOT EVEN SIGNED BY THE
COGNIZANT CONTRACTING OFFICER UNTIL AFTER BIDS WERE OPENED. THE CASE
REPORTED AT 45 COMP. GEN. 572 (1966), AND CITED BY YOU, IS ALSO
DISTINGUISHABLE FROM THE FACTS INVOLVED HERE, AS THE NONRESPONSIVE BID
WAS NOT ACCOMPANIED BY ANY WRITTEN AUTHORIZATION FOR USE OF THE
FACILITIES. B-154188, JUNE 26, 1964, AND B-154598, NOVEMBER 16, 1964,
ARE ALSO DISTINGUISHABLE FOR THE SAME REASON.
YOU ALSO CITE THE HOLDING IN 48 COMP. GEN. 369 (1968), AS BEING
APPLICABLE TO THE SITUATION HERE.
IN THAT CASE, WHERE A CORPORATION'S BID WAS SIGNED BY AN INDIVIDUAL
AS AGENT, WE SAID THAT TO PERMIT PROOF OF AN UNKNOWN AGENT'S AUTHORITY
AFTER BID OPENING WOULD GIVE A BIDDER AN OPTION TO ELECT TO ABIDE BY A
BID OR CLAIM THE BID WAS SUBMITTED IN ERROR BY A PERSON WITHOUT
AUTHORITY TO ENTER INTO CONTRACTS ON ITS BEHALF. YOU CONTEND THAT
NORRIS HAD THE SAME SORT OF OPTION HERE. HOWEVER, WE MUST POINT OUT
THAT THE RULE STATED IN 48 COMP. GEN. 369 HAS BEEN MODIFIED BY OUR
OFFICE. IN 49 COMP. GEN. 527, B-167297, MARCH 2, 1970, WE CONCLUDED
THAT PROOF OF AGENCY COULD PROPERLY BE SUBMITTED AFTER BID OPENING SINCE
IT WAS NOT LIKELY THAT PRINCIPALS WOULD BE IN A POSITION TO FALSELY
DISAVOW THEIR AGENT'S AUTHORITY IN ANY EVENT. WE THEREFORE DO NOT
REGARD 48 COMP. GEN. 369 AS A PERSUASIVE AUTHORITY. ALSO, IN THIS CASE
IT IS APPARENT THAT ASCERTAINMENT OF PATTERSON'S AUTHORITY IS A MATTER
OVER WHICH NORRIS HAS NO CONTROL.
ACCORDINGLY, THERE IS NO BASIS FOR OUR OFFICE TO DISTURB THE AWARD TO
NORRIS. FOR YOUR INFORMATION, ENCLOSED IS A COPY OF OUR LETTER OF TODAY
TO THE ATTORNEYS FOR INTERCONTINENTAL MANUFACTURING COMPANY,
INCORPORATED, DENYING ITS PROTEST AGAINST THE AWARD OF A CONTRACT TO
NORRIS.
B-171135(2), FEB 1, 1971
BID PROTEST - RESPONSIVENESS OF LOW BIDDER
DENIAL OF PROTEST BY INTERCONTINTAL MANUFACTURING COMPANY, INC.,
AGAINST CONTRACT FOR 85,905 BOMB BODIES ISSUED BY NAVAL SHIP PARTS
CONTROL CENTER, AND AWARDED TO NORRIS INDUSTRIES, INC.
A PROVISION OF THE INVITATION PROVIDING THAT BIDDERS SUBMIT WRITTEN
PERMISSION FOR THE USE OF GOVERNMENT-OWNED PROPERTY HAS BEEN COMPLIED
WITH BY NORRIS BY THE FACT THAT THEIR BID WAS ACCOMPAINED BY A LETTER
REQUESTING USE OF GOVERNMENT-OWNED PRODUCTION AND RESEARCH PROPERTY
WHICH WAS APPROVED. THEREFORE, THERE IS NO BASIS FOR PROTEST.
TO TECHNER, RUBIN, SHAPIRO, SILVERSTEIN & REMICK:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 5, 1970,
PROTESTING ON BEHALF OF INTERCONTINENTAL MANUFACTURING COMPANY,
INCORPORATED, AGAINST AWARD OF A CONTRACT TO NORRIS INDUSTRIES,
INCORPORATED, BY THE NAVAL SHIPS PARTS CONTROL CENTER, MECHANICSBURG,
PENNSYLVANIA, PURSUANT TO SOLICITATION NO. N00104-71-B-0543.
THE SUBJECT SOLICITATION WAS ISSUED ON SEPTEMBER 22, 1970, FOR THE
PROCUREMENT OF 85,905 MK 81, MOD 1, BOMB BODIES. TEN BIDS WERE RECEIVED
AND OPENED ON OCTOBER 26, 1970. THE LOW EVALUATED BID WAS SUBMITTED BY
NORRIS INDUSTRIES. WE WERE NOTIFIED ON DECEMBER 23, 1970, PURSUANT TO
ASPR 2-407.8(B)(3)(III) THAT AWARD WAS BEING MADE TO NORRIS PRIOR TO
RESOLUTION OF THE PROTEST AND PRIOR TO EXPIRATION OF ITS BID ON DECEMBER
25, 1970, AS NORRIS HAD REFUSED TO GRANT AN EXTENSION OF THE ACCEPTANCE
PERIOD.
IT IS YOUR CONTENTION THAT THE NORRIS BID SHOULD HAVE BEEN REJECTED
AS NONRESPONSIVE SINCE NORRIS INDICATED THAT IT WOULD REQUIRE THE USE OF
GOVERNMENT-OWNED PROPERTY BUT DID NOT SUBMIT WITH ITS BID WRITTEN
PERMISSION FOR THE USE OF SUCH PROPERTY AS REQUIRED BY THE PROVISIONS OF
THE INVITATION ENTITLED, "EVALUATION FACTOR FOR USE OF GOVERNMENT-OWNED
RESEARCH AND PRODUCTION PROPERTY AND SPECIAL TOOLING".
WE HAVE BEEN ADVISED BY THE CONTRACTING OFFICER THAT THE NORRIS BID
WAS ACCOMPANIED BY A LETTER DATED OCTOBER 1, 1970, COPY ENCLOSED,
ADDRESSED TO THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION, 11099
SOUTH LA CIENEGA BOULEVARD, LOS ANGELES, CALIFORNIA 90045, TO THE
ATTENTION OF MR. THEODORE E. LIRINGIS, ACO, REQUESTING APPROVAL FOR USE
OF GOVERNMENT-OWNED PRODUCTION AND RESEARCH PROPERTY UNDER CONTRACT NOS.
DAAG07-70-C-0336 AND DAAG07-70-C-0250 IN CONNECTION WITH THE SUBJECT
SOLICITATION. R. B. PATTERSON, DCAS ADMINISTRATIVE CONTRACTING OFFICER,
APPROVED THE REQUEST ON OCTOBER 2, 1970, BY SIGNING THE SECOND PAGE OF
NORRIS' LETTER AS THE "CONTRACTING OFFICER HAVING COGNIZANCE OF THE
FACILITIES".
IN VIEW THEREOF, THERE IS NO BASIS FOR OUR OFFICE TO SUSTAIN YOUR
PROTEST. FOR YOUR INFORMATION, ENCLOSED IS A COPY OF OUR LETTER OF
TODAY TO THE ATTORNEY FOR AMF, INCORPORATED, DENYING ITS PROTEST AGAINST
THE AWARD OF A CONTRACT TO NORRIS.
B-170849, JAN 29, 1971
BID PROTEST - PROPRIETY OF TREATMENT
DENIAL OF PROTEST BY CLARK'S AERIAL SERVICE, INC., AGAINST AWARD OF
CONTRACTS FOR AERIAL APPLICATION OF INSECTICIDE ISSUED BY THE DEPARTMENT
OF AGRICULTURE RESEARCH SERVICE TO OTHER FIRMS.
CONSIDERING PROTESTANT'S THREE COMPLAINTS SEPARATELY; FIRST - NO
DELAYS WERE ALLOWED THE CHARLOTTE AIRCRAFT COMPANY, RATHER THEY WERE
DECLARED IN DEFAULT 11 DAYS AFTER REPORTING DATE, AND THE CONTRACT WAS
SUBSEQUENTLY AWARDED TO PROTESTANT; SECOND - THE DELAYED STARTING DATE
ON A CONTRACT WITH CHARLOTTE AIRCRAFT CO., WAS DUE TO DIFFICULTY
EXPERIENCED BY THE GUIDANCE SYSTEM CONTRACTOR AND NO SPECIAL FAVORS WERE
GRANTED THE AIRLINE COMPANY; THIRD - THE DELAYED STARTING DATE ON A
CONTRACT WITH CHRISTLER FLYING SERVICE, LOW BIDDER, WAS DUE TO
DIFFICULTIES EXPERIENCED BY THE GUIDANCE SYSTEM COMPANY IN OBTAINING A
PROPER GUIDANCE SIGNAL, AND THERE WAS NO FAULT ON THE PART OF CHRISTLER.
FURTHER, THE AMENDMENT TO THE SOLICITATION WAS REQUIRED BECAUSE OF AN
AMBIGUITY RESULTING FROM THE REQUIREMENT IN ONE SECTION THAT ALL TESTING
BY FAA BE COMPLETED BEFORE STARTING DATE AND THE DIRECTION ELSEWHERE IN
THE SOLICITATION THAT THE GOVERNMENT REPRESENTATIVE REJECT AIRCRAFT THAT
HAS NOT COMPLETED SUCH TESTS PRIOR TO THE REPORTING DATE. THE CHANGE
INURED TO THE BENEFIT OF ALL PROSPECTIVE APPLICATORS AND THERE WERE NO
IMPROPRIETIES ON THE PART OF THE CONTRACTING OFFICER. THE PROTEST IS
THEREFORE DENIED.
TO CLARK'S AERIAL SERVICE, INCORPORATED:
REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 19, 1970, WITH
ENCLOSURES, AND YOUR TELEFAX DATED SEPTEMBER 22, 1970, PROTESTING THE
AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS NO.
34-R-ARS-71, ISSUED BY THE UNITED STATES DEPARTMENT OF AGRICULTURE
RESEARCH SERVICE, MINNEAPOLIS, MINNESOTA. YOU ALSO PROTEST THE
PROCEDURES EMPLOYED BY THE CONTRACTING OFFICER IN THE PROCUREMENT AND
ADMINISTRATION OF CONTRACTS FOR AERIAL APPLICATION OF INSECTICIDE. YOU
CONTEND THAT REPEATED DIGRESSIONS HAVE BEEN MADE FROM THE TERMS OF THE
PROSPECTUSES WHICH PROSPECTIVE BIDDERS ASSUME WILL BE ADHERED TO. IN
THIS CONNECTION, YOU ALSO REFER TO THE CONTRACT AWARDED UNDER INVITATION
FOR BIDS NO. 52-R-ARS-71. THE CONTRACT RESULTING FROM INVITATION FOR
BIDS NO. 34-R-ARS-71 WILL BE REFERRED TO AS THE "SHREVEPORT" CONTRACT
AND THE CONTRACT RESULTING FROM INVITATION FOR BIDS NO. 52-R-ARS-71 WILL
BE REFERRED TO AS THE "TUPELO" CONTRACT. THE SHREVEPORT CONTRACT WAS
FOR SERVICES IN THE STATE OF MISSISSIPPI AND THE TUPELO CONTRACT FOR
SERVICES IN LOUISIANA AND TEXAS. PARTICULAR OBJECTION IS MADE TO THE
ALLEGED PRACTICE OF THE GOVERNMENT CONTRACTING OFFICERS IN PROVIDING
EXTENSIONS OF TIME TO SUCCESSFUL LOW BIDDERS TO QUALIFY THEIR AIRPLANES
NOTWITHSTANDING PROVISIONS IN THE PROSPECTUSES STATING THAT A GOVERNMENT
REPRESENTATIVE WOULD REJECT ANY AIRCRAFT THAT HAD NOT COMPLETED CERTAIN
TESTS, CONCERNING CAPABILITY OF PERFORMING THE SERVICES REQUIRED, PRIOR
TO THE REPORTING DATE.
ONE INSTANCE IS CITED IN THE CASE OF THE SPRING CONTRACT AT
SHREVEPORT. IT IS STATED THAT IN MAY, 1970, CHARLOTTE AVIATION WAS
AWARDED A CONTRACT AND THE GOVERNMENT PERMITTED CHARLOTTE AVIATION IN
EXCESS OF THREE WEEKS OF THE REPORTING DATE TO QUALIFY AND THAT IN SPITE
OF THE TIME EXTENSION CHARLOTTE AVIATION WAS UNABLE TO QUALIFY. A
SECOND COMPLAINT, IN THE CASE OF THE SHREVEPORT CONTRACT, IS THAT,
ALTHOUGH THE REPORTING DATE WAS SEPTEMBER 8TH, THE DEPARTMENT OF
AGRICULTURE ISSUED AN AMENDMENT DATED SEPTEMBER 9TH, TO THE PROSPECTUS
TO THE EFFECT THAT QUALIFYING REQUIREMENTS WOULD HAVE TO BE MET PRIOR TO
OFFICIAL STARTING DATE OF OPERATIONS (SEPTEMBER 14) RATHER THAN THE
REPORTING DATE.
THE THIRD COMPLAINT CONCERNS THE TUPELO CONTRACT. IT IS STATED THAT
THE CIRCUMSTANCES ARE SIMILAR TO THOSE OBTAINING IN THE SHREVEPORT
CONTRACT. IT IS ALLEGED THAT SEVERAL DAYS AFTER BID OPENING, THE LOW
BIDDER FINDING ITS OWN AIRPLANES UNPREPARED DECIDED TO USE THE AIRPLANES
OF ANOTHER COMPANY; THAT THESE LATTER AIRPLANES HAD NOT BEEN FAA
APPROVED FOR USE IN A CONGESTED AREA; THAT TESTS WERE CONDUCTED FOR
THREE DAYS AFTER THE REPORTING DATE OF SEPTEMBER 8, 1970; THAT FAA
TESTS FOR APPROVAL WERE CONDUCTED ON SEPTEMBER 12TH; THAT UNDER THE
PROSPECTUS FAA APPROVAL WAS REQUIRED PRIOR TO THE REPORTING DATE.
THE THREE SPECIFIC COMPLAINTS WILL BE CONSIDERED SEPARATELY. THE
SPRING 1970 CONTRACT
IT IS ADMINISTRATIVELY REPORTED AS FOLLOWS:
MR. CLARK " *** REFERS TO A CONTRACT AWARDED TO CHARLOTTE AIRCRAFT
COMPANY AND ALSO STATES THAT WE ALLOWED THEM 3 WEEKS TO QUALIFY. THIS
IS AN EXAGGERATION. OUR RESPONSE TO THIS IS:
1. THE FIRST AIRCRAFT WAS DUE IN SHREVEPORT MAY 17. IT ARRIVED ON
TIME.
2. THE SECOND AIRCRAFT WAS DUE MAY 18; IT ARRIVED MAY 20.
3. SWATH CHECKS DETERMINED THE DISPERSAL APPARATUS UNACCEPTABLE.
4. CHARLOTTE AIRCRAFT COMPANY WAS DECLARED IN DEFAULT MAY 28, 11
DAYS AFTER THE REPORTING DATE.
MR. CLARK FAILED TO MENTION THAT THE CHARLOTTE AIRCRAFT COMPANY WAS
DECLARED IN DEFAULT, THAT THE CONTRACT WAS THEN AWARDED TO CLARK'S
AERIAL SERVICE, AND THAT IT THEN TOOK HIM MORE THAN 2 WEEKS TO GET INTO
OPERATION EVEN THOUGH HE TOLD *** OTHERS THAT HE WAS PREPARED TO BEGIN
IMMEDIATELY."
IT THUS APPEARS THAT THE RECORD DOES NOT SUPPORT YOUR CONTENTION THAT
CHARLOTTE AVIATION WAS PERMITTED IN EXCESS OF THREE WEEKS TO QUALIFY OR
THAT THE CONTRACTING OFFICER DID NOT ACT PROMPTLY UNDER THE
CIRCUMSTANCES. THE SHREVEPORT CONTRACT
THE RECORD SHOWS THAT THE INVITATION FOR THIS CONTRACT WAS ISSUED ON
AUGUST 14, 1970, AND WAS SENT TO 17 PROSPECTIVE BIDDERS. THE BIDS WERE
OPENED ON THE EXTENDED BID OPENING DATE, SEPTEMBER 8, 1970, WITH THREE
BIDS RECEIVED. BROWNFIELD AERO WAS THE APPARENT LOW BIDDER. UPON BEING
ADVISED THAT BROWNFIELD AERO DID NOT HAVE THE NECESSARY AIRPLANES, A
TELEPHONE CALL WAS MADE TO BROWNFIELD AERO ON SEPTEMBER 9, 1970, AND
INQUIRY MADE WHETHER THEY ACTUALLY HAD THE AIRPLANES. MR. HICKS OF
BROWNFIELD AERO REPLIED THAT HE THOUGHT HE HAD THE NECESSARY AIRPLANES
BUT THAT A LIEN HAD BEEN PLACED AGAINST THEM AND THEY WERE NOT
AVAILABLE. BROWNFIELD AERO WAS ALLOWED AN EXTRA DAY TO SEE IF IT COULD
OBTAIN THE AIRPLANES. ON SEPTEMBER 10, 1970, BROWNFIELD AERO ADVISED
THAT IT HAD NO AIRPLANES, WHEREUPON BROWNFIELD AERO WAS ADVISED THAT
UNDER THE CIRCUMSTANCES ITS BID WOULD HAVE TO BE DECLARED
"UNRESPONSIVE". WE MUST NOTE HERE THAT THE BID SHOULD NOT HAVE BEEN
DECLARED "UNRESPONSIVE" BUT THAT IT SHOULD HAVE BEEN REJECTED ON THE
BASIS OF NONRESPONSIBILITY OF THE PROPOSER.
THE CONTRACT WAS THEN AWARDED TO CHARLOTTE AIRCRAFT CORPORATION ON
SEPTEMBER 11, 1970. THEY WERE REQUIRED TO REPORT SEPTEMBER 14, 1970, TO
TUPELO, MISSISSIPPI, FOR INSTALLATION OF THE GUIDANCE SYSTEM AND FOR
FEDERAL AVIATION ADMINISTRATION (FAA) INSPECTION PRIOR TO BEGINNING THE
SPRAY WORK, SEPTEMBER 21, 1970, AT SHREVEPORT, LOUISIANA.
THE STARTING DATE WAS DELAYED TO SEPTEMBER 25, 1970, THROUGH NO FAULT
OF THE CONTRACTOR BUT DUE TO A REQUEST FOR DELAY PRIMARILY FROM THE FAA
AND ALSO FROM THE GUIDANCE SYSTEM CONTRACTOR. ALL PARTIES CONCERNED
AGREED TO THE EXTENSION OF TIME. ALTHOUGH FAA INSPECTION WAS COMPLETED
BY SEPTEMBER 25, 1970, THE GUIDANCE SYSTEM CONTRACTOR WAS EXPERIENCING
DIFFICULTY IN MAKING THE ELECTRONIC SIGNAL SYSTEM WORK SATISFACTORILY.
FULL SCALE SPRAYING OF INSECTICIDE BEGAN ON OCTOBER 2, 1970.
IT THUS APPEARS THAT THE AIRPLANES MET ALL REQUIREMENTS PRIOR TO THE
STARTING DATES AND DELAYS IN STARTING WERE NOT OF THE CONTRACTOR'S
MAKING.
WE FIND NO EVIDENCE OF ANY IMPROPRIETIES ON THE PART OF THE
CONTRACTING OFFICER OR THAT SPECIAL FAVORS WERE GRANTED. THE TUPELO
CONTRACT
THE SOLICITATION FOR THIS CONTRACT WAS ISSUED ON AUGUST 17, 1970, TO
COVER AERIAL APPLICATION OF INSECTICIDE FOR FIRE ANT CONTROL OVER A
CERTAIN AREA IN THE STATE OF MISSISSIPPI. FIVE BIDS WERE OPENED ON
SEPTEMBER 3, 1970, AND CHRISTLER FLYING SERVICE WAS THE LOW BIDDER. IT
WAS LEARNED THAT CHRISTLER'S OWN PLANES COULD NOT BE MADE READY FOR WORK
ON THE CONTRACT IN TIME FOR THE STARTING DATE, BUT THAT CHRISTLER HAD
ARRANGED TO LEASE APPROPRIATE AIRPLANES FROM ANOTHER COMPANY. ALTHOUGH
THE ESTIMATED STARTING DATE IN THE SOLICITATION WAS ORIGINALLY SEPTEMBER
8, 1970, THE ACTUAL STARTING DATE WAS SET AT SEPTEMBER 14, 1970, BY
AMENDMENT TO THE SOLICITATION WHICH WAS ACKNOWLEDGED BY EACH OF THE
BIDDERS. CHRISTLER WAS NOTIFIED OF THE AWARD TO IT ON SEPTEMBER 4, 1970.
THIS NOTICE INCLUDED INSTRUCTIONS TO REPORT BY MIDNIGHT, SEPTEMBER 8,
1970, AT THE TUPELO, MISSISSIPPI AIRPORT TO BE READY TO START AERIAL
APPLICATION OF INSECTICIDE NOT LATER THAN SEPTEMBER 14, 1970. THE
GUIDANCE SYSTEM EQUIPMENT INSTALLER WAS REQUIRED TO BE AT TUPELO AIRPORT
AT THE SAME TIME TO BEGIN WORK INSTALLING THE ELECTRONIC GUIDANCE
EQUIPMENT WHICH WAS TO BE USED FOR GUIDING THE AIRCRAFT IN THE
APPLICATION WORK. THE PLANES WERE APPROVED BY FAA AND READY FOR
APPLICATION WORK ON SEPTEMBER 12, 1970 (A SATURDAY). UNDER NORMAL
CIRCUMSTANCES, NO APPLICATION WORK IS DONE ON SATURDAY OR SUNDAY AND THE
AIRPLANES WERE HELD OVER FOR STARTING ON SEPTEMBER 14, 1970. HOWEVER,
DUE TO DIFFICULTIES EXPERIENCED BY THE GUIDANCE SYSTEM INSTALLING
COMPANY IN OBTAINING A PROPER GUIDANCE SIGNAL, THE APPLICATION OF THE
INSECTICIDE WAS DELAYED. THIS DIFFICULTY ACTUALLY PREVENTED APPLICATION
FROM SEPTEMBER 14, 1970, THROUGH SEPTEMBER 22, 1970. APPLICATION WORK
STARTED SEPTEMBER 23, 1970.
HENCE, IT CAN BE SEEN THAT THERE WAS NO FAULT ON THE PART OF
CHRISTLER AND NO EXTENSIONS GIVEN OR PARTIALITY SHOWN TO CHRISTLER.
CONCERNING THE CHANGE IN THE PROSPECTUS RELATIVE TO THE REPORTING AND
STARTING DATES, THE CONTRACTING OFFICER STATES AS FOLLOWS:
"ON TUESDAY, AUGUST 25, 1970, AT A MEETING HELD IN ATLANTA, GEORGIA,
AN AMBIGUITY IN PROSPECTUS 27-R-ARS (ON WHICH THIS CONTRACT IS BASED)
WAS CALLED TO OUR ATTENTION. SECTION II, PAGE 11, PARAGRAPH C 1 A
STATES, 'THE CONTRACTOR SHALL, PRIOR TO THE STARTING DATE, COMPLETE ALL
FLIGHT TESTS REQUIRED BY FAA TO OPERATE HIS AIRCRAFT OVER CONGESTED
AREAS'. PARAGRAPH C 1 B STATES, 'A GOVERNMENT REPRESENTATIVE WILL
REJECT ANY AIRCRAFT THAT HAS NOT COMPLETED SUCH TESTS PRIOR TO THE
REPORTING DATE'. IT IS OBVIOUS THAT 'REPORTING DATE' AND 'STARTING DATE'
ARE NOT THE SAME. PARAGRAPH C 1 B WAS CORRECTED SEPTEMBER 9, 1970, BY
ADDENDUM NO. 1 TO PROSPECTUS 27-R-ARS TO INDICATE THAT THE WORD
'REPORTING' SHOULD NOT HAVE BEEN USED AND WAS CORRECTED TO READ
'STARTING'. A SIMILAR CORRECTION WAS MADE TO LINE 4, PARAGRAPH G-2,
PAGE 9. ACTUAL MAILING OF THIS ADDENDUM WAS MADE THE AFTERNOON OF
SEPTEMBER 10, 1970, TO BETWEEN 275 AND 300 AERIAL APPLICATORS WHO HAD
RECEIVED THE ORIGINAL PROSPECTUS. FAA TESTS MUST BE PASSED BEFORE THE
APPLICATOR CAN START THE WORK. THE PURPOSE IN SPECIFYING A REPORTING
DATE IS SOLELY TO PROVIDE TIME IN WHICH THE APPLICATOR CAN GET HIS
PLANES READY, PASS ANY REQUIRED TESTS OR CHECKS IMPOSED BY ARS OR FAA
AND START THE ACTUAL APPLICATION JOB BY THE SET STARTING DATE."
IT IS OUR OPINION THAT THIS CHANGE INURES TO THE BENEFIT OF ALL
PROSPECTIVE APPLICATORS AND NOT TO ANY INDIVIDUAL COMPANY. THE CHANGE
WAS OBVIOUSLY MADE AT THE REQUEST OF THE CONCERNED AIRPLANE OWNERS. IN
THE PARTICULAR INSTANCE CITED, NO PARTIALITY WAS SHOWN TO CHARLOTTE
AVIATION.
WE HAVE REVIEWED THE MATTER CAREFULLY AND CONCLUDE THAT NO
IMPROPRIETIES OCCURRED ON THE PART OF THE CONTRACTING OFFICER.
B-171061, JAN 29, 1971
BID PROTEST - BIDDER RESPONSIVENESS - OPTIONS
DECISION AFFIRMING THE PROTEST OF ELECTRONIC PRODUCTS DIVISION, THE
SINGER COMPANY IN CONNECTION WITH AN INVITATION SOLICITING BIDS FOR
CERTAIN METERS ON A BRAND NAME OR EQUAL BASIS AND FOR A MAINTENANCE
REPAIR KIT.
PROTESTANT, SECOND LOW BIDDER INCLUDED IN ITS BID ON THE METERS THE
PRICE FOR ITEM 2 - THE REPAIR KIT, ALTHOUGH THE SOLICITATION STATED THAT
ITEM 2 IS AN OPTION WHICH IS TO BE SUPPLIED ONLY IF AND TO THE EXTENT
THE OPTION IS EXERCISED; SINCE THE NET EFFECT OF THE BID WAS TO INCLUDE
THE REPAIR KIT AND NO PREJUDICE TO OTHER BIDDERS IS EVIDENT IN MAKING
THE AWARD TO PROTESTANT, THERE IS NO BASIS TO OBJECT TO THE AWARD TO
ELECTRONIC PRODUCTS DIVISION, THE SINGER COMPANY.
TO MR. SECRETARY:
REFERENCE IS MADE TO A LETTER RECEIVED IN THIS OFFICE ON NOVEMBER 25,
1970, SER 121-00C, FROM THE DIRECTOR OF CONTRACTS, NAVAL ELECTRONIC
SYSTEMS COMMAND, CONCERNING THE PROTEST BY THE ELECTRONIC PRODUCTS
DIVISION, THE SINGER COMPANY, AGAINST THE AWARD OF A CONTRACT TO ELECTRO
METRICS CORPORATION, UNDER INVITATION FOR BIDS NO. N00039-71-B-0202.
ITEM 1 OF THE INVITATION SOLICITED BIDS FOR CERTAIN METERS WITH
MANUALS ON A BRAND NAME OR EQUAL BASIS; ITEM 2 CALLED FOR MAINTENANCE
REPAIR ITEMS FOR ITEM 1. THE REMAINING ITEM IS NOT AT ISSUE. A NOTE IN
THE BID FORM DIRECTLY UNDER THE ITEMS STATES:
"OPTION ITEM TO WHICH CLAUSE ENTITLED 'OPTION FOR ELECTRONIC
MAINTENANCE REPAIR PARTS' IS APPLICABLE AND WHICH IS TO BE SUPPLIED ONLY
IF AND TO THE EXTENT SAID OPTION IS EXERCISED. OPTION WILL BE EXERCISED
BY THE COMMANDING OFFICER, ELECTRONIC SUPPLY OFFICE."
THE LOW BIDDER, ELECTRO METRICS CORPORATION, OFFERED AN "OR EQUAL"
FOR ITEM 1. THE DATA SUBMITTED WITH THE BID SHOWED THAT THE ITEM
OFFERED SUBSTANTIALLY EXCEEDED THE MAXIMUM WEIGHT AND SIZE LIMITS
INCLUDED IN THE SALIENT CHARACTERISTICS SET FORTH IN THE INVITATION.
ACCORDINGLY, THE BID WAS REJECTED AS NONRESPONSIVE.
THE SECOND LOW BIDDER, ELECTRONIC PRODUCTS DIVISION, THE SINGER
COMPANY, BID ON THE BRAND NAME EQUIPMENT (ITEM 1).
THE ELECTRONIC PRODUCTS DIVISION, THE SINGER COMPANY, IN ITS BID
STATED THAT THE PRICE FOR ITEM 2 WAS "INCLUDED IN ITEM 1." IN RESPONSE
TO A REQUEST FOR CLARIFICATION OF ITS BID, THE BIDDER ADVISED BY LETTER
DATED OCTOBER 20, 1970, THAT THE PRICE FOR ITEM 1 INCLUDED THE SPECIFIED
EQUIPMENT WITH MANUALS, AND ALSO A RECOMMENDED SPARE PARTS KIT. IT WAS
STATED THAT THE NOTE UNDER ITEM 2 DID NOT SPECIFICALLY STATE THAT THE
BIDDER SHOULD NOT QUOTE A PRICE FOR THE ITEM AS PAST SOLICITATIONS HAVE
UNDER SIMILAR CIRCUMSTANCES AND THAT UNDER PREVIOUS PROCUREMENTS FOR THE
EQUIPMENT GOVERNMENT AGENCIES HAVE INCLUDED THE SPARE PARTS KIT
(MAINTENANCE REPAIR PARTS) AS A MATTER OF COURSE. IT WAS FURTHER STATED
THAT THE SPARE PARTS KIT INCLUDED IN THE QUOTATION FOR ITEM 1 HAS A UNIT
PRICE OF $315 EACH FOR THE QUANTITY INVOLVED.
IT IS REPORTED THAT SINCE THE NET EFFECT OF THE BID OF THE SECOND LOW
BIDDER IS TO INCLUDE A SPARE PARTS KIT, WHICH ACTUALLY WAS NOT REQUIRED,
NO PREJUDICE TO OTHER BIDDERS IS EVIDENT IN MAKING AN AWARD TO THE
SECOND LOW BIDDER, BASED ON THE CONFIRMATION. THEREFORE, IT IS
PROPOSED, SUBJECT TO OUR APPROVAL, TO MAKE AWARD TO ELECTRONIC PRODUCTS
DIVISION, THE SINGER COMPANY, ON THE BASIS OF ITS BID PRICE, WHICH
INCLUDES A SPARE PARTS KIT.
UNDER THE CIRCUMSTANCES, AND SINCE THE BID IS LOW IN ANY EVENT, WE
SEE NO BASIS TO OBJECT TO THE PROPOSED AWARD TO THE ELECTRONIC PRODUCTS
DIVISION, THE SINGER COMPANY.
B-171116, JAN 29, 1971
BID PROTEST - CANCELLATION OF IFB - AMBIGUITY
DENIAL OF PROTEST BY D. G. MACHINERY AND GAGE CO., AGAINST
CANCELLATION OF INVITATION FOR BIDS FOR NUMERICALLY CONTROLLED LATHES
ISSUED BY WARNER ROBINS AIR MATERIAL AREA ON THE BASIS OF AN AMBIGUITY
IN THE INVITATION.
WHERE THE AIR FORCE INTENDED TO SOLICIT BIDS ON CONTROLLED LATHES
WITH OR WITHOUT A "TAILSTOCK" AND THE SPECIFICATION SHEET READ IN PART,
"DISTANCE BETWEEN CENTERS WITH TAILSTOCK FLUSH WITH END OF BED (MIN.)
54", SUCH A STATEMENT COULD BE CONSTRUED AS A REQUIREMENT FOR A
TAILSTOCK AND MAY HAVE MISLED BIDDERS. THEREFORE IT WAS CONCLUDED BY
THE CONTRACTING OFFICER THAT THE SPECIFICATION WAS AMBIGUOUS AND THAT
CANCELLATION PURSUANT TO ASPR 2-404.1(B)(I) WAS APPROPRIATE. THERE IS
NO JUSTIFICATION TO QUESTION THE ACTION OF THE AIR FORCE AND THE PROTEST
MUST BE DENIED.
TO D. G. MACHINERY AND GAGE COMPANY:
FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED OCTOBER 22, 1970 AND
NOVEMBER 5, 1970, WITH ENCLOSURES, PROTESTING THE CANCELLATION OF
INVITATION FOR BIDS NO. F09603-71-B-3100 ISSUED BY HEADQUARTERS, WARNER
ROBINS AIR MATERIEL AREA, ROBINS AIR FORCE BASE, GEORGIA.
THE INVITATION WAS ISSUED ON AUGUST 20, 1970, AS THE SECOND STEP OF A
TWO STEP PROCUREMENT FOR NUMERICALLY CONTROLLED LATHES. BIDS WERE
OPENED ON SEPTEMBER 22, 1970, AND D. G. MACHINERY AND GAGE COMPANY
(DGMG), WAS THE LOW EVALUATED BIDDER. HOWEVER, ON SEPTEMBER 28, 1970,
ONE OF THE OTHER BIDDERS, LODGE AND SHIPLEY COMPANY, QUESTIONED THE
INTENT OF THE SPECIFICATION REGARDING THE "TAILSTOCK." THE FIRM STATED
THAT THEY INTERPRETED THE SPECIFICATION TO REQUIRE A "TAILSTOCK" BUT
THAT THE EQUIPMENT TO BE FURNISHED BY THE LOW BIDDER, DGMG, DID NOT
INCLUDE THE TAILSTOCK.
THE ADMINISTRATIVE REPORT REVEALS CERTAIN BACKGROUND INFORMATION
SHOWING THAT THE PROCUREMENT ACTION UNDER THE FIRST STEP WAS INITIATED
USING A PURCHASE DESCRIPTION WHICH REQUIRED THE FURNISHING OF A
TAILSTOCK. DURING THE EVALUATION OF TECHNICAL PROPOSALS UNDER THE FIRST
STEP, A DECISION WAS MADE TO INCORPORATE PURCHASE DESCRIPTION WRNE
3416-341, APRIL 10, 1970, IN LIEU OF THE PRIOR PURCHASE DESCRIPTION.
SEE B-170107, SEPTEMBER 16, 1970. IT IS EXPLAINED THAT, AMONG OTHER
CONSIDERATIONS, IT WAS THE INTENT OF THE ACTIVITY PREPARING WRNE
3416-341 TO PERMIT, BUT NOT REQUIRE, THE TAILSTOCK FEATURE.
SPECIFICATION WRNE 3416-341, UNDER A HEADING ENTITLED "DATA SHEET"
(PAGE 12 OF THE SPECIFICATION), READS AS FOLLOWS: "DISTANCE BETWEEN
CENTERS WITH TAILSTOCK FLUSH WITH END OF BED) (MIN.) 54" ". THE LOW
BIDDER'S TECHNICAL PROPOSAL DID NOT CONTEMPLATE FURNISHING A TAILSTOCK,
BUT LODGE AND SHIPLEY INTERPRETED THE SPECIFICATION AS REQUIRING THIS
FEATURE. THE FOLLOWING STATEMENT APPEARED IN LODGE AND SHIPLEY'S STEP
ONE TECHNICAL PROPOSAL CORRESPONDENCE: "THE TECHNICAL SPECS, PAGE 12,
PAR. 3.33 UNDER REFERENCE DATA SHEET, INDICATES DISTANCE BETWEEN CENTERS
WITH TAILSTOCK FLUSH WITH END OF BED MINIMUM 54". THIS MEANS THAT THE
N/C LATHE MUST BE EQUIPPED WITH A TAILSTOCK AND CAPABLE TO TURNING
OPERATIONS WITH THE WORKPIECE SUPPORTED ON THE TAILSTOCK CENTER." IN
VIEW OF THE ABOVE, IT WAS CONCLUDED BY THE CONTRACTING OFFICER THAT THE
SPECIFICATION WAS AMBIGUOUS AND THAT CANCELLATION PURSUANT TO ASPR
2-404.1(B)(I) WAS APPROPRIATE.
YOU CONTEND BASICALLY THAT YOUR TECHNICAL PROPOSAL WAS ACCEPTED IN
STEP ONE OF THIS TWO STEP PROCUREMENT; YOU SUBMITTED THE LOW BID IN
RESPONSE TO STEP TWO; THE CANCELLATION WAS CAUSED BY A THREATENED
PROTEST; AND THE SPECIFICATION IS NOT AMBIGUOUS AS CLAIMED BY THE
CONTRACTING OFFICER.
UNDER 10 U.S.C. 2305(B), THE AIR FORCE WAS REQUIRED TO INCLUDE IN THE
INVITATION SPECIFICATIONS WHICH WERE SUFFICIENTLY DESCRIPTIVE IN
LANGUAGE TO PERMIT FULL AND FREE COMPETITION. THE RECORD ESTABLISHES
THAT WHILE THE AIR FORCE INTENDED TO SOLICIT BIDS ON EQUIPMENT WITH OR
WITHOUT A TAILSTOCK, LODGE AND SHIPLEY INTERPRETED THE LANGUAGE OF WRNE
3416-341, REFERENCING THE 54-INCH DISTANCE BETWEEN CENTERS WITH
TAILSTOCK FLUSH WITH THE END OF BED, AS A REQUIREMENT FOR A TAILSTOCK.
FURTHERMORE, IT IS REPORTED THAT SOME OF THE OTHER BIDDERS MAY HAVE BEEN
SIMILARLY MISLED BY THE SPECIFICATION. UNDER THE CIRCUMSTANCES, WE
THINK THE CANCELLATION ACTION WAS PROPER.
AS TO THE EFFECT OF YOUR STATUS AS LOW BIDDER UNDER THE DEFECTIVE
INVITATION, YOUR ATTENTION IS DIRECTED TO THE PROVISIONS OF PARAGRAPH
C-10(B) OF THE TERMS AND CONDITIONS OF THE INVITATION RESERVING TO THE
GOVERNMENT THE RIGHT TO REJECT ANY AND ALL BIDS. A REQUEST FOR BIDS OR
OFFERS DOES NOT IMPART ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS
RECEIVED, AND A CONTRACTING OFFICER IS NOT BOUND TO ACCEPT A BID WHERE
HE DETERMINES THAT THE PUBLIC INTEREST WOULD BE SERVED BY A REJECTION OF
ALL BIDS AND READVERTISEMENT OF A PROCUREMENT UNDER SPECIFICATIONS
STATING THE GOVERNMENT'S NEEDS MORE ACCURATELY. 17 COMP. GEN. 554
(1938), AND COURT CASES CITED THEREIN.
ACCORDINGLY, WE SEE NO JUSTIFIABLE BASIS ON WHICH TO QUESTION THE
ACTION BY AIR FORCE IN THIS INSTANCE, AND YOUR PROTEST MUST BE DENIED.
B-171376, JAN 29, 1971
BID PROTEST - LATE BID
DECISION DENYING PROTEST BY SILVER STATE OIL CO., AGAINST REJECTION
OF ITS BID IN RESPONSE TO IFB FOR FUEL OIL AND MOTOR GASOLINE ISSUED BY
THE DEFENSE FUEL SUPPLY CENTER.
A BID RECEIVED AFTER BID OPENING NOT DUE TO A DELAY IN THE MAILS, BUT
TO PROTESTANT'S FAILURE TO MAIL IT IN SUFFICIENT TIME TO HAVE BEEN
RECEIVED IN DUE COURSE (WHICH IS CONFIRMED BY THE POSTMASTERS AT THE
PLACES OF ORIGIN AND DESTINATION) WAS PROPERLY REJECTED.
TO SILVER STATE OIL CO.:
REFERENCE IS MADE TO YOUR PROTEST WHICH WAS REFERRED TO OUR OFFICE BY
THE HONORABLE HOWARD W. CANNON, UNITED STATES SENATE, AGAINST THE
REJECTION OF YOUR FIRM'S BID SUBMITTED IN RESPONSE TO INVITATION FOR
BIDS (IFB) NO. DSA600-70-B-0007, ISSUED BY THE DEFENSE FUEL SUPPLY
CENTER (DFSC), CAMERON STATION, ALEXANDRIA, VIRGINIA.
THE IFB, ISSUED ON MAY 26, 1970, SOLICITED BIDS FOR FUEL OIL AND
MOTOR GASOLINE TO BE SUPPLIED TO DFSC REGION 7 FOR THE ORDERING PERIOD
OF NOVEMBER 1, 1970, THROUGH OCTOBER 31, 1971. BIDS WERE OPENED AS
SCHEDULED ON JUNE 30, 1970, AT 1 P.M. LOCAL TIME, ALEXANDRIA, VIRGINIA.
ON THE FOLLOWING DAY, JULY 1, 1970, AT 8:30 A.M., E.D.T., YOUR BID WAS
RECEIVED AT THE PROCURING ACTIVITY IN AN AIR MAIL SPECIAL DELIVERY
ENVELOPE BEARING A CERTIFIED MAIL LABEL NO. 656957 AND POSTMARKED
"VICTORVILLE, CALIFORNIA, JE (JUNE) 29 1 P.M." BY LETTER DATED JULY 1,
1970, DFSC ADVISED YOUR FIRM THAT ITS LATE BID COULD NOT BE CONSIDERED
FOR AWARD UNLESS EVIDENCE WAS SUBMITTED WHICH WOULD PROVE THAT THE LATE
RECEIPT OF THE BID BY THE PROCURING ACTIVITY WAS DUE SOLELY TO A DELAY
IN THE MAIL FOR WHICH YOUR FIRM WAS NOT RESPONSIBLE.
PARAGRAPH 8 OF THE IFB'S INSTRUCTIONS AND CONDITIONS CAUTIONS
PROSPECTIVE BIDDERS AS FOLLOWS:
"(A) OFFERS AND MODIFICATIONS OF OFFERS (OR WITHDRAWALS THEREOF, IF
THIS SOLICITATION IS ADVERTISED) RECEIVED AT THE OFFICE DESIGNATED IN
THE SOLICITATION AFTER THE EXACT HOUR AND DATE SPECIFIED FOR RECEIPT
WILL NOT BE CONSIDERED UNLESS: (1) THEY ARE RECEIVED BEFORE AWARD IS
MADE; AND EITHER (2) THEY ARE SENT BY REGISTERED MAIL, OR BY CERTIFIED
MAIL FOR WHICH AN OFFICIAL DATED POST OFFICE STAMP (POSTMARK) ON THE
ORIGINAL RECEIPT FOR CERTIFIED MAIL HAS BEEN OBTAINED, OR BY TELEGRAPH
IF AUTHORIZED, AND IT IS DETERMINED BY THE GOVERNMENT THAT THE LATE
RECEIPT WAS DUE SOLELY TO DELAY IN THE MAILS, OR DELAY BY THE TELEGRAPH
COMPANY, FOR WHICH THE OFFEROR WAS NOT RESPONSIBLE; OR (3) IF SUBMITTED
BY MAIL (OR BY TELEGRAM IF AUTHORIZED) IT IS DETERMINED BY THE
GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO MISHANDLING BY THE
GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION; PROVIDED, THAT
TIMELY RECEIPT AT SUCH INSTALLATION IS ESTABLISHED UPON EXAMINATION OF
AN APPROPRIATE DATE OR TIME STAMP (IF ANY) OF SUCH INSTALLATION, OR OF
OTHER DOCUMENTARY EVIDENCE OF RECEIPT (IF READILY AVAILABLE) WITHIN THE
CONTROL OF SUCH INSTALLATION OR OF THE POST OFFICE SERVING IT. ***
"(B) OFFERORS USING CERTIFIED MAIL ARE CAUTIONED TO OBTAIN A RECEIPT
FOR CERTIFIED MAIL SHOWING A LEGIBLE, DATED POSTMARK AND TO RETAIN SUCH
RECEIPT AGAINST THE CHANCE THAT IT WILL BE REQUIRED AS EVIDENCE THAT A
LATE OFFER WAS TIMELY MAILED.
"(C) THE TIME OF MAILING OF LATE OFFERS SUBMITTED BY REGISTERED OR
CERTIFIED MAIL SHALL BE DEEMED TO BE THE LAST MINUTE OF THE DATE SHOWN
IN THE POSTMARK ON THE REGISTERED MAIL RECEIPT OR REGISTERED MAIL
WRAPPER OR ON THE RECEIPT FOR CERTIFIED MAIL UNLESS THE OFFEROR
FURNISHES EVIDENCE FROM THE POST OFFICE STATION OF MAILING WHICH
ESTABLISHES AN EARLIER TIME. IN THE CASE OF CERTIFIED MAIL, THE ONLY
ACCEPTABLE EVIDENCE IS AS FOLLOWS: (1) WHERE THE RECEIPT FOR CERTIFIED
MAIL IDENTIFIES THE POST OFFICE STATION OF MAILING, EVIDENCE FURNISHED
BY THE OFFEROR WHICH ESTABLISHES THAT THE BUSINESS DAY OF THAT STATION
ENDED AT AN EARLIER TIME, IN WHICH CASE THE TIME OF MAILING SHALL BE
DEEMED TO BE THE LAST MINUTE OF THE BUSINESS DAY OF THAT STATION; OR
(2) AN ENTRY IN INK ON THE RECEIPT FOR CERTIFIED MAIL SHOWING THE TIME
OF MAILING AND THE INITIALS OF THE POSTAL EMPLOYEE RECEIVING THE ITEM
AND MAKING THE ENTRY, WITH APPROPRIATE WRITTEN VERIFICATION OF SUCH
ENTRY FROM THE POST OFFICE STATION OF MAILING, IN WHICH CASE THE TIME OF
MAILING SHALL BE THE TIME SHOWN IN THE ENTRY. IF THE POSTMARK ON THE
ORIGINAL RECEIPT FOR CERTIFIED MAIL DOES NOT SHOW A DATE, THE OFFER
SHALL NOT BE CONSIDERED."
THE EVIDENCE SUBMITTED FROM THE SOURCES REQUIRED BY THE IFB REVEALS
THAT YOUR BID WAS NOT MAILED IN SUFFICIENT TIME TO HAVE BEEN DELIVERED
TIMELY FOR THE SCHEDULED BID OPENING. IN THIS REGARD, THE POSTMASTER OF
VICTORVILLE, CALIFORNIA, IN A STATEMENT OF JULY 3, 1970, ADVISED THAT
YOUR FIRM'S BID "WAS DISPATCHED FROM THIS POST OFFICE BY STAR ROUTE
#92362 - VICTORVILLE - SAN BERNARDINO, CALIF. WHICH WAS SCHEDULED TO
DEPART AT 7:00 P.M. JUNE 29, 1970." IN A REPORT DATED JULY 10, 1970, THE
SUPERINTENDENT OF MAILS, ALEXANDRIA, VIRGINIA, STATED THAT YOUR BID
MAILED UNDER THE CONDITIONS AND TIMES OF MAILING DESCRIBED BY THE
POSTMASTER OF VICTORVILLE, CALIFORNIA, SHOULD HAVE ARRIVED AT DFSC AT
2:22 P.M. ON JUNE 30, 1970, OR 1 HOUR AND 22 MINUTES SUBSEQUENT TO THE
TIME SET FOR BID OPENING. THIS ARRIVAL TIME WAS CONFIRMED BY THE
POSTMASTER OF ALEXANDRIA, VIRGINIA, WHO, IN A LETTER TO DFSC OF DECEMBER
4, 1970, STATED:
"THIS WILL CONFIRM OUR CONVERSATION OF DECEMBER 2 (WEDNESDAY) AND
ADVISES THAT A CERTIFIED AIRMAIL, SPECIAL DELIVERY, FLAT ARRIVING AT THE
AIRMAIL FIELD, WASHINGTON, D.C. AT 9:39 A.M. WOULD BE RECEIVED AT THIS
OFFICE ON THE NEXT AVAILABLE RECEIPT OF MAIL - 11:30 A.M. FROM THE
AIRMAIL FIELD.
"THE DISPATCH FROM THIS OFFICE TO THE DEFENSE FUEL SUPPLY CENTER IS
MADE AT 1:30 P.M. AND IS DUE TO ARRIVE AT DEFENSE FUEL SUPPLY AT 2:22
P.M. THIS WOULD BE THE EARLIEST POSSIBLE ARRIVAL TIME AT DEFENSE FUEL
SUPPLY OF MAILS ARRIVING AT THE AIRMAIL FIELD, WASHINGTON, D.C. AT 9:30
A.M."
WE NOTE THAT THE DECEMBER 4 LETTER WAS ADDRESSED TO LATER EVIDENCE
SUBMITTED BY THE POSTMASTER OF VICTORVILLE, CALIFORNIA, THAT THE PROPER
ROUTING OF YOUR BID WOULD HAVE RESULTED IN ITS ARRIVAL AT AIRMAIL FIELD,
WASHINGTON, D.C., AT 9:39 A.M., ON JUNE 30, 1970.
IN VIEW OF THE FOREGOING, WE FIND THAT THE LATE RECEIPT OF YOUR
FIRM'S BID WAS NOT DUE TO A DELAY IN THE MAILS, BUT TO YOUR FAILURE TO
MAIL IT IN SUFFICIENT TIME TO HAVE BEEN RECEIVED IN DUE COURSE. IN
THESE CIRCUMSTANCES, THE FAILURE OF THE PROCURING ACTIVITY TO CONSIDER
YOUR LATE BID FOR AWARD UNDER THE IFB WAS PROPER. SEE 46 COMP. GEN. 85,
89 (1966); 37 COMP. GEN. 35 (1957); B-161692, AUGUST 9, 1967.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-170230, JAN 28, 1971
BID PROTEST - TERMINATION OF CONTRACT IN GOVERNMENT INTEREST
DENIAL OF PROTEST OF FOREST LAWN MEMORIAL CHAPEL, INC., AGAINST THE
TERMINATION OF A CONTRACT FOR MORTUARY SERVICES AND AWARD OF AN
ADVERTISED CONTRACT ISSUED BY DEPARTMENT OF HEALTH, EDUCATION, AND
WELFARE TO ANCHORAGE FUNERAL CHAPEL, INC.
UPON PROTEST OF ANCHORAGE AGAINST THE AWARD OF THE CONTRACT TO FOREST
LAWN, PROTESTANT HERE, IT WAS DETERMINED THAT EVEN IF ANCHORAGE'S BID ON
ITEM 7 OF "$8,050 (CATHOLIC MASS - $45.00)" WAS INTERPRETED SO THAT THE
PARENTHETICAL REMARK WOULD BE CONSIDERED AN ADDITION, THE BID WAS STILL
LOW. THEREFORE, THE AWARD TO PROTESTANT WAS UNAUTHORIZED AND THE
PROCUREMENT AGENCY PROPERLY INVOKED THE TERMINATION FOR CONVENIENCE
CLAUSE OF THE CONTRACT TO RECTIFY THE ERRONEOUS AWARD.
TO FOREST LAWN MEMORIAL CHAPEL, INC.:
FURTHER REFERENCE IS MADE TO YOUR TELEFAX DATED SEPTEMBER 1, 1970,
PROTESTING THE TERMINATION OF CONTRACT NO. HSM 76-71-99 WHICH WAS
AWARDED TO YOUR FIRM BY THE ALASKA NATIVE MEDICAL CENTER, PUBLIC HEALTH
SERVICE, HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION, DEPARTMENT OF
HEALTH, EDUCATION, AND WELFARE, ANCHORAGE, ALASKA.
THE CONTRACT WAS AWARDED UNDER SOLICITATION NO. HSM 76-SOL-35-70,
COVERING MORTUARY SERVICES FOR THE PERIOD JULY 1, 1970, THROUGH JUNE 30,
1971. ITEM 7 OF THE SOLICITATION REQUESTED UNIT PRICE BIDS FOR 43
ESTIMATED "CHAPEL AND/OR GRAVESIDE SERVICES INCLUDING SERVICES OF
PRIEST, MINISTER OR RABBI AND ORGANIST."
THREE BIDS WERE RECEIVED AND WERE OPENED ON JUNE 25, 1970, IN THE
FOLLOWING AGGREGATE AMOUNTS COVERING THE EIGHT ITEMS OF THE
SOLICITATION:
ANCHORAGE FUNERAL CHAPEL, INC. $ 8,050
EVERGREEN MEMORIAL CHAPEL, INC. 8,673
FOREST LAWN MEMORIAL CHAPEL, INC. 11,085
THE LOW BIDDER INSERTED THE WORD "INCLUDED" IN THE UNIT PRICE COLUMN
OF ITEM 7 AND ADDED THE WORDS "(CATHOLIC MASS - $45.00)" AFTER THE ITEM
DESCRIPTION, QUOTED ABOVE.
THE RECORD INDICATES THAT ON JUNE 29, 1970, THE CONTRACTING OFFICER
TELEPHONED MR. GORDON GREENE OF ANCHORAGE IN AN ATTEMPT TO CLARIFY THE
CORPORATION'S LOW BID. AS A RESULT OF THIS CONVERSATION, IT WAS THE
CONTRACTING OFFICER'S UNDERSTANDING THAT THE $45 FOR A CATHOLIC MASS
WOULD BE AN "ADDITION." HE THEREFORE DETERMINED THAT THE LOW BIDDER HAD
QUALIFIED ITS BID AS TO ITEM 7 AND WAS THEREFORE NONRESPONSIVE TO THE
TERMS OF THE SOLICITATION.
THE SECOND LOW OFFEROR, EVERGREEN, BY LETTER STATED, WITH RESPECT TO
ITS BID ON ITEM 7, THAT THERE WOULD BE A $45 CHARGE FOR CATHOLIC AND/OR
RUSSIAN ORTHODOX SERVICES, AND ITS BID WAS ALSO DETERMINED TO BE
NONRESPONSIVE. YOUR FIRM, ALTHOUGH HIGH BIDDER, WAS DETERMINED TO BE
THE ONLY RESPONSIVE BIDDER UNDER THE SOLICITATION AND THE CONTRACT WAS
AWARDED TO YOU ON JUNE 29, 1970.
ON JULY 1, 1970, AS CONFIRMED BY LETTER OF JULY 6, MR. GREENE OF
ANCHORAGE CONTACTED THE CONTRACTING OFFICER TO PROTEST THE AWARD OF THE
CONTRACT TO YOUR FIRM. HE STATED THAT ITS BID ON ITEM 7 HAD BEEN
MISINTERPRETED IN THAT THE STATEMENT "CATHOLIC MASS - $45.00" WAS FOR
INFORMATION PURPOSES ONLY AND WAS NOT TO BE REGARDED AS AN ADDITIONAL
CHARGE TO THE GOVERNMENT. THE PROTEST PROMPTED A FULL REVIEW OF THE
CIRCUMSTANCES OF THE AWARD AND, EVENTUALLY, IT WAS ADMINISTRATIVELY
DETERMINED TO TERMINATE YOUR CONTRACT FOR THE CONVENIENCE OF THE
GOVERNMENT. THE CIRCUMSTANCES WHICH LED TO THE TERMINATION OF YOUR
CONTRACT ARE REPORTED BY THE DEPARTMENT OF HEALTH, EDUCATION, AND
WELFARE AS FOLLOWS:
"UPON REVIEW OF THE FILE IT WAS DETERMINED THAT ALL THREE BIDDERS
WERE RESPONSIVE TO THE TERMS OF THE SOLICITATION. HOWEVER, TWO OF THE
THREE BIDDERS ADDED EXPLANATORY INFORMATION TO ITEM 7, PERTAINING TO
RELIGIOUS SERVICES, AS FOLLOWS: THE ANCHORAGE FUNERAL CHAPEL, INC.
INSERTED THE WORDS, 'CATHOLIC MASS - $45.00, AND EVERGREEN MEMORIAL
CHAPEL, INC. REFERENCED A CHARGE OF $45.00 FOR EITHER CATHOLIC OR
RUSSIAN ORTHODOX SERVICES, BY SUBMITTAL OF A LETTER.
"IF THE REFERENCED CHARGES ARE CONSIDERED TO BE ADDITIONAL CHARGES
FOR PURPOSES OF BID EVALUATION (ESTIMATED QUANTITY 43 X $45.00 = $1,935)
THE FOLLOWING RESULT IS PRODUCED:
ANCHORAGE FUNERAL CHAPEL, INC. $ 8,050
EVERGREEN MEMORIAL CHAPEL, INC. 8,673
FOREST LAWN MEMORIAL CHAPEL, INC. 11,085
"IN VIEW OF THE FOREGOING, THE AWARD TO FOREST LAWN MEMORIAL CHAPEL
WAS IMPROPER, AND IT WAS DETERMINED TO BE IN THE BEST INTERESTS OF THE
GOVERNMENT THAT THE CONTRACT BE TERMINATED AND THE REQUIREMENT
RESOLICITED UNDER REVISED SPECIFICATIONS WITH SUB-ITEMS TO COVER
CATHOLIC, PROTESTANT, RUSSIAN ORTHODOX, AND OTHER RELIGIOUS SERVICES."
BY LETTER OF AUGUST 24, 1970, THE CONTRACTING OFFICER ADVISED YOUR
FIRM THAT THE PROTEST OF THE ANCHORAGE FUNERAL CHAPEL, INC., HAD BEEN
UPHELD AND THAT YOUR CONTRACT HAD BEEN TERMINATED FOR THE CONVENIENCE OF
THE GOVERNMENT.
FROM THE FOREGOING, IT WILL BE SEEN THAT EVEN WITH THE ADDITION OF
THE $45 CHARGE TO THE AGGREGATE BID PRICES OF THE TWO LOW BIDDERS, THEIR
RELATIVE STANDINGS ARE NOT AFFECTED. HENCE, SINCE ANCHORAGE'S BID WAS,
IN FACT, THE LOWEST BID RECEIVED AND SINCE BOTH THE LAW (41 U.S.C.
253(B)) AND THE REGULATIONS (FPR SEC. 1-2.407-1) CONTEMPLATE AWARD TO
THE LOWEST RESPONSIVE BIDDER, THE AWARD TO YOUR FIRM WAS UNAUTHORIZED.
IN SUCH CIRCUMSTANCES, THE PROCUREMENT AGENCY PROPERLY COULD INVOKE THE
TERMINATION FOR CONVENIENCE CLAUSE OF YOUR CONTRACT TO RECTIFY THE
ERRONEOUS AWARD.
IT HAS LONG BEEN RECOGNIZED BY THE COURTS AND BY OUR OFFICE THAT THE
AUTHORITY TO ENTER INTO A GOVERNMENT CONTRACT INCLUDES AUTHORITY TO
TERMINATE IT WHEN TO DO SO WOULD BE IN THE PUBLIC INTEREST AND TO MAKE A
BINDING AGREEMENT WITH THE CONTRACTOR IN FULL AND FINAL SETTLEMENT OF
HIS TERMINATION CLAIM. SEE 44 COMP. GEN. 466 (1965); UNITED STATES V
CORLISS STEAM-ENGINE COMPANY, 91 U.S. 321 (1875). IN THIS REGARD, THE
DETERMINATION WHETHER A CONTRACT SHOULD BE TERMINATED FOR THE
CONVENIENCE OF THE GOVERNMENT IS A MATTER OF ADMINISTRATIVE DECISION
WHICH DOES NOT REST WITH OUR OFFICE. SEE 47 COMP. GEN. 1 (1967), AND
CASES CITED. SEE PART 1-8 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR)
FOR THE POLICIES AND PROCEDURES APPLICABLE TO THE TERMINATION OF
CONTRACTS FOR THE CONVENIENCE OF THE GOVERNMENT.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-170691, JAN 28, 1971
CONTRACTS - MISTAKE IN BID - RESCISSION